EXHIBIT 1.1
FORM OF PROPOSED AGENCY AGREEMENT AMONG
FIRSTBANK CORP., FIRSTBANK NORTHWEST AND SANDLER X'XXXXX & PARTNERS, L.P.
1,725,000 Shares
(subject to increase up to 1,983,750 shares
in the event of an oversubscription)
FirstBank Corp.
(a Delaware corporation)
Common Stock
(par value $.01 per share)
AGENCY AGREEMENT
________________, 0000
Xxxxxxx X'Xxxxx & Partners, L.P.
Two World Trade Center, 000xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
FirstBank Corp., a Delaware corporation (the "Company"), and
FirstBank Northwest (formerly known as First Federal Bank of Idaho, a federal
savings bank) (the "Bank"), hereby confirm their agreement with Sandler X'Xxxxx
& Partners, L.P. ("Sandler X'Xxxxx" or the "Agent") with respect to the offer
and sale by the Company of 1,725,000 shares (subject to increase up to 1,983,750
shares in the event of an oversubscription) of the Company's Common Stock, par
value $.01 per share (the "Common Stock"). The shares of Common Stock to be sold
by the Company are hereinafter called the "Securities."
The Securities are being offered in accordance with the plan of
conversion (the "Plan") adopted by the Board of Directors of the Bank pursuant
to which the Bank intends to convert from a federally chartered mutual savings
bank to a federally chartered stock savings bank and issue all of its stock to
the Company (the "Stock Conversion"). Following the consummation of the Stock
Conversion, the Bank intends to relocate its main office to Clarkston,
Washington and convert from a federally chartered stock savings bank to a
Washington-chartered savings bank (the "Charter Conversion"). Pursuant to the
Plan, the Company is offering to the Bank's tax qualified employee benefit plans
(the "Employee Plans") and to certain of the Bank's depositors and borrowers
rights to subscribe for the Securities in a subscription offering (the
"Subscription Offering"). To the extent Securities are not subscribed for in the
Subscription
-2-
Offering, such Securities may be offered to certain members of the general
public, with preference given to certain natural persons and trusts of natural
persons who are permanent residents of NezPerce, Latah, Kootenai or Idaho
counties of Idaho, in a direct community offering (the "Direct Community
Offering" and together with the Subscription Offering, as each may be extended
or reopened from time to time, the "Subscription and Community Offering") to be
commenced concurrently with the Subscription Offering. It is currently
anticipated by the Bank and the Company that any Securities not subscribed for
in the Subscription and Community Offering will be offered, subject to Section 2
hereof, in a syndicated community offering (the "Syndicated Community
Offering"). The Subscription and Community Offering and the Syndicated
Community Offering are hereinafter referred to collectively as the "Offerings,"
and the conversion of the Bank from mutual to stock form, the conversion of the
Bank to a Washington-chartered institution, the acquisition of the capital stock
of the Bank by the Company and the Offerings are hereinafter referred to
collectively as the "Conversion." It is acknowledged that the number of
Securities to be sold in the Offerings may be increased or decreased as
described in the Prospectus (as hereinafter defined). If the number of
Securities is increased or decreased in accordance with the Plan, the term
"Securities" shall mean such greater or lesser number, where applicable.
The Company has filed with the Securities and Exchange Commission
(the "Commission") a registration statement on Form SB-2 (No. 333-23395),
including a related prospectus, for the registration of the Securities under the
Securities Act of 1933, as amended (the "Securities Act"), has filed such
amendments thereto, if any, and such amended prospectuses as may have been
required to the date hereof by the Commission in order to declare such
registration statement effective, and will file such additional amendments
thereto and such amended prospectuses and prospectus supplements as may
hereafter be required. Such registration statement (as amended to date, if
applicable, and as from time to time amended or supplemented hereafter) and the
prospectus constituting a part thereof (including in each case all documents
incorporated or deemed to be incorporated by reference therein and the
information, if any, deemed to be part thereof pursuant to the rules and
regulations of the Commission under the Securities Act, as from time to time
amended or supplemented pursuant to the Securities Act or otherwise (the
"Securities Act Regulations")), are hereinafter referred to as the "Registration
Statement" and the "Prospectus," respectively, except that if any revised
prospectus shall be used by the Company in connection with the Subscription and
Community Offering or the Syndicated Community Offering which differs from the
Prospectus on file at the Commission at the time the Registration Statement
becomes effective (whether or not such revised prospectus is required to be
filed by the Company pursuant to Rule 424(b) of the 1933 Act Regulations), the
term "Prospectus" shall refer to such revised prospectus from and after the time
it is first provided to the Agent for such use.
Concurrently with the execution of this Agreement, the Company is
delivering to the Agent copies of the Prospectus of the Company to be used in
the Subscription and Community Offering. Such prospectus contains information
with respect to the Bank, the Company and the Common Stock.
-3-
SECTION 1. Representations and Warranties.
(a) The Company and the Bank jointly and severally represent and
warrant to the Agent as of the date hereof as follows:
(i) The Registration Statement has been declared effective by the
Commission, no stop order has been issued with respect thereto and no
proceedings therefor have been initiated or, to the knowledge of the
Company and the Bank, threatened by the Commission. At the time the
Registration Statement became effective and at the Closing Time referred to
in Section 2 hereof, the Registration Statement complied and will comply in
all material respects with the requirements of the Securities Act and the
Securities Act Regulations and did not and will not contain an untrue
statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein not
misleading. The Prospectus, at the date hereof does not and at the Closing
Time referred to in Section 2 hereof will not, include an untrue statement
of a material fact or omit to state a material fact necessary in order to
make the statements therein, in the light of the circumstances under which
they were made, not misleading; provided, however, that the representations
and warranties in this subsection shall not apply to statements in or
omissions from the Registration Statement or Prospectus made in reliance
upon and in conformity with information with respect to the Agent furnished
to the Company in writing by the Agent expressly for use in the
Registration Statement or Prospectus (the "Agent Information," which the
Company and the Bank acknowledge appears only in the sections captioned
"Market for Common Stock" and "The Conversion - Marketing and Underwriting
Arrangements" of the Prospectus).
(ii) The Company has filed with the Department of the Treasury,
Office of Thrift Supervision (the "OTS") the Company's application for
approval of its acquisition of the Bank (the "Holding Company Application")
on Form H-(e)1-S promulgated under the savings and loan holding company
provisions of the Home Owners' Loan Act, as amended ("HOLA") and the
regulations promulgated thereunder. The Company has received written notice
from the OTS of its approval of the acquisition of the Bank, such approval
remains in full force and effect and no order has been issued by the OTS
suspending or revoking such approval and no proceedings therefor have been
initiated or, to the knowledge of the Company or the Bank, threatened by
the OTS. At the date of such approval and at the Closing Time referred to
in Section 2, the Holding Company Application complied and will comply in
all material respects with the applicable provisions of HOLA and the
regulations promulgated thereunder.
(iii) Pursuant to the rules and regulations of the OTS governing
the conversion of federally chartered mutual savings banks to stock form
(the "Conversion Regulations"), the Bank has filed with the OTS an
application for conversion on Form AC, and has filed such amendments
thereto and supplementary materials as may have been required to the date
hereof (such application, as amended to date, if applicable, and as from
time to time amended or supplemented hereafter, is hereinafter referred to
as the "Conversion Application"), including copies of the Bank's Proxy
Statement, dated ______, 1997, relating to the Conversion (the "Proxy
Statement"), and the Prospectus .
-4-
The OTS has, by letter dated __________, 1997, approved the Conversion
Application, such approval remains in full force and effect and no order
has been issued by the OTS suspending or revoking such approval and no
proceedings therefor have been initiated or, to the knowledge of the
Company or the Bank, threatened by the OTS. At the date of such approval
and at the Closing Time referred to in Section 2, the Conversion
Application complied and will comply in all material respects with the
applicable provisions of the Conversion Regulations.
(iv) At the time of their use, the Proxy Statement and any other
proxy solicitation materials will comply in all material respects with the
applicable provisions of the Conversion Regulations and 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 the light of the
circumstances under which they were made, not misleading. The Bank will
promptly file the Prospectus and any supplemental sales literature with the
OTS. The Prospectus and all supplemental sales literature, as of the date
the Registration Statement became effective and at the Closing Time
referred to in Section 2, complied and will comply in all material respects
with the applicable requirements of the Conversion Regulations and, at or
prior to the time of their first use, will have received all required
authorizations of the OTS for use in final form.
(v) The OTS has not, by order or otherwise, prevented or
suspended the use of the Prospectus or any supplemental sales literature
authorized by the Company or the Bank for use in connection with the
Offerings.
(vi) At the Closing Time referred to in Section 2, the Company and
the Bank will have completed the conditions precedent to the Conversion in
accordance with the Plan, the applicable Conversion Regulations and all
other applicable laws, regulations, decisions and orders, including all
material terms, conditions, requirements and provisions precedent to the
Conversion imposed upon the Company or the Bank by the OTS, the Federal
Deposit Insurance Corporation (the "FDIC"), or any other regulatory
authority, other than those which the regulatory authority permits to be
completed after the Conversion.
(vii) RP Financial, LC, which prepared the valuation of the Bank as
part of the Conversion, has advised the Company and the Bank that it
satisfies all requirements for an appraiser set forth in the Conversion
Regulations and any interpretations or guidelines issued by the OTS with
respect thereto.
(viii) BDO Xxxxxxx, LLP, the accountants who certified the financial
statements and supporting schedules of the Bank included in the
Registration Statement are independent public accountants within the
meaning of the Code of Ethics of the [Association of Independent Certified
Public Accountants] and such accountants are, with respect to the Company,
the Bank and each subsidiary of the Bank, independent certified public
accountants as required by the Securities Act and the Securities Act
Regulations.
(ix) The only subsidiary of the Bank is TriStar Financial
Corporation (the "Subsidiary").
-5-
(x) The consolidated financial statements and the related notes
thereto included in the Registration Statement and the Prospectus present
fairly the consolidated financial position of the Company, the Bank and the
Subsidiary as at the dates indicated and the results of operations,
retained earnings and cash flows for the periods specified, and comply as
to form in all material respects with the applicable accounting
requirements of the Securities Act Regulations and the Conversion
Regulations; except as otherwise stated in the Registration Statement, said
financial statements have been prepared in conformity with generally
accepted accounting principles applied on a consistent basis; and the
supporting schedules and tables included in the Registration Statement
present fairly the information required to be stated therein.
(xi) Since the respective dates as of which information is given
in the Registration Statement and the Prospectus, except as otherwise
stated therein (A) there has been no material adverse change in the
financial condition, results of operations or business of the Company, the
Bank and the Subsidiary considered as one enterprise, whether or not
arising in the ordinary course of business, and (B) except for transactions
specifically referred to or contemplated in the Prospectus, there have been
no transactions entered into by the Company, the Bank or the Subsidiary,
other than those in the ordinary course of business and consistent with
past practice, which are material with respect to the Company, the Bank and
the Subsidiary considered as one enterprise.
(xii) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State of
Delaware with corporate power and authority to own, lease and operate its
properties and to conduct its business as described in the Prospectus and
to enter into and perform its obligations under this Agreement; and the
Company is duly qualified as a foreign corporation to transact business and
is in good standing in the State of Idaho and in each jurisdiction in which
such qualification is required, whether by reason of the ownership or
leasing of property or the conduct of business, except where the failure to
so qualify would not have a material adverse effect on the financial
condition, results of operations or business of the Company, the Bank and
the Subsidiary considered as one enterprise.
(xiii) Upon consummation of the Conversion, the authorized, issued
and outstanding capital stock of the Company will be within the range as
set forth in the Prospectus under "Capitalization" (except for subsequent
issuances, if any, pursuant to reservations, agreements or employee benefit
plans referred to in the Prospectus); no shares of Common Stock have been
or will be issued and outstanding prior to the Closing Time referred to in
Section 2; at the time of Conversion, the Securities will have been duly
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 stated on the cover page of the Prospectus, will be
duly and validly issued and fully paid and non-assessable; the terms and
provisions of the Common Stock and the capital stock of the Company conform
to all statements relating thereto contained in the Prospectus; the
certificates representing the shares of Common Stock conform to the
requirement of federal and Delaware law; and the issuance of the Securities
is not subject to preemptive or other similar rights.
-6-
(xiv) The Bank, as of the date hereof, is a federally chartered
savings bank in mutual form and upon consummation of the Stock Conversion
will be a federally chartered savings bank in stock form, in both instances
with full corporate power and authority to own, lease and operate its
properties and to conduct its business as described in the Prospectus; the
Company, the Bank and the Subsidiary have obtained all licenses, permits
and other governmental authorizations currently required for the conduct of
their respective businesses or required for the conduct of their respective
businesses as contemplated by the Holding Company Application and the
Conversion Application, except where the failure to obtain such licenses,
permits or other governmental authorizations would not have a material
adverse effect on the financial condition, results of operations or
business of the Company, the Bank and the Subsidiary considered as one
enterprise; all such licenses, permits and other governmental
authorizations are in full force and effect and the Company, the Bank and
the Subsidiary are in all material respects in compliance therewith;
neither the Company, the Bank nor the Subsidiary has received notice of any
proceeding or action relating to the revocation or modification of any such
license, permit or other governmental authorization which, individually or
in the aggregate, if the subject of an unfavorable decision, ruling or
finding, might have a material adverse effect on the financial condition,
results of operations or business of the Company, the Bank or the
Subsidiary, considered as one enterprise; and the Bank is in good standing
under the laws of the United States and is qualified as a foreign
corporation in any jurisdiction in which the failure to so qualify would
have a material adverse effect on the financial condition, results of
operations or business of the Company, the Bank and the Subsidiary
considered as one enterprise.
(xv) The deposit accounts of the Bank are insured by the FDIC up
to the applicable limits and, upon consummation of the Stock Conversion,
the liquidation account for the benefit of eligible account holders and
supplemental eligible account holders will be duly established in
accordance with the requirements of the Conversion Regulations.
(xvi) Upon consummation of the Stock Conversion, the authorized,
issued and outstanding capital stock of the Bank is 1,000 shares of common
stock, par value $1.00 per share (the "Bank Common Stock"); no shares of
Bank Common Stock have been or will be issued prior to the Closing Time
referred to in Section 2; and as of Closing Time referred to in Section 2,
all of the issued and outstanding capital stock of the Bank will be duly
authorized, validly issued and fully paid and non-assessable, and all such
capital stock will be owned beneficially and of record by the Company free
and clear of any mortgage, pledge, lien, encumbrance or claim in law or
equity.
(xvii) The Subsidiary has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation, has full corporate power and authority
to own, lease and operate its properties and to conduct its business as
described in the Registration Statement and Prospectus, and is duly
qualified to transact business and is in good standing in each jurisdiction
in which such qualification is required, whether by reason of the ownership
or leasing of property or the conduct of business, except where the failure
to so qualify would not have a material adverse effect on the financial
condition, results of operations or business of the
-7-
Company, the Bank and the Subsidiary considered as one enterprise; the
activities of the Subsidiary are permitted to subsidiaries of a federally
chartered savings bank by the rules, regulations, resolutions and practices
of the OTS; all of the issued and outstanding capital stock of the
Subsidiary has been duly authorized and validly issued, is fully paid and
non-assessable and is owned directly by the Bank, free and clear of any
security interest, mortgage, pledge, lien, encumbrance or claim in law or
equity.
(xviii) The Company and the Bank have taken all corporate action
necessary for them to execute, deliver and perform this Agreement, and this
Agreement has been duly executed and delivered by, and is the valid and
binding agreement of, the Company and the Bank, enforceable in accordance
with its terms, except as may be limited by bankruptcy, insolvency or other
laws affecting the enforceability of the rights of creditors generally and
judicial limitations on the right of specific performance and except as the
enforceability of indemnification and contribution provisions may be
limited by applicable securities laws.
(xix) Subsequent to the respective dates as of which information is
given in the Registration Statement and the Prospectus and prior to the
Closing Time, except as otherwise may be indicated or contemplated therein,
none of the Company, the Bank or the Subsidiary will have (A) issued any
securities or incurred any liability or obligation, direct or contingent,
or borrowed money, except borrowings in the ordinary course of business
from the same or similar sources and in similar amounts as indicated in the
Prospectus, or (B) entered into any transaction or series of transactions
which is material in light of the business of the Company, the Bank and the
Subsidiary, considered as one enterprise excluding the origination,
purchase and sale of loans or the purchase or sale of investment securities
or mortgaged-backed securities in the ordinary course of business or
otherwise as indicated in the Prospectus.
(xx) 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 Securities that has not been obtained and
a copy of which has been delivered to the Agent, except as may be required
under the securities laws of various jurisdictions.
(xxi) Neither the Company, the Bank nor the Subsidiary is in
violation of its certificate of incorporation, charter or bylaws (and the
Bank will not be in violation of its charter or bylaws in stock form upon
consummation of the Conversion); and neither the Company, the Bank nor the
Subsidiary is in default (nor has any event occurred which, with notice or
lapse of time or both, would constitute a default) in the performance or
observance of any obligation, agreement, covenant or condition contained in
any contract, indenture, mortgage, loan agreement, note, lease or other
instrument to which the Company, the Bank or the Subsidiary is a party or
by which it or any of them may be bound, or to which any of the property or
assets of the Company, the Bank or the Subsidiary is subject, except for
such defaults that would not, individually or in the aggregate, have a
material adverse effect on the financial condition, results of operations
or business of the Company, the Bank and the Subsidiary considered as one
enterprise.
-8-
(xxii) The execution, delivery and performance of this Agreement and
the consummation of the transactions contemplated herein have been duly
authorized by all necessary corporate action and do not and will not
conflict with or constitute a breach of, or default under, or result in the
creation or imposition of any lien, charge or encumbrance upon any property
or assets of the Company, the Bank or the Subsidiary pursuant to, any
contract, indenture, mortgage, loan agreement, note, lease or other
instrument to which the Company, the Bank or the Subsidiary is a party or
by which it or any of them may be bound, or to which any of the property or
assets of the Company, the Bank or the Subsidiary is subject, except for
such defaults that would not, individually or in the aggregate, have a
material adverse effect on the financial condition, results of operations
or business of the Company, the Bank and the Subsidiary considered as one
enterprise; nor will such action result in any violation of the provisions
of the certificate of incorporation, charter or bylaws of the Company, the
Bank or its Subsidiary, or any applicable law, regulation or administrative
or court decree.
(xxiii) No labor dispute with the employees of the Company, the Bank
or the Subsidiary exists or, to the knowledge of the Company or the Bank,
is imminent; and the Company is not aware of any existing or imminent labor
disturbance by the employees of any of its principal suppliers or
contractors which might be expected to result in any material adverse
change in the financial condition, results of operations or business of the
Company, the Bank and the Subsidiary considered as one enterprise.
(xxiv) The Company, the Bank and the Subsidiary have good and
marketable title to all properties and assets for which ownership is
material to the business of the Company, the Bank or the Subsidiary and to
those properties and assets described in the Prospectus as owned by them,
free and clear of all liens, charges, encumbrances or restrictions, except
such as are described in the Prospectus or are not material in relation to
the business of the Company, the Bank and the Subsidiary considered as one
enterprise; and all of the leases and subleases material to the business of
the Company, the Bank or the Subsidiary under which the Company, the Bank
or the Subsidiary hold properties, including those described in the
Prospectus, are valid and binding agreements of the Company, the Bank and
the Subsidiary, enforceable in accordance with their terms.
(xxv) Neither the Company, the Bank nor the Subsidiary are in
violation of any directive from the OTS or the FDIC to make any material
change in the method of conducting their respective businesses; the Bank
and the Subsidiary have conducted and are conducting their business so as
to comply in all material respects with all applicable statutes,
regulations and administrative and court decrees (including, without
limitation, all regulations, decisions, directives and orders of the OTS or
the FDIC), except in such respects as would not have a material adverse
effect upon the Company, the Bank and the Subsidiary considered as one
enterprise.
(xxvi) There is no action, suit or proceeding before or by any court
or governmental agency or body, domestic or foreign, now pending, or, to
the knowledge of the Company or the Bank, threatened, against or affecting
the Company, the Bank or the Subsidiary which is required to be disclosed
in the Registration Statement (other than
-9-
as disclosed therein), or which might result in any material adverse change
in the financial condition, results of operations or business of the
Company, the Bank and the Subsidiary considered as one enterprise, or which
might materially and adversely affect the properties or assets thereof or
which might materially and adversely affect the consummation of the
Conversion; all pending legal or governmental proceedings to which the
Company, the Bank or the Subsidiary is a party or of which any of their
respective property or assets is the subject which are not described in the
Registration Statement, including ordinary routine litigation incidental to
the business, are considered in the aggregate not material; and there are
no contracts or documents of the Company, the Bank or the Subsidiary which
are required to be filed as exhibits to the Registration Statement or the
Conversion Application which have not been so filed.
(xxvii) The Bank has obtained an opinion of its special counsel,
Breyer & Aguggia, with respect to the legality of the Securities to be
issued and the federal income tax consequences of the Conversion, copies of
which are filed as exhibits to the Registration Statement; the Bank has
obtained an opinion of BDO Xxxxxxx with respect to the Idaho income tax
consequences of the Conversion, copies of which are filed as exhibits to
the Registration Statement; all material aspects of the aforesaid opinions
are accurately summarized in the Prospectus; the facts and representations
upon which such opinions are based are truthful, accurate and complete in
all material respects; and neither the Bank nor the Company has taken or
will take any action inconsistent therewith.
(xxviii) The Company is not required to be registered under the
Investment Company Act of 1940, as amended.
(xxix) All of the loans represented as assets on the most recent
financial statements or selected financial information of the Bank included
in the Prospectus meet or are exempt from all requirements of federal,
state or local law pertaining to lending, including without limitation
truth in lending (including the requirements of Regulations Z and 12 C.F.R.
Part 226 and Section 563.99), real estate settlement procedures, consumer
credit protection, equal credit opportunity and all disclosure laws
applicable to such loans, except for violations which, if asserted, would
not result in a material adverse effect on the financial condition, results
of operations or business of the Company, the Bank and the Subsidiary
considered as one enterprise.
(xxx) To the knowledge of the Company and the Bank none of the
Company, the Bank or the Subsidiary or employees thereof has made any
payment of funds of the Company or the Bank as a loan for the purchase of
the Common Stock, except for the intended loan to the ESOP for the purchase
of approximately 8% of the Common Stock to be issued in the Conversion, 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.
(xxxi) The Company, the Bank and the Subsidiary are in compliance in
all material respects with the applicable financial recordkeeping and
reporting requirements of the Currency and Foreign Transaction Reporting
Act of 1970, as amended, and the rules and regulations thereunder.
-10-
(xxxii) Neither the Company, the Bank nor the Subsidiary nor any
properties owned or operated by the Company, the Bank or the Subsidiary is
in violation of or liable under any Environmental Law (as defined below),
except for such violations or liabilities that, individually or in the
aggregate, would not have a material adverse effect on the financial
condition, results of operations or business of the Company, the Bank and
the Subsidiary considered as one enterprise. There are no actions, suits or
proceedings, or demands, claims, notices or investigations (including,
without limitation, notices, demand letters or requests for information
from any environmental agency) instituted or pending, or to the knowledge
of the Company or the Bank threatened, relating to the liability of any
property owned or operated by the Company, the Bank or the Subsidiary,
under any Environmental Law. For purposes of this subsection, the term
"Environmental Law" means any federal, state, local or foreign law,
statute, ordinance, rule, regulation, code, license, permit, authorization,
approval, consent, order, judgment, decree, injunction or agreement with
any regulatory authority relating to (i) the protection, preservation or
restoration of the environment (including, without limitation, air, water,
vapor, surface water, groundwater, drinking water supply, surface soil,
subsurface soil, plant and animal life or any other natural resource),
and/or (ii) the use, storage, recycling, treatment, generation,
transportation, processing, handling, labeling, production, release or
disposal of any substance presently listed, defined, designated or
classified as hazardous, toxic, radioactive or dangerous, or otherwise
regulated, whether by type or by quantity, including any material
containing any such substance as a component.
(xxxiii) The Company, the Bank and the Subsidiary have filed all
federal income and state and local franchise tax returns required to be
filed and have made timely payments of all taxes shown as due and payable
in respect of such returns, and no deficiency has been asserted with
respect thereto by any taxing authority.
(xxxiv) The Company has received approval, subject to regulatory
approval to consummate the Offerings and issuance, to have the Securities
quoted on the National Market of the National Association of Securities
Dealers' Automated Quotation System ("Nasdaq National Market") effective as
of the Closing Time referred to in Section 2 hereof.
(xxxv) The Company will file a registration statement for the
Common Stock under Section 12(g) of the Securities Exchange Act (the
"Registration Statement") prior to completion of the Offerings and will
request that such Registration Statement be effective upon completion of
the Conversion.
(b) Any certificate signed by any officer of the Company or the
Bank and delivered to either of the Agent or counsel for the Agent shall be
deemed a representation and warranty by the Company or the Bank to each Agent as
to the matters covered thereby.
-11-
SECTION 2. Appointment of Sandler X'Xxxxx; Sale and Delivery of the
Securities; Closing.
On the basis of the representations and warranties herein contained
and subject to the terms and conditions herein set forth, the Company hereby
appoints Sandler X'Xxxxx as its Agent to consult with and advise the Company,
and to assist the Company with the solicitation of subscriptions and purchase
orders for Securities, in connection with the Company's sale of Common Stock in
the Subscription and Community Offering and in the Syndicated Community
Offering. On the basis of the representations and warranties herein contained,
and subject to the terms and conditions herein set forth, Sandler X'Xxxxx
accepts such appointment and agrees to use its best efforts to assist the
Company with the solicitation of subscriptions and purchase orders for
Securities in accordance with this Agreement; provided, however, that the Agent
shall not be obligated to take any action which is inconsistent with any
applicable laws, regulations, decisions or orders. The services to be rendered
by Sandler X'Xxxxx pursuant to this appointment include the following: (i)
consulting as to the securities marketing implications of any aspect of the Plan
of Stock Conversion or related corporate documents; (ii) reviewing with the
Board of Directors the independent appraiser's appraisal of the common stock;
(iii) reviewing all offering documents, including the Prospectus, stock order
form and related offering materials (it being understood that preparation and
filing of such documents is the sole responsibility of the Company and the Bank
and their counsel); (iv) assisting in the design and implementation of a
marketing strategy for the Offerings; (v) providing support to the Company and
the Bank in obtaining all requisite regulatory approvals; (vi) assisting Bank
management in preparing for meetings with potential investors and broker-
dealers; and (vii) providing such other general advice and assistance as may be
requested to promote the successful completion of the Offerings.
The appointment of the Agent hereunder shall terminate upon the
earliest to occur of (a) forty-five (45) days after the last day of the
Subscription and Community Offering, unless the Company and the Agent agree in
writing to extend such period and the OTS agrees to extend the period of time in
which the Shares may be sold, (b) the receipt and acceptance of subscriptions
and purchase orders for all of the Securities, or (c) the completion of the
Syndicated Community Offering.
If any of the Securities remain available after the expiration of the
Subscription and Community Offering, at the request of the Company and the Bank,
Sandler X'Xxxxx will seek to form a syndicate of registered broker or dealers
("Selected Dealers") to assist in the solicitation of purchase orders of such
Securities on a best efforts basis, subject to the terms and conditions set
forth in a selected dealers' agreement (the "Selected Dealers' Agreement"),
substantially in the form set forth in Exhibit A to this Agreement. Sandler
X'Xxxxx will endeavor to limit the aggregate fees to be paid by the Company and
the Bank under any such Selected Dealers' Agreement to an amount competitive
with gross underwriting discounts charged at such time for underwritings of
comparable amounts of stock sold at a comparable price per share in a similar
market environment; provided, however, that the aggregate fees payable to Xxxxxx
X'Xxxxx and Selected Dealers shall not exceed 7% of the aggregate Purchase Price
of the Securities sold by such Selected Dealers. Xxxxxx X'Xxxxx will endeavor
to distribute the Securities among the Selected Dealers in a fashion which best
meets the distribution objective of the Company and the requirements of the
Plan, which may result in limiting the allocation
-12-
of stock to certain Selected Dealers. It is understood that in no event shall
Sandler X'Xxxxx be obligated to act as a Selected Dealer or to take or purchase
any Securities.
In the event the Company is unable to sell at least the total minimum
of the Securities, as set forth on the cover page of the Prospectus, within the
period herein provided, this Agreement shall terminate and the Company shall
refund to any persons who have subscribed for any of the Securities the full
amount which it may have received from them, together with interest as provided
in the Prospectus, and no party to this Agreement shall have any obligation to
the others hereunder, except for the obligations of the Company and the Bank as
set forth in Sections 4, 6(a) and 7 hereof and the obligations of the Agent as
provided in Sections 6(b) and 7 hereof. Appropriate arrangements for placing
the funds received from subscriptions for Securities or other offers to purchase
Securities in special interest-bearing accounts with the Bank until all
Securities are sold and paid for were made prior to the commencement of the
Subscription Offering, with provision for refund to the purchasers as set forth
above, or for delivery to the Company if all Securities are sold.
If at least the total minimum of Securities, as set forth on the cover
page of the Prospectus, are sold, the Company agrees to issue or have issued the
Securities sold and to release for delivery certificates for such Securities at
the Closing Time against payment therefor by release of funds from the special
interest-bearing accounts referred to above. The closing shall be held at the
offices of Breyer & Aguggia, at 10:00 a.m., local time, or at such other place
and time as shall be agreed upon by the parties hereto, on a business day to be
agreed upon by the parties hereto. The Company shall notify the Agent by
telephone, confirmed in writing, when funds shall have been received for all the
Securities. Certificates for Securities shall be delivered directly to the
purchasers thereof in accordance with their directions. Notwithstanding the
foregoing, certificates for Securities purchased through Selected Dealers shall
be made available to the Agent for inspection at least 48 hours prior to the
Closing Time at such office as the Agent shall designate. The hour and date
upon which the Company shall release for delivery all of the Securities, in
accordance with the terms hereof, is herein called the "Closing Time."
The Company will pay any stock issue and transfer taxes which may be
payable with respect to the sale of the Securities.
In addition to reimbursement of the expenses specified in Section 4
hereof, the Agent will receive the following compensation for its services
hereunder:
(a) one and one-half percent (1.5%) of the aggregate Actual Purchase
Price (as defined in the Prospectus) of the Securities sold in the
Subscription and Community Offering, subject to a maximum fee equal to one
and one-half percent (1.5%) of the aggregate gross proceeds at the midpoint
of the estimated price range as set forth on the cover page of the
Prospectus; and
(b) with respect to any Securities sold by an NASD member firm (other
than Sandler X'Xxxxx) under the Selected Dealers' Agreement in the
Syndicated Community Offering, (i) the compensation payable to Selected
Dealers under any Selected Dealers' Agreement, (ii) any sponsoring dealer's
fees; and (iii) a management fee to Sandler
-13-
X'Xxxxx of two percent (2.0%). Any fees payable to Sandler X'Xxxxx for
Securities sold by Sandler X'Xxxxx under any such agreement shall be
limited to an aggregate of two percent (2.0%) of the Actual Purchase Price
of such Securities.
Notwithstanding the foregoing, no fee shall be payable with respect to
any Securities sold in the Subscription and Community Offering to any employee,
officer, or director of the Bank or the Company, any member of such person's
immediate family (which term shall mean parents, spouse, siblings, children and
grandchildren), or any employee benefit plan of the Company or the Bank
established for the benefit of their respective directors, officers or
employees.
If this Agreement is terminated by the Agent in accordance with the
provisions of Section 9(a) hereof or the Conversion is terminated by the
Company, no fee shall be payable by the Company to Sandler X'Xxxxx; however, the
Company shall reimburse the Agent for all of its reasonable out-of-pocket
expenses incurred prior to termination, including the reasonable fees and
disbursements of counsel for the Agent in accordance with the provisions of
Section 4 hereof.
All fees payable to the Agent hereunder shall be payable in
immediately available funds at Closing Time, or upon the termination of this
Agreement, as the case may be. In recognition of the long lead times involved
in the conversion process, the Bank agrees to make advance payments to the Agent
in the aggregate amount of $50,000, $25,000 of which has been previously paid
and the remaining $25,000 of which shall be payable upon execution hereof, which
shall be credited against any fees or reimbursement of expenses payable
hereunder.
SECTION 3. Covenants of the Company. The Company and the Bank
covenant with the Agent as follows:
(a) The Company and the Bank will prepare and file such amendments or
supplements to the Registration Statement, the Prospectus, the Conversion
Application and the Proxy Statement as may hereafter be required by the
Securities Act Regulations or the Conversion Regulations or as may
hereafter be requested by the Agent. Following completion of the
Subscription and Community Offering, in the event of a Syndicated Community
Offering, the Company and the Bank (i) will promptly prepare and file with
the Commission a post-effective amendment to the Registration Statement
relating to the results of the Subscription and Community Offering, any
additional information with respect to the proposed plan of distribution
and any revised pricing information or (ii) if no such post-effective
amendment is required, will file with, or mail for filing to, the
Commission a prospectus or prospectus supplement containing information
relating to the results of the Subscription and Community Offering and
pricing information pursuant to Rule 424(c) of the Securities Act
Regulations, in either case in a form acceptable to the Agent. The Company
and the Bank will notify the Agent immediately, and confirm the notice in
writing, (i) of the effectiveness of any post-effective amendment of the
Registration Statement, the filing of any supplement to the Prospectus and
the filing of any amendment to the Conversion Application, (ii) of the
receipt of any comments from the OTS or the Commission with respect to the
transactions contemplated by this Agreement or the Plan, (iii) of any
request by the Commission or the OTS for any
-14-
amendment to the Registration Statement or the Conversion Application or
any amendment or supplement to the Prospectus or for additional
information, (iv) of the issuance by the OTS of any order suspending the
Offerings or the use of the Prospectus or the initiation of any proceedings
for that purpose, (v) of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement or the
initiation of any proceedings for that purpose, and (vi) of the receipt of
any notice with respect to the suspension of any qualification of the
Securities for offering or sale in any jurisdiction. The Company and the
Bank will make every reasonable effort to prevent the issuance of any stop
order and, if any stop order is issued, to obtain the lifting thereof at
the earliest possible moment.
(b) The Company and the Bank will give the Agent notice of its
intention to file or prepare any amendment to the Conversion Application or
Registration Statement (including any post-effective amendment) or any
amendment or supplement to the Prospectus (including any revised prospectus
which the Company proposes for use in connection with the Syndicated
Community Offering of the Securities which differs from the prospectus on
file at the Commission at the time the Registration Statement becomes
effective, whether or not such revised prospectus is required to be filed
pursuant to Rule 424(b) of the Securities Act Regulations), will furnish
the Agent with copies of any such amendment or supplement a reasonable
amount of time prior to such proposed filing or use, as the case may be,
and will not file any such amendment or supplement or use any such
prospectus to which the Agent or counsel for the Agent may object.
(c) The Company and the Bank will deliver to the Agent as many signed
copies and as many conformed copies of the Conversion Application and the
Registration Statement as originally filed and of each amendment thereto
(including exhibits filed therewith or incorporated by reference therein)
as the Agent may reasonably request, and from time to time such number of
copies of the Prospectus as the Agent may reasonably request.
(d) During the period when the Prospectus is required to be delivered,
the Company and the Bank will comply, at their own expense, with all
requirements imposed upon them by the OTS, by the applicable Conversion
Regulations, as from time to time in force, and by the Securities Act, the
Securities Act Regulations, the Securities Exchange Act of 1934, as amended
(the "Securities Exchange Act"), and the rules and regulations of the
Commission promulgated thereunder, including, without limitation,
Regulation M, 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.
(e) If, at any time during the period when the Prospectus is required
to be delivered, any event or circumstance shall occur as a result of which
it is necessary, in the opinion of counsel for the Agent, to amend or
supplement the Prospectus in order to make the Prospectus not misleading in
light of the circumstances existing at the time it is delivered to a
purchaser, the Company and the Bank will forthwith amend or supplement the
Prospectus (in form and substance satisfactory to counsel for the Agent) so
that, as so amended or supplemented, the Prospectus will not include an
untrue
-15-
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 it is delivered to a purchaser, not misleading, and
the Company and the Bank will furnish to the Agent a reasonable number of
copies of such amendment or supplement. For the purpose of this
subsection, the Company and the Bank will each furnish such information
with respect to itself as the Agent may from time to time reasonably
request.
(f) The Company and the Bank will take all necessary action, in
cooperation with the Agent, to qualify the Securities for offering and sale
under the applicable securities laws of such states of the United States
and other jurisdictions as the Conversion Regulations may require and as
the Agent and the Company have agreed; provided, however, that the Company
and the Bank shall not be obligated to file any general consent to service
of process or to qualify as a foreign corporation in any jurisdiction in
which it is not so qualified. In each jurisdiction in which the Securities
have been so qualified, the Company and the Bank will file such statements
and reports as may be required by the laws of such jurisdiction to continue
such qualification in effect for a period of not less than one year from
the effective date of the Registration Statement.
(g) The Company authorizes Sandler X'Xxxxx and any Selected Dealers to
act as agent of the Company in distributing the Prospectus to persons
entitled to receive subscription rights and other persons to be offered
Securities having record addresses in the states or jurisdictions set forth
in a survey of the securities or "blue sky" laws of the various
jurisdictions in which the Offerings will be made (the "Blue Sky Survey").
(h) The Company will make generally available to its security holders
as soon as practicable, but not later than 60 days after the close of the
period covered thereby, an earnings statement (in form complying with the
provisions of Rule 158 of the Securities Act Regulations) covering a twelve
month period beginning not later than the first day of the Company's fiscal
quarter next following the "effective date" (as defined in said Rule 158)
of the Registration Statement.
(i) During the period ending on the third anniversary of the
expiration of the fiscal year during which the closing of the transactions
contemplated hereby occurs, the Company will furnish to its stockholders as
soon as practicable after the end of each such fiscal year an annual report
(including consolidated statements of financial condition and consolidated
statements of income, stockholders' equity and cash flows, certified by
independent public accountants) and, as soon as practicable after the end
of each of the first three quarters of each fiscal year (beginning with the
fiscal quarter ending after the effective date of the Registration
Statement), the Company will make generally available to its stockholders
consolidated summary financial information of the Company for such quarter
in reasonable detail. In addition, such annual report and quarterly
consolidated summary financial information shall be made public through the
issuance of appropriate press releases at the same time or prior to the
time of the furnishing thereof to stockholders of the Company.
-16-
(j) During the period ending on the third anniversary of the
expiration of the fiscal year during which the closing of the transactions
contemplated hereby occurs, the Company will furnish to the Agent (i) as
soon as available, a copy of each report or other document of the Company
furnished generally to stockholders of the Company or furnished to or filed
with the Commission under the Securities Exchange Act or any national
securities exchange or system on which any class of securities of the
Company is listed, and (ii) from time to time, such other information
concerning the Company as the Agent may reasonably request.
(k) The Company and the Bank will conduct the Conversion in all
material respects in accordance with the Plan, the Conversion Regulations
and all other applicable regulations, decisions and orders, including all
applicable terms, requirements and conditions precedent to the Conversion
imposed upon the Company or the Bank by the OTS.
(l) The Company and the Bank will file, and deliver to the Agent
notice of its intention to file, after the consummation of the Stock
Conversion all necessary applications with the Washington Department of
Financial Institutions, Division of Banks (the "Division") and the OTS for
the conversion of the Bank from a federally chartered stock savings bank to
a Washington-chartered savings bank, and will deliver to the Agent copies
of all approvals related thereto upon receipt.
(m) Each of the Company and the Bank will use the net proceeds
received by it from the sale of the Securities in the manner specified in
the Prospectus under "Use of Proceeds."
(n) The Company will file with the Commission such reports on Form SR
as may be required pursuant to Rule 463 of the 1933 Act Regulations.
(o) The Company will maintain the effectiveness of the Registration
Statement for not less than three years. The Company will file with the
Nasdaq Stock Market all documents and notices required by the Nasdaq Stock
Market of companies that have issued securities that are traded in the
over-the-counter market and quotations for which are reported by the Nasdaq
National Market.
(p) The Company and the Bank will take such actions and furnish such
information as are reasonably requested by the Agent in order for the Agent
to ensure compliance with the National Association of Securities Dealers,
Inc.'s "Interpretation Relating to Free-Riding and Withholding."
(q) Other than in connection with any employee benefit plan or
arrangement described in the Prospectus, the Company will not, without the
prior written consent of the Agent, sell or issue, contract to sell or
otherwise dispose of, any shares of Common Stock other than the Securities
for a period of 180 days following the Closing Time.
(r) During the period beginning on the date hereof and ending on the
later of the third anniversary of the Closing Time or the date on which the
Agent receives full
-17-
payment in satisfaction of any claim for indemnification or contribution to
which it may be entitled pursuant to Sections 6 or 7, respectively, neither
the Company nor the Bank shall, without the prior written consent of the
Agent, which consent shall not be unreasonably withheld, take or permit to
be taken any action that could result in the Bank Common Stock becoming
subject to any security interest, mortgage, pledge, lien or encumbrance;
provided, however, that this covenant shall be null and void if the Board
of Governors of the Federal Reserve System, by regulation, policy statement
or interpretive release, or by written order or written advice addressed to
the Bank or the Agent specifically addressing the provisions of Section
6(a) hereof, permits indemnification of the Agent by the Bank as
contemplated by such provisions.
SECTION 4. PAYMENT OF EXPENSES. The Company and the Bank jointly and
severally agree to pay all expenses incident to the performance of their
obligations under this Agreement, including but not limited to (i) the cost of
obtaining all securities and bank regulatory approvals, (ii) the printing and
filing of the Registration Statement as originally filed and of each amendment
thereto, (iii) the preparation, issuance and delivery of the certificates for
the Securities to the purchasers in the Offerings, (iv) the fees and
disbursements of the Company's and the Bank's counsel, accountants, appraiser
and other advisors, (v) the qualification of the Securities under securities
laws in accordance with the provisions of Section 3(f) hereof, including filing
fees and the fees and disbursements of counsel in connection therewith and in
connection with the preparation of the Blue Sky Survey, (vi) the printing and
delivery to the Agent of copies of the Registration Statement as originally
filed and of each amendment thereto and the printing and delivery of the
Prospectus and any amendments or supplements thereto to the purchasers in the
Offerings and the Agent, (vii) the printing and delivery to the Agent of copies
of a Blue Sky Survey, and (viii) the fees and expenses incurred in connection
with the listing of the Securities on the Nasdaq National Market. In the event
the Agent incurs any such fees and expenses on behalf of the Bank or the
Company, the Bank will reimburse the Agent for such fees and expenses whether or
not the Conversion is consummated; provided, however, that the Agent shall not
incur any substantial expenses on behalf of the Bank or the Company pursuant to
this Section without the prior approval of the Bank.
The Company and the Bank jointly and severally agree to pay certain
expenses incident to the performance of the Agent's obligations under this
Agreement, including (i) the filing fees paid or incurred by the Agent in
connection with all filings with the National Association of Securities Dealers,
Inc., and (ii) all reasonable out of pocket expenses incurred by the Agent
relating to the Offerings, including, without limitation, advertising,
promotional, syndication and travel expenses and fees and expenses of the
Agent's counsel, up to an aggregate of $50,000; provided, however, that the
Agent shall document such expenses to the reasonable satisfaction of the Bank.
All fees and expenses to which the Agent is entitled to reimbursement under this
paragraph of this Section 4 shall be due and payable upon receipt by the Company
or the Bank of a written accounting therefor setting forth in reasonable detail
the expenses incurred by the Agent.
-18-
SECTION 5. Conditions of Agent's Obligations. The Company, the Bank
and the Agent agree that the issuance and the sale of the Securities and all
obligations of the Agent hereunder are subject to the accuracy of the
representations and warranties of the Company and the Bank herein contained as
of the date hereof and the Closing Time, to the accuracy of the statements of
officers and directors of the Company and the Bank made pursuant to the
provisions hereof, to the performance by the Company and the Bank of their
obligations hereunder, and to the following further conditions:
(a) No stop order suspending the effectiveness of the Registration
Statement shall have been issued under the Securities Act or proceedings
therefor initiated or threatened by the Commission, no order suspending the
Offerings or authorization for final use of the Prospectus shall have been
issued or proceedings therefor initiated or threatened by the OTS and no
order suspending the sale of the Securities in any jurisdiction shall have
been issued.
(b) At Closing Time, the Agent shall have received:
(1) The favorable opinion, dated as of Closing Time, of Breyer &
Aguggia, special counsel for the Company and the Bank, in form and
substance satisfactory to counsel for the Agent, to the effect that:
(i) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the
State of Delaware.
(ii) The Company has full corporate power and authority to
own, lease and operate its properties and to conduct its business
as described in the Registration Statement and Prospectus and to
enter into and perform its obligations under this Agreement.
(iii) The Company is duly qualified as a foreign corporation
to transact business and is in good standing in the State of
Idaho and in each other jurisdiction in which the failure to so
qualify would have a material adverse effect upon the financial
condition, results of operations or business of the Company, the
Bank and the Subsidiary, considered as one enterprise.
(iv) Upon consummation of the Conversion, the authorized,
issued and outstanding capital stock of the Company will be within
the range as set forth in the Prospectus under "Capitalization"
and, except for shares issued upon incorporation of the Company,
no shares of Common Stock have been issued and no shares of Common
Stock will be issued and outstanding, except in connection with
the Conversion, prior to the Closing Time.
(v) The Securities have been duly and validly authorized for
issuance and sale and, when issued and delivered by the Company
-19-
pursuant to the Plan against payment of the consideration
calculated as set forth in the Plan and stated on the cover page
of the Prospectus, will be duly and validly issued and fully paid
and non-assessable.
(vi) The issuance of the Securities is not subject to
preemptive or other similar rights arising by operation of law
or, to the best of such counsel's knowledge, otherwise.
(vii) The Bank has been at all times since the date hereof
and prior to the Closing Time validly existing and in good
standing under the laws of the United States of America as a
federally chartered savings bank of mutual form, and, at Closing
Time, has become duly organized, validly existing and in good
standing under the laws of the United States of America as a
federally chartered savings bank of stock form, in both instances
with full 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 Bank is duly
qualified as a foreign corporation in each jurisdiction in which
the failure to so qualify would have a material adverse effect
upon the financial condition, results of operations or business of
the Company, the Bank and the Subsidiary, considered as one
enterprise.
(viii) The Bank is a member of the Federal Home Loan Bank of
Seattle and the deposit accounts of the Bank are insured by the
FDIC up to the applicable limits.
(ix) The Subsidiary has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the
state of Idaho, has full corporate power and authority to own,
lease and operate its properties and to conduct its business as
described in the Registration Statement and is duly qualified as a
foreign corporation to transact business and is in good standing
in each jurisdiction in which the failure to so qualify would have
a material adverse effect upon the financial condition, results of
operations or business of the Bank and its subsidiaries, taken as
a whole; the activities of the Subsidiary are permitted to
subsidiaries of a savings association holding company and of a
federally chartered savings bank by the rules, regulations,
resolutions and practices of the OTS; all of the issued and
outstanding capital stock of the Subsidiary has been duly
authorized and validly issued, is fully paid and non-assessable
and is owned directly by the Bank free and clear of any security
interest, mortgage, pledge, lien, encumbrance or claim in law or
equity.
(x) Upon consummation of the Conversion, all of the issued
and outstanding capital stock of the Bank will be duly authorized
and validly issued and fully paid and non-assessable, and all such
capital stock will be owned beneficially and of record by the
Company free and clear
-20-
of any security interest, mortgage, pledge, lien, encumbrance, or
legal or equitable claim.
(xi) The OTS has duly approved the Holding Company
Application and the Conversion Application, subject to the
satisfaction of the conditions set forth in such approvals, and no
action is pending, or to the best of such counsel's knowledge,
threatened respecting the Holding Company Application or the
Conversion Application or the acquisition by the Company of all of
the Bank's issued and outstanding capital stock; the Holding
Company Application and the Conversion Application comply as to
form in all material respects with the Conversion Regulations and
all other applicable requirements of the OTS, and, to the best of
such counsel's knowledge, include all documents required to be
filed as exhibits thereto; and the OTS has authorized the Company
to become a savings and loan holding company and to own all of the
issued and outstanding capital stock of the Bank to be issued
pursuant to the Plan.
(xii) The FRB has duly approved the BHC Application and, to
the best of such counsel's knowledge, no action is pending or
threatened respecting the BHC Application or the acquisition by
the Company of all of the Bank's issued and outstanding capital
stock; the BHC Application complies in all material respects with
the Bank Holding Company Act of 1956, as amended and all other
applicable requirements of the FRB, to the best of such counsel's
knowledge, includes all documents required to be filed as exhibits
thereto, and is complete in all material respects; the Company is
duly authorized to become a bank holding company and is duly
authorized to own all of the issued and outstanding capital stock
of the Bank pursuant to the Plan.
(xiii) 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
each of the Company and the Bank, and this Agreement constitutes
the legal, valid and binding agreement of each of the Company and
the Bank, enforceable in accordance with its terms, except as
rights to indemnity and contribution hereunder may be limited
under applicable law (it being understood that such counsel may
avail itself of customary exceptions concerning the effect of
bankruptcy, insolvency or similar laws and the availability of
equitable remedies); the execution and delivery of this Agreement,
the incurrence of the obligations herein set forth and the
consummation of the transactions contemplated herein will not
result in any violation of the provisions of the certificate of
incorporation, charter or bylaws of the Company or the Bank; and,
to the best of such counsel's knowledge, the execution and
delivery of this Agreement, the incurrence of the obligations
herein set forth and the consummation of the transactions
contemplated herein will not constitute a breach of, or default
(or an event which, with notice or lapse of time or both, would
constitute
-21-
a default) under, or result in the creation or imposition of any
lien, charge or encumbrance, that, individually or in the
aggregate, would have a material adverse effect on the financial
condition, results of operations or business of the Company, the
Bank and the Subsidiary considered as one enterprise, upon any
property or assets of the Company, the Bank or the Subsidiary
pursuant to any material contract, indenture, mortgage, loan
agreement, note, lease or other instrument to which the Company,
the Bank or the Subsidiary is a party or by which any of them may
be bound, or to which any of the property or assets of the
Company, the Bank or the Subsidiary is subject.
(xiv) The Prospectus has been duly authorized by the OTS for
final use pursuant to the Conversion Regulations and no action is
pending, or to the best of such counsel's knowledge, is
threatened, by the OTS to revoke such authorization.
(xv) The Registration Statement is effective under the
Securities Act and no stop order suspending the effectiveness of
the Registration Statement has been issued under the Securities
Act or, proceedings therefor initiated or, to the best of such
counsel's knowledge, threatened by the Commission.
(xvi) No further approval, authorization, consent or other
order of any public board or body is required in connection with
the execution and delivery of this Agreement, the issuance of the
Securities and the consummation of the Conversion, except as may
be required under the securities or Blue Sky laws of various
jurisdictions as to which no opinion need be rendered.
(xvii) At the time the Registration Statement became
effective, the Registration Statement (except for the appraisal,
financial statements and schedules and other financial and
statistical data included therein, as to which no opinion need be
rendered) complied as to form in all material respects with the
requirements of the Securities Act and the Securities Act
Regulations.
(xviii) At the time the Form AC and Application H-(e)1-S were
approved, the Form AC and Application H-(e)1-S (except for the
appraisal, financial statements and schedules and other financial
and statistical data included therein, as to which no opinion need
be rendered) complied as to form in all material respects with the
requirements of the Conversion Regulations.
(xix) The Common Stock conforms to the description thereof
contained in the Prospectus, and the form of certificate used to
evidence the Common Stock is in due and proper form and complies
with all applicable statutory requirements.
-22-
(xx) To the best of such counsel's knowledge, there are no legal or
governmental proceedings pending or threatened against or affecting the Company,
the Bank or the Subsidiary which are required, individually or in the aggregate,
to be disclosed in the Registration Statement and Prospectus, other than those
disclosed therein, and all pending legal or governmental proceedings to which
the Company, the Bank or the Subsidiary is a party or to which any of their
property is subject which are not described in the Registration Statement,
including ordinary routine litigation incidental to the business, are,
considered in the aggregate, not material.
(xxi) The information in the Prospectus under "Risk Factors -
Antitakeover Effects of Governing Documents, Delaware and Federal Law, Control
by Insiders and Employment Agreements," " - Possible Adverse Income Tax
Consequences of the Distribution of Subscription Rights," " - Potential
Operational Restrictions Associated with Regulatory Oversight," "Dividend
Policy," "Regulation," "Taxation," "The Conversion," "Restrictions on
Acquisition of the Holding Company" and "Description of Capital Stock of Holding
Company," to the extent that it constitutes matters of law, summaries of legal
matters, documents or proceedings, or legal conclusions, has been reviewed by
them and is correct in all material respects.
(xxii) To the best of 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 Registration Statement or to be
filed as exhibits thereto other than those described or referred to therein or
filed as exhibits thereto, the descriptions thereof or references thereto are
correct, and no default exists, and no event has occurred which, with notice or
lapse of time or both, would constitute a default, in the due performance or
observance of any material obligation, agreement, covenant or condition
contained in any contract, indenture, mortgage, loan agreement, note, lease or
other instrument so described, referred to or filed.
(xxiii) The Plan has been duly authorized by the Board of Directors of the
Company and the Board of Directors of the Bank and the OTS's approval of the
Plan remains in full force and effect; the Bank's charter has been amended,
effective upon consummation of the Conversion and the filing of such amended
charter with the OTS, to authorize the issuance of permanent capital stock; to
the best of such counsel's knowledge, the Company and the Bank have conducted
the Conversion in all material respects in accordance with applicable
requirements of the Plan, the Conversion Regulations and all other applicable
regulations, decisions and orders thereunder, including all material applicable
terms, conditions, requirements and conditions precedent to the Conversion
imposed upon the Company or the Bank by
-23-
the OTS and, to the best of such counsel's knowledge, no order
has been issued by the OTS to suspend the Offerings and no action
for such purpose has been instituted or threatened by the OTS;
and, to the best of such counsel's knowledge, no person has
sought to obtain review of the final action of the OTS in
approving the Plan.
(xxiv) To the best of such counsel's knowledge, the Company
and the Bank and the Subsidiary have obtained all licenses,
permits and other governmental approvals and authorizations
currently required for the conduct of their respective businesses
as described in the Registration Statement and Prospectus, except
for such licenses, permits, approvals or authorizations the
failure of which to have would not result in a material adverse
change in the financial condition, results of operations or the
business of the Company, the Bank and the Subsidiary, considered
as one enterprise, and all such licenses, permits and other
governmental authorizations are in full force and effect, and the
Company and the Bank and the Subsidiary are in all material
respects complying therewith.
(xxv) Neither the Company, the Bank nor the Subsidiary is in
violation of its charter (and the Bank will not be in violation
of its charter in stock form upon consummation of the Conversion)
nor, to the best of such counsel's knowledge, in default (nor has
any event occurred which, with notice or lapse of time or both,
would constitute a default) in the performance or observance of
any obligation, agreement, covenant or condition contained in any
contract, indenture, mortgage, loan agreement, note, lease or
other instrument to which the Company, the Bank or the Subsidiary
is a party or by which the Company, the Bank or the Subsidiary or
any of their respective property may be bound in any respect that
would have a material adverse effect upon the financial
condition, results of operations or business of the Company, the
Bank and the Subsidiary, considered as one enterprise.
(xxvi) The Company is not required to be registered as an
investment company under the Investment Company Act of 1940.
(2) The favorable opinion, dated as of Closing Time, of Thacher,
Xxxxxxxx & Xxxx, counsel for the Agent, with respect to the matters
set forth in Section 5(b)(1)(i), (iv), (v), (vi) (solely as to
preemptive rights arising by operation of law), (xiii), (xv) and
(xviii) and such other matters as the Agent may reasonably require.
(3) In giving their opinions required by subsections (b)(l)
and(b)(2), respectively, of this Section, Breyer & Aguggia and
Thacher, Xxxxxxxx & Xxxx shall each additionally state that nothing
has come to their attention that would lead them to believe that the
Registration Statement (except for the appraisal, financial statements
and schedules and other financial or statistical data included
therein, as to which counsel need make no statement), at the time it
became
-24-
effective, contained an untrue statement of a material fact or omitted
to state a material fact required to be stated therein or necessary to
make the statements therein not misleading or that the Prospectus
(except for the appraisal, financial statements and schedules and
other financial or statistical data included therein, as to which
counsel need make no statement), at the time the Registration
Statement became effective or at Closing Time, included an untrue
statement of a material fact or omitted to state a material fact
required to be stated therein in order to make the statements therein,
in the light of the circumstances under which they were made, not
misleading. In giving their opinions, Breyer & Aguggia and Xxxxxxx
Xxxxxxxx & Xxxx may rely as to matters of fact on certificates of
officers and directors of the Company and the Bank and certificates of
public officials, and as to certain matters of Idaho law upon the
opinions of _______________, which opinions shall be in form and
substance satisfactory to the Agent, and Xxxxxxx Xxxxxxxx & Wood may
also rely on the opinion of Breyer & Aguggia.
(c) At the Closing Time referred to in Section 2, the Company and the
Bank will have completed in all material respects the conditions precedent
to the Conversion in accordance with the Plan, the applicable Conversion
Regulations and all other applicable laws, regulations, decisions and
orders, including all terms, conditions, requirements and provisions
precedent to the Conversion imposed upon the Company or the Bank by the OTS
or the FDIC or any other regulatory authority other than those that the OTS
or the FDIC permit to be completed after the Conversion.
(d) At the Closing Time, there shall not have been, since the date
hereof or since the respective dates as of which information is given in
the Registration Statement and the Prospectus, any material adverse change
in the financial condition, results of operations or business of the
Company, the Bank and the Subsidiary considered as one enterprise, whether
or not arising in the ordinary course of business, and the Agent shall have
received a certificate of the Chief Executive Officer of the Company and of
the Bank, and the chief financial or chief accounting officer of the
Company and of the Bank, dated as of Closing Time, to the effect that (i)
there has been no such material adverse change, (ii) there shall have been
no material transaction entered into by the Company or the Bank from the
latest date as of which the financial condition of the Company or the Bank
is set forth in the Registration Statement and the Prospectus other than
transactions referred to or contemplated therein and transactions in the
ordinary cause of business, (iii) neither the Company nor the Bank shall
have received from the OTS any direction (oral or written) to make any
material change in the method of conducting its business with which it has
not complied (which direction, if any, shall have been disclosed to the
Agent) or which materially and adversely would affect the business,
financial condition or results of operations of the Company and the Bank
considered as one enterprise, (iv) the representations and warranties in
Section 1 hereof are true and correct with the same force and effect as
though expressly made at and as of the Closing Time, (v) the Company and
the Bank have complied with all agreements and satisfied all conditions on
their part to be performed or satisfied at or prior to Closing Time, (vi)
no stop order suspending the effectiveness of the Registration Statement
has been issued and no proceedings for that purpose have been initiated or
-25-
threatened by the Commission and (vii) no order suspending the Offerings or
the authorization for final use of the Prospectus has been issued and no
proceedings for that purpose have been initiated or threatened by the OTS
or the FDIC and no person has sought to obtain regulatory or judicial
review of the action of the OTS in approving the Plan in accordance with
the Conversion Regulations.
(e) At the time of the execution of this Agreement, the Agent shall
have received from BDO Xxxxxxx, LLP a letter dated such date, in form and
substance satisfactory to the Agent, to the effect that (i) they are
independent certified public accountants with respect to the Company, the
Bank and the Subsidiary within the meaning of the Code of Ethics of the
American Institute of Certified Public Accountants, the Securities Act and
the Securities Act Regulations and the Conversion Regulations; (ii) it is
their opinion that the consolidated financial statements and supporting
schedules included in the Registration Statement and covered by their
opinions therein comply as to form in all material respects with the
applicable accounting requirements of the Securities Act and the Securities
Act Regulations and the OTS Regulations; (iii) based upon limited
procedures as agreed upon by the Agent and BDO Xxxxxxx, LLP set forth in
detail in such letter, nothing has come to their attention which causes
them to believe that (A) the unaudited financial statements and supporting
schedules of the Bank and the Subsidiary included in the Registration
Statement do not comply as to form in all material respects with the
applicable accounting requirements of the Securities Act, the Securities
Act Regulations and the OTS Regulations or are not presented in conformity
with generally accepted accounting principles applied on a basis
substantially consistent with that of the audited financial statements
included in the Registration Statement and the Prospectus, (B) the
unaudited amounts included under the captions "Selected Financial
Information" and "Recent Developments" in the Registration Statement and
the Prospectus do not agree with the amounts set forth in the unaudited
consolidated financial statements as of and for the dates and periods
presented under such caption or such unaudited amounts were not determined
on a basis substantially consistent with that used in determining the
corresponding amounts in the audited financial statements included in the
Registration Statement and Prospectus, (C) at a specified date not more
than five (5) days prior to the date of this Agreement, there has been any
increase in the consolidated long term or short term debt of the Bank and
the Subsidiary or any decrease in consolidated total assets, the allowance
for loan losses, total deposits or equity of the Bank and the Subsidiary,
in each case as compared with the amounts shown in the March 31, 1996
balance sheet included in the Registration Statement or, (D) during the
period from March 31, 1996 to a specified date not more than five days
prior to the date of this Agreement, there were any decreases, as compared
with the corresponding period in the preceding year, in total interest
income, net interest income, net interest income after provision for loan
losses, income before income tax expense or net income of the Bank and the
Subsidiary, except in all instances for increases or decreases which the
Registration Statement and the Prospectus disclose have occurred or may
occur; and (iv) in addition to the examination referred to in their
opinions and the limited procedures referred to in clause (iii) above, they
have carried out certain specified procedures, not constituting an audit,
with respect to certain amounts, percentages and financial information
which are included in the Registration Statement and Prospectus and which
are specified by the Agent, and have found such amounts, percentages and
financial
-26-
information to be in agreement with the relevant accounting, financial and
other records of the Company, the Bank and the Subsidiary identified in
such letter.
(f) At Closing Time, the Agent shall have received from BDO Xxxxxxx,
LLP a letter, dated as of Closing Time, to the effect that they reaffirm
the statements made in the letter furnished pursuant to subsection (e) of
this Section, except that the specified date referred to shall be a date
not more than five days prior to Closing Time.
(g) At Closing Time, the Securities shall have been approved for
listing on the Nasdaq National Market upon notice of issuance.
(h) At Closing Time, the Agent shall have received a letter from RP
Financial, LC, dated as of the Closing Time, confirming its appraisal.
(i) At Closing Time, counsel for the Agent shall have been furnished
with such documents and opinions as they may require for the purpose of
enabling them to pass upon the issuance and sale of the Securities as
herein contemplated and related proceedings, or in order to evidence the
accuracy of any of the representations or warranties, or the fulfillment of
any of the conditions, herein contained; and all proceedings taken by the
Company in connection with the issuance and sale of the Securities as
herein contemplated shall be satisfactory in form and substance to the
Agent and counsel for the Agent.
(j) At any time prior to Closing Time, (i) there shall not have
occurred any material adverse change in the financial markets in the United
States or elsewhere or any outbreak of hostilities or escalation thereof or
other calamity or crisis the effect of which, in the judgment of the Agent,
are so material and adverse as to make it impracticable to market the
Securities or to enforce contracts, including subscriptions or orders, for
the sale of the Securities, and (ii) trading generally on either the Nasdaq
Stock Market or the New York Stock Exchange shall not have been suspended,
and minimum or maximum prices for trading shall not have been fixed, or
maximum ranges for prices for securities shall not have been required, by
either of such Exchange or Market or by order of the Commission or any
other governmental authority, and a banking moratorium shall not have been
declared by either Federal, New York or Idaho authorities.
SECTION 6. IDEMNIFICATION.
(a) The Company and the Bank, jointly and severally, agree to
indemnify and hold harmless the Agent, each person, if any, who controls the
Agent, within the meaning of Section 15 of the Securities Act or Section 20 of
the Securities Exchange Act, and its respective partners, directors, officers,
employees and agents as follows:
(i) from and against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, related to or arising out of the
Conversion or any action taken by the Agent where acting as agent of the
Company or the Bank or otherwise as described in Section 2 hereof;
-27-
(ii) from and against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, based upon or arising out of any untrue
statement or alleged untrue statement of a material fact contained in the
Registration Statement (or any amendment thereto), or the omission or
alleged omission therefrom of a material fact required to be stated therein
or necessary to make the statements therein not misleading or arising out
of any untrue statement or alleged untrue statement of a material fact
contained in the Prospectus (or any amendment or supplement thereto) or the
omission or alleged omission therefrom of a material fact necessary in
order to make the statements therein, in the light of the circumstances
under which they were made, not misleading;
iii) from and against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, to the extent of the aggregate amount paid
in settlement of any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or of any claim
whatsoever described in clauses (i) or (ii) above, if such settlement is
effected with the written consent of the Company or the Bank, which consent
shall not be unreasonably withheld; and
iv) from and against any and all expense whatsoever, as incurred
(including, subject to Section 6(c) hereof, the fees and disbursements of
counsel chosen by the Agent), reasonably incurred in investigating,
preparing for or defending against any litigation, or any investigation,
proceeding or inquiry by any governmental agency or body, commenced or
threatened, or any pending or threatened claim whatsoever described in
clauses (i) or (ii) above, to the extent that any such expense is not paid
under (i), (ii) or (iii) above;
provided, however, that the indemnification provided for in this paragraph (a)
shall not apply to any loss, liability, claim, damage or expense (i) to the
extent arising out of any untrue statement or alleged untrue statement of a
material fact or omission or alleged omission of a material fact required to be
stated therein or necessary to make not misleading any statements contained in
the Registration Statement (or any amendment thereto) or the Prospectus (or any
amendment or supplement thereto) made in reliance upon and in conformity with
the Agent Information or (ii) found in a final judgment by a court of competent
jurisdiction to have resulted primarily from the bad faith, willful misconduct
or gross negligence of the Agent. Notwithstanding the foregoing, the
indemnification provided for in this paragraph (a) shall not apply to the Bank
to the extent that such indemnification by the Bank would constitute a covered
transaction under Section 23A of the Federal Reserve Act.
(b) The Agent agrees to indemnify and hold harmless the Company,
the Bank, their directors and trustees, each of their officers who signed the
Registration Statement, and each person, if any, who controls the Company within
the meaning of Section 15 of the Securities Act or Section 20 of the Securities
Exchange Act against any and all loss, liability, claim, damage and expense
described in the indemnity contained in subsection (a) of this Section, as
incurred, but only with respect to untrue statements or omissions, or alleged
untrue statements or omissions, of a material fact made in the Registration
Statement (or any amendment thereto) or the Prospectus (or any amendment or
supplement thereto) in reliance upon and in conformity with the Agent
Information.
-28-
(c) Each indemnified party shall give notice as promptly as reasonably
practicable to each indemnifying party of any action commenced against it in
respect of which indemnity may be sought hereunder, but failure to so notify an
indemnifying party shall not relieve such indemnifying party from any liability
which it may have otherwise than on account of this indemnity agreement. An
indemnifying party may participate at its own expense in the defense of any such
action. In no event shall the indemnifying parties be liable for fees and
expenses of more than one counsel (in addition to no more than one local counsel
in each separate jurisdiction in which any action or proceeding is commenced)
separate from their own counsel for all indemnified parties in connection with
any one action or separate but similar or related actions in the same
jurisdiction arising out of the same general allegations or circumstances.
(d) The Company and the Bank also agree that the Agent shall not have
any liability (whether direct or indirect, in contract or tort or otherwise) to
the Bank, the Company, its security holders or the Bank's or the Company's
creditors relating to or arising out of the engagement of the Agent pursuant to,
or the performance by the Agent of the services contemplated by, this Agreement,
except to the extent that any loss, claim, damage or liability is found in a
final judgment by a court of competent jurisdiction to have resulted primarily
from the Agent's bad faith, willful misconduct or gross negligence.
(e) In addition to, and without limiting, the provisions of Section
(6)(a)(iv) hereof, in the event that any Agent, any person, if any, who controls
the Agent within the meaning of Section 15 of the Securities Act or Section 20
of the Securities Exchange Act or any of its partners, directors, officers,
employees or agents is requested or required to appear as a witness or otherwise
gives testimony in any action, proceeding, investigation or inquiry brought by
or on behalf of or against the Company or the Bank or any of its respective
affiliates or any participant in the transactions contemplated hereby in which
the Agent or such person or agent is not named as a defendant or subject to the
an investigation or inquiry, the Company and the Bank jointly and severally
agree to reimburse the Agent for all reasonable and necessary out-of-pocket
expenses incurred by it in connection with preparing or appearing as a witness
or otherwise giving testimony and to compensate the Agent in an amount to be
mutually agreed upon.
SECTION 7. Contribution. In order to provide for just and
equitable contribution in circumstances in which the indemnity agreement
provided for in Section 6 hereof is for any reason held to be unenforceable by
the indemnified parties although applicable in accordance with its terms, the
Company, the Bank and the Agent shall contribute to the aggregate losses,
liabilities, claims, damages and expenses of the nature contemplated by said
indemnity agreement incurred by the Company or the Bank and the Agent, as
incurred, in such proportions (i) that the Agent is responsible for that portion
represented by the percentage that the maximum aggregate marketing fees
appearing on the cover page of the Prospectus bears to the maximum aggregate
gross proceeds appearing thereon and the Company and the Bank are jointly and
severally responsible for the balance or (ii) if, but only if, the allocation
provided for in clause (i) is for any reason held unenforceable, in such
proportion as is appropriate to reflect not only the relative benefits to the
Company and the Bank on the one hand and the Agent on the other, as reflected in
clause (i), but also the relative fault of the Company and the Bank on the one
hand and the Agent on the other (relevant fault shall be determined by reference
-29-
to, among other things, whether the untrue statement of a material fact or
omission to state a material fact relates to information supplied by the Company
and Bank or the Agent and the parties relative intent, knowledge, and access to
information), as well as any other relevant equitable considerations; provided,
however, that no person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. For purposes of this Section, each person, if any, who
controls the Agent within the meaning of Section 15 of the Securities Act or
Section 20 of the Securities Exchange Act shall have the same rights to
contribution as the Agent, and each director of the Company, each director of
the Bank, each officer of the Company who signed the Registration Statement, and
each person, if any, who controls the Company or the Bank within the meaning of
Section 15 of the Securities Act or Section 20 of the Securities Exchange Act
shall have the same rights to contribution as the Company and the Bank.
Notwithstanding anything to the contrary set forth herein, to the extent
permitted by applicable law, in no event shall the Agent be required to
contribute an aggregate amount in excess of the aggregate marketing fees to
which the Agent is entitled and actually paid pursuant to this Agreement.
SECTION 8. Representations, Warranties and Agreements to Survive
Delivery. All representations, warranties and agreements contained in this
Agreement, or contained in certificates of officers of the Company or the Bank
submitted pursuant hereto, shall remain operative and in full force and effect,
regardless of any investigation made by or on behalf of any Agent or controlling
person, or by or on behalf of the Company, and shall survive delivery of the
Securities.
SECTION 9. Termination of Agreement.
(a) The Agent may terminate this Agreement, by notice to the Company,
at any time at or prior to Closing Time (i) if there has been, since the date of
this Agreement or since the respective dates as of which information is given in
the Registration Statement, any material adverse change in the condition,
financial or otherwise, or in the earnings, business or business Prospects of
the Company or the Bank, or the Company, the Bank and the Subsidiary considered
as one enterprise, whether or not arising in the ordinary course of business, or
(ii) if there has occurred any material adverse change in the financial markets
in the United States or elsewhere or any outbreak of hostilities or escalation
thereof or other calamity or crisis the effect of which, in the judgment of the
Agent, are so material and adverse as to make it impracticable to market the
Securities or to enforce contracts, including subscriptions or orders, for the
sale of the Securities, (iii) or if trading generally on either the Nasdaq Stock
Market or the New York Stock Exchange has been suspended, or minimum or maximum
prices for trading have been fixed, or maximum ranges for prices for securities
have been required, by either of such Exchange or Market or by order of the
Commission or any other governmental authority, or if a banking moratorium has
been declared by either Federal, New York or Idaho authorities, (iv) if any
condition specified in Section 5 shall not have been fulfilled when and as
required to be fulfilled; (v) if there shall have been such material adverse
change in the condition or prospects of the Company or the Bank or the
prospective market for the Company's securities as in the Agent's good faith
opinion would make it inadvisable to proceed with the offering, sale or delivery
of the Securities; (vi) if in the Agent's good faith opinion, the price for the
Securities
-30-
established by RP Financial, LC is not reasonable or equitable under then
prevailing market conditions, or (vii) if the Conversion is not consummated on
or prior to ____________________.
(b) If this Agreement is terminated pursuant to this Section, such
termination shall be without liability of any party to any other party except as
provided in Section 4 hereof relating to the reimbursement of expenses and
except that the provisions of Sections 6 and 7 hereof shall survive any
termination of this Agreement.
SECTION 10. Notices. All notices and other communications hereunder
shall be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication. Notices to the Agent
shall be directed to the Agent at Two World Trade Center, 104th Floor, New York,
New York 10048, attention of Xxxxxxxxx X. Xxxxxx, Principal, with a copy to V.
Xxxxxx Xxxxxxx, Esq.,Xxxxxxx Xxxxxxxx & Xxxx, 0000 X Xxxxxx, X.X., Xxxxxxxxxx,
X.X. 00000; notices to the Company and the Bank shall be directed to either of
them at 000 Xxxx Xxxxxx, Xxxxxxxx, Xxxxx 00000, attention of Xxxxx X. Xxxxxxx,
President and Chief Executive Officer with a copy to Xxxx X. Xxxxxx, Xx., Esq.,
Breyer & Aguggia, 0000 X Xxxxxx, X.X., Xxxxx 000 Xxxx, Xxxxxxxxxx, X.X. 00000.
SECTION 11. Parties. This Agreement shall inure to the benefit of and
be binding upon the Agent, the Company and the Bank and their respective
successors. Nothing expressed or mentioned in this Agreement is intended or
shall be construed to give any person, firm or corporation, other than the
Agent, the Company and the Bank and their respective successors and the
controlling persons and officers and directors referred to in Sections 6 and 7
and their heirs and legal representatives, any legal or equitable right, remedy
or claim under or in respect of this Agreement or any provision herein or
therein contained. This Agreement and all conditions and provisions hereof and
thereof are intended to be for the sole and exclusive benefit of the Agent, the
Company and the Bank and their respective successors, and said controlling
persons and officers and directors and their heirs and legal representatives,
and for the benefit of no other person, firm or corporation.
SECTION 12. Entire Agreement; Amendment. This Agreement represents
the entire understanding of the parties hereto with reference to the
transactions contemplated hereby and supersedes any and all other oral or
written agreements heretofore made. No waiver, amendment or other modification
of this Agreement shall be effective unless in writing and signed by the parties
hereto.
SECTION 13. Governing Law and Time. This Agreement shall be governed
by and construed in accordance with the laws of the State of New York applicable
to agreements made and to be performed in said State without regard to the
conflicts of laws provisions thereof. Unless otherwise noted, specified times
of day refer to Eastern time.
SECTION 14. Severability. Any term or provision of this Agreement
which is invalid or unenforceable in any jurisdiction shall, as to that
jurisdiction, be ineffective to the extent of such invalidity or
unenforceability without rendering invalid or unenforceable the remaining terms
and provisions of this Agreement or affecting the validity or enforceability of
any of the terms or provisions of this Agreement in any other jurisdiction. If
any provision of
-31-
this Agreement is so broad as to be unenforceable, the provision shall be
interpreted to be only so broad as is enforceable.
SECTION 15. Headings. Sections headings are not to be considered part
of this Agreement, are for convenience and reference only, and are not to be
deemed to be full or accurate descriptions of the contents of any paragraph or
subparagraph.
-32-
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Company a counterpart hereof, whereupon
this instrument, along with all counterparts, will become a binding agreement
between the Agent, the Company and the Bank in accordance with its terms.
Very truly yours,
FIRSTBANK CORP.
By:
---------------------------------------
Title:
FIRSTBANK NORTHWEST
By:
---------------------------------------
Title:
CONFIRMED AND ACCEPTED,
as of the date first above written:
SANDLER X'XXXXX & PARTNERS, L.P.
By: Sandler X'Xxxxx & Partners Corp.,
the sole general partner
By:
-----------------------------------
Xxxxxxxxx X. Xxxxxx
Vice President
