EXHIBIT 1.1
FORM OF PROPOSED AGENCY AGREEMENT
AMONG TIMBERLAND BANCORP, INC., TIMBERLAND SAVINGS BANK, SSB
AND XXXXXXX XXXX & CO.
TIMBERLAND BANCORP, INC.
Up to 6,612,500 Shares
COMMON STOCK
($0.01 Par Value)
Subscription Price $10.00 Per Share
AGENCY AGREEMENT
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____________, 1997
Xxxxxxx Xxxx & Company
000 Xxxxxxxxx Xxxxx
Xxxxxx, Xxxx 00000-0000
Ladies and Gentlemen:
Timberland Bancorp, Inc., a Washington corporation (the "Company") and
Timberland Savings Bank, S.S.B., Hoquiam, Washington, a Washington state
chartered mutual savings bank (the "Bank," which shall include all references to
the Bank in the mutual or stock form, as indicated by the context), with its
deposit accounts insured by the Savings Association Insurance Fund ("SAIF")
administered by the Federal Deposit Insurance Corporation ("FDIC"), hereby
confirm their agreement with Xxxxxxx Xxxx & Company, a division of Xxxxx,
Xxxxxxxx & Xxxxx, Inc. ("Xxxx") as follows:
SECTION 1. THE OFFERING. The Bank, in accordance with its plan of
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conversion adopted by its Board of Trustees of the Bank (the "Plan"), intends to
convert from a state chartered mutual savings bank to a state chartered stock
savings bank, and to issue all of its issued and outstanding capital stock to
the Company. In addition, pursuant to the Plan, the Company will offer and sell
up to 6,612,500 shares of its common stock, par value $0.01 per share (the
"Shares" or "Common Stock"), in a subscription offering (the "Subscription
Offering") to (1) depositors of the Bank with savings accounts of $50 or more as
of December 31, 1995 ("Eligible Account Holders"), (2) the Bank's Employee Stock
Ownership Plan ("ESOP"), (3) depositors of the Bank with savings accounts of $50
or more as of ____________, 1997 ("Supplemental Eligible Account Holders") and
(4) depositors of the Bank as of the Voting Record date, __________, 1997
("Other Members"). Subject to the prior subscription rights of the above-listed
parties, the Company is offering for sale in a direct community offering (the
"Community Offering" and, when referred to together with the Subscription
Offering, the "Subscription and Community Offering") conducted concurrently with
the Subscription Offering, the Shares not so subscribed for or ordered in the
Subscription Offering to certain members of the general public to whom a copy of
the Prospectus (as hereinafter defined) is delivered, with a preference given to
natural persons and trusts of natural persons who are permanent residents of
Grays Harbor, Xxxxxxxx, Xxxxxx and Xxxx Counties of Washington (the "Local
Community") ("Other Subscribers") (all such offerees being referred to in the
aggregate as "Eligible Offerees"). It is anticipated that shares not subscribed
for in the Subscription and Community Offering will be offered to members of the
general public on a best efforts basis by a selling group of broker-dealers
managed by Xxxx (the "Syndicated Community Offering") (the Subscription
Offering, Community Offering and Syndicated Community Offering are collectively
referred to as the "Offering"). It is acknowledged that the purchase of Shares
in the Offering is subject to the maximum and minimum purchase limitations as
described in the Plan and that the Company and the Bank may reject, in whole or
in part, any orders received in the Community Offering or Syndicated Community
Offering. Collectively, these transactions are referred to herein as the
"Conversion."
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-1 (File No. 333-35817) (the
"Registration Statement") containing a prospectus relating to the Offering for
the registration of the Shares under the Securities Act of 1933 (the "1933
Act"), and has filed such amendments thereof, if any, and such amended
prospectuses as may have been required to the date hereof. The prospectus, as
amended, on file with the Commission at the time the Registration Statement
initially became effective is hereinafter called the "Prospectus," except that
if any prospectus is filed by the Company pursuant to Rule 424(b) or (c) of the
rules and regulations of the Commission under the 1933 Act (the "1933 Act
Regulations") differing from the prospectus on file at the time the Registration
Statement initially becomes effective, the term "Prospectus" shall refer to the
prospectus filed pursuant to Rule 424(b) or (c) from and after the time said
prospectus is filed with the Commission.
In accordance with the Revised Code of Washington (the "RCW"), the Bank has
filed with the Washington Department of Financial Institutions, Division of
Banks (the "Division") an Application for Conversion (the "Conversion
Application"), including the prospectus, and has filed such amendments thereto,
if any, as may have been required by the Division. The Conversion Application
has been approved by the Division and the related Prospectus has been authorized
for use by the Division. The Bank has also filed a Notice of Conversion (the
"Notice") with the FDIC and has filed such amendments thereto as may have been
required by the FDIC. The FDIC has provided the Bank with a Notice of Non-
Objection (the "Non-Objection Notice") to the Conversion. In addition, the
Company has filed with the Board of Governors of the Federal Reserve System
("FRB") and the Division an application (the "Holding Company Application") to
become a bank holding company and for approval to acquire the Bank.
SECTION 2. RETENTION OF XXXX; COMPENSATION; SALE AND DELIVERY OF THE
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SHARES. Subject to the terms and conditions herein set forth, the Company and
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the Bank hereby appoint Xxxx (ii) as their exclusive financial advisory and
marketing agent to utilize its best efforts to solicit subscriptions for Shares
of the Common Stock and to advise and assist the Company and the Bank
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with respect to the Company's sale of the Shares in the Offering and (ii) to
participate in the Offering in the areas of market making, research coverage and
syndicate formation (if necessary).
On the basis of the representations, warranties, and agreements herein
contained, but subject to the terms and conditions herein set forth, Xxxx
accepts such appointment and agrees to consult with and advise the Company and
the Bank as to the matters set forth in the letter agreement ("Letter
Agreement"), dated July 28, 1997, between the Bank and Xxxx (a copy of which is
attached hereto as Exhibit A). It is acknowledged by the Company and the Bank
that Xxxx shall not be required to purchase any Shares and shall not be
obligated to take any action which is inconsistent with all applicable laws,
regulations, decisions or orders. In the event of a Syndicated Community
Offering, Xxxx will assemble and manage a selling group of broker-dealers which
are members of the National Association of Securities Dealers, Inc. (the "NASD")
to participate in the solicitation of purchase orders for shares under a
selected dealers' agreement ("Selected Dealers' Agreement"), the form of which
is set forth as Exhibit B to this Agreement.
The obligations of Xxxx pursuant to this Agreement shall terminate upon the
completion or termination or abandonment of the Plan by the Company or upon
termination of the Offering, but in no event later than March 31, 1998 (the "End
Date"). All fees or expenses due to Xxxx but unpaid will be payable to Xxxx in
next day funds at the earlier of the Closing Date (as hereinafter defined) or
the End Date. In the event the Offering is extended beyond the End Date, the
Company, the Bank and Xxxx may agree to renew this Agreement under mutually
acceptable terms.
In the event the Company is unable to sell a minimum of 4,250,000 Shares
(or such lesser amount approved by the Division) within the period herein
provided, this Agreement shall terminate and the Company shall refund to any
persons who have subscribed for any of the Shares, the full amount which it may
have received from them plus accrued interest as set forth in the Prospectus;
and none of the parties to this Agreement shall have any obligation to the other
parties hereunder, except as otherwise set forth in this Section 2 and in
Sections 6, 8 and 9 hereof.
In the event the Offering is terminated for any reason not attributable to
the action or inaction of Xxxx, Xxxx shall be paid the fees and expenses due to
the date of such termination pursuant to subparagraphs (a) and (d) below.
If all conditions precedent to the consummation of the Conversion,
including, without limitation, the sale of all Shares required by the Plan to be
sold, are satisfied, the Company agrees to issue, or have issued, the Shares
sold in the Offering and to release for delivery certificates for such Shares on
the Closing Date (as hereinafter defined) against payment to the Company by any
means authorized by the Plan, provided however, that no funds shall be released
to the Company until the conditions specified in Section 7 hereof shall have
been complied with to the reasonable satisfaction of Xxxx and its counsel. The
release of Shares against payment therefor shall be made at _____ _.m., Pacific
Time, on a date and at a place acceptable to the Company, the Bank and Xxxx (it
being understood that such date shall not be more than ten business days after
termination of the Offering) or such other time or place as shall be agreed upon
by the Company, the Bank and Xxxx.
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Certificates for shares shall be delivered directly to the purchasers in
accordance with their directions. The date upon which the Company shall release
or deliver, or have released or delivered, the Shares sold in the Offering, in
accordance with the terms herein, is called the "Closing Date."
Xxxx shall receive the following compensation for their services hereunder:
(a) A management fee to Xxxx in the amount of $25,000 payable in four
consecutive monthly installments of $6,250 commencing on August 1, 1997. Should
the Conversion be terminated for any reason not attributable to the action or
inaction of Xxxx, Xxxx shall have earned and be entitled to be paid fees
accruing through the stage at which point the termination occurred.
(b) A success fee of 1.25% of the dollar amount of Common Stock sold in the
Subscription and Community Offering, excluding Common Stock purchased by
directors, officers and employees (and members of their immediate families) of
the Bank and by the ESOP and any tax-qualified or stock-based compensation plan
(excluding individual retirement plans ("IRAs")) and any similar plan created by
the Bank for some or all of its directors or employees, payable on the Closing
Date. Such success fee shall not exceed $500,000.
(c) If any shares of the Company's stock remain available after the
Subscription and Community Offering, at the request of the Bank, Xxxx will seek
to form a syndicate of registered broker-dealers to assist in the sale of such
shares of Common Stock on a best efforts basis, subject to the terms and
conditions set forth in the selected dealers agreement. Xxxx will endeavor to
distribute the Common Stock among dealers in a fashion which best meets the
distribution objectives of the Bank and the Plan of Conversion. Xxxx will be
paid a fee not to exceed 5.5% of the aggregate Purchase Price of the shares of
Common Stock sold pursuant to the selected dealers agreement and then will pass
on to selected broker-dealers who assist in the syndicated community an amount
competitive with gross underwriting discounts charged at such time for
comparable amounts of stock sold at a comparable price per share in a similar
market environment. Fees with respect to purchases affected with the assistance
of a broker/dealer shall be transmitted by Xxxx to such broker/dealer. The
decision to utilize selected broker-dealers will be made by the Bank upon
consultation with Xxxx. In the event, with respect to any stock purchases, fees
are paid pursuant to this subparagraph 2(c), such fees shall be in lieu of, and
not in addition to, payment pursuant to subparagraphs 2(a) and 2(b).
(d) The Bank and the Company hereby agree to reimburse Xxxx, from time to
time upon Xxxx'x request, for its reasonable out-of-pocket expenses and the
reasonable fees and expenses of its counsel (such fees of counsel will not be
incurred without the prior approval of the Bank). Such reimbursement of legal
fees shall not exceed $35,000. The Bank will bear the expenses of the Offering
customarily borne by issuers including, without limitation, Division, SEC, "Blue
Sky," and NASD filing and registration fees; the fees of the Bank's accountants,
conversion agent, attorneys, appraiser, transfer agent and registrar, printing,
mailing and marketing expenses associated with the Conversion; and the fees set
forth under this Section 2.
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Full payment of Xxxx'x actual and accountable expenses, advisory fees and
compensation shall be made in next day funds on the earlier of the Closing Date
or a determination by the Bank to terminate or abandon the Plan.
The Bank shall pay Xxxx $7,500, plus reimbursement of reasonable out-of
pocket expenses, for the performance of conversion agent and other data
processing duties related to the Conversion. Xxxx shall subcontract such duties.
Xxxx will provide financial advisory assistance for a period of one year
following completion of the Conversion as set forth in the Letter Agreement.
Following this initial one-year term, if Xxxx and the Company wish to continue
the relationship, a fee will be negotiated and an agreement entered into at that
time.
SECTION 3. PROSPECTUS: OFFERING. The Shares are to be initially offered
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in the Offering at the Purchase Price as defined and set forth on the cover page
of the Prospectus.
SECTION 4. REPRESENTATIONS AND WARRANTIES. The Company and the Bank
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jointly and severally represent and warrant to Xxxx on the date hereof as
follows:
(a) The Registration Statement was declared effective by the Commission on
__________, 1997. At the time the Registration Statement, including the
Prospectus contained therein (including any amendment or supplement thereto),
became effective, the Registration Statement complied in all material respects
with the requirements of the 1933 Act and the 1933 Act Regulations and the
Registration Statement, including the Prospectus contained therein (including
any amendment or supplement thereto), and any information regarding the Company
or the Bank contained in Sales Information (as such term is defined in Section 8
hereof) authorized by the Company or the Bank for use in connection with the
Offering, did not contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading, and at the time any Rule 424(b) or (c) Prospectus was filed with
the Commission; provided, however, that the representations and warranties in
this Section 4(a) shall not apply to statements or omissions made in reliance
upon and in conformity with written information furnished to the Company or the
Bank by Xxxx expressly regarding Xxxx for use in the Prospectus under the
captions "The Conversion-Plan of Distribution for the Subscription, Direct
Community and Syndicated of Community Offerings" and "-Description of Sales
Activities" or statements in or omissions from any Sales Information or
information filed pursuant to state securities or blue sky laws or regulations
regarding Xxxx.
(b) The Bank has filed with the Division, pursuant to the RCW, the
Conversion Application and filed the FDIC Notice, including the Conversion
Application, with the FDIC and has filed such amendments thereto and
supplementary materials as may have been required to the date hereof including
copies of the Bank's Proxy Statement, to be dated ______________, 1997
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relating to the Conversion (the "Proxy Statement"), and the Prospectus. The
Division has, by order dated ______________, 1997, approved the Conversion
Application, such order remains in full force and effect and no order has been
issued by the Division suspending or revoking such order and no proceedings
therefor have been initiated or, to the knowledge of the Company or the Bank,
threatened by the Division. At the date of such approval and at the Closing Date
referred to in Section 2, the Conversion Application complied and will comply in
all material respects with the applicable provisions of the RCW. The FDIC has,
by letter dated __________, 1997, issued the Non-Objection Notice, such letter
remains in full force and effect and no letter or order has been issued by the
FDIC suspending or revoking such letter and no proceedings therefor have been
initiated or, to the knowledge of the Company or the Bank, threatened by the
FDIC. At the date of such approval, the FDIC Notice complied in all material
respects with the applicable provisions of the FDIC conversion regulations (the
"Conversion Regulations"). The Conversion Application and the FDIC Notice,
including the Prospectus (including any amendment or supplement thereto), do not
include any untrue statement of a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading; provided, however, that the
representations and warranties in this Section 4(b) shall not apply to
statements or omissions made in reliance upon and in conformity with written
information furnished to the Company or the Bank by Xxxx expressly regarding
Xxxx for use in the Prospectus contained in the Conversion Application under the
caption "The Conversion-Plan of Distribution for the Subscription, Direct
Community and Syndicated Community Offerings" or statements in or omissions from
any sales information or information filed pursuant to state securities or blue
sky laws or regulations regarding Xxxx.
(c) The Company has filed with the FRB the Company's application for
approval of its acquisition of the Bank on Form FR Y-3 (the "FR Y-3
Application") pursuant to Section 3(a) of the Bank Holding Company Act of 1956,
as amended ("BHCA") and the regulations promulgated thereunder.
(d) No order has been issued by the Commission, the FDIC, the FRB or the
Division preventing or suspending the use of the Prospectus and no action by or
before any such government entity to revoke any approval, authorization or order
of effectiveness related to the Conversion is, to the best knowledge of the
Company or the Bank, pending or threatened.
(e) To the best knowledge of the Company, no person has sought to obtain
review of the final action of the FDIC, the FRB or the Division in approving or
taking no objection to the Plan or in approving the Conversion or the Holding
Company Application pursuant to the RCW, the Conversion Regulations, the BHCA,
or any other applicable statute or regulation.
(f) At the time of their use, the Proxy Statement and any other proxy
solicitation materials will complying all material respects with the applicable
provisions of the RCW 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
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misleading. The Company and the Bank will promptly file the Prospectus and any
supplemental sales literature with the Division and the FDIC. The Prospectus
and all supplemental sales literature, as of the date the Registration Statement
became effective and at the Closing Date referred to in Section 2, complied and
will comply in all material respects with the applicable requirements of the RCW
and the Conversion Regulations and, at or prior to the time of their first use,
will have received all required authorizations of the Division and the FDIC for
use in final form.
(g) The Bank has been duly organized and is a validly existing state
chartered savings bank in the mutual form of organization under the laws of the
State of Washington and upon consummation of the Conversion will become a duly
organized and validly existing state chartered savings bank in the capital stock
form of organization under the laws of the State of Washington, in both
instances duly authorized to conduct its business and own its property as
described in the Registration Statement and the Prospectus; the Bank has
obtained all material licenses, permits and other governmental authorizations
currently required for the conduct of its business; all such licenses, permits
and governmental authorizations are in full force and effect, and the Bank is in
all material respects complying with all laws, rules, regulations and orders
applicable to the operation of its business; the Bank is existing under the laws
of the State of Washington and is duly qualified as a foreign corporation to
transact business and is in good standing in each jurisdiction in which its
ownership of property or leasing of property or the conduct of its business
requires such qualification, unless the failure to be so qualified in one or
more of such jurisdictions would not have a material adverse effect on the
financial condition, or the business, operations or income of the Bank. The
Bank does not own equity securities or any equity interest in any other business
enterprise except as described in the Prospectus or as would not be material to
the operations of the Bank.
(h) The Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the State of Washington with
corporate power and authority to own, lease and operate its properties and to
conduct its business as described in the Registration Statement and the
Prospectus, and the Company is qualified to do business as a foreign corporation
in each jurisdiction in which the conduct of its business requires such
qualification, except where the failure to so qualify would not have a material
adverse effect on the financial condition, or the business, operations or income
of the Company. The Company has obtained all material licenses, permits and
other governmental authorizations currently required for the conduct of its
business; all such licenses, permits and ,governmental authorizations are in
full force and effect, and the Company is in all material respects complying
with all laws, rules, regulations and orders applicable to the operation of its
business.
(i) The Bank's wholly owned subsidiary, Timberland Service Corporation (the
"Subsidiary"), is duly incorporated and validly existing as a corporation in
good standing under the laws of the State of Washington, and is duly licensed
and possessed of full corporate power and authority to own its properties and
conduct its business as described in the Prospectus and is duly qualified to
transact business and is in good standing in each jurisdiction in which the
failure to so qualify would have a material adverse effect on the financial
condition, results of operations or
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business prospects of the Company, the Bank and the Subsidiary, taken as a
whole; the activities of the Subsidiary are permitted to subsidiaries of a
Washington state chartered savings bank by the rules, regulations, resolutions
and practices of the Division; all of the issued and outstanding capital stock
of the Subsidiary has been duly authorized and validly issued, is fully paid and
nonassessable and is owned by the Bank, free and clear of any security interest,
mortgage, pledge, lien, encumbrance, claim or equitable claim.
(j) The Bank is a member of the Federal Home Loan Bank of Seattle ("FHLB-
Seattle"). The deposit accounts of the Bank are insured by the FDIC up to the
applicable limits; and no proceedings for the termination or revocation of such
insurance are pending or, to the best knowledge of the Bank, threatened. Upon
consummation of the 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 RCW and the Conversion
Regulations.
(k) The Company and the Bank have good and marketable title to all real
property and other assets material to the business of the Company and the Bank
and to those properties and assets described in the Registration Statement and
Prospectus as owned by them, free and clear of all liens, charges, encumbrances
or restrictions, except such as are described in the Registration Statement and
Prospectus or are not material to the business of the Company and the Bank taken
as a whole; and all of the leases and subleases material to the business of the
Company and the Bank under which the Company or the Bank hold properties,
including those described in the Registration Statement and Prospectus, are
valid and binding agreements of the Company, the Bank or the Subsidiary,
enforceable in accordance with their terms, subject, as to enforceability, to
bankruptcy, insolvency, reorganization, moratorium and other laws of general
applicability relating to or affecting creditors' rights, and to general
principles of equity.
(l) The Company and the Bank have all such power, authority,
authorizations, approvals and orders as may be required to enter into this
Agreement, to carry out the provisions and conditions hereof and to issue and
sell (i) the capital stock of the Bank to the Company and (ii) the Shares to be
sold by the Company as provided herein and as described in the Prospectus.
(m) The Company and the Bank are not in violation of any directive received
from the FDIC, the FRB or the Division to make any material change in the method
of conducting their businesses so as to comply in all material respects with all
applicable statutes and regulations (including, without limitation, regulations,
decisions, directives and orders of the FDIC, the FRB and the Division), and,
except as set forth in the Registration Statement and the Prospectus, there is
no action, suit or proceeding before or by any court, regulatory authority or
governmental agency or body, pending or, to the knowledge of the Company and the
Bank, threatened, which would materially and adversely affect the Conversion,
the performance of this Agreement or the consummation of the transactions
contemplated in the Plan and as described in the Registration Statement and the
Prospectus or which would result in any material adverse change in the financial
condition, results of operations or business prospects of the Company, or the
Bank.
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(n) The Bank has obtained opinions of its special counsel, Breyer &
Aguggia, with respect to the legality of the Securities issued and the federal
income tax consequences of the Conversion copies of which are filed as exhibits
to the Registration Statement; the summaries of the aforesaid opinions as
disclosed in the Prospectus are accurate and complete in all material respects;
and 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.
(o) The consolidated financial statements which are included in the
Prospectus fairly present the financial condition, results of operations,
retained earnings and cash flows of the Bank at the respective dates thereof and
for the respective periods covered thereby and comply as to form in all material
respects with the applicable accounting requirements of the Commission, and the
rules and regulations of the FDIC and the Division. Such financial statements
have been prepared in accordance with generally accepted accounting principles
consistently applied through the periods involved except as noted therein,
present fairly in all material respects the information required to be stated
therein and are consistent with the most recent financial statements and other
reports filed by the Bank with the Division and the FDIC. The other financial,
statistical and pro forma information and related notes (except the appraisal
data) included in the Prospectus present fairly the information shown therein on
a basis consistent with the audited and unaudited consolidated financial
statements of the Bank included in the Prospectus, and as to the pro forma
adjustments, the adjustments made therein have been properly applied on the
basis described therein.
(p) Since the respective dates as of which information is given in the
Registration Statement and the Prospectus: (i) there has not been any material
adverse change, in the financial condition of the Company, the Bank or the
Subsidiary considered as one enterprise, or in the financial condition, results
of operation or business prospects of the Company or the Bank, whether or not
arising in the ordinary course of business; (ii) there has not been any material
increase in the long term debt of the Bank or in loans past due 90 days or more
or real estate acquired by foreclosure, by deed-in-lieu of foreclosure or deemed
in-substance foreclosure or early material decrease in surplus and reserves or
total assets of the Bank nor has the Company or the Bank issued any securities
(other than as contemplated by this Agreement) or incurred any liability or
obligation for borrowing other than in the ordinary course of business and (iii)
there have not been any material transactions entered into by the Company or the
Bank, except with respect to those transactions entered into in the ordinary
course of business.
(q) The capitalization, liabilities, assets, properties and business of the
Company and the Bank conform in all material respects to the descriptions
thereof contained in the Prospectus.
(r) Neither the Company nor the Bank has any material contingent
liabilities, except as set forth in the Prospectus.
(s) As of the date hereof, neither the Company, the Bank nor the Subsidiary
is in violation of its articles of incorporation or bylaws or charter or bylaws,
as applicable (and the Bank will not be in violation of its charter or bylaws in
capital stock form at the time of consummation of
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the Conversion), or in default in the performance or observance of any material
obligation, agreement, covenant, or condition contained in any material
contract, lease, loan agreement, indenture or other instrument to which it is a
party or by which it or any other instrument to which it is a party or by which
it or any of its property may be bound; the consummation of the Conversion, the
execution, delivery and performance of this Agreement and the consummation of
the transactions herein contemplated have been duly and validly authorized by
all necessary corporate action on the part of the Company and the Bank and this
Agreement has been validly executed and delivered by the Company and the Bank
and is the valid, legal and binding Agreement of the Company and the Bank
enforceable in accordance with its terms, except as the enforceability thereof
may be limited by (i) bankruptcy, insolvency, or other laws now or hereafter in
effect affecting the enforceability of the rights of creditors generally or the
rights of creditors of Washington state chartered savings banks and their
holding companies, (ii) general equitable principles, and (iii) applicable law
with respect to the indemnification and/or contribution provisions contained
herein (regardless of whether such enforceability is considered in a proceeding
in equity or at law). The consummation of the transactions herein contemplated
will not: (i) conflict with or constitute a breach of, or default under, the
articles of incorporation and bylaws of the Company or the charter and bylaws of
the Bank (in either mutual or capital stock form), or any material contract,
lease or other instrument to which the Company or the Bank is a party, or any
applicable law, rule, regulation or order; (ii) violate any authorization,
approval, judgement, decree, order, statute, rule or regulation applicable to
the Company or the Bank, except for such violation which would not have a
material adverse effect on the financial condition and results of operations of
the Company and the Bank on a consolidated basis; or (iii) with the exception of
the liquidation account established in the Conversion, result in the creation of
any material lien, charge or encumbrance upon any property of the Company or the
Bank.
(t) No default exists, and no event has occurred which with notice or lapse
of time, or both, would constitute a default on the part of the Company, the
Bank or the Subsidiary, in the due performance and observance of any term,
covenant or condition of any indenture, mortgage, deed of trust, note, bank loan
or credit agreement or any other instrument of agreement to which the Company,
the Bank or the Subsidiary is a party or by which any of them or any of their
property is bound or affected except such defaults which would not have a
material adverse effect on the financial condition or results of operations of
the Company, the Bank and the Subsidiary on a consolidated basis; such
agreements are in full force and effect; and no other party to any such
agreements has instituted or, to the best knowledge of the Company, the Bank and
the Subsidiary, threatened any action or proceeding wherein the Company, the
Bank or the Subsidiary would be alleged to be in default thereunder under
circumstances where such action or proceeding, if determined adversely to the
Company, the Bank or the Subsidiary would have a material adverse effect on the
Company, the Bank and the Subsidiary, taken as a whole.
(u) Upon consummation of the Conversion, the authorized, issued and
outstanding equity capital of the Company will be within the range set forth in
the Prospectus under the caption "Capitalization," and no shares of Common Stock
have been or will be issued and outstanding prior to the Closing Date referred
to in Section 2; the Shares will have been duly and validly authorized
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for issuance and, when issued and delivered by the Company pursuant to the Plan
against payment of the consideration calculated as set forth in the Plan and in
the Prospectus, will be duly and validly issued, fully paid and non-assessable;
no preemptive rights exist with respect to the Shares; and the terms and
provisions of the Shares will conform in all material respects to the
description thereof contained in the Registration Statement and the Prospectus.
To the best knowledge of the Company and the Bank, upon the issuance of the
Shares, good title to the Shares will be transferred from the Company to the
purchasers thereof against payment therefor, subject to such claims as may be
asserted against the purchasers thereof by third-party claimants.
(v) Neither the Company nor the Bank is required to obtain any approval or
notice of non-objection from any regulatory or supervisory or other public
authority in connection with the execution and delivery of this Agreement or the
issuance of the Shares, except for the approval of the Commission, the Division,
the FRB and the FDIC and any necessary qualification, notification, registration
or exemption under the securities or blue sky laws of the various states in
which the Shares are to be offered, and except as may be required under the
rules and regulations of the NASD and/or the National Market System of the
Nasdaq Stock Market.
(w) Xxxxx, Xxxxxxxxx & Coulsen, P.C., which has certified the consolidated
financial statements of the Bank included in the Prospectus as of September 30,
1996 and 1995 and for each of the years in the two-year period ended September
30, 1996, has advised the Company and the Bank in writing that they are, with
respect to the Company and the Bank, independent public accountants within the
meaning of the Code of Professional Ethics of the American Institute of
Certified Public Accountants as required by the 1933 Act and the 1933 Act
Regulations.
(x) R.P. Financial, LC, which has prepared the Bank's Conversion Valuation
Appraisal Report as of ___________, 1997 (as amended or supplemented, if so
amended or supplemented) (the "Appraisal"), has advised the Company in writing
that it is independent of the Company and the Bank within the meaning of the
Conversion Regulations.
(y) The Company and the Bank have timely filed all required federal, state
and local tax returns; the Company and the Bank have paid all taxes that have
become due and payable in respect of such returns, except where permitted to be
extended; and no deficiency has been asserted with respect thereto by any taxing
authority and, to the best knowledge of the Bank, adequate reserves have been
made for similar future tax liabilities.
(z) The Company and the Bank are in compliance in all material respects
with the applicable financial record-keeping and reporting requirements of the
Currency and Foreign Transactions Reporting Act of 1970, as amended, and the
regulations and rules thereunder.
(aa) To the knowledge of the Company and the Bank, neither the Company, the
Bank nor employees of the Company or the Bank have made any payment of funds of
the Company or the Bank as a loan for the purchase of the Shares.
11
(bb) To the knowledge of the Company and the Bank, all of the loans
represented as assets on the most recent consolidated financial statements or
consolidated selected financial information of the Company and 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 requirements of Regulations Z and 12 C.F.R. Part 226), 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, taken as a whole.
(cc) Prior to the Conversion, the Bank was not authorized to issue shares
of capital stock and neither the Company nor the Bank has: (i) issued any
securities within the last 18 months (except for notes to evidence other bank
loans and reverse repurchase agreements or other liabilities in the ordinary
course of business or as described in the Prospectus); (ii) had any material
dealings within the 12 months prior to the date hereof with any member of the
NASD, or any person related to or associated with such member, other than
discussions and meetings relating to the proposed Offering and routine purchases
and sales of United States government and agency securities; (iii) entered into
a financial or management consulting agreement except as contemplated hereunder
and except for the Letter Agreement set forth in Exhibit A; and (iv) engaged any
intermediary between Xxxx and the Company and the Bank in connection with the
offering of the Shares, and no person is being compensated in any manner for
such service.
(dd) The Company and the Bank have not relied upon Xxxx or Xxxx'x counsel
for any legal, tax or accounting advice in connection with the Conversion.
(ee) The Company is not required to be registered under the Investment
Company Act of 1940, as amended.
Any certificates signed by an officer of the Company or the Bank pursuant
to the conditions of this Agreement and delivered to Xxxx or its counsel that
refers to this Agreement shall be deemed to be a representation and warranty by
the Company or the Bank to Xxxx as to the matters covered thereby with the same
effect as if such representation and warranty were set forth herein.
SECTION 5. REPRESENTATIONS AND WARRANTIES OF XXXX.
--------------------------------------
(a) Xxxx represents and warrants to the Company and the Bank that:
(i) Xxxx is a corporation and is validly existing in good standing
under the laws of the State of Ohio with full power and
authority to provide the services to be furnished to the Bank
and the Company hereunder.
(ii) The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby have been
duly and validly authorized by
12
all necessary action on the part of Xxxx, and this Agreement
has been duly and validly executed and delivered by Xxxx and is
the legal, valid and binding agreement of Xxxx, enforceable in
accordance with its terms, 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.
(iii) Each of Xxxx and its employees, agents and representatives who
shall perform any of the services hereunder shall be duly
authorized and empowered, and shall have all licenses,
approvals and permits necessary to perform such services.
(iv) The execution and delivery of this Agreement by Xxxx, the
consummation of the transactions contemplated hereby and
compliance with the terms and provisions hereof will not
conflict with, or result in a breach of, any of the terms,
provisions or conditions of, or constitute a default (or event
which with notice or lapse of time or both would constitute a
default) under, the articles of incorporation of Xxxx or any
agreement, indenture or other instrument to which Xxxx is a
party or by which it or its property is hound.
(v) No approval of any regulatory or supervisory or other public
authority is required in connection with Xxxx'x execution and
delivery of this Agreement, except as may have been received.
(vi) There is no suit or proceeding or charge or action before or by
any court, regulatory authority or government agency or body
or, to the best knowledge of Xxxx, pending or threatened, which
might materially adversely affect Xxxx'x performance under this
Agreement.
SECTION 5.1 COVENANTS OF THE COMPANY AND THE BANK. The Company and the
-------------------------------------
Bank hereby jointly and severally covenant with Xxxx as follows:
(a) The Company will not, at any time after the date the Registration
Statement is declared effective, file any amendment or supplement to the
Registration Statement without providing Xxxx and its counsel an opportunity to
review such amendment or supplement or file any amendment or supplement to which
amendment or supplement Xxxx or its counsel shall reasonably object.
(b) The Bank will not, at any time after the Conversion Application is
approved by the Division, file any amendment or supplement to such Conversion
Application without providing
13
Xxxx and its counsel an opportunity to review such amendment or supplement or
file any amendment or supplement to which amendment or supplement Xxxx or its
counsel shall reasonably object.
(c) The Bank will not, at any time after the FDIC issues its Notice of
Objection, file any amendment or supplement to the FDIC Notice without providing
Xxxx and its counsel an opportunity to review such amendment or supplement or
file any amendment or supplement to which amendment or supplement Xxxx or its
counsel shall reasonably object.
(d) The Company will not, at any time before the Holding Company
Application is approved by the FRB, file any amendment or supplement to such
Holding Company Application without providing Xxxx and its counsel an
opportunity to review such amendment or supplement or file any amendment or
supplement to which amendment or supplement Xxxx or its counsel shall reasonably
object.
(e) The Company and the Bank will use their best efforts to cause any post-
effective amendment to the Registration Statement to be declared effective by
the Commission and any post-effective amendment to the Conversion Application to
be approved by the Division and will immediately upon receipt of any information
concerning the events listed below notify Xxxx: (i) when the Registration
Statement, as amended, has become effective; (ii) when the Conversion
Application, as amended, has been approved by the Division; (iii) when the
Holding Company Application, as amended, has been approved by the FRB; (iv) when
the Notice of Non-Objection, as amended, has been received from the FDIC; (v) of
any comments from the Commission, the Division, the FRB, the FDIC or any other
governmental entity with respect to the Conversion or the transactions
contemplated by this Agreement; (vi) of the request by the Commission, the
Division, the FRB, or the FDIC or any other governmental entity for any
amendment or supplement to the Registration Statement, the Conversion
Application, the FDIC Notice or the Holding Company Application or for
additional information; (vii) of the issuance by the Commission, the Division,
the FRB, the FDIC or any other governmental entity of any order or other action
suspending the Offering or the use of the Registration Statement or the
Prospectus or any other filing of the Company or the Bank under the Conversion
Regulations, or other applicable law, or the threat of any such action; (viii)
the issuance by the Commission, the Division, the FRB, the FDIC or any state
authority of any stop order suspending the effectiveness of the Registration
Statement or the approval of the Conversion Application or Holding Company
Application, or of the initiation or threat of initiation or threat of any
proceedings for any such purpose; or (ix) of the occurrence of any event
mentioned in paragraph (i) below. The Company and the Bank will make every
reasonable effort (i) to prevent the issuance by the Commission, the Division,
the FRB, the FDIC or any state authority of any such order and, if any such
order shall at any time be issued, (ii) to obtain the lifting thereof at the
earliest possible time.
(f) The Company and the Bank will deliver to Xxxx and to its counsel two
conformed copies of the Registration Statement, the Conversion Application, the
FDIC Notice and the Holding Company Application, as originally filed and of each
amendment or supplement thereto, including
14
all exhibits. Further, the Company and the Bank will deliver such additional
copies of the foregoing documents to counsel to Xxxx as may be required for any
NASD filings.
(g) The Company and the Bank will furnish to Xxxx, from time to time during
the period when the Prospectus (or any later prospectus related to this
offering) is required to be delivered under the 1933 Act or the Securities
Exchange Act of 1934, (the "1934 Act"), such number of copies of such Prospectus
(as amended or supplemented) as Xxxx may reasonably request for the purposes
contemplated by the 1933 Act, the 1933 Act Regulations, the 1934 Act or the
rules and regulations promulgated under the 1934 Act (the "1934 Act
Regulations"). The Company authorizes Xxxx to use the Prospectus (as amended or
supplemented, if amended or supplemented) in any lawful manner contemplated by
the Plan in connection with the sale of the Shares by Xxxx.
(h) The Company and the Bank will comply with any and all material terms,
conditions, requirements and provisions with respect to the Conversion imposed
by the Commission, the Division, the FRB, the FDIC, the Conversion Regulations,
the RCW or the BHCA, and by the 1933 Act, the 1933 Act Regulations, the 1934 Act
and the 1934 Act Regulations to be complied with prior to or subsequent to the
Closing Date and when the Prospectus is required to be delivered, the Company
and the Bank will comply, at their own expense, with all material requirements
imposed upon them by the Commission, the Division, the FRB, the FDIC, the
Conversion Regulations, the RCW or the BHCA, and by the 1993 Act, the 1933 Act
Regulations, the 1934 Act and the 1934 Act Regulations, in each case as from
time to time in force, so far as necessary to permit the continuance of sales or
dealing in shares of Common Stock during such period in accordance with the
provisions hereof and the Prospectus.
(i) If, at any time during the period when the Prospectus relating to the
Shares is required to be delivered, any event relating to or affecting the
Company, the Bank or the Subsidiary shall occur, as a result of which it is
necessary or appropriate, in the opinion of counsel for the Company and the Bank
to amend or supplement the Registration Statement or Prospectus in order to make
the Registration Statement or Prospectus not misleading in light of the
circumstances existing at the time the Prospectus is delivered to a purchaser,
the Company and the Bank will, at their expense, prepare and file with the
Commission, the Division, the FRB and the FDIC and furnish to Xxxx a reasonable
number of copies of an amendment or amendments of, or a supplement or
supplements to, the Registration Statement and Prospectus (in form and substance
satisfactory to Xxxx and its counsel after a reasonable time for review) which
will amend or supplement the Registration Statement and Prospectus so that as
amended or supplemented it will not contain an untrue statement of a material
fact or omit to state a material fact necessary in order to make the statements
therein, in light of the circumstances existing at the time the Prospectus is
delivered to a purchaser, not misleading. For the purpose of this Agreement,
the Company and the Bank each will timely furnish to Xxxx such information with
respect to itself as Xxxx may from time to time reasonably request.
(j) At the Closing Date referred to in Section 2, the Plan will have been
adopted by the Board of Directors of the Company and the Board of Trustees of
the Bank and the offer and sale of the Shares will have been conducted in all
material respects in accordance with the Plan, the
15
Conversion Regulations, the RCW, the BHCA 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 Commission, Division, the FRB, the FDIC or any other regulatory authority
and in the manner described in the Prospectus.
(k) Upon completion of the sale by the Company of the Shares contemplated
by the Prospectus, (i) the Bank will be converted pursuant to the Plan to a
Washington state chartered stock savings bank, (ii) all of the authorized and
outstanding capital stock of the Bank will be owned by the Company, and (iii)
the Company will have no direct subsidiaries other than the Bank. The
Conversion will have been effected in all material respects in accordance with
all applicable statutes, regulations, decisions and orders; and, except with
respect to the filing of certain post-sale, post-Conversion reports, and
documents in compliance with the 1933 Act Regulations, and all terms,
conditions, requirements and provisions with respect to the Conversion (except
those that are conditions subsequent) imposed by the Commission, the Division,
the FRB and the FDIC, if any, will have been complied with by the Company and
the Bank in all material respects or appropriate waivers will have been obtained
and all material notice and waiting periods will have been satisfied, waived or
elapsed.
(l) The Company and the Bank will take all necessary actions, in
cooperation with Xxxx, and furnish to whomever Xxxx may direct, such information
as may be required to qualify or register the Shares for offering and sale by
the Company or to exempt such Shares from registration, or to exempt the Company
as a broker-dealer and its officers, directors and employees as broker-dealers
or agents under the applicable securities or blue sky laws of such jurisdictions
in which the Shares are to be offered and sold as Xxxx and the Company and the
Bank may reasonably agree upon; provided, however, that the Company shall not be
obligated to file any general consent to service of process or to qualify to do
business in any jurisdiction in which it is not so qualified. In each
jurisdiction where any of the Shares shall have been qualified or registered as
above provided, the Company will make and file such statements and reports in
each fiscal period as are or may be required by the laws of such jurisdiction.
(m) The liquidation account for the benefit of Eligible Account Holders and
Supplemental Eligible Account Holders will be duly established and maintained in
accordance with the requirements of the Division, and such Eligible Account
Holders and Supplemental Eligible Account Holders who continue to maintain their
savings accounts in the Bank will have an inchoate interest in their pro rata
portion of the liquidation account which shall have a priority superior to that
of the holders of shares of Common Stock in the event of a complete liquidation
of the Bank.
(n) The Company and the Bank will not sell or issue, contract to sell or
otherwise dispose of, for a period of 180 days after the Closing Date, without
Xxxx'x prior written consent, any shares of Common Stock other than the Shares
or other than in connection with any plan or arrangement described in the
Prospectus
16
(o) The Company shall register its Common Stock under Section 12(g) of the
1934 Act concurrent with the Offering pursuant to the Plan and shall request
that such registration be effective upon completion of the Conversion. The
Company shall maintain the effectiveness of such registration for not less than
three (3) years or such shorter period as may be required by the Division.
(p) During the period during which the Company's Common Stock is registered
under the 1934 Act or for three years from the date hereof, whichever period is
greater, the Company will furnish to its stockholders as soon as practicable
after the end of each fiscal year an annual report of the Company (including a
consolidated balance sheet and statements of consolidated income, stockholders'
equity and cash flows of the Company and its subsidiaries as at the end of and
for such year, certified by independent public accountants in accordance with
Regulation S-X under the 1933 Act and the 1934 Act).
(q) During the period of three years from the date hereof, the Company will
furnish to Xxxx: (i) as soon as practicable after such information is publicly
available, a copy of each report of the Company furnished to or filed with the
Commission under the 1934 Act or any national securities exchange or system on
which any class of securities of the Company is listed or quoted (including, but
not limited to, reports on Forms 10-K, 10-Q and 8-K and all proxy statements and
annual reports to stockholders), (ii) a copy of each other non-confidential
report of the Company mailed to its stockholders or filed with the Commission,
the Division, or the FDIC or any other supervisory or regulatory authority or
any national securities exchange or system on which any class of securities of
the Company is listed or quoted, each press release and material news items and
additional documents and information with respect to the Company or the Bank as
Xxxx may reasonably request; and (iii) from time to time, such other
nonconfidential information concerning the Company or the Bank as Xxxx may
reasonably request.
(r) The Company and the Bank will use the net proceeds from the sale of the
Shares in the manner set forth in the Prospectus under the caption "Use of
Proceeds."
(s) Other than as permitted by the Conversion Regulations, the RCW, the
BHCA, the 1933 Act, the 1933 Act Regulations, and the laws of any state in which
the Shares are registered or qualified for sale or exempt from registration,
neither the Company nor the Bank will distribute any prospectus or other
offering material in connection with the offer and sale of the Shares.
(t) The Company will use its best efforts to (i) encourage and assist three
market makers to establish and maintain a market for the Shares and (ii) list
the Shares on a national or regional securities exchange or on the Nasdaq
National Market of the Nasdaq Stock Market effective on or prior to the Closing
Date.
(u) The Bank will maintain appropriate arrangements for depositing all
funds received from persons mailing subscriptions for or orders to purchase
Shares in the Offering on an interest bearing basis at the rate described in the
Prospectus until the Closing Date and satisfaction of all
17
conditions precedent to the release of the Bank's obligation to refund payments
received from persons subscribing for or ordering Shares in the Offering in
accordance with the Plan and as described in the Prospectus or until refunds of
such funds have been made to the persons entitled thereto or withdrawal
authorizations cancelled in accordance with the Plan and as described in the
Prospectus. The Bank will maintain such records of all funds received to permit
the funds of each subscriber to be separately insured by the FDIC (to the
maximum extent allowable) and to enable the Bank to make the appropriate refunds
of such funds in the event that such refunds are required to be made in
accordance with the Plan and as described in the Prospectus.
(v) Prior to the Closing Date, the Holding Company Application shall have
been approved by the FRB. The Company will promptly take all necessary action
to register as a savings and loan holding company under the BHCA within 90 days
of the Closing Date.
(w) The Company and the Bank will take such actions and furnish such
information as are reasonably requested by Xxxx in order for Xxxx to ensure
compliance with the NASD's "Interpretation Relating to Free Riding and
Withholding."
(x) The Bank will not amend the Plan of Conversion without notifying Xxxx
prior thereto.
(w) The Company shall assist Xxxx, if necessary, in connection with the
allocation of the Shares in the event of an oversubscription and shall provide
Xxxx with any information necessary in allocating the Shares in such event.
(z) Prior to the Closing Date, the Company and the Bank will inform Xxxx of
any event or circumstances of which it is aware as a result of which the
Registration Statement, the Conversion Application and/or Prospectus, as then
amended or supplemented, would contain an untrue statement of a material fact or
omit to state a material fact necessary in order to make the statements therein
not misleading.
SECTION 5.2 COVENANTS OF XXXX. Xxxx hereby covenants with the Company and
-----------------
the Bank as follows:
(a) During the period when the Prospectus is delivered, Xxxx will comply,
in all material respects and at its own expense, with all requirements imposed
upon it by the Commission and the NASD, including to the extent applicable, by
the 1933 Act and the 1934 Act and the rules and regulations promulgated
thereunder.
(b) Xxxx will distribute copies of the Prospectus and Sales Information in
connection with the sales of the Common Stock only in accordance with NASD and
SEC regulations, the 1933 Act and the rules and regulations promulgated
thereunder.
18
(c) Xxxx shall use its best efforts to assist the Company in obtaining at
least three market makers for the shares of Common Stock.
SECTION 6. PAYMENT OF EXPENSES. Whether or not the Conversion is
-------------------
completed or the sale of the Shares by the Company is consummated, the Company
and the Bank jointly and severally agree to pay or reimburse Xxxx for: (a) all
filing fees in connection with all filings with the NASD; (b) any stock issue or
transfer taxes which may be payable with :respect to the sale of the Shares; (c)
all reasonable expenses of the Conversion, including but not limited to, the
Company's and the Bank's attorneys' fees, transfer agent, registrar and other
agent charges, fees relating to auditing and accounting or other advisors and
costs of printing all documents necessary in connection with the Conversion and
(d) all reasonable out-of-pocket expenses incurred by Xxxx. Such out-of-pocket
expenses include, but are not limited to, travel, communications and postage and
reasonable legal fees of counsel, which legal fees shall not exceed $35,000.
However, such out-of-pocket expenses do not include expenses incurred with
respect to the matters set forth in (a) and (b) above. In the event the Company
is unable to sell a minimum of 4,250,000 Shares or the Conversion is terminated
or otherwise abandoned, the Company and the Bank shall reimburse Xxxx in
accordance with Section 2 hereof.
SECTION 7. CONDITIONS TO XXXX'X OBLIGATIONS. Xxxx'x obligations
--------------------------------
hereunder, as to the Shares to be issued at the Closing Date, are subject, to
the extent not waived by Xxxx, to the condition that all representations and
warranties of the Company and the Bank herein are, at and as of the commencement
of the Offering and at and as of the Closing Date, true and correct in all
material respects, the condition that the Company and the Bank shall have
performed all of their obligations hereunder to be performed on or before such
dates, and to the following further conditions:
(a) At the Closing Date, the Company and the Bank shall have conducted the
Conversion in all material respects in accordance with the Plan, the Conversion
Regulations, the RCW and all other applicable laws, regulations, decisions and
orders, including all terms, conditions, requirements and provisions precedent
to the Conversion imposed upon them by the Division, the FDIC and the FRB.
(b) The Registration Statement shall have been declared effective by the
Commission, the Conversion Application approved by the Division, the Holding
Company Application approved by the FRB and the Notice of Non-Objection received
from the FDIC not later than 5:30 p.m. on the date of this Agreement, or with
Xxxx'x consent at a later time and date; and at the Closing Date, no stop order
suspending the effectiveness of the Registration Statement shall have been
issued under the 1933 Act or proceedings therefore initiated or threatened by
the Commission, or any state authority and no order or other action suspending
the authorization of the Prospectus or the consummation of the Conversion shall
have been issued or proceedings therefore initiated or, to the Company's or the
Bank's knowledge threatened by the Commission, the Division, the FRB, the FDIC
or any other federal or state authority.
19
(c) At the Closing Date, Xxxx shall have received:
(1) The favorable opinion, dated as of the Closing Date and addressed
to Xxxx and for its benefit, of Breyer & Aguggia, special counsel
for the Company and the Bank, in form and substance to the effect
that:
(i) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of
the State of Washington and 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 the Prospectus and to enter into and perform
its obligations under this Agreement. The Company is duly
qualified as a foreign corporation to transact business and
is in good standing in each other 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.
(ii) The Bank is organized and is validly existing as a state
chartered savings bank under the laws of the State of
Washington in mutual form of organization and upon the
Conversion will become a duly organized and validly existing
state chartered savings bank in capital stock form of
organization under the laws of the State of Washington, in
both instances duly authorized to conduct its business and
own its property as described in the Registration Statement
and Prospectus. 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 Bank. All of the outstanding capital stock of the Bank
will be duly authorized and, upon payment therefor, will be
validly issued, fully paid and non-assessable and, to the
best of such counsel's knowledge, will be owned by the
Company, free and clear of any liens, encumbrances, claims
or other restrictions.
(iii) The Bank is a member of the FHLB-Seattle. The Bank is an
insured depository institution under the provisions of
Section 4(a) of the FDI Act, as amended, and no proceedings
for the termination or revocation of such insurance are
pending or, to the best of such counsel's knowledge,
threatened; the description of the liquidation account as
set forth in the Prospectus under the caption "The
Conversion-Liquidation Account" to the extent that such
information constitutes matters of law and legal conclusions
has been reviewed by such counsel and is accurate in all
material respects.
20
(iv) Upon consummation of the Conversion, the authorized, issued
and outstanding capital stock of the Company will be within
the range set forth in the Prospectus under the caption
"Capitalization," and except for shares issued upon
incorporation of the Company, no shares of Common Stock have
been issued prior to the Closing Date; at the time of the
Conversion, the Shares subscribed for pursuant to the
Offering will have been duly and validly authorized for
issuance, and when issued and delivered by the Company
pursuant to the Plan against payment of the consideration
calculated as set forth in the Plan and the Prospectus, will
be duly and validly issued and fully paid and non-
assessable; the issuance of the Shares is not subject to
statutory preemptive rights and the terms and provisions of
the Shares conform in all material respects to the
description thereof contained in the Prospectus. To the best
of such counsel's knowledge, upon the issuance of the
Shares, good title to the Shares will be transferred from
the Company to the purchasers thereof against payment
therefor, subject to such claims as may be asserted against
the purchasers thereof by third-party claimants.
(v) The Subsidiary has been duly incorporated and is validly
existing as a corporation in good standing under the laws of
the State of Washington, 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 Company, the Bank
and the Subsidiary, taken as a whole; the activities of the
Subsidiary as described in the Prospectus are permitted to
subsidiaries of a bank holding company and of a Washington
state chartered savings bank by the rules, regulations,
resolutions and practices of the Division, the FRB and the
FDIC; all of the issued and outstanding capital stock of
such 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.
(vi) The FRB has duly approved the Holding Company Application
and, to the best of such counsel's knowledge, no action is
pending or threatened respecting the Holding Company
Application or the acquisition by the Company of all of the
Bank's issued and outstanding capital stock; the Holding
Company Application complies as to form in all material
respects with the BHCA and all
21
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.
(vii) The Division has duly approved the Conversion Application
and, to the best of such counsel's knowledge, no action is
pending or threatened respecting the Division's approval of
the Conversion Application; the Conversion Application
complies in all material respects with the RCW and all other
applicable requirements of the Division and, to the best of
such counsel's knowledge, includes all documents required to
be filed as exhibits thereto.
(viii) The FDIC has issued a Notice of Non-Objection to the
Conversion and, to the best of such counsel's knowledge, no
action is pending or threatened respecting the FDIC's Notice
of Non-Objection to the Conversion; the FDIC Notice complies
in all material respects with the rules and regulations and
all other applicable requirements of the FDIC, to the best
of such counsel's knowledge; and includes all documents
required to be filed as exhibits thereto.
(ix) The execution and delivery of the Agreement and the
consummation of the transactions contemplated hereby have
been duly and validly authorized by all necessary action on
the part of the Company and the Bank; and the Agreement is a
valid and binding obligation of the Company and the Bank,
enforceable in accordance with its terms, except as the
enforceability thereof may be limited by (i) bankruptcy,
insolvency, or other laws now or hereafter in effect
affecting the enforceability of the rights of creditors
generally or the rights of creditors of Washington state
chartered savings banks and their holding companies, (ii)
general principles of equity, (iii) applicable law with
respect to the indemnification and/or contribution
provisions contained herein, (regardless of whether such
enforceability is considered in a proceeding in equity or at
law); the execution and delivery of the Agreement, the
occurrence of the obligations therein set forth and the
consummation of the transactions contemplated therein will
not conflict with or constitute a breach of, or default
under, or result in the creation or imposition of any lien,
charge or encumbrance upon any property or assets of the
Company or the Bank pursuant to any contract, indenture,
mortgage, loan agreement, note, lease or other instrument
described in the Prospectus or filed as
22
an exhibit to the Registration Statement to which the
Company or the Bank is a party or by which any of them may
be bound, or to which any of the property or assets of the
Company or the Bank is subject (other than the establishment
of a liquidation account), and such action will not result
in any violation of the provisions of the articles of
incorporation, bylaws or charter, as applicable, of the
Company or the Bank or any applicable federal law, act,
regulation (except that no opinion need be rendered with
respect to the securities or blue sky laws of various
jurisdictions or the rules and regulations of the NASD
and/or the National Market System of the Nasdaq Stock
Market) or order or court order, writ, injunction or decree
naming the Company or the Bank.
(x) The Conversion Application has been approved by the Division
and the Prospectus has been authorized for use by the
Division. The FRB has approved the Holding Company
Application and issued its letter of approval under the
BHCA, and the purchase by the Company of all of the issued
and outstanding capital stock of the Bank has been
authorized by the FRB and the Division. The FDIC has issued
its Notice of Non-Objection and no action has been taken,
and to the best such counsel's knowledge none is pending or
threatened, to revoke any such authorization, approval or
non-objection.
(xi) The Plan has been duly adopted by the required vote of the
directors of the Company and the Trustees of the Bank and,
based upon the certificate of the inspector of election, by
the members of the Bank.
(xii) Subject to the satisfaction of the conditions to the
Division's, the FRB's and the FDIC's approval of the
Conversion, the Company and the Bank are not required to
receive any further approval, authorization, consent or
other order of, register with, or submit a notice to any
other federal or state agency in connection with the
execution and delivery of the Agreement, the issuance of the
Shares and the consummation of the Conversion, except as may
be required under the securities or blue sky laws of various
jurisdictions (as to which no opinion need be rendered),
except as may be required under the rules and regulations of
the NASD and/or the National Market System of the Nasdaq
Stock Market (as to which no opinion need be rendered) and
except for the registration of the Company as a savings bank
holding company.
23
(xiii) The Registration Statement is effective under the 1933 Act
and no stop order suspending the effectiveness has been
issued under the 1933 Act or proceedings therefor initiated
or, to the best of such counsel's knowledge, threatened by
the Commission.
(xiii) At the time that the Registration Statement became
effective, (i) the Registration Statement (as amended or
supplemented, if so amended or supplemented) (other than the
financial statements, the notes thereto and other tabular,
financial, statistical and appraisal data included therein
or omitted therefrom, as to which no opinion need be
rendered) complied as to form in all material respects with
the requirements of the 1933 Act and the 1933 Act
Regulations, and (ii) the Prospectus (other than the
financial statements, the notes thereto and other tabular,
financial, statistical and appraisal data included therein
or omitted therefrom, as to which no opinion need be
rendered) complied as to form in all material respects with
the requirements of the 1933 Act and the 1933 Act
Regulations.
(xiv) The terms and provisions of the Shares of the Company
conform, in all material respects, to the description
thereof contained in the Registration Statement and
Prospectus, and the form of certificate used to evidence the
Shares complies with applicable law.
(xv) There are no legal or governmental proceedings pending or to
the best of such counsel's knowledge, threatened which are
required to be disclosed in the Registration Statement and
Prospectus, other than those disclosed therein, and to the
best of such counsel's knowledge, all pending legal and
governmental proceedings to which the Company, the Bank or
the Subsidiary is a party or of which any of their property
is the subject, which are not described in the Registration
Statement and the Prospectus, including ordinary routine
litigation incidental to the Company's, the Bank's or the
Subsidiary's business, are, considered in the aggregate, not
material.
(xvi) The descriptions in the Conversion Application, the
Registration Statement and the Prospectus of the contracts,
indentures, mortgages, loan agreements, notes, leases or
other instruments filed as exhibits thereto are accurate in
all material respects and fairly present the information
required to be shown; and 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.
24
(xvii) The Plan has been duly authorized by the Board of Directors
of the Company and the Board of Trustees of the Bank and, to
the best of such counsel's knowledge and information, the
Division's and the FDIC's approval and non-objection,
respectively, of the Plan remains in full force and effect;
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, the RCW 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 the FRB, the Division or the FDIC
and, to the best of such counsel's knowledge, no order has
been issued by the FRB, the Division or the FDIC to suspend
the Offerings and no action for such purpose has been
instituted or threatened by the FRB, the Division or the
FDIC; and, to the best of such counsel's knowledge, no
person has sought to obtain review of the final action of
the Division or the FDIC in approving the Plan.
(xviii) To the best of such counsel's knowledge, the Company, the
Bank and the Subsidiary have obtained all material federal
licenses, permits and other governmental authorizations
currently required under the HOLA and the FDI Act and all
applicable rules and regulations promulgated thereunder for
the conduct of their businesses and to the best of such
counsel's knowledge 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 complying therewith, except whether the
failure to have such licenses, permits and other
governmental authorizations or the failure to be in
compliance therewith would not have a material adverse
affect on the business or operations of the Bank, the
Company and the Subsidiary, taken as a whole).
(xix) Neither the Company, the Bank nor the Subsidiary is in
violation of its articles of incorporation, bylaws or
charter 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 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 the Company, the Bank or the
Subsidiary or any of their property may be bound (in any
respect that would have a material adverse effect upon
25
the financial condition, results of operations or business
of the Company, the Bank or the Subsidiary, taken as a
whole).
(xx) The Company' certificate of incorporation and bylaws comply
in all material respects with the RCW. The Bank's charter
and bylaws in mutual form and, upon the completion of the
Conversion, in stock form, comply in all material respects
with the RCW.
(xxi) To the best of such counsel's knowledge, neither the Company
nor the Bank is in violation of any directive from the
Division, the FDIC or the FRB to make any material change in
the method of conducting its respective business.
(xxii) The information in the Prospectus under the captions
"Regulation," "The Conversion," "Restrictions on Acquisition
of the Holding Company" and "Description of Capital Stock of
the Holding Company," to the extent that such information
constitutes matters of law, summaries of legal matters,
documents or proceedings, or legal conclusions, has been
reviewed by such counsel and is correct in all material
respects. The description of the Conversion process under
the caption "The Conversion" in the Prospectus has been
reviewed by such counsel and is in all material respects
correct. The discussion of statutes or regulations described
or referred to in the Prospectus are accurate summaries. The
information regarding the federal tax opinion under the
caption "The Conversion-Tax Effects" has been reviewed by
such counsel and constitutes an accurate summary of the
opinion rendered by such counsel to the Company and the Bank
with respect to such matters subject to the qualifications
and limitations noted therein.
In rendering such opinion, such counsel may rely as to all matters of fact
on certificates of officers or directors of the Company and the Bank and
certificates of public officials.
In addition, such counsel shall provide a letter to Xxxx stating that
nothing has come to their attention that would lead them to believe that the
Conversion Application and the Registration Statement, or any amendment or
supplement thereto (other than the financial statements, the notes thereto, and
other tabular, financial, statistical and appraisal data included therein or
omitted therefrom as to which no statement need be made), as of the date of
approval or effectiveness, as the case may be, and the Prospectus, as of its
date and as of the Closing Date, contained an untrue statement of a material
fact or omitted to state a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading.
26
(2) The favorable opinion, dated as of the Closing Date and addressed
to Xxxx and for their benefit, of Xxxxxx, Xxxxxxx & Xxxxxx, X.X.,
the Bank's local counsel, in form and substance to the effect
that, to the best of such counsel's knowledge, (i) the Company
and the Bank have good and marketable title to all properties and
assets which are material to the business of the Company and the
Bank and to those properties and assets described in the
Registration Statement and Prospectus, as owned by them, free and
clear of all liens, charges, encumbrances or restrictions, except
such as are described in the Registration Statement and
Prospectus, or are not material in relation to the business of
the Company and the Bank considered as one enterprise; (ii) all
of the leases and subleases material to the business of the
Company and the Bank under which the Company and the Bank hold
properties, as described in the Registration Statement and
Prospectus, are in full force and effect; (iii) the Bank is duly
qualified to transact business in each jurisdiction in which its
ownership of property or leasing of property or the conduct of
its business requires such qualification, unless the failure to
be so qualified in one or more of such jurisdictions would not
have a material adverse effect on the financial condition, or the
business, operations or income of the Bank; (iv) the Subsidiary's
articles of incorporation and bylaws comply in all material
respects with laws of the State of Washington; (v) the Subsidiary
has been duly incorporated and is validly existing as a
corporation under the laws of the State of Washington and has
corporate power and authority to own, lease and operate its
properties and conduct its business as described in the
Registration Statement and the Prospectus; (vi) to the best of
such counsel's knowledge, the Company, the Bank and the
Subsidiary have obtained all material Washington licenses,
permits and other governmental authorizations currently required
for the conduct of their businesses and to the best of such
counsel's knowledge 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
complying therewith, except where the failure to have such
licenses, permits and other governmental authorizations or the
failure to be in compliance therewith would not have a material
adverse affect on the business or operations of the Bank, the
Company and the Subsidiary, taken as a whole; and (vii) to the
best of such counsel's knowledge, the Subsidiary is not in
violation of its articles of incorporation or bylaws, or, to the
best of such counsel's knowledge, in default or violation of any
obligation, agreement, covenant or condition contained in any
material contract, indenture, mortgage, loan agreement, note,
lease or other instrument to which it is a party or by which it
or its property may be bound except for such defaults or
violations which would not have a material adverse impact on the
financial condition or results of operations of the Company, the
Bank and the Subsidiary on a consolidated basis.
27
(3) The favorable opinion, dated as of the Closing Date, of Xxxxxxx,
Xxxxxx & Xxxxxxxx, Xxxx'x counsel, with respect to such matters
as Xxxx may reasonably require. Such opinion may rely upon the
opinions of counsel to the Company and the Bank, and as to
matters of fact, upon certificates of officers and directors of
the Company and the Bank delivered pursuant hereto or as such
counsel shall reasonably request.
(d) At the Closing Date, Xxxx shall receive a certificate of the Chief
Executive Officer and the Chief Financial Officer of the Company and a
certificate of the Chief Executive Officer and the Chief Financial Officer of
the Bank, both dated as of such Closing Date, to the effect that: (i) they have
reviewed the Prospectus and, in their opinion, at the time the Prospectus became
authorized for final use, the Prospectus did not contain any untrue statement of
a material fact or omit to state a material fact necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading; (ii) since the date the Prospectus became authorized for final
use, no material adverse change in the financial condition, or in the earnings,
capital, properties or business of the Company, the Bank and the Subsidiary has
occurred and, to their knowledge, no other event has occurred, which should have
been set forth in an amendment or supplement to the Prospectus which has not
been so set forth, and the conditions set forth in this Section 7 have been
satisfied; (iii) since the respective dates as of which information is given in
the Registration Statement and Prospectus, there has been no material adverse
change in the financial condition, results of operations or business prospects
of the Company, the Bank or the Subsidiary, independently, or of the Company,
the Bank and the Subsidiary considered as one enterprise, whether or not arising
in the ordinary course of business; (iv) the representations and warranties in
Section 4 are true and correct with the same force and effect a though expressly
made at and as of the Closing Date; (v) the Company and the Bank have complied
in all material respects with all agreements and satisfied all conditions on
their part to be performed or satisfied at or prior to the Closing Date and will
comply in all material respects with all obligations to be satisfied by them
after Conversion; (vi) no stop order suspending the effectiveness of the
Registration Statement has been initiated or, to the best knowledge of the
Company or the Bank, threatened by the Commission or any state authority; (vii)
no order suspending the Offering, the Conversion, the acquisition of all of the
shares of the Bank by the Company or the effectiveness of the Prospectus has
been issued and no proceedings for that purpose are pending or, to the best
knowledge of the Company or the Bank, threatened by the Division the FRB, the
FDIC, the Commission or any other federal or state authority; and (viii) to the
best knowledge of the Company or the Bank, no person has sought to obtain review
of the final action of the Division or the FDIC approving the Plan.
(e) Prior to and at the Closing Date: (i) in the reasonable opinion of
Xxxx, there shall have been no material adverse change in the financial
condition, or in the earnings or business of the Bank independently, or of the
Company, the Bank and the Subsidiary considered as one enterprise, from that as
of the latest dates as of which such condition is set forth in the Prospectus
other than transactions referred to or contemplated therein; (iii) the Company
or the Bank shall not have received from the Division, the FRB or the FDIC any
direction (oral or written) to make any material change in the method of
conducting their business with which it has not complied (which direction,
28
if any, shall have been disclosed to Xxxx) or which materially and adversely
would affect the business, operations or financial condition or income of the
Company and the Bank considered as one enterprise; (iv) the Company, the Bank
and the Subsidiary shall not have been in material default (nor shall an event
have occurred which, with notice or lapse of time or both, would constitute a
default) under any material provision of any agreement or instrument relating to
any outstanding indebtedness; (v) no action, suit or proceedings, at law or in
equity or before or by any federal or state commission, board or other
administrative agency, shall be pending or, to the knowledge of the Company, the
Bank or the Subsidiary, threatened against the Company, the Bank or the
Subsidiary or affecting any of their properties wherein an unfavorable decision,
ruling or finding would materially and adversely affect the business operations,
financially condition or income of the Company, the Bank and the Subsidiary
considered as one enterprise; and (vi) the Shares have been qualified or
registered for offering and sale or exempted therefore under the securities or
blue sky laws of the jurisdictions as Xxxx shall have requested and as agreed to
by the Company and the Bank.
(f) Concurrently with the execution of this Agreement, Xxxx shall receive a
letter from Xxxxx, Xxxxxxxxx and Xxxxxxx, P.C. dated as of the date of the
Prospectus and addressed to Xxxx: (i) confirming that Xxxxx, Xxxxxxxxx and
Xxxxxxx, P.C. is a firm of independent public accountants within the meaning of
Rule 101 of the Code of Professional Ethics of the American Institute of
Certified Public Accountants and stating in effect that in Xxxxx, Pemberton and
Xxxxxxx, P.C.'s opinion the consolidated financial statements of the Bank as of
September 30, 1995 and 1996 and for each of the two years in the period ended
September 30, 1996, as are included in the Prospectus and covered by its opinion
included therein, comply as to form in all material respects with the applicable
accounting requirements and related published rules and regulations of the 1933
Act; (ii) a statement from Xxxxx, Pemberton and Xxxxxxx, P.C. in effect that, on
the basis of certain agreed upon procedures (but not an audit in accordance with
generally accepted auditing standards) consisting of a reading of the latest
available unaudited interim consolidated financial statements of the Bank
prepared by the Bank, a reading of the minutes of the meetings of the Board of
Directors and members of the Bank and consultations with officers of the Bank
responsible for financial and accounting matters, nothing came to their
attention which caused them to believe that: (A) the unaudited consolidated
financial statements included in the Prospectus, are not in conformity with the
1933 Act and generally accepted accounting principles applied on a basis
substantially consistent with that of the audited consolidated financial
statements included in the Prospectus; or (B) during the period from the date of
the latest unaudited consolidated financial statements included in the
Prospectus to a specified date not more than three business days prior to the
date of the Prospectus, except as has been described in the Prospectus, there
was any material increase in borrowings, other than normal deposit fluctuations,
by the Bank; or (C) there was any decrease in consolidated net assets of the
Bank at the date of such letter as compared with amounts shown in the latest
unaudited consolidated statement of condition included in the Prospectus; and
(iii) a statement from Xxxxx, Pemberton and Xxxxxxx, P.C. that, in addition to
the audit referred to in their opinion included in the Prospectus and the
performance of the procedures referred to in clause (ii) of this subsection (f),
they have compared with the general accounting records of the Bank, which are
subject to the internal controls of the Bank, the accounting system and other
data prepared by the Bank, directly from such
29
accounting records, to the extent specified in such letter, such amounts and/or
percentages set forth in the Prospectus as Xxxx may reasonably request; and they
have reported on the results of such comparisons.
(g) At the Closing Date, Xxxx shall receive a letter from Xxxxx, Pemberton
and Xxxxxxx, P.C. dated the Closing Date, addressed to Xxxx, confirming the
statements made by them in the letter delivered by it pursuant to subsection (f)
of this Section 7, the "specified date" referred to in clause (ii) of subsection
(f) thereof to be a date specified in such letter, which shall not be more than
three business days prior to the Closing Date.
(h) At the Closing Date, Xxxx shall receive a letter from R.P. Financial,
LC, dated the date thereof and addressed to counsel for Xxxx, (i) confirming
that said firm is independent of the Company and the Bank and is experienced and
expert in the area of corporate appraisals and (ii) stating that its opinion of
the aggregate pro forma market value of the Company and the Bank expressed in
its Appraisal dated as of _________, 1997, and most recently updated, remains in
effect.
(i) The Company and the Bank shall not have sustained since the date of the
latest audited financial statements included in the Prospectus any material loss
or interference with their businesses from fire, explosion, flood or other
calamity, whether or not covered by insurance, or from any labor dispute or
court or governmental action, order or decree, otherwise than as set forth or
contemplated in the Registration Statement and Prospectus.
(j) At or prior to the Closing Date, Xxxx shall receive: (i) a copy of the
letter from the Division approving the Conversion Application and authorizing
the use of the Prospectus; (ii) a copy of the order from the Commission
declaring the Registration Statement effective; (iii) a certificate from the
Division evidencing the existence of the Bank; (iv) certificates of good
standing from the State of Washington evidencing the good standing of the
Company; (v) a certificate of good standing from the State of Washington
evidencing the good standing of the Subsidiary; (vi) a certificate from the FDIC
evidencing the Bank's insurance of accounts; (vii) a certificate of the FHLB-
Seattle evidencing the Bank's membership thereof; (viii) a copy of the letter
from the FRB approving the Company's Holding Company Application; and (ix) a
copy of the Notice of Non-Objection to the Conversion Application from the FDIC.
(k) As soon as available after the Closing Date, Xxxx shall receive, upon
request, a copy of the Bank's Washington state stock charter.
(l) Subsequent to the date hereof, there shall not have occurred any of the
following: (i) a suspension or limitation in trading in securities generally on
the New York Stock; Exchange or in the over-the-counter market, or quotations
halted generally on the Nasdaq National Market, or minimum or maximum prices for
trading have been fixed, or maximum ranges for prices for securities have been
required by either of such exchanges or the NASD or by order of the Commission
or any other governmental authority; (ii) a general moratorium on the operations
of
30
commercial banks or federal savings associations or a general moratorium on the
withdrawal of deposits from commercial banks or federal savings associations
declared by federal or Washington authorities; (iii) the engagement by the
United States in hostilities which have resulted in the declaration, on or after
the date hereof, of a national emergency or war; or (iv) a material decline in
the price of equity or debt securities if the effect of such a decline, in
Xxxx'x reasonable judgment, makes it impracticable or inadvisable to proceed
with the Offering or the delivery of the shares on the terms and in the manner
contemplated in the Registration Statement and Prospectus.
SECTION 8. INDEMNIFICATION.
----------------
(a) The Company and the Bank jointly and severally agree to indemnify and
hold harmless Xxxx, its officers, directors, agents, servants and employees and
each person, if any, who controls Xxxx within the meaning of Section 15 of the
1933 Act or Section 20(a) of the 1934 Act, against any and all loss, liability,
claim, damage or expense whatsoever (including but not limited to reasonable and
documented settlement expenses), joint or several, that Xxxx or any of them may
suffer or to which Xxxx and any such persons may become subject under all
applicable federal or state laws or otherwise, and to promptly reimburse Xxxx
and any such persons upon written demand for any expense (including reasonable
and documented fees and disbursements of counsel) incurred by Xxxx or any of
them in connection with investigating, preparing or defending any actions,
proceedings or claims (whether commenced or threatened) to the extent such
losses, claims, damages, liabilities or actions: (i) arise out of or are based
upon any untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement (or any amendment or supplement
thereto), preliminary or final Prospectus (or any amendment or supplement
thereto), the Conversion Application (or any amendment or supplement thereto),
the Holding Company Application or any blue sky application or other instrument
or document executed by the Company or the Bank or based upon written
information supplied by the Company or the Bank filed in any state or
jurisdiction to register or qualify any or all of the Shares or to claim an
exemption therefrom, or provided to any state or jurisdiction to exempt the
Company as a broker-dealer or its officers, directors and employees as broker-
dealers or agents, under the securities laws thereof (collectively, the "Blue
Sky Application"), or any application or other document, advertisement, oral
statement or communication ("Sales Information") prepared, made or executed by
or on behalf of the Company or the Bank with their consent or based upon written
or oral information furnished by or on behalf of the Company or the Bank,
whether or not filed in any jurisdiction, in order to qualify or register the
Shares or to claim an exemption therefrom under the securities laws thereof;
(ii) arise out of or based upon the omission or alleged omission to state in any
of the foregoing documents or information, a material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading; or (iii) arise from
any theory of liability whatsoever relating to or arising from or based upon the
Registration Statement (or any amendment or supplement thereto), preliminary or
final Prospectus (or any amendment or supplement thereto), the Conversion
Application (or any amendment or supplement thereto), any Blue Sky Application
or Sales Information or other documentation distributed in connection with the
Conversion; provided, however, that no indemnification is required under this
------------------
paragraph (a) to the extent such losses, claims, damages, liabilities or actions
arise out of or are based upon Xxxx'x
31
gross negligence, bad faith or willful misconduct (as determined in a final
judgment by a court of competent jurisdiction) or upon any untrue material
statement or alleged untrue material statements in, or material omission or
alleged material omission from, the Registration Statement (or any amendment or
supplement thereto), preliminary or final Prospectus (or any amendment or
supplement thereto), the Conversion Application, any Blue Sky Application or
Sales Information made in reliance upon and in conformity with information
furnished in writing to the Company or the Bank by Xxxx regarding Xxxx or
statistical information regarding national averages provided by Xxxx for the
Sales Information and provided further that such indemnification shall be to the
----------------
extent permitted by the Division.
(b) Xxxx agrees to indemnify and hold harmless the Company and the Bank,
their directors and officers and each person, if any, who controls the Company
or the Bank within the meaning of Section 15 of the 1933 Act or Section 20(a) of
the 1934 Act against any and all loss, liability, claim, damage or expense
whatsoever (including but not limited to reasonable and documented settlement
expenses), joint or several, which it, or any of them, may suffer or to which
it, or any of them may become subject under all applicable federal and state
laws or otherwise, and to promptly reimburse the Company, the Bank, and any such
persons upon written demand for any expenses (including reasonable and
documented fees and disbursements of counsel) incurred by it, or any of them, in
connection with investigating, preparing or defending any actions, proceedings
or claims (whether commenced or threatened) to the extent such losses, claims,
damages, liabilities or actions arise out of or are based upon any untrue
statement or alleged untrue statement of a material fact contained in the
Registration Statement (or any amendment or supplement thereto), the Conversion
Application (or any amendment or supplement thereto) or the preliminary or final
Prospectus (or any amendment or supplement thereto), or are based upon the
omission or alleged omission to state in any of the foregoing documents a
material fact required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading; provided, however, that Xxxx'x obligations under this Section 8(b)
--------- --------
shall exist only if and only to the extent that such untrue statement or alleged
untrue statement was made in, or such material fact or alleged material fact was
omitted from, the Registration Statement (or any amendment or supplement
thereto), the preliminary or final Prospectus (or any amendment or supplement
thereto) or the Conversion Application (or any amendment or supplement thereto),
any Blue Sky Application or Sales Information in reliance upon and in conformity
with information furnished in writing to the Company or the Bank by Xxxx
regarding Xxxx or statistical information regarding national averages provided
by Xxxx for the Sales Information.
(c) Each indemnified party shall give prompt written notice to each
indemnifying party of any action, proceeding, claim (whether commenced or
threatened), or suit instituted against it in respect of which indemnity may be
sought hereunder, but failure to so notify an indemnifying party shall not
relieve it from any liability which it may have on account of this Section 8 or
otherwise. An indemnifying party may participate at its own expense in the
defense of such action. In addition, if it so elects within a reasonable time
after receipt of such notice, an indemnifying party, jointly with any other
indemnifying parties receiving such notice, may assumed defense of such action
with counsel chosen by it and approved by the indemnified parties that are
defendants in such action,
32
unless such indemnified parties reasonably object to such assumption on the
ground that there may be legal defenses available to them that are different
from or in addition to those available to such indemnifying party. If an
indemnifying party assumes the defense of such action, the indemnifying parties
shall not be liable for any fees and expenses of counsel for the indemnified
parties incurred thereafter in connection with such action, proceeding or claim,
other than reasonable costs of investigation. In no event shall the indemnifying
parties be liable for the fees and expenses of more than one separate firm of
attorneys (and any special counsel that said firm may retain) for each
indemnified party in connection with any one action, proceeding or claim or
separate but similar or related actions, proceeding or claim or separate but
similar or related actions, proceedings or claims in the same jurisdiction
arising out of the same general allegations or circumstances.
(d) The agreements contained in this Section 8 and in Section 9 hereof and
the representations and warranties of the Company and the Bank set forth in this
Agreement shall remain operative and in full force and effect regardless of: (i)
any investigation made by or on behalf of Xxxx or its officers, directors or
controlling persons, agents or employees or by or on behalf of the Company or
the Bank or any officers, directors or controlling persons, agents or employees
of the Company or the Bank; (ii) delivery of and payment hereunder for the
Shares; or (iii) any termination of this Agreement.
SECTION 9. CONTRIBUTION. In order to provide for just and equitable
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contribution in circumstances in which the indemnification provided for in
Section 8 is due in accordance with its terms but is for any reason held by a
court to be unavailable from the Company, the Bank or Xxxx, the Company, the
Bank and Xxxx shall contribute to the aggregate losses, claims, damages and
liabilities (including any investigation, legal and other expenses incurred in
connection with, and any amount paid in settlement of, any action, suit or
proceeding of any claims asserted, but after deducting any contribution received
by the Company, the Bank or Xxxx from persons other than the other party
thereto, who may also be liable for contribution) in such proportion so that
Xxxx are responsible for that portion represented by the percentage that the
fees paid to Xxxx pursuant to Section 2 of this Agreement (not including
expenses) bears to the gross proceeds received by the Company from the sale of
the Shares in the Offering and the Company and the Bank shall be responsible for
the balance. If, however, the allocation provided above is not permitted by
applicable law or if the indemnified party failed to give the notice required
under Section 8 above, then each indemnifying party shall contribute to such
amount paid or payable by such indemnified party in such proportion as is
appropriate to reflect not only such relative fault of the Company and the Bank
on the one hand and Xxxx on the other in connection with the statements or
omissions which resulted in such losses, claims, damages or liabilities (or
actions, proceedings or claims in respect thereto), but also the relative
benefits received by the Company and the Bank on the one hand and Xxxx on the
other from the Offering (before deducting expenses). The relative fault shall
be determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by the Company and/or the Bank
on the one hand or Xxxx on the other and the parties' relative intent, good
faith, knowledge, access to information and opportunity to correct or prevent
such statement or omission. The Company, the Bank and Xxxx agree that it would
not be just and
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equitable if contribution pursuant to this Section 9 were determined by pro-rata
allocation or by any other method of allocation which does not take into account
the equitable considerations referred to above in this Section 9. The amount
paid or payable by an indemnified party as a result of the losses, claims,
damages or liabilities (or actions, proceedings or claims in respect thereof)
referred to above in this Section 9 shall be deemed to include any legal or
other expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action, proceeding or claim. It is expressly
agreed that Xxxx shall not be required to contribute any amount which in the
aggregate exceeds the amount paid (excluding reimbursable expenses) to Xxxx
under this Agreement. It is understood that the above stated limitation on
Xxxx'x liability for contribution is essential to Xxxx and that Xxxx would not
have entered into this Agreement if such limitation had not been agreed to by
the parties to this Agreement. No person found guilty of any fraudulent
misrepresentation (within the meaning of Section ll(f) of the 0000 Xxx) shall be
entitled to contribution from any person who was not found guilty of such
fraudulent misrepresentation. The obligations of the Company and the Bank under
this Section 9 and under Section 8 shall be in addition to any liability which
the Company and the Bank may otherwise have. For purposes of this Section 9,
each of Xxxx'x, the Company's or the Bank's officers and directors and each
person, if any, who controls Xxxx or the Company or the Bank within the meaning
of the 1933 Act and the 1934 Act shall have the same rights to contribution as
Xxxx, the Company or the Bank. Any party entitled to contribution, promptly
after receipt of notice of commencement of any action, suit, claim or proceeding
against such party in respect of which a claim for contribution may be made
against another party under this Section 9, will notify such party from whom
contribution may be sought, but the omission to so notify such party shall not
relieve the party from whom contribution may be sought from any other obligation
it may have hereunder or otherwise than under this Section 9.
SECTION 10. SURVIVAL OF AGREEMENTS REPRESENTATIONS AND INDEMNITIES. The
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respective indemnities of the Company, the Bank and Xxxx and the representations
and warranties and other statements of the Company, the Bank and Xxxx set forth
in or made pursuant to this Agreement shall remain in full force and effect,
regardless of any termination or cancellation of this Agreement or any
investigation made by or on behalf of Xxxx, the Company, the Bank or any
controlling person referred to in Section 8 hereof, and shall survive the
issuance of the Shares, and any legal representative, successor or assign of
Xxxx, the Company, the Bank, and any such controlling person shall be entitled
to the benefit of the respective agreements, indemnities, warranties and
representations.
SECTION 11. TERMINATION. Xxxx may terminate its obligations under this
-----------
Agreement by giving the notice indicated below in this Section 11 at any time
after this Agreement becomes effective as follows:
(a) In the event the Company fails to sell all of the Shares by __________,
1998, and in accordance with the provisions of the Plan or as required by the
Conversion Regulations, and applicable law, this Agreement shall terminate upon
refund by the Bank to each person who has subscribed for or ordered any of the
Shares the full amount which it may have received from such person, together
with interest as provided in the Prospectus, and no party to this Agreement
shall
34
have any obligation to the other hereunder, except for payment by the Company
and/or the Bank as set forth in Sections 2(a) and (d), 6, 8 and 9 hereof.
(b) If any of the conditions specified in Section 7 shall not have been
fulfilled when and as required by this Agreement unless waived in writing, or by
the Closing Date, this Agreement and all of Xxxx'x obligations hereunder may be
cancelled by Xxxx by notifying the Company and the Bank of such cancellation in
writing at any time at or prior to the Closing Date, and any such cancellation
shall be without liability of any party to any other party except as otherwise
provided in Sections 2, 6, 8 and 9 hereof.
(c) If Xxxx elects to terminate this Agreement with respect to it as
provided in this Section, the Company and the Bank shall be notified promptly by
such Agent by telephone or telegram, confirmed by letter.
The Company and the Bank may terminate this Agreement with respect to Xxxx
in the event Xxxx is in material breach of the representations and warranties or
covenants contained in Section 5 and such breach has not been cured after the
Company and the Bank have provided Xxxx with notice of such breach.
This Agreement may also be terminated by mutual written consent of the
parties hereto.
SECTION 12. NOTICES. All communications hereunder, except as herein
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otherwise specifically provided, shall be mailed in writing and if sent to Xxxx
shall be mailed, delivered or telegraphed and confirmed to Xxxxxxx Xxxx &
Company, 000 Xxxxxxxxx, Xxxxxx, Xxxx 00000-0000, Attention: Xxxxxxxx X. XxXxxxx
(with a copy to Xxxxxxx, Xxxxxx & Xxxxxxxx, 0000 Xxxxxxxxx Xxxxxx, X.X.,
Xxxxxxxxxx, X.X. 00000, Attention: Xxxx X. Xxxxxxxx, Esq.) and, if sent to the
Company and the Bank, shall be mailed, delivered or telegraphed and confirmed to
the Company and the Bank at Timberland Bancorp, Inc., 000 Xxxxxxx Xxxxxx,
Xxxxxxx, Xxxxxxxxxx 00000, Attention: Xxxxxxxx X. Xxxxx, President and Chief
Executive Officer (with a copy to Breyer & Aguggia, 0000 X Xxxxxx, X.X., Xxxxx
000 Xxxx, Xxxxxxxxxx, X.X. 00000, Attention: Xxxx X. Xxxxxx, Xx., Esq.).
SECTION 13. PARTIES. The Company and the Bank shall be entitled to act
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and rely on any request, notice, consent, waiver or agreement purportedly given
on behalf of Xxxx when the same shall have been given by the undersigned. Xxxx
shall be entitled to act and rely on any request, notice, consent, waiver or
agreement purportedly given on behalf of the Company or the Bank, when the same
shall have been given by the undersigned or any other officer of the Company or
the Bank. This Agreement shall inure solely to the benefit of, and shall be
binding upon, Xxxx, the Company, the Bank, and their respective successors,
legal representatives and assigns, and no other person shall have or be
construed to have any legal or equitable right, remedy or claim under or in
respect of or by virtue of this Agreement or any provision herein contained. It
is understood and agreed that this Agreement, including Exhibit A thereto, is
the exclusive agreement among the parties hereto, and supersedes any prior
agreement among the parties and may not be varied except in writing signed by
all the parties.
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SECTION 14. CLOSING. The closing for the sale of the Shares shall take
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place on the Closing Date at such location as mutually agreed upon by Xxxx and
the Company and the Bank. At the closing, the Company and the Bank shall
deliver to Xxxx in next day funds the commissions, fees and expenses due and
owing to Xxxx as set forth in Sections 2 and 6 hereof and the opinions and
certificates required hereby and other documents deemed reasonably necessary by
Xxxx shall be executed and delivered to effect the sale of the Shares as
contemplated hereby and pursuant to the terms of the Prospectus.
SECTION 15. PARTIAL INVALIDITY. In the event that any term, provision or
------------------
covenant herein or the application thereof to any circumstance or situation
shall be invalid or unenforceable, in whole or in part, the remainder hereof and
the application of said term, provision or covenant to any other circumstances
or situation shall not be affected thereby, and each term, provision or covenant
herein shall be valid and enforceable to the full extent permitted by law.
SECTION 16. CONSTRUCTION. This Agreement shall be construed in accordance
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with the laws of the State of Ohio.
SECTION 17. COUNTERPARTS. This Agreement may be executed in separate
------------
counterparts, each of which so executed and delivered shall be an original, but
all of which together shall constitute a binding agreement.
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If the foregoing correctly sets forth the arrangement among the Company,
the Bank and Xxxx, please indicate acceptance thereof in the space provided
below for that purpose, whereupon this letter and Xxxx'x acceptance shall
constitute a binding agreement.
Very truly yours,
TIMBERLAND BANCORP, INC. TIMBERLAND SAVINGS BANK, S.S.B.
By: _________________________ By: ____________________________________
President and Chief President and Chief
Executive officer Executive officer
Accepted as of the date first above written
XXXXXXX XXXX & COMPANY A DIVISION OF XXXXX,
XXXXXXXX & XXXXX, INC.
By: ____________________________
Xxxxxxxx X. XxXxxxx
Executive Vice President
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