Exhibit 1.1
RAINIER PACIFIC FINANCIAL GROUP, INC.
(a Washington corporation)
Up to 6,900,000 Shares
(Subject to Increase Up to 7,935,000 Shares)
COMMON STOCK (no Par Value)
Subscription Price $10.00 Per Share
AGENCY AGREEMENT
______ __, 2003
Xxxxx, Xxxxxxxx & Xxxxx, Inc.
000 Xxxxxxxxx Xxxxx
Xxxxxx, Xxxx 00000-0000
Ladies and Gentlemen:
Rainier Pacific Financial Group, Inc., a newly formed
Washington-chartered stock corporation (the "Holding Company"), and Rainier
Pacific Savings Bank, a Washington-chartered mutual savings bank (the "Bank")
(collectively, the "Rainier Pacific Parties") hereby confirm, jointly and
severally, their agreement with Xxxxx, Xxxxxxxx & Xxxxx, Inc. ("KBW" or the
"Agent"), as follows:
Section 1. The Offering. The Bank, in accordance with the Plan of
Conversion adopted March 22, 2003 (the "Plan"), intends to convert from mutual
to stock form (the "Conversion"). The Conversion is being conducted in
accordance with the laws of the State of Washington and the United States and
the applicable regulations of the Washington Department of Financial
Institutions (the "Department") and the Federal Deposit Insurance Corporation
("FDIC") (such laws and the regulations are referred to herein as the
"Conversion Regulations"). In connection with the Conversion, the Holding
Company will offer stock on a priority basis to (i) Eligible Account Holders;
(ii) Tax Qualified Employee Stock Benefit Plan of the Bank ("Employee Plan");
(iii) Supplemental Eligible Account Holders; and (iv) Other Members (all
capitalized terms used in this Agreement and not defined in this Agreement shall
have the meanings set forth in the Plan). Pursuant to the Plan, the Holding
Company is offering a minimum of 5,100,000 and a maximum of 6,900,000 shares
(subject to an increase up to 7,935,000 shares) of common stock, no par value
per share (the "Common Stock"), in the Subscription Offering, and, if necessary,
(i) the Direct Community Offering and/or (ii) a Syndicated Community Offering.
Pursuant to the Plan, the Holding Company will offer and sell shares of
its Common Stock (the "Shares") in the Subscription Offering, Direct Community
Offering, and/or Syndicated Community Offering (the "Offerings"). The Holding
Company may offer Shares, if any, remaining after the Subscription Offering, in
the Direct Community Offering with a preference to natural persons residing in
Xxxxxx County and the City of Federal Way, and then to the general public. In
the event a Direct Community Offering is held, it may be held at any time during
or immediately after the Subscription Offering. Depending on market conditions,
Shares
available for sale but not subscribed for in the Subscription Offering or
purchased in the Direct Community Offering may be offered in the Syndicated
Community Offering to the general public on a best efforts basis, as described
in subsection 4(c) below. Upon completion of the Offerings, pursuant to the
Plan, and 100% of the outstanding Common Stock of the Holding Company will be
publicly held, 100% of the outstanding common stock of the Bank will be held by
the Holding Company. The Holding Company will sell the Shares in the Offerings
at $10.00 per share (the "Purchase Price"). If the number of Shares is increased
or decreased in accordance with the Plan, the term "Shares" shall mean such
greater or lesser number, where applicable.
In connection with the Conversion and pursuant to the terms of the Plan
as described in the Prospectus (as hereinafter defined), immediately following
the consummation of the Conversion, subject to the approval of the Bank's
depositors and compliance with certain conditions as may be imposed by
regulatory authorities, the Company will contribute 6.4% of the aggregate number
of Shares in the offerings shares of newly issued Common Stock to the Rainier
Pacific Foundation (the "Foundation") such shares hereinafter being referred to
as the ("Foundation Shares"). In addition, the Company will make a cash
contribution to the Foundation in an amount equivalent to the value of 1.6% of
the aggregate number of Shares sold in the Offerings
The Holding Company has filed with the U.S. Securities and Exchange
Commission (the "Commission" or the "SEC") Registration Statement on Form S-1
(File No. 333-106349) in order to register the Shares and the Foundation Shares
under the Securities Act of 1933, as amended (the "1933 Act"), and has filed
such amendments thereto as have been required to the date hereof (the
"Registration Statement"). The prospectus, as amended, included in the
Registration Statement at the time it initially became effective is hereinafter
called the "Prospectus," except that if any prospectus is filed by the Holding
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 included in the Registration Statement at the time it 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 and shall include any supplements and amendments thereto
from and after their dates of effectiveness or use, respectively.
In connection with the Conversion, the Bank filed with the Department
and the FDIC an application or notice, as appropriate, for conversion to a stock
savings bank (the "Conversion Application") and amendments thereto as required
by the Department and the FDIC. The Holding Company has filed with the Board of
Governors of the Federal Reserve System (the "Board") its application on Form
Y-3 (the "Holding Company Application") to become a bank holding company under
the Bank Holding Company Act, as amended (the "BHCA"), and the regulations
promulgated thereunder. Collectively, the Conversion Application and the Holding
Company Application may also be termed the "Applications."
Section 2. Retention of Agent. Subject to the terms and conditions
herein set forth, the Rainier Pacific Parties hereby appoint the Agent as their
financial advisor and marketing agent to utilize its best efforts to solicit
subscriptions for Shares and to advise and assist the Rainier Pacific Parties
with respect to the Holding Company's sale of the Shares in the Offering.
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On the basis of the representations, warranties, and agreements herein
contained, but subject to the terms and conditions herein set forth, the Agent
accepts such appointment and agrees to consult with and advise the Rainer
Pacific Parties as to the matters set forth in the letter agreement, dated April
7, 2003, between the Bank and KBW (the "Letter Agreement"). It is acknowledged
by the Rainier Pacific Parties that the Agent shall not be required to purchase
any Shares or be obligated to take any action that is inconsistent with all
applicable laws, regulations, decisions or orders.
Except as described in Section 13(b) of this Agreement, the obligations
of the Agent pursuant to this Agreement shall terminate upon the completion or
termination or abandonment of the Plan by the Holding Company or upon
termination of the Offering, but in no event later than 90 days after the
completion of the Subscription Offering (the "End Date"). All fees or expenses
due to the Agent but unpaid will be payable to the Agent 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 Rainier Pacific Parties
and the Agent may agree to renew this Agreement under mutually acceptable terms
and subject to the approval of any governmental agency or regulatory authority
having jurisdiction over such matters.
In the event the Holding Company is unable to sell a minimum of
5,100,000 Shares by the End Date, this Agreement shall terminate and the Holding
Company shall refund to any persons who have subscribed for any of the Shares
the full amount that it may have received from them plus accrued interest, as
set forth in the Prospectus, and none of the parties to this Agreement shall
have any obligation to the other parties hereunder, except as set forth in this
Section 2 and in Sections 9, 11 and 12 hereof.
In the event the Offering is terminated for any reason not attributable
to the action or inaction of the Agent, the Agent shall be paid the fees due to
the date of such termination pursuant to Section 4, subparagraph (a) below, and
to the reimbursement of expenses pursuant to Section 9 below.
Section 3. Sale and Delivery of Shares. 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 Holding Company
agrees to issue, or have issued, the Shares sold in the Offering and to release
for delivery certificates for such Shares, or the equivalent book entry proof of
shares on the Closing Date (as hereinafter defined) against payment to the
Holding Company by any means authorized by the Plan; provided, however, that no
funds shall be released to the Holding Company until the conditions specified in
Section 10 hereof shall have been complied with to the reasonable satisfaction
of the Agent and its counsel. The release of Shares against payment therefor
shall be made on a date and at a place acceptable to the Rainier Pacific Parties
and the Agent. Certificates for Shares, or the equivalent book entry proof of
shares shall be delivered directly to the purchasers in accordance with their
directions. The date upon which the Holding Company shall release or deliver the
Shares sold in the Offering, in accordance with the terms herein, is called the
"Closing Date."
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Section 4. Compensation. The Agent shall receive the following
compensation for its services hereunder:
(a) A management fee of $50,000 has been paid in full. Such fees shall
be deemed to have been earned when due. Should the Conversion be terminated for
any reason not attributable to the action or inaction of the Agent, the Agent
shall have earned and be entitled to be paid fees accruing through the stage at
which the termination occurred.
(b) A Success Fee equal to 1.25% of the aggregate purchase price of
the common stock sold in the Subscription Offering and Direct Community Offering
(excluding shares purchased by the Bank's officers, directors or employees (or
their immediate family) plus any ESOP, charitable foundations, tax-qualified or
stock-based compensation plans (except IRAs) or similar plans created by the
Bank or the Holding Company for some or all of their directors or employees
shall be charged upon consummation of the conversion. In no event shall the
Success Fee exceed $875,000. The management fee described in subparagraph 4(a)
shall be applied against the Success Fee described in this subparagraph 4(b).
(c) If any of the Shares remain available after the Subscription
Offering and the Direct Community Offering, at the request of the Bank, KBW will
seek to form a syndicate of registered broker-dealers ("Selected Dealers") to
assist in the sale of such Shares on a best efforts basis, subject to the terms
and conditions set forth in the selected dealers agreement. KBW will endeavor to
distribute the Shares among the Selected Dealers in a fashion which best meets
the distribution objectives of the Bank and the Plan. KBW will be paid a fee not
to exceed 5.5% of the aggregate purchase price of the shares sold by the
Selected Dealers. From this fee, KBW will pass on to the Selected Dealers who
assist in such offering 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
effected with the assistance of Selected Dealers other than KBW shall be
transmitted by KBW to such Selected Dealers. The decision to utilize Selected
Dealers will be made by the Bank upon consultation with KBW. In the event, with
respect to any stock purchases, fees are paid pursuant to this subparagraph
4(c), such fees shall be in lieu of and not in addition to payment pursuant to
subparagraph 4(b).
Full payment of KBW's fees, as described above, 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.
Section 5. Closing. The closing for the sale of the Shares shall take
place on the Closing Date at such location as mutually agreed upon by the Agent
and the Rainier Pacific Parties. At the closing, the Rainier Pacific Parties
shall deliver to the Agent in next day funds the commissions, fees and expenses
due and owing to the Agent as set forth in Sections 4 and 9 hereof and the
opinions and certificates required hereby and other documents deemed reasonably
necessary by the Agent shall be executed and delivered to effect the sale of the
Shares as contemplated hereby and pursuant to the terms of the Prospectus.
Section 6. Representations and Warranties of the Rainier Pacific
Parties. The Rainier Pacific Parties jointly and severally represent and warrant
to the Agent that:
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(a) Each of the Rainier Pacific Parties has all such power, authority,
authorizations, approvals and orders as may be required to enter into this
Agreement, and, as of the Closing Date, each of the Rainier Pacific Parties will
have all such power, authority, authorizations, approvals and orders as may be
required to carry out the provisions and conditions hereof and to issue and sell
the Shares to be sold by the Company, and to issue and contribute the Foundation
Shares and related cash contribution, as provided herein and as described in the
Prospectus. The consummation of the Conversion, the execution, delivery and
performance of this Agreement and the Letter Agreement and the consummation of
the transactions contemplated herein have been duly and validly authorized by
all necessary corporate action on the part of each of the Rainier Pacific
Parties. This Agreement has been validly executed and delivered by each of the
Rainier Pacific Parties, and is a valid, legal and binding obligation of each of
the Rainier Pacific Parties, in each case enforceable in accordance with its
terms, except as the legality, validity, binding nature and enforceability
thereof may be limited by (i) bankruptcy, insolvency, moratorium,
reorganization, conservatorship, receivership or other similar laws relating to
or affecting the enforcement of creditors' rights generally, (ii) general equity
principles regardless of whether such enforceability is considered in a
proceeding in equity or at law, and (iii) the extent, if any, that the
provisions of Sections 11 or 12 hereof may be unenforceable as against public
policy.
(b) The Registration Statement was declared effective by the
Commission on _______ __, 2003. No stop order has been issued with respect to
the Prospectus. No proceedings related to the Prospectus have been initiated or,
to the knowledge of the Rainier Pacific Parties, threatened by the Commission.
At the time the Registration Statement, including the Prospectus contained
therein (including any amendment or supplement thereto), became effective, the
Registration Statement complied as to form in all material respects with the
1933 Act and the 1933 Act Regulations. The Registration Statement and the
Prospectus 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. At the time any Rule 424(b) or (c) Prospectus was filed with the
Commission and at the Closing Date referred to in Section 5, the Registration
Statement, including the Prospectus (including any amendment or supplement
thereto) and, when taken together with the Prospectus, any Blue Sky Application
or Sales Information (as such terms are defined in Section 11 hereof) authorized
for use by any of the Rainier Pacific Parties in connection with the Offerings,
will not contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading; provided, however, that the representations and warranties in this
Section 6(b) shall not apply to statements or omissions made in reliance upon
and in conformity with written information furnished to the Rainier Pacific
Parties by the Agent expressly regarding the Agent for use under the caption
"Rainier Pacific Bank's Conversion - Marketing Arrangements."
(c) The Conversion Application, including the Prospectus, the proxy
statement for the solicitation of proxies from depositors of the Bank for the
special meeting to approve the Plan (the "Depositors' Proxy Statement") which
was prepared by the Company and the Bank and filed with the Department and the
FDIC, was approved by or received a nonobjection from the Department and the
FDIC on ______ __, 2003 and the Prospectus and Depositors' Proxy
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Statement have each been authorized for use by the Department and the FDIC. The
establishment and contribution to the Foundation was approved by the Department
and the FDIC on ______ __, 2003. At the time of the approval of the Conversion
Application, including the Prospectus and the Depositors' Proxy Statement
(including any amendment or supplement thereto), by the Department and the FDIC
and at all times subsequent thereto until the Closing Date, the Conversion
Application, including the Prospectus and the Depositors' Proxy Statement
(including any amendment or supplement thereto), will comply in all material
respects with the Conversion Regulations, except to the extent waived in writing
by the Department and the FDIC and with all applicable provisions of the
Securities Exchange Act of 1934, as amended (the "1934 Act") and the regulations
of the SEC under the 1934 Act (the "1934 Act Regulations"). The Conversion
Application, including the Prospectus and the Depositors' Proxy Statement
(including any amendment or supplement thereto), does not include any 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; provided, however,
that the representations and warranties in this Section 6(c) 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 the Agent or its counsel
expressly regarding the Agent for use in the Prospectus contained in the
Conversion Application under the caption "Rainer Pacific Bank's Conversion -
Marketing Arrangements.
(d) The Holding Company Application has been prepared by the Company
in material conformity with the requirements of the Board and approved by the
Board. A conformed copy of the Holding Company Application has been delivered to
the Agent and its counsel, receipt of which is hereby acknowledged by the Agent.
(e) No order has been issued by the Department, the FDIC, the SEC or
any state securities administrator preventing or suspending the use of the
Prospectus or any supplemental sales literature authorized by the Rainier
Pacific Parties for use in connection with the offering and no action by or
before any such government entity to revoke any approval, authorization or order
of effectiveness related to the Conversion is pending or, to the best knowledge
of the Rainier Pacific Parties, threatened.
(f) Pursuant to the Conversion Regulations, the Plan has been approved
by the Boards of Directors of the Bank and is subject to approval by the
depositors of the Bank; at the Closing Date, the offer and sale of the Shares
and all actions in connection with the contribution to the Foundation will have
been conducted in all material respects in accordance with the Plan, the
Conversion Regulations, and all other applicable laws, regulations, decisions
and orders, including all terms, conditions, requirements and provisions
precedent to the Conversion imposed upon the Bank by the Department, the FDIC,
the SEC or any other regulatory authority, other than those which the regulatory
authority permits to be completed after the Conversion and in the manner
described in the Prospectus. To the best knowledge of the Rainier Pacific
Parties, no person has sought to obtain review of the final action of the
Department or the FDIC in approving the Plan or in approving the Conversion
Application or the Board in approving the Holding Company Application pursuant
to applicable statutes or regulations.
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(g) RP Financial, LC, which prepared the appraisal of the aggregate
pro forma market value of the Common Stock on which the Offerings were based
(the "Appraisal"), has advised the Rainier Pacific Parties in writing that it is
independent with respect to each of the Rainier Pacific Parties within the
meaning of the Conversion Regulations and the Rainier Pacific Parties believe RP
Financial, LC to be expert in preparing appraisals of savings institutions.
(h) Each of Xxxx Xxxxx LLP and McGladrey & Xxxxxx which certified the
financial statements filed as part of the Registration Statement and the
Conversion Application, has advised the Rainier Pacific Parties that it is an
independent certified public accountant within the meaning of the Code of Ethics
of the AICPA, and Xxxx Xxxxx LLP and McGladrey & Xxxxxx are, with respect to the
Rainier Pacific Parties and each subsidiary thereof, independent certified
public accountants as required by the 1933 Act and the 1933 Act Regulations.
(i) The financial statements, schedules and notes related thereto that
are included in the Prospectus fairly present in all material respects the
financial condition, results of operations, equity and cash flows of the Bank at
the respective dates indicated and for the respective periods covered thereby
and comply as to form in all material respects with the applicable accounting
requirements of Title 12 of the Code of Federal Regulations, Regulation S-X of
the SEC and generally accepted accounting principles ("GAAP") (including those
requiring the recording of certain assets at their current market value). Such
financial statements, schedules and notes related thereto have been prepared in
accordance with generally accepted accounting principles consistently applied
through the periods involved (except as noted in the Notes to the financial
statements), 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 Department and the FDIC, and any
other applicable regulatory authority, except that accounting principles
employed in such regulatory filings conform to the requirements of the
Department, the FDIC and the SEC and not necessarily to GAAP. The other
financial, statistical and pro forma information and related notes included in
the Prospectus present fairly the information shown therein on a basis
consistent with the audited and unaudited financial statements of the Bank
included in the Prospectus, and as to the pro forma adjustments, the adjustments
made therein have been consistently applied on the basis described therein.
(j) Since the respective dates as of which information is given in the
Registration Statement including the Prospectus: (i) there has not been any
material adverse change in the financial condition, results of operations,
capital, assets, properties or business of the Rainier Pacific Parties, taken as
a whole, 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 the
principal amount of the Bank's assets that are classified by the Bank as
substandard, doubtful or loss or in loans past due 90 days or more or real
estate acquired by foreclosure, by deed-in-lieu of foreclosure or deemed
in-substance foreclosure or any material decrease in equity capital or total
assets of the Bank, nor have the Rainier Pacific Parties issued any securities
or incurred any liability or obligation for borrowing other than in the ordinary
course of business; (iii) there have not been any material transactions entered
into by the Rainier Pacific Parties that have not been disclosed in the
Prospectus; (iv) there has not been any material adverse change in the aggregate
dollar amount of the Bank's deposits or its consolidated net worth; (v) there
has been no material adverse change in the Rainier Pacific Parties' relationship
with their insurance carriers,
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including, without limitation, cancellation or other termination of the Rainier
Pacific Parties fidelity bond or any other type of insurance coverage; (vi)
except as disclosed in the Prospectus, there has been no material change in
executive management of the Rainier Pacific Parties, none of which has any
material undisclosed liability of any kind, contingent or otherwise; (vii)
neither of the Rainier Pacific Parties has sustained any material loss or
interference with its respective business or properties from fire, flood,
windstorm, earthquake, accident or other calamity, whether or not covered by
insurance; (viii) none of the Rainier Pacific Parties is in default in the
payment of principal or interest on any outstanding debt obligations; (ix) the
capitalization, liabilities, assets, properties and business of the Rainier
Pacific Parties conform in all material respects to the descriptions thereof
contained in the Prospectus; and (x) neither of the Rainier Pacific Parties has
any material contingent liabilities, except as set forth in the Prospectus.
(k) The Holding Company is a stock corporation duly organized, validly
existing and in good standing under the laws of the State of Washington, with
corporate power and authority to own its properties and to conduct its business,
as described in the Prospectus, and is qualified to transact business and will
be in good standing in Washington and in each jurisdiction in which the conduct
of business requires such qualification, unless the failure to qualify in one or
more of such jurisdictions would not have a material adverse effect on the
financial condition, results of operation, capital, properties, business affairs
or prospects of the Rainier Pacific Parties taken as a whole (a "Material
Adverse Effect"). As of the Closing Date, the Holding Company will have obtained
all licenses, permits and other governmental authorizations required for the
conduct of its business, except those that individually or in the aggregate
would not have a Material Adverse Effect; and as of the Closing Date, all such
licenses, permits and governmental authorizations will be in full force and
effect, and the Holding Company will be in compliance therewith in all material
respects, and the Holding Company will be in compliance in all material respects
with all laws, rules, regulations and orders applicable to the operation of its
business.
(l) As of the date of this Agreement, the Holding Company does not own
any equity securities or any equity interest in any business enterprise.
(m) The Bank has been duly organized and is a validly existing
Washington-chartered savings bank in the mutual form of organization and upon
the Conversion will become a wholly owned subsidiary of the Holding Company, 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 licenses, permits and other governmental authorizations currently
required for the conduct of its business, except those that individually or in
the aggregate would not have a Material Adverse Effect; all such licenses,
permits and governmental authorizations are in full force and effect, and the
Bank is in compliance with all laws, rules, regulations and orders applicable to
the operation of its business; except where failure to be in compliance would
not, individually or in the aggregate, have a Material Adverse Effect. The Bank
does not own equity securities or any equity interest in any other active
business enterprise except as described in the Prospectus or as would not be
material to the operations of the Bank. Upon completion of the Conversion, (i)
all of the authorized and outstanding capital stock of the Bank will be owned by
the Holding Company free and clear of any mortgage, pledge, lien, encumbrance,
claim or restriction of any kind and (ii) the Holding Company will have no
direct subsidiaries other than the Bank. At the Closing Date, the Conversion
will have been effected in all material respects in
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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, all terms,
conditions, requirements and provisions with respect to the Conversion imposed
by the Department, the FDIC or any other governmental agency, if any, will have
been complied with by the Rainier Pacific Parties 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.
(n) The authorized capital stock of the Bank consists of 90,000 shares
of common stock, of $1.0000 par value per share (the "Bank Common Stock") and
10,000 shares of preferred stock, no par value (the "Bank Preferred Stock"), of
which no shares of Bank Common Stock and no shares of Bank Preferred Stock are
issued and outstanding as of the date hereof; no additional shares of Bank
Common Stock and no shares of Bank Preferred Stock will be issued and all
outstanding shares of Bank Common Stock have been duly authorized and validly
issued and are fully paid and nonassessable and have been issued in compliance
with all federal and state securities laws.
(o) The only subsidiary of the Bank is Support Systems, Inc. ("SSI").
SSI is duly organized, validly existing and in good standing under the laws of
the State of Washington, with full power and authority to own property and
conduct its business; SSI is duly qualified as a foreign corporation to transact
business in each jurisdiction in which failure to so qualify would have a
Material Adverse Effect; SSI holds all licenses, certificates and permits from
governmental authorities necessary for the conduct of its business, except where
failure to hold such licenses, permits or authorizations would not, individually
or in the aggregate, have a Material Adverse Effect; the activities of SSI are
permitted to be conducted by subsidiaries of a Washington-chartered savings
institution and of Washington corporations.
(p) 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 maximum limits, and no proceedings for the termination or revocation of such
insurance are pending or, to the best knowledge of the Rainier Pacific Parties,
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 Plan and the
Conversion Regulations.
(q) Upon consummation of the Conversion, the authorized, issued and
outstanding capital stock of the Holding 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 (except for the shares issued upon incorporation of the Holding Company);
the Shares and the Foundation Shares have been duly and validly authorized for
issuance and, when issued and delivered by the Holding 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
nonassessable; the issuance of the Shares and the Foundation Shares is not
subject to preemptive rights, except for the subscription rights granted
pursuant to the Plan; and the terms and provisions of the Shares and the
Foundation Shares will conform in all material respects to the description
thereof contained in the Prospectus. Upon
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issuance of the Shares and the Foundation Shares sold, good title to the Shares
will be transferred from the Holding Company to the purchasers of Shares (or the
Foundation, as appropriate) against payment therefor as set forth in the Plan
and the Prospectus.
(r) Neither of the Rainier Pacific Parties is (i) in violation of
their respective articles of incorporation, charters or bylaws, as applicable or
(ii) in default in the performance or observance of any obligation, agreement,
covenant, or condition contained in any contract, lease, loan agreement,
indenture or other instrument to which it is a party or by which it or any of
its property may be bound which would result in a Material Adverse Effect. The
execution and delivery of this Agreement and the consummation of the
transactions herein contemplated will not: (i) violate or conflict with the
articles of incorporation, charter or bylaws of any of the Rainier Pacific
Parties; (ii) conflict with, or constitute a breach of or default under, any
material contract, lease or other instrument to which any of the Rainier Pacific
Parties is a party or by which any of the properties of the Rainier Pacific
Parties may be bound, or any applicable law, rule, regulation or order, except
for such conflicts, breaches or defaults that would not individually or in the
aggregate result in a Material Adverse Effect; (iii) violate any authorization,
approval, judgment, decree, order, statute, rule or regulation applicable to the
Rainier Pacific Parties, except for such violations which would not have a
Material Adverse Effect; or (iv) except for the creation of the liquidation
account, result in the creation of any material lien, charge or encumbrance upon
any property of the Rainier Pacific Parties, except for such liens, charges or
encumbrances that would not individually or in the aggregate have a Material
Adverse Effect.
(s) All documents made available to or delivered or to be made
available to or delivered by the Rainier Pacific Parties or their
representatives in connection with the issuance and sale of the Shares,
including records of account holders, and depositors of the Bank, or in
connection with the Agent's exercise of due diligence, except for those
documents which were prepared by parties other than the Rainier Pacific Parties
or their representatives, to the best knowledge of the Rainier Pacific Parties,
were on the dates on which they were delivered, or will be on the dates on which
they are to be delivered, true, complete and correct in all material respects.
(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 any of the
Rainier Pacific Parties, 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 or agreement to which any of the
Rainier Pacific Parties is a party or by which any of their property is bound or
affected in any respect which, in any such case, would have a Material Adverse
Effect on the Rainier Pacific Parties taken as a whole, and such agreements are
in full force and effect; and no other party to any such agreements has
instituted or, to the knowledge of any of the Rainier Pacific Parties,
threatened any action or proceeding wherein any of the Rainier Pacific Parties
is alleged to be in default thereunder under circumstances where such action or
proceeding, if determined adversely to any of the Rainier Pacific Parties, would
have a Material Adverse Effect.
(u) The Rainier Pacific Parties have good and marketable title to all
assets which are material to the businesses of the Rainier Pacific Parties, free
and clear of all liens, charges,
10
encumbrances, restrictions or other claims, except such as are described in the
Prospectus or where the absence of good and marketable title would not have a
Material Adverse Effect; and all of the leases and subleases which are material
to the businesses of the Rainier Pacific Parties, including those described in
the Registration Statement or Prospectus, are in force and effect.
(v) The Rainier Pacific Parties are not in violation of any directive
from the Department, the FDIC, or any other agency to make any material change
in the method of conducting their respective businesses; the Rainier Pacific
Parties have conducted and are conducting their respective businesses so as to
comply in all respects with all applicable statutes and regulations (including,
without limitation, regulations, decisions, directives and orders of the
Department, the Commission and the FDIC), except where the failure to so comply
would not have a Material Adverse Effect, and there is no charge, investigation,
action, suit or proceeding before or by any court, regulatory authority or
governmental agency or body pending or, to the knowledge of any of the Rainier
Pacific Parties, threatened, which might materially and adversely affect the
Conversion, the performance of this Agreement, or the consummation of the
transactions contemplated in the Plan as described in the Registration
Statement, or which might result in a Material Adverse Effect.
(w) Prior to the Closing Date, the Rainier Pacific Parties will have
received an opinion of their special counsel, Breyer & Associates PC with
respect to the federal income tax consequences of the Conversion, as described
in the Registration Statement and the Prospectus, an opinion of Xxxxx, Xxxxxxxx
& Xxxxx, X.X. with respect to the state tax consequences of the Conversion and
an opinion of Silver, Xxxxxxxx & Taff with respect to the federal income tax
consequences of the proposed establishment of, and contribution to, the
Foundation, as described in the Registration Statement and the Prospectus; and
the facts and representations upon which such opinions will be based, will be
truthful, accurate and complete, and none of the Rainier Pacific Parties will
take any action inconsistent therewith.
(x) The Bank has filed all required federal and state tax returns,
paid all taxes that have become due and payable, except where permitted to be
extended or where the failure to pay such taxes would not have a Material
Adverse Effect, have made adequate reserves for similar future tax liabilities
to the extent required by GAAP and no deficiency has been asserted with respect
thereto by any taxing authority.
(y) No approval, authorization, consent or other order of any
regulatory or supervisory or other public authority is required for the
execution and delivery by the Rainier Pacific Parties of this Agreement, or the
issuance of the Shares, except for the approval of the Department, FDIC, the
Commission and the Nasdaq Stock Market, Inc., and any necessary qualification,
notification, or registration or exemption under the securities or blue sky laws
of the various states in which the Shares are to be offered.
(z) None of the Rainier Pacific Parties has: (i) issued any securities
within the last 18 months except for (a) notes to evidence bank loans or other
liabilities in the ordinary course of business or as described in the
Prospectus, and (b) shares of Common Stock issued with respect to the initial
capitalization of the Holding Company; (ii) had any dealings with respect to
sales of securities within the 12 months prior to the date hereof with any
member of the NASD, or any
11
person related to or associated with such member, other than discussions and
meetings relating to the Offerings and purchases and sales of U.S. government
and agency and other securities in the ordinary course of business; or (iii)
engaged any intermediary between the Agent and the Rainier Pacific Parties in
connection with the Offerings or the offering of shares of the Common Stock of
the Holding Company, and no person is being compensated in any manner for such
services. Appropriate arrangements have been made for placing the funds received
from subscriptions for Shares in a special interest-bearing account with the
Bank until all Shares are sold and paid for, with provision for refund to the
purchasers in the event that the Conversion is not completed for whatever reason
or for delivery to the Holding Company if all Shares are sold.
(aa) To the best knowledge of the Rainier Pacific Parties, the Rainier
Pacific Parties have not made any payment of funds of the Rainier Pacific
Parties as a loan to any person for the purchase of Shares, except for the
Holding Company's loan to the employee stock ownership plan, the proceeds of
which may be used to purchase Shares, or has made any other payment or loan of
funds prohibited by law, and no funds have been set aside to be used for any
payment prohibited by law.
(bb) The Bank complies 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.
(cc) The Rainier Pacific Parties have not relied upon Agent or its
counsel for any legal, tax or accounting advice in connection with the
Conversion.
(dd) The records used by the Rainier Pacific Parties to determine the
identity of Eligible Account Holders and Supplemental Eligible Account Holders
and Other Members are accurate and complete in all material respects.
(ee) None of the Rainier Pacific Parties is required to be registered
as an investment company under the Investment Company Act of 1940.
(ff) The Foundation has been duly organized and is validly existing as
a private charitable foundation 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 Prospectus; the
Foundation will not be a bank holding company within the meaning of 12 C.F.R.
Section 222.2(c) as a result of the issuance of the Foundation Shares to it in
accordance with the terms of the Plan and in the amounts as described in the
Prospectus; to the knowledge of the Rainier Pacific Parties, all approvals
required to establish the Foundation and to contribute the Foundation Shares
thereto and cash in an amount equivalent to the value of 1.6% of the aggregate
number of shares sold in the Offerings have been obtained as described in the
Prospectus; except as specifically disclosed in the Prospectus and the
Depositors' Proxy Statement, there are no agreements and/or understandings,
written or oral or otherwise, between any of the Rainier Pacific Parties and the
Foundation with respect to the control, directly or indirectly, over the voting
and the acquisition or disposition of the shares of Common Stock to be
contributed by the Holding Company to the Foundation; the Foundation Shares to
be issued to the Foundation in accordance with the Plan and as described in the
Prospectus will have been
12
duly authorized for issuance and, when issued and contributed by the Holding
Company pursuant to the Plan, will be duly and validly issued and fully paid and
non-assessable.
(gg) The Rainier Pacific Parties have taken all actions necessary to
obtain at Closing a Blue Sky Memorandum from Breyer & Associates PC.
(hh) Any certificates signed by an officer of any of the Rainier
Pacific Parties and delivered to the Agent or its counsel that refer to this
Agreement shall be deemed to be a representation and warranty by the Rainier
Pacific Parties to the Agent as to the matters covered thereby with the same
effect as if such representation and warranty were set forth herein.
Section 7. Representations and Warranties of the Agent. Agent
represents and warrants to the Rainier Pacific Parties that:
(a) Agent is a duly organized New York corporation and is validly
existing and in good standing under the laws of the State of New York and is
licensed to conduct business in the State of Washington with full power and
authority to provide the services to be furnished to the Rainier Pacific Parties
hereunder.
(b) The execution, delivery and performance of this Agreement and the
Letter Agreement and the consummation of the transactions contemplated herein
and therein have been duly and validly authorized by all necessary corporate
action on the part of Agent, and each of this Agreement and the Letter Agreement
is the legal, valid and binding agreement of Agent, enforceable in accordance
with its terms, except as the legality, validity, binding nature and
enforceability thereof may be limited by (i) bankruptcy, insolvency, moratorium,
reorganization, conservatorship, receivership or other similar laws relating to
or affecting the enforcement of creditors' rights generally, and (ii) general
equity principles regardless of whether such enforceability is considered in a
proceeding in equity or at law.
(c) Each of Agent and its employees, agents and representatives who
shall perform any of the services hereunder shall have, and until the Offerings
are consummated or terminated shall maintain, all licenses, approvals and
permits necessary to perform such services and shall comply in all material
respects with all applicable laws and regulations in connection with the
performance of such services.
(d) The execution and delivery of this Agreement by the Agent, 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 an
event which with notice or lapse of time or both would constitute a default)
under the Articles of Incorporation or Bylaws of the Agent or any material
agreement, indenture or other instrument to which the Agent is a party or by
which its property is bound.
(e) No action, suit, charge or proceeding before the Commission, the
NASD, any state securities commission or any court is pending, or to the
knowledge of Agent threatened, against Agent which, if determined adversely to
Agent, would have a material adverse effect upon the ability of Agent to perform
its obligations under this Agreement.
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(f) Agent is registered as a broker/dealer pursuant to Section 15(b)
of the 1934 Act and is a member in good standing of the NASD.
(g) Any funds received in the Offerings by the Agent will be handled
by the Agent in accordance with Rule 15c2-4 under the 1934 Act to the extent
applicable.
Section 8. Covenants of the Rainier Pacific Parties. The Rainier
Pacific Parties hereby jointly and severally covenant with the Agent as follows:
(a) The Holding Company will not, at any time after the date the
Registration Statement is initially filed, file any amendment or supplement to
the Registration Statement without providing the Agent and its counsel a
reasonable opportunity to review and comment on such amendment or supplement.
The Holding Company will furnish promptly to the Agent and its counsel copies of
all correspondence from the Commission with respect to the Registration
Statement and the Holding Company's responses thereto.
(b) The Rainier Pacific Parties will not, at any time after the date
any Application is approved, file any amendment or supplement to such
Application without providing the Agent and its counsel a reasonable opportunity
to review and comment on such amendment or supplement. The Rainier Pacific
Parties will furnish promptly to the Agent and its counsel copies of all
correspondence from the Department and the FDIC with respect to the Applications
and the Rainier Pacific Parties' responses thereto.
(c) The Rainier Pacific Parties will use their best efforts to cause
the Board to approve the Holding Company's acquisition of the Bank, and 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 Department and the
FDIC, as applicable, and will promptly upon receipt of any information
concerning the events listed below notify the Agent (i) when the Registration
Statement, as amended, has become effective; (ii) when the Conversion
Application as amended, has received the approval or nonobjection of the
Department and the FDIC; (iii) when the Holding Company Application, as amended,
has been approved by the Board; (iv) of the receipt of any comments from the
Department and the FDIC or any other governmental entity with respect to the
Conversion or the transactions contemplated by this Agreement; (v) of any
request by the Commission, the Department and the FDIC, or any other
governmental entity for any amendment or supplement to the Registration
Statement or the Applications or for additional information; (vi) of the
issuance by the Commission or the Department and the FDIC, or any other
governmental agency of any order or other action suspending the Offerings or the
use of the Registration Statement or the Prospectus or any other filing of the
Rainier Pacific Parties under the Conversion Regulations or other applicable
law, or the threat of any such action; (vii) of the issuance by the Commission,
the FDIC or the Department, or any other state authority of any stop order
suspending the effectiveness of the Registration Statement or of the initiation
or threat of initiation or threat of any proceedings for that purpose; or (viii)
of the occurrence of any event mentioned in subsection (f) below. The Rainier
Pacific Parties will make every reasonable effort to prevent the issuance by the
Commission, the Department and the FDIC, or any other
14
state authority of any order referred to in (vi) and (vii) above and, if any
such order shall at any time be issued, to obtain the lifting thereof at the
earliest possible time.
(d) The Rainier Pacific Parties will deliver to the Agent and to its
counsel two conformed copies of each of the following documents, with all
exhibits: the Applications as originally filed and of each amendment or
supplement thereto, and the Registration Statement, as originally filed and each
amendment thereto. Further, the Rainier Pacific Parties will deliver such
additional copies of the foregoing documents to counsel to the Agent as may be
required for any NASD filings. In addition, the Rainier Pacific Parties will
also deliver to the Agent such number of copies of the Prospectus, as amended or
supplemented, as determined and agreed to by the Rainier Pacific Parties.
(e) The Rainier Pacific Parties will furnish to the Agent, 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 1934
Act, such number of copies of such Prospectus (as amended or supplemented) as
the Agent may reasonably request for the purposes contemplated by the 1933 Act,
the 1933 Act Regulations, 1934 Act or the 1934 Act Regulations. The Holding
Company authorizes the Agent 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 the Agent.
(f) The Rainier Pacific Parties will comply in all material respects
with any and all terms, conditions, requirements and provisions with respect to
the Conversion and the transactions contemplated thereby, including those
conditions relating to the operation of the Foundation, imposed by the
Commission, by applicable state law and regulations, and by the 1933 Act, the
1934 Act, the 1933 Act Regulations and the 1934 Act Regulations, to be complied
with prior to the Closing Date; and when the Prospectus is required to be
delivered, the Rainier Pacific Parties will comply in all material respects, at
their own expense, with all requirements imposed upon them by the Department and
the FDIC, the Conversion Regulations (except as modified or waived in writing by
the Department and the FDIC), the Commission, by applicable state law and
regulations and by the 1933 Act, the 1934 Act, the 1933 Act Regulations and the
1934 Act Regulations, in each case as from time to time in force, so far as is
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.
(g) During any period when the Prospectus is required to be delivered,
each of the Rainier Pacific Parties will inform the Agent of any event or
circumstance of which it is or becomes aware as a result of which the
Registration Statement and/or Prospectus, as then supplemented or amended, would
include an untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein not misleading. If it is
necessary, in the reasonable opinion of counsel for the Rainier Pacific Parties,
to amend or supplement the Registration Statement or the Prospectus in order to
correct such untrue statement of a material fact or to make the statements
therein not misleading in light of the circumstances existing at the time of
their use, the Rainier Pacific Parties will, at their expense, prepare, file
with the Commission and the Department and the FDIC, and furnish to the Agent, a
reasonable number of copies of an amendment or amendments of, or a supplement or
supplements to, the Registration
15
Statement and the Prospectus (after a reasonable time for review by counsel for
the Agent) which will amend or supplement the Registration Statement and/or the
Prospectus so that as amended or supplemented it will not contain an untrue
statement of a material fact or omit to state a material fact necessary in order
to make the statements therein, in light of the circumstances existing at the
time, not misleading. For the purpose of this subsection, each of the Rainier
Pacific Parties will furnish such information with respect to itself as the
Agent may from time to time reasonably request.
(h) Pursuant to the terms of the Plan, the Holding Company will
endeavor in good faith, in cooperation with the Agent, to register or to qualify
the Shares for offering and sale or to exempt such Shares from registration and
to exempt the Holding Company and its officers, directors and employees from
registration as broker-dealers, under the applicable securities laws of the
jurisdictions in which the Offerings will be conducted; provided, however, that
the Holding Company shall not be obligated to file any general consent to
service of process or to qualify as a foreign corporation to do business in any
jurisdiction in which it is not so qualified. In each jurisdiction where any of
the Shares shall have been registered or qualified as above provided, the
Holding Company will make and file such statements and reports as are required
by the applicable regulatory authority in connection with such registration or
qualification for a period of not less than one year from the effective date of
the Registration Statement.
(i) The Company and the Bank shall duly establish and maintain the
liquidation account for the benefit of Eligible Account Holders and Supplemental
Eligible Account Holders in accordance with the requirements of the Conversion
Regulations 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 the Common Shares in
the event of a complete liquidation of the Company or the Bank.
(j) The Holding Company and the Bank will not sell or issue, contract
to sell or otherwise dispose of, for a period of 90 days after the date hereof,
any shares of their capital stock or securities convertible into or exercisable
for shares of their capital stock, without the Agent's prior written consent
other than in connection with any plan or arrangement described in the
Prospectus, including existing stock benefit plans.
(k) The Rainier Pacific Parties will use the net proceeds from the
sale of the Common Stock in the manner set forth in the Prospectus under the
caption "Use of Proceeds."
(l) The Rainier Pacific Parties will distribute the Prospectus or
other offering materials in connection with the offering and sale of the Common
Stock only in accordance with the Conversion Regulations, the 1933 Act, the 1934
Act, the 1933 Act Regulations and the 1934 Act Regulations, and the laws of any
state in which the shares are qualified for sale.
(m) Prior to the Closing Date, the Holding Company shall register its
Common Stock under Section 12(b) or 12(g) of the 1934 Act, and will request that
such registration statement shall be effective no later than the completion of
the Conversion. The Holding Company shall maintain the effectiveness of such
registration for not less than three years or such shorter period as may be
required by applicable law.
16
(n) For so long as the Shares are registered under the 1934 Act, the
Holding Company will furnish to its stockholders as soon as practicable after
the end of each fiscal year such reports and other information as are required
to be furnished to its stockholders under the 0000 Xxx.
(o) The Rainier Pacific Parties will maintain appropriate arrangements
for depositing all funds received from persons mailing subscriptions for or
orders to purchase Shares on an interest bearing basis as described in the
Prospectus until the Closing Date and satisfaction of all conditions precedent
to the release of the Holding Company's obligation to refund payments received
from persons subscribing for or ordering Shares in the Offerings, in accordance
with the Plan as described in the Prospectus, or until refunds of such funds
have been made to the persons entitled thereto or withdrawal authorizations
canceled in accordance with the Plan and as described in the Prospectus. The
Rainier Pacific Parties 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 Rainier Pacific Parties 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.
(p) The Holding Company will register as a bank holding company under
the BHCA.
(q) The Rainier Pacific Parties will take such actions and furnish
such information as are reasonably requested by the Agent in order for the Agent
to ensure compliance with the "Interpretation of the Board of Governors of the
NASD on Free Riding and Withholding."
(r) Until the Closing Date, the Rainier Pacific Parties will conduct
their businesses in compliance in all material respects with all applicable
federal and state laws, rules, regulations, decisions, directives and orders,
including all decisions, directives and orders of the Commission, the FDIC and
the Department.
(s) The Rainier Pacific Parties shall comply with any and all terms,
conditions, requirements and provisions with respect to the Conversion and the
transactions contemplated thereby imposed by the Department, the FDIC, the
Conversion Regulations, the Commission, the 1933 Act and the 1933 Act
Regulations, the 1934 Act and the 1934 Act Regulations to be complied with
subsequent to the Closing Date. The Holding Company will comply with all
provisions of all undertakings contained in the Registration Statement.
(t) The Rainier Pacific Parties will not amend the Plan without
notifying the Agent prior thereto.
(u) The Holding Company shall provide the Agent with any information
necessary to allow the Agent to manage the allocation process in order to permit
the Holding Company to carry out the allocation of the Shares in the event of an
oversubscription, and such information shall be accurate and reliable in all
material respects.
(v) Prior to the Closing Date, the Rainier Pacific Parties will inform
the Agent of any event or circumstances of which it is aware as a result of
which the Registration Statement and/or Prospectus, as then amended or
supplemented, would contain an untrue statement of a material
17
fact or omit to state a material fact necessary in order to make the statements
therein not misleading.
(w) The Holding Company will not deliver the Shares until the Rainier
Pacific Parties have satisfied or caused to be satisfied each condition set
forth in Section 10 hereof, unless such condition is waived in writing by the
Agent.
(x) Prior to the Closing Date, the Plan shall have been approved by
the depositors of the Bank in accordance with the Plan and the Conversion
Regulations and the applicable provisions, if any, of the Bank's charter and
bylaws.
(y) On or before the Closing Date, the Rainier Pacific Parties will
have used their best efforts to obtain approval for quotation of shares of the
Common Stock on the Nasdaq National Market System by the Closing Date and will
use their best efforts to maintain such quotation and will have completed all
conditions precedent to the Conversion specified in the Plan and the offer and
sale of the Shares will have been conducted in all material respects in
accordance with the Plan, the Conversion Regulations (except as modified or
waived in writing by the Department and the FDIC) and with all other applicable
laws, regulations, decisions and orders, including all terms, conditions,
requirements and provisions precedent to the Conversion imposed upon any of the
Rainier Pacific Parties by the Department and the FDIC, the Commission or any
other regulatory authority and in the manner described in the Prospectus.
(z) The Rainier Pacific Parties shall use their best efforts to ensure
that the Foundation submits within the time frames required by applicable law a
request to the Internal Revenue Service to be recognized as a tax-exempt
organization under Section 501(c)(3) of the Internal Revenue Code of 1986, as
amended (the "Code"); the Rainier Pacific Parties will take no action which will
result in the possible loss of the Foundation's tax-exempt status and none of
the Rainier Pacific Parties will contribute any additional assets to the
Foundation until such time that such additional contributions will be deductible
for federal and state income tax purposes.
Section 9. Payment of Expenses. Whether or not the Conversion is
completed or the sale and issuance of the Shares by the Holding Company is
consummated, the Rainier Pacific Parties will pay for all their expenses
incident to the performance of this Agreement customarily borne by issuers,
including without limitation: (a) the preparation and filing of the Application;
(b) the preparation, printing, filing, delivery and mailing of the Registration
Statement, including the Prospectus, and all documents related to the Offerings
and proxy solicitation; (c) all filing fees and expenses in connection with the
qualification or registration of the Shares for offer and sale by the Holding
Company under the securities or "Blue Sky" laws, including without limitation
filing fees, reasonable legal fees and disbursements of counsel in connection
therewith, and in connection with the preparation of a blue sky law survey; (d)
the filing fees of the NASD related to the Agent's fairness filing under NASD
Rule 2710; (e) fees and expenses related to the preparation of the independent
appraisal; (f) fees and expenses related to auditing and accounting services;
(g) expenses relating to advertising, temporary personnel, investor meetings and
stock information center; (h) transfer agent fees and costs of preparation and
distribution of stock certificates; and (i) Nasdaq application and listing fees.
The Rainier Pacific Parties also agree to reimburse Agent for reasonable
out-of-pocket expenses, including costs of travel, meals and
18
lodging, photocopying, telephone, facsimile and couriers, as well as legal fees
and expenses, incurred by Agent in connection with the services hereunder. Agent
will not incur legal fees in excess of $35,000 (including counsel's
out-of-pocket expenses) without the approval of the Bank. The Agent will not
incur other out-of-pocket expenses in excess of $25,000 without prior approval
of the Bank, additionally, any individual expenses expected to exceed $5,000
shall receive prior approval of the Bank and the Bank will reimburse Agent for
such expense accompanied by appropriate documentation. In the event that the
Agent incurs any expenses on behalf of the Rainier Pacific Parties, the Rainier
Pacific Parties will pay or reimburse the Agent for such expenses regardless of
whether the Conversion is successfully completed, and such reimbursements will
not be included in the expense limitations set forth in the following paragraph.
The Rainier Pacific Parties acknowledge, however, that such limitations may be
increased by the mutual consent of the Bank and Agent in the event of delay in
the Offering requiring the Agent to utilize a Syndicated Community Offering, a
delay as a result of circumstances requiring material additional work by Agent
or its counsel or an update of the financial information in tabular form
contained in the Prospectus for a period later than March 31, 2003. Not later
than two days prior to the Closing Date, the Agent will provide the Bank with a
detailed accounting of all reimbursable expenses to be paid at the Closing in
next day funds. In the event the Bank determines to abandon or terminate the
Plan prior to Closing, payment of such expenses shall be made in next day funds
on the date such determination is made.
Section 10. Conditions to the Agent's Obligations. The obligations of
the Agent hereunder and the occurrence of the Closing and the Conversion are
subject to the condition that all representations and warranties of the Rainier
Pacific Parties herein contained are, at and as of the commencement of the
Offerings and (except to the extent such representations and warranties speak as
of an earlier date) at and as of the Closing Date, true and correct, the
condition that the Rainier Pacific Parties shall have performed, in all material
respects, all of their obligations hereunder to be performed on or before such
dates and to the following further conditions:
(a) At the Closing Date, the Rainier Pacific Parties shall have
conducted the Conversion in all material respects in accordance with the Plan,
the Conversion Regulations and all other applicable laws, regulations, decisions
and orders, including all terms, conditions, requirements and provisions
precedent to the Conversion imposed upon them by the Department, the FDIC and
the SEC or any other authority government.
(b) The Registration Statement shall have been declared effective by
the SEC, the Conversion Application and Holding Company Application shall have
been approved by the Department and the FDIC and no stop order or other action
suspending the effectiveness of the Registration Statement shall have been
issued under the 1933 Act or proceedings therefor initiated or, to the knowledge
of the Rainier Pacific Parties, threatened by the Commission or any state
authority and no order or other action suspending the authorization for use of
the Prospectus or the consummation of the Conversion shall have been issued, or
proceedings therefor initiated or, to the knowledge of the Rainier Pacific
Parties, threatened by the Department, the FDIC, the Commission, or any other
governmental body.
19
(c) At the Closing Date, the Agent shall have received:
(1) The opinion, dated as of the Closing Date, of Breyer &
Associates PC and/or local counsel acceptable to the Agent, in form and
substance satisfactory to the Agent and counsel for the Agent to the
effect that:
(i) The Holding Company is a corporation duly
organized and validly existing and in good standing under the
laws of the State of Washington, with corporate power and
authority to own its properties and to conduct its business as
described in the Prospectus.
(ii) The Bank is a validly existing Washington
chartered mutual savings bank, and upon consummation of the
Conversion, the Bank will become a validly existing Washington
chartered stock savings bank, with full power and authority to
own its properties and to conduct its business as described in
the Prospectus and to enter into this Agreement and perform
its obligations hereunder; the activities of the Bank as
described in the Prospectus are permitted by federal and
Washington law and the rules and regulations of the FDIC and
the Department (or valid waivers granted it by the FDIC and
the Department from such rules and regulations); all of the
capital stock of the Bank to be outstanding upon completion of
the Conversion will be validly issued, fully paid and
nonassessable and will be owned of record and beneficially by
the Holding Company, free and clear, to such counsel's Actual
Knowledge, of any mortgage, pledge, lien, encumbrance, claim
or restriction.
(iii) The Bank is a member in good standing of the
Federal Home Loan Bank of Seattle. The Bank is an insured
depository institution under the provisions of the Federal
Deposit Insurance Act, as amended, and to such counsel's
Actual Knowledge, no proceedings for the termination or
revocation of the federal deposit insurance of the Bank are
pending or threatened.
(iv) Upon consummation of the Conversion, and the
issuance of Foundation Shares to the Foundation immediately
upon completion of the Conversion, subject to compliance with
all conditions imposed upon the Foundation and the
contribution of the Foundation Shares to the Foundation by the
Department and the FDIC under the terms of the approval order
or nonobjection of the Department and the FDIC, in an amount
as described in the Prospectus, (a) the authorized, issued and
outstanding capital stock of the Holding 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
(except for the shares issued upon incorporation of the
Holding Company); (b) the Shares to be subscribed for in the
Offerings and the Foundation Shares will have been duly and
validly authorized for issuance, and, when issued and
delivered by the Holding Company pursuant to the Plan against
payment of the consideration calculated as set forth in the
Plan, will be duly and validly issued and fully paid and
nonassessable; and (c) the
20
issuance of the Shares and the Foundation Shares is not
subject to preemptive rights under the articles of
incorporation or bylaws of the Holding Company, or arising
or outstanding by operation of law or under any contract,
indenture, agreement, instrument or other document known to
such counsel, except for the subscription rights under the
Plan. To such counsel's Actual Knowledge, upon issuance of
the Shares and the Foundation Shares, good title to the
Shares and the Foundation Shares will be transferred from
the Holding 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 Rainier Pacific Parties have full corporate
power and authority to enter into this Agreement and to
consummate the transactions contemplated hereby and by the
Plan, including the establishment of the Foundation and the
contribution thereto of the Foundation Shares. The execution
and delivery of this Agreement and the consummation of the
transactions contemplated hereby, including the establishment
of the Foundation and the contribution thereto of the
Foundation Shares, have been duly authorized by all necessary
corporate action on the part of the Rainier Pacific Parties;
and this Agreement constitutes a valid, legal and binding
obligation of each of the Rainier Pacific Parties, enforceable
in accordance with its terms, except as rights to indemnity
and contribution thereunder may be limited under applicable
law, and subject to the qualification that (i) enforcement
thereof may be limited by bankruptcy, insolvency, moratorium,
reorganization or other laws (including the laws of fraudulent
conveyance) or judicial decisions affecting the enforceability
of creditors' rights generally, the rights of creditors of
savings banks or financial institutions, the accounts of which
are insured by the FDIC, and (ii) enforcement thereof is
subject to general equity principles (regardless of whether
such enforceability is considered in a proceeding in equity or
at law) and to the effect of certain laws and judicial
decisions upon the availability of injunctive relief and
enforceability of equitable remedies, including the remedies
of specific performance and self-help.
(vi) Pursuant to the Conversion Regulations, the
Plan and the establishment and funding of the Foundation have
been duly approved by the required vote of the Bank's
depositors, based upon the certificate of the inspector of
election, and duly adopted by the required vote of the
directors of the Holding Company and the Bank.
(vii) The Plan complies in all material respects
with the Conversion Regulations; the Conversion Application
and the Holding Company Application, including the
establishment of the Foundation and the contribution thereto
of the Foundation Shares, have been approved by the
Department and the FDIC, and, to such counsel's Actual
Knowledge, no action has been taken and, to such counsel's
Actual Knowledge, none is pendingor threatened by the
Department, FDIC, SEC or any other governmental authority to
revoke such approval or to suspend the Offerings or the use
of the Prospectus, and subject to the satisfaction
21
of any conditions set forth in such approvals, no further
approval, registration, authorization, consent or other
order of any federal or state regulatory agency, public
board or body is required in connection with the execution
and delivery of this Agreement, the offer, sale and issuance
of the Shares and the Foundation 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. To such counsel's Actual
Knowledge, no person has sought to obtain regulatory or
judicial review of the final action of the Department and
the FDIC approving the Plan, the Conversion Application, or
the Prospectus or the Board approving the Holding Company
Application.
(viii) The Registration Statement has become
effective under the 1933 Act, and to such counsel's Actual
Knowledge, no stop order suspending the effectiveness of the
Registration Statement has been issued, or proceedings for
that purpose have been instituted by the Commission, and to
such counsel's Actual Knowledge, no such proceedings have been
threatened by the Commission.
(ix) The terms and provisions of the Shares and
the Foundation Shares conform to the description thereof
contained in the Registration Statement and the Prospectus,
and the forms of certificates, or book entry proof of Shares
proposed to be used to evidence the Shares are in due and
proper form in compliance with applicable laws.
(x) At the time the Conversion Application,
including the Prospectus and Depositors' Proxy Statement
contained therein, was approved by the Department and the
FDIC, the Conversion Application, including the Prospectus and
Depositors' Proxy Statement contained therein, as amended or
supplemented, complied as to form in all material respects
with the requirements of the Conversion Regulations, the 1933
Act Regulations, and the 1934 Act Regulations (other than the
financial statements, notes to financial statements, financial
tables or other financial and statistical data included
therein and the appraisal valuation and the business plan as
to which counsel need express no opinion).
(xi) At the time that the Registration Statement
became effective and as of the Closing Date, the Registration
Statement, including the Prospectus (as amended or
supplemented) (other than the financial statements, notes to
financial statements, financial tables or other financial and
statistical data included therein and the appraisal valuation
and the business plan as to which counsel need express no
opinion), complied as to form in all material respects with
the requirements of the 1933 Act and the rules and regulations
promulgated thereunder.
(xii) To such counsel's Actual Knowledge, there are
no legal or governmental proceedings pending, or threatened
(i) asserting the invalidity of this Agreement, (ii) seeking
to prevent the Conversion or the offer, sale or
22
issuance of the Shares, or (iii) which are required to be
disclosed in the Registration Statement and Prospectus, other
than those disclosed therein.
(xiii) The information in the Prospectus under the
captions "Summary -- The Conversion and Stock Offering," "Risk
Factors," "Use of Proceeds," "Our Policy Regarding Dividends,"
"Management," "How We Are Regulated," "Taxation of Rainier
Pacific Financial Group," "Restrictions on Acquisition of
Rainier Pacific Financial Group and Rainier Pacific Bank,"
"Description of Capital Stock of Rainier Pacific Financial
Group," and "Rainier Pacific Bank's Conversion," 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 accurate in all
material respects. The descriptions in the Prospectus of
statutes or regulations are accurate summaries and fairly
present the information required to be shown.
(xiv) None of the Rainier Pacific Parties are
required to be registered as an investment company under the
Investment Company Act of 1940.
(xv) To such counsel's Actual Knowledge, none of
the Rainier Pacific Parties is in violation of its Articles of
Incorporation, Charter and Bylaws, as appropriate, or in
default or violation of any obligation, agreement, covenant or
condition contained in any 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 Effect; the execution and delivery of this Agreement,
the incurrence of the obligations herein set forth and the
consummation of the transactions contemplated herein do not
(a), to such counsel's Actual Knowledge, 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 Rainier Pacific Parties pursuant
to any material contract, indenture, mortgage, loan agreement,
note, lease or other instrument to which any of the Rainier
Pacific Parties is a party or by which any of them may be
bound, or to which any of the property or assets of the
Rainier Pacific Parties are subject (other than the
establishment of the liquidation account), (b) result in any
violation of the provisions of the Articles of Incorporation,
charter or Bylaws of the Rainier Pacific Parties or, (c)
result in any violation of any applicable federal or state
law, act, regulation (except that no opinion with respect to
the securities and blue sky laws of various jurisdictions or
the rules or regulations of the NASD and/or The Nasdaq Stock
Market need be rendered) or, to such counsel's Actual
Knowledge, order or court order, writ, injunction or decree.
(xvi) The Holding Company's Articles of
Incorporation and Bylaws comply in all material respects with
the laws of the State of Washington. The Bank's Charter and
Bylaws comply in all material respects with Washington law.
23
(xvii) To such counsel's Actual Knowledge, none of
the Rainier Pacific Parties is in violation of any directive
from the Department or the FDIC to make any material change in
the method of conducting its respective business.
(xviii) To such counsel's Actual Knowledge, there are
no material contracts, indentures, mortgages, loan agreements,
notes, leases or other instruments required to be described or
referred to in the Conversion Application, the Registration
Statement or the Prospectus or required to be filed as
exhibits thereto other than those described or referred to
therein or filed as exhibits thereto in the Conversion
Application, the Registration Statement or the Prospectus. The
description in the Conversion Application, the Registration
Statement and the Prospectus of such documents and exhibits is
accurate in all material respects and fairly presents the
information required to be shown.
(xix) SSI is validly existing as a corporation
under the laws of the jurisdiction of its incorporation, has
full corporate power and authority to own, lease and operate
its properties and to conduct its business as described in the
Registration Statement and the Prospectus; the activities of
SSI, as described in the Registration Statement and the
Prospectus, are permitted of a Washington corporation and to
subsidiaries of a Washington-chartered savings bank under the
rules and regulations of the Department; to counsel's Actual
Knowledge, the Bank owns all of the capital stock of SSI free
and clear of any material security interest, mortgage, pledge,
lien, encumbrance, claim or equity.
(xx) The Foundation has been duly incorporated and is
validly existing as a non-stock 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 Prospectus; the
Foundation is not a bank holding company within the meaning of
12 C.F.R. Section 225.2(c) as a result of the issuance of the
Foundation Shares to it in accordance with the terms of the
Plan and in the amounts as described in the Prospectus; no
approvals are required to establish the Foundation and to
contribute the Foundation Shares and cash amounts thereto as
described in the Prospectus other than those set forth in the
approval orders of the Department and the FDIC; the Foundation
Shares to be issued to the Foundation in accordance with the
Plan and as described in the Prospectus will have been duly
authorized for issuance and, when issued and contributed by
the Company pursuant to the Plan, will be duly and validly
issued and fully paid and non-assessable.
The opinion may be limited to matters governed by the laws of
the United States and the State of Washington. In rendering such
opinion, such counsel may rely (A) as to matters involving (i) the
application of any laws other than the United States and the financial
institution laws of the State of Washington and (ii) the Foundation
required pursuant to paragraphs (c)(1)(iv), (v) and (xx) above, to the
extent such counsel deems proper and specified in such opinion, upon
the opinion of counsel reasonably acceptable to the Agent, as long as
such other opinion indicates that the Agent may rely on the
24
opinion, and (B) as to matters of fact, to the extent such counsel
deems proper, on certificates of responsible officers of the Rainier
Pacific Parties and public officials; provided copies of any such
opinion(s) or certificates of public officials are delivered to Agent
together with the opinion to be rendered hereunder by special counsel
to the Rainier Pacific Parties. The term "Actual Knowledge" as used
herein shall mean the conscious awareness of facts or other information
of the attorneys in such counsel's firm who have rendered legal
services in connection with the representation of the Rainier Pacific
Parties in the Offering or the preparation of such counsel's opinion
letter. Such opinion may be limited to present statutes, regulations
and judicial interpretations and to facts as they presently exist; in
rendering such opinion, such counsel need assume no obligation to
revise or supplement it should the present laws be changed by
legislative or regulatory action, judicial decision or otherwise; and
such counsel need express no view, opinion or belief with respect to
whether any proposed or pending legislation, if enacted, or any
proposed or pending regulations or policy statements issued by any
regulatory agency, whether or not promulgated pursuant to any such
legislation, would affect the validity of the Conversion or any aspect
thereof. In the context of such counsel's opinion described in
paragraph (ix) above regarding the absence of any stop order suspending
the effectiveness of the Registration Statement or the institution of
proceedings for that purpose by the Commission, such counsel's opinion
letter shall state that such counsel has confirmed the same with the
staff of the Commission by telephone on the date of such counsel's
opinion. Such counsel may assume that any agreement is the valid and
binding obligation of any parties to such agreement other than each of
the Holding Company or the Bank. The Agent's counsel may rely for
purposes of its own opinion on the opinion of Breyer & Associates PC
whose opinion shall expressly authorize such reliance. The opinion of
such counsel for the Rainier Pacific Parties shall state that it has no
reason to believe that the Agent is not reasonably justified in relying
thereon.
(2) A letter of Breyer & Associates PC which shall state that
during the preparation of the Registration Statement and the
Prospectus, Breyer & Associates PC participated in conferences with
certain officers of and other representatives of the Rainier Pacific
Parties, counsel to the Agent, representatives of the independent
public accountants for the Rainier Pacific Parties and representatives
of the Agent at which the contents of the Registration Statement and
the Prospectus and related matters were discussed and has considered
the matters required to be stated therein and the statements contained
therein and, although (without limiting the opinions provided pursuant
to Section 10(c)(1)), Breyer & Associates PC has not independently
verified the accuracy, completeness or fairness of the statements
contained in the Registration Statement and Prospectus, on the basis of
the foregoing, nothing has come to the attention of Breyer & Associates
PC that caused Breyer & Associates PC to believe that the Registration
Statement at the time it was declared effective by the Commission and
as of the date of such letter, contained or contains any untrue
statement of a material fact or omitted to state any material fact
required to be stated therein or necessary to make the statements
therein in light of the circumstances under which they were made not
misleading (it being understood that counsel need express no comment or
opinion with respect to statements, notes to financial statements,
schedules and other financial and statistical data included,
25
or statistical or appraisal methodology employed, in the Registration
Statement or Prospectus, the appraisal valuation or the business plan).
(3) A Blue Sky Memorandum from Breyer & Associates PC
relating to the offering, including Agent's participation therein, and
should be furnished to Agent with a copy thereof addressed to Agent or
upon which Breyer & Associates PC shall state Agent may rely. The Blue
Sky Memorandum will relate to the necessity of obtaining or confirming
exemptions, qualifications or the registration of the common stock
under applicable state securities law.
(d) Concurrently with the execution of this Agreement, the Agent shall
receive a letter from Xxxx Xxxxx LLP and McGladrey & Xxxxxx dated the date
hereof and addressed to the Agent, such letters (i) confirming that each of Xxxx
Xxxxx LLP and McGladrey & Xxxxxx is a firm of independent public accountants
within the meaning of the 1933 Act and the 1933 Act Regulations, and stating in
effect that in the opinion of each of Xxxx Xxxxx LLP and McGladrey & Xxxxxx the
financial statements of the Bank included in the Prospectus comply as to form in
all material respects with the applicable accounting requirements of the 1933
Act and the 1934 Act and the related rules and regulations of the Commission
thereunder; (ii) stating in effect that, on the basis of certain agreed upon
procedures (but not an audit examination in accordance with generally accepted
auditing standards) consisting of a review (in accordance with Statement of
Auditing Standards No. 71) of the latest available unaudited consolidated
interim financial statements of the Bank prepared by the Rainier Pacific
Parties, a reading of the minutes of the meetings of the Board of Directors of
the Bank and committees thereof 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) such unaudited consolidated
financial statements included in the Prospectus are not in conformity with
generally accepted accounting principles applied on a basis substantially
consistent with that of the audited financial statements included in the
Prospectus; or (B) during the period from the date of the latest unaudited
consolidated financial statements included in the Prospectus to a specified date
not more than five business days prior to the date of the Prospectus, there was
any material increase in borrowings (defined as securities sold under agreements
to repurchase and any other form of debt other than deposits), or non-performing
loans, special mention loans or decrease in the deposits or loan loss allowance,
total assets, stockholders' equity or there was any change in common stock
outstanding (other than for stock option plans) at the date of such letter as
compared with amounts shown in the latest unaudited statement of condition or
there was any decrease in net income, non-interest income, provision for loan
losses or net income after provision or increase in non-interest expense of the
Bank for the period commencing immediately after the period covered by the
latest unaudited income statement and ended not more than five business days
prior to the date of the Prospectus as compared to the corresponding period in
the preceding year; and (iii) stating that, in addition to the audit examination
referred to in its opinion included in the Prospectus and the performance of the
procedures referred to in clause (ii) of this subsection (c), they have compared
with the general accounting records of the Bank, which are subject to the
internal controls of the accounting system of the Bank and other data prepared
by the Rainier Pacific Parties from accounting records, to the extent specified
in such letter, such amounts and/or percentages set forth in the
26
Prospectus as the Agent may reasonably request, and they have found such amounts
and percentages to be in agreement therewith (subject to rounding).
(e) At the Closing Date, the Agent shall receive a letter from Xxxx
Xxxxx LLP and McGladrey & Xxxxxx dated the Closing Date, addressed to the Agent,
confirming the statements made by their respective letters delivered by each of
them pursuant to subsection (d) of this Section 10, the "specified date"
referred to in clause (ii)(B) thereof to be a date specified in such letter,
which shall not be more than three business days prior to the Closing Date.
(f) At the Closing Date, counsel to the Agent shall have been
furnished with such documents and opinions as counsel for the Agent may require
for the purpose of enabling them to advise the Agent with respect to the
issuance and sale of the Shares and the issuance of the Foundation Shares as
herein contemplated and related proceedings, or in order to evidence the
accuracy of any of the representations and warranties, or the fulfillment of any
of the conditions herein contained.
(g) At the Closing Date, the Agent shall receive a certificate of the
Chief Executive Officer and Chief Financial Officer of each of the Rainier
Pacific Parties, dated the Closing Date, to the effect that: (i) they have
examined the Registration Statement and at the time the Registration Statement
became authorized for final use, the Prospectus did not contain an untrue
statement of a material fact or omit to state a material fact necessary in order
to make the statements therein not misleading; (ii) there has not been, since
the respective dates as of which information is given in the Registration
Statement, any Material Adverse Effect otherwise than as set forth or
contemplated in the Registration Statement; (iii) the representations and
warranties contained in Section 6 of this Agreement are true and correct with
the same force and effect as though made at and as of the Closing Date; (iv) the
Rainier Pacific Parties have complied in all material respects with all material
agreements and satisfied all conditions on its part to be performed or satisfied
at or prior to the Closing Date including the conditions contained in this
Section 10; (v) no stop order has been issued or, to their knowledge, is
threatened, by the Commission or any other governmental body; (vi) no order
suspending the Offering, the Conversion, the acquisition of all of the shares of
the Bank by the Holding Company, the transactions required under the Plan to
consummate the Conversion or the effectiveness of the Prospectus has been issued
and to their knowledge, no proceedings for any such purpose have been initiated
or threatened by the Department, the FDIC, the Commission, or any other federal
or state authority; and (vii) to their knowledge, no person has sought to obtain
regulatory or judicial review of the action of the Department or the FDIC in
approving the Plan or to enjoin the Conversion.
(h) At the Closing Date, the Agent shall receive a letter from RP
Financial, LC, dated as of the Closing Date, (i) confirming that said firm is
independent of the Rainier Pacific Parties and is experienced and expert in the
area of corporate appraisals, (ii) stating in effect that the Appraisal complies
in all material respects with the applicable requirements of the Conversion
Regulations, and (iii) further stating that its opinion of the aggregate pro
forma market value of the Rainier Pacific Parties, as converted, expressed in
the appraisal as most recently updated, remains in effect.
27
(i) None of the Rainier Pacific Parties shall have sustained, since
the date of the latest financial statements included in the Registration
Statement and Prospectus, any material loss or interference with its business
from fire, explosion, flood, earthquake 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 in the Registration Statement and
the Prospectus, and since the respective dates as of which information is given
in the Registration Statement and the Prospectus, there shall not have been any
Material Adverse Effect that is in the Agent's reasonable judgment sufficiently
material and adverse as to make it impracticable or inadvisable to proceed with
the Offerings or the delivery of the Shares on the terms and in the manner
contemplated in the Prospectus.
(j) Prior to and at the Closing Date, in the reasonable opinion of the
Agent there shall have been no material adverse change in the financial
condition or in the earnings, business affairs or prospects of any of the
Rainier Pacific Parties independently, or the Rainier Pacific Parties taken as a
whole, from and as of the latest dates as of which such condition is set forth
in the Prospectus, except as referred to therein.
(k) At or prior to the Closing Date, the Agent shall receive (i) a
copy of the Conversion Application and a copy of the letters from the Department
approving and the FDIC not objecting to the Conversion Application, (ii) a copy
of the order from the Commission declaring the Registration Statement effective,
(iii) an executed copy of the articles of incorporation of the Holding Company,
(iv) a copy of the letter from the Board approving the Holding Company
Application, (v) a certificate from the FDIC evidencing the Bank's insurance of
accounts, and (vi) any other documents that Agent shall reasonably request.
(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 American Stock Exchange or in the
over-the-counter market, or quotations halted generally on the Nasdaq Stock
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
other than temporary trading halts or limitation (A) imposed as a result of
intraday changes in the Dow Xxxxx Industrial Average, (B) lasting no longer than
until the regularly scheduled commencement of trading on the next succeeding
business-day and (C) which when combined with all other such halts occurring
during the previous five (5) business days, total less than two (2); (ii) a
general moratorium on the operations of federally insured financial institutions
or a general moratorium on the withdrawal of deposits from commercial banks or
other federally insured financial institutions declared by either federal or
state authorities; or (iii) there shall not have occurred any material adverse
change in the financial markets in the United States or elsewhere or any
outbreak of hostilities or escalation thereof or other calamity or crisis,
including, without limitation, terrorist activities after the date hereof, the
effect of which, in the judgment of the Agent, is so material and adverse as to
make it impracticable to market the Shares or to enforce contracts, including
subscriptions or purchase orders, for the sale of the Shares.
(m) All such opinions, certificates, letters and documents will be in
compliance with the provisions hereof only if they are reasonably satisfactory
in form and substance to the Agent
28
and to counsel for the Agent. Any certificate signed by an officer of the
Holding Company or the Bank and delivered to the Agent or to counsel for the
Agent shall be deemed a representation and warranty by the Holding Company or
the Bank, as the case may be, to the Agent as to the statements made therein.
Section 11. Indemnification.
----------------
(a) The Rainier Pacific Parties jointly and severally agree to
indemnify and hold harmless the Agent, its officers, directors, agents,
attorneys, servants and employees and each person, if any, who controls the
Agent 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 settlement expenses, subject to the
limitation set forth in the last sentence of subsection (c) below), joint or
several, that the Agent or any of such officers, directors, agents, attorneys,
servants, employees and controlling Persons (collectively, the "Related
Persons") may suffer or to which the Agent or the Related Persons may become
subject under all applicable federal and state laws or otherwise, and to
promptly reimburse the Agent and any Related Persons upon written demand for any
reasonable expenses (including reasonable fees and disbursements of counsel and
Agent's time spent according to normal hourly rates) incurred by the Agent or
any Related Persons 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), the Prospectus (or any amendment or supplement thereto), the
Applications, or other instrument or document of the Rainier Pacific Parties or
based upon written information supplied by any of the Rainier Pacific Parties
filed in any state or jurisdiction to register or qualify any or all of the
Shares under the securities laws thereof (collectively, the "Blue Sky
Applications"), or any application or other document, advertisement, or
communication ("Sales Information") prepared, made or executed by or on behalf
of any of the Rainier Pacific Parties with its consent or based upon information
furnished by or on behalf of any of the Rainier Pacific Parties, in order to
qualify or register the Shares under the securities laws thereof, (ii) arise out
of or are based upon the omission or alleged omission to state in any of the
foregoing documents or information, a material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading; (iii) arise from any
theory of liability whatsoever relating to or arising from or based upon the
Registration Statement (or any amendment or supplement thereto), the Prospectus
(or any amendment or supplement thereto), the Applications, any Blue Sky
Applications or Sales Information or other documentation distributed in
connection with the Offerings; or (iv) result from any claims made with respect
to the accuracy, reliability and completeness of the records identifying the
Eligible Account Holders and Supplemental Eligible Account Holders or Other
Members or for any denial or reduction of a subscription or order to purchase
Common Stock, whether as a result of a properly calculated allocation pursuant
to the Plan or otherwise, based upon such records; provided, however, that no
indemnification is required under this subsection (a) to the extent such losses,
claims, damages, liabilities or actions arise out of or are based upon any
untrue material statements or alleged untrue material statements in, or material
omission or alleged material omission from, the Registration Statement (or any
amendment or supplement thereto) or the Prospectus (or any amendment or
supplement
29
thereto), the Applications, the Blue Sky Applications or Sales Information or
other documentation distributed in connection with the Conversion made in
reliance upon and in conformity with information furnished to the Rainier
Pacific Parties by the Agent or its representatives (including counsel) with
respect to the Agent expressly for use in the Registration Statement (or any
amendment or supplement thereto) or Prospectus (or any amendment or supplement
thereto) under the caption "Rainier Pacific Bank's Conversion - Marketing
Arrangements" except for information derived from the Prospectus. Provided
further, that the Rainier Pacific Parties will not be responsible for any loss,
liability, claim, damage or expense to the extent a court of competent
jurisdiction finds they result primarily from material oral misstatements by the
Agent to a purchaser or prospective purchaser of Shares which are not based upon
information in the Registration Statement or Prospectus, or from actions taken
or omitted to be taken by the Agent in bad faith or from the Agent's gross
negligence or willful misconduct and the Agent agrees to repay to the Rainier
Pacific Parties any amounts advanced to it by the Rainier Pacific Parties in
connection with matters as to which it is found by a court of competent
jurisdiction not to be entitled to indemnification hereunder.
(b) The Agent agrees to indemnify and hold harmless the Rainier
Pacific Parties, their directors and officers, agents, attorneys, servants and
employees and each person, if any, who controls any of the Rainier Pacific
Parties 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 settlement expenses, subject to the
limitation set forth in the last sentence of subsection (c) below), joint or
several, which they, or any of them, may suffer or to which they, or any of
them, may become subject under all applicable federal and state laws or
otherwise, and to promptly reimburse the Rainier Pacific Parties and any such
persons upon written demand for any reasonable expenses (including out-of-pocket
expenses, fees and disbursements of counsel) incurred by 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 Applications or any Blue
Sky Applications or Sales Information or are based upon the omission or alleged
omission to state in any of the foregoing documents a material fact required to
be stated therein or necessary to make the statements therein, in the light of
the circumstances under which they were made, not misleading; provided, however,
that the Agent's obligations under this Section 11(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
Applications, Registration Statement (or any amendment or supplement thereto) or
the Prospectus (or any amendment or supplement thereto) in reliance upon and in
conformity with information furnished to the Rainier Pacific Parties by the
Agent or its representatives (including counsel) expressly for use under the
caption "Rainier Pacific Bank's Conversion - Marketing Arrangements."
(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 11,
Section 12 or otherwise, unless the failure to give such notice promptly results
in
30
material prejudice to the indemnifying party. An indemnifying party may
participate at its own expense in the defense of such action. In addition, if it
so elects within a reasonable time after receipt of such notice, an indemnifying
party, jointly with any other indemnifying parties receiving such notice, may
assume the defense of such action with counsel chosen by it reasonably
acceptable to the indemnified parties that are defendants in such action, unless
such indemnified parties reasonably object to such assumption on the ground that
there may be legal defenses available to them that are different from or in
addition to those available to such indemnifying party. If an indemnifying party
assumes the defense of such action, the indemnifying parties shall not be liable
for any fees and expenses of counsel for the indemnified parties incurred
thereafter in connection with such action, proceeding or claim, other than
reasonable costs of investigation. In no event shall the indemnifying parties be
liable for the fees and expenses of more than one separate firm of attorneys
(unless an indemnified party or parties shall have reasonably concluded that
there may be defenses available to it or them which are different from or in
addition to those of other indemnified parties) for all indemnified parties in
connection with any one action, proceeding or claim or separate but similar or
related actions, proceedings or claims in the same jurisdiction arising out of
the same general allegations or circumstances. No indemnifying party shall be
liable for any settlement of any action, proceeding or suit, which settlement is
effected without its prior written consent. Neither the Rainier Pacific Parties
nor the Agent shall, without the written consent of the other, settle or
compromise any claim against them or it based upon circumstances giving rise to
an indemnification claim against the other party hereunder unless such
settlement or compromise provides that the indemnified party shall be
unconditionally and irrevocably released from all liability in respect to such
claim.
(d) The agreements contained in this Section 11 and in Section 12
hereof and the representations and warranties of the Rainier Pacific Parties 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 the Agent or its
officers, directors, controlling persons, agents, attorneys, servants or
employees or by or on behalf of any of the Rainier Pacific Parties or any
officers, directors, controlling persons, agents, attorneys , servants or
employees of any of the Rainier Pacific Parties; (ii) delivery of and payment
hereunder for the Shares; or (iii) any termination of this Agreement.
Notwithstanding the prior sentence, Sections 11 and 12 hereof are subject to and
limited by Section 23A of the Federal Reserve Act, as applicable.
Section 12. Contribution.
-------------
In order to provide for just and equitable contribution in
circumstances in which the indemnification provided for in Section 11 is due in
accordance with its terms but is found in a final judgment by a court to be
unavailable from the Rainier Pacific Parties or the Agent, the Rainier Pacific
Parties and the Agent shall contribute to the aggregate losses, claims, damages
and liabilities of the nature contemplated by such indemnification (including
any investigation, legal and other expenses incurred in connection therewith and
any amount paid in settlement of any action, suit, or proceeding of any claims
asserted, but after deducting any contribution received by the Rainier Pacific
Parties or the Agent from persons other than the other party thereto, who may
also be liable for contribution) in such proportion so that (i) the Agent is
responsible for that portion represented by the percentage that the fees paid to
the Agent pursuant
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to Section 4 of this Agreement (not including expenses) ("Agent's Fees), less
any portion of Agent's Fees paid by Agent to Assisting Brokers, bear to the
total proceeds received by the Rainier Pacific Parties from the sale of the
Shares in the Offering, net of all expenses of the Offering, except Agent's fees
and (ii) the Rainier Pacific Parties 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 11 above,
then each indemnifying party shall contribute to such amount paid or payable to
such indemnified party in such proportion as is appropriate to reflect not only
such relative fault of the Rainier Pacific Parties on the one hand and the Agent
on the other in connection with the statements or omissions which resulted in
such losses, claims, damages or liabilities (or actions, proceedings or claims
in respect thereof), but also the relative benefits received by the Rainier
Pacific Parties on the one hand and the Agent on the other from the Offering, as
well as any other relevant equitable considerations. The relative benefits
received by the Rainier Pacific Parties on the one hand and the Agent on the
other hand shall be deemed to be in the same proportion as the total proceeds
from the Offering, except Agent's fees, net of all expenses of the Offering,
received by the Rainier Pacific Parties bear, with respect to the Agent, to the
total fees (not including expenses) received by the Agent less the portion of
such fees paid by the Agent to Assisting Brokers. 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 Rainier Pacific Parties
on the one hand or the Agent 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 Rainier Pacific Parties and the Agent agree that
it would not be just and equitable if contribution pursuant to this Section 12
were determined by pro-rata allocation or by any other method of allocation
which does not take account of the equitable considerations referred to above in
this Section 12. The amount paid or payable by an indemnified party as a result
of the losses, claims, damages or liabilities (or action, proceedings or claims
in respect thereof) referred to above in this Section 12 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 the Agent shall not be liable for any
loss, liability, claim, damage or expense or be required to contribute any
amount which in the aggregate exceeds the amount paid (excluding reimbursable
expenses) to the Agent under this Agreement less the portion of such fees paid
by the Agent to Assisting Brokers. It is understood and agreed that the
above-stated limitation on the Agent's liability is essential to the Agent and
that the Agent would not have entered into this Agreement if such limitation had
not been agreed to by the parties to this Agreement. No person found guilty of
any fraudulent misrepresentation (within the meaning of Section 11(f) of the
0000 Xxx) shall be entitled to contribution with respect to any loss or
liability arising from such misrepresentation from any person who was not found
guilty of such fraudulent misrepresentation. The duties, obligations and
liabilities of the Rainier Pacific Parties and the Agent under this Section 12
and under Section 11 shall be in addition to any duties, obligations and
liabilities which the Rainier Pacific Parties and the Agent may otherwise have.
For purposes of this Section 12, each of the Agent's and the Rainier Pacific
Parties' officers, directors and, controlling persons within the meaning of the
1933 Act and the 1934 Act shall have the same rights to contribution as the
Rainier Pacific Parties and the Agent. 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
32
against another party under this Section 12, 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 12.
Section 13. Survival.
---------
(a) All representations, warranties and indemnities and other
statements contained in this Agreement, or contained in certificates of officers
of the Rainier Pacific Parties or the Agent submitted pursuant hereto, shall
remain operative and in full force and effect, regardless of any termination or
cancellation of this Agreement or any investigation made by or on behalf of the
Agent or its controlling persons, or by or on behalf of the Rainier Pacific
Parties and shall survive the issuance of the Shares, and any legal
representative, successor or assign of the Agent, any of the Rainier Pacific
Parties, and any indemnified person shall be entitled to the benefit of the
respective agreements, indemnities, warranties and representations.
(b) The provisions of Paragraph 8 of the Letter Agreement related to
"Additional Services" and "After Market Support Services" shall survive the
issuance of the Shares (but not any termination or cancellation of this
Agreement) for a period of one (1) year, and any legal representative, successor
or assign of the Agent, and any of the Rainier Pacific Parties shall be entitled
during such period to the benefit of the agreements contained therein.
Section 14. Termination. Agent may terminate this Agreement by giving
the notice indicated below in this Section at any time after this Agreement
becomes effective as follows:
(a) In the event (i) the Plan is abandoned or terminated by the Holding
Company; (ii) the Holding Company fails to consummate the sale of the minimum
number of Shares prior to December 31, 2003 in accordance with the provisions of
the Plan or as required by the Conversion Regulations and applicable law; or
(iii) immediately prior to commencement of the Offering, the Agent terminates
this relationship because in its opinion, which shall have been formed in good
faith after reasonable determination and consideration of all relevant factors,
there has been a failure to satisfactorily disclose all relevant information in
the Prospectus or the existence of market conditions which might render the sale
of the Shares inadvisable, this Agreement shall terminate and the Rainier
Pacific Parties shall refund 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 in accordance with Section 2 hereof and any such
termination shall be without liability of any party to any other party except as
otherwise provided in Sections 2, 4, 9, 11 and 12 hereof.
(b) If any of the conditions specified in Section 10 hereof shall not
have been fulfilled when and as required by this Agreement, or by the Closing
Date, or waived in writing by the Agent, this Agreement and all of the Agent's
obligations hereunder may be canceled by the Agent by notifying 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, 4, 9, 11 and 12 hereof.
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(c) If Agent elects to terminate this Agreement as provided in this
Section, the Bank shall be notified by the Agent as provided in Section 15
hereof.
(d) If this Agreement is terminated in accordance with the provisions
of this Agreement, the Agent shall retain the advisory and management fee paid
to it pursuant to Section 4 and the Rainier Pacific Parties shall reimburse the
Agent for any of its other actual, accountable, reasonable out-of-pocket
expenses pursuant to Section 9, including without limitation, communication,
legal and travel expenses.
Section 15. Notices. All notices and other communications hereunder
shall be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication. Notices to Agent shall be
directed to Xxxxx, Xxxxxxxx & Xxxxx, Inc., 000 Xxxxxxxxx Xxxxx, Xxxxxx, Xxxx
00000, Attention: Xx. Xxxxxxxx XxXxxxx (with a copy to Elias, Matz, Xxxxxxx &
Xxxxxxx L.L.P., 000 00xx Xxxxxx, XX, 00xx Xxxxx, Xxxxxxxxxx, XX 00000,
Attention: Xxxx X. Xxxxxxxx); notices to the Rainier Pacific Parties shall be
directed to Rainier Pacific Financial Group, Inc., 0000 Xxxxxxx Xxxxxxx Xxxx,
Xxxxx 000, Xxxx, Xxxxxxxxxx, 00000, Attention: Xxxx X. Xxxx, President and Chief
Executive Officer (with a copy to Breyer & Associates PC, 0000 Xxxxxxxxxx Xxxxx,
Xxxxx 000, XxXxxx, XX 00000, Attention: Xxxx X. Xxxxxx, Xx., Esq.).
Section 16. Parties. This Agreement shall inure to the benefit of and
be binding upon the Agent and the Rainier Pacific Parties, and their respective
successors. Nothing expressed or mentioned in this Agreement is intended or
shall be construed to give any person, firm or corporation, other than the
parties hereto and their respective successors and the controlling persons and
officers and directors referred to in Sections 11 and 12 and their heirs and
legal representatives, any legal or equitable right, remedy or claim under or in
respect of this Agreement or any provisions herein contained. It is understood
and agreed that this Agreement is the exclusive agreement among the parties,
supersedes any prior Agreement among the parties and may not be varied except by
a writing signed by all parties, except for Paragraphs 4, 10 and 11 of the
Letter Agreement, which are not hereby superseded.
Section 17. Partial Invalidity. In the event that any term, provision
or covenant herein or the application thereof to any circumstances or situation
shall be invalid or unenforceable, in whole or in part, the remainder hereof and
the application of said term, provision or covenant to any other circumstance or
situation shall not be affected thereby, and each term, provision or covenant
herein shall be valid and enforceable to the full extent permitted by law.
Section 18. Construction and Waiver of Jury Trial. This Agreement
shall be construed in accordance with the laws of the State of New York. Each of
the Rainier Pacific Parties and the Agent waives all right to trial by jury in
any action, proceeding, claim or counterclaim (whether based on contract, tort
or otherwise) related to or arising out of this Agreement.
Section 19. Counterparts. This Agreement may be executed in separate
counterparts, each of which so executed and delivered shall be an original, but
all of which together shall constitute but one and the same instrument.
34
If the foregoing is in accordance with your understanding of our agreement,
please sign and return to us a counterpart hereof, whereupon this instrument
along with all counterparts will become a binding agreement between you and us
in accordance with its terms.
RAINIER PACIFIC FINANCIAL GROUP, INC.
By:
-----------------------------------
Xxxx X. Xxxx
President and Chief Executive Officer
RAINIER PACIFIC SAVINGS BANK
By:
-----------------------------------
Xxxx X. Xxxx
President and Chief Executive Officer
The foregoing Agency Agreement is hereby
confirmed and accepted as of the date first
set forth above.
XXXXX, XXXXXXXX & XXXXX, INC.
By:
-----------------------------------
Xxxxxxxx XxXxxxx
35
EXHIBIT A
EXECUTIVE OFFICERS AND DIRECTORS
EXHIBIT B
AGREEMENT NOT TO SELL
---------------------
Xxxxx, Xxxxxxxx & Xxxxx, Inc.
000 Xxxxxxxxx Xxxxx
Xxxxxx, Xxxx 00000-0000
