Exhibit 10.11
PLACEMENT AGREEMENT
among
WSB Financial Group Trust I,
Issuer
WSB Financial Group, Inc.,
Sponsor
and
XXXXX BROS. & COMPANY
Placement Agent
Dated as of July 25, 2005
PLACEMENT AGREEMENT, dated as of July 25, 2005 (this "Agreement"), among
WSB Financial Group Trust I, a statutory trust created under the laws of the
State of Delaware (the "Issuer"), WSB Financial Group, Inc., a Washington
corporation, as Sponsor under the Declaration, as defined below (the "Sponsor"
and, together with the Issuer, the "Trust Parties"), and Xxxxx Bros. & Company,
as placement agent (the "Placement Agent").
WHEREAS, the Issuer proposes to issue U.S. $8,000,000 of its Capital
Securities, designated TP Securities, due September 15, 2035 (the "Securities");
WHEREAS, the Securities will be issued pursuant to an Amended and Restated
Declaration of Trust to be dated as of July 27, 2005 (the "Declaration"), among
WSB Financial Group, Inc., as Sponsor, JPMorgan Chase Bank, National
Association, as Institutional Trustee, Chase Bank USA, National Association, as
Delaware Trustee, and the Administrators named therein;
WHEREAS, the Issuer has agreed not later than July 27, 2005 ("Closing
Date"), to provide the Placement Agent with a copy of the Declaration and any
other documents required to be delivered pursuant to the terms hereof or the
Declaration;
WHEREAS, the Issuer will use the proceeds from the sale of the Securities
to purchase Debentures (as defined in the Declaration); and
WHEREAS, capitalized terms used herein but not otherwise defined herein
shall have the meaning ascribed thereto in the Declaration;
NOW IT IS HEREBY AGREED as follows:
1. PLACEMENT OF SECURITIES; COMPENSATION.
(a) On the terms and subject to the conditions of this Agreement and
in reliance upon the representations and warranties herein set forth, the Issuer
hereby appoints the Placement Agent as placement agent to place Securities, and
the Placement Agent hereby accepts such appointment. From the date hereof until
any termination of the Placement Agent's obligations hereunder, the Placement
Agent shall use its reasonable efforts to place Securities with investors
permitted by the terms hereof.
(b) The Securities shall be issued and sold free from all liens,
charges and encumbrances, equities and other third party rights of any nature
whatsoever, together with all rights of any nature.
(c) As compensation for the placement services to be provided by the
Placement Agent hereunder, the Issuer shall pay to the Placement Agent a fee in
an amount as agreed upon between the Issuer and the Placement Agent. Following
payment in full to the Placement Agent of all fees earned hereunder, the Issuer
shall have no further obligation hereunder to the Placement Agent with respect
to any fee. Such fees shall be due and payable upon sale and issuance of the
Securities. The Issuer shall have no obligation to pay any fees with respect to
any placement of the Securities which is not completed. No fee payable to any
other
placement agent by the Issuer or any other entity shall reduce or otherwise
affect the fees payable hereunder to the Placement Agent.
2. CLOSING. On the Closing Date, delivery of and payment for the
Securities shall be made at the offices of JPMorgan Chase Bank, National
Association or such other location or locations as shall be mutually acceptable
to the parties hereto. Delivery of the Securities shall be made against payment
of the purchase price therefor to the order of the Issuer in same day funds by
transfer to an account designated by the Sponsor or by such other means in same
day funds as shall be acceptable to the Placement Agent and Sponsor. Such
payment shall be made upon authorization from the Placement Agent (such
authorization to be given if the conditions to the Placement Agent's obligations
set forth herein are either satisfied or waived) against delivery of the
Securities. The Securities will be in the form requested by the Placement Agent
in accordance with the terms of the Declaration.
3. PAYMENT OF EXPENSES. The Sponsor agrees to pay all costs and
expenses incident to the performance of the obligations of the Sponsor and the
Issuer under this Placement Agreement, whether or not the transactions
contemplated herein are consummated or this Placement Agreement is terminated,
including all costs and expenses incident to (i) the authorization, issuance,
sale and delivery of the Securities and any taxes payable in connection
therewith; (ii) the fees and expenses of qualifying the Securities under the
securities laws of applicable jurisdictions, and (iii) the fees and expenses of
the counsel, the accountants and any other experts or advisors retained by the
Sponsor or the Issuer.
Notwithstanding the foregoing, if the sale of the Securities provided for
in this Placement Agreement is not consummated because any condition set forth
herein to be satisfied by either the Sponsor or the Issuer is not satisfied,
because this Placement Agreement is terminated pursuant to Section 10 or because
of any failure, refusal or inability on the part of the Sponsor or the Issuer to
perform all obligations and satisfy all conditions on its part to be performed
or satisfied hereunder other than by a reason of a default by the Placement
Agent, the Sponsor will reimburse the Placement Agent upon demand for all
reasonable out-of-pocket expenses (including the fees and all reasonable
expenses of special counsel retained by the Placement Agent, which fees and
expenses shall not exceed $12,500) that shall have been incurred by the
Placement Agent in connection with the proposed placement of the Securities. The
Sponsor shall not in any event be liable to the Placement Agent for the loss of
anticipated profits from the transactions contemplated by this Placement
Agreement.
4. REPRESENTATIONS AND WARRANTIES. Each Trust Party hereby represents,
warrants and agrees to and with the Placement Agent that, as of the Closing
Date, and as to itself only and not as to the other:
(a) with respect to the Issuer, it is duly formed and validly existing
under the laws of the State of Delaware and, with respect to the Sponsor, and
its significant subsidiaries (as defined in Rule 1-02 of Regulation S-X) (the
"Significant Subsidiaries"), each is duly organized, validly existing and in
good standing under the laws of the jurisdiction of its organization, in each
case, with all requisite power and authority to own or transfer, as applicable,
the Debentures, to conduct its business as required under the Declaration, this
Agreement or any other documents relating to or otherwise in connection with the
issue and sale of the Securities
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(collectively, the "Transaction Documents") and to perform its obligations
hereunder and under each Transaction Document, and is lawfully qualified to do
business and is in good standing in those jurisdictions in which it conducts
business and where the failure to be so qualified or in good standing would have
a material adverse effect on the condition (financial or otherwise), earnings or
business of such Trust Party, whether or not occurring in the ordinary course of
business, or would otherwise be material in context of the issuance of the
Securities ("Material Adverse Effect");
(b) this Agreement has been duly authorized, executed and delivered by
such Trust Party and constitutes, and each of the Transaction Documents to which
such Trust Party is a party has been duly authorized by such Trust Party and,
when duly executed and delivered by the Placement Agent and the other parties
thereto (if any), on the Closing Date, will constitute, legal, valid and binding
obligations of such Trust Party, except as such obligations may be limited by
bankruptcy, insolvency, reorganization and other similar laws affecting the
rights of creditors generally and the application of general equitable
principles (regardless of whether the issue of enforceability is considered in a
proceeding in equity or at law);
(c) neither the Issuer nor the Sponsor nor any of the Significant
Subsidiaries is in breach or violation of, or default under, with or without
notice or lapse of time or both, its corporate charter, bylaws or other
governing documents (including without limitation, the Declaration);
(d) all of the issued and outstanding capital stock of the Sponsor has
been duly authorized and validly issued and is fully paid and nonassessable;
(e) all of the issued and outstanding capital stock of each
Significant Subsidiary has been duly authorized and validly issued, is fully
paid and nonassessable, except to the extent such shares may be deemed
assessable under 12 U.S.C. Section 1831o or 12 U.S.C. Section 55, and is owned
by the Sponsor, directly or through subsidiaries, free of any security interest,
mortgage, pledge, lien, encumbrance, claim or equitable right; and none of the
issued and outstanding capital stock of the Sponsor or its Significant
Subsidiaries was issued in violation of any preemptive or similar rights arising
by operation of law, under the charter, by-laws or code of regulations of the
Sponsor or any of its Significant Subsidiaries or under any agreement to which
the Sponsor or any of its Significant Subsidiaries is a party or is otherwise
bound;
(f) with respect to the Issuer, on the Closing Date, the Securities
have been duly authorized by the Issuer and, when duly executed, authenticated,
issued and delivered in accordance with the Declaration against payment therefor
as contemplated herein, will be validly issued and represent undivided
beneficial interests in the assets of the Issuer, entitled to the benefits
provided by the Declaration;
(g) with respect to the Issuer, no consent, approval, authorization,
order, registration or qualification of or with any court or governmental agency
or body is required for the issue, sale or delivery of the Securities, except
for those which have been obtained and are in full force and effect, and no
consent, approval, authorization, order, registration or qualification of or
with any court or governmental agency or body is required for the consummation
of the
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other transactions contemplated by the Transaction Documents, except for those
which have been obtained and are in full force and effect, and except where the
failure to obtain such consent, approval, authorization, order, registration or
qualification would not have a Material Adverse Effect;
(h) the execution and delivery of the Transaction Documents, the issue
of the Securities and the consummation of the other transactions contemplated by
the Transaction Documents (and compliance with the terms thereof) do not and
will not conflict with or result in a breach of any of the terms or provisions
of, or constitute a default under the organizational documents of such Trust
Party; and the execution and delivery of the Transaction Documents, the issue of
the Securities and the consummation of the other transactions contemplated by
the Transaction Documents (and compliance with the terms thereof) do not and
will not conflict with or result in a breach of any indenture, trust deed,
mortgage or other agreement or instrument to which such Trust Party is a party
or by which it or any of its properties is bound, or infringe any existing
applicable law, rule, regulation, judgment, order or decree of any government,
governmental body or court, domestic or foreign, having jurisdiction over such
Trust Party or any of its properties, except for such conflicts, breaches,
defaults or infringements that would not have a Material Adverse Effect;
(i) there are no pending actions, suits or proceedings against or
affecting such Trust Party or any of its properties and, to the best of such
Trust Party's knowledge, no such suits or proceedings are threatened or
contemplated that individually or in aggregate could reasonably be expected to
have a Material Adverse Effect on the Issuer's issuance of the Securities;
(j) no event has occurred which, had the applicable Securities already
been issued, would reasonably be expected to (whether or not with the giving of
notice and/or the passage of time and/or the fulfillment of any other
requirement) constitute an Event of Default under the Declaration;
(k) the Declaration does not require qualification under the U.S.
Trust Indenture Act of 1939, as amended;
(l) neither the Issuer nor any affiliate of the Issuer nor any person
acting on behalf thereof has made offers or sales of the Securities under
circumstances that would require the registration of the Securities under the
U.S. Securities Act of 1933, as amended (the "Securities Act");
(m) the Issuer is not an "investment company" as defined in the U.S.
Investment Company Act of 1940, as amended;
(n) with respect to the Issuer, any taxes, fees and other governmental
charges in connection with the execution and delivery of this Agreement and any
Transaction Document or the execution, delivery and sale of the Securities have
been or will be paid on or prior to the Closing Date;
(o) there are no contracts, agreements or understandings between any
of the Trust Parties or any affiliate thereof and any person granting such
person the right to require the
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Issuer to file a registration statement under the Securities Act, with respect
to any Securities owned or to be owned by such person; and
(p) subject to compliance by the Placement Agent with the relevant
provisions of Section 6 hereof, the sale of the Securities pursuant to this
Agreement is exempt from the registration and prospectus delivery requirements
of the Securities Act. In the case of each offer or sale of Securities, no form
of general solicitation or general advertising was used by the Issuer or its
representatives, including, but not limited to, advertisements, articles,
notices or other communications published in any newspaper, magazine or similar
medium or broadcast over television or radio, or any seminar or meeting whose
attendees have been invited by any general solicitation or general advertising.
Neither the Issuer nor any person acting on its behalf (other than the Placement
Agent) has offered or sold, nor will the Issuer or any person acting on its
behalf (other than the Placement Agent) offer or sell directly or indirectly,
any Securities or any other security in any manner that, assuming the accuracy
of the representations and warranties and the performance of the covenants given
by the Placement Agent, would render the issuance and sale of any of the
Securities as contemplated hereby a violation of Section 5 of the Securities Act
or the registration or qualification requirements of any state securities laws,
nor has the Issuer authorized, nor will it authorize, any person to act in such
manner.
(q) The audited consolidated financial statements (including the notes
thereto) and schedules of the Sponsor and its consolidated subsidiaries for the
year ended December 31, 2004 (the "Financial Statements") and the interim
unaudited consolidated financial statements of the Sponsor and its consolidated
subsidiaries for the period ended ___________, 2004 (the "Interim Financial
Statements") provided to the Placement Agent are the most recent available
audited and unaudited consolidated financial statements of the Sponsor and its
consolidated subsidiaries, respectively, and fairly present in all material
respects, in accordance with generally accepted accounting principles, the
financial position of the Sponsor and its consolidated subsidiaries, and the
results of operations and changes in financial condition as of the dates and for
the periods therein specified, subject, in the case of Interim Financial
Statements, to year-end adjustments. There has been no material adverse change
or development with respect to the Financial Statements or earnings of the
Sponsor and its subsidiaries, taken as a whole. Such consolidated financial
statements and schedules have been prepared in accordance with generally
accepted accounting principles consistently applied throughout the periods
involved (except as otherwise noted therein). The accountants of the Sponsor who
certified the Financial Statements are independent public accountants of the
Sponsor and its Subsidiaries within the meaning of the Securities Act and the
rules and regulations thereunder as in effect on the date of this Agreement.
(r) The Sponsor's report on FR Y-6 dated July 25, 2005, provided to
the Placement Agent is the most recent available such report and the information
therein fairly presents in all material respects the financial position of the
Sponsor and its subsidiaries.
(s) Since the respective dates of the Financial Statements, the
Interim Financial Statements and the FR Y-6, there has been no material adverse
change or development with respect to the financial condition or earnings of the
Sponsor and its subsidiaries, taken as a whole.
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(t) The Sponsor is duly registered as a bank holding company under the
Bank Holding Company Act of 1956, as amended (the "Bank Holding Company Act"),
and the regulations of the Board of Governors of the Federal Reserve System (the
"Federal Reserve"), and the deposit accounts of the Sponsor's subsidiary
depository institutions are insured by the Federal Deposit Insurance Corporation
("FDIC") to the fullest extent permitted by law and the rules and regulations of
the FDIC, and no proceeding for the termination of such insurance is pending or,
to the knowledge of the Sponsor, threatened.
(u) Neither the Sponsor nor any of its Significant Subsidiaries is
subject to or party to, or has received any notice or advice that any of them
may become subject to any investigation with respect to, any cease-and-desist
order, agreement, consent decree, memorandum of understanding or other
regulatory enforcement action, proceeding or order with or by, or is a party to
any commitment letter or similar undertaking to, or is subject to any directive
by, or has been a recipient of any supervisory letter from, or has adopted any
board resolutions at the request of, any Regulatory Agency (as defined below)
that currently restricts in any material respect the conduct of their business
or that in any material manner relates to their capital adequacy, their credit
policies or their management or their business (each, a "Regulatory Agreement"),
nor has the Sponsor or any of its subsidiaries been advised by any Regulatory
Agency that it is considering issuing or requesting any such Regulatory
Agreement; and there is no unresolved violation, criticism or exception by any
Regulatory Agent with respect to any report or statement relating to any
examinations of the Sponsor or any of its Significant Subsidiaries which, in the
reasonable judgment of the Sponsor, is expected to result in a Material Adverse
Effect. As used herein, the term "Regulatory Agency" means any federal or state
agency charged with the supervision or regulation of depositary institutions or
holding companies of depository institutions, or engaged in the insurance of
depository institution deposits, or any court, administrative agency or
commission or other governmental agency, authority or instrumentality having
supervisory or regulatory authority with respect to the Sponsor or its
Significant Subsidiaries.
(v) The Sponsor has no present intention to exercise its option to
defer payments of interest on the Debentures as provided in the Indenture. The
Sponsor believes that the likelihood that it would exercise its right to defer
payments of interest on the Debentures as provided in the Indenture at any time
during which the Debentures are outstanding is remote.
5. UNDERTAKINGS BY THE ISSUER. The Issuer agrees with the Placement
Agent as follows:
(a) Neither the Issuer, nor any of its affiliates nor any person
authorized to act on its behalf (other than the Placement Agent), will engage in
any directed selling efforts with respect to the Securities to any U.S. Person
except pursuant to an exemption from, or in a transaction not subject to, the
registration requirements of the Securities Act. Terms used in this paragraph
have the meanings given to them by Regulation S under the Securities Act.
(b) Neither the Issuer, nor any of its affiliates nor any person
authorized to act on its behalf (other than the Placement Agent), will make
offers or sales of Securities under circumstances that would require the
registration of the Securities under the Securities Act.
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(c) For so long as any of the Securities are outstanding and are
"restricted securities" within the meaning of Rule 144, the Issuer will provide
or cause to be provided to any holder of Securities and any prospective
purchaser of the Securities designated by such a holder, upon the request of
such holder or prospective purchaser, the information required to be provided to
such holder or prospective purchaser by Rule 144A(d)(4).
(d) During the period from the date of this Agreement to the Closing
Date, the Sponsor and the Issuer shall use their best efforts to cause their
representations and warranties contained in Section 4 hereof to be true as of
the Closing Date, after giving effect to the transactions contemplated by this
Agreement, as if made on and as of the Closing Date.
(e) The Sponsor and the Issuer will not claim, and will actively
resist any attempts by others to claim, the benefits of any usury laws against
holders of Capital Securities or the Debentures.
(f) The Sponsor shall not identify the Placement Agent in a press
release or any other public statement without the consent of such Placement
Agent.
6. SELLING RESTRICTIONS. The Placement Agent represents and warrants
to the Issuer that:
(a) It understands that the Securities have not been and will not be
registered under the Securities Act and may not be offered or sold within the
United States except pursuant to an exemption from, or in a transaction not
subject to, the registration requirements of the Securities Act. It has not
offered or sold, and will not offer or sell, the Securities within the United
States except to persons whom it reasonably believes to be Qualified
Institutional Buyers (as defined in Rule 144A under the Securities Act),
institutional Accredited Investors (as defined in Rule 501(a)(1), (2), (3) or
(7) under the Securities Act) or to certain persons in transactions outside the
United States in accordance with Regulation S under the Securities Act. In
connection with any offer or sale in the United States or to or for the benefit
of a U.S. Person, it will take reasonable steps to ensure that the purchaser of
such Securities is aware that such offer or sale is being made in reliance on
Rule 144A or Regulation D in a manner that would not require registration of the
Securities under the Securities Act or any blue sky law of any State and that
future transfers of the Securities may not be made except in compliance with
applicable securities laws.
(b) Neither it nor any person acting on its behalf has engaged or will
engage in any form of general solicitation or general advertising (as those
terms are used in Rule 502(c) of Regulation D) in connection with any offer or
sale of the Securities in the United States.
(c) It will not offer or sell the Securities outside the United
States, except in accordance with the representations described herein and the
restrictions set forth below:
It has offered and sold the Securities, and will offer and sell the
Securities, during the applicable Distribution Compliance Period (as
defined in Rule 902 of Regulations S), only in accordance with Rule 903 or
904 of Regulation S under the Securities Act. Accordingly, it represents
and agrees that neither it, nor any of its affiliates nor any person acting
on its or their behalf has engaged or will
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engage in any directed selling efforts with respect to the Securities, and
that it and they have complied and will comply with the offering
restriction requirements of Regulation S. It agrees that, at or prior to
the confirmation of sale of Securities, it shall have sent to each
distributor, dealer or person receiving a selling concession, fee or other
remuneration that purchases the Securities through it during the applicable
Distribution Compliance Period a confirmation or notice of substantially
the following effect:
"The Securities offered hereby have not been registered under the U.S.
Securities Act of 1933 (the "Securities Act") and may not be offered
or sold within the United States or to, or for the account or benefit
of, U.S. Persons (i) as part of their distribution at any time or (ii)
until forty calendar days after the later of the commencement of the
offering of the Securities or the Closing Date, to persons other than
the Placement Agent or other distributors in reliance on Regulation S
and the Closing Date, except in either case in accordance with
Regulation S or Regulation D or other exemptive provisions under the
Securities Act. Terms used above have the meanings given to them by
Regulation S."
(d) It acknowledges that no action has been or will be taken by the
Issuer or any other person that would permit the offer or sale of the Securities
in any jurisdiction where action to implement such offer or sale of the
Securities is required. The Placement Agent shall not offer or sell any
Securities in any jurisdiction except in compliance with applicable law, and the
Placement Agent agrees, at its own expense, to comply with all such laws. The
Placement Agent shall at its own expense obtain any consent, approval or
authorization required for it to offer or sell the Securities under the laws or
regulations of any jurisdiction where it proposes to make offers or sales of
Securities.
7. CONDITIONS PRECEDENT. The obligations of the Placement Agent
hereunder shall be subject to the accuracy of the representations and warranties
of each Trust Party contained herein as of the date hereof, and, as of the
Closing Date (as if made on the Closing Date), to the accuracy of the statements
of each Trust Party made in any certificates delivered pursuant hereto on such
date, to the performance by each Trust Party of its obligations hereunder, and
to the following additional conditions:
(a) The Issuer shall have obtained all governmental authorizations
required, if any, in connection with the issue and sale of the Securities and
the performance of its obligations hereunder and under the Transaction Documents
to which it is a party.
(b) Each Trust Party shall have furnished to the Placement Agent a
certificate of such Trust Party signed by, in the case of the Issuer, an
Administrator and, in the case of the Sponsor, the principal executive,
financial or accounting officer of the Issuer, dated the Closing Date, to the
effect that such signatory has examined this Agreement and that the
representations and warranties of such party in this Agreement are true and
correct in all material respects on and as of the Closing Date with the same
effect as if made on the Closing Date, and such party has
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performed all its obligations and satisfied all the conditions on its part to be
satisfied at or prior to the Closing Date.
(c) The Placement Agent shall have been furnished with (i) the opinion
of counsel for the Trust Parties substantially in the form set out in Annex A
and (ii) the opinion of counsel to the Placement Agent substantially in the form
set out in Annex B hereto, each dated on the date hereof and in a form
reasonably accepteable to the Placement Agent.
(d) The conditions precedent to the performance by the Issuer of its
obligations under the Declaration shall have been satisfied or waived.
(e) Prior to the Closing Date, the Issuer shall furnish to the
Placement Agent such further information, certificates and documents as the
Placement Agent may reasonably request.
If any of the conditions specified in this Section 7 shall not have
been fulfilled in all material respects when and as provided in this Agreement,
or if any of the opinions and certificates referred to in or contemplated by
this Agreement shall not be in all material respects reasonably satisfactory in
form and substance to the Placement Agent and its counsel, this Agreement and
all obligations of the Placement Agent hereunder may be canceled by the
Placement Agent at, or at any time prior to, the Closing Date. Notice of such
cancellation shall be given to the Issuer in writing or by telephone or
facsimile confirmed in writing.
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8. INDEMNIFICATION.
(a) Each Trust Party agrees, jointly and severally, to indemnify and
hold harmless the Placement Agent and each person, if any, who controls the
Placement Agent within the meaning of the Securities Act, or the U.S. Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and the respective
affiliates, officers, directors and employees of the Placement Agent and each
such person (and each and all referred to in Section 8(b) as an "indemnified
party"), against any losses, claims, damages or liabilities, joint or several,
to which the Placement Agent or such controlling person and the respective
affiliates, officers, directors and employees of the Placement Agent and each
such person may become subject, under the Securities Act, the Exchange Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are connected with the execution and delivery
by such Trust Party, and the consummation by such Trust Party of the
transactions contemplated by, this Agreement or any other Transaction Document.
Each Trust Party agrees, jointly and severally, to reimburse the Placement Agent
and each such affiliate, officer, director, employee or controlling person for
any legal or other expenses reasonably incurred by the Placement Agent and each
such affiliate, officer, director, employee or controlling person in connection
with investigating or defending any such loss, claim, damage, liability or
action arising out of or being connected with the execution and delivery by such
Trust Party, and the consummation by such Trust Party of the transactions
contemplated by, this Agreement or the other Transaction Documents. This
indemnity agreement will be in addition to any liability that any of the Trust
Parties may otherwise have.
(b) Promptly after receipt by an indemnified party under this Section
8 of notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against the indemnifying party under this
Section 8, notify the indemnifying party of the commencement thereof; but the
omission and/or delay to so notify the indemnifying party will not relieve it
from any liability which it may have to any indemnified party unless such
omission and/or delay caused actual prejudice to the indemnifying party; in case
any such action is brought against any indemnified party, and it notified the
indemnifying party of the commencement thereof, the indemnifying party will be
entitled to participate therein and, to the extent that it may elect by written
notice, to assume the defense thereof, with counsel satisfactory to such
indemnified party, and after notice from the indemnifying party to such
indemnified party of its election so to assume the defense thereof, the
indemnifying party will not be liable to such indemnified party under this
Section 8 for any legal or other expenses subsequently incurred by such
indemnified party in connection with the defense thereof other than reasonable
costs of investigation. Counsel provided by the indemnifying party may represent
the indemnifying party as well as all indemnified parties hereunder subject to
the following provisions. If the defendants in any action include both the
indemnified party and the indemnifying party and the indemnified party shall
have reasonably concluded that there may be legal defenses available to it
and/or other indemnified parties that are different from or additional to or in
conflict with those available to the indemnifying party, the indemnified party
or parties shall have the right to select separate counsel to assert such legal
defenses and to otherwise participate in the defense of such action on behalf of
such indemnified party or parties. The reasonable fees and expenses of such
separate counsel for the indemnified party shall be paid by the indemnifying
party. Notwithstanding anything to the contrary contained herein, such
indemnified party may continue any such action on its own at its own expense.
The indemnifying
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party may avoid its duty to indemnify under this Section 8 if the indemnified
party, without the prior written consent of the indemnifying party (which
consent shall not be unreasonably withheld), effects any settlement or
compromise of, or consents to the entry of any judgment in, any pending or
threatened action in respect of which any indemnifying party is or could have
been a party and indemnity could have been sought hereunder by such indemnified
party unless such settlement includes an unconditional release of such
indemnifying party from all liability on any claims that are the subject matter
of such action. The indemnifying party shall not be liable for any settlement of
any claim affected without its consent.
9. CONTRIBUTION.
(a) In order to provide for just and equitable contribution in
circumstances under which the indemnification provided for in Section 8 hereof
is for any reason held to be unenforceable for the benefit of an Indemnified
Party in respect of any losses, liabilities, claims, damages or expenses
referred to therein, then each indemnifying party shall contribute to the
aggregate amount of such losses, liabilities, claims, damages and expenses
incurred by such indemnified party, as incurred, (i) in such proportion as is
appropriate to reflect the relative benefits received by the Sponsor and the
Trust, on the one hand, and the Placement Agent, on the other hand, from the
offering of the Securities or (ii) if the allocation provided by clause (i) is
not permitted by applicable law, in such proportion as is appropriate to reflect
not only the relative benefits referred to in clause (i) above, but also the
relative fault of the Sponsor and the Trust, on the one hand, and the Placement
Agent, on the other hand, in connection with the statements, omissions or
breaches, which resulted in such losses, liabilities, claims, damages or
expenses, as well as any other relevant equitable considerations.
(b) The Sponsor and the Trust and the Placement Agent agree that it
would not be just and equitable if contribution pursuant to this Section 9 were
determined by pro rata allocation or by any other method of allocation which
does not take account of the equitable considerations referred to above in this
Section 9. The aggregate amount of losses, liabilities, claims, damages and
expenses incurred by an Indemnified Party and referred to above in this Section
9 shall be deemed to include any legal or other expenses reasonably incurred by
such indemnified party in investigating, preparing or defending against any
litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever based upon any such
untrue or alleged untrue statement, omission or alleged omission or breach or
alleged breach.
(c) No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation.
(d) For purposes of this Section 9, the Placement Agent, each person,
if any, who controls the Placement Agent within the meaning of section 15 of the
Securities Act or Section 20 of the Exchange Act and the respective partners,
directors, officers, employees and agents of the Placement Agent or any such
controlling person shall have the same rights to contribution as the Placement
Agent, while each officer and director of the Sponsor, each officer and director
of the Company, each trustee of the Trust and each person, if any, who controls
either the Company or the Sponsor within the meaning of section 15 of the
Securities Act or
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section 20 of the Exchange Act shall have the same rights to contribution as the
Company and the Trust.
10. TERMINATION. This Agreement shall be subject to termination in the
absolute discretion of the Placement Agent, by written notice given to the
Sponsor and the Issuer prior to delivery of and payment for the Securities, if
prior to such time (i) a downgrading shall have occurred in the rating accorded
the Sponsor's debt securities or preferred stock, if any, by any "nationally
recognized statistical rating organization," as that term is used by the
Commission in Rule 15c3-1(c)(2)(vi)(F) under the Exchange Act, or such
organization shall have publicly announced that it has under surveillance or
review, with possible negative implications, its rating of the Sponsor's debt
securities or preferred stock, if any, (ii) the Issuer shall be unable to sell
and deliver to Xxxxxxx Xxxxx International or such other purchaser of the
Securities acceptable to the Placement Agent (the "Purchaser") at least
$8,000,000 stated liquidation value of Securities, (iii) the Sponsor or any of
its subsidiaries that is an insured depository institution shall cease to be
"adequately-capitalized" within the meaning of 12 U.S.C. Section 1831 and
applicable regulations adopted thereunder, or any formal administrative or
judicial action is taken by any appropriate federal banking agency against the
Sponsor or any such insured subsidiary for unsafe and unsound banking practices,
or violations of law, (iv) a suspension or material limitation in trading in
securities generally shall have occurred on the New York Stock Exchange, (v) a
suspension or material limitation in trading in any of the Sponsor's securities
shall have occurred on the exchange or quotation system upon which the Sponsor's
securities are traded, if any, (vi) a general moratorium on commercial banking
activities shall have been declared either by federal or Delaware authorities or
(vii) there shall have occurred any outbreak or escalation of hostilities, or
declaration by the United States of a national emergency or war or other
calamity or crisis, including acts of terrorism, the effect of which on
financial markets is such as to make it, in the Placement Agent's judgment,
impracticable or inadvisable to proceed with the offering or delivery of the
Securities.
11. SURVIVAL OF REPRESENTATIONS AND OBLIGATIONS. The representations,
warranties, agreements and undertakings in this Agreement shall continue in full
force and effect despite completion of the arrangements for the issue and
placement of the Securities or any investigation made by or on behalf of the
Placement Agent.
12. NOTICES.
(a) Any communication shall be given by letter or facsimile, in the
case of notices to the Issuer, to it at:
WSB Financial Group Trust I
c/o WSB Financial Group, Inc.
000 Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxx Xxxxxxx
in the case of notices to the Sponsor, to it at:
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WSB Financial Group, Inc.
000 Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxx Xxxxxxx
and in the case of notices to the Placement Agent, to it at:
Xxxxx Bros. & Company
0000 Xxxxxx Xxxxxx
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000
Facsimile: (000) 000-0000
Attention: Asset Backed Securities
(b) Any such communication shall take effect, in the case of a letter,
at the time of delivery and in the case of facsimile, at the time of dispatch.
(c) Any communication not by facsimile shall be confirmed by letter
but failure to send or receive the letter of confirmation shall not invalidate
the original communication.
13. GOVERNING LAW. This Agreement shall be governed by and construed
in accordance with the laws of the State of New York without reference to its
conflict of laws provisions.
14. JURISDICTION. Each of the parties hereto hereby irrevocably
submits to the non-exclusive jurisdiction of any New York State or United States
federal court sitting in The City and County of New York over any suit, action
or proceeding arising out of or relating to this Agreement or the transactions
contemplated hereby which is brought by the Placement Agent, the Issuer or the
Sponsor and irrevocably waives, to the fullest extent it may effectively do so,
any objection which it may now or hereafter have to the laying of venue of any
such proceeding.
15. NO BANKRUPTCY PETITION. The Placement Agent covenants and agrees
that, prior to the date which is one year and one day after the payment in full
of all Securities issued by the Issuer, it will not institute against, or join
any other Person in instituting against, the Issuer any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceedings or other
proceedings under any federal or state bankruptcy or similar law. The provisions
of this Section shall survive termination of this Agreement for any reason
whatsoever.
16. SUCCESSORS. This Agreement will inure to the benefit of and be
binding upon the parties hereto and their respective successors and assigns, and
no other person will have any right or obligations hereunder.
17. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all such
counterparts shall together constitute one and the same Agreement.
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18. DISCLOSURE OF TAX TREATMENT AND TAX STRUCTURE. Notwithstanding
anything herein to the contrary, any party to this Agreement (and each employee,
representative or other agent of any party to this Agreement) may disclose to
any and all persons, without limitation of any kind, the tax treatment and tax
structure of the offering and all materials of any kind (including opinions or
other tax analyses) that are provided to it relating to such tax treatment and
tax structure. However, such information relating to the tax treatment or tax
structure is required to be kept confidential to the extent necessary to comply
with any applicable federal or state securities laws. For this purpose, "tax
structure" means any facts relevant to the federal income tax treatment of the
offering contemplated by this Agreement but does not include information
relating to the identity of the Sponsor.
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IN WITNESS WHEREOF, this Agreement has been entered into as of the date
hereinabove set forth.
WSB Financial Group, Inc.
By: /s/ Xxxx X. Xxxxxxx
------------------------------------
Name:
----------------------------------
Title: SVP & CFO
---------------------------------
WSB Financial Group Trust I
By: WSB Financial Group, Inc., as
Sponsor
By: /s/ Xxxx X. Xxxxxxx
------------------------------------
Name:
----------------------------------
Title: SVP & CFO
---------------------------------
Xxxxx Bros. & Company, as Placement
Agent
By: /s/ Xxxxxxx Xxxxxxxx
------------------------------------
Name:
----------------------------------
Title: CFO
---------------------------------
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ANNEX A
Pursuant to Section 7(c) of the Placement Agreement, special counsel for
the Offerors shall deliver an opinion in substantially the following form:
JULY 27, 2005
LADIES AND GENTLEMEN:
We have acted as special counsel for WSB Financial Group, Inc., a
Washington corporation (the "Company"), WSB Financial Group Trust I, a Delaware
statutory trust (the "Trust," and together with the Company, the "Offerors"), in
connection with the issue and sale by the Trust of 8,000 Capital Securities
(liquidation amount $1,000 per capital security) representing undivided
beneficial interests in the assets of the Trust (the "Capital Securities"), the
subsequent purchase by the Trust from the Company of $8,248,000 in aggregate
principal amount of Junior Subordinated Deferrable Interest Debentures (the
"Debt Securities") and the guarantee by the Company of the Capital Securities
pursuant to a Guarantee Agreement (the "Guarantee Agreement"). Capitalized terms
used but not defined herein shall have the meanings assigned to such terms in
the Placement Agreement effective as of July 25, 2005, by and among the Company,
the Trust and Xxxxx Bros. & Company (the "Placement Agreement"). This opinion
letter is furnished pursuant to the Placement Agreement.
We have examined originals or copies of (i) the Articles of Incorporation
of the Company, together with all amendments thereto ("Articles of
Incorporation"), (ii) the Bylaws of the Company, as amended ("Bylaws"), (iii)
certain resolutions of the Board of Directors of the Company, (iv) the
Certificate of Trust of the Trust as filed with the Secretary of State of the
State of Delaware on July 25, 2005, (v) the Declaration of Trust of the Trust
effective as of July 25, 2005 between the Company, Chase Bank USA, National
Association, as trustee ("Delaware Trustee") and administrators of the Trust
(the "Administrators"), (vi) the Amended and Restated Declaration of Trust (the
"Declaration") effective as of July 27, 2005 among the Company, the Resident
Trustee, JPMorgan Chase Bank, National Association, as trustee ("Institutional
Trustee") and the Administrators, (vii) the Guarantee Agreement effective as of
July 27, 2005 between the Company and JPMorgan Chase Bank, National Association,
as Guarantee Trustee, (viii) the Indenture effective as of July 27, 2005 between
the Company and JPMorgan Chase Bank, National Association, as Debenture Trustee
(the "Indenture"), and (ix) such other documents and records as we have deemed
necessary and relevant for purposes hereof.
In addition, we have relied on certificates of public officials, officers
and employees of the Offerors and significant subsidiaries, if any, (each a
"Significant Subsidiary" and collectively, the "Significant Subsidiaries") as to
certain matters of fact relating to this opinion and have made such
investigations of law as we have deemed necessary and relevant as a basis
hereof. We have assumed the legal capacity of all natural persons, the
genuineness of all signatures, the authenticity of all documents and records
submitted to us as originals, the conformity to original documents and records
of all documents and records submitted to us as copies, and the truthfulness of
all statements of fact contained therein.
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Based on the foregoing and subject to the limitations and assumptions set
forth herein, and having due regard for such legal considerations as we deem
relevant, we are of the opinion that:
1. The Company has been duly incorporated and is validly existing and in
good standing under the laws of the State of Washington, and is duly registered
as a holding company under applicable rules and regulations. To the best of our
knowledge, each of the Significant Subsidiaries is duly organized, validly
existing and in good standing under the laws of its jurisdiction of organization
and each of the Company and the Significant Subsidiaries has full corporate
power and authority to own or lease its properties and conduct its business as
such business is currently conducted in all material respects. To the best of
our knowledge, all outstanding shares of capital stock of the Significant
Subsidiaries have been duly authorized and validly issued and are fully paid and
nonassessable except to the extent such shares may be deemed assessable under 12
U.S.C. Section 1831o.
2. The issuance, sale and delivery of the Capital Securities and Debt
Securities in accordance with the terms and conditions of the Placement
Agreement, the Capital Securities Purchase Agreement, the Subscription
Agreements and the Operative Documents have been duly authorized by all
necessary actions of the Offeror's Board of Directors (the "Board"). All of the
Capital Securities have been duly and validly authorized by the Board and, when
delivered in accordance with the Placement Agreement, the Capital Securities
Purchase Agreement and the Subscription Agreements, will be duly and validly
issued, fully paid and nonassessable, and will conform to the description
thereof in the Declaration. There are no preemptive or other rights to subscribe
for or to purchase any shares of capital stock or equity securities of the
Offerors or, to the best of our knowledge, without a duty of inquiry, the
Significant Subsidiaries pursuant to the corporate Articles of Incorporation,
Bylaws or other governing documents (including without limitation, the
Declaration) or, to the best of our knowledge, any agreement or other instrument
to which either Offeror or any of the Significant Subsidiaries may be bound.
3. The Offerors have all requisite corporate and trust power to enter into
and perform their obligations under the Placement Agreement, the Capital
Securities Purchase Agreement and the Subscription Agreements, and the Placement
Agreement, the Capital Securities Purchase Agreement and the Subscription
Agreements have been duly and validly authorized, executed and delivered by the
Offerors and constitute the legal, valid and binding obligations of the Offerors
enforceable in accordance with their terms, except as the enforcement thereof
may be limited by general principles of equity and by bankruptcy, insolvency,
reorganization, receivership, moratorium, fraudulent conveyance or other laws
relating to or affecting creditors' rights generally, and except as the
indemnification and contribution provisions thereof may be limited under
applicable laws and certain remedies may not be available in the case of a
non-material breach.
4. Each of the Indenture, the Declaration and the Guarantee Agreement has
been duly authorized, executed and delivered by the Company, and (in the case of
the Indenture and the Guarantee, respectively, assuming it is duly authorized,
executed and delivered by the respective trustees) constitutes a valid and
legally binding obligation of the Company enforceable in accordance with its
terms, subject to the effect of bankruptcy, insolvency,
A-2
reorganization, receivership, moratorium, fraudulent conveyance and other laws
affecting the rights and remedies of creditors generally and to general
principles of equity.
5. The Debt Securities have been duly authorized, executed and delivered by
the Company, are entitled to the benefits of the Indenture and when
authenticated in accordance with the provisions of the Indenture and delivered
to and paid for by the Trust, will constitute legal, valid and binding
obligations of the Company enforceable against the Company in accordance with
their terms, subject to the effect of bankruptcy, insolvency, reorganization,
receivership, moratorium, fraudulent conveyance and other laws affecting the
rights and remedies of creditors generally and to general principles of equity.
6. To the best of our knowledge, without a duty of inquiry, neither of the
Offerors nor, any of the Significant Subsidiaries is in breach or violation of,
or default under, with or without notice or lapse of time or both, its corporate
charter, bylaws or other governing documents (including without limitation, the
Declaration). The execution, delivery and performance of the Placement
Agreement, the Capital Securities Purchase Agreement and the Subscription
Agreement and the consummation of the transactions contemplated by the Placement
Agreement, the Capital Securities Purchase Agreement, the Subscription Agreement
and the Declaration do not and will not conflict with, result in the creation or
imposition of any material lien, claim, charge, encumbrance or restriction upon
any property or assets of the Offerors or, to the best of our knowledge, the
Significant Subsidiaries or constitute a material breach or violation of, or
constitute a material default under, with or without notice or lapse of time or
both, any of the terms, provisions or conditions of the articles of
incorporation or charter, bylaws or other governing documents (including without
limitation, the Declaration) of the Offerors or the Significant Subsidiaries or
to the best of our knowledge, without a duty of inquiry, any material contract,
indenture, mortgage, deed of trust, loan or credit agreement, note, lease,
franchise, license or any other agreement or instrument to which the Offerors or
the Significant Subsidiaries is a party or by which any of them or any of their
respective properties may be bound or any order, decree, judgment, franchise,
license, permit, rule or regulation of any court, arbitrator, government, or
governmental agency or instrumentality, domestic or foreign, having jurisdiction
over the Offerors or the Significant Subsidiaries or any of their respective
properties which, in each case, is material to (i) the Offerors and the
Significant Subsidiaries on a consolidated basis and (ii) the transactions
contemplated by the Placement Agreement in connection with the offer and sale of
the Capital Securities.
7. Except for filings, registrations, or qualifications that may be
required by securities laws, no authorization, approval, consent or order of, or
filing, registration or qualification with, any person (including, without
limitation, any court, governmental body or authority) is required under the
laws of the State of New York in connection with the transactions contemplated
by the Placement Agreement in connection with the offer and sale of the Capital
Securities as contemplated by the Placement Agreement.
8. To the best of our knowledge, without a duty of inquiry (i) no action,
suit or proceeding at law or in equity is pending or threatened to which the
Offerors or the Significant Subsidiaries is or may be a party, and (ii) no
action, suit or proceeding is pending or threatened against or affecting the
Offerors or the Significant Subsidiaries or any of their properties, before or
by any court or governmental official, commission, board or other administrative
agency,
A-3
authority or body, or any arbitrator, wherein an unfavorable decision, ruling or
finding could reasonably be expected to have a material adverse effect on the
consummation of the Placement Agreement or the issuance and sale of the Capital
Securities as contemplated therein or the condition (financial or otherwise),
earnings, affairs, business, or results of operations of the Offerors and the
Significant Subsidiaries on a consolidated basis.
9. Assuming the accuracy of the representations and warranties and
compliance with the agreements contained herein, it is not necessary in
connection with the offering, sale and delivery of the Capital Securities, the
Debt Securities and the Guarantee Agreement to register the same under the
Securities Act of 1933, as amended, under the circumstances contemplated in the
Placement Agreement and the Subscription Agreements, and the Indenture,
Declaration and Guarantee Agreement are not required to be qualified under the
Trust Indenture Act of 1939.
10. Neither the Company nor the Trust is an "investment company" or an
entity "controlled" by an "investment company", in each case within the meaning
of the Investment Company Act of 1940, as amended.
The foregoing opinion is, with your concurrence, predicated upon and
qualified in its entirety by the following:
(a) The foregoing opinion is based on and is limited to the law of the
State of New York, the General Corporation Law of the State of Delaware and the
relevant law of the United States of America.
(b) Whenever our opinion is based on circumstances "to the best of our
knowledge," "known to us," or similar expressions, we have relied exclusively on
certificates of officers or representatives of the Offerors or the Significant
Subsidiaries, as applicable (after discussing the contents thereof with such
officers), as to the existence or nonexistence of the circumstances upon which
our opinion is predicated. We have no reason to believe, however, that any such
certificate is untrue or inaccurate in any material respect.
This opinion is delivered solely to you and may not be used by you for any
other purpose and may not be quoted, circulated or published, in whole or in
part, or otherwise referred to or furnished to any other person other than your
counsel, without our express prior written authorization.
A-4
ANNEX B
Pursuant to Section 7(c) of the Placement Agreement, tax counsel for the
Offerors shall deliver an opinion in substantially the following form:
We have acted as special tax counsel to WSB Financial Group, Inc., a
Washington corporation (the "Company"), in connection with the offering by WSB
Financial Group Trust I (the "Trust") of 8,000 TP Securities (liquidation amount
$1,000 per capital security) (the "Capital Securities"), and the subsequent
purchase by the Trust from the Company of $8,248,000 in aggregate principal
amount of Junior Subordinated Deferrable Interest Debentures (the "Subordinated
Debt Securities"). Capitalized terms used but not defined herein shall have the
meanings assigned to such terms in the Placement Agreement effective as of July
25, 2005, by and among the Company, the Trust and Xxxxx Bros. & Company (the
"Placement Agreement"). This opinion letter is furnished pursuant to the
Placement Agreement.
In arriving at the opinions expressed below we have examined executed
copies of (i) the Amended and Restated Declaration of Trust of the Trust dated
the date hereof (the "Declaration"), and (ii) the Indenture relating to the
issuance of the Subordinated Debt Securities dated the date hereof (the
"Indenture") (together, the "Operative Documents"). In addition, we have made
such investigations of law and fact as we have deemed appropriate as a basis for
the opinion expressed below.
It is our opinion that, under current law and assuming the performance of
the Operative Documents in accordance with the terms described therein, the
Subordinated Debt Securities will be treated for United States federal income
tax purposes as indebtedness of the Company. It is our opinion that the Trust
will not be classified for United States federal income tax purposes as an
association taxable as a corporation.
Our opinion is based on and limited to the U.S. Internal Revenue Code of
1986, as amended, Treasury Regulations promulgated thereunder, and
administrative and judicial interpretations thereof, all as of the date hereof
and all of which are subject to change, possibly on a retroactive basis. In
rendering this opinion, we are expressing our views only as to the federal
income tax laws of the United States of America. We can give no assurance that,
after such change, our opinion would not be different. We undertake no
responsibility to update or supplement our opinion. This opinion is not binding
upon the Internal Revenue Service, and there can be no assurance, and none is
hereby given, that the Internal Revenue Service will not take a position
contrary to one or more of the positions reflected in the foregoing opinion, or
that our opinion will be upheld by the courts if challenged by the Internal
Revenue Service.
This opinion is being furnished to you solely for your benefit in
connection with the transactions set forth above. It may not be relied upon by,
nor a copy of it delivered to any other party, without our prior written
consent. This opinion is based upon our knowledge of the law and facts as of the
date hereof, and we assume no duty to communicate with you with respect to any
matter that comes to our attention hereafter.
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