EXHIBIT 1.1
Form of Proposed Agency Agreement among Empire Federal Bancorp,
Inc., Empire Federal Savings and Loan
Association of Xxxxxxxxxx and Xxxxxxx Xxxx & Company
EMPIRE FEDERAL BANCORP, INC.
Up to 2,254,000 Shares
COMMON STOCK
($0.01 Par Value)
Subscription Price $10.00 Per Share
AGENCY AGREEMENT
November __, 1996
Xxxxxxx Xxxx & Company
000 Xxxxxxxxx Xxxxx
Xxxxxx, Xxxx 00000-0000
Ladies and Gentlemen:
Empire Federal Bancorp, Inc., a Delaware corporation (the "Company") and
Empire Federal Savings and Loan Association, Livingston Montana, a federally
chartered mutual savings association (references to the "Association" include
the Association in the mutual or stock form, as indicated by the context), with
its deposit accounts insured by the Savings Association Insurance Fund ("SAIF")
administered by the Federal Deposit Insurance Corporation ("FDIC"), hereby
confirm their agreement with Xxxxxxx Xxxx & Company, a division of Xxxxx,
Xxxxxxxx & Xxxxx, Inc. ("Xxxx") as follows:
SECTION 1. THE OFFERING. The Association, in accordance with its plan of
conversion adopted by its Board of Directors (the "Plan"), intends to convert
from a federally chartered mutual savings bank to a federally chartered stock
savings association, and to issue all of its issued and outstanding capital
stock to the Company. In addition, pursuant to the Plan, the Company will offer
and sell up to 2,254,000 shares of its common stock, par value $0.01 per share
(the "Shares" or "Common Stock"), in a subscription offering (the "Subscription
Offering") to (1) depositors of the Association with savings accounts as of
March 31, 1995 ("Eligible Account Holders"), (2) the Association's Employee
Stock Ownership Plan ("ESOP"), (3) depositors of the Association with savings
accounts as of September 30, 1996 ("Supplemental Eligible Account Holders") and
(4) depositors of the Association (other than Eligible Account Holders and
Supplemental Eligible Account Holders) [AND CERTAIN BORROWERS OF THE BANK] as of
_______, 1996 ("Other Members"). Subject to the prior subscription rights of the
above-listed parties, the Company is offering for sale in a community offering
(the "Community Offering" and, when referred to together with the
Subscription Offering, the "Subscription and Community Offering") conducted
concurrently with the Subscription Offering, the Shares not so subscribed for or
ordered in the Subscription Offering to certain members of the general public to
whom a copy of the Prospectus (as hereinafter defined) is delivered, with a
preference given to natural persons who are permanent residents of Park,
Gallatin and Sweet Grass Counties of Montana (the "Local Community") ("Other
Subscribers") (all such offerees being referred to in the aggregate as "Eligible
Offerees"). It is anticipated that shares not subscribed for in the Subscription
and Community Offering will be offered to members of the general public on a
best efforts basis through a selected dealers arrangement (the "Syndicated
Community Offering") (the Subscription Offering, Community Offering and
Syndicated Community Offering are collectively referred to as the "Offering").
It is acknowledged that the purchase of Shares in the Offering is subject to the
maximum and minimum purchase limitations as described in the Plan and that the
Company and the Association may reject, in whole or in part, any orders received
in the Community Offering or Syndicated Community Offering. Collectively, these
transactions are referred to herein as the "Conversion."
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-1 (File No. 33-_______) (the
"Registration Statement") containing a prospectus relating to the Offering for
the registration of the Shares under the Securities Act of 1933 (the "1933
Act"), and has filed such amendments thereof, if any, and such amended
prospectuses as may have been required to the date hereof. The prospectus, as
amended, on file with the Commission at the time the Registration Statement
initially became effective is hereinafter called the "Prospectus," except that
if any prospectus is filed by the Company pursuant to Rule 424(b) or (c) of the
rules and regulations of the Commission under the 1933 Act (the "1933 Act
Regulations") differing from the prospectus on file at the time the Registration
Statement initially becomes effective, the term "Prospectus" shall refer to the
prospectus filed pursuant to Rule 424(b) or (c) from and after the time said
prospectus is filed with the Commission.
In accordance with 12 C.F.R. Part 563b (the "Conversion Regulations"),
the Bank has filed with the Office of Thrift Supervision (the "OTS") an
Application for Conversion (the "Conversion Application"), including the
prospectus, and has filed such amendments thereto, if any, as may have been
required by the OTS. The Conversion Application has been [APPROVED] by the OTS
and the related Prospectus has been authorized for use by the OTS. In addition,
the Company has filed with the OTS an Application H- (e)1-S (the "Holding
Company Application") to become a registered savings and loan holding company
under Section 10 of the Home Owners' Loan Act, as amended ("SLHCA"), which has
been [APPROVED].
SECTION 2. RETENTION OF XXXX; COMPENSATION; SALE AND DELIVERY OF THE
SHARES. Subject to the terms and conditions herein set forth, the Company and
the Bank hereby appoint Xxxx (i) as their exclusive financial advisory and
marketing agent to utilize its best efforts to solicit subscriptions for Shares
of the Common Stock and to advise and assist the Company and the Association
with respect to the Company's sale of the Shares in the
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Offering and (ii) to participate in the Offering in the areas of market making,
research coverage and syndicate formation (if necessary).
On the basis of the representations, warranties, and agreements herein
contained, but subject to the terms and conditions herein set forth, Xxxx
accepts such appointment and agree to consult with and advise the Company and
the Bank as to the matters set forth in the letter agreement ("Letter
Agreement"), dated July 19, 1996, between the Association and Xxxx (a copy of
which is attached hereto as Exhibit A). It is acknowledged by the Company and
the Association that Xxxx shall not be required to purchase any Shares and shall
not be obligated to take any action which is inconsistent with all applicable
laws, regulations, decisions or orders. In the event of a Syndicated Community
Offering, Xxxx will assemble and manage a selling group of broker-dealers which
are members of the National Association of Securities Dealers, Inc. (the "NASD")
to participate in the solicitation of purchase orders for shares under a
selected dealers' agreement ("Selected Dealers' Agreement"), the form of which
is set forth as Exhibit B to this Agreement.
The obligations of Xxxx pursuant to this Agreement shall terminate upon
the completion or termination or abandonment of the Plan by the Company or upon
termination of the Offering, but in no event later than 60 days after the
completion of the Subscription Offering (the "End Date"). All fees or expenses
due to Xxxx but unpaid will be payable to Xxxx in next day funds at the earlier
of the Closing Date (as hereinafter defined) or the End Date. In the even the
Offering is extended beyond the End Date, the Company, the Association and Xxxx
may agree to renew this Agreement under mutually acceptable terms.
In the event the Company is unable to sell a minimum of 1,666,000 Shares
within the period herein provided, this Agreement shall terminate and the
Company shall refund to any persons who have subscribed for any of the Shares,
the full amount which it may have received from them plus accrued interest as
set forth in the Prospectus; and none of the parties to this Agreement shall
have any obligation to the other parties hereunder, except as otherwise set
forth in this Section 2 and in Sections 6, 8 and 9 hereof.
In the event the Offering is terminated for any reason not attributable
to the action or inaction of Xxxx, Xxxx shall be paid the fees and expenses due
to the date of such termination pursuant to subparagraphs (a) and (d) below.
If all conditions precedent to the consummation of the Conversion,
including, without limitation, the sale of all Shares required by the Plan to be
sold, are satisfied, the Company agrees to issue, or have issued, the Shares
sold in the Offering and to release for delivery certificates for such Shares on
the Closing Date (as hereinafter defined) against payment to the Company by any
means authorized by the Plan, provided however, that no funds shall be
released to the Company until the conditions specified in Section 7 hereof shall
have been complied with to the reasonable satisfaction of Xxxx and their
counsel. The release of Shares against payment therefor shall be made at 10:00
a.m., Pacific Time, on a date and
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at a place acceptable to the Company, the Association and Xxxx (it being
understood that such date shall not be more than ten business days after
termination of the Offering) or such other time or place as shall be agreed upon
by the Company, the Association and Xxxx. Certificates for shares shall be
delivered directly to the purchasers in accordance with their directions.
The date upon which the Company shall release or deliver the Shares sold in the
Offering, in accordance with the terms herein, is called the "Closing Date."
Xxxx shall receive the following compensation for their services hereunder:
(a) A management fee to Xxxx in the amount of $25,000, of which
$______ has been paid as of the date of this Agreement. Such fees
shall be deemed to be earned when due. Should the Conversion be
terminated for any reason not attributable to the action or
inaction of Xxxx, Xxxx shall have earned and be entitled to be
paid fees accruing through the stage at which point the
termination occurred.
(b) A success fee of 1.5% of the dollar amount of Common Stock sold
in the Subscription and Community Offering, excluding Common
Stock purchased by directors, officers and employees (and members
of their immediate families) of Empire Federal and by the ESOP
and any tax-qualified or stock-based compensation plan (excluding
individual retirement plans ("IRAs")) and any similar plan
created by the Association for some or all of its directors or
employees payable on the Closing Date.
(c) If any shares of the Company's stock remain available after the
Subscription and Community Offering, at the request of the
Association, Xxxx will seek to form a syndicate of registered
broker-dealers to assist in the sale of such common stock on a
best efforts basis, subject to the terms and conditions set forth
in the selected dealers agreement. Xxxx will endeavor to
distribute the common stock among dealers in a fashion which best
meets the distribution objectives of the Association and the Plan
of Conversion. Xxxx will be paid a fee not to exceed 5.5% of the
aggregate Purchase Price of the shares of common stock sold
pursuant to the selected dealers agreement and then will pass
onto selected broker-dealers who assist in the syndicated
community an amount competitive with gross underwriting discounts
charged at such time for comparable amounts of stock sold at a
comparable price per share in a similar market environment. Fees
with respect to purchases affected with the assistance
of a broker/dealer shall be transmitted by Xxxx to such
broker/dealer. The decision to utilize selected broker-dealers
will be made by the Association upon consultation with Xxxx. In
the event, with respect to any stock purchases, fees are paid
pursuant to this subparagraph 2(c), such fees shall be in lieu
of, and not in addition to, payment pursuant to subparagraphs
2(a) and 2(b).
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(d) The Bank and the Company hereby agree to reimburse Xxxx, from
time to time upon Xxxx'x request, for its reasonable
out-of-pocket expenses and the reasonable fees and expenses of
its counsel. Such reimbursement of legal fees shall not exceed
$35,000. The Bank will bear the expenses of the Offering
customarily borne by issuers including, without limitation, OTS,
SEC, "Blue Sky," and NASD filing and registration fees; the fees
of the Bank's accountants, conversion agent, attorneys,
appraiser, transfer agent and registrar, printing, mailing and
marketing expenses associated with the Conversion; and the fees
set forth under this Section 2.
Full payment of Xxxx'x actual and accountable expenses, advisory fees
and compensation shall be made in next day funds on the earlier of the Closing
Date or a determination by the Association to terminate or abandon the Plan.
Xxxx will provide financial advisory assistance for a period of one year
following completion of the Conversion as set forth in the Letter Agreement.
Following this initial one-year term, if Xxxx and the Company wish to continue
the relationship, a fee will be negotiated and an agreement entered into at that
time.
In the event of an oversubscription or other event which causes the
Offering to continue beyond the original expiration date, or a resolicitation of
subscribers, the parties agree to renegotiate the expense cap applicable to
Xxxx.
SECTION 3. PROSPECTUS; OFFERING. The Shares are to be initially offered
in the Offering at the Purchase Price as defined and set forth on the cover
page of the Prospectus.
SECTION 4.REPRESENTATIONS AND WARRANTIES. The Company and the
Association jointly and severally represent and warrant to Xxxx on the date
hereof as follows:
(a) The Registration Statement was declared effective by the Commission
on _________ __, 1996. At the time the Registration Statement, including the
Prospectus contained therein (including any amendment or supplement thereto),
became effective, the Registration Statement complied in all material respects
with the requirements of the 1933 Act and the 1933 Act Regulations and the
Registration Statement, including the Prospectus contained therein (including
any amendment or supplement thereto), and any information regarding the Company
or the Association contained in Sales Information (as such term is defined in
Section 8 hereof) authorized by the Company or the Association for use in
connection with the Offering, did not contain an untrue statement of a material
fact or omit to state a material fact required to be stated therein or necessary
to make the statements therein, in light of the circumstances under which they
were made, not misleading, and at the time any Rule 424(b) or (c) Prospectus was
filed with the Commission; provided, however, that the representations and
warranties in this Section 4(a) shall not apply to statements or omissions made
in reliance upon and in conformity with written information furnished to the
Company or the Association by Xxxx expressly regarding Xxxx for use in
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the Prospectus under the caption "The Conversion-Marketing Arrangements" or
statements in or omissions from any Sales Information or information filed
pursuant to state securities or blue sky laws or regulations regarding Xxxx.
(b) The Conversion Application was approved by the OTS on _______ __,
1996 and the related Prospectus has been authorized for use by the OTS on
_______ __, 1996. At the time of the approval of the Conversion Application,
including the Prospectus (including any amendment or supplement thereto), by the
OTS and at all times subsequent thereto until the Closing Date, the Conversion
Application, including the Prospectus (including any amendment or supplement
thereto), will comply in all material respects with the Conversion Regulations
except to the extent waived by the OTS. The Conversion Application, including
the Prospectus (including any amendment or supplement thereto), does not include
any untrue statement of a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading; provided, however, that the
representations and warranties in this Section 4(b) shall not apply to
statements or omissions made in reliance upon and in conformity with written
information furnished to the Company or the Association by Xxxx expressly
regarding Xxxx for use in the Prospectus contained in the Conversion Application
under the caption "The Conversion-Plan of Distribution for the Subscription,
Direct Community and Syndicated Community Offerings" or statements in or
omissions from any sales information or information filed pursuant to state
securities or blue sky laws or regulations regarding Xxxx.
(c) The Company filed with the OTS the Holding Company Application which
was approved on ______ __, 1996.
(d) No order has been issued by the OTS or the Commission preventing or
suspending the use of the Prospectus and no action by or before any such
government entity to revoke any approval, authorization or order of
effectiveness related to the Conversion is, to the best knowledge of the Company
or the Association, pending or threatened.
(e) To the best knowledge of the Company, no person has sought to obtain
review of the final action of the OTS in approving or taking no objection to the
Plan or in approving or taking no objection to the Conversion or the Holding
Company Application pursuant to the Conversion Regulations, the SLHCA, or any
other statute or regulation.
(f) The Association has been organized and is a validly existing
federally chartered savings association in mutual form of organization and upon
the Conversion will become a duly organized and validly existing federally
chartered savings bank in capital stock form of organization, in both instances
duly authorized to conduct its business and own its property as described in the
Registration Statement and the Prospectus; the Association has obtained all
material licenses, permits and other governmental authorizations
currently required for the conduct of its business; all such licenses, permits
and governmental authorizations are in full force and effect, and the
Association is in all material respects complying with all
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laws, rules, regulations and orders applicable to the operation of its business;
the Association is existing under federal laws and is duly qualified as a
foreign corporation to transact business and is in good standing in each
jurisdiction in which its ownership of property or leasing of property or
the conduct of its business requires such qualification, unless the failure to
be so qualified in one or more of such jurisdictions would not have a material
adverse effect on the condition, financial or otherwise, or the business,
operations or income of the Association. The Association does not own equity
securities or any equity interest in any other business enterprise except as
described in the Prospectus or as would not be material to the operations of the
Association.
(g) The Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the State of Delaware with
corporate power and authority to own, lease and operate its properties and to
conduct its business as described in the Registration Statement and the
Prospectus, and the Company is qualified to do business as a foreign corporation
in each jurisdiction in which the conduct of its business requires such
qualification, except where the failure to so qualify would not have a material
adverse effect on the condition, financial or otherwise, or the business,
operations or income of the Company. The Company has obtained all material
licenses, permits and other governmental authorizations currently required for
the conduct of its business; all such licenses, permits and governmental
authorizations are in full force and effect, and the Company is in all material
respects complying with all laws, rules, regulations and orders applicable to
the operation of its business.
(h) The Association's wholly owned subsidiary, Dime Service Corporation
of ("Dime"), is duly incorporated and validly existing as a corporation in good
standing under the laws of the State of Montana, and is duly licensed and
possessed of full corporate power and authority to own its properties and
conduct its business as described in the Prospectus.
(i) The Association is a member of the Federal Home Loan Bank of Seattle
("FHLB-Seattle"). The deposit accounts of the Association are insured by the
FDIC up to the applicable limits; and no proceedings for the termination or
revocation of such insurance are pending or, to the best knowledge of the
Company or the Association, 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 Conversion Regulations.
(j) The Company and the Association have good and marketable title to
all real property and other assets material to the business of the Company and
the Association and to those properties and assets described in the Registration
Statement and Prospectus as owned by them, free and clear of all liens, charges,
encumbrances or restrictions, except such as are described in the Registration
Statement and Prospectus or are not material to the business of the Company and
the Association taken as a whole; and all of the leases and subleases material
to the business of the Company and the Association under which the
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Company or the Association hold properties, including those described in the
Registration Statement and Prospectus, are in full force and effect.
(k) The Company and the Association have received an opinion from
Xxxxxxx & Xxxxxxxxxxxx, P.C., Livingston, Montana with respect to the Montana
state income tax consequences of the proposed transaction; all material aspects
of the opinion of Xxxxxxx & Xxxxxxxxxxxx, P.C., Livingston, Montana are
accurately summarized in the Prospectus; and the facts and representations upon
which such opinion are based are truthful, accurate and complete.
(l) The Company and the Association have all such power, authority,
authorizations, approvals and orders as may be required to enter into this
Agreement, to carry out the provisions and conditions hereof and to issue and
sell (i) the capital stock of the Association to the Company and (ii) the Shares
to be sold by the Company as provided herein and as described in the Prospectus.
(m) The Company and the Association are not in violation of any
directive received from the OTS or any other agency to make any material change
in the method of conducting their businesses so as to comply in all material
respects with all applicable statutes and regulations (including, without
limitation, regulations, decisions, directives and orders of the OTS, and,
except as set forth in the Registration Statement and the Prospectus, there is
no suit or proceeding or charge or action before or by any court, regulatory
authority or governmental agency or body, pending or, to the knowledge of the
Company and the Association, threatened, which would materially and adversely
affect the Conversion, the performance of this Agreement or the consummation of
the transactions contemplated in the Plan and as described in the Registration
Statement and the Prospectus or which would result in any material adverse
change in the condition (financial or otherwise), earnings, capital or
properties of the Company, or the Association.
(n) The financial statements which are included in the Prospectus fairly
present the financial condition, results of operations, retained earnings and
cash flows of the Association at the respective dates thereof and for the
respective periods covered thereby and comply as to form in all material
respects with the applicable accounting requirements of the Regulations of the
Commission, Title 12 of the Code of Federal Regulations and generally accepted
accounting principles (including those requiring the recording of certain assets
at their current market value). Such financial statements have been prepared in
accordance with generally accepted accounting principles consistently applied
through the periods involved, present fairly in all material respects the
information required to be stated therein and are consistent with the most
recent financial statements and other reports filed by the Association with the
OTS, except that accounting principles employed in such regulatory filings
conform to the requirements of such authorities and not necessarily to generally
accepted accounting principles. 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 Association
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included in the Prospectus, and as to the pro forma adjustments, the
adjustments made therein have been properly applied on the basis described
therein.
(o) Since the respective dates as of which information is given in the
Registration Statement and the Prospectus: (i) there has not been any material
adverse change, financial or otherwise, in the condition of the Company, the
Association or Dime considered as one enterprise, or in the earnings, capital or
properties of the Company or the Association, whether or not arising in the
ordinary course of business; (ii) there has not been any material increase in
the long term debt of the Association or in loans past due 90 days or more or
real estate acquired by foreclosure, by deed-in-lieu of foreclosure or deemed
in-substance foreclosure or any material decrease in surplus and reserves or
total assets of the Association nor has the Company or the Association issued
any securities or incurred any liability or obligation for borrowing other than
in the ordinary course of business and (iii) there have not been any material
transactions entered into by the Company or the Association, except with respect
to those transactions entered into in the ordinary course of business.
(p) The capitalization, liabilities, assets, properties and business of
the Company and the Association conform in all material respects to the
descriptions thereof contained in the Prospectus.
(q) Neither the Company nor the Association has any material contingent
liabilities, except as set forth in the Prospectus.
(r) As of the date hereof, neither the Company, the Association nor Dime
is in violation of its articles of incorporation or bylaws or charter or bylaws,
as applicable (and the Association will not be in violation of its charter or
bylaws in capital stock form at the time of consummation of the Conversion), or
in default in the performance or observance of any material obligation,
agreement, covenant, or condition contained in any material contract, lease,
loan agreement, indenture or other instrument to which it is a party or by which
it or any other instrument to which it is a party or by which it or any of its
property may be bound; the consummation of the Conversion, the execution,
delivery and performance of this Agreement and the consummation of the
transactions herein contemplated have been duly and validly authorized by all
necessary corporate action on the part of the Company and the Association and
this Agreement has been validly executed and delivered by the Company and the
Association and is the valid, legal and binding Agreement of the Company and the
Association enforceable in accordance with its terms, except as the
enforceability thereof may be limited by (i) bankruptcy, insolvency,
reorganization, moratorium, conservatorship, receivership or other similar laws
now or hereafter in effect relating to or affecting the enforcement of
creditors' rights generally or the rights of creditors of Federal savings
associations and their holding companies, (ii) general equitable principles,
(iii) laws relating to the safety and soundness of insured depository
institutions, and (iv) applicable law or public policy with respect to the
indemnification and/or contribution provisions contained herein, and
except that no representation or warranty need
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be made as to the effect or availability of equitable remedies or injunctive
relief (regardless of whether such enforceability is considered in a
proceeding in equity or at law). The consummation of the transaction herein
contemplated will not: (i) conflict with or constitute a breach of, or default
under, the articles of incorporation and bylaws of the Company or the charter
and bylaws of the Association (in either mutual or capital stock form), or
any material contract, lease or other instrument to which the Company or the
Association is a party, or any applicable law, rule, regulation or order;
(ii) violate any authorization, approval, judgement, decree, order, statute,
rule or regulation applicable to the Company or the Association, except for
such violation which would not have a material adverse effect on the financial
condition and results of operations of the Company and the Association on a
consolidated basis; or (iii) with the exception of the liquidation account
established in the Conversion, result in the creation of any material lien,
charge or encumbrance upon any property of the Company or the Association.
(s) No default exists, and no event has occurred which with notice or
lapse of time, or both, would constitute a default on the part of the Company,
the Association or Dime, in the due performance and observance of any term,
covenant or condition of any indenture, mortgage, deed of trust, note, bank loan
or credit agreement or any other instrument of agreement to which the Company,
the Association or Dime is a party or by which any of them or any of their
property is bound or affected except such defaults which would not have a
material adverse effect on the financial condition or results of operations of
the Company, the Association and Dime on a consolidated basis; such agreements
are in full force and effect; and no other party to any such agreements has
instituted or, to the best knowledge of the Company, the Association and Dime,
threatened any action or proceeding wherein the Company, the Association or Dime
would be alleged to be in default thereunder under circumstances where such
action or proceeding, if determined adversely to the Company, the Association or
Dime would have a material adverse effect on the Company, the Association and
Dime, taken as a whole.
(t) Upon consummation of the Conversion, the authorized, issued and
outstanding equity capital of the Company will be within the range set forth in
the Prospectus under the caption "Capitalization," and no shares of Common Stock
have been or will be issued and outstanding prior to the Closing Date referred
to in Section 2; the Shares will have been duly and validly authorized for
issuance and, when issued and delivered by the Company pursuant to the Plan
against payment of the consideration calculated as set forth in the Plan and in
the Prospectus, will be duly and validly issued, fully paid and non-assessable;
no preemptive rights exist with respect to the Shares; and the terms and
provisions of the Shares will conform in all material respects to the
description thereof contained in the Registration Statement and the Prospectus.
To the best knowledge of the Company and the Association, upon the issuance of
the Shares, good title to the Shares will be transferred from the Company to the
purchasers thereof against payment therefor, subject to such claims as may be
asserted against the purchasers thereof by third-party claimants.
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(u) No approval of any regulatory or supervisory or other public
authority is required in connection with the execution and delivery of this
Agreement or the issuance of the Shares, except for the approval of the
Commission, the OTS and any necessary qualification, notification, registration
or exemption under the securities or blue sky laws of the various states in
which the Shares are to be offered, and except as may be required under the
rules and regulations of the NASD and/or the Nasdaq National Market.
(v) KPMG Peat Marwick, LLP, which has certified the financial statements
of the Association included in the Prospectus as of June 30, 1996 and 1995 and
for each of the years in the three-year period ended June 30, 1996, has advised
the Company and the Association in writing that they are, with respect to the
Company and the Association, independent public accountants within the meaning
of the Code of Professional Ethics of the American Institute of Certified Public
Accountants and Title 12 of the Code of Federal Regulations and Section
571.2(c)(3).
(v) Xxxxxx & Company, Inc. which has prepared the Association's
Conversion Valuation Appraisal Report as of September 6, 1996 (as amended or
supplemented, if so amended or supplemented) (the "Appraisal"), has advised the
Company in writing that it is independent of the Company and the Association
within the meaning of the Conversion Regulations.
(w) The Company and the Association have timely filed all required
federal, state and local tax returns; the Company and the Association have paid
all taxes that have become due and payable in respect of such returns, except
where permitted to be extended; to the best knowledge of the Association
adequate reserves have been made for similar future tax liabilities and no
deficiency has been asserted with respect thereto by any taxing authority.
(x) The Company and the Association are in compliance in all material
respects with the applicable financial record-keeping and reporting requirements
of the Currency and Foreign Transactions Reporting Act of 1970, as amended, and
the regulations and rules thereunder.
(y) To the knowledge of the Company and the Association, neither the
Company, the Association nor employees of the Company or the Association have
made any payment of funds of the Company or the Association as a loan for the
purchase of the Shares.
(z) Prior to the Conversion, the Association was not authorized to issue
shares of capital stock and neither the Company nor the Association has: (i)
issued any securities within the last 18 months (except for notes to evidence
other bank loans and reverse repurchase agreements or other liabilities in the
ordinary course of business or as described in the Prospectus); (ii) had any
material dealings within the 12 months prior to the date hereof with any member
of the NASD, or any person related to or associated with such member, other than
discussions and meetings relating to the proposed Offering (and the
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offering related to a proposed mutual holding company reorganization which was
terminated prior to consummation) and routine purchases and sales of United
States government and agency securities; (iii) entered into a financial or
management consulting agreement except as contemplated hereunder and except for
the Letter Agreement set forth in Exhibit A; and (iv) engaged any intermediary
between Xxxx and the Company and the Association in connection with the offering
of the Shares, and no person is being compensated in any manner for such
service.
(aa) The Company and the Association have not relied upon Xxxx or Xxxx'x
counsel for any legal, tax or accounting advice in connection with the
Conversion.
(bb) The Company is not required to be registered under the Investment
Company Act of 1940, as amended.
Any certificates signed by an officer of the Company or the Association
pursuant to the conditions of this Agreement and delivered to Xxxx or its
counsel that refers to this Agreement shall be deemed to be a representation and
warranty by the Company or the Association to Xxxx as to the matters covered
thereby with the same effect as if such representation and warranty were set
forth herein.
SECTION 5. REPRESENTATIONS AND WARRANTIES OF XXXX.
(a) Xxxx represents and warrants to the Company and the Association
that:
(i) Xxxx is a corporation and is validly existing in good
standing under the laws of the State of Ohio with full power and authority to
provide the services to be furnished to the Association and the Company
hereunder.
(ii) The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby have been duly and validly
authorized by all necessary action on the part of Xxxx, and this Agreement has
been duly and validly executed and delivered by Xxxx and is the legal, valid and
binding agreement of Xxxx, enforceable in accordance with its terms.
(iii) Each of Xxxx and its employees, agents and representatives
who shall perform any of the services hereunder shall be duly authorized and
empowered, and shall have all licenses, approvals and permits necessary to
perform such services.
(iv) The execution and delivery of this Agreement by Xxxx, the
consummation of the transactions contemplated hereby and compliance with the
terms and provisions hereof will not conflict with, or result in a breach of,
any of the terms, provisions or conditions of, or constitute a default (or event
which with notice or lapse of time or both would constitute a default) under,
the articles of incorporation of Xxxx or any agreement,
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indenture or other instrument to which Xxxx is a party or by which it or its
property is bound.
(v) No approval of any regulatory or supervisory or other public
authority is required in connection with Xxxx'x execution and delivery of this
Agreement, except as may have been received.
(vi) There is no suit or proceeding or charge or action before or
by any court, regulatory authority or government agency or body or, to the
knowledge of Xxxx, pending or threatened, which might materially adversely
affect Xxxx'x performance under this Agreement.
SECTION 5.1 COVENANTS OF THE COMPANY AND THE ASSOCIATION. The Company
and the Association hereby jointly and severally covenant with Xxxx as follows:
(a) The Company has filed the Registration Statement with the
Commission. The Company will not, at any time after the date the Registration
Statement is declared effective, file any amendment or supplement to the
Registration Statement without providing Xxxx and its counsel an opportunity to
review such amendment or supplement or file any amendment or supplement to which
amendment or supplement Xxxx or its counsel shall reasonably object.
(b) The Association has filed the Conversion Application with the OTS.
The Association will not, at any time after the Conversion Application is
approved by the OTS, file any amendment or supplement to such Conversion
Application without providing Xxxx and its counsel an opportunity to review such
amendment or supplement or file any amendment or supplement to which amendment
or supplement Xxxx or its counsel shall reasonably object.
(c) The Company will not, at any time before the Holding Company
Application is approved by the OTS, file any amendment or supplement to such
Holding Company Application without providing Xxxx and its counsel an
opportunity to review the nonconfidential portions of such amendment or
supplement or file any amendment or supplement to which amendment or supplement
Xxxx or its counsel shall reasonably object.
(d) The Company and the Association will use their best efforts to cause
any post-effective amendment to the Registration Statement to be declared
effective by the Commission and any post-effective amendment to the Conversion
Application to be approved by the OTS and will immediately upon receipt of any
information concerning the events listed below notify Xxxx: (i) when the
Registration Statement, as amended, has become effective; (ii) when the
Conversion Application, as amended, has been approved by the OTS; (iii) when the
Holding Company Application, as amended, has been approved by he OTS; (iv) of
any comments from the Commission, the OTS or any other governmental entity with
respect to the Conversion or the transactions contemplated by this Agreement;
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(v) of the request by the Commission, the OTS or any other governmental entity
for any amendment or supplement to the Registration Statement, the Conversion
Application or the Holding Company Application or for additional information;
(vi) of the issuance by the commission, the OTS or any other governmental entity
of any order or other action suspending the Offering or the use of the
Registration Statement or the Prospectus or any other filing of the Company or
the Association under the Conversion Regulations, or other applicable law, or
the threat of any such action; (vii) the issuance by the Commission, the OTS or
any state authority of any stop order suspending the effectiveness of the
Registration Statement or the approval of the Conversion Application or Holding
Company Application, or of the initiation or threat of initiation or threat of
any proceedings for any such purpose; or (viii) of the occurrence of any event
mentioned in paragraph (h) below. The Company and the Association will make
every reasonable effort (i) to prevent the issuance by the Commission, the OTS
or any state authority of any such order and, if any such order shall at any
time be issued, (ii) to obtain the lifting thereof at the earliest possible
time.
(e) The Company and the Association will deliver to Xxxx and to its
counsel two conformed copies of the Registration Statement, the Conversion
Application and the Holding Company Application, as originally filed and of each
amendment or supplement thereto, including all exhibits. Further, the Company
and the Association will deliver such additional copies of the foregoing
documents to counsel to Xxxx as may be required for any NASD and blue sky
filings.
(f) The Company and the Association will furnish to Xxxx, from time to
time during the period when the Prospectus (or any later prospectus related to
this offering) is required to be delivered under the 1933 Act or the Securities
Exchange Act of 1934, (the "1934 Act"), such number of copies of such Prospectus
(as amended or supplemented) as Xxxx may reasonably request for the purposes
contemplated by the 1933 Act, the 1933 Act Regulations, the 1934 Act or the
rules and regulations promulgated under the 1934 Act (the "1934 Act
Regulations"). The Company authorizes Xxxx to use the Prospectus (as amended or
supplemented, if amended or supplemented) in any lawful manner contemplated by
the Plan in connection with the sale of the Shares by Xxxx.
(g) The Company and the Association will comply with any and all
material terms, conditions, requirements and provisions with respect to the
Conversion and the transactions contemplated thereby imposed by the Commission,
the OTS, the Conversion Regulations or the SLHCA, and by the 1933 Act, the 1933
Act Regulations, the 1934 Act and the 1934 Act Regulations to be complied with
prior to or subsequent to the Closing Date and when the Prospectus is required
to be delivered, the Company and the Association will comply, at their own
expense, with all material requirements imposed upon them by the Commission, the
OTS, the Conversion Regulations or the SLHCA, and by the 1993 Act, the 1933 Act
Regulations, the 1934 Act and the 1934 Act Regulations, including, without
limitation, Rule 10b-5 under the 1934 Act, in each case as from time to time in
force, so far as necessary to permit the continuance of sales or dealing in
shares of Common Stock during such period in accordance with the provisions
hereof and the Prospectus.
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(h) If, at any time during the period when the Prospectus relating to
the Shares is required to be delivered, any event relating to or affecting the
Company, the Association or Dime shall occur, as a result of which it is
necessary or appropriate, in the opinion of counsel for the Company and the
Association to amend or supplement the Registration Statement or Prospectus in
order to make the Registration Statement or Prospectus not misleading in light
of the circumstances existing at the time the Prospectus is delivered to a
purchaser, the Company and the Association will, at their expense, prepare and
file with the Commission and the OTS and furnish to Xxxx a reasonable number of
copies of an amendment or amendments of, or a supplement or supplements to, the
Registration Statement and Prospectus (in form and substance satisfactory to
Xxxx and its counsel after a reasonable time for review) which will amend or
supplement the Registration Statement and Prospectus so that as amended or
supplemented it will not contain an untrue statement of a material fact or omit
to state a material fact necessary in order to make the statements therein, in
light of the circumstances existing at the time the Prospectus is delivered to a
purchaser, not misleading. For the purpose of this Agreement, the Company and
the Association each will timely furnish to Xxxx such information with respect
to itself as Xxxx may from time to time reasonably request.
(i) At the Closing Date referred to in Section 2, the Plan will have
been adopted by the Boards of Directors of both the Company and the Association
and the offer and sale of the Shares 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 Company or the Association by the OTS, the Commission or any other
regulatory authority and in the manner described in the Prospectus.
(j) Upon completion of the sale by the Company of the Shares
contemplated by the Prospectus, (i) the Association will be converted pursuant
to the Plan to a federally chartered stock savings association, (ii) all of the
authorized and outstanding capital stock of the Association will be owned by the
Company, and (iii) the Company will have no direct subsidiaries other than the
Association. The Conversion will have been effected in all material respects in
accordance with all applicable statutes, regulations, decisions and orders; and,
except with respect to the filing of certain post-sale, post-Conversion reports,
and documents in compliance with the 1933 Act Regulations or the OTS's letters
of approval, all terms, conditions, requirements and provisions with respect to
the Conversion (except those that are conditions subsequent) imposed by the
Commission and the OTS, if any, will have been complied with by the Company and
the Association in all material respects or appropriate waivers will have been
obtained and all material notice and waiting periods will have been satisfied,
waived or elapsed.
(k) The Company and the Association will take all necessary actions, in
cooperation with Xxxx, and furnish to whomever Xxxx may direct, such information
as may be required to qualify or register the Shares for offering and sale by
the Company or to exempt such Shares from registration, or to exempt the Company
as a broker-dealer and its officers,
-15-
directors and employees as broker-dealers or agents under the applicable
securities or blue sky laws of such jurisdictions in which the Shares are to be
offered and sold as Xxxx and the Company and the Association may reasonably
agree upon; provided, however, that the Company shall not be obligated to file
any general consent to service of process or to qualify to do business in any
jurisdiction in which it is not so qualified. In each jurisdiction where any of
the Shares shall have been qualified or registered as above provided, the
Company will make and file such statements and reports in each fiscal period as
are or may be required by the laws of such jurisdiction.
(l) The liquidation account for the benefit of Eligible Account Holders
and Supplemental Eligible Account Holders will be duly established and
maintained in accordance with the requirements of the OTS, and such Eligible
Account Holders and Supplemental Eligible Account Holders who continue to
maintain their savings accounts in the Association will have an inchoate
interest in their pro rata portion of the liquidation account which shall have a
priority superior to that of the holders of shares of Common Stock in the event
of a complete liquidation of the Association.
(m) The Company and the Association will not sell or issue, contract to
sell or otherwise dispose of, for a period of 90 days after the Closing Date,
without Xxxx'x prior written consent, any shares of Common Stock other than the
Shares or other than in connection with any plan or arrangement described in the
Prospectus.
(n) The Company shall register its Common Stock under Section 12(g) of
the 1934 Act concurrent with the Offering pursuant to the Plan and shall request
that such registration be effective upon completion of the Conversion. The
Company shall maintain the effectiveness of such registration for not less than
three (3) years or such shorter period as may be required by the OTS.
(o) During the period during which the Company's Common Stock is
registered under the 1934 Act or for three years from the date hereof, whichever
period is greater, the Company will furnish to its stockholders as soon as
practicable after the end of each fiscal year an annual report of the Company
(including a consolidated balance sheet and statements of consolidated income,
stockholders' equity and cash flows of the Company and its subsidiaries as at
the end of and for such year, certified by independent public accountants in
accordance with Regulation S-X under the 1933 Act and the 1934 Act).
(p) During the period of three years from the date hereof, the Company
will furnish to Xxxx: (i) as soon as practicable after such information is
publicly available, a copy of each report of the Company furnished to or filed
with the Commission under the 1934 Act or any national securities exchange or
system on which any class of securities of the Company is listed or quoted
(including, but not limited to, reports on Forms 10-K, 10-Q and 8-K and all
proxy statements and annual reports to stockholders), (ii) a copy of each other
non-confidential report of the Company mailed to its stockholders or filed with
the Commission, the OTS or any other supervisory or regulatory authority or any
national
-16-
securities exchange or system on which any class of securities of the Company is
listed or quoted, each press release and material news items and additional
documents and information with respect to the Company or the Association as Xxxx
may reasonably request; and (iii) from time to time, such other nonconfidential
information concerning the Company or the Association as Xxxx may reasonably
request.
(q) The Company and the Association will use the net proceeds from the
sale of the Shares in the manner set forth in the Prospectus under the caption
"Use of Proceeds."
(r) Other than as permitted by the Conversion Regulations, the SLHCA,
the 1933 Act, the 1933 Act Regulations, and the laws of any state in which the
Shares are registered or qualified for sale or exempt from registration, neither
the Company nor the Association will distribute any prospectus, offering
circular or other offering material in connection with the offer and sale of the
Shares.
(s) The Company will use its best efforts to (i) encourage and assist
two market makers to establish and maintain a market for the Shares and (ii)
list the Shares on a national or regional securities exchange or on the Nasdaq
National Market effective on or prior to the Closing Date.
(t) The Association will maintain appropriate arrangements for
depositing all funds received from persons mailing subscriptions for or orders
to purchase Shares in the Offering on an interest bearing basis at the rate
described in the Prospectus until the Closing Date and satisfaction of all
conditions precedent to the release of the Association's obligation to refund
payments received from persons subscribing for or ordering Shares in the
Offering in accordance with the Plan and as described in the Prospectus or until
refunds of such funds have been made to the persons entitled thereto or
withdrawal authorizations cancelled in accordance with the Plan and as described
in the Prospectus. The Association will maintain such records of all funds
received to permit the funds of each subscriber to be separately insured by the
FDIC (to the maximum extent allowable) and to enable the Association to make the
appropriate refunds of such funds in the event that such refunds are required to
be made in accordance with the Plan and as described in the Prospectus.
(u) The Company will promptly take all necessary action to register as a
savings and loan holding company under the SLHCA within 90 days of the Closing
Date.
(v) The Company and the Association will take such actions and furnish
such information as are reasonably requested by Xxxx in order for Xxxx to ensure
compliance with the NASD's "Interpretation Relating to Free Riding and
Withholding."
(w) The Association will not amend the Plan of Conversion without
notifying Xxxx prior thereto.
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(x) The Company shall assist Xxxx, if necessary, in connection with the
allocation of the Shares in the event of an oversubscription and shall provide
Xxxx with any information necessary in allocating the Shares in such event and
such information shall be accurate and reliable.
(y) Prior to the Closing Date, the Company and the Association will
inform Xxxx of any event or circumstances of which it is aware as a result of
which the Registration Statement, the Conversion Application and/or Prospectus,
as then amended or supplemented, would contain an untrue statement of a material
fact or omit to state a material fact necessary in order to make the statements
therein not misleading.
SECTION 5.2 COVENANTS OF XXXX. Xxxx hereby covenants with the Company
and the Association as follows:
(a) During the period when the Prospectus is used, Xxxx will comply, in
all material respects and at its own expense, with all requirements imposed upon
it by the OTS and the NASD and, to the extent applicable, by the 1933 Act and
the 1934 Act and the rules and regulations promulgated thereunder.
(b) Xxxx shall return unused copies of the Prospectus, if any, to the
Company promptly upon the completion of the Conversion.
(c) Xxxx will distribute copies of the Prospectus and Sales Information
in connection with the sales of the common stock only in accordance with NASD
and OTS regulations, the 1933 Act and the rules and regulations promulgated
thereunder.
(d) Xxxx shall assist the Association in maintaining arrangements for
the deposit of funds and the making of refunds, as appropriate (as described in
Section 5.1(r)), and shall perform the allocation of shares in the event of an
oversubscription, in conformance with the Plan and applicable regulations and
based upon information furnished to Xxxx by the Association (as described in
Section 5.1(x)).
SECTION 6. PAYMENT OF EXPENSES. Whether or not the Conversion is
completed or the sale of the Shares by the Company is consummated, the Company
and the Association jointly and severally agree to pay or reimburse Xxxx for:
(a) all filing fees in connection with all filings with the NASD; (b) any stock
issue or transfer taxes which may be payable with respect to the sale of the
Shares; (c) all reasonable expenses of the Conversion, including but not limited
to, the Company's and the Association's attorneys' fees, transfer agent,
registrar and other agent charges, fees relating to auditing and accounting or
other advisors and costs of printing all documents necessary in connection with
the Conversion; and (d) all reasonable out-of-pocket expenses incurred by Xxxx.
Such out-of-pocket expenses include, but are not limited to, travel,
communications and postage. However, such out-of-pocket expenses do not include
expenses incurred with respect to the matters set forth in (a) and (b) above. In
the event the Company is unable to sell a minimum of
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1,666,000 Shares or the Conversion is terminated or otherwise abandoned, the
Company and the Association shall reimburse Xxxx in accordance with Section 2
hereof.
SECTION 7. CONDITIONS TO XXXX'X OBLIGATIONS. Xxxx'x obligations
hereunder, as to the Shares to be issued at the Closing Date, are subject, to
the extent not waived by Xxxx, to the condition that all representations and
warranties of the Company and the Association herein are, at and as of the
commencement of the Offering and at and as of the Closing Date, true and correct
in all material respects, the condition that the Company and the Association
shall have performed all of their obligations hereunder to be performed on or
before such dates, and to the following further conditions:
(a) At the Closing Date, the Company and the Association shall have
conducted the Conversion in all material respects in accordance with the Plan,
the Conversion Regulations, and all other applicable
laws, regulations, decisions and orders, including all terms, conditions,
requirements and provisions precedent to the Conversion imposed upon them by the
OTS.
(b) The Registration Statement shall have been declared effective by the
Commission, the Conversion Application approved by the OTS, and the Holding
Company Application approved by the OTS not later than 5:30 p.m. on the date of
this Agreement, or with Xxxx'x consent at a later time and date; and at the
Closing Date, no stop order suspending the effectiveness of the Registration
Statement shall have been issued under the 1933 Act or proceedings therefore
initiated or threatened by the Commission, or any state authority and no order
or other action suspending the authorization of the Prospectus or the
consummation of the Conversion shall have been issued or proceedings therefore
initiated or, to the Company's or the Association's knowledge threatened by the
Commission, the OTS or any state authority.
(c) At the Closing Date, Xxxx shall have received:
(1) The favorable opinion, dated as of the Closing Date and
addressed to Xxxx and for its benefit, of Breyer & Aguggia, special counsel for
the Company and the Association, in form and substance to the effect that:
(i) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State of
Delaware and has corporate power and authority to own, lease and operate its
properties and to conduct its business as described in the Registration
Statement and the Prospectus.
(ii) The Association is organized and is validly existing
as a federally chartered savings association in mutual form of organization and
upon the Conversion will become a duly organized and validly existing federally
chartered savings association in capital stock form of organization, in both
instances duly authorized to conduct its business and own its property as
described in the Registration Statement and Prospectus. All of the
-19-
outstanding capital stock of the Association will be duly authorized and, upon
payment therefor, will be validly issued, fully paid and non-assessable and will
be owned by the Company, free and clear of any liens, encumbrances, claims or
other restrictions.
(iii) The Association is a member of the FHLB-Seattle.
The Association is an insured depository institution under the provisions of
Section 4(a) of the Federal Deposit Insurance Act, as amended, and no
proceedings for the termination or revocation of such insurance are pending or,
to such counsel's Actual Knowledge, threatened; the description of the
liquidation account as set forth in the Prospectus under the caption "The
Conversion-Liquidation Rights" to the extent that such information constitutes
matters of law and legal conclusions has been reviewed by such counsel and is
accurate in all material respects.
(iv) Upon consummation of the Conversion, the authorized,
issued and outstanding capital stock of the Company will be within the range set
forth in the Prospectus under the caption "Capitalization," and except for
shares issued upon incorporation of the Company, no shares of Common Stock have
been issued prior to the Closing Date; at the time of the Conversion, the Shares
subscribed for pursuant to the Offering will have been duly and validly
authorized for issuance, and when issued and delivered by the Company pursuant
to the Plan against payment of the consideration calculated as set forth in the
Plan and the Prospectus, will be duly and validly issued and fully paid and
non-assessable; except for subscription rights granted pursuant to the Plan the
issuance of the Shares is not subject to preemptive rights and the terms and
provisions of the Shares conform in all material respects to the description
thereof contained in the Prospectus. To such counsel's Actual Knowledge, upon
the issuance of the Shares, good title to the Shares will be transferred from
the Company to the purchasers thereof against payment therefor, subject to such
claims as may be asserted against the purchasers thereof by third-party
claimants.
(v) The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby have been duly and validly
authorized by all necessary action on the part of the Company and the
Association; and this Agreement is a valid and binding obligation of the Company
and the Association, enforceable in accordance with its terms, except as the
enforceability thereof may be limited by (i) bankruptcy, insolvency, moratorium,
reorganization, conservatorship, receivership or other similar laws now or
hereafter in effect relating to or affecting the enforcement of creditors'
rights generally or the rights of creditors of savings associations and their
holding companies, (ii) general equitable principles, (iii) laws relating to the
safety and soundness of insured depository institutions, and (iv) applicable law
or public policy with respect to the indemnification and/or contribution
provisions contained herein, and except that no opinion need to be expressed as
to the effect or availability of equitable remedies or injunctive relief
(regardless of whether such enforceability is considered in a proceeding in
equity or at law).
(vi) The Conversion Application has been approved by the
OTS and the Prospectus has been authorized for use by the OTS. The OTS has
approved the Holding
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Company Application and issued its letter of approval under the SLHCA, and the
purchase by the Company of all of the issued and outstanding capital stock of
the Association has been authorized by the OTS and no action has been taken, and
to such counsel's Actual Knowledge, none is pending or threatened, to revoke any
such authorization or approval.
(vii) The Plan has been duly adopted by the required vote
of the directors of the Company and the Association and, based upon the
certificate of the inspector of election, by the members of the Association.
(viii) Subject to the satisfaction of the conditions to
the OTS approval of the Conversion, no further approval, registration,
authorization, consent or other order of or notice to any federal agency is
required in connection with the execution and delivery of this Agreement, the
issuance of the Shares and the consummation of the Conversion, except as may be
required under the securities or blue sky laws of various jurisdictions (as to
which no opinion need be rendered) and except as may be required under the rules
and regulations of the NASD and/or the Nasdaq National Market (as to which no
opinion need be
rendered).
(ix) The Registration Statement is effective under the
1933 Act and no stop order suspending the effectiveness has been issued under
the 1933 Act or proceedings therefor initiated or, to such counsel's Actual
Knowledge, threatened by the Commission.
(x) At the time the Conversion Application, including the
Prospectus contained therein, was approved by the OTS, the Conversion
Application, including the Prospectus contained therein, complied as to form in
all material respects with the requirements of the Home Owners' Loan Act, as
amended ("HOLA") and all applicable rules and regulations promulgated
thereunder, including the Conversion Regulations (other than the financial
statements, the notes thereto, and other tabular, financial, statistical and
appraisal data included therein, as to which no opinion need be rendered).
(xi) At the time that the Registration Statement became
effective, (i) the Registration Statement (as amended or supplemented, if so
amended or supplemented) (other than the financial statements, the notes thereto
and other tabular, financial, statistical and appraisal data included therein,
as to which no opinion need be rendered) complied as to form in all material
respects with the requirements of the 1933 Act and the 1933 Act Regulations, and
(ii) the Prospectus (other than the financial statements, the notes thereto and
other tabular, financial, statistical and appraisal data included therein, as to
which no opinion need be rendered) complied as to form in all material respects
with the requirements of the 1933 Act and the 1933 Act Regulations.
(xii) The terms and provisions of the Shares of the
Company conform, in all material respects, to the description thereof contained
in the Registration Statement and Prospectus, and the form of certificate used
to evidence the Shares is in due and proper form.
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(xiii) There are no legal or governmental proceedings
pending or to such counsel's Actual Knowledge, threatened which are required to
be disclosed in the Registration Statement and Prospectus, other than those
disclosed therein, and to such counsel's Actual Knowledge, all pending legal and
governmental proceedings to which the Company, the Association or Dime is a
party or of which any of their property is the subject, which are not described
in the Registration Statement and the Prospectus, including ordinary routine
litigation incidental to the Company's, the Association's or Dime's business,
are, considered in the aggregate, not material.
(xiv) 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. 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.
(xv) To such counsel's Actual Knowledge, the Company and
the Association have conducted the Conversion, in all material respects, in
accordance with all applicable requirements of the Plan the Conversion
Regulations and the HOLA and the Plan complies in all material respects with,
the Conversion Regulations and the HOLA, and all decisions and orders issued
thereunder (except where a written waiver has been received); no order has been
issued by the OTS, the Commission or any state authority to suspend the Offering
or the use of the Prospectus, and no action for such purposes has been
instituted or, to such counsel's Actual Knowledge, threatened by the OTS or the
Commission or any state authority and, to such counsel's Actual Knowledge, no
person has sought to obtain regulatory or judicial review of the final action of
the OTS approving the Plan, the Conversion Application, the Holding Company
Application or the Prospectus.
(xvi) To such counsel's Actual Knowledge, the Company,
the Association and Dime have obtained all material federal licenses, permits
and other governmental authorizations currently required under the HOLA and the
Federal Deposit Insurance Act and all applicable rules and regulations
promulgated thereunder for the conduct of their businesses and to such counsel's
Actual Knowledge all such licenses, permits and other governmental
authorizations are in full force and effect, and the Company, the Association
and Dime are in all material respects complying therewith, except whether the
failure to have such licenses, permits and other governmental authorizations or
the failure to be in compliance therewith would not have a material adverse
affect on the business or operations of the Association, the Company and Dime,
taken as a whole.
(xvii) To such counsel's Actual Knowledge, neither the
Company, nor the Association is in violation of its articles of incorporation,
bylaws, or charter, as applicable, or, to such counsel's Actual Knowledge, in
default or violation of any obligation, agreement, covenant or condition
contained in any material contract, indenture, mortgage,
-22-
loan agreement, note, lease or other instrument to which it is a party or by
which it or its property may be bound except for such defaults or violations
which would not have a material adverse impact on the financial condition or
results of operations of the Company, the Association and Dime on a consolidated
basis; to such counsel's Actual Knowledge, the execution and delivery of this
Agreement, the occurrence of the obligations herein set forth and the
consummation of the transactions contemplated herein will not conflict with or
constitute a breach of, or default under, or result in the creation or
imposition of any lien, charge or encumbrance upon any property or assets of the
Company or the Association pursuant to any material contract, indenture,
mortgage, loan agreement, note, lease or other instrument to which the Company
or the Association is a party or by which any of them may be bound, or to which
any of the property or assets of the Company or the Association is subject
(other than the establishment of a liquidation account), and such action will
not result in any violation of the provisions of the articles of incorporation,
bylaws or charter, as applicable, of the Company or the Association or any
applicable federal law, act, regulation (except that no opinion need be
rendered with respect to the securities or blue sky laws of various
jurisdictions or the rules and regulations of the NASD and/or the Nasdaq
National Market) or order or court order, writ, injunction or decree naming
the Company or the Association.
(xviii) The Company' articles of incorporation and bylaws
comply in all material respects with the General Corporation Law of the State of
Delaware ("Delaware Law"). The Association's charter and bylaws in mutual form
and, upon the completion of the Conversion, in stock form, comply in all
material respects with the Home Owners' Loan Act and the rules and regulations
of the OTS.
(xix) To such counsel's Actual Knowledge, neither the
Company nor the Association is in violation of any directive from the OTS to
make any material change in the method of conducting its respective business.
(xx) The information in the Prospectus under the captions
"Regulation," "The Conversion," "Restrictions on Acquisition of the Holding
Company" and "Description of Capital Stock of the Holding Company," to the
extent that such information constitutes matters of law, summaries of legal
matters, documents or proceedings, or legal conclusions, has been reviewed by
such counsel and is correct in all material respects. The description of the
Conversion process under the caption "The Conversion" in the Prospectus has been
reviewed by such counsel and is in all material respects correct. The discussion
of statutes or regulations described or referred to in the Prospectus are
accurate summaries and fairly present the information required to be shown. The
information regarding the federal tax opinion under the caption "The
Conversion-Tax Effects" has been reviewed by such counsel and constitutes a
correct summary of the opinion rendered by such counsel to the Company and the
Association with respect to such matters.
In giving such opinion, such counsel may rely as to all
matters of fact on certificates of officers or directors of the Company and the
Association and certificates
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of public officials. Such counsel's opinion shall be limited to matters governed
by federal laws and by Delaware Law. With respect to matters involving the
application of Montana law, such counsel may rely, to the extent it deems proper
and as specified in its opinion, upon the opinion of local counsel (providing
that such counsel states that it believes Xxxx are justified in relying upon
such specified opinion or opinions. The opinion of Breyer & Aguggia shall be
governed by and subject to the qualifications contained in the Legal Opinion
Accord ("Accord") of the American Bar Association Section of Business Law
(1991). The term "Actual Knowledge" as used herein shall have the meaning set
forth in the Accord. For purposes of such opinion, no proceedings shall be
deemed to be pending, no order or stop order shall be deemed to be issued, and
no action shall be deemed to be instituted unless, in each case, a director or
executive officer of the Company or the Association shall have received a copy
of such proceedings, order, stop order or action. In addition, 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. Such counsel may assume that any agreement is
the valid and binding obligation of any parties to such agreement other than the
Company, the Association or Dime.
In addition, such counsel shall provide a letter stating that during the
preparation of the Conversion Application, the Registration Statement and the
Prospectus, they participated in conferences with certain officers of, the
independent public and internal accountants for, and other representatives of
the Company and the Association, at which conferences the contents of the
Conversion Application, the Registration Statement and the Prospectus and
related matters were discussed and, while such counsel has not confirmed the
accuracy or completeness of or otherwise verified the information contained in
the Conversion Application, the Registration Statement or the Prospectus, and
does not assume any responsibility for such information, based upon such
conferences and a review of documents deemed relevant for the purpose of
rendering their opinion (relying as to materiality as to factual matters on
certificates of officers and other factual representations by the Company and
the Association), nothing has come to their attention that would lead them to
believe that the Conversion Application, the Registration Statement, the
Prospectus, or any amendment or supplement thereto (other than the financial
statements, the notes thereto, and other tabular, financial, statistical and
appraisal data included therein as to which no statement need be made)
contained, as of the date of approval or effectiveness, as the case may be,
and as of the Closing Date, an untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading.
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(2) The favorable opinion, dated as of the Closing Date
and addressed to Xxxx and for their benefit, of Xxxxxxx & Xxxxxxxxxxxx P.C., the
Association's local counsel, in form and substance to the effect that, to the
best of such counsel's knowledge, (i) the Company and the Association have good
and marketable title to all properties and assets which are material to the
business of the Company and the Association and to those properties and assets
described in the Registration Statement and Prospectus, as owned by them, free
and clear of all liens, charges, encumbrances or restrictions, except such as
are described in the Registration Statement and Prospectus, or are not material
in relation to the business of the Company and the Association considered as one
enterprise; (ii) all of the leases and subleases material to the business of the
Company and the Association under which the Company and the Association hold
properties, as described in the Registration Statement and Prospectus, ar in
full force and effect; (iii) the Association is duly qualified as a foreign
corporation to transact business and is in good standing in each jurisdiction in
which its ownership of property or leasing of property or the conduct of its
business requires such qualification, unless the failure to be so qualified in
one or more of such jurisdictions would not have a material adverse effect on
the condition, financial or otherwise, or the business, operations or income of
the Association; (iv) Dime's articles of incorporation and bylaws comply in all
material respects with Montana; (v) the information regarding the Oregon tax
opinion under the caption "The Conversion Effects of Conversion to Stock Form on
Deposits and Borrowers of the Association-Tax Effects" has been reviewed by such
counsel and constitutes a correct summary of the opinion rendered by Xxxxxxx &
Xxxxxxxxxxxx, P.C. to the Company and the Association with respect to such
matters; (vi) Dime has been duly incorporated and is validly existing as a
corporation under the laws of the State of Montana and has corporate power and
authority to own, lease and operate its properties and conduct its business as
described in the Registration Statement and the Prospectus; (vii) subject to the
satisfaction of the conditions to the OTS approval of the Conversion, no further
approval, registration, authorization, consent or other order of or notice to
any Montana regulatory agency is required in connection with the execution and
delivery of this Agreement, the issuance of the Shares and the consummation of
the Conversion, except as may be required under the securities or blue sky laws
of various jurisdictions (as to which no opinion need be rendered) and except as
may be required under the rules and regulations of the NASD and/or the Nasdaq
National Market (as to which no opinion need be rendered); (viii) to such
counsel's Actual Knowledge, the Company, the Association and Dime have obtained
all material Montana licenses, permits and other governmental authorizations
currently required for the conduct of their businesses and to such counsel's
Actual Knowledge all such licenses, permits and other governmental
authorizations are in full force and effect, and the Company, the Association
and Dime are in all material respects complying therewith, except whether the
failure to have such licenses, permits and other governmental authorizations or
the failure to be in compliance therewith would not have a material adverse
affect on the business or operations of the Association, the Company and Dime,
taken as a whole; and (ix) to such counsel's Actual Knowledge, Dime is not in
violation of its articles of incorporation or bylaws, or, to such counsel's
Actual Knowledge, in default or violation of any obligation, agreement, covenant
or condition contained in any material contract, indenture, mortgage, loan
agreement, note,
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lease or other instrument to which it is a party or by which it or its property
may be bound except for such defaults or violations which would not have a
material adverse impact on the financial condition or results of operations of
the Company, the Association and Dime on a consolidated basis.
(3) The favorable opinion, dated as of the Closing Date, of
Elias, Matz, Xxxxxxx & Xxxxxxx L.L.P., Xxxx'x counsel, with respect to such
matters as Xxxx may reasonably require. Such opinion may rely upon the opinions
of counsel to the Company and the Association, and as to matters of fact, upon
certificates of officers and directors of the Company and the Association
delivered pursuant hereto or as such counsel shall reasonably request.
(d) At the Closing Date, Xxxx shall receive a certificate of the Chief
Executive Officer and the Chief Financial Officer of the Company and a
certificate of the Chief Executive Officer and the Chief Financial Officer of
the Association, both dated as of such Closing Date, to the effect that: (i)
they have reviewed the Prospectus and, in their opinion, at the time the
Prospectus became authorized for final use, the Prospectus did not contain any
untrue statement of a material fact or omit to state a material fact necessary
in order to make the statements therein, in light of the circumstances under
which they were made, not misleading; (ii) since the date the Prospectus became
authorized for final use, no material adverse change in the condition, financial
or otherwise, or in the earnings, capital, properties or business of the
Company, the Association and Dime has occurred and, to their knowledge, no other
event has occurred, which should have been set forth in an amendment or
supplement to the Prospectus which has not been so set forth, and the conditions
set forth in this Section 7 have been satisfied; (iii) since the respective
dates as of which information is given in the Registration Statement and
Prospectus, there has been no material adverse change in the condition,
financial or otherwise, or in the earnings, capital or properties of the
Company, the Association or Dime, independently, or of the Company, the
Association and Dime considered as one enterprise, whether or not arising in the
ordinary course of business; (iv) the representations and warranties in Section
4 are true and correct with the same force and effect a though expressly made at
and as of the Closing Date; (v) the Company and the Association have complied in
all material respects with all agreements and satisfied all conditions on their
part to be performed or satisfied at or prior to the Closing Date and will
comply in all material respects with all obligations to be satisfied by them
after Conversion; (vi) no stop order suspending the effectiveness of the
Registration Statement has been initiated or, to the best knowledge of the
Company or the Association, threatened by the Commission or any state authority;
(vii) no order suspending the Offering, the Conversion, the acquisition of all
of the shares of the Association by the Company or the effectiveness of the
Prospectus has been issued and no proceedings for that purpose are pending or,
to the best knowledge of the Company or the Association, threatened by the OTS,
the Commission or any state authority; and (viii) to the best knowledge of the
Company or the Association, no person has sought to obtain review of the final
action of the OTS approving the Plan.
-26-
(e) Prior to and at the Closing Date: (i) in the
reasonable opinion of Xxxx, there shall have been no material adverse change in
the condition, financial or otherwise, or in the earnings or business of the
Association independently, or of the Company, the Association and Dime
considered as one enterprise, from that as of the latest dates as of which such
condition is set forth in the Prospectus other than transactions referred to or
contemplated therein; (iii) the Company or the Association shall not have
received from the OTS any direction (oral or written) to make any material
change in the method of conducting their business with which it has not complied
(which direction, if any, shall have been disclosed to Xxxx) or which materially
and adversely would affect the business, operations or financial condition or
income of the Company and the Association considered as one enterprise; (iv) the
Company, the Association and Dime shall not have been in material default (nor
shall an event have occurred which, with notice or lapse of time or both, would
constitute a default) under any material provision of any agreement or
instrument relating to any outstanding indebtedness; (v) no action, suit or
proceedings, at law or in equity or before or by any federal or state
commission, board or other administrative agency, shall be pending or, to the
knowledge of the Company, the Association or Dime, threatened against the
Company, the Association or Dime or affecting any of their properties wherein an
unfavorable decision, ruling or finding would materially and adversely affect
the business operations, financially condition or income of the Company, the
Association and Dime considered as one enterprise; and (vi) the Shares have been
qualified or registered for offering and sale or exempted therefore under the
securities or blue sky laws of the jurisdictions as Xxxx shall have requested
and as agreed to by the Company and the Association.
(f) Concurrently with the execution of this Agreement, Xxxx shall
receive a letter from KPMG Peat Marwick LLP. dated as of the date of the
Prospectus and addressed to Xxxx: (i) confirming that KPMG Peat Marwick LLP is a
firm of independent public accountants within the meaning of Rule 101 of the
Code of Professional Ethics of the American Institute of Certified Public
Accountants and applicable regulations of the OTS and stating in effect that in
KPMG Peat Marwick LLP's opinion the financial statements of the Association as
of June 30, 1995 and 1996 and for each of the three years in the period ended
June 30, 1996, as are included in the Prospectus and covered by its opinion
included therein, comply as to form in all material respects with the applicable
accounting requirements and related published rules and regulations of the OTS
and the 1933 Act; (ii) a statement from KPMG Peat Marwick LLP in effect that, on
the basis of certain agreed upon procedures (but not an audit in accordance with
generally accepted auditing standards) consisting of a reading of the latest
available unaudited interim consolidated financial statements of the Association
prepared by the Association, a reading of the minutes of the meetings of the
Board of Directors and members of the Association and consultations with
officers of the Association responsible for financial and accounting matters,
nothing came to their attention which caused them to believe that: (A) the
unaudited financial statements included in the Prospectus, are not in conformity
with the 1933 Act, applicable accounting requirements of the OTS and generally
accepted accounting principles applied on a basis substantially consistent with
that of the audited financial statements included in the
-27-
Prospectus; or (B) during the period from the date of the latest unaudited
consolidated financial statements included in the Prospectus to a specified date
not more than three business days prior to the date of the Prospectus, except as
has been described in the Prospectus, there was any material increase in
borrowings, other than normal deposit fluctuations, by the Association; or (C)
there was any decrease in consolidated net assets of the Association at the
date of such letter as compared with amounts shown in the latest unaudited
consolidated statement of condition included in the Prospectus; and (iii) a
statement from KPMG Peat Marwick LLP that, in addition to the audit referred
to in their opinion included in the Prospectus and the performance of
the procedures referred to in clause (ii) of this subsection (f), they have
compared with the general accounting records of the Association, which are
subject to the internal controls of the Association, the accounting system and
other data prepared by the Association, directly from such accounting records,
to the extent specified in such letter, such amounts and/or percentages set
forth in the Prospectus as Xxxx may reasonably request; and they have reported
on the results of such comparisons.
(g) At the Closing Date, Xxxx shall receive a letter from KPMG
Peat Marwick LLP dated the Closing Date, addressed to Xxxx, confirming the
statements made by them in the letter delivered by it pursuant to subsection (f)
of this Section 7, the "specified date" referred to in clause (ii) of subsection
(f) thereof to be a date specified in such letter, which shall not be more than
three business days prior to the Closing Date.
(h) At the Closing Date, Xxxx shall receive a letter from Xxxxxx
& Company, Inc., dated the date thereof and addressed to counsel for Xxxx, (i)
confirming that said firm is independent of the Company and the Association and
is experienced and expert in the area of corporate appraisals within the meaning
of Title 12 of the Code of Federal Regulations, Part 563b, (ii) stating in
effect that the Appraisal prepared by such firm complies in all material
respects with the applicable requirements of Title 12 of the Code of Federal
Regulations, and (iii) further stating that its opinion of the aggregate pro
forma market value of the Company and the Association expressed in its Appraisal
dated as of September 6, 1996, and most recently updated, remains in effect.
(i) The Company and the Association shall not have sustained
since the date of the latest audited financial statements included in the
Prospectus any material loss or interference with their businesses from fire,
explosion, flood or other calamity, whether or not covered by insurance, or from
any labor dispute or court or governmental action, order or decree, otherwise
than as set forth or contemplated in the Registration Statement and Prospectus.
(j) At or prior to the Closing Date, Xxxx shall receive: (i) a
copy of the letter from the OTS approving the Conversion Application and
authorizing the use of the Prospectus; (ii) a copy of the order from the
Commission declaring the Registration Statement effective; (iii) a certificate
from the OTS evidencing the existence of the Association; (iv) certificates of
good standing from the State of Delaware evidencing the
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good standing of the Company; (v) a certificate of good standing from the State
of Montana evidencing the good standing of Dime; (vi) a certificate from the
FDIC evidencing the Association's insurance of accounts; and (vii) a certificate
of the FHLB-Seattle evidencing the Association's membership thereof; (viii) a
copy of the letter from the OTS approving the Company's Holding Company
Application.
(k) As soon as available after the Closing Date, Xxxx shall
receive, upon request, a copy of the Association's federal stock charter.
(l) Subsequent to the date hereof, there shall not have occurred
any of the following: (i) a suspension or limitation in trading in securities
generally on the New York Stock Exchange or in the over-the-counter market, or
quotations halted generally on the Nasdaq National Market, or minimum or maximum
prices for trading have been fixed, or maximum ranges for prices for securities
have been required by either of such exchanges or the NASD or by order of the
Commission or any other governmental authority; (ii) a general moratorium on the
operations of commercial banks or federal savings associations or a general
moratorium on the withdrawal of deposits from commercial banks or federal
savings associations declared by federal or state authorities; (iii) the
engagement by the United States in hostilities which have resulted in the
declaration, on or after the date hereof, of a national emergency or war; or
(iv) a material decline in the price of equity or debt securities if the effect
of such a declaration or decline, in Xxxx'x reasonable judgment, makes it
impracticable or inadvisable to proceed with the Offering or the delivery of the
shares on the terms and in the manner contemplated in the Registration Statement
and Prospectus.
SECTION 8. INDEMNIFICATION.
(a) The Company and the Association jointly and severally agree to
indemnify and hold harmless Xxxx, its officers, directors, agents, servants and
employees and each person, if any, who controls Xxxx within the meaning of
Section 15 of the 1933 Act or Section 20(a) of the 1934 Act, against any and all
loss, liability, claim, damage or expense whatsoever (including but not limited
to settlement expenses), joint or several, that Xxxx or any of them may suffer
or to which Xxxx and any such persons may become subject
under all applicable federal or state laws or otherwise, and to promptly
reimburse Xxxx and any such persons upon written demand for any expense
(including fees and disbursements of counsel) incurred by Xxxx or any of them in
connection with investigating, preparing or defending any actions, proceedings
or claims (whether commenced or threatened) to the extent such losses, claims,
damages, liabilities or actions: (i) arise out of or are based upon any untrue
statement or alleged untrue statement of a material fact contained in the
Registration Statement (or any amendment or supplement thereto), preliminary or
final Prospectus (or any amendment or supplement thereto), the Conversion
Application (or any amendment or supplement thereto), the Holding Company
Application or any blue sky application or other instrument or document executed
by the Company or the Association or based upon written information supplied by
the Company or the Association filed in any state or jurisdiction to
-29-
register or qualify any or all of the Shares or to claim an exemption therefrom,
or provided to any state or jurisdiction to exempt the Company as a
broker-dealer or its officers, directors and employees as broker-dealers or
agents, under the securities laws thereof (collectively, the "Blue Sky
Application"), or any application or other document, advertisement, oral
statement or communication ("Sales Information") prepared, made or executed by
or on behalf of the Company or the Association with their consent or based upon
written or oral information furnished by or on behalf of the Company or the
Association, whether or not filed in any jurisdiction, in order to qualify or
register the Shares or to claim an exemption therefrom under the securities laws
thereof; (ii) arise out of or based upon the omission or alleged omission to
state in any of the foregoing documents or information, a material fact required
to be stated therein or necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading; or (iii) arise
from any theory of liability whatsoever relating to or arising from or based
upon the Registration Statement (or any amendment or supplement thereto),
preliminary or final Prospectus (or any amendment or supplement thereto), the
Conversion Application (or any amendment or supplement thereto), any Blue Sky
Application or Sales Information or other documentation distributed in
connection with the Conversion; provided, however, that no indemnification is
required under this paragraph (a) to the extent such losses, claims, damages,
liabilities or actions arise out of or are based upon any untrue material
statement or alleged untrue material statements in, or material omission or
alleged material omission from, the Registration Statement (or any amendment or
supplement thereto), preliminary or final Prospectus (or any amendment or
supplement thereto), the Conversion Application, any Blue Sky Application or
Sales Information made in reliance upon and in conformity with information
furnished in writing to the Company or the Association by Xxxx regarding Xxxx or
statistical information regarding national averages provided by Xxxx for the
Sales Information and provided further that such indemnification shall be to the
extent permitted by the OTS.
(b) Xxxx agrees to indemnify and hold harmless the
Company and the Association, their directors and officers and each person, if
any, who controls the Company or the Association within the meaning of Section
15 of the 1933 Act or Section 20(a) of the 1934 Act against any and all loss,
liability, claim, damage or expense whatsoever (including but not limited to
settlement expenses), joint or several, which it, or any of them, may suffer or
to which it, or any of them may become subject under all applicable federal and
state laws or otherwise, and to promptly reimburse the Company, the Association,
and any such persons upon written demand for any expenses (including reasonable
fees and disbursements of counsel) incurred by it, or any of them, in connection
with investigating, preparing or defending any actions, proceedings or claims
(whether commenced or threatened) to the extent such losses, claims, damages,
liabilities or actions arise out of or are based upon any untrue statement or
alleged untrue statement of a material fact contained in the Registration
Statement (or any amendment or supplement thereto), the Conversion Application
(or any amendment or supplement thereto) or the preliminary or final Prospectus
(or any amendment or supplement thereto), or are based upon the omission or
alleged omission to state in any of the foregoing documents a material fact
required to be
-30-
stated therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided, however,
that Xxxx'x obligations under this Section 8(b) shall exist only if and only to
the extent (i) that such untrue statement or alleged untrue statement was made
in, or such material fact or alleged material fact was omitted from, the
Registration Statement (or any amendment or supplement thereto), the preliminary
or final Prospectus (or any amendment or supplement thereto) or the Conversion
Application (or any amendment or supplement thereto), any Blue Sky Application
or Sales Information in reliance upon and in conformity with information
furnished in writing to the Company or the Association by Xxxx regarding Xxxx
or statistical information regarding national averages provided by Xxxx for
the Sales Information.
(c) Each indemnified party shall give prompt written notice to each
indemnifying party of any action, proceeding, claim (whether commenced or
threatened), or suit instituted against it in respect of which indemnity may be
sought hereunder, but failure to so notify an indemnifying party shall not
relieve it from any liability which it may have on account of this Section 8 or
otherwise. An indemnifying party may participate at its own expense in the
defense of such action. In addition, if it so elects within a reasonable time
after receipt of such notice, an indemnifying party, jointly with any other
indemnifying parties receiving such notice, may assumed defense of such action
with counsel chosen by it and approved by the indemnified parties that are
defendants in such action, unless such indemnified parties reasonably object to
such assumption on the ground that there may be legal defenses available to them
that are different from or in addition to those available to such indemnifying
party. If an indemnifying party assumes the defense of such action, the
indemnifying parties shall not be liable for any fees and expenses of counsel
for the indemnified parties incurred thereafter in connection with such action,
proceeding or claim, other than reasonable costs of investigation. In no event
shall the indemnifying parties be liable for the fees and expenses of more than
one separate firm of attorneys (and any special counsel that said firm may
retain) for each indemnified party in connection with any one action, proceeding
or claim or separate but similar or related actions, proceeding or claim or
separate but similar or related actions, proceedings or claims in the same
jurisdiction arising out of the same general allegations or circumstances.
(d) The agreements contained in this Section 8 and in Section 9 hereof
and the representations and warranties of the Company and the Association set
forth in this Agreement shall remain operative and in full force and effect
regardless of: (i) any investigation made by or on behalf of Xxxx or its
officers, directors or controlling persons, agents or employees or by or on
behalf of the Company or the Association or any officers, directors or
controlling persons, agents or employees of the Company or the Association; (ii)
delivery of and payment hereunder for the Shares; or (iii) any termination of
this Agreement.
SECTION 9. CONTRIBUTION. In order to provide for just and equitable
contribution in circumstances in which the indemnification provided for in
Section 8 is due in accordance
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with its terms but is for any reason held by a court to be unavailable from the
Company, the Association or Xxxx, the Company, the Association and Xxxx shall
contribute to the aggregate losses, claims, damages and liabilities (including
any investigation, legal and other expenses incurred in connection with, and any
amount paid in settlement of, any action, suit or proceeding of any claims
asserted, but after deducting any contribution received by the Company, the
Association or Xxxx from persons other than the other party thereto, who may
also be liable for contribution) in such proportion so that Xxxx are responsible
for that portion represented by the percentage that the fees paid to Xxxx
pursuant to Section 2 of this Agreement (not including expenses) bears to the
gross proceeds received by the Company from the sale of the Shares in the
Offering and the Company and the Association shall be responsible for the
balance. If, however, the allocation provided above is not permitted by
applicable law or if the indemnified party failed to give the notice required
under Section 8 above, then each indemnifying party shall contribute to such
amount paid or payable by such indemnified party in such proportion as is
appropriate to reflect not only such relative fault of the Company and the
Association on the one hand and Xxxx on the other in connection with the
statements or omissions which resulted in such losses, claims, damages or
liabilities (or actions, proceedings or claims in respect thereto), but also the
relative benefits received by the Company and the Association on the one hand
and Xxxx on the other from the Offering (before deducting expenses). The
relative fault shall be determined by reference to, among other things, whether
the untrue or alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to information supplied by the
Company and/or the Association on the one hand or Xxxx on the other and the
parties' relative intent, good faith, knowledge, access to information and
opportunity to correct or prevent such statement or omission. The Company, the
Association and Xxxx 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 into account the
equitable considerations referred to above in this Section 9. The amount paid or
payable by an indemnified party as a result of the losses, claims, damages or
liabilities (or actions, proceedings or claims in respect thereof) referred to
above in this Section 9 shall be deemed to include any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating
or defending any such action, proceeding or claim. It is expressly agreed that
Xxxx shall not be required to contribute any amount which in the aggregate
exceeds the amount paid (excluding reimbursable expenses) to Xxxx under this
Agreement. It is understood that the above stated limitation on Xxxx'x liability
for contribution is essential to Xxxx and that Xxxx would not have entered into
this Agreement if such limitation had not been agreed to by the parties to this
Agreement. No person found guilty of any fraudulent misrepresentation (within
the meaning of Section 11(f) of the 0000 Xxx) shall be entitled to contribution
from any person who was not found guilty of such fraudulent misrepresentation.
The obligations of the Company and the Association under this Section 9 and
under Section 8 shall be in addition to any liability which the Company and the
Association may otherwise have. For purposes of this Section 9, each of Xxxx'x,
the Company's or the Association's officers and directors and each person, if
any, who controls Xxxx or the Company or the Association within the meaning of
the 1933 Act and the 1934
-32-
Act shall have the same rights to contribution as Xxxx, the Company or the
Association. Any party entitled to contribution, promptly after receipt of
notice of commencement of any action, suit, claim or proceeding against such
party in respect of which a claim for contribution may be made against another
party under this Section 9, will notify such party from whom contribution may be
sought, but the omission to so notify such party shall not relieve the party
from whom contribution may be sought from any other obligation it may have
hereunder or otherwise than under this Section 9.
SECTION 10. SURVIVAL OF AGREEMENTS, REPRESENTATIONS AND INDEMNITIES. The
respective indemnities of the Company, the Association and Xxxx and the
representations and warranties and other statements of the Company and the
Association set forth in or made pursuant to this Agreement shall remain in full
force and effect, regardless of any termination or cancellation of this
Agreement or any investigation made by or on behalf of Xxxx, the Company, the
Association or any controlling person referred to in Section 8 hereof, and shall
survive the issuance of the Shares, and any legal representative, successor or
assign of Xxxx, the Company, the Association, and any such controlling person
shall be entitled to the benefit of the respective agreements, indemnities,
warranties and representations.
SECTION 11. TERMINATION. Xxxx may terminate its obligations under this
Agreement by giving the notice indicated below in this Section 11 at any time
after this Agreement becomes effective as follows:
(a) In the event the Company fails to sell all of the Shares by
June 30, 1997, and in accordance with the provisions of the Plan or as
required by the Conversion Regulations, and applicable law, this
Agreement shall terminate upon refund by the Association to each person
who has subscribed for or ordered any of the Shares the full amount
which it may have received from such person, together with interest as
provided in the Prospectus, and no party to this Agreement shall have
any obligation to the other hereunder, except for payment by the Company
and/or the Association as set forth in Sections 2(a) and (d), 6, 8 and 9
hereof.
(b) If any of the conditions specified in Section 7 shall not
have been fulfilled when and as required by this Agreement unless waived
in writing, or by the Closing Date, this Agreement and all of Xxxx'x
obligations hereunder may be cancelled by Xxxx by notifying the Company
and the Association of such cancellation in writing at any time at or
prior to the Closing Date, and any such cancellation shall be without
liability of any party to any other party except as otherwise provided
in Sections 2, 6, 8 and 9 hereof.
(c) If Xxxx elects to terminate this Agreement with respect to it
as provided in this Section, the Company and the Association shall be
notified promptly by such Agent by telephone or telegram, confirmed by
letter.
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The Company and the Association may terminate this Agreement with
respect to Xxxx in the event Xxxx is in material breach of the representations
and warranties or covenants contained in Section 5 and such breach has not been
cured after the Company and the Association have provided Xxxx with notice of
such breach.
This Agreement may also be terminated by mutual written consent of the
parties hereto.
SECTION 12. NOTICES. All communications hereunder, except as herein
otherwise specifically provided, shall be mailed in writing and if sent to Xxxx
shall be mailed, delivered or telegraphed and confirmed to Xxxxxxx Xxxx &
Company, 000 Xxxxxxxxx, Xxxxxx, Xxxx 00000-0000, Attention: Xxxxxxxx X. XxXxxxx
(with a copy to Elias, Matz, Xxxxxxx & Xxxxxxx L.L.P., Attention: Xxxx X.
Xxxxxxxx) and, if sent to the Company and the Association, shall be mailed,
delivered or telegraphed and confirmed to the Company and the Association at
Empire Federal Bancorp, Inc., 000 Xxxxx Xxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxx 00000,
Attention: Xxxxxxx X. Xxxxxx, President (with a copy to Breyer & Aguggia, 000
00xx Xxxxxx, X.X., Xxxxx 0000 Xxxxx, Xxxxxxxxxx, X.X. 00000, Attention: Xxxx
Xxxxxx, Esq.).
SECTION 13. PARTIES. The Company and the Association shall be entitled
to act and rely on any request, notice, consent, waiver or agreement purportedly
given on behalf of Xxxx when the same shall have been given by the undersigned.
Xxxx shall be entitled to act and rely on any request, notice, consent, waiver
or agreement purportedly given on behalf of the Company or the Association, when
the same shall have been given by the undersigned or any other officer of the
Company or the Association. This Agreement shall inure solely to the benefit of,
and shall be binding upon, Xxxx, the Company, the Association, and their
respective successors, legal representatives and assigns, and no other person
shall have or be construed to have any legal or equitable right, remedy or claim
under or in respect of or by virtue of this Agreement or any provision herein
contained. It is understood and agreed that this Agreement, including Exhibit A
thereto, is the exclusive agreement among the parties hereto, and supersedes any
prior agreement among the parties and may not be varied except in writing signed
by all the parties.
SECTION 14. CLOSING. The closing for the sale of the Shares shall take
place on the Closing Date at such location as mutually agreed upon by Xxxx and
the Company and the Association. At the closing, the Company and the Association
shall deliver to Xxxx in next day funds the commissions, fees and expenses due
and owing to Xxxx as set forth in Sections 2 and 6 hereof and the opinions and
certificates required hereby and other documents deemed reasonably necessary by
Xxxx shall be executed and delivered to effect the sale of the Shares as
contemplated hereby and pursuant to the terms of the Prospectus.
SECTION 15. PARTIAL INVALIDITY. In the event that any term, provision or
covenant herein or the application thereof to any circumstance or situation
shall be invalid or unenforceable, in whole or in part, the remainder hereof and
the application of said term,
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provision or covenant to any other circumstances or situation shall not be
affected thereby, and each term, provision or covenant herein shall be valid and
enforceable to the full extent permitted by law.
SECTION 16. CONSTRUCTION. This Agreement shall be construed in
accordance with the laws of the State of Ohio.
SECTION 17. COUNTERPARTS. This Agreement may be executed in separate
counterparts, each of which so executed and delivered shall be an original, but
all of which together shall constitute but one and the same instrument.
If the foregoing correctly sets forth the arrangement among the Company,
the Association and Xxxx, please indicate acceptance thereof in the space
provided below for that purpose, whereupon this letter and Xxxx'x acceptance
shall constitute a binding agreement.
Very truly yours,
EMPIRE FEDERAL BANCORP, INC. EMPIRE FEDERAL SAVINGS AND LOAN
ASSOCIATION
By: By:
Xxxxxxx X. Xxxxxx Xxxxxxx X. Xxxxxx
President and Chief President and Chief
Executive Officer Executive Officer
Accepted as of the date first above written
XXXXXXX XXXX & COMPANY
By:
Xxxxxxxx X. XxXxxxx
Executive Vice President
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