Exhibit 1.1
Form of Proposed Agency Agreement Among
Oregon Trail Financial Corp., Pioneer Bank, a Federal
Savings Bank and ▇▇▇▇▇▇▇ ▇▇▇▇ & Co.
OREGON TRAIL FINANCIAL CORP.
Up to _________ Shares
COMMON STOCK
($0.01 Par Value)
Subscription Price $10.00 Per Share
AGENCY AGREEMENT
______________, 1997
▇▇▇▇▇▇▇ ▇▇▇▇ & Company
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Ladies and Gentlemen:
Oregon Trail Financial Corp., an Oregon corporation (the "Company") and
Pioneer Bank, a Federal Savings Bank, a federally chartered mutual savings bank
(references to the "Bank" include the Bank in the mutual or stock form, as
indicated by the context), with its deposit accounts insured by the Savings
Association Insurance Fund ("SAIF") administered by the Federal Deposit
Insurance Corporation ("FDIC"), hereby confirm their agreement with ▇▇▇▇▇▇▇ ▇▇▇▇
& Company, a division of ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇, Inc. ("▇▇▇▇") as follows:
Section 1. The Offering. The Bank, 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 bank, and to issue all of its issued and outstanding capital stock to
the Company. In addition, pursuant to the Plan, the Company will offer and sell
up to ____________ shares of its common stock, par value $0.01 per share (the
"Shares" or "Common Stock"), in a subscription offering (the "Subscription
Offering") to (1) depositors of the Bank with savings accounts of $50 or more as
of December 31, 1995 ("Eligible Account Holders"), (2) the Company's Employee
Stock Ownership Plan ("ESOP"), (3) depositors of the Bank with savings accounts
of $50 or more as of June 30, 1997 ("Supplemental Eligible Account Holders") and
(4) depositors of the Bank as of _______________, 1997 (other than Eligible
Account Holders and Supplemental Eligible Account Holders) ("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 ▇▇▇▇▇, Union, Wallawa, Malheur, ▇▇▇▇▇▇ and Grant
Counties of ________ (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 Bank may reject, in whole or in part, any orders received in the
Community Offering or Syndicated Community Offering. Collectively, these
transactions are referred to herein as the "Conversion."
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form SB-2 (File No. 333-___________)
(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").
Section 2. Retention of ▇▇▇▇; Compensation; Sale and Delivery of the
Shares. Subject to the terms and conditions herein set forth, the Company and
the Bank hereby appoint ▇▇▇▇ (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 Bank with
respect to the Company's sale of the Shares in the Offering and
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(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, ▇▇▇▇
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 March 5, 1997, between the Bank and ▇▇▇▇ (a copy of which is
attached hereto as Exhibit A). It is acknowledged by the Company and the Bank
that ▇▇▇▇ 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, ▇▇▇▇ 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 ▇▇▇▇ pursuant to this Agreement shall terminate upon the
completion or termination or abandonment of the Plan by the Company or upon
termination of the Offering, but in no event later than March 31, 1998 (the "End
Date"). All fees or expenses due to ▇▇▇▇ but unpaid will be payable to ▇▇▇▇ in
next day funds at the earlier of the Closing Date (as hereinafter defined) or
the End Date. In the event the Offering is extended beyond the End Date, the
Company, the Bank and ▇▇▇▇ may agree to renew this Agreement under mutually
acceptable terms.
In the event the Company is unable to sell a minimum of _______________
Shares (or such lesser amount approved by the OTS) 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 ▇▇▇▇, ▇▇▇▇ 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 ▇▇▇▇ 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 Bank and ▇▇▇▇ (it being understood
that such date shall not be more than ten business days after termination of the
Offering) or such other time or place as shall be agreed upon by the Company,
the Bank and ▇▇▇▇. Certificates for shares shall be delivered directly to the
purchasers in accordance with their directions. The date upon which the Company
shall release or deliver, or have released or delivered, the Shares sold in the
Offering, in accordance with the terms herein, is called the "Closing Date."
▇▇▇▇ shall receive the following compensation for their services hereunder:
(a) A management fee to ▇▇▇▇ in the amount of $25,000. 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 ▇▇▇▇, ▇▇▇▇
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 the Bank and by the ESOP and any tax-qualified or
stock-based compensation plan (excluding individual retirement plans
("IRAs")) and any similar plan created by the Bank for some or all of
its directors or employees, payable on the Closing Date.
(c) If any shares of the Company's stock remain available after the
Subscription and Community Offering, at the request of the Bank, ▇▇▇▇
will seek to form a syndicate of registered broker-dealers to assist
in the sale of such shares of Common Stock on a best efforts basis,
subject to the terms and conditions set forth in the selected dealers'
agreement. ▇▇▇▇ will endeavor to distribute the Common Stock among
dealers in a fashion which best meets the distribution objectives of
the Bank and the Plan of Conversion. ▇▇▇▇ 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 ▇▇▇▇ to such broker/dealer. The decision to
utilize selected broker-dealers will be made by the Bank upon
consultation with ▇▇▇▇. 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 ▇▇▇▇, from time to
time upon ▇▇▇▇'▇ request, for its reasonable out-of-pocket expenses
and the reasonable fees and expenses of its counsel (such fees of
counsel will not be incurred without the prior approval of the Bank).
Such reimbursement of legal fees shall not exceed $35,000. The Bank
will bear the expenses of the Offering customarily borne by issuers
including, without limitation, 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 ▇▇▇▇'▇ actual and accountable expenses, advisory fees and
compensation shall be made in next day funds on the earlier of the Closing Date
or a determination by the Bank to terminate or abandon the Plan.
▇▇▇▇ 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 ▇▇▇▇ and the Company wish to continue
the relationship, a fee will be negotiated and an agreement entered into at that
time.
Section 3. Prospectus; Offering. The Shares are to be initially offered in
the Offering at the Purchase Price as defined and set forth on the cover page of
the Prospectus.
Section 4. Representations and Warranties. The Company and the Bank jointly
and severally represent and warrant to ▇▇▇▇ on the date hereof as follows:
(a) The Registration Statement was declared effective by the Commission on
August __, 1997. At the time the Registration Statement, including the
Prospectus contained therein (including any amendment or supplement thereto),
became effective, the Registration Statement complied in all material respects
with the requirements of the 1933 Act and the 1933 Act Regulations and the
Registration Statement, including the Prospectus contained therein (including
any amendment or supplement thereto), and any information regarding the Company
or the Bank contained in Sales Information (as such term is defined in Section 8
hereof) authorized by the Company or the Bank for use in connection with the
Offering, did not contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading, and at the time any Rule 424(b) or (c) Prospectus was filed with
the Commission; provided, however, that the representations and warranties in
this Section 4(a) shall not apply to statements or omissions made in reliance
upon and in conformity with written information furnished to the Company or the
Bank by ▇▇▇▇ expressly regarding ▇▇▇▇ for use in the Prospectus 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
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or information filed pursuant to state securities or blue sky laws or
regulations regarding ▇▇▇▇.
(b) The Conversion Application was approved by the OTS on August ___, 1997
and the related Prospectus has been authorized for use by the OTS on August ___,
1997. 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
Bank by ▇▇▇▇ expressly regarding ▇▇▇▇ 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 ▇▇▇▇.
(c) The Company filed with the OTS the Holding Company Application.
(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 Bank, pending or threatened.
(e) To the best knowledge of the Company, no person has sought to obtain
review of the final action of the 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 Bank has been organized and is a validly existing federally
chartered savings bank in mutual form of organization and upon consummation of
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 Bank has obtained all material
licenses, permits and other governmental authorizations currently required for
the conduct of its business; all such licenses, permits and governmental
authorizations are in full force and effect, and the Bank is in all material
respects complying with all laws, rules, regulations and orders applicable to
the operation of its business; the Bank is existing under federal laws and is
duly qualified as a foreign corporation to transact
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business and is in good standing in each jurisdiction in which its ownership of
property or leasing of property or the conduct of its business requires such
qualification, unless the failure to be so qualified in one or more of such
jurisdictions would not have a material adverse effect on the financial
condition, or the business, operations or income of the Bank. The Bank does not
own equity securities or any equity interest in any other business enterprise
except as described in the Prospectus or as would not be material to the
operations of the Bank.
(g) The Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the State of Oregon with
corporate power and authority to own, lease and operate its properties and to
conduct its business as described in the Registration Statement and the
Prospectus, and the Company is qualified to do business as a foreign corporation
in each jurisdiction in which the conduct of its business requires such
qualification, except where the failure to so qualify would not have a material
adverse effect on the financial condition, or the business, operations or income
of the Company. The Company has obtained all material licenses, permits and
other governmental authorizations currently required for the conduct of its
business; all such licenses, permits and governmental authorizations are in full
force and effect, and the Company is in all material respects complying with all
laws, rules, regulations and orders applicable to the operation of its business.
(h) Each of the Bank's wholly owned subsidiaries, Pioneer Development
Corporation and Pioneer Bank Investment Corporation (collectively, the
"Subsidiaries"), is duly incorporated and validly existing as a corporation in
good standing under the laws of the State of Oregon, 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 Bank is a member of the Federal Home Loan Bank of Seattle
("FHLB-Seattle"). The deposit accounts of the Bank are insured by the FDIC up to
the applicable limits; and no proceedings for the termination or revocation of
such insurance are pending or, to the best knowledge of the Bank, threatened.
Upon consummation of the Conversion, the liquidation account for the benefit of
Eligible Account Holders and Supplemental Eligible Account Holders will be duly
established in accordance with the requirements of the Conversion Regulations.
(j) The Company and the Bank have good and marketable title to all real
property and other assets material to the business of the Company and the Bank
and to those properties and assets described in the Registration Statement and
Prospectus as owned by them, free and clear of all liens, charges, encumbrances
or restrictions, except such as are described in the Registration Statement and
Prospectus or are not material to the business of the Company and the Bank taken
as a whole; and all of the leases and subleases material to the business of the
Company and the Bank under which the Company or the Bank hold properties,
including those described in the Registration Statement and Prospectus, are in
full force and effect.
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(k) The Company and the Bank have received an opinion from Deloitte &
Touche LLP, Portland, Oregon, with respect to the Oregon state tax consequences
of the proposed transaction; all material aspects of the opinion of Deloitte &
Touche LLP, Portland, Oregon, 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 Bank have all such power, authority,
authorizations, approvals and orders as may be required to enter into this
Agreement, to carry out the provisions and conditions hereof and to issue and
sell (i) the capital stock of the Bank to the Company and (ii) the Shares to be
sold by the Company as provided herein and as described in the Prospectus.
(m) The Company and the Bank are not in violation of any directive received
from the OTS or the FDIC 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 the FDIC, 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 Bank,
threatened, which would materially and adversely affect the Conversion, the
performance of this Agreement or the consummation of the transactions
contemplated in the Plan and as described in the Registration Statement and the
Prospectus or which would result in any material adverse change in the financial
condition, earnings, capital or properties of the Company, or the Bank.
(n) The consolidated financial statements which are included in the
Prospectus fairly present the financial condition, results of operations,
retained earnings and cash flows of the Bank at the respective dates thereof and
for the respective periods covered thereby and comply as to form in all material
respects with the applicable accounting requirements of the 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 except as noted therein, present fairly in all
material respects the information required to be stated therein and are
consistent with the most recent financial statements and other reports filed by
the Bank with the 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 (except the appraisal
data) included in the Prospectus present fairly the information shown therein on
a basis consistent with the audited and unaudited consolidated financial
statements of the Bank included in the Prospectus, and as to the pro forma
adjustments, the adjustments made therein have been properly applied on the
basis described therein.
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(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, in the financial condition of the Company, the Bank and the
Subsidiaries considered as one enterprise, or in the earnings, capital or
properties of the Company or the Bank, whether or not arising in the ordinary
course of business; (ii) there has not been any material increase in the long
term debt of the Bank or in loans past due 90 days or more or real estate
acquired by foreclosure, by deed-in-lieu of foreclosure or deemed in-substance
foreclosure or any material decrease in surplus and reserves or total assets of
the Bank nor has the Company or the Bank issued any securities (other than as
contemplated by this Agreement) or incurred any liability or obligation for
borrowing other than in the ordinary course of business and (iii) there have not
been any material transactions entered into by the Company or the Bank, except
with respect to those transactions entered into in the ordinary course of
business.
(p) The capitalization, liabilities, assets, properties and business of the
Company and the Bank conform in all material respects to the descriptions
thereof contained in the Prospectus.
(q) Neither the Company nor the Bank has any material contingent
liabilities, except as set forth in the Prospectus.
(r) As of the date hereof, neither the Company, the Bank nor the
Subsidiaries is in violation of its articles of incorporation or bylaws or
charter or bylaws, as applicable (and the Bank will not be in violation of its
charter or bylaws in capital stock form at the time of consummation of the
Conversion), or in default in the performance or observance of any material
obligation, agreement, covenant, or condition contained in any material
contract, lease, loan agreement, indenture or other instrument to which it is a
party or by which it or any other instrument to which it is a party or by which
it or any of its property may be bound; the consummation of the Conversion, the
execution, delivery and performance of this Agreement and the consummation of
the transactions herein contemplated have been duly and validly authorized by
all necessary corporate action on the part of the Company and the Bank and this
Agreement has been validly executed and delivered by the Company and the Bank
and is the valid, legal and binding Agreement of the Company and the Bank
enforceable in accordance with its terms, except as the enforceability thereof
may be limited by (i) bankruptcy, insolvency, 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 (including
Section 23A of the Federal Reserve Act, as amended) or public policy with
respect to the indemnification and/or contribution provisions contained herein,
and except that no representation or warranty need 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
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will not: (i) conflict with or constitute a breach of, or default under, the
articles of incorporation and bylaws of the Company or the charter and bylaws of
the Bank (in either mutual or capital stock form), or any material contract,
lease or other instrument to which the Company or the Bank is a party, or any
applicable law, rule, regulation or order; (ii) violate any authorization,
approval, judgement, decree, order, statute, rule or regulation applicable to
the Company or the Bank, except for such violation which would not have a
material adverse effect on the financial condition and results of operations of
the Company and the Bank on a consolidated basis; or (iii) with the exception of
the liquidation account established in the Conversion, result in the creation of
any material lien, charge or encumbrance upon any property of the Company or the
Bank.
(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
Bank or the Subsidiaries, in the due performance and observance of any term,
covenant or condition of any indenture, mortgage, deed of trust, note, bank loan
or credit agreement or any other instrument of agreement to which the Company,
the Bank or the Subsidiaries is a party or by which any of them or any of their
property is bound or affected except such defaults which would not have a
material adverse effect on the financial condition or results of operations of
the Company, the Bank and the Subsidiaries on a consolidated basis; such
agreements are in full force and effect; and no other party to any such
agreements has instituted or, to the best knowledge of the Company, the Bank and
the Subsidiaries, threatened any action or proceeding wherein the Company, the
Bank or the Subsidiaries would be alleged to be in default thereunder under
circumstances where such action or proceeding, if determined adversely to the
Company, the Bank or the Subsidiaries would have a material adverse effect on
the Company, the Bank and the Subsidiaries, 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 (except for subscription
rights granted under the Plan); and the terms and provisions of the Shares will
conform in all material respects to the description thereof contained in the
Registration Statement and the Prospectus. To the best knowledge of the Company
and the Bank, upon the issuance of the Shares, good title to the Shares will be
transferred from the Company to the purchasers thereof against payment therefor,
subject to such claims as may be asserted against the purchasers thereof by
third-party claimants.
(u) The Company or the Bank is not required to obtain any approval of any
regulatory or supervisory or other public authority in connection with the
execution and
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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) Each of Deloitte & Touche, LLP, which has certified the consolidated
financial statements of the Bank included in the Prospectus as of March 31, 1997
and the nine months ended March 31, 1997, and Coopers & ▇▇▇▇▇▇▇, LLP, which has
certified the consolidated financial statement of the Bank as of June 30, 1996
and for the years ended June 30, 1996 and 1995, has advised the Company and the
Bank in writing that they are, with respect to the Company and the Bank,
independent public accountants within the meaning of the Code of Professional
Ethics of the American Institute of Certified Public Accountants and Title 12 of
the Code of Federal Regulations and Section 571.2(c)(3).
(w) ▇▇▇▇▇▇ & Company, Inc., which has prepared the Bank's Conversion
Valuation Appraisal Report as of [JUNE ____], 1997 (as amended or supplemented,
if so amended or supplemented) (the "Appraisal"), has advised the Company in
writing that it is independent of the Company and the Bank within the meaning of
the Conversion Regulations.
(x) The Company and the Bank have timely filed all required federal, state
and local tax returns; the Company and the Bank have paid all taxes that have
become due and payable in respect of such returns, except where permitted to be
extended; to the best knowledge of the Bank adequate reserves have been made for
similar future tax liabilities and no deficiency has been asserted with respect
thereto by any taxing authority.
(y) The Company and the Bank are in compliance in all material respects
with the applicable financial record-keeping and reporting requirements of the
Currency and Foreign Transactions Reporting Act of 1970, as amended, and the
regulations and rules thereunder.
(z) To the knowledge of the Company and the Bank, neither the Company, the
Bank nor employees of the Company or the Bank have made any payment of funds of
the Company or the Bank as a loan for the purchase of the Shares.
(aa) Prior to the Conversion, the Bank was not authorized to issue shares
of capital stock and neither the Company nor the Bank has: (i) issued any
securities within the last 18 months (except for notes to evidence other bank
loans and reverse repurchase agreements or other liabilities in the ordinary
course of business or as described in the Prospectus); (ii) had any material
dealings within the 12 months prior to the date hereof with any member of the
NASD, or any person related to or associated with such member, other than
discussions and meetings relating to the proposed Offering and routine purchases
and sales of United States government and agency securities; (iii) entered into
a financial or management consulting agreement except as contemplated hereunder
and except for the Letter Agreement set forth in Exhibit A; and (iv) engaged any
intermediary between ▇▇▇▇
-11-
and the Company and the Bank in connection with the offering of the Shares, and
no person is being compensated in any manner for such service.
(bb) The Company and the Bank have not relied upon ▇▇▇▇ or ▇▇▇▇'▇ counsel
for any legal, tax or accounting advice in connection with the Conversion.
(cc) The Company is not required to be registered under the Investment
Company Act of 1940, as amended.
Any certificates signed by an officer of the Company or the Bank pursuant
to the conditions of this Agreement and delivered to ▇▇▇▇ or its counsel that
refers to this Agreement shall be deemed to be a representation and warranty by
the Company or the Bank to ▇▇▇▇ 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 ▇▇▇▇.
(a) ▇▇▇▇ represents and warrants to the Company and the Bank that:
(i) ▇▇▇▇ is a corporation and is validly existing in good standing
under the laws of the State of Ohio with full power and authority to
provide the services to be furnished to the Bank and the Company hereunder.
(ii) The execution and delivery of this Agreement and the consummation
of the transactions contemplated hereby have been duly and validly
authorized by all necessary action on the part of ▇▇▇▇, and this Agreement
has been duly and validly executed and delivered by ▇▇▇▇ and is the legal,
valid and binding agreement of ▇▇▇▇, enforceable in accordance with its
terms.
(iii) Each of ▇▇▇▇ 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 ▇▇▇▇, 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 ▇▇▇▇ or any
agreement, indenture or other instrument to which ▇▇▇▇ 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 ▇▇▇▇'▇ execution and delivery of
this Agreement, except as may have been received.
-12-
(vi) There is no suit or proceeding or charge or action before or by
any court, regulatory authority or government agency or body or, to the
best knowledge of ▇▇▇▇, pending or threatened, which might materially
adversely affect ▇▇▇▇'▇ performance under this Agreement.
Section 5.1 Covenants of the Company and the Bank. The Company and the Bank
hereby jointly and severally covenant with ▇▇▇▇ as follows:
(a) The Company will not, at any time after the date the Registration
Statement is declared effective, file any amendment or supplement to the
Registration Statement without providing ▇▇▇▇ and its counsel an opportunity to
review such amendment or supplement or file any amendment or supplement to which
amendment or supplement ▇▇▇▇ or its counsel shall reasonably object.
(b) The Bank 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 ▇▇▇▇ and its counsel an opportunity to review such
amendment or supplement or file any amendment or supplement to which amendment
or supplement ▇▇▇▇ 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 ▇▇▇▇ and its counsel an
opportunity to review such amendment or supplement or file any amendment or
supplement to which amendment or supplement ▇▇▇▇ or its counsel shall reasonably
object.
(d) The Company and the Bank will use their best efforts to cause any
post-effective amendment to the Registration Statement to be declared effective
by the Commission and any post-effective amendment to the Conversion Application
to be approved by the OTS and will immediately upon receipt of any information
concerning the events listed below notify ▇▇▇▇: (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 the 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;
(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 Bank 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
-13-
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 Bank 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 Bank will deliver to ▇▇▇▇ 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 Bank
will deliver such additional copies of the foregoing documents to counsel to
▇▇▇▇ as may be required for any NASD filings.
(f) The Company and the Bank will furnish to ▇▇▇▇, 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 ▇▇▇▇ 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 ▇▇▇▇ 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 ▇▇▇▇.
(g) The Company and the Bank will comply with any and all material terms,
conditions, requirements and provisions with respect to the Conversion imposed
by the Commission, the 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 Bank 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.
(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 Bank or the Subsidiaries shall occur, as a result of which it is
necessary or appropriate, in the opinion of counsel for the Company and the Bank
to amend or supplement the Registration Statement or Prospectus in order to make
the Registration Statement or Prospectus not misleading in light of the
circumstances existing at the time the Prospectus is delivered to a purchaser,
the Company and the Bank will, at their expense, prepare and file with the
Commission and the OTS and furnish to ▇▇▇▇ a reasonable number of copies of an
-14-
amendment or amendments of, or a supplement or supplements to, the Registration
Statement and Prospectus (in form and substance satisfactory to ▇▇▇▇ and its
counsel after a reasonable time for review) which will amend or supplement the
Registration Statement and Prospectus so that as amended or supplemented it will
not contain an untrue statement of a material fact or omit to state a material
fact necessary in order to make the statements therein, in light of the
circumstances existing at the time the Prospectus is delivered to a purchaser,
not misleading. For the purpose of this Agreement, the Company and the Bank each
will timely furnish to ▇▇▇▇ such information with respect to itself as ▇▇▇▇ 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 Bank 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 Bank 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 Bank will be converted pursuant to the Plan to a
federally chartered stock savings bank, (ii) all of the authorized and
outstanding capital stock of the Bank will be owned by the Company, and (iii)
the Company will have no direct subsidiaries other than the Bank. The Conversion
will have been effected in all material respects in accordance with all
applicable statutes, regulations, decisions and orders; and, except with respect
to the filing of certain post-sale, post-Conversion reports, and documents in
compliance with the 1933 Act Regulations 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 Bank in all
material respects or appropriate waivers will have been obtained and all
material notice and waiting periods will have been satisfied, waived or elapsed.
(k) The Company and the Bank will take all necessary actions, in
cooperation with ▇▇▇▇, and furnish to whomever ▇▇▇▇ may direct, such information
as may be required to qualify or register the Shares for offering and sale by
the Company or to exempt such Shares from registration, or to exempt the Company
as a broker-dealer and its officers, directors and employees as broker-dealers
or agents under the applicable securities or blue sky laws of such jurisdictions
in which the Shares are to be offered and sold as ▇▇▇▇ and the Company and the
Bank may reasonably agree upon; provided, however, that the Company shall not be
obligated to file any general consent to service of process or to qualify to do
business in any jurisdiction in which it is not so qualified. In each
jurisdiction where any of the Shares shall have been qualified or registered as
above provided, the Company will make and file such statements and reports in
each fiscal period as are or may be required by the laws of such jurisdiction.
-15-
(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 Bank will have an inchoate interest in their pro rata portion of
the liquidation account which shall have a priority superior to that of the
holders of shares of Common Stock in the event of a complete liquidation of the
Bank.
(m) The Company and the Bank will not sell or issue, contract to sell or
otherwise dispose of, for a period of 90 days after the Closing Date, without
▇▇▇▇'▇ 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 ▇▇▇▇: (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
securities exchange or system on which any class of securities of the Company is
listed or quoted, each press release and material news items and additional
documents and information with respect to the Company or the Bank as ▇▇▇▇ may
reasonably request; and (iii) from time to time, such other nonconfidential
information concerning the Company or the Bank as ▇▇▇▇ may reasonably request.
(q) The Company and the Bank will use the net proceeds from the sale of the
Shares in the manner set forth in the Prospectus under the caption "Use of
Proceeds."
-16-
(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 Bank 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 Bank will maintain appropriate arrangements for depositing all
funds received from persons mailing subscriptions for or orders to purchase
Shares in the Offering on an interest bearing basis at the rate described in the
Prospectus until the Closing Date and satisfaction of all conditions precedent
to the release of the Bank's obligation to refund payments received from persons
subscribing for or ordering Shares in the Offering in accordance with the Plan
and as described in the Prospectus or until refunds of such funds have been made
to the persons entitled thereto or withdrawal authorizations cancelled in
accordance with the Plan and as described in the Prospectus. The Bank will
maintain such records of all funds received to permit the funds of each
subscriber to be separately insured by the FDIC (to the maximum extent
allowable) and to enable the Bank to make the appropriate refunds of such funds
in the event that such refunds are required to be made in accordance with the
Plan and as described in the Prospectus.
(u) Prior to the Closing Date, the Holding Company Application shall have
been approved by the OTS. 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 Bank will take such actions and furnish such
information as are reasonably requested by ▇▇▇▇ in order for ▇▇▇▇ to ensure
compliance with the NASD's "Interpretation Relating to Free Riding and
Withholding."
(w) The Bank will not amend the Plan of Conversion without notifying ▇▇▇▇
prior thereto.
(x) The Company shall assist ▇▇▇▇, if necessary, in connection with the
allocation of the Shares in the event of an oversubscription and shall provide
▇▇▇▇ with any information necessary in allocating the Shares in such event.
(y) Prior to the Closing Date, the Company and the Bank will inform ▇▇▇▇ 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.
-17-
Section 5.2 Covenants of ▇▇▇▇. ▇▇▇▇ hereby covenants with the Company and
the Bank as follows:
(a) During the period when the Prospectus is used, ▇▇▇▇ 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) ▇▇▇▇ shall return unused copies of the Prospectus, if any, to the
Company promptly upon the completion of the Conversion.
(c) ▇▇▇▇ 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) ▇▇▇▇ shall assist the Bank 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 ▇▇▇▇ by the Bank (as described in Section
5.1(x)).
(e) ▇▇▇▇ shall use its best efforts to assist the Company in obtaining at
least two market makers for the shares of Common Stock.
Section 6. Payment of Expenses. Whether or not the Conversion is completed
or the sale of the Shares by the Company is consummated, the Company and the
Bank jointly and severally agree to pay or reimburse ▇▇▇▇ for: (a) all filing
fees in connection with all filings with the NASD; (b) any stock issue or
transfer taxes which may be payable with respect to the sale of the Shares; (c)
all reasonable expenses of the Conversion, including but not limited to, the
Company's and the Bank's attorneys' fees, transfer agent, registrar and other
agent charges, fees relating to auditing and accounting or other advisors and
costs of printing all documents necessary in connection with the Conversion; and
(d) all reasonable out-of-pocket expenses incurred by ▇▇▇▇. Such out-of-pocket
expenses include, but are not limited to, travel, communications and postage and
reasonable fees of counsel (such fees of counsel will not be incurred without
the prior approval of the Bank). 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 ________________
Shares or the Conversion is terminated or otherwise abandoned, the Company and
the Bank shall reimburse ▇▇▇▇ in accordance with Section 2 hereof.
Section 7. Conditions to ▇▇▇▇'▇ Obligations. ▇▇▇▇'▇ obligations hereunder,
as to the Shares to be issued at the Closing Date, are subject, to the extent
not waived by ▇▇▇▇, to the condition that all representations and warranties of
the Company and the Bank herein are, at and as of the commencement of the
Offering and at and as of the Closing
-18-
Date, true and correct in all material respects, the condition that the Company
and the Bank shall have performed all of their obligations hereunder to be
performed on or before such dates, and to the following further conditions:
(a) At the Closing Date, the Company and the Bank shall have conducted the
Conversion in all material respects in accordance with the Plan, the Conversion
Regulations, 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 ▇▇▇▇'▇ consent at a later time and date; and at the
Closing Date, no stop order suspending the effectiveness of the Registration
Statement shall have been issued under the 1933 Act or proceedings therefore
initiated or threatened by the Commission, or any state authority and no order
or other action suspending the authorization of the Prospectus or the
consummation of the Conversion shall have been issued or proceedings therefore
initiated or, to the Company's or the Bank's knowledge threatened by the
Commission, the OTS or any state authority.
(c) At the Closing Date, ▇▇▇▇ shall have received:
(1) The favorable opinion, dated as of the Closing Date and addressed to
▇▇▇▇ and for its benefit, of Breyer & Aguggia, special counsel for the Company
and the Bank, in form and substance to the effect that:
(i) The Company has been duly incorporated and is validly existing as
a corporation in good standing under the laws of the State of Oregon 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 Bank is organized and is validly existing as a federally
chartered savings bank 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 Prospectus. All of the
outstanding capital stock of the Bank will be duly authorized and, upon
payment therefor, will be validly issued, fully paid and non-assessable
and, to such counsel's Actual Knowledge, will be owned by the Company, free
and clear of any liens, encumbrances, claims or other restrictions.
(iii) The Bank is a member of the FHLB-Seattle. The Bank is an insured
depository institution under the provisions of Section 4(a) of the Federal
Deposit Insurance Act, as amended, and no proceedings for the termination
or revocation of such insurance
-19-
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 statutory preemptive rights and the terms and provisions of the
Shares conform in all material respects to the description thereof
contained in the Prospectus. To 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 Bank;
and this Agreement is a valid and binding obligation of the Company and the
Bank, enforceable in accordance with its terms, except as the
enforceability thereof may be limited by (i) bankruptcy, insolvency,
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 principles of
equity, (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 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 Bank 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 Bank and, based upon the certificate of
the inspector of election, by the members of the Bank.
-20-
(viii) Subject to the satisfaction of the conditions to the OTS
approval of the Conversion, the Company and the Bank are not required to
receive any further approval, authorization, consent or other order of,
register with, or submit a notice to any other federal agency 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),] 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) and except the registration of the Company as
a savings and loan holding company.
(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 the Conversion Regulations (other than the financial
statements, the notes thereto, and other tabular, financial, statistical
and appraisal data included therein or omitted therefrom, as to which no
opinion need be rendered).
(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
or omitted therefrom, as to which no opinion need be rendered) complied as
to form in all material respects with the requirements of the 1933 Act and
the 1933 Act Regulations, and (ii) the Prospectus (other than the financial
statements, the notes thereto and other tabular, financial, statistical and
appraisal data included therein or omitted therefrom, as to which no
opinion need be rendered) complied as to form in all material respects with
the requirements of the 1933 Act and the 1933 Act Regulations.
(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 complies with applicable law.
(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 Bank or either
of the Subsidiaries is a party or of which any of their property is the
subject, which are not described in the Registration Statement and the
Prospectus,
-21-
including ordinary routine litigation incidental to the Company's, the
Bank's or either of the Subsidiaries' business, are, considered in the
aggregate, not material.
(xiv) The descriptions in the Conversion Application, the Registration
Statement and the Prospectus of the contracts, indentures, mortgages, loan
agreements, notes, leases or other instruments filed as exhibits thereto
are accurate in all material respects and fairly present the information
required to be shown.
(xv) To such counsel's Actual Knowledge, the Company and the Bank 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 Bank and
the Subsidiaries 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 Bank and the Subsidiaries are in all material respects complying
therewith, except whether the failure to have such licenses, permits and
other governmental authorizations or the failure to be in compliance
therewith would not have a material adverse affect on the business or
operations of the Bank, the Company and the Subsidiaries, taken as a whole.
(xvii) To such counsel's Actual Knowledge, neither the Company, nor
the Bank is in violation of its articles of incorporation, bylaws, or
charter, as applicable; neither the Company, nor the Bank is in default or
violation of any obligation, agreement, covenant or condition contained in
any contract, indenture, mortgage, loan agreement, note, lease or other
instrument described in the Prospectus or filed as an exhibit to the
Registration Statement to which it is a party or by which it or its
property may be bound, except for such defaults or violations which would
not have a material adverse impact on the financial condition or results of
operations of the Company, the Bank and the Subsidiaries on a consolidated
basis; 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 Bank
pursuant to any contract, indenture, mortgage, loan
-22-
agreement, note, lease or other instrument described in the Prospectus or
filed as an exhibit to the Registration Statement to which the Company or
the Bank is a party or by which any of them may be bound, or to which any
of the property or assets of the Company or the Bank is subject (other than
the establishment of a liquidation account), and such action will not
result in any violation of the provisions of the articles of incorporation,
bylaws or charter, as applicable, of the Company or the Bank or any
applicable federal law, act, regulation (except that no opinion need be
rendered with respect to the securities or blue sky laws of various
jurisdictions or the rules and regulations of the NASD and/or the Nasdaq
National Market) or order or court order, writ, injunction or decree naming
the Company or the Bank.
(xviii) The Company' articles of incorporation and bylaws comply in
all material respects with the [GENERAL CORPORATION LAW] of the State of
Oregon ("Oregon Law"). The Bank's charter and bylaws in mutual form and,
upon the completion of the Conversion, in stock form, comply in all
material respects with the HOLA and the rules and regulations of the OTS.
(xix) To such counsel's Actual Knowledge, neither the Company nor the
Bank 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. The information regarding the federal
tax opinion under the caption "The Conversion-Tax Effects" has been
reviewed by such counsel and constitutes an accurate summary of the opinion
rendered by such counsel to the Company and the Bank with respect to such
matters subject to the qualifications and limitations noted therein.
In giving such opinion, such counsel may rely as to all matters of fact on
certificates of officers or directors of the Company and the Bank and
certificates of public officials. Such counsel's opinion shall be limited to
matters governed by federal laws and by Oregon Law. 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 Bank 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 Bank shall have received a copy of such
proceedings, order, stop order or
-23-
action. In addition, such opinion may be limited to current statutes,
regulations and judicial interpretations and to facts as they currently exist;
in rendering such opinion, such counsel need assume no obligation to revise or
supplement it should the current 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 Bank or either of
the Subsidiaries.
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 accountants ▇▇▇▇ for, and other representatives of the
Company and the Bank, and on June 5 and [30], 1997, ▇▇▇▇ and its counsel, 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 Bank), nothing has come to their
attention that would lead them to believe that the Conversion Application and
the Registration Statement, or any amendment or supplement thereto (other than
the financial statements, the notes thereto, and other tabular, financial,
statistical and appraisal data included therein or omitted therefrom as to which
no statement need be made), as of the date of approval or effectiveness, as the
case may be, and the Prospectus, as of its date and as of the Closing Date,
contained an untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading.
(2) The favorable opinion, dated as of the Closing Date and addressed to
▇▇▇▇ and for their benefit, of __________________, the Bank's local counsel, in
form and substance to the effect that, to the best of such counsel's knowledge,
(i) the Company and the Bank have good and marketable title to all properties
and assets which are material to the business of the Company and the Bank and to
those properties and assets described in the Registration Statement and
Prospectus, as owned by them, free and clear of all liens, charges, encumbrances
or restrictions, except such as are described in the Registration Statement and
Prospectus, or are not material in relation to the business of the Company and
the Bank considered as one enterprise; (ii) all of the leases and subleases
material to the business of the Company and the Bank under which the Company and
the Bank hold properties, as described in the Registration Statement and
Prospectus, are in full force and effect; (iii) the Bank is duly qualified to
transact business in each jurisdiction in which its
-24-
ownership of property or leasing of property or the conduct of its business
requires such qualification, unless the failure to be so qualified in one or
more of such jurisdictions would not have a material adverse effect on the
financial condition, or the business, operations or income of the Bank; (iv)
articles of incorporation and bylaws of each of the Subsidiaries comply in all
material respects with applicable Oregon law; (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 Bank-Tax Effects" has been
reviewed by such counsel and constitutes a correct summary of the opinion
rendered by ___________________ to the Company and the Bank with respect to such
matters; (vi) each of the Subsidiaries has been duly incorporated and is validly
existing as a corporation under the laws of the State of Oregon 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) the Company and the Bank are not required to receive any
further approval, authorization, consent or other order of, register with or
submit a notice to any Oregon regulatory agency 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), 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 Bank and the Subsidiaries have
obtained all material Oregon 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
Bank and the Subsidiaries are in all material respects complying therewith,
except whether the failure to have such licenses, permits and other governmental
authorizations or the failure to be in compliance therewith would not have a
material adverse affect on the business or operations of the Bank, the Company
and the Subsidiaries, taken as a whole; and (ix) to such counsel's Actual
Knowledge, neither of the Subsidiaries 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, lease or other
instrument to which it is a party or by which it or its property may be bound
except for such defaults or violations which would not have a material adverse
impact on the financial condition or results of operations of the Company, the
Bank and the Subsidiaries on a consolidated basis.
(3) The favorable opinion, dated as of the Closing Date, of Elias, Matz,
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ L.L.P., ▇▇▇▇'▇ counsel, with respect to such matters as ▇▇▇▇
may reasonably require. Such opinion may rely upon the opinions of counsel to
the Company and the Bank, and as to matters of fact, upon certificates of
officers and directors of the Company and the Bank delivered pursuant hereto or
as such counsel shall reasonably request.
(d) At the Closing Date, ▇▇▇▇ shall receive a certificate of the Chief
Executive Officer and the Chief Financial Officer of the Company and a
certificate of the Chief
-25-
Executive Officer and the Chief Financial Officer of the Bank, both dated as of
such Closing Date, to the effect that: (i) they have reviewed the Prospectus
and, in their opinion, at the time the Prospectus became authorized for final
use, the Prospectus did not contain any untrue statement of a material fact or
omit to state a material fact necessary in order to make the statements therein,
in light of the circumstances under which they were made, not misleading; (ii)
since the date the Prospectus became authorized for final use, no material
adverse change in the financial condition, or in the earnings, capital,
properties or business of the Company, the Bank and the Subsidiaries has
occurred and, to their knowledge, no other event has occurred, which should have
been set forth in an amendment or supplement to the Prospectus which has not
been so set forth, and the conditions set forth in this Section 7 have been
satisfied; (iii) since the respective dates as of which information is given in
the Registration Statement and Prospectus, there has been no material adverse
change in the financial condition, or in the earnings, capital or properties of
the Company, the Bank or either of the Subsidiaries, independently, or of the
Company, the Bank and the Subsidiaries considered as one enterprise, whether or
not arising in the ordinary course of business; (iv) the representations and
warranties in Section 4 are true and correct with the same force and effect a
though expressly made at and as of the Closing Date; (v) the Company and the
Bank have complied in all material respects with all agreements and satisfied
all conditions on their part to be performed or satisfied at or prior to the
Closing Date and will comply in all material respects with all obligations to be
satisfied by them after Conversion; (vi) no stop order suspending the
effectiveness of the Registration Statement has been initiated or, to the best
knowledge of the Company or the Bank, threatened by the Commission or any state
authority; (vii) no order suspending the Offering, the Conversion, the
acquisition of all of the shares of the Bank by the Company or the effectiveness
of the Prospectus has been issued and no proceedings for that purpose are
pending or, to the best knowledge of the Company or the Bank, threatened by the
OTS, the Commission or any state authority; and (viii) to the best knowledge of
the Company or the Bank, no person has sought to obtain review of the final
action of the OTS approving the Plan.
(e) Prior to and at the Closing Date: (i) in the reasonable opinion of
▇▇▇▇, there shall have been no material adverse change in the financial
condition, or in the earnings or business of the Bank independently, or of the
Company, the Bank and the Subsidiaries considered as one enterprise, from that
as of the latest dates as of which such condition is set forth in the Prospectus
other than transactions referred to or contemplated therein; (iii) the Company
or the Bank shall not have received from the 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
▇▇▇▇) or which materially and adversely would affect the business, operations or
financial condition or income of the Company and the Bank considered as one
enterprise; (iv) the Company, the Bank and the Subsidiaries 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
-26-
the Company, the Bank or the Subsidiaries, threatened against the Company, the
Bank or either of the Subsidiaries or affecting any of their properties wherein
an unfavorable decision, ruling or finding would materially and adversely affect
the business operations, financially condition or income of the Company, the
Bank and the Subsidiaries considered as one enterprise; and (vi) the Shares have
been qualified or registered f or offering and sale or exempted therefore under
the securities or blue sky laws of the jurisdictions as ▇▇▇▇ shall have
requested and as agreed to by the Company and the Bank.
(f)(1) Concurrently with the execution of this Agreement, ▇▇▇▇ shall
receive a letter from [DELOITTE & TOUCHE LLP], dated as of the date of the
Prospectus and addressed to ▇▇▇▇: (i) confirming that [DELOITTE & TOUCHE 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
[DELOITTE & TOUCHE LLP's] opinion the consolidated financial statements of the
Bank as of March 31, 1997 and for the nine months ended March 31, 1997, 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 [DELOITTE & TOUCHE 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 Bank prepared by the Bank, a
reading of the minutes of the meetings of the Board of Directors and members of
the Bank and consultations with officers of the Bank responsible for financial
and accounting matters, nothing came to their attention which caused them to
believe that: (A) the unaudited consolidated financial statements included in
the Prospectus, are not in conformity with the 1933 Act, applicable accounting
requirements of the OTS and generally accepted accounting principles applied on
a basis substantially consistent with that of the audited consolidated financial
statements included in the Prospectus; or (B) during the period from the date of
the latest unaudited consolidated financial statements included in the
Prospectus to a specified date not more than three business days prior to the
date of the Prospectus, except as has been described in the Prospectus, there
was any material increase in borrowings, other than normal deposit fluctuations,
by the Bank; or (C) there was any decrease in consolidated net assets of the
Bank at the date of such letter as compared with amounts shown in the latest
unaudited consolidated statement of condition included in the Prospectus; and
(iii) a statement from [DELOITTE & TOUCHE 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 Bank, which are subject to
the internal controls of the Bank, the accounting system and other data prepared
by the Bank, directly from such accounting records, to the extent specified in
such letter, such amounts and/or percentages set forth in the Prospectus as ▇▇▇▇
may reasonably request; and they have reported on the results of such
comparisons.
-27-
(f)(2) Concurrently with the execution of this Agreement, ▇▇▇▇ shall
receive a letter from [COOPERS & ▇▇▇▇▇▇▇ LLP], dated as of the date of the
Prospectus and addressed to ▇▇▇▇: (i) confirming that [COOPERS & ▇▇▇▇▇▇▇ 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
[COOPERS & ▇▇▇▇▇▇▇ LLP's] opinion the consolidated financial statements of the
Bank as of March 31, 1997 and for the nine months ended March 31, 1997, 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 [COOPERS & ▇▇▇▇▇▇▇ 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 Bank prepared by the Bank, a
reading of the minutes of the meetings of the Board of Directors and members of
the Bank and consultations with officers of the Bank responsible for financial
and accounting matters, nothing came to their attention which caused them to
believe that: (A) the unaudited consolidated financial statements included in
the Prospectus, are not in conformity with the 1933 Act, applicable accounting
requirements of the OTS and generally accepted accounting principles applied on
a basis substantially consistent with that of the audited consolidated financial
statements included in the Prospectus; or (B) during the period from the date of
the latest unaudited consolidated financial statements included in the
Prospectus to a specified date not more than three business days prior to the
date of the Prospectus, except as has been described in the Prospectus, there
was any material increase in borrowings, other than normal deposit fluctuations,
by the Bank; or (C) there was any decrease in consolidated net assets of the
Bank at the date of such letter as compared with amounts shown in the latest
unaudited consolidated statement of condition included in the Prospectus; and
(iii) a statement from [COOPERS & ▇▇▇▇▇▇▇ 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 Bank, which are subject to
the internal controls of the Bank, the accounting system and other data prepared
by the Bank, directly from such accounting records, to the extent specified in
such letter, such amounts and/or percentages set forth in the Prospectus as ▇▇▇▇
may reasonably request; and they have reported on the results of such
comparisons.
(g) At the Closing Date, ▇▇▇▇ shall receive a letter from [DELOITTE &
TOUCHE LLP] and from [COOPERS & ▇▇▇▇▇▇▇ LLP], each dated the Closing Date,
addressed to ▇▇▇▇, 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, ▇▇▇▇ shall receive a letter from ▇▇▇▇▇▇ & Company,
Inc., dated the date thereof and addressed to counsel for ▇▇▇▇, (i) confirming
that said firm is
-28-
independent of the Company and the Bank 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 Bank expressed in its Appraisal dated as of [JUNE ___], 1997, and most
recently updated, remains in effect.
(i) The Company and the Bank shall not have sustained since the date of the
latest audited financial statements included in the Prospectus any material loss
or interference with their businesses from fire, explosion, flood or other
calamity, whether or not covered by insurance, or from any labor dispute or
court or governmental action, order or decree, otherwise than as set forth or
contemplated in the Registration Statement and Prospectus.
(j) At or prior to the Closing Date, ▇▇▇▇ 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 Bank; (iv) certificates of good standing from the State of
Oregon evidencing the good standing of the Company; (v) a certificate of good
standing from the State of Oregon evidencing the good standing of each of the
Subsidiaries; (vi) a certificate from the FDIC evidencing the Bank's insurance
of accounts; and (vii) a certificate of the FHLB-Seattle evidencing the Bank'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, ▇▇▇▇ shall receive, upon
request, a copy of the Bank'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 Oregon authorities; (iii) the engagement by the United
States in hostilities which have resulted in the declaration, on or after the
date hereof, of a national emergency or war; or (iv) a material decline in the
price of equity or debt securities if the effect of such a decline, in ▇▇▇▇'▇
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.
-29-
Section 8. Indemnification.
(a) The Company and the Bank jointly and severally agree to indemnify and
hold harmless ▇▇▇▇, its officers, directors, agents, servants and employees and
each person, if any, who controls ▇▇▇▇ within the meaning of Section 15 of the
1933 Act or Section 20(a) of the 1934 Act, against any and all loss, liability,
claim, damage or expense whatsoever (including but not limited to reasonable and
documented settlement expenses), joint or several, that ▇▇▇▇ or any of them may
suffer or to which ▇▇▇▇ and any such persons may become subject under all
applicable federal or state laws or otherwise, and to promptly reimburse ▇▇▇▇
and any such persons upon written demand for any expense (including reasonable
and documented fees and disbursements of counsel) incurred by ▇▇▇▇ or any of
them in connection with investigating, preparing or defending any actions,
proceedings or claims (whether commenced or threatened) to the extent such
losses, claims, damages, liabilities or actions: (i) arise out of or are based
upon any untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement (or any amendment or supplement
thereto), preliminary or final Prospectus (or any amendment or supplement
thereto), the Conversion Application (or any amendment or supplement thereto),
the Holding Company Application or any blue sky application or other instrument
or document executed by the Company or the Bank or based upon written
information supplied by the Company or the Bank filed in any state or
jurisdiction to register or qualify any or all of the Shares or to claim an
exemption therefrom, or provided to any state or jurisdiction to exempt the
Company as a broker-dealer or its officers, directors and employees as
broker-dealers or agents, under the securities laws thereof (collectively, the
"Blue Sky Application"), or any application or other document, advertisement,
oral statement or communication ("Sales Information") prepared, made or executed
by or on behalf of the Company or the Bank with their consent or based upon
written or oral information furnished by or on behalf of the Company or the
Bank, whether or not filed in any jurisdiction, in order to qualify or register
the Shares or to claim an exemption therefrom under the securities laws thereof;
(ii) arise out of or based upon the omission or alleged omission to state in any
of the foregoing documents or information, a material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading; or (iii) arise from
any theory of liability whatsoever relating to or arising from or based upon the
Registration Statement (or any amendment or supplement thereto), preliminary or
final Prospectus (or any amendment or supplement thereto), the Conversion
Application (or any amendment or supplement thereto), any Blue Sky Application
or Sales Information or other documentation distributed in connection with the
Conversion; PROVIDED, HOWEVER, that no indemnification is required under this
paragraph (a) to the extent such losses, claims, damages, liabilities or actions
arise out of or are based upon ▇▇▇▇'▇ ▇▇▇▇▇ negligence, bad faith or willful
misconduct (as determined in a final judgment by a court of competent
jurisdiction) or upon any untrue material statement or alleged untrue material
statements in, or material omission or alleged material omission from, the
Registration Statement (or any amendment or supplement thereto), preliminary or
final Prospectus (or any amendment or supplement thereto), the Conversion
Application, any Blue Sky Application or Sales Information made
-30-
in reliance upon and in conformity with information furnished in writing to the
Company or the Bank by ▇▇▇▇ regarding ▇▇▇▇ or statistical information regarding
national averages provided by ▇▇▇▇ for the Sales Information and PROVIDED
FURTHER that such indemnification shall be to the extent permitted by the OTS.
(b) ▇▇▇▇ agrees to indemnify and hold harmless the Company and the Bank,
their directors and officers and each person, if any, who controls the Company
or the Bank within the meaning of Section 15 of the 1933 Act or Section 20(a) of
the 1934 Act against any and all loss, liability, claim, damage or expense
whatsoever (including but not limited to reasonable and documented settlement
expenses), joint or several, which it, or any of them, may suffer or to which
it, or any of them may become subject under all applicable federal and state
laws or otherwise, and to promptly reimburse the Company, the Bank, and any such
persons upon written demand for any expenses (including reasonable and
documented fees and disbursements of counsel) incurred by it, or any of them, in
connection with investigating, preparing or defending any actions, proceedings
or claims (whether commenced or threatened) to the extent such losses, claims,
damages, liabilities or actions arise out of or are based upon any untrue
statement or alleged untrue statement of a material fact contained in the
Registration Statement (or any amendment or supplement thereto), the Conversion
Application (or any amendment or supplement thereto) or the preliminary or final
Prospectus (or any amendment or supplement thereto), or are based upon the
omission or alleged omission to state in any of the foregoing documents a
material fact required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading; PROVIDED, HOWEVER, that ▇▇▇▇'▇ obligations under this Section 8(b)
shall exist only if and only to the extent that such untrue statement or alleged
untrue statement was made in, or such material fact or alleged material fact was
omitted from, the Registration Statement (or any amendment or supplement
thereto), the preliminary or final Prospectus (or any amendment or supplement
thereto) or the Conversion Application (or any amendment or supplement thereto),
any Blue Sky Application or Sales Information in reliance upon and in conformity
with information furnished in writing to the Company or the Bank by ▇▇▇▇
regarding ▇▇▇▇ or statistical information regarding national averages provided
by ▇▇▇▇ 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
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indemnifying party. If an indemnifying party assumes the defense of such action,
the indemnifying parties shall not be liable for any fees and expenses of
counsel for the indemnified parties incurred thereafter in connection with such
action, proceeding or claim, other than reasonable costs of investigation. In no
event shall the indemnifying parties be liable for the fees and expenses of more
than one separate firm of attorneys (and any special counsel that said firm may
retain) for each indemnified party in connection with any one action, proceeding
or claim or separate but similar or related actions, proceeding or claim or
separate but similar or related actions, proceedings or claims in the same
jurisdiction arising out of the same general allegations or circumstances.
(d) The agreements contained in this Section 8 and in Section 9 hereof and
the representations and warranties of the Company and the Bank set forth in this
Agreement shall remain operative and in full force and effect regardless of: (i)
any investigation made by or on behalf of ▇▇▇▇ or its officers, directors or
controlling persons, agents or employees or by or on behalf of the Company or
the Bank or any officers, directors or controlling persons, agents or employees
of the Company or the Bank; (ii) delivery of and payment hereunder for the
Shares; or (iii) any termination of this Agreement.
Section 9. Contribution. In order to provide for just and equitable
contribution in circumstances in which the indemnification provided for in
Section 8 is due in accordance with its terms but is for any reason held by a
court to be unavailable from the Company, the Bank or ▇▇▇▇, the Company, the
Bank and ▇▇▇▇ shall contribute to the aggregate losses, claims, damages and
liabilities (including any investigation, legal and other expenses incurred in
connection with, and any amount paid in settlement of, any action, suit or
proceeding of any claims asserted, but after deducting any contribution received
by the Company, the Bank or ▇▇▇▇ from persons other than the other party
thereto, who may also be liable for contribution) in such proportion so that
▇▇▇▇ is responsible for that portion represented by the percentage that the fees
paid to ▇▇▇▇ pursuant to Section 2 of this Agreement (not including expenses)
bears to the gross proceeds received by the Company from the sale of the Shares
in the Offering and the Company and the Bank shall be responsible for the
balance. If, however, the allocation provided above is not permitted by
applicable law or if the indemnified party failed to give the notice required
under Section 8 above, then each indemnifying party shall contribute to such
amount paid or payable by such indemnified party in such proportion as is
appropriate to reflect not only such relative fault of the Company and the Bank
on the one hand and ▇▇▇▇ on the other in connection with the statements or
omissions which resulted in such losses, claims, damages or liabilities (or
actions, proceedings or claims in respect thereto), but also the relative
benefits received by the Company and the Bank on the one hand and ▇▇▇▇ on the
other from the Offering (before deducting expenses). The relative fault shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by the Company and/or the Bank
on the one hand or ▇▇▇▇ on the other and the parties' relative intent, good
faith, knowledge, access to information and opportunity to correct or prevent
such statement or omission. The Company, the Bank and ▇▇▇▇ agree that it would
not be
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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 ▇▇▇▇ shall not be required to contribute any amount
which in the aggregate exceeds the amount paid (excluding reimbursable expenses)
to ▇▇▇▇ under this Agreement. It is understood that the above stated limitation
on ▇▇▇▇'▇ liability for contribution is essential to ▇▇▇▇ and that ▇▇▇▇ 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 ▇▇▇▇ ▇▇▇) shall be
entitled to contribution from any person who was not found guilty of such
fraudulent misrepresentation. The obligations of the Company and the Bank under
this Section 9 and under Section 8 shall be in addition to any liability which
the Company and the Bank may otherwise have. For purposes of this Section 9,
each of ▇▇▇▇'▇, the Company's or the Bank's officers and directors and each
person, if any, who controls ▇▇▇▇ or the Company or the Bank within the meaning
of the 1933 Act and the 1934 Act shall have the same rights to contribution as
▇▇▇▇, the Company or the Bank. Any party entitled to contribution, promptly
after receipt of notice of commencement of any action, suit, claim or proceeding
against such party in respect of which a claim for contribution may be made
against another party under this Section 9, will notify such party from whom
contribution may be sought, but the omission to so notify such party shall not
relieve the party from whom contribution may be sought from any other obligation
it may have hereunder or otherwise than under this Section 9.
Section 10. Survival of Agreements, Representations and Indemnities. The
respective indemnities of the Company, the Bank and ▇▇▇▇ and the representations
and warranties and other statements of the Company, the Bank and ▇▇▇▇ 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 ▇▇▇▇, the Company, the Bank or any
controlling person referred to in Section 8 hereof, and shall survive the
issuance of the Shares, and any legal representative, successor or assign of
▇▇▇▇, the Company, the Bank, and any such controlling person shall be entitled
to the benefit of the respective agreements, indemnities, warranties and
representations.
Section 11. Termination. ▇▇▇▇ 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 March 31,
1998, and in accordance with the provisions of the Plan or as required by the
Conversion Regulations, and applicable law, this Agreement shall terminate upon
refund by the Bank to each person
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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 Bank as set forth
in Sections 2(a) and (d), 6, 8 and 9 hereof.
(b) If any of the conditions specified in Section 7 shall not have been
fulfilled when and as required by this Agreement, unless waived in writing, by
the Closing Date, this Agreement and all of ▇▇▇▇'▇ obligations hereunder may be
cancelled by ▇▇▇▇ by notifying the Company and the Bank of such cancellation in
writing at any time at or prior to the Closing Date, and any such cancellation
shall be without liability of any party to any other party except as otherwise
provided in Sections 2, 6, 8 and 9 hereof.
(c) If ▇▇▇▇ elects to terminate this Agreement with respect to it as
provided in this Section, the Company and the Bank shall be notified promptly by
such Agent by telephone or telegram, confirmed by letter.
The Company and the Bank may terminate this Agreement with respect to ▇▇▇▇
in the event ▇▇▇▇ is in material breach of the representations and warranties or
covenants contained in Section 5 and such breach has not been cured after the
Company and the Bank have provided ▇▇▇▇ 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 ▇▇▇▇
shall be mailed, delivered or telegraphed and confirmed to ▇▇▇▇▇▇▇ ▇▇▇▇ &
Company, ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, Attention: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
(with a copy to Elias, Matz, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ L.L.P., ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.,
▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇ Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.) and, if
sent to the Company and the Bank, shall be mailed, delivered or telegraphed and
confirmed to the Company and the Bank at Oregon Trail Financial Corp., ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇ ▇. ▇▇▇▇▇▇, President
(with a copy to Breyer & Aguggia, ▇▇▇▇ ▇ ▇▇▇▇▇▇, ▇.▇., ▇▇▇▇▇ ▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇, Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇., Esq.).
Section 13. Parties. The Company and the Bank shall be entitled to act and
rely on any request, notice, consent, waiver or agreement purportedly given on
behalf of ▇▇▇▇ when the same shall have been given by the undersigned. ▇▇▇▇
shall be entitled to act and rely on any request, notice, consent, waiver or
agreement purportedly given on behalf of the Company or the Bank, when the same
shall have been given by the undersigned or any other officer of the Company or
the Bank. This Agreement shall inure solely to the benefit of, and shall be
binding upon, ▇▇▇▇, the Company, the Bank, and their respective successors,
legal representatives and assigns, and no other person shall have or be
construed
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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 ▇▇▇▇ and
the Company and the Bank. At the closing, the Company and the Bank shall deliver
to ▇▇▇▇ in next day funds the commissions, fees and expenses due and owing to
▇▇▇▇ as set forth in Sections 2 and 6 hereof and the opinions and certificates
required hereby and other documents deemed reasonably necessary by ▇▇▇▇ shall be
executed and delivered to effect the sale of the Shares as contemplated hereby
and pursuant to the terms of the Prospectus.
Section 15. Partial Invalidity. In the event that any term, provision or
covenant herein or the application thereof to any circumstance or situation
shall be invalid or unenforceable, in whole or in part, the remainder hereof and
the application of said term, provision or covenant to any other circumstances
or situation shall not be affected thereby, and each term, provision or covenant
herein shall be valid and enforceable to the full extent permitted by law.
Section 16. Construction. This Agreement shall be construed in accordance
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.
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If the foregoing correctly sets forth the arrangement among the Company,
the Bank and ▇▇▇▇, please indicate acceptance thereof in the space provided
below for that purpose, whereupon this letter and ▇▇▇▇'▇ acceptance shall
constitute a binding agreement.
Very truly yours,
OREGON TRAIL FINANCIAL CORP. PIONEER BANK, a FEDERAL SAVINGS
BANK
By: By:
--------------------------- ---------------------------
▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇ ▇. ▇▇▇▇▇▇
President and Chief President and Chief
Executive Officer Executive Officer
Accepted as of the date first above written
▇▇▇▇▇▇▇ ▇▇▇▇ & COMPANY
A DIVISION OF ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇, INC.
By:
---------------------------
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Executive Vice President
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