EXHIBIT 2.1
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER, dated as of this 8th day of December,
1998 (this "Plan"), by and among HEADLANDS MORTGAGE COMPANY, a California
corporation ("Headlands"), GREENPOINT FINANCIAL CORP., a Delaware corporation
("GreenPoint"), and GF ACQUISITION CORP., a Delaware corporation and wholly-
owned subsidiary of GreenPoint ("Merger Sub").
RECITALS
WHEREAS, the respective Boards of Directors of each of Headlands,
GreenPoint, and Merger Sub have determined that the merger of Merger Sub with
and into Headlands upon the terms and subject to the conditions set forth in
this Plan (the "Merger") is in the best interests of their respective companies
and their stockholders;
WHEREAS, as an inducement and condition to the willingness of
GreenPoint and Merger Sub to pursue the transactions contemplated by this Plan,
immediately prior to the execution hereof Headlands and GreenPoint entered into
and delivered a stock option agreement in the form attached hereto as Exhibit A
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(the "Stock Option Agreement");
WHEREAS, as an inducement and condition to the willingness of
GreenPoint and Merger Sub to pursue the transactions contemplated by this Plan,
immediately prior to the execution hereof certain of Headlands's directors
(and/or related trusts) entered into and delivered support agreements in the
form attached hereto as Exhibit B (the "Support Agreements");
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WHEREAS, immediately prior to the execution hereof, GreenPoint entered
into employment and restrictive covenant agreements (the "Employee Agreements")
with each of the following officers of Headlands providing, among other things,
for their employment by GreenPoint and/or Headlands, as the case may be,
effective upon consummation of the Merger: Xxxxx X. Xxxx, Xxxxxxx X. XxxXxxxxxx,
Xxxxx X. Xxxxxxx and Xxxxxx X. Xxxxx;
WHEREAS, it is the intention of the parties to this Plan that the
business combination contemplated hereby be treated as a "reorganization" under
Section 368(a) of the Internal Revenue Code of 1986, as amended (the "Code") and
be accounted
for as a "pooling of interests" under generally accepted accounting principles
("GAAP");
WHEREAS, it is the intention of the parties to this Plan that the
stock of the surviving corporation in the Merger be contributed by GreenPoint to
GreenPoint Bank, a New York State chartered savings bank and wholly-owned
subsidiary of GreenPoint ("GreenPoint Bank"); and
WHEREAS, Headlands, GreenPoint and Merger Sub desire to make certain
representations, warranties, covenants and agreements in connection with this
Plan;
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants, representations, warranties and agreements contained herein, the
parties hereto agree as follows:
ARTICLE I.
CERTAIN DEFINITIONS
1.1. Certain Definitions. The following terms are used in this Plan
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with the meanings set forth below:
"Acquisition Proposal" means any tender or exchange offer, proposal
for a merger, consolidation or other business combination involving
Headlands or its Subsidiaries or any proposal or offer to acquire in any
manner a substantial equity interest in, or a substantial portion of the
assets of, Headlands or its Subsidiaries, other than the transactions
contemplated by this Plan.
"Affiliate" or "affiliate" as applied to any Person, means any Person
that directly or indirectly through one or more intermediaries, controls,
is controlled by, or is under common control with the aforementioned
Person, whether such control is through stock ownership, contract or
otherwise.
"Agency" has the meaning set forth in Section 4.1(n).
"CGCL" means the General Corporation Law of the State of California.
"Code" has the meaning set forth in the Recitals to this Plan.
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"Compensation and Benefit Plans" has the meaning set forth in Section
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5.3(l)(i).
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"Consultants" has the meaning set forth in Section 5.3(l)(i).
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"Contribution" has the meaning set forth in the Section 2.2.
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"Directors" has the meaning set forth in Section 5.3(l)(i).
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"Disclosure Schedule" has the meaning set forth in Section 5.1.
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"DGCL" means the General Corporation Law of the State of Delaware.
"DOL" means the Department of Labor.
"Effective Date" has the meaning set forth in Section 2.3.
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"Effective Time" has the meaning set forth in Section 2.3.
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"Employee Agreements" has the meaning set forth in the Recitals to
this Plan.
"Employees" has the meaning set forth in Section 5.3(l)(i).
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"Environmental Laws" means all applicable local, state and federal
environmental, health and safety laws and regulations, including, without
limitation, the Resource Conservation and Recovery Act, the Comprehensive
Environmental Response, Compensation, and Liability Act, the Clean Water
Act, the Federal Clean Air Act, and the Occupational Safety and Health Act,
each as amended, regulations promulgated thereunder, and state
counterparts.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"ERISA Affiliate" has the meaning set forth in Section 5.3(l)(iii).
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"ERISA Affiliate Plan" has the meaning set forth in Section
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5.3(l)(iii).
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"Exchange Act" means the Securities Exchange Act of 1934, as amended,
and the rules and regulations thereunder.
"Exchange Agent" has the meaning set forth in Section 3.4.
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"Exchange Ratio" has the meaning set forth in Section 3.1(b).
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"FDIC" means the Federal Deposit Insurance Corporation.
"Federal Reserve Board" means the Board of Governors of the Federal
Reserve System.
"FHA" has the meaning set forth in Section 4.1(n).
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"FHLMC" has the meaning set forth in Section 4.1(n).
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"FNMA" has the meaning set forth in Section 4.1(n).
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"GAAP" has the meaning set forth in the Recitals to this Plan.
"GNMA" has the meaning set forth in Section 4.1(n).
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"Governmental Authority" means any court, administrative agency or
commission or other federal, state or local governmental authority or
instrumentality.
"GreenPoint" has the meaning set forth in the preamble to this Plan.
"GreenPoint Bank" has the meaning set forth in the Recitals to this
Plan.
"GreenPoint Common Stock" means the common stock, par value $0.01 per
share, of GreenPoint.
"Headlands" has the meaning set forth in the preamble to this Plan.
"Headlands Affiliate" has the meaning set forth in Section 6.7(a).
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"Headlands Board" means the Board of Directors of Headlands.
"Headlands Bylaws" means the Bylaws of Headlands.
"Headlands Certificate" means the Articles of Incorporation of
Headlands.
"Headlands Common Stock" means the common stock, without par value, of
Headlands.
"Headlands Meeting" has the meaning set forth in Section 6.2.
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"Headlands Preferred Stock" means the preferred stock, without par
value of Headlands.
"Headlands Stock Option" has the meaning set forth in Section 3.6.
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"Headlands Stock Plans" means the 1997 Executive and Non-Employee
Director Stock Option Plan and the 1998 Employee Stock Purchase Plan.
"HMSI" means Headlands Mortgage Securities, Inc. and any predecessor
thereto.
"HSR Act" means the Xxxx-Xxxxx-Xxxxxx Anti-Trust Improvements Act of
1976, as amended, and the rules and regulations promulgated thereunder.
"HUD" has the meaning set forth in Section 4.1(n).
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"Indemnified Party" has the meaning set forth in Section 6.12(a).
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"Insurance Policies" has the meaning set forth in Section 5.3(s).
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"Insurer" has the meaning set forth in Section 5.3(u)(iii).
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"Investor" has the meaning set forth in Section 5.3(u)(iii).
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"IRS" means the Internal Revenue Service.
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"Liens" means any charge, mortgage, pledge, security interest,
restriction, claim, lien, or encumbrance.
"Loan" has the meaning set forth in Section 5.3(u)(ii).
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"Loan Servicing Agreement" has the meaning set forth in Section
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5.3(u)(v).
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"Material Adverse Effect" means, with respect to GreenPoint or
Headlands, any effect that (i) is, or is reasonably likely to be, material
and adverse to the financial position, results of operations or business of
GreenPoint and its Subsidiaries taken as a whole or Headlands and its
Subsidiaries taken as a whole, respectively, or (ii) would, or is
reasonably likely to, materially impair the ability of either GreenPoint or
Headlands to perform its obligations under this Plan or otherwise
materially threaten or materially impede the consummation of the Merger and
the other transactions contemplated by this Plan other than to the extent
such effect results from changes in (i) U.S. or global economic or industry
conditions generally, (ii) the U.S. or global financial markets generally,
(iii) the general levels of interest rates, (iv) any generally applicable
law, rule or regulation or interpretation thereof by any Governmental
Authority or (v) GAAP or regulatory accounting requirements of general
applicability.
"Merger" has the meaning set forth in the Recitals to this Plan.
"Merger Consideration" has the meaning set forth in Section 2.1.
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"Merger Sub" has the meaning set forth in the preamble to this Plan.
"Merger Sub Common Stock" means the common stock, par value $0.01 per
share, of Merger Sub.
"New Certificate" has the meaning set forth in Section 3.4(a).
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"NYSE" means the New York Stock Exchange, Inc.
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"Old Certificates" has the meaning set forth in Section 3.4.
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"PBGC" means the Pension Benefit Guaranty Corporation.
"Pension Plan" has the meaning set forth in Section 5.3(l)(ii).
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"Person" means any individual, bank, corporation, partnership,
association, joint-stock company, business trust or unincorporated
organization.
"Plan" has the meaning set forth in the preamble to this Plan, as
amended or modified from time to time in accordance with Section 9.2.
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"Pool" has the meaning set forth in Section 5.3(u)(xi).
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"Previously Disclosed" by a party shall mean information set forth in
the correspondingly enumerated section of its Disclosure Schedule.
"Proxy Statement" has the meaning set forth in Section 6.3(a).
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"Registration Statement" has the meaning set forth in Section 6.3(a).
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"Regulatory Authority" has the meaning set forth in Section
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5.3(g)(ii).
"Replacement Option" has the meaning set forth in Section 3.6.
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"Rights" means, with respect to any Person, securities or obligations
convertible into or exercisable or exchangeable for, or giving any Person
any right to subscribe for or acquire, or any options, calls or commitments
relating to, or any stock appreciation right or other instrument the value
of which is determined in whole or in part by reference to the market price
or value of, shares of capital stock of such Person.
"SEC" means the Securities and Exchange Commission.
"SEC Documents" has the meaning set forth in Section 5.3(g)(i).
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"Securities Act" means the Securities Act of 1933, as amended, and the
rules and regulations thereunder.
"Securitization Instruments" has the meaning set forth in Section
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5.3(u)(xii).
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"Securitization Servicer" has the meaning set forth in Section
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5.3(u)(xii).
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"Securitization Transaction" has the meaning set forth in Section
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5.3(u)(xii).
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"Serviced Loans" has the meaning set forth in Section 5.3(u)(iii).
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"SRO" has the meaning set forth in Section 5.3(g).
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"Stock Option Agreement" has the meaning set forth in the Recitals to
this Plan.
"Subsidiary" and "Significant Subsidiary" have the meanings ascribed
to them in Rule 1-02 of Regulation S-X of the SEC.
"Support Agreements" has the meaning set forth in the Recitals to this
Plan.
"Surviving Corporation" has the meaning set forth in Section 2.1.
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"Takeover Laws" has the meaning set forth in Section 5.3(n).
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"Tax" and "Taxes" means all federal, state, local or foreign taxes,
charges, fees, levies or other assessments, however denominated, including,
without limitation, all net income, gross income, gains, gross receipts,
sales, use, ad valorem, goods and services, capital, production, transfer,
franchise, windfall profits, license, withholding, payroll, employment,
disability, employer health, excise, estimated, severance, stamp,
occupation, property, environmental, unemployment or other taxes, custom
duties, fees, assessments or charges of any kind whatsoever, together with
any interest and any penalties, additions to tax or additional amounts
imposed by any taxing authority whether arising before, on or after the
Effective Date.
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"Tax Agreement" has the meaning set forth in Section 5.3(p)(iii).
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"Tax Returns" means any return, amended return or other report
(including elections, declarations, disclosures, schedules, estimates and
information returns) required to be filed with respect to any Tax.
"Warehouse Loans" has the meaning set forth in Section 5.3(u)(ii).
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ARTICLE II.
THE MERGER
2.1. The Merger. At the Effective Time, Merger Sub shall merge
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with and into Headlands in accordance with, and having the effects specified
in, this Plan, the CGCL and the DGCL. Headlands shall be the surviving
corporation in the Merger and shall become a wholly-owned subsidiary of
GreenPoint and, after the Contribution, shall become a wholly-owned subsidiary
of GreenPoint Bank (Headlands, as the surviving corporation in the Merger,
sometimes referred to as the "Surviving Corporation"). The separate corporate
existence of Merger Sub shall cease upon consummation of the Merger.
GreenPoint may at any time prior to the Effective Time change the method of
effecting the combination with Headlands (including, without limitation, the
provisions of this Article II) if and to the extent it deems such change to be
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necessary, appropriate or desirable; provided, however, that no such change
shall (i) alter or change the amount or kind of consideration to be issued to
holders of Headlands Common Stock or to holders of Headlands Stock Options as
provided for in this Plan (the "Merger Consideration"), (ii) adversely affect
the tax treatment of Headlands's stockholders as a result of receiving the
Merger Consideration or (iii) be reasonably likely to materially impede or
delay consummation of the transactions contemplated by this Plan.
(a) Effectiveness of the Merger. Subject to the satisfaction or
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waiver of the conditions set forth in Article VII, the Merger shall become
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effective upon the occurrence of the valid filing with the Secretary of State
of the State of California of an agreement of merger and an appropriate
officer's certificate in accordance with Section 1108 of the CGCL and the
valid filing with the Secretary of State of the State of Delaware
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of a certificate of merger in accordance with Section 252 of the DGCL or such
later date and time as may be set forth in such documents.
(b) Articles of Incorporation and Bylaws. The articles of
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incorporation and bylaws of the Surviving Corporation initially shall be those
of Headlands as in effect immediately prior to the Effective Time.
(c) Directors and Officers of the Surviving Corporation. The
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directors and officers of the Surviving Corporation immediately after the
Merger initially shall be the directors and officers of Headlands immediately
prior to the Effective Time, until such time as their successors shall be duly
elected and qualified.
2.2. The Contribution. No sooner than following the Effective Time,
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GreenPoint intends to contribute all of the issued and outstanding capital stock
of the Surviving Corporation to GreenPoint Bank and the Surviving Corporation
shall thereafter cease to be a direct Subsidiary of GreenPoint and shall become
a wholly-owned operating subsidiary of GreenPoint Bank (the "Contribution").
2.3. Effective Date and Effective Time. Subject to the satisfaction
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or waiver of the conditions set forth in Article VII, the parties shall cause
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the effective date of the Merger (the "Effective Date") to occur on (i) the
fifth business day to occur after the last of the conditions set forth in
Article VII shall have been satisfied or waived in accordance with the terms of
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this Plan (or, at the election of GreenPoint, on the last business day of the
month in which such day occurs or, if such last business day occurs on one of
the last five business days of such month, on the last business day of the
succeeding month; provided, however, that if GreenPoint elects to continue the
Effective Date until the last business day of either such month, the shares of
GreenPoint Common Stock to be issued to holders of Headlands Common Stock shall
include the right to receive dividends or other distributions declared on
GreenPoint Common Stock having a record date occurring after such fifth business
day) or (ii) such other date to which the parties may agree in writing. The
time on the Effective Date when the Merger shall become effective is referred to
as the "Effective Time."
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ARTICLE III.
CONSIDERATION; EXCHANGE PROCEDURES
3.1. Merger Consideration. Subject to the provisions of this Plan,
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at the Effective Time, automatically by virtue of the Merger and without any
action on the part of any Person:
(a) Outstanding Common Stock of Merger Sub. Each share of Merger
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Sub Common Stock issued and outstanding immediately prior to the Effective
Time shall cease to be outstanding and shall be converted into one share of
Headlands Common Stock.
(b) Outstanding Headlands Common Stock. Each share of Headlands
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Common Stock issued and outstanding immediately prior to the Effective Time
(other than shares of Headlands Common Stock held directly or indirectly by
Headlands or GreenPoint or any of their respective Subsidiaries (except for
shares held by Headlands or GreenPoint or any of their respective Subsidiaries
in a fiduciary capacity for the benefit of third parties or in respect of a
debt previously contracted)) shall, by virtue of the Merger, automatically and
without any action on the part of the holder thereof, become and be converted
into the right to receive 0.620 (the "Exchange Ratio") shares of GreenPoint
Common Stock. The Exchange Ratio will be subject to adjustment as set forth in
Section 3.5.
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(c) Outstanding GreenPoint Common Stock. Each share of GreenPoint
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Common Stock issued and outstanding immediately prior to the Effective Time
shall remain issued and outstanding and shall not be affected by the Merger.
3.2. Rights as Stockholders; Stock Transfers. At the Effective Time,
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holders of Headlands Common Stock shall cease to be, and shall have no rights
as, stockholders of Headlands, other than the right to receive the Merger
Consideration. After the Effective Time, there shall be no transfers on the
stock transfer books of Headlands or the Surviving Corporation of shares of
Headlands Common Stock.
3.3. Fractional Shares. Notwithstanding any other provision hereof,
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no fractional shares of GreenPoint Common Stock and no certificates or scrip
therefor, or other evidence of ownership thereof, will be issued in the Merger;
instead, GreenPoint shall pay to each holder of Headlands Common Stock who
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would otherwise be entitled to a fractional share of GreenPoint Common Stock
(after taking into account all Old Certificates delivered by such holder) an
amount in cash (without interest) determined by multiplying such fraction by
the average of the last sale prices of GreenPoint Common Stock, as reported by
the NYSE Composite Transactions Reporting System (as reported in The Wall
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Street Journal or, if not reported therein, in another authoritative source),
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for the five consecutive NYSE trading days immediately preceding the Effective
Date.
3.4. Exchange Procedures.
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(a) As promptly as practicable after the Effective Date, but in no
event later than 5 Business Days thereafter, GreenPoint shall send or cause to
be sent to each former holder of record of shares of Headlands Common Stock
immediately prior to the Effective Time transmittal materials for use in
exchanging such stockholder's certificates formerly representing shares of
Headlands Common Stock (the "Old Certificates") for the Merger Consideration.
GreenPoint shall cause the certificates representing the shares of GreenPoint
Common Stock (the "New Certificates") and/or any check in respect of any
fractional share interests or dividends or distributions which such
stockholder shall be entitled to receive to be delivered to ChaseMellon
Shareholder Services L.L.C., as exchange agent (the "Exchange Agent"), at the
Effective Time, for delivery by the Exchange Agent to each such stockholder
upon delivery by such stockholder to the Exchange Agent of Old Certificates
representing such shares of Headlands Common Stock (or indemnity reasonably
satisfactory to GreenPoint and the Exchange Agent, if any of such certificates
are lost, stolen or destroyed) owned by such stockholder. No interest will be
paid on any such cash to be paid in lieu of fractional share interests or in
respect of dividends or distributions which any such person shall be entitled
to receive pursuant to this Article III upon such delivery.
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(b) Notwithstanding the foregoing, neither the Exchange Agent nor any
party hereto shall be liable to any former holder of Headlands Common Stock
for any amount properly delivered to a public official pursuant to applicable
abandoned property, escheat or similar laws.
(c) At the election of GreenPoint, no dividends or other
distributions with respect to GreenPoint Common Stock with a
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record date occurring after the Effective Time (or dividends or other
distributions accruing pursuant to Section 2.3) shall be paid to the holder of
any unsurrendered Old Certificate representing shares of Headlands Common Stock
converted in the Merger into the right to receive shares of such GreenPoint
Common Stock until the holder thereof shall be entitled to receive New
Certificates in exchange therefor in accordance with the procedures set forth
in this Section 3.4. After becoming so entitled in accordance with this Section
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3.4, the record holder thereof also shall be entitled to receive any such
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dividends or other distributions, without any interest thereon, which
theretofore had become payable with respect to shares of GreenPoint Common
Stock such holder had the right to receive upon surrender of the Old
Certificate.
3.5. Anti-Dilution Provisions. In the event GreenPoint changes (or
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establishes a record date for changing) the number of shares of GreenPoint
Common Stock issued and outstanding prior to the Effective Date as a result of a
stock split, stock dividend, recapitalization, reclassification or exchange or
readjustment of shares or similar transaction with respect to the outstanding
GreenPoint Common Stock and the record date therefor shall be prior to the
Effective Date, the Exchange Ratio shall be proportionately adjusted.
3.6. Options. At the Effective Time, each outstanding option to
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purchase shares of Headlands Common Stock under the Headlands Stock Plans (each,
a "Headlands Stock Option"), whether vested or unvested, shall be converted into
an option to acquire, on the same terms and conditions as were applicable under
such Headlands Stock Option, the number of shares of GreenPoint Common Stock
equal to (a) the number of shares of Headlands Common Stock subject to the
Headlands Stock Option, multiplied by (b) the Exchange Ratio (such product
rounded to the nearest whole number) (a "Replacement Option"), at an exercise
price per share (rounded to the nearest whole cent) equal to (y) the aggregate
exercise price for the shares of Headlands Common Stock which were purchasable
pursuant to such Headlands Stock Option divided by (z) the number of full shares
of GreenPoint Common Stock subject to such Replacement Option in accordance with
the foregoing. At or prior to the Effective Time, GreenPoint shall take all
corporate action necessary to reserve for issuance a sufficient number of shares
of GreenPoint Common Stock for delivery upon exercise of the Headlands Stock
Options assumed by it in accordance with this Section 3.6. As soon as
reasonably
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practicable after the Effective Time, GreenPoint shall file a registration
statement on Form S-3 or Form S-8, as the case may be (or any successor or
other appropriate forms), or another appropriate form (or shall cause such
Headlands Stock Options to be deemed to be an option issued pursuant to a
GreenPoint stock option or compensation plan for which a sufficient number of
shares of GreenPoint Common Stock have previously been registered pursuant to
an appropriate registration form) with respect to the shares of GreenPoint
Common Stock subject to such Headlands Stock Options, and shall use its
reasonable best efforts to maintain the effectiveness of such registration
statement(s) (and maintain the current status of the prospectus(es) contained
therein) for so long as such Headlands Stock Options remain outstanding.
Notwithstanding the foregoing, each Headlands Stock Option which is intended
to be an "incentive stock option" (as defined in Section 422 of the Code)
shall be adjusted in accordance with the requirements of Section 424 of the
Code. At or prior to the Effective Time, Headlands shall take all action, if
any, necessary with respect to the Headlands Stock Plans to permit the
replacement of the outstanding Headlands Stock Options by GreenPoint pursuant
to this Section 3.6. At the Effective Time, GreenPoint shall assume the 1997
Executive and Non-Employee Director Stock Option Plan; provided, that such
assumption shall be only in respect of the Replacement Options and that
GreenPoint shall have no obligation with respect to any awards under the
Headlands Stock Plans other than the Replacement Options and shall have no
obligation to make any additional grants or awards under such assumed
Headlands Stock Plans.
(b) With respect to the 1998 Employee Stock Purchase Plan, no new
purchase periods will begin after December 31, 1998.
ARTICLE IV.
ACTIONS PENDING ACQUISITION
4.1. Forebearances of Headlands. From the date hereof until the
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Effective Time, except as expressly contemplated by this Plan or as Previously
Disclosed, without the prior written consent of GreenPoint, Headlands will not,
and will cause its Subsidiaries not to:
(a) Ordinary Course. Conduct the business of Headlands and its
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Subsidiaries other than in the ordinary and usual course or fail to use
reasonable efforts to preserve intact their business
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organizations and assets and maintain their rights, franchises and existing
relations with customers, suppliers, employees and business associates, or
take any action reasonably likely to have an adverse affect upon Headlands's
ability to perform any of its material obligations under this Plan.
(b) Capital Stock. Other than pursuant to Rights Previously
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Disclosed and outstanding on the date hereof, (i) issue, sell or otherwise
permit to become outstanding (including pursuant to any Compensation and
Benefit Plan qualified under Section 401(k) of the Code to the extent such
Compensation and Benefit Plan offers Headlands Common Stock as an investment
option), or authorize the creation of, any additional shares of Headlands
Common Stock or any Rights, (ii) enter into any agreement with respect to the
foregoing, or (iii) permit any additional shares of Headlands Common Stock to
become subject to new grants of employee or director stock options, other
Rights or similar stock-based employee rights.
(c) Dividends, Etc. (a) Make, declare, pay or set aside for payment
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any dividend (other than dividends from Headlands' Subsidiaries to Headlands)
on or in respect of, or declare or make any distribution on, any shares of
Headlands Common Stock or (b) directly or indirectly adjust, split, combine,
redeem, reclassify, purchase or otherwise acquire, any shares of its capital
stock.
(d) Compensation; Employment Agreements; Etc. Enter into or amend
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or renew any employment, consulting, severance or similar agreements or
arrangements with any director, officer, employee or consultant of Headlands
or its Subsidiaries, or grant any salary or wage increase or increase any
employee benefit (including incentive or bonus payments), except (i) for
normal individual increases in compensation to employees in the ordinary
course of business consistent with past practice or Previously Disclosed bonus
payments to be paid to employees in the ordinary course of business consistent
with past practice, (ii) for other changes that are required by applicable
law, or (iii) to satisfy Previously Disclosed contractual obligations existing
as of the date hereof.
(e) Benefit Plans. Enter into, establish, adopt, terminate or
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amend, any bonus, incentive, deferred compensation, pension, retirement,
profit-sharing, thrift, savings, employee stock ownership, stock bonus, stock
purchase, restricted stock, stock
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option, severance, welfare and fringe benefit plans, group insurance or other
employee benefit, compensation, incentive or welfare benefit contract, plan or
arrangement, or any trust agreement (or similar arrangement) related thereto,
in respect of any current or former director, officer, employee or consultant
of Headlands or its Subsidiaries, or take any action to accelerate the vesting
or exercisability of stock options, restricted stock or other compensation or
benefits payable thereunder, except, in each case as may be required by
applicable law or to satisfy Previously Disclosed contractual obligations
existing as of the date hereof.
(f) Dispositions. Except as Previously Disclosed, (i) sell,
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transfer, mortgage, lease, encumber or otherwise dispose of or discontinue any
material portion of its assets, business or properties, (ii) sell, assign or
otherwise transfer any rights to service loans, other than servicing rights in
respect of first mortgage loans held by Headlands or its Subsidiaries (a) on a
retail basis or (b) on a wholesale basis where such wholesale loans are jumbo
loans, adjustable rate mortgage loans, or other wholesale mortgage loans
registered with private investors, in each case where such sales are in a
manner consistent with past practice, or (iii) except in the ordinary course
of business and in a manner consistent with past practice, sell, transfer,
lease or encumber any loan.
(g) Acquisitions. Except as Previously Disclosed, (i) acquire
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(other than by way of foreclosures or acquisitions of control in a bona fide
fiduciary capacity or in satisfaction of debts previously contracted in good
faith, in each case in the ordinary and usual course of business consistent
with past practice) all or any portion of, the assets, business, deposits or
properties of any other entity except in the ordinary course of business and
in a transaction that is not material to it and its Subsidiaries taken as a
whole, or (ii) acquire any servicing right in a "bulk" transaction.
(h) Governing Documents. Amend the Headlands Certificate, Headlands
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Bylaws or the certificate of incorporation or by-laws (or similar governing
documents) of any of Headlands's Subsidiaries.
(i) Accounting Methods. Implement or adopt any change in its
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accounting principles, practices or methods, other than as may be required by
generally accepted accounting principles.
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(j) Tax Matters. Make any material Tax elections or compromise any
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material Tax liability.
(k) Contracts. Amend or modify in any material respect, or, except
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in the ordinary course of business consistent with past practice, enter into
or terminate, any material contract (as defined in Section 5.3(k)).
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(l) Claims. Settle any claim, action or proceeding, except for any
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claim, action or proceeding involving solely money damages in an amount,
individually or in the aggregate for all such settlements, that is not
material to Headlands and its Subsidiaries, taken as a whole.
(m) Adverse Actions. (i) Take any action while knowing that such
---------------
action would, or is reasonably likely to, prevent or impede the Merger from
qualifying (A) for "pooling of interests" accounting treatment or (B) as a
reorganization within the meaning of Section 368(a) of the Code; or (ii)
knowingly take any action that is intended or is reasonably likely to result
in (A) any of its representations and warranties set forth in this Plan being
or becoming untrue in any material respect at any time at or prior to the
Effective Time, (B) a material breach of any of its covenants herein, (C) any
of the conditions to the Merger set forth in Article VII not being satisfied,
-----------
(D) any material impediment to or delay in consummation of the transactions
contemplated hereby, or (E) a material violation of any provision of this Plan
except, in each case, as may be required by applicable law or regulation.
(n) Risk Management. Except (x) as Previously Disclosed, (y) as
---------------
required by applicable law or regulation to comply with modifications of
rules, regulations or requirements imposed by means of the United States
Department of Housing and Urban Development ("HUD"), the Federal Housing
Administration ("FHA"), the VA, the Federal National Mortgage Association
("FNMA"), the Federal Home Loan Mortgage Corporation ("FHLMC"), the Government
National Mortgage Association ("GNMA") or any state agency with authority to
regulate the business of Headlands, determine the investment or servicing
requirements with regard to loans originated, purchased or serviced by
Headlands, or otherwise participate in or promote mortgage lending, as
applicable (each of the above, an "Agency"), or (z) after prior consultation
with GreenPoint, for changes required by Headlands's or its Subsidiaries's
traditional conduits for the sale of non-
17
conventional loans, (i) implement or adopt any material change in its interest
rate and other risk management policies, procedures or practices; (ii) fail to
follow its existing policies or practices with respect to managing its
exposure to interest rate and other risk; (iii) fail to use commercially
reasonable means to avoid any material increase in its aggregate exposure to
interest rate risk or (iv) materially alter its methods or policies of
underwriting, pricing, originating, warehousing, selling and servicing, or
buying or selling rights to service loans.
(o) Indebtedness. Incur any indebtedness for borrowed money other
------------
than in the ordinary course of business.
(p) Loans. Make, renegotiate, renew, increase, extend or purchase
-----
any loan, lease (credit equivalent), advance, credit enhancement or other
extension of credit, or make any commitment or guarantee in respect of any of
the foregoing, except (i) in the ordinary course of business consistent with
past practice and (ii) loans or advances as to which Headlands has a legally
binding obligation to make such loan or advance as of the date hereof and
which has been disclosed by Headlands in writing to GreenPoint prior to the
execution of this Plan; provided, however, that Headlands may take (or permit
any subsidiary of Headlands to take) any such action if, within five business
days after Headlands requests in writing (which request shall include
information and analyses sufficient for GreenPoint to assess the proposed
action) that GreenPoint consent to the taking of such action, GreenPoint has
approved such request in writing or has not responded in writing to such
request.
(q) Commitments. Agree or commit to do any of the foregoing.
-----------
4.2. Forebearances of GreenPoint. From the date hereof until the
---------------------------
Effective Time, except as expressly contemplated by this Plan, without the prior
written consent of Headlands, GreenPoint will not:
(a) Extraordinary Dividends. Make, declare, pay or set aside for
-----------------------
payment any extraordinary dividend; provided, however, the foregoing shall not
apply to increases in the quarterly dividend rate payable on GreenPoint Common
Stock in the ordinary course of business consistent with past practices.
18
(b) Adverse Actions. (a) Take any action while knowing that such
---------------
action would, or is reasonably likely to, prevent or impede the Merger from
qualifying (i) for "pooling of interests" accounting treatment or (ii) as a
reorganization within the meaning of Section 368(a) of the Code; or (b)
knowingly take any action that is intended or is reasonably likely to result
in (i) any of its representations and warranties set forth in this Plan being
or becoming untrue in any material respect at any time at or prior to the
Effective Time, (ii) a material breach of any of its covenants herein, (iii)
any of the conditions to the Merger set forth in Article VII not being
-----------
satisfied, (iv) a material violation of any provision of this Plan or (v) any
material impediment to or delay in consummation of the transactions
contemplated hereby except, in each case, as may be required by applicable law
or regulation; provided, however, that nothing contained herein shall limit
the ability of GreenPoint to exercise its rights under the Stock Option
Agreement.
(c) Make any amendment to GreenPoint's certificate of incorporation
that changes any material term or provision of the GreenPoint Common Stock.
(d) Make any material changes to Merger Sub's certificate of
incorporation.
(e) Agree or commit to do any of the foregoing.
ARTICLE V.
REPRESENTATIONS AND WARRANTIES
5.1. Disclosure Schedules. On or prior to the date hereof,
--------------------
GreenPoint has delivered to Headlands a schedule and Headlands has delivered to
GreenPoint a schedule (respectively, its "Disclosure Schedule") setting forth,
among other things, items the disclosure of which is necessary or appropriate
either (i) in response to an express disclosure requirement contained in a
provision hereof or (ii) as an exception to one or more representations or
warranties contained in Section 5.3 or 5.4 or to one or more of its covenants
----------- ---
contained in Article IV or VI; provided, that (a) no such item is required to be
---------- --
set forth in a Disclosure Schedule as an exception to a representation or
warranty if its absence would not be reasonably likely to result in the related
representation or warranty being deemed untrue or incorrect under the standard
established by Section 5.2, and (b)
-----------
19
the mere inclusion of an item in a Disclosure Schedule as an exception to a
representation or warranty shall not be deemed an admission by a party that
such item represents a material exception or fact, event or circumstance or
that such item is reasonably likely to result in a Material Adverse Effect.
5.2. Standard. No representation or warranty of Headlands or
--------
GreenPoint contained in Section 5.3 or 5.4 shall be deemed untrue or incorrect,
----------- ---
and no party hereto shall be deemed to have breached a representation or
warranty, as a consequence of the existence of any fact, event or circumstance
unless such fact, circumstance or event, individually or taken together with all
other facts, events or circumstances inconsistent with any representation or
warranty contained in Section 5.3 or 5.4 has had or is reasonably likely to have
----------- ---
a Material Adverse Effect on the party making such representation or warranty
(provided that such determination of Material Adverse Effect shall be made
without regard to any qualifications regarding materiality or knowledge
contained in any single representation or warranty).
5.3. Representations and Warranties of Headlands. Subject to Sections
------------------------------------------- --------
5.1 and 5.2 and except as Previously Disclosed in a paragraph of its Disclosure
--- ---
Schedule corresponding to the relevant paragraph below, Headlands hereby
represents and warrants to GreenPoint:
(a) Organization, Standing and Authority. Headlands is a
------------------------------------
corporation duly organized, validly existing and in good standing under the
laws of the State of California. Headlands is duly qualified to do business
and is in good standing in the states of the United States and any foreign
jurisdictions where its ownership or leasing of property or assets or the
conduct of its business requires it to be so qualified.
(b) Headlands Stock. As of the date hereof, the authorized capital
---------------
stock of Headlands consists solely of (i) 50,000,000 shares of Headlands
Common Stock, of which no more than 19,746,634 shares were issued and
outstanding as of November 30, 1998 and (ii) 5,000,000 shares of Headlands
Preferred Stock, of which no shares are outstanding. As of the date hereof, no
shares of Headlands Common Stock and no shares of Headlands Preferred Stock
are held in treasury by Headlands or otherwise owned by Headlands or its
Subsidiaries. The outstanding shares of Headlands Common Stock have been duly
authorized and are validly issued and outstanding, fully paid and
nonassessable, and
20
subject to no preemptive rights (and were not issued in violation of any
preemptive rights). As of the date hereof, there are no shares of Headlands
Common Stock authorized and reserved for issuance, Headlands does not have any
Rights issued or outstanding with respect to Headlands Common Stock, and
Headlands does not have any commitment to authorize, issue or sell any
Headlands Common Stock or Rights, except pursuant to this Plan and the Stock
Option Agreement or Stock Purchase Agreement. The number of shares of
Headlands Common Stock which are issuable and reserved for issuance upon
exercise of Headlands Stock Options as of the date hereof are Previously
Disclosed.
(c) Subsidiaries.
------------
(i) (A) Headlands only direct or indirect subsidiaries are
HMSI and the subsidiaries set forth on Schedule 5.3(c) of the Headlands
Disclosure Schedule, all of the issued and outstanding equity securities of
which are owned directly by Headlands, (B) no equity securities of Headlands'
Subsidiaries are or may become required to be issued (other than to Headlands)
by reason of any Right or otherwise, (C) there are no contracts, commitments,
understandings or arrangements by which Headlands is or may be bound to sell
or otherwise transfer any equity securities of its Subsidiaries, (D) there are
no contracts, commitments, understandings, or arrangements relating to its
rights to vote or to dispose of such securities and (E) all the equity
securities of Headlands' Subsidiaries are fully paid and nonassessable and are
owned by Headlands free and clear of any Liens.
(ii) Headlands does not own beneficially, directly or
indirectly, any equity securities or similar interests of any Person, or any
interest in a partnership or joint venture of any kind, other than its
Subsidiaries.
(iii) Headlands' Subsidiaries have been duly organized and is
validly existing in good standing under the laws of the State of Delaware, and
are duly qualified to do business and in good standing in the jurisdictions
where their ownership or leasing of property or the conduct of their business
requires them to be so qualified.
(d) Corporate Power. Each of Headlands and HSMI has the corporate
---------------
power and authority to carry on its business as it is now being conducted and
to own all its properties and assets; and
21
Headlands has the corporate power and authority to execute, deliver and
perform its obligations under this Plan and the Stock Option Agreement, and to
consummate the transactions contemplated hereby and thereby.
(e) Corporate Authority. Subject in the case of this Plan to
-------------------
receipt of the requisite approval of the agreement of merger set forth in this
Plan by the holders of a majority of the outstanding shares of Headlands
Common Stock entitled to vote thereon (which is the only shareholder vote
required thereon), this Plan, the Stock Option Agreement and the transactions
contemplated hereby and thereby have been authorized by all necessary
corporate action of Headlands. This Plan and the Stock Option Agreement are
valid and legally binding obligations of Headlands, enforceable in accordance
with their terms (except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer and
similar laws of general applicability relating to or affecting creditors'
rights or by general equity principles). The Headlands Board has received the
written opinion of NationsBanc Xxxxxxxxxx Securities LLC to the effect that as
of the date hereof the consideration to be received by the holders of
Headlands Common Stock in the Merger is fair to the holders of Headlands
Common Stock from a financial point of view.
(f) Regulatory Approvals; No Defaults.
---------------------------------
(i) No consents or approvals of, or filings or registrations
with, any Governmental Authority or with any third party are required to
be made or obtained by Headlands or its Subsidiaries in connection with
the execution, delivery or performance by Headlands of this Plan or the
Stock Option Agreement or to consummate the Merger except for (A) filings
with the SEC and state securities authorities, (B) the approval of this
Plan by the stockholders of Headlands, (C) filing of notice pursuant to
the HSR Act and the expiration or termination of the applicable waiting
period thereunder, (D) filings of applications or notices with Previously
Disclosed mortgage banking licensing or supervisory authorities, and (E)
the filing of an agreement of merger and an appropriate officer's
certificate in accordance with Section 1108 of the CGCL. As of the date
hereof, Headlands is not aware of any reason why the approvals set forth
in Section 7.1(b) will not be received without the imposition of a
--------------
condition, restriction or requirement of the type described in
Section 7.1(b).
--------------
22
(ii) Subject to receipt of the regulatory approvals referred to
in the preceding paragraph, and expiration of related waiting periods,
and required filings under federal and state securities laws, the
execution, delivery and performance of this Plan and the Stock Option
Agreement and the consummation of the transactions contemplated hereby
and thereby do not and will not (A) constitute a breach or violation of,
or a default under, or give rise to any Lien, any acceleration of
remedies or any right of termination under, any law, rule or regulation
or any judgment, decree, order, governmental permit or license, or
agreement, indenture or instrument of Headlands or of its Subsidiaries or
to which Headlands or its Subsidiaries or either of their properties is
subject or bound, (B) constitute a breach or violation of, or a default
under, the Headlands Certificate or the Headlands Bylaws, or (C) require
any consent or approval under any such law, rule, regulation, judgment,
decree, order, governmental permit or license, agreement, indenture or
instrument.
(g) Financial Reports and SEC Documents.
-----------------------------------
(i) Headlands's Annual Reports on Form 10-K for the fiscal
year ended December 31, 1997, and all other reports, registration
statements, definitive proxy statements or information statements filed
or to be filed by it or its Subsidiaries subsequent to December 31, 1996
under the Securities Act, or under Section 13(a), 13(c), 14 or 15(d) of
the Exchange Act, in the form filed or to be filed (collectively, "SEC
Documents") with the SEC, as of the date filed, (A) complied or will
comply as to form with the applicable requirements under the Securities
Act or the Exchange Act, as the case may be, and (B) did not and will not
contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they
were made, not misleading; and each of the balance sheets contained in or
incorporated by reference into any such Headlands SEC Document (including
the related notes and schedules thereto) fairly presents, or will fairly
present, the financial position of Headlands and its Subsidiaries as of
its date, and each of the statements of income and changes in
stockholders' equity and cash flows or equivalent statements in such
Headlands SEC Documents (including any related notes and schedules
thereto) fairly presents, or will fairly present, the results of
operations, changes in stockholders' equity and changes in cash flows, as
the case may be, of
23
Headlands and its Subsidiaries for the periods to which they relate, in
each case in accordance with GAAP consistently applied during the periods
involved, except in each case as may be noted therein, subject to normal
year-end audit adjustments in the case of unaudited statements.
(ii) Headlands and its Subsidiaries have each timely filed all
reports, registrations and statements, together with any amendments
required to be made with respect thereto, that they were required to file
since January 1, 1996 with any federal or state Governmental Authority
charged with the supervision or regulation of financial institutions or
issuers of securities or the supervision or regulation of Headlands or
its Subsidiaries (collectively, the "Regulatory Authorities") or any self-
regulatory organization (an "SRO"), and all other material reports and
statements required to be filed by them since such date, including,
without limitation, any report or statement required to be filed pursuant
to the laws, rules or regulations of the United States, any state
regulatory authority or SRO and have paid all fees and assessments due
and payable in connection therewith; all such reports and filings comply
in all material respects with applicable requirements and do not contain
any untrue or misleading statement of material fact or omit to make any
statement of material fact required to be stated or necessary to make the
statements therein not misleading.
(iii) Since December 31, 1997, Headlands and its Subsidiaries
have not incurred any liability other than in the ordinary course of
business consistent with past practice.
(iv) Since December 31, 1997, (A) Headlands and its
Subsidiaries have conducted their respective businesses in the ordinary
and usual course consistent with past practice (excluding the incurrence
of expenses related to this Plan and the transactions contemplated
hereby) and (B) no event has occurred or fact or circumstance arisen
that, individually or taken together with all other facts, circumstances
and events (described in any paragraph of Section 5.3 or otherwise), has
-----------
had or is reasonably likely to have a Material Adverse Effect with
respect to Headlands.
(v) Litigation. No litigation, claim or other proceeding
----------
before any Governmental Authority is pending against Headlands or its
Subsidiaries and, to Headlands's knowledge, no such litigation, claim or
other proceeding has been threatened in
24
each case, except for those that are not, individually or in the
aggregate, reasonably likely to have a Material Adverse Effect with
respect to Headlands or prevent or materially delay or materially impair
the ability of Headlands to consummate the transactions contemplated by
this Agreement or by the Stock Option Agreement.
(h) Regulatory Matters.
------------------
(i) Neither Headlands nor any of its Subsidiaries nor their
respective properties is a party to or is subject to any order, decree,
agreement, memorandum of understanding or similar arrangement with, or a
commitment letter or similar submission to, or extraordinary supervisory
letter from, any Regulatory Authority.
(ii) Neither Headlands nor any of its Subsidiaries has been
advised by any Regulatory Authority that such Regulatory Authority is
contemplating issuing or requesting (or is considering the
appropriateness of issuing or requesting) any such order, decree,
agreement, memorandum of understanding, commitment letter, supervisory
letter or similar submission.
(iii) Headlands has filed all reports required to be filed with
HUD pursuant to the Home Mortgage Disclosure Act, and the information
contained in such reports was true and correct in all material respects
when filed.
(i) Compliance with Laws. Each of Headlands and its Subsidiaries:
--------------------
(i) in the conduct of its business, is in compliance in all
material respects with all applicable federal, state, local and foreign
statutes, laws, regulations, ordinances, rules, judgments, orders or
decrees applicable thereto or to the employees conducting such
businesses, including, without limitation, the Truth in Lending Act and
Regulation Z promulgated thereunder, the Equal Credit Opportunity Act of
1974, as amended, and the regulations promulgated thereunder, the Real
Estate Settlement Procedures Act, the Fair Debt Collection Practices Act
and all other applicable fair lending laws and other laws relating to
discriminatory business practices;
(ii) has all permits, licenses, authorizations, orders and
approvals of, and has made all filings, applications and registrations
with, all Governmental Authorities that are
25
required in order to permit them to own or lease their properties and to
conduct their businesses in all material respects as presently conducted;
all such permits, licenses, certificates of authority, orders and approvals
are in full force and effect and, to Headlands's knowledge, no suspension
or cancellation of any of them is threatened; and
(iii) has received, since December 31, 1996, no notification or
communication from any Governmental Authority (A) asserting that
Headlands or its Subsidiaries (or any other subsidiary then-existing) is
not in compliance with any statute, regulation, or ordinance or (B)
threatening to revoke any license, franchise, permit, or governmental
authorization (nor, to Headlands's knowledge, do any grounds for any of
the foregoing exist).
(j) Material Contracts; Defaults. Except for those agreements and
----------------------------
other documents filed as exhibits to its SEC Documents, and except as
contemplated by this Plan, neither Headlands nor any of its Subsidiaries are a
party to, bound by or subject to any agreement, contract, arrangement,
commitment or understanding (whether written or oral) (i) that is a "material
contract" within the meaning of Item 601(b)(10) of the SEC's Regulation S-K
(without giving effect to the "ordinary course" exception set forth therein)
or (ii) that materially restricts the conduct of business by Headlands or its
Subsidiaries. Neither Headlands nor any of its Subsidiaries is in default
under any material contract, agreement, commitment, arrangement, lease,
insurance policy or other instrument to which it is a party, by which its
respective assets, business, or operations may be bound or affected, or under
which it or its respective assets, business, or operations receives benefits,
and there are no events or conditions arising as a result of actions or
omissions of Headlands or its Subsidiaries which, with the passing of time or
notice, or both, would constitute a default or breach thereunder, and with
respect to the counterparty or counterparties to each such contract,
agreement, commitment, arrangement, lease, insurance policy or other
instrument to the knowledge of Headlands's or any of its Subsidiaries there
exists or is threatened thereunder no default, breach or other event or
condition, which with the passage of time or notice, or both, would constitute
a default or breach thereunder. None of Headlands nor any of its Subsidiaries
is subject to, or bound by, any contract containing covenants which (i) limit
the ability of it to compete in any line of business or with any person, or
(ii)
26
involve any restriction of geographical area in which, or method by
which, it may carry on its business (other than as may be required by law or
any applicable Regulatory Authority).
(k) No Brokers. No action has been taken by Headlands that would
----------
give rise to any valid claim against any party hereto for a brokerage
commission, finder's fee or other like payment with respect to the
transactions contemplated by this Plan, excluding a Previously Disclosed fee
to be paid to NationsBanc Xxxxxxxxxx Securities, LLC.
(l) Employee Benefit Plans.
----------------------
(i) Section 5.3(l)(i) of Headlands's Disclosure Schedule
-----------------
contains a complete and accurate list of all existing material bonus,
incentive, deferred compensation, pension, retirement, profit-sharing,
thrift, savings, employee stock ownership, stock bonus, stock purchase,
restricted stock, stock option, severance, welfare and fringe benefit
plans, group insurance, employment, consulting or severance agreements
and all similar practices, policies and arrangements maintained or
contributed to by Headlands or its Subsidiaries in which any employee or
former employee (the "Employees"), consultant or former consultant (the
"Consultants") or director or former director (the "Directors") of
Headlands or its Subsidiaries participates or to which any such
Employees, Consultants or Directors are a party (the "Compensation and
Benefit Plans"). Neither Headlands nor any of its Subsidiaries has any
commitment to create any additional Compensation and Benefit Plan or to
amend, modify or change any existing Compensation and Benefit Plan.
Except as set forth in Section 5.3(e)(i) of Headlands's Disclosure
Schedule, Headlands or its Subsidiaries has reserved the right to amend,
modify, change or terminate any Compensation and Benefit Plan.
(ii) Each Compensation and Benefit Plan has been operated and
administered in all material respects in accordance with its terms and
with ERISA and the Code, or any regulations or rules promulgated
thereunder. Each Compensation and Benefit Plan which is an "employee
pension benefit plan" within the meaning of Section 3(2) of ERISA (a
"Pension Plan") and which is intended to be qualified under Section
401(a) of the Code has received a favorable determination letter
(including a determination that the related trust under such Compensation
and Benefit Plan is exempt from tax under Section 501(a) of the Code)
27
from the IRS for "TRA" (as defined in Section 1 of Rev. Proc. 93-39), or
will file for such determination letter prior to the expiration of the
remedial amendment period for such Compensation and Benefit Plan, and
Headlands is not aware of any circumstances likely to result in revocation
of any such favorable determination letter. There is no pending or, to the
knowledge of Headlands, threatened legal action, suit or claim relating to
any Compensation and Benefit Plan, and to the knowledge of Headlands, no
set of circumstances exists which may reasonably give rise to a claim or
lawsuit, against any Compensation and Benefit Plan, any fiduciaries thereof
with respect to their duties to any Compensation and Benefit Plan or the
assets of any of the trusts under any Compensation and Benefit Plan which
could reasonably be expected to result in a material liability of Headlands
or its Subsidiaries to the PBGC, the Department of Treasury, the DOL, any
Compensation and Benefit Plan or any current or former participant in any
Compensation and Benefit Plan. Neither Headlands nor any of its
Subsidiaries has engaged in a transaction, or omitted to take any action,
with respect to any Compensation and Benefit Plan that would reasonably be
expected to subject Headlands or its Subsidiaries to a tax or penalty
imposed by either Section 4975 of the Code or Section 502 of ERISA,
assuming for purposes of Section 4975 of the Code that the taxable period
of any such transaction expired as of the date hereof.
(iii) No Compensation and Benefit Plan is subject to Title IV
or Section 302 of ERISA or Sections 412 or 4971 of the Code. No liability
under Title IV or Section 302 of ERISA or Sections 412 or 4971 of the
Code has been or is expected to be incurred by Headlands or its
Subsidiaries with respect to any frozen or terminated "single-employer
plan", within the meaning of Section 4001(a)(15) of ERISA, currently or
formerly maintained by any of them, or any single-employer plan of any
entity (an "ERISA Affiliate") which is considered one employer with
Headlands or its Subsidiaries under Section 4001(a)(14) of ERISA or
Section 414(b)(c)(m) or (o) of the Code (an "ERISA Affiliate Plan"). None
of Headlands, any of its Subsidiaries or any ERISA Affiliate has
contributed, or has been obligated to contribute, to a Multiemployer Plan
within the meaning of Subtitle E of Title IV of ERISA or a plan that has
two or more contributing sponsors at least two of whom are not under
common control within the meaning of Section 4063 of ERISA, at any time
since September 26, 1980. To the knowledge of Headlands, there is no
pending investigation or enforcement action by the PBGC, the DOL or IRS
28
or any other governmental agency with respect to any Compensation and
Benefit Plan.
(iv) All contributions required to be made under the terms of
any Compensation and Benefit Plan have been timely made or have been
reflected on Headlands's financial statements to the extent required by
generally accepted accounting principles. None of Headlands, any of its
Subsidiaries or any ERISA Affiliate (x) has provided, or would reasonably
be expected to be required to provide, security to any Pension Plan or to
any ERISA Affiliate Plan pursuant to Section 401(a)(29) of the Code, and
(y) has taken any action, or omitted to take any action, that has
resulted, or would reasonably be expected to result, in the imposition of
a lien under Section 412(n) of the Code or pursuant to ERISA.
(v) Neither Headlands nor any of its Subsidiaries has any
obligations to provide retiree health and life insurance or other retiree
death benefits under any Compensation and Benefit Plan, other than
benefits mandated by Section 4980B of the Code. Except as set forth in
Schedule 5.3(l)(i) of Headlands's Disclosure Schedule, there has been no
communication to Employees by Headlands or its Subsidiaries that would
reasonably be expected to promise or guarantee such Employee retiree
health or life insurance or other retiree death benefits on a permanent
basis.
(vi) Headlands and its Subsidiaries do not maintain any
Compensation and Benefit Plans covering current or former foreign
employees of either.
(vii) With respect to each Compensation and Benefit Plan, if
applicable, Headlands has provided or made available to GreenPoint, true
and complete copies of its most recent (A) Compensation and Benefit Plan
documents and amendments thereto, (B) trust instruments and insurance
contracts and amendments thereto, (C) Annual Report (Form 5500 Series)
and accompanying schedules, if any, (D) summary plan description and any
material modifications thereto, if any (in each case, whether or not
required to be furnished under ERISA), and (E) actuarial report, if any.
(viii) The consummation of the transactions contemplated by
this Plan would not, directly or indirectly (including, without
limitation, as a result of any termination of
29
employment prior to or following the Effective Time) reasonably be
expected to (A) entitle any Employee, Consultant or Director to any
payment (including severance pay or similar compensation) or any increase
in compensation, (B) result in the vesting or acceleration of any
benefits under any Compensation and Benefit Plan or (C) result in any
material increase in benefits payable under any Compensation and Benefit
Plan.
(ix) Neither Headlands nor any of its Subsidiaries maintains
any compensation plans, programs or arrangements the payments under which
are not reasonably expected to be deductible as a result of the
limitations under Section 162(m) of the Code and the regulations issued
thereunder.
(x) As a result, directly or indirectly, of the transactions
contemplated by this Plan (including, without limitation, as a result of
any termination of employment prior to or following the Effective Time),
none of GreenPoint, Headlands or the Surviving Corporation, or any of
their respective Subsidiaries will be obligated to make a payment that
would be characterized as an "excess parachute payment" to an individual
who is a "disqualified individual" (as such terms are defined in Section
280G of the Code), without regard to whether such payment is reasonable
compensation for personal services performed or to be performed in the
future.
(m) Labor Matters. Neither Headlands nor any of its Subsidiaries
-------------
is a party to or is bound by any collective bargaining agreement, contract or
other agreement or understanding with a labor union or labor organization, nor
is Headlands or its Subsidiaries the subject of a proceeding asserting that
Headlands or its Subsidiaries has committed an unfair labor practice (within
the meaning of the National Labor Relations Act) or seeking to compel
Headlands or its Subsidiaries to bargain with any labor organization as to
wages or conditions of employment, nor is there any strike or other labor
dispute involving Headlands or its Subsidiaries pending or, to Headlands's
knowledge, threatened, nor is Headlands aware of any activity involving its or
its Subsidiaries's employees seeking to certify a collective bargaining unit
or engaging in other organizational activity.
(n) Takeover Laws; Dissenters Rights. Headlands has taken all
--------------------------------
action required to be taken by it in order to exempt this Plan, the Stock
Option Agreement and the transactions contemplated hereby and thereby from,
and this Plan, the Stock Option Agreement and the transactions
30
contemplated hereby and thereby are exempt from, the requirements of any
"moratorium", "control share", "fair price", "affiliate transaction",
"business combination" or other antitakeover laws and regulations of any state
(collectively, "Takeover Laws"), including, without limitation, the State of
California. Holders of Headlands Common Stock do not have dissenters' or
appraisal rights in connection with the execution of this Plan or the
consummation of any of the transactions contemplated hereby.
(o) Environmental Matters. Neither the conduct nor operation of
---------------------
Headlands or its Subsidiaries (or any other subsidiary of Headlands existing
prior to the date hereof) nor any condition of any property presently or
previously owned, leased or operated by any of them (including, without
limitation, in a fiduciary or agency capacity), or on which any of them holds
a Lien, violates or violated Environmental Laws and no condition has existed
or event has occurred with respect to any of them or any such property that,
with notice or the passage of time, or both, is reasonably likely to result in
liability under Environmental Laws. Neither Headlands nor any of its
Subsidiaries (or any other subsidiary of Headlands existing prior to the date
hereof) has received any notice from any Governmental Authority, or to its
knowledge, any other person, that Headlands or its Subsidiaries (or any other
subsidiary of Headlands existing prior to the date hereof) or the operation or
condition of any property ever owned, leased, operated, or held as collateral
or in a fiduciary capacity by any of them are or were in violation of or
otherwise are alleged to have liability under any Environmental Law,
including, but not limited to, responsibility (or potential responsibility)
for the cleanup or other remediation of any pollutants, contaminants, or
hazardous or toxic wastes, substances or materials at, on, beneath, or
originating from any such property.
(p) Tax Matters.
-----------
(i) (A) All Tax Returns that are required to be filed (taking
into account any extensions of time within which to file) by or with
respect to Headlands and its Subsidiaries (and any other subsidiary of
Headlands existing prior to the date hereof) have been duly filed and
such filed Tax Returns are true, correct and complete in all material
respects, (B) all Taxes shown to be due on the Tax Returns referred to in
clause (A) have
31
been paid in full, (C) the federal and state income Tax Returns referred
to in clause (A) have been examined by the IRS or the appropriate state
taxing authority or the period for assessment of the Taxes in respect of
which such Tax Returns were required to be filed has expired, (D) all
deficiencies asserted or assessments made as a result of such
examinations have been paid in full or are being contested in good faith
by appropriate proceedings and have been reserved against in accordance
with GAAP, (E) no issues that have been raised by the relevant taxing
authority in connection with the examination of any of the Tax Returns
referred to in clause (A) are currently pending, and (F) no waivers of
statutes of limitation have been given by or requested with respect to
any Taxes of Headlands or its Subsidiaries. Headlands has made available
to GreenPoint true and correct copies of the United States federal income
Tax Returns filed by Headlands and its Subsidiaries for each of the three
most recent fiscal years ended on or before December 31, 1997. Neither
Headlands nor any of its Subsidiaries has any liability with respect to
Taxes that accrued on or before the end of the most recent period covered
by Headlands's SEC Documents filed prior to the date hereof in excess of
the amounts accrued with respect thereto that are reflected in the
financial statements included in Headlands's SEC Documents filed on or
prior to the date hereof except for the liability under the Tax
Agreement. As of the date hereof, neither Headlands nor any of its
Subsidiaries (or any other subsidiary of Headlands existing prior to the
date hereof) has any reason to believe that any conditions exist that
might prevent or impede the Merger from qualifying as a reorganization
within the meaning of Section 368(a) of the Code.
(ii) No Tax is required to be withheld pursuant to Section
1445 of the Code as a result of the transfer contemplated by this Plan.
(iii) Headlands is not a party to any tax sharing, allocation or
indemnification agreement, other than the Tax Indemnification Agreement
dated as of October 15, 1997 by and between the Company and Headlands's
shareholders prior to termination of S corporation status (the "Tax
Agreement"). No amounts are currently due and payable by Headlands under
the Tax Agreement and, to the best knowledge of Headlands, no adjustments
have been asserted or proposed by any taxing authority that could
reasonably be expected to result in an obligation of Headlands to pay any
amounts under the Tax Agreement.
32
(iv) Headlands (and any predecessor thereof) made a valid
election to be an S corporation for federal income tax purposes effective
for the first taxable year during its corporate existence and such
election remained in effect for each subsequent taxable year until
January 31, 1998, and, where required to obtain similar treatment for
state and local tax purposes, Headlands (and any predecessor thereof)
made valid elections or took other action to obtain such treatment. With
the consent of the shareholders whose consent is required by Section
1362(d)(1) of the Code and Treas. Reg. (S) 1.1362-2(a), Headlands revoked
its S corporation election in the manner prescribed in Treas. Reg. (S)
1.1362-6 and such revocation was effective on January 31, 1998. With the
consent of the shareholders whose consent is required by Section
1362(e)(3) of the Code and Treas. Reg. (S) 1.1362-3(b)(1), Headlands
elected in the manner prescribed by Treas. Reg. (S) 1.1362-6 to allocate
its income for the "S termination year" (as defined in Section 1362(e)(4)
of the Code) between the "S short year" described in Section
1362(e)(1)(A) of the Code and the "C short year" described in Section
1362(e)(1)(B) of the Code on the basis of the Company's normal tax
accounting method.
(v) Headlands has not agreed to and is not required to make
any adjustment under Section 481(a) of the Code by reason of a change in
method of accounting or otherwise.
(q) Risk Management Instruments. All interest rate swaps, caps,
---------------------------
floors, option agreements, futures and forward contracts and other similar
risk management arrangements, whether entered into for Headlands's own
account, or for the account of its Subsidiaries or their customers (all of
such material arrangements are listed on Section 5.3(q) of Headlands's
Disclosure Schedule), were entered into (i) in accordance with prudent
business practices and all applicable laws, rules, regulations and regulatory
policies and (ii) with counterparties believed to be financially responsible
at the time; and each of them constitutes the valid and legally binding
obligation of Headlands or any of its Subsidiaries, enforceable in accordance
with its terms (except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer and
similar laws of general applicability relating to or affecting creditors'
rights or by general equity principles), and are in full force and effect.
Neither Headlands nor any of its Subsidiaries, nor to Headlands's knowledge,
any
33
other party thereto, is in breach of any of its obligations under any such
agreement or arrangement.
(r) Books and Records. The books and records of Headlands and its
-----------------
Subsidiaries have been properly and accurately maintained, and there are no
material inaccuracies or discrepancies of any kind contained or reflected
therein, and they fairly present the financial position of Headlands and its
Subsidiaries.
(s) Insurance. Section 5.3(s) of Headlands's Disclosure Schedule
---------
sets forth all of the insurance policies, binders, or bonds maintained by
Headlands or its Subsidiaries ("Insurance Policies"). Headlands and its
Subsidiaries are insured with reputable insurers against such risks and in
such amounts as the management of Headlands reasonably has determined to be
prudent in accordance with industry practices. All the Insurance Policies are
in full force and effect; Headlands and its Subsidiaries are not in default
thereunder; and all claims thereunder have been filed in due and timely
fashion.
(t) Accounting Treatment. As of the date hereof, Headlands is
--------------------
aware of no reason why the Merger will fail, or could reasonably be expected
to fail, to qualify for "pooling of interests" accounting treatment.
(u) Mortgage Banking Business. (i) Licenses and Qualifications.
------------------------- ---------------------------
Headlands (the only Headlands entity that services or originates loans) (A) is
an approved (1) HUD mortgagee and servicer for FHA-insured loans, (2) lender
and servicer for VA-insured loans, (3) seller/servicer of one-to-four-family
first and second mortgages for FNMA and FHLMC, and (4) GNMA issuer and
servicer of GNMA-guaranteed mortgage-backed securities, (B) has all other
certifications, authorizations, licenses, permits and other approvals
necessary to conduct its current business, (C) is in good standing under all
applicable federal, state and local laws and regulations thereunder as a
lender and servicer and (D) is in good standing with all authorities and
servicers for the state bond programs in which it participates. As of the date
hereof, there is no pending or, to Headlands's knowledge, threatened
cancellation or reduction of any loan purchase commitment or other loan sale
contract to which Headlands is a party, and the obligations of Headlands under
each such contract are being performed by Headlands in accordance with its
terms. Headlands has no reason to believe that the
34
underwriting waivers from FNMA and FHLMC, under current agreements with
Headlands, will be restricted or rescinded, or that the guarantee fees payable
to FNMA and FHLMC will be increased as a result of Headlands's credit
performance, or that Headlands will suffer a forced reduction of the master
commitment amount relating to FNMA or FHLMC purchases or swaps of loans, nor has
any such restriction, rescission, increase or reduction occurred at any time
since January 1, 1997.
(ii) Title to Loans. All loans held for Headlands's account, whether or
--------------
not for future sale or delivery to an investor (the "Warehouse Loans"), are
owned by Headlands free and clear of any Lien, other than Liens in favor of
Headlands's lender banks pursuant to warehouse lines of credit and forward sale
commitments or similar agreements to sell any such loans to investors in the
ordinary course, and all Warehouse Loans meet all requirements for sale to the
intended investors. Each mortgage or deed of trust securing a Warehouse Loan has
been duly recorded or submitted for recordation in due course in the appropriate
filing office in the name of Headlands as mortgagee. Headlands has not released
any security for any Warehouse Loan, except upon receipt of reasonable
consideration for such release (as documented in the applicable Loan file), or
accepted prepayment of any such Warehouse Loan which has not been promptly
applied to such Warehouse Loan.
(iii) Compliance. Each Warehouse Loan and each loan which is being
----------
serviced by Headlands for the account of others (the "Serviced Loans", and
together with the Warehouse Loans, the "Loans") was underwritten and originated,
and the loan documents and loan files maintained by Headlands with respect
thereto are being maintained by Headlands in compliance with all applicable laws
and regulations and, if applicable, the requirements of the "Investor" (which
term means (x) FHLMC, FNMA, GNMA, or any other person, as the case may be, that
owns any of the Loans or any portion of a Pool of loans or holds beneficial
title to the Loans or any portion of a Pool of loans, but shall not mean the
holder of mortgage-backed securities or mortgage pass-through securities except
to the extent that the consent of such holder may be required in order for
Headlands to continue to have servicing rights with respect to the Loans related
thereto and (y) any person who owns servicing rights for loans serviced or
master serviced by Headlands pursuant to a Loan Servicing Agreement) acquiring
such Loan (or, if there is no such Investor, in accordance with Headlands's
underwriting standards then in
35
effect) and the requirements of each person who insures or guarantees all or any
portion of the risk of loss upon borrower default on any of the Loans,
including, without limitation, the FHA, the VA and any private mortgage insurer,
and providers of life, hazard, flood, disability, title or other insurance with
respect to any of the Loans or the collateral therefor (each, an "Insurer"), if
any, in effect and applicable at the time such insurance was obtained. Headlands
has not done or failed to do, or caused to be done or omitted to be done, any
act, the effect of which would operate to invalidate or materially impair (i)
any approvals of any Agency or the FHA to insure, (ii) any VA guarantee or
commitment of the VA to guarantee, (iii) any private mortgage insurance or
commitment of any private mortgage insurer to insure, (iv) any title insurance
policy, (v) any hazard insurance policy, (vi) any flood insurance policy, (vii)
any fidelity bond, direct surety bond, errors and omissions or other insurance
policy required by any Agency, Investor or Insurer, (viii) any surety or
guaranty agreement, (ix) any guaranty issued by GNMA, FNMA or FHLMC to Headlands
respecting mortgage backed securities issued by Headlands and other like
guarantees or (x) the rights of Headlands under any Loan Servicing Agreement or
loan purchase commitment. No Agency, Investor or Insurer has (i) notified
Headlands, or to the knowledge of Headlands claimed, that Headlands has violated
or has not complied on a recurring basis with the applicable underwriting
standards with respect to Loans sold by Headlands to an Investor or (ii) imposed
restrictions on the activities (including commitment authority) of Headlands.
(iv) Loan Files. The loan documents relating to a Loan maintained in
----------
the loan files of Headlands were in compliance with all applicable laws and
regulations at the time of the origination, assumption or modification of such
Loan, as the case may be. The loan files maintained by Headlands contain
originals (or, where necessitated by the terms of the applicable mortgage
servicing agreements, contain true, correct and complete copies) of the
documents relating to each Loan and the information contained in such loan files
with respect to each such Loan is true, complete and accurate and in compliance
with all applicable laws and regulations. Except as set forth in the loan
documents relating to a Loan maintained in the loan files of Headlands, the
terms of the note, bond, deed of trust and mortgage for each such Loan have not
been impaired, waived, altered or modified in any respect from the date of their
origination except by a written instrument which written instrument has been
recorded, or
36
submitted for recordation in due course, if recordation is necessary to protect
the interests of the owner thereof. The substance of any such waiver, alteration
or modification has been communicated to and approved by (A) the relevant
Investor and Insurer (if any), to the extent required by the relevant Investor
and Insurer requirements, and (B) the title Insurer, to the extent required by
the relevant policies, and the terms of any such waiver, alteration or
modification are reflected in the loan documents. Except as set forth in the
loan documents maintained in the loan files by Headlands, no mortgagor has been
released from such mortgagor's obligations with respect to the applicable Loan.
(v) Loan Servicing Agreements. All of the contracts pursuant to which
-------------------------
Headlands has the right and/or obligation to service loans (each, a "Loan
Servicing Agreement") are (A) valid and binding obligations of Headlands, and to
the knowledge of Headlands, of all the other parties thereto, (B) in full force
and effect, (C) enforceable in accordance with their terms (except where
enforcement thereof may be limited by bankruptcy, insolvency or other similar
laws affecting the enforcement of creditors' rights generally and by general
equity principles) and (D) owned by Headlands free and clear of any Lien, except
pursuant to the loan and security agreements Previously Disclosed. There is no
default by Headlands or claim of default against Headlands by any party under
any such Loan Servicing Agreement, and, except for the consummation of the
transactions contemplated by this Plan, no event has occurred which with the
passage of time or the giving of notice or both would constitute a default by
any party under any such Loan Servicing Agreement or would result in any such
mortgage servicing agreement being terminable by any party thereto. There is no
pending or, to the knowledge of Headlands, threatened cancellation of any Loan
Servicing Agreement and the obligations of Headlands under each Loan Servicing
Agreement are being performed by Headlands in accordance with the terms of such
Agreement and applicable rules or regulations. Headlands is not a subservicer
with respect to any of the Serviced Loans.
(vi) No Recourse. None of Headlands's servicing rights is subject to
-----------
recourse against the servicer, and Headlands is not subject to recourse in
connection with any Loans sold by it, in each case for losses on liquidation of
a loan, borrower defaults or repurchase obligations upon the occurrence of non-
payment or other events, other than events entitling Investors to
37
request a repurchase of a loan because of alleged breaches of customary
representations and warranties relating to the origination or servicing thereof.
(vii) Escrow Account. Unless otherwise prohibited by law or an
--------------
executed escrow waiver, Headlands collects all escrows related to the Loans, and
all escrow accounts have been maintained by Headlands and, to Headlands's
knowledge, all prior servicers in accordance with the related loan documents,
all applicable laws, rules, regulations, and requirements of Investors, Insurers
and governmental authorities, and in accordance with the applicable Loan
Servicing Agreements. Headlands has credited to the account of borrowers all
interest required to be paid on any escrow account in accordance with applicable
law and the terms of such agreements and loan documents. All escrow, custodial,
and suspense accounts related to the Loans are held in Headlands's name or the
investor's name by Headlands.
(viii) Advances. There are no servicing or other contracts to which
--------
Headlands is a party which obligates it to make servicing advances for principal
and interest payments with respect to defaulted or delinquent Loans other than
in a manner as provided in standard and customary agreements with FNMA, FHLMC or
GNMA. To the extent made, any such advances are valid and subsisting amounts
owing to Headlands, subject to the terms of the applicable Loan Servicing
Agreement.
(ix) Single Family Loans. All of the Loans are secured by single
-------------------
family (i.e., one to four family) residential real property or, to the extent
that a Loan is secured by property other than a single family residential
property, such Loan is not a Warehouse Loan and has not been sold to any person
where Headlands has any recourse obligation.
(x) ARM Adjustments. With respect to each Loan for which the interest
---------------
rate is not fixed for the entire term of the loan, Headlands has, since the date
it commenced servicing such loan and, to Headlands's knowledge, all prior
servicers have (A) properly and accurately entered into its system all data
required to service the loan in accordance with the related loan documents and
all regulations, (B) properly and accurately adjusted the monthly payment on
each payment adjustment date, (C) properly and accurately calculated the
amortization of principal and interest on each payment adjustment date, in each
case in
38
compliance with all applicable laws, rules and regulations and the related loan
documents, and (D) executed and delivered any and all necessary notices required
under, and in a form that complies with, all applicable laws, rules and
regulations and the terms of the related loan documents regarding the interest
rate and payment adjustments.
(xi) Pools. Each Loan included in a pool of Loans originated, acquired
-----
or serviced by Headlands (a "Pool") meets all eligibility requirements
(including, without limitation, all applicable requirements for obtaining
mortgage insurance certificates and loan guaranty certificates) for inclusion in
such Pool. All of such Pools have been finally certified or, if required,
recertified in accordance with all applicable laws, rules and regulations,
except where the time for certification or recertification has not expired. To
the knowledge of Headlands, no Pools have been improperly certified. The loan
file for each Loan included in a certified Pool contains all documents and
instruments necessary for the final certification or recertification of such
Pool. No Loan has been bought out of a Pool without all required prior written
approvals of the applicable Investors. Neither the execution, delivery or
performance of this Plan by Headlands nor the consummation by Headlands of the
transactions contemplated hereby will require any Pool to be recertified. The
aggregate unpaid principal balance outstanding of the Loans in each Pool equals
or exceeds the amount owing to the applicable Investors.
(xii) Securitization Transactions.
---------------------------
(A) Headlands and its Subsidiaries, as servicer under the
applicable Loan Servicing Agreement (the "Securitization Servicer") of each
outstanding transaction under which Headlands or its Subsidiaries have sold or
pledged Loans in a securitization, whether sold under the Securities Act or
otherwise (a "Securitization Transaction"), has complied in all material
respects with all contracts, including the Loan Servicing Agreements, and all
conditions to be performed or satisfied by them with respect to all agreements
and arrangements pursuant to which such person is bound under such
Securitization Transaction (collectively, "Securitization Instruments").
(B) No Securitization Servicer or, to Headlands's knowledge, no
trustee or issuer with respect to any Securitization, has taken any action which
would reasonably be
39
expected to adversely affect the characterization or tax treatment for federal,
state or local income or franchise tax purposes of the issuer or any securities
issued in a Securitization Transaction, and all required federal, state and
local tax and information returns relating to any Securitization Transaction
have been properly filed.
(C) Each representation and warranty made by Headlands or its
Subsidiaries in each "Purchase Agreement," "Pooling and Servicing Agreement,"
"Placement Agency Agreement," "Servicer's Indemnification Agreement" and any
other Securitization Instrument to which any of them was a party in any
Securitization Transaction was true and correct in all material respects
whenever made or reaffirmed by any of them and Headlands and its Subsidiaries
have each fully performed and carried out each covenant and agreement made by
any of them in any such Securitization Instrument.
(D) No rating agency has downgraded, or given Headlands or its
Subsidiaries any indication that it is considering a downgrading of any
securities issued in any Securitization Transaction, or of its rating of any
Securitization Servicer.
(xiii) Mortgage Insurance. Each Loan which is indicated in the
------------------
related loan documents to have FHA insurance is insured under the National
Housing Act or qualifies for such insurance. Each Loan which is indicated in the
related loan documents to be guaranteed by the VA is guaranteed under the
provisions of Chapter 37 of Title 38 of the United States Code to the extent
required by the applicable Investor or qualifies for such guarantee. As to each
FHA insurance certificate, each VA guarantee certificate, and each Loan which is
indicated in the related loan file to be insured by private mortgage insurance,
Headlands has complied with applicable provisions of the insurance or guarantee
contract and applicable laws and regulations, the insurance or guarantee is in
full force and effect with respect to each such Loan, and to the knowledge of
Headlands, there does not exist any event or condition which, but for the
passage of time or the giving of notice or both, can result in a revocation of
any such insurance or guarantee or constitute adequate grounds for the
applicable Insurer to refuse to provide insurance or guarantee payments
thereunder.
40
(xiv) Taxes and Insurance. Each Loan has been covered by a policy of
-------------------
hazard insurance and flood insurance, to the extent required by the Loan
Servicing Agreements relating thereto or any laws, rules, regulations or
Investor or Insurer requirements applicable to such Loan, all in a form usual
and customary in the industry and each of which is in full force and effect and
all amounts due and payable under each policy have been paid prior to the date
such payments were due; and all taxes, assessments, ground rents or other
applicable charges or fees due and payable as to each Loan have been paid prior
to the date such payments was due. Any and all claims under such insurance
policies have been submitted and processed in accordance with the applicable
Investor's and Insurer's requirements. Such insurance policies name Headlands
and its successors and assigns as mortgagee.
(xv) Title Insurance. To the extent required by the applicable Investor,
---------------
each Loan is covered by an ALTA lender's title insurance policy or other
generally acceptable form of policy of insurance or opinion of title acceptable
to the relevant Investor, and each such title insurance policy is issued by an
Insurer acceptable to the applicable Investor and qualified to do business in
the jurisdiction where the collateral securing such Loan is located, and insures
the originator and its successors and assigns as to the first priority lien of
the mortgage in the original principal amount of the Loan (or, in the case of a
second mortgage, the second priority lien). The applicable Investor, as assignee
of the originator's rights, is an insured of such lender's title insurance
policy, and such lender's policy is in full force and effect. Headlands has not,
nor, to Headlands's knowledge, has any prior servicer, performed any act or
omission which would impair the coverage of such lender's policy.
(xvi) Condemnation. Neither Headlands nor any of its Subsidiaries has
------------
received notice of or has knowledge of any proceeding pending or threatened for
the partial or total condemnation of any of the collateral securing any of the
Loans, and neither Headlands nor any of its Subsidiaries has received notice or
has knowledge that all or any part of such collateral has been or will be
condemned.
(xvii) Tape. Headlands has previously delivered to GreenPoint a tape
----
(magnetic media) on which certain information regarding the servicing portfolio
of Headlands as of September
41
30, 1998 is recorded. Such tape accurately contains the list of serviced loans
as of such date. The loan characteristics recorded on such tape have been
Previously Disclosed, and the information contained on such tape is accurate.
(v) Disclosure. The representations and warranties contained in this
----------
Section 5.3 do not contain any untrue statement of a material fact.
------- ---
(w) Material Adverse Change. Since December 31, 1997, no event has
-----------------------
occurred or circumstances arisen that, individually or taken together with all
other events and circumstances, has had or is reasonably likely to have a
Material Adverse Effect on Headlands.
(x) Year 2000 Compliance. Headlands has adopted and implemented a
--------------------
commercially reasonable plan (a complete and correct copy of which has been
provided to GreenPoint) to provide (x) that the change of the year from 1999 to
the year 2000 will not materially and adversely affect the information and
business systems of Headlands or its Subsidiaries and (y) that the impacts of
such change on the vendors and customers of Headlands and its Subsidiaries will
not have a Material Adverse Effect on Headlands or its Subsidiaries. In
Headlands' reasonable best estimate, no expenditures materially in excess of
currently budgeted items will be required in order to cause the information and
business systems of Headlands and its Subsidiaries to operate properly following
the change of the year 1999 to the year 2000. Headlands reasonably expects that
it will resolve any issues related to such change of the year in accordance with
the timetable set forth in such plan (and in any event on a timely basis in
order to be resolved before the year 2000). Between the date of this Agreement
and the Effective Time, Headlands shall continue to use commercially reasonable
efforts to implement such plans.
(y) Transactions With Related Parties. There have been no transactions
---------------------------------
involving amounts in excess of $250,000 individually and $750,000 in the
aggregate during the two years prior to the Effective Date between Headlands or
its Subsidiaries, on the one hand, and any affiliate of Headlands or its
Subsidiaries or any director, officer or employee of Headlands or its
Subsidiaries or any affiliate of any such person, on the other hand. All such
transactions involving related parties have been entered into on
42
an arms-length basis and on commercially reasonable terms and conditions.
5.4 Representations and Warranties of GreenPoint. Subject to
--------------------------------------------
Sections 5.1 and 5.2 and except as Previously Disclosed in a paragraph of its
------------ ---
Disclosure Schedule corresponding to the relevant paragraph below, GreenPoint
hereby represents and warrants to Headlands as follows:
(a) Organization, Standing and Authority. Each of GreenPoint and its
------------------------------------
Significant Subsidiaries is duly organized, validly existing and in good
standing under the laws of its respective jurisdiction of organization. Each of
GreenPoint and its Significant Subsidiaries is duly qualified to do business and
is in good standing in the states of the United States and foreign jurisdictions
where its ownership or leasing of property or assets or the conduct of its
business requires it to be so qualified. Each of GreenPoint and its Significant
Subsidiaries has in effect all federal, state, local, and foreign governmental
authorizations necessary for it to own or lease its properties and assets and to
carry on its business as it is now conducted.
(b) GreenPoint and Merger Sub Stock.
-------------------------------
(i) As of the date hereof, the authorized capital stock of
GreenPoint consists solely of 220,000,000 shares of GreenPoint Common Stock, of
which no more than 94,650,000 shares are outstanding as of the date hereof, and
none of which are subject to any preemptive rights (and were not issued in
violation of any preemptive rights), 50,000,000 shares of preferred stock, par
value $0.01 per share, of GreenPoint, of which no shares were outstanding as of
the date hereof. As of the date hereof, the authorized capital stock of Merger
Sub consists of 1,000 shares of Merger Sub Common Stock, all of which are
validly issued and outstanding, fully paid and nonassessable and are owned by
GreenPoint free and clear of any Lien and are not subject to any preemptive
right (and were not issued in violation of any preemptive rights) and 1,000
shares of preferred stock, par value $0.01, none of which are outstanding as of
the date hereof.
(ii) The shares of GreenPoint Common Stock to be issued in
exchange for shares of Headlands Common Stock in the Merger, when issued in
accordance with the terms of this Plan, will be duly authorized, validly issued,
fully paid and
43
nonassessable and subject to no preemptive rights (and will not be issued in
violation of any preemptive rights).
(c) Corporate Power. Each of GreenPoint and Merger Sub has the
---------------
corporate power and authority to execute, deliver and perform its obligations
under this Plan and the Stock Option Agreement, and to consummate the
transactions contemplated hereby and thereby.
(d) Corporate Authority. This Plan, the Stock Option Agreement and the
-------------------
transactions contemplated hereby and thereby have been authorized by all
necessary corporate action of each of GreenPoint and Merger Sub. This Plan is a
valid and legally binding agreement of each of GreenPoint and Merger Sub
enforceable in accordance with its terms (except as enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium,
fraudulent transfer and similar laws of general applicability relating to or
affecting creditors' rights or by general equity principles).
(e) Regulatory Approvals; No Defaults.
---------------------------------
(i) No consents or approvals of, or filings or registrations
with, any court, administrative agency or commission or other Governmental
Authority or with any third party are required to be made or obtained by
GreenPoint or any of its Subsidiaries in connection with the execution, delivery
or performance by GreenPoint of this Plan, the Stock Option Agreement, the
Contribution or to consummate the Merger except for (A) the filing of
applications and notices, as applicable, with federal and state banking
authorities, receipt of approval thereof and expiration of related waiting
periods; (B) approval of the listing on the NYSE of GreenPoint Common Stock to
be issued in the Merger; (C) the filing and declaration of effectiveness of the
Registration Statement; (D) filings with the Federal Trade Commission and the
United States Department of Justice pursuant to the HSR Act and the expiration
or termination of the applicable waiting period thereunder, and (E) the filing
of the agreement of merger and an appropriate officer's certificate in
accordance with Section 1108 of the CGCL and the filing of a certificate of
merger in accordance with Section 252 of the DGCL, (F) such filings as are
required to be made or approvals as are required to be obtained under the
securities or "Blue Sky" laws of various states in connection with the issuance
of GreenPoint Stock in the Merger; and (G) receipt of the
44
approvals set forth in Section 7.1(b). As of the date hereof, GreenPoint is not
--------------
aware of any reason why the approvals set forth in Section 7.1(b) will not be
--------------
received without the imposition of a condition, restriction or requirement of
the type described in Section 7.1(b).
--------------
(ii) Subject to receipt of the regulatory approvals referred to
in the preceding paragraph and expiration of the related waiting periods, and
required filings under federal and state securities laws, the execution,
delivery and performance of this Plan and the Stock Option Agreement and the
consummation of the transactions contemplated hereby and thereby do not and will
not (A) constitute a breach or violation of, or a default under, or give rise to
any Lien, any acceleration of remedies or any right of termination under, any
law, rule or regulation or any judgment, decree, order, governmental permit or
license, or agreement, indenture or instrument of GreenPoint or of any of its
Subsidiaries or to which GreenPoint or any of its Subsidiaries or properties is
subject or bound, (B) constitute a breach or violation of, or a default under,
the articles of incorporation or bylaws (or similar governing documents) of
GreenPoint or any of its Subsidiaries, or (C) require any consent or approval
under any such law, rule, regulation, judgment, decree, order, governmental
permit or license, agreement, indenture or instrument.
(f) Litigation. Other than as set forth in its SEC Documents filed on
----------
or before the date hereof, no litigation, claim or other proceeding before any
Governmental Authority is pending against GreenPoint or any of its Subsidiaries
and, to GreenPoint's knowledge, no such litigation, claim or other proceeding
has been threatened, in each case, except for those that are not, individually
or in the aggregate, reasonably likely to have a Material Adverse Effect with
respect to GreenPoint or prevent or materially delay or materially impair the
ability of GreenPoint or Merger Sub to consummate the transactions contemplated
by this Agreement or by the Stock Option Agreement.
(g) Financial Reports and SEC Documents.
-----------------------------------
(i) GreenPoint's Annual Report on Form 10-K for the fiscal year
ended December 31, 1997, and all other reports, registration statements,
definitive proxy statements or information statements filed or to be filed by it
or any of its Significant Subsidiaries subsequent to December 31, 1996 under
45
the Securities Act, or under Section 13(a), 13(c), 14 or 15(d) of the Exchange
Act, in the form filed or to be filed (collectively, "SEC Documents") with the
SEC, as of the date filed, (A) complied or will comply as to form with the
applicable requirements under the Securities Act or the Exchange Act, as the
case may be, and (B) did not and will not contain any untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading; and each of the balance sheets
contained in or incorporated by reference into any such GreenPoint SEC Document
(including the related notes and schedules thereto) fairly presents, or will
fairly present, the financial position of GreenPoint and its consolidated
Subsidiaries as of its date, and each of the statements of income and changes in
stockholders' equity and cash flows or equivalent statements in such GreenPoint
SEC Documents (including any related notes and schedules thereto) fairly
presents, or will fairly present, the results of operations, changes in
stockholders' equity and changes in cash flows, as the case may be, of
GreenPoint and its consolidated Subsidiaries for the periods to which they
relate, in each case in accordance with GAAP consistently applied during the
periods involved, except in each case as may be noted therein, subject to normal
year-end audit adjustments in the case of unaudited statements.
(ii) GreenPoint and its Significant Subsidiaries have each
timely filed all reports, registrations and statements, together with any
amendments required to be made with respect thereto, that they were required to
file since January 1, 1996 with any Regulatory Authorities or any SRO, and all
other material reports and statements required to be filed by them since such
date, including, without limitation, any report or statement required to be
filed pursuant to the laws, rules or regulations of the United States, any state
regulatory authority or SRO and have paid all fees and assessments due and
payable in connection therewith; all such reports and filings comply in all
material respects with applicable requirements and do not contain any untrue or
misleading statement of material fact or omit to make any statement of material
fact required to be stated or necessary to make the statements therein not
misleading.
(h) Regulatory Matters.
------------------
46
(i) Neither GreenPoint nor any of its Significant Subsidiaries
nor their respective properties is a party to or is subject to any order,
decree, agreement, memorandum of understanding or similar arrangement with, or a
commitment letter or similar submission to, or extraordinary supervisory letter
from, any Regulatory Authority.
(ii) Neither GreenPoint nor any of its Significant Subsidiaries
has been advised by any Regulatory Authority that such Regulatory Authority is
contemplating issuing or requesting (or is considering the appropriateness of
issuing or requesting) any such order, decree, agreement, memorandum of
understanding, commitment letter, supervisory letter or similar submission.
(i) Compliance with Laws. GreenPoint and each of its Subsidiaries:
--------------------
(i) in the conduct of its business, is in compliance with all
applicable federal, state, local and foreign statutes, laws, regulations,
ordinances, rules, judgments, orders or decrees applicable thereto or to the
current or former employees conducting such businesses, including, without
limitation, the Equal Credit Opportunity Act, the Fair Housing Act, the
Community Reinvestment Act, the Home Mortgage Disclosure Act and all other
applicable fair lending laws and other laws relating to discriminatory business
practices;
(ii) has all permits, licenses, authorizations, orders and
approvals of, and has made all filings, applications and registrations with, all
Governmental Authorities that are required in order to permit them to own or
lease their properties and to conduct their businesses as presently conducted;
all such permits, licenses, certificates of authority, orders and approvals are
in full force and effect and, to GreenPoint's knowledge, no suspension or
cancellation of any of them is threatened; and
(iii) has received, since December 31, 1996, no notification or
communication from any Governmental Authority (A) asserting that any of them is
not in compliance with any statute, regulation, or ordinance or (B) threatening
to revoke any license, franchise, permit, or governmental authorization (nor, to
GreenPoint's knowledge, do any grounds for any of the foregoing exist).
47
(j) No Brokers. No action has been taken by GreenPoint that would give
----------
rise to any valid claim against any party hereto for a brokerage commission,
finder's fee or other like payment with respect to the transactions contemplated
by this Plan, excluding a fee to be paid to Xxxxx, Xxxxxxxx & Xxxxx Inc .
(k) Tax Treatment. As of the date hereof, neither GreenPoint nor any of
-------------
its Subsidiaries has any reason to believe that any conditions exist that might
prevent or impede the Merger from qualifying as a reorganization within the
meaning of Section 368(a) of the Code.
(l) Accounting Treatment. As of the date hereof, GreenPoint is aware of
--------------------
no reason why the Merger will fail, or could reasonably be expected to fail, to
qualify for "pooling of interests" accounting treatment.
(m) Disclosure. The representations and warranties contained in this
----------
Section 5.4 do not contain any untrue statement of a material fact.
-----------
(n) Material Adverse Change. Since December 31, 1997, no event has
-----------------------
occurred or circumstances arisen that, individually or taken together with all
other events and circumstances, has had or is reasonably likely to have a
Material Adverse Effect on GreenPoint or any of its Subsidiaries, taken as a
whole.
(o) Year 2000 Compliance. None of GreenPoint or any of its Significant
--------------------
Subsidiaries has received, or reasonably expects to receive, a "Year 2000
Deficiency Notification Letter" (as such term is employed in the Federal
Reserve's Supervision and Regulation Letter No. SR 98-3(SUP), dated March 4,
1998). GreenPoint has disclosed to Headlands a complete and correct copy of
GreenPoint's plan for addressing the issues set forth in the statements of the
Federal Financial Institutions Examination Council, dated May 5, 1997, entitled
"Year 2000 Project Management Awareness," and December 1997, entitled "Safety
and Soundness Guidelines Concerning the Year 2000 Business Risk," as such issues
affect GreenPoint and its Significant Subsidiaries, and such plan will provide
so that (x) the change of the year form 1999 to the year 2000 will not
materially and adversely affect the information and business systems of
GreenPoint or any of its Significant Subsidiaries and (y) that the impacts of
such change on the vendors and customers of GreenPoint and its Significant
Subsidiaries will not have a Material Adverse Effect
48
on GreenPoint and its Significant Subsidiaries. Neither GreenPoint nor any of
its Significant Subsidiaries has received, and has no reason to believe that it
will receive, regulatory criticism of such plan that could jeopardize such
plan's approval.
ARTICLE VI.
COVENANTS
6.1 Reasonable Best Efforts. Subject to the terms and conditions of
-----------------------
this Plan, each of Headlands and GreenPoint agrees to use its reasonable best
efforts in good faith to take, or cause to be taken, all actions, and to do, or
cause to be done, all things necessary, proper or desirable, or advisable under
applicable laws, so as to permit consummation of the Merger as promptly as
practicable and otherwise to enable consummation of the transactions
contemplated hereby and shall cooperate fully with the other party hereto to
that end.
6.2 Stockholder Approval. Headlands agrees to take, in accordance
--------------------
with applicable law, NASDAQ rules and its articles of incorporation and bylaws,
all action necessary to convene an appropriate meeting of its stockholders to
consider and vote upon the approval and adoption of this Plan and any other
matters required to be approved by Headlands's stockholders for consummation of
the Merger (including any adjournment or postponement, the "Headlands Meeting"),
as promptly as practicable after the Registration Statement is declared
effective. The Headlands Board shall recommend such approval, and Headlands
shall (subject to compliance with its fiduciary duties under the law as
reasonably determined in good faith) take all reasonable, lawful action to
solicit such approval by its stockholders.
6.3 Registration Statement.
----------------------
(a) As soon as reasonably practicable after the date hereof, GreenPoint
agrees to prepare a registration statement on Form S-4 or other applicable form
(the "Registration Statement") to be filed by GreenPoint with the SEC in
connection with the issuance of GreenPoint Common Stock in the Merger (including
the proxy statement and prospectus and other proxy solicitation materials of
GreenPoint and Headlands constituting a part thereof (the "Proxy Statement") and
all related documents). Headlands
49
agrees to cooperate, and to cause its Subsidiaries to cooperate, with
GreenPoint, its counsel and its accountants, in GreenPoint's preparation of the
Registration Statement and the Proxy Statement; and provided that Headlands and
its Subsidiaries have cooperated as required above, GreenPoint agrees to file
the Proxy Statement in preliminary form with the SEC as promptly as reasonably
practicable, and to file the Registration Statement with the SEC as soon as
reasonably practicable after any SEC comments with respect to the preliminary
Proxy Statement are resolved. Each of Headlands and GreenPoint agrees to use all
reasonable efforts to cause the Registration Statement to be declared effective
under the Securities Act as promptly as reasonably practicable after filing
thereof. GreenPoint also agrees to use all reasonable efforts to obtain all
necessary state securities law or "Blue Sky" permits and approvals required to
carry out the transactions contemplated by this Plan. Headlands agrees to
furnish to GreenPoint all information concerning Headlands, its Subsidiaries,
officers, directors and stockholders required to be included in the Registration
Statement or Proxy Statement under the Securities Act as may be reasonably
requested by GreenPoint in connection with the foregoing.
(b) Each of Headlands and GreenPoint agrees, as to itself and its
Subsidiaries, that none of the information supplied or to be supplied by it for
inclusion or incorporation by reference in (i) the Registration Statement will,
at the time the Registration Statement and each amendment or supplement thereto,
if any, becomes effective under the Securities Act, contain any untrue statement
of a material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein not misleading, (ii) the
Proxy Statement and any amendment or supplement thereto will, at the date of
mailing to stockholders and at the time of the Headlands Meeting, contain any
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary to make the statements therein not misleading
or any statement which, in the light of the circumstances under which such
statement is made, is false or misleading with respect to any material fact, or
omits to state any material fact necessary in order to make the statements
therein not false or misleading or necessary to correct any statement in any
earlier statement in the Proxy Statement or any amendment or supplement thereto,
and (iii) any other documents (and any supplements or amendments to such
documents) to be filed with any Regulatory Authority in
50
connection with the transactions contemplated hereby will, when filed with any
such Regulatory Authority, contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary to
make the statements therein not misleading. Each of Headlands and GreenPoint
further agrees that if it shall become aware prior to the Effective Date of any
information furnished by it that would cause any of the statements in the Proxy
Statement to be false or misleading with respect to any material fact, or to
omit to state any material fact necessary to make the statements therein not
false or misleading, to promptly inform the other party and to take the
necessary steps to correct the Proxy Statement.
(c) GreenPoint agrees to advise Headlands, promptly after GreenPoint
receives notice thereof, of the time when the Registration Statement has become
effective or any supplement or amendment has been filed, of the issuance of any
stop order or the suspension of the qualification of GreenPoint Common Stock for
offering or sale in any jurisdiction, of the initiation or threat of any
proceeding for any such purpose, or of any request by the SEC for the amendment
or supplement of the Registration Statement or for additional information.
6.4. Press Releases. Each of Headlands and GreenPoint agrees that it
--------------
will not, without the prior approval of the other party, issue any press release
or written statement for general circulation relating to the transactions
contemplated hereby, except as otherwise required by applicable law or
regulation or NYSE or NASDAQ rules.
6.5. Access; Information.
-------------------
(a) Each of Headlands and GreenPoint agrees that upon reasonable notice
and subject to applicable laws relating to the exchange of information, it shall
afford the other party and the other party's officers, employees, counsel,
accountants and other authorized representatives, such access during normal
business hours throughout the period prior to the Effective Time to the books,
records (including, without limitation, tax returns and work papers of
independent auditors), properties, personnel and to such other information as
any party may reasonably request and, during such period, it shall furnish
promptly to such other party (i) a copy of each material report, schedule and
other document filed by it pursuant to the requirements of federal or state
securities or banking laws, and (ii) all other information
51
concerning the business, properties and personnel of it as the other may
reasonably request.
(b) Each agrees that it will not, and will cause its representatives
not to, use any information obtained pursuant to this Section 6.5 (as well as
-----------
any other information obtained prior to the date hereof in connection with the
entering into of this Plan) for any purpose unrelated to the consummation of the
transactions contemplated by this Plan. Subject to the requirements of law, each
party will keep confidential, and will cause its representatives to keep
confidential, all information and documents obtained pursuant to this Section
-------
6.5 (as well as any other information obtained prior to the date hereof in
---
connection with the entering into of this Plan) unless such information (i) was
already known to such party, (ii) becomes available to such party from other
sources not known by such party to be bound by a confidentiality obligation,
(iii) is disclosed with the prior written approval of the party to which such
information pertains or (iv) is or becomes readily ascertainable from published
information or trade sources. In the event that this Plan is terminated or the
transactions contemplated by this Plan shall otherwise fail to be consummated,
each party shall promptly cause all copies of documents or extracts thereof
containing information and data as to another party hereto to be returned to the
party which furnished the same.
(c) No investigation by either party of the business and affairs of the
other shall affect or be deemed to modify or waive any representation, warranty,
covenant or agreement in this Plan, or the conditions to either party's
obligation to consummate the transactions contemplated by this Plan.
6.6. Acquisition Proposals. Headlands agrees that it shall not, and
---------------------
shall cause its Subsidiaries and its Subsidiaries's officers, directors, agents,
advisors and affiliates not to, solicit or encourage inquiries or proposals with
respect to, or engage in any negotiations concerning, or provide any
confidential information to, or have any discussions with, any person relating
to, any Acquisition Proposal; provided, however, that Headlands may, and may
-------- -------
authorize and permit its officers, directors, employees or agents to, furnish or
cause to be furnished confidential information and may participate in such
discussions and negotiations if Headlands's Board of Directors, after having
consulted with and considered the advice of outside
52
counsel has determined that the failure to provide such information or
participate in such negotiations and discussions would cause the members of such
Board of Directors to breach their fiduciary duties under applicable laws.
Headlands agrees that it shall immediately cease and cause to be terminated any
activities, discussions or negotiations conducted prior to the date of this Plan
with any parties other than GreenPoint with respect to any of the foregoing and
shall use its reasonable best efforts to enforce any confidentiality or similar
agreement relating to an Acquisition Proposal. Headlands shall promptly (within
24 hours) advise GreenPoint following the receipt by Headlands of any
Acquisition Proposal and the substance thereof (including the identity of the
person making such Acquisition Proposal), and advise GreenPoint of any
developments with respect to such Acquisition Proposal immediately upon the
occurrence thereof.
6.7. Affiliate Agreements.
--------------------
(a) Not later than the 15th day prior to the mailing of the Proxy
Statement, (i) Headlands shall deliver to GreenPoint a schedule of each person
that, to the best of its knowledge, is or is reasonably likely to be, as of the
date of the Headlands Meeting, deemed to be an "affiliate" of Headlands (each, a
"Headlands Affiliate") as that term is used in Rule 145 under the Securities Act
or SEC Accounting Series Releases 130 and 135.
(b) Each of Headlands and GreenPoint shall use its reasonable best
efforts to cause each person who may be deemed to be a Headlands Affiliate to
execute and deliver to GreenPoint on or before the date of mailing of the Proxy
Statement an agreement in the form attached hereto as Exhibit C. Such Headlands
Affiliates will not receive New Certificates until such agreement is delivered
to GreenPoint.
6.8. Takeover Laws. No party hereto shall take any action that would
-------------
cause the transactions contemplated by this Plan or the Stock Option Agreement
to be subject to requirements imposed by any Takeover Law and each of them shall
take all necessary steps within its control to exempt (or ensure the continued
exemption of) the transactions contemplated by this Plan from, or if necessary
challenge the validity or applicability of, any applicable Takeover Law, as now
or hereafter in effect.
53
6.9. Certain Modifications; Restructuring Charges.
--------------------------------------------
(a) Headlands and GreenPoint shall consult with respect to their loan,
litigation, risk management, accounting and real estate valuation policies and
practices and Headlands shall make such modifications or changes to its policies
and practices, if any, and at such date prior to the Effective Time, as may be
mutually agreed upon. Headlands and GreenPoint shall also consult with respect
to the character, amount and timing of restructuring charges to be taken by each
of them in connection with the transactions contemplated hereby and shall take
such charges in accordance with GAAP, as may be mutually agreed upon. No party's
representations, warranties and covenants contained in this Plan shall be deemed
to be untrue or breached in any respect for any purpose as a consequence of any
modifications or changes to such policies and practices which may be undertaken
on account of this Section 6.9.
-----------
(b) In the case of Headlands, it agrees to amend any Compensation and
Benefit Plan qualified under Section 401(k) of the Code which offers Headlands
Common Stock as an investment option, as soon as reasonably practicable after
the execution of this Plan, so that no original issue shares of Headlands Common
Stock will be issued under such Compensation and Benefit Plan thereafter .
6.10. NYSE Listing. GreenPoint agrees to use its reasonable best
------------
efforts to list, prior to the Effective Date, on the NYSE, subject to official
notice of issuance, the shares of GreenPoint Common Stock to be issued to the
holders of Headlands Common Stock in the Merger.
6.11 Regulatory Applications; Consents.
---------------------------------
(a) GreenPoint and Headlands and their respective Subsidiaries shall
cooperate and use their respective reasonable best efforts to prepare all
documentation, to effect all filings as soon as reasonably practicable, but in
no event later than 45 days from the date hereof, and to obtain all permits,
consents, approvals and authorizations of all third parties and Governmental
Authorities necessary to consummate the transactions contemplated by this Plan.
Each of GreenPoint and Headlands shall have the right to review in advance, and
to the extent practicable each will consult with the other, in each case subject
to applicable laws relating to the exchange of
54
information, with respect to all material written information submitted to any
third party or any Governmental Authority in connection with the transactions
contemplated by this Plan. In exercising the foregoing right, each of the
parties hereto agrees to act reasonably and as promptly as practicable. Each
party hereto agrees that it will consult with the other party hereto with
respect to the obtaining of all material permits, consents, approvals and
authorizations of all third parties and Governmental Authorities necessary or
advisable to consummate the transactions contemplated by this Plan and each
party will keep the other party appraised of the status of material matters
relating to completion of the transactions contemplated hereby.
(b) Each party agrees, upon request, to furnish the other party with
all information concerning itself, its Subsidiaries, directors, officers and
stockholders and such other matters as may be reasonably necessary or advisable
in connection with any filing, notice or application made by or on behalf of
such other party or any of its Subsidiaries to any third party or Governmental
Authority.
(c) Headlands agrees that it shall use its reasonable best efforts to
obtain the consents and approvals required to be made or obtained by Headland as
set forth in Sections 5.3(f)(i), 5.3(f)(ii) and 5.3(j) prior to the Effective
Time.
6.12. Indemnification.
---------------
(a) Following the Effective Date and for a period of six years
thereafter, GreenPoint shall indemnify, defend and hold harmless the present
directors of Headlands and its Subsidiaries (each, an "Indemnified Party")
against all costs or expenses (including reasonable attorneys' fees), judgments,
fines, losses, claims, damages or liabilities incurred in connection with any
claim, action, suit, proceeding or investigation, whether civil, criminal,
administrative or investigative, arising out of actions or omissions occurring
at or prior to the Effective Time (including, without limitation, the
transactions contemplated by this Plan) to the extent that Headlands is
authorized to indemnify (and advance expenses to) its directors under the laws
of the State of California, the Headlands Certificate and the Headlands Bylaws
as in effect on the date hereof; provided that any determination required to be
made with respect to whether an officer's or director's conduct complies with
the standards set forth under California law, the Headlands Certificate and the
55
Headlands Bylaws shall be made by independent counsel (which shall not be
counsel that provides material services to GreenPoint) selected by GreenPoint
and reasonably acceptable to such officer or director; and provided, further,
that in the absence of applicable California judicial precedent to the contrary,
such counsel, in making such determination, shall presume such officer's or
director's conduct complied with such standard and GreenPoint shall have the
burden to demonstrate that such officer's or director's conduct failed to comply
with such standard.
(b) Any Indemnified Party wishing to claim indemnification under
Section 6.12(a), upon learning of any claim, action, suit, proceeding or
---------------
investigation described above, shall promptly notify GreenPoint thereof;
provided that the failure so to notify shall not affect the obligations of
GreenPoint under Section 6.12(a) unless and to the extent that GreenPoint is
---------------
actually prejudiced as a result of such failure.
(c) If GreenPoint or any of its successors or assigns shall consolidate
with or merge into any other entity and shall not be the continuing or surviving
entity of such consolidation or merger or shall transfer all or substantially
all of its assets to any other entity, then and in each case, proper provision
shall be made so that the successors and assigns of GreenPoint shall assume the
obligations set forth in this Section 6.12.
------------
(d) The provisions of this Section are intended to be for the benefit
of, and shall be enforceable by, each of the Indemnified Parties, their heirs
and their representatives.
6.12A. D&O Insurance. For six years after the Effective Time, the
-------------
Surviving Corporation (or an Affiliate thereof) shall maintain in effect
Headlands' current directors' and officers' liability insurance covering acts or
omissions occurring prior to the Effective Time with respect to those persons
who are currently covered by Headlands' directors' and officers' liability
insurance policy on terms with respect to such coverage and amount no less
favorable than those of such policy in effect on the date hereof so long as the
annual premium therefor is not in excess of 150% of the aggregate premiums paid
by Headlands in 1998 on an annualized basis for such purpose (which aggregate
premium on an annualized basis has been Previously Disclosed by Headlands), but
if the annual premium therefor so exceeds such amount, the Surviving Corporation
(or an Affiliate thereof) will
56
obtain as much directors' and officers' liability insurance as can be obtained
for the remainder of such period for a premium not in excess of 150% of the
aggregate premiums paid by Headlands in 1998 on an annualized basis for such
purpose; provided that the Surviving Corporation (or an Affiliate thereof) may
--------
substitute therefor policies of the Surviving Corporation or its Affiliates
containing terms with respect to coverage and amount no less favorable to such
directors or officers; provided, further, that if the existing or substituted
-------- -------
directors' and officers' liability insurance expires, is terminated or canceled
the Surviving Corporation (or an Affiliate thereof) shall obtain directors' and
officers' liability insurance with respect to coverage and amounts no less
favorable than those of such policy in effect on the date hereof for the
remainder of the six-year period so long as the annual premium therefor is not
in excess of 150% of the aggregate premiums paid by Headlands in 1998 on an
annualized basis for such purpose, but if the Surviving Corporation (or an
Affiliate thereof) cannot obtain such coverage for a premium not in excess of
such amount, the Surviving Corporation (or an Affiliate thereof) shall obtain as
much directors' and officers' liability insurance as can be obtained for the
remainder of such period for a premium not in excess of 150% of the aggregate
premiums paid by Headlands in 1998 on an annualized basis for such purpose.
6.13. Benefit Plans.
-------------
(a) Following the Effective Time, employees of Headlands and its
Subsidiaries shall continue to be provided with benefits under employee benefit
plans that are substantially comparable in the aggregate to those currently
provided by Headlands and its Subsidiaries to such employees. In the event that
following the Effective Time an employee of Headlands or its Subsidiaries is
eligible to be covered under a GreenPoint or GreenPoint Subsidiary medical
insurance plan, such employee (or his or her eligible dependents) shall not be
excluded from coverage under such plan on the basis of a pre-existing condition
that was not also excluded under Headlands' medical insurance plans. In the
event that following the Effective Time an employee of Headlands or its
Subsidiaries is eligible to be covered under an employee benefit plan of
GreenPoint, then for all purposes under each employee benefit plan to be
provided by GreenPoint to employees of Headlands or its Subsidiaries, GreenPoint
shall recognize such employee's prior service with Headlands or its Subsidiaries
(to the same extent such service was recognized under a similar plan
57
of Headlands or its Subsidiaries), except that such prior service shall not be
counted for the following purposes: (i) eligibility or vesting for purposes of
the non-401(k) and (m) related portions of GreenPoint's Employee Stock Ownership
Plan, (ii) the rate of accrual under GreenPoint's cash balance defined benefit
plan and (iii) eligibility to participate in GreenPoint's retiree medical and
life insurance coverage programs.
(b) Prior to the Effective Time, Headlands shall take or cause to be
taken any and all such reasonable actions as may be necessary such that each
outstanding Headlands Stock Option, dividend equivalent right, stock
appreciation right, limited stock appreciation right, restricted stock, deferred
stock and performance share award is not cashed out (whether by payment in cash
or other property) and does not become vested and exercisable or distributable
as a result of the transactions contemplated hereby.
(c) From and after the Effective Time, GreenPoint shall, and shall
cause its Subsidiaries to, credit any deductibles and out-of-pocket expenses
that are applicable and/or covered under the Compensation and Benefit Plans, and
are incurred by the employees and their beneficiaries during the portion of the
calendar year prior to participation in the benefit plans provided by
GreenPoint, the Surviving Corporation and the GreenPoint subsidiaries.
(d) From and after the Effective Time, GreenPoint shall honor, and
shall cause the Surviving Corporation to honor, in accordance with their terms
all benefits vested as of the date hereof under the Compensation and Benefit
Plans or under other Previously Disclosed agreements, understandings or
arrangements except to the extent any such agreements, understandings or
arrangements are superseded pursuant to any agreements entered into on or after
the date hereof. Nothing herein shall prevent GreenPoint from terminating any
Compensation and Benefit Plan in accordance with its terms and subject to
applicable law.
(e) From the date hereof, any employee communications relating to the
Compensation and Benefit Plans to be distributed by Headlands or its
Subsidiaries shall be subject to GreenPoint's prior review and approval, which
approval shall be processed timely and shall not be unreasonably denied.
58
6.14. Notification of Certain Matters. Each of Headlands and
-------------------------------
GreenPoint shall give prompt notice to the other of any fact, event or
circumstance known to it that (i) is reasonably likely, individually or taken
together with all other facts, events and circumstances known to it, to result
in any Material Adverse Effect with respect to it or (ii) would cause or
constitute a material breach of any of its representations, warranties,
covenants or agreements contained herein.
6.15. Directors. GreenPoint agrees to cause Xxxxx X. Xxxx to be
---------
appointed as a director on the GreenPoint Board and Vice Chairman of GreenPoint
(which is an officer position, not a Board of Directors position) as of the
Effective Time (such appointment to be subject to prior execution of, and the
terms and conditions of, the Employee Agreement of Xx. Xxxx).
6.16. Merger Sub Vote. GreenPoint shall vote (or consent with respect
---------------
to) or cause to be voted (or a consent to be given with respect to) any shares
of Merger Sub Common Stock beneficially owned by it or any of its affiliates or
with respect to which it or any of its affiliates has the power (by agreement,
proxy or otherwise) to cause to be voted (or to provide a consent), in favor of
the adoption and approval of this Plan at any meeting of the stockholders of
Merger Sub at which this Plan and the Stock Option Agreement shall be submitted
for adoption and approval and at all adjournments or postponements thereof (or,
if applicable, by any action of stockholders of Merger Sub by consent in lieu of
a meeting).
6.17. Publication of Combined and Financial Results. GreenPoint
---------------------------------------------
agrees to use its reasonable best efforts to publish, as soon as reasonably
practicable after the Effective Date (and in no event later than 60 days after
the end of the month immediately following the month in which the Effective Date
occurred), 30-day combined financial statements as contemplated by and in
accordance with the terms of SEC Accounting Series Release No. 35.
6.18. Surviving Corporation Name. GreenPoint agrees to cause the
--------------------------
name of the Surviving Corporation initially to be Headlands Mortgage Company.
6.19 1998 Employee Stock Purchase Plan. Headlands agrees to take
---------------------------------
all such actions as may be necessary to terminate the 1998 Employee Stock
Purchase Plan as of December 31, 1998.
59
6.21. Founders Registration Rights Agreement. Headlands agrees to take
--------------------------------------
all such actions as may be necessary to terminate the Founders Registration
Rights Agreement, dated as of December __, 1997, by and among Headlands and
certain stockholders of Headlands, prior to the Effective Date.
ARTICLE VII.
CONDITIONS TO CONSUMMATION OF THE MERGERS
7.1 Conditions to Each Party's Obligation to Effect the Merger. The
----------------------------------------------------------
respective obligation of each of GreenPoint, Merger Sub and Headlands to
consummate the Merger is subject to the fulfillment or written waiver by
GreenPoint and Headlands prior to the Effective Time of each of the following
conditions:
(a) Stockholder Approvals. This Plan and the Merger shall have been
---------------------
duly adopted by the requisite vote of the stockholders of Headlands.
(b) Regulatory Approvals. All regulatory approvals required to
--------------------
consummate the transactions contemplated hereby (other than the Contribution),
shall have been obtained and shall remain in full force and effect and all
statutory waiting periods in respect thereof shall have expired and no such
approvals shall contain any conditions, restrictions or requirements which
would, following the Effective Time, have a Material Adverse Effect on the
Surviving Corporation.
(c) No Injunction. No Governmental Authority of competent jurisdiction
-------------
shall have enacted, issued, promulgated, enforced or entered any statute, rule,
regulation, judgment, decree, injunction or other order (whether temporary,
preliminary or permanent) which is in effect and prohibits consummation of the
transactions contemplated by this Plan.
(d) Registration Statement. The Registration Statement shall have
----------------------
become effective under the Securities Act and no stop order suspending the
effectiveness of the Registration Statement shall have been issued and no
proceedings for that purpose shall have been initiated or threatened by the SEC.
(e) Blue Sky Approvals. All permits and other authorizations under
------------------
state securities laws necessary to consummate the transactions contemplated
hereby and to issue the
60
shares of GreenPoint Common Stock to be issued in the Merger shall have been
received and be in full force and effect.
(f) Listing. The shares of GreenPoint Common Stock to be issued in the
-------
Merger shall have been approved for listing on the NYSE, subject to official
notice of issuance.
7.2. Conditions to Obligation of Headlands. The obligation of
-------------------------------------
Headlands to consummate the Merger is also subject to the fulfillment or written
waiver by Headlands prior to the Effective Time of each of the following
conditions:
(a) Representations and Warranties. The representations and warranties
------------------------------
of GreenPoint set forth in this Plan shall be true and correct (subject to the
standard set forth in Section 5.2 and disregarding, for purposes of this
-----------
provision, any qualifications regarding materiality or knowledge contained in
any single representation or warranty) as of the date of this Plan and as of the
Effective Date as though made on and as of the Effective Date (except that
representations and warranties that by their terms speak as of the date of this
Plan or some other date shall be true and correct only as of such date), and
Headlands shall have received a certificate, dated the Effective Date, signed on
behalf of GreenPoint by the Executive Vice President, Finance of GreenPoint to
such effect.
(b) Performance of Obligations of GreenPoint. GreenPoint shall have
----------------------------------------
performed in all material respects all obligations required to be performed by
it under this Plan at or prior to the Effective Time, and Headlands shall have
received a certificate, dated the Effective Date, signed on behalf of GreenPoint
by the Executive Vice President, Finance of GreenPoint to such effect.
(c) Opinion of Headlands's Counsel. Headlands shall have received an
------------------------------
opinion of Xxxxxxxx & Xxxxxxxx, special counsel to Headlands, dated the
Effective Date, to the effect that, on the basis of facts, representations and
assumptions set forth in such opinion, (i) the Merger constitutes a
"reorganization" within the meaning of Section 368(a) of the Code and (ii) no
gain or loss will be recognized by stockholders of Headlands who receive shares
of GreenPoint Common Stock in exchange for shares of Headlands Common Stock,
except with respect to cash received in lieu of fractional share interests. In
rendering its opinion, Xxxxxxxx & Xxxxxxxx may require and rely upon
representations
61
contained in letters from Headlands, GreenPoint and stockholders of Headlands.
(d) Accounting Treatment. Headlands shall have received a letter from
--------------------
KPMG Peat Marwick LLP addressed to Headlands to the effect that the Merger will
qualify for "pooling of interests" accounting treatment.
7.3. Conditions to Obligation of GreenPoint and Merger Sub. The
-----------------------------------------------------
obligation of GreenPoint and Merger Sub to consummate the Merger is also subject
to the fulfillment or written waiver by GreenPoint prior to the Effective Time
of each of the following conditions:
(a) Representations and Warranties. The representations and warranties
------------------------------
of Headlands set forth in this Plan shall be true and correct (subject to the
standard set forth in Section 5.2 and disregarding, for purposes of this
provision, any qualifications regarding materiality or knowledge contained in
any single representation or warranty) as of the date of this Plan and as of the
Effective Date as though made on and as of the Effective Date (except that
representations and warranties that by their terms speak as of the date of this
Plan or some other date shall be true and correct only as of such date) and
GreenPoint shall have received a certificate, dated the Effective Date, signed
on behalf of Headlands by the Chief Executive Officer of Headlands to such
effect.
(b) Performance of Obligations of Headlands. Headlands shall have
---------------------------------------
performed in all material respects all obligations required to be performed by
it under this Plan at or prior to the Effective Time, and GreenPoint shall have
received a certificate, dated the Effective Date, signed on behalf of Headlands
by the Chief Executive Officer of Headlands to such effect.
(c) Opinion of GreenPoint's Counsel. GreenPoint shall have received an
-------------------------------
opinion of Wachtell, Lipton, Xxxxx & Xxxx, counsel to GreenPoint, dated the
Effective Date, to the effect that, on the basis of facts, representations and
assumptions set forth in such opinion, (i) the Merger constitutes a
reorganization under Section 368(a) of the Code and (ii) no gain or loss will be
recognized by stockholders of Headlands who receive shares of GreenPoint Common
Stock in exchange for shares of Headlands Common Stock, except with respect to
cash received in lieu of fractional share interests. In rendering its opinion,
Wachtell,
62
Lipton, Xxxxx & Xxxx may require and rely upon representations contained in
letters from Headlands, GreenPoint and stockholders of Headlands.
(d) Employee Agreements. The Employee Agreements shall have been
-------------------
executed and delivered, shall be in full force and effect, and no event or
condition shall have occurred or exist (other than as a result of any action or
omission of GreenPoint or Merger Sub) which, with the passage of time or notice
or both, would constitute a breach or default under any Employee Agreement.
(e) Accounting Treatment. GreenPoint shall have received a letter from
--------------------
PricewaterhouseCoopers addressed to GreenPoint to the effect that the Merger
will qualify for "pooling of interests" accounting treatment.
ARTICLE VIII.
TERMINATION
8.1. Termination. This Plan may be terminated, and the Merger may
-----------
be abandoned:
(a) Mutual Consent. At any time prior to the Effective Time, by the
--------------
mutual consent of GreenPoint and Headlands, if the Board of Directors of each so
determines by vote of a majority of the members of its entire Board.
(b) Breach. At any time prior to the Effective Time, by GreenPoint or
------
Headlands, if its Board of Directors so determines by vote of a majority of the
members of its entire Board, in the event of either: (i) a breach by the other
party of any representation or warranty contained herein (subject to the
standard set forth in Section 5.2 and disregarding, for purposes of this
-----------
provision, any qualifications regarding materiality or knowledge contained in
any single representation or warranty), which breach cannot be or has not been
cured within 30 days after the giving of written notice to the breaching party
of such breach; or (ii) a material breach by the other party of any of the
covenants or agreements contained herein, which breach cannot be or has not been
cured within 30 days after the giving of written notice to the breaching party
of such breach.
(c) Delay. At any time prior to the Effective Time, by GreenPoint or
-----
Headlands, if its Board of Directors so determines
63
by vote of a majority of the members of its entire Board, in the event that the
Merger is not consummated by July 31, 1999, except to the extent that the
failure of the Merger to be consummated by such date arises out of or results
from the knowing action or inaction of the party seeking to terminate pursuant
to this Section 8.1(c).
--------------
(d) No Approval. By Headlands or GreenPoint, if its Board of Directors
-----------
so determines by a vote of a majority of the members of its entire Board, in the
event (i) the approval of any Governmental Authority required for consummation
of the Merger and the other transactions contemplated by this Plan shall have
been denied by final nonappealable action of such Governmental Authority or (ii)
any stockholder approval required by Section 7.1(a) herein is not obtained at
the Headlands Meeting.
(e) Failure to Recommend, Etc. At any time prior to the Headlands
-------------------------
Meeting, by GreenPoint if the Headlands Board shall have failed to make its
recommendation referred to in Section 6.2, withdrawn such recommendation or
-----------
modified or changed such recommendation in a manner adverse in any respect to
the interests of GreenPoint.
8.2 Effect of Termination and Abandonment. In the event of
-------------------------------------
termination of this Plan and the abandonment of the Merger pursuant to this
Article VIII, no party to this Plan shall have any liability or further
------------
obligation to any other party hereunder except (i) as set forth in Section 9.1
-----------
and (ii) that termination will not relieve a breaching party from liability for
any willful breach of this Plan giving rise to such termination.
ARTICLE IX.
MISCELLANEOUS
9.1. Survival. No representations, warranties, agreements and
--------
covenants contained in this Plan shall survive the Effective Time (other than
Section 6.12 (Indemnification), 6.12A (D&O Insurance) and this Article IX which
------------ ----------
shall survive the Effective Time) or the termination of this Plan if this Plan
is terminated prior to the Effective Time (other than Sections 6.5(b) (Access;
---------------
Information) and 8.2 (Effect of Termination and Abandonment), and this Article
--- -------
IX which shall survive such termination).
--
64
9.2. Waiver; Amendment. Prior to the Effective Time, any provision
-----------------
of this Plan may be (i) waived by the party benefited by the provision, or (ii)
amended or modified at any time, by an agreement in writing between the parties
hereto executed in the same manner as this Plan, except that after the Headlands
Meeting, this Plan may not be amended if it would violate the CGCL or reduce the
consideration to be received by Headlands stockholders in the Merger.
9.3. Counterparts. This Plan may be executed in one or more
------------
counterparts, each of which shall be deemed to constitute an original.
9.4. Governing Law. This Plan shall be governed by, and interpreted
-------------
in accordance with, the laws of the State of New York applicable to contracts
made and to be performed entirely within such State.
9.5. Expenses. Each party hereto will bear all expenses incurred by
--------
it in connection with this Plan and the transactions contemplated hereby, except
that printing expenses and SEC fees shall be shared equally between Headlands
and GreenPoint, except that GreenPoint shall pay any filing fees pursuant to the
HSR Act.
9.6. Notices. All notices, requests and other communications
-------
hereunder to a party shall be in writing and shall be deemed given if personally
delivered, telecopied (with confirmation) or mailed by registered or certified
mail (return receipt requested) to such party at its address set forth below or
such other address as such party may specify by notice to the parties hereto.
If to Headlands, to:
Headlands Mortgage Company
0000 Xxxxxxxx Xxxxxxx Xxxxxx
Xxxxx 000
Xxxxxxxx, Xxxxxxxxxx 00000
Attention: Chief Financial Officer
Facsimile: (415) ___-____
With a copy to:
Xxxxxxxx & Xxxxxxxx
65
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: H. Xxxxxx Xxxxx, Esq.
Facsimile: (000) 000-0000
If to GreenPoint, to:
GreenPoint Financial Corp.
00 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxxx
Senior Vice President and General Counsel
Facsimile: (000) 000-0000
With a copy to:
Wachtell, Lipton, Xxxxx & Xxxx
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx X. Xxxxxxxxx, Esq.
Facsimile: (000) 000-0000
9.7. Entire Understanding; No Third Party Beneficiaries. This Plan
--------------------------------------------------
and the Stock Option Agreement represent the entire understanding of the parties
hereto with reference to the transactions contemplated hereby and thereby and
this Plan supersedes any and all other oral or written agreements heretofore
made (other than the Stock Option Agreement). Except for Section 6.12, Section
---------------------
6.12A and Section 6.15, nothing in this Plan expressed or implied, is intended
----- ------------
to confer upon any person, other than the parties hereto or their respective
successors, any rights, remedies, obligations or liabilities under or by reason
of this Plan.
9.8. Interpretation; Effect. When a reference is made in this Plan
----------------------
to Sections, Exhibits or Schedules, such reference shall be to a Section of, or
Exhibit or Schedule to, this Plan unless otherwise indicated. The headings
contained in this Plan are for reference purposes only and are not part of this
Plan. Whenever the words "include," "includes" or "including" are used in this
Plan, they shall be deemed to be followed by the words "without limitation". No
provision of this Plan shall be construed to require Headlands, GreenPoint or
any of their respective Subsidiaries, affiliates or directors to take any
66
action which would violate applicable law (whether statutory or common law),
rule or regulation.
67
IN WITNESS WHEREOF, the parties hereto have caused this Plan to be
executed in counterparts by their duly authorized officers, all as of the day
and year first above written.
HEADLANDS MORTGAGE COMPANY
By: ________________________
Name:
Title:
GREENPOINT FINANCIAL CORP.
By: ________________________
Name:
Title:
GF ACQUISITION CORP.
By: ________________________
Name:
Title:
68
EXECUTION COPY
EXHIBIT A
---------
STOCK OPTION AGREEMENT
----------------------
STOCK OPTION AGREEMENT, dated as of December 8, 1998, between
GreenPoint Financial Corp., a Delaware corporation ("Grantee"), and Headlands
Mortgage Company, a California corporation("Issuer").
RECITALS
A. Grantee and Issuer have entered into an Agreement and Plan of Merger
(the "Merger Agreement").
B. As an inducement to the willingness of Grantee to continue to pursue
the transactions contemplated by the Merger Agreement, Issuer has agreed to
grant Grantee the Option (as hereinafter defined).
C. The Board of Directors of Issuer has approved the grant of the
Option and the Merger Agreement prior to the date hereof.
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants and agreements set forth herein and in the Merger Agreement, the
parties hereto agree as follows:
1. (a) Issuer hereby grants to Grantee an unconditional, irrevocable
option (the "Option") to purchase, subject to the terms hereof, up to that
number of fully paid and nonassessable shares of the common stock, without par
value, of Issuer ("Common Stock") equal to 19.9% of the Common Stock issued and
outstanding as of the date hereof at a price per share equal to $16.125 (as
adjusted, the "Option Price"). The number of shares of Common Stock that may be
received upon the exercise of the Option and the Option Price are subject to
adjustment as herein set forth.
(b) In the event that any shares of Common Stock are either (i)
issued or otherwise become outstanding after the date of this Agreement (other
than pursuant to this Agreement and other than pursuant to an event described in
Section 5(a) hereof) or (ii) redeemed, repurchased, retired or otherwise cease
------------
to be outstanding after the date of this Agreement, the number of shares of
Common Stock subject to the Option shall be increased or decreased, as
appropriate, so that, after such issuance or such redemption, repurchase,
retirement or other action, such number together with any shares of Common Stock
previously issued pursuant hereto, equals 19.9% of the number of shares of
Common
A-1
Stock then issued and outstanding without giving effect to any shares subject or
issued pursuant to the Option. Nothing contained in this Section l(b) or
------------
elsewhere in this Agreement shall be deemed to authorize Issuer to issue shares
in breach of any provision of the Merger Agreement.
2. (a) The Holder (as hereinafter defined) may exercise the Option, in
whole or part, if, but only if, both an Initial Triggering Event (as hereinafter
defined) and a Subsequent Triggering Event (as hereinafter defined) shall have
occurred prior to the occurrence of an Exercise Termination Event (as
hereinafter defined), provided that the Holder shall have sent the written
notice of such exercise (as provided in subsection (e) of this Section 2) within
---------
six (6) months following such Subsequent Triggering Event (or such later period
as provided in Section 10). Each of the following shall be an Exercise
----------
Termination Event: (i) the Effective Time (as defined in the Merger Agreement);
(ii) termination of the Merger Agreement in accordance with the provisions
thereof if such termination occurs prior to the occurrence of an Initial
Triggering Event except a termination by Grantee pursuant to Section 8.1(b)
-------------
(unless the breach giving rise to such termination was not willful) or Section
-------
8.1(e) of the Merger Agreement or by Grantee or Issuer pursuant to Section
----- -------
8.1(d)(ii) of the Merger Agreement (each, a "Listed Termination"); or (iii) the
---------
passage of fifteen (15) months (or such longer period as provided in Section 10)
----------
after termination of the Merger Agreement if such termination follows the
occurrence of an Initial Triggering Event or is a Listed Termination. The term
"Holder" shall mean the holder or holders of the Option. Notwithstanding
anything to the contrary contained herein, (i) the Option may not be exercised
at any time when Grantee shall be in material breach of any of its
representations, warranties, covenants or agreements contained in the Merger
Agreement such that Issuer shall be entitled to terminate the Merger Agreement
pursuant to Section 8.1(b) thereof and (ii) this Agreement shall automatically
-------------
terminate upon the proper termination of the Merger Agreement by Issuer pursuant
to Section 8.1(b) thereof as a result of the material breach by Grantee of its
-------------
representations, warranties, covenants or agreements contained in the Merger
Agreement.
(b) The term "Initial Triggering Event" shall mean any of the
following events or transactions occurring on or after the date hereof:
A-2
(i) Issuer or Headlands Mortgage Securities, Inc. (which Issuer
represents is its only subsidiary) (the "Issuer Subsidiary"), without having
received Grantee's prior written consent, shall have entered into an agreement
to engage in an Acquisition Transaction (as hereinafter defined) with any person
(the term "person" for purposes of this Agreement having the meaning assigned
thereto in Sections 3(a)(9) and 13(d)(3) of the Securities Exchange Act of 1934,
as amended (the "1934 Act"), and the rules and regulations thereunder) other
than Grantee or any of its Subsidiaries (each a "Grantee Subsidiary") or the
Board of Directors of Issuer (the "Issuer Board") shall have recommended that
the shareholders of Issuer approve or accept any Acquisition Transaction other
than as contemplated by the Merger Agreement. For purposes of this Agreement,
(a) "Acquisition Transaction" shall mean (x) a merger or consolidation, or any
similar transaction, involving Issuer or the Issuer Subsidiary (other than
mergers, consolidations or similar transactions involving solely Issuer and/or
one or more wholly-owned Subsidiaries of the Issuer, provided, any such
transaction is not entered into in violation of the terms of the Merger
Agreement), (y) a purchase, lease or other acquisition of all or any substantial
part of the assets of Issuer or the Issuer Subsidiary, or (z) a purchase or
other acquisition (including by way of merger, consolidation, share exchange or
otherwise) of securities representing 10% or more of the voting power of Issuer
or the Issuer Subsidiary and (b) "Subsidiary" shall have the meaning set forth
in Rule 12b-2 under the 1934 Act;
(ii) Any person other than the Grantee or any Grantee Subsidiary
shall have acquired after the date hereof beneficial ownership or the right to
acquire beneficial ownership of 10% or more of the outstanding shares of Common
Stock (the term "beneficial ownership" for purposes of this Agreement having the
meaning assigned thereto in Section 13(d) of the 1934 Act, and the rules and
regulations thereunder);
(iii) The shareholders of Issuer shall have voted and failed to
approve the Merger Agreement and the Merger at a meeting which has been held for
that purpose or any adjournment or postponement thereof, or such meeting shall
not have been held in violation of the Merger Agreement or shall have been
cancelled prior to termination of the Merger Agreement if, prior to such meeting
(or if such meeting shall not have been held or shall have been cancelled, prior
to such termination), it shall have been publicly announced that any person
(other than Grantee or
A-3
any of its Subsidiaries) shall have made, or disclosed an intention to make, a
bona fide proposal to engage in an Acquisition Transaction;
(iv) The Issuer Board shall have withdrawn or modified (or
publicly announced its intention to withdraw or modify) in any manner adverse in
any respect to Grantee its recommendation that the shareholders of Issuer
approve the transactions contemplated by the Merger Agreement, or Issuer or the
Issuer Subsidiary shall have authorized, recommended, proposed (or publicly
announced its intention to authorize, recommend or propose) an agreement to
engage in an Acquisition Transaction with any person other than Grantee or a
Grantee Subsidiary;
(v) Any person other than Grantee or any Grantee Subsidiary
shall have made a bona fide proposal to Issuer or its shareholders to engage in
an Acquisition Transaction and such proposal shall have been publicly announced;
(vi) Any person other than Grantee or any Grantee Subsidiary
shall have filed with the SEC a registration statement or tender offer materials
with respect to a potential exchange or tender offer that would constitute an
Acquisition Transaction (or filed a preliminary proxy statement with the SEC
with respect to a potential vote by its shareholders to approve the issuance of
shares to be offered in such an exchange offer);
(vii) Issuer shall have willfully breached any covenant or
obligation contained in the Merger Agreement in anticipation of engaging in an
Acquisition Transaction, and following such breach Grantee would be entitled to
terminate the Merger Agreement (whether immediately or after the giving of
notice or passage of time or both); or
(viii) Any person other than Grantee or any Grantee Subsidiary
shall have filed an application or notice with the Board of Governors of the
Federal Reserve System (the "Federal Reserve Board") or other federal or state
bank regulatory or antitrust authority, which application or notice has been
accepted for processing, for approval to engage in an Acquisition Transaction
with Issuer.
(c) The term "Subsequent Triggering Event" shall mean any of the
following events or transactions occurring after the date hereof:
A-4
(i) The acquisition by any person (other than Grantee or any
Grantee Subsidiary) of beneficial ownership of 20% or more of the then
outstanding Common Stock; or
(ii) The occurrence of the Initial Triggering Event described in
clause (i) of subsection (b) of this Section 2, except that the percentage
referred to in clause (z) of the second sentence thereof shall be 20%.
(d) Issuer shall notify Grantee promptly in writing of the
occurrence of any Initial Triggering Event or Subsequent Triggering Event
(together, a "Triggering Event"), it being understood that the giving of such
notice by Issuer shall not be a condition to the right of the Holder to exercise
the Option.
(e) In the event the Holder is entitled to and wishes to exercise
the Option (or any portion thereof), it shall send to Issuer a written notice
(the date of which being herein referred to as the "Notice Date") specifying (i)
the total number of shares it will purchase pursuant to such exercise and (ii) a
place and date not earlier than three business days nor later than 90 days from
the Notice Date for the closing of such purchase (the "Closing Date"); provided,
that if prior notification to or approval of the Federal Reserve Board or any
other regulatory or antitrust agency is required in connection with such
purchase, the Holder shall promptly file the required notice or application for
approval, shall promptly notify Issuer of such filing, and shall expeditiously
process the same and the period of time that otherwise would run pursuant to
this sentence shall run instead from the date on which any required notification
periods have expired or been terminated or such approvals have been obtained and
any requisite waiting period or periods shall have passed. Any exercise of the
Option shall be deemed to occur on the Notice Date relating thereto.
(f) At the closing referred to in subsection (e) of this Section 2,
the Holder shall (i) pay to Issuer the aggregate purchase price for the shares
of Common Stock purchased pursuant to the exercise of the Option in immediately
available funds by wire transfer to a bank account designated by Issuer and (ii)
present and surrender this Agreement to Issuer at its principal executive
offices, provided that the failure or refusal of the Issuer to designate such a
bank account or accept surrender of this Agreement shall not preclude the Holder
from exercising the Option.
A-5
(g) At such closing, simultaneously with the delivery of immediately
available funds as provided in subsection (f) of this Section 2, Issuer shall
deliver to the Holder a certificate or certificates representing the number of
shares of Common Stock purchased by the Holder and, if the Option should be
exercised in part only, a new Option evidencing the rights of the Holder thereof
to purchase the balance of the shares purchasable hereunder.
(h) Certificates for Common Stock delivered at a closing hereunder
may be endorsed with a restrictive legend that shall read substantially as
follows:
"The transfer of the shares represented by this certificate is
subject to certain provisions of an agreement, dated as of December 8,
1998, between the registered holder hereof and Headlands Mortgage Company
and to resale restrictions arising under the Securities Act of 1933, as
amended. A copy of such agreement is on file at the principal office of
Headlands Mortgage Company and will be provided to the holder hereof
without charge upon receipt by Headlands Mortgage Company of a written
request therefor."
It is understood and agreed that: (i) the reference to the resale restrictions
of the Securities Act of 1933, as amended (the "1933 Act") in the above legend
shall be removed by delivery of substitute certificate(s) without such reference
if the Holder shall have delivered to Issuer a copy of a letter from the staff
of the SEC, or an opinion of counsel, in form and substance reasonably
satisfactory to Issuer, to the effect that such legend is not required for
purposes of the 1933 Act; (ii) the reference to the provisions of this Agreement
in the above legend shall be removed by delivery of substitute certificate(s)
without such reference if the shares have been sold or transferred in compliance
with the provisions of this Agreement and under circumstances that do not
require the retention of such reference in the opinion of Counsel to the Holder,
in form and substance reasonably satisfactory to Issuer, and (iii) the legend
shall be removed in its entirety if the conditions in the preceding clauses (i)
and (ii) are both satisfied. In addition, such certificates shall bear any
other legend as may be required by law.
A-6
(i) Upon the giving by the Holder to Issuer of the written notice of
exercise of the Option provided for under subsection (e) of this Section 2 and
the tender of the applicable purchase price in immediately available funds on
the Closing Date, the Holder shall be deemed to be the holder of record of the
shares of Common Stock issuable upon such exercise, notwithstanding that the
stock transfer books of Issuer shall then be closed or that certificates
representing such shares of Common Stock shall not then be actually delivered to
the Holder. Issuer shall pay all expenses, and any and all United States
federal, state and local taxes and other charges that may be payable in
connection with the preparation, issue and delivery of stock certificates under
this Section 2 in the name of the Holder or its assignee, transferee or
designee.
3. Issuer agrees: (i) that it shall at all times maintain, free from
preemptive rights, sufficient authorized but unissued or treasury shares of
Common Stock so that the Option may be exercised without additional
authorization of Common Stock after giving effect to all other options,
warrants, convertible securities and other rights to purchase Common Stock; (ii)
that it will not, by charter amendment or through reorganization, consolidation,
merger, dissolution or sale of assets, or by any other voluntary act, avoid or
seek to avoid the observance or performance of any of the covenants,
stipulations or conditions to be observed or performed hereunder by Issuer;
(iii) promptly to take all action as may from time to time be required
(including (x) complying with all applicable premerger notification, reporting
and waiting period requirements specified in 15 U.S.C. Section 18a and
regulations promulgated thereunder and (y) in the event, under the Bank Holding
Company Act of 1956, as amended (the "BHCA"), or the Change in Bank Control Act
of 1978, as amended, or any state or other federal banking law, prior approval
of or notice to the Federal Reserve Board or to any state or other federal
regulatory authority is necessary before the Option may be exercised,
cooperating fully with the Holder in preparing such applications or notices and
providing such information to the Federal Reserve Board or such state or other
federal regulatory authority as they may require) in order to permit the Holder
to exercise the Option and Issuer duly and effectively to issue shares of Common
Stock pursuant hereto; and (iv) promptly to take all action provided herein to
protect the rights of the Holder against dilution.
A-7
4. This Agreement (and the Option granted hereby) are exchangeable,
without expense, at the reasonable request of the Holder, upon presentation and
surrender of this Agreement at the principal office of Issuer, for other
Agreements providing for Options of different denominations entitling the holder
thereof to purchase, on the same terms and subject to the same conditions as are
set forth herein, in the aggregate the same number of shares of Common Stock
purchasable hereunder. The terms "Agreement" and "Option" as used herein
include any Agreements and related Options for which this Agreement (and the
Option granted hereby) may be exchanged. Upon receipt by Issuer of evidence
reasonably satisfactory to it of the loss, theft, destruction or mutilation of
this Agreement, and (in the case of loss, theft or destruction) of reasonably
satisfactory indemnification, and upon surrender and cancellation of this
Agreement, if mutilated, Issuer will execute and deliver a new Agreement of like
tenor and date. Any such new Agreement executed and delivered shall constitute
an additional contractual obligation on the part of Issuer, whether or not the
Agreement so lost, stolen, destroyed or mutilated shall at any time be
enforceable by anyone.
5. In addition to the adjustment in the number of shares of Common
Stock that are purchasable upon exercise of the Option pursuant to Section 1 of
---------
this Agreement, the number of shares of Common Stock purchasable upon the
exercise of the Option and the Option Price shall be subject to adjustment from
time to time as provided in this Section 5.
---------
(a) In the event of any change in, or distributions in respect of,
the Common Stock by reason of stock dividends, split-ups, mergers,
recapitalizations, combinations, subdivisions, conversions, exchanges of shares
or the like, the type and number of shares of Common Stock purchasable upon
exercise hereof shall be appropriately adjusted and proper provision shall be
made so that, in the event that any additional shares of Common Stock are issued
or otherwise become outstanding as a result of any such change (other than
pursuant to an exercise of the Option), the number of shares of Common Stock
that remain subject to the Option shall be increased so that, after such
issuance and together with shares of Common Stock previously issued pursuant to
the exercise of the Option (as adjusted on account of any of the foregoing
changes in the Common Stock), it equals 19.9% of the number of shares of Common
Stock then issued and outstanding.
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(b) Whenever the number of shares of Common Stock purchasable upon
exercise hereof is adjusted as provided in this Section 5, the Option Price
---------
shall be adjusted by multiplying the Option Price by a fraction, the numerator
of which shall be equal to the number of shares of Common Stock purchasable
prior to the adjustment and the denominator of which shall be equal to the
number of shares of Common Stock purchasable after the adjustment.
6. Upon the occurrence of a Subsequent Triggering Event that occurs
prior to an Exercise Termination Event, Issuer shall, at the request of Grantee
delivered within twelve (12) months (or such later period as provided in Section
-------
10) of such Subsequent Triggering Event (whether on its own behalf or on behalf
--
of any subsequent holder of this Option (or part thereof) or any of the shares
of Common Stock issued pursuant hereto), promptly prepare, file and keep current
a registration statement under the 1933 Act covering any shares issued and
issuable pursuant to this Option and shall use its reasonable best efforts to
cause such registration statement to become effective and remain current in
order to permit the sale or other disposition of any shares of Common Stock
issued upon total or partial exercise of this Option ("Option Shares") in
accordance with any reasonable plan of disposition requested by Grantee. Issuer
will use its reasonable best efforts to cause such registration statement
promptly to become effective and then to remain effective for such period not in
excess of 180 days from the day such registration statement first becomes
effective or such shorter time as may be reasonably necessary to effect such
sales or other dispositions. Grantee shall have the right to demand two such
registrations. The Issuer shall bear the costs of such registrations
(including, but not limited to, Issuer's attorneys' fees, printing costs and
filing fees, except for underwriting discounts or commissions, brokers' fees and
the fees and disbursements of Grantee's counsel related thereto). The foregoing
notwithstanding, if, at the time of any request by Grantee for registration of
Option Shares as provided above, Issuer is in registration with respect to an
underwritten public offering by Issuer of shares of Common Stock, and if in the
good faith judgment of the managing underwriter or managing underwriters, or, if
none, the sole underwriter or underwriters, of such offering the offer and sale
of the Option Shares would interfere with the successful marketing of the shares
of Common Stock offered by Issuer, the number of Option Shares otherwise to be
covered in the registration statement contemplated hereby may be reduced;
provided, however, that after
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any such required reduction the number of Option Shares to be included in such
offering for the account of the Holder shall constitute at least 25% of the
total number of shares to be sold by the Holder and Issuer in the aggregate; and
provided further, however, that if such reduction occurs, then Issuer shall file
a registration statement for the balance as promptly as practicable thereafter
as to which no reduction pursuant to this Section 6 shall be permitted or occur
---------
and the Holder shall thereafter be entitled to one additional registration and
the twelve (12) month period referred to in the first sentence of this section
shall be increased to twenty-four (24) months. Each such Holder shall provide
all information reasonably requested by Issuer for inclusion in any registration
statement to be filed hereunder. If requested by any such Holder in connection
with such registration, Issuer shall become a party to any underwriting
agreement relating to the sale of such shares, but only to the extent of
obligating itself in respect of representations, warranties, indemnities and
other agreements customarily included in such underwriting agreements for
Issuer. Upon receiving any request under this Section 6 from any Holder, Issuer
---------
agrees to send a copy thereof to any other person known to Issuer to be entitled
to registration rights under this Section 6, in each case by promptly mailing
---------
the same, postage prepaid, to the address of record of the persons entitled to
receive such copies. Notwithstanding anything to the contrary contained herein,
in no event shall the number of registrations that Issuer is obligated to effect
be increased by reason of the fact that there shall be more than one Holder as a
result of any assignment or division of this Agreement.
7. (a) At any time after the occurrence of a Repurchase Event (as
defined below) (i) at the request of the Holder, delivered prior to an Exercise
Termination Event (or such later period as provided in Section 10), Issuer (or
----------
any successor thereto) shall repurchase the Option from the Holder at a price
(the "Option Repurchase Price") equal to the amount by which (A) the
market/offer price (as defined below) exceeds (B) the Option Price, multiplied
by the number of shares for which this Option may then be exercised and (ii) at
the request of the owner of Option Shares from time to time (the "Owner"),
delivered prior to an Exercise Termination Event (or such later period as
provided in Section 10), Issuer (or any successor thereto) shall repurchase such
----------
number of the Option Shares from the Owner as the Owner shall designate at a
price (the "Option Share Repurchase Price") equal to the market/offer price
multiplied by the number
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of Option Shares so designated. Anything to the contrary notwithstanding, the
Option Share Repurchase Price shall not be less than $13.93 million in the
aggregate. The term "market/offer price" shall mean the highest of (i) the price
per share of Common Stock at which a tender or exchange offer therefor has been
made, (ii) the price per share of Common Stock to be paid by any third party
pursuant to an agreement with Issuer, (iii) the highest closing price for shares
of Common Stock within the three month period immediately preceding the date the
Holder gives notice of the required repurchase of this Option or the Owner gives
notice of the required repurchase of Option Shares, as the case may be, or (iv)
in the event of a sale of all or any substantial part of Issuer's assets or
deposits, the sum of the net price paid in such sale for such assets or deposits
and the current market value of the remaining net assets of Issuer as determined
by a nationally recognized investment banking firm selected by the Holder or the
Owner, as the case may be, and reasonably acceptable to Issuer, divided by the
number of shares of Common Stock of Issuer outstanding at the time of such sale.
In determining the market/offer price, the value of consideration other than
cash shall be determined by a nationally recognized investment banking firm
selected by the Holder or Owner, as the case may be, and reasonably acceptable
to Issuer.
(b) The Holder and the Owner, as the case may be, may exercise its
right to require Issuer to repurchase the Option and any Option Shares pursuant
to this Section 7 by surrendering for such purpose to Issuer, at its principal
---------
office, a copy of this Agreement or certificates for Option Shares, as
applicable, accompanied by a written notice or notices stating that the Holder
or the Owner, as the case may be, elects to require Issuer to repurchase this
Option and/or the Option Shares in accordance with the provisions of this
Section 7. As promptly as practicable, and in any event within fifteen calendar
---------
days after the surrender of the Option and/or certificates representing Option
Shares and the receipt of such notice or notices relating thereto, Issuer shall
deliver or cause to be delivered to the Holder the Option Repurchase Price
and/or to the Owner the Option Share Repurchase Price therefor or the portion
thereof that Issuer is not then prohibited under applicable law and regulation
from so delivering.
(c) To the extent that Issuer is prohibited under applicable law or
regulation from repurchasing the Option and/or the Option Shares in full, Issuer
shall immediately so notify the
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Holder and/or the Owner and thereafter deliver or cause to be delivered, from
time to time, to the Holder and/or the Owner, as appropriate, the portion of the
Option Repurchase Price and the Option Share Repurchase Price, respectively,
that it is no longer prohibited from delivering, within fifteen calendar days
after the date on which Issuer is no longer so prohibited; provided, however,
that if Issuer at any time after delivery of a notice of repurchase pursuant to
paragraph (b) of this Section 7 is prohibited under applicable law or regulation
---------
from delivering to the Holder and/or the Owner, as appropriate, the Option
Repurchase Price and the Option Share Repurchase Price, respectively, in full
(and Issuer hereby undertakes to use its reasonable best efforts to obtain all
required regulatory and legal approvals and to file any required notices as
promptly as practicable in order to accomplish such repurchase), the Holder or
Owner may revoke its notice of repurchase of the Option and/or the Option Shares
whether in whole or to the extent of the prohibition, whereupon, in the latter
case, Issuer shall promptly (i) deliver to the Holder and/or the Owner, as
appropriate, that portion of the Option Repurchase Price and/or the Option Share
Repurchase Price that Issuer is not prohibited from delivering; and (ii)
deliver, as appropriate, either (A) to the Holder, a new Agreement evidencing
the right of the Holder to purchase that number of shares of Common Stock
obtained by multiplying the number of shares of Common Stock for which the
surrendered Agreement was exercisable at the time of delivery of the notice of
repurchase by a fraction, the numerator of which is the Option Repurchase Price
less the portion thereof theretofore delivered to the Holder and the denominator
of which is the Option Repurchase Price, and/or (B) to the Owner, a certificate
for the Option Shares it is then so prohibited from repurchasing. If an Exercise
Termination Event shall have occurred prior to the date of the notice by Issuer
described in the first sentence of this subsection (c), or shall be scheduled to
occur at any time before the expiration of a period ending on the thirtieth day
after such date, the Holder shall nonetheless have the right to exercise the
Option until the expiration of such 30-day period.
(d) For purposes of this Section 7, a "Repurchase Event" shall be
---------
deemed to have occurred upon the occurrence of any of the following events or
transactions after the date hereof:
(i) the acquisition by any person (other than Grantee or any
Grantee Subsidiary) of beneficial ownership of 50% or more of the then
outstanding Common Stock; or
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(ii) the consummation of any Acquisition Transaction described
in Section 2(b)(i) hereof, except that the percentage referred to in clause (z)
shall be 50%.
The parties agree that Issuer's obligation to repurchase the Option and/or the
Option Shares under this Section 7 shall not terminate upon the occurrence of an
Exercise Termination Event unless no Subsequent Triggering Event shall have
occurred prior to an Exercise Termination Event.
8. (a) In the event that prior to an Exercise Termination Event,
Issuer shall enter into an agreement (i) to consolidate with or merge into any
person, other than Grantee or a Grantee Subsidiary, or engage in a plan of
exchange with any person, other than Grantee or a Grantee Subsidiary and Issuer
shall not be the continuing or surviving corporation of such consolidation or
merger or the acquirer in such plan of exchange, (ii) to permit any person,
other than Grantee or a Grantee Subsidiary, to merge into Issuer or be acquired
by Issuer in a plan of exchange and Issuer shall be the continuing or surviving
or acquiring corporation, but, in connection with such merger or plan of
exchange, the then outstanding shares of Common Stock shall be changed into or
exchanged for stock or other securities of any other person or cash or any other
property or the then outstanding shares of Common Stock shall after such merger
or plan of exchange represent less than 50% of the outstanding shares and share
equivalents of the merged or acquiring company, or (iii) to sell or otherwise
transfer all or a substantial part of its or the Issuer Subsidiary's assets or
deposits to any person, other than Grantee or a Grantee Subsidiary, then, and in
each such case, the agreement governing such transaction shall make proper
provision so that the Option shall, upon the consummation of any such
transaction and upon the terms and conditions set forth herein, be converted
into, or exchanged for, an option (the "Substitute Option"), at the election of
the Holder, of either (x) the Acquiring Corporation (as hereinafter defined) or
(y) any person that controls the Acquiring Corporation.
(b) The following terms have the meanings indicated:
(i) "Acquiring Corporation" shall mean (i) the continuing or
surviving person of a consolidation or merger with Issuer (if other than
Issuer), (ii) the acquiring person in a plan of exchange in which Issuer is
acquired, (iii) the Issuer in
A-13
a merger or plan of exchange in which Issuer is the continuing or surviving or
acquiring person, and (iv) the transferee of all or a substantial part of
Issuer's assets or deposits (or the assets or deposits of the Issuer
Subsidiary).
(ii) "Substitute Common Stock" shall mean the common stock
issued by the issuer of the Substitute Option upon exercise of the Substitute
Option.
(iii) "Assigned Value" shall mean the market/offer price, as
defined in Section 7.
---------
(iv) "Average Price" shall mean the average closing price of a
share of the Substitute Common Stock for one year immediately preceding the
consolidation, merger or sale in question, but in no event higher than the
closing price of the shares of Substitute Common Stock on the day preceding such
consolidation, merger or sale; provided that if Issuer is the issuer of the
Substitute Option, the Average Price shall be computed with respect to a share
of common stock issued by the person merging into Issuer or by any company which
controls or is controlled by such person, as the Holder may elect.
(c) The Substitute Option shall have the same terms as the Option,
provided that if the terms of the Substitute Option cannot, for legal reasons,
be the same as the Option, such terms shall be as similar as possible and in no
event less advantageous to the Holder. The issuer of the Substitute Option shall
also enter into an agreement with the then Holder or Holders of the Substitute
Option in substantially the same form as this Agreement (after giving effect for
such purpose to the provisions of Section 9), which agreement shall be
---------
applicable to the Substitute Option.
(d) The Substitute Option shall be exercisable for such number of
shares of Substitute Common Stock as is equal to the Assigned Value multiplied
by the number of shares of Common Stock for which the Option was exercisable
immediately prior to the event described in the first sentence of Section 8(a),
-----------
divided by the Average Price. The exercise price of the Substitute Option per
share of Substitute Common Stock shall then be equal to the Option Price
multiplied by a fraction, the numerator of which shall be the number of shares
of Common Stock for which the Option was exercisable immediately prior to the
event described in the first sentence of Section 8(a) and the denominator of
----------
A-14
which shall be the number of shares of Substitute Common Stock for which the
Substitute Option is exercisable.
(e) In no event, pursuant to any of the foregoing paragraphs, shall
the Substitute Option be exercisable for more than 19.9% of the shares of
Substitute Common Stock outstanding prior to exercise of the Substitute Option.
In the event that the Substitute Option would be exercisable for more than 19.9%
of the shares of Substitute Common Stock outstanding prior to exercise but for
this clause (e), the issuer of the Substitute Option (the "Substitute Option
Issuer") shall make a cash payment to Holder equal to the excess of (i) the
value of the Substitute Option without giving effect to the limitation in this
clause (e) over (ii) the value of the Substitute Option after giving effect to
the limitation in this clause (e). This difference in value shall be determined
by a nationally recognized investment banking firm selected by the Holder.
(f) Issuer shall not enter into any transaction described in
subsection (a) of this Section 8 unless the Acquiring Corporation and any person
---------
that controls the Acquiring Corporation assume in writing all the obligations of
Issuer hereunder.
9. (a) At the request of the holder of the Substitute Option (the
"Substitute Option Holder"), the Substitute Option Issuer shall repurchase the
Substitute Option from the Substitute Option Holder at a price (the "Substitute
Option Repurchase Price") equal to the amount by which (i) the Highest Closing
Price (as hereinafter defined) exceeds (ii) the exercise price of the Substitute
Option, multiplied by the number of shares of Substitute Common Stock for which
the Substitute Option may then be exercised, and at the request of the owner
(the "Substitute Share Owner") of shares of Substitute Common Stock (the
"Substitute Shares"), the Substitute Option Issuer shall repurchase the
Substitute Shares at a price (the "Substitute Share Repurchase Price") equal to
the Highest Closing Price multiplied by the number of Substitute Shares so
designated. The term "Highest Closing Price" shall mean the highest closing
price for shares of Substitute Common Stock within the six-month period
immediately preceding the date the Substitute Option Holder gives notice of the
required repurchase of the Substitute Option or the Substitute Share Owner gives
notice of the required repurchase of the Substitute Shares, as applicable.
A-15
(b) The Substitute Option Holder and the Substitute Share Owner, as
the case may be, may exercise its respective rights to require the Substitute
Option Issuer to repurchase the Substitute Option and the Substitute Shares
pursuant to this Section 9 by surrendering for such purpose to the Substitute
---------
Option Issuer, at its principal office, the agreement for such Substitute Option
(or, in the absence of such an agreement, a copy of this Agreement) and/or
certificates for Substitute Shares accompanied by a written notice or notices
stating that the Substitute Option Holder or the Substitute Share Owner, as the
case may be, elects to require the Substitute Option Issuer to repurchase the
Substitute Option and/or the Substitute Shares in accordance with the provisions
of this Section 9. As promptly as practicable and in any event within five
---------
business days after the surrender of the Substitute Option and/or certificates
representing Substitute Shares and the receipt of such notice or notices
relating thereto, the Substitute Option Issuer shall deliver or cause to be
delivered to the Substitute Option Holder the Substitute Option Repurchase Price
and/or to the Substitute Share Owner the Substitute Share Repurchase Price
therefor or the portion thereof which the Substitute Option Issuer is not then
prohibited under applicable law and regulation from so delivering.
(c) To the extent that the Substitute Option Issuer is prohibited
under applicable law or regulation from repurchasing the Substitute Option
and/or the Substitute Shares in part or in full, the Substitute Option Issuer
shall immediately so notify the Substitute Option Holder and/or the Substitute
Share Owner and thereafter deliver or cause to be delivered, from time to time,
to the Substitute Option Holder and/or the Substitute Share Owner, as
appropriate, the portion of the Substitute Option Repurchase Price and/or the
Substitute Share Repurchase Price, respectively, which it is no longer
prohibited from delivering, within five (5) business days after the date on
which the Substitute Option Issuer is no longer so prohibited; provided,
however, that if the Substitute Option Issuer is at any time after delivery of a
notice of repurchase pursuant to subsection (b) of this Section 9 prohibited
---------
under applicable law or regulation from delivering to the Substitute Option
Holder and/or the Substitute Share Owner, as appropriate, the Substitute Option
Repurchase Price and the Substitute Share Repurchase Price, respectively, in
full (and the Substitute Option Issuer shall use its reasonable best efforts to
receive all required regulatory and legal approvals as promptly as practicable
in order to accomplish such repurchase), the Substitute Option Holder and/or
A-16
Substitute Share Owner may revoke its notice of repurchase of the Substitute
Option or the Substitute Shares either in whole or to the extent of prohibition,
whereupon, in the latter case, the Substitute Option Issuer shall promptly (i)
deliver to the Substitute Option Holder or Substitute Share Owner, as
appropriate, that portion of the Substitute Option Repurchase Price or the
Substitute Share Repurchase Price that the Substitute Option Issuer is not
prohibited from delivering; and (ii) deliver, as appropriate, either (A) to the
Substitute Option Holder, a new Substitute Option evidencing the right of the
Substitute Option Holder to purchase that number of shares of the Substitute
Common Stock obtained by multiplying the number of shares of the Substitute
Common Stock for which the surrendered Substitute Option was exercisable at the
time of delivery of the notice of repurchase by a fraction, the numerator of
which is the Substitute Option Repurchase Price less the portion thereof
theretofore delivered to the Substitute Option Holder and the denominator of
which is the Substitute Option Repurchase Price, and/or (B) to the Substitute
Share Owner, a certificate for the Substitute Option Shares it is then so
prohibited from repurchasing. If an Exercise Termination Event shall have
occurred prior to the date of the notice by the Substitute Option Issuer
described in the first sentence of this subsection (c), or shall be scheduled to
occur at any time before the expiration of a period ending on the thirtieth day
after such date, the Substitute Option Holder shall nevertheless have the right
to exercise the Substitute Option until the expiration of such 30-day period.
10. The 30-day, 6-month, 12-month, 18-month or 24-month periods for
exercise of certain rights under Sections 2, 6, 7, 9, 12 and 14 shall be
------------------------------
extended: (i) to the extent necessary to obtain all regulatory approvals for the
exercise of such rights (for so long as the Holder, Owner, Substitute Option
Holder or Substitute Share Owner, as the case may be, is using commercially
reasonable efforts to obtain such regulatory approvals), and for the expiration
of all statutory waiting periods; (ii) during the pendency of any temporary
restraining order, injunction or other legal bar to exercise of such rights; and
(iii) to the extent necessary to avoid liability under Section 16(b) of the 1934
Act by reason of such exercise.
11. Issuer hereby represents and warrants to Grantee as follows:
A-17
(a) Issuer has full corporate power and authority to execute and
deliver this Agreement and to consummate the transactions contemplated hereby.
The execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby have been duly and validly authorized by the
Issuer Board prior to the date hereof and no other corporate proceedings on the
part of Issuer are necessary to authorize this Agreement or to consummate the
transactions so contemplated. This Agreement has been duly and validly executed
and delivered by Issuer.
(b) Issuer has taken all necessary corporate action to authorize and
reserve and to permit it to issue, and at all times from the date hereof through
the termination of this Agreement in accordance with its terms will have
reserved for issuance upon the exercise of the Option, that number of shares of
Common Stock equal to the maximum number of shares of Common Stock at any time
and from time to time issuable hereunder, and all such shares, upon issuance
pursuant thereto, will be duly authorized, validly issued, fully paid,
nonassessable, and will be delivered free and clear of all claims, liens,
encumbrance and security interests and not subject to any preemptive rights.
12. Grantee hereby represents and warrants to Issuer as follows:
(a) Grantee has all requisite corporate power and authority to enter
into this Agreement and, subject to any approvals or consents to herein, to
consummate the transactions contemplated hereby. The execution and delivery of
this Agreement and the consummation of the transactions contemplated hereby have
been duly authorized by all necessary corporate action on the part of Grantee.
This Agreement has been duly executed and delivered by Grantee.
(b) The Option is not being, and any shares of Common Stock or other
securities acquired by Grantee upon exercise of the Option will not be, acquired
with a view to the public distribution thereof and will not be transferred or
otherwise disposed of except in a transaction registered or exempt from
registration under the 1933 Act.
13. Neither of the parties hereto may assign any of its rights or
obligations under this Agreement or the Option created hereunder to any other
person, without the express written
A-18
consent of the other party, except that in the event an Initial Triggering Event
shall have occurred prior to an Exercise Termination Event, Grantee, subject to
the express provisions hereof, may assign in whole or in part its rights and
obligations hereunder; provided, however, that until the date that is five days
following the date on which the Federal Reserve Board has approved an
application by Grantee to acquire the shares of Common Stock subject to the
Option, Grantee may not assign its rights under the Option except in (i) a
widely dispersed public distribution, (ii) a private placement in which no one
party acquires the right to purchase in excess of 2% of the voting shares of
Issuer, (iii) an assignment to a single party (e.g., a broker or investment
banker) for the purpose of conducting a widely dispersed public distribution on
Grantee's behalf or (iv) any other manner approved by the Federal Reserve Board.
14. Each of Grantee and Issuer will use its reasonable best efforts to
make all filings with, and to obtain consents of, all third parties and
governmental authorities necessary to the consummation of the transactions
contemplated by this Agreement, including, without limitation, applying to the
Federal Reserve Board under the BHCA for approval to acquire the shares issuable
hereunder, but Grantee shall not be obligated to apply to state banking
authorities for approval to acquire the shares of Common Stock issuable
hereunder until such time, if ever, as it deems appropriate to do so.
15. (a) Grantee may, at any time following a Repurchase Event and prior
to the occurrence of an Exercise Termination Event (or such later period as
provided in Section 10), relinquish the Option (together with any Option Shares
----------
issued to and then owned by Grantee) to Issuer in exchange for a cash fee equal
to the Surrender Price (as hereinafter defined); provided, however, that Grantee
may not exercise its rights pursuant to this Section 14 if Issuer has
----------
repurchased the Option (or any portion thereof) or any Option Shares pursuant to
Section 7. The "Surrender Price" shall be equal to $13.93 million (i) plus, if
---------
applicable, Grantee's purchase price with respect to any Option Shares and (ii)
minus, if applicable, the excess of (B) the net cash amounts, if any, received
by Grantee pursuant to the arms' length sale of Option Shares (or any other
securities into which such Option Shares were converted or exchanged) to any
unaffiliated party, over (B) Grantee's purchase price of such Option Shares.
A-19
(b) Grantee may exercise its right to relinquish the Option and any
Option Shares pursuant to this Section 15 by surrendering to Issuer, at its
principal office, a copy of this Agreement together with certificates for Option
Shares, if any, accompanied by a written notice stating (i) that Grantee elects
to relinquish the Option and Option Shares, if any, in accordance with the
provisions of this Section 15 and (ii) the Surrender Price. The Surrender Price
----------
shall be payable in immediately available funds on or before the second business
day following receipt of such notice by Issuer.
(c) To the extent that Issuer is prohibited under applicable law or
regulation from paying the Surrender Price to Grantee in full, Issuer shall
immediately so notify Grantee and thereafter deliver or cause to be delivered,
from time to time, to Grantee, the portion of the Surrender Price that it is no
longer prohibited from paying, within five business days after the date on which
Issuer is no longer so prohibited; provided, however, that if Issuer at any time
after delivery of a notice of surrender pursuant to paragraph (b) of this
Section 15 is prohibited under applicable law or regulation from paying to
----------
Grantee the Surrender Price in full, (i) Issuer shall (A) use its reasonable
best efforts to obtain all required regulatory and legal approvals and to file
any required notices as promptly as practicable in order to make such payments,
(B) within five days of the submission or receipt of any documents relating to
any such regulatory and legal approvals, provide Grantee with copies of the
same, and (c) keep Grantee advised of both the status of any such request for
regulatory and legal approvals, as well as any discussions with any relevant
regulatory or other third party reasonably related to the same and (ii) Grantee
may revoke such notice of surrender by delivery of a notice of revocation to
Issuer and, upon delivery of such notice of revocation, the Exercise Termination
Date shall be extended to a date six months from the date on which the Exercise
Termination Date would have occurred if not for the provisions of this Section
-------
15(c) (during which period Grantee may exercise any of its rights hereunder,
----
including any and all rights pursuant to this Section 15).
----------
16. The parties hereto acknowledge that damages would be an inadequate
remedy for a breach of this Agreement by either party hereto and that the
obligations of the parties hereto shall be enforceable by either party hereto
through injunctive or other equitable relief. In connection therewith both
parties waive the posting of any bond or similar requirement.
A-20
17. If any term, provision, covenant or restriction contained in this
Agreement is held by a court or a federal or state regulatory agency of
competent jurisdiction to be invalid, void or unenforceable, the remainder of
the terms, provisions and covenants and restrictions contained in this Agreement
shall remain in full force and effect, and shall in no way be affected, impaired
or invalidated. If for any reason such court or regulatory agency determines
that the Holder is not permitted to acquire, or Issuer is not permitted to
repurchase pursuant to Section 7, the full number of shares of Common Stock
---------
provided in Section l(a) hereof (as adjusted pursuant to Section l(b) or Section
------------ ------------ -------
5 hereof), it is the express intention of Issuer to allow the Holder to acquire
-
or to require Issuer to repurchase such lesser number of shares as may be
permissible, without any amendment or modification hereof.
18. All notices, requests, claims, demands and other communications
hereunder shall be deemed to have been duly given when delivered in person, by
fax, telecopy, or by registered or certified mail (postage prepaid, return
receipt requested) at the respective addresses of the parties set forth in the
Merger Agreement.
19. This Agreement shall be governed by and construed in accordance
with the laws of the State of Delaware, without regard to the conflict of law
principles thereof (except to the extent that mandatory provisions of Federal
law or of the CGCL are applicable).
20. This Agreement may be executed in two or more counterparts, each of
which shall be deemed to be an original, but all of which shall constitute one
and the same agreement.
21. Except as otherwise expressly provided herein, each of the parties
hereto shall bear and pay all costs and expenses incurred by it or on its behalf
in connection with the transactions contemplated hereunder, including fees and
expenses of its own financial consultants, investment bankers, accountants and
counsel.
22. Except as otherwise expressly provided herein or in the Merger
Agreement, this Agreement contains the entire agreement between the parties with
respect to the transactions contemplated hereunder and supersedes all prior
arrangements or understandings with respect thereof, written or oral. The terms
and conditions
A-21
of this Agreement shall inure to the benefit of and be binding upon the parties
hereto and their respective successors and permitted assignees. Nothing in this
Agreement, expressed or implied, is intended to confer upon any party, other
than the parties hereto, and their respective successors except as assignees,
any rights, remedies, obligations or liabilities under or by reason of this
Agreement, except as expressly provided herein.
23. Capitalized terms used in this Agreement and not defined herein
shall have the meanings assigned thereto in the Merger Agreement.
A-22
IN WITNESS WHEREOF, each of the parties has caused this Agreement
to be executed on its behalf by its officers thereunto duly authorized, all as
of the date first above written.
HEADLANDS MORTGAGE COMPANY
By: _____________________ _____________________________________________
Name:
Title:
GREENPOINT FINANCIAL CORP.
By: _____________________ ______________________________________________
Name:
Title:
A-23
Exhibit B
---------
SUPPORT AGREEMENT FOR XXXXX X. XXXX
December 8, 1998
GreenPoint Financial Corp.
00 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
I understand that GreenPoint Financial Corp., a Delaware corporation
("GreenPoint"), GF Acquisition Corp., a Delaware corporation and a wholly-owned
subsidiary of GreenPoint ("Merger Sub"), and Headlands Mortgage Company, a
California corporation ("Headlands"), are entering into an Agreement and Plan of
Merger dated as of the date hereof (the "Plan"), pursuant to which Merger Sub
will merge with and into Headlands (with Headlands thereafter becoming a wholly-
owned subsidiary of GreenPoint) and all of the outstanding shares of common
stock, without par value, of Headlands will be exchanged for shares of common
stock, par value $0.01 per share, of GreenPoint. I also understand that
GreenPoint and Headlands are entering into a Stock Option Agreement, also dated
as of the date hereof (the "Stock Option Agreement"), pursuant to which
Headlands has granted to GreenPoint an option to purchase, under certain
circumstances, shares of Headlands common stock at a price and in an amount
provided in such agreement. All capitalized terms used in this letter agreement
but not defined in this letter agreement shall have the meanings given such
terms in the Plan.
I am a stockholder of Headlands and am entering into this letter
agreement to induce you to enter into the Plan and to consummate the
transactions contemplated thereby.
I confirm my agreement with you as follows:
1. I represent, warrant and agree that Schedule I annexed hereto
sets forth all of the shares of capital stock of Headlands of which I am the
record or beneficial owner or over which I exercise any direct or indirect
dispositive or voting
B-1
control (together with any shares of capital stock of Headlands acquired by, or
over which any direct or indirect dispositive or voting control is acquired by,
I after the date hereof and prior to the Effective Time (whether upon the
exercise of options, conversion of convertible securities or otherwise), the
"Shares") and that I am, on the date hereof, the lawful owner of the number of
Shares set forth in Schedule I, free and clear of all Liens (including, without
limitation, voting agreements and commitments of any kind), except as disclosed
in Schedule I. I do not own or hold, of record or beneficially, any Rights to
acquire any additional shares of the capital stock of Headlands (by exercise of
stock options or otherwise) or any interest therein or any voting rights with
respect to any additional shares of such capital stock, except as disclosed on
Schedule I. I agree that while this letter agreement is in effect, I will
promptly notify GreenPoint of the number of all Shares and Rights acquired after
the date hereof, if any. As used in this Agreement, "Rights" means any option,
warrant, convertible or exchangeable security, right, subscription, call,
unsatisfied pre-emptive right or other agreement or right of any kind to
purchase or otherwise acquire (including, without limitation, by exchange or
conversion) any shares of Headlands's capital stock.
1A. I agree that (i) I have the power and authority to vote all of
the shares of Headlands Common Stock subject to the Voting Trust Agreement For
the Stock of Headlands Mortgage Company, Marin Conveyancing Corporation,
Headlands Insurance Agency, Inc., dated as of September 15, 1997, as amended by
the First Amendment thereto, dated as of October 17, 1997, by and among
Headlands Mortgage Company, Marin Conveyancing Corporation, Headlands Insurance
Agency, Inc., Xxxxx X. Xxxx (as voting trustee), and the beneficiaries of such
voting trust agreement (the "Voting Trust Agreement"), as the Voting Trustee (as
defined in the Voting Trust Agreement), (ii) performance of my obligations under
this letter agreement will not require any consent or vote by the Beneficiaries
(as defined in the Voting Trust Agreement), and (iii) performance of my
obligations under this letter agreement will not result in a breach or default
under the Voting Trust Agreement.
1B. I agree to take all such actions as may be necessary to terminate
the Founders Registration Rights Agreement, dated as of December __, 1997, by
and among Headlands and certain stockholders of Headlands, prior to the
Effective Date.
B-2
2. I agree that I will not, and will not permit any Person
controlled by me to, contract to sell, sell or otherwise transfer or dispose of
any of the Shares, any interest in any of the Shares or any Rights or voting
rights with respect to the Shares, unless such transfer or disposition would not
adversely affect the ability of the Merger to be accounted for as a "pooling of
interests" under generally accepted accounting principles.
3. I agree that, so long as this letter agreement is in effect, at
any meeting of the stockholders of Headlands, I will vote the Shares in favor of
the Plan, the Stock Option Agreement and transactions contemplated by such
agreements. I hereby revoke any other proxy previously granted by me with
respect to the Shares and waive any rights of appraisal or rights to dissent
from the Merger that I may otherwise have.
5. I agree to, and will cause any Person controlled by me to,
cooperate fully with you in connection with the Plan and the transactions
contemplated thereby. I agree that I will not, and will not permit any such
Person to, directly or indirectly (including through its officers, directors,
employees or other representatives), solicit, encourage or facilitate inquiries
or proposals, or enter into any definitive agreement, with respect to, or
initiate or participate in any negotiations or discussions with any third party
concerning, any proposal related to an Acquisition Transaction or furnish any
information regarding Headlands or its subsidiaries to any such third party, or
take any action that would cause Headlands to be in breach of the Plan or that
would otherwise interfere with, delay or discourage the Merger and the
transactions contemplated in connection therewith.
6. Nothing herein shall be construed to require me, or any Person
controlled by me, to take any action or fail to take any action in violation of
any applicable law.
7. I represent, warrant and agree that (i) I have all necessary
power and authority to enter into this letter agreement, (ii) this letter
agreement is a legal, valid and binding agreement with respect to me, and (iii)
this letter agreement is enforceable against me in accordance with its terms.
8. I recognize and acknowledge that a breach by me of any covenants
or agreements contained in this letter agreement will cause GreenPoint and
Merger Sub to sustain damages for which
B-3
they would not have an adequate remedy at law for money damages, and therefore I
agree that in the event of any breach of my covenants and agreements under this
letter agreement, each of GreenPoint and Merger Sub will be entitled to specific
performance of such covenants and agreements and to injunctive and other
equitable relief in addition to any other remedy to which it may be entitled at
law or in equity.
9. This letter agreement may be terminated at the option of any
party hereto at any time after the earlier of (i) the Effective Time or (ii)
termination of the Plan pursuant to its terms.
10. This letter agreement will be governed by and construed in
accordance with the laws of the State of Delaware without giving effect to the
conflicts of laws principles that would otherwise apply thereunder.
[rest of page intentionally left blank]
B-4
Please confirm that the foregoing correctly states the understanding
between us by signing and returning to us a counterpart hereof.
Very truly yours,
By: ______________________________
Xxxxx X. Xxxx
Confirmed and agreed to on
the date first above written.
GREENPOINT FINANCIAL CORP.
By: ______________________________
Name:
Title:
GF ACQUISITION CORP.
By: ______________________________
Title: ______________________________
B-5
Exhibit B
---------
SUPPORT AGREEMENT FOR XXXXXXX X. XXXXXXXXXX
December 8, 1998
GreenPoint Financial Corp.
00 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
I understand that GreenPoint Financial Corp., a Delaware corporation
("GreenPoint"), GF Acquisition Corp., a Delaware corporation and a wholly-owned
subsidiary of GreenPoint ("Merger Sub"), and Headlands Mortgage Company, a
California corporation ("Headlands"), are entering into an Agreement and Plan of
Merger dated as of the date hereof (the "Plan"), pursuant to which Merger Sub
will merge with and into Headlands (with Headlands thereafter becoming a wholly-
owned subsidiary of GreenPoint) and all of the outstanding shares of common
stock, without par value, of Headlands will be exchanged for shares of common
stock, par value $0.01 per share, of GreenPoint. I also understand that
GreenPoint and Headlands are entering into a Stock Option Agreement, also dated
as of the date hereof (the "Stock Option Agreement"), pursuant to which
Headlands has granted to GreenPoint an option to purchase, under certain
circumstances, shares of Headlands common stock at a price and in an amount
provided in such agreement. All capitalized terms used in this letter agreement
but not defined in this letter agreement shall have the meanings given such
terms in the Plan.
I am a stockholder of Headlands and am entering into this letter
agreement to induce you to enter into the Plan and to consummate the
transactions contemplated thereby.
I confirm my agreement with you as follows:
1. I represent, warrant and agree that Schedule I annexed hereto
sets forth all of the shares of capital stock of Headlands of which I am the
record or beneficial owner or over which I exercise any direct or indirect
dispositive or voting
B-1
control (together with any shares of capital stock of Headlands acquired by, or
over which any direct or indirect dispositive or voting control is acquired by,
I after the date hereof and prior to the Effective Time (whether upon the
exercise of options, conversion of convertible securities or otherwise), the
"Shares") and that I am, on the date hereof, the lawful owner of the number of
Shares set forth in Schedule I, free and clear of all Liens (including, without
limitation, voting agreements and commitments of any kind), except as disclosed
in Schedule I. I do not own or hold, of record or beneficially, any Rights to
acquire any additional shares of the capital stock of Headlands (by exercise of
stock options or otherwise) or any interest therein or any voting rights with
respect to any additional shares of such capital stock, except as disclosed on
Schedule I. I agree that while this letter agreement is in effect, I will
promptly notify GreenPoint of the number of all Shares and Rights acquired after
the date hereof, if any. As used in this Agreement, "Rights" means any option,
warrant, convertible or exchangeable security, right, subscription, call,
unsatisfied pre-emptive right or other agreement or right of any kind to
purchase or otherwise acquire (including, without limitation, by exchange or
conversion) any shares of Headlands's capital stock.
2. I agree that I will not, and will not permit any Person
controlled by me to, contract to sell, sell or otherwise transfer or dispose of
any of the Shares, any interest in any of the Shares or any Rights or voting
rights with respect to the Shares, unless such transfer or disposition would not
adversely affect the ability of the Merger to be accounted for as a "pooling of
interests" under generally accepted accounting principles.
3. I agree that, so long as this letter agreement is in effect, at
any meeting of the stockholders of Headlands, I will vote the Shares in favor of
the Plan, the Stock Option Agreement and transactions contemplated by such
agreements. I hereby revoke any other proxy previously granted by me with
respect to the Shares and waive any rights of appraisal or rights to dissent
from the Merger that I may otherwise have.
5. I agree to, and will cause any Person controlled by me to,
cooperate fully with you in connection with the Plan and the transactions
contemplated thereby. I agree that I will not, and will not permit any such
Person to, directly or indirectly (including through its officers, directors,
employees or other representatives), solicit, encourage or facilitate inquiries
or
B-2
proposals, or enter into any definitive agreement, with respect to, or initiate
or participate in any negotiations or discussions with any third party
concerning, any proposal related to an Acquisition Transaction or furnish any
information regarding Headlands or its subsidiaries to any such third party, or
take any action that would cause Headlands to be in breach of the Plan or that
would otherwise interfere with, delay or discourage the Merger and the
transactions contemplated in connection therewith.
6. Nothing herein shall be construed to require me, or any Person
controlled by me, to take any action or fail to take any action in violation of
any applicable law.
7. I represent, warrant and agree that (i) I have all necessary
power and authority to enter into this letter agreement, (ii) this letter
agreement is a legal, valid and binding agreement with respect to me, and (iii)
this letter agreement is enforceable against me in accordance with its terms.
8. I recognize and acknowledge that a breach by me of any covenants
or agreements contained in this letter agreement will cause GreenPoint and
Merger Sub to sustain damages for which they would not have an adequate remedy
at law for money damages, and therefore I agree that in the event of any breach
of my covenants and agreements under this letter agreement, each of GreenPoint
and Merger Sub will be entitled to specific performance of such covenants and
agreements and to injunctive and other equitable relief in addition to any other
remedy to which it may be entitled at law or in equity.
9. This letter agreement may be terminated at the option of any
party hereto at any time after the earlier of (i) the Effective Time or (ii)
termination of the Plan pursuant to its terms.
10. This letter agreement will be governed by and construed in
accordance with the laws of the State of Delaware without giving effect to the
conflicts of laws principles that would otherwise apply thereunder.
[rest of page intentionally left blank]
B-3
Please confirm that the foregoing correctly states the understanding
between us by signing and returning to us a counterpart hereof.
Very truly yours,
By: _____________________
Xxxxxxx X. XxxXxxxxxx
Confirmed and agreed to on
the date first above written.
GREENPOINT FINANCIAL CORP.
By: _____________________
Name:
Title:
GF ACQUISITION CORP.
By: _____________________
Title: _____________________
B-4
Exhibit B
---------
SUPPORT AGREEMENT FOR XXXXX X. XXXXXXX
December 8, 1998
GreenPoint Financial Corp.
00 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
I understand that GreenPoint Financial Corp., a Delaware corporation
("GreenPoint"), GF Acquisition Corp., a Delaware corporation and a wholly-owned
subsidiary of GreenPoint ("Merger Sub"), and Headlands Mortgage Company, a
California corporation ("Headlands"), are entering into an Agreement and Plan of
Merger dated as of the date hereof (the "Plan"), pursuant to which Merger Sub
will merge with and into Headlands (with Headlands thereafter becoming a wholly-
owned subsidiary of GreenPoint) and all of the outstanding shares of common
stock, without par value, of Headlands will be exchanged for shares of common
stock, par value $0.01 per share, of GreenPoint. I also understand that
GreenPoint and Headlands are entering into a Stock Option Agreement, also dated
as of the date hereof (the "Stock Option Agreement"), pursuant to which
Headlands has granted to GreenPoint an option to purchase, under certain
circumstances, shares of Headlands common stock at a price and in an amount
provided in such agreement. All capitalized terms used in this letter agreement
but not defined in this letter agreement shall have the meanings given such
terms in the Plan.
I am a stockholder of Headlands and am entering into this letter
agreement to induce you to enter into the Plan and to consummate the
transactions contemplated thereby.
I confirm my agreement with you as follows:
1. I represent, warrant and agree that Schedule I annexed hereto
sets forth all of the shares of capital stock of Headlands of which I am the
record or beneficial owner or over which I exercise any direct or indirect
dispositive or
B-1
voting control (together with any shares of capital stock of Headlands acquired
by, or over which any direct or indirect dispositive or voting control is
acquired by, I after the date hereof and prior to the Effective Time (whether
upon the exercise of options, conversion of convertible securities or
otherwise), the "Shares")and that I am, on the date hereof, the lawful owner of
the number of Shares set forth in Schedule I, free and clear of all Liens
(including, without limitation, voting agreements and commitments of any kind),
except as disclosed in Schedule I. I do not own or hold, of record or
beneficially, any Rights to acquire any additional shares of the capital stock
of Headlands (by exercise of stock options or otherwise) or any interest therein
or any voting rights with respect to any additional shares of such capital
stock, except as disclosed on Schedule I. I agree that while this letter
agreement is in effect, I will promptly notify GreenPoint of the number of all
Shares and Rights acquired after the date hereof, if any. As used in this
Agreement, "Rights" means any option, warrant, convertible or exchangeable
security, right, subscription, call, unsatisfied pre-emptive right or other
agreement or right of any kind to purchase or otherwise acquire (including,
without limitation, by exchange or conversion) any shares of Headlands's capital
stock.
2. I agree that I will not, and will not permit any Person
controlled by me to, contract to sell, sell or otherwise transfer or dispose of
any of the Shares, any interest in any of the Shares or any Rights or voting
rights with respect to the Shares, unless such transfer or disposition would not
adversely affect the ability of the Merger to be accounted for as a "pooling of
interests" under generally accepted accounting principles.
3. I agree that, so long as this letter agreement is in effect, at
any meeting of the stockholders of Headlands, I will vote the Shares in favor of
the Plan, the Stock Option Agreement and transactions contemplated by such
agreements. I hereby revoke any other proxy previously granted by me with
respect to the Shares and waive any rights of appraisal or rights to dissent
from the Merger that I may otherwise have.
5. I agree to, and will cause any Person controlled by me to,
cooperate fully with you in connection with the Plan and the transactions
contemplated thereby. I agree that I will not, and will not permit any such
Person to, directly or indirectly (including through its officers, directors,
employees or other
B-2
representatives), solicit, encourage or facilitate inquiries or proposals, or
enter into any definitive agreement, with respect to, or initiate or participate
in any negotiations or discussions with any third party concerning, any proposal
related to an Acquisition Transaction or furnish any information regarding
Headlands or its subsidiaries to any such third party, or take any action that
would cause Headlands to be in breach of the Plan or that would otherwise
interfere with, delay or discourage the Merger and the transactions contemplated
in connection therewith.
6. Nothing herein shall be construed to require me, or any Person
controlled by me, to take any action or fail to take any action in violation of
any applicable law.
7. I represent, warrant and agree that (i) I have all necessary
power and authority to enter into this letter agreement, (ii) this letter
agreement is a legal, valid and binding agreement with respect to me, and (iii)
this letter agreement is enforceable against me in accordance with its terms.
8. I recognize and acknowledge that a breach by me of any covenants
or agreements contained in this letter agreement will cause GreenPoint and
Merger Sub to sustain damages for which they would not have an adequate remedy
at law for money damages, and therefore I agree that in the event of any breach
of my covenants and agreements under this letter agreement, each of GreenPoint
and Merger Sub will be entitled to specific performance of such covenants and
agreements and to injunctive and other equitable relief in addition to any other
remedy to which it may be entitled at law or in equity.
9. This letter agreement may be terminated at the option of any
party hereto at any time after the earlier of (i) the Effective Time or (ii)
termination of the Plan pursuant to its terms.
10. This letter agreement will be governed by and construed in
accordance with the laws of the State of Delaware without giving effect to the
conflicts of laws principles that would otherwise apply thereunder.
[rest of page intentionally left blank]
B-3
Please confirm that the foregoing correctly states the understanding
between us by signing and returning to us a counterpart hereof.
Very truly yours,
By: _____________________
Xxxxx X. Xxxxxxx
Confirmed and agreed to on
the date first above written.
GREENPOINT FINANCIAL CORP.
By: _____________________
Name:
Title:
GF ACQUISITION CORP.
By: _____________________
Title: _____________________
B-4
Exhibit B
---------
SUPPORT AGREEMENT FOR XXXXXX X. XXXXX
December 8, 1998
GreenPoint Financial Corp.
00 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
I understand that GreenPoint Financial Corp., a Delaware corporation
("GreenPoint"), GF Acquisition Corp., a Delaware corporation and a wholly-owned
subsidiary of GreenPoint ("Merger Sub"), and Headlands Mortgage Company, a
California corporation ("Headlands"), are entering into an Agreement and Plan of
Merger dated as of the date hereof (the "Plan"), pursuant to which Merger Sub
will merge with and into Headlands (with Headlands thereafter becoming a wholly-
owned subsidiary of GreenPoint) and all of the outstanding shares of common
stock, without par value, of Headlands will be exchanged for shares of common
stock, par value $0.01 per share, of GreenPoint. I also understand that
GreenPoint and Headlands are entering into a Stock Option Agreement, also dated
as of the date hereof (the "Stock Option Agreement"), pursuant to which
Headlands has granted to GreenPoint an option to purchase, under certain
circumstances, shares of Headlands common stock at a price and in an amount
provided in such agreement. All capitalized terms used in this letter agreement
but not defined in this letter agreement shall have the meanings given such
terms in the Plan.
I am a stockholder of Headlands and am entering into this letter
agreement to induce you to enter into the Plan and to consummate the
transactions contemplated thereby.
I confirm my agreement with you as follows:
1. I represent, warrant and agree that Schedule I annexed hereto
sets forth all of the shares of capital stock of Headlands of which I am the
record or beneficial owner or over which I exercise any direct or indirect
dispositive or voting
B-1
control (together with any shares of capital stock of Headlands acquired by, or
over which any direct or indirect dispositive or voting control is acquired by,
I after the date hereof and prior to the Effective Time (whether upon the
exercise of options, conversion of convertible securities or otherwise), the
"Shares") and that I am, on the date hereof, the lawful owner of the number of
Shares set forth in Schedule I, free and clear of all Liens (including, without
limitation, voting agreements and commitments of any kind), except as disclosed
in Schedule I. I do not own or hold, of record or beneficially, any Rights to
acquire any additional shares of the capital stock of Headlands (by exercise of
stock options or otherwise) or any interest therein or any voting rights with
respect to any additional shares of such capital stock, except as disclosed on
Schedule I. I agree that while this letter agreement is in effect, I will
promptly notify GreenPoint of the number of all Shares and Rights acquired after
the date hereof, if any. As used in this Agreement, "Rights" means any option,
warrant, convertible or exchangeable security, right, subscription, call,
unsatisfied pre-emptive right or other agreement or right of any kind to
purchase or otherwise acquire (including, without limitation, by exchange or
conversion) any shares of Headlands's capital stock.
2. I agree that I will not, and will not permit any Person
controlled by me to, contract to sell, sell or otherwise transfer or dispose of
any of the Shares, any interest in any of the Shares or any Rights or voting
rights with respect to the Shares, unless such transfer or disposition would not
adversely affect the ability of the Merger to be accounted for as a "pooling of
interests" under generally accepted accounting principles.
3. I agree that, so long as this letter agreement is in effect, at
any meeting of the stockholders of Headlands, I will vote the Shares in favor of
the Plan, the Stock Option Agreement and transactions contemplated by such
agreements. I hereby revoke any other proxy previously granted by me with
respect to the Shares and waive any rights of appraisal or rights to dissent
from the Merger that I may otherwise have.
5. I agree to, and will cause any Person controlled by me to,
cooperate fully with you in connection with the Plan and the transactions
contemplated thereby. I agree that I will not, and will not permit any such
Person to, directly or indirectly (including through its officers, directors,
employees or other representatives), solicit, encourage or facilitate inquiries
or
B-2
proposals, or enter into any definitive agreement, with respect to, or initiate
or participate in any negotiations or discussions with any third party
concerning, any proposal related to an Acquisition Transaction or furnish any
information regarding Headlands or its subsidiaries to any such third party, or
take any action that would cause Headlands to be in breach of the Plan or that
would otherwise interfere with, delay or discourage the Merger and the
transactions contemplated in connection therewith.
6. Nothing herein shall be construed to require me, or any Person
controlled by me, to take any action or fail to take any action in violation of
any applicable law.
7. I represent, warrant and agree that (i) I have all necessary
power and authority to enter into this letter agreement, (ii) this letter
agreement is a legal, valid and binding agreement with respect to me, and (iii)
this letter agreement is enforceable against me in accordance with its terms.
8. I recognize and acknowledge that a breach by me of any covenants
or agreements contained in this letter agreement will cause GreenPoint and
Merger Sub to sustain damages for which they would not have an adequate remedy
at law for money damages, and therefore I agree that in the event of any breach
of my covenants and agreements under this letter agreement, each of GreenPoint
and Merger Sub will be entitled to specific performance of such covenants and
agreements and to injunctive and other equitable relief in addition to any other
remedy to which it may be entitled at law or in equity.
9. This letter agreement may be terminated at the option of any
party hereto at any time after the earlier of (i) the Effective Time or (ii)
termination of the Plan pursuant to its terms.
10. This letter agreement will be governed by and construed in
accordance with the laws of the State of Delaware without giving effect to the
conflicts of laws principles that would otherwise apply thereunder.
[rest of page intentionally left blank]
B-3
Please confirm that the foregoing correctly states the understanding
between us by signing and returning to us a counterpart hereof.
Very truly yours,
By: _____________________
Xxxxxx X. Xxxxx
Confirmed and agreed to on
the date first above written.
GREENPOINT FINANCIAL CORP.
By: _____________________
Name:
Title:
GF ACQUISITION CORP.
By: _____________________
Title: _____________________
B-4
Exhibit C
---------
FORM OF AFFILIATE LETTER
------------------------
_____________, 1998
GreenPoint Financial Corp.
00 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Gentlemen:
Pursuant to the terms of the Agreement and Plan of Merger, dated as of the
8th day of December, 1998 (the "Plan"), by and among Headlands Mortgage Company
("Headlands"), GreenPoint Financial Corp. ("GreenPoint") and GF Acquisition
Corp. ("Merger Sub"), Headlands plans to merge with Merger Sub, with Headlands
continuing as the surviving corporation and becoming a wholly-owned subsidiary
of GreenPoint (the "Merger"). As a result of the Merger, I may receive shares
of GreenPoint common stock, par value $0.01 per share ("GreenPoint Stock"), in
exchange for shares of Headlands common stock, without par value ("Headlands
Stock").
I hereby represent, warrant and covenant with and to GreenPoint that in the
event I receive any GreenPoint Stock as a result of the Merger:
(A) I will not sell, transfer or otherwise dispose of such GreenPoint
Stock unless (i) such sale, transfer or other disposition has been
registered under the Securities Act of 1933, as amended (the "Act"), (ii)
such sale, transfer or other disposition is made in conformity with the
provisions of Rule 145 under the Act (as such rule may hereafter from time
to time be amended), or (iii) in the opinion of counsel in form and
substance satisfactory to GreenPoint, or under a "no-action" letter
obtained by me from the staff of the Securities and Exchange Commission
(the "SEC"), such sale, transfer or other disposition will not violate or
is otherwise exempt from registration under the Act.
C-1
(B) I understand that GreenPoint is under no obligation to register
the sale, transfer or other disposition of shares of GreenPoint Stock by me
or on my behalf under the Act or to take any other action necessary in
order to make compliance with an exemption from such registration
available.
(C) I also understand that stop transfer instructions will be given to
GreenPoint's transfer agent with respect to the shares of GreenPoint Stock
issued to me as a result of the Merger and that there will be placed on the
certificates for such shares, or any substitutions therefor, a legend
stating in substance:
"The shares represented by this certificate were issued in a
transaction to which Rule 145(d) under the Securities Act of 1933
applies. The shares represented by this certificate may only be
transferred in accordance with the terms of a letter agreement between
the registered holder hereof and GreenPoint, a copy of which agreement
is on file at the principal offices of GreenPoint."
(D) I also understand that, unless the transfer by me of the
GreenPoint Stock issued to me as a result of the Merger have been
registered under the Act or a sale made in conformity with the provisions
of Rule 145(d) under the Act, GreenPoint reserves the right, in its sole
discretion, to place the following legend on the certificates issued to any
transferee of such GreenPoint Stock from me:
"The shares represented by this certificate have not been
registered under the Securities Act of 1933 and were acquired from a
person who received such shares in a transaction to which Rule 145
under the Securities Act of 1933 applies. The shares have been
acquired by the holder not with a view to, or for resale in connection
with, any distribution thereof within the meaning of the Securities
Act of 1933 and may not be offered, sold, pledged or otherwise
transferred except in accordance with an exemption from the
registration requirements of the Securities Act of 1933."
C-2
It is understood and agreed that the legends set forth in paragraphs
(C) and (D) above shall be removed by delivery of substitute certificates
without such legend if I shall have delivered to GreenPoint (i) a copy of a
"no action" letter from the staff of the SEC, or an opinion of counsel in
form and substance satisfactory to GreenPoint, to the effect that such
legend is not required for purposes of the Act, or (ii) evidence or
representations satisfactory to GreenPoint that the GreenPoint Stock
represented by such certificates is being or has been sold in a transaction
made in conformity with the provisions of Rule 145(d).
(E) I further represent, warrant and covenant with and to GreenPoint
that I will not sell, transfer or otherwise dispose of my interests in, or
reduce my risk relative to, any shares of Headlands Stock or GreenPoint
Stock beneficially owned by me during the period commencing 30 days prior
to the effective date of the Merger and ending at such time as GreenPoint
notifies me that results covering at least 30 days of combined operations
of GreenPoint after the Merger have been published by GreenPoint, which
GreenPoint agrees to publish consistent with its normal financial reporting
practice.
(F) I further represent, warrant and covenant with and to GreenPoint
that I will, and will cause each of the other parties whose shares are
deemed to be beneficially owned by me pursuant to paragraph (G) below to,
have all shares of Headlands Stock owned by me or such parties registered
in my name or in such parties' names, as applicable, prior to the effective
date of the Merger and not in the name of any bank, broker-dealer, nominee
or clearing house.
(G) I understand and agree that this letter agreement shall apply to
all shares of the capital stock of Headlands and GreenPoint that are deemed
to be beneficially owned by me pursuant to applicable federal securities
laws.
(H) I have carefully read this letter and discussed its requirements
and other applicable limitations upon my ability to sell, transfer or
otherwise dispose of the capital stock of Headlands or GreenPoint, to the
extent I felt necessary, with my counsel or counsel for Headlands.
C-3
Very truly yours,
________________________
Name:
[add below the signatures
of all registered owners
of shares deemed
beneficially owned by the
affiliate]
_________________________
Name:
_________________________
Name:
_________________________
Name:
Acknowledged this ______ day of
______________, 1998.
GREENPOINT FINANCIAL CORP.
By:___________________________
Name:
Title:
C-4
