Exhibit A to First
Amendent to Rights
Agreement, dated as of
April 20, 1995
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AGREEMENT
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THIS AGREEMENT ("Agreement"), dated as of April 20, 1995, between Xxxxxxxx
X. Xxxxxxxx (the "Purchaser") and Xxxxxxx Xxxxx National Bancorp, Inc.
("Bancorp"), a Delaware corporation and bank holding company.
W I T N E S S E T H:
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WHEREAS, pursuant to a Rights Agreement dated as of April 12, 1994, between
Bancorp and The First National Bank of Maryland, as rights agent (the "Bancorp
Rights Agreement"), Bancorp declared a dividend of one common share purchase
right (the "Rights") for each outstanding share of common stock, par value
$10.00 per share, of Bancorp ("Bancorp Common Stock"), payable to shareholders
of record of Bancorp common stock on April 23, 1994; and
WHEREAS, the Rights are not exercisable until the "Distribution Date"
described in the Bancorp Rights Agreement; and
WHEREAS, the Purchaser contemplates entering into a Stock Purchase
Agreement ("Stock Purchase Agreement") with Citibank, N.A. (the "Seller"), a
national banking association, the form of which is attached hereto as Exhibit A,
which provides, subject to the conditions therein contained, for the sale by
Seller to Purchaser of 203,038 shares (the "Shares") of Bancorp Common Stock,
said purchase being referred to in the Stock Purchase Agreement and this
Agreement as the "Acquisition"; and
WHEREAS, Purchaser and Seller are unwilling to enter into the Stock
Purchase Agreement without the execution of this Agreement, such that a
condition precedent to Purchaser's execution of the Stock Purchase Agreement is
the execution of this Agreement by Bancorp and the performance or the
undertaking to perform, as applicable, by Bancorp of its obligations hereunder;
and
WHEREAS, Bancorp has determined that consummation of the Acquisition,
subject to the terms set forth herein is in the best interests of Bancorp and
its stockholders; and
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants and agreements herein contained, the parties hereto do hereby agree as
follows:
ARTICLE I
DEFINITIONS
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Capitalized terms not otherwise defined herein are defined as in the
Bancorp Rights Agreement, a copy of which is attached hereto as Exhibit B, and
the form of Stock Purchase Agreement, a copy of which is attached hereto as
Exhibit A.
"Employment Agreement" shall mean the employment agreement dated March 31,
1993 among Bancorp, the Xxxxx National Bank ("Xxxxx") and Xxxxxxx Xxxxx Xxxx, as
amended effective December 31, 1994, and as it may be further amended from time
to time.
"Severance Agreements" shall mean the severance agreements referenced in
Item 5 of Bancorp's Form 8-K report dated April 27, 1994 and appended thereto as
Exhibits No. 10.1 through 10.7, as such may be amended from time to time.
ARTICLE II
COVENANTS, UNDERTAKINGS AND OBLIGATIONS OF PURCHASER
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2.1 Tender Offer
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Within twenty (20) business days following the Initial Closing Date of the
Acquisition, Purchaser will commence a cash tender offer directed to all
stockholders of Bancorp (other than Seller), whereby Purchaser will offer to
purchase all outstanding shares of Bancorp Common Stock owned by such
stockholders for a cash price of $21.00 per share (the "Tender Offer"). The
Tender Offer shall remain open for a minimum of twenty (20) business days (the
"Tender Offer Period") and Purchaser shall purchase pursuant to the Tender Offer
all shares tendered and not withdrawn during the Tender Offer Period. The Tender
Offer shall be conducted in accordance with the requirements of Section 14(d) of
the Securities Exchange Act of 1934, as amended, and the rules and regulations
thereunder, and in accordance with all other applicable requirements of law.
2.2 Purchaser covenants and agrees that, prior to the consummation of the Tender
Offer and the payment in full for any shares tendered, neither the Purchaser nor
any assignee of the Shares (or of Purchaser's right to purchase the Shares) will
vote such Shares without the consent of Bancorp's Board of Directors, to change
in any respect the composition of the Board of Directors.
ARTICLE III
COVENANTS, UNDERTAKINGS AND OBLIGATIONS OF BANCORP
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3.1 Bancorp agrees to take all actions necessary so that the execution,
delivery and performance of the Stock Purchase
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Agreement and consummation of the Acquisition and the Tender Offer as
contemplated by this Agreement do not and will not result in Purchaser, any of
his Permitted Assignees (as defined by the Stock Purchase Agreement), or any of
their "Affiliates" or "Associates" becoming an "Acquiring Person" or an "Adverse
Person" (as such terms are defined in the Bancorp Rights Agreement), enable or
require any Rights under the Bancorp Rights Agreement to become exercisable, or
otherwise cause or give rise to the occurrence of a "Distribution Date" (as such
term is defined in the Bancorp Rights Agreement), which the parties hereto agree
may be effected by means of an amendment to the Rights Plan without a redemption
of the Rights.
3.2 Bancorp agrees not to take any action to oppose or impede consummation
of the Acquisition.
3.3 Bancorp agrees to take and to cause Xxxxx to take all actions necessary so
that the execution, delivery and performance of the Stock Purchase Agreement and
consummation of the Acquisition and the Tender Offer as contemplated by the
Stock Purchase Agreement and this Agreement do not constitute a "Change in
Control" under the terms of any of the Severance Agreements or otherwise cause
any of the rights or benefits of the employees thereunder to become exercisable
or triggered.
3.4 Except as contemplated or required by the terms of this Agreement, Bancorp
agrees that prior to the Initial Closing Date, it shall not amend or alter in
any fashion the Bancorp Rights Agreement.
3.5 Except as contemplated or required by the terms of this Agreement, Bancorp
agrees that prior to the Initial Closing Date, it shall not amend or alter, or
permit Xxxxx to amend or alter, in any fashion any of the Severance Agreements
or Employment Agreement without the prior written consent of the Purchaser:
3.6 Except as otherwise permitted hereby, between the date hereof and the
Initial Closing Date, Bancorp agrees that it will not, and will cause Xxxxx not
to, without the prior written approval of the Purchaser:
(a) Make any change in its authorized capital stock.
(b) Issue any shares of its capital stock, securities convertible into
its capital stock, or any long term debt securities.
(c) Issue or grant any options, warrants, or other rights to purchase
shares of its common stock.
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(d) Enter into, amend to materially increase its obligations under or
materially increase its current level of contributions to, any pension,
retirement, stock option, profit sharing, deferred compensation, bonus, group
insurance, or similar plan in respect of any of its directors, officers, or
other employees.
(e) Mortgage, pledge, or subject to a lien or any other encumbrance,
any of their assets, dispose of any of its assets, incur or cancel any debts or
claims, or increase the current level of compensation or benefits payable to its
officers, employees or directors, except in the ordinary course of business as
heretofore conducted, or take any other action not in the ordinary course of its
business as heretofore conducted or incur any material obligation or enter into
any material contract not in the ordinary course of business.
(f) Amend its Certificate of Incorporation or By-Laws, in the case of
Bancorp, or its Articles of Association or By- laws, in the case of Xxxxx.
3.7 (a) Notwithstanding any other provision of this Agreement, the parties agree
that the Employment Agreement may be amended by Bancorp and Xxxxx to provide for
one or more extensions of the termination date of such agreement to a date not
beyond 90 days following the Initial Closing Date, on the same terms and
conditions, except for the termination date, as provided for therein.
(b) Notwithstanding any other provision of this Agreement, Bancorp for
incentive purposes may adopt a stock option plan and during the first year of
the plan issue to directors and employees of Bancorp and Xxxxx stock options to
purchase in the aggregate a number of shares of Bancorp Common Stock not in
excess of 2.5% of the number of shares of Bancorp Common Stock outstanding on
the date hereof.
3.8 At the Initial Closing, upon satisfaction of the conditions set forth in
Article VI of the Stock Purchase Agreement, Bancorp shall deliver, and shall
cause Xxxxx to deliver, a release of claims against National Bancshares, Inc.
("NBI") and each of its directors (collectively, the "NBI Group") and its
officers, employees and agents, in all material respects in the form attached to
the Stock Purchase Agreement as Exhibit C.
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ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PURCHASER
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4.1 Authorized and Effective Agreement
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(a) Purchaser has all requisite power and authority to enter into and
perform all of its obligations under this Agreement and the Stock Purchase
Agreement. The execution and delivery of this Agreement and the Stock Purchase
Agreement and the consummation of the transactions contemplated hereby and
thereby have been duly and validly authorized by all necessary action in respect
thereof on the part of Purchaser. This Agreement constitutes a legal, valid and
binding obligation of Purchaser, which is enforceable against Purchaser in
accordance with its terms, subject, as to enforceability, to bankruptcy,
insolvency, receivership or conservatorship and other laws of general
applicability relating to or affecting creditors' rights and to general equity
principles.
(b) Neither the execution and delivery of this Agreement or the Stock
Purchase Agreement, nor consummation of the transactions contemplated hereby or
thereby, nor compliance by Purchaser with any of the provisions hereof or
thereof, shall (i) constitute or result in a breach of any term, condition or
provision of, or constitute a default under, or give rise to any right of
termination, cancellation or acceleration with respect to, or result in the
creation of any lien, charge or encumbrance upon any property or asset of
Purchaser pursuant to, any note, bond, mortgage, indenture, license, agreement
or other instrument or obligation, or (ii) subject to receipt of all required
governmental approvals, violate any order, writ, injunction, decree, statute,
rule or regulation applicable to Purchaser.
4.2 Legal Proceedings: Regulatory Approvals
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To the best of Purchaser's knowledge, as of the date of Purchaser's
execution and delivery of this Agreement, there are no actual actions, suits or
proceedings which present a claim to restrain or prohibit the transactions
contemplated herein. No fact or condition relating to Purchaser known to
Purchaser exists that would prohibit Purchaser from obtaining all of the
regulatory approvals contemplated herein.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF BANCORP
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5.1 Authorized and Effective Agreement
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(a) Bancorp has all requisite corporate power and authority to enter
into and to perform all of its obligations
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under this Agreement. The execution and delivery of this Agreement and
consummation of the transactions contemplated hereby have been duly and validly
authorized by all necessary corporate action in respect thereof on the part of
Bancorp. This Agreement constitutes a legal, valid and binding obligation of
Bancorp, which is enforceable against Bancorp in accordance with its terms,
subject, as to enforceability, to bankruptcy, insolvency, receivership or
conservatorship and other laws of general applicability relating to or affecting
creditors' rights and to general equity principles.
(b) Neither the execution and delivery of this Agreement nor
consummation of the transactions contemplated hereby, nor compliance by Bancorp
with any of the provisions hereof, shall (i) conflict with or result in a breach
of any provision of the Certificate of Incorporation or By-laws of Bancorp, (ii)
constitute or result in a breach of any term, condition or provision of, or
constitute a default under, or give rise to any Distribution Date with respect
to, the Bancorp Rights Agreement or any related documents, or (iii) subject to
receipt of all required governmental approvals, violate any order, writ,
injunction, decree, statute, regulation applicable to Bancorp.
5.2 Legal Proceedings
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To the best of Bancorp's knowledge, as of the date of Bancorp's
execution and delivery of this Agreement, there are no actual pending actions,
suits or proceedings which present a claim to restrain or prohibit the
transactions contemplated herein.
ARTICLE VI
CONDITIONS PRECEDENT
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6.1 Condition Precedent to Purchaser's Execution of this
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Agreement
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Purchaser's execution of this Agreement shall be subject to the
receipt by Purchaser and Seller of the opinion of Xxxxxxxxx & Xxxxxxx that the
execution, delivery and performance of the Stock Purchase Agreement and
consummation of the Tender Offer shall not result in the Purchaser or any of his
Permitted Assignees (as defined by the Stock Purchase Agreement) or any of their
"Affiliates" or "Associates" becoming an "Acquiring Person" or an "Adverse
Person" (as such terms are defined by the Bancorp Rights Agreement) under the
Bancorp Rights Agreement or enable or require any Rights under the Bancorp
Rights Agreement to become exercisable, and that a "Distribution Date" (as such
term is defined in the Bancorp Rights Agreement) will not occur as a result of
the execution, delivery and performance of the Stock
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Purchase Agreement or the announcement or consummation of the Tender Offer, such
opinion to be in form and substance satisfactory to Seller, Purchaser and their
respective counsel.
6.2 Conditions Precedent - Purchaser
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The obligations of the Purchaser to effect the Tender Offer as
contemplated by Section 2.1 of this Agreement shall be subject to satisfaction
of the following additional conditions at or immediately prior to the Initial
Closing Date of the Acquisition under the Stock Purchase Agreement unless waived
by Purchaser pursuant to Section 7.3 hereof:
(a) The representations and warranties of Bancorp set forth in Section
5.1 hereof shall be true and correct in all material respects as of the date of
this Agreement and as of such Initial Closing Date as though made on and as of
such Initial Closing Date, except as otherwise expressly provided in this
Agreement or consented to in writing by Purchaser.
(b) Purchaser shall have consummated the Acquisition.
(c) Bancorp shall have in all material respects performed all
obligations and complied with all covenants required or made by it in this
Agreement.
(d) Bancorp shall have delivered to Purchaser and Seller a
certificate, dated as of the Initial Closing Date and signed by its authorized
representative, stating that to the (i) best of such person's knowledge the
conditions set forth in Section 6.2(c) have been satisfied; and (ii) since the
date of execution of this Agreement the Bancorp Rights Agreement has not been
amended or altered in any fashion, (iii) since the date of the certificate of
Bancorp directors and officers referred to and relied upon in the opinion of
Xxxxxxxxx & Xxxxxxx described in Section 6.1 hereof, no change has occurred in
any of the matters and facts set forth in such certificate.
ARTICLE VII
TERMINATION, WAIVER AND AMENDMENT
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7.1 Termination
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This Agreement shall terminate, without any further action on the part
of either party, effective immediately upon the termination of the Stock
Purchase Agreement prior to the Initial Closing Date and may be terminated as
follows:
(a) At any time by the mutual consent in writing of the parties
hereto.
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(b) At any time, by Purchaser in writing if Bancorp has, or by Bancorp
in writing if Purchaser has, in any material respect, breached (i) any covenant
or undertaking contained herein or (ii) any representation or warranty contained
herein, which breach has been materially adverse, and in the case of (i) or (ii)
such breach has not been cured by the earlier of 30 days after the date on which
written notice of such breach is given to the party committing such breach or
the Initial Closing Date; provided that neither party may terminate this
Agreement pursuant to this Section 7.1(b) if at such time such party has, in any
material respect, breached (i) any covenant or undertaking contained herein or
(ii) any representation or warranty contained herein and, in either case, such
breach has not been cured in all material respects.
7.2 Effect of Termination
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In the event this Agreement is terminated pursuant to Section 7.1
hereof, this Agreement shall become void and have no effect.
7.3 Waiver
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Except with respect to any required regulatory approval, each party
hereto, by written instrument signed by an authorized officer of such party, may
at any time extend the time for the performance of any of the obligations or
other acts of the other party hereto and may waive (i) any inaccuracies of the
other party in the representations or warranties contained in this Agreement or
any document delivered pursuant hereto, (ii) compliance with any of the
covenants, undertakings or agreements of the other party, or satisfaction of any
of the conditions precedent to its obligations, contained herein or (iii) the
performance by the other party of any of its obligations set out herein. No
waiver or extension shall be effective unless it is in writing signed by the
party granting such waiver or extension.
7.4 Amendment or Supplement
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This Agreement may be amended or supplemented in writing at any time
by mutual agreement of Purchaser and Bancorp. No modification or amendment of,
or supplement to, this Agreement shall be effective unless signed by the party
to be bound by such modification, amendment or supplement.
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ARTICLE VIII
MISCELLANEOUS
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8.1 Expenses
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Except as provided elsewhere in this Agreement, each party shall bear
and pay all fees, expenses and costs that it incurred in connection with the
transactions contemplated by this Agreement, without limitation, fees and
expenses of its own financial consultants, accountants and counsel.
8.2 Entire Agreement
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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 thereto, written or oral, with
respect to the subject matter hereof. The terms and conditions 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 successors, any rights, remedies, obligations or
liabilities.
8.3 No Assignment
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Neither of the parties hereto may assign any of its rights or
obligations under this Agreement to any other person without the prior written
consent of the non-assigning party.
8.4 Notices
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All notices or other communications which are required or permitted
hereunder shall be in writing and sufficient if delivered personally or sent by
overnight express, or by registered or certified mail, postage prepaid,
addressed as follows:
If to Bancorp:
Xxxxxxx Xxxxx National Bancorp, Inc.
0000 X Xxxxxx, X.X.
Xxxxxxxxxx, XX 00000
Attention: Xxxxxxx Xxxxx Xxxx
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With a required copy to:
Xxxxxxxxx & Xxxxxxx
0000 Xxxxxxxxxxxx Xxxxxx, X.X.
P. O. Xxx 0000
Xxxxxxxxxx, XX 00000
Attention: D. Xxxxxxx Xxxxxxx, Esquire
If to Purchaser:
Xxxxxxxx X. Xxxxxxxx
P. O. Xxx 0000
Xxxxxxxxxx, Xxxx Xxxxxxxx 00000
With a required copy to:
Huddleston, Bolen, Xxxxxx, Xxxxxx & Xxxxx
000 Xxxxx Xxxxxx
P. O. Xxx 0000
Xxxxxxxxxx, Xxxx Xxxxxxxx 00000-0000
Attention: Xxxxxx X. Xxxxxx, Esquire
8.5 Captions
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The captions contained in this Stock Purchase Agreement are for
reference purposes only and are not part of this Agreement.
8.6 Counterparts
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This Agreement may be executed in any number of counterparts, and each
such counterpart shall be deemed to be an original instrument, but all such
counterparts together shall constitute but one agreement.
IN WITNESS WHEREOF, the corporate party has caused this Agreement to
be executed in counterparts by its duly authorized officers and its corporate
seal to be hereunto affixed and attested by its officers thereunto duly
authorized, and the individual party has signed his name, all as of the day and
year first above written.
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XXXXXXX XXXXX NATIONAL BANCORP, INC.
By: /s/ Xxxxxxx Xxxxx Xxxx
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Its: Chairwoman and CEO
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/s/ Xxxxxxxx X. Xxxxxxxx
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XXXXXXXX X. XXXXXXXX
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