EXECUTION COPY
OPTION AGREEMENT
This Option Agreement (this "Agreement") is entered into as of the 21st day
of May, 2001, by and between SUCCESS BANCSHARES, INC., a Delaware corporation
("Bancorp"), and bankfinancial CORPORATION, a federal corporation ("Buyer").
W I T N E S S E T H:
WHEREAS, Buyer and Bancorp have entered into an Agreement and Plan of
Reorganization dated as of May 21, 2001 (the "Merger Agreement") providing,
among other things, for the merger (the "Merger") of a wholly-owned subsidiary
of Buyer with and into Bancorp, with Bancorp as the surviving corporation;
WHEREAS, in connection with the Merger, each share of outstanding common
stock of Bancorp, par value $0.001 per share ("Bancorp Common Stock"), would be
converted into the right to receive $19.00 ("Merger Consideration") per share of
Bancorp Common Stock;
WHEREAS, Buyer has expressly indicated to Bancorp that it would be
unwilling to enter into the Merger Agreement and consummate the transactions
contemplated thereby without the benefit of this Agreement; and
WHEREAS, Bancorp has determined that it is in its best interests and the
best interests of its stockholders to enter into the Merger Agreement and grant
to Buyer an option to purchase additional shares of its authorized but unissued
Bancorp Common Stock so as to induce Buyer to enter into the Merger Agreement.
Capitalized terms not otherwise defined herein shall have the meanings given to
them in the Merger Agreement.
A G R E E M E N T:
NOW, THEREFORE, in consideration of the premises and the respective
representations, warranties, covenants and agreements set forth herein, and
intending to be legally bound hereby, Bancorp and Buyer agree as follows:
1. GRANT OF OPTION. Subject to the terms and conditions set forth herein,
Bancorp hereby grants to Buyer an option (the "Option") to purchase up to
605,989 fully paid and nonassessable shares (the "Option Shares") of Bancorp
Common Stock at a purchase price of $17.50 per share (such price, as adjusted if
applicable, the "Purchase Price"). Notwithstanding anything contained herein or
in the Merger Agreement to the contrary, the amount that Buyer (including any
successor-in-interest, Affiliate or transferee) shall be entitled to receive,
whether as (a) consideration for the Option Shares or the Option (including,
without limitation, any payments in the form of Repurchase Consideration) from
any Person, including Bancorp (whether in a single transaction or a series of
transactions), less any Purchase Price actually paid by Buyer, or (b) any
amounts paid to Buyer pursuant to Section 9.2 of the Merger Agreement shall not
exceed $2,418,033 in the aggregate (the "Limit"). In the event that Buyer
receives or is entitled to receive consideration and/or payments described in
(a) and (b) above in excess of the Limit, such excess amount shall be deemed to
be held in constructive trust by
Buyer for the benefit of Bancorp and shall be immediately paid by Buyer to
Bancorp at the time and in the form such amount is received by Buyer. Each
certificate evidencing Option Shares issued to Buyer upon exercise of the Option
shall bear a legend in form and substance acceptable to Bancorp to the effect
that such shares are subject to the foregoing restrictions. The foregoing
restrictions with respect to the Limit shall expire and be of no further force
and effect on the day after the second anniversary of the occurrence of a
Triggering Event (as defined below).
2. EXERCISE OF OPTION.
(a) The Option may be exercised in whole or in part prior to the
termination of this Agreement and after the occurrence of a Triggering Event, as
defined in Section 4 hereof. In the event that Buyer desires to exercise the
Option at any time, Buyer shall notify Bancorp as to the number of shares of
Option Shares it wishes to purchase and a place and date, not less than two (2)
Business Days nor more than ten (10) Business Days after the date such notice is
given (the "Closing Date"), for the closing of such purchase; provided, however,
that notwithstanding the establishment of such Closing Date, the consummation of
the exercise of the Option may take place only after all regulatory or
supervisory agency approvals required by any applicable law, rule or regulation
shall have been obtained and each such approval shall have become final. Bancorp
shall fully cooperate with Buyer in the filing of the required notice or
application for approval and the obtaining of any such approval.
(b) On the Closing Date, Buyer shall (i) pay to Bancorp, in
immediately available funds by wire transfer to a bank account designated by
Bancorp, an amount equal to the Purchase Price multiplied by the number of
Option Shares to be purchased on the Closing Date, and (ii) present and
surrender this Agreement to Bancorp at the address of Bancorp specified in
Section 11(f) hereof.
(c) On the Closing Date, simultaneously with the delivery of
immediately available funds and surrender of this Agreement as provided in
Section 2(b) above, (i) Bancorp shall deliver to Buyer a certificate or
certificates representing the Option Shares to be purchased at such Closing,
which Option Shares shall be free and clear of all liens, claims, charges and
encumbrances of any kind whatsoever, and, if the Option is exercised in part
only, an executed agreement with the same terms as this Agreement evidencing the
right to purchase the balance of the Option Shares hereunder, and (ii) Buyer
shall deliver to Bancorp a letter agreeing that Buyer shall not offer to sell or
otherwise dispose of the Option Shares in violation of the provisions of this
Agreement.
(d) Certificates for the Option Shares delivered at each Closing
shall be endorsed with a restrictive legend which shall read substantially as
follows:
THE TRANSFER OF THE STOCK REPRESENTED BY THIS CERTIFICATE IS SUBJECT
TO RESTRICTIONS ARISING UNDER THE SECURITIES ACT OF 1933, AS AMENDED,
STATE SECURITIES LAWS AND PURSUANT TO THE TERMS OF AN
2
OPTION AGREEMENT DATED AS OF MAY 21, 2001. A COPY OF SUCH OPTION
AGREEMENT WILL BE PROVIDED TO THE HOLDER HEREOF WITHOUT CHARGE UPON
RECEIPT BY BANCORP, INC. OF A WRITTEN REQUEST THEREFOR.
The above legend shall be removed by delivery of substitute certificate(s)
without the legend if Buyer shall deliver to Bancorp a copy of a letter from the
staff of the Securities and Exchange Commission, or an opinion of counsel in
form and substance reasonably satisfactory to Bancorp and its counsel, to the
effect that the legend is not required for purposes of the Securities Act of
1933, as amended (the "1933 Act").
(e) Upon the giving of written notice of exercise by Buyer to
Bancorp and the tender of the applicable purchase price in immediately available
funds, Buyer shall be deemed to be the holder of record of the shares of Bancorp
Common Stock issuable upon such exercise, notwithstanding that the stock
transfer books of Bancorp shall then be closed or that certificates representing
such shares of Bancorp Common Stock shall not then be actually delivered to
Buyer. Bancorp shall pay all expenses, and any and all federal, state and local
taxes and other charges that may be payable in connection with the preparation,
issuance and delivery of stock certificates under this Section 2 in the name of
Buyer or its assignee, transferee or designee.
3. TERMINATION OF OPTION. The Option shall terminate and be of no further
force and effect upon the earliest to occur of: (i) the Effective Time (as
defined in the Merger Agreement), (ii) eighteen (18) months after the occurrence
of a Triggering Event (as defined below), (iii) valid termination of the Merger
Agreement by Bancorp pursuant to Section 9.1(d), 9.1(h) or 9.1 (j) of the Merger
Agreement, (iv) termination of the Merger Agreement by Buyer pursuant to Section
9.1(i) of the Merger Agreement, (v) termination of the Merger Agreement pursuant
to Section 9.1(a) of the Merger Agreement, or (vi) eighteen (18) months after
the termination of the Merger Agreement for any other reason.
4. CONDITIONS TO EXERCISE. Buyer may exercise the Option, in whole or in
part, at any time and from time to time prior to its termination following the
occurrence of a Triggering Event. The term "Triggering Event" shall mean the
occurrence of any of the following events:
(a) if the board of directors of Bancorp shall withdraw its support
of the Merger by resolution or by authorization of specific action inconsistent
with consummation of the Merger, or if it fails to recommend to Bancorp's
Stockholders approval of the Merger; or
(b) a Bancorp Suitor:
(i) acquires beneficial ownership (as such term is defined in
Rule 13d-3 as promulgated under the Securities and Exchange Act of 1934, as
amended (the "Exchange Act")) of twelve and one-half percent (12 1/2%) or
more of the then outstanding Bancorp Common Stock or securities
representing, or the right or option to acquire beneficial ownership of, or
to vote securities representing, twelve and one-half
3
percent (12 1/2%) or more of the then outstanding Bancorp Common Stock, and
after the occurrence of such acquisition the board of directors of Bancorp
(A) recommends such acquisition to its stockholders for acceptance, (B)
fails to undertake such acts as Buyer reasonably requests to oppose such
acquisition (provided that in so doing Bancorp does not incur significant
legal expense), or (C) fails to recommend, withdraws or materially and
adversely modifies or changes its recommendation or its approval of the
Merger Agreement or any aspect of the Reorganization;
(ii) enters into an agreement with Bancorp involving or
relating to an Acquisition Transaction; or
(iii) makes, commences or proposes an Acquisition Transaction,
and thereafter, but before such Proposal has been Publicly Withdrawn (as
defined below), Bancorp willfully commits any material breach of any
covenant of the Merger Agreement and such breach (A) would entitle Buyer to
terminate the Merger Agreement without regard to the cure periods provided
for therein, (B) is not cured and (C) would materially interfere with
Bancorp's ability to consummate the Merger or materially reduce the value
of the transaction to Buyer. The phrase "Publicly Withdrawn" for purposes
of clause (iii) above shall mean an unconditional bona fide withdrawal of
the Proposal or a formal rejection of such Proposal by Bancorp in writing.
Bancorp shall notify Buyer promptly in writing of the occurrence of any of
the events set forth in paragraphs (b)(i), (ii), or (iii) above, it being
understood that the giving of such notice by Bancorp shall not be a
condition to the right of Buyer to transfer or exercise the Option.
5. REPRESENTATIONS AND WARRANTIES OF BANCORP. Bancorp hereby represents and
warrants to Buyer as follows:
(a) Bancorp has all requisite corporate power and authority to
enter into this Agreement and, subject to any approvals referred to herein
(including, without limitation, the approval of the OTS and the Federal Reserve,
if necessary), 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 Bancorp. This Agreement has been duly executed and delivered by
Bancorp.
(b) Bancorp has taken all necessary corporate and other action to
authorize and reserve and to permit it to issue, and, at all times from the date
hereof until the obligation to deliver the Option Shares upon the exercise of
the Option terminates, will have reserved for issuance, upon exercise of the
Option, shares of Bancorp Common Stock necessary for Buyer to fully exercise the
Option, and Bancorp will take all necessary corporate action to authorize and
reserve for issuance all additional shares of Bancorp Common Stock or other
securities which may be issued upon exercise of the Option. The Option Shares,
including all additional shares of Bancorp Common Stock or other securities
which may be issuable pursuant to Section 7 hereof, upon issuance pursuant
hereto and payment therefor, shall be duly and
4
validly issued, fully paid and nonassessable, and shall be delivered free and
clear of all liens, claims, charges and encumbrances of any kind or nature
whatsoever, including any preemptive rights of any stockholder of Bancorp.
(c) The execution, delivery and performance of this Agreement does
not or will not, and the consummation by Bancorp of any of the transactions
contemplated hereby will not, constitute or result in (i) a breach or violation
of, or a default under, its certificate of incorporation or bylaws, or the
comparable governing instruments of any of its subsidiaries, or (ii) a breach or
violation of, or a default under, any agreement, lease, contract, note,
mortgage, indenture, arrangement or other obligation of it or any of its
subsidiaries (with or without the giving of notice, the lapse of time or both)
or under any law, rule, ordinance or regulation or judgment, decree, order,
award or governmental or nongovernmental permit or license to which it or any of
its subsidiaries is subject, that would, in any case referred to in this clause
(ii), give any other person the ability to prevent or enjoin Bancorp's
performance under this Agreement.
(d) Bancorp agrees: (i) that it shall at all times maintain, free
from preemptive rights, sufficient authorized but unissued or treasury shares of
Bancorp Common Stock so that the Option may be exercised without additional
authorization of Bancorp Common Stock after giving effect to all other options,
warrants, convertible securities and other rights to purchase Bancorp 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
Bancorp except pursuant to the Merger; (iii) promptly to take all action as may
from time to time be required (including (x) complying with all 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 Home Owners' Loan Act, as amended, or the Change in Bank Control Act of
1978, as amended, or any state banking law, prior approval of or notice to the
FRB or the OTS or to any federal or state regulatory authority is necessary
before the Option may be exercised, cooperating fully with Buyer in preparing
such applications or notices and providing such information to the FRB and the
OTS or such federal or state regulatory authority as it may require) in order to
permit Buyer to exercise the Option and Bancorp duly and effectively to issue
shares of Bancorp Common Stock pursuant hereto; and (iv) promptly to take all
action provided herein to protect the rights of Buyer against dilution on or
prior to the Closing Date.
6. REPRESENTATIONS AND WARRANTIES OF BUYER. Buyer hereby represents and
warrants to Bancorp that:
(a) Buyer has all requisite corporate power and authority to enter
into this Agreement and, subject to any approvals or consents referred to
herein, to consummate the transactions contemplated hereby. This Agreement has
been duly executed and delivered by Buyer.
5
(b) The Option is not being, and any Option Shares or other
securities acquired by Buyer 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.
7. ADJUSTMENT UPON CHANGES IN CAPITALIZATION, REPURCHASE OF OPTION.
(a) In the event of any change in Bancorp Common Stock by reason
of a stock dividend, stock split, split-up, recapitalization, combination,
exchange of shares or similar transaction, the type and number of shares or
securities subject to the Option, and the Purchase Price therefor, shall be
adjusted appropriately, and proper provision shall be made in the agreements
governing such transaction so that Buyer shall receive, upon exercise of the
Option, the number and class of shares or other securities or property that
Buyer would have received in respect of Bancorp Common Stock if the Option had
been exercised immediately prior to such event, or the record date therefor, as
applicable. If any additional shares of Bancorp Common Stock are issued after
the date of this Agreement (other than pursuant to an event described in the
first sentence of this Section 7(a)), the number of shares of Bancorp Common
Stock subject to the Option shall be adjusted so that, after such issuance, it,
together with any shares of Bancorp Common Stock previously issued pursuant
hereto, equals 19.9% of the number of shares of Bancorp Common Stock then issued
and outstanding, after giving effect to any shares subject to or issued pursuant
to the Option.
(b) If a Triggering Event described in Section 4(b) shall occur
and the transaction that is the subject of such Triggering Event is consummated,
or if any Person other than Buyer or an Affiliate of Buyer acquires beneficial
ownership of 50% or more of the then outstanding shares of Bancorp Common Stock,
Bancorp, if requested by Buyer, shall pay to Buyer, in lieu of delivery of the
Option Shares, an amount in cash equal to the Spread multiplied by the total
number of Option Shares for which the Option is exercisable (such aggregate
amount is referred to as the "Repurchase Consideration"). As used herein,
"Spread" shall mean the excess, if any, over the Purchase Price (as defined in
Section 1) of the higher of (i) highest closing price per share of Bancorp
Common Stock as reported on The Nasdaq Stock Market ("NASDAQ") within six months
immediately preceding the date that Buyer requests cash in lieu of shares
pursuant to this Section (the "Request Date"), (ii) the price per share of
Bancorp Common Stock at which a tender offer or an exchange offer therefor has
been made, (iii) the price per share of Bancorp Common Stock to be paid by any
third party pursuant to an agreement with Bancorp, or (iv) in the event of a
sale of all or a substantial portion of Bancorp's assets, the sum of the price
paid in such sale for such assets and the current market value of the remaining
assets of Bancorp determined by a nationally recognized investment banking firm
mutually selected by Buyer, on the one hand, and Bancorp, on the other, divided
by the number of shares of Bancorp Common Stock of Bancorp outstanding at the
time of such sale. In determining the Repurchase Consideration, the value of
consideration other than cash shall be determined by a nationally recognized
investment banking firm mutually selected by Buyer, on the one hand, and Bancorp
on the other.
6
(c) Upon exercise of its right to receive cash pursuant to this
Section, any and all obligations of Buyer to make payment pursuant to Section
2(b) and all obligations of Bancorp to deliver a certificate or certificates
representing shares of Bancorp Common Stock pursuant to Section 2(b) shall be
terminated. If Buyer exercises its rights under this Section 7, Bancorp shall,
within ten (10) Business Days after the Request Date, pay the Repurchase
Consideration to Buyer in immediately available funds, and Buyer shall surrender
to Bancorp the Option. Notwithstanding the foregoing, to the extent that prior
notification to or approval of any Applicable Governmental Authority is required
in connection with the payment of all or any portion of the Repurchase
Consideration, Buyer shall have the ongoing option to revoke its request for
repurchase pursuant to Section 7(b) or to require that Bancorp deliver from time
to time that portion of the Repurchase Consideration that it is not then so
prohibited from paying and promptly file the required notice or application for
approval and expeditiously process the same (and Bancorp shall cooperate with
Buyer in the filing of any such notice or application and the obtaining of any
such approval). If any Applicable Governmental Authority disapproves of any part
of Bancorp's proposed repurchase pursuant to Section 7(b), Bancorp shall
promptly give notice of such fact to Buyer and Buyer shall have the right to
exercise the Option as to the number of Option Shares for which the Option was
exercisable at the Request Date.
8. REGISTRATION RIGHTS.
(a) Upon the occurrence of a Triggering Event Bancorp shall, at
the request of Buyer delivered at the time of and together with a written notice
of exercise in accordance with Section 2 hereof and promptly prepare, file and
keep current a registration statement under the 1933 Act covering any shares
issued or issuable pursuant to this Option and shall use its best efforts to
cause such registration statement to become effective and to remain effective
for up to 180 days from the day such registration statement first becomes
effective or such shorter time as may be reasonably necessary in order to permit
the sale or other disposition of any shares of Bancorp Common Stock issued upon
total or partial exercise of this Option in accordance with any plan of
disposition requested by Buyer. Buyer will provide such information as may be
necessary for Bancorp's preparation of such a registration statement, and any
such information will not contain any statement which, at the time and in light
of the circumstances under which it is made, is false or misleading with respect
to any material fact nor will such information omit to state any material facts
with respect to Buyer or its intended plan of disposition of Option Shares. The
foregoing notwithstanding, if, at the time of any request by Buyer for
registration of Option Shares as provided above, Bancorp is in registration with
respect to an underwritten public offering of shares of Bancorp Common Stock,
and if in the good faith reasonable judgment of the managing underwriter or
managing underwriters, or, if none, the sole underwriter or underwriters, of
such offering the inclusion of Buyer's Option or Option Shares would interfere
with the successful marketing of the shares of Bancorp Common Stock offered by
Bancorp, the number of Option Shares otherwise to be covered in the registration
statement contemplated hereby may be reduced ("Underwriter Reduction");
provided, however, that after any such required reduction, the number of Option
Shares to be included in such offering for the account of Buyer shall constitute
at least 50% of the total number of shares to be sold by Buyer and Bancorp in
the aggregate; and provided,
7
further, however, that if such reduction occurs, then Bancorp shall file a
registration statement for the balance as promptly as practical and no reduction
shall thereafter occur. If requested by Buyer in connection with such
registration, Bancorp 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 Bancorp.
(b) If after the occurrence of a Triggering Event, Bancorp effects
a registration under the 1933 Act of Bancorp Common Stock for its own account or
for any other stockholders of Bancorp (other than on Form S-8, or any successor
form), it shall allow Buyer the right to participate in such registration, and
such participation shall not affect the obligation of Bancorp to effect a
registration statement for Buyer under Section 8(a) above; provided, however,
that if the circumstances give rise to an Underwriter Reduction as provided in
8(a) above, then the procedure set forth in Section 8(a) governing the number of
Option Shares to be included in such registration shall apply.
(c) In connection with any registration pursuant to this Section 8,
Bancorp and Buyer shall provide each other and any underwriter of the offering
with customary representations, warranties, covenants, indemnification and
contribution in connection with such registration. Any registration statement
prepared and filed under this Section 8 and any sale covered thereby shall be at
Bancorp's expense except for underwriting discounts or commissions, brokers'
fees, taxes and the fees and disbursements of Buyer's counsel related thereto.
9. SUBSTITUTE OPTION.
(a) In the event that prior to the termination of the Option,
Bancorp shall enter into an agreement (i) to consolidate with or merge into any
person, other than Buyer or one of its subsidiaries, and shall not be the
continuing or surviving corporation of such consolidation or merger, (ii) to
permit any person, other than Buyer or one of its subsidiaries, to merge into
Bancorp and Bancorp shall be the continuing or surviving corporation, but, in
connection with such merger, the then outstanding shares of Bancorp 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 Bancorp
Common Stock shall after such merger represent less than 50% of the outstanding
shares and share equivalents of the merged company, or (iii) to sell or
otherwise transfer all or substantially all of its assets to any person, other
than Buyer or one of its subsidiaries, 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 Buyer, 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:
8
(1) "Acquiring Corporation" shall mean (i) the continuing or
surviving corporation of a consolidation or merger with Bancorp
(if other than Bancorp), (ii) Bancorp in a merger in which
Bancorp is the continuing or surviving person, and (iii) the
transferee of all or substantially all of Bancorp's assets.
(2) "Substitute Common Stock" shall mean the shares of
capital stock (or similar equity interest) with the greatest
voting power in respect of the election of directors (or other
persons similarly responsible for direction of the business and
affairs) of the issuer of the Substitute Option.
(3) "Assigned Value" shall mean the highest of (i) the price
per share of common stock at which a tender offer 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
Bancorp, or (iii) in the event of a sale of all or substantially
all of Bancorp's assets, the sum of the price paid in such sale
for such assets and the current market value of the remaining
assets of Bancorp as determined by a nationally recognized
investment banking firm selected by Buyer divided by the number
of shares of Bancorp Common Stock 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 Buyer.
(4) "Average Price" shall mean the average closing price of
a share of the Substitute Common Stock for the six (6) months
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, however, that if Bancorp
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 Bancorp or by any company which controls or
is controlled by such person, as Buyer may elect.
(c) The Substitute Option shall have the same terms and conditions
as the Option, provided, that if any term or condition of the Substitute Option
cannot, for legal reasons, be the same as the Option, such term or condition
shall be as similar as possible and in no event less advantageous to Buyer. The
issuer of the Substitute Option shall also enter into an agreement with Buyer in
substantially the same form as this Agreement, which 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 (i) the product of (A) the
Assigned Value and (B) the number of shares of Bancorp Common Stock for which
the Option is then exercisable, divided by (ii) 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 Bancorp Common Stock for which the Option is
then exercisable and the denominator of which shall be the number of shares of
Substitute Common Stock for which the Substitute Option is exercisable.
9
(e) In no event, pursuant to any of the foregoing paragraphs, shall
the Substitute Option be exercisable for more than 19.9% of the number of shares
of Substitute Common Stock outstanding prior to exercise of the Substitute
Option.
(f) Bancorp shall not enter into any transaction described in
subsection (a) of this Section 9 unless the Acquiring Corporation and any person
that controls the Acquiring Corporation assume in writing all the obligations of
Bancorp hereunder.
10. LISTING. If Bancorp Common Stock to be acquired upon exercise of the
Option is then authorized for listing on the NASDAQ or on any other national
securities exchange or automated quotation system, Bancorp will promptly file an
application to authorize for listing the shares of Bancorp Common Stock to be
acquired upon exercise of the Option on the NASDAQ or such other securities
exchange or quotation system and will use its best efforts to obtain approval of
such listing as soon as practicable.
11. MISCELLANEOUS.
(a) Expenses. Except as otherwise provided in Section 8, 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.
(b) Waiver and Amendment. Any provision of this Agreement may be
waived at any time by the party that is entitled to the benefits of such
provision. This Agreement may not be modified, amended, altered or supplemented
except upon the execution and delivery of a written agreement executed by the
parties hereto.
(c) Entire Agreement; No Third-Party Beneficiary; Severability.
This Agreement, with the Merger Agreement and the other Transaction Documents,
constitutes the entire agreement and supersedes all prior agreements and
understandings, both written and oral, between the parties with respect to the
subject matter hereof and is not intended to confer upon any person other than
the parties hereto any rights or remedies hereunder. If any term, provision,
covenant or restriction of this Agreement is held by a court of competent
jurisdiction or a federal or state regulatory agency to be invalid, void or
unenforceable, the remainder of the terms, provisions, covenants and
restrictions of 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 Option does not permit Buyer to acquire,
or does not require Bancorp to repurchase, the full number of shares of Bancorp
Common Stock as provided herein, it is the express intention of Bancorp to allow
Buyer to acquire or to require Bancorp to repurchase such lesser number of
shares as may be permissible without any amendment or modification hereof.
(d) Governing Law. This Agreement shall be governed and construed
in accordance with the laws of the State of Delaware without regard to any
applicable conflicts of law rules.
10
(e) Descriptive Headings. The descriptive headings contained herein
are for convenience of reference only and shall not affect in any way the
meaning or interpretation of this Agreement.
(f) Notices. All notices and other communications hereunder shall
be in writing and shall be deemed given if delivered personally, telecopied
(with confirmation) or mailed by registered or certified mail (return receipt
requested) to the parties at the following addresses (or at such other address
for a party as shall be specified by like notice):
If to Buyer, addressed to: BankFinancial Corporation, Inc.
0000 Xxxxxxxxxxxxxx Xxxxxxx, Xxxxx 000
Xxxxxxxxx, Xxxxxxxx 00000
Telecopy: (000) 000-0000
Attention: Xx. Xxxxx X. Xxxxxxx
with a copy to: Barack Xxxxxxxxxx Xxxxxxxxxx Xxxxxxx
& Xxxxxxxxx
000 Xxxx Xxxxxx Xxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Telecopy: (000) 000-0000
Attention: Xxxxx X. del Hierro, Esq.
If to Bancorp, addressed to: Success Bancshares, Inc.
0 Xxxxxxxx Xxxxx
Xxxxxxxxxxxx, Xxxxxxxx 00000
Telecopy: (000) 000-0000
Attention: Xxxxxx X. Xxxxxx
with a copy to: Vedder, Price, Xxxxxxx & Kammholz
000 Xxxxx XxXxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000-0000
Telecopy: (000) 000-0000
Attention: Xxxxxx X'Xxxxxx, Esq.
or to such other place and with such other copies as either party may designate
as to itself by written notice to the others.
(g) Counterparts. This Agreement and any amendments hereto may be
executed in two counterparts, each of which shall be considered one and the same
agreement and shall become effective when both counterparts have been signed, it
being understood that both parties need not sign the same counterpart.
(h) Assignment. TRANSFER OF THIS AGREEMENT IS SUBJECT TO CERTAIN
PROVISIONS CONTAINED HEREIN AND TO RESALE RESTRICTIONS UNDER THE 1933 ACT.
Neither this Agreement nor any of the rights, interests or
11
obligations hereunder or under the Option may be assigned by any of the parties
hereto (whether by operation of law or otherwise) without the prior written
consent of the other party, except that Buyer may assign this Agreement to a
wholly owned subsidiary of Buyer. This Agreement shall be binding upon, inure to
the benefit of and be enforceable by the parties and their respective successors
and permitted assigns.
(i) Further Assurances. In the event of any exercise of the Option
by Buyer, Bancorp and Buyer shall execute and deliver all other documents and
instruments and take all other action that may be reasonably necessary in order
to consummate the transactions provided for by such exercise.
(j) Specific Performance. The parties hereto agree that this
Agreement may be enforced by either party through specific performance,
injunctive relief and other equitable relief. Both parties further agree to
waive any requirement for the securing or posting of any bond in connection with
the obtaining of any such equitable relief and that this provision is without
prejudice to any other rights that the parties hereto may have for any failure
to perform this Agreement.
[THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
12
IN WITNESS WHEREOF, Bancorp and Buyer have caused this Option Agreement to
be signed by their respective officers, all as of the day and year first written
above.
BANKFINANCIAL CORPORATION SUCCESS BANCSHARES, INC.
By: /s/ F. Xxxxxx Xxxxxx By: /s/ Xxxxxx X. Xxxxxx
--------------------------------- --------------------------------
X. Xxxxxx Xxxxxx Xxxxxx X. Xxxxxx
Its: Chairman and Chief Its: Chairman and Chief
Executive Officer Executive Officer
Attest: /s/ Xxxxx X. Xxxxxxx Attest: /s/ Xxxxxx Xxxxxxxxxxxx
------------------------------- -------------------------------
Xxxxx X. Xxxxxxx Xxxxxx Xxxxxxxxxxxx
Its: Secretary Its: Secretary
S-1
