Exhibit 10.6
OPTION AGREEMENT
OPTION AGREEMENT, dated as of April 4, 1996, by and between Xxxxx Xxxxxxx
Associates, Inc. ("Xxxxx Xxxxxxx") and Xxxxxxxxxx West Financial Group, Inc.
("HWFG"), a Delaware corporation (the "Agreement").
WITNESSETH
WHEREAS, HWFG and Los Padres Savings Bank, F.S.B. (the "Bank") have entered
into an Agreement and Plan of Reorganization, dated as of September 19, 1995 and
amended as of March 28, 1996, and a related Plan of Merger (collectively, the
"Reorganization Agreement"), pursuant to which HWFG is acquiring the Bank as of
the date hereof (the "Acquisition");
WHEREAS, in recognition of Xxxxx Xxxxxxx'x services as financial advisor to
HWFG in connection with the Acquisition and the related capitalization of HWFG,
as described in the Reorganization Agreement, HWFG desires to grant to Xxxxx
Xxxxxxx an option to purchase shares of its common stock upon the terms and
subject to the conditions set forth herein; and
WHEREAS, the parties desire to enter into this Option Agreement.
NOW, THEREFORE, in consideration of the premises herein contained, the
parties agree as follows:
1. GRANT OF OPTION. Subject to the terms and conditions hereof, HWFG
irrevocably grants to Xxxxx Xxxxxxx as of April 4, 1996 the option ("Option") to
purchase at one time or from time to time an aggregate of 50,000 shares of
common stock, par value $.01 per share, of HWFG ("Common Stock") at a price per
share equal to $17.50 (the price per share is referred to below as the "Purchase
Price" and the price when used with respect to a number of shares is referred to
below as the "aggregate Purchase Price" for such shares). As used in this
Agreement, the term "Shares" means the shares of Common Stock subject to the
Option.
2. EXERCISE OF OPTION. Subject to the terms and conditions hereof, HWFG may
exercise the Option, in whole at any time or in part from time to time, to the
extent not previously exercised, provided that to the extent the Option shall
not have been exercised, it shall terminate and be of no further effect, except
as to notices of exercise given prior thereto, on April 4, 2001 (the
"Termination Date").
3. NOTICE OF EXERCISE; PAYMENT AND DELIVERY OF SHARES.
(a) In the event that Xxxxx Xxxxxxx desires to exercise the Option, Xxxxx
Xxxxxxx shall send a written notice (the date of which being herein referred to
as the "Notice Date") to HWFG specifying the total number of Shares it will
purchase and a place and date for the closing of such purchase, which date
shall be not later than 60 calendar days nor earlier than three business days
from the date such notice is given, unless additional time is needed to give
notification to or to obtain approval from any governmental or regulatory
authority and, if so required, three business days from the date on which the
required notification period has expired or been terminated or such approval
has been obtained and any requisite waiting period with respect thereto shall
have passed.
(b) At the closing of any purchase of Shares hereunder, (a) Xxxxx Xxxxxxx
shall make payment to HWFG of the aggregate Purchase Price for the Shares to be
purchased by delivery to HWFG of a certified, cashier's or bank check payable
to the order of HWFG in such amount or, if mutually agreed, by wire transfer of
funds in such amount to an account designated in writing by HWFG; and (b) HWFG
shall deliver to Xxxxx Xxxxxxx a certificate or certificates representing the
Shares so purchased, registered in the name of Xxxxx Xxxxxxx or its designee.
(c) Xxxxx Xxxxxxx agrees that it shall not purchase any Shares upon
exercise of all or part of the Option without filing and obtaining acceptance,
nonobjection or approval, as the case by be, of the Office of Thrift
Supervision, or successor agency (the "OTS"), of any rebuttal, notice,
application or other filing which may be required to be made by Xxxxx Xxxxxxx
with the OTS in connection with such acquisition, taking into consideration any
other persons who at such time are acting in concert, or presumed to be acting
in concert, with Xxxxx Xxxxxxx.
4. REPRESENTATIONS AND WARRANTIES OF HWFG. HWFG hereby represents and
warrants to Xxxxx Xxxxxxx as follows:
(a) This Agreement has been duly authorized, executed and delivered by
HWFG and constitutes a valid and binding agreement of HWFG, enforceable against
HWFG in accordance with its terms, except to the extent that the obligations of
HWFG set forth in Section 8(a) and (d) hereof may be unenforceable under
applicable federal and state securities laws.
(b) HWFG has taken all necessary corporate and other action (excluding any
required governmental or stockholder approvals) to authorize and reserve and to
permit it to issue, and at all times from the date hereof until such time as the
obligation to deliver Shares upon the exercise of the Option terminates, will
have reserved for issuance, upon any exercise of the Option, the number of
Shares subject to the Option (less the number of Shares previously issued upon
any partial exercise of the Option or as to which the Option may no longer be
exercised). All of the Shares to be issued pursuant to the Option are duly
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authorized and, upon issuance and delivery thereof pursuant to this Agreement,
will be duly and validly issued, fully paid and nonassessable, free and clear of
all claims, liens, charges, encumbrances and security interests, and will not
have been issued in violation of, and will not be subject to, any preemptive
rights of any stockholders of HWFG.
(c) The execution, delivery and performance by HWFG of this Agreement and
the consummation of the transactions contemplated hereby (excluding any required
governmental approvals) do not contravene, or constitute a default under, (i)
the Certificate of Incorporation or Bylaws of HWFG or (ii) any agreement,
instrument, judgment, decree, order, statute, rule or governmental regulation
binding upon HWFG or any of its subsidiaries.
5. REPRESENTATIONS AND WARRANTIES OF XXXXX XXXXXXX. Xxxxx Xxxxxxx hereby
represents and warrants to HWFG as follows:
(a) This Agreement has been duly authorized, executed and delivered by
Xxxxx Xxxxxxx and constitutes a valid and binding agreement of Xxxxx Xxxxxxx,
enforceable against Xxxxx Xxxxxxx in accordance with its terms, except to the
extent that the obligations of Xxxxx Xxxxxxx set forth in Section 8(b) and (d)
hereof may be unenforceable under applicable federal and state securities laws.
(b) Xxxxx Xxxxxxx hereby acknowledges that (i) the Option has not been,
and the Shares may not be, registered under the Securities Act of 1933, as
amended ("Securities Act"), or any other applicable securities registration
requirements and (ii) the Option and the Shares may not be transferred except in
compliance with applicable registration requirements or an available exemption
therefrom.
6. ADJUSTMENT UPON CHANGE IN CAPITALIZATION, ETC. In the event of any
change in the Common Stock by reason of stock dividends, stock splits, mergers,
consolidations, recapitalizations, combinations, conversions, exchanges of
shares, extraordinary or liquidating dividends, or other changes in the
corporate or capital structure of HWFG which would have the effect of diluting
or changing Xxxxx Xxxxxxx'x rights hereunder, the number and kind of shares or
securities subject to the Option and the Purchase Price (but not the aggregate
Purchase Price of the Shares) shall be appropriately and equitably adjusted so
that Xxxxx Xxxxxxx shall receive upon exercise of the Option the number and
class of shares or other securities or property that Xxxxx Xxxxxxx would have
received in respect of the Shares that could have been purchased upon exercise
of the Option if the Option could have been and had been exercised immediately
prior to such event or the record date therefor, as applicable. HWFG shall take
such steps in connection with any consolidation, merger, liquidation or other
such action as may be necessary to ensure that the provisions hereof shall
thereafter apply as nearly as possible to any securities or property thereafter
deliverable upon exercise of the Option.
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7. REGISTRATION OF THE SHARES. HWFG shall notify Xxxxx Xxxxxxx in
writing not less than ten business days prior to filing a registration statement
under the Securities Act with respect to any Common Stock (other than a filing
on Form S-4 or Form S-8) of HWFG's intention so to file. If Xxxxx Xxxxxxx wishes
to have any portion of its Shares purchased hereunder included in such
registration statement, it shall advise HWFG in writing to that effect within
five business days following receipt of such notice from HWFG pursuant to the
preceding sentence, and HWFG will thereupon include the number of shares
indicated by Xxxxx Xxxxxxx under such registration statement, provided, however,
that if the managing underwriter determines and advises HWFG and Xxxxx Xxxxxxx
in writing that the inclusion in the registration statement of the number of
shares indicated by Xxxxx Xxxxxxx would interfere with the successful marketing
of the Common Stock proposed to be registered and sold by HWFG, then the number
of shares indicated by Xxxxx Xxxxxxx to be included in the underwriting shall be
reduced or eliminated pro rata among all holders of shares of Common Stock
requesting such registration, and further provided, however, that nothing herein
shall prevent HWFG from, at any time, abandoning or delaying any registration.
8. INDEMNIFICATION.
(a) In connection with any registration under the provisions of Section 7
hereof, HWFG shall indemnify and hold harmless Xxxxx Xxxxxxx and any
underwriter (as defined in the Securities Act) for Xxxxx Xxxxxxx and each
person who controls Xxxxx Xxxxxxx or such underwriter within the meaning of
the Securities Act, from and against any and all loss, damage, liability, cost
and expense to which Xxxxx Xxxxxxx or any such underwriter or controlling
person may become subject under the Securities Act or otherwise, insofar as
such losses, damages, liabilities, costs or expenses are caused by or arise
out of or are based upon any untrue statement or alleged untrue statement of
any material fact contained in such registration statement, any preliminary or
final offering prospectus contained therein or any amendment or supplement
thereto, or arise out of or are based upon the omission or alleged omission to
state therein a material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances in which they were
made, not misleading; provided, however, that HWFG will not be liable in any
such case to the extent that any such loss, damage, liability, cost or expense
arises out of or is based upon an untrue statement or omission so made in
conformity with information furnished by Xxxxx Xxxxxxx, such underwriter or
such controlling persons in writing specifically for use in the preparation
thereof.
(b) Xxxxx Xxxxxxx will indemnify and hold harmless HWFG, any underwriter
for HWFG and each person who controls HWFG or such underwriter within the
meaning of the Securities Act, from and against any and all loss, damage,
liability, cost and expense to which HWFG or any such underwriter or
controlling person may become subject under the Securities Act or otherwise,
insofar as such losses, damages, liabilities, costs or expenses are caused by
or arise out of or are based upon any untrue statement or alleged untrue
statement of any material fact contained in such registration statement, any
preliminary or
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final offering prospectus contained therein or any amendment or supplement
thereto, or arise out of or are based upon the omission or alleged omission to
state therein a material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances in which they were
made, not misleading, in each case to the extent, but only to the extent, that
such untrue statement or omission was so made in conformity with information
furnished by Xxxxx Xxxxxxx in writing specifically for use in the preparation
thereof.
(c) Promptly after receipt by an indemnified party pursuant to the
provisions of Section 8(a) or (b) of notice of the commencement of any action
involving the subject matter of the foregoing indemnity provisions, such
indemnified party will, if a claim in respect thereof is to be made against the
indemnifying party pursuant to the provisions of Section 8(a) or (b), promptly
notify the indemnifying party of the commencement thereof; except to the extent
of any actual prejudice to the indemnifying party, the omission to so notify
the indemnifying party will not relieve it from any liability which it may have
to any indemnified party otherwise hereunder. In case such action is brought
against any indemnified party and it notifies the indemnifying party of the
commencement thereof, the indemnifying party shall have the right to
participate in, and, to the extent that it may wish, jointly with any other
indemnifying party similarly notified, to assume the defense thereof, with
counsel reasonably satisfactory to such indemnified party; provided, however,
that if the defendants in any action include both the indemnified party and the
indemnifying party and there is a conflict of interests which would prevent
counsel for the indemnifying party from also representing the indemnified
party, the indemnified party or parties shall have the right to select one
separate counsel to participate in the defense of such action on behalf of such
indemnified party or parties. After notice from the indemnifying party to such
indemnified party of its election so to assume the defense thereof, the
indemnifying party will not be liable to such indemnified party pursuant to the
provisions of Section 8(a) or (b) for any legal or other expenses subsequently
incurred by such indemnified party in connection with the defense thereof other
than reasonable costs of investigation, unless (i) the indemnified party shall
have employed counsel in accordance with the provisions of the preceding
sentence, (ii) the indemnifying party shall not have employed counsel
reasonably satisfactory to the indemnified party to represent the indemnified
party within a reasonable time after the notice of the commencement of the
action, or (iii) the indemnifying party has authorized the employment of
counsel for the indemnified party at the expense of the indemnifying party.
(d) If recovery is not available under the foregoing indemnification
provisions, for any reason other than as expressly specified therein, the
parties entitled to indemnification by the terms thereof shall be entitled to
contribution to liabilities and expenses, except to the extent that
contribution is not permitted under Section 11(f) of the Securities Act. In
determining the amount of contribution to which the respective parties are
entitled, there shall be considered the parties' relative fault, knowledge and
access to information concerning the matter with respect to which the claim was
asserted, the opportunity to correct and/or prevent any statement or omission,
and any other equitable considerations appropriate under the circumstances.
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9. QUOTATION. If the Common Stock or any other securities to be acquired
upon exercise of the Option are then authorized for quotation or trading or
listing on the Nasdaq National Market or any securities exchange, HWFG, upon the
request of Xxxxx Xxxxxxx will promptly file an application, if required, to
authorize for quotation or trading or listing the shares of Common Stock or
other securities to be acquired upon exercise of the Option on the Nasdaq
National Market or such other securities exchange and will use its best efforts
to obtain approval, if required, of such quotation or listing as soon as
practicable.
10. FURTHER ASSURANCES. HWFG agrees to execute and deliver such documents
and instruments and take such further actions as may be necessary or appropriate
or as Xxxxx Xxxxxxx may reasonably request in order to ensure that Xxxxx Xxxxxxx
receives the full benefits of this Agreement (including, without limitation, the
prompt filing of any required notice or application for approval with any
applicable federal or state regulatory agency). Prior to the Termination Date,
HWFG will refrain from taking any action which would have the effect of
preventing or interfering with the delivery by HWFG of the Shares (or other
securities deliverable pursuant to Section 6 hereof) to Xxxxx Xxxxxxx upon any
exercise of the Option or from otherwise performing its obligations under this
Agreement.
11. REMEDIES. The parties agree that Xxxxx Xxxxxxx would be irreparably
damaged if for any reason HWFG failed to issue any of the Shares (or other
securities deliverable pursuant to Section 6 hereof) upon exercise of the Option
or to perform any of its other obligations under this Agreement, and that Xxxxx
Xxxxxxx would not have an adequate remedy at law in such event. Accordingly,
Xxxxx Xxxxxxx shall be entitled to specific performance and injunctive and other
equitable relief to enforce the performance of this Agreement by HWFG. This
provision is without prejudice to any other rights that Xxxxx Xxxxxxx may have
against HWFG for any failure to perform its obligations under this Agreement.
12. MISCELLANEOUS.
(a) Expenses. Except as otherwise 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.
(b) Notices. All notices or other communications hereunder shall be in
writing and shall be deemed given if delivered personally, sent by overnight
express or mailed by prepaid registered or certified mail (return receipt
requested) or by cable, telegram, telecopy or telex addressed as follows:
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(i) If to Xxxxx Xxxxxxx, to:
Xxxxx Xxxxxxx Associates, Inc.
0000 Xxxxxxx Xxxxxxxxx, Xxxxx 000
Xxxxxxxx Xxxx, Xxxxxx 00000
ATTN: Xxxxxxx X. Xxxxxx
Copy to:
Elias, Matz, Xxxxxxx and Xxxxxxx L.L.P.
000 00xx Xxxxxx, X.X.
Xxxxxxxxxx, X.X. 00000
ATTN: Xxxxxxx X. Xxxx, Esq.
(ii) If to HWFG, to:
Xxxxxxxxxx West Financial Group, Inc.
000 Xxxxx Xxxxxxx Xxxx
Xxxxxxx, Xxxxxxxxxx 00000-0000
ATTN: Xxxxx X. Xxxxx
Copy to:
Manatt Xxxxxx & Xxxxxxxx
00000 Xxxx Xxxxxxx Xxxxxxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
ATTN: Xxxxxx Xxxxxxx, Esq.
or such other address as shall be furnished in writing by any party, and any
such notice or communication shall be deemed to have been given as of the date
so mailed.
(c) Severability. If any term, provision, covenant or restriction of this
Agreement is held 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 any court or regulatory agency determines that the
Option will not permit the holder to acquire the full number of Shares, it is
the express intention of HWFG to allow the holder to acquire such lesser number
of shares as may be permissible, without any amendment or modification hereof.
(d) Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware without giving effect to the
principles of conflicts of laws thereof.
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(e) Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be an original, but all of which together
shall constitute one and the same agreement.
(f) Headings. The section headings herein are for convenience only and
shall not affect the construction hereof.
(g) Assignment. Xxxxx Xxxxxxx may assign this Agreement to any person or
persons in whole or in part, provided that such assignee shall not purchase any
Shares upon exercise of all or part of the Option without filing and obtaining
acceptance, nonobjection or approval, as the case may be, of the OTS, of any
rebuttal, notice, application or other filing which may be required to be made
by such assignee with the OTS in connection with such acquisition, taking into
consideration any other persons who at such time are acting in concert, or
presumed to be acting in concert, with such assignee. In the case of any sale,
transfer, assignment or disposition in whole or in part of this Option, HWFG
shall do all things necessary to facilitate the same and the person to whom
this Option is sold, transferred assigned or disposed of shall agree in writing
to the terms and conditions hereof. This Agreement shall not be assignable by
HWFG except by operation of law. Subject to the foregoing, this Agreement shall
be binding upon, inure to the benefit of and be enforceable by the parties and
their respective successors and assigns.
(h) Parties in Interest. This Agreement shall be binding upon and inure
solely to the benefit of each party hereto, and nothing in this Agreement,
express or implied, is intended to confer upon any other person (other than an
assignee or transferee of Xxxxx Xxxxxxx pursuant to Section 12(g) hereof) any
rights or remedies of any nature whatsoever under or by any reason of this
Agreement.
13. ENTIRE AGREEMENT. This Agreement, including the documents and other
writings referred to herein or delivered pursuant hereto, contains the entire
agreement and understanding of the parties with respect to its subject matter.
There are no restrictions, agreements, promises, warranties, covenants or
undertakings between the parties other than those expressly set forth herein or
therein. This Agreement supersedes all prior agreements and understandings
between the parties, both written and oral, with respect to its subject matter.
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IN WITNESS WHEREOF, Xxxxx Xxxxxxx and HWFG have caused this Agreement to be
executed by their duly authorized officers as of the day and year first above
written.
XXXXX XXXXXXX ASSOCIATES, INC.
Attest:
/s/ XXXXX X. XXXXX By: /s/ XXXXXXX X. XXXXXX
------------------------------- -------------------------------
Xxxxx X. Xxxxx Xxxxxxx X. Xxxxxx
Secretary Chief Operating Officer and
Executive Vice President
XXXXXXXXXX WEST FINANCIAL GROUP, INC.
Attest:
/s/ XXXXXXX X. XXXX By: /s/ XXXXX X. XXXXX
------------------------------- -------------------------------
Xxxxxxx X. Xxxx Xxxxx X. Xxxxx
Secretary Chairman and Chief Executive Officer
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ASSIGNMENT OF OPTION
ASSIGNMENT, dated as of January 19, 2001 by and between Xxxxx Xxxxxxx
Associates, Inc. ("Xxxxx Xxxxxxx" or "Assignor") and Xxxxx Xxxxx ("Assignee")
(the "Assignment").
WITNESSETH
WHEREAS, Xxxxx Xxxxxxx entered into an Option Agreement with Xxxxxxxxxx
West Financial Group, Inc. ("HWFG") dated April 4, 1996 (the "Option
Agreement") whereby HWFG granted to Xxxxx Xxxxxxx an option to purchase 50,000
shares of common stock, par value $.01 per share, of HWFG ("Common Stock") at a
purchase price equal to $17.50 per share ("Option");
WHEREAS, the Option Agreement provides that Xxxxx Xxxxxxx may assign the
Option Agreement and Option to any person in whole or in part;
WHEREAS, Xxxxx Xxxxxxx desires to assign a portion of the Option Agreement
and Option to purchase 1,900 shares of Common Stock to Assignee; and
WHEREAS, the parties desire to enter into this Assignment.
NOW, THEREFORE, in consideration of the premises herein contained, for
good and valuable consideration, the parties agree as follows:
Assignor hereby assigns its rights, title and interest to purchase 1,900
shares of Common Stock under the Option Agreement to Assignee subject to the
terms and conditions of the Option Agreement, a copy of which is attached
hereto.
Assignee agrees to abide by the terms and conditions of the Option
Agreement and further agrees not to purchase any shares of Common Stock upon
exercise of all or part of the Option without filing and obtaining acceptance,
nonobjection or approval, as the case may be, of the Office of Thrift
Supervision ("OTS"), of any rebuttal, notice, application or other filing which
may be required to be made by Assignee with the OTS in connection with such
acquisition, taking into consideration any other persons who at such time are
acting in concert, or presumed to be acting in concert, with Assignee.
IN WITNESS WHEREOF, Xxxxx Xxxxxxx and Assignee have caused this Assignment
to be executed as of the day and year first above written.
XXXXX XXXXXXX ASSOCIATES, INC.
Attest:
/s/ Xxxxxxxxx X. Xxxxxxx By: /s/ Xxxxxxx X. Xxxxxx
----------------------------- ------------------------------
Xxxxxxxxx X. Xxxxxxx Xxxxxxx X. Xxxxxx
Secretary Chief Operating Officer and Executive
Vice President
ASSIGNEE
Xxxxx X. Xxxxx
------------------------------
Xxxxx Xxxxx
