EXHIBIT 10.1
OPTION AGREEMENT
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OPTION AGREEMENT ("Option Agreement") dated May 8, 1997, among BAY VIEW
CAPITAL CORPORATION ("Buyer"), a Delaware corporation registered as a savings
and loan holding company under the Home Owners' Loan Act, as amended ("HOLA"),
AMERICA FIRST FINANCIAL FUND 1987-A LIMITED PARTNERSHIP, a Delaware limited
partnership ("Selling Stockholder"), and AMERICA FIRST CAPITAL ASSOCIATES
LIMITED PARTNERSHIP FIVE, a Delaware limited partnership and the General Partner
of Selling Stockholder (the "General Partner").
W I T N E S S E T H:
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WHEREAS, the Board of Directors of Buyer and the General Partner of Selling
Stockholder have approved an Agreement and Plan of Merger dated as of even date
herewith (the "Agreement") providing for, among other things, the merger of
America First Eureka Holdings, Inc., ("Seller") with and into Buyer;
WHEREAS, as a condition to Buyer entering into the Merger Agreement, Buyer
has required that Selling Stockholder agree, and Selling Stockholder has agreed,
to grant to Buyer the option set forth herein to purchase from Selling
Stockholder authorized but unissued Beneficial Unit Certificates ("BUCs").
NOW, THEREFORE, in consideration of the premises herein contained, the
parties agree as follows:
1. Definitions.
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Capitalized terms used but not defined herein shall have the same meanings
as in the Agreement.
2. Grant of Option.
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Subject to the terms and conditions set forth herein, Selling Stockholder
hereby grants to Buyer an option (the "Option") to purchase from Selling
Stockholder up to 1,196,107 authorized but unissued BUCs at a price of $31.08
per unit (the "Purchase Price") payable in cash as provided in Section 4 hereof.
3. Exercise of Option.
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(a) Buyer may exercise the Option, in whole or in part, at any time or from
time to time if a Purchase Event (as defined below) shall have occurred;
provided, however, that (i) to the extent the Option shall not have been
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exercised, it shall terminate and be of no further force and effect upon the
earliest to occur of (A) the Effective Time of the Merger, (B) the termination
of the Agreement in accordance with Sections 7.01(a) through 7.01(c) or Sections
7.01(e) through 7.01(f) thereof, and (C) three years following the termination
of the Agreement in accordance with Section 7.01(d) thereof, provided that if
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such termination follows an Extension Event (as defined below), the Option shall
not terminate until the date that is 12 months following such termination; (ii)
if the Option cannot be exercised on such day because of any injunction, order
or similar restraint issued by a court of competent jurisdiction, the Option
shall expire on the 30th business day after such injunction, order or restraint
shall have been dissolved or when such injunction, order or restraint shall have
become permanent and no longer subject to appeal, as the
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case may be; and (iii) that any such exercise shall be subject to compliance
with applicable law, including the HOLA.
(b) As used herein, a "Purchase Event" shall mean any of the following
events:
(i) Selling Stockholder or any of its Subsidiaries, without having
received prior written consent from Buyer, shall have entered into,
authorized, recommended, proposed or publicly announced its intention to
enter into, authorize, recommend, or propose, an agreement, arrangement or
understanding with any person (other than Buyer or any of its Subsidiaries)
to (A) effect a merger or consolidation or similar transaction involving
Seller or any of its Subsidiaries (other than internal mergers,
reorganizing actions, consolidations or dissolutions involving only
existing Subsidiaries of Seller), (B) purchase, lease or otherwise acquire
15% or more of the assets of Seller or any of its Subsidiaries, or (C)
purchase or otherwise acquire (including by way of merger, consolidation,
share exchange or similar transaction) Beneficial Ownership (as defined
below) of BUCs representing more than 15% of the voting power of Selling
Stockholder or any of its Subsidiaries;
(ii) any person (other than Buyer or any Subsidiary of Buyer or any
person acting in concert with Buyer, or Seller or any Subsidiary of Seller
in a fiduciary capacity) shall have acquired Beneficial Ownership or the
right to acquire Beneficial Ownership of more than 15% of the voting power
of Selling Stockholder; or
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(iii) The General Partner shall have withdrawn or modified in a manner
adverse to Buyer the recommendation of the General Partner with respect to
the Agreement or the Distribution, in each case after an Extension Event;
or
(iv) the Limited Partners of Seller shall not have approved the
Agreement or the Distribution at the Selling Stockholder Meeting, or such
Meeting shall not have been held or shall have been canceled prior to
termination of the Agreement in accordance with its terms, in each case
after an Extension Event.
(c) As used herein, the term "Extension Event" shall mean any
of the following events :
(i) a Purchase Event of the type specified in clauses (b) (i) and (b)
(ii) above;
(ii) any person (other than Buyer or any of its Subsidiaries) shall
have "commenced" (as such term is defined in Rule 14d-2 under the Exchange
Act), or shall have filed a registration statement under the Securities Act
with respect to, a tender offer or exchange offer to purchase BUCs such
that, upon consummation of such offer, such person would have Beneficial
Ownership or the right to acquire Beneficial Ownership of more than 15% of
the voting power of Selling Stockholder; or,
(iii) any person (other than Buyer or any Subsidiary of Buyer, or
Selling Stockholder or any Subsidiary of Selling Stockholder in a fiduciary
capacity) shall have publicly announced its willingness, or shall have
publicly announced a proposal, or publicly disclosed an intention to make a
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proposal, (x) to make an offer described in clause (ii) above or (y) to
engage in a transaction described in clause (i) above.
(d) As used herein, the terms "Beneficial Ownership" and "Beneficially Own"
shall have the meanings ascribed to them in Rule 13d-3 under the Exchange Act.
(e) In the event Buyer wishes to exercise the Option, it shall deliver to
Selling Stockholder a written notice (the date of which being herein referred to
as the "Notice Date") specifying (i) the total number of BUCs it intends to
purchase pursuant to such exercise and (ii) a place and date not earlier than
three business days nor later than 60 calendar days from the Notice Date for the
closing of such purchase (the "Closing Date").
4. Payment and Delivery of Certificates.
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(a) At the closing referred to in Section 3 hereof, Buyer shall pay to
Selling Stockholder the aggregate purchase price for the BUCs purchased pursuant
to the exercise of the Option in immediately available funds by wire transfer to
a bank account designated by Selling Stockholder.
(b) At such closing, simultaneously with the delivery of cash as provided
in Section 4(a), Selling Stockholder shall deliver to Buyer a certificate or
certificates representing the number of BUCs purchased by Buyer, registered in
the name of Buyer or a nominee designated in writing by Buyer, and Buyer shall
deliver to Selling Stockholder a letter agreeing that Buyer shall not offer to
sell, pledge or otherwise dispose of such BUCs in violation of applicable law or
the provisions of this Option Agreement.
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(c) If at the time of issuance of any BUCs pursuant to any exercise of the
Option, Selling Stockholder shall have issued any BUC purchase rights or similar
securities to holders of BUCs, then each such BUC shall also represent rights
with terms substantially the same as and at least as favorable to Buyer as those
issued to other holders of BUCs.
(d) Certificates for BUCs delivered at any closing hereunder shall be
endorsed with a restrictive legend which shall read substantially as follows:
The transfer of the Beneficial Unit Certificates represented by this
certificate is subject to certain provisions of an agreement between the
registered holder hereof and ___________________, a copy of which is on
file at the principal office of _____________, and to resale restrictions
arising under the Securities Act of 1933 and any applicable state
securities laws. A copy of such agreement will be provided to the holder
hereof without charge upon receipt by ___________________ of a written
request therefor.
It is understood and agreed that the above legend shall be removed by delivery
of substitute certificate(s) without such legend if Buyer shall have delivered
to Selling Stockholder an opinion of counsel, in form and substance reasonably
satisfactory to Selling Stockholder and its counsel, to the effect that such
legend is not required for purposes of the Securities Act and any applicable
state securities laws.
5. Authorization, etc.
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(a) Selling Stockholder hereby represents and warrants to Buyer that:
(i) Selling Stockholder has full partnership authority to execute and
deliver this Option Agreement and, subject to Section 11(i), to consummate
the transactions contemplated hereby;
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(ii) such execution, delivery and consummation have been authorized by
the General Partner, and no other partnership proceedings are necessary
therefor;
(iii) this Option Agreement has been duly and validly executed and
delivered and represents a valid and legally binding obligation of Selling
Stockholder, enforceable against Selling Stockholder in accordance with its
terms; and
(iv) Selling Stockholder has taken all necessary partnership action to
authorize and reserve and, subject to Section 11(i), permit it to issue
and, at all times from the date hereof through the date of the exercise in
full or the expiration or termination of the Option, shall have reserved
for issuance upon exercise of the Option, 1,196,107 BUCs of Selling
Stockholder, all of which, upon issuance pursuant hereto, shall be duly
authorized, validly issued, fully paid and nonassessable, and shall be
delivered free and clear of all claims, liens, encumbrances, restrictions
(other than federal and state securities restrictions) and security
interests and not subject to any preemptive rights.
(b) Buyer hereby represents and warrants to Selling Stockholder that:
(i) Buyer has full corporate authority to execute and deliver this
Option Agreement and, subject to Section 11(i), to consummate the
transactions contemplated hereby;
(ii) such execution, delivery and consummation have been authorized by
all requisite corporate action by Buyer, and no other corporate proceedings
are necessary therefor;
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(iii) this Option Agreement has been duly and validly executed and
delivered and represents a valid and legally binding obligation of Buyer,
enforceable against Buyer in accordance with its terms; and
(iv) any BUC or other securities acquired by Buyer upon exercise of
the Option will not be taken with a view to the public distribution thereof
and will not be transferred or otherwise disposed of except in compliance
with the Securities Act.
6. Adjustment upon Changes in Capitalization.
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In the event of any change in the securities of Selling Stockholder by
reason of dividends, split-ups, recapitalizations or the like, the type and
number of BUCs subject to the Option, and the purchase price per unit, as the
case may be, shall be adjusted appropriately. In the event that any additional
BUCs are issued after the date of this Option Agreement (other than pursuant to
an event described in the preceding sentence or pursuant to this Option
Agreement), the number of BUCs subject to the Option shall be adjusted so that,
after such issuance, it equals at least 19.9% of the number of BUCs then issued
and outstanding (without considering any shares subject to or issued pursuant to
the Option).
7. Repurchase.
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(a) Subject to Section 11(i), at the request of Buyer at any time
commencing upon the occurrence of a Purchase Event and ending 13 months
immediately thereafter (the "Repurchase Period"), Selling Stockholder (or any
successor entity thereof) shall repurchase the Option from Buyer together with
all (but not less than all, subject
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to Section 10) BUCs purchased by Buyer pursuant thereto with respect to which
Buyer then has Beneficial Ownership, at a price (per unit, the "Per Unit
Repurchase Price") equal to the sum of:
(i) The exercise price paid by Buyer for any BUCs acquired pursuant
to the Option;
(ii) The difference between (A) the "Market/Tender Offer Price" for
BUCs (defined as the higher of (x) the highest price per unit at which a
tender or exchange offer has been made for BUCs or (y) the highest closing
mean of the "bid" and the "ask" price per BUC reported by the Nasdaq, the
automated quotation system of the National Association of Securities
Dealers, Inc., for any day within that portion of the Repurchase Period
which precedes the date Buyer gives notice of the required repurchase under
this Section 7) and (B) the exercise price as determined pursuant to
Section 2 hereof (subject to adjustment as provided in Section 6),
multiplied by the number of BUCs with respect to which the Option has not
been exercised, but only if the Market/Tender Offer Price is greater than
such exercise price;
(iii) The difference between the Market/Tender Offer Price and the
exercise price paid by Buyer for any BUC purchased pursuant to the exercise
of the Option, multiplied by the number of units so purchased, but only if
the Market/Tender Offer Price is greater than such exercise price; and
(iv) Buyer's reasonable out-of-pocket expenses incurred in connection
with the transactions contemplated by the Merger
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Agreement, including, without limitation, legal, accounting and investment
banking fees.
(b) In the event Buyer exercises its rights under this Section 7, Selling
Stockholder shall, within ten business days thereafter, pay the required amount
to Buyer by wire transfer of immediately available funds to an account
designated by Buyer and Buyer shall surrender to Selling Stockholder the Option
and the certificates evidencing the BUCs purchased thereunder with respect to
which Buyer then has Beneficial Ownership, and Buyer shall warrant that it has
sole record and Beneficial Ownership of such certificates and that the same are
free and clear of all liens, claims, charges, restrictions and encumbrances of
any kind whatsoever.
(c) In determining the Market/Tender Offer Price, the value of any
consideration other than cash shall be determined by an independent nationally
recognized investment banking firm selected by Buyer and reasonably acceptable
to Selling Stockholder.
8. Repurchase at Option of Selling Stockholder and First Refusal.
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(a) Except to the extent that Buyer shall have previously exercised its
rights under Section 7, at the request of Selling Stockholder during the six-
month period commencing 13 months following the first occurrence of a Purchase
Event, Selling Stockholder may repurchase from Buyer, and Buyer shall sell to
Selling Stockholder, all (but not less than all, subject to Section 10) of the
BUCs acquired by Buyer pursuant hereto and with respect to which Buyer has
Beneficial Ownership at the time of such repurchase at a price per unit equal to
the greater of (i) 110% of
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the Market/Tender Offer Price per BUC, (ii) the Per Unit Repurchase Price or
(iii) the sum of (A) the aggregate Purchase Price of the BUCs so repurchased
plus (B) interest on the aggregate Purchase Price paid for the BUCs so
repurchased from the date of purchase to the date of repurchase at the highest
rate of interest announced by Buyer Bank as its prime or base lending or
reference rate during such period, less any dividends received on the BUCs so
repurchased, plus (C) Buyer's reasonable out-of-pocket expenses incurred in
connection with the transactions contemplated by the Agreement, including,
without limitation, legal, accounting and investment banking fees. Any
repurchase under this Section 8(a) shall be consummated in accordance with
Section 7(b).
(b) If, at any time after the occurrence of a Purchase Event and prior to
the earlier of (i) the expiration of 18 months immediately following such
Purchase Event or (ii) the expiration or termination of the Option, Buyer shall
desire to sell, assign, transfer or otherwise dispose of the Option or all or
any of the BUCs acquired by it pursuant to the Option, it shall give Selling
Stockholder written notice of the proposed transaction (an "Offeror's Notice"),
identifying the proposed transferee, and setting forth the terms of the proposed
transaction. An Offeror's Notice shall be deemed an offer by Buyer to Selling
Stockholder, which may be accepted within ten business days of the receipt of
such Offeror's Notice, on the same terms and conditions and at the same price at
which Buyer is proposing to transfer the Option or such BUCs to a third party.
The purchase of the Option or any such BUCs by Selling Stockholder shall be
closed within ten business days of the date of the acceptance of the offer and
the purchase
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price shall be paid to Buyer by wire transfer of immediately available funds to
an account designated by Buyer. In the event of the failure or refusal of
Selling Stockholder to purchase the Option or all the BUCs covered by the
Offeror's Notice or if any Regulatory Authority disapproves Selling
Stockholder's proposed purchase of the Option or such BUCs, Buyer may, within 60
days from the date of the Offeror's Notice, sell all, but not less than all, of
the Option or such BUCs to such third party at no less than the price specified
and on terms no more favorable to the purchaser than those set forth in the
Offeror's Notice. The requirements of this Section 8(b) shall not apply to (i)
any disposition as a result of which the proposed transferee would Beneficially
Own not more than 2% of the voting power of Selling Stockholder or (ii) any
disposition of BUCs by a person to whom Buyer has sold BUCs issued upon exercise
of the Option.
9. Registration Rights.
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At any time after a Purchase Event, Selling Stockholder shall, if requested
by any holder or beneficial owner of BUCs issued upon exercise of the Option
(except any beneficial holder who acquired all of such holder's BUCs in a
transaction exempt from the requirements of Section 8(b) by reason of clause (i)
thereof) (each a "Holder"), as expeditiously as possible file a registration
statement on a form for general use under the Securities Act if necessary in
order to permit the sale or other disposition of the BUCs that have been
acquired upon exercise of the Option in accordance with the intended method of
sale or other disposition requested by any such Holder (it being understood and
agreed that any such sale or other disposition shall be effected on a widely
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distributed basis so that, upon consummation thereof, no purchaser or transferee
shall Beneficially Own more than 2% of the BUCs then outstanding). Each such
Holder shall provide all information reasonably requested by Selling Stockholder
for inclusion in any registration statement to be filed hereunder. Selling
Stockholder shall use its best efforts to cause such registration statement
first 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 as may be reasonably necessary to effect such sales or other
dispositions. The registration effected under this Section 9 shall be at
Selling Stockholder's expense except for underwriting commissions and the fees
and disbursements of such Holders' counsel attributable to the registration of
such BUCs. In no event shall Selling Stockholder be required to effect more
than one registration hereunder. The filing of the registration statement
hereunder may be delayed for such period of time as may reasonably be required
to facilitate any public distribution by Selling Stockholder of BUCs or if a
special audit of Selling Stockholder would otherwise be required in connection
therewith. If requested by any such Holder in connection with such
registration, Selling Stockholder shall become a party to any underwriting
agreement relating to the sale of such certificates, but only to the extent of
obligating itself in respect of representations, warranties, indemnities and
other agreements customarily included in such underwriting agreements for
parties similarly situated. Upon receiving any request for registration under
this Section 9 from any Holder, Selling Stockholder agrees to send a copy
thereof to any other person known to Selling
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Stockholder to be entitled to registration rights under this Section 9, in each
case by promptly mailing the same, postage prepaid, to the address of record of
the persons entitled to receive such copies.
10. Severability.
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Any term, provision, covenant or restriction contained in this Option
Agreement held by a court or a Regulatory Authority of competent jurisdiction to
be invalid, void or unenforceable, shall be ineffective to the extent of such
invalidity, voidness or unenforceability, but neither the remaining terms,
provisions, covenants or restrictions contained in this Option Agreement nor the
validity or enforceability thereof in any other jurisdiction shall be affected
or impaired thereby. Any term, provision, covenant or restriction contained in
this Option Agreement that is so found to be so broad as to be unenforceable
shall be interpreted to be as broad as is enforceable. If for any reason such
court or Regulatory Authority determines that applicable law will not permit
Buyer or any other person to acquire, or Selling Stockholder to repurchase or
purchase, the full number of BUCs provided in Section 2 hereof (as adjusted
pursuant to Section 6 hereof), it is the express intention of the parties hereto
to allow Buyer or such other person to acquire, or Selling Stockholder to
repurchase or purchase, such lesser number BUCs as may be permissible, without
any amendment or modification hereof.
11. Miscellaneous.
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(a) Expenses. Each of the parties hereto shall pay all costs and expenses
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incurred by it or on its behalf in connection with the transactions contemplated
hereunder, including fees and expenses of
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its own financial consultants, investment bankers, accountants and counsel,
except as otherwise provided herein.
(b) Entire Agreement. Except as otherwise expressly provided herein, this
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Option Agreement and the Agreement contain 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.
(c) Successors; No Third Party Beneficiaries. The terms and conditions of
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this Option Agreement shall inure to the benefit of and be binding upon the
parties hereto and their respective successors and permitted assigns. Nothing
in this Option Agreement, expressed or implied, is intended to confer upon any
party, other than the parties hereto, and their respective successors and
assigns, any rights, remedies, obligations, or liabilities under or by reason of
this Option Agreement, except as expressly provided herein.
(d) Assignment. Other than as provided in Sections 8 and 9 hereof, neither
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of the parties hereto may sell, transfer, assign or otherwise dispose of any of
its rights or obligations under this Option Agreement or the Option created
hereunder to any other person (whether by operation of law or otherwise),
without the express written consent of the other party.
(e) Notices. All notices or other communications which are required or
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permitted hereunder shall be in writing and sufficient if delivered in
accordance with Section 8.02 of the Agreement (which is incorporated herein by
reference).
(f) Counterparts. This Option Agreement may be executed in counterparts,
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and each such counterpart shall be deemed to be an
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original instrument, but both such counterparts together shall constitute but
one agreement.
(g) Specific Performance. The parties hereto agree that if for any reason
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Buyer or Selling Stockholder shall have failed to perform its obligations under
this Option Agreement, then either party hereto seeking to enforce this Option
Agreement against such non-performing party shall be entitled to specific
performance and injunctive and other equitable relief, and the parties hereto
further agree to waive any requirement for the securing or posting of any bond
in connection with the obtaining of any such injunctive or other equitable
relief. This provision is without prejudice to any other rights that either
party hereto may have against the other party hereto for any failure to perform
its obligations under this Option Agreement.
(h) Governing Law. This Option Agreement shall be governed by and
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construed in accordance with the laws of the State of Delaware applicable to
agreements made and entirely to be performed within such state. Nothing in this
Option Agreement shall be construed to require any party (or any subsidiary or
affiliate of any party) to take any action or fail to take any action in
violation of applicable law, rule or regulation.
(i) Regulatory Approvals; Section 16(b). If, in connection with (A) the
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exercise of the Option under Section 3 or a sale by Buyer to a third party under
Section 8, (B) a repurchase by Selling Stockholder under Section 7 or a
repurchase or purchase by Selling Stockholder under Section 8, prior
notification to or approval of the OTS or any other Regulatory Authority is
required, then the required notice or application for approval shall be promptly
filed
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and expeditiously processed and periods of time that otherwise would run
pursuant to such Sections shall run instead from the date on which any such
required notification period has expired or been terminated or such approval has
been obtained, and in either event, any requisite waiting period shall have
passed. In the case of clause (A) of this subsection (i), such filing shall be
made by Buyer, and in the case of clause (B) of this subsection (i), such filing
shall be made by Selling Stockholder, provided that each of Buyer and Selling
Stockholder shall use its best efforts to make all filings with, and to obtain
consents of, all third parties and Regulatory Authorities necessary to the
consummation of the transactions contemplated hereby. Periods of time that
otherwise would run pursuant to Sections 3, 7 or 8 shall also be extended to the
extent necessary to avoid liability under Section 16(b) of the Exchange Act.
(j) No Breach of Agreement Authorized. Nothing contained in this Option
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Agreement shall be deemed to authorize Selling Stockholder to issue any BUCs in
breach of, or otherwise breach any of, the provisions of the Agreement.
(k) Waiver and Amendment. Any provision of this Agreement may be waived at
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any time by the party that is entitled to the benefits of such provision. This
Option Agreement may not be modified, amended, altered or supplemented except
upon the execution and delivery of a written agreement executed by the parties
hereto.
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IN WITNESS WHEREOF, each of the parties hereto has executed this Option
Agreement as of the date first written above.
BAY VIEW CAPITAL CORPORATION
By:/s/ Xxxxxx X. Xxxxxxx
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Name: Xxxxxx X. Xxxxxxx
Title: President and Chief
Executive Officer
AMERICA FIRST FINANCIAL FUND
1987-A LIMITED PARTNERSHIP
By: American First Capital
Associates Limited Partnership
Five, a general partner
By: AFCA-5 Management
Corporation, a
general partner
By:/s/ Xxxxxx X. Xxxxxx
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Name: Xxxxxx X. Xxxxxx
Title: Chairman of the Board and
Secretary
AMERICA FIRST CAPITAL ASSOCIATES
LIMITED PARTNERSHIP FIVE
By: AFCA-5 Management Corporation,
a general partner
By:/s/ Xxxxxx X. Xxxxxx
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Name: Xxxxxx X. Xxxxxx
Title: Chairman of the Board and
Secretary
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