AGREEMENT AND PLAN OF MERGER
Between
NORTH FORK BANCORPORATION, INC.
and
RELIANCE BANCORP, INC.
Dated as of August 30, 1999
TABLE of CONTENTS
Page
ARTICLE I
THE MERGER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.1. The Merger . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.2. Effective Time . . . . . . . . . . . . . . . . . . . . . . . . 2
1.3. Effects of the Merger . . . . . . . . . . . . . . . . . . . . 2
1.4. Conversion of Company Common Stock . . . . . . . . . . . . . . 2
1.5. Stock Options . . . . . . . . . . . . . . . . . . . . . . . . 3
1.6. Buyer Common Stock . . . . . . . . . . . . . . . . . . . . . . 5
1.7. Certificate of Incorporation . . . . . . . . . . . . . . . . . 5
1.8. By-Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
1.9. Directors and Officers . . . . . . . . . . . . . . . . . . . . 5
1.10. Tax Consequences . . . . . . . . . . . . . . . . . . . . . . 5
ARTICLE II
EXCHANGE OF SHARES . . . . . . . . . . . . . . . . . . . . . . . . 5
2.1. Buyer to Make Shares Available . . . . . . . . . . . . . . . . 5
2.2. Exchange of Shares . . . . . . . . . . . . . . . . . . . . . . 6
ARTICLE III
DISCLOSURE SCHEDULES; STANDARDS
FOR REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . . . . . 9
3.1. Disclosure Schedules . . . . . . . . . . . . . . . . . . . . . 9
3.2. Standards . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE COMPANY . . . . . . . . . . 10
4.1. Corporate Organization . . . . . . . . . . . . . . . . . . . 11
4.2. Capitalization . . . . . . . . . . . . . . . . . . . . . . . 12
4.3. Authority; No Violation . . . . . . . . . . . . . . . . . . 13
4.4. Consents and Approvals . . . . . . . . . . . . . . . . . . . 15
4.5. Reports . . . . . . . . . . . . . . . . . . . . . . . . . . 16
4.6. Financial Statements . . . . . . . . . . . . . . . . . . . . 16
4.7. Broker's Fees . . . . . . . . . . . . . . . . . . . . . . . 18
4.8. Absence of Certain Changes or Events . . . . . . . . . . . . 18
4.9. Legal Proceedings . . . . . . . . . . . . . . . . . . . . . 19
4.10. Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
4.11. Employees . . . . . . . . . . . . . . . . . . . . . . . . . 21
4.12. SEC Reports. . . . . . . . . . . . . . . . . . . . . . . . 23
4.13. Company Information. . . . . . . . . . . . . . . . . . . . 23
4.14. Compliance with Applicable Law . . . . . . . . . . . . . . 24
4.15. Certain Contracts. . . . . . . . . . . . . . . . . . . . . 24
4.16. Agreements with Regulatory Agencies . . . . . . . . . . . . 25
4.17. Investment Securities . . . . . . . . . . . . . . . . . . . 25
4.18. State Takeover Laws; Business Combination Provision. . . . 25
4.19. Environmental Matters . . . . . . . . . . . . . . . . . . . 26
4.20. Derivative Transactions. . . . . . . . . . . . . . . . . . 27
4.21. Opinion. . . . . . . . . . . . . . . . . . . . . . . . . . 27
4.22. Approvals. . . . . . . . . . . . . . . . . . . . . . . . . 28
4.23. Loan Portfolio. . . . . . . . . . . . . . . . . . . . . . . 28
4.24. Property . . . . . . . . . . . . . . . . . . . . . . . . . 29
4.25. Reorganization . . . . . . . . . . . . . . . . . . . . . . 30
4.26. Company Rights Agreement . . . . . . . . . . . . . . . . . 30
4.27. Equity and Real Estate Investments . . . . . . . . . . . . 30
4.28. Year 2000 Matters . . . . . . . . . . . . . . . . . . . . . 30
ARTICLE V
REPRESENTATIONS AND WARRANTIES
OF BUYER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
5.1. Corporate Organization . . . . . . . . . . . . . . . . . . . 31
5.2. Capitalization . . . . . . . . . . . . . . . . . . . . . . . 32
5.3. Authority; No Violation . . . . . . . . . . . . . . . . . . 33
5.4. Consents and Approvals . . . . . . . . . . . . . . . . . . . 34
5.5. Reports . . . . . . . . . . . . . . . . . . . . . . . . . . 35
5.6. Financial Statements . . . . . . . . . . . . . . . . . . . . 35
5.7. Broker's Fees . . . . . . . . . . . . . . . . . . . . . . . 36
5.8. Absence of Certain Changes or Events . . . . . . . . . . . . 37
5.9. Legal Proceedings . . . . . . . . . . . . . . . . . . . . . 37
5.10. Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
5.11. Employees . . . . . . . . . . . . . . . . . . . . . . . . . 38
5.12. SEC Reports . . . . . . . . . . . . . . . . . . . . . . . . 40
5.13. Buyer Information . . . . . . . . . . . . . . . . . . . . . 41
5.14. Compliance with Applicable Law . . . . . . . . . . . . . . 41
5.15. Ownership of Company Common Stock . . . . . . . . . . . . . 41
5.16. Agreements with Regulatory Agencies . . . . . . . . . . . . 42
5.17. Approvals . . . . . . . . . . . . . . . . . . . . . . . . . 42
5.18. Tax Treatment for the Merger;
Reorganization . . . . . . . . . . . . . . . . . . . . . 42
5.19. Environmental Matters . . . . . . . . . . . . . . . . . . . 42
5.20. Loan Portfolio. . . . . . . . . . . . . . . . . . . . . . . 43
5.21. Property . . . . . . . . . . . . . . . . . . . . . . . . . 44
5.22. Derivative Transactions. . . . . . . . . . . . . . . . . . 45
5.23. Year 2000 Matters . . . . . . . . . . . . . . . . . . . . . 45
5.24. Insurance . . . . . . . . . . . . . . . . . . . . . . . . . 45
ARTICLE VI
COVENANTS RELATING TO CONDUCT OF BUSINESS. . . . . . . . . . . . .
6.1. Covenants of the Company . . . . . . . . . . . . . . . . . . 46
6.2. Covenants of Buyer . . . . . . . . . . . . . . . . . . . . . 50
ARTICLE VII
ADDITIONAL AGREEMENTS . . . . . . . . . . . . . . . . . . . . . .
7.1. Regulatory Matters. . . . . . . . . . . . . . . . . . . . . 51
7.2. Access to Information . . . . . . . . . . . . . . . . . . . 53
7.3. Stockholder Meetings . . . . . . . . . . . . . . . . . . . . 55
7.4. Legal Conditions to Merger . . . . . . . . . . . . . . . . . 55
7.5. Affiliates . . . . . . . . . . . . . . . . . . . . . . . . . 56
7.6. Stock Exchange Listing . . . . . . . . . . . . . . . . . . . 56
7.7. Employee Benefit Plans; Existing Agreements . . . . . . . . 56
7.8. Indemnification . . . . . . . . . . . . . . . . . . . . . . 58
7.9. Additional Agreements . . . . . . . . . . . . . . . . . . . 61
7.10. Advice of Changes . . . . . . . . . . . . . . . . . . . . . 61
7.11. Current Information . . . . . . . . . . . . . . . . . . . . 61
7.12. Execution and Authorization of Bank Merger Agreement . . . 62
7.13. Coordination of Dividends . . . . . . . . . . . . . . . . . 62
7.14. Directorship . . . . . . . . . . . . . . . . . . . . . . . 63
7.15. Accountants' Letter . . . . . . . . . . . . . . . . . . . . 63
7.16. Certain Revaluations, Changes and Adjustments . . . . . . . 63
7.17. Year 2000 . . . . . . . . . . . . . . . . . . . . . . . . . 64
7.19. Advisory Board . . . . . . . . . . . . . . . . . . . . . . 64
ARTICLE VIII
CONDITIONS PRECEDENT . . . . . . . . . . . . . . . . . . . . . . . 64
8.1. Conditions to Each Party's Obligation To Effect the Merger . 64
8.2. Conditions to Obligations of Buyer . . . . . . . . . . . . . 65
8.3. Conditions to Obligations of the Company . . . . . . . . . . 67
ARTICLE IX
TERMINATION AND AMENDMENT. . . . . . . . . . . . . . . . . . . . . 68
9.1. Termination . . . . . . . . . . . . . . . . . . . . . . . . 68
9.2. Effect of Termination; Expenses . . . . . . . . . . . . . . 73
9.3. Amendment . . . . . . . . . . . . . . . . . . . . . . . . . 73
9.4. Extension; Waiver . . . . . . . . . . . . . . . . . . . . . 74
ARTICLE X
GENERAL PROVISIONS . . . . . . . . . . . . . . . . . . . . . . . . 74
10.1. Closing . . . . . . . . . . . . . . . . . . . . . . . . . . 74
10.2. Alternative Structure . . . . . . . . . . . . . . . . . . . 75
10.3. Nonsurvival of Representations, Warranties and Agreements . 75
10.4. Expenses . . . . . . . . . . . . . . . . . . . . . . . . . 75
10.5. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . 75
10.6. Interpretation . . . . . . . . . . . . . . . . . . . . . . 77
10.7. Counterparts . . . . . . . . . . . . . . . . . . . . . . . 77
10.8. Entire Agreement . . . . . . . . . . . . . . . . . . . . . 77
10.9. Governing Law . . . . . . . . . . . . . . . . . . . . . . . 77
10.10. Enforcement of Agreement . . . . . . . . . . . . . . . . . 77
10.11. Severability . . . . . . . . . . . . . . . . . . . . . . . 78
10.12. Publicity . . . . . . . . . . . . . . . . . . . . . . . . 78
10.13. Assignment; No Third Party Beneficiaries . . . . . . . . . 78
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER, dated as of August 30, 1999 (this
"Agreement"), by and between North Fork Bancorporation, Inc., a Delaware
corporation ("Buyer"), and Reliance Bancorp, Inc., a Delaware corporation
(the "Company"). Buyer and the Company are sometimes collectively referred
to herein as the "Constituent Corporations".
WHEREAS, the Boards of Directors of Buyer and the Company have
determined that it is in the best interests of their respective companies
and their stockholders to consummate the business combination transaction
provided for herein in which the Company will, subject to the terms and
conditions set forth herein, merge (the "Merger") with and into Buyer; and
WHEREAS, the parties desire to make certain representations,
warranties and agreements in connection with the Merger and also to
prescribe certain conditions to the Merger.
NOW, THEREFORE, in consideration of the mutual covenants,
representations, warranties and agreements contained herein, and intending
to be legally bound hereby, the parties agree as follows:
ARTICLE I
THE MERGER
1.1. The Merger. Subject to the terms and conditions of this
Agreement, in accordance with the Delaware General Corporation Law (the
"DGCL"), at the Effective Time (as defined in Section 1.2 hereof), the
Company shall merge with and into Buyer. Buyer shall be the surviving
corporation (hereinafter sometimes called the "Surviving Corporation") in
the Merger, and shall continue its corporate existence under the laws of
the State of Delaware. The name of the Surviving Corporation shall
continue to be North Fork Bancorporation, Inc. Upon consummation of the
Merger, the separate corporate existence of the Company shall terminate.
1.2. Effective Time. The Merger shall become effective as set
forth in the certificate of merger (the "Certificate of Merger") which
shall be filed with the Secretary of State of the State of Delaware (the
"Secretary") on the Closing Date (as defined in Section 10.1 hereof). The
term "Effective Time" shall be the date and time when the Merger becomes
effective, as set forth in the Certificate of Merger.
1.3. Effects of the Merger. At and after the Effective Time,
the Merger shall have the effects set forth in Sections 259 and 261 of the
DGCL.
1.4. Conversion of Company Common Stock. (a) At the Effective
Time, subject to Section 2.2(e) and Section 9.1(h) hereof, each share of
the common stock, par value $0.01 per share, of the Company (the "Company
Common Stock") issued and outstanding immediately prior to the Effective
Time (other than (x) shares of Company Common Stock held in the Company's
treasury, (y) shares of Company Common Stock held directly or indirectly
by Buyer or the Company or any of their respective Subsidiaries (as
defined below) (except for Trust Account Shares and DPC shares, as such
terms are defined in Section 1.4(b) hereof), or (z) unallocated shares of
Company Common Stock held in the Company's Recognition and Retention
Plans) together with the related Company Rights issued pursuant to the
Company Rights Agreement (each as defined in Section 4.2(a) hereof) shall,
by virtue of this Agreement and without any action on the part of the
holder thereof, be converted into and exchangeable for 2 (two) shares (the
"Exchange Ratio") of the common stock, par value $2.50 per share, of Buyer
("Buyer Common Stock"). All of the shares of Company Common Stock
converted into Buyer Common Stock pursuant to this Article I shall no
longer be outstanding and shall automatically be cancelled and shall cease
to exist, and each certificate (each a "Certificate") previously
representing any such shares of Company Common Stock shall thereafter only
represent the right to receive (i) the number of whole shares of Buyer
Common Stock and (ii) the cash in lieu of fractional shares into which the
shares of Company Common Stock represented by such Certificate have been
converted pursuant to this Section 1.4(a) and Section 2.2(e) hereof.
Certificates previously representing shares of Company Common Stock shall
be exchanged for certificates representing whole shares of Buyer Common
Stock and cash in lieu of fractional shares issued in consideration
therefor upon the surrender of such Certificates in accordance with
Section 2.2 hereof, without any interest thereon. If, between the date of
this Agreement and the Effective Time, the shares of Buyer Common Stock
shall be changed into a different number or class of shares by reason of
any reclassification, recapitalization, spilt-up, combination, exchange of
shares or readjustment, or a stock dividend thereon shall be declared with
a record date within said period, the Exchange Ratio shall be adjusted
accordingly.
(b) At the Effective Time, all shares of Company Common
Stock that are owned by the Company as treasury stock, all shares of
Company Common Stock that are owned directly or indirectly by Buyer or the
Company or any of their respective Subsidiaries (other than shares of
Company Common Stock (x) held directly or indirectly in trust accounts,
managed accounts and the like or otherwise held in a fiduciary capacity for
the benefit of third parties (any such shares, and shares of Buyer Common
Stock which are similarly held, whether held directly or indirectly by
Buyer or the Company, as the case may be, being referred to herein as
"Trust Account Shares") and (y) held by Buyer or the Company or any of
their respective Subsidiaries in respect of a debt previously contracted
(any such shares of Company Common Stock, and shares of Buyer Common Stock
which are similarly held, whether held directly or indirectly by Buyer or
the Company, being referred to herein as "DPC Shares") and all unallocated
shares of Company Common Stock that are held in the Company's Recognition
and Retention Plans) shall be cancelled and shall cease to exist and no
stock of Buyer or other consideration shall be delivered in exchange
therefor. All shares of Buyer Common Stock that are owned by the Company
or any of its Subsidiaries (other than Trust Account Shares and DPC Shares)
shall become treasury stock of Buyer.
1.5. Stock Options. At the Effective Time, each option granted
by the Company to purchase shares of Company Common Stock (a "Company
Option") which is outstanding and unexercised immediately prior thereto
shall cease to represent a right to acquire shares of Company Common Stock
and shall be converted automatically into an option to purchase shares of
Buyer Common Stock in an amount and at an exercise price determined as
provided below (and otherwise subject to the terms of the Company's Amended
and Restated 1996 Incentive Stock Option Plan, 1994 Incentive Stock Option
Plan or Amended and Restated 1994 Stock Option Plan for Outside Directors
(collectively, the "Company Option Plans"), the agreements evidencing
grants thereunder, and any other agreements between the Company and an
optionee regarding Company Options):
(1) the number of shares of Buyer Common Stock to be
subject to the new option shall be equal to the product of the
number of shares of Company Common Stock subject to the original
option and the Exchange Ratio, provided that any fractional share
of Buyer Common Stock resulting from such multiplication shall be
rounded down to the nearest whole share; and
(2) the exercise price per share of Buyer Common Stock
under the new option shall be equal to the exercise price per
share of Company Common Stock under the original option divided
by the Exchange Ratio, provided that such exercise price shall be
rounded up to the nearest cent.
The adjustment provided herein with respect to any options which are
intended to be "incentive stock options" (as defined in Section 422 of the
Internal Revenue Code of 1986, as amended (the "Code")) shall be and is
intended to be effected in a manner which is consistent with Section 424(a)
of the Code, and to the extent it is not so consistent, such Section 424(a)
shall override such adjustment. The duration and other terms of the new
option shall be the same as the original option, except that all references
to the Company shall be deemed to be references to Buyer, it being
understood that any option that is intended to be an incentive stock option
and which is exercised by the option holder more than 3 (three) months from
the date of the option holder's termination of employment from the Company
or its Subsidiaries or from Buyer or its Subsidiaries shall be treated as a
non-statutory option.
1.6. Buyer Common Stock. Except for shares of Buyer Common
Stock owned by the Company or any of its Subsidiaries (other than Trust
Account Shares and DPC Shares), which shall be converted into treasury
stock of Buyer as contemplated by Section 1.4 hereof, the shares of Buyer
Common Stock issued and outstanding immediately prior to the Effective Time
shall be unaffected by the Merger and such shares shall remain issued and
outstanding.
1.7. Certificate of Incorporation. At the Effective Time, the
Restated Certificate of Incorporation of Buyer, as in effect at the
Effective Time, shall be the Certificate of Incorporation of the Surviving
Corporation.
1.8. By-Laws. At the Effective Time, the By-Laws of Buyer, as
in effect immediately prior to the Effective Time, shall be the By-Laws of
the Surviving Corporation until thereafter amended in accordance with
applicable law.
1.9. Directors and Officers. Except as provided in Section 7.14
hereof, the directors and officers of Buyer immediately prior to the
Effective Time shall be the directors and officers of the Surviving
Corporation, each to hold office in accordance with the Certificate of
Incorporation and By-Laws of the Surviving Corporation until their
respective successors are duly elected or appointed and qualified.
1.10. Tax Consequences. It is intended that the Merger shall
constitute a reorganization within the meaning of Section 368(a) of the
Code, and that this Agreement shall constitute a "plan of reorganization"
for the purposes of Section 368 of the Code.
ARTICLE II
EXCHANGE OF SHARES
2.1. Buyer to Make Shares Available. At or prior to the
Effective Time, Buyer shall deposit, or shall cause to be deposited, with a
bank or trust company (which may be a Subsidiary of Buyer) (the "Exchange
Agent") selected by Buyer and reasonably satisfactory to the Company, for
the benefit of the holders of Certificates, for exchange in accordance with
this Article II, certificates representing the shares of Buyer Common Stock
and the cash in lieu of fractional shares (such cash and certificates for
shares of Buyer Common Stock, together with any dividends or distributions
with respect thereto, being hereinafter referred to as the "Exchange Fund")
to be issued pursuant to Section 1.4 and paid pursuant to Section 2.2(a) in
exchange for outstanding shares of Company Common Stock.
2.2. Exchange of Shares. (a) As soon as practicable after the
Effective Time, and in no event more than three business days thereafter,
the Exchange Agent shall mail to each holder of record of a Certificate or
Certificates a form letter of transmittal (which shall specify that
delivery shall be effected, and risk of loss and title to the Certificates
shall pass, only upon delivery of the Certificates to the Exchange Agent)
and instructions for use in effecting the surrender of the Certificates in
exchange for certificates representing the shares of Buyer Common Stock and
the cash in lieu of fractional shares into which the shares of Company
Common Stock represented by such Certificate or Certificates shall have
been converted pursuant to this Agreement. Upon surrender of a Certificate
for exchange and cancellation to the Exchange Agent, together with such
letter of transmittal, duly executed, the holder of such Certificate shall
be entitled to receive in exchange therefor (x) a certificate representing
that number of whole shares of Buyer Common Stock to which such holder of
Company Common Stock shall have become entitled pursuant to the provisions
of Article I hereof and (y) a check representing the amount of cash in lieu
of fractional shares, if any, which such holder has the right to receive in
respect of the Certificate surrendered pursuant to the provisions of this
Article II, and the Certificate so surrendered shall forthwith be
cancelled. No interest will be paid or accrued on the cash in lieu of
fractional shares and unpaid dividends and distributions, if any, payable
to holders of Certificates.
(b) No dividends or other distributions declared after the
Effective Time with respect to Buyer Common Stock and payable to the
holders of record thereof shall be paid to the holder of any unsurrendered
Certificate until the holder thereof shall surrender such Certificate in
accordance with this Article II. After the surrender of a Certificate in
accordance with this Article II, the record holder thereof shall be
entitled to receive any such dividends or other distributions, without any
interest thereon, which theretofore had become payable with respect to
shares of Buyer Common Stock represented by such Certificate. No holder of
an unsurrendered Certificate shall be entitled, until the surrender of such
Certificate, to vote the shares of Buyer Common Stock into which his
Company Common Stock shall have been converted.
(c) If any certificate representing shares of Buyer Common
Stock is to be issued in a name other than that in which the Certificate
surrendered in exchange therefor is registered, it shall be a condition of
the issuance thereof that the Certificate so surrendered shall be properly
endorsed (or accompanied by an appropriate instrument of transfer) and
otherwise in proper form for transfer, and that the person requesting such
exchange shall pay to the Exchange Agent in advance any transfer or other
taxes required by reason of the issuance of a certificate representing
shares of Buyer Common Stock in any name other than that of the registered
holder of the Certificate surrendered, or required for any other reason, or
shall establish to the satisfaction of the Exchange Agent that such tax has
been paid or is not payable.
(d) After the Effective Time, there shall be no transfers
on the stock transfer books of the Company of the shares of Company Common
Stock which were issued and outstanding immediately prior to the Effective
Time. If, after the Effective Time, Certificates representing such shares
are presented for transfer to the Exchange Agent, they shall be cancelled
and exchanged for certificates representing shares of Buyer Common Stock as
provided in this Article II.
(e) Notwithstanding anything to the contrary contained
herein, no certificates or scrip representing fractional shares of Buyer
Common Stock shall be issued upon the surrender for exchange of
Certificates, no dividend or distribution with respect to Buyer Common
Stock shall be payable on or with respect to any fractional share, and such
fractional share interests shall not entitle the owner thereof to vote or
to any other rights of a shareholder of Buyer. In lieu of the issuance of
any such fractional share, Buyer shall pay to each former stockholder of
the Company who otherwise would be entitled to receive a fractional share
of Buyer Common Stock an amount in cash determined by multiplying (i) the
average of the closing sale prices of Buyer Common Stock on the New York
Stock Exchange (the "NYSE") as reported by The Wall Street Journal for the
five trading days immediately preceding the date on which the Effective
Time shall occur by (ii) the fraction of a share of Buyer Common Stock to
which such holder would otherwise be entitled to receive pursuant to
Section 1.4 hereof.
(f) Any portion of the Exchange Fund that remains unclaimed
by the stockholders of the Company for six months after the Effective Time
shall be paid to Buyer. Any stockholders of the Company who have not
theretofore complied with this Article II shall thereafter look only to
Buyer for payment of their shares of Buyer Common Stock, cash in lieu of
fractional shares and unpaid dividends and distributions on the Buyer
Common Stock deliverable in respect of each share of Company Common Stock
such stockholder holds as determined pursuant to this Agreement, in each
case, without any interest thereon. Notwithstanding the foregoing, none of
Buyer, the Company, the Exchange Agent or any other person shall be liable
to any former holder of shares of Company Common Stock for any amount
properly delivered to a public official pursuant to applicable abandoned
property, escheat or similar laws.
(g) In the event any Certificate shall have been lost,
stolen or destroyed, upon the making of an affidavit of that fact by the
person claiming such Certificate to be lost, stolen or destroyed and, if
required by Buyer, the posting by such person of a bond in such amount as
Buyer may direct as indemnity against any claim that may be made against it
with respect to such Certificate, the Exchange Agent will issue in exchange
for such lost, stolen or destroyed Certificate the shares of Buyer Common
Stock and cash in lieu of fractional shares deliverable in respect thereof
pursuant to this Agreement.
ARTICLE III
DISCLOSURE SCHEDULES; STANDARDS
FOR REPRESENTATIONS AND WARRANTIES
3.1. Disclosure Schedules. Prior to the execution and delivery
of this Agreement, the Company has delivered to Buyer, and Buyer has
delivered to the Company, a schedule (in the case of the Company, the
"Company Disclosure Schedule," and in the case of Buyer, the "Buyer
Disclosure Schedule") setting forth, among other things, items the
disclosure of which is necessary or appropriate either in response to an
express disclosure requirement contained in a provision hereof or as an
exception to one or more of such party's representations or warranties
contained in Article IV, in the case of the Company, or Article V, in the
case of Buyer, or to one or more of such party's covenants contained in
Article VI; provided, however, that notwithstanding anything in this
Agreement to the contrary (a) no such item is required to be set forth in
the Disclosure Schedule as an exception to a representation or warranty
(other than a representation or warranty contained in Sections 4.2, 4.3(a),
4.3(b)(i), 4.6, 4.7, 4.8(a)(ii), 4.8(b), 4.11(a), 4.12, 4.15(a), 4.18,
4.21, 4.26 and 4.27, with respect to the Company Disclosure Schedule, or
Sections 5.2, 5.3(a), 5.3(b), 5.3(c)(i), 5.6, 5.7, 5.8(ii), 5.11(a) 5.12
and 5.15, with respect to the Buyer Disclosure Schedule) if its absence
would not result in the related representation or warranty being deemed
untrue or incorrect under the standard established by Section 3.2, and (b)
the mere inclusion of an item in a Disclosure Schedule as an exception to a
representation or warranty shall not be deemed an admission by a party that
such item represents a material exception or material fact, event or
circumstance or that such item has had or is reasonably likely to have a
Material Adverse Effect (as defined herein) with respect to either the
Company or Buyer, respectively.
3.2. Standards. (a) No representation or warranty of the
Company contained in Article IV (other than the representations and
warranties contained in Sections 4.2, 4.3(a), 4.3(b)(i), 4.6, 4.7,
4.8(a)(ii), 4.8(b), 4.11(a), 4.12, 4.15(a), 4.18, 4.21, 4.26 and 4.27) or
of Buyer contained in Article V (other than the representations and
warranties contained in Sections 5.2, 5.3(a), 5.3(b), 5.3(c)(i), 5.6, 5.7,
5.8(ii), 5.11(a), 5.12 and 5.15) shall be deemed untrue or incorrect for
any purpose under this Agreement, and no party hereto shall be deemed to
have breached any such representation or warranty for any purpose under
this Agreement, in any case as a consequence of the existence or absence of
any fact, circumstance or event unless such fact, circumstance or event,
individually or when taken together with all other facts, circumstances or
events inconsistent with any representations or warranties contained in
Article IV, in the case of the Company, or Article V, in the case of Buyer,
has had or is reasonably likely to have a Material Adverse Effect with
respect to the Company or Buyer, respectively.
(b) As used in this Agreement, the term "Material Adverse
Effect" means, with respect to Buyer or the Company, as the case may be, a
material adverse effect on (i) the business, assets, liabilities, results
of operations or financial condition of such party and its Subsidiaries
taken as a whole, other than any such effect attributable to or resulting
from (x) any change in banking or similar laws, rules or regulations of
general applicability or interpretations thereof by courts or governmental
authorities, (y) any change in GAAP (as defined herein) or regulatory
accounting principles, in each case which affects banks, thrifts or their
holding companies generally, except to the extent any such condition or
change affects the referenced party to a materially greater extent than
banks, thrifts or their holding companies generally, or (z) any change in
interest rates, provided, that any such change in interest rates shall not
affect the referenced party to a materially greater extent than banks,
thrifts or their holding companies generally, and provided further, that
any such change shall not have a materially adverse effect on the credit
quality of such party's assets, or (ii) the ability of such party and its
Subsidiaries to consummate the transactions contemplated hereby.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Subject to Article III hereof and except as set forth in the
Company Disclosure Schedule, the Company hereby represents and warrants to
Buyer as follows:
4.1. Corporate Organization. (a) The Company is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Delaware. The Company has the corporate power and authority to
own or lease all of its properties and assets and to carry on its business
as it is now being conducted, and is duly licensed or qualified to do
business in each jurisdiction in which the nature of the business conducted
by it or the character or location of the properties and assets owned or
leased by it makes such licensing or qualification necessary. The Company
is duly registered as a non-diversified unitary savings and loan holding
company under the Home Owners' Loan Act of 1933, as amended. The Restated
Certificate of Incorporation and By-laws of the Company, copies of which
have previously been made available to Buyer, are true and correct copies
of such documents as in effect as of the date of this Agreement. As used
in this Agreement, the word "Subsidiary" when used with respect to any
party means any corporation, partnership or other organization, whether
incorporated or unincorporated, which is consolidated with such party for
financial reporting purposes.
(b) Reliance Federal Savings Bank (the "Company Bank") is a
stock savings bank duly organized, validly existing and in good standing
under the laws of the United States of America. The deposit accounts of
the Company Bank are insured by the Federal Deposit Insurance Corporation
(the "FDIC") through the Savings Association Insurance Fund to the fullest
extent permitted by law, and all premiums and assessments required to be
paid in connection therewith have been paid when due. Each of the
Company's other Subsidiaries is a corporation duly organized, validly
existing and in good standing under the laws of its jurisdiction of
incorporation or organization. Each of the Company's Subsidiaries has the
corporate power and authority to own or lease all of its properties and
assets and to carry on its business as it is now being conducted and is
duly licensed or qualified to do business in each jurisdiction in which the
nature of the business conducted by it or the character or the location of
the properties and assets owned or leased by it makes such licensing or
qualification necessary. The articles of incorporation, by-laws and
similar governing documents of each Subsidiary of the Company, copies of
which have previously been made available to Buyer, are true and correct
copies of such documents as in effect as of the date of this Agreement.
(c) The minute books of the Company and each of its
Subsidiaries contain true and correct records of all meetings and other
corporate actions held or taken since December 31, 1996 of their respective
stockholders and Boards of Directors (including committees of their
respective Boards of Directors).
4.2. Capitalization. (a) The authorized capital stock of the
Company consists of 20,000,000 shares of Company Common Stock and 4,000,000
shares of preferred stock, par value $.01 per share (the "Company Preferred
Stock"). As of the date of this Agreement, there are (x) 8,584,410 shares
of Company Common Stock outstanding and 2,166,410 shares of Company Common
Stock held in the Company's treasury, (y) no shares of Company Common Stock
reserved for issuance upon exercise of outstanding stock options or
otherwise except for (i) 1,080,876 shares of Company Common Stock reserved
for issuance pursuant to the Company Option Plans and described in Section
4.2(a) of the Company Disclosure Schedule, (ii) 1,708,297 shares of Company
Common Stock reserved for issuance upon exercise of the option issued to
Buyer pursuant to the Stock Option Agreement, dated August 30, 1999,
between Buyer and the Company (the "Option Agreement") and (iii)
approximately 25,000 shares of Company Common Stock issuable pursuant to an
agreement between the Company and Continental Bank and (z) no shares of
Company Preferred Stock issued or outstanding, held in the Company's
treasury or reserved for issuance upon exercise of outstanding stock
options or otherwise, except for [150,000] shares of Company Series A
Junior Participating Preferred Stock reserved for issuance upon exercise of
the rights (the "Company Rights") distributed to holders of Company Common
Stock pursuant to the Stockholder Protection Rights Agreement, dated
September 18, 1996 between the Company and Registrar and Transfer Co., as
Rights Agent (the "Company Rights Agreement"). All of the issued and
outstanding shares of Company Common Stock have been duly authorized and
validly issued and are fully paid, nonassessable and free of preemptive
rights, with no personal liability attaching to the ownership thereof.
Except as referred to above or reflected in Section 4.2(a) of the Company
Disclosure Schedule, and except for the Option Agreement, the Company does
not have and is not bound by any outstanding subscriptions, options,
warrants, calls, commitments or agreements of any character calling for the
purchase or issuance of any shares of Company Common Stock or Company
Preferred Stock or any other equity security of the Company or any
securities representing the right to purchase or otherwise receive any
shares of Company Common Stock or any other equity security of the Company.
The names of the optionees, the date of each option to purchase Company
Common Stock granted, the number of shares subject to each such option, the
expiration date of each such option, and the price at which each such
option may be exercised under the Company Option Plans are set forth in
Section 4.2(a) of the Company Disclosure Schedule.
(b) Section 4.2(b) of the Company Disclosure Schedule sets
forth a true and correct list of all of the Subsidiaries of the Company.
Except as set forth in Section 4.2(b) of the Company Disclosure Schedule,
the Company owns, directly or indirectly, all of the issued and outstanding
shares of the capital stock of each of such Subsidiaries, free and clear of
all liens, charges, encumbrances and security interests whatsoever, and all
of such shares are duly authorized and validly issued and are fully paid,
nonassessable and free of preemptive rights, with no personal liability
attaching to the ownership thereof. No Subsidiary of the Company has or is
bound by any outstanding subscriptions, options, warrants, calls,
commitments or agreements of any character calling for the purchase or
issuance of any shares of capital stock or any other equity security of
such Subsidiary or any securities representing the right to purchase or
otherwise receive any shares of capital stock or any other equity security
of such Subsidiary. Assuming compliance by Buyer with Section 1.5 hereof,
at the Effective Time, there will not be any outstanding subscriptions,
options, warrants, calls, commitments or agreements of any character by
which the Company or any of its Subsidiaries will be bound calling for the
purchase or issuance of any shares of the capital stock of the Company or
any of its Subsidiaries.
4.3. Authority; No Violation. (a) The Company has full
corporate power and authority to execute and deliver this Agreement and the
Option Agreement (this Agreement and the Option Agreement, collectively,
the "Company Documents") and to consummate the transactions contemplated
hereby and thereby. The execution and delivery of each of the Company
Documents and the consummation of the transactions contemplated hereby and
thereby have been duly and validly approved by the Board of Directors of
the Company. The Board of Directors of the Company has directed that this
Agreement and the transactions contemplated hereby be submitted to the
Company's stockholders for approval at a meeting of such stockholders and,
except for the approval and adoption of this Agreement by the affirmative
vote of the holders of a majority of the outstanding shares of the Company
Common Stock, no other corporate proceedings on the part of the Company are
necessary to approve the Company Documents and to consummate the
transactions contemplated hereby and thereby. Each of the Company
Documents has been duly and validly executed and delivered by the Company,
and (assuming due authorization, execution and delivery by Buyer) this
Agreement constitutes a valid and binding obligation of the Company,
enforceable against the Company in accordance with its terms, except as
enforcement may be limited by general principles of equity whether applied
in a court of law or a court of equity and by bankruptcy, insolvency and
similar laws affecting creditors' rights and remedies generally.
(b) Except as set forth in Section 4.3(b) of the Company
Disclosure Schedule, neither the execution and delivery of the Company
Documents by the Company, nor the consummation by the Company of the
transactions contemplated hereby, nor compliance by the Company with any of
the terms or provisions hereof, will (i) violate any provision of the
Certificate of Incorporation or By-Laws of the Company or the certificate
of incorporation, by-laws or similar governing documents of any of its
Subsidiaries, or (ii) assuming that the consents and approvals referred to
in Section 4.4 hereof are duly obtained, (x) violate any statute, code,
ordinance, rule, regulation, judgment, order, writ, decree or injunction
applicable to the Company or any of its Subsidiaries, or any of their
respective properties or assets, or (y) violate, conflict with, result in a
breach of any provision of or the loss of any benefit under, constitute a
default (or an event which, with notice or lapse of time, or both, would
constitute a default) under, result in the termination of or a right of
termination or cancellation under, accelerate the performance required by,
or result in the creation of any lien, pledge, security interest, charge or
other encumbrance upon any of the respective properties or assets of the
Company or any of its Subsidiaries under, any of the terms, conditions or
provisions of any note, bond, mortgage, indenture, deed of trust, license,
lease, agreement or other instrument or obligation to which the Company or
any of its Subsidiaries is a party, or by which they or any of their
respective properties or assets may be bound or affected.
4.4. Consents and Approvals. Except for (a) the filing of an
application with the Board of Governors of the Federal Reserve System (the
"Federal Reserve Board") under the Bank Holding Company Act of 1956, as
amended (the "BHC Act") and approval of such application, (b) the filing of
an application with the FDIC under the Bank Merger Act and approval of such
application, in the event the parties enter into the Bank Merger Agreement
(as defined in Section 7.12) (c) the filing of applications and notices, as
applicable, with the Office of Thrift Supervision (the "OTS") and approval
of such applications and notices, (d) the filing of an application with the
New York State Banking Department (the "Banking Department") and the
approval of such application, (e) the filing with the Securities and
Exchange Commission (the "SEC") of a proxy statement in definitive form
relating to the meeting of the Company's stockholders to be held in
connection with this Agreement and the transactions contemplated hereby
(the "Proxy Statement") and the filing and declaration of effectiveness of
the registration statement on Form S-4 (the "S-4") in which the Proxy
Statement will be included as a prospectus, (f) the approval of this
Agreement by the requisite vote of the stockholders of the Company, (g) the
filing of the Certificate of Merger with the Secretary pursuant to the
DGCL, (h) such filings and approvals as are required to be made or obtained
under the securities or "Blue Sky" Laws of various states in connection
with the issuance of the shares of Buyer Common Stock pursuant to this
Agreement, (i) approval of the listing of the Buyer Common Stock to be
issued in the Merger on the NYSE, and (j) such filings, authorizations or
approvals as may be set forth in Section 4.4 of the Company Disclosure
Schedule, no consents or approvals of or filings or registrations with any
court, administrative agency or commission or other governmental authority
or instrumentality (each a "Governmental Entity") or with any third party
are necessary in connection with the execution and delivery by the Company
of the Company Documents or the consummation by the Company of the Merger
and the other transactions contemplated hereby and thereby.
4.5. Reports. The Company and each of its Subsidiaries have
timely filed all reports, registrations and statements, together with any
amendments required to be made with respect thereto, that they were
required to file since December 31, 1996 with (i) the OTS, (ii) the FDIC,
(iii) any state banking commissions or any other state regulatory authority
(each a "State Regulator") and (iv) any other self-regulatory organization
("SRO") (collectively, with the Federal Reserve Board, the "Regulatory
Agencies"), and have paid all fees and assessments due and payable in
connection therewith. Except for normal examinations conducted by a
Regulatory Agency in the regular course of the business of the Company and
its Subsidiaries, and except as set forth in Section 4.5 of the Company
Disclosure Schedule, no Regulatory Agency has initiated any proceeding or,
to the knowledge of the Company, investigation into the business or
operations of the Company or any of its Subsidiaries since December 31,
1996. There is no unresolved violation, criticism, or exception by any
Regulatory Agency with respect to any report or statement relating to any
examinations of the Company or any of its Subsidiaries.
4.6. Financial Statements. The Company has previously made
available to Buyer copies of (a) the consolidated statements of condition
of the Company and its Subsidiaries as of June 30 for the fiscal years 1997
and 1998, and the related consolidated statements of income, changes in
stockholders' equity and cash flows for the fiscal years 1996 through 1998,
inclusive, as reported in the Company's Annual Report on Form 10-K for the
fiscal year ended June 30, 1998 filed with the SEC under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), in each case
accompanied by the audit report of KPMG LLP, independent public accountants
with respect to the Company, (b) the unaudited consolidated statements of
condition of the Company and its Subsidiaries as of March 31, 1998 and
March 31, 1999 and the related unaudited consolidated statements of income,
cash flows and changes in stockholders' equity for the nine-month periods
then ended as reported in the Company's Quarterly Report on Form 10-Q for
the period ended March 31, 1999 filed with the SEC under the Exchange Act,
and (c) the consolidated statements of condition of the Company and its
Subsidiaries as of June 30 for the fiscal years 1998 and 1999, and the
related consolidated statements of income, changes in stockholders' equity
and cash flows for the fiscal years 1997 through 1999, inclusive, as
reported in the draft of the Company's Annual Report for the fiscal year
ended June 30, 1999 to be filed with the SEC (the "Draft Financials"). The
June 30, 1998 and June 30, 1999 consolidated statements of condition of the
Company (including the related notes, where applicable) fairly present the
consolidated financial position of the Company and its Subsidiaries as of
the dates thereof, and the other financial statements referred to in this
Section 4.6 (including the related notes, where applicable) fairly present,
and the financial statements to be filed by the Company with the SEC after
the date of this Agreement will fairly present (subject, in the case of the
unaudited statements, to recurring audit adjustments normal in nature and
amount), the results of the consolidated operations and consolidated
financial position of the Company and its Subsidiaries for the respective
fiscal periods or as of the respective dates therein set forth; each of
such statements (including the related notes, where applicable) complies,
and the financial statements to be filed by the Company with the SEC after
the date of this Agreement will comply, with applicable accounting
requirements and with the published rules and regulations of the SEC with
respect thereto; and each of such statements (including the related notes,
where applicable) has been, and the financial statements to be filed by the
Company with the SEC after the date of this Agreement will be, prepared in
accordance with generally accepted accounting principles ("GAAP")
consistently applied during the periods involved, except as indicated in
the notes thereto or, in the case of unaudited statements, as permitted by
Form 10-Q. The books and records of the Company and its Subsidiaries have
been, and are being, maintained in accordance with GAAP and any other
applicable legal and accounting requirements and reflect only actual
transactions.
Section 4.6 of the Company Disclosure Schedule sets forth a true
and correct description of the Company's "Borrowed Funds" as reflected in
the Draft Financials.
4.7. Broker's Fees. Neither the Company nor any Subsidiary of
the Company nor any of their respective officers or directors has employed
any broker or finder or incurred any liability for any broker's fees,
commissions or finder's fees in connection with any of the transactions
contemplated by the Company Documents, except that the Company has engaged,
and will pay a fee or commission to, Sandler, X'Xxxxx & Partners, L.P.
("Sandler X'Xxxxx") in accordance with the terms of a letter agreement
between Sandler X'Xxxxx and the Company, a true and correct copy of which
has been previously delivered by the Company to Buyer.
4.8. Absence of Certain Changes or Events. (a) Except as may
be set forth in Section 4.8(a) of the Company Disclosure Schedule or as
disclosed in any Company Report filed with the SEC prior to the date of
this Agreement, since June 30, 1998, (i) neither the Company nor any of its
Subsidiaries has incurred any liability, except in the ordinary course of
their business consistent with their past practices, and (ii) there has
been no change or development or combination of changes or developments
which has had, or is reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on the Company.
(b) Except as set forth in Section 4.8(b) of the Company
Disclosure Schedule or as disclosed in any Company Report filed with the
SEC prior to the date of this Agreement, since June 30, 1998, the Company
and its Subsidiaries have carried on their respective businesses in the
ordinary course consistent with their past practices.
(c) Except as set forth in Section 4.8(c) of the Company
Disclosure Schedule, since June 30, 1999, neither the Company nor any of
its Subsidiaries has (i) increased the wages, salaries, compensation,
pension, or other fringe benefits or perquisites payable to any executive
officer, employee, or director from the amount thereof in effect as of June
30, 1999 (which amounts have been previously disclosed to Buyer), granted
any severance or termination pay, entered into any contract to make or
grant any severance or termination pay, or paid any bonus, (ii) suffered
any strike, work stoppage, slow-down, or other labor disturbance, (iii)
been a party to a collective bargaining agreement, contract or other
agreement or understanding with a labor union or organization, or (iv) had
any union organizing activities.
4.9. Legal Proceedings. (a) Except as set forth in Section 4.9
of the Company Disclosure Schedule, neither the Company nor any of its
Subsidiaries is a party to any, and there are no pending or, to the
Company's knowledge, threatened, legal, administrative, arbitral or other
proceedings, claims, actions or governmental or regulatory investigations
of any nature against the Company or any of its Subsidiaries or challenging
the validity or propriety of the transactions contemplated by any of the
Company Documents.
(b) There is no injunction, order, judgment, decree, or
regulatory restriction imposed upon the Company, any of its Subsidiaries or
the assets of the Company or any of its Subsidiaries.
4.10. Taxes. (a) Except as set forth in Section 4.10(a) of the
Company Disclosure Schedule, each of the Company and its Subsidiaries has
(i) duly and timely filed (including applicable extensions granted without
penalty) all Tax Returns (as hereinafter defined) required to be filed at
or prior to the Effective Time, and such Tax Returns are true and correct,
and (ii) paid in full or made adequate provision in the financial
statements of the Company (in accordance with GAAP) for all Taxes (as
hereinafter defined). No deficiencies for any Taxes have been proposed,
asserted, assessed or, to the knowledge of the Company, threatened against
or with respect to the Company or any of its Subsidiaries. Except as set
forth in Section 4.10(a) of the Company Disclosure Schedule, (i) there are
no liens for Taxes upon the assets of either the Company or its
Subsidiaries except for statutory liens for current Taxes not yet due, (ii)
neither the Company nor any of its Subsidiaries has requested any extension
of time within which to file any Tax Returns in respect of any fiscal year
which have not since been filed and no request for waivers of the time to
assess any Taxes are pending or outstanding, (iii) with respect to each
taxable period of the Company and its Subsidiaries, the federal and state
income Tax Returns of the Company and its Subsidiaries have been audited by
the Internal Revenue Service or appropriate state tax authorities or the
time for assessing and collecting income Tax with respect to such taxable
period has closed and such taxable period is not subject to review, (iv)
neither the Company nor any of its Subsidiaries has filed or been included
in a combined, consolidated or unitary income Tax Return other than one in
which the Company was the parent of the group filing such Tax Return, (v)
neither the Company nor any of its Subsidiaries is a party to any agreement
providing for the allocation or sharing of Taxes (other than the allocation
of federal income taxes as provided by Regulation 1.1552-1(a)(1) under the
Code), (vi) neither the Company nor any of its Subsidiaries is required to
include in income any adjustment pursuant to Section 481(a) of the Code (or
any similar or corresponding provision or requirement of state, local or
foreign income Tax law), by reason of the voluntary change in accounting
method (nor has any taxing authority proposed any such adjustment or change
of accounting method), (vii) neither the Company nor any of its
Subsidiaries has filed a consent pursuant to Section 341(f) of the Code,
and (viii) neither the Company nor any of its Subsidiaries has made any
payment or provided any benefit or may be obligated to make any payment or
provide any benefit (by contract or otherwise) which will not be deductible
by reason of Section 280G or Section 162(m) of the Code.
(b) Except as set forth in Section 4.10(b) of the Company
Disclosure Schedule, neither the Company nor any of its Subsidiaries owns,
directly or indirectly (including, without limitation, through
partnerships, corporations, trusts or other entities), interests in real
property ("Real Property Interests") situated in (A) New York State, which
by reason of the Merger would be subject to either (i) the New York State
Real Property Transfer Tax, or (ii) the New York City Real Property
Transfer Tax (collectively, the "New York Transfer Taxes"), or (B) any
state other than New York State which by reason of the Merger would be
subject to any tax similar to the New York Transfer Taxes. For purposes of
this Section 4.10(b), Real Property Interests include, without limitation,
titles in fee, leasehold interests, beneficial interests, encumbrances,
developments rights or any other interests with the right to use or occupy
real property or the right to receive rents, profits or other income
derived therefrom, or any options or contracts to purchase real property.
(c) For the purposes of this Agreement, "Taxes" shall mean
all taxes, charges, fees, levies, penalties or other assessments imposed by
any United States federal, state, local or foreign taxing authority,
including, but not limited to income, excise, property, sales, transfer,
franchise, payroll, withholding, social security or other taxes, including
any interest, penalties or additions attributable thereto. For purposes of
this Agreement, "Tax Return" shall mean any return, report, information
return or other document (including any related or supporting information)
with respect to Taxes.
4.11. Employees. (a) Section 4.11(a) of the Company Disclosure
Schedule sets forth a true and correct list of each deferred compensation
plan, incentive compensation plan, equity compensation plan, "welfare"
plan, fund or program (within the meaning of Section 3(1) of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA")); "pension"
plan, fund or program (within the meaning of Section 3(2) of ERISA); each
employment, termination or severance agreement; and each other employee
benefit plan, fund, program, agreement or arrangement, in each case, that
is sponsored, maintained or contributed to or required to be contributed to
(the "Plans") by the Company, any of its Subsidiaries or by any trade or
business, whether or not incorporated (an "ERISA Affiliate"), all of which
together with the Company would be deemed a "single employer" within the
meaning of Section 4001 of the Employee Retirement Income Security Act of
1974, as amended ("ERISA"), for the benefit of any employee or former
employee of the Company or any Subsidiary.
(b) The Company has heretofore made available to Buyer true
and correct copies of each of the Plans and all related documents,
including but not limited to (i) the actuarial report for such Plan (if
applicable) for each of the last two years, and (ii) the most recent
determination letter from the Internal Revenue Service (if applicable) for
such Plan.
(c) Except as set forth in Section 4.11(c) of the Company
Disclosure Schedule, (i) each of the Plans has been operated and
administered in all material respects in accordance with its terms and
applicable law, including but not limited to ERISA and the Code, (ii) each
of the Plans intended to be "qualified" within the meaning of Section
401(a) of the Code either (1) has received a favorable determination letter
from the IRS, or (2) is or will be the subject of an application for a
favorable determination letter, and the Company is not aware of any
circumstances likely to result in the revocation or denial of any such
favorable determination letter, (iii) with respect to each Plan which is
subject to Title IV of ERISA, the present value of accrued benefits under
such Plan, based upon the actuarial assumptions used for funding purposes
in the most recent actuarial report prepared by such Plan's actuary with
respect to such Plan, did not, as of its latest valuation date, exceed the
then current value of the assets of such Plan allocable to such accrued
benefits, (iv) no Plan provides benefits, including without limitation
death or medical benefits (whether or not insured), with respect to current
or former employees of the Company, its Subsidiaries or any ERISA Affiliate
beyond their retirement or other termination of service, other than (w)
coverage mandated by applicable law, (x) death benefits or retirement
benefits under any "employee pension plan," as that term is defined in
Section 3(2) of ERISA, (y) deferred compensation benefits accrued as
liabilities on the books of the Company, its Subsidiaries or the ERISA
Affiliates or (z) benefits the full cost of which is borne by the current
or former employee (or his beneficiary), (v) no liability under Title IV of
ERISA has been incurred by the Company, its Subsidiaries or any ERISA
Affiliate that has not been satisfied in full, and no condition exists that
presents a material risk to the Company, its Subsidiaries or an ERISA
Affiliate of incurring a material liability thereunder, (vi) no Plan is a
"multiemployer pension plan," as such term is defined in Section 3(37) of
ERISA, (vii) all contributions or other amounts payable by the Company, its
Subsidiaries or any ERISA Affiliates as of the Effective Time with respect
to each Plan in respect of current or prior plan years have been paid or
accrued in accordance with generally accepted accounting practices and
Section 412 of the Code, (viii) neither the Company, its Subsidiaries nor
any ERISA Affiliate has engaged in a transaction in connection with which
the Company, its Subsidiaries or any ERISA Affiliate could be subject to
either a civil penalty assessed pursuant to Section 409 or 502(i) of ERISA
or a tax imposed pursuant to Section 4975 or 4976 of the Code, (ix) there
are no pending, or, to the best knowledge of the Company, threatened or
anticipated claims or proceedings (other than routine claims for benefits)
by, on behalf of or against any of the Plans or any trusts related thereto
and (x) the consummation of the transactions contemplated by this Agreement
will not (y) entitle any current or former employee or officer of the
Company or any ERISA Affiliate to severance pay, termination pay or any
other payment or benefit, except as expressly provided in this Agreement or
(z) accelerate the time of payment or vesting or increase the amount or
value of compensation or benefits due any such employee or officer.
4.12. SEC Reports. The Company has previously made available to
Buyer a true and correct copy of each (a) final registration statement,
prospectus, report, schedule and definitive proxy statement filed since
January 1, 1997 by the Company with the SEC pursuant to the Securities Act
of 1933, as amended (the "Securities Act") or the Exchange Act (the
"Company Reports") and (b) communication mailed by the Company to its
stockholders since January 1, 1997, and no such registration statement,
prospectus, report, schedule, proxy statement or communication contained
any untrue statement of a material fact or omitted to state any material
fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances in which they were made,
not misleading. The Company has timely filed all Company Reports and other
documents required to be filed by it under the Securities Act and the
Exchange Act, and, as of their respective dates, all Company Reports
complied with the published rules and regulations of the SEC with respect
thereto.
4.13. Company Information. The information relating to the
Company and its Subsidiaries which is provided to Buyer by the Company or
any of its affiliates or representatives for inclusion in the Proxy
Statement and the S-4, or in any other document filed with any other
regulatory agency in connection herewith, will not contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements therein, in light of the circumstances in which they
are made, not misleading. The Proxy Statement (except for such portions
thereof that relate only to Buyer or any of its Subsidiaries) will comply
with the provisions of the Exchange Act and the rules and regulations
thereunder.
4.14. Compliance with Applicable Law. The Company and each of
its Subsidiaries hold, and have at all times held, all licenses,
franchises, permits and authorizations necessary for the lawful conduct of
their respective businesses under and pursuant to all, and have complied
with and are not in default in any respect under any, applicable law,
statute, order, rule, regulation, policy and/or guideline of any
Governmental Entity relating to the Company or any of its Subsidiaries, and
neither the Company nor any of its Subsidiaries knows of, or has received
notice of, any violations of any of the above.
4.15. Certain Contracts. (a) Except as set forth in Section
4.15(a) of the Company Disclosure Schedule, neither the Company nor any of
its Subsidiaries is a party to or bound by any contract, arrangement,
commitment or understanding (whether written or oral) (i) with respect to
the employment of any directors, officers, employees or consultants, (ii)
which, upon the consummation of the transactions contemplated by this
Agreement, will (either alone or upon the occurrence of any additional acts
or events) result in any payment or benefits (whether of severance pay or
otherwise) becoming due, or any increase in the amount of or acceleration
or vesting of any rights to any payment or benefits, from Buyer, the
Company, the Surviving Corporation or any of their respective Subsidiaries
to any director, officer, employee or consultant thereof, (iii) which is a
material contract (as defined in Item 601(b)(10) of Regulation S-K of the
SEC) to be performed after the date of this Agreement that has not been
filed or incorporated by reference in the Company Reports, (iv) which is a
consulting agreement (including data processing, software programming and
licensing contracts) not terminable on 60 days or less notice involving the
payment of more than $100,000 per annum, or (v) which materially restricts
the conduct of any line of business by the Company or any of its
Subsidiaries. Each contract, arrangement, commitment or understanding of
the type described in this Section 4.15(a), whether or not set forth in
Section 4.15(a) of the Company Disclosure Schedule, is referred to herein
as a "Company Contract." The Company has previously delivered or made
available to Buyer true and correct copies of each Company Contract.
(b) Except as set forth in Section 4.15(b) of the Company
Disclosure Schedule, (i) each Company Contract is valid and binding and in
full force and effect, (ii) the Company and each of its Subsidiaries has
performed all obligations required to be performed by it to date under each
Company Contract, (iii) no event or condition exists which constitutes or,
after notice or lapse of time or both, would constitute, a default on the
part of the Company or any of its Subsidiaries under any Company Contract,
and (iv) no other party to such Company Contract is, to the knowledge of
the Company, in default in any respect thereunder.
4.16. Agreements with Regulatory Agencies. Except as set forth
in Section 4.16 of the Company Disclosure Schedule, neither the Company nor
any of its Subsidiaries is subject to any cease-and-desist or other order
issued by, or is a party to any written agreement, consent agreement or
memorandum of understanding with, or is a party to any commitment letter or
similar undertaking to, or is subject to any order or directive by, or is a
recipient of any extraordinary supervisory letter from, or has adopted any
board resolutions at the request of (each, whether or not set forth on
Section 4.16 of the Company Disclosure Schedule, a "Regulatory Agreement"),
any Regulatory Agency or other Governmental Entity that restricts the
conduct of its business or that in any manner relates to its capital
adequacy, its credit policies, its management or its business, nor has the
Company or any of its Subsidiaries been advised by any Regulatory Agency or
other Governmental Entity that it is considering issuing or requesting any
Regulatory Agreement.
4.17. Investment Securities. Section 4.17 of the Company
Disclosure Schedule sets forth the book and market value as of July 31,
1999 of the investment securities, mortgage backed securities and
securities held for sale of the Company and its Subsidiaries. Section 4.17
of the Company Disclosure Schedule sets forth, with respect to such
securities, descriptions thereof, CUSIP numbers, pool face values and
coupon rates.
4.18. State Takeover Laws; Business Combination Provision. The
Board of Directors of the Company has approved the transactions
contemplated by this Agreement and the Option Agreement such that the
provisions of Section 203 of the DGCL and Article VIII of the Company's
Certificate of Incorporation will not, assuming the accuracy of the
representations contained in Section 5.15 hereof, apply to this Agreement
or the Option Agreement or any of the transactions contemplated hereby or
thereby.
4.19. Environmental Matters. Except as set forth in Section
4.19 of the Company Disclosure Schedule:
(a) Each of the Company and its Subsidiaries and, to the
knowledge of the Company, each of the Participation Facilities and the Loan
Properties (each as hereinafter defined) are and have been in compliance
with all applicable federal, state and local laws including common law,
regulations and ordinances and with all applicable decrees, orders and
contractual obligations relating to pollution or the discharge of, or
exposure to Hazardous Materials (as hereinafter defined) in the environment
or workplace ("Environmental Laws");
(b) There is no suit, claim, action or proceeding, pending
or, to the knowledge of the Company, threatened, before any Governmental
Entity or other forum in which the Company, any of its Subsidiaries, any
Participation Facility or any Loan Property, has been or, with respect to
threatened proceedings, may be, named as a defendant (x) for alleged
noncompliance (including by any predecessor), with any Environmental Laws,
or (y) relating to the release, threatened release or exposure to any
Hazardous Material whether or not occurring at or on a site owned, leased
or operated by the Company or any of its Subsidiaries, any Participation
Facility or any Loan Property;
(c) During the period of (x) the Company's or any of its
Subsidiaries' ownership or operation of any of their respective current or
former properties, (y) the Company's or any of its Subsidiaries'
participation in the management of any Participation Facility, or (z) to
the knowledge of the Company, the Company's or any of its Subsidiaries'
interest in a Loan Property, there has been no release of Hazardous
Materials in, on, under or affecting any such property. To the knowledge
of the Company, prior to the period of (x) the Company's or any of its
Subsidiaries' ownership or operation of any of their respective current or
former properties, (y) the Company's or any of its Subsidiaries'
participation in the management of any Participation Facility, or (z) the
Company's or any of its Subsidiaries' interest in a Loan Property, there
was no release or threatened release of Hazardous Materials in, on, under
or affecting any such property, Participation Facility or Loan Property;
and
(d) The following definitions apply for purposes of this
Section 4.19: (x) "Hazardous Materials" means any chemicals, pollutants,
contaminants, wastes, toxic substances, petroleum or other regulated
substances or materials, (y) "Loan Property" means any property in which
the Company or any of its Subsidiaries holds a security interest, and,
where required by the context, said term means the owner or operator of
such property; and (z) "Participation Facility" means any facility in which
the Company or any of its Subsidiaries participates in the management and,
where required by the context, said term means the owner or operator of
such property.
4.20. Derivative Transactions. Except as set forth in Section
4.20 of the Company Disclosure Schedule, since June 30, 1998, neither
Company nor any of its Subsidiaries has engaged in transactions in or
involving forwards, futures, options on futures, swaps or other derivative
instruments except (i) as agent on the order and for the account of others,
or (ii) as principal for purposes of hedging interest rate risk on U.S.
dollar-denominated securities and other financial instruments. None of the
counterparties to any contract or agreement with respect to any such
instrument is in default with respect to such contract or agreement and no
such contract or agreement, were it to be a Loan (as defined below) held by
the Company or any of its Subsidiaries, would be classified as "Other Loans
Specially Mentioned", "Special Mention", "Substandard", "Doubtful", "Loss",
"Classified", "Criticized", "Credit Risk Assets", "Concerned Loans" or
words of similar import. The financial position of the Company and its
Subsidiaries on a consolidated basis under or with respect to each such
instrument has been reflected in the books and records of the Company and
such Subsidiaries in accordance with GAAP consistently applied, and no open
exposure of the Company or any of its Subsidiaries with respect to any such
instrument (or with respect to multiple instruments with respect to any
single counterparty) exceeds $250,000.
4.21. Opinion. Prior to the execution of this Agreement, the
Company has received an opinion from Sandler X'Xxxxx to the effect that as
of the date thereof and based upon and subject to the matters set forth
therein, the Exchange Ratio is fair to the stockholders of the Company from
a financial point of view. Such opinion has not been amended or rescinded
as of the date of this Agreement.
4.22. Approvals. As of the date of this Agreement, the Company
knows of no reason why all regulatory approvals required for the
consummation of the transactions contemplated hereby should not be
obtained.
4.23. Loan Portfolio. (a) Except as set forth in Section 4.23
of the Company Disclosure Schedule, neither the Company nor any of its
Subsidiaries is a party to any written or oral (i) loan agreement, note or
borrowing arrangement (including, without limitation, leases, credit
enhancements, commitments, guarantees and interest-bearing assets)
(collectively, "Loans"), other than any Loan the unpaid principal balance
of which does not exceed $100,000, under the terms of which the obligor
was, as of June 30, 1999, over 90 days delinquent in payment of principal
or interest or in default of any other provision, or (ii) Loan with any
director, executive officer or five percent or greater stockholder of the
Company or any of its Subsidiaries, or to the knowledge of the Company, any
person, corporation or enterprise controlling, controlled by or under
common control with any of the foregoing. Section 4.23 of the Company
Disclosure Schedule sets forth (i) all of the Loans in original principal
amount in excess of $100,000 of the Company or any of its Subsidiaries that
as of June 30, 1999, were classified by any bank examiner (whether
regulatory or internal) as "Other Loans Specially Mentioned", "Special
Mention", "Substandard", "Doubtful", "Loss", "Classified", "Criticized",
"Credit Risk Assets", "Concerned Loans", "Watch List" or words of similar
import, together with the principal amount of and accrued and unpaid
interest on each such Loan and the identity of the borrower thereunder,
(ii) by category of Loan (i.e., commercial, consumer, etc.), all of the
other Loans of the Company and its Subsidiaries that as of June 30, 1999,
were classified as such, together with the aggregate principal amount of
and accrued and unpaid interest on such Loans by category and (iii) each
asset of the Company that as of June 30, 1999, was classified as "Other
Real Estate Owned" and the book value thereof. The Company shall promptly
inform Buyer in writing of any Loan that becomes classified in the manner
described in the previous sentence, or any Loan the classification of which
is changed, at any time after the date of this Agreement.
(b) Each Loan in original principal amount in excess of
$250,000 (i) is evidenced by notes, agreements or other evidences of
indebtedness which are true, genuine and what they purport to be, (ii) to
the extent secured, has been secured by valid liens and security interests
which have been perfected and (iii) is the legal, valid and binding
obligation of the obligor named therein, enforceable in accordance with its
terms, subject to bankruptcy, insolvency, fraudulent conveyance and other
laws of general applicability relating to or affecting creditors' rights
and to general equity principles.
4.24. Property. Each of the Company and its Subsidiaries has
good and marketable title free and clear of all liens, encumbrances,
mortgages, pledges, charges, defaults or equitable interests to all of the
properties and assets, real and personal, tangible or intangible, which are
reflected on the consolidated statement of financial condition of the
Company as of June 30, 1999 or acquired after such date, except (i) liens
for taxes not yet due and payable or contested in good faith by appropriate
proceedings, (ii) pledges to secure deposits and other liens incurred in
the ordinary course of business, (iii) such imperfections of title,
easements and encumbrances, if any, as do not interfere with the use of the
property as such property is used on the date of this Agreement, (iv) for
dispositions and encumbrances of, or on, such properties or assets in the
ordinary course of business or (v) mechanics', materialmen's, workmen's,
repairmen's, warehousemen's, carrier's and other similar liens and
encumbrances arising in the ordinary course of business. All leases
pursuant to which the Company or any Subsidiary of the Company, as lessee,
leases real or personal property are valid and enforceable in accordance
with their respective terms and neither the Company nor any of its
Subsidiaries nor, to the knowledge of the Company, any other party thereto
is in default thereunder.
4.25. Reorganization. As of the date of this Agreement, the
Company has no reason to believe that the Merger will fail to qualify as a
reorganization under Section 368(a) of the Code.
4.26. Company Rights Agreement. The Company has (a) duly
entered into an appropriate amendment to the Company Rights Agreement and
(b) taken all other action necessary or appropriate, in each case so that
the execution of this Agreement and the Stock Option Agreement and the
consummation of the transactions contemplated hereby and thereby
(including, without limitation, the Merger) do not and will not result in
the ability of any person to exercise any rights under the Company Rights
Agreement or enable or require the Company Rights to separate from the
shares of Company Common Stock to which they are attached or to be
triggered or become exercisable.
4.27. Equity and Real Estate Investments. Except as set forth
in Section 4.27 of the Company Disclosure Schedule, neither the Company nor
any of its Subsidiaries has (i) equity investments other than investments
in wholly owned Subsidiaries or (ii) investments in real estate or real
estate development projects, other than assets classified as "other real
estate owned."
4.28. Year 2000 Matters. Section 4.28 of the Company Disclosure
Schedule contains a true and correct copy of the Company's plan for
addressing year 2000 computer issues (the "Year 2000 Plan"). The Company
is in material compliance with the Company's Year 2000 Plan. The Company
has been examined by the OTS with respect to being "Year 2000 Compliant"
and the Company's Year 2000 Plan has been reviewed by the OTS and the
Company has received a "satisfactory" rating in connection therewith, and
neither the Company nor the Company Bank has received any written
communication from the OTS commenting adversely with respect to the ability
of the Company to become Year 2000 compliant.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
OF BUYER
Subject to Article III hereof and except as set forth in the
Buyer Disclosure Schedule, Buyer hereby represents and warrants to the
Company as follows:
5.1. Corporate Organization. (a) Buyer is a corporation duly
organized, validly existing and in good standing under the laws of the
State of Delaware. Buyer has the corporate power and authority to own or
lease all of its properties and assets and to carry on its business as it
is now being conducted, and is duly licensed or qualified to do business in
each jurisdiction in which the nature of the business conducted by it or
the character or location of the properties and assets owned or leased by
it makes such licensing or qualification necessary. Buyer is duly
registered as a bank holding company under the BHC Act. The Restated
Certificate of Incorporation and By-laws of Buyer, copies of which have
previously been made available to the Company, are true and correct copies
of such documents as in effect as of the date of this Agreement.
(b) North Fork Bank ("Buyer Bank") is a commercial bank
duly organized, validly existing and in good standing under the laws of the
State of New York. The deposit accounts of Buyer Bank are insured by the
FDIC through the Bank Insurance Fund to the fullest extent permitted by
law, and all premiums and assessments required in connection therewith have
been paid when due. Each of Buyer's other Subsidiaries is a corporation
duly organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation. Each Subsidiary of Buyer has the
corporate power and authority to own or lease all of its properties and
assets and to carry on its business as it is now being conducted, and is
duly licensed or qualified to do business in each jurisdiction in which the
nature of the business conducted by it or the character or location of the
properties and assets owned or leased by it makes such licensing or
qualification necessary. The articles of organization and by-laws of Buyer
Bank, copies of which have previously been made available to the Company,
are true and correct copies of such documents as in effect as of the date
of this Agreement.
(c) The minute books of Buyer and each of its Subsidiaries
contain true and correct records of all meetings and other corporate
actions held or taken since December 31, 1996 of their respective
stockholders and Boards of Directors (including committees of their
respective Boards of Directors).
5.2. Capitalization. (a) As of the date of this Agreement, the
authorized capital stock of Buyer consists of 200,000,000 shares of Buyer
Common Stock and 10,000,000 shares of preferred stock, par value $1.00 per
share ("Buyer Preferred Stock"). As of August 23, 1999, (i) 135,802,670
shares of Buyer Common Stock were issued and outstanding, (ii) no shares of
Buyer Preferred Stock were issued and outstanding, (iii) no shares of Buyer
Common Stock were reserved for issuance, except that 2,000,000 shares of
Buyer Common Stock were reserved for issuance pursuant to the Buyer
Dividend Investment and Stock Purchase Plan, 1,973,140 shares of Buyer
Common Stock were reserved for issuance pursuant to the Buyer 1985
Incentive Stock Option Plan, the Buyer 1987 Long-Term Incentive Plan, the
Buyer 1989 Executive Management and Compensation Plan, the Buyer 1994 Key
Employee Stock Plan, the Buyer 1997 Non-Officer Stock Plan and the Buyer
1998 Stock Compensation Plan (the "Buyer Stock Plans"), and 31,000,000
shares of Buyer Common Stock were reserved for issuance pursuant to the
Agreement and Plan of Merger, dated as of August 16, 1999, between Buyer
and JSB Financial, Inc., (iv) no shares of Buyer Preferred Stock were
reserved for issuance and (v) 9,323,852 shares of Buyer Common Stock were
held by Buyer in its treasury or by Buyer's Subsidiaries. All of the
issued and outstanding shares of Buyer Common Stock have been duly
authorized and validly issued and are fully paid, nonassessable and free of
preemptive rights, with no personal liability attaching to the ownership
thereof. As of the date of this Agreement, except as referred to above or
reflected in Section 5.2(a) of the Buyer Disclosure Schedule, Buyer does
not have and is not bound by any outstanding subscriptions, options,
warrants, calls, commitments or agreements of any character calling for the
purchase or issuance of any shares of Buyer Common Stock or Buyer Preferred
Stock or any other equity securities of Buyer or any securities
representing the right to purchase or otherwise receive any shares of Buyer
Common Stock or Buyer Preferred Stock or any other equity security of the
Buyer. The shares of Buyer Common Stock to be issued pursuant to the
Merger will be duly authorized and validly issued and, at the Effective
Time, all such shares will be fully paid, nonassessable and free of
preemptive rights, with no personal liability attaching to the ownership
thereof.
(b) Section 5.2(b) of the Buyer Disclosure Schedule sets
forth a true and correct list of all of the Subsidiaries of the Buyer as of
the date of this Agreement. Except as set forth in Section 5.2(b) of the
Buyer Disclosure Schedule, as of the date of this Agreement, Buyer owns,
directly or indirectly, all of the issued and outstanding shares of capital
stock of each of the Subsidiaries of Buyer, free and clear of all liens,
charges, encumbrances and security interests whatsoever, and all of such
shares are duly authorized and validly issued and are fully paid,
nonassessable and free of preemptive rights, with no personal liability
attaching to the ownership thereof. As of the date of this Agreement, no
Subsidiary of Buyer has or is bound by any outstanding subscriptions,
options, warrants, calls, commitments or agreements of any character with
any party that is not a direct or indirect Subsidiary of Buyer calling for
the purchase or issuance of any shares of capital stock or any other equity
security of such Subsidiary or any securities representing the right to
purchase or otherwise receive any shares of capital stock or any other
equity security of such Subsidiary.
5.3. Authority; No Violation. (a) Buyer has full corporate
power and authority to execute and deliver this Agreement and to consummate
the transactions contemplated hereby. The execution and delivery of this
Agreement and the consummation of the transactions contemplated hereby have
been duly and validly approved by the Board of Directors of Buyer, and no
other corporate proceedings on the part of Buyer are necessary to approve
this Agreement and to consummate the transactions contemplated hereby.
This Agreement has been duly and validly executed and delivered by Buyer
and (assuming due authorization, execution and delivery by the Company)
this Agreement constitutes a valid and binding obligation of Buyer,
enforceable against Buyer in accordance with its terms, except as
enforcement may be limited by general principles of equity whether applied
in a court of law or a court of equity and by bankruptcy, insolvency and
similar laws affecting creditors' rights and remedies generally.
(b) Except as set forth in Section 5.3(b) of the Buyer
Disclosure Schedule, neither the execution and delivery of this Agreement
by Buyer nor the consummation by Buyer of the transactions contemplated
hereby, nor compliance by Buyer with any of the terms or provisions hereof,
will (i) violate any provision of the Restated Certificate of Incorporation
or By-Laws of Buyer, or the articles of incorporation or by-laws or similar
governing documents of any of its Subsidiaries or (ii) assuming that the
consents and approvals referred to in Section 4.4 are duly obtained, (x)
violate any statute, code, ordinance, rule, regulation, judgment, order,
writ, decree or injunction applicable to Buyer or any of its Subsidiaries
or any of their respective properties or assets, or (y) violate, conflict
with, result in a breach of any provision of or the loss of any benefit
under, constitute a default (or an event which, with notice or lapse of
time, or both, would constitute a default) under, result in the termination
of or a right of termination or cancellation under, accelerate the
performance required by, or result in the creation of any lien, pledge,
security interest, charge or other encumbrance upon any of the respective
properties or assets of Buyer or any of its Subsidiaries under, any of the
terms, conditions or provisions of any note, bond, mortgage, indenture,
deed of trust, license, lease, agreement or other instrument or obligation
to which Buyer or any of its Subsidiaries is a party, or by which they or
any of their respective properties or assets may be bound or affected.
5.4. Consents and Approvals. Except for (a) the filing of an
application with the Federal Reserve Board under the BHC Act, and approval
of such application, (b) the filing of an application with the FDIC under
the Bank Merger Act and approval of such application, in the event the
parties enter into the Bank Merger Agreement (as defined in Section 7.12),
(c) the filing of applications and notices, as applicable, with the OTS and
approval of such applications and notices, (d) the State Banking Approvals,
(e) the filing with the SEC of the Proxy Statement and the filing and
declaration of effectiveness of the S-4, (f) the approval of this Agreement
by the requisite vote of the stockholders of the Company, (g) the filing of
the Certificate of Merger with the Secretary, (h) such filings and
approvals as are required to be made or obtained under the securities or
"Blue Sky" laws of various states in connection with the issuance of the
shares of Buyer Common Stock pursuant to this Agreement, (i) approval of
the listing of the Buyer Common Stock to be issued in the Merger on the
NYSE, and (j) such filings, authorizations or approvals as may be set forth
in Section 5.4 of the Buyer Disclosure Schedule, no consents or approvals
of or filings or registrations with any Governmental Entity or with any
third party are necessary in connection with the execution and delivery by
Buyer of this Agreement or the consummation by Buyer of the Merger and the
other transactions contemplated hereby.
5.5. Reports. Buyer and each of its Subsidiaries have timely
filed all reports, registrations and statements, together with any
amendments required to be made with respect thereto, that they were
required to file since December 31, 1996 with any Regulatory Agency, and
have paid all fees and assessments due and payable in connection therewith.
Except for normal examinations conducted by a Regulatory Agency in the
regular course of the business of Buyer and its Subsidiaries, and except as
set forth in Section 5.5 of the Buyer Disclosure Schedule, no Regulatory
Agency has initiated any proceeding or, to the knowledge of Buyer,
investigation into the business or operations of Buyer or any of its
Subsidiaries since December 31, 1996. There is no unresolved violation,
criticism, or exception by any Regulatory Agency with respect to any report
or statement relating to any examinations of Buyer or any of its
Subsidiaries.
5.6. Financial Statements. Buyer has previously made available
to the Company copies of (a) the consolidated statements of financial
condition of Buyer and its Subsidiaries as of December 31 for the fiscal
years 1997 and 1998 and the related consolidated statements of income,
changes in stockholders' equity and cash flows for the fiscal years 1996
through 1998, inclusive, as reported in Buyer's Annual Report on Form 10-K
for the fiscal year ended December 31, 1998 filed with the SEC under the
Exchange Act, in each case accompanied by the audit report of KPMG LLP,
independent public accountants with respect to Buyer, and (b) the unaudited
consolidated statements of financial condition of Buyer and its
Subsidiaries as of March 31, 1998 and March 31, 1999 and the related
unaudited consolidated statements of income, changes in stockholder's
equity and cash flows for the three-month periods then ended as reported in
Buyer's Quarterly Report on Form 10-Q for the period ended March 31, 1999
filed with the SEC under the Exchange Act. The December 31, 1998
consolidated statements of financial condition of Buyer (including the
related notes, where applicable) fairly presents the consolidated financial
position of Buyer and its Subsidiaries as of the date thereof, and the
other financial statements referred to in this Section 5.6 (including the
related notes, where applicable) fairly present, and the financial
statements to be filed by Buyer with the SEC after the date of this
Agreement will fairly present (subject, in the case of the unaudited
statements, to recurring audit adjustments normal in nature and amount),
the results of the consolidated operations and changes in stockholders'
equity and consolidated financial position of Buyer and its Subsidiaries
for the respective fiscal periods or as of the respective dates therein set
forth; each of such statements (including the related notes, where
applicable) complies, and the financial statements to be filed by Buyer
with the SEC after the date of this Agreement will comply, with applicable
accounting requirements and with the published rules and regulations of the
SEC with respect thereto; and each of such statements (including the
related notes, where applicable) has been, and the financial statements to
be filed by Buyer with the SEC after the date of this Agreement will be,
prepared in accordance with GAAP consistently applied during the periods
involved, except as indicated in the notes thereto or, in the case of
unaudited statements, as permitted by Form 10-Q. The books and records of
Buyer and its Subsidiaries have been, and are being, maintained in
accordance with GAAP and any other applicable legal and accounting
requirements and reflect only actual transactions.
5.7. Broker's Fees. Neither Buyer nor any Subsidiary of Buyer,
nor any of their respective officers or directors, has employed any broker
or finder or incurred any liability for any broker's fees, commissions or
finder's fees in connection with any of the transactions contemplated by
this Agreement or the Option Agreement, except that Buyer has engaged, and
will pay a fee or commission to, Xxxxxxxxx, Lufkin & Xxxxxxxx Securities
Corporation.
5.8. Absence of Certain Changes or Events. (a) Except as may
be set forth in Section 5.8(a) of the Buyer Disclosure Schedule or as
disclosed in any Buyer Report filed with the SEC prior to the date of this
Agreement, since December 31, 1998, (i) neither Buyer nor any of its
Subsidiaries has incurred any liability, except in the ordinary course of
their business consistent with their past practices, and (ii) there has
been no change or development or combination of changes or developments
which has had, or is reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on Buyer.
(b) Except as disclosed in any Buyer Report filed with the
SEC prior to the date of this Agreement, since December 31, 1998, the Buyer
and its Subsidiaries have carried on their respective businesses in the
ordinary course consistent with prudent banking practices.
(c) Since December 31, 1998, neither the Buyer nor any of
its Subsidiaries has (i)suffered any strike, work stoppage, slow-down, or
other labor disturbance, (ii) been a party to a collective bargaining
agreement, contract or other agreement or understanding with a labor union
or organization, or (iii) had any union organizing activities.
5.9. Legal Proceedings. (a) Except as set forth in Section 5.9
of the Buyer Disclosure Schedule, neither Buyer nor any of its Subsidiaries
is a party to any and there are no pending or, to Buyer's knowledge,
threatened, legal, administrative, arbitral or other proceedings, claims,
actions or governmental or regulatory investigations of any nature against
Buyer or any of its Subsidiaries or challenging the validity or propriety
of the transactions contemplated by this Agreement.
(b) There is no injunction, order, judgment, decree, or
regulatory restriction imposed upon Buyer, any of its Subsidiaries or the
assets of Buyer or any of its Subsidiaries.
5.10. Taxes. Except as set forth in Section 5.10 of the Buyer
Disclosure Schedule, each of Buyer and its Subsidiaries has (i) duly and
timely filed (including applicable extensions granted without penalty) all
Tax Returns required to be filed at or prior to the Effective Time, and
such Tax Returns are true and correct, and (ii) paid in full or made
adequate provision in the financial statements of Buyer (in accordance with
GAAP) for all Taxes. No deficiencies for any Taxes have been proposed,
asserted, assessed or, to the best knowledge of Buyer, threatened against
or with respect to Buyer or any of its Subsidiaries. Except as set forth
in Section 5.10 of the Buyer Disclosure Schedule, (i) there are no liens
for Taxes upon the assets of either Buyer or its Subsidiaries except for
statutory liens for current Taxes not yet due, (ii) neither Buyer nor any
of its Subsidiaries has requested any extension of time within which to
file any Tax Returns in respect of any fiscal year which have not since
been filed and no request for waivers of the time to assess any Taxes are
pending or outstanding, (iii) with respect to each taxable period of Buyer
and its Subsidiaries, the federal and state income Tax Returns of Buyer and
its Subsidiaries have been audited by the Internal Revenue Service or
appropriate state tax authorities or the time for assessing and collecting
income Tax with respect to such taxable period has closed and such taxable
period is not subject to review, (iv) neither Buyer nor any of its
Subsidiaries has filed or been included in a combined, consolidated or
unitary income Tax Return other than one in which Buyer was the parent of
the group filing such Tax Return, (v) neither Buyer nor any of its
Subsidiaries is a party to any agreement providing for the allocation or
sharing of Taxes (other than the allocation of federal income taxes as
provided by Regulation 1.1552-1(a)(1) under the Code), (vi) neither Buyer
nor any of its Subsidiaries is required to include in income any adjustment
pursuant to Section 481(a) of the Code (or any similar or corresponding
provision or requirement of state, local or foreign income Tax law), by
reason of the voluntary change in accounting method (nor has any taxing
authority proposed in writing any such adjustment or change of accounting
method), and (vii) neither Buyer nor any of its Subsidiaries has filed a
consent pursuant to Section 341(f) of the Code.
5.11. Employees. (a) Section 5.11(a) of the Buyer Disclosure
Schedule sets forth a true and correct list of each deferred compensation
plan, incentive compensation plan, equity compensation plan, "welfare"
plan, fund or program (within the meaning of section 3(1) of the ERISA);
"pension" plan, fund or program (within the meaning of section 3(2) of
ERISA); each employment, termination or severance agreement; and each other
employee benefit plan, fund, program, agreement or arrangement, in each
case, that is sponsored, maintained or contributed to or required to be
contributed to as of the date of this Agreement (the "Buyer Plans") by
Buyer, any of its Subsidiaries or by any trade or business, whether or not
incorporated (a "Buyer ERISA Affiliate"), all of which together with Buyer
would be deemed a "single employer" within the meaning of Section 4001 of
ERISA, for the benefit of any employee or former employee of Buyer, any
Subsidiary or any Buyer ERISA Affiliate.
(b) Except as set forth in Section 5.11(b) of the Buyer
Disclosure Schedule, (i) each of the Buyer Plans has been operated and
administered in accordance with its terms and applicable law, including but
not limited to ERISA and the Code, (ii) each of the Buyer Plans intended to
be "qualified" within the meaning of Section 401(a) of the Code has either
(1) received a favorable determination letter from the IRS, or (2) is or
will be the subject of an application for a favorable determination letter,
and Buyer is not aware of any circumstances likely to result in the
revocation or denial of any such favorable determination letter, (iii) with
respect to each Buyer Plan which is subject to Title IV of ERISA, the
present value of accrued benefits under such Buyer Plan, based upon the
actuarial assumptions used for funding purposes in the most recent
actuarial report prepared by such Buyer Plan's actuary with respect to such
Buyer Plan, did not, as of its latest valuation date, exceed the then
current value of the assets of such Buyer Plan allocable to such accrued
benefits, (iv) no Plan provides benefits, including without limitation
death or medical benefits (whether or not insured), with respect to current
or former employees of Buyer, its Subsidiaries or any Buyer ERISA Affiliate
beyond their retirement or other termination of service, other than (w)
coverage mandated by applicable law, (x) death benefits or retirement
benefits under any "employee pension plan," as that term is defined in
Section 3(2) of ERISA, (y) deferred compensation benefits accrued as
liabilities on the books of Buyer, its Subsidiaries or the ERISA Affiliates
or (z) benefits the full cost of which is borne by the current or former
employee (or his beneficiary), (v) no liability under Title IV of ERISA has
been incurred by Buyer, its Subsidiaries or any Buyer ERISA Affiliate that
has not been satisfied in full and no condition exists that presents a
material risk to the Buyer, its Subsidiaries or an ERISA Affiliate of
incurring a material liability thereunder, (vi) no Buyer Plan is a
"multiemployer pension plan," as such term is defined in Section 3(37) of
ERISA, (vii) all contributions or other amounts payable by Buyer, its
Subsidiaries or any ERISA Affiliate as of the Effective Time with respect
to each Plan in respect of current or prior plan years have been paid or
accrued in accordance with generally accepted accounting practices and
Section 412 of the Code, (viii) neither Buyer, its Subsidiaries nor any
Buyer ERISA Affiliate has engaged in a transaction in connection with which
Buyer, its Subsidiaries or any Buyer ERISA Affiliate could be subject to
either a civil penalty assessed pursuant to Section 409 or 502(i) of ERISA
or a tax imposed pursuant to Section 4975 or 4976 of the Code, (ix) there
are no pending, or, to the best knowledge of Buyer, threatened or
anticipated claims or proceedings (other than routine claims for benefits)
by, on behalf of or against any of the Buyer Plans or any trusts related
thereto and (x) the consummation of the transactions contemplated by this
Agreement will not (y) entitle any current or former employee or officer of
Buyer or any Buyer ERISA Affiliate to severance pay, termination pay or any
other payment or benefit, except as expressly provided in this Agreement or
(z) accelerate the time of payment or vesting or increase in the amount or
value of compensation or benefits due any such employee or officer.
5.12. SEC Reports. Buyer has previously made available to the
Company a true and correct copy of each (a) final registration statement,
prospectus, report, schedule and definitive proxy statement filed since
January 1, 1997 by Buyer with the SEC pursuant to the Securities Act or the
Exchange Act (the "Buyer Reports") and (b) communication mailed by Buyer to
its stockholders since January 1, 1997, and no such registration statement,
prospectus, report, schedule, proxy statement or communication contained
any untrue statement of a material fact or omitted to state any material
fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances in which they were made,
not misleading. Buyer has timely filed all Buyer Reports and other
documents required to be filed by it under the Securities Act and the
Exchange Act, and, as of their respective dates, all Buyer Reports complied
with the published rules and regulations of the SEC with respect thereto.
5.13. Buyer Information. The information relating to Buyer and
its Subsidiaries to be contained in the Proxy Statement and the S-4, or in
any other document filed with any other regulatory agency in connection
herewith, will not contain any untrue statement of a material fact or omit
to state a material fact necessary to make the statements therein, in light
of the circumstances in which they are made, not misleading. The S-4 will
comply with the provisions of the Securities Act and the rules and
regulations thereunder.
5.14. Compliance with Applicable Law. Buyer and each of its
Subsidiaries hold, and have at all times held, all licenses, franchises,
permits and authorizations necessary for the lawful conduct of their
respective businesses under and pursuant to all, and have complied with and
are not in default in any respect under any, applicable law, statute,
order, rule, regulation, policy and/or guideline of any Governmental Entity
relating to Buyer or any of its Subsidiaries, and neither Buyer nor any of
its Subsidiaries knows of, or has received notice of violation of, any
violations of any of the above.
5.15. Ownership of Company Common Stock. (a) Except for the
Option Agreement and 55,000 shares of Company Common Stock beneficially
owned by Buyer, neither Buyer nor any of its affiliates or associates (as
such terms are defined under the Exchange Act), (i) beneficially owns,
directly or indirectly, or (ii) is a party to any agreement, arrangement or
understanding for the purpose of acquiring, holding, voting or disposing
of, in each case, any shares of capital stock of the Company (other than
Trust Account Shares and DPC Shares).
(b) Neither Buyer nor any of its Subsidiaries is an
"affiliate" (as such term is defined in DGCL section 203(c)(1)) or an
"associate" (within the meaning of DGCL section 203(c)(2)) of the Company
or an "Interested Stockholder" (as such term is defined in Article VIII of
the Company's Certificate of Incorporation).
5.16. Agreements with Regulatory Agencies. Neither Buyer nor
any of its Subsidiaries is subject to any cease-and-desist or other order
issued by, or is a party to any written agreement, consent agreement or
memorandum of understanding with, or is a party to any commitment letter or
similar undertaking to, or is subject to any order or directive by, or is a
recipient of any extraordinary supervisory letter from, or has adopted any
board resolutions at the request of (each, whether or not set forth in
Section 5.16 of the Buyer Disclosure Schedule, a "Buyer Regulatory
Agreement"), any Regulatory Agency or other Governmental Entity that
restricts the conduct of its business or that in any manner relates to its
capital adequacy, its credit policies, its management or its business, nor
has Buyer or any of its Subsidiaries been advised by any Regulatory Agency
or other Governmental Entity that it is considering issuing or requesting
any Regulatory Agreement.
5.17. Approvals. As of the date of this Agreement, Buyer knows
of no reason why all regulatory approvals required for the consummation of
the transactions contemplated hereby should not be obtained.
5.18. Tax Treatment for the Merger; Reorganization. As of the
date of this Agreement, Buyer has no reason to believe that the Merger will
fail to qualify as a reorganization under Section 368(a) of the Code.
5.19. Environmental Matters. Except as set forth in Section
5.19 of the Buyer Disclosure Schedule:
(a) Each of Buyer and its Subsidiaries and, to the
knowledge of the Buyer, each of the Participation Facilities and the Loan
Properties (each as hereinafter defined) are and have been in compliance
with all Environmental Laws;
(b) There is no suit, claim, action or proceeding, pending
or, to the knowledge of Buyer, threatened, before any Governmental Entity
or other forum in which Buyer, any of its Subsidiaries, any Participation
Facility or any Loan Property, has been or, with respect to threatened
proceedings, may be, named as a defendant (x) for alleged noncompliance
(including by any predecessor) with any Environmental Laws, or (y) relating
to the release, threatened release or exposure to any Hazardous Material
whether or not occurring at or on a site owned, leased or operated by Buyer
or any of its Subsidiaries, any Participation Facility or any Loan
Property. As used in this Section 5.19, "Hazardous Materials" means any
chemicals, pollutants, contaminants, wastes, toxic substances, petroleum or
other regulated substances or materials;
(c) During the period of (x) Buyer's or any of its
Subsidiaries' ownership or operation of any of their respective current or
former properties, (y) Buyer's or any of its Subsidiaries' participation in
the management of any Participation Facility, or (z) to the knowledge of
the Buyer, Buyer's or any of its Subsidiaries' interest in a Loan Property,
there has been no release of Hazardous Materials in, on, under or affecting
any such property. To the knowledge of the Buyer, prior to the period of
(x) Buyer's or any of its Subsidiaries' ownership or operation of any of
their respective current or former properties, (y) Buyer's or any of its
Subsidiaries' participation in the management of any Participation
Facility, or (z) Buyer's or any of its Subsidiaries' interest in a Loan
Property, there was no release of Hazardous Materials in, on, under or
affecting any such property, Participation Facility or Loan Property; and
(d) The following definitions apply for purposes of this
Section 5.19: (x) "Loan Property" means any property in which Buyer or any
of its Subsidiaries holds a security interest, and, where required by the
context, said term means the owner or operator of such property; and (y)
"Participation Facility" means any facility in which Buyer or any of its
Subsidiaries participates in the management and, where required by the
context, said term means the owner or operator of such property.
5.20. Loan Portfolio. Section 5.20 of the Buyer Disclosure
Schedule sets forth, by category, the aggregate book value amount of (i)
all of the Loans in original principal amount in excess of $100,000 of the
Buyer or any of its Subsidiaries that as of July 31, 1999, were classified
by any bank examiner (whether regulatory or internal) as "Other Loans
Specially Mentioned", "Special Mention", "Substandard", "Doubtful", "Loss",
"Classified", "Criticized", "Credit Risk Assets", "Concerned Loans", "Watch
List" or words of similar import, together with the principal amount of and
accrued and unpaid interest on each such Loan and the identity of the
borrower thereunder and (ii) all assets of the Buyer that as of June 30,
1999, were classified as "Other Real Estate Owned".
(b) Each Loan in original principal amount in excess of
$250,000 (i) is evidenced by notes, agreements or other evidences of
indebtedness which are true, genuine and what they purport to be, (ii) to
the extent secured, has been secured by valid liens and security interests
which have been perfected and (iii) is the legal, valid and binding
obligation of the obligor named therein, enforceable in accordance with its
terms, subject to bankruptcy, insolvency, fraudulent conveyance and other
laws of general applicability relating to or affecting creditors' rights
and to general equity principles.
5.21. Property. Each of the Buyer and its Subsidiaries has good
and marketable title free and clear of all liens, encumbrances, mortgages,
pledges, charges, defaults or equitable interests to all of the properties
and assets, real and personal, tangible or intangible, which are reflected
on the consolidated statement of financial condition of the Buyer as of
June 30, 1999 or acquired after such date, except (i) liens for taxes not
yet due and payable or contested in good faith by appropriate proceedings,
(ii) pledges to secure deposits and other liens incurred in the ordinary
course of business, (iii) such imperfections of title, easements and
encumbrances, if any, as do not interfere with the use of the property as
such property is used on the date of this Agreement, (iv) for dispositions
and encumbrances of, or on, such properties or assets in the ordinary
course of business or (v) mechanics', materialmen's, workmen's,
repairmen's, warehousemen's, carrier's and other similar liens and
encumbrances arising in the ordinary course of business. All leases
pursuant to which the Buyer or any Subsidiary of the Buyer, as lessee,
leases real or personal property are valid and enforceable in accordance
with their respective terms and neither the Buyer nor any of its
Subsidiaries nor, to the knowledge of the Buyer, any other party thereto is
in default thereunder.
5.22. Derivative Transactions. Except as set forth in Section
5.22 of the Buyer Disclosure Schedule, since December 31, 1998, neither
Buyer nor any of its Subsidiaries has engaged in transactions in or
involving forwards, futures, options on futures, swaps or other derivative
instruments except (i) as agent on the order and for the account of others,
or (ii) as principal for purposes of hedging interest rate risk on U.S.
dollar-denominated securities and other financial instruments. None of the
counterparties to any contract or agreement with respect to any such
instrument is in default with respect to such contract or agreement and no
such contract or agreement, were it to be a Loan (as defined below) held by
the Buyer or any of its Subsidiaries, would be classified as "Other Loans
Specially Mentioned", "Special Mention", "Substandard", "Doubtful", "Loss",
"Classified", "Criticized", "Credit Risk Assets", "Concerned Loans" or
words of similar import. The financial position of Buyer and its
Subsidiaries on a consolidated basis under or with respect to each such
instrument has been reflected in the books and records of Buyer and such
Subsidiaries in accordance with GAAP consistently applied, and no open
exposure of Buyer or any of its Subsidiaries with respect to any such
instrument (or with respect to multiple instruments with respect to any
single counterparty) exceeds $250,000.
5.23. Year 2000 Matters. Section 5.23 of the Buyer Disclosure
Schedule contains a true and correct copy of the Buyer's plan for
addressing year 2000 computer issues (the "Year 2000 Plan"). The Buyer is
in material compliance with the Buyer's Year 2000 Plan.
5.24. Insurance. The Buyer and its Subsidiaries are presently
insured, and since December 31, 1998, have been insured, for reasonable
amounts with financially sound and reputable insurance companies, against
such risks as companies engaged in a similar business would, in accordance
with good business practice, customarily be insured. All of the insurance
policies and bonds maintained by the Buyer and its Subsidiaries are in full
force and effect, the Buyer and its Subsidiaries are not in default
thereunder and all material claims thereunder have been filed in due and
timely fashion.
ARTICLE VI
COVENANTS RELATING TO CONDUCT OF BUSINESS
6.1. Covenants of the Company. During the period from the date
of this Agreement and continuing until the Effective Time, except as
expressly contemplated or permitted by this Agreement or the Option
Agreement or with the prior written consent of Buyer, the Company and its
Subsidiaries shall carry on their respective businesses in the ordinary
course consistent with past practice and consistent with prudent banking
practice. The Company will use its best efforts to (x) preserve its
business organization and that of its Subsidiaries intact, (y) keep
available to itself and Buyer the present services of the employees of the
Company and its Subsidiaries and (z) preserve for itself and Buyer the
goodwill of the customers of the Company and its Subsidiaries and others
with whom business relationships exist. Without limiting the generality of
the foregoing, and except as set forth in Section 6.1 of the Company
Disclosure Schedule or as otherwise contemplated by this Agreement or
consented to in writing by Buyer, the Company shall not, and shall not
permit any of its Subsidiaries to:
(a) solely in the case of the Company, declare or pay any
dividends on, or make other distributions in respect of, any of its capital
stock, other than normal quarterly dividends not in excess of $0.21 per
share of Company Common Stock;
(b) (i) split, combine or reclassify any shares of its
capital stock or issue or authorize or propose the issuance of any other
securities in respect of, in lieu of or in substitution for shares of its
capital stock, (ii) repurchase, redeem or otherwise acquire (except for the
acquisition of Trust Account Shares and DPC Shares, as such terms are
defined in Section 1.4(b) hereof) any shares of the capital stock of the
Company or any Subsidiary of the Company, or any securities convertible
into or exercisable for any shares of the capital stock of the Company or
any Subsidiary of the Company; or (iii) issue, deliver or sell, or
authorize or propose the issuance, delivery or sale of, any shares of its
capital stock or any securities convertible into or exercisable for, or any
rights, warrants or options to acquire, any such shares, or enter into any
agreement with respect to any of the foregoing, except, in the case of
clauses (i) and (iii), for the issuance of Company Common Stock upon the
exercise or fulfillment of rights or options issued or existing pursuant to
employee benefit plans, programs or arrangements, all to the extent
outstanding and in existence on the date of this Agreement and in
accordance with their present terms;
(c) amend its Certificate of Incorporation, By-laws or
other similar governing documents;
(d) authorize any of its officers, directors, or agents to
directly or indirectly solicit, initiate or encourage any inquiries
relating to, or the making of any proposal which constitutes, a "takeover
proposal" (as defined below), or recommend or endorse any takeover
proposal, or participate in any discussions or negotiations, or provide
third parties with any nonpublic information, relating to any such inquiry
or proposal or otherwise facilitate any effort or attempt to make or
implement a takeover proposal; provided, however, that the Company may
communicate information about any such takeover proposal to its
stockholders if, in the judgment of the Company's Board of Directors, based
upon the advice of outside counsel, such communication is required under
applicable law; provided further, however, that nothing contained in this
Section 6.1(d) shall prohibit the Company from furnishing information to,
or entering into discussions or negotiations with, any person or entity
that makes an unsolicited, bona fide takeover proposal that constitutes a
Superior Proposal (as defined below) in each case if, and only to the
extent that (A) such actions occur at a time prior to approval of the
Merger Agreement by the Company's stockholders, (B) the Board of Directors
of the Company concludes in good faith, after consultation with and based
upon the advice of outside counsel, that it is required to do so in order
to comply with its fiduciary duties to the Company's stockholders under
applicable law, and (C) prior to taking such action, the Company receives
from such person or entity an executed confidentiality agreement and an
executed standstill agreement, each in reasonably customary form (provided
that such agreements shall contain terms that are no less restrictive than
the terms of any such agreement between Buyer and the Company). For
purposes of this Agreement, "Superior Proposal" means any bona fide written
takeover proposal for or in respect of all of the outstanding shares of
Company Common Stock, (i) on terms that the Board of Directors of the
Company determines in its good faith judgment (after consultation with a
financial advisor of nationally recognized reputation and taking into
account all the terms and conditions of the takeover proposal deemed
relevant by such Board of Directors, including the consideration to be paid
pursuant thereto, any break-up fees, expense reimbursement provisions,
conditions to consummation, and the ability of the party making such
proposal to obtain financing therefor) are more favorable from a financial
point of view to its stockholders than the Merger, and (ii) that
constitutes a transaction that, in such Board of Directors' good faith
judgment, is reasonably likely to be consummated on the terms set forth,
taking into account all legal, financial, regulatory and other aspects of
such proposal. The Company will immediately cease and cause to be
terminated any existing activities, discussions or negotiations previously
conducted with any parties other than Buyer with respect to any of the
foregoing. The Company will take all actions necessary or advisable to
inform the appropriate individuals or entities referred to in the first
sentence hereof of the obligations undertaken in this Section 6.1(d). The
Company will notify Buyer immediately if any such inquiries or takeover
proposals are received by, any such information is requested from, or any
such negotiations or discussions are sought to be initiated or continued
with, the Company, and the Company will promptly inform Buyer in writing of
all of the relevant details with respect to the foregoing. As used in this
Agreement, "takeover proposal" shall mean any tender or exchange offer,
proposal for a merger, consolidation or other business combination
involving the Company or any Subsidiary of the Company or any proposal or
offer to acquire in any manner a substantial equity interest in, or a
substantial portion of the assets of, the Company or any Subsidiary of the
Company other than the transactions contemplated or permitted by this
Agreement and the Option Agreement;
(e) make any capital expenditures other than those which
(i) are made in the ordinary course of business or are necessary to
maintain existing assets in good repair and (ii) in any event are in an
amount of no more than $500,000 in the aggregate;
(f) enter into any new line of business;
(g) acquire or agree to acquire, by merging or
consolidating with, or by purchasing a substantial equity interest in or a
substantial portion of the assets of, or by any other manner, any business
or any corporation, partnership, association or other business organization
or division thereof or otherwise acquire any assets, which would be
material, individually or in the aggregate, to the Company, other than in
connection with foreclosures, settlements in lieu of foreclosure or
troubled loan or debt restructurings in the ordinary course of business
consistent with prudent banking practices;
(h) take any action that is intended or may reasonably be
expected to result in any of its representations and warranties set forth
in this Agreement being or becoming untrue in any material respect, or in
any of the conditions to the Merger set forth in Article VIII not being
satisfied;
(i) change its methods of accounting in effect at June 30,
1998 except as required by changes in GAAP or regulatory accounting
principles as concurred to by the Company's independent auditors;
(j) (i) except as required by applicable law or as required
to maintain qualification pursuant to the Code, adopt, amend, renew or
terminate any employee benefit plan (including, without limitation, any
Plan) or any agreement, arrangement, plan or policy between the Company or
any Subsidiary of the Company and one or more of its current or former
directors, officers or employees or (ii) except for normal increases in the
ordinary course of business consistent with past practice or except as
required by applicable law, increase in any manner the compensation or
fringe benefits of any director, officer or employee or pay any benefit not
required by any Plan or agreement as in effect as of the date hereof
(including, without limitation, the granting of stock options, stock
appreciation rights, restricted stock, restricted stock units or
performance units or shares);
(k) take or cause to be taken any action which would
disqualify the Merger as a tax free reorganization under Section 368(a) of
the Code;
(l) other than activities in the ordinary course of
business consistent with past practice, sell, lease, encumber, assign or
otherwise dispose of, or agree to sell, lease, encumber, assign or
otherwise dispose of, any of its material assets, properties or other
rights or agreements;
(m) other than in the ordinary course of business
consistent with past practice, incur any indebtedness for borrowed money or
assume, guarantee, endorse or otherwise as an accommodation become
responsible for the obligations of any other individual, corporation or
other entity;
(n) file any application to relocate or terminate the
operations of any banking office of it or any of its Subsidiaries;
(o) make any equity investment or commitment to make such
an investment in real estate or in any real estate development project,
other than in connection with foreclosures, settlements in lieu of
foreclosure or troubled loan or debt restructurings in the ordinary course
of business consistent with prudent banking practices;
(p) create, renew, amend or terminate or give notice of a
proposed renewal, amendment or termination of, any material contract,
agreement or lease for goods, services or office space to which the Company
or any of its Subsidiaries is a party or by which the Company or any of its
Subsidiaries or their respective properties is bound;
(q) other than in prior consultation with Buyer,
restructure or materially change its investment securities portfolio,
through purchases, sales or otherwise, or the manner in which the portfolio
is classified or reported; or
(r) agree to do any of the foregoing.
6.2. Covenants of Buyer. During the period from the date of
this Agreement and continuing until the Effective Time, except as expressly
contemplated or permitted by this Agreement or the Option Agreement or with
the prior written consent of the Company, Buyer and its Subsidiaries shall
carry on their respective businesses in the ordinary course consistent with
prudent banking practice. Except as set forth in Section 6.2 of the Buyer
Disclosure Schedule or as otherwise contemplated by this Agreement or
consented to in writing by the Company, Buyer shall not, and shall not
permit any of its Subsidiaries to:
(a) solely in the case of Buyer, declare or pay any
extraordinary or special dividends on or make any other extraordinary or
special distributions in respect of any of its capital stock; provided,
however, that nothing contained herein shall prohibit Buyer from increasing
the quarterly cash dividend on the Buyer Common Stock;
(b) take any action that is intended or may reasonably be
expected to result in any of its representations and warranties set forth
in this Agreement being or becoming untrue in any material respect, or in
any of the conditions to the Merger set forth in Article VIII not being
satisfied;
(c) change its methods of accounting in effect at December
31, 1998, except in accordance with changes in GAAP or regulatory
accounting principles as concurred to by Buyer's independent auditors;
(d) take or cause to be taken any action which would
disqualify the Merger as a tax free reorganization under Section 368(a) of
the Code; or
(e) change any provisions of the Certificate of
Incorporation of the Buyer, other than as disclosed in Section 6.2(e) of
the Buyer Disclosure Schedule;
(f) agree to do any of the foregoing.
ARTICLE VII
ADDITIONAL AGREEMENTS
7.1. Regulatory Matters. (a) The Company shall promptly
prepare and file with the SEC the Proxy Statement and Buyer shall promptly
prepare and file with the SEC the S-4, in which the Proxy Statement will be
included as a prospectus. Each of the Company and Buyer shall use all
reasonable efforts to have the S-4 declared effective under the Securities
Act as promptly as practicable after such filing, and the Company shall
thereafter mail the Proxy Statement to its stockholders. Buyer shall also
use all reasonable efforts to obtain all necessary state securities law or
"Blue Sky" permits and approvals required to carry out the transactions
contemplated by this Agreement, and the Company shall furnish all
information concerning the Company and the holders of Company Common Stock
as may be reasonably requested in connection with any such action.
(b) The parties hereto shall cooperate with each other and
use their reasonable best efforts to promptly prepare and file all
necessary documentation, to effect all applications, notices, petitions and
filings, and to obtain as promptly as practicable all permits, consents,
approvals and authorizations of all third parties and Governmental Entities
which are necessary or advisable to consummate the transactions
contemplated by this Agreement. The Company and Buyer shall have the right
to review in advance, and to the extent practicable each will consult the
other on, in each case subject to applicable laws relating to the exchange
of information, all the information relating to the Company or Buyer, as
the case may be, and any of their respective Subsidiaries, which appears in
any filing made with, or written materials submitted to, any third party or
any Governmental Entity in connection with the transactions contemplated by
this Agreement. In exercising the foregoing right, each of the parties
hereto shall act reasonably and as promptly as practicable. The parties
hereto agree that they will consult with each other with respect to the
obtaining of all permits, consents, approvals and authorizations of all
third parties and Governmental Entities necessary or advisable to
consummate the transactions contemplated by this Agreement and each party
will keep the other apprised of the status of matters relating to
completion of the transactions contemplated herein.
(c) Buyer and the Company shall, upon request, furnish each
other with all information concerning themselves, their Subsidiaries,
directors, officers and stockholders and such other matters as may be
reasonably necessary or advisable in connection with the Proxy Statement,
the S-4 or any other statement, filing, notice or application made by or on
behalf of Buyer, the Company or any of their respective Subsidiaries to any
Governmental Entity in connection with the Merger and the other
transactions contemplated by this Agreement.
(d) Buyer and the Company shall promptly furnish each other
with copies of written communications received by Buyer or the Company, as
the case may be, or any of their respective Subsidiaries, Affiliates or
Associates (as such terms are defined in Rule 12b-2 under the Exchange Act
as in effect on the date of this Agreement) from, or delivered by any of
the foregoing to, any Governmental Entity in respect of the transactions
contemplated hereby.
7.2. Access to Information. (a) Upon reasonable notice and
subject to applicable laws relating to the exchange of information, the
Company shall, and shall cause each of its Subsidiaries to, afford to the
officers, employees, accountants, counsel and other representatives of
Buyer, access, during normal business hours during the period prior to the
Effective Time, to all its properties, books, contracts, commitments,
records, officers, employees, accountants, counsel and other
representatives and, during such period, the Company shall, and shall cause
its Subsidiaries to, make available to Buyer (i) a copy of each report,
schedule, registration statement and other document filed or received by it
during such period pursuant to the requirements of Federal securities laws
or Federal or state banking laws (other than reports or documents which the
Company is not permitted to disclose under applicable law) and (ii) all
other information concerning its business, properties and personnel as
Buyer may reasonably request. Neither the Company nor any of its
Subsidiaries shall be required to provide access to or to disclose
information where such access or disclosure would violate or prejudice the
rights of the Company's customers, jeopardize any attorney-client privilege
or contravene any law, rule, regulation, order, judgment, decree, fiduciary
duty or binding agreement entered into prior to the date of this Agreement.
The parties hereto will make appropriate substitute disclosure arrangements
under circumstances in which the restrictions of the preceding sentence
apply.
(b) Upon reasonable notice and subject to applicable laws
relating to the exchange of information, Buyer shall, and shall cause its
Subsidiaries to, afford to the officers, employees, accountants, counsel
and other representatives of the Company, access, during normal business
hours during the period prior to the Effective Time, to such information
regarding Buyer and its Subsidiaries as shall be reasonably necessary for
the Company to fulfill its obligations pursuant to this Agreement to assist
in the preparation of the Proxy Statement or which may be reasonably
necessary for the Company to confirm that the representations and
warranties of Buyer contained herein are true and correct and that the
covenants of Buyer contained herein have been performed in all material
respects. Neither Buyer nor any of its Subsidiaries shall be required to
provide access to or to disclose information where such access or
disclosure would violate or prejudice the rights of Buyer's customers,
jeopardize any attorney-client privilege or contravene any law, rule,
regulation, order, judgment, decree, fiduciary duty or binding agreement
entered into prior to the date of this Agreement. The parties hereto will
make appropriate substitute disclosure arrangements under circumstances in
which the restrictions of the preceding sentence apply.
(c) All information furnished by either party to the other
party or its representatives pursuant hereto shall be treated as the sole
property of the delivery party and, if the Merger shall not occur, the
receiving party and its representatives shall return to the delivering
party all of such written information and all documents, notes, summaries
or other materials containing, reflecting or referring to, or derived from,
such information. The receiving party shall, and shall use its best
efforts to cause its representatives to, keep confidential all such
information, and shall not directly or indirectly use such information for
any competitive or other commercial purpose. The obligation to keep such
information confidential shall continue for ten years from the date the
proposed Merger is abandoned and shall not apply to (i) any information
which (x) was already in the receiving party's possession prior to the
disclosure thereof by the delivering party; (y) was then generally known to
the public; or (z) was disclosed to the receiving party by a third party
not bound by an obligation of confidentiality or (ii) disclosures made as
required by law. It is further agreed that, if in the absence of a
protective order or the receipt of a waiver hereunder the receiving party
is nonetheless, in the opinion of its counsel, compelled to disclose
information concerning delivering party to any tribunal or governmental
body or agency or else stand liable for contempt or suffer other censure or
penalty, the receiving party may disclose such information to such tribunal
or governmental body or agency without liability hereunder.
(d) No investigation by either of the parties or their
respective representatives shall affect the representations, warranties,
covenants or agreements of the other set forth herein.
7.3. Stockholder Meetings. The Company shall take all steps
necessary to duly call, give notice of, convene and hold a meeting of its
stockholders to be held as soon as is reasonably practicable after the date
on which the S-4 becomes effective for the purpose of voting upon the
approval of this Agreement and the consummation of the transactions
contemplated hereby. The Company will, through its Board of Directors,
recommend to its stockholders approval of this Agreement and the
transactions contemplated hereby and such other matters as may be submitted
to its stockholders in connection with this Agreement; provided, however,
that nothing shall prohibit the Board of Directors of the Company from
withdrawing or modifying in a manner adverse to Buyer such recommendation
to the Company's stockholders if (a) the Company is not in breach of, and
has not breached, any of the provisions of Section 6.1(d), (b) the Company
receives an unsolicited, bona fide written takeover proposal which
constitutes a Superior Proposal (each as defined in Section 6.1(d)), and
(c) the Board of Directors of the Company determines in good faith that it
is required to take such action, but only after consultation with outside
counsel and only if such outside counsel concludes and advises the Board
that the failure to take such action would result in a violation of its
fiduciary duties under applicable law.
7.4. Legal Conditions to Merger. Each of Buyer and the Company
shall, and shall cause its Subsidiaries to, use their reasonable best
efforts (a) to take, or cause to be taken, all actions necessary, proper or
advisable to comply promptly with all legal requirements which may be
imposed on such party or its Subsidiaries with respect to the Merger and,
subject to the conditions set forth in Article VIII hereof, to consummate
the transactions contemplated by this Agreement and (b) to obtain (and to
cooperate with the other party to obtain) any consent, authorization, order
or approval of, or any exemption by, any Governmental Entity and any other
third party which is required to be obtained by the Company or Buyer or any
of their respective Subsidiaries in connection with the Merger and the
other transactions contemplated by this Agreement, and to comply with the
terms and conditions of such consent, authorization, order or approval.
7.5. Affiliates. The Company shall use its reasonable best
efforts to cause each director, executive officer and other person who is
an "affiliate" (for purposes of Rule 145 under the Securities Act) of the
Company to deliver to Buyer, as soon as practicable after the date of this
Agreement, a written agreement, in the form of Exhibit 7.5 hereto.
7.6. Stock Exchange Listing. Buyer shall use all reasonable
efforts to cause the shares of Buyer Common Stock to be issued in the
Merger to be approved for listing on the NYSE, subject to official notice
of issuance, as of the Effective Time.
7.7. Employee Benefit Plans; Existing Agreements. (a) As soon
as practicable following the Effective Time, the employees of the Company
and its Subsidiaries (the "Company Employees") shall be eligible to
participate in Buyer's employee benefit plans in which similarly situated
employees of Buyer or Buyer Bank participate, to the same extent as
similarly-situated employees of Buyer or Buyer Bank (it being understood
that inclusion of Company Employees in Buyer's employee benefit plans may
occur at different times with respect to different plans) provided,
however, that Buyer shall continue the comparable plans of Company and its
Subsidiaries for the exclusive benefit of Company Employees until such time
Company Employees become eligible to participate in the plans of Buyer or
Buyer Bank. Company's ESOP shall terminate as of the Effective Time and
prior to such time Company shall make contributions to the ESOP sufficient
to enable the trustee of the plan to repay in full all outstanding
acquisition loans of the plan. If Company cannot make contributions
sufficient to enable the trustee to repay such loans in full by reasons of
the operation of Section 415(c) of the Code then, in accordance with the
terms of the ESOP, the trustee shall sell a number of shares sufficient to
repay the remaining portion of the loan. All shares of stock and cash held
by the plan as of the Effective Time shall be allocated to participants of
the ESOP in accordance with its terms.
(b) With respect to each Buyer Plan that is an "employee benefit
plan," as defined in Section 3(3)of ERISA, for purposes of determining
eligibility to participate, vesting, and entitlement to benefits, including
for severance benefits and vacation entitlement (but not for accrual of
pension benefits), service with the Company and its Subsidiaries shall be
treated as service with Buyer; provided however, that such service shall
not be recognized to the extent that such recognition would result in a
duplication of benefits. Such service also shall apply for purposes of
satisfying any waiting periods, evidence of insurability requirements, or
the application of any preexisting condition limitations. Company
Employees shall be given credit for amounts paid under a corresponding
benefit plan during the same period for purposes of applying deductibles,
copayments and out-of-pocket maximums as though such amounts had been paid
in accordance with the terms and conditions of the Buyer Plan.
(c) Buyer shall honor and shall cause the appropriate
Subsidiaries of Buyer to honor and Company shall pay at the Closing Date,
in accordance with their terms all employment, severance and other
compensation agreements and arrangements existing prior to the execution of
this Agreement which are between the Company or any of its Subsidiaries and
any director, officer or employee thereof and which have been disclosed in
the Company Disclosure Schedule and previously have been delivered to
Buyer. All payments under employment and change in control agreements,
identified in Section 4.15(a) of the Company Disclosure Schedule between
the Company or its Subsidiaries and individual officers and employees of
the Company or its Subsidiaries shall be paid by the Company at the Closing
Date regardless of whether or not such individual continues in employment
with Buyer or its Subsidiaries. The Company Disclosure Schedule sets forth
the reasonable, good faith estimates of amounts payable under employment
and severance agreements between the Company or its Subsidiaries and
certain individuals and the amounts shown and methodology used in preparing
such estimates shall be followed in determining the actual amounts payable
under such agreements.
(d) Employees of the Company and its Subsidiaries shall be
entitled to receive payment for accrued but unused vacation days and any
accrued but unused vacation days of employees of the Company or its
Subsidiaries as of the Closing Date shall, at the employee's option, either
be paid immediately prior to the Closing Date or taken as vacation as soon
as practicable following the Closing Date; provided, however, that the
Company shall deliver to Buyer, not later than fifteen (15) business days
after the date of this Agreement, a schedule of employees indicating their
accrued but unused vacation days as of the most recent date practicable.
(e) The Company or its Subsidiaries shall pay bonuses in
accordance with its past practices through December 31, 1999, and the
compensation with respect to which bonuses are paid for any individual
shall be for the period of time that has elapsed since the payment of the
last bonus. At the Closing Date each Company Employee shall be entitled to
receive a bonus equal to the bonus received by such Company Employee for
the period ended as of December 31, 1999, multiplied by a fraction, the
numerator of which shall be the number of days from December 31 through the
date on which the Closing Date occurs and the denominator of which is 366
(in the case of employees who were paid annual bonuses as of December 31)
and 180 days (in the case of employees who received semi annual bonuses as
of both June 30 and December 31), as the case may be.
7.8. Indemnification. (a) In the event of any threatened or
actual claim, action, suit, proceeding or investigation, whether civil,
criminal or administrative, including, without limitation, any such claim,
action, suit, proceeding or investigation in which any person who is now,
or has been at any time prior to the date of this Agreement, or who becomes
prior to the Effective Time, a director or officer of the Company or any of
its Subsidiaries (the "Indemnified Parties") is, or is threatened to be,
made a party based in whole or in part on, or arising in whole or in part
out of, or pertaining to (i) the fact that he is or was a director or
officer of the Company, any of the Subsidiaries of the Company or any of
their respective predecessors or (ii) this Agreement or any of the
transactions contemplated hereby, whether in any case asserted or arising
before or after the Effective Time, the parties hereto agree to cooperate
and use their best efforts to defend against and respond thereto. It is
understood and agreed that after the Effective Time, Buyer shall indemnify
and hold harmless, as and to the extent permitted by law, each such
Indemnified Party against any losses, claims, damages, liabilities, costs,
expenses (including reasonable attorney's fees and expenses in advance of
the final disposition of any claim, suit, proceeding or investigation to
each Indemnified Party to the fullest extent permitted by law upon receipt
of any undertaking required by applicable law), judgments, fines and
amounts paid in settlement in connection with any such threatened or actual
claim, action, suit, proceeding or investigation, and in the event of any
such threatened or actual claim, action, suit, proceeding or investigation
(whether asserted or arising before or after the Effective Time), the
Indemnified Parties may retain counsel reasonably satisfactory to them
after consultation with Buyer; provided, however, that (1) Buyer shall have
the right to assume the defense thereof with counsel reasonably acceptable
to the Indemnified party and upon such assumption Buyer shall not be liable
to any Indemnified Party for any legal expenses of other counsel or any
other expenses subsequently incurred by any Indemnified Party in connection
with the defense thereof, except that if Buyer elects not to assume such
defense or counsel for the Indemnified Parties reasonably advises that
there are issues which raise conflicts of interest between Buyer and the
Indemnified Parties, the Indemnified Parties may retain counsel reasonably
satisfactory to them after consultation with Buyer, and Buyer shall pay the
reasonable fees and expenses of such counsel for the Indemnified Parties,
(2) Buyer shall in all cases be obligated pursuant to this paragraph to pay
for only one firm of counsel with respect to any claim, action or suit for
all Indemnified Parties, (3) Buyer shall not be liable for any settlement
effected without its prior written consent (which consent shall not be
unreasonably withheld) and (4) Buyer shall have no obligation hereunder to
any Indemnified Party when and if a court of competent jurisdiction shall
ultimately determine, and such determination shall have become final and
nonappealable, that indemnification of such Indemnified Party in the manner
contemplated hereby is prohibited by applicable law. Any Indemnified Party
wishing to claim Indemnification under this Section 7.8, upon learning of
any such claim, action, suit, proceeding or investigation, shall notify
promptly Buyer thereof, provided that the failure to so notify shall not
affect the obligations of Buyer under this Section 7.8 except to the extent
such failure to notify prejudices Buyer. Buyer's obligations under this
Section 7.8 shall continue in full force and effect for a period of six (6)
years from the Effective Time; provided, however, that all rights to
indemnification in respect of any claim (a "Claim") asserted or made within
such period shall continue until the final disposition of such Claim.
(b) Buyer shall cause the persons serving as officers and
directors of the Company immediately prior to the Effective Time to be
covered for a period of six (6) years from the Effective Time by the
directors' and officers' liability insurance policy maintained by the
Company (provided that Buyer may substitute therefor policies of at least
the same coverage and amounts containing terms and conditions which are not
less advantageous than such policy) with respect to acts or omissions
occurring prior to the Effective Time which were committed by such officers
and directors in their capacity as such; provided, however, that in no
event shall Buyer be required to expend on an annual basis more than 175%
of the current amount expended by the Company (the "Insurance Amount") to
maintain or procure insurance coverage, and further provided that if Buyer
is unable to maintain or obtain the insurance called for by this Section
7.8(b) Buyer shall use all reasonable efforts to obtain as much comparable
insurance as is available for the Insurance Amount.
(c) In the event Buyer or any of its successors or assigns
(i) consolidates with or merges into any other person and shall not be the
continuing or surviving corporation or entity of such consolidation or
merger, or (ii) transfers or conveys all or substantially all of its
properties and assets to any person, then, and in each such case, to the
extent necessary, proper provision shall be made so that the successors and
assigns of Buyer assume the obligations set forth in this section.
(d) The provisions of this Section 7.8 are intended to be
for the benefit of, and shall be enforceable by, each Indemnified Party and
his or her heirs and representatives.
7.9. Additional Agreements. In case at any time after the
Effective Time any further action is necessary or desirable to carry out
the purposes of this Agreement or to vest the Surviving Corporation with
full title to all properties, assets, rights, approvals, immunities and
franchises of any of the parties to the Merger, the proper officers and
directors of each party to this Agreement and their respective Subsidiaries
shall take all such necessary action as may be reasonably requested by
Buyer.
7.10. Advice of Changes. Buyer and the Company shall promptly
advise the other party of any change or event having a Material Adverse
Effect on it or which it believes would or would be reasonably likely to
cause or constitute a material breach of any of its representations,
warranties or covenants contained herein. From time to time prior to the
Effective Time (and on the date prior to the Closing Date), each party will
supplement or amend its Disclosure Schedules delivered in connection with
the execution of this Agreement to reflect any matter which, if existing,
occurring or known at the date of this Agreement, would have been required
to be set forth or described in such Disclosure Schedules or which is
necessary to correct any information in such Disclosure Schedules which has
been rendered inaccurate thereby. No supplement or amendment to such
Disclosure Schedules shall have any effect for the purpose of determining
satisfaction of the conditions set forth in Sections 8.2(a) or 8.3(a)
hereof, as the case may be, or the compliance by the Company or Buyer, as
the case may be, with the respective covenants and agreements of such
parties contained herein.
7.11. Current Information. (a) During the period from the
date of this Agreement to the Effective Time, the Company will cause one or
more of its designated representatives to confer on a regular and frequent
basis (not less than monthly) with representatives of Buyer and to report
the general status of the ongoing operations of the Company and its
Subsidiaries. The Company will promptly notify Buyer of any material
change in the normal course of business or in the operation of the
properties of the Company or any of its Subsidiaries and of any
governmental complaints, investigations or hearings (or communications
indicating that the same may be contemplated), or the institution or the
threat of significant litigation involving the Company or any of its
Subsidiaries, and will keep Buyer fully informed of such events.
(b) During the period from the date of this Agreement to
the Effective Time, Buyer shall inform the Company of any proposed
acquisition or merger transaction involving Buyer.
7.12. Execution and Authorization of Bank Merger Agreement. As
soon as reasonably practicable following a request made by Buyer, (a) Buyer
shall (i) cause the Board of Directors of Buyer Bank to approve an
Agreement and Plan of Merger providing for the merger of Company Bank into
Buyer Bank (the "Bank Merger Agreement"), (ii) cause Buyer Bank to execute
and deliver the Bank Merger Agreement, and (iii) approve the Bank Merger
Agreement as the sole stockholder of Buyer Bank, and (b) the Company shall
(i) cause the Board of Directors of the Company Bank to approve the Bank
Merger Agreement, (ii) cause the Company Bank to execute and deliver the
Bank Merger Agreement, and (iii) approve the Bank Merger Agreement as the
sole stockholder of the Company Bank. The Bank Merger Agreement shall
contain terms that are normal and customary in light of the transactions
contemplated hereby and such additional terms as are necessary to carry out
the purposes of this Agreement.
7.13. Coordination of Dividends. From the date of this
Agreement to the Effective Time, each of Buyer and the Company shall
coordinate with the other the declaration, record and payment dates with
respect to dividends in respect of the Buyer Common Stock and the Company
Common Stock and the record dates and payments dates relating thereto, it
being the intention of the parties that the holders of Buyer Common Stock
or Company Common Stock shall not receive more than one dividend, or fail
to receive one dividend, for any single calendar quarter with respect to
their shares of Buyer Common Stock and/or Company Common Stock and any
shares of Buyer Common Stock any holder of Company Common Stock receives in
exchange therefor in the Merger.
7.14. Directorship. Effective as of the Effective Time, Buyer
shall cause its Board of Directors to be expanded by one member and shall
appoint Xxxxxxx X. Xxxxxxx to fill the vacancy on Buyer's Board of
Directors created by such increase as of the Effective Time and shall cause
Xx. Xxxxxxx to be nominated for election to the Board of Directors for a
period not less than three (3) years.
7.15. Accountants' Letter. The Company shall use its reasonable
efforts to cause to be delivered to Buyer a letter of its independent
public accountants dated (i) the date on which the S-4 shall become
effective and (ii) a date shortly prior to the Effective Time, and
addressed to Buyer, in form and substance customary for "comfort" letters
delivered by independent accountants in accordance with Statement of
Financial Accounting Standards No. 72.
7.16. Certain Revaluations, Changes and Adjustments. At or
before the Effective Time, upon the request of Buyer, the Company shall,
consistent with GAAP, modify and change its loan, litigation and real
estate valuation policies and practices (including loan classifications and
levels of reserves) so as to be applied consistently on a mutually
satisfactory basis with those of Buyer and establish such accruals and
reserves as shall be necessary to reflect Merger-related expenses and costs
incurred by the Company, provided, however, that the Company shall not be
required to take such action unless Parent acknowledges in writing that all
conditions to closing set forth in Article VIII have been satisfied or
waived (other than those conditions relating to delivery of documents on
the Closing Date); provided further, however, that no accrual or reserve
made by the Company or any Company Subsidiary pursuant to this Section 7.16
shall constitute or be deemed to be a breach, violation of or failure to
satisfy any representation, warranty, covenant, condition or other
provision of this Agreement or otherwise be considered in determining
whether any such breach, violation or failure to satisfy shall have
occurred.
7.17. Year 2000. Each of Buyer and the Company shall use its
commercially reasonable efforts to implement its respective Y2K Plan. At
the request of the other party, each of Buyer and the Company shall
periodically update the other party regarding its process with respect to
its Y2K Plan.
7.18. It is understood by the parties that the Merger shall be
accounted for under the Purchase Method of accounting. Accordingly, the
parties agree to use all reasonable efforts to cause the Effective Time to
occur prior to the consummation of the Merger of Buyer with JSB Financial,
Inc. pursuant to the Agreement and Plan of Merger between such parties
dated as of August 16, 1999.
7.19. Advisory Board. Buyer shall, as of the Effective Time,
invite Xxxxxx X. Xxxxxxxx and all of the members of the Company's Board of
Directors as of the date of this Agreement, other than Xx. Xxxxxxx, who are
willing to serve to be appointed as members of Buyer's advisory board (the
"Advisory Board"). The members of the Advisory Board who are willing to so
serve shall be elected to a term of three (3) years beginning on the
Closing Date and shall receive an annual retainer fee in the amount set
forth in Section 7.19 of the Buyer Disclosure Schedule.
ARTICLE VIII
CONDITIONS PRECEDENT
8.1. Conditions to Each Party's Obligation To Effect the Merger.
The respective obligations of each party to effect the Merger shall be
subject to the satisfaction at or prior to the Effective Time of the
following conditions:
(a) Stockholder Approval. This Agreement shall have been
approved and adopted by the requisite vote of the holders of the
outstanding shares of Company Common Stock under applicable law.
(b) NYSE Listing. The shares of Buyer Common Stock which
shall be issued to the stockholders of the Company upon consummation of the
Merger shall have been authorized for listing on the NYSE, subject to
official notice of issuance.
(c) Other Approvals. All regulatory approvals required to
consummate the transactions contemplated hereby (including the Merger)
shall have been obtained and shall remain in full force and effect and all
statutory waiting periods in respect thereof shall have expired (all such
approvals and the expiration of all such waiting periods being referred to
herein as the "Requisite Regulatory Approvals").
(d) S-4. The S-4 shall have become effective under the
Securities Act and no stop order suspending the effectiveness of the S-4
shall have been issued and no proceedings for that purpose shall have been
initiated or threatened by the SEC.
(e) No Injunctions or Restraints; Illegality. No order,
injunction or decree issued by any court or agency of competent
jurisdiction or other legal restraint or prohibition (an "Injunction")
preventing the consummation of the Merger shall be in effect. No statute,
rule, regulation, order, injunction or decree shall have been enacted,
entered, promulgated or enforced by any Governmental Entity which
prohibits, restricts or makes illegal consummation of the Merger.
8.2. Conditions to Obligations of Buyer. The obligation of
Buyer to effect the Merger is also subject to the satisfaction or waiver by
Buyer at or prior to the Effective Time of the following conditions:
(a) Representations and Warranties. (i) Subject to Section
3.2, the representations and warranties of the Company set forth in this
Agreement (other than those set forth in Sections 4.2, 4.3(a), 4.3(b)(i),
4.6, 4.7, 4.8(a)(ii), 4.8(b), 4.11(a), 4.12, 4.15(a), 4.18, 4.21, 4.26 and
4.27) shall be true and correct as of the date of this Agreement and
(except to the extent such representations and warranties speak as of an
earlier date) as of the Closing Date as though made on and as of the
Closing Date; and (ii) the representations and warranties of the Company
set forth in Sections 4.2, 4.3(a), 4.3(b)(i), 4.6, 4.7, 4.8(a)(ii), 4.8(b),
4.11(a), 4.12, 4.15(a), 4.18, 4.21, 4.26 and 4.27 of this Agreement shall
be true and correct in all material respects (without giving effect to
Section 3.2 of this Agreement) as of the date of this Agreement and (except
to the extent such representations and warranties speak as of an earlier
date) as of the Closing Date as though made on and as of the Closing Date.
Buyer shall have received a certificate signed on behalf of the Company by
the Chief Executive Officer and the Chief Financial Officer of the Company
to the foregoing effect.
(b) Performance of Obligations of the Company. The Company
shall have performed in all material respects all obligations required to
be performed by it under this Agreement at or prior to the Closing Date,
and Buyer shall have received a certificate signed on behalf of the Company
by the Chief Executive Officer and the Chief Financial Officer of the
Company to such effect.
(c) Consents Under Agreements. The consent, approval or
waiver of each person (other than the Governmental Entities referred to in
Section 8.1(c)) whose consent or approval shall be required in order to
permit the succession by the Surviving Corporation pursuant to the Merger
to any obligation, right or interest of the Company or any Subsidiary of
the Company under any loan or credit agreement, note, mortgage, indenture,
lease, license or other agreement or instrument shall have been obtained,
except where the failure to obtain such consent, approval or waiver would
not have a Material Adverse Effect on the Company.
(d) No Pending Governmental Actions. No proceeding
initiated by any Governmental Entity seeking an Injunction shall be
pending.
(e) Federal Income Tax Opinion. Buyer shall have received
an opinion of Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP, counsel to Buyer
("Buyer's Counsel"), dated the Effective Date, in form and substance
reasonably satisfactory to Buyer, substantially to the effect that, on the
basis of facts, representations and assumptions set forth in such opinion
which are consistent with the state of facts existing at the Effective
Time, the Merger will be treated as a reorganization within the meaning of
Section 368(a) of the Code. In rendering such opinion, Buyer's Counsel may
require and rely upon representations and covenants, including those
contained in certificates of officers of Buyer, the Company and others
reasonably satisfactory in form and substance to such counsel.
8.3. Conditions to Obligations of the Company. The obligation
of the Company to effect the Merger is also subject to the satisfaction or
waiver by the Company at or prior to the Effective Time of the following
conditions:
(a) Representations and Warranties. (i) Subject to
Section 3.2, the representations and warranties of Buyer (other than those
set forth in Sections 5.2, 5.3(a), 5.3(b), 5.3(c)(i), 5.6, 5.7, 5.8(ii),
5.11(a), 5.12 and 5.15) set forth in this Agreement shall be true and
correct as of the date of this Agreement and (except to the extent such
representations and warranties speak as of an earlier date) as of the
Closing Date as though made on and as of the Closing Date; and (ii) the
representations and warranties of Buyer set forth in Sections 5.2, 5.3(a),
5.3(b), 5.3(c)(i), 5.6, 5.7, 5.8(ii), 5.11(a), 5.12 and 5.15 of this
Agreement shall be true and correct in all material respects (without
giving effect to Section 3.2 of this Agreement) as of the date of this
Agreement and (except to the extent such representations and warranties
speak as of an earlier date) as of the Closing Date as though made on and
as of the Closing Date. The Company shall have received a certificate
signed on behalf of Buyer by the Chief Executive Officer and the Chief
Financial Officer of Buyer to the foregoing effect.
(b) Performance of Obligations of Buyer. Buyer shall have
performed in all material respects all obligations required to be performed
by it under this Agreement at or prior to the Closing Date, and the Company
shall have received a certificate signed on behalf of Buyer by the Chief
Executive Officer and the Chief Financial Officer of Buyer to such effect.
(c) Consents Under Agreements. The consent, approval or
waiver of each person (other than the Governmental Entities referred to in
Section 8.1(c)) whose consent or approval shall be required in connection
with the transactions contemplated hereby under any loan or credit
agreement, note, mortgage, indenture, lease, license or other agreement or
instrument to which Buyer or any of its Subsidiaries is a party or is
otherwise bound shall have been obtained, except where failure to obtain
such consents and approvals would not, individually or in the aggregate,
have a Material Adverse Effect on Buyer and its Subsidiaries taken as a
whole (after giving effect to the transactions contemplated hereby).
(d) No Pending Governmental Actions. No proceeding
initiated by any Governmental Entity seeking an Injunction shall be
pending.
(e) Federal Income Tax Opinion. The Company shall have
received an opinion of Xxxxxxx, Xxxxxx & Xxxxxxxx LLP (the "Company's
Counsel"), in form and substance reasonably satisfactory to the Company,
dated the Effective Date, substantially to the effect that, on the basis of
facts, representations and assumptions set forth in such opinion which are
consistent with the state of facts existing at the Effective Time, the
Merger will be treated as a reorganization within the meaning of Section
368(a) of the Code. In rendering such opinion, the Company's Counsel may
require and rely upon representations and covenants, including those
contained in certificates of officers of Buyer, the Company and others,
reasonably satisfactory in form and substance to such counsel.
ARTICLE IX
TERMINATION AND AMENDMENT
9.1. Termination. This Agreement may be terminated at any time
prior to the Effective Time, whether before or after approval of the
matters presented in connection with the Merger by the stockholders of the
Company:
(a) by mutual consent of the Company and Buyer in a written
instrument, if the Board of Directors of each so determines by a vote of a
majority of the members of its entire Board;
(b) by either Buyer or the Company upon written notice to
the other party (i) 60 days after the date on which any request or
application for a Requisite Regulatory Approval shall have been denied or
withdrawn at the request or recommendation of the Governmental Entity which
must grant such Requisite Regulatory Approval, unless within the 60-day
period following such denial or withdrawal a petition for rehearing or an
amended application has been filed with the applicable Governmental Entity,
provided, however, that no party shall have the right to terminate this
Agreement pursuant to this Section 9.1(b)(i) if such denial or request or
recommendation for withdrawal shall be due to the failure of the party
seeking to terminate this Agreement to perform or observe the covenants and
agreements of such party set forth herein or (ii) if any Governmental
Entity of competent jurisdiction shall have issued a final nonappealable
order enjoining or otherwise prohibiting the Merger;
(c) by either Buyer or the Company if the Merger shall not
have been consummated on or before June 30, 2000, unless the failure of the
Closing to occur by such date shall be due to the failure of the party
seeking to terminate this Agreement to perform or observe the covenants and
agreements of such party set forth herein;
(d) by either Buyer or the Company (provided that the
terminating party shall not be in material breach of any of its obligations
under Section 7.3) if any approval of the stockholders of the Company
required for the consummation of the Merger shall not have been obtained by
reason of the failure to obtain the required vote at a duly held meeting of
such stockholders or at any adjournment or postponement thereof;
(e) by either Buyer or the Company (provided that the
terminating party is not then in material breach of any representation,
warranty, covenant or other agreement contained herein) if there shall have
been a material breach of any of the representations or warranties set
forth in this Agreement on the part of the other party, which breach is not
cured within thirty days following written notice to the party committing
such breach, or which breach, by its nature, cannot be cured prior to the
Closing; provided, however, that neither party shall have the right to
terminate this Agreement pursuant to this Section 9.1(e) unless the breach
of representation or warranty, together with all other such breaches, would
entitle the party receiving such representation not to consummate the
transactions contemplated hereby under Section 8.2(a) (in the case of a
breach of representation or warranty by the Company) or Section 8.3(a) (in
the case of a breach of representation or warranty by Buyer);
(f) by either Buyer or the Company (provided that the
terminating party is not then in material breach of any representation,
warranty, covenant or other agreement contained herein) if there shall have
been a material breach of any of the covenants or agreements set forth in
this Agreement on the part of the other party, which breach shall not have
been cured within thirty days following receipt by the breaching party of
written notice of such breach from the other party hereto, or which breach,
by its nature, cannot be cured prior to the Closing;
(g) by Buyer, if the Board of Directors of the Company does
not publicly recommend in the Proxy Statement that the Company's
stockholders approve and adopt this Agreement or if, after recommending in
the Proxy Statement that stockholders approve and adopt this Agreement, the
Board of Directors of the Company shall have withdrawn, modified or amended
such recommendation in any manner adverse to Buyer; or
(h) by the Company at any time during the five business-day
period commencing on the first business day after the Determination Date
(as defined below), if both of the following conditions are satisfied:
(1) the Average Closing Price (as defined below) shall be less
than $16.20 and
(2) (i) the number obtained by dividing the Average Closing
Price by the Starting Price (such number being referred to herein as
the "Buyer Ratio") shall be less than (ii) the number obtained by
dividing the Index Price on the Determination Date by the Index Price
on the Starting Date and subtracting 0.15 from such quotient (such
number being referred to herein as the "Index Ratio"),
subject to the following provisions. If the Company elects to exercise its
termination right pursuant to the immediately preceding sentence, it shall
give prompt written notice to Buyer; provided that such notice of election
to terminate may be withdrawn at any time within the aforementioned five
business-day period. During the five business-day period commencing with
its receipt of such notice, Buyer shall have the option of adjusting the
Exchange Ratio to equal the lesser of (i) a number equal to a quotient
(rounded to the nearest one-ten-thousandth), the numerator of which is the
product of 0.85, the Starting Price and the Exchange Ratio (as then in
effect) and the denominator of which is the Average Closing Price, and (ii)
a number equal to a quotient (rounded to the nearest one-ten-thousandth),
the numerator of which is the Index Ratio multiplied by the Exchange Ratio
(as then in effect) and the denominator of which is the Buyer Ratio. If
Buyer makes the election contemplated by the preceding sentence, within
such five business-day period, it shall give prompt written notice to the
Company of such election and the revised Exchange Ratio, whereupon no
termination shall have occurred pursuant to this Section 9.1(h) and this
Agreement shall remain in effect in accordance with its terms (except as
the Exchange Ratio shall have been so modified), and any references in this
Agreement to "Exchange Ratio" shall thereafter be deemed to refer to the
Exchange Ratio as adjusted pursuant to this Section 9.1(h). For purposes
of this Section 9.1(h), the following terms shall have the meanings
indicated:
"Average Closing Price" means the average of the last reported
sale prices per share of Buyer Common Stock as reported on NYSE (as
reported in The Wall Street Journal or, if not reported therein, in another
mutually agreed upon authoritative source) for the 20 consecutive trading
days on the NYSE ending at the close of trading on the Determination Date.
"Determination Date" means the business day prior to the date on
which the last of the Requisite Regulatory Approvals shall have been
received, without regard to any requisite waiting periods in respect
thereof.
"Index Group" means the group of each of the twenty-one (21) bank
holding companies listed below, the common stock of each of which shall be
publicly traded and as to which there shall not have been, since the
Starting Date and before the Determination Date, an announcement of a
proposal for such company to be acquired or for such company to acquire
another company or companies in transactions with a value exceeding 25% of
the acquiror's market capitalization as of the Starting Date. In the event
that, on or prior to the date immediately preceding the Determination Date,
the common stock of any such company ceases to be publicly traded or any
such announcement is made with respect to any such company, such company
will be removed from the Index Group, and the weights (which have been
determined based on the number of outstanding shares of common stock)
redistributed proportionately for purposes of determining the Index Price.
The twenty-one (21) bank holding companies and the weights attributed to
them are as follows:
Company Symbol Weighting
Astoria Financial Corporation ASFC 5.67%
CCB Financial Corporation CCB 5.71%
Charter One Financial, Inc. COFI 12.05%
Xxxxxxxxxx Corporation CHZ 2.25%
Commerce Bancorp, Inc./NJ CBH 3.53%
Dime Bancorp, Inc. DME 6.52%
First Commonwealth Financial Corporation FCF 2.01%
FirstMerit Corporation FMER 7.00%
Xxxxxx Financial Corporation FULT 4.04%
GreenPoint Financial Corp. GPT 9.27%
Independence Community Bank Corp. ICBC 2.62%
Keystone Financial, Inc. KSTN 3.86%
M & T Bank Corporation MTB 10.89%
Peoples Heritage Financial Group, Inc. PHBK 5.33%
Queens County Bancorp, Inc. QCSB 1.70%
Richmond County Financial Corp. RCBK 1.88%
Xxxxxx Bancorp, Inc. RSLN 3.91%
Staten Island Bancorp, Inc. SIB 2.14%
Susquehanna Bancshares, Inc. SUSQ 1.81%
Valley National Bancorp VLY 4.77%
Xxxxxxx Financial Corporation WBST 3.03%
-------
99.99%
"Index Price" on a given date means the weighted average
(weighted in accordance with the factors listed above) of the closing
prices of the companies comprising the Index Group.
"Starting Date" means August 27, 1999.
"Starting Price" shall mean the last reported sale price per
share of Buyer Common Stock on the Starting Date, as reported by NYSE (as
reported in The Wall Street Journal or, if not reported therein, in another
mutually agreed upon authoritative source).
If Buyer of any company belonging to the Index Group declares or
effects a stock dividend, reclassification, recapitalization, split-up,
combination, exchange of shares or similar transaction between the Starting
Date and the Determination Date, the prices for the common stock of such
company or Buyer shall be appropriately adjusted for the purposes of
applying this Section 9.1(h).
9.2. Effect of Termination; Expenses. In the event of
termination of this Agreement by either Buyer or the Company as provided in
Section 9.1, this Agreement shall forthwith become void and have no effect
except that (i) Sections 7.2(c), 9.2 and 10.4 shall survive any termination
of this Agreement, and (ii) notwithstanding anything to the contrary
contained in this Agreement, no party shall be relieved or released from
any liabilities or damages arising out of its willful breach of any
provision of this Agreement.
9.3. Amendment. Subject to compliance with applicable law, this
Agreement may be amended by the parties hereto, by action taken or
authorized by their respective Boards of Directors, at any time before or
after approval of the matters presented in connection with the Merger by
the stockholders of the Company; provided, however, that after any approval
of the transactions contemplated by this Agreement by the Company's
stockholders, there may not be, without further approval of such
stockholders, any amendment of this Agreement which reduces the amount or
changes the form of the consideration to be delivered to the Company
stockholders hereunder other than as contemplated by this Agreement. This
Agreement may not be amended except by an instrument in writing signed on
behalf of each of the parties hereto.
9.4. Extension; Waiver. At any time prior to the Effective
Time, each of the parties hereto, by action taken or authorized by its
Board of Directors, may, to the extent legally allowed, (a) extend the time
for the performance of any of the obligations or other acts of the other
party hereto, (b) waive any inaccuracies in the representations and
warranties of the other party contained herein or in any document delivered
pursuant hereto and (c) waive compliance by the other party with any of its
agreements contained herein, or waive compliance with any of the conditions
to its obligations hereunder. Any agreement on the part of a party hereto
to any such extension or waiver shall be valid only if set forth in a
written instrument signed on behalf of such party, but such extension or
waiver or failure to insist on strict compliance with an obligation,
covenant, agreement or condition shall not operate as a waiver of, or
estoppel with respect to, any subsequent or other failure.
ARTICLE X
GENERAL PROVISIONS
10.1. Closing. Subject to the terms and conditions of this
Agreement, the closing of the Merger (the "Closing") will take place at
10:00 a.m. on the first day which is (a) the last business day of a month
and (b) at least two business days after the satisfaction or waiver
(subject to applicable law) of the latest to occur of the conditions set
forth in Article VIII hereof (other than those conditions which relate to
actions to be taken at the Closing)(the "Closing Date"), at the offices of
Buyer's Counsel unless another time, date or place is agreed to in writing
by the parties hereto.
10.2. Alternative Structure. Notwithstanding anything to the
contrary contained in this Agreement, prior to the Effective Time, Buyer
shall be entitled to revise the structure of the Merger and the related
transactions contemplated hereby (including, without limitation, (x)
substituting a subsidiary of Buyer as a Constituent Corporation in the
Merger, (y) providing that a different entity shall be the Surviving
Corporation in the Merger, and (z) providing for the merger of Company Bank
into Buyer Bank in accordance with a Bank Merger Agreement), provided that
each of the transactions comprising such revised structure shall (i) fully
qualify as, or fully be treated as part of, one or more tax-free
reorganizations within the meaning of Section 368(a) of the Code, (ii) not
change the amount of consideration to be received by the stockholders of
the Company, and (iii) be capable of consummation in as timely a manner as
the structure contemplated herein. This Agreement and any related
documents shall be appropriately amended in order to reflect any such
revised structure.
10.3. Nonsurvival of Representations, Warranties and Agreements.
None of the representations, warranties, covenants and agreements in this
Agreement or in any instrument delivered pursuant to this Agreement (other
than pursuant to the Option Agreement which shall terminate in accordance
with its terms) shall survive the Effective Time, except for those
covenants and agreements contained herein and therein which by their terms
apply in whole or in part after the Effective Time.
10.4. Expenses. All costs and expenses incurred in connection
with this Agreement and the transactions contemplated hereby shall be paid
by the party incurring such expense, provided, however, that the costs and
expenses of printing and mailing the Proxy Statement to the stockholders of
the Company and Buyer, and all filing and other fees paid to the SEC or any
other Governmental Entity in connection with the Merger and the other
transactions contemplated hereby, shall be borne equally by Buyer and the
Company, provided further, however, that nothing contained herein shall
limit either party's rights to recover any liabilities or damages arising
out of the other party's willful breach of any provision of this Agreement.
10.5. Notices. All notices and other communications hereunder
shall be in writing and shall be deemed given if delivered personally,
telecopied (with confirmation), mailed by registered or certified mail
(return receipt requested) or delivered by an express courier (with
confirmation) to the parties at the following addresses (or at such other
address for a party as shall be specified by like notice):
(a) if to Buyer, to:
North Fork Bancorporation, Inc.
000 Xxxxx Xxxxxx Xxxx
Xxxxxxxx, Xxx Xxxx 00000
Facsimile: (000) 000-0000
Attention: Xx. Xxxx Xxxx Xxxxx
Chairman, President and
Chief Executive Officer
with a copy to:
Xxxxxxx X. Xxxxxxxxxx, Esq.
Skadden, Arps Slate, Xxxxxxx
& Xxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile: (000) 000-0000
and
(b) if to the Company, to:
Reliance Bancorp, Inc.
000 Xxxxxxx Xxxxxx
Xxxxxx Xxxx, Xxx Xxxx 00000
Facsimile: (000) 000-0000
Attention: Xx. Xxxxxxx X. Xxxxxxx
President and Chief
Executive Officer
with a copy to:
Xxxxxxxx X.X. Spaccasi
Xxxxxxx, Xxxxxx & Xxxxxxxx
0000 Xxxxxxxxx Xxxxxx, X.X.
Xxxxxxxxxx, X.X. 00000
Facsimile: (000) 000-0000
10.6. Interpretation. When a reference is made in this
Agreement to Sections, Exhibits or Schedules, such reference shall be to a
Section of or Exhibit or Schedule to this Agreement unless otherwise
indicated. The table of contents and headings contained in this Agreement
are for reference purposes only and shall not affect in any way the meaning
or interpretation of this Agreement. Whenever the words "include",
"includes" or "including" are used in this Agreement, they shall be deemed
to be followed by the words "without limitation". The phrases "the date of
this Agreement", "the date hereof" and terms of similar import, unless the
context otherwise requires, shall be deemed to refer to August 30, 1999.
10.7. Counterparts. This Agreement may be executed in
counterparts, all of which shall be considered one and the same agreement
and shall become effective when counterparts have been signed by each of
the parties and delivered to the other parties, it being understood that
all parties need not sign the same counterpart.
10.8. Entire Agreement. This Agreement (including the documents
and the instruments referred to herein), together with the Option
Agreement, constitutes the entire agreement and supersedes all prior
agreements and understandings, both written and oral, among the parties
with respect to the subject matter hereof.
10.9. Governing Law. This Agreement shall be governed and
construed in accordance with the laws of the State of New York, without
regard to any applicable conflicts of law.
10.10. Enforcement of Agreement. The parties hereto agree that
irreparable damage would occur in the event that the provisions contained
in and Section 7.2(c) of this Agreement were not performed in accordance
with its specific terms or was otherwise breached. It is accordingly
agreed that the parties shall be entitled to an injunction or injunctions
to prevent breaches of Section 7.2(c) of this Agreement and to enforce
specifically the terms and provisions thereof in any court of the United
States or any state having jurisdiction, this being in addition to any
other remedy to which they are entitled at law or in equity.
10.11. Severability. Any term or provision of this Agreement
which is invalid or unenforceable in any jurisdiction shall, as to that
jurisdiction, be ineffective to the extent of such invalidity or
unenforceability without rendering invalid or unenforceable the remaining
terms and provisions of this Agreement or affecting the validity or
enforceability of any of the terms or provisions of this Agreement in any
other jurisdiction. If any provision of this Agreement is so broad as to
be unenforceable, the provision shall be interpreted to be only so broad as
is enforceable.
10.12. Publicity. Except as otherwise required by law or by the
rules of the NYSE or The NASDAQ Stock Market, so long as this Agreement is
in effect, neither Buyer nor the Company shall, or shall permit any of its
Subsidiaries to, issue or cause the publication of any press release or
other public announcement with respect to, or otherwise make any public
statement concerning, the transactions contemplated by this Agreement
without the consent of the other party, which consent shall not be
unreasonably withheld.
10.13. Assignment; No Third Party Beneficiaries. Neither this
Agreement nor any of the rights, interests or obligations hereunder shall
be assigned by any of the parties hereto (whether by operation of law or
otherwise) without the prior written consent of the other parties. Subject
to the preceding sentence, this Agreement will be binding upon, inure to
the benefit of and be enforceable by the parties and their respective
successors and assigns. Except as otherwise expressly provided herein,
this Agreement (including the documents and instruments referred to herein)
is not intended to confer upon any person other than the parties hereto any
rights or remedies hereunder.
IN WITNESS WHEREOF, Buyer and the Company have caused this
Agreement to be executed by their respective officers thereunto duly
authorized as of the date first above written.
NORTH FORK BANCORPORATION, INC.
By: /s/ Xxxx Xxxx Xxxxx
--------------------------
Xxxx Xxxx Xxxxx
Chairman of the Board,
President and Chief Executive Officer
RELIANCE BANCORP, INC.
By: /s/ Xxxxxxx X. Xxxxxxx
----------------------------
Xxxxxxx X. Xxxxxxx
President and Chief Executive
Officer
