EXHIBIT 2.0
AGREEMENT AND PLAN OF MERGER
by and among
LOCAL FINANCIAL CORPORATION,
LOCAL AMERICA BANK OF TULSA, F.S.B.,
GREEN COUNTRY BANKING CORPORATION,
GREEN COUNTRY BANK, F.S.B.,
XXXXXX X. XXXXXXXX,
XXX X. XXXXXX
and
XxXXXXX X. XXX XXXXX
October 22, 1997
TABLE OF CONTENTS
Page
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RECITALS ....................................................................... 1
ARTICLE I: CONVERSION AND EXCHANGE OF SHARES OF THE HOLDING COMPANY FOR
SHARES OF LFC........................................................ 3
Section 1.1 Shares of LFC to Remain Unchanged......................... 3
Section 1.2 Conversion and Exchange of Shares of
Holding Company Preferred Stock into LFC Common Stock..... 3
Section 1.3 Conversion and Exchange of Shares of Holding
Company Common Stock into LFC Common Stock................ 3
Section 1.4 Transfer and Exchange of Shares........................... 4
Section 1.5 Closing of Holding Company Transfer Books................. 4
ARTICLE II: EFFECTIVE TIME...................................................... 4
Section 2.1 Effective Time of Merger.................................. 4
ARTICLE III: EFFECT OF MERGER OF THE HOLDING COMPANY INTO LFC................... 5
Section 3.1 LFC's Assumption or Payment of Holding Company's
Indebtedness to NationsBank............................... 5
Section 3.2 Legal Effect of the Merger................................ 5
Section 3.3 Additional Acts to Effect the Merger...................... 6
Section 3.4 No Change in the Certificate of Incorporation,
By-Laws or Board of Directors of LFC...................... 6
ARTICLE IV: COVENANTS OF THE SHAREHOLDERS...................................... 6
Section 4.1 Termination of Shareholders' Amended and Restated
Stock Purchase and Sale Agreement and Waiver and
Relinquishment of All of Shareholders' Rights Thereunder.. 6
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Section 4.2 Norton to Obtain Release of Holding Company's Pledge and
Security Interest in His Shares of Common Stock........... 7
Section 4.3 Xxx Xxxxx to Obtain Complete Release of Xxxxxxxxxxx'x
Pledge and Security Interest in His Shares of Common
Stock..................................................... 7
Section 4.4 Xxxxxxxx'x Note to the Holding Company to be Disposed of
Prior to the Closing Date................................. 8
ARTICLE V: CLOSING............................................................. 8
Section 5.1 Closing................................................... 8
Section 5.2 Closing Date Deliveries by LFC............................ 8
Section 5.3 Closing Date Deliveries by the Shareholders, the Holding
Company and the Bank...................................... 9
ARTICLE VI: REPRESENTATIONS AND WARRANTIES
OF SHAREHOLDERS, HOLDING COMPANY AND BANK.......................... 11
Section 6.1 Organization and Standing of the Holding Company.......... 11
Section 6.2 Organization and Standing of Bank......................... 11
Section 6.3 Capitalization of the Holding Company and Bank............ 12
Section 6.4 Trade Names............................................... 13
Section 6.5 Financial Statements...................................... 13
Section 6.6 Liabilities............................................... 14
Section 6.7 Taxes..................................................... 14
Section 6.8 Property and Assets....................................... 15
Section 6.9 Litigation and Proceedings................................ 15
Section 6.10 Authority................................................. 16
Section 6.11 Absence of Certain Changes................................ 16
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Section 6.12 Employee Benefit Plans................................... 19
Section 6.13 Forms of Instruments, Etc................................ 20
Section 6.14 Required Reports and Compliance with Laws and Orders..... 20
Section 6.15 Loans.................................................... 20
Section 6.16 No Impending Material Adverse Events..................... 21
Section 6.17 Books and Records........................................ 21
Section 6.18 Regulatory Agreements.................................... 21
Section 6.19 Full Disclosure.......................................... 21
Section 6.20 Investments.............................................. 22
Section 6.21 Repurchase Agreements.................................... 22
Section 6.22 Significant Agreements................................... 23
Section 6.23 Insurance................................................ 24
Section 6.24 Transactions with Affiliated Persons..................... 24
Section 6.25 Brokers.................................................. 24
Section 6.26 No Default............................................... 24
Section 6.27 Hazardous Materials...................................... 24
Section 6.28 Improper Payments........................................ 25
Section 6.29 Securities Law Matters................................... 25
ARTICLE VII: REPRESENTATIONS AND WARRANTIES OF LFC AND LOCAL AMERICA........... 26
Section 7.1 Organization and Standing of LFC and Local America........ 26
Section 7.2 Authority................................................. 26
Section 7.3 Brokers................................................... 27
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Section 7.4 Legal Proceedings......................................... 27
Section 7.5 Consents and Approvals.................................... 27
Section 7.6 No Impending Material Adverse Events...................... 27
Section 7.7 Full Disclosure........................................... 27
Section 7.8 Capitalization of LFC; LFC Common Stock................... 27
Section 7.9 Improper Payments......................................... 28
Section 7.10 Securities Law Matters.................................... 28
Section 7.11 Capitalization of Local America; Local America
Common Stock.............................................. 28
ARTICLE VIII: FURTHER COVENANTS AND AGREEMENTS OF THE PARTIES.................. 29
Section 8.1 Conduct of Business....................................... 29
Section 8.2 Access and Information.................................... 31
Section 8.3 Cooperation............................................... 32
Section 8.4 LFC to Have No Control of the Holding Company or the Bank
Prior to the Closing Date................................. 32
Section 8.5 Employees and Benefits.................................... 32
Section 8.6 Agreement Not to Negotiate................................ 33
Section 8.7 Combination Agreement..................................... 33
Section 8.8 Registration Rights to be Granted by LFC to Xxxxxxxx, Xxx
Xxxxx and Xxxxxx.......................................... 33
Section 8.9 Shareholders' Agreements.................................. 34
Section 8.10 Alternative Structure.................................... 34
ARTICLE IX: CONDITIONS TO OBLIGATIONS OF LFC................................... 35
Section 9.1 Regulatory Approvals...................................... 35
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Section 9.2 Performance of Agreements................................. 35
Section 9.3 Continued Accuracy of Representations and Warranties...... 35
Section 9.4 Delivery of Shareholders' Closing Certificate............. 35
Section 9.5 Absence of Financial Changes.............................. 35
Section 9.6 Opinion of Counsel........................................ 35
Section 9.7 Absence of Litigation..................................... 36
Section 9.8 Third Party Consents...................................... 36
Section 9.9 Tax Opinion............................................... 36
Section 9.10 Resignation of Directors and Officers.................... 36
ARTICLE X: CONDITIONS TO OBLIGATIONS OF SHAREHOLDERS, THE HOLDING COMPANY AND
BANK................................................................ 37
Section 10.1 Performance of Agreements................................ 37
Section 10.2 Continued Accuracy of Representations and Warranties..... 37
Section 10.3 Regulatory Approvals..................................... 37
Section 10.4 Delivery of LFC's Closing Certificate.................... 37
Section 10.5 Absence of Litigation.................................... 37
Section 10.6 Tax Opinion.............................................. 37
Section 10.7 Opinion of Counsel....................................... 38
ARTICLE XI: TERMINATION, AMENDMENT AND WAIVER.................................. 38
Section 11.1 Termination by Mutual Consent............................ 38
Section 11.2 Termination by Any Party................................. 38
Section 11.3 Termination by LFC....................................... 38
Section 11.4 Termination by Shareholders, the Holding Company or Bank. 39
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Section 11.5 Termination by Expiration................................ 39
Section 11.6 Amendment................................................ 39
Section 11.7 Waiver................................................... 39
ARTICLE XII: GENERAL AND MISCELLANEOUS PROVISIONS.............................. 40
Section 12.1 Confidentiality.......................................... 40
Section 12.2 Entire Agreement......................................... 41
Section 12.3 Governing Law............................................ 41
Section 12.4 Notices.................................................. 41
Section 12.5 Successors............................................... 42
Section 12.6 Attorney Fees, Costs and Expenses........................ 42
Section 12.7 Press Releases and Public Statements..................... 43
Section 12.8 Survival of Representations and Warranties;
Indemnification.......................................... 43
Section 12.9 Assignment and Legal Effect.............................. 43
Section 12.10 No Third-Party Beneficiaries............................ 43
Section 12.11 Time.................................................... 44
Section 12.12 Severability............................................ 44
Section 12.13 Counterparts............................................ 44
Section 12.14 Additional Acts......................................... 44
Section 12.15 Headings................................................ 44
Section 12.16 Interpretation. ........................................ 44
AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER (this "Agreement") is dated
as of this _____ day of October, 1997, by and among LOCAL FINANCIAL CORPORATION,
a Delaware corporation ("LFC"), LOCAL AMERICA BANK OF TULSA, F.S.B., a federally
chartered stock savings bank ("Local America"), GREEN COUNTRY BANKING
CORPORATION, an Oklahoma corporation ("Holding Company"), GREEN COUNTRY BANK,
FSB, a federally chartered stock savings bank ("Bank"), and XXXXXX X. XXXXXXXX,
an individual residing in Grove, Oklahoma (hereinafter sometimes individually
referred to as "Xxxxxxxx"), XXX X. XXXXXX, an individual residing in Miami,
Oklahoma (hereinafter sometimes individually referred to as "Norton"), and
XxXXXXX X. XXX XXXXX, an individual residing in Oklahoma City, Oklahoma
(hereinafter sometimes individually referred to as "Xxx Xxxxx"), (Xxxxxxxx,
Xxxxxx and Xxx Xxxxx are hereinafter sometimes collectively referred to as the
"Shareholders"). All of the foregoing shall sometimes hereinafter be
collectively referred to herein as the "Parties."
R E C I T A L S:
A. Holding Company has authorized capital stock of 10,000
shares of common stock, par value $1.00 per share (the "Holding Company Common
Stock"), and 10,000 shares of preferred stock, par value $1.00 per share (the
"Holding Company Preferred Stock"). Xxxxxxxx, Norton and Xxx Xxxxx are the
owners of all of the issued and outstanding Holding Company Common Stock.
Xxxxxxxx owns One Hundred (100) shares of the Holding Company Common Stock,
Norton owns Seven (7) shares of the Holding Company Common Stock and Xxx Xxxxx
owns Eighty-Eight (88) shares of the Holding Company Common Stock for a total of
One Hundred Ninety-Five (195) shares of the Holding Company Common Stock issued
and outstanding. Xxx Xxxxx is the owner of all of the issued and outstanding
Holding Company Preferred Stock. Xxx Xxxxx owns One Thousand (1,000) shares of
Ten Percent (10%) Perpetual Redeemable Preferred Stock - Series B. Accordingly,
the Shareholders are collectively the owners of all of the issued and
outstanding Holding Company Common Stock and Holding Company Preferred Stock
(hereinafter collectively referred to as the "Shares").
B. Bank has authorized capital stock of 12,500 shares of
common stock, par value $1.00 per share (the "Bank Common Stock"), and 2,500,000
shares of Preferred Stock, no par value ("Bank Preferred Stock"). The Holding
Company is the owner of all Eight Hundred (800) shares of the issued and
outstanding shares of the Bank Common Stock. None of the Bank Preferred Stock is
issued and outstanding. The Bank is engaged in the business of operating a
federal savings bank with its principal office in Miami, Ottawa County,
Oklahoma, and branch offices in the Town of Grove, Delaware County, Oklahoma,
and in the Town of Commerce, Ottawa County, Oklahoma.
C. LFC is a Delaware corporation which has its principal place
of business in Oklahoma City, Oklahoma. LFC is a holding company the principal
asset of which is all of the issued and outstanding stock of Local Federal Bank,
F.S.B. ("Local Federal"), a federally chartered stock savings bank, engaged in
the business of operating a federal savings bank with
its principal place of business in Oklahoma City, Oklahoma, and which has
twenty-eight (28) branch offices at various locations in the State of Oklahoma.
Local Federal owns all of the issued and outstanding capital stock of Local
America, Inc., which, in turn, owns all of the capital stock of Local America.
LFC has authorized capital of (i) 25,000,000 shares of common stock, par value
$0.01 per share ("LFC Common Stock"), of which 19,700,000 shares are issued and
outstanding, and (ii) 5,000,000 shares of preferred stock, par value $0.01 per
share ("LFC Preferred Stock"), of which none are issued and outstanding.
D. Local America is engaged in the business of operating a
federal savings bank with its principal office in Oklahoma City, Oklahoma, and
has thirteen (13) branch offices at various locations in Tulsa, Creek, Xxxxxx
and Muskogee Counties in the State of Oklahoma. Local America is a wholly-owned
subsidiary of Local America, Inc., which is, in turn, the wholly-owned
subsidiary of Local Federal.
E. The Board of Directors of LFC and the Board of Directors
and all of the Shareholders of the Holding Company consider it desirable and in
the best interests of all Parties that the Holding Company be merged into LFC,
with LFC to be the surviving corporation (the "Merger"), in accordance with the
applicable provisions of the Oklahoma General Corporation Act and the Delaware
General Corporation Law. The Shareholders are desirous of entering into this
Agreement in order to evidence their agreement to the Merger and to the terms
and conditions of this Agreement. Accordingly, LFC, the Holding Company and the
Shareholders desire and intend by entering into this Agreement to adopt a plan
of reorganization resulting in a tax-free "reorganization" within the meaning of
Section 368(a)(1)(A) of the Internal Revenue Code of 1986, as amended.
F. After satisfaction of all of the conditions set forth in
this Agreement and the consummation of the Merger of the Holding Company into
LFC, LFC shall cause the Bank to be merged into and with Local America, subject
to the prior approval of the Office of Thrift Supervision ("OTS"), with Local
America to be the surviving bank, pursuant to the terms of those certain
Articles of Combination to be made and entered into by and between Local America
and the Bank substantially in the form of the copy of the Articles of
Combination which is attached to this Agreement as Exhibit "8.7" and by this
reference made a part hereof. After consummation of the Merger and Articles of
Combination, Local America will be the surviving entity and bank, and the
Holding Company and the Bank will cease to have separate existence.
NOW, THEREFORE, in consideration of the aforementioned
Recitals, the premises, of the mutual covenants, agreements, representations and
warranties set forth herein and in accordance with the applicable provisions of
the General Corporation Law of the State of Delaware (the "Delaware Law") and of
the General Corporation Act of the State of Oklahoma (the "Oklahoma Law"), LFC,
the Holding Company and the Shareholders hereby agree that the Holding Company
shall be merged into LFC and that the plan, terms and conditions of such Merger
shall be as follows:
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ARTICLE I
CONVERSION AND EXCHANGE OF SHARES OF
THE HOLDING COMPANY FOR SHARES OF LFC
Section 1.1 Shares of LFC to Remain Unchanged. At the
Effective Time, as that term is defined below in Article II of this Agreement,
each outstanding share of LFC Common Stock shall remain unchanged and shall be
an outstanding, fully paid and non-assessable share of Common Stock, par value
$0.01 per share, of LFC as the surviving corporation without any action on the
part of the holders thereof. Each certificate evidencing ownership of such
shares shall continue to evidence ownership of the same number of such shares of
LFC as the surviving corporation of the Merger.
Section 1.2 Conversion and Exchange of Shares of Holding
Company Preferred Stock into LFC Common Stock. At the Effective Time, each
outstanding share of Holding Company Preferred Stock shall automatically become
and be converted into 27.907 fully paid and non-assessable shares of LFC Common
Stock. Xxx Xxxxx owns all of the Holding Company Preferred Stock consisting of
1,000 shares thereof. Accordingly, Xxx Xxxxx shall receive a total of 27,907
shares of LFC Common Stock in exchange for his 1,000 shares of Holding Company
Preferred Stock at the Effective Time. Such conversion ratio shall be
appropriately and proportionately adjusted in the event of any stock dividend
on, or stock split or stock combination of, or any other like change in the
Holding Company Preferred Stock based on a record date occurring during the
period from the date of this Agreement until immediately before the Effective
Time. There are not any shares of Holding Company Preferred Stock held in
Holding Company's treasury.
Section 1.3 Conversion and Exchange of Shares of Holding
Company Common Stock into LFC Common Stock. At the Effective Time, each
outstanding share of Holding Company Common Stock shall automatically become and
be converted into 4,150.27 fully paid and non-assessable shares of LFC Common
Stock. Xxxxxxxx owns one hundred (100) shares of Holding Company Common Stock
and therefore shall receive a total of 415,027 shares of LFC Common Stock in
exchange therefor at the Effective Time. Xxx Xxxxx owns a total of eighty-eight
(88) shares of Holding Company Common Stock and therefore shall receive a total
of 365,223 shares of LFC Common Stock in exchange therefor at the Effective
Time. Norton owns seven (7) shares of Holding Company Common Stock and therefore
shall receive a total of 29,052 shares of LFC Common Stock in exchange therefor
at the Effective Time. Such conversion ratio shall be appropriately and
proportionately adjusted in the event of any stock dividend on, or stock split
or stock combination of, or any other like change in LFC Common Stock based on a
record date occurring during the period from the date of this Agreement until
immediately before the Effective Time. There are no shares of Holding Company
Common Stock held in Holding Company's treasury. At the Effective Time, all
outstanding subscriptions, options, warrants, rights or other agreements or
commitments, if any, obligating Holding Company to issue additional shares of
its capital stock or any securities convertible into or having the right to
purchase shares of its capital stock shall be automatically cancelled. As the
result of application of the foregoing conversion ratio, no fractional shares of
LFC Common Stock shall be issuable to any of the Shareholders, whether in
exchange for Holding Company Common Stock or Holding Company Preferred Stock.
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Section 1.4 Transfer and Exchange of Shares. At and after the
Effective Time, each of the Shareholders, upon presentation and surrender of the
certificate or certificates evidencing their respective shares of Holding
Company Common Stock or Holding Company Preferred Stock to LFC, or its transfer
agent, shall be entitled to receive in exchange therefor a certificate or
certificates representing the number of fully paid and non-assessable shares of
LFC Common Stock to which that Shareholder is entitled as specifically provided
in Sections 1.2 and 1.3, above. LFC Common Stock so received in exchange shall
be registered in such names as the Shareholder who exchanged his stock may
request; provided, however, that if any certificate representing shares of LFC
Common Stock is to be issued in a name other than that in which the certificate
surrendered in exchanged therefor is registered, it shall be a condition of
issuance that the certificate so surrendered shall be properly endorsed and
otherwise in proper form for transfer, and the person making such request shall
have paid any transfer or other taxes or established to the satisfaction of LFC
that such taxes have been paid or are not payable. Until so presented and
surrendered in exchange for a certificate representing LFC Common Stock, each
certificate which represented issued and outstanding shares of Holding Company
Preferred Stock or Holding Company Common Stock at the Effective Time shall be
deemed for all purposes to evidence ownership of the number of whole shares of
LFC Common Stock into which such shares of Holding Company Preferred Stock or
Holding Company Common Stock have been converted pursuant to the Merger. Until
surrender of such certificates in exchange for certificates representing LFC
Common Stock, the holder thereof shall not be entitled to receive any dividend
or other distribution payable to holders of LFC Common Stock, provided that upon
surrender of such certificates representing Holding Company Preferred Stock or
Holding Company Common Stock in exchange for certificates representing LFC
Common Stock, there shall be paid to the record holder of the certificates
representing LFC Common Stock issued upon such surrender, the amount of
dividends or other distributions (without interest) which theretofore became
payable and were not paid to such holder after the Closing Date with respect to
the number of whole shares of LFC Common Stock represented by the certificates
issued upon such surrender.
Section 1.5 Closing of Holding Company Transfer Books. The
stock transfer books of Holding Company shall be closed at the Effective Time,
and no transfer of record of any of the shares of Holding Company shall take
place thereafter.
ARTICLE II
EFFECTIVE TIME
Section 2.1 Effective Time of Merger. The Merger shall become
effective at 5:00 p.m., Central Standard Time, on the date when the last of the
following actions shall have been completed:
2.1.1 All necessary orders, consents and approvals
shall have been entered by each regulatory authority having
jurisdiction over any of the Parties, to include, without limitation,
the Federal Deposit Insurance Corporation ("FDIC") and the OTS,
granting consent, authorization or approval as necessary to consummate
the transactions contemplated by this Agreement, without the imposition
of any condition or conditions which in the reasonable opinion of LFC
or of the Shareholders are unduly burdensome
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and all applicable waiting periods have expired and all required
notices have been published;
2.1.2 All of the conditions precedent to LFC's
obligations to complete the Merger as set forth in Article IX of this
Agreement, below, shall have been completely satisfied or waived by
LFC;
2.1.3 All of the conditions precedent to the
obligations of the Shareholders to complete the Merger as set forth in
Article X of this Agreement, below, shall have been completely
satisfied or waived by the Shareholders, the Holding Company and the
Bank;
2.1.4 A Certificate of Merger shall have been
executed, acknowledged and filed in accordance with the provisions of
Sections 252 and 103 of the Delaware Law; and
2.1.5 A Certificate of Merger shall have been
executed, acknowledged and filed in accordance with the provisions of
Sections 1081 and 1082 of the Oklahoma Law.
The time when the Merger shall become effective, as defined by this Section 2.1,
is herein called the "Effective Time" and the date upon which the Effective Time
occurs shall be hereinafter sometimes referred to as the "Closing Date"
hereunder.
ARTICLE III
EFFECT OF MERGER OF THE HOLDING COMPANY INTO LFC
Section 3.1 LFC's Assumption or Payment of Holding Company's
Indebtedness to NationsBank. As an integral part of the Merger and as
consideration to the Shareholders to enter into and perform under this
Agreement, LFC agrees that it will, on the Closing Date, either assume or cause
to be fully paid the existing Three Million One Hundred Fifty Thousand and
No/100 Dollars ($3,150,000.00) debt of the Holding Company to NationsBank, N.A.
("Bank Stock Debt"). This is a specific assumption and obligation of LFC with
regard to the performance and consummation of the Merger and is intended to be
an integral part of its assumption of all liabilities of the Holding Company
pursuant to the legal effect of the Merger as set forth and described below in
this Article. All of the issued and outstanding shares of the Holding Company
Common Stock and of the Holding Company Preferred Stock have been pledged by the
Shareholders to NationsBank, N.A., to secure repayment of the Bank Stock Debt.
LFC agrees to cause NationsBank, N.A., by LFC's assumption or payment of the
Bank Stock Debt, to fully release its pledge of all of the Holding Company
Common Stock and the Holding Company Preferred Stock and to return all of the
Holding Company stock certificates held by NationsBank, N.A. to the Shareholders
on or before the Closing Date, to be exchanged and converted into LFC Common
Stock on the Closing Date when the Merger is consummated.
Section 3.2 Legal Effect of the Merger. At the Effective Time
(as defined in Section 2.1 hereof), all and singular the rights, privileges,
powers and franchises, as well as of a public or of a private nature, and all
the property, real, personal and mixed, of each LFC and the Holding Company, and
all debts due to either of them on whatever account, including
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subscriptions to shares and all other things in action, or belonging to either
of them, shall be taken and deemed to be transferred to, and shall be vested in,
LFC without further act or deed; and all property, rights, privileges, powers
and franchises and all and every other interest shall be thereafter as
effectively the property of LFC as they were of the Holding Company, and the
title to any real estate vested by deed or otherwise in either LFC or the
Holding Company shall not revert or be in any way impaired by reason of the
Merger; but LFC shall thenceforth be liable for all debts, liabilities,
obligations, duties and penalties of each of LFC and the Holding Company and all
said debts, liabilities, obligations, duties and penalties shall thenceforth
attach to LFC and may be enforced against it to the same extent as if said
debts, liabilities, obligations, duties and penalties had been incurred or
contracted by LFC. No liability or obligation due or to become due at the
Effective Time, or any claim or demand for any cause then existing against
either LFC or the Holding Company or any stockholder, officer or director
thereof, shall be released or impaired by the Merger, and all rights of
creditors and all liens upon property of either LFC or the Holding Company shall
be preserved unimpaired.
Section 3.3 Additional Acts to Effect the Merger. From time to
time, as and when requested by LFC, or its successors or assigns, the officers
and directors of the Holding Company last in office, including, without
limitation, the Shareholders, shall execute and deliver such deeds and other
instruments and shall take or cause to be taken such further action or other
actions as shall be necessary in order to vest or perfect in or to confirm of
record or otherwise LFC's title to, and possession of, all the property,
interests, assets, rights, privileges, immunities, powers, franchises and
authority of the Holding Company and otherwise carry out the purpose of this
Agreement and the officers and directors of the Holding Company and the officers
and directors of LFC are fully authorized in the name of the Holding Company or
otherwise to take any and all such action. All subsidiaries of the Holding
Company shall, at the Effective Time, become subsidiaries of LFC and all
subsidiaries of LFC shall, at the Effective Time, remain subsidiaries of LFC as
the surviving corporation.
Section 3.4 No Change in the Certificate of Incorporation,
By-Laws or Board of Directors of LFC. At and after the Effective Time, the
Certificate of Incorporation of LFC shall remain in full force and effect as
written as at the Effective Time and shall not be amended in any respect by
reason of this Agreement and the said Certificate of Incorporation shall be the
Certificate of Incorporation of LFC as the surviving corporation of the Merger
until amended in accordance with applicable law. At and after the Effective
Time, the By-Laws of LFC, as in effect immediately preceding the Effective Time,
shall be the By-Laws of LFC as the surviving corporation of the Merger until
amended or repealed as provided for therein. The Board of Directors and all of
the members thereof, and all of the officers of LFC immediately prior to the
Effective Time, shall be and constitute the Board of Directors and the members
thereof, and the officers of LFC as the surviving corporation of the Merger.
ARTICLE IV
COVENANTS OF THE SHAREHOLDERS
Section 4.1 Termination of Shareholders' Amended and Restated
Stock Purchase and Sale Agreement and Waiver and Relinquishment of All of
Shareholders' Rights Thereunder. Shareholders have made and entered into by and
between them that certain
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Amended and Restated Stock Purchase and Sale Agreement dated October 2, 1996, as
amended by that certain First Amendment to Amended and Restated Stock Purchase
and Sale Agreement dated April 10, 1997 (collectively, the "Shareholders'
Buy/Sell Agreement"), whereby each of Shareholders are granted certain rights of
first refusal and certain rights of co-sale with regard to any sale or
disposition of the Holding Company Common Stock by any of the Shareholders upon
the terms and conditions set forth therein. Subject to the successful
consummation of the Merger pursuant to this Agreement, each of the Shareholders
hereby, respectively, covenants and agrees that the Shareholders' Buy/Sell
Agreement shall be terminated on the Closing Date hereunder and rendered null,
void and of no further force and effect as of that date. Each of the
Shareholders by their respective execution of this Agreement, agree to waive,
relinquish and completely release any and all rights of first refusal or co-sale
or prior notice which that Shareholder may otherwise have had pursuant to the
Shareholders' Buy/Sell Agreement with regard to Merger contemplated by this
Agreement. However, Shareholders further agree that, should the Merger
contemplated by this Agreement not be consummated, for whatever reason, then,
and in such event, Shareholders' Buy/Sell Agreement shall remain in full force
and effect and be completely binding and effective between the Shareholders as
originally stated.
Section 4.2 Norton to Obtain Release of Holding Company's
Pledge and Security Interest in His Shares of Common Stock. In payment for the
Seven (7) shares of the Holding Company Common Stock which he owns, Norton made,
executed and delivered to the Holding Company that certain Promissory Note in
the original, principal amount of One Hundred Thousand and No/100 Dollars
($100,000.00) ("Norton Note"), accruing interest thereon at the rate stated
therein. To secure the repayment of Norton's Note, Norton created and granted to
the Holding Company a security interest in and a pledge of his Seven (7) shares
of the Holding Company Common Stock, as evidenced by that certain Pledge and
Security Agreement made, executed and delivered by Norton to the Holding Company
dated April 10, 1997 ("Norton Pledge"), subject and subordinate to the prior
security interest therein and pledge of his shares of the Holding Company Common
Stock granted by him to NationsBank, N.A., to secure the repayment of the Bank
Stock Debt. On or before the date of this Agreement, the Holding Company will,
as an additional bonus for the valuable services rendered by Norton to the
Holding Company and the Bank during the preceding year, cancel the Norton Note
and deliver the original, executed copy thereof to him marked paid, such that it
will not be an asset of the Holding Company when it is merged into LFC on the
Closing Date. Norton covenants and agrees on or before the Closing Date to cause
the Norton Pledge to be completely released and terminated. Norton will obtain
and provide to LFC on the Closing Date a copy of Norton's Pledge cancelled by
the Holding Company.
Section 4.3 Xxx Xxxxx to Obtain Complete Release of
Xxxxxxxxxxx'x Pledge and Security Interest in His Shares of Common Stock. Xxx
Xxxxx created and granted to Xxxx X. Xxxxxxxxxxx ("Xxxxxxxxxxx"), an individual
residing in Oklahoma City, Oklahoma, a security interest in and pledge of all of
his shares of the Holding Company Common Stock and the Holding Company Preferred
Stock, as evidenced by that certain Pledge and Security Agreement which Xxx
Xxxxx made, executed and delivered to Xxxxxxxxxxx dated August 22, 1997 ("Xxx
Xxxxx Pledge"), subject and subordinate to the prior security interest therein
and pledge of his same shares of the Holding Company Common Stock and the
Holding Company Preferred Stock granted by him to NationsBank, N.A., to secure
the repayment of the Bank Stock Debt. Xxx Xxxxx'x Pledge was made to secure the
repayment of a loan by Xxxxxxxxxxx to Xxx Xxxxx in the
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original, principal amount of $450,000.00, as evidenced by that certain
Promissory Note dated September 25, 1996, in that amount made, executed and
delivered by Xxx Xxxxx to Xxxxxxxxxxx ("Xxx Xxxxx Note"). Xxx Xxxxx covenants
and agrees, by payment in full of the Xxx Xxxxx Note, or by other arrangements,
to cause the Xxx Xxxxx Pledge to be fully and completely released and terminated
by Xxxxxxxxxxx on or before the Closing Date. In such event, Xxx Xxxxx covenants
and agrees to obtain and provide to LFC on the Closing Date from Xxxxxxxxxxx, a
copy of the Xxx Xxxxx Pledge marked cancelled by Xxxxxxxxxxx.
Section 4.4 Xxxxxxx'x Note to the Holding Company to be
Diposed of Prior to the Closing Date. LFC hereby acknowledges and agrees that
all of the terms and conditions of the Holding Company's unsecured loan to
Xxxxxxxx in the original, principal amount of Two Hundred Fifty Thousand and
No/100 Dollars ($250,000.00), as evidenced by that certain Promissory Note in
the amount of $250,000.00, made, executed and delivered by Xxxxxxxx to the
Holding Company dated January 1, 1995 (the "Xxxxxxxx Note"), have been fully
disclosed to LFC. On or before the date of this Agreement, the Holding Company
will, as an additional bonus for the valuable services rendered by Xxxxxxxx to
the Holding Company and the Bank during the preceding year, cancel the Xxxxxxxx
Note and deliver the original, executed copy thereof to him marked paid, such
that it will not be an asset of the Holding Company when it is merged into LFC
on the Closing Date.
ARTICLE V
CLOSING
Section 5.1 Closing. The consummation of the Merger pursuant
to this Agreement (the "Closing") shall take place on the Closing Date, provided
all of the conditions precedent to the Parties' obligations under this Agreement
as set forth in Articles IX and X herein have been fully performed and satisfied
in accordance with this Agreement. The Closing Date will be on the banking
business day which is ten (10) banking business days after the final regulatory
approval of the Merger and the subsequent merger of the Bank into Local America
is obtained, and all statutory notice periods and/or publication periods, as
required by the applicable federal and state laws and regulations, shall have
been completed, or on such earlier or later date as may be mutually agreed to by
the Parties, consistent with the requirements of said federal and state laws and
regulations (the "Closing Date"). The Closing shall be effected on the Closing
Date at the offices of LFC in Oklahoma City, Oklahoma, or such other place as
the Parties hereto may mutually agree, at 10:00 o'clock a.m. Central Standard
Time.
Section 5.2 Closing Date Deliveries by LFC. At the Closing,
LFC shall execute and deliver to the Shareholders the following:
5.2.1 Evidence in a form satisfactory to
Shareholders and their counsel that all requisite federal regulatory
approvals have been obtained to authorize the Merger and the subsequent
merger of the Bank into Local America;
5.2.2 A total of 837,209 shares of LFC Common
Stock issued to the Shareholders in the following amounts as set forth
below opposite each of the respective Shareholder's name:
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Shareholder Number of LFC Shares
----------- --------------------
Xxxxxxxx 415,027
Xxx Xxxxx 393,130
Norton 29,052
5.2.3 A copy of LFC's Board of Directors'
Resolutions as represented and required of LFC under the provisions of
Section 7.2 of the Agreement, below;
5.2.4 Assumption or payment in full of the Bank
Stock Debt by LFC to be evidenced to Shareholders by obtaining the
complete release of the pledge, and the return of all stock
certificates evidencing the Shares and the Bank Common Stock by
NationsBank, N.A., to Shareholders for assignment and delivery by
Shareholders to LFC, pursuant to the provisions of Sections 5.3.3,
5.3.5 and 5.3.7 of the Agreement, below;
5.2.5 LFC's Closing Certificate, as hereinafter
defined and required to be provided in Section 10.4 of this Agreement,
executed by the Vice Chairman of the Board or any Vice President of
LFC;
5.2.6 The Combination Agreement, as hereinafter
defined and described in Section 8.7, substantially in the form which
is attached to this Agreement as Exhibit 8.7, executed by LFC and Local
America; and
5.2.7 Opinion of Counsel of LFC substantially in
the form of LFC's Opinion of Counsel which is attached to this
Agreement as Exhibit 5.2 and by this reference made an integral part
hereof.
Section 5.3 Closing Date Deliveries by the Shareholders, the
Holding Company and the Bank. At the Closing, the Shareholders, the Holding
Company and the Bank shall deliver to LFC the following items:
5.3.1 The Shareholders' Closing Certificate, as
hereinafter defined and required to be provided in Section 9.4 of this
Agreement, executed by the President of the Holding Company and of the
Bank, and by each of the Shareholders;
5.3.2 A copy of the Board of Directors' and
shareholders' resolutions of the Holding Company and the Bank,
respectively, as required and represented under the provisions of
Sections 6.1 and 6.2, respectively, and 6.10 of this Agreement;
5.3.3 The stock certificate representing all of
the issued and outstanding shares of the Holding Company Preferred
Stock, duly endorsed for transfer to LFC by Xxx Xxxxx, or accompanied
by stock powers duly executed for transfer of the Holding Company
Preferred Stock to LFC by Xxx Xxxxx;
9
5.3.4 The stock certificate representing the One
Hundred (100) shares of GCB Securities Corporation, an Oklahoma
business corporation ("GCB Securities"), wholly owned by the Holding
Company, duly endorsed for transfer to LFC by the Holding Company, or
accompanied by stock powers duly executed for transfer of that stock to
LFC by the Holding Company;
5.3.5 The stock certificates representing all of
the issued and outstanding Holding Company Common Stock, duly endorsed
for transfer to LFC, by Xxxxxxxx, Xxxxxx and Xxx Xxxxx, each as to
their respective ownership of the Holding Company Common Stock, or
accompanied by stock powers duly executed by each of these respective
owners for transfer of all of their respective shares of the Holding
Company Common Stock to LFC;
5.3.6 Certified copies of the Certificate of
Incorporation, Charter and By-Laws, as the case may be, of the Holding
Company and Bank, respectively, as required to be provided by
Shareholders to LFC pursuant to Sections 6.1 and 6.2, respectively, of
this Agreement;
5.3.7 All stock certificate(s) representing all of
the issued and outstanding shares of the Bank Common Stock, duly
endorsed for transfer, in such manner as LFC may elect, by the Holding
Company, or accompanied by stock powers duly executed by the Holding
Company for transfer of the Bank Common Stock to LFC;
5.3.8 Copies of all insurance policies required to
be provided by the Holding Company and the Shareholders to LFC pursuant
to Section 6.23 of this Agreement;
5.3.9 The executed resignations, in form
satisfactory to LFC, of all of the members of the Board of Directors
and all Officers of the Holding Company and the Bank, from their
respective office, or position on the Board of Directors, held by them
with regard to the Holding Company and the Bank, respectively;
5.3.10 Opinion of counsel of Shareholders, the
Holding Company and the Bank, substantially in the form of the
Shareholders' Opinion of Counsel which is attached to this Agreement as
Exhibit 5.3 and by this reference made an integral part hereof;
5.3.11 A copy of the Norton Pledge marked
cancelled by the Holding Company;
5.3.12 A copy of the Xxx Xxxxx Pledge marked
cancelled by Xxxxxxxxxxx;
5.3.13 The Combination Agreement, as hereinafter
defined and described in Section 8.7 of the Agreement, substantially in
the form which is attached to this Agreement as Exhibit 8.7, executed
by the Holding Company and the Bank; and
5.3.14 Such other documents, assignments,
transfers or certificates as LFC may deem reasonable and necessary
under the circumstances.
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ARTICLE VI
REPRESENTATIONS AND WARRANTIES
OF SHAREHOLDERS, HOLDING COMPANY AND BANK
Each of the Shareholders, the Holding Company and the Bank, do
each hereby respectively represent and warrant to LFC, as of the date of this
Agreement and as of the Closing Date, as follows:
Section 6.1 Organization and Standing of the Holding Company.
The Holding Company is a corporation duly organized, validly existing and in
good standing under the laws of the State of Oklahoma, and has all requisite
power and authority (corporate and other), and is duly qualified and licensed
and possesses all licenses, franchises, permits and other governmental
authorizations necessary to own, lease and operate its assets and properties and
to conduct its business as now being conducted, including, without limitation,
the full power and authority to own all of the issued and outstanding capital
stock of Bank and to enter into and perform its obligations under this Agreement
and the transactions contemplated hereby. The Holding Company is duly licensed
or qualified to do business and is in good standing in each jurisdiction in
which its ownership or leasing of property or the conduct of its business
requires such licensing or qualification and where the failure to be so
licensed, qualified or in good standing would have a material adverse effect on
the financial condition, operations, business or prospects of the Holding
Company or the Bank, either individually or taken as a whole. The Holding
Company is duly registered as a savings and loan holding company under the Home
Owners' Loan Act ("HOLA") and the regulations of the OTS thereunder. The Holding
Company does not own any equity interest, directly or indirectly, in any
corporation, partnership, limited liability company, limited liability
partnership, joint venture, firm or other entity except for the Bank and GCB
Securities, as more particularly described in Section 6.3, below. All approvals
required to be obtained from the Board of Directors or the shareholders of the
Holding Company under the Holding Company's Certificate of Incorporation,
By-Laws or applicable law have been obtained. The Holding Company and
Shareholders have delivered to LFC complete and correct copies of the
Certificate of Incorporation of the Holding Company, as certified to by the
Secretary of State of Oklahoma, and the By-Laws of the Holding Company, as
certified to by the Secretary or Assistant Secretary of the Holding Company, as
in effect on the Closing Date.
Section 6.2 Organization and Standing of Bank. Bank is a
federally chartered stock savings bank duly organized, validly existing and in
good standing under the laws of the United States of America operating pursuant
to a federal charter granted by the OTS, and has the full power and authority,
corporate and otherwise, and is duly qualified and licensed and possesses all
licenses, franchises, permits and other governmental authorizations necessary to
own, lease and operate its assets and properties and to conduct its business as
now being conducted, including, without limitation, the full power and authority
to operate the Bank and to enter into and perform its obligations under this
Agreement and the transactions contemplated hereby. The Bank is duly licensed or
qualified to do business and is in good standing in each jurisdiction in which
its ownership or leasing of property or the conduct of its business requires
such qualification, except where the failure to be so licensed, qualified or in
good standing would not have a material adverse effect on the financial
condition, operations, business or prospects of the Holding Company or the Bank,
either individually or taken as a whole. The deposit accounts of
11
the Bank are insured by the Savings Association Insurance Fund to the maximum
extent permitted by the Federal Deposit Insurance Act ("FDIA"), and the Bank has
paid all premiums and assessments required by the FDIA and the regulations
thereunder. The Bank is a member in good standing of the Federal Home Loan Bank
of Topeka. The Bank is a "qualified thrift lender," as such term is defined in
the HOLA and the regulations thereunder. All approvals, if any, required to be
obtained from the Board of Directors or the shareholders of the Bank under the
Bank's Charter, By-Laws or applicable law have been obtained or will be obtained
prior to the Closing Date. Bank and Shareholders have delivered to LFC complete
and correct copies of the Charter of the Bank, as certified to by the Secretary
of the OTS, and of the By-Laws of Bank, as certified to by the Secretary or
Assistant Secretary of the Bank, as in effect on the Closing Date.
Section 6.3 Capitalization of the Holding Company and Bank.
The authorized capital stock of the Holding Company consists of 10,000 shares of
the Holding Company Common Stock, par value $1.00 per share, of which One
Hundred Ninety-Five (195) shares are issued and outstanding and are owned One
Hundred (100) shares by Xxxxxxxx, Eighty-Eight (88) shares by Xxx Xxxxx and
Seven (7) shares by Norton, and 10,000 of the Holding Company Preferred Stock,
par value $1.00 per share, of which One Thousand (1,000) shares are issued and
outstanding, and are all owned by Xxx Xxxxx. The authorized capital stock of the
Bank consists of 12,500 shares of Bank Common Stock, par value $1.00 per share,
of which Eight Hundred (800) shares are issued and outstanding and of 2,500,000
shares of Bank Preferred Stock, no par value, of which none are issued and
outstanding. None of the capital stock of the Holding Company or of the Bank is
held in their respective treasury. No share of the capital stock of the Holding
Company or of the Bank has been reserved for any purpose. All of the issued and
outstanding shares of the capital stock of the Holding Company and of the Bank,
respectively, are duly and validly authorized and issued, fully paid and
non-assessable and have not been issued in violation of any pre-emptive rights.
Shareholders are the record and beneficial owners of all of the issued and
outstanding shares of the Holding Company Common Stock and the Holding Company
Preferred Stock and such shares are, except to the extent disclosed in Articles
III and IV, above in this Agreement, which pledges are all to be released on the
Closing Date, held by Shareholders free and clear of all liens, encumbrances,
pledges, options, charges, claims, security interests, agreements, equities and
assessments whatsoever, with Shareholders having full right and authority to
sell, assign, transfer and deliver the Shares as herein provided, subject to
satisfying the pledge of the Shares to NationsBank, N.A., the pledge of Norton's
Holding Company Common Stock pursuant to the Norton Pledge and the pledge of Xxx
Xxxxx'x Holding Company Common and Holding Company Preferred Stock pursuant to
Xxx Xxxxx'x Pledge, as fully described in Articles III and IV, above, all of
which are to be fully released on the Closing Date if the Merger is fully
consummated. Shareholders own the Shares in the amounts and in the manner
respectively set forth and described above in this Section. There are no
outstanding securities convertible into or exchangeable for the capital stock of
the Holding Company or of the Bank, respectively, and there are no outstanding
options, rights (pre-emptive or otherwise) or warrants to purchase or to
subscribe for equity securities of the Holding Company or the Bank,
respectively. Except for the Shareholders' Buy/Sell Agreement which will be
terminated at Closing if the transaction contemplated by this Agreement is fully
consummated, there are no outstanding agreements, arrangements, commitments or
understandings of any kind affecting or relating to the voting, issuance,
purchase, redemption, repurchase or transfer of the capital stock of the Holding
Company or of the Bank, or any equity securities of the Holding Company or the
12
Bank, except as provided for and described in this Agreement. On the Closing
Date, the Holding Company will have good, valid and marketable title to all of
the outstanding shares of the Bank Common Stock, free and clear of all
mortgages, liens, pledges, charges, claims, security interests, agreements,
encumbrances and equities whatsoever, with full right and authority to sell and
transfer all of the Bank Common Stock to LFC, subject only to fully satisfying
the above-described pledge of all of the Bank Common Stock to NationsBank, N.A.,
to secure repayment of the Bank Debt, which will be fully released on the
Closing Date, if the transaction contemplated hereby is fully consummated. In
addition to the Bank, the Holding Company owns one subsidiary corporation,
namely, GCB Securities, engaged in the business of buying, selling and issuing
securities and in all aspects of the securities business. GCB Securities has
authorized capital consisting of 10,000 shares of common stock, par value $1.00
per share, of which One Hundred (100) shares are issued and outstanding and are
all owned by the Holding Company, and of 10,000 shares of preferred stock, par
value $1.00 per share, of which none are issued and outstanding. Other than GCB
Securities and the Bank, the Holding Company has no ownership interest
whatsoever in any subsidiary or other corporation, or any limited liability
company, limited liability partnership, general or limited partnership or joint
venture. The Bank has no ownership interest whatsoever in any subsidiary or
other corporation, or any limited liability company, limited liability
partnership, general or limited partnership or joint venture.
Section 6.4 Trade Names. No other person, firm or corporation
is presently using or claiming, or has the right to use or claim the trade name
"Green Country Bank, FSB." Neither Shareholders, the Holding Company nor Bank
have conferred the right or license to use the name "Green Country Bank, F.S.B."
on any person, firm or corporation. After the Closing Date, Shareholders shall
forego and not make a claim to any right, title or interest in or to the use of
that name.
Section 6.5 Financial Statements. Shareholders, the Holding
Company and Bank have separately delivered to LFC and identified by reference to
this Section 6.5, each of the following financial statements: The audited
annual, consolidated financial statements of the Holding Company (including a
Balance Sheet and the related Statements of Operations, Equity and Cash Flows,
and the notes relating thereto), prepared by the Holding Company's independent
certified public accountants, as of and for the fiscal years ended September 30,
1996, September 30, 1995, and September 30, 1994; and the audited annual
consolidated financial statements of the Bank (including a Balance Sheet and
related Statements of Operations, Equity and Cash Flows, and the notes relating
thereto) prepared by the Bank's independent certified public accountants, as of
and for the fiscal years ended September 30, 1996, September 30, 1995, and
September 30, 1994, and the unaudited, annual internal, consolidated financial
statements of the Holding Company and the Bank as of and for the fiscal year
ended September 30, 1997 (collectively, the "Financial Statements"). The
Financial Statements fairly present the consolidated financial condition and
results of operations of the Holding Company and the Bank, respectively, as of
the dates and for the periods indicated therein, were prepared in accordance
with generally accepted accounting principles consistently applied throughout
the periods involved, except as otherwise set forth therein, and in accordance
with the books and records of the Holding Company and the Bank, respectively
(subject in the case of the unaudited financial information to normal recurring
year-end adjustments). The books and records of the Holding Company and the
Bank, respectively, on the basis of which such Financial Statements were
prepared fully and fairly reflect all of the transactions of the Holding Company
and the Bank and
13
are complete and correct in all material respects. The books of account of the
Holding Company and the Bank each reflect substantially all items of income and
expense, and substantially all of its assets, liabilities and accruals, and
reflect all material items of income and expense and all material assets,
liabilities and accruals, and are maintained in form and substance adequate for
preparing audited Financial Statements in accordance with generally accepted
accounting principles.
Section 6.6 Liabilities. Neither the Holding Company nor the
Bank has any indebtedness, obligation or liability, contingent or otherwise, and
whether due or to become due, which is required by generally accepted accounting
principles to be reflected in the Financial Statements, or which is material,
except (i) those reflected in the Financial Statements, (ii) those individual
liabilities subsequently incurred in the ordinary course of business, (iii)
deposit accounts opened in the ordinary course of business of a type authorized
by law, or (iv) those set forth in Exhibit 6.6 hereto. All deposit accounts and
notes payable, and other liabilities of the Holding Company and the Bank are
current and not in default.
Section 6.7 Taxes. To the best of their knowledge and belief,
the Holding Company and the Bank each have duly filed with the appropriate
governmental agencies all tax reports and returns required to be filed by it,
including, without limitation, all federal, state, and local income, franchise,
and property tax returns, complete and accurate copies of which have previously
been provided to LFC and each has duly paid in full all taxes and other charges
due or claimed to be due from it by federal, state or local taxing authorities;
and there are no federal, state or local tax liens upon any property or assets
of the Holding Company or the Bank. All of such reports and returns are true,
correct, and complete in all material respects. The federal income tax returns
of the Holding Company and the Bank have been examined by the federal tax
authorities or closed by applicable statute and satisfied for all periods to and
including the fiscal year ended September 30, 1995; all deficiencies asserted as
a result of such examinations have been paid or finally settled, and no state of
facts exists or has existed which might constitute grounds for the assessment of
any further tax liability with respect to the periods which have not been
audited by the federal, state or local taxing authorities. All of the tax
liabilities of the Holding Company and the Bank for the current year to date and
all prior years, whether or not they have become due and payable, have been paid
in full or adequately reserved for, and to the extent tax liabilities have
accrued but not become payable, they are reflected on the books of the Holding
Company, the Bank or in the Financial Statements. No income, franchise or
property tax return of the Holding Company or of the Bank is currently being
audited by the Internal Revenue Service or any other taxing authority having
jurisdiction over either of them. Except as set forth on Exhibit 6.7 hereto, the
Holding Company and the Bank are not a party to, or bound by, or have any
obligation under any tax sharing or similar agreement. There are no outstanding
agreements or waivers extending the statutory period of limitation applicable to
any federal income tax return of the Holding Company or the Bank for any period.
Neither the Holding Company nor the Bank is a party to any action or proceeding
by any governmental authority for assessment or collection of taxes, and no
claim for assessment or collection of taxes by any governmental authority has
been asserted against the Holding Company or the Bank.
14
Section 6.8 Property and Assets. Subject to Permitted Title
Exceptions as described below, or as otherwise indicated in Exhibit 6.8 hereto,
the Holding Company and the Bank have good and marketable title to all of their
respective properties and assets, whether real, personal, tangible or
intangible, reflected in the Financial Statements or subsequently acquired, free
and clear of all liens, charges, encumbrances, claims of third parties or
restrictions. Permitted Title Exceptions include (i) liens for current real
estate taxes or special assessments not yet delinquent, (ii) utility, access and
other easements and rights-of-way, restrictions and exceptions, that will not
materially interfere with the present use or occupation of the real estate owned
by the Holding Company or the Bank, as the case may be, or impair the present
business operations conducted thereon, (iii) such minor defects, irregularities,
encumbrances, easements, rights-of-way and clouds on title as normally exist
with respect to property similar in character which do not materially impair the
use of the premises affected thereby for the purpose for which it is presently
being used, and (iv) any building, zoning or subdivision ordinances applicable
to the premises, provided the same have not been violated. Exhibit 6.8 lists and
describes all real property and all interests in real property (other than
mortgages and deeds of trust) owned by the Holding Company or the Bank as of the
date hereof, including, but not limited to, all leaseholds, options to purchase
real property and leases under which the Holding Company or the Bank is the
lessor or the lessee. Subject to the Permitted Title Exceptions, (A) the Holding
Company and the Bank, respectively, each enjoys peaceful and undisturbed
possession under all leases for the use of real property under which it is the
lessee; (B) all of such leases are in full force and effect and neither the
Holding Company or the Bank is in default under any such lease; and (C) except
as disclosed in Exhibit 6.8, all personal property and assets and improvements
on real property owned and currently used by the Holding Company or the Bank and
material to their respective business are in good operating condition and
repair, normal wear and tear excepted.
Section 6.9 Litigation and Proceedings. Except as set forth in
Exhibit 6.9 hereto, and other than mortgage foreclosure proceedings brought by
the Bank against its borrowers in the ordinary course of business in which no
counterclaim has been asserted against the Bank, or any bankruptcy proceedings
involving borrowers of the Bank in which the Bank is participating in the
ordinary course of its business, (i) there is not pending any legal,
administrative, arbitration, governmental or other proceeding to which
Shareholders, the Holding Company or the Bank is a party, or, to the knowledge
of Shareholders, the Holding Company or the Bank, is threatened to be made a
party; (ii) the Holding Company or the Bank is not under any investigation to
its knowledge with respect to, or is charged with any violation or alleged
violation of, any federal, state, local or other law or regulation other than as
described in the Holding Company's or the Bank's most recent regulatory
examination reports; (iii) the Holding Company or the Bank is not subject to any
order of any federal, state, or local court or other governmental agency not
generally applicable to entities engaged in the same business; (iv) no one has
asserted and, to the knowledge of Shareholders, the Holding Company or the Bank,
no one has grounds to assert any material claims against Shareholders, the
Holding Company or the Bank based upon the wrongful action or inaction of
Shareholders, the Holding Company or the Bank or any of its officers, directors,
or employees; and (v) no one has asserted and, to the knowledge of Shareholders,
the Holding Company or the Bank, there does not exist grounds for any claims
against Shareholders, the Holding Company or the Bank which have resulted or may
result in litigation that will prevent or delay the consummation of the
transactions contemplated by this Agreement.
15
Section 6.10 Authority. The Holding Company and the Bank each
has full corporate power and authority to enter into this Agreement and to carry
out the transactions provided for in this Agreement on the terms and conditions
set forth herein. The execution and delivery by the Holding Company and the Bank
of this Agreement and the respective consummation by each of them of the
transactions contemplated hereby have been duly and validly authorized by all
necessary corporate action. This Agreement constitutes a valid and legally
binding obligation of the Shareholders, the Holding Company and the Bank
enforceable against the Shareholders, the Holding Company and the Bank,
respectively, in accordance with its terms, except that the enforcement of the
rights and remedies created hereby and thereby is subject to bankruptcy,
insolvency, reorganization and similar laws of general application affecting the
rights and remedies of creditors and that the availability of the remedy of
specific performance or of injunctive or other equitable relief is subject to
the discretion of the court before which any proceeding therefor may be brought.
Except as listed on Exhibit 6.10 hereto, neither the execution and delivery of
this Agreement, nor the consummation by the Shareholders, the Holding Company
and the Bank of the transactions contemplated hereby in accordance with the
terms and conditions hereof, nor compliance by the Shareholders, the Holding
Company and the Bank with any of the provisions hereof, will violate, conflict
with, result in a breach of, constitute a default under, accelerate the
performance required by the terms of, or permit the termination of any order,
writ, injunction, decree, statute, rule, regulation or policy guidelines
applicable to the Shareholders, the Holding Company or the Bank, or any
contract, agreement, indenture or instrument to which the Shareholders, the
Holding Company or the Bank is a party or by which any of them is bound or
committed or the Holding Company's and the Bank's respective Certificate of
Incorporation, Charter or By-Laws. Except for the approvals contemplated by this
Agreement, neither Shareholders, the Holding Company nor the Bank is required to
obtain any consent, approval, order or authorization of, or to effect any
registration, declaration or filing with, any governmental authority or under
any contract, agreement, indenture or instrument to which Shareholders, the
Holding Company or the Bank is party or by which any of them is bound or
committed in connection with the execution and delivery of this Agreement or the
consummation of the transactions contemplated hereby.
Section 6.11 Absence of Certain Changes. Except as set forth
in Exhibit 6.11 hereto or permitted by this Agreement, since September 30, 1997,
none of the following actions, changes or matters has been taken by or
transpired with regard to either the Holding Company or the Bank:
6.11.1 any material adverse change in the
financial condition, operations, business or prospects of the Holding
Company or the Bank, either individually or taken as a whole, other
than changes which are the result of changes in laws or regulations,
conditions affecting the economy generally or other factors affecting
banking institutions in general;
6.11.2 any sale, assignment, transfer, purchase or
other disposition of any tangible or intangible asset of the Holding
Company or the Bank except in the ordinary course of business
consistent with past practice and for fair and adequate consideration;
6.11.3 any suffering of any damage, destruction,
or loss, whether as the result of fire, explosion, earthquake,
accident, casualty, labor trouble, requisition or taking
16
of property by any government or any agency of any government, flood,
windstorm, embargo, riot or act of God or the enemy, or other similar
or dissimilar casualty or event or otherwise, and whether or not
covered by insurance, materially and adversely affecting its business,
property, or assets;
6.11.4 any increase in the compensation payable or
to become payable by the Holding Company or the Bank to any of its
directors, officers, employees, agents, consultants, or any bonus, or
deferred compensation granted or paid to any such persons, except for
the following: (i) in the ordinary course of business consistent with
past practice, (or pursuant to contracts, or deferred compensation
agreements, or arrangements in existence as of September 30, 1997),
(ii) for a $500,000 severance payment fund established for the Bank to
be distributed in such amounts to such of those employees of the Bank
whose employment is severed by reason of the Merger, [excluding
Xxxxxxxx, Xxxxxx and Xxxxxxx X. Xxxx ("Park")], as the Chairman and
Chief Executive Officer of the Bank shall designate and select, in his
sole and absolute discretion, pursuant to authority granted him to do
so by the Bank's Board of Directors, and, (iii) to the cancellation on
or before the date of this Agreement, of any and all promissory notes
made, executed and delivered to the Holding Company or to the Bank by
Xxxxxxxx, Norton or Park, or of any other indebtedness of Norton to the
Holding Company;
6.11.5 any material change in the method of
recordkeeping employed by the Holding Company or the Bank;
6.11.6 any issuance or sale by the Holding Company
or the Bank of any its corporate debt securities, or any borrowings of
money or other pledging of its credit except in the ordinary course of
business consistent with past practice;
6.11.7 any occurrence of any other material
obligation or liability (absolute or contingent), except normal trade
or business obligations or liabilities incurred in the ordinary course
of business;
6.11.8 any mortgage, pledge, or subjecting to
lien, claim, security interest, charge, encumbrance, or restriction
(other than Permitted Title Exceptions) of any of its assets or
properties;
6.11.9 any discharge or satisfaction of any lien,
mortgage, pledge, claim, security interest, charge, encumbrance, or
restriction or payment of any obligation or liability (absolute or
contingent), other than in the ordinary course of business, except for
the cancellation, on or before the date of this Agreement, of any and
all promissory notes (and pledges securing the repayment thereof, e.g.
the Norton Pledge) made, executed and delivered to the Holding Company
or to the Bank by Xxxxxxxx, Xxxxxx or Park, or of any other
indebtedness of Norton to the Holding Company;
6.11.10 any declaration or payment of dividends by
the Bank on its capital stock and/or any declaration or payment of
dividends by the Holding Company on any of its capital stock, i.e.,
either its Holding Company Common Stock or its Holding Company
Preferred Stock;
17
6.11.11 any cancellation or compromise of any
material debt or claim, other than in the ordinary course of business
or upon payment in full, except for the cancellation, on or before the
date of this Agreement, of any and all promissory notes made, executed
and delivered to the Holding Company or the Bank by Xxxxxxxx, Xxxxxx or
Park, or of any other indebtedness of Norton to the Holding Company;
6.11.12 any waiver of any material rights of
value, other than in the ordinary course of business or upon payment in
full, except for the cancellation, on or before the date of this
Agreement, of any and all promissory notes made, executed and delivered
to the Holding Company or the Bank by Xxxxxxxx, Xxxxxx or Park;
6.11.13 except in the ordinary course of its
business, any entering into, or agreeing to enter into, any agreement
or arrangement granting any preferential right to purchase any of its
assets, properties, or rights or requiring the consent of any party to
the transfer and assignment of any such assets, properties, or rights;
6.11.14 any entering into of any material
transaction, contract, or commitment outside the ordinary course of its
business, except for the cancellation, on or before the date of this
Agreement, of any and all promissory notes made, executed and delivered
to the Holding Company or the Bank by Xxxxxxxx, Norton or Park;
6.11.15 any introduction of any material change
with respect to the operation of its business, including, without
limitation, its method of accounting (exclusive of changes generally
applicable to the banking business or industry such as, without
limitation, changes in banking, statutes, rules and regulations,
changes in accounting principles, rules and practices and changes in
tax laws and regulations, and the prevailing interpretation of any
thereof);
6.11.16 any receipt of notice or knowledge or
reason to believe that any labor unrest exists among any of its
employees or that any group, organization or union has attempted to
organize any of its employees;
6.11.17 any failure to operate its business
organization intact and to seek to preserve the goodwill of its
customers and others with whom it has business relations;
6.11.18 any making of any capital expenditure or
capital addition or betterment in excess of $10,000 per project;
6.11.19 any making of any loan or discount or
entering into a financing lease (A) which has not been made for good,
valuable and adequate consideration in the ordinary course of business,
and (B) which has not been evidenced by notes or other evidences of
indebtedness which are true, genuine and what they purport to be; or
6.11.20 any agreement to do any of the foregoing.
18
Section 6.12 Employee Benefit Plans. Unless disclosed in
Exhibit 6.12 hereto:
6.12.1 Neither the Holding Company or the Bank
maintains nor has maintained, nor has any present or future obligation
or liability under, any funded deferred compensation plans (including
profit sharing, pension, 401(k), savings or stock bonus plans),
unfunded deferred compensation arrangements or employee benefit plans
as defined in Section 3(3) of the Employee Retirement Income Security
Act of 1974, as amended ("ERISA"), other than the plans, if any, set
forth in Exhibit 6.12 hereto (true and correct copies of which have
been delivered to LFC) (the "Benefit Plans").
6.12.2 There are no multi-employer plans, as
defined in Section 4001(a)(3) of ERISA, to which the Holding Company or
the Bank contributes, or under which the Holding Company or the Bank
has any present or future obligation or liability.
6.12.3 Each of the Benefit Plans which is an
employee pension benefit plan, as defined in Section 3(2) of ERISA, and
which is intended to be "qualified" within the meaning of Section
401(a) of the Internal Revenue Code of 1986 ("Code") ("Pension Plan"),
has been determined by the Internal Revenue Service to be so qualified
and neither the Holding Company or Bank is aware of any fact that would
adversely affect such qualified status. Each Benefit Plan has been
operated and administered in accordance with the requirements of ERISA
and the applicable provisions of the Code.
6.12.4 With respect to each Benefit Plan for which
an annual report has been filed, no material adverse change has
occurred with respect to the matters covered by the most recent such
annual report, which is included in Exhibit 6.12, since the end of the
period covered thereby.
6.12.5 None of the Pension Plans (or any pension
plan maintained by a trade or business, whether or not incorporated,
which is under common control with the Holding Company or the Bank
within the meaning of Section 414(b) or (c) of the Code) which are
subject to Title IV of ERISA has completely or partially terminated, or
been the subject of a reportable event as defined in Section 4043 of
ERISA.
6.12.6 No proceedings by the Pension Benefit
Guaranty Corporation to terminate a Pension Plan (or any pension plan
maintained by a trade or business, whether or not incorporated, which
is under common control with the Holding Company or the Bank within the
meaning of Section 414(b) or (c) of the Code) pursuant to Subtitle C of
Title IV of ERISA have been instituted or threatened. No liability
under Subtitle D of Title IV of ERISA has been incurred by the Holding
Company or the Bank with respect to a Pension Plan or a pension plan
maintained by a trade or business whether or not incorporated which is
under common control with the Holding Company or the Bank within the
meaning of Section 414(b) or (c) of the Code.
6.12.7 The present value of all accrued benefits
(vested and non-vested) under each of the defined benefit pension plans
disclosed under Exhibit 6.12 did not, as of the latest valuation date,
exceed the then current market value of the assets of such plan
19
allocable to such accrued benefits based upon the actuarial assumptions
currently utilized for such plans and as disclosed under Exhibit 6.12,
and no accumulated funding deficiency (whether or not waived) exists
with respect to any such plan which has been terminated by the Holding
Company or the Bank or its predecessors.
6.12.8 There has been no prohibited transaction
(as is defined in Section 4975 of the Code or in Part 4 of Subtitle B
of Title I of ERISA) with respect to any Benefit Plan. No penalty or
tax under Section 402(i) of ERISA or Section 4975 of the Code has been
imposed upon the Holding Company or the Bank.
6.12.9 There are no pending or, to the knowledge
of Shareholders, the Holding Company or the Bank, threatened claims by
or on behalf of the Benefit Plans, by any employee or beneficiary
covered under the Benefit Plans, or otherwise involving the Benefit
Plans which allege a breach of fiduciary duties or violations of other
applicable state or federal law which could result in liability on the
part of the Holding Company or the Bank or any of the Benefit Plans
under ERISA or any other law, nor, to the knowledge of the Holding
Company or the Bank, is there any basis for such a claim.
6.12.10 The Holding Company and the Bank have
complied with all provisions relating to continuation coverage required
by Title I, Subtitle B, Part 6 of ERISA.
Section 6.13 Forms of Instruments, Etc. The Holding Company
and the Bank will make available to LFC, upon request, copies of all standard
forms of savings accounts and deposits, notes, mortgages, deed of trust,
security agreements and other routine documents of a like nature utilized on a
regular and recurring basis by the Holding Company or the Bank in the ordinary
course of its business.
Section 6.14 Required Reports and Compliance with Laws and
Orders. Each of the Holding Company and the Bank has duly filed with the OTS and
the FDIC, as the case may be, in correct form the reports required to be filed
under applicable laws and regulations and such reports were in all material
respects complete and accurate and in compliance with the requirements of
applicable laws and regulations, provided that information as of a later date
shall be deemed to modify information as of an earlier date; and the Holding
Company and the Bank have previously delivered or made available to LFC accurate
and complete copies of all such reports. In connection with the most recent
examinations of the Holding Company and the Bank by the OTS, neither the Holding
Company nor the Bank was required to correct or change any action, procedure or
proceeding which the Holding Company or the Bank believes has not been corrected
or changed as required.
Section 6.15 Loans. All loan agreements, notes receivable,
borrowing arrangements, and leases ("Loans") made by the Bank as lender, as
reflected in the Financial Statements and/or on the books of the Bank, are
valid, binding, and enforceable obligations of the respective debtors without
any claims or defenses, except as set forth on Exhibit 6.15 hereto and each such
Loan which is secured by an interest in real property is secured by a valid and
perfected mortgage lien. The Bank's Loans and loan portfolio are in accordance
in all material respects with all applicable laws, regulations, orders and
policy guidelines other than as disclosed
20
in examination reports or in Exhibit 6.15 hereto. Exhibit 6.15 hereto contains a
list of all loan commitments exceeding $100,000 including the name of the
borrower, other loans of such borrower held by the Bank and the type of security
for the loan. The aggregate reserves for Loans included in the Financial
Statements are adequate as of such dates in all respects for all known and/or
estimated losses as of such dates (net of recoveries relating to Loans
previously charged off) on Loans of the Holding Company and the Bank outstanding
as of such date. To the best of the knowledge of the Shareholders, the Holding
Company and the Bank, all Loans are bona fide and arose in the ordinary course
of business. Except for Loans included in Exhibit 6.15 hereof (which Exhibit
shall include the borrower's name, amount of the loan and the number of days, if
any, the loan is delinquent), the Holding Company or the Bank is not a party to
any written or oral (i) Loan under the terms of which the obligor is more than
thirty (30) days in default in payment of principal, interest, or other
provisions as of the dates shown thereon; (ii) Loan which has been or may be
classified by the examiners for the FDIC or the OTS as "substandard",
"doubtful", "loss", "other loans especially mentioned", or any comparable
classification used by such agencies; (iii) Loan which has been so classified
internally; (iv) Loan by the Bank to any of its directors or officers, or any
member of their immediate families (spouse, siblings, children, or parents) or
any affiliate or associate (as such terms are defined in the rules and
regulations applicable to the Bank) of the foregoing which is more than thirty
(30) days delinquent, or (v) Loans in known violation of any law, regulation, or
rule of any governmental authority. Except as noted in Exhibit 6.15, the Bank's
documentation for all Loans described in Exhibit 6.15 is substantially in the
same form as for its other Loans of similar type.
Section 6.16 No Impending Material Adverse Events. Unless
disclosed in Exhibit 6.16, as of the date hereof, neither Shareholders, the
Holding Company nor Bank has knowledge of any impending loss of business, or of
any other presently existing facts or circumstances which would be reasonably
likely to have a material adverse effect upon the financial condition, results
of operations, business, or prospects of the Holding Company or the Bank, other
than changes which are the result of changes in laws or regulations or other
factors affecting banking institutions in general.
Section 6.17 Books and Records. The minute books of the
Holding Company and the Bank each reflect accurately all significant action
taken by the shareholders and board of directors (or any committee thereof) of
the Holding Company and the Bank.
Section 6.18 Regulatory Agreements. Except as disclosed in
Exhibit 6.18 hereto, neither the Holding Company or the Bank is a party to any
Assistance Agreement, Supervisory Agreement, supervisory directive, memorandum
of understanding, consent order, cease and desist order or condition or any
regulatory order or decree with or by the OTS or the FDIC, or any other
regulatory agency that restricts the conduct of the business of the Holding
Company or Bank or in any manner relates to the capital adequacy, credit
policies, ability to pay dividends, net worth or asset management or maintenance
of the Holding Company or Bank.
Section 6.19 Full Disclosure. None of the information
concerning the Holding Company or the Bank contained in this Agreement and the
schedules hereto, or in any of the lists, documents or instruments attached
hereto or to be delivered by or on behalf of the Holding Company or the Bank as
contemplated by any provision of this Agreement, or in any of the applications
or documents to be filed with governmental agencies in connection with obtaining
21
requisite approvals for the transactions contemplated hereby, contains or will
contain any untrue statement of a material fact or omits or will omit to state
any material fact necessary to make the statements contained herein or therein,
taken as a whole with all other such lists, documents, instruments or other
information so furnished in light of the circumstances in which they are made,
not misleading.
Section 6.20 Investments.
6.20.1 Set forth in Exhibit 6.20 hereto is a list
of all investment and mortgage-backed and related securities owned by
the Holding Company and the Bank indicating the original cost and
current market value thereof. Except as disclosed in Exhibit 6.20,
since September 30, 1997, no investment or mortgage-backed and related
securities have been acquired or disposed of by the Holding Company or
the Bank except in the ordinary course of business and the Bank's
investments in investment and mortgage-backed and related securities
are in accordance in all material respects with all applicable laws,
regulations, orders, and policy guidelines.
6.20.2 The Holding Company and the Bank have set
forth in Exhibit 6.20 a written description as of the date hereof of
each real estate development project in which the Holding Company or
the Bank has an equity ownership, if any, the amount of funds invested
by the Holding Company and the Bank, the appraised value of any real
property for which appraisals exist and the carrying value on the books
of the Holding Company and the Bank for any such investment and, with
respect to each such project which has not been completed, an estimate
of the cost of completing such project. The Holding Company and the
Bank have made available to LFC true and complete copies of appraisal
reports relating to each such project as are available. Exhibit 6.20
also includes a listing of all other real property in which the Holding
Company or the Bank has an equity interest and the amount of each such
investment. To the best of the Holding Company's and the Bank's
knowledge, there are no facts, circumstances or contingencies which
exist or which are reasonably likely to occur prior to the Closing
(other than general economic conditions and conditions generally
affecting real estate) which would require a material reduction under
generally accepted accounting principles in the aggregate values of the
real estate investments, other real estate owned, joint ventures, and
construction loans of the Holding Company or the Bank which reductions
are not disclosed or reflected in the Financial Statements, or Exhibit
6.20.
Section 6.21 Repurchase Agreements. Unless disclosed in
Exhibit 6.21, with respect to all repurchase agreements pursuant to which the
Holding Company or the Bank is a party, (a) where the Holding Company or the
Bank has an obligation to resell securities it has either good title to or a
valid, perfected first lien or security interest in the government securities or
other collateral securing the repurchase agreement, and the value of the
collateral securing each such repurchase agreement at the date hereof equals or
exceeds the amount of the debt secured by such collateral under such repurchase
agreement, and (b) where the Holding Company or the Bank has the obligation to
repurchase securities, the value of the collateral securing the Holding
Company's or the Bank's obligation does not exceed 100% of the amount of the
obligation.
22
Section 6.22 Significant Agreements. Except as set forth in
Exhibit 6.22 hereto, neither the Holding Company nor the Bank is a party to (in
its own name or as successor in interest) nor bound by any written or oral:
6.22.1 contracts or commitments involving
employment, consulting, deferred compensation, profit sharing, pension,
bonus, retirement, percentage compensation, incentive compensation,
service award, severance payment, employee benefit, or stock option or
warrants;
6.22.2 leases or licenses with respect to any
property, real or personal, as lessor, lessee, licensor, or licensee,
except leases of personal property with the Holding Company or the Bank
as lessee with rental payments of less than $1,000 per annum in the
aggregate;
6.22.3 contract or commitment for capital
expenditures in excess of $2,000 for any one project;
6.22.4 material contract or commitment made other
than in the ordinary course of business for the purchase of materials
or supplies or for the performance of services for a period extending
beyond September 30, 1997;
6.22.5 contract or option for the purchase of any
real or personal property other than in the ordinary course of
business;
6.22.6 letter of credit or guarantee agreement;
6.22.7 collective bargaining or other agreement
entered into with any union or other entity representing employees;
6.22.8 contract or commitment to (a) acquire
investment securities in excess of $25,000, or (b) to extend credit in
excess of $100,000, in each case for any one contract or commitment; or
6.22.9 contracts, commitments, or agreements not
otherwise described in 6.22.1 - 6.22.8 above made outside the ordinary
course of its business, in an amount or with a value of more than
$10,000 in the aggregate.
The Holding Company and the Bank each has performed in all
material respects all material obligations required to be performed by it to
date, and is not in default under, and no event has occurred which, with the
lapse of time or action by a third party, would result in a default under, any
presently outstanding indenture, mortgage, lease, contract, commitment, or
agreement to which the Holding Company or the Bank is a party or by which it is
bound and which is material or is set forth in Exhibit 6.22 hereto, and each
such presently outstanding indenture, mortgage, lease, contract, commitment, or
agreement is a valid, legally binding obligation of the Holding Company and the
Bank, respectively and the other party or parties thereto.
23
Section 6.23 Insurance. Exhibit 6.23 hereto lists the
insurance policies the Holding Company and Bank each has in full force and
effect with respect to its respective assets and business. Unless disclosed in
Exhibit 6.23, since January 1, 1997, neither the Holding Company nor the Bank
has received any notice of cancellation with respect to any of its insurance
policies or bonds, and within the last three years neither the Holding Company
nor the Bank has been refused any insurance coverage sought or applied for
(except where the refusal of coverage relates to an insurer's ceasing generally
to offer a particular type of coverage), and it has no reason to believe that
existing insurance coverage cannot be renewed as and when the same shall expire.
Section 6.24 Transactions with Affiliated Persons. Except as
listed in Exhibit 6.24, or elsewhere in this Agreement, no "affiliated persons"
or "affiliate" of the Holding Company or the Bank, as those terms are defined in
12 C.F.R. ss. 561.5 and 12 C.F.R. ss. 563.41, respectively, have engaged in any
material transactions with either the Holding Company or the Bank or acquired
material assets from the Holding Company or the Bank. Neither the Holding
Company nor the Bank will permit its "affiliated persons" or "affiliates" to
engage in any transaction or acquire any assets except as permitted by
applicable law and only upon the same terms and conditions as would be made to
non-affiliated persons.
Section 6.25 Brokers. Neither Shareholders, the Holding
Company nor the Bank has retained or otherwise engaged or employed any broker,
finder or any other person, or paid or agreed to pay any fee or commission to
any agent, broker, finder or other person, for or on account of such person's
acting as a broker, finder or otherwise in connection with this Agreement or the
transactions contemplated hereby.
Section 6.26 No Default. Neither the Holding Company nor the
Bank is in violation of its respective Certificate of Incorporation, Charter or
other chartering instrument or By-Laws and neither the Holding Company nor the
Bank is in default under and no event has occurred which, with the lapse of time
or action by a third party, would result in a default under the terms of (i) any
judgment, decree, order, or writ of any agency of any government or court,
whether federal, state or local and whether at law or in equity or (ii) any
federal, state, or local law or ordinance or any license, permit, rule or
regulation of any federal or state or local government agency which default
would have a materially adverse affect upon the financial condition, operations,
business or prospects of the Holding Company or the Bank.
Section 6.27 Hazardous Materials. To the best knowledge of
Shareholders, the Holding Company or the Bank, no "Hazardous Materials" (as
hereinafter defined) has been disposed of, buried beneath, or percolated beneath
the real property, or improvements thereon, owned by the Holding Company or the
Bank (the "Real Property"), nor has any Hazardous Materials ever been removed
from and stored off-site of the Real Property or any real or personal property
securing the Loans. Further, to the best knowledge of Shareholders, the Holding
Company or the Bank, there has been no "Release" (as hereinafter defined) of any
Hazardous Materials on or from the Real Property or any improvements thereon.
The Holding Company and the Bank each is in material compliance with all
applicable federal, state and local laws, administrative rulings, and
regulations of any court, administrative agency or other governmental or
quasi-governmental authority, relating to the protection of the environment
(including, but not limited to, laws prohibiting the creation of a public
nuisance). Neither Shareholders, the Holding
24
Company nor the Bank has received notification that it is a potentially
responsible party under Section 107 of the Comprehensive Environmental Response
Compensation and Liability Act of 1980, as amended ("CERCLA"), or Section 7003
of the Resource Conservation and Recovery Act of 1976, as amended ("RCRA"), and
it has not received notification from any federal, state, or local government,
agency, or regulatory body, of a violation. The term "Environmental Laws" for
the purposes of this Agreement, shall include, without limitation, the Clean Air
Act, 42 U.S.C. ss.7401, et seq.; the Clean Water Act, 33 U.S.C. ss.1251, et
seq., and the Water Quality Act of 1981; the Federal Insecticide, Fungicide and
Rodenticide Act ("FIFRA"), 7 U.S.C. ss.136 et seq.; the Marine, Protection,
Research and Sanctuaries Act, 33 U.S.C. ss.1401, et seq.; the National
Environmental Policy Act, 42 U.S.C. ss.4321, et seq.; the Noise Control Act, 42
U.S.C. ss.4901, et seq.; the Occupational Safety and Health Act, 29 U.S.C.
ss.651, et seq.; the RCRA, 42 U.S.C. ss.6901, et seq.; as amended by the
Hazardous and Solid Waste Amendments of 1984; the Safe Drinking Water Act, 42
U.S.C. ss.300f, et seq.; CERCLA, 42 U.S.C. ss.9601, et seq., as amended by the
Superfund Amendments and Reauthorization Act, and the Emergency Planning and
Community-Right-to-Know Act; the Toxic Substance Control Act ("TSCA"), 15 U.S.C.
ss.2601, et seq. and the Atomic Energy Act, 42 U.S.C. ss.2011, et seq., all as
may have been amended as of the date of this Agreement, together with their
implementing regulations and guidelines as of the date of this Agreement. The
term "Environmental Laws" shall also include all state, regional, county,
municipal and other local laws, regulations and ordinances that are equivalent
or similar to the federal laws recited above or that purport to regulate
Hazardous Materials. The term "Hazardous Materials" shall include, without
limitation, any hazardous substance, pollutant, or contaminants regulated under
CERCLA; oil and petroleum products and natural gas, natural gas liquids,
liquified natural gas, and synthetic gas usable for fuel; pesticides regulated
under FIFRA; asbestos, polychlorinated biphenyls, and other substances regulated
under TSCA; source material; special nuclear material, and by-product materials
regulated under the Atomic Energy Act; and industrial process and pollution
control wastes to the extent regulated under applicable Environmental Laws. The
term "Release" shall have the meaning given to such term in Section 101(22) of
CERCLA.
Section 6.28 Improper Payments. Neither the Shareholders, or
any officer, director, agent or employee of the Holding Company or the Bank,
nor, to the knowledge of Shareholders, the Holding Company or the Bank, any
other person or entity (including, without limitation, any affiliate of the
Holding Company or the Bank) acting on behalf of the Holding Company or the
Bank, in any case for which such action may be attributable to the Holding
Company or the Bank, has directly or indirectly, on behalf of or with respect to
the Holding Company or the Bank, (i) made any political contributions with funds
of the Holding Company or the Bank, (ii) made any payment which was not legal to
make or which was not legal for the payee to receive, (iii) received any payment
which was not legal to receive or which was not legal for the payor to make,
(iv) executed any material transaction or payment which is not properly booked
in accordance with generally accepted accounting principles, or (v) had any
off-book bank or cash accounts of which the Holding Company or the Bank was the
beneficial owner.
Section 6.29 Securities Law Matters. The Shareholders hereby
acknowledge that the shares of LFC Common Stock to be transferred to the
Shareholders pursuant to the Merger and this Agreement will not be registered
under the Securities Act of 1933, as amended (the "Securities Act"), or any
applicable state securities laws when issued. Each of the Shareholders
25
represents and warrants to LFC that each Shareholder (i) has reviewed such
information as the Shareholder deemed relevant in connection with the
acquisition of such securities and (ii) is acquiring such securities for
investment purposes only and not with a view to, or in connection with, a
distribution thereof.
ARTICLE VII
REPRESENTATIONS AND WARRANTIES OF LFC AND LOCAL AMERICA
LFC and Local America each hereby make the following
respective representations and warranties to the Shareholders:
Section 7.1 Organization and Standing of LFC and Local
America. LFC is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware. LFC has all requisite power
and authority (corporate and other) and is duly qualified and licensed and
possesses all licenses, franchises, permits and other governmental
authorizations necessary to own, lease and operate its assets and properties and
to conduct its business as now being conducted, including, without limitation,
the full power and authority to issue the shares of LFC Common Stock being
issued and delivered to the Shareholders pursuant to Articles I and V, above, in
order to effectuate the Merger. Local America is a federally chartered stock
savings bank duly organized, validly existing and in good standing under the
laws of the United State of America operating pursuant to a federal charter
granted by the OTS and has the full power and authority (corporate and
otherwise), and is duly qualified and licensed and possesses all licenses,
franchises, permits and other governmental authorizations necessary to own,
lease and operate its assets and properties and to conduct its business as now
being conducted, including, without limitation, the full power and authority to
enter into and perform under this Agreement and the transactions contemplated
hereby. All approvals, if any, required to be obtained from the Board of
Directors or the shareholders of Local America under Local America's Charter and
By-Laws or applicable law have been obtained or will be obtained prior to the
Closing Date.
Section 7.2 Authority. LFC and Local America each has full
corporate power and authority to carry out the transactions provided for in this
Agreement on the terms and conditions set forth herein. The execution and
delivery of this Agreement and the consummation by LFC and Local America,
respectively, of the transactions contemplated hereby have been duly and validly
authorized by all necessary corporate action. This Agreement constitutes a valid
and legally binding obligation of LFC and of Local America, enforceable against
LFC and Local America, respectively, in accordance with its terms, except that
the enforcement of the rights and remedies created hereby and thereby is subject
to bankruptcy, insolvency, reorganization and similar laws of general
application affecting the rights and remedies of creditors and that the
availability of the remedy of specific performance or of injunctive relief is
subject to the discretion of the court before which any proceeding therefor may
be brought. Neither the execution and delivery of this Agreement, nor the
consummation by LFC and Local America of the transactions contemplated hereby
will violate, conflict with, result in a breach of, or constitute a default
under, any terms, condition or provision of (a) the Charter, Certificate of
Incorporation, or By-Laws of LFC or Local America, respectively, (b) any
agreement or instrument to which
26
LFC or Local America, respectively, is a party or by which it is bound, or (c)
any material order, judgment or decree to which either LFC or Local America is
subject.
Section 7.3 Brokers. Except for any fees owing by separate
agreement to Friedman, Billings, Xxxxxx & Co., Inc. ("FBR"), conditioned upon
successful consummation of the Merger, neither LFC nor Local America has
retained or otherwise engaged or employed any broker, finder, underwriter or any
other person, or paid or agreed to pay any fee or commission or underwriting
fees to any agent, broker, finder or other person, for or on account of such
person's acting as a broker or finder or underwriter in connection with this
Agreement or the transactions contemplated hereby.
Section 7.4 Legal Proceedings. There are no material legal
proceedings pending against or affecting, or, to the knowledge of LFC or Local
America, threatened against or affecting either LFC or Local America, any of
which would prevent LFC or Local America from carrying out its respective
obligations under the Agreement.
Section 7.5 Consents and Approvals. Except for consents and
approvals of or filings or registrations with or notices to the OTS and the FDIC
or the expiration of any related applicable waiting periods, no consents or
approvals of or filings or registrations with, or notices to any governmental
agency, commission or authority are necessary, and no waiting periods related
thereto are required to expire, in connection with (i) the execution and
delivery by LFC or Local America of this Agreement and (ii) the consummation by
LFC or Local America of the transactions contemplated hereby.
Section 7.6 No Impending Material Adverse Events. As of the
date hereof, neither LFC nor Local America has knowledge of any impending loss
of business, or of any other presently existing facts or circumstances which
would be reasonably likely to have a material adverse effect upon the financial
condition, operations, business, or prospects of LFC or of Local America,
respectively.
Section 7.7 Full Disclosure. None of the information
concerning LFC or Local America contained in this Agreement and the schedules
hereto, or in any of the lists, documents or instruments attached hereto or to
be delivered by or on behalf of LFC or Local America as contemplated by a
provision of this Agreement, or in any of the applications or documents to be
filed with governmental agencies in connection with obtaining requisite
approvals for the transactions contemplated hereby, contains or will contain any
untrue statement of a material fact or omits or will omit to state any material
fact necessary to make the statements contained herein or therein, taken as a
whole with all other such lists, documents, instruments or other information so
furnished in light of the circumstances in which they are made, not misleading.
Section 7.8 Capitalization of LFC; LFC Common Stock. The
authorized capital stock of LFC consists of (i) 25,000,000 shares of LFC Common
Stock, par value $0.01 per share, of which 19,700,000 shares were issued and
outstanding as of the date of this Agreement, and (ii) 5,000,000 shares of LFC
Preferred Stock, par value $0.01 per share, of which no shares are issued and
outstanding. All of the issued and outstanding shares of the capital stock of
LFC are duly and validly authorized and issued, fully paid and non-assessable
and have not been issued in violation of any pre-emptive rights. Except for the
stock options granted to
27
Xxxxxxxx and Norton and the stock warrants granted to FBR, there are no
outstanding subscriptions, convertible or exchangeable securities, warrants,
options, contracts, calls, or other rights of any kind committing or obligating
LFC to issue or sell any issued or unissued shares of its capital stock, or any
securities or obligations of any kind convertible into its capital stock. The
shares of LFC Common Stock to be issued to each of the Shareholders on the
Closing Date in consummation of the Merger and pursuant to this Agreement are
duly authorized and, when issued in accordance with the terms of this Agreement
on the Closing Date, will be validly issued, fully paid and non-assessable.
Section 7.9 Improper Payments. Neither LFC, Local America or
any officer, agent or employee of LFC or Local America, nor to the knowledge of
LFC or Local America, any other person or entity (including, without limitation,
any affiliate of LFC or Local America) acting on behalf of LFC or Local America,
in any case for which such action may be attributable to LFC or Local America,
has directly or indirectly, on behalf of or with respect to LFC or Local America
(i) made any political contributions with funds of LFC or Local America, (ii)
made any payment which was not legal to make or which was not legal for the
payee to receive, (iii) received any payment which was not legal to receive or
which was not legal for the payor to make, (iv) executed any material
transaction or payment which is not properly booked in accordance with generally
accepted accounting principles, or (v) had any off-book bank or cash accounts of
which LFC or Local America was the beneficial owner.
Section 7.10 Securities Law Matters.
7.10.1 LFC hereby acknowledges that the Shares
which will be transferred to it pursuant to the Merger will not be
registered under the Securities Act, or any applicable state securities
laws. LFC represents and warrants to the Shareholders that LFC (i) has
reviewed such information as LFC has deemed relevant in connection with
LFC's acquisition of such securities, and (ii) is acquiring such
securities for investment purposes only and not with a view to, or in
connection with, a distribution thereof.
7.10.2 The Shares of LFC Common Stock to be
transferred to the Shareholders pursuant to this Agreement and in
consummation of the Merger will not be registered under the Securities
Act or any applicable state securities laws. Such securities will be
issued to the Shareholders in reliance upon the exemption from
registration contained in Section 4(2) of the Securities Act and
similar provisions of state securities laws.
Section 7.11 Capitalization of Local America; Local America
Common Stock. The authorized capital stock of Local America consists of
1,000,000 shares of Local America common stock, par value $1.00 per share
("Local America Common Stock"), of which 100,000 shares are issued and
outstanding. No preferred stock is authorized. All 100,000 shares of issued and
outstanding Local America Common Stock is owned by Local America, Inc., an
Oklahoma corporation, the wholly-owned subsidiary of Local Federal, in turn, the
wholly-owned bank subsidiary of LFC.
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ARTICLE VIII
FURTHER COVENANTS AND AGREEMENTS OF THE PARTIES
Section 8.1 Conduct of Business. Shareholders, the Holding
Company and the Bank jointly and severally warrant and covenant to LFC that
between the date hereof and the Closing Date the business of the Holding Company
and the Bank shall (except with the prior written approval of LFC), be conducted
in accordance with the following:
8.1.1 Except as contemplated by this Agreement,
neither the Holding Company nor the Bank shall engage in any
transaction or incur any obligations except in the ordinary course of
business consistent with current business practices and good corporate
and banking practices. The Holding Company and the Bank shall each use
its best efforts to maintain in effect all approvals, licenses and
authorizations from federal and state regulatory bodies and officials
and all other rights, approvals and consents required to carry on their
respective business as now being conducted.
8.1.2 The Holding Company and the Bank shall each
use its respective best efforts to maintain and preserve its business
organization intact (including, to the extent consistent with good
business practice under the circumstances, and pursuant to and in
accordance with the previous disclosures made by the Holding Company
and the Bank to LFC about appropriate reductions in the staff of the
Bank due to the Merger, the retention of its employees) and maintain
its relationships and goodwill with deposit account holders, borrowers,
employees and others having business relationships with the Holding
Company or the Bank so that they will be preserved for LFC on and after
the Closing Date.
8.1.3 The Holding Company and the Bank shall each
be maintained at all times as a corporation duly organized, validly
existing and in good standing and shall be qualified to conduct its
business as now being conducted in accordance with all applicable laws.
8.1.4 The Holding Company and the Bank shall each
take all steps reasonably necessary to maintain in force all existing
casualty, liability and other insurance policies and fidelity bonds
with respect to its business, properties, employees and agents, or
replace them with substantially similar policies and bonds providing
substantially the same coverage.
8.1.5 The Holding Company and the Bank shall each
not make any change in their respective methods of accounting or in
their respective applications of generally accepted accounting
principles from the methods consistently applied throughout the periods
covered by the Financial Statements referred to in Section 6.5 of this
Agreement, except for changes required by changes in generally accepted
accounting principles and changes in applicable regulatory
requirements.
29
8.1.6 The Holding Company and the Bank shall each
at their expense maintain all of their properties in their present
repair, order and condition, ordinary wear and tear excepted.
8.1.7 Neither the Holding Company nor the Bank
shall (i) amend its respective Certificate of Incorporation, Charter or
By-Laws, except as specified herein, or as consented to in advance by
LFC, (ii) or merge or consolidate with or into any other corporation,
(iii) effect any stock split, or change in any manner the rights of the
holders of its capital stock or the character of its business or (iv)
elect any additional directors or officers.
8.1.8 Neither the Holding Company nor the Bank
shall redeem or issue any securities or enter into any agreement
providing for or granting any option, warrant, call, commitment or
agreement of any character relating to the purchase, redemption or
issuance of securities of the Holding Company or Bank, nor shall the
Holding Company or the Bank declare or pay any cash or stock dividends
on any of their respective shares of issued and outstanding capital
stock.
8.1.9 Neither the Holding Company nor the Bank
shall take any action or omit to take any action which to their
respective knowledge will cause a material breach of any of their
respective contracts, commitments or obligations, including, but not
limited to, their respective obligations under this Agreement.
8.1.10 Neither the Holding Company nor the Bank
will (i) grant any increase in compensation or pay any bonus to any
officer or other employee except in the following instances: (x) in the
ordinary course of business and in accordance with past practices; (y)
except as provided for by contracts in existence as of the date hereof;
and (z) except for the $500,000 severance pay fund established by the
Bank to pay severance pay benefits in such amounts and to such of those
employees of the Bank whose employment is severed by reason of the
Merger, (excluding Xxxxxxxx, Xxxxxx and Park), as the Chairman and
Chief Executive Officer of the Bank shall deem appropriate, in his sole
and absolute discretion, pursuant to the authority granted to him by
the Bank's Board of Directors. No bonuses shall be paid by the Holding
Company or the Bank to Xxxxxxxx, Xxxxxx or Park other than the
cancellation by the Holding Company or the Bank on or before the date
of this Agreement, of all promissory notes made, executed or delivered
to the Holding Company or the Bank by Xxxxxxxx, Norton or Park and of
any other indebtedness of Norton to the Holding Company; or (ii) enter
into, amend or alter any bonus, incentive compensation, profit sharing,
stock purchase, stock option, retirement, pension, group insurance,
death benefit or other fringe benefit, arrangement or trust agreement
for the benefit of officers or other employees of the Holding Company
or the Bank, or any employment or consulting agreement, except for the
severance pay fund of $500,000 established by the Bank, as described
above in this Subsection; or (iii) increase the staff of the Holding
Company or the Bank; or (iv) pay any deferred compensation to any of
their directors, officers or employees other than the pre-existing
obligation of the Bank to pay deferred compensation to Park or Xxxxxx
Xxxxxxx which shall have been fully paid on or before the date of this
Agreement.
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8.1.11 The Holding Company and the Bank shall
exercise good faith and use their best efforts to duly comply with all
laws and regulations applicable to them and to the conduct of their
business, including the Community Reinvestment Act, and all applicable
anti-discrimination statutes and regulations regarding employment
practices and the extension or denial of credit. the Holding Company
and the Bank shall each file all tax returns and pay all taxes required
of them and shall not extend or agree to the extension of any statutes
of limitations.
8.1.12 Without limiting any of the foregoing
covenants, the Holding Company and the Bank each shall conduct its
business and affairs until the Closing in such manner that all of the
representations and warranties contained in Article VI of this
Agreement required to be true at such time shall be true at such time,
and so that all its agreements and conditions contained in this
Agreement to be performed by such time are so performed.
8.1.13 Neither the Holding Company nor the Bank
shall (i) incur or guarantee any additional borrowings or (ii) pledge
any of their assets, except, in each such case in the ordinary course
of business and consistent with current business practice, and good
corporate and banking practices.
8.1.14 Neither the Holding Company or the Bank
shall purchase or sell or contract to sell any of their assets except
in the ordinary course of business, consistent with their current
business practice.
8.1.15 Between the date hereof and the Closing
Date, neither the Holding Company nor the Bank shall take any of the
actions, or allow any of the changes or matters to transpire which are
set forth in Section 6.11 of this Agreement.
Section 8.2 Access and Information.
8.2.1 Consistent with applicable law, the Holding
Company and the Bank each will permit LFC, through its designated
agents, accountants, counsel, auditors, and other representatives
(collectively referred to as "Agents"), to make or cause to be made
such investigation of the business, properties and personnel of the
Holding Company and the Bank, respectively, as LFC may reasonably deem
necessary or advisable prior to the Closing under the circumstances.
LFC and its Agents shall, at reasonable times and with reasonable
notice given to the Holding Company and the Bank, without unduly
interfering with the normal business operations of the Holding Company
or the Bank, have full access to the premises and to all the
properties, books, contracts, commitments, and records of the Holding
Company or the Bank. The Holding Company and the Bank shall, and shall
also authorize and direct its auditors, accountants, and counsel, to
cooperate with LFC and its Agents in making available to them all
financial and other information requested, including, without
limitation, providing them with the right to examine all working papers
pertaining to audits made and to make copies and extracts thereof, and
full and complete access to all information concerning any litigation
in which either of them is currently involved. No investigation by or
on behalf of LFC under this Section
31
or otherwise will affect any of the representations and warranties of
Shareholders, the Holding Company or the Bank under this Agreement.
8.2.2 Until the Closing, each of the Parties
hereto and their respective employees, agents, accountants, counsel,
auditors and other representatives shall keep confidential any
information (unless readily ascertainable from public information or
sources) obtained from the other party, except as may be required to be
disclosed to regulatory authorities, the public or to stockholders in
proxy and related materials. If this Agreement is terminated, promptly
after such termination all documents, working papers or other written
material obtained by one party from the other party in connection with
this Agreement shall be returned to the party that provided such
material and all additional copies thereof shall be destroyed by the
non-providing party.
8.2.3 Commencing with the date hereof and
continuing until the first to occur of the Closing Date or the
termination of this Agreement, the Holding Company and the Bank shall
each promptly advise LFC in writing of any matter relating to its
respective financial condition, operations, assets, liabilities or
business which arises or is discovered after the date of this
Agreement, and which if existing or known on the date hereof would have
been required to be set forth or described herein or in one of the
Exhibits hereto.
Section 8.3 Cooperation. The Parties hereto shall cooperate
with each other in every way in carrying out the transactions contemplated
hereby, in obtaining all required regulatory and any other approvals and
authorizations therefor, and in executing and delivering all documents,
instruments or copies thereof deemed necessary or useful by either party hereto.
LFC shall, at its sole cost and expense, promptly prepare and file such
regulatory applications as are necessary to secure all federal approvals
necessary to effectuate the transactions contemplated herein and Shareholders,
the Holding Company and the Bank shall assist LFC with respect to any
applications to be filed with the OTS and the FDIC, provided, that the
preparation and expense of all such applications shall be the sole
responsibility of LFC. Each party shall have the right to review and approve in
advance all characterizations of the information relating to it and made by the
other party which appear in any filing made in connection with the transactions
contemplated by this Agreement.
Section 8.4 LFC to Have No Control of the Holding Company or
the Bank Prior to the Closing Date. Prior to the Closing Date, LFC will not
control or attempt to exercise control (as that term is defined in the Bank
Control Act) of the business or affairs of the Holding Company or the Bank.
Prior to the Closing Date, the management and policy control of the Holding
Company and the Bank will each reside solely in its officers and directors and
the election of directors shall be solely the affair of their respective
shareholders.
Section 8.5 Employees and Benefits. All employees of the Bank,
will, upon the Closing Date, continue as employees of Local America but the
continuation of said employment thereafter shall be within the discretion of the
officers and directors of Local America, except to the extent otherwise
specifically provided in this Agreement.
32
Section 8.6 Agreement Not to Negotiate. As a material
inducement to cause LFC to enter into this Agreement, Shareholders, the Holding
Company and the Bank each hereby agrees that during the term of this Agreement
they will not, either themselves, itself, or through their, or its officers,
directors, employees, agents, representatives or others, (a) solicit any other
acquisition proposals or negotiate with other persons or entities regarding
other acquisition proposals, or (b) provide (except as may be required by law)
any non-public information documents or materials to any person or entity (other
than LFC), or its agents, in connection with any such proposals. If
Shareholders, the Holding Company or the Bank violates this 8.6 in any respect,
then, and in such event, LFC shall be entitled to immediately seek the specific
performance of this Agreement and Shareholders agree that, in such event, such
equitable remedy will be necessary and appropriate for LFC to seek and that a
legal remedy of damages would not be adequate.
Section 8.7 Combination Agreement. Subject to obtaining the
prior approval of the OTS thereto, it is the intention of LFC, immediately upon
consummation of the Merger, to cause the Bank to be merged into Local America
(the "Bank Merger"), pursuant to the terms and conditions of that certain
Combination Agreement, made and entered into this same date by and among LFC,
the Holding Company, Bank and Local America, substantially in the form of the
copy thereof which is attached to this Agreement as Exhibit "8.7" for ready
reference. When and if the requisite approval of the OTS has been obtained to
the Merger and the Bank Merger described in this Agreement and in the
Combination Agreement, respectively, LFC shall cause the Bank to make, execute
and enter into appropriate Articles of Combination with Local America, in
fulfillment of the Combination Agreement, and to perform the transactions
described therein, and further to execute and enter into such other agreements
and documents, which are deemed necessary by LFC or Local America to accomplish
the purposes set forth and described in the Combination Agreement. The result of
the Combination Agreement, when fully consummated, will be to cause Local
America to be the surviving bank and all of the assets and liabilities of the
Bank to be owned and operated by Local America. The Holding Company and the Bank
will cease to exist.
Section 8.8 Registration Rights to be Granted by LFC to
Xxxxxxxx, Xxx Xxxxx and Xxxxxx. As a material inducement to Xxxxxxxx, Xxx Xxxxx
and Xxxxxx to enter into this Agreement and consummate the Merger of the Holding
Company into LFC and thereby convert their Holding Company Preferred Stock and
their Holding Company Common Stock to LFC Common Stock, as provided above in
this Agreement, LFC hereby covenants and agrees to accord to all shares of LFC
Common Stock acquired by Xxxxxxxx, Xxx Xxxxx and Xxxxxx pursuant to the Merger
and in fulfillment thereof, the same treatment being accorded to those persons
who purchased LFC Common Stock pursuant to that certain Private Placement
Memorandum dated August 25, 1997, pursuant to the terms and conditions of that
certain Registration Rights Agreement, dated September 8, 1997, entered into by
and between LFC, FBR, and the investors who acquired LFC Common Stock pursuant
to the aforedescribed Private Placement Memorandum ("Registration Rights
Agreement"). Pursuant to the terms and conditions of the Registration Rights
Agreement, LFC will cause to be filed with the Securities and Exchange
Commission a Shelf Registration Statement providing for the offer and sale of
LFC Common Stock and will use its best efforts to cause the Shelf Registration
Statement to be declared effective under applicable securities laws as promptly
as possible and to keep effective the Shelf Registration Statement for the
periods of time described in the Registration Rights
33
Agreement. LFC hereby agrees that Xxxxxxxx, Xxx Xxxxx and Xxxxxx shall be
entitled to all of the same rights, benefits and entitlements of the investors
and holders of LFC Common Stock which are set forth and contained in the
Registration Rights Agreement, as fully as if each of them had been an original
party to the Registration Rights Agreement. In turn, Xxxxxxxx, Xxx Xxxxx and
Xxxxxx each respectively covenant and agree to abide by and fully perform all of
the obligations imposed on the "Investors" under the terms and conditions of the
Registration Rights Agreement as fully as if they had been an original signatory
party thereof. As a result of these covenants, all shares of LFC Common Stock
issued to Xxxxxxxx, Xxx Xxxxx and Xxxxxx, pursuant to the Merger, shall be
included in the Shelf Registration Statement filed by LFC pursuant to the
aforesaid Registration Rights Agreement.
Section 8.9 Shareholder's Agreements. As a material inducement
to LFC to enter into this Agreement, each of the Shareholders covenants and
agrees that:
8.9.1 Such Shareholder shall, at any meeting (or
action by unanimous written consent) of the Holding Company's
stockholders called for the purpose, vote, or cause to be voted, all
shares of the Holding Company Common Stock held by him (whether owned
as of the date hereof or hereafter acquired) in favor of the Agreement
and against any plan or proposal pursuant to which the Holding Company
and/or the Bank is to be acquired by or merged with, or pursuant to
which the Holding Company and/or the Bank proposes to sell all or
substantially all of its assets and liabilities to, any person, entity
or group (other than LFC or any affiliate thereof).
8.9.2 Such Shareholder shall not, prior to the
consummation of the Merger or the earlier termination of the Agreement
in accordance with its terms, sell, pledge, transfer or otherwise
dispose of his shares of the Holding Company Common Stock.
Section 8.10 Alternative Structure. Notwithstanding any
provision of this Agreement to the contrary, LFC may, with the written consent
of the Holding Company, which shall not be unreasonably withheld, elect, subject
to the filing of all necessary applications and the receipt of all required
regulatory approvals, to modify the structure of the acquisition of the Holding
Company and the Bank set forth herein (including, without limitation,
restructuring the Bank Merger), provided that (i) the federal income tax
consequences of any transactions created by such modification shall not be other
than those set forth in 9.9 hereof, (ii) the consideration to be paid to the
holders of the Holding Company Common Stock and Holding Company Preferred Stock
is not thereby changed in kind or reduced in amount as a result of such
modification, and (iii) such modification will not materially delay or
jeopardize receipt of any required regulatory approvals or any other condition
to the obligations of the LFC set forth in Article IX hereof.
34
ARTICLE IX
CONDITIONS TO OBLIGATIONS OF LFC
The obligations of LFC to complete the transactions provided
for in this Agreement shall be subject to the complete satisfaction, on or prior
to the Closing Date of each of the following conditions precedent, provided that
any such condition (other than those set forth in 9.1 below) may be waived by
LFC.
Section 9.1 Regulatory Approval. To the extent required by
applicable law and regulations, (i) all applicable federal regulatory
authorities having jurisdiction over the approval of this transaction, to
include, without limitation, the FDIC and the OTS, shall have approved this
Agreement and the transactions contemplated by this Agreement without the
imposition of any condition or conditions which in the reasonable opinion of
LFC, are unduly burdensome; (ii) all required notices have been published and
all applicable waiting periods, including those under the Xxxx Xxxxx Xxxxxx Act,
have expired.
Section 9.2 Performance of Agreements. Shareholders, the
Holding Company and the Bank shall have performed all conditions, duties and
obligations contained in this Agreement required to be performed by each of them
prior to the Closing.
Section 9.3 Continued Accuracy of Representations and
Warrranties. The representations and warranties of Shareholders, the Holding
Company and the Bank set forth in Article VI hereof shall be true and correct in
all material respects on and as of the Closing Date with the same effect as if
made on such date.
Section 9.4 Delivery of Shareholders' Closing Certificate. LFC
shall have received a certificate, dated the Closing Date, of Shareholders, the
Holding Company and the Bank, signed on behalf of the Holding Company by its
President and on behalf of the Bank by its President and by its Chief Financial
Officer, certifying to the satisfaction of the conditions set forth in s 9.2,
9.3, 9.5, 9.7 and 9.8 of this Article IX to the best of the signers' knowledge
after careful investigation (the "Shareholders' Closing Certificate").
Section 9.5 Absence of Financial Changes. There shall have
been no material adverse change in the operations, business, assets, prospects
or financial condition of the Holding Company or the Bank, taken as a whole
since September 30, 1997, other than changes which are the result of changes in
laws or regulations or other factors affecting banking institutions in general,
and except for changes not prohibited by this Agreement.
Section 9.6 Opinion of Counsel. LFC shall have received from
counsel for Shareholders, the Holding Company and the Bank, an opinion of
counsel, dated the Closing Date, substantially in the form set forth in Exhibit
5.3 hereto. In rendering such opinion, counsel for Shareholders, the Holding
Company and the Bank may rely upon the opinion of qualified counsel, upon
certificates of government officials and officers of the Holding Company and the
Bank, provided that such counsel states that such counsel reasonably believes
that such counsel and LFC may justifiably rely upon such other opinions and the
accuracy of such certificates, and
35
provided further that such other opinions and certificates are delivered to LFC
concurrently with such counsel's opinion.
Section 9.7 Absence of Litigation. tThere shall not be pending
any action in any court of competent jurisdiction seeking to enjoin consummation
of the transactions contemplated by this Agreement, or any action which in the
opinion of counsel for LFC, after an independent review of readily available
facts and applicable law, poses a significant risk of resulting in the
divestiture by LFC of the Bank or the Holding Company, or any material portion
of the Holding Company's or the Bank's assets, or otherwise threatens to
materially impair the value of the assets of the Holding Company and/or the
Bank, or the assessment of significant damages if the transactions contemplated
by this Agreement are consummated.
Section 9.8 Third Party Consents. The Holding Company and the
Bank shall have received the consent of all third parties who are subject to
agreements with the Holding Company or the Bank and which agreement requires or
purports to require the consent of the other or another party thereto to the
transactions contemplated by this Agreement.
Section 9.9 Tax Opinion. LFC shall have received an opinion
addressed to LFC and to the Shareholders and issued by a law firm or accounting
firm designated by LFC, to the effect that, on the basis of the facts,
representations and assumptions set forth in such opinion which are consistent
with the state of facts existing on the Closing Date, the Merger and the Bank
Merger will be treated for federal income tax purposes as part of one or more
reorganizations within the meaning of 368 of the Code, and that accordingly:
9.9.1 no gain or loss will be recognized by (i)
LFC or the Holding Company as a result of the Merger, or (ii) the Bank
or Local America as a result of the Bank Merger;
9.9.2 no gain or loss will be recognized by the
Shareholders who exchange their Holding Company Common Stock and/or
Holding Company Preferred Stock for LFC Common Stock pursuant to the
Merger (except with respect to cash received in lieu of a fractional
share interest in LFC Common Stock);
9.9.3 the tax basis of the LFC Common Stock
received by the Shareholders who exchange all of their Holding Company
Common Stock and/or Holding Company Preferred Stock for LFC Common
Stock in the Merger will be the same as the tax basis of the Holding
Company Common Stock and/or Holding Company Preferred Stock surrendered
in exchange therefor (reduced by any amount allocable to a fractional
share interest for which cash is received).
Section 9.10 Resignation of Directors and Officers. LFC shall
have received the written resignations of all the current members of the Board
of Directors and officers of the Holding Company and the Bank (effective on the
Closing Date).
36
ARTICLE X
CONDITIONS TO OBLIGATIONS OF SHAREHOLDERS,
THE HOLDING COMPANY AND BANK
The obligations of Shareholders, the Holding Company and Bank
to complete the transactions provided for in this Agreement shall be subject to
the satisfaction, at or prior to the Closing Date, of each of the following
conditions precedent by LFC and Local America, provided that any such condition
(other than those set forth in 10.3 below) may be waived by Shareholders, the
Holding Company and the Bank.
Section 10.1 Performance of Agreements. LFC and Local America,
respectively, shall have performed all conditions, duties and obligations
contained in this Agreement required to be performed by it prior to the Closing
Date, and LFC shall be prepared to issue all shares of LFC Common Stock required
to be issued to the Shareholders on the Closing Date pursuant to Articles I and
V of this Agreement, above.
Section 10.2 Continued Accuracy of Representations and
Warranties. The representations and warranties of LFC and Local America
contained in Article VII of this Agreement shall, be true and correct in all
material respects on and as of the Closing Date with the same effect as if made
on that date.
Section 10.3 Regulatory Approvals. To the extent required by
applicable law and regulations, all applicable federal regulatory authorities,
if any, to include, without limitation, the FDIC and the OTS, shall have
approved this Agreement and the transactions contemplated by this Agreement,
without the imposition of any condition or conditions which in the reasonable
opinion of Shareholders are unduly burdensome and all applicable waiting periods
have expired and all required notices have been published.
Section 10.4 Delivery of LFC's Closing Certificate.
Shareholders shall have received a certificate, dated the Closing Date, of LFC's
Executive Vice President or of any other Vice President, certifying to the
satisfaction of the conditions set forth in s 10.1, 10.2 and 10.5 of this
Article X to the best of the knowledge of the Executive Vice President, or any
other Vice President, after careful investigation ("LFC's Closing Certificate").
Section 10.5 Absence of Litigation. There shall be no pending
or threatened litigation or administrative proceeding seeking to restrain,
prevent, rescind or change the terms of the transaction contemplated by this
Agreement or to obtain damages in connection therewith or any preliminary
injunction restraining such transactions.
Section 10.6 Tax Opinion. Shareholders shall have received an
opinion addressed to LFC and to the Shareholders and issued by a law firm or
accounting firm designated by LFC, to the effect that, on the basis of the
facts, representations and assumptions set forth in such opinion which are
consistent with the state of facts existing on the Closing Date, the Merger and
the Bank Merger will be treated for federal income tax purposes as part of one
or more reorganizations within the meaning of 368 of the Code, and that
accordingly:
37
10.6.1 no gain or loss will be recognized by (i)
LFC or the Holding Company as a result of the Merger, or (ii) the Bank
or Local America as a result of the Bank Merger;
10.6.2 no gain or loss will be recognized by the
Shareholders who exchange their Holding Company Common Stock and/or
Holding Company Preferred Stock for LFC Common Stock pursuant to the
Merger (except with respect to cash received in lieu of a fractional
share interest in LFC Common Stock);
10.6.3 the tax basis of the LFC Common Stock
received by the Shareholders who exchange all of their Holding Company
Common Stock and/or Holding Company Preferred Stock for LFC Common
Stock in the Merger will be the same as the tax basis of the Holding
Company Common Stock and/or Holding Company Preferred Stock surrendered
in exchange therefor (reduced by any amount allocable to a fractional
share interest for which cash is received).
Section 10.7 Opinion of Counsel. Shareholders shall have
received from counsel to LFC an opinion of counsel, dated the Closing Date,
substantially in the form set forth in Exhibit 5.2 hereto. In rendering such
opinion, counsel for LFC may rely upon the opinion of qualified counsel, upon
certificates of government officials and officers of LFC, provided such counsel
states that such counsel reasonably believes that such counsel and LFC may
justifiably rely upon such other opinions and the accuracy of such certificates,
and provided further that such other opinions and certificates are delivered to
the Shareholders concurrently with such counsel's opinion.
ARTICLE XI
TERMINATION, AMENDMENT AND WAIVER
Section 11.1 Termination by Mutual Consent. This Agreement may
be terminated prior to the Closing Date by the mutual written consent of all
Parties hereto.
Section 11.2 Termination by Any Party. This Agreement may be
terminated by either LFC or Shareholders twenty (20) or more days after receipt
of notice of final denial by any regulatory authority having jurisdiction of the
transactions contemplated hereby.
Section 11.3 Termination by LFC. LFC may terminate this
Agreement by giving written notice to Shareholders, the Holding Company or the
Bank (i) if any condition in Article IX hereof which must be fulfilled shall not
have been fulfilled on or before the date specified for the fulfillment thereof;
provided, however, that such notice shall include a statement of the grounds
thereof and Shareholders, the Holding Company or the Bank shall have twenty (20)
days thereafter to cure the events or conditions cited in such notice (to the
extent curable) and if Shareholders, the Holding Company or the Bank cures the
events or conditions giving the rise to such grounds to the satisfaction of LFC,
LFC shall not have any right to terminate this Agreement based upon such
specified events or conditions. If LFC does elect to terminate this Agreement,
pursuant to this provision, and Shareholders, the Holding Company or Bank are
unable to timely cure their default or breach within the said twenty (20) day
period, then, in such
38
event, this Agreement shall be null, void and of no force and effect and none of
the Parties hereto shall have any further rights, duties or liabilities
hereunder unless otherwise expressly provided in this Agreement.
Section 11.4 Termination by Shareholders, the Holding Company
or Bank. Termination by Shareholders, the Holding Company or Bank. Shareholders
may terminate this Agreement by giving written notice to LFC if any condition in
Article X hereof which must be fulfilled before Shareholders, the Holding
Company or Bank is obligated to consummate the transactions contemplated hereby
shall not have been fulfilled on or before the date specified for the
fulfillment thereof; provided, however, that such notice shall include a
statement of the grounds thereof and LFC shall have twenty (20) days thereafter
to cure the events or conditions cited in such notice (to the extent curable)
and if LFC cures the events or conditions giving rise to such grounds,
Shareholders shall not have any right to terminate this Agreement based upon
such events or conditions. If Shareholders do elect to terminate this Agreement,
pursuant to this , and LFC is unable to timely cure its breach or default within
said twenty (20) day period of time, then, and in such event, this Agreement
shall become null, void and of no further force and effect, and none of the
Parties hereto shall have any further rights, duties or liabilities hereunder,
unless otherwise expressly provided in this Agreement.
Section 11.5 Termination by Expiration. If the transactions
contemplated by this Agreement have not been consummated prior to July 31, 1998,
any party hereto may elect to terminate this Agreement by giving written notice
to the other party hereto; provided that this right to terminate shall not be
available to any party hereto whose failure to perform an obligation under the
Agreement has been the cause of, or has resulted in, the failure of the
transactions contemplated herein to be consummated by July 31, 1998.
Section 11.6 Amendment. This Agreement may be amended or
modified in whole or in part at any time by an agreement in writing executed by
all of the Parties hereto.
Section 11.7 Waiver. At any time prior to the Closing Date,
any party to this Agreement may, on their own behalf:
11.7.1 waive any inaccuracies in the
representations and warranties by the other party contained herein or
in any document delivered by the other party pursuant hereto; or
11.7.2 waive compliance by the other party with
the covenants, agreements or conditions contained herein.
Any agreement to such waiver shall be valid only if set forth
in an instrument in writing executed by a duly authorized officer or
representative of the party granting such waiver.
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ARTICLE XII
GENERAL AND MISCELLANEOUS PROVISIONS
Section 12.1 Confidentiality.
12.1.1 LFC and Local America acknowledge and agree
that the information to be provided by the Shareholders, the Holding
Company or the Bank to LFC and Local America under this Agreement and
with regard to the transaction contemplated by this Agreement will
contain information, reports and financial data which are confidential
in nature and the property of Shareholders, the Holding Company or the
Bank, as the case may be (the "Confidential Information"). Accordingly,
LFC and Local America each agree that they, and any of their respective
directors, officers, attorneys, accountants, employees or other agents
that are given access to the Confidential Information, agree to be
bound by the terms and provisions of this 12.1 of the Agreement. In
consideration of the Shareholders, the Holding Company and the Bank
providing LFC and Local America with the Confidential Information, LFC
and Local America agree to keep the Confidential Information in strict
confidence, except as otherwise provided by this Agreement, and in
order to maintain its confidentiality, LFC and Local America agree that
they will not use or allow the use for any purpose of any Confidential
Information other than in connection with preparing, evaluating and
performing the transaction to be consummated pursuant to this
Agreement. LFC and Local America will not disclose or allow disclosure
to others of any of the Confidential Information, except as provided
herein and except to officers, employees, directors, attorneys,
accountants or agents of LFC or Local America who are actively and
directly participating in LFC's or Local America's work in connection
with the consummation of the transaction contemplated by this Agreement
and LFC and Local America will each use its best efforts to cause all
such officers, employees, directors, attorneys, accountants or agents
to observe the terms of this section. Finally, LFC and Local America
agree not to make or allow to be made copies of any of the Confidential
Information except as necessary to perform the work to be performed by
LFC and Local America in conjunction with its evaluating and
consummating the transaction contemplated by this Agreement. Both LFC,
Local America and Shareholders agree to also keep in strict confidence
all terms and provisions of this Agreement.
12.1.2 The provisions of this 12.1 shall be
inoperative as to particular portions of the Confidential Information
if such information (i) becomes generally available to the public other
than as a result of a disclosure by LFC, Local America, or their
respective officers, directors, attorneys, accountants, employees or
agents; (ii) was available to LFC or Local America on a
non-confidential basis prior to its disclosure to LFC or Local America
by the Shareholders, the Holding Company or the Bank, or their
respective officers, employees, directors, agents, advisors or
representatives; (iii) becomes available to LFC or Local America on a
non-confidential basis from a source other than the Shareholders, the
Holding Company or the Bank, or their respective officers, employees,
directors, agents, advisors or representatives, unless LFC or Local
America knows, after due inquiry, that such source is not entitled to
make the disclosure of such information to it; or (iv) is disclosed to
the OTS or FDIC, or any other federal regulatory
40
authority having jurisdiction over LFC, Local America, the Holding
Company or the Bank, upon a proper and valid request being made
therefor by such agency. The provisions of this 12.1 shall be binding
upon LFC and Local America and their respective directors, officers,
employees, accountants, attorneys and agents for a period of one (1)
year from September 30, 1997, or until the Closing Date, if the
transaction contemplated by this Agreement is consummated, whichever
shall first occur. If LFC or Local America is requested by any court or
governmental agency or authority to disclose any of the Confidential
Information, then it will provide Shareholders, the Holding Company and
the Bank with prompt notice of such request or requirement. The
Shareholders, the Holding Company or the Bank may then either seek
appropriate protective or other injunctive relief from all or part of
such request or requirement or waive LFC's or Local America's
compliance with the provisions of this 12.1 pertaining to the
Confidential Information so sought with respect to all or any part of
such request or requirement to produce such Confidential Information.
If, after the Shareholders, the Holding Company or the Bank has had a
reasonable opportunity to seek such protective or injunctive relief,
the Shareholders, the Holding Company or the Bank has failed to obtain
such relief, and, in the opinion of LFC's counsel, LFC or Local America
believes it is legally compelled to disclose any of the Confidential
Information to such court, agency, arbitrator or authority, then LFC or
Local America may disclose that portion of the Confidential Information
which its counsel advises it that it is so compelled to disclose. In no
event will LFC or Local America oppose any action by either
Shareholders, the Holding Company or the Bank to obtain injunctive or
other appropriate protective relief and/or other reliable assurance
that confidential treatment will be accorded to the Confidential
Information disclosed to such court, agency, arbitrator or other
authority.
Section 12.2 Entire Agreement. The terms and conditions of
this Agreement (i) constitute the entire agreement and understanding between
LFC, Local America and the Shareholders, the Holding Company and the Bank, (ii)
supersede all prior agreements and understandings, written or oral, between LFC,
Local America, Shareholders, the Holding Company and the Bank, and (iii) may not
be modified or amended except by an instrument mutually executed and delivered
by LFC, Local America, Shareholders, the Holding Company and the Bank.
Section 12.3 Governing Law. The terms and conditions of this
Agreement shall be governed by and construed in accordance with federal law, to
the extent applicable, and otherwise by the laws and decisions of the State of
Oklahoma.
Section 12.4 Notices. Any notice or other communication
required or permitted under this Agreement, or convenient to LFC, Local America
or the Shareholders, the Holding Company or the Bank in the consummation of the
transactions contemplated hereby, shall be deemed delivered (i) three (3) days
after deposited in a receptacle of the United States Postal Service, as
registered or certified mail, return receipt requested, postage prepaid, (ii)
when sent by electronic facsimile transmission (if receipt is verified), (iii)
when personally delivered, or (iv) the following day when received by an
overnight courier service (which obtains a receipt evidencing delivery) and
shall be addressed as follows:
41
(a) If to the Shareholders, the
Holding Company or the Bank: Xxxxxx X. Xxxxxxxx, Chairman of
the Board of Directors
Green Country Banking Corporation and
Green Country Bank, FSB
000 Xxxx Xxxxxxx
Xxxxx, Xxxxxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
with a copy to: Xxxxxxx X. Xxxx, Esq.
Fellers, Snider, Xxxxxxxxxxx,
Xxxxxx & Xxxxxxx
Bank One Tower
000 X. Xxxxxxxx, Xxxxx 0000
Xxxxxxxx Xxxx, Xxxxxxxx 00000-0000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
(b) If to LFC or LOCAL FINANCIAL CORPORATION and
Local America: LOCAL AMERICA BANK OF TULSA, F.S.B.
0000 X. X. 00xx Xxxxxx
Xxxxxxxx Xxxx, Xxxxxxxx 00000
Attention: Xxxxxx X. Vanden, Vice
Chairman of the Board
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
with a copy to: Xxxxxx X. Xxxxx, Esq.
Xxxxxxx X. Xxxx, Esq.
Elias, Matz, Xxxxxxx & Xxxxxxx
000 00xx Xxxxxx, X.X.
Washington, D. C. 20005
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Section 12.5 Successors. The terms and conditions hereof shall
be binding upon and inure to the benefit of the respective successors, assigns,
heirs and personal representatives of the Shareholders, the Holding Company, the
Bank, LFC and Local America.
Section 12.6 Attorney Fees, Costs and Expenses. Except as
otherwise expressly provided herein, each of the Parties hereto shall pay its
own respective legal and accounting fees and all other expenses and fees
incurred by it in connection with the transactions contemplated by this
Agreement. Provided, however, to the extent there are any closing costs
associated with the closing of the transaction contemplated by this Agreement,
those shall be paid solely by LFC. Should either LFC or the Shareholders employ
an attorney or attorneys to enforce any of the
42
terms and conditions hereof, or to protect any right, title or interest created
or evidenced hereby, the non-prevailing party in any action pursued in courts of
competent jurisdiction shall pay to the prevailing party all reasonable costs,
damages, and expenses, including attorneys' fees, expended or incurred by the
prevailing party.
Section 12.7 Press Releases and Public Statements. No party to
this Agreement shall make, issue or release any public announcement, statement
or acknowledgement of the existence of, or publicly reveal the terms, conditions
or the status of, the transactions provided for herein without first obtaining
the consent to such announcement, statement, acknowledgement, or revelation from
the other Parties hereto, provided, however, that any of the Parties herein may
make any such release or announcement which, in the opinion of counsel for LFC,
is necessary or appropriate for such party to make in order to comply with
applicable laws or regulations.
Section 12.8 Survival of Representations and Warranties;
Indemnification. The representations, warranties, covenants, agreements and
indemnities made by Shareholders, the Holding Company and the Bank in this
Agreement shall survive the Closing Date hereunder for a period of three (3)
years, and shall also survive and shall be unaffected by (and shall not be
deemed waived by) any investigation, audit, appraisal, or inspection at any time
made by or on behalf of LFC. The Shareholders each agree to indemnify, defend
and hold harmless LFC and its Board of Directors from and against any and all
demands, claims, complaints, actions or causes of action, suits, proceedings,
investigations, arbitrations, assessments, losses, damages, liabilities, costs
and expenses, including, but not limited to, interest, penalties and reasonable
attorneys' fees and disbursements asserted against, imposed upon or incurred by
LFC, or its Board of Directors, directly or indirectly, by reason of or
resulting from any misrepresentation or breach of Shareholders', the Holding
Company's or Bank's representations and warranties or non-compliance with
covenants, conditions, agreements or undertakings of Shareholders, the Holding
Company or the Bank contained in or made pursuant to the provisions of this
Agreement. LFC shall have the right, but not the obligation, to undertake or
continue the defense of, and to compromise or settle (exercising reasonable
business judgment), the claim or other matter which gives rise to an
indemnification claim by LFC against Shareholders under the provisions of this ,
or other matter covered hereby, all on behalf of Shareholders.
Section 12.9 Assignment and Legal Effect. None of the Parties
to this Agreement may assign any of their respective rights, obligations or
duties under this Agreement to any other person without the prior written
consent of all other Parties hereto. Any assignment in contravention of this
provision shall be void. Anything in this Agreement to the contrary
notwithstanding, the Parties hereto shall not be required to take any action
under this Agreement which is found by the final decision of appropriate federal
or state governmental authorities to be inconsistent or in conflict with
applicable federal or state laws or regulations pertaining to any of the Parties
hereto.
Section 12.10 No Third-Party Beneficiaries. Execution of this
Agreement by the Parties hereto is not intended to and does not confer any
benefits or rights on (contractually or otherwise) any person or entity not a
party to this Agreement.
43
Section 12.11 Time. Time is of the essence to the performance
of the terms and conditions of this Agreement, provided, however, that if the
final date of any period which is set for a time provision under this Agreement
falls on a Saturday, Sunday or legal holiday under the laws of the United States
of America or the State of Oklahoma, in such event the time of such period shall
be extended to the next day which is not a Saturday, Sunday or legal holiday.
Section 12.12 Severability. If any of the terms and conditions
of this Agreement shall for any reason be held to be invalid, illegal or
unenforceable in any respect, such invalidity, illegality or unenforceability
shall not affect any other of the terms and conditions hereof and the terms and
conditions hereof shall be thereafter construed as if such invalid, illegal or
unenforceable term or conditions had never been contained herein.
Section 12.13 Counterparts. This Agreement may be executed in
any number of counterparts, and each counterpart hereof shall be deemed to be an
original instrument, but all counterparts hereof taken together shall constitute
one and the same instrument.
Section 12.14 Additional Acts. In addition to the acts and
deeds recited herein and contemplated hereby to be performed, executed and/or
delivered by LFC, Local America, the Shareholders, the Holding Company or the
Bank, LFC, Local America and Shareholders, the Holding Company and the Bank each
hereby agree to perform, execute and/or deliver or cause to be performed,
executed and/or delivered at the Closing hereunder and thereafter any and all
such further acts, deeds and assurances as LFC or the Shareholders may
reasonably require to (i) invest in LFC or Local America the ownership of and
title to the Holding Company and the Bank, and (ii) to consummate transactions
contemplated by this Agreement.
Section 12.15 Headings. The headings herein are for reference
purposes only and shall not affect the meanings or interpretation of the terms
and conditions of this Agreement.
Section 12.16 Interpretation. Whenever the context hereof
shall so require, the singular shall include the plural, the male gender shall
include the female gender and neuter, and vice-versa.
IN WITNESS WHEREOF, this Agreement has been executed and
delivered one to the other by the Shareholders, the Holding Company and the
Bank, and LFC and Local America on the date first recited, effective as of the
date last executed by any party hereto.
SHAREHOLDERS:
___________________________________
XXXXXX X. XXXXXXXX, an Individual
____________________________________
XXX X. XXXXXX, an Individual
44
___________________________________
XxXXXXX X. XXX XXXXX, an Individual
THE HOLDING COMPANY: GREEN COUNTRY BANKING CORPORATION,
an Oklahoma corporation
By:________________________________
Name: XXXXXX X. XXXXXXXX
Title: President and Chief Executive
Officer
Date:_______________________________
BANK: GREEN COUNTRY BANK, FSB,
a federally chartered stock savings
bank
By:________________________________
Name: XXX X. XXXXXX
Title: President
Date:______________________________
LOCAL AMERICA: LOCAL AMERICA BANK OF TULSA, F.S.B.,
a federally chartered stock savings
bank
By:________________________________
Name: XXXXXXX X. XXXX
Title: Executive Vice President and
Chief Financial Officer
Date:______________________________
LFC: LOCAL FINANCIAL CORPORATION,
a Delaware corporation
By:________________________________
Name: XXXXXXX X. XXXX
Title: Executive Vice President and
Chief Financial Officer
Date:______________________________
45
