EXECUTION COPY
AGREEMENT AND PLAN OF MERGER
BY AND BETWEEN
INDEPENDENCE COMMUNITY BANK CORP.
AND
STATEN ISLAND BANCORP, INC.
DATED AS OF NOVEMBER 24, 2003
TABLE OF CONTENTS
PAGE
ARTICLE I THE MERGER................................................................................ 1
1.1. The Merger........................................................................ 1
1.2. Effective Time.................................................................... 1
1.3. Effects of the Merger............................................................. 1
1.4. Closing of the Merger............................................................. 1
1.5. Certificate of Incorporation...................................................... 2
1.6. Bylaws............................................................................ 2
1.7. Board of Directors................................................................ 2
ARTICLE II CONSIDERATION; EXCHANGE PROCEDURES....................................................... 2
2.1. Conversion of SIB Common Stock.................................................... 2
2.2. Election Procedures............................................................... 3
2.3. Proration......................................................................... 4
2.4. No Fractional Shares.............................................................. 5
2.5. ICBC Common Stock; ICBC Preferred Stock........................................... 6
2.6. Options; Restricted Share Units................................................... 6
2.7. Reservation of Right to Revise Structure.......................................... 6
ARTICLE III EXCHANGE OF CERTIFICATES FOR MERGER CONSIDERATION....................................... 7
3.1. ICBC to Make Merger Consideration Available....................................... 7
3.2. Election Form..................................................................... 7
3.3. Exchange of Shares................................................................ 7
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF SIB.................................................... 9
4.1. Corporate Organization............................................................ 9
4.2. Capitalization.................................................................... 10
4.3. Authority; No Violation........................................................... 12
4.4. Consents and Approvals............................................................ 12
4.5. SEC Documents; Other Reports; Internal Controls................................... 13
4.6. Financial Statements; Undisclosed Liabilities..................................... 14
4.7. Broker's Fees..................................................................... 14
4.8. Absence of Certain Changes or Events.............................................. 14
4.9. Legal Proceedings................................................................. 14
4.10. Taxes ......................................................................... 15
4.11. Employees; Employee Benefit Plans................................................. 16
4.12. Board Approval; Stockholder Vote Required......................................... 18
4.13. Compliance With Applicable Law.................................................... 18
4.14. Certain Contracts................................................................. 19
4.15. Agreements With Regulatory Agencies............................................... 20
4.16. SIB Information................................................................... 20
4.17. Title to Property................................................................. 20
4.18. Insurance......................................................................... 21
4.19. Environmental Liability........................................................... 21
4.20. Opinion Of Financial Advisor...................................................... 22
4.21. Patents, Trademarks, Etc.......................................................... 22
4.22. Loan Matters...................................................................... 22
4.23. Community Reinvestment Act Compliance............................................. 23
4.24. Labor Matters..................................................................... 23
4.25. Interest Rate Risk Management Instruments......................................... 24
ARTICLE V REPRESENTATIONS AND WARRANTIES OF ICBC.................................................... 24
5.1. Corporate Organization............................................................ 24
5.2. Capitalization.................................................................... 25
5.3. Authority; No Violation........................................................... 26
5.4. Consents and Approvals............................................................ 27
5.5. SEC Documents; Other Reports; Internal Controls................................... 27
5.6. Financial Statements; Undisclosed Liabilities..................................... 28
5.7. Broker's Fees..................................................................... 28
5.8. Absence of Certain Changes or Events.............................................. 28
5.9. Legal Proceedings................................................................. 29
5.10. Taxes ......................................................................... 29
5.11. Employees; Employee Benefit Plans................................................. 30
5.12. Board Approval; Stockholder Vote Required......................................... 31
5.13. Compliance With Applicable Law.................................................... 31
5.14. Agreements With Regulatory Agencies............................................... 31
5.15. ICBC Information.................................................................. 32
5.16. Title to Property................................................................. 32
5.17. Environmental Liability........................................................... 32
5.18. Opinion Of Financial Advisor...................................................... 33
5.19. Patents, Trademarks, Etc.......................................................... 33
5.20. Loan Matters...................................................................... 33
5.21. Community Reinvestment Act Compliance............................................. 34
5.22. Interest Rate Risk Management Instruments......................................... 34
ARTICLE VI COVENANTS RELATING TO CONDUCT OF BUSINESS................................................ 35
6.1. Conduct of Business Prior to the Effective Time................................... 35
6.2. SIB Forbearances.................................................................. 35
6.3. ICBC Forbearances................................................................. 38
ARTICLE VII ADDITIONAL AGREEMENTS................................................................... 39
7.1. Regulatory Matters................................................................ 39
7.2. Access to Information............................................................. 40
7.3. Stockholder Approval.............................................................. 40
7.4. Acquisition Proposals............................................................. 41
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7.5. Legal Conditions to Merger........................................................ 43
7.6. Affiliates........................................................................ 43
7.7. Employees; Employee Benefit Plans................................................. 44
7.8. Indemnification; Directors' and Officers' Insurance............................... 47
7.9. Advice of Changes................................................................. 49
7.10. Subsequent Interim and Annual Financial Statements................................ 49
7.11. Reorganization; Certain Modifications............................................. 49
7.12. Exemption From Liability Under Section 16(b)...................................... 50
7.13. Stock Exchange Listing............................................................ 50
7.14. Board of Directors and Officers of Surviving Company.............................. 50
7.15. Advisory Board.................................................................... 51
7.16. Outplacement Services............................................................. 51
7.17. Division.......................................................................... 51
ARTICLE VIII CONDITIONS PRECEDENT................................................................... 51
8.1. Conditions to Each Party's Obligation to Effect the Merger........................ 51
8.2. Conditions to Obligations of ICBC................................................. 52
8.3. Conditions To Obligations Of SIB.................................................. 53
ARTICLE IX TERMINATION AND AMENDMENT................................................................ 53
9.1. Termination....................................................................... 53
9.2. Effect of Termination............................................................. 55
9.3. Amendment......................................................................... 56
9.4. Extension; Waiver................................................................. 56
ARTICLE X GENERAL PROVISIONS........................................................................ 57
10.1. Nonsurvival of Representations, Warranties and Agreements......................... 57
10.2. Expenses.......................................................................... 57
10.3. Notices........................................................................... 57
10.4. Interpretation.................................................................... 58
10.5. Counterparts...................................................................... 58
10.6. Entire Agreement.................................................................. 58
10.7. Governing Law..................................................................... 58
10.8. Severability...................................................................... 58
10.9. Publicity......................................................................... 58
10.10. Assignment; Third Party Beneficiaries............................................. 59
EXHIBITS:
---------
Exhibit A Form of Termination and Release Agreement
Exhibit B Form of Employment Agreement
Exhibit C Form of Noncompetition Agreement
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INDEX OF DEFINED TERMS
Acquisition Proposal ................................ 45
Advisory Board ...................................... 54
Agreement ........................................... 1
Average Market Price ................................ 2
BIF ................................................. 11
Business Day ........................................ 2
Cash Conversion Shares .............................. 4
Cash Election ....................................... 4
Cash Election Price ................................. 3
Cash Proration Factor ............................... 4
Certificate of Merger ............................... 1
Certificates ........................................ 7
Change in ICBC Recommendation ....................... 44
Change in Recommendation ............................ 44
Change in SIB Recommendation ........................ 43
Closing ............................................. 1
Closing Date ........................................ 2
Code ................................................ 1
Confidentiality Agreement ........................... 43
CRA ................................................. 25
DGCL ................................................ 1
Dissenting Shareholder .............................. 3
Dissenting Shares ................................... 3
Effective Time ...................................... 1
Election Deadline ................................... 7
Election Form ....................................... 7
Election Form Record Date ........................... 3
Environmental Laws .................................. 23
ERISA ............................................... 17
ERISA Affiliate ..................................... 18
ESOP ................................................ 48
Exchange Act ........................................ 14
Exchange Agent ...................................... 7
Exchange Fund ....................................... 7
Exchange Ratio ...................................... 2
Executive Agreements ................................ 48
Xxxxxx Xxx .......................................... 24
FDIC ................................................ 11
FHLB ................................................ 11
Xxxxxxx Mac ......................................... 24
GAAP ................................................ 10
Xxxxxx Xxx .......................................... 24
Governmental Entity ................................. 13
HOLA ................................................ 10
HSR Act ............................................. 13
HUD ................................................. 24
ICBC ................................................ 1
ICBC 401(k) Plan .................................... 49
ICBC Board Approval ................................. 00
XXXX Xxxxxx Stock ................................... 2
ICBC Disclosure Schedule ............................ 26
ICBC Plans .......................................... 32
ICBC Preferred Stock ................................ 27
ICBC Recommendation ................................. 44
ICBC Regulatory Agreement ........................... 34
ICBC Reports ........................................ 29
ICBC Share Price .................................... 6
ICBC Stock Option Plans ............................. 27
ICBC Stockholders Meeting ........................... 44
Indemnified Parties ................................. 50
Independence Bank ................................... 1
Injunction .......................................... 55
Insurance Amount .................................... 52
Joint Proxy Statement/Prospectus .................... 13
Liens ............................................... 12
Loans ............................................... 23
Material Adverse Effect ............................. 10
Merger .............................................. 1
Merger Consideration ................................ 4
Mortgage Company .................................... 37
Mortgage Company Flow Agreement ..................... 41
Mortgage Company Operating Plan ..................... 38
OTS ................................................. 13
PBGC ................................................ 18
Plans ............................................... 17
Pool ................................................ 24
Regulation O ........................................ 23
Required ICBC Vote .................................. 33
Required SIB Vote ................................... 19
Requisite Regulatory Approvals ...................... 55
S-4 ................................................. 13
SAIF ................................................ 27
Savings Bank Merger ................................. 1
SEC ................................................. 13
Secondary Election Form Record Date ................. 4
Section 16 Information .............................. 53
Securities Act ...................................... 14
SIB ................................................. 1
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SIB 401(k) Plan ..................................... 49
SIB Board Approval .................................. 19
SIB Cash Election Shares ............................ 4
SIB Common Stock .................................... 2
SIB Contract ........................................ 20
SIB Disclosure Schedule ............................. 9
SIB Employees ....................................... 47
SIB Insiders ........................................ 53
SIB Option .......................................... 6
SIB Preferred Stock ................................. 11
SIB Recognition Plan ................................ 2
SIB Recommendation .................................. 43
SIB Regulatory Agreement ............................ 21
SIB Reports ......................................... 14
SIB Restricted Stock ................................ 6
SIB Stock Election Shares ........................... 5
SIB Stock Option Plan ............................... 11
SIB Stockholders Meeting ............................ 43
SIBT ................................................ 1
Significant Subsidiary .............................. 45
Stock Conversion Shares ............................. 5
Stock Election ...................................... 4
Stock Proration Factor .............................. 5
Stockholders Meetings ............................... 44
Subsidiary .......................................... 11
Superintendent ...................................... 13
Superior Proposal ................................... 45
Surviving Company ................................... 1
Tax Return .......................................... 17
Taxes ............................................... 17
Termination Fee ..................................... 58
VA .................................................. 24
Valuation Period .................................... 2
Voting Debt ......................................... 12
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AGREEMENT AND PLAN OF MERGER
This AGREEMENT AND PLAN OF MERGER, dated as of November 24,
2003 (as amended, supplemented or otherwise modified from time to time, this
"Agreement"), is entered into by and between INDEPENDENCE COMMUNITY BANK CORP.,
a Delaware corporation ("ICBC") and STATEN ISLAND BANCORP, INC., a Delaware
corporation ("SIB").
WHEREAS, the respective Boards of Directors of each of ICBC
and SIB have determined that it is in the best interests of their respective
companies and stockholders to consummate the business combination transaction
provided for herein in which SIB would merge with and into ICBC (the "Merger"),
and immediately thereafter SI Bank & Trust ("SIBT"), a wholly owned subsidiary
of SIB, would be merged with and into Independence Community Bank ("Independence
Bank"), a wholly owned subsidiary of ICBC (the "Savings Bank Merger"); and
WHEREAS, it is the intention of the parties to this Agreement
that the Merger be treated as a "reorganization" within the meaning of Section
368(a) of the Internal Revenue Code of 1986, as amended (the "Code") and this
Agreement shall constitute a plan of reorganization within the meaning of
Treasury Regulation Section 1.368-2(g).
NOW, THEREFORE, in consideration of the mutual covenants,
representations, warranties and agreements contained herein, and intending to be
legally bound hereby, the parties agree as follows:
ARTICLE I
THE MERGER
1.1. The Merger. Subject to the terms and conditions of this Agreement,
in accordance with the Delaware General Corporation Law (the "DGCL"), at the
Effective Time (as hereinafter defined), SIB shall merge with and into ICBC.
ICBC shall be the surviving corporation (hereinafter sometimes referred to as
the "Surviving Company") in the Merger, and shall continue its corporate
existence under the laws of the State of Delaware. The name of the Surviving
Company shall be Independence Community Bank Corp. Upon consummation of the
Merger, the separate corporate existence of SIB shall terminate.
1.2. Effective Time. The Merger shall become effective as set forth in
the certificate of merger (the "Certificate of Merger") which shall be filed
with the Secretary of State of the State of Delaware on the Closing Date (as
hereinafter defined). The term "Effective Time" shall mean the time when the
Merger becomes effective, as set forth in the Certificate of Merger.
1.3. Effects of the Merger. At and after the Effective Time, the Merger
shall have the effects set forth in this Agreement and the DGCL.
1.4. Closing of the Merger. Subject to the terms and conditions of this
Agreement, the closing of the Merger (the "Closing") will take place at 10:00
a.m. Eastern time on the date that is the second Business Day after the
satisfaction or waiver (subject to applicable law) of the
conditions set forth in Article VIII hereof, other than conditions which by
their terms are to be satisfied at Closing, or such other date or time as the
parties may mutually agree (the "Closing Date"). The Closing shall be held at
the offices of Xxxxxxx Xxxxxxx & Xxxxxxxx LLP, 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx,
Xxx Xxxx 00000, unless another place is agreed upon in writing by the parties.
For purposes of this Agreement, a "Business Day" shall mean any day that is not
a Saturday, a Sunday or other day on which banking organizations in the City of
New York are required or authorized by law to be closed.
1.5. Certificate of Incorporation. At the Effective Time, the
certificate of incorporation of ICBC, as in effect immediately prior to the
Effective Time, shall be the certificate of incorporation of the Surviving
Company.
1.6. Bylaws. At the Effective Time, the bylaws of ICBC, as in effect
immediately prior to the Effective Time, shall be the bylaws of the Surviving
Company.
1.7. Board of Directors. Subject to Section 7.14, the directors of ICBC
immediately prior to the Effective Time shall continue to be the directors of
the Surviving Company, each to hold office in accordance with the certificate of
incorporation and bylaws of the Surviving Company, until their respective
successors are duly elected or appointed (as the case may be) and qualified.
ARTICLE II
CONSIDERATION; EXCHANGE PROCEDURES
2.1. Conversion of SIB Common Stock. At the Effective Time, by virtue
of the Merger:
(a) All shares of common stock, par value $0.01 per share, of SIB
(the "SIB Common Stock") that are (i) owned directly by SIB as treasury stock,
(ii) unallocated shares of SIB Common Stock held in its Amended and Restated
1998 Recognition and Retention Plan and Trust Agreement (the "SIB Recognition
Plan") or (iii) owned directly by ICBC (other than shares in trust accounts,
managed accounts and the like for the benefit of customers or shares held in
satisfaction of a debt previously contracted) shall be cancelled and retired and
no shares of common stock, par value $0.01 per share, of ICBC ("ICBC Common
Stock"), or other consideration shall be delivered in exchange therefor.
(b) Each outstanding share of SIB Common Stock that under the terms
of Section 2.3 is to be converted into the right to receive shares of ICBC
Common Stock shall, subject to Section 2.4, be converted into and become the
right to receive a number of shares of ICBC Common Stock equal to the Cash
Election Price (as hereinafter defined) divided by the Average Market Price
(such quotient, the "Exchange Ratio"). For purposes of this Agreement, the
"Average Market Price" shall mean the average of the closing prices of shares of
ICBC Common Stock on the Nasdaq National Market as reported by The Wall Street
Journal for the ten consecutive full trading days (the "Valuation Period")
ending on the tenth Business Day prior to the Closing Date (for the sake of
clarity, such tenth Business Day shall be considered the last full trading day
included within the Valuation Period). The Average Market Price shall be
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calculated to the nearest one-hundredth of one cent and the Exchange Ratio shall
be calculated to the nearest ten thousandth.
(c) Each outstanding share of SIB Common Stock that under the terms
of Section 2.3 is to be converted into the right to receive cash shall be
converted into the right to receive the sum of (x) 0.7500 times 0.6232 times the
Average Market Price and (y) 0.2500 times $23.8810 (such sum, the "Cash Election
Price").
(d) Each outstanding share of SIB Common Stock held by a holder who
has perfected such holder's right to dissent under the DGCL and has not
effectively withdrawn or lost such right as of the Effective Time (the
"Dissenting Shares") shall not be converted into or represent a right to receive
shares of ICBC Common Stock or cash hereunder, and the holder thereof shall be
entitled only to such rights as are granted pursuant to the DGCL. SIB shall give
ICBC prompt notice upon receipt by SIB of any such demands for payment of the
fair value of such shares of SIB Common Stock and of withdrawals of such notice
and any other instruments provided pursuant to applicable law (any shareholder
duly making such demand being hereinafter referred to as a "Dissenting
Shareholder"), and ICBC shall have the right to participate in all negotiations
and proceedings with respect to any such demands. SIB shall not, except with the
prior written consent of ICBC, voluntarily make any payment with respect to, or
settle or offer to settle, any such demand for payment, or waive any failure to
timely deliver a written demand for appraisal or the taking of any other action
by such Dissenting Shareholder as may be necessary to perfect appraisal rights
under the DGCL. Any payments made in respect of Dissenting Shares shall be made
by the Surviving Company.
(e) If any Dissenting Shareholder shall effectively withdraw or lose
(through failure to perfect or otherwise) such holder's right to such payment at
or prior to the Effective Time, such holder's shares of SIB Common Stock shall
be converted into a right to receive cash or ICBC Common Stock in accordance
with the provisions of this Agreement. If such holder shall effectively withdraw
or lose (through failure to perfect or otherwise) such holder's right to such
payment after the Effective Time, each share of SIB Common Stock of such holder
shall be converted on a share-by-share basis into either the right to receive
the Cash Election Price or ICBC Common Stock as ICBC shall determine in its sole
discretion.
(f) The Exchange Ratio set forth above shall be subject to
appropriate adjustments in the event that, subsequent to the date of this
Agreement but prior to the Effective Time, the outstanding ICBC Common Stock
shall have been increased, decreased, changed into or exchanged for a different
number or kind of shares or securities through any reorganization,
recapitalization, reclassification, stock dividend, stock split, reverse stock
split, or other like changes in ICBC's capitalization.
2.2. Election Procedures. (a) Each person who, as of three Business
Days prior to the date on which the Election Form (as hereinafter defined) is
mailed pursuant to Section 3.2 hereof (the "Election Form Record Date"), is a
record holder of shares of SIB Common Stock shall have the right to submit an
Election Form specifying the number of shares of SIB Common Stock that such
person desires to have converted into the right to receive ICBC Common Stock (a
"Stock Election"), and the number of shares of SIB Common Stock that such person
desires to have converted into the right to receive the Cash Election Price (a
"Cash Election"). Any such record holder who fails properly to submit an
Election Form on or before the Election Deadline
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(as hereinafter defined) in accordance with the procedures set forth in Section
3.2 or shall have acquired shares of SIB Common Stock after the Secondary
Election Form Record Date (defined below) shall be deemed to have made a Stock
Election. Any Dissenting Shares shall be deemed SIB Cash Election Shares (as
hereinafter defined), and with respect to such shares the holders thereof shall
in no event receive consideration comprised of ICBC Common Stock. Any election
to receive ICBC Common Stock or cash shall have been properly made only if the
Exchange Agent (as hereinafter defined) shall have actually received a properly
completed Election Form by the Election Deadline, and, in accordance with
Section 3.2, any Election Form may be revoked or changed by the person
submitting such Election Form to the Exchange Agent by written notice to the
Exchange Agent.
(b) The Exchange Agent shall make available an additional Election
Form to all persons who become record holders of SIB Common Stock between the
Election Form Record Date and the close of business on the fifth Business Day
prior to the Election Deadline (the "Secondary Election Form Record Date").
2.3. Proration. Within five Business Days after the Election Deadline,
the Exchange Agent shall calculate the allocation among holders of SIB Common
Stock of rights to receive ICBC Common Stock or cash in the Merger in accordance
with the Election Forms as follows (the consideration provided for in this
Section 2.3, together with the consideration provided for in Section 2.4, is
referred to as the "Merger Consideration"):
(a) In the event the aggregate number of shares of SIB Common Stock
in respect of which Cash Elections shall have been made (the "SIB Cash Election
Shares") is greater than the quotient of (x) $368,500,000 divided by (y) the
Cash Election Price (such quotient, the "Cash Conversion Shares"), then:
(i) all shares of SIB Common Stock in respect of which Stock
Elections have been made will be converted into the right to receive ICBC
Common Stock in accordance with the terms of Section 2.1(b); and
(ii) all shares of SIB Common Stock in respect of which Cash
Elections have been made will be converted into the right to receive ICBC
Common Stock and cash in the following manner:
(A) a proration factor (the "Cash Proration Factor") shall be
determined by dividing (x) $368,500,000 by (y) the product of the
SIB Cash Election Shares and the Cash Election Price;
(B) the number of SIB Cash Election Shares held by each holder
of shares of SIB Common Stock that will be converted into the right
to receive cash pursuant to the terms of Section 2.1(c) shall be
determined by multiplying the Cash Proration Factor by the number of
SIB Cash Election Shares held by such holder; and
(C) all SIB Cash Election Shares other than those shares
converted into the right to receive cash in accordance with the
preceding subparagraph (B) shall be converted into the right to
receive ICBC Common Stock in accordance with the terms of Section
2.1(b); or
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(b) In the event the aggregate number of SIB Cash Election Shares is
less than the Cash Conversion Shares, then:
(i) all SIB Cash Election Shares (subject to the provisions of
Section 2.1(d) with respect to any Dissenting Shares) will be converted
into the right to receive cash in accordance with the terms of Section
2.1(c); and
(ii) all shares of SIB Common Stock in respect of which Stock
Elections shall have been made (the "SIB Stock Election Shares") will be
converted into the right to receive ICBC Common Stock and cash in the
following manner:
(A) a proration factor (the "Stock Proration Factor") shall be
determined by dividing the Stock Conversion Shares (defined below)
by the aggregate number of SIB Stock Election Shares. The "Stock
Conversion Shares" shall mean the difference between (x) the total
number of shares of SIB Common Stock outstanding immediately prior
to the Effective Time and (y) the Cash Conversion Shares;
(B) the number of SIB Stock Election Shares held by each
holder of shares of SIB Common Stock that will be converted into the
right to receive shares of ICBC Common Stock pursuant to the terms
of Section 2.1(b) shall be determined by multiplying the Stock
Proration Factor by the number of SIB Stock Election Shares held by
such holder; and
(C) all SIB Stock Election Shares other than those shares
converted into the right to receive ICBC Common Stock in accordance
with the preceding subparagraph (B) shall be converted into the
right to receive cash in accordance with the terms of Section
2.1(c); or
(c) If the number of SIB Stock Election Shares is equal to the
number of Stock Conversion Shares and the number of SIB Cash Election Shares is
equal to the number of Cash Conversion Shares, then subparagraphs (a) and (b) of
this Section 2.3 shall not apply and all SIB Stock Election Shares will be
converted into the right to receive ICBC Common Stock and all SIB Cash Election
Shares (subject to the provisions of Section 2.1(d)) will be converted into the
right to receive cash.
2.4. No Fractional Shares. Notwithstanding any other provision of this
Agreement, neither certificates nor scrip for fractional shares of ICBC Common
Stock shall be issued in the Merger. Each holder of SIB Common Stock who
otherwise would have been entitled to a fraction of a share of ICBC Common Stock
shall receive in lieu thereof cash (without interest) in an amount determined by
multiplying the fractional share interest to which such holder would otherwise
be entitled (after taking into account all shares of SIB Common Stock owned by
such holder at the Effective Time) by the ICBC Share Price. The "ICBC Share
Price" shall mean the average of the closing sale prices of one share of ICBC
Common Stock for the five trading days immediately preceding the Closing Date on
the Nasdaq National Market as reported by The Wall Street Journal. No such
holder shall be entitled to dividends, voting rights or any other rights in
respect of any fractional share.
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2.5. ICBC Common Stock; ICBC Preferred Stock. At and after the
Effective Time, each share of ICBC Common Stock and each share of any preferred
stock of ICBC issued and outstanding immediately prior to the Effective Time
shall remain an issued and outstanding share of common stock or preferred stock,
as the case may be, of ICBC and shall not be affected by the Merger. Each share
of ICBC Common Stock owned by SIB immediately prior to the Effective Time shall
become treasury stock of ICBC at the Effective Time.
2.6. Options; Restricted Share Units. (a) At the Effective Time, each
option granted by SIB to purchase shares of SIB Common Stock (each, an "SIB
Option") which is outstanding and unexercised immediately prior thereto, whether
vested or unvested, shall cease to represent a right to acquire shares of SIB
Common Stock and shall be converted into an option to acquire, on the same terms
and conditions as were applicable under the SIB Option, that number of shares of
ICBC Common Stock determined by multiplying the number of shares of SIB Common
Stock subject to such SIB Option by the Exchange Ratio, rounded, if necessary,
to the nearest whole share of SIB Common Stock, at a price per share (rounded to
the nearest one-hundredth of a cent) equal to the per share exercise price
specified in such SIB Option divided by the Exchange Ratio; provided, however,
that in the case of any SIB Option to which Section 421 of the Code applies by
reason of its qualification under Section 422 of the Code, the option price, the
number of shares subject to such option and the terms and conditions of exercise
of such option shall be determined in a manner consistent with the requirements
of Section 424(a) of the Code.
(b) Within ten Business Days after the Effective Time, ICBC shall
file a registration statement on Form S-3 or Form S-8, as the case may be (or
any successor or other appropriate forms), with respect to the shares of ICBC
Common Stock subject to the options referred to in paragraph (a) of this Section
2.6 and shall use its reasonable best efforts to maintain the current status of
the prospectus or prospectuses contained therein for so long as such options
remain outstanding in the case of a Form S-8 or, in the case of a Form S-3,
until the shares subject to such options may be sold without a further holding
period under Rule 144 under the Securities Act (as hereinafter defined).
(c) At the Effective Time, each award to receive a distribution of
SIB Common Stock granted by SIB (collectively, the "SIB Restricted Stock") which
is unvested and outstanding immediately prior to date of this Agreement and set
forth in Section 2.6(c) of the SIB Disclosure Schedule (as hereinafter defined)
shall vest and become free of any restrictions to which they are subject under
the SIB Recognition Plan.
2.7. Reservation of Right to Revise Structure. ICBC may at any time
change the method of effecting the business combination contemplated by this
Agreement if and to the extent that it deems such a change to be desirable,
including to provide for a merger of SIB with and into a direct wholly owned
corporate subsidiary of ICBC or a single member limited liability company wholly
owned by ICBC; provided, however, that no such change shall (A) alter or change
the amount or kind of the Merger Consideration, (B) adversely affect the
anticipated tax consequences of the Merger to the holders of SIB Common Stock as
a result of receiving the Merger Consideration, or (C) materially impede or
delay consummation of the Merger. In the event ICBC elects to make such a
change, the parties agree to execute appropriate documents to reflect the
change.
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ARTICLE III
EXCHANGE OF CERTIFICATES FOR MERGER CONSIDERATION
3.1. ICBC to Make Merger Consideration Available. ICBC shall appoint an
agent, who shall be reasonably acceptable to SIB (the "Exchange Agent"), for the
purpose of exchanging certificates that immediately prior to the Effective Time
evidenced shares of SIB Common Stock (the "Certificates") for the Merger
Consideration. At or promptly after the Effective Time, ICBC shall deposit, or
shall cause to be deposited, with the Exchange Agent, for the benefit of the
holders of Certificates, for exchange in accordance with this Article III,
certificates representing the shares of ICBC Common Stock and an estimated
amount of cash sufficient to make all payments pursuant to Sections 2.3 and 2.4
(such cash and certificates for shares of ICBC Common Stock, together with any
dividends or distributions with respect thereto, being hereinafter referred to
as the "Exchange Fund"). The cash deposited with the Exchange Agent pursuant to
this Section 3.1 shall be invested by the Exchange Agent as directed by ICBC.
3.2. Election Form. No later than fifteen Business Days prior to the
expected Effective Time, the Exchange Agent shall mail to each holder of record
of SIB Common Stock on the Election Form Record Date (or, in the case of those
persons specified in Section 2.2(b), no later than the fifth Business Day prior
to the Election Deadline, the Exchange Agent shall mail to each holder of record
of SIB Common Stock on the Secondary Election Form Record Date) an election form
(the "Election Form") providing for such holders to make the Cash Election
and/or the Stock Election; provided, however, that such Election Form need not
be mailed prior to the receipt of the Requisite Regulatory Approvals (as
hereinafter defined). Any election other than a deemed Stock Election shall be
validly made only if the Exchange Agent shall have received by 5:00 p.m., New
York City time, on a date (the "Election Deadline") to be decided by ICBC (which
date shall not be earlier than fifteen Business Days after the initial mailing
of the Election Form and no later than the Effective Time), an Election Form
properly completed and executed (with the signature or signatures thereon
guaranteed to the extent required by the Election Form) by such holder
accompanied by such holder's Certificates, or by an appropriate guarantee of
delivery of such Certificates from a member of any registered national
securities exchange or of the National Association of Securities Dealers, Inc.
or by a commercial bank or trust company in the United States as set forth in
such Election Form. Any holder of SIB Common Stock who has made an election by
submitting an Election Form to the Exchange Agent may at any time prior to the
Election Deadline change such holder's election by submitting a revised
Election Form, properly completed and signed that is received by the Exchange
Agent prior to the Election Deadline. Any holder of SIB Common Stock may at any
time prior the Election Deadline revoke such holder's election and withdraw
such holder's Certificates deposited with the Exchange Agent by written notice
to the Exchange Agent received by the close of business on the day prior to the
Election Deadline.
3.3. Exchange of Shares. (a) As soon as reasonably practicable after
the Effective Time, and in no event more than five Business Days thereafter, the
Exchange Agent shall mail to each holder of record of a Certificate who has not
previously surrendered such Certificate or Certificates with the Election Form a
form of letter of transmittal (which shall specify that delivery shall be
effected, and risk of loss and title to the Certificates shall pass, only upon
delivery of the Certificates to the Exchange Agent) and instructions for use in
effecting the
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surrender of the Certificates in exchange for payment of the Merger
Consideration therefor. Upon proper surrender of a Certificate for exchange and
cancellation to the Exchange Agent, together with a letter of transmittal, duly
completed and validly executed in accordance with the instructions thereto, and
such other documents as may be required pursuant to such instructions, the
holder of such Certificate shall be entitled to receive in exchange therefor the
Merger Consideration for each share formerly represented by such Certificate and
such Certificate so surrendered shall forthwith be cancelled. No interest will
be paid or accrued for the benefit of holders of the Certifications on the
Merger Consideration payable upon the surrender of the Certificates.
(b) No dividends or other distributions with a record date after the
Effective Time with respect to ICBC Common Stock shall be paid to the holder of
any unsurrendered Certificate with respect to shares of ICBC Common Stock that
such holder would be entitled to receive upon surrender of such Certificate and
no cash payment in lieu of fractional shares shall be paid to any such holder
pursuant to Section 2.4 until such holder shall surrender such Certificate in
accordance with this Article III. After the surrender of a Certificate in
accordance with this Article III, such holder thereof entitled to receive ICBC
Common Stock shall be entitled to receive any such dividends or other
distributions, without any interest thereon, with a record date after the
Effective Time and which theretofore had become payable with respect to whole
shares of ICBC Common Stock represented by such Certificate.
(c) If the payment of the Merger Consideration is to be made to a
person other than the registered holder of the Certificate surrendered in
exchange therefor, it shall be a condition of payment that the Certificate so
surrendered shall be properly endorsed (or accompanied by an appropriate
instrument of transfer) and otherwise in proper form for transfer, and that the
person requesting such payment shall pay to the Exchange Agent in advance any
applicable stock transfer or other Taxes or shall establish to the reasonable
satisfaction of the Exchange Agent that such Taxes have been paid or are not
payable.
(d) At and after the Effective Time, there shall be no transfers on
the stock transfer books of SIB of the shares of SIB Common Stock that were
issued and outstanding immediately prior to the Effective Time. If, after the
Effective Time, Certificates representing such shares are presented for transfer
to the Exchange Agent, they shall be cancelled and exchanged for the Merger
Consideration as provided in this Article III.
(e) Any portion of the Exchange Fund that remains unclaimed by the
stockholders of SIB for six months after the Effective Time shall be paid, at
the request of ICBC, to ICBC. Any stockholders of SIB who have not theretofore
complied with this Article III shall thereafter look only to ICBC for payment of
the Merger Consideration and unpaid dividends and distributions on the ICBC
Common Stock deliverable in respect of each share of SIB Common Stock held by
such stockholder at the Effective Time as determined pursuant to this Agreement,
in each case, without any interest thereon. Notwithstanding anything to the
contrary contained herein, none of ICBC, SIB, the Exchange Agent or any other
person shall be liable to any former holder of shares of SIB Common Stock for
any amount properly delivered to a public official pursuant to applicable
abandoned property, escheat or similar laws.
(f) In the event any Certificate shall have been lost, stolen or
destroyed, upon the making of an affidavit of that fact by the person claiming
such Certificate to be lost, stolen or
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destroyed and, if required by ICBC, the posting by such person of a bond in such
amount as ICBC may determine is reasonably necessary as indemnity against any
claim that may be made against it with respect to such Certificate, the Exchange
Agent will issue in exchange for such lost, stolen or destroyed Certificate the
Merger Consideration deliverable in respect thereof pursuant to this Agreement.
(g) ICBC or the Exchange Agent will be entitled to deduct and
withhold from the consideration otherwise payable pursuant to this Agreement to
any holder of SIB Common Stock such amounts as ICBC or the Exchange Agent are
required to deduct and withhold with respect to the making of such payment under
the Code, or any applicable provision of any other U.S. federal, state, local or
non-U.S. tax law. To the extent that such amounts are properly withheld by ICBC
or the Exchange Agent, such withheld amounts will be treated for all purposes of
this Agreement as having been paid to the holder of the SIB Common Stock in
respect of whom such deduction and withholding were made by ICBC or the Exchange
Agent.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF SIB
As of the date hereof, SIB has delivered to ICBC a schedule (the
"SIB Disclosure Schedule") setting forth, among other things, certain items, the
disclosure of which is necessary or appropriate either in response to an express
disclosure requirement contained in a provision hereof or as an exception to one
or more representations or warranties contained in Article IV or to one or more
covenants contained in Article VI; provided, however, that (i) no such item is
required to be set forth in the SIB Disclosure Schedule as an exception to a
representation or warranty if its absence would not result in the related
representation or warranty being deemed untrue or incorrect under the standard
established by Section 8.2(a), and (ii) the mere inclusion of an item in the SIB
Disclosure Schedule as an exception to a representation or warranty shall not be
deemed an admission by SIB that such item represents a material exception or
fact, event or circumstance or that such item is or would be reasonably likely
to result in a Material Adverse Effect (as hereinafter defined) on SIB.
SIB hereby represents and warrants to ICBC as follows:
4.1. Corporate Organization.
(a) SIB is a corporation duly organized, validly existing and in
good standing under the laws of the State of Delaware. SIB has the corporate
power and authority to own or lease all of its properties and assets and to
carry on its business as it is now being conducted, and is duly licensed or
qualified to do business in each jurisdiction in which the nature of the
business conducted by it or the character or location of the properties and
assets owned or leased by it makes such licensing or qualification necessary,
except where the failure to be so licensed or qualified would not have nor
reasonably be expected to have a Material Adverse Effect (as defined below) on
SIB. As used in this Agreement, the term "Material Adverse Effect" means, with
respect to SIB, ICBC or the Surviving Company, as the case may be, a material
adverse effect on the business, results of operations or financial condition of
such party and its Subsidiaries taken as a whole or a material adverse effect on
such party's ability to consummate the transactions contemplated hereby on a
timely basis; provided, however, that in determining
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whether a Material Adverse Effect has occurred, there shall be excluded any
effect on the referenced party the cause of which is (i) any change after the
date of this Agreement in laws, rules or regulations of general applicability or
published interpretations thereof by courts or governmental authorities or in
generally accepted accounting principles ("GAAP") or regulatory accounting
requirements, in any such case applicable to banks, savings banks, mortgage
banks, mortgage brokers, savings associations or their holding companies
generally, (ii) the announcement of this Agreement or any action of either party
or any Subsidiary (defined in Section 4.1(b)) thereof required to be taken by it
under this Agreement or with the prior written consent of the other party, (iii)
any changes after the date of this Agreement in general economic conditions or
interest rates affecting banks, savings banks, mortgage banks, mortgage brokers,
savings associations or their holding companies generally, (iv) the result of
activities (including mortgage loan originations) at the Mortgage Company (as
hereinafter defined) to the extent such activities are conducted in accordance
with the Mortgage Company Operating Plan (as hereinafter defined) or the
Mortgage Company Flow Agreement (as hereinafter defined) or (v) expenses and
costs incurred in connection with the transactions contemplated hereby (to the
extent not materially in excess of the good faith estimate thereof provided by
SIB to ICBC prior to the date of this Agreement); provided, however, that a
decrease in the trading or market prices of a party's capital stock shall not be
considered, by itself, to constitute a Material Adverse Effect. SIB is duly
registered as a savings and loan holding company under the Home Owners' Loan
Act, as amended ("HOLA"), and qualifies as a savings and loan holding company of
the type described in Section 10(c)(3)(A) of HOLA. The copies of the certificate
of incorporation and bylaws of SIB which have previously been made available to
ICBC are true, complete and correct copies of such documents as in effect as of
the date of this Agreement.
(b) Each Subsidiary of SIB (i) is duly organized and validly
existing as a savings bank, corporation or partnership under the laws of its
jurisdiction of organization, (ii) is duly licensed or qualified to do business
and is in good standing in all jurisdictions (whether federal, state, local or
foreign) where its ownership or leasing of property or the conduct of its
business requires it to be so licensed or qualified and in which the failure to
be so qualified would have or would reasonably be expected to have, either
individually or in the aggregate, a Material Adverse Effect on SIB and (iii) has
all requisite corporate power and authority to own or lease its properties and
assets and to carry on its business as now conducted. "Subsidiary" means, with
respect to any person, any corporation, partnership, joint venture, limited
liability company or any other entity (i) of which such person or a subsidiary
of such person is a general partner or (ii) at least a majority of the
securities or other interests of which having by their terms ordinary voting
power to elect a majority of the Board of Directors or persons performing
similar functions with respect to such entity is directly or indirectly owned by
such person and/or one or more subsidiaries thereof.
(c) Except for its ownership of SIBT, SIB does not own, either
directly or through its Subsidiaries, any stock or equity interest in any
depository institution (as defined in 12 U.S.C. Section 1813(c)(1)). SIBT is a
qualified thrift lender pursuant to Section 10(m) of HOLA and its deposits are
insured by the Federal Deposit Insurance Corporation (the "FDIC") through the
Bank Insurance Fund (the "BIF") to the fullest extent permitted by law. SIBT is
a member in good standing of the Federal Home Loan Bank ("FHLB") of New York.
4.2. Capitalization.
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(a) The authorized capital stock of SIB consists of 100,000,000
shares of SIB Common Stock and 25,000,000 shares of preferred stock, par value
$0.01 per share, of SIB (the "SIB Preferred Stock"). As of the date of this
Agreement, there were 58,776,874 shares of SIB Common Stock outstanding
(including 4,578,082 unallocated shares of SIB Common Stock held in the ESOP
(defined in Section 7.7(e)) and 391,890 unallocated shares of SIB Common Stock
held in the SIB Recognition Plan), no shares of SIB Preferred Stock outstanding
and 31,483,750 shares of SIB Common Stock held in SIB's treasury. No other
shares of SIB Common Stock or SIB Preferred Stock were issued or outstanding. As
of the date of this Agreement, no shares of SIB Common Stock or SIB Preferred
Stock were reserved for issuance, except for an aggregate of 6,670,278 shares of
SIB Common Stock reserved for issuance upon the exercise of stock options
pursuant to the Amended and Restated 1998 Stock Option Plan (the "SIB Stock
Option Plan"). All of the issued and outstanding shares of SIB Common Stock have
been duly authorized and validly issued and are fully paid, nonassessable and
free of preemptive rights, with no personal liability attaching to the ownership
thereof. As of the date of this Agreement, except as set forth above or in
Section 4.2(a) of the SIB Disclosure Schedule, SIB does not have and is not
bound by any outstanding subscriptions, options, warrants, calls, commitments or
agreements of any character calling for the purchase or issuance of any shares
of SIB Common Stock or SIB Preferred Stock or any other equity securities of SIB
or any securities representing the right to purchase or otherwise receive any
shares of SIB capital stock (including any rights plan or agreement). Section
4.2(a) of the SIB Disclosure Schedule contains a list setting forth as of the
date of this Agreement all outstanding stock options pursuant to the SIB Stock
Option Plan, the names of the optionees, the date each such option was granted,
the number of shares subject to each such option, the expiration date of each
such option, any vesting schedule with respect to an option which is not yet
fully vested, and the price at which each such option may be exercised.
(b) Section 4.2(b) of the SIB Disclosure Schedule lists the name,
jurisdiction of incorporation, authorized and outstanding shares of capital
stock and record and beneficial owners of such capital stock for each Subsidiary
of SIB. Except as set forth in Section 4.2(b) of the SIB Disclosure Schedule,
SIB owns, directly or indirectly, all of the issued and outstanding shares of
capital stock of or all other equity interests in each of SIB's Subsidiaries,
free and clear of any liens, charges, encumbrances, adverse rights or claims and
security interests whatsoever ("Liens"), and all of such shares are duly
authorized and validly issued and are fully paid, nonassessable and free of
preemptive rights, with no personal liability attaching to the ownership
thereof. Neither SIB nor any Subsidiary thereof has or is bound by any
outstanding subscriptions, options, warrants, calls, commitments or agreements
of any character calling for the purchase, sale or issuance of any shares of
capital stock or any other equity security of any Subsidiary of SIB or any
securities representing the right to purchase or otherwise receive any shares of
capital stock or any other equity security of any such Subsidiary.
(c) Except as disclosed in Section 4.2(c) of the SIB Disclosure
Schedule and for the ownership of SIB's Subsidiaries, neither SIB nor any of its
Subsidiaries beneficially owns or controls, directly or indirectly, any shares
of stock or other equity interest in any corporation, firm, partnership, joint
venture or other entity, excluding any investments held in a fiduciary capacity
for the benefit of customers or acquired after the date of this Agreement in
respect of debts previously contracted.
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(d) No bonds, debentures, notes or other indebtedness having the
right to vote on any matters on which SIB's stockholders may vote ("Voting
Debt") have been issued by SIB and are outstanding.
4.3. Authority; No Violation.
(a) SIB has full corporate power and authority to execute and
deliver this Agreement and, subject to the adoption of this Agreement by the
Required SIB Vote (as hereinafter defined), to consummate the transactions
contemplated hereby. The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby have been duly and validly
approved by all necessary corporate and stockholder action of SIB, subject in
the case of the consummation of the Merger to the adoption of this Agreement by
the Required SIB Vote, and no other corporate or stockholder proceedings on the
part of SIB are necessary to approve this Agreement or to consummate the
transactions contemplated hereby. This Agreement has been duly and validly
executed and delivered by SIB and (assuming due authorization, execution and
delivery by ICBC) constitutes a valid and binding obligation of SIB, enforceable
against SIB in accordance with its terms, except as enforcement may be limited
by general principles of equity whether applied in a court of law or a court of
equity and by bankruptcy, insolvency and similar laws affecting creditors'
rights and remedies generally.
(b) Except as set forth in Section 4.3(b) of the SIB Disclosure
Schedule, Neither the execution and delivery of this Agreement by SIB nor the
consummation by SIB of the transactions contemplated hereby, nor compliance by
SIB with any of the terms or provisions hereof, will (i) violate any provision
of the certificate of incorporation or bylaws of SIB or any of the similar
governing documents of any of its Subsidiaries or (ii) assuming that the
consents and approvals referred to in Section 4.4 are duly obtained, (x) violate
any statute, code, ordinance, rule, regulation, judgment, order, writ, decree or
injunction applicable to SIB or any of its Subsidiaries or any of their
respective properties or assets, or (y) violate, conflict with, result in a
breach of any provision of or the loss of any benefit under, constitute a
default (or an event which, with notice or lapse of time, or both, would
constitute a default) under, result in the termination of or a right of
termination or cancellation under, accelerate the performance required by, or
result in the creation of any Lien upon any of the respective properties or
assets of SIB or any of its Subsidiaries under, any of the terms, conditions or
provisions of any note, bond, mortgage, indenture, deed of trust, license,
lease, agreement or other instrument or obligation to which SIB or any of its
Subsidiaries is a party, or by which they or any of their respective properties
or assets may be bound or affected, except (in the case of clause (y) above) for
such violations, conflicts, breaches, defaults or other events which, either
individually or in the aggregate, will not have and would not reasonably be
expected to have a Material Adverse Effect on SIB.
4.4. Consents and Approvals. Except for (i) the approval of the Merger
by the Office of Thrift Supervision ("OTS") and the approval of the Savings Bank
Merger by the FDIC and by the Superintendent of Banks of the New York State
Banking Department (the "Superintendent") under the New York banking law, (ii)
approval of the quotation of the ICBC Common Stock to be issued in the Merger on
the Nasdaq National Market System, (iii) the filing with the Securities and
Exchange Commission (the "SEC") of a proxy statement in definitive form relating
to the respective meetings of the stockholders of SIB and of ICBC to be held to
vote on the adoption of this Agreement (the "Joint Proxy Statement/Prospectus")
and the filing and declaration of
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effectiveness of the registration statement on Form S-4 (the "S-4") in which the
Joint Proxy Statement/Prospectus will be included as a prospectus and any
filings or approvals under applicable state securities laws, (iv) the filing of
the Certificate of Merger with the Secretary of State of the State of Delaware
pursuant to the DGCL, (v) the adoption of this Agreement by the Required SIB
Vote and by the Required ICBC Vote (as hereinafter defined), (vi) the consents
and approvals set forth in Section 4.4 of the SIB Disclosure Schedule, (vii) any
notices or filings under the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of
1976, as amended (the "HSR Act") and (viii) the consents and approvals of third
parties which are not Governmental Entities (as hereinafter defined), the
failure of which to be obtained will not have and would not be reasonably
expected to have, individually or in the aggregate, a Material Adverse Effect on
SIB or ICBC, no consents or approvals of, or filings or registrations with, any
court, administrative agency or commission or other governmental authority or
instrumentality or self-regulatory organization (each, a "Governmental Entity")
or with any other third party are necessary in connection with (A) the execution
and delivery by SIB of this Agreement and (B) the consummation by SIB of the
Merger and the other transactions contemplated hereby.
4.5. SEC Documents; Other Reports; Internal Controls. (a) SIB has filed
all required reports, schedules, registration statements and other documents
with the SEC since December 31, 2000 (the "SIB Reports"). Except as set forth in
Section 4.5 of the SIB Disclosure Schedule, as of their respective dates of
filing with the SEC (or, if amended or superseded by a subsequent filing prior
to the date hereof, as of the date of such subsequent filing), the SIB Reports
complied in all material respects with the requirements of the Securities Act of
1933, as amended (the "Securities Act"), or the Securities Exchange Act of 1934,
as amended (the "Exchange Act"), as the case may be, and the rules and
regulations of the SEC thereunder applicable to such SIB Reports, and none of
the SIB Reports when filed contained any untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they were
made, not misleading, and there are no outstanding comments from or unresolved
issues raised by the SEC with respect to any of the SIB Reports. None of SIB's
Subsidiaries is required to file periodic reports with the SEC pursuant to
Section 13 or 15(d) of the Exchange Act.
(b) SIB and each of its Subsidiaries have timely filed all reports,
registrations and statements, together with any amendments required to be made
with respect thereto, that they were required to file since December 31, 2000
with any Governmental Entity (other than the SEC) and have paid all fees and
assessments due and payable in connection therewith. Except for normal
examinations conducted by a Governmental Entity in the regular course of the
business of SIB and its Subsidiaries or as set forth in Section 4.5(b) of the
SIB Disclosure Schedule, no Governmental Entity has initiated any proceeding or,
to the knowledge of SIB, threatened an investigation into the business or
operations of SIB or any of its Subsidiaries since December 31, 2000. Except as
set forth in Section 4.5(b) of the SIB Disclosure Schedule, there is no material
unresolved violation, criticism or exception by any Governmental Entity with
respect to any report, registration or statement filed by, or relating to any
examinations by any such Governmental Entity of, SIB or any of its Subsidiaries.
(c) The records, systems, controls, data and information of SIB and
its Subsidiaries are recorded, stored, maintained and operated under means
(including any electronic, mechanical or photographic process, whether
computerized or not) that are under the exclusive ownership and direct control
of SIB or its Subsidiaries or accountants (including all
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means of access thereto and therefrom), except for any non-exclusive ownership
and non-direct control that would not reasonably be expected to have a
materially adverse effect on the system of internal accounting controls
described in the following sentence. As and to the extent described in the SIB
Reports filed with the SEC prior to the date hereof, SIB and its Subsidiaries
have devised and maintain a system of internal accounting controls sufficient to
provide reasonable assurances regarding the reliability of financial reporting
and the preparation of financial statements in accordance with GAAP.
4.6. Financial Statements; Undisclosed Liabilities. (a) Except as set
forth in Section 4.6 of the SIB Disclosure Schedule, the financial statements of
SIB (including any related notes thereto) included in the SIB Reports complied
as to form, as of their respective dates of filing with the SEC (or, if amended
or superseded by a subsequent filing prior to the date hereof, as of the date of
such subsequent filing), in all material respects, with all applicable
accounting requirements and with the published rules and regulations of the SEC
with respect thereto (except, in the case of unaudited statements, as permitted
by Form 10-Q of the SEC), have been prepared in accordance with GAAP applied on
a consistent basis during the periods involved (except as may be disclosed
therein), and fairly present, in all material respects, the consolidated
financial position of SIB and its consolidated Subsidiaries and the consolidated
results of operations, changes in stockholders' equity and cash flows of such
companies as of the dates and for the periods shown. The books and records of
SIB and its Subsidiaries have been, and are being, maintained in all material
respects in accordance with GAAP and any other applicable legal and accounting
requirements and reflect only actual transactions.
(b) Except for (i) those liabilities that are fully reflected or
reserved for in the consolidated financial statements of SIB included in its
Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 2003,
as filed with the SEC or (ii) liabilities incurred since September 30, 2003 in
the ordinary course of business consistent with past practice, neither SIB nor
any of its Subsidiaries has incurred any material liability of any nature
whatsoever (whether absolute, accrued or contingent or otherwise and whether due
or to become due), other than pursuant to or as contemplated by this Agreement.
4.7. Broker's Fees. Except as set forth in Section 4.7 of the SIB
Disclosure Schedule, neither SIB nor any Subsidiary thereof nor any of their
respective officers or directors has employed any broker or finder or incurred
any liability for any broker's fees, commissions or finder's fees in connection
with any of the transactions contemplated by this Agreement. Copies of all
agreements with each broker or finder listed in Section 4.7 of the SIB
Disclosure Schedule have previously been furnished to ICBC.
4.8. Absence of Certain Changes or Events. Except as publicly disclosed
in the SIB Reports filed with the SEC prior to the date hereof, or as set forth
in Section 4.8 of the SIB Disclosure Schedule, since September 30, 2003, (i) no
event has occurred which has had or would reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect on SIB and (ii) SIB
and its Subsidiaries have not taken any action that would have been prohibited
by Section 6.2 if taken after the date of this Agreement.
4.9. Legal Proceedings. (a) Except as publicly disclosed in the SIB
Reports filed with the SEC prior to the date hereof, neither SIB nor any of its
Subsidiaries is a party to any, and there are no pending or, to the best of
SIB's knowledge, threatened legal, administrative, arbitral
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or other proceedings, claims, actions or governmental or regulatory
investigations of any nature against SIB or any of its Subsidiaries (including
under the Equal Credit Opportunity Act, the Fair Housing Act, the Home Mortgage
Disclosure Act or any other fair lending law or other law relating to
discriminatory banking practices or the Bank Secrecy Act) or challenging the
validity or propriety of the transactions contemplated by this Agreement as to
which there is a reasonable likelihood of an adverse determination and which, if
adversely determined, would, individually or in the aggregate, have or
reasonably be expected to have a Material Adverse Effect on SIB.
(b) There is no injunction, order, judgment, decree or regulatory
restriction specifically imposed upon SIB, any of its Subsidiaries or the assets
of SIB or any of its Subsidiaries which has had, or would reasonably be expected
to have, a Material Adverse Effect on SIB or the Surviving Company.
4.10. Taxes.
(a) Except as set forth in Section 4.10(a) of the SIB Disclosure
Schedule: (x) each of SIB and its Subsidiaries has (i) duly and timely filed
(including pursuant to applicable extensions granted without penalty) all
material Tax Returns (as hereinafter defined) required to be filed by it, and
such Tax Returns are true, correct and complete in all material respects, and
(ii) paid in full or made adequate provision in the financial statements of SIB
(in accordance with GAAP) for all Taxes (as hereinafter defined), whether or not
shown as due on such Tax Returns; (y) no material deficiencies for any Taxes
have been proposed or assessed in writing against or with respect to any Taxes
due by or Tax Returns of SIB or any of its Subsidiaries; and (z) there are no
material Liens for Taxes upon the assets of either SIB or its Subsidiaries
except for statutory liens for current Taxes not yet due or Liens for Taxes that
are being contested in good faith by appropriate proceedings and for which
reserves adequate in accordance with GAAP have been provided.
(b) Neither SIB nor any of its Subsidiaries (A) is or has ever been
a member of an affiliated group (other than a group the common parent of which
is SIB) filing a consolidated tax return or (B) has any liability for Taxes of
any person arising from the application of Treasury Regulation section 1.1502-6
or any analogous provision of state, local or foreign law, or as a transferee or
successor, by contract, or otherwise.
(c) Except as set forth in Section 4.10(c) of the SIB Disclosure
Schedule, none of SIB or any of its Subsidiaries is a party to, is bound by or
has any obligation under any Tax sharing or Tax indemnity agreement or similar
contract or arrangement.
(d) No closing agreement pursuant to section 7121 of the Code (or
any similar provision of state, local or foreign law) has been entered into by
or with respect to SIB or any of its Subsidiaries.
(e) None of SIB or any of its Subsidiaries has been either a
"distributing corporation" or a "controlled corporation" in a distribution
occurring during the last five years in which the parties to such distribution
treated the distribution as one to which Section 355 of the Code is applicable.
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(f) Except as set forth in Section 4.10(f) of the SIB Disclosure
Schedule, all Taxes required to be withheld, collected or deposited by or with
respect to SIB and each of its Subsidiaries have been timely withheld, collected
or deposited as the case may be, and to the extent required, have been paid to
the relevant taxing authority.
(g) Except as set forth in Section 4.10(g) of the SIB Disclosure
Schedule, neither SIB nor any of its Subsidiaries has granted any waiver of any
federal, state, local or foreign statute of limitations with respect to, or any
extension of a period for the assessment of, any Tax.
(h) Except as set forth in Section 4.10(h) of the SIB Disclosure
Schedule, neither SIB nor any of its Subsidiaries is a party to any agreement,
contract, arrangement or plan that has resulted or would result, individually or
in the aggregate, in connection with this Agreement in the payment of any
"excess parachute payments" within the meaning of Section 280G of the Code.
(i) Neither SIB nor any of its Subsidiaries filed a consent prior to
January 1, 2003 to the application of Section 341(f) of the Code.
(j) SIB is not aware of any fact or circumstance that could
reasonably be expected to prevent the Merger from qualifying as a reorganization
within the meaning of Section 368(a) of the Code.
(k) For purposes of this Agreement, "Taxes" shall mean all taxes,
charges, levies, penalties or other assessments imposed by any United States
federal, state, local or foreign taxing authority, including, but not limited to
income, excise, property, sales, transfer, franchise, payroll, withholding,
social security or other similar taxes, including any interest or penalties
attributable thereto.
(l) For purposes of this Agreement, "Tax Return" shall mean any
return, report, information return or other document (including any related or
supporting information) required to be filed with any taxing authority with
respect to Taxes, including all information returns relating to Taxes of third
parties, any claims for refunds of Taxes and any amendments or supplements to
any of the foregoing.
4.11. Employees; Employee Benefit Plans.
(a) Section 4.11 of the SIB Disclosure Schedule contains a true and
complete list of each "employee benefit plan" (within the meaning of section
3(3) of the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), including multiemployer plans within the meaning of ERISA section
3(37)), stock purchase, stock option, restricted stock, severance, employment,
loan, change-in-control, fringe benefit, collective bargaining, bonus,
incentive, deferred compensation and all other employee benefit plans,
agreements, programs, policies or other arrangements, whether or not subject to
ERISA (including any funding mechanism therefor now in effect or required in the
future as a result of the transaction contemplated by this Agreement or
otherwise) under which any current or former employee, director or independent
contractor of SIB or any of its Subsidiaries has any present or future right to
benefits and under which SIB or any of its Subsidiaries has any present or
future liability. All
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such plans, agreements, programs, policies and arrangements shall be
collectively referred to as the "Plans".
(b) With respect to each Plan, SIB has delivered to ICBC a current,
accurate and complete copy (or, to the extent no such copy exists, an accurate
description) thereof and, to the extent applicable: (i) any related trust
agreement or other funding instrument; (ii) the most recent determination
letter, if applicable; (iii) any summary plan description and other written
communications by SIB or any of its Subsidiaries to their employees concerning
the extent of the benefits provided under a Plan; and (iv) for the most recent
year (A) the Form 5500 and attached schedules, (B) audited financial statements
and (C) actuarial valuation reports.
(c) (i) Each Plan has been established and administered in all
material respects in accordance with its terms, and in all material respects in
compliance with the applicable provisions of ERISA, the Code and other
applicable laws, rules and regulations; (ii) each Plan which is intended to be
qualified within the meaning of Code section 401(a) is so qualified and has
received a favorable determination letter as to its qualification, and nothing
has occurred, whether by action or failure to act, that could reasonably be
expected to cause the loss of such qualification; (iii) no event has occurred
and no condition exists that would subject SIB or any of its Subsidiaries,
either directly or by reason of their affiliation with any "ERISA Affiliate"
(defined as any organization which is a member of a controlled group of
organizations within the meaning of Code sections 414(b), (c), (m) or (o)), to
any tax, fine, lien, penalty or other liability imposed by ERISA, the Code or
other applicable laws, rules and regulations; (iv) no "reportable event" (as
such term is defined in ERISA section 4043), "prohibited transaction" (as such
term is defined in ERISA section 406 and Code section 4975) or "accumulated
funding deficiency" (as such term is defined in ERISA section 302 and Code
section 412 (whether or not waived)) has occurred with respect to any Plan; (v)
except as set forth in Section 4.11 of the SIB Disclosure Schedule, no Plan
provides retiree welfare benefits and neither SIB nor any of its Subsidiaries
have any obligation to provide any retiree welfare benefits other than as
required by Section 4980B of the Code; and (vi) neither SIB nor any ERISA
Affiliate has engaged in, or is a successor or parent corporation to an entity
that has engaged in, a transaction described in Sections 4069 or 4212(c) of
ERISA.
(d) None of the Plans is a multiemployer plan (within the meaning of
ERISA section 3(37)) and none of SIB, its Subsidiaries or any ERISA Affiliate
has any liability with respect to a multiemployer plan that remains unsatisfied.
(e) With respect to any Plan, (i) no actions, suits or claims (other
than routine claims for benefits in the ordinary course) are pending or, to the
knowledge of SIB or any of its Subsidiaries, threatened, (ii) no facts or
circumstances exist to the knowledge of SIB or any of its Subsidiaries that
could reasonably be expected to give rise to any such actions, suits or claims,
(iii) no written or oral communication has been received from the Pension
Benefit Guaranty Corporation (the "PBGC") in respect of any Plan subject to
Title IV of ERISA concerning the funded status of any such plan or any transfer
of assets and liabilities from any such plan in connection with the transactions
contemplated herein and (iv) no administrative investigation, audit or other
administrative proceeding by the Department of Labor, the PBGC, the Internal
Revenue Service or other governmental agencies are pending, threatened or in
progress (including any routine requests for information from the PBGC).
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(f) Except as set forth in Section 4.11(f) of the SIB Disclosure
Schedule, no Plan exists that could result in the payment to any present or
former employee, director or independent consultant of SIB or any of its
Subsidiaries of any money or other property or accelerate or provide any other
rights or benefits to any present or former employee of SIB or any of its
Subsidiaries as a result of the transaction contemplated by this Agreement.
Except as set forth in Section 4.11(f) of the SIB Disclosure Schedule, there is
no contract, plan or arrangement (written or otherwise) covering any current or
former employee or director of SIB or any of its Subsidiaries that, individually
or collectively, could give rise to the payment of any amount that would not be
deductible pursuant to the terms of Section 280G of the Code.
(g) Section 4.11(g) of the SIB Disclosure Schedule sets forth the
liability of each participant under each of the deferred compensation plans
sponsored or maintained by SIB or its Subsidiaries.
4.12. Board Approval; Stockholder Vote Required. (a) On or prior to the
date hereof, the Board of Directors of SIB, by resolutions duly adopted by
unanimous vote of those voting at a meeting duly called and held (the "SIB Board
Approval"), has (i) determined that this Agreement and the Merger are fair to
and in the best interests of SIB and its stockholders and declared the Merger to
be advisable, (ii) approved this Agreement and the Merger, and (iii) recommended
that the stockholders of SIB adopt this Agreement and directed that such matter
be submitted for consideration by SIB stockholders at the SIB Stockholders
Meeting. The SIB Board Approval constitutes approval of this Agreement and the
Merger (x) for purposes of Section 203 of the DGCL and (y) by at least
two-thirds of the entire Board of Directors pursuant to Articles 11 and 12 of
the certificate of incorporation of SIB. To the knowledge of SIB, except for
Section 203 of the DGCL (which has been rendered inapplicable), no state
takeover statute is applicable to this Agreement, the Merger or the other
transactions contemplated hereby. SIB does not have any shareholder rights plan
in effect. SIB has taken any action required to be taken by it in order to
exempt this Agreement and the Merger from the requirements of SIB's certificate
of incorporation or bylaws, including Articles 11 and 12 of SIB's certificate of
incorporation.
(b) The affirmative vote of the holders of a majority of the
outstanding shares of SIB Common Stock to adopt this Agreement (the "Required
SIB Vote") is the only vote of the holders of any class or series of SIB capital
stock necessary to approve and adopt this Agreement and the transactions
contemplated hereby (including the Merger).
4.13. Compliance With Applicable Law. (a) Except as disclosed in
Section 4.13 of the SIB Disclosure Schedule, SIB and each of its Subsidiaries
hold, and have at all times held, all licenses, franchises, permits and
authorizations necessary for the lawful conduct of their respective businesses
under and pursuant to all, and have complied with and are not in violation in
any material respect under any, applicable law, statute, order, rule,
regulation, policy and/or guideline of any Governmental Entity relating to SIB
or any of its Subsidiaries (including the Xxxxxxxx-Xxxxx Act of 2002 and the USA
PATRIOT Act of 2001), except where the failure to hold such license, franchise,
permit or authorization or such noncompliance or violation would not,
individually or in the aggregate, have or reasonably be expected to have a
Material Adverse Effect on SIB, and neither SIB nor any of its Subsidiaries
knows of, or has received notice of, any violations of any of the above which,
individually or in the aggregate, would have or would reasonably be expected to
have a Material Adverse Effect on SIB.
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(b) SIB and each of its Subsidiaries has administered all accounts
for which it acts as a fiduciary, including accounts for which it serves as a
trustee, agent, custodian, personal representative, guardian, conservator or
investment advisor, in accordance with the terms of the governing documents,
applicable state and federal law and regulation and common law, except where the
failure to so administer such accounts would not reasonably be expected to have,
either individually or in the aggregate, a Material Adverse Effect on SIB. None
of SIB, any of its Subsidiaries, or, to the knowledge of SIB, any director,
officer or employee of SIB or of any of its Subsidiaries, has committed any
breach of trust or fiduciary duty with respect to any such fiduciary account
that would reasonably be expected to have, either individually or in the
aggregate, a Material Adverse Effect on SIB, and, except as would not reasonably
be expected to have, either individually or in the aggregate, a Material Adverse
Effect on SIB, the accountings for each such fiduciary account are true and
correct and accurately reflect the assets of such fiduciary account.
4.14. Certain Contracts. (a) Except as publicly disclosed in the SIB
Reports filed prior to the date hereof or as set forth in Section 4.14(a) of the
SIB Disclosure Schedule, neither SIB nor any of its Subsidiaries is a party to
or is bound by any contract, arrangement, commitment or understanding (whether
written or oral) (i) which is a material contract (as defined in Item 601(b)(10)
of Regulation S-K of the SEC) to be performed in whole or in part after the date
of this Agreement or (ii) which limits the freedom of SIB or any of its
Subsidiaries to compete in any line of business, in any geographic area or with
any person, or which requires referrals of business or requires SIB or any of
its Subsidiaries to make available investment opportunities to any person on a
priority or exclusive basis. Each contract, arrangement, commitment or
understanding of the type described in this Section 4.14(a), whether or not
publicly disclosed in the SIB Reports filed prior to the date hereof or set
forth in Section 4.14(a) of the SIB Disclosure Schedule, is referred to herein
as a "SIB Contract". SIB has made available all contracts (including all lease,
rental or occupancy agreements or other contracts affecting or relating to the
ownership or use of any real or personal property; all agreements for the
purchase or sale of mortgage servicing rights; all agreements for the purchase
or sale of mortgage Loans (as hereinafter defined) on a wholesale or bulk basis;
and all consulting agreements with outside consultants) which involved payments
by SIB or any of its Subsidiaries in fiscal year 2002 of more than $250,000 or
which could reasonably be expected to involve payments during fiscal year 2003
of more than $250,000, other than any such contract that is terminable at will
on 60 days or less notice without payment of a penalty in excess of $100,000 and
other than any contract entered into on or after the date hereof that is
permitted under the provisions of Section 6.2.
(b) Except as set forth in Section 4.14(b) of the SIB Disclosure
Schedule, (i) each SIB Contract is valid and binding on SIB or its applicable
Subsidiary and in full force and effect, and, to the knowledge of SIB, is valid
and binding on the other parties thereto, (ii) SIB and each of its Subsidiaries
and, to the knowledge of SIB, each of the other parties thereto, has in all
material respects performed all obligations required to be performed by it to
date under each SIB Contract, and (iii) no event or condition exists which
constitutes or, after notice or lapse of time or both, would constitute a
material breach or default on the part of SIB or any of its Subsidiaries or, to
the knowledge of SIB, any other party thereto, under any such SIB Contract,
except, in each case, where such invalidity, failure to be binding, failure to
so perform or breach
-19-
or default, individually or in the aggregate, would not have or reasonably be
expected to have a Material Adverse Effect on SIB.
(c) Section 4.14(c) of the SIB Disclosure Schedule contains a
schedule showing the present value of the monetary amounts payable as of the
date specified in such schedule, whether individually or in the aggregate
(including good faith estimates of all amounts not subject to precise
quantification as of the date of this Agreement, such as tax indemnification
payments in respect of income or excise taxes) under any employment,
change-in-control, severance or similar contract with any present or former
employee or directors, and identifying the types and estimated amounts of the
in-kind benefits due under any Plan or SIB Contract (other than a tax-qualified
plan) for each such person.
4.15. Agreements With Regulatory Agencies. Except as set forth in
Section 4.15 of the SIB Disclosure Schedule, neither SIB nor any of its
Subsidiaries is subject to any cease-and-desist or other order issued by, or is
a party to any written agreement, consent agreement or memorandum of
understanding with, or is a party to any commitment letter or similar
undertaking to, or is a recipient of any extraordinary supervisory letter from,
or is subject to any order or directive by, or has adopted any board resolutions
at the request of (each, whether or not set forth in Section 4.15 of the SIB
Disclosure Schedule, a "SIB Regulatory Agreement"), any Governmental Entity that
currently restricts or by its terms will in the future restrict the conduct of
its business or relates to its capital adequacy, its credit or risk management
policies, its dividend policies, its management or its business, nor has SIB or
any of its Subsidiaries been advised by any Governmental Entity that it is
considering issuing or requesting SIB or any SIB Subsidiary to enter into or
become bound by any SIB Regulatory Agreement.
4.16. SIB Information. The information relating to SIB and its
Subsidiaries to be provided by SIB for inclusion in the Joint Proxy
Statement/Prospectus, the S-4, any filing pursuant to Rule 165 or Rule 425 under
the Securities Act or Rule 14a-12 under the Exchange Act, or in any other
document filed with any other Governmental Entity in connection herewith, will
not contain any untrue statement of a material fact or omit to state a material
fact necessary to make the statements therein, in light of the circumstances in
which they are made, not misleading. The Joint Proxy Statement/Prospectus
(except for such portions thereof as relate only to ICBC or any of its
Subsidiaries) will comply as to form in all material respects with the
provisions of the Exchange Act and the rules and regulations thereunder.
4.17. Title to Property.
(a) Real Property. Except as disclosed in Section 4.17(a) of the SIB
Disclosure Schedule, SIB and its Subsidiaries have good, valid and marketable
title to all real property owned by them free and clear of all Liens, except
Liens for current Taxes not yet due and payable and other standard exceptions
commonly found in title policies in the jurisdiction where such real property is
located, and such encumbrances and imperfections of title, if any, as do not
materially detract from the value of the properties and do not materially
interfere with the present or proposed use of such properties or otherwise
materially impair such operations. All real property and fixtures material to
the business, operations or financial condition of SIB and its Subsidiaries are
in good condition and repair except as would not reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect on SIB.
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(b) Personal Property. SIB and its Subsidiaries have good, valid and
marketable title to all tangible personal property owned by them, free and clear
of all Liens except as publicly disclosed in the SIB Reports filed prior to the
date hereof or as disclosed in Section 4.17(b) of the SIB Disclosure Schedule or
as would not reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect on SIB.
(c) Leased Property. All leases of real property and all other
leases material to SIB and its Subsidiaries under which SIB or a Subsidiary, as
lessee, leases personal property are valid and binding in accordance with their
respective terms, there is not under such lease any material existing default by
SIB or such Subsidiary or, to the knowledge of SIB, any other party thereto, or
any event which with notice or lapse of time would constitute such a default,
and, in the case of leased premises, SIB or such Subsidiary quietly enjoys the
premises provided for in such lease, except in any such case as would not
reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect on SIB.
4.18. Insurance. SIB and its Subsidiaries are insured with reputable
insurers against such risks and in such amounts as the management of SIB
reasonably has determined to be prudent and consistent with industry practice.
Section 4.18 of the SIB Disclosure Schedule contains a true and complete list
and a brief description (including name of insurer, agent, coverage and
expiration date) of all insurance policies in force on the date hereof with
respect to the business and assets of SIB and its Subsidiaries (other than
insurance policies under which SIB or any Subsidiary thereof is named as a loss
payee, insured or additional insured as a result of its position as a secured
lender on specific loans and mortgage insurance policies on specific loans or
pools of loans). SIB and its Subsidiaries are in material compliance with their
insurance policies and are not in default under any of the material terms
thereof. Each such policy is outstanding and in full force and effect and,
except as set forth in Section 4.18 of the SIB Disclosure Schedule and except
for policies insuring against potential liabilities of officers, directors and
employees of SIB and its Subsidiaries, SIB or the relevant Subsidiary thereof is
the sole beneficiary of such policies. All premiums and other payments due under
any such policy have been paid, and all claims thereunder have been filed in due
and timely fashion.
4.19. Environmental Liability. Except as set forth in Section 4.19 of
the SIB Disclosure Schedule, there are no legal, administrative, arbitral or
other proceedings, claims, actions, causes of action, private environmental
investigations or remediation activities or governmental investigations of any
nature seeking to impose, or that reasonably could be expected to result in the
imposition, on SIB or any of its Subsidiaries of any liability or obligation
arising under common law standards relating to environmental protection, human
health or safety, or under any local, state or federal environmental statute,
regulation or ordinance, including the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended (collectively, the
"Environmental Laws"), pending or, to the knowledge of SIB, threatened against
SIB or any of its Subsidiaries, which liability or obligation would have or
would reasonably be expected to have a Material Adverse Effect on SIB. To the
knowledge of SIB, there is no reasonable basis for any such proceeding, claim,
action or governmental investigation that would impose any liability or
obligation that would have or would reasonably be expected to have a Material
Adverse Effect on SIB. To the knowledge of SIB, during or prior to the period of
(i) its or any of its Subsidiaries' ownership or operation of any of their
respective current properties, (ii) its or any of its Subsidiaries'
participation in the management of any property, or (iii) its or any of its
Subsidiaries' holding of a security interest or other interest in any property,
-21-
there were no releases or threatened releases of hazardous, toxic, radioactive
or dangerous materials or other materials regulated under Environmental Laws in,
on, under or affecting any such property which would reasonably be expected to
have a Material Adverse Effect on SIB. Neither SIB nor any of its Subsidiaries
is subject to any agreement, order, judgment, decree, letter or memorandum by or
with any court, governmental authority, regulatory agency or third party
imposing any material liability or obligation pursuant to or under any
Environmental Law that would have or would reasonably be expected to have a
Material Adverse Effect on SIB.
4.20. Opinion Of Financial Advisor. SIB has received the opinion of
Xxxxx, Xxxxxxxx & Xxxxx, dated as of the date of this Agreement, to the effect
that, as of such date, the consideration to be paid to the stockholders of SIB
in the Merger is fair from a financial point of view to such holders of SIB
Common Stock.
4.21. Patents, Trademarks, Etc. SIB and each of its Subsidiaries owns
or possesses, or is licensed or otherwise has the right to use, all proprietary
rights, including all trademarks, trade names, service marks and copyrights,
that are material to the conduct of their existing businesses. Except for the
agreements listed in Section 4.21 of the SIB Disclosure Schedule, neither SIB
nor any of its Subsidiaries is bound by or a party to any licenses or agreements
of any kind with respect to any trademarks, service marks or trade names which
it claims to own. Neither SIB nor any of its Subsidiaries has received any
communications alleging that any of them has violated any of the patents,
trademarks, service marks, trade names, copyrights or trade secrets or other
proprietary rights of any other person or entity.
4.22. Loan Matters. (a) (i) Section 4.22(a) of the SIB Disclosure
Schedule sets forth a list of all extensions of credit (including commitments to
extend credit) ("Loans") by SIB and its Subsidiaries to any directors, executive
officers and principal stockholders (as such terms are defined in Regulation O
("Regulation O") of the Board of Governors of the Federal Reserve System (12
C.F.R. Part 215)) of SIB or any of its Subsidiaries; (ii) there are no employee,
officer, director or other affiliate Loans on which the borrower is paying a
rate other than that reflected in the note or the relevant credit agreement or,
except for Loans made by SIB and its Subsidiaries to its employees in accordance
with its policies as disclosed in Section 4.22(c) of the SIB Disclosure
Schedule, on which the borrower is paying a rate which was below market at the
time the Loan was made; and (iii) except as listed in Section 4.22(a) of the SIB
Disclosure Schedule, all such Loans are and were made in compliance in all
material respects with all applicable laws and regulations.
(b) Each outstanding Loan (including Loans held for resale to
investors) has been solicited and originated and is administered and serviced,
and the relevant Loan files are being maintained, in all material respects in
accordance with the relevant loan documents, SIB's underwriting standards (and,
in the case of Loans held for resale to investors, the underwriting standards,
if any, of the applicable investors) and with all applicable requirements of
federal, state and local laws, regulations and rules.
(c) Except as set forth in Section 4.22(c) of the SIB Disclosure
Schedule, none of the agreements pursuant to which SIB or any of its
Subsidiaries has sold Loans or pools of Loans or participations in Loans or
pools of Loans contains any obligation to repurchase such Loans or interests
therein solely on account of a payment default by the obligor on any such Loan.
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(d) Each of SIB and its Subsidiaries, as applicable, is approved by
and is in good standing: (i) as a supervised mortgagee by the Department of
Housing and Urban Development ("HUD") to originate and service Title I FHA
mortgage loans; (ii) as a GNMA I and II Issuer by the Government National
Mortgage Association ("Xxxxxx Mae"); (iii) by the Department of Veteran's
Affairs ("VA") to originate and service VA loans; and (iv) as a seller/servicer
by the Federal National Mortgage Association ("Xxxxxx Xxx") and the Federal Home
Loan Mortgage Corporation ("Xxxxxxx Mac") to originate and service conventional
residential mortgage Loans.
(e) Except as set forth in Section 4.22(e) of the SIB Disclosure
Schedule, none of SIB or any of its Subsidiaries is now nor has it ever been
subject to any fine, suspension, settlement or other agreement or other
administrative agreement or sanction by, or any reduction in any loan purchase
commitment from, HUD, Xxxxxx Xxx, the VA, Xxxxxx Mae, Xxxxxxx Mac or other
investor, or any federal or state agency relating to the origination, sale or
servicing of mortgage or consumer Loans. SIB has not received any notice, nor
does it have any reason to believe, that Xxxxxx Mae or Xxxxxxx Mac propose to
limit or terminate the underwriting authority of SIB and its Subsidiaries or to
increase the guarantee fees payable to such investor.
(f) Each of SIB and its Subsidiaries is in compliance in all
material respects with all applicable federal, state and local laws, rules and
regulations, including the Truth-In-Lending Act and Regulation Z, the Equal
Credit Opportunity Act and Regulation B, the Real Estate Settlement Procedures
Act and Regulation X, the Fair Credit Reporting Act, the Fair Debt Collection
Practices Act and all HUD, Xxxxxx Mae, Xxxxxx Xxx, Xxxxxxx Mac, other investor
and mortgage insurance company requirements relating to the origination, sale
and servicing of mortgage and consumer Loans.
(g) To the knowledge of SIB, each Loan included in a pool of Loans
originated, acquired or serviced by SIB or any of its Subsidiaries (a "Pool")
meets all eligibility requirements (including all applicable requirements for
obtaining mortgage insurance certificates and loan guaranty certificates) for
inclusion in such Pool. All such Pools have been finally certified or, if
required, recertified in accordance with all applicable laws, rules and
regulations, except where the time for certification or recertification has not
yet expired. No Pools have been improperly certified, and no Loan has been
bought out of a Pool without all required approvals of the applicable investors.
4.23. Community Reinvestment Act Compliance. SIBT is in compliance in
all material respects with the applicable provisions of the Community
Reinvestment Act of 1977 and the regulations promulgated thereunder
(collectively, "CRA") and has received a CRA rating of "outstanding" from the
OTS in its most recently completed exam.
4.24. Labor Matters. Neither SIB nor any of its Subsidiaries is a party
to or is bound by any collective bargaining agreement, contract or other
agreement or understanding with a labor union or labor organization, nor is SIB
or any of its Subsidiaries the subject of a proceeding asserting that it or any
such Subsidiary has committed an unfair labor practice (within the meaning of
the National Labor Relations Act) or seeking to compel SIB or any such
Subsidiary to bargain with any labor organization as to wages or conditions of
employment, nor is there any strike or other material labor dispute or disputes
involving it or any of its Subsidiaries pending, or to SIB's knowledge,
threatened, nor is SIB aware of any activity involving its or any of its
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Subsidiaries' employees seeking to certify a collective bargaining unit or
engaging in other organizational activity.
4.25. Interest Rate Risk Management Instruments. Except as would not be
reasonably expected to have, either individually or in the aggregate, a Material
Adverse Effect on SIB, (i) all interest rate swaps, caps, floors and option
agreements and other interest rate risk management arrangements, whether entered
into for the account of SIB or any of its Subsidiaries or for the account of a
customer of SIB or any of its Subsidiaries, were entered into in the ordinary
course of business consistent with past practice and in accordance with prudent
banking practice and applicable rules, regulations and policies of all
applicable Governmental Entities and with counterparties believed to be
financially responsible at the time and are legal, valid and binding obligations
of SIB or one of its Subsidiaries and, to the knowledge of SIB, each of the
counterparties thereto, and are enforceable in accordance with their terms, and
are in full force and effect, (ii) SIB or its Subsidiaries and, to the knowledge
of SIB, the counterparties thereto, have duly performed their obligations
thereunder to the extent that such obligations to perform have accrued, and
(iii) to SIB's knowledge, there are no breaches, violations or defaults or
allegations or assertions of such by any party thereunder.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF ICBC
As of the date hereof, ICBC has delivered to SIB a schedule (the
"ICBC Disclosure Schedule") setting forth, among other things, certain items,
the disclosure of which is necessary or appropriate either in response to an
express disclosure requirement contained in a provision hereof or as an
exception to one or more representations or warranties contained in this Article
V or to one or more covenants contained in Article VI; provided, however, that
(i) no such item is required to be set forth in the ICBC Disclosure Schedule as
an exception to a representation or warranty if its absence would not result in
the related representation or warranty being deemed untrue or incorrect under
the standard established by Section 8.3(a), and (ii) the mere inclusion of an
item in the ICBC Disclosure Schedule as an exception to a representation or
warranty shall not be deemed an admission by ICBC that such item represents a
material exception or fact, event or circumstance or that such item is or would
be reasonably likely to result in a Material Adverse Effect on ICBC.
ICBC hereby represents and warrants to SIB as follows:
5.1. Corporate Organization. (a) ICBC is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware.
ICBC has the corporate power and authority to own or lease all of its properties
and assets and to carry on its business as it is now being conducted, and is
duly licensed or qualified to do business in each jurisdiction in which the
nature of the business conducted by it or the character or location of the
properties and assets owned or leased by it makes such licensing or
qualification necessary, except where the failure to be so licensed or qualified
would not have or reasonably be expected to have a Material Adverse Effect on
ICBC. ICBC is duly registered as a savings and loan holding company under HOLA.
The copies of the certificate of incorporation and bylaws of ICBC which have
previously been made available to SIB are true, complete and correct copies of
such documents as in effect as of the date of this Agreement.
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(b) Each Subsidiary of ICBC (i) is duly organized and validly
existing as a savings bank, corporation, partnership or limited liability
company under the laws of its jurisdiction of organization, (ii) is duly
licensed or qualified to do business and is in good standing in all
jurisdictions (whether federal, state, local or foreign) where its ownership or
leasing of property or the conduct of its business requires it to be so licensed
or qualified and in which the failure to be so qualified would have or would
reasonably be expected to have, either individually or in the aggregate, a
Material Adverse Effect on ICBC and (iii) has all requisite corporate power and
authority to own or lease its properties and assets and to carry on its business
as now conducted.
(c) Except for its ownership of Independence Bank, ICBC does not
own, either directly or through its Subsidiaries, any stock or equity interest
in any depository institution (as defined in 12 U.S.C. Section 1813(c)(1)).
Independence Bank is a qualified thrift lender pursuant to Section 10(m) of HOLA
and its deposits are insured by the FDIC through the BIF and the Savings
Association Insurance Fund ("SAIF") to the fullest extent permitted by law.
Independence Bank is a member in good standing of the FHLB of New York.
5.2. Capitalization. (a) The authorized capital stock of ICBC consists of
125,000,000 shares of ICBC Common Stock and 25,000,000 shares of preferred
stock, no par value (the "ICBC Preferred Stock"). As of the date of this
Agreement, there were 54,460,004 shares of ICBC Common Stock outstanding, no
shares of ICBC Preferred Stock outstanding and 21,583,746 shares of ICBC Common
Stock held in ICBC's treasury. As of the date of this Agreement, no shares of
ICBC Common Stock or ICBC Preferred Stock were reserved for issuance, except for
an aggregate of 6,570,340 shares of ICBC Common Stock reserved for issuance (i)
upon the exercise of stock options pursuant to the 1998 Stock Option Plan and
the 2002 Stock Incentive Plan (the "ICBC Stock Option Plans") and (ii) in
payment of directors' fees pursuant to the Directors' Fee Plan. All of the
issued and outstanding shares of ICBC Common Stock have been duly authorized and
validly issued and are fully paid, nonassessable and free of preemptive rights,
with no personal liability attaching to the ownership thereof. As of the date of
this Agreement, except (i) as set forth in Section 5.2 of the ICBC Disclosure
Schedule, and (ii) as set forth elsewhere in this Section 5.2, ICBC does not
have and is not bound by any outstanding subscriptions, options, warrants,
calls, commitments or agreements of any character calling for the purchase or
issuance of any shares of ICBC Common Stock or ICBC Preferred Stock or any other
equity securities of ICBC or any securities representing the right to purchase
or otherwise receive any shares of ICBC Common Stock or ICBC Preferred Stock.
The shares of ICBC Common Stock to be issued pursuant to the Merger have been
duly authorized and, at the Effective Time, all such shares will be validly
issued, fully paid, nonassessable and free of preemptive rights, with no
personal liability attaching to the ownership thereof.
(b) Section 5.2(b) of the ICBC Disclosure Schedule lists the name,
jurisdiction of incorporation, authorized and outstanding shares of capital
stock and record and beneficial owners of such capital stock for each Subsidiary
of ICBC. Except as set forth in Section 5.2(b) of the ICBC Disclosure Schedule,
ICBC owns, directly or indirectly, all of the issued and outstanding shares of
capital stock of or all other equity interests in each of ICBC's Subsidiaries,
free and clear of any Liens whatsoever, and all of such shares are duly
authorized and validly issued and are fully paid, nonassessable and free of
preemptive rights, with no personal liability attaching to the ownership
thereof. Neither ICBC nor any Subsidiary thereof has or is bound by any
outstanding subscriptions, options, warrants, calls, commitments or
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agreements of any character calling for the purchase, sale or issuance of any
shares of capital stock or any other equity security of any Subsidiary of ICBC
or any securities representing the right to purchase or otherwise receive any
shares of capital stock or any other equity security of any such Subsidiary.
(c) Except as disclosed in Section 5.2(c) of the ICBC Disclosure
Schedule and for the ownership of ICBC's Subsidiaries, neither ICBC nor any of
its Subsidiaries beneficially owns or controls, directly or indirectly, any
shares of stock or other equity interest in any corporation, firm, partnership,
joint venture or other entity excluding any investments held in a fiduciary
capacity for the benefit of customers or acquired after the date of this
Agreement in respect of debts previously contracted.
(d) No Voting Debt has been issued by ICBC and is outstanding.
5.3. Authority; No Violation.
(a) ICBC has full corporate power and authority to execute and
deliver this Agreement and, subject to the adoption of this Agreement by the
Required ICBC Vote, to consummate the transactions contemplated hereby. The
execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby have been duly and validly approved by all
necessary corporate and stockholder action of ICBC, subject in the case of the
consummation of the Merger to the adoption of this Agreement by the Required
ICBC Vote, and no other corporate or stockholder proceedings on the part of ICBC
are necessary to approve this Agreement or to consummate the transactions
contemplated hereby. This Agreement has been duly and validly executed and
delivered by ICBC and (assuming due authorization, execution and delivery by
SIB) constitutes a valid and binding obligation of ICBC, enforceable against
ICBC in accordance with its terms, except as enforcement may be limited by
general principles of equity whether applied in a court of law or a court of
equity and by bankruptcy, insolvency and similar laws affecting creditors'
rights and remedies generally.
(b) Except as set forth in Section 5.3(b) of the ICBC Disclosure
Schedule, neither the execution and delivery of this Agreement by ICBC, nor the
consummation by ICBC of the transactions contemplated hereby, nor compliance by
ICBC with any of the terms or provisions hereof, will (i) violate any provision
of the certificate of incorporation or bylaws of ICBC or any of the similar
governing documents of any of its Subsidiaries or (ii) assuming that the
consents and approvals referred to in Section 5.4 are duly obtained, (x) violate
any statute, code, ordinance, rule, regulation, judgment, order, writ, decree or
injunction applicable to ICBC or any of its Subsidiaries or any of their
respective properties or assets, or (y) violate, conflict with, result in a
breach of any provision of or the loss of any benefit under, constitute a
default (or an event which, with notice or lapse of time or both, would
constitute a default) under, result in the termination of or a right of
termination or cancellation under, accelerate the performance required by, or
result in the creation of any Lien upon any of the respective properties or
assets of ICBC or any of its Subsidiaries under, any of the terms, conditions or
provisions of any note, bond, mortgage, indenture, deed of trust, license,
lease, agreement or other instrument or obligation to which ICBC or any of its
Subsidiaries is a party, or by which they or any of their respective properties
or assets may be bound or affected, except (in the case of clause (y) above) for
such violations, conflicts, breaches, defaults or other events which either
individually or in
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the aggregate will not have and would not reasonably be expected to have a
Material Adverse Effect on ICBC.
5.4. Consents and Approvals. Except for (i) the approvals of (A) the
Merger by the OTS under HOLA, (B) the Savings Bank Merger by the FDIC under the
Bank Merger Act and by the Superintendent under the New York banking law and (C)
the payment of a dividend from Independence Bank to ICBC in an amount sufficient
to pay the aggregate cash consideration and related payments by the
Superintendent under Section 112 of the New York banking law and by the OTS
under 12 C.F.R. Section 563.143, (ii) approval of the listing of the ICBC Common
Stock to be issued in the Merger on the Nasdaq National Market System, (iii) the
filing with the SEC of the Joint Proxy Statement/Prospectus and the filing and
declaration of effectiveness of the S-4, (iv) the filing of the Certificate of
Merger with the Secretary of State of the State of Delaware pursuant to the
DGCL, (v) the adoption of this Agreement by the Required SIB Vote and by the
Required ICBC Vote, (vi) the consents and approvals set forth in Section 5.4 of
the ICBC Disclosure Schedule, (vii) any notices or filings under the HSR Act and
(viii) the consents and approvals of third parties which are not Governmental
Entities, the failure of which to be obtained will not have and would not be
reasonably expected to have, individually or in the aggregate, a Material
Adverse Effect on ICBC, no consents or approvals of, or filings or registrations
with, any Governmental Entity or any third party are necessary in connection
with (A) the execution and delivery by ICBC of this Agreement and (B) the
consummation by ICBC of the Merger and the other transactions contemplated
hereby.
5.5. SEC Documents; Other Reports; Internal Controls. (a) ICBC has filed
all required reports, schedules, registration statements and other documents
with the SEC since December 31, 2000 (the "ICBC Reports"). As of their
respective dates of filing with the SEC (or, if amended or superseded by a
subsequent filing prior to the date hereof, as of the date of such subsequent
filing), the ICBC Reports complied in all material respects with the
requirements of the Securities Act or the Exchange Act, as the case may be, and
the rules and regulations of the SEC thereunder applicable to such ICBC Reports,
and none of the ICBC Reports when filed contained any untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading. There are no outstanding comments from or
unresolved issues raised by the SEC with respect to any of the ICBC Reports.
None of ICBC's Subsidiaries is required to file periodic reports with the SEC
pursuant to Section 13 or 15(d) of the Exchange Act.
(b) ICBC and each of its Subsidiaries have timely filed all reports,
registrations and statements, together with any amendments required to be made
with respect thereto, that they were required to file since December 31, 2000
with any Governmental Entity (other than the SEC) and have paid all fees and
assessments due and payable in connection therewith. Except for normal
examinations conducted by a Governmental Entity in the regular course of the
business of ICBC and its Subsidiaries or as set forth in Section 5.5(b) of the
ICBC Disclosure Schedule, no Governmental Entity has initiated any proceeding
or, to the knowledge of ICBC, threatened an investigation into the business or
operations of ICBC or any of its Subsidiaries since December 31, 2000. Except as
set forth in Section 5.5(b) of the ICBC Disclosure Schedule, there is no
material unresolved violation, criticism or exception by any Governmental Entity
with respect to any report, registration or statement filed by, or relating to
any examinations by any such Governmental Entity of, ICBC or any of its
Subsidiaries.
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(c) The records, systems, controls, data and information of ICBC and
its Subsidiaries are recorded, stored, maintained and operated under means
(including any electronic, mechanical or photographic process, whether
computerized or not) that are under the exclusive ownership and direct control
of ICBC or its Subsidiaries or accountants (including all means of access
thereto and therefrom), except for any non-exclusive ownership and non-direct
control that would not reasonably be expected to have a materially adverse
effect on the system of internal accounting controls described in the following
sentence. As and to the extent described in the ICBC Reports filed with the SEC
prior to the date hereof, ICBC and its Subsidiaries have devised and maintain a
system of internal accounting controls sufficient to provide reasonable
assurances regarding the reliability of financial reporting and the preparation
of financial statements in accordance with GAAP.
5.6. Financial Statements; Undisclosed Liabilities. (a) The financial
statements of ICBC (including any related notes thereto) included in the ICBC
Reports complied as to form, as of their respective dates of filing with the SEC
(or, if amended or superceded by a subsequent filing prior to the date hereof,
as of the date of such subsequent filing), in all material respects, with all
applicable accounting requirements and with the published rules and regulations
of the SEC with respect thereto (except, in the case of unaudited statements, as
permitted by Form 10-Q of the SEC), have been prepared in accordance with GAAP
applied on a consistent basis during the periods involved (except as may be
disclosed therein), and fairly present, in all material respects, the
consolidated financial position of ICBC and its consolidated Subsidiaries and
the consolidated results of operations, changes in stockholders' equity and cash
flows of such companies as of the dates and for the periods shown. The books and
records of ICBC and its Subsidiaries have been, and are being, maintained in all
material respects in accordance with GAAP and any other applicable legal and
accounting requirements and reflect only actual transactions.
(b) Except for (i) those liabilities that are fully reflected or
reserved for in the consolidated financial statements of ICBC included in its
Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 2003,
as filed with the SEC or (ii) liabilities incurred since September 30, 2003 in
the ordinary course of business consistent with past practice, neither ICBC nor
any of its Subsidiaries has incurred any liability of any nature whatsoever
(whether absolute, accrued or contingent or otherwise and whether due or to
become due) that, either alone or when combined with all other liabilities of a
type not described in clause (i) or (ii), has had, or would be reasonably
expected to have, a Material Adverse Effect on ICBC.
5.7. Broker's Fees. Except as set forth in Section 5.7 of the ICBC
Disclosure Schedule, neither ICBC nor any Subsidiary thereof nor any of their
respective officers or directors has employed any broker or finder or incurred
any liability for any broker's fees, commissions or finder's fees in connection
with any of the transactions contemplated by this Agreement.
5.8. Absence of Certain Changes or Events. Except as publicly disclosed in
the ICBC Reports filed prior to the date hereof or as set forth in Section 5.8
of the ICBC Disclosure Schedule, since September 30, 2003, (i) no event has
occurred which has had or would reasonably be expected to have, individually or
in the aggregate, a Material Adverse Effect on ICBC and (ii) ICBC and its
Subsidiaries have not taken any action that would have been prohibited by
Section 6.3 if taken after the date of this Agreement.
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5.9. Legal Proceedings. (a) Neither ICBC nor any of its Subsidiaries is a
party to any, and there are no pending or, to the best of ICBC's knowledge,
threatened legal, administrative, arbitral or other proceedings, claims, actions
or governmental or regulatory investigations of any nature against ICBC or any
of its Subsidiaries (including under the Equal Credit Opportunity Act, the Fair
Housing Act, the Home Mortgage Disclosure Act or any other fair lending law or
other law relating to discriminatory banking practices or the Bank Secrecy Act)
or challenging the validity or propriety of the transactions contemplated by
this Agreement as to which there is a reasonable likelihood of an adverse
determination and which, if adversely determined, would, individually or in the
aggregate, have or reasonably be expected to have a Material Adverse Effect on
ICBC.
(b) There is no injunction, order, judgment, decree, or regulatory
restriction imposed upon ICBC, any of its Subsidiaries or the assets of ICBC or
any of its Subsidiaries which has had, or would reasonably be expected to have,
a Material Adverse Effect on ICBC.
5.10. Taxes.
(a) Except as set forth in Section 5.10(a) of the ICBC Disclosure
Schedule: (x) each of ICBC and its Subsidiaries has (i) duly and timely filed
(including pursuant to applicable extensions granted without penalty) all
material Tax Returns required to be filed by it, and such Tax Returns are true,
correct and complete in all material respects, and (ii) paid in full or made
adequate provision in the financial statements of ICBC (in accordance with GAAP)
for all Taxes, whether or not shown as due on such Tax Returns; (y) no material
deficiencies for any Taxes have been proposed or assessed in writing against or
with respect to any Taxes due by or Tax Returns of ICBC or any of its
Subsidiaries; and (z) there are no material Liens for Taxes upon the assets of
either ICBC or its Subsidiaries except for statutory liens for current Taxes not
yet due or Liens for Taxes that are being contested in good faith by appropriate
proceedings and for which reserves adequate in accordance with GAAP have been
provided.
(b) Neither ICBC nor any of its Subsidiaries (A) is or has ever been
a member of an affiliated group (other than a group the common parent of which
is ICBC) filing a consolidated tax return or (B) has any liability for Taxes of
any person arising from the application of Treasury Regulation section 1.1502-6
or any analogous provision of state, local or foreign law, or as a transferee or
successor, by contract, or otherwise.
(c) Except as set forth in Section 5.10(c) of the ICBC Disclosure
Schedule, none of ICBC or any of its Subsidiaries is a party to, is bound by or
has any obligation under any Tax sharing or Tax indemnity agreement or similar
contract or arrangement.
(d) No closing agreement pursuant to section 7121 of the Code (or
any similar provision of state, local or foreign law) has been entered into by
or with respect to ICBC or any of its Subsidiaries.
(e) None of ICBC or any of its Subsidiaries has been either a
"distributing corporation" or a "controlled corporation" in a distribution
occurring during the last five years in which the parties to such distribution
treated the distribution as one to which Section 355 of the Code is applicable.
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(f) All Taxes required to be withheld, collected or deposited by or
with respect to ICBC and each of its Subsidiaries have been timely withheld,
collected or deposited as the case may be, and to the extent required, have been
paid to the relevant taxing authority.
(g) Neither ICBC nor any of its Subsidiaries has granted any waiver
of any federal, state, local or foreign statute of limitations with respect to,
or any extension of a period for the assessment of, any Tax.
(h) Neither ICBC nor any of its Subsidiaries filed a consent prior
to January 1, 2003 to the application of Section 341(f) of the Code.
(i) ICBC is not aware of any fact or circumstance that could
reasonably be expected to prevent the Merger from qualifying as a reorganization
within the meaning of Section 368(a) of the Code.
5.11. Employees; Employee Benefit Plans. (a) Section 5.11 of the ICBC
Disclosure Schedule contains a true and complete list of each "employee benefit
plan" (within the meaning of section 3(3) of ERISA, including multiemployer
plans within the meaning of ERISA section 3(37)), stock purchase, stock option,
restricted stock severance, employment, loan, change-in-control, fringe benefit,
collective bargaining, bonus, incentive, deferred compensation and all other
employee benefit plans, agreements, programs, policies or other arrangements,
whether or not subject to ERISA (including any funding mechanism therefor now in
effect or required in the future as a result of the transaction contemplated by
this Agreement or otherwise) under which any current or former employee,
director or independent contractor of ICBC or any of its Subsidiaries has any
present or future right to benefits and under which ICBC or any of its
Subsidiaries has any present or future liability. All such plans, agreements,
programs, policies and arrangements shall be collectively referred to as the
"ICBC Plans".
(b) (i) Each ICBC Plan has been established and administered in all
material respects in accordance with its terms, and in all material respects in
compliance with the applicable provisions of ERISA, the Code and other
applicable laws, rules and regulations; (ii) each ICBC Plan which is intended to
be qualified within the meaning of Code section 401(a) is so qualified and has
received a favorable determination letter as to its qualification, and nothing
has occurred, whether by action or failure to act, that could reasonably be
expected to cause the loss of such qualification; (iii) no event has occurred
and no condition exists that would subject ICBC or any of its Subsidiaries,
either directly or by reason of their affiliation with any "ERISA Affiliate"
(defined as any organization which is a member of a controlled group of
organizations within the meaning of Code sections 414(b), (c), (m) or (o)), to
any tax, fine, lien, penalty or other liability imposed by ERISA, the Code or
other applicable laws, rules and regulations; (iv) no "reportable event" (as
such term is defined in ERISA section 4043), "prohibited transaction" (as such
term is defined in ERISA section 406 and Code section 4975) or "accumulated
funding deficiency" (as such term is defined in ERISA section 302 and Code
section 412 (whether or not waived)) has occurred with respect to any Plan; (v)
except as set forth in Section 5.11 of the ICBC Disclosure Schedule, no Plan
provides retiree welfare benefits and neither ICBC nor any of its Subsidiaries
have any obligation to provide any retiree welfare benefits other than as
required by Section 4980B of the Code; and (vi) neither ICBC nor any ERISA
Affiliate has engaged in, or is a successor or parent corporation to an entity
that has engaged in, a transaction described in Sections 4069 or 4212(c) of
ERISA.
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(c) With respect to any ICBC Plan, (i) no actions, suits or claims
(other than routine claims for benefits in the ordinary course) are pending or,
to the knowledge of ICBC or any of its Subsidiaries, threatened, (ii) no facts
or circumstances exist to the knowledge of ICBC or any of its Subsidiaries that
could reasonably be expected to give rise to any such actions, suits or claims,
(iii) no written or oral communication has been received from the PBGC in
respect of any ICBC Plan subject to Title IV of ERISA concerning the funded
status of any such plan or any transfer of assets and liabilities from any such
plan in connection with the transactions contemplated herein and (iv) no
administrative investigation, audit or other administrative proceeding by the
Department of Labor, the PBGC, the Internal Revenue Service or other
governmental agencies are pending, threatened or in progress (including any
routine requests for information from the PBGC).
5.12. Board Approval; Stockholder Vote Required. (a) The Board of
Directors of ICBC, by resolutions duly adopted by unanimous vote of those voting
at a meeting duly called and held (the "ICBC Board Approval"), has (i)
determined that this Agreement and the Merger are fair to and in the best
interests of ICBC and its stockholders and declared the Merger to be advisable,
(ii) approved this Agreement and the Merger, and (iii) recommended that the
stockholders of ICBC adopt this Agreement and directed that such matter be
submitted for consideration by ICBC stockholders at the ICBC Stockholders
Meeting.
(b) The affirmative vote of the holders of a majority of the
outstanding shares of ICBC Common Stock to adopt this Agreement (the "Required
ICBC Vote") is the only vote of the holders of any class or series of ICBC
capital stock necessary to approve and adopt this Agreement and the transactions
contemplated hereby (including the Merger).
5.13. Compliance With Applicable Law. Except as disclosed in Section 5.13
of the ICBC Disclosure Schedule, ICBC and each of its Subsidiaries hold, and
have at all times held, all material licenses, franchises, permits and
authorizations necessary for the lawful conduct of their respective businesses
under and pursuant to all, and have complied with and are not in default in any
material respect under any, applicable law, statute, order, rule, regulation,
policy and/or guideline of any Governmental Entity relating to ICBC or any of
its Subsidiaries (including the Xxxxxxxx-Xxxxx Act of 2002 and the USA PATRIOT
Act of 2001), except where the failure to hold such license, franchise, permit
or authorization or such noncompliance or default would not, individually or in
the aggregate, have or reasonably be expected to have a Material Adverse Effect
on ICBC, and neither ICBC nor any of its Subsidiaries knows of, or has received
notice of, any material violations of any of the above which, individually or in
the aggregate, would have or reasonably be expected to have a Material Adverse
Effect on ICBC.
5.14. Agreements With Regulatory Agencies. Except as set forth in Section
5.14 of the ICBC Disclosure Schedule, neither ICBC nor any of its Subsidiaries
is subject to any cease-and-desist or other order issued by, or is a party to
any written agreement, consent agreement or memorandum of understanding with, or
is a party to any commitment letter or similar undertaking to, or is a recipient
of any extraordinary supervisory letter from, or is subject to any order or
directive by, or has adopted any board resolutions at the request of (each,
whether or not set forth in Section 5.14 of the ICBC Disclosure Schedule, an
"ICBC Regulatory Agreement"), any Governmental Entity that restricts the conduct
of its business or relates to its capital adequacy, its credit or risk
management policies, its dividend policy, its management or its
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business, nor has ICBC or any of its Subsidiaries been advised by any
Governmental Entity that it is considering issuing or requesting any ICBC
Regulatory Agreement.
5.15. ICBC Information. The information relating to ICBC and its
Subsidiaries to be provided by ICBC to be contained in the Joint Proxy
Statement/Prospectus, the S-4, any filing pursuant to Rule 165 or Rule 425 under
the Securities Act or Rule 14a-12 under the Exchange Act, or in any other
document filed with any other Governmental Entity in connection herewith, will
not contain any untrue statement of a material fact or omit to state a material
fact necessary to make the statements therein, in light of the circumstances in
which they are made, not misleading. The Joint Proxy Statement/Prospectus
(except for such portions thereof that relate only to SIB or any of its
Subsidiaries) will comply as to form in all material respects with the
provisions of the Exchange Act and the rules and regulations thereunder. The S-4
will comply as to form in all material respects with the provisions of the
Securities Act and the rules and regulations thereunder.
5.16. Title to Property.
(a) Real Property. Except as disclosed in Section 5.16(a) of the
ICBC Disclosure Schedule, ICBC and its Subsidiaries have good, valid and
marketable title to all real property owned by them free and clear of all Liens,
except Liens for current Taxes not yet due and payable and other standard
exceptions commonly found in title policies in the jurisdiction where such real
property is located, and such encumbrances and imperfections of title, if any,
as do not materially detract from the value of the properties and do not
materially interfere with the present or proposed use of such properties or
otherwise materially impair such operations. All real property and fixtures
material to the business, operations or financial condition of ICBC and its
Subsidiaries are in good condition and repair except as would not reasonably be
expected to have, individually or in the aggregate, a Material Adverse Effect on
ICBC.
(b) Personal Property. ICBC and its Subsidiaries have good, valid
and marketable title to all tangible personal property owned by them, free and
clear of all Liens except as publicly disclosed in the ICBC Reports filed prior
to the date hereof or as disclosed in Section 5.16(b) of the ICBC Disclosure
Schedule or as would not reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect on ICBC.
(c) Leased Property. All leases of real property and all other
leases material to ICBC and its Subsidiaries under which ICBC or a Subsidiary,
as lessee, leases personal property are valid and binding in accordance with
their respective terms, there is not under such lease any material existing
default by ICBC or such Subsidiary or, to the knowledge of ICBC, any other party
thereto, or any event which with notice or lapse of time would constitute such a
default, and, in the case of leased premises, ICBC or such Subsidiary quietly
enjoys the premises provided for in such lease, except in any such case as would
not reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect on ICBC.
5.17. Environmental Liability. Except as set forth in Section 5.17 of the
ICBC Disclosure Schedule, there are no legal, administrative, arbitral or other
proceedings, claims, actions, causes of action, private environmental
investigations or remediation activities or governmental investigations of any
nature seeking to impose, or that reasonably could be expected to result in the
imposition, on ICBC or any of its Subsidiaries of any liability or
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obligation arising under common law standards relating to environmental
protection, human health or safety, or under any the Environmental Laws, pending
or, to the knowledge of ICBC, threatened against ICBC or any of its
Subsidiaries, which liability or obligation would have or would reasonably be
expected to have a Material Adverse Effect on ICBC. To the knowledge of ICBC,
there is no reasonable basis for any such proceeding, claim, action or
governmental investigation that would impose any liability or obligation that
would have or would reasonably be expected to have a Material Adverse Effect on
ICBC. To the knowledge of ICBC, during or prior to the period of (i) its or any
of its Subsidiaries' ownership or operation of any of their respective current
properties, (ii) its or any of its Subsidiaries' participation in the management
of any property, or (iii) its or any of its Subsidiaries' holding of a security
interest or other interest in any property, there were no releases or threatened
releases of hazardous, toxic, radioactive or dangerous materials or other
materials regulated under Environmental Laws in, on, under or affecting any such
property which would reasonably be expected to have a Material Adverse Effect on
ICBC. Neither ICBC nor any of its Subsidiaries is subject to any agreement,
order, judgment, decree, letter or memorandum by or with any court, governmental
authority, regulatory agency or third party imposing any material liability or
obligation pursuant to or under any Environmental Law that would have or would
reasonably be expected to have a Material Adverse Effect on ICBC.
5.18. Opinion Of Financial Advisor. ICBC has received the opinions of
Xxxxxx Brothers Inc. and Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated,
each dated as of the date of this Agreement, to the effect that, as of such
date, the consideration to be paid to the stockholders of SIB in the Merger is
fair from a financial point of view to ICBC.
5.19. Patents, Trademarks, Etc. ICBC and each of its Subsidiaries owns or
possesses, or is licensed or otherwise has the right to use, all proprietary
rights, including all trademarks, trade names, service marks and copyrights,
that are material to the conduct of their existing businesses. Except for the
agreements listed in Section 5.19 of the ICBC Disclosure Schedule, neither ICBC
nor any of its Subsidiaries is bound by or a party to any licenses or agreements
of any kind with respect to any trademarks, service marks or trade names which
it claims to own. Neither ICBC nor any of its Subsidiaries has received any
communications alleging that any of them has violated any of the patents,
trademarks, service marks, trade names, copyrights or trade secrets or other
proprietary rights of any other person or entity.
5.20. Loan Matters. (a) Each outstanding loan held by ICBC (including
loans held for resale to investors) has been solicited and originated and is
administered and serviced, and the relevant loan files are being maintained, in
all material respects in accordance with the relevant loan documents, ICBC's
underwriting standards (and, in the case of ICBC Loans held for resale to
investors, the underwriting standards, if any, of the applicable investors) and
with all applicable requirements of federal, state and local laws, regulations
and rules.
(b) Except as set forth in Section 5.20(b) of the ICBC Disclosure
Schedule, none of the agreements pursuant to which ICBC or any of its
Subsidiaries has sold loans or pools of loans or participations in loans or
pools of loans contains any obligation to repurchase such loans or interests
therein solely on account of a payment default by the obligor on any such loan.
(c) Each of ICBC and its Subsidiaries, as applicable, is approved by
and is in good standing: (i) as a supervised mortgagee by HUD to originate and
service Title I FHA
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mortgage loans; (ii) as a GNMA I and II Issuer by Xxxxxx Mae; (iii) by the VA to
originate and service VA loans; (iv) as a seller/servicer by Xxxxxx Xxx and
Xxxxxxx Mac to originate and service conventional residential and multi-family
mortgage loans and (v) as a delegated underwriting and servicing lender by
Xxxxxx Mae.
(d) Except as set forth in Section 5.20(d) of the ICBC Disclosure
Schedule, none of ICBC or any of its Subsidiaries is now nor has it ever been
subject to any fine, suspension, settlement or other agreement or other
administrative agreement or sanction by, or any reduction in any loan purchase
commitment from, HUD, Xxxxxx Xxx, the VA, Xxxxxx Mae, Xxxxxxx Mac or other
investor, or any federal or state agency relating to the origination, sale or
servicing of mortgage or consumer loans. ICBC has not received any notice, nor
does it have any reason to believe, that Xxxxxx Mae or Xxxxxxx Mac propose to
limit or terminate the underwriting authority of ICBC and its Subsidiaries or to
increase the guarantee fees payable to such investor.
(e) Each of ICBC and its Subsidiaries is in compliance in all
material respects with all applicable federal, state and local laws, rules and
regulations, including the Truth-In-Lending Act and Regulation Z, the Equal
Credit Opportunity Act and Regulation B, the Real Estate Settlement Procedures
Act and Regulation X, the Fair Credit Reporting Act, the Fair Debt Collection
Practices Act and all HUD, Xxxxxx Mae, Xxxxxx Xxx, Xxxxxxx Mac, other investor
and mortgage insurance company requirements relating to the origination, sale
and servicing of mortgage and consumer loans.
(f) To the knowledge of ICBC, each Loan included in a Pool
originated, acquired or serviced by ICBC or any of its Subsidiaries meets all
eligibility requirements (including all applicable requirements for obtaining
mortgage insurance certificates and loan guaranty certificates) for inclusion in
such Pool. All such Pools have been finally certified or, if required,
recertified in accordance with all applicable laws, rules and regulations,
except where the time for certification or recertification has not yet expired.
No Pools have been improperly certified, and no loan has been bought out of a
Pool without all required approvals of the applicable investors.
5.21. Community Reinvestment Act Compliance. Independence Bank is in
compliance in all material respects with the applicable provisions of the CRA
and has received a CRA rating of "satisfactory" from the FDIC and the New York
Banking Department in its most recently completed exams.
5.22. Interest Rate Risk Management Instruments. Except as would not be
reasonably expected to have, either individually or in the aggregate, a Material
Adverse Effect on ICBC, (i) all interest rate swaps, caps, floors and option
agreements and other interest rate risk management arrangements, whether entered
into for the account of ICBC or any of its Subsidiaries or for the account of a
customer of ICBC or any of its Subsidiaries, were entered into in the ordinary
course of business consistent with past practice and in accordance with prudent
banking practice and applicable rules, regulations and policies of all
applicable Governmental Entities and with counterparties believed to be
financially responsible at the time and are legal, valid and binding obligations
of ICBC or one of its Subsidiaries and, to the knowledge of ICBC, each of the
counterparties thereto, and are enforceable in accordance with their terms, and
are in full force and effect, (ii) ICBC or its Subsidiaries and, to the
knowledge of
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ICBC, the counterparties thereto, have duly performed their obligations
thereunder to the extent that such obligations to perform have accrued, and
(iii) to ICBC's knowledge, there are no breaches, violations or defaults or
allegations or assertions of such by any party thereunder.
ARTICLE VI
COVENANTS RELATING TO CONDUCT OF BUSINESS
6.1. Conduct of Business Prior to the Effective Time. Except as otherwise
expressly contemplated or permitted by this Agreement or with the prior written
consent of ICBC, during the period from the date of this Agreement to the
Effective Time, SIB shall, and shall cause each of its Subsidiaries to, (i)
conduct its business in the usual, regular and ordinary course consistent with
past practice, (ii) use reasonable best efforts to maintain and preserve intact
its business organization, and its rights, authorizations, franchises and other
authorizations issued by Governmental Entities, preserve its advantageous
business relationships with customers, vendors and others doing business with it
and retain the services of its officers and key employees and (iii) take no
action which would reasonably be expected to adversely affect or delay the
receipt of any approvals of any Governmental Entity required to consummate the
transactions contemplated hereby or to consummate the transactions contemplated
hereby. In addition, SIB agrees to cooperate with ICBC following the execution
of this Agreement with respect to (i) the development and implementation of a
plan for the operation of the SIB Mortgage Corp. (the "Mortgage Company")
pending the consummation of the transactions contemplated hereby, including
causing the Mortgage Company to enter into such hedging and/or derivative
transactions or revise its underwriting or other operational procedures as ICBC
may reasonably request, and (ii) the negotiation, execution and delivery of a
mutually satisfactory Mortgage Company Flow Agreement (as hereinafter defined)
and one or more mutually satisfactory asset purchase agreements with respect to
the sale or disposition of certain branch offices and related assets and
operations, in each case consistent with the terms previously discussed by the
parties (collectively, the "Mortgage Company Operating Plan").
6.2. SIB Forbearances. Except as expressly contemplated or permitted by
this Agreement or as set forth in Section 6.2 of the SIB Disclosure Schedule,
during the period from the date of this Agreement to the Effective Time, SIB
shall not, and shall not permit any of its Subsidiaries to, without the prior
written consent of ICBC, which shall not be unreasonably withheld or delayed:
(a) (i) adjust, split, combine or reclassify any capital stock; (ii)
set any record or payment dates for the payment of any dividends or
distributions on its capital stock or make, declare or pay any dividend or make
any other distribution on, or directly or indirectly redeem, purchase or
otherwise acquire, any shares of its capital stock or any securities or
obligations convertible into or exchangeable for any shares of its capital stock
or stock appreciation rights or grant any person any right to acquire any shares
of its capital stock, other than (A) regular quarterly cash dividends on SIB
Common Stock equal to the rate paid during the fiscal quarter immediately
preceding the date hereof with record and payment dates consistent with past
practice, provided, however, that no dividend shall be paid by SIB on SIB Common
Stock if SIB shall be required to borrow funds to do so; (B) dividends paid by
any of the Subsidiaries of SIB so long as such dividends are only paid to SIB or
any of its other wholly owned Subsidiaries; provided that no such dividend shall
cause SIBT to cease to qualify as a "well capitalized"
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institution under 12 C.F.R. Section 565.4); (iii) or issue or commit to issue
any additional shares of capital stock (except pursuant to the exercise of stock
options outstanding as of the date hereof and disclosed in Section 4.2(a) of the
SIB Disclosure Schedule), Voting Debt or any securities convertible into or
exercisable for, or any rights, warrants or options to acquire, any additional
shares of capital stock or Voting Debt;
(b) enter into any new material line of business or change its
lending, investment, risk and asset-liability management and other material
banking or operating policies in any material respect, except as required by law
or by policies imposed by a Governmental Entity;
(c) sell, lease, transfer, mortgage, encumber or otherwise dispose
of any of its assets or properties to any individual, corporation or other
entity (other than a direct wholly owned Subsidiary), except (i) sales of Loans
in the ordinary course of business consistent with past practice, (ii) as
expressly required by the terms of any contracts or agreements in force at the
date of this Agreement and set out in Section 6.2 of the SIB Disclosure Schedule
or (iii) pledges of assets to secure public deposits accepted in the ordinary
course of business consistent with past practice;
(d) acquire or agree to acquire, by merging or consolidating with,
or by purchasing a substantial equity interest in or a substantial portion of
the assets, of or by any other manner, any business or any corporation,
partnership, association or other business organization or division thereof or
otherwise acquire any assets of, which would be material, individually or in the
aggregate, to SIB, other than in connection with foreclosures, settlements in
lieu of foreclosure or troubled loan or debt restructurings in the ordinary
course of business consistent with past practices;
(e) enter into, renew or terminate any contract, lease or agreement,
other than Loans made by SIB's thrift and mortgage bank subsidiaries to their
customers in the ordinary course of business consistent with past practice, that
calls for aggregate annual payments of $250,000 or more; or make any material
change in any of such contracts, leases or agreements, other than renewals of
such contracts or leases for a term of one year or less without material changes
to the terms thereof;
(f) (i) increase the compensation or fringe benefits of any present
or former director, officer or employee of SIB or its Subsidiaries (except for
increases in salary or wages of non-executive officers or employees in the
ordinary course of business consistent with past practice), except as may be
required pursuant to the terms of any plan or agreement in effect on the date of
this Agreement and disclosed in Section 4.11 of the SIB Disclosure Schedule;
(ii) grant any severance or termination pay to any present or former director,
officer or employee of SIB or its Subsidiaries except pursuant to the terms of
any Plan or agreement in effect on the date of this Agreement and disclosed in
Section 4.11 of the SIB Disclosure Schedule; (iii) grant or pay or agree to pay
any annual bonus in respect of 2003 to those persons listed on Schedule 4.11(f)
under the heading "SI Bank & Trust", (iv) loan or advance any money or other
property to any present or former director, officer or employee of SIB or its
Subsidiaries, except for loans made in accordance with SIBT's loan policy in
effect on the date hereof and in compliance with Regulation O; (v) establish,
adopt, enter into, amend or terminate any Plan or any plan, agreement, program,
policy, trust, fund or other arrangement that would be a Plan if it were in
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existence as of the date of this Agreement; (vi) grant any equity or
equity-based awards; or (vii) increase the funding obligation or contribution
rate of any Plan;
(g) other than expenditures budgeted in the capital expenditure
budget and as set forth in Section 6.2(g) of the SIB Disclosure Schedule, make
any capital expenditures in excess of (A) $250,000 per project or related series
of projects or (B) $500,000 in the aggregate;
(h) except as set forth in Section 6.2(h) of the SIB Disclosure
Schedule, make application for the opening, relocation or closing of any, or
open, relocate or close any, branch office or loan production or servicing
facility;
(i) except for Loans or commitments for Loans that have previously
been approved by SIB prior to the date of this Agreement, (A) make or acquire
any Loan or issue a commitment for any Loan except for Loans and commitments
that are made in the ordinary course of business consistent with past practice
and with a principal balance of $1,000,000 or less in the case of single-family
residential mortgage Loans and $2,500,000 million or less in the case of
commercial real estate, commercial business and construction Loans (in each
case, provided that such Loans are made in accordance with the policies and
procedures at SIB and its Subsidiaries); (B) take any action that would result
in any discretionary releases of collateral or guarantees or otherwise
restructure any Loan or commitment for any Loan with a principal balance in
excess of $1,000,000; (C) incur any indebtedness for borrowed money, other than
deposit liabilities, FHLB advances and reverse repurchase agreements, in each
case, entered into in the ordinary course of business consistent with past
practice and with a final maturity of one year or less; or (D) guarantee or
agree to guarantee, or endorse or assume responsibility for, the obligations of
any person other than any wholly owned Subsidiary of SIB (other than the
endorsement of checks and other negotiable instruments in the normal process of
collection);
(j) except as otherwise expressly permitted elsewhere in this
Section 6.2, engage or participate in any material transaction or incur or
sustain any material obligation, in each case other than in the ordinary course
of business consistent with past practice;
(k) settle any claim, action or proceeding involving monetary
damages in excess of $100,000, or agree or consent to the issuance of any
injunction, decree, order or judgment restricting or otherwise affecting its
business or operations;
(l) amend its certificate of incorporation, bylaws or similar
governing documents, or enter into a plan of consolidation, merger, share
exchange, reorganization or complete or partial liquidation with any person
(other than consolidations, mergers or reorganizations solely among wholly owned
subsidiaries of SIB), or a letter of intent or agreement in principle with
respect thereto;
(m) materially change its investment securities portfolio policy, or
the manner in which the portfolio is classified or reported;
(n) make any material changes in its policies and practices with
respect to (i) underwriting, pricing, originating, acquiring, selling,
servicing, or buying or selling rights to service loans or (ii) hedging its loan
positions or commitments;
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(o) take any action that is intended or may reasonably be expected
to result in any of its representations and warranties set forth in this
Agreement being or becoming untrue in any material respect at any time prior to
the Effective Time, or in any of the conditions to the Merger set forth in
Sections 8.1 or 8.2 not being satisfied or in a Requisite Regulatory Approval
not being obtained without imposition of a condition of the type referred to in
Section 8.2(c);
(p) make any changes in its accounting methods or method of Tax
accounting, practices or policies, except as may be required under law, rule,
regulation or GAAP, in each case as concurred in by SIB's independent public
accountants;
(q) issue any mortgage-backed securities with respect to any Loans
or create any special purpose funding or variable interest entity;
(r) make or change any Tax election, file any amended Tax Returns,
settle or compromise any material Tax liability of SIB or any of its
Subsidiaries, agree to an extension or waiver of the statute of limitations with
respect to the assessment or determination of Taxes of SIB or any of its
Subsidiaries, enter into any closing agreement with respect to any Tax or
surrender any right to claim a Tax refund;
(s) with respect to the Mortgage Company, originate any mortgage
Loans or sell or deliver any mortgage Loans, or enter into any hedging or other
derivative transactions with respect thereto, other than in accordance with the
terms and guidelines set forth in a pipeline assumption and forward flow
commitment agreement (the "Mortgage Company Flow Agreement"), to be entered into
as promptly as practicable following the date hereof, by and between the
Mortgage Company and Xxxxxx Brothers Inc (it being understood that the
provisions of this paragraph (s) shall only apply if and when such agreement is
executed); or
(t) agree to, or make any commitment to, take any of the actions
prohibited by this Section 6.2.
6.3. ICBC Forbearances. Except as expressly provided in this Agreement or
with the prior written consent of SIB, during the period from the date of this
Agreement to the Effective Time, ICBC shall, and shall cause each of its
Subsidiaries to, use its reasonable best efforts to (i) use reasonable best
efforts to maintain and preserve intact its business organization, and its
rights, authorizations, franchises and other authorizations issued by
Governmental Entities, preserve its advantageous business relationships with
customers, vendors and others doing business with it and retain the services of
its officers and key employees, and (ii) take no action which would reasonably
be expected to materially adversely affect the receipt of any approvals of any
Governmental Entity required to consummate the transactions contemplated hereby
or to consummate the transactions contemplated hereby or delay the receipt of
such approvals subsequent to the date set forth in Section 9.1(c).
Without limiting the generality of the foregoing, and except as otherwise
provided in this Agreement, as set forth in Section 6.3 of the ICBC Disclosure
Schedule or as required by law or regulation or any Governmental Entity, during
the period from the date of this Agreement to the Effective Time, ICBC shall
not, and shall not permit any of its Subsidiaries to, without the prior written
consent of SIB, which consent shall not be unreasonably withheld or delayed:
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(a) amend its certificate of incorporation, bylaws or similar
governing documents, other than to increase the authorized capital stock of ICBC
or to change the par value of the ICBC Common Stock or to designate the terms of
any ICBC Preferred Stock;
(b) split, combine or reclassify any capital stock; or make, declare
or pay any dividend (except for ICBC's regular quarterly cash dividend and any
specified dividends on any shares of ICBC Preferred Stock that may hereafter be
issued) or make any other distribution on any shares of its capital stock or any
securities or obligations convertible into or exchangeable for any shares of its
capital stock; provided, however, that nothing contained herein shall prohibit
ICBC from increasing the quarterly cash dividend on the ICBC Common Stock or
from paying a dividend or making a distribution on the ICBC Common Stock in
rights or warrants to purchase shares of capital stock of ICBC as long as proper
provision is made to issue corresponding rights or warrants in respect of the
ICBC Common Stock issued as part of the Merger Consideration;
(c) except in satisfaction of debts previously contracted, make any
material acquisition of, or investment in, assets or stock of any other person
to the extent that such material acquisition or investment has, or would
reasonably be expected to have, a Material Adverse Effect on ICBC;
(d) implement or adopt any change in its accounting methods,
practices or policies, except as may be required by GAAP or regulatory
accounting principles or applicable law, in each case as concurred in by ICBC's
independent public accountants;
(e) take any action that is intended or may reasonably be expected
to result in any of its representations and warranties set forth in this
Agreement being or becoming untrue in any material respect at any time prior to
the Effective Time, or any of the conditions to the Merger set forth in Sections
8.1 and 8.3 not being satisfied or in a Requisite Regulatory Approval not being
obtained without imposition of a condition of the type referred to in Section
8.2(c) or in a material violation of any provision of this Agreement; or
(f) agree to, or make any commitment to, take any of the actions
prohibited by this Section 6.3.
ARTICLE VII
ADDITIONAL AGREEMENTS
7.1. Regulatory Matters. (a) ICBC and SIB shall promptly prepare and file
with the SEC the Joint Proxy Statement/Prospectus, and ICBC shall promptly
prepare and file with the SEC the S-4. Each of ICBC and SIB shall use reasonable
best efforts to have the S-4 declared effective under the Securities Act as
promptly as practicable after such filing, and thereafter to mail the Joint
Proxy Statement/Prospectus to their respective stockholders.
(b) Subject to the other provisions of this Agreement, the parties
hereto shall cooperate with each other and use reasonable best efforts to
promptly prepare and file all necessary documentation, to effect all
applications, notices, petitions and filings, and to obtain as promptly as
practicable all permits, consents, approvals and authorizations of all third
parties and Governmental Entities which are necessary or advisable to consummate
the transactions
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contemplated by this Agreement (including the Merger) and to comply with the
terms and conditions of all such permits, consents, approvals and authorizations
of all such third parties and Governmental Entities.
(c) ICBC and SIB shall, upon request, furnish each other with all
information concerning themselves, their Subsidiaries, directors, officers and
stockholders and such other matters as may be reasonably necessary or advisable
in connection with the preparation of the Joint Proxy Statement/Prospectus, the
S-4 or any other statement, filing, notice or application made by or on behalf
of ICBC, SIB or any of their respective Subsidiaries to any Governmental Entity
in connection with the Merger and the other transactions contemplated by this
Agreement.
(d) SIB acknowledges and agrees that ICBC intends to cause SIBT to
be merged with and into Independence Bank at or immediately following the
Effective Time. SIB agrees that its obligations pursuant to this Section 7.1
include an obligation to use its reasonable best efforts to take all actions
necessary to cause the Savings Bank Merger to be consummated at such time.
7.2. Access to Information. (a) Upon reasonable notice and subject to
applicable laws relating to the exchange of information, SIB shall, and shall
cause each of its Subsidiaries to, afford to the officers, employees,
accountants, counsel and other representatives of ICBC access, during normal
business hours during the period prior to the Effective Time, to all its
properties, books, contracts, commitments and records, and to its officers,
employees, accountants, counsel and other representatives, in each case in a
manner not unreasonably disruptive to the operation of the business of SIB and
its Subsidiaries, and, during such period, SIB shall, and shall cause its
Subsidiaries to, make available to ICBC (i) a copy of each report, schedule,
registration statement and other document filed or received by it during such
period pursuant to the requirements of Federal securities laws or Federal or
state banking, mortgage lending, real estate or consumer finance or protection
laws (other than reports or documents which SIB is not permitted to disclose
under applicable law) and (ii) all other information concerning its business,
properties and personnel as ICBC may reasonably request. Neither SIB nor any of
its Subsidiaries shall be required to provide access to or to disclose
information where such access or disclosure would jeopardize the attorney-client
privilege of the institution in possession or control of such information or
contravene any law, rule or regulation applicable to the institution in
possession or control of such information. The parties hereto will make
appropriate substitute disclosure arrangements under circumstances in which the
restrictions of the preceding sentence apply.
(b) ICBC shall hold all information furnished by SIB or any of its
Subsidiaries or representatives pursuant to Section 7.2(a) in confidence to the
extent required by, and in accordance with, the provisions of the
Confidentiality Agreement, dated October 3, 2003, between ICBC and SIB (the
"Confidentiality Agreement").
(c) No investigation by ICBC or its respective Representatives shall
constitute a waiver of or otherwise affect the representations, warranties,
covenants or agreements of SIB set forth herein.
7.3. Stockholder Approval. (a) SIB shall duly take all lawful action to
call, give notice of, convene and hold a meeting of its stockholders as promptly
as practicable following
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the date upon which the Form S-4 becomes effective (the "SIB Stockholders
Meeting") for the purpose of obtaining the Required SIB Vote and, except as
provided hereby, shall take all lawful action to solicit the adoption of this
Agreement by such stockholders. The Board of Directors of SIB shall recommend
adoption of this Agreement and the transactions contemplated hereby by the
stockholders of SIB (the "SIB Recommendation"); provided, however, that the
Board of Directors of SIB may (x) withdraw, modify, qualify in any manner
adverse to ICBC, condition or refuse to make such recommendation or (y) take any
other action or make any other public statement in connection with the SIB
Stockholders Meeting inconsistent with such recommendation (collectively, a
"Change in SIB Recommendation") if the Board of Directors of SIB determines, in
good faith after consultation with its outside financial and legal advisors,
that the failure to take such action would or could reasonably be expected to
breach its fiduciary obligations under applicable law. Notwithstanding anything
to the contrary herein, this Agreement shall be submitted to the stockholders of
SIB at the SIB Stockholders Meeting for the purpose of adopting this Agreement
and nothing contained herein shall be deemed to relieve SIB of such obligation.
(b) ICBC shall duly take all lawful action to call, give notice of,
convene and hold a meeting of its stockholders as promptly as practicable
following the date upon which the Form S-4 becomes effective (the "ICBC
Stockholders Meeting" and together with the SIB Stockholders Meeting, the
"Stockholders Meetings") for the purpose of obtaining the Required ICBC Vote
and, except as provided hereby, shall take all lawful action to solicit the
adoption of this Agreement by such stockholders. The Board of Directors of ICBC
shall recommend adoption of this Agreement and the transactions contemplated
hereby by the stockholders of ICBC (the "ICBC Recommendation"); provided,
however, that the Board of Directors of ICBC may (x) withdraw, modify, qualify
in any manner adverse to SIB, condition or refuse to make such recommendation or
(y) take any other action or make any other public statement in connection with
the ICBC Stockholders Meeting inconsistent with such recommendation
(collectively, a "Change in ICBC Recommendation" and together with a Change in
SIB Recommendation, a "Change in Recommendation") if the Board of Directors of
ICBC determines, in good faith after consultation with its outside financial and
legal advisors, that the failure to take such action would or could reasonably
be expected to breach its fiduciary obligations under applicable law.
Notwithstanding anything to the contrary herein, this Agreement shall be
submitted to the stockholders of ICBC at the ICBC Stockholders Meeting for the
purpose of adopting this Agreement and nothing contained herein shall be deemed
to relieve ICBC of such obligation.
(c) SIB and ICBC will each use their reasonable best efforts to
cause the SIB Stockholders Meeting and the ICBC Stockholders Meeting to be held
on the same date.
7.4. Acquisition Proposals. (a) ICBC and SIB each agrees that neither it
nor any of its Subsidiaries nor any of the officers and directors of it or its
Subsidiaries shall, and that it shall use its reasonable best efforts to cause
its and its Subsidiaries' employees, agents and representatives (including any
investment banker, attorney or accountant retained by it or any of its
Subsidiaries) not to, directly or indirectly, (i) initiate, solicit, encourage
or knowingly facilitate any inquiries or the making of any proposal or offer
with respect to, or a transaction to effect, a merger, reorganization, share
exchange, consolidation, business combination, recapitalization, liquidation,
dissolution or similar transaction involving it or any of its Significant
Subsidiaries, other than any such transaction permitted by Section 6.2 in the
case of
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SIB, and Section 6.3 in the case of ICBC, or any purchase or sale of 15% or more
of the consolidated assets (including stock of its Subsidiaries) of it and its
Subsidiaries, taken as a whole, or any purchase or sale of, or tender or
exchange offer for, its voting securities that, if consummated, would result in
any person (or the stockholders of such person) beneficially owning securities
representing 15% or more of its total voting power (or of the surviving parent
entity in such transaction) or any of its Significant Subsidiaries (any such
proposal, offer or transaction (other than a proposal or offer made by the other
party to this Agreement or an affiliate thereof) being hereinafter referred as
an "Acquisition Proposal" with respect to either ICBC or SIB), (ii) have any
discussions with or provide any confidential information or data to any person
relating to an Acquisition Proposal, or engage in any negotiations concerning an
Acquisition Proposal, or knowingly facilitate any effort or attempt to make or
implement an Acquisition Proposal, (iii) approve or recommend, or propose
publicly to approve or recommend, any Acquisition Proposal or (iv) approve or
recommend, or propose to approve or recommend, or execute or enter into, any
letter of intent, agreement in principle, merger agreement, asset purchase or
share exchange agreement, option agreement or other similar agreement related to
any Acquisition Proposal or propose or agree to do any of the foregoing.
Notwithstanding the foregoing provisions of this Section 7.4(a), in the event
that, prior to the date of its Stockholders Meeting, a party receives an
unsolicited bona fide Acquisition Proposal and its board of directors concludes
in good faith that such Acquisition Proposal constitutes or is reasonably likely
to result in a Superior Proposal, such party may, and may permit its
Subsidiaries and its and their representatives to, furnish or cause to be
furnished confidential information or data and participate in such negotiations
or discussions to the extent that its Board of Directors concludes in good faith
(based on the advice of its outside counsel) that failure to take such actions
would result in a violation of its fiduciary duties under applicable law;
provided that prior to providing (or causing to be provided) any confidential
information or data permitted to be provided pursuant to this sentence, such
party shall have entered into a confidentiality agreement with such third party
on terms no less favorable to such party than the Confidentiality Agreement. The
term "Significant Subsidiary" shall have the meaning ascribed thereto in Rule
1-02 of Regulation S-X.
(b) For purposes of this Agreement, "Superior Proposal" with respect
to either ICBC or SIB means a bona fide written Acquisition Proposal which the
Board of Directors of ICBC or SIB, as the case may be, concludes in good faith,
after consultation with its financial advisors and legal advisors, taking into
account all legal, financial, regulatory and other aspects of the proposal and
the person making the proposal (including any break-up fees, expense
reimbursement provisions and conditions to consummation), (i) is more favorable
to the stockholders of ICBC or SIB, as the case may be, from a financial point
of view, than the transactions contemplated by this Agreement and (ii) is fully
financed or reasonably capable of being fully financed and otherwise reasonably
capable of being completed on the terms proposed; provided that, for purposes of
this definition of "Superior Proposal," the term Acquisition Proposal shall have
the meaning assigned to such term in Section 7.4(a), except that the reference
to "15% or more" in the definition of "Acquisition Proposal" shall be deemed to
be a reference to "a majority" and "Acquisition Proposal" shall only be deemed
to refer to a transaction involving voting securities of ICBC or SIB, as the
case may be.
(c) Each party will immediately cease and cause to be terminated any
activities, discussions or negotiations conducted before the date of this
Agreement with any
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persons other than the other party with respect to any Acquisition Proposal and
will use its reasonable best efforts to enforce any confidentiality or similar
agreement relating to an Acquisition Proposal, including by requiring the other
parties thereto to promptly return or destroy any confidential information
previously furnished by such party thereunder. Each party will (i) promptly
(within one Business Day) following the receipt of any Acquisition Proposal, or
of any inquiry which could reasonably be expected to lead to an Acquisition
Proposal, advise the other party of the substance thereof (including the
identity of the person making such Acquisition Proposal), and will keep the
other party apprised of any related developments, discussions and negotiations
(including the terms and conditions of the Acquisition Proposal) on a current
basis and (ii) in the event of a person making a Superior Proposal, furnish the
other party a copy of the relevant proposed transaction agreements with such
person making such Superior Proposal and other material documents.
(d) Nothing contained in this Agreement shall prevent a party or its
board of directors from complying with Rule 14d-9 and Rule 14e-2 under the
Exchange Act with respect to an Acquisition Proposal, provided that such Rules
will in no way eliminate or modify the effect that any action pursuant to such
Rules would otherwise have under this Agreement.
7.5. Legal Conditions to Merger. (a) Subject to the terms and conditions
of this Agreement, each of ICBC and SIB shall, and shall cause their respective
Subsidiaries to, use their reasonable best efforts (i) to take, or cause to be
taken, all actions necessary, proper or advisable to comply promptly with all
legal requirements which may be imposed on such party or its Subsidiaries with
respect to the Merger or the Savings Bank Merger and, subject to the conditions
set forth in Article VIII hereof, to consummate the transactions contemplated by
this Agreement and (ii) to obtain (and to cooperate with the other party to
obtain) any consent, authorization, order or approval of, or any exemption by,
any Governmental Entity and any other third party which is required to be
obtained by SIB or ICBC or any of their respective Subsidiaries in connection
with the Merger and the other transactions contemplated by this Agreement;
provided, however, that no party shall be required to take any action pursuant
to the foregoing sentence if the taking of such action or the obtaining of such
consents, authorizations, orders, approvals or exemptions is reasonably likely
to result in a condition or restriction having an effect of the type referred to
in Section 8.2(c).
(b) Subject to the terms and conditions of this Agreement (including
the proviso in Section 7.5(a)), each of ICBC and SIB agrees to use reasonable
best efforts to take, or cause to be taken, all actions, and to do, or cause to
be done, all things necessary, proper or advisable to consummate and make
effective, as soon as practicable after the date of this Agreement, the
transactions contemplated hereby, including using reasonable best efforts to (i)
modify or amend any contracts, plans or arrangements to which ICBC or SIB is a
party (to the extent permitted by the terms thereof) if necessary in order to
satisfy the conditions to closing set forth in Article VIII hereof, (ii) lift or
rescind any injunction or restraining order or other order adversely affecting
the ability of the parties to consummate the transactions contemplated hereby,
and (iii) defend any litigation seeking to enjoin, prevent or delay the
consummation of the transactions contemplated hereby or seeking material
damages.
7.6. Affiliates. SIB shall use its reasonable best efforts to cause each
director, executive officer and other person who is an "affiliate" (for purposes
of Rule 145 under the Securities Act) of SIB to deliver to ICBC, as soon as
practicable after the date of this Agreement,
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and in any event prior to the date of the SIB Stockholders Meeting, a written
agreement, in form and substance reasonably satisfactory to ICBC, relating to
required transfer restrictions on the ICBC Common Stock received by them in the
Merger pursuant to Rule 145.
7.7. Employees; Employee Benefit Plans.
(a) As of or as soon as practicable following the Effective Time,
the employees of SIB and its Subsidiaries (the "SIB Employees") shall become
employees of ICBC or a Subsidiary thereof and shall be eligible to participate
in the ICBC Plans in which similarly situated employees of ICBC or Independence
Bank participate, to the same extent as similarly situated employees of ICBC or
Independence Bank (it being understood that inclusion of SIB Employees in such
employee benefit plans may occur at different times with respect to different
plans); provided, however, that (i) nothing contained herein shall require ICBC
or any of its Subsidiaries to make any grants to any SIB Employee under the ICBC
Stock Option Plans or the ICBC 1998 Recognition and Retention Plan and Trust
Agreement, it being understood that any such grants are completely
discretionary, (ii) nothing contained herein shall require ICBC or any of its
Subsidiaries to permit a SIB Employee who is receiving severance as a result of
the transactions contemplated by this Agreement pursuant to any employment,
severance, consulting or other compensation agreements, plans and arrangements
with SIB or any of its Subsidiaries to participate in any severance or change in
control of agreement or plan offered by ICBC or any of its Subsidiaries, (iii)
nothing contained herein shall require an SIB Employee's participation in the
ICBC defined benefit pension plan and (iv) nothing contained herein shall
require an SIB Employee's participation in the ICBC Employee Stock Ownership
Plan prior to January 1, 2005.
(b) With respect to each ICBC Plan, for purposes of determining
eligibility to participate, vesting, entitlement to benefits and vacation
entitlement (but not for participation or accrual of benefits under the ICBC
defined benefit pension plan), service with SIB or any Subsidiary shall be
treated as service with ICBC; provided, however, that such service shall not be
recognized to the extent that such recognition would result in a duplication of
benefits. Such service also shall apply for purposes of satisfying any waiting
periods, evidence of insurability requirements, or the application of any
pre-existing condition limitations with respect to any ICBC Plan. Each ICBC Plan
shall waive pre-existing condition limitations to the same extent waived under
the applicable SIB Plan. SIB Employees shall be given full credit for amounts
paid under a corresponding SIB or any Subsidiary benefit plan during the same
period for purposes of applying deductibles, co-payments and out-of-pocket
maximums as though such amounts had been paid in accordance with the terms and
conditions of the ICBC Plan during the applicable plan year.
(c) As of the Effective Time, ICBC shall assume and honor and shall
cause the appropriate Subsidiaries of ICBC to assume and honor in accordance
with their terms all employment, severance and other compensation agreements,
plans and arrangements existing immediately prior to the execution of this
Agreement which are between SIB or any of its Subsidiaries and any officer or
employee thereof and which have been disclosed in Section 4.11(a) of the SIB
Disclosure Schedule, including without limitation bank-owned life insurance,
other than those employment agreements covered by the Termination and Release
Agreements referenced in Section 7.7(d) hereof. ICBC acknowledges and agrees
that (i) the consummation of the Merger constitutes a "Change in Control" for
all purposes pursuant to such agreements, plans and arrangements, and (ii) that
the persons listed in Section 7.7(c) of the SIB
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Disclosure Schedule shall receive severance benefits as of the Effective Time
pursuant to the employment and severance agreements entered into by such persons
with SIB or its Subsidiaries, to the extent that such employment and severance
agreements have been disclosed to ICBC in the SIB Disclosure Schedule and
provided that such persons remain employed by SIB or its Subsidiaries as of the
Effective Time. To the extent that an officer or employee of SIB or any of its
Subsidiaries is entitled to the continued receipt of health insurance, life
insurance, automobile allowance or other similar fringe benefits pursuant to any
agreement set forth in Section 4.14(c) of the SIB Disclosure Schedule between
SIB or any of its Subsidiaries, on the one hand, and any officer or employee of
SIB or any of its Subsidiaries, on the other hand (the "Executive Agreements"),
and such officer or employee becomes a director, officer, employee or consultant
of ICBC or any of its Subsidiaries following the Effective Time and as a result
becomes entitled to receive the same fringe benefits in his or her capacity as a
director, officer, employee or consultant of ICBC or any of its Subsidiaries,
then the fringe benefits provided to such person shall be deemed to be provided
in connection with such person's service as a director, officer, employee or
consultant of ICBC or any of its Subsidiaries for so long as such person serves
in such capacity and shall be in lieu of, and not in addition to (and for the
sole purpose to avoid duplication of benefits), the same fringe benefits that
would have otherwise been provided pursuant to the Executive Agreement.
(d) Concurrently with the execution of this Agreement by the parties
hereto, (i) each of Xxxxx X. Xxxxxxx and Xxxxx X. Xxxxx and SIB, SIBT and ICBC
shall enter into a Termination and Release Agreement substantially in the form
of Exhibit A hereto, (ii) Xx. Xxxxxxx, ICBC and Independence Bank shall enter
into an employment agreement substantially in the form of Exhibit B hereto, and
(iii) Xx. Xxxxx, ICBC and Independence Bank shall enter into a noncompetition
agreement substantially in the form of Exhibit C hereto.
(e) With respect to the SIB Employee Stock Ownership Plan (the
"ESOP"), SIB shall:
(i) take any actions necessary to cause the ESOP to be terminated
and for the balances in all Participant Accounts (as defined in the ESOP)
to become fully vested and nonforfeitable as of the Effective Time;
(ii) cause the Trustee of the ESOP to sell a number of shares of
ICBC Common Stock received in the Merger as is necessary to obtain cash at
least equal to the remaining ESOP indebtedness;
(iii) cause the Trustee to use such cash to repay in full all such
outstanding ESOP indebtedness;
(iv) cause the shares of ICBC Common Stock and/or any cash remaining
in the suspense account maintained under the ESOP, after giving effect to
the repayment of ESOP indebtedness referred to in subparagraph (iii)
above, to be allocated to the accounts of all ESOP participants who have
account balances as of the beginning of the ESOP plan year in which the
ESOP is terminated, in accordance with the applicable provisions of the
ESOP;
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(v) cause the account balances of all ESOP participants to be
distributed in a lump sum (or transferred in accordance with Section
401(a)(31) of the Code) as soon as practicable following the later of (A)
the Effective Time or (B) the date of receipt of a favorable determination
letter from the IRS regarding the qualified status of the ESOP upon its
termination; and
(vi) adopt amendment(s) to the ESOP, in form and substance
reasonably satisfactory to ICBC, as may be requested by the IRS in
connection with the request for a determination letter.
(f) As soon as practicable after the date hereof, SIB shall file a
request for a determination letter from the IRS regarding the continued
qualified status of the ESOP upon its termination. Prior to the Effective Time,
SIB and, following the Effective Time, ICBC shall use their respective
reasonable best efforts to obtain such favorable determination letter
(including, but not limited to, making such changes to the ESOP and the proposed
allocation described herein as may be requested by the IRS as a condition to its
issuance of a favorable determination letter). Neither SIB nor ICBC shall
implement any of the actions described in Sections 7.7(d)(iv) and (v) above
until receipt of such favorable determination letter.
(g) As of the Effective Time, each SIB Employee who is a participant
in the SIB 401(k) Plan (the "SIB 401(k) Plan") shall become fully vested in his
or her employer matching account balance in the SIB 401(k) Plan and the SIB
401(k) Plan will either (x) be merged into the ICBC 401(k) Plan (the "ICBC
401(k) Plan"), effective as of a date following the Effective Time, as selected
by ICBC, or (y) if so elected by ICBC, terminated immediately prior to, on or
after the Effective Time. The determination as to whether the SIB 401(k) Plan
shall be terminated or merged into the ICBC 401(k) Plan shall be made by ICBC.
Effective as of the date of the merger of the SIB 401(k) Plan into the ICBC
401(k) Plan, if applicable, or the termination of the SIB 401(k) Plan (or the
Effective Time, if subsequent to such termination), if applicable, SIB employees
who are then participating in the SIB 401(k) Plan shall become participants in
the ICBC 401(k) Plan.
(h) As soon as practicable after the execution of this Agreement,
SIB will cooperate to cause the SIB Recognition Plan to be amended (including,
without limitation, amending the SIB Recognition Plan to remove any provision
that prohibits the termination of such plan prior to awarding all unallocated
shares under such plan) and other necessary actions taken, in a manner
reasonably acceptable to ICBC, to provide that (i) the SIB Recognition Plan will
terminate upon the Effective Time and (ii) all unallocated shares of SIB Common
Stock held in the trust under the SIB Recognition Plan will be cancelled upon
the Effective Time and all assets relating to such unallocated shares will be
distributed to SIB; provided, however, that any distribution of shares under the
SIB Recognition Plan shall be effected in accordance with the requirements, if
any, of federal and state securities laws and regulations. No action shall be
taken that would adversely affect the rights of plan participants who hold
outstanding grants or awards of shares of SIB Common Stock, whether before or
after the Effective Time. No further grants or awards shall be made by SIB or
its Subsidiaries under the SIB Recognition Plan following the date of this
Agreement.
(i) ICBC agrees to honor the terms of each of the SIB SERPs which
have been disclosed in Section 4.11 of the SIB Disclosure Schedule.
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(j) Any person who is serving as an employee of either SIB or any
Subsidiary thereof as of the date of this Agreement (other than those employees
covered by either a written employment or severance agreement) whose employment
is discontinued by ICBC or any of its Subsidiaries within one year after the
Effective Time (unless termination of such employment is for Cause (as defined
below)) shall be entitled to a severance payment from ICBC or its Subsidiary
equal in amount to two week's base pay for each full year such employee was
employed by SIB or a SIB Subsidiary or any successor or predecessor thereto,
subject to a minimum of two weeks' severance and a maximum of 52 weeks'
severance; provided that the benefits payable pursuant to this Section 7.7(j)
shall be in lieu of, and not in addition to, any amounts that may have otherwise
been payable pursuant to SIB's written severance policy described in Section
4.11(a) of the SIB Disclosure Schedule and subject to the terms and conditions
set forth therein. For purposes of this Section 7.7(j), "Cause" shall mean
termination because of the employee's personal dishonesty, incompetence, willful
misconduct, breach of fiduciary duty involving personal profit, intentional
failure to perform stated duties or willful violation of any law, rule, or
regulation (other than traffic violations or similar offenses).
(k) Section 7.7(k) of the SIB Disclosure Schedule sets forth the
accrued but unpaid vacation pay for employees of SIB and its Subsidiaries as of
September 30, 2003. If the employment of any employee of SIB or any of its
Subsidiaries identified on Section 7.7(k) of the SIB Disclosure Schedule is
terminated within twelve (12) months following the Effective Time, then any
vacation pay accrued and expensed (consistent with the financial statements
provided by SIB to ICBC) based on such employee's employment from January 1,
2004 to the Effective Time shall be paid to the employee to the extent not used
prior to the termination of employment.
(l) Notwithstanding anything to the contrary contained herein,
pursuant to terms and conditions mutually agreed to by ICBC and SIB after the
date hereof, SIB may pay cash retention bonuses to employees of SIB and its
Subsidiaries who are selected by the chief executive officer of SIB with the
prior approval of ICBC, such approval not to be unreasonably withheld, in order
to help retain key employees (who are not otherwise covered by an employment or
similar contract) through the Effective Time and for a specified period
thereafter, provided that the aggregate amount of such retention bonuses shall
not exceed $800,000.
(m) To the extent permitted by applicable law, ICBC shall assume and
continue to maintain the split dollar life insurance policies listed in Section
7.7(m) of the SIB Disclosure Schedule in accordance with the terms of such
policies; provided, however, that ICBC shall not unreasonably terminate such
policies (it being understood, for the sake of clarity, that in the event that
the tax advantages to ICBC of maintaining such policies diminish due to a change
in the applicable tax laws or otherwise, any termination of such policies by
ICBC shall be deemed reasonable). This Section 7.7(m) is intended to be for the
benefit of, and shall be enforceable by, the named insureds in such policies.
7.8. Indemnification; Directors' and Officers' Insurance. (a) From and
after the Effective Time, in the event of any threatened or actual claim,
action, suit, proceeding or investigation, whether civil, criminal or
administrative, in which any person who is now, or has been at any time prior to
the date of this Agreement, or who becomes prior to the Effective Time, a
director or officer of SIB or any of its Subsidiaries (the "Indemnified
Parties") is, or is threatened to be, made a party based in whole or in part on,
or arising in whole or in part out of, or pertaining to (i) the fact that he is
or was a director or officer of SIB, any of its Subsidiaries or
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any of their respective predecessors or was prior to the Effective Time serving
at the request of any such party as a director, officer, employee, fiduciary or
agent of another corporation, partnership, trust or other enterprise (a list of
which with respect to the directors and officers of SIB or any of its
Subsidiaries as of the date of this Agreement is set forth in Section 7.8(a) of
the SIB Disclosure Schedule) or (ii) this Agreement, or any of the transactions
contemplated hereby and all actions taken by an Indemnified Party in connection
herewith, whether in any case asserted or arising before or after the Effective
Time, ICBC shall indemnify and hold harmless, as and to the fullest extent
provided in the certificate of incorporation and bylaws of SIB as in effect on
the date of this Agreement, each such Indemnified Party against any losses,
claims, damages, liabilities, costs, expenses (including reasonable attorneys'
fees and expenses in advance of the final disposition of any claim, suit,
proceeding or investigation to each Indemnified Party to the fullest extent
permitted by law upon receipt of an undertaking, to the extent required by the
DGCL, from such Indemnified Party to repay such advanced expenses if it is
determined by a final and nonappealable judgment of a court of competent
jurisdiction that such Indemnified Party was not entitled to indemnification
hereunder), judgments, fines and amounts paid in settlement in connection with
any such threatened or actual claim, action, suit, proceeding or investigation.
Any Indemnified Party wishing to claim indemnification under this Section 7.8,
upon learning of any such claim, action, suit, proceeding or investigation,
shall notify ICBC thereof, provided that the failure to so notify shall not
affect the obligations of ICBC under this Section 7.8 except (and only) to the
extent such failure to notify materially prejudices ICBC. In the event of any
such threatened or actual claim, action, suit, proceeding or investigation
(whether asserted or arising before or after the Effective Time), the
Indemnified Parties may retain counsel reasonably satisfactory to them after
consultation with ICBC; provided, however, that (A) ICBC shall have the right to
assume the defense thereof and upon such assumption ICBC shall not be liable to
any Indemnified Party for any legal expenses of other counsel or any other
expenses subsequently incurred by any Indemnified Party in connection with the
defense thereof, except that if (x) ICBC elects not to assume such defense or
(y) counsel for the Indemnified Parties reasonably advises that there are issues
which raise conflicts of interest between ICBC and the Indemnified Parties, then
the Indemnified Parties may retain counsel reasonably satisfactory to them after
consultation with ICBC, and ICBC shall pay the reasonable fees and expenses of
such counsel for the Indemnified Parties, (B) ICBC shall in all cases be
obligated pursuant to this paragraph to pay for only one firm of counsel (in
addition to local counsel) for any action or group of related actions for all
Indemnified Parties, (C) ICBC shall not be liable for any settlement effected
without its prior written consent (which consent shall not be unreasonably
withheld) and (D) ICBC shall have no obligation hereunder to any Indemnified
Party when and if a court of competent jurisdiction shall ultimately determine,
and such determination shall have become final and nonappealable, that
indemnification of such Indemnified Party in the manner contemplated hereby is
prohibited by applicable law or regulation.
(b) Nothing contained in Section 7.8(a) or any other provision of
this Agreement shall limit any right to indemnification which any current or
former director, officer, employee or agent of SIB may have under applicable law
or regulation or the SIB's Certificate of Incorporation, Bylaws or the
equivalent documents of any Subsidiary of SIB, as applicable, in each case as in
effect on the date hereof, which ICBC agrees to honor in accordance with their
terms. Without limiting the foregoing, ICBC also agrees that the limitations on
liability existing in favor of the Indemnified Parties in SIB's Certificate of
Incorporation or the equivalent
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documents of any SIB Subsidiary as in effect on the date hereof with respect to
matters occurring prior to the Effective Time shall survive the Merger and shall
continue in full force and effect from and after the Effective Time.
(c) ICBC shall use its reasonable best efforts to cause the persons
serving as officers and directors of SIB immediately prior to the Effective Time
to be covered for a period of six (6) years from the Closing Date by the
directors' and officers' liability insurance policy or policies maintained by
ICBC (provided that ICBC's policy or policies provide at least the same coverage
and amounts containing terms and conditions which are in the aggregate not
materially less advantageous to such directors and officers of SIB than the
terms and conditions of the existing directors' and officers' liability
insurance policy of SIB, and provided further that in no event will ICBC be
required to expend in any one year an amount in excess of 200% of the annual
premiums currently paid by SIB for the insurance covering the officers and
directors of SIB (the "Insurance Amount"), and provided, further, that if ICBC
is unable to maintain or obtain the insurance called for by this Section 7.8(c)
as a result of the preceding proviso, ICBC shall use its reasonable best efforts
to obtain as much comparable insurance as available for the Insurance Amount)
with respect to acts or omissions occurring prior to the Effective Time which
were committed by such officers and directors in their capacity as such.
(d) The provisions of this Section 7.8 are intended to be for the
benefit of, and shall be enforceable by, each Indemnified Party and his or her
heirs and representatives.
(e) If ICBC or any of its successors or assigns shall consolidate
with or merge into any other entity and shall not be the continuing or surviving
entity of such consolidation or merger shall transfer all or substantially all
of its assets to any other entity, then and in each case, proper provision shall
be made so that the successors and assigns of ICBC shall assume the obligations
set forth in this Section 7.8.
7.9. Advice of Changes. ICBC and SIB shall promptly advise the other party
of any change or event which, individually or in the aggregate with other such
changes or events, has or would reasonably be expected to have a Material
Adverse Effect on it or which it believes would or would be reasonably likely to
cause or constitute a material breach of any of its representations, warranties
or covenants contained herein.
7.10. Subsequent Interim and Annual Financial Statements. As soon as
reasonably practicable after they become available, but in no event more than 30
days, after the end of each calendar month ending after the date of this
Agreement, each party hereto shall furnish to the other party (i) consolidated
and consolidating financial statements (including balance sheet, statement of
operations and stockholders' equity) of SIB and each of its Subsidiaries or of
ICBC and each of its Subsidiaries, as the case may be, as of and for such month
then ended and (ii) any internal management reports relating to the foregoing.
All information furnished by a party hereto pursuant to this Section 7.10 shall
be held in confidence by the other party to the extent required by, and in
accordance with, the provisions of the Confidentiality Agreements.
7.11. Reorganization; Certain Modifications. (a) Neither ICBC nor SIB
shall take, or cause or permit any of its Subsidiaries to take, any action that
could reasonably be expected to prevent the Merger or the Savings Bank Merger
from qualifying as a reorganization within the meaning of Section 368(a) of the
Code.
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(b) At or before the Effective Time, upon the request of ICBC, SIB
shall, consistent with GAAP, modify and change its employee benefits, loan,
litigation and real estate valuation policies and practices so as to be applied
consistently on a mutually satisfactory basis with those of ICBC; provided,
however, that SIB shall not be required to take such action (x) more than five
Business Days prior to the Effective Time, and (y) unless ICBC agrees in writing
that all conditions to Closing set forth in Article VIII have been satisfied or
waived (other than those conditions relating to delivery of documents on the
Closing Date; and provided further that no party's representations, warranties
and covenants contained in this Agreement shall be deemed to be untrue or
breached in any respect for any purpose as a consequence of any such actions
which may be undertaken on account of this Section 7.11(b)
7.12. Exemption From Liability Under Section 16(b). Assuming that SIB
delivers to ICBC the Section 16 Information (as defined below) reasonably in
advance of the Effective Time, the Board of Directors of ICBC, or a committee of
Non-Employee Directors thereof (as such term is defined for purposes of Rule
16b-3(d) under the Exchange Act), shall reasonably promptly thereafter and in
any event prior to the Effective Time adopt a resolution providing that the
receipt by the SIB Insiders (as defined below) of ICBC Common Stock in exchange
for shares of SIB Common Stock, and of options to purchase ICBC Common Stock
upon conversion of SIB Options, in each case pursuant to the transactions
contemplated hereby and to the extent such securities are listed in the Section
16 Information provided by SIB to ICBC prior to the Effective Time, are intended
to be exempt from liability pursuant to Section 16(b) under the Exchange Act
such that any such receipt shall be so exempt. "Section 16 Information" shall
mean information accurate in all respects regarding the SIB Insiders, the number
of shares of SIB Common Stock held by each such SIB Insider and the number and
description of the SIB Options held by each such SIB Insider. "SIB Insiders"
shall mean those officers and directors of SIB who are subject to the reporting
requirements of Section 16(a) of the Exchange Act and who are listed in the
Section 16 Information.
7.13. Stock Exchange Listing. ICBC shall use its reasonable best efforts
to cause the shares of ICBC Common Stock to be issued in the Merger to be
approved for listing on the Nasdaq National Market, subject to official notice
of issuance, prior to the Effective Time.
7.14. Board of Directors and Officers of Surviving Company. Following the
date of this Agreement, ICBC shall take all action necessary to cause the number
of directors that will comprise the full Board of Directors of the Surviving
Company following the Effective Time to be sixteen, consisting of (i) eleven
members from the current Board of Directors of ICBC, and (ii) the current Chief
Executive Officer of SIB and four other members of the Board of Directors of SIB
selected by SIB and reasonably acceptable to ICBC. The directors from the Board
of Directors of SIB shall be allocated among the three classes of directors of
the Board of Directors of ICBC as ratably as possible. Xx. Xxxxxxx shall be
appointed as Vice Chairman of the Board of Directors of both ICBC and
Independence Bank for a period of three years following the Effective Time. At
the end of the initial term for each of the five directors selected by SIB, the
director shall be re-nominated for an additional three-year term, subject to the
fiduciary duties of the Board of Directors of ICBC and such directors meeting
the eligibility requirements set forth in ICBC's bylaws. In addition, the five
directors selected by SIB shall have proportional representation (or
representation as close to proportional as possible) on the major committees of
the Board of Directors of ICBC for a period of three years following the
Effective Time. ICBC's Board of Directors shall also take all necessary action
following the date of this Agreement to
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cause the persons specified in Section 7.14 of the SIB Disclosure Schedule to be
appointed to the offices of the Surviving Company specified in such Schedule.
7.15. Advisory Board. ICBC shall, as of the Effective Time, invite all of
the members of SIB's Board of Directors as of the date of this Agreement, other
than those members selected to be directors of ICBC, who are willing to serve to
be appointed as members of ICBC's advisory board with respect to deposit taking
and mortgage lending activities in SIBT's former primary market areas (the
"Advisory Board"). The members of the Advisory Board shall be elected to a term
of three years beginning on the Closing Date and non-employee members shall
receive an annual retainer fee for each year of such service of $62,500, which
shall be payable in monthly installments or in one lump sum at any time in
advance at the option of ICBC. Xx. Xxxxx shall be the chairman of the Advisory
Board for three years following the Effective Time.
7.16. Outplacement Services. ICBC agrees to provide out-placement services
to those officers of SIB or SIBT with a title of Vice President or higher whose
employment is terminated for other than Cause (as defined in Section 7.7(j)
hereof) within one year following the Effective Time. The nature of the
out-placement services shall be mutually acceptable to ICBC and SIB and shall be
determined in good faith.
7.17. Division. For at least three years subsequent to the Savings Bank
Merger, the offices of (i) SIB immediately prior to the Effective Time and (ii)
the offices of ICBC, in each case which are located in Staten Island, shall be
operated as the "SI Bank & Trust Division of Independence Community Bank."
ARTICLE VIII
CONDITIONS PRECEDENT
8.1. Conditions to Each Party's Obligation to Effect the Merger. The
respective obligations of each party to effect the Merger shall be subject to
the satisfaction at or prior to the Effective Time of the following conditions:
(a) Stockholder Approvals. SIB shall have obtained the Required SIB
Vote in connection with the adoption of this Agreement and ICBC shall have
obtained the Required ICBC Vote in connection with the adoption of this
Agreement.
(b) Stock Exchange Listing. The shares of ICBC Common Stock to be
issued to the holders of SIB Common Stock upon consummation of the Merger shall
have been authorized for listing on the Nasdaq National Market, subject to
official notice of issuance.
(c) Regulatory Approvals. All regulatory approvals required to
consummate the transactions contemplated hereby (including the approval of the
Merger by the OTS under HOLA; the approval of the Savings Bank Merger by the
FDIC under the Bank Merger Act and by the Superintendent under the New York
banking law; and approval of the dividend referred to in Section 5.4 by the
Superintendent and the OTS) shall have been obtained and shall remain in full
force and effect and all statutory waiting periods in respect thereof shall have
expired or been terminated (all such approvals and the expiration or termination
of all such waiting periods being referred to herein as the "Requisite
Xxxxxxxxxx Xxxxxxxxx").
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(x) X-0 Effectiveness. The S-4 shall have become effective under the
Securities Act, no stop order suspending the effectiveness of the S-4 shall have
been issued and no proceedings for that purpose shall have been initiated or
threatened by the SEC.
(e) No Injunctions or Restraints; Illegality. No order, injunction
or decree issued by any court or agency of competent jurisdiction or other legal
restraint or prohibition (an "Injunction") preventing the consummation of the
Merger or any of the other transactions contemplated by this Agreement shall be
in effect. No statute, rule, regulation, order, injunction or decree shall have
been enacted, entered, promulgated or enforced by any Governmental Entity which
prohibits or makes illegal the consummation of the Merger.
8.2. Conditions to Obligations of ICBC. The obligations of ICBC to effect
the Merger are also subject to the satisfaction or waiver by ICBC at or prior to
the Effective Time of the following conditions:
(a) Representations and Warranties. The representations and
warranties of SIB set forth in this Agreement shall be true and correct in all
respects as of the date of this Agreement and (except to the extent such
representations and warranties speak as of an earlier date) as of the Closing
Date as though made on and as of the Closing Date; provided, however, that for
purposes of determining the satisfaction of this condition, no effect shall be
given to any exception in such representations and warranties (other than the
representation and warranty set forth in Section 4.8(i)) relating to materiality
or a Material Adverse Effect, and provided, further, that, for purposes of this
condition, such representations and warranties (other than those set forth in
Section 4.2(a), which shall be true and correct in all material respects, and
Section 4.8(i)) shall be deemed to be true and correct in all respects unless
the failure or failures of such representations and warranties to be so true and
correct, individually or in the aggregate, results or would reasonably be
expected to result in a Material Adverse Effect on SIB. ICBC shall have received
a certificate signed on behalf of SIB by the Chief Executive Officer and Chief
Financial Officer of SIB to the foregoing effect.
(b) Performance of Obligations of SIB. SIB shall have performed in
all material respects all obligations required to be performed by it under this
Agreement at or prior to the Closing Date, and ICBC shall have received a
certificate signed on behalf of SIB by the Chief Executive Officer and the Chief
Financial Officer of SIB to such effect.
(c) Burdensome Condition. There shall not be any action taken, or
any statute, rule, regulation or order enacted, entered, enforced or deemed
applicable to the transactions contemplated by this Agreement, by any
Governmental Entity, in connection with the grant of a Requisite Regulatory
Approval or otherwise, which imposes any restriction or condition which would be
reasonably likely to have or result in a Material Adverse Effect on the
Surviving Company.
(d) Tax Opinion. ICBC shall have received an opinion of Xxxxxxx
Xxxxxxx & Xxxxxxxx LLP, counsel to ICBC, dated the Closing Date, to the effect
that, on the basis of facts, representations, and assumptions set forth in such
opinion, the Merger constitutes a "reorganization" within the meaning of Section
368(a) of the Code. In rendering its opinion, Xxxxxxx Xxxxxxx & Xxxxxxxx LLP may
require and rely upon written representations from SIB, ICBC and others.
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8.3. Conditions To Obligations Of SIB. The obligation of SIB to effect the
Merger is also subject to the satisfaction or waiver by SIB at or prior to the
Effective Time of the following conditions:
(a) Representations and Warranties. The representations and
warranties of ICBC set forth in this Agreement shall be true and correct in all
respects as of the date of this Agreement and (except to the extent such
representations and warranties speak as of an earlier date) as of the Closing
Date as though made on and as of the Closing Date; provided, however, that for
purposes of determining the satisfaction of this condition, no effect shall be
given to any exception in such representations and warranties (other than the
representation and warranty set forth in Section 5.8) relating to materiality or
a Material Adverse Effect, and provided, further, that, for purposes of this
condition, such representations and warranties (other than those set forth in
Section 5.2, which shall be true and correct in all material respects, and
Section 5.8) shall be deemed to be true and correct in all respects unless the
failure or failures of such representations and warranties to be so true and
correct, individually or in the aggregate, results or would reasonably be
expected to result in a Material Adverse Effect on ICBC. SIB shall have received
a certificate signed on behalf of ICBC by the Chief Executive Officer and the
Chief Financial Officer of ICBC to the foregoing effect.
(b) Performance of Obligations of ICBC. ICBC shall have performed in
all material respects all obligations required to be performed by it under this
Agreement at or prior to the Closing Date, and SIB shall have received a
certificate signed on behalf of ICBC by the Chief Executive Officer and the
Chief Financial Officer of ICBC to such effect.
(c) Tax Opinion. SIB shall have received an opinion of Elias, Matz,
Xxxxxxx & Xxxxxxx L.L.P., counsel to SIB, dated the Closing Date, to the effect
that, on the basis of facts, representations and assumptions set forth in such
opinion, the Merger constitutes a "reorganization" within the meaning of Section
368(a) of the Code. In rendering its opinion, such counsel may require and rely
upon representations contained in letters from SIB, ICBC and others.
ARTICLE IX
TERMINATION AND AMENDMENT
9.1. Termination. This Agreement may be terminated at any time prior to
the Effective Time:
(a) by mutual consent of ICBC and SIB in a written instrument, if
the Board of Directors of each of ICBC and SIB so determines;
(b) by either ICBC or SIB if (i) any Governmental Entity which must
grant a Requisite Regulatory Approval has denied approval of the Merger and such
denial has become final and nonappealable or (ii) any Governmental Entity of
competent jurisdiction shall have issued a final nonappealable order enjoining
or otherwise prohibiting the consummation of the transactions contemplated by
this Agreement;
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(c) by either ICBC or SIB if the Effective Time shall not have
occurred on or before June 30, 2004, unless the failure of the Effective Time to
occur by such date shall be due to the failure of the party seeking to terminate
this Agreement to perform or observe the covenants and agreements of such party
set forth herein;
(d) by either ICBC or SIB (provided that the terminating party is
not then in material breach of any representation, warranty, covenant or other
agreement contained herein) if the other party shall have breached (i) any of
the covenants or agreements made by such other party herein or (ii) any of the
representations or warranties made by such other party herein, and in either
case, such breach (x) is not cured within 30 days following written notice to
the party committing such breach, or which breach, by its nature, cannot be
cured prior to the Closing and (y) would entitle the non-breaching party not to
consummate the transactions contemplated hereby under Article VIII hereof;
(e) by either ICBC or SIB if either the Required SIB Vote or the
Required ICBC Vote shall not have been obtained at the applicable Stockholders
Meeting or at any adjournment or postponement thereof;
(f) by ICBC, if (i) the Board of Directors of SIB shall have failed
to recommend adoption of this Agreement by the stockholders of SIB or shall have
effected a Change in SIB Recommendation (or shall have resolved to do so),
whether or not permitted by this Agreement, (ii) SIB shall have breached the
terms of Section 7.4 hereof in any respect materially adverse to ICBC, or (iii)
SIB shall have materially breached its obligations under Section 7.3(a) by
failing to call, give notice of, convene and hold the SIB Stockholders Meeting
in accordance with Section 7.3(a);
(g) by SIB, if (i) the Board of Directors of ICBC shall have failed
to recommend adoption of this Agreement by the stockholders of ICBC or shall
have effected a Change in ICBC Board Recommendation (or shall have resolved to
do so), whether or not permitted by this Agreement, (ii) ICBC shall have
breached the terms of Section 7.4 hereof in any respect materially adverse to
SIB, or (iii) SIB shall have materially breached its obligations under Section
7.3(b) by failing to call, give notice of, convene and hold the ICBC
Stockholders Meeting in accordance with Section 7.3(b);
(h) by ICBC if a tender offer or exchange offer for 25% or more of
the outstanding shares of SIB Common Stock is commenced (other than by ICBC or a
Subsidiary thereof), and the Board of Directors of SIB recommends that the
stockholders of SIB tender their shares in such tender or exchange offer or
otherwise fails to recommend that such stockholders reject such tender offer or
exchange offer within the 10 business day period specified in Rule 14e-2(a)
under the Exchange Act; or
(i) by SIB if a tender offer or exchange offer for 25% or more of
the outstanding shares of ICBC Common Stock is commenced (other than by SIB or a
Subsidiary thereof), and the Board of Directors of ICBC recommends that the
stockholders of ICBC tender their shares in such tender or exchange offer or
otherwise fails to recommend that such stockholders reject such tender offer or
exchange offer within the 10 business day period specified in Rule 14e-2(a)
under the Exchange Act.
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9.2. Effect of Termination.
(a) In the event of termination of this Agreement by either ICBC or
SIB as provided in Section 9.1, this Agreement shall forthwith become void and
have no effect, and none of ICBC, SIB, any of their respective Subsidiaries or
any of the officers or directors of any of them shall have any liability of any
nature whatsoever hereunder, or in connection with the transactions contemplated
hereby, except that (i) Sections 7.2(b), 9.2, and 10.2 shall survive any
termination of this Agreement and (ii) notwithstanding anything to the contrary
contained in this Agreement, neither ICBC nor SIB shall be relieved or released
from any liabilities or damages arising out of its willful breach of any
provision of this Agreement.
(b) SIB shall pay ICBC, by wire transfer of immediately available
funds, the sum of $58,960,000 (the "Termination Fee") if this Agreement is
terminated as follows:
(i) if this Agreement is terminated by ICBC pursuant to Sections
9.1(f) or 9.1(h), then SIB shall pay the entire Termination Fee on the
second Business Day following such termination; and
(ii) if this Agreement is terminated by (A) ICBC pursuant to Section
9.1(d), (B) by either ICBC or SIB pursuant to Section 9.1(e), due to a
failure to receive the Required SIB Vote or (C) by either ICBC or SIB
pursuant to Section 9.1(c) and at the time of such termination, no vote of
the stockholders of SIB contemplated by this Agreement at the SIB
Stockholders Meeting shall have occurred, and in any such case an
Acquisition Proposal with respect to SIB shall have been publicly
announced or otherwise communicated or made known to the senior management
or Board of Directors of SIB (or any person shall have publicly announced,
communicated or made known an intention, whether or not conditional, to
make an Acquisition Proposal) at any time after the date of this Agreement
and on or prior to the date of the SIB Stockholders Meeting, in the case
of clause (B), or the date of termination, in the case of clauses (A) or
(C), then SIB shall pay (x) an amount equal to 1/3 of the Termination Fee
on the second Business Day following such termination, and (y) if within
12 months after such termination SIB or any of its Subsidiaries enters
into a definitive agreement with respect to, or consummates, an
Acquisition Proposal, then SIB shall pay the remainder of the Termination
Fee on the date of such execution or consummation.
(c) ICBC shall pay SIB, by wire transfer of immediately available
funds, the Termination Fee if this Agreement is terminated as follows:
(i) if this Agreement is terminated by SIB pursuant to Sections
9.1(g) or 9.1(i), then ICBC shall pay the entire Termination Fee on the
second Business Day following such termination; and
(ii) if this Agreement is terminated by (A) SIB pursuant to Section
9.1(d), (B) by either ICBC or SIB pursuant to Section 9.1(e), due to a
failure to receive the Required ICBC Vote or (C) by either ICBC or SIB
pursuant to Section 9.1(c) and at the time of such termination, no vote of
the stockholders of ICBC contemplated by this Agreement at the ICBC
Stockholders Meeting shall have occurred, and in any such case an
Acquisition Proposal with respect to ICBC shall have been publicly
announced or otherwise
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communicated or made known to the senior management or Board of Directors
of ICBC (or any person shall have publicly announced, communicated or made
known an intention, whether or not conditional, to make an Acquisition
Proposal) at any time after the date of this Agreement and on or prior to
the date of the ICBC Stockholders Meeting, in the case of clause (B), or
the date of termination, in the case of clauses (A) or (C), then ICBC
shall pay (x) an amount equal to 1/3 of the Termination Fee on the second
Business Day following such termination, and (y) if within 12 months after
such termination ICBC or any of its Subsidiaries enters into a definitive
agreement with respect to, or consummates, an Acquisition Proposal, then
ICBC shall pay the remainder of the Termination Fee on the date of such
execution or consummation.
(d) Any Termination Fee or portion thereof that becomes payable
pursuant to Section 9.2(b) or (c) shall be paid by wire transfer of immediately
available funds to an account designated by the party entitled to receipt
thereof.
(e) SIB and ICBC agree that the agreement contained in paragraphs
(b) and (c) above is an integral part of the transactions contemplated by this
Agreement, that without such agreement by each party the other party would not
have entered into this Agreement, and that such amounts do not constitute a
penalty. If a party fails to pay the amounts due under paragraph (b) or (c)
above within the time periods specified in such paragraphs (b) or (c), such
party shall pay the costs and expenses (including reasonable legal fees and
expenses) incurred by the other party in connection with any action, including
the filing of any lawsuit, taken to collect payment of such amounts, together
with interest on the amount of any such unpaid amounts at the prime lending rate
prevailing during such period as published in The Wall Street Journal,
calculated on a daily basis from the date such amounts were required to be paid
until the date of actual payment.
9.3. Amendment. Subject to compliance with applicable law and the
provisions of Section 2.7 hereof, this Agreement may be amended by the parties
hereto, by action taken or authorized by their respective Boards of Directors,
at any time before or after approval of the matters presented in connection with
the Merger by the stockholders of SIB or of ICBC; provided, however, that after
any such approval, no amendment shall be made which by law requires further
approval by such stockholders without such further approval. This Agreement may
not be amended except by an instrument in writing signed on behalf of each of
the parties hereto.
9.4. Extension; Waiver. At any time prior to the Effective Time, the
parties hereto may, to the extent legally allowed, (a) extend the time for the
performance of any of the obligations or other acts of the other parties hereto,
(b) waive any inaccuracies in the representations and warranties contained
herein or in any document delivered pursuant hereto and (c) waive compliance
with any of the agreements or conditions contained herein. Any agreement on the
part of a party hereto to any such extension or waiver shall be valid only if
set forth in a written instrument signed on behalf of such party, but such
extension or waiver or failure to insist on strict compliance with an
obligation, covenant, agreement or condition shall not operate as a waiver of,
or estoppel with respect to, any subsequent or other failure.
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ARTICLE X
GENERAL PROVISIONS
10.1. Nonsurvival of Representations, Warranties and Agreements. None of
the representations, warranties, covenants and agreements in this Agreement or
in any instrument delivered pursuant to this Agreement shall survive the
Effective Time, except for those covenants and agreements contained herein and
therein which by their terms apply or are to be performed in whole or in part
after the Effective Time.
10.2. Expenses. Except as provided in Section 9.2 hereof, all costs and
expenses incurred in connection with this Agreement and the transactions
contemplated hereby shall be paid by the party incurring such expense.
10.3. Notices. All notices and other communications hereunder shall be in
writing and shall be deemed given if delivered personally, telecopied (upon
telephonic confirmation of receipt), on the first Business Day following the
date of dispatch if delivered by a recognized next day courier service, or on
the third Business Day following the date of mailing if delivered by registered
or certified mail, return receipt requested, postage prepaid. All notices
hereunder shall be delivered as set forth below, or pursuant to such other
instructions as may be designated in writing by the party to receive such
notice.
(a) if to ICBC, to:
Independence Community Bank Corp.
000 Xxxxxxxx Xxxxxx
Xxxxxxxx, Xxx Xxxx 00000
Fax: (000) 000-0000
Attn: Chief Executive Officer
with a copy to:
Xxxxxxx Xxxxxxx & Xxxxxxxx LLP
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Fax: (000) 000-0000
Attn: Xxx Xxxxxxxx
Xxxxxxx Xxxxxxx
(b) if to SIB, to:
Staten Island Bancorp, Inc.
0000 Xxxxxxxx Xxxxxx
Xxxxxx Xxxxxx, Xxx Xxxx 00000
Fax: (000) 000-0000
Attn: Chief Executive Officer
with a copy to:
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Elias, Matz, Xxxxxxx & Xxxxxxx L.L.P.
000 00xx Xxxxxx, X.X.
Xxxxxxxxxx X.X. 00000
Fax: (000) 000-0000
Attn: Xxxxxxx X. Xxxxxxx
10.4. Interpretation. The words "hereof," "herein" and "hereunder" and
words of similar import when used in this Agreement shall refer to this
Agreement as a whole and not to any particular provision of this Agreement, and
Section references are to this Agreement unless otherwise specified. Whenever
the words "include," "includes" or "including" are used in this Agreement, they
shall be deemed to be followed by the words "without limitation." The table of
contents and headings contained in this Agreement are for reference purposes
only and shall not affect in any way the meaning or interpretation of this
Agreement. No provision of this Agreement shall be construed to require SIB,
ICBC or any of their respective Subsidiaries or affiliates to take any action
which would violate or conflict with any applicable law (whether statutory or
common), rule or regulation.
10.5. Counterparts. This Agreement may be executed in counterparts, all of
which shall be considered one and the same agreement and shall become effective
when counterparts have been signed by each of the parties and delivered to the
other parties, it being understood that all parties need not sign the same
counterpart.
10.6. Entire Agreement. This Agreement (together with the documents and
the instruments referred to herein) constitutes the entire agreement and
supersedes all prior agreements and understandings, both written and oral, among
the parties with respect to the subject matter hereof, other than the
Confidentiality Agreement.
10.7. Governing Law. This Agreement shall be governed and construed in
accordance with the laws of the State of New York (except to the extent that
mandatory provisions of federal law or the DGCL are applicable).
10.8. Severability. Any term or provision of this Agreement which is
determined by a court of competent jurisdiction to be invalid or unenforceable
in any jurisdiction shall, as to that jurisdiction, be ineffective to the extent
of such invalidity or unenforceability without rendering invalid or
unenforceable the remaining terms and provisions of this Agreement or affecting
the validity or enforceability of any of the terms or provisions of this
Agreement in any other jurisdiction, and if any provision of this Agreement is
determined to be so broad as to be unenforceable, the provision shall be
interpreted to be only so broad as is enforceable, in all cases so long as
neither the economic nor legal substance of the transactions contemplated hereby
is affected in any manner materially adverse to any party or its stockholders.
Upon any such determination, the parties shall negotiate in good faith in an
effort to agree upon a suitable and equitable substitute provision to effect the
original intent of the parties.
10.9. Publicity. ICBC and SIB shall consult with each other before issuing
any press release with respect to the Merger or this Agreement and shall not
issue any such press release or make any such public statement without the prior
consent of the other party, which shall not be unreasonably withheld; provided,
however, that a party may, without the prior consent of the other party (but
after prior consultation, to the extent practicable in the circumstances) issue
such
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press release or make such public statement as may upon the advice of outside
counsel be required by law or the rules and regulations of the NYSE (in the case
of such a release or statement by SIB) or the Nasdaq National Market (in the
case of such a release or statement by ICBC). Without limiting the reach of the
preceding sentence, ICBC and SIB shall cooperate to develop all public
announcement materials and (b) make appropriate management available at
presentations related to the transactions contemplated by this Agreement as
reasonably requested by the other party. In addition, SIB and its Subsidiaries
shall (a) consult with ICBC regarding communications with customers,
stockholders, prospective investors and employees related to the transactions
contemplated hereby, (b) provide ICBC with stockholder lists of SIB and (c)
allow and facilitate ICBC contact with stockholders of SIB and other prospective
investors.
10.10. Assignment; Third Party Beneficiaries. Neither this Agreement nor
any of the rights, interests or obligations of any party hereunder shall be
assigned by any of the parties hereto (whether by operation of law or otherwise)
without the prior written consent of the other party. Subject to the preceding
sentence, this Agreement will be binding upon, inure to the benefit of and be
enforceable by the parties and their respective successors and permitted
assigns. Except as otherwise expressly provided for herein (including Section
7.8 hereof), this Agreement (including the documents and instruments referred to
herein) is not intended to confer upon any person other than the parties hereto
any rights or remedies hereunder.
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IN WITNESS WHEREOF, ICBC and SIB have caused this Agreement to be executed
by their respective officers hereunto duly authorized as of the date first above
written.
INDEPENDENCE COMMUNITY BANK CORP.
By: /s/ Xxxx Xxxxxxx
--------------------------
Name: Xxxx Xxxxxxx
Title: President and Chief
Executive Officer
STATEN ISLAND BANCORP, INC.
By: /s/ Xxxxx X. Xxxxxxx
--------------------------
Name: Xxxxx X. Xxxxxxx
Title: Chairman and Chief Exective
Officer
