STANDSTILL AGREEMENT
THIS AGREEMENT, dated this 4th day of September, 2001, by and between
XXXXXX RIVER BANCORP, INC. (the "Company"), a Delaware Corporation, and the
individuals and entities identified on Exhibit A attached hereto (collectively,
the "Group;" individually, a "Group Member").
RECITALS
WHEREAS, Xxxxxx River Bank & Trust Company (the "Bank"), a wholly-owned
subsidiary of the Company, will be acquiring Ambanc Holding Co., Inc.
("Ambanc"), pursuant to that certain Agreement and Plan of Merger dated
September 4, 2001 by and among the Bank and Ambanc (the "Merger Agreement");
WHEREAS, each Group Member has agreed to enter into this Agreement in
consideration of, and as a material inducement for, the Bank entering into the
Merger Agreement;
WHEREAS, the Company and the Group have agreed that it is in their
mutual interests to enter into this Agreement as hereinafter described; and
NOW THEREFORE, in consideration of the recitals and the
representations, warranties, covenants and agreements contained herein and other
good and valuable consideration, the parties hereto mutually agree as follows:
1. Representation and Warranties of the Group Members. The Group
Members hereby represent and warrant to the Company as of the date of this
Agreement and as of the Effective Time (as defined in the Merger Agreement), as
follows:
(a) Except as set forth on Exhibit A, and except for shares of
capital stock of the Company which may be acquired in open market
purchases subsequent to the date of this Agreement, which, together
with shares set forth on Exhibit A, will not exceed 150,000 shares,
neither the Group nor any Group Member, nor any of their affiliates,
directors and executive officers, has or has a right to acquire a
beneficial ownership interest in any capital stock of the Company, and
no such person has a right to vote any shares of capital stock of the
Company;
(b) The Group Members have full and complete authority to
enter into this Agreement and to make and comply with the
representations, warranties and covenants contained herein, and this
Agreement constitutes a valid and binding agreement of the Group and
each Group Member;
(c) There are no other persons who, by reason of their
personal, business, professional or other arrangement with the Group or
any Group Member, whether written or oral and whether existing as of
the date hereof or in the future, have agreed, explicitly or
implicitly, to take any action on behalf of or in lieu of the Group or
any Group Member that would otherwise be prohibited by this Agreement;
and
1
(d) Other than the Voting Agreement dated September 4, 2001,
by and between the Company and the Group, there are no arrangements,
agreements or understandings between the Group (or any Group Member)
and the Company other than as set forth in this Agreement.
2. Representations and Warranties of the Company. The Company hereby
represents and warrants to the Group, as follows:
(a) The Company has full power and authority to enter into and
perform its obligations under this Agreement, and the execution and
delivery of this Agreement by the Company and the consummation by the
Company of the transactions contemplated hereby have been duly
authorized by the Board of Directors of the Company and require no
other corporate action. This Agreement constitutes a valid and binding
obligation of the Company and the performance of its terms shall not
constitute a violation of its certificate of incorporation, by-laws or
any agreement or instrument to which it is a party; and
(b) Other than the Voting Agreement dated September 4, 2001,
by and between the Company and the Group, there are no arrangements,
agreements or understandings between the Company and the Group (or any
Group Member) other than as set forth in this Agreement.
3. Covenants. (a) During the term of this Agreement, the Group and each
Group Member covenant and agree not to, and shall cause each of their
affiliates, directors and executive officers not to, directly or indirectly,
alone or in concert with any affiliate, group or other person:
(i) own, acquire, offer or propose to acquire or agree to
acquire, whether by purchase, tender or exchange offer, through the
acquisition of control of another person or entity (including by way of
merger or consolidation), the beneficial ownership of, or the right to
vote, more than 150,000 shares of capital stock of the Company or any
securities convertible into such capital stock (except by way of stock
splits, stock dividends, stock reclassifications or other distributions
or offerings made available and, if applicable, exercised on a pro rata
basis, to holders of Company capital stock generally);
(ii) transfer, or offer or propose to transfer or agree to
transfer, except in compliance with this Agreement, beneficial
ownership of, or the right to vote any shares of capital stock of the
Company owned as of the date of this Agreement or hereafter acquired,
whether acquired through the purchase of the Company's capital stock,
the acquisition of control of another person or entity (including by
way of merger or consolidation), by joining a partnership, syndicate or
other group or otherwise, and the Group and each Group member
acknowledge and agree that any and all shares of capital stock
beneficially owned by them, whether acquired in compliance with or in
contravention of this Agreement, with or without actual knowledge,
shall be subject to the terms and conditions of this Agreement;
provided, however, that nothing in this Agreement shall prevent or
restrict the Group or any Group Member from purchasing the capital
stock of the Company on margin or from transferring such stock to and
among Group Members and their affiliates who are also subject to the
terms and conditions of this Agreement.
2
(iii) (A) propose or seek to effect a merger, consolidation,
recapitalization, reorganization, sale, lease, exchange or other
disposition of substantially all the assets of or other business
combination involving, or a tender or exchange offer for securities of,
the Company or any of its subsidiaries or any material portion of its
or such subsidiary's business or assets or any other type of
transaction that would result in a change in control of the Company
(any such action described in this clause (A), a "Company Transaction
Proposal"), (B) seek to exercise any control or influence over the
management of the Company or the Board of Directors of the Company or
any of the businesses, operations or policies of the Company, (C)
present to the Company, its stockholders or any third party any
proposal constituting or that can reasonably be expected to result in a
Company Transaction Proposal, or (D) seek to effect a change in control
of the Company;
(iv) publicly suggest or announce its willingness or desire to
engage in a transaction or group of transactions or have another person
engage in a transaction or group of transactions that constitute or
could reasonably be expected to result in a Company Transaction
Proposal or take any action that might require the Company to make a
public announcement regarding any such Company Transaction Proposal;
(v) initiate, request, induce, encourage or attempt to induce
or give encouragement to any other person to initiate, or otherwise
provide assistance to any person who has made or is contemplating
making, or enter into discussions or negotiations with respect to, any
proposal constituting or that can reasonably be expected to result in a
Company Transaction Proposal;
(vi) solicit proxies (or written consents) or assist or
participate in any other way, directly or indirectly, in any
solicitation of proxies (or written consents), or otherwise become a
"participant" in a "solicitation," or assist any "participant" in a
"solicitation" (as such terms are defined in Rule 14a-1 of Regulation
14A and Instruction 3 of Item 4 of Schedule 14A, respectively, under
the Securities Exchange Act of 1934) in opposition to the
recommendation or proposal of the Company's Board or Directors, or
recommend or request or induce or attempt to induce any other person to
take any such actions, or seek to advise, encourage or influence any
other person with respect to the voting of (or the execution of a
written consent in respect of) the capital stock of the Company, or
execute any written consent in lieu of a meeting of the holders of the
capital stock of the Company or grant a proxy with respect to the
voting of the capital stock of the Company to any person other than to
the Board of Directors of the Company;
(vii) initiate, propose, submit, encourage or otherwise
solicit stockholders of the Company for the approval of one or more
stockholder proposals or induce or attempt to induce any other person
to initiate any stockholder proposal, or seek election to or seek to
place a representative or other affiliate or nominee on the Company's
Board or Directors or seek removal of any member of the Company' Board
of Directors;
(viii) form, join in or in any other way (including by deposit
of the Company's capital stock) participate in a partnership, pooling
agreement, syndicate, voting trust or other group with respect to the
Company's capital stock, or enter into any agreement or
3
arrangement or otherwise act in concert with any other person, for the
purpose of acquiring, holding, voting or disposing of the Company's
capital stock;
(ix) (A) join with or assist any person or entity, directly or
indirectly in opposing, or make any statement in opposition to, any
proposal or director nomination submitted by the Company's Board of
Directors to a vote of the Company's stockholders, or (B) join with or
assist any person or entity, directly or indirectly, in supporting or
endorsing (including supporting, requesting or joining in any request
for a meeting of stockholders in connection with), or make any
statement in favor of, any proposal submitted to a vote of the
Company's stockholders that is opposed by the Company's Board of
Directors;
(x) vote for any nominee or nominees for election to the Board
of Directors of the Company, other than those nominated or supported by
the Company's Board of Directors, and no Group Member shall consent to
become a nominee for election as a Director of the Company;
(xi) except in connection with the enforcement of this
Agreement, participate, by encouragement or otherwise, in any
litigation against or derivatively on behalf of the Company, except for
testimony which may be required by law, and except as may occur in the
ordinary course of business with respect to any loan, deposit or other
transaction where the Group Member or an affiliate is dealing with the
Company as a customer;
(xii) make any public statement, by press release, comment to
any news media or otherwise, regarding the affairs of the Company;
(xiii) sell or transfer any shares of the capital stock of the
Company beneficially owned, except in compliance with Rule 144(f)
through "broker's transactions" as that term is used in Rule 144 under
the Securities Act of 1933;
(ix) request, or induce or encourage any other person to
request, that the Company amend or waive any of the provisions of this
Agreement; and
(xv) advise, assist, encourage or finance (or arrange, assist
or facilitate financing to or for) any other person in connection with
any of the matters restricted by, or to otherwise seek to circumvent
the limitations of, this Agreement.
(b) The Group and each Group Member covenant and agree to, and shall
require each of their affiliates, directors and executive officers to, vote, and
shall require any affiliate, group or other person acting in concert with any
Group Member to vote, all shares beneficially owned (x) in favor of any proposal
submitted by the Company's management to a vote of the Company's stockholders
where the proposal requires a majority or greater percentage of affirmative
votes of the total outstanding capital stock of the Company for passage and (y)
in accordance with the recommendations of a majority of the members of the Board
of Directors of the Company then in office on all procedural matters submitted
to a vote of the Company's stockholders.
4
(c) Within five days prior to the Effective Time and within five days
prior to each anniversary of the Effective Time, until the expiration of this
Agreement, the Group shall deliver an affidavit to the Company, executed by each
Group Member, stating that the representations and warranties made by the Group
and each Group Member in paragraphs 1(a), (c) and (d) of this Agreement are
true, correct and complete in all material respects (with the same force and
effect as if made anew as of such date) and that as of the date of the Affidavit
there has been no breach of any covenant, agreement or obligation contained in
paragraph 3 of the Agreement.
4. Agreement of the Company. Provided that neither the Group nor any
Group Member, nor any of their affiliates, directors and executive officers, is
in breach of this Agreement, then upon receipt by the Company of the Affidavit
described in paragraph 3(c) above, the Company will pay to Xxxxxxxx Xxxxxxx two
annual cash payments of Twenty-Five Thousand Dollars ($25,000), such payments to
commence on the Effective Time and to end on the earlier of the first
anniversary of the Effective Time or such earlier termination of this Agreement
as set forth in Section 6 below. Notwithstanding the above, in the event of the
change in control of the Company, all payments not yet made to the Group or any
Group Member shall become immediately due and payable.
5. Remedies. The Company and the Group (and each Group Member)
acknowledge and agree that a material breach or threatened material breach by
either party may give rise to irreparable injury inadequately compensable in
damages, and accordingly each party shall be entitled to injunctive relief to
prevent a material breach of the provisions hereof and to enforce specifically
the terms and provisions hereof in any state or federal court having
jurisdiction, in addition to any other remedy to which such aggrieved party may
be entitled in law or at equity. In the event either party institutes any legal
action to enforce such party's rights under, or recover damages for breach of,
this Agreement, the prevailing party or parties in such action shall be entitled
to recover from the other party or parties all costs and expenses, including but
not limited to actual attorneys' fees, court costs, witness fees, disbursements
and any other expenses of litigation or negotiation, incurred by such prevailing
party or parties.
6. Term. This Agreement will commence on the date hereof and shall
remain in effect for a period of two years following the Effective Time, or
until such earlier time as the Company shall cease to exist by reason of merger,
sale of assets, liquidation, exchange of shares, or otherwise.
7. Publicity. During the term of this Agreement, no Group Member shall
cause, suffer or, to the extent within its control, permit any press release or
other publicity concerning the Company or its operations to be created, issued
or circulated without prior written approval of the Company's Board of
Directors, which approval shall be in the Board's sole and absolute discretion.
8. Notices. All notice requirements and other communications indicated
shall be deemed given when personally delivered or on the third succeeding
business day after being mailed by registered or certified mail, return receipt
requested, addressed to the Group and the Company below (except for
communications pursuant to paragraphs 3(c) and 7 above which shall be permitted
to be given by facsimile):
5
Each Group Member Xxxxxxxx Xxxxxxx
or the Group: 00 Xxxxxx Xxxxx
Xxxxx, Xxx Xxxxxx 00000
Fax No.:
With a copy to:
The Company: Xxxx X. Xxxxxx, President and Chief Executive Officer
Xxxxxx River Bancorp, Inc.
Xxx Xxxxxx Xxxx Xxxxxx
Xxxxxx, Xxx Xxxx 00000
Fax No.:
With a copy to: Xxxxx X. Xxxxxxxxx, P.C.
Silver, Xxxxxxxx & Taff, L.L.P.
0000 Xxx Xxxx Xxxxxx, X.X., Xxxxxxx Xxxxx
Xxxxxxxxxx, X.X. 00000
Fax No.: (000) 000-0000
9. Governing Law and Choice of Forum. New York, unless applicable
federal law or regulation is deemed controlling, shall govern the construction
and enforceability of this Agreement. Any and all actions concerning any dispute
arising hereunder shall be filed and maintained in a state or federal court, as
appropriate, sitting in the State of New York.
10. Severability. If any term, provision, covenant or restriction of
this Agreement is held by any governmental authority or court of competent
jurisdiction to be invalid, void or unenforceable, the remainder of the terms,
provisions, covenants and restrictions of this Agreement shall remain in full
force and effect and shall in no way be affected, impaired or invalidated.
11. Successors and Assigns. This Agreement shall be binding upon and
shall inure to the benefit of and be enforceable by the successors and assigns,
and transferees by operation of law, of the parties. Except as otherwise
expressly provided for herein, this Agreement shall not inure to the benefit of,
be enforceable by or create any right or cause of action in any person,
including any stockholder of the Company, other than the parties hereto.
12. Survival of Representations, Warranties and Agreements. All
representations, warranties, covenants and agreements made herein shall survive
the execution and delivery of this Agreement.
13. Amendments. This Agreement may not be modified, amended, altered
or supplemented except upon the execution and delivery of a written agreement
executed by all of the parties hereto.
6
14. Definitions. As used in this Agreement, the following terms shall
have the meanings indicated, unless the context otherwise requires:
(a) The term "acquire" means every type of acquisition,
whether effected by purchase, exchange, operation of law or otherwise.
(b) The term "acting in concert" means (i) knowing
participation in a joint activity or conscious parallel action towards
a common goal whether or not pursuant to an express agreement, or (ii)
a combination of pooling of voting or other interests in the securities
of an issuer for a common purpose pursuant to any contract,
understanding, relationship, agreement or other arrangement, whether
written or otherwise.
(c) The term "affiliate" means a person or entity that
directly, or indirectly through one or more intermediaries, controls or
is controlled by, or is under common control with, one or more of the
Group Members.
(d) The term "beneficial ownership" or "beneficially owned"
means all capital stock of the Company owned or held in the Group
Member's name individually or jointly with any other person; by any
trust in which the Group Member is a settlor, trustee, or beneficiary;
by any corporation in which the Group Member is a stockholder (owning,
together with all other Group Members and their respective affiliates,
more than five percent (5%) of the outstanding voting power), director
or officer; by any partnership in which the Group Member is a limited
partner (owning, together with all other Group Members and their
respective affiliates, more than five percent (5%) of the outstanding
beneficial interests), or a general partner, employee or agent; or by
any other entity in which a Group Member holds, together with all other
Group Members and their respective affiliates, more than five percent
(5%) of the outstanding beneficial interests.
(e) The term "change in control" means: (A) any person or
group becomes the beneficial owner of shares of capital stock of the
Company or the Bank representing 25% or more of the total number of
votes which may be cast for the election of the Board of Directors of
the Company or the Bank, (B) in connection with any tender or exchange
offer (other than an offer by the Company or the Bank), merger or other
business combination, sale of assets or contested election, or
combination of the foregoing, the persons who were directors of the
Company or the Bank cease to be a majority of the Board of Directors,
or (C) stockholders of the Company or the Bank approve a transaction
pursuant to which substantially all of the assets of the Company or the
Bank will be sold.
(f) The term "control" (including the terms "controlling,"
"controlled by," and "under common control with") means the possession,
direct or indirect, or the power to direct or cause the direction of
the management, activities or policies of a person or organization,
whether through the ownership of capital stock, by contract, or
otherwise.
(g) The term "group" has the meaning as defined in Section
13(d)(3) of the Securities Exchange Act of 1934.
7
(h) The term "person" includes an individual, a group acting
in concert, a corporation, a partnership, an association, a joint stock
company, a trust, an unincorporated organization or similar company, a
syndicate, or any other group formed for the purpose of acquiring,
holding or disposing of the capital stock of the Company.
(i) The term "transfer" means, directly or indirectly, to
sell, gift, transfer, assign, pledge, encumber, hypothecate or
similarly dispose of (by operation of law or otherwise), either
voluntarily or involuntarily, or to enter into any contract, option or
other arrangement or understanding with respect to the sale, gift,
transfer, assignment, pledge, encumbrance, hypothecation or similar
disposition of (by operation of law or otherwise), any capital stock,
or any interest in any capital stock, of the Company; provided,
however, that a merger or consolidation in which the Company is a
constituent corporation shall not be deemed to be the transfer of any
capital stock beneficially owned by the Group or a Group Member.
(j) The term "vote" means to vote in person or by proxy, or to
give or authorize the giving of any consent as a stockholder on any
matter.
15. Counterparts. This Agreement may be executed in counterparts, each
of which shall be an original, but each of which together shall constitute one
and the same agreement.
16. Duty to Execute. Each party agrees to execute any and all
documents, and to do and perform any and all acts and things necessary or proper
to effectuate or further evidence the terms and provisions of this Agreement.
17. Termination. This Agreement shall cease, terminate and have no
further force and effect upon any termination of the Merger Agreement in
accordance with its terms.
8
This Agreement has been duly executed and delivered by the parties
hereto as of the day and year first above written.
XXXXXX RIVER BANCORP, INC.,
a Delaware corporation
By:__________________________________________
Xxxx X. Xxxxxx, President and Chief
Executive Officer
THE GROUP MEMBERS
------------------------------------------
Xxxxxxxx Xxxxxxx, Individually
XXXXXXX AND ASSOCIATES, LLC
By: __________________________________________
Xxxxxxxx Xxxxxxx, President
XXXXXXX INVESTMENT PARTNERSHIP LP
By: __________________________________________
Xxxxxxxx Xxxxxxx, President
XXXXXXX INVESTMENT PARTNERSHIP II LP
By: __________________________________________
Xxxxxxxx Xxxxxxx, President
FEDERAL HOLDINGS, LLC
By: __________________________________________
____________________
[Signatures continued on following page.]
9
KERRIMAT, LP
By: __________________________________________
_______________________
DISCRETIONARY CLIENTS
By: __________________________________________
_______________________
10
EXHIBIT A
The Group and Group Members
