Exhibit 2.1
AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER ("Agreement") is made and entered into
as of the 30th day of September, 2005, by and between FIRSTFED BANCORP, INC., a
Delaware corporation (the "Company"), and FIRSTFED Merger Corporation, a
Delaware corporation in organization ("MergerCorp").
RECITALS
WHEREAS, the Company is a corporation duly incorporated and existing under
the laws of the state of Delaware, having authorized capital stock consisting of
10,000,000 shares of common stock, par value $0.01 per share ("Common Stock"),
of which 2,439,350 shares are currently outstanding, and 1,000,000 shares of
preferred stock, par value $0.01 per share ("Preferred Stock"), of which no
shares are issued and outstanding;
WHEREAS, there are issued and outstanding options to acquire 305,719
shares of Common Stock granted under the Company's stock benefit plans (the
"Options");
WHEREAS, MergerCorp is a corporation duly incorporated and existing under
the laws of the state of Delaware, formed for the sole purpose of facilitating
the merger transaction described herein and having authorized capital stock
consisting of 100 shares of common stock, par value $0.01 per share ("MergerCorp
Stock"); and
WHEREAS, the boards of directors of MergerCorp and the Company deem it
advisable and to the benefit of MergerCorp and the Company and their respective
stockholders that MergerCorp and the Company participate in a merger ("Merger")
pursuant to which MergerCorp shall merge with and into the Company and the
separate corporate existence of MergerCorp shall cease.
NOW, THEREFORE, in consideration of the premises and the mutual promises,
covenants, and agreements contained herein, and other good and valuable
consideration, the receipt and sufficiency of which are acknowledged, the
parties to this Agreement agree as follows:
ARTICLE I
THE MERGER AND RELATED MATTERS
1.01. The Merger
(a) Merger of MergerCorp and the Company. Subject to the terms of
this Agreement, at the Effective Time (as such term is defined in Section 1.05
hereof), MergerCorp shall be merged with and into the Company pursuant to the
provisions of subchapter IX of the Delaware General Corporation Law ("DGCL").
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(b) Effects of the Merger. The Merger shall have the effects set
forth in section 259 of the DGCL. Following the Merger, the Company shall
continue in existence under the same legal name as it existed immediately prior
to the Merger, and the separate corporate existence of MergerCorp shall cease.
The offices and facilities of the Company immediately prior to the Merger shall
be the offices and facilities of the Company following the Merger. At the
Effective Time, all rights, title and interests to all assets of every kind and
character owned by MergerCorp shall be allocated to and vested in the Company
without reversion or impairment, without further act of deed and without any
transfer of assignment, but subject to any existing liens or encumbrances
thereon. At the Effective Time, all liabilities and obligations of MergerCorp
shall be allocated to and vested in the Company.
(c) Conversion of Common Stock. At the Effective Time by virtue of
this Agreement and without any further action on the part of any holder:
(1) Each share of Common Stock owned of record as of the Effective Time
(as defined herein) by a Qualified Stockholder (as such term is defined in
Section 1.02 hereof) who is not a Dissenting Stockholder (as such term is
defined in Section 1.01(e) hereof) shall remain outstanding and continue at the
Effective Time to represent one share of Common Stock; and
(2) Each share of Common Stock owned of record as of the Effective Time by
a stockholder of the Company who is not a Qualified Stockholder shall be
canceled and converted into the right to receive $11.00 in cash payable in the
form of a Company check.
(d) Conversion of MergerCorp Stock. At the Effective Time by virtue
of this Agreement and without any further action on the part of any holder, each
share of MergerCorp Stock shall be, without any action on the part of the holder
thereof, be canceled.
(e) Options. At the Effective Time by virtue of this Agreement and
without any further action on the part of any holder, the outstanding Options
held by Qualified Stockholders shall remain outstanding, with such changes in
their respective terms and conditions as are necessary and appropriate to comply
with applicable Option plans and agreements. No other Options shall remain
outstanding subsequent to the Merger.
(f) Dissenting Stockholders. Notwithstanding anything in this
Agreement to the contrary, a stockholder of the Company ("Stockholder") who
complies with the procedural requirements of the DGCL (a "Dissenting
Stockholder") shall be entitled to receive the fair cash value of the Dissenting
Stockholder's shares. In the event that a Stockholder fails to perfect,
withdraws or otherwise loses such holder's dissenters' rights pursuant to the
relevant provisions of the DGCL, the Stockholder shall be entitled only to
receive the consideration specified in Section 1.01(c) of this Agreement.
(g) Certificate of Incorporation and Bylaws. The Certificate of
Incorporation and Bylaws of the Company, as in effect immediately prior to the
Effective Time, shall be unaffected by the Merger and shall remain in effect
thereafter, unless and until amended or repealed as provided by applicable law.
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(h) Directors and Officers. The directors and officers of the
Company immediately prior to the Merger shall continue as the directors and
officers of the Company following the Merger, and each of such persons shall
continue to hold office in the manner provided in the Certificate of
Incorporation and Bylaws of the Company, as in effect at that time, or as
otherwise provided by law.
(i) Stockholder Approval. This Agreement shall be submitted to a
vote of (i) the Stockholders at a meeting duly called by the board of directors
of the Company as soon as is practicable following the execution hereof and (ii)
the sole stockholder of MergerCorp. Upon approval by the requisite vote of the
Stockholders and the approval of the sole stockholder of MergerCorp, this
Agreement shall be made effective in the manner provided in Section 1.05 hereof.
1.02. Qualified Stockholder. Except as provided below and, as applicable,
subject to the Tax Technical Corrections Act of 2005 or other federal
legislation becoming law prior to the Effective Time, a "Qualified Stockholder"
is a stockholder who: (i) either individually, or (A) with his or her spouse,
(B) with other family members that make an election under Section 1361(c)(1)(A)
(a "Family Election") of the Internal Revenue Code of 1986, as amended ("Code"),
(C) through other co-ownership, (D) through an individual retirement account, or
(E) through an estate that makes a Family Election, owns of record or through
the Family Election at least 10,000 shares of Common Stock, (ii) is eligible to
be a stockholder of a corporation taxed pursuant to Subchapter S ("S
Corporation") of the Code and executes and delivers to the Company a certificate
of eligibility ("Certificate of Eligibility"), in the form provided by the
Company, (iii) consents (along with his or her spouse, if any) to the election
by the Company to be taxed as an S Corporation ("Subchapter S Election") by
executing and delivering to the Company a Confirmed Internal Revenue Service
Subchapter S Corporation Election Form 2553 ("Election Form"), in the form
provided by the Company, and (iv) enters into (along with his or her spouse) and
delivers to the Company a stockholders' agreement ("Stockholders' Agreement"),
in the form provided by the Company. Members of a family making the Family
Election may aggregate their shares in order to satisfy the 10,000 share
ownership requirement and be treated as one Qualified Stockholder if each family
member executes and delivers to the Company a tax election form representing
that the election will be included in the tax returns of the family members
making the Family Election ("Family Tax Election Form"), in the form provided by
the Company.
For the purposes of this Agreement and the determination of who is a
Qualified Stockholder, the following limitations shall apply: If the record
holder is a minor, he or she shall be deemed not to be a Qualified Stockholder.
However, a minor may own shares beneficially through a trust, which may be
deemed a Qualified Stockholder if it satisfies the terms and conditions of this
Agreement. A trust described in section 1361(c)(2)(A)(ii) or (iii) of the Code
shall be deemed not to be a Qualified Stockholder unless (i) the trust is a
trust described in section 1361(c)(2)(A)(iv) of the Code and all beneficiaries
of the trust qualify to make the Family Election or (ii) the trust is eligible
to be a Stockholder of an S Corporation under a provision of the Code other than
section 1361(c)(2)(A)(ii) or (iii) of the Code. A trust described in section
1361(c)(2)(A)(v) of the Code having more than two "potential current
beneficiaries," as defined in section 1361(e)(2) of the Code, shall be deemed
not to be a Qualified Stockholder.
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A stockholder shall be deemed not to be a Qualified Stockholder as to any shares
of Common Stock that the Stockholder owns of record jointly with any person
other than the Stockholder's spouse or another member of the Stockholder's
family as defined in Section 1361(c)(1)(B) of the Code with respect to which an
election is in effect under Section 1361(c)(1)(D) of the Code. Shares of Common
Stock held in usufruct shall be deemed not to be owned by a Qualified
Stockholder unless the usufructuary would satisfy the requirements to be a
Qualified Stockholder in the usufructary's own right; no naked owner who is a
minor or is otherwise incompetent under law shall be eligible to enter into the
Stockholders' Agreement; and each naked owner (along with his or her spouse, if
any) shall execute and deliver to the Company a signature page to the
Stockholders' Agreement. Shares of Common Stock held by a trust will be deemed
not to be owned by a Qualified Stockholder unless (i) the trust, (ii) each
person who is deemed an owner of the trust under the Code (and his or her
spouse) and (iii) each beneficial owner of the trust (and his or her spouse)
execute a signature page to the Stockholders' Agreement. All shares held in
"street name" shall be deemed to be held by a Stockholder who is not a Qualified
Stockholder.
In the event that a Stockholder would satisfy the requirements to be a
Qualified Stockholder, except for the fact that the Stockholder does not own of
record at least 10,000 shares of Common Stock, for purposes of satisfying this
Agreement: (i) the Stockholder shall also be deemed to own all other shares that
the Stockholder owns beneficially in a trust that satisfies the requirements to
be a Qualified Stockholder (except for the ownership minimum); and (ii) the
Stockholder shall also be allowed to aggregate the Stockholder's shares of
Common Stock owned of record by other family members who execute and deliver the
Family Tax Election Form.
If the Tax Technical Corrections Act of 2005, or other federal legislation
which expands the eligibility to be a Stockholder of an S Corporation, is
enacted prior to the Effective Time, individual retirement accounts and estates
that qualify for a Family Election, if then authorized, shall be Qualified
Stockholders, and the Company may, but shall not be obligated to, include within
the definition of a Qualified Stockholder under this Agreement any other
category of Stockholder authorized by such legislation to be an eligible S
Corporation Stockholder; provided however, that any such additional Qualified
Stockholder shall have executed and delivered to the Company the applicable
required docmentation.
The Company shall have the sole authority to determine whether a
Stockholder is a Qualified Stockholder, and that determination, after
consultation with counsel, shall be final and binding.
1.03. Exchange Procedures.
(a) As soon as practicable after the Effective Time, the Company
(acting as exchange agent) or such other exchange agent as may be appointed by
the Company shall mail to each holder of record of one or more certificates
which immediately prior to the Effective Time evidence outstanding shares of
Common Stock ("Certificate(s)") a 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 Company and which may
contain such other terms as determined by the Company) and instructions for use
in effecting the surrender of the
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Certificates in exchange for the cash consideration set forth in Section 1.01(c)
hereof or for certificates with the additional legends as provided thereof by
the Stockholders' Agreement, as applicable.
(b) Upon surrender of a Certificate for cancellation, together with
a properly completed and duly executed letter of transmittal and such other
documents as may be required by the letter of transmittal, the holder of such
Certificate shall be entitled to receive in exchange thereof the cash
consideration set forth in Section 1.01(c) hereof or certificates with the
additional legends as provided therefor by the Stockholders' Agreement, as
applicable.
(c) The Company may withhold any amount otherwise due to a
Stockholder pursuant to this Agreement or any future distribution with respect
to Common Stock held by a Stockholder if such Stockholder fails to follow the
exchange procedures set forth in this Agreement. No interest in respect of the
cash consideration set forth in Section 1.01(c) or any other distribution will
be paid or will accrue to holders of Certificates pursuant to the provisions of
this Agreement or otherwise.
(d) In the event that any Certificate shall have been lost, stolen
or destroyed, upon the making of an affidavit of that fact by the person
claiming such Certificate to be lost, stolen or destroyed and, if required by
the Company, the posting by such person of a bond in such amount as the Company
or the exchange agent, as applicable, may determine is necessary as indemnity
against any claim that may be made against it with respect to such Certificate,
the Company or the exchange agent, as applicable, shall deliver in exchange for
such lost, stolen or destroyed Certificate the cash consideration set forth in
Section 1.01(c) hereof or new Company certificates with the additional legends
as provided therefor by the Stockholders' Agreement, as applicable.
(e) Notwithstanding the foregoing, none of the Company, MergerCorp
or any exchange agent shall be liable to any former Stockholder or holder of a
Certificate for any amount delivered in good faith to a public official pursuant
to any applicable abandoned property, escheat or similar laws.
1.04 Family Election. Treats members of a family as one Qualified
Stockholder for purposes of determining the number of Qualified Stockholders.
"Members of the family" shall mean the common ancestor, lineal descendants of
the common ancestor, and spouses (or former spouses) of such lineal descendants
or common ancestor. A common ancestor is an individual who is no more than six
generations removed from the youngest generation of stockholders who otherwise
would be members of the family. The Family Election can be made by any member of
the family. Once made, the election remains in effect until such time it is
revoked.
1.05. Effective Time. The Merger will become effective in the manner set
forth in the DGCL ("Effective Time").
1.06. Closing. The closing of the transactions contemplated by this
Agreement shall take place at such time and place as the parties may mutually
agree.
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ARTICLE II
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company hereby represents and warrants to MergerCorp as follows:
2.01. Corporate Organization, Authorization, etc. The Company is a
corporation duly incorporated, validly existing and in good standing under the
laws of the State of Delaware and has full corporate power and authority to
conduct its business as it is now being conducted and to own or lease the
properties and assets it now owns or holds under lease. The Company has full
corporate power and authority to enter into this Agreement and, subject to the
requisite approval of its Stockholders, to consummate the transactions
contemplated herein. This Agreement has been duly executed and delivered by the
Company and, subject to such approval, is a valid and binding agreement of the
Company in accordance with its terms, subject to laws relating to creditors'
rights generally.
2.02. Authorized and Outstanding Stock. The authorized capital stock of
the Company consists of 10,000,000 shares of Common Stock, par value $0.01 per
share, and 1,000,000 shares of Preferred Stock, par value $0.01 per share. As of
the date hereof, 2,439,350 shares of Common Stock are issued and outstanding. As
of the date hereof, no shares of Preferred Stock are issued and outstanding.
There are no preemptive rights with respect to the Common Stock.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF MERGERCORP
MergerCorp hereby represents and warrants to the Company that:
3.01. Corporate Organization, Authorization, etc. At the Effective Time,
MergerCorp shall be a corporation duly incorporated, validly existing and in a
good standing under the laws of the State of Delaware and have full corporate
power and authority to conduct its business as it is then being conducted and to
own or lease the properties and assets it owns or holds under lease. MergerCorp
has full corporate power to enter into this Agreement and, subject to the
approval of its sole stockholder, to consummate the transactions completed
herein. This Agreement has been duly executed and delivered by MergerCorp and,
subject to such approval, is a valid and binding agreement of MergerCorp in
accordance with its terms, subject to laws relating to creditors' rights
generally.
3.02. Authorized and Outstanding Stock. The authorized capital stock of
MergerCorp consists of 100 shares of common stock, par value $0.01 per share. As
of the Effective Time, one share of MergerCorp Stock shall be fully paid,
validly issued and outstanding. There are no preemptive rights with respect to
the MergerCorp Stock.
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ARTICLE IV
OBLIGATIONS PRIOR AND SUBSEQUENT TO EFFECTIVE TIME
4.01. Filing Requirements. MergerCorp and the Company will promptly comply
with all filing requirements that federal, state or local law may impose on
MergerCorp or the Company with respect to this Agreement and the transactions
contemplated hereby.
4.02. Stockholder Approval. Promptly following the execution of this
Agreement, the Company and MergerCorp shall commence to take such actions as may
be necessary to obtain requisite approvals of this Agreement by the Stockholders
of the Company and the sole stockholder of MergerCorp, including, without
limitation, the calling of a Stockholders' meeting and the preparation of proxy
soliciting materials for a meeting of Stockholders to be held as soon as
practicable.
4.03. Further Assurances. Each party hereto agrees to execute and deliver
such instruments and take such other actions as the other party may reasonably
require in order to carry out the intent of this Agreement. Each party shall use
its best efforts to perform and fulfill all conditions and obligations on its
part to be performed or fulfilled under this Agreement and to effect the Merger
in accordance with the terms and conditions of this Agreement.
ARTICLE V
CONDITIONS AND PRECEDENT
5.01. Conditions to the Company's Obligations. The obligations of the
Company to effect the Merger are subject to the satisfaction of the following
conditions, unless waived by the Company:
(a) Representations and Warranties. The representations and
warranties of MergerCorp set forth in this Agreement shall be true and correct
in all material respects (i) as of the date of this Agreement, and (ii) as of
the Effective Time, as though made as of such time.
(b) Stockholder Approval. This Agreement and the transactions
contemplated hereby shall have been approved by the Stockholders in accordance
with applicable law.
(c) Performance of Obligations of MergerCorp.. MergerCorp shall have
performed all obligations and covenants required to be performed by it under
this Agreement prior to the Effective Time.
(d) Approvals and Consents. All approvals of applications to public
authorities, federal, state or local, and all approvals of private persons, the
granting of which is necessary for consummation of the Merger, for prevention of
the termination of any material right, privilege, license or agreement of, or
any material loss or disadvantage to, or the withholding of which might have
material adverse effect on, the business, results of operations, prospects or
financial condition of MergerCorp upon the consummation of the Merger, shall
have been obtained, and all statutory waiting periods with respect thereto shall
have expired. No approval obtained from any regulatory authority which is
necessary to consummate the transactions contemplated hereby
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shall contain any term or condition which in the judgment of the Board of
Directors of the Company renders inadvisible the consummation of the Merger.
5.02. Conditions to MergerCorp's Obligations. The obligations of
MergerCorp to effect the Merger are subject to the satisfaction of the following
conditions, unless waived by MergerCorp:
(a) Representations and Warranties. The representations and
warranties of the Company set forth in this Agreement shall be true and correct
in all material respects (i) as of the date of this Agreement, and (ii) as of
the Effective Time, as though made as of such time.
(b) Stockholder Approval. This Agreement and the transactions
contemplated hereby shall have been approved by the sole stockholder of
MergerCorp in accordance with applicable law.
(c) Performance of Obligations of the Company. The Company shall
have performed all obligations and covenants requested to be performed by it
under this Agreement prior to the Effective Time.
(d) Approvals and Consents. All approvals of applications to public
authorities, federal, state or local, and all approvals of private persons, the
granting of which is necessary for consummation of the Merger, for prevention of
the termination of any material right, privilege, license or agreement of, or
any material loss or disadvantage to, or the withholding of which might have a
material adverse effect on, the business, results of operations, prospects or
financial condition of the Company upon the consummation of the Merger, shall
have been obtained, and all statutory waiting periods with respect thereto shall
have expired.
ARTICLE VI
TERMINATION AND ABANDONMENT
6.01. Right of Termination. Anything herein to the contrary
notwithstanding, prior to the Effective Time, this Agreement may be terminated
and the transactions contemplated hereby may be abandoned at any time by the
mutual consent in writing of the boards of directors of the Company and
MergerCorp, whether before or after any action thereon by the Stockholders.
6.02. Effect of Termination. If this Agreement is terminated pursuant to
this ARTICLE VI, the same shall be of no further force or effect, and there
shall be no liability by reason of this Agreement or the termination thereof on
the part of MergerCorp, the Company or any of the directors, officers,
employees, or agents, or stockholders of either of them, except as to any
liability for breach of any duty, representation, warranty or obligation under
this Agreement arising prior to the date of termination.
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ARTICLE VII
MISCELLANEOUS PROVISIONS
7.01. Amendment and Modification. To the fullest extent provided by
applicable law, this Agreement may be amended, modified and supplemented by
written agreement duly authorized by the boards of directors of MergerCorp and
the Company at any time prior to the Effective Time; provided, however, that
Stockholder approval shall be required for any modification or amendment that
alters or changes the amount or kind of consideration to be received in exchange
for or on conversion of all or part of the shares of Common Stock.
7.02. Waiver of Compliance. Any failure of MergerCorp or the Company to
comply with any obligation, covenant, agreement or condition herein may be
expressly waived (to the extent permitted under applicable law) in writing by
the President of MergerCorp or the Company, as the case may be; provided,
however, that such waiver or failure to insist upon strict compliance with such
obligation, covenant, agreement or condition shall not operate as a waiver of,
or estoppel with respect to, any subsequent or other failure.
7.03. Notice. All notices or communications required or permitted to be
made hereunder shall be in writing, duly signed by the party giving such notice
or communication and shall be by hand, by a nationally recognized overnight
courier service, by registered or certified mail, postage prepaid, or by
facsimile transmission, receipt confirmed, as follows (or at such other address
for a party as shall be specified by like notice):
(a) if given to MergerCorp, at the mailing address of MergerCorp set
forth below:
FirstFed Merger Corporation
0000 Xxxxxx Xxxxxx Xxxxx
Xxxxxxxx, Xxxxxxx 00000
Attention: X.X. Xxxxxxx III
Chairman of the Board, President and Chief Executive Officer
(b) if given to the Company, at the mailing address of the Company
set forth below:
FirstFed Bancorp, Inc.
0000 Xxxxxx Xxxxxx Xxxxx
Xxxxxxxx, Xxxxxxx 00000
Attention: X.X. Xxxxxxx III
Chairman of the Board, President and Chief Executive Officer
(c) if given to a stockholder of MergerCorp or the Company, at the
address ser forth on the books and records of MergerCorp or the Company,
respectively.
Where this Agreement provides for notice in any manner, such notice may be
waived in writing by the person entitled to received such notice, either before
or after the event, and such waiver shall be the equivalent of such notice.
Waivers of notice by holders shall be filed with
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the Secretary of MergerCorp or the Company, as applicable, but such notice shall
not be a condition precedent to the validity of any action taken in reliance
upon such waiver.
All notices or communications shall be deemed delivered upon actual
receipt thereof by the appropriate person if delivered by hand, upon the date of
receipt confirming the delivery if transmitted by facsimile, upon the next
business day following deposit with a nationally recognized overnight courier
service, or upon the third succeeding business day following deposit in the
United States mail.
7.04. Severability. If any provision of this Agreement, or the application
thereof, shall for any reason be held to be invalid, illegal or unenforceable in
any respect, such invalidity, illegality or unenforceability shall not affect
any other provisions of this Agreement, but this Agreement shall be construed as
if such invalid, illegal or unenforceable provision of this Agreement with a
valid and enforceable provision that will achieve, to the extent possible, the
economic, business and other purposes of the invalid, illegal or unenforceable
provision. If any provision of this Agreement is so broad as to be
unenforceable, the provision shall be interpreted to be only as broad as is
enforceable.
7.05. Attorneys' Fees. If any legal action, arbitration or other
proceeding is brought for the enforcement of this Agreement, or as a result of
any other dispute, in connection with any of the provisions of this Agreement,
the prevailing party shall be entitled to recover reasonable attorneys' fees and
other cots and expenses incurred in that action or proceeding, in addition to
any other relief to which it may be entitled.
7.06. Assignment. This Agreement and all of the provisions hereof shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors and permitted assigns, but neither this Agreement nor any of the
rights, interests or obligations hereunder shall be assigned by the respective
parties hereto without the prior written consent of the other parties. No such
assignment shall relieve MergerCorp or the Company of its obligations hereunder.
7.07. Governing Law. This Agreement shall be governed by the laws of the
State of Delaware, without giving effect to the conflict of laws rules or of any
other state.
7.08. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be an original, but all of which together
shall constitute one and the same instrument.
7.09. Headings. The headings of the sections of this Agreement are
inserted for convenience of reference only and shall not affect the construction
of this Agreement or any provision thereof.
7.10. Entire Agreement. This Agreement, including the other documents
referred to herein which form a part hereof, contains the entire understanding
of the parties hereto in respect of the subject matter contained herein. There
are no restrictions, promises, representations, warranties, covenants or
undertakings, other than those expressly set forth or referred to herein.
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This Agreement supersedes all prior agreements and understandings among the
parties with respect to such subject matter.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered all as of the day and year first above written.
FIRSTFED BANCORP, INC.
By: ____________________________
FIRSTFED MERGER CORPORATION
By: ____________________________
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