EXHIBIT 2.1
AGREEMENT AND PLAN OF MERGER
BY AND BETWEEN
BANK PLUS CORPORATION
AND
FBOP CORPORATION
JUNE 2, 2001
TABLE OF CONTENTS
Page
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ARTICLE I. DEFINED TERMS................................................ 1
ARTICLE II. THE MERGER.................................................. 3
Section 2.1. Structure of the Merger................................. 3
Section 2.2. Merger Consideration.................................... 3
Section 2.3. Payment and Exchange Procedures......................... 4
Section 2.4. The Closing............................................. 5
Section 2.5. Stock Options........................................... 5
Section 2.6. Conversion of Shares of Dissenting Common Stock......... 6
ARTICLE III. CONDUCT PENDING THE MERGER................................. 6
Conduct of the Company's Business Prior to the Effective
Section 3.1. Time.................................................... 6
Section 3.2. Forbearance by the Company.............................. 7
Section 3.3. Cooperation............................................. 9
Section 3.4. Conduct by Buyer Prior to the Effective Time............ 9
ARTICLE IV. REPRESENTATIONS AND WARRANTIES.............................. 10
Section 4.1. Disclosure Schedules; Material Adverse Effect........... 10
Section 4.2. Representations and Warranties of the Company........... 10
Section 4.3. Representations and Warranties of Buyer................. 17
ARTICLE V. COVENANTS.................................................... 19
Section 5.1. Acquisition Proposals................................... 19
Section 5.2. Labor and Employment Matters............................ 20
Section 5.3. Access and Information.................................. 21
Section 5.4. Actions; Regulatory Matters............................. 21
Section 5.5. Publicity............................................... 22
Section 5.6. Proxy Statement......................................... 22
Section 5.7. Stockholders' Meeting................................... 22
Section 5.8. Notification of Certain Matters......................... 22
Section 5.9. Additional Agreements................................... 23
Section 5.10 Filings................................................. 23
Section 5.11 [Intentionally Omitted]................................. 23
Section 5.12 Accuracy of Information................................. 23
Section 5.13. Indemnification and Insurance........................... 23
ARTICLE VI. CONDITIONS TO CONSUMMATION.................................. 24
Section 6.1. Conditions to Each Party's Obligation................... 24
Section 6.2. Conditions to the Obligation of Buyer................... 25
Section 6.3. Conditions to the Obligation of the Company............. 25
ARTICLE VII. TERMINATION................................................ 26
Section 7.1. Termination............................................. 26
Section 7.2. Effect of Breach or Termination......................... 27
Section 7.3. Expenses; Termination Fee............................... 27
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Page
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ARTICLE VIII. EFFECTIVE DATE AND EFFECTIVE TIME........................... 28
Section 8.1. Effective Date and Effective Time......................... 28
ARTICLE IX. OTHER MATTERS................................................. 29
Section 9.1. Interpretation............................................ 29
Section 9.2. Waiver.................................................... 29
Section 9.3. Counterparts.............................................. 29
Section 9.4. Governing Law............................................. 29
Section 9.5. Notices................................................... 29
Section 9.6. Entire Agreement; Binding Agreement; Third Parties........ 30
Section 9.7. Assignment................................................ 30
Section 9.8. Captions.................................................. 30
Section 9.9. Construction of Agreement................................. 30
Section 9.10. Survival.................................................. 31
Section 9.11. Attorneys' Fees........................................... 31
Section 9.12. Knowledge................................................. 31
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AGREEMENT AND PLAN OF MERGER, dated as of June 2, 2001 (this "Agreement"),
by and between BANK PLUS CORPORATION, a Delaware corporation (the "Company"),
and FBOP Corporation, an Illinois corporation (the "Buyer").
RECITALS:
A. The Company is the parent of Fidelity Federal Bank, a federal savings
bank (the "Bank"), and Buyer is a bank and thrift holding company.
B. The Boards of Directors of the Company, the Bank and Buyer have
determined that it is advisable and in the best interests of their respective
stockholders for such entities to enter into a business combination upon the
terms and subject to the conditions set forth herein.
C. In furtherance of such combination, the respective Boards of Directors of
the Company and Buyer have duly approved this Agreement, its execution and
delivery, and the merger (the "Merger") of Buyer's wholly-owned subsidiary (the
"Acquisition Sub" with and into the Company upon the terms and subject to the
conditions set forth herein, and may thereafter cause the acquisition of the
Bank by a financial institution subsidiary of Buyer (the "Financial Institution
Sub" by means of a merger of the Bank with and into the Financial Institution
Sub.
D. Concurrently with the execution and delivery hereof, the Chairman of the
Board and the Chief Executive Officer of the Company have delivered to Buyer
their agreements to vote their shares of Common Stock of the Company in favor
of the Merger at the meeting of stockholders of the Company.
AGREEMENT:
NOW, THEREFORE, in consideration of their mutual promises and obligations
hereunder, the parties hereto adopt and make this Agreement and prescribe the
terms and conditions hereof and the manner and basis of carrying it into
effect, which shall be as follows:
ARTICLE I.
DEFINED TERMS
Section 1.1. The following is a list of defined terms used in this Agreement
and references to the Section and page numbers hereof in which such terms are
defined:
Defined Term Section Page
------------ ------- ----
15% Stockholder............................................ 4.2 19
Acquisition Proposal....................................... 5.1 24
Acquisition Sub............................................ Recitals 1
Agreement.................................................. Preamble 1
Applicable Laws............................................ 4.2 17
Bank Merger................................................ Recitals 1
Bank....................................................... Recitals 1
Buyer Disclosure Schedule.................................. 4.1 12
Buyer Financial Statements................................. 4.3(f) 23
Buyer Policy............................................... 5.14(b) 29
Buyer Regulatory Authorities............................... 4.3 22
Buyer...................................................... Preamble 1
Certificate of Merger...................................... 2.1 3
1
Defined Term Section Page
------------ ------- ----
Certificate................................................ 2.3 4
Closing Date............................................... 2.4 6
Closing.................................................... 2.4 6
Code....................................................... 2.3 6
Company Board.............................................. 4.2 14
Company Common Stock....................................... 4.2 13
Company D&O Insurance...................................... 5.14(b) 29
Company Filings............................................ 4.2 15
Company Preferred Stock.................................... 4.2 13
Company Stock Plan......................................... 2.5 6
Company Stock.............................................. 4.2 13
Company.................................................... Preamble 1
Confidentiality Agreement.................................. 5.3 26
Costs...................................................... 5.14(a) 29
Covered Persons............................................ 5.14(b) 29
Delaware Secretary......................................... 2.1 3
DGCL....................................................... 2.1 3
Disclosure Schedule........................................ 4.1 12
Dissenting Shares.......................................... 2.6 7
DOJ........................................................ 4.2 14
Effective Date............................................. 8.1 36
Effective Time............................................. 8.1 36
Environmental Laws......................................... 4.2 19
Escrow Account............................................. 2.2 4
Escrow Agent............................................... 2.2 4
Escrow Agreement........................................... 2.2 4
Escrowed Funds............................................. 2.2 4
Fairness Opinion........................................... 4.2 14
FDIC....................................................... 4.2 13
Financial Institution Sub.................................. Recitals 1
FTC........................................................ 4.2 14
GAAP....................................................... 3.2 10
Governmental Authority..................................... 3.5 12
HOLA....................................................... 4.2 12
Indemnification Provisions................................. 5.14(a) 29
Indemnified Party.......................................... 5.14(a) 29
Liens...................................................... 4.2 14
Material Adverse Effect.................................... 4.1 12
Material Contracts......................................... 4.2 17
Merger Consideration....................................... 2.3 4
Merger..................................................... Recitals 1
NASD....................................................... 4.2 14
Option Consideration....................................... 2.5 6
Optionholders.............................................. 2.3 4
Options.................................................... 2.5 6
Paying Agent............................................... 2.3 4
Per Share Merger Consideration............................. 2.2 4
Person..................................................... 4.2 19
Proxy Statement............................................ 5.6 27
Regulatory Authorities..................................... 4.2 16
Requisite Regulatory Approvals............................. 6.1 30
2
Defined Term Section Page
------------ ------- ----
Rights Agreement............................................ 4.2 19
Rights...................................................... 4.2 13
SEC......................................................... 4.2 14
Significant Matters......................................... 6.2(g) 12
State Regulator............................................. 5.8 28
Stockholders................................................ 2.3 4
subsidiary.................................................. 3.1 8
Superior Proposal........................................... 5.1 24
Surviving Company........................................... 2.1 3
Tax Returns................................................. 4.2 21
Tax......................................................... 4.2 20
Taxes....................................................... 4.2 20
Termination Date............................................ 7.1 33
Termination Fee............................................. 7.3 35
ARTICLE II.
THE MERGER
Section 2.1. Structure of the Merger.
(a) At the Effective Time (as defined below), subject to the satisfaction or
waiver of the conditions set forth in Article VI, Acquisition Sub will merge
with and into the Company, with the Company being the surviving company in the
Merger (the "Surviving Company"), pursuant to the provisions of, and with the
effect provided in, the Delaware General Corporation Law (the "DGCL"). The
Merger shall be effected by the filing in the office of the Secretary of State
of Delaware (the "Delaware Secretary") of a certificate of merger (the
"Certificate of Merger") in accordance with the DGCL. The separate corporate
existence of Acquisition Sub shall thereupon cease. The name of the Surviving
Company shall be Bank Plus Corporation.
(b) At the Effective Time, (i) the charter of the Surviving Corporation
shall be amended to read as set forth on Exhibit A to the Certificate of Merger
and (ii) the bylaws of Acquisition Sub in effect immediately prior to the
Effective Time shall become the bylaws of the Surviving Company.
(c) At the Effective Time, the directors and officers of Acquisition Sub
shall become the directors and officers of the Surviving Company.
Section 2.2. Merger Consideration.
(a) By virtue of the Merger, automatically and without any action on the
part of the Stockholders (as defined below), (i) each share of Company Common
Stock (as defined below) issued and outstanding immediately prior to the
Effective Time (other than shares as to which dissenters' rights are perfected
under Section 262 of the DGCL and any shares of Company Common Stock that are
owned by the Company or any direct or indirect wholly-owned subsidiary of the
Company) shall become and be converted into the right to receive, in
immediately available funds, the Per Share Merger Consideration (as defined
below), (ii) each share of common stock of Acquisition Sub issued and
outstanding immediately prior to the Effective Time shall become and be
converted into one share of common stock of the Surviving Company and (iii)
each share of Company Common Stock owned by the Company or any direct or
indirect wholly-owned subsidiary of the Company shall be retired and canceled
and no cash or other consideration shall be issued with respect thereto. For
purposes of Section 2.2, "Per Share Merger Consideration" shall equal the sum
of Seven Dollars and Twenty-Five Cents ($7.25) subject to increase pursuant to
the last sentence of Section 7.1(g).
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(b) Buyer will deposit the sum of $5,000,000 (together with the additional
sums that Buyer deposits pursuant to Section 7.1(g) and interest accrued or
other earnings thereon, the "Escrowed Funds") with an escrow agent reasonably
acceptable to Buyer and the Company (the "Escrow Agent") into an escrow account
(the "Escrow Account") on or before three (3) business days after the date of
this Agreement pursuant to the terms of the Escrow Agreement attached hereto as
Exhibit 2.2(b) subject to such changes as the Escrow Agent may reasonably
request (the "Escrow Agreement"). The amount of the Escrowed Funds shall be
delivered to the Paying Agent three (3) business days before the Effective Time
unless previously paid to the Company pursuant to Section 7.1(g) of this
Agreement.
Section 2.3. Payment and Exchange Procedures.
(a) At and after the Effective Time, each certificate (each a "Certificate")
previously representing shares of Company Common Stock (other than Certificates
representing Dissenting Shares (as defined below)) shall represent only the
right to receive the Per Share Merger Consideration in respect of the number of
shares represented by such certificate.
(b) As of the Effective Time, Buyer shall have deposited, or caused to be
deposited, with American Stock Transfer & Company (the "Paying Agent") (i) for
the benefit of the holders of shares of Company Common Stock ("Stockholders"),
for payment in accordance with this Section 2.3, the Per Share Merger
Consideration multiplied by the total number of outstanding shares of Company
Common Stock and (ii) for the benefit of holders of Options ("Optionholders"),
for payment in accordance with Section 2.5, the aggregate Option Consideration
(together with the amount described in (i) , the "Merger Consideration"). The
amount of the Escrowed Funds delivered by the Escrow Agent to the Paying Agent
pursuant to Section 2.2(b) shall be deemed deposited by the Buyer with the
Paying Agent under this Section 2.3(b).
(c) As soon as practicable after the Effective Time, but in any event within
three business days following the Effective Time, Buyer shall cause the Paying
Agent to:
(i) mail to each holder of record of a Certificate or Certificates the
following: (A) a letter of transmittal specifying that delivery shall be
effected, and risk of loss and title to the Certificates shall pass, only
upon delivery of the Certificates to the Paying Agent, which shall be in a
form and contain any other reasonable provisions as Buyer may determine;
and (B) instructions for use in effecting the surrender of the Certificates
in exchange for the applicable portion of the Merger Consideration. Upon
the proper surrender of a Certificate to the Paying Agent, together with a
properly completed and duly executed letter of transmittal, the holder of
such Certificate shall be entitled to receive in exchange therefor the
portion of the Merger Consideration which such holder has the right to
receive in respect of the Certificate surrendered pursuant to the
provisions hereof and the Certificate so surrendered shall forthwith be
cancelled. In the event of a transfer of ownership of any shares of Company
Common Stock not registered in the transfer records of the Company, the
applicable portion of the Merger Consideration may be issued to the
transferee if the Certificate representing such Company Common Stock is
presented to the Paying Agent, accompanied by documents sufficient, in the
reasonable discretion of Buyer and the Paying Agent, (1) to evidence and
effect such transfer and (2) to evidence that all applicable stock transfer
taxes have been paid; and
(ii) deliver to each Optionholder listed on a schedule to be provided by
the Company to Buyer and the Paying Agent on or before the Effective Time
the Option Consideration set forth next to such Optionholder's name on such
schedule in accordance with Section 2.5, against such documents as the
Company may reasonably determine.
(d) From and after the Effective Time, there shall be no transfers on the
stock transfer records of the Company of any shares of Company Common Stock
that were outstanding immediately prior to the Effective Time. If, after the
Effective Time, certificates are presented to Buyer or the Surviving Company,
such Certificates shall be canceled and exchanged for the portion of the Merger
Consideration deliverable in respect thereof pursuant to this Agreement in
accordance with the procedures set forth in this Section 2.3.
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(e) Any portion of the aggregate Merger Consideration that remains unclaimed
for one year after the Effective Time shall be delivered by the Paying Agent to
Buyer. Any Stockholders or Optionholders who have not theretofore complied with
this Section 2.3 shall thereafter look only to Buyer for payment of their
Merger Consideration deliverable in respect of each share of Company Common
Stock or Option held by such person as determined pursuant to this Agreement.
If outstanding Certificates are not surrendered or payments hereunder not
claimed prior to the date on which such payments would otherwise escheat to or
become the property of any governmental unit or agency, the unclaimed items
shall, to the extent permitted by abandoned property and any other Applicable
Law (as defined below), become the property of Buyer (and to the extent not in
its possession shall be paid over to it), free and clear of all claims or
interest of any Person (as defined below) previously entitled to such claims.
Notwithstanding the foregoing, to the fullest extent permitted by Applicable
Law, none of Buyer, the Surviving Company, the Paying Agent or any other Person
shall be liable to any former Stockholder or Optionholder for any amount
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 destroyed and, if required by the Paying
Agent, the posting by such Person of a bond in such amount as the Paying Agent
may reasonably direct as indemnity against any claim that may be made against
it with respect to such Certificate, the Paying Agent will pay in exchange for
such lost, stolen or destroyed Certificate the portion of the Merger
Consideration deliverable in respect thereof pursuant to this Agreement.
(g) Buyer or the Surviving Company shall be entitled to deduct and withhold
from the portion of the Merger Consideration otherwise payable pursuant to this
Agreement to any Stockholder or Optionholder such amounts as Buyer or the
Surviving Company is required to deduct and withhold with respect to the making
of such payment under the Internal Revenue Code of 1986, as amended (the
"Code"), or any provision of state, local or foreign tax law.
(h) The Per Share Merger Consideration shall be adjusted proportionately for
any stock splits, stock dividends, subdivisions, reclassifications or any other
combinations, divisions or similar change in the Company's capitalization after
the date hereof and which occurs or which has a record date prior to the
Effective Time of the Merger. If shares of Company Common Stock are issued
pursuant to the Rights Agreement, then (i) the Per Share Merger Consideration
shall be adjusted as follows: the sum of: (A) the aggregate Per Share Merger
Consideration payable in respect of all shares of Company Common Stock
outstanding immediately prior to such issuances plus (B) the amount of any
monetary consideration received by the Company in respect of such issuances,
shall be divided by the number of shares of Company Common Stock outstanding
after such issuances to arrive at the adjusted Per Share Merger Consideration,
and (ii) the Option Consideration shall be appropriately adjusted by the number
of shares of Company Common Stock issuable upon exercise of all Options after
giving effect to the issuance of shares of Company Common Stock pursuant to the
Rights Agreement (such that each Optionholder shall receive not less than what
such Optionholder would have received prior to the issuance of such shares
pursuant to the Rights Agreement).
Section 4. The Closing. Upon satisfaction or satisfactory waiver of all
conditions set forth in Article VI of this Agreement, the closing (the
"Closing"of the Merger shall take place at the offices of Xxxxxx, Xxxx &
Xxxxxxxx, 000 Xxxxx Xxxxx Xxxxxx, Xxx Xxxxxxx, Xxxxxxxxxx 00000 at 9:00 a.m. on
the Effective Date, or such other place, time and date as Buyer and the Company
may mutually agree (the "Closing Date").
Section 2.5. Stock Options. The Company shall take appropriate action such
that at the Effective Time each option, warrant or other right granted pursuant
to the Company's Stock Option and Equity Incentive Plan (the "Company Stock
Plan") that is outstanding and unexercised immediately prior to the Effective
Time ("Options") shall be canceled by the Company in consideration of the right
to receive payment pursuant to Section 2.3(c)(ii) by each such Optionholder of
an aggregate amount in cash equal to the positive difference, if any, of (a)
the product of (i) the Per Share Merger Consideration multiplied by (ii) the
number of shares of Company Common Stock as to which such Option is
exercisable, minus (b) the aggregate exercise price of
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such Option (such positive difference, the "Option Consideration"). The
foregoing calculation shall be made independently for each agreement granting
an Option and, to the extent that the exercise price of any Option is greater
than the Per Share Merger Consideration, the Option Consideration payable on
account of another Option agreement shall not be offset thereby. At the
Effective Time, each Option and the Company Stock Plan shall terminate and be
of no further force or effect, and any rights thereunder to purchase shares of
Company Common Stock shall also terminate and be of no further force or effect.
Section 2.6. Conversion of Shares of Dissenting Common Stock. The Company
shall give Buyer prompt notice upon receipt by the Company of any written
demands for appraisal rights, withdrawal of such demands and any other
documents received or instruments served pursuant to Section 262 of the DGCL
and shall give Buyer the opportunity to direct all negotiations and proceedings
with respect to such demands. The Company shall not voluntarily make any
payment with respect to such demands for appraisal rights and shall not, except
with the prior written consent of Buyer, settle or offer to settle such
demands. If any holders of shares of Company Common Stock dissent from the
Merger and exercise and perfect the right to obtain valuation of and payment
for their shares of Company Common Stock (the "Dissenting Shares") under the
provisions of said Section, then (a) the Dissenting Shares will be deemed for
all purposes to have been retired and canceled automatically immediately prior
to the consummation of the Merger, with the effect that such shares will not be
exchanged for the Merger Consideration pursuant to Section 2.2 hereof and (b)
all payments to be made to the holders of such Dissenting Shares will be made
directly by Buyer.
ARTICLE III.
CONDUCT PENDING THE MERGER
Section 3.1. Conduct of the Company's Business Prior to the Effective
Time. During the period from the date of this Agreement to the Effective Time,
and except as (a) contemplated by this Agreement, (b) required by Applicable
Law, (c) necessary to be consistent with prudent banking practice or (d) set
forth on Section 3.1 of the Company Disclosure Schedule (as defined below), the
Company shall, and shall cause each of its subsidiaries (as defined below) to,
unless Buyer shall give its prior written consent (which consent shall not be
unreasonably withheld or delayed and shall in any event be deemed to have been
given if, within five (5) business days after receipt by Buyer of a written
notice from the Company of the Company's intention to act contrary to any one
of the covenants set forth in this Section 3.1, Buyer shall not have given
written notice to the Company of Buyer's objection to such action):
(i) conduct its business and maintain its books and records in the
usual, regular and ordinary course in all material respects, in conformity
with (A) prudent banking practice, (B) any orders or directives issued by
the Office of Thrift Supervision ("OTS") as in effect on the date hereof,
copies of which have been made available to Buyer and (C) Applicable Law,
except for any failure to comply with any such Applicable Law that would
not have a Material Adverse Effect on the Company (as defined below);
(ii) use commercially reasonable efforts consistent with this Agreement
to maintain and preserve intact its present business organization and to
maintain and preserve its relationships and goodwill with account holders,
borrowers, employees and others having business relationships with the
Company or its subsidiaries;
(iii) use commercially reasonable efforts to keep in full force and
effect all of its material permits and licenses;
(iv) use commercially reasonable efforts to maintain insurance coverage
at least substantially equivalent to that now in effect on its business
operations and all properties which it owns or leases;
(v) perform its material contractual obligations and not become in
material default on any such obligations, except where the failure to
perform such obligations or where being in such default would not have a
Material Adverse Effect on the Company;
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(vi) maintain its assets and properties in good condition and repair,
except for normal wear and tear and for changes in the ordinary course of
business, consistent with past practice;
(vii) promptly notify Buyer regarding receipt from any tax authority of
any notification of (A) the commencement of an audit, (B) a request to
extend the statute of limitations, (C) a statutory notice of deficiency,
(D) a revenue agent's report, (E) a proposed assessment, (F) any other
similar notification of potential adjustments or (G) any collection
enforcement activity by any tax authority with respect to tax liabilities
of the Company, or any of its subsidiaries; and
(viii) make available to Buyer monthly unaudited consolidated balance
sheets and consolidated income statements of the Company within twenty-five
(25) days after the close of each calendar month.
As used in this Agreement, the word "subsidiary" when used with respect to
any party means any corporation, partnership or other organization, whether
incorporated or unincorporated, which is consolidated with such party for
financial reporting purposes. Unless the context otherwise so requires, any
reference to the subsidiaries of the Company is deemed to include the Bank and
its subsidiaries.
Section 3.2. Forbearance by the Company. During the period from the date of
this Agreement to the Effective Time, and except as (a) contemplated by this
Agreement, (b) required by Applicable Law, (c) necessary to be consistent with
prudent banking practice or (d) set forth in Section 3.2 of the Company
Disclosure Schedule, the Company shall not, and shall not permit any of its
subsidiaries to, without the prior written consent of Buyer (which consent
shall not be unreasonably withheld or delayed, and shall in any event be deemed
to have been given if, within five (5) business days (or in the case of Section
3.2(ix) below, two (2) business days) after receipt by Buyer of a written
notice from the Company of the Company's intention to act contrary to any one
of the covenants set forth in this Section 3.2, Buyer shall not have given
written notice to the Company of Buyer's objection to such action), do any of
the following:
(i) other than in the ordinary course of business consistent with past
practice, incur any indebtedness for borrowed money or assume, guarantee,
endorse or otherwise as an accommodation become responsible for the
obligations of any other Person other than overnight borrowings from the
Federal Home Loan Bank and federal funds purchased or securities sold under
agreements to repurchase;
(ii) change the number of shares of its authorized or issued capital
stock or issue, grant or amend any option, warrant, call, commitment,
subscription, right to purchase or agreement of any character relating to
the authorized or issued capital stock of the Company or its subsidiaries,
or any securities convertible into shares of any such stock, or split,
combine or reclassify any shares of its capital stock, or declare, set
aside or pay any dividend, or other distributions (whether in cash, stock
or property or any combination thereof) in respect of the capital stock of
the Company or redeem or purchase or otherwise acquire any shares of such
capital stock or any securities or obligations convertible into or
exchangeable for any shares of its capital stock, or liquidate, sell,
transfer, assign, encumber or otherwise dispose of any shares of capital
stock of the Company or its subsidiaries, except for (i) the Company's
issuance of (A) Company Common Stock pursuant to the Company Stock Plan and
(B) Company Stock pursuant to the Rights (as defined in Section 4.2(b)) and
(ii) the amendment of the terms of the Bank Preferred Stock to provide that
the shares of Bank Preferred Stock will be converted at or prior to the
consummation of the Merger into the right to receive cash. Notwithstanding
anything to the contrary, subject to Applicable Law, the Bank can pay
quarterly dividends of $1,304,100 on its preferred stock and $250,000 on
its common stock and any other wholly-owned subsidiaries may pay dividends
to the Company;
(iii) other than in the ordinary course of business consistent with past
practice, sell, transfer, mortgage, encumber or otherwise dispose of any of
its material properties, leases or assets to any Person, or cancel, release
or assign any material indebtedness of any Person, except pursuant to
contracts or agreements in force at the date of this Agreement and except
in connection with any loan workouts;
(iv) enter into, renew or amend any employment agreement with any
employee or director, voluntarily accelerate the vesting of any
compensation or benefit or increase, in any manner, the
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compensation or fringe benefits of any of its employees or directors
(except normal increases and discretionary performance bonuses, in the
ordinary course of business, consistent with past practices of the Company,
or additional retention arrangements, not to exceed $500,000 in the
aggregate, for employees ranking below the rank of Executive Vice
President), or create or institute, or make any payments pursuant to, any
severance plan, bonus plan, incentive compensation plan or package, or pay
any pension or retirement allowance not required by any existing plan or
agreement to any such employees or directors, or become a party to, amend
or commit itself to, or otherwise establish any trust or account related
to, any Plan (as defined below), with or for the benefit of any employee,
other than any amendment to any Plan required by Applicable Law (provided
that the Company shall use its commercially reasonable efforts to minimize
the cost of any such amendment as permitted under such Applicable Law);
(v) other than in the ordinary course of business consistent with past
practice, make any investment either by purchase of stock or securities,
contributions to capital, property transfers or purchase of any property or
assets of any Person; provided, however, that no investment or series of
related investments shall be made in an amount in excess of $100,000 except
for (A) securities which would be reported under the caption "cash and cash
equivalents" on the Company's consolidated statement of financial
condition, (B) investment-grade mortgage-backed securities having the
rating of AAA from either Standard & Poor's Corporation or Xxxxx'x
Investors Service, Inc., (C) securities issued by the Federal National
Mortgage Association, Federal Home Loan Mortgage Corporation and the
Government National Mortgage Association or (D) foreclosures or
acquisitions in satisfaction of debts outstanding to the Company or its
subsidiaries; provided further, however, that in no event shall the Company
or any of its subsidiaries make any acquisition of equity securities or
business operations without Buyer's prior written consent;
(vi) enter into, renew, terminate or materially amend any material
contract or agreement, or make any material change in any of its material
contracts or agreements, other than any: (A) loan or deposit agreements
made in the ordinary course of business or (B) contract or other agreement
involving aggregate payments of $100,000 or less per annum;
(vii) settle any claim, action or proceeding involving any liability of
the Company or any of its subsidiaries for money damages in excess of
$100,000, exclusive of contributions from insurers, or involving material
restrictions upon the business or operations of the Company or any of its
subsidiaries, other than settlements of any Significant Matters (as defined
below) set forth on Section 4.1(b) of the Company Disclosure Schedule in an
aggregate amount not to exceed $5,000,000;
(viii) except in the ordinary course of business (including in
connection with any loan work-outs), waive or release any material right or
collateral or cancel or compromise any extension of credit or other debt or
claim;
(ix) make, renegotiate, renew, increase, extend or purchase any loan,
lease (credit equivalent), advance, credit enhancement or other extension
of credit, or make any commitment in respect of any of the foregoing,
except for (A) loans, advances or commitments in each instance in amounts
(exclusive of participations by third parties) less than $4,000,000, if
secured by real estate, or $25,000, if unsecured, or (B) loans made
pursuant to commitments made by the Company prior to the date hereof;
(x) change its method of accounting as in effect at December 31, 2000,
except as required by changes in generally accepted accounting principles
("GAAP"s concurred in by the Company's independent auditors, or as required
by regulatory accounting principles, regulatory requirements or Applicable
Laws;
(xi) enter into any new lines of business materially different from the
lines of business that they conduct on the date hereof, or cease to conduct
any material lines of business that it conducts on the date hereof, or
conduct any material business activity not consistent with past practice;
(xii) amend its charter, bylaws or other similar governing documents;
(xiii) make any capital expenditure which exceeds (A) $100,000 per
project or related series of projects or (B) $500,000 in the aggregate;
8
(xiv) grant or commit to grant any extension of credit or amend the
terms of any such credit outstanding on the date hereof to any executive
officer, director or holder of ten percent (10%) or more of the outstanding
Company Common Stock, or any affiliate of such Person, if such credit would
exceed $100,000 (other than in the ordinary course, consistent with past
practice, including pursuant to the Bank's existing employee home loan
program);
(xv) materially change any of the Company's or the Bank's basic policies
and practices or any other material aspect of the Company's business or
operations on a consolidated basis;
(xvi) grant any Person a power of attorney or similar authority, other
than in the ordinary course of business;
(xvii) take title to any non-residential real property without obtaining
a prior Phase I environmental report;
(xviii) execute Form 870-AD or comparable document agreeing to the
finality of any audit, examination or other proceeding with respect to any
federal or state income tax liability of the Company or any of its
subsidiaries;
(xix) merge or consolidate with any other Person or acquire any capital
stock of or other equity interest in any Person or create any subsidiary;
(xx) make application for the opening, relocation or closing of any, or
open, relocate or close any, branches, except the sale of the Mall of
America branch and the closing of the Corona Del Mar branch;
(xxi) sell or enter into any agreement to sell any credit card
receivables (including, but not limited to, charged-off accounts);
(xxii) engage or participate in any material transaction or incur or
sustain any material obligation not in the ordinary course of business; or
(xxiii) agree to, or make any commitment to, take any of the actions
prohibited by this Section 3.2.
Section 3.3. Cooperation. Except in any case as may be required by
Applicable Law or the provisions of this Agreement, each of the Company,
Acquisition Sub and Buyer shall not take, cause to be taken or agree or make
any commitment to take any action: (a) that is intended or may reasonably be
expected to cause any of its representations or warranties set forth in
Article IV hereof not to be true and correct or (b) that is inconsistent with
or prohibited by Article III.
Section 3.4. Conduct by Buyer Prior to the Effective Time. Except as
expressly provided in this Agreement, during the period from the date of this
Agreement to the Effective Time, Buyer shall (a) promptly (and in any event
prior to the mailing of the Proxy Statement (as defined below)), form
Acquisition Sub as a Delaware corporation and qualify Acquisition Sub in any
jurisdiction other than the State of Delaware in which qualification is
necessary or advisable in order to consummate the Merger and cause it to
become a party hereto, (b) in a timely manner, cause Acquisition Sub to take
all actions necessary or appropriate to effect or facilitate the transactions
contemplated by this Agreement, (c) except as required by Applicable Law, not
take any action which would reasonably be expected to adversely affect or
delay the ability of Buyer, Acquisition Sub or the Company to obtain any
necessary approvals, consents or waivers of any court, administrative agency,
commission or other federal, state or local governmental authority or
instrumentality (each, a "Governmental Authority") required for the
transactions contemplated by this Agreement or to perform its covenants or
agreements on a timely basis under this Agreement and (d) not agree to, or
make any commitment to, take any of the actions prohibited by this Section
3.4.
9
ARTICLE IV.
REPRESENTATIONS AND WARRANTIES
Section 4.1. Disclosure Schedules; Material Adverse Effect.
(a) On or prior to the date hereof, Buyer has delivered to the Company a
schedule (the "Buyer Disclosure Schedule") and the Company has delivered to
Buyer a schedule (the "Company Disclosure Schedule") setting forth, among other
things, items the disclosure of which is necessary or appropriate either in
response to an express disclosure requirement contained in a provision hereof
or as an exception to one or more representations or warranties contained in
Section 4.2 or 4.3 or to one or more of its covenants contained in Article III
or V; provided, that the mere inclusion of an item in the Buyer Disclosure
Schedule or the Company Disclosure Schedule shall not be deemed an admission by
a party that such item was required to be disclosed therein or was otherwise
material. Any item disclosed on a party's Disclosure Schedule with respect to
one or more provisions of this Agreement shall (unless otherwise indicated)
also be deemed to be disclosed with respect to any other provision of this
Agreement to the extent necessary to prevent a breach of any representation,
warranty or covenant made by such party in such other provision.
(b) As used in this Agreement, the term "Material Adverse Effect" means an
effect that (i) is material and adverse to the business, financial condition or
results of operations of the relevant party hereto and its subsidiaries taken
as a whole or (ii) is material and adverse to the ability of the relevant party
to consummate the Merger or to perform its material obligations hereunder;
provided, however, that a Material Adverse Effect shall not be deemed to have
occurred as a result of any (A) changes in general or regional economic
conditions (including interest rates), (B) acts or omissions permitted or
contemplated hereby or taken with the prior written consent or upon the written
request of the other party hereunder or (C) changes in Applicable Law or GAAP;
(D) any settlement payments or judgments aggregating up to $5 million resulting
from the litigation or arbitration matters identified on Section 4.1(b) of the
Company Disclosure Schedule as "Significant Matters;" (E) the pendency of any
of the Significant Matters at the Effective Time of the Merger; or (F)
reasonable costs and expenses incurred by the Company or the Bank in
transactions outside the ordinary course of business contemplated by this
Agreement.
Section 4.2. Representations and Warranties of the Company. Subject to
Section 4.1 and except as disclosed in the Company Disclosure Schedule, the
Company hereby represents and warrants to Buyer as follows:
(a) Organization and Standing. The Company is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware
and is registered as a savings and loan holding company under the Home Owners
Loan Act of 1933, as amended, and applicable regulations thereunder ("HOLA").
The Bank is a federal savings bank duly organized, validly existing and in good
standing under the laws of the United States and is authorized by the OTS to
conduct a federal savings bank business. The Bank is a member in good standing
of the Federal Home Loan Bank of San Francisco. Each of the Company's
subsidiaries is duly organized, validly existing and in good standing under the
laws of the jurisdiction of its organization. The Certificate of Incorporation,
Articles of Incorporation or Federal Stock Charter, as applicable, and bylaws
of each of the Company and its subsidiaries, all as amended to date, are in
full force and effect. The Bank's deposits are insured by the Federal Deposit
Insurance Corporation (the "FDIC") in the manner and to the fullest extent
provided by law. Neither the scope of the business of the Company or any of its
subsidiaries, nor the location of any of their respective properties requires
that the Company or any of its subsidiaries be qualified or licensed to do
business in any jurisdiction other than the States of California and Minnesota
where the failure to be so qualified or licensed would, individually or in the
aggregate, have a Material Adverse Effect.
(b) Company Stock. As of the date hereof, the authorized capital stock of
the Company consists solely of (i) 78,500,000 shares of the Company's common
stock, par value $0.01 per share ("Company Common
10
Stock"), of which 19,476,696 shares are outstanding, and (ii) 10,000,000 shares
of the Company's preferred stock, par value $0.01 per share ("Company Preferred
Stock," and together with Company Common Stock, "Company Stock"), of which none
are outstanding. Up to an additional 1,783,000 shares of Company Common Stock
may be issued upon exercise or conversion of outstanding Rights (as defined
below). As of the date hereof, no shares of Company Common Stock and no shares
of Company Preferred Stock were held in treasury by the Company or otherwise
owned by the Company or its subsidiaries. The outstanding shares of Company
Common Stock have been validly issued and are fully paid and nonassessable
(subject to statutory obligations of holders, if any) and subject to no
preemptive rights. Section 4.2(b)(i) of the Company Disclosure Schedule sets
forth, as of the date hereof, all shares of Company Stock reserved for
issuance, outstanding options, calls or commitments relating to shares of
Company Stock or any outstanding securities, obligations or agreements
convertible into or exchangeable for, or giving any Person any right
(including, without limitation, preemptive rights) to subscribe for or acquire,
any shares of Company Stock (collectively, "Rights").
(c) Subsidiaries.
(i) (A) Section 4.2(c) of the Company Disclosure Schedule sets forth a
complete list of all of the direct and indirect subsidiaries of the
Company, together with the jurisdiction of organization of each such
subsidiary, the authorized shares of capital stock, and the number of
shares of capital stock outstanding, and, to the extent owned by the
Company or one of its subsidiaries, what entity owns such stock; (B) the
Company owns, directly or indirectly, all the issued and outstanding
securities of each of its subsidiaries; (C) no equity securities of any of
its subsidiaries are or may become required to be issued (other than to the
Company or its subsidiaries) by reason of any option, call, commitment,
convertible security or otherwise; (D) there are no contracts, commitments,
understandings, or arrangements relating to rights of the Company or any of
its subsidiaries to vote or to dispose of such securities; and (E) all the
securities of each subsidiary held by the Company or its subsidiaries have
been validly issued and are fully paid and nonassessable (subject to
statutory obligations of holders, if any) and are owned by the Company or
its subsidiaries free and clear of any charge, mortgage, pledge, security
interest, restriction, claim, lien, or encumbrance (excluding restrictions
imposed by Applicable Law) (collectively, "Liens"). Each subsidiary is an
investment permitted pursuant to HOLA for a unitary savings and loan
holding company and, for those subsidiaries owned by the Bank, for a
federal savings association or its subsidiaries.
(ii) The Company does not own, beneficially, directly or indirectly, any
equity securities or similar interests of any Person (other than in a
fiduciary capacity or in connection with the foreclosure of security
interests or as a result of similar enforcement remedies in connection with
loans made in the ordinary course of business), or any interest in a
partnership or joint venture of any kind, other than in its subsidiaries.
Except for its ownership of the Bank, the Company does not own any stock or
equity interest in any depository institution (as defined in 12 U.S.C.
(S)1813(c)(1)).
(d) Powers. The Company and each of its subsidiaries has the corporate or
trust power and authority to carry on their respective businesses as they are
now being conducted and to own all their properties and assets. The Company has
the corporate power and authority to execute, deliver and perform its
obligations under this Agreement and to consummate the transactions
contemplated hereby.
(e) Corporate Authority. Subject to receipt of the requisite approval of the
Merger and this Agreement by the holders of a majority of the outstanding
shares of the Company Common Stock entitled to vote thereon (which are the only
stockholder votes required thereon with respect to the Company), this Agreement
and the transactions contemplated hereby have been duly authorized by all
necessary corporate action of the Company on or prior to the date hereof. This
Agreement is, and the Certificate of Merger will be, upon due execution and
delivery by the respective parties thereto, valid and legally binding
obligations of the Company, enforceable in accordance with their respective
terms, except as enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium, fraudulent transfer and similar laws of
general applicability relating to or affecting creditors' rights or by general
equity principles. The Company's Board of Directors (the "Company Board") has
directed that this Agreement and the transactions hereby be submitted to the
Stockholders for approval (within the meaning of Section 251 of the DGCL) at a
meeting of such Stockholders. The Company
11
Board has received the written opinion of Sandler X'Xxxxx to the effect that,
as of the date hereof, the Merger Consideration is fair to the holders of
Company Common Stock from a financial point of view (the "Fairness Opinion").
(f) Approvals; No Defaults.
(i) No consents or approvals of, or filings or registrations with, any
Governmental Authority are required to be made or obtained by the Company
or any of its subsidiaries in connection with the execution, delivery or
performance by the Company of this Agreement or to consummate the Merger,
except for (A) filings and approvals of applications with and by the OTS,
the National Association of Securities Dealers, Inc. (the "NASD"), the
Department of Justice (the "DOJ"), the Federal Reserve Board, the Federal
Trade Commission (the "FTC"and the FDIC, (B) filings with the Securities
and Exchange Commission (the "SEC") and state securities authorities, and
(C) the filing of the Certificate of Merger with the Delaware Secretary
pursuant to the DGCL.
(ii) Subject to receipt of the regulatory approvals referred to in the
preceding paragraph, expiration of related waiting periods and required
filings under federal and state securities laws, the execution, delivery
and performance of this Agreement and the consummation of the transactions
contemplated hereby do not and will not (A) constitute a breach or
violation of, or a default under, or give rise to any Lien, any
acceleration of remedies or any right of termination or cancellation under,
any law, rule or regulation or any judgment, decree, writ, injunction,
statute, order, governmental permit or license, or note, bond, mortgage,
agreement, indenture or instrument of the Company or any of its
subsidiaries or to which the Company or any of its subsidiaries or
properties or assets is subject or bound, (B) constitute a breach or
violation of, or a default under, the Company's or the Bank's charter or
bylaws or (C) require any consent or approval under any such law, rule,
regulation, judgment, decree, writ, injunction, statute, order,
governmental permit or license, note, bond, mortgage, agreement, indenture
or instrument, except in each case, for such matters as would not
constitute a Material Adverse Effect on the Company. To the knowledge of
the Company, there is no reason (specific to the Company or any of its
subsidiaries) that may cause any Governmental Authority to deny or withhold
any consent or approval required to be obtained in connection with the
transactions contemplated by this Agreement, including but not limited to,
the Merger, other than such matters, if any, as have been disclosed in the
Company Disclosure Schedule or in the Company SEC Filings (as defined
below) filed between December 31, 2000 and the date hereof.
(g) Financial Reports and SEC Documents.
(i) The Company and its subsidiaries have filed all reports, returns,
registrations and statements (such reports and filings referred to as
"Company Filings"), together with any amendments required to be made with
respect thereto, that were required to be filed with (A) the SEC, (B) the
OTS, (C) the FDIC and (D) any other applicable Governmental Authority,
including taxing authorities, except where the failure to file such
reports, returns, registrations or statements would not constitute a
Material Adverse Effect on the Company. As of their respective dates, each
of such Company Filings (1) complied in all material respects with all laws
and regulations enforced or promulgated by the Governmental Authority with
which it was filed (or was amended so as to be in compliance promptly
following discovery of any such noncompliance) and (2) did not contain any
untrue statement of a material fact or omit 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.
(ii) Each of the consolidated balance sheets contained in or
incorporated by reference into any of the Company Filings (including the
related notes and schedules thereto) fairly presents the consolidated
financial position of the Company and its subsidiaries as of its date, and
each of the consolidated statements of income and changes in stockholders'
equity and cash flows or equivalent statements in the Company Filings
(including any related notes and schedules thereto) fairly presents the
consolidated results of operations, changes in stockholders' equity and
changes in cash flows, as the case may be, of the Company and its
subsidiaries for the periods to which they relate, in each case in
accordance with GAAP,
12
as applicable, consistently applied during the periods involved, except in
each case as may be noted therein, subject to normal year-end audit
adjustments and the lack of complete footnote disclosure in the case of
unaudited statements.
(iii) Except as set forth in the Company Filings filed with the SEC (the
"Company SEC Filings") between December 31, 2000 and the date hereof, since
December 31, 2000, the Company and its subsidiaries have not incurred any
liability other than in the ordinary course of business consistent with
past practice (other than (A) liabilities with respect to expenses and
charges related to this Agreement and the transactions contemplated hereby,
(B) liabilities which are not required to be reflected in a balance sheet
prepared in accordance with GAAP and (C) liabilities that, in the
aggregate, are not material to the Company and its subsidiaries taken as a
whole).
(iv) Except as set forth in the Company SEC Filings filed between
December 31, 2000 and the date hereof, since December 31, 2000, the Company
and its subsidiaries have conducted their respective businesses in the
ordinary and usual course consistent with past practice (excluding the
incurrence of liabilities with respect to expenses and charges related to
this Agreement and the transactions contemplated hereby) and no event has
occurred or circumstance arisen that, individually or taken together with
all other facts, circumstances and events, constitutes a Material Adverse
Effect on the Company.
(h) Litigation. Except as set forth in the Company SEC Filings filed between
December 31, 2000 and the date hereof, there is no private or governmental
suit, claim, action or proceeding (other than those arising in the ordinary
course of business in connection with loan workouts or assumptions) pending,
nor to the Company's knowledge threatened, against the Company or any of its
subsidiaries or, to the Company's knowledge, against any of their respective
directors, officers or employees relating to the performance of their duties in
such capacities or against or affecting any properties of the Company or its
subsidiaries that, if adversely determined, would have a Material Adverse
Effect on the Company. Except as disclosed in the Company SEC Filings filed
between December 31, 2000 and the date hereof, there are no material judgments,
decrees, stipulations or orders against the Company or its subsidiaries or
enjoining any of them or, to the knowledge of the Company, any of their
respective directors, officers or employees in respect of, or the effect of
which is to prohibit, any business practice or the acquisition of any property
or the conduct of business in any area.
(i) Regulatory Matters.
(i) Except as set forth in the Company SEC Filings filed between
December 31, 2000 and the date hereof, neither the Company nor any of its
subsidiaries or properties is a party to or is subject to any currently
effective order, decree, agreement, memorandum of understanding or similar
arrangement with, or any currently effective commitment letter or similar
submission to, or extraordinary supervisory letter from, any federal or
state governmental agency or authority charged with the supervision or
regulation of financial institutions or issuers of securities or engaged in
the insurance of deposits (including, without limitation, the OTS and the
FDIC) or the supervision or regulation of the Company or any of its
subsidiaries (collectively, the "Regulatory Authorities") which would have
a Material Adverse Effect on the Company.
(ii) Neither the Company nor any of its subsidiaries has been advised by
any Regulatory Authority that such Regulatory Authority is contemplating
issuing or requesting (or is considering the appropriateness of issuing or
requesting) any such order, decree, agreement, memorandum of understanding,
commitment letter, supervisory letter or similar submission.
(j) Compliance with Laws. The Company and each of its subsidiaries:
(i) is in compliance with all applicable federal, state, local and
foreign statutes, laws, regulations, ordinances, rules, judgments, orders
or decrees applicable thereto or to the employees conducting their
respective businesses ("Applicable Laws"), including, without limitation,
the Equal Credit Opportunity Act, the Fair Housing Act, the Community
Reinvestment Act, the Home Mortgage Disclosure Act and all
13
other applicable fair lending laws and other laws relating to
discriminatory lending or other business practices, except for any such
non-compliance that, individually or in the aggregate, do not constitute a
Material Adverse Effect on the Company;
(ii) has made all filings, applications and registrations with all
Governmental Authorities that are required in order to permit them to own
or lease their properties and to conduct their businesses substantially as
presently conducted, except in each case as does not constitute a Material
Adverse Effect on the Company; and
(iii) has not received any outstanding notification or communication
from any federal or state (not including local) Governmental Authority (A)
asserting that the Company or any of its subsidiaries is not in compliance
with, or may not be in compliance with, any Applicable Law that such
federal or state (not including local) Governmental Authority enforces or
(B) threatening to revoke any license, franchise, permit, or governmental
authorization (nor, to the Company's knowledge, do any grounds for any of
the foregoing exist).
(k) Material Contracts; Defaults. Except as set forth in Section 4.2(k) of
the Company Disclosure Schedule and except for those agreements and other
documents filed as exhibits (the "Material Contracts") to the Company SEC
Filings, neither the Company nor any of its subsidiaries is a party to, bound
by or subject to any agreement, contract, arrangement, commitment or
understanding (whether written or oral) (i) that is a "material contract"
within the meaning of Item 601(b)(10) of the SEC's Regulation S-K or (ii) that
materially restricts the conduct of business by the Company or any of its
subsidiaries. Neither the Company nor any of its subsidiaries is in default in
any material respect under any Material Contract or under any other contract if
such default constitutes a Material Adverse Effect on the Company, and there
has not occurred any event that, with the lapse of time or the giving of notice
or both, would constitute such a default.
(l) No Brokers. No action has been taken by the Company that would give rise
to any valid claim against any party hereto for a brokerage commission,
finder's fee or other like payment with respect to the transactions
contemplated by this Agreement, excluding a fee to be paid to Sandler X'Xxxxx
which fee is payable solely by the Company.
(m) Employee Benefit Plans.
(i) Section 4.2(m) of the Company Disclosure Schedule sets forth a true
and complete list of each employee benefit plan, as defined in Section 3(3)
of the Employee Retirement Income Security Act of 1974, as amended
("ERISA") and each other plan, arrangement and agreement providing employee
benefits (collectively, the "Plans"), that covers current or former
employees of the Company or any subsidiary or affiliate and is presently
maintained by the Company or any subsidiary or any affiliate thereof or by
any trade or business, whether or not incorporated (an "ERISA Affiliate"),
which together with the Company would be deemed a "single employer" within
the meaning of Section 4001 of ERISA. Except as disclosed on Section 4.2(m)
of the Company Disclosure Schedule, none of the Plans is a "multiemployer
plan," as defined in Section 3(37) of ERISA. The Company has delivered or
made available to Buyer: copies of all such Plans; any related trust
agreements, group annuity contracts, insurance policies or other funding
agreements or arrangements relating thereto; the most recent determination
letter, if any, from the Internal Revenue Service with respect to each of
the Plans which is subject to ERISA ("ERISA Plans"); actuarial valuations,
if applicable, for the most recent plan year or which such valuations are
available; the current summary plan descriptions; and the annual
return/report on Form 5500 and summary annual reports for each of the Plans
for each of the last three years.
(ii) Except as disclosed on Section 4.2(m) of the Company Disclosure
Schedule, each of the ERISA Plans is in compliance in all material respects
with all applicable provisions of law, including the Code and ERISA and
neither the Company or any ERISA Affiliate currently maintains or sponsors
a defined benefit pension plan as defined in Section 414(j) of the Code and
neither the Company nor any ERISA Affiliate has ever maintained or
sponsored any such plan that could give rise to a liability against the
Company or any subsidiary.
14
(iii) Except as disclosed on Section 4.2(m) of the Company Disclosure
Schedule, the written terms of each of the Plan, and any related trust
agreement, group annuity contract, insurance policy or other funding
arrangement are in compliance with all applicable laws in all material
respects including ERISA, the Code, and the Age Discrimination in
Employment Act, as applicable, and each of such Plans has been administered
in substantial compliance with such requirements.
(iv) Except with respect to income taxes on benefits paid or provided,
no income, excise or other tax or penalty (federal or state) has been
waived or excused, has been paid or is owed by any Person (including, but
not limited to, any Plan, any Plan fiduciary, the Company and ERISA
Affiliates) with respect to the operations of, or any transactions with
respect to, any Plan. No action has been taken, nor has there been any
failure to take any action, nor is any action or failure to take action
contemplated, that would subject any person or entity to any material
liability for any tax or penalty in connection with any Plan. No reserve
for any taxes or penalties has been established with respect to any Plan,
nor has any advice been given to any person with respect to the need to
establish such a reserve.
(v) There are no (A) actions, suits, arbitrations or claims (other than
routine claims for benefits), (B) legal, administrative or other
proceedings or governmental investigations or audits or (C) complains to or
by any governmental entity, which are pending, anticipated, or to the
Company's best knowledge, threatened, against the Plans or their assets.
(vi) The present value of the future cost to the Company and ERISA
Affiliates of post-retirement medical benefits that the Company or any
ERISA Affiliate is obligated to provide, calculated on the basis of
actuarial assumptions the Company considers reasonable estimates of future
experience and which have been provided to Acquisition, does not exceed the
amount specified in Schedule 2(m)(vi) hereto.
(vii) Neither the Company or any ERISA Affiliate, nor any of the ERISA
Plans, nor any trust created thereunder, nor any trustee or administrator
thereof has engaged in a transaction in connection with which the Company
or any ERISA Affiliate, any of the ERISA Plans, any such trust, or any
trustee or administrator thereof, or any party dealing with the ERISA Plans
or any such trust could be subject to either a civil penalty assessed
pursuant to Section 409 or 502(i) of ERISA or a tax imposed pursuant to
Section 4975 or 4976 of the Code. Neither the Company nor any ERISA
Affiliate is, or, as a result of any actions, omissions, occurrences or
state or facts existing prior to the Effective Time, may become liable for
any tax imposed under Section 4978 of the Code.
(n) Labor Matters. Neither the Company 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 the
Company 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 the Company
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 the
Company's knowledge, threatened, nor is the Company aware of any activity
involving any employee of the Company or any of its subsidiaries seeking to
certify a collective bargaining unit or engaging in other organizational
activity.
(o) Rights Agreement. The Company has taken all action necessary to ensure
that the entering into of this Agreement will not enable or require the
Company's Rights issued under the Amended and Restated Rights Agreement, dated
as of March 26, 1999, between the Company and American Stock Transfer & Trust
Company, as Rights Agent (the "Rights Agreement") to be exercised, distributed
or triggered or cause Buyer to become an "15% Stockholder" (as defined in the
Rights Agreement).
(p) Environmental Matters. To the knowledge of the Company, neither the
conduct, participation in management nor operation by the Company or its
subsidiaries nor any condition of any property presently or previously owned,
leased, managed (including participation in management) or operated by any of
them (including, without limitation, in a fiduciary or agency capacity)
violates or violated in any material respect any
15
applicable local, state and federal environmental, health and safety laws and
regulations, including, without limitation, the Resource Conservation and
Recovery Act, the Comprehensive Environmental Response, Compensation, and
Liability Act, the Clean Water Act, the Federal Clean Air Act, and the
Occupational Safety and Health Act, each as amended, regulations promulgated
thereunder, and state counterparts (collectively, "Environmental Laws") that
would constitute a Material Adverse Effect on the Company and that is not
reflected in the consolidated financial statements of the Company. Neither the
Company nor any of its subsidiaries has received any notice from any
individual, corporation, partnership, limited liability company, association,
trust, unincorporated organization or other legal entity (each, a "Person")
that the Company or its subsidiaries or the operation or condition of any
property ever owned, leased, managed (including participation in management),
operated or held as collateral or in a fiduciary capacity by any of them are or
were in violation of or otherwise are alleged to have any material liability
under any Environmental Law, which would constitute a Material Adverse Effect
and is not reflected in the consolidated financial statements of the Company.
(q) Tax Matters.
(i) (A) The Company and its subsidiaries have prepared in good faith and
duly and timely filed all Tax Returns (as defined below) that they were
required to file, and all such Tax Returns are complete and accurate in all
material respects; (B) the Company and its subsidiaries have paid in full
all Taxes (as defined below) shown on such Tax Returns (including interest
and penalties) or have provided adequate reserves for any such Taxes in the
financial statements of the Company in accordance with generally accepted
accounting principles, except for such Taxes as could not reasonably be
expected to be material to the Company and its subsidiaries, taken as a
whole; (C) there are no pending or, to the knowledge of the Company,
threatened audits, examinations, assessments or proposed assessments of a
deficiency, or refund litigation with respect to any Taxes of the Company
or its subsidiaries, except as could not, individually or in the aggregate,
constitute a Material Adverse Effect; (D) all Taxes, interest, additions
and penalties due with respect to completed and settled examinations or
concluded litigation relating to Taxes of the Company or its subsidiaries
have been paid in full or adequate provision has been made for any such
Taxes (in accordance with generally accepted accounting principles) on the
financial statements of the Company; and (E) neither the Company nor its
subsidiaries has executed an extension or waiver of any statute of
limitations on the assessment or collection of any Tax due that is
currently in effect.
(ii) (A) No Liens or other security interests have been imposed on any
assets of the Company or its subsidiaries in connection with any failure
(or alleged failure) to pay any Tax, except for such liens and security
interests that are not, individually or in the aggregate, material to the
Company and its subsidiaries or that have arisen with respect to Taxes that
are not yet due and payable; (B) neither the Company nor any of its
subsidiaries is a party to any tax allocation or sharing agreement under
which it has obligations to a party other than the Company or its
subsidiaries or is or has been a member of an affiliated group filing
consolidated or combined tax returns (other than a group the common parent
of which is or was the Company); and (C) neither the Company nor any of its
subsidiaries has made any material payments, is obligated to make any
material payments or is a party to any agreement that under certain
circumstances could obligate it to make any material payments that would
not be deductible under Section 280G of the Code.
(iii) For purposes of this Agreement, (A) "Tax" or "Taxes" means any
federal, state, local or foreign taxes, charges, fees, levies or other
assessments, however denominated, including, without limitation, all net
income, gross income, gains, gross receipts, sales, use, ad valorem, goods
and services, capital, production, transfer, franchise, windfall profits,
license, withholding, payroll, employment, disability, employer health,
excise, estimated, severance, stamp, occupation, property, environmental,
unemployment or other taxes, custom duties, fees, assessments or charges of
any kind whatsoever, together with any interest and any penalties,
additions to tax or additional amounts imposed by any taxing authority and
(B) "Tax Returns" means any return, declaration, report, claim or refund,
or information return or statement relating to Taxes, including any
schedule or attachment thereto, and including any amendment thereof.
16
(r) Books and Records. The books and records of the Company and its
subsidiaries have been fully, properly and accurately maintained in all
material respects, and there are no material inaccuracies or discrepancies of
any kind contained or reflected therein (other than minutes for meetings held
within the last 30 days which have not been prepared or approved and subject to
the proviso that copies furnished or made available to Buyer may have excluded
information relating to the negotiation of this Agreement or covered by the
attorney-client, work product or other privilege).
(s) Indemnification Other than pursuant to the provisions of its charter or
bylaws or Applicable Law, or as disclosed in a Company Filing, neither the
Company nor its subsidiaries is a party to any indemnification agreement with
any of its present directors, officers, employees, agents or other Persons who
serve in any other capacity with any other enterprise at the request of
Company.
(t) Intellectual Property. To the knowledge of the Company, and except for
such matters as would not constitute a Material Adverse Effect on the Company,
(i) the Company and its subsidiaries own or possess valid and binding licenses
and other rights to use all material patents, copyrights, trade secrets, trade
names, service marks and trademarks used in their respective businesses; (ii)
the Company and its subsidiaries have not received any notice with respect
thereto that asserts the rights of others; and (iii) the Company and its
subsidiaries have in all material respects performed all the obligations
required to be performed by them, and are not in default in any material
respect under any license, contract, agreement, arrangement, or commitment
relating to any of the foregoing.
(u) Disclosures and Diligence. All material (i) historical information,
including, without limitation, the identity of documents and agreements, and
(ii) information concerning compensation, severance and other employee
benefits, set forth in the Company Disclosure Schedule has previously been
provided or made available to Buyer or its representatives in the course of
their previous due diligence investigations of the Company.
Section 4.3. Representations and Warranties of Buyer. Buyer hereby
represents and warrants to the Company as follows:
(a) Organization and Standing. Buyer is a corporation, duly organized,
validly existing and in good standing under the laws of the State of Illinois.
Each of Buyer and its subsidiaries is duly qualified to do business and is in
good standing in the states of the United States and any foreign jurisdictions
where its ownership or leasing of property or assets or the conduct of its
business requires it to be so qualified, except for such jurisdictions where
the failure to be so qualified, individually or in the aggregate, would not
constitute a Material Adverse Effect on Buyer. Buyer has the corporate power
and authority to execute, deliver and perform its obligations under this
Agreement and to consummate the transactions contemplated hereby.
(b) Corporate Authority. This Agreement and the transactions contemplated
hereby have been duly authorized by all necessary corporate action of Buyer on
or prior to the date hereof. This Agreement is a valid and legally binding
obligation of Buyer, enforceable in accordance with its terms, except as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium, fraudulent transfer and similar laws of general
applicability relating to or affecting creditors' rights or by general equity
principles.
(c) Approvals, No Defaults.
(i) No consents or approvals of, or filings or registrations with, any
Governmental Authority are required to be made or obtained by Buyer,
Acquisition Sub or any other of Buyer's subsidiaries in connection with the
execution, delivery or performance by Buyer or Acquisition Sub of this
Agreement or to consummate the Merger, except for (A) filings and approvals
of applications with and by the OTS, the FDIC, the DOJ, the NASD, the
Federal Reserve Board and the FTC, and (B) the filing of the Certificate of
Merger with the Delaware Secretary pursuant to the DGCL. To the knowledge
of Buyer, there is no reason (specific to Buyer, Acquisition Sub or any
other of Buyer's subsidiaries or affiliates) that may cause any
17
Governmental Authority to deny or withhold any consent or approval required
to be obtained in connection with the transactions contemplated by this
Agreement (other than such matters, if any, as have been disclosed in
Buyer's filings with the SEC between December 31, 2000 and the date
hereof).
(ii) Subject to receipt of the regulatory approvals referred to in
Section 4.3(c)(i) and expiration of related waiting periods, the execution,
delivery and performance of this Agreement by Buyer and the consummation of
the transactions contemplated hereby do not and will not (A) constitute a
breach or violation of, or a default under, or give rise to any Lien, any
acceleration of remedies or any right of termination or cancellation under,
any law, rule or regulation or any judgment, decree, writ, injunction,
statute, order, governmental permit or license, or note, bond, mortgage,
agreement, indenture or instrument of Buyer or any subsidiary of Buyer, or
to which Buyer or any of Buyer's subsidiaries or any of their respective
properties or assets is subject or bound, (B) constitute a breach or
violation of, or a default under, the certificate of incorporation,
charter, bylaws or similar organizational documents of Buyer or any of
Buyer's subsidiaries or (C) require any consent or approval under any such
law, rule, regulation, judgment, decree, writ, injunction, statute, order,
governmental permit or license, note, bond, mortgage, agreement, indenture
or instrument, except in each case for such matters as would not constitute
a Material Adverse Effect on Buyer.
(d) Regulatory Matters. Except for such matters as would not constitute a
Material Adverse Effect on Buyer, (i) neither Buyer nor any of its subsidiaries
or properties is a party to or is subject to any order, decree, agreement,
memorandum of understanding or similar agreement with, or a commitment letter
or similar submission to, or extraordinary supervisory letter from, any federal
or state governmental agency or authority charged with the supervision or
regulation of financial institutions or issuers of securities or engaged in the
insurance of deposits (including, without limitation, the OTS, the Federal
Reserve Board and the FDIC) or the supervision or regulation of Buyer or any of
its subsidiaries (collectively, the "Buyer Regulatory Authorities"); and (ii)
neither Buyer nor any of its subsidiaries has been advised by any Buyer
Regulatory Authority that such Buyer Regulatory Authority is contemplating
issuing or requesting (or is considering the appropriateness of issuing or
requesting) any such order, decree, agreement, memorandum of understanding,
commitment letter, supervisory letter or similar submission.
(e) Knowledge of Misrepresentations. As of the date of this Agreement, Buyer
has no knowledge of any breach by the Company of any representation or warranty
made by the Company herein.
(f) Financial Statements.
(i) Buyer has delivered to the Company true and correct copies of
Buyer's audited consolidated financial statements as of and for the years
ended December 31, 2000 and December 31, 1999, which fairly present the
consolidated financial position, results of operations, changes in
stockholders' equity and changes in cash flows of Buyer and its
subsidiaries as of December 31, 2000 and December 31, 1999 and for the
years then ended, in each case in accordance with GAAP, consistently
applied during the periods involved, except in each case as may be noted
therein (collectively, the "Buyer Financial Statements").
(ii) Except as set forth in the Buyer Financial Statements, since
December 31, 2000, no event has occurred or circumstance arisen that,
individually or taken together with all other facts, circumstances and
events, constitute a Material Adverse Effect on Buyer.
(g) No Brokers. No action has been taken by Buyer that would give rise to
any valid claim against any party hereto for a brokerage commission, finder's
fee or other like payment with respect to the transactions contemplated by this
Agreement, except as set forth in Section 4.3(g) of the Buyer Disclosure
Schedule.
18
ARTICLE V.
COVENANTS
Section 5.1. Acquisition Proposals.
(a) The Company shall not, directly or indirectly, take any action to: (i)
encourage (including by way of furnishing nonpublic information), solicit,
initiate or facilitate any Acquisition Proposal (as defined below), (ii) enter
into any agreement with respect to any Acquisition Proposal or (iii)
participate in any way in discussions or negotiations with, or furnish any
information to, any Person in connection with, or take any other action to
facilitate any inquiries or the making of any proposal that constitutes, or
could reasonably be expected to lead to, any Acquisition Proposal.
(b) Notwithstanding anything to the contrary herein, if the Company Board
determines in good faith, after consultation with outside counsel, that it is
necessary to do so to discharge properly its fiduciary duties to its
Stockholders (as such duties would exist in the absence of this Section 5.1),
or if so required by any Regulatory Authority, the Company may, in response to
an Acquisition Proposal that the Company Board determines in good faith is
reasonably likely to result in a Superior Proposal (as defined below), and
subject to the Company's compliance with Section 5.1(c), furnish information
with respect to the Company and its subsidiaries to the Person making such
Acquisition Proposal pursuant to a customary confidentiality agreement the
terms of which are no more favorable to the other party to such confidentiality
agreement than the Confidentiality Agreement (as defined below) and (ii)
participate in discussions with respect to such Acquisition Proposal. It is
expressly understood and agreed that, with respect to the foregoing proviso,
the Company's legal and financial advisors shall be able to make inquiries, and
engage in discussions, with any party that has made an Acquisition Proposal
(and such party's legal and financial advisors) in order to elicit information
to allow the Company Board to determine in good faith if such Acquisition
Proposal is reasonably likely to result in a Superior Proposal.
(c) The Company will, as promptly as practicable, communicate to Buyer any
inquiry received by it relating to any potential Acquisition Proposal and the
material terms of any such proposal or inquiry, including the identity of the
Person and its affiliates making the same, that it may receive in respect of
any such transaction, or of any such information requested from such Person or
of any such negotiations or discussions being sought to be initiated with such
Person.
(d) "Acquisition Proposal" means any offer or proposal concerning any
merger, consolidation or similar transaction involving, or any purchase of all
or any significant portion of the assets, deposits or any equity securities of,
the Company or any of its subsidiaries; provided, however, that offers,
proposals or transaction relating to acquisitions of currently outstanding
equity securities by third parties representing less than 10% of the voting
power of the Company shall not be deemed Acquisition Proposals. "Superior
Proposal" means a bona fide Acquisition Proposal made by a third party which
was not solicited by the Company, its subsidiaries, representatives or other
affiliates and which, in the good faith judgment of the Company Board, taking
into account, to the extent deemed appropriate by the Company Board, the
various legal, financial and regulatory aspects of the proposal and the Person
making such proposal (i) if accepted, is reasonably likely to be consummated
and (ii) if consummated, is reasonably likely to result in a transaction that
is more favorable to the Stockholders (in their capacity as Stockholders), from
a financial point of view, than the transactions contemplated by this
Agreement.
(e) If the Company Board is prepared to accept a Superior Proposal, then the
Company shall give Buyer 48 hours notice that the Company is prepared to accept
the Superior Proposal; provided that the Company may not definitively accept a
Superior Proposal unless the Company concurrently therewith terminates this
Agreement pursuant to Section 7.1(d) and, thereafter makes any payment required
by Section 7.2(b).
19
Section 5.2. Labor and Employment Matters.
(a) Buyer shall, and shall cause the Bank to, provide the employees of the
Company or any of its subsidiaries who are retained by Buyer or the Bank after
the consummation of the Merger with benefits under stock plans, bonus plans and
all other benefit plans of Buyer on substantially the same basis as other
similarly situated employees of Buyer. Each of these employees of the Company
or its subsidiaries will be eligible to participate immediately in said plans
and will be credited for eligibility, participation, vesting and accrual
purposes, with such employee's respective years of past service with the
Company (or other prior service so credited by the Company) as though they had
been employees of Buyer. Buyer shall, and shall cause the Bank to, honor in
accordance with their terms all the employee benefit and deferred compensation
obligations to current and former employees and directors of the Company and
the Bank accrued as of the Effective Time of the Merger. The Company and its
ERISA Affiliates shall (to the extent permissible under the Plans and
Applicable Laws) take any actions necessary or reasonably requested by Buyer to
cause as of the Closing Date, the termination of all of the Plans maintained by
the Company or any ERISA Affiliate that cover employees and directors of the
Company and its ERISA Affiliates; provided, however, that the Company 401(k)
Plan shall not be terminated but shall be merged with the Buyer 401(k) Plan as
soon as administratively practicable after the Closing Date. Buyer also agrees
that any pre-existing condition limitation or exclusion or waiting period in
its health plans shall not apply to the employees of the Company or any of its
subsidiaries who are retained after the consummation of the Merger or to their
spouses and dependents who are covered under similar health plans of the
Company and its ERISA Affiliates on the Closing Date and who change coverage to
Buyer's health plans at the time such employees are first given the option to
enroll in Buyer's health plans and that such employees shall be given credit
for co-payments or deductibles satisfied, made or incurred prior to Closing
Date. With respect to any employee with a satisfactory work record not covered
by an employment contract or change in control agreement who is retained after
the Closing and terminated without cause within six (6) months after the
Closing, Buyer shall assume and provide the benefits under the Company's
Personnel Manual regarding "Reduction in Force (Lay-Off)" and the related
"Special Severance and Benefits Program", with full credit for length of
service to the Company and Buyer; provided, however, that in lieu of providing
such benefits, Buyer may, at its sole option, elect to provide any or all of
such employees with a cash payment or, as applicable, reimbursement of actual
costs (in either case, including a "gross up" for Taxes) in such amount
sufficient to allow such employees to purchase equivalent benefits on an
individually negotiated basis.
(b) As of the Closing, Buyer shall expressly assume any obligation of the
Company and its subsidiaries under the employment, change-in-control and other
agreements listed on Section 5.2 of the Company Disclosure Schedule; provided,
however, that to the extent that such agreements provide for post-termination
benefits other than cash, Buyer may, at its sole option, elect to provide any
or all of such employees with a cash payment or reimbursement of actual costs
(in either case, including a "gross up" for Taxes) in such amount sufficient to
allow such employees to purchase equivalent benefits on an individually
negotiated basis.
(c) The Company shall deliver or cause to be delivered to Buyer at the
Closing the resignations of the members of the Board of Directors of the
Company, the Bank and their subsidiaries, effective at the Closing. In
addition, such officers or employees of the Company listed on Section 5.2(c) of
the Company Disclosure Schedule (or otherwise requested by Buyer in writing
from time to time prior to the Closing) will be terminated immediately after
the Closing. It is acknowledged and agreed by Buyer and the Company that the
resignations and terminations provided for in the two prior sentences shall be
deemed to be "termination" following a "change of control," as these terms are
defined in any employment, severance, change-in-control or similar agreement or
arrangement relating to such persons, by the Company without cause for purposes
of determining any termination, retirement, severance, change-in-control or
similar payments or other benefit due to such persons, and Buyer shall cause
all such payments to be paid to such persons at the Closing or otherwise in
accordance with the terms of such agreements or arrangements. Such officers or
employees of the Company listed on Section 5.2(c) of the Company Disclosure
Schedule (or otherwise requested by Buyer in writing from time to time prior to
the Closing) shall not be considered "retained" under Section 5.2(a) and shall
not be entitled to participate in any of Buyer's or its Affiliates' employee
benefit plans and programs, severance arrangements or other employee benefit
arrangements.
20
Section 5.3. Access and Information. Upon reasonable notice and subject to
Applicable Laws relating to the exchange of information, the Company shall, and
shall cause each of its subsidiaries to, afford to the officers, employees,
accountants, counsel and other representatives of Buyer reasonable access,
during normal business hours during the time period from the date of this
Agreement to the Effective Time or date of termination, as applicable, to all
its properties, books, contracts, commitments, records, officers, employees,
accountants, counsel and other representatives and, during such period, except
as otherwise provided in this Agreement, the Company shall, and shall cause its
subsidiaries to, make available to Buyer (a) a copy of each report, schedule
and other document filed or received by it during such period pursuant to the
requirements of federal securities laws or federal or state banking laws (other
than reports or documents which the Company is not permitted to disclose under
Applicable Law) and (b) all other information concerning its business,
properties and personnel as Buyer may reasonably request; provided that such
requested information may be presented in the format maintained by the Company
or its subsidiaries in the ordinary course of business. Neither the Company nor
any of its subsidiaries shall be required to provide access to or to disclose
information under this Agreement where such access or disclosure would violate
or prejudice the rights of their customers, jeopardize any attorney-client,
work product or other privilege, contravene any law, rule, regulations, order,
judgment, decree, fiduciary duty or binding agreement entered into prior to the
date of this Agreement or involve information regarding the rights and
obligations of the Company or the Bank under this Agreement. The parties hereto
will use reasonable efforts to make appropriate substitute disclosure
arrangements under circumstances in which the restrictions of the preceding
sentence apply. Buyer will hold all such information in confidence in
accordance with the provisions of the Confidentiality Agreement, dated
April 25, 2001, between Buyer and the Company (the "Confidentiality
Agreement").
Section 5.4. Actions; Regulatory Matters.
(a) Subject to the terms and conditions herein provided, each of the parties
hereto agrees to use its commercially reasonable efforts to take promptly, or
cause to be taken promptly, all actions and to do promptly, or cause to be done
promptly, all things necessary, proper or advisable under Applicable Law to
consummate and make effective the transactions contemplated by this Agreement
as soon as practicable, including, without limitation, promptly preparing and
filing all necessary documentation, effecting all applications, notices,
registrations, petitions and filings, and obtaining as promptly as practicable
all permits, consents, approvals, extensions, waivers and authorizations of all
third parties and Governmental Authorities which are necessary or advisable to
consummate the transactions contemplated by this Agreement and complying with
the terms and conditions of all such permits, consents, approvals and
authorizations.
(b) The Company and Buyer shall have the right to review in advance, and to
the extent practicable each will consult the other on, in each case subject to
Applicable Laws relating to the exchange of information, all the information
relating to the Company or Buyer, as the case may be, and any of their
respective subsidiaries, which appear in any filing made with, or written
materials submitted to, any third party or any Governmental Authority in
connection with the transactions contemplated by this Agreement. In exercising
the foregoing right, each of the parties hereto shall act reasonably and as
promptly as practicable. The parties hereto agree that they will consult with
each other with respect to the obtaining of all permits, consents, approvals
and authorizations of all third parties and Governmental Authorities necessary
or advisable to consummate the transactions contemplated by this Agreement and
each party will keep the other apprised of the status of matters relating to
completion of the transactions contemplated herein.
(c) Buyer and the Company shall, upon request, furnish each other with all
information concerning themselves, their subsidiaries, directors, officers and
stockholders and such other matters as may be reasonably necessary or advisable
in connection with the Proxy Statement or any other statement, filing, notice
or application made by or on behalf of Buyer or the Company or any of their
respective subsidiaries to any Governmental Authority in connection with the
Merger and the other transactions contemplated by this Agreement.
21
(d) The Company shall promptly furnish Buyer, and Buyer shall promptly
furnish the Company, with copies of written communications received by the
Company or Buyer, respectively, or any of their respective subsidiaries,
affiliates or associates (as such terms are defined in Rule 12b-2 under the
Securities Exchange Act of 1934, as amended, as in effect on the date of this
Agreement) from, or delivered by any of the foregoing to, any Governmental
Authority in respect of the transactions contemplated hereby. The parties
hereto and their subsidiaries shall not be required to provide access to or
disclose information where such access or disclosure would jeopardize the
attorney-client, work product or other privilege of any party or any subsidiary
or would contravene any law, rule, regulation, order, judgment, decree or
binding agreement entered into prior to the date hereof. The parties will use
reasonable efforts to make appropriate substitute disclosure arrangements under
the circumstances in which the restrictions of the preceding sentence apply.
(e) Buyer covenants that it shall have adequate funds and sufficient
regulatory capital to consummate the transactions contemplated hereby.
Section 5.5. Publicity. No press release or other public disclosure of
matters related to this Agreement or any of the transactions contemplated
hereby shall be made by a party hereto unless the other party shall have
provided its prior consent to the form and substance thereof; provided,
however, that nothing herein shall be deemed to prohibit any party hereto from
making any disclosure that its counsel deems necessary or advisable in order to
fulfill such party's disclosure obligations imposed by Applicable Law.
Section 5.6. Proxy Statement. The Company shall promptly prepare a proxy
statement for use in connection with the Company's meeting of stockholders
described below (including any supplements or amendments thereto, the "Proxy
Statement"), and the Company shall promptly, after final SEC review thereof and
receipt of any other necessary approvals from any Governmental Authority, mail
the Proxy Statement to all holders of record (as of the applicable record date)
of shares of Company Common Stock.
Section 5.7. Stockholders' Meeting. The Company shall take all action
necessary, in accordance with Applicable Law and its Certificate of
Incorporation and bylaws, to convene a meeting or obtain written consent of the
holders of Company Common Stock as promptly as practicable for the purpose of
considering and taking action required by this Agreement. Except to the extent
legally required for the discharge by the Company Board of its fiduciary
duties, the Company Board shall recommend that the holders of the Company
Common Stock vote in favor of and approve the Merger and adopt this Agreement.
Section 5.8. Notification of Certain Matters.
(a) Default; Material Adverse Effect. The Company and Buyer shall each give
prompt notice to the other of: (i) any notice of, or other communication
relating to, a default or event that, with notice or lapse of time or both,
would become a default, received by it or any of its subsidiaries subsequent to
the date of this Agreement and prior to the Effective Time, under any contract
material to the financial condition, properties, businesses or results of
operations of such party and its subsidiaries taken as a whole to which such
party or any such subsidiary is a party or is subject; (ii) any Material
Adverse Effect with respect to such party or the occurrence of any event which,
so far as reasonably can be foreseen at the time of its occurrence, is
reasonably likely to result in a Material Adverse Effect; and (iii) any notice
or other communication from any third party alleging that the consent of such
third party is or may be required in connection with the transactions
contemplated by this Agreement, if a failure to obtain such consent would
constitute a Material Adverse Effect.
(b) Material Breach. Each party shall promptly advise the other (i) of any
circumstance or event that such party believes would, or would be reasonably
likely to, cause or constitute a material breach of any of its representations,
warranties or covenants contained herein and (ii) in the event that it
determines that any of the conditions to Closing set forth in Article VI cannot
be fulfilled.
(c) Pending OTS, State Regulator or FDIC Exams. Within five (5) business
days of receiving notification thereof, the Company shall notify Buyer of any
examination reviews with respect to the Company
22
that are to be conducted by the OTS, any state banking commission or other
regulatory authority ("State Regulator") or the FDIC or by any other
Governmental Authority under any Applicable Law, and shall report to Buyer on a
regular basis (subject to Applicable Law) on the preliminary and final results
of any such examination review. The Company shall request the consent of each
Governmental Authority conducting any such examination to the release of such
results to Buyer and shall use reasonable efforts to secure such release.
Section 5.9. Additional Agreements. In case at any time after the Effective
Time any further action is necessary or desirable to carry out the purposes of
this Agreement, or to vest the Surviving Company with full title to all
properties, assets, rights, approvals, immunities and franchises of any of the
parties to the Merger, the proper officers and directors of each party to this
Agreement and their respective subsidiaries shall take all such necessary
action as may be reasonably requested by the other party hereto.
Section 5.10 Filings. The Company agrees that through the Effective Time of
the Merger, the reports, registrations, statements and other filings required
to be filed with any applicable Governmental Authority by the Company or the
Bank will comply in all material respects with all the applicable statutes,
rules and regulations enforced or promulgated by the Governmental Authority
with which it will be filed and none will contain, as of the date of filing,
any untrue statement of material fact or omit 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.
Section 5.11 [Intentionally Omitted].
Section 5.12 Accuracy of Information. Each of the Company and Buyer
covenants and agrees that all information furnished by it or any of its
subsidiaries for inclusion in all applications or statements filed with the
appropriate regulatory authorities for or in connection with any approval of,
or consent to, the Merger will comply in all material respects with the
provisions of Applicable Law, and will not contain any untrue statement of
material fact or omit to state any material fact required to be stated therein
or necessary to make the statements contained therein, in light of the
circumstances under which they were made, not misleading, in each case, as of
the time such information is so furnished, the date any such consent or
approval is granted, and (in connection with information furnished for
inclusion in the Proxy Statement) the date of mailing of the Proxy Statement
and the date of the Special Meeting of Stockholders.
Section 5.13. Indemnification and Insurance.
(a) Following the Effective Time, subject to Applicable Law, Buyer shall
indemnify, defend and hold harmless (and advance expenses to) the current or
former directors, officers, employees or agents of the Company, the Bank and
their respective subsidiaries (each, an "Indemnified Party", and collectively,
"Indemnified Parties") against all costs or expenses (including reasonable
attorneys' fees), judgments, fines, losses, claims, damages or liabilities
(collectively, "Costs" as incurred, in connection with any claim, action, suit,
proceeding or investigation, whether civil, criminal, administrative or
investigative, arising out of actions or omissions occurring at or prior to the
Effective Time (including, without limitation, the transactions contemplated by
this Agreement) to the fullest extent that the Company, the Bank or their
respective subsidiaries are required to indemnify (and advance expenses to) the
Indemnified Parties under the laws of their respective jurisdictions of
incorporation, their respective charters, their respective bylaws and any
agreements entered into between the Company, the Bank or any of their
respective subsidiaries and such Indemnified Parties (the "Indemnification
Provisions").
(b) Buyer will cause to be maintained, for a period of six years from the
Effective Time, the Company's current directors' and officers' insurance and
indemnification policy ("Company D&O Insurance") covering those Persons (the
"Covered Persons")who are currently covered by Company D&O Insurance to the
extent that it provides coverage for events or acts occurring prior to or at
the Effective Time (through the continuation or endorsement of the policy for
Company D&O Insurance or the purchase of a "tail-end rider"), provided, that
Buyer may, in lieu of maintaining such existing Company D&O Insurance, cause
coverage to be provided
23
under any policy maintained for the benefit of Buyer or any of its subsidiaries
(a "Buyer Policy"), so long as the terms thereof are substantially similar to
those of the existing Company D&O Insurance (including, without limitation,
with respect to the continuity dates and the extent of coverage for prior
events or acts) to the extent, in either circumstance, that the annual premiums
for such coverage do not exceed 150% of the annual premiums paid by the Company
or the Bank for such coverage as of the date of this Agreement. To the extent
that such annual premiums do exceed 150% of the annual premiums currently paid
by the Company or the Bank for such coverage, Buyer shall use its best efforts
to obtain the maximum amount of such coverage that may be purchased for an
annual premium equal to 150% of the annual premiums currently paid by the
Company or the Bank. The provision of insurance coverage described herein is
not intended to alter or reduce the right of indemnity in favor of officers,
directors, employees and agents of the Company, the Bank or any of their
respective subsidiaries under their charters, bylaws, indemnification
agreements or otherwise. For the avoidance of doubt: (i) in the event that a
tail-end rider is purchased, Buyer's obligation with respect to the total
premium therefor shall not exceed the annual premium currently paid by the
Company for the Company D&O Insurance multiplied by six (6) and (ii) in the
event that Buyer causes the required coverage to be provided under a Buyer
Policy, the 150% limitation provided in this Section 5.13 applies only with
respect to the incremental cost of adding the Covered Persons.
ARTICLE VI.
CONDITIONS TO CONSUMMATION
Section 6.1. Conditions to Each Party's Obligation. The respective
obligations of Buyer and the Company to effect the Merger shall be subject to
the satisfaction prior to the Effective Time of the following conditions:
(a) This Agreement and the Merger shall have been approved by the requisite
vote of the Stockholders in accordance with Applicable Law and the charter
document of the applicable entity.
(b) To the extent required by Applicable Law, all non-objections, approvals
or consents of any Governmental Authority, including, without limitation, those
of the OTS, the Federal Reserve Board and the FDIC, shall have been obtained or
granted for the Merger and the transactions contemplated hereby and the
applicable waiting period under all laws shall have expired (all such approvals
and the expirations of all such waiting periods being referred to herein as the
"Requisite Regulatory Approvals"). All other statutory or regulatory
requirements for the valid completion of the transactions contemplated hereby
shall have been satisfied and no statute, rule, regulation, order, injunction
or decree shall have been enacted, entered, promulgated, interpreted, applied
or enforced by any Governmental Authority which prohibits, restricts or makes
illegal consummation of the Merger or any other transaction contemplated by
this Agreement.
(c) No party hereto shall be subject to any order, decree or injunction of a
court or agency of competent jurisdiction which enjoins or prohibits the
consummation of the Merger, or any other transaction contemplated by this
Agreement, and no litigation or proceeding shall be pending against Acquisition
Sub, Buyer or the Company or any of their subsidiaries seeking to prevent
consummation of the transactions contemplated hereby.
(d) No statute, rule, regulation, order, injunction or decree shall have
been enacted, entered, promulgated, interpreted, applied or enforced by any
Governmental Authority which prohibits, restricts or makes illegal, or would
cause such party to suffer a Material Adverse Effect as a result of,
consummation of the Merger, or any other transaction contemplated by this
Agreement.
(e) No material proceedings relating to the Proxy Statement shall have been
initiated by the SEC and pending.
24
Section 6.2. Conditions to the Obligation of Buyer. The obligation of Buyer
to effect the Merger shall be subject to the satisfaction or waiver prior to
the Effective Time of the following additional conditions:
(a) The representations and warranties of the Company set forth in Section
4.2 of this Agreement shall be true and correct as of the date of this
Agreement and (except to the extent such representations and warranties speak
as of an earlier date and except to the extent modified by actions taken in
compliance with this Agreement) as of the Effective Date as though made on and
as of the Effective Date, except in each case where the failure of a
representation or warranty to be true and correct does not cause a Material
Adverse Effect on the Company. Buyer shall have received a certificate signed
on behalf of the Company by the Chief Executive Officer and the Chief Financial
Officer of the Company, dated the Effective Date, to the foregoing effect.
(b) The Company shall have performed in all material respects all covenants
and agreements required to be performed by it under this Agreement at or prior
to the Effective Date, other than to the extent that the failure to perform
such covenants and agreements does not have a Material Adverse Effect on the
Company, and Buyer shall have received a certificate signed on behalf of the
Company by the Chief Executive Officer and the Chief Financial Officer of the
Company, dated the Effective Date, to the foregoing effect.
(c) The regulatory approvals or consents necessary to consummate the
transactions contemplated hereby shall not impose conditions that are, or would
be, upon consummation of the Merger, applicable to Buyer that would constitute
a Material Adverse Effect on the Company or Buyer.
(d) The Company shall have obtained all consents of other parties to their
respective material mortgages, notes, leases, franchises, agreements, licenses
and permits as may be necessary to permit the Merger and the transactions
contemplated herein to be consummated, except for such consents the failure of
which to obtain would not constitute a Material Adverse Effect on the Company.
(e) The Rights Agreement shall have been terminated and neither Buyer nor
the Financial Institution Sub shall have been determined to be an Acquiring
Person.
(f) Between the date of this Agreement and the Effective Time of the Merger,
there shall not have occurred any event that has had a Material Adverse Effect
on the Company.
Section 6.3. Conditions to the Obligation of the Company. The obligation of
the Company to effect the Merger shall be subject to the satisfaction or waiver
prior to the Effective Time of the following additional conditions:
(a) The representations and warranties of Buyer set forth in this Agreement
shall be true and correct as of the date of this Agreement and (except to the
extent such representations and warranties speak as of an earlier date) as of
the Effective Date as though made on and as of the Effective Date, except in
each case where the failure of a representation or warranty to be true and
correct does not cause a Material Adverse Effect on Buyer. The Company shall
have received a certificate signed on behalf of Buyer by the Chief Executive
Officer and the Chief Financial Officer of Buyer, dated the Effective Date, to
the foregoing effect.
(b) Buyer shall have performed, in all material respects, all covenants and
agreements required to be performed by it under this Agreement at or prior to
the Effective Date. The Company shall have received a certificate signed on
behalf of Buyer by the Chief Executive Officer and the Chief Financial Officer
of Buyer, dated the Effective Date, to the foregoing effect.
(c) The Company shall have obtained an updated Fairness Opinion from Sandler
X'Xxxxx within five (5) days prior to the mailing of the Proxy Statement to the
Stockholders confirming that the Merger Consideration is fair from a financial
point of view to the Stockholders, and such Fairness Opinion shall not have
been revoked or adversely modified.
25
(d) Between the date of this Agreement and the Effective Time of the Merger,
there shall not have occurred any event that has had or could reasonably be
expected to have a Material Adverse Effect on Buyer.
(e) Buyer shall have made available to the Paying Agent the funds as
described in Section 2.3(b).
ARTICLE VII.
TERMINATION
Section 7.1. Termination. This Agreement may (and shall, as provided in
Sections 7.1(d) or (g) below) be terminated, and the Merger abandoned, prior to
the Effective Date, either before or after its approval by the Stockholders:
(a) by the mutual consent of Buyer and the Company in writing, if the board
of directors of each so determines by vote of a majority of the members of its
entire board;
(b) by Buyer or the Company by written notice to the other party if either
(i) the approval of any Governmental Authority required for the consummation of
the Merger and the other transactions contemplated by this Agreement shall have
been denied by final unappealable action of such Governmental Authority or
(ii) any Governmental Authority of competent jurisdiction shall have issued a
final, unappealable order enjoining or otherwise prohibiting consummation of
the transactions contemplated by this Agreement;
(c) by Buyer or the Company, if any approval of the Stockholders required
for the consummation of the Merger shall not have been obtained by reason of
the failure to obtain the required vote at a duly held meeting of such
Stockholders or at any adjournment or postponement thereof;
(d) concurrently with the acceptance by the Company of a Superior Proposal;
(e) by Buyer or the Company (provided that the terminating party is not then
in material breach of any representation, warranty, covenant or other agreement
contained herein) if there shall have been a material breach of any of the
representations, warranties, covenants or agreements set forth in this
Agreement on the part of the other party, which breach is not cured within
thirty (30) days following written notice to the party committing such breach,
or which breach, by its nature, cannot be cured prior to the Effective Time,
unless such breach is waived by the non-breaching party; provided, however,
that neither party shall have the right to terminate this Agreement pursuant to
this Section 7.1(e) unless the breach, together with all other such breaches,
would entitle the party not to consummate the transactions contemplated hereby
pursuant to Section 6.2(a) or 6.2(b) (in the case of a breach of
representation, warranty, covenant or agreement by the Company) or Section
6.3(a) or 6.3(b) (in the case of a breach of representation, warranty, covenant
or agreement by Buyer);
(f) by Buyer or the Company, if its board of directors so determines by vote
of a majority of the members of its entire board at such time as it becomes
apparent that a condition to such party's obligations contained in Article VI
hereof will not be satisfied (unless the failure to satisfy such condition is
due to the breach of any material representation, warranty, covenant or
agreement contained in this Agreement by the party seeking to terminate); or
(g) in the event that the Merger is not consummated by December 31, 2001
(the "Termination Date"). Notwithstanding the foregoing, if Buyer has not
obtained all Requisite Regulatory Approvals on or before December 31, 2001, but
is not otherwise in breach of this Agreement, the Termination Date shall be
extended to March 31, 2002; provided further, that:
(i) if the Termination Date has been extended to March 31, 2002 and if
the Merger has not been consummated by such date solely as a result of the
failure by Buyer to obtain all Requisite Regulatory
26
Approvals, but Buyer is not otherwise in breach of this Agreement, and if
Buyer deposits an additional $1,000,000 into the Escrow Account on or
before such date, then Buyer may elect to extend the Termination Date to
April 30, 2002;
(ii) if the Termination Date has been extended to April 30, 2002 and if
the Merger has not been consummated by such date solely as a result of the
failure by Buyer to obtain all Requisite Regulatory Approvals, but Buyer is
not otherwise in breach of this Agreement, and if Buyer deposits an
additional $1,000,000 into the Escrow Account on or before such date, then
Buyer may elect to extend the Termination Date to May 31, 2002; and
(iii) if the Termination Date has been extended to May 31, 2002 and if
the Merger has not been consummated by such date solely as a result of the
failure by Buyer to obtain all Requisite Regulatory Approvals, but Buyer is
not otherwise in breach of this Agreement, and if Buyer deposits an
additional $1,000,000 into the Escrow Account on or before such date, then
Buyer may elect to extend the Termination Date to June 30, 2002.
If the Termination Date is extended pursuant to this Section 7.1(g), Buyer
shall pay interest on the Merger Consideration at an interest rate equal to the
prime rate, and the Per Share Merger Consideration shall be adjusted
appropriately.
Section 7.2. Effect of Breach or Termination. In the event of a breach by
any party hereto (other than a willful breach), the sole and exclusive remedy
of the other party shall be to terminate this Agreement in accordance with
Section 7.1 and to receive such amounts, if any, as may be payable under
Section 7.3. In the event of the termination of this Agreement as specified in
Section 7.1 hereof, this Agreement shall thereafter become void and there shall
be no liability on the part of any party hereto or their respective officers or
directors subject to the following sentence. Notwithstanding anything to the
contrary contained in this Agreement, (i) no party shall be relieved or
released from any liabilities or damage arising out of its willful and material
breach of any provisions of this Agreement; (ii) in the case of the Company, no
termination shall release the Company from any liability it may have to Buyer
to the extent provided in Section 7.3; or (iii) any liability resulting from a
breach of Section 5.4(e), which liability shall exist notwithstanding the
failure of any Governmental Authority to grant any Requisite Regulatory
Approval to the consummation of the transactions contemplated hereby if such
Requisite Regulatory Approval would have been granted but for the inadequacy of
Buyer's regulatory capital. Except as provided in the immediately preceding
sentence, no party hereto shall have any liability to any other party under the
terms of this Agreement, whether for breach hereof or otherwise.
Section 7.3. Expenses; Termination Fee.
(a) The Company hereby agrees that if the Agreement is terminated pursuant
to Section 7.1(c) or by Buyer pursuant to Section 7.1(e), the Company shall
promptly and in any event within ten (10) days after such termination pay Buyer
all Expenses (as defined below) of Buyer, but not to exceed $1,500,000.
(b) Buyer hereby agrees that if the Agreement is terminated by the Company
pursuant to Section 7.1(e), Buyer shall promptly and in any event within ten
(10) days after termination pay the Company all Expenses of the Company and the
Bank, but not to exceed $1,500,000.
(c) Except as otherwise provided herein, all Expenses incurred by Buyer and
the Company in connection with or related to the authorization, preparation and
execution of this Agreement, the solicitation of stockholder approvals and all
other matters related to the closing of the transactions contemplated hereby,
including, without limitation of the generality of the foregoing, all fees and
expenses of agents, representatives, counsel and accountants employed by either
such party or its affiliates, shall be borne solely and entirely by the party
which has incurred the same.
(d) "Expenses" of a party as used in this Agreement shall include all
reasonable out-of-pocket expenses (including all fees and expenses of
attorneys, accountants, investment bankers, experts and consultants to such
27
party and its affiliates) incurred by the party or on its behalf after March 1,
2001 in connection with the sale of the Company, this Agreement or the
transactions contemplated hereby.
(e) The Company shall pay to Buyer the sum of $5,000,000 (the "Termination
Fee") payable as provided below solely as follows: (i) if this Agreement shall
have terminated pursuant to Section 7.1(d); or (ii) if all of the following
occur: (A) the Company or Buyer shall terminate this Agreement pursuant to
Section 7.1(c) and, at the time of such termination, Buyer is not in breach of
this Agreement, (B) at any time after the date of this Agreement and prior to
the meeting of the Stockholders to vote on the Merger, if any, there shall have
been publicly announced a Superior Proposal and (C) within nine months of the
termination of this Agreement, the Company enters into a definitive agreement
with respect to such Superior Proposal.
(f) The Termination Fee required to be paid pursuant to Section 7.3(e) shall
be paid to Buyer not later than five business days after the Company enters
into a definitive agreement with respect to a Superior Proposal. All payments
under Section 7.3(e) shall be made in cash by wire transfer of immediately
available funds to an account designated by Buyer; provided, however, that in
the event that the Company determines, in its reasonable discretion, that
payment of the full amount of the Termination Fee in cash will, or is
reasonably likely to reduce the Bank's capital for regulatory purposes to a
level that would not provide a reasonable cushion above the amount necessary to
remain "well capitalized" under the Prompt Corrective Action regulations of the
OTS, then, it may cause some or all of the Termination Fee to be paid to Buyer
in the form of a transfer by the Company to Buyer of shares of the Bank
Preferred Stock, the terms of which are set forth on Exhibit 7.3(g) hereto. In
the event the Company determines that such transfer of Bank Preferred Stock is
necessary under this Section 7.3(g), the Company shall, within twenty (20)
business days of the date of termination of this Agreement, transfer such Bank
Preferred Stock. In addition, it is understood that, in the event that the
Termination Fee is payable pursuant to Section 7.3(f), the Company and the Bank
shall receive credit for (and the amount payable by them in respect of the
Termination Fee shall be reduced by) the amount of any payments made by them
pursuant to Section 7.3(a).
(g) Upon the termination of this Agreement due to the failure of Buyer to
obtain the Requisite Regulatory Approvals, Buyer shall forfeit the Escrowed
Funds, which shall be delivered by the Escrow Agent to the Company within five
(5) business days after the date of termination. In addition, it is understood
that, in the event that the Escrowed Funds are forfeited and delivered to the
Company pursuant to this Section 7.3(g), Buyer shall be relieved of its
obligation to pay the Company's Expenses under Section 7.3. Payment of the
Escrowed Funds to the Company shall not constitute liquidated damages and Buyer
shall remain liable for damages in accordance with the terms of this Agreement
upon Buyer's willful breach of this Agreement notwithstanding the payment of
the Escrowed Funds.
(h) Notwithstanding any other provision herein, the last sentence of Section
5.3 and, in their entirety, Sections 7.2 and 7.3 and Article IX shall survive
any termination of this Agreement.
ARTICLE VIII.
EFFECTIVE DATE AND EFFECTIVE TIME
Section 8.1. Effective Date and Effective Time. On such date as the parties
may agree, which shall be within five (5) business days after the last to occur
of the expiration of all applicable waiting periods in connection with the
Requisite Regulatory Approvals and the satisfaction or waiver of all other
conditions to the consummation of this Agreement (other than those conditions
relating to the receipt of officer's certificates or fairness opinions), or on
such earlier or later date as may be agreed in writing by the parties, the
Certificate of Merger shall be executed in accordance with all appropriate
legal requirements and shall be filed as required by law, and the Merger
provided for herein shall become effective upon the date and time specified in
the Certificate of Merger, which shall not be later than the Closing Date (the
"Effective Date"). The "Effective Time" of the Merger shall be the time
specified in the Certificate of Merger.
28
ARTICLE IX.
OTHER MATTERS
Section 9.1. Interpretation. When a reference is made in this Agreement to
Sections, Articles, Exhibits or Schedules, such reference shall be to a Section
or Article of, or Exhibit or Schedule to, this Agreement unless otherwise
indicated. The table of contents and headings contained in this Agreement are
for ease of reference only and shall not affect the meaning or interpretation
of this Agreement. Whenever the words "include," "includes," or "including" are
used in this Agreement, they shall be deemed followed by the words "without
limitation." Any singular term in this Agreement shall be deemed to include the
plural, and any plural term the singular.
Section 9.2. Waiver. Prior to the Effective Time, any term, provision or
condition of this Agreement may be: (i) waived by the party benefited by the
provision; or (ii) amended or modified at any time by an agreement in writing
between the parties hereto approved by their respective boards of directors,
except that, after the vote by the Stockholders, no amendment may be made that
would contravene any provision of HOLA or Applicable Law. No waiver of any
term, provision or condition of this Agreement, whether by conduct or
otherwise, in any one or more instances, shall be deemed to be or construed as
a further or continuing waiver of any such term, provision or condition of this
Agreement.
Section 9.3. Counterparts. This Agreement may be executed in counterparts
each of which shall be deemed to constitute an original, but all of which
together shall constitute one and the same instrument.
Section 9.4. Governing Law. This Agreement shall be governed by, and
interpreted in accordance with, the laws of the State of Delaware without
regard to the conflict of law principles thereof. The parties hereby
irrevocably submit to the jurisdiction of the courts of the State of Delaware
and the Federal courts of the United States of America located in the State of
Delaware solely in respect of the interpretation and enforcement of the
provisions of this Agreement and of the documents referred to in this Agreement
and in respect of the transactions contemplated herein, and hereby waive, and
agree not to assert, as a defense in any action, suit or proceeding for the
interpretation or enforcement hereof or of any such document, that it is not
subject thereto or that such action, suit or proceeding may not be brought or
is not maintainable in said courts or that the venue thereof may not be
appropriate or that this Agreement or any such document may not be enforced in
or by such courts, and the parties hereto irrevocably agree that all claims
with respect to such action or proceeding shall be heard and determined in such
a Delaware State or Federal court. The parties hereby consent to and grant any
such court jurisdiction over the person of such parties and over the subject
matter of such dispute and agree that mailing of process or other papers in
connection with any such action or proceeding in the manner provided in Section
9.5 or in such other manner as may be permitted by law, shall be valid and
sufficient service thereof.
Section 9.5. Notices. All notices, requests, acknowledgments and other
communications hereunder to a party shall be in writing and shall be deemed to
have been duly given when delivered by hand, a reputable overnight courier
service or telecopy (confirmed in writing) to such party at its address set
forth below or such other address as such party may specify by notice to the
other party hereto.
If to Buyer, to:
FBOP Corporation
00 Xxxx Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
(000) 000-0000 (Fax)
Attention: Xxxxxxx X. Xxxxx
29
With copies to:
Lord, Bissell & Brook
000 X. XxXxxxx Xxxxxx
Xxxxxxx, XX 00000
(000) 000-0000 (Fax)
Attention: Xxxxxx X. Xxxxxxxxxxx
If to the Company, to:
Bank Plus Corporation
0000 Xxxxxxxx Xxxxxxxxx
Xxx Xxxxxxx, XX 00000
(000) 000-0000 (Fax)
Attention: Xxxx Xxxxx
Chief Executive Officer
With copies to:
Xxxxxxx X. Xxxxx, Esq.
General Counsel
Bank Plus Corporation
0000 Xxxxxxxx Xxxxxxxxx
Xxx Xxxxxxx, XX 00000
(000) 000-0000 (Fax)
and
Dhiya El-Saden, Esq.
Xxxxxx, Xxxx & Xxxxxxxx LLP
000 Xxxxx Xxxxx Xxxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
(000) 000-0000 (Fax)
Section 9.6. Entire Agreement; Binding Agreement; Third Parties. This
Agreement, together with all the schedules hereto and agreements referred to
herein, including the Confidentiality Agreement, represents the entire
understanding of the parties hereto with reference to the transactions
contemplated hereby and supersedes any and all other oral or written agreements
heretofore made. All terms and provisions of the Agreement shall be binding
upon and shall inure to the benefit of the parties hereto and their respective
successors and assigns. Except as to Sections 2.3 and 2.5 which are intended to
benefit the Stockholders and the Optionholders, Section 5.2, which is intended
to benefit employees of the Company and its subsidiaries, and Section 5.13,
which is intended to benefit Indemnified Parties, nothing in this Agreement is
intended to confer upon any other Person (including, without limitation,
employees of the Company) any rights or remedies of any nature whatsoever under
or by reason of this Agreement.
Section 9.7. Assignment. This Agreement may not be assigned or delegated by
any party hereto without the written consent of the other party and any such
attempted assignment or delegation shall be null and void.
Section 9.8. Captions. The Article, Section and paragraph captions herein
are for convenience of reference only, do not constitute part of this Agreement
and shall not be deemed to limit or otherwise affect any of the provisions
hereof.
Section 9.9. Construction of Agreement. No party hereto, nor its respective
counsel, shall be deemed the drafter of this Agreement for purposes of
construing the provisions of this Agreement, and all provisions of
30
this Agreement shall be construed in accordance with their fair meaning, and
not strictly for or against any party hereto.
Section 9.10. Survival. All representations and warranties shall be deemed
to be conditions of this Agreement and shall not survive the Effective Time.
Section 9.11 Attorneys' Fees. If any legal action or any arbitration upon
mutual agreement is brought for the enforcement of this Agreement or because of
an alleged dispute, controversy or breach in connection with this Agreement,
the prevailing party shall be entitled to recover reasonable attorneys' fees
and other costs and expenses incurred in that action or proceeding, in addition
to any other relief to which it may be entitled.
Section 9.12 Knowledge. Whenever any statement herein or in any list,
exhibit, schedule, certificate or other document delivered to any party
pursuant to this Agreement is made "to the knowledge" of any party, such
knowledge shall mean the actual knowledge which any of the officers of the
party listed in Section 9.12 of the Company Disclosure Schedule or the Buyer
Disclosure Schedule, as applicable, as the party's knowledge group has as a
result of the performance of his or her duties.
31
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized officers as of the day and year first above
written.
BANK PLUS CORPORATION,
a Delaware corporation
/s/ Xxxx X. Xxxxx
By: _________________________________
Name: Xxxx X. Xxxxx
Title: Chief Executive Officer
FBOP CORPORATION,
an Illinois corporation
/s/ Xxxxxxx X. Xxxxx
By: _________________________________
Name: Xxxxxxx X. Xxxxx
Title: Chairman
As of this day of , 2001, and pursuant to the terms of Section
3.4 hereof, Acquisition Sub hereby agrees to be bound by the terms hereof.
__________________________________________
ACQUISITION SUB
By: ______________________________________
Name:
Title:
32
