AGREEMENT AND PLAN OF REORGANIZATION
AGREEMENT AND PLAN OF REORGANIZATION ("Agreement") dated as of April
30, 1997, by and among INTERCHANGE FINANCIAL SERVICES CORPORATION, a New Jersey
corporation ("Parent"), WASHINGTON INTERCHANGE CORP., a New Jersey corporation
("Target"), WIC ACQUISITION CORP., a New Jersey corporation and wholly-owned
subsidiary of Parent ("Sub") (Sub and Target being hereinafter collectively
referred to as the "Constituent Corporations") and the Target's shareholders, as
listed on Exhibit A and who are signatories hereto, (each of such individuals
being referred to herein as a "Shareholder" and collectively as "Shareholders").
WHEREAS, Shareholders own an aggregate of 200 shares of common stock,
no par value, of Target (the "Target Stock"), constituting 100% of the issued
and outstanding shares of capital stock of Target;
WHEREAS, Parent desires to indirectly acquire Target, through a merger
of Sub into Target on the terms and subject to the conditions set forth in this
Agreement;
WHEREAS, the Boards of Directors of Parent, Sub and Target have
approved the merger of Sub into Target (the "Merger") and the transactions
contemplated hereby in accordance with the applicable provisions of the New
Jersey Business Corporation Act ("NJBCA");
WHEREAS, the parties to the transaction contemplated hereby have relied
on the provision of Sections 368(a)(2)(E) of the Internal Revenue Code of 1986
as amended (the "Code"), and desire that the transaction to be treated as a tax
free reorganization, commonly referred to as a reverse triangular merger; and
NOW THEREFORE, in consideration of the premises and the mutual
agreements contained herein, intending to be legally bound hereby, the parties
hereto agree as follows:
ARTICLE I
THE MERGER
(a) On the terms and subject to the conditions as set forth in this
Agreement, and on the basis of the representations and warranties contained
herein, the parties hereto jointly and severally agree that, at the
Effective Time (as hereinafter defined), Sub shall be merged into Target
and the separate existence of Sub shall thereupon cease in accordance with
the applicable provisions of the NJBCA.
(b) Target will be the surviving corporation in the Merger (sometimes
referred to herein as the "Surviving Corporation") and will continue to be
governed by the laws of the State of New Jersey, and the separate corporate
existence of Target and all of its rights, privileges, immunities and
franchises, public or private, and all its duties and liabilities as a
corporation will continue unaffected by the Merger.
(c) The Merger will have the effects specified by the NJBCA.
(d) As soon as practicable following fulfillment of or waiver of the
conditions specified in Articles VII or VIII hereof, and provided that this
Agreement has not been terminated or abandoned pursuant to Article XI
hereof, the Constituent Corporations will cause a Certificate of Merger in
the form of Exhibit B (the "Certificate of Merger") to be filed with the
office of the Secretary of State of the State of New Jersey and will take
any other actions as are necessary to effectuate the Merger including, but
not limited to, filing any required documents with the New Jersey
Department of Taxation or filing any required documents with the office of
the Secretary of State of the State of New Jersey. Subject to and in
accordance with the laws of the State of New Jersey, the Merger will become
effective at the date and time the Certificate of Merger is filed with the
office of the Secretary of State of the State of New Jersey or such later
time or date as may be specified in the Certificate of Merger (the
"Effective Time"). Each of the parties will use its best efforts to cause
the Merger to be consummated as soon as practicable following the
fulfillment or waiver of the conditions specified in Article VII or VIII
hereof.
ARTICLE II
THE SURVIVING CORPORATION
2.1 CERTIFICATE OF INCORPORATION. The Certificate of Incorporation of
Target as in effect immediately prior to the Effective Time shall be the
Certificate of Incorporation of the Surviving Corporation after the Effective
Time.
2.2 BY-LAWS. The By-Laws of Target as in effect immediately prior to
the Effective Time shall be the By-Laws of the Surviving Corporation after the
Effective Time.
2.3 BOARD OF DIRECTORS AND OFFICERS. From and after the Effective Time,
the Board of Directors and Officers of Sub shall be the Board of Directors and
Officers of the Surviving Corporation after the Merger. The members of the Board
of Directors and Officers of Target prior to the Effective Time shall resign
prior to the Merger.
ARTICLE III
CONVERSION OF SHARES
3.1 CONVERSION OF TARGET SHARES IN THE MERGER. At the Effective Time,
by virtue of the Merger and without any action on the part of any holder of any
capital stock of Target, the Target Stock owned by the Shareholders, other than
Target Dissenting Shares (as defined in Section 3.4 hereof), shall, subject to
Section 3.3(e) hereof, be converted into the right to receive and become
exchangeable for the number of shares validly issued common stock of Parent
equal to the Conversion Ratio times the number of shares of Target Stock owned
by the Shareholders and the Target Stock shall cease to be shares of Stock in
Washington Interchange Corp. For purposes of this Agreement, the Conversion
Ratio means a fraction, (A) the numerator of which is equal to Target's agreed
upon net value, which shall be based upon the net fair market value of Target
computed as follows: (i) Target's interest in 83,237 shares of Parent Common
Stock (prior to the 3 for 2 stock split declared on February 27, 1997) and the
amount of Parent Common Stock held by Target to be valued at the average closing
sale price of Parent Common Stock as reported on the composite tape for the
American Stock Exchange (the "ASE") for the ten (10) trading days immediately
preceding the date which is seven (7) calendar days prior to the Closing Date
(the "Valuation Price"); plus (ii) the bank building and land located at 000
Xxxxxxx Xxxx, Xxxxxxxxxx Xxxxxxxx, Xxx Xxxxxx ("000 Pascack") at an agreed upon
value of $500,000.00; plus (iii) cash on deposit in Target's corporate accounts
as of the valuation date; and less (iv) the unpaid balance of the mortgage
referred to in Subsection 4.6(b) (it being recognized that Target intends to
satisfy this mortgage prior to the Effective Time), divided by the average
closing sale price of a share of Parent Common Stock as reported on the
composite tape for the ASE for the ten (10) trading days immediately preceding
the date which is seven (7) calendar days prior to the Closing Date; and (B) the
denominator which is equal to two hundred (200). For example, if Parent Common
Stock has a value of $25.00 per share and absent any cash on deposit and/or
outstanding mortgage, the Conversion Ratio would be 516.185 based on a numerator
of 103,237 [(i) 83,237 shares times $25 per share plus (ii) $500,000 real estate
value plus (iii) $0 cash (iv) less $0 mortgage divided by 25] and a denominator
of 200. The Parent Common Stock received by the Shareholders based upon the
Conversion Ratio, together with any fractional shares shall, for purposes
hereof, be referred to as the "Merger Consideration". The Merger Consideration
shall be adjusted as of the Closing Date to apportion the unpaid mortgage liens
and expenses payable by the Target Corporation with respect to 590 Pascack and
other liabilities of Target including, but not limited to any unpaid obligations
of the Target Corporation (including Taxes) other than as set forth herein as
well as in Schedule 1.2(b).
3.2 STATUS OF SUB SHARES. At the Effective Time, by virtue of the
Merger and without any action on the part of Parent each issued and outstanding
share of common stock of Sub owned by Parent shall be converted to one share of
common stock in the Surviving Corporation.
3.3 EXCHANGE OF PARENT STOCK CERTIFICATES. (a) On or prior to the
Closing Date, Parent shall make available to the Exchange Agent the certificates
representing shares of Parent Common Stock required to effect the exchange
referred to in Target to in Section 3.3(b). Parent shall also make available to
the Exchange Agent the cash required to make the cash payments in lieu of
fractional shares referred to in Section 3.3(e) below. Shares of Parent Common
Stock into which shares of Target Common Stock shall be converted in the Merger
shall be deemed to have been issued at the Effective Time.
(b) From and after the Effective Time, each Target Shareholder, other
than shares owned by Shareholders with respect to which dissenters' rights, if
any, are granted by reason of the Merger under the NJBCA, shall be entitled to
receive in exchange for their shares in Target, upon surrender thereof to
Continental Stock and Transfer Company (the "Exchange Agent"), a certificate or
certificates representing the number of whole shares of Parent Common Stock into
which such holder's shares of Target Common Stock were converted pursuant to
Section 3.1 and cash in lieu of any fractional shares of such Parent Common
Stock pursuant to Section 3.3(e). From and after the Effective Time, Parent
shall be entitled to treat the certificates which immediately prior to the
Effective Time represented shares of Target Common Stock and which have not yet
been surrendered for exchange as evidencing the ownership of the number of full
shares of Parent Common Stock into which the shares of Target Common Stock
represented by such certificates shall have been converted pursuant to Section
3.1, notwithstanding the failure to surrender such certificates. However,
notwithstanding any other provision of this Agreement, until holders or
transferees of certificates which immediately prior to the Effective Time
represented shares of Target Common Stock have surrendered them for exchange as
provided herein, no dividends shall be paid with respect to any shares
represented by such certificates and no payment for fractional shares shall be
made. Upon surrender of a certificate which immediately prior to the Effective
Time represented outstanding shares of Target Common Stock, there shall be paid
to the holder of such certificate the amount of any dividends which theretofore
became payable, but which were not paid by reason of the foregoing with respect
to the number of whole shares of Parent Common Stock represented by the
certificate or certificates issued upon such surrender. If any certificate for
shares of Parent Common Stock is to be issued in a name other than that in which
the certificate, which immediately prior to the Effective Time represented
shares of Target Common Stock, surrendered in exchange therefor is registered,
it shall be a condition of such exchange that the person requesting such
exchange shall pay any transfer or other taxes required by reason of the
issuance of certificates for such shares of Parent Common Stock in a name other
than that of the registered holder of any such certificate surrendered.
(c) [INTENTIONALLY OMITTED].
(d) As soon as practicable after the Effective Time, the Exchange Agent
shall mail to each holder of record of a certificate or certificates that
immediately prior to the Effective Time represented outstanding shares of Target
Common Stock (collectively, the "Target Certificates") (i) a form letter of
transmittal (which shall specify that delivery shall be effected, and risk of
loss and title to Target Certificates shall pass, only upon actual delivery of
Target Certificates to the Exchange Agent) and (ii) instructions for use in
effecting the surrender of Target Certificates in exchange for certificates
representing shares of Parent Common Stock. Upon surrender of Target
Certificates for cancellation to the Exchange Agent, together with a duly
executed letter of transmittal and such other documents as the Exchange Agent
shall require, the holder of such Target Certificates shall be entitled to
receive in exchange therefor a certificate representing that number of whole
shares of Parent Common Stock into which the shares of Target Common Stock
represented by Target Certificates so surrendered shall have been converted
pursuant to the provisions of Section 3.1, and Target Certificates so
surrendered shall forthwith be cancelled. Notwithstanding the foregoing, neither
the Exchange Agent nor any party hereto shall be liable to a holder of shares of
Target Common Stock for any shares of Parent Common Stock or dividends or
distributions thereon delivered to a public official pursuant to applicable
escheat laws.
(e) Notwithstanding any other provision of this Agreement, no certificates
or scrip for fractional shares of Parent Common Stock shall be issued upon the
surrender for exchange of Target Certificates pursuant to this Article III and
no Parent Common Stock dividend, stock split or interest shall relate to any
fractional security, and such fractional interests shall not entitle the owner
thereof to vote or to any other rights of a security holder. In lieu of any such
fractional shares, each holder of Target Common Stock who would otherwise have
been entitled to a fraction of a share of Parent Common Stock upon surrender of
Target Certificates for exchange pursuant to this Article III shall be entitled
to receive from the Exchange Agent a cash payment in lieu of such fractional
share equal to such fraction multiplied by the Valuation Price.
3.4 DISSENTING SHARES. Notwithstanding anything to the contrary
contained in this Agreement, holders of shares of Target Common Stock with
respect to which dissenters' rights, if any, are granted by reason of the Merger
under the NJBCA and who do not vote in favor of the Merger and otherwise comply
with the NJBCA ("Target Dissenting Shares"), shall not be entitled to shares of
Parent Common Stock pursuant to Section 3.1, unless and until the holder thereof
shall have failed to perfect or shall have effectively withdrawn or lost such
holder's right to dissent from the Merger under the NJBCA, and shall be entitled
to receive only the payment provided for pursuant to the NJBCA. If any such
holder shall have failed to perfect or shall have effectively withdrawn or lost
such holder's dissenters' rights under the NJBCA, such holder's Target
Dissenting Shares shall thereupon be deemed to have been converted into and to
have become exchangeable for, as of the Effective Time, the right to receive the
Merger Consideration.
3.5 CLOSING OF TRANSFER BOOKS. From and after the Effective Time, the
stock transfer books of Target shall be closed and no transfer of shares of
Target Common Stock owned by the Shareholders shall thereafter be made. If,
after the Effective Time, Target Certificates are presented to Parent, they
shall be cancelled and exchanged for the Merger Consideration in accordance with
the procedures set forth in this Article III.
3.6 CLOSING. Subject to the fulfillment or waiver of any conditions
precedent set forth herein, it is presently contemplated that the closing of the
transactions under this Agreement (the "Closing") shall take place on May 13,
1997, (the "Closing Date"), at 10:00 a.m., New York City time at the offices of
Xxxxxxx Xxxxx, counsel to Parent, or at such other place or such other time and
date as the parties may mutually agree in writing. The time and date upon which
the Closing occurs is herein referred to as the "Closing Date." If the Closing
has not occurred prior to June 30, 1997, Parent, if not then in default under
this Agreement, may terminate this Agreement by giving five (5) days written
notice to Target.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF SHAREHOLDERS AND TARGET
Except as otherwise set forth, all warranties and representations
contained herein shall survive the Merger and are subject to the exceptions set
forth in each disclosure schedule attached hereto. As a material inducement to
Parent to execute and perform its obligations under this Agreement, Target and
Shareholders hereby jointly and severally represent and warrant to Parent as
follows:
4.1 ORGANIZATION AND QUALIFICATION. Target is a corporation duly
organized, validly existing and in good standing under the laws of the State of
New Jersey; has the requisite corporate power and authority to carry on its
business as it is now being conducted and to own, lease and operate the
properties and assets used in connection therewith.
4.2 CAPITALIZATION; OPTIONS OR OTHER RIGHTS. The authorized capital
stock of Target consists of One-Thousand (1000) shares of Common Stock, no par
value per share, of which Two-Hundred (200) shares are issued and outstanding.
All issued and outstanding shares of capital stock of the Target have been duly
authorized and validly issued and are fully paid and non-assessable with no
personal liability attaching to the ownership thereof and are owned beneficially
and of record by Shareholders in the amounts as set forth on Exhibit A hereto.
There are no Liens (as hereinafter defined) on or with respect to any
outstanding shares of capital stock of the Target. There are no outstanding (i)
securities convertible into or exchangeable for any capital stock of the Target;
(ii) options, warrants, preemptive rights, calls or other rights to purchase or
subscribe for any capital stock of the Target or securities convertible into or
exchangeable for capital stock thereof; or (iii) contracts, commitments,
agreements, understandings or arrangements of any kind relating to the issuance
of any capital stock of Target, any such convertible or exchangeable securities
or any such options, warrants, calls or rights. Shareholders collectively own
100% of the outstanding capital stock of Target. Except for Target's 83,237
shares of Parent Common Stock, Target does not own or control, or have any
ownership interest in or any obligation to acquire an ownership interest in or
any obligation to acquire an ownership interest, either directly or indirectly,
in, nor is it controlled by or under common control with, any other corporation,
partnership, joint venture or other entity.
4.3 STOCK OWNERSHIP. Each Shareholder currently has and/or the time of
the Closing will have good and valid title to the Target Stock to be exchanged
by such Shareholder hereunder, in all such cases free and clear of any and all
Liens. Exhibit A of this Agreement contains a complete and accurate list of all
of the Shareholders of Target and Target Stock held by each Shareholder.
4.4 CERTIFICATE OF INCORPORATION AND BY-LAWS. Shareholders will furnish
Parent prior to Closing true and complete copies of the (i) Certificate of
Incorporation of Target, as in effect on the date hereof, (ii) By-laws of
Target, as in effect on the date hereof, and (iii) minute books of Target
(containing records of all meetings and consents in lieu of meetings of its
shareholders and Boards of Directors (and any committees thereof) since the time
of its incorporation and accurately reflecting all transactions referred to in
such minutes and consents in lieu of meetings). Target is not in violation of
any provisions of its Certificate of Incorporation or By-Laws, as in effect as
of the date hereof.
4.5 FINANCIAL STATEMENTS AND BOOKS AND RECORDS. There have been
delivered to Parent true and correct copies of the following financial
statements: (i) the compiled balance sheet of Target as of December 31, 1996 and
the income statement for the fiscal year then ended prepared by Target's
accountants (the "1996 Year-End Financial Statements") and (ii) the compiled
balance sheets of Target as of March 31, 1997 and the income statement for the
three months then ended. The 1996 Year-End Financial Statements and the March
31, 1997 Financial Statements, are collectively referred to herein as the
"Financial Statements." Copies of the Financial Statements are annexed as
Exhibit C hereto. The Financial Statements have been prepared and are based upon
the books and records of Target and such Financial Statements present fairly the
financial position, and related results of operations of Target as of the dates
and for the periods referred to therein, in accordance with GAAP. All of the
financial books and records of Target have been made available to Parent and
such books and records completely and fairly record in all respects Target's
financial affairs which should normally be recorded in financial books and
records.
4.6 LIABILITIES. (a) Except as set forth on Schedule 4.6, Target has no
liabilities or obligations of any nature (absolute, accrued, contingent or
otherwise) whether as principal, agent, partner, plan fiduciary, coventurer,
guarantor or in any capacity whatsoever which are not properly reflected or
reserved against in the Financial Statements (except for liabilities or
obligations which have been incurred in the ordinary course of business since
December 31, 1996 in a manner consistent with past practice, which individually
or in the aggregate do not exceed $10,000) and the reserves reflected in the
Financial Statements are adequate, appropriate and reasonable.
(b) Target will have the existing mortgage loan encumbering 590 Pascack
paid in full prior to Closing or the Merger Consideration will be adjusted
accordingly.
4.7 TAX MATTERS. (a) Except with respect to property Taxes and other
Taxes (as defined below) for which adequate reserves are included in the
Financial Statements or as otherwise set forth in Schedule 4.7, Target or the
Shareholders, where applicable, have timely paid all federal and state taxes,
including, without limitation, income taxes, excise taxes, sales taxes, use
taxes, gross receipts taxes, franchise taxes, and all other taxes, levies and
charges of any nature whatsoever and however denominated together with all
penalties, additions to tax, interest, assessment or other damages imposed
thereon with respect to Target's business (collectively, "Tax" or "Taxes")
required to be paid or deposited by Target through the date hereof. For purposes
of this Section 4.7, timely payment shall be deemed to include payment in
accordance with any available extensions.
(b) Target or the Shareholders, where applicable, have filed on or
before the applicable due date (including extensions) all tax returns, reports
or declarations which it is required to have filed through the date hereof and
has timely paid all amounts shown as payable thereon, as well as any
deficiencies or other additional amounts subsequently assessed by any taxing
authority with respect to each such tax return, report or declaration. All such
returns, reports or declarations are true, correct and complete in all respects.
(c) Target has not waived any statute of limitations in respect of
Taxes or agreed to any extension of time with respect to a Tax assessment or
deficiency and the assessment of any additional Tax with respect to periods for
which returns have been filed is not expected.
(d) Except for the State of New Jersey's claim for outstanding
penalties and interest with respect to Target's 1987 Business Corporation Tax,
there are no proposed deficiencies or unresolved claims concerning Target's
liability for Taxes. Any proposed deficiency or unresolved claim set forth on
Schedule 4.7 is being contested in good faith by appropriate proceedings for
which adequate reserves have been created, maintained and disclosed in writing
to Parent. Target shall escrow $3500.00 with Parent's attorney pending
resolution of the State of New Jersey's claim.
(e) Copies of all federal and state income tax returns (including all
attachments and amendments thereto) of Target for all taxable years for which
the limitation periods (including any extensions or waivers thereof) applicable
to deficiencies not expired have been delivered to Parent.
4.8 COMPLIANCE WITH LAWS. To the best of its actual knowledge or
belief, Target is not in violation of any applicable law, rule, regulation,
order, judgment, injunction, award or decree, relating to, arising out of or
affecting the business or operations of Target. Target has not been notified
that it is in violation of any statute, law, rule, regulation, ordinance, or any
other requirement of any federal, state, local, regional, municipal or
regulatory department, body, commission, agency, board, instrumentality,
authority, court or arbitrator having jurisdiction over Target or any of its
businesses or properties (collectively, a "Governmental Agency") (including,
without limitation, laws relating to the environment), other than insignificant
or immaterial violations which do not and will not have a Material Adverse
Effect. Each authorization, license, consent, permit, order and approval of any
Governmental Agency over the conduct of Target's business (collectively, the
"Permits") that is material to the conduct of Target's business is in full force
and effect, no violations are or have been recorded in respect of any Permit and
no proceeding is pending or, to the actual knowledge of Target or any
Shareholder, threatened, to revoke or limit any Permit. Except as set forth on
Schedule 4.8, no approval or consent of any person is needed in order that the
Permits continue in full force and effect following the consummation of the
transactions contemplated by this Agreement.
4.9 AUTHORITY TO EXECUTE AND PERFORM AGREEMENT; NO BREACH. Each of
Shareholders and Target has the full legal right and power and all authority and
approvals required to enter into, execute and deliver this Agreement (and each
other agreement delivered or to be delivered in connection herewith) and to
perform fully its, his or her respective obligations hereunder and thereunder.
This Agreement (and each other agreement delivered or to be delivered in
connection herewith) has been duly executed and delivered to Parent by Target
and the Shareholders and, assuming due execution and delivery by, and
enforceability against, Parent, constitutes the valid and binding obligation of
Target and each Shareholder, enforceable against them in accordance with their
respective terms, subject to the qualifications that enforcement of the rights
and remedies created hereby and thereby is subject to (i) bankruptcy,
insolvency, reorganization, moratorium and other laws of general application
affecting the rights and remedies of creditors, and (ii) general principles of
equity (regardless of whether such enforcement is considered in a proceeding in
equity or at law). No approval or consent of, or filing with, any governmental
or regulatory body, and no approval or consent of, or filing with, any other
person is required to be obtained by Target and any Shareholder in connection
with the execution and delivery by Target and the Shareholders of this Agreement
(and each other agreement delivered or to be delivered in connection herewith)
and the consummation and performance by them of the transactions contemplated
hereby and thereby, other than as set forth on Schedule 4.9. The execution,
delivery and performance of this Agreement (and each other agreement delivered
or to be delivered in connection herewith) by Target and the Shareholders and
the consummation of the transactions contemplated hereby and thereby in
accordance with the terms and conditions hereof and thereof by the Shareholders
will not:
(i) violate any provision of Target's Certificate of Incorporation or
By-laws;
(ii) violate, conflict with or result in the breach of any of the terms
of, or constitute (or with notice or lapse of time or both would constitute) a
default under, any Contract (as hereinafter defined), Lease (as defined below)
or other agreement to which Target and any Shareholder is a party or by to which
any of its or their respective assets may be bound or subject;
(iii)violate any order, judgment, injunction, award or, decree of any
Governmental Agency by which any Shareholder, or the securities, assets,
properties or business of any of them, is bound or subject; or
(iv) violate any statute, law or regulation.
4.10 LITIGATION. There are no outstanding orders, judgments,
injunctions, awards or decrees of any court, governmental or regulatory body or
arbitration tribunal by which Target or the securities, assets, properties or
business of any of them is bound or subject. Except as set forth on Schedule
4.10, there are no actions, suits, legal, administrative or arbitral proceedings
or inquiries relating to Target pending or, to the knowledge of Target or any
Shareholder, threatened (whether or not the defense thereof or liabilities in
respect thereof are covered by insurance) against Target, or any officer or
director of Target (in his or her capacity as such).
4.11 CONTRACTS. Other than the Lease between Target and Interchange
Bank with respect to 590 Pascack, (the "Lease"), there are no agreements,
contracts, understandings, arrangements (including, without limitation, bank
lines), obligations, leases or licenses, whether written or oral, between Target
and any other party, under or pursuant to which Target is obligated to make cash
payments of or delivery products or render services with a value greater than
$5,000 or receive cash payments of or receive products or services with a value
greater than $5,000 or which are otherwise material to Target (collectively,
"Contracts"). Except for the Lease, Target is not a party to any contract,
agreement, arrangement or understanding, whether written or oral, which, either
individually or in the aggregate, is material to the business or financial
condition of Target, it being understood that the contracts which fall
underneath the dollar threshold shall be deemed material if they are otherwise
material to Target for non-monetary reasons. There have been delivered to Parent
true and complete copies of the Lease. The Lease is valid, subsisting, in full
force and effect and binding upon Target and the other parties thereto and are
enforceable in accordance with its terms, subject to the qualifications that
enforcement of the rights and remedies created thereby is subject to (i)
bankruptcy, insolvency, reorganization, moratorium and other laws of general
application affecting the rights and remedies of creditors, and (ii) general
principles of equity (regardless of whether such enforcement is considered in a
proceeding in equity or at law); and Target and, to the knowledge of Target and
Shareholders, each other party to the Lease have satisfied in full or provided
for all of their respective liabilities and obligations thereunder requiring
performance prior to the date hereof in all material respects, are not in
default under any of them, nor does any condition exist that with notice or
lapse of time or both would constitute such a default or would constitute a
basis of force majeure or other claim of excusable delay or non-performance. To
the knowledge of Target and each of the Shareholders, there is no material fact,
event or circumstance which may give rise to an event of default on the part of
Target or any other party under the Lease. No approval or consent of any person
is needed in order that the Lease continue in full force and effect subsequent
to the consummation of the transactions contemplated by this Agreement and, upon
consummation of such transactions, the Lease will be enforceable by Target
(subject to the qualifications that enforcement of the rights and remedies
created thereby are subject to (i) bankruptcy, insolvency, reorganization,
moratorium and other laws of general application affecting the rights and
remedies of creditors, and (ii) general principles of equity (regardless of
whether such enforcement is considered in a proceeding in equity or at law).
Schedule 4.11 hereto contains a list of all licenses or personal property leases
under or pursuant to which Target is obligated to make cash payments of or
deliver products or render services with a value greater than $1,000 or receive
cash payments of or receive products services with a value greater than $1,000
or which are otherwise material to Target (collectively, "Leases") together with
the location and nature of each of the leased or licensed personal properties,
the termination date of each such license or lease, the name of the licensor or
lessor and all rental and other payments made or required to be made during the
twelve-month period ending December 31, 1996.
4.12 TITLE TO PROPERTY; ENCUMBRANCES. (a) Target has, and at the
Closing will have, good and valid title to its property (tangible and
intangible), including without limitation, all property reflected on, or
included in, the balance sheet (the "Balance Sheet") included in the Financial
Statements as owned by Target, and all property acquired by Target since the
date of the last Balance Sheet supplied to Parent (the "Balance Sheet Date"), in
each case free and clear of all Liens except (i) as set forth on Schedule 4.12
hereto, (ii) for sales and other dispositions in the usual and ordinary course
of business since the Balance Sheet Date for not less than the carrying value
thereof and (iii) Permitted Liens (as hereinafter defined). The term "Liens", as
used in this Agreement, shall mean all liens, mortgages, security interests,
pledges, deeds of trust, options, adverse claims or other charges and
encumbrances (including, without limitation, any conditional sale or other title
retention agreement or lease in the nature thereof as to which Target is the
buyer or lessee, any sale of receivables with recourse against Target or any
other person except the account debtor, any filing or agreements to file a
financing statement as a debtor under the Uniform Commercial Code or any similar
statute of any jurisdiction to reflect ownership by a third party of property
leased to Target under a lease that is not in the nature of a conditional sale
or title retention agreement, or any subordination arrangement in favor of any
person). The term "Permitted Liens", as used in this Agreement, shall mean liens
for ad valorem real or personal property taxes or assessments accrued since the
Balance Sheet Date but not due and liens in respect of pledges or deposits under
workers' compensation laws or similar legislation, carriers', warehousemen's,
mechanics', laborers' and materialmen's and similar liens, accrued since the
Balance Sheet Date if the obligations secured by such liens are not delinquent
and arose in the ordinary course of business consistent with past practices,
together with liens that are specifically identified on the Balance Sheet or in
the notes thereto.
(b) [INTENTIONALLY OMITTED]
(c) 590 Pascack is the only real property owned or leased by Target
(the "Real Property"). Except as set forth in Schedule 4.12(c), Target has good
and marketable title to 590 Pascack free and clear of all Liens, other than
Liens listed on Schedule 4.12(c) and Permitted Liens. Title to 590 Pascack shall
be insurable at regular rate by a suitable title company doing business in the
State of New Jersey. Target has not received any notice that such buildings,
structures, mechanical systems and structures violate any zoning regulations or
ordinances of the state, city, town or village where the Real Property is
located or any applicable statutes, regulations, ordinances and requirements
(collectively, "Laws") governing the Real Property. Except as set forth on
Schedule 4.12(c), no officer or director of Target or any of Shareholders has
knowledge, or reason to know, of any past or present violation, or any past or
present use of the Real Property which is likely to result in any violation, or
of any pending or threatened action or proceeding alleging any violations or
past violations which have been waived or remedied and, in either case, will not
result in any future liability to Target or Parent.
4.13 ENVIRONMENTAL, HEALTH AND SAFETY MATTERS. To the best of its
knowledge, except as described in Schedule 4.13, Target has not received any
notice from a Governmental Agency that any of its properties are not in
compliance with all federal, state and local laws, ordinances, codes, rules,
standards, regulations, orders and common law applicable to worker health and
safety; air emissions; water discharges; solid wastes; hazardous materials;
drinking water; toxic substances; waste storage, treatment, transportation and
disposal; and groundwater and soil monitoring; or otherwise relating to workers
and/or the environment applicable to its business as presently conduced; and
except as so described there are no violations, citations or claims pending or,
to the knowledge of each of the Shareholders, threatened with respect to any
such matters. To the best of its knowledge, except as so described, Target has
received no notice that any toxic, hazardous or otherwise regulated substances
("Hazardous Materials") have been disposed of, discharged, buried or deposited
in, on or under the ground by or on behalf of Target within the boundaries of a
location occupied or formerly occupied by it or elsewhere, in violation of, or
has not been reported to a Governmental Agency as required by, any applicable
law, regulation or order (now in effect or in effect at the time of the relevant
act); neither Target nor any of the Shareholders have received notice of any
spills, discharges or emission of Hazardous Materials which have occurred within
the boundaries of any such location during or prior to the occupancy thereof by
Target or a subsidiary thereof in violation of, or has not been reported to a
Governmental Agency as required by, any applicable law, regulation or order (now
in effect or in effect at the time of the relevant act); and, except as so
described, Target has received no notice that there are any materials containing
urea formaldehyde, asbestos or polychlorinated biphenyls or any other Hazardous
Materials in or about any location presently utilized by Target in violation of
any applicable law, regulation or order.
4.14 ABSENCE OF CERTAIN CHANGES. Except as set forth in Schedule 4.14,
since December 31, 1996 Target has not:
(i) Suffered any material adverse change in its working capital,
condition (financial or otherwise), assets, liabilities (absolute, accrued,
contingent or otherwise), reserves, business, operations or, to the knowledge of
Target or any of its officers or directors, prospects;
(ii) Incurred any liabilities or obligations (absolute, accrued,
contingent or otherwise) except non-material items incurred in the ordinary
course of business and consistent with past practice;
(iii)Paid, discharged or satisfied any claims, liabilities or
obligations (absolute, accrued, contingent or otherwise) other than (A) the
payment, discharge or satisfaction in the ordinary course of business and
consistent with past practice of liabilities and obligations reflected or
reserved against in the Financial Statements or incurred in the ordinary course
of business and consistent with past practice since such date or (B) the payment
of the outstanding principal and interest of the mortgage against 590 Pascack or
(C) payment of the premium to the bonding company with respect to the lost stock
certificate for the 83,237 shares of Parent Stock owned by Target;
(iv) Permitted or allowed any of its property or assets (real,
personal, or mixed, tangible or intangible) to be subjected to any Lien, except
for Permitted Liens;
(v) Cancelled any debts or waived any claims or rights of substantial
value;
(vi) Made any single capital expenditure or commitment in excess of
$5,000 for additions to property, plant, equipment or intangible capital assets
or made aggregate capital expenditures and commitments in excess of $10,000 for
additions to property, plant, equipment or intangible capital assets;
(vii)Declared, paid or set aside for payment any dividend or other
distribution in respect of its capital stock or redeemed, purchased or otherwise
acquired, or issued or sold, or authorized or proposed the issuance or sale of,
directly or indirectly, any shares of capital stock or other securities of
Target;
(viii) Made any change in any method of accounting or accounting
practice or in depreciation or amortization policies or rates adopted by it;
(ix) Paid, loaned or advanced any amount to, or sold, transferred or
leased any properties or assets (real, personal or mixed, tangible or
intangible) to, or entered into any agreement or arrangement of any kind with,
any of its officers directors or stockholders or any affiliate or associate of
any of its officers, directors or stockholders (other than legal and accounting
expenses);
(x) Agreed, whether in writing or otherwise, to take any action
described in this Section.
4.15 BANK ACCOUNTS. Schedule 4.15 sets forth the names and locations of
all banks, trust companies, savings and loan associations and other financial
institutions at which Target maintains accounts of any nature and names of all
persons authorized to draw thereon, make withdrawals therefrom or have access
thereto. The Shareholders have delivered to Parent copies of all records,
including all signature or authorization cards, pertaining to such bank
accounts.
4.16 RELATED PARTY TRANSACTION. No officer, director, shareholder or,
to the knowledge of Target and each Shareholder and no affiliate or relative of
any of them:
(i) owns, directly or indirectly, in whole or in part, any tangible or
intangible property, the use of which is necessary for the conduct of Target's
business, and which if not obtained from such person could have a Material
Adverse Effect; or
(ii) owes any amount to Target or, to the knowledge of Target and
Shareholders, has any cause of action or other claim against Target other than
for current wages accrued in the ordinary course of business consistent with
past practices.
4.17 BROKERS AND FINDERS. All negotiations on the part of Shareholders
relative to the transactions contemplated by this Agreement have been carried
out by Shareholders without the intention of any person in a manner giving rise
to any valid claim for a finders fee, brokerage commission or similar claim.
None of Target, Shareholders or any of its or their respective officers,
directors or employees has employed any broker or finder or incurred any
liability for any brokerage fees, commissions or finders' fees in connection
with the transactions contemplated by this Agreement. Any claim for a brokerage
fee, commission or finder fee shall be a liability of Shareholders, not Parent
or Target.
4.18 DISCLOSURE. No representations or warranties of Shareholders
contained in this Agreement and no statement contained in any document
(including, without limitations, the Financial Statements and the Schedules to
this Agreement), certificate, or other writing furnished or to be furnished by
Target or Shareholders to Parent or any of its representatives pursuant to the
provisions hereof or in connection with the transactions contemplated hereby,
contains or will contain any untrue statement of a material fact or omits or
will omit to state any material fact required to be stated therein or necessary,
in the context in which made, to make the statements herein or therein not false
or misleading.
4.19 OWNERSHIP OF PARENT'S COMMON STOCK. Target currently owns 83,237
Shares of Parent's Common Stock (subject to the stock split referred to in
Section 3.1(b)) free and clear of any liens or encumbrances.
4.20 SCHEDULES. Inclusion in any Schedule of any disclosure shall not
be construed as relevant to any determination of materiality. Any matters
disclosed on one Schedule shall be disclosed for purposes of that Schedule only
except for cross references from one Schedule to another Schedule.
4.21 OTHER MATERIAL ADVERSE INFORMATION. Except as set forth in this
Agreement or in the Financial Statements, certificates, exhibits or Schedules
delivered pursuant hereto, neither Target nor any of the Shareholders have any
knowledge of any information of a materially adverse nature with respect to the
business, assets, operations, properties or condition (financial or otherwise)
of Target.
4.22 INFORMATION CONCERNING PARENT. Each Shareholder has received a
package of information concerning Parent including Parent's Annual Report on
Form 10-K for the year ended December 31, 1995; Quarterly Reports on Form 10-Q
for each of the quarters ended March 31, 1996, June 30, 1996, and September 30,
1996; and the 1997 Proxy Statement. Each Shareholder acknowledges having
reviewed the forgoing information and having had opportunity to ask management
of Parent questions concerning the financial condition and business prospects of
Parent.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF PARENT AND SUB
Parent and Sub hereby represent and warrant to Shareholders as follows:
5.1 ORGANIZATION. Parent and Sub are corporations each duly organized,
validly existing and in good standing under the laws of New Jersey and each has
the requisite corporate power and authority to carry on its business as now
being conducted.
5.2 AUTHORITY TO EXECUTE AND PERFORM AGREEMENT; NO BREACH. Except as
listed on Schedule 5.2, upon receiving the required approval of its respective
Board of Directors, Parent and Sub each has the full legal right and power and
all authority and approvals required to enter into, execute and delivery this
Agreement and to perform fully its obligations hereunder. This Agreement has
been duly executed and delivered by Parent and Sub, and assuming due execution
and delivery by Target and Shareholders, constitutes the valid and binding
obligation of Parent and Sub, enforceable against each in accordance with its
terms, subject to the qualifications that enforcement of the rights and remedies
created hereby is subject to (i) bankruptcy, insolvency, reorganization,
moratorium and other laws of general application affecting the rights and
remedies of creditors, and (ii) general principles of equity (regardless of
whether such enforcement is considered in a proceeding in equity or at law).
Except as otherwise specified in this Agreement or any Schedule hereto, no
approval or consent of, or filing with, any government or regulatory authority
is required to be obtained by Parent in connection with the execution and
delivery by Parent of this Agreement and the consummation and performance by it
of the transactions contemplated hereby, other than (i) as set forth on Schedule
5.2, and (ii) consents or approvals the denial of which or the failure to obtain
which could not affect in any material respect the transactions contemplated
hereby. The execution, delivery and performance of this Agreement by Parent and
the consummation of the transactions contemplated hereby in accordance with the
terms and conditions hereof by Parent will not:
(i) violate any provision of Parent's Certificate of Incorporation of
By-Laws;
(ii) violate, conflict with or result in the breach of any of the terms
of, or constitute (or with notice or lapse of time or both constitute) a default
under, any contract or other agreement to which Parent is a party or by or to
which it or its assets or properties may be bound or subject;
(iii) violate any order, judgment, injunction, award or decree of any
court, arbitrator, governmental or regulatory body, by which Parent, or the
securities, assets, properties or business of Parent is bound; or
(iv) violate any statute, law or regulation.
5.3 BROKERS AND FINDERS. Neither Parent nor any of its officers,
directors, employees or stockholders has employed any broker or finder or
incurred any liability for any brokerage fees, commissions or finders' fees in
connecting with the transactions contemplated by this Agreement.
5.4 DISCLOSURE. No representations or warranties of Parent contained in
this Agreement and no statement contained in any document, certificate or other
writing furnished or to be furnished by Parent to Shareholders or any of its
representatives pursuant to the provisions hereof or in connection with the
transactions contemplated hereby, contains or will contain any untrue statement
of a material fact or omits or will omit to state any material fact required to
be stated therein or necessary, in the context in which made, to make the
statements herein or therein not false or misleading.
ARTICLE VI
COVENANTS
The parties hereby covenant and agree as follows:
6.1 REASONABLE EFFORTS; FURTHER ACTIONS. The parties hereto each will
use all reasonable efforts to take or cause to be taken all actions and to do or
cause to be done all things necessary, proper or advisable under applicable laws
and regulations to consummate and make effective the transactions contemplated
by this Agreement, and Target and each Shareholder will use its, his or her
respective best efforts to assure that Parent has the benefits of all of
Target's and Shareholders' covenants and agreements contained in this Agreement.
If, at any time after the Closing Date, any further action is necessary or
desirable to carry out the purposes of this Agreement or to vest Parent and
Target with full title to the Shares, each party to this Agreement shall take
all such necessary action.
6.2 CONSENTS. Parent, Target and Shareholders will cooperate, and the
Shareholders will cause Target to cooperate, with each other in filing any
necessary applications, reports or other documents with, giving any notices to,
and seeking any consents from, all regulatory bodies and all governmental
agencies and authorities and all third parties as may be required in connection
with the consummation of the transactions contemplated by this Agreement, and in
seeking necessary consultation with and prompt favorable action by any such
body, agency, authority or third party. Each of the parties hereto will use its
best efforts to obtain all such consents and favorable actions required by it
for the consummation of the transactions contemplated hereby.
6.3 CERTAIN TAXES. Target or the Shareholders will pay or reserve Funds
for all Taxes with respect to the income of Target earned through the Closing
Date.
6.4 CORRECT AS OF CLOSING. Each representation and warranty of
Shareholders, Target and/or Parent, set forth in this Agreement shall be true
and correct as of the Closing Date.
6.5. TARGET STOCK. No Shareholder will create or incur or suffer to
exist any mortgage, lien, pledge, hypothecation, charge, encumbrance or
restriction of any kind on the Target Stock other than disclosed in this
Agreement.
6.6 SECURITIES LAW - PROVISIONS. (a) Each Shareholder acknowledges that
Parent's Common Shares to be delivered to him pursuant to this Agreement have
not been and are not being registered under the Securities Act of 1933 as
amended (the "1933 Act"), and that accordingly Parent's Common Shares are not
transferable except as permitted under various exemptions contained in the 1933
Act and the rules of the Securities and Exchange Commission ("SEC") thereunder.
The Provisions contained in this Paragraph 6.6 are intended to ensure compliance
with the 1933 Act.
(b) Each Shareholder covenants, warrants, and represents that none of
Parent's Common Shares that will be issued to him or her pursuant to this
Agreement will be offered, sold, assigned, pledged, hypothecated, transferred,
or otherwise disposed of except after full compliance with all of the applicable
provisions of the 1933 Act and the rules and regulations of the Securities and
Exchange Commission under the 1933 Act.
(c) Each Shareholder represents and warrants to Parent that he or she
is acquiring Parent's Common Shares to be issued under this Agreement for his or
her own account, for investment, and not with a view to their resale or other
distribution except as the same may be permitted under the 1933 Act and under
the rules and regulations of the SEC thereunder.
(d) Each Shareholder agrees not to sell, transfer, hypothecate, or
otherwise dispose of any of Parent's Common Shares received pursuant to this
Agreement unless and until he or she (a) shall have presented Parent with a
written legal opinion in form and substance satisfactory to counsel for Parent
(which may include counsel to the Parent) to the effect that the disposition is
permissible under the terms of the 1933 Act and regulations under the 1933 Act;
or (b) shall have complied with the registration and prospectus requirements of
the 1933 Act relating to the disposition. The Shareholders recognize that
certain of the Shareholders who are not deemed affiliates of Parent may be
eligible for an exemption from registration requirements pursuant to SEC Rule
145 and other Shareholders who would be deemed affiliates of Parent and not
eligible to avail themselves of Rule 145. Each Shareholder further agrees that
the certificates evidencing the Common Shares he or she will receive shall
contain the following legend:
THE SECURITIES EVIDENCED BY THIS
CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, HAVE BEEN
TAKEN FOR INVESTMENT AND MAY NOT BE SOLD
OR OFFERED FOR SALE UNLESS A REGISTRATION
STATEMENT UNDER THE FEDERAL SECURITIES
ACT OF 1933, AS AMENDED WITH RESPECT TO
THESE SHARES, IS THEN IN EFFECT OR ANY
EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE ACT IS THEN IN FACT
APPLICABLE TO THE OFFER OR SALE
Parent shall also place a "stop transfer" order against any transfer of
the Common Shares until one of the conditions set forth above has been met.
(e) If within two years after the Closing Date, Parent shall file a
registration statement under the 1933 Act, as then in effect, covering an
offering by Parent of Parent's Common Shares for cash, Parent will mail to each
Shareholder (at his or her address in Parent's share transfer records) written
notice of its intent to file the registration statement. If a Shareholder shall
deliver a written request to Parent, within twenty days after the mailing of the
notice, setting forth the number of Common Shares he or she intends to dispose
of, Parent agrees to use reasonable efforts to include those shares of each
Shareholder in the registration statement and related underwriting arrangements.
Each Shareholder agrees that if the offering by Parent is underwritten, his or
her shares are to be underwritten by the same underwriter or underwriters on the
same basis as the other shares included. If in spite of the reasonable efforts
of Parent the inclusion of all of the shares that each Shareholder intends to
sell shall not be acceptable to the managing underwriter or underwriters of the
offering, Parent may limit the number of shares of each Shareholder to be
registered to the number of shares bearing the same proportion as such
Shareholder's shares relate to the total number of shares being offered in the
registration statement and related underwriting. If the offering is not
completed within ninety days after the effective date of the registration
statement, Parent shall be entitled to de-register any unsold portion of the
shares. The manner and conduct of any registration, including the contents of
the registration statement and of any underwriting or other related agreements,
shall be entirely in the control and discretion of Parent. Each Shareholder
agrees to cooperate with Parent in the preparation and filing of any
registration statement prepared and filed under this subparagraph. Parent shall
bear all out-of-pocket expenses, fees, and disbursements (except for
underwriter's discount and registration fees related to the Shares of any
Shareholder) incurred in connection with carrying out its obligations under this
subparagraph, provided, however, that each Shareholder shall make the customary
agreements, representations, warranties, and indemnifications to the
underwriters in any offering with respect to any shares included at his or her
request. Nothing in the subparagraph shall be deemed to prevent the inclusion in
any offering of other and further shares for the account of other shareholders
of Parent.
(f) Parent will make reasonable efforts to obtain, prior to the
Effective Time, approval for the listing on the ASE of the shares of Parent
Common Stock to be received by the Shareholders as the Merger Consideration.
6.7 NEW JERSEY SECURITIES ACT. It is understood and agreed that the
Closing is subject to any and all requirements of New Jersey law applying to the
issuance and transfer of Parent's Common Shares in exchange for all of the
issued and outstanding shares of the Corporation. In no event shall Parent be
liable to anyone for failure to sell or issue any of its Common Shares unless
and until all applicable requirements of New Jersey law relating to the sale and
issuance have been met.
6.8 APPROVAL OF SHAREHOLDERS. Target shall (a) cause a meeting of its
Shareholders to be duly called and held in accordance with the laws of the State
of New Jersey and Target's Certificate of Incorporation and By-Laws as soon as
reasonably practicable for the purpose of voting on the adoption and approval of
the Agreement and the Merger (the "Proposal"), (b) recommend to its
Shareholders' approval of the Proposal (except to the extent that the Board of
Directors in the discharge of their fiduciary duties to Target deems the Merger
to be not in the best interest of Target), (c) use its best efforts to obtain
the necessary approval of its Shareholders, (d) take all action required under
the NJBCA with respect to the holders of Target Dissenting Shares, and (e) in
cooperation with Parent mail to Shareholders a transmittal letter in form and
substance reasonably satisfactory to Parent to be used by such Shareholders in
forwarding their certificates for surrender and exchange.
6.9 THIRD PARTY CONSENTS. Each party to this Agreement shall use its
best efforts to obtain, as soon as reasonably practicable, all permits,
authorizations, consents, waivers and approvals from third parties or
governmental authorities necessary to consummate this Agreement and the Merger
Agreement and the transactions contemplated hereby or thereby, including,
without limitation, any permits, authorizations, consents, waivers and approvals
required in connection with the Merger.
ARTICLE VII
CONDITIONS TO TARGET'S OBLIGATIONS
The obligations of Target to effect the Merger under this Agreement are
subject to the fulfillment on or prior to the Closing Date of the following
conditions, any one or more of which may be waived by Shareholders:
7.1 REPRESENTATIONS, WARRANTIES AND COVENANTS. The representations and
warranties of Parent and Sub contained in this Agreement and in any certificate
delivered to Shareholders pursuant to this Agreement shall be true and correct
on and as of the Closing Date with the same force and effect as though made on
and as of the Closing Date. Parent and Sub shall have performed and complied in
all material respects with all agreements, obligations, and conditions required
by this Agreement to be performed or complied with by it at or prior to the
Closing Date.
7.2 NO ACTION OR PROCEEDINGS. No statute, rule, regulation, decree,
order or injunction shall have been promulgated, enacted or entered by an
Governmental Agency or judicial authority and be in effect which would prohibit
the consummation of the transactions contemplated by this Agreement and no
action or proceeding by or before any court or other Governmental Agency shall
have been instituted or threatened by any party to restrain or prohibit Parent
from consummating the transactions contemplated by this Agreement or to
invalidate the transactions contemplated by this Agreement.
7.3 OFFICER'S CERTIFICATE. Target shall have received a certificate,
executed by an executive officer of Parent, dated the Closing Date, satisfactory
in form and substance to Target and their counsel, certifying as to the
satisfaction of the conditions set forth in Sections 7.1 and 7.2.
7.4 SECRETARY'S CERTIFICATE. Target shall have received a certificate,
dated the Closing Date, of the Secretary or an Assistant Secretary of Parent
with respect to the accuracy and completeness of the resolutions adopted by the
Board of Directors of Parent authorizing this Agreement and the consummation of
the transactions contemplated hereby.
7.5 OPINION. Target and the Shareholders shall have received the
Opinion described in Section 8.5(c).
7.6 OTHER CLOSING DELIVERIES. Target shall have received all documents
and payments required to be delivered and/or made to Shareholders by Parent and
Sub pursuant to Sections 9.2 and 9.3 hereof, respectively.
ARTICLE VIII
CONDITIONS TO PARENT'S AND SUB'S OBLIGATIONS
The obligation of Parent and Sub to effect the Closing under this
Agreement are subject to the fulfillment on or prior to the Closing Date of the
following conditions, any one or more of which may be waived by Parent:
8.1 REPRESENTATIONS, WARRANTIES AND COVENANTS. The representations and
warranties of Target Shareholders contained in this Agreement and in any
certificate delivered to Parent pursuant to this Agreement shall be true and
correct on and as of the Closing Date with the same force and effect as though
made on and as of the Closing Date. Target and Shareholders shall have performed
and complied in all material respects with all agreements, obligations and
conditions required by this Agreement to be performed or complied with by it and
them at or prior to the Closing.
8.2 GOVERNMENTAL APPROVALS; CONSENTS. All consents, permits, approvals,
licenses or orders from any Governmental Agency or other third party required to
be obtained for the lawful consummation of the transactions contemplated by this
Agreement, shall have been obtained except where failure to obtain such
consents, permits, approvals, licenses or orders would not have a Material
Adverse Effect (whether or not such effect is referred to or described in any
Schedule).
8.3 NO ACTION OR PROCEEDINGS. No statute, rule, regulation, decree,
order or injunction shall have been promulaged, enacted or entered by any
Governmental Agency or judicial authority and be in effect which would prohibit
the consummation of the transactions contemplated by this Agreement and no
action or proceeding by or before any court or other Governmental Agency shall
have been instituted or threatened by any party to restrain or prohibit
Shareholders or Target from consummating the transactions contemplated by this
Agreement.
8.4 MATERIAL ADVERSE CHANGE. From the hereof date to the Closing Date,
Target shall not have suffered any change which has or could have a Material
Adverse Effect (whether or not such effect is referred to or described in any
Schedule).
8.5 OPINION OF COUNSEL. (a) Target shall have delivered to Parent an
opinion of counsel for Target, addressed to Parent dated the Closing Date, in
form acceptable to Parent stating that the Target is duly organized, validity
existing and good standing under the laws of the State of New Jersey and that
Target has taken all necessary actions to effectuate the Merger; (b) Parent
shall have received an opinion from special banking counsel, Xxxxxx, XxXxxxxxxx
& Xxxxxx, P.A., in form acceptable to Parent stating that all banking law
requirements have been satisfied and (c) Parent shall have received an opinion
from special tax and securities counsel, Xxxxxx, XxXxxxxxxx & Xxxxxx, P.A., in a
form acceptable to Parent stating that the Merger will qualify as a tax free
reorganization and that SEC Rule 145 applies to the Merger and the consequences
of the application of such Rule. Parent, Target and the Shareholders shall
provide Xxxxxx, XxXxxxxxxx & Xxxxxx, P.A. with such representation as may
customarily be required in connection with their opinions.
8.6 CONTINUITY OF INTEREST AGREEMENT. At or prior to the Closing Date,
Target, Parent and a majority in interest of the Shareholders shall execute a
Continuity of Interest Agreement in substantially the form attached as Exhibit D
hereto.
8.7 OFFICER'S CERTIFICATE. Parent shall have received a certificate,
executed by an executive officer of Target, dated the Closing Date, satisfactory
in form and substance to Parent and its counsel, certifying as to the
satisfaction of the conditions set forth in Section 8.1 and 8.2 hereof.
8.8 SECRETARY'S CERTIFICATE. Parent shall have received a certificate
dated the Closing Date, from the Secretary or Assistant Secretary of Target with
respect to the accuracy and completeness of the resolutions adopted by the Board
of Directors of Target authorizing this Agreement and the consummation of the
transactions contemplated hereby.
8.9 GOOD STANDING CERTIFICATE. Parent shall have received certificates
issued by appropriate Governmental Agencies evidencing, as of a recent date, the
good standing and tax status of Target in the jurisdiction in which it is
incorporated and in the jurisdictions in which it is qualified to do business;
and as of a date not more than two days prior to the Closing Date, telegrams, if
available, issued by the appropriate Governmental Agencies with respect to the
good standing and tax status of Target in such jurisdictions.
8.10 CERTIFIED CHARTER DOCUMENTS. Parent shall have received a copy of
the Certificate of Incorporation or other applicable charter instrument and all
amendments thereto of Target, certified by the appropriate Government Agencies.
8.11 CERTIFIED BY-LAWS. Parent shall have received a copy of the
By-Laws of Target, as amended through the Closing Date, certified by Target's
Secretary.
8.12 STRUCTURAL AND ENVIRONMENTAL REPORTS. Parent shall have obtained
reports from experts, satisfactory to Parent, or shall otherwise be satisfied,
that the improvements to 590 Pascack are free of material structural defects,
that there are no material defects to the HVAC systems or electrical systems and
there are no adverse environmental conditions affecting 590 Pascack.
8.13 MATTERS SATISFACTORY TO PARENT'S COUNSEL. All actions,
proceedings, opinions and ancillary documents required or incidental to the
consummation of the transactions contemplated by this Agreement, and all legal
matters related thereto, shall be reasonably satisfactory to counsel for Parent.
8.14 OTHER CLOSING DELIVERIES. Parent shall have received all documents
required to be delivered to Parent by Shareholders and Target pursuant to
Sections 7.1 and 7.3 hereof, respectively.
8.15 ISRA. Parent shall have received satisfactory evidence that the
transactions contemplated by this Agreement will not trigger compliance with the
provisions of the Environmental Clean-up Responsibility Act, N.J.S.A. 13:1K-6,
et seq. ("ISRA") or that all provisions of ECRA have been satisfied.
8.16 SHAREHOLDER OFFER PROCEDURES. All requirements of N.J.S.A.
14A:10-9, including shareholder notice and governmental authorities filing
requirements, have been complied with by Parent; it being understood that Parent
will make its best effort to have these requirements complied within a timely
manner.
ARTICLE IX
ACTIONS TO BE TAKEN AT THE CLOSING
The following actions shall be taken at the Closing, each of which
shall be conditional on completion of all the others and all of which shall be
deemed to have taken place simultaneously:
9.1 DELIVERIES BY SHAREHOLDERS AND TARGET. At or prior to the Closing,
Shareholders shall deliver the Target stock certificates to the Exchange Agent
in compliance with Section 3.3(d) hereof. Shareholders and Target shall also
deliver to Parent all of the following:
(a) the opinions of counsel required to be delivered pursuant to
Section 8.5;
(b) the certificate of an executive officer of Target required to be
delivered pursuant to Section 8.7;
(c) the certificate required to be delivered pursuant to Section 8.8;
(d) the resignation of those directors and officers of Target whose
names are set forth in Schedule 9.1 hereto and such others as shall be requested
in writing by Parent prior to the Closing;
(e) the good standing and other certificates and telegrams required to
be delivered pursuant to Section 8.9;
(f) the certificate copies of the Certificate of Incorporation required
to be delivered pursuant to Section 8.10;
(g) the stock books, stock ledgers, minute books, corporate seals and
financial records and statements of Target;
(h) the copies of the By-Laws required to be delivered pursuant to
Section 8.11; and
(i) certificates with respect to the incumbency and signatures of
certain officers of Target who have executed this Agreement and any other
certificates or documents executed or to be executed in connection herewith.
9.2 DELIVERIES BY PARENT. At the Closing, Parent shall deliver or cause
to be delivered:
(i) Merger Consideration, as adjusted, required to be paid pursuant to
Section 1.2 (to be paid within seven (7) days of Closing);
(ii) the certificate of an executive officer of Parent required to be
delivered pursuant to Section 7.4;
(iii) the certificate of the Secretary or Assistant Secretary of Parent
required to be delivered pursuant to Section 7.5; and
(iv) certificates with respect to the incumbency and signatures of
certain officers of Parent who have executed this Agreement and any other
certificates or documents executed or to be executed in connection herewith.
ARTICLE X
INDEMNIFICATION; SURVIVAL
10.1 INDEMNIFICATION. (a) Shareholders, jointly and severally, agree to
indemnify and hold harmless Parent (and its directors, officers, stockholders,
employees, affiliates, agents and assigns) from and against any and all losses,
liabilities, damages, deficiencies, assessments, judgments, costs or expenses
(including, without limitation, interest, penalties and reasonable attorneys'
fees and disbursements) (collectively, "Claims") arising out of or based upon
the breach or inaccuracy of any representation or warranty contained herein or
in any of the documents delivered pursuant hereto made by Shareholders, the
non-performance or breach by Target or Shareholders of any covenant, term or
provision to be performed by it or any of them whether hereunder or in any of
the documents delivered pursuant hereto. Notwithstanding the foregoing,
Shareholders shall not be liable under this Section 10.1(a) unless and until the
aggregate amount of liability under this Section 10.1(a) exceeds $10,000,
whereupon Shareholders shall be jointly and severally liable for all amounts in
excess of $10,000.
(b) Parent hereby agrees to indemnify and hold harmless Shareholders
(and their respective successors and legal representatives) from and against any
Claims arising out of or based upon the breach or inaccuracy of any
representation or warranty contained herein or in any of the documents delivered
pursuant hereto made by Parent, or the non-performance or breach by Parent of
any covenant, term or provision to be performed by it hereunder or in any of the
documents delivered pursuant hereto.
(c) Parent's right to indemnification as provided in this Section 10.1
shall not be eliminated, reduced or modified in any way as a result of the fact
that (i) Parent has notice of a breach or inaccuracy of any representation,
warranty or covenant contained herein, or (ii) Parent has been provided with
access, as requested by Parent, to officers and employees of Target and such of
Target's books, documents, contracts and records as has been provided to Parent
in response to Parent's requests.
10.2 CONDITIONS OF INDEMNIFICATION. (a) A party entitled to
indemnification hereunder (the "Indemnified Party") shall notify the party or
parties liable for such indemnification (the "Indemnifying Party") in writing of
any Claim which the Indemnified Party has determined has given or could give
rise to a right of indemnification under this Agreement. Such notice shall be
given within a reasonable (taking into account the nature of the Claim) period
of time after the Indemnified Party has actual knowledge thereof. The
Indemnifying Party shall satisfy its obligations under this Article X within
twenty days after receipt of subsequent written notice from the Indemnified
Party if an amount is specified therein, or promptly following receipt of
subsequent written notice or notices specifying the amount of such Claim or
additions thereto; provided, however, that for so long as the Indemnifying Party
is in good faith defending a Claim pursuant to Section 10.2(b) hereof, its
obligation to indemnify the Indemnified Party with respect thereto shall be
suspended (other than with respect to any costs, expenses or other liabilities
incurred by the Indemnified Party prior to the assumption of the defense by the
Indemnifying Party). Failure to provide a notice of Claim within the time period
referred to above shall not constitute a defense to a Claim or release the
Indemnifying Party from any obligation hereunder to the extent that such failure
does not prejudice the position of the Indemnifying Party.
(b) If the facts giving rise to any such indemnification involve any
actual, threatened or possible Claim or demand by any person not a party to this
Agreement against the Indemnified Party, the Indemnifying Party shall be
entitled to contest or defend such claim or demand at its expense and through
counsel of its own choosing, which counsel shall be reasonably acceptable to the
Indemnified Party, if the Indemnifying Party gives written notice of its
intention to assume the contest and defense of such Claim or demand to the
Indemnified Party as soon as practicable, but in no event more than thirty days
after receipt of the notice of Claim, and provides the Indemnified Party with
appropriate assurances as to the creditworthiness of Indemnifying Party, that
the Indemnifying Party will be in a position to pay all fees, expenses and
judgments that might arise out of such Claim or demand. The Indemnified Party
shall have the obligation to cooperate in the defense of any such Claim or
demand and the right, at its own expense, to participate in the defense of any
Claim. So long as the Indemnifying Party is defending in good faith any such
Claim or demand asserted by a third party against the Indemnified Party, the
Indemnified Party shall not settle or compromise such Claim or demand. The
Indemnifying Party shall have the right to settle or compromise any such Claim
or demand without the consent of the Indemnified Party at any time utilizing its
own funds to do so if in connection with such settlement or compromise the
Indemnified Party is fully released by the third party and its paid in full any
indemnification amounts due hereunder. The Indemnified Party shall make
available to the Indemnifying Party or its agents all records and other
materials in the Indemnified Party's possession reasonably required by it for
its use in contesting any third party Claim or demand and shall otherwise
cooperate, at the expense of the Indemnifying Party, in the defense thereof in
such manner as the Indemnifying Party may reasonably request. Whether or not the
Indemnifying Party elects to defend such Claim or demand, the Indemnified party
shall have no obligation to do so.
10.3 SURVIVAL. The representations, warranties, covenants and
agreements made by the parties herein or in any of the documents delivered
pursuant hereto shall survive the Closing Date hereof until twenty-four (24)
months after the date hereof; provided, however, that the representations,
warranties and agreements made with regard to Taxes and environmental matters
(as set forth in Section 4.13) shall survive until the applicable statutes of
limitations have expired; provided, further, that with respect to any covenant,
term or provision to be performed hereunder or in any of the documents delivered
pursuant hereto, the right of indemnification under this Article X shall survive
until such covenant, term or provision has been fully paid, performed and
discharged.
ARTICLE XI
TERMINATION
11.1 TERMINATION. This Agreement may be terminated at any time prior to
the Effective Time, whether before or after approval by the Shareholders of
Target:
(a) by mutual consent of Parent and Target; or
(b) by either Parent or Target if (i) the Merger shall not have been
consummated on or before June 30, 1997 (the "Termination Date"), (ii) the
requisite vote of the Shareholders of Target to approve this Agreement, the
Merger Agreement and the transactions contemplated hereby and thereby shall not
be obtained at the meetings, or any adjournments thereof, called therefor, (iii)
any governmental or regulatory body, the consent of which is a condition to the
obligations of Parent, Sub and Target to consummate the transactions
contemplated hereby or by the Merger Agreement, shall have determined not to
grant its consent and all appeals of such determination shall have been taken
and have been unsuccessful, or (iv) any court of competent jurisdiction in the
United States or any State shall have issued an order, judgment or decree (other
than a temporary restraining order) restraining, enjoining or otherwise
prohibiting the Merger and such order, judgment or decree shall have become
final and nonappealable.
11.2 EFFECT OF TERMINATION. In the event of termination of this
Agreement by either Parent or Target, as provided in Section 11.1, this
Agreement shall forthwith become void and there shall be no liability on the
part of either Target, Parent, Sub or their respective officers or directors
(except as set forth in this Section 11.2). Nothing in this Section 11.2 shall
relieve any party from liability for any breach of this Agreement.
ARTICLE XII
MISCELLANEOUS
12.1 WAIVER. Parent or Shareholders may (i) extend the time for the
performance of any of the obligations or other acts of the other, (ii) waive any
inaccuracies in the representations and warranties of the other contained herein
or in any document delivered pursuant hereto and (iii) waive compliance with any
of the agreements of the other or satisfaction of any of the conditions to its
obligations contained herein. Any extension or waiver made pursuant to this
Section 12.1 must be by an instrument in writing signed on behalf of the party
granting the extension of waiver. A waiver by any party of any provision hereof
or breach hereof shall not operate or be construed as the waiver of any other
provision or any subsequent breach.
12.2 EXPENSES. Except as provided in this Section, all fees and
expenses, including, without limitation, all fees of counsel and accountants,
incurred in connection with this Agreement and the Transactions contemplated
hereby shall be borne by the party incurring such fees and expenses.
Notwithstanding the preceding sentence, the legal fees of Xxxxxxx Xxxxx will be
borne by Parent and the legal fees of Andora, Xxxxxxxxx & Xxxxxx and Xxxxxx,
XxXxxxxxxx & Xxxxxx, P.A. and the accounting fees of X.X. Xxxxxx & Company will
be borne by Target. Such fees will be deducted from the cash of Target prior to
determination of the Conversion Ratio.
12.3 NOTICES. All notices, requests, demands and other communications
required or permitted hereunder shall be in writing and shall be deemed to have
been duly given when delivered by hand one business day after delivery to a
reputable overnight carrier or four business days after delivery to the U.S.
Postal Services, if sent by first class mail, certified or registered mail with
postage prepaid or by telecopy with a copy following by hand or by overnight
carrier to mailed, certified or registered mail with postage prepaid:
(a) if to Shareholders, to:
Xxxxxxx X. Xxxxxx, Esq.
Andora, Xxxxxxxxx & Xxxxxx
000 Xxxxxx Xxxxx
Xxxxxxx Xxxx, XX 00000
(b) if to Parent, to:
Xx. Xxxxxxx Xxxxxxxxxx
Senior Vice President
Interchange State Bank
Park 80 West/Plaza Two
Xxxxxx Xxxxx, XX 00000
with a copy to:
Xxxxxxx Xxxxx
000 Xxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxx, Esq.
Telephone No.: (000) 000-0000
Telecopy No.: (000) 000-0000
or to such other person or address as any party shall furnish to the other
parties in writing.
12.4 GOVERNING LAW AND JURISDICTION. This Agreement shall be governed
by and construed in accordance with the internal laws of the State of New
Jersey, without regard to principles of conflicts of law. Any and all suits,
legal actions or proceedings against any party hereto arising out of this
Agreement shall be brought in the Superior Court of New Jersey venued in Bergen
County or, if such court shall not have jurisdiction, any other court of
appropriate jurisdiction sitting in the State of New Jersey and each party
hereby submits to and accepts the exclusive jurisdiction of such courts for the
purpose of such suits, legal action or proceedings. Shareholders agree that
service of all writs, process and summons in any such suit, action or proceeding
may be made upon their agent. Parent agrees that service of all writs, process
and summons in any such suit, action or proceeding brought in any such court may
be made upon having an address as its agent. Each party hereto hereby
irrevocably waives any objection which it may now or hereafter have to the
laying of venue of any such suit, legal action or proceeding in any such court
and hereby further waives any claim that any suit, legal action or proceeding
brought in any such court has been brought in an inconvenient forum.
12.5 BINDING EFFECT; NO ASSIGNMENT. This Agreement shall be binding
upon and inure to the benefit of the parties and their respective successors and
legal representatives. This Agreement is not assignable except by Parent to any
of its affiliates and any other purported assignment shall be null and void. In
the event of any assignment by Parent to an affiliate, Parent shall remain
jointly and severally liable with such affiliate for any obligation of Parent
hereunder. Nothing contained in this Agreement shall be deemed to confer any
right or benefit upon any person other than the parties hereto to the extent
herein provided.
12.6 [INTENTIONALLY OMITTED]
12.7 VARIATIONS IN PRONOUNS. All pronouns and any variations thereof
refer to the masculine, feminine or neuter, singular or plural, as the context
may require.
12.8 COUNTERPARTS. This Agreement may be executed by the parties hereto
in separate counterparts, each of which when so executed and delivered shall be
an original, but all such counterparts shall together constitute one and the
same instrument. Each counterpart may consist of a number of copies hereof each
signed by less than all, but together signed by all, of the parties hereto.
12.9 HEADINGS; SEVERABILITY. The headings in this Agreement are for
reference only, and shall not affect the interpretation of this Agreement. Each
and every provision of this Agreement shall be treated as separate and distinct
and, in the event of any provision hereof being declared invalid, such invalid
provision shall be deemed to be severable and all other provisions hereof shall
remain in full force and effect.
12.10 ENTIRE AGREEMENT. This Agreement (including the Exhibits and
Schedules) and the agreements, certificates and other documents delivered
pursuant hereto contain the entire agreement among the parties with respect to
the transactions described herein, and supersede all prior agreements and
understandings, written or oral, with respect thereto.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
ATTEST/WITNESS
INTERCHANGE FINANCIAL SERVICES CORP.
BY: /s/Xxxxxxx X. Xxxxxx
---------------------
XXXXXXX X. XXXXXX, PRESIDENT
WASHINGTON INTERCHANGE CORP.
/s/JoAnn Mistritto BY: /s/Xxxxxxxx X. X'Xxxxxx
-----------------------
XXXXXXXX X. X'XXXXXX, PRESIDENT
WIC ACQUISITION CORP.
BY: /s/Xxxxxxx Xxxxxxxxxx
---------------------
XXXXXXX XXXXXXXXXX, PRESIDENT
/s/JoAnn Mistritto /s/Xxxxxxx Xxxxxxxxx
----------------------
XXXXXXX XXXXXXXXX, SHAREHOLDER
/s/Xxxxxxx X. Xxxxxx
/s/XxXxx Mistritto -----------------------
XXXXXXX X. XXXXXX, SHAREHOLDER
/s/Xxxxx M Piano /s/Xxxxxx Xxxxx
-----------------------
XXXXXX XXXXX, SHAREHOLDER
/s/Xxxxxxx X. Xxxxxxx /s/Xxxxxx Xxxxxxx
-----------------------
XXXXXX XXXXXXX, SHAREHOLDER
/s/JoAnn Mistritto /s/Xxxxxx X. Xxxxxxx
-----------------------
XXXXXX X. XXXXXXX, DDS,SHAREHOLDER
/s/JoAnn Mistritto /s/Xxxx X. Xxxxxxxxx
-----------------------
XXXX X. XXXXXXXXX, SHAREHOLDER
/s/JoAnn Mistritto /s/Xxxxxx X. Xxxxxxx
-----------------------
XXXXXX X. XXXXXXX, SHAREHOLDER
/s/Xxx Xxxxxxxxxx /s/Xxxxx X. Xxxxxx
------------------------
XXXXX X. XXXXXX, SHAREHOLDER
/s/JoAnn Mistritto /s/Xxxx Kleinkops
------------------------
XXXX KLEINKOPS, SHAREHOLDER
/s/JoAnn Mistritto /s/Xxxxxxxx X. X'Xxxxxx
------------------------
XXXXXXXX X. X'XXXXXX, SHAREHOLDER
EXHIBIT A
AMOUNT CERTIFICATE
STOCKHOLDERS OF SHARES PROPORTION NO.
------------ --------- ---------- ---
Xxxxxxx Xxxxxxxxx 20 10%
Xxxxxxx X. Xxxxxx 20 10%
Xxxxxx Xxxxx 20 10%
Xxxxxx Xxxxxxx 20 10%
Xxxxxx X. Xxxxxxx, DDS 20 10%
Xxxx X. Xxxxxxxxx 20 10%
Xxxxxx X. Xxxxxxx 20 10%
Xxxxx X. Xxxxxx 20 10%
Xxxx Kleinkops 20 10%
Xxxxxxxx X. X'Xxxxxx 20 10%
== ===
TOTAL: 200 100%
