STOCK PURCHASE AGREEMENT
by and between
FIRST ALLIANCE CORPORATION
and
STANDARD PACIFIC CORP.
June 20, 1997
TABLE OF CONTENTS
Page
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ARTICLE I
Purchase and Sale
1.1 Agreement of Purchase and Sale. . . . . . . . . . . . . . . . . . . . 1
1.2 Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
ARTICLE II
Conduct Pending the Acquisition
2.1 Conduct of Savings' Business Prior to the Closing Date. . . . . . . . 4
2.2 Forbearance by Seller and Savings . . . . . . . . . . . . . . . . . . 4
2.3 Timeliness of FACO's Consent. . . . . . . . . . . . . . . . . . . . . 6
2.4 Conduct by FACO Prior to the Closing Date . . . . . . . . . . . . . . 6
ARTICLE III
Representations and Warranties
3.1 Representations and Warranties of Seller . . . . . . . . . . . . . . . 6
(a) Recitals True . . . . . . . . . . . . . . . . . . . . . . . . . 6
(b) Capital Stock . . . . . . . . . . . . . . . . . . . . . . . . . 7
(c) Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
(d) Subsidiaries. . . . . . . . . . . . . . . . . . . . . . . . . . 7
(e) Approvals . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
(f) No Violations . . . . . . . . . . . . . . . . . . . . . . . . . 7
(g) Financial Statements. . . . . . . . . . . . . . . . . . . . . . 8
(h) Absence of Certain Changes or Events. . . . . . . . . . . . . . 8
(i) Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
(j) Absence of Claims; Litigation . . . . . . . . . . . . . . . . . 10
(k) Regulatory Actions. . . . . . . . . . . . . . . . . . . . . . . 10
(1) Certain Agreements. . . . . . . . . . . . . . . . . . . . . . . 10
(m) Labor Matters . . . . . . . . . . . . . . . . . . . . . . . . . 11
(n) Employee Benefit Plans. . . . . . . . . . . . . . . . . . . . . 11
(o) Insider Loans; Other Transactions . . . . . . . . . . . . . . . 13
(p) Title to Assets . . . . . . . . . . . . . . . . . . . . . . . . 13
(q) Actual Knowledge as to Conditions . . . . . . . . . . . . . . . 13
(r) Compliance with Laws. . . . . . . . . . . . . . . . . . . . . . 13
(s) Fees. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
(t) Environmental . . . . . . . . . . . . . . . . . . . . . . . . . 14
(u) Performance of Obligations. . . . . . . . . . . . . . . . . . . 16
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(v) Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
(w) Derivative Transactions . . . . . . . . . . . . . . . . . . . . 16
(x) Trust Administration. . . . . . . . . . . . . . . . . . . . . . 17
(y) Qualified Thrift Lender . . . . . . . . . . . . . . . . . . . . 17
3.2 Representations and Warranties of FACO . . . . . . . . . . . . . . . . 17
(a) Recitals True . . . . . . . . . . . . . . . . . . . . . . . . . 17
(b) Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
(c) Approvals . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
(d) No Violations . . . . . . . . . . . . . . . . . . . . . . . . . 17
(e) Financial Statements. . . . . . . . . . . . . . . . . . . . . . 18
(f) Absence of Certain Changes or Events. . . . . . . . . . . . . . 18
(g) Absence of Claims . . . . . . . . . . . . . . . . . . . . . . . 18
(h) Actual Knowledge as to Conditions . . . . . . . . . . . . . . . 18
(i) Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
(j) Fees. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
ARTICLE IV
Covenants
4.1 Acquisition Proposals. . . . . . . . . . . . . . . . . . . . . . . . . 19
4.2 Employee Benefits. . . . . . . . . . . . . . . . . . . . . . . . . . . 19
4.3 Access and Information . . . . . . . . . . . . . . . . . . . . . . . . 20
4.4 Certain Filings, Consents and Arrangements . . . . . . . . . . . . . . 21
4.5 Additional Agreements. . . . . . . . . . . . . . . . . . . . . . . . . 21
4.6 Publicity. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
4.7 Notification of Certain Adverse Matters. . . . . . . . . . . . . . . . 22
4.8 Director Resignations. . . . . . . . . . . . . . . . . . . . . . . . . 22
4.9 Human Resources Issues . . . . . . . . . . . . . . . . . . . . . . . . 22
4.10 Assistance with Third-Party Agreements . . . . . . . . . . . . . . . . 22
4.11 Notices and Communications . . . . . . . . . . . . . . . . . . . . . . 23
4.12 Insurance Policies Assignment. . . . . . . . . . . . . . . . . . . . . 23
4.13 Designated Sales . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
4.14 FHLBSF . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
4.15 Name Change. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
4.16 Tax Matters. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
(a) Seller's Responsibilities . . . . . . . . . . . . . . . . . . . 24
(b) FACO's Responsibilities . . . . . . . . . . . . . . . . . . . . 26
(c) Taxes for Short Taxable Year. . . . . . . . . . . . . . . . . . 26
(d) Review of Tax Returns and Other Filings . . . . . . . . . . . . 26
(e) Contest Provisions. . . . . . . . . . . . . . . . . . . . . . . 26
(f) Termination of Tax Allocation Agreements. . . . . . . . . . . . 27
(g) Section 338(h)(10). . . . . . . . . . . . . . . . . . . . . . . 27
(h) Efforts to Obtain Certain Documents . . . . . . . . . . . . . . 28
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(i) Cooperation after Closing . . . . . . . . . . . . . . . . . . . 28
(j) Transfer Taxes. . . . . . . . . . . . . . . . . . . . . . . . . 29
(k) Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . . . 29
4.17 Assistance Agreement . . . . . . . . . . . . . . . . . . . . . . . . . 29
4.18 Capital of Savings . . . . . . . . . . . . . . . . . . . . . . . . . . 29
ARTICLE V
Conditions to Consummation
5.1 Conditions to Each Party's Obligations . . . . . . . . . . . . . . . . 30
5.2 Conditions to Obligations of FACO. . . . . . . . . . . . . . . . . . . 30
5.3 Conditions to Obligations of Seller. . . . . . . . . . . . . . . . . . 31
ARTICLE VI Termination
6.1 Termination. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
6.2 Effect of Termination. . . . . . . . . . . . . . . . . . . . . . . . . 32
ARTICLE VII
Other Matters
7.1 Certain Definitions; Interpretations . . . . . . . . . . . . . . . . . 33
7.2 Survival of Representations, Warranties and Covenants. . . . . . . . . 34
7.3 Indemnification. . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
(a) Seller's Indemnification. . . . . . . . . . . . . . . . . . . . 34
(b) FACO's Indemnification. . . . . . . . . . . . . . . . . . . . . 35
(c) Indemnification Procedures. . . . . . . . . . . . . . . . . . . 36
(d) Adjustment to Purchase Price. . . . . . . . . . . . . . . . . . 39
(e) Exclusive Remedy. . . . . . . . . . . . . . . . . . . . . . . . 39
7.4 Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
7.5 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
7.6 Governing Law; Venue . . . . . . . . . . . . . . . . . . . . . . . . . 39
7.7 Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
7.8 Notices. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
7.9 Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
7.10 Binding Effect; Assignment . . . . . . . . . . . . . . . . . . . . . . 41
7.11 Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
7.12 No Third Party Beneficiaries . . . . . . . . . . . . . . . . . . . . . 41
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STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT, dated as of the 20th day of June, 1997
(the "Agreement"), by and between First Alliance Corporation, a Delaware
corporation ("FACO"), and Standard Pacific Corp., a Delaware corporation
("Seller"), is entered into with reference to the following:
A. Standard Pacific Savings, F.A. ("Savings"), is a federally
chartered savings and loan association and subject to regulation and supervision
by the Office of Thrift Supervision ("OTS") and the Federal Deposit Insurance
Corporation ("FDIC"). The customer deposit accounts of Savings are insured by
the Savings Association Insurance Fund (the "SAIF") of the FDIC. All of the
issued and outstanding stock of Savings is owned by Seller.
B. FACO desires to acquire Savings through the purchase of all of the
issued and outstanding stock of Savings on the terms and subject to the
conditions set forth in this Agreement, and Seller desires that such stock be
sold on such terms and subject to such conditions.
C. Subject to any specific provisions of this Agreement, it is the
intent of the parties that FACO, by reason of this Agreement, shall not (until
consummation of the transaction contemplated hereby) control or be deemed to
control Savings, directly or indirectly, and shall not exercise or be deemed to
exercise, directly or indirectly, a controlling influence over the management or
policies of Savings.
D. The board of directors of FACO has approved the acquisition of the
stock of Savings (the "Acquisition") and the transactions contemplated by this
Agreement, and has authorized the execution and delivery of this Agreement at a
board meeting, duly noticed and held on June 13, 1997. The board of directors of
Seller has authorized the execution and delivery of this Agreement by unanimous
written consent dated as of May 16, 1997.
Now, therefore, in consideration of the premises and the mutual
agreements contained herein, the parties hereto agree as follows:
ARTICLE I
PURCHASE AND SALE
1.1 AGREEMENT OF PURCHASE AND SALE.
(a) On the terms and subject to the conditions set forth in this Agreement,
FACO agrees to purchase, and Seller agrees to sell to FACO (or to a subsidiary
or
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affiliate of FACO so designated), all of the shares of Savings Common Stock (as
defined in Section 3.1(b)) held by Seller (the "Shares"), which Shares shall
constitute all of the issued and outstanding shares of Savings Common Stock. The
purchase price for the Shares (the "Purchase Price") shall be the sum of (i)
$725,000 and (ii) the adjusted stockholder's equity of Savings as of the Closing
(as defined in Section 1.2). Adjusted stockholder's equity shall equal
stockholders' equity determined in accordance with generally accepted accounting
principles, consistently applied ("GAAP") less $150,000, representing the
present value (using a discount rate of 8.0%) of the difference between (x) the
remaining estimated lease costs, including estimated building operating
expenses, as of the Closing Date (as defined in Section 1.2) of Savings'
Leasehold Interest (as defined in Section 4.10(b)) and (y) current market rates
for similar premises (agreed to equal $1.74 per square foot), less the tax
benefit (assuming a combined federal and state income tax rate of 42%)
attributable to such difference.
(b) No later than five business days before the Closing Date, Seller shall
provide to FACO a written estimate of the Purchase Price based upon the best
available information at that time and which, absent manifest error, shall be
payable by FACO by wire transfer in immediately available funds at the Closing
against delivery of the stock certificates representing the Shares, duly
endorsed for transfer to FACO (or its designee) or accompanied by stock powers
separate from the certificates that are appropriate for such purpose. Seller
shall instruct FACO concerning the account to which the estimated Purchase Price
shall be paid and shall provide appropriate wire instructions therefor at least
two business days prior to the Closing.
(c) No later than 20 days following the Closing Date, Seller shall provide
to FACO the unaudited balance sheet (the "Closing Balance Sheet") of Savings,
prepared in accordance with GAAP, and the written calculation of the Purchase
Price ("Purchase Price Reconciliation"), each as of the Closing Date. Within 20
days thereafter, FACO shall indicate to Seller in writing whether it agrees or
disagrees with the Closing Balance Sheet or the Purchase Price Reconciliation,
or any portion thereof. If FACO indicates its disagreement during such period,
FACO and Seller shall have until 60 days following the Closing Date to resolve
such disagreement. On the 61" day following the Closing Date, the parties shall
either (i) have agreed upon the adjustments, if any, to the Closing Balance
Sheet and the Purchase Price Reconciliation and shall, on a mutually agreeable
date no later than five days thereafter, cause the appropriate party to promptly
pay the other party the amount necessary to result in full payment of the actual
Purchase Price, as so calculated, or (ii) submit all remaining items of
disagreement to binding arbitration in
accordance with Section 1.1(d) hereof.
(d) (i) In the event the parties hereto are unable to reach agreement with
respect to the Closing Balance Sheet or the Purchase Price Reconciliation, then
Ernst & Young LLP shall be retained no later than 65 days following the Closing
Date to review the matter under dispute and to determine the Purchase Price
Reconciliation. If Ernst &
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Young LLP shall be unable or unwilling to accept such retention, and the parties
hereto are unable to agree on another nationally recognized independent
accounting firm to make such determination, FACO and Seller shall each nominate
a nationally recognized independent accounting firm that does not regularly work
for such party and is willing to accept such retention, and one of such two
nominated accounting firms shall be selected by a flip of a coin with the flip
being made by a lawyer for FACO in the presence of a lawyer for Seller, with
Seller's lawyer designating prior to the flip which firm will be chosen if
"heads" results or "tails" results. Ernst & Young LLP or such other independent
accounting firm shall be selected no later than 70 days following the Closing
Date and shall be referred to herein as the "Arbitrator."
(ii) With respect to a dispute as to the Closing Balance Sheet and/or
the Purchase Price Reconciliation contemplated by subsection 1.1(c), FACO and
Seller shall each present the Arbitrator, no later than three (3) days after the
Arbitrator has accepted its appointment, with its proposed Closing Balance Sheet
and Purchase Price Reconciliation in writing, and the Arbitrator shall select
one of the two proposals to be the Closing Balance Sheet and Purchase Price
Reconciliation to which the parties will be bound. The Arbitrator shall not have
the discretion to change either proposal or otherwise compromise between the two
proposals.
(iii) FACO and Seller shall be afforded the opportunity to present to
the Arbitrator any material or information relating to the matters in dispute.
The Arbitrator shall render its decision as soon as possible, but not later than
30 days after the Arbitrator is appointed. The Arbitrator's decision shall be in
writing and counterpart copies thereof shall be delivered to each of the
disputing parties. FACO and Seller shall each bear and pay one-half of the fees
and disbursements of the Arbitrator in connection with its analysis. The
determination by the Arbitrator shall be final and binding on the parties
hereto. FACO and Seller shall make such adjustments to the Purchase Price, as
determined by the Arbitrator, no later than three (3) days following
notification of the Arbitrator's decision.
(e) The payment required to adjust the estimated Purchase Price paid at the
Closing Date to the final Purchase Price payable hereunder shall include
interest, at the Federal Funds Rate, on the amount of such additional payment
from and including the Closing Date to, but not including, the date of such
additional payment. "Federal Funds Rate" shall mean, for any day, the weighted
average of the rates on overnight Federal funds transactions with members of the
Federal Reserve System arranged by Federal funds brokers, as published on the
next succeeding business day by the Federal Reserve Bank of New York. The
Federal Funds Rate for Saturdays, Sundays and any other day on which the Federal
Reserve Bank of New York is closed shall be the Federal Funds Rate as in effect
for the next preceding day for which the Federal Funds Rate shall have been
determined.
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1.2 CLOSING. The respective deliveries of consideration, stock
certificates and other documents, and the taking of all other remaining actions
necessary to complete the purchase and sale transaction provided for in this
Agreement (the "Closing"), shall take place on the month end following the
receipt of any required regulatory approvals and the expiration of any
applicable waiting periods (provided there are five (5) business days' notice of
such approval or five (5) business days following the expiration of any such
waiting period, as the case may be) (the "Closing Date") or on such other date
as FACO and Seller may agree; PROVIDED, that in the absence of an agreement by
FACO and Seller to the contrary, the Closing Date shall be September 30, 1997.
The Closing shall be held at the headquarters of FACO or at such other place as
the parties hereto shall agree. All deliveries of documents, payment of
consideration and other actions necessary in connection with or to complete the
Closing shall be deemed to be taken and effected simultaneously as part of one
single transaction, and none of the foregoing shall be deemed completed unless
and until all are completed.
ARTICLE II
CONDUCT PENDING THE ACQUISITION
2.1 CONDUCT OF SAVINGS' BUSINESS PRIOR TO THE CLOSING DATE. Except as
expressly provided in this Agreement, during the period from the date of this
Agreement to the Closing Date, Seller shall cause Savings to (a) conduct its
business in the usual, regular and ordinary course, consistent with past
practices and consistent with prudent banking practices, except that Seller may
permit Savings to engage in those actions contemplated herein; (b) use its best
efforts to maintain and preserve intact its business organization, employees and
advantageous customer relationships, to continue to develop such customer
relationships and to retain the services of its officers and key employees; (c)
maintain and keep its properties in as good repair and condition as at present
except for obsolete properties and for deterioration due to ordinary wear and
tear or damage due to casualty; (d) maintain in full force and effect insurance
comparable in amount and scope of coverage to that now maintained by it; (e)
perform in all material respects all of its obligations under its contracts,
leases and documents relating to and affecting its assets, properties and
business, except such obligations as it may in good faith reasonably dispute;
(f) comply with and perform all its obligations and duties imposed upon it by
all Federal and state laws, and applicable rules, regulations and orders imposed
by Federal, state and local governmental authorities; and (g) take no action
which would adversely affect or delay the ability of FACO to obtain any
necessary approvals, consents or waivers of any governmental authority required
for the transactions contemplated hereby or to perform its covenants or
agreements on a timely basis under this Agreement.
2.2 FORBEARANCE BY SELLER AND SAVINGS. During the period from the date of
this Agreement to the Closing, except as set forth on a disclosure schedule
delivered concurrently with this Agreement (the "Disclosure Schedule") or as
otherwise contemplated by this
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Agreement, Seller shall not permit Savings, without the prior written consent of
FACO, which consent shall not be unreasonably withheld, to:
(a) adjust, split, combine or reclassify any capital stock; make,
declare or pay any dividend or make any other distribution on any capital
stock or, directly or indirectly, redeem, purchase or otherwise acquire any
shares of its capital stock or any securities or obligations convertible
into or exchangeable for any shares of its capital stock, or grant any
stock appreciation rights or grant any individual, corporation or other
entity any right to acquire any shares of its capital stock; or issue any
additional shares of capital stock;
(b) except for purchases of securities in the ordinary course of
business consistent with past practice, make any material investment either
by purchase of stock, contributions to capital, property transfers, or
purchase of any properties or assets of any other individual, corporation
or other entity;
(c) enter into, renew or terminate any material contract or agreement,
or make any material change in any of its material leases or contracts,
other than (i) deposit agreements or (ii) in the ordinary course of
business consistent with past practice with respect to contracts,
agreements or leases terminable on not more than 90 days notice or
involving payment or payments of not more than $10,000 per annum in the
aggregate;
(d) increase in any manner the compensation (including, without
limitation, bonuses) or fringe benefits of any of its employees, former
employees or retirees or pay any pension or retirement allowance not
required by any existing plan or agreement to any such employees, former
employees or retirees, or become a party to, amend or commit to any
pension, retirement, retention, severance, deferred compensation, profit
sharing or welfare benefit plan or agreement or employment agreement with
or for the benefit of any employee, former employee or retiree, or
voluntarily accelerate the vesting of any employee benefits;
(e) hire additional officers or employees (except that Seller may
permit Savings to hire non-officer employees to fill vacancies in existing
positions at Compensation levels and with benefits consistent with past
practices);
(f) amend its Federal Stock Charter or Bylaws, or change in any
material way its material policies and procedures (except as required by
changes in applicable law) or make any material changes to its tax or
financial accounting policies (except changes to its tax or financial
accounting policies as may be required by GAAP or regulatory accounting
practices);
(g) introduce any new services or products (other than products or
services relating to the Community Reinvestment Act (or other similar law
or regulation)), institute any new advertising campaign, open or apply to
open any new branch or facility,
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or, in general, change in any material respects its products and services
from those in effect at the date of this Agreement;
(h) take any action that would result in a violation of any of the
covenants made herein by Seller or would result in any representations or
warranties of Seller becoming untrue;
(i) agree to, or make any commitment to, take any of the actions
prohibited by this Section 2.2;
PROVIDED, HOWEVER, that notwithstanding anything else in this Agreement to the
contrary, prior to the Closing Seller shall be permitted to, or shall be
permitted to cause Savings to, as applicable, form an interim holding company to
acquire all the outstanding shares of common stock of Savings from Seller or
form a subsidiary of Savings and distribute the capital stock of such subsidiary
to Savings for the purpose of consummating the transactions contemplated in
Sections 4.13 and 4.18 hereof.
2.3 TIMELINESS OF FACO'S CONSENT. For purposes of Section 2.2, any consent
required from FACO, unless earlier given or denied, shall be deemed to have been
given five (5) business days after the date on which FACO receives a written
request for such consent, unless during such five-day period FACO requests
further information in writing reasonably necessary to allow the decision to be
made, in which case, such consent, unless earlier given or denied, shall be
deemed to have been given five (5) business days after the date on which the
requested information is furnished,
2.4 CONDUCT BY FACO PRIOR TO THE CLOSING DATE. During the period from the
date of this Agreement to the Closing Date, FACO shall take no action which
would materially adversely affect or delay the ability of FACO to obtain any
necessary approvals, consents or waivers of any governmental authority required
for the transactions contemplated hereby or to perform its covenants or
agreements on a timely basis under this Agreement.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
3.1 REPRESENTATIONS AND WARRANTIES OF SELLER. Seller represents and
warrants to FACO that, except as set forth in the Disclosure Schedule:
(a) Recitals True. The information set forth in the recitals of this
Agreement with respect to Seller and Savings is true and correct.
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b) CAPITAL STOCK. Savings is authorized to issue 100,000 shares of
common stock, $20.00 par value ("Savings Common Stock"), and is not
authorized to issue any other class or series of capital stock, or any
other securities giving the holder thereof the right to vote on any matters
on which stockholders of Savings can vote. As of the date hereof, 100,000
shares of Savings Common Stock are issued and outstanding, all of which are
owned by Seller free and clear of any liens or encumbrances. All
outstanding shares of capital stock of Savings are duly authorized, validly
issued and outstanding, fully paid and nonassessable, and are subject to no
preemptive rights.
(c) AUTHORITY. Savings has the power and authority, and is duly
qualified in all jurisdictions where such qualification is required (except
for such qualifications the absence of which, individually or in the
aggregate, would not have a Material Adverse Effect on Savings), to carry
on its business as it is now being conducted and to own all of its material
properties and assets. Savings has all Federal, state and local
governmental authorizations necessary for it to own or lease its properties
and assets and to carry on its business as it is now being conducted,
except for such powers and authorizations the absence of which, either
individually or in the aggregate, would not have a Material Adverse Effect
on Savings.
(d) SUBSIDIARIES. Savings has no subsidiaries, other than SPS
Affiliates, Inc., a wholly-owned subsidiary of Savings that will be
distributed to Seller prior to the Closing. Except as set forth in the
preceding sentence and for the stock it is required to hold in the Federal
Home Loan Bank of San Francisco (the "FHLBSF"), Savings does not own,
directly or indirectly, any equity position or voting interest in any
corporation, partnership or other entity.
(e) APPROVALS. The execution by Seller of this Agreement has been
authorized by all necessary corporate action, including, but not limited
to, a vote by unanimous written consent of its board of directors. This
Agreement is a valid and binding agreement of Seller, enforceable against
Seller in accordance with its terms, subject to bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium and similar laws of general
applicability relating to or affecting creditors' rights and to general
equitable principles.
(f) NO VIOLATIONS. The execution, delivery and performance of this
Agreement by Seller does not, and the consummation of the transactions
contemplated hereby will not, constitute (i) a breach or violation of, or a
default under any applicable law, rule or regulation or any material
judgment, decree, order, governmental permit or license, or material
indenture, agreement or instrument of Seller or Savings, or to which any of
them (or any of their respective properties) is subject, which breach.
violation or default would have a Material Adverse Effect on Savings or
would materially hinder or delay the transactions contemplated hereby, or
(ii) a breach or violation of, or a default under. the charter documents or
Bylaws of either of them; and the consummation of the
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transactions contemplated hereby will not require any approval, consent or
waiver under any such law, any rule, regulation, judgment, decree, order,
governmental permit or license or the approval, consent or waiver of any
other party to any such agreement, indenture or instrument, other than (1)
the required approvals, consents and waivers of governmental authorities
referred to in Section 4.4 and (2) any other approvals, consents or waivers
the absence of which, individually or in the aggregate, would neither
result in a Material Adverse Effect on Savings nor materially hinder or
delay the transactions contemplated hereby.
(g) FINANCIAL STATEMENTS.
(i) Savings' audited financial statements as of December 31, 1996 and
for the fiscal year then ended (the "Audited Financials"), accompanied by
the audit report of Xxxxxx Xxxxxxxx LLP, Savings' independent certified
public accountants, and Savings' unaudited balance sheet as of March 31,
1997 and the related statement of operations for the three-month period
then ended (the "March 31 Financials") have been provided to FACO. The
Audited Financials and the March 31 Financials (including any related notes
and schedules) fairly present the financial position, the results of
operations, retained earnings and cash flows, as the case may be, of
Savings as of the date thereof or for the periods set forth therein, in
each case in accordance with GAAP applicable to savings and loan
associations during the periods involved, except as permitted in the case
of unaudited statements (which may not include cash flow statements or
notes), and subject, in the case of the unaudited statements, to recurring
audit adjustments normal in nature and amount. The books and records of
Savings are accurate in all material respects.
(ii) Seller's audited consolidated financial statements as of December
31, 1996 and for the fiscal year then ended, accompanied by the audit
report of Xxxxxx Xxxxxxxx LLP, Seller's independent certified public
accountants, and Seller's unaudited consolidated balance sheet as of March
31, 1997 and the related statement of operations for the three-month period
then ended have been provided to FACO. Such audited financials and
unaudited financials (including any related notes and schedules) fairly
present the financial position, the results of operations. retained
earnings and cash flows, as the case may be, of Seller as of the date
thereof or for the periods set forth therein, in each case in accordance
with GAAP during the periods involved, except as permitted in the case of
unaudited statements (which may not include cash flow statements or notes),
and subject, in the case of the unaudited statements, to recurring audit
adjustments normal in nature and amount.
(h) Absence of Certain Changes or Events. Except as set forth in the
March 31 Financials, since December 31, 1996, there have not been (i) any
changes in the
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business, assets, financial condition or results of operations of Savings
that, individually or in the aggregate, have had a Material Adverse Effect
on Savings, except for any such changes that are expressly contemplated by
this Agreement; (ii) any amendment to the Federal Stock Charter or Bylaws
of Savings; (iii) any declaration, setting aside or payment of any dividend
or any other distribution (other than the distribution of SPS Affiliates
and reduction of capital contemplated by Section 4.18 hereof) in respect of
the capital stock of Savings; or (iv) any change by Savings in accounting
principles or methods or tax methods, except as required by GAAP or by any
governmental entities having jurisdiction over Savings with respect to
financial statements or tax returns filed by it. Except as set forth in
Seller's March 31, 1997 financial statements, since December 31, 1996,
there have not been any changes in the business, assets, financial
condition or results of operations of Seller that, individually or in the
aggregate, would materially affect the ability of Seller to perform its
obligations under this Agreement.
(i) TAXES. (A) Except as set forth in the Disclosure Schedule, (i)
all Tax Returns that are required to be filed by or with respect to
Seller's Group, including Savings, have been and, with respect to the Tax
Returns for 1996 and 1997 that are required to be filed by Seller pursuant
to Section 4.16 of the Agreement, will be duly filed, and were or, with
respect to such Tax Returns for 1996 and 1997, will be, correct and
complete in all respects; (ii) Seller and Savings have delivered or made
available to FACO true and complete copies of all such Tax Returns for 1994
and 1995 and, when available, will deliver to FACO true and complete copies
of such Tax Returns for 1996 and 1997; (iii) all Taxes owed or required to
be withheld and paid over by Seller's Group, including Savings, have been
paid in full; (iv) the Tax Returns referred to in clause (i) have been
examined by the Internal Revenue Service or the appropriate state, local or
foreign taxing authority or the period for assessment of the Taxes in
respect of which such Tax Returns were required to be filed has expired;
(v) all deficiencies asserted or assessments made as a result of such
examinations have been paid in full; (vi) no issues that have been raised
by the relevant taxing authority in connection with the examination of any
of the Tax Returns referred to in clause (i) are currently pending; (vii)
there is no dispute or claim concerning any liability for Taxes against
Savings or Seller's Group either claimed or raised by any authority in
writing or as to which any director or officer or employee responsible for
Tax matters of Seller's Group has personal knowledge based upon personal
contact with any agent of such authority; and (viii) no waivers of statutes
of limitation have been given by or requested with respect to any Taxes of
Seller's Group.
(B) No tax is required to be withheld pursuant to Section 1445 of
the Code as a result of the transfer contemplated by this Agreement.
(C) Savings has no liability for Taxes of any person (other than
Savings) under Treasury Regulation Section 1.1502-6, as a transferee or
successor, or otherwise.
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(D) As a result of FACO's purchase of the Shares, neither Savings
nor FACO will be obligated to make a payment to an individual arising from
employment or an independent contractor relationship with Savings that
would be a "parachute payment" to a "disqualified individual" as those
terms are defined in Section 280G of the Code without regard to whether
such payment is reasonable compensation for personal services performed or
to be performed in the future.
(E) Savings does not maintain a reserve for bad debts for tax
purposes, and is not and will not be required to recapture any reserve
pursuant to Sections 593(e) and (g) of the Code.
(j) ABSENCE OF CLAIMS: LITIGATION. No litigation, proceeding or
controversy before any court or governmental agency is pending against
Savings which is reasonably likely, individually or in the aggregate, to
have a Material Adverse Effect on Savings or to materially hinder or delay
consummation of the transactions contemplated hereby, and, to its actual
knowledge, no such litigation, proceeding, controversy, claim or action has
been threatened. Savings is not in default with respect to any material
judgment, order, writ, injunction, decree, or award of any court,
arbitrator or governmental agency or instrumentality. The Disclosure
Schedule contains a complete listing of litigation pending or, to the
actual knowledge of Seller or Savings, threatened, against Savings, to
which Savings is a party and which names Savings as a defendant or
cross-defendant and the amount reserved for litigation matters in the
aggregate. The litigation reserves as reflected in the March 31 Financials
are adequate in accordance with GAAP.
(k) REGULATORY ACTIONS. Savings is not a party to any cease and desist
order, written agreement, memorandum of understanding or any similar
regulatory action or order with any Federal or state governmental
authorities, nor within the past three years has Savings been a party to
any written agreement with or commitment letter or similar undertaking to,
nor has Savings been subject to any order or directive by, any Federal or
state governmental authorities, nor has it adopted any board resolution at
the request of any of its regulators. Savings has not been advised that any
such issuance or request is contemplated. As of the date hereof, to the
actual knowledge of Savings and Seller, Savings is not the subject of a
referral to either the United States Department of Justice or the
Department of Housing and Urban Development for alleged violations of the
Equal Credit Act (15 U.S.C. $1691, et seq.), the Fair Housing Act (420
U.S.C. Section 3601, et seq.), the Bank Secrecy Act (31 U.S.C. Section
5322, et seq.), the Home Mortgage Disclosure Act (12 U.S.C. 2801, et seq.)
and the Community Reinvestment Act (12 U.S.C. Section 2901, et seq.) To the
actual knowledge of Seller and Savings, each material violation, criticism.
or exception by any governmental authority with respect to any examinations
of Savings has been resolved to the satisfaction of the applicable
regulatory authority.
(l) CERTAIN AGREEMENTS. Savings is not a party to any oral or written
(i) consultant agreement, not terminable on 90 days' or less notice and
involving the
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payment of more than $10,000 per annum, (ii) agreement with or with respect
to any executive officer of Savings providing any term of employment or
compensation guarantee, or (iii) agreement or plan, any of the benefits of
which will be increased, or the vesting of the benefits of which will be
accelerated, by the occurrence of any of the transactions contemplated by
this Agreement or the value of any of the benefits of which will be
calculated on the basis of any of the transactions contemplated by this
Agreement. FACO has been provided with a complete and accurate listing of
the names and current annual salary rates of all persons employed by
Savings, showing for each such person the amounts paid or payable as
salary, bonus payments and any indirect compensation for the year ended
December 31, 1996, the names of all of Savings' directors and officers and
the names of all persons, if any, holding tax or other powers of attorney
for Savings.
(m) LABOR MATTERS. Savings is not a party to nor is it bound by any
collective bargaining agreement, contract, or other agreement or
understanding with a labor organization, nor is Savings the subject of any
proceeding asserting Savings has committed an unfair labor practice or
seeking to compel Savings to bargain with any labor organization as to
wages and conditions of employment, nor is there any strike or labor
dispute involving Savings pending or threatened. Savings considers its
employee relations to be satisfactory.
(n) EMPLOYEE BENEFIT PLANS. A list of all Employee Plans (as
hereinafter defined) is set forth in the Disclosure Schedule. Savings has
delivered or made available to FACO true and complete copies of the
following documents, as they may have been amended to the date hereof,
embodying or relating to Employee Plans: Each of the Employee Plans,
including all amendments thereto, any related trust agreements, insurance
policies or any funding agreements; the most recent determination letter
from the Internal Revenue Service ("IRS") with respect to each of the
Employee Plans; the actuarial evaluation, if any, for the most recent plan
year prepared for each of the Employee Plans; the current summary plan
description of each of the Employee Plans; and the most recent annual
return/report on IRS Forms 5500, 5500-C or 5500-R for each of the Employee
Plans for which such report was prepared.
Except as set forth in the Disclosure Schedule:
(i) the written terms of each of the Employee Plans and, if
controlled by Savings or Seller, any related trust agreement, group
annuity contract, insurance policy or other agreement, have been
administered in substantial compliance with the applicable
requirements of the Employee Retirement Income Security Act of 1974,
as amended ("ERISA") and the Code;
(ii) each of the Employee Plans for which Savings has claimed a
deduction under Code Section 404, as if such Employee Plan were
qualified under Code Section 401(a), has received a favorable
determination letter from the IRS as
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to the tax qualification of such Employee Plan, and to the actual
knowledge of Savings such favorable determination has not been
modified, revoked or limited by failure to satisfy any condition
thereof or by a subsequent amendment to, or failure to amend, such
Employee Plan;
(iii) to the actual knowledge of Savings, neither it nor any
other "disqualified person" or "party in interest" (as defined in Code
Section 4975 and Section 3(14) of ERISA, respectively) with respect to
an Employee Plan has engaged in any "prohibited transaction" (as
defined in Code Section 4975 or Section 406 or 407 of ERISA) that
could reasonably be expected to subject Savings to any material tax,
penalty or liability under Code Section 4975 or Title I of ERISA;
(iv) no Employee Plan is a Multiple Employer Plan within the
meaning of Code Section 413 or a Multiemployer Plan within the meaning
of Section 3(37) of ERISA;
(v) Savings has not incurred and does not have actual knowledge
of any pending material tax, penalty or liability under Code Section
4972 with respect to any Employee Plan;
(vi) continuation health care coverage requirements and notice
requirements under Code Section 4980B and Sections 601 through 608 of
ERISA have been satisfied in all material respects with respect to all
current or prior employees of Savings and any "qualified beneficiary"
of any such employees (within the meaning of Code Section 4980B(g));
(vii) no "reportable event" within the meaning of Code Section
4043(c) has occurred, or is reasonably likely to occur with respect to
any Employee Plan; and
(viii) no Employee Plan provides for retiree medical benefits.
For purposes hereof, the term "Employee Plan" means any "employee
benefit plan" (as defined in Section 3(3) of ERISA) as well as any other
material written or formal plan or contract involving direct or indirect
compensation under which Savings has any present or future obligations or
liability on behalf of its employees or former employees or their
dependents or beneficiaries, including, but not limited to, each
retirement. employee stock ownership, cash or deferred, each other deferred
or incentive compensation, bonus, stock option, employee stock purchase,
"phantom" stock or stock appreciation right plan. each other program
providing payment or reimbursement for or of medical, dental or visual
care, counseling, or vacation, sick, disability or severance pay and each
other "fringe benefit" plan or arrangement.
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(o) INSIDER LOANS: OTHER TRANSACTIONS. Savings has previously provided
FACO with a listing, current as of March 31, 1997, of all extensions of
credit made to Seller's or Savings' executive officers and directors and
their related interests (all as defined under Federal Reserve Board
Regulation "0"), all of which have been made in compliance with Regulation
0, which listing is true, correct and complete in all material respects.
Except as set forth in the Disclosure Schedule, Savings does not owe any
amount to, or have any contract or lease with or commitment to, any of the
present executive officers or directors of Seller or Savings (other than
for compensation (including accrued vacation and severance obligations) for
current services not yet due and payable, and reimbursement of expenses
arising in the ordinary course of business).
(p) TITLE TO ASSETS. Savings has good and marketable title to all of
its material properties and assets (other than property as to which it is
lessee), including, without limitation, all personal and tangible
properties reflected in the Audited Financials or the March 31 Financials,
or acquired subsequently thereto, subject to no liens, mortgages, security
interests, encumbrances or charges of any kind except (1) as noted in the
Audited Financials or the March 31 Financials or as set forth in the
Disclosure Schedule, (2) statutory liens not yet delinquent which are being
contested in good faith by appropriate proceedings, and liens for Taxes not
yet due, (3) defects and irregularities in title and encumbrances which do
not materially impair the use thereof for the purpose for which they are
intended, (4) pledges of assets in the ordinary course of business to
secure public deposits, (5) for those assets and properties disposed of for
fair value in the ordinary course of business since the date of the Audited
Financials or the March 31 Financials, and (6) any other liens, mortgages,
security interests, encumbrances or charges of any kind, which in the
aggregate do not exceed $10,000 in amount. Without limiting the above,
Savings owns or possesses valid and binding licenses and other rights to
itself use without payment all material patents, copyrights, trade secrets,
trade names, service marks, logos and trademarks used in its business, and
Savings has not received any notice of conflicts with respect thereto that
asserts the rights of others.
(q) ACTUAL KNOWLEDGE AS TO CONDITIONS. As of the date hereof, neither
Seller nor Savings knows of any reason why the approvals, consents and
waivers of governmental authorities referred to in Section 5.1(b) should
not be obtained without the imposition of any condition of the type
referred to in the provisos thereto.
(r) COMPLIANCE WITH LAWS. Savings is not in violation in respect of
any applicable Federal, state or local laws, rules, regulations or orders
applicable to it or by which its properties may be bound, except for
violations which individually or in the aggregate could not reasonably be
expected to have a Material Adverse Effect on Savings.
(s) FEES. Other than financial advisory services performed for Seller
by Friedman, Billings, Xxxxxx & Co., Inc. ("FBR"), neither Seller nor
Savings, nor any of
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their respective officers, directors, employees or agents, has employed any
broker or finder or incurred any liability for any financial advisory fees,
brokerage fees, commissions or finder's fees in connection with this
Agreement or the transactions contemplated hereby. The fees of FBR referred
to in the preceding sentence shall be paid by Seller.
(t) ENVIRONMENTAL.
(i) All of the properties and operations of Savings are in
compliance in all material respects with all material Environmental
Laws (as defined below) applicable to such properties and operations.
Savings' environmental practices with respect to real estate secured
loans have been substantially in compliance with industry standards
since July 1994.
(ii) Savings has obtained all material permits, licenses, and
authorizations which are required for Savings' operations under
Environmental Laws.
(iii) No Hazardous Substances (as defined below) exist on, about,
or within or have been used, generated, stored, transported, disposed
of on, or released from, any of Savings' properties except in
accordance in all material respects with Environmental Laws. Neither
Seller nor Savings has any actual knowledge as of the date of this
Agreement that any prior owners, occupants or operators of any such
property or any other property in which Savings has a security
interest, ever deposited, disposed of, or allowed to be deposited or
disposed of, in, on, or under or handled or processed on, or released,
emitted or discharged from, such properties any Hazardous Materials
except in accordance in all material respects with Environmental Laws,
or that any prior or present owners, occupants or operators of any
properties in which Savings holds a security interest, mortgage or
other lien or interest, deposited or disposed of, in, on or under or
handled and/or processed on, or released, emitted or discharged from,
such properties any Hazardous Material except in accordance in all
material respects with Environmental Laws. The use which Savings has
made, makes and intends to make of its properties will not result in
the use, generation, storage, transportation, accumulation, disposal
or release of any Hazardous Substance on, in, or from any of such
properties except in accordance in all material respects with
applicable Environmental Laws.
(iv) There is no action, suit, proceeding, investigation, or
inquiry before any court, administrative agency or other governmental
authority pending, or, to the actual knowledge of Seller and Savings,
threatened against Savings relating in any way to any material
violation of any Environmental Law. To the actual knowledge of Seller
and Savings, Savings has no material liability for remedial
-14-
action with respect to a violation of an Environmental Law. Seller and
Savings have not received any written requests for information
relating to any material violations of any Environmental Law from any
governmental authority with respect to the condition, use, or
operation of any of Savings' properties nor has any of them received
any notice from any governmental authority or any written notice from
any other person with respect to any material violation of or material
liability for any remedial action under any Environmental Law.
(v) As used in this Section, the term "Environmental Law" means
any and all Federal, state and local laws, regulations, and
requirements pertaining to health, safety and the environment,
including, without limitation, the Comprehensive Environmental
Response Compensation and Liability Act of 1980, 42 U.S.C. Section
9601, et seq. ("CERCLA"), the Resource Conservation and Recovery Act
of 1975, 42 U.S.C. Section 6901, et seq. ("RCRA"), the Occupational
Safety and Health Act, 29 U.S.C. Section 651, et seq. (as it relates
to the use of, or exposure to, Hazardous Substances), the Clean Air
Act, 42 U.S.C. Section 7401, et seq., the Clean Water Act, 33 U.S.C.
Section 1251, et seq. the Toxic Substance Control Act, 15 U.S.C.
Section 2601, et seq., the Xxxxxxxxx-Xxxxxxx-Xxxxxx Hazardous
Substance Account Act, as amended, Chapter 6.8 of the California
Health and Safety Code, Section 25300, et seq., and the Hazardous
Waste Control Law, Chapter 6.5 of the California Health and Safety
Code, Section 25100, ET SEQ. (the latter two statutes being referred
to herein as the State Acts), and any and all regulations promulgated
thereunder, and all similar laws, regulations. and requirements of any
governmental authority, agency having jurisdiction over the
environmental activities of Savings or of its properties, as such
laws, regulations. And requirements may be in effect on the date
hereof.
(vi) As used in this section, the term "properties" shall
include: all real estate property owned or leased by Savings; and any
other property as to which Savings would reasonably be expected to be
deemed an "owner" or "operator" under any applicable Environmental
Law.
(vii) As used in this section, the term "Hazardous Substance"
shall mean any "hazardous waste" as defined by CERCLA and State Acts,
as such acts are in effect on the date hereof, and any and all
regulations promulgated thereunder; (1) any "hazardous substance' as
such term is defined by CERCLA; (2) any "regulated substance" as
defined by the State Acts; (3) asbestos requiring abatement, removal
or encapsulation pursuant to the requirements of governmental
authorities; (4) polychlorinated biphenyls, (5) petroleum products;
(6) "hazardous chemicals" or extremely hazardous substances" in
quantities sufficient to require reporting, registration. notification
and/or optional treatment or handling under the Emergency Planning and
Community Right to Know Act of 1986; (7) any "hazardous chemical" in
levels that would result in exposure greater
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than is allowed by permissible exposure limits established pursuant to
the Occupational Safety and Health Act of 1970; (8) any substance that
requires reporting, registration, notification, removal, abatement
and/or special treatment, storage, handling or disposal, under
Sections 6, 7 and 8 of the Toxic Substance Control Act (15 U.S.C.
Section 2601); (9) any toxic or hazardous chemical described in 29
C.F.R. 1910.100-1047 in levels that would result in exposure greater
than those allowed by the permissible exposure limits pursuant to such
regulations; and (10) any (A) "hazardous waste", (B) "solid waste"
capable of causing a "release or threatened release" that present an
"imminent and substantial endangerment" to the public health and
safety of the environment, (C) "solid waste" that is capable of
causing a "hazardous substance incident", (D) "solid waste" with
respect to which special requirements are imposed by applicable
governmental authorities upon the generation, transportation thereof
as such terms are defined and used within the meaning of the States
Acts or (E) any "pollutant" or "toxic pollutant" as such term is
defined in the Federal Clean Water Act, 33 U.S.C. (Section 1251-1376,
as amended, by Public Law 100-4, February 4, 1987, and the regulations
promulgated thereunder, including 40 C.F.R. Sections 122.1 and 122.26.
(u) PERFORMANCE OF OBLIGATIONS. Savings has performed in all material
respects all of the obligations required to be performed by it to date
under, and is not in default under or in breach of, any term or provision
of any material contract, lease, indenture or any other material agreement
to which Savings is a party, is subject or is otherwise bound and no event
has occurred that, with the giving of notice or the passage of time, or
both, would constitute such default or breach, in each case which would
have a Material Adverse Effect on Savings. The Disclosure Schedule contains
a list of all contracts to which Savings is a party, except for contracts
terminable without penalty on not more than 90 days' notice or involving
the payment of not more than $10,000 per annum, deposit agreements and loan
agreements.
(v) INSURANCE. Savings has in effect policies of insurance with
respect to its assets and business against such casualties and
contingencies and in such types and forms as in the judgment of Savings'
management are appropriate for its business, operations, properties and
assets. Other than policies of title insurance, Savings shall make
available to FACO, within ten (10) days of the date of this Agreement,
copies of all policies of insurance and bonds carried and owned by Savings
as of the date hereof, which copies are complete and accurate in all
material respects, and which are listed in the Disclosure Schedule. Savings
is not in default under any such policy of insurance or bond such that it
is reasonably likely to be canceled. No notice of cancellation or material
amendment has been received with respect to existing material policies, and
no coverage thereunder with respect to any material claims is being
disputed.
(w) DERIVATIVE TRANSACTIONS. Savings is not a party to a transaction
in or involving forwards, futures, options on futures, swaps or other
derivative instruments.
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(x) TRUST ADMINISTRATION. Other than for retirement accounts, Savings
does not presently exercise trust powers, including, but not limited to,
trust administration, and has not exercised such trust powers for a period
of at least five (5) years prior to the date hereof.
(y) QUALIFIED THRIFT LENDER. Savings is and will remain through the
Closing Date a "qualified thrift lender" within the meaning of Section
1467(a)(m) (1)(B) of the Home Owners' Loan Act and the related regulations
of the OTS.
3.2 REPRESENTATIONS AND WARRANTIES OF FACO. FACO represents and warrants to
Seller that:
(a) RECITALS TRUE. The information set forth in the recitals of this
Agreement with respect to FACO are true and correct.
(b) AUTHORITY. FACO has the power and authority, and is duly
qualified in all jurisdictions where such qualification is required (except
for such qualifications the absence of which, individually or in the
aggregate, would not have a Material Adverse Effect on FACO), to carry on
its business as it is now being conducted and to own all of its material
properties and assets. FACO has all Federal, state, local and foreign
governmental authorizations necessary for it to own or lease its properties
and assets and to carry on its business as it is now being conducted,
except for such powers and authorizations the absence of which, either
individually or in the aggregate, would not have a Material Adverse Effect
on FACO.
(c) APPROVALS. The execution by FACO of this Agreement has been
authorized by all necessary corporate actions of FACO, including, but not
limited to, a vote by its board of directors. No vote, consent or approval
of the shareholders of FACO is required to authorize this Agreement or the
consummation of the transactions contemplated hereby. This Agreement is a
valid and binding agreement of FACO enforceable against FACO in accordance
with its terms, subject to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws of general applicability
relating to or affecting creditor's rights and to general equity
principles.
(d) NO VIOLATIONS. The execution, delivery and performance of this
Agreement by FACO does not, and consummation of the transactions
contemplated hereby will not, constitute (i) a breach or violation of, or a
default under, any applicable law, rule or regulation or any material
judgment, decree, order, governmental permit or license, or material
indenture, agreement or instrument of FACO, or to which FACO (or its
property) is subject, which breach, violation or default would have a
Material Adverse Effect on FACO or would materially hinder or delay the
transactions contemplated hereby or (ii) a breach or violation of or a
default under, the Certificate of Incorporation or Bylaws of FACO; and the
consummation of the transactions contemplated hereby will not
-17-
require any approval, consent or waiver under any such law, rule,
regulation, judgment, decree, order, governmental permit or license or the
approval, consent or waiver of any other party to any such agreement,
indenture or instrument, other than (1) the required approvals, consents
and waivers of governmental authorities referred to in Section 4.4, and (2)
any other approvals, consents or waivers, the absence of which,
individually or in the aggregate, would not result in a Material Adverse
Effect on FACO or would not materially hinder or delay the transactions
contemplated hereby.
(e) FINANCIAL STATEMENTS. FACO's audited consolidated financial
statements as of December 31, 1996 and for the fiscal year then ended (the
"FACO Audited Financials"), accompanied by the audit report of Deloitte &
Touche, LLP, FACO's independent certified public accountants, and FACO's
unaudited consolidated balance sheet as of March 31, 1997 and the related
consolidated statement of income for the three-month period then ended (the
"FACO March 31 Financials") have been provided to Seller. The FACO Audited
Financials and the FACO March 31 Financials (including any related notes
and schedules) fairly present the financial position, the results of
operations, retained earnings and cash flows, as the case may be, of FACO
as of the date thereof or for the periods set forth therein, in each case
in accordance with GAAP during the periods involved, except as permitted in
the case of unaudited statements, and subject, in the case of the unaudited
statements, to recurring audit adjustments normal in nature and amount.
(f) ABSENCE OF CERTAIN CHANGES OR EVENTS. Except as set forth in the
FACO March 31 Financials, since December 31, 1996, there have not been any
changes in the business, assets, financial condition or results of
operations of FACO that, individually or in the aggregate, have had a
Material Adverse Effect on FACO.
(g) ABSENCE OF CLAIMS. No litigation, proceeding or controversy before
any court or governmental agency is pending against FACO which is
reasonably likely, individually or in the aggregate, to materially hinder
or delay consummation of the transactions contemplated hereby, and, to its
actual knowledge, no such litigation, proceeding, controversy, claim or
action has been threatened.
(h) ACTUAL KNOWLEDGE AS TO CONDITIONS. FACO knows of no reason why the
approvals, consents and waivers of governmental authorities referred to in
Section 5.1(b) should not be obtained without the imposition of any
condition of the type referred to in the provisos thereto.
(i) FUNDS. FACO has funds available to complete the transactions
contemplated hereby.
(j) FEES. Neither FACO nor any of its officers, directors, employees
or agents has employed any broker or finder or incurred any liability for
any financial advisory fees,
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brokerage fees, commissions or finder's fees in connection with this
Agreement or the transactions contemplated hereby.
ARTICLE IV
COVENANTS
4.1 ACQUISITION PROPOSALS. Seller agrees that neither it nor Savings nor
any of their respective officers and directors shall, and Seller shall direct
and use its best efforts to cause its employees, agents and representatives
(including, without limitation, any investment banker, attorney or accountant
retained by them) not to, and shall cause Savings to direct and use its best
efforts to cause Savings' employees, agents and representatives (including,
without limitation, any investment banker, attorney or accountant retained by
them) not to, initiate or solicit any inquiries or the making of any proposal or
offer with respect to, a merger, consolidation or similar transaction involving,
or any purchase of all or substantially all of the assets or any equity
securities of, Savings (any such proposal or offer being hereinafter referred to
as an "Acquisition Proposal") or engage in any negotiations concerning, or
provide any confidential information or data to, or have any discussions with,
any person relating to an Acquisition Proposal. Seller will promptly cease and
cause to be terminated, and shall cause Savings to cease and cause to be
terminated, any existing discussions or negotiations with any parties conducted
heretofore with respect to any of the foregoing. Seller shall promptly notify
FACO, and shall cause Savings to promptly notify FACO, of any Acquisition
Proposal that either of them receives from any third party.
4.2 EMPLOYEE BENEFITS.
(a) All employees of Savings continuing in the employ of Savings
following the Closing will be permitted to participate in employee benefit
plans of FACO on the same basis as other employees of FACO and its
affiliates, subject to satisfaction of vesting and eligibility
requirements. To the extent that any employees of Savings are permitted
pursuant to the preceding sentence to participate in employee benefit plans
of FACO, such employees will be given credit under such employee benefit
plans for their period of employment with Savings.
(b) Savings has furnished to FACO its severance policies applicable to
its employees (other than as set forth in the Disclosure Schedule) and a
schedule indicating the amount that would be due as a severance payment to
each such employee on or before the Closing Date. To the extent FACO fails
to offer an employee identified on such schedule continued employment in an
equivalent or substantially similar position following the Closing Date,
Seller shall be responsible for paying the severance payments due such
employee as set forth on such schedule.
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(c) Except as provided in subsection 4.2(e), Seller shall assume from
Savings and perform in accordance with their terms any existing individual
employment, severance, deferred compensation and similar agreements between
Savings and any current or former officer, director, employee or consultant
of Savings who is terminated by Savings on or before the Closing Date.
(d) Seller and/or Savings have entered into written and verbal
agreements to pay bonus compensation to certain employees upon the closing
of a transaction such as that contemplated herein provided that such
employees continue in their employment through the Closing Date. All
obligations associated therewith shall be recorded as of the Closing Date
on the financial statements of Savings and be taken into account in
preparing the written estimate pursuant to Section 1.1(b).
(e) On or before the Closing Date, the chief executive/financial
officer and all loan servicing personnel of Savings will resign or Seller
shall cause Savings to otherwise terminate their employment. All severance
and other obligations of Savings associated therewith shall be paid or
recorded as of the Closing Date on the financial statements of Savings and
be taken into account in preparing the written estimate pursuant to Section
1.1(b).
4.3 ACCESS AND INFORMATION.
(a) Upon reasonable notice, Seller shall cause Savings to afford to
FACO and its representatives (including, without limitation, directors,
officers and employees, and their affiliates, and counsel, accountants and
other professionals retained) such reasonable access during normal business
hours throughout the period prior to the Closing to the books, records
(including, without limitation, Tax Returns and work papers of independent
auditors), properties, policies, files, personnel and to such other
information as such persons may reasonably request; permit such persons to
inspect and make copies of all stock records, minute books, books of
account, contracts, commitments and other records; furnish to FACO such
counterpart originals or certified or other copies of such documents or
such information with respect to its businesses and affairs as FACO may
reasonably request and that Savings may provide without violation of
applicable law or regulation or jeopardy to any attorney-client or similar
privilege to which Savings may be entitled as against third parties other
than FACO. Without limiting the foregoing, Seller shall cause Savings
promptly to provide FACO monthly unaudited balance sheets and operating
statements, and such other reports and materials as are normally prepared
and provided to the Board of Directors or senior management of Savings,
promptly following the date the same are provided to the Board of Directors
and senior management of Savings. Seller shall cause Savings to provide
FACO with as much information concerning an exit interview or similar
meetings held in connection with any regulatory examinations of Savings and
with respect to the examination findings and results as Savings can provide
without violation of law.
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(b) No party shall, and each shall cause its representatives not to,
use any information obtained pursuant to this Section 4.3 for any purpose
unrelated to the consummation of the transactions contemplated by this
Agreement. Subject to the requirements of law, FACO shall keep confidential
and shall cause its representatives to keep confidential, and Seller shall
keep confidential and shall cause its representatives, Savings and Savings'
representatives to keep confidential, all information, documents and trade
secrets obtained pursuant to this Section 4.3 unless such information (i)
becomes or has become available to such party or Savings from other sources
not known by such party or Savings to be bound by a confidentiality
obligation, (ii) is disclosed with the prior written approval of the party
to which such information pertains or with the prior written approval of
Seller if such information pertains to Savings or (iii) is or becomes
readily ascertainable from published information or trade sources. In the
event that this Agreement is terminated or the transactions contemplated by
this Agreement shall otherwise fail to be consummated, each party shall
promptly cause all copies of documents or extracts thereof containing
information and data as to another party hereto to be destroyed or returned
to the party that furnished the same, as such furnishing party may
designate.
4.4 CERTAIN FILINGS, CONSENTS AND ARRANGEMENTS. FACO and Seller shall, and
Seller shall cause Savings to, (a) promptly make any filings and applications
required to be filed in order to obtain all approvals, consents and waivers of
the OTS, the FDIC and any other governmental authorities necessary or
appropriate for the consummation of the transactions contemplated hereby, (b)
cooperate with one another (i) in promptly determining what filings are required
to be made or approvals, consents, or waivers are required to be obtained under
any relevant Federal or state law or regulation, (ii) in providing the other a
reasonable opportunity to review and comment upon the publicly available
portions of such filings, and (iii) in promptly making any such filings,
furnishing information required in connection therewith and seeking timely to
obtain any such approvals, consents or waivers and (c) deliver to the other
copies of publically available portions of all such filings and applications
promptly after they are filed. In addition, if FACO so elects, Seller shall
cooperate, and shall cause Savings to cooperate at FACO's expense, in filing any
application necessary or desirable to convert Savings to a Federal savings bank.
4.5 ADDITIONAL AGREEMENTS. Subject to the terms and conditions herein
provided, FACO and Seller agree, and Seller agrees to cause Savings, to use all
reasonable best 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 laws and regulations to consummate and make
effective the transactions contemplated by this Agreement as promptly as
practicable, including using reasonable best efforts to obtain all necessary
actions or nonactions, extensions, waivers, consents and approvals from all
applicable governmental entities and other third parties, affecting all
necessary registrations, applications and filings and obtaining any required
contractual consents (including consent to assignment of leases inhere required)
and regulatory approvals.
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4.6 PUBLICITY. The initial press releases announcing this Agreement shall
be issued concurrently. The parties shall consult with each other in issuing any
press releases or otherwise making public statements with respect to the
transactions contemplated hereby and in making any filings with any governmental
entity or with any national securities exchange with respect thereto, and shall
not issue any press release that discloses the identity of the other party
without such other party's prior written consent. If any party hereto, on the
advice of counsel, determines that a disclosure is required by law, it may make
such disclosure without the consent of the other parties, but only after
affording the other parties a reasonable opportunity to review and comment upon
the disclosure.
4.7 NOTIFICATION OF CERTAIN ADVERSE MATTERS. Seller shall give FACO, and
shall cause Savings to give FACO, prompt notice of: (a) with respect to Savings,
any material adverse change in its respective business, operations, or prospects
(it being understood that material adverse change as used in this clause (a)
does not include any changes expressly contemplated by this Agreement), and with
respect to Seller, any change that would materially affect the ability of Seller
to perform its obligations under this Agreement, (b) any material complaints,
investigations or hearings (or communications indicating that same may be
contemplated) of any governmental agency or regulatory authority, (c) the
institution or the threat of material litigation, or (d) any event or condition
that constitutes a breach of this Agreement. or that might be reasonably
expected to cause its respective representations or warranties set forth herein
not to be true and correct in all material respects as of the Closing Date. FACO
shall give Seller prompt notice of any event or condition known to it which is
reasonably likely to materially hinder or delay consummation of the transactions
contemplated hereby.
4.8 DIRECTOR RESIGNATIGNS. Seller shall cause Savings to deliver to FACO at
the Closing the resignations of the members of the Board of Directors of
Savings.
4.9 HUMAN RESOURCES ISSUES. Seller agrees to cooperate with FACO, and
agrees to cause Savings to cooperate with FACO, with respect to any formal
meetings or interviews with one or more employees called or arranged by Savings
and held for the purpose of discussing the transactions contemplated by this
Agreement or their effect on such employees, with FACO given the opportunity to
participate in such meetings or interviews. This section is not intended to
apply to casual conversations about the transaction or informal meetings
initiated by employees, or to prohibit discussion in general, but rather to
allow FACO a role in the formal presentation of the transaction to employees,
and an opportunity to participate in the significant. Formal meetings at which
the transaction is explained and discussed.
4.10 ASSISTANCE WITH THIRD-PARTY AGREEMENTS.
(a) Prior to the Closing, Seller shall cooperate with and use all
reasonable efforts, and shall cause Savings to cooperate with and to use
all reasonable efforts, to assist FACO in (i) gaining access to all of
Savings' third-party vendors and the landlords of all of Savings' leased
properties, promptly after the date of this Agreement and after
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Seller or Savings has contacted them, (ii) obtaining the cooperation of
such third parties in a smooth transition in accordance with FACO's
timetable at or after the Closing, provided that nothing herein shall
require FACO to pay fees or other consideration to any such third party in
order to obtain such cooperation.
(b) Seller shall cause Savings to use its reasonable best efforts to
enter into a written lease assumption agreement with the lessor of Savings'
leasehold interest on the Newport Beach branch (the "Leasehold Interest")
on terms no less favorable than those set forth in the lease dated as of
July 28, 1978 between South Bay Savings & Loan Association (as successor in
interest to Universal Savings & Loan Association), as lessee, and Xxxx
Center Newport No. 8, a California limited partnership, as lessor.
(c) Seller shall cause Savings to be responsible for all fees and
expenses of third parties incurred by Savings in connection with the taking
of any action pursuant to Sections 4.10(a) and (b), provided that Seller
shall have the right to approve any such payments. FACO agrees that all
actions taken pursuant to this Section 4.10 shall be taken in a manner
intended to minimize disruption to the customary business activities of
Savings.
4.11 NOTICES AND COMMUNICATIONS. Seller shall cause Savings, if requested
to do so by FACO following receipt of all approvals of governmental authorities
to the transactions contemplated by this Agreement, but prior to the expiration
of any statutory waiting periods, if it receives a statement by FACO in writing
that to its actual knowledge there are no conditions to Closing set forth in
Article V that have not been, or cannot be, satisfied prior to Closing, (a) to
cooperate with FACO by sending necessary or appropriate customer notifications
and communications as drafted by FACO to advise such customers of the impending
transaction and of FACO's plans for Savings following the Closing, and (b) to
take or cause to be taken at the direction of and as agent for FACO, all actions
necessary to comply with the provisions of the Worker Adjustment And Retraining
Notification Act, as amended (12 U.S.C. 2101. Section 2101. ET SEQ.), with
respect to all employees of Savings covered by such act who are to be terminated
by FACO within sixty days following the effective time, including the issuance
of notices to such employees.
4.12 INSURANCE POLICIES ASSIGNMENT.
(a) Seller agrees to make commercially reasonable efforts, and agrees
to cause Savings to make commercially reasonable efforts, to obtain consent
to partial or complete assignments of any insurance policies of Savings if
requested to do so by FACO to the extent necessary to maintain the benefits
to FACO of such policies as they apply to Savings and its affairs. Seller
shall also inform FACO, and shall cause Savings to inform FACO. no later
than the Closing Date of any material unfiled insurance claims of which
they have actual knowledge and for which they believe coverage exists.
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(b) Seller and FACO shall cooperate, and Seller shall cause Savings to
cooperate, to determine the most appropriate methodology to provide "tail"
insurance coverage to FACO for a period of three years following the
Closing with respect to all insurable claims made against Savings for
events occurring prior to the Closing; PROVIDED, HOWEVER, that Seller shall
not be required to obtain such coverage if it otherwise exists, without
additional expense, under Savings' existing insurance policies; and
PROVIDED, FURTHER, that if the required coverage can be obtained at less
expense under FACO's existing insurance policies than by Seller purchasing
"tail" coverage, Seller shall have the option of reimbursing FACO for such
additional expense rather than purchasing separate coverage.
4.13 DESIGNATED SALES. Prior to the Closing, Seller shall cause Savings to
sell or distribute to Seller (or a subsidiary thereof) all (a) investment
securities, including derivative securities such as interest rate swap and cap
agreements, not designated for retention by FACO, and in connection with such
sales or distributions to arrange for the release of Savings and any collateral
related to any such swap or cap agreements, (b) loan receivables, (c) rights to
service loans for third parties and (d) real estate owned, together with accrued
interest and other amounts receivable in connection therewith. Seller shall
cause Savings, not less than 10 business days prior to the Closing Date, to
submit to FACO a list of all investment securities owned with their related fair
market values as of the submission date. Within one business day after the
receipt of such listing, FACO shall deliver to Savings a listing of securities
designated for retention by Savings. Seller shall also cause Savings to
distribute to Seller (or a subsidiary thereof) prior to the Closing its
investment in SPS Affiliates and such other assets and liabilities as are
identified on the Disclosure Schedule. Seller (or a subsidiary thereof) shall
assume all liabilities, whether absolute or contingent, associated with
securities and assets so distributed.
4.14 FHLBSF. Prior to the Closing, Seller shall cause Savings (a) to repay
all advances from the FHLBSF, except for that variable rate advance of $13
million maturing January 8, 1998 and that $5 million advance which bears
interest at 4.87% per annum maturing October 8, 1998, and (b) thereafter to
cause the FHLBSF to redeem as much of the FHLBSF stock owned by Savings as is
permissible under applicable regulations.
4.15 NAME CHANGE. Concurrently with the Closing, FACO shall cause Savings
to cease using the name "Standard Pacific," but may thereafter refer to
"Standard Pacific' as a predecessor name to the extent reasonably necessary.
4.16 TAX MATTERS.
(a) SELLER'S RESPONSIBILITIES.
(i) Seller shall be liable for, and shall defend, indemnify and hold
harmless FACO and its directors, officers, employees, attorneys and agents from,
any and all Taxes of any kind or character, including, without limitation,
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(A) any obligation to contribute to the payment of a tax determined on
a consolidated, combined or unitary basis with respect to a group of
corporations that includes or included Savings and Taxes resulting from
Savings ceasing to be a member of Seller's Group or attributable to the
election to be made under Section 338(h)(10) of the Code; and
(B) any deferred income recharacterized as income by reason of
Treasury Regulation Section 1.1502-13 and Treasury Regulation Section
1.1502-14 and any excess loss accounts taken into income under Treasury
Regulation Section 1.1502-19 (and any similar state, local or foreign
provision),
that are (1) imposed on Seller's group (other than Savings) for any taxable year
or (2) imposed on Savings, or for which Savings may otherwise be liable, for any
taxable year or period that ends on or before the Closing Date and, with respect
to any taxable year or period beginning before and ending after the Closing
Date, the portion of such taxable year ending on and including the Closing Date.
The indemnification obligation provided hereunder shall include indemnification
for costs and expenses, including reasonable attorney's fees and expenses and
other costs and expenses associated with defense of a claim or incurred in
obtaining indemnification hereunder, whether or not they are incurred in a
formal proceeding. Seller shall be entitled to any refund of Taxes of Savings
received after Closing attributable to such periods. Notwithstanding the
foregoing, Seller shall not be liable for, and shall have no obligation to
indemnify FACO hereunder for, any Taxes to the extent that (i) such Taxes arise
from the events or actions occurring on the Closing Date after the Closing,
other than those events or actions that are deemed to occur after the Closing,
under the consolidated return Treasury Regulations or otherwise, that actually
occur prior to, or simultaneously with, the Closing or as part of the
Acquisition, (ii) such taxes arise from an adjustment to an item of income,
loss, deduction or credit claimed for a pre-Closing period that gives rise to an
offsetting adjustment and reduction in Taxes for a post-Closing period
(considering, INTER ALIA, in determining the amount of such reduction, changes
in tax rates), or (iii) such Taxes, together with the Taxes for which
indemnification is provided pursuant to Section 7.3, are not in excess of the
amount of accrued and unpaid Taxes set forth on the Closing Balance Sheet.
(ii) Seller shall file or cause to be filed when due (A) all consolidated,
combined or unitary Tax Returns that are required to be filed by or with respect
to Savings for taxable years or periods ending on or before the Closing Date and
(B) all other Tax Returns that are required to be filed by or with respect to
Savings that are due on or prior to the Closing Date, and Seller shall pay any
Taxes due in respect of (A) or (B) above. Seller will take no position (unless
required by law)
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or make any election on such Tax Returns that would adversely affect
Savings after the Closing Date.
(b) FACO'S RESPONSIBILITIES.
(i) FACO shall be liable for all Taxes of Savings for any taxable
year or period that begins after the Closing Date and, with respect to any
taxable year or period beginning before and ending after the Closing Date,
the portion of such taxable year beginning after the Closing Date, and FACO
shall indemnify Seller for any Taxes imposed on Seller's Group or Seller to
the extent that such Taxes arise from the events or actions described in
clause (i) of the last sentence of Section 4.16(a)(i).
(ii) FACO shall file or cause to be filed when due all Tax Returns
that are required to be filed by or with respect to Savings, other than the
consolidated, combined or unitary Tax Returns referred to in Section
4.16(a)(ii)(A) above, that are due after the Closing Date, and FACO shall
pay any Taxes due in respect of the Tax returns described above, subject to
reimbursement by Seller for Taxes Seller is liable for under Section
4.16(a)(i).
(c) TAXES FOR SHORT TAXABLE YEAR. Whenever it is necessary to determine
the liability hereunder for Taxes of Savings for a portion of a taxable year or
period that begins before and ends after the Closing Date, the determination of
the Taxes of Savings for the portion of the year or period ending on, and the
portion of the year or period beginning after, the Closing Date shall be
determined by assuming that Savings had a taxable year or period which ended at
the close of the Closing Date and that Savings closed its books at that time,
except that exemptions, allowances or deductions that are calculated on an
annual basis, such as the deduction for depreciation, shall be apportioned pro
rata on a daily basis.
(d) REVIEW OF TAX RETURNS AND OTHER FILINGS. To the extent that one party
(the "nonfiling party") would be liable under this Section 4.16 for Taxes
payable with respect to, or would otherwise be subject to increased liability
for Taxes as a result of, Tax Returns or other filings filed by another party
(the "other party"), the other party shall allow the nonfiling party adequate
opportunity to review and comment on such Tax Returns or other filings and shall
not file such Tax Returns or other filings without the consent of the nonfiling
party; PROVIDED, such nonfiling party agrees that it is liable for such Taxes
hereunder and, PROVIDED FURTHER, that such consent shall not be unreasonably
withheld
(e) CONTEST PROVISIONS. FACO and Seller shall promptly notify each other in
writing upon receipt by either of them, or any of their affiliates, or Savings,
of notice of any pending or threatened federal, state, local or foreign tax
audits or assessments which
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may materially affect the tax liabilities of Savings for which Seller would be
required to indemnify FACO pursuant to this Agreement.
Seller shall have the sole right to represent Savings' interests in any tax
audit or administrative or court proceeding relating to taxable periods ending
on or before the Closing Date, and to employ counsel of its choice, at its
expense. Notwithstanding the foregoing, Seller (A) shall consult with FACO with
respect to the resolution of any issue that would affect FACO or Savings in any
way and to any extent, in the taxable periods subject to such proceeding or any
other taxable periods (including, but not limited to, any resolution that would
result in the imposition of income tax deficiencies, the reduction of asset
basis or cost adjustments, the lengthening of any amortization or depreciation
periods, the denial of amortization or depreciation deductions, or the
reductions of loss or credit carryforwards to Savings or FACO), and (B) shall
not settle any such issue or file any amended return relating to such issue,
without the consent of FACO, which consent shall not be unreasonably withheld.
Seller shall be entitled to participate at its expense in the defense of
any claim for Taxes for a period described in Section 4.16(c) for the portion of
the year or period ending on the Closing Date that is the subject of
indemnification by Seller hereunder. Neither FACO nor Savings may agree to
settle any such claim for Taxes for the portion of the year or period ending on
the Closing Date that is the subject of indemnification by Seller hereunder
without the prior written consent of Seller, which consent shall not be
unreasonably withheld. Seller shall not settle any such claim, or take any other
action with respect to such claim, without the consent of FACO, which shall not
be unreasonably withheld.
(f) TERMINATION OF TAX ALLOCATION AGREEMENTS. Any tax allocation or sharing
agreement or arrangement, whether or not written, that may have been entered
into by Seller or any member of Seller's group and Savings shall be terminated
as to Savings as of the Closing Date, and no payments which are owed by or to
Savings pursuant thereto shall be made thereunder, except to the extent such
obligation or receivable is reflected on the final Closing Date Balance Sheet,
in which case it shall be paid.
(g) SECTION 338(h)(10). (A) ELECTION. At the request of FACO, Seller shall
make a joint election with FACO under Section 338(h)(10) of the Code with
respect to the purchase of Savings' Shares and under any similar provisions of
state or foreign law. Seller represents that its sale of the Shares of Savings
is eligible for, and FACO represents that it is qualified to make, such
election. If the election is made, Seller and FACO shall on the Closing Date
exchange completed and executed copies of Internal Revenue Service Form 8023,
required schedules thereto, and any similar state and foreign forms. If any
changes are required in these forms as a result of information which is first
available after the Closing Date, the parties will promptly agree on such
changes.
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(B) ALLOCATION OF PURCHASE PRICE. If an election under Section
338(h)(10) of the Code is made, Seller and FACO will (i) cause their respective
accountants to negotiate in good faith, on their behalf, and agree to, or (ii)
appoint an appraiser to determine a purchase price and an allocation of that
price among the assets of Savings that are deemed to have been acquired pursuant
to Section 338(h)(10) of the Code or state or foreign law equivalent. FACO and
Seller shall use the asset values determined from such allocation for purposes
of all reports and returns with respect to Taxes, including Internal Revenue
Service Form 8594 or any equivalent statement.
(h) EFFORTS TO OBTAIN CERTAIN DOCUMENTS. Seller agrees, upon request, to
use its reasonable best efforts to obtain any certificate or other document from
any governmental authority or any other person as may be necessary to mitigate,
reduce or eliminate any tax that could be imposed on Savings (including, but not
limited to, with respect to the transactions contemplated by this Agreement).
(i) COOPERATION AFTER CLOSING. After the Closing Date. Seller and FACO
shall:
(i) assist (and cause their respective affiliates to assist) the
other party in preparing any Tax Returns or reports which such other
party is responsible for preparing and filing in accordance with this
Section 4.16;
(ii) cooperate fully in preparing for any audits of, or disputes
with taxing authorities regarding, any Tax Returns of Savings;
(iii) make available to the other and to any taxing authority as
reasonably requested all information, records, and documents relating
to Taxes of Savings;
(iv) provide timely notice to the other in writing of any pending
or threatened tax audits or assessments of Savings for taxable periods
for which the other may have a liability under this Agreement;
(v) furnish the other with copies of all correspondence received
from any taxing authority in connection with any tax audit or
information request with respect to any such taxable period;
(vi) retain and (upon the other party's request) provide records
and information that are reasonably relevant to any audit, litigation
or other proceeding or to tax matters pertinent to Savings relating to
any taxable year or period beginning before the Closing Date until the
expiration of the statute of limitations (and any extensions thereof)
of the respective taxable periods and give the other party reasonable
written notice prior to transferring, destroying or
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discarding any such records and information; provided, if FACO so
requests, after receiving notice that such records are to be destroyed
or discarded, Seller shall allow FACO to take possession of such books
and records; and, provided further, that FACO shall not be required to
give such notice to Seller after the expiration of the statute of
limitations (and any extensions thereof known to FACO) of the
respective tax period to which such books and records relate;
(vii) provide, upon request, all information that may be required
for reporting pursuant to Section 6043 of the Code and the regulations
thereunder; and
(viii) abide by all record retention agreements entered into with
any taxing authority.
(j) TRANSFER TAXES. All transfer, documentary, sales, use, stamp,
registration and other such Taxes and fees (including penalties and
interest) incurred in connection with the transactions contemplated by this
Agreement shall be paid by Seller when due, and Seller will, at its
expense, file all necessary Tax Returns or other forms for such Taxes and
other documentation with respect to all such matters. If required by
applicable law, FACO will join in the execution of any such returns or
documentation.
(k) MISCELLANEOUS. Any payment by FACO or Seller under this Section
4.16 will be an adjustment to the Purchase Price. Except as otherwise
contemplated by this Section 4.16, the provisions of Section 7.3 shall
apply to any claim for indemnification hereunder.
4.17 ASSISTANCE AGREEMENT. Seller (as successor to Standard Pacific LP),
Savings and the FDIC (as successor to the Federal Savings and Loan Insurance
Corporation) are parties to an Assistance Agreement dated as of March 6, 1987
(the "Assistance Agreement"). Among other things, the Assistance Agreement
provides for certain payments from either Seller or Savings or both to the FDIC.
If and to the extent that Savings has any liability to the FDIC pursuant to the
Assistance Agreement which liability is not accrued on the Closing Balance
Sheet, Seller agrees that it will promptly pay such liability directly to the
FDIC when required or, if such direct payment is not permitted, will promptly
reimburse Savings for such amount. If and to the extent that Savings receives
any payments from the FDIC pursuant to the Assistance Agreement which receivable
is not accrued on the Closing Balance Sheet, FACO will cause Savings to promptly
pay such amount to Seller. FACO agrees to notify Seller if it or Savings
subsequent to the Closing Date receives any notice from the FDIC that any such
liability will be asserted and agrees to permit Seller upon reasonable request
to have access to the books and records of Savings to the extent reasonably
necessary to resolve any such claim.
4.18 CAPITAL OF SAVINGS. To the extent permitted by the OTS, immediately
prior to the Closing, Seller shall cause Savings to reduce its capital such that
Savings will have leverage
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capital (as that term is defined in Part 565.2(c) of the OTS' Regulations) of
approximately 8.0% based upon an estimate of Savings' balance sheet as of the
Closing Date; provided however, that any such reduction will be limited to an
amount necessary to permit Savings to remain "well capitalized" within the
meaning of Part 565.4(b)(l) of the OTS' Regulations.
ARTICLE V
CONDITIONS TO CONSUMMATION
5.1 CONDITIONS TO EACH PARTY'S OBLIGATIONS. The respective obligations of
FACO on the one hand and of Seller on the other hand to close the transaction
contemplated by this Agreement shall be subject to the satisfaction or waiver
prior to the Closing of the following conditions:
(a) The Agreement and the transactions contemplated hereby shall have
been approved by Seller in accordance with applicable law.
(b) FACO shall have procured, as necessary, the required approval,
consent or waiver with respect to the Agreement and the transactions
contemplated hereby by the OTS, and, the applicable statutory waiting
period shall have expired; and the parties shall have procured all other
regulatory approvals, consents or waivers of governmental authorities or
other persons that are necessary or appropriate to the consummation of the
transactions contemplated by the Agreement; PROVIDED, HOWEVER, that no
approval, consent or waiver referred to in this Section 5.1(b) shall be
deemed to have been received if it shall include any condition or
requirement that would be materially burdensome on FACO or deny FACO the
benefits anticipated from the Acquisition; and PROVIDED, further, that a
condition or requirement imposed on the basis of Savings' compliance with
regulatory capital requirements generally applicable to savings
associations shall not be deemed to be materially burdensome.
(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 Acquisition.
5.2 CONDITIONS TO OBLIGATIONS OF FACO. The obligations of FACO to close the
transactions contemplated by this Agreement shall be subject to the satisfaction
or waiver prior to the Closing Date of the following additional conditions:
(a) Each of the representations and warranties of Seller contained in
this Agreement shall, in all material respects, be true at the Closing Date
as if made on such date. Without affecting the representations of Seller
made as of the date of this Agreement, the Disclosure Schedule shall be
updated and made current to such dates as
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close to the Closing Date as is reasonable for each type of disclosure and
as are agreed upon by the parties hereto no later than thirty (30) days
prior to the Closing Date. Seller shall have performed, in all material
respects, each of its covenants and agreements contained in this Agreement
and FACO shall have received a certificate signed by the Chief Executive
Officer or the Chief Financial Officer of Seller, at the Closing Date, to
the foregoing effect.
(b) No litigation or proceeding shall be pending against Seller or
Savings brought by any governmental agency seeking to prevent consummation
of the transactions contemplated hereby.
(c) FACO shall have received the opinion of Xxxxxx, Xxxx & Xxxxxxxx
LLP, special counsel to Seller, in form and substance reasonably
satisfactory to FACO, to the effect that this Agreement has been duly
authorized, executed and delivered by Seller and constitutes the valid and
legally binding obligation of Seller enforceable in accordance with its
terms, subject to customary exceptions.
(d) A written lease assumption agreement for the Leasehold Interest
shall have been obtained in accordance with Section 4.10(b), in form and
substance satisfactory to FACO and Seller.
5.3 CONDITIONS TO OBLIGATIONS OF SELLER. The obligations of Seller
hereunder shall be subject to the satisfaction or waiver prior to the Closing
Date of the following additional conditions:
(a) Each of the representations, warranties and covenants of FACO
contained in this Agreement shall, in all material respects, be true at the
Closing Date as if made on such date; FACO shall have performed, in all
material respects, each of its covenants and agreements contained in this
Agreement; and Seller shall have received a certificate signed by the Chief
Executive Officer or the Chief Financial Officer of FACO at the Closing
Date, to the foregoing effect.
(b) No litigation or proceeding shall be pending against FACO or any
of its subsidiaries brought by any governmental agency seeking to prevent
consummation of the transactions contemplated thereby.
(c) Seller shall have received the opinion of Xxxxx X. Xxxxxxx.
General Counsel to FACO, in form and substance reasonably satisfactory to
Seller, to the effect that this Agreement has been duly authorized,
executed and delivered by FACO and constitutes the valid and legally
binding obligation of FACO enforceable in accordance with its terms,
subject to customary exceptions.
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ARTICLE VI
TERMINATION
6.1 TERMINATION. This Agreement may be terminated, and the Acquisition
abandoned, prior to the Closing Date:
(a) by the mutual agreement of Seller and FACO, if the board of the
directors, or duly authorized committee thereof, or duly authorized
officers, of each so determines;
(b) by FACO or Seller in the event of a material breach by the other
party hereto of any representation, warranty, covenant or agreement
contained herein, which is not cured within 30 days after written notice of
such breach is given to the party committing such breach by the other
party; PROVIDED, HOWEVER, that solely for purposes of this Section 6.1(b) a
breach by Seller of a representation or warranty contained herein shall be
deemed to be a material breach only if such breach has not been waived and
if the failure of any such representation or warranty to be true has or
constitutes, individually or in the aggregate with other representations or
warranties that are untrue, a Material Adverse Effect on either Savings or
Seller;
(c) by FACO or Seller by written notice to the other party if either
(i) any approval, consent or waiver of a governmental authority required to
permit consummation of the transactions contemplated hereby shall have been
denied or (ii) any governmental authority of competent jurisdiction shall
have issued a final, nonappealable order enjoining or otherwise prohibiting
consummation of the transactions contemplated by this Agreement;
(d) by FACO or Seller in the event that the Acquisition is not
consummated by December 31, 1997. unless the failure to so consummate by
such time is due to the breach of any representation, warranty or covenant
contained in this Agreement by the party seeking to terminate;
(e) by FACO if there shall have been a Material Adverse Effect with
respect to Savings.
6.2 EFFECT OF TERMINATION. In the event of the termination of this
Agreement by either FACO or Seller, as provided above, 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, except that any such
termination shall be without prejudice to the rights of any party hereto arising
out of the willful breach by any party of any covenant or willful
misrepresentation contained in this Agreement.
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ARTICLE VII
OTHER MATTERS
7.1 CERTAIN DEFINITIONS: INTERPRETATIONS. As used in this Agreement, the
following terms shall have the meanings indicated:
"actual knowledge" shall mean facts and other information which any senior
vice president or superior officer or the controller of a party actually knows.
"Adverse Consequences" shall mean any and all losses, liabilities, damage
to property, liens, encumbrances, damages, judgments, demands, suits, claims,
assessments, charges, fines, penalties, environmental cleanup liability, costs
and expenses, including reasonable attorney's fees and expenses and other costs
and expenses associated with defense of a claim or incurred in obtaining
indemnification hereunder, whether or not in a formal proceeding.
"material" means material to FACO, Seller or Savings (as the case may be)
and its respective subsidiaries, taken as a whole.
"Material Adverse Effect", with respect to a person, means a material
adverse effect upon (i) business, operations, financial condition or results of
operations of such person and its subsidiaries, taken as a whole, or (ii) the
ability of such person to timely perform its obligations under, and to timely
consummate the transactions contemplated by, this Agreement, but shall not
include, with respect to Seller or Savings, the sales and distributions and
other actions contemplated by Sections 4.13 and 4.14 hereof.
"person" includes an individual, corporation, partnership, association,
trust or unincorporated organization.
"Seller's Group" shall mean any "affiliated group" (as defined in Code
Section 1504(a) without regard to the limitations contained in Code Section
1504(b)) that includes Seller or any predecessor or successor to Seller (or
another such predecessor or successor).
"subsidiary", with respect to a person, means any other person the stock
or equity of which is more than 50% owned by such person.
"Taxes" shall mean any federal, state, local. or foreign income, gross
receipts, license, payroll, employment, excise, severance, stamp, occupation,
premium, windfall profits, environmental (including taxes under Code Section
59A), customs duties, capital stock, franchise, profits, withholding, social
security (or similar), unemployment, disability, real property, personal
property, sales. use, transfer, registration, value added, alternative or add-on
minimum, estimated, or other taxes, or assessments in the nature of taxes, of
any kind
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whatsoever, including any interest, penalty, or addition thereto, and any
interest in respect of such penalties or additions whether disputed or not.
"Tax Return" shall mean any return, declaration, report, claim for refund,
or information return or statement relating to Taxes, including, without
limitation, consolidated federal income tax returns of Seller's Group, and
including any schedule or attachment thereto, and including any amendment
thereof.
The table of contents and headings contained in this Agreement offer 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.
7.2 SURVIVAL OF REPRESENTATIONS. WARRANTIES AND COVENANTS. The
representations, warranties and covenants of the parties hereto shall survive
the Closing for a period of one year from and after the Closing Date, provided
that (i) the representations and warranties, covenants and indemnification
obligations of Seller with respect to litigation and environmental matters
(Sections 3.1(j), 3.1(t) and 7.3(a)(i)(A) (as it applies to Sections 3.1(j) and
3.1(t) and Sections 7.3(a)(i)(B) and (C) only) shall survive the Closing for a
period of three years and (ii) the covenants and indemnification obligations
related to Taxes (Sections 4.16 and 7.3(a)(i)(A) (as it applies to obligations,
but not representations or warranties) and 7.3(a)(i)(D) only) shall survive the
Closing until all applicable statutes of limitations periods shall have run. No.
claim may be made for damages asserted to arise out of any claimed breaches or
inaccuracies of the representations, warranties and covenants made by Seller
herein unless such claim is asserted prior to the termination of the respective
periods of survival stated in the preceding sentence.
7.3 INDEMNIFICATION.
(a) SELLER'S INDEMNIFICATION.
(i) Seller shall defend, indemnify and hold harmless FACO and its
officers, directors, employees, attorneys and agents from any and all
Adverse Consequences of any kind or character arising out of, in
connection with, or resulting from:
(A) the breach by Seller of any of its obligations or
representations and warranties under this Agreement;
(B) any Adverse Consequences to FACO resulting from
litigation or claims against Savings or its directors or officers
filed prior to the Closing Date or within three years thereafter
related to matters that occurred prior
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to the Closing; PROVIDED, HOWEVER, that Savings' litigation reserve
(if existing) as set forth in the Closing Balance Sheet shall first be
utilized in the event of any such Adverse Consequences, and the
indemnification obligation of Seller shall only apply to Adverse
Consequences above that amount;
(C) any Adverse Consequences to FACO resulting from
environmental hazards, risks or matters, to the extent required to be
addressed by applicable Environmental Laws, discovered by FACO after
the Closing Date related to any of Savings' properties (as defined in
Section 3.1(t)(vi)), provided such environmental hazards, risks or
matters result from the condition of such property prior to the
Closing Date; and
(D) any Adverse Consequences to FACO for any failure of
Seller to fulfill its responsibilities and satisfy its obligations as
specified in Section 4.16; PROVIDED, that the indemnification
obligation of Seller under this Section 7.3(a)(i)(D) shall only apply
to the extent that such Adverse Consequences and the Taxes indemnified
pursuant to Section 4.16, together, exceed the amount of accrued but
unpaid taxes as set forth on the Closing Balance Sheet.
(ii) Notwithstanding the provisions of Section 7.3(a)(i), FACO
shall not be entitled to assert rights of indemnification under
subsections 7.3(a)(i)(A), (B) and (C) until the aggregate of all
Adverse Consequences described in such subsections 7.3(a)(i)(A), (B)
(after utilization of the litigation reserve, as described therein)
and (C) exceeds $25,000 (the "Threshold Amount"), it being understood
that all such Adverse Consequences shall accumulate until such time as
the aggregate amount thereof exceeds the Threshold Amount, whereupon
FACO shall be entitled to indemnification hereunder for all Adverse
Consequences that have occurred in excess of the Threshold Amount.
(iii) The amount of any indemnification shall be the principal
amount of the obligation, plus any interest payable by FACO in respect
of such obligation, plus interest from the date FACO makes or made
payment to the date when reimbursed by Seller, at the Federal Funds
Rate during such period. Any indemnification payment shall be reduced
by the amount of any tax benefits actually realized by FACO with
respect to the matters that are the subject of the claim.
(b) FACO'S INDEMNIFICATION.
(i) FACO shall defend, indemnify and hold harmless Seller and its
officers, directors, employees, attorneys and agents from any and all
Adverse Consequences of any kind or character arising out of, in
connection with, or
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resulting from (A) the ownership, possession, operation, use or
maintenance of Savings after the Closing Date, (B) the breach by FACO
of any of its obligations or representations and warranties hereunder
or (C) environmental hazards, risks or matters, to the extent required
to be addressed by applicable Environmental Laws, discovered by FACO
after the Closing Date related to any of Savings' properties (as
defined in Section 3.1(t)(vi)), provided such environmental hazards,
risks or matters result from the condition of such property after the
Closing Date and arise after the Closing Date, and do not result from
the condition of such property prior to the Closing Date.
(ii) The amount of any indemnification shall be the principal
amount of the obligation, plus any interest payable by Seller in
respect of such obligation, plus interest from the date Seller makes
or made payment to the date when reimbursed by FACO, at the Federal
Funds Rate during such period. Any indemnification payment shall be
reduced by the amount of any tax benefits actually realized by Seller
with respect to the matters that are the subject of the claim.
(c) INDEMNIFICATION PROCEDURES. Except as otherwise provided in
Section 4.16(e), all claims for indemnification under this Agreement will
be asserted and resolved as provided in this Section 7.3(c).
(i) A party claiming indemnification under this Agreement (an
"Indemnified Party") will promptly (A) notify the party from whom
indemnification is sought (the "Indemnifying Party") of any
third-party claim or claims ("Third-Party Claim") asserted against the
Indemnified Party which could give rise to a right of indemnification
under this Agreement and (B) transmit to the Indemnifying Party a
written notice ("Claim Notice") describing in reasonable detail the
nature of the Third-Party Claim, a copy of all papers served with
respect to such claim (if any), an estimate of the amount of Adverse
Consequences attributable to the Third-Party Claim, if reasonably
possible, and the basis of the Indemnified Party's request from
indemnification under this Agreement.
Within thirty (30) days after receipt of any Claim Notice or such
lesser period as may be required in order to comply with any
applicable law or to respond to any complaint or pleading (the
"Election Period"), the Indemnifying Party will notify the Indemnified
Party whether the Indemnifying Party disputes its potential liability
to the Indemnified Party under this Agreement with respect to such
Third-Party Claim and whether the Indemnifying Party desires, at the
sole cost and expense of the Indemnifying Party, to defend the
Indemnified Party against such Third-Party Claim.
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(ii) If the Indemnifying Party notifies the Indemnified Party
within the Election Period that the Indemnifying Party does not
dispute its potential liability to the Indemnified Party under this
Agreement and that the Indemnifying Party elects to assume the defense
of the Third-Party Claim, then the Indemnifying Party will have the
right to defend, at its sole cost and expense, such Third-Party Claim
by all appropriate proceedings, which proceedings will be prosecuted
diligently by the Indemnifying Party to a final conclusion or settled
at the discretion of the Indemnifying Party in accordance with this
Section 7.3(c). The Indemnifying Party will have full control of such
defense and proceedings, including any compromise or settlement
thereof and the Indemnified Party shall provide its cooperation to the
Indemnifying Party; provided, however, that if an adverse result is
likely to, in the Indemnified Party's reasonable opinion, subject the
Indemnified Party to material exposure to future Adverse Consequences,
the Indemnifying Party and the Indemnified Party (at its own expense)
shall jointly control such defense and proceedings, including any
compromise or settlement thereof. The Indemnified Party is hereby
authorized, at the sole cost and expense of the Indemnifying Party
(but only if the Indemnified Party is actually entitled to
indemnification hereunder or if the Indemnifying Party assumes the
defense with respect to the Third-Party Claim), to file, during the
Election Period, any motion, answer or other pleadings which the
Indemnified Party deems necessary or appropriate to protect its
interests or those of the Indemnifying Party and which are not
unnecessarily prejudicial to the Indemnifying Party. If requested by
the Indemnifying Party, the Indemnified Party will, at the sole cost
and expense of the Indemnifying Party, cooperate with the Indemnifying
Party and its counsel in contesting any Third-Party Claim which the
Indemnifying Party elects to contest, including the making of any
related counterclaim against the person asserting the Third-Party
Claim or any cross-complaint against any person. The Indemnified Party
may participate in, but not control (except as permitted above), any
defense or settlement of any Third-Party Claim controlled by the
Indemnifying Party pursuant to this Section 7.3(c) and, except as
permitted above, will bear its own costs and expenses with respect to
such participation. Notwithstanding anything in this Section 7.3(c) to
the contrary, the Indemnifying Party will not, without the written
consent of the Indemnified Party (which consent will not be
unreasonably withheld or delayed), settle or compromise any action,
suit or proceeding or consent to the entry of any judgment if such
settlement or compromise is likely to, in the Indemnified Party's
reasonable opinion, subject the Indemnified Party to material exposure
to future Adverse Consequences.
(iii) If the Indemnifying Party fails to notify the Indemnified
Party within the Election Period that the Indemnifying Party elects to
defend the Indemnified Party, or if the Indemnifying Party elects to
defend the Indemnified Party but fails to diligently and promptly
defend or settle the Third-Party Claim, then the Indemnified Party
will have the right to defend. at the sole cost and
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expense of the Indemnifying Party, the Third-Party Claim by all
appropriate proceedings, which proceedings will be promptly and
vigorously prosecuted by the Indemnified Party to a final conclusion
or settled. The Indemnified Party will have full control of such
defense and proceedings; provided, however, that the Indemnified Party
may not, without the Indemnifying Party's consent (which consent will
not be unreasonably withheld or delayed), settle or compromise any
action, suit or proceeding or consent to the entry of any judgment.
Notwithstanding the foregoing, if the Indemnifying Party has delivered
a written notice to the Indemnified Party to the effect that the
Indemnifying Party disputes its potential liability to the Indemnified
Party under this Agreement and if such dispute is resolved in favor of
the Indemnifying Party pursuant to the procedures set forth herein,
the Indemnifying Party will not be required to bear the costs and
expenses of the Indemnified Party's defense pursuant to this Section
7.3(c) or of the Indemnifying Party's participation therein at the
Indemnified Party's request and the Indemnified Party will reimburse
the Indemnifying Party in full for all costs and expenses of such
litigation. The Indemnifying Party may participate in, but not
control, any defense or settlement controlled by the Indemnified Party
pursuant to this Section 7.3(c), and the Indemnifying Party will bear
its own costs and expenses with respect to such participation.
(iv) If, from time to time, an Indemnified Party should have any
claim against an Indemnifying Party hereunder which does not involve a
Third-Party Claim, or should have knowledge of facts which could give
rise to such a claim, the Indemnified Party will transmit to the
Indemnifying Party a written notice (the "Indemnity Notice")
describing in reasonable detail the nature of the claim, an estimate
of the amount of Adverse Consequences attributable to such claim and
the basis of the Indemnified Party's request for indemnification under
this Agreement. If the Indemnifying Party does not notify the
Indemnified Party within thirty (30) days from its receipt of the
Indemnity Notice that the Indemnifying Party disputes such claim, the
claim specified by the Indemnified Party in the Indemnity Notice will
be deemed a liability of the Indemnifying Party hereunder.
(v) Except as specified below, payments of all amounts owing by
the Indemnifying Party pursuant to this Agreement will be made within
ten (10) days after the latest of (A) the effective date of the
settlement of the Third-Party Claim, (B) the date an adjudication of
such Third-Party Claim becomes final and nonappealable or (C) the date
a final decision regarding the Indemnifying Party's liability to the
Indemnified Party under this Agreement is rendered. Payments of all
amounts owing by the Indemnifying Party pursuant to Section 7.3(c)(iv)
will be made within ten (10) days after the later of (1) the
expiration of the thirty (30) day Indemnity Notice period or (2) the
date a final decision on the
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Indemnifying Party's liability to the Indemnified Party under this
Agreement is rendered pursuant to the procedures set forth herein.
(d) ADJUSTMENT TO PURCHASE PRICE. All indemnification payments under
this Section 7.3 shall be deemed to be adjustments to the Purchase Price.
(e) EXCLUSIVE REMEDY. This Section 7.3 sets forth the exclusive
post-Closing remedy of the parties hereto in respect of matters covered by
this Section 7.3, except as otherwise expressly contemplated by this
Agreement, including Sections 4.12(b) and 4.16.
7.4 WAIVER. Prior to the Closing, any provision of this Agreement may be
(a) waived by the party benefited by the provision or by both parties or (b) if
approved by their respective boards of directors amended or modified at any time
(including the structure of the transaction) by an agreement in writing between
the parties hereto.
7.5 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.
7.6 GOVERNING LAW: VENUE. This Agreement shall be governed by, and
interpreted in accordance with, the laws of the State of California (however,
not to the exclusion of any applicable Federal law), without regard to
California statutes or judicial decisions regarding choice of law questions. Any
dispute hereunder shall be heard in the United States District Court for the
Central District of California. The parties hereto agree to exclusive venue and
personal jurisdiction in such Court, unless for any reason the Federal Court
should lack jurisdiction over the action, in which case exclusive venue and
jurisdiction shall be in the state courts in Orange County, California. The
prevailing party shall be entitled to recover all reasonable costs and expenses,
including attorneys' fees, incurred in connection with such suit.
7.7 EXPENSES. Each party hereto will bear all expenses incurred by it in
connection with this Agreement and the transactions contemplated hereby.
7.8 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, facsimile or registered mail (upon
receipt) to such party at its address set forth below or to such other address
as such party may specify by notice to the other party hereto. If to Seller, to:
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Standard Pacific Corp.
0000 Xxxx XxxXxxxxx Xxxx.
Xxxxx Xxxx, Xxxxxxxxxx 00000
Facsimile No.: (000) 000-0000
Attention: Xxxxxx X. Xxxxxxxx
with a copy to:
Xxxxxx, Xxxx & Xxxxxxxx LLP
Xxxx Xxxx Xxxxx, Xxxxx 0000
Xxxxxx, Xxxxxxxxxx 00000-0000
Facsimile No.: (000) 000-0000
Attention: Xxxxxx X. Xxxx
If to FACO, to:
First Alliance Corporation
00000 Xxx Xxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxx 00000-0000
Facsimile No.: (000) 000-0000
Attention: Xxxx X. Xxxxx
and Xxxxx X. Xxxxxxx
with a copy to:
Xxxxxxxx & Xxxxxxxx
000 Xxxxx Xxxxxx Xxxxxx, 00" Xxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Facsimile No.: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxx
7.9 ENTIRE AGREEMENT. This Agreement represents the entire understanding of
the parties hereto with respect to the transactions contemplated hereby and
supersedes any and all other oral or written agreements heretofore made. Nothing
in this Agreement is intended to confer upon any other person any rights or
remedies of any nature whatsoever under or by reason of this Agreement.
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7.10 BINDING EFFECT: ASSIGNMENt. This Agreement shall be binding upon and
shall inure to the benefit of the parties hereto and their respective successors
and assigns; PROVIDED, however, this Agreement may not be assigned by any party
hereto without the written consent of the other parties.
7.11 SEVERABILITY. If any provision of this Agreement or the application of
any such provision to any person or circumstance shall be held invalid, illegal
or unenforceable in any respect by a court of competent jurisdiction, such
invalidity, illegality or unenforceability shall not affect any other provision
hereof.
7.12 NO THIRD PARTY BENEFICIARIES. This Agreement is made solely for the
benefit of the parties to this Agreement and their respective successors and
permitted assigns, and no other person or entity shall have or acquire any right
by virtue of this Agreement.
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IN WITNESS WHEREOF, the undersigned have duly executed this Agreement as of
the date first above written.
FIRST ALLIANCE CORPORATION
By /s/ Xxxx X. Xxxxx
----------------------------
Name: Xxxx X. Xxxxx
Title: Executive Vice President and
Chief Financial Officer
STANDARD PACIFIC CORP.
By
----------------------------
Name: Xxxxxx X. Xxxxxx
Title: Vice President Finance
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IN WITNESS WHEREOF, the undersigned have duly executed this Agreement as of
the date first above written.
FIRST ALLIANCE CORPORATION
By
----------------------------
Name: Xxxx X. Xxxxx
Title: Executive Vice President and
Chief Financial Officer
STANDARD PACIFIC CORP.
By /s/ Xxxxxx X. Xxxxxx
----------------------------
Name: Xxxxxx X. Xxxxxx
Title: Vice President Finance
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