EXHIBIT A
STOCK OPTION AGREEMENT
STOCK OPTION AGREEMENT, dated December 16, 1997, between
Alliance Bancorp, a Delaware corporation ("Grantee") and
Southwest Bancshares, Inc. ("Issuer"), a Delaware corporation.
W I T N E S S E T H:
WHEREAS, Grantee and Issuer have entered into an Agreement
and Plan of Merger dated December 16, 1997 (the "Merger
Agreement"), which agreement has been executed by the parties
hereto prior to this Agreement; and
WHEREAS, as a condition to Grantee's entering into the
Merger Agreement and in consideration therefor, Issuer has agreed
to grant Grantee the Option (as hereinafter defined):
NOW, THEREFORE. in consideration of the foregoing and the
mutual covenants and agreements set forth herein and in the
Merger Agreement, the parties hereto agree as follows:
1. (a) Issuer hereby grants to Grantee an unconditional,
irrevocable option (the "Option") to purchase, subject to the
terms hereof, up to 297,471 fully paid and nonassessable shares
of its common stock, par value $0.01 per share ("Common Stock"),
at a price of $25.50 per share (such price, as adjusted if
applicable, the "Option Price"); provided, however, that in the
event Issuer issues or agrees to issue any shares of Common Stock
(other than as permitted under the Merger Agreement) at a price
less than $25.50 per share, such Option Price shall be equal to
such lesser price. The number of shares of Common Stock that may
be received upon the exercise of the Option and the Option Price
are subject to adjustment as herein set forth.
(b) In the event that any additional shares of Common Stock
are issued or otherwise become outstanding after the date of this
Agreement (other than pursuant to this Agreement), the number of
shares of Common Stock subject to the Option shall be increased
so that, after such issuance, it equals 9.9% of the number of
shares of Common Stock then issued and outstanding, giving effect
to any shares subject or issued pursuant to the Option. Nothing
contained in this Section 1(b) or elsewhere in this Agreement
shall be deemed to authorize Issuer or Grantee to breach any
provision of the Merger Agreement.
2. (a) The holder or holders of the Option (including
Grantee or any subsequent transferee(s)) (the "Holder") may
exercise the Option, in whole or part, if, but only if, both an
Initial Triggering Event (as hereinafter defined) and a
Subsequent Triggering Event (as hereinafter defined) shall have
occurred prior to the occurrence of an Exercise Termination Event
(as hereinafter defined), provided that the Holder shall have
sent the written notice of such exercise (as provided in
subsection (e) of this Section 2) within 180 days following the
first such Subsequent Triggering Event. Each of the following
shall be an Exercise Termination Event: (i) the Company Merger
Effective Time (as defined in the Merger Agreement); (ii)
termination of the Merger Agreement in
accordance with the provisions thereof if such termination occurs
prior to the occurrence of an Initial Triggering Event; or (iii)
the passage of twelve months after termination of the Merger
Agreement if such termination follows or occurs at the same time
as the occurrence of an Initial Triggering Event.
(b) The term "Initial Triggering Event" shall mean any of
the following events or transactions occurring after the date
hereof:
(i) Issuer or any of its Subsidiaries (each an "Issuer
Subsidiary"), without having received Grantee's prior written
consent, shall have entered into an agreement to engage in an
Acquisition Transaction (as hereinafter defined) with any person
(the term "person" for purposes of this Agreement having the
meaning assigned thereto in Sections 3(a)(9) and 13(d)(3) of the
Securities Exchange Act of 1934, and the rules and regulations
thereunder (the "1934 Act")) other than Grantee or any of its
Subsidiaries (each a "Grantee Subsidiary"). For purposes of this
Agreement, "Acquisition Transaction" shall mean (x) a merger or
consolidation, or any similar transaction, involving Issuer or
any Significant Subsidiary (as defined in Rule 1-02 of Regulation
S-X promulgated by the SEC) of Issuer, (y) a purchase, lease or
other acquisition of all or substantially all of the assets of
Issuer or any Significant Subsidiary of Issuer, or (z) a purchase
or other acquisition (including by way of merger, consolidation,
share exchange or otherwise) of beneficial ownership of
securities representing 25% or more of the voting power of Issuer
or any Significant Subsidiary of Issuer, provided that the term
"Acquisition Transaction" does not include any internal merger or
consolidation involving only Issuer and/or Issuer Subsidiaries;
(ii) (A) Any person other than Grantee, or any Grantee
Subsidiary, or any Issuer Subsidiary acting in a fiduciary
capacity (collectively, "Excluded Persons"), alone or together
with such person's affiliates and associates (as such terms are
defined in Rule 12b-2 under the 0000 Xxx) shall have acquired
beneficial ownership or the right to acquire beneficial ownership
of 25% or more of the outstanding shares of Common Stock (the
term "beneficial ownership" for purposes of this Option Agreement
having the meaning assigned thereto in Section 13(d) of the 1934
Act, and the rules and regulations thereunder) or (B) any group
(as such term is defined in Section 13(d)(3) of the 1934 Act),
other than a group of which only Excluded Persons are members,
shall have been formed that beneficially owns 25% or more of the
shares of Common Stock then outstanding;
(iii) Any person other than Grantee or any Grantee
Subsidiary shall have made a bona fide proposal to Issuer or its
shareholders by public announcement or written communication that
is or becomes the subject of public disclosure to (A) engage in
an Acquisition Transaction or (B) commence a tender or exchange
offer the consummation of which would result in such person
acquiring beneficial ownership of securities representing 25% or
more of Issuer's voting power;
(iv) The Board of Directors of Issuer shall have failed
to recommend to its stockholders the adoption of the Merger
Agreement or shall have withdrawn, modified or changed its
recommendation in a manner adverse to Grantee;
(v) After a proposal is made by a third party (other
than an Excluded Person) to Issuer to engage in an Acquisition
Transaction, Issuer shall have intentionally and knowingly
breached any representation, warranty, covenant or agreement
contained in the Merger Agreement and such breach (x) would
entitle Grantee to terminate the Merger Agreement pursuant to
Section 7.01(b) therein (without regard to any grace period
provided for therein) and (y) shall not have been cured prior to
the Notice Date (as defined below); or
(vi) Any person other than Grantee or any Grantee
Subsidiary, other than in connection with a transaction to which
Grantee has given its prior written consent, shall have filed an
application or notice with the Office of Thrift Supervision
("OTS") or other federal or state bank regulatory authority, for
approval to engage in an Acquisition Transaction.
(c) The term "Subsequent Triggering Event" shall mean
either of the following events or transactions occurring after
the date hereof:
(i) The acquisition by any person other than an
Excluded Person of beneficial ownership of 25% or more of the
then outstanding Common Stock; or
(ii) The occurrence of the Initial Triggering Event
described in subparagraph (i) of subsection (b) of this Section
2.
(d) Issuer shall notify Grantee promptly in writing of the
occurrence of any Initial Triggering Event or Subsequent
Triggering Event (together, a "Triggering Event"), it being
understood that the giving of such notice by Issuer shall not be
a condition to the right of the Holder to exercise the Option.
(e) In the event the Holder is entitled to and wishes to
exercise the Option, it shall send to Issuer a written notice
(the date of which is herein referred to as the "Notice Date")
specifying (i) the total number of shares it will purchase
pursuant to such exercise and (ii) a place and date not earlier
than three business days nor later than 60 business days from the
Notice Date for the closing of such purchase (the "Closing
Date"); provided that if prior notification to or approval of the
OTS or any other regulatory agency is required in connection with
such purchase, the Holder shall promptly file the required notice
or application for approval and shall expeditiously process the
same and the period of time that otherwise would run pursuant to
this sentence shall run instead from the date on which any
required notification periods have expired or been terminated or
such approvals have been obtained and any requisite waiting
period or periods shall have passed. Any exercise of the Option
shall be deemed to occur on the Notice Date relating thereto.
(f) At each closing referred to in subsection (e) of this
Section 2, the Holder shall pay to Issuer the aggregate purchase
price for the shares of Common Stock purchased pursuant to the
exercise of the Option in immediately available funds by wire
transfer to a bank account designated by Issuer, provided that
failure or refusal of Issuer to designate such a bank account
shall not preclude the Holder from exercising the Option.
(g) At such closing, simultaneously with the delivery of
immediately available funds as provided in subsection (f) of this
Section 2, Issuer shall deliver to the Holder a certificate or
certificates representing the number of shares of Common Stock
purchased by the Holder and, if the Option should be exercised in
part only, a new Option evidencing the rights of the Holder
thereof to purchase the balance of the shares purchasable
hereunder.
(h) Certificates for Common Stock delivered at a closing
hereunder may be endorsed with a restrictive legend that shall
read substantially as follows:
"The transfer of the shares represented by this
certificate is subject to certain provisions of an agreement
between the registered holder hereof and Issuer and to resale
restrictions arising under the Securities Act of 1933, as
amended. A copy of such agreement is on file at the principal
office of Issuer and will be provided to the holder hereof
without charge upon receipt by Issuer of a written request
therefor. "
It is understood and agreed that: (i) the reference to the resale
restrictions of the Securities Act of 1933 ("1933 Act") in the
above legend shall be removed by delivery of substitute
certificate(s) without such reference if the Holder shall have
delivered to Issuer a copy of a letter from the staff of the SEC,
or an opinion of counsel, in form and substance satisfactory to
Issuer, to the effect that such legend is not required for
purposes of the 1933 Act; (ii) the reference to the provisions of
this Agreement in the above legend shall be removed by delivery
of substitute certificate(s) without such reference if the shares
have been sold or transferred in compliance with the provisions
of this Agreement and under circumstances that do not require the
retention of such reference; and (iii) the legend shall be
removed in its entirety if the conditions in the preceding
clauses (i) and (ii) are both satisfied. In addition, such
certificates shall bear any other legend as may be required by
law.
(i) Upon the giving by the Holder to Issuer of the written
notice of exercise of the Option provided for under subsection
(e) of this Section 2 and the tender of the applicable purchase
price in immediately available funds, the Holder shall be deemed
to be the holder of record of the shares of Common Stock issuable
upon such exercise, notwithstanding that the stock transfer books
of Issuer shall then be closed or that certificates representing
such shares of Common Stock shall not then be actually delivered
to the Holder. Issuer shall pay all expenses, and any and all
United States federal, state and local taxes and other charges
that may be payable in connection with the preparation, issue and
delivery of stock certificates under this Section 2 in the name
of the Holder or its assignee, transferee or designee.
3. Issuer agrees: (i) that it shall at all times maintain,
free from preemptive rights, sufficient authorized but unissued
or treasury shares of Common Stock so that the Option may be
exercised without additional authorization of Common Stock after
giving effect to all other options, warrants, convertible
securities and other rights to purchase Common Stock; (ii) that
it will not, by charter amendment or through reorganization,
consolidation, merger, dissolution or sale of assets, or by any
other voluntary act, avoid or seek to avoid the observance or
performance of any of the covenants, stipulations or conditions
to be observed or performed hereunder by Issuer; (iii) promptly
to take all action as may from time to time be required
(including (x) complying with all premerger notification,
reporting and waiting period requirements specified in 15 U.S.C.
Section 18a and regulations promulgated thereunder and (y) in the
event, under the Home Owners' Loan Act, as amended ("HOLA"), or
the Change in Bank Control Act of 1978, as amended, or any state
banking law, prior approval of or notice to the OTS, or to any
state regulatory authority is necessary before the Option may be
exercised, cooperating fully with the Holder in preparing such
applications or notices and providing such information to the OTS
or such state regulatory authority as they may require) in order
to permit the Holder to exercise the Option and Issuer duly and
effectively to issue shares of Common Stock pursuant hereto; and
(iv) promptly to take all action provided herein to protect the
rights of the Holder against dilution.
4. This Agreement (and the Option granted hereby) are
exchangeable, without expense, at the option of the Holder, upon
presentation and surrender of this Agreement at the principal
office of Issuer, for other Agreements providing for Options of
different denominations entitling the holder thereof to purchase,
on the same terms and subject to the same conditions as are set
forth herein, in the aggregate the same number of shares of
Common Stock purchasable hereunder. The terms "Agreement" and
"Option" as used herein include any Stock Option Agreements and
related Options for which this Agreement (and the Option granted
hereby) may be exchanged. Upon receipt by Issuer of evidence
reasonably satisfactory to it of the loss, theft, destruction or
mutilation of this Agreement, and (in the case of loss, theft or
destruction) of reasonably satisfactory indemnification, and upon
surrender and cancellation of this Agreement if mutilated, Issuer
will execute and deliver a new Agreement of like tenor and date.
Any such new Agreement executed and delivered shall constitute an
additional contractual obligation on the part of Issuer, whether
or not the Agreement so lost, stolen, destroyed or mutilated
shall at any time be enforceable by anyone.
5. In addition to the adjustment in the number of shares
of Common Stock that are purchasable upon exercise of the Option
pursuant to Section 1 of this Agreement, in the event of any
change in Common Stock by reason of stock dividends, split-ups,
mergers, recapitalizations, combinations, subdivisions,
conversions, exchanges of shares, distributions, or the like, the
type and number, and/or the price, of shares of Common Stock
purchasable upon exercise hereof shall be appropriately adjusted,
and proper provision shall be made in the agreements governing
such transaction so that the Holder shall receive, upon exercise
of the Option, the number and class of shares or other securities
or property that Holder would have received in respect of the
Common Stock if the Option had been exercised immediately prior
to such event, or the record date therefor, as applicable.
6. Upon the occurrence of a Subsequent Triggering Event
that occurs prior to an Exercise Termination Event, Issuer
(including any successor thereto) shall, at the request of the
Holder delivered at the time of and together with a written
notice of exercise in accordance with Section 2(e) hereof
(whether on its own behalf or on behalf of any subsequent holder
of this Option (or part thereof) or any of the shares of Common
Stock issued pursuant hereto), promptly prepare, file and keep
current a shelf registration statement under the 1933 Act
covering any shares issued or issuable pursuant to this Option
and shall use its best efforts to cause such registration
statement to become effective and remain current in order to
permit the sale or other disposition of any shares of Common
Stock issued upon total or partial exercise of this Option
("Option Shares") in accordance with any plan of disposition
requested by the Holder. Issuer will use its best efforts to
cause such registration statement first to become effective and
then to remain effective for such period not in excess of 180
days from the day such registration statement first becomes
effective or such shorter time as may be reasonably necessary to
effect such sales or other dispositions. The Holder shall have
the right to demand not more than two such registrations under
this Agreement and all other agreements, for which this agreement
may be exchanged pursuant to Section 4 hereof; provided, however,
that Issuer shall be required to bear the expenses related only
to the first such registration, and the Holder shall bear such
expenses to the extent related to the second. The foregoing
notwithstanding, if, at the time of any request by the Holder for
registration of Option Shares as provided above, Issuer is in
registration with respect to an underwritten public offering of
shares of Common Stock, and if in the good faith judgment of the
managing underwriter or managing underwriters, or, if none, the
sole underwriter or underwriters, of such offering the inclusion
of the Holder's Option or Option Shares would interfere with the
successful marketing of the shares of Common Stock offered by
Issuer, the number of Option Shares otherwise to be covered in
the registration statement contemplated hereby may be reduced;
and provided, however, that if such reduction occurs, then the
Issuer shall file a registration statement for the balance as
promptly as practical and no reduction shall thereafter occur.
Each such Holder shall provide all information reasonably
requested by Issuer for inclusion in any registration statement
to be filed hereunder. If requested by any such Holder in
connection with such registration, Issuer shall become a party to
any underwriting agreement relating to the sale of such shares,
but only to the extent of obligating itself in respect of
representations, warranties, indemnities and other agreements
customarily included in such underwriting agreements for the
Issuer. Upon receiving any request under this Section 6 from any
Holder, Issuer agrees to send a copy thereof to any other person
known to Issuer to be entitled to registration rights under this
Section 6, in each case by promptly mailing the same, postage
prepaid, to the address of record of the persons entitled to
receive such copies.
7. (a) In the event that prior to an Exercise Termination
Event, Issuer shall enter into an agreement (i) to consolidate
with or merge into any person, other than Grantee or one of its
Subsidiaries, and shall not be the continuing or surviving
corporation of such consolidation or merger, (ii) to permit any
person, other than Grantee or one of its Subsidiaries, to merge
into Issuer and Issuer shall be the continuing or surviving
corporation, but, in connection with such merger, the then
outstanding shares of Common Stock shall be changed into or
exchanged for stock or other securities of any other person or
cash or any other property or the then outstanding shares of
Common Stock shall after such merger represent less than 50% of
the outstanding shares and share
equivalents of the merged company, or (iii) to sell or otherwise
transfer all or substantially all of its assets to any person,
other than Grantee or one of its Subsidiaries, then, and in each
such case, the agreement governing such transaction shall make
proper provision so that the Option shall, upon the consummation
of any such transaction and upon the terms and conditions set
forth herein, be converted into, or exchanged for, an option (the
"Substitute Option"), at the election of the Holder, of either
(x) the Acquiring Corporation (as hereinafter defined) or (y) any
person that controls the Acquiring Corporation.
(b) The following terms have the meanings indicated:
(1) "Acquiring Corporation" shall mean (i) the
continuing or surviving corporation of a consolidation or merger
with Issuer (if other than Issuer), (ii) Issuer in a merger in
which Issuer is the continuing or surviving person, and (iii) the
transferee of all or substantially all of Issuer's assets.
(2) "Substitute Common Stock" shall mean the shares of
capital stock (or similar equity interest) with the greatest
voting power with respect of the election of directors (or other
persons similarly responsible for direction of the business and
affairs) of the issuer of the Substitute Option.
(3) "Assigned Value" shall mean the highest of (i) the
price per share of Common Stock at which a tender offer or
exchange offer therefor has been made, (ii) the price per share
of Common Stock to be paid by any third party pursuant to an
agreement with Issuer, or (iii) in the event of a sale of all or
substantially all of Issuer's assets, the sum of the price paid
in such sale for such assets and the current market value of the
remaining assets of Issuer as determined by a nationally
recognized investment banking firm selected by the Holder,
divided by the number of shares of Common Stock of Issuer
outstanding at the time of such sale. In determining the
market/offer price, the value of consideration other than cash
shall be determined by a nationally recognized investment banking
firm selected by the Holder.
(4) "Average Price" shall mean the average closing
price of a share of the Substitute Common Stock for the six
months immediately preceding the consolidation, merger or sale in
question, but in no event higher than the closing price of the
shares of Substitute Common Stock on the day preceding such
consolidation, merger or sale; provided that if Issuer is the
issuer of the Substitute Option, the Average Price shall be
computed with respect to a share of Common Stock issued by the
person merging into Issuer or by any company which controls or is
controlled by such person, as the Holder may elect.
(c) The Substitute Option shall have the same terms and
conditions as the Option, provided, that if any term or condition
of the Substitute Option cannot, for legal reasons, be the same
as the Option, such term or condition shall be as similar as
possible and in no event less advantageous to the Holder. The
issuer of the Substitute Option shall also enter into an
agreement
with the then Holder or Holders of the Substitute Option in
substantially the same form as this Agreement, which shall be
applicable to the Substitute Option.
(d) The Substitute Option shall be exercisable for such
number of shares of Substitute Common Stock as is equal to (i)
the product of (A) the Assigned Value and (B) the number of
shares of Common Stock for which the Option is then exercisable,
divided by (ii) the Average Price. The exercise price of the
Substitute Option per share of Substitute Common Stock shall then
be equal to the Option Price multiplied by a fraction the
numerator of which shall be the number of shares of Common Stock
for which the Option is then exercisable and the denominator of
which shall be the number of shares of Substitute Common Stock
for which the Substitute Option is exercisable.
(e) In no event, pursuant to any of the foregoing
paragraphs, shall the Substitute Option be exercisable for more
than 9.9% of the shares of Substitute Common Stock outstanding
prior to exercise of the Substitute Option.
(f) Issuer shall not enter into any transaction described
in subsection (a) of this Section 7 unless the Acquiring
Corporation and any person that controls the Acquiring
Corporation assume in writing all the obligations of Issuer
hereunder.
8. The 180-day period for exercise of certain rights under
Sections 2 and 6 shall be extended: (i) to the extent necessary
to obtain all regulatory approvals for the exercise of such
rights, and for the expiration of all statutory waiting periods;
and (ii) to the extent necessary to avoid liability under Section
16(b) of the 1934 Act by reason of such exercise.
9. Repurchase at the Option of Holder. (a) At the
request of Holder at any time commencing upon the first
occurrence of a Repurchase Event (as defined in Section 9(d)) and
ending 12 months immediately thereafter, Issuer shall repurchase
from Holder (i) the Option and (ii) all shares of Issuer Common
Stock purchased by Holder pursuant hereto with respect to which
Holder then has beneficial ownership. The date on which Holder
exercises its rights under this Section 9 is referred to as the
"Request Date". Such repurchase shall be at an aggregate price
(the "Section 9 Repurchase Consideration") equal to the sum of:
(i) the aggregate Option Price paid by Holder
for any shares of Issuer Common Stock acquired pursuant to the
Option with respect to which Holder then has beneficial
ownership;
(ii) the excess, if any, of (x) the Applicable
Price (as defined below) for each share of Common Stock over (y)
the Option Price (subject to adjustment pursuant to Sections 1
and 5), multiplied by the number of shares of Common Stock with
respect to which the Option has not been exercised; and
(iii) the excess, if any, of the Applicable
Price over the Option Price (subject to adjustment pursuant to
Sections 1 and 5) paid (or, in the case of Option Shares with
respect to which the Option has been exercised but the Closing
Date has not occurred, payable) by Holder for each
share of Common Stock with respect to which the Option has been
exercised and with respect to which Holder then has beneficial
ownership, multiplied by the number of such shares.
(b) If Holder exercises its rights under this Section
9, Issuer shall, within 10 business days after the Request Date,
pay the Section 9 Repurchase Consideration to Holder in
immediately available funds, and contemporaneously with such
payment, Holder shall surrender to Issuer the Option and the
certificates evidencing the shares of Common Stock purchased
thereunder with respect to which Holder then has beneficial
ownership, and Holder shall warrant that it has sole record and
beneficial ownership of such shares and that the same are then
free and clear of all liens. Notwithstanding the foregoing, to
the extent that prior notification to or approval of any federal
or state regulatory authority is required in connection with the
payment of all or any portion of the Section 9 Repurchase
Consideration, Holder shall have the ongoing option to revoke its
request for repurchase pursuant to Section 9, in whole or in
part, or to require that Issuer deliver from time to time that
portion of the Section 9 Repurchase Consideration that it is not
then so prohibited from paying and promptly file the required
notice or application for approval and expeditiously process the
same (and each party shall cooperate with the other in the filing
of any such notice or application and the obtaining of any such
approval). If any federal or state regulatory authority
disapproves of any part of Issuer's proposed repurchase pursuant
to this Section 9, Issuer shall promptly give notice of such fact
to Holder. If any federal or state regulatory authority
prohibits the repurchase in part but not in whole, then Holder
shall have the right (i) to revoke the repurchase request or (ii)
to the extent permitted by such regulatory authority, determine
whether the repurchase should apply to the Option and/or Option
Shares and to what extent to each, and Holder shall thereupon
have the right to exercise the Option as to the number of Option
Shares for which the Option was exercisable at the Request Date
less the sum of the number of shares covered by the Option in
respect of which payment has been made pursuant to Section
9(a)(ii) and the number of shares covered by the portion of the
Option (if any) that has been repurchased. Holder shall notify
Issuer of its determination under the preceding sentence within
five (5) business days of receipt of notice of disapproval of the
repurchase.
Notwithstanding anything herein to the contrary, all of
Holder's rights under this Section 9 shall terminate on the date
of termination of this Option pursuant to Section 2(a).
(c) For purposes of this Agreement, the "Applicable
Price" means the highest of (i) the highest price per share of
Common Stock paid for any such share by the person or groups
described in Section 9(d)(i), (ii) the price per share of Common
Stock received by holders of Common Stock in connection with any
merger or other business combination transaction described in
Section 7(a)(i), 7(a)(ii) or 7(a)(iii), or (iii) the highest
closing sales price per share of Issuer Common Stock quoted on
the Nasdaq National Market System (or if Issuer Common Stock is
not quoted on the Nasdaq National Market System, the highest bid
price per share as quoted on the principal trading market or
securities exchange on which such shares are traded as reported
by a recognized source chosen by Holder) during the 40 business
days preceding the Request Date; provided, however, that in the
event of a sale of less than all of Issuer's assets, the
Applicable Price shall be the sum of the price paid in such sale
for such assets and the current market value of the
remaining assets of Issuer as determined by a nationally
recognized investment banking firm selected by Holder, divided by
the number of shares of Common Stock outstanding at the time of
such sale. If the consideration to be offered, paid or received
pursuant to either of the foregoing clauses (i) or (ii) shall be
other than in cash, the value of such consideration shall be
determined in good faith by an independent nationally recognized
investment banking firm selected by Holder and reasonably
acceptable to Issuer, which determination shall be conclusive for
all purposes of this Agreement.
(d) As used herein, "Repurchase Event" shall occur if
(i) any person (other than Grantee or any subsidiary of Grantee)
shall have acquired beneficial ownership of (as such term is
defined in Rule 13d-3 promulgated under the Exchange Act), or the
right to acquire beneficial ownership of, or any "group" (as such
term is defined under the Exchange Act) shall have been formed
which beneficially owns or has the right to acquire beneficial
ownership of, 50% or more of the then outstanding shares of
Issuer Common Stock, or (ii) any of the transactions described in
Section 7(a)(i), 7(a)(ii) or 7(a)(iii) shall be consummated.
10. Issuer hereby represents and warrants to Grantee as
follows:
(a) Issuer has full corporate power and authority to
execute and deliver this Agreement and to consummate the
transactions contemplated hereby. The execution and delivery of
this Agreement and the consummation of the transactions
contemplated hereby have been duly and validly authorized by the
Board of Directors of Issuer and no other corporate proceedings
on the part of Issuer are necessary to authorize this Agreement
or to consummate the transactions so contemplated. This
Agreement has been duly and validly executed and delivered by
Issuer. This Agreement is the valid and legally binding
obligation of Issuer.
(b) Issuer has taken all necessary corporate action to
authorize and reserve and to permit it to issue, and at all times
from the date hereof through the termination of this Agreement in
accordance with its terms will have reserved for issuance upon
the exercise of the Option, that number of shares of Common Stock
equal to the maximum number of shares of Common Stock at any time
and from time to time issuable hereunder, and all such shares,
upon issuance pursuant hereto, will be duly authorized, validly
issued, fully paid, nonassessable, and will be delivered free and
clear of all claims, liens, encumbrance and security interests
and not subject to any preemptive rights.
(c) Issuer has taken all necessary action to exempt this
Agreement, and the transactions contemplated hereby and thereby
from, and this Agreement and the transactions contemplated hereby
and thereby are exempt from, (i) any applicable state takeover
laws, (ii) any state laws limiting or restricting the voting
rights of stockholders and (iii) any provision in its or any of
its subsidiaries' articles of incorporation, certificate of
incorporation, charter or bylaws restricting or limiting stock
ownership or the voting rights of stockholders.
(d) The execution, delivery and performance of this
Agreement does not or will not, and the consummation by Issuer of
any of the transactions contemplated hereby will not, constitute
or result in (i) a breach or violation of, or a default under,
its certificate of incorporation or bylaws, or the comparable
governing instruments of any of its subsidiaries, or (ii) a
breach or violation of, or a default under, any agreement, lease,
contract, note, mortgage, indenture, arrangement or other
obligation of it or any of its subsidiaries (with or without the
giving of notice, the lapse of time or both) or under any law,
rule, ordinance or regulation or judgment, decree, order, award
or governmental or nongovernmental permit or license to which it
or any of its subsidiaries is subject, that would, in any case
referred to in this clause (ii), give any other person the
ability to prevent or enjoin Issuer's performance under this
Agreement in any material respect.
11. Grantee hereby represents and warrants to Issuer that:
(a) Grantee has full corporate power and authority to enter
into this Agreement and, subject to any approvals or consents
referred to herein, to consummate the transactions contemplated
hereby. The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby have been
duly authorized by all necessary corporate action on the part of
Grantee. This Agreement has been duly executed and delivered by
Grantee.
(b) This Option is not being acquired with a view to the
public distribution thereof and neither this Option nor any
Option Shares will be transferred or otherwise disposed of except
in a transaction registered or exempt from registration under
applicable federal and state securities laws and regulations.
12. Neither of the parties hereto may assign any of its
rights or obligations under this Option Agreement or the Option
created hereunder to any other person, without the express
written consent of the other party, except (i) to any wholly-
owned Subsidiary or (ii) that in the event a Subsequent
Triggering Event shall have occurred prior to an Exercise
Termination Event, Grantee, subject to the express provisions
hereof, may assign in whole or in part its rights and obligations
hereunder to one or more transferees.
13. Each of Grantee and Issuer will use its best efforts to
make all filings with, and to obtain consents of all third
parties and governmental authorities necessary to the
consummation of the transactions contemplated by this Agreement.
14. Notwithstanding anything to the contrary herein, in the
event that the Holder or any Related Person thereof is a person
making an offer or proposal to engage in an Acquisition
Transaction (other than the transactions contemplated by the
Merger Agreement), then in the case of a Holder or any Related
Person thereof, the Option held by it shall immediately terminate
and be of no further force or effect. A Related Person of a
Holder means any Affiliate (as defined in Rule 12b-2 of the rules
and regulations under the 0000 Xxx) of the Holder and any person
that is the beneficial owner of 20% or more of the voting power
of the Holder.
15. The parties hereto acknowledge that damages would be an
inadequate remedy for a breach of this Agreement by either party
hereto and that the obligations of the parties hereto shall be
enforceable by either party hereto through injunctive or other
equitable relief.
16. If any term, provision, covenant or restriction
contained in this Agreement is held by a court or a federal or
state regulatory agency of competent jurisdiction to be invalid,
void or unenforceable, the remainder of the terms, provisions and
covenants and restrictions contained in this Agreement shall
remain in full force and effect, and shall in no way be affected,
impaired or invalidated. If for any reason such court or
regulatory agency determines that the Holder is not permitted to
acquire the full number of shares of Common Stock provided in
Section 1(a) hereof (as adjusted pursuant to Section 1(b) or
Section 5 hereof), it is the express intention of Issuer to allow
the Holder to acquire such lesser number of shares as may be
permissible, without any amendment or modification hereof.
17. All notices, requests, claims, demands and other
communications hereunder shall be deemed to have been duly given
when delivered in person, by cable, telegram, telecopy or telex,
or by registered or certified mail (postage prepaid, return
receipt requested) at the respective addresses of the parties set
forth in the Merger Agreement.
18. This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware, regardless of
the laws that might otherwise govern under applicable principles
of conflicts of laws thereof.
19. This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original,
but all of which shall constitute one and the same agreement.
20. Except as otherwise expressly provided herein, each of
the parties hereto shall bear and pay all costs and expenses
incurred by it or on its behalf in connection with the
transactions contemplated hereunder, including fees and expenses
of its own financial consultants, investment bankers, accountants
and counsel. Notwithstanding anything to the contrary contained
herein or in the Merger Agreement, in the event a Subsequent
Triggering Event shall occur prior to an Exercise Termination
Event, Issuer shall pay to Grantee upon demand the amount of the
expenses incurred by Grantee in connection with this Agreement
and the Merger Agreement and the transactions contemplated hereby
and thereby.
21. Except as otherwise expressly provided herein, or in
the Merger Agreement, this Agreement contains the entire
agreement between the parties with respect to the transactions
contemplated hereunder and supersedes all prior arrangements or
understandings with respect thereof, written or oral. The terms
and conditions of this Agreement shall inure to the benefit of
and be binding upon the parties hereto and their respective
successors and permitted assigns. Nothing in this Agreement,
expressed or implied, is intended to confer upon any party, other
than the parties hereto, and their respective successors and, as
permitted herein, assignees, any rights, remedies, obligations or
liabilities under or by reason of this Agreement, except as
expressly provided herein.
22. Capitalized terms used in this Agreement and not
defined herein shall have the meanings assigned thereto in the
Merger Agreement.
IN WITNESS WHEREOF, each of the parties has caused this
Agreement to be executed on its behalf by its officers, all as of
the date first above written.
ALLIANCE BANCORP
BY: /s/ Xxxxxxx X. Xxxx
------------------------------
Xxxxxxx X. Xxxx
Chairman of the Board
SOUTHWEST BANCSHARES, INC.
BY: /s/ Xxxxxxx X. Xxxxxx
------------------------------
Xxxxxxx X. Xxxxxx
President and Chief Financial
Officer
