Exhibit 1
STOCK PURCHASE AGREEMENT, dated as of December 31, 1996 (hereinafter,
together with the Annexes hereto, referred to as "this Agreement"), between Argo
Bancorp, Inc., a corporation organized under the laws of the State of Delaware
(the "Company"), and The Deltec Banking Corporation Limited, a banking
corporation organized under the laws of the Commonwealth of the Bahamas (the
"Buyer").
W I T N E S S E T H:
WHEREAS, the Office of Thrift Supervision ("OTS") has accepted a
Rebuttal of Control Submission filed by Deltec International S.A., a Panamanian
corporation ("Deltec"), and has signed a Rebuttal Agreement with Deltec and
related parties permitting Deltec to acquire, through the Buyer, 25% of the
outstanding voting stock of the Company;
NOW, THEREFORE, in consideration of the premises and the
representations, warranties and agreements contained herein, the Company and the
Buyer hereby agree as follows:
ARTICLE 1
PURCHASE AND SALE
1.1. Purchase and Sale. On the basis of the representations, warranties
and agreements herein contained, but subject to the terms and conditions set
forth herein, the Company agrees to issue and sell to the Buyer, and the Buyer
agrees to purchase from the Company, at a purchase price of $38.00 per share, an
aggregate of 111,563 2/3 shares (the "Shares") of the Company's original common
stock, par value $0.01 per share (the Common Stock"), or an aggregate
consideration equal to $4,239,419.34.
1.2. Closing. The Company will deliver to the Buyer the certificates
for the Shares, registered in the name of "The Deltec Banking Corporation
Limited" and in such denominations (including fractional shares) as may be
requested by the Buyer, against payment of the purchase price by wire transfer
of New York Clearing House funds to the Company's Account #409278 at Mid City
National Bank of Chicago, ABA #000000000, on December 31, 1996 or such other
date as the Buyer and the Company may agree (the "Closing Date"). The
certificates for the Shares and other documents to be delivered by the Company
shall be delivered at the offices of Xxxxxxxx & Xxxxxxxx, 000 Xxxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx 00000, who shall hold the certificates in escrow for delivery to
the Buyer against payment therefor. The Buyer shall have the right to rescind
this Agreement unless an amended Rebuttal Agreement satisfactory to the Buyer
has been executed by the OTS within 60 days after the execution and delivery of
this Agreement or such later date as may be mutually agreed by the parties
hereto.
1.3. Stockholder Agreement. At the Closing, the Company and the Buyer
will enter into the Stockholder Agreement, dated as of the Closing Date, in
substantially the form attached hereto as Annex 1 (the "Stockholder Agreement").
1.4. Use of Proceeds. The Company will use the proceeds from the sale
of the Shares to maintain regulatory capital at well capitalized levels at a
subsidiary following growth of the subsidiary through its purchase of mortgage
pools prior to year-end 1996.
Page 14 of 27 Pages
ARTICLE 2
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to the Buyer, that, except as
specifically disclosed in a letter of the Company delivered to the Buyer prior
to or on the date hereof (the "Disclosure Letter") (and making specific
reference to the Section of this Agreement for which an exception is taken):
2.1. Incorporation, Capitalization, Etc. The Company has been duly
incorporated, is validly existing as a corporation in good standing under the
laws of the State of Delaware and is duly qualified to do business as a foreign
corporation in all jurisdictions where such qualification is required. The
Company has the authority to issue 5,000,000 shares of the par value $0.01 per
share, of which 4,500,000 shares are common stock and 500,000 shares are serial
preferred stock. The Company's authorized common stock consists of 3,020,000
shares designated as original common stock, 340,000 shares designated as Class B
common stock, 340,000 shares designated as Class C common stock and 800,000
shares designated as Class D common stock, of which 334,691 shares designated as
original common stock have been issued and no shares of Class B common stock,
Class C common stock or Class D common stock have ever been issued or authorized
to be issued. No shares of serial preferred stock have ever been issued or
authorized to be issued. All outstanding shares of Common Stock have been duly
authorized and validly issued and are fully paid and nonassessable, and when
issued to the Buyer in accordance with this Agreement the Shares will be duly
authorized, validly issued, fully paid and nonassessable. The Company does not
have any shares of its capital stock of any class reserved for issuance for any
purpose, including for any outstanding option, warrant, call or commitment, nor
does the Company have any outstanding securities, obligations or agreements
convertible into or exchangeable for, or giving any person any right (including,
without limitation, preemptive rights) to subscribe for or acquire, any shares
of its capital stock, except for stock options to purchase not more than 202,259
shares of Common Stock pursuant to Company plans. The Company is a savings and
loan holding company duly registered with the OTS under Section 10 of the Home
Owners' Loan Act, as amended.
2.2. Subsidiaries. The Company owns of record and beneficially all of
the capital stock of Argo Federal Savings Bank, F.S.B. (the "Bank") and On-Line
Financial Services, Inc. ("On-Line") and is the managing member of Empire/Argo
Mortgage LLC ("Empire", and together with the Bank and On-Line, the
"Subsidiaries"). The Company has delivered to the Buyer a true and complete list
of all of its subsidiaries other than the Subsidiaries and of all other entities
(whether corporations, partnerships, trusts, limited liability companies or
other entities) in which the Company owns, directly or indirectly, 10% or more
of the ownership interests. Each of the Subsidiaries has been duly incorporated,
is validly existing as a corporation or limited liability company, as the case
may be, in good standing under the laws of the jurisdiction of its incorporation
and is duly qualified to do business as a foreign corporation or foreign limited
liability company, as the case may be, in all jurisdictions where such
qualification is required. All outstanding shares of capital stock of the
Subsidiaries have been duly authorized and validly issued and are fully paid and
nonassessable and are owned by the Company free and clear of any lien, pledge,
option, security interest, claim, restriction or other encumbrance. None of the
Subsidiaries has any
Page 15 of 27 Pages
shares of its capital stock of any class reserved for issuance for any purpose,
including for any outstanding option, warrant, call or commitment, nor does it
have any outstanding securities, obligations or agreements convertible into or
exchangeable for, or giving any person any right (including, without limitation,
preemptive rights) to subscribe for or acquire, any shares of its capital stock.
2.3. Authorization, Execution, Etc. The execution, delivery and
performance by the Company of this Agreement and the Stockholder Agreement and
the consummation of the transactions contemplated hereby and thereby have been
duly authorized by all required action on the part of the Company and its
stockholders, and each of this Agreement and the Stockholder Agreement has been
duly executed and delivered by the Company and constitutes a valid and binding
obligation of the Company, enforceable against the Company in accordance with
its terms, subject to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and other similar laws of general applicability
relating to or affecting creditors' rights and to general equity principles. The
execution and delivery by the Company of this Agreement and the Stockholder
Agreement and the consummation of the transactions contemplated hereby and
thereby do not and will not conflict with or result in a breach or violation of
or default under any law, rule or regulation, the certificate of incorporation
or by-laws of the Company or the corresponding documents of any of the
Subsidiaries, any judgment, decree, order, license or permit issued by any
governmental or regulatory body, board or agency, or any agreement, indenture or
instrument to which the Company or any of its Subsidiaries (or any of their
respective properties) is a party or is otherwise subject.
2.4. Reports, Financial Statements, Etc. All reports and other
documents filed by the Company with the Securities and Exchange Commission (the
"SEC") under Section 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of
1934, as amended (the "Securities Exchange Act") (collectively, the "Reports"),
are accurate and complete in all material respects and do not contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements made therein, in the light of
the circumstances under which they were made, not misleading. True and complete
copies of all Reports filed since January 1, 1995 have been furnished by the
Company to the Buyer. The financial statements contained or incorporated by
reference in the Reports fairly present the financial position, results of
operations and changes in financial position to which they relate as at the
dates and for the periods covered thereby (subject, in the case of unaudited
interim statements, to normal year-end audit adjustments) in each case in
accordance with generally accepted accounting principles consistently applied
during the periods involved, except as otherwise stated therein. The Company and
its Subsidiaries have timely filed all required reports, registrations and
statements, together with any amendments thereto, with the SEC, the OTS, the
Board of Governors of the Federal Reserve System, the Federal Deposit Insurance
Corporation, any state banking commission or other regulatory authority, the
National Association of Securities Dealers, Inc. and any other self-regulatory
organization.
2.5. No Material Adverse Change. Except as otherwise disclosed in the
Reports, since December 31, 1995, there has not been any material adverse change
in the financial condition, results of operations, properties, assets,
liabilities, business or prospects of the Company or any of its Subsidiaries.
Page 16 of 27 Pages
2.6. Compliance with Law. To the best of its knowledge, the Company and
each of its Subsidiaries has conducted its operations in compliance with all
applicable laws, rules and regulations, has all material permits, licenses,
authorizations, orders and approvals of, and has made all material filings,
applications and registrations with, all federal, state, local and foreign
governmental or regulatory bodies that are required in order to permit it to
carry on its business as presently conducted, and all such material permits,
licenses, authorizations, orders and approvals are in full force and effect,
except in each case where the failure to do so or to have done so would not have
a material adverse effect on the Company or any of its Subsidiaries. Neither the
Company nor any of its Subsidiaries is a party to any cease and desist order,
written agreement or memorandum of understanding with, or a party to any
commitment letter or similar undertaking to, or is subject to any order or
directive by, or is a recipient of any extraordinary supervisory letter from,
federal or state governmental authorities charged with the supervision or
regulation of depository institutions or depository institution holding
companies or engaged in the insurance of bank and/or savings and loan deposits,
nor has it been advised by any such authorities that they are contemplating
issuing or requesting (or are considering the appropriateness of issuing or
requesting) any such order, directive, written agreement, memorandum of
understanding, extraordinary supervisory letter, commitment letter or similar
undertaking.
2.7. Tax Matters. To the best of the Company's knowledge, the
provisions made for taxes on the Company's balance sheets are sufficient for the
payment of all accrued federal, state, county and local taxes, whether or not
disputed, and all required tax returns have been timely and properly filed by
the Company and each of its Subsidiaries.
2.8. Litigation. There is no litigation, proceeding or governmental
investigation pending or, so far as known to the Company, in prospect or
threatened before any court, governmental agency or arbitrator against or
relating to or affecting the Company or any of its Subsidiaries, which might
result in a material adverse change in the financial condition, results of
operations, properties, assets, liabilities, business or prospects of the
Company or any of its Subsidiaries.
2.9. Brokers and Intermediaries. Except as set forth in the Disclosure
Letter, the Company has not employed any broker, finder, consultant, adviser or
intermediary that would be entitled to a broker's, finder's or similar fee or
commission in connection herewith or upon the consummation hereof.
2.10. Antitakeover Provisions Inapplicable. The provisions of Articles
XIII and XIV of the Company's restated certificate of incorporation do not and
will not apply to this Agreement or the Stockholder Agreement or the
transactions contemplated hereby or thereby, in the case of Article XIII,
because the time provision applicable to that article has expired, and in the
case of Article XIV, because the transactions contemplated thereby have received
all of the required approvals stated therein.
Page 17 of 27 Pages
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF THE BUYER
The Buyer represents and warrants to the Company that:
3.1. Incorporation, Etc. The Buyer has been duly incorporated and is
validly existing as a corporation in good standing under the laws of the
Commonwealth of the Bahamas.
3.2. Authorization; Non-Contravention. The execution, delivery and
performance by the Buyer of this Agreement and the Stockholder Agreement and the
consummation of the transactions contemplated hereby and thereby have been duly
authorized by all required action on the part of the Buyer, and each of this
Agreement and the Stockholder Agreement has been duly executed and delivered by
the Buyer and constitutes a valid and binding obligation of the Buyer,
enforceable against the Buyer 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 equity principles. The execution and delivery by the Buyer of
this Agreement and the Stockholder Agreement and the consummation of the
transactions contemplated hereby and thereby do not and will not conflict with
or result in a breach or violation of or default under any law, rule or
regulation, the certificate of incorporation or bylaws of the Buyer, any
judgment, decree, order, license or permit issued by any government or
regulatory body, board or agency, or any agreement, indenture or instrument to
which the Buyer is a party or is otherwise subject.
3.3. Consents. Except for the filing of a Rebuttal of Control
Submission and entering into a Rebuttal Agreement with the OTS, no consent,
license, approval or authorization is required to be obtained by the Buyer from,
and no notice or filing is required to be given by the Buyer to or to be made by
the Buyer with, any governmental or regulatory authority in connection with the
execution and delivery of this Agreement or the Stockholder Agreement and the
consummation of the transactions contemplated hereby or thereby.
3.4. Brokers and Intermediaries. The Buyer has not employed any broker,
finder, consultant, adviser or intermediary that would be entitled to a
broker's, finder's or similar fee or commission in connection herewith or upon
the consummation hereof.
3.5. Acquisition for Investment. The Shares are being acquired by the
Buyer for its own account solely for the purpose of investment without any view
to, or for sale in connection with, any distribution thereof in violation of
federal or state securities laws, and with no present intention of distributing
or reselling any part thereof.
ARTICLE 4
CONDITIONS PRECEDENT OF THE COMPANY
The obligation of the Company to sell the Shares to the Buyer is
subject to the satisfaction (or waiver) of each of the following conditions:
Page 18 of 27 Pages
4.1. Representations and Warranties. The representations and warranties
of the Buyer contained in Article 3 shall be true and correct in all respects as
if made at and as of the Closing, and the Buyer shall have performed and
complied in all respects with all undertakings and agreements required by this
Agreement to be performed or complied with by the Buyer prior to the Closing.
4.2. Compliance with Law. No law, regulation, order or injunction of
any court or governmental authority of competent jurisdiction shall be in effect
which prohibits the consummation of the transactions contemplated hereby.
ARTICLE 5
CONDITIONS PRECEDENT OF THE BUYER
The obligation of the Buyer to purchase the Shares at the Closing is
subject to the satisfaction (or waiver) of each of the following conditions:
5.1. Representations and Warranties. The representations and warranties
of the Company contained in Article 2 shall be true and complete in all respects
as if made at and as of the Closing, and the Company shall have performed and
complied in all respects with all undertakings and agreements required by this
Agreement to be performed or complied with by the Company prior to the Closing.
5.2. Compliance with Law. No law, regulation, order or injunction of
any court or governmental authority of competent jurisdiction shall be in effect
which prohibits the consummation of the transactions contemplated hereby.
5.3. Legal Opinion. At the Closing, the Buyer shall have received the
opinion of Xxxxxxx, Xxxxxx & Xxxxxxxx, counsel to the Company, substantially in
the form attached as Annex 2 hereto.
ARTICLE 6
MISCELLANEOUS
6.1. Further Assurances. From time to time after the Closing, the
Company shall execute and deliver, or cause to be executed and delivered, such
documents to the Buyer as the Buyer shall reasonably request in order to
consummate more effectively the transactions contemplated by this Agreement or
the Stockholder Agreement, and from time to time after the Closing, the Buyer
will execute and deliver, or cause to be executed and delivered, such documents
to the Company as the Company shall reasonably request in order to consummate
more effectively the transactions contemplated by this Agreement or the
Stockholder Agreement.
6.2. GOVERNING LAW. ALL QUESTIONS CONCERNING THE CONSTRUCTION,
VALIDITY AND INTERPRETATION OF THIS AGREEMENT SHALL BE GOVERNED BY THE INTERNAL
LAW OF THE STATE OF DELAWARE, WITHOUT GIVING EFFECT TO PRINCIPLES OF CONFLICTS
OF LAW.
6.3. Notices. All notices, requests, permissions, waivers, and other
communications hereunder shall be in writing and shall be deemed
Page 19 of 27 Pages
to have been duly given when received if delivered by hand, facsimile
transmission or by United States mail (registered, return receipt requested),
properly addressed and postage prepaid:
If to the Company, to:
Argo Bancorp, Inc.
0000 Xxxx 00xx Xxxxxx
Xxxxxx, Xxxxxxxx 00000
Attn: Xxxxxxx Xxxxx, Esq.
General Counsel
Tel.: 000-000-0000
Fax: 000-000-0000
with a copy to:
Xxxxxxx, Xxxxxx & Xxxxxxxx
0000 Xxxxxxxxx Xxxxxx, X.X.
Xxxxxxxxxx, X.X. 00000
Attn: Xxxx X. Xxxxxxxx, Esq.
Tel.: 000-000-0000
Fax: 000-000-0000
If to the Buyer, to:
The Deltec Banking Corporation Limited
Deltec House, P.O. Box N-3229
Xxxxxx Xxx, Nassau, Bahamas
Attn: Xxxxxxx X. Xxxxxxx, President
Tel.: 000-000-0000
Fax: 000-000-0000
with a copy to:
Xxxxxxxx & Xxxxxxxx
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxxx X. Xxxx, Esq.
Tel.: 000 000-0000
Fax: 000 000-0000
Such names and addresses may be changed by such notice.
6.4. Entire Agreement. This Agreement and the Stockholder Agreement
contain the entire understanding of the parties hereto with respect to the
subject matter contained herein, and supersede and cancel all prior agreements,
negotiations, correspondence, undertakings and communications of the parties,
oral or written, regarding such subject matter.
6.5. Amendments. This Agreement may be amended only by a written
instrument executed by the parties or their respective successors or permitted
assigns.
Page 20 of 27 Pages
6.6. Headings; References. The article, section and paragraph headings
and table of contents contained in this Agreement are for reference purposes
only and shall not affect in any way the meaning or interpretation of this
Agreement.
6.7. Counterparts. This Agreement may be executed in one or more
counterparts and each counterpart shall be deemed to be an original.
6.8. Parties in Interest; Assignment. This Agreement shall inure to the
benefit of and be binding upon the Company and the Buyer and their respective
successors and permitted assigns. Nothing in this Agreement, express or implied,
is intended to confer upon any Person not a party to this Agreement any rights
or remedies under or by reason of this Agreement. No party to this Agreement may
assign or delegate all or any portion of its rights, obligations or liabilities
under this Agreement without the prior written consent of the other party to
this Agreement.
6.9. Severability; Enforcement. Whenever possible, each provision of
this Agreement will be interpreted in such a manner as to be effective and valid
under applicable law, but if any provision of this Agreement is held to be
invalid, illegal or unenforceable under any applicable law or rule in any
jurisdiction, such provision will be ineffective only to the extent of such
invalidity, illegality or unenforceability in such jurisdiction, without
invalidating the remainder of this Agreement in such jurisdiction or any
provision hereof in any other jurisdiction.
6.10. Jurisdiction. The Buyer and the Company hereby irrevocably and
unconditionally submit to the exclusive jurisdiction of the federal and state
courts located in the State of Delaware, for any actions, suits or proceedings
arising out of or relating to this Agreement and the transactions contemplated
hereby (and the Buyer and the Company agree not to commence any action, suit or
proceeding relating thereto except in such courts), and further agree that
service of any process, summons, notice or document by U.S. registered mail to
its address set forth above shall be effective service of process of any action,
suit or proceeding brought against it in any such court. The Buyer and the
Company hereby irrevocably and unconditionally waive any objection to the laying
of venue of any action, suit or proceeding arising out of this Agreement or the
transactions contemplated hereby in such courts as aforesaid and hereby further
irrevocably and unconditionally waive and agree not to plead or claim in any
such court that any such action, suit or proceeding brought in any such court
has been brought in an inconvenient forum. The Company and the Buyer waive any
rights they may have to a jury trial.
6.11. Waiver. Any of the conditions to Closing set forth in this
Agreement may be waived in writing at any time prior to or at the Closing
hereunder by the party entitled to the benefit thereof. The failure of any party
hereto to enforce at any time any of the provisions of this Agreement shall in
no way be construed to be a waiver of any such provision, nor in any way to
affect the validity of this Agreement or any part hereof or the right of such
party thereafter to enforce each and every such provisions. No waiver of any
breach of or non-compliance with this Agreement shall be held to be a waiver of
any other or subsequent breach or non-compliance.
Page 21 of 27 Pages
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the date first above written.
ARGO BANCORP, INC.
By: /s/ Xxxxxxx X. Xxxxx
Name: Xxxxxxx X. Xxxxx
Title: Executive Vice President & Corporate Secretary
THE DELTEC BANKING CORPORATION LIMITED
By: /s/ Xxxxxxx X. Xxxxxxx
Name: Xxxxxxx X. Xxxxxxx
Title: President
Page 22 of 27 Pages
