EXHIBIT A
STOCK PURCHASE AGREEMENT
This STOCK PURCHASE AGREEMENT dated as of March 29, 2000 (the "Agreement"),
is made and entered into by and between Foothill Independent Bancorp, a
California corporation (the "Company"), on the one hand, and each of the
following entities or persons (who shall collectively be referred to herein as
the "Basswood Group" and individually as a "Member" thereof), on the other hand:
Basswood Financial Partners, L.P., a Delaware limited partnership (the "Basswood
LP"), Basswood Partners, L.L.C., a Delaware limited liability company ("Basswood
LLC"), Basswood Capital Management L.L.C., a Delaware limited liability company
("BCM"), Whitewood Financial Partners, L.P., a Delaware limited partnership
("Whitewood"), Basswood International Fund, Inc., a Cayman Islands exempted
company ("Basswood International"), and Xxxxxxx Xxxxxxxxxx and Xxxxxxx
Xxxxxxxxxx.
R E C I T A L S:
- - - - - - - -
A. The Company's Board of Directors has determined that it would be
advantageous and in the best interests of the Company and its shareholders for
the Company to repurchase shares of its common stock, without par value (the
"Common Stock") and, therefore, has previously approved and directed management
to effectuate open market and private purchases of shares of the Company's
Common Stock at prices approximating the prevailing prices of the Company's
Common Stock in the open market (the "Stock Purchase Program").
B. The Basswood Group has informed the Company that its members intend to
sell the shares of Common Stock of the Company owned by its Members (the
"Basswood Shares"), a schedule of which is attached as Exhibit A hereto.
C. The Company has advised the Basswood Group that, in furtherance of the
purposes of its Stock Purchase Program, the Company desires to purchase all of
the Basswood Group Shares (which shall sometimes be referred to herein as the
"Shares").
D. According to reports obtained from NASDAQ, the stock market on which the
Company's shares are listed for trading, the average of the prices at which
shares of Common Stock of the Company have been sold during the 20 trading days
immediately preceding the date that substantive negotiations of this Agreement
were commenced was $11.55 per share.
E. The Basswood Group Members are willing to sell the Shares to the
Company, and the Company has determined to buy those Shares, on the terms and
conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the foregoing and the respective
representations, warranties and covenants of the parties contained herein, the
parties hereby agree as follows:
1. Sale of Basswood Shares. Subject to the terms and conditions set forth
hereinafter, at the Closing (as hereinafter defined), each Member of the
Basswood Group shall sell, transfer and convey to the Company, free and clear of
all claims, liens, pledges, options, security interests, encumbrances,
restrictions and adverse interests of any kind or nature whatsoever
(collectively, "Liens and Adverse Interests") and, subject to the Company's
rights under Section 8(a) below to assign its purchase rights hereunder as and
to the extent provided therein, the Company shall purchase from each Member, the
number of the Basswood Shares owned beneficially by such Member, as set forth
opposite such Member's name on Exhibit A hereto, for a purchase price of eleven
and one-half dollars ($11.50) per share (the "Per Share Purchase Price"). The
respective amounts payable to each Member of the Basswood Group for all of such
Member's Shares is also set forth on Exhibit A hereto (each Member's "Purchase
Price"). It shall be a condition precedent to the Company's obligations that the
closing price of its shares on the date hereof shall not have declined by more
than 20% from the Per Share Purchase Price stated above and it shall be a
condition precedent to the obligations of the Basswood Group Members that such
closing price shall not have increased by more than 20% from the Per Share
Purchase Price.
2. Payment for and Delivery of Shares. The delivery of the Basswood Group
Shares and the payment therefor shall take place concurrently at 10 A.M. on
March 31, 2000 or such other date and time that as may be agreed by the parties
(the "Settlement Date"). At that time and date the Members shall cause to be
effectuated an electronic transfer of ownership of the Basswood Group Shares to
the account of the Company and to the account of any Permitted Assigns (as
defined in Section 8(a) below) and, on confirmation that such electronic
transfer has been made, the Company and such Permitted Assignees, if any, shall
pay to each Member such Member's Purchase Price, as set forth in Exhibit A
hereto, by wire transfer of funds in accordance with wire transfer instructions
received from Basswood LP. In addition to the effectuation of the electronic
transfer of the Shares, the Company's obligation to pay for the Basswood Shares
shall be subject to the satisfaction of the following conditions: (i) that all
of the Basswood Shares are sold to the Company or its Permitted Assigns on or
before March 31, 2000, and (ii) that the parties shall have entered into a
Settlement Agreement substantially in the form of Exhibit B hereto.
3. Representations and Warranties of the Company. The Company represents
and warrants to the Members of the Basswood Group as follows:
(a) The Company has the corporate power and authority to execute and
deliver and to perform its obligations under this Agreement;
(b) This Agreement has been duly and validly authorized, executed and
delivered by the Company and constitutes a valid and binding agreement of the
Company, enforceable against the Company in accordance with its terms; and
(c) Neither the execution and delivery of, nor the performance by the
Company of its obligations under, this Agreement will result in or constitute a
breach or violation of, nor is any consent required to be obtained under any
contract, instrument or other agreement, written or oral, to which the Company
is subject or bound, other than any consent that has been obtained.
4. Representations and Warranties of the Basswood Group Members. The
Members of the Basswood Group jointly and severally represent and warrant to the
Company, as follows:
(a) Each of the Basswood Members which is not a natural person represents
and warrants on its own behalf that (i) it has the corporate, limited liability
company or partnership (as applicable) power and authority to execute and
deliver, and to perform its obligations under, this Agreement, (ii) the
execution, delivery and performance of this Agreement by such Member has been
duly authorized by all requisite action of such Member required under applicable
law or its organizational documents, and (iii) this Agreement constitutes such
Member's valid and binding obligation, enforceable against it in accordance with
its terms.
(b) Each of the Basswood Group Members who is a natural person represents
and warrants on his own behalf that he (i) has the capacity, right, power and
authority to execute and deliver, and to perform his obligations under, this
Agreement and to consummate the transactions contemplated
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hereby, and (ii) this Agreement has been duly executed and delivered by such
Member and constitutes his valid and binding obligation, enforceable against him
in accordance with its terms.
(c) Neither the execution and delivery of, nor the performance by the
Basswood Group Members of their respective obligations under, this Agreement
will result in or constitute a breach or violation of any contract, instrument
or other agreement, written or oral, to which any such Basswood Group Member is
a party or to which such Member's Shares are subject or bound.
(d) Each of the Basswood Group Members owns beneficially (as such term is
defined below) the number of shares of Common Stock of the Company set forth
opposite his or its name under the column heading "Shares Beneficially Owned" in
Exhibit A attached hereto. Except for such shares listed in Exhibit A, none of
the Basswood Group Members and no Affiliate or Associate (as hereinafter
defined) of any of the Basswood Group Members owns beneficially, or of record,
any shares of Common Stock or other voting securities of the Company or any
rights, options or other securities that are or may become convertible,
exercisable or exchangeable for shares of Common Stock or any other voting
securities of the Company.
(e) The Basswood Group Members own beneficially the Shares set forth
opposite their respective names on Exhibit A and at the time of the Closing
shall have the right to, and shall, sell, transfer and convey such Shares to the
Company, free and clear of any and all Liens and Adverse Interests of any kind
and nature whatsoever, and without any restriction.
(f) Each Basswood Group Member possesses and has not assigned or
transferred to any Person the right to vote, or the right to give consents with
respect to, or any other rights of a shareholder under California law arising
out of such Member's ownership of, the Shares set forth opposite such Member's
name on Exhibit A. Except as otherwise provided in Section 4 below, no such
Member has executed or delivered, and it shall not execute or deliver, to any
Person any proxy to vote or exercise consensual rights with respect to any of
such Shares and it has not entered and shall not enter into, and none of such
Member's shares of Company Common Stock are subject to, any voting trust, power
of attorney or other agreement pertaining to the voting or consensual rights, or
the exercise of any other shareholder rights, arising out of the ownership of
such Shares of Common Stock.
5. Irrevocable Proxy and Voting Instructions.
(a) Each Basswood Group Member hereby constitutes and appoints Xxxxxx X.
Xxxxxxx and Xxxxx Xxxxxxxxxxxx, and each of them, individually, with full power
of substitution (each, a "Proxy Holder"), as such Member's true and lawful proxy
and attorney-in-fact:
(i) to vote all the Shares of each Member at any meeting of the Company's
shareholders (and any adjournment or postponement thereof) for which the record
date is any date preceding the cancellation of the Shares following their
acquisition by the Company hereunder, as the Proxy Holders, or either of them,
acting individually, deems appropriate, in his or her sole and absolute
discretion, on or with respect to any and all proposals to be voted on at any
such meetings, including, but not limited to the Company's Special Shareholders
Meeting called for April 25, 2000 at which shareholders of record as of March
17, 2000 will be voting on a proposed reincorporation of the Company and certain
changes in its charter and bylaws; and
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(ii) to execute and deliver any and all written consents and to exercise
all other consensual rights with respect to each such Member's Shares as the
Proxy Holders, or either of them, acting individually, deems in his or her sole
and absolute discretion to be appropriate.
(b) Concurrently herewith, or at any time hereafter at the request of the
Company, and in furtherance and not in limitation of their obligations
hereunder, the Basswood Group Members shall execute proxies or written
instructions to any record holder of their Basswood Shares that shall direct
such record holders to vote their beneficially owned Shares of Common Stock FOR
approval of all of the Proposals to be submitted to a vote of the Company's
shareholder at the Special Meeting. If a Basswood Group Member fails for any
reason to issue such instructions to the record or nominee holder of its Shares
or attempts to revoke any such instruction, such failure or attempted revocation
shall constitute a breach of this Agreement and, without limiting any other
rights or remedies that the Company have by reason thereof, the Proxy Holders,
or either of them individually, shall have the right to vote that Members Shares
at that Special Meeting in accordance with the provisions of this Section 5. The
vote of a Proxy Holder shall control in any conflict between a vote of such
Shares by a Proxy Holder and a vote by a Basswood Member or by a record or
nominee holder of such Shares.
(c) Each of the foregoing proxies and powers of attorney, provided for in
Paragraphs 5(a) and 5(b) above, are being granted as security for the
obligations of the Basswood Group Members under this Agreement and a Settlement
Agreement of even date herewith being entered into by them with the Company (the
"Settlement Agreement") and shall be irrevocable for a period of eleven months
following the date hereof, shall be deemed to be coupled with an interest
sufficient in law to support an irrevocable proxy and shall revoke all prior
proxies granted by such Basswood Group Members. The expiration of the foregoing
11 month period shall be "tolled" during any period that any Basswood Group
Member is in breach of this Agreement or the Settlement Agreement and on the
remedying of such breach such 11 month period shall be extended for a period of
time equal to the duration of such breach.
(d) Each Basswood Group Member covenants that, except as set forth above in
this Section 5, such Member shall not exercise any voting or consensual rights
or grant any proxy or power of attorney to any Person with respect to such
Member's Shares, and any attempt to do so shall be void and ineffective. The
power of attorney granted in this Section 5 by each Basswood Group Member is a
durable power of attorney and shall survive such Member's death, disability or
other incapacity.
(e) Each Basswood Group Member shall execute and deliver such other
documents or instruments as may be requested by the Company to better effectuate
or evidence the power of attorney and proxy and the voting and consensual rights
granted hereunder to the Proxy Holders with respect to each such Basswood Group
Member's Shares. Such documents and instruments shall include, but shall not be
limited to, an irrevocable instruction to the Inspector of Elections for any
Company shareholders meeting, including the Special Meeting, that in the event
that such Member's Shares are voted by such Member or such Member's agent or
nominee in a manner inconsistent with this Section 5 or inconsistent with voting
instructions received from either or both of the Proxy Holders, such votes or
written consents from the Member or its agent or nominee shall be disregarded
and such Shares shall be voted in accordance with instructions given by either
or both of the Proxy Holders (or by any persons to which they may, by
substitution, assign such voting or consensual rights with respect to such
Shares).
6. Specific Performance. Each of the Basswood Group Members hereby
acknowledges and agrees that irreparable injury to the Company would occur in
the event any of the provisions of Section 1 or of Section 5 hereof were not
performed in accordance with their specific terms or were otherwise breached and
that such injury would not be fully compensable in damages. It is therefore
agreed by the
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Basswood Group Members that, without limiting any other rights or remedies
available to the Company hereunder:
(i) the Company shall be entitled to temporary, preliminary and permanent
injunctive relief against any breach or threatened breach of, and to specific
enforcement, of the terms of Section 1 or the terms of Section 5 hereof; and
(ii) none of the Basswood Group Members shall take any action, directly or
indirectly, in opposition to the Company's petition seeking such relief on the
grounds that any other remedy or relief is available at law or in equity, and
(iii) the Company shall not be obligated to post a bond, cash deposit or
other security as a condition to the granting of such relief.
7. Certain Definitions and Headings. As used in this Agreement:
(a) the terms "beneficial ownership" and "beneficially owned" and any
variants thereof shall have the meaning given to such terms in Rule 13d-3, as
such Rule is currently in effect, under the Exchange Act;
(b) the term "Person" shall mean any natural person, corporation,
partnership (general or limited), limited liability company, group, syndicate,
trust, government or agency thereof, or any other association or entity;
(c) the terms "Affiliates" and "Associates" shall have the respective
meanings set forth in Rule 12b-2 promulgated by the Commission under the
Securities Exchange Act of 1934, as in effect on the date hereof, and shall
include Persons who are Affiliates or Associates of any Person on the date
hereof or who become Affiliates or Associates of any Person subsequent to the
date hereof;
(d) the word "including" shall be deemed to be followed by the words
"without limitation" "but not limited to".
(e) The captions and section headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
8. Miscellaneous.
(a) Successors and Assigns. All the terms and provisions of this Agreement
shall inure to the benefit of and shall be enforceable by the respective
successors and permitted assigns of the parties hereto; provided that neither
the Company, on the one hand, nor any of the Basswood Members, on the other
hand, may assign or otherwise transfer its rights or interests, nor delegate its
duties hereunder without the prior written consent of the other party hereto.
Neither the death, disability or incapacity (whether legal, physical or mental)
of any party hereto occurring after the date hereof shall affect the continued
and continuing validity or enforceability of this Agreement on such party and
its successors, heirs, representatives or assigns and this Agreement shall
survive and continue in full force and effect and to be binding on such party
and its successors, heirs, representatives or assigns notwithstanding such
death, disability or incapacity. Notwithstanding the foregoing, the Company may
assign its rights to purchase any of the Basswood Group Shares to any of its
directors or officers and to a limited number of other sophisticated investors
(a "Permitted Assign"), provided that the Company shall be obligated to purchase
and pay for any of the Shares which any Permitted Assignee agrees, but fails, to
purchase and pay for at the Closing.
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(b) Survival. All representations, warranties, covenants, agreements and
understandings made by the parties in this Agreement or pursuant hereto shall
survive the date hereof indefinitely.
(c) Entire Agreement; Amendment. Except for the Settlement Agreement, this
Agreement (together with any Exhibits hereto) contains the entire understanding
of the parties hereto with respect to its subject matter and there are no
representations, warranties, agreements, covenants or undertakings that pertain
to the subject matter of this Agreement other than those expressly set forth
herein. This Agreement may be amended only by a written instrument duly executed
by the parties hereto or their respective successors or permitted assigns or, in
the case of the Basswood Group Members by their Representative (as hereinafter
defined).
(d) No Waiver. Any waiver by any party hereto of the duty to perform or of
a breach of any obligation of another party hereto under this Agreement shall
not be effective unless it is set forth in a written instrument signed and
delivered by the party against whom the waiver is sought to be enforced and no
such written waivers shall operate as or be construed to be a waiver of any
other instance of a breach (actual or threatened) of or failure to perform the
same obligation or of any other obligation of such party under this Agreement.
The failure of a party hereto to insist upon strict adherence to any term of
this Agreement on one or more occasions shall not be considered a waiver or
course of conduct and shall not deprive that party of the right thereafter to
insist upon strict adherence to that term or any other term of this Agreement.
(e) Notices. All notices, requests, claims, demands and other communications
hereunder shall be in writing and shall be deemed to have been given on the day
when delivered by hand, on the day when sent by telecopy and confirmed and on
the third business day after being deposited in the mail (registered or
certified, postage prepaid, return receipt requested) to the respective parties
hereto as set forth in Exhibit E to the Settlement Agreement.
(f) Governing Law. This Agreement shall be governed by, and construed and
enforced in accordance with, the laws of the State of California, without
reference to conflicts of law principles. Any action or proceeding brought with
respect to this Agreement or the performance or non-performance by any party
hereto of its obligations under this Agreement shall be brought and maintained
exclusively in the Superior Court of the State of California in Los Angeles
County or in the Federal District Court for the Central District of California
and no party hereto shall contest the subject matter or personal jurisdiction or
the venue of such court or courts, or assert the defense of forum nonconviens
and each party agrees to accept and not challenge the adequacy of any notice in
any such action or proceeding that is given by means of certified or registered
first class mail.
(g) Severability. If any term, provision covenant or restriction of this
Agreement is held by a court of competent jurisdiction to be invalid, void or
unenforceable, the remainder of the terms, provisions, covenants and
restrictions of this Agreement shall remain in full force and effect, unless
such actions would substantially impair the material benefits of any of the
parties under the remaining provisions of this Agreement.
(h) Basswood Group Representative. Each Basswood Group Member hereby
irrevocably appoints Xxxxxxx Xxxxxxxxxx as such Member's attorney-in-fact and
representative (the "Representative"), to act in such Member's place, stead and
name, to do any and all things and to execute any and all documents and give and
receive any and all notices or instructions in connection with this Agreement
and the transactions contemplated hereby. Notwithstanding any provision hereof
to the
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contrary, the Company shall be entitled to rely upon, as being binding on each
of the Basswood Group Members, any action taken by the Representative or upon
any document, notice, instruction or other writing given or executed by the
Representative, and any such act, document, notice, instruction or other writing
shall bind and shall be strictly enforceable against each of the Basswood Group
Members.
(i) Further Assurances. At the request of any party (a "requesting party")
to another party hereto, on or at any time after the date hereof, such other
party shall execute and deliver such instruments and documents requested by the
requesting party in order to evidence or better effectuate, but not to enlarge,
the rights of the requesting party under this Agreement.
(j) Interpretation. This Agreement is the result of arms-length bargaining
between the parties and no provision of this Agreement or any ambiguity that may
be found therein, shall be construed or interpreted against a party hereto
because such party, or its counsel, was the primary draftsman of such provision.
(k) Expenses and Attorneys Fees. Each party hereto shall bear its own
expenses in connection with the execution and delivery and performance by such
party of this Agreement. In the event any legal action or other proceeding is
brought for the enforcement of this Agreement, or because of an alleged dispute,
breach or default in connection with any of the provisions of this Agreement,
the prevailing party or parties shall be entitled to recover reasonable
attorneys' fees and other costs incurred in that action or proceeding, in
addition to any other relief to which it or they may be entitled.
(l) Joint and Several Obligations. The representations and warranties and
the covenants of the Basswood Group Members under this Agreement shall be joint
and several.
(m) Counterparts. This Agreement may be executed in counter parts, each of
which shall be deemed an original, but each of which together shall constitute
one and the same Agreement.
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IN WITNESS WHEREOF, the parties hereto have executed and delivered, or
caused to be executed and delivered, this Settlement Agreement on the date first
above written.
FOOTHILL INDEPENDENT BANCORP BASSWOOD FINANCIAL PARTNERS, L.P.,
a California corporation
By: Basswood Partners, L.L.C.,
its General Partner
By: /s/ X. Xxxxxxxxxxxx By: /s/ Xxxxxxx Xxxxxxxxxx
------------------------------ ------------------------------
Name: X. Xxxxxxxxxxxx
Title: EVP/Chief Operating Officer
WHITEWOOD FINANCIAL PARTNERS, L.P., BASSWOOD PARTNERS, L.L.C.
By: /s/ Xxxxxxx Xxxxxxxxxx By: /s/ Xxxxxxx Xxxxxxxxxx
------------------------------ ------------------------------
BASSWOOD INTERNATIONAL FUND, INC. BASSWOOD CAPITAL MANAGEMENT L.L.C.,
By: /s/ Xxxxxxx Xxxxxxxxxx By: /s/ Xxxxxxx Xxxxxxxxxx
------------------------------ ------------------------------
/s/ Xxxxxxx Xxxxxxxxxx /s/ Xxxxxxx Xxxxxxxxxx
------------------------------ ------------------------------
Xxxxxxx Xxxxxxxxxx Xxxxxxx Xxxxxxxxxx
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