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Exhibit 2
AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION (hereinafter referred to as
the "AGREEMENT"), made and entered into this 4th day of December, 1998, by and
among Xxxxxx Financial Corporation, a savings and loan holding company
incorporated under the laws of Ohio (hereinafter referred to as "WFC"); The
Xxxxxx Savings and Loan Co., a savings and loan association incorporated under
the laws of Ohio (hereinafter referred to as "WSL"); and BenchMark Federal
Savings Bank, a federal savings bank incorporated under the laws of the United
States (hereinafter referred to as "BMF");
WITNESSETH:
WHEREAS, the authorized capital of WFC consists of 5,000,000 common
shares, without par value, 4,014,304 of which are issued and outstanding, and
2,000,000 preferred shares, without par value, none of which is issued or
outstanding;
WHEREAS, the authorized capital of WSL consists of 10,000,000 common
shares, $1.00 par value per share, 406,050 of which are issued and outstanding
and are owned of record by WFC;
WHEREAS, the authorized capital of BMF consists of 2,000,000 common
shares, $1.00 par value per share, 112,307 of which are issued and outstanding
and held of record by approximately 81 shareholders, and 500,000 preferred
shares, par value $1.00 per share, none of which is issued or outstanding; and
WHEREAS, the Boards of Directors of WFC, WSL and BMF believe that the
merger of BMF with and into WSL is in the best interests of each of them and
their shareholders;
NOW THEREFORE, in consideration of the premises and the mutual
covenants and agreements hereinafter set forth, WFC, WSL and BMF, each intending
to be legally bound, hereby agree as follows:
ARTICLE ONE
THE MERGER
SECTION 1.01. MERGER OF WSL AND BMF. In accordance with the terms and
subject to the conditions of this AGREEMENT, Chapters 1151 and 1701 of the Ohio
Revised Code (hereinafter referred to as the "ORC") and Section 552.13 of the
Regulations of the Office of Thrift Supervision (hereinafter referred to as the
"OTS"), BMF shall merge with and into WSL at the EFFECTIVE TIME (hereinafter
defined); WSL shall be the continuing, surviving and resulting corporation in
the merger of BMF with and into WSL (hereinafter referred to as the "SURVIVING
CORPORATION"); WSL shall continue to exist as a savings and loan association
incorporated under Ohio law; and WSL shall be the only one of BMF and WSL to
continue its separate corporate existence after the EFFECTIVE TIME.
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SECTION 1.02. The name of the SURVIVING CORPORATION in the merger of
BMF with and into WSL (hereinafter referred to as the "MERGER") shall be "The
Xxxxxx Savings and Loan Co."
SECTION 1.03. The purposes for which the SURVIVING CORPORATION shall be
formed shall be identical to the purposes for which WSL was formed.
SECTION 1.04. The capital of the SURVIVING CORPORATION shall consist of
10,000,000 common shares, $1.00 par value per share.
SECTION 1.05. The Amended Articles of Incorporation of WSL, as amended,
a copy of which is attached hereto as Exhibit A, shall be the Amended Articles
of Incorporation of the SURVIVING CORPORATION until amended in accordance with
law.
SECTION 1.06. The Amended Constitution of WSL at the EFFECTIVE TIME
shall be the Amended Constitution of the SURVIVING CORPORATION until amended in
accordance with law.
SECTION 1.07. At and after the EFFECTIVE TIME and until changed in
accordance with law, the offices identified on the schedule attached hereto as
Exhibit B shall be the offices of the SURVIVING CORPORATION.
SECTION 1.08. At and after the EFFECTIVE TIME and until changed in
accordance with law, the number of directors of the SURVIVING CORPORATION shall
be eight, the names, residence addresses and office terms of whom are as
follows:
NAMES RESIDENCE ADDRESS TERM EXPIRES
----- ----------------- ------------
Xxxxxx X. Xxxxxx 00 Xxxxxxxx Xxxxx 0000
Xxxxx Xxxx, Xxxx 00000
Xxxxxx X. Xxxxxx 0000 Xxxxxx Xxxx Xxxxx 0000
Xxxxxxxxxx, Xxxx 00000
Xxxxxx X. Xxxxxxxx 0000 Xxxxxxxx Xxx Xxxx 0000
Xxxxxxxxxx, Xxxx 00000
Xxxxxxx X. Xxxxxxxx 000 Xxxxx Xxxx Xxxx 0000
Xxxxxxxxxx, Xxxx 00000
Xxxxx Xxxxxxxxx 0000 Xxxxxxx Xxxx 0000
Xxxxxxxxxx, Xxxx 00000
J. Xxxx Xxxxxxxx 0000 Xxxxxxx Xxxxxx 0000
Xxxxxxxxxx, Xxxx 00000
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NAMES RESIDENCE ADDRESS TERM EXPIRES
----- ----------------- ------------
Xxxxxx X. Xxxxx, Xx. 000 Xxx Xxxxxx 0000
Xxxxxxxxxx, Xxxx 00000
Xxxxxxx X. Xxxxxx 0000 Xxxxxxxx Xxx Xxxx 0000
Xxxxxxxxxx, Xxxx 00000
SECTION 1.09. At and after the EFFECTIVE TIME and until changed in
accordance with law, the following persons shall be the officers of the
SURVIVING CORPORATION and shall hold the offices set forth beside their
respective names and addresses:
NAMES RESIDENCE ADDRESS OFFICE
----- ----------------- ------
Xxxxxx X. Xxxxxx 0000 Xxxxxx Xxxx Xxxxx Xxxxxxxxx/XXX
Xxxxxxxxxx, Xxxx 00000
Xxxxxxx X. Xxxxxx 0000 Xxxxxxx Xxxx Executive Vice President
Xxxxxxxxxx, Xxxx 00000
Xxxx Xxxxx Xxxxxx 0000 Xxxxxxxxxx Xxxxx Senior Vice President
Xxxxxxxxxx, Xxxx 00000
Xxxxxx X. Xxxxxx 00 Xxxxxxxx Xxxxx Xxxx Xxxxxxxxx
Xxxxx Xxxx, Xxxx 00000
Xxxx X. Xxxxx 0000 Xxxxxxxx Xxxx Xxxxxxxxx/Xxxxx Xxxxxxxxx Xxxxxxx
Xxxxxxxxxx, Xxxx 00000
Xxxxx X. Xxxxxxx 000 Xxxxxx Xxxx Xxxx Xxxxxxxxx/Xxxxxxxxx
Xxxxxxxxxx, Xxxx 00000
Xxxxxxxx X. Xxxxxx 000 Xxxxxxx Xxxxxx Xxxx Xxxxxxxxx
Xxxxxxxxxx, Xxxx 00000
SECTION 1.10. Xxxxxx X. Xxxxxx, whose address is 0000 Xxxxxxx Xxxx,
Xxxxxxxxxx, Xxxx 00000, a natural person and resident of Xxxxxxxx County, the
county in which the principal office of the SURVIVING CORPORATION is to be
located, shall be the statutory agent upon whom any process, notice or demand
against WSL, BMF or the SURVIVING CORPORATION may be served.
SECTION 1.11. CLOSING. (a) The closing of the transactions contemplated
by this AGREEMENT (hereinafter referred to as the "CLOSING") shall take place at
a time and on a date selected by WFC within forty (40) days after the
satisfaction or waiver of the last of the conditions set forth in Article Seven
of this AGREEMENT to be satisfied or waived.
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(b) On the day of the CLOSING, WSL and BMF shall cause (i) a
Certificate of Merger in respect of the MERGER to be filed by the Superintendent
of the Division of Financial Institutions of the Ohio Department of Commerce
(hereinafter referred to as the "DIVISION") in the Office of the Ohio Secretary
of State in accordance with Chapters 1151 and 1701 of the ORC and (ii) Articles
of Combination in respect of the MERGER to be filed with the OTS in accordance
with Section 552.13(j) of the OTS Regulations. The MERGER shall become effective
at 11:58 p.m. on the date of such filing (herein referred to as the "EFFECTIVE
TIME").
ARTICLE TWO
CONVERSION AND CANCELLATION OF
SHARES IN THE MERGER
SECTION 2.01. CONVERSION AND CANCELLATION OF SHARES IN THE MERGER. At
the EFFECTIVE TIME and as a result of the MERGER, automatically and without
further act of WFC, WSL, BMF, or the holders of WFC shares or BMF shares, the
following shall occur:
(a) Each BMF common share shall be cancelled and
extinguished and, in substitution and exchange
therefor, the holders thereof shall be entitled,
subject to and upon compliance with Section 2.02 of
this AGREEMENT, to receive 3.35 common shares of WFC
(hereinafter referred to as the "EXCHANGE RATE");
provided, however, that in the event of the payment
by WFC of any stock dividends, stock splits or
distributions in, or combinations or subdivisions of,
WFC common shares between the date of this AGREEMENT
and the EFFECTIVE TIME, the EXCHANGE RATE shall be
adjusted appropriately;
(b) The issued and outstanding common shares of WSL
before the EFFECTIVE TIME shall remain issued and
outstanding after the EFFECTIVE TIME and shall be and
constitute the issued and outstanding shares of
SURVIVING CORPORATION; and
(c) The issued and outstanding common shares of WFC
before the EFFECTIVE TIME shall remain issued and
outstanding after the EFFECTIVE TIME.
SECTION 2.02. SHARE CERTIFICATES IN THE MERGER. (a) As soon as
practicable after the EFFECTIVE TIME, WFC shall mail to each holder of record of
BMF common shares a form letter of transmittal and instructions for use in
effecting the surrender for exchange of the certificates evidencing the BMF
common shares cancelled and extinguished as a result of the MERGER (hereinafter
referred to collectively as the "CERTIFICATES" and individually as the
"CERTIFICATE"). Upon surrender of a CERTIFICATE for cancellation, together with
such letter of transmittal, duly executed, the holder of such CERTIFICATE shall
be entitled to receive in exchange therefor a certificate evidencing the WFC
common shares to which the holder is
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entitled in accordance with the provisions of this AGREEMENT, and the
CERTIFICATE so surrendered shall thereafter be cancelled forthwith.
(b) In the event that any holder of BMF common shares
cancelled and extinguished in accordance with this AGREEMENT is unable to
deliver the CERTIFICATE which evidences such shares of the holder, WFC, in the
absence of actual notice that any shares theretofore evidenced by any such
CERTIFICATE have been acquired by a bona fide purchaser, shall deliver to such
holder the amount to which such holder is entitled in accordance with the
provisions of this AGREEMENT upon the presentation of all of the following:
(i) Evidence to the reasonable satisfaction of WFC
that any such CERTIFICATE has been lost,
wrongfully taken or destroyed;
(ii) Such security or indemnity as may be
reasonably requested by WFC to indemnify and
hold WFC harmless; and
(iii) Evidence to the reasonable satisfaction of
WFC that such person is the owner of the
shares theretofore represented by each
CERTIFICATE claimed by him to be lost,
wrongfully taken or destroyed and that he is
the person who would be entitled to present
each such CERTIFICATE for exchange pursuant
to this AGREEMENT.
(c) In the event that the issuance of WFC shares or payment in
lieu of fractional shares in accordance with this AGREEMENT is to be made to a
person other than the person in whose name the CERTIFICATE surrendered is
registered, the CERTIFICATE so surrendered shall be properly endorsed or
otherwise in proper form for transfer and the person requesting such issuance or
payment shall pay any transfer or other taxes required by reason of the issuance
or payment to a person other than the registered holder of the CERTIFICATE
surrendered or establish to the satisfaction of WFC that such tax has been paid
or is not applicable. Until surrendered in accordance with the provisions of
this Section 2.02, each CERTIFICATE shall represent for all purposes the right
to receive the number of whole WFC shares and cash in lieu of fractional shares
as determined pursuant to this AGREEMENT.
(d) No dividends or other distributions declared after the
EFFECTIVE TIME with respect to WFC common shares and payable to the holders of
record thereof after the EFFECTIVE TIME shall be paid to the holder of any
unsurrendered CERTIFICATE until the holder thereof shall surrender such
CERTIFICATE. Subject to the effect, if any, of applicable law, after the
subsequent surrender and exchange of a CERTIFICATE, the record holder thereof
shall be entitled to receive any such dividends or other distributions, without
any interest thereon, which theretofore had become payable with respect to WFC
common shares represented by such CERTIFICATE.
(e) No certificates or scrip representing fractional shares of
WFC common shares shall be issued upon the surrender for exchange of
CERTIFICATES. No dividend or distribution with respect to WFC common shares
shall be payable on or with respect to any such
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fractional shares and such fractional shares shall not entitle the owner thereof
to vote or to any other rights of a WFC shareholder. In lieu of any such
fractional share, WFC shall pay to each former holder of BMF common shares who
otherwise would be entitled to receive a fraction of a WFC common share an
amount in cash equal to the product of (i) the closing sale price of a share of
WFC on the American Stock Exchange (hereinafter referred to as the "AMEX") on
the day of the EFFECTIVE TIME, multiplied by (ii) such fraction.
(f) The certificate evidencing the issued and outstanding
common shares of WSL before the EFFECTIVE TIME shall evidence the issued and
outstanding common shares of the SURVIVING CORPORATION after the EFFECTIVE TIME.
SECTION 2.03. COMPLIANCE WITH SECTION 2.02. No WFC shares or payment in
lieu of fractional shares shall be delivered by WFC to any former holder of BMF
common shares in accordance with this AGREEMENT until any such holder shall have
complied with paragraphs (a) through (e) of Section 2.02 of this AGREEMENT.
SECTION 2.04. PAYMENT IN SATISFACTION OF RIGHTS. All payments made upon
the surrender of CERTIFICATES pursuant to this Article Two shall be deemed to
have been made in full satisfaction of all rights pertaining to the shares
evidenced by such CERTIFICATES.
SECTION 2.05. NO FURTHER REGISTRATION OF TRANSFER. After the EFFECTIVE
TIME, there shall be no further registration of transfer of BMF common shares on
the stock transfer books of BMF. In the event that, after the EFFECTIVE TIME,
CERTIFICATES evidencing such shares are presented for transfer, they shall be
cancelled and exchanged as provided in this Article Two.
SECTION 2.06. DISSENTING SHARES. Notwithstanding anything in this
AGREEMENT to the contrary, the BMF common shares which are outstanding
immediately before the EFFECTIVE TIME and which are held by shareholders who
shall not have voted such shares in favor of this AGREEMENT, who shall have
delivered to WFC or BMF a written demand for appraisal of such shares in the
manner provided in Section 552.14 of the OTS Regulations and who shall have
otherwise complied fully with all of the requirements of Section 552.14 of the
OTS Regulations shall not be converted into or be exchangeable for the right to
receive the consideration provided in this AGREEMENT; provided, however, that
(i) each of such shares (hereinafter referred to as the "DISSENTING SHARES")
shall nevertheless be cancelled and extinguished in accordance with this
AGREEMENT; (ii) the holder of DISSENTING SHARES, upon full compliance with the
requirements of Section 552.14 of the OTS Regulations, shall be entitled to
payment of the appraised value of such shares in accordance with the provisions
of Section 552.14 of the OTS Regulations; and (iii) in the event (I) any holder
of DISSENTING SHARES shall subsequently withdraw such holder's demand for
appraisal of such shares within sixty days after the EFFECTIVE TIME or shall
fail to establish such holder's entitlement to appraisal rights in accordance
with Section 552.14 of the OTS Regulations or (II) any holder of DISSENTING
SHARES has not filed a petition demanding a determination of the value of such
shares within the period provided in Section 552.14 of the OTS Regulations, such
holder shall forfeit the right to appraisal of such shares and such shares shall
thereupon be deemed to have
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been converted into and to have become exchangeable for the right to receive the
consideration provided in this AGREEMENT.
SECTION 2.07. SEPARATE EXISTENCE. At and after the EFFECTIVE TIME, the
separate existence of BMF shall cease; provided, however, that whenever a
conveyance, assignment, transfer, deed or other instrument or act is necessary
to vest property or rights in the SURVIVING CORPORATION, the officers of WSL and
BMF shall execute, acknowledge and deliver such instruments and do such acts.
SECTION 2.08. PROPERTY. At and after the EFFECTIVE TIME, all of the
assets and property of every kind and character, real, personal and mixed,
tangible and intangible, chooses in action, rights and credits owned by WSL and
BMF at the EFFECTIVE TIME, or which would inure to any of them, shall
immediately, by operation of law and without any conveyance or transfer and
without any further act or deed, be vested in and become the property of the
SURVIVING CORPORATION, which shall have, hold and enjoy the same in its own
right as fully and to the same extent as the same were possessed, held and
enjoyed by WSL and BMF before the EFFECTIVE TIME. The SURVIVING CORPORATION
shall be deemed to be and shall be a continuation of the entity and identity of
WSL. All of the rights and obligations of WSL or BMF shall not revert or in any
way be impaired by reason of the MERGER. Any claim existing, or action or
proceeding pending, by or against either WSL or BMF, may be prosecuted to
judgment with right of appeal as if the MERGER had not taken place or the
SURVIVING CORPORATION may be substituted in its place.
SECTION 2.09. CREDITOR'S RIGHTS. At and after the EFFECTIVE TIME, all
the rights of creditors of each of WSL and BMF shall be preserved unimpaired,
and all liens upon the property of WSL and BMF shall be preserved unimpaired on
only the property affected by any such lien immediately before the EFFECTIVE
TIME.
SECTION 2.10. SAVINGS DEPOSITS. At the EFFECTIVE TIME and as a result
of the MERGER, each BMF savings deposit or other account then existing shall,
automatically and without further act of WSL or BMF or the holder thereof, be
cancelled and extinguished. In substitution and exchange for each BMF passbook
savings deposit so cancelled and extinguished, the holder thereof shall
automatically receive from the SURVIVING CORPORATION a WSL passbook savings
account with a beginning balance equal in dollar amount to the dollar amount of
the BMF passbook savings deposit account so cancelled and extinguished and
otherwise on the same terms as other WSL passbook savings accounts accepted by
WSL at the EFFECTIVE TIME. In substitution for each BMF savings deposit, other
than a passbook savings deposit, so cancelled and extinguished, the holder
thereof shall automatically receive from the SURVIVING CORPORATION a WSL savings
account with a beginning balance equal in dollar amount to the dollar amount of
the BMF savings deposit account so cancelled and extinguished and otherwise
having the same terms as the BMF savings deposit so cancelled and extinguished.
SECTION 2.11. ACCOUNTS. The holder of each BMF savings deposit or other
account cancelled and extinguished in accordance with Section 2.10 of this
Agreement shall forthwith be entered on the records of the SURVIVING CORPORATION
as the holder of an appropriate WSL savings deposit or other account in an
amount determined as provided in Section 2.10 and,
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until Section 2.12 of this Agreement shall have been complied with, each
passbook, certificate of deposit or other document issued by BMF and evidencing
a BMF savings deposit or other document issued by the EFFECTIVE TIME shall be
deemed, for all purposes, to evidence a savings deposit or other like account of
the SURVIVING CORPORATION.
SECTION 2.12. SURRENDER OF DEPOSIT. Each person who, as a result of the
MERGER, holds a passbook, certificate of deposit or other document issued by BMF
which theretofore evidenced a BMF savings deposit or other account shall
surrender each such passbook, certificate or other document to the SURVIVING
CORPORATION. Upon such surrender, the SURVIVING CORPORATION shall deliver in
substitution therefor an account book or other document evidencing the WSL
savings deposit or other account received by such person in accordance with
Section 2.12 of this Agreement.
ARTICLE THREE
REPRESENTATIONS AND WARRANTIES OF BMF
BMF represents and warrants to WFC and WSL that each of the following
is true and accurate in all material respects:
SECTION 3.01. ORGANIZATION AND STANDING. (a) BMF is a federal savings
bank duly organized, validly existing and in good standing under the laws of the
United States; has the corporate power and authority to own or hold under lease
all of its properties and assets and to conduct its business and operations as
presently conducted; and is a member of the Federal Home Loan Bank of Cincinnati
(hereinafter referred to as the "FHLB of Cincinnati"). The savings accounts and
deposits of BMF are insured up to applicable limits by the Federal Deposit
Insurance Corporation (hereinafter referred to as the "FDIC"). Except as set
forth in Section 3.01 of the schedule delivered by BMF to WFC on December 4,
1998 (hereinafter referred to as the "DISCLOSURE SCHEDULE"), BMF is in
compliance in all material respects with all applicable local, state or federal
laws and regulations, including, without limitation, the regulations of the FDIC
and the OTS.
SECTION 3.02. QUALIFICATION. BMF is either duly qualified to do
business and in good standing in each jurisdiction in which such qualification
is required or the failure to so qualify would not have a material adverse
effect on the business of BMF.
SECTION 3.03. AUTHORITY. (a) Subject to the approval of this AGREEMENT
and the transactions contemplated hereby, including the MERGER, by the BMF
shareholders and by the OTS, (i) BMF has all of the requisite corporate power
and authority to enter into this AGREEMENT and to perform all of its obligations
hereunder; (ii) the execution and delivery of this AGREEMENT and the
consummation of the transactions contemplated hereby have been duly authorized
by all necessary corporate action by BMF; and (iii) this AGREEMENT is the valid
and binding agreement of BMF, enforceable against BMF in accordance with its
terms, (I) subject to applicable bankruptcy, insolvency, reorganization and
moratorium laws and other laws of general applicability affecting the
enforcement of creditors' rights generally and the effect
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of rules of law governing specific performance, injunctive relief and other
equitable remedies on the enforceability of such documents and (II) except to
the extent such enforceability may be limited by laws relating to safety and
soundness of insured depository institutions as set forth in 12 U.S.C. Section
1818(b) or by the appointment of a conservator by the FDIC. This AGREEMENT has
been duly executed and delivered by BMF.
(b) The OTS Regulations and the Charter and Bylaws of BMF
require the approval of this AGREEMENT and the transactions contemplated hereby,
including the MERGER, by the affirmative vote of the holders of two-thirds of
the outstanding common shares of BMF. Neither the OTS Regulations, the Charter
or the Bylaws of BMF, nor any other law or regulation, require any other vote of
the holders of BMF shares in respect of this AGREEMENT or the transactions
contemplated hereby.
(c) BMF has all of the requisite corporate power and authority
to enter into the Stock Option Agreement dated the date hereof by and between
WFC and BMF (hereafter referred to as the "OPTION AGREEMENT"); the execution and
delivery of the OPTION AGREEMENT and the consummation of the transactions
contemplated thereby have been duly authorized by all necessary corporate action
by BMF; and the OPTION AGREEMENT is the valid and binding agreement of BMF,
enforceable against BMF in accordance with its terms, (i) subject to applicable
bankruptcy, insolvency, reorganization and moratorium laws and other laws of
general applicability affecting the enforcement of creditors' rights generally
and the effect of rules of law governing specific performance, injunctive relief
and other equitable remedies on the enforceability of such documents and (ii)
except to the extent such enforceability may be limited by laws relating to
safety and soundness of insured depository institutions as set forth in 12
U.S.C. Section 1818(b) or by the appointment of a conservator by the FDIC.
The OPTION AGREEMENT has been duly executed and delivered by BMF.
SECTION 3.04. GOVERNING DOCUMENTS. BMF has made available or will
promptly make available to WFC true and accurate copies of its Charter and
Bylaws and has granted WFC access to all records of all meetings and other
corporate actions by the shareholders, Board of Directors and Committees of the
Board of Directors of BMF. The minute books of BMF contain, in all material
respects, complete and accurate records of all meetings and other corporate
actions of the BMF shareholders, Board of Directors and Committees of the Board
of Directors.
SECTION 3.05. NO CONFLICTS. The execution and delivery of this
AGREEMENT, the consummation of the transactions contemplated hereby, including
the MERGER (subject to the approval of this AGREEMENT and the transactions
contemplated hereby, including the MERGER, by the BMF shareholders and the OTS),
and the execution and delivery of the OPTION AGREEMENT and the consummation of
the transactions contemplated thereby, will not (a) conflict with or violate any
provision of or result in the breach of any provision of the Charter or Bylaws
of BMF; (b) conflict with or violate any provision of or result in the breach or
the acceleration of or entitle any party to accelerate (whether upon or after
the giving of notice of lapse of time or both) any obligation under, or
otherwise materially affect the terms of, any mortgage, lien, lease, agreement,
license, instrument, order, arbitration award, judgment or decree to which BMF
is a party or by which BMF or its property or assets is bound; (c) require the
consent of any party to any agreement or commitment to which BMF is a party or
by which BMF
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or its property or assets is bound, the failure to obtain which could,
individually or in the aggregate with all the other failures to obtain required
consents, have a material adverse effect on the business, operations, condition
(financial or otherwise) or prospects of BMF; (d) result in the creation or
imposition of any lien, charge, pledge, security interest or other encumbrance
upon any property or assets of BMF or give rise to any meritorious cause of
action against BMF; or (e) violate or conflict with any applicable law,
ordinance, rule or regulation, including, without limitation, the OTS
Regulations and the rules and regulations of the FDIC.
SECTION 3.06. CONSENTS. No consent, approval, order or authorization
of, or registration, declaration or filing with, any governmental authority is
required by BMF in connection with the execution and delivery of this AGREEMENT
by BMF or the consummation by BMF of the transactions contemplated hereby,
including the MERGER, except for filings, authorizations, consents or approvals
required by the OTS. No consent, approval, order or authorization of, or
registration, declaration or filing with, any governmental authority is required
by BMF in connection with the execution and delivery of the OPTION AGREEMENT.
SECTION 3.07. AUTHORIZED CAPITAL. (a) The authorized capital of BMF
consists of 2,000,000 common shares, $1.00 par value per share, 112,307 of which
are issued and outstanding and held of record by approximately 81 shareholders,
and 500,000 preferred shares, $1.00 par value per share, none of which is issued
or outstanding. All of the outstanding common shares of BMF are duly authorized,
validly issued, fully paid and nonassessable; were issued in full compliance
with all applicable laws and regulations, including, but not limited to, the
conversion regulations of the OTS; and were not issued in violation of the
preemptive right of any depositor or shareholder of BMF. BMF has no outstanding
class of capital stock other than such common shares. There are no outstanding
subscription rights, options, conversion rights, warrants or other agreements or
commitments of any nature whatsoever (either firm or conditional) obligating BMF
(i) to issue, deliver or sell, cause to be issued, delivered or sold, or
restricting BMF from selling any additional BMF shares, or (ii) to grant, extend
or enter into any such agreement or commitment. Without limiting the generality
of the foregoing sentence, (I) all of the 10,100 BMF common shares reserved for
issuance upon exercise of stock options granted in accordance with the 1991
Stock Option Plan of BMF (hereinafter referred to as the "1991 Plan") have been
issued and are outstanding as a result of the due and valid exercise of options
duly and validly granted under the 1991 Plan and (II) no options have been
granted under the 1997 Stock Option and Incentive Plan of BMF (hereinafter
referred to as the "1997 Plan") or are outstanding. The BMF Employee Stock
Ownership Plan (hereinafter referred to as the "ESOP") owns of record 10,000
common shares of BMF, all of which have been allocated to the accounts of ESOP
participants. The BenchMark Federal Savings Bank Deferred Compensation Trust
dated December 18, 1997, by and between BMF and The Northside Bank & Trust Co.
(hereinafter referred to as the "TRUST"), owns of record 5,170 common shares of
BMF and holds such common shares for the benefit of five members of the Board of
Directors of BMF, each of whom elected to participate in the TRUST by deferring
directors' fees in accordance with the Amended and Restated Deferred
Compensation Agreements dated December 18, 1997, by and between such directors
and BMF.
(b) On September 24, 1994, BMF filed a Form 15 with the OTS to
deregister the BMF common shares under the Securities Exchange Act of 1934, as
amended. All of the BMF common shares issued after such deregistration were
issued in accordance and compliance
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with Section 563g of the OTS Regulations and were exempt from registration with
the Securities and Exchange Commission (hereinafter referred to as the "SEC") in
accordance with Section 3(a)(2) of the Securities Act of 1933, as amended.
SECTION 3.08. FINANCIAL STATEMENTS. (a) The consolidated statements of
financial condition as of December 31, 1997 and 1996, of BMF and the related
consolidated statements of operations, shareholders' equity and cash flows for
each of the three years then ended, examined and reported upon by Xxxxx Xxxxxxxx
LLP, certified public accountants, complete copies of which have previously been
delivered to WFC (hereinafter referred to as the "AUDITED FINANCIALS"), have
been prepared in conformity with generally accepted accounting principles
applied on a consistent basis and fairly present the consolidated financial
position of BMF at such dates and the consolidated results of its operations and
cash flows for such periods.
(b) The balance sheet as of September 30, 1998, of BMF and the
related income statement for the nine months then ended, complete copies of
which have previously been delivered to WFC (hereinafter referred to as the
"INTERIM FINANCIALS"), fairly present the financial position of BMF at such date
and the results of its operations for such period and have been prepared in
accordance with generally accepted accounting principles as applicable to
condensed consolidated financial statements and as applied on a consistent basis
with the AUDITED FINANCIALS. All adjustments which are necessary for a fair
statement of the INTERIM FINANCIALS have been made.
(c) The Thrift Financial Reports of BMF for the three-month
periods ended March 31, June 30 and September 30, 1998, together with the
schedules and supplements attached thereto, each as filed with the OTS and
copies of which were previously delivered to WFC by BMF (hereinafter referred to
as the "TFRs"), have been prepared in accordance with accounting practices
permitted by the OTS applied on a consistent basis, are true, complete and
correct in all material respects and fairly present the financial position of
BMF at such dates.
(d) Except as disclosed in the INTERIM FINANCIALS, the TFRs
and Section 3.08(d) of the DISCLOSURE SCHEDULE, as of September 30, 1998, BMF
had no liabilities or obligations material to the business condition (financial
or otherwise) of BMF, whether accrued, absolute, contingent or otherwise, and
whether due or to become due.
(e) The AUDITED FINANCIALS, the INTERIM FINANCIALS and the
TFRs did not, as of the dates thereof, contain any untrue statement of a
material fact or omit to state any material fact necessary to make the
information contained therein, in light of the circumstances under which they
were made, not misleading.
SECTION 3.09. CONDUCT OF BUSINESSES. Since December 31, 1997, BMF has
conducted its businesses only in the ordinary and usual course, there have been
no material adverse changes in the financial condition, assets, liabilities,
obligations, properties, business or prospects of BMF and, except as set forth
in any of the AUDITED FINANCIALS, the INTERIM FINANCIALS, the TFRs and Section
3.09 of the DISCLOSURE SCHEDULE, BMF has not:
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(a) Authorized the creation or issuance of, issued, sold
or disposed of, or created any obligation to issue,
sell or dispose of, any stock, notes, bonds or other
securities (including, without limitation, the grant
of any options under the 1997 Plan), or any
obligation convertible into or exchangeable for, any
shares of its capital stock;
(b) Declared, set aside, paid or made any dividend or
other distributions on its capital stock or directly
or indirectly redeemed, purchased or acquired any
shares or entered into any agreement in respect of
the foregoing;
(c) Effected any stock split, recapitalization,
combination, exchange of shares, readjustment or
other reclassification;
(d) Amended its Charter or Bylaws;
(e) Purchased, sold, assigned or transferred any material
tangible asset or any material patent, trademark,
trade name, copyright, license, franchise, design or
other intangible asset or property;
(f) Mortgaged, pledged or granted or suffered to exist
any lien or other encumbrance or charge on any assets
or properties, tangible or intangible, except for
liens for taxes not yet due and payable and such
other liens, encumbrances or charges which do not
materially adversely affect its financial position;
(g) Waived any rights of material value or cancelled any
material debts or claims;
(h) Incurred any material obligation or liability
(absolute or contingent), including, without
limitation, any tax liability or any liability for
borrowings from the FHLB of Cincinnati, or paid any
material liability or obligation (absolute or
contingent) other than liabilities and obligations
incurred in the ordinary course of business;
(i) Experienced any material change in the amount or
general composition of its deposit liabilities or its
loan portfolio;
(j) Entered into or amended any employment contract with
any of its officers, increased the compensation
payable to any officer or director or any relative of
any such officer or director, or become obligated to
increase any such compensation, adopted or amended in
any material respect any employee benefit plans,
severance plan or collective bargaining agreement or
made any awards or distributions under any employee
benefit plans not consistent with past practice or
custom;
(k) Incurred any damage, destruction or similar loss, not
covered by insurance, materially affecting its
businesses or properties;
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(l) Acquired any stock or other equity interest in any
corporation, partnership, trust, joint venture or
other entity;
(m) Made any (I) material investment (except investments
made in the ordinary course of business) or (II)
material capital expenditure or commitment for any
material addition to property, plant or equipment;
(n) Taken or permitted any action which would prevent WFC
from accounting for the MERGER as a "pooling of
interests";
(o) Authorized any allocation by the ESOP of any BMF
common shares to the accounts of participants; or
(p) Agreed, whether in writing or otherwise, to take any
action described in this Section 3.09.
SECTION 3.10. PROPERTIES. (a) A description of all personal property
and fixed assets owned by BMF is set forth in Section 3.10(a) of the DISCLOSURE
SCHEDULE (hereinafter referred to as the "PERSONAL PROPERTY"). All PERSONAL
PROPERTY has been maintained in good working order, ordinary wear and tear
excepted. BMF owns and has good title to all of the PERSONAL PROPERTY, free and
clear of any mortgage, lien, pledge, charge, claim, conditional sales or other
agreement, lease, right or encumbrance, except (i) as set forth in Section
3.10(a) of the DISCLOSURE SCHEDULE, (ii) to the extent stated or reserved
against in the AUDITED FINANCIALS or the INTERIM FINANCIALS and (iii) such other
exceptions which are not material in character or amount and do not materially
detract from the value of or interfere with the use of the properties or assets
subject thereto or affected thereby.
(b) The documentation (hereinafter referred to as "LOAN
DOCUMENTATION") governing or relating to the loan and credit-related assets
(hereinafter referred to as the "LOAN ASSETS") included within the loan
portfolio of BMF is legally sufficient in all material respects for the purposes
intended thereby and creates enforceable rights in favor of BMF in accordance
with the terms of such LOAN DOCUMENTATION, subject to applicable bankruptcy,
insolvency, reorganization and moratorium laws and other laws of general
applicability affecting the enforcement of creditors' rights generally, and the
effect of rules of law governing specific performance, injunctive relief and
other equitable remedies on the enforceability of such documents. The LOAN
DOCUMENTATION is in compliance with, and each of the loans included within the
loan portfolio of BMF has been processed, closed and administered in conformance
with, all applicable federal consumer protection statutes and regulations,
including without limitation, the Truth in Lending Act, the Equal Credit
Opportunity Act and the Real Estate Settlement Procedures Act. Except as set
forth in Section 3.10(b) of the DISCLOSURE SCHEDULE, to the best knowledge of
BMF, no debtor under any of the LOAN DOCUMENTATION has asserted any claim or
defense with respect to the subject matter thereof.
(c) A description of each parcel of real property owned
by BMF is set forth in Section 3.10(c) of the DISCLOSURE SCHEDULE (hereinafter
referred to individually as a
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"PARCEL" and collectively as the "REAL PROPERTIES"). BMF is the owner of each
PARCEL in fee simple and has good and marketable title to each such PARCEL, free
of any liens, claims, charges, encumbrances or security interests of any kind,
except (i) as set forth in Section 3.10(c) of the DISCLOSURE SCHEDULE, (ii)
liens for real estate taxes and assessments not yet delinquent and (iii)
utility, access and other easements, rights of way, restrictions and exceptions
which have been disclosed to BMF in writing, none of which impair the REAL
PROPERTIES for the use and business being conducted thereon.
(d) Except as set forth in Section 3.10(d) of the DISCLOSURE
SCHEDULE, no party leasing any of the REAL PROPERTIES from BMF is in material
default with respect to any of its obligations (including payment obligations)
under the governing lease. BMF has not received notification from any
governmental entity within the two year period immediately preceding the date
hereof of contemplated improvements to the REAL PROPERTIES or surrounding area
or community by public authority, the costs of which are to be assessed as
special taxes against the REAL PROPERTIES in the future.
(e) A description of all real property leased by BMF is set
forth in Section 3.10(e) of the DISCLOSURE SCHEDULE (hereinafter referred to as
the "LEASED REAL PROPERTY"). True and correct copies of all leases in respect of
the LEASED REAL PROPERTY (hereinafter referred to as the "REAL PROPERTY LEASES")
and all attachments, amendments and addendums thereto have been delivered to
WFC. Except as set forth in Section 3.10(e) of the DISCLOSURE SCHEDULE, the REAL
PROPERTY LEASES create, in accordance with their terms, valid, binding and
assignable leasehold interests of BMF in all of the LEASED REAL PROPERTY, free
and clear of all liens, claims, charges, encumbrances or security interests of
any kind. BMF has complied in all material respects with all of the provisions
of the REAL PROPERTY LEASES required on its part to be complied with and is not
in default with respect to any of its obligations (including payment
obligations) under any of the REAL PROPERTY LEASES.
(f) A description of all personal property leased by BMF is
set forth in Section 3.10(f) of the DISCLOSURE SCHEDULE (hereinafter referred to
as the "LEASED PERSONAL PROPERTY"). True and correct copies of the leases in
respect of the LEASED PERSONAL PROPERTY (hereinafter referred to as the
"PERSONAL PROPERTY LEASES") and all attachments, amendments and addendums
thereto have been delivered to WFC. Except as set forth in Section 3.10(f) of
the DISCLOSURE SCHEDULE, the PERSONAL PROPERTY LEASES create, in accordance with
their terms, valid, binding and assignable leasehold interests of BMF in all of
the LEASED PERSONAL PROPERTY, free and clear of all liens, claims, charges,
encumbrances or security interests of any kind. BMF has complied in all material
respects with all of the provisions under the PERSONAL PROPERTY LEASES required
on its part to be complied with and is not in default with respect to any of its
obligations (including payment obligations) under any of the PERSONAL PROPERTY
LEASES.
(g) Section 3.10(g) of the DISCLOSURE SCHEDULE contains a
complete list of all contracts (hereinafter referred to as the "LOAN SALE
CONTRACTS") pursuant to which BMF has sold loans to third party investors at any
time within the last twenty-four months. Except as otherwise set forth in
Section 3.10(g) of the DISCLOSURE SCHEDULE, (i) no
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purchaser under any LOAN SALE CONTRACT has requested, or notified BMF that it
may be requesting, that BMF repurchase any loan pursuant to the terms of the
LOAN SALE CONTRACT and (ii) no facts exist that would require BMF to repurchase
any loans previously sold under any LOAN SALE CONTRACT.
SECTION 3.11. ALLOWANCE FOR LOAN LOSSES. Except as set forth in Section
3.11 of the DISCLOSURE SCHEDULE, there is no loan which was made by BMF and
which is reflected as an asset of BMF on the AUDITED FINANCIALS or the INTERIM
FINANCIALS that (i) is sixty (60) days or more delinquent or (ii) has been
classified by examiners (regulatory or internal) as "Substandard," "Doubtful" or
"Loss".
SECTION 3.12. INVESTMENTS. (a) Section 3.12(a) of the DISCLOSURE
SCHEDULE contains (i) a true, accurate and complete list of all investments,
other than investments in the LOAN ASSETS and REAL PROPERTIES, owned by BMF
(hereinafter referred to as the "INVESTMENTS") as of the date hereof, the name
of the registered holder thereof, the location of the certificates therefor or
other evidence thereof and any stock powers or other authority for transfer
granted with respect thereto and (ii) a true, accurate and complete list of the
names of each bank or other depository in which BMF has an account or safe
deposit box, including, without limitation, accounts with the FHLB of
Cincinnati, and the names of all persons authorized to draw thereon or to have
access thereto. Except as set forth in Section 3.12(a) of the DISCLOSURE
SCHEDULE, the INVESTMENTS, other than any such investments disposed of in the
ordinary course of business prior to the date hereof, are owned by BMF, free and
clear of all liens, pledges, claims, security interests, encumbrances, charges
or restrictions of any kind and may be freely disposed of by BMF at any time.
BMF is not a party to and has no interest in any repurchase agreement, reverse
repurchase agreement, collateralized mortgage obligation or any other derivative
security.
(b) With the exception of equity interests in the FHLB of
Cincinnati and Celestial Service Corporation, an Ohio corporation (hereinafter
referred to as "CSC"), BMF does not own of record or beneficially the
outstanding shares of, or any equity interest in, any corporation or other
business entity.
(c) CSC is a corporation duly organized, validly existing and
in good standing under the laws of Ohio; has the corporate power and authority
to conduct its business as presently conducted; and is duly and validly formed
as a service corporation under, and is in full compliance with, Section 545.72
of the OTS Regulations. All of the issued and outstanding and are owned of
record and beneficially by BMF. All of the outstanding shares of CSC are duly
authorized, validly issued, fully paid and nonassessable and were issued in full
compliance with all applicable laws and regulations. CSC has no outstanding
class of capital stock other than common shares. There are no outstanding
subscription rights, options, conversion rights, warrants or other guarantees or
commitments of any nature whatsoever obligating CSC to issue, deliver or sell,
cause to be issued, delivered or sold, or obligating BMF to grant, extend or
enter into any such agreement or commitment. CSC has not engaged in any business
activity since December 31, 1990; does not own of record or beneficially any
real or personal property or any other assets of any kind; does not have any
liabilities of any kind, whether accrued, contingent or remote; and is not a
party to any agreement, contract, commitment or other obligation.
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SECTION 3.13. REPORTS AND RECORDS. BMF has filed all reports and
maintained all records required to be filed or maintained by it under various
rules and regulations of the OTS and the FDIC. All such documents and reports
complied in all material respects with applicable requirements of law and
regulations in effect at the time of filing such documents and contained in all
material respects the information required to be stated therein. None of such
documents, when filed, contained any untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under which
they were made, not misleading.
SECTION 3.14. TAXES. Except as set forth in Section 3.14 of the
DISCLOSURE SCHEDULE, BMF has duly and timely filed all federal, state, county
and local income, profits, franchise, excise, sales, customs, property, use,
occupation, withholding, social security and other tax and information returns
and reports required to have been filed by BMF through the date hereof, and has
paid or accrued all taxes and duties (and all interest and penalties with
respect thereto) due or claimed to be due. BMF has no liability for any taxes or
duties (or interest or penalties with respect thereto) of any nature whatsoever
and there is no basis for any additional material claims or assessments, other
than with respect to liabilities for taxes and duties which are reflected in the
INTERIM FINANCIALS or which may have accrued since September 30, 1998, in the
ordinary course of business. The federal income tax returns of BMF for all
taxable years through and including the year ended December 31, 1994, have been
examined by the federal tax authorities or the applicable statute of limitations
has expired in respect thereof. No proposed additional taxes, interest or
penalties have been asserted by applicable taxing authorities with respect to
such years or later years, except for claims which have been fully reserved for
in the AUDITED FINANCIALS and the INTERIM FINANCIALS. True copies of the
federal, state and local income tax returns of BMF for each of the three (3) tax
years ended December 31, 1995, 1996 and 1997 have been delivered to WFC.
SECTION 3.15. MATERIAL CONTRACTS. (a) Except as set forth in Section
3.15(a) of the DISCLOSURE SCHEDULE, BMF is not a party to or bound by any
written or oral (i) contract or commitment for capital expenditures in excess of
$5,000 for any one project or $10,000 in the aggregate; (ii) contract or
commitment made in the ordinary course of business for the purchase of materials
or supplies or for the performance of services involving payments to or by BMF
of an amount exceeding $5,000 in the aggregate or extending for more than six
(6) months from the date hereof; (iii) contract or option for the purchase of
any property, real or personal; (iv) letter of credit or indemnity calling for
payment, upon the conditions stated therein, of more than $10,000; (v) guarantee
agreement; (vi) instrument granting any person authority to transact business on
behalf of BMF; (vii) contracts or commitments relating to outstanding loans
and/or commitments to make loans (including unfunded commitments and lines of
credit) to any one person (together with "affiliates" of that person) in excess
of $150,000 in the aggregate; (viii) employment, management, consulting,
deferred compensation, severance or other similar contract with any director,
officer or employee of BMF; (ix) note, debenture or loan agreement pursuant to
which BMF has incurred indebtedness, other than deposit liabilities and advances
from the FHLB of Cincinnati; (x) loan participation agreement; (xi) loan
servicing agreement; (xii) contract or commitment relating to a real estate
development project consisting of the development of more than one single family
dwelling; (xiii) commitment to make any acquisition, development or construction
loan; (xiv) commitment or agreement to do any of the foregoing; or (xv) other
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contract, agreement or commitment made outside the ordinary course of business
(contracts set forth in Section 3.15 of the DISCLOSURE SCHEDULE are hereinafter
collectively referred to as the "CONTRACTS"). BMF previously delivered to WFC
(i) all of the CONTRACTS and (ii) all form lending agreements and deposit forms
used by BMF in the ordinary course of business.
(b) BMF is not in material default under any of the contracts
or agreements to which either is a party and no claim of such default by any
party has been made or is now threatened. There does not exist any event which,
with notice or the passing of time or both, would constitute a material default
under, or would excuse performance by any party thereto from, any contract or
agreement to which BMF is a party.
SECTION 3.16. INSURANCE. All material properties and operations of BMF
are adequately insured for its benefit. The performance by the officers and
employees of BMF of their duties is bonded in such amounts and against such
risks as are usually insured against or bonded by entities similarly situated,
under valid and enforceable policies of insurance or bonds issued by insurers or
bonding companies of recognized responsibility, financial or otherwise.
SECTION 3.17. ACTIONS AND SUITS. Except as set forth in Section 3.17 of
the DISCLOSURE SCHEDULE, there are no actions, suits or proceedings or
investigations pending or, to the knowledge of BMF, threatened against or
affecting the business, operations or financial condition of BMF in any court or
before any federal, state, municipal or other governmental department,
commission, board, bureau, agency or instrumentality, and management of BMF has
no knowledge of any basis for any such action, suit, proceeding or
investigation. Except as set forth in Section 3.17 of the DISCLOSURE SCHEDULE,
BMF is not in default in respect of any judgment, order, writ, injunction or
decree of any court or any federal, state, municipal or other governmental
department, commission, board, bureau, agency or instrumentality.
SECTION 3.18. PERMITS AND LICENSES. BMF has all material permits,
licenses, orders and approvals of all federal, state or local governmental or
regulatory bodies required for BMF to conduct its business as presently
conducted, and all such material permits, licenses, orders and approvals are in
full force and effect, without the threat of suspension or cancellation. None of
such permits, licenses, orders or approvals will be adversely affected by the
consummation of the transactions contemplated by this AGREEMENT.
SECTION 3.19. EMPLOYEE BENEFIT PLANS; ERISA. (a) Section 3.19 of the
DISCLOSURE SCHEDULE contains a true and complete list of all qualified pension
or profit-sharing plans, deferred compensation, consulting, bonus, group
insurance plans or agreements and all other incentive, welfare or employee
benefit plans or agreements maintained for the benefit of employees or former
employees of BMF (hereinafter collectively referred to as the "PLANS"). Copies
of such PLANS, together with copies of (i) the most recent actuarial and
financial reports prepared with respect to any qualified plans, (ii) the most
recent annual reports filed with any governmental agency and (iii) all rulings
and determination letters and any open requests for rulings or letters that
pertain to any qualified plan, have been delivered to WFC.
(b) Each PLAN which constitutes an "employee pension plan," as
defined in Section 3(2) of the Employee Retirement Income Security Act of 1974,
as amended (hereinafter
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referred to as "ERISA"), is and has been administered in material compliance
with its governing documents and the applicable provisions of ERISA and any such
employee pension plan which is intended to be qualified under the provisions of
Section 401(a) of the Internal Revenue Code of 1986, as amended (hereinafter
referred to as the "CODE"), is and has been administered in material compliance
with the applicable provisions of the CODE.
(c) Each PLAN which constitutes an "employee welfare benefit
plan," as defined in Section 3(1) of ERISA, is and has been administered in
material compliance with its governing documents and the applicable provisions
of ERISA and each PLAN which constitutes a "group health plan," as defined in
Section 5000(b)(1) of the CODE, is and has been administered in material
compliance with the continuation of coverage provisions contained in Section
4980B of the CODE.
(d) Each PLAN which is not an "employee benefit plan," as
defined in Section 3(3) of ERISA, is and has been administered in material
compliance with its governing documents and with any and all state or federal
laws applicable to such PLAN.
(e) BMF does not maintain any "employee pension plan" (as
defined above) which is subject to the provisions of Title IV of ERISA.
(f) BMF does not maintain any PLAN which provides
post-retirement medical, dental or life insurance benefits to any former
employee of BMF obligated to provide any such benefit to any current employee
upon his or her retirement.
(g) BMF does not participate in, nor incurred any liability
under, Section 4201 of ERISA for a complete or partial withdrawal from a
multiemployer plan as such term is defined in Section 3(37) of ERISA.
(h) Neither BMF, nor any PLAN maintained by BMF, nor any
fiduciary of any such PLAN, has incurred any material liability to the Pension
Benefit Guaranty Corporation, the United States Department of Labor or to the
Internal Revenue Service (hereinafter referred to as the "IRS") with respect to
a PLAN.
(i) No prohibited transaction (which shall mean any
transaction prohibited by Section 406 of ERISA and not exempt under Section 408
of ERISA) has occurred with respect to any "employee benefit plan" (as defined
above) maintained by BMF (i) which would result in the imposition, directly or
indirectly, of an excise tax under Section 4975 of the CODE or (ii) the
correction of which would have a material adverse effect on the financial
condition, results of operations or business of BMF.
(j) Each employee pension plan (as defined above) which is
intended to be an employee stock ownership plan, as defined in Section
4975(e)(7) of the CODE, is and has been administered in substantial compliance
with the applicable provisions of Sections 4975 and 409 of the CODE and the
regulations promulgated by the IRS thereunder; and, any outstanding loan to
which any such employee stock ownership plan is a party constitutes an "exempt
loan," as described in Section 54.4975-7 of the regulations promulgated by the
IRS.
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SECTION 3.20. ENVIRONMENTAL PROTECTION. (a) Except as set forth in
Section 3.20 of the DISCLOSURE SCHEDULE, (i) each of BMF, the BMF PROPERTY
(hereinafter defined) and the COLLATERAL PROPERTY (hereinafter defined) is, and
has been at all times, in full compliance with all applicable ENVIRONMENTAL LAWS
(hereinafter defined); (ii) no investigations, inquiries, orders, hearings,
actions or other proceedings by or before any court or governmental agency have
been issued, are pending or, to the knowledge of BMF, threatened against BMF or
in connection with the BMF PROPERTY or the COLLATERAL PROPERTY; (iii) no claims
have been made or, to the knowledge of BMF, threatened at any time against BMF
or in connection with the BMF PROPERTY or the COLLATERAL PROPERTY relating to
actual or alleged violation of any ENVIRONMENTAL LAW or relating to damage,
contribution, cost recovery, compensation, loss or injury resulting from any
HAZARDOUS SUBSTANCE (hereinafter defined) and no past or present actions,
activities, conditions, events or incidents, including, without limitation, the
release, emission, discharge or disposal of, or exposure to, any HAZARDOUS
SUBSTANCE have occurred that could reasonably form the basis of any such claims
against BMF or in connection with the BMF PROPERTY or the COLLATERAL PROPERTY;
(iv) no HAZARDOUS SUBSTANCES have been integrated into any BMF PROPERTY or
COLLATERAL PROPERTY or any component thereof in violation of ENVIRONMENTAL LAWS,
or which will in the future require remediation during renovation or demolition,
or in such quantities and manner as may or do pose a threat to human health; (v)
no portion of any BMF PROPERTY or COLLATERAL PROPERTY is located within 2000
feet of (I) a release of HAZARDOUS SUBSTANCES which has been reported or is
required to be reported under any ENVIRONMENTAL LAW or (II) the location of any
site used, in the past or presently, for the disposal of any HAZARDOUS
SUBSTANCES; (vi) neither the BMF PROPERTY nor the COLLATERAL PROPERTY has been
used for the storage, disposal or treatment of HAZARDOUS SUBSTANCES, has been
contaminated by HAZARDOUS SUBSTANCES, or has been used for the storage or use of
any underground or aboveground storage tanks; and (vii) all permits,
registrations and other authorizations necessary for BMF, the BMF PROPERTY and
the COLLATERAL PROPERTY to operate in full compliance with all ENVIRONMENTAL
LAWS are currently in force and are identified in Section 3.20 of the DISCLOSURE
SCHEDULE.
(b) Section 3.20 of the DISCLOSURE SCHEDULE sets forth an
accurate and complete list of all outstanding loans of BMF as to which the
borrower has submitted to BMF, the borrower or another person is required to
submit, or which BMF otherwise has in its possession, any environmental audits,
site assessments, analyses, studies or surveys of environmental conditions on
any matter, including, but not limited to, any COLLATERAL PROPERTY. BMF shall
make available to WFC all such documents within ten (10) business days after the
effective date of this Agreement.
(c) As used in this Section 3.20:
(i) "BMF PROPERTY" means all real and person
property now or previously owned, leased,
occupied or managed by BMF or any person or
entity whose liability for any matter has or
may have been related or assumed by BMF
either contractually or by operation of law.
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(ii) "COLLATERAL PROPERTY" means all real and
personal property in which BMF holds a
security interest in connection with a loan
or loan participation.
(iii) "ENVIRONMENTAL LAWS" means all federal,
state, local and other laws, regulations,
rules, standards, ordinances, orders,
decrees, and judgments relating to
pollution, the environment, occupational
health and safety, or the protection of
human health, all as may be from time to
time amended.
(iv) "HAZARDOUS SUBSTANCES" means any and all
substances or materials which are classified
or considered to be hazardous or toxic to
human health or the environment under any
applicable ENVIRONMENTAL LAWS and shall
include, without limitation, any "hazardous
substances" as defined in Section 101(14) of
CERCLA (42 USC Section 9601(14)) or
regulations promulgated thereunder, any
"toxic and hazardous substances" as defined
in 29 CFR Part 1910, petroleum and its
byproducts, asbestos, polychlorinated
biphenyls, nuclear fuel or materials, lead
and lead-containing substances, and
urea-formaldehyde.
SECTION 3.21. EMPLOYMENT MATTERS. BMF is in compliance with all
federal, state or other applicable laws respecting employment and employment
practices, terms and conditions of employment and wages and hours, including,
but not limited to, Title VII of the Civil Rights Act of 1964 (as amended by the
Equal Employment Opportunity Act of 1972), the Civil Rights Act of 1991, the Age
Discrimination in Employment Act of 1967, the Employee Retirement Income
Security Act, 29 U.S.C. Section 1001 et seq., 42 U.S.C. Section 1981, the Older
Workers Benefit Protection Act, the Americans with Disabilities Act, Ohio
Revised Code Sections 4112.01 et seq., and the Fair Labor Standards Act; and has
not and is not engaged in any unfair labor practice, except where such failure
to comply would not have, or such practice would not have, a material adverse
effect on the financial condition, results of operations, business or prospects
of BMF. No unfair labor practice complaint against BMF is pending before any
governmental agency or court and there is no labor strike, dispute, slowdown or
stoppage actually pending or, to the knowledge of BMF, threatened against or
involving BMF. No representation question exists in respect of the employees of
BMF and no labor grievance which might have a material adverse effect upon BMF
or the conduct of its businesses is pending or, to the knowledge of BMF,
threatened. No arbitration proceeding arising out of or under any collective
bargaining agreement is pending and no claim therefore has been asserted against
BMF. No collective bargaining agreement is currently being negotiated by BMF.
BMF has not experienced any material labor difficulty during the last three
years.
SECTION 3.22. UNTRUE STATEMENTS AND OMISSIONS. The certificates,
statements and other information furnished to WFC in writing by or on behalf of
BMF in connection with the transactions contemplated hereby, including, but not
limited to, disclosures and information set forth in the DISCLOSURE SCHEDULE, do
not contain any untrue statement of a material fact
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or omit to state a material fact necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading.
SECTION 3.23. PROXY MATERIALS. None of the information relating to BMF
included in any proxy statement which is to be mailed to the shareholders of BMF
in connection with any meeting of shareholders convened in accordance with
Section 6.04 of this AGREEMENT (hereinafter referred to as the "PROXY
STATEMENT") will, at the time the PROXY STATEMENT is mailed or at the time of
the meeting of shareholders to which the PROXY STATEMENT relates, be false or
misleading with respect to any material fact, or omit to state any material fact
necessary in order to make the statements therein not false or misleading, or at
the time of the meeting of shareholders to which the PROXY STATEMENT relates,
necessary to correct any statement which has become false or misleading. The
legal responsibility for the contents of the PROXY STATEMENT (other than
information supplied by WFC or WSL concerning WFC or WSL) shall be and remain
with BMF.
SECTION 3.24. BROKERS. All negotiations relating to this AGREEMENT and
the transactions contemplated hereby have been carried on without the
intervention of any person, other than Xxxxxxx Xxxx & Company, a division of
Xxxxx, Xxxxxxxx & Xxxxx, Inc. (hereinafter referred to as "XXXX"), acting on
behalf of BMF in such manner as to give rise to any valid claim against BMF for
any broker's or finder's fee or similar compensation.
SECTION 3.25. STOCK OWNERSHIP. Neither BMF nor any of its "affiliates"
or "associates", as the terms "affiliates" and "associates" are defined in
Section 1704.01(C)(1) of the ORC, are "beneficial owners", as the term
"beneficial owners" is defined in Section 1704.01(C)(4) of the ORC, of any of
the outstanding shares of any class of shares of WFC.
SECTION 3.26. YEAR 2000. (a) All devices, systems, machinery,
information technology, computer software and hardware, and other date sensitive
technology owned or leased by BMF (hereinafter referred to as the "Systems")
necessary for BMF to carry on its business as presently conducted and as
contemplated to be conducted in the future either (i) are a Year 2000 Compliant
(hereinafter defined) or (ii) will be Year 2000 Compliant within a period of
time calculated to result in no material disruption of any of BMF's business
operations. For purposes of this Section 3.26, "Year 2000 Compliant" means that
such Systems are designed to be used prior to, during and after the Gregorian
calendar year 2000 A.D. and will operate during each such time period without
error relating to date data, specifically including any error relating to, or
the product of, date data which represents or references different centuries or
more than one century.
(b) BMF has (i) undertaken a detailed inventory, review and
assessment of all areas within its business and operations that could be
adversely affected by the failure of BMF to be Year 2000 Compliant on a timely
basis; (ii) developed a detailed plan and time line for becoming Year 2000
Compliant on a timely basis; and (iii) to date, implemented that plan in
accordance with that timetable in all material respects.
(c) BMF has made inquiry of each of its key suppliers, vendors
and customers and has obtained confirmations from all such persons as to whether
such persons have initiated
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programs to become Year 2000 Compliant and on the basis of such confirmations,
BMF reasonably believes that all such persons will be or try to become so
compliant or make other suitable arrangements so as not to likely cause a
material disruption of business. For purposes of this paragraph, "key customers
of BMF whose business failure would, with reasonable probability, result in a
material adverse financial change in the business, properties, or condition of
BMF.
ARTICLE FOUR
REPRESENTATIONS AND WARRANTIES OF WFC AND WSL
WFC and WSL represent and warrant to BMF that each of the following is
true and accurate in all material respects:
SECTION 4.01. ORGANIZATION AND STANDING. (a) WFC is a corporation duly
organized, validly existing and in good standing under the laws of Ohio and has
the corporate power and authority to conduct its business and operations as
presently conducted. WFC is registered as a savings and loan holding company
under the Home Owners' Loan Act.
(b) WSL is a savings and loan association duly organized,
validly existing and in good standing under the laws of Ohio; has the corporate
power and authority to conduct its business and operations as presently
conducted; and is a member of the FHLB of Cincinnati. The savings accounts and
deposits of WSL are insured up to applicable limits by the FDIC.
(c) WFC and WSL are in compliance in all material respects
with all applicable local, state or federal laws and regulations, including,
without limitation, the regulations of the OTS.
SECTION 4.02. QUALIFICATION. WFC and WSL are either duly qualified to
do business and in good standing in each jurisdiction in which such
qualification is required or the failure to so qualify would not have a material
adverse effect on the business of WFC and WSL.
SECTION 4.03. AUTHORITY. Subject to the approval of the MERGER by the
OTS and the DIVISION, (a) WFC and WSL have all requisite corporate power and
authority to enter into this AGREEMENT and to perform their obligations
hereunder; (b) the execution and delivery of this AGREEMENT and the consummation
of the transactions contemplated hereby have been duly authorized by all
necessary corporate action by WFC and WSL; and (c) this AGREEMENT is a valid and
binding agreement of WFC and WSL, enforceable against them in accordance with
its terms, (i) subject to applicable bankruptcy, insolvency, reorganization and
moratorium laws and other laws of general applicability affecting the
enforcement of creditors' rights generally, and the effect of rules of law
governing specific performance, injunctive relief and other equitable remedies
on the enforceability of such documents and (ii) except to the extent such
enforceability may be limited by laws relating to safety and soundness of
insured depository institutions as set forth in 12 U.S.C. Section 1818(b) or by
the appointment of a conservator by the FDIC. This AGREEMENT has been duly
executed and delivered by WFC and XXX.
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SECTION 4.04. GOVERNING DOCUMENTS. WFC has made available or will
promptly make available to BMF true and accurate copies of the WFC Articles of
Incorporation, as amended, and Code of Regulations and the WSL Amended Articles
of Incorporation and Amended Constitution and has granted BMF access to all
records of all meetings and other corporate actions occurring before the
EFFECTIVE TIME by the shareholders, Board of Directors and Committees of the
Board of Directors of WFC and WSL. The minute books of WFC and WSL contain, in
all material respects, complete and accurate records of all meetings and other
corporate actions of their shareholders, Boards of Directors and Committees of
the Boards of Directors.
SECTION 4.05. NO CONFLICTS. The execution and delivery of this
AGREEMENT and, subject to the approval of the MERGER by the OTS and the
DIVISION, the consummation of the transactions contemplated hereby will not (a)
conflict with or violate any provision of or result in the breach of any
provision of the Articles of Incorporation, as amended, or Code of Regulations
of WFC or the Amended Articles of Incorporation or Amended Constitution of WSL;
(b) conflict with or violate any provision of or result in the breach or the
acceleration of or entitle any party to accelerate (whether upon or after the
giving of notice of lapse of time or both) any obligation under, or otherwise
materially affect the terms of, any mortgage, lien, lease, agreement, license,
instrument, order, arbitration award, judgment or decree to which WFC or WSL is
a party or by which WFC or WSL or their property or assets is bound; (c) require
the consent of any party to any agreement or commitment to which WFC or WSL is a
party or by which WFC or WSL or their property or assets is bound, the failure
to obtain which could, individually or in the aggregate with all the other
failures to obtain required consents, have a material adverse effect on the
business, operations, condition (financial or otherwise) or prospects of WFC or
WSL; (d) result in the creation or imposition of any lien, charge, pledge,
security interest or other encumbrance upon any property or assets of WFC or WSL
or give rise to any meritorious cause of action against WFC or WSL; or (e)
violate or conflict with any applicable law, ordinance, rule or regulation,
including, without limitation, the rules and regulations of the OTS, the
DIVISION and/or the FDIC.
SECTION 4.06. CONSENTS. No consent, approval, order or authorization
of, or registration, declaration or filing with, any governmental authority is
required in connection with the execution and delivery of this AGREEMENT by WFC
or WSL or the consummation by WFC or WSL of the transactions contemplated
hereby, except for filings, authorizations, consents or approvals required by
the SEC, the OTS, the Ohio Secretary of State and the DIVISION.
SECTION 4.07. AUTHORIZED CAPITAL OF WFC. On the date hereof, the
authorized capital of WFC consists of (a) 5,000,000 common shares, without par
value, 4,014,304 of which are issued and outstanding and 481,000 of which are
reserved for issuance upon exercise of outstanding stock options (hereinafter
referred to as the "XXXXXX OPTIONS"), and (b) 2,000,000 preferred shares,
without par value, none of which is issued or outstanding. All of the
outstanding common shares of WFC are duly authorized, validly issued, fully paid
and nonassessable; were issued in full compliance with all applicable laws; and
were not issued in violation of the preemptive right of any shareholder of WFC.
WFC has no outstanding class of capital stock other than such common shares.
Except for the XXXXXX OPTIONS and as disclosed in writing on the date of this
AGREEMENT to BMF (hereinafter referred to as the "WFC LETTER"), there are no
outstanding subscription rights, options, conversion rights,
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warrants or other agreements or commitments of any nature whatsoever (either
firm or conditional) obligating WFC to issue, deliver or sell, cause to be
issued, delivered or sold, or restricting WFC from selling any additional WFC
shares, or obligating WFC to grant, extend or enter into any such agreement or
commitment.
SECTION 4.08. SEC REPORTS. WFC has delivered to BMF copies of the
following documents, each of which has been filed with the SEC (hereinafter
referred to as the "SEC FILINGS"):
(a) The WFC Annual Reports on Form 10-K for the fiscal
years ended September 30, 1997, 1996 and 1995;
(b) The Annual Reports to Shareholders for the fiscal
years ended September 30, 1997, 1996 and 1995;
(c) The Proxy Statements for use in connection with the
1998, 1997 and 1996 Annual Meetings of Shareholders;
and
(d) The Quarterly Reports on Form 10-Q for the quarters
ended December 31, 1997 and March 31 and June 30,
1998.
The SEC FILINGS did not, as of the dates on which such reports were filed with
the SEC, contain any untrue statement of a material fact or omit any material
fact required to be stated therein or necessary to make the statements contained
therein, in light of the circumstances under which they were made, not
misleading.
SECTION 4.09. FINANCIAL STATEMENTS. (a) The consolidated statements of
financial condition as of September 30, 1997 and 1996, of WFC and the related
consolidated statements of earnings, shareholders' equity and cash flows for
each of the three years then ended, examined and reported upon by Xxxxx Xxxxxxxx
LLP, certified public accountants, complete copies of which have previously been
delivered to BMF (hereinafter referred to as the "WFC AUDITED FINANCIALS"), have
been prepared in conformity with generally accepted accounting principles
applied on a consistent basis and fairly present the financial position of WFC
at such dates and the results of its operations and cash flows for such periods.
(b) The consolidated statement of financial condition as
of June 30, 1998, of WFC and the related consolidated statements of earnings,
shareholders' equity and cash flows for the nine months then ended, complete
copies of which have previously been delivered to BMF (hereinafter referred to
as the "WFC INTERIM FINANCIALS"), fairly present the financial position of WFC
at such date and the results of its operations and cash flows for such period
and have been prepared in accordance with generally accepted accounting
principles as applicable to condensed consolidated financial statements and as
applied on a consistent basis with the WFC AUDITED FINANCIALS. All adjustments
which are necessary for a fair statement of the WFC INTERIM FINANCIALS have been
made.
(c) Except as disclosed in the WFC INTERIM FINANCIALS, as
of June 30, 1998, WFC had no liabilities or obligations material to the business
condition (financial or
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otherwise) of WFC taken as a whole, whether accrued, absolute, contingent or
otherwise, and whether due or to become due.
(d) The WFC AUDITED FINANCIALS and the WFC INTERIM
FINANCIALS did not, as of the dates thereof, contain any untrue statement of a
material fact or omit to state any material fact necessary to make the
information contained therein, in light of the circumstances under which they
were made, not misleading.
SECTION 4.10. CONDUCT OF BUSINESS. Except as disclosed in the WFC
LETTER, since June 30, 1998, WFC and WSL have conducted their business only in
the ordinary and usual course and there have been no material adverse changes in
the financial condition, assets, liabilities, obligations, properties, business
or prospects of WFC and WSL.
SECTION 4.11. REPORTS AND RECORDS. WFC and WSL have filed all reports
and maintained all records required to be filed or maintained by them under
various rules and regulations of the SEC, OTS, FDIC and the DIVISION. All such
documents and reports complied in all material respects with applicable
requirements of law and regulations in effect at the time of the filing of such
documents and contained in all material respects the information required to be
stated therein. None of such documents, when filed, contained any untrue
statement of a material fact or omitted to state a material fact required to be
stated therein or necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading.
SECTION 4.12. ACTIONS AND SUITS. Except as set forth in the SEC FILINGS
and in the WFC LETTER, there are no material actions, suits or proceedings or
investigations pending or, to the knowledge of WFC, threatened against or
affecting the business, operations or financial condition of WFC or WSL in any
court or before any federal, state, municipal or other governmental department,
commission, board, bureau, agency or instrumentality and management of WFC and
WSL have no knowledge of any basis for any such action, suit, proceeding or
investigation. Except as set forth in the SEC FILINGS and the WFC LETTER,
neither WFC nor WSL is in default in respect of any judgment, order, writ,
injunction or decree of any court or any federal, state, municipal or other
governmental department, commission, board, bureau, agency or instrumentality.
SECTION 4.13. PERMITS AND LICENSES. WFC and WSL have all material
permits, licenses, orders and approvals of all federal, state or local
governmental or regulatory bodies required for them to conduct their business as
presently conducted and all such material permits, licenses, orders and
approvals are in full force and effect, without the threat of suspension or
cancellation. None of such permits, licenses, orders or approvals will be
adversely affected by the consummation of the transactions contemplated by this
AGREEMENT.
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ARTICLE FIVE
COVENANTS
SECTION 5.01. CONDUCT OF BUSINESSES. From the date of this AGREEMENT
until the EFFECTIVE TIME, BMF:
(a) Except with the prior written consent of WFC, will
conduct its business only in the ordinary course, in
accordance with past practices and policies and in
compliance with all applicable statutes, rules and
regulations;
(b) Without the prior written consent of WFC, will not:
(i) Authorize the creation or issuance of,
issue, sell or dispose of, or create any
obligation to issue, sell or dispose of, any
stock, notes, bonds or other securities of
which BMF is the issuer (including, without
limitation, the grant of options under the
1997 Plan), or any obligations convertible
into or exchangeable for, any shares of its
capital stock. Without limiting the
generality of the foregoing, BMF shall not
permit any BMF common shares to be issued to
the TRUST;
(ii) Declare, set aside, pay or make any dividend
or other distribution on capital stock, or
directly or indirectly redeem, purchase or
otherwise acquire any shares or enter into
any agreement in respect to the foregoing;
provided, however, that BMF may pay a
regular quarterly cash dividend of no more
than $0.125 per share in each of the
calendar quarters ending March 31, June 30
and September 30, 1999; provided further,
however, that WFC and BMF will coordinate
such dividend in the quarter of the
EFFECTIVE TIME to prevent any shareholder of
BMF from receiving two dividends in such
quarter as a result of the MERGER;
(iii) Effect any stock split, recapitalization,
combination, exchange of shares,
readjustment or other reclassification;
(iv) Amend its Charter or Bylaws or Constitution;
(v) Purchase, sell, assign or transfer any
material tangible asset or any material
patent, trademark, trade name, copyright,
license, franchise, design or other
intangible assets or property;
(vi) Mortgage, pledge or grant or suffer to exist
any lien or other encumbrance or charge on
any assets or properties, tangible or
intangible, except for liens for taxes not
yet delinquent, assets pledged as collateral
to secure borrowings from the FHLB of
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Cincinnati and such other liens,
encumbrances or charges which do not
materially or adversely affect its financial
position;
(vii) Waive any rights of material value or cancel
any material debts or claims;
(viii) Incur any material obligation or liability
(absolute or contingent), including, without
limitation, any tax liability , or pay any
material liability or obligation (absolute
or contingent), other than liabilities and
obligations incurred in the ordinary course
of business and borrowings from the FHLB of
Cincinnati;
(ix) Cause any material adverse change in the
amount or general composition of its deposit
liabilities or its loan portfolio;
(x) Enter into or amend any employment contract
with any of its officers, increase the
compensation payable to any officer or
director or any relative of any such officer
or director, or be obligated to increase any
such compensation, adopt or amend in any
material respect any employee benefit plans,
severance plan or collective bargaining
agreement or make awards or distributions
under any employee benefit plans not
consistent with past practice or custom;
provided, however, that BMF may grant pay
raises for current BMF employees for the
1999 calendar year in an aggregate maximum
of $12,000;
(xi) Acquire any stock or other equity interest
in any corporation, partnership, trust,
joint venture or other entity;
(xii) Make any (I) material investment (except in
the ordinary course of business) or (II)
material capital expenditure or commitment
for any material addition to property,
plant, or equipment;
(xiii) Permit the allocation by the ESOP of any BMF
common shares to the accounts of
participants; or
(xiv) Agree, whether in writing or otherwise, to
take any action described in this Section
5.01.
SECTION 5.02. ACQUISITION PROPOSALS. BMF shall not, and shall cause the
officers, directors, employees and other agents of BMF not to, directly or
indirectly, take any action to solicit, initiate, engage or negotiate any
proposals or offers from any person or entity, other than WFC, or discuss or
negotiate with any such person or entity, other than WFC, any acquisition or
purchase of all or a material amount of the assets of, any equity securities of,
or any merger, consolidation or business combination with, BMF (hereinafter
collectively referred to as "ACQUISITION TRANSACTIONS"); provided, however, that
nothing contained in this Section 5.02 shall prohibit BMF from furnishing
information to, or entering into discussions or
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negotiations with, any person or entity which makes an unsolicited proposal of
an ACQUISITION TRANSACTION if and to the extent that (a) the Board of Directors
of BMF, after consultation with and based upon the written advice of counsel,
determines in good faith that such action is required to fulfill its fiduciary
duties to the shareholders of BMF under applicable law and (b) before furnishing
such information to, or entering into discussions or negotiations with, such
person or entity, BMF provides immediate written notice to WFC of such action.
SECTION 5.03. ACCOUNTING POLICIES. Before the EFFECTIVE TIME and at the
request of WFC, BMF shall promptly establish and take such reserves and accruals
to conform the loan, accrual and reserve policies of BMF to WSL's policies;
shall promptly establish and take such accruals, reserves and charges in order
to implement such policies in respect of excess facilities and equipment
capacity, severance costs, litigation matters, write-off or write-down of
various assets and other appropriate accounting adjustments; and shall promptly
recognize for financial accounting purposes such expenses of the MERGER and
restructuring charges related to or to be incurred in connection with the
MERGER, to the extent permitted by law and consistent with generally accepted
accounting principles.
ARTICLE SIX
FURTHER AGREEMENTS
SECTION 6.01. APPLICATION FOR APPROVAL OF MERGER. As soon as
practicable after the date of this AGREEMENT, WFC and BMF shall submit to the
OTS and the DIVISION such documents as are required by the OTS and the DIVISION
to be filed in connection with or related to the MERGER.
SECTION 6.02. REGISTRATION STATEMENT. (a) WFC shall, as soon as
reasonably practicable, prepare in accordance with the Securities Act of 1933,
as amended (hereinafter referred to as the "ACT"), and file with the SEC a
Registration Statement in respect of the WFC common shares to be issued to the
holders of BMF common shares in accordance with ARTICLE TWO of this AGREEMENT
(hereinafter referred to as the "REGISTRATION STATEMENT"), and shall use all
reasonable efforts to have the REGISTRATION STATEMENT, as amended, declared
effective by the SEC as promptly as practicable.
(b) The information included in the REGISTRATION STATEMENT in
respect of WFC or WSL will not, at the time the REGISTRATION STATEMENT becomes
effective, 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
therein not misleading.
(c) Within five days before the effective date of the
REGISTRATION STATEMENT and within five days before the CLOSING, BMF shall cause
its certified independent accountants to issue to WFC, and WFC shall cause its
certified independent accountants to issue to BMF, a letter in form and
substance satisfactory to BMF and WFC and in relation to the audited and
unaudited financial and statistical information set forth in the REGISTRATION
STATEMENT.
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SECTION 6.03. AFFILIATES COMPLIANCE WITH THE SECURITIES ACT. (a) Within
30 days after the date of this AGREEMENT, BMF shall identify to WFC all persons
whom BMF reasonably believes to be "affiliates," as defined in paragraphs (c)
and (d) of Rule 145 under the ACT (hereinafter referred to as the "AFFILIATES").
Thereafter and until the EFFECTIVE TIME, BMF shall identify to WFC each
additional person whom it reasonably believes to have thereafter become its
AFFILIATE.
(b) BMF shall cause each person who is identified as an
AFFILIATE to deliver to WFC before the EFFECTIVE DATE a written agreement in the
form of the written agreement attached hereto as Exhibit C in which such
AFFILIATE confirms that the WFC common shares received by such AFFILIATE in the
MERGER shall not be transferable until the expiration of the time period
specified in Section 201.01 of the Codification of Financial Reporting Policies
of the SEC.
SECTION 6.04. SPECIAL MEETING OF SHAREHOLDERS. BMF shall take all steps
necessary to duly call, give notice of, convene and hold a meeting of its
shareholders for the purpose of voting upon the AGREEMENT and the transactions
contemplated hereby, including the MERGER. BMF shall use its reasonable efforts
to hold such meetings as soon as practicable following the date of this
AGREEMENT. The Board of Directors of BMF shall (i) recommend to the shareholders
in the PROXY STATEMENT the approval of this AGREEMENT and the transactions
contemplated hereby, including the MERGER, and the other matters to be submitted
to the shareholders in connection therewith and (ii) use their reasonable
efforts to obtain the necessary approvals by the shareholders of this AGREEMENT,
any amendments hereto, and the transactions contemplated hereby, including the
MERGER.
SECTION 6.05. ACCESS. Until the EFFECTIVE TIME, BMF shall afford to
WFC, and WFC shall afford to BMF, and to their respective officers and
representatives (including, without limitation, counsel, financial advisers and
independent accountants), reasonable access to their properties, personnel,
books, records and affairs. Each party shall furnish the other party with such
additional financial and operating data and other information as to its
businesses and properties as may be reasonably requested. Such access shall
include, but shall not be limited to, (i) permitting verification, by audit or
otherwise, of any representation or warranty made hereunder; (ii) authorizing
release of any information (including the work papers of such independent
auditors) and financial consultants; (iii) consistent with applicable
regulations or procedures, furnishing regular and special examination reports
since the date of this AGREEMENT to the EFFECTIVE TIME; and (iv) delivering
copies of all documents or reports or correspondence filed and any
correspondence with any federal regulatory or supervisory agency from the date
of this AGREEMENT until the EFFECTIVE TIME.
SECTION 6.06. DISSOLUTION OF CSC. On or before the date of the
dissemination of the PROXY STATEMENT, BMF shall dissolve CSC and wind up the
business of CSC in accordance with Chapter 1701 of the ORC.
SECTION 6.07. CONFIDENTIALITY. BMF, WFC and WSL shall hold confidential
any information obtained hereunder which is not otherwise public knowledge or
ascertainable from
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public information and all non-public documents (including copies thereof)
obtained hereunder by either party from the other party shall be returned to
such party.
SECTION 6.08. PRESS RELEASES. WFC and BMF shall consult with each other
before issuing any press release or otherwise making any public statements with
respect to the MERGER and shall not issue any such press release or make any
such public statement without obtaining the prior consent of the other party,
except as may be required by law or by obligations pursuant to any listing
agreement with any national securities association.
SECTION 6.09. COSTS, EXPENSES AND FEES. (a) Subject to paragraph (b) of
this Section 6.09, whether or not the MERGER is consummated, all costs and
expenses incurred in connection with this AGREEMENT, the PROXY STATEMENT, the
REGISTRATION STATEMENT and the transactions contemplated hereby shall be paid by
the party incurring such costs and expenses.
(b) In the event that BMF accepts in any manner an ACQUISITION
TRANSACTION at any time before March 31, 2000, BMF shall pay to WFC a fee of
$200,000 in immediately available federal funds upon the execution of any
agreement in respect of an ACQUISITION TRANSACTION.
SECTION 6.10. REASONABLE EFFORTS. Subject to the terms and conditions
herein provided, each of the parties hereto agrees to use all reasonable efforts
to take, or cause to be taken, all action, and to do or cause to be done all
things necessary, proper or advisable under applicable laws and regulations to
consummate and make effective the transactions contemplated by this AGREEMENT.
SECTION 6.11. NOTIFICATION OF EVENTS. At all times from the date of
this AGREEMENT until the EFFECTIVE TIME, each party shall promptly notify the
other in writing of any adverse business conditions threatening its normal
business operations or of the occurrence of any event or the failure of any
event to occur which might result in a breach of or a failure to comply with any
representation, warranty, covenant, condition or agreement contained in this
AGREEMENT or of the commencement of any action, suit, proceeding, or
investigation against it.
SECTION 6.12. INDEMNIFICATION. (a) For a period of three years after
the EFFECTIVE TIME, WFC shall indemnify persons who served as directors and
officers of BMF on or before the EFFECTIVE TIME to the fullest extent permitted
under the Articles of Incorporation, as amended, and Code of Regulations of WFC
and applicable provisions of Ohio law. Any such indemnification shall be made by
WFC only as authorized in a specific case upon a determination by WFC's Board of
Directors that the applicable standard of conduct under the Articles of
Incorporation, as amended, and Code of Regulations of WFC and applicable
provisions of Ohio law has been met and that such indemnification is permissible
under applicable law. As a condition to receiving such indemnification, the
party claiming indemnification shall assign to WFC, by separate writing, all
right, title and interest in and to the proceeds of the claiming party's
applicable insurance coverage, if any, including insurance maintained or
provided by BMF or WFC, to the extent of such indemnity. No person shall be
entitled to such indemnification who shall (i) fail to cooperate in the defense
and investigation of any claims as to which indemnification may be made, (ii)
make, or who shall be a general partner, executive officer, director, trustee,
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beneficiary or person in control of any partnership, corporation, trust or other
enterprise that shall make, any claim against BMF, WFC or WSL or any
stockholder, director, officer, employee, or agent of any thereof, in any
action, suit or proceeding arising out of or in connection with this AGREEMENT,
the transactions contemplated hereby or the conduct of the business of WFC, WSL
or BMF or (iii) fail to deliver such notices as may be required under any
applicable directors and officers liability insurance policy to preserve any
possible claims of which the claiming party is aware.
(b) WFC shall, at its discretion, either (i) pay up to a
maximum of $10,000 to obtain directors' and officers' liability insurance in the
policy amount of $1,000,000 for the officers and directors of BMF to take effect
at the EFFECTIVE TIME and for a period of three years thereafter (provided,
however, that in the event the cost of such insurance exceeds $10,000, the
officers and directors of BMF may elect to pay the amount in excess of such
$10,000) or (ii) have each of the officers and directors of BMF covered as an
insured under WFC's directors' and officers' liability insurance for acts
committed prior to the EFFECTIVE TIME for a period of six years after the
EFFECTIVE TIME (provided that such insurance is in a policy amount of at least
$2,000,000).
SECTION 6.13. LIQUIDATION ACCOUNT. The MERGER shall have no effect upon
the BMF Liquidation Account which shall be assumed by WSL at the EFFECTIVE TIME
in accordance with 12 C.F.R. Section 563b.3(j).
ARTICLE SEVEN
CLOSING MATTERS
SECTION 7.01. CONDITIONS TO OBLIGATIONS OF WFC, WSL AND BMF.
Notwithstanding any other provision of this AGREEMENT, the obligations of WFC,
WSL and BMF to effect the MERGER shall be subject to the fulfillment of each of
the following conditions:
(a) This AGREEMENT shall have been validly adopted by the
affirmative vote of the holders of at least the
number of outstanding BMF shares required under
federal law and the BMF Charter and Bylaws to adopt
such agreements;
(b) All permits, approvals, consents, authorizations,
exemptions or waivers of any federal or state
governmental body or agency necessary or appropriate
for consummation of the MERGER shall have been
obtained;
(c) All waivers, consents and approval of every person,
in addition to those required under subsections (a)
and (b) of this Section 7.01, necessary or
appropriate for the consummation of the MERGER shall
have been obtained;
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(d) BMF shall have received a written opinion of XXXX,
dated the date of this AGREEMENT, to the effect that
the EXCHANGE RATE is fair to the holders of the BMF
common shares from a financial point of view;
(e) There shall not be in effect an order or decision of
a court of competent jurisdiction which prevents or
materially delays the consummation of the MERGER;
(f) There shall not be in effect any federal or state
law, rule or regulation which prevents or materially
delays consummation of the MERGER;
(g) WFC and BMF shall have received an opinion of counsel
to the effect that the MERGER, when consummated in
accordance with the terms hereof, will constitute a
reorganization within the meaning of Section 368(a)
of the CODE; and
(h) The REGISTRATION STATEMENT (including any
post-effective amendment thereto) shall be effective
under the ACT and no proceeding shall be pending or,
to the knowledge of WFC, threatened by the SEC to
suspend the effectiveness of the REGISTRATION
STATEMENT.
SECTION 7.02. CONDITIONS TO OBLIGATIONS OF WFC AND WSL. In addition to
the conditions contained in Section 7.01 of this AGREEMENT, the obligations of
WFC and WSL to effect the MERGER shall also be subject to the fulfillment of
each of the following conditions:
(a) The representations and warranties of BMF contained
in Article Three of this AGREEMENT shall be true in
all material respects at and as of the date hereof
and at and as of the EFFECTIVE TIME as if made at and
as of such time;
(b) BMF shall have duly performed and complied in all
material respects with all agreements, covenants and
conditions required by this AGREEMENT to be performed
or complied with by it before or at the EFFECTIVE
TIME;
(c) There shall not have been a material adverse change
in the financial condition, assets, liabilities,
obligations, properties, business or prospects of BMF
after the date of this AGREEMENT, except changes
resulting from action taken by BMF pursuant to
Section 5.03 of this AGREEMENT;
(d) The consolidated shareholders' equity of BMF at the
EFFECTIVE TIME and as calculated in accordance with
generally accepted accounting principles shall not be
less than $3,497,000, exclusive of up to $130,000 in
expenses recognized by BMF in connection with the
MERGER and exclusive of reserves, accruals and
charges taken or established by BMF at the request of
WFC in accordance with Section 5.03 of this
AGREEMENT;
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33
(e) CSC shall have been dissolved and the CSC business
wound up;
(f) BMF shall not have incurred any damage, destruction
or similar loss, not covered by insurance, materially
affecting its businesses or properties;
(g) The holders of not more than 5% of the BMF common
shares shall have delivered a written demand for
appraisal of such shares in the manner provided in
Section 2.06 of this AGREEMENT;
(h) BMF shall have delivered to WFC a certificate dated
the EFFECTIVE TIME and signed by the President and
Treasurer of BMF to the effect set forth in
subsections (a), (b), (c), (d), (e), (f) and (g) of
this Section 7.02;
(i) WFC shall have received a written opinion of McDonald
Investment Inc., dated the date of this AGREEMENT and
the date of the PROXY STATEMENT, to the effect that,
as of such dates, the EXCHANGE RATE is fair to the
holders of WFC common shares from a financial point
of view;
(j) WFC shall have received an opinion of BMF's counsel
dated the date of the EFFECTIVE TIME and to the
effect set forth in the form attached hereto as
Exhibit D;
(k) BMF shall have obtained all consents, authorizations
or approvals of, or exemptions or waivers by, any
federal or state governmental body or agency required
to be obtained by it in connection with the MERGER or
the taking of any action contemplated hereby;
(l) There shall not be any action or proceeding commenced
by or before any court or governmental agency or
authority in the United States, or threatened by any
governmental agency or authority in the United
States, that challenges or seeks to prevent or delay
the consummation of the MERGER or seeks to impose
material limitations on the ability of WFC or WSL to
exercise full rights of ownership of the assets or
business of BMF;
(m) There shall not have been proposed, nor shall there
be in effect, any federal or state law, rule,
regulation, order or statement of policy that, in the
reasonable judgment of WFC, would: (i) prevent or
delay the consummation of the MERGER or interfere
with the reasonable operation of the business of BMF,
(ii) materially adversely affect the ability of WFC
to enjoy the economic or other benefits of the
MERGER; or (iii) impose any material adverse
condition, limitation or requirement on WFC in
connection with the MERGER;
(n) WFC shall have received the advice of Xxxxx Xxxxxxxx
LLP that the MERGER will qualify for the pooling of
interests method of accounting; and
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34
(o) BMF shall have obtained all consents to, or
authorizations or approvals of, the transactions
contemplated by this AGREEMENT of any party to any
contract, obligation, lease or other agreement to
which BMF is a party and which requires such consent,
authorization or approval.
SECTION 7.03. CONDITIONS TO OBLIGATIONS OF BMF. In addition to the
conditions contained in Section 7.01 of this AGREEMENT, the obligation of BMF to
effect the MERGER shall also be subject to the fulfillment of each of the
following conditions:
(a) The representations and warranties of WFC and WSL
contained in Article Four of this AGREEMENT shall be
true in all material respects at and as of the date
hereof and as of the EFFECTIVE TIME as if made at and
as of such time, except to the extent that such
representations and warranties are made as of a
specific date;
(b) WFC and WSL shall have duly performed and complied in
all material respects with all agreements, covenants
and conditions required by this AGREEMENT to be
performed or complied with by them before or at the
EFFECTIVE TIME;
(c) There shall not have been a material adverse change
in the financial condition, assets, liabilities,
obligations, properties, business or prospects of WFC
and WSL after the date of this AGREEMENT;
(d) WFC and WSL shall have delivered to BMF a certificate
dated the EFFECTIVE TIME and signed by the Chairman
and the President of WFC and WSL to the effect set
forth in subsections (a), (b) and (c) of this Section
7.03;
(e) BMF shall have received an opinion of WFC's counsel
dated the date of the EFFECTIVE TIME and to the
effect set forth in the form attached hereto as
Exhibit E;
(f) WFC shall have obtained all consents, authorizations
or approvals of, or exemptions or waivers by any
federal or state governmental body or agency required
to be obtained by it in connection with the MERGER or
the taking of any action contemplated thereby;
(g) WFC shall not have incurred any damage, destruction
or similar loss, not covered by insurance, materials
affecting its business or properties;
(h) There shall not be any action or proceeding commenced
by or before any court or governmental agency or
authority in the United States, or threatened by any
governmental agency or authority in the United
States, that challenges or seeks to prevent or delay
the consummation of the MERGER; and
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35
(i) The average of the closing sales prices of WFC on the
American Stock Exchange during the twenty trading
days ending five trading days before the CLOSING
shall not be less than $10.50.
ARTICLE EIGHT
TERMINATION
SECTION 8.01. TERMINATION. This AGREEMENT may be terminated at any time
prior to the EFFECTIVE TIME, whether before or after approval by the
shareholders of BMF:
(a) By mutual consent of the Boards of Directors of BMF
and WFC; or
(b) By the Board of Directors of BMF or WFC if:
(i) The MERGER shall not have been consummated
on or before September 30, 1999; or
(ii) Any event occurs which, in the reasonable
opinion of either Board, would preclude
satisfaction of any of the conditions set
forth in Section 7.01 of this AGREEMENT; or
(c) By the Board of Directors of WFC if any event occurs
which, in the reasonable opinion of such Board, would
preclude compliance with any of the conditions set
forth in Section 7.02 of this AGREEMENT; or
(d) By the Board of Directors of BMF if any event occurs
which, in the reasonable opinion of such Board, would
preclude compliance with any of the conditions set
forth in Section 7.03 of this AGREEMENT.
SECTION 8.02. WRITTEN NOTICE OF TERMINATION. In order to terminate this
AGREEMENT pursuant to Section 8.01 of this AGREEMENT, the party so acting shall
give written notice of such termination to the other party. This AGREEMENT shall
terminate on the date such notice is given.
SECTION 8.03. EFFECT OF TERMINATION. In the event of the termination of
this AGREEMENT, the provisions of this AGREEMENT shall become void and have no
effect; provided, however, that (a) the provisions set forth in Sections 6.07
and 6.09 of this AGREEMENT shall survive such termination and shall remain in
full force and effect and (b) a termination of this AGREEMENT shall not affect
the liability of any party for an uncured and material breach of any term or
condition of this AGREEMENT.
SECTION 8.04. AMENDMENT. This AGREEMENT may only be amended by the
unanimous consent of WFC, WSL and BMF by action taken by their respective Boards
of Directors, at any time before or after approval of this AGREEMENT by the
shareholders of BMF, but after such approval no amendment shall be made which
materially and adversely affects
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36
the rights of such shareholders without the further approval of such
shareholders. This AGREEMENT may not be amended except by an instrument in
writing signed on behalf of each of the parties hereto.
SECTION 8.05. WAIVER. Any term or provision of this AGREEMENT (other
than the requirement for shareholder approval) may be waived in writing at any
time by the party which is, or whose shareholders are, entitled to the benefits
thereof.
ARTICLE NINE
MISCELLANEOUS
SECTION 9.01. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All
representations, warranties and covenants in this AGREEMENT shall expire on, and
be terminated and extinguished at, the EFFECTIVE TIME, other than covenants
which by their terms are to survive or be performed after the EFFECTIVE TIME;
provided, however, that no such representations, warranties or covenants shall
be deemed to be terminated or extinguished so as to deprive WFC or WSL (or any
director, officer or controlling person thereof) of any defense in law or equity
which otherwise would be available against the claims of any person, including,
without limitation, any shareholder or former shareholder of either WFC or BMF.
SECTION 9.03. NOTICES. All notices and other communications hereunder
shall be in writing and shall be deemed given if delivered personally or mailed
by registered or certified mail (return receipt requested) to the parties at the
following addresses (or at such other address for a party as shall be specified
by like notice):
If addressed to WFC or WSL:
Xxxxxx X. Xxxxxx
President
Xxxxxx Financial Corporation
0000 Xxxxxxx Xxxx
Xxxxxxxxxx, Xxxx 00000
If addressed to BMF:
Xxxxx X. XxXxxxx
President
BenchMark Federal Savings Bank
0000 Xxxxxx Xxxx
Xxxxxxxxxx, XX 00000-0000
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with a copy to:
Xxxxxxx X. Xxxxxxxxxx, Esq.
Wood & Xxxxxxx
0000 Xxxxxxxxxx Xxxxxxxx Xxxxxx
000 Xxxx Xxxxxx
Xxxxxxxxxx, XX 00000-0000
SECTION 9.04. ENTIRE AGREEMENT. This AGREEMENT (including the exhibits,
documents and instruments referred to herein or therein) (a) constitutes the
entire agreement and supersedes all other prior agreements and understandings,
both written and oral, among the parties, or any of them, with respect to the
subject matter hereof; (b) is not intended to and shall not confer any rights or
remedies hereunder upon any person other than WFC, WSC or BMF; (c) shall not be
assigned by operation of law or otherwise; and (d) shall be governed in all
respects, including validity, interpretation and effect, by the laws of the
State of Ohio.
SECTION 9.05. EXECUTION IN COUNTERPARTS. This AGREEMENT may be executed
in two or more counterparts which together shall constitute a single AGREEMENT.
SECTION 9.06. HEADINGS. The headings of articles and sections herein
are for convenience of reference only, do not constitute a part of this
AGREEMENT and shall not be deemed to limit or affect any of the provisions
hereof.
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38
IN WITNESS WHEREOF, WFC, WSL and BMF have caused this AGREEMENT to be
signed by their respective duly authorized officers on the date first above
written.
ATTEST: XXXXXX FINANCIAL CORPORATION
By: /s/ Xxxxxx X. Xxxxxx
-------------------------------
Xxxxxx X. Xxxxxx
/s/ Xxxxx X. Xxxxxxx its President
----------------------------
Xxxxx X. Xxxxxxx
Secretary
ATTEST: THE XXXXXX SAVINGS AND LOAN CO.
By:/s/ Xxxxxx X. Xxxxxx
-------------------------------
Xxxxxx X. Xxxxxx
/s/ Xxxxx X. Xxxxxxx its President
----------------------------
Xxxxx X. Xxxxxxx
Secretary
ATTEST: BENCHMARK FEDERAL SAVINGS BANK
/s/ Xxxxxxx Xxxxxxxx By /s/ Xxxxx X. XxXxxxx
---------------------------- -------------------------------
Xxxxxxx Xxxxxxxx Xxxxx X. XxXxxxx
Secretary its President
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39
ACKNOWLEDGMENT
STATE OF OHIO )
) SS:
COUNTY OF XXXXXXXX )
BE IT REMEMBERED that on this 4th day of December, 1998, personally
came before me, a Notary Public in and for the State and County aforesaid,
Xxxxxx X. Xxxxxx, President of Xxxxxx Financial Corporation, a savings and loan
holding company incorporated under the laws of Ohio, and duly executed the
Agreement and Plan of Reorganization before me and acknowledged the same to be
his act and deed and the act and deed of said Corporation and that the facts
therein are true.
IN WITNESS WHEREOF, I have hereunto set my hand and seal this 4th day
of December, 1998.
/s/ Xxxxxxx X. Xxxxxxxxxx
--------------------------
Notary Public [SEAL]
BE IT REMEMBERED that on this 4th day of December, 1998, personally
came before me, a Notary Public in and for the State and County aforesaid,
Xxxxxx X. Xxxxxx, President of Xxxxxx Savings and Loan Co., a savings and loan
association incorporated under the laws of Ohio, and duly executed the Agreement
and Plan of Reorganization before me and acknowledged the same to be his act and
deed and the act and deed of said Corporation and that the facts therein are
true.
IN WITNESS WHEREOF, I have hereunto set my hand and seal this 4th day
of December, 1998.
/s/ Xxxxxxx X. Xxxxxxxxxx
--------------------------
Notary Public [SEAL]
BE IT REMEMBERED that on this 4th day of December, 1998, personally
came before me, a Notary Public in and for the State and County aforesaid, Xxxxx
X. XxXxxxx, President of BenchMark Federal Savings Bank, a savings bank
incorporated under the laws of the United States, and duly executed the
Agreement and Plan of Reorganization before me and acknowledged the same to be
his act and deed and the act and deed of said Corporation and that the facts
therein are true.
IN WITNESS WHEREOF, I have hereunto set my hand and seal this 4th day
of December, 1998.
/s/ Xxxxxxx X. Xxxxxxxxxx
--------------------------
Notary Public [SEAL]
39
40
EXHIBIT A
AMENDED ARTICLES OF INCORPORATION
OF
THE XXXXXX SAVINGS AND LOAN CO.
FIRST: The name of the corporation shall be The Xxxxxx Savings and
Loan Co.
SECOND: The place in Ohio where the principal office of the
corporation is to be located is the County of Xxxxxxxx, City of Cincinnati.
THIRD: The purposes of the corporation are to raise money to be
loaned to the public and to engage in any other lawful act or activity.
FOURTH: The authorized number of shares of the corporation shall be
10,000,000 all of which shall be common shares, par value $1.00 per share.
FIFTH: For a period of five years from the effective date of these
articles, no Person (hereinafter defined) shall directly or indirectly Offer
(hereinafter defined) to Acquire (hereinafter defined) or Acquire the Beneficial
Ownership (hereinafter defined) of more than 10% of any class of an equity
security of the corporation; provided, however, that such prohibition shall not
apply to a transaction in which the corporation forms a savings and loan holding
company, without change in the respective Beneficial Ownership interests of its
then existing shareholders other than pursuant to the exercise of any
dissenter's and appraisal rights or to the purchase of shares by underwriters in
connection with a public offering. In the event that any shares of the
corporation are Acquired in violation of this Article FIFTH all shares
Beneficially Owned by any person in excess of 10% shall not be counted as shares
entitled to vote, and shall not be voted by any person and shall not be counted
as voting shares in connection with any matters submitted to the stockholders
for a vote. For purposes of this Article FIFTH the following terms shall have
the meaning set forth below:
(1) "Person" includes an individual, a group acting in concert, a
corporation, a partnership, an association, a joint stock company, a
trust, an unincorporated organization or similar company, a syndicate
or any other group formed for the purpose of acquiring or disposing of
the equity securities of the corporation, but does not include The
Xxxxxx Savings and Loan Co. Employee Stock Ownership Plan.
"Offer" includes every offer to buy or otherwise acquire, solicitation
of an offer to sell, tender offer for, or request or invitation for
lenders of, a security or interest in a security for value.
41
(3) "Acquire" includes every type or acquisition, whether effected by
purchase, exchange, operation of law or otherwise.
(4) "Acting in concert" means (a) knowing participation in a joint
activity or conscious parallel action towards a common goal, whether
or not pursuant to an express agreement, or (b) a combination or
pooling of voting or other interests in the securities of an issuer
for a common purpose pursuant to any contract, understanding,
relationship, agreement or other arrangement, whether written or
otherwise.
(5) "Beneficial Ownership" shall include, without limitation, (i) all
shares directly or indirectly owned by a Person, by an Affiliate
(hereinafter defined) of such Person or by an Associate of such Person
or such Affiliate, (ii) all shares which such Person, Affiliate or
Associate has the right to acquire through the exercise of any option,
warrant or right (whether or not currently exercisable), through the
conversion of a security, pursuant to the power to revoke a trust,
discretionary account or similar arrangement, or pursuant to the
automatic termination of a trust, discretionary account or similar
arrangement, and (iii) all shares as to which such Person, Affiliate
or Associate directly or indirectly through any contract, arrangement
understanding, relationship or otherwise (including, without
limitation, any written or unwritten agreement to act in concert) has
or shares voting power (which includes the power to vote or to direct
the voting of such shares) or investment power (which includes the
power to dispose or to direct the disposition of such shares) or both.
(6) "Affiliate" shall mean a Person that directly or indirectly, through
one or mor intermediaries, controls or is controlled by, or is under
common control with, another Person.
SIXTH The directors or the corporation may accept an amendment to
the articles in respect of any unissued or treasury shares of any class and
thereby fix or change: the division of such shares into series and the
designation and authorized number of shares of each series; the dividend rate;
the dates of payment of dividends and the dates from which they are cumulative;
liquidation price, redemption rights and price; sinking fund; requirements;
conversion rights; and restrictions on the issuance of shares of any class or
series.
42
SEVENTH No shareholder of the corporation shall have, as a matter of
right, the pre-emptive right to purchase or subscribe for shares of any class,
now or hereafter authorized, or to purchase or subscribe for securities or
other obligations convertible into or exchangeable for such shares or which by
warrants or otherwise entitle the holders thereof to subscribe for or purchase
any such share.
EIGHTH: No shareholder of the corporation shall have the right to vote
cumulatively in the election of directors.
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EXHIBIT B
The offices of the SURVIVING CORPORATION shall consist of the offices
at the following locations:
CURRENT OFFICES OF WSL
0000 Xxxxxxx Xxxx 0000 Xxxx Xxxxxx 0000 Xxxx Xxxxxx
Xxxxxxxxxx, Xxxx 00000-0000 Xxxxxxxxxx, Xxxx 00000-0000 Xxxxxxxxxx, Xxxx 00000
00000 Xxxxxxxx Xxxxxx 000 Xxxx Xxxxxx
Xxxxxxxx, Xxxx 00000-0000 Xxxxxxxxxx, Xxxx 00000-0000
CURRENT OFFICES OF BMF
0000 Xxxxxx Xxxx 000 X. Xxxxxxx Xxxx. 0000 Xxxxxxxxxx Xxxx
Xxxxxxxxxx, Xxxx Xxxxxxxxxx, Xxxx Cincinnati, Ohio
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EXHIBIT C
________________, 1998
Xxxxxx Financial Corporation
0000 Xxxxxxx Xxxx
Xxxxxxxxxx, Xxxx 00000
Gentlemen:
I have been advised that I may be deemed to be, but do not admit that I
am, an "affiliate" of BenchMark Federal Savings Bank, a federal savings bank
("BMF"), as that term is defined in Rule 145 promulgated by the Securities and
Exchange Commission (the "SEC") under the Securities Act of 1933, as amended
(the "Securities Act"), and/or in SEC Accounting Series Releases 130 and 135. As
a result of the merger of BMF with and into The Xxxxxx Savings and Loan Co.
("Xxxxxx") pursuant to the terms of the Agreement and Plan of Reorganization,
dated ____________________, 1998, by and between WFC, Xxxxxx and Xxxxxx
Financial Corporation ("WFC"), I may receive common shares, no par value per
share, of WFC ("WFC Shares") in exchange for common shares, par value $1.00 per
share, of BMF ("BMF Shares").
I have carefully read this letter and reviewed the Agreement and
discussed the requirements and other applicable limitations upon my ability to
sell, transfer, or otherwise dispose of WFC Shares and BMF Shares, to the extent
I felt necessary, with my counsel.
I represent, warrant and covenant with and to WFC that in the event I
receive any WFC Shares as a result of the Merger:
1. I shall not make any sale, transfer, or other
disposition of such WFC Shares unless (a) such sale, transfer
or other disposition has been registered under the Securities
Act, (b) such sale, transfer or other disposition is made in
conformity with the provisions of Rule 145 under the
Securities Act (as such rule may be amended form time to
time), or (c) in the opinion of counsel in form and substance
reasonably satisfactory to WFC, or under a "no-action" letter
obtained by me from the staff of the SEC, such sale, transfer
or other disposition will not violate or is otherwise exempt
from registration under the Securities Act.
2. I understand that WFC is under no obligation to
register the sale, transfer or other disposition of shares of
WFC Shares by me or on my behalf under the Securities Act or
to take any other action necessary in order to make compliance
with an exemption from such registration available.
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Xxxxxx Financial Corporation
________________, 1998
Page 2
3. I understand that stop transfer instructions will be
given to WFC's transfer agent with respect to the WFC Shares
issued to me as a result of the Merger and that there will be
placed on the certificates for such shares, or any
substitutions therefor, a legend stating in substance:
"The shares represented by this certificate were
issued in a transaction to which Rule 145 promulgated
under the Securities Act applies. The shares
represented by this certificate may be transferred
only in accordance with the terms of a letter
agreement between the registered holder hereof and
WFC, a copy of which agreement is on file at the
principal offices of WFC."
4. I understand that, unless transfer by me of the WFC
Shares issued to me as a result of the Merger has been
registered under the Securities Act or such transfer is made
in conformity with the provisions of Rule 145(d) under the
Securities Act, WFC reserves the right, in its sole
discretion, to place the following legend on the certificates
issued to my transferee:
"The shares represented by this certificate have not
been registered under the Securities Act of 1933 and
were acquired from a person who received such shares
in a transaction to which Rule 145 under the
Securities Act of 1933 applies. The shares have been
acquired by the holder not with a view to, or for
resale in connection with, any distribution thereof
within the meaning of the Securities Act of 1933 and
may not be offered, sold, pledged or otherwise
transferred except in accordance with an exemption
from the registration requirements of the Securities
Act of 1933."
I understand and agree that the legends set forth in paragraphs (3) and
(4) above shall be removed by delivery of substitute certificates without such
legend if I shall have delivered to WFC (a) a copy of a "no action" letter from
the staff of the SEC, or an opinion of counsel in form and substance reasonably
satisfactory to WFC, to the effect that such legend is not required for purposes
of the Act, or (b) evidence or representations satisfactory to WFC that the WFC
Shares represented by such certificates is being or has been sold in conformity
with the provisions of Rule 145(d).
I further represent, warrant and covenant with and to WFC that I will
not sell, transfer or otherwise dispose of, or reduce my risk relative to, any
shares of BMF Shares or WFC Shares (whether or not acquired by me in the Merger)
during the period commencing 30 days prior to
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Xxxxxx Financial Corporation
________________, 1998
Page 3
the effective date of the Merger and ending at such time as WFC notifies me that
results covering at least 30 days of combined operations of BMF and WFC after
the Merger have been published by WFC. I understand that WFC is not obligated to
publish such combined financial results except in accordance with its normal
financial reporting practice.
I further understand and agree that this letter agreement shall apply
to all shares of BMF Shares and WFC Shares that I am deemed to own beneficially
pursuant to applicable federal securities laws and I further represent, warrant
and covenant with and to WFC that I will have, and will cause each of the other
parties whose shares are deemed to be beneficially owned by me to have, all
shares of BMF Shares or WFC Shares owned by me or such parties registered in my
name or the name of such parties, as applicable, prior to the effective date of
the Merger and not in the name of any bank, broker or dealer, nominee or
clearing house.
I also understand that the Merger is intended to be treated as a
"pooling of interests" for accounting purposes, and I agree that if BMF or WFC
advises me in writing that additional restrictions apply to my ability to sell,
transfer, or otherwise dispose of BMF Shares or WFC Shares in order for WFC to
be entitled to use the pooling of interests accounting method, I will abide by
such restrictions.
Very truly yours,
By__________________________________
Name:_______________________________
Accepted this _____ day of
______________, 1998
XXXXXX FINANCIAL CORPORATION
By____________________________________
Name:______________________________
Title:_____________________________
47
EXHIBIT D
Subject to such general qualifications and conditions as are reasonable
and appropriate and based upon specifically enumerated approvals, certificates
and documents, counsel to BMF will give an opinion substantially to the
following effect and in a form reasonably acceptable to the WFC and its counsel:
1. BMF is a federal savings bank duly incorporated, validly
existing and in good standing under the laws of the United States; has
the corporate power and authority to own or hold under lease all of its
properties and assets and to conduct its business and operations as
presently conducted; and is a member of the Federal Home Loan Bank of
Cincinnati. The savings accounts and deposits of BMF are insured up to
applicable limits by the Federal Deposit Insurance Corporation.
2. BMF has all of the requisite corporate power and authority
to enter into the AGREEMENT and to perform all of its obligations
thereunder; the execution and delivery of the AGREEMENT and the
consummation of the transactions contemplated thereby, including the
MERGER, have been duly authorized by all necessary corporate action by
BMF; and the AGREEMENT is a valid and binding agreement of BMF,
enforceable against BMF in accordance with its terms, (i) subject to
applicable bankruptcy, insolvency, reorganization and moratorium laws
and other laws of general applicability affecting the enforcement of
creditors' rights generally, and the effect of rules of law governing
specific performance, injunctive relief and other equitable remedies on
the enforceability of such documents and (ii) except to the extent such
enforceability may be limited by laws relating to safety and soundness
of insured depository institutions as set forth in 12 U.S.C. Section
1818(b) or by the appointment of a conservator by the FDIC. The
AGREEMENT has been duly executed and delivered by BMF.
3. The execution and delivery of the AGREEMENT and the
consummation of the transactions contemplated thereby, including the
MERGER, will not (a) conflict with or violate any provision of or
result in the breach of any provision of the Amended Articles of
Incorporation, Charter of Bylaws of BMF; (b) to such counsel's
knowledge, conflict with or violate any provision of or result in the
breach or the acceleration of or entitle any party to accelerate
(whether upon or after the giving of notice of lapse of time or both)
any obligation under, or otherwise materially affect the terms of, any
mortgage, lien, lease, agreement, license, instrument, order,
arbitration award, judgment or decree to which BMF is a party or by
which BMF or its property or assets is bound; (c) to such counsel's
knowledge, require the consent of any party to any agreement or
commitment to which BMF is a party or by which BMF or its property or
assets is bound, the failure to obtain which could, individually or in
the aggregate with all the other failures to obtain required consents,
have a material adverse effect on the business, operations, condition
(financial or otherwise) or prospects of BMF; (d) to such counsel's
knowledge, result in the creation or imposition of any lien, charge,
pledge, security interest or other encumbrance
48
upon any property or assets of BMF or give rise to any meritorious
cause of action against BMF; or (e) to such counsel's knowledge,
violate or conflict with any applicable law, ordinance, rule or
regulation, including, without limitation, the rules and regulations of
the FDIC or the OTS.
4. The authorized capital of BMF consists of 2,000,000 common
shares, $1 par value per share, ________ of which are issued and
outstanding, and 500,000 preferred shares, $1 par value per share, none
of which is issued or outstanding. All of the outstanding common shares
of BMF are duly authorized, validly issued, fully paid and
nonassessable and were exempt when issued from registration under the
Securities Act of 1933, as amended. BMF has no outstanding class of
capital stock, other than such common shares. To such counsel's
knowledge, there are no outstanding subscription rights, options,
conversion rights, warrants or other agreements or commitments of any
nature whatsoever (either firm or conditional) obligating BMF to issue,
deliver or sell, cause to be issued, delivered or sold, or restricting
BMF from selling any additional BMF shares, or obligating BMF to grant,
extend or enter into any such agreement or commitment.
5. To such counsel's knowledge, there are no material actions,
suits or proceedings or investigations pending or threatened against or
affecting the business, operation or financial condition of BMF in any
court or before any federal, state, municipal or other governmental
department, commission, board, bureau, agency or instrumentality.
6. All necessary regulatory approvals that are required to
have been obtained by BMF have been obtained in connection with the
transactions contemplated by the AGREEMENT.
The limitations inherent in the independent verification of
factual matters and the character of determinations involved in the
drafting process are such that we have not verified, are not passing
upon and do not assume responsibility for the accuracy, completeness or
fairness of the factual statements contained in either the REGISTRATION
STATEMENT or the PROXY STATEMENT, as amended or supplemented. However,
based upon our familiarity with the Securities Act of 1933, as amended,
and the rules and regulations thereunder and our participation in the
preparation of the REGISTRATION STATEMENT and the PROXY STATEMENT, as
amended or supplemented (except for (i) the financial statements and
other financial and statistical information contained or incorporated
by reference in the REGISTRATION STATEMENT or the PROXY STATEMENT, as
amended or supplemented, and (ii) any information which is contained or
incorporated by reference therein and which relates to or was supplied
or prepared by WFC or WSL, as to each of which we did not participate
and express no opinion), nothing has come to our attention that has
caused us to believe that the REGISTRATION STATEMENT, as of
__________________, 1999, contained as to BMF any untrue statement of a
material fact or omitted to state any material fact required to be
stated therein or necessary to make the statements therein not
misleading or
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that the PROXY STATEMENT, as of _____________________, 1999, included
any untrue statements of a material fact or omitted to state a material
fact necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading.
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EXHIBIT E
Subject to such general qualifications and conditions as they deem
appropriate and based upon specifically enumerated approvals, certificates and
documents, counsel to WFC will give an opinion substantially to the following
effect and in a form reasonably acceptable to BMF and its counsel:
1. WFC is a corporation duly incorporated, validly existing
and in good standing under the laws of Ohio and has the corporate power
and authority to conduct its business and operations as presently
conducted.
2. WSL is a savings and loan association duly incorporated,
validly existing and in good standing under the laws of Ohio; has the
corporate power and authority to own or hold under lease all of its
properties and assets and to conduct its business and operations as
presently conducted; and is a member of the Federal Home Loan Bank of
Cincinnati. The savings accounts and deposits of WSL are insured up to
applicable limits by the Federal Deposit Insurance Corporation.
3. WFC and WSL have all the requisite corporate power and
authority to enter into the AGREEMENT and to perform all of their
obligations thereunder; the execution and delivery of the AGREEMENT and
the consummation of the transactions contemplated thereby have been
duly authorized by all necessary corporate action by WFC and WSL; and
the AGREEMENT is a valid and binding agreement of WFC and WSL,
enforceable against WFC and WSL in accordance with its terms, (i)
subject to applicable bankruptcy, insolvency, reorganization and
moratorium laws and other laws of general applicability affecting the
enforcement of creditors' rights generally, and the effect of rules of
law governing specific performance, injunctive relief and other
equitable remedies on the enforceability of such documents and (ii)
except to the extent such enforceability may be limited by laws
relating to safety and soundness of insured depository institutions as
set forth in 12 U.S.C. Section 1818(b) or by the appointment of a
conservator by the FDIC. The AGREEMENT has been duly executed and
delivered by WFC and XXX.
0. The execution and delivery of the AGREEMENT and the
consummation of the transactions contemplated thereby will not (a)
conflict with or violate any provision of or result in the breach of
any provision of the Amended Articles of Incorporation or Amended Code
of Regulations of WFC or the Amended Articles of Incorporation or
Amended Constitution of WSL; (b) to such counsel's knowledge, conflict
with or violate any provision of or result in the breach or the
acceleration of or entitle any party to accelerate (whether upon or
after the giving of notice of lapse of time or both) any obligation
under, or otherwise materially affect the terms of, any mortgage, lien,
lease, agreement, license, instrument, order, arbitration award,
judgment or decree to which either WFC or WSL is a party or by which
either WFC or WSL or their property or assets is bound; (c) to such
counsel's knowledge, require the consent of any party to any
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agreement or commitment to which WFC and WSL is a party or by which WFC
and WSL or their property or assets is bound, the failure to obtain
which could, individually or in the aggregate with all the other
failures to obtain required consents, have a material adverse effect on
the business, operations, condition (financial or otherwise) or
prospects of WFC and WSL; (d) to such counsel's knowledge, result in
the creation or imposition of any lien, charge, pledge, security
interest or other encumbrance upon any property or assets of WFC and
WSL or give rise to any meritorious cause of action against WFC and
WSL; or (e) to such counsel's knowledge, violate or conflict with any
applicable law, ordinance, rule or regulation, including, without
limitation, the rules and regulations of the FDIC or the DIVISION.
5. The authorized capital of WFC consists of 5,000,000
common shares, without par value, ___________ of which are issued and
outstanding, and 2,000,000 preferred shares, without par value, none of
which is issued or outstanding. All of the outstanding common shares of
WFC are duly authorized, validly issued, fully paid and nonassessable.
WFC has no outstanding class of capital stock, other than such common
shares. To such counsel's knowledge, except for the WFC OPTIONS, there
are no outstanding subscription rights, options, conversion rights,
warrants or other agreements or commitments of any nature whatsoever
(either firm or conditional) obligating WFC to issue, deliver or sell,
cause to be issued, delivered or sold, or restricting WFC from selling
any additional WFC shares, or obligating WFC to grant, extend or enter
into any such agreement or commitment.
6. To such counsel's knowledge and except as disclosed in
the WFC LETTER, there are no material actions, suits or proceedings or
investigations pending or threatened against or affecting the business,
operation or financial condition of WFC and WSL in any court or before
any federal, state, municipal or other governmental department,
commission, board, bureau, agency or instrumentality.
7. All necessary regulatory approvals that are required to
have been obtained by WFC and WSL have been obtained in connection with
the transactions contemplated by the AGREEMENT.
The limitations inherent in the independent verification of
factual matters and the character of determinations involved in the
drafting process are such that we have not verified, are not passing
upon and do not assume responsibility for the accuracy, completeness or
fairness of the factual statements contained in either the REGISTRATION
STATEMENT or the PROXY STATEMENT, as amended or supplemented. However,
based upon our familiarity with the ACT and the rules and regulations
thereunder and our participation in the preparation of the REGISTRATION
STATEMENT and the PROXY STATEMENT, as amended or supplemented (except
for (i) the financial statements and other financial and statistical
information contained or incorporated by reference in the REGISTRATION
STATEMENT or the PROXY STATEMENT, as amended or supplemented, and (ii)
any information which is contained or incorporated by reference therein
and which relates to or was supplied or prepared by
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BMF, as to each of which we did not participate and express no
opinion), nothing has come to our attention that has caused us to
believe that the REGISTRATION STATEMENT, as of __________________,
1999, contained as to WFC and WSL any untrue statement of a material
fact or omitted to state any material fact required to be stated
therein or necessary to make the statements therein not misleading or
that the PROXY STATEMENT, as of _____________________, 1999, included
any untrue statements of a material fact or omitted to state a material
fact necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading.
3
