1
EXHIBIT 2.1
AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER, dated as of December 17, 1998 ("Agreement"),
is among Valley National Bancorp, a New Jersey corporation and registered bank
holding company ("Valley"), Valley National Bank, a national banking association
("VNB"), Ramapo Financial Corporation, a New Jersey corporation and registered
bank holding company ("Ramapo") and The Ramapo Bank, a state-chartered
commercial bank (the "Bank").
RECITALS
Valley desires to acquire Ramapo and Ramapo's Board of Directors has determined,
based upon the terms and conditions hereinafter set forth, that the acquisition
is in the best interests of Ramapo and its stockholders. The acquisition will be
accomplished by merging Ramapo into Valley with Valley as the surviving
corporation and, at the same time, merging the Bank into VNB with VNB as the
surviving bank, and Ramapo stockholders receiving the consideration hereinafter
set forth. The Boards of Directors of Ramapo, Valley, the Bank and VNB have duly
adopted and approved this Agreement and the Board of Directors of Ramapo has
directed that it be submitted to its stockholders for approval.
As a condition precedent to entering into this Agreement, Valley has required
that Ramapo grant it an option to purchase authorized but unissued shares of
Ramapo common stock and, as a consequence, Valley and Ramapo have entered into a
Stock Option Agreement, dated the date hereof (the "Valley Stock Option").
NOW, THEREFORE, intending to be legally bound, the parties hereto agree as
follows:
ARTICLE I
THE MERGER
1.1. THE MERGER. Subject to the terms and conditions of this Agreement, at the
Effective Time (as hereafter defined), Ramapo shall be merged with and into
Valley (the "Merger") in accordance with the New Jersey Business Corporation Act
("NJBCA") and Valley shall be the surviving corporation (the "Surviving
Corporation"). Immediately following the Effective Time, the Bank shall be
merged with and into VNB as provided in Section 1.7 hereof.
1.2. EFFECT OF THE MERGER. At the Effective Time, the Surviving Corporation
shall be considered the same business and corporate entity as each of Ramapo and
Valley and thereafter all the property, rights, privileges, powers and
franchises of each of Ramapo and Valley shall vest in the Surviving Corporation
and the Surviving Corporation shall be subject to and be deemed to have assumed
all of the debts, liabilities, obligations and duties of
2
each of Ramapo and Valley and shall have succeeded to all of each of their
relationships, fiduciary or otherwise, as fully and to the same extent as if
such property, rights, privileges, powers, franchises, debts, obligations,
duties and relationships had been originally acquired, incurred or entered into
by the Surviving Corporation.
1.3. CERTIFICATE OF INCORPORATION. The certificate of incorporation of Valley as
it exists immediately prior to the Effective Time shall not be amended by the
Merger, but shall continue as the certificate of incorporation of the Surviving
Corporation until otherwise amended as provided by law.
1.4. BYLAWS. The bylaws of Valley as they exist immediately prior to the
Effective Date shall continue as the bylaws of the Surviving Corporation until
otherwise amended as provided by law.
1.5. DIRECTORS AND OFFICERS. The directors and officers of Valley as of the
Effective Time shall continue as the directors and officers of the Surviving
Corporation, with the addition provided for in Section 5.20 hereof.
1.6 CLOSING DATE, CLOSING AND EFFECTIVE TIME. Unless a different date, time
and/or place are agreed to by the parties hereto, the closing of the Merger (the
"Closing") shall take place at 10:00 a.m., at the offices of Valley, 0000 Xxxxxx
Xxxx, Xxxxx, Xxx Xxxxxx, xx a date (the "Closing Date") which shall be within
ten business days following the receipt of all necessary regulatory and
governmental approvals and consents and the expiration of all statutory waiting
periods in respect thereof and the satisfaction or waiver of all of the
conditions to the consummation of the Merger specified in Article VI hereof
(other than the delivery of certificates, opinions and other instruments and
documents to be delivered at the Closing), with the exact date determined by
Valley upon written notice to Ramapo. The Merger shall become effective (and be
consummated) upon the effective time specified by Valley and Ramapo in the
certificate of merger (the "Certificate of Merger"), which shall be prepared by
Valley, shall be in form and substance satisfactory to Valley and Ramapo, and
shall be filed with the Secretary of State of the State of New Jersey. The
parties currently anticipate that the Certificate of Merger shall specify as the
effective time the opening of business on the first business day following the
Closing Date. If no effective time is specified in the Certificate of Merger,
the Merger shall become effective (and be consummated) upon the filing of the
Certificate of Merger.
1.7. THE BANK MERGER. Immediately following the Effective Time, the Bank shall
be merged with and into VNB (the "Bank Merger") in accordance with the
provisions of the National Bank Act, New Jersey Banking Act of 1948, as amended
(the "NJ Banking Act") and/or the regulations of the New Jersey Department of
Banking and Insurance ("Department"), and VNB shall be the surviving bank
3
(the "Surviving Bank"). Upon the consummation of the Bank Merger, the separate
existence of the Bank shall cease and the Surviving Bank shall be considered the
same business and corporate entity as each of the Bank and VNB and all of the
property, rights, privileges, powers and franchises of each of the Bank and VNB
shall vest in the Surviving Bank and the Surviving Bank shall be deemed to have
assumed all of the debts, liabilities, obligations and duties of each of the
Bank and VNB and shall have succeeded to all of each of their relationships,
fiduciary or otherwise, as fully and to the same extent as if such property,
rights, privileges, powers, franchises, debts, obligations, duties and
relationships had been originally acquired, incurred or entered into by the
Surviving Bank. Upon the consummation of the Bank Merger, the articles of
association and bylaws of VNB shall become the articles of association and
bylaws of the Surviving Bank, the officers and employees of VNB and the officers
and employees of the Bank shall be the officers and employees of the Surviving
Bank with such additions as officers as the Board of Directors of VNB shall
determine, and the directors of VNB shall be the directors of the Surviving
Bank. In connection with the execution of this Agreement, the Bank and VNB shall
execute and deliver a separate merger agreement (the "Bank Merger Agreement") in
substantially the form of Exhibit A, annexed hereto, for delivery to the Office
of the Comptroller of the Currency ("OCC") and the Department for approval of
the Bank Merger.
ARTICLE II
CONVERSION OF RAMAPO COMMON STOCK AND OPTIONS
Each share of common stock, $1.00 par value, of Ramapo ("Ramapo Common Stock"),
issued and outstanding immediately prior to the Effective Time, and each option
to purchase shares of Ramapo Common Stock validly issued pursuant to any of the
Ramapo Financial Corporation 1995 Stock Option Plan for Nonemployee Directors
(the "Ramapo Nonemployee Director Option Plan") or the Ramapo Financial
Corporation 1995 Employee Stock Option Plan (the "Ramapo Employee Option Plan")
or the Ramapo Financial Corporation Nonstatutory Stock Option Agreement of
Xxxxxxxx X. X'Xxxx, dated March 17, 1994 (the "X'Xxxx Nonstatutory Plan") and
outstanding immediately prior to the Effective Time (each a "Ramapo Option" and
collectively, the "Ramapo Options") shall, by virtue of the Merger and without
any action on the part of the holder thereof, be converted or cancelled at the
Effective Time in accordance with this Article II.
2.1 CONVERSION OF RAMAPO COMMON STOCK; EXCHANGE RATIO; CASH IN LIEU OF
FRACTIONAL SHARES. Each share of Ramapo Common Stock issued and outstanding
immediately prior to the Effective Time, other than shares to be cancelled
pursuant to Section 2.4 hereof, shall be converted into the right to receive
0.425 (the "Exchange Ratio") shares of Common Stock, no par value, of Valley
("Valley Common Stock"), subject to adjustment as set forth in Section 2.6
below. No fractional shares of Valley Common Stock will be issued, and in lieu
thereof, each holder of Ramapo Common Stock
4
who would otherwise be entitled to a fractional interest will receive an amount
in cash determined by multiplying such fractional interest by the Average
Pre-Closing Price of Valley Common Stock. "Average Pre-Closing Price of Valley
Common Stock" means the average of the Closing Prices of Valley Common Stock for
the ten consecutive full trading days in which such shares are quoted on the New
York Stock Exchange (the "NYSE") ending with (and including) the Determination
Date. "Closing Price" of Valley Common Stock means the daily closing sales price
of such stock as reported on the NYSE (as reported in The Wall Street Journal
or, if not reported thereby, another authoritative source as chosen by Valley).
"Determination Date" means the date five days prior to the Closing.
2.2. EXCHANGE OF SHARES.
(a) Ramapo and Valley hereby appoint Valley National Bank, Trust Department as
the exchange agent (the "Exchange Agent") for purposes of effecting the
conversion of Ramapo Common Stock and Ramapo Options. As soon as practicable
after the Effective Time, the Exchange Agent shall mail to each holder of record
(a "Record Holder") of a Certificate or Certificates which, immediately prior to
the Effective Time represented outstanding shares of Ramapo Common Stock (the
"Certificates"), a mutually agreed upon letter of transmittal (which shall
specify that delivery shall be effected, and risk of loss and title to the
Certificates shall pass, only upon delivery of the Certificates to the Exchange
Agent), and instructions for use in effecting the surrender of the Certificates
in exchange for Valley Common Stock (and cash in lieu of fractional shares) as
provided in Section 2.1 hereof.
(b) Upon surrender of Certificates for exchange and cancellation to the Exchange
Agent, together with such letter of transmittal, duly executed, the Record
Holder shall be entitled to promptly receive in exchange for such Certificates
the consideration as provided in Section 2.1 hereof and the Certificates so
surrendered shall be canceled. The Exchange Agent shall not be obligated to
deliver or cause to be delivered to any Record Holder the consideration to which
such Record Holder would otherwise be entitled until such Record Holder
surrenders the Certificates for exchange or, in default thereof, an appropriate
Affidavit of Loss and Indemnity Agreement and/or a bond as may be reasonably
required in each case by Valley. Notwithstanding the time of surrender of the
Certificates, Record Holders shall be deemed stockholders of Valley for all
purposes from the Effective Time, except that Valley shall withhold the payment
of dividends from any Record Holder until such Record Holder effects the
exchange of Certificates for Valley Common Stock. (Such Record Holder shall
receive such withheld dividends, without interest, upon effecting the share
exchange.)
(c) After the Effective Time, there shall be no transfers on the stock transfer
books of Ramapo of the shares of Ramapo Common Stock which were outstanding
immediately prior to the Effective
5
Time and, if any Certificates representing such shares are presented for
transfer, they shall be canceled and exchanged for the consideration as provided
in Section 2.1 hereof.
(d) If payment of the consideration pursuant to Section 2.1 hereof is to be made
in a name other than that in which the Certificates surrendered in exchange
therefor is registered, it shall be a condition of such payment that the
Certificates so surrendered shall be properly endorsed (or accompanied by an
appropriate instrument of transfer) and otherwise in proper form for transfer,
and that the person requesting such payment shall pay to the Exchange Agent in
advance any transfer or other taxes required by reason of the payment to a
person other than that of the registered holder of the Certificates surrendered,
or required for any other reason, or shall establish to the satisfaction of the
Exchange Agent that such tax has been paid or is not payable.
(e) With respect to each outstanding Ramapo Option the Exchange Agent shall,
after the Effective Time, distribute to the Optionee an amendment to the option
grant evidencing the conversion of the grant to an option to purchase Valley
Common Stock in accordance with Section 2.7 hereof.
2.3. NO DISSENTERS' RIGHTS. Consistent with the provisions of
the NJBCA, no stockholder of Ramapo shall have appraisal rights
with respect to the Merger.
2.4. CANCELLED SHARES. Each share of Ramapo Common Stock (i) which is held by
Ramapo as treasury stock or (ii) which is held by the Bank or any other direct
or indirect subsidiary of the Bank (except as trustee or in a fiduciary
capacity) or (iii) which is held by Valley, shall be canceled and retired at the
Effective Time.
2.5. VALLEY SHARES. The shares of Valley Common Stock outstanding at the
Effective Time shall not be affected by the Merger, but along with the
additional shares of Valley Common Stock to be issued as provided in Section 2.1
hereof, shall become the outstanding common stock of the Surviving Corporation.
2.6 ANTI-DILUTION ADJUSTMENTS. The Exchange Ratio and the Average Pre-Closing
Price of Valley Common Stock shall be appropriately adjusted for any stock
split, stock dividend, stock combination, reclassification or similar
transaction ("Capital Change") effected by Valley with respect to Valley Common
Stock between the date hereof and the Effective Time.
2.7. RAMAPO STOCK OPTIONS. At the Effective Time, each outstanding Ramapo Option
granted to an eligible individual (an "Optionee") under any of the Ramapo
Nonemployee Director Option Plan or the Ramapo Employee Option Plan or the
X'Xxxx Nonstatutory Plan shall be converted into an option to purchase Valley
Common Stock (a "Stock Option"), wherein (x) the right to
6
purchase shares of Ramapo Common Stock pursuant to the Ramapo Option shall be
converted into the right to purchase that same number of shares of Valley Common
Stock multiplied by the Exchange Ratio, (y) the option exercise price per share
of Valley Common Stock shall be the previous option exercise price per share of
Ramapo Common Stock divided by the Exchange Ratio and (z) in all other material
respects the option shall be subject to the same terms and conditions as
governed the Ramapo Option on which it was based, including the length of time
within which the option may be exercised and for any options which are
"incentive stock options" (as defined in Section 422 of the Internal Revenue
Code of 1986, as amended (the "Code"), the adjustments shall be and are intended
to be effected in a manner which is consistent with Section 424(a) of the Code.
Shares of Valley Common Stock issuable upon exercise of Stock Options shall be
covered by an effective registration statement on Form S-8, and Valley shall
file a registration statement on Form S-8 covering such shares as soon as
practicable after the Effective Time.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF RAMAPO
References herein to "Ramapo Disclosure Schedule" shall mean all of the
disclosure schedules required by this Article III, dated as of the date hereof
and referenced to the specific sections and subsections of Article III of this
Agreement, which have been delivered on the date hereof by Ramapo to Valley or
will be delivered within 15 days of the date hereof pursuant to Section 5.11(a)
by Ramapo to Valley. Ramapo hereby represents and warrants to Valley as follows:
3.1. CORPORATE ORGANIZATION.
(a) Ramapo is a corporation duly organized, validly existing and in good
standing under the laws of the State of New Jersey. Ramapo has the corporate
power and authority to own or lease all of its properties and assets and to
carry on its business as it is now being conducted and is duly licensed or
qualified to do business in each jurisdiction in which the nature of the
business conducted by it or the character or location of the properties and
assets owned or leased by it makes such licensing or qualification necessary,
except where the failure to be so licensed or qualified would not have a
material adverse effect on the business, operations, assets or financial
condition of Ramapo on a consolidated basis. Ramapo is registered as a bank
holding company under the BHCA.
(b) All of the Subsidiaries of Ramapo are listed in the Ramapo Disclosure
Schedule. The term "Subsidiary", when used in this Agreement with respect to
Ramapo, means any corporation, joint venture, association, partnership, trust or
other entity in which Ramapo has, directly or indirectly at least a 50% interest
or acts as a general partner. Each Subsidiary of Ramapo is duly organized,
validly existing and in good standing under the laws of its state of
incorporation. The Bank is a state-chartered
7
commercial bank whose deposits are insured by Bank Insurance Fund ("BIF") of the
Federal Deposit Insurance Corporation ("FDIC") to the fullest extent permitted
by law. Each Subsidiary of Ramapo has the corporate power and authority to own
or lease all of its properties and assets and to carry on its business as it is
now being conducted and is duly licensed or qualified to do business in each
jurisdiction in which the nature of the business conducted by it or the
character or location of the properties and assets owned or leased by it makes
such licensing or qualification necessary, except where the failure to be so
licensed or qualified would not have a material adverse effect on the business,
operations, assets or financial condition of Ramapo and its Subsidiaries on a
consolidated basis. The Ramapo Disclosure Schedule sets forth true and complete
copies of the Certificates of Incorporation or Charter, as the case may be, and
Bylaws of Ramapo and each Ramapo Subsidiary as in effect on the date hereof.
Except as set forth in the Ramapo Disclosure Schedule, Ramapo does not own or
control, directly or indirectly, any equity interest in any corporation,
company, association, partnership, joint venture or other entity and owns no
real estate, except (i) residential real estate acquired through foreclosure or
deed in lieu of foreclosure in each individual instance with a fair market value
less than $500,000 and (ii) real estate used for its banking premises.
3.2. CAPITALIZATION.
The authorized capital stock of Ramapo consists of 15,000,000 shares of Ramapo
Common Stock and 1,000,000 shares of stock, no par value per share ("Ramapo No
Par Stock") which may be divided into classes and into series within any class
or classes as determined by the Board of Directors. As of the date hereof, there
were 8,081,199 shares of Ramapo Common Stock issued and outstanding, and no
shares issued and held in the treasury, and no shares of Ramapo No Par Stock
outstanding. As of the date hereof, there were 966,884 shares of Ramapo Common
Stock issuable upon exercise of outstanding Ramapo Options (the "Option Shares")
granted to, directors and officers of Ramapo or the Bank pursuant to the Ramapo
Nonemployee Director Option Plan or the Ramapo Employee Option Plan or the
X'Xxxx Nonstatutory Plan. The Ramapo Disclosure Schedule sets forth (i) all
options which may be exercised for issuance of Ramapo Common Stock and the terms
upon which the options may be exercised, and (ii) true and complete copies of
each of the Ramapo Nonemployee Director Option Plan and the Ramapo Employee
Option Plan and the X'Xxxx Nonstatutory Plan and a specimen of each form of
agreement pursuant to which any outstanding stock option was granted, including
a list of each outstanding stock option issued pursuant thereto. All issued and
outstanding shares of Ramapo Common Stock, and all issued and outstanding shares
of capital stock of each Ramapo Subsidiary, have been duly authorized and
validly issued, are fully paid, and nonassessable. The authorized capital stock
of the Bank consists of 2,000,000 shares of common stock, $2.00 par value. All
of the outstanding shares of capital
8
stock of each Ramapo Subsidiary are owned by Ramapo and are free and clear of
any liens, encumbrances, charges, restrictions or rights of third parties.
Except for the Ramapo Options and the Valley Stock Option, neither Ramapo nor
any Ramapo Subsidiary has or is bound by any outstanding subscriptions, options,
warrants, calls, commitments or agreements of any character calling for the
transfer, purchase or issuance of any shares of capital stock of Ramapo or any
Ramapo Subsidiary or any securities representing the right to purchase or
otherwise receive any shares of such capital stock or any securities convertible
into or representing the right to purchase or subscribe for any such shares, and
there are no agreements or understandings with respect to voting of any such
shares.
3.3. AUTHORITY; NO VIOLATION.
(a) Subject to the approval of this Agreement and the transactions contemplated
hereby by the stockholders of Ramapo, and subject to the parties obtaining all
necessary regulatory approvals, Ramapo and the Bank have full corporate power
and authority to execute and deliver this Agreement and to consummate the
transactions contemplated hereby in accordance with the terms hereof. The
execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby have been duly and validly approved by the
Board of Directors of each of Ramapo and the Bank. The execution and delivery of
the Bank Merger Agreement has been duly and validly approved by the Board of
Directors of the Bank. Except for the approvals described in paragraph (b)
below, no other corporate proceedings on the part of Ramapo or the Bank are
necessary to consummate the transactions contemplated hereby. This Agreement has
been duly and validly executed and delivered by Ramapo and the Bank, and
constitutes valid and binding obligations of Ramapo and the Bank, enforceable
against Ramapo and the Bank in accordance with its terms.
(b) Neither the execution and delivery of this Agreement by Ramapo and the Bank,
nor the consummation by Ramapo and the Bank of the transactions contemplated
hereby in accordance with the terms hereof, or compliance by Ramapo and the Bank
with any of the terms or provisions hereof, will (i) violate any provision of
Ramapo's or the Bank's Certificates of Incorporation or Bylaws, (ii) assuming
that the consents and approvals set forth below are duly obtained, violate any
statute, code, ordinance, rule, regulation, judgment, order, writ, decree or
injunction applicable to Ramapo or the Bank or any of their respective
properties or assets, or (iii) except as set forth in the Ramapo Disclosure
Schedule, violate, conflict with, result in a breach of any provisions of,
constitute a default (or an event which, with notice or lapse of time, or both,
would constitute a default) under, result in the termination of, accelerate the
performance required by, or result in the creation of any lien, security
interest, charge or other encumbrance upon any of the respective properties or
assets of Ramapo or the Bank under, any
9
of the terms, conditions or provisions of any note, bond, mortgage, indenture,
deed of trust, license, lease, agreement or other instrument or obligation to
which Ramapo or the Bank is a party, or by which either or both of them or any
of their respective properties or assets may be bound or affected except, with
respect to (ii) and (iii) above, such as individually and in the aggregate will
not have a material adverse effect on the business, operations, assets or
financial condition of Ramapo and its Subsidiaries on a consolidated basis, and
which will not prevent or delay the consummation of the transactions
contemplated hereby. Except for consents and approvals of or filings or
registrations with or notices to the OCC, the Department, the Board of Governors
of the Federal Reserve System ("FRB"), the Securities and Exchange Commission
("SEC"), applicable state securities bureaus or commissions, the New Jersey
Secretary of State and the stockholders of Ramapo, no consents or approvals of
or filings or registrations with or notices to any third party or any public
body or authority are necessary on behalf of Ramapo or the Bank in connection
with (x) the execution and delivery by Ramapo and the Bank of this Agreement and
(y) the consummation by Ramapo and the Bank of the transactions contemplated
hereby and (z) the execution and delivery by the Bank of the Bank Merger
Agreement and the consummation by the Bank of the transactions contemplated
thereby.
3.4. FINANCIAL STATEMENTS.
(a) The Ramapo Disclosure Schedule sets forth copies of the consolidated
statements of condition of Ramapo as of December 31, 1995, 1996 and 1997, and
the related consolidated statements of income, stockholders' equity and cash
flows for the periods ended December 31 in each of the three years 1995 through
1997, in each case accompanied by the audit report of Xxxxxx Xxxxxxxx LLP,
independent public accountants with respect to Ramapo, and the unaudited
consolidated statements of condition of Ramapo as of September 30, 1998 and
related unaudited consolidated statements of income, changes in stockholders'
equity and cash flows for the nine months then ended as reported in Ramapo's
Quarterly Report on Form 10-Q, filed with the SEC under the Securities and
Exchange Act of 1934, as amended (the "1934 Act") (collectively, the "Ramapo
Financial Statements"). The Ramapo Financial Statements (including the related
notes) have been prepared in accordance with generally accepted accounting
principles ("GAAP") consistently applied during the periods involved, and fairly
present the consolidated financial condition of Ramapo as of the respective
dates set forth therein, and the related consolidated statements of income,
stockholders' equity and cash flows fairly present the results of the
consolidated operations, stockholders' equity and cash flows of Ramapo for the
respective periods set forth therein.
(b) The books and records of Ramapo and its Subsidiaries have been and are being
maintained in material compliance with
10
applicable legal and accounting requirements, and reflect only
actual transactions.
(c) Except as and to the extent reflected, disclosed or reserved against in the
Ramapo Financial Statements (including the notes thereto), as of September 30,
1998 neither Ramapo nor any of its Subsidiaries had any material liabilities,
whether absolute, accrued, contingent or otherwise material to the business,
operations, assets or financial condition of Ramapo or any of its Subsidiaries.
Since September 30, 1998 and to the date hereof, neither Ramapo nor any of its
Subsidiaries have incurred any material liabilities except in the ordinary
course of business and consistent with prudent banking practice, except as
specifically contemplated by this Agreement.
3.5. BROKERAGE FEES; FINANCIAL ADVISOR. Other than Xxxxxxxxx Associates, Inc.
("Xxxxxxxxx"), neither Ramapo nor any of its Subsidiaries nor any of their
respective directors or officers has employed any broker or finder or incurred
any liability for any broker's or finder's fees or commissions in connection
with any of the transactions contemplated by this Agreement. Copies of Ramapo's
agreements with Xxxxxxxxx are set forth in the Ramapo Disclosure Schedule.
Xxxxxxxxx has delivered to Ramapo its written opinion with respect to the
fairness, from a financial point of view, of the Exchange Ratio to the
shareholders of Ramapo in the Merger. There are no fees (other than time charges
billed at usual and customary rates) payable to any consultants, including
lawyers and accountants, in connection with this transaction or which would be
triggered by consummation of this transaction or the termination of the services
of such consultants by Ramapo or any of its Subsidiaries other than fees which
will be payable by Ramapo to Xxxxxxxxx.
3.6. ABSENCE OF CERTAIN CHANGES OR EVENTS.
(a) There has not been any material adverse change in the business, operations,
assets or financial condition of Ramapo and its Subsidiaries on a consolidated
basis since September 30, 1998 and, except for the direct or indirect costs of
the Merger, to Ramapo's knowledge, no facts or conditions exist which Ramapo
believes will cause or is likely to cause such a material adverse change in the
future.
(b) Except as set forth in the Ramapo Disclosure Schedule, neither Ramapo nor
any of its Subsidiaries has taken or permitted any of the actions set forth in
Section 5.2 hereof between September 30, 1998 and the date hereof and Ramapo and
the Ramapo Subsidiaries have conducted their business only in the ordinary
course, consistent with past practice.
3.7. LEGAL PROCEEDINGS. Except as disclosed in the Ramapo Disclosure Schedule,
neither Ramapo nor any of its Subsidiaries is a party to any, and there are no
pending or, to Ramapo's knowledge, threatened, legal, administrative, arbitral
or other proceedings, claims, actions or governmental investigations of
11
any nature against Ramapo or any of its Subsidiaries. Except as disclosed in the
Ramapo Disclosure Schedule, neither Ramapo nor any of its Subsidiaries is a
party to any order, judgment or decree entered against Ramapo or any Ramapo
Subsidiary in any lawsuit or proceeding.
3.8. TAXES AND TAX RETURNS.
(a) To the knowledge of Ramapo, Ramapo and each Ramapo Subsidiary have duly
filed (and until the Effective Time will so file) all returns, declarations,
reports, information returns and statements ("Returns") required to be filed by
them in respect of any federal, state and local taxes (including withholding
taxes, penalties or other payments required) and each has duly paid (and until
the Effective Time will so pay) all such taxes due and payable, other than taxes
or other charges which are being contested in good faith (and disclosed to
Valley in writing). Ramapo and each Ramapo Subsidiary have established (and
until the Effective Time will establish) on their books and records reserves for
the payment of all federal, state and local taxes not yet due and payable, but
incurred in respect of Ramapo or any Ramapo Subsidiary through such date, which
reserves are, to the knowledge of Ramapo, adequate for such purposes. Except as
set forth in the Ramapo Disclosure Schedule, the federal income tax returns of
Ramapo and its Subsidiaries have been examined by the Internal Revenue Service
(the "IRS") (or are closed to examination due to the expiration of the
applicable statute of limitations) and no deficiencies were asserted as a result
of such examinations which have not been resolved and paid in full. Except as
set forth in the Ramapo Disclosure Schedule, the applicable state income tax
returns of Ramapo and its Subsidiaries have been examined by the applicable
authorities (or are closed to examination due to the expiration of the statute
of limitations) and no deficiencies were asserted as a result of such
examinations which have not been resolved and paid in full. To the knowledge of
Ramapo, there are no audits or other administrative or court proceedings
presently pending nor any other disputes pending, or claims asserted for, taxes
or assessments upon Ramapo or any of its Subsidiaries, nor has Ramapo or any of
its Subsidiaries given any currently outstanding waivers or comparable consents
regarding the application of the statute of limitations with respect to any
taxes or Returns.
(b) Except as set forth in the Ramapo Disclosure Schedule, neither Ramapo nor
any of its Subsidiaries (i) has requested any extension of time within which to
file any tax Return which Return has not since been filed, (ii) is a party to
any agreement providing for the allocation or sharing of taxes, (iii) is
required to include in income any adjustment pursuant to Section 481(a) of the
Code, by reason of a voluntary change in accounting method initiated by Ramapo
or any Ramapo Subsidiary (nor does Ramapo have any knowledge that the IRS has
proposed any such adjustment or change of accounting method) or (iv) has filed a
12
consent pursuant to Section 341(f) of the Code or agreed to have Section
341(f)(2) of the Code apply.
3.9. EMPLOYEE BENEFIT PLANS.
(a) Except as disclosed in the Ramapo Disclosure Schedule, neither Ramapo nor
any of its Subsidiaries maintains or contributes to any "employee pension
benefit plan", within the meaning of Section 3(2)(A) of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA") (the "Ramapo Pension Plans"),
"employee welfare benefit plan", within the meaning of Section 3(1) of ERISA
(the "Ramapo Welfare Plans"), stock option plan, stock purchase plan, deferred
compensation plan, severance plan, bonus plan, employment agreement or other
similar plan, program or arrangement. Neither Ramapo nor any of its Subsidiaries
has, since September 2, 1974, contributed to any "Multiemployer Plan", within
the meaning of Sections 3(37) and 4001(a)(3) of ERISA.
(b) Ramapo has delivered to Valley in the Ramapo Disclosure Schedule a complete
and accurate copy of each of the following with respect to each of the Ramapo
Pension Plans and Ramapo Welfare Plans: (i) plan document, summary plan
description, and summary of material modifications (if not available, a detailed
description of the foregoing); (ii) trust agreement or insurance contract, if
any; (iii) most recent IRS determination letter, if any; (iv) most recent
actuarial report, if any; and (v) most recent annual report on Form 5500.
(c) The present value of all accrued benefits both vested and non-vested under
each of the Ramapo Pension Plans subject to Title IV of ERISA, based upon the
actuarial assumptions used for purposes of the most recent actuarial valuation
prepared by such Ramapo Pension Plan's actuary, did not exceed the then current
value of the assets of such plans allocable to such accrued benefits. To the
best of Ramapo's knowledge, the actuarial assumptions then utilized for such
plans were reasonable and appropriate as of the last valuation date and reflect
then current market conditions.
(d) During the last six years, the Pension Benefit Guaranty Corporation (the
"PBGC") has not asserted any claim for liability against Ramapo or any of its
Subsidiaries which has not been paid in full.
(e) All premiums (and interest charges and penalties for late payment, if
applicable) due to the PBGC with respect to each Ramapo Pension Plan have been
paid. All contributions required to be made to each Ramapo Pension Plan under
the terms thereof, ERISA or other applicable law have been timely made, and all
amounts properly accrued to date as liabilities of Ramapo and its Subsidiaries
which have not been paid have been properly recorded on the books of Ramapo and
its Subsidiaries.
13
(f) Except as disclosed on the Ramapo Disclosure Schedule, each of the Ramapo
Pension Plans, the Ramapo Welfare Plans and each other plan and arrangement
identified on the Ramapo Disclosure Schedule has been operated in compliance in
all material respects with the provisions of ERISA, the Code, all regulations,
rulings and announcements promulgated or issued thereunder, and all other
applicable governmental laws and regulations. Furthermore, the IRS has issued a
favorable determination letter, which takes into account the Tax Reform Act of
1986 and subsequent legislation, with respect to each of the Ramapo Pension
Plans and Ramapo is not aware of any fact or circumstance which would disqualify
any such plan, that could not be retroactively corrected (in accordance with the
procedures of the IRS).
(g) To the knowledge of Ramapo, within the past two plan years no non-exempt
prohibited transaction, within the meaning of Section 4975 of the Code or
Section 406 of ERISA, has occurred with respect to any of the Ramapo Welfare
Plans or Ramapo Pension Plans.
(h) No Ramapo Pension Plan or any trust created thereunder has been terminated,
nor have there been any "reportable events", within the meaning of Section
4034(b) of ERISA, with respect to any of the Ramapo Pension Plans.
(i) To the knowledge of Ramapo, no "accumulated funding deficiency", within the
meaning of Section 412 of the Code, has been incurred with respect to any of the
Ramapo Pension Plans.
(j) There are no pending, or, to the knowledge of Ramapo, threatened or
anticipated claims (other than routine claims for benefits) by, on behalf of or
against any of the Ramapo Pension Plans or the Ramapo Welfare Plans, any trusts
related thereto or any other plan or arrangement identified in the Ramapo
Disclosure Schedule.
(k) No Ramapo Pension or Welfare Plan provides medical or death benefits
(whether or not insured) beyond an employee's retirement or other termination of
service, other than (i) coverage mandated by law, or (ii) death benefits under
any Ramapo Pension Plan.
(l) Except with respect to customary health, life and disability benefits or as
disclosed in the Ramapo Disclosure Schedule, there are no unfunded benefits
obligations which are not accounted for by reserves shown on the Ramapo
Financial Statements and established under GAAP, or otherwise noted on such
financial statements.
(m) With respect to each Ramapo Pension and Welfare Plan that is funded wholly
or partially through an insurance policy, there will be no liability of Ramapo
or any Ramapo Subsidiary as of the Effective Time under any such insurance
policy or ancillary agreement with respect to such insurance policy in the
nature of a retroactive rate adjustment, loss sharing arrangement or other
14
actual or contingent liability arising wholly or partially out of events
occurring prior to the Effective Time.
(n) Except as hereafter agreed to by Valley in writing or as disclosed on the
Ramapo Disclosure Schedule, the consummation of the transactions contemplated by
this Agreement will not (i) entitle any current or former employee of Ramapo or
any Ramapo Subsidiary to severance pay, unemployment compensation or any similar
payment, or (ii) accelerate the time of payment, accelerate the vesting, or
increase the amount, of any compensation or benefits due to any current employee
or former employee under any Ramapo Pension Plan or Ramapo Welfare Plan.
3.10. REPORTS.
(a) The Ramapo Disclosure Schedule lists, and as to item (i)
below Ramapo has previously delivered or made available to Valley a complete
copy of, each (i) final registration statement, prospectus, annual, quarterly or
special report and definitive proxy statement filed by Ramapo since January 1,
1995 pursuant to the Securities Act of 1933, as amended ("1933 Act"), or the
1934 Act and (ii) communication (other than general advertising materials, press
releases and dividend checks) mailed by Ramapo to its shareholders as a class
since January 1, 1995.
(b) Since June 1, 1996, (i) Ramapo has filed all reports that
it was required to file with the SEC under the 1934 Act, and (ii) Ramapo and the
Bank each has duly filed all material forms, reports and documents which they
were required to file with each agency charged with regulating any aspect of
their business, in each case in form which was correct in all material respects,
and, subject to permission from such regulatory authorities, Ramapo promptly
will deliver or make available to Valley accurate and complete copies of such
reports. As of their respective dates, each such form, report, or document
referred to in either of clauses (i) or (ii) above, and each final registration
statement, prospectus, annual, quarterly or special report, definitive proxy
statement or communication referred to in either of clauses (i) or (ii) of
paragraph (a) above, complied in all material respects with all applicable
statutes, rules and regulations and did not contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary in order to make the statements made therein, in light of the
circumstances under which they were made, not misleading; provided that
information contained in any such document as of a later date shall be deemed to
modify information as of an earlier date. The Ramapo Disclosure Schedule lists
the dates of all examinations of Ramapo or the Bank conducted by either the
Department or the FDIC since January 1, 1996 and the dates of any responses
thereto submitted by Ramapo or the Bank.
3.11. RAMAPO AND BANK INFORMATION. The information relating
to Ramapo and the Bank to be contained in the Proxy
15
Statement/Prospectus (as defined in Section 5.6(a) hereof) to be delivered to
stockholders of Ramapo in connection with the solicitation of their approval of
this Agreement and the transactions contemplated hereby, as of the date the
Proxy Statement/Prospectus is mailed to stockholders of Ramapo, and up to and
including the date of the meeting of stockholders to which such Proxy
Statement/Prospectus relates, will not contain any untrue statement of a
material fact 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.
3.12. COMPLIANCE WITH APPLICABLE LAW.
(a) General. Except as set forth in the Ramapo Disclosure Schedule, each of
Ramapo and the Ramapo Subsidiaries holds all licenses, franchises, permits and
authorizations necessary for the lawful conduct of its business under and
pursuant to each, and has complied with and is not in default in any respect
under any, applicable law, statute, order, rule, regulation, policy and/or
guideline of any federal, state or local governmental authority relating to
Ramapo or any of its Subsidiaries (other than where such defaults or
non-compliances will not, alone or in the aggregate, result in a material
adverse effect on the business, operations, assets or financial condition of
Ramapo and its Subsidiaries on a consolidated basis) and Ramapo has not received
notice of violation of, and does not know of any violations of, any of the
above.
(b) CRA. Without limiting the foregoing, to its knowledge the Bank has complied
in all material respects with the Community Reinvestment Act ("CRA") and Ramapo
has no reason to believe that any person or group would object to the
consummation of this Merger due to the CRA performance of or rating of the Bank.
Except as listed on the Ramapo Disclosure Schedule to the knowledge of the Bank,
no person or group has adversely commented upon the Bank's CRA performance.
3.13. CERTAIN CONTRACTS.
(a) Except as disclosed in the Ramapo Disclosure Schedule under this Section or
Section 3.5, (i) neither Ramapo nor any Ramapo Subsidiary is a party to or bound
by any contract or understanding (whether written or oral) with respect to the
employment or termination of any present or former officers, employees,
directors or consultants and (ii) the consummation of the transactions
contemplated by this Agreement will not (either alone or upon the occurrence of
any additional acts or events) result in any payment (whether of severance pay
or otherwise) becoming due from Ramapo or any Ramapo Subsidiary to any officer,
employee, director or consultant thereof. The Ramapo Disclosure Schedule sets
forth true and correct copies of all employment agreements or termination
agreements with officers, employees, directors, or consultants to which Ramapo
or any Ramapo Subsidiary is a party.
16
(b) Except as disclosed in the Ramapo Disclosure Schedule, (i) as of the date of
this Agreement, neither Ramapo nor any Ramapo Subsidiary is a party to or bound
by any commitment, agreement or other instrument which contemplates the payment
by Ramapo or any Ramapo Subsidiary of amounts in excess of $100,000, or which
has a term extending beyond June 1, 1999 and cannot be terminated by Ramapo or
its subsidiary without consent of the other party thereto, (ii) no commitment,
agreement or other instrument to which Ramapo or any Ramapo Subsidiary is a
party or by which any of them is bound limits the freedom of Ramapo or any
Ramapo Subsidiary to compete in any line of business or with any person, and
(iii) neither Ramapo nor any Ramapo Subsidiary is a party to any collective
bargaining agreement.
(c) Except as disclosed in the Ramapo Disclosure Schedule, neither Ramapo nor
any Ramapo Subsidiary nor, to the knowledge of Ramapo, any other party thereto,
is in default in any material respect under any material lease, contract,
mortgage, promissory note, deed of trust, loan or other commitment or
arrangement.
3.14. PROPERTIES AND INSURANCE.
(a) Ramapo and its Subsidiaries have good, and as to owned real property
marketable, title to all material assets and properties, whether real or
personal, tangible or intangible, reflected in Ramapo's consolidated balance
sheet as of September 30, 1998, or owned and acquired subsequent thereto (except
to the extent that such assets and properties have been disposed of for fair
value in the ordinary course of business since September 30, 1998), subject to
no encumbrances, liens, mortgages, security interests or pledges, except (i)
those items that secure liabilities that are reflected in such balance sheet or
the notes thereto or incurred in the ordinary course of business after the date
of such balance sheet, (ii) statutory liens for amounts not yet delinquent or
which are being contested in good faith, (iii) such encumbrances, liens,
mortgages, security interests, pledges and title imperfections that are not in
the aggregate material to the business, operations, assets, and financial
condition of Ramapo and its Subsidiaries taken as a whole and (iv) with respect
to owned real property, title imperfections noted in title reports delivered to
Valley prior to the date hereof. Ramapo and its Subsidiaries as lessees have the
right under valid and subsisting leases to occupy, use, possess and control all
property leased by them in all material respects as presently occupied, used,
possessed and controlled by them.
(b) The Ramapo Disclosure Schedule lists all policies of insurance covering
business operations and all insurable properties and assets of Ramapo and its
Subsidiaries showing all risks insured against, in each case under valid,
binding and enforceable policies or bonds, with such amounts and such
deductibles as are specified. As of the date hereof, neither Ramapo nor any of
its Subsidiaries has received any notice of cancellation or notice of a material
amendment of any such
17
insurance policy or bond or is in default under such policy or bond, no coverage
thereunder is being disputed and all material claims thereunder have been filed
in a timely fashion.
3.15. MINUTE BOOKS. The minute books of Ramapo and its Subsidiaries
contain records that are accurate in all material respects of all meetings and
other corporate action held of their respective stockholders and Boards of
Directors (including committees of their respective Boards of Directors).
3.16. ENVIRONMENTAL MATTERS. Except as set forth in the
Ramapo Disclosure Schedule:
(a) Neither Ramapo nor any Ramapo Subsidiary has received any written notice,
citation, claim, assessment, proposed assessment or demand for abatement
alleging that Ramapo or such Ramapo Subsidiary (either directly or as a trustee
or fiduciary, or as a successor-in-interest in connection with the enforcement
of remedies to realize the value of properties serving as collateral for
outstanding loans) is responsible for the correction or cleanup of any condition
resulting from the violation of any law, ordinance or other governmental
regulation regarding environmental matters, which correction or cleanup would be
material to the business, operations, assets or financial condition of Ramapo
and the Ramapo Subsidiaries taken as a whole. Ramapo has no knowledge that any
toxic or hazardous substances or materials have been emitted, generated,
disposed of or stored on any real property owned or leased by Ramapo or any
Ramapo Subsidiary, as OREO or otherwise, or owned or controlled by Ramapo or any
Ramapo Subsidiary as a trustee or fiduciary (collectively, "Properties"), in any
manner that violates or, after the lapse of time will violate, any presently
existing federal, state or local law or regulation governing or pertaining to
such substances and materials.
(b) Ramapo has no knowledge that any of the Properties has been operated in any
manner in the three years prior to the date of this Agreement that violated any
applicable federal, state or local law or regulation governing or pertaining to
toxic or hazardous substances and materials, the violation of which would have a
material adverse effect on the business, operations, assets or financial
condition of Ramapo and the Ramapo Subsidiaries taken as a whole.
(c) To the knowledge of Ramapo, except as set forth in the Ramapo Disclosure
Schedule, there are no underground storage tanks on, in or under any of the
Properties and no underground storage tanks have been closed or removed from any
of the Properties while the property was owned, operated or controlled by Ramapo
or any Ramapo Subsidiary.
3.17. RESERVES. As of the date hereof, the reserve for loan
and lease losses in the Ramapo Financial Statements is adequate
18
based upon past loan loss experiences and potential losses in the current
portfolio to cover all known or anticipated loan losses.
3.18. NO EXCESS PARACHUTE PAYMENTS. No officer, director, employee or agent (or
former officer, director, employee or agent) of Ramapo or any Ramapo Subsidiary
is entitled now, or will or may be entitled to as a consequence of this
Agreement, the Merger or the Bank Merger, to any payment or benefit from Ramapo,
a Ramapo Subsidiary, Valley or VNB which if paid or provided would constitute an
"excess parachute payment", as defined in Section 280G of the Code or
regulations promulgated thereunder.
3.19. YEAR 2000 COMPLIANCE. Ramapo and the Ramapo Subsidiaries have taken all
reasonable steps necessary to address the software, accounting and record
keeping issues raised in order for the data processing systems used in the
business conducted by Ramapo and the Ramapo Subsidiaries to be substantially
Year 2000 compliant on or before the end of 1999 and, except as set forth in the
Ramapo Disclosure Schedule, Ramapo does not expect the future cost of addressing
such issues to be material. Neither Ramapo nor any Ramapo Subsidiary has
received a rating of less than satisfactory from any bank regulatory agency with
respect to Year 2000 compliance.
3.20. AGREEMENTS WITH BANK REGULATORS. Neither Ramapo nor any Ramapo Subsidiary
is a party to any agreement or memorandum of understanding with, or a party to
any commitment letter, board resolution submitted to a regulatory authority or
similar undertaking to, or is subject to any order or directive by, or is a
recipient of any extraordinary supervisory letter from, any court, governmental
authority or other regulatory or administrative agency or commission, domestic
or foreign ("Governmental Entity") which restricts materially the conduct of its
business, or in any manner relates to its capital adequacy, its credit or
reserve policies or its management, except for those the existence of which has
been disclosed in writing to Valley by Ramapo prior to the date of this
Agreement, nor has Ramapo been advised by any Governmental Entity that it is
contemplating issuing or requesting (or is considering the appropriateness of
issuing or requesting) any such order, decree, agreement, memorandum of
understanding, extraordinary supervisory letter, commitment letter or similar
submission, except as disclosed in writing to Valley by Ramapo prior to the date
of this Agreement. Neither Ramapo nor any Ramapo Subsidiary is required by
Section 32 of the Federal Deposit Insurance Act to give prior notice to a
Federal banking agency of the proposed addition of an individual to its board of
directors or the employment of an individual as a senior executive officer,
except as disclosed in writing to Valley by Ramapo prior to the date of this
Agreement.
3.21. DISCLOSURE. No representation or warranty contained in Article III of
this Agreement contains any untrue statement of a
19
material fact or omits to state a material fact necessary to make the statements
herein not misleading.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF VALLEY
References herein to the "Valley Disclosure Schedule" shall mean all of the
disclosure schedules required by this Article IV, dated as of the date hereof
and referenced to the specific sections and subsections of Article IV of this
Agreement, which have been delivered on the date hereof by Valley to Ramapo.
Valley hereby represents and warrants to Ramapo as follows:
4.1. CORPORATE ORGANIZATION.
(a) Valley is a corporation duly organized and validly existing and in good
standing under the laws of the State of New Jersey. Valley has the corporate
power and authority to own or lease all of its properties and assets and to
carry on its business as it is now being conducted, and is duly licensed or
qualified to do business in each jurisdiction in which the nature of the
business conducted by it or the character or location of the properties and
assets owned or leased by it makes such licensing or qualification necessary,
except where the failure to be so licensed or qualified would not have a
material adverse effect on the business, operations, assets or financial
condition of Valley or its Subsidiaries (defined below). Valley is registered as
a bank holding company under the BHCA.
(b) All of the Subsidiaries of Valley are listed in the Valley Disclosure
Schedule. The term "Subsidiary" when used in this Agreement with reference to
Valley, means any corporation, joint venture, association, partnership, trust or
other entity in which Valley has, directly or indirectly, at least a 50%
interest or acts as a general partner. Each Subsidiary of Valley is duly
organized and validly existing and in good standing under the laws of the
jurisdiction of its incorporation. VNB is a national bank whose deposits are
insured by the BIF of the FDIC to the fullest extent permitted by law. Each
Subsidiary of Valley has the corporate power and authority to own or lease all
of its properties and assets and to carry on its business as it is now being
conducted and is duly licensed or qualified to do business in each jurisdiction
in which the nature of the business conducted by it or the character or location
of the properties and assets owned or leased by it makes such licensing or
qualification necessary, except where the failure to be so licensed or qualified
would not have a material adverse effect on the business, operations, assets or
financial condition of Valley and its Subsidiaries.
4.2. CAPITALIZATION. The authorized capital stock of Valley consists solely
of 98,437,500 shares of Valley Common Stock. As of November 30, 1998, there
were 55,201,357 shares of Valley
20
Common Stock issued and outstanding net of treasury stock, and 303,545 treasury
shares. Since November 30, 1998, to and including the date of this Agreement, no
additional shares of Valley Common Stock have been issued except in connection
with exercises of options granted under the Long-Term Stock Incentive Plan of
Valley (the "Valley Option Plan") or grants under the Valley Option Plan or
grants or options under any option or stock plan assumed by Valley in connection
with any other acquisition (the "Acquired Stock Plans"). As of November 30,
1998, except for: (a) 2,352,250 shares of Valley Common Stock issuable upon
exercise of outstanding stock options and stock appreciation rights granted
pursuant to the Valley Option Plan or the Acquired Stock Plans, and (b) 14,924
shares of Valley Common Stock issuable upon exercise of outstanding stock
options granted to a consultant for Valley, there were no shares of Valley
Common Stock issuable upon the exercise of outstanding stock options or
otherwise. All issued and outstanding shares of Valley Common Stock, and all
issued and outstanding shares of capital stock of Valley's Subsidiaries, have
been duly authorized and validly issued, are fully paid, nonassessable and free
of preemptive rights, and are free and clear of all liens, encumbrances,
charges, restrictions or rights of third parties. All of the outstanding shares
of capital stock of Valley's Subsidiaries are owned by Valley free and clear of
any liens, encumbrances, charges, restrictions or rights of third parties.
Except for the options and stock appreciation rights referred to above under the
Valley Option Plan, neither Valley nor any of Valley's Subsidiaries has or is
bound by any outstanding subscriptions, options, warrants, calls, commitments or
agreements of any character calling for the transfer, purchase or issuance of
any shares of capital stock of Valley or Valley's Subsidiaries or any securities
representing the right to otherwise receive any shares of such capital stock or
any securities convertible into or representing the right to purchase or
subscribe for any such shares, and there are no agreements or understandings
with respect to voting of any such shares.
4.3. AUTHORITY; NO VIOLATION.
(a) Valley and VNB have full corporate power and authority to execute and
deliver this Agreement and to consummate the transactions contemplated hereby in
accordance with the terms hereof. Valley has a sufficient number of authorized
but unissued shares of Valley Common Stock to pay the consideration for the
Merger set forth in Article II of this Agreement. The execution and delivery of
this Agreement and the consummation of the transactions contemplated hereby have
been duly and validly approved by the Board of Directors of each of Valley and
VNB. The execution and delivery of the Bank Merger Agreement has been duly and
validly approved by the Board of Directors of VNB. No other corporate
proceedings on the part of Valley and VNB are necessary to consummate the
transactions contemplated hereby (except for the approval by Valley of the Bank
Merger Agreement). This Agreement has been duly and validly executed and
delivered
21
by Valley and VNB and constitutes a valid and binding obligation of Valley and
VNB, enforceable against Valley and VNB in accordance with its terms.
(b) Neither the execution or delivery of this Agreement nor the consummation by
Valley and VNB of the transactions contemplated hereby in accordance with the
terms hereof, will (i) violate any provision of the Certificate of Incorporation
or Bylaws of Valley or the Articles of Association or Bylaws of VNB, (ii)
assuming that the consents and approvals set forth below are duly obtained,
violate any statute, code, ordinance, rule, regulation, judgment, order, writ,
decree or injunction applicable to Valley or VNB or any of their respective
properties or assets, or (iii) violate, conflict with, result in a breach of any
provision of, constitute a default (or an event which, with notice or lapse of
time, or both, would constitute a default) under, result in the termination of,
accelerate the performance required by, or result in the creation of any lien,
security interest, charge or other encumbrance upon any of the properties or
assets of Valley or VNB under, any of the terms, conditions or provisions of any
note, bond, mortgage, indenture, deed of trust, license, lease, agreement or
other instrument or obligation to which Valley or VNB is a party, or by which
Valley or VNB or any of their properties or assets may be bound or affected,
except, with respect to (ii) and (iii) above, such as in the aggregate will not
have a material adverse effect on the business, operations, assets or financial
condition of Valley and Valley's Subsidiaries on a consolidated basis, or the
ability of Valley and VNB to consummate the transactions contemplated hereby.
Except for consents and approvals of or filings or registrations with or notices
to the OCC, the Department, the FRB, the New Jersey Secretary of State, the SEC,
or applicable state securities bureaus or commissions, no consents or approvals
of or filings or registrations with or notices to any third party or any public
body or authority are necessary on behalf of Valley or VNB in connection with
(a) the execution and delivery by Valley or VNB of this Agreement, (b) the
consummation by Valley of the Merger and the other transactions contemplated
hereby and (c) the execution and delivery by VNB of the Bank Merger Agreement
and the consummation by VNB of the Bank Merger and other transactions
contemplated thereby. To Valley's knowledge, no fact or condition exists which
Valley has reason to believe will prevent it or VNB from obtaining the
aforementioned consents and approvals.
4.4. FINANCIAL STATEMENTS.
(a) Valley has previously delivered to Ramapo copies of the consolidated
statements of financial condition of Valley as of December 31, 1995, 1996 and
1997, the related consolidated statements of income, changes in stockholders'
equity and of cash flows for the periods ended December 31 in each of the three
fiscal years 1995 through 1997, in each case accompanied by the audit report of
KPMG Peat Marwick LLP, independent public
22
accountants with respect to Valley, and the unaudited consolidated statements of
condition of Valley as of September 30, 1998 and the related unaudited
consolidated statements of income, changes in stockholders' equity and cash
flows for the nine months then ended as reported in Valley's Quarterly Report on
Form 10-Q, filed with the SEC under the 1934 Act (collectively, the "Valley
Financial Statements"). The Valley Financial Statements (including the related
notes), have been prepared in accordance with GAAP consistently applied during
the periods involved, and fairly present the consolidated financial position of
Valley as of the respective dates set forth therein, and the related
consolidated statements of income, changes in stockholders' equity and of cash
flows (including the related notes, where applicable) fairly present the results
of the consolidated operations and changes in stockholders' equity and of cash
flows of Valley for the respective fiscal periods set forth therein.
(b) The books and records of Valley and its subsidiaries have been and are being
maintained in material compliance with applicable legal and accounting
requirements, and reflect only actual transactions.
(c) Except as and to the extent reflected, disclosed or reserved against in the
Valley Financial Statements (including the notes thereto), as of September 30,
1998 neither Valley nor any of its Subsidiaries had or has, as the case may be,
any material obligation or liability, whether absolute, accrued, contingent or
otherwise, material to the business, operations, assets or financial condition
of Valley or any of its Subsidiaries. Since September 30, 1998, neither Valley
nor any of its Subsidiaries have incurred any material liabilities, except in
the ordinary course of business and consistent with prudent banking practice.
4.5. BROKERAGE FEES. Except for fees to be paid to MG Advisors, Inc., neither
Valley nor VNB nor any of their respective directors or officers has employed
any broker or finder or incurred any liability for any broker's or finder's fees
or commissions in connection with any of the transactions contemplated by this
Agreement.
4.6. ABSENCE OF CERTAIN CHANGES OR EVENTS. There has not been any material
adverse change in the business, operations, assets or financial condition of
Valley and Valley's Subsidiaries on a consolidated basis since September 30,
1998 and to Valley's knowledge, no fact or condition exists which Valley
believes will cause or is likely to cause such a material adverse change in the
future.
4.7. VALLEY INFORMATION. The information relating to Valley and its
Subsidiaries, this Agreement and the transactions contemplated hereby in the
Registration Statement and Proxy Statement/Prospectus (as defined in Section
5.6(a) hereof), as of the date of the mailing of the Proxy Statement/Prospectus,
and up
23
to and including the date of the meeting of stockholders of Ramapo to which such
Proxy Statement/Prospectus relates, will not contain any untrue statement of a
material fact 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.
4.8. CAPITAL ADEQUACY. As of the date of this Agreement Valley has, and at the
Effective Time, after taking into effect the Merger and the transactions
contemplated hereunder, Valley will have, sufficient capital to satisfy all
applicable regulatory capital requirements.
4.9. VALLEY COMMON STOCK. At the Effective Time, the Valley Common Stock to be
issued pursuant to the terms of Section 2.1, when so issued, shall be duly
authorized, validly issued, fully paid, and nonassessable, free of preemptive
rights and free and clear of all liens, encumbrances or restrictions created by
or through Valley, with no personal liability attaching to the ownership
thereof.
4.10. LEGAL PROCEEDINGS. Except as disclosed in the Valley Disclosure Schedule,
neither Valley nor its Subsidiaries is a party to any, and there are no pending
or, to Valley's knowledge, threatened, legal, administrative, arbitral or other
proceedings, claims, actions or governmental investigations of any nature
against Valley or any of its Subsidiaries which, if decided adversely to Valley,
or any of its Subsidiaries, would have a material adverse effect on the
business, operations, assets or financial condition of Valley and its
Subsidiaries on a consolidated basis. Except as disclosed in the Valley
Disclosure Schedule, neither Valley nor any of Valley's Subsidiaries is a party
to any order, judgment or decree entered against Valley or any such Subsidiary
in any lawsuit or proceeding which would have a material adverse effect on the
business, operations, assets or financial condition of Valley and its
Subsidiaries on a consolidated basis.
4.11. TAXES AND TAX RETURNS. To the knowledge of Valley, Valley and its
Subsidiaries have duly filed (and until the Effective Time will so file) all
Returns required to be filed by them in respect of any federal, state and local
taxes (including withholding taxes, penalties or other payments required) and
have duly paid (and until the Effective Time will so pay) all such taxes due and
payable, other than taxes or other charges which are being contested in good
faith. Valley and its Subsidiaries have established (and until the Effective
Time will establish) on their books and records reserves for the payment of all
federal, state and local taxes not yet due and payable, but incurred in respect
of Valley and its Subsidiaries through such date, which reserves are, to the
knowledge of Valley, adequate for such purposes. No deficiencies exist or have
been asserted based upon the federal income tax returns of Valley and VNB.
24
4.12. EMPLOYEE BENEFIT PLANS.
(a) Valley and its Subsidiaries maintain or contribute to certain "employee
pension benefit plans" (the "Valley Pension Plans"), as such term is defined in
Section 3 of ERISA, and "employee welfare benefit plans" (the "Valley Welfare
Plans"), as such term is defined in Section 3 of ERISA. Since September 2, 1974,
neither Valley nor its Subsidiaries have contributed to any "Multiemployer
Plan", as such term is defined in Section 3(37) of ERISA.
(b) Except as set forth in Valley Disclosure Schedule, to the knowledge of
Valley, each of the Valley Pension Plans and each of the Valley Welfare Plans
has been operated in compliance in all material respects with the provisions of
ERISA, the Code, all regulations, rulings and announcements promulgated or
issued thereunder, and all other applicable governmental laws and regulations.
(c) To the knowledge of Valley, no "accumulated funding deficiency" within the
meaning of Section 412 of the Code has been incurred with respect to any of the
Valley Pension Plans.
(d) Except with respect to customary health, life and disability benefits or as
disclosed on the Valley Disclosure Schedule, there are no unfunded benefit
obligations which are not accounted for by reserves shown on the financial
statements of Valley and established under GAAP or otherwise noted on such
financial statements.
4.13. REPORTS.
(a) Each communication mailed by Valley to its stockholders since January 1,
1996, and each annual, quarterly or special report, proxy statement or
communication, as of its date, complied in all material respects with all
applicable statutes, rules and regulations enforced or promulgated by the
applicable regulatory agency and did not contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary in order to make the statements made therein, in light of the
circumstances under which they were made, not misleading; provided that
disclosures as of a later date shall be deemed to modify disclosures as of an
earlier date.
(b) Valley and VNB have, since January 1, 1996, duly filed with the OCC and,
where applicable, the FDIC, and the FRB in correct form in all material respects
the monthly, quarterly and annual reports required to be filed under applicable
laws and regulations, and Valley, upon written request from Ramapo, promptly
will deliver or make available to Ramapo accurate and complete copies of such
reports. The Valley Disclosure Schedule lists the dates of all examinations of
Valley or VNB conducted by either the OCC, the FRB or the FDIC since January 1,
1996.
25
4.14. COMPLIANCE WITH APPLICABLE LAW. Valley and its Subsidiaries hold all
material licenses, franchises, permits and authorizations necessary for the
lawful conduct of their respective businesses under and pursuant to each, and
has complied with and is not in default in any respect under any, applicable
law, statute, order, rule, regulation, policy and/or guideline of any federal,
state or local governmental authority relating to Valley and its Subsidiaries
(other than where such default or non-compliance will not result in a material
adverse effect on the business, operations, assets or financial condition of
Valley and its Subsidiaries on a consolidated basis) and Valley has not received
notice of violations of, and does not know of any violations of, any of the
above. Without limiting the foregoing, to its knowledge VNB has complied in all
material respects with the CRA and Valley has no reason to believe that any
person or group would object to the consummation of the Merger due to the CRA
performance or rating of VNB. To the knowledge of Valley, except as listed on
the Valley Disclosure Schedule, no person or group has adversely commented upon
VNB's CRA performance.
4.15. PROPERTIES AND INSURANCE.
(a) Valley and its Subsidiaries have good and, as to owned real property,
marketable title to all material assets and properties, whether real or
personal, tangible or intangible, reflected in Valley's consolidated balance
sheet as of September 30, 1998, or owned and acquired subsequent thereto (except
to the extent that such assets and properties have been disposed of for fair
value in the ordinary course of business since September 30, 1998), subject to
no encumbrances, liens, mortgages, security interests or pledges, except (i)
those items that secure liabilities that are reflected in such balance sheet or
the notes thereto or incurred in the ordinary course of business after the date
of such balance sheet, (ii) statutory liens for amounts not yet delinquent or
which are being contested in good faith, (iii) such encumbrances, liens,
mortgages, security interests, pledges and title imperfections that are not in
the aggregate material to the business, operations, assets, and financial
condition of Valley and its subsidiaries taken as a whole and (iv) with respect
to owned real property, title imperfections noted in title reports delivered to
Ramapo prior to the date hereof. Valley and its Subsidiaries as lessees have the
right under valid and subsisting leases to occupy, use, possess and control all
property leased by them in all material respects as presently occupied, used,
possessed and controlled by them.
(b) The business operations and all insurable properties and assets of Valley
and its Subsidiaries are insured for their benefit against all risks which, in
the reasonable judgment of the management of Valley should be insured against,
in each case under valid, binding and enforceable policies or bonds, with such
deductibles and against such risks and losses as are in the opinion of the
management of Valley adequate for the business
26
engaged in by Valley and its Subsidiaries. As of the date hereof, neither Valley
nor any of its Subsidiaries has received any notice of cancellation or notice of
a material amendment of any such insurance policy or bond or is in default under
such policy or bond, no coverage thereunder is being disputed and all material
claims thereunder have been filed in a timely fashion.
4.16. MINUTE BOOKS. The minute books of Valley and its Subsidiaries contain
records that are accurate in all material respects of all meetings and other
corporate action held of their respective stockholders and Boards of Directors
(including committees of their respective Boards of Directors).
4.17. ENVIRONMENTAL MATTERS. Except as disclosed in the Valley Disclosure
Schedule, neither Valley nor any of its Subsidiaries has received any written
notice, citation, claim, assessment, proposed assessment or demand for abatement
alleging that Valley or any of its Subsidiaries (either directly or as a
successor-in-interest in connection with the enforcement of remedies to realize
the value of properties serving as collateral for outstanding loans) is
responsible for the correction or clean-up of any condition material to the
business, operations, assets or financial condition of Valley or its
Subsidiaries. Except as disclosed in the Valley Disclosure Schedule, Valley has
no knowledge that any toxic or hazardous substances or materials have been
emitted, generated, disposed of or stored on any property owned or leased by
Valley or any of its Subsidiaries in any manner that violates or, after the
lapse of time may violate, any presently existing federal, state or local law or
regulation governing or pertaining to such substances and materials, the
violation of which would have a material adverse effect on the business,
operations, assets or financial condition of Valley and its Subsidiaries on a
consolidated basis.
4.18. RESERVES. As of the date hereof, the reserve for loan and lease losses in
the Valley Financial Statements is, to Valley's knowledge, adequate based upon
past loan loss experiences and potential losses in the current portfolio to
cover all known or anticipated loan losses.
4.19. YEAR 2000 COMPLIANCE. Valley and the Valley Subsidiaries have taken all
reasonable steps necessary to address the software, accounting and record
keeping issues raised in order for the data processing systems used in the
business conducted by Valley and the Valley Subsidiaries to be substantially
Year 2000 compliant on or before the end of 1999 and Valley does not expect the
future cost of addressing such issues to be material. Neither Valley nor any
Valley Subsidiary has received a rating of less than satisfactory from any bank
regulatory agency with respect to Year 2000 compliance.
4.20. AGREEMENTS WITH BANK REGULATORS. Neither VNB nor any Valley Subsidiary
is a party to any agreement or memorandum of understanding with, or a party
to any commitment letter, board
27
resolution submitted to a regulatory authority or similar undertaking to, or is
subject to any order or directive by, or is a recipient of any extraordinary
supervisory letter from, any Governmental Entity which restricts materially the
conduct of its business, or in any manner relates to its capital adequacy, its
credit or reserve policies or its management, nor has Valley been advised by any
Governmental Entity that it is contemplating issuing or requesting (or is
considering the appropriateness of issuing or requesting) any such order,
decree, agreement, memorandum of understanding, extraordinary supervisory
letter, commitment letter or similar submission, except as disclosed in writing
to Ramapo by Valley prior to the date of this Agreement. Neither VNB nor any
Valley Subsidiary is required by Section 32 of the Federal Deposit Insurance Act
to give prior notice to a Federal banking agency of the proposed addition of an
individual to its board of directors or the employment of an individual as a
senior executive officer, except as disclosed in writing to Ramapo by Valley
prior to the date of this Agreement.
4.21. DISCLOSURES. No representation or warranty contained in Article IV of this
Agreement contains any untrue statement of a material fact or omits to state a
material fact necessary to make the statements herein not misleading.
ARTICLE V
COVENANTS OF THE PARTIES
5.1. CONDUCT OF THE BUSINESS OF RAMAPO. During the period from the date of this
Agreement to the Effective Time, Ramapo shall, and shall cause each of its
Subsidiaries to, conduct its respective business and engage in transactions
permitted hereunder only in the ordinary course and consistent with prudent
banking practice, except with the prior written consent of Valley, which consent
will not be unreasonably withheld. Ramapo also shall use its best efforts to (i)
preserve its business organization and that of each Ramapo Subsidiary intact,
(ii) keep available to itself the present services of its employees and those of
its Subsidiaries, provided that neither Ramapo nor any of its Subsidiaries shall
be required to take any unreasonable or extraordinary act or any action which
would conflict with any other term of this Agreement, and (iii) preserve for
itself and Valley the goodwill of its customers and those of its Subsidiaries
and others with whom business relationships exist.
5.2. NEGATIVE COVENANTS AND DIVIDEND COVENANTS.
(a) Ramapo agrees that from the date hereof to the Effective Time, except as
otherwise approved by Valley in writing or as permitted or required by this
Agreement, it will not, nor will it permit any of its Subsidiaries to:
(i) change any provision of its Certificate of Incorporation or
Bylaws or any similar governing documents;
28
(ii) except for the issuance of Ramapo Common Stock pursuant to the present
terms of the outstanding Ramapo Options and the Valley Stock Option and as
disclosed in the Ramapo Disclosure Schedule, change the number of shares of its
authorized or issued common or No Par Stock or issue or grant any option,
warrant, call, commitment, subscription, right to purchase or agreement of any
character relating to the authorized or issued capital stock of Ramapo or any
Ramapo Subsidiary or any securities convertible into shares of such stock, or
split, combine or reclassify any shares of its capital stock, or redeem or
otherwise acquire any shares of such capital stock, or declare, set aside or pay
any dividend, or other distribution (whether in cash, stock or property or any
combination thereof) in respect of its capital stock, other than its regular
quarterly dividend of $0.04;
(iii) grant any severance or termination pay (other than pursuant to policies of
Ramapo in effect on the date hereof and disclosed in the Ramapo Disclosure
Schedule or as agreed to by Valley in writing) to, or enter into or amend any
employment agreement with, any of its directors, officers or employees, adopt
any new employee benefit plan or arrangement of any type or amend any such
existing benefit plan or arrangement; or award any increase in compensation or
benefits to its directors, officers or employees;
(iv) sell or dispose of any substantial amount of assets or incur any
significant liabilities other than in the ordinary course of business consistent
with past practices and policies;
(v) make any capital expenditures in excess of $100,000 other than pursuant to
binding commitments existing on the date hereof and expenditures necessary to
maintain existing assets in good repair and expenditures described in business
plans or budgets previously furnished to Valley;
(vi) file any applications or make any contract with respect to branching or
site location or relocation;
(vii) agree to acquire in any manner whatsoever (other than to foreclose on
collateral for a defaulted loan) any business or entity;
(viii) make any material change in its accounting methods or practices, other
than changes required in accordance with GAAP;
(ix) take any action that would result in any of the representations and
warranties contained in Article III of this Agreement not being true and correct
in any material respect at the Effective Time; or
(x) agree to do any of the foregoing.
(b) Valley agrees that from the date hereof to the Effective Time, except as
otherwise approved by Ramapo in writing or as
29
permitted or required by this Agreement, it will not, nor will it
permit any of its Subsidiaries to:
(i) take any action that is intended or may reasonably be expected to result in
any of its representations and warranties set forth in this Agreement being or
becoming untrue in any material respect;
(ii) take or cause to be taken any action which would disqualify the Merger as a
tax free reorganization under Section 368 of the Code;
(iii) consolidate with or merge with any other person or entity in which Valley
is not the surviving entity, or convey, transfer or lease its properties and
assets substantially as an entirety to any person or entity unless such person
or entity shall expressly assume the obligations of Valley under this Agreement;
or
(iv) authorize or enter into any agreement or commitment to do any of the
foregoing.
5.3. NO SOLICITATION. So long as this Agreement remains in effect, Ramapo and
the Bank shall not, directly or indirectly, encourage or solicit or hold
discussions or negotiations with, or provide any information to, any person,
entity or group (other than Valley) concerning any merger or sale of shares of
capital stock or sale of substantial assets or liabilities not in the ordinary
course of business, or similar transactions involving Ramapo or the Bank (an
"Acquisition Transaction"). Notwithstanding the foregoing, Ramapo may enter into
discussions or negotiations or provide information in connection with an
unsolicited possible Acquisition Transaction if the Board of Directors of
Ramapo, after consulting with counsel, determines in the exercise of its
fiduciary responsibilities that such discussions or negotiations should be
commenced or such information should be furnished. Ramapo shall promptly
communicate to Valley the terms of any proposal, whether written or oral, which
it may receive in respect of any such Acquisition Transaction and the fact that
it is having discussions or negotiations with a third party about an Acquisition
Transaction.
5.4. CURRENT INFORMATION. During the period from the date of this Agreement to
the Effective Time, Ramapo will cause one or more of its designated
representatives to confer on a monthly or more frequent basis with
representatives of Valley regarding Ramapo's business, operations, properties,
assets and financial condition and matters relating to the completion of the
transactions contemplated herein. Without limiting the foregoing, Ramapo will
send to Valley a monthly list of each new loan or extension of credit, and each
renewal of an existing loan or extension of credit, in excess of $100,000, made
during such month, and provide Valley with a copy of the loan offering for any
such loan, extension of credit, or renewal upon request. As
30
soon as reasonably available, but in no event more than 45 days after the end of
each fiscal quarter (other than the last fiscal quarter of each fiscal year)
ending after the date of this Agreement, Ramapo will deliver to Valley the
Bank's call reports filed with the Department and FDIC and Ramapo's quarterly
reports on Form 10-Q as filed with the SEC under the 1934 Act, and Valley will
deliver to Ramapo Valley's quarterly reports on Form 10-Q, as filed with the SEC
under the 1934 Act, and VNB's call reports filed with the OCC and the FDIC. As
soon as reasonably available, but in no event more than 90 days after the end of
each fiscal year, Ramapo will deliver to Valley and Valley will deliver to
Ramapo their respective audited Annual Reports, in each case as filed on Form
10-K with the SEC under the 1934 Act.
5.5. ACCESS TO PROPERTIES AND RECORDS; CONFIDENTIALITY.
(a) Ramapo and the Bank shall permit Valley and its representatives, and Valley
and VNB shall permit Ramapo and its representatives, accompanied by an officer
of the respective party, reasonable access to their respective properties, and
shall disclose and make available to Valley and its representatives or Ramapo
and its representatives as the case may be, all books, papers and records
relating to their respective assets, stock ownership, properties, operations,
obligations and liabilities, including, but not limited to, all books of account
(including the general ledger), tax records, minute books of directors' and
stockholders' meetings, organizational documents, bylaws, material contracts and
agreements, filings with any regulatory authority, independent auditors' work
papers (subject to the receipt by such auditors of a standard access
representation letter), litigation files, plans affecting employees, and any
other business activities or prospects in which Valley and its representatives
or Ramapo and its representatives may have a reasonable interest. Neither party
shall be required to provide access to or to disclose information where such
access or disclosure would violate or prejudice the rights of any customer or
would contravene any law, rule, regulation, order or judgment. The parties will
use their best efforts to obtain waivers of any such restriction and in any
event make appropriate substitute disclosure arrangements under circumstances in
which the restrictions of the preceding sentence apply. Ramapo acknowledges that
Valley may be involved in discussions concerning other potential acquisitions
and Valley shall not be obligated to disclose such information to Ramapo except
as such information is publicly disclosed by Valley.
(b) All information furnished by the parties hereto previously in connection
with transactions contemplated by this Agreement or pursuant hereto shall be
used solely for the purpose of evaluating the Merger contemplated hereby and
shall be treated as the sole property of the party delivering the information
until consummation of the Merger contemplated hereby and, if such Merger shall
not occur, each party and each party's advisors shall return to the other party
all documents or other materials
31
containing, reflecting or referring to such information, will not retain any
copies of such information, shall use its best efforts to keep confidential all
such information, and shall not directly or indirectly use such information for
any competitive or other commercial purposes. In the event that the Merger
contemplated hereby is abandoned, all documents, notes and other writings
prepared by a party hereto or its advisors based on information furnished by the
other party shall be promptly destroyed. The obligation to keep such information
confidential shall continue for five years from the date the proposed Merger is
abandoned but shall not apply to (i) any information which (A) the party
receiving the information can establish by convincing evidence was already in
its possession prior to the disclosure thereof to it by the other party; (B) was
then generally known to the public; (C) became known to the public through no
fault of the party receiving such information; or (D) was disclosed to the party
receiving such information by a third party not bound by an obligation of
confidentiality; or (ii) disclosures pursuant to a legal requirement or in
accordance with an order of a court of competent jurisdiction.
(c) Without limiting the rights provided under Section 5.5(a), each of Valley
and Ramapo shall have the right to conduct a full and complete acquisition audit
and to perform such due diligence as it deems appropriate, using its own
officers and employees or third parties, for purposes of determining whether
there is a material breach of any representation or warranty hereunder or a
material adverse change in the business or financial condition of the other
party. Such acquisition audit or due diligence shall not be limited or
restricted by virtue of any audit or due diligence performed before the date
hereof or for any other reason, but shall not unduly interfere with the business
of the other party.
(d) Without limiting the foregoing, Valley and VNB, directly or through agents,
for a period of 30 calendar days (the "Due Diligence Period") following the date
of this Agreement, shall have the right to perform due diligence on Ramapo and
the Bank and a complete acquisition audit of Ramapo and the Bank.
5.6. REGULATORY MATTERS.
(a) For the purposes of holding the meeting of Ramapo stockholders referred to
in Section 5.7 hereof and registering or otherwise qualifying under applicable
federal and state securities laws Valley Common Stock to be issued to Record
Holders and Optionees in connection with the Merger, the parties hereto shall
cooperate in the preparation and filing by Valley of a Registration Statement
with the SEC which shall include an appropriate proxy statement and prospectus
satisfying all applicable requirements of applicable state and federal laws,
including the 1993 Act, the 1934 Act and applicable state securities laws and
the rules and regulations thereunder. (Such proxy statement and prospectus in
the form mailed by Ramapo to
32
the Ramapo stockholders and Optionees together with any and all amendments or
supplements thereto, is herein referred to as the "Proxy Statement/Prospectus"
and the various documents to be filed by Valley under the 1933 Act with the SEC
to register for sale the Valley Common Stock to be issued to Record Holders and
Optionees, including the Proxy Statement/Prospectus, are referred to herein as
the "Registration Statement").
(b) Valley shall furnish information concerning Valley and VNB as is necessary
in order to cause the Proxy Statement/Prospectus, insofar as it relates to
Valley and VNB, to comply with Section 5.6(a) hereof. Valley agrees promptly to
advise Ramapo if at any time prior to the Ramapo stockholder meeting referred to
in Section 5.7 hereof, any information provided by Valley in the Proxy
Statement/Prospectus becomes incorrect or incomplete in any material respect and
to provide Ramapo with the information needed to correct such inaccuracy or
omission. Valley shall furnish Ramapo with such supplemental information as may
be necessary in order to cause the Proxy Statement/Prospectus, insofar as it
relates to Valley and VNB, to comply with Section 5.6(a) after the mailing
thereof to Ramapo stockholders.
(c) Ramapo shall furnish Valley with such information concerning Ramapo and the
Bank as is necessary in order to cause the Proxy Statement/Prospectus, insofar
as it relates to Ramapo and the Bank, to comply with Section 5.6(a) hereof.
Ramapo agrees promptly to advise Valley if, at any time prior to the Ramapo
stockholders' meeting referred to in Section 5.6(a) hereof, information provided
by Ramapo in the Proxy Statement/Prospectus becomes incorrect or incomplete in
any material respect and to provide Valley with the information needed to
correct such inaccuracy or omission. Ramapo shall furnish Valley with such
supplemental information as may be necessary in order to cause the Proxy
Statement/Prospectus, insofar as it relates to Ramapo and the Bank, to comply
with Section 5.6(a) after the mailing thereof to Ramapo stockholders.
(d) Valley shall as promptly as practicable, at its sole expense, make such
filings as are necessary in connection with the offering of the Valley Common
Stock with applicable state securities agencies and shall use all reasonable
efforts to qualify the offering of the Valley Common Stock under applicable
state securities laws at the earliest practicable date. Ramapo shall promptly
furnish Valley with such information regarding the Ramapo stockholders as Valley
requires to enable it to determine what filings are required hereunder. Ramapo
authorizes Valley to utilize in such filings the information concerning Ramapo
and the Bank provided to Valley in connection with, or contained in, the Proxy
Statement/Prospectus. Valley shall furnish Ramapo with copies of all such
filings and keep Ramapo advised of the status thereof. Valley and Ramapo shall
as promptly as practicable file the Registration Statement containing the Proxy
Statement/Prospectus with the SEC, and each of Valley and Ramapo shall promptly
notify the other of all communications, oral or
33
written, with the SEC concerning the Registration Statement and the Proxy
Statement/Prospectus.
(e) Valley shall cause the Valley Common Stock to be issued in connection with
the Merger to be listed on the New York Stock Exchange.
(f) The parties hereto will cooperate with each other and use their best efforts
to prepare all necessary documentation, to effect all necessary filings and to
obtain all necessary permits, consents, waivers, approvals and authorizations of
all third parties and governmental bodies necessary to consummate the
transactions contemplated by this Agreement as soon as possible, including,
without limitation, those required by the OCC, the Department, the FDIC and the
FRB. The parties shall each have the right to review in advance (and shall do so
promptly) all information relating to the other, as the case may be, and any of
their respective subsidiaries, which appears in any filing made with, or written
material submitted to, any third party or governmental body in connection with
the transactions contemplated by this Agreement. The parties hereto shall use
reasonable business efforts to file for approval or waiver by the appropriate
bank regulatory agencies within 60 days of the date hereof.
(g) Each of the parties will promptly furnish each other with copies of written
communications received by them or any of their respective subsidiaries from, or
delivered by any of the foregoing to, any governmental body in respect of the
transactions contemplated hereby.
(h) Ramapo acknowledges that Valley is in or may be in the process of acquiring
other banks and financial institutions and that in connection with such
acquisitions, information concerning Ramapo may be required to be included in
the registration statements, if any, for the sale of securities of Valley or in
SEC reports in connection with such acquisitions. Ramapo agrees to provide
Valley with any information, certificates, documents or other materials about
Ramapo as are reasonably necessary to be included in such other SEC reports or
registration statements, including registration statements which may be filed by
Valley prior to the Effective Time. Ramapo shall use its reasonable efforts to
cause its attorneys and accountants to provide Valley and any underwriters for
Valley with any consents, comfort letters, opinion letters, reports or
information which are necessary to complete the registration statements and
applications for any such acquisition or issuance of securities. Valley shall
reimburse Ramapo for reasonable expenses thus incurred by Ramapo should this
transaction be terminated for any reason. Valley shall not file with the SEC any
registration statement or amendment thereto or supplement thereof containing
information regarding Ramapo unless Ramapo shall have consented in writing to
such filing, which consent shall not be unreasonably delayed or withheld.
34
(i) Between the date of this Agreement and the Effective Time, Ramapo shall
cooperate with Valley to reasonably conform Ramapo's policies and procedures
regarding applicable regulatory matters, to those of Valley as Valley may
reasonably identify to Ramapo from time to time.
5.7. APPROVAL OF STOCKHOLDERS. Ramapo will (a) take all steps necessary duly to
call, give notice of, convene and hold a meeting of the stockholders of Ramapo
as soon as reasonably practicable for the purpose of securing the approval by
such stockholders of this Agreement, (b) recommend to the stockholders of Ramapo
the approval of this Agreement and the transactions contemplated hereby and use
its best efforts to obtain, as promptly as practicable, such approvals, and (c)
cooperate and consult with Valley with respect to each of the foregoing matters.
In connection therewith, Ramapo will use reasonable efforts to cause each
director of Ramapo to (i) agree to vote in favor of the Merger, and (ii) take
such action as is necessary or is reasonably required by Valley to consummate
the Merger.
5.8. FURTHER ASSURANCES. Subject to the terms and conditions herein provided,
each of the parties hereto agrees to use its best efforts to take, or cause to
be taken, all actions and to do, or cause to be done, all things necessary,
proper or advisable under applicable laws and regulations to satisfy the
conditions to Closing and to consummate and make effective the transactions
contemplated by this Agreement, including, without limitation, using reasonable
efforts to lift or rescind any injunction or restraining order or other order
adversely affecting the ability of the parties to consummate the transactions
contemplated by this Agreement and using its best efforts to prevent the breach
of any representation, warranty, covenant or agreement of such party contained
or referred to in this Agreement and to promptly remedy the same. Valley will
take the necessary actions to cure appropriate tainted treasury shares so that
the Merger meets the treasury stock condition for pooling-of-interests
accounting. Nothing in this section shall be construed to require any party to
participate in any threatened or actual legal, administrative or other
proceedings (other than proceedings, actions or investigations to which it is
otherwise a party or subject or threatened to be made a party or subject) in
connection with consummation of the transactions contemplated by this Agreement
unless such party shall consent in advance and in writing to such participation
and the other party agrees to reimburse and indemnify such party for and against
any and all costs and damages related thereto.
5.9. PUBLIC ANNOUNCEMENTS. The parties hereto shall cooperate with each other in
the development and distribution of all news releases and other public
disclosures with respect to this Agreement or any of the transactions
contemplated hereby, except as may be otherwise required by law or regulation or
as to which the party releasing such information has used its best efforts to
discuss with the other party in advance.
35
5.10. FAILURE TO FULFILL CONDITIONS. In the event that Valley or Ramapo
determines that a material condition to its obligation to consummate the
transactions contemplated hereby cannot be fulfilled on or prior to September
30, 1999 (the "Cutoff Date") and that it will not waive that condition, it will
promptly notify the other party. Except for any acquisition or merger
discussions Valley may enter into with other parties, Ramapo and Valley will
promptly inform the other of any facts applicable to Ramapo or Valley,
respectively, or their respective directors or officers, that would be likely to
prevent or materially delay approval of the Merger by any governmental authority
or which would otherwise prevent or materially delay completion of the Merger.
5.11. DISCLOSURE SUPPLEMENTS.
(a) Ramapo has delivered to Valley as of the date hereof certain items which
presently constitute the Ramapo Disclosure Schedule. Ramapo shall have the right
to provide supplements, additions and corrections to the Ramapo Disclosure
Schedule for a period of 15 calendar days after the date hereof and such
supplements and additions or corrections provided within that 15-day period
shall be deemed to have been provided on the date hereof and to qualify the
representations and warranties of Ramapo as of such date. However, during the
Due Diligence Period, Valley shall have the right, as hereafter provided, to
exercise its termination right based upon the supplements, additions and
corrections so provided.
(b) In addition to Ramapo's rights during the first 15-day period under Section
5.11(a) above, from time to time prior to the Effective Time, each party hereto
will promptly supplement or amend (by written notice to the other) its
respective Disclosure Schedules delivered pursuant hereto with respect to any
matter hereafter arising which, if existing, occurring or known at the date of
this Agreement, would have been required to be set forth or described in such
Schedules or which is necessary to correct any information in such Schedules
which has been rendered materially inaccurate thereby. For the purpose of
determining satisfaction of the conditions set forth in Article VI, no
supplement or amendment to such Schedules shall correct or cure any warranty
which was untrue when made, but supplements or amendments may be used to
disclose subsequent facts or events to maintain the truthfulness of any
warranty.
5.12 TRANSACTION EXPENSES OF RAMAPO.
(a) For planning purposes, Ramapo shall, within 30 days from the date hereof,
provide Valley with its estimated budget of transaction-related expenses
reasonably anticipated to be payable by Ramapo in connection with this
transaction based on facts and circumstances currently known, including the fees
and expenses of counsel, accountants, investment bankers and other
professionals. Ramapo shall promptly notify Valley if or when it determines that
36
it will expect to exceed its budget. Ramapo has previously disclosed to Valley
the method by which the fees of its investment bankers and counsel in connection
with this transaction are to be determined, and has disclosed to Valley the fees
of its counsel in connection with this transaction through a recent date.
(b) Promptly, but in any event within 30 days, after the execution of this
Agreement, Ramapo shall ask all of its attorneys and other professionals to
render current and correct invoices for all unbilled time and disbursements.
Ramapo shall accrue and/or pay all of such amounts as soon as possible.
(c) Ramapo shall cause its professionals to render monthly invoices within 30
days after the end of each month. Ramapo shall notify Valley monthly of all
out-of-pocket expenses which Ramapo has incurred in connection with this
transaction.
(d) Valley, in reasonable consultation with Ramapo, shall make all arrangements
with respect to the printing and mailing of the Proxy Statement/Prospectus.
5.13. CLOSING. The parties hereto shall cooperate and use reasonable efforts
to try to cause the Effective Time to occur on or before June 1, 1999.
5.14. INDEMNIFICATION. After the Effective Time, to the extent permitted by
applicable law and/or the Certificate of Incorporation or Articles of
Association, Valley agrees that it will, or will cause VNB to, provide to the
directors and officers of Ramapo and the Bank indemnification with respect to
acts or omissions occurring prior to the Effective Time, including without
limitation, the authorization of this Agreement and the transactions
contemplated hereby, for a period of six years from the Effective Time, or in
the case of matters occurring prior to the Effective Time which have not been
resolved prior to the sixth anniversary of the Effective Time, until such
matters are finally resolved. To the extent permitted by applicable law and/or
the Certificate of Incorporation or Articles of Association, Valley or VNB (as
applicable) shall advance expenses in connection with the foregoing
indemnification.
5.15. EMPLOYMENT MATTERS.
(a) Following consummation of the Merger, Valley will honor the existing written
employment and severance contracts with officers and employees of Ramapo and the
Bank that exist on the date hereof and are included in the Ramapo Disclosure
Schedule. Ramapo shall use its best efforts to cause its officers to enter into
the arrangements contemplated in Section 5.15 of the Valley Disclosure Schedule.
(b) Following the consummation of the Merger and for one year thereafter, VNB
shall, to the extent not duplicative of other
37
severance benefits, honor the Bank's severance policy as specified in Section
5.15(b) of the Ramapo Disclosure Schedule to pay one week of severance for each
year of service completed while employed by Ramapo and/or the Bank, with a
maximum benefit of 26 weeks and a minimum of four (4) weeks.
(c) Valley intends, to the extent practical, to continue the employment of all
officers and employees of the Bank, at or near the same location, with the same
or equivalent salary and benefits. Valley intends, to the extent practical, to
have all Ramapo employees participate in the benefits and opportunities
available to all Valley employees.
5.16. POOLING AND TAX-FREE REORGANIZATION TREATMENT. Ramapo shall not
intentionally take, fail to take or cause to be taken, any action within its
control, whether before or after the Effective Time, which would disqualify the
Merger as a "pooling of interests" for accounting purposes or as a
"reorganization" within the meaning of Section 368(a) of the Code.
5.17. RAMAPO OPTION PLAN. From and after the Effective Time, each Ramapo Option
which is converted to an option to purchase Valley Common Stock under Section
2.1(b) shall be administered, operated and interpreted by a committee comprised
of members of the Board of Directors of Valley appointed by the Board of
Directors of Valley. Valley shall reserve for issuance the number of shares of
Valley Common Stock necessary to satisfy Valley's obligations. Valley shall also
register, if not previously registered pursuant to the 1933 Act, the shares
authorized for issuance under the Ramapo Options so converted.
5.18. AFFILIATES.
(a) Promptly, but in any event within 30 days, after the execution and delivery
of this Agreement, (i) Ramapo shall deliver to Valley (x) a letter identifying
all persons who, to the knowledge of Ramapo, may be deemed to be affiliates of
Ramapo under Rule 145 of the 1933 Act, including without limitation all
directors and executive officers of Ramapo and (y) a letter identifying all
persons who, to the knowledge of Ramapo, may be deemed to be affiliates of
Ramapo as that term (affiliate) is used for purposes of qualifying for
pooling-of-interests accounting treatment; and (ii) Valley shall identify to
Ramapo all persons who, to the knowledge of Valley, may be deemed affiliates of
Valley as that term (affiliates) is used for purposes of qualifying for
pooling-of-interests accounting treatment.
(b) Ramapo shall cause each director of Ramapo to, and Ramapo shall use its best
efforts to cause each executive officer of Ramapo and each other person who may
be deemed an affiliate of Ramapo (under either Rule 145 of the 1933 Act or the
accounting treatment rules) to, execute and deliver to Valley within 30 days
after the execution and delivery of this Agreement, a letter
38
substantially in the form of Exhibit 5.18 hereto agreeing to be bound by the
restrictions of Rule 145 and agreeing to be bound by the rules which permit the
Merger to be treated as a pooling of interests for accounting purposes. In
addition, Valley shall cause each director and executive officer of Valley to,
and Valley shall use its best efforts to cause each other person who may be
deemed an affiliate of Valley (as that term is used for purposes of qualifying
for pooling of interests) to, execute and deliver to Valley within 30 days after
the execution and delivery of this Agreement, a letter substantially in the form
of Exhibit 5.18.1 hereto in which such persons agree to be bound by the rules
which permit the Merger to be treated as a pooling of interests for accounting
treatment.
5.19. COMPLIANCE WITH THE INDUSTRIAL SITE RECOVERY ACT. Ramapo, at its sole cost
and expense, shall use its best efforts to obtain prior to the Effective Time,
with respect to each facility located in New Jersey owned or operated by Ramapo
or any Ramapo Subsidiary (each, a "Facility"), either: (a) a Letter of
Non-Applicability ("LNA") from the New Jersey Department of Environmental
Protection ("NJDEP") stating that the Facility is not an "industrial
establishment," as such term is defined under the Industrial Site Recovery Act
("ISRA"); (b) a Remediation Agreement issued by the NJDEP pursuant to ISRA
authorizing the consummation of the transactions contemplated by this Agreement;
(c) a Negative Declaration approval, Remedial Action Workplan approval, No
Further Action letter or other document or documents issued by the NJDEP
advising that the requirements of ISRA have been satisfied with respect to the
Facility; or (d) an opinion addressed to Valley from New Jersey legal counsel
reasonably acceptable to Valley to the effect that ISRA has been complied with,
or is inapplicable, with respect to the Facility. In the event Ramapo obtains a
Remediation Agreement, Ramapo will post or have posted an appropriate
Remediation Funding Source or will have obtained the NJDEP's approval to
self-guaranty any Remediation Funding Source required under any such Remediation
Agreement.
5.20. NEW VALLEY DIRECTOR. As of the Effective Time, Valley shall cause its
Board of Directors and the VNB Board of Directors to take action to appoint
Xxxxxxx X. Xxxxxx to the Boards of Directors of Valley and VNB, respectively, at
the Effective Time.
ARTICLE VI
CLOSING CONDITIONS
6.1. CONDITIONS OF EACH PARTY'S OBLIGATIONS UNDER THIS AGREEMENT. The respective
obligations of each party under this Agreement to consummate the Merger shall be
subject to the satisfaction, or, where permissible under applicable law, waiver
at or prior to the Effective Time of the following conditions:
39
(a) Approval of Ramapo Stockholders; SEC Registration. This Agreement and the
transactions contemplated hereby shall have been approved by the requisite vote
of the stockholders of Ramapo. The Registration Statement shall have been
declared effective by the SEC and shall not be subject to a stop order or any
threatened stop order, and the issuance of the Valley Common Stock shall have
been qualified in every state where such qualification is required under the
applicable state securities laws. The Valley Common Stock to be issued in
connection with the Merger, including Valley Common Stock to be issued for the
Ramapo Options, shall have been approved for listing on the New York Stock
Exchange.
(b) Regulatory Filings. All necessary regulatory or governmental approvals and
consents (including without limitation any required approval of the OCC and any
approval or waiver required by the FRB) required to consummate the transactions
contemplated hereby shall have been obtained without any term or condition which
would materially impair the value of Ramapo and the Bank, taken as a whole, to
Valley. All conditions required to be satisfied prior to the Effective Time by
the terms of such approvals and consents shall have been satisfied; and all
statutory waiting periods in respect thereof shall have expired.
(c) Suits and Proceedings. No order, judgment or decree shall be outstanding
against a party hereto or a third party that would have the effect of preventing
completion of the Merger; no suit, action or other proceeding shall be pending
or threatened by any governmental body in which it is sought to restrain or
prohibit the Merger or the Bank Merger; and no suit, action or other proceeding
shall be pending before any court or governmental agency in which it is sought
to restrain or prohibit the Merger or the Bank Merger or obtain other
substantial monetary or other relief against one or more parties hereto in
connection with this Agreement and which Valley or Ramapo determines in good
faith, based upon the advice of their respective counsel, makes it inadvisable
to proceed with the Merger because any such suit, action or proceeding has a
significant potential to be resolved in such a way as to deprive the party
electing not to proceed of any of the material benefits to it of the Merger or
the Bank Merger.
(d) Tax Free Exchange. Valley and Ramapo shall have received an opinion,
satisfactory to Valley and Ramapo, of Pitney, Xxxxxx, Xxxx & Xxxxx, counsel for
Valley, to the effect that the transactions contemplated hereby will result in a
reorganization (as defined in Section 368(a) of the Code), and accordingly no
gain or loss will be recognized for federal income tax purposes to Valley,
Ramapo, VNB or the Bank or to the stockholders of Ramapo who exchange their
shares of Ramapo for Valley Common Stock (except to the extent that cash is
received in lieu of fractional shares of Valley Common Stock).
40
(e) Pooling of Interests. The Merger shall be qualified to be treated by Valley
as a pooling-of-interests for accounting purposes and Valley shall have received
a letter from KPMG Peat Marwick LLP to the effect that the Merger will qualify
for pooling-of-interests accounting treatment if closed and consummated in
accordance with the Agreement.
6.2. CONDITIONS TO THE OBLIGATIONS OF VALLEY UNDER THIS AGREEMENT. The
obligations of Valley under this Agreement shall be further subject to the
satisfaction or waiver, at or prior to the Effective Time, of the following
conditions:
(a) Representations and Warranties; Performance of Obligations of Ramapo and
Bank. The representations and warranties of Ramapo contained in this Agreement
shall be true and correct in all material respects on the Closing Date as though
made on and as of the Closing Date. Ramapo shall have performed in all material
respects the agreements, covenants and obligations necessary to be performed by
it prior to the Closing Date. With respect to any representation or warranty
which as of the Closing Date has required a supplement or amendment to the
Ramapo Disclosure Schedule to render such representation or warranty true and
correct as of the Closing Date, the representation and warranty shall be deemed
true and correct as of the Closing Date only if (i) the information contained in
the supplement or amendment to the Disclosure Schedule related to events
occurring following the execution of this Agreement and (ii) the facts disclosed
in such supplement or amendment would not either alone, or together with any
other supplements or amendments to the Ramapo Disclosure Schedule, materially
adversely affect the representation as to which the supplement or amendment
relates.
(b) Consents. Valley shall have received the written consents of any person
whose consent to the transactions contemplated hereby is required under the
applicable instrument.
(c) Opinion of Counsel. Valley shall have received an opinion of counsel to
Ramapo, dated the date of the Closing, in form and substance reasonably
satisfactory to Valley, covering the matters set forth on Schedule 6.2 hereto
and any other matters reasonably requested by Valley.
(d) Bank Action. The Bank shall have taken all necessary corporate action to
effectuate the Bank Merger immediately following the Effective Time.
(e) Certificates. Ramapo shall have furnished Valley with such certificates of
its officers or other documents to evidence fulfillment of the conditions set
forth in this Section 6.2 as Valley may reasonably request.
(f) Environmental Law Compliance. Ramapo shall have obtained, with respect to
each Facility, an LNA, a Remediation Agreement, a Negative Declaration approval,
a Remedial Action Workplan
41
approval (in which event Ramapo will post or have posted an appropriate
Remediation Funding Source or will have obtained the NJDEP's approval to
self-guaranty any Remediation Funding Source required under any such Remediation
Agreement), a No Further Action letter or other document or documents issued by
the NJDEP advising that the requirements of ISRA have been satisfied with
respect to the Facility or an opinion of the type referred to in Section 5.19(d)
hereof.
6.3. CONDITIONS TO THE OBLIGATIONS OF RAMAPO UNDER THIS AGREEMENT. The
obligations of Ramapo under this Agreement shall be further subject to the
satisfaction or waiver, at or prior to the Effective Time, of the following
conditions:
(a) Representations and Warranties; Performance of Obligations of Valley. The
representations and warranties of Valley contained in this Agreement shall be
true and correct in all material respects on the Closing Date as though made on
and as of the Closing Date. Valley shall have performed in all material
respects, the agreements, covenants and obligations to be performed by it prior
to the Closing Date. With respect to any representation or warranty which as of
the Closing Date has required a supplement or amendment to the Valley Disclosure
Schedule to render such representation or warranty true and correct as of the
Closing Date, the representation and warranty shall be deemed true and correct
as of the Closing Date only if (i) the information contained in the supplement
or amendment to the Disclosure Schedule related to events occurring following
the execution of this Agreement and (ii) the facts disclosed in such supplement
or amendment would not either alone, or together with any other supplements or
amendments to the Valley Disclosure Schedule, materially adversely affect the
representation as to which the supplement or amendment relates.
(b) Opinion of Counsel to Valley. Ramapo shall have received an opinion of
counsel to Valley, dated the date of the Closing, in form and substance
reasonably satisfactory to Ramapo, covering the matters set forth on Schedule
6.3 hereto and any other matter reasonably requested by Ramapo.
(c) Fairness Opinion. Ramapo shall have received opinions from Xxxxxxxxx, as of
the date of this Agreement and as of the date the Proxy Statement/Prospectus is
mailed to Ramapo's stockholders, with respect to the fairness, from a financial
point of view, of the Exchange Ratio to the shareholders of Ramapo in the
Merger.
(d) Certificates. Valley shall have furnished Ramapo with such certificates of
its officers or others and such other documents to evidence fulfillment of the
conditions set forth in this Section 6.3 as Ramapo may reasonably request.
42
(e) VNB Action. VNB shall have taken all necessary corporate action to
effectuate the Bank Merger immediately following the Effective Time.
ARTICLE VII
TERMINATION, AMENDMENT AND WAIVER
7.1. TERMINATION. This Agreement may be terminated prior to the Effective Time,
whether before or after approval of this Agreement by the stockholders of
Ramapo, based upon any of the following:
(a) By mutual written consent of the parties hereto.
(b) By Valley or Ramapo (i) if the Effective Time shall not have occurred on or
prior to the Cutoff Date or (ii) if a vote of the stockholders of Ramapo is
taken and such stockholders fail to approve this Agreement at the meeting (or
any adjournment thereof) held for such purpose, unless in each case the failure
of such occurrence shall be due to the failure of the party seeking to terminate
this Agreement to perform or observe its agreements set forth herein to be
performed or observed by such party (or, in the case of Ramapo, to be performed
or observed by the directors of Ramapo) at or before the Effective Time.
(c) By Valley or Ramapo upon written notice to the other if any application for
regulatory or governmental approval necessary to consummate the Merger and the
other transactions contemplated hereby shall have been denied or withdrawn at
the request or recommendation of the applicable regulatory agency or
governmental authority or by Valley upon written notice to Ramapo if any such
application is approved with conditions which materially impair the value of
Ramapo and the Bank, taken as a whole, to Valley.
(d) By Valley if (i) there shall have occurred a material adverse change in the
business, operations, assets, or financial condition of Ramapo or the Bank,
taken as a whole, from that disclosed by Ramapo on the date of this Agreement;
or (ii) if the net operating income excluding security gains and losses (after
tax but excluding expenses related to this Agreement) of Ramapo for any full
fiscal quarter after September 30, 1998, is less than $750,000; or (iii) there
was a material breach in any representation, warranty, covenant, agreement or
obligation of Ramapo hereunder.
(e) By Ramapo, if (i) there shall have occurred a material adverse change in the
business, operations, assets or financial condition of Valley or VNB from that
disclosed by Valley on the date of this Agreement; or (ii) there was a material
breach in any representation, warranty, covenant, agreement or obligation of
Valley hereunder.
43
(f) By Valley or Ramapo if any condition to Closing specified under Article VI
hereof applicable to such party cannot reasonably be met on or before the Cutoff
Date after giving the other party a reasonable opportunity to cure any such
condition.
(g) By Ramapo if the Average Pre-Closing Price of Valley Common Stock is less
than $23.50.
(h) By Valley during the Due Diligence Period if the due diligence review by
Valley or any Disclosure Schedules provided by Ramapo after the date hereof
causes Valley to reasonably reach a conclusion about the financial condition,
business, assets or the quality of the representations and warranties of Ramapo,
significantly adverse from conclusions about the same matters which Valley's
senior executives held at the time Valley executed this Agreement.
7.2. EFFECT OF TERMINATION. In the event of the termination and abandonment of
this Agreement by either Valley or Ramapo pursuant to Section 7.1, this
Agreement shall forthwith become void and have no effect, without any liability
on the part of any party or its officers, directors or stockholders, except that
Sections 5.5(b) and 8.1 hereof shall have continuing effect as set forth
therein. Nothing contained herein, however, shall relieve any party from any
liability for any willful breach of this Agreement.
7.3. AMENDMENT. This Agreement may be amended by mutual action taken by the
parties hereto at any time before or after adoption of this Agreement by the
stockholders of Ramapo but, after any such adoption, no amendment shall be made
which reduces or changes the amount or form of the consideration to be delivered
to the stockholders of Ramapo without the approval of such stockholders. This
Agreement may not be amended except by an instrument in writing signed on behalf
of Valley and Ramapo.
7.4. EXTENSION; WAIVER. The parties may, at any time prior to the Effective Time
of the Merger, (i) extend the time for the performance of any of the obligations
or other acts of the other parties hereto; (ii) waive any inaccuracies in the
representations and warranties contained herein or in any document delivered
pursuant thereto; or (iii) waive compliance with any of the agreements or
conditions contained herein. Any agreement on the part of any party to any such
extension or waiver shall be valid only if set forth in an instrument in writing
signed on behalf of such party against which the waiver is sought to be
enforced.
ARTICLE VIII
MISCELLANEOUS
8.1. EXPENSES. All costs and expenses incurred in connection with this
Agreement and the transactions contemplated hereby
44
(including legal, accounting and investment banking fees and expenses) shall be
borne by the party incurring such costs and expenses, except that the cost of
printing and mailing the Proxy Statement/Prospectus shall be borne equally by
the parties hereto if the transaction is terminated.
8.2. NOTICES. All notices or other communications which are required or
permitted hereunder shall be in writing and sufficient if delivered personally
or sent by telecopier with confirming copy sent the same day by registered or
certified mail, postage prepaid, as follows:
(a) If to Valley, to:
Valley National Bancorp
0000 Xxxxxx Xxxx
Xxxxx, Xxx Xxxxxx 00000-0000
Attn.: Xxxxxx X. Xxxxxx
Chairman and Chief Executive Officer
Telecopier No. (000) 000-0000
Copy to:
Pitney, Xxxxxx, Xxxx & Xxxxx
Attn.: Xxxxxx X. Xxxxx, Esq.
Delivery:
000 Xxxxxx Xxxxx
Xxxxxxx Xxxx, Xxx Xxxxxx 00000
Mail:
X.X. Xxx 0000
Xxxxxxxxxx, Xxx Xxxxxx 00000-0000
Telecopier No. (000) 000-0000
(b) If to Ramapo, to:
Ramapo Financial Corporation
00 Xxxxxxxx Xxxx Xxxxxxxxx
Xxxxx, Xxx Xxxxxx 00000
Attn.: Xxxxxxxx X. X'Xxxx,
President and Chief Executive Officer
Telecopier No. (000) 000-0000
Copy to:
Williams, Caliri, Xxxxxx & Otley
Attn.: Xxxxxxx X. Xxxxxx, Esq.
Delivery:
0000 Xxxxx 00
Xxxxx, Xxx Xxxxxx 00000
Mail:
X.X. Xxx 000
Xxxxx, Xxx Xxxxxx 00000-0000
Telecopier No. (000) 000-0000
45
or such other addresses as shall be furnished in writing by any party, and any
such notice or communications shall be deemed to have been given as of the date
so delivered or telecopied and mailed.
8.3. PARTIES IN INTEREST. This Agreement shall be binding upon and shall inure
to the benefit of the parties hereto and their respective successors and
permitted assigns. Nothing in this Agreement is intended to confer, expressly or
by implication, upon any other person any rights or remedies under or by reason
of this Agreement, except for the indemnitees covered by Section 5.14 hereof. No
assignment of this Agreement may be made except upon the written consent of the
other parties hereto.
8.4. ENTIRE AGREEMENT. This Agreement, the Disclosure Schedules hereto and the
other documents, agreements and instruments executed and delivered pursuant to
or in connection with this Agreement, contains the entire agreement among the
parties hereto with respect to the transactions contemplated by this Agreement
and supersedes all prior negotiations, arrangements or understandings, written
or oral, with respect thereto. If any provision of this Agreement is found
invalid, it shall be considered deleted and shall not invalidate the remaining
provisions.
8.5. COUNTERPARTS. This Agreement may be executed in one or more counterparts,
all of which shall be considered one and the same agreement and each of which
shall be deemed an original.
8.6. GOVERNING LAW. This Agreement shall be governed by the laws of the
State of New Jersey, without giving effect to the principles of conflicts of
laws thereof.
8.7. DESCRIPTIVE HEADINGS. The descriptive headings of this Agreement are
for convenience only and shall not control or affect the meaning or construction
of any provision of this Agreement.
8.8. SURVIVAL. All representations, warranties and, except to the extent
specifically provided otherwise herein, agreements and covenants, other than
those agreements and covenants set forth in Sections 5.14 which shall survive
the Merger, shall terminate as of the Effective Time.
8.9. KNOWLEDGE. Representations made herein which are qualified by the phrase to
the best of Ramapo's knowledge or similar phrases refer as of the date hereof to
the best knowledge of the Chief Executive Officer and the Senior Vice
President-Lending of Ramapo and thereafter refer to the best knowledge of any
senior officer of Ramapo or any Ramapo subsidiary. Representations made herein
which are qualified by the phrase to the best of Valley's knowledge or similar
phrases refer as of the date hereof to the best knowledge of the President and
Chief Executive Officer, the Executive Vice President/Legal and the Chief
Financial Officer of
46
Valley and thereafter refer to the best knowledge of any senior officer of
Valley or any Valley subsidiary.
IN WITNESS WHEREOF, Valley, VNB, the Bank and Ramapo have caused this Agreement
to be executed by their duly authorized officers as of the day and year first
above written.
ATTEST: VALLEY NATIONAL BANCORP
/s/ Xxxxx Xxxxxxxx By: /s/ Xxxxxx X. Xxxxxx
Xxxxx Xxxxxxxx, First VP Xxxxxx X. Xxxxxx,
Chairman, President
and Chief Executive Officer
ATTEST: RAMAPO FINANCIAL CORPORATION
/s/ Xxxxx X. Xxxxxx By:/s/ Xxxxxxxx X. X'Xxxx
Xxxxx X. Xxxxxx, Senior XX Xxxxxxxx X. X'Xxxx, President and
Chief Executive Officer
ATTEST: VALLEY NATIONAL BANK
/s/ Xxxxx Xxxxxxxx By: /s/ Xxxxxx X. Xxxxxx
Xxxxx Xxxxxxxx, First VP Xxxxxx X. Xxxxxx, Chairman
President and
Chief Executive Officer
ATTEST: THE RAMAPO BANK
/s/ Xxxxx X. Xxxxxx By:/s/ Xxxxxxxx X. X'Xxxx
Xxxxx X. Xxxxxx, President Xxxxxxxx X. X'Xxxx, Chairman
and Chief Executive Officer
47
CERTIFICATE OF THE DIRECTORS OF RAMAPO FINANCIAL CORPORATION AND
THE RAMAPO BANK
Reference is made to the Agreement and Plan of Merger, dated
as of December 17, 1998 (the "Agreement"), among Valley National Bancorp, Valley
National Bank, Ramapo Financial Corporation and The Ramapo Bank. Capitalized
terms used herein have the meanings given to them in the Agreement.
Each of the following persons, being all of the directors of
Ramapo and the Bank, express their intention, subject to their fiduciary duties,
to vote or cause to be voted all shares of Ramapo Common Stock which are held by
such person, or over which such person exercises full voting control (other than
shares with respect to which such person exercises control in a fiduciary
capacity, as to which no agreement is made hereby), in favor of the Merger.
/s/ Xxxxxxxx X. X'Xxxx
--------------------------
Xxxxxxxx X. X'Xxxx
/s/ Xxxxxx X. Xxxxx, Xx.
--------------------------
Xxxxxx X. Xxxxx, Xx.
/s/ Xxxxx X. Xxxxxx
--------------------------
Xxxxx X. Xxxxxx
/s/ Xxxxxx X. Xxxxxx
--------------------------
Xxxxxx X. Xxxxxx
/s/ Xxxxxxx X. Xxxxxx
--------------------------
Xxxxxxx X. Xxxxxx
/s/ Xxxxx X. Xxxxxx
--------------------------
Xxxxx X. Xxxxxx
--------------------------
Xxxxx X. Xxxxxx
/s/ Xxxxx X. March
--------------------------
Xxxxx X. March
/s/ Xxxxxx Xxxxxx
--------------------------
Xxxxxx Xxxxxx
/s/ Xxxxxxx X. Xxxxxxx
--------------------------
Xxxxxxx X. Xxxxxxx
/s/ Xxxxxxx X'Xxxxxxx
--------------------------
Xxxxxxx X. X'Xxxxxxx
