AGREEMENT AND PLAN OF MERGER
BY AND BETWEEN
ORITANI FINANCIAL CORP.
AND
GREATER COMMUNITY BANCORP
NOVEMBER 13, 2007
TABLE OF CONTENTS
ARTICLE I CERTAIN DEFINITIONS..................................................2
1.1. Certain Definitions..........................................2
ARTICLE II THE MERGER..........................................................9
2.1. Merger.......................................................9
2.2. Effective Time..............................................10
2.3. Certificate of Incorporation and Bylaws.....................10
2.4. Directors and Officers of Surviving Corporation.............10
2.5. Additional Directors of OFC and Oritani Savings Bank;
Advisory Board..............................................10
2.6. Effects of the Merger.......................................11
2.7. Tax Consequences............................................11
2.8. Possible Alternative Structures.............................11
2.9. Bank Merger.................................................11
2.10. Additional Actions..........................................12
ARTICLE III CONVERSION OF SHARES..............................................12
3.1. Conversion of GCB Common Stock; Merger Consideration........12
3.2. Election Procedures.........................................13
3.3. Procedures for Exchange of GCB Common Stock.................16
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF GCB..............................19
4.1. Standard....................................................19
4.2. Organization................................................19
4.3. Capitalization..............................................20
4.4. Authority; No Violation.....................................21
4.5. Consents....................................................22
4.6. Financial Statements........................................22
4.7. Taxes.......................................................24
4.8. No Material Adverse Effect..................................24
4.9. Material Contracts; Leases; Defaults........................24
4.10. Ownership of Property; Insurance Coverage...................26
4.11. Legal Proceedings...........................................27
4.12. Compliance With Applicable Law..............................27
4.13. Employee Benefit Plans......................................29
4.14. Brokers, Finders and Financial Advisors.....................31
4.15. Environmental Matters.......................................32
4.16. Loan Portfolio and Investment Securities....................33
4.17. Securities Documents........................................34
4.18. Related Party Transactions..................................35
4.19. Deposits....................................................35
4.20. Required Vote...............................................35
4.21. Registration Obligations....................................35
4.22. Risk Management Instruments.................................35
4.23. Fairness Opinion............................................36
4.24. Trust Accounts..............................................36
4.25. Intellectual Property.......................................36
4.26. Labor Matters...............................................36
4.27. GCB Information Supplied....................................37
ARTICLE V REPRESENTATIONS AND WARRANTIES OF OFC...............................37
5.1. Standard....................................................37
5.2. Organization................................................37
5.3. Capitalization..............................................38
5.4. Authority; No Violation.....................................39
5.5. Consents....................................................39
5.6. Financial Statements........................................40
5.7. Taxes.......................................................41
5.8. No Material Adverse Effect..................................42
5.9. Ownership of Property; Insurance Coverage...................42
5.10. Legal Proceedings...........................................43
5.11. Compliance With Applicable Law..............................43
5.12. Employee Benefit Plans......................................44
5.13. Environmental Matters.......................................45
5.14. Loan Portfolio..............................................46
5.15. Securities Documents........................................47
5.16. Brokers, Finders and Financial Advisors.....................47
5.17. OFC Common Stock............................................47
5.18. Material Contracts..........................................47
5.19. Deposits....................................................47
5.20. Related Party Transactions..................................48
5.21. Required Vote...............................................48
5.22. Adequate Cash...............................................48
5.23. Ownership of OFC Common Stock...............................48
5.24. OFC Information Supplied....................................48
ARTICLE VI COVENANTS OF GCB...................................................49
6.1. Conduct of Business.........................................49
6.2. Current Information.........................................53
6.3. Access to Properties and Records............................54
6.4. Financial and Other Statements..............................55
6.5. Maintenance of Insurance....................................55
6.6. Disclosure Supplements......................................55
6.7. Consents and Approvals of Third Parties.....................56
6.8. All Reasonable Efforts......................................56
6.9. Failure to Fulfill Conditions...............................56
6.10. No Solicitation.............................................56
6.11. Reserves and Merger-Related Costs...........................59
6.12. Board of Directors and Committee Meetings...................59
6.13. GCB DRIP....................................................59
ARTICLE VII COVENANTS OF OFC..................................................60
7.1. Conduct of Business.........................................60
7.2. Current Information.........................................60
7.3. Financial and Other Statements..............................60
7.4. Disclosure Supplements......................................61
7.5. Consents and Approvals of Third Parties.....................61
7.6. All Reasonable Efforts......................................61
7.7. Failure to Fulfill Conditions...............................61
7.8. Employee Benefits...........................................61
7.9. Directors and Officers Indemnification and Insurance........63
7.10. Stock Listing...............................................65
7.11. Stock and Cash Reserve......................................65
7.12. Section 16(b) Exemption.....................................65
ARTICLE VIII REGULATORY AND OTHER MATTERS.....................................65
8.1. GCB and OFC Shareholder Meetings............................65
8.2. Joint Proxy Statement-Prospectus............................66
8.3. Regulatory Approvals........................................67
8.4. Affiliates..................................................68
ARTICLE IX CLOSING CONDITIONS.................................................68
9.1. Conditions to Each Party's Obligations under this
Agreement...................................................68
9.2. Conditions to the Obligations of OFC under this
Agreement...................................................69
9.3. Conditions to the Obligations of GCB under this
Agreement...................................................70
ARTICLE X THE CLOSING.........................................................70
10.1. Time and Place..............................................70
10.2. Deliveries at the Pre-Closing and the Closing...............71
ARTICLE XI TERMINATION, AMENDMENT AND WAIVER..................................71
11.1. Termination.................................................71
11.2. Effect of Termination.......................................73
11.3. Amendment, Extension and Waiver.............................74
ARTICLE XII MISCELLANEOUS.....................................................75
12.1. Confidentiality.............................................75
12.2. Public Announcements........................................75
12.3. Survival....................................................75
12.4. Notices.....................................................76
12.5. Parties in Interest.........................................76
12.6. Complete Agreement..........................................77
12.7. Counterparts................................................77
12.8. Severability................................................77
12.9. Governing Law...............................................77
12.10. Interpretation..............................................77
12.11. Specific Performance........................................78
12.12. Disclosure Schedule.........................................78
Exhibit A Form of GCB Voting Agreement
Exhibit B.........MHC Voting Agreement
Exhibit C.........Form of Bank Merger Agreement
Exhibit D.........Affiliates Agreement
AGREEMENT AND PLAN OF MERGER
This AGREEMENT AND PLAN OF MERGER (this "Agreement") is dated as of
November 13, 2007, by and between Oritani Financial Corp., a federal corporation
("OFC"), and Greater Community Bancorp, a New Jersey corporation ("GCB").
WHEREAS, the Board of Directors of each of OFC and GCB (i) has determined
that this Agreement and the business combination and related transactions
contemplated hereby are in the best interests of their respective companies and
shareholders and (ii) has determined that this Agreement and the transactions
contemplated hereby are consistent with and in furtherance of their respective
business strategies, and (iii) has adopted a resolution approving this Agreement
and declaring its advisability; and
WHEREAS, in accordance with the terms of this Agreement, GCB will merge
with and into OFC (the "Merger"), and immediately thereafter Greater Community
Bank ("GC Bank"), a New Jersey chartered commercial bank and wholly owned
subsidiary of GCB, will be merged with and into Oritani Savings Bank ("Oritani
Savings Bank"), a New Jersey chartered stock savings bank and wholly owned
subsidiary of OFC; and
WHEREAS, as a condition to the willingness of OFC to enter into this
Agreement, the directors of GCB listed on GCB DISCLOSURE SCHEDULE A-1 have
entered into a Voting Agreement, substantially in the form of Exhibit A hereto,
dated as of the date hereof, with OFC (the "GCB Voting Agreements"), pursuant to
which each such director has agreed, among other things, to vote all shares of
common stock of GCB owned by such person in favor of the approval of this
Agreement and the transactions contemplated hereby, upon the terms and subject
to the conditions set forth in the GCB Voting Agreements; and
WHEREAS, as a condition to the willingness of GCB to enter into this
Agreement, Oritani Financial Corp. has entered into a Voting Agreement,
substantially in the form of Exhibit B hereto, dated as of the date hereof, with
GCB (the "MHC Voting Agreements"), pursuant to Oritani Financial Corp., MHC has
agreed to vote all shares of common stock of OFC owned by it in favor of the
approval of this Agreement and the transactions contemplated hereby; and
WHEREAS, the parties intend the Merger to qualify as a reorganization
within the meaning of Section 368(a) of the Internal Revenue Code of 1986, as
amended (the "Code"), and that this Agreement be and is hereby adopted as a
"plan of reorganization" within the meaning of Sections 354 and 361 of the Code;
and
WHEREAS, the parties desire to make certain representations, warranties and
agreements in connection with the business transactions described in this
Agreement and to prescribe certain conditions thereto.
NOW, THEREFORE, in consideration of the mutual covenants, representations,
warranties and agreements herein contained, and of other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree as follows:
ARTICLE I
CERTAIN DEFINITIONS
1.1. Certain Definitions.
As used in this Agreement, the following terms have the following meanings
(unless the context otherwise requires, references to Articles and Sections
refer to Articles and Sections of this Agreement). Other terms used herein are
defined in the preamble and elsewhere in this Agreement.
"Advisory Board" shall have the meaning set forth in Section 2.5.
"Affiliate" shall mean, with respect to any Person, any Person who
directly, or indirectly, through one or more intermediaries, controls, or is
controlled by, or is under common control with, such Person and, without
limiting the generality of the foregoing, includes any executive officer or
director of such Person and any Affiliate of such executive officer or director.
"Agreement" shall mean this agreement, and any amendment hereto.
"Applications" shall mean the applications for Regulatory Approvals that
are required by the transactions contemplated hereby.
"Acquisition Proposals" shall have the meaning set forth in Section
6.10(a).
"Acquisition Transaction" shall have the meaning set forth in Section
6.10(a).
"Bank Merger" shall mean the merger of GC Bank with and into Oritani
Savings Bank, with Oritani Savings Bank as the surviving institution, which
merger shall occur immediately following the Merger.
"Bank Regulator" shall mean any Federal or state banking regulator,
including but not limited to the OTS, the FRB, the FDIC and the Department,
which regulates Oritani Savings Bank or GC Bank, or any of their respective
holding companies or subsidiaries, as the case may be.
"BHCA" shall mean the Bank Holding Company Act of 1956, as amended.
"Call Reports" shall mean the quarterly reports of income and conditions
required to be filed with the FDIC.
"Cash Consideration" shall have the meaning set forth in Section 3.1.3.
"Cash Election" shall have the meaning set forth in Section 3.1.3.
"Cash Election Shares" shall have the meaning set forth in Section 3.1.3.
"Cash Option Payment" shall have the meaning set forth in Section 3.3.9.
"Certificate" shall mean certificates evidencing shares of GCB Common
Stock.
"Closing" shall have the meaning set forth in Section 2.2.
"Closing Date" shall have the meaning set forth in Section 2.2.
"COBRA" shall mean the Consolidated Omnibus Budget Reconciliation Act of
1985, as amended.
"Code" shall mean the Internal Revenue Code of 1986, as amended.
"Confidentiality Agreements" shall mean the confidentiality agreements
referred to in Section 12.1.
"Continuing Employees" shall have the meaning set forth in Section 7.8.2.
"CRA" shall have the meaning set forth in Section 4.12.3.
"Defined Benefit Plan" shall have the meaning set forth in Section 4.13.3.
"Department" shall mean the New Jersey Department of Banking and Insurance
and where and as appropriate shall include the New Jersey Commissioner of
Banking and Insurance.
"Director SERP" shall have the meaning set forth in Section 7.8.6.
"Directors Plans" shall have the meaning set forth in Section 7.8.6.
"Effective Time" shall mean the date and time specified pursuant to Section
2.2 hereof as the effective time of the Merger.
"Election Deadline" shall have the meaning set forth in Section 3.2.3.
"Election Form" shall have the meaning set forth in Section 3.2.2.
"Election Form Record Date" shall have the meaning set forth in Section
3.2.2.
"Environmental Laws" shall mean any applicable Federal, state or local law,
statute, ordinance, rule, regulation, code, license, permit, authorization,
approval, consent, order, judgment, decree, injunction or agreement with any
governmental entity relating to (1) the protection, preservation or restoration
of the environment (including, without limitation, air, water vapor, surface
water, groundwater, drinking water supply, surface soil, subsurface soil, plant
and animal life or any other natural resource), and/or (2) the use, storage,
recycling, treatment, generation, transportation, processing, handling,
labeling, production, release or disposal of Materials of Environmental Concern.
The term Environmental Law includes without limitation (a) the Comprehensive
Environmental Response, Compensation and Liability Act, as amended, 42 U.S.C.
ss.9601, et seq; the Resource Conservation and Recovery Act, as amended, 42
U.S.C. ss.6901, et seq; the Clean Air Act, as amended, 42 U.S.C. ss.7401, et
seq; the Federal Water Pollution Control Act, as amended, 33 U.S.C. ss.1251, et
seq; the Toxic Substances Control Act, as amended, 15 U.S.C. ss.2601, et seq;
the Emergency Planning and Community Right to Know Act, 42 U.S.C. ss.11001, et
seq; the Safe Drinking Water Act, 42 U.S.C. ss.300f, et seq; and all comparable
state and local laws, and (b) any common law (including without limitation
common law that may impose strict liability) that may impose liability or
obligations for injuries or damages due to the presence of or exposure to any
Materials of Environmental Concern.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
amended.
"ERISA Affiliate" shall have the meaning set forth in Section 4.13.3.
"ERISA Affiliate Plan" shall have the meaning set forth in Section 4.13.3.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as amended.
"Exchange Agent" shall mean American Stock Transfer & Trust Company, or
such other bank or trust company or other agent designated by OFC, and
reasonably acceptable to GCB, which shall act as agent for OFC in connection
with the exchange procedures for converting Certificates into the Merger
Consideration.
"Exchange Fund" shall have the meaning set forth in Section 3.3.1.
"Exchange Ratio" shall mean a quotient (carried to the fourth decimal
place) (a) the numerator of which is $21.40 and (b) the denominator of which is
the OFC Market Value, provided however, that in no event shall the Exchange
Ratio be greater than 1.4588 or less than 1.1935, subject to adjustment as
provided in Section 3.1.5.
"Favorable Letter" shall have the meaning set forth in Section 4.13.2.
"FDIA" shall mean the Federal Deposit Insurance Act, as amended.
"FDIC" shall mean the Federal Deposit Insurance Corporation or any
successor thereto.
"FHLB" shall mean the Federal Home Loan Bank of New York.
"FRB" shall mean the Board of Governors of the Federal Reserve System and,
where appropriate, the Federal Reserve Bank of Boston.
"GAAP" shall mean accounting principles generally accepted in the United
States of America, consistently applied with prior practice.
"GCB" shall mean Greater Community Bancorp, a New Jersey corporation, with
its principal offices located at 00 Xxxxx Xxxxxxxxx, Xxxxxx, Xxx Xxxxxx, 00000.
"GCB Common Stock" shall mean the common stock, par value $0.50 per share,
of GCB.
"GCB Compensation and Benefit Plans" shall have the meaning set forth in
Section 4.13.1.
"GCB DISCLOSURE SCHEDULE" shall mean a written disclosure schedule
delivered contemporaneously with this Agreement by GCB to OFC in accordance with
Article IV of this Agreement.
"GCB DRIP" shall mean the Dividend Reinvestment Plan and Stock Purchase
Plan of GCB.
"GCB Financial Statements" shall mean (i) the audited consolidated balance
sheets (including related notes and schedules, if any) of GCB and subsidiaries
as of December 31, 2006 and 2005 and the consolidated statements of income,
comprehensive income, changes in shareholders' equity and cash flows (including
related notes and schedules, if any) of GCB and subsidiaries for each of the
three years ended December 31, 2006, 2005 and 2004, as set forth in GCB's annual
report for the year ended December 31, 2006, and (ii) the unaudited interim
consolidated financial statements of GCB and subsidiaries as of the end of each
calendar quarter following December 31, 2006 and for the periods then ended, as
filed by GCB in its Securities Documents.
"GCB Insiders" shall have the meaning set forth in Section 7.12.
"GCB Option" shall mean an option to purchase shares of GCB Common Stock
granted pursuant to the GCB Stock Benefit Plans and as set forth in GCB
DISCLOSURE SCHEDULE 4.3.1.
"GCB Recommendation" shall have the meaning set forth in Section 8.1.
"GCB Regulatory Agreement" shall have the meaning set forth in Section
4.12.3.
"GCB Regulatory Reports" shall mean the Call Reports of GC Bank and
accompanying schedules, for each calendar quarter beginning with the quarter
ended March 31, 2007, through the Closing Date, and all reports filed with the
FRB by GCB from March 31, 2007 through the Closing Date.
"GCB Section 16 Information" shall have the meaning set forth in Section
7.12.
"GCB Shareholders Meeting" shall have the meaning set forth in Section
8.1.1.
"GCB Stock Benefit Plans" shall mean the GCB 2001 Employee Stock Option
Plan and the GCB 2001 Stock Option Plan for Nonemployee Directors, and the 2006
Long-Term Stock Compensation Plan, and any amendments thereto.
"GCB Subsequent Determination" shall have the meaning set forth in Section
6.10(e).
"GCB Subsidiary" shall mean any corporation, of which more than 50% of the
capital stock is owned, either directly or indirectly, by GCB or GC Bank, except
any corporation the stock of which is held in the ordinary course of the lending
activities of GC Bank.
"GC Bank" shall mean Greater Community Bank, a New Jersey chartered
commercial bank, with its principal offices located at 00 Xxxxx Xxxxxxxxx,
Xxxxxx, Xxx Xxxxxx, 00000, which is a wholly owned subsidiary of GCB.
"Governmental Entity" shall mean any Federal or state court, administrative
agency or commission or other governmental authority or instrumentality.
"HIPAA" shall have the meaning set forth in Section 4.13.2.
"HOLA" shall mean the Home Owners' Loan Act, as amended.
"Indemnified Parties" shall have the meaning set forth in Section 7.9.1.
"IRS" shall mean the United States Internal Revenue Service.
"Joint Proxy Statement-Prospectus" shall have the meaning set forth in
Section 8.2.1.
"Knowledge" as used with respect to a Person (including references to such
Person being aware of a particular matter) shall mean those facts that are known
or should have been known by the executive officers and directors of such
Person, and includes any facts, matters or circumstances set forth in any
written notice from any Bank Regulator or any other material written notice
received by that Person.
"Material Adverse Effect" shall mean, with respect to OFC or GCB,
respectively, any effect that (i) is material and adverse to the financial
condition, results of operations or business of OFC and the OFC Subsidiaries
taken as a whole, or GCB and the GCB Subsidiaries taken as a whole,
respectively, or (ii) does or would materially impair the ability of either GCB,
on the one hand, or OFC, on the other hand, to perform its obligations under
this Agreement or otherwise materially threaten or materially impede the
consummation of the transactions contemplated by this Agreement; provided that
"Material Adverse Effect" shall not be deemed to include the impact of (a)
changes in laws and regulations affecting banks or thrift institutions or their
holding companies generally, or interpretations thereof by courts or
governmental agencies, (b) changes in GAAP or regulatory accounting principles
generally applicable to financial institutions and their holding companies, (c)
actions and omissions of a party hereto (or any of its Subsidiaries) taken with
the prior written consent of the other party, (d) the impact of the announcement
of this Agreement and the transactions contemplated hereby, and compliance with
this Agreement on the business, financial condition or results of operations of
the parties and their respective Subsidiaries, including the expenses (inclusive
of the change in control, severance and related payments to be made to employees
at or subsequent to the Closing Date in accordance with the GCB or OFC
DISCLOSURE SCHEDULES) incurred by the parties hereto in consummating the
transactions contemplated by this Agreement (and any loss of personnel
subsequent to the date of this Agreement), (e) changes in national or
international political or social conditions including the engagement by the
United States in hostilities, whether or not pursuant to the declaration of a
national emergency or war, or the occurrence of any military or terrorist attack
upon or within the United States, or any of its territories, possessions or
diplomatic or consular offices or upon any military installation, equipment or
personnel of the United States, unless it uniquely and disproportionately
affects either or both of the parties or any of their Subsidiaries (f) any
change in the value of the securities or loan portfolio, or any change in the
value of the deposits or borrowings, of OFC or GCB, or any of their
Subsidiaries, respectively, resulting from a change in interest rates generally,
(g) changes relating to securities markets in general (including any disruption
thereof and any decline in the price of any security or market index), or (g)
any acts of GCB, and any charge or reserve taken by GCB at the request of OFC
pursuant to Section 6.11.
"Materials of Environmental Concern" shall mean pollutants, contaminants,
wastes, toxic substances, petroleum and petroleum products, and any other
materials regulated under Environmental Laws.
"Maximum Amount" shall have the meaning set forth in Section 7.9.3.
"Merger" shall mean the merger of GCB with and into OFC (or a subsidiary
thereof) pursuant to the terms hereof.
"Merger Consideration" shall mean the cash or OFC Common Stock, or
combination thereof, in an aggregate per share amount to be paid by OFC for each
share of GCB Common Stock, as set forth in Section 3.1.
"Merger Registration Statement" shall mean the registration statement,
together with all amendments, filed with the SEC under the Securities Act for
the purpose of registering shares of OFC Common Stock to be offered to holders
of GCB Common Stock in connection with the Merger.
"Nasdaq" shall mean the Nasdaq Global Market.
"NJBCA" shall mean the New Jersey Business Corporation Act, as amended.
"Non-Election Shares" shall have the meaning set forth in Section 3.2.1.
"Non-Exchangeable Shares" shall have the meaning set forth in Section
3.1.2.
"Notice of Superior Proposal" shall have the meaning set forth in Section
6.10(e).
"OFC" shall mean Oritani Financial Corp., a federal corporation, with its
principal executive offices located at 000 Xxxxxxx Xxxx, Xxxxxxxx xx Xxxxxxxxxx,
Xxx Xxxxxx, 00000.
"OFC Common Stock" shall mean the common stock, par value $.01 per share,
of OFC.
"OFC DISCLOSURE SCHEDULE" shall mean a written disclosure schedule
delivered contemporaneously with this Agreement by OFC to GCB in accordance with
Article V of this Agreement.
"OFC Financial Statements" shall mean the (i) the audited consolidated
balance sheets (including related notes and schedules) of OFC and subsidiaries
as of June 30, 2007 and 2006 and the consolidated statements of income,
comprehensive income, stockholders' equity and cash flows (including related
notes and schedules, if any) of OFC and subsidiaries for each of the three years
ended June 30, 2007, 2006 and 2005, as set forth in OFC's annual report for the
year ended June 30, 2006, and (ii) the unaudited interim consolidated financial
statements of OFC and subsidiaries as of the end of each calendar quarter
following June 30, 2007, and for the periods then ended, as filed by OFC in its
Securities Documents.
"OFC Market Value" shall mean, as of any date, the average of the closing
sales price of a share of OFC Common Stock, as reported on Nasdaq, for the
twenty (20) consecutive trading days ending on the second trading day preceding
the date as of which the OFC Market Value is determined.
"OFC Regulatory Agreement" shall have the meaning set forth in Section
5.11.3.
"OFC Regulatory Reports" shall mean the Call Reports of Oritani Savings
Bank and accompanying schedules, as filed with the FDIC, for each calendar
quarter beginning with the quarter ended March 31, 2007, through the Closing
Date, and all Reports filed with the OTS by OFC from March 31, 2007, through the
Closing Date.
"OFC Shareholders Meeting" shall have the meaning set forth in Section
8.1.2.
"OFC Subsidiary" shall mean any corporation, of which more than 50% of the
capital stock is owned, either directly or indirectly, by OFC or Oritani Savings
Bank, except any corporation the stock of which is held in the ordinary course
of the lending activities of Oritani Savings Bank.
"Oritani Savings Bank" shall mean Oritani Savings Bank, a federally
chartered stock savings association, with its principal offices located at 000
Xxxxxxx Xxxx, Xxxxxxxx xx Xxxxxxxxxx, Xxx Xxxxxx, 00000,xxxxx is a wholly owned
subsidiary of OFC.
"OTS" shall mean the Office of Thrift Supervision or any successor thereto.
"OTS Regulations" shall mean Title 12, Code of Federal Regulations, Chapter
V.
"PBGC" shall mean the Pension Benefit Guaranty Corporation, or any
successor thereto.
"Pension Plan" shall have the meaning set forth in Section 4.13.2.
"Person" shall mean any individual, corporation, partnership, joint
venture, association, trust or "group" (as that term is defined under the
Exchange Act).
"Regulatory Approvals" shall mean the approval of any Bank Regulator and
any other Governmental Entity that is necessary in connection with the
consummation of the Merger, the Bank Merger and the related transactions
contemplated by this Agreement.
"Rights" shall mean warrants, options, rights, convertible securities,
stock appreciation rights and other arrangements or commitments which obligate
an entity to issue or dispose of any of its capital stock or other ownership
interests or which provide for compensation based on the equity appreciation of
its capital stock.
"SEC" shall mean the Securities and Exchange Commission or any successor
thereto.
"Securities Act" shall mean the Securities Act of 1933, as amended.
"Securities Documents" shall mean all reports, offering circulars, proxy
statements, registration statements and all similar documents filed, or required
to be filed, pursuant to the Securities Laws.
"Securities Laws" shall mean the Securities Act; the Exchange Act; the
Investment Company Act of 1940, as amended; the Investment Advisers Act of 1940,
as amended; the Trust Indenture Act of 1939, as amended, and the rules and
regulations of the SEC promulgated thereunder.
"Shortfall Number" shall have the meaning set forth in Section 3.2.5.
"Stock Consideration" shall have the meaning set forth in Section 3.1.3.
"Stock Conversion Number" shall have the meaning set forth in Section
3.2.1.
"Stock Election" shall have the meaning set forth in Section 3.1.3.
"Stock Election Number" shall have the meaning set forth in Section 3.2.4.
"Stock Election Shares" shall have the meaning set forth in Section 3.1.3.
"Subsidiaries" shall mean, with respect to GCB, the GCB Subsidiaries, and
with respect to OFC, the OFC Subsidiaries.
"Superior Proposal" shall have the meaning set forth in Section 6.10(e).
"Surviving Corporation" shall have the meaning set forth in Section 2.1
hereof.
"Termination Date" shall mean July 31, 2008.
"Treasury Regulations" shall have the meaning set forth in Section 7.8.6.
"Treasury Stock" shall have the meaning set forth in Section 3.1.2.
"Trust" shall have the meaning set forth in Section 4.3.1.
ARTICLE II
THE MERGER
2.1. Merger.
Subject to the terms and conditions of this Agreement, at the Effective
Time: (a) GCB shall merge with and into OFC, with OFC as the resulting or
surviving corporation (the "Surviving Corporation"); and (b) the separate
existence of GCB shall cease and all of the rights, privileges, powers,
franchises, properties, assets, liabilities and obligations of GCB shall be
vested in and assumed by OFC. As part of the Merger, each share of GCB Common
Stock (other than Non-Exchangeable Shares) will be converted into the right to
receive the Merger Consideration pursuant to the terms of Article III hereof.
Immediately after the Merger, GC Bank shall merge with and into Oritani Savings
Bank, with Oritani Savings Bank as the resulting institution.
2.2. Effective Time.
The Closing shall occur no later than the close of business on the fifth
business day following the latest to occur of (i) the receipt of all Regulatory
Approvals, (ii) GCB shareholder approval of the Merger, (iii) OFC shareholder
approval of the Merger, or (iv) the passing of any applicable waiting periods
required under law, or (iv) the satisfaction or waiver of all of the conditions
set forth in Article IX of this Agreement, or at such other date or time upon
which OFC and GCB mutually agree in writing (the "Closing"). The Merger shall be
effected by the filing of the Articles of Combination with the OTS in accordance
with OTS Regulations, and a certificate of merger with the New Jersey Office of
the Secretary of State in accordance with the NJBCA on the day of the Closing
(the "Closing Date"), in accordance with the applicable law. The "Effective
Time" means the date and time upon which the Articles of Combination are filed
with the OTS and the certificate of merger is filed with the New Jersey Office
of the Secretary of State, or as otherwise stated in the Articles of Combination
and the certificate of merger, in accordance with OTS Regulations and the NJBCA.
2.3. Certificate of Incorporation and Bylaws.
The Certificate of Incorporation and Bylaws of OFC as in effect immediately
prior to the Effective Time shall be the Certificate of Incorporation and Bylaws
of the Surviving Corporation, until thereafter amended as provided therein and
by applicable law.
2.4. Directors and Officers of Surviving Corporation.
Except as provided in Section 2.5, the directors of OFC immediately prior
to the Effective Time shall be the initial directors of the Surviving
Corporation, each to hold office in accordance with the Certificate of
Incorporation and Bylaws of the Surviving Corporation. The officers of OFC
immediately prior to the Effective Time shall be the initial officers of
Surviving Corporation, in each case until their respective successors are duly
elected or appointed and qualified.
2.5. Additional Directors of OFC and Oritani Savings Bank; Advisory Board.
Prior to the Effective Time, OFC shall take action necessary to increase
the number of persons constituting the Board of Directors of OFC and Oritani
Savings Bank by two persons, and immediately after the Effective Time, OFC shall
take all actions necessary to elect Xxxxxx X. Xxxxxx and Xxxxxxx X. Xxxxx to the
OFC and the Oritani Savings Bank Boards of Directors for a term of not less than
one year. In addition, effective immediately after the Effective Time, each
person who serves on the Board of Directors of GCB both on the date of this
Agreement and as of the Effective Time (except for the two persons who join the
OFC and Oritani Savings Bank Board of Directors in accordance with the previous
sentences) shall be appointed to the Oritani Savings Bank Advisory Board (the
"Advisory Board"). The Advisory Board shall be continued for a period of at
least one year following the Effective Time. OFC shall appoint a former director
of GCB as the Chairman of the Advisory Board. The Advisory Board shall meet
quarterly, and each advisory board member shall receive a fee of $2,500 for each
quarterly meeting attended, and shall be entitled to indemnity rights with
respect to their service on the Advisory Board to the fullest extent permitted
by law.
2.6. Effects of the Merger.
At and after the Effective Time, the Merger shall have the effects as set
forth in the HOLA, OTS Regulations and the NJBCA.
2.7. Tax Consequences.
It is intended that the Merger shall constitute a reorganization within the
meaning of Section 368(a) of the Code, and that this Agreement shall constitute
a "plan of reorganization" as that term is used in Sections 354 and 361 of the
Code. From and after the date of this Agreement and until the Closing, each
party hereto shall use its commercially reasonable best efforts to cause the
Merger to qualify, and will not knowingly take any action, cause any action to
be taken, fail to take any action or cause any action to fail to be taken which
action or failure to act could prevent the Merger from qualifying as a
reorganization under Section 368(a) of the Code. Following the Closing, neither
OFC, GCB nor any of their affiliates shall knowingly take any action, cause any
action to be taken, fail to take any action or cause any action to fail to be
taken, which action or failure to act could cause the Merger to fail to qualify
as a reorganization under Section 368(a) of the Code. OFC and GCB each hereby
agrees to deliver certificates substantially in compliance with IRS published
advance ruling guidelines, with customary exceptions and modifications thereto,
to enable counsel to deliver the legal opinion contemplated by Section 9.1.6,
which certificates shall be effective as of the date of such opinion.
2.8. Possible Alternative Structures.
Notwithstanding anything to the contrary contained in this Agreement, prior
to the Effective Time OFC shall be entitled to revise the structure of the
Merger or the Bank Merger, including without limitation, by merging GCB into a
wholly owned subsidiary of OFC, provided that (i) any such subsidiary shall
become a party to, and shall agree to be bound by, the terms of this Agreement
(ii) there are no adverse Federal or state income tax consequences to GCB
shareholders as a result of the modification; (iii) the consideration to be paid
to the holders of GCB Common Stock under this Agreement is not thereby changed
in kind, value or reduced in amount; and (iv) such modification will not delay
materially or jeopardize the receipt of Regulatory Approvals or other consents
and approvals relating to the consummation of the Merger and the Bank Merger or
otherwise delay the Closing or cause any condition to Closing set forth in
Article IX not to be capable of being fulfilled in a timely manner. The parties
hereto agree to appropriately amend this Agreement and any related documents in
order to reflect any such revised structure, all of which shall be mutually
acceptable to the parties.
2.9. Bank Merger
OFC and GCB shall use their reasonable best efforts to cause the merger of
GC Bank with and into Oritani Savings Bank, with Oritani Savings Bank as the
surviving institution, to occur as soon as practicable after the Effective Time.
In addition, following the execution and delivery of this Agreement, OFC will
cause Oritani Savings Bank, and GCB will cause GC Bank, to execute and deliver
the Plan of Bank Merger substantially in the form attached to this Agreement as
Exhibit C.
2.10. Additional Actions
If, at any time after the Effective Time, OFC shall reasonably consider or
be advised that any further deeds, assignments or assurances in law or any other
acts are necessary or desirable to (i) vest, perfect or confirm, of record or
otherwise, in OFC its right, title or interest in, to or under any of the
rights, properties or assets of GCB or GC Bank, or (ii) otherwise carry out the
purposes of this Agreement, GCB and its officers and directors shall be deemed
to have granted to OFC an irrevocable power of attorney to execute and deliver,
in such official corporate capacities, all such deeds, assignments or assurances
in law or any other acts as are necessary or desirable to (a) vest, perfect or
confirm, of record or otherwise, in OFC its right, title or interest in, to or
under any of the rights, properties or assets of GCB or (b) otherwise carry out
the purposes of this Agreement, and the officers and directors of the OFC are
authorized in the name of GCB or otherwise to take any and all such action.
ARTICLE III
CONVERSION OF SHARES
3.1. Conversion of GCB Common Stock; Merger Consideration.
At the Effective Time, by virtue of the Merger and without any action on
the part of OFC, GCB or the holders of any of the shares of GCB Common Stock,
the Merger shall be effected in accordance with the following terms:
3.1.1. Each share of OFC Common Stock that is issued and outstanding
immediately prior to the Effective Time shall remain issued and outstanding
following the Effective Time and shall be unchanged by the Merger.
3.1.2. All shares of GCB Common Stock held in the treasury of GCB
("Treasury Stock") and each share of GCB Common Stock owned by OFC or any OFC
Subsidiary immediately prior to the Effective Time (other than shares held in a
fiduciary capacity or in connection with debts previously contracted)
(collectively, the "Non-Exchangeable Shares") shall, at the Effective Time,
cease to exist, and the certificates for such shares shall be canceled as
promptly as practicable thereafter, and no payment or distribution shall be made
in consideration therefor.
3.1.3. Subject to the provisions of this Article III, each share of GCB
Common Stock issued and outstanding immediately prior to the Effective Time
(other than the Non-Exchangeable Shares) shall become and be converted into, as
provided in and subject to the limitations set forth in this Agreement, the
right to receive at the election of the holder thereof as provided in Section
3.2, the following, without interest:
(A) for each share of GCB Common Stock with respect to which an
election to receive cash has been effectively made and not revoked, pursuant
to Section 3.2 (a "Cash Election"), cash from OFC in an amount equal to $21.40
(the "Cash Consideration") (collectively, "Cash Election Shares");
(B) for each share of GCB Common Stock with respect to which an
election to receive OFC Common Stock has been effectively made and not revoked,
pursuant to Section 3.2 (a "Stock Election"), the number of shares of OFC Common
Stock equal to the Exchange Ratio (the "Stock Consideration") (collectively, the
"Stock Election Shares");
(C) a combination of the Cash Consideration and the Stock
Consideration (a "Mixed Election" and collectively the "Mixed Election Shares");
and
(D) for each share of GCB Common Stock other than shares as to which a
Cash Election, a Stock Election or a Mixed Election has been effectively made
and not revoked, pursuant to Section 3.2 (collectively, "Non-Election Shares"),
such Stock Consideration and/or Cash Consideration as is determined in
accordance with Section 3.2.
3.1.4. After the Effective Time, shares of GCB Common Stock shall be no
longer outstanding and shall automatically be canceled and shall cease to exist,
and shall thereafter by operation of this section represent the right to receive
the Merger Consideration and any dividends or distributions with respect thereto
or any dividends or distributions with a record date prior to the Effective Time
that were declared or made by GCB on such shares of GCB Common Stock in
accordance with the terms of this Agreement on or prior to the Effective Time
and which remain unpaid at the Effective Time.
3.1.5. In the event OFC changes (or establishes a record date for changing)
the number of, or provides for the exchange of, shares of OFC Common Stock
issued and outstanding prior to the Effective Time as a result of a stock split,
stock dividend, recapitalization, reclassification, or similar transaction
(including any exercise of any Rights by any Person pursuant to which OFC
receives less than fair market value, which may be measured as of the date of
the grant of the Right, for such shares) with respect to the outstanding OFC
Common Stock and the record date therefor shall be prior to the Effective Time,
the Exchange Ratio shall be proportionately and appropriately adjusted to
provide the holders of GCB Common Stock the same economic effect as contemplated
by this Agreement prior to such event; provided, that no such adjustment shall
be made with regard to OFC Common Stock if OFC issues additional shares of
Common Stock and receives fair market value consideration for such shares and
provided, further, that no adjustment shall be made with regard to OFC Common
Stock as a result of the grant of equity awards by OFC pursuant to a stockholder
approved plan.
3.2. Election Procedures.
3.2.1. Holders of GCB Common Stock may elect to receive shares of OFC
Common Stock or cash (in either case without interest) in exchange for their
shares of GCB Common Stock in accordance with the procedures set forth herein;
provided that, in the aggregate, and subject to the provisions of this Section
3.2, 60% of the total number of shares of GCB Common Stock issued and
outstanding at the Effective Time, excluding any Non-Exchangeable Shares (the
"Stock Conversion Number"), shall be converted into the Stock Consideration and
the remaining outstanding shares of GCB Common Stock shall be converted into the
Cash Consideration. Shares of GCB Common Stock as to which a Cash Election
(including, pursuant to a Mixed Election) has been made are referred to herein
as "Cash Election Shares." Shares of GCB Common Stock as to which a Stock
Election has been made (including, pursuant to a Mixed Election) are referred to
as "Stock Election Shares." Shares of GCB Common Stock as to which no election
has been made (or as to which an Election Form is not returned properly
completed) are referred to herein as "Non-Election Shares." The aggregate number
of shares of GCB Common Stock with respect to which a Stock Election has been
made is referred to herein as the "Stock Election Number."
3.2.2. An election form and other appropriate and customary transmittal
materials (which shall specify that delivery shall be effected, and risk of loss
and title to the Certificates shall pass, only upon proper delivery of such
Certificates to the Exchange Agent), in such form as GCB and OFC shall mutually
agree ("Election Form"), shall be mailed no more than 40 business days and no
less than 20 business days prior to the anticipated Effective Time or on such
earlier date as OFC and GCB shall mutually agree (the "Mailing Date") to each
holder of record of GCB Common Stock as of five business days prior to the
Mailing Date (the "Election Form Record Date"). Each Election Form shall permit
such holder, subject to the allocation and election procedures set forth in this
Section 3.2, (i) to elect to receive the Cash Consideration for all of the
shares of GCB Common Stock held by such holder, in accordance with Section
3.1.3, (ii) to elect to receive the Stock Consideration for all of such shares,
in accordance with Section 3.1.3, (iii) to elect to receive the Stock
Consideration for a part of such holder's GCB Common Stock and the Cash
Consideration for the remaining part of such holder's GCB Common Stock, or (iv)
to indicate that such record holder has no preference as to the receipt of cash
or OFC Common Stock for such shares. A holder of record of shares of GCB Common
Stock who holds such shares as nominee, trustee or in another representative
capacity (a "Representative") may submit multiple Election Forms, provided that
each such Election Form covers all the shares of GCB Common Stock held by such
Representative for a particular beneficial owner. Any shares of GCB Common Stock
with respect to which the holder thereof shall not, as of the Election Deadline,
have made an election by submission to the Exchange Agent of an effective,
properly completed Election Form shall be deemed Non-Election Shares.
3.2.3. To be effective, a properly completed Election Form shall be
submitted to the Exchange Agent on or before 5:00 p.m., New Jersey time, on the
20th day following the Mailing Date (or such other time and date as OFC and GCB
may mutually agree) (the "Election Deadline"); provided, however, that the
Election Deadline may not occur on or after the Closing Date. GCB shall use its
reasonable best efforts to make available up to two separate Election Forms, or
such additional Election Forms as OFC may permit, to all persons who become
holders (or beneficial owners) of GCB Common Stock between the Election Form
Record Date and the close of business on the business day prior to the Election
Deadline. GCB shall provide to the Exchange Agent all information reasonably
necessary for it to perform as specified herein. An election shall have been
properly made only if the Exchange Agent shall have actually received a properly
completed and duly executed Election Form by the Election Deadline. An Election
Form shall be deemed properly completed only if accompanied by one or more
Certificates (or customary affidavits and indemnification regarding the loss or
destruction of such Certificates (including delivery by electronic book-entry
form) or the guaranteed delivery of such Certificates) representing all shares
of GCB Common Stock covered by such Election Form, together with duly executed
transmittal materials included with the Election Form. If an GCB shareholder
either (i) does not submit a properly completed Election Form in a timely
fashion or (ii) revokes its Election Form prior to the Election Deadline
(without later submitting a properly completed Election Form prior to the
Election Deadline), the shares of GCB Common Stock held by such shareholder
shall be designated as Non-Election Shares. Any Election Form may be revoked or
changed by the person submitting such Election Form to the Exchange Agent by
written notice to the Exchange Agent only if such notice of revocation or change
is actually received by the Exchange Agent at or prior to the Election Deadline.
OFC shall cause the Certificate or Certificates relating to any revoked Election
Form to be promptly returned without charge to the person submitting the
Election Form to the Exchange Agent. Subject to the terms of this Agreement and
of the Election Form, the Exchange Agent shall have discretion to determine when
any election, modification or revocation is received and whether any such
election, modification or revocation has been properly made. All elections shall
be revoked automatically if the Exchange Agent is notified in writing by OFC or
GCB, upon exercise by OFC or GCB of its respective or their mutual rights to
terminate this Agreement to the extent provided under Article XI, that this
Agreement has been terminated in accordance with Article XI and OFC shall cause
all Certificates to be promptly returned without charge to all persons
submitting Election Forms to the Exchange Agent.
3.2.4. If the aggregate number of shares of GCB Common Stock with respect
to which Stock Elections shall have been made (the "Stock Election Number")
exceeds the Stock Conversion Number, then all Cash Election Shares and all
Non-Election Shares of each holder thereof shall be converted into the right to
receive the Cash Consideration, and Stock Election Shares of each holder thereof
will be converted into the right to receive the Stock Consideration in respect
of that number of Stock Election Shares equal to the product obtained by
multiplying (x) the number of Stock Election Shares held by such holder by (y) a
fraction, the numerator of which is the Stock Conversion Number and the
denominator of which is the Stock Election Number, with the remaining number of
such holder's Stock Election Shares being converted into the right to receive
the Cash Consideration.
3.2.5. If the Stock Election Number is less than the Stock Conversion
Number (the amount by which the Stock Conversion Number exceeds the Stock
Election Number being referred to herein as the "Shortfall Number"), then all
Stock Election Shares shall be converted into the right to receive the Stock
Consideration and the Non-Election Shares and Cash Election Shares shall be
treated in the following manner:
(A) If the Shortfall Number is less than or equal to the number of
Non-Election Shares, then all Cash Election Shares shall be converted into the
right to receive the Cash Consideration and the Non-Election Shares of each
holder thereof shall convert into the right to receive the Stock Consideration
in respect of that number of Non-Election Shares equal to the product obtained
by multiplying (x) the number of Non-Election Shares held by such holder by (y)
a fraction, the numerator of which is the Shortfall Number and the denominator
of which is the total number of Non-Election Shares, with the remaining number
of such holder's Non-Election Shares being converted into the right to receive
the Cash Consideration; or
(B) If the Shortfall Number exceeds the number of Non-Election Shares,
then all Non-Election Shares shall be converted into the right to receive the
Stock Consideration and Cash Election Shares of each holder thereof shall
convert into the right to receive the Stock Consideration in respect of that
number of Cash Election Shares equal to the product obtained by multiplying (x)
the number of Cash Election Shares held by such holder by (y) a fraction, the
numerator of which is the amount by which (1) the Shortfall Number exceeds (2)
the total number of Non-Election Shares and the denominator of which is the
total number of Cash Election Shares, with the remaining number of such holder's
Cash Election Shares being converted into the right to receive the Cash
Consideration.
3.2.6. No Fractional Shares. Notwithstanding anything to the contrary
contained herein, no certificates or scrip representing fractional shares of OFC
Common Stock shall be issued upon the surrender for exchange of Certificates, no
dividend or distribution with respect to OFC Common Stock shall be payable on or
with respect to any fractional share interest, and such fractional share
interests shall not entitle the owner thereof to vote or to any other rights of
a shareholder of OFC. In lieu of the issuance of any such fractional share, OFC
shall pay to each former holder of GCB Common Stock who otherwise would be
entitled to receive a fractional share of OFC Common Stock, an amount in cash,
rounded to the nearest cent and without interest, equal to the product of (i)
the fraction of a share to which such holder would otherwise have been entitled
and (ii) the OFC Market Value. For purposes of determining any fractional share
interest, all shares of GCB Common Stock owned by a GCB shareholder shall be
combined so as to calculate the maximum number of whole shares of OFC Common
Stock issuable to such GCB shareholder.
3.3. Procedures for Exchange of GCB Common Stock.
3.3.1. OFC to Make Merger Consideration Available. After the Election
Deadline and no later than the Closing Date, OFC shall deposit, or shall cause
to be deposited, with the Exchange Agent for the benefit of the holders of GCB
Common Stock, for exchange in accordance with this Section 3.3, certificates
representing the shares of OFC Common Stock and an aggregate amount of cash
sufficient to pay the aggregate amount of cash payable pursuant to this Article
III (including any cash that may be payable in lieu of any fractional shares of
GCB Common Stock) (such cash and certificates for shares of OFC Common Stock,
together with any dividends or distributions with respect thereto, being
hereinafter referred to as the "Exchange Fund").
3.3.2. Exchange of Certificates. OFC shall take all steps necessary to
cause the Exchange Agent, within five (5) business days after the Effective
Time, to mail to each holder of a Certificate or Certificates (other than those
holders who submitted to the Exchange Agent all Certificates held by such holder
pursuant to a properly completed Election Form, which was not revoked), a form
letter of transmittal for return to the Exchange Agent and instructions for use
in effecting the surrender of the Certificates for the Merger Consideration and
cash in lieu of fractional shares, if any, into which the GCB Common Stock
represented by such Certificates shall have been converted as a result of the
Merger. The letter of transmittal 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. Upon proper surrender of a Certificate
for exchange and cancellation to the Exchange Agent, pursuant to a properly
completed Election Form or letter of transmittal, duly executed, the holder of
such Certificate shall be entitled to receive in exchange therefor, as
applicable, (i) a certificate representing that number of shares of OFC Common
Stock (if any) to which such former holder of GCB Common Stock shall have become
entitled pursuant to the provisions of Section 3.1 or 3.2 hereof, (ii) a check
representing that amount of cash (if any) to which such former holder of GCB
Common Stock shall have become entitled pursuant to the provisions of Section
3.1 or 3.2 hereof and (iii) a check representing the amount of cash (if any)
payable in lieu of fractional shares of OFC Common Stock, which such former
holder has the right to receive in respect of the Certificate surrendered
pursuant to the provisions of Section 3.2, and the Certificate so surrendered
shall forthwith be cancelled. No interest will be paid or accrued on the cash
payable in lieu of fractional shares. Certificates surrendered for exchange by
any person who is an "affiliate" of GCB for purposes of Rule 145(c) under the
Securities Act shall not be exchanged for certificates representing shares of
OFC Common Stock until OFC has received the written agreement of such person
contemplated by Section 8.4 hereof.
3.3.3. Rights of Certificate Holders after the Effective Time. The holder
of a Certificate that prior to the Merger represented issued and outstanding GCB
Common Stock shall have no rights, after the Effective Time, with respect to
such GCB Common Stock except to surrender the Certificate in exchange for the
Merger Consideration as provided in this Agreement. No dividends or other
distributions declared after the Effective Time with respect to OFC Common Stock
shall be paid to the holder of any unsurrendered Certificate until the holder
thereof shall surrender such Certificate in accordance with this Section 3.3.
After the surrender of a Certificate in accordance with this Section 3.3, the
record holder thereof shall be entitled to receive any such dividends or other
distributions, without any interest thereon, which theretofore had become
payable with respect to shares of OFC Common Stock represented by such
Certificate.
3.3.4. Surrender by Persons Other than Record Holders. If the Person
surrendering a Certificate and signing the accompanying letter of transmittal is
not the record holder thereof, then it shall be a condition of the payment of
the Merger Consideration that: (i) such Certificate is properly endorsed to such
Person or is accompanied by appropriate stock powers, in either case signed
exactly as the name of the record holder appears on such Certificate, and is
otherwise in proper form for transfer, or is accompanied by appropriate evidence
of the authority of the Person surrendering such Certificate and signing the
letter of transmittal to do so on behalf of the record holder; and (ii) the
person requesting such exchange shall pay to the Exchange Agent in advance any
transfer or other taxes required by reason of the payment to a person other than
the registered holder of the Certificate 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.
3.3.5. Closing of Transfer Books. From and after the Effective Time, there
shall be no transfers on the stock transfer books of GCB of the GCB Common Stock
that were outstanding immediately prior to the Effective Time. If, after the
Effective Time, Certificates representing such shares are presented for transfer
to the Exchange Agent, they shall be exchanged for the Merger Consideration and
canceled as provided in this Section 3.3.
3.3.6. Return of Exchange Fund. At any time following the six (6) month
period after the Effective Time, OFC shall be entitled to require the Exchange
Agent to deliver to it any portions of the Exchange Fund which had been made
available to the Exchange Agent and not disbursed to holders of Certificates
(including, without limitation, all interest and other income received by the
Exchange Agent in respect of all funds made available to it), and thereafter
such holders shall be entitled to look to OFC (subject to abandoned property,
escheat and other similar laws) with respect to any Merger Consideration that
may be payable upon due surrender of the Certificates held by them.
Notwithstanding the foregoing, neither OFC nor the Exchange Agent shall be
liable to any holder of a Certificate for any Merger Consideration delivered in
respect of such Certificate to a public official pursuant to any abandoned
property, escheat or other similar law.
3.3.7. Lost, Stolen or Destroyed Certificates. In the event any Certificate
shall have been lost, stolen or destroyed, upon the making of an affidavit of
that fact by the person claiming such Certificate to be lost, stolen or
destroyed and, if required by OFC, the posting by such person of a bond in such
amount as OFC may reasonably direct as indemnity against any claim that may be
made against it with respect to such Certificate, the Exchange Agent will issue
in exchange for such lost, stolen or destroyed Certificate the Merger
Consideration deliverable in respect thereof.
3.3.8. Withholding. OFC or the Exchange Agent will be entitled to deduct
and withhold from the consideration otherwise payable pursuant to this Agreement
or the transactions contemplated hereby to any holder of GCB Common Stock such
amounts as OFC (or any Affiliate thereof) or the Exchange Agent are required to
deduct and withhold with respect to the making of such payment under the Code,
or any applicable provision of U.S. federal, state, local or non-U.S. tax law.
To the extent that such amounts are properly withheld by OFC or the Exchange
Agent, such withheld amounts will be treated for all purposes of this Agreement
as having been paid to the holder of the GCB Common Stock in respect of whom
such deduction and withholding were made by OFC or the Exchange Agent.
3.3.9. Treatment of GCB Options. GCB DISCLOSURE SCHEDULE 4.3.1 sets forth
all of the outstanding GCB Options as of the date hereof. Prior to and effective
as of the Effective Time, GCB shall take all actions necessary to terminate the
GCB Stock Benefit Plans. Holders of all unexercised GCB Options as of the
Effective Time will be entitled to receive, in cancellation of their GCB
Options, a cash payment from GCB immediately prior to the Effective Time, in an
amount equal to the product of (x) the number of shares of GCB Common Stock
provided for in such GCB Option (whether vested or unvested) and (y) the excess,
if any, of $21.40 over the exercise price per share provided for in such GCB
Option (the "Cash Option Payment"), which cash payment shall be treated as
compensation and shall be net of any applicable federal or state withholding
tax. At the time of receipt of such cash payment, each holder of a GCB Option
shall acknowledge in writing that such cash payment is in full satisfaction of
such holder's rights under such GCB Option.
3.3.10. Reservation of Shares. OFC shall reserve for issuance a sufficient
number of shares of the OFC Common Stock for the purpose of issuing shares of
OFC Common Stock to the GCB shareholders in accordance with this Article III.
3.3.11. Book Entry. Notwithstanding any other provision of this Agreement,
the Election Form and the letter of transmittal may, at the option of OFC,
provide for the ability of a holder of one or more Certificates to elect that
the OFC Common Stock be received in exchange for the GCB Common Stock formerly
represented by such surrendered Certificates be issued in book-entry form.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF GCB
GCB represents and warrants to OFC that the statements contained in this
Article IV are correct and complete as of the date of this Agreement and will be
correct and complete as of the Closing Date (as though made then and as though
the Closing Date were substituted for the date of this Agreement throughout this
Article IV), subject to the standard set forth in Section 4.1 and except as set
forth in the GCB DISCLOSURE SCHEDULE delivered by GCB to OFC on the date hereof,
and except as to any representation or warranty which specifically relates to an
earlier date, which only need be so correct as of such earlier date. GCB has
made a good faith effort to ensure that the disclosure on each schedule of the
GCB DISCLOSURE SCHEDULE corresponds to the section referenced herein. However,
for purposes of the GCB DISCLOSURE SCHEDULE, any item disclosed on any schedule
therein is deemed to be fully disclosed with respect to all schedules under
which such item may be relevant as and to the extent that it is reasonably clear
on the face of such schedule that such item applies to such other schedule.
References to the Knowledge of GCB shall include the Knowledge of GC Bank.
4.1. Standard.
No representation or warranty of GCB contained in this Article IV shall be
deemed untrue or incorrect, and GCB shall not be deemed to have breached a
representation or warranty, as a consequence of the existence of any fact,
circumstance or event unless such fact, circumstance or event, individually or
taken together with all other facts, circumstances or events inconsistent with
any paragraph of Article IV, has had or is reasonably expected to have a
Material Adverse Effect, disregarding for these purposes (x) any qualification
or exception for, or reference to, materiality in any such representation or
warranty and (y) any use of the terms "material", "materially", "in all material
respects", "Material Adverse Effect" or similar terms or phrases in any such
representation or warranty. The foregoing standard shall not apply to
representations and warranties contained in Sections 4.2 (other than the last
sentence of Sections 4.2.1 and 4.2.2), and Sections 4.2.4, 4.2.5, 4.3, 4.4, 4.8,
4.13.5, 4.13.8, 4.13.10 and 4.13.11, which shall be deemed untrue, incorrect and
breached if they are not true and correct in all material respects based on the
qualifications and standards therein contained. Provided further, that as to the
representations contained in Sections 4.13.5, 4.13.8, 4.13.10, 4.13.11, if there
is a breach that relates to an undisclosed payment, expense accrual or cost in
excess of $300,000 (either individually or in the aggregate), such breach shall
be considered material.
4.2. Organization.
4.2.1. GCB is a corporation duly organized, validly existing and in good
standing under the laws of the State of New Jersey, and is duly registered as a
bank holding company under the BHCA. GCB has full corporate power and authority
to carry on its business as now conducted and is duly licensed or qualified to
do business in the states of the United States and foreign jurisdictions where
its ownership or leasing of property or the conduct of its business requires
such qualification. 4.2.2. GC Bank is a New Jersey chartered bank duly
organized, validly existing and in good standing (to the extent required) under
the laws of the State of New Jersey. The deposits of GC Bank are insured by the
FDIC to the fullest extent permitted by law, and all premiums and assessments
required to be paid in connection therewith have been paid by GC Bank when due.
GC Bank is a member in good standing of the FHLB and owns the requisite amount
of stock therein.
4.2.3. GCB DISCLOSURE SCHEDULE 4.2.3 sets forth each GCB Subsidiary. Each
GCB Subsidiary is a corporation or limited liability company duly organized,
validly existing and in good standing under the laws of its jurisdiction of
incorporation or organization.
4.2.4. The respective minute books of GCB, GC Bank and each other GCB
Subsidiary accurately records, in all material respects, all material corporate
actions of their respective shareholders and boards of directors (including
committees).
4.2.5. Prior to the date of this Agreement, GCB has made available to OFC
true and correct copies of the certificate of incorporation or charter and
bylaws of GCB, GC Bank and each other GCB Subsidiary.
4.3. Capitalization.
4.3.1. The authorized capital stock of GCB consists of 20,000,000 shares of
common stock, $0.50 par value per share, of which, as of the date hereof,
8,712,243.6460 shares are outstanding, validly issued, fully paid and
nonassessable and free of preemptive rights, and 1,000,000 shares of preferred
stock, without par value, no shares of which are outstanding. There are no
shares of GCB Common Stock held by GCB as treasury stock. Neither GCB nor any
GCB Subsidiary has or is bound by any Rights of any character relating to the
purchase, sale or issuance or voting of, or right to receive dividends or other
distributions on any shares of GCB Common Stock, or any other security of GCB or
a GCB Subsidiary or any securities representing the right to vote, purchase or
otherwise receive any shares of GCB Common Stock or any other security of GCB or
any GCB Subsidiary, other than (i) shares issuable under the GCB Stock Benefit
Plans, (ii) capital securities issued by GCB Capital Trust III (the "Trust");
(iii) debentures issued by GCB to the Trust; (iv) the guarantee issued by GCB to
the holders of the capital securities issued by the Trust; and the (v) the GCB
DRIP. GCB DISCLOSURE SCHEDULE 4.3.1 sets forth the name of each holder of
options to purchase GCB Common Stock, the number of shares each such individual
may acquire pursuant to the exercise of such options, the grant and vesting
dates, and the exercise price relating to the options held, as well as the names
of each holder of an outstanding restricted stock award under the GCB Stock
Benefit Plans, the number of shares subject to each award, the grant and vesting
date thereof.
4.3.2. GCB owns all of the capital stock of GC Bank, free and clear of any
lien or encumbrance. Except for the GCB Subsidiaries, and as set forth on GCB
DISCLOSURE SCHEDULE 4.3.2, GCB does not possess, directly or indirectly, any
material equity interest in any corporate entity, except for equity interests
held in the investment portfolios of GCB Subsidiaries, equity interests held by
GCB Subsidiaries in a fiduciary capacity, and equity interests held in
connection with the lending activities of GCB Subsidiaries, including stock in
the FHLB. Either GCB or GC Bank owns all of the outstanding shares of capital
stock of each GCB Subsidiary free and clear of all liens, security interests,
pledges, charges, encumbrances, agreements and restrictions of any kind or
nature, except that, in the case of the Trust, GCB owns 100% of the common
securities and less than 100% of the preferred securities.
4.3.3. To GCB's Knowledge, except as set forth in the GCB DISCLOSURE
SCHEDULE 4.3.3, no Person or "group" (as that term is used in Section 13(d)(3)
of the Exchange Act), is the beneficial owner (as defined in Section 13(d) of
the Exchange Act) of 5% or more of the outstanding shares of GCB Common Stock.
4.4. Authority; No Violation.
4.4.1. GCB has full corporate power and authority to execute and deliver
this Agreement and, subject to the receipt of the Regulatory Approvals and the
approval of this Agreement by GCB's and OFC's shareholders, to consummate the
transactions contemplated hereby. The execution and delivery of this Agreement
by GCB and the completion by GCB of the transactions contemplated hereby,
including the Merger and the Bank Merger, have been duly and validly approved by
the Board of Directors of GCB, and no other corporate proceedings on the part of
GCB, except for the approval of the GCB shareholders, is necessary to complete
the transactions contemplated hereby, including the Merger. This Agreement has
been duly and validly executed and delivered by GCB, and subject to approval by
the shareholders of GCB and receipt of the Regulatory Approvals and due and
valid execution and delivery of this Agreement by OFC, constitutes the valid and
binding obligation of GCB, enforceable against GCB in accordance with its terms,
subject to applicable bankruptcy, insolvency and similar laws affecting
creditors' rights generally, and subject, as to enforceability, to general
principles of equity.
4.4.2. Subject to receipt of Regulatory Approvals and GCB's and OFC's
compliance with any conditions contained therein, and to the receipt of the
approval of the shareholders of GCB, (A) the execution and delivery of this
Agreement by GCB, (B) the consummation of the transactions contemplated hereby,
and (C) compliance by GCB with any of the terms or provisions hereof will not
(i) conflict with or result in a breach of any provision of the certificate of
incorporation or bylaws of GCB or any GCB Subsidiary or the charter and bylaws
of GC Bank; (ii) violate any statute, code, ordinance, rule, regulation,
judgment, order, writ, decree or injunction applicable to GCB or any GCB
Subsidiary or any of their respective properties or assets; or (iii) except as
set forth on GCB DISCLOSURE SCHEDULE 4.4.2, 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 a right
of termination or acceleration or the creation of any lien, security interest,
charge or other encumbrance upon any of the properties or assets of GCB or GC
Bank under any of the terms, conditions or provisions of any note, bond,
mortgage, indenture, deed of trust, license, lease, agreement or other
investment or obligation to which GCB or GC Bank is a party, or by which they or
any of their respective properties or assets may be bound or affected, except
for such violations, conflicts, breaches or defaults under clause (ii) or (iii)
hereof which, either individually or in the aggregate, will not have a Material
Adverse Effect on GCB.
4.5. Consents.
Except for (a) filings with Bank Regulators, the receipt of the Regulatory
Approvals, and compliance with any conditions contained therein, including the
filing of Articles of Combination with the OTS, (b) the filing of the
Certificate of Merger with the Secretary of State of the State of New Jersey,
(c) the filing with the SEC of (i) the Merger Registration Statement and (ii)
such reports under Sections 13(a), 13(d), 13(g) and 16(a) of the Exchange Act as
may be required in connection with this Agreement and the transactions
contemplated hereby and the obtaining from the SEC of such orders as may be
required in connection therewith, (d) approval of the listing of OFC Common
Stock to be issued in the Merger on the Nasdaq, (e) such filings and approvals
as are required to be made or obtained under the securities or "Blue Sky" laws
of various states in connection with the issuance of the shares of OFC Common
Stock pursuant to this Agreement, and (f) the approval of this Agreement by the
requisite vote of the shareholders of GCB, no consents, waivers or approvals of,
or filings or registrations with, any Governmental Entity are necessary, and, to
GCB's Knowledge, except as set forth on GCB DISCLOSURE SCHEDULE 4.5, no
consents, waivers or approvals of, or filings or registrations with, any other
third parties are necessary, in connection with (x) the execution and delivery
of this Agreement by GCB, and (y) the completion of the Merger and the Bank
Merger. GCB has no reason to believe that (i) any Regulatory Approvals or other
required consents or approvals will not be received, or that (ii) any public
body or authority, the consent or approval of which is not required or to which
a filing is not required, will object to the completion of the transactions
contemplated by this Agreement.
4.6. Financial Statements.
4.6.1. GCB has previously made available to OFC the GCB Regulatory Reports.
The GCB Regulatory Reports have been prepared in all material respects in
accordance with applicable regulatory accounting principles and practices
throughout the periods covered by such statements.
4.6.2. GCB has previously made available to OFC the GCB Financial
Statements. The GCB Financial Statements have been prepared in accordance with
GAAP, and (including the related notes where applicable) fairly present in each
case in all material respects (subject in the case of the unaudited interim
statements to normal year-end adjustments), the consolidated financial position,
results of operations and cash flows of GCB and the GCB Subsidiaries on a
consolidated basis as of and for the respective periods ending on the dates
thereof, in accordance with GAAP during the periods involved, except as
indicated in the notes thereto, or in the case of unaudited statements, as
permitted by Form 10-Q.
4.6.3. At the date of each balance sheet included in the GCB Financial
Statements or the GCB Regulatory Reports, neither GCB nor GC Bank, as
applicable, had any liabilities, obligations or loss contingencies of any nature
(whether absolute, accrued, contingent or otherwise) of a type required to be
reflected in such GCB Financial Statements or GCB Regulatory Reports or in the
footnotes thereto which are not fully reflected or reserved against therein or
fully disclosed in a footnote thereto, except for liabilities, obligations and
loss contingencies which are not material individually or in the aggregate or
which are incurred in the ordinary course of business, consistent with past
practice, and except for liabilities, obligations and loss contingencies which
are within the subject matter of a specific representation and warranty herein
and subject, in the case of any unaudited statements, to normal, recurring audit
adjustments and the absence of footnotes.
4.6.4. The records, systems, controls, data and information of GCB and its
Subsidiaries are recorded, stored, maintained and operated under means
(including any electronic, mechanical or photographic process, whether
computerized or not) that are under the exclusive ownership and direct control
of GCB or its Subsidiaries or accountants (including all means of access thereto
and therefrom), except for any non-exclusive ownership and non-direct control
that would not reasonably be expected to have a material adverse effect on the
system of internal accounting controls described below in this Section 4.6.4.
GCB (x) has implemented and maintains a system of internal control over
financial reporting (as required by Rule 13a-15(a) of the Exchange Act) that is
designed to provide reasonable assurances regarding the reliability of financial
reporting and the preparation of its financial statements for external purposes
in accordance with GAAP, (y) has implemented and maintains disclosure controls
and procedures (as defined in Rule 13a-15(e) of the Exchange Act) to ensure that
material information relating to GCB, including its consolidated Subsidiaries,
is made known to the chief executive officer and the chief financial officer of
GCB by others within those entities, and (z) has disclosed, based on its most
recent evaluation prior to the date hereof, to GCB's outside auditors and the
audit committee of GCB's Board of Directors (i) any significant deficiencies and
material weaknesses in the design or operation of internal control over
financial reporting (as defined in Rule 13a-15(f) of the Exchange Act) which are
reasonably likely to adversely affect GCB's ability to record, process,
summarize and report financial information and (ii) any fraud, whether or not
material, that involves management or other employees who have a significant
role in GCB's internal control over financial reporting. These disclosures (if
any) were made in writing by management to GCB's auditors and audit committee
and a copy has previously been made available to OFC. As of the date hereof, to
the knowledge of GCB, its chief executive officer and chief financial officer
will be able to give the certifications required pursuant to the rules and
regulations adopted pursuant to Section 302 of the Xxxxxxxx-Xxxxx Act, without
qualification, when next due.
4.6.5. Since December 31, 2003, (i) neither GCB nor any of its Subsidiaries
nor, to the Knowledge of GCB, any director, officer, employee, auditor,
accountant or representative of GCB or any of its Subsidiaries has received or
otherwise had or obtained knowledge of any material complaint, allegation,
assertion or claim, whether written or oral, regarding the accounting or
auditing practices, procedures, methodologies or methods of GCB or any of its
Subsidiaries or their respective internal accounting controls, including any
material complaint, allegation, assertion or claim that GCB or any of its
Subsidiaries has engaged in questionable accounting or auditing practices, and
(ii) no attorney representing GCB or any of its Subsidiaries, has reported
evidence of a material violation of Securities Laws, breach of fiduciary duty or
similar violation by GCB or any of its officers, directors, employees or agents
to the Board of Directors of GCB or any committee thereof or to any director or
officer of GCB.
4.7. Taxes.
GCB and the GCB Subsidiaries that are at least 80 percent owned by GCB are
members of the same affiliated group within the meaning of Code Section 1504(a).
GCB has duly filed all federal, state and material local tax returns required to
be filed by or with respect to GCB and every GCB Subsidiary on or prior to the
Closing Date, taking into account any extensions (all such returns, to GCB's
Knowledge, being accurate and correct in all material respects) and has duly
paid or made provisions for the payment of all material federal, state and local
taxes which have been incurred by or are due or claimed to be due from GCB and
any GCB Subsidiary by any taxing authority or pursuant to any written tax
sharing agreement on or prior to the Closing Date other than taxes or other
charges which (i) are not delinquent, (ii) are being contested in good faith, or
(iii) have not yet been fully determined. Except as set forth in GCB DISCLOSURE
SCHEDULE 4.7, as of the date of this Agreement, GCB has received no written
notice of, and to GCB's Knowledge there is no audit examination, deficiency
assessment, tax investigation or refund litigation with respect to any taxes of
GCB or any of its Subsidiaries, and no claim has been made by any authority in a
jurisdiction where GCB or any of its Subsidiaries do not file tax returns that
GCB or any such Subsidiary is subject to taxation in that jurisdiction. Except
as set forth in GCB DISCLOSURE SCHEDULE 4.7, GCB and its Subsidiaries have not
executed an extension or waiver of any statute of limitations on the assessment
or collection of any material tax due that is currently in effect. GCB and each
of its Subsidiaries has withheld and paid all taxes required to have been
withheld and paid in connection with amounts paid or owing to any employee,
independent contractor, creditor, shareholder or other third party, and GCB and
each of its Subsidiaries, to GCB's Knowledge, has timely complied with all
applicable information reporting requirements under Part III, Subchapter A of
Chapter 61 of the Code and similar applicable state and local information
reporting requirements.
4.8. No Material Adverse Effect.
GCB has not suffered any Material Adverse Effect since December 31, 2006
and no event has occurred or circumstance arisen since that date which, in the
aggregate, has had or is reasonably likely to have a Material Adverse Effect on
GCB.
4.9. Material Contracts; Leases; Defaults.
4.9.1. Except as set forth in GCB DISCLOSURE SCHEDULE 4.9.1, neither GCB
nor any GCB Subsidiary is a party to or subject to: (i) any employment,
consulting or severance contract or material arrangement with any past or
present officer, director or employee of GCB or any GCB Subsidiary, except for
"at will" arrangements; (ii) any plan, material arrangement or contract
providing for bonuses, pensions, options, deferred compensation, retirement
payments, profit sharing or similar material arrangements for or with any past
or present officers, directors or employees of GCB or any GCB Subsidiary; (iii)
any collective bargaining agreement with any labor union relating to employees
of GCB or any GCB Subsidiary; (iv) any agreement which by its terms limits the
payment of dividends by GCB or any GCB Subsidiary; (v) any instrument evidencing
or related to material indebtedness for borrowed money whether directly or
indirectly, by way of purchase money obligation, conditional sale, lease
purchase, guaranty or otherwise, in respect of which GCB or any GCB Subsidiary
is an obligor to any person, which instrument evidences or relates to
indebtedness other than deposits, repurchase agreements, FHLB advances, bankers'
acceptances, and "treasury tax and loan" accounts and transactions in "federal
funds" in each case established in the ordinary course of business consistent
with past practice, or which contains financial covenants or other restrictions
(other than those relating to the payment of principal and interest when due)
which would be applicable on or after the Closing Date to OFC or any OFC
Subsidiary; (vi) any other agreement, written or oral, that obligates GCB or any
GCB Subsidiary for the payment of more than $25,000 annually or for the payment
of more than $50,000 over its remaining term, which is not terminable without
cause on 60 days' or less notice without penalty or payment, or (vii) any
agreement (other than this Agreement), contract, arrangement, commitment or
understanding (whether written or oral) that restricts or limits in any material
way the conduct of business by GCB or any GCB Subsidiary (it being understood
that any non-compete or similar provision shall be deemed material).
4.9.2. Each real estate lease that requires the consent of the lessor or
its agent resulting from the Merger or the Bank Merger by virtue of the terms of
any such lease, is listed in GCB DISCLOSURE SCHEDULE 4.9.2 identifying the
section of the lease that contains such prohibition or restriction. Subject to
any consents that may be required as a result of the transactions contemplated
by this Agreement, to its Knowledge, neither GCB nor any GCB Subsidiary is in
default in any material respect under any material contract, agreement,
commitment, arrangement, lease, insurance policy or other instrument to which it
is a party, by which its assets, business, or operations may be bound or
affected, or under which it or its assets, business, or operations receive
benefits, and there has not occurred any event that, with the lapse of time or
the giving of notice or both, would constitute such a default.
4.9.3. True and correct copies of agreements, contracts, arrangements and
instruments referred to in Section 4.9.1 and 4.9.2 have been made available to
OFC on or before the date hereof, and are in full force and effect on the date
hereof and neither GCB nor any GCB Subsidiary (nor, to the Knowledge of GCB, any
other party to any such contract, arrangement or instrument) has materially
breached any provision of, or is in default in any respect under any term of,
any such contract, arrangement or instrument, except as set forth in GCB
DISCLOSURE SCHEDULE 4.9.3. Except as listed on GCB DISCLOSURE SCHEDULE 4.9.3, no
party to any material contract, arrangement or instrument will have the right to
terminate any or all of the provisions of any such contract, arrangement or
instrument as a result of the execution of, and the consummation of the
transactions contemplated by, this Agreement. Except as set forth in GCB
DISCLOSURE SCHEDULE 4.9.3, no plan, contract, employment agreement, termination
agreement, or similar agreement or arrangement to which GCB or any GCB
Subsidiary is a party or under which GCB or any GCB Subsidiary may be liable
contains provisions which permit an employee or independent contractor to
terminate it without cause and continue to accrue future benefits thereunder.
Except as set forth in GCB DISCLOSURE SCHEDULE 4.9.3, no such agreement, plan,
contract, or arrangement (x) provides for acceleration in the vesting of
benefits or payments due thereunder upon the occurrence of a change in ownership
or control of GCB or any GCB Subsidiary or upon the occurrence of a subsequent
event; or (y) requires GCB or any GCB Subsidiary to provide a benefit in the
form of GCB Common Stock or determined by reference to the value of GCB Common
Stock.
4.9.4. Since December 31, 2006, through and including the date of this
Agreement, except as set forth in GCB DISCLOSURE SCHEDULE 4.9.4, neither GCB nor
any GCB Subsidiary has (i) except for (A) normal increases for employees (other
than officers and directors subject to the reporting requirements of Section
16(a) of the Exchange Act) made in the ordinary course of business consistent
with past practice, or (B) as required by applicable law, increased the wages,
salaries, compensation, pension, or other fringe benefits or perquisites payable
to any executive officer, employee, or director from the amount thereof in
effect as of December 31, 2006 (which amounts have been previously made
available to OFC), granted any severance or termination pay, entered into any
contract to make or grant any severance or termination pay (except as required
under the terms of agreements or severance plans listed on GCB DISCLOSURE
SCHEDULE 4.13.1, as in effect as of the date hereof), or paid any bonus other
than the customary year-end bonuses in amounts consistent with past practice,
(ii) granted any options to purchase shares of GCB Common Stock, or any right to
acquire any shares of its capital stock to any executive officer, director or
employee other than grants to employees (other than officers subject to the
reporting requirements of Section 16(a) of the Exchange Act) made in the
ordinary course of business consistent with past practice under GCB Stock
Benefit Plans, (iii) increased or established any bonus, insurance, severance,
deferred compensation, pension, retirement, profit sharing, stock option
(including, without limitation, the granting of stock options, stock
appreciation rights, performance awards, or restricted stock awards), stock
purchase or other employee benefit plan, (iv) made any material election for
federal or state income tax purposes, (v) made any material change in the credit
policies or procedures of GCB or any of its Subsidiaries, the effect of which
was or is to make any such policy or procedure less restrictive in any material
respect, (vi) made any material acquisition or disposition of any assets or
properties, or any contract for any such acquisition or disposition entered into
other than loans and loan commitments, (vii) entered into any lease of real or
personal property requiring annual payments in excess of $50,000, other than in
connection with foreclosed property or in the ordinary course of business
consistent with past practice, (viii) changed any accounting methods, principles
or practices of GCB or its Subsidiaries affecting its assets, liabilities or
businesses, including any reserving, renewal or residual method, practice or
policy or (ix) suffered any strike, work stoppage, slow-down, or other labor
disturbance.
4.10. Ownership of Property; Insurance Coverage.
4.10.1. Except as set forth in GCB DISCLOSURE SCHEDULE 4.10, GCB and each
GCB Subsidiary has good and, as to real property, marketable title to all
material assets and properties owned by GCB or each GCB Subsidiary in the
conduct of its businesses, whether such assets and properties are real or
personal, tangible or intangible, including assets and property reflected in the
balance sheets contained in the GCB Regulatory Reports and in the GCB Financial
Statements or acquired subsequent thereto (except to the extent that such assets
and properties have been disposed of in the ordinary course of business, since
the date of such balance sheets), subject to no material encumbrances, liens,
mortgages, security interests or pledges, except (i) those items which secure
liabilities for public or statutory obligations or any discount with, borrowing
from or other obligations to FHLB, inter-bank credit facilities, or any
transaction by an GCB Subsidiary acting in a fiduciary capacity, (ii) statutory
liens for amounts not yet delinquent or which are being contested in good faith,
(iii) non-monetary liens affecting real property which do not materially and
adversely affect the value or use of such real property, and (iv) those
described and reflected in the GCB Financial Statements. GCB and the GCB
Subsidiaries, as lessee, have the right under valid and existing leases of real
and personal properties used by GCB and its Subsidiaries in the conduct of their
businesses to occupy or use all such properties as presently occupied and used
by each of them.
4.10.2. With respect to all material agreements pursuant to which GCB or
any GCB Subsidiary has purchased securities subject to an agreement to resell,
if any, GCB or such GCB Subsidiary, as the case may be, has a lien or security
interest (which to GCB's Knowledge is a valid, perfected first lien) in the
securities or other collateral securing the repurchase agreement, and the value
of such collateral equals or exceeds the amount of the debt secured thereby.
4.10.3. GCB and each GCB Subsidiary currently maintain insurance considered
by each of them to be reasonable for their respective operations. Neither GCB
nor any GCB Subsidiary has received notice from any insurance carrier during the
past two years that (i) such insurance will be canceled or that coverage
thereunder will be materially reduced or eliminated, or (ii) premium costs
(other than with respect to health or disability insurance) with respect to such
policies of insurance will be substantially increased. There are presently no
material claims pending under such policies of insurance and no notices have
been given by GCB or any GCB Subsidiary under such policies (other than with
respect to health, disability or worker's compensation insurance). All such
insurance is valid and enforceable and in full force and effect in all material
respects, and within the last two years GCB and each GCB Subsidiary has received
each type of insurance coverage for which it has applied and during such periods
has not been denied indemnification for any material claims submitted under any
of its insurance policies. GCB DISCLOSURE SCHEDULE 4.10.3 identifies all
material policies of insurance maintained by GCB and each GCB Subsidiary.
4.11. Legal Proceedings.
Except as set forth in GCB DISCLOSURE SCHEDULE 4.11, neither GCB nor any
GCB Subsidiary is a party to any, and there are no pending or, to GCB's
Knowledge, threatened legal, administrative, arbitration or other proceedings,
claims (whether asserted or unasserted), actions or governmental investigations
or inquiries of any nature (i) against GCB or any GCB Subsidiary, (ii) to which
GCB or any GCB Subsidiary's assets are or may be subject, (iii) challenging the
validity or propriety of any of the transactions contemplated by this Agreement,
or (iv) which could adversely affect the ability of GCB or GC Bank to perform
under this Agreement, except, in each of (i) through (iv) above, for any
proceeding, claim, action, investigation or inquiry which, if adversely
determined, individually or in the aggregate, would not be reasonably expected
to have a Material Adverse Effect on GCB.
4.12. Compliance With Applicable Law.
4.12.1. To GCB's Knowledge, and except as set forth in GCB DISCLOSURE
SCHEDULE 4.12.1, each of GCB and each GCB Subsidiary is in compliance in all
material respects with all applicable federal, state, local and foreign
statutes, laws, regulations, ordinances, rules, judgments, orders or decrees
applicable to it, its properties, assets and deposits, its business, and its
conduct of business and its relationship with its employees, including, without
limitation, the USA Patriot Act, the Equal Credit Opportunity Act, the Fair
Housing Act, the Community Reinvestment Act of 1977, the Home Mortgage
Disclosure Act, and all other applicable fair lending laws and other laws
relating to discriminatory business practices and neither GCB nor any GCB
Subsidiary has received, since December 31, 2003, any written notice to the
contrary. The Board of Directors of GC Bank has adopted and GC Bank has
implemented an anti-money laundering program that contains adequate and
appropriate customer identification verification procedures that has not been
deemed ineffective by any Governmental Authority and that meets the requirements
of Sections 352 and 326 of the USA Patriot Act and the regulations thereunder.
4.12.2. Each of GCB and each GCB Subsidiary has all material permits,
licenses, authorizations, orders and approvals of, and has made all filings,
applications and registrations with, all Governmental Entities and Bank
Regulators that are required in order to permit it to own or lease its
properties and to conduct its business as presently conducted; all such permits,
licenses, certificates of authority, orders and approvals are in full force and
effect and, to the Knowledge of GCB, no suspension or cancellation of any such
permit, license, certificate, order or approval is threatened or will result
from the consummation of the transactions contemplated by this Agreement,
subject to obtaining Regulatory Approvals.
4.12.3. Since December 31, 2003, neither GCB nor any GCB Subsidiary has
received any written notification or, to the Knowledge of GCB, any other
communication from any Bank Regulator (i) asserting that GCB or any GCB
Subsidiary is not in material compliance with any of the statutes, regulations
or ordinances which such Bank Regulator enforces; (ii) threatening to revoke any
license, franchise, permit or governmental authorization which is material to
GCB or any GCB Subsidiary; (iii) requiring, or threatening to require, GCB or
any GCB Subsidiary, or indicating that GCB or any GCB Subsidiary may be
required, to enter into a cease and desist order, agreement or memorandum of
understanding or any other agreement with any federal or state governmental
agency or authority which is charged with the supervision or regulation of banks
or engages in the insurance of bank deposits restricting or limiting, or
purporting to restrict or limit, in any material respect the operations of GCB
or any GCB Subsidiary, including without limitation any restriction on the
payment of dividends; or (iv) directing, restricting or limiting, or purporting
to direct, restrict or limit, in any material fashion the operations of GCB or
any GCB Subsidiary, including without limitation any restriction on the payment
of dividends (any such notice, communication, memorandum, agreement or order
described in this sentence is hereinafter referred to as a "GCB Regulatory
Agreement"). Neither GCB nor GC Bank nor any other GCB Subsidiary has consented
to or entered into any GCB Regulatory Agreement that is currently in effect or
that was in effect since December 31, 2003. The most recent regulatory rating
given to GC Bank as to compliance with the Community Reinvestment Act ("CRA") is
satisfactory or better.
4.12.4. Since the enactment of the Xxxxxxxx-Xxxxx Act, GCB has been and is
in compliance in all material respects with (i) the applicable provisions of the
Xxxxxxxx-Xxxxx Act and (ii) the applicable listing and corporate governance
rules and regulations of the Nasdaq. GCB DISCLOSURE SCHEDULE 4.12.4 sets forth,
as of August 31, 2007, a schedule of all executive officers and directors of GCB
who have outstanding loans from GCB or GC Bank, and there has been no default
on, or forgiveness or waiver of, in whole or in part, any such loan during the
two years immediately preceding the date hereof.
4.13. Employee Benefit Plans.
4.13.1. GCB DISCLOSURE SCHEDULE 4.13.1 includes a descriptive list of all
existing bonus, incentive, deferred compensation, pension, retirement,
profit-sharing, thrift, savings, employee stock ownership, stock bonus, stock
purchase, restricted stock, stock option, stock appreciation, phantom stock,
severance, welfare benefit plans (including paid time off policies and other
benefit policies and procedures), fringe benefit plans, employment, severance
and change in control agreements and all other material benefit practices,
policies and arrangements maintained by GCB or any GCB Subsidiary in which any
employee or former employee, consultant or former consultant or director or
former director of GCB or any GCB Subsidiary participates or to which any such
employee, consultant or director is a party or is otherwise entitled to receive
benefits (the "GCB Compensation and Benefit Plans"). Except as set forth in GCB
DISCLOSURE SCHEDULE 4.13.1, neither GCB nor any of its Subsidiaries has any
commitment to create any additional GCB Compensation and Benefit Plan or to
materially modify, change or renew any existing GCB Compensation and Benefit
Plan (any modification or change that increases the cost of such plans would be
deemed material), except as required to maintain the qualified status thereof,
GCB has made available to OFC true and correct copies of the GCB Compensation
and Benefit Plans.
4.13.2. To the Knowledge of GCB and except as disclosed in GCB DISCLOSURE
SCHEDULE 4.13.2, each GCB Compensation and Benefit Plan has been operated and
administered in all material respects in accordance with its terms and with
applicable law, including, but not limited to, ERISA, the Code, the Securities
Act, the Exchange Act, the Age Discrimination in Employment Act, COBRA, the
Health Insurance Portability and Accountability Act ("HIPAA") and any
regulations or rules promulgated thereunder, and all material filings,
disclosures and notices required by ERISA, the Code, the Securities Act, the
Exchange Act, the Age Discrimination in Employment Act, COBRA and HIPAA and any
other applicable law have been timely made or any interest, fines, penalties or
other impositions for late filings have been paid in full. Each GCB Compensation
and Benefit Plan which is an "employee pension benefit plan" within the meaning
of Section 3(2) of ERISA (a "Pension Plan") and which is intended to be
qualified under Section 401(a) of the Code, is subject of a "Favorable Letter"
within the meaning of Rev. Proc. 2006-27 Section 5.01, and GCB is not aware of
any circumstances which are reasonably likely to result in revocation of any
such Favorable Letter. There is no material pending or, to the Knowledge of GCB,
threatened action, suit or claim relating to any of the GCB Compensation and
Benefit Plans (other than routine claims for benefits). Neither GCB nor any GCB
Subsidiary has engaged in a transaction, or omitted to take any action, with
respect to any GCB Compensation and Benefit Plan that would reasonably be
expected to subject GCB or any GCB Subsidiary to an unpaid tax or penalty
imposed by either Section 4975 of the Code or Section 502 of ERISA.
4.13.3. Except as set forth in GCB DISCLOSURE SCHEDULE 4.13.3, no liability
to any Governmental Entity, other than PBGC premiums arising in the ordinary
course of business, has been or is expected by GCB or any of its Subsidiaries to
be incurred with respect to any GCB Compensation and Benefit Plan which is a
defined benefit plan subject to Title IV of ERISA ("Defined Benefit Plan"), or
with respect to any "single-employer plan" (as defined in Section 4001(a) of
ERISA) currently or formerly maintained by GCB or any entity which is considered
one employer with GCB under Section 4001(b)(1) of ERISA or Section 414 of the
Code (an "ERISA Affiliate") (such plan hereinafter referred to as an "ERISA
Affiliate Plan"). Except as set forth in GCB DISCLOSURE SCHEDULE 4.13.3, no GCB
Defined Benefit Plan had an "accumulated funding deficiency" (as defined in
Section 302 of ERISA), whether or not waived, as of the last day of the end of
the most recent plan year ending prior to the date hereof. Except as set forth
in GCB DISCLOSURE SCHEDULE 4.13.3, the fair market value of the assets of each
GCB Defined Benefit Plan exceeds the present value of the benefits guaranteed
under Section 4022 of ERISA under such GCB Defined Benefit Plan as of the end of
the most recent plan year with respect to the respective GCB Defined Benefit
Plan ending prior to the date hereof, calculated on the basis of the actuarial
assumptions used in the most recent actuarial valuation for such GCB Defined
Benefit Plan as of the date hereof; and no notice of a "reportable event" (as
defined in Section 4043 of ERISA) for which the 30-day reporting requirement has
not been waived has been required to be filed for any GCB Defined Benefit Plan
within the 12-month period ending on the date hereof. Neither GCB nor any of its
Subsidiaries has provided, or is required to provide, security to any GCB
Defined Benefit Plan or to any single-employer plan of an ERISA Affiliate
pursuant to Section 401(a)(29) of the Code or has taken any action, or omitted
to take any action, that has resulted, or would reasonably be expected to result
in the imposition of a lien under Section 412(n) of the Code or pursuant to
ERISA. Neither GCB, its Subsidiaries, nor any ERISA Affiliate has contributed to
any "multiemployer plan," as defined in Section 3(37) of ERISA, on or after
January 1, 1998. To the Knowledge of GCB, and except as set forth in GCB
DISCLOSURE SCHEDULE 4.13.3, there is no pending investigation or enforcement
action by any Bank Regulator with respect to any GCB Compensation and Benefit
Plan or any ERISA Affiliate Plan.
4.13.4. Except as set forth in GCB DISCLOSURE SCHEDULE 4.13.4, all material
contributions required to be made under the terms of any GCB Compensation and
Benefit Plan or ERISA Affiliate Plan or any employee benefit arrangements to
which GCB or any GCB Subsidiary is a party or a sponsor have been timely made,
and all contributions and funding obligations are accrued on GCB's consolidated
financial statements to the extent required by GAAP. GCB and its Subsidiaries
have expensed and accrued as a liability the present value of future benefits
under each applicable GCB Compensation and Benefit Plan for financial reporting
purposes as required by GAAP.
4.13.5. Except as set forth in GCB DISCLOSURE SCHEDULE 4.13.5, neither GCB
nor any GCB Subsidiary has any obligations to provide retiree health, life
insurance, disability insurance, or other retiree death benefits under any GCB
Compensation and Benefit Plan, other than benefits mandated by COBRA or other
applicable law. Except as set forth in GCB DISCLOSURE SCHEDULE 4.13.5, there has
been no communication to employees by GCB or any GCB Subsidiary that would
reasonably be expected to promise or guarantee such employees retiree health,
life insurance, disability insurance, or other retiree death benefits.
4.13.6. Except as set forth in GCB DISCLOSURE SCHEDULE 4.13.6, GCB and its
Subsidiaries do not maintain any GCB Compensation and Benefit Plans covering
employees who are not United States residents.
4.13.7. With respect to each GCB Compensation and Benefit Plan, if
applicable, GCB has provided or made available to OFC copies of: (A) any trust
instruments and insurance contracts; (B) the three most recent Forms 5500 filed
with the IRS; (C) the three most recent actuarial reports and financial
statements; (D) the most recent summary plan description; (E) most recent
Favorable Letter issued by the IRS; (F) any Form 5310 or Form 5330 filed with
the IRS within the last three years; and (G) the most recent nondiscrimination
tests performed under ERISA and the Code (including 401(k) and 401(m) tests).
4.13.8. Except as disclosed in GCB DISCLOSURE SCHEDULE 4.13.8, the
consummation of the Merger will not, directly or indirectly (including, without
limitation, as a result of any termination of employment or service at any time
prior to or following the Effective Time) (A) entitle any employee, consultant
or director to any payment or benefit (including severance pay, change in
control benefit, or similar compensation) or any increase in compensation, (B)
result in the vesting or acceleration of any benefits under any GCB Compensation
and Benefit Plan or (C) result in any material increase in benefits payable
under any GCB Compensation and Benefit Plan.
4.13.9. Except as disclosed in GCB DISCLOSURE SCHEDULE 4.13.9, neither GCB
nor any GCB Subsidiary maintains any compensation plans, programs or
arrangements under which any payment is reasonably likely to become
non-deductible, in whole or in part, for tax reporting purposes as a result of
the limitations under Section 162(m) of the Code and the regulations issued
thereunder.
4.13.10. To the Knowledge of GCB, the consummation of the Mergers and the
Bank Merger will not, directly or indirectly (including without limitation, as a
result of any termination of employment or service at any time prior to or
following the Effective Time), entitle any current or former employee, director
or independent contractor of GCB or any GCB Subsidiary to any actual or deemed
payment (or benefit) which could constitute a "parachute payment" (as such term
is defined in Section 280G of the Code), except as set forth in GCB DISCLOSURE
SCHEDULE 4.13.10.
4.13.11. Except as disclosed in GCB DISCLOSURE SCHEDULE 4.13.11, there are
no stock appreciation or similar rights, earned dividends or dividend
equivalents, or shares of restricted stock, outstanding under any of the GCB
Compensation and Benefit Plans or otherwise as of the date hereof and none will
be granted, awarded, or credited after the date hereof.
4.13.12. GCB DISCLOSURE SCHEDULE 4.13.12 sets forth, as of the payroll date
immediately preceding the date of this Agreement, a list of the full names of
all officers, and employees whose annual rate of salary is $50,000 or greater,
of GC Bank or GCB, their title and rate of salary, and their date of hire. GCB
DISCLOSURE SCHEDULE 4.13.12 also sets forth any changes to any GCB Compensation
and Benefit Plan since December 31, 2006.
4.14. Brokers, Finders and Financial Advisors.
Except as set forth on GCB DISCLOSURE SCHEDULE 4.14, neither GCB nor any
GCB Subsidiary, nor any of their respective officers, directors, employees or
agents, has employed any broker, finder or financial advisor in connection with
the transactions contemplated by this Agreement, or incurred any liability or
commitment for any fees or commissions to any such person in connection with the
transactions contemplated by this Agreement. True and correct copies of the
engagement agreements with the parties set forth in GCB DISCLOSURE SCHEDULE 4.14
are attached to GCB DISCLOSURE SCHEDULE 4.14.
4.15. Environmental Matters.
4.15.1. Except as may be set forth in GCB DISCLOSURE SCHEDULE 4.15 and any
Phase I Environmental Report identified therein, with respect to GCB and each
GCB Subsidiary:
(A) Each of GCB and the GCB Subsidiaries, the Participation
Facilities, and, to GCB's Knowledge, the Loan Properties are in substantial
compliance with, and are not liable in any material respect under, any
Environmental Laws;
(B) GCB has not received any written notice that there is any suit,
claim, action, demand, executive or administrative order, directive,
investigation or proceeding pending and, to GCB's Knowledge, no such action is
threatened, before any court, governmental agency or other forum against it or
any of the GCB Subsidiaries or any Participation Facility or Loan Property (x)
for alleged noncompliance (including by any predecessor) with, or liability
under, any Environmental Law or (y) relating to the presence of or release (as
defined herein) into the environment of any Materials of Environmental Concern
(as defined herein), whether or not occurring at or on a site owned, leased or
operated by it or any of the GCB Subsidiaries or any Participation Facility;
(C) Neither GCB nor GC Bank has received any written notice, by way of
suit, claim, action, demand, executive or administrative order, directive,
investigation or proceeding, or otherwise, alleging or indicating that it (or
any subsidiary) may be liable under any Environmental Law with respect to any
Loan Property;
(D) The properties currently owned or operated by GCB or any GCB
Subsidiary (including, without limitation, soil, groundwater or surface water
on, or under the properties, and buildings thereon) are not contaminated with
and do not otherwise contain any Materials of Environmental Concern other than
as permitted under applicable Environmental Law;
(E) Neither GCB nor any GCB Subsidiary during the past three years has
received any written notice, demand letter, executive or administrative order,
directive or request for information from any federal, state, local or foreign
governmental entity or any third party indicating that it may be in violation
of, or liable under, any Environmental Law;
(F) To GCB's Knowledge, there are no underground storage tanks on, in
or under any properties owned or operated by GCB or any of the GCB Subsidiaries
or any Participation Facility, and to GCB's Knowledge, no underground storage
tanks have been closed or removed from any properties owned or operated by GCB
or any of the GCB Subsidiaries or any Participation Facility; and
(G) To GCB's Knowledge, during the period of (s) GCB's or any of the
GCB Subsidiaries' ownership or operation of any of their respective current
properties or (t) GCB's or any of the GCB Subsidiaries' participation in the
management of any Participation Facility, there has been no contamination by or
release of Materials of Environmental Concerns in, on, under or affecting such
properties that could reasonably be expected to result in material liability
under the Environmental Laws.
4.15.2. "Loan Property" means any property in which the applicable party
(or a Subsidiary of it) holds a security interest, and, where required by the
context, includes the owner or operator of such property, but only with respect
to such property. "Participation Facility" means any facility in which the
applicable party (or a Subsidiary of it) participates in the management
(including all property held as trustee or in any other fiduciary capacity) and,
where required by the context, includes the owner or operator of such property,
but only with respect to such property.
4.16. Loan Portfolio and Investment Securities.
4.16.1. The allowance for loan losses reflected in GCB's audited
consolidated balance sheet at December 31, 2006 was, and the allowance for loan
losses shown on the balance sheets in GCB's Securities Documents for periods
ending after December 31, 2006 was or will be, as the case may be, adequate, as
of the dates thereof, under GAAP.
4.16.2. GCB DISCLOSURE SCHEDULE 4.16.2 sets forth a listing, as of August
31, 2007, by account, of: (A) all loans (including loan participations) of GC
Bank or any other GCB Subsidiary that have been accelerated during the past
twelve months; (B) all loan commitments or lines of credit of GC Bank or any
other GCB Subsidiary which have been terminated by GC Bank or any other GCB
Subsidiary during the past twelve months by reason of a default or adverse
developments in the condition of the borrower or other events or circumstances
affecting the credit of the borrower; (C) all loans, lines of credit and loan
commitments as to which GC Bank or any other GCB Subsidiary has given written
notice of its intent to terminate during the past twelve months; (D) with
respect to all commercial loans (including commercial real estate loans), all
notification letters and other written communications from GC Bank or any other
GCB Subsidiary to any of their respective borrowers, customers or other parties
during the past twelve months wherein GC Bank or any other GCB Subsidiary has
requested or demanded that actions be taken to correct existing defaults or
facts or circumstances which may become defaults; (E) each borrower, customer or
other party which has notified GC Bank or any other GCB Subsidiary during the
past twelve months of, or has asserted against GC Bank or any other GCB
Subsidiary, in each case in writing, any "lender liability" or similar claim,
and, to the Knowledge of GC Bank, each borrower, customer or other party which
has given GC Bank or any other GCB Subsidiary any oral notification of, or
orally asserted to or against GC Bank or any other GCB Subsidiary, any such
claim; (F) all loans, (1) that are contractually past due 90 days or more in the
payment of principal and/or interest, (2) that are on non-accrual status, (3)
that as of the date of this Agreement are classified as "Other Loans Specially
Mentioned", "Special Mention", "Substandard", "Doubtful", "Loss", "Classified",
"Criticized", "Watch list" or words of similar import, together with the
principal amount of and accrued and unpaid interest on each such Loan and the
identity of the obligor thereunder, (4) where a reasonable doubt exists as to
the timely future collectability of principal and/or interest, whether or not
interest is still accruing or the loans are less than 90 days past due, (5)
where, during the past three years, the interest rate terms have been reduced
and/or the maturity dates have been extended subsequent to the agreement under
which the loan was originally created due to concerns regarding the borrower's
ability to pay in accordance with such initial terms, or (6) where a specific
reserve allocation exists in connection therewith, and (G) all assets classified
by GC Bank or any GC Bank Subsidiary as real estate acquired through foreclosure
or in lieu of foreclosure, including in-substance foreclosures, and all other
assets currently held that were acquired through foreclosure or in lieu of
foreclosure. DISCLOSURE SCHEDULE 4.16.2 may exclude any individual loan with a
principal outstanding balance of less than $50,000, provided that DISCLOSURE
SCHEDULE 4.16.2 includes, for each category described, the aggregate amount of
individual loans with a principal outstanding balance of less than $50,000 that
has been excluded.
4.16.3. All loans receivable (including discounts) and accrued interest
entered on the books of GCB and the GCB Subsidiaries arose out of bona fide
arm's-length transactions, were made for good and valuable consideration in the
ordinary course of GCB's or the appropriate GCB Subsidiary's respective
business, and the notes or other evidences of indebtedness with respect to such
loans (including discounts) are true and genuine and are what they purport to
be, except as set forth in GCB DISCLOSURE SCHEDULE 4.16.3(a). To the Knowledge
of GCB, the loans, discounts and the accrued interest reflected on the books of
GCB and the GCB Subsidiaries are subject to no defenses, set-offs or
counterclaims (including, without limitation, those afforded by usury or
truth-in-lending laws), except as may be provided by bankruptcy, insolvency or
similar laws affecting creditors' rights generally or by general principles of
equity. Except as set forth in GCB DISCLOSURE SCHEDULE 4.16.3(b), all such loans
are owned by GCB or the appropriate GCB Subsidiary free and clear of any liens.
4.16.4. The notes and other evidences of indebtedness evidencing the loans
described above, and all pledges, mortgages, deeds of trust and other collateral
documents or security instruments relating thereto are, in all material
respects, valid, true and genuine, and what they purport to be.
4.16.5. GCB, GC Bank and each of their subsidiaries have good and
marketable title to all securities owned by them, free and clear of any Liens,
except to the extent such securities are pledged in the ordinary course of
business to secure obligations of GCB, GC Bank or any of their subsidiaries.
Such securities are valued on the books of GCB in accordance with GAAP in all
material respects. GCB, GC Bank and each of their subsidiaries that own
securities employ investment, securities, risk management and other policies,
practices and procedures which GCB believes are prudent and reasonable.
4.17. Securities Documents.
GCB has made available to OFC copies of its (i) annual reports on Form 10-K
for the years ended December 31, 2006, 2005 and 2004, (ii) quarterly reports on
Form 10-Q for the quarters ended March 31 and June 30 2007, and (iii) proxy
materials used or for use in connection with its meetings of shareholders held
in 2007, 2006 and 2005. Such reports, prospectus and proxy materials complied,
at the time filed with the SEC, in all material respects, with the Securities
Laws.
4.18. Related Party Transactions.
Except as described in GCB's Proxy Statement distributed in connection with
the annual meeting of shareholders held in April 2007, or as set forth in GCB
DISCLOSURE SCHEDULE 4.18, neither GCB nor any GCB Subsidiary is a party to any
transaction (including any loan or other credit accommodation) with any director
or officer of GCB or any GCB Subsidiary, or any affiliate thereof. All such
transactions (a) were made in the ordinary course of business, (b) were made on
substantially the same terms, including interest rates and collateral, as those
prevailing at the time for comparable transactions with other Persons, and (c)
did not involve more than the normal risk of collectability or present other
unfavorable features. No loan or credit accommodation to any Affiliate of GCB or
any GCB Subsidiary is presently in default or, during the three year period
prior to the date of this Agreement, has been in default or has been
restructured, modified or extended. Neither GCB nor any GCB Subsidiary has been
notified that principal and interest with respect to any such loan or other
credit accommodation will not be paid when due or that the loan grade
classification accorded such loan or credit accommodation by GCB is
inappropriate.
4.19. Deposits.
Except as set forth in GCB DISCLOSURE SCHEDULE 4.19, none of the deposits
of GCB or any GCB Subsidiary is a "brokered deposit" as defined in 12 CFR
Section 337.6(a)(2).
4.20. Required Vote.
The affirmative vote of a majority of the issued and outstanding shares of
GCB Common Stock is required to approve this Agreement and the Merger under
GCB's certificate of incorporation and the NJBCA.
4.21. Registration Obligations.
Neither GCB nor any GCB Subsidiary is under any obligation, contingent or
otherwise, which will survive the Effective Time by reason of any agreement to
register any transaction involving any of its securities under the Securities
Act.
4.22. Risk Management Instruments.
All material interest rate swaps, caps, floors, option agreements, futures
and forward contracts and other similar risk management arrangements, whether
entered into for GCB's own account, or for the account of one or more of GCB's
Subsidiaries or their customers (all of which are set forth in GCB DISCLOSURE
SCHEDULE 4.22), were in all material respects entered into in compliance with
all applicable laws, rules, regulations and regulatory policies, and to the
Knowledge of GCB, with counterparties believed to be financially responsible at
the time; and to GCB's Knowledge each of them constitutes the valid and legally
binding obligation of GCB or one of its Subsidiaries, enforceable in accordance
with its terms (except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer and
similar laws of general applicability relating to or affecting creditors' rights
or by general equity principles), and is in full force and effect in all
material respects. Neither GCB nor any GCB Subsidiary, nor to the Knowledge of
GCB any other party thereto, is in breach of any of its obligations under any
such agreement or arrangement in any material respect.
4.23. Fairness Opinion.
GCB has received a written opinion from Sandler X'Xxxxx & Partners,
L.P. to the effect that, subject to the terms, conditions and qualifications set
forth therein, as of the date hereof, the Merger Consideration to be received by
the shareholders of GCB pursuant to this Agreement is fair to such shareholders
from a financial point of view. Such opinion has not been amended or rescinded
as of the date of this Agreement.
4.24. Trust Accounts
GC Bank and each of its subsidiaries has properly administered, in all
material respects, all accounts for which it acts as a fiduciary, including but
not limited to accounts for which it serves as trustee, agent, custodian,
personal representative, guardian, conservator or investment advisor, in
accordance with the terms of the governing documents and applicable laws and
regulations. Neither GC Bank nor any other GCB Subsidiary has, and to the
Knowledge of GCB, nor has any of their respective directors, officers or
employees, committed any breach of trust with respect to any such fiduciary
account and the records for each such fiduciary account.
4.25. Intellectual Property
GCB and each GCB Subsidiary owns or, to GCB's Knowledge, possesses valid
and binding licenses and other rights (subject to expirations in accordance with
their terms) to use all patents, copyrights, trade secrets, trade names, service
marks and trademarks used in their business, and neither GCB nor any GCB
Subsidiary has received any notice of conflict with respect thereto that asserts
the rights of others. GCB and each GCB Subsidiary have performed all the
obligations required to be performed, and are not in default in any material
respect, under any contract, agreement, arrangement or commitment relating to
any of the foregoing. To the Knowledge of GCB, the conduct of the business of
GCB and each GCB Subsidiary as currently conducted or proposed to be conducted
does not, in any material respect, infringe upon, dilute, misappropriate or
otherwise violate any intellectual property owned or controlled by any third
party.
4.26. Labor Matters
There are no labor or collective bargaining agreements to which GCB or any
GCB Subsidiary is a party. To the Knowledge of GCB, there is no union organizing
effort pending or threatened against GCB or any GCB Subsidiary. There is no
labor strike, labor dispute (other than routine employee grievances that are not
related to union employees), work slowdown, stoppage or lockout pending or, to
the Knowledge of GCB, threatened against GCB or any GCB Subsidiary. There is no
unfair labor practice or labor arbitration proceeding pending or, to the
Knowledge of GCB, threatened against GCB or any GCB Subsidiary (other than
routine employee grievances that are not related to union employees). GCB and
each GCB Subsidiary is in compliance in all material respects with all
applicable laws respecting employment and employment practices, terms and
conditions of employment and wages and hours, and are not engaged in any unfair
labor practice.
4.27. GCB Information Supplied
The information relating to GCB and any GCB Subsidiary to be provided to
OFC for inclusion in the Merger Registration Statement, or in any other document
filed with any Bank Regulator or other Governmental Entity in connection
herewith, 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 in which they are made, not misleading.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF OFC
OFC represents and warrants to GCB that the statements contained in this
Article V are correct and complete as of the date of this Agreement and will be
correct and complete as of the Closing Date (as though made then and as though
the Closing Date were substituted for the date of this Agreement throughout this
Article V), subject to the standard set forth in Section 5.1, and except as set
forth in the OFC DISCLOSURE SCHEDULE delivered by OFC to GCB on the date hereof,
and except as to any representation or warranty which specifically relates to an
earlier date, which only need be so correct as of such earlier date. OFC has
made a good faith effort to ensure that the disclosure on each schedule of the
OFC DISCLOSURE SCHEDULE corresponds to the section referenced herein. However,
for purposes of the OFC DISCLOSURE SCHEDULE, any item disclosed on any schedule
therein is deemed to be fully disclosed with respect to all schedules under
which such item may be relevant as and to the extent that it is reasonably clear
on the face of such schedule that such item applies to such other schedule.
References to the Knowledge of OFC shall include the Knowledge of Oritani
Savings Bank.
5.1. Standard.
No representation or warranty of OFC contained in this Article V shall be
deemed untrue or incorrect, and OFC shall not be deemed to have breached a
representation or warranty, as a consequence of the existence of any fact,
circumstance or event unless such fact, circumstance or event, individually or
taken together with all other facts, circumstances or events inconsistent with
any paragraph of Article V, has had or is reasonably expected to have a Material
Adverse Effect, disregarding for these purposes (x) any qualification or
exception for, or reference to, materiality in any such representation or
warranty and (y) any use of the terms "material", "materially", "in all material
respects", "Material Adverse Effect" or similar terms or phrases in any such
representation or warranty. The foregoing standard shall not apply to
representations and warranties contained in Sections 5.2 (other than the last
sentence of Sections 5.2.1 and 5.2.2), 5.3, 5.4 and 5.8, which shall be deemed
untrue, incorrect and breached if they are not true and correct in all material
respects based on the qualifications and standards therein contained.
5.2. Organization.
5.2.1. OFC is a corporation duly organized, validly existing and in good
standing under the laws of the United States, and is duly registered as a
savings and loan holding company under the HOLA. OFC has full corporate power
and authority to carry on its business as now conducted and is duly licensed or
qualified to do business in the states of the United States and foreign
jurisdictions where its ownership or leasing of property or the conduct of its
business requires such qualification.
5.2.2. Oritani Savings Bank is a savings bank duly organized, validly
existing and in good standing (to the extent required) under New Jersey law. The
deposits of Oritani Savings Bank are insured by the FDIC to the fullest extent
permitted by law, and all premiums and assessments required to be paid in
connection therewith have been paid when due. Oritani Savings Bank is a member
in good standing of the FHLB and owns the requisite amount of stock therein.
5.2.3. OFC DISCLOSURE SCHEDULE 5.2.3 sets forth each OFC Subsidiary. Each
OFC Subsidiary is a corporation or limited liability company duly organized,
validly existing and in good standing under the laws of its jurisdiction of
incorporation or organization.
5.2.4. The respective minute books of OFC, Oritani Savings Bank and each
OFC Subsidiary accurately records, in all material respects, all material
corporate actions of their respective shareholders and boards of directors
(including committees).
5.2.5. Prior to the date of this Agreement, OFC has made available to GCB
true and correct copies of the certificate of incorporation and bylaws of OFC
and Oritani Savings Bank and the OFC Subsidiaries.
5.3. Capitalization.
5.3.1. The authorized capital stock of OFC consists of 80,000,000 shares of
common stock, $0.01 par value, of which 40,552,162 shares are outstanding,
validly issued, fully paid and nonassessable and free of preemptive rights, and
10,000,000 shares of preferred stock, $0.01 par value ("OFC Preferred Stock"),
none of which are outstanding. There are no shares of OFC Common Stock held by
OFC as treasury stock. Neither OFC nor any OFC Subsidiary has or is bound by any
Rights of any character relating to the purchase, sale or issuance or voting of,
or right to receive dividends or other distributions on any shares of OFC Common
Stock, or any other security of OFC or any securities representing the right to
vote, purchase or otherwise receive any shares of OFC Common Stock or any other
security of OFC, other than shares that may be issuable under awards that may be
made under the stock benefit plans that may be approved by the stockholders of
OFC.
5.3.2. OFC owns all of the capital stock of Oritani Savings Bank free and
clear of any lien or encumbrance. Except as set forth in OFC DISCLOSURE SCHEDULE
5.3.2, OFC does not possess, directly or indirectly, any material equity
interest in any corporate entity, except for equity interests held by OFC
Subsidiaries in a fiduciary capacity, and equity interests held in connection
with the lending activities of OFC Subsidiaries, including stock in the FHLB.
Except as set forth in OFC DISCLOSURE SCHEDULE 5.3.2, either OFC or Oritani
Savings Bank owns all of the outstanding shares of capital stock of each OFC
Subsidiary free and clear of all liens, security interests, pledges, charges,
encumbrances, agreements, and restrictions of any kind or nature.
5.3.3. To the Knowledge of OFC, no Person or "group" (as that term is used
in Section 13(d)(3) of the Exchange Act) is the beneficial owner (as defined in
Section 13(d) of the Exchange Act) of 5% or more of the outstanding shares of
OFC Common Stock.
5.4. Authority; No Violation.
5.4.1. OFC has full corporate power and authority to execute and deliver
this Agreement and, subject to receipt of the Regulatory Approvals, and the
approval of the OFC shareholders, to consummate the transactions contemplated
hereby. The execution and delivery of this Agreement by OFC and the completion
by OFC of the transactions contemplated hereby, including the Merger and the
Bank Merger, have been duly and validly approved by the Board of Directors of
OFC, and no other corporate proceedings on the part of OFC, other than OFC
shareholder approval, are necessary to complete the transactions contemplated
hereby, including the Merger. This Agreement has been duly and validly executed
and delivered by OFC, and subject to the receipt of the Regulatory Approvals and
due and valid execution and delivery of this Agreement by GCB, constitutes the
valid and binding obligations of OFC, enforceable against OFC in accordance with
its terms, subject to applicable bankruptcy, insolvency and similar laws
affecting creditors' rights generally, and subject, as to enforceability, to
general principles of equity.
5.4.2. Subject to receipt of Regulatory Approvals and GCB's and OFC's
compliance with any conditions contained therein, (A) the execution and delivery
of this Agreement by OFC, (B) the consummation of the transactions contemplated
hereby, and (C) compliance by OFC with any of the terms or provisions hereof
will not (i) conflict with or result in a breach of any provision of the
certificate of incorporation or bylaws of OFC or any OFC Subsidiary or the
charter and bylaws of Oritani Savings Bank; (ii) violate any statute, code,
ordinance, rule, regulation, judgment, order, writ, decree or injunction
applicable to OFC or any OFC Subsidiary or any of their respective properties or
assets; or (iii) 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 a right of termination or
acceleration or the creation of any lien, security interest, charge or other
encumbrance upon any of the properties or assets of OFC or any OFC Subsidiary
under any of the terms, conditions or provisions of any note, bond, mortgage,
indenture, deed of trust, license, lease, agreement or other investment or
obligation to which any of them is a party, or by which they or any of their
respective properties or assets may be bound or affected, except for such
violations, conflicts, breaches or defaults under clause (ii) or (iii) hereof
which, either individually or in the aggregate, will not have a Material Adverse
Effect on OFC.
5.5. Consents.
Except for (a) filings with Bank Regulators, the receipt of the Regulatory
Approvals, and compliance with any conditions contained therein, including the
filing of Articles of Combination with the OTS, (b) the filing of the
Certificate of Merger with the Secretary of State of the State of New Jersey,
(c) the filing with the SEC of (i) the Merger Registration Statement and (ii)
such reports under Sections 13(a), 13(d), 13(g) and 16(a) of the Exchange Act as
may be required in connection with this Agreement and the transactions
contemplated hereby and the obtaining from the SEC of such orders as may be
required in connection therewith, (d) approval of the listing of OFC Common
Stock to be issued in the Merger on the Nasdaq, (e) such filings and approvals
as are required to be made or obtained under the securities or "Blue Sky" laws
of various states in connection with the issuance of the shares of OFC Common
Stock pursuant to this Agreement, and (f) the approval of this Agreement by the
requisite vote of the shareholders of OFC, no consents, waivers or approvals of,
or filings or registrations with, any Governmental Entity are necessary, and, to
OFC's Knowledge, no consents, waivers or approvals of, or filings or
registrations with, any other third parties are necessary, in connection with
(x) the execution and delivery of this Agreement by OFC, and (y) the completion
of the Merger and the Bank Merger. OFC has no reason to believe that (i) any
Regulatory Approvals or other required consents or approvals will not be
received, or that (ii) any public body or authority, the consent or approval of
which is not required or to which a filing is not required, will object to the
completion of the transactions contemplated by this Agreement.
5.6. Financial Statements.
5.6.1. OFC has previously made available to GCB the OFC Regulatory Reports.
The OFC Regulatory Reports have been prepared in all material respects in
accordance with applicable regulatory accounting principles and practices
throughout the periods covered by such statements.
5.6.2. OFC has previously made available to GCB the OFC Financial
Statements. The OFC Financial Statements have been prepared in accordance with
GAAP, and (including the related notes where applicable) fairly present in each
case in all material respects (subject in the case of the unaudited interim
statements to normal year-end adjustments) the consolidated financial position,
results of operations and cash flows of OFC and the OFC Subsidiaries on a
consolidated basis as of and for the respective periods ending on the dates
thereof, in accordance with GAAP during the periods involved, except as
indicated in the notes thereto, or in the case of unaudited statements, as
permitted by Form 10-Q.
5.6.3. At the date of each balance sheet included in the OFC Financial
Statements, OFC did not have any liabilities, obligations or loss contingencies
of any nature (whether absolute, accrued, contingent or otherwise) of a type
required to be reflected in such OFC Financial Statements or in the footnotes
thereto which are not fully reflected or reserved against therein or fully
disclosed in a footnote thereto, except for liabilities, obligations and loss
contingencies which are not material individually or in the aggregate or which
are incurred in the ordinary course of business, consistent with past practice,
and except for liabilities, obligations and loss contingencies which are within
the subject matter of a specific representation and warranty herein and subject,
in the case of any unaudited statements, to normal, recurring audit adjustments
and the absence of footnotes.
5.6.4. The records, systems, controls, data and information of OFC and its
Subsidiaries are recorded, stored, maintained and operated under means
(including any electronic, mechanical or photographic process, whether
computerized or not) that are under the exclusive ownership and direct control
of OFC or its Subsidiaries or accountants (including all means of access thereto
and therefrom), except for any non-exclusive ownership and non-direct control
that would not reasonably be expected to have a material adverse effect on the
system of internal accounting controls described below in this Section 5.6.4.
OFC (x) has implemented and maintains a system of internal control over
financial reporting (as required by Rule 13a-15(a) of the Exchange Act) that is
designed to provide reasonable assurances regarding the reliability of financial
reporting and the preparation of its financial statements for external purposes
in accordance with GAAP, (y) has implemented and maintains disclosure controls
and procedures (as defined in Rule 13a-15(e) of the Exchange Act) to ensure that
material information relating to OFC, including its consolidated Subsidiaries,
is made known to the chief executive officer and the chief financial officer of
OFC by others within those entities, and (z) has disclosed, based on its most
recent evaluation prior to the date hereof, to OFC's outside auditors and the
audit committee of OFC's Board of Directors (i) any significant deficiencies and
material weaknesses in the design or operation of internal control over
financial reporting (as defined in Rule 13a-15(f) of the Exchange Act) which are
reasonably likely to adversely affect OFC's ability to record, process,
summarize and report financial information and (ii) any fraud, whether or not
material, that involves management or other employees who have a significant
role in OFC's internal control over financial reporting. As of the date hereof,
to the knowledge of OFC, its chief executive officer and chief financial officer
will be able to give the certifications required pursuant to the rules and
regulations adopted pursuant to Section 302 of the Xxxxxxxx-Xxxxx Act, without
qualification, when next due.
5.6.5. Since December 31, 2004, (i) neither OFC nor any of its Subsidiaries
nor, to the Knowledge of OFC, any director, officer, employee, auditor,
accountant, or representative of OFC or any of its Subsidiaries has received or
otherwise had or obtained knowledge of any material complaint, allegation,
assertion, or claim, whether written or oral, regarding the accounting or
auditing practices, procedures, methodologies, or methods of OFC or any of its
Subsidiaries or their respective internal accounting controls, including any
material complaint, allegation, assertion, or claim that OFC or any of its
Subsidiaries has engaged in questionable accounting or auditing practices, and
(ii) no attorney representing OFC or any of its Subsidiaries has reported
evidence of a material violation of Securities Laws, breach of fiduciary duty or
similar violation by OFC or any of its officers, directors, employees, or agents
to the Board of Directors of OFC or any committee thereof or to any director or
officer of OFC.
5.6.6. The allowance for credit losses reflected in OFC's audited statement
of condition at June 30, 2007 was, and the allowance for credit losses shown on
the balance sheets in OFC's Securities Documents for periods ending after June
30, 2007 was or will be, as the case may be, adequate, as of the dates thereof,
under GAAP.
5.7. Taxes.
OFC and the OFC Subsidiaries that are at least 80 percent owned by OFC are
members of the same affiliated group within the meaning of Code Section 1504(a).
OFC has duly filed all federal, state and material local tax returns required to
be filed by or with respect to OFC and each OFC Subsidiary on or prior to the
Closing Date, taking into account any extensions (all such returns, to the
Knowledge of OFC, being accurate and correct in all material respects) and has
duly paid or made provisions for the payment of all material federal, state and
local taxes which have been incurred by or are due or claimed to be due from OFC
and any OFC Subsidiary by any taxing authority or pursuant to any written tax
sharing agreement on or prior to the Closing Date other than taxes or other
charges which (i) are not delinquent, (ii) are being contested in good faith, or
(iii) have not yet been fully determined. OFC and each of its Subsidiaries has
withheld and paid all taxes required to have been withheld and paid in
connection with amounts paid or owing to any employee, independent contractor,
creditor, shareholder or other third party, and OFC and each of its
Subsidiaries, to the Knowledge of OFC, has timely complied with all applicable
information reporting requirements under Part III, Subchapter A of Chapter 61 of
the Code and similar applicable state and local information reporting
requirements.
5.8. No Material Adverse Effect.
OFC has not suffered any Material Adverse Effect since June 30, 2007 and no
event has occurred or circumstance arisen since that date which, in the
aggregate, has had or is reasonably likely to have a Material Adverse Effect on
OFC.
5.9. Ownership of Property; Insurance Coverage.
5.9.1. OFC and each OFC Subsidiary has good and, as to real property,
marketable title to all material assets and properties owned by OFC or each OFC
Subsidiary in the conduct of their businesses, whether such assets and
properties are real or personal, tangible or intangible, including assets and
property reflected in the balance sheets contained in the OFC Financial
Statements or acquired subsequent thereto (except to the extent that such assets
and properties have been disposed of in the ordinary course of business, since
the date of such balance sheets), subject to no material encumbrances, liens,
mortgages, security interests or pledges, except (i) those items which secure
liabilities for public or statutory obligations or any discount with, borrowing
from or other obligations to FHLB, inter-bank credit facilities, or any
transaction by a OFC Subsidiary acting in a fiduciary capacity, (ii) statutory
liens for amounts not yet delinquent or which are being contested in good faith,
(iii) non-monetary liens affecting real property which do not adversely affect
the value or use of such real property, and (iv) those described and reflected
in the OFC Financial Statements. OFC and the OFC Subsidiaries, as lessee, have
the right under valid and existing leases of real and personal properties used
by OFC and its Subsidiaries in the conduct of their businesses to occupy or use
all such properties as presently occupied and used by each of them.
5.9.2. OFC and each OFC Subsidiary currently maintain insurance considered
by each of them to be reasonable for their respective operations. Neither OFC
nor any OFC Subsidiary has received notice from any insurance carrier during the
past two years that (i) such insurance will be canceled or that coverage
thereunder will be materially reduced or eliminated, or (ii) premium costs
(other than with respect to health or disability insurance) with respect to such
policies of insurance will be substantially increased. There are presently no
material claims pending under such policies of insurance and no notices have
been given by OFC or any OFC Subsidiary under such policies (other than with
respect to health, disability, or worker's compensation insurance). All such
insurance is valid and enforceable and in full force and effect in all material
respects, and within the last two years OFC and each OFC Subsidiary has received
each type of insurance coverage for which it has applied and during such periods
has not been denied indemnification for any material claims submitted under any
of its insurance policies. OFC DISCLOSURE SCHEDULE 5.9.3 identifies all material
policies of insurance maintained by OFC and each OFC Subsidiary.
5.10. Legal Proceedings.
Except as disclosed in OFC DISCLOSURE SCHEDULE 5.10, neither OFC nor any
OFC Subsidiary is a party to any, and there are no pending or, to the Knowledge
of OFC, threatened legal, administrative, arbitration or other proceedings,
claims (whether asserted or unasserted), actions or governmental investigations
or inquiries of any nature (i) against OFC or any OFC Subsidiary, (ii) to which
OFC or any OFC Subsidiary's assets are or may be subject, (iii) challenging the
validity or propriety of any of the transactions contemplated by this Agreement,
or (iv) which would reasonably be expected to adversely affect the ability of
OFC to perform under this Agreement, except for any proceeding, claim, action,
investigation or inquiry which, if adversely determined, individually or in the
aggregate, would not be reasonably expected to have a Material Adverse Effect.
5.11. Compliance With Applicable Law.
5.11.1. To the Knowledge of OFC, each of OFC and each OFC Subsidiary is in
compliance in all material respects with all applicable federal, state, local
and foreign statutes, laws, regulations, ordinances, rules, judgments, orders or
decrees applicable to it, its properties, assets and deposits, its business, and
its conduct of business and its relationship with its employees, including,
without limitation, the USA Patriot Act, the Equal Credit Opportunity Act, the
Fair Housing Act, the Community Reinvestment Act of 1977, the Home Mortgage
Disclosure Act, and all other applicable fair lending laws and other laws
relating to discriminatory business practices, and neither OFC nor any OFC
Subsidiary has received, since December 31, 2003, any written notice to the
contrary. The Board of Directors of Oritani Savings Bank has adopted and Oritani
Savings Bank has implemented an anti-money laundering program that contains
adequate and appropriate customer identification verification procedures that
has not been deemed ineffective by any Governmental Authority and that meets the
requirements of Sections 352 and 326 of the USA Patriot Act and the regulations
thereunder.
5.11.2. Each of OFC and each OFC Subsidiary has all material permits,
licenses, authorizations, orders and approvals of, and has made all filings,
applications and registrations with, all Governmental Entities and Bank
Regulators that are required in order to permit it to own or lease its
properties and to conduct its business as presently conducted; all such permits,
licenses, certificates of authority, orders and approvals are in full force and
effect and, to the Knowledge of OFC, no suspension or cancellation of any such
permit, license, certificate, order or approval is threatened or will result
from the consummation of the transactions contemplated by this Agreement,
subject to obtaining the Regulatory Approvals.
5.11.3. For the period beginning January 1, 2003, neither OFC nor any OFC
Subsidiary has received any written notification or, to the Knowledge of OFC,
any other communication from any Bank Regulator (i) asserting that OFC or any
OFC Subsidiary is not in material compliance with any of the statutes,
regulations or ordinances which such Bank Regulator enforces; (ii) threatening
to revoke any license, franchise, permit or governmental authorization which is
material to OFC or Oritani Savings Bank; (iii) requiring or threatening to
require OFC or any OFC Subsidiary, or indicating that OFC or any OFC Subsidiary
may be required, to enter into a cease and desist order, agreement or memorandum
of understanding or any other agreement with any federal or state governmental
agency or authority which is charged with the supervision or regulation of banks
or engages in the insurance of bank deposits restricting or limiting, or
purporting to restrict or limit, in any material respect the operations of OFC
or any OFC Subsidiary, including without limitation any restriction on the
payment of dividends; or (iv) directing, restricting or limiting, or purporting
to direct, restrict or limit, in any manner the operations of OFC or any OFC
Subsidiary, including without limitation any restriction on the payment of
dividends (any such notice, communication, memorandum, agreement or order
described in this sentence is hereinafter referred to as an "OFC Regulatory
Agreement"). Neither OFC nor any OFC Subsidiary has consented to or entered into
any currently effective OFC Regulatory Agreement. The most recent regulatory
rating given to Oritani Savings Bank as to compliance with the CRA is
satisfactory or better.
5.11.4. Since the date of completion of its initial public offering, OFC
has been and is in compliance in all material respects with (i) the applicable
provisions of the Xxxxxxxx-Xxxxx Act and (ii) the applicable listing and
corporate governance rules and regulations of the Nasdaq.
5.12. Employee Benefit Plans.
5.12.1. OFC DISCLOSURE SCHEDULE 5.12.1 includes a list of all existing
bonus, incentive, deferred compensation, pension, retirement, profit-sharing,
thrift, savings, employee stock ownership, stock bonus, stock purchase,
restricted stock, stock option, stock appreciation, phantom stock, severance,
welfare benefit plans, fringe benefit plans, employment, severance and change in
control agreements and all other benefit practices, policies and arrangements
maintained by OFC or any OFC Subsidiary and in which employees in general may
participate (the "OFC Compensation and Benefit Plans"). OFC has made available
to GCB true and correct copies of the OFC Compensation and Benefit Plans.
5.12.2. To the Knowledge of OFC and except as disclosed in OFC DISCLOSURE
SCHEDULE 5.12.2, each OFC Compensation and Benefit Plan has been operated and
administered in all material respects in accordance with its terms and with
applicable law, including, but not limited to, ERISA, the Code, the Securities
Act, the Exchange Act, the Age Discrimination in Employment Act, COBRA, HIPAA,
and any regulations or rules promulgated thereunder, and no notice has been
issued by any Governmental Entity questioning or challenging such compliance.
All material filings, disclosures and notices required by ERISA, the Code, the
Securities Act, the Exchange Act, the Age Discrimination in Employment Act and
any other applicable law have been timely made or any interest, fines, penalties
or other impositions for late filings have been paid in full. Each OFC
Compensation and Benefit Plan which is a Pension Plan and which is intended to
be qualified under Section 401(a) of the Code has received a favorable
determination letter from the IRS, and OFC is not aware of any circumstances
which are reasonably likely to result in revocation of any such favorable
determination letter. There is no material pending or, to the Knowledge of OFC,
threatened action, suit or claim relating to any of the OFC Compensation and
Benefit Plans (other than routine claims for benefits). Neither OFC nor any OFC
Subsidiary has engaged in a transaction, or omitted to take any action, with
respect to any OFC Compensation and Benefit Plan that would reasonably be
expected to subject OFC or any OFC Subsidiary to an unpaid tax or penalty
imposed by either Section 4975 of the Code or Section 502 of ERISA.
5.12.3. No liability to any Governmental Entity, other than PBGC premiums
arising in the ordinary course of business, has been or is expected by OFC or
any of its Subsidiaries to be incurred with respect to any OFC Compensation and
Benefit Plan which is a Defined Benefit Plan or with respect to any ERISA
Affiliate Plan currently or formerly maintained by OFC or any ERISA Affiliate.
No OFC Defined Benefit Plan had an "accumulated funding deficiency" (as defined
in Section 302 of ERISA), whether or not waived, as of the last day of the end
of the most recent plan year ending prior to the date hereof. No notice of a
"reportable event" (as defined in Section 4043 of ERISA) for which the 30-day
reporting requirement has not been waived has been required to be filed for any
OFC Defined Benefit Plan within the 12-month period ending on the date hereof.
Neither OFC nor any of its Subsidiaries has provided, or is required to provide,
security to any OFC Defined Benefit Plan or to any single-employer plan of an
ERISA Affiliate pursuant to Section 401(a)(29) of the Code or has taken any
action, or omitted to take any action, that has resulted, or would reasonably be
expected to result in the imposition of a lien under Section 412(n) of the Code
or pursuant to ERISA. Neither OFC, its Subsidiaries, nor any ERISA Affiliate has
contributed to any "multiemployer plan," as defined in Section 3(37) of ERISA,
on or after January 1, 1998. To the Knowledge of OFC, there is no pending
investigation or enforcement action by any Bank Regulator with respect to any
OFC Compensation and Benefit Plan or any ERISA Affiliate Plan.
5.12.4. All material contributions required to be made under the terms of
any OFC Compensation and Benefit Plan or ERISA Affiliate Plan or any employee
benefit arrangements to which OFC or any OFC Subsidiary is a party or a sponsor
have been timely made, and all anticipated contributions and funding obligations
are accrued on OFC's consolidated financial statements to the extent required by
GAAP. OFC and its Subsidiaries have expensed and accrued as a liability the
present value of future benefits under each applicable OFC Compensation and
Benefit Plan for financial reporting purposes as required by GAAP.
5.12.5. The consummation of the Merger will not, directly or indirectly
(including, without limitation, as a result of any termination of employment or
service at any time prior to or following the Effective Time) (A) entitle any
employee, consultant, or director to any payment or benefit (including severance
pay, change in control benefit, or similar compensation) or any increase in
compensation, (B) result in the vesting or acceleration of any benefits under
any OFC Compensation and Benefit Plan or (C) result in any material increase in
benefits payable under any OFC Compensation and Benefit Plan.
5.12.6. The consummation of the Merger will not, directly or indirectly
(including without limitation, as a result of any termination of employment or
service at any time prior to or following the Effective Time), entitle any
current or former employee, director, or independent contractor of OFC or any
OFC Subsidiary to any actual or deemed payment (or benefit) which could
constitute a "parachute payment" (as such term is defined in Section 280G of the
Code),
5.13. Environmental Matters.
5.13.1. To the Knowledge of OFC, neither the conduct nor operation of its
business nor any condition of any property currently or previously owned or
operated by it (including, without limitation, in a fiduciary or agency
capacity), or on which it holds a lien, results or resulted in a violation of
any Environmental Laws that is reasonably likely to impose a material liability
(including a material remediation obligation) upon OFC or any of OFC Subsidiary.
To the Knowledge of OFC, no condition has existed or event has occurred with
respect to any of them or any such property that, with notice or the passage of
time, or both, is reasonably likely to result in any material liability to OFC
or any OFC Subsidiary by reason of any Environmental Laws. Neither OFC nor any
OFC Subsidiary during the past five years has received any written notice from
any Person that OFC or any OFC Subsidiary or the operation or condition of any
property ever owned, operated, or held as collateral or in a fiduciary capacity
by any of them are currently in violation of or otherwise are alleged to have
financial exposure under any Environmental Laws or relating to Materials of
Environmental Concern (including, but not limited to, responsibility (or
potential responsibility) for the cleanup or other remediation of any Materials
of Environmental Concern at, on, beneath, or originating from any such property)
for which a material liability is reasonably likely to be imposed upon OFC or
any OFC Subsidiary.
5.13.2. There is no suit, claim, action, demand, executive or
administrative order, directive, investigation or proceeding pending or, to the
OFC `s Knowledge, threatened, before any court, governmental agency or other
forum against OFC or any OFC Subsidiary (x) for alleged noncompliance (including
by any predecessor) with, or liability under, any Environmental Law or (y)
relating to the presence of or release (defined herein) into the environment of
any Materials of Environmental Concern (as defined herein), whether or not
occurring at or on a site owned, leased or operated by any of the OFC .
5.14. Loan Portfolio.
5.14.1. The allowance for loan losses reflected in OFC's audited
consolidated balance sheet at June 30, 2007 was, and the allowance for loan
losses shown on the balance sheets in OFC's Securities Documents for periods
ending after June 30, 2007 were adequate, as of the dates thereof, under GAAP.
5.14.2. OFC DISCLOSURE SCHEDULE 5.14.2 sets forth a listing, as of
September 30, 2007, of all loans (including loan participations) of Oritani
Savings Bank or any other OFC Subsidiary (1) that are contractually past due 90
days or more in the payment of principal and/or interest, (2) that are on
non-accrual status, (3) that as of the date of this Agreement are classified as
"Other Loans Specially Mentioned", "Special Mention", "Substandard", "Doubtful",
"Loss", "Classified", "Criticized", "Watch list," or words of similar import,
together with the principal amount of and accrued and unpaid interest on each
such Loan and the identity of the obligor thereunder, (4) where, during the past
three years, the interest rate terms have been reduced and/or the maturity dates
have been extended subsequent to the agreement under which the loan was
originally created due to concerns regarding the borrower's ability to pay in
accordance with such initial terms, or (5) where a specific reserve allocation
exists in connection therewith. OFC DISCLOSURE SCHEDULE 5.14.2 also lists all
assets classified by Oritani Savings Bank or any OFC Bank Subsidiary as real
estate acquired through foreclosure or in lieu of foreclosure, including
in-substance foreclosures, and all other assets currently held that were
acquired through foreclosure or in lieu of foreclosure during the previous
twelve months. OFC DISCLOSURE SCHEDULE 5.14.2 may exclude any loan with a
principal outstanding balance of less than $50,000, provided that OFC DISCLOSURE
SCHEDULE 5.15.2 includes, for each category described, the aggregate amount of
loans with a principal outstanding balance of less than $50,000 that have been
excluded.
5.14.3. All loans receivable (including discounts) and accrued interest
entered on the books of OFC and the OFC Subsidiaries arose out of bona fide
arm's-length transactions, were made for good and valuable consideration in the
ordinary course of OFC's or the appropriate OFC Subsidiary's respective
business, and the notes or other evidences of indebtedness with respect to such
loans (including discounts) are true and genuine and are what they purport to
be. To the Knowledge of OFC, the loans, discounts and the accrued interest
reflected on the books of OFC and the OFC Subsidiaries are not subject to any
material defenses, set-offs or counterclaims (including, without limitation,
those afforded by usury or truth-in-lending laws), except as may be provided by
bankruptcy, insolvency or similar laws affecting creditors' rights generally or
by general principles of equity.
5.15. Securities Documents
OFC has made available to GCB copies of its annual reports on Form 10-K for
the year ended June 30, 2007, which complied, at the time filed with the SEC, in
all material respects, with the Securities Laws.
5.16. Brokers, Finders and Financial Advisors
Neither OFC nor any OFC Subsidiary, nor any of their respective officers,
directors, employees or agents, has employed any broker, finder or financial
advisor in connection with the transactions contemplated by this Agreement, or
incurred any liability or commitment for any fees or commissions to any such
person in connection with the transactions contemplated by this Agreement except
for the retention of FinPro, Inc., and the fee payable pursuant thereto.
5.17. OFC Common Stock
The shares of OFC Common Stock to be issued pursuant to this Agreement,
when issued in accordance with the terms of this Agreement, will be duly
authorized, validly issued, fully paid and non-assessable and subject to no
preemptive rights.
5.18. Material Contracts
Neither OFC nor any OFC Subsidiary a party to or subject to: (i) any
collective bargaining agreement with any labor union relating to employees of
OFC or Oritani Savings Bank, nor (ii) any agreement which by its terms limits
the payment of dividends by OFC or Oritani Savings Bank.
5.19. Deposits
None of the deposits of Oritani Savings Bank is a "brokered deposit" as
defined in 12 CFR Section 337.6(a)(2).
5.20. Related Party Transactions
All transaction (including any loan or other credit accommodation) between
OFC, or any OFC Subsidiary, with any director or officer of OFC or any OFC
Subsidiary, or any affiliate thereof were made (a) in the ordinary course of
business, and (b) on substantially the same terms, including interest rates and
collateral, as those prevailing at the time for comparable transactions with
other Persons, or with respect to loans, in accordance with Regulation O under
the Federal Reserve Act.
5.21. Required Vote
The affirmative vote of two-thirds of the issued and outstanding shares of
OFC Common Stock is required to approve this Agreement and the Merger under
OFC's certificate of incorporation and applicable law.
5.22. Adequate Cash
OFC's obligations under this Agreement, including its obligation to deposit
cash with the Exchange Agent and to pay, or cause the Exchange Agent to pay, the
Cash Consideration and to pay for any fractional shares of OFC Common Stock, are
not subject to any financing contingency, and OFC has adequate capital, and will
have adequate cash on hand at the Effective Time, to deposit the entire cash
portion of the Exchange Fund with the Exchange Agent in accordance with the
requirements of this Agreement.
5.23. Ownership of OFC Common Stock
Oritani Financial Corp., MHC owns 68% of the issued and outstanding shares
of OFC Common Stock and, immediately following the Effective Time and the
issuance of all of the Stock Consideration required pursuant to Article III of
this Agreement and all commitments to issue shares of OFC Common Stock, Oritani
Financial Corp., MHC will own a majority of the issued and outstanding shares of
OFC Common Stock.
5.24. OFC Information Supplied
The information relating to OFC and any OFC Subsidiary to be contained in
the Merger Registration Statement, or in any other document filed with any Bank
Regulator or other Governmental Entity in connection herewith, 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 in which
they are made, not misleading. The Merger Registration Statement will comply
with the provisions of the Exchange Act and the rules and regulations thereunder
and the provisions of the Securities Act and the rules and regulations
thereunder, except that no representation or warranty is made by OFC with
respect to statements made or incorporated by reference therein based on
information supplied by GCB specifically for inclusion or incorporation by
reference in the Merger Registration Statement.
ARTICLE VI
COVENANTS OF GCB
6.1. Conduct of Business.
6.1.1. Affirmative Covenants. During the period from the date of this
Agreement to the earlier of the termination of this Agreement or the Closing
Date, and except with the written consent of OFC, which consent will not be
unreasonably withheld, conditioned or delayed, GCB will, and it will cause each
GCB Subsidiary to: operate its business, only in the usual, regular and ordinary
course of business; use reasonable efforts to preserve intact its business
organization and assets and maintain its rights and franchises; and voluntarily
take no action which would (i) adversely affect the ability of the parties to
obtain any Regulatory Approval or other approvals of Governmental Entities
required for the transactions contemplated hereby or materially increase the
period of time necessary to obtain such approvals, or (ii) adversely affect its
ability to perform its covenants and agreements under this Agreement.
6.1.2. Negative Covenants. GCB agrees that from the date of this Agreement
to the Effective Time, except as otherwise specifically permitted or required by
this Agreement, set forth in GCB DISCLOSURE SCHEDULE 6.1.2, or consented to by
OFC in writing (which consent shall not be unreasonably withheld, conditioned or
delayed; provided further, that such consent will be presumed given if a written
response (including by email) is not provided within three business days of the
receipt of a written request (addressed to the CEO of OFC) for approval), it
will not, and it will cause each GCB Subsidiary not to:
(A) change or waive any provision of its Certificate of Incorporation,
Charter or Bylaws, except as required by law, or appoint a new director to the
board directors;
(B) change the number of authorized or issued shares of its capital
stock, issue any shares of GCB Common Stock, including any shares that are held
as "treasury shares" as of the date of this Agreement, or issue or grant any
Right or agreement of any character relating to its authorized or issued capital
stock or any securities convertible into shares of such stock, make any grant or
award under the GCB Stock Benefit Plans, or split, combine or reclassify any
shares of capital stock, or declare, set aside or pay any dividend or other
distribution in respect of capital stock, or redeem or otherwise acquire any
shares of capital stock, except that (i) GCB may issue shares of GCB Common
Stock upon the valid exercise, in accordance with the information set forth in
GCB DISCLOSURE SCHEDULE 4.3.1, of presently outstanding GCB Options issued under
the GCB Stock Benefit Plans, (ii) GCB may continue to pay its regular quarterly
cash dividend of $0.145 per share with payment and record dates consistent
with past practice, provided that GCB may increase it cash dividend per share
to $0.15 for any dividend with a record and payable date after June 1, 2008 and
(iii) any GCB Subsidiary may pay dividends to its parent company (as permitted
under applicable law or regulations) consistent with past practice.
(C) enter into, amend in any material respect or terminate any
contract or agreement (including without limitation any settlement agreement
with respect to litigation) except in the ordinary course of business;
(D) other than as set forth in GCB DISCLOSURE SCHEDULE 6.1.2(D), make
application for the opening or closing of any, or open or close any, branch or
automated banking facility;
(E) grant or agree to pay any bonus, severance or termination to, or
enter into, renew or amend any employment agreement, severance agreement and/
or supplemental executive agreement with, or increase in any manner the
compensation or fringe benefits of, any of its directors, officers or
employees, except (i) as may be required pursuant to commitments existing on
the date hereof and set forth on GCB DISCLOSURE SCHEDULES 4.9.1 and 4.13.1, (ii)
pay increases in the ordinary course of business consistent with past practice
to non-officer employees, (iii) retention payments and year-end bonuses as set
forth in OFC DISCLOSURE SCHEDULE 6.1.2(E) (which may not be amended without
GCB's written consent), and (iv) a contribution to the GCB 401(k) Plan with
respect to the year ending December 31, 2007, consistent with current accruals,
past practice and applicable law. Neither GCB nor any GCB Subsidiary shall hire
or promote any employee to a rank having a title of vice president or other
more senior rank or hire any new employee at an annual rate of compensation in
excess of $50,000, provided that GCB or an GCB Subsidiary may hire at-will,
non-officer employees to fill vacancies that may from time to time arise in the
ordinary course of business;
(F) enter into or, except as may be required by law, materially modify
any pension, retirement, stock option, stock purchase, stock appreciation right,
stock grant, savings, profit sharing, deferred compensation, supplemental
retirement, consulting, bonus, group insurance or other employee benefit,
incentive or welfare contract, plan or arrangement, or any trust agreement
related thereto, in respect of any of its directors, officers or employees;
or make any contributions to any defined contribution plan not in the ordinary
course of business consistent with past practice;
(G) merge or consolidate GCB or any GCB Subsidiary with any other
corporation; sell or lease all or any substantial portion of the assets or
business of GCB or any GCB Subsidiary; make any acquisition of all or any
substantial portion of the business or assets of any other person, firm,
association, corporation or business organization other than in connection with
foreclosures, settlements in lieu of foreclosure, troubled loan or debt
restructuring, or the collection of any loan or credit arrangement between GCB,
or any GCB Subsidiary, and any other person; enter into a purchase and
assumption transaction with respect to deposits and liabilities; permit the
revocation or surrender by any GCB Subsidiary of its certificate of authority
to maintain, or file an application for the relocation of, any existing branch
office, or file an application for a certificate of authority to establish a
new branch office;
(H) sell or otherwise dispose of the capital stock of GCB or sell or
otherwise dispose of any asset of GCB or of any GCB Subsidiary other than in
the ordinary course of business consistent with past practice; except for
transactions with the FHLB, subject any asset of GCB or of any GCB Subsidiary to
a lien, pledge, security interest or other encumbrance (other than in connection
with deposits, repurchase agreements, bankers acceptances, "treasury tax and
loan" accounts established in the ordinary course of business and transactions
in "federal funds" and the satisfaction of legal requirements in the exercise
of trust powers) other than in the ordinary course of business consistent with
past practice; incur any indebtedness for borrowed money (or guarantee any
indebtedness for borrowed money), except in the ordinary course of business
consistent with past practice;
(I) voluntarily take any action which would result in any of the
representations and warranties of GCB or GC Bank set forth in this
Agreement becoming untrue as of any date after the date hereof or in any of
the conditions set forth in Article IX hereof not being satisfied, except in
each case as may be required by applicable law;
(J) change any method, practice or principle of accounting, except as
may be required from time to time by GAAP (without regard to any optional early
adoption date) or any Bank Regulator responsible for regulating GCB or GC Bank;
(K) waive, release, grant or transfer any material rights of value or
modify or change in any material respect any existing material agreement or
indebtedness to which GCB or any GCB Subsidiary is a party, other than in the
ordinary course of business, consistent with past practice;
(L) purchase any equity securities, or purchase any securities other
than securities (i) rated "AAA" or higher by either Standard & Poor's Ratings
Services or Xxxxx'x Investors Service, (ii) having a face amount of not more
than $5,000,000, (iii) with a weighted average life of not more than three years
and (iv) otherwise in the ordinary course of business consistent with past
practice;
(M) except for commitments issued prior to the date of this Agreement
which have not yet expired and which have been disclosed on the GCB
DISCLOSURE SCHEDULE 6.1.2(M), and the renewal of existing lines of credit, make
any new loan or other credit facility commitment (including without limitation,
lines of credit and letters of credit) in an amount in excess of $750,000 for a
commercial real estate loan, or as to a commercial real estate loan secured by
a first lien, in excess of $1,000,000, or $500,000 for a commercial business
loan, or in excess of $500,000 for a residential loan. In addition, the prior
approval of OFC is required with respect to the foregoing: (i) any new loan or
credit facility commitment in an amount of $500,000 or greater to any borrower
or group of affiliated borrowers whose credit exposure with GC Bank, GCB or
any GCB Subsidiary, in the aggregate, exceeds $1,000,000 prior thereto or as a
result thereof; and (ii) any new loan or credit facility commitment in excess
of $500,000 to any person residing, or secured by any property located, outside
of the State of New Jersey; the procedures for obtaining OFC approval for loans
in excess of the foregoing limits are set forth in OFC DISCLOSURE SCHEDULE
6.1.2(M) (which may not be amended without GCB's written consent).
(N) except as set forth on the GCB DISCLOSURE SCHEDULE 6.1.2(N), enter
into, renew, extend or modify any other transaction (other than a deposit
transaction) with any Affiliate;
(O) enter into any futures contract, option, interest rate caps,
interest rate floors, interest rate exchange agreement or other agreement or
take any other action for purposes of hedging the exposure of its interest-
earning assets and interest-bearing liabilities to changes in market rates
of interest;
(P) except for the execution of this Agreement, and actions taken or
which will be taken in accordance with this Agreement and performance
thereunder, take any action that would give rise to a right of payment to any
individual under any employment agreement;
(Q) make any material change in policies in existence on the date of
this Agreement with regard to: the extension of credit, or the establishment of
reserves with respect to the possible loss thereon or the charge off of losses
incurred thereon; investments; asset/liability management; or other material
banking policies except as may be required by changes in applicable law or
regulations or by a Bank Regulator;
(R) except for the execution of this Agreement, and the transactions
contemplated therein, take any action that would give rise to an acceleration of
the right to payment to any individual under any GCB Employee Plan;
(S) except as set forth in GCB DISCLOSURE SCHEDULE 6.12(S), make any
capital expenditures in excess of $25,000 individually or $50,000 in the
aggregate, other than pursuant to binding commitments existing on the date
hereof and other than expenditures necessary to maintain existing assets in good
repair;
(T) except as set forth in GCB DISCLOSURE SCHEDULE 6.12(T), purchase
or otherwise acquire, or sell or otherwise dispose of, any assets or incur any
liabilities other than in the ordinary course of business consistent with past
practices and policies;
(U) sell any participation interest in any loan (other than sales of
loans secured by one- to four-family real estate that are consistent with past
practice) other than in the ordinary course of business consistent with past
practice, and provided that Oritani Savings Bank will be given the first
opportunity to purchase any loan participation being sold, or sell OREO
properties (other than sales of OREO which generate a net book loss of not more
than $20,000 per property);
(V) undertake or enter into any lease, contract or other commitment
for its account (excluding lease finance activities related to Highland Capital
Corp), other than in the normal course of providing credit to customers as
part of its banking business, involving a payment by GCB or GC Bank of more than
$25,000 annually, or containing any financial commitment extending beyond 24
months from the date hereof;
(W) pay, discharge, settle or compromise any claim, action,
litigation, arbitration or proceeding, other than any such payment, discharge,
settlement or compromise in the ordinary course of business consistent with
past practice that involves solely money damages in the amount not in excess of
$25,000 individually or $50,000 in the aggregate, and that does not create
negative precedent for other pending or potential claims, actions, litigation,
arbitration or proceedings;
(X) foreclose upon or take a deed or title to any commercial real
estate without first conducting a Phase I environmental assessment of the
property or foreclose upon any commercial real estate if such environmental
assessment indicates the presence of a Materials of Environmental Concern;
(Y) purchase or sell any mortgage loan servicing rights other than in
the ordinary course of business consistent with past practice;
(Z) issue any broadly distributed communication of a general nature to
employees relating to the Merger or Bank Merger (including general
communications relating to benefits and compensation) without prior consultation
with OFC and, to the extent relating to post-Closing employment, benefit or
compensation information without the prior consent of OFC or issue any broadly
distributed communication of a general nature to customers relating to the
Merger or Bank Merger without the prior approval of OFC (which shall not be
unreasonably delayed or withheld), except as required by law; or
(AA) agree to do any of the foregoing.
6.2. Current Information.
6.2.1. During the period from the date of this Agreement to the earlier of
the termination of this Agreement or the Effective Time, GCB will cause one or
more of its representatives to confer with representatives of OFC and report the
general status of its ongoing operations at such times as OFC may reasonably
request. GCB will promptly notify OFC of any material change in the normal
course of its business or in the operation of its properties and, to the extent
permitted by applicable law, of any governmental complaints, investigations or
hearings (or communications indicating that the same may be contemplated), or
the institution or the threat of material litigation involving GCB or any GCB
Subsidiary. Without limiting the foregoing, senior officers of OFC and GCB shall
meet on a reasonably regular basis (expected to be at least monthly) to review
the financial and operational affairs of GCB and its Subsidiaries, in accordance
with applicable law, and GCB shall give due consideration to OFC's input on such
matters, with the understanding that, notwithstanding any other provision
contained in this Agreement, neither OFC nor any OFC Subsidiary shall under any
circumstance be permitted to exercise control of GCB or any GCB Subsidiary prior
to the Effective Time.
6.2.2. GCB and OFC shall meet on a regular basis to discuss and plan for
the conversion of GC Bank's data processing and related electronic informational
systems to those used by Oritani Savings Bank, which planning shall include, but
not be limited to, discussion of the possible termination by GC Bank of
third-party service provider arrangements effective at the Effective Time or at
a date thereafter, non-renewal of personal property leases and software licenses
used by GC Bank in connection with its systems operations, retention of outside
consultants and additional employees to assist with the conversion, and
outsourcing, as appropriate, of proprietary or self-provided system services, it
being understood that GC Bank shall not be obligated to take any such action
prior to the Effective Time and, unless GC Bank otherwise agrees, no conversion
shall take place prior to the Effective Time. In the event that GC Bank takes,
at the request of Oritani Savings Bank, any action relative to third parties to
facilitate the conversion that results in the imposition of any termination fees
or charges, Oritani Savings Bank shall indemnify GC Bank for any such fees and
charges, and the costs of reversing the conversion process, if for any reason
the Merger is not consummated for any reason other than a breach of this
Agreement by GCB, or a termination of this Agreement under Section 11.1.8 or
11.1.9.
6.2.3. GC Bank shall provide Oritani Savings Bank, within fifteen (15)
business days of the end of each calendar month, a written list of nonperforming
assets. The term "nonperforming assets," for purposes of this subsection, means
(i) loans that are "troubled debt restructuring" as defined in Statement of
Financial Accounting Standards No. 15, "Accounting by Debtors and Creditors for
Troubled Debt Restructuring," (ii) loans on nonaccrual, (iii) real estate owned,
(iv) all loans ninety (90) days or more past due, (iv) impaired loans; and (v)
investment securities the decline in value of which is determined to be "other
than temporarily impaired." On a monthly basis, GCB shall provide OFC with a
schedule of all loan approvals and purchases of securities by GCB Bank, which
schedule shall indicate the loan amount, loan type and other material features
of the loan and the purchase price, maturity, principal amount and other
material features of the securities purchased.
6.2.4. GCB shall promptly inform OFC upon receiving notice of any legal,
administrative, arbitration or other proceedings, demands, notices, audits or
investigations (by any federal, state or local commission, agency or board)
relating to the alleged liability of GCB or any GCB Subsidiary under any labor
or employment law.
6.2.5. Notwithstanding anything to the contrary contained in this Article
VI, GCB shall not be required to take any action that would provide access to or
disclose information where such access or disclosure, in GCB's reasonable
judgment would violate or prejudice the rights or business interests or
confidences of any customer or other person, would violate any law or any
agreement to which GCB or any GCB Subsidiary is bound, or would result in the
waiver by it of the privilege protecting communications between it and any of
its counsel.
6.3. Access to Properties and Records.
Subject to Section 12.1 hereof, prior to the earlier of the termination of
this Agreement or the Closing Date, GCB shall permit OFC reasonable access upon
reasonable notice to its properties and those of the GCB Subsidiaries, and shall
disclose and make available to OFC during normal business hours all of its
books, papers and records relating to the assets, properties, operations,
obligations and liabilities, including, but not limited to, all books of account
(including the general ledger), tax records, minute books of directors' (other
than minutes that discuss any of the transactions contemplated by this Agreement
or any other subject matter GCB reasonably determines should be treated as
confidential) and shareholders' meetings, organizational documents, Bylaws,
material contracts and agreements, filings with any regulatory authority,
litigation files, plans affecting employees, and any other business activities
or prospects in which OFC may have a reasonable interest; provided, however,
that GCB shall not be required to take any action that would provide access to
or to disclose information where such access or disclosure would violate or
prejudice the rights or business interests or confidences of any customer or
other person, would violate any law or any agreement to which GCB or any GCB
Subsidiary is bound, or would result in the waiver by it of the privilege
protecting communications between it and any of its counsel. GCB shall provide
and shall request its auditors to provide OFC with such historical financial
information regarding it (and related audit reports and consents) as OFC may
reasonably request for securities disclosure purposes. OFC shall use
commercially reasonable efforts to minimize any interference with GCB's regular
business operations during any such access to GCB's property, books and records.
GCB and each GCB Subsidiary shall permit OFC, at its expense, to cause a "phase
I environmental audit" and a "phase II environmental audit" to be performed at
any physical location owned or occupied by GCB or any GCB Subsidiary. In the
event any subsurface or phase II site assessments are conducted, OFC shall
indemnify GCB and its Subsidiaries for all costs and expenses associated with
returning the property to its previous condition or otherwise resulting or
relating to any such investigation or assessments.
6.4. Financial and Other Statements.
6.4.1. Promptly upon receipt thereof, GCB will furnish to OFC copies of
each annual, interim or special audit of the books of GCB and the GCB
Subsidiaries made by its independent auditors and copies of all internal control
reports submitted to GCB by such auditors in connection with each annual,
interim or special audit of the books of GCB and the GCB Subsidiaries made by
such auditors.
6.4.2. As soon as reasonably available, but in no event later than the date
such documents are filed with the SEC, GCB will notify OFC and make available to
OFC the Securities Documents filed by it with the SEC under the Securities Laws.
GCB will furnish to OFC copies of all documents, statements and reports as it or
any GCB Subsidiary shall send to its shareholders, the FDIC, the FRB, the
Department or any other regulatory authority, except as legally prohibited
thereby. Within 25 days after the end of each month, GCB will deliver to OFC a
consolidated balance sheet and a consolidated statement of income, without
related notes, for such month prepared in accordance with current financial
reporting practices.
6.4.3. GCB will advise OFC promptly of the receipt of any examination
report of any Bank Regulator with respect to the condition or activities of GCB
or any of the GCB Subsidiaries.
6.4.4. With reasonable promptness, GCB will furnish to OFC such additional
financial data that GCB possesses and as OFC may reasonably request, including
without limitation, detailed monthly financial statements and loan reports.
6.5. Maintenance of Insurance.
GCB shall maintain, and cause each GCB Subsidiary to maintain, insurance in
such amounts as are reasonable to cover such risks as are customary in relation
to the character and location of theirs properties and the nature of their
business
6.6. Disclosure Supplements.
From time to time prior to the earlier of the termination of this Agreement
or the Closing Date, GCB will promptly supplement or amend the GCB DISCLOSURE
SCHEDULE delivered in connection herewith 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 GCB DISCLOSURE
SCHEDULE or which is necessary to correct any information in such GCB DISCLOSURE
SCHEDULE which has been rendered materially inaccurate thereby. No supplement or
amendment to such GCB DISCLOSURE SCHEDULE shall have any effect for the purpose
of determining satisfaction of the conditions set forth in Article IX.
6.7. Consents and Approvals of Third Parties.
GCB shall use all commercially reasonable efforts to obtain as soon as
practicable all consents and approvals necessary or desirable for the
consummation of the transactions contemplated by this Agreement.
6.8. All Reasonable Efforts.
Subject to the terms and conditions herein provided, GCB agrees to use all
commercially reasonable efforts to take, or cause to be taken, all action and to
do, or cause to be done, all things necessary, proper or advisable under
applicable laws and regulations to consummate and make effective the
transactions contemplated by this Agreement.
6.9. Failure to Fulfill Conditions.
In the event that GCB determines that a condition to its obligation to
complete the Merger cannot be fulfilled and that it will not waive that
condition, it will promptly notify OFC.
6.10. No Solicitation.
(a) GCB shall not, and shall cause its Subsidiaries and the respective
officers, directors, employees, investment bankers, financial advisors,
attorneys, accountants, consultants, affiliates and other agents (collectively,
the "Representatives") not to, directly or indirectly, (i) initiate, solicit,
induce or knowingly encourage, or take any action to facilitate the making of,
any inquiry, offer or proposal which constitutes, or could reasonably be
expected to lead to, an Acquisition Proposal; (ii) participate in any
discussions or negotiations regarding any Acquisition Proposal or furnish, or
otherwise afford access, to any Person (other than OFC) any information or data
with respect to GCB or any of its Subsidiaries or otherwise relating to an
Acquisition Proposal; (iii) release any Person from, waive any provisions of, or
fail to enforce any confidentiality agreement or standstill agreement to which
GCB is a party; or (iv) enter into any agreement, agreement in principle or
letter of intent with respect to any Acquisition Proposal or approve or resolve
to approve any Acquisition Proposal or any agreement, agreement in principle or
letter of intent relating to an Acquisition Proposal. Any violation of the
foregoing restrictions by GCB or any Representative, whether or not such
Representative is so authorized and whether or not such Representative is
purporting to act on behalf of GCB or otherwise, shall be deemed to be a breach
of this Agreement by GCB. GCB and its Subsidiaries shall, and shall cause each
of GCB Representative to, immediately cease and cause to be terminated any and
all existing discussions, negotiations, and communications with any Persons with
respect to any existing or potential Acquisition Proposal.
For purposes of this Agreement, "Acquisition Proposal" shall mean any
inquiry, offer or proposal (other than an inquiry, offer or proposal from OFC),
whether or not in writing, contemplating, relating to, or that could reasonably
be expected to lead to, an Acquisition Transaction. For purposes of this
Agreement, "Acquisition Transaction" shall mean (A) any transaction or series of
transactions involving any merger, consolidation, recapitalization, share
exchange, liquidation, dissolution or similar transaction involving GCB or any
of its Subsidiaries; (B) any transaction pursuant to which any third party or
group acquires or would acquire (whether through sale, lease or other
disposition), directly or indirectly, any assets of GCB or any of its
Subsidiaries representing, in the aggregate, fifteen percent (15%) or more of
the assets of GCB and its Subsidiaries on a consolidated basis; (C) any
issuance, sale or other disposition of (including by way of merger,
consolidation, share exchange or any similar transaction) securities (or
options, rights or warrants to purchase or securities convertible into, such
securities) representing fifteen percent (15%) or more of the votes attached to
the outstanding securities of GCB or any of its Subsidiaries; (D) any tender
offer or exchange offer that, if consummated, would result in any third party or
group beneficially owning fifteen percent (15%) or more of any class of equity
securities of GCB or any of its Subsidiaries; or (E) any transaction which is
similar in form, substance or purpose to any of the foregoing transactions, or
any combination of the foregoing.
(b) Notwithstanding Section 6.10(a), GCB may take any of the actions
described in clause (ii) of Section 6.10(a) if, but only if, (i) GCB has
received a bona fide unsolicited written Acquisition Proposal that did not
result from a breach of this Section 6.10; (ii) GCB Board determines in good
faith, after consultation with and having considered the advice of its outside
legal counsel and its independent financial advisor, that (A) such Acquisition
Proposal constitutes or is reasonably likely to lead to a Superior Proposal and
(B) the failure to take such actions would be inconsistent with its fiduciary
duties to GCB's shareholders under applicable law; (iii) GCB has provided OFC
with at least three (3) Business Days' prior notice of such determination; and
(iv) prior to furnishing or affording access to any information or data with
respect to GCB or any of its Subsidiaries or otherwise relating to an
Acquisition Proposal, GCB receives from such Person a confidentiality agreement
with terms no less favorable to GCB than those contained in the August 31, 2007
Confidentiality Agreement. GCB shall promptly provide to OFC any non-public
information regarding GCB or its Subsidiaries provided to any other Person that
was not previously provided to OFC, such additional information to be provided
no later than the date of provision of such information to such other party.
For purposes of this Agreement, "Superior Proposal" shall mean any bona
fide written proposal (on its most recently amended or modified terms, if
amended or modified) made by a third party to enter into an Acquisition
Transaction on terms that GCB Board determines in its good faith judgment, after
consultation with and having considered the advice of outside legal counsel and
a financial advisor (i) would, if consummated, result in the acquisition of all,
but not less than all, of the issued and outstanding shares of GCB Common Stock
or all, or substantially all, of the assets of GCB and its Subsidiaries on a
consolidated basis; (ii) would result in a transaction that (A) involves
consideration to the holders of the shares of GCB Common Stock that is more
favorable, from a financial point of view, than the consideration to be paid to
GCB's shareholders pursuant to this Agreement, considering, among other things,
the nature of the consideration being offered and any material regulatory
approvals or other risks associated with the timing of the proposed transaction
beyond or in addition to those specifically contemplated hereby, and which
proposal is not conditioned upon obtaining additional financing and (B) is, in
light of the other terms of such proposal, more favorable to GCB's shareholders
than the Merger and the transactions contemplated by this Agreement; and (iii)
is reasonably likely to be completed on the terms proposed, in each case taking
into account all legal, financial, regulatory and other aspects of the proposal.
(c) GCB shall promptly (and in any event within twenty-four (24) hours)
notify OFC in writing if any proposals or offers are received by, any
information is requested from, or any negotiations or discussions are sought to
be initiated or continued with, GCB or any GCB Representatives, in each case in
connection with any Acquisition Proposal, and such notice shall indicate the
name of the Person initiating such discussions or negotiations or making such
proposal, offer or information request and the material terms and conditions of
any proposals or offers (and, in the case of written materials relating to such
proposal, offer, information request, negotiations or discussion, providing
copies of such materials (including e-mails or other electronic communications)
unless (i) such materials constitute confidential information of the party
making such offer or proposal under an effective confidentiality agreement, (ii)
disclosure of such materials jeopardizes the attorney-client privilege or (iii)
disclosure of such materials contravenes any law, rule, regulation, order,
judgment or decree. GCB agrees that it shall keep OFC informed, on a current
basis, of the status and terms of any such proposal, offer, information request,
negotiations or discussions (including any amendments or modifications to such
proposal, offer or request).
(d) Neither the GCB Board nor any committee thereof shall (i) withdraw,
qualify or modify, or propose to withdraw, qualify or modify, in a manner
adverse to OFC in connection with the transactions contemplated by this
Agreement (including the Merger), the GCB Recommendation (as defined in Section
8.1), or make any statement, filing or release, in connection with GCB
Shareholders Meeting or otherwise, inconsistent with the GCB Recommendation (it
being understood that taking a neutral position or no position with respect to
an Acquisition Proposal shall be considered an adverse modification of the GCB
Recommendation); (ii) approve or recommend, or propose to approve or recommend,
any Acquisition Proposal; or (iii) enter into (or cause GCB or any of its
Subsidiaries to enter into) any letter of intent, agreement in principle,
acquisition agreement or other agreement (A) related to any Acquisition
Transaction (other than a confidentiality agreement entered into in accordance
with the provisions of Section 6.10(b)) or (B) requiring GCB to abandon,
terminate or fail to consummate the Merger or any other transaction contemplated
by this Agreement.
(e) Notwithstanding Section 6.10(d), prior to the date of GCB Shareholders
Meeting, the GCB Board may approve or recommend to the shareholders of GCB a
Superior Proposal and withdraw, qualify or modify GCB Recommendation in
connection therewith (a "GCB Subsequent Determination") after the fifth (5th)
Business Day following OFC's receipt of a notice (the "Notice of Superior
Proposal") from GCB advising OFC that the GCB Board has decided that a bona fide
unsolicited written Acquisition Proposal that it received (that did not result
from a breach of this Section 6.10) constitutes a Superior Proposal (it being
understood that GCB shall be required to deliver a new Notice of Superior
Proposal in respect of any revised Superior Proposal from such third party or
its affiliates that GCB proposes to accept) if, but only if, (i) the GCB Board
has reasonably determined in good faith, after consultation with and having
considered the advice of outside legal counsel and a financial advisor, that it
is required to take such actions to comply with its fiduciary duties to GCB's
shareholders under applicable law, (ii) during the five (5) Business Day Period
after receipt of the Notice of Superior Proposal by OFC, GCB and the GCB Board
shall have cooperated and negotiated in good faith with OFC to make such
adjustments, modifications or amendments to the terms and conditions of this
Agreement as would enable GCB to proceed with the GCB Recommendation without a
GCB Subsequent Determination; provided, however, that OFC shall not have any
obligation to propose any adjustments, modifications or amendments to the terms
and conditions of this Agreement and (iii) at the end of such five (5) Business
Day period, after taking into account any such adjusted, modified or amended
terms as may have been proposed by OFC since its receipt of such Notice of
Superior Proposal, GCB Board has again in good faith made the determination (A)
in clause (i) of this Section 6.10(e) and (B) that such Acquisition Proposal
constitutes a Superior Proposal. Notwithstanding the foregoing, the changing,
qualifying or modifying of the GCB Recommendation or the making of a GCB
Subsequent Determination by the GCB Board shall not change the approval of the
GCB Board for purposes of causing any Takeover Laws to be inapplicable to this
Agreement and the GCB Voting Agreements and the transactions contemplated hereby
and thereby, including the Merger.
(f) Nothing contained in this Section 6.10 shall prohibit GCB or the GCB
Board from complying with GCB's obligations required under Rules 14d-9 and
14e-2(a) promulgated under the Exchange Act; provided, however, that any such
disclosure relating to an Acquisition Proposal shall be deemed a change in GCB
Recommendation unless GCB Board reaffirms GCB Recommendation in such disclosure.
6.11. Reserves and Merger-Related Costs.
During the period from the date of this Agreement through the earlier of
the termination of this Agreement or the Closing Date, GCB agrees to consult
with OFC with respect to its loan, litigation and real estate valuation policies
and practices (including loan classifications and levels of reserves). OFC and
GCB shall also consult with respect to the character, amount and timing of
restructuring charges to be taken by each of them in connection with the
transactions contemplated hereby and shall take such charges as OFC shall
reasonably request and which are not inconsistent with GAAP, provided that no
such actions need be effected until OFC shall have irrevocably certified to GCB
that all conditions set forth in Article IX to the obligation of OFC to
consummate the transactions contemplated hereby (other than the delivery of
certificates or opinions) have been satisfied or, where legally permissible,
waived.
6.12. Board of Directors and Committee Meetings.
GCB and GC Bank shall permit representatives of OFC (no more than two) to
attend any meeting of the Board of Directors of GCB and/or GC Bank or the
Executive and Loan Committees thereof as an observer, provided that neither GCB
nor GC Bank shall be required to permit the OFC representative to remain present
during any confidential discussion of this Agreement and the transactions
contemplated hereby or any third party proposal to acquire control of GCB or GC
Bank or during any other matter that the respective Board of Directors has
reasonably determined to be confidential with respect to OFC's participation or
the disclosure of which would violate any attorney client privilege.
6.13. GCB DRIP
Promptly following execution of this Agreement, GCB shall take such steps
as necessary to suspend the GCB DRIP until the earlier of the termination of
this Agreement or the Closing Date, and if the Closing Date occurs, to terminate
the GCB DRIP.
ARTICLE VII
COVENANTS OF OFC
7.1. Conduct of Business.
During the period from the date of this Agreement to the Closing Date,
except with the written consent of GCB, which consent will not be unreasonably
withheld, OFC will, and it will cause each OFC Subsidiary to use reasonable
efforts to preserve intact its business organization and assets and maintain its
rights and franchises; and voluntarily take no action that would: (i) adversely
affect the ability of the parties to obtain the Regulatory Approvals or other
approvals of Governmental Entities required for the transaction contemplated
hereby, or materially increase the period of time necessary to obtain such
approvals; (ii) adversely affect its ability to perform its covenants and
agreements under this Agreement; or (iii) result in the representations and
warranties contained in Article V of this Agreement not being true and correct
on the date of this Agreement or at any future date on or prior to the Closing
Date or in any of the conditions set forth in Article IX hereof not being
satisfied.
7.2. Current Information.
During the period from the date of this Agreement to the Closing Date, OFC
will cause one or more of its representatives to confer with representatives of
GCB and report the general status of its financial condition, operations and
business and matters relating to the completion of the transactions contemplated
hereby, at such times as GCB may reasonably request. OFC will promptly notify
GCB, to the extent permitted by applicable law, of any governmental complaints,
investigations or hearings (or communications indicating that the same may be
contemplated), or the institution of material litigation involving OFC and any
OFC Subsidiary. OFC shall be reasonably responsive to requests by GCB for access
to such information and personnel regarding OFC and its Subsidiaries as may be
reasonably necessary for GCB to confirm that the representations and warranties
of OFC contained herein are true and correct and that the covenants of OFC
contained herein have been performed in all material respects; provided,
however, that OFC shall not be required to take any action that would provide
access to or to disclose information where such access or disclosure, in OFC's
reasonable judgment, would interfere with the normal conduct of OFC's business
or would violate or prejudice the rights or business interests or confidences of
any customer or other person or would result in the waiver by it of the
privilege protecting communications between it and any of its counsel.
7.3. Financial and Other Statements.
OFC will furnish to GCB copies of all documents, statements and reports as
it or any OFC Subsidiary files with the OTS or any other Bank Regulator
authority with respect to the Merger. OFC will furnish to GCB copies of all
documents, statements and reports as it or any OFC Subsidiary sends to the
shareholders of OFC. OFC will advise GCB promptly of the receipt of any
examination report of any Bank Regulator with respect to the condition or
activities of OFC or any OFC subsidiary.
7.4. Disclosure Supplements.
During the period from the date of this Agreement to the Closing Date, OFC
will promptly supplement or amend the OFC DISCLOSURE SCHEDULE delivered in
connection herewith with respect to any material 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 OFC DISCLOSURE SCHEDULE or which
is necessary to correct any information in such OFC DISCLOSURE SCHEDULE which
has been rendered inaccurate thereby. No supplement or amendment to such OFC
DISCLOSURE SCHEDULE shall have any effect for the purpose of determining
satisfaction of the conditions set forth in Article IX.
7.5. Consents and Approvals of Third Parties.
OFC shall use all commercially reasonable efforts to obtain as soon as
practicable all consents and approvals, necessary or desirable for the
consummation of the transactions contemplated by this Agreement and shall not
take any action or omit to take any action the effect of which would be to
adversely affect its ability to obtain Regulatory Approvals or materially
increase the period of time necessary to obtain such approvals.
7.6. All Reasonable Efforts.
Subject to the terms and conditions herein provided, OFC agrees to use all
commercially reasonable efforts to take, or cause to be taken, all action and to
do, or cause to be done, all things necessary, proper or advisable under
applicable laws and regulations to consummate and make effective the
transactions contemplated by this Agreement.
7.7. Failure to Fulfill Conditions.
In the event that OFC determines that a condition to its obligation to
complete the Merger cannot be fulfilled and that it will not waive that
condition, it will promptly notify GCB.
7.8. Employee Benefits.
7.8.1. OFC will review all GCB Compensation and Benefit Plans to determine
whether to maintain, terminate or continue such plans. In the event employee
compensation and/or benefits as currently provided by GCB or any GCB Subsidiary
are changed or terminated by OFC, in whole or in part, OFC shall provide
Continuing Employees (as defined below) with compensation and benefits that are,
in the aggregate, substantially similar to the compensation and benefits
provided to similarly situated employees of OFC or applicable OFC Subsidiary (as
of the date any such compensation or benefit is provided). Employees of GCB or
any GCB Subsidiary who become participants in an OFC Compensation and Benefit
Plan shall, for purposes of determining eligibility for and for any applicable
vesting periods of such employee benefits only (and not for benefit accrual
purposes unless specifically set forth herein) be given credit for meeting
eligibility and vesting requirements in such plans for service as an employee of
GCB or GC Bank or any predecessor thereto prior to the Effective Time, provided,
however, that credit for prior service shall not be given for any purpose under
the OFC ESOP, and provided further, that credit for benefit accrual purposes
will be given only for purposes of OFC vacation policies or programs and for
purposes of the calculation of severance benefits under any severance
compensation plan of OFC. This Agreement shall not be construed to limit the
ability of OFC or Oritani Savings Bank to terminate the employment of any
employee or to review employee benefits programs from time to time and to make
such changes (including terminating any program) as they deem appropriate.
7.8.2. In the event of any termination or consolidation of any GCB health
plan with any OFC health plan, OFC shall make available to employees of GCB or
any GCB Subsidiary who continue employment with OFC or a OFC Subsidiary
("Continuing Employees") and their dependents employer-provided health coverage
on the same basis as it provides such coverage to OFC employees. Unless a
Continuing Employee affirmatively terminates coverage under a GCB health plan
prior to the time that such Continuing Employee becomes eligible to participate
in the OFC health plan, no coverage of any of the Continuing Employees or their
dependents shall terminate under any of the GCB health plans prior to the time
such Continuing Employees and their dependents become eligible to participate in
the health plans, programs and benefits common to all employees of OFC and their
dependents. In the event of a termination or consolidation of any GCB health
plan, terminated GCB employees and qualified beneficiaries will have the right
to continued coverage under group health plans of OFC in accordance with COBRA,
consistent with the provisions below. In the event of any termination of any GCB
health plan, or consolidation of any GCB health plan with any OFC health plan,
any coverage limitation under the OFC health plan due to any pre-existing
condition shall be waived by the OFC health plan to the degree that such
condition was covered by the GCB health plan and such condition would otherwise
have been covered by the OFC health plan in the absence of such coverage
limitation. All GCB Employees who cease participating in an GCB health plan and
become participants in a comparable OFC health plan shall receive credit for any
co-payment and deductibles paid under GCB's health plan for purposes of
satisfying any applicable deductible or out-of-pocket requirements under the OFC
health plan, upon substantiation, in a form satisfactory to OFC that such
co-payment and/or deductible has been satisfied.
7.8.3. The payments and benefits that would be required to be made under
the employment and change in control agreements between (i) GCB and/or GC Bank
and (ii) each of the following individuals, Xxxxxxxx Xxxxxx, Xxxx Xxxxxxxxxxxx,
Xxxxxxx Xxxxxx, Xxxxx Xxxxxxxxxx, Xxxxx Xxxxx, C. Xxxx Xxxxxxx, Xxxxxx X. Xxxxx,
Xxxx Xxxxx, Xxxxxx Rough, and Xxxxx Xxxxxxxxxx, assuming a termination of
employment as of November 1, 2007, shall be calculated in accordance with the
principles set forth in GCB DISCLOSURE SCHEDULE 7.8.3, which includes
explanatory detail and analysis as to the method of the calculation of the
payments and benefits due. Each of the executives referenced in this Section
7.8.3 shall sign an acknowledgement and release upon receipt of the payments set
forth therein, a form of which is included in GCB DISCLOSURE SCHEDULE 7.8.3.
7.8.4. Any employee of GCB or any GCB Subsidiary who is not a party to an
employment, change in control or severance agreement or contract providing
severance payments shall be entitled to receive, upon a termination of
employment in connection with the Merger, which shall include any termination
(other than a termination for cause) of any employee of GCB or any GCB
Subsidiary within six months of the Closing Date, two weeks pay for each year of
service with GCB, with a minimum severance of four, and a maximum severance of
twenty six, weeks' pay.
7.8.5. OFC shall honor the Executive Supplemental Retirement Income
Agreements for C. Xxxx Xxxxxxxx, and Xxxxxx X. Xxxxx, effective January 1, 1999,
in accordance with their terms.
7.8.6. Within 30 days prior to the Effective Time, GC Bank shall, in
accordance with applicable law and terms of the plan document, take all action
as necessary to terminate the Director Supplemental Retirement Income Agreement
for Xxxxxx X. Xxxxxxxxx, dated March 1, 2004 (the "Director SERP"), including
amending the SERP as may be required prior to December 31, 2007, in order to
conform such agreement to Code Section 409A and the regulations and other
guidance issued thereunder ("Treasury Regulations"). In accordance herewith, GCB
or GC Bank shall provide for the payment of all remaining contributions the SERP
to the participant or such participant's retirement income trust fund (a
so-called "secular trust" or grantor trust established by the individual
participant) at the Effective Time, in accordance with Treasury Regulation
1.409A-3(j)(4)(ix)(B). In addition, within 30 days prior to the Effective Time,
GC Bank shall, in accordance with applicable law and the terms of the relevant
plan documents, take all action as is necessary to terminate the Director
Deferred Compensation Plans of GC Bank, effective February 1, 1999, which
Director Deferred Compensation Plans are "account balance plans" within the
meaning of Treasury Regulation Section 1.409A-1(c)(2)(i)(A), and the GC Bank
Directors Emeritus Plans, effective February 1, 1999, which Directors Emeritus
Plans are "non-account balance plans" within the meaning of Treasury Regulation
Section 1.409A-1(c)(2)(i)(C) (collectively, the Director Deferred Compensation
Plans and the Directors Emeritus Plans shall be referred to as the "Directors
Plans"). In accordance herewith, and prior to the Closing Date, GC Bank shall
amend the Director Plans in order to conform such plans to the Code Section 409A
and the Treasury Regulations issued thereunder. GCB and/or GC Bank shall
distribute benefits due to the participants under such Director Plans at the
Effective Time, in accordance with Treasury Regulation Section
1.409A-3(j)(4)(ix)(B). GCB and/or GC Bank shall obtain from each participant in
the Director SERP and in the Director Plans an acknowledgement verifying the
payments of the amounts due thereunder and releasing GCB, GC Bank, OFC and any
OFC Subsidiary from any obligations thereunder.
7.8.7. On the Closing Date, OFC (or if requested by OFC, GCB) shall make
the cash payment to Xxxxxxx X. Xxxxx, Xx. as set forth in OFC DISCLOSURE
SCHEDULE 7.8.7 (which cannot be amended without GCB's written consent) in full
satisfaction of all obligations under the employment agreement between GCB and
GC Bank and Xxxxxxx X. Xxxxx, Xx. and under the Executive Supplemental
Retirement Income Agreement for Xxxxxxx X. Xxxxx, Xx. (the "Bruno SERP").
Xxxxxxx X. Xxxxx, Xx. shall execute an acknowledgment of payment and a release
of any further claims under these agreements, using the form attached to OFC
Disclosure Schedule 7.8.7. In connection with the execution of this Agreement,
OFC, Oritani Savings Bank and Xxxxxxx X. Xxxxx, Xx. shall execute the
non-compete agreement attached to OFC DISCLOSURE SCHEDULE 7.8.7. The parties
will take all action to terminate the Bruno SERP at the Effective Date following
the cash payment set forth above.
7.9. Directors and Officers Indemnification and Insurance.
7.9.1. For a period of six years after the Effective Time, OFC shall
indemnify, defend and hold harmless each person who is now, or who has been at
any time before the date hereof or who becomes before the Effective Time, an
officer, director or employee of GCB or a GCB Subsidiary (the "Indemnified
Parties") against all losses, claims, damages, costs, expenses (including
attorney's fees), liabilities or judgments or amounts that are paid in
settlement (which settlement shall require the prior written consent of OFC,
which consent shall not be unreasonably withheld) of or in connection with any
claim, action, suit, proceeding or investigation, whether civil, criminal, or
administrative (each a "Claim"), in which an Indemnified Party is, or is
threatened to be made, a party or witness in whole or in part on or arising in
whole or in part out of the fact that such person is or was a director, officer
or employee of GCB or a GCB Subsidiary if such Claim pertains to any matter of
fact arising, existing or occurring at or before the Effective Time (including,
without limitation, the Merger and the other transactions contemplated hereby),
regardless of whether such Claim is asserted or claimed before, or after, the
Effective Time, to the fullest extent permitted under applicable state or
Federal law (including OTS Regulations), OFC's Certificate of Incorporation and
Bylaws, and under GCB's Certificate of Incorporation or Charter and Bylaws. OFC
shall pay expenses in advance of the final disposition of any such action or
proceeding to each Indemnified Party to the full extent permitted by applicable
state or Federal law (including OTS Regulations) upon receipt of an undertaking
to repay such advance payments if he shall be adjudicated or determined to be
not entitled to indemnification in the manner set forth below. Any Indemnified
Party wishing to claim indemnification under this Section 7.9.1 upon learning of
any Claim, shall notify OFC (but the failure so to notify OFC shall not relieve
it from any liability which it may have under this Section 7.9.1, except to the
extent such failure materially prejudices OFC) and shall deliver to OFC the
undertaking referred to in the previous sentence.
7.9.2. In the event that either OFC or any of its successors or assigns (i)
consolidates with or merges into any other person and shall not be the
continuing or surviving bank or entity of such consolidation or merger or (ii)
transfers all or substantially all of its properties and assets to any person,
then, and in each such case, proper provision shall be made so that the
successors and assigns of OFC shall assume the obligations set forth in this
Section 7.9.
7.9.3. OFC shall maintain, or shall cause Oritani Savings Bank to maintain,
in effect for six years following the Effective Time, the current directors' and
officers' liability insurance policies covering the officers and directors of
GCB (provided, that OFC may substitute therefor policies of at least the same
coverage containing terms and conditions which are not materially less
favorable) with respect to matters occurring at or prior to the Effective Time;
provided, however, that in no event shall OFC be required to expend pursuant to
this Section 7.9.3 more than 150% of the annual cost currently expended by GCB
with respect to such insurance (the "Maximum Amount"); provided, further, that
if the amount of the annual premium necessary to maintain or procure such
insurance coverage exceeds the Maximum Amount, OFC shall maintain the most
advantageous policies of directors' and officers' insurance obtainable for a
premium equal to the Maximum Amount. In connection with the foregoing, GCB
agrees in order for OFC to fulfill its agreement to provide directors and
officers liability insurance policies for six years to provide such insurer or
substitute insurer with such reasonable and customary representations as such
insurer may request with respect to the reporting of any prior claims.
7.9.4. The obligations of OFC provided under this Section 7.9 are intended
to be enforceable against OFC directly by the Indemnified Parties and shall be
binding on all respective successors and permitted assigns of OFC.
7.10. Stock Listing.
As of or prior to the Effective Time, OFC shall list on the Nasdaq (or such
other national securities exchange on which the shares of the OFC Common Stock
shall be listed as of the date of consummation of the Merger), subject to
official notice of issuance, the shares of OFC Common Stock to be issued in the
Merger.
7.11. Stock and Cash Reserve.
OFC agrees at all times from the date of this Agreement until the Merger
Consideration has been paid in full to reserve a sufficient number of shares of
its common stock and to maintain sufficient liquid accounts or borrowing
capacity to fulfill its obligations under this Agreement.
7.12. Section 16(b) Exemption
OFC and GCB agree that, in order to most effectively compensate and retain
GCB Insiders (as defined below) in connection with the Merger, both prior to and
after the Effective Time, it is desirable that GCB Insiders not be subject to a
risk of liability under Section 16(b) of the Exchange Act to the fullest extent
permitted by applicable law in connection with the conversion of shares of GCB
Common Stock into shares of OFC in the Merger, and for that compensatory and
retentive purpose agree to the provisions of this Section 7.12. Assuming that
GCB delivers to OFC the GCB Section 16 Information (as defined below) in a
timely fashion prior to the Effective Time, the Board of Directors of OFC, or a
committee of non-employee directors thereof (as such term is defined for
purposes of Rule 16b-3(d) under the Exchange Act), shall reasonably promptly
thereafter and in any event prior to the Effective Time adopt a resolution
providing in substance that the receipt by the GCB Insiders (as defined below)
of OFC Common Stock in exchange for shares of GCB Common Stock, pursuant to the
transactions contemplated hereby and to the extent such securities are listed in
the GCB Section 16 Information, are intended to be exempt from liability
pursuant to Section 16(b) under the Exchange Act to the fullest extent permitted
by applicable law. "GCB Section 16 Information" shall mean information accurate
in all material respects regarding the GCB Insiders, the number of shares of GCB
Common Stock held by each such GCB Insider and expected to be exchanged for OFC
Common Stock in the Merger. "GCB Insiders" shall mean those officers and
directors of GCB who are subject to the reporting requirements of Section 16(a)
of the Exchange Act and who are expected to be subject to Section 16(a) of the
Exchange Act with respect to OFC Common Stock subsequent to the Effective Time.
ARTICLE VIII
REGULATORY AND OTHER MATTERS
8.1. GCB and OFC Shareholder Meetings.
8.1.1. GCB will (i) as promptly as practicable after the Merger
Registration Statement is declared effective by the SEC, take all steps
necessary to duly call, give notice of, convene and hold a meeting of its
shareholders (the "GCB Shareholders Meeting"), for the purpose of considering
this Agreement and the Merger, and for such other purposes as may be, in GCB's
reasonable judgment, necessary or desirable, (ii) subject to Section 6.10, have
its Board of Directors recommend approval of this Agreement to the GCB
shareholders (the "GCB Recommendation").
8.1.2. OFC will (i) as promptly as practicable after the Merger
Registration Statement is declared effective by the SEC, take all steps
necessary to duly call, give notice of, convene and hold a meeting of its
shareholders (the "OFC Shareholders Meeting"), for the purpose of considering
this Agreement and the Merger, and for such other purposes as may be, in OFC's
reasonable judgment, necessary or desirable, (ii) subject to the next sentence,
have its Board of Directors recommend approval of this Agreement to the OFC
shareholders. The Board of Directors of OFC may fail to make such a
recommendation, or withdraw, modify or change any such recommendation only if
such Board of Directors, after having consulted with and considered the advice
of outside counsel to such Board, has determined that the making of such
recommendation, or the failure so to withdraw, modify or change its
recommendation, could reasonably be expected to constitute a breach of the
fiduciary duties of such directors under applicable law; and (iii) cooperate and
consult with GCB with respect to each of the foregoing matters.
8.2. Joint Proxy Statement-Prospectus.
8.2.1. For the purposes (x) of registering OFC Common Stock to be offered
to holders of GCB Common Stock in connection with the Merger with the SEC under
the Securities Act and (y) of holding the GCB Shareholders Meeting and the OFC
Shareholders Meeting, OFC shall draft and prepare, and GCB shall cooperate in
the preparation of, the Merger Registration Statement, including a combined
proxy statement and prospectus satisfying all applicable requirements of
applicable state securities and banking laws, and of the Securities Act and the
Exchange Act, and the rules and regulations thereunder (such proxy
statement/prospectus in the form mailed to the GCB shareholders, together with
any and all amendments or supplements thereto, being herein referred to as the
"Joint Proxy Statement-Prospectus"). OFC shall file the Merger Registration
Statement, including the Joint Proxy Statement-Prospectus, with the SEC. Each of
OFC and GCB shall use their reasonable best efforts to have the Merger
Registration Statement declared effective under the Securities Act as promptly
as practicable after such filing, and each of GCB and OFC shall thereafter
promptly mail the Joint Proxy Statement-Prospectus to the GCB shareholders. OFC
shall also use its reasonably best efforts to obtain all necessary state
securities law or "Blue Sky" permits and approvals required to carry out the
transactions contemplated by this Agreement, and GCB shall furnish all
information concerning GCB and the holders of GCB Common Stock as may be
reasonably requested in connection with any such action.
8.2.2. GCB shall provide OFC with any information concerning itself that
OFC may reasonably request in connection with the drafting and preparation of
the Joint Proxy Statement-Prospectus, and OFC shall notify GCB promptly of the
receipt of any comments of the SEC with respect to the Joint Proxy
Statement-Prospectus and of any requests by the SEC for any amendment or
supplement thereto or for additional information and shall provide to GCB
promptly copies of all correspondence between OFC or any of their
representatives and the SEC. OFC shall give GCB and its counsel the reasonable
opportunity to review and comment on the Joint Proxy Statement-Prospectus prior
to its being filed with the SEC and shall give GCB and its counsel the
reasonable opportunity to review and comment on all amendments and supplements
to the Joint Proxy Statement-Prospectus and all responses to requests for
additional information and replies to comments prior to their being filed with,
or sent to, the SEC. Each of OFC and GCB agrees to use all reasonable efforts,
after consultation with the other party hereto, to respond promptly to all such
comments of and requests by the SEC and to cause the Joint Proxy
Statement-Prospectus and all required amendments and supplements thereto to be
mailed to the holders of GCB Common Stock entitled to vote at the GCB
Shareholders Meeting hereof at the earliest practicable time.
8.2.3. GCB and OFC shall promptly notify the other party if at any time it
becomes aware that the Joint Proxy Statement-Prospectus or the Merger
Registration Statement contains any untrue statement of a material fact or omits
to state a material fact required to be stated therein or necessary to make the
statements contained therein, in light of the circumstances under which they
were made, not misleading. In such event, GCB shall cooperate with OFC in the
preparation of a supplement or amendment to such Joint Proxy
Statement-Prospectus that corrects such misstatement or omission, and OFC shall
file an amended Merger Registration Statement with the SEC, and each of GCB
shall mail an amended Joint Proxy Statement-Prospectus to the GCB shareholders.
If requested by OFC, GCB shall obtain a "comfort" letter from its independent
certified public accountant, dated as of the date of the Joint Proxy
Statement-Prospectus and updated as of the date of consummation of the Merger,
with respect to certain financial information regarding GCB, in form and
substance that is customary in transactions such as the Merger.
8.3. Regulatory Approvals.
Each of GCB and OFC will cooperate with the other and use all reasonable
efforts to promptly prepare all necessary documentation, to effect all necessary
filings and to obtain all necessary permits, consents, waivers, approvals and
authorizations of the SEC, the Bank Regulators and any other third parties and
governmental bodies necessary to consummate the transactions contemplated by
this Agreement. GCB and OFC will furnish each other and each other's counsel
with all information concerning themselves, their subsidiaries, directors,
officers and shareholders and such other matters as may be necessary or
advisable in connection with the Joint Proxy Statement-Prospectus and any
application, petition or any other statement or application made by or on behalf
of GCB or OFC to any Bank Regulatory or governmental body in connection with the
Merger, and the other transactions contemplated by this Agreement. GCB shall
have the right to review and approve in advance all characterizations of the
information relating to GCB and any of its Subsidiaries, which appear in any
filing made in connection with the transactions contemplated by this Agreement
with any Governmental Entity. OFC shall give GCB and its counsel the opportunity
to review and comment on each filing prior to its being filed with a Bank
Regulator and shall give GCB and its counsel the opportunity to review and
comment on all amendments and supplements to such filings and all responses to
requests for additional information and replies to comments prior to their being
filed with, or sent to, a Bank Regulator.
8.4. Affiliates.
8.4.1. GCB shall use all reasonable efforts to cause each director,
executive officer and other person who is an "affiliate" (for purposes of Rule
145 under the Securities Act) of GCB to deliver to OFC, as soon as practicable
after the date of this Agreement, and at least thirty (30) days prior to the
date of the GCB Shareholders Meeting, a written agreement, in the form of
Exhibit D hereto, providing that such person will not sell, pledge, transfer or
otherwise dispose of any shares of OFC Common Stock to be received by such
"affiliate," as a result of the Merger otherwise than in compliance with the
applicable provisions of the Securities Act and the rules and regulations
thereunder.
ARTICLE IX
CLOSING CONDITIONS
9.1. Conditions to Each Party's Obligations under this Agreement.
The respective obligations of each party under this Agreement shall be
subject to the fulfillment at or prior to the Closing Date of the following
conditions, none of which may be waived:
9.1.1. Shareholder Approvals. This Agreement and the transactions
contemplated hereby shall have been approved by the requisite vote of the
shareholders of GCB and the shareholders of OFC.
9.1.2. Injunctions. None of the parties hereto shall be subject to any
order, decree or injunction of a court or agency of competent jurisdiction that
enjoins or prohibits the consummation of the transactions contemplated by this
Agreement and no statute, rule or regulation shall have been enacted, entered,
promulgated, interpreted, applied or enforced by any Governmental Entity or Bank
Regulator, that enjoins or prohibits the consummation of the transactions
contemplated by this Agreement.
9.1.3. Regulatory Approvals. All Regulatory Approvals and other necessary
approvals, authorizations and consents of any Governmental Entities required to
consummate the transactions contemplated by this Agreement shall have been
obtained and shall remain in full force and effect and all waiting periods
relating to such approvals, authorizations or consents shall have expired; and
no such approval, authorization or consent shall include any condition or
requirement, excluding standard conditions that are normally imposed by the
regulatory authorities in bank merger transactions, that would, in the good
faith reasonable judgment of the Board of Directors of OFC, materially and
adversely affect the business, operations, financial condition, property or
assets of the combined enterprise of GCB, GC Bank and OFC or materially impair
the value of GCB or GC Bank to OFC.
9.1.4. Effectiveness of Merger Registration Statement. The Merger
Registration Statement shall have become effective under the Securities Act and
no stop order suspending the effectiveness of the Merger Registration Statement
shall have been issued, and no proceedings for that purpose shall have been
initiated or threatened by the SEC and, if the offer and sale of OFC Common
Stock in the Merger is subject to the blue sky laws of any state, shall not be
subject to a stop order of any state securities commissioner.
9.1.5. Nasdaq Listing. The shares of OFC Common Stock to be issued in the
Merger shall have been authorized for listing on the Nasdaq, subject to official
notice of issuance.
9.1.6. Tax Opinion. On the basis of facts, representations and assumptions
which shall be consistent with the state of facts existing at the Closing Date,
OFC shall have received an opinion of Xxxx Xxxxxx Xxxxxxxx & Xxxxxx, P.C.,
reasonably acceptable in form and substance to OFC, and GCB shall have received
an opinion of Xxxxxxx & Xxxxx LLP reasonably acceptable in form and substance to
GCB, each dated as of the Closing Date, substantially to the effect that for
federal income tax purposes, the Merger will qualify as a reorganization within
the meaning of Section 368(a) of the Code. In rendering the tax opinions
described in this Section 9.1.6, the law firms may require and rely upon
customary representations contained in certificates of officers of OFC and GCB
and their respective Subsidiaries.
9.2. Conditions to the Obligations of OFC under this Agreement.
The obligations of OFC under this Agreement shall be further subject to the
satisfaction of the conditions set forth in Sections 9.2.1 through 9.2.4 at or
prior to the Closing Date:
9.2.1. Representations and Warranties. Each of the representations and
warranties of GCB set forth in this Agreement shall be true and correct as of
the date of this Agreement and upon the Effective Time with the same effect as
though all such representations and warranties had been made on the Effective
Time (except to the extent such representations and warranties speak as of an
earlier date), in any case subject to the standard set forth in Section 4.1; and
GCB shall have delivered to OFC a certificate to such effect signed by the Chief
Executive Officer and the Chief Financial Officer of GCB as of the Effective
Time.
9.2.2. Agreements and Covenants. GCB shall have performed in all material
respects all obligations and complied in all material respects with all
agreements or covenants to be performed or complied with by it at or prior to
the Closing Date, and OFC shall have received a certificate signed on behalf of
GCB by the Chief Executive Officer and Chief Financial Officer of GCB to such
effect dated as of the Closing Date.
9.2.3. Permits, Authorizations, Etc. All material permits, authorizations,
consents, waivers, clearances or approvals required for the lawful consummation
of the Merger and the Bank Merger shall have been obtained.
9.2.4. No Material Adverse Effect. Since December 31, 2006, no event has
occurred or circumstance arisen that, individually or in the aggregate, has had
or is reasonably likely to have a Material Adverse Effect on GCB.
GCB will furnish OFC with such certificates of its officers or others and
such other documents to evidence fulfillment of the conditions set forth in this
Section 9.2 as OFC may reasonably request.
9.3. Conditions to the Obligations of GCB under this Agreement.
The obligations of GCB under this Agreement shall be further subject to the
satisfaction of the conditions set forth in Sections 9.3.1 through 9.3.5 at or
prior to the Closing Date:
9.3.1. Representations and Warranties. Each of the representations and
warranties of OFC set forth in this Agreement shall be true and correct as of
the date of this Agreement and upon the Effective Time with the same effect as
though all such representations and warranties had been made on the Effective
Time (except to the extent such representations and warranties speak as of an
earlier date), in any case subject to the standard set forth in Section 5.1; and
OFC shall have delivered to GCB a certificate to such effect signed by the Chief
Executive Officer and the Chief Financial Officer of OFC as of the Closing Date.
9.3.2. Agreements and Covenants. OFC shall have performed in all material
respects all obligations and complied in all material respects with all
agreements or covenants to be performed or complied with by it at or prior to
the Closing Date, and GCB shall have received a certificate signed on behalf of
OFC by the Chief Executive Officer and Chief Financial Officer to such effect
dated as of the Closing Date.
9.3.3. Permits, Authorizations, Etc. OFC shall have obtained any and all
material permits, authorizations, consents, waivers, clearances or approvals
required for the lawful consummation of the Merger and the Bank Merger.
9.3.4. Payment of Merger Consideration. OFC shall have delivered the
Exchange Fund to the Exchange Agent on or before the Closing Date and the
Exchange Agent shall provide GCB with a certificate evidencing such delivery.
9.3.5. No Material Adverse Effect. Since June 30, 2007, no event has
occurred or circumstance arisen that, individually or in the aggregate, has had
or is reasonably likely to have a Material Adverse Effect on OFC.
OFC will furnish GCB with such certificates of their officers or others and
such other documents to evidence fulfillment of the conditions set forth in this
Section 9.3 as GCB may reasonably request.
ARTICLE X
THE CLOSING
10.1. Time and Place.
Subject to the provisions of Articles IX and XI hereof, the Closing of the
transactions contemplated hereby shall take place at the offices of Xxxx Xxxxxx
Xxxxxxxx & Xxxxxx, 0000 Xxxxxxxxx Xxxxxx, Xxxxx 000, Xxxxxxxxxx, X.X. at 10:00
a.m., or at such other place or time upon which OFC and GCB mutually agree. A
pre-closing of the transactions contemplated hereby (the "Pre-Closing") shall
take place at the offices of Xxxx Xxxxxx Xxxxxxxx & Xxxxxx, 0000 Xxxxxxxxx
Xxxxxx, Xxxxx 000, Xxxxxxxxxx, X.X. at 10:00 a.m. on the day prior to the
Closing Date.
10.2. Deliveries at the Pre-Closing and the Closing.
At the Pre-Closing there shall be delivered to OFC and GCB the opinions,
certificates, and other documents and instruments required to be delivered at
the Pre-Closing under Article IX hereof. At or prior to the Closing, OFC shall
have delivered the Exchange Fund as set forth under Section 9.3.4 hereof.
ARTICLE XI
TERMINATION, AMENDMENT AND WAIVER
11.1. Termination.
This Agreement may be terminated at any time prior to the Closing Date,
whether before or after approval of the Merger by the shareholders of GCB:
11.1.1. At any time by the mutual written agreement of OFC and GCB;
11.1.2. By the Board of Directors of either party (provided, that the party
seeking to terminate the Agreement pursuant to this Section 11.1.2 is not then
in breach of any representation, warranty, covenant or other agreement contained
herein, which breach would entitle the other party not to consummate the
transactions contemplated hereby under either Section 9.2.1 or 9.3.1) if there
shall have been a material breach of any of the representations or warranties
set forth in this Agreement on the part of the other party, which breach by its
nature cannot be cured prior to the Termination Date or shall not have been
cured within 15 days after written notice of such breach by the terminating
party to the other party provided, however, that neither party shall have the
right to terminate this Agreement pursuant to this Section 11.1.2 unless the
breach of representation or warranty, together with all other such breaches,
would entitle the terminating party not to consummate the transactions
contemplated hereby under Section 9.2.1 (in the case of a breach of a
representation or warranty by GCB) or Section 9.3.1 (in the case of a breach of
a representation or warranty by OFC);
11.1.3. By the Board of Directors of either party (provided, that the party
seeking to terminate the Agreement pursuant to this Section 11.1.3 is not then
in breach of any representation, warranty, covenant or other agreement contained
herein, which breach would entitle the other party not to consummate the
transactions contemplated hereby under either Section 9.2.1 or 9.3.1) if there
shall have been a material failure to perform or comply with any of the
covenants or agreements set forth in this Agreement on the part of the other
party, which failure by its nature cannot be cured prior to the Termination Date
or shall not have been cured within 30 days after written notice of such failure
by the terminating party to the other party provided, however, that neither
party shall have the right to terminate this Agreement pursuant to this Section
11.1.3 unless the breach of covenant or agreement, together with all other such
breaches, would entitle the terminating party not to consummate the transactions
contemplated hereby under Section 9.2.2 (in the case of a breach of covenant by
GCB) or Section 9.3.2 (in the case of a breach of covenant by OFC);
11.1.4. At the election of the Board of Directors of either party if the
Closing shall not have occurred by the Termination Date, or such later date as
shall have been agreed to in writing by OFC and GCB; provided, that no party may
terminate this Agreement pursuant to this Section 11.1.4 if the failure of the
Closing to have occurred on or before said date was due to such party's material
breach of any representation, warranty, covenant or other agreement contained in
this Agreement;
11.1.5. By the Board of Directors of either party if: the shareholders of
GCB shall have voted at the GCB Shareholders Meeting on the transactions
contemplated by this Agreement and such vote shall not have been sufficient to
approve such transactions; or the shareholders of OFC shall have voted at the
OFC Shareholders Meeting on the transactions contemplated by this Agreement and
such vote shall not have been sufficient to approve such transactions;
11.1.6. By the Board of Directors of either party if (i) final action has
been taken by a Bank Regulator whose approval is required in connection with
this Agreement and the transactions contemplated hereby, which final action (x)
has become unappealable and (y) does not approve this Agreement or the
transactions contemplated hereby, or (ii) any court of competent jurisdiction or
other governmental authority shall have issued an order, decree, ruling or taken
any other action restraining, enjoining or otherwise prohibiting the Merger and
such order, decree, ruling or other action shall have become final and
nonappealable;
11.1.7. By the Board of Directors of either party in the event that any of
the conditions precedent to the obligations of such party to consummate the
Merger cannot be satisfied or fulfilled by the date specified in Section 11.1.4
(provided, that the party seeking to terminate the Agreement pursuant to this
Section 11.1.7 is not then in breach of any representation, warranty, covenant
or other agreement contained herein, which breach would entitle the other party
not to consummate the transactions contemplated hereby under either Section
9.2.1 or 9.3.1).
11.1.8. By the Board of Directors of OFC if GCB has received a Superior
Proposal, and in accordance with Section 6.10, the Board of Directors of GCB has
entered into an acquisition agreement with respect to the Superior Proposal,
terminated this Agreement, or withdraws its recommendation of this Agreement,
fails to make such recommendation or modifies or qualifies its recommendation in
a manner adverse to OFC.
11.1.9. By the Board of Directors of GCB if GCB has received a Superior
Proposal, and in accordance with Section 6.10, the Board of Directors of GCB has
made a determination to accept such Superior Proposal.
11.1.10. By GCB, if the GCB Board of Directors so determines by a majority
vote at any time during the five business-day period commencing on the
Regulatory Approval Date, if both of conditions (i) and (ii) below are satisfied
and otherwise as provided in this Section 11.1.10, as follows:
(i) The OFC Determination Date Market Value is less than OFC
Minimum Calculation Price multiplied by 0.825; and
(ii) the number obtained by dividing the OFC Determination Date
Market Value by the Initial OFC Market Value shall be less
than the quotient obtained by dividing the Final Index
Price by the Initial Index Price, minus 0.275;
(iii) subject, however, to the following three sentences: If GCB
elects to exercise its termination right pursuant to this
Section 11.1.10, it shall give prompt written notice
thereof to OFC. During the five Business Day period
commencing with its receipt of such notice, OFC shall have
the option to increase the consideration to be received by
the holders of GCB Stock who elect to receive OFC Stock
hereunder by adjusting the Exchange Ratio to the following
quotient at its sole discretion: (i) the quotient
determined by dividing the OFC Minimum Calculation Price
by the OFC Determination Date Market Value, and
multiplying the quotient by the product of the Maximum
Exchange Ratio and 0.825. If OFC so elects, it shall give,
within such five business-day period, written notice to
GCB of such election and the revised Exchange Ratio,
whereupon no termination shall be deemed to have occurred
pursuant to this Section 11.1.10 and this Agreement shall
remain in full force and effect in accordance with its
terms (except as the Exchange Ratio shall have been so
modified).
For purposes of this Section 11.1.10, the following terms shall have the
meanings indicated below:
(iv) "Final Index Price," means the average of the daily closing
value of the Index for the five consecutive trading days
immediately preceding the Regulatory Approval Date.
(v) "Index Group" means the NASDAQ Bank Index.
(vi) "Index Ratio" shall be the Final Index Price divided by the
Initial Index Price.
(vii) "Initial Index Price" means the closing value of the Index
on the trading day ended two days preceding the execution
of this Agreement.
(viii) "Initial OFC Market Value" means $16.30.
(ix) "Maximum Exchange Ratio" means $21.40 divided by $14.67.
(x) "OFC Determination Date Market Value" shall be the average
of the daily closing sales prices of a share of OFC Stock
as reported on the Nasdaq Global Market for the twenty
consecutive trading days immediately preceding the
Regulatory Approval Date.
(xi) "OFC Minimum Calculation Price" means $14.67.
(xii) "Regulatory Approval Date" shall mean the later to occur
of the following: (1) GCB and OFC shareholder approvals;
(2) the first date on which all Regulatory Approvals (and
waivers, if applicable) necessary for consummation of the
Merger have been received (disregarding any waiting
period).
11.2. Effect of Termination.
11.2.1. In the event of termination of this Agreement pursuant to any
provision of Section 11.1, this Agreement shall forthwith become void and have
no further force, except that (i) the provisions of Sections 11.2, 12.1, 12.2,
12.6, 12.9, 12.10, and any other Section which, by its terms, relates to
post-termination rights or obligations, shall survive such termination of this
Agreement and remain in full force and effect.
11.2.2. If this Agreement is terminated, expenses and damages of the
parties hereto shall be determined as follows:
(A) Except as provided below, whether or not the Merger is
consummated, all costs and expenses incurred in connection with this
Agreement and the transactions contemplated by this Agreement shall be paid by
the party incurring such expenses.
(B) In the event of a termination of this Agreement because of a
willful and material breach of any representation, warranty, covenant or
agreement contained in this Agreement, the breaching party shall remain liable
for any and all damages, costs and expenses, including all reasonable
attorneys' fees, sustained or incurred by the non-breaching party as a result
thereof or in connection therewith or with respect to the enforcement of its
rights hereunder.
(C) As a condition of OFC's willingness, and in order to induce OFC,
to enter into this Agreement, and to reimburse OFC for incurring the costs and
expenses related to entering into this Agreement and consummating the
transactions contemplated by this Agreement, GCB hereby agrees to pay OFC, and
OFC shall be entitled to payment of a fee of $6,600,000 (the "OFC Fee"), in
cash or immediately available funds within three business days after written
demand for payment is made by OFC, following the occurrence of any of the events
set forth below:
(i) GCB terminates this Agreement pursuant to Section 11.1.9 or OFC
terminates this Agreement pursuant to Section 11.1.8; or
(ii) The entering into a definitive agreement by GCB relating to an
Acquisition Proposal or the consummation of an Acquisition Proposal
involving GCB within twelve months after the occurrence of any of the
following: (i) the termination of the Agreement by OFC pursuant to Section
11.1.2 or 11.1.3 because of, in either case, a willful and material breach
by GCB; or (ii) the failure of the shareholders of GCB to approve this
Agreement after the occurrence of an Acquisition Proposal.
(D) If demand for payment of the OFC Fee is made pursuant to Section
11.2.2(C) and payment is timely made, then OFC will not have any other rights
or claims against GCB, its Subsidiaries, and their respective officers and
directors, under this greement, it being agreed that the acceptance of the OFC
Fee under Section 11.2.2(C) will constitute the sole and exclusive remedy of
OFC against GCB and its Subsidiaries and their respective officers and
directors.
11.3. Amendment, Extension and Waiver.
Subject to applicable law, at any time prior to the Effective Time (whether
before or after approval thereof by the shareholders of GCB), the parties hereto
by action of their respective Boards of Directors, may (a) amend this Agreement,
(b) extend the time for the performance of any of the obligations or other acts
of any other party hereto, (c) waive any inaccuracies in the representations and
warranties contained herein or in any document delivered pursuant hereto, or (d)
waive compliance with any of the agreements or conditions contained herein;
provided, however, that after any approval of this Agreement and the
transactions contemplated hereby by the shareholders of GCB, there may not be,
without further approval of such shareholders, any amendment of this Agreement
which reduces the amount, value or changes the form of consideration to be
delivered to GCB's shareholders pursuant to this Agreement. This Agreement may
not be amended except by an instrument in writing signed on behalf of each of
the parties hereto. Any agreement on the part of a party hereto to any extension
or waiver shall be valid only if set forth in an instrument in writing signed on
behalf of such party, but such waiver or failure to insist on strict compliance
with such obligation, covenant, agreement or condition shall not operate as a
waiver of, or estoppel with respect to, any subsequent or other failure.
ARTICLE XII
MISCELLANEOUS
12.1. Confidentiality.
Except as specifically set forth herein, OFC and GCB mutually agree to be
bound by the terms of the confidentiality agreements dated August 30, 2007 (the
"Confidentiality Agreements") previously executed by the parties hereto, which
Confidentiality Agreements are hereby incorporated herein by reference. The
parties hereto agree that such Confidentiality Agreements shall continue in
accordance with their respective terms, notwithstanding the termination of this
Agreement.
12.2. Public Announcements.
GCB and OFC shall cooperate with each other in the development and
distribution of all news releases and other public disclosures with respect to
this Agreement, and except as may be otherwise required by law, neither GCB nor
OFC shall issue any news release, or other public announcement or communication
with respect to this Agreement unless such news release, public announcement or
communication has been mutually agreed upon by the parties hereto.
12.3. Survival.
All representations, warranties and covenants in this Agreement or in any
instrument delivered pursuant hereto or thereto shall expire on and be
terminated and extinguished at the Effective Time, except for those covenants
and agreements contained herein which by their terms apply in whole or in part
after the Effective Time.
12.4. Notices.
All notices or other communications hereunder shall be in writing and shall
be deemed given if delivered by receipted hand delivery or mailed by prepaid
registered or certified mail (return receipt requested) or by recognized
overnight courier addressed as follows:
If to GCB, to: Xxxxxxx X. Xxxxx, Xx.
Chairman, President and Chief Executive
Officer
Greater Community Bancorp
00 Xxxxx Xxxxxxxxx
Xxxxxx, Xxx Xxxxxx 00000
Fax: (973) -
With required copies to: Xxxxxx X. Xxxxxxx, Esq
Xxxxxxx & Xxxxx LLP
000 Xxxx Xxxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxx 00000
Fax: (000) 000-0000
If to OFC, to: Xxxxx X. Xxxxx.
President and Chief Executive Officer
Oritani Financial Corp.
000 Xxxxxxx Xxxxxx
Xxxxxxxx xx Xxxxxxxxxx, Xxx Xxxxxx
00000
Fax: (201)
With required copies to: Xxxx X. Xxxxxx, Esq.
Xxxx Xxxxxx Xxxxxxxx & Xxxxxx, P.C.
0000 Xxxxxxxxx Xxxxxx, X.X., Xxxxx 000
Xxxxxxxxxx, X.X. 00000
Fax: (000) 000-0000
or such other address as shall be furnished in writing by any party, and any
such notice or communication shall be deemed to have been given: (a) as of the
date delivered by hand; (b) three (3) business days after being delivered to the
U.S. mail, postage prepaid; or (c) one (1) business day after being delivered to
the overnight courier.
12.5. Parties in Interest.
This Agreement shall be binding upon and shall inure to the benefit of the
parties hereto and their respective successors and assigns; provided, however,
that neither this Agreement nor any of the rights, interests or obligations
hereunder shall be assigned by any party hereto without the prior written
consent of the other party. Except as provided in Article III and Sections 7.8.2
and 7.9, nothing in this Agreement, express or implied, is intended to confer
upon any person, other than the parties hereto and their respective successors,
any rights, remedies, obligations or liabilities under or by reason of this
Agreement.
12.6. Complete Agreement.
This Agreement, including the Exhibits and Disclosure Schedules hereto and
the documents and other writings referred to herein or therein or delivered
pursuant hereto, and the Confidentiality Agreements, referred to in Section
12.1, contains the entire agreement and understanding of the parties with
respect to its subject matter. There are no restrictions, agreements, promises,
warranties, covenants or undertakings between the parties other than those
expressly set forth herein or therein. This Agreement supersedes all prior
agreements and understandings (other than the Confidentiality Agreements
referred to in Section 12.1 hereof) between the parties, both written and oral,
with respect to its subject matter.
12.7. 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. A facsimile copy of a signature page shall be deemed to be an
original signature page.
12.8. Severability.
In the event that any one or more provisions of this Agreement shall for
any reason be held invalid, illegal or unenforceable in any respect, by any
court of competent jurisdiction, such invalidity, illegality or unenforceability
shall not affect any other provisions of this Agreement and the parties shall
use their reasonable efforts to substitute a valid, legal and enforceable
provision which, insofar as practical, implements the purposes and intents of
this Agreement.
12.9. Governing Law.
This Agreement shall be governed by the laws of the State of New Jersey,
without giving effect to its principles of conflicts of laws, except to the
extent superseded by federal law.
12.10. Interpretation.
When a reference is made in this Agreement to Sections or Exhibits, such
reference shall be to a Section of or Exhibit to this Agreement unless otherwise
indicated. The recitals hereto constitute an integral part of this Agreement.
References to Sections include subsections, which are part of the related
Section (e.g., a section numbered "Section 5.5.1" would be part of "Section 5.5"
and references to "Section 5.5" would also refer to material contained in the
subsection described as "Section 5.5.1"). The table of contents, index and
headings contained in this Agreement are for reference purposes only and shall
not affect in any way the meaning or interpretation of this Agreement. Whenever
the words "include", "includes" or "including" are used in this Agreement, they
shall be deemed to be followed by the words "without limitation". The phrases
"the date of this Agreement", "the date hereof" and terms of similar import,
unless the context otherwise requires, shall be deemed to refer to the date set
forth in the Recitals to this Agreement. The parties have participated jointly
in the negotiation and drafting of this Agreement. In the event an ambiguity or
question of intent or interpretation arises, this Agreement shall be construed
as if drafted jointly by the parties and no presumption or burden of proof shall
arise favoring or disfavoring any party by virtue of the authorship of any of
the provisions of this Agreement.
12.11. Specific Performance.
The parties hereto agree that irreparable damage would occur in the event
that the provisions contained in this Agreement were not performed in accordance
with its specific terms or was otherwise breached. It is accordingly agreed that
the parties shall be entitled to an injunction or injunctions to prevent
breaches of this Agreement and to enforce specifically the terms and provisions
thereof in any court of the United States or any state having jurisdiction, this
being in addition to any other remedy to which they are entitled at law or in
equity.
12.12. Disclosure Schedule.
The mere inclusion of an item in the relevant OFC Disclosure Schedule or
GCB Disclosure Schedule as an exception to a representation, warranty, or
covenant shall not be deemed an admission by a party that such items represents
a material, exception or material fact, event, or circumstance or that such item
has had or would have a Material Adverse Effect with respect to GCB or any GCB
Subsidiary, as applicable.
IN WITNESS WHEREOF, OFC and GCB have caused this Agreement to be executed
under seal by their duly authorized officers as of the date first set forth
above.
Oritani Financial Corp.
Dated: November 13, 2007 By: /s/ Xxxxx X. Xxxxx
------------------------------
Name: Xxxxx X. Xxxxx.
Title: Chairman, President
and Chief Executive Officer
Greater Community Bancorp
Dated: November 13, 2007 By: /s/ Xxxxxxx X. Xxxxx, Xx.
------------------------------
Name: Xxxxxxx X. Xxxxx, Xx.
Title: Chairman, President
and Chief Executive Officer
