EXHIBIT 99.1
AGREEMENT AND PLAN OF REORGANIZATION
AGREEMENT AND PLAN OF REORGANIZATION
AMONG
XXXXXX SAVINGS BANK
XXXXXX ACQUISITION CORPORATION
AND
FIRST HARRISBURG BANCOR, INC.
FIRST FEDERAL SAVINGS AND LOAN ASSOCIATION OF HARRISBURG
TABLE OF CONTENTS
1. REORGANIZATION AND MERGER
(a) Merger of Xxxxxx Acquisition and First Harrisburg
(b) Effective Date
(c) Conversion of First Harrisburg Common Stock
(d) Xxxxxx Common Stock
(e) Xxxxxx Acquisition Common Stock
(f) Exchange of Stock Certificates
(g) Stock Options, Stock Option Plans, and Related Matters
(h) Shareholders' Meetings
(i) Proxy Statement
(j) Cooperation, Regulatory Approvals
(k) First Harrisburg Liquidation
(l) First Federal Merger
(m) Dissenting Shares
2. REPRESENTATIONS AND WARRANTIES BY XXXXXX AND XXXXXX
ACQUISITION
(a) Organization, Good Standing, Authority, Insurance, Etc
(b) Agreement, Authority, Absence of Conflicts
(c) Sufficient Resources
(d) Xxxxxx Acquisition Representations and Warranties
(e) Ownership of First Harrisburg Common Stock
(f) Full Disclosure
(g) CRA Compliance
(h) Approval by Xxxxxx Financial, MHC
3. REPRESENTATIONS AND WARRANTIES BY FIRST HARRISBURG
AND FIRST FEDERAL
(a) Organization, Good Standing, Authority, Deposit
Insurance, Etc
(b) Capitalization, Investments
(c) Financial Statements and Exchange Act Reports
(d) Absence of Certain Developments
(e) Taxes
(f) Litigation
(g) Brokerage
(h) Properties
(i) Compliance with Applicable Laws
(j) Contracts and Commitments, Etc
(k) Insurance
(l) No Guarantees
(m) Examination Reports
(n) Agreement, Authority, Absence of Conflicts
(o) Reporting
(p) Full Disclosure
(q) Employee Benefit Plans
(r) Labor Matters
(s) Environmental Matters
(t) Proceedings
(u) Undisclosed Liabilities
(v) Financial Institutions Bond
(w) Repurchase Agreements
(x) Assumability of Leases and Contracts
(y) Loans
(z) Loan Portfolio
(aa) Trademarks, Trade Names
(bb) Accuracy of Representations
(cc) Absence of Questionable Payments
(dd) Powers of Attorney, Guarantees
(ee) Mortgage Banking Operations and Activities
(ff) CRA Compliance
(gg) Derivatives
(hh) Loan Loss Reserves
4. ACCESS TO AND INFORMATION CONCERNING PROPERTIES,
RECORDS, ETC
5. AFFIRMATIVE COVENANTS OF XXXXXX
(a) Conduct of Business
(b) Preservation of Business
(c) Insurance
(d) Laws, Rules, Etc
(e) Best Efforts
(f) Notices
(g) Regulatory Applications
6. AFFIRMATIVE COVENANTS OF FIRST HARRISBURG AND
FIRST FEDERAL
(a) Conduct of Business
(b) Preservation of Business
(c) Properties
(d) Insurance
(e) Contracts, Etc
(f) Financial Statements
(g) Laws, Rules, Etc
(h) Corporate Existence
(i) Notices
(j) Best Efforts
(k) Amend Corporate Documents
(l) Suspend Stock and Dividend Reinvestment Plans
(m) First Harrisburg Benefit Plans
(n) Good Faith Cooperative Effort to Revise Structure
(o) Non-permitted Activities Divestiture
7. NEGATIVE COVENANTS OF FIRST HARRISBURG AND FIRST FEDERAL
8. CONDITIONS TO THE OBLIGATIONS OF XXXXXX, XXXXXX ACQUISITION,
FIRST HARRISBURG, AND FIRST FEDERAL
(a) Approval of Shareholders
(b) Approval of Regulatory Agencies
(c) Dissenters' Rights
(d) Antitrust Laws
(e) Suits, Actions
(f) Statutes, Orders
(g) Other Requirements
9. CONDITIONS TO THE OBLIGATIONS OF XXXXXX AND
XXXXXX ACQUISITION
(a) Representations, Warranties and Covenants
(b) Opinion of Special Counsel
(c) Opinion of Local Counsel
(d) Suit, Action, Etc
(e) Accountants' Comfort Letter
(f) Accountants' Letter
(g) Support Agreement
(h) Investment Agreement
(i) Tax Ruling or Opinion
(j) Closing Documents
(k) Outstanding Stock Options
(l) Effectiveness of Transactions
(m) Non-permitted Activities
(n) Xxxxxx Fairness Opinion
10. CONDITIONS TO THE OBLIGATIONS OF FIRST HARRISBURG AND FIRST
FEDERAL
(a) Representations and Warranties
(b) Opinion of Counsel
(c) Suit, Action, Etc
(d) Deposit into Payment Fund
(e) First Harrisburg Fairness Opinion
11. TERMINATION OF AGREEMENT
12. EXPENSES
13. CONFIDENTIALITY
14. SURVIVAL OF REPRESENTATIONS AND WARRANTIES, ETC
15. CERTAIN POST-MERGER AGREEMENTS
(a) Employees
(b) Existing Employment Agreements
(c) Board of Directors of Xxxxxx
(d) Directors' Retirement Plan
(e) Deferred Compensation Agreements
(f) Indemnification and Insurance
16. ENTIRE AGREEMENT
17. PUBLICITY
18. AMENDMENT AND WAIVER
19. GOVERNING LAW
20. COMMUNICATIONS
21. SUCCESSORS AND ASSIGNS
22. HEADINGS, ETC
23. SEVERABILITY
24. NO THIRD PARTY BENEFICIARY
25. COUNTERPARTS
26. FURTHER ASSURANCES
EXHIBITS
AGREEMENT AND PLAN OF MERGER OF
XXXXXX ACQUISITION CORPORATION
WITH AND INTO FIRST HARRISBURG BANCOR, INC....................EXHIBIT 1
FIRST HARRISBURG BANCOR, INC. PLAN OF LIQUIDATION
AND DISSOLUTION...............................................EXHIBIT 2
AGREEMENT AND PLAN OF MERGER OF FIRST FEDERAL
SAVINGS AND LOAN ASSOCIATION OF HARRISBURG WITH
AND INTO XXXXXX SAVINGS BANK..................................EXHIBIT 3
INVESTMENT AGREEMENT..........................................EXHIBIT 4
AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION (hereinafter "Agreement") is
dated as of November 12, 1995, by and among XXXXXX SAVINGS BANK, a Pennsylvania
state-chartered stock savings bank ("Xxxxxx"), XXXXXX ACQUISITION CORPORATION, a
Pennsylvania corporation ("Xxxxxx Acquisition"), FIRST HARRISBURG BANCOR, INC.,
a Pennsylvania corporation ("First Harrisburg"), and FIRST FEDERAL SAVINGS AND
LOAN ASSOCIATION OF HARRISBURG, a federal savings and loan association and a
wholly-owned subsidiary of First Harrisburg ("First Federal") (collectively
sometimes referred to as the "Parties").
WHEREAS, the respective Boards of Directors of Xxxxxx, First
Harrisburg, and First Federal have approved and deem it advisable and in the
best interests of their respective companies to consummate the transactions
provided for in this Agreement and the exhibits hereto in the sequential order
and manner provided herein and therein;
WHEREAS, Xxxxxx shall incorporate Xxxxxx Acquisition as a Pennsylvania
business corporation and capitalize Xxxxxx Acquisition with sufficient funds as
Xxxxxx' wholly-owned subsidiary prior to the effectuation of the transactions
contemplated by this Agreement and the exhibits thereto;
WHEREAS, the respective Boards of Directors of Xxxxxx and First
Harrisburg have approved, and deem it advisable and in the best interests of the
Xxxxxx and First Harrisburg shareholders to consummate a merger of Xxxxxx
Acquisition with and into First Harrisburg pursuant to the terms and subject to
the conditions set forth in this Agreement and the Agreement and Plan of Merger
of Xxxxxx Acquisition Corporation with and into First Harrisburg Bancor, Inc. in
the form attached hereto as Exhibit 1 (the "Merger Agreement"). Such merger of
Xxxxxx Acquisition with and into First Harrisburg on the terms and conditions
provided in this Agreement and the Merger Agreement shall be referred to herein
and therein as the "Merger".
WHEREAS, subsequent to and immediately after the consummation of the
Merger, First Harrisburg shall liquidate and dissolve in a transaction that is
not taxable and has no adverse tax consequences to the Parties hereto, such
liquidation and dissolution to be undertaken and effectuated pursuant to the
First Harrisburg Bancor, Inc. Plan of Liquidation and Dissolution (the "First
Harrisburg Plan of Liquidation") in the form attached hereto as Exhibit 2;
WHEREAS, subsequent to and immediately after the effectiveness of the
First Harrisburg Plan of Liquidation, First Federal shall merge with and into
Xxxxxx in a transaction that is not taxable and has no adverse tax consequences
to the Parties hereto, such merger to be undertaken and effectuated pursuant to
the Agreement and Plan of Merger of First Federal Savings and Loan Association
of Harrisburg with and into Xxxxxx Savings Bank (the "First Federal Merger") in
the form attached hereto as Exhibit 3;
WHEREAS, the Parties desire and intend that the Merger, the First
Harrisburg Plan of Liquidation and the First Federal Merger (collectively the
"Reorganization") shall be effectuated in sequential order, each contingent upon
effectiveness of all, and on the same day;
WHEREAS, as a condition to Xxxxxx' entry into this Agreement and to
induce such entry, First Harrisburg is entering into the Investment Agreement
(the "Option Agreement") attached hereto as Exhibit 4;
WHEREAS, the Parties hereto intend that for federal income tax
purposes, none of the transactions contemplated by this Agreement, the Merger
Agreement, the First Harrisburg Plan of Liquidation, and the First Federal
Merger will result in the realization or recognition of taxable income or loss
to the Parties hereto under the Internal Revenue Code of 1986, as amended (the
"Code"), and that for accounting purposes the collective effect of all of these
transactions will be treated under the purchase method of accounting; and
WHEREAS, the Parties desire to provide for certain undertakings,
conditions, representations, warranties and covenants in connection with the
transactions contemplated hereby and governing the transactions contemplated
herein.
NOW, THEREFORE, in consideration of the premises, mutual promises,
covenants, agreements, representations and warranties hereinafter set forth, and
of other good and valuable consideration the receipt and sufficiency of which
are hereby acknowledged, and intending to be legally bound hereby, the Parties
hereto agree as follows:
1. REORGANIZATION AND MERGER. Upon the terms and subject to the
conditions of this Agreement, the Merger Agreement, the First Harrisburg Plan of
Liquidation, and the First Federal Merger, the Reorganization is to be
accomplished in the manner described herein.
(a) Merger of Xxxxxx Acquisition and First Harrisburg. In
accordance with the provisions of this Agreement, the Merger Agreement
and the laws of the Commonwealth of Pennsylvania, at the Effective Date
(as hereinafter defined), Xxxxxx Acquisition shall be merged with and
into First Harrisburg, the separate corporate existence of Xxxxxx
Acquisition shall cease, and First Harrisburg shall continue its
corporate existence as the surviving corporation of the Merger as a
Pennsylvania business corporation under the name "First Harrisburg
Bancor, Inc." with all the rights and powers provided to such
corporation under the Pennsylvania Business Corporation Law of 1988, as
amended (the "Business Corporation Law"). Also at the Effective Date,
all of the outstanding shares of First Harrisburg's common stock, par
value $.01 per share (the "First Harrisburg Common Stock"), except for
shares held by First Harrisburg as treasury shares, shares owned by any
direct or indirect subsidiary of First Harrisburg (other than shares
held pursuant to the Deferred Compensation Trust Agreement dated
October 16, 1992, between First Federal and an independent trustee, as
amended), shares of First Harrisburg Common Stock owned by any First
Harrisburg shareholder who elects to exercise dissenters' rights in
accordance with Pennsylvania law ("Dissenting Shares"), and any shares
owned by Xxxxxx or its parent or subsidiaries in other than a fiduciary
capacity, will be converted into the right to receive Fourteen Dollars
and SeventySeven Cents ($14.77) in cash per share without interest in
the manner specified in Section 1(c) hereof, and each outstanding share
of Xxxxxx Acquisition common stock shall be converted into one fully
paid and non-assessable share of First Harrisburg Common Stock,
resulting in all outstanding shares of First Harrisburg being owned by
Xxxxxx at and after the Effective Date. At the Effective Date, Xxxxxx
shall be the sole shareholder of First Harrisburg and First Harrisburg
shall be a wholly-owned subsidiary of Xxxxxx.
(b) Effective Date. At the Effective Date (as hereinafter
defined), the Merger shall be effected pursuant to the provisions of
and with the effects provided by the Business Corporation Law, and the
First Harrisburg Plan of Liquidation and the First Federal Merger shall
be immediately thereafter effectuated. The Effective Date shall be the
date and time of the later to occur of the acceptance for filing by the
Secretary of State of the Commonwealth of Pennsylvania of articles of
merger of Xxxxxx Acquisition and First Harrisburg, or such later date
and time as shall be specified in such articles as agreed to by the
Parties hereto, as the case may be; provided, however, that on such
Effective Date, the First Harrisburg Plan of Liquidation and the First
Federal Merger shall also be effectuated. Unless otherwise mutually
agreed upon in writing by Xxxxxx Acquisition and First Harrisburg, upon
the terms and subject to the conditions of this Agreement and the
exhibits hereto, the Effective Date shall occur on or before the
thirtieth (30th) calendar day following the later of (i) the receipt of
all requisite regulatory approvals and the expiration of all applicable
waiting periods, and (ii) the receipt of all requisite shareholder
approvals, unless the Parties mutually agree to a later date. The
closing of the transactions contemplated hereby (the "Closing") shall
take place at 10:00 a.m. local time at the offices of Xxxxxx on the
date the Effective Date occurs, or at such other time or place as the
Parties hereto shall mutually agree. At the Effective Date, Xxxxxx
Acquisition shall cease to exist as a separate corporation, and First
Harrisburg shall become the surviving corporation of the Merger (the
"Surviving Corporation"). The Articles of Incorporation and Bylaws of
First Harrisburg, as in effect immediately prior to the Effective Date,
shall be the Articles of Incorporation and Bylaws of the Surviving
Corporation.
(c) Conversion of First Harrisburg Common Stock. Each share of
First Harrisburg Common Stock issued and outstanding immediately prior
to the Effective Date (other than shares of First Harrisburg Common
Stock held by First Harrisburg as treasury stock, shares owned by any
direct or indirect subsidiary of First Harrisburg (other than shares
held pursuant to the Deferred Compensation Trust Agreement dated
October 16, 1992, between First Federal and an independent trustee, as
amended), shares owned by Xxxxxx or its parent or subsidiaries in other
than a fiduciary capacity, and Dissenting Shares) ("Eligible Shares"),
shall, by virtue of this Agreement and the Merger Agreement and without
any action on the part of the holder thereof, be cancelled and
converted into the right to receive Fourteen Dollars and Seventy-Seven
Cents ($14.77) in cash without interest, subject to the provisions of
Section 1(f) below (the "Merger Consideration"). In no event shall the
number of Eligible Shares exceed 2,768,411 shares. The aggregate amount
paid for all Eligible Shares shall be the "Aggregate Merger
Consideration." In no event shall the Aggregate Merger Consideration
exceed $40,889,430. Each share of First Harrisburg Common Stock held in
the treasury of First Harrisburg, held by any direct or indirect
subsidiary of First Harrisburg (other than shares held pursuant to the
Deferred Compensation Trust Agreement dated October 16, 1992, between
First Federal and an independent trustee, as amended), or held by
Xxxxxx or its parent or subsidiaries in other than a fiduciary capacity
immediately prior to the Effective Date shall automatically, by virtue
of this Agreement and the Merger Agreement, be cancelled and retired,
and shall cease to exist, without any conversion thereof into the right
to receive the Merger Consideration.
(d) Xxxxxx Common Stock. Each share of Xxxxxx' common stock,
par value $.01 per share (the "Xxxxxx Common Stock") issued and
outstanding immediately prior to the Effective Date shall, on and after
the Effective Date, continue to be issued and outstanding as an
identical share of Xxxxxx Common Stock. Each share of Xxxxxx Common
Stock issued and held in treasury of Xxxxxx as of the Effective Date,
if any, shall, on and after the Effective Date, continue to be issued
and held in the treasury of Xxxxxx.
(e) Xxxxxx Acquisition Common Stock. At the Effective Date,
each issued and outstanding share of Xxxxxx Acquisition Common Stock
shall be converted into one fully paid and non-assessable share of
First Harrisburg Common Stock, resulting in all outstanding shares of
First Harrisburg being owned by Xxxxxx at and after the Effective Date.
After the Effective Date, Xxxxxx shall be the sole shareholder of First
Harrisburg, and First Harrisburg shall be a wholly-owned subsidiary of
Xxxxxx.
(f) Exchange of Stock Certificates. Certificates underlying
shares of First Harrisburg Common Stock shall be exchanged for the
Merger Consideration in accordance with the following procedures:
(i) The transfer agent of Xxxxxx shall act as agent
(the "Exchange Agent") in effecting and receiving, promptly
after the Effective Date, the exchange of stock certificates
(the "Certificates"), which Certificates, immediately prior to
the Effective Date, represented outstanding shares of First
Harrisburg Common Stock (other than those shares excluded by
Section 1(c) hereof), in exchange for the Merger
Consideration. Upon surrender of a Certificate for exchange
and cancellation together with a letter of transmittal (as
described below) duly executed, the holder of such Certificate
shall be entitled to receive in exchange therefor, and the
Exchange Agent shall pay to such holder, the Merger
Consideration multiplied by the number of shares of First
Harrisburg Common Stock formerly represented by such
Certificate, and the Certificate so surrendered shall
forthwith be cancelled.
(ii) At the Effective Date and until so surrendered
and exchanged, each such Certificate shall represent solely
the right to receive the Merger Consideration. If the Merger
Consideration (or any portion thereof) is to be delivered to
any person other than the person in whose name the Certificate
representing shares of First Harrisburg Common Stock
surrendered and exchanged therefor is registered, it shall be
a condition to such exchange that the Certificate so
surrendered shall be properly endorsed or otherwise be in
proper form for transfer, and that the person requesting such
exchange shall pay for the Exchange Agent any transfer or
other taxes required by reason of the payment of such cash to
a person other than the registered holder of the Certificate
surrendered, or shall establish to the satisfaction of the
Exchange Agent that such tax has been paid or is not
applicable. Notwithstanding the foregoing, neither the
Exchange Agent nor any party hereto shall be liable to a
holder of First Harrisburg Common Stock for any Merger
Consideration delivered to a public official pursuant to
applicable abandoned property, escheat and similar laws.
(iii) At or prior to the Effective Date, Xxxxxx
Acquisition shall deposit in trust with the Exchange Agent
cash in an aggregate amount equal to the product of (i) the
number of shares of First Harrisburg Common Stock (other than
any shares held by First Harrisburg as treasury stock, by any
direct or indirect subsidiary of First Harrisburg (other than
shares held pursuant to the Deferred Compensation Trust
Agreement dated October 16, 1992, between First Federal and an
independent trustee, as amended) or by Xxxxxx or its parent or
subsidiaries in other than a fiduciary capacity, or any shares
known at the Effective Date to be Dissenting Shares) and (ii)
the Merger Consideration (the "Payment Fund"); provided,
however, that in no such event shall the number of Eligible
Shares entitled to the Merger Consideration exceed 2,768,411
shares or the Aggregate Merger Consideration exceed
$40,889,430.
(iv) The Exchange Agent shall, pursuant to
irrevocable instructions by Xxxxxx, make the payments referred
to in Section 1(f) hereof out of the Payment Fund. The Payment
Fund shall not be used for any purpose except as provided
herein. If any First Harrisburg shareholders who initially
exercised dissenters' rights lose the right to dissent because
of a failure to comply with the Business Corporation Law
subsequent to the Effective Date, Xxxxxx shall promptly
deposit additional cash in the Payment Fund in an amount equal
to the product of the number of Dissenting Shares held by such
First Harrisburg shareholders multiplied by the Merger
Consideration. Promptly following the date which is two years
after the Effective Date, the Exchange Agent shall return to
Xxxxxx all cash, Certificates and other instruments then in
its possession relating to the transactions described in this
Agreement, and the Exchange Agent's duties shall terminate.
Thereafter, each holder of a Certificate entitled to receive
therefor Merger Consideration at the Effective Date may
surrender such Certificate to Xxxxxx and (subject to
applicable abandoned property, escheat and similar laws),
receive in exchange therefor the Merger Consideration, without
interest, and shall have no greater rights against Xxxxxx or
Xxxxxx Acquisition than may be accorded to general creditors
of Xxxxxx under applicable law. Xxxxxx shall have no liability
to First Harrisburg shareholders for compliance with
applicable abandoned property, escheat and similar laws.
(v) Within five business days after the Effective
Date, the Exchange Agent shall mail to each record holder of
Certificates in a form reasonably satisfactory to Xxxxxx
Acquisition and First Harrisburg a letter of transmittal and
instructions for use in surrendering such Certificates and
receiving the Merger Consideration therefor. 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.
(vi) After the Effective Date, there shall be no
transfers on the stock transfer books of First Harrisburg.
(g) Stock Options, Stock Option Plans, and Related Matters.
Immediately prior to or at the Effective Date, each holder of a
then-outstanding option to purchase shares of First Harrisburg Common
Stock heretofore granted under a stock option plan, program or
arrangement of First Harrisburg shall have received (whether such
option is then exercisable or not) in settlement thereof a cash payment
from First Harrisburg in an amount equal to the excess, if any, of the
Merger Consideration over the per share exercise price under such stock
option, multiplied by the number of shares of First Harrisburg Common
Stock covered by such option. All such options automatically shall be
deemed cancelled and of no further effect as of the Effective Date. In
no event shall the amount paid by First Harrisburg in settlement of
such options exceed $1,408,681 in the aggregate.
(h) Shareholders' Meetings. First Harrisburg shall, as soon as
practicable, hold a meeting of its shareholders (the "First Harrisburg
Shareholders' Meeting") to submit for shareholder approval this
Agreement and the transactions contemplated hereby. An affirmative vote
of at least a majority of the votes cast by all holders of First
Harrisburg Common Stock entitled to vote thereon shall be required for
such approval and adoption of this Agreement and the transactions
contemplated thereby. First Harrisburg's directors shall recommend to
its shareholders approval of this Agreement, the Merger Agreement, the
Merger, and the transactions contemplated hereby and thereby, and use
their best efforts to obtain such approval, in each case subject to the
fiduciary duties of such directors. Xxxxxx shall, as soon as
practicable, hold a meeting of its shareholders (the "Xxxxxx
Shareholders' Meeting") to submit for shareholder approval this
Agreement, the transactions contemplated hereby, and the First Federal
Merger. An affirmative vote of at least 66 2/3% of the outstanding
shares of Xxxxxx shall be required for such approval and adoption of
this Agreement, the transactions contemplated hereby and the First
Federal Merger. Xxxxxx' Directors shall recommend to Xxxxxx'
shareholders approval of this Agreement, the Merger Agreement, the
First Federal Merger, and the transactions contemplated hereby and
thereby, and use their best efforts to obtain such approval, in each
case subject to the fiduciary duties of such directors.
(i) Proxy Statement.
(A) The Parties hereto will cooperate in the
preparation and filing with the Securities and Exchange
Commission ("SEC"), the Department of Banking of the
Commonwealth of Pennsylvania ("Banking Department"), and the
Federal Deposit Insurance Corporation ("FDIC"), the proxy
statement to be distributed in connection with the First
Harrisburg Shareholders' Meeting and the Xxxxxx Shareholders'
Meeting (as amended from time to time, the "Proxy Statement")
in order to consummate the transactions contemplated hereby as
soon as reasonably practicable and to satisfy all applicable
requirements under the Securities Exchange Act of 1934, as
amended ("Securities Exchange Act"), the rules and regulations
thereunder, and the rules and regulations of the Banking
Department and the FDIC.
(B) Xxxxxx and Xxxxxx Acquisition will furnish such
information concerning Xxxxxx and Xxxxxx Acquisition as is
necessary in order to cause the Proxy Statement, insofar as it
relates to Xxxxxx and Xxxxxx Acquisition, to comply with
Section 1(i)(A) above. Xxxxxx and Xxxxxx Acquisition agree
promptly to advise First Harrisburg if at any time prior to
the First Harrisburg Shareholders' Meeting any information
provided by it in the Proxy Statement becomes incorrect or
incomplete in any material respect and to provide First
Harrisburg with the information needed to correct such
inaccuracy or omission. Xxxxxx and Xxxxxx Acquisition will
furnish First Harrisburg with such supplemental information as
may be necessary in order to cause such Proxy Statement,
insofar as it relates to Xxxxxx and Xxxxxx Acquisition, to
comply with Section 1(i)(A) above after the mailing thereof to
First Harrisburg shareholders.
(C) First Harrisburg will furnish Xxxxxx and Xxxxxx
Acquisition with such information concerning First Harrisburg
on a consolidated basis as is necessary in order to cause the
Proxy Statement, insofar as it relates to First Harrisburg on
a consolidated basis, to comply with Section 1(i)(A) above.
First Harrisburg agrees promptly to advise Xxxxxx and Xxxxxx
Acquisition if at any time any information provided by it in
the Proxy Statement becomes incorrect or incomplete in any
material respect and to provide Xxxxxx and Xxxxxx Acquisition
with the information needed to correct such inaccuracy or
omission. First Harrisburg will furnish Xxxxxx with such
supplemental information as may be necessary in order to cause
the Proxy Statement, insofar as it relates to First
Harrisburg, to comply with Section 1(i)(A) above after the
mailing thereof to Xxxxxx shareholders.
(j) Cooperation, Regulatory Approvals. The Parties shall
cooperate fully, and shall cause each of their affiliates to cooperate
fully, in the preparation and submission by them, as promptly as
reasonably practicable, of such notices, applications, petitions, and
other documents and materials as may be required or any of them may
reasonably deem necessary (or desirable) to the Board of Governors of
the Federal Reserve System (the "Federal Reserve"), the Banking
Department, the SEC, the FDIC, the Office of Thrift Supervision (the
"OTS"), other regulatory authorities, holders of the voting shares of
capital stock of First Harrisburg and Xxxxxx, and any other persons for
the purpose of obtaining any approvals or consents necessary to
consummate the transactions contemplated by this Agreement and the
Reorganization. Prior to the making of any such filings with any
regulatory authority or the making of any written disclosures with
respect to the transactions contemplated hereby to shareholders or any
third person (such as mailings to shareholders or press releases), the
Parties shall submit to each other the materials to be filed, mailed or
released. Any such materials must be acceptable to both Xxxxxx and
First Harrisburg (such acceptance not to be unreasonably withheld)
prior to the filings with any regulatory authorities or the disclosures
to shareholders or any third person, except to the extent that any
party is legally required to proceed prior to obtaining the acceptances
of the other Parties.
(k) First Harrisburg Liquidation. Immediately following the
Merger of Xxxxxx Acquisition with and into First Harrisburg, the
Surviving Corporation, First Harrisburg, shall adopt, undertake and
effectuate a complete liquidation and dissolution under the First
Harrisburg Plan of Liquidation.
(l) First Federal Merger. Immediately following the
effectuation of the First Harrisburg Plan of Liquidation, First Federal
shall merge with and into Xxxxxx pursuant to the First Federal Merger.
(m) Dissenting Shares. Notwithstanding anything in this
Agreement to the contrary, Dissenting Shares shall not be converted
into or exchangeable for the right to receive the Merger Consideration
provided in Section 1(c) hereof, unless and until the holder of such
Dissenting Shares shall have lost his right to dissent under the
Business Corporation Law. If such holder shall have lost such right,
each of his shares of First Harrisburg Common Stock shall thereupon be
deemed to have been converted into, as of the Effective Date, the
Merger Consideration.
2. REPRESENTATIONS AND WARRANTIES BY XXXXXX AND XXXXXX
ACQUISITION. Xxxxxx and Xxxxxx Acquisition, as applicable, represent
and warrant to First Harrisburg as follows:
(a) Organization, Good Standing, Authority, Insurance, Etc.
Xxxxxx is a Pennsylvania state-chartered stock savings bank organized,
validly existing and in good standing under the laws of the
Commonwealth of Pennsylvania. Xxxxxx has all requisite corporate power
and authority to conduct its business as it is now conducted, to own
and operate its properties and assets and to lease properties used in
its business. Xxxxxx has all requisite corporate power and authority to
enter into this Agreement and the Option Agreement, and subject to
obtaining any required regulatory and shareholder approvals, to perform
and carry out the provisions of and all its obligations under this
Agreement. Xxxxxx is a member in good standing of the Federal Home Loan
Bank of Pittsburgh. All customer deposits held by Xxxxxx are insured by
the Savings Association Insurance Fund ("SAIF") administered by the
FDIC in accordance with the Federal Deposit Insurance Act. Xxxxxx has
paid all assessments and filed all reports required by the Federal
Deposit Insurance Act.
(b) Agreement, Authority, Absence of Conflicts. The execution,
delivery and performance of this Agreement and the consummation of the
transactions contemplated herein have been duly and validly authorized
by the Board of Directors of Xxxxxx. Assuming receipt of regulatory
approvals, no other corporate action on the part of Xxxxxx (other than
approval by the shareholders of Xxxxxx) is necessary for Xxxxxx to
authorize this Agreement or to consummate the transactions contemplated
herein. This Agreement has been duly executed and delivered by Xxxxxx
and, assuming due authorization, execution and delivery by First
Harrisburg and First Federal, constitutes a valid and binding
obligation of Xxxxxx, enforceable in accordance with its terms, except
as it may be limited by bankruptcy, insolvency, receivership or similar
laws, now or hereafter in effect relating to creditor's rights. The
execution, delivery and consummation of this Agreement will not
constitute a violation or breach or a default under the Articles of
Incorporation or Bylaws of Xxxxxx, any agreement, indenture or other
instrument to which Xxxxxx is a party, or, to the best knowledge of
Xxxxxx, any statute, rule, regulation, order, writ, injunction, decree,
or directive applicable to Xxxxxx.
(c) Sufficient Resources. Xxxxxx will have available at the
Effective Date, available financial resources to enable it and Xxxxxx
Acquisition to lawfully satisfy their obligations pursuant to this
Agreement without the need to borrow funds or to raise additional
equity capital, unless otherwise required after the date hereof by a
regulatory agency. Prior to the Effective Date, Xxxxxx shall take all
actions necessary to incorporate Xxxxxx Acquisition and to capitalize
Xxxxxx Acquisition in an amount sufficient to permit Xxxxxx Acquisition
to fully perform its duties and obligations as set forth herein. Xxxxxx
has and will have sufficient management and financial resources to
obtain the required regulatory and other approvals for the Merger and
the transactions contemplated by this Agreement. On the date of this
Agreement, there is no pending or, to the knowledge of Xxxxxx,
threatened legal or governmental proceeding against Xxxxxx or any
subsidiary or affiliate thereof, and Xxxxxx is not aware of any fact or
circumstance, which would affect Xxxxxx' ability to obtain any of the
required regulatory approvals or satisfy any other conditions required
to be satisfied in order to consummate the transactions contemplated by
this Agreement. Until Closing, Xxxxxx will promptly notify First
Harrisburg if any of the representations contained in this Section 2
ceases to be true and correct.
(d) Xxxxxx Acquisition Representations and Warranties. Prior
to the Effective Date, (i) Xxxxxx Acquisition will be a Pennsylvania
business corporation organized, validly existing and in good standing
under the laws of the Commonwealth of Pennsylvania; (ii) Xxxxxx
Acquisition will have all requisite corporate power and authority to
enter into this Agreement and the Merger Agreement, and subject to
obtaining any required regulatory and shareholder approvals, to carry
out the provisions of and all of its obligations under this Agreement
and the Merger Agreement; and (iii) the Board of Directors of Xxxxxx
Acquisition shall duly and validly authorize the execution, delivery
and performance of this Agreement and the Merger Agreement, which
agreements shall be approved by Xxxxxx as the sole stockholder of
Xxxxxx Acquisition. This Agreement and the Merger Agreement will
constitute a valid and binding obligation of Xxxxxx Acquisition
enforceable in accordance with its terms, except as it may be limited
by bankruptcy, insolvency, receivership or similar laws now or
hereafter in effect relating to creditors' rights. The execution,
delivery and consummation of this Agreement will not constitute a
violation or breach or default under the Articles of Incorporation or
Bylaws of Xxxxxx Acquisition, any statute, rule, regulation, order,
writ, injunction, decree or other instrument or agreement to which
Xxxxxx Acquisition is a party at such time. Prior to the Effective Date
of the Merger, Xxxxxx Acquisition will engage only in the transactions
contemplated by this Agreement and the Merger Agreement, and will have
no material liabilities and will have incurred no material obligations
except in connection with the performance of the transactions provided
in this Agreement and in the Merger Agreement.
(e) Ownership of First Harrisburg Common Stock. As of the date
hereof, neither Xxxxxx nor its parent or any subsidiaries of Xxxxxx
directly or indirectly owns, or has any rights to acquire, any shares
of First Harrisburg Common Stock, other than pursuant to this Agreement
and the Option Agreement.
(f) Full Disclosure. None of the information with respect to
Xxxxxx or any parent or subsidiary of Xxxxxx which has been furnished
to First Harrisburg or First Federal or has been or will be included by
Xxxxxx in the Proxy Statement, or any application to, or filing with,
any regulatory authority made in connection with the transactions
contemplated hereby will, at the respective time it is furnished,
distributed, mailed or filed, be false or misleading with respect to
any material fact, or omit to state any material fact necessary in
order to make the statements therein not misleading in light of the
circumstances under which they were made.
(g) CRA Compliance. Xxxxxx has a satisfactory Community
Reinvestment Act rating.
(h) Approval by Xxxxxx Financial, MHC. Xxxxxx represents that
the Board of Trustees of Xxxxxx Financial, MHC has approved this
Agreement and has agreed, subject to the fiduciary duty of such
trustees, to vote all the shares of Xxxxxx Common Stock held by Xxxxxx
Financial, MHC in favor of this Agreement at the Xxxxxx Shareholders'
Meeting.
3. REPRESENTATIONS AND WARRANTIES BY FIRST HARRISBURG AND FIRST
Federal. First Harrisburg and First Federal, as applicable, represent and
warrant to Xxxxxx as set forth below. For purposes of this Section 3, the terms
"Material," "material" and materially" refer to those items which, in the
aggregate, impact the financial position or results of operations of First
Harrisburg and the First Harrisburg Subsidiaries taken as a whole in an amount
greater than a negative $700,000. In making this calculation, any adverse items
shall be offset by positive items. Such terms shall not include any items due to
changes resulting from or attributable to the items set forth in clauses (a)
through (f) of Section 3(d)(i) of this Agreement. In addition, for purposes of
this Section 3, the results of operations of First Harrisburg on a consolidated
basis for the period from October 1, 1995 through the end of the calendar month
immediately preceding the Effective Date, after excluding the effects of any
changes resulting from or attributable to the items set forth in clauses (a)
through (f) of Section 3(d)(i) of this Agreement, shall be deemed to contain
positive items to the extent such items result in a reduction of expense or an
addition to income and shall be deemed to contain adverse items to the extent
such items result in an addition to expense or a reduction of income. The
Parties also agree that any purchase accounting adjustments related to the
transactions contemplated by this Agreement shall constitute neither positive
nor adverse items and shall be completely disregarded for purposes of this
Section 3.
(a) Organization, Good Standing, Authority, Deposit Insurance,
Etc. First Harrisburg is a corporation organized, validly existing and
in good standing under the laws of the Commonwealth of Pennsylvania.
Each of the subsidiaries of First Harrisburg, including First Federal
and any subsidiary thereof (individually a "First Harrisburg
Subsidiary," collectively the "First Harrisburg Subsidiaries") is an
entity of the respective type set forth on Schedule 3(a) hereto, and is
organized, validly existing and in good standing under the laws of the
respective jurisdiction of incorporation set forth on Schedule 3(a).
All subsidiaries of First Harrisburg are listed on Schedule 3(a). Each
of First Harrisburg and the First Harrisburg Subsidiaries has all
requisite corporate power and authority to conduct its business as it
is now conducted, to own and operate its properties and assets and to
lease properties used in its business. Each of First Harrisburg and
First Federal has all requisite corporate power and authority to enter
into this Agreement, the Merger Agreement, and all exhibits attached
hereto, as applicable and, subject to obtaining any required regulatory
and shareholder approvals, to perform and carry out the provisions of
and all of their respective obligations under this Agreement, the
Merger Agreement, and all exhibits hereto. Each of First Harrisburg and
the First Harrisburg Subsidiaries is qualified to do business as a
foreign corporation and is in good standing in each jurisdiction in
which such qualification is necessary under applicable law, except
where the failure to be so qualified and in good standing would not
have a material adverse effect on the business, operations, assets or
financial condition of First Harrisburg and the First Harrisburg
Subsidiaries taken as a whole. First Federal is a member in good
standing of the Federal Home Loan Bank of Pittsburgh. All customer
deposits held by First Federal are insured by the SAIF administered by
the FDIC in accordance with the Federal Deposit Insurance Act. First
Federal has paid all assessments and filed all reports required by the
Federal Deposit Insurance Act.
(b) Capitalization, Investments. As of the date hereof, the
authorized capital stock of First Harrisburg consists of 10,000,000
shares of common stock, par value $.01 per share, of which 2,337,284
shares are duly issued and outstanding, fully paid and non-assessable,
and 51,878 shares are held in treasury as issued but not outstanding,
and 5,000,000 shares of preferred stock, par value $.01 per share, none
of which are issued and outstanding. Except as set forth in Schedule
3(b) hereto and except as provided for by the Option Agreement, there
are no authorized, issued or outstanding options, convertible
securities, warrants or other rights to purchase or acquire any of
First Federal's or First Harrisburg's capital stock from First Federal
or First Harrisburg, there is no commitment of First Federal or First
Harrisburg to issue the same, and other than by operation of law, there
are no outstanding agreements, restrictions, contracts, commitments or
demands of any character to which First Harrisburg or First Federal is
a party, which relate to the transfer or restrict the transfer of any
shares of First Harrisburg's or First Federal's capital stock. Except
as disclosed in Schedule 3(b) and except as set forth in the Option
Agreement, to the knowledge of First Harrisburg, there are no
shareholder agreements, understandings or commitments relating to the
right of any shareholder to vote or dispose of shares of First
Harrisburg or shares of First Federal. The authorized capital stock of
each of the First Harrisburg Subsidiaries ("First Harrisburg
Subsidiaries' Capital Stock") consists of the respective number of
shares of capital stock, with the respective par value per share, set
forth on Schedule 3(b), of which the respective number of outstanding
shares set forth on Schedule 3(b) have been duly authorized, validly
issued, and are fully paid and non-assessable. Except as set forth on
Schedule 3(b), all shares of the First Harrisburg Subsidiaries' Capital
Stock, which are issued and outstanding, are owned directly or
indirectly by First Harrisburg. Except as set forth on Schedule 3(b),
there is no authorized, issued or outstanding capital stock of any of
the First Harrisburg Subsidiaries, there is no commitment of any of the
First Harrisburg Subsidiaries to issue any of the same and, other than
by operation of law, there are no outstanding agreements, restrictions,
contracts, commitments or demands of any character which relate to the
transfer or restrict the transfer of any shares of the First Harrisburg
Subsidiaries' Capital Stock. No share of First Harrisburg or of a First
Harrisburg Subsidiary has been issued in violation of the preemptive
rights of any person.
(c) Financial Statements and Exchange Act Reports. First
Harrisburg has furnished Xxxxxx with audited consolidated statements of
financial condition for First Harrisburg and its subsidiaries as of the
end of First Harrisburg's last two fiscal years, and audited
consolidated statements of (i) operations, (ii) stockholders' equity,
and (iii) cash flows for each of the last three fiscal years, including
the notes to said audited consolidated financial statements, together
with the reports of First Harrisburg's independent certified public
accountants, pertaining to said audited consolidated financial
statements. First Harrisburg has also furnished Xxxxxx with First
Harrisburg's (i) Quarterly Reports on Form 10-Q for the quarters ended
March 31, June 30, and September 30, 1995, containing unaudited
statements of financial condition of First Harrisburg as of such dates
and unaudited statements of operations and cash flows of First
Harrisburg for the interim periods reflected therein, (ii) any Current
Reports on Form 8-K filed by First Harrisburg since December 31, 1994,
and (iii) all management letters from First Harrisburg's independent
certified public accountants since January 1, 1992. For purposes of
this Agreement, the "First Harrisburg Statement" shall mean the
unaudited consolidated statements of financial condition for First
Harrisburg and the First Harrisburg Subsidiaries as of September 30,
1995 (including the notes thereto). The above audited and unaudited
consolidated statements of financial condition present fairly the
financial condition of First Harrisburg on a consolidated basis at the
dates thereof, in accordance with generally accepted accounting
principles consistently applied. The above audited and unaudited
consolidated statements of (i) operations, (ii) stockholders' equity,
and (iii) cash flows present fairly the results of the operations of
First Harrisburg on a consolidated basis for the periods indicated, in
accordance with generally accepted accounting principles consistently
applied. Except as and to the extent reflected or reserved against in
the First Harrisburg Statement, or as otherwise disclosed pursuant to
this Agreement or in First Harrisburg's 1994 Annual Report to
Stockholders or as set forth in Schedule 3(c), neither First Harrisburg
nor any of the First Harrisburg Subsidiaries had, at the date thereof,
any material liabilities or obligations, or any other liabilities or
obligations which in the aggregate would be material, secured or
unsecured (whether accrued, absolute, contingent or otherwise),
including, without limitation, any tax liabilities, which should be
reflected in the First Harrisburg Statement in accordance with
generally accepted accounting principles consistently applied. The
books and records of First Harrisburg and the First Harrisburg
Subsidiaries are maintained in accordance with generally accepted
accounting principles consistently applied.
(d) Absence of Certain Developments. Since September 30, 1995,
except as set forth on Schedule 3(d) hereto, there has been (i) no
material adverse change in the financial condition, business or results
of operations of First Harrisburg and the First Harrisburg Subsidiaries
taken as a whole, excluding changes resulting from or attributable to
(a) any changes since such date in any federal or state law, rule or
regulation, in any policy adopted by any federal or state regulatory
authority or in generally accepted accounting principles that affect
savings institutions or their holding companies generally, including
but not limited to any special or increased assessment applicable to
SAIF-insured institutions generally, provided that such assessment is
not in excess of 100 basis points on the deposit base as of the
applicable assessment date, (b) any changes since such date in market
rates of interest, (c) reasonable expenses incurred since such date in
connection with the transactions contemplated by this Agreement, (d)
the payment of cash in settlement of outstanding stock options pursuant
to Section 1(g) hereof, (e) reductions to net income or stockholders'
equity incurred as a result of fully funding each of the benefit plans
or agreements set forth in Schedule 3(q) attached hereto, provided,
however, that the additional amount needed to effect such full funding
does not exceed $922,579 in the aggregate, of which $461,860 has been
accrued as of September 30, 1995 or (f) reductions to net income or
stockholders' equity incurred as a result of actions taken at the
request or with the written consent of Xxxxxx ("Material Adverse
Change"); (ii) no declaration, setting aside or payment of any dividend
or other distribution with respect to the stock of First Harrisburg or
a First Harrisburg Subsidiary other than the 10% stock dividend payable
on November 15, 1995 and cash dividends, the timing of which are
consistent with those declared and paid in the prior fiscal year and
the amounts of which are consistent with the cash dividend payable on
November 15, 1995; (iii) no material loss, destruction, or damage to
the properties of First Harrisburg or any of the First Harrisburg
Subsidiaries, which loss, destruction, or damage is not adequately
covered by insurance; (iv) no agreement, contract or commitment entered
into or agreed to be entered into except for those in the ordinary
course of business and except for this Agreement, the Merger Agreement,
and the Option Agreement; (v) no amendment or termination of any
material contract, lease, license, or other agreement to which First
Harrisburg or any of the First Harrisburg Subsidiaries is a party
except in the ordinary course of business; and (vi) no change in any of
the accounting methods or practices or revaluation of any of the assets
of First Harrisburg or the First Harrisburg Subsidiaries, except as
required by changes in generally accepted accounting principles, or
applicable laws, rules or regulations. Since such date, each of First
Harrisburg and the First Harrisburg Subsidiaries has conducted its
business only in the ordinary course and is in compliance in all
material respects with all laws which govern the ownership of its
property and the conduct of its business.
(e) Taxes. First Federal is a "domestic building and loan
association" as defined in Section 7701(a)(19) of the Code. Except as
set forth on Schedule 3(e) hereto, (i) each of First Harrisburg and the
First Harrisburg Subsidiaries has filed all tax returns (as described
below) that it is required to file and all taxes (as described below)
of First Harrisburg or any of the First Harrisburg Subsidiaries to be
due from First Harrisburg or any of the First Harrisburg Subsidiaries
have been duly paid, other than taxes or charges which are not as yet
due, delinquent or have not been finally determined, and no extensions
for the time of payment have been requested; (ii) no additional
assessments of tax for which adequate provisions in the First
Harrisburg Statement have not been made, have been proposed, are
pending or, to the best knowledge of First Harrisburg, threatened by
any governmental authority; and (iii) no waivers of statutes of
limitation concerning taxes associated with either First Harrisburg or
any of the First Harrisburg Subsidiaries are in effect as of the date
hereof. Except as set forth on Schedule 3(e), the accruals and reserves
for tax liabilities reflected in the First Harrisburg Statement are
adequate for the payment of all of First Harrisburg's and the First
Harrisburg Subsidiaries' respective federal, state, county, municipal,
local and foreign tax liabilities, including interest and penalties,
whether proposed, pending, threatened or disputed, for all periods
ended on or prior to September 30, 1995, and for which First Harrisburg
or any of the First Harrisburg Subsidiaries may, at said date, have
been liable, other than tax liabilities with respect to property
acquired after September 30, 1995, through repossession, foreclosure or
purchase under similar circumstances or as a result of the transactions
contemplated by this Agreement. Internal Revenue Service audits of
First Harrisburg and the First Harrisburg Subsidiaries have been
completed (or not commenced) through the year ended December 31, 1991,
and all deficiencies, if any, resulting from completed audits have been
paid. Copies of all material correspondence and documents relating to
federal, state, county, municipal or local income, capital stock,
franchise, or other similar taxes in respect of the five most recently
completed tax years have been made available to Xxxxxx. Except as set
forth on Schedule 3(e), neither First Harrisburg nor any of the First
Harrisburg Subsidiaries has executed or filed with the Internal Revenue
Service any agreement that is currently in effect and extends the
period for assessment and collection of any federal tax.
The Internal Revenue Service has not, to the knowledge of
First Harrisburg, commenced, or given notice of its intention to
commence, any examination or audit of the federal income tax returns of
First Harrisburg or any First Harrisburg Subsidiary for any year
subsequent to the year ended December 31, 1991. Except as disclosed on
Schedule 3(e), the accruals and reserves reflected in the First
Harrisburg Statement as of this date are adequate to cover all taxes,
including interest and penalties thereon, if any, payable or accrued as
a result of First Harrisburg's operations for all prior periods. For
purposes of this Section 3(e), "tax returns" shall mean all federal,
state, county, municipal and local tax returns, reports and
declarations, including, without limitation, consolidated federal
income tax returns of First Harrisburg and the First Harrisburg
Subsidiaries, declarations of estimated tax and tax reports required to
be filed on or before this date with respect to income, properties or
operations, and "taxes" shall mean all federal, state, county,
municipal, and local or foreign income, gross receipts, windfall
profits, severance, property, production, sales, use, license, excise,
franchise, employment, withholding or similar taxes, together with any
interest, additions, or penalties with respect thereto and any interest
in respect of such additions or penalties.
(f) Litigation. Except as set forth on Schedule 3(f) hereto,
no material action, suit, claim, counterclaim or other litigation or
proceeding, or to the best knowledge of First Harrisburg investigation,
is pending, or is known by the executive officers of First Harrisburg
or of any of the First Harrisburg Subsidiaries to be threatened,
against First Harrisburg or any of the First Harrisburg Subsidiaries
before any court or governmental or administrative agency, domestic or
foreign. There are no outstanding orders, writs, injunctions,
judgments, decrees, directives, consent agreements or memoranda of
understanding involving First Harrisburg or any First Harrisburg
subsidiary and any federal regulatory agency, state or local court or
governmental authority or arbitration tribunal that could materially
and adversely affect the condition, financial or otherwise, assets,
liabilities, business or operations of First Harrisburg and the First
Harrisburg Subsidiaries taken as a whole or that in any manner restrict
the right of First Harrisburg and the First Harrisburg Subsidiaries
taken as a whole to conduct their business as presently conducted.
Neither First Harrisburg nor any of the First Harrisburg Subsidiaries
is aware of any fact or condition presently existing that might give
rise to any litigation, investigation, or proceeding which, if
determined adversely to First Harrisburg or any of the First Harrisburg
Subsidiaries, would materially and adversely affect the condition,
financial or otherwise, of the assets, liabilities, business or
operations of First Harrisburg and the First Harrisburg Subsidiaries
taken as a whole.
(g) Brokerage. Except as set forth on Schedule 3(g) hereto,
there are no claims for brokerage commissions, finder's fees or similar
compensation arising out of or due to any act of First Harrisburg or
any of the First Harrisburg Subsidiaries in connection with the
transactions contemplated by this Agreement or based on any agreement
or arrangement made by or on behalf of First Harrisburg or any of the
First Harrisburg Subsidiaries.
(h) Properties. Except as set forth on Schedule 3(h) hereto,
each of First Harrisburg and the First Harrisburg Subsidiaries has good
and marketable title, free and clear of any mortgage, pledge, lien,
charge or other encumbrance, to all of its real or personal property,
loans and other assets reflected in the First Harrisburg Statement or
acquired by it subsequent to the date thereof, except for (i)
mortgages, pledges, liens, charges or encumbrances on such property or
assets described or referred to, or reflected, in the First Harrisburg
Statement; (ii) liens for current taxes not yet due; (iii) such
imperfections of title, encumbrances and easements, if any, as are not
individually or in the aggregate substantial or material in character,
amount or extent and do not materially detract from the value, or
interfere with the present or proposed use, of their properties and
assets subject thereto; (iv) dispositions of such property or assets in
the ordinary course of business; (v) mortgages, pledges, liens, charges
or encumbrances, on assets other than real or personal property,
incurred in the ordinary course of business subsequent to September 30,
1995; and (vi) liens or encumbrances on property acquired through
repossession, foreclosure or purchase under similar circumstances. The
structure and other improvements to real estate, furniture, fixtures
and equipment reflected in the First Harrisburg Statement or acquired
subsequent to the date of such statement are in good operating
condition and repair (ordinary wear and tear excepted) and comply in
all material respects with all applicable laws, ordinances and
regulations, including, without limitation, all building codes, zoning
ordinances and other similar laws. Except as set forth on Schedule
3(h), First Harrisburg and each of the First Harrisburg Subsidiaries
own or have the right to use all real and personal properties and
assets necessary to conduct their respective business as now conducted.
Except as set forth on Schedule 3(h), each lease pursuant to which
First Harrisburg or any of the First Harrisburg Subsidiaries, as
lessee, leases real or personal property is valid and in effect in
accordance with its respective terms, and there is not, under any of
such leases, on the part of the lessee any material existing default or
any event which with notice or lapse of time, or both, would constitute
such a default, other than defaults which would not individually or in
the aggregate have a material adverse effect on the financial
condition, business, or operating results of First Harrisburg and the
First Harrisburg Subsidiaries taken as a whole. Except as set forth on
Schedule 3(h), each of such leases is assumable by Xxxxxx or its
assigns in connection with the transactions contemplated by this
Agreement and without payment of any penalty or special assessment.
(i) Compliance with Applicable Laws. Except as disclosed on
Schedule 3(i) hereto, First Harrisburg and the First Harrisburg
Subsidiaries are in compliance in all material respects with all
statutes, laws, ordinances, rules, regulations, judgments, orders,
decrees, directives, consent agreements, memoranda of understanding,
permits, concessions, grants, franchises, licenses, and other
governmental authorizations or approvals applicable to First Harrisburg
and the First Harrisburg Subsidiaries or to any of their properties,
and all permits, concessions, grants, franchises, licenses,
certificates of authority, and other governmental authorizations and
approvals necessary for the conduct of the business of First Harrisburg
and the First Harrisburg Subsidiaries as presently conducted (the
absence of which could have a material adverse effect on the business,
prospects, operations, assets or financial condition of First
Harrisburg and the First Harrisburg Subsidiaries taken as a whole) have
been duly obtained and are in full force and effect and there are no
proceedings pending, or to the knowledge of First Harrisburg and the
First Harrisburg Subsidiaries, threatened, which may result in the
revocation, cancellation, suspension or material adverse modification
of any such permits, concessions, grants, franchises, licenses, and
other governmental authorizations and approvals.
(j) Contracts and Commitments, Etc. Each written or oral
contract (other than loans to or contracts with customers incurred by
First Harrisburg in the ordinary course of business) which involves
aggregate payments or receipts in excess of $100,000 per year to which
First Harrisburg or any of the First Harrisburg Subsidiaries is a
party, or by which First Harrisburg or any of the First Harrisburg
Subsidiaries is bound, including without limitation every employment
contract, employment benefit plan, agreement, lease, license and other
commitment to which First Harrisburg is a party or by which First
Harrisburg or its properties may be bound ("Material Contracts"), is
identified in Schedule 3(j) hereto. Except as disclosed on Schedule
3(j), all such Material Contracts are valid and in full force and
effect, and all parties thereto have in all material respects performed
all obligations required to be performed by them to date and are not in
default in any material respect and no event has occurred which, with
the lapse of time or notice by a third party or both could result in a
default by First Harrisburg or a First Harrisburg Subsidiary under such
Material Contract or under any provision of the Articles of
Incorporation or Bylaws of First Harrisburg or any of the First
Harrisburg Subsidiaries. Schedule 3(j) identifies each such Material
Contract that requires the consent or approval of third parties to the
execution and delivery of this Agreement or to the consummation of the
transactions contemplated herein.
(k) Insurance. First Harrisburg and the First Harrisburg
Subsidiaries have in effect and full force insurance coverage and
policies with reputable insurers, which in respect of amounts, types
and risks insured is customary with industry practices for the
businesses conducted by First Harrisburg and the First Harrisburg
Subsidiaries. No notices of cancellation have been received in
connection therewith.
(l) No Guarantees. Except as disclosed in Schedule 3(l)
hereto, neither First Harrisburg nor any of the First Harrisburg
Subsidiaries is obligated as guarantor, co-xxxxxx or surety (or
otherwise in a secondary liability capacity) for any obligation of any
kind of any other person or entity (other than First Harrisburg or any
of the First Harrisburg Subsidiaries).
(m) Examination Reports. Neither First Harrisburg nor any of
the First Harrisburg Subsidiaries is subject to any cease and desist
order, written agreement or memorandum of understanding with, or is a
party to any commitment letter or similar undertaking to, or is subject
to any order or directive by, or is a recipient of any extraordinary
supervisory letter from, or has adopted any board resolutions since
January 1, 1993 providing for the taking of corrective measures at the
request of or as mandated by federal or state governmental authorities
charged with the supervision or regulation of savings and loan
associations or savings and loan holding companies or engaged in the
insurance of savings deposits (collectively "Thrift Regulators" and
individually "Thrift Regulator"), nor has it been advised by any Thrift
Regulator that it is contemplating issuing or requesting (or is
considering the appropriateness of issuing or requesting) any such
order, directive, written agreement, memorandum of understanding,
extraordinary supervisory letter, commitment letter, board resolutions
(of the type described above) or similar undertaking.
(n) Agreement, Authority, Absence of Conflicts. The execution,
delivery and performance of this Agreement, the Merger Agreement, and
the Option Agreement have been duly and validly authorized by the
Boards of Directors of First Harrisburg and First Federal, as the case
may be, and do not and, subject to obtaining all required
authorizations and approvals, will not violate any of the (i)
provisions of, or constitute a default under or give any person or
party the right to accelerate payment or performance under any Material
Contract; or (ii) the Articles of Incorporation or Bylaws of First
Harrisburg or any of the First Harrisburg Subsidiaries. This Agreement
and the Merger Agreement have been duly executed and delivered by First
Harrisburg and constitute, assuming the due authorization, execution
and delivery thereof by Xxxxxx or Xxxxxx Acquisition, as the case may
be, a valid and binding obligation of First Harrisburg and First
Federal, respectively, enforceable in accordance with its terms, except
as may be limited by (i) bankruptcy, insolvency, reorganization,
moratorium, conservatorship, receivership or other similar laws now or
hereafter in effect relating to or affecting the enforcement of
creditors' rights generally or the rights of creditors of federal
savings institutions or their holding companies, (ii) general equitable
principles, and (iii) laws relating to the safety and soundness of
insured depository institutions, and except that no representation is
expressed as to the effect or availability of equitable remedies or
injunctive relief (regardless of whether such enforceability is
considered in a proceeding in equity or at law). The Option Agreement
has been duly executed and delivered by First Harrisburg and
constitutes, assuming the due authorization, execution and delivery
thereof by Xxxxxx, a valid and binding obligation of First Harrisburg.
(o) Reporting. First Harrisburg has timely filed all reports
required to be filed by it pursuant to the Securities Act of 1933 and
the Securities Exchange Act and the rules and regulations promulgated
thereunder, and all such reports are complete and correct in all
material respects.
(p) Full Disclosure. None of the information with respect to
First Harrisburg or any of the First Harrisburg Subsidiaries which has
been furnished to Xxxxxx pursuant to this Agreement or has been or will
be included by First Harrisburg in the Proxy Statement, or any
application to, or filing with, any regulatory agency made in
connection with the transactions contemplated hereby will, at the
respective time it is furnished, distributed, mailed or filed, be false
or misleading with respect to any material fact, or omit to state any
material fact necessary in order to make the statements therein not
misleading in light of the circumstances under which they were made.
(q) Employee Benefit Plans. Each "employee benefit plan," as
defined in Section 3(3) of the Employee Retirement Income Security Act
of 1974, as amended ("ERISA"), that now covers any employee of First
Harrisburg, its predecessors or affiliates, or any of the First
Harrisburg Subsidiaries, complies in all material respects with all
applicable requirements of ERISA, the Code and other applicable laws.
Neither First Harrisburg nor any of its predecessors or affiliates or
any of the First Harrisburg Subsidiaries has engaged in any "prohibited
transaction" (as defined in Section 406 of ERISA or Section 4975 of the
Code) or any breach of fiduciary responsibility under Part 4 of Title I
of ERISA, with respect to any such plan which prohibited transaction is
likely to result in any material penalties or taxes under Section 502
of ERISA or Section 4975 of the Code, or any material liability to any
participant or beneficiary of such plan. No material liability to the
Pension Benefit Guaranty Corporation has been incurred by First
Harrisburg with respect to itself or its predecessors or affiliates or
any of the First Harrisburg Subsidiaries with respect to any such plan
which is subject to Title IV of ERISA, or with respect to any "single
employer plan" (as defined in Section 4001(a)(15) of ERISA) currently
or formerly maintained. No such 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. The fair market value of the assets of
each such plan exceeds the present value of the "benefit liabilities"
(as defined in Section 4001(a)(16) of ERISA) under each such plan as of
the end of the most recent plan year, calculated on the basis of the
actuarial assumptions used in the most recent actuarial valuation for
each such plan. 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 of such plans
within the 12-month period ending on the date hereof. Neither First
Harrisburg, its predecessors or affiliates nor any of the First
Harrisburg Subsidiaries has provided, or is required to provide,
security to any of such plans pursuant to Section 401(a)(29) of the
Code. First Harrisburg, its predecessors and affiliates and each of the
First Harrisburg Subsidiaries have contributed to no "multiemployer
plan," as defined in Section 3(37) of ERISA, on or after September 26,
1980 except as set forth on Schedule 3(q). First Harrisburg, its
predecessors and affiliates and each of the First Harrisburg
Subsidiaries have no obligation for retiree health and life benefits
under any benefit plan, contract or arrangement except as set forth on
Schedule 3(q) hereto. First Harrisburg, its predecessors and affiliates
and each of the First Harrisburg Subsidiaries have no obligation for
any post retirement benefits under any plan, contract or arrangement,
except as set forth on Schedule 3(q) hereto. To the best knowledge of
First Harrisburg, all actuarial valuations and other documents and
information concerning benefit plans delivered or made available in
connection with this Agreement are true and correct as of the date(s)
shown thereon, and all actuarial methods and assumptions are
appropriate for such plans, and are consistent with the methods and
assumptions permitted by the Code and ERISA. Except as set forth on
Schedule 3(q), all such plans are funded to such level as would permit
termination without further funding such that, upon termination, the
assets of each such plan would then be sufficient to pay all vested
accrued benefits thereunder, and there would be no employer liability
under Title IV of ERISA. Since 1990, there has been no audit of any
benefit plan of First Harrisburg or of any First Harrisburg Subsidiary
by the Department of Labor, the IRS or the Pension Benefit Guarantee
Corporation.
(r) Labor Matters. Neither First Harrisburg nor any First
Harrisburg Subsidiary is a party to, or is bound by, any collective
bargaining agreement, contract or other agreement or understanding with
a labor union or labor organization, nor is First Harrisburg or any
First Harrisburg Subsidiary the subject of a proceeding asserting that
First Harrisburg or any First Harrisburg Subsidiary has committed an
unfair labor practice or seeking to compel First Harrisburg or such
First Harrisburg Subsidiary to bargain with any labor organization as
to wages and conditions of employment, nor is there any strike or other
labor dispute involving First Harrisburg or any First Harrisburg
Subsidiary pending, or, to the best knowledge of First Harrisburg,
threatened, that might have a material adverse effect on the condition,
financial or otherwise, assets, liabilities, business or operations of
First Harrisburg and the First Harrisburg Subsidiaries taken as a
whole. Except as set forth on Schedule 3(r) hereto, neither First
Harrisburg nor any First Harrisburg Subsidiary is subject to or a party
in any complaint or action before the Pennsylvania Human Relations
Commission, the Equal Employment Opportunity Commission or the
Department of Labor.
(s) Environmental Matters. For purposes of this paragraph (s),
the following terms shall have the indicated meaning:
"Environmental Law" means any 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 (2) the use, storage, recycling,
treatment, generation, transportation, processing, handling,
labeling, production, release or disposal of Hazardous
Substances. The term Environmental Law includes without
limitation (1) 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.9601, 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 (2) any common law (including
without limitation common law that may impose strict
liability) that may impose liability or obligation for
injuries or damages due to, or threatened as a result of, the
presence of or exposure to any Hazardous Substance.
"Hazardous Substance" means any substance presently
listed, defined, designated or classified as hazardous, toxic,
radioactive or dangerous or otherwise regulated under any
Environmental Law, whether by type or by quantity, including
any matter containing any such substance as a component.
Hazardous Substances include without limitation petroleum or
any derivative or by-product thereof, asbestos, radioactive
matter, and polychlorinated biphenyls.
"First Harrisburg Loan Portfolio Properties and Other
Properties Owned" means those properties serving as collateral
for loans in First Harrisburg's loan portfolio, or properties
currently owned or operated by First Harrisburg or any First
Harrisburg Subsidiary (including, without limitation, in a
fiduciary capacity).
Except as set forth on Schedule 3(s) hereto:
(1) Neither First Harrisburg nor any First
Harrisburg Subsidiary is in violation of or liable under any
Environmental Law, except any such violations or liabilities
which singly or in the aggregate would not have a material
adverse effect on the business, operations, assets or
financial condition of First Harrisburg and the First
Harrisburg Subsidiaries taken as a whole;
(2) To the best knowledge of First Harrisburg, none
of the First Harrisburg Loan Portfolio Properties and Other
Properties Owned are in violation of or liable under any
Environmental Law, except any such violations or liabilities
which singly or in the aggregate would not have a material
adverse effect on the business, operations, assets or
financial condition of First Harrisburg and the First
Harrisburg Subsidiaries taken as a whole;
(3) To the best knowledge of First Harrisburg, none
of the First Harrisburg Loan Portfolio Properties and Other
Properties Owned have Hazardous Substances on or in them; and
(4) There are no actions, suits, demands, notices,
claims, investigations or proceedings pending or, to the best
knowledge of First Harrisburg, threatened relating to the
liability of First Harrisburg or any First Harrisburg
Subsidiary in connection with any property that previously
served as collateral for a loan or was previously owned or
leased or that relates to the First Harrisburg Loan Portfolio
Properties and Other Properties Owned under any Environmental
Law, including without limitation any notices, demand letters
or requests for information from any federal or state
environmental agency relating to any such liabilities under or
violations of Environmental Law, except such which would not
have or result in a material adverse effect on the business,
operations, assets, prospects or financial condition of First
Harrisburg and the First Harrisburg Subsidiaries taken as a
whole.
(t) Proceedings. As of the date of this Agreement, there is no
pending or, to the best knowledge of First Harrisburg or First Federal,
threatened, legal or governmental proceeding against First Harrisburg
or any First Harrisburg Subsidiary, and First Harrisburg and First
Federal are not aware of any fact or circumstance which would adversely
affect First Harrisburg's or First Federal's ability to obtain any of
the required regulatory approvals or satisfy any of the other
conditions required to be satisfied in order to consummate the
transactions contemplated by this Agreement.
(u) Undisclosed Liabilities. Since September 30, 1995, neither
First Harrisburg nor any First Harrisburg Subsidiary has incurred any
liabilities or obligations (whether absolute, accrued, contingent or
otherwise) of any nature, except liabilities or obligations incurred in
the ordinary course of business or which would not have a material
adverse effect on the financial condition, business, prospects or
operating results of First Harrisburg and the First Harrisburg
Subsidiaries taken as a whole.
(v) Financial Institutions Bond. Since January 1, 1994, First
Harrisburg and the First Harrisburg Subsidiaries have continuously
maintained in full force and effect a financial institutions bond
insuring against acts of dishonesty by each of its employees. Except as
disclosed on Schedule 3(v) hereto, no claim has been made under any
such bond since January 1, 1994, and First Federal is unaware of any
fact or condition presently existing which might form the basis of a
claim under any such bond. First Federal has no reason to believe that
its present financial institutions bond will not be renewed by its
carrier on substantially the same basis and terms (other than an
immaterial premium rate increase) as those now in effect.
(w) Repurchase Agreements. With respect to any agreement
pursuant to which First Harrisburg or any First Harrisburg Subsidiary
has purchased securities subject to an agreement to resell, First
Harrisburg or the First Harrisburg Subsidiary has a valid, perfected
first lien or security interest in the government securities or other
collateral securing the repurchase agreement, and the value of such
collateral equals or exceeds the amount of the debt secured thereby.
Except as disclosed on Schedule 3(w) which identifies location and type
of securities, First Harrisburg maintains physical possession of
purchased securities that are subject to an agreement to resell.
(x) Assumability of Leases and Contracts. Except as disclosed
on Schedule 3(x) hereto, all Material Contracts are assumable and
assignable and do not contain any term or provision that would
accelerate or increase payments that would otherwise be due by First
Harrisburg or the First Harrisburg Subsidiary to such person or entity
or change or modify the provisions or terms of such contract by reason
of this Agreement or the transactions contemplated hereby.
(y) Loans. Except as disclosed on Schedule 3(y) hereto, the
loans reflected as assets on the First Harrisburg Statement, or
acquired since that date, are, in all material respects, the legal,
valid and binding obligations of the respective obligors named therein,
enforceable in accordance with their terms, subject to bankruptcy,
insolvency and other laws of general applicability relating to or
affecting creditors' rights and to general equity principles. All such
loans, and the collateral and other security therefor, and the
documentation for and administration of the same, satisfy in all
material respects the rules, regulations or directives of the OTS,
FDIC, or other applicable governmental authorities and are in
accordance with their terms in all material respects.
(z) Loan Portfolio. Except as disclosed on Schedule 3(z)
hereto, all evidences of indebtedness reflected as assets of First
Harrisburg or any First Harrisburg Subsidiary in the First Harrisburg
Statement are in all material respects binding obligations of the
respective primary obligors associated therewith, and no material
amount thereof is subject to any defenses known to First Harrisburg or
any First Harrisburg Subsidiary which may be asserted against First
Harrisburg or any First Harrisburg Subsidiary. Except as set forth in
Schedule 3(z), First Harrisburg has delivered to Xxxxxx a true and
correct list and brief description of all real property (other than
personal residences) in which First Harrisburg or any First Harrisburg
Subsidiary has an interest as creditor or mortgagee securing an amount
or amounts greater than $250,000 to one borrower, or a series of
related borrowers. Except as set forth in such list (i) there are no
outstanding loans held by First Harrisburg with an unpaid balance of
$25,000 or more on which a default has occurred and (ii) First Federal
has no loans reflected as assets in such financial statements which
have principal balances in excess of $20,000 except for fullysecured
mortgage loans. For purposes hereof, "default" shall include but not be
limited to a failure of an obligor to make payments with respect to any
loans for 60 days or more past the due date for such payment.
(aa) Trademarks, Trade Names. First Harrisburg owns, or has
the right to use, all trademarks, trade names and copyrights used in or
necessary for the ordinary conduct of its existing business as
heretofore conducted, and the consummation of the transactions
contemplated hereby will not alter or impair any such rights. Except as
set forth in Schedule 3(aa), no claims are pending for the use of any
trademarks, trade names or copyrights or challenging or questioning the
validity or effectiveness of any license or agreement relating to the
same nor is there any valid basis for any such claim, challenge or
question, and, to the best knowledge of First Harrisburg, the use of
such trademarks, trade names and copyrights by First Harrisburg or any
First Harrisburg Subsidiary does not infringe on the rights of any
person.
(bb) Accuracy of Representations. Until Closing, First
Harrisburg will promptly notify Xxxxxx if any of the representations
contained in this Section 3 ceases to be true and correct subsequent to
the date hereof.
(cc) Absence of Questionable Payments. From and after July 1,
1991, First Harrisburg has not, nor, to the best knowledge of First
Harrisburg, has any director, officer, agent, employee, consultant or
other person associated with, or acting on behalf of, First Harrisburg,
(i) used any First Harrisburg or First Harrisburg Subsidiary corporate
funds for unlawful contributions, gifts, entertainment or unlawful
expenses relating to political activity; or (ii) made any direct or
indirect unlawful payments to governmental officials from any First
Harrisburg corporate funds, or established or maintained any unlawful
or unrecorded accounts with funds received from First Harrisburg or any
First Harrisburg Subsidiary.
(dd) Powers of Attorney, Guarantees. Except as set forth on
Schedule 3(dd), neither First Harrisburg nor any First Harrisburg
Subsidiary has any power of attorney outstanding, or any obligation or
liability, either actual, accruing or contingent, as guarantor, surety,
cosigner, endorser, comaker or indemnitor in respect of the obligation
of any person, corporation, partnership, joint venture, association,
organization or other entity, except for letters of credit issued in
the ordinary course of business which are listed on Schedule 3(dd).
(ee) Mortgage Banking Operations and Activities. Except as set
forth in Schedule 3(ee) hereto:
(1) Avstar Mortgage Corporation (or "Mortgage Bank") (i) has all
certifications, authorizations, licenses, permits and other
approvals ("Licenses") necessary to conduct its current
mortgage banking business and is in compliance therewith in
all material respects, (ii) is in compliance in all material
respects with all applicable investor requirements, federal
and state statutes and regulations and with the underwriting
and servicing guidelines of the Federal Home Loan Mortgage
Corporation ("FHLMC"), and the Federal National Mortgage
Association ("FNMA"), the Department of Veteran's Affairs
("VA") and the Federal Housing Administration ("FHA"),
including but not limited to those statutes, regulations and
guidelines governing the origination, recordation or servicing
of mortgage loans closed, originated or serviced by Avstar
Mortgage Corporation ("Mortgage Loans"), the obtaining of
appropriate loan documentation and insurance policies, the
calculation of interest rate adjustments, the maintenance of
escrow accounts and filing of all documents required by the
Internal Revenue Code of 1986, as amended, (iii) is in
compliance in all material respects with all mortgage
servicing agreements to which it is currently a party (true
and complete copies of which First Harrisburg previously made
available to Xxxxxx), and such agreements are valid and
binding obligations of Avstar Mortgage Corporation, are in
full force and effect and are enforceable in accordance with
their terms, except as enforcement thereof may be limited by
bankruptcy, insolvency or other similar laws affecting the
enforcement of creditors' rights generally and by general
principles of equity (whether applied in a proceeding in
equity or at law), and (iv) is in compliance in all material
respects with all FHA insurance certificates, VA guaranty
certificates or policies of private mortgage insurance
covering the loans in its loan portfolio or loan servicing
portfolio, in each case except where the failure to do so
would not have a material adverse effect on the business,
financial condition or results of operations of First
Harrisburg or the First Harrisburg Subsidiaries taken as a
whole. Except as set forth in Schedule 3(ee), neither the
execution and delivery of this Agreement nor the consummation
of the transactions contemplated hereby will affect the
validity of any License currently possessed by Avstar Mortgage
Corporation, constitute a default (or an event which with the
passage of time or the giving of notice or both would
constitute a default) under any mortgage servicing agreement
to which Avstar Mortgage Corporation is currently a party, or
result in any such mortgage servicing agreement being
terminable by any party thereto, in each case except where
such invalidity, default or termination would not have a
material adverse effect on the business, financial condition
or results of operations of First Harrisburg and the First
Harrisburg Subsidiaries taken as a whole.
(2) All of the servicing rights owned by Avstar Mortgage
Corporation are owned free and clear of any lien, pledge,
security interest, claim, restriction or encumbrance.
(3) Mortgage Bank is not a party to (i) any agreement or
arrangement with any person to repurchase from any such person
any Mortgage Loan, mortgaged property serviced for others,
mortgage loans sold by Mortgage Bank with servicing released
("Servicing Released Loans") or any mortgage loan and/or the
servicing rights related thereto which were sold by Mortgage
Bank ("Previously Disposed Loans") or (ii) any agreement,
arrangement or understanding to reimburse, indemnify or hold
harmless any person or otherwise assume any liability with
respect to any loss suffered or incurred as a result of any
default under or the foreclosure or sale of any such Mortgage
Loan, mortgaged property, Servicing Released Loans, or
Previously Disposed Loans except insofar as (a) such recourse
is based upon a breach by Mortgage Bank of a customary
representation, warranty or undertaking, or (b) Mortgage Bank
incurs expenses such as legal fees in excess of the customary
reimbursement limits, if any, set forth in the applicable
Mortgage Servicing Agreement. For purposes of this Agreement,
the term "Recourse Loan" means any Mortgage Loan, mortgaged
property, Servicing Released Loan or Previously Disposed Loan
with respect to which Mortgage Bank bears the risk of loss as
described in the preceding sentence.
(4) Investor Commitments. First Harrisburg has previously provided
to Xxxxxx complete and correct copies of all commitments to
purchase Mortgage Loans ("Investor Commitments") in effect on
the date hereof. Each Investor Commitment constitutes a valid
and binding obligation of Mortgage Bank, and, to the best
knowledge of First Harrisburg, all of the other Parties
thereto, enforceable in accordance with its terms, subject to
bankruptcy, insolvency or other similar laws affecting the
enforcement of creditors' rights generally and by general
principles of equity (whether applied in a proceeding in
equity or at law). Each Mortgage Loan owned by Mortgage Bank
and currently held for sale which is subject to an Investor
Commitment is a loan eligible to be either an FHA or VA loan
or sold to FNMA ("Conforming Loans") or is otherwise readily
saleable in the secondary market.
(5) Physical Damage. To the best knowledge of First Harrisburg,
there exists no physical damage to any collateral for a
Mortgage Loan, which physical damage is not insured against in
compliance with regulations and which would have a material
adverse effect on the value or marketability of any Mortgage
Loan, or on the underlying collateral.
(6) Advances. There are no pooling, participation, servicing or
other agreements to which Mortgage Bank is a party which
obligate it to make advances with respect to defaulted or
delinquent Mortgage Loans other than as provided in FNMA or
FHLMC pooling and servicing agreements.
(7) Pool Certification. In all material respects, all pools
relating to the Mortgage Loans have been certified in
accordance with applicable regulations, and the securities
backed by such pools have been issued on uniform documents, in
accordance with the applicable investor guide without any
material deviations therefrom. The principal balance
outstanding and owing on the Mortgage Loans in each pool
equals or exceeds the amount owing to the corresponding
security holders of such pool. No event has occurred or failed
to occur which would require Mortgage Bank to repurchase any
Mortgage Loan from any pool, except with respect to the
obligation to repurchase Conforming Loans that are in
foreclosure.
(8) Payoff Statements. All payoff and assumption statements with
respect to each Mortgage Loan provided by Mortgage Bank to
borrowers or their agents were, at the time they were
provided, complete and adequate in all material respects.
(ff) CRA Compliance. First Federal has a satisfactory
Community Reinvestment Act rating.
(gg) Derivatives. Except as set forth in Schedule 3(gg),
neither First Harrisburg nor any First Harrisburg Subsidiary owns or
holds any derivatives, "caps" or "floors" in their investment portfolio
in an amount of $100,000 in the aggregate.
(hh) Loan Loss Reserves. The loan loss reserves of First
Federal are and shall remain adequate in light of generally accepted
accounting principles, directives of governmental authorities, and all
regulations, rules and directives of the FDIC and the OTS.
4. ACCESS TO AND INFORMATION CONCERNING PROPERTIES, RECORDS, ETC. First
Harrisburg and First Federal shall, to the extent permitted by law, give to
Xxxxxx, its counsel, accountants, financial advisors and other representatives
full access, at reasonable times and upon reasonable notice (so as not to
interfere unreasonably with the ordinary course and conduct of business of First
Harrisburg or any of the First Harrisburg Subsidiaries), throughout the period
prior to the Closing, access to all of their respective properties, books,
contracts, commitments and records, including, but not limited to, minute books,
Charters, Articles of Incorporation and Bylaws, and shall furnish to Xxxxxx
during such period all such information concerning First Harrisburg and the
First Harrisburg Subsidiaries and their respective affairs as Xxxxxx may
reasonably request. Without limiting the effect of the foregoing, such access
shall in no event be more limited than that granted by a public company to its
independent accountants in the course of their conduct of an audit of its
financial statements (to the extent such access is permitted by applicable law,
regulation or order). In addition, First Harrisburg and the First Harrisburg
Subsidiaries shall make their respective officers available at reasonable times
and upon reasonable notice to discuss with Xxxxxx' designated representatives
the substance of all documents, financial statements and other information
provided by First Harrisburg and the First Harrisburg Subsidiaries, and other
matters as Xxxxxx shall reasonably deem pertinent to the transactions
contemplated under this Agreement. All information disclosed by any party hereto
or any subsidiary thereof to another party pursuant to this Section 4 shall be
subject to Section 13 hereof (regarding confidential treatment of confidential
or non-public information).
5. AFFIRMATIVE COVENANTS OF XXXXXX. Xxxxxx covenants and agrees that,
throughout the period commencing on the date hereof and ending on the date of
Closing, except for specific proposed actions or inaction as shall be consented
to by First Harrisburg, which consent shall not be unreasonably withheld and
shall be deemed to have been given upon the passage of ten (10) days following
written notice of the proposed action or inaction by Xxxxxx to First Harrisburg
unless First Harrisburg shall reasonably and in good faith object in writing to
Xxxxxx within said period, Xxxxxx will for its own part:
(a) Conduct of Business. Conduct its business in a manner that
will not adversely affect Xxxxxx' ability to obtain all necessary
regulatory approvals for the transactions contemplated hereby or
Xxxxxx' ability to perform its obligations under this Agreement and
conduct its business in the ordinary course; provided that Xxxxxx may
undertake activities which are not in the ordinary course on the
condition that such activities will not result in a material adverse
change in the business, operations, assets or financial condition of
Xxxxxx taken as a whole;
(b) Preservation of Business. Use its best efforts to maintain
and preserve its business;
(c) Insurance. Maintain in full force and effect insurance
customary with industry practices for the businesses conducted by
Xxxxxx;
(d) Laws, Rules, Etc. Comply with and perform all material
obligations and duties imposed upon it by all federal and state laws
and all rules, regulations and orders imposed by federal or state
governmental authorities, except in respects not materially adverse to
the business, operations, assets or financial condition of Xxxxxx or
which would not materially impair the ability of Xxxxxx to consummate
the transactions contemplated hereby;
(e) Best Efforts. Use its best efforts to assure, to the
extent reasonably within its control, as soon as it is reasonably
practicable, the satisfaction of the conditions to the effectiveness of
the transactions contemplated hereunder and the transactions
contemplated by this Agreement; and
(f) Notices. Notify First Harrisburg of (i) any fact or
circumstance of which the executive officers of Xxxxxx have knowledge
which would, absent disclosure by Xxxxxx to First Harrisburg and First
Harrisburg's subsequent consent to such fact or circumstance, not
permit Xxxxxx to satisfy the conditions set forth in Section 10(a)(i)
of this Agreement, (ii) any material breach of any of its covenants and
agreements contained herein, and (iii) any material adverse change in
its financial condition, business or operating results on a
consolidated basis.
(g) Regulatory Applications. Xxxxxx agrees to use its best
efforts to file all requisite regulatory applications with respect to
the transactions contemplated by this Agreement no later than December
31, 1995 and to thereafter use its best efforts to file any necessary
amendments promptly. Copies of such applications and all correspondence
to and from the regulatory authorities shall be promptly provided to
First Harrisburg and its counsel.
6. AFFIRMATIVE COVENANTS OF FIRST HARRISBURG AND FIRST FEDERAL. First
Harrisburg and First Federal covenant and agree that, throughout the period
commencing on the date hereof and ending on the date of Closing, except for
specific proposed actions or inaction as shall otherwise be consented to in
writing by Xxxxxx, First Harrisburg will for its own part, and it will cause the
First Harrisburg Subsidiaries to:
(a) Conduct of Business. Conduct their businesses, including
extensions of credit and mortgage banking operations, only in the
ordinary course consistent with past practices and written policies,
and there will be no Material Adverse Change (as defined in Section 3
hereof) in the business, operations, assets or financial condition of
First Harrisburg and the First Harrisburg Subsidiaries taken as a whole
between the date hereof and the Effective Date;
(b) Preservation of Business. Use their best efforts to
maintain and preserve their businesses and business organizations
intact, including, but not limited to, maintaining goodwill and
relationships with customers and others having business dealings with
First Harrisburg and the First Harrisburg Subsidiaries, preserving and
collecting all material claims and causes of action belonging to First
Harrisburg and the First Harrisburg Subsidiaries, and maintaining their
books of account and other records;
(c) Properties. Maintain and keep their properties, both real
property and tangible personal property, in as good repair and
condition in all material respects as they presently exist, except for
depreciation due to ordinary wear and tear and damage due to
unavoidable casualty;
(d) Insurance. Maintain in full force and effect all
insurances customary with industry practices for the businesses
conducted by First Harrisburg and the First Harrisburg Subsidiaries;
(e) Contracts, Etc. Perform all its material obligations under
agreements, contracts, leases, documents and instruments relating to or
affecting their assets, properties and businesses;
(f) Financial Statements. Furnish to Xxxxxx:
(i) As soon as practicable and in any event within
forty-five (45) days after the end of each of the first three
quarters in each fiscal year, consolidated statements of
operations of First Harrisburg and the First Harrisburg
Subsidiaries for such period and for the period beginning at
the commencement of the fiscal year and ending at the end of
such quarterly period, and a consolidated balance sheet of
First Harrisburg and the First Harrisburg Subsidiaries as of
the end of such quarterly period, setting forth in each case
in comparative form figures for the corresponding periods
ending in the preceding fiscal year, subject to changes
resulting from year-end adjustments;
(ii) Within ninety days of the end of the period
being audited, copies of all audit reports submitted to First
Harrisburg by independent auditors in connection with each
annual, interim or special audit of the books of First
Harrisburg and the First Harrisburg Subsidiaries made by such
accountants;
(iii) As soon as practicable, copies of all such
financial statements and reports as it shall send to its
shareholders and of such regular and periodic reports as First
Harrisburg or the First Harrisburg Subsidiaries may file with
the SEC, the OTS, or any other regulatory authority;
(iv) Promptly upon any executive officer of First
Harrisburg obtaining knowledge of any condition or event which
would constitute a material violation of the terms and
conditions of this Agreement or the
Merger Agreement or which would constitute a material default
under any material indenture, mortgage, agreement or other
instrument securing or relating to any indebtedness of First
Harrisburg or the First Harrisburg Subsidiaries for borrowed
money, a certificate of the President of First Harrisburg,
specifying the nature of such material violation or default
and what action First Harrisburg has taken or is taking or
proposes to take with respect thereto;
(v) Promptly upon becoming aware that any person has
given notice to First Harrisburg or any First Harrisburg
Subsidiary or taken any other action with respect to a claimed
violation or default of the type referred to in subsection
(iv) of this Subsection (f), a written notice describing the
notice given or action taken by such person, the nature of
such violation or default and what action First Harrisburg has
taken or is taking or proposes to take with respect thereto;
and
(vi) With reasonable promptness, such additional
financial data as Xxxxxx may reasonably request.
(g) Laws, Rules, Etc. Comply with and perform all material
obligations and duties imposed upon it by all federal, state, county,
local and municipal laws and all rules, regulations, directives,
decrees, orders, and ordinances imposed by federal, state, county,
local or municipal governmental authorities, including, but not by way
of limitation of the above, compliance with examination reports,
regulations and rulings of the OTS;
(h) Corporate Existence. Maintain its existence, in the case
of First Harrisburg, as a corporation validly existing in good standing
under the laws of the Commonwealth of Pennsylvania, and in the case of
the First Harrisburg Subsidiaries, as an entity of the respective type
set forth on Schedule 3(a) in good standing under the laws of the
respective jurisdictions set forth on Schedule 3(a);
(i) Notices. Notify Xxxxxx of (i) any fact or circumstance of
which the executive officers of First Harrisburg have knowledge which
would, absent disclosure by First Harrisburg to Xxxxxx and Xxxxxx'
subsequent consent to such fact or circumstance, not permit First
Harrisburg to satisfy the conditions set forth in Section 9(a)(i) of
this Agreement, (ii) any material breach of any of its covenants and
agreements contained herein, and (iii) any Material Adverse Change (as
defined in Section 3 hereof) in its financial condition, business,
operations, assets, prospects or operating results on a consolidated
basis;
(j) Best Efforts. Use its best efforts to assure, to the
extent reasonably within its control, as soon as it is reasonably
practicable, the satisfaction of the conditions to the effectiveness of
the transactions contemplated by this Agreement. First Harrisburg and
the First Harrisburg Subsidiaries shall cooperate with Xxxxxx and shall
use their best efforts to do or cause to be done all things necessary
or appropriate on their part in order to fulfill the conditions
precedent set forth in this Agreement and to consummate this Agreement
and the Merger Agreement. In particular, without limiting the
generality of the foregoing, First Harrisburg and the First Harrisburg
Subsidiaries shall:
(i) cooperate with Xxxxxx in the preparation of all
required applications for regulatory approval of the
transactions contemplated by this Agreement;
(ii) in the case of First Harrisburg, call a special
or annual meeting of its shareholders and take, in good faith,
all actions which are necessary or appropriate on its part in
order to secure the approval and adoption of this Agreement
and the Merger Agreement by its shareholders at that meeting;
(iii) cooperate with Xxxxxx in making the employees
of First Harrisburg and the First Harrisburg Subsidiaries
reasonably available for training by Xxxxxx prior to the
Effective Date, to the extent such training is deemed
reasonably necessary by Xxxxxx;
(iv) make additions to loan loss reserves and make
loan writeoffs, writedowns and other adjustments that
reasonably should be made by First Federal in light of
generally accepted accounting principles, directives of
governmental authorities, and all regulations, rules and
directives of the FDIC and the OTS for the period until the
Effective Date;
(v) use its best efforts to assure that the directors
of First Harrisburg shall have executed and delivered the
Support Agreement referred to in Section 9(g) hereof and in a
form acceptable to Xxxxxx;
(vi) execute and deliver the Investment Agreement in
the form set forth in Exhibit 4 hereto; and
(vii) use its best efforts to assure that persons who
currently hold outstanding stock options of First Harrisburg
agree to surrender same in accordance with the terms of this
Agreement.
(k) Amend Corporate Documents. Amend or modify the articles of
incorporation or bylaws or any other documents of First Harrisburg or
the First Harrisburg Subsidiaries in a manner reasonably requested by
Xxxxxx if necessary to effectuate the transactions contemplated hereby;
and
(l) Suspend Stock and Dividend Reinvestment Plans. Suspend its
Dividend Reinvestment Plan as of the date hereof and all other plans
involving the issuance of First Harrisburg Common Stock (other than its
stock option plans) as of the date hereof and amend or terminate the
outstanding First Harrisburg stock option plans by the Effective Date.
(m) First Harrisburg Benefit Plans. All First Harrisburg
employee benefit plans, except the directors' retirement plan, shall be
terminated prior to or as of the Effective Date. For those plans
subject to ERISA, benefits payable upon termination shall not be in
excess of the minimum amounts required to be paid under the provisions
of ERISA and the underlying plan document.
(n) Good Faith Cooperative Effort to Revise Structure. First
Harrisburg and First Federal hereby agree to cooperate with Xxxxxx to
approve any revision to this Agreement, or to the attached Exhibits,
involving a structural change to the Merger and the transactions
contemplated thereunder provided that such cooperation and approval
does not impact upon the amount of consideration to be received by the
shareholders of First Harrisburg or otherwise impact the conditions to
the obligations of any of the Parties in any materially burdensome
manner.
(o) Non-permitted Activities Divestiture. First Harrisburg,
First Federal and the First Harrisburg Subsidiaries shall divest any
non-permitted activity that could not be undertaken or any entity that
could not be operated or owned by Xxxxxx after the Effective Date,
unless the appropriate regulatory agencies permit the retention,
ownership, operation and non-divestiture of such activities or entities
by Xxxxxx. If the appropriate regulatory agencies permit such
activities or entities to be conducted, operated or owned by Xxxxxx as
of the Effective Date and only require that such activities or entities
be discontinued or divested within a specified period of time following
the Effective Date, then First Harrisburg, First Federal and the First
Harrisburg Subsidiaries shall have no obligation to discontinue or
divest such activities or entities prior to the Effective Date.
7. NEGATIVE COVENANTS OF FIRST HARRISBURG AND FIRST FEDERAL. First
Harrisburg and First Federal covenant and agree that, throughout the period
commencing on the date hereof and ending on the date of Closing, except for
proposed specific actions as shall otherwise be consented to in writing by
Xxxxxx, they will not for their own part, nor will they cause or permit any of
the First Harrisburg Subsidiaries or affiliates to:
(a) Amend its charter, articles of incorporation or bylaws;
(b) Issue, sell or otherwise dispose of (or authorize or agree
to issue, sell or dispose of) any shares of its capital stock (other
than pursuant to the outstanding stock options set forth in Schedule
3(b) hereto, the Option Agreement and the 10% stock dividend payable on
November 15, 1995) or any securities or documents convertible into or
representing a right or option to purchase any such shares, or enter
into any other agreements to issue or sell any shares of capital stock
or change the presently outstanding shares of capital stock into a
greater or lesser number of shares either by way of a recapitalization,
reclassification, reorganization, consolidation of shares or the like,
or by a stock split, stock dividend, or by way of a merger or
consolidation;
(c) Purchase, redeem, retire or otherwise acquire, or
hypothecate, pledge or otherwise encumber, any shares of capital stock;
(d) Merge into, consolidate with, or be purchased or acquired
by, any other corporation, entity or person (or agree to any such
merger, consolidation, affiliation, purchase or acquisition), or permit
(or agree to permit) any other corporation, entity or person to be
merged, consolidated or affiliated with it or be purchased or acquired
by it, or, except to realize upon collateral and except for purchases
or sales of loans in the ordinary course of its business, acquire (or
agree to acquire) all or substantially all of the assets of any other
corporation, entity or person or sell or dispose (or agree to sell or
dispose) all or any substantial part of its assets, in each case unless
after written notice to Xxxxxx and following receipt by First
Harrisburg of written advice of counsel, the First Harrisburg Board of
Directors determines that the failure to take such action is likely to
be deemed to constitute a breach of their fiduciary duties under
applicable Pennsylvania law;
(e) Make, declare or pay any dividend other than regular
quarterly cash dividends in an amount not to exceed $.055 per share per
quarter on the First Harrisburg Common Stock or declare or make any
distribution on any shares of its capital stock other than the 10%
stock dividend payable on November 15, 1995;
(f) Enter into any employment contracts, deferred compensation
arrangements, or other agreements or arrangements affecting
compensation or benefits, or pay any bonus to, or increase the rate of
compensation of any director, officer, employee or consultant of First
Harrisburg or any First Harrisburg Subsidiary, other than bonuses and
increases in the rate of compensation of employees of First Harrisburg
or any First Harrisburg Subsidiary in the ordinary course of business
consistent with past practice in an amount not to exceed $50,000 in the
aggregate or bonuses accrued as of the date hereof;
(g) Enter into or modify (except as may be required by
applicable law or to effect the transactions contemplated by this
Agreement) any pension, retirement, stock option, stock purchase,
severance, profit sharing, deferred compensation, 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 current or former directors, officers or other
employees;
(h) Except for indebtedness and contingent liabilities
incurred in the ordinary course of business (e.g., deposit liabilities,
Federal Home Loan Bank advances by First Federal, and non-material
reverse repurchase agreements), incur any indebtedness or liability for
borrowed money evidenced by notes, bonds, debentures or other similar
obligations;
(i) Solicit or encourage inquiries or proposals with respect
to, or furnish any information relating to, or participate in any
negotiations or discussions concerning, any acquisition or purchase of
all or a material portion of its assets (whether owned by it directly
or owned by any First Harrisburg Subsidiary), or of a substantial
equity interest in it or any business combination with it or any First
Harrisburg Subsidiary, and First Harrisburg shall notify Xxxxxx
immediately if any such inquiries or proposals are received by, any
such information is requested from, or any such negotiations or
discussions are sought to be initiated with, First Harrisburg or any
First Harrisburg Subsidiary; and First Harrisburg and the First
Harrisburg Subsidiaries shall not permit any officer, director, agent,
advisor, or affiliate to do any of the above and shall instruct its and
each First Harrisburg Subsidiary's officers, directors, agents,
advisors and affiliates to comply with the above. Notwithstanding the
foregoing, First Harrisburg, after written notice to Xxxxxx, may
respond to unsolicited inquiries from third parties and/or engage in
discussions or negotiations with third parties if, in each case,
following receipt of written advice of counsel, the First Harrisburg
Board of Directors determines that failure to respond to such
unsolicited inquiries and/or engage in such discussions or negotiations
is likely to be deemed to constitute a breach of their fiduciary duties
under applicable Pennsylvania law;
(j) Except in the ordinary course of business, enter into or
assume any material contract, incur any material liability or
obligation, make any material commitment, acquire or dispose of any
property or asset or engage in a transaction or subject any of First
Harrisburg's or First Harrisburg Subsidiaries' properties or assets to
any material lien, claim, charge, or encumbrance of any kind
whatsoever;
(k) Take or permit to be taken any action which would
constitute a breach of any representation, warranty or covenant set
forth in this Agreement;
(l) Enter into any related party transaction except such
related party transactions relating to extensions of credit made in
accordance with applicable laws, regulations and rules and in the
ordinary course of business on substantially the same terms, including
interest rates and collateral, as those prevailing at the time for
comparable arm's length transactions with other persons that do not
involve more than the normal risk of collectibility or present other
unfavorable features;
(m) Sell or otherwise dispose of any capital stock of any
First Harrisburg Subsidiary;
(n) Change any method, practice or principle of accounting
except as may be required by generally accepted accounting principles
or any applicable regulator;
(o) Waive, release, grant or transfer any rights of value or
modify or change in any material respect any existing agreement to
which First Harrisburg or any First Harrisburg Subsidiary is a party,
other than the ordinary course of business, consistent with past
practice;
(p) Make any loan or other credit facility commitment in
excess of $250,000 (including without limitation, lines of credit and
letters of credit) to any affiliate other than Avstar Mortgage
Corporation in the ordinary course of business or compromise, expend,
renew or modify any such commitment outstanding;
(q) Except consistent with past practice, enter into, renew,
extend or modify any other transaction with any affiliate;
(r) Enter into any swap or similar commitment, agreement or
arrangement which is not consistent with past practice and which
increases the credit or interest rate risk over the levels existing at
September 30, 1995;
(s) Enter into any derivative, cap or floor or similar
commitment, agreement or arrangement, except in the ordinary course of
business and consistent with past practices;
(t) Knowingly take any action that would, under any statute,
regulation or administrative practice of the Federal Reserve, the FDIC,
the Department of Banking, the SEC, or the OTS, materially or adversely
affect the ability of either party to obtain any required approvals for
consummation of the transaction;
(u) Sell, transfer, lease or encumber any servicing rights or
other assets except for mortgage loans and related servicing rights in
the ordinary course of business, which ordinary course of business
shall not include, however, the present servicing portfolio on closed
loans maintained by First Harrisburg and the First Harrisburg
Subsidiaries, or purchase any assets except for mortgage loans and
servicing rights related thereto from third party mortgage loan
originators with respect to which Mortgage Bank is a party to an
existing contract;
(v) Materially alter or vary its methods or policies of (i)
underwriting, pricing, originating, warehousing, selling and servicing,
or buying or selling rights to service mortgage loans, (ii) hedging
(which term includes both buying futures and forward commitments from
financial institutions) its mortgage loan positions or commitments, and
(iii) obtaining financing and credit;
(w) Incur any debt other than debt incurred to fund or
purchase mortgage loans from First Harrisburg or a First Harrisburg
Subsidiary;
(x) Directly or indirectly agree to take any of the foregoing
actions specified in subsections (a) through (w) above.
8. CONDITIONS TO THE OBLIGATIONS OF XXXXXX, XXXXXX ACQUISITION,
FIRST HARRISBURG, AND FIRST FEDERAL. The Closing shall be expressly conditioned
upon the following:
(a) Approval of Shareholders. Approval and adoption of this
Agreement and the transactions and agreements contemplated hereby by a
vote of the shareholders of First Harrisburg, as required by applicable
law and by First Harrisburg's Articles of Incorporation, shall have
been obtained and certified. Approval and adoption of this Agreement
and the transactions and agreements contemplated hereby by a vote of
the shareholders of Xxxxxx, as required by applicable law and by the
Xxxxxx Articles of Incorporation, shall have been obtained and
certified;
(b) Approval of Regulatory Agencies. All required consents and
approvals of all regulatory agencies and other authorities having
jurisdiction over the transactions contemplated by this Agreement, the
Merger Agreement, the First Harrisburg Plan of Liquidation and the
First Federal Merger, including without limitation the SEC, OTS,
Department of Banking, FDIC and Federal Reserve, shall have been
granted and obtained, without the imposition of any non-standard term
or condition which would materially impair the value of First
Harrisburg and the First Harrisburg Subsidiaries to Xxxxxx or otherwise
impact Xxxxxx in a materially adverse way and all applicable notice and
waiting periods shall have expired or passed;
(c) Dissenters' Rights. Holders of no more than twenty percent
(20%) of outstanding shares of First Harrisburg shall have exercised
their statutory appraisal or dissenters' rights;
(d) Antitrust Laws. The pre-merger notification provisions of
Section 7A of the Xxxxxxx Act shall have been complied with by the
Parties hereto, and no other statutory or regulatory requirements with
respect to the Xxxxxxx Act shall be applicable;
(e) Suits, Actions. No party hereto shall be subject to any
action, suit, proceeding, order, decree or injunction of a court or
agency of competent jurisdiction which enjoins or prohibits the
consummation of the transactions contemplated by this Agreement;
(f) Statutes, Orders. No statute, rule, regulation, order,
injunction or decree shall have been enacted, entered, promulgated or
enforced by any governmental authority which prohibits or makes illegal
the consummation of the transactions contemplated by this Agreement;
and
(g) Other Requirements. All other requirements prescribed by
law which are necessary to the consummation of the transactions
contemplated by this Agreement shall have been satisfied.
9. CONDITIONS TO THE OBLIGATIONS OF XXXXXX AND XXXXXX ACQUISITION.
Consummation by Xxxxxx and Xxxxxx Acquisition of the transactions contemplated
hereby is subject to the following conditions precedent, any of which, however,
may be waived, to the extent permitted by applicable law or regulation, by the
consent in writing of Xxxxxx and Xxxxxx Acquisition.
(a) Representations, Warranties and Covenants.
(i) The representations and warranties of First
Harrisburg (both on its own behalf and on behalf of the First
Harrisburg Subsidiaries) contained herein (A) shall have been
true and correct in all material respects on the date hereof,
and (B) other than as disclosed by First Harrisburg to, and
approved by, Xxxxxx in writing prior to or at the Closing,
shall be true and correct in all material respects as of the
Closing, except as otherwise provided or permitted by this
Agreement and except as to any representation or warranty
which specifically relates to an earlier date.
(ii) First Harrisburg and the First Harrisburg
Subsidiaries shall have duly performed or complied in all
material respects with all covenants, not otherwise waived by
Xxxxxx and Xxxxxx Acquisition in writing, required by this
Agreement to be performed by First Harrisburg and the First
Harrisburg Subsidiaries prior to or at the Closing.
(iii) Xxxxxx shall have received a certificate of
First Harrisburg dated as of the Closing, signed by the
President and the Chief Financial Officer of First Harrisburg,
certifying in such detail as Xxxxxx may reasonably request the
fulfillment of the conditions set forth in Sections 9(a)(i)
and (ii) above.
(b) Opinion of Special Counsel. All proceedings and legal
details incident to this Agreement shall be satisfactory to Xxxxxxxx
Xxxxxxxx, P.C. as special counsel for Xxxxxx and Xxxxxx Acquisition,
and Xxxxxx shall have received an opinion reasonably satisfactory to it
from Elias, Matz, Xxxxxxx & Xxxxxxx L.L.P. as special counsel for First
Harrisburg and First Federal, dated as of the date of the Closing and
addressed to Xxxxxx, to the effect that:
(i) First Harrisburg is a corporation organized and
validly existing under the laws of the Commonwealth of
Pennsylvania and has the corporate power and authority to
execute, deliver and perform all transactions contemplated by
the Agreement and has the corporate power and authority to own
and hold its properties and to carry on its business
immediately prior to Closing as previously described in the
Proxy Statement.
(ii) The authorized capital stock of First Harrisburg
consists of 10,000,000 shares of common stock, par value $.01
per share, and 5,000,000 shares of preferred stock, par value
$.01 per share, of which [the number of shares of First
Harrisburg Common Stock specified in the opinion] are issued
and outstanding on the Effective Date and [number specified in
opinion] shares are held in treasury. Each of the outstanding
shares of First Harrisburg Common Stock has been validly
issued and is fully paid and non-assessable. None of such
outstanding shares of First Harrisburg Common Stock have been
issued in violation of any preemptive rights. To such
counsel's Actual Knowledge, as defined below, no unissued
shares of First Harrisburg Common Stock or any other
securities of First Harrisburg are subject to any warrants,
options, commitments, preemptive or other rights of any kind
or nature, and First Harrisburg is not obligated to issue any
additional shares of capital stock or any other securities of
any kind or nature, except for [number specified in opinion]
options outstanding which were granted pursuant to stock
option plans of First Harrisburg and First Federal and except
pursuant to the Option Agreement.
(iii) First Federal is an entity of the type set
forth on Schedule 3(a) hereto, and is organized and validly
existing under the laws of the jurisdiction set forth on said
Schedule 3(a). First Federal has the corporate power and
authority to execute, deliver and perform all transactions
contemplated by the Agreement. First Federal has the corporate
power and authority to own and hold its properties and to
carry on its business immediately prior to Closing as
previously described in the Proxy Statement.
(iv) All of the issued and outstanding capital stock
of First Federal is validly issued, fully paid and
non-assessable and, to such counsel's Actual Knowledge, owned
directly by First Harrisburg.
(v) The execution, delivery and performance as of the
date of such opinion of all transactions contemplated by the
Agreement have been duly authorized by the Boards of Directors
of First Harrisburg and First Federal, and as to the Option
Agreement by the Board of Directors of First Harrisburg, and
do not violate any of the provisions of, or constitute a
default under or give any person or party the right to
accelerate payment or performance under, the articles of
incorporation or bylaws of First Harrisburg or First Federal
or to such counsel's Actual Knowledge any material agreement,
document or instrument to which either First Harrisburg or
First Federal is a party and which was either included as an
exhibit to any filing made by First Harrisburg under either
the Securities Act of 1933 or the Securities Exchange Act of
1934 or which is identified in Schedule 3(j) to the Agreement.
(vi) The Agreement (other than the Option Agreement,
as to which no opinion need be rendered pursuant to this
clause) has been duly authorized, executed and delivered by
First Harrisburg and First Federal and constitutes a valid and
binding obligation of First Harrisburg and First Federal,
enforceable against First Harrisburg and First Federal in
accordance with its terms, except as may be limited by (i)
bankruptcy, insolvency, reorganization, moratorium,
conservatorship, receivership or other similar laws now or
hereafter in effect relating to or affecting the enforcement
of creditors' rights generally or the rights of creditors of
federal savings institutions or their holding companies, (ii)
general equitable principles, and (iii) laws relating to the
safety and soundness of insured depository institutions, and
except that no opinion need be expressed as to the effect or
availability of equitable remedies or injunctive relief
(regardless of whether such enforceability is considered in a
proceeding in equity or at law).
(vii) The Option Agreement has been duly authorized,
executed and delivered by First Harrisburg.
(viii) To the Actual Knowledge of such counsel the
execution, delivery and performance of the Agreement and the
transactions contemplated thereunder by First Harrisburg and
First Federal do not violate any provision of law, regulation,
rule, order, or decree applicable to First Harrisburg or First
Federal.
(ix) All consents and approvals of (and filings with)
the FDIC and the OTS required by law to have been obtained or
made by First Harrisburg and First Federal in order to permit
First Harrisburg and First Federal to perform their
obligations under the Agreement have been obtained or made.
(x) To the Actual Knowledge of such counsel, there is
no action, suit or proceeding pending or threatened before any
federal, state or local court or governmental authority or
before any arbitration tribunal which seeks to modify, enjoin
or prohibit or otherwise adversely and materially affect the
transactions contemplated by the Agreement that, if determined
adversely to First Harrisburg and the First Harrisburg
Subsidiaries, would have a material and adverse effect upon
the condition (financial or otherwise), assets, liabilities,
business or operations of First Harrisburg and the First
Harrisburg Subsidiaries taken as a whole.
(xi) First Federal is a member of the Federal Home
Loan Bank of Pittsburgh and the deposits of First Federal are
insured by the SAIF administered by the FDIC.
The opinion of First Harrisburg's special counsel shall be
governed by the Legal Opinion Accord ("Accord") of the American Bar
Association Section of Business Law (1991). The term "Actual Knowledge"
as used herein shall have the meaning set forth in the Accord. In
addition, such opinion may be limited to present statutes, regulations,
rulings, and formal agency and judicial interpretations and to facts as
they presently exist; in rendering such opinion, such counsel need
assume no obligation to revise or supplement it should the present laws
be changed by legislative or regulatory action, judicial decision or
otherwise after such opinion is rendered. Such counsel may assume that
any agreement is the valid and binding obligation of any Parties to
such agreement other than First Harrisburg or First Federal. In giving
such opinion, such counsel may rely as to all matters of fact on
certificates of officers or directors of First Harrisburg and First
Federal and certificates of public officials. Such counsel's opinion
shall be limited to matters governed by federal laws and by the
Business Corporation Law. With respect to matters involving the
application of Pennsylvania law, such counsel may rely, to the extent
it deems proper and as specified in its opinion, upon the opinion of
local counsel. Such counsel may also indicate that it is expressing no
opinion as to the fairness of the transactions contemplated by this
Agreement or of the Merger Consideration to be received by the holders
of First Harrisburg Common Stock from a financial point view or as to
the business judgement of the Board of Directors of First Harrisburg
and First Federal in connection with their adoption of the Agreement.
(c) Opinion of Local Counsel. Xxxxxx shall have received an
opinion reasonably satisfactory to it from First Harrisburg's local
counsel as local counsel for the First Harrisburg Subsidiaries dated as
of the date of the Closing and addressed to Xxxxxx, to the effect that:
(i) Each of the First Harrisburg Subsidiaries (other
than First Federal) is an entity of the respective type set
forth on Schedule 3(a) hereto and is organized and validly
existing under the laws of the respective jurisdiction set
forth on said Schedule 3(a). Each of the First Harrisburg
Subsidiaries has the corporate power and authority to own and
hold its properties and to carry on its present business.
(ii) All of the issued and outstanding First
Harrisburg Subsidiaries' Capital Stock is validly issued,
fully paid and non-assessable and, to such counsel's Actual
Knowledge, is owned directly or indirectly by First
Harrisburg.
(iii) The execution, delivery and performance as of
the date of such opinion of all transactions contemplated by
the Agreement do not violate any of the provisions of, or
constitute a default under or give any person or party the
right to accelerate payment or performance under, the articles
of incorporation or bylaws of any of the First Harrisburg
Subsidiaries or to such counsel's Actual Knowledge, any other
material agreement, document or instrument to which any of the
first Harrisburg Subsidiaries is a party or by which it or any
of its properties or assets is bound.
In giving such opinion, such counsel may rely as to all
matters of fact on certificates of officers or directors of the First
Harrisburg Subsidiaries and certificates of public officials. Such
opinion shall be governed by the Accord, and the term "Actual
Knowledge" as used herein shall have the meaning set forth in the
Accord.
(d) Suit, Action, Etc. No suit, action or other proceeding
shall be pending or directly threatened by any federal, state or other
governmental agency, commission or authority having jurisdiction or
authority over First Harrisburg, any First Harrisburg Subsidiary,
Xxxxxx or Xxxxxx Acquisition or by any other person, in which it is
sought to restrain or prohibit consummation of the transactions
contemplated by this Agreement and which in the reasonable and good
faith judgment of the management of Xxxxxx, based upon the written
advice of its counsel, is meritorious and adversely affects the
prospects of such consummation.
(e) Accountants' Comfort Letter. Xxxxxx and Xxxxxx Acquisition
shall have received "comfort" letters from First Harrisburg's
independent certified public accountants dated (i) within five business
days of the date of mailing of the Proxy Statement and (ii) the
Effective Date, in each case substantially to the effect that:
(A) it is a firm of independent public accountants
with respect to First Harrisburg and the First Harrisburg
Subsidiaries within the rules and regulations of the SEC;
(B) in its opinion the audited consolidated financial
statements of First Harrisburg and the First Harrisburg
Subsidiaries examined by it and included in the Proxy
Statement comply as to form in all material respects with the
applicable rules and regulations of the SEC; and
(C) on the basis of specified procedures (which do
not constitute an examination in accordance with generally
accepted auditing standards), nothing has come to its
attention which causes it to believe: (i) that the
consolidated financial statements, if any, of First Harrisburg
included in such Proxy Statement do not comply in all material
respects with the applicable accounting requirements and of
the rules and regulations of the SEC and (ii) that any such
unaudited consolidated financial statements of First
Harrisburg from which unaudited quarterly financial
information set forth in such Proxy Statement has been
derived, are not fairly presented in conformity with generally
accepted accounting principles applied on a basis consistent
with that of the audited consolidated financial statements.
(f) Accountants' Letter. Xxxxxx and Xxxxxx Acquisition shall
have received a letter dated as of the Effective Date from its
independent certified public accountants to the effect that the Merger
will be accounted for under the purchase method of accounting.
(g) Support Agreement. Each of the directors of First
Harrisburg shall have executed and delivered to Xxxxxx a "Support
Agreement" in a form that is acceptable to Xxxxxx.
(h) Investment Agreement. First Harrisburg shall have executed
and delivered to Xxxxxx an Investment Agreement, "the Option
Agreement," in the form set forth in Exhibit 4 hereto.
(i) Tax Ruling or Opinion. Xxxxxx shall have received at the
Closing, a ruling from the Internal Revenue Service or an opinion of
KPMG Peat Marwick, L.L.P., that the transactions contemplated by this
Agreement, the Merger Agreement, the First Harrisburg Plan of
Liquidation and the First Federal Merger will not be taxable
transactions to the Parties, will qualify for treatment under Section
338 of the Internal Revenue Code of 1986, as amended, and will not have
adverse tax consequences or result in adverse tax attributes to the
Parties. Such ruling or opinion shall be in a form and of content
reasonably satisfactory to Xxxxxx.
(j) Closing Documents. First Harrisburg and First Federal
shall have delivered to Xxxxxx and Xxxxxx Acquisition (i) all consents
and authorizations of landlords and other persons that are necessary to
permit this Agreement to be consummated without violation of any lease
or other agreement to which First Harrisburg or a First Harrisburg
Subsidiary is a party or by which First Harrisburg or a First
Harrisburg Subsidiary or any of their properties are bound; and (ii)
such other certificates and documents as Xxxxxx and Xxxxxx Acquisition
and their counsel may reasonably request (all of the foregoing
certificates and other documents being herein referred to as "First
Harrisburg Closing Documents").
(k) Outstanding Stock Options. All unexercised stock options,
derivatives or other instruments of First Harrisburg that are issuable
by First Harrisburg or issued and outstanding of First Harrisburg shall
have been retired, redeemed, surrendered, exercised or otherwise
satisfied or settled prior to the Effective Date.
(l) Effectiveness of Transactions. All transactions
contemplated by and provided for in this Agreement, the Merger
Agreement, the First Harrisburg Plan of Liquidation, and the First
Federal Merger Agreement shall be imminent and there shall be no
impediment existing that would materially impair the Parties' ability
to effectuate same.
(m) Non-permitted Activities. First Harrisburg, First Federal
and the other First Harrisburg Subsidiaries shall have divested of all
activities or entities, that if they were to be conducted, operated or
owned by Xxxxxx, would constitute a non-permitted activity or entity of
Xxxxxx, unless the appropriate regulatory agencies permit the
retention, ownership, operation and non-divestiture of such activities
or entities by Xxxxxx as of the Effective Date. If the appropriate
regulatory agencies permit such activities or entities to be conducted,
operated or owned by Xxxxxx as of the Effective Date and only require
that such activities or entities be discontinued or divested within a
specified period of time following the Effective Date, then First
Harrisburg, First Federal and the First Harrisburg Subsidiaries shall
have no obligation to discontinue or divest such activities or entities
prior to the Effective Date.
(n) Xxxxxx Fairness Opinion. Xxxxxx shall have obtained from
its independent financial advisors an opinion dated within five
business days of the date of the Proxy Statement for the Xxxxxx
Shareholders' Meeting, stating that the Merger Consideration to be paid
by Xxxxxx is fair, from a financial point of view, to Xxxxxx and its
shareholders.
10. CONDITIONS TO THE OBLIGATIONS OF FIRST HARRISBURG AND FIRST
FEDERAL. Consummation by First Harrisburg and First Federal of the transactions
contemplated hereby is subject to the following conditions precedent, any of
which, however, may be waived, to the extent permitted by applicable law or
regulation, by the consent in writing of First Harrisburg and First Federal.
(a) Representations and Warranties.
(i) The representations and warranties of Xxxxxx and
Xxxxxx Acquisition contained herein (A) shall have been true
and correct in all material respects on the date hereof, and
(B) other than as disclosed by Xxxxxx to, and approved by,
First Harrisburg and First Federal in writing prior to or at
the Closing, shall be true and correct in all material
respects as of the Closing, except as otherwise permitted by
this Agreement and except as to any representation or warranty
which specifically relates to an earlier date.
(ii) Xxxxxx and Xxxxxx Acquisition shall have duly
performed or complied in all material respects with all
covenants, not otherwise waived by First Harrisburg and First
Federal in writing, required by this Agreement to be performed
by Xxxxxx and Xxxxxx Acquisition prior to or at the Closing.
(iii) First Harrisburg shall have received a
certificate of Xxxxxx dated as of the Closing, signed by the
President and the Chief Financial Officer of Xxxxxx,
certifying in such detail as First Harrisburg may reasonably
request the fulfillment of the conditions set forth in
Sections 10(a)(i) and (ii) above.
(b) Opinion of Counsel. All proceedings and legal details
incident to this Agreement shall be satisfactory to Elias, Matz,
Xxxxxxx & Xxxxxxx L.L.P. as special counsel for First Harrisburg, and
First Harrisburg shall have received an opinion reasonably satisfactory
to it from Xxxxxxxx Xxxxxxxx, P.C. as special counsel for Xxxxxx, dated
as of the date of the Closing and addressed to First Harrisburg to the
effect that:
(i) Xxxxxx is a Pennsylvania state-chartered stock
savings bank and is organized and validly existing under the
laws of the Commonwealth of Pennsylvania and has the corporate
power and authority to execute, deliver and perform all
transactions contemplated by this Agreement.
(ii) The execution, delivery and performance of all
transactions contemplated by the Agreement have been duly
authorized by the Board of Directors of Xxxxxx and Xxxxxx
Acquisition, and do not and will not violate any of the
provisions of, or constitute a default under, or give any
person or party the right to accelerate payment or performance
under the Articles of Incorporation or Bylaws of Xxxxxx or
Xxxxxx Acquisition, or to such counsel's Actual Knowledge, as
defined below, any other material agreement, document or
instrument to which Xxxxxx is a party or by which it or any of
its properties or assets is bound.
(iii) The Agreement has been duly authorized,
executed and delivered by Xxxxxx and Xxxxxx Acquisition and
constitutes a valid and binding obligation of Xxxxxx and
Xxxxxx Acquisition, enforceable against Xxxxxx and Xxxxxx
Acquisition in accordance with its terms, except as may be
limited by bankruptcy, insolvency, reorganization, moratorium,
conservatorship, receivership or other similar laws now or
hereafter in effect relating to or affecting the enforcement
of creditors' rights generally or the rights of creditors of
state chartered savings banks generally or their holding
companies, general equitable principles, and laws relating to
the safety and soundness of insured depository institutions,
and except that no opinion need be expressed as to the effect
or availability of equitable remedies or injunctive relief
(regardless of whether such enforceability is considered in a
proceeding in equity or at law).
(iv) To the Actual Knowledge of such counsel, the
execution, delivery and performance of the Agreement and the
transactions contemplated thereunder by Xxxxxx and Xxxxxx
Acquisition do not violate any provision of law, regulation,
rule, order or decree applicable to Xxxxxx or Xxxxxx
Acquisition.
(v) All consents and approvals of (and filings with)
all federal or state regulatory agencies or other authorities
having jurisdiction over the transactions contemplated by the
Agreement required by law for Xxxxxx and Xxxxxx Acquisition to
have been obtained or made have been obtained or made; such
opinion to express those agencies or authorities whose
approvals have been obtained or accomplished.
(vi) To the Actual Knowledge of such counsel, there
is no action, suit or proceeding pending or threatened before
any federal, state or local court or government authority or
before any arbitration tribunal which seeks to modify, enjoin
or prohibit or otherwise adversely and materially affect the
transactions contemplated by the Agreement that, if determined
adversely to Xxxxxx and Xxxxxx Acquisition, would have a
material and adverse effect upon the ability of Xxxxxx and
Xxxxxx Acquisition to consummate the Merger.
The opinion of Xxxxxxxx Xxxxxxxx, P.C. shall be governed by
the Legal Opinion Accord ("Accord") of the American Bar Association
Section of Business Law (1991). The term "Actual Knowledge" as used
herein shall have the meaning set forth in the Accord. In addition,
such opinion may be limited to present statutes, regulation, rulings,
and formal agency and judicial interpretations and to facts as they
presently exist; in rendering such opinion, such counsel need assume no
obligation to revise or supplement it should the present laws be
changed by legislation or regulatory action, judicial decision or
otherwise, after such opinion has been rendered. Such counsel may
assume that any agreement is the valid and binding obligation of any
Parties to such agreement, other than Xxxxxx or Xxxxxx Acquisition. In
giving such opinion, such counsel may rely as to all matters of fact on
certificates of officers or directors of Xxxxxx and Xxxxxx Acquisition
and certificates of public officials. Such counsel's opinion shall be
limited to matters governed by federal laws and by the laws of the
Commonwealth of Pennsylvania.
(c) Suit, Action, Etc. No suit, action or other proceeding
shall be pending or directly threatened by any federal, state or other
governmental agency, commission or authority having jurisdiction or
authority over First Harrisburg, any First Harrisburg Subsidiary,
Xxxxxx or Xxxxxx Acquisition, or by any other person, in which it is
sought to restrain or prohibit consummation of the transactions
contemplated by this Agreement.
(d) Deposit into Payment Fund. On or prior to the Effective
Date, Xxxxxx Acquisition shall have deposited cash into the Payment
Fund in an amount sufficient to enable Xxxxxx and Xxxxxx Acquisition to
satisfy their obligations to pay the Aggregate Merger Consideration
under this Agreement.
(e) First Harrisburg Fairness Opinion. First Harrisburg shall
have obtained from its independent financial advisors an opinion dated
within five business days of the date of the Proxy Statement for the
First Harrisburg Shareholders' Meeting stating that the Merger
Consideration to be received by the holders of First Harrisburg Common
Stock is fair from a financial point of view.
11. TERMINATION OF AGREEMENT. This Agreement may be terminated at any
time prior to the Effective Date, whether before or after its approval and
adoption by the shareholders of First Harrisburg and Xxxxxx, only if one or more
of the following events shall occur:
(a) By any party to the Agreement, if the Closing shall not
have occurred on or before October 31, 1996, unless the failure to so
consummate by such time is due to the breach of this Agreement by the
Party seeking to terminate, or such later date as shall have been
agreed to by the Parties hereto (the "Termination Date").
(b) At any time by the mutual written agreement of the Parties
hereto.
(c) Immediately upon the expiration of thirty (30) days from
the date that Xxxxxx or Xxxxxx Acquisition has given notice to First
Harrisburg of First Harrisburg's or First Federal's material
misrepresentation or breach of any warranty or representation or breach
in any material respect, individually or collectively, of any covenant
or agreement herein; provided, however, that no such termination shall
take effect unless it is reasonably evident that First Harrisburg or
First Federal cannot or will not fully and completely correct the
grounds for termination as specified in the aforementioned notice on or
before the date of Closing.
(d) Immediately upon the expiration of thirty (30) days from
the date that First Harrisburg or First Federal has given notice to
Xxxxxx of Xxxxxx' or Xxxxxx Acquisition's material misrepresentation or
breach of any warranty or representation or breach in any material
respect, individually or collectively, of any covenant or agreement
herein; provided, however, that no such termination shall take effect
unless it is reasonably evident that Xxxxxx or Xxxxxx Acquisition
cannot or will not fully and completely correct the grounds for
termination as specified in the aforementioned notice on or before the
date of Closing.
(e) By Xxxxxx and Xxxxxx Acquisition or First Harrisburg and
First Federal, by a vote of a majority of the members of their
respective Boards of Directors, if the shareholders of First Harrisburg
or Xxxxxx fail to approve this Agreement.
(f) If any Party has been informed in writing by the OTS, the
FDIC, the Banking Department, the Federal Reserve or any other required
regulatory authority that a required approval or consent will not be
granted and the time period for all appeals and reconsideration has
expired.
12. EXPENSES.
(a) Each Party hereto will bear all expenses incurred by it in
connection with this Agreement and the transactions contemplated
hereby, except printing expenses which shall be shared, based on each
Party's proportionate cost associated with the solicitation of each
Party's respective shareholders. In the event of termination of this
Agreement pursuant to Section 11, this Agreement shall thereafter
become void and there shall be no liability on the part of any Party
hereto or on their respective officers or directors, except as provided
in Sections 12(b) and 13 hereof, and except that any such termination
shall be without prejudice to the rights of any Party hereto arising
out of the willful breach of any covenant or willful misrepresentation
contained in this Agreement by any other Party hereto.
(b) In the event any Party shall willfully default in its
obligations hereunder, any non-defaulting Party may pursue any remedy
available at law or in equity to enforce its rights and shall be paid
by the defaulting Party for all damages (except consequential damages),
costs and expenses, including legal, accounting, investment banking,
printing and mailing expenses, incurred or suffered by the
non-defaulting Party in connection herewith or in the enforcement of
its rights hereunder. Negligent misrepresentations or omissions of
information that are immaterial to this Agreement shall provide no
basis for terminating or rescinding this Agreement.
13. CONFIDENTIALITY. Any non-public or confidential information
disclosed by either First Harrisburg (including any First Harrisburg Subsidiary)
or by Xxxxxx to the other Parties pursuant to this Agreement or as a result of
the discussions and negotiations leading to this Agreement or otherwise, or to
which any Party has acquired or may acquire access pursuant to which the
disclosing Party indicates (either expressly, in writing or orally, or by the
context of the disclosure or access) that such information is non-public or
confidential shall be kept strictly confidential and shall not be used in any
manner by the recipient except in connection with the transactions contemplated
by this Agreement. To that end, the Parties hereto will each, to the maximum
extent practicable, restrict knowledge of and access to non-public or
confidential information of the other Party to its officers, directors,
employees and professional advisors who are directly involved in the
transactions contemplated hereby and who reasonably need to know such
information. Further to that end, all non-public or confidential documents
(including all copies thereof) obtained hereunder by any Party shall be returned
as soon as practicable after receiving a request from the other Party following
any termination of this Agreement.
14. SURVIVAL OF REPRESENTATIONS AND WARRANTIES, ETC. Except for the
provisions of Sections 1, 13 and 15 hereof, no representation, warranty or
covenant of any Party contained in this Agreement, or in any exhibit,
certificate or other instrument referred to in this Agreement and which is
delivered or made pursuant to this Agreement (or in connection with any
transaction contemplated by this Agreement) shall survive the Closing.
15. CERTAIN POST-MERGER AGREEMENTS. The Parties hereto agree that:
(a) Employees.
(i) Immediately prior to or as of the Effective Date,
First Harrisburg shall terminate all qualified employee
pension, profit sharing and stock bonus plans (including its
Employee Stock Ownership Plan) and all employees of First
Harrisburg and the First Harrisburg Subsidiaries will, to the
extent provided by the relevant plan and by law, become fully
vested in and eligible to receive benefits under all such
plans of First Harrisburg and the First Harrisburg
Subsidiaries and such plans will be fully funded prior to
termination. First Harrisburg shall distribute all vested
accrued benefits as soon as reasonably practicable following
such termination and shall obtain such regulatory
determinations as may be appropriate to ensure the qualified
status of such plans pursuant to ss.401(a) of the Code upon
termination. Xxxxxx and Xxxxxx Acquisition shall have no
liability under such plans.
(ii) Former First Harrisburg, First Federal or First
Harrisburg subsidiary employees who become employed by Xxxxxx
immediately following the Effective Date, shall be entitled to
participate in those hospitalization, medical, life and
disability benefit plans provided by Xxxxxx for its employees
in accordance with the terms of those plans. Former employees
of First Harrisburg or any of the First Harrisburg
Subsidiaries who become employed by Xxxxxx on the Effective
Date shall, to the extent permissible in accordance with the
provisions of the applicable plan, insurance policies,
contract and underlying law, receive service credit from their
hire date for employment at First Harrisburg or the First
Harrisburg Subsidiaries for purposes of eligibility to
participate in the above plans provided by Xxxxxx.
(iii) Upon the Effective Date, former First
Harrisburg or First Harrisburg Subsidiary employees who become
employed by Xxxxxx will be entitled to participate, pursuant
to the terms of the applicable plan, in the qualified pension,
profit sharing and stock bonus plans in effect at such time
for employees of Xxxxxx. Former employees of First Harrisburg
and the First Harrisburg Subsidiaries who become employed by
Xxxxxx on the Effective Date shall receive service credit from
their hire date for employment at First Harrisburg or the
First Harrisburg Subsidiaries for purposes of eligibility and
vesting requirements under Xxxxxx' retirement savings plan and
defined benefit pension plan and service credit from the
Effective Date for purposes of benefit calculation under
Xxxxxx' defined benefit pension plan.
(iv) Pre-existing condition requirements for health,
life, disability and other benefits and any insurance waiting
period will be waived only for those former First Harrisburg
or First Harrisburg Subsidiary employees offered employment
with Xxxxxx to the extent that Xxxxxx' benefit plans,
insurance policies or programs would permit the same without a
material increase in Xxxxxx' premiums or costs associated
therewith.
(v) Nothing in this Agreement shall obligate or
require Xxxxxx to hire or employ any First Harrisburg, First
Federal, or First Harrisburg Subsidiary employee on or after
the Effective Date.
(vi) As provided herein, Xxxxxx will provide or allow
severance payments to employees of First Harrisburg and the
First Harrisburg Subsidiaries (other than employees whose
severance benefits are provided for in written employment
agreements) whose employment is terminated (other than for
cause) on or after the Effective Date and before the
expiration of six months following the Effective Date, in the
amount equal to one week's pay for each year of service with
First Harrisburg or a First Harrisburg Subsidiary, up to a
maximum of 26 weeks. In computing such severance payments for
non-exempt, full time employees, overtime and bonus are
excluded. In computing such severance payments for non-exempt
regular part-time employees, the weekly compensation shall be
based on one-fifty-second (1/52) of the employee's total
salary, excluding overtime and bonus, paid in 1995. For full
time exempt employees, weekly compensation is calculated by
taking 1/52 of the employee's 1995 annual salary, excluding
bonus.
(b) Existing Employment Agreements. Xxxxxx will allow First
Harrisburg to honor the termination provisions of the employment
contracts with the following persons: J. Xxxxxxxxx Xxxxxxx and Xxxxxxx
X. Xxxxxxx.
(c) Board of Directors of Xxxxxx. Upon consummation of all of
the transactions contemplated by this Agreement, and subject to receipt
of any required regulatory approvals, Xxxxxx will appoint Xxxxx X.
Xxxxxxxx to its Board of Directors for a term expiring at the annual
shareholders' meeting to be held in April 1997.
(d) Directors' Retirement Plan. Xxxxxx will honor the terms of
First Federal's Non-Employee Directors' Retirement Plan. However, under
no circumstances shall Xxxxxx' obligations under such Plan exceed
$470,000.
(e) Deferred Compensation Agreements. Xxxxxx will honor the
terms of First Federal's Deferred Compensation Agreements with Messrs.
Trewhella, Aronson, Xxxxxxxx and Xxxxxxx and Xxx. Xxxxxx and First
Federal's Deferred Compensation Trust Agreement with an independent
trustee dated October 16, 1992, as amended. However, under no
circumstances shall Xxxxxx' obligations under such agreements exceed
the amounts deferred on or prior to the Effective Date and the
investment returns on such amounts deferred.
(f) Indemnification and Insurance. On and after the Effective
Date and for a period ending six years thereafter, Xxxxxx shall
indemnify, defend and hold harmless all former and then-existing
directors, officers, employees and agents of First Harrisburg or of any
of First Harrisburg Subsidiary against all losses, claims, damages,
costs, expenses, liabilities or judgments or amounts that are paid in
settlement (with the approval of Xxxxxx, which approval shall not be
unreasonably withheld) or in connection with any claim, action, suit,
proceeding or investigation based 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, employee or agent of First Harrisburg or any First Harrisburg
Subsidiary, whether pertaining to any matter existing or occurring at
or prior to the Effective Date and whether asserted or claimed prior
to, or at or after, the Effective Date to the same extent as such
officer, director, employee or agent would be entitled to
indemnification by First Harrisburg or any First Harrisburg Subsidiary
as of the date hereof including the right to advancement of expenses,
provided, however, that any such officer, director, employee or agent
of First Harrisburg may be indemnified by Xxxxxx only to the extent
permitted by applicable law and to the extent permitted by Xxxxxx'
Articles of Incorporation and By-laws. In addition, Xxxxxx shall use
commercially reasonable efforts to obtain and maintain a directors' and
officers' liability insurance tail coverage policy with respect to the
directors and officers of First Harrisburg and the First Harrisburg
Subsidiaries relating to periods prior to the Effective Date and for a
period ending two years thereafter.
(g) After approval of this Agreement, the Merger Agreement and
the transactions contemplated hereby by the First Harrisburg
Shareholders at the First Harrisburg Shareholders Meeting and at or
immediately prior to the Effective Date, First Harrisburg and First
Federal shall make reasonable writedowns, charge offs, adjustments and
expense payments that Xxxxxx may reasonably request.
16. ENTIRE AGREEMENT. This Agreement, the Merger Agreement, and all
exhibits, agreements and schedules attached hereto, as well as any other
document if signed by the Parties hereto and specifically providing that it is
an exception to the limitations contained in this Section, embody the entire
agreement among the Parties hereto with respect to the matters agreed to herein,
and, except as expressly provided herein, this Agreement shall not be affected
by reference to any other document except for any such document (an "Addendum")
signed by the duly authorized representatives of the Parties hereto and
specifically providing that it is an exception to the limitations contained in
this Section 16. All prior negotiations, discussions and agreements by and among
the Parties hereto with respect to matters agreed to in this Agreement, the
Merger Agreement, the First Harrisburg Plan of Liquidation and the First Federal
Merger or the exhibits or schedules hereto, are hereby superseded and shall have
no force or effect.
17. PUBLICITY. The content and timing of all publicity and
announcements concerning this Agreement, and all transactions contemplated by
this Agreement, shall be subject to joint consultation and approval of the
Parties hereto, subject, however, to the legal obligations applicable to public
companies.
18. AMENDMENT AND WAIVER. Neither this Agreement, nor any term,
covenant, condition or other provision hereof, may be amended, modified,
supplemented, waived, discharged or terminated except by a document in writing
signed by responsible officers and duly authorized by the respective boards of
directors of the Parties hereto; provided, however, that after approval and
adoption of this Agreement, the Merger Agreement and the transactions
contemplated thereby by the shareholders of First Harrisburg, no amendment,
modification or supplement shall reduce the amount of Merger Consideration to be
delivered to shareholders of First Harrisburg as contemplated by this Agreement,
except in each case to the extent that the First Harrisburg shareholders consent
to such amendment, modification or supplement in accordance with applicable
federal and state law.
19. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the Commonwealth of Pennsylvania except to the
extent that federal law is controlling.
20. COMMUNICATIONS. All notices, claims, requests, demands, consents
and other communications which are required or permitted to be given hereunder
shall be in writing and shall be deemed to have been duly given if hand
delivered, sent by recognized overnight delivery service, sent by certified or
registered mail, postage prepaid, return receipt requested, or by confirmed
telecopy as follows:
(a) If to Xxxxxx, to:
Xx. Xxxxxxx X. XxXxxxxxxx
President and CEO
XXXXXX SAVINGS BANK
Second and Xxxx Xxxxxxx
Xxxxxxxxxx, Xxxxxxxxxxxx 00000
or to such other person or place as shall be designated to First Harrisburg in
writing, and with a copy to:
Xxxxxx' counsel:
Xxxxxxxx Xxxxx, Xx., Esquire
XXXXXXXX XXXXXXXX, P.C.
0000 Xxxxxxx Xxxxx Xxxx
Xxxx Xxxx, Xxxxxxxxxxxx 00000
(b) If to First Harrisburg or First Federal, to:
Xx. Xxxxxxx X. Xxxxx
President
FIRST HARRISBURG BANCOR, INC.
000 X. 0xx Xxxxxx
P. O. Box 1111
Harrisburg, Pennsylvania 17108-1111
or to such other person or place as shall be designated to Xxxxxx in writing,
and with a copy to:
First Harrisburg's counsel
Xxxxxx X. Xxxxxx, Xx., Esquire
ELIAS, MATZ, XXXXXXX & XXXXXXX L.L.P.
000 00xx Xxxxxx, X.X., 00xx Xxxxx
Xxxxxxxxxx, XX 00000
Any such notice or other communication so addressed shall be deemed to have been
received by the addressee (i) if hand-delivered or sent by overnight delivery,
on the next business day following the date so delivered or sent, (ii) if sent
by registered or certified mail, five (5) business days following the date sent,
or (iii) if sent by telecopy, upon verbal telephone confirmation of receipt
thereof by an individual authorized to accept telecopy communications at the
above-specified telecopy number as of the date of such receipt or confirmation.
21. SUCCESSORS AND ASSIGNS. The rights and obligations of the Parties
hereto shall inure to the benefit of and shall be binding upon the successors
and assigns of each of them; 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.
22. HEADINGS, ETC. The headings of the Sections and Subsections of this
Agreement have been inserted for convenience only and shall not be deemed to be
a part of this Agreement.
23. 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 best efforts to substitute a valid, legal and
enforceable provision which, insofar as practicable, implements the purposes and
intents of this Agreement.
24. NO THIRD PARTY BENEFICIARY. Except as expressly provided for
herein, including but not limited to Section 15 hereof, nothing in this
Agreement is intended to confer upon any person who is not a Party hereto any
rights or remedies of any nature whatsoever under or by reason of this
Agreement.
25. COUNTERPARTS. To facilitate execution, this Agreement may be
executed in as many counterparts as may be required; and it shall not be
necessary that the signatures of, or on behalf of, each Party, or that the
signatures of all persons required to bind any Party, appear on each
counterpart; but it shall be sufficient that the signature of, or on behalf of,
each Party, or that the signatures of the persons required to bind any Party,
appear on one or more of the counterparts. All counterparts shall collectively
constitute a single agreement. It shall not be necessary in making proof of this
Agreement to produce or account for more than a number of counterparts
containing the respective signatures of, or on behalf of, all of the Parties
hereto.
26. FURTHER ASSURANCES. Each Party will execute and deliver such
instruments and take such other actions as the other Party hereto may reasonably
request in order to carry out the intent and purposes of this Agreement.
IN WITNESS WHEREOF, the Parties hereto, intending to be legally bound
hereby, have caused this Agreement to be duly executed, as of the date set forth
above.
ATTEST: XXXXXX SAVINGS BANK
By: ________________________________ By: ___________________________________
(Authorized Officer) (Authorized Officer)
ATTEST: XXXXXX ACQUISITION CORPORATION
By: ________________________________ By: ___________________________________
(Authorized Officer) (Authorized Officer)
ATTEST: FIRST HARRISBURG BANCOR, INC.
By: ________________________________ By: ___________________________________
(Authorized Officer) (Authorized Officer)
ATTEST: FIRST FEDERAL SAVINGS AND LOAN
ASSOCIATION OF HARRISBURG
By: ________________________________ By: ___________________________________
(Authorized Officer) (Authorized Officer)
LIST OF EXHIBITS
EXHIBIT 1 AGREEMENT AND PLAN OF MERGER OF
XXXXXX ACQUISITION CORPORATION WITH AND INTO
FIRST HARRISBURG BANCOR, INC.
EXHIBIT 2 FIRST HARRISBURG BANCOR, INC. PLAN OF LIQUIDATION
AND DISSOLUTION
EXHIBIT 3 AGREEMENT AND PLAN OF MERGER OF FIRST FEDERAL SAVINGS
AND LOAN ASSOCIATION OF HARRISBURG WITH AND INTO
XXXXXX SAVINGS BANK
EXHIBIT 4 INVESTMENT AGREEMENT
EXHIBIT 1
AGREEMENT AND PLAN OF MERGER
of
XXXXXX ACQUISITION CORPORATION
with and into
FIRST HARRISBURG BANCOR, INC.
THIS AGREEMENT AND PLAN OF MERGER is dated as of November 12, 1995,
between XXXXXX ACQUISITION CORPORATION ("Xxxxxx Acquisition"), a Pennsylvania
corporation recently formed pursuant to the Pennsylvania Business Corporation
Law of 1988, as amended (the "BCL") and the authority granted under the
Pennsylvania Banking Code of 1965, as amended, for the sole purpose of effecting
the Merger, as defined below, and FIRST HARRISBURG BANCOR, INC., a Pennsylvania
corporation ("First Harrisburg").
WITNESSETH:
WHEREAS, Xxxxxx Acquisition and First Harrisburg are parties to an
Agreement and Plan of Reorganization of even date herewith (the "Reorganization
Agreement") which provides, among other things, for the merger of Xxxxxx
Acquisition and First Harrisburg (the "Merger");
NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein and in the Reorganization Agreement, and for the purpose of
stating the method, terms and conditions of the Merger, including the rights of
the shareholders of First Harrisburg, and such other details and provisions as
are deemed desirable, the parties hereto, intending to be legally bound hereby,
agree as follows:
1. The Merger. Subject to the terms and conditions of this Agreement
and the Reorganization Agreement, on the Effective Date (which term, as used
herein, is defined in Section 1(b) of the Reorganization Agreement), Xxxxxx
Acquisition shall be merged with and into First Harrisburg, which shall survive
the Merger (the "Surviving Corporation").
2. Articles of Incorporation. The Articles of Incorporation of First
Harrisburg as in effect immediately prior to the Effective Date shall be the
Articles of Incorporation of the Surviving Corporation.
3. Bylaws. The Bylaws of First Harrisburg as in effect immediately
prior to the Effective Date shall be the Bylaws of the Surviving Corporation.
4. Conversion of Shares. The shares of First Harrisburg common stock,
$.01 par value per share (collectively the "Shares"), shall be converted in
accordance with the terms set forth in Section 1(c) of the Reorganization
Agreement.
5. Surrender and Exchange of First Harrisburg Certificates. The
certificates underlying the Shares shall be surrendered and exchanged for
consideration in the manner set forth in Section 1(f) of the Reorganization
Agreement.
6. Board of Directors and Officers. The Directors and Officers of
Xxxxxx Acquisition as in effect immediately prior to the Effective Date shall
constitute the Directors and Officers of the Surviving Corporation on and
immediately after the Effective Date.
7. Dissenters' Rights of First Harrisburg Shareholders. The rights and
remedies of a dissenting shareholder as set forth in Subchapter D of Chapter 15
of the BCL shall be afforded to any holder of First Harrisburg Common Stock who
objects to the Merger and who takes the necessary steps to perfect the rights of
a dissenting shareholder.
8. Termination and Amendment. Notwithstanding prior approval by the
shareholders of First Harrisburg, this Agreement may be modified or terminated
including for the reason that the Reorganization Agreement is modified or
terminated as provided for therein. In the event there is a termination after
the delivery of Articles of Merger to the Pennsylvania Department of State, the
parties shall execute and file with the Pennsylvania Department of State, prior
to the Effective Date, a statement of termination pursuant to Section 1902 of
the BCL.
9. Agreement Conditional Upon Consummation of Reorganization Agreement.
This Agreement and the transactions contemplated hereunder are conditioned upon
the consummation of the Reorganization Agreement.
10. Counterparts; Headings. This Agreement may be executed in several
counterparts, and by the parties hereto on separate counterparts, each of which
will constitute an original. The headings and captions contained herein are for
reference purposes only and do not constitute a part hereof.
11. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the Commonwealth of Pennsylvania.
IN WITNESS WHEREOF, the parties hereto, intending to be legally bound
hereby, by their officers thereunto duly authorized, have executed this
Agreement as of the day and year first above written.
[CORPORATE SEAL]
ATTEST: FIRST HARRISBURG BANCOR, INC.
By: ------------------------- By: -------------------------
(Authorized Officer) (Authorized Officer)
[CORPORATE SEAL]
ATTEST: XXXXXX ACQUISITION CORPORATION
By: ------------------------- By: -------------------------
(Authorized Officer) (Authorized Officer)
EXHIBIT 2
(Form of)
FIRST HARRISBURG BANCOR, INC.
PLAN OF LIQUIDATION AND DISSOLUTION
THIS PLAN OF LIQUIDATION AND DISSOLUTION is made as of this 12th day of
November, 1995, by and between FIRST HARRISBURG BANCOR, INC., a Pennsylvania
corporation ("First Harrisburg"), and its parent and sole shareholder, XXXXXX
SAVINGS BANK, a Pennsylvania stock savings bank ("Xxxxxx").
WHEREAS, First Harrisburg and Xxxxxx desire and intend to voluntarily
effectuate the complete liquidation and dissolution (including making adequate
provisions for the liabilities of First Harrisburg) of First Harrisburg pursuant
to Chapter 19, Subchapter F of the Pennsylvania Business Corporation Law of
1988, as amended (the "BCL") and Section 332 of the Internal Revenue Code, as
amended (the "Code"), on the terms and conditions set forth herein;
WHEREAS, Xxxxxx is the sole shareholder of First Harrisburg; and
WHEREAS, as the sole shareholder of First Harrisburg, Xxxxxx wishes to
approve, authorize and consent to the voluntary dissolution of First Harrisburg
in accordance with the requirements set forth in the BCL and the provisions
hereof.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein, and intending to be legally bound hereby, the parties agree as
follows:
1. Xxxxxx hereby:
(a) approves, authorizes and consents to the voluntary
dissolution of First Harrisburg, such dissolution to be effected in
accordance with the terms and conditions of this Plan and as promptly
as possible after, but conditioned upon effectiveness of, the merger
(the "Merger") of Xxxxxx Acquisition Corporation, a former Pennsylvania
corporation and former wholly owned subsidiary of Xxxxxx, with and into
First Harrisburg;
(b) authorizes the officers of First Harrisburg to file on
behalf of First Harrisburg and its sole shareholder a Consent of
Shareholder to Dissolution, with the Commonwealth of Pennsylvania,
Department of State; and
(c) resolves that after the payment of or other provision for
the debts and other obligations of First Harrisburg, the officers of
First Harrisburg shall distribute all of the remaining assets of First
Harrisburg to Xxxxxx, or as otherwise directed by Xxxxxx, in complete
cancellation or redemption of all of the First Harrisburg capital stock
issued and outstanding, such distribution to be made as promptly as
practicable after the Merger.
2. As soon as practicable after the Merger but in no event later than
thirty (30) days following the Merger, the officers and directors of First
Harrisburg shall ensure that First Harrisburg:
(a) ceases doing business as a going concern;
(b) proceeds to collect its assets and conveys and disposes of
such of its remaining assets not otherwise distributed in kind to
Xxxxxx as the sole shareholder of First Harrisburg;
(c) proceeds to pay, satisfy or discharge First Harrisburg's
liabilities and obligations or makes and does all other acts required
to wind up the business affairs of First Harrisburg pursuant to Chapter
19 of the BCL and all other applicable law; and
(d) distributes to Xxxxxx, or as otherwise directed by Xxxxxx
as the sole shareholder of First Harrisburg, after the satisfaction of
its debts and other obligations, all of the remaining assets, surplus
and properties of First Harrisburg, if any, in complete liquidation of
First Harrisburg pursuant to Chapter 19 of the BCL, and all other
applicable laws, within the time period specified herein and in
accordance with the terms and conditions set forth herein.
3. All appropriate, necessary and proper officers of First Harrisburg
are authorized, empowered and directed to draft, execute and file all documents,
forms, papers, notifications, and applications which are necessary, proper and
otherwise required by law to effectuate the complete liquidation and dissolution
of First Harrisburg, including but not limited to Articles of Dissolution,
informational returns on U.S. Treasury Department Forms 966, 1096 and 1099L, and
any final federal, state and local income tax returns for First Harrisburg as
may be required and to conform with the provisions of the BCL and the Code.
4. All appropriate, necessary and proper officers of First Harrisburg
are authorized, empowered and directed to approve and adopt all resolutions, and
to undertake all necessary, desirable, and proper actions for the purposes of
carrying out the intent of this Plan and effectuating the complete liquidation
and dissolution of the assets, and winding up of the business and affairs of
First Harrisburg, including such acts as, in the opinion of counsel for Xxxxxx,
may be necessary and proper to conform with the provisions of Chapter 19 of the
BCL and Section 332 of the Code.
5. This Plan contains the entire agreement between the parties with
respect to the subject matter hereof and supersedes all prior agreements,
written or oral, with respect hereto.
6. This Plan shall be governed by the laws of the Commonwealth of
Pennsylvania.
7. This Plan may be executed in any number of counterparts, and each
such counterpart shall be deemed to be an original instrument, but all such
counterparts together shall constitute but one agreement.
IN WITNESS WHEREOF, this Plan has been executed by the duly authorized
officers as of the day and year first above written.
[SEAL]
ATTEST: FIRST HARRISBURG BANCOR, INC.
By: ------------------------- By: -------------------------
[SEAL]
ATTEST: XXXXXX SAVINGS BANK
By: ------------------------- By: -------------------------
EXHIBIT 3
AGREEMENT AND PLAN OF MERGER
of
FIRST FEDERAL SAVINGS AND LOAN ASSOCIATION OF HARRISBURG
with and into
XXXXXX SAVINGS BANK
THIS AGREEMENT AND PLAN OF MERGER is dated as of November 12, 1995,
between FIRST FEDERAL SAVINGS AND LOAN ASSOCIATION OF HARRISBURG, a federal
savings and loan association ("First Federal") and XXXXXX SAVINGS BANK, a
Pennsylvania state-chartered stock savings bank ("Xxxxxx") (the "Agreement").
W I T N E S S E T H:
WHEREAS, First Federal and Xxxxxx are parties to an Agreement and Plan
of Reorganization dated November 12, 1995 (the "Reorganization Agreement"),
which contemplates, among other things, the merger of First Federal with and
into Xxxxxx;
WHEREAS, First Harrisburg Bancor, Inc., a former Pennsylvania
corporation and the former parent holding company of First Federal ("First
Harrisburg") has, pursuant to the Reorganization Agreement, entered into an
Agreement and Plan of Merger of Xxxxxx Acquisition Corporation with and into
First Harrisburg in which Xxxxxx Acquisition Corporation, a Pennsylvania
corporation and wholly owned subsidiary of Xxxxxx ("Xxxxxx Acquisition"), was
merged with and into First Harrisburg (the "Merger");
WHEREAS, First Harrisburg has, pursuant to the Reorganization
Agreement, entered into the First Harrisburg Bancor, Inc. Plan of Liquidation
and Dissolution pursuant to which, immediately following the Merger, First
Harrisburg will be liquidated and dissolved (the "First Harrisburg Plan of
Liquidation").
NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein and in the Reorganization Agreement and for the purpose of
stating the method, terms and conditions of the merger of First Federal with and
into Xxxxxx, the parties hereto, intending to be legally bound hereby, agree as
follows:
1. The First Federal Merger. Subject to the terms and conditions of
this Agreement, the Reorganization Agreement, the provisions of the Pennsylvania
Business Corporation Law of 1988, as amended and the Pennsylvania Banking Code
of 1965, as amended and as soon as practicable after effectiveness of the Merger
and the First Harrisburg Plan of Liquidation, First Federal shall be merged with
and into Xxxxxx with Xxxxxx surviving such merger (the "First Federal Merger").
2. Articles of Incorporation. The Articles of Incorporation of Xxxxxx
as in effect immediately prior to the First Federal Merger shall be the Articles
of Incorporation of Xxxxxx following the First Federal Merger.
3. Bylaws. The Bylaws of Xxxxxx as in effect immediately prior to the
First Federal Merger shall be the Bylaws of Xxxxxx following the First Federal
Merger.
4. Conversion of Shares. Upon effectiveness of the First Federal
Merger, all of the shares of First Federal common stock outstanding shall be
immediately thereafter cancelled.
5. Effect of First Federal Merger. Upon effectiveness of the First
Federal Merger, Xxxxxx shall succeed without further act or deed, to all of the
remaining property, rights, powers, duties and obligations of First Federal then
remaining.
6. Board of Directors and Officers. The directors and officers of
Xxxxxx as in office immediately prior to effectiveness of the First Federal
Merger shall be the directors and officers of Xxxxxx immediately after
effectiveness of the First Federal Merger.
7. Agreement Conditional Upon Consummation of Reorganization Agreement.
This Agreement and the transactions contemplated hereunder are conditioned upon
the consummation of the Reorganization Agreement.
8. Further Assurances. If at any time Xxxxxx shall consider or be
advised that any further assignment, conveyance or assurance is necessary or
desirable to vest, perfect or confirm in Xxxxxx following effectiveness of the
First Federal Merger title to any property or rights of First Federal, the
proper officers and directors of First Federal immediately prior to
effectiveness of the First Federal Merger shall execute and deliver on behalf of
Xxxxxx any and all proper assignment, conveyance or assurance and do all things
necessary or desirable to vest, perfect or confirm title to such property or
rights in Xxxxxx upon effectiveness of the First Federal Merger.
9. Shareholder Approval. This Agreement shall be approved and adopted
by Xxxxxx as the sole shareholder of First Federal and by the shareholders of
Xxxxxx which latter approval shall be an integral part of the approval of the
Merger by the shareholders of Xxxxxx.
10. Termination and Amendment. Notwithstanding prior approval by the
shareholders of First Federal and Xxxxxx, this Agreement may be modified or
terminated, including for the reason that the Reorganization Agreement is
modified or terminated as provided for therein. In the event there is a
termination after the delivery of Articles of Merger to the Pennsylvania
Department of State, the parties shall execute and file with the Pennsylvania
Department of State prior to effectiveness of the First Federal Merger, a
statement of termination pursuant to the provisions of the Pennsylvania Business
Corporation Law of 1988, as amended.
11. Counterparts; Headings. This Agreement may be executed in several
counterparts, and by the parties hereto on separate counterparts, each of which
shall constitute an original. The headings and captions contained herein are for
reference purposes only and do not constitute a part hereof.
12. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the Commonwealth of Pennsylvania.
IN WITNESS WHEREOF, the parties hereto, intending to be legally bound
hereby by their officers thereunto duly authorized, have executed this Agreement
as of the day and year first above written.
[SEAL]
ATTEST: FIRST FEDERAL SAVINGS AND LOAN
ASSOCIATION OF HARRISBURG
By: ------------------------- By: -------------------------
[SEAL]
ATTEST: XXXXXX SAVINGS BANK
By: ------------------------- By: -------------------------
EXHIBIT 4
INVESTMENT AGREEMENT
THIS AGREEMENT is dated as of November 12, 1995 (the "Agreement")
between XXXXXX SAVINGS BANK ("Xxxxxx") and FIRST HARRISBURG BANCOR, INC. (the
"Corporation"),
WITNESSETH:
WHEREAS, Xxxxxx and the Corporation have, simultaneously with executing
this Agreement, entered into an Agreement and Plan of Reorganization dated as of
the date hereof (the "Plan"); and
WHEREAS, as a condition to Xxxxxx' entry into the Plan and in
consideration of such entry, the Corporation has agreed to issue to Xxxxxx, on
the terms and conditions set forth herein, warrants entitling Xxxxxx to purchase
up to an aggregate of 580,674 shares (the "Shares") of the Corporation's common
stock, par value $.01 per share (the "Common Stock");
NOW, THEREFORE, in consideration of the execution of the Plan and the
agreements herein contained, Xxxxxx and the Corporation agree as follows:
1. Concurrently with the execution of the Plan and this Agreement, the
Corporation shall issue to Xxxxxx a warrant or warrants in the form of
Attachment A hereto (the "Warrant", which term as used herein shall include any
warrants issued upon transfer or exchange of the original Warrant or pursuant to
Section 7 of this Agreement) to purchase up to 580,674 shares of Common Stock.
Each Warrant shall be exercisable at a price per Share of $11.875, subject to
adjustment as therein provided (the "Exercise Price"). So long as the Warrant is
outstanding and unexercised, the Corporation shall at all times maintain and
reserve, free from preemptive rights, such number of authorized but unissued or
treasury shares of Common Stock as may be necessary so that the Warrant may be
exercised without additional authorization of Common Stock after giving effect
to all other options, warrants, convertible securities and other rights to
acquire shares of Common Stock at the time outstanding. The Corporation
represents and warrants that it has duly authorized the issuance of the Shares
upon exercise of the Warrant and covenants that the Shares issued upon exercise
of the Warrant shall be duly authorized, validly issued, and upon payment of the
Exercise Price, fully paid and nonassessable and subject to no preemptive
rights. The Warrant and the Shares are hereinafter collectively referred to,
from time to time, as the "Securities".
So long as the Warrant is owned by Xxxxxx, in no event shall Xxxxxx
exercise the Warrant for a number of shares of Common Stock which, when added to
the number of shares of Common Stock owned or controlled by Xxxxxx (otherwise
than in a fiduciary capacity), would result in Xxxxxx owning or controlling
(otherwise than in a fiduciary capacity) more than 19.9 percent of the shares of
Common Stock issued and outstanding immediately after giving effect to such
exercise.
2. Subject to the terms and conditions hereof, Xxxxxx may exercise the
Warrant, in whole or in part, upon: (i) a willful breach of the Plan by the
Corporation which would permit termination of the Plan by Xxxxxx, provided that
such breach shall not have been cured prior to an exercise of the Warrant; (ii)
the failure of the Corporation's shareholders to approve the Plan at a meeting
called for such purpose after the announcement by any person (other than Xxxxxx
or any of its subsidiaries or affiliates) of an offer or proposal to acquire 15
percent or more of the Common Stock, or to acquire, merge or consolidate with
the Corporation or First Federal Savings and Loan Association of Harrisburg (the
"Association") or to purchase or acquire all or substantially all of the
Corporation's assets, or all or substantially all of the Association's assets;
(iii) the acquisition by any person (other than Xxxxxx or any of its
subsidiaries or affiliates) of beneficial ownership of 15 percent or more of the
Common Stock, exclusive of shares of Common Stock sold directly or indirectly to
such person by Xxxxxx; (iv) any person (other than Xxxxxx or any of its
subsidiaries or affiliates) shall have commenced a tender or exchange offer, or
shall have filed an application with an appropriate bank regulatory authority
with respect to a publicly announced offer, to purchase or acquire securities of
the Corporation such that, upon consummation of such offer, such person would
own, control or have the right to acquire 15 percent or more of the Common Stock
(before giving effect to any exercise of the Warrant); or (v) the Corporation
shall have entered into an agreement or other understanding with a person (other
than Xxxxxx or any of its subsidiaries or affiliates) for such person to
acquire, merge or consolidate with the Corporation or to purchase or acquire all
or substantially all of the Association's assets. This Agreement and Xxxxxx'
right to exercise the Warrant shall terminate and be of no further effect,
except as to notices of exercise given prior thereto, upon termination of the
Warrant as provided in Section 7 thereof. As used in this Section 2, "person"
and "beneficial ownership" shall have the same meanings conferred thereon by
Section 13(d) of the Securities Exchange Act of 1934, as amended, and the
regulations promulgated thereunder. Notwithstanding the foregoing, the
Corporation shall not be obligated to issue shares upon exercise of the Warrant
(i) in the absence of any required governmental, regulatory or stockholder
approval or consent necessary for the Corporation to issue the Shares or for
Xxxxxx to exercise the Warrant or prior to the expiration or termination of any
waiting period required by law or (ii) so long as any injunction or other order,
decree or ruling issued by any federal or state court of competent jurisdiction
is in effect which prohibits the sale or delivery of the Shares. Any sale of any
of the Shares by Xxxxxx, other than a registered public offering pursuant to
Section 3 hereof or a sale to a majority-owned subsidiary of Xxxxxx, shall be
subject to the right of first refusal of the Corporation (or any assignee or
assignees of the Corporation the identity of whom or which prior to the date
thereof has been given to Xxxxxx) at a price equal to the written offer price
which Xxxxxx receives from a third party (other than a majority-owned subsidiary
of Xxxxxx) and intends to accept. The right of first refusal shall terminate 15
days after notice of Xxxxxx' intention to sell has been delivered to the
Corporation. If an offer is made for consideration which in whole or in part
consists of other than cash, the value of the non-cash portion of the
consideration shall be determined by a recognized investment banking firm
selected jointly by Xxxxxx and the Corporation, and such determination shall in
no event be made later than the fifth day after notice of Xxxxxx' intention to
sell has been delivered to the Corporation. In the event of the failure or
refusal of the Corporation to purchase the Shares covered by Xxxxxx' notice to
sell, Xxxxxx may, within 30 days from the date of such notice, unless additional
time is needed to give notification to or to obtain approval from any
governmental or regulatory authority and, if so required, within five days after
the date on which the required notification period has expired or been
terminated or such approval has been obtained and any requisite waiting period
with respect thereto has passed, sell all, but not less than all, of such Shares
covered by such notice to such proposed transferee at no less than the price
specified and on terms no more favorable to the buyer than those set forth in
the notice.
3. If, at any time after the Warrant has been exercised and on or
before the Termination Date (as defined in Section 7 of the Warrant), the
Corporation shall receive a written request therefor from Xxxxxx, the
Corporation shall prepare, file and keep current a shelf registration statement
under the Securities Act of 1933, as amended (the "Securities Act"), covering
the Shares, and shall use its best efforts to cause such registration statement
to become effective and remain current for a period of not more than 180 days.
Without the written consent of Xxxxxx, neither the Corporation nor any other
holder of securities of the Corporation (other than any other holder who as of
the date hereof has contractual right to do so) may include securities in such
registration statement. The Corporation shall in no way be restricted from
registering and selling other equity or debt securities, nor shall the
Corporation be obligated to make effective more than one registration statement
pursuant to this Section 3. Additionally, the Corporation shall be required to
provide notice to Xxxxxx prior to filing any registration statement under the
Securities Act concerning any securities of the Corporation, for its own account
or for the account of others, so that Xxxxxx can elect to include information in
such registration statement to permit Xxxxxx to offer the Shares for sale.
4. If and whenever the Corporation is required by the provisions of
Section 3 hereof to effect the registration of any of the Shares under the
Securities Act, the Corporation will:
(a) prepare and file with the Securities and Exchange
Commission (the "SEC") such amendments to such registration statement
and supplements to the prospectus contained therein as may be necessary
to keep such registration statement current for a period of not more
than 180 days;
(b) furnish to Xxxxxx and to Xxxxxx' underwriters of the
Shares being registered such reasonable number of copies of the
registration statement, preliminary prospectus, final prospectus and
such other documents as Xxxxxx or such underwriters may reasonably
request in order to facilitate the public offering of the Shares;
(c) use its best efforts to register or qualify the Shares
covered by such registration statement under such state securities or
blue sky laws of such jurisdictions as Xxxxxx or such underwriters may
reasonably request; provided that the Corporation shall not be required
by virtue hereof to submit to jurisdiction or to furnish a general
consent to service of process in any state;
(d) notify Xxxxxx, promptly after the Corporation shall
receive notice thereof, of the time when such registration statement
has become effective or any supplemental amendment to any prospectus
forming a part of such registration statement has been filed;
(e) notify Xxxxxx promptly of any request by the SEC for the
amending or supplementing of such registration statement or prospectus
or for additional information;
(f) prepare and file with the SEC, promptly upon the request
of Xxxxxx, any amendments or supplements to such registration statement
or prospectus which, in the opinion of counsel for Xxxxxx and the
Corporation, are required under the Securities Act or the rules and
regulations promulgated thereunder in connection with the distribution
of the Shares by Xxxxxx;
(g) prepare and promptly file with the SEC such amendment or
supplement to such registration statement or prospectus as may be
necessary to correct any statements or omission if, at the time when a
prospectus relating to such Shares is required to be delivered under
the Securities Act, any event shall have occurred as a result of which
such prospectus as then in effect would include an untrue statement of
a material fact or omit to state any material fact necessary to make
the statements therein, in the light of the circumstances under which
they were made, not misleading;
(h) advise Xxxxxx, promptly after it shall receive notice or
obtain knowledge, of the issuance of any stop order by the SEC
suspending the effectiveness of such registration statement or the
initiation or threatening of any proceeding for that purpose and
promptly use its best efforts to prevent the issuance of any stop order
or to obtain its withdrawal if such stop order should be issued; and
(i) at the request of Xxxxxx, furnish on the date or dates
provided for in the underwriting agreement: (i) an opinion or opinions
of counsel to the Corporation for the purposes of such registration,
addressed to the underwriters and to Xxxxxx, covering such matters as
such underwriters and Xxxxxx may reasonably request and as are
customarily covered by issuer's counsel at that time; and (ii) a letter
or letters from the independent certified public accountants of the
Corporation, addressed to the underwriters and to Xxxxxx, covering such
matters as such underwriters or Xxxxxx may reasonably request, in which
letters such accountants shall state (without limiting the generality
of the foregoing) that they are independent certified public
accountants within the meaning of the Securities Act and that, in the
opinion of such accountants, the financial statements and other
financial data of the Corporation included in the registration
statement or any amendment or supplement thereto comply in all material
respects with the applicable accounting requirements of the Securities
Act.
5. With respect to the registration requested pursuant to Section 3
hereof, the Corporation shall bear the following fees, costs and expenses: All
registration, filing and NASD fees, printing and engraving expenses, fees and
disbursements of its counsel and accountants and all legal fees and
disbursements and other expenses of the Corporation to comply with state
securities or blue sky laws of any jurisdictions in which the Shares to be
offered are to be registered or qualified. Fees and disbursements of counsel and
accountants for Xxxxxx, underwriting discounts and commissions and transfer
taxes for Xxxxxx and any other expenses incurred by Xxxxxx shall be borne by
Xxxxxx.
6. In connection with any registration statement:
(a) The Corporation will indemnify and hold harmless Xxxxxx,
any underwriter (as defined in the Securities Act) for Xxxxxx, and each
person, if any, who controls Xxxxxx or such underwriter (within the
meaning of the Securities Act) from and against any and all loss,
damage, liability, cost or expense to which Xxxxxx or any such
underwriter or controlling person may become subject under the
Securities Act or otherwise, insofar as such loss, damage, liability,
cost or expense arises out of or is caused by any untrue statement or
alleged untrue statement of any material fact contained in such
registration statement, any prospectus or supplement thereto, or arises
out of or is based upon the omission or alleged omission to state
therein a material fact required to be stated therein or necessary to
make the statements therein, in the light of the circumstances under
which they were made, not misleading; provided, however, that the
Corporation will not be liable in any such case to the extent that any
such loss, damage, liability, cost or expense arises out of or is based
upon an untrue statement or alleged untrue statement or omission or
alleged omission regarding Xxxxxx, any underwriter for Xxxxxx or the
manner of offering the Shares or is made in conformity with information
furnished by Xxxxxx, such underwriter or such controlling person in
writing specifically for use in the preparation of such registration
statement, prospectus or supplement.
(b) Xxxxxx will indemnify and hold harmless the Corporation, any
underwriter (as defined in the Securities Act), each person, if any,
who controls the Corporation or such underwriter (within the meaning of
the Securities Act) and each person who signed the registration
statement from and against any and all loss, damage, liability, cost or
expense to which the Corporation or any such underwriter or controlling
person may become subject under the Securities Act or otherwise,
insofar as such loss, damage, liability, cost or expense arises out of
or is caused by any untrue or alleged untrue statement of any material
fact contained in such registration statement, any prospectus or
preliminary prospectus contained therein or any amendment or supplement
thereto, or arises out of or is based upon the omission or the alleged
omission to state therein a material fact required to be stated therein
or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, in each case
to the extent that such untrue statement or alleged untrue statement or
omission or alleged omission related to Xxxxxx, any underwriter for
Xxxxxx or the manner of offering the Shares or was made in reliance
upon and in conformity with written information furnished by Xxxxxx
specifically for use in the preparation of such registration statement,
prospectus or supplement.
(c) Promptly after receipt by an indemnified party pursuant to
the provisions of subparagraph (a) or (b) of this Section 6 of any
claim in writing or of notice of the commencement of any action
involving the subject matter of the foregoing indemnity provisions,
such indemnified party will, if a claim in respect thereof is to be
made against the indemnifying party pursuant to the provisions of said
subparagraph (a) or (b), promptly notify the indemnifying party of the
receipt of such claim or notice of the commencement of such action, but
the omission to so notify the indemnifying party will not relieve the
indemnifying party from any liability which it may otherwise have to
any indemnified party hereunder. In case such action is brought against
any indemnified party, the indemnifying party shall have the right to
participate in, and, to the extent that it may wish, jointly with any
other indemnifying party similarly notified, to assume the defense
thereof, with counsel satisfactory to such indemnified party; provided,
however, that if the defendants in any action include both the
indemnified party and the indemnifying party and there is a conflict of
interest which would prevent counsel for the indemnifying party from
also representing the indemnified party, the indemnified party or
parties shall have the right to select one separate counsel to
participate in the defense of such indemnified party or parties. After
notice from the indemnifying party to such indemnified party of its
election so to assume the defense thereof, the indemnifying party will
not be liable to such indemnified party pursuant to the provisions of
said subparagraph (a) or (b) for any legal or other expenses
subsequently incurred by such indemnified party other than reasonable
costs of investigation, unless (i) the indemnified party shall have
employed counsel in accordance with the provisions of the preceding
sentence, (ii) the indemnifying party shall not have employed counsel
reasonably satisfactory to the indemnified party to represent the
indemnified party within a reasonable time after the notice of the
commencement of the action, or (iii) the indemnifying party has
authorized the employment of counsel for the indemnified party at the
expense of the indemnifying party.
(d) If recovery is not available under the foregoing indemnification
provisions, for any reason other than as specified therein, the parties
entitled to indemnification by the terms thereof shall be entitled to
contribution for liabilities and expenses, except to the extent that
contribution is not permitted under Section 11(f) of the Securities
Act. In determining the amount of contribution to which the respective
parties are entitled, there shall be considered the parties' relative
knowledge and access to information concerning the matter with respect
to which the claim was asserted, the opportunity to correct and/or
prevent any statement or omission, and any other equitable
considerations appropriate under the circumstances. Xxxxxx and the
Corporation agree that it would not be equitable if the amount of such
contribution were determined by pro rata or per capita allocation even
if the underwriters and Xxxxxx as a group were considered a single
entity for such purpose.
7. In the event that the Corporation issues any additional Shares of
Common Stock after the date of this Agreement pursuant to stock dividends,
splits and other issuances described in Section 5(A) of the Warrant, the
Corporation shall issue additional warrants to Xxxxxx, such that, after such
issuance, the number of Shares of Common Stock subject to all warrants
hereunder, together with any Shares of Common Stock subject to Warrants
previously issued pursuant hereto, equals 19.9 percent of the Shares of Common
Stock issued and outstanding on a pro forma basis after giving effect to the
exercise of the Warrant. Such additional warrants shall be identical to the
Warrant.
8. If Xxxxxx acquires Shares and, during the period ending on the later
of (i) six months after the date of such acquisition or (ii) October 31, 1996,
the merger contemplated by the Plan has not been consummated, then, during the
thirty-day period commencing at the expiration of such period the Corporation
shall have the right to repurchase all (but not less than all) of such Shares of
Common Stock so acquired by Xxxxxx and held by Xxxxxx at the time of such
repurchase at a price equal to the sum of (i) the greater of the current market
price or the Exercise Price paid for such Shares, multiplied by (ii) the number
of such Shares so acquired. For the purposes of this calculation, the "current
market price" shall mean the average of the closing prices for the Common Stock
for the 25 trading days immediately preceding the repurchase, as quoted on the
Nasdaq National Market System.
9. To the extent that Xxxxxx acquires Shares, and until the
Corporation's rights (if any) to redeem such Shares pursuant to Section 8 of
this Agreement have expired, Xxxxxx agrees to vote such Shares in accordance
with the recommendation of the Board of Directors of the Corporation so long as
at least a majority of such Board of Directors is the same as on the date
hereof, except as to voting in connection with mergers, acquisitions,
liquidations or sales or other dispositions of assets involving the Corporation
or the Association, in which instance no such restrictions shall apply,
provided, however, that the covenant contained in this Section 9 shall not apply
to any holder other than Xxxxxx or one of its subsidiaries and affiliates.
10. Without limiting the foregoing or any remedies available to Xxxxxx,
it is specifically acknowledged that Xxxxxx would not have an adequate remedy at
law for any breach of this Agreement and will be entitled to specific
performance of the obligations under, and injunctive relief against actual or
threatened violations of the obligations of any person subject to this
Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to
be executed in counterparts by their duly authorized officers and their
corporate seals to be hereunto affixed, all as of the day and year first above
written.
[CORPORATE SEAL]
ATTEST: FIRST HARRISBURG BANCOR, INC.
By: ------------------------- By: -------------------------
(Authorized Officer) (Authorized Officer)
[CORPORATE SEAL]
ATTEST: XXXXXX SAVINGS BANK
By: ------------------------- By: -------------------------
(Authorized Officer) (Authorized Officer)
EXECUTION COPY
11/12/95
ATTACHMENT A
WARRANT
to Purchase up to 580,674 Shares of
Common Stock
of
First Harrisburg Bancor, Inc.
This is to certify that, for value received, XXXXXX SAVINGS BANK
("Xxxxxx" or the "Holder") is entitled to purchase, subject to the provisions of
this Warrant and of the Agreement (as hereinafter defined), from FIRST
HARRISBURG BANCOR, INC. (the "Corporation"), at any time on or after the date
hereof, an aggregate of up to 580,674 fully paid and nonassessable shares of
common stock, par value $.01 per share (the "Common Stock") of the Corporation
at a price per share equal to $11.875, subject to adjustment as herein provided
(the "Exercise Price").
1. Exercise of Warrant. Subject to the provisions hereof and the
limitations set forth in Section 2 of an Investment Agreement dated as of
November 12, 1995 by and between Xxxxxx and the Corporation (the "Agreement")
executed and delivered in connection with an Agreement and Plan of
Reorganization dated as of November 12, 1995 between Xxxxxx and the Corporation
(the "Plan"), this Warrant may be exercised at such times as set forth in the
Agreement. This Warrant shall be exercised by presentation and surrender hereof
to the Corporation at the principal office of the Corporation, accompanied by
(i) a written notice of exercise, (ii) payment to the Corporation, for the
account of the Corporation, of the Exercise Price for the number of shares of
Common Stock specified in such notice and (iii) a certificate of the Holder
specifying the event or events which have occurred which entitle the Holder to
exercise the Warrant. The Exercise Price for the number of shares of Common
Stock specified in the notice shall be payable in immediately available funds.
This Warrant may not be exercised in part for less than 250,000 shares, except
(i) for an initial exercise resulting in ownership of approximately 5 percent of
the outstanding shares of Common Stock after giving effect to the exercise, (ii)
as limited by applicable law, regulation or regulatory order or (iii) when this
Warrant becomes exercisable for less than 250,000 shares, the remaining shares
for which it is then exercisable.
Upon such presentation and surrender, the Corporation shall issue
promptly (and within no later than five business days if requested by the
Holder) to the Holder or its assignee, transferee or designee the shares of
Common Stock to which the Holder is entitled hereunder.
If this Warrant should be exercised in part only, the Corporation
shall, upon surrender of this Warrant for cancellation, execute and deliver a
new Warrant evidencing the rights of the Holder thereof to purchase the balance
of the shares of Common Stock purchasable hereunder. Upon issuance of Common
Stock by the Corporation, the Holder shall be deemed to be the holder of record
of the shares of Common Stock so issued. The Corporation shall pay all expenses,
and any and all United States federal, state and local taxes and other charges,
that may be payable in connection with the preparation, issue and delivery of
stock certificates pursuant to this Section 1 in the name of the Holder.
2. Preservation of Rights of Holder. The Corporation agrees (i) that it
will not, by charter amendment or through reorganization, consolidation, merger,
dissolution or sale of assets, or by any other voluntary act, avoid or seek to
avoid the observance or performance of any of the covenants, stipulations or
conditions to be observed or performed hereunder or under the Agreement by the
Corporation, (ii) that it will use its best efforts to take all action
(including (A) complying with all premerger notification, reporting and waiting
period requirements specified in 15 U.S.C. ss.18a and the regulations
promulgated thereunder and applicable to the Corporation, and (B) in the event
that under the Bank Holding Company Act of 1956, the Savings and Loan Holding
Company Act or the Change in Bank Control Act, prior approval of the Board of
Governors of the Federal Reserve System (the "Board") and/or the Office of
Thrift Supervision ("OTS") is necessary before this Warrant may be exercised,
cooperating fully with the Holder in preparing any and all such applications and
providing such information to the Board and/or the OTS as such agencies may
require at the Holder's expense) in order to permit the Holder to exercise this
Warrant and the Corporation duly and effectively to issue shares of its Common
Stock hereunder, and (iii) that it will promptly take all action necessary to
protect the rights of the Holder against dilution as provided herein.
3. Fractional Shares. The Corporation shall not be required to issue
fractional shares of Common Stock upon exercise of this Warrant but shall pay
for such fraction of a share in cash or by certified or official bank check at
the Exercise Price.
4. Exchange, Transfer or Loss of Warrant. This Warrant is exchangeable
without expense, at the option of the Holder, upon presentation and surrender
hereof at the principal office of the Corporation for other Warrants of
different denominations entitling the Holder to purchase in the aggregate the
same number of shares of Common Stock purchasable hereunder. The term "Warrant"
as used herein includes any Warrants for which this Warrant may be exchanged.
Upon receipt by the Corporation of evidence reasonably satisfactory to it of the
loss, theft, destruction or mutilation of this Warrant, and (in the case of
loss, theft or destruction) of reasonably satisfactory indemnification, and upon
surrender and cancellation of this Warrant, if mutilated, the Corporation will
execute and deliver a new Warrant of like tenor and date.
This Warrant may not be exercised except in accordance with the terms
of the Agreement.
5. Adjustment. The number of shares of Common Stock purchasable upon
the exercise of this Warrant and the Exercise Price shall be subject to
adjustment from time to time as provided in this Section 5:
(A)(1) In case the Corporation shall pay or make a
dividend or other distribution on any class of capital stock
of the Corporation in Common Stock (including the ten percent
(10%) dividend payable in Common Stock on November 15, 1995)
or shall issue shares of Common Stock pursuant to exercises of
outstanding stock options, the number of shares of Common
Stock purchasable upon exercise of this Warrant shall be
increased by multiplying such number of shares by a fraction
of which the denominator shall be the number of shares of
Common Stock outstanding at the close of business on the day
immediately preceding the date of such distribution and the
numerator shall be the sum of such number of shares and the
total number of shares constituting such dividend, issuance or
other distribution, such increase to become effective
immediately after the opening of business on the day following
such distribution, provided, however, that in no event shall
the Warrant be exercised for more than 19.9 percent of the
shares of Common Stock issued and outstanding after exercise
of the Warrant.
(2) In case outstanding shares of Common Stock shall
be subdivided into a greater number of shares of Common Stock,
the number of shares of Common Stock purchasable upon exercise
of this Warrant at the opening of business on the day
following the day upon which such subdivision becomes
effective shall be proportionately increased, and, conversely,
in case outstanding shares of Common Stock shall each be
combined into a smaller number of shares of Common Stock, the
number of shares of Common Stock purchasable upon exercise of
this Warrant at the opening of business on the day following
the day upon which such combination becomes effective shall be
proportionately decreased, such increase or decrease, as the
case may be, to become effective immediately after the opening
of business on the day following the day upon which such
subdivision or combination becomes effective, provided,
however, that in no event shall the Warrant be exercised for
more than 19.9 percent of the shares of Common Stock issued
and outstanding after exercise of the Warrant.
(3) The reclassification of Common Stock into
securities (other than Common Stock) and/or cash and/or other
consideration shall be deemed to involve a subdivision or
combination, as the case may be, of the number of shares of
Common Stock outstanding immediately prior to such
reclassification into the number or amount of securities
and/or cash and/or other consideration outstanding immediately
thereafter and the effective date of such reclassification
shall be deemed to be "the day upon which such subdivision
becomes effective," or "the day upon which such combination
becomes effective," as the case may be, within the meaning of
clause (2) above.
(4) The Corporation may make such increases in the
number of shares of Common Stock purchasable upon exercise of
this Warrant, in addition to those required by this
subparagraph (A), as shall be determined by its Board of
Directors to be advisable in order to avoid taxation so far as
practicable of any dividend of stock or stock rights or any
event treated as such for federal income tax purposes to the
recipients.
(B) Whenever the number of shares of Common Stock purchasable
upon exercise of this Warrant is adjusted as herein provided, the
Exercise Price shall be adjusted by a fraction in which the numerator
is equal to the number of shares of Common Stock purchaseable prior to
the adjustment and the denominator is equal to the number of shares of
Common Stock purchaseable after the adjustment; provided, however, that
no adjustment shall be made to the Exercise Price in connection with or
as a result of the ten percent (10%) stock dividend payable on November
15, 1995.
(C) For the purpose of this Section 5, the term "Common Stock"
shall include any shares of the Corporation of any class or series
which has no preference or priority in the payment of dividends or in
the distribution of assets upon any voluntary or involuntary
liquidation, dissolution or winding up of the Corporation and which is
not subject to redemption by the Corporation.
(D) Whenever the number of shares for which this Warrant is
exercisable is adjusted as provided in this Section 5, the Corporation
shall promptly compute such adjustment and mail to the Holder a
certificate, signed by a principal financial officer of the
Corporation, setting forth the number of shares of Common Stock for
which this Warrant is exercisable as a result of such adjustment, a
brief statement of the facts requiring such adjustment and the
computation thereof and when such adjustment will become effective;
provided, however, that no such notice shall be required in connection
with the ten percent (10%) stock dividend payable on November 15, 1995
upon payment of which the number of shares of Common Stock purchasable
upon the exercise of the Warrant shall automatically, without any
further action of the Holder or the Corporation, be adjusted in
accordance with the provisions of Section 5(A)(1) hereof.
6. Rights of Holder.
(A) Without limiting the foregoing or any remedies available
to the Holder, it is specifically acknowledged that the Holder would
not have an adequate remedy at law for any breach of the provision of
this Warrant and will be entitled to specific performance of the
obligations under, and injunctive relief against actual or threatened
violations of the obligations of any Person subject to, this Warrant.
(B) Except as provided in the third paragraph of Section I
hereof, the Holder shall not, by virtue hereof, be entitled to any
rights of a shareholder in the Corporation.
7. Termination. This Warrant and the rights conferred hereby shall
terminate on the Termination Date, which shall be the date on which occurs the
earliest of (i) a willful breach of the Plan by Xxxxxx, (ii) the Effective Time
of the Merger pursuant to the Plan, (iii) a valid termination of the Plan prior
to the occurrence of an event described in Section 2 of the Agreement, (iv) the
failure of the shareholders of the Corporation to approve the Merger by the
required vote at a meeting duly called and held in accordance with the
requirements of Section 1(h) of the Plan prior to the occurrence of an event
described in Section 2 of the Agreement and (v) to the extent this Warrant has
not previously been exercised, 12 months after the occurrence of an event
described in Section 2 of the Agreement.
8. Securities Act Representation. The Holder, by acceptance hereof,
agrees that, unless the shares of Common Stock issuable upon exercise hereof
have been registered under the Securities Act of 1933, as amended (the
"Securities Act"), and any other applicable securities laws for sale or other
disposition by the Holder, it will deliver to the Corporation upon the exercise
hereof a written representation that it is acquiring the shares of Common Stock
issuable upon the exercise hereof solely for its own account and not with a view
to the distribution thereof within the meaning of the Securities Act and that
any certificate or certificates representing such shares may bear a legend to
the effect that such shares may not be sold except pursuant to an effective
registration thereunder and registration or qualification under any other
applicable securities laws or exemptions therefrom. Xxxxxx hereby represents
that it is acquiring the Warrant solely for its own account in order to increase
the likelihood that the transactions contemplated by the Plan will be
consummated and not with a view to the distribution of the Warrant within the
meaning of the Securities Act. In addition, Xxxxxx acknowledges that the Warrant
has not been registered under the Securities Act or any other applicable
securities registration requirements.
9. Assignment; Sale. Xxxxxx may assign this Warrant to any wholly-owned
subsidiary of Xxxxxx. Xxxxxx may not, without the prior written consent of the
Corporation, assign, transfer or sell this Warrant to any other person in whole
or in part. In the case of any permitted sale, transfer, assignment or
disposition in whole or in part of this Warrant, the Corporation shall do all
things necessary to facilitate the same and the person to whom this Warrant is
sold, transferred, assigned or disposed of shall agree in writing to the terms
and conditions hereof. Subject to the foregoing, this Warrant shall be binding
upon, inure to the benefit of and be enforceable by the parties and their
respective successors and assigns.
10. Governing Law. This Warrant shall be governed by, and interpreted
in accordance with, the substantive laws of the Commonwealth of Pennsylvania.
Dated: November 12, 1995
[CORPORATE SEAL]
ATTEST: FIRST HARRISBURG BANCOR, INC.
By: ------------------------- By: -------------------------
(Authorized Officer) (Authorized Officer)
