[FORM OF AFFILIATE LETTER]
EXHIBIT 1
December 18, 1997
Sovereign Bancorp, Inc.
0000 Xxxxxxxxx Xxxxxxxxx
Xxxxxxxxxx, Xxxxxxxxxxxx 19610
Ladies and Gentlemen:
Sovereign Bancorp, Inc. ("Sovereign") and First Home Bancorp Inc.
("First Home") desire to enter into an agreement dated December 18, 1997
("Agreement"), pursuant to which, subject to the terms and conditions set
forth therein, (a) First Home will merge with and into Sovereign with
Sovereign surviving the merger, and (b) shareholders of First Home will
receive common stock of Sovereign in exchange for common stock of First Home
outstanding on the closing date (the foregoing, collectively, referred to
herein as the "Merger").
Sovereign has required, as a condition to its execution and delivery
to First Home of the Agreement, that the undersigned, being directors,
executive officers and major shareholders of First Home, execute and deliver
to Sovereign this Letter Agreement.
Each of the undersigned, in order to induce Sovereign to execute and
deliver to First Home the Agreement, hereby irrevocably:
(a) Agrees to be present (in person or by proxy) at all
meetings of shareholders of First Home called to vote for approval of the
Agreement and the Merger so that all shares of common stock of First Home then
owned by the undersigned will be counted for the purpose of determining the
presence of a quorum at such meetings and to vote or cause to be voted all
such shares in favor of approval and adoption of the Agreement and the
transactions contemplated thereby (including any amendments or modifications
of the terms thereof approved by the Board of Directors of First Home);
(b) Agrees not to vote or execute any written consent to
rescind or amend in any manner any prior vote or written consent, as a
shareholder of First Home, to approve or adopt the Agreement;
(c) Agrees to use reasonable best efforts to cause the
Merger to be consummated; provided, however, that the undersigned shall not be
required to take any actions under this subparagraph in such person's capacity
as a director if the fiduciary duty of such person in such capacity legally
requires otherwise and such person is so advised in a written opinion of
counsel;
(d) Agrees not to offer, sell, transfer or otherwise dispose
of any shares of common stock of Sovereign received in the Merger, except (i)
at such time as a registration statement under the Securities Act of 1933, as
amended ("Securities Act") covering sales of such Sovereign common stock is
effective and a prospectus is made available under the Securities Act, (ii)
within the limits, and in accordance with the applicable provisions of, Rule
145(d) under the Securities Act, or (iii) in a transaction which, in the
opinion of counsel satisfactory to Sovereign or as described in a "no-action"
or interpretive letter from the staff of the Securities and Exchange
Commission ("SEC"), is not required to be registered under the Securities Act;
and acknowledges and agrees that Sovereign is under no obligation to register
the sale, transfer or other disposition of Sovereign common stock by the
undersigned or on behalf of the undersigned, or to take any other action
necessary to make an exemption from registration available;
(e) Notwithstanding the foregoing, agrees not to sell, or in
any other way reduce the risk of the undersigned relative to, any shares of
common stock of First Home or of common stock of Sovereign, during the period
commencing thirty days prior to the effective date of the Merger and ending on
the date on which financial results covering at least thirty days of
post-Merger combined operations of Sovereign and First Home have been
published within the meaning of Section 201.01 of the SEC's Codification of
Financial Reporting Policies provided, however, that excluded from the
foregoing undertaking shall be such sales, pledges, transfers or other
dispositions of shares of First Home Common Stock or shares of Sovereign
Common Stock which, in the reasonable opinion of counsel for Sovereign, are
individually and in the aggregate de minimis within the meaning of Topic 2-E
of the Staff Accounting Bulletin Series of the Securities and Exchange
Commission;
(f) Agrees that neither First Home nor Sovereign shall not
be bound by any attempted sale of any shares of First Home Common Stock or
Sovereign common stock, respectively, and Sovereign's transfer agents shall be
given an appropriate stop transfer order and shall not be required to register
any such attempted sale, unless the sale has been effected in compliance with
the terms of this Letter Agreement; and further agrees that the certificate
representing shares of Sovereign common stock owned by the undersigned may be
endorsed with a restrictive legend consistent with the terms of this Letter
Agreement;
(g) Acknowledges and agrees that the provisions of
subparagraphs (d), (e) and (f) hereof also apply to shares of Sovereign common
stock received in the Merger (or any shares of First Home common stock or of
Sovereign common stock, whether or not received in the Merger, for the period
referred to in subparagraph (e) above) owned by (i) his or her spouse, (ii)
any of his or her relatives or relatives of his or her spouse occupying his or
her home, (iii) any trust or estate in which he or she, his or her spouse, or
any such relative owns at least a 10% beneficial interest or of which any of
them serves as trustee, executor or in any similar capacity, and (iv) any
corporation or other organization in which the undersigned, any affiliate of
the undersigned, his or her spouse, or any such relative owns at least 10% of
any class of equity securities or of the equity interest;
(h) Represents that the undersigned has no plan or intention
to sell, exchange, or otherwise dispose of any shares of common stock of
Sovereign to be received in the Merger prior to expiration of the time period
referred to in subparagraph (e) hereof; and
(i) Represents that the undersigned has the capacity to
enter into this Letter Agreement and that it is a valid and binding obligation
enforceable against the undersigned in accordance with its terms, subject to
bankruptcy, insolvency and other laws affecting creditors' rights and general
equitable principles.
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The obligations set forth herein shall terminate concurrently with
any termination of the Agreement.
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This Letter Agreement may be executed in two or more counterparts,
each of which shall be deemed to constitute an original, but all of which
together shall constitute one and the same Letter Agreement.
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This Letter Agreement shall terminate concurrently with any
termination of the Agreement in accordance with its terms.
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The undersigned intend to be legally bound hereby.
Sincerely,
/s/ Xxxxxx X. XxXxxxxxx
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Xxxxxx X. XxXxxxxxx
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