EXHIBIT 10.1
THE TRANSFER OF THIS AGREEMENT IS
SUBJECT TO CERTAIN PROVISIONS CONTAINED
HEREIN AND TO RESALE RESTRICTIONS UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, AND
APPLICABLE STATE SECURITIES LAWS
STOCK OPTION AGREEMENT
This Stock Option Agreement, dated as of December 14, 1999 (the
"Agreement"), is made by and between Coast Bancorp, a California corporation
("Issuer"), and Greater Bay Bancorp, a California corporation ("Grantee").
WHEREAS, Grantee and Issuer have entered into an Agreement and Plan of
Reorganization dated December 14, 1999 (the "Reorganization Agreement"),
providing for, among other things, the merger of Issuer with and into Grantee
(the "Merger"), with Grantee being the surviving corporation; and
WHEREAS, as a condition and inducement to Grantee's execution of the
Reorganization Agreement, Issuer has agreed to grant to Grantee the Option (as
defined below).
NOW, THEREFORE, in consideration of the foregoing and the respective
representations, warranties, covenants and agreements set forth herein and in
the Reorganization Agreement, and intending to be legally bound hereby, Issuer
and Grantee agree as follows:
1. Defined Terms. Capitalized terms which are used but not defined
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herein shall have the meanings ascribed to such terms in the Reorganization
Agreement. As used in this Agreement, the following terms shall have the
meanings indicated:
(a) "Exchange Act" means the Securities Exchange Act of 1934, as
amended.
(b) "Federal Reserve Board" means the Board of Governors of the
Federal Reserve System.
(c) "Holder" means Grantee and, to the extent Grantee has
assigned its rights and obligations under this Agreement as permitted
herein, any subsidiary or direct or indirect transferee of Grantee.
(d) "Person" shall have the meaning specified in Sections
3(a)(9) and 13(d)(3) of the Exchange Act and the rules and regulations
thereunder.
(e) "Securities Act" means the Securities Act of 1933, as
amended.
2. Grant of Option. Subject to the terms and conditions set forth herein,
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Issuer hereby grants to Grantee an irrevocable option (the "Option") to purchase
up to 958,897 shares (the "Option Shares") of common stock, no par value
("Issuer Common Stock"), of Issuer at a purchase price per Option Share of
$21.25 (the "Purchase Price"), but in no event shall the number of Option Shares
exceed 19.9% of the issued and outstanding shares of Issuer Common Stock. The
Purchase Price and the number of Option Shares that may be received upon the
exercise of the Option are subject to adjustment as set forth below.
3. Exercise of Option.
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(a) The Holder may exercise the Option, in whole or in part, at
any time and from time to time but only following the occurrence of
a Purchase Event (as defined below); provided that the Option shall
terminate and be of no further force and effect upon the earliest to
occur of (such earliest date the "Expiration Date"):
(i) the Effective Time of the Merger; or
(ii) 15 months after the first occurrence of a Purchase
Event; or
(iii) 15 months after the termination of the Reorganization
Agreement on or following (x) the occurrence of a Preliminary
Purchase Event (as defined below) or Purchase Event or (y) a
termination by Grantee pursuant to Section 13.1(d), 13.1(i) or
13.1(j) of the Reorganization Agreement; or
(iv) termination of the Reorganization Agreement in
accordance with the terms thereof prior to the occurrence of a
Purchase Event or a Preliminary Purchase Event other than a
termination by Grantee pursuant to Section 13.1(d), 13.1(i) or
13.1(j) of the Reorganization Agreement.
Notwithstanding anything to the contrary contained herein, any purchase of
shares upon exercise of the Option shall be subject to compliance with
applicable law, including, without limitation, the Bank Holding Company Act of
1956, as amended.
(b) As used herein, a "Purchase Event" means any of the
following events:
(i) The Board of Directors of Issuer shall have approved,
or recommended to the Issuer's shareholders that they approve, a
proposal received by Issuer from a person (other than Grantee or any
subsidiary of Grantee) to effect an Acquisition Transaction (as
defined below), Tender Offer (as defined below) or Exchange Offer
(as defined below); or
(ii) Issuer, without having received Grantee's prior
written consent, shall have entered into an agreement with any
person (other than Grantee or any subsidiary of Grantee) to effect
an Acquisition Transaction; or
(iii) any person (other than Grantee or any subsidiary of
Grantee) shall have acquired beneficial ownership (as such term is
defined in Rule 13d-3 promulgated under the Exchange Act) of or the
right to acquire beneficial ownership of, or any "group" (as such
term is defined under the Exchange Act and the rules and regulations
promulgated thereunder) shall have been formed which beneficially
owns or has the right to acquire beneficial ownership of twenty
percent (20%) or more of the then outstanding shares of Issuer
Common Stock.
As used herein, the term "Acquisition Transaction" shall mean (A) a merger,
consolidation or similar transaction involving Issuer or any of its subsidiaries
(other than internal mergers, reorganizations, consolidations or dissolutions
involving only Issuer and/or existing subsidiaries and other than a merger,
consolidation or similar transaction in which the common shareholders of Issuer
immediately prior thereto in the aggregate own at least seventy-five percent
(75%) of the common stock of the surviving or successor corporation immediately
after the consummation thereof), (B) the disposition, by sale, lease, exchange
or otherwise, of twenty (20%) or more of the consolidated assets or deposit
liabilities of Issuer and its subsidiaries, or (C) a purchase or other
acquisition (including by way of merger, consolidation, share exchange or any
similar transaction), other than by Issuer or its subsidiaries, of securities
representing twenty percent (20%) or more of the voting power of Issuer or any
of its subsidiaries.
(c) As used herein, a "Preliminary Purchase Event" means any of
the following events:
(i) any person (other than Grantee or any subsidiary of
Grantee) shall have acquired beneficial ownership of, or the right
to acquire beneficial ownership of, or any "group" (as defined under
the Exchange Act and the rules and regulations thereunder) shall
have been formed which beneficially owns or has the right to acquire
beneficial ownership of, ten percent (10%) or more of the then
outstanding shares of Issuer Common Stock; or
(ii) any person (other than Grantee or any subsidiary of
Grantee) shall have commenced (as such term is defined in Rule 14d-2
under the Exchange Act), or shall have filed a registration
statement under the Securities Act with respect to, a tender offer
or exchange offer to purchase any shares of Issuer Common Stock such
that, upon consummation of such offer, such person would own or
control ten percent (10%) or more of the then outstanding shares of
Issuer Common Stock (such an offer being
referred to herein as a "Tender Offer" or an "Exchange Offer",
respectively); or
(iii) Issuer, without having received Grantee's prior
written consent, shall have entered into an agreement with any
person (other than Grantee or any subsidiary of Grantee) with
respect to, or the Board of Directors of Issuer shall have
recommended that the shareholders of Issuer approve or accept, a
purchase or other acquisition (including by way of merger,
consolidation, share exchange or any similar transaction), other
than by Issuer or its subsidiaries, representing ten percent (10%)
or more of the voting power of Issuer or any of its subsidiaries; or
(iv) any person (other than Grantee or any subsidiary of
Grantee) shall have filed an application or notice with the Federal
Reserve Board or other federal or state regulatory authority, which
application or notice has been accepted for processing, for approval
to engage in an Acquisition Transaction; or
(v) the holders of Issuer Common Stock shall not have
approved the Reorganization Agreement at the meeting of such
shareholders held for the purpose of voting on the Reorganization
Agreement, such meeting shall not have been held or shall have been
canceled prior to termination of the Reorganization Agreement, or
Issuer's Board of Directors shall have withdrawn or modified in a
manner adverse to Grantee the recommendation of Issuer's Board of
Directors with respect to the Reorganization Agreement, in each case
after it shall have been publicly announced that any person (other
than Grantee or any subsidiary of Grantee) shall have (A) made or
disclosed an intention to make a proposal to engage in an
Acquisition Transaction or (B) commenced a Tender Offer or filed a
registration statement under the Securities Act with respect to an
Exchange Offer.
(d) Issuer shall notify Grantee promptly in writing of the
occurrence of any Purchase Event or Preliminary Purchase Event;
provided, however, such notice shall not be a condition to the right
of the Holder to exercise the Option.
(e) In the event Holder wishes to exercise the Option, it shall
send to Issuer a written notice (dated the date on which it is sent to
Issuer, which date is referred to as the "Notice Date") specifying (i)
the total number of Option Shares it intends to purchase pursuant to
such exercise and (ii) a date not earlier than three (3) business days
nor later than fifteen (15) business
days from the Notice Date for the closing (the "Closing") of such
purchase (the "Closing Date"). The Closing shall be held at the
Issuer's principal office or at such other place as Issuer and Holder
may agree. If prior notification to or approval of the Federal Reserve
Board or any other regulatory authority is required as a condition
precedent to such purchase, then (A) Holder shall promptly file and
process the required notice or application for approval; (B) Issuer
shall cooperate with Holder in the filing of the required notice or
application for approval and the obtaining of any such approval; and
(C) the Closing Date shall be subject to extension for such period of
time, not to exceed six (6) months, as may be necessary to permit the
Holder to submit such filing to, and, if necessary, to obtain such
approval from, the Federal Reserve Board or other applicable
regulatory authority; provided, however, that the notice of Option
exercise and such governmental filing must be made, and the Notice
Date must be, no later than the date on which the Option would
otherwise terminate. Any exercise of the Option shall be deemed to
have occurred on the Notice Date.
4. Payment and Delivery of Certificates.
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(a) On each Closing Date, Holder shall (i) pay to Issuer, in
immediately available funds by wire transfer to a bank account
designated by Issuer, an amount equal to the Purchase Price multiplied
by the number of Option Shares to be purchased on such Closing Date
and (ii) present and surrender this Agreement to the Issuer at the
address of the Issuer specified in Section 12(g) hereof.
(b) At each Closing, simultaneously with the delivery of
immediately available funds and surrender of this Agreement as
provided in Section 4(a), (i) Issuer shall deliver to Holder (A) a
certificate or certificates representing the Option Shares to be
purchased at such Closing, which Option Shares shall be free and clear
of all liens, claims, charges and encumbrances of any kind whatsoever,
and (B) if the Option is exercised in part only, an executed new
agreement with the same terms as this Agreement evidencing the right
to purchase the balance of the shares of Issuer Common Stock
purchasable hereunder; and (ii) Holder shall deliver to Issuer a
letter agreeing that Holder shall not offer to sell or otherwise
dispose of such Option Shares in violation of the provisions of this
Agreement or applicable state and federal securities laws.
(c) Certificates for the Option Shares delivered at each Closing
shall be endorsed with a restrictive legend which shall read
substantially as follows:
THE SECURITIES EVIDENCED BY THIS CERT1FICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT") OR QUALIFIED OR
REGISTERED UNDER THE SECURITIES LAWS OF ANY STATE. THEY MAY
NOT BE SOLD OR TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE ACT AND UNTIL THEY HAVE BEEN QUALIFIED OR REGISTERED
UNDER APPLICABLE STATE SECURITIES LAWS, UNLESS THE ISSUER RECEIVES AN
OPINION OF COUNSEL FOR THE HOLDER OF THESE SECURITIES, REASONABLY
SATISFACTORY TO THE ISSUER, STATING THAT SUCH SALE OR TRANSFER IS EXEMPT
FROM THE REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS OF THE ACT AND
ANY APPLICABLE STATE SECURITIES LAWS. THE TRANSFER OF THE SECURITIES
REPRESENTED BY THIS CERTIFICATE IS ALSO SUBJECT TO RESALE RESTRICTIONS
ARISING UNDER THE TERMS OF A STOCK OPTION AGREEMENT DATED AS OF DECEMBER 14,
1999, A COPY OF WHICH IS AVAILABLE FOR INSPECTION AT THE OFFICE OF THE
SECRETARY OF THE ISSUER.
It is understood and agreed that the above legend shall be removed by delivery
of substitute certificate(s) without such legend if Holder shall have delivered
to Issuer a copy of a letter from the staff of the SEC, or an opinion of counsel
in form and substance reasonably satisfactory to Issuer and its counsel, to the
effect that such legend is not required for purposes of the Securities Act or
applicable state securities laws.
5. Representations and Warranties and Covenants of Issuer. Issuer hereby
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represents and warrants to Grantee as follows:
(a) Due Authorization. Issuer has all requisite corporate power
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and authority to enter into this Agreement and, subject to any
approvals referred to herein, to consummate the transactions
contemplated hereby. The execution and delivery of this Agreement and
the consummation of the transactions contemplated hereby have been
duly authorized by all necessary corporate action on the part of
Issuer. This Agreement has been duly executed and delivered by Issuer
and constitutes a binding agreement of Issuer enforceable against
Issuer in accordance with its terms, except as the enforceability
hereof may be limited by bankruptcy, insolvency, moratorium or other
similar laws affecting the rights of creditors generally or by
equitable principles, whether such enforcement is sought in law or
equity.
(b) Authorized Stock. Issuer has taken all necessary corporate
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action to authorize and reserve and to permit it to issue, and, at all
times from the date hereof until the obligation to deliver Issuer
Common Stock upon the exercise of the Option terminates, will have
reserved for issuance, upon exercise of the Option, shares of Issuer
Common Stock necessary for Holder to exercise the Option, and Issuer
will take all necessary corporate action to authorize and reserve for
issuance all additional shares of Issuer Common Stock or other
securities which may be issued pursuant to Section 7 upon exercise of
the Option. The shares of Issuer Common Stock to be issued upon due
exercise of the Option, including all additional shares of Issuer
Common
Stock or other securities which may be issuable pursuant to Section 7,
upon issuance pursuant hereto, shall be duly and validly issued, fully
paid and nonassessable, and shall be delivered free and clear of all
liens, claims, charges and encumbrances of any kind or nature
whatsoever, including any preemptive rights of any stockholder of
Issuer.
(c) No Conflict The execution and delivery by Issuer of this
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Agreement and the consummation of the transactions contemplated hereby do not
and will not violate or conflict with Issuer's Articles of Incorporation or
Bylaws, or any statute, regulation, judgment, order, writ, decree or injunction
applicable to Issuer (other than as may be effected by Grantee's ownership of
Issuer Common Stock exceeding certain limits set forth by statute or regulation)
or its properties or assets and do not and will not violate, conflict with,
result in a breach of, constitute a default (or an event which with due notice
and/or lapse of time would constitute a default) under, result in a termination
of, accelerate the performance required by, or result in the creation of any
lien, pledge, security interest, charge or other encumbrance upon any of the
properties or assets of Issuer under the terms, conditions or provisions of any
note, bond, mortgage, indenture, deed of trust, or loan agreement or other
agreement, instrument or obligation to which Issuer is a party, or by which
Issuer or any of its properties or assets may be bound or affected.
(d) Observance of Covenants. Issuer agrees that it will not, by
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amendment of its Articles of Incorporation 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 by
Issuer.
(e) Compliance. Issuer shall promptly take all action as may from
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time to time be required (including, complying with all premerger notification,
reporting and waiting period requirements of any federal or state regulatory
authority, as necessary, before the Option may be exercised, and cooperating
fully with Holder in preparing such applications or notices and providing such
information to the Federal Reserve Board, the Federal Deposit Insurance
Corporation, the Department of Financial Institutions or any other regulatory
authority as they may require) in order to permit Grantee to exercise the Option
and Issuer duly and effectively to issue shares of Common Stock pursuant hereto,
and to protect the rights of Grantee against dilution.
6. Representations and Warranties of Grantee. Grantee hereby represents
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and warrants to Issuer that this Option is not being, and any Option Shares or
other securities acquired by Grantee upon exercise of the Option will not be,
acquired with a view to the public distribution thereof and will not be
transferred or otherwise disposed of except in a transaction registered or
exempt from registration under the Securities Act and applicable state
securities laws.
7. Adjustment Upon Changes in Capitalization, etc.
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(a) In the event of any change in Issuer Common Stock by reason
of a stock dividend, stock split, split-up, recapitalization,
combination, exchange of shares or similar transaction, the type and
number of shares or
securities subject to the Option, and the Purchase Price therefor,
shall be adjusted appropriately, and proper provision shall be made
in the documentation pertaining to such transaction so that Holder
shall receive, upon exercise of the Option, the number and class of
shares or other securities or property that Holder would have
received in respect of Issuer Common Stock if the Option had been
exercised immediately prior to such event, or the record date
therefor, as applicable. If any additional shares of Issuer Common
Stock are issued after the date of this Agreement (whether upon
exercise of stock options or otherwise but excluding any issuance
pursuant to an event described in the first sentence of this Section
7(a)), the number of shares of Issuer Common Stock subject to the
Option shall be adjusted so that, after such issuance, such number
of shares, together with any shares of Issuer Common Stock
previously issued pursuant hereto, equals 19.9% of the number of
shares of Issuer Common Stock then issued and outstanding, without
giving effect to any shares subject to or issued pursuant to the
Option (with any fractional share being rounded up to the next full
share). Issuer agrees that in no event shall the number of shares of
Issuer Common Stock issued after the date of this Agreement pursuant
to the preceding sentence, together with the number of shares of
Issuer Common Stock subject to the Option, adjusted as aforesaid,
exceed the number of available authorized but unissued and
unreserved shares of Issuer Common Stock. Nothing contained in this
Section 7(a) or elsewhere in this Agreement shall be deemed to
authorize Issuer to issue shares in breach of any provision of the
Reorganization Agreement.
(b) In the event that Issuer shall, prior to the occurrence of
an event set forth in Section 3(a) terminating the Holder's right to
exercise the Option, enter into an agreement (i) to consolidate with
or merge into any person, other than Grantee or one of its
subsidiaries, and shall not be the continuing or surviving
corporation of such consolidation or merger, (ii) to permit any
person, other than Grantee or one of its subsidiaries, to merge into
Issuer and Issuer shall be the continuing or surviving corporation,
but, in connection with such merger, the then outstanding shares of
Issuer Common Stock shall be changed into or exchanged for stock or
other securities of Issuer or any other person or cash or any other
property or the outstanding shares of Issuer Common Stock
immediately prior to such merger shall after such merger represent
less than 50% of the outstanding shares and share equivalents of the
merged company, or (iii) to sell or otherwise transfer all or
substantially all of its consolidated assets or deposit liabilities
to any person other than Grantee or one of its subsidiaries, then,
and in each such case, the agreement governing such transaction
shall make proper provisions so that the Option shall, upon the
consummation of any such transaction and upon the terms and
conditions set forth herein, be converted into, or exchanged for, an
option (the "Substitute Option"), at the, election of Grantee, of
either (A) the Acquiring Corporation (as defined below), (B) any
person that controls the Acquiring Corporation, (such person being
referred to as the "Substitute Option Issuer"), or (C) in the case
of a merger described in clause (ii), Issuer.
(c) The Substitute Option shall have the same terms as the
Option, provided that if the terms of the Substitute Option cannot,
for legal reasons, be the same as the Option, such terms shall be as
similar as possible and in no event less advantageous to Grantee.
The Substitute Option Issuer shall also enter into an agreement with
the then holder or holders of the Substitute Option in substantially
the same form as this Agreement (after giving effect for such
purposes to the provisions of this Agreement), which shall be
applicable to the Substitute Option.
(d) The Substitute Option shall be exercisable for such number
of shares of the Substitute Common Stock (as is hereinafter defined)
as is equal to the Assigned Value (as is hereinafter defined)
multiplied by the number of shares of the Issuer Common Stock for
which the Option was theretofore exercisable, divided by the Average
Price (as is hereinafter defined). The exercise price of the
Substitute Option per share of the Substitute Common Stock (the
"Substitute Purchase Price") shall then be equal to the Purchase
Price multiplied by a fraction in which the numerator is the number
of shares of the Issuer Common Stock for which the Option was
theretofore exercisable and the denominator is the number of shares
of the Substitute Common Stock for which the Substitute Option is
exercisable.
(e) As used herein, the following terms have the meanings
indicated:
(i) "Acquiring Corporation" shall mean (A) the continuing
or surviving corporation of a consolidation or merger with Issuer
(if other than Issuer), (B) Issuer in a merger in which Issuer is
the continuing or surviving person, and (C) the transferee of all or
any substantial part of the Issuer's assets (or the assets of its
subsidiaries).
(ii) "Substitute Common Stock" shall mean the common stock
issued by the Substitute Option Issuer upon exercise of the
Substitute Option.
(iii) "Assigned Value" shall mean the highest of (A) the
price per share of the Issuer Common Stock at which a Tender Offer
or Exchange Offer therefor has been made by any person (other than
Grantee or a subsidiary of Grantee), (B) the price per share of the
Issuer Common Stock to be paid by any person (other than Grantee or
a subsidiary of Grantee) pursuant to an agreement with Issuer, and
(C) the highest closing price per share of Issuer Common Stock as
quoted on The Nasdaq Stock Market (or if Common Stock is not quoted
on The Nasdaq Stock Market, the highest bid price per share on any
day as quoted on the principal trading market or securities exchange
on which such shares are traded as reported by a recognized source
chosen by
Grantee and reasonably acceptable to Issuer) within the six-month
period immediately preceding the agreement governing the transaction
described in Section 7(b) which gave rise to the Substitute Option;
provided, however, that in the event of a sale of less than all of
Issuer's consolidated assets or deposit liabilities, the Assigned
Value shall be the sum of the price paid in such sale for such
assets or deposit liabilities and the current market value of the
remaining consolidated net assets of Issuer as determined by a
nationally recognized investment banking firm selected by the Holder
(or by a majority in interest of the Holders if there shall be more
than one Holder (a "Holder Majority")) and reasonably acceptable to
Issuer, divided by the number of shares of the Issuer Common Stock
outstanding at the time of such sale. In the event that an exchange
offer is made for the Issuer Common Stock or an agreement is entered
into for a merger or consolidation involving consideration other
than cash, the value of the securities or other property issuable or
deliverable in exchange for the Issuer Common Stock shall be
determined by a nationally recognized investment banking firm
selected by Holder (or a Holder Majority) and reasonably acceptable
to Issuer.
(iv) "Average Price" shall mean the average closing price
of the Substitute Common Stock for the one year immediately
preceding the effective date of the consolidation, merger or sale in
question, but in no event higher than the closing price of the
shares of the Substitute Common Stock on the day preceding such
consolidation, merger or sale; provided that if Issuer is the issuer
of the Substitute Option, the Average Price shall be computed with
respect to a share of common stock issued by Issuer, the person
merging into Issuer or by any company which controls or is
controlled by such merging person, as Holder may elect.
(f) In no event, pursuant to any of the foregoing paragraphs,
shall the Substitute Option be exercisable for more than 19.9% of the
aggregate of the shares of the Substitute Common Stock outstanding
prior to exercise of the Substitute Option (with any fractional share
being rounded up to the next full share). In the event that the
Substitute Option would be exercisable for more than 19.9% of the
aggregate of the shares of the Substitute Common Stock but for this
clause (f), the Substitute Option Issuer shall make a cash payment to
Grantee equal to the excess of (i) the value of the Substitute Option
without giving effect to the limitation in this clause (f) over (ii)
the value of the Substitute Option after giving effect to the
limitation in this clause (f). The difference in value shall be
determined by a nationally recognized investment banking firm selected
by Grantee and reasonably acceptable to the Substitute Option Issuer,
whose determination shall be conclusive and binding on the parties.
(g) Issuer shall not enter into any transaction described in
subsection (b) of this Section 7 unless the Acquiring Corporation and
any person that controls the Acquiring Corporation assume in writing
all the obligations of Issuer hereunder and take all other actions
that may be necessary so that the provisions of this Section 7 are
given full force and effect (including, without limitation, any action
that may be necessary so that the shares of Substitute Common Stock
are in no way distinguishable from or have lesser economic value than
other shares of common stock issued by the Substitute Option Issuer).
(h) At the written request of Holder delivered to the Substitute
Option Issuer prior to the occurrence of an event set forth in Section
3(a) above terminating the Substitute Option, the Substitute Option
Issuer shall repurchase from Holder (i) the Substitute Option and/or
(ii) all Substitute Common Stock theretofore purchased by Holder
pursuant hereto with respect to which Holder then has beneficial
ownership. The date on which Holder exercises its rights under this
Section 7(h) is referred to as the "Substitute Option Request Date."
Such repurchase shall be at an aggregate price (the "Substitute Option
Repurchase Consideration") equal to the sum of (A) the excess, if any,
of (1) the Highest Closing Price (as defined below) for each share of
Substitute Common Stock over (2) the Substitute Purchase Price per
share of Substitute Common Stock, multiplied by the number of shares
of Substitute Common Stock for which the Substitute Option may then be
exercised and as to which Holder has exercised its repurchase right
hereunder, plus (B) the Highest Closing Price for each share of
Substitute Common Stock, multiplied by the number of shares of
Substitute Common Stock previously acquired by Holder upon exercise of
the Option or Substitute Option and as to which Holder has exercised
its repurchase right hereunder. The term "Highest Closing Price" shall
mean the highest closing price per share of Substitute Common Stock on
the Nasdaq National Market (or, if Substitute Common Stock is not
quoted on The Nasdaq Stock Market, the highest bid price per share on
any day as quoted on the principal trading market or securities
exchange on which such shares are traded as reported by a recognized
source chosen by Grantee and reasonably acceptable to Issuer) or, if
such shares are not traded in a trading market or listed on an
exchange, as quoted by the brokerage firms acting as market makers for
the Substitute Common Stock prior to the trading or listing of the
Substitute Common Stock on any national securities exchange and
thereafter as reported by the principal trading market or securities
exchange on which such shares are traded, during the 60 business days
preceding the Substitute Option Request Date.
(i) The provisions of Sections 8(b), 8(c), 11 and 12 shall
apply, with appropriate adjustments, to any securities for which the
Option becomes exercisable pursuant to this Section 7 and as
applicable, references in such sections to "Issuer", "Option",
"Purchase Price", "Issuer Common Stock", "Repurchase Consideration",
and "Request Date" shall be deemed to be references to "Substitute
Option Issuer", "Substitute Option", "Substitute
Purchase Price", "Substitute Common Stock", "Substitute Option
Repurchase Consideration", and "Substitute Option Request Date",
respectively.
8. Repurchase at the Option of Grantee.
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(a) At any time after the first occurrence of a Repurchase Event
(as defined in Section 8(e) below), at the written request of Holder
delivered to Issuer prior to the occurrence of an event set forth in
Section 3(a) above terminating the Option, Issuer shall repurchase
from Holder (i) the Option and (ii) all Option Shares theretofore
purchased by Holder pursuant hereto with respect to which Holder then
has beneficial ownership. The date on which Holder exercises its
rights under this Section 8 is referred to as the "Request Date." Such
repurchase shall be at an aggregate price (the "Repurchase
Consideration") equal to the sum of:
(i) the aggregate Purchase Price paid by Holder for any
Option Shares acquired pursuant to the Option with respect to which
Holder then has beneficial ownership;
(ii) the excess, if any, of (A) the Applicable Price (as
defined below) for each Option Share over (B) the Purchase Price per
Option Share (subject to adjustment pursuant to Section 7(a)),
multiplied by the number of Option Shares with respect to which the
Option has not been exercised; and
(iii) the excess, if any, of the Applicable Price over the
Purchase Price (subject to adjustment pursuant to Section 7(a)) paid
(or, in the case of Option Shares with respect to which the Option
has been exercised but the Closing Date has not occurred, payable)
by Holder for each Option Share with respect to which the Option has
been exercised and with respect to which Holder then has beneficial
ownership, multiplied by the number of such shares.
(b) If Holder exercises its rights under this Section 8, Issuer
shall, within ten (10) business days after the Request Date, pay the
Repurchase Consideration to Holder in immediately available funds, and
Holder shall surrender to Issuer the Option and the certificates
evidencing the Option Shares purchased thereunder with respect to
which Holder then has beneficial ownership and has designated to be
repurchased, and Holder shall warrant that it has sole record and
beneficial ownership of such shares and that the same are then free
and clear of all liens, claims, charges and encumbrances of any kind
whatsoever.
(c) Notwithstanding the provisions hereof to the contrary, to
the extent that Issuer is prohibited under applicable law, regulation
or
administrative policy from repurchasing all or any portion of the
Option or Option Shares, then (i) Issuer shall promptly give notice of
such fact to Holder; (ii) Issuer shall, from time to time subject to
the last sentence of this Section 8(c), deliver to Holder that portion
of the Repurchase Consideration that it is not then so prohibited from
paying; (iii) at Holder's request, Issuer shall promptly file any
required notice or application for approval and expeditiously process
the same. After Holder's receipt of such notice from Issuer, Issuer
shall not be in breach of its repurchase obligation hereunder to the
extent it is or remains, despite reasonable efforts to obtain any
required approvals, legally prohibited from repurchasing the Option or
Option Shares. Holder shall have the right (A) to revoke its request
for repurchase with respect to the portion of the Option or Option
Shares that Issuer is prohibited from repurchasing, (B) to require
Issuer to deliver to Holder the Option and/or Option Shares Issuer is
prohibited from repurchasing, and (C) to exercise the Option as to the
number of Option Shares for which the Option was exercisable at the
Request Date less the number of such Option Shares in respect of which
the Repurchase Consideration has been lawfully paid. Notwithstanding
anything herein to the contrary, Issuer shall not be obligated to
repurchase all or any part of the Option or Option Shares pursuant to
more than one written request from Holder, except that Issuer shall be
obligated to repurchase, pursuant to more than one written request,
any Option or Option Shares in the event that Holder (1) has revoked
its request for repurchase in accordance with the provisions of this
Section 8 prior to the occurrence of an event set forth in Section
3(a) terminating the Holder's right to exercise the Option and (2) has
delivered, prior to such event, a new written notice requesting a
repurchase. If an event set forth in Section 3(a) terminating the
Holder's right to exercise the Option occurs prior to, or is scheduled
to occur within, 60 days after the date of the notice by Issuer
described in clause 8(c)(i) above, then, notwithstanding the
occurrence of such terminating event, Holder shall have the right to
receive the Repurchase Consideration to the extent Issuer is or
becomes, within a 60 day period from the date of such notice by
Issuer, legally permitted to repurchase. Except as set forth in the
preceding sentence, Holder's repurchase rights under this Agreement
shall terminate concurrently with the termination of Holder's right to
exercise the Option, pursuant to Section 3(a).
(d) For purposes of this Agreement, the "Applicable Price" means
the highest of (i) the highest price per share of Issuer Common Stock
paid for any such share by the person or groups described in Section
8(e)(i), (ii) the price per share of Issuer Common Stock received by
holders of Issuer Common Stock in connection with any merger or other
business combination transaction described in Section 7(b)(i),
7(b)(ii) or 7(b)(iii), or (iii) the highest bid price per share of
Issuer Common Stock on The Nasdaq Stock Market or other principal
trading market or securities exchange on which such shares are traded
as reported by a recognized source selected by Holder during the 60
business days preceding the Request Date; provided, however, that in
the event of a sale of less than all of Issuer's assets, the
Applicable Price shall be
the sum of the price paid in such sale for such assets or deposit
liabilities and the current market value of the remaining consolidated
net assets of Issuer as determined by a nationally recognized
investment banking firm selected by Holder (or the Holder Majority)
and reasonably acceptable to Issuer, divided by the number of shares
of the Issuer Common Stock outstanding at the time of such sale. If
the consideration to be offered, paid or received pursuant to either
of the foregoing clauses (i) or (ii) shall be other than in cash, the
value of such consideration shall be determined in good faith by an
independent nationally recognized investment banking firm selected by
Holder (or the Holder Majority) and reasonably acceptable to Issuer,
which determination shall be conclusive for all purposes of this
Agreement.
(e) As used herein, a "Repurchase Event" shall occur if (i) any
person (other than Grantee or any subsidiary of Grantee) shall have
acquired beneficial ownership of (as such term is defined in Rule 13d-
3 promulgated under the Exchange Act) or the right to acquire
beneficial ownership of, or any "group" (as such term is defined under
the Exchange Act and the rules and regulations promulgated thereunder)
shall have been formed which beneficially owns, or has the right to
acquire beneficial ownership of, fifty percent (50%) or more of the
then outstanding shares of Issuer Common Stock or (ii) any of the
transactions described in Section 7(b)(i), 7(b)(ii) or 7(b)(iii) shall
be consummated.
9. Registration Rights.
--------------------
(a) Demand Registration Rights. Issuer shall, subject to the
--------------------------
conditions of Section 9(c) below, if requested by any Holder, including Grantee
and any permitted transferee ("Selling Shareholder"), after exercise of the
Option and prior to an Expiration Date, expeditiously prepare and file, a
registration statement under the Securities Act if such registration is
necessary in order to permit the sale or other disposition of any or all shares
of Issuer Common Stock or other securities that have been acquired by or are
issuable to the Selling Shareholder upon exercise of the Option in accordance
with the intended method of sale or other disposition stated by the Selling
Shareholder in such request, including without limitation a "shelf" registration
statement under Rule 415 under the Securities Act or any successor provision,
and Issuer shall use its best efforts to qualify such shares or other securities
for sale under any applicable state securities laws. Issuer shall not be
obligated to effect more than one (1) registration pursuant to this Section
9(a).
(b) Additional Registration Rights. If Issuer at any time after
------------------------------
the exercise of the Option proposes to register any shares of Issuer Common
Stock under the Securities Act in connection with an underwritten public
offering of such Issuer Common Stock, Issuer will promptly give written notice
to the Holders of its intention to do so and, upon the written request of any
Holder given within 30 days after receipt of any such notice (which request
shall specify the number of shares of Issuer Common Stock intended to be
included in such underwritten public offering by the Holder), Issuer will cause
all such shares for which a Holder requests participation in such registration,
to be so registered and included in such underwritten public offering; provided,
however, that Issuer may elect to not cause all of such
shares to be so registered (i) if the managing underwriter imposes a limitation
on the number of shares of Issuer Common Stock that may be included in the
registration because, in such underwriter's judgment, such limitation would be
necessary to effect an orderly public distribution, then Issuer will be
obligated to include only such limited portion, if any, of the Issuer Common
Stock with respect to which the Holders have requested inclusion hereunder, or
(ii) in the case of a registration solely to implement an employee benefit plan
or a registration filed on Form S-4 of the Securities Act or any successor form,
in which case Issuer shall not be required to include any of Holder's shares in
the registration; provided, further, however, that an election pursuant to (i)
may be only made one time. If some but not all the shares of Issuer Common
Stock, with respect to which Issuer shall have received requests for
registration pursuant to this Section 9(b), shall be excluded from such
registration, Issuer shall make appropriate allocation of shares to be
registered among the Holders desiring to register their shares pro rata in the
proportion that the number of shares requested to be registered by each such
Holder bears to the total number of shares requested to be registered by all
such Holders then desiring to have Issuer Common Stock registered for sale.
Issuer shall not be obligated to effect more than one (1) registration pursuant
to this Section 9(b).
(c) Conditions to Required Registration. Issuer shall use all
reasonable efforts to cause each registration statement referred to in Section
9(a) above to become effective and to obtain all consents or waivers of other
parties which are required therefor and to keep such registration statement
effective; provided, however, that Issuer may delay any registration of Option
Shares required pursuant to Section 9(a) above for a period not exceeding 90
days if Issuer determines, in the good faith exercise of its reasonable business
judgment, that such registration and offering could adversely effect or
interfere with bona fide financing plans of Issuer or would require disclosure
of information, the premature disclosure of which could adversely affect Issuer
or any transaction under active consideration by Issuer. Notwithstanding
anything to the contrary stated herein, Issuer shall not be required to register
Option Shares under the Securities Act pursuant to Section 9(a) above:
(i) on more than one occasion during any calendar year;
(ii) within 90 days after the effective date of a
registration referred to in Section 9(b) above pursuant to which the Holders
concerned were afforded the opportunity to register or qualify such shares under
the Securities Act and such shares were registered or qualified as requested,
and
(iii) unless a request therefor is made to Issuer by
Holders that hold at least 25% or more of the aggregate number of Option Shares
(including shares of Issuer Common Stock issuable upon exercise of the Option)
then outstanding.
In addition to the foregoing, Issuer shall not be required to maintain the
effectiveness of any registration statement after the expiration of nine months
from the effective date of such registration statement. Issuer shall use all
reasonable efforts to make any filings, and take all steps, under all applicable
state securities laws to the extent necessary to permit the sale or other
disposition of the Option Shares so registered in accordance with the intended
method of distribution for such shares; provided, however, that Issuer shall not
be required to consent to the
general jurisdiction or qualify to do business in any state where it is not
otherwise required to so consent to such jurisdiction or to so qualify to do
business.
(d) Expenses. Except where applicable state law prohibits such
--------
payments, Issuer will pay the costs of such registration or qualification
expenses, including without limitation registration fees, qualification fees,
blue sky fees and expenses, Issuer's legal expenses, costs of special audits or
"cold comfort" letters, expenses of underwriters, excluding discounts and
commissions, and the reasonable fees and expenses of any necessary special
experts in connection with each registration pursuant to Section 9(a) or (b)
above (including the related offerings and sales by holders of Option Shares)
and all other qualifications, notifications, or exemptions pursuant to Section
9(a) or 9(b) above.
(e) Indemnification. In connection with any registration under
---------------
Section 9(a) or 9(b) above, Issuer hereby indemnifies the Selling Shareholders,
and each underwriter thereof, including each person, if any, who controls such
holder or underwriter within the meaning of Section 15 of the Securities Act,
against all expenses, losses, claims, damages and liabilities caused by any
untrue, or alleged untrue, statement of a material fact contained in any
registration statement or prospectus or notification or offering circular
(including any amendments or supplements thereto) or any preliminary prospectus,
or caused by any omission, or alleged omission, to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, except insofar as such expenses, losses, claims, damages or
liabilities of such indemnified party are caused by any untrue statement or
alleged untrue statement that was included by Issuer in any such registration
statement or prospectus or notification or offering circular (including any
amendments or supplements thereto) in reliance upon, and in conformity with,
information furnished in writing to Issuer by such indemnified party or any
underwriter expressly for use therein, and Issuer and each officer, director and
controlling person of Issuer shall be indemnified by such Selling Shareholders,
or by such underwriter, as the case may be, for all such expenses, losses,
claims, damages and liabilities caused by any untrue, or alleged untrue,
statement, that was included by Issuer in any such registration statement or
prospectus or notification or offering circular (including any amendments or
supplements thereto) in reliance upon, and in conformity with, information
furnished in writing to Issuer by such holder or such underwriter, as the case
may be, expressly for such use.
Promptly upon receipt by a party indemnified under this Section 9(e) of
notice of the commencement of any action against such indemnified party in
respect of which indemnity or reimbursement may be sought against any
indemnifying party under this Section 9(e), such indemnified party shall notify
the indemnifying party in writing of the commencement of such action, but the
failure so to notify the indemnifying party shall not relieve it of any
liability which it may otherwise have to any indemnified party under this
Section 9(e). In case notice of commencement of any such action shall be given
to the indemnifying party as above provided, the indemnifying party shall be
entitled to participate in and, to the extent it may wish, jointly with any
other indemnifying party similarly notified, to assume the defense of such
action at its own expense, with counsel chosen by it and satisfactory to such
indemnified party. The indemnified party shall have the right to employ separate
counsel in any such action and participate in the defense thereof, but the fees
and expenses of such counsel (other than reasonable costs of investigation)
shall be paid by the indemnified party unless (i) the
indemnifying party either agrees to pay the same, (ii) the indemnifying party
fails to assume the defense of such action with counsel reasonably satisfactory
to the indemnified party, or (iii) the indemnified party has been advised by
counsel that one or more legal defenses may be available to the indemnified
party that may be contrary to the interest of the indemnifying party. No
indemnifying party shall be liable for any settlement entered into without its
consent, which consent may not be unreasonably withheld.
If the indemnification provided for in this Section 9(e) is unavailable to
a party otherwise entitled to be indemnified in respect of any expenses, losses,
claims, damages or liabilities referred to herein, then the indemnifying party,
in lieu of indemnifying such party otherwise entitled to be indemnified, shall
contribute to the amount paid or payable by such party to be indemnified as a
result of such expenses, losses, claims, damages or liabilities in such
proportion as is appropriate to reflect the relative benefits received by
Issuer, the Selling Shareholders and the underwriters from the offering of the
securities and also the relative fault of Issuer, the Selling Shareholders and
the underwriters in connection with the statements or omissions which resulted
in such expenses, losses, claims, damages or liabilities, as well as any other
relevant equitable considerations. The amount paid or payable by a party as a
result of the expenses, losses, claims, damages and liabilities referred to
above shall be deemed to include any legal or other fees or expenses reasonably
incurred by such party in connection with investigating or defending any action
or claim, provided, however, that in no case shall any Selling Shareholder be
responsible, in the aggregate, for any amount in excess of the net offering
proceeds attributable to its Option Shares included in the offering. No person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Securities Act) shall be entitled to contribution from any person who was
not guilty of such fraudulent misrepresentation. Any obligation by any holder to
indemnify shall be several and not joint with other holders.
In connection with any registration pursuant to Section 9(a) or 9(b) above,
Issuer and each Selling Shareholder (other than Grantee) shall enter into an
agreement containing the indemnification provisions of this Section 9(e).
(f) Miscellaneous Reporting. Issuer shall comply with all
-----------------------
reporting requirements and will do all such other things as may be necessary to
permit the expeditious sale at any time of any Option Shares by the Selling
Shareholders thereof in accordance with and to the extent permitted by any rule
or regulation promulgated by the SEC from time to time. Issuer shall at its
expense provide the Selling Shareholders with any information necessary in
connection with the completion and filing of any reports or forms required to be
filed by them under the Securities Act or the Exchange Act, or required pursuant
to any state securities laws or the rules of any stock exchange.
10. Listing. If Issuer Common Stock or any other securities to be
-------
acquired upon exercise of the Option are not then authorized for quotation on
The Nasdaq Stock Market or any securities exchange, Issuer, upon the request of
Holder, will promptly file an application to authorize for quotation the shares
of Issuer Common Stock or other securities to be acquired upon exercise of the
Option on The Nasdaq Stock Market and will use its commercially reasonable
efforts to obtain approval of such listing as soon as practicable.
11. Division of Option. This Agreement (and the Option granted hereby)
------------------
are exchangeable, without expense, at the option of Holder, upon presentation
and surrender of this Agreement at the principal office of Issuer for other
agreements providing for other options of different denominations entitling the
holder thereof to purchase in the aggregate the same number of shares of Issuer
Common Stock purchasable hereunder. The terms "other agreements" and "other
options" as used in the preceding sentence mean any other agreements and related
options for which this Agreement (and the Option granted hereby) may be
exchanged. Upon receipt by Issuer of evidence reasonably satisfactory to it of
the loss, theft, destruction or mutilation of this Agreement, and (in the case
of loss, theft or destruction) of reasonably satisfactory indemnification, and
upon surrender and cancellation of this Agreement, if mutilated, Issuer will
execute and deliver a new Agreement of like tenor and date. Any such new
Agreement executed and delivered shall constitute an additional contractual
obligation on the part of Issuer, whether or not the Agreement so lost, stolen,
destroyed or mutilated shall at any time be enforceable by anyone.
12. Limitation on Total Profit and Notional Total Profit.
-----------------------------------------------------
(a) Notwithstanding anything to the contrary contained herein, in
no event shall Grantee's Total Profit (as defined below in Section 12(c) hereof)
exceed $5,500,000 and, if it otherwise would exceed such amount, Grantee, at its
sole election, shall either (i) reduce the number of shares of Issuer common
stock subject to the Option, (ii) pay cash to Issuer, or (iii) any combination
thereof, so that Grantee's actually realized Total Profit shall not exceed
$5,500,000 after taking into account the foregoing actions.
(b) Notwithstanding anything to the contrary contained herein,
the Option may not be exercised for a number of shares as would, as of the date
of exercise, result in a Notional Total Profit (as defined below in Section
12(d) hereof) of more than $5,500,000; provided, that nothing in this sentence
shall restrict any exercise of the Option permitted hereby on any subsequent
date on which the Notional Total Profit would be less than $5,500,000.
(c) As used herein, the term "Total Profit" shall mean the
aggregate amount (before taxes) of the following: (i) the amount received by
Grantee pursuant to Issuer's repurchase of the Option (or any portion thereof)
pursuant to Section 8 hereof, (ii) (x) the amount received by Grantee or any
affiliate of Grantee pursuant to Issuer's repurchase of Option Shares pursuant
to Section 8 hereof, less (y) Grantee's or any affiliate of Grantee's purchase
price for such Option Shares, (iii) (x) the net cash amounts received by Grantee
or any affiliate of Grantee pursuant to the sale of Option Shares (or any other
securities into which such Option Shares shall be converted or exchanged) to any
unaffiliated party, less (y) Grantee's or any affiliate of Grantee's purchase
price of such Option Shares, and (iv) any equivalent amounts with respect to the
Substitute Option.
(d) As used herein, the term "Notional Total Profit" with respect
to any number of shares as to which Grantee or any affiliate of Grantee may
propose to exercise the Option shall be the Total Profit determined as of the
date of such proposed exercise assuming that the Option were exercised on such
date for such number of shares and assuming that such shares, together with all
other Option Shares held by Grantee or any affiliate of Grantee as of
such date, were sold for cash at the closing market price for the Issuer Common
Stock as of the close of business on the preceding trading day (less customary
brokerage commissions).
(e) Grantee agrees, promptly following any exercise of all or any
portion of the Option, and subject to its rights under Section 8 hereof, to use
and cause any wholly owned Subsidiary of Grantee to use commercially reasonable
efforts promptly to maximize the value of Option Shares purchased taking into
account market conditions, the number of Option Shares, the potential negative
impact of substantial sales on the market price for Issuer Common stock, and the
availability of an effective registration statement to permit public sale of
Option Shares.
13. Miscellaneous.
-------------
(a) Expenses. Except as otherwise provided in Section 9,
--------
each of the parties hereto and any Holder shall bear and pay all
costs and expenses incurred by it or on its behalf in connection
with the transactions contemplated hereunder, including, without
limitation, fees and expenses of its own financial consultants,
investment bankers, accountants and counsel.
(b) Waiver and Amendment. Any provision of this Agreement
--------------------
may be waived at any time by the party that is entitled to the
benefits of such provision. This Agreement may not be modified,
amended, altered or supplemented except upon the execution and
delivery of a written agreement executed by the parties hereto.
(c) Entire Agreement; No Third-Party Beneficiary. This
--------------------------------------------
Agreement, together with the Reorganization Agreement and the other
documents and instruments referred to herein and therein (i)
constitutes the entire agreement and supersedes all prior agreements
and understandings, both written and oral, between the parties with
respect to the subject matter hereof and (ii) is not intended to
confer upon any person other than the parties hereto, and their
respective successors and assigns, any rights or remedies hereunder,
except as expressly provided in this Agreement.
(d) Severability. If any term, provision, covenant or
------------
restriction of this Agreement is held by a court or a federal or
state regulatory authority of competent jurisdiction to be invalid,
void or unenforceable, such invalid, void or unenforceable term,
provision, covenant or restriction shall, if it is so susceptible,
be deemed modified to the minimum extent necessary to render the
same valid and enforceable and, in all events, the remainder of the
terms, provisions, covenants and restrictions of this Agreement
shall remain in full force and effect and shall in no way be
affected, impaired or invalidated. Without limiting the foregoing,
if for any reason such court or regulatory authority determines that
Holder may not legally acquire, or Issuer may not legally
repurchase, the full number of shares of Issuer Common Stock as
provided in Sections 3 and 8 (as adjusted pursuant to Section 7), it
is the express intention of Issuer to allow Holder to acquire or to
require Issuer to
repurchase the maximum number of shares as may be legally
permissible without any amendment or modification hereof.
(e) Governing Law. This Agreement shall be governed and
-------------
construed in accordance with the laws of the State of California
without regard to any applicable conflicts of law rules.
(f) Descriptive Headings. The descriptive headings
--------------------
contained herein are for convenience of reference only and shall not
affect in any way the meaning or interpretation of this Agreement.
(g) Notices. All notices, requests, claims, demands and
-------
other communications under this Agreement shall be in writing and
shall be given (and shall be deemed to have been duly received if so
given) by personal delivery, by telecopy (provided that copy is
concurrently sent by first class U.S. mail, postage prepaid), or by
mail (registered or certified mail, postage prepaid, return receipt
requested) to the parties as follows:
To Grantee: Greater Bay Bancorp
0000 Xxxx Xxxxxxxx Xxxx
Xxxx Xxxx, Xxxxxxxxxx 00000
Attention: Xxxxxx X. Xxxxx
Facsimile Number: (000) 000-0000
With a copy to: Greater Bay Bancorp
000 Xxxxxxx Xxxxxx, 0xx Xxxxx
Xxxx Xxxx, Xxxxxxxxxx 00000
Attention: Xxxxx X. Xxxxxxx, Esq.
Facsimile Number: (000) 000-0000
To Issuer: Coast Bancorp
000 Xxxxx Xxxxxx, Xxxxx 000
Xxxxx Xxxx, Xxxxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxxxxx
Facsimile Number: (000) 000-0000
With a copy to: Lillick & Xxxxxxx LLP
Xxx Xxxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxx, Esq.
Facsimile Number: (000) 000-0000
or to such other address as a party may have furnished to the others in writing
in accordance with this paragraph, except that notices of change of address
shall only be effective upon receipt. Any notice, demand or other communication
given pursuant to the provisions of this Section 11(g) shall be deemed to have
been given on the date actually delivered or on the third day following the date
mailed, whichever first occurs.
(h) Counterparts. This Agreement and any amendments hereto
------------
may be executed in two counterparts, each of which shall be
considered one and the same agreement and shall become effective
when both counterparts have been signed, it being understood that
both parties need not sign the same counterpart.
(i) Assignment. Neither this Agreement nor any of the
----------
rights, interests or obligations hereunder or under the Option shall
be assigned by any of the parties hereto without the prior written
consent of the other party, except that Grantee may assign this
Agreement to a wholly-owned subsidiary of Grantee and at any time
after a Purchase Event occurs, Holder may assign or transfer its
rights and obligations hereunder, in whole or in part, to any Person
or Persons, subject to compliance with applicable laws. In order to
effectuate the foregoing, Grantee shall be entitled to surrender
this Agreement to Issuer in exchange for two or more Agreements
entitling the holders thereof to purchase in the aggregate the same
number of shares of Common Stock as may be purchasable hereunder.
Subject to the preceding sentence, this Agreement shall be binding
upon, inure to the benefit of, and be enforceable by the parties and
their respective successors and permitted assigns.
(j) Further Assurances. In the event of any exercise of
------------------
the Option by Holder, Issuer and Holder shall execute and deliver
all other documents and instruments and take all other action that
may be reasonably necessary in order to consummate the transactions
provided for by such exercise.
(k) Specific Performance. The parties hereto agree that
--------------------
this Agreement may be enforced by either party through specific
performance, injunctive relief and other equitable relief. Both
parties further agree to waive any requirement for the securing or
posting of any bond in connection with the obtaining of any such
equitable relief and that this provision is without prejudice to any
other rights that the parties hereto may have for any failure to
perform this Agreement.
IN WITNESS WHEREOF, Issuer and Grantee have caused this Stock Option
Agreement to be signed by their respective officers thereunto duly authorized,
all as of the day and year first written above.
GREATER BAY BANCORP COAST BANCORP
By: /s/ Xxxxx X. Xxxxxxxxxxx By: /s/ Xxxxxx X. Xxxxxxxxx
------------------------ -----------------------
Xxxxx X. Xxxxxxxxxxx Xxxxxx X. Xxxxxxxxx
President and Chief President and Chief
Executive Officer Executive Officer
