Exhibit 2
AGREEMENT AND PLAN OF MERGER
dated as of
August 4, 2004
by and among
FIRST DEFIANCE FINANCIAL CORP.,
FIRST FEDERAL BANK OF THE MIDWEST,
COMBANC, INC.
and
THE COMMERCIAL BANK
TABLE OF CONTENTS
Page
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ARTICAL ONE -- THE MERGER ................................................... 1
1.01. Corporate Merger................................................... 1
1.02. Effective Time..................................................... 2
1.03. Governing Documents of the Surviving Corporation................... 2
1.04. Bank Merger........................................................ 2
1.05. Structure of Combination........................................... 2
ARTICLE TWO -- CONVERSION OF SHARES; SURRENDER OF CERTIFICATES............... 2
2.01. Conversion of ComBanc Shares....................................... 2
2.02. Exchange of ComBanc Certificates................................... 2
2.03. Dissenting ComBanc Shares.......................................... 4
2.04. Anti-Dilution Provisions........................................... 7
2.05. FDEF Shares........................................................ 7
2.06. Tax Consequences................................................... 7
ARTICLE THREE -- REPRESENTATIONS AND WARRANTIES OF COMBANC AND
COMMERCIAL BANK ............................................................. 7
3.01. Corporate Status................................................... 8
3.02. Capitalization of ComBanc.......................................... 9
3.03. Capitalization of Commercial Bank.................................. 9
3.04. Corporate Proceedings.............................................. 10
3.05. Authorization...................................................... 10
3.06. Financial Statements of ComBanc.................................... 10
3.07. SEC Filings........................................................ 11
3.08. Absence of Undisclosed Liabilities................................. 11
3.09. Absence of Changes................................................. 11
3.10. Loans.............................................................. 11
3.11. Allowance for Loan Losses.......................................... 12
3.12. Reports and Records................................................ 12
3.13. Taxes.............................................................. 12
3.14. Property and Title................................................. 13
3.15. Legal Proceedings.................................................. 14
3.16. Compliance with Laws and Regulations............................... 14
3.17. No Conflict........................................................ 15
3.18. Brokers, Finders and Others........................................ 15
3.19. Employment Agreements.............................................. 15
3.20. Employee Benefit Plans............................................. 16
3.21. Insurance.......................................................... 17
3.22. Governmental and Third-Party Proceedings........................... 18
3.23. Contracts.......................................................... 18
3.24. Environmental Matters.............................................. 18
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3.25. ComBanc Information................................................ 19
3.26. CRA Compliance..................................................... 19
3.27. Ownership of FDEF Shares........................................... 19
3.28. Fairness Opinion................................................... 20
3.29. Real Property Interest............................................. 20
3.30. Internal Controls.................................................. 20
ARTICLE FOUR -- REPRESENTATIONS AND WARRANTIES OF FDEF AND FIRST
FEDERAL ..................................................................... 21
4.01. Corporate Status................................................... 21
4.02. Corporate Proceedings.............................................. 21
4.03. Capitalization of FDEF............................................. 21
4.04. Authorized and Effective Agreement................................. 22
4.05. No Conflict........................................................ 23
4.06. SEC Filings........................................................ 23
4.07. Financial Statements of FDEF and First Federal..................... 23
4.08. Brokers, Finders and Others........................................ 24
4.09. Governmental and Third-Party Proceedings........................... 24
4.10. Absence of Undisclosed Liabilities................................. 24
4.11. Absence of Changes................................................. 24
4.12. Legal Proceedings.................................................. 25
4.13. Regulatory Matters................................................. 25
4.14. Ownership of ComBanc Shares........................................ 25
ARTICLE FIVE -- FURTHER COVENANTS OF COMBANC AND COMMERCIAL BANK............. 25
5.01. Operation of Business.............................................. 25
5.02. Notification....................................................... 28
5.03. Acquisition Proposals.............................................. 29
5.04. Delivery of Information............................................ 29
5.05. Affiliates Compliance with the Securities Act...................... 29
5.06. Voting Agreement................................................... 29
5.07. No Control......................................................... 29
5.08. Accounting Policies................................................ 30
5.09. ComBanc Meeting.................................................... 30
5.10. Tax Matters........................................................ 30
5.11. Insurance Coverage................................................. 31
5.12. Supplemental Assurances............................................ 31
ARTICLE SIX -- FURTHER COVENANTS OF FDEF..................................... 31
6.01. Employees; Employee Benefits....................................... 31
6.02. Exchange Listing................................................... 32
6.03. Notification....................................................... 32
6.04. Indemnification.................................................... 32
6.05. Board of Directors................................................. 33
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6.06. Advisory Board..................................................... 33
ARTICLE SEVEN -- FURTHER OBLIGATIONS OF THE PARTIES.......................... 34
7.01. Cooperative Action................................................. 34
7.02. Press Releases..................................................... 34
7.03. Proxy/Prospectus; Registration Statement........................... 34
7.04. Regulatory Applications............................................ 35
7.05. Termination of Profit Sharing Plan................................. 35
7.06. Confidentiality.................................................... 36
ARTICLE EIGHT -- CONDITIONS PRECEDENT TO THE OBLIGATIONS OF THE
PARTIES ..................................................................... 36
8.01. Conditions to the Obligations of FDEF and First Federal............ 36
8.02. Conditions to the Obligations of ComBanc and Commercial Bank....... 37
8.03. Mutual Conditions.................................................. 38
ARTICLE NINE -- CLOSING...................................................... 38
9.01. Closing............................................................ 38
9.02. Closing Deliveries Required of FDEF and First Federal.............. 39
9.03. Closing Deliveries Required of ComBanc and Commercial Bank......... 39
ARTICLE TEN -- TERMINATION................................................... 39
10.01. Termination........................................................ 39
10.02. Effect of Termination.............................................. 40
10.03. Termination Fee.................................................... 40
10.04. Force Majeure...................................................... 40
ARTICLE ELEVEN -- MISCELLANEOUS.............................................. 41
11.01. Notices............................................................ 41
11.02. Counterparts....................................................... 42
11.03. Entire Agreement................................................... 42
11.04. Successors and Assigns............................................. 42
11.05. Captions........................................................... 42
11.06. Governing Law...................................................... 42
11.07. Payment of Fees and Expenses....................................... 42
11.08. Amendment.......................................................... 42
11.09. Waiver............................................................. 42
11.10. No Third-Party Rights.............................................. 42
11.11. Waiver of Jury Trial............................................... 43
11.12. Severability....................................................... 43
11.13. Non-Survival of Representations, Warranties and Covenants.......... 43
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GLOSSARY OF DEFINED TERMS
The following terms, when used in this Agreement, have the meanings
ascribed to them in the corresponding Sections of this Agreement listed below:
"Acquisition Transactions" -- Section 5.03
"Aggregated Cash Consideration" -- Section 2.01(c)
"Agreement" -- Preamble
"Average" -- Section 2.01(b)
"Bank Merger" -- Preamble
"Bank Merger Agreement" -- Preamble
"BHCA" -- Section 3.01(a)
"Cash Election Shares" -- Section 2.02(a)
"CERCLA" -- Section 3.24
"Closing" -- Section 9.01
"Closing Date" -- Section 9.01
"Code" -- Section 2.02(f)
"ComBanc" -- Preamble
"ComBanc Balance Sheet Date" -- Section 3.06
"ComBanc Certificates" -- Section 2.02(a)
"ComBanc Disclosure Schedule" -- Article Three
"ComBanc Dissenting Share" -- Section 2.03
"ComBanc Financial Statements" -- Section 3.06
"ComBanc Meeting" -- Section 3.04(b)
"ComBanc Real Properties" -- Section 3.14(a)
"ComBanc Shares" -- Section 1.01
"ComBanc's Counsel" -- Section 7.01
"ComBanc's Financial Advisor" -- Section 3.18
"Commercial Bank" -- Preamble
"Commercial Bank Real Estate Collateral" -- Section 3.24
"Compensation and Benefit Plans" -- Section 3.20(a)
"Consultants" -- Section 3.20(a)
"Continuing Employees" -- Section 6.01
"Corporate Merger" -- Preamble
"CRA" -- Section 3.26
"DGCL" -- Section 1.01
"Directors" -- Section 3.20(a)
"Effective Time" -- Section 1.02
"Election Deadline" -- Section 2.02(b)
"Election Form" -- Section 2.02(a)
"Employees" -- Section 3.20(a)
"Environmental Law" -- Section 3.24
"ERISA" -- Section 3.20(a)
"ERISA Affiliate" -- Section 3.20(c)
"Exchange Act" -- Section 3.07
"Exchange Agent" -- Section 2.02(a)
"Exchange Ratio" -- Section 2.01(a)
"FDEF" -- Preamble
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"FDEF Filed SEC Documents" -- Section 4.10
"FDEF Financial Statements" -- Section 4.07
"FDEF Shares" -- Section 2.01(a)
"FDEF Stock Option Plans" -- Section 4.03(a)
"FDEF Stock Options" -- Section 4.03(a)
"FDEF's Counsel" -- Section 7.01
"FDIC" -- Section 3.01(b)
"Federal Reserve" -- Section 3.01(b)
"First Federal" -- Preamble
"GAAP" -- Section 3.06
"Governmental Authority" -- Section 3.16(c)
"HOLA" -- Section 4.01(a)
"Hazardous Substances" -- Section 3.24
"IRS" -- Section 3.13
"Information" -- Section 7.06
"Loan Assets" -- Section 3.10
"Loan Documentation" -- Section 3.10
"material" -- Section 3.01(d)
"material adverse effect" -- Section 3.01(d)
"MRP" -- Section 4.03(a)
"Nasdaq" -- Section 4.09
"No-Election Shares" -- Section 2.02(a)
"ODFI" -- Section 3.01(b)
"OGCL" -- Section 1.01
"OTS" -- Section 4.01(b)
"Officers" -- Section 3.19(a)
"Outstanding ComBanc Shares" -- Section 2.01(c)
"PCBs" -- Section 3.24
"Pension Plan" -- Section 3.20(b)
"Per Share Cash Consideration" -- Section 2.01(a)
"Per Share Reduction" -- Section 2.01(d)
"Per Share Stock Consideration" -- Section 2.01(a)
"Proxy/Prospectus" -- Section 7.03(a)
"Reallocated Cash Shares" -- Section 2.02(c)
"Reallocated Stock Shares" -- Section 2.02(c)
"Registration Statement" -- Section 7.03(a)
"Regulatory Authorities" -- Section 3.16(a)
"Rule 145 Affiliates" -- Section 5.05
"SEC" -- Section 3.01(c)
"Securities Act" -- Section 3.20(b)
"Stock Election Shares" -- Section 2.02(a)
"Subsidiary" -- Section 3.01(c)
"Surviving Corporation" -- Section 1.01
"Tax" -- Section 3.13
"Tax Returns" -- Section 3.13
"Updated ComBanc Disclosure Schedule" -- Section 5.02
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AGREEMENT AND PLAN OF MERGER
----------------------------
THIS AGREEMENT AND PLAN OF MERGER (the "Agreement"), dated as of August
4, 2004, is made and entered into by and among First Defiance Financial Corp.,
an Ohio corporation ("FDEF"); First Federal Bank of the Midwest, a federal
savings bank ("First Federal"); ComBanc, Inc., a Delaware corporation
("ComBanc"); and The Commercial Bank, an Ohio commercial bank ("Commercial
Bank").
W I T N E S S E T H:
WHEREAS, the Boards of Directors of ComBanc, Commercial Bank, FDEF and
First Federal have each determined that it is in the best interests of their
respective corporations and shareholders for ComBanc to merge with and into
FDEF (the "Corporate Merger") followed by the merger of Commercial Bank with
and into First Federal (the "Bank Merger"), upon the terms and subject to the
conditions set forth in and pursuant to the terms of this Agreement and the
Bank Merger Agreement to be entered into by and between First Federal and
Commercial Bank, the form of which is attached hereto as Exhibit A (the "Bank
Merger Agreement"); and
WHEREAS, the Boards of Directors of ComBanc, Commercial Bank, FDEF and
First Federal have each approved this Agreement and the consummation of the
transactions contemplated hereby;
NOW, THEREFORE, in consideration of the premises and the respective
representations, warranties, covenants, agreements and conditions hereinafter
set forth, FDEF, First Federal, ComBanc and Commercial Bank, intending to be
legally bound hereby, agree as follows:
ARTICLE ONE
THE MERGER
1.01. Corporate Merger. Upon the terms and subject to the conditions of
this Agreement, at the Effective Time (as defined in Section 1.02), ComBanc
shall merge with and into FDEF in accordance with the Ohio General Corporation
Law (the "OGCL") and the Delaware General Corporation Law (the "DGCL"). FDEF
shall be the continuing and surviving corporation in the Corporate Merger,
shall continue to exist under the laws of the State of Ohio, and shall be the
only one of FDEF and ComBanc to continue its separate corporate existence after
the Effective Time. As used in this Agreement, the term "Surviving Corporation"
refers to FDEF immediately after the Effective Time. As a result of the
Corporate Merger, the outstanding common stock, without par value, of ComBanc
(the "ComBanc Shares") and ComBanc's treasury shares shall be converted or
cancelled in the manner provided in Article Two.
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1.02. Effective Time. The Effective Time of the Corporate Merger shall
be the date and time upon which the last of the following occurs: (a) the
filing of the appropriate certificate of merger with the Ohio Secretary of
State, (b) the filing of the appropriate certificate of merger with the
Delaware Secretary of State or (c) such time thereafter as is agreed to in
writing by FDEF and ComBanc and provided in the certificates of merger filed
as set forth above.
1.03. Governing Documents of the Surviving Corporation. At the Effective
Time, the articles of incorporation and code of regulations of FDEF as in
effect immediately prior to the Effective Time shall be the articles of
incorporation and code of regulations of the Surviving Corporation.
1.04. Bank Merger. Following the Corporate Merger, FDEF shall cause the
Bank Merger to be completed in accordance with the Bank Merger Agreement.
1.05. Structure of Combination. With the consent of ComBanc, which consent
shall not be unreasonably withheld, FDEF and First Federal may at any time
change the method of effecting the mergers (including, without limitation, the
provisions of this Article One) if and to the extent FDEF deems such change to
be desirable; provided, however, that no such change shall (i) alter or change
the amount or composition of the per share merger consideration described in
Section 2.01 of this Agreement; (ii) be likely to materially delay or
jeopardize receipt of any required regulatory approvals or materially delay
the satisfaction of any conditions to the closing of the Corporate Merger; or
(iii) adversely affect the tax treatment of ComBanc or ComBanc stockholders as
a result of receiving the per share merger consideration. ComBanc and
Commercial Bank shall, if requested by FDEF, enter into one or more amendments
to this Agreement in order to effect any such change.
ARTICLE TWO
CONVERSION OF SHARES; SURRENDER OF CERTIFICATES
2.01. Conversion of ComBanc Shares. At the Effective Time, by virtue of
the Corporate Merger and without any action on the part of the holder thereof:
(a) Subject to Sections 2.02, 2.03 and 2.04, each ComBanc Share issued
and outstanding immediately prior to the Effective Time (other than ComBanc
Shares to be canceled in accordance with Section 2.01(d) and ComBanc
Dissenting Shares, as defined in Section 2.03) shall be converted into the
right to receive, at the election of the holder thereof pursuant to Section
2.02(a):
(i) the number of common shares, $.01 par value per share, of FDEF
("FDEF Shares") that is equal to the Exchange Ratio as defined in Section
2.01(b) (the "Per Share Stock Consideration"), or
(ii) a cash amount equal to $17.20 (the "Per Share Cash
Consideration").
(b) Subject to adjustments, if any, pursuant to Section 2.01(c), the
Exchange Ratio shall be a fraction the numerator of which shall be $17.20 and
the denominator of which shall be the average closing price of an FDEF Share
for the five consecutive trading days ending one trading day prior to the
Effective Time (the "Average"); provided, however, that in the event the
Average is less than $21.56, then the Exchange Ratio shall equal 0.79769;
provided further, however, that in the event the Average is greater than
$26.35, the Exchange Ratio shall equal 0.65266.
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(c) Notwithstanding anything in this Agreement to the contrary, to
preserve the status of the Corporate Merger as a tax-free reorganization
within the meaning of Section 368(a)(1)(A) of the Code, if the aggregate value
of the FDEF Shares to be issued in connection with the Corporate Merger, based
upon the closing price of the FDEF Shares as reported on The Nasdaq Stock
Market ("Nasdaq") on the business day immediately preceding the Effective
Time, would be less than 45% of the sum of the Aggregate Cash Consideration
(as defined below), plus the value of the FDEF Shares to be received by the
holders of the ComBanc Shares as consideration in connection with the
Corporate Merger, then FDEF may, in its sole discretion, increase the Per
Share Stock Consideration so that the aggregate value of the FDEF Shares to be
issued to the holders of the ComBanc Shares in connection with the Corporate
Merger, as determined based upon the closing price of the FDEF Shares on
Nasdaq on the business day immediately preceding the Effective Time, is equal
to 45% of the sum of the Aggregate Cash Consideration, plus the value of the
FDEF Shares to be received by the holders of the ComBanc Shares as
consideration in connection with the Corporate Merger. For purposes of this
Agreement, the "Aggregate Cash Consideration" shall be an amount equal to the
Per Share Cash Consideration multiplied by 50% of the number of ComBanc Shares
outstanding at the Effective Time (the "Outstanding ComBanc Shares") (i.e.
excluding any of ComBanc's treasury shares).
(d) If the shareholders' equity of ComBanc on the Closing Date is less
than $22,500,000, excluding unrealized accumulated other comprehensive income
related to ComBanc's investment portfolio, the Per Share Stock Consideration
and the Per Share Cash Consideration to be paid for the ComBanc Shares shall
be decreased by an amount equal to (i) the difference between $22,500,000 and
the shareholders' equity of ComBanc on the Closing Date, divided by (ii) the
number of ComBanc Shares outstanding on the Closing Date (the "Per Share
Reduction"), and each ComBanc shareholder shall be entitled to receive from
FDEF either (a) an amount equal to $17.20 less the Per Share Reduction or (b)
a number of FDEF Shares equal to the Exchange Ratio, where the numerator of
the Exchange Ratio shall be $17.20 less the Per Share Reduction, subject to
the adjustment set forth in Section 2.01(b).
(e) No certificates or scrip representing fractional FDEF Shares shall be
issued. Each holder of ComBanc Shares who would otherwise be entitled to
receive a fractional FDEF Share shall receive an amount of cash equal to the
product obtained by multiplying (i) the fractional FDEF Share interest to
which such holder (after taking into account all ComBanc Shares held at the
Effective Time by such holder) would otherwise be entitled by (ii) the
Average.
(f) Any treasury shares held by ComBanc and any ComBanc Shares owned by
FDEF for its own account shall be cancelled and retired at the Effective Time
and no consideration shall be issued in exchange therefor.
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2.02. Exchange of ComBanc Certificates.
(a) Seven business days after the Effective Time, or as soon as
practicable thereafter, FDEF, or an exchange agent designated by FDEF to
discharge its duties pursuant to this Section 2.02 (the "Exchange Agent"),
shall mail to each holder of record of ComBanc Shares (i) a form letter of
transmittal and instructions for use in surrendering for exchange the
certificates evidencing the ComBanc Shares ("ComBanc Certificates") that will
have been cancelled and extinguished as a result of the Corporate Merger and
(ii) an election form ("Election Form"). The letter of transmittal shall
specify that the risk of loss and title to the ComBanc Certificates shall pass
only upon delivery of such certificates as specified in the letter of
transmittal. Each Election Form shall permit the holder (or in the case of
nominee record holders, the beneficial owner through proper instructions and
documentation) (i) to elect to receive FDEF Shares with respect to all such
holder's ComBanc Shares, (ii) to elect to receive cash with respect to all
such holder's ComBanc Shares, (iii) to elect to receive 50% cash and 50% FDEF
Shares with respect to such holder's ComBanc Shares, or (iv) to indicate that
such holder makes no such election with respect to such holder's ComBanc
Shares ("No-Election Shares"). Any ComBanc Shares with respect to which the
holder has elected to receive cash are hereinafter referred to as "Cash
Election Shares," and any ComBanc Shares with respect to which the holder has
elected to receive FDEF Shares are hereinafter referred to as "Stock Election
Shares." Any ComBanc Shares with respect to which the holder thereof shall
not, as of the Election Deadline (as defined below), have made an election by
submission to the Exchange Agent of an effective, properly completed Election
Form shall be deemed to be No-Election Shares. Any ComBanc Dissenting Shares
shall be deemed to be Cash Election Shares for purposes of the allocation
provisions of subsection (c) below, but in no event shall such shares be
classified as Reallocated Stock Shares (as defined in Section 2.02 (c)(ii)(B)
below).
(b) For purposes of this Agreement, the term "Election Deadline" shall
mean 5:00 p.m., Eastern Time, on the 20th day following but not including the
date of mailing of the Election Form, or such other date upon which FDEF and
ComBanc shall mutually agree prior to the Effective Time. Any election to
receive cash, FDEF Shares or a combination of cash and FDEF Shares shall have
been properly made only if the Exchange Agent shall have actually received a
properly completed Election Form by the Election Deadline. The Exchange Agent
shall be required to make all determinations as to when any election,
modification or revocation has been received and whether any such election,
modification or revocation has been properly made.
(c) The Exchange Agent shall effect the allocation among holders of
ComBanc Shares of rights to receive cash, FDEF Shares, or a combination of
cash and FDEF Shares in accordance with the Election Forms as follows:
(i) If the number of Cash Election Shares is less than one-half of
the Outstanding ComBanc Shares, then:
(A) each of the Cash Election Shares (other than ComBanc
Dissenting Shares) shall be converted into the right to receive the Per Share
Cash Consideration,
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(B) the Exchange Agent will allocate first among the No-Election
Shares (by the method of allocation described in Section 2.02 (d)(i) below)
and then, if necessary, will allocate among the Stock Election Shares (by the
method of allocation described in Section 2.02 (d)(ii) below), a sufficient
number of non-Cash Election Shares ("Reallocated Cash Shares") such that the
sum of the number of Cash Election Shares plus the number of Reallocated Cash
Shares equals one-half of the Outstanding ComBanc Shares, and each of the
Reallocated Cash Shares shall be converted into the right to receive the Per
Share Cash Consideration, and
(C) each of the No-Election Shares (if any) and Stock Election
Shares which are not Reallocated Cash Shares shall be converted into the right
to receive the Per Share Stock Consideration.
(ii) If the number of Cash Election Shares is greater than one-half
of the Outstanding ComBanc Shares, then:
(A) each of the Stock Election Shares and No-Election Shares
shall be converted into the right to receive the Per Share Stock
Consideration,
(B) the Exchange Agent will allocate among the Cash Election
Shares (other than ComBanc Dissenting Shares) (by the method of allocation
described in Section 2.02(d) below), a sufficient number of Cash Election
Shares ("Reallocated Stock Shares") such that the sum of the number of
remaining Cash Election Shares (including all of the ComBanc Dissenting
Shares) equals one-half of the Outstanding ComBanc Shares, and each of the
Reallocated Stock Shares shall be converted into the right to receive the Per
Share Stock Consideration, and
(C) each of the Cash Election Shares (other than ComBanc
Dissenting Shares) which are not Reallocated Stock Shares shall be converted
into the right to receive the Per Share Cash Consideration.
(iii) If the number of Cash Election Shares (including the ComBanc
Dissenting Shares) is equal to one-half of the Outstanding ComBanc Shares,
then subparagraphs (c)(i) and (ii) above shall not apply and all No-Election
Shares and all Stock Election Shares shall be converted into the right to
receive the Per Share Stock Consideration.
(d) Any pro rata allocation shall be performed by the Exchange Agent as
follows:
(i) If the Exchange Agent is required pursuant to Section
2.02 (c)(i)(B) to designate from among all No-Election Shares the Reallocated
Cash Shares to receive the Per Share Cash Consideration, each holder of
No-Election Shares shall be allocated a pro rata portion (based on such
holder's No-Election Shares relative to all No-Election Shares) of the total
Reallocated Cash Shares.
(ii) If the Exchange Agent is required pursuant to Section
2.02(c)(i)(B) to designate from among all Stock Election Shares the
Reallocated Cash Shares to receive the Per Share Cash Consideration, each
holder of Stock Election Shares shall be allocated a pro rata portion (based
on such holder's Stock Election Shares relative to all Stock Election Shares)
of the remainder of the total Reallocated Cash Shares less the number of
No-Election Shares which are Reallocated Cash Shares.
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(iii) If the Exchange Agent is required pursuant to Section
2.02(c)(ii)(B) to designate from among all holders of Cash Election Shares the
Reallocated Stock Shares to receive the Per Share Stock Consideration, each
holder of Cash Election Shares shall be allocated a pro rata portion (based on
such holder's Cash Election Shares relative to all Cash Election Shares) of
the remainder of the total Reallocated Stock Shares less the number of
No-Election Shares which are Reallocated Stock Shares. For purposes of this
Section 2.02(d)(iii), ComBanc Dissenting Shares shall not be considered to be
Cash Election Shares.
(e) Upon surrender of a ComBanc Certificate for cancellation, together
with a letter of transmittal, duly executed, the holder of such ComBanc
Certificate shall be entitled to receive in exchange therefor a certificate
representing the full number of FDEF Shares and/or the amount of cash into
which the aggregate number of ComBanc Shares previously represented by such
surrendered ComBanc Certificate shall have been converted pursuant to this
Agreement., and the ComBanc Certificate so surrendered shall thereafter be
cancelled. All payments made upon the surrender of ComBanc Certificates
pursuant to this Article Two shall be deemed to have been made in full
satisfaction of all rights pertaining to the shares evidenced by such ComBanc
Certificates.
(f) If any ComBanc Certificate shall have been lost, stolen or destroyed,
upon the making of an affidavit of that fact by the person claiming such
ComBanc Certificate to be lost, stolen or destroyed and, if required by FDEF
in its sole discretion, the posting by such person of a bond in such amount as
FDEF may determine is reasonably necessary as indemnity against any claim that
may be made against it with respect to such ComBanc Certificate, the Exchange
Agent shall issue in exchange for such lost, stolen or destroyed ComBanc
Certificate the cash and/or FDEF Shares (and cash in lieu of fractional FDEF
Share interests, if any) deliverable in respect thereof.
(g) None of FDEF, ComBanc, the Exchange Agent or the Surviving
Corporation shall be liable to any former holder of ComBanc Shares for any
payment of the Per Share Stock Consideration, the Per Share Cash
Consideration, any cash in lieu of a fractional FDEF Share interest or any
dividends or distributions with respect to FDEF Shares delivered to a public
official if required by any applicable abandoned property, escheat or similar
law.
(h) No dividends or other distributions declared after the Effective Time
with respect to FDEF Shares and payable to the holders of record thereof after
the Effective Time shall be paid to the holder of any unsurrendered ComBanc
Certificate until it is surrendered by the holder thereof. Subject to the
effect, if any, of applicable law, after the subsequent surrender and exchange
of a ComBanc Certificate, the record holder thereof shall be entitled to
receive any dividends or other distributions, without any interest thereon,
which became payable with respect to the FDEF Shares represented by such
ComBanc Certificate.
(i) After the Effective Time, there shall be no further registration or
transfer of ComBanc Shares on the stock transfer books of ComBanc. In the
event that, after the Effective Time, ComBanc Certificates are presented for
transfer, they shall be cancelled and exchanged as provided in this Article
Two.
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(j) FDEF or the Exchange Agent shall be entitled to deduct and withhold
from the Per Share Stock Consideration or the Per Share Cash Consideration
such amounts as FDEF or the Exchange Agent is required to deduct and withhold
with respect to the making of such payment under the Internal Revenue Code of
1986, as amended (the "Code"), or any other provision of domestic or foreign
tax law (whether national, federal, state, provincial, local or otherwise). To
the extent that amounts are so withheld and paid over to the appropriate
taxing authority by FDEF or the Exchange Agent, such withheld amounts shall be
treated for all purposes of this Agreement as having been paid to the holder
of the ComBanc Certificates.
(k) The Surviving Corporation may from time to time waive one or more of
the rights provided to it in this Article Two to withhold certain payments,
deliveries and distributions; and no such waiver shall constitute a waiver of
its rights thereafter to withhold any such payment, delivery or distribution
in the case of any person.
2.03. Dissenting ComBanc Shares. Anything contained in this Agreement or
elsewhere to the contrary notwithstanding, if any holder of an outstanding
ComBanc Share dissents from the Corporate Merger pursuant to Section 262 of
the DGCL and is thereby entitled to appraisal rights thereunder (a "ComBanc
Dissenting Share"), then such ComBanc Dissenting Share shall be extinguished
but shall not be converted into the right to receive the Per Share Stock
Consideration or the Per Share Cash Consideration. Instead, such ComBanc
Dissenting Share shall be entitled only to such rights (and shall have such
obligations) as are provided in Section 262 of the DGCL.
2.04. Anti-Dilution Provisions. The Exchange Ratio shall be adjusted to
reflect any occurrence subsequent to the date of this Agreement but prior to
the Effective Time, pursuant to which the outstanding FDEF Shares shall have
been or will be increased, decreased, changed into or exchanged for a
different number or kind of shares or securities through reorganization,
recapitalization, reclassification, stock dividend, stock split, reverse stock
split or other like changes in FDEF's capitalization.
2.05. FDEF Shares. Each FDEF Share issued and outstanding immediately
prior to the Effective Time shall continue to be issued and outstanding and
unaffected by the Corporate Merger.
2.06. Tax Consequences. For federal income tax purposes, the Corporate
Merger is intended to constitute a reorganization within the meaning of
Section 368(a) of the Code. The parties hereto hereby adopt this Agreement as
a "plan of reorganization" within the meaning of Treasury Department
regulation sections 1.368-2(g) and 1.368-3(a).
ARTICLE THREE
REPRESENTATIONS AND WARRANTIES OF
COMBANC AND COMMERCIAL BANK
Except as set forth on a disclosure schedule prepared by ComBanc and
Commercial Bank (the "ComBanc Disclosure Schedule"), ComBanc and Commercial
Bank represent and warrant to FDEF and First Federal that each of the
following statements is true and accurate:
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3.01. Corporate Status.
(a) ComBanc is a Delaware corporation and a bank holding company
registered under the Bank Holding Company Act of 1956, as amended ("BHCA").
ComBanc is duly organized, validly existing and in good standing under the
laws of the State of Delaware and has the full corporate power and authority
to own its property, to carry on its business as presently conducted, and to
enter into and, subject to the required adoption of this Agreement by the
ComBanc stockholders and the obtaining of appropriate approvals of
Governmental and Regulatory Authorities (as defined below), perform its
obligations under this Agreement and consummate the transactions contemplated
by this Agreement. ComBanc is not qualified to do business in any other
jurisdiction or required to be so qualified to do business in any other
jurisdiction except where the failure to be so qualified individually or in
the aggregate would not reasonably be expected to have a material adverse
effect on ComBanc. ComBanc has provided to FDEF and First Federal true and
complete copies of the certificate of incorporation and bylaws of ComBanc, in
each case as amended to the date of this Agreement.
(b) Commercial Bank is an Ohio commercial bank and a Federal Reserve
member bank, and is regulated by the Ohio Division of Financial Institutions
(the "ODFI"), the Board of Governors of the Federal Reserve System (the
"Federal Reserve"), and the Federal Deposit Insurance Corporation (the
"FDIC"). Commercial Bank is duly organized, validly existing and in good
standing under the laws of the State of Ohio and has full power and authority,
corporate or otherwise, to own its property and to carry on its business as
presently conducted. Commercial Bank is not qualified to do business in any
other jurisdiction or required to be qualified to do business in any other
jurisdiction, except where the failure to be so qualified individually or in
the aggregate would not reasonably be expected to have a material adverse
effect on Commercial Bank. Commercial Bank has provided to FDEF and First
Federal true and complete copies of the articles of incorporation and other
governing instruments of Commercial Bank, in each case as amended to the date
of this Agreement.
(c) Commercial Bank is the only Subsidiary (as defined below) of ComBanc.
For purposes of this Agreement, "Subsidiary" has the meaning ascribed to such
term in Rule 1-02 of Regulation S-X promulgated by the Securities and Exchange
Commission (the "SEC").
(d) As used in this Agreement, (i) any reference to any event, change,
effect, development, circumstance or occurrence being "material" with respect
to any entity means an event, change, effect, development, circumstance or
occurrence that is or is reasonably likely to be material in relation to the
financial condition, properties, assets, liabilities, businesses or results of
operations of such entity and its subsidiaries taken as a whole, and (ii) the
term "material adverse effect" means, with respect to any entity, an event,
change, effect, development, circumstance or occurrence that, individually or
together with any other event, change, effect, development, circumstance or
occurrence, (A) has or would be reasonably likely to have a material adverse
effect on the business, condition (financial or otherwise), capitalization,
assets (tangible or intangible), liabilities (accrued, contingent or
otherwise), operations, regulatory affairs, financial performance or prospects
of such entity and its Subsidiaries, taken as a whole, or (B) materially
impairs the ability of such entity to perform its obligations under this
Agreement or to consummate the Corporate Merger and the other transactions
contemplated by this Agreement.
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3.02. Capitalization of ComBanc.
(a) The authorized capital of ComBanc consists solely of 5,000,000
ComBanc Shares, of which 2,211,014 are issued and outstanding and 164,986 are
held in treasury. All outstanding ComBanc Shares have been duly authorized and
are validly issued, fully paid and non-assessable, and were not issued in
violation of the preemptive rights of any person. All ComBanc Shares issued
have been issued in compliance in all material respects with all applicable
federal and state securities laws.
(b) As of the date of this Agreement, there are no options, warrants,
calls, rights, commitments or agreements of any character to which ComBanc is
a party or by which it is bound, obligating ComBanc to issue, deliver or sell,
or cause to be issued, delivered or sold, any additional ComBanc Shares or
obligating ComBanc to grant, extend or enter into any such option, warrant,
call, right, commitment or agreement. As of the date of this Agreement, there
are no outstanding contractual obligations of ComBanc to repurchase, redeem or
otherwise acquire any ComBanc Shares.
(c) Except as disclosed in Section 3.02(c) of the ComBanc Disclosure
Schedule, since December 31, 2003, ComBanc has not (A) issued or permitted to
be issued any ComBanc Shares, or securities exercisable for or convertible
into ComBanc Shares; (B) repurchased, redeemed or otherwise acquired, directly
or indirectly through any ComBanc Subsidiary or otherwise, any ComBanc Shares;
or (C) declared, set aside, made or paid to the stockholders of ComBanc
dividends or other distributions on the outstanding ComBanc Shares.
(d) No bonds, debentures, notes or other indebtedness of ComBanc having
the right to vote on any matters on which ComBanc stockholders may vote are
issued or outstanding.
3.03. Capitalization of Commercial Bank.
(a) The authorized capital of Commercial Bank consists solely of
1,188,000 shares of common stock, of which 1,188,000 are issued and
outstanding. All outstanding shares of Commercial Bank are owned beneficially
and of record by ComBanc. Such shares have been duly authorized and are
validly issued, fully paid and non-assessable, were not issued in violation of
the preemptive rights of any person, and have been issued in compliance in all
material respects with all applicable federal and state securities laws.
(b) As of the date of this Agreement, there are no options,
warrants, calls, rights, commitments or agreements of any character to which
Commercial Bank is a party or by which it is bound, obligating Commercial Bank
to issue, deliver or sell, or cause to be issued, delivered or sold, any
additional shares of Commercial Bank or obligating Commercial Bank to grant,
extend or enter into any such option, warrant, call, right, commitment or
agreement. As of the date of this Agreement, there are no outstanding
contractual obligations of Commercial Bank to repurchase, redeem or otherwise
acquire any shares of Commercial Bank.
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(c) Commercial Bank has not (A) issued or permitted to be issued any
shares of Commercial Bank, or securities exercisable for or convertible into
shares of Commercial Bank; (B) repurchased, redeemed or otherwise acquired,
directly or indirectly any shares of Commercial Bank; or (C) declared, set
aside, made or paid to the shareholders of Commercial Bank dividends or other
distributions on the outstanding shares of Commercial Bank.
(d) No bonds, debentures, notes or other indebtedness of Commercial Bank
having the right to vote on any matters on which Commercial Bank shareholders
may vote are issued or outstanding.
3.04. Corporate Proceedings.
(a) This Agreement has been (i) duly executed and delivered by ComBanc
and Commercial Bank, (ii) approved by the boards of directors of ComBanc and
Commercial Bank and (iii) adopted by ComBanc as the sole shareholder of
Commercial Bank.
(b) Subject to the adoption of this Agreement by a majority of the issued
and outstanding ComBanc Shares at a meeting of the ComBanc stockholders (the
"ComBanc Meeting") and to the filing of all requisite applications with
Regulatory Authorities and the receipt of all requisite regulatory approvals,
ComBanc and Commercial Bank have all requisite corporate power and authority
to enter into this Agreement and to perform all of their obligations
hereunder.
3.05. Authorization. This Agreement has been duly executed and delivered
by each of ComBanc and Commercial Bank, and assuming the due authorization,
execution and delivery by FDEF and First Federal, constitutes a valid and
binding obligation of each of ComBanc and Commercial Bank, enforceable against
each of them in accordance with its terms, except as such enforceability may
be limited by bankruptcy, insolvency, reorganization, moratorium, fraudulent
conveyance and other similar laws relating to or affecting the enforcement of
creditors' rights generally, by general equitable principles (regardless of
whether enforceability is considered in a proceeding in equity or at law) and
by an implied covenant of good faith and fair dealing and except to the extent
such enforceability may be limited by laws relating to safety and soundness of
insured depository institutions as set forth in 12 U.S.C. {section} 1818(b) or
by appointment of a conservator by the FDIC. Each of ComBanc and Commercial
Bank has the right, power, authority and capacity to execute and deliver this
Agreement and, subject to the required adoption of this Agreement by the
ComBanc stockholders, the obtaining of appropriate approvals by Regulatory
Authorities and Governmental Authorities and the expiration of applicable
regulatory waiting periods, to perform its obligations under this Agreement.
3.06. Financial Statements of ComBanc. Except as set forth in Section 3.06
of the ComBanc Disclosure Schedule, the audited consolidated financial
statements of ComBanc, consisting of consolidated statements of financial
condition as of December 31, 2003, 2002 and 2001, and the related consolidated
statements of earnings, shareholders' equity and cash flows for the three
years then ended, including the related notes and the reports thereon of BKD,
LLP, and the unaudited interim consolidated statements of ComBanc, consisting
of consolidated statements of financial condition as of June 30, 2004 (the
"ComBanc Balance Sheet Date"), the related unaudited consolidated statements
of earnings, cash flows, including the related notes thereto, for the six
months ended June 30, 2004, of ComBanc (collectively, all of such audited and
unaudited consolidated financial statements are referred to as the "ComBanc
Financial Statements"), copies of which have recently been provided to FDEF
and First Federal, have been prepared in accordance with United States
generally accepted accounting principles ("GAAP") applied on a consistent
basis during the periods involved (except as may be indicated in the notes
thereto) and present fairly, in all material respects, the consolidated
financial condition, earnings and cash flows of ComBanc and Commercial Bank
for the periods then ended.
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3.07. SEC Filings. ComBanc has filed all reports and proxy materials
required to be filed by it with the SEC pursuant to the Securities Exchange
Act of 0000 (xxx "Xxxxxxxx Xxx"). All such filings, at the time of filing,
complied in all material respects as to form and included all exhibits
required to be filed under the applicable rules of the SEC. None of such
documents, when filed, contained any untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under
which they were made, not misleading.
3.08. Absence of Undisclosed Liabilities. Except as set forth in the
ComBanc Financial Statements or in Section 3.08 of the ComBanc Disclosure
Schedule, ComBanc and Commercial Bank have no liabilities or obligations
(whether accrued, absolute, contingent or otherwise) as of the date hereof,
other than liabilities and obligations that individually or in the aggregate
could not reasonably be expected to have a material adverse effect on ComBanc
or Commercial Bank. Except as set forth in Section 3.08 of the ComBanc
Disclosure Schedule, all debts, liabilities, guarantees and obligations of
ComBanc and Commercial Bank incurred since the ComBanc Balance Sheet Date have
been incurred in the ordinary course of business and are usual and normal in
amount both individually and in the aggregate. Except as disclosed in Section
3.08 of the ComBanc Disclosure Schedule, neither ComBanc nor Commercial Bank
is in default or breach of any material agreement to which ComBanc or
Commercial Bank is a party other than any such breaches or defaults that
individually or in the aggregate would not reasonably be expected to have a
material adverse effect on ComBanc or Commercial Bank. To the knowledge of
ComBanc and Commercial Bank, no other party to any material agreement to which
ComBanc or Commercial Bank is a party is in default or breach of such
agreement, which breach or default would reasonably be expected to have a
material adverse effect on ComBanc or Commercial Bank.
3.09. Absence of Changes. Except as set forth in Section 3.09 of the
ComBanc Disclosure Schedule, since the ComBanc Balance Sheet Date there has
not been any material adverse change in the business, operations, assets or
financial condition of ComBanc and Commercial Bank taken as a whole.
3.10. Loans. Except for such insufficiencies as would not reasonably be
expected to have a material adverse effect on ComBanc or Commercial Bank, the
documentation ("Loan Documentation") governing or relating to the loan and
credit-related assets ("Loan Assets") included in the loan portfolio of
Commercial Bank is legally sufficient for the purposes intended thereby and
creates enforceable rights of Commercial Bank in accordance with the terms of
such Loan Documentation, subject to applicable bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance and other similar laws
relating to or affecting the enforcement of creditors' rights generally. All
loans and extensions of credit that have been made by Commercial Bank comply
in all material respects with applicable regulatory limitations and
procedures. Except as set forth in Section 3.10 of the ComBanc Disclosure
Schedule, no debtor under any of the Loan Documentation has asserted any claim
or defense with respect to the subject matter thereof. Except as set forth in
Section 3.10 of the ComBanc Disclosure Schedule, neither ComBanc nor
Commercial Bank is a party to a loan, including any loan guaranty, with any
director, executive officer or 5% shareholder of ComBanc or Commercial Bank,
or any person, corporation or enterprise controlling, controlled by or under
common control with either ComBanc or Commercial Bank.
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3.11. Allowance for Loan Losses. Except as set forth in Section 3.11 of
the ComBanc Disclosure Schedule, there is no loan which is reflected as an
asset in the ComBanc Financial Statements that (a) is 90 days or more
delinquent, (b) has been classified as "substandard," "doubtful" or "loss," or
(c) has been designated as "special mention." ComBanc's allowance for loan
losses has been determined in accordance with GAAP and in accordance with all
rules and regulations applicable to ComBanc and Commercial Bank and is
adequate to provide for reasonably anticipated losses on outstanding loans.
3.12. Reports and Records. ComBanc and Commercial Bank have filed all
reports and maintained all records required to be filed or maintained by them
under the rules and regulations of the Federal Reserve, the ODFI and the FDIC.
All such documents and reports complied in all material respects with
applicable requirements of law and rules and regulations in effect at the time
such documents and reports were filed and contained in all material respects
the information required to be stated therein. None of such documents or
reports, when filed, contained any untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under
which they were made, not misleading.
3.13. Taxes.
(a) Except as set forth in Section 3.13(a) of the ComBanc Disclosure
Schedule, ComBanc and Commercial Bank have timely filed all returns,
statements, reports and forms (including, without limitation, elections,
declarations, disclosures, schedules, estimates and information returns)
(collectively, the "Tax Returns") with respect to all federal, state, local
and foreign income, gross income, gross receipts, gains, premium, sales, use,
ad valorem, transfer, franchise, profits, withholding, payroll, employment,
excise, severance, stamp, occupancy, license, lease, environmental, customs,
duties, property, windfall profits and all other taxes (including, without
limitation, any interest, penalties or additions to tax with respect thereto,
individually a "Tax," and collectively, "Taxes") required to be filed with the
appropriate tax authority. Such Tax Returns were true, correct and complete in
all material respects. ComBanc and Commercial Bank have paid and discharged
all Taxes due (whether reflected on such Tax Returns or otherwise), other than
such Taxes that are adequately accrued as shown on the ComBanc Financial
Statements or have arisen in the ordinary course of business since the ComBanc
Balance Sheet Date.
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(b) Except as set forth in Section 3.13(b) of the ComBanc Disclosure
Schedule, neither the Internal Revenue Service (the "IRS") nor any other
taxing agency or authority, domestic or foreign, has asserted, is now
asserting or, to the knowledge of ComBanc or Commercial Bank, is threatening
to assert against ComBanc or Commercial Bank any deficiency or claim for
additional Taxes. There are no unexpired waivers by ComBanc or Commercial Bank
of any statute of limitations with respect to Taxes. The accruals and reserves
for Taxes reflected in the ComBanc Financial Statements are adequate in all
material respects for the periods covered. ComBanc and Commercial Bank have
withheld or collected and paid over to the appropriate Governmental
Authorities or are properly holding for such payment all Taxes required by law
to be withheld or collected. There are no liens for Taxes upon the assets of
ComBanc or Commercial Bank, other than liens for current Taxes not yet due and
payable. Neither ComBanc nor Commercial Bank has agreed to make, or is
required to make, any adjustment under Section 481(a) of the Code.
(c) Except as set forth in Section 3.13(c) of the ComBanc Disclosure
Schedule, neither ComBanc nor Commercial Bank is a party to any agreement,
contract, arrangement or plan that has resulted, or could result, individually
or in the aggregate, in the payment of "excess parachute payments" within the
meaning of Section 280G of the Code.
(d) Neither ComBanc nor Commercial Bank (i) has ever been a member of an
affiliated group of corporations, within the meaning of Section 1504 of the
Code, other than an affiliated group of which ComBanc is or was the common
parent corporation, or (ii) has any liability for the Taxes of any other
person or entity under Treasury Department Regulation Section 1.1502-6 (or any
similar provision of state, local or foreign law), as a transferee or
successor, by contract or otherwise.
(e) No Tax is required to be withheld pursuant to Section 1445 of the
Code as a result of the transactions contemplated by this Agreement.
3.14. Property and Title.
(a) Section 3.14(a) of the ComBanc Disclosure Schedule lists and
describes all real property, and any leasehold interest in real property,
owned or held by ComBanc or Commercial Bank (collectively, the "ComBanc Real
Properties"). Copies of all leases of ComBanc Real Properties to which ComBanc
or Commercial Bank is a party have been provided to FDEF. Such leasehold
interests have not been assigned or subleased. All ComBanc Real Properties
which are owned by ComBanc or Commercial Bank are free and clear of all
mortgages, liens, security interests, defects, encumbrances, easements,
restrictions, reservations, conditions, covenants, agreements, encroachments,
rights of way and zoning laws, except (i) those set forth in Section 3.14(a)
of the ComBanc Disclosure Schedule; (ii) easements, restrictions,
reservations, conditions, covenants, rights of way, zoning laws and other
defects and irregularities in title and encumbrances which do not materially
impair the use thereof for the purposes for which they are held; and (iii)
liens for current Taxes not yet due and payable.
(b) ComBanc and Commercial Bank own, and are in rightful possession of,
and have good title to, all of the other assets indicated in the ComBanc
Financial Statements as being owned by ComBanc or Commercial Bank, free and
clear of any charge, mortgage, pledge, security interest, hypothecation,
restriction, claim, option, lien, encumbrance or interest of any persons
whatsoever except (a) those described in Section 3.14(b) of the ComBanc
Disclosure Schedule and (ii) those assets disposed of in the ordinary course
of business consistent with past practices.
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(c) The assets of ComBanc and Commercial Bank, taken as a whole, are
adequate to continue to conduct the businesses of ComBanc and Commercial Bank
as such businesses are presently being conducted.
3.15. Legal Proceedings. Except as set forth in Section 3.15 of the
ComBanc Disclosure Schedule and other than routine foreclosure and collection
matters where ComBanc or Commercial Bank are only plaintiffs, there are no
actions, suits, proceedings, claims or investigations pending or, to the
knowledge of ComBanc or Commercial Bank, threatened in any court, before any
governmental agency or instrumentality or in any arbitration proceeding
against or by ComBanc or Commercial Bank.
3.16. Compliance with Laws and Regulations.
(a) Except as set forth in Section 3.16(a) of the ComBanc Disclosure
Schedule, neither ComBanc, Commercial Bank nor their respective properties is
a party to or subject to any order, judgment, decree, agreement, memorandum of
understanding or similar arrangement with, or a commitment letter or similar
submission to, or extraordinary supervisory letter from, any court or federal
or state governmental agency or authority, including any such agency or
authority charged with the supervision or regulation of financial institutions
(or their holding companies) or issuers of securities (including, without
limitation, the Federal Reserve, the ODFI, the FDIC, and the SEC) or the
supervision or regulation of ComBanc or Commercial Bank (collectively, the
"Regulatory Authorities"). Neither ComBanc nor Commercial Bank has been
advised by any Regulatory Authority that such Regulatory Authority is
contemplating issuing or requesting (or is considering the appropriateness of
issuing or requesting) any new or additional order, judgment, decree,
agreement, memorandum of understanding, commitment letter, supervisory letter
or similar submission.
(b) Each of ComBanc and Commercial Bank has been in compliance with all
applicable federal, state, local and foreign statutes, laws, regulations,
ordinances, rules, judgments, orders or decrees applicable thereto or to the
employees conducting such business, including, without limitation, the Equal
Credit Opportunity Act, as amended, the Fair Housing Act, as amended, the
Federal Community Reinvestment Act, as amended, the Home Mortgage Disclosure
Act, as amended, and all other applicable fair lending laws and other laws
relating to discriminatory business practices, except for failures to be in
compliance which, individually or in the aggregate, have not had or would not
reasonably be expected to have a material adverse effect on ComBanc or
Commercial Bank.
(c) Each of ComBanc and Commercial Bank has all permits, licenses,
authorizations, orders and approvals of, and has made all filings,
applications and registrations with, each Regulatory Authority and
administrative agency or commission or other federal, state or local
government authority or instrumentality (each, a "Governmental Authority")
that is required in order to permit it to own or lease its properties and to
conduct its business as presently conducted, except where the failure to
obtain any of the foregoing or to make any such filing, application or
registration has not had or would not reasonably be expected to have a
material adverse effect on ComBanc or Commercial Bank; and all such permits,
licenses, certificates of authority, orders and approvals are in full force
and effect and no suspension or cancellation of any of them has been
threatened in writing.
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(d) The savings accounts and deposits of Commercial Bank are insured up
to applicable limits by the FDIC in accordance with the Federal Deposit
Insurance Act, and Commercial Bank has paid all assessments and filed all
reports required by the Federal Deposit Insurance Act.
3.17. No Conflict. Except as set forth in the ComBanc Disclosure
Schedule, subject to the required adoption of this Agreement by the
stockholders of ComBanc, receipt of the required approvals of Governmental and
Regulatory Authorities, expiration of applicable regulatory waiting periods,
and required filings under federal and state securities laws, the execution,
delivery and performance of this Agreement, and the consummation of the
transactions contemplated hereby, by ComBanc and Commercial Bank does not and
will not (a) conflict with, or result in a violation of, or result in the
breach of or a default (or which with notice or lapse of time would result in
a default) under, any provision of: (i) any federal, state or local law,
regulation, ordinance, order, rule or administrative ruling of any
Governmental Authority applicable to ComBanc or Commercial Bank or any of
their respective properties; (ii) the certificate of incorporation or bylaws
of ComBanc, or the articles of incorporation, code of regulations or other
governing instruments of Commercial Bank; (iii) any material agreement,
indenture or instrument to which ComBanc or Commercial Bank is a party or by
which either of their properties or assets may be bound; or (iv) any order,
judgment, writ, injunction or decree of any court, arbitration panel or any
Governmental Authority applicable to ComBanc or Commercial Bank; (b) result in
the creation or acceleration of any security interest, mortgage, option,
claim, lien, charge or encumbrance upon or interest in any property of ComBanc
or Commercial Bank; or (c) violate the terms or conditions of, or result in
the cancellation, modification, revocation or suspension of, any material
license, approval, certificate, permit or authorization held by ComBanc or
Commercial Bank.
3.18. Brokers, Finders and Others. Except for $266,000 in aggregate fees
and expenses that are payable to Xxxxx, Xxxxxxxx and Xxxxx, Inc. ("ComBanc's
Financial Advisor") and the ordinary and customary legal and accounting fees,
there are no fees or commissions of any sort whatsoever claimed by, or payable
by ComBanc or Commercial Bank to, any broker, finder, intermediary, attorney,
accountant or any other similar person in connection with effecting this
Agreement or the transactions contemplated hereby.
3.19. Employment Agreements. Neither ComBanc nor Commercial Bank is a
party to any employment, change in control, severance or consulting agreement.
Neither ComBanc nor Commercial Bank is a party to, bound by or negotiating,
any collective bargaining agreement, nor are any of their respective employees
represented by any labor union or similar organization. Each of ComBanc and
Commercial Bank is in compliance with all applicable laws respecting
employment and employment practices, terms and conditions of employment and
wages and hours other than with respect to any noncompliance that individually
or in the aggregate would not reasonably be expected to have a material
adverse effect on ComBanc or Commercial Bank. Neither ComBanc nor Commercial
Bank has engaged in any unfair labor practice, other than practices that
individually or in the aggregate would not reasonably be expected to have a
material adverse effect on ComBanc or Commercial Bank.
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3.20. Employee Benefit Plans.
(a) Section 3.20(a) of the ComBanc Disclosure Schedule contains a
complete and accurate list of all bonus, incentive, deferred compensation,
pension (including, without limitation, Pension Plans defined below),
retirement, profit-sharing, thrift, savings, employee stock ownership, stock
bonus, stock purchase, restricted stock, stock option, severance, welfare
(including, without limitation, "welfare plans" within the meaning of Section
3(1) of the Employee Retirement Income Security Act of 1974, as amended
("ERISA")), fringe benefit plans, employment or severance agreements and all
similar practices, policies and arrangements maintained or contributed to
(currently or within the last six years) by (i) ComBanc or Commercial Bank and
in which any employee or former employee (the "Employees"), consultant or
former consultant (the "Consultants"), officer or former officer (the
"Officers"), or director or former director (the "Directors") of ComBanc or
Commercial Bank participates or to which any such Employees, Consultants,
Officers or Directors are parties or (ii) any ERISA Affiliate (as defined
below) (collectively, the "Compensation and Benefit Plans"). Neither ComBanc
nor Commercial Bank has any commitment to create any additional Compensation
and Benefit Plan or to modify or change any existing Compensation and Benefit
Plan, except to the extent required by law.
(b) Each Compensation and Benefit Plan has been operated and administered
substantially in accordance with its terms and with applicable law, including,
but not limited to, ERISA, the Code, the Securities Act of 1933, as amended
(the "Securities Act"), the Exchange Act, the Age Discrimination in Employment
Act, or any regulations or rules promulgated thereunder, and all filings,
disclosures and notices required by ERISA, the Code, the Securities Act, the
Exchange Act, the Age Discrimination in Employment Act and any other
applicable law have been timely made. The prototype plan sponsor of the
Compensation and Benefit Plan which is an "employee pension benefit plan"
within the meaning of Section 3(2) of ERISA (a "Pension Plan") and which is
intended to be qualified under Section 401(a) of the Code has received a
favorable opinion letter from the IRS and neither ComBanc nor Commercial Bank
(i) has obtained a determination letter from the IRS or (ii) is aware of any
circumstances likely to result in revocation of such prototype plan sponsor's
favorable opinion letter. There is no material pending or, to the knowledge of
ComBanc or Commercial Bank, threatened, legal action, suit or claim relating
to the Compensation and Benefit Plans other than routine claims for benefits
thereunder. Neither ComBanc nor Commercial Bank has engaged in a transaction,
or omitted to take any action, with respect to any Compensation and Benefit
Plan that would reasonably be expected to subject ComBanc or Commercial Bank
to a tax or penalty imposed by either Section 4975 of the Code or Section 502
of ERISA, assuming for purposes of Section 4975 of the Code that the taxable
period of any such transaction expired as of the date hereof.
(c) Except as set forth in Section 3.20(c) of the ComBanc Disclosure
Schedule, (i) none of ComBanc or Commercial Bank, or any entity which is
considered one employer with ComBanc or Commercial Bank under Section
4001(a)(14) of ERISA or Section 414(b), (c) or (m) of the Code (an "ERISA
Affiliate"), has ever sponsored, maintained or been obligated to contribute to
any Pension Plan subject to either Title IV of ERISA or the funding
requirements of Section 412 of the Code; (ii) none of ComBanc or Commercial
Bank, or any ERISA Affiliate, has contributed, or has been obligated to
contribute, to a multiemployer plan under Subtitle E of Title IV of ERISA (as
defined in ERISA Sections 3(37)(A) and 4001(a)(3)) at any time since September
26, 1980; and (iii) there is no pending investigation or enforcement action by
the PBGC, the Department of Labor, the IRS or any other Governmental Authority
with respect to any Compensation and Benefit Plan.
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(d) Except as set forth in Section 3.20(d) of the ComBanc Disclosure
Schedule, all contributions required to be made under the terms of any
Compensation and Benefit Plan or ERISA Affiliate plan or any employee benefit
arrangements under any collective bargaining agreement to which ComBanc or
Commercial Bank is a party have been timely made or have been reflected on the
ComBanc Financial Statements.
(e) Except as disclosed in Section 3.20(e) of the ComBanc Disclosure
Schedule, neither ComBanc nor Commercial Bank has any obligations to provide
retiree health and retiree life insurance or other retiree death benefits
under any Compensation and Benefit Plan, other than benefits mandated by
Section 4980B of the Code.
(f) ComBanc and Commercial Bank do not maintain any foreign Compensation
and Benefit Plans.
(g) With respect to each Compensation and Benefit Plan, if applicable,
ComBanc or Commercial Bank has provided to FDEF, true and complete copies of:
(i) Compensation and Benefit Plan documents and all subsequent amendments
thereto; (ii) trust instruments and insurance contracts and all subsequent
amendments thereto; (iii) the most recent annual returns (Forms 5500) and
financial statements; (iv) the most recent summary plan descriptions and all
subsequent summaries of material modifications; (v) the most recent
determination letter issued by the IRS with respect to each Compensation and
Benefit Plan that is intended to comply with Code {section} 401(a); and (vi)
any Form 5310, Form 5310A, Form 5300 or Form 5330 filed with the IRS within
the twelve months ending immediately before the date hereof.
(h) Except as disclosed in Section 3.20(h) of the ComBanc Disclosure
Schedule, the consummation of the transactions contemplated by this Agreement
would not, directly or indirectly (including, without limitation, as a result
of any termination of employment prior to or following the Effective Time),
reasonably be expected to (i) entitle any Employee, Officer, Consultant or
Director to any payment (including severance pay or similar compensation) or
any increase in compensation, (ii) result in the vesting or acceleration of
any benefits under any Compensation and Benefit Plan or (iii) result in any
material increase in benefits payable under any Compensation and Benefit Plan.
3.21. Insurance. ComBanc and Commercial Bank are insured with reputable
insurers against such risks and in such amounts as the management of ComBanc
and Commercial Bank reasonably have determined to be prudent in accordance
with industry practices. Section 3.21 of the ComBanc Disclosure Schedule lists
all of the insurance policies, binders or bonds maintained by ComBanc or
Commercial Bank and a description of all claims filed by ComBanc or Commercial
Bank against the insurers of ComBanc and Commercial Bank since January 1,
2001. All such insurance policies are in full force and effect, neither
ComBanc nor Commercial Bank is in material default thereunder and all claims
thereunder have been filed in due and timely fashion.
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3.22. Governmental and Third-Party Proceedings. Except as set forth in
Section 3.22 of the ComBanc Disclosure Schedule, no consent, approval,
authorization of, or registration, declaration or filing with, any court,
Governmental Authority, Regulatory Authority or any other third party is
required to be made or obtained by ComBanc or Commercial Bank in connection
with the execution, delivery or performance by ComBanc of this Agreement or
the consummation by ComBanc of the transactions contemplated hereby, except
for (a) filings of applications and notices, as applicable, with and the
approval of certain federal and state banking authorities, (b) the filing of
the appropriate certificates of merger with the Secretaries of State of Ohio
and Delaware pursuant to the OGCL and DGCL, (c) the adoption of this Agreement
by the ComBanc stockholders, and (d) the filing with the SEC of the
Proxy/Prospectus (as defined in Section 7.03(a)).
3.23. Contracts. Section 3.23 of the ComBanc Disclosure Schedule
describes all contracts, whether written or oral, in existence as of the date
of this Agreement (other than those which have been performed completely or
which may be terminated without penalty and upon no more than 30 days' prior
notice) which involve the payment by or to ComBanc or Commercial Bank of more
than $10,000 in connection with the purchase of property or goods or the
performance of services. True, complete and correct copies of all such
contracts have been delivered to FDEF. Neither ComBanc nor Commercial Bank,
nor, to the knowledge of ComBanc or Commercial Bank, any other party thereto,
is in default under any such contract, agreement, commitment, arrangement or
other instrument to which it is a party, by which its respective assets,
business or operations may be bound or affected in any way, or under which it
or its respective assets, business or operations receive benefits, and there
has not occurred any event that, with the lapse of time or the giving of
notice or both, would constitute such a default.
3.24. Environmental Matters. Except as otherwise disclosed in Section
3.24 of the ComBanc Disclosure Schedule: neither the conduct nor operation of
ComBanc or Commercial Bank nor any condition of any property presently or
previously owned, leased or operated by any of them (including, without
limitation, in a fiduciary or agency capacity), or on which any of them holds
a lien, violates or violated Environmental Laws and to ComBanc's knowledge, no
condition has existed or event has occurred with respect to any of them or any
such property that, with notice or the passage of time, or both, is reasonably
likely to result in liability under Environmental Laws. Except as otherwise
disclosed in Section 3.24 of the ComBanc Disclosure Schedule, to ComBanc's
knowledge, neither ComBanc nor Commercial Bank has received any notice from
any person or entity that ComBanc or Commercial Bank or the operation or
condition of any property ever owned, leased, operated, or held as collateral
or in a fiduciary capacity by any of them are or were in violation of or
otherwise alleged to have liability under any Environmental Law, including,
but not limited to, responsibility (or potential responsibility) for the
cleanup or other remediation of any pollutants, contaminants, or hazardous or
toxics wastes, substances or materials at, on, beneath, or originating from
any such property. Neither ComBanc nor Commercial Bank has knowledge that (i)
any of the ComBanc Real Properties or improvements thereon or any of the real
properties in respect of which Commercial Bank has foreclosed or holds a
mortgage or mortgages (hereinafter referred to as the "Commercial Bank Real
Estate Collateral") or improvements thereon has been used for the treatment,
storage or disposal of Hazardous Substances or has been contaminated by
Hazardous Substances, (ii) any of the business operations of ComBanc or
Commercial Bank have contaminated lands, waters or other property of others
with Hazardous Substances, except routine, office-generated solid waste, or
(iii) any of the ComBanc Real Properties or improvements thereon, or the
Commercial Bank Real Estate Collateral or improvements thereon have in the
past or presently contain underground storage tanks, friable asbestos
materials or PCB-containing equipment.
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For purposes of this Agreement, (a) "Environmental Law" means all
applicable local, state and federal environmental, health and safety laws and
regulations, including, without limitation, the Resource Conservation and
Recovery Act, the Comprehensive Environmental Response, Compensation, and
Liability Act of 1980, as amended ("CERCLA"), the Clean Water Act, the Federal
Clean Air Act, and the Occupational Safety and Health Act, each as amended,
regulations promulgated thereunder, and state counterparts, and (b) "Hazardous
Substances" means, at any time: (i) any "hazardous substance" as defined in
{section}101(14) of CERCLA or regulations promulgated thereunder; (ii) any
"solid waste," "hazardous waste," or "infectious waste," as such terms are
defined in any other Environmental Law as of the date of this Agreement; and
(iii) friable asbestos, urea-formaldehyde, polychlorinated biphenyls ("PCBs"),
nuclear fuel or material, chemical waste, radioactive material, explosives,
known carcinogens, petroleum products and by-products, and other dangerous,
toxic or hazardous pollutants, contaminants, chemicals, materials or
substances listed or identified in, or regulated by, any Environmental Law.
3.25. ComBanc Information. True and complete copies of all documents
listed in the ComBanc Disclosure Schedule have been made available or provided
to FDEF. The books of account, stock record books and other financial and
corporate records of ComBanc and Commercial Bank, all of which have been made
available to FDEF, are complete and correct in all material respects,
including the maintenance of a system of internal accounting controls
sufficient to provide reasonable assurance that transactions are executed with
its management's authorizations and such books and records are accurately
reflected in all material respects in the ComBanc Financial Statements, except
for portions of records of various meetings that relate specifically to the
consideration of the transactions contemplated by this Agreement.
3.26. CRA Compliance. Neither ComBanc nor Commercial Bank has received
any notice of non-compliance with the applicable provisions of the Community
Reinvestment Act ("CRA") and the regulations promulgated thereunder, and
Commercial Bank received a CRA rating of "satisfactory" or better on each of
its last three examinations. Neither ComBanc nor Commercial Bank knows of any
fact or circumstance or set of facts or circumstances which would be
reasonably likely to cause ComBanc or Commercial Bank to receive any notice of
non-compliance with such provisions or cause the CRA rating of ComBanc or
Commercial Bank to fall below satisfactory.
3.27. Ownership of FDEF Shares. As of the date hereof, except as
otherwise disclosed in Section 3.27 of the ComBanc Disclosure Schedule,
neither ComBanc nor Commercial Bank nor, to the knowledge of ComBanc and
Commercial Bank, any of their affiliates (as such term is defined under the
Exchange Act), (a) beneficially owns, directly or indirectly, or (b) is a
party to any agreement, arrangement or understanding for the purpose of
acquiring, holding, voting or disposing of, any FDEF Shares.
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3.28. Fairness Opinion. The Board of Directors of ComBanc has received
the opinion of the ComBanc's Financial Advisor dated the date of this
Agreement to the effect that the consideration to be received by the ComBanc
stockholders in the Corporate Merger is fair, from a financial point of view,
to the ComBanc stockholders.
3.29. Real Property Interest. ComBanc Shares are not a U.S. real property
interest within the meaning of Treasury Department Regulation Sections
1.897-2(b)(1) and (h).
3.30. Internal Controls.
(a) The Chief Executive Officer and Vice President-Controller of ComBanc
have evaluated the effectiveness of ComBanc's disclosure controls and
procedures as of the end of the periods covered by the ComBanc Financial
Statements and as of the date of this Agreement. Section 3.30(a) of the
ComBanc Disclosure Schedule presents the conclusions of the Chief Executive
Officer and Vice President-Controller of ComBanc about the effectiveness of
such disclosure controls and procedures as of the end of the periods covered
by the ComBanc Financial Statements. The Chief Executive Officer and Vice
President-Controller of ComBanc have disclosed to ComBanc's auditors and the
audit committee of ComBanc's board of directors and to FDEF: (i) all
significant deficiencies and material weaknesses in the design or operation of
the disclosure controls and procedures which are reasonably likely to
adversely affect ComBanc's ability to record, process, summarize and report
financial information and (ii) any fraud, whether or not material, that
involves management or other employees who have a significant role in
ComBanc's disclosure controls and procedures.
(b) The Chief Executive Officer and Vice President-Controller of ComBanc
have evaluated the effectiveness of ComBanc's internal control over financial
reporting as of the end of the periods covered by the ComBanc Financial
Statements and as of the date of this Agreement. Section 3.30(b) of the
ComBanc Disclosure Schedule presents the conclusions of the Chief Executive
Officer and Vice President-Controller of ComBanc about the effectiveness of
such internal control as of the end of the periods covered by the ComBanc
Financial Statements. The Chief Executive Officer and Vice President-
Controller of ComBanc have disclosed to ComBanc's auditors and the audit
committee of ComBanc's board of directors and to FDEF: (i) all significant
deficiencies and material weaknesses in the design or operation of internal
control over financial reporting which are reasonably likely to adversely
affect ComBanc's ability to record, process, summarize and report financial
information and (ii) any fraud, whether or not material, that involves
management or other employees who have a significant role in ComBanc's
internal control over financial reporting. ComBanc has provided to FDEF all
documentation related to ComBanc's internal control over financial reporting.
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ARTICLE FOUR
REPRESENTATIONS AND WARRANTIES OF FDEF AND FIRST FEDERAL
FDEF and First Federal hereby represent and warrant to ComBanc and
Commercial Bank that:
4.01. Corporate Status.
(a) FDEF is an Ohio corporation and a unitary savings and loan holding
company registered under the Home Owners' Loan Act, as amended (the "HOLA").
FDEF is duly organized, validly existing and in good standing under the laws
of the State of Ohio and has the full corporate power and authority to own its
property, to carry on its business as presently conducted and to enter into
and, subject to the required obtaining of appropriate approvals of
Governmental and Regulatory Authorities, perform its obligations under this
Agreement and consummate the transactions contemplated by this Agreement, and
is duly qualified or licensed to do business and is in good standing in each
jurisdiction in which the nature of its business or the ownership, leasing or
operation of its properties makes such qualification or licensing necessary,
other than where the failure to be so organized, existing, qualified or
licensed or in good standing individually or in the aggregate could not
reasonably be expected to have a material adverse effect on FDEF. FDEF has
made available to ComBanc true and complete copies of its articles of
incorporation and code of regulations as amended to the date of this
Agreement.
(b) First Federal is a federal savings bank and is regulated by the
Office of Thrift Supervision ("OTS") and the FDIC. First Federal is duly
organized, validly existing and in good standing under the laws of the United
States and has the full corporate power and authority to own its property and
to carry on its business as presently conducted. First Federal is not
qualified to do business in any other jurisdiction or required to be qualified
to do business in any other jurisdiction except where the failure to be so
organized, existing, qualified or licensed or in good standing individually or
in the aggregate could not reasonably be expected to have a material adverse
effect on First Federal. First Federal has made available to ComBanc true and
complete copies of its charter and bylaws as amended to the date of this
Agreement.
4.02. Corporate Proceedings. All corporate proceedings of FDEF and First
Federal necessary to authorize the execution, delivery and performance of this
Agreement, and the consummation of the transactions contemplated by this
Agreement, have been duly and validly taken. This Agreement has been duly
executed and delivered by each of FDEF and First Federal. No vote of FDEF's
shareholders is required to be obtained in connection with the consummation of
the transactions contemplated hereby unless the number of FDEF Shares to be
issued pursuant to the consummation of the Corporate Merger will entitle the
former ComBanc stockholders to exercise one-sixth or more of the voting power
of FDEF immediately after the Corporate Merger.
4.03. Capitalization of FDEF.
(a) As of the date of this Agreement, the authorized capital stock of
FDEF consists only of (i) 25,000,000 shares of common stock, par value $.01
per share, of which 6,317,885 shares are issued and outstanding, and 4,663,217
shares are held in treasury, and (ii) 5,000,000 preferred shares, par value
$.01 per share, none of which are outstanding. The outstanding FDEF Shares
have been duly authorized and are validly issued, fully paid and
non-assessable, and were not issued in violation of the preemptive rights of
any person. As of the date of this Agreement, 662,932 FDEF Shares are
reserved for issuance upon the exercise of outstanding stock options (the
"FDEF Stock Options") granted under FDEF's stock option plans (the "FDEF Stock
Option Plans") and 13,253 FDEF Shares are available for future grants of stock
options under the FDEF Stock Option Plans. As of the date of this Agreement,
except for the FDEF Stock Options, unvested FDEF Shares that have been awarded
under the 1996 Management Recognition Plan and Trust ("MRP"), and the shares
issuable to ComBanc's stockholders pursuant to this Agreement, FDEF has no
other commitment or obligation to issue, deliver or sell any FDEF Shares. As
of the date of this Agreement, there are no bonds, debentures, notes or other
indebtedness of FDEF, and no securities or other instruments or obligations of
FDEF, the value of which is in any way based upon or derived from any capital
or voting stock of FDEF, having the right to vote (or convertible into, or
exchangeable for, securities having the right to vote) on any matters on which
shareholders of FDEF may vote. Except as set forth above, as of the date of
this Agreement, there are no material contracts of any kind to which FDEF is a
party or by which FDEF is bound obligating FDEF to issue, deliver or sell, or
cause to be issued, delivered or sold, additional shares of capital stock of,
or other equity or voting interests in, or securities convertible into, or
exchangeable or exercisable for, shares of capital stock of, or other equity
or voting interests in, FDEF or obligating FDEF to issue, grant, extend or
enter into any such security, option, warrant, call, right or contract. As of
the date of this Agreement, there are no outstanding material contractual
obligations of FDEF to repurchase, redeem or otherwise acquire any shares of
capital stock of, or other equity or voting interests in, FDEF.
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(b) The FDEF Shares to be issued in exchange for ComBanc Shares in the
Corporate Merger, when issued in accordance with the terms of this Agree-
ment, will be duly authorized, validly issued, fully paid and non-assessable,
will not be subject to any preemptive or other statutory right of stockholders
and will be issued in compliance with applicable United States federal and
state securities laws.
4.04. Authorized and Effective Agreement. This Agreement has been duly
executed and delivered by each of FDEF and First Federal, and assuming the due
authorization, execution and delivery by each of ComBanc and Commercial Bank,
constitutes the legal, valid and binding obligation of each of FDEF and First
Federal, enforceable against them in accordance with its terms, except as the
same may be limited by bankruptcy, insolvency, reorganization, moratorium,
fraudulent conveyance and other similar laws relating to or affecting the
enforcement of creditors' rights generally, by general equitable principles
(regardless of whether enforceability is considered in a proceeding in equity
or at law) and by an implied covenant of good faith and fair dealing. Each of
FDEF and First Federal has the right, power, authority and capacity to execute
and deliver this Agreement and, subject to the obtaining of appropriate
approvals by Governmental and Regulatory Authorities and the expiration of
applicable regulatory waiting periods, and required filings under federal and
state securities laws, to perform its obligations under this Agreement.
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4.05. No Conflict. Subject to the receipt of the required approvals of
Governmental and Regulatory Authorities, the expiration of applicable
regulatory waiting periods and required filings under federal and state
securities laws, the execution, delivery and performance of this Agreement,
and the consummation of the transactions contemplated hereby, by FDEF and
First Federal do not and will not (a) conflict with, or result in a violation
of, or result in the breach of or a default (or which with notice or lapse of
time would result in a default) under, any provision of: (i) any federal,
state or local law, regulation, ordinance, order, rule or administrative
ruling of any Governmental Authority applicable to FDEF or any of its
properties; (ii) the articles of incorporation or code of regulations of FDEF
or the charter or bylaws of First Federal; (iii) any material agreement,
indenture or instrument to which FDEF or First Federal is a party or by which
it or its properties or assets may be bound; or (iv) any order, judgment,
writ, injunction or decree of any court, arbitration panel or any Governmental
Authority applicable to FDEF or First Federal other than, in the case of
clauses (i), (iii) and (iv) any such conflicts, violations, breaches or
defaults that individually or in the aggregate would not reasonably be
expected to have a material effect on FDEF on a consolidated basis; (b) result
in the creation or acceleration of any security interest, mortgage, option,
claim, lien, charge or encumbrance upon or interest in any property of FDEF or
First Federal, other than such security interests, mortgage, options, claims,
liens, charges or encumbrances that individually or in the aggregate would not
reasonably be expected to have a material adverse effect on FDEF on a
consolidated basis; or (c) violate the terms or conditions of, or result in
the cancellation, modification, revocation or suspension of, any material
license, approval, certificate, permit or authorization held by FDEF other
than such violations, cancellations, modifications, revocations or suspensions
that individually or in the aggregate would not reasonably be expected to have
a material effect on FDEF on a consolidated basis.
4.06. SEC Filings. FDEF has filed all reports and proxy materials
required to be filed by it with the SEC pursuant to the Exchange Act. All such
filings, at the time of filing, complied in all material respects as to form
and included all exhibits required to be filed under the applicable rules of
the SEC. None of such documents, when filed, contained any untrue statement of
a material fact or omitted to state a material fact required to be stated
therein or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading.
4.07. Financial Statements of FDEF and First Federal. FDEF and First
Federal have furnished to ComBanc and Commercial Bank (a) the audited
consolidated financial statements of FDEF consisting of consolidated balance
sheets as of December 31, 2003, 2002 and 2001, and the related consolidated
statements of income, changes in shareholders' equity and cash flows for the
three years ended December 31, 2003, including accompanying notes and the
report thereon of Ernst and Young LLP, and (b) the unaudited interim
consolidated statements of FDEF, consisting of consolidated statements of
financial condition as of June 30, 2004, the related unaudited consolidated
statements of earnings, shareholders' equity, and cash flows including the
related notes thereto for the six months ended June 30, 2004, of FDEF
(collectively, all of such audited and unaudited consolidated financial
statements are referred to as the "FDEF Financial Statements"). The FDEF
Financial Statements were prepared in conformity with GAAP applied on a
consistent basis and present fairly, in all material respects, the
consolidated financial condition of FDEF at the dates, and the consolidated
results of operations and cash flows for the periods, stated therein.
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4.08. Brokers, Finders and Others. Except for fees paid to Austin
Associates, LLC, there are no fees or commissions of any sort whatsoever
claimed by, or payable by FDEF to, any broker, finder, intermediary attorney,
accountant or any other similar person in connection with effecting this
Agreement or the transactions contemplated hereby, except for ordinary and
customary legal and accounting fees.
4.09. Governmental and Third-Party Proceedings. No consent, approval,
authorization of, or registration, declaration or filing with, any court,
Governmental or Regulatory Authority or any other third party is required to
be made or obtained by FDEF or First Federal in connection with the execution,
delivery or performance by FDEF or First Federal of this Agreement or the
consummation by FDEF of the transactions contemplated hereby, except for (a)
filings of applications or notices, as applicable, with and the approval of
certain federal and state banking authorities, (b) the filing of the
appropriate certificate of merger with the Secretaries of State of Ohio and
Delaware pursuant to the OGCL and DGCL, (c) the filing with the SEC of the
Registration Statement (as defined in Section 7.03 below) and such reports
under the Exchange Act as may be required in connection with this Agreement,
the Corporate Merger and the other transactions contemplated hereby, (d) any
filings required under the rules and regulations of The Nasdaq Stock Market,
Inc. ("Nasdaq"), and (e) such other consents, approvals, orders,
authorizations, registrations, declarations and filings, except for such
consents, approvals orders, authorizations, registrations, declarations and
filings, the failure of which to be obtained or made individually or in the
aggregate would not reasonably be expected to have a material effect on FDEF
on a consolidated basis.
4.10. Absence of Undisclosed Liabilities. Except as set forth in publicly
available documents filed by FDEF with the SEC prior to the date of this
Agreement (the "FDEF Filed SEC Documents") and in the FDEF Financial
Statements, and except as arising hereunder, FDEF has no liabilities or
obligations (whether accrued, absolute, contingent or otherwise) as of June
30, 2004, other than liabilities and obligations that individually or in the
aggregate would not reasonably be expected to have a material adverse effect
on FDEF. Except as set forth in the FDEF Filed SEC Documents, all debts,
liabilities, guarantees and obligations of FDEF and First Federal incurred
since June 30, 2004, have been incurred in the ordinary course of business and
are usual and normal in amount both individually and in the aggregate. Neither
FDEF nor First Federal is in default or breach of any material agreement to
which FDEF or First Federal is a party other than any such breaches or
defaults that individually or in the aggregate would not reasonably be
expected to have a material adverse effect on FDEF on a consolidated basis. To
the best knowledge of FDEF and First Federal, no other party to any material
agreement to which FDEF or First Federal is a party is in default or breach of
such agreement, which breach or default would reasonably be expected to have a
material adverse effect on FDEF on a consolidated basis.
4.11. Absence of Changes. Except (a) as set forth in the FDEF Filed SEC
Documents, (b) as otherwise publicly disclosed in press releases issued by
FDEF, or (c) in the ordinary course of business consistent with past practice,
since December 31, 2003, there has not been any material adverse change in the
business, operations, assets or financial condition of FDEF and First Federal
taken as a whole, and, to the knowledge of FDEF and First Federal, no fact or
condition exists that FDEF or First Federal believes will cause such a
material adverse change in the future.
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4.12. Legal Proceedings. Except as set forth in the FDEF Filed SEC
Documents, there are no actions, suits, proceedings, claims or investigations
pending or, to the knowledge of FDEF and First Federal, threatened in any
court, before any Governmental Authority or instrumentality or in any
arbitration proceeding (a) against FDEF or First Federal which, if adversely
determined against FDEF or First Federal, would have a material adverse effect
on FDEF on a consolidated basis; or (b) against or by FDEF or First Federal
which, if adversely determined against FDEF or First Federal, would prevent
the consummation of this Agreement or any of the transactions contemplated
hereby or declare the same to be unlawful or cause the rescission thereof.
4.13. Regulatory Matters. None of FDEF, First Federal or the respective
properties of FDEF and First Federal is a party to or subject to any order,
judgment, decree, agreement, memorandum of understanding or similar
arrangement with, or a commitment letter or similar submission to, or
supervisory letter from, any Regulatory Authorities. Neither FDEF nor First
Federal has been advised by any Regulatory Authority that such Regulatory
Authority is contemplating issuing or requesting (or is considering the
appropriateness of issuing or requesting) any such order, judgment, decree,
agreement, memorandum of understanding, commitment letter, supervisory letter
or similar submission.
4.14. Ownership of ComBanc Shares. Neither FDEF nor First Federal, nor to
the knowledge of FDEF, any of its affiliates or associates (as such terms are
defined under the Exchange Act), (a) beneficially owns, directly or indirectly
or (b) is a party to any agreement, arrangement or understanding for the
purpose of acquiring, holding, voting or disposing of, any ComBanc Shares.
ARTICLE FIVE
FURTHER COVENANTS OF COMBANC AND COMMERCIAL BANK
5.01. Operation of Business. ComBanc and Commercial Bank each covenant to
FDEF that, throughout the period from the date of this Agreement to and
including the Closing (as defined in Section 9.01), except as expressly
contemplated or permitted by this Agreement or to the extent that FDEF shall
otherwise consent in writing which consent shall not be unreasonably withheld
or delayed:
(a) ComBanc and Commercial Bank will conduct their respective businesses
only in the ordinary and usual course consistent with past practice, and
neither ComBanc nor Commercial Bank shall take any action that would be
inconsistent with any representation or warranty of ComBanc or Commercial Bank
set forth in this Agreement or which would cause a breach of any such
representation or warranty if made at or immediately following such action,
except as may be required by applicable law or regulation.
(b) Except as provided for by this Agreement or as otherwise approved
expressly in writing by FDEF, neither ComBanc nor Commercial Bank will:
(i) sell, transfer, mortgage, pledge or subject to any lien or
otherwise encumber any of the assets of ComBanc or Commercial Bank, tangible
or intangible, which are material, individually or in the aggregate, to
ComBanc or Commercial Bank except for securitization activities in the
ordinary course of business;
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(ii) make any capital expenditure or capital additions or
improvements which individually exceed $10,000 or in the aggregate exceed
$25,000;
(iii) become bound by, enter into, or perform any material contract,
commitment or transaction that would be reasonably likely to (A) have a
material adverse effect on ComBanc or Commercial Bank, (B) impair in any
material respect the ability of ComBanc or Commercial Bank to perform its
obligations under this Agreement or (C) prevent or materially delay the
consummation of the transactions contemplated by this Agreement or the Bank
Merger Agreement;
(iv) declare, pay or set aside for payment any dividends or make any
distributions on ComBanc shares;
(v) purchase, redeem, retire or otherwise acquire any ComBanc Shares;
(vi) issue any ComBanc Shares or grant any option or right to acquire
any of its capital shares;
(vii) amend or propose to amend any of the governing documents of
ComBanc or Commercial Bank;
(viii) reorganize or acquire all or any portion of the assets,
business, deposits or properties of any other entity other than in the
ordinary and usual course of business consistent with past practice (A) by way
of foreclosures or (B) by acquisitions of control in a bona fide fiduciary
capacity or in satisfaction of debts previously contracted in good faith;
(ix) enter into, establish, adopt or amend any pension, retirement,
stock option, stock purchase, savings, profit-sharing, deferred compensation,
consulting, bonus, group insurance or other employee benefit, incentive or
welfare contract, plan or arrangement, or any trust agreement (or similar
arrangement) related thereto, in respect of any Director, Officer or Employee
of ComBanc or Commercial Bank, or take any action to accelerate the vesting or
exercisability of stock options, restricted stock or other compensation or
benefits payable thereunder; provided, however, that ComBanc or Commercial
Bank may take such actions in order to satisfy either applicable law or
contractual obligations, including those arising under its benefit plans,
existing as of the date hereof and disclosed in the ComBanc Disclosure
Schedule, or regular annual renewals of insurance contracts;
(x) announce or pay any general wage or salary increase or bonus, or
enter into or amend or renew any employment, consulting, severance or similar
agreements or arrangements with any Officer, Director or Employee of ComBanc
or Commercial Bank, except, in each case, (i) as set forth in Section 5.01(x)
of the ComBanc Disclosure Schedule, (ii) for changes that are required by
applicable law or (iii) to satisfy contractual obligations existing as of the
date hereof that are disclosed in the ComBanc Disclosure Schedule;
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(xi) borrow or agree to borrow any funds, including but not limited
to repurchase transactions, or indirectly guarantee or agree to guarantee any
obligations of others;
(xii) implement or adopt any change in its accounting principles,
practices or methods, other than as may be required by GAAP;
(xiii) make or change any Tax election or Tax accounting method, file
any amended Tax Return, settle any Tax claim or assessment or consent to the
extension or waiver of any statute of limitations with respect to Taxes;
(xiv) originate or issue a commitment to originate any loan or note
in a principal amount of $100,000 or more or on an aggregate basis to one
borrower of $250,000 or more, or modify, renew, or release any collateral on
any existing loan the outstanding balance of which, including principal,
interest and fees, is $100,000 or more;
(xv) establish any new lending programs or make any changes in its
policies concerning which persons may approve loans;
(xvi) enter into any securities transactions or purchase or otherwise
acquire any investment security other than U.S. Government and U.S. agency
obligations;
(xvii) increase or decrease the rate of interest paid on time
deposits or certificates of deposits, except in a manner and pursuant to
policies consistent with past practices in relation to rates prevailing in
Commercial Bank's market;
(xviii) foreclose upon or otherwise take title to or
possession or control of any real property without first obtaining a Phase I
Environmental Report thereon which indicates that the property is free of
pollutants, contaminants or hazardous or toxic waste materials including
asbestos and petroleum products; provided, however, that Commercial Bank shall
not be required to obtain such a report with respect to single-family,
non-agriculture residential property of one acre or less to be foreclosed upon
unless it has reason to believe such property may contain any such pollutants,
contaminants, waste materials including asbestos or petroleum products;
(xx) purchase or otherwise acquire any interest in a loan held by a
third party; or
(xxi) enter into any agreement to do any of the foregoing.
(c) ComBanc and Commercial Bank shall use their commercially
reasonable efforts to maintain and keep their respective properties and
facilities in their present condition and working order, ordinary wear and
tear excepted.
(d) ComBanc and Commercial Bank shall perform all of their
obligations under all agreements relating to or affecting their respective
properties, rights and businesses.
(e) ComBanc and Commercial Bank shall use their commercially reasonable
efforts to maintain and preserve their respective business organizations
intact, to retain present key Employees and to maintain the respective
relationships of customers, suppliers and others having business relationships
with them.
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(f) ComBanc or Commercial Bank shall maintain insurance coverage with
reputable insurers, which in respect of amounts, premiums, types and risks
insured, were maintained by them at the ComBanc Balance Sheet Date, and upon
the renewal or termination of such insurance, ComBanc and Commercial Bank will
use their commercially reasonable efforts to renew or replace such insurance
coverage with reputable insurers, in respect of the amounts, premiums, types
and risks insured or maintained by them at the ComBanc Balance Sheet Date.
(g) ComBanc and Commercial Bank shall afford to FDEF and First Federal
and to their officers, employees, investment bankers, attorneys, accountants
and other advisors and representatives reasonable and prompt access during
normal business hours during the period prior to the Effective Time or the
termination of this Agreement to all their respective properties, assets,
books, contracts, commitments, directors, officers, employees, attorneys,
accountants, auditors, other advisors and representatives and records and,
during such period, ComBanc and Commercial Bank shall make available to FDEF
or First Federal on a prompt basis (i) a copy of each report, schedule, form,
statement and other document filed or received by it during such period
pursuant to the requirements of domestic or foreign (whether national,
federal, state, provincial, local or otherwise) laws and (ii) all other
information concerning its business, properties and personnel as FDEF or First
Federal may reasonably request (including the financial and Tax work papers of
independent auditors and financial consultants), provided that neither FDEF or
First Federal shall unreasonably interfere with the business operations of
ComBanc or Commercial Bank and either ComBanc or Commercial Bank may, in its
discretion, limit the access of FDEF or First Federal to the employees of
ComBanc or Commercial Bank whose work product ComBanc or Commercial Bank
reasonably wishes to keep confidential.
5.02. Notification. Between the date of this Agreement and the Closing
Date, ComBanc promptly shall notify FDEF in writing if ComBanc or Commercial
Bank becomes aware of any fact or condition that (a) causes or constitutes a
breach of any of the representations and warranties of ComBanc or Commercial
Bank, or (b) would (except as expressly contemplated by this Agreement) cause
or constitute a breach of any such representation or warranty had such
representation or warranty been made as of the time of occurrence or discovery
of such fact or condition. Should any such fact or condition require any
change in the ComBanc Disclosure Schedule, ComBanc will promptly deliver to
FDEF a supplement to the ComBanc Disclosure Schedule specifying such change
("Updated ComBanc Disclosure Schedule"); provided, however, that the
disclosure of such change in the Updated ComBanc Disclosure Schedule shall not
be deemed to constitute a cure of any breach of any representation or warranty
made pursuant to this Agreement unless consented to in writing by FDEF. During
the same period, ComBanc will promptly notify FDEF of (i) the occurrence of
any breach of any of the covenants of ComBanc or Commercial Bank contained in
this Agreement, (ii) the occurrence of any event that may make the
satisfaction of the conditions in this Agreement impossible or unlikely or
(iii) the occurrence of any event that is reasonably likely, individually or
taken with all other facts, events or circumstances known to ComBanc or
Commercial Bank, to result in a material adverse effect with respect to
ComBanc or Commercial Bank.
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5.03. Acquisition Transactions. ComBanc and Commercial Bank shall (a)
not, directly or indirectly, solicit or initiate any proposals or offers from
any person or entity, or discuss or negotiate with any such person or entity,
regarding any acquisition or purchase of all or a material amount of the
assets of, any equity securities of, or any merger, consolidation or business
combination with, ComBanc or Commercial Bank (collectively, "Acquisition
Transactions"), (b) not disclose to any person any information not customarily
disclosed publicly or provide access to its properties, books or records or
otherwise assist or encourage any person in connection with any of the
foregoing in connection with an Acquisition Transaction, and (c) give FDEF
prompt notice of any such inquiries, offers or proposals. The foregoing
sentence shall not apply however to the consideration, negotiation and
consummation of an Acquisition Transaction not solicited by ComBanc or
Commercial Bank or any of their respective officers, directors, agents or
affiliates if, and to the extent that, the Board of Directors of ComBanc (as
constituted as of the date of this Agreement) reasonably determines in good
faith after consultation with ComBanc's Financial Advisors and upon written
advice of counsel to ComBanc that failure to consider such Acquisition
Transaction could reasonably be expected to constitute a breach of its
fiduciary duties to the shareholders of ComBanc; provided, however, that
ComBanc shall give FDEF prompt notice of any such proposal of an Acquisition
Transaction and keep FDEF promptly informed regarding the substance thereof
and the response of the Board of Directors of ComBanc thereto.
5.04. Delivery of Information. ComBanc and Commercial Bank shall furnish
to FDEF promptly after such documents are available: (a) all reports, proxy
statements or other communications by ComBanc to its stockholders, (b) all
press releases relating to any transactions, (c) all filings made with the
SEC, and (d) all status reports submitted to a Regulatory Authority pursuant
to the Written Agreement among ComBanc, Commercial Bank, the Federal Reserve
and the ODFI, dated December 19, 2003.
5.05. Affiliates Compliance with the Securities Act. No later than the
15th day prior to the mailing of the Proxy/Prospectus (as defined in Section
7.03 below), ComBanc shall deliver to FDEF a schedule of all persons whom
ComBanc reasonably believes are, or are likely to be, as of the date of the
ComBanc Meeting, deemed to be "affiliates" of ComBanc as that term is used in
Rule 145 under the Securities Act (the "Rule 145 Affiliates"). Thereafter and
until the Effective Time, ComBanc shall identify to FDEF each additional
person whom ComBanc reasonably believes to have thereafter become a Rule 145
Affiliate.
5.06. Voting Agreement. Concurrently with the execution and delivery of
this Agreement, and as a condition and material inducement to FDEF's
willingness to enter into this Agreement, each of the directors and executive
officers of ComBanc and Commercial Bank shall enter into a Voting Agreement in
the form attached hereto as Exhibit B. If any person shall become a director
or executive officer of ComBanc or Commercial Bank after the date of this
Agreement and until the Effective Time, ComBanc and Commercial Bank shall
cause each such person to execute a Voting Agreement.
5.07 No Control. Nothing contained in this Agreement shall give FDEF or
First Federal, directly or indirectly, the right to control or direct the
operations of ComBanc or Commercial Bank prior to the Effective Time. Prior to
the Effective Time, each of ComBanc and FDEF shall exercise, consistent with
the terms of this Agreement, complete control and supervision over its and its
subsidiaries respective operations.
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5.08 Accounting Policies. Before the Effective Time and at the request of
FDEF, ComBanc or Commercial Bank shall promptly (a) establish and take such
accruals to conform Commercial Bank' loan and accrual policies to FDEF's
policies; (b) establish and take such accruals and charges in order to
implement such policies in respect of excess facilities and equipment
capacity, severance costs, litigation matters, write-off or write-down of
various assets and other appropriate accounting adjustments; and (c) recognize
for financial accounting purposes such expenses of the Corporate Merger, the
Bank Merger and restructuring charges related to or to be incurred in
connection with such mergers, to the extent permitted by law, consistent with
GAAP and on a basis mutually satisfactory to it and FDEF; provided, however,
that neither ComBanc nor Commercial Bank shall be obligated to make any such
changes or adjustments until the satisfaction of all unwaived conditions set
forth in Sections 8.01, 8.02 and 8.03, and further provided that no basis for
termination of this Agreement by any party pursuant to Article Ten is then
extant. ComBanc and Commercial Bank's representations, warranties and
covenants contained in this Agreement shall not be deemed to be untrue or
breached in any respect for any purpose as a consequence of any modifications
or changes undertaken solely on account of this Section 5.08.
5.09 ComBanc Meeting. ComBanc shall, as promptly as practicable following
the effective date of the Registration Statement, establish a record date for,
duly call, give notice of, convene and hold the ComBanc Meeting no later than
45 days after the effectiveness of the Registration Statement, unless
otherwise agreed to by FDEF and ComBanc. The ComBanc Board of Directors shall
recommend to its stockholders that they adopt this Agreement, and shall
include such recommendation in the Proxy/Prospectus.
5.10 Tax Matters.
(a) Without the prior written consent of FDEF, neither ComBanc nor any of
its Subsidiaries shall make or change any election, change an annual
accounting period, adopt or change any accounting method, file any amended Tax
Return, enter into any closing agreement, settle any Tax claim or assessment
relating to ComBanc or any of its Subsidiaries, surrender any right to claim a
refund of Taxes, consent to any extension or waiver of the limitation period
applicable to any tax claim or assessment relating to ComBanc or any of its
Subsidiaries, or take any other similar action relating to the filing of any
Tax Return or the payment of any Tax, if such election, adoption, change,
amendment, agreement, settlement, surrender, consent or other action would
have the effect of increasing the Tax liability of ComBanc or any of its
Subsidiaries for any period ending after the Effective Date or decreasing any
Tax attribute of ComBanc or any of its Subsidiaries existing on the Effective
Date.
(b) Except as otherwise set forth herein, each of FDEF and ComBanc agrees
not to take any actions subsequent to the date of this Agreement that would
adversely affect the ability of ComBanc and its shareholders to characterize
the Merger as a tax-free reorganization under Section 368(a) of the Code, and
each of FDEF and ComBanc agrees to take such action as may be reasonably
required, if such action may be reasonably taken, to reverse the impact of
past actions which would adversely impact the ability of the Corporate Merger
to be characterized as a tax-free reorganization under Section 368(a) of the
Code.
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5.11 Insurance Coverage. ComBanc shall cause the policies of insurance
listed in the ComBanc Disclosure Schedule to remain in effect between the date
of this Agreement and the Effective Time.
5.12 Supplemental Assurances.
(a) On the date the Registration Statement becomes effective and on the
Effective Time, ComBanc shall deliver to FDEF a certificate signed by its
principal executive officer and its principal financial officer to the effect,
to such officers' knowledge, that the information contained in the
Registration Statement relating to the business and financial condition and
affairs of ComBanc, does not contain any untrue statement of a material fact
or omit to state any material fact required to be stated therein or necessary
to make the statements therein not misleading.
(b) On the date the Registration Statement becomes effective and on the
Effective Time, FDEF shall deliver to ComBanc a certificate signed by its
chief executive officer and its chief financial officer to the effect, to such
officers' knowledge, that the Registration Statement (other than the
information contained therein relating to the business and financial condition
and affairs of ComBanc) does not contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary to make the statements therein not misleading.
ARTICLE SIX
FURTHER COVENANTS OF FDEF
6.01. Employees; Employee Benefits.
(a) All employees of Commercial Bank as of the date of this Agreement who
are actively employed by ComBanc as of the Effective Time and who are not
currently covered by a written employment or severance agreement with
Commercial Bank shall be at will employees of First Federal ("Continuing
Employees"). Continuing Employees will be eligible to participate in First
Federal's benefit plans on the earliest date permitted by such plan, with
credit for years of service with ComBanc or Commercial Bank for the purpose of
eligibility and vesting (but not for the purpose of accrual of benefits or
allocation of employer contributions). FDEF shall cause any and all pre-
existing condition limitations (to the extent such limitations did not apply
to a pre-existing condition under ComBanc's equivalent plan) and eligibility
waiting periods under group health plans to be waived with respect to such
participants and their eligible dependents.
(b) Any Continuing Employee, excluding those six employees listed in
Section 6.01(b) of the ComBanc Disclosure Schedule, who is not covered by a
written employment or severance agreement and who is terminated by FDEF or
First Federal without cause within 12 months of the Effective Time shall
receive a severance payment equal to the product of one week of his or her
then current base salary multiplied by the number of total years of service as
a Commercial Bank employee; provided, however, that the maximum severance
payment shall equal twenty-six weeks of his or her base salary.
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(c) Any Continuing Employee listed in Section 6.01(b) of the ComBanc
Disclosure Schedule who is not covered by a written employment or severance
agreement and who is terminated by FDEF or First Federal without cause within
12 months of the Effective Time shall receive a severance payment equal to the
product of two weeks of his or her then current base salary multiplied by the
number of total years of service as a Commercial Bank employee; provided,
however, that the minimum severance payment shall equal thirteen weeks of his
or her base salary and that the maximum severance payment shall equal
twenty-six weeks of his or her base salary.
(d) Each person who is listed in Section 6.01(d) of the ComBanc
Disclosure Schedule and is receiving benefits as of the date of this Agreement
under ComBanc's health insurance plan as a retiree will be entitled to receive
benefits under FDEF's Retiree Medical Benefits Plan and will pay premiums for
coverage under such plan based upon the sum of the retiree's age and years of
service at the time of retirement in accordance with the FDEF Retiree Medical
Benefits Plan.
(e) The covenants of this Section 6.01 shall survive the Corporate
Merger.
6.02. Exchange Listing. FDEF shall file a listing application with Nasdaq
for the FDEF Shares to be issued to the former holders of ComBanc Shares in
the Corporate Merger at the time prescribed by applicable rules and
regulations of Nasdaq, and shall use all commercially reasonable efforts to
cause the FDEF Shares to be issued in connection with the Corporate Merger to
be approved for listing on Nasdaq, subject to official notice of issuance,
prior to the Closing Date.
6.03. Notification. Between the date of this Agreement and the Closing
Date, FDEF will promptly notify ComBanc in writing if FDEF or First Federal
becomes aware of any fact or condition that (a) causes or constitutes a breach
of any of the representations and warranties of FDEF or First Federal or (b)
would (except as expressly contemplated by this Agreement) cause or constitute
a breach of any such representation or warranty had such representation or
warranty been made as of the time of occurrence or discovery of such fact or
condition. During the same period, FDEF will promptly notify ComBanc of (i)
the occurrence of any breach of any of the covenants of FDEF or First Federal
contained in this Agreement, (ii) the occurrence of any event that may make
the satisfaction of the conditions in this Agreement impossible or unlikely or
(iii) the occurrence of any event that is reasonably likely, individually or
taken with all other facts, events or circumstances known to FDEF or First
Federal, to result in a material adverse effect with respect to FDEF or First
Federal.
6.04 Indemnification.
(a) Nothing in this Agreement is intended to affect any rights to
indemnification to which any officer or director of ComBanc or Commercial Bank
may be entitled pursuant to the Certificate of Incorporation, Bylaws, Articles
of Incorporation, or Code of Regulations of ComBanc or Commercial Bank in
effect prior to the Effective Time. From the Effective Time and continuing for
a period of three years thereafter, the current and former officers and
directors of ComBanc and Commercial Bank shall be indemnified by FDEF from
their acts and omissions occurring prior to the Effective Time to the maximum
extent permitted by the Articles of Incorporation and Code of Regulations of
FDEF but subject to any applicable limitations of Ohio law. As a condition to
receiving such indemnification, the party claiming indemnification shall
assign to FDEF, by separate writing, all right, title and interest in and to
the proceeds of the claiming party's applicable insurance coverage, if any,
including insurance maintained or provided by FDEF or ComBanc or Commercial
Bank to the extent of such indemnity. No person shall be entitled to such
indemnification with respect to a claim (i) if such person fails to cooperate
in the defense and investigation of such claim as to which indemnification may
be made, (ii) made by such person against FDEF, its subsidiaries, ComBanc or
Commercial Bank arising out of or in connection with this Agreement, the
transactions contemplated hereby or the conduct of the business of FDEF, its
subsidiaries, ComBanc or Commercial Bank, or (iii) if such person fails to
deliver such notices as may be required under any applicable directors and
officers liability insurance policy to preserve any possible claims of which
the claiming party is aware, to the extent such failure results in the denial
of payment under such policy.
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(b) For a period of three years from the Effective Time, FDEF shall use
its reasonable best efforts to provide that portion of directors' and
officers' liability insurance that serves to reimburse the present and former
Officers and Directors of ComBanc or Commercial Bank with respect to claims
against such Directors and Officers arising from facts or events that occurred
before the Effective Time; provided, however, that in no event shall FDEF be
required to expend more than 125% of the current amount expended by ComBanc or
Commercial Bank to maintain or procure such directors' and officers'
insurance.
6.05 Board of Directors. FDEF will select one individual from the Board
of Directors of Commercial Bank in existence on the date of this Agreement to
serve on the Board of Directors of FDEF and First Federal beginning
immediately after the Effective Time. FDEF and First Federal will take all
necessary action prior to the Effective Time to increase the number of
directors on their respective Boards of Directors to permit the addition of
this individual. At the Effective Time, the director selected and nominated
pursuant to this Section 6.05 shall be elected or appointed to fill a vacancy
on the respective Boards.
6.06 Advisory Board. First Federal agrees to take all action necessary to
appoint all of the directors of Commercial Bank in existence on the date of
this Agreement who are not serving on the Board of Directors of FDEF or First
Federal and who are not employees of FDEF or First Federal, effective as of
the Effective Time, to an advisory board of First Federal for a term of one
year. First Federal shall pay the members of the advisory board a fee of
$500.00 per meeting attended and the advisory board shall meet monthly during
the year following the Corporate Merger. Each member of the advisory board
shall execute a non-compete agreement that extends for a period of twelve
months in the form attached hereto as Exhibit C.
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ARTICLE SEVEN
FURTHER OBLIGATIONS OF THE PARTIES
7.01. Cooperative Action. Subject to the terms and conditions of this
Agreement, each of ComBanc, Commercial Bank, FDEF and First Federal agrees to
use its best efforts to satisfy all of the conditions to this Agreement and to
cause the consummation of the transactions described in this Agreement, and to
take, or cause to be taken, all further actions and execute all additional
documents, agreements and instruments which may be reasonably required, in the
opinion of counsel for ComBanc ("ComBanc's Counsel") and counsel for FDEF
("FDEF's Counsel"), to satisfy all legal requirements of the States of Ohio
and Delaware and of the United States, so that this Agreement and the
transactions contemplated hereby will become effective as promptly as
practicable.
7.02. Press Releases. Neither FDEF nor ComBanc shall make any press
release or other public announcement concerning the transactions contemplated
by this Agreement without the consent of the other party hereto as to the form
and contents of such press release or public announcement, except to the
extent that such press release or public announcement may be required by law
or Nasdaq rules to be made before such consent can be obtained.
7.03. Proxy/Prospectus; Registration Statement.
(a) As promptly as reasonably practical following the date hereof,
ComBanc and FDEF shall prepare mutually acceptable proxy and prospectus
material that will constitute the proxy statement/prospectus (including all
amendments or supplements thereto, the "Proxy/Prospectus") relating to the
matters to be submitted to the ComBanc stockholders for the ComBanc Meeting,
and FDEF shall file with the SEC a registration statement with respect to the
issuance of FDEF Shares in the Corporate Merger (such registration statement,
which shall include the Proxy/Prospectus and all amendments or supplements
thereto, the "Registration Statement"). Each of ComBanc and FDEF agrees to use
all commercially reasonable efforts to cause the Registration Statement to be
declared effective under the Securities Act as promptly as reasonably
practicable after the filing thereof. FDEF also agrees to use all reasonable
efforts to obtain, prior to the effective date of the Registration Statement,
all necessary state securities law or "Blue Sky" permits and approvals
required to carry out the transactions contemplated by this Agreement. ComBanc
agrees to promptly furnish to FDEF all information concerning ComBanc,
Commercial Bank and the Officers, Directors and stockholders of ComBanc as
FDEF reasonably may request in connection with the foregoing. Each of ComBanc
and FDEF shall promptly notify the other upon the receipt of any comments from
the SEC or its staff or any request from the SEC or its staff for amendments
or supplements to the Registration Statement and shall promptly provide the
other with copies of all correspondence between it and its representatives, on
the one hand, and the SEC and its staff, on the other hand. Notwithstanding
the foregoing, prior to filing the Registration Statement (or any amendment or
supplement thereto), mailing the Proxy/Prospectus (or any amendment or
supplement thereto), or responding to any comments of the SEC with respect
thereto, each of ComBanc and FDEF, as the case may be, (i) shall provide the
other party with a reasonable opportunity to review and comment on such
document or response, (ii) shall include in such document or response all
comments reasonably proposed by such other party, and (iii) shall not file or
mail such document or respond to the SEC prior to receiving such other's
approval, which approval shall not be unreasonably withheld or delayed.
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(b) Each of ComBanc and FDEF agrees, as to itself and its Subsidiaries,
that none of the information to be supplied by it for inclusion or
incorporation by reference in (i) the Registration Statement will, at the time
the Registration Statement and each amendment or supplement thereto, if any,
is filed with the SEC and at the time the Registration Statement becomes
effective under the Securities Act, contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary to make the statements therein in light of the circumstances under
which they were made, not misleading, and (ii) the Proxy/Prospectus and any
amendment or supplement thereto will, as of the date such Proxy/Prospectus is
mailed to stockholders of ComBanc and up to and including the date of the
meeting of ComBanc's stockholders to which such Proxy/Prospectus relates,
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements therein
in light of the circumstances under which they were made not misleading.
(c) Each of ComBanc and FDEF agrees, if it shall become aware prior to
the Effective Time of any information furnished by it that would cause any of
the statements in the Registration Statement to be false or misleading with
respect to any material fact, or to omit to state any material fact necessary
to make the statements therein not false or misleading, to promptly inform the
other party thereof and to take the necessary steps to correct the
Registration Statement.
(d) FDEF agrees to advise ComBanc, promptly after FDEF receives notice
thereof, of the time when the Registration Statement has become effective or
any supplement or amendment has been filed, of the issuance of any stop order
or the suspension of the qualification of FDEF Shares for offering or sale in
any jurisdiction, of the initiation or threat of any proceeding for any such
purpose, or of any request by the SEC for the amendment or supplement of the
Registration Statement or for additional information.
7.04. Regulatory Applications. FDEF will prepare and cause to be filed at
its expense such applications and other documents with the OTS, the FDIC, the
ODFI, and any other Regulatory or Governmental Authorities as are required to
secure the requisite approval to the consummation of the transactions provided
for in this Agreement. ComBanc and Commercial Bank agree that they will, as
promptly as practicable after request and at their own expense, provide FDEF
with all information and documents concerning ComBanc and Commercial Bank as
shall be required in connection with preparing any applications, registration
statements and other documents that are to be prepared and filed by FDEF and
in connection with regulatory approvals required to be obtained by FDEF
hereunder.
7.05. Termination of Plans. As of the Effective Time, ComBanc's health
insurance plan will be terminated and, in FDEF's discretion, ComBanc's 401(k)
Profit Sharing Plan (Plan #001) will either be terminated or merged into
FDEF's 401(k) Employee Savings Plan. Prior to the Effective Time, ComBanc will
terminate the retiree health insurance benefits for those people who may
retire after the date of this Agreement.
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7.06. Confidentiality. The parties to this Agreement acknowledge the
confidential and proprietary nature of the information as hereinafter
described which has heretofore been exchanged and which will be received from
each other hereunder (the "Information") and agree to hold and keep the same
confidential. Such Information will include any and all financial, technical,
commercial, marketing, customer or other information concerning the business,
operations and affairs of a party that may be provided to the other,
irrespective of the form of the communications, by such party's employees or
agents. Such Information shall not include information that is or becomes
generally available to the public other than as a result of a disclosure by a
party or its representatives in violation of this Agreement, or Information
which is required to be furnished or used in connection with legal
proceedings. The parties agree that the Information will be used solely for
the purposes contemplated by this Agreement and that such Information will not
be disclosed to any person other than employees and agents of a party who are
directly involved in evaluating the transaction. The Information shall not be
used in any way detrimental to a party, including use directly or indirectly
in the conduct of the other party's business or enterprise in which such party
may have an interest, now or in the future, and whether or not now in
competition with such other party. Upon the written request of the disclosing
party, upon termination of this Agreement, the other parties will promptly
return or destroy Information in their possession and certify to the
disclosing party that the party has done so.
ARTICLE EIGHT
CONDITIONS PRECEDENT TO THE OBLIGATIONS OF THE PARTIES
8.01. Conditions to the Obligations of FDEF and First Federal. The
obligations of FDEF and First Federal under this Agreement shall be subject to
the satisfaction, or written waiver by FDEF and First Federal prior to the
Closing Date, of each of the following conditions precedent:
(a) The representations and warranties of ComBanc and Commercial Bank set
forth in this Agreement shall be true and correct in all material respects as
of the date of this Agreement and as of the Closing Date as though such
representations and warranties were also made as of the Closing Date, except
that those representations and warranties which by their terms speak as of a
specific date shall be true and correct as of such date; and FDEF shall have
received a certificate, dated the Closing Date, signed by the chief executive
officer and the chief financial officer of each of ComBanc and Commercial Bank
to such effect.
(b) Each of ComBanc and Commercial Bank shall have performed in all
material respects all of its covenants and obligations under this Agreement to
be performed by it on or prior to the Closing Date, including those relating
to the Closing and the closing deliveries required by Section 9.03 of this
Agreement, and FDEF shall have received a certificate, dated the Closing Date,
signed by the chief executive officer and the chief financial officer of each
of ComBanc and Commercial Bank to such effect.
(c) The holders of not more than 12% of the outstanding ComBanc Shares
shall have perfected their appraisal rights under Section 262 of the DGCL, if
applicable, in connection with the transactions contemplated by this
Agreement.
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(d) ComBanc and Commercial Bank shall have obtained the consent or
approval of each person (other than Governmental and Regulatory Authorities)
whose consent or approval shall be required in connection with the
transactions contemplated hereby under any loan or credit agreement, note,
mortgage, indenture, lease, license or other agreement or instrument, except
those for which failure to obtain such consents and approvals would not,
individually or in the aggregate, have a material adverse effect, after the
Effective Time, on the Surviving Corporation.
(e) All of the Deferred Compensation Agreements with members of ComBanc
or Commercial Bank's Board of Directors shall be terminated.
8.02. Conditions to the Obligations of ComBanc and Commercial Bank. The
obligations of ComBanc and Commercial Bank under this Agreement shall be
subject to satisfaction, or written waiver by ComBanc and Commercial Bank
prior to the Closing Date, of each of the following conditions precedent:
(a) The representations and warranties of FDEF and First Federal set
forth in this Agreement shall be true and correct in all material respects as
of the date of this Agreement and as of the Closing Date as though such
representations and warranties were also made as of the Closing Date, except
that representations and warranties which by their terms speak as of a
specific date shall be true and correct as of such date; and ComBanc shall
have received a certificate, dated the Closing Date, signed by the chief
executive officer and the chief financial officer of each of FDEF and First
Federal to such effect.
(b) Each of FDEF and First Federal shall have performed in all
material respects all of its covenants and obligations under this Agreement to
be performed by it on or prior to the Closing Date, including those related to
the Closing and the closing deliveries required by Section 9.02 of this
Agreement, and ComBanc shall have received a certificate, dated the Closing
Date, signed by the chief executive officer and the chief financial officer of
each of FDEF and First Federal to such effect.
(c) FDEF and First Federal shall have obtained the consent or approval of
each person (other than Governmental and Regulatory Authorities) whose consent
or approval shall be required in connection with the transactions contemplated
hereby under any loan or credit agreement, note, mortgage, indenture, lease,
license or other agreement or instrument, except those for which failure to
obtain such consents and approvals would not, individually or in the
aggregate, have a material adverse effect, after the Effective Time, on the
Surviving Corporation.
(d) ComBanc shall have received from ComBanc's Financial Advisor an
opinion reasonably acceptable to ComBanc, dated as of the Closing Date, to the
effect that the consideration to be received by the holders of ComBanc Shares
in the Corporate Merger is fair, from a financial point of view, to the
holders of ComBanc's Shares.
(e) FDEF shall have purchased the directors' and officers' liability
insurance required by Section 6.04(b) of this Agreement.
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(f) There shall not have been an adjustment to the consideration
to be paid to ComBanc stockholders pursuant to Section 2.01(d).
8.03. Mutual Conditions. The obligations of ComBanc, Commercial Bank,
FDEF and First Federal under this Agreement shall be subject to the
satisfaction, or written waiver by the parties prior to the Closing Date, of
each of the following conditions precedent:
(a) The stockholders of ComBanc shall have duly adopted this Agreement by
the required vote.
(b) All approvals of Governmental and Regulatory Authorities required to
consummate the transactions contemplated by this Agreement shall have been
obtained and shall remain in full force and effect and all statutory waiting
periods in respect thereof shall have expired and no such approvals or
statute, rule or order shall contain, other than divestitures or dispositions
required to satisfy antitrust requirements, any conditions, restrictions or
requirements that would reasonably be expected to have a material adverse
effect after the Effective Time on the present or prospective consolidated
financial condition, business or operating results of the Surviving
Corporation.
(c) No temporary restraining order, preliminary or permanent injunction
or other order issued by a court of competent jurisdiction or other legal
restraint or prohibition preventing the consummation of the Corporate Merger
shall be in effect. No Governmental or Regulatory Authority of competent
jurisdiction shall have enacted, issued, promulgated, enforced, deemed
applicable or entered any statute, rule, regulation, judgment, decree,
injunction or other order prohibiting consummation of the transactions
contemplated by this Agreement or making the Corporate Merger illegal.
(d) The Registration Statement shall have become effective under the
Securities Act and no stop-order or similar restraining order suspending the
effectiveness of the Registration Statement shall have been issued and no
proceeding for that purpose shall have been initiated by the SEC.
(e) FDEF and ComBanc shall have received the written opinion of FDEF's
Counsel, dated the Closing Date, to the effect that, on the basis of facts,
representations and assumptions set forth in such opinion, the Corporate
Merger will be treated for federal income tax purposes as a reorganization
within the meaning of Section 368(a)(1)(A) of the Code. In rendering its
opinion, FDEF's Counsel will require and rely upon customary representations
contained in letters from FDEF and ComBanc that FDEF's Counsel reasonably
deems relevant.
ARTICLE NINE
CLOSING
9.01. Closing. The closing of the Corporate Merger pursuant to this
Agreement (the "Closing") shall take place at a date and time agreed upon by
FDEF and ComBanc within a reasonable time after the satisfaction or waiver of
the last of the conditions to the Corporate Merger set forth in Article Eight
of this Agreement to be satisfied. Notwithstanding any of the foregoing to the
contrary, the Closing shall not occur on a date after that specified in
Section 10.01(b)(i) of this Agreement or after the date or dates on which any
Governmental or Regulatory Authority approval or any extension thereof
expires. The date of the Closing is sometimes herein called the "Closing
Date."
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9.02. Closing Deliveries Required of FDEF and First Federal. At the
Closing, FDEF and First Federal shall cause all of the following to be
delivered to ComBanc:
(a) The certificates of FDEF and First Federal contemplated by Section
8.02(a) and (b) of this Agreement.
(b) Copies of all resolutions adopted by the directors of FDEF and First
Federal, approving and adopting this Agreement and authorizing the
consummation of the transactions described herein, accompanied by a
certificate of the secretary or assistant secretary of FDEF and First Federal,
as applicable, dated as of the Closing Date, and certifying (i) the date and
manner of adoption of each such resolution; and (ii) that each such resolution
is in full force and effect, without amendment or repeal, as of the Closing
Date.
9.03. Closing Deliveries Required of ComBanc and Commercial Bank. At the
Closing, ComBanc and Commercial Bank shall cause all of the following to be
delivered to FDEF:
(a) The certificates of ComBanc and Commercial Bank contemplated by
Sections 8.01(a) and (b) of this Agreement.
(b) Copies of all resolutions adopted by the directors and the
shareholders of ComBanc and Commercial Bank approving and adopting this
Agreement and authorizing the consummation of the transactions described
herein, accompanied by a certificate of the secretary or the assistant
secretary of ComBanc and Commercial Bank, as applicable, dated as of the
Closing Date, and certifying (i) the date and manner of the adoption of each
such resolution; and (ii) that each such resolution is in full force and
effect, without amendment or repeal, as of the Closing Date.
(c) A written agreement from each Rule 145 Affiliate identified by
ComBanc pursuant to Section 5.05 in which such Rule 145 Affiliate confirms
that the FDEF Shares received by such Rule 145 Affiliate pursuant to the
Corporate Merger will be transferable only in accordance with Rule 145 of the
Securities Act.
ARTICLE TEN
TERMINATION
10.01. Termination. This Agreement may be terminated, and the Corporate
Merger may be abandoned, at any time prior to the Effective Time, whether
prior to or after this Agreement has been adopted by the shareholders of
ComBanc:
(a) By mutual written agreement of ComBanc and FDEF duly authorized by
action taken by or on behalf of their respective Boards of Directors;
(b) By either ComBanc or FDEF upon written notification to the
non-terminating party:
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(i) at any time after March 31, 2005, if the Corporate Merger shall
not have been consummated on or prior to such date and such failure to
consummate the Corporate Merger is not caused by a breach of this Agreement by
the terminating party;
(ii) if any event occurs which, in the reasonable opinion of either
FDEF or ComBanc, would preclude satisfaction of any of the conditions set
forth in Section 8.03 of this Agreement; or
(iii) if, in compliance with the provisions of Section 5.03 of this
Agreement, ComBanc executes a definitive agreement in connection with, or
closes, an Acquisition Transaction;
(c) By ComBanc upon written notice to FDEF if any event occurs which, in
the reasonable opinion of ComBanc, would preclude satisfaction of any of the
conditions set forth in Section 8.02 of this Agreement;
(d) By ComBanc upon written notice to FDEF if, pursuant to Section
2.01(c), FDEF, in its sole discretion, does not increase the Per Share Stock
Consideration to preserve the status of the Corporate Merger as a tax- free
reorganization.
(e) By FDEF upon written notice to ComBanc if any event occurs which, in
the reasonable opinion of FDEF, would preclude satisfaction of any of the
conditions set forth in Section 8.01 of this Agreement.
10.02. Effect of Termination. If this Agreement is validly terminated by
either ComBanc or FDEF pursuant to Section 10.01, this Agreement will
forthwith become null and void and there will be no liability or obligation on
the part of ComBanc, Commercial Bank, FDEF or First Federal except that (i)
the provisions of Sections 5.03, 7.06 and 11.07 and this Article Ten will
continue to apply following any such termination, and (ii) except as set forth
in Section 10.04, nothing contained herein shall relieve any party hereto from
liability for breach of its representations, warranties, covenants or
agreements contained in this Agreement.
10.03. Termination Fee. In the event ComBanc executes a definitive
agreement in connection with, or closes, an Acquisition Transaction at any
time after the date of this Agreement until the expiration of twelve months
from the date of termination of this Agreement, ComBanc shall pay to FDEF in
immediately available funds the sum of $2,000,000 within ten days after the
earlier of such execution or closing.
10.04. Force Majeure. Notwithstanding anything to the contrary in this
Agreement, in the event this Agreement is terminated as a result of a failure
of a condition, which failure is due to a natural disaster or other act of
God, or an act of war or terrorism, and provided no party has failed to
observe the material obligations of such party under this Agreement, no party
shall be obligated to pay to the other party to this Agreement any fees or
expenses or otherwise be liable hereunder.
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ARTICLE ELEVEN
MISCELLANEOUS
11.01. Notices. All notices, requests, demands and other communications
required or permitted to be given under this Agreement shall be given in
writing and shall be deemed to have been duly given (a) on the date of
delivery if delivered by hand or by telecopy, upon confirmation of receipt,
(b) on the first business day following the date of dispatch if delivered by a
recognized next-day courier service, or (c) on the third business day
following the date of mailing if sent by certified mail, postage prepaid,
return receipt requested. All notices thereunder shall be delivered to the
following addresses:
If to ComBanc or Commercial Bank, to:
ComBanc, Inc.
000 Xxxx Xxxxxx Xxxxxx
Xxxxxxx, Xxxx 00000
Attn: Xxxx X. Xxxxxx, President
Facsimile Number: (000) 000-0000
With a copy to:
Squire, Xxxxxxx & Xxxxxxx L.L.P.
0000 Xxx Xxxxx
000 Xxxxxx Xxxxxx
Xxxxxxxxx, Xxxx 00000
Attn: Xxxxx X. Xxxxxxx, Esq.
Facsimile Number: (000) 000-0000
If to FDEF or First Federal, to:
First Defiance Financial Corp.
000 Xxxxxxx Xxxxxx
Xxxxxxxx, Xxxx 00000
Attn: Xxxxxxx X. Small, Chairman, President and Chief
Executive Officer
Facsimile Number: (000) 000-0000
With a copy to:
Vorys, Xxxxx, Xxxxxxx and Xxxxx LLP
Suite 2000, Atrium Two
000 Xxxx Xxxxxx Xxxxxx
Xxxxxxxxxx, Xxxx 00000
Attn: Xxxxx Xxxxxxxx Xxxxx, Esq.
Facsimile Number: (000) 000-0000
-41-
Any party to this Agreement may, by notice given in accordance with this
Section 11.01, designate a new address for notices, requests, demands and
other communications to such party.
11.02. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be a duplicate original, but
all of which taken together shall be deemed to constitute a single instrument.
11.03. Entire Agreement. This Agreement (including the exhibits,
documents and instruments referred to herein) constitutes the entire
agreement, and supersedes all prior agreements and understandings, both
written and oral, among the parties with respect to the subject matter of this
Agreement.
11.04. Successors and Assigns. This Agreement shall inure to the benefit
of and be binding upon the respective successors and assigns (including
successive, as well as immediate, successors and assigns) of the parties
hereto. This Agreement may not be assigned by either party hereto without the
prior written consent of the other party.
11.05. Captions. The captions contained in this Agreement are included
only for convenience of reference and do not define, limit, explain or modify
this Agreement or its interpretation, construction or meaning and are in no
way to be construed as part of this Agreement.
11.06. Governing Law. This Agreement shall be governed by, and construed
in accordance with, the laws of the State of Ohio without giving effect to
principles of conflicts or choice of laws (except to the extent that mandatory
provisions of federal law are applicable).
11.07. Payment of Fees and Expenses. Except as otherwise agreed in
writing, each party hereto shall pay all of its own costs and expenses,
including legal and accounting fees, and all expenses relating to its
performance of, and compliance with, its undertakings herein, except that
printing and mailing expenses shall be shared equally between ComBanc and
FDEF. All fees to be paid to Governmental and Regulatory Authorities in
connection with the transactions contemplated by this Agreement shall be borne
by FDEF.
11.08. Amendment. From time to time and at any time prior to the
Effective Time, this Agreement may be amended only by an agreement in writing
executed in the same manner as this Agreement, except that after the ComBanc
Meeting, this Agreement may not be amended if it would violate the DGCL.
11.09. Waiver. The rights and remedies of the parties to this Agreement
are cumulative and not alternative. Neither the failure nor any delay by any
party in exercising any right, power or privilege under this Agreement or the
documents referred to in this Agreement will operate as a waiver of such
right, power or privilege, and no single or partial exercise of any such
right, power or privilege will preclude any other or further exercise of such
right, power or privilege or the exercise of any other right, power or
privilege.
11.10. No Third-Party Rights. Except as specifically set forth herein,
nothing expressed or referred to in this Agreement will be construed to give
any person other than the parties to this Agreement any legal or equitable
right, remedy or claim under or with respect to this Agreement or any
provision of this Agreement. This Agreement and all of its provisions and
conditions are for the sole and exclusive benefit of the parties to this
Agreement and their successors and assigns.
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11.11. Waiver of Jury Trial. Each of the parties hereto irrevocably
waives any and all right to trial by jury in any legal proceeding arising out
of or related to this Agreement or the transactions contemplated hereby.
11.12. Severability. If any provision of this Agreement is held invalid
or unenforceable by any court of competent jurisdiction, the other provisions
of this Agreement will remain in full force and effect. Any provision of this
Agreement held invalid or unenforceable only in part or degree will remain in
full force and effect to the extent not held invalid or unenforceable.
11.13. Non-Survival of Representations, Warranties and Covenants. The
representations, warranties and covenants of FDEF, First Federal, ComBanc and
Commercial Bank set forth in this Agreement, or in any document delivered
pursuant to the terms hereof or in connection with the transactions
contemplated hereby, shall not survive the Closing and the consummation of the
transactions referred to herein, other than covenants which by their terms are
to survive or be performed after the Effective Time (including, without
limitation, those set forth in Article Six and this Article Eleven); except
that the Surviving Corporation and any director, officer or controlling person
thereof may rely on such representations, warranties or covenants in any
defense in law or equity which otherwise would be available against the claims
of any person, including, without limitation, any shareholder or former
shareholder of either ComBanc or FDEF.
[REMAINDER OF THE PAGE INTENTIONALLY BLANK]
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IN WITNESS WHEREOF, this Agreement and Plan of Merger has been executed on
behalf of FDEF, First Federal, ComBanc and Commercial Bank to be effective as
of the date set forth in the first paragraph above.
ATTEST: FIRST DEFIANCE FINANCIAL CORP.
/s/ Xxxxxxx X. Xxxxxxx By: /s/ Xxxxxxx X. Small
---------------------- -----------------------------------------------
Xxxxxxx X. Small, Chairman, President and
Chief Executive Officer
ATTEST: FIRST FEDERAL BANK OF THE MIDWEST
/s/ Xxxxxxx X. Xxxxxxx By: /s/ Xxxxxxx X. Small
---------------------- -----------------------------------------------
Xxxxxxx X. Small, Chairman and
Chief Executive Officer
ATTEST: COMBANC, INC.
/s/ Xxxxxxx X. Xxxxxxx By: /s/ Xxxx X. Xxxxxx
---------------------- -----------------------------------------------
Xxxx X. Xxxxxx, Chairman, President and CEO
ATTEST: THE COMMERCIAL BANK
/s/ Xxxxxxx X. Xxxxxxx By: /s/ Xxxx X. Xxxxxx
---------------------- -----------------------------------------------
Xxxx X. Xxxxxx, President and CEO
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EXHIBIT A
Agreement of Merger
THIS AGREEMENT OF MERGER (this "Agreement") is entered into as of the ___
day of ___________, 2004, by and between First Federal Bank of the Midwest
("First Federal"), a federal savings bank, and The Commercial Bank
("Commercial Bank"), an Ohio commercial bank.
R E C I T A L S :
WHEREAS, First Federal is a wholly owned subsidiary of First Defiance
Financial Corp. ("FDEF"), an Ohio corporation, and Commercial Bank is a wholly
owned subsidiary of ComBanc, Inc. ("ComBanc"), a Delaware corporation;
WHEREAS, FDEF, First Federal, ComBanc and Commercial Bank have entered
into an Agreement and Plan of Merger dated ___________________, 2004 (the
"Merger Agreement"), which provides for the merger of ComBanc with and into
FDEF and the subsequent merger of Commercial Bank with and into First Federal;
and
WHEREAS, the Boards of Directors of each of the parties hereto have
approved this Agreement;
NOW, THEREFORE, in consideration of the mutual premises and mutual
agreements contained herein, the parties hereto have agreed as follows:
ARTICLE I
THE MERGER
Section 1.01. At the Effective Time (as defined in Article IV below),
Commercial Bank shall merge with and into First Federal (the "Merger")
pursuant to Ohio Rev. Code {section}{section} 1115.11 and 1701.79, and the
applicable regulations of the Division of Financial Institutions of the Ohio
Department of Commerce (the "Division") and the Office of Thrift Supervision
("OTS"). Upon consummation of the Merger, the separate corporate existence of
Commercial Bank shall cease and First Federal shall continue as the surviving
institution (the "Surviving Institution").
Section 1.02. The name of the Surviving Institution shall be First Federal
Bank of the Midwest.
ARTICLE II
CONVERSION OF SECURITIES
Section 2.01. First Federal Stock. The shares of common stock of First
Federal issued and outstanding immediately prior to the Effective Time shall
be unaffected by the Merger and shall constitute the only outstanding shares
of capital stock of the Surviving Institution at and after the Effective Time.
Section 2.02. Commercial Bank Stock. At the Effective Time, by virtue of
the Merger and without any action on the part of First Federal or Commercial
Bank, all of the shares of common stock of Commercial Bank, $6.25 par value
per share, that are issued and outstanding immediately prior thereto shall
thereupon be canceled.
ARTICLE III
EFFECTIVE TIME
Section 3.01. The Merger shall become effective immediately following and
contingent upon the occurrence of the Closing (as defined in Article Nine of
the Merger Agreement) at the date and time specified in the articles of
combination to be filed with the Office of Thrift Supervision (the "Effective
Time"); provided, however, that such filing shall not occur and the Merger
shall not be effective until all of the following events have taken place:
(a) ComBanc shall have been merged with and into FDEF; (b) the sole
shareholders of First Federal and Commercial Bank shall have adopted this
Agreement; (c) the Merger shall have been approved by all regulatory
authorities; and (d) all applicable regulatory waiting periods shall have
expired.
ARTICLE IV
CHARTER AND BYLAWS
OF SURVIVING INSTITUTION
Section 4.01. The charter and bylaws of First Federal as in effect at the
Effective Time shall be the charter and bylaws of the Surviving Institution at
and after the Effective Time.
ARTICLE V
EXECUTIVE OFFICERS OF SURVIVING INSTITUTION
Section 5.01. The executive officers of First Federal immediately before
the Effective Time shall serve in the same capacities as executive officers of
the Surviving Institution at and after the Effective Time.
ARTICLE V
DIRECTORS OF RESULTING INSTITUTION
6.1 At and after the Effective Time and until changed in accordance
with law, the number of directors of the Resulting Institution shall be five.
The directors of Foundation immediately prior to the Effective Time shall be
the directors of the Resulting Institution at and after the Effective Time,
whose names, terms and residence addresses are as follows:
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Director Term to Expire Residence Address
Xxxxxxx X. Small
Xxx X. Xxx Xxxxxxx
Xxxxxxx X. Xxxxxx
Xxxxxxx X. Xxxxxx
Xxxxx X. Xxxxx
Xxxx X. Xxxxxxx
Xxxxxx X. Xxxxxx
Xxxxx X. Xxxxx
Xxxxxx X. Xxxxx
ARTICLE VII
EFFECTS OF MERGER
Section 7.01. At the Effective Time, Commercial Bank shall merge with and
into First Federal, with First Federal as the Surviving Institution. The
business of the Surviving Institution shall be that of a federal savings bank,
as provided for in its charter. All assets, rights, interests, privileges,
powers, franchises and property (real, personal and mixed) of First Federal
and Commercial Bank shall be automatically transferred to and vested in the
Surviving Institution by virtue of the Merger without any deed or other
document of transfer.
Section 7.02. The Surviving Institution, without any order or action on
the part of any court or otherwise and without any documents of assumption or
assignment, shall hold and enjoy all of the assets, rights, privileges,
powers, properties, franchises and interests, including, without limitation,
appointments, powers, designations, nominations and all other rights,
interests and powers as agent or fiduciary, in the same manner and to the same
extent as such rights, interests and powers were held or enjoyed by First
Federal and Commercial Bank, respectively.
Section 7.03. The Surviving Institution shall be responsible for all of
the liabilities, restrictions and duties of every kind and description of both
First Federal and Commercial Bank, immediately prior to the Merger, including,
without limitation, liabilities for all savings accounts, deposits, debts,
obligations and contracts of First Federal and Commercial Bank, respectively,
matured or unmatured, whether accrued, absolute, contingent and otherwise and
whether or not reflected or reserved against on balance sheets, books of
accounts or records of either First Federal or Commercial Bank. Deposit
accounts shall be deemed issued in the name of the Surviving Institution in
accordance with applicable regulations. All rights of creditors and other
obligees and all liens on property of either First Federal or Commercial Bank
shall be preserved, shall be assumed by the Surviving Institution and shall not
be released or impaired.
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ARTICLE VIII
OFFICES OF SURVIVING INSTITUTION
Section 8.01. After the Effective Time, the locations of the offices of
the Resulting Institution shall be as follows:
Home Office: 000 Xxxxxxx Xxxxxx
Xxxxxxxx, Xxxx 00000
Branch Offices: 0000 Xxxx Xxxx Xxxxxx 000 Xxxx Xxxx Xxxxxx
Xxxxxxxxxx, Xxxx 00000 Xxxxx, Xxxx 00000
000 Xxxx Xxxx Xxxxxx 000 Xxxxx Xxxxxx Xxxxxx
Xxxxx, Xxxx 00000 Xxxxxxx, Xxxx 00000
000 Xxxx Xxxxxx Xxxxx 000 Xxxx Xxxx Xxxxxx
Xxxxxx, Xxxx 00000 Xxxxxxxxxx, Xxxx 00000
000 X. Xxxxxxx Xxxxxx 000 Xxxxxxx Xxxxx
Xxxxxxxx, Xxxx 00000 Xxxxxxxx, Xxxx 00000
000 Xxxxx Xxxxxx 0000 Xxxxxxxx Xxxxxx
Xxxxxxxx, Xxxx 00000 Xxxxxxxx, Xxxx 00000
0000 X. Xxxxxxx Xxxxxx 0000 X. Xxxxxxxxxx
Xxxxxx
Xxxxxxx Xxxxx, Xxxx 00000 Xxxxxxxx, Xxxx 00000
000 X. Xxxx Xxxxxx 000 X. Xxxxxxxx Xxxxxx
Xxxxxx, Xxxx 00000 Xxxxxxxx, Xxxx 00000
000 X. Xxxx Xxxxxx 0000 X. Xxxx Xxxxxx
XxXxxx, Xxxx 00000 Xxxxxxx, Xxxx 00000
0000 Xxxxxxx Xxxxx 000 X. Xxxx Xxxxxx
Xxxxxxx, Xxxx 00000 Xxxxxxx, Xxxx 00000
000 X. Xxxxxx Xxxxxx 0000 Xxxxxxxxx Xxxx
Xxxxxxx, Xxxx 00000 Xxxx, Xxxx 00000
0000 X. Xxxx Xxxxxx 000 X. Xxxxxxxxx Xxxxxx
Xxxx, Xxxx 00000 Xxxxx, Xxxx 00000
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ARTICLE IX
LIQUIDATION ACCOUNT
Section 9.01. At the Effective Time, the Surviving Institution shall
assume Commercial Bank's liquidation account established upon Commercial Bank's
conversion to the stock form of ownership.
ARTICLE X
OTHER TERMS
Section 10.01. All terms used in this Agreement shall, unless defined
herein, have the meanings set forth in the Merger Agreement.
Section 10.02. Subject to applicable law, at any time prior to the
consummation of the Merger, this Agreement may be amended by an instrument in
writing signed on behalf of each of the parties hereto.
Section 10.03. This Agreement shall terminate and become null and void,
and the transactions contemplated herein shall thereupon be abandoned, upon
any occurrence of a termination of the Merger Agreement pursuant to Article
Ten thereof.
Section 10.04. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original and all of such
counterparts shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
as of the date first above written.
ATTEST: First Federal Bank of the Midwest
---------------------------------- By:------------------------------
-------------------
ATTEST: The Commercial Bank
---------------------------------- By:------------------------------
-------------------
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EXHIBIT B
Voting Agreement
THIS VOTING AGREEMENT (this "Agreement") is entered into this _____ day
of ________, 2004, between the undersigned Stockholder (the "Stockholder") of
ComBanc, Inc., a Delaware corporation ("ComBanc"), and First Defiance
Financial Corp., an Ohio corporation ("FDEF").
RECITALS
A. The Stockholder owns or has the power to vote, other than in a
fiduciary capacity, _______ common shares, without par value, of ComBanc
(together with all other shares of ComBanc that the Stockholder may
subsequently acquire or obtain the power to vote, other than in a fiduciary
capacity, the "Shares").
B. ComBanc has entered into an Agreement and Plan of Merger by and
among FDEF, First Federal Bank of the Midwest, ComBanc and The Commercial Bank
of even date herewith (the "Merger Agreement").
C. Under the terms of the Merger Agreement, ComBanc has agreed to call
a meeting of its stockholders for the purpose of voting upon the adoption of
the Merger Agreement (together with any adjournments thereof, the "ComBanc
Meeting").
D. The parties to the Merger Agreement have made it a condition to
their entering into the Merger Agreement that certain stockholders of ComBanc,
including the Stockholder, agree to vote their shares of ComBanc in favor of
the adoption of the Merger Agreement.
AGREEMENT
Accordingly, the parties hereto agree as follows:
1. Agreement to Vote. The Stockholder agrees, subject to Section 2
below, to vote the Shares as follows:
(a) in favor of the adoption of the Merger Agreement;
(b) against the approval of any proposal relating to a competing
merger or business combination involving an acquisition of ComBanc or the
purchase of all or a substantial portion of the assets of ComBanc by any
person or entity other than FDEF or an affiliate of FDEF; and
(c) against any other transaction which is inconsistent with the
obligations of ComBanc under the Merger Agreement.
2. Limitation on Voting Power. It is expressly understood and
acknowledged that nothing contained herein is intended to restrict the
Stockholder from voting on any matter, or otherwise from acting, in the
Stockholder's capacity as a director or officer of ComBanc with respect to any
matter, including but not limited to, the management or operation of ComBanc.
3. Termination. This Agreement shall terminate on the earlier of (a)
the date on which the Merger Agreement is terminated in accordance with
Article Ten of the Merger Agreement, (b) the date on which the merger
contemplated by the Merger Agreement is consummated, or (c) the death of the
Stockholder.
4. Representations, Warranties, and Additional Covenants of the
Stockholder. The Stockholder hereby represents and warrants to FDEF that (a)
the Stockholder has the capacity and all necessary power and authority to vote
the Shares, and (b) this Agreement constitutes a legal, valid, and binding
obligation of the Stockholder, enforceable in accordance with its terms,
except as may be limited by bankruptcy, insolvency, or similar laws affecting
enforcement of creditors rights generally. The Stockholder further agrees
that, during the term of this Agreement, the Stockholder will not, without the
prior written consent of FDEF, which consent shall not be unreasonably
withheld, sell, pledge, or otherwise voluntarily dispose of any of the Shares
which are owned by the Stockholder or take any other voluntary action which
would have the effect of removing the Stockholder's power to vote the Shares
or which would be inconsistent with this Agreement. Notwithstanding the
foregoing, the Stockholder may transfer all or a portion of the Shares to an
immediate family member, but only if the transferee executes an identical
Voting Agreement.
5. Specific Performance. The undersigned hereby acknowledges that
damages would be an inadequate remedy for any breach of the provisions of this
Agreement and agrees that the obligations of the Stockholder shall be
specifically enforceable and that FDEF shall be entitled to injunctive or
other equitable relief upon such a breach by the Stockholder. The Stockholder
further agrees to waive any bond in connection with obtaining any such
injunctive or equitable relief. This provision is without prejudice to any
other rights that FDEF may have against the Stockholder for any failure to
perform his obligations under this Agreement.
6. Governing Law. This Agreement shall be construed and enforced in
accordance with the laws of the State of Ohio without regard to any of its
conflict of laws principles.
7. Capitalized Terms. Capitalized terms used herein without definition
shall have the meanings attributed to such terms in the Merger Agreement.
IN WITNESS WHEREOF, the undersigned have executed or caused to be
executed this Agreement as of the day and year first above written.
STOCKHOLDER FIRST DEFIANCE FINANCIAL CORP.
_____________________________________ By:___________________________
Name:_________________________
Print Name:__________________________ Title:________________________
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EXHIBIT C
Non-Compete Agreement
This Non-Disclosure and Non-Competition Agreement (this
"Agreement") is made and entered into this ____ day of _______________, 200_ by
and between First Federal Bank of the Midwest, a federal savings bank ("First
Federal"), and the undersigned ("Member") for the benefit of First Federal.
RECITALS
A. First Defiance Financial Corp. and First Federal have spent
and continue to spend considerable time, money and effort developing their
business (the "Business").
B. Member desires to serve as a member of the Advisory Board of
First Federal and First Federal desires to have Member serve as such.
C. As a member of the Advisory Board, Member may discover the
names of First Federal's customers, its method of doing business, and other
valuable knowledge in connection with the Business.
D. For the proper protection of the Business it is essential
that all matters connected with, arising out of, or pertaining to the Business
and its method of operation, and the names of its customers, be kept secret;
and that the good will, customer contacts and customer relations developed in
the Business, together with the benefits of the advertising and promotion of
the Business and products be preserved.
NOW, THEREFORE, in consideration of the covenants and agreements
set forth in this Agreement, First Federal and Member hereby covenant and agree
as follows:
1. Secret and Confidential Information. Member agrees to treat
as confidential all information whether of a technical or business nature,
belonging to the Business which is possessed by Member, which may be disclosed
to Member or which Member may develop in the course of Member's service on the
Advisory Board ("Service"), including, without limitation, financial data and
statements, pricing and pricing strategies and plans, business plans, marketing
plans, customer lists, and account lists ("Confidential Information"). For
purposes of this Agreement, Confidential Information does not include
information which (i) becomes generally available to the public other than as a
result of a disclosure by Member, (ii) is developed by Member independent of
any confidential information received from First Federal, or (iii) is lawfully
obtained by Member from a third party outside of this Agreement. Member shall
not disclose, publish or otherwise use, either during Member's Service or after
termination of Member's Service, any such Confidential Information, trade
secrets or secret information without the prior written consent of First
Federal.
2. Return of Business Property. Member agrees that following
Member's termination of Service for any reason, Member will promptly return to
First Federal all financial and business documents, operations manuals,
business plans, information pertaining to pricing of products and services,
customers, profit margins and the design of saving and lending products, and
other materials of a confidential nature in any way relating to the Business
which are in Member's possession and/or made available to Member during
Member's Service, together with all existing copies, however reproduced
including paper documents and computer data or other media however stored.
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3. Non-Solicitation. Member recognizes that First Federal's
workforce constitutes an important and vital aspect of its Business operations.
Therefore, Member will not hire or solicit, or assist anyone in the hiring or
soliciting of, any of First Defiance Financial Corp.'s, First Federal's or any
of their affiliates employees, independent contractors, or subcontractors,
without the express prior written consent of First Federal, for the duration of
Member's Service.
4. Non-Competition. Member shall not for a period of twelve months
following the date of this Agreement do any of the following:
(i) Directly or indirectly engage in business with or on behalf of, or
(ii) Assist or have an active interest in (whether as proprietor,
partner, investor, greater than 5% shareholder, officer,
director or any type of principal whatsoever); or
(iii) Enter the employment of or act as agent for, or advisor or
consultant to,
any person, firm, partnership, association, corporation or business
organization, entity or enterprise, including without limitation,
enterprises involving persons related by blood or marriage to
Member, and whether or not pursued for gain, profit, or other
pecuniary advantage, which is, or to Member's knowledge is planning
to, or to Member's knowledge is about to become, directly or
indirectly, engaged in the business of providing financial products
and services including but not limited to any of the following:
consumer and business financial products, mortgage brokerage
services, mortgage loans, checking accounts, savings accounts,
individual retirement accounts, loan accounts, safe deposit boxes,
certificates of deposit and related products and services, to any
person, firm, partnership, association, corporation or business
organization, entity or enterprise within a circle extending 50
miles from any office of First Federal or its affiliates.
Member herewith recognizes and expresses that the obligations and
restrictions imposed by the foregoing paragraphs are reasonable and proper in
order to protect First Federal from the loss of valuable assets, business
methods, and other trade secrets.
5. Payments to Member. In consideration and exchange for the
covenants and agreements set forth in this Agreement, First Federal shall pay
to Member the sum of $500 per Advisory Board meeting that is attended by
Member.
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6. Legal Covenants. Member agrees that any future claim or
cause of action Member has against First Federal or its affiliates, whether
based on this Agreement or otherwise, does not constitute a defense to the
enforcement by First Federal of the covenants within this Agreement. Both
Member and First Federal expressly agree that it is the intent of this
Agreement to comply with any and all policy, statutory and common law. If any
of the contents of this Agreement are determined to be unlawful, such sentence,
paragraph, clause or combination of same, shall be void; yet the remainder of
the Agreement shall remain binding on the signing parties. In the event a
portion of this Agreement is determined to be unlawful, it is agreed by both
parties that the court shall substitute a reasonable, judicially enforceable
limitation in its place.
Member understands, acknowledges and agrees that any violation of
Member's covenants and agreements set forth in this Agreement will cause
irreparable injury to First Federal, and therefore, First Federal may enforce
this Agreement if necessary by means of injunction as well as institution of a
civil action for damages or by any other appropriate legal remedy.
Member agrees to indemnify and hold First Federal harmless from and
against any and all loss, cost, damage, or expense, including without
limitation, attorneys' fees that arises out of any breach by Member of this
Agreement.
7. Relationship of Parties. Member is not an employee of
First Federal and, as a result, shall not be entitled to any of the employee
benefits provided to First Federal employees.
8. Governing Law; Jurisdiction. This Agreement shall be
governed by and construed and enforced in accordance with the laws of the State
of Ohio. Any action, suit or proceeding in respect of or arising out of this
Agreement or the transactions contemplated hereby may be prosecuted as to any
one or more of the parties hereto in the courts of the State of Ohio. EACH
PARTY HERETO CONSENTS AND SUBMITS TO THE EXERCISE OF JURISDICTION OVER HIS
PERSON BY ANY COURT SITUATED IN OHIO AND HAVING JURISDICTION OVER THE SUBJECT
MATTER OF ANY ACTION, SUIT OR PROCEEDING ARISING OUT OF OR IN RESPECT OF THIS
AGREEMENT AND THE TRANSACTIONS CONTEMPLATED HEREBY.
9. Entire Agreement. This Agreement constitutes the entire
agreement concerning the subject matters set forth herein and supersedes any
and all prior agreements or understandings between First Federal and Member
with regard to non-disclosure and non-competition.
10. Successors and Assigns. The privileges and benefits of this
Agreement shall be extended to the successors and assigns of First Federal.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be executed and delivered as of the date first above written.
Attest: FIRST FEDERAL BANK OF THE MIDWEST
______________________________ By:___________________________
___________________________
its________________________
MEMBER
______________________________ ______________________________
______________________________
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