[FORM OF OPTION]
EXHIBIT 2
STOCK OPTION AGREEMENT
THIS STOCK OPTION AGREEMENT ("Stock Option Agreement") dated
December 18, 1997, is by and between SOVEREIGN BANCORP, INC., a Pennsylvania
corporation ("Sovereign") and FIRST HOME BANCORP INC., a New Jersey
corporation ("First Home").
BACKGROUND
1. Sovereign and First Home desire to enter into an
Agreement and Plan of Merger, dated December 18, 1997 (the "Agreement"),
providing, among other things, for the acquisition by Sovereign of First Home
through the merger of First Home with and into Sovereign, with Sovereign
surviving the merger (the "Merger").
2. As a condition to Sovereign to enter into the Plan, First
Home is granting to Sovereign an option to purchase up to that number of
shares of common stock, no par value (the "Common Stock"), of First Home as
shall equal 19.9% of shares of Common Stock of First Home issued and
outstanding immediately prior to such purchase, on the terms and conditions
hereinafter set forth.
AGREEMENT
In consideration of the foregoing and the mutual covenants
and agreements set forth herein, Sovereign and First Home, intending to be
legally bound hereby, agree:
1. Grant of Option. First Home hereby grants to Sovereign,
on the terms and conditions set forth herein, the option to purchase (the
"Option") up to 538,975 shares (as adjusted as set forth herein, the "Option
Shares") of Common Stock of First Home at a price per share (as adjusted as
set forth herein, the "Option Price") equal to $30.00, provided, however, that
in no event shall the number of Option Shares for which the Option is
exercisable exceed 19.9% of the issued and outstanding shares of Common Stock
of First Home without giving effect to any shares subject to or issued
pursuant to the Option.
2. Exercise of Option. Provided that (i) Sovereign shall not
be on the date of exercise in breach of the agreements or covenants contained
in the Agreement or herein, and (ii) no preliminary or permanent injunction or
other order against the delivery of shares covered by the Option issued by any
court of competent jurisdiction in the United States shall be in effect, upon
or after the occurrence of a Triggering Event (as such term is hereinafter
defined) and until termination of this Stock Option Agreement in accordance
with the provisions of Section 23, Sovereign may exercise the Option, in whole
or in part, at any time or one or more times, from time to time. As used
herein, the term "Triggering Event" means the occurrence of any of the
following events:
(a) a person or group (as such terms are defined in
the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
and the rules and regulations thereunder), other than Sovereign or an
affiliate of Sovereign, acquires beneficial ownership (within the
meaning of Rule 13d-3 under the Exchange Act) of 10% or more of the
then outstanding shares of Common Stock (excluding any shares
eligible to be reported on Schedule 13G of the Securities and
Exchange Commission);
(b) a person or group, other than Sovereign or an
affiliate of Sovereign, enters into an agreement, letter of intent,
or similar document with First Home pursuant to which such person or
group or any affiliate of such person or group would (i) merge or
consolidate, or enter into any similar transaction, with First Home,
(ii) acquire all or substantially all of the assets or liabilities of
First Home or all or substantially all of the assets or liabilities
of First Home Savings, the wholly-owned subsidiary of First Home
("First Home Savings"), or (iii) acquire beneficial ownership of
securities representing, or the right to acquire beneficial ownership
or to vote securities representing, 10% or more of the then
outstanding shares of Common Stock (excluding any shares eligible to
be reported on Schedule 13G of the Securities and Exchange
Commission) or the then outstanding shares of common stock of First
Home Savings, or
(c) a person or group, other than Sovereign or an
affiliate of Sovereign, publicly announces a bona fide proposal
(including a written communication that is or becomes the subject of
public disclosure) for (i) any merger, consolidation or acquisition
of all or substantially all the assets or liabilities of First Home
or all or substantially all the assets or liabilities of First Home
Savings, or any other business combination involving First Home or
First Home Savings, or (ii) a transaction involving the transfer of
beneficial ownership of securities representing, or the right to
acquire beneficial ownership or to vote securities representing, 10%
or more of the then outstanding shares of Common Stock or the then
outstanding shares of common stock of First Home Savings
(collectively, a "Proposal"), and thereafter, if such Proposal has
not been Publicly Withdrawn (as such term is hereinafter defined) at
least 30 days prior to the meeting of shareholders of First Home
called to vote on the Merger, First Home's shareholders fail to
approve the Merger by the vote required by applicable law at the
meeting of shareholders called for such purpose or such meeting has
been cancelled; or
(d) a person or group, other than Sovereign or an
affiliate of Sovereign, makes a bona fide Proposal and thereafter,
but before such Proposal has been Publicly Withdrawn, First Home
willfully takes any action in a manner which would likely result in
the failure of either party to satisfy a material condition to the
closing of the Merger or materially reduce the value of the
transaction to Sovereign; or
(e) First Home breaches, in any material respect,
any binding term of the Agreement with respect to the Merger, or this
Stock Option Agreement after a Proposal is made and before it is
Publicly Withdrawn or publicly announces an intention to authorize,
recommend or accept any such Proposal;
provided, however, that any purchase of shares upon exercise of the Option
shall be subject to compliance with applicable law.
If more than one of the transactions giving rise to a
Triggering Event under this Section 2 is undertaken or effected, then all such
transactions shall give rise only to one Triggering Event, which Triggering
Event shall be deemed continuing for all purposes hereunder until all such
transactions are abandoned.
"Publicly Withdrawn" for purposes of this Section 2 shall
mean an unconditional bona fide withdrawal of the Proposal coupled with a
public announcement of no further interest in pursuing such Proposal or in
acquiring any controlling influence over First Home or in soliciting or
inducing any other person (other than Sovereign or an affiliate of Sovereign)
to do so.
Notwithstanding the foregoing, the obligation of First Home
to issue Option Shares upon exercise of the Option shall be deferred (but
shall not terminate) (i) until the receipt of all required governmental or
regulatory approvals or consents necessary for First Home to issue the Option
Shares, or Sovereign to exercise the Option, or until the expiration or
termination of any waiting period required by law, or (ii) so long as any
injunction or other order, decree or ruling issued by any federal or state
court of competent jurisdiction is in effect which prohibits the sale or
delivery of the Option Shares, and, in each case, notwithstanding any
provision to the contrary set forth herein, the Option shall not expire or
otherwise terminate.
First Home shall notify Sovereign promptly in writing of the
occurrence of any Triggering Event known to it, it being understood that the
giving of such notice by First Home shall not be a condition to the right of
Sovereign to exercise the Option. Subject to compliance with the applicable
banking and securities laws or regulations, First Home will not take any
action which would have the effect of preventing or disabling First Home from
delivering the Option Shares to Sovereign upon exercise of the Option or
otherwise performing its obligations under this Stock Option Agreement. In the
event Sovereign wishes to exercise the Option, Sovereign shall send a written
notice to First Home (the date of which is hereinafter referred to as the
"Notice Date") specifying the total number of Option Shares it wishes to
purchase and a place and date between two and ten business days inclusive from
the Notice Date for the closing of such a purchase (a "Closing"); provided,
however, that a Closing shall not occur prior to two days after the later of
receipt of any necessary regulatory approvals or the expiration of any legally
required notice or waiting period, if any.
3. Repurchase of Option by First Home.
(a) At the request of Sovereign at any time
commencing upon the first occurrence of a Repurchase Event (as
defined in Section 3(d)) and ending 18 months immediately thereafter,
First Home shall repurchase from Sovereign (x) the Option and (y) all
shares of Common Stock purchased by Sovereign pursuant hereto with
respect to which Sovereign then has beneficial ownership. The date on
which Sovereign exercises its rights under this Section 3 is referred
to as the "Request Date." Such repurchase shall be at an aggregate
price (the "Section 3 Repurchase Consideration") equal to the sum of:
(i) the aggregate Purchase Price paid by Sovereign for any shares of
Common Stock acquired pursuant to the Option with respect to which
Sovereign then has beneficial ownership; (ii) the excess, if any, of
(x) the Applicable Price (as defined below) for each share of Common
Stock over (y) the Option Price (subject to adjustment pursuant to
Section 6), multiplied by the number of shares of Common Stock with
respect to which the Option has not been exercised; and (iii) the
excess, if any, of the Applicable price over the Option Price
(subject to adjustment pursuant to Section 6) paid (or, in the case
of Option Shares with respect to which the Option has been exercised,
but the Closing has not occurred, payable) by Sovereign for each
share of Common Stock with respect to which the Option has been
exercised and with respect to which Sovereign then has beneficial
ownership, multiplied by the number of such shares.
(b) If Sovereign exercises its rights under this
Section 3, First Home shall, within ten (10) business days after the
Request Date, pay the Section 3 Repurchase Consideration to Sovereign
in immediately available funds, and contemporaneously with such
payment, Sovereign shall surrender to First Home the Option and the
certificate evidencing the shares of Common Stock purchased
thereunder with respect to which Sovereign then has beneficial
ownership, and Sovereign shall warrant that it has sole record and
beneficial ownership of such shares, and that the same are then free
and clear of all liens, claims, charges and encumbrances of any kind
whatsoever. Notwithstanding the foregoing, to the extent that prior
notification to or approval of any banking agency or department of
any federal or state government, including without limitation the
OTS, the FDIC, or the respective staffs thereof (the "Regulatory
Authority"), is required in connection with the payment of all or any
portion of the Section 3 Repurchase Consideration, Sovereign shall
have the ongoing option to revoke its request for repurchase pursuant
to Section 3, in whole or in part, or to require that First Home
deliver from time to time that portion of the Section 3 Repurchase
Consideration that it is not then so prohibited from paying and
promptly file the required notice or application for approval and
expeditiously process the same (and each party shall cooperate with
the other in the filing of any such notice or application and the
obtaining of any such approval), in which case the ten (10) business
day period of time that would otherwise run pursuant to the preceding
sentence for the payment of the portion of the Section 3 Repurchase
Consideration shall run instead from the date on which, as the case
may be, any required notification period has expired or been
terminated or such approval has been obtained and, in either event,
any requisite waiting period shall have passed. If any Regulatory
Authority disapproves of any part of First Home's proposed repurchase
pursuant to this Section 3, First Home shall promptly give notice of
such fact to Sovereign. If any Regulatory Authority prohibits the
repurchase pursuant to this Section 3, First Home shall promptly give
notice of such fact to Sovereign. If any Regulatory Authority
prohibits the repurchase in part but not in whole, then Sovereign
shall have the right (i) to revoke the repurchase request or (ii) to
the extent permitted by such Regulatory Authority, determine whether
the repurchase should apply to the Option and/or Option Shares and to
what extent to each, and Sovereign shall thereupon have the right to
exercise the Option as to the number of Option Shares for which the
Option was exercisable at the Request Date less the sum of the number
of shares covered by the Option in respect of which payment has been
made pursuant to Section 3(a)(ii) and the number of shares covered by
the portion of the Option (if any) that has been repurchased.
Sovereign shall notify First Home of its determination under the
preceding sentence within five (5) business days of receipt of notice
of disapproval of the repurchase.
(c) For purposes of this Agreement, the "Applicable
Price" means the highest of (i) the highest price per share of Common
Stock paid for any such share by the person or groups described in
Section 3(d)(i), (ii) the price per share of Common Stock received by
a holder of Common Stock in connection with any merger or other
business combination transaction described in Section 3(d)(ii), (iii)
or (iv), or (iii) the highest closing sales price per share of Common
Stock quoted on the Nasdaq Stock Market during the 40 business days
preceding the Request Date; provided, however, that in the event of a
sale of less than all of First Home's assets, the Applicable Price
shall be the sum of the price paid in such sale for such assets and
the current market value of the remaining assets of First Home as
determined by a nationally-recognized investment banking firm
selected by Sovereign, divided by the number of shares of Common
Stock outstanding at the time of such sale. If the consideration to
be offered, paid or received pursuant to either of the foregoing
clauses (i) or (ii) shall be other than in cash, the value of such
consideration shall be determined in good faith by an independent
nationally-recognized investment banking firm selected by Sovereign
and reasonably acceptable to First Home, which determination shall be
conclusive for all purposes of this Agreement.
(d) As used herein, a Repurchase Event shall occur
if (i) any person or group (as such terms are defined in the Exchange
Act and the rules and regulations thereunder), other than Sovereign
or an affiliate of Sovereign, acquires beneficial ownership (within
the meaning of Rule 13d-3 under the Exchange Act) of, or the right to
acquire beneficial ownership of, 10% or more of the then-outstanding
shares of Common Stock, (ii) First Home shall have merged or
consolidated with any person, other than Sovereign or an affiliate of
Sovereign, and shall not be the surviving or continuing corporation
of such merger or consolidation, (iii) any person, other than
Sovereign or an affiliate of Sovereign, shall have merged into First
Home and First Home shall be the surviving corporation, but, in
connection with such merger, the then-outstanding shares of Common
Stock have been changed into or exchanged for stock or other
securities of First Home or any other person or cash or any other
property or the outstanding shares of Common Stock immediately prior
to such merger shall after such merger represent less than 50% of the
outstanding shares and share equivalents of the surviving corporation
or (iv) First Home shall have sold or otherwise transferred more than
10% of its consolidated assets to any person, other than Sovereign or
an affiliate of Sovereign.
4. Payment and Delivery of Certificates. At any Closing
hereunder, (a) Sovereign will make payment to First Home of the aggregate
price for the Option Shares so purchased by wire transfer of immediately
available funds to an account designated by First Home, (b) First Home will
deliver to Sovereign a stock certificate or certificates representing the
number of Option Shares so purchased, registered in the name of Sovereign or
its designee, in such denominations as were specified by Sovereign in its
notice of exercise, and (c) Sovereign will pay any transfer or other taxes
required by reason of the issuance of the Option Shares so purchased.
A legend will be placed on each stock certificate evidencing
Option Shares issued pursuant to this Stock Option Agreement, which legend
will read substantially as follows:
"The shares of stock evidenced by this certificate
have not been the subject of a registration statement filed under the
Securities Act of 1933, as amended (the "Act"), and declared
effective by the Securities and Exchange Commission. These shares may
not be sold, transferred or otherwise disposed of prior to such time
unless First Home Corp. receives an opinion of counsel reasonably
acceptable to it stating that an exemption from the registration
provisions of the Act is available for such transfer."
5. Registration Rights. Upon or after the occurrence of a
Triggering Event and upon receipt of a written request from Sovereign, First
Home shall prepare and file as soon as practicable a registration statement
under the Securities Act of 1933, as amended (the "Securities Act"), with the
Securities and Exchange Commission covering the Option and such number of
Option Shares as Sovereign shall specify in its request, and First Home shall
use its best efforts to cause such registration statement to be declared
effective in order to permit the sale or other disposition of the Option and
the Option Shares, provided that Sovereign shall in no event have the right to
have more than one such registration statement become effective, and provided
further that First Home shall not be required to prepare and file any such
registration statement in connection with any proposed sale with respect to
which counsel to First Home delivers to First Home and to Sovereign its
opinion to the effect that no such filing is required under applicable laws
and regulations with respect to such sale or disposition; provided, however,
that First Home may delay any registration of Option Shares above for a period
not exceeding 90 days in the event that First Home shall in good faith
determine that any such registration would adversely affect an offering or
contemplated offering of other securities by First Home. Sovereign shall
provide all information reasonably requested by First Home for inclusion in
any registration statement to be filed hereunder. In connection with such
filing, First Home shall use its commercially reasonable efforts to cause to
be delivered to Sovereign such certificates, opinions, accountant's letters
and other documents as Sovereign shall reasonably request and as are
customarily provided in connection with registration of securities under the
Securities Act. First Home shall provide to Sovereign such number of copies of
the preliminary prospectus and final prospectus and any amendments and
supplements thereto as Sovereign may reasonably request.
All reasonable expenses incurred by First Home in complying
with the provisions of this Section 5, including, without limitation, all
registration and filing fees, reasonable printing expenses, reasonable fees
and disbursements of counsel for First Home and blue sky fees and expenses,
shall be paid by First Home. Underwriting discounts and commissions to brokers
and dealers relating to the Option Shares, fees and disbursements of counsel
to Sovereign and any other expenses incurred by Sovereign in connection with
such filing shall be borne by Sovereign. In connection with such filing, First
Home shall indemnify and hold harmless Sovereign against any losses, claims,
damages or liabilities, joint or several, to which Sovereign may become
subject, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon any untrue statement or
alleged untrue statement of any material fact contained in any preliminary or
final registration statement or any amendment or supplement thereto, or arise
out of or are based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the
statements therein not misleading; and First Home will reimburse Sovereign for
any legal or other expense reasonably incurred by Sovereign in connection with
investigating or defending any such loss, claim, damage, liability or action;
provided, however, that First Home will not be liable in any case to the
extent that any such loss, claim, damage or liability arises out of or is
based upon an untrue statement or alleged untrue statement or omission or
alleged omission made in such preliminary or final registration statement or
such amendment or supplement thereto in reliance upon and in conformity with
written information furnished by or on behalf of Sovereign specifically for
use in the preparation thereof. Sovereign will indemnify and hold harmless
First Home to the same extent as set forth in the immediately preceding
sentence but only with reference to written information furnished by or on
behalf of Sovereign for use in the preparation of such preliminary or final
registration statement or such amendment or supplement thereto; and Sovereign
will reimburse First Home for any legal or other expense reasonably incurred
by First Home in connection with investigating or defending any such loss,
claim, damage, liability or action. Notwithstanding anything to the contrary
contained herein, no indemnifying party shall be liable for any settlement
effected without its prior written consent.
6. Adjustment Upon Changes in Capitalization. In the event
of any change in the Common Stock by reason of stock dividends, split-ups,
recapitalizations, combinations, conversions, divisions, exchanges of shares
or the like, then the number and kind of Option Shares and the Option Price
shall be appropriately adjusted.
7. Filings and Consents. Each of Sovereign and First Home
will use its commercially reasonable efforts to make all filings with, and to
obtain consents of, all third parties and governmental authorities necessary
to the consummation of the transactions contemplated by this Stock Option
Agreement. Within 10 days from the date hereof, Sovereign shall file a report
of beneficial ownership on Schedule 13D with the Securities and Exchange
Commission under the Exchange Act which discloses the rights of Sovereign
hereunder.
8. Representations and Warranties of First Home. First Home
hereby represents and warrants to Sovereign as follows:
(a) Due Authorization. First Home has the requisite
corporate power and authority to execute, deliver and perform this
Stock Option Agreement and all corporate action necessary for
execution, delivery and performance of this Stock Option Agreement
has been duly taken by First Home. This Stock Option Agreement
constitutes a legal, valid and binding obligation of First Home,
enforceable against First Home in accordance with its terms (except
as may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium, fraudulent transfer and similar laws of
general applicability relating to or affecting creditors' rights or
by general equity principles).
(b) Authorized Shares. First Home has taken all
necessary corporate action to authorize and reserve for issuance all
shares of Common Stock that may be issued pursuant to any exercise of
the Option.
9. Representations and Warranties of Sovereign. Sovereign
hereby represents and warrants to First Home that Sovereign has the requisite
corporate power and authority to execute, deliver and perform this Stock
Option Agreement and all corporate action necessary for execution, delivery
and performance of this Stock Option Agreement has been duly taken by
Sovereign. This Stock Option Agreement constitutes a legal, valid and binding
obligation of Sovereign, enforceable against Sovereign in accordance with its
terms (except as may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium, fraudulent transfer and similar laws of general
applicability relating to or affecting creditors' rights or by general equity
principles). Sovereign or its assignee agrees to execute a standard investment
representation letter with respect to its acquisition of any First Home
securities acquired in connection with this transaction.
10. Specific Performance. The parties hereto acknowledge
that damages would be an inadequate remedy for a breach of this Stock Option
Agreement and that the obligations of the parties hereto shall be specifically
enforceable.
11. Entire Agreement. This Stock Option Agreement and the
Agreement constitute the entire agreement between the parties with respect to
the subject matter hereof and supersede all other prior agreements and
understandings, both written and oral, among the parties or any of them with
respect to the subject matter hereof.
12. Assignment or Transfer. Sovereign may not sell, assign
or otherwise transfer its rights and obligations hereunder, in whole or in
part, to any person or group of persons other than to a subsidiary of
Sovereign subject to compliance with applicable securities laws. Sovereign
represents that it is acquiring the Option for Sovereign's own account and not
with a view to, or for sale in connection with, any distribution of the Option
or the Option Shares. Sovereign is aware that neither the Option nor the
Option Shares is the subject of a registration statement filed with, and
declared effective by, the Securities and Exchange Commission pursuant to
Section 5 of the Securities Act, but instead each is being offered in reliance
upon the exemption from the registration requirement provided by Section 4(2)
thereof and the representations and warranties made by Sovereign in connection
therewith.
13. Amendment of Stock Option Agreement. By mutual consent
of the parties hereto, this Stock Option Agreement may be amended in writing
at any time, for the purpose of facilitating performance hereunder or to
comply with any applicable regulation of any governmental authority or any
applicable order of any court or for any other purpose.
14. Validity. The invalidity or unenforceability of any
provision of this Stock Option Agreement shall not affect the validity or
enforceability of any other provisions of this Stock Option Agreement, which
shall remain in full force and effect.
15. Notices. All notices, requests, consents and other
communications required or permitted hereunder shall be in writing and shall
be deemed to have been duly given when delivered personally, by telegram or
telecopy, or by registered or certified mail (postage prepaid, return receipt
requested) to the respective parties as follows:
(i) If to Sovereign, to:
Sovereign Bancorp, Inc.
0000 Xxxxxxxxx Xxxxxxxxx
Xxxxxxxxxx, Xxxxxxxxxxxx 00000
Attention: Xxx X. Xxxxx,
President and Chief Executive
Officer
Telecopy No.: (000) 000-0000
with a copy to:
Xxxxxxx & Xxx
000 Xxxxx Xxxxx Xxxxxx
X.X. Xxx 000
Xxxxxxx, Xxxxxxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxxx
Xxxxxxx X. Xxxxxxxx
Telecopy No.: (000) 000-0000
(ii) If to First Home, to:
First Home Bancorp Inc.
000 Xxxxx Xxxxxxxx
Xxxxxxxxxx, Xxx Xxxxxx 00000
Attention: Xxxxxxx X. Xxxxxx,
Chairman of the Board, President
and Chief Executive Officer
Telecopy No.: (000) 000-0000
with copies to:
Blank Rome Comisky & XxXxxxxx
Xxx Xxxxx Xxxxxx
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000
Attention: Xxxxx X. Xxxxxx, Esquire
Telecopy No.: (000) 000-0000
or to such other address as the person to whom notice is to be given may have
previously furnished to the others in writing in the manner set forth above
(provided that notice of any change of address shall be effective only upon
receipt thereof).
16. Governing Law. This Stock Option Agreement shall be
governed by and construed in accordance with the domestic internal law (but
not the law of conflicts of law) of the Commonwealth of Pennsylvania.
17. Captions. The captions in this Stock Option Agreement
are inserted for convenience and reference purposes, and shall not limit or
otherwise affect any of the terms or provisions hereof.
18. Waivers and Extensions. The parties hereto may, by
mutual consent, extend the time for performance of any of the obligations or
acts of either party hereto. Each party may waive (i) compliance with any of
the covenants of the other party contained in this Stock Option Agreement
and/or (ii) the other party's performance of any of its obligations set forth
in this Stock Option Agreement.
19. Parties in Interest. This Stock Option Agreement shall
be binding upon and inure solely to the benefit of each party hereto, and,
nothing in this Stock Option Agreement, express or implied, is intended to
confer upon any other person any rights or remedies of any nature whatsoever
under or by reason of this Stock Option Agreement.
20. Counterparts. This Stock Option Agreement may be
executed in two or more counterparts, each of which shall be deemed to be an
original, but all of which shall constitute one and the same agreement.
21. Expenses. Except as otherwise provided herein, all costs
and expenses incurred by the parties hereto in connection with the
transactions contemplated by this Stock Option Agreement or the Option shall
be paid by the party incurring such cost or expense.
22. Defined Terms. Capitalized terms which are used but not
defined herein shall have the meanings ascribed to such terms in the
Agreement.
23. Termination. This Stock Option Agreement shall terminate
and be of no further force or effect upon the earliest to occur of (A) the
Effective Time or (B) termination of the Agreement in accordance with the
terms thereof, except that if (i) the Agreement is terminated by Sovereign
pursuant to Section 6.01(b)(i) of the Agreement or pursuant to Section 6.01(d)
of the Agreement (provided the failure of the occurrence of the event
specified in Section 6.01(b)(i) of the Agreement shall be due to the failure
of First Home to perform or observe its agreements set forth in the Agreement
required to be performed or observed by First Home prior to the Closing Date
(as defined in the Agreement)), this Stock Option Agreement shall not
terminate until one year after the date of termination of the Agreement or
(ii) the Agreement is terminated as a result of the failure of First Home
shareholders to approve the Agreement following either a withdrawal or
modification by a director of First Home of a prior recommendation to approve
the Agreement or a failure of a director of First Home to recommend approval
of the Agreement, this Stock Option Agreement shall not terminate until one
year after the date of termination of the Agreement.
IN WITNESS WHEREOF, each of the parties hereto, pursuant to
resolutions adopted by its Board of Directors, has caused this Stock Option
Agreement to be executed by its duly authorized officer and has caused its
corporate seal to be affixed hereunto and to be duly attested, all as of the
day and year first above written.
SOVEREIGN BANCORP, INC.
By /s/ Xxx X. Xxxxx
----------------------------
Xxx X. Xxxxx,
President and Chief Executive Officer
FIRST HOME BANCORP INC.
By /s/ Xxxxxxx X. Xxxxxx
----------------------------
Xxxxxxx X. Xxxxxx,
Chairman of the Board,
President and Chief
Executive Officer