EXHIBIT 99.7
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VOTING AND SALE AGREEMENT
between
HANMI FINANCIAL CORPORATION
and
THE TRUST ESTABLISHED PURSUANT TO THE TRUST
AGREEMENT DATED AS OF OCTOBER 31, 2003
BETWEEN KOREA EXCHANGE BANK AND MR. L. XXXX XXXXXXXX
Dated as of December 22, 2003
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VOTING AND SALE AGREEMENT
VOTING AND SALE AGREEMENT (the "Agreement"), dated as of December
22, 2003, by and between Hanmi Financial Corporation, a Delaware corporation
("Buyer") and the Trust (the "Trust") established pursuant to the Trust
Agreement dated as of October 31, 2003 between Korea Exchange Bank ("KEB") and
Mr. L. Xxxx Xxxxxxxx (the "Trustee").
WHEREAS, pursuant to that certain Agreement and Plan of Merger (the
"Merger Agreement"; terms defined therein are used herein as so defined) dated
as of December 22, 2003, by and between Buyer, Hanmi Bank, a California banking
corporation ("Buyer Sub"), and Pacific Union Bank, a California banking
corporation (the "Company"), subject to the terms and conditions thereof, (i)
the Company will merge with and into Buyer Sub with Buyer Sub continuing as the
surviving corporation and (ii) except as expressly provided in the Merger
Agreement, each outstanding share of Company Common Stock will be converted into
the right to receive that number of shares of Buyer Common Stock equal to the
Exchange Ratio; and
WHEREAS, it is a requirement to Buyer's agreement to execute the
Merger Agreement that the Trust agree to (i) vote the 6,624,052 shares of
Company Common Stock it holds in trust for KEB (the "Shares") in favor of the
Merger and the Merger Agreement and (ii) immediately prior to the Merger, sell
that number of Shares (the "Purchased Shares") as determined in Section 4.2
hereof to Buyer for an amount in cash equal to the Purchase Price (as defined
below) per Purchased Share;
NOW, THEREFORE, in order to implement the foregoing and in
consideration of the mutual representations, warranties, covenants and
agreements contained herein and for other good and valuable consideration, the
receipt and adequacy of which are hereby acknowledged, the parties hereto agree
as follows:
ARTICLE I.
REPRESENTATIONS AND WARRANTIES OF THE TRUST
The Trust represents and warrants to Buyer as follows:
(a) the Trustee has full right, power and authority to execute and
deliver the Trust Agreement (the "Trust Agreement"), dated as of October 31,
2003 by and between Korea Exchange Bank, as grantor, and the Trustee, and to
perform its obligations thereunder; the Trust Agreement has been duly
authorized, executed and delivered by the Trustee and is valid, binding and
enforceable against the Trustee and KEB in accordance with its terms; and the
copy of the Trust Agreement previously provided to Buyer is a true, complete and
correct copy of such document as in effect on the date of this Agreement;
(b) the Trust has full right, power and authority to execute and
deliver this Agreement and to perform its obligations hereunder; and this
Agreement has been duly authorized, executed and delivered by the Trust and is
valid, binding and enforceable against the Trust in accordance with its terms;
(c) neither the execution and delivery of this Agreement nor the
performance of the transactions contemplated hereby by the Trust will (i) result
in any breach of any terms or provisions of, or constitute a default under, any
contract, agreement or instrument to which the Trust is a party or by which it
is bound, (ii) violate any law, statute, ordinance, writ, judgment, injunction,
rule, regulation, order or decree of any Governmental Entity applicable to the
Trust or by which any of its properties or assets may be bound or (iii) except
as may be required by the Trust Agreement, require any filing with, or permit,
consent or approval of, or the giving of any notice to, any Governmental Entity
other than the Requisite Regulatory Approvals;
(d) as of the date of this Agreement, there is no suit, action,
investigation or proceeding pending or, to the knowledge of the Trust,
threatened against or affecting the Trust before or by any Governmental Entity
that could reasonably be expected to materially impair the ability of the Trust
to perform its obligations under this Agreement on a timely basis;
(e) this Agreement and the transactions contemplated hereby have
been authorized by all necessary action on the part of the Trust on or prior to
the date hereof and no other proceedings on the part of the Trust are necessary
to authorize this Agreement and the transactions contemplated hereby; and
(f) the Trust (i) holds all right, title and interest in and to the
Shares, free and clear of any and all liens, charges, security interests,
pledges, options, rights of first refusal, limitations on voting rights,
restrictions, charges, proxies and other encumbrances whatsoever ("Liens"),
except as set forth in the Trust Agreement, (ii) has not appointed or granted
any proxy, which appointment or grant is still effective, with respect to any of
the Shares, and (iii) upon delivery of the Purchased Shares to Buyer against
payment of the Purchase Price therefor, Buyer will acquire good and valid title
to the Purchased Shares, free and clear of any and all Liens.
ARTICLE II.
APPROVAL OF THE MERGER AGREEMENT; RESTRICTIONS
Section 2.1. Approval of the Merger Agreement. The Trust covenants and
agrees that, at any meeting of the shareholders of the Company, however called,
in any action by written consent of the shareholders of the Company, or in any
other circumstances in which the Trust's vote, consent or other approval is
sought, the Trust shall vote the Shares:
(a) in favor of the adoption of the Merger Agreement and the
approval of the terms thereof and of the Merger and each of the other
transactions contemplated by the Merger Agreement and this Agreement;
(b) against any action or agreement that is intended or would be
reasonably likely to result in any conditions to Buyer's obligations under the
Merger Agreement or this Agreement not being fulfilled or would result in or
would reasonably be likely to result in a breach of any representation,
warranty, covenant or agreement of the Company under the Merger Agreement or of
the Trust under this Agreement;
(c) against any Acquisition Proposal;
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(d) against any amendment to the Company's articles of incorporation
or bylaws or any other material change in the Company's corporate or capital
structure; and
(e) against any other action or agreement that is intended, or would
reasonably be expected, to impede, interfere with, delay or postpone the Merger
or the other transactions contemplated by the Merger Agreement or this
Agreement, including but not limited to any non-ordinary course corporate
transaction such as a merger, consolidation, reorganization, recapitalization or
sale or transfer of a material amount of assets.
Section 2.2. Restrictions on Transfer. The Trust hereby covenants and
agrees that prior to the termination or expiration of this Agreement, except as
otherwise specifically contemplated hereby, the Trust shall not, and shall not
offer (other than as permitted by Section 2.4) or agree to, sell, transfer,
tender, assign, hypothecate or otherwise dispose of (including by means of
hedging transactions or derivative transactions), grant any proxy with respect
to, deposit into a voting trust, enter into a voting trust agreement or create
or permit to exist any Lien with respect to, the Shares; provided, however, that
after the date of the Company Stockholders Meeting, the Trust may (i) sell up to
100,000 Shares the proceeds of which will be used to pay its out-of-pocket fees
and expenses and (ii) sell such number of Shares as it may determine to be
appropriate so as to prevent the operation of Section 4.4 hereof.
Section 2.3. Additional Shares. Prior to the termination of this
Agreement, the Trust shall promptly notify Buyer of any new shares of Company
Common Stock acquired directly or beneficially by the Trust, if any, after the
date hereof. Any such shares shall become "Shares" within the meaning of this
Agreement.
Section 2.4. Nonsolicitation. Except to the extent the Company is
permitted to provide nonpublic information and/or engage in discussions or
negotiations in accordance with Section 7.2 of the Merger Agreement, prior to
the termination of this Agreement, the Trust shall not, and shall not authorize,
instruct or knowingly permit any of its investment bankers, attorneys,
accountants, consultants and other agents, advisors or intermediaries
(collectively, "Representatives") to, directly or indirectly, (i) solicit,
encourage or facilitate any inquiry, proposal or offer with respect to any
Acquisition Proposal or (ii) engage in any negotiations or discussions
concerning, or furnish to any person any non-public information with respect to,
or take any other action knowingly to facilitate, any inquiries or the making of
any proposal that constitutes or may be reasonably expected to lead to any
Acquisition Proposal.
Section 2.5. Notice. If any Person makes a proposal or inquiry or contacts
the Trust relating to the acquisition of beneficial ownership of any Shares or
any Acquisition Proposal, the Trust shall promptly notify Buyer in writing of
the identity of such Person and the material terms and conditions of such
proposal, inquiry or contact. The Trust shall keep Buyer reasonably apprised of
any material development with respect to such proposal. The Trust shall, and
shall cause its Representatives to, cease immediately and cause to be terminated
all existing discussions or negotiations, if any, with any Persons conducted
heretofore with respect to, or that could reasonably be expected to lead to, any
Acquisition Proposal or any other acquisition by any Person of the beneficial
ownership of any Shares.
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Section 2.6. Dissenters' Rights. The Trust hereby irrevocably waives any
rights of appraisal, or rights to dissent from the Merger, that the Trust may
have with respect to the Shares, and agrees not to commence or participate in,
and to take all actions necessary to opt out of any class in any class action
with respect to, any claim, derivative or otherwise, against the Company or any
of its subsidiaries (or any of their respective successors) relating to the
negotiation, execution and delivery of this Agreement or the Merger Agreement or
the consummation of the Merger and any of the other transactions contemplated
hereby or thereby.
Section 2.7. Successive Ownership. The Trust agrees that this Agreement
and its obligations hereunder shall attach to the Shares and shall be binding on
any Person to which legal or beneficial ownership of the Shares shall pass,
whether by operation of law or otherwise. In the event of any stock split, stock
dividend, merger, reorganization, recapitalization or other change in the
capital structure of the Company affecting the Company Common Stock, the number
of Shares, the number of Purchased Shares and the Purchase Price shall be deemed
adjusted appropriately and this Agreement and the obligations hereunder shall
attach to any additional shares of Company Common Stock issued to or acquired by
the Trust.
Section 2.8. Reasonable Best Efforts. The Trust agrees to cooperate and
use its reasonable best efforts to facilitate the procurement of all Requisite
Regulatory Approvals.
ARTICLE III.
CONDITIONS TO THE PURCHASE AND SALE OF THE PURCHASED SHARES
Section 3.1. Conditions to Buyer's Obligations. Buyer's obligation
hereunder to purchase the Purchased Shares is conditioned upon the following:
(a) all conditions to Buyer's obligations under the Merger Agreement
set forth in Sections 8.1 and 8.2 thereof (other than with respect to the
closing of the transactions provided for by this Agreement) shall have been
fulfilled or duly waived by Buyer;
(b) the representations and warranties of the Trust set forth in
Article I of this Agreement shall be true and correct in all material respects
as the date of this Agreement and as of the Share Closing Date (as defined
below) as though made on and as of the Share Closing Date; and
(c) the Trust shall have performed in all material respects all
obligations required by it to be performed under this Agreement on or prior to
the Share Closing Date.
Section 3.2. Conditions to the Trust's Obligations. The Trust's obligation
to sell the Purchased Shares is conditioned upon the fulfillment, as of the
Closing, or the waiver by the Company, of all conditions to the Company's
obligations under the Merger Agreement set forth in Sections 8.1 and 8.3 thereof
(other than with respect to the closing of the transactions provided for by this
Agreement).
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ARTICLE IV.
PURCHASE AND SALE OF THE PURCHASED SHARES
Section 4.1. Purchase of the Purchased Shares. At the Share Closing (as
defined below), the Trust shall assign, transfer and deliver to Buyer, and Buyer
shall purchase from the Trust, the Purchased Shares, free and clear of all
Liens.
Section 4.2. Purchase Price; Number of Purchased Shares. On the Share
Closing Date and subject to the terms and conditions set forth in this
Agreement, in consideration of the sale, assignment, transfer and delivery of
the Shares by the Trust, Buyer shall pay to the Trust that amount of U.S.
dollars per Purchased Share as shall equal the Purchase Price by wire transfer
of immediately available funds to an account designated in writing to Buyer by
the Trust not less than two (2) business days prior to the Closing Date. The
"Purchase Price" shall equal the product of (i) the Exchange Ratio multiplied by
(ii) the Buyer Closing Share Price. The "Purchased Shares" shall be that number
of Shares equal to the quotient of (A) the Cash Component minus the Cash
Reduction Amount, if any, divided by (B) the Purchase Price.
Section 4.3. The Share Closing. The closing (the "Share Closing") of the
transactions contemplated by this Article 4 shall take place at the offices of
Xxxxxxx Xxxxxxx & Xxxxxxxx LLP, 0000 Xxxxxx xx xxx Xxxxx, Xxxxx 0000, Xxx
Xxxxxxx, Xxxxxxxxxx, immediately prior to the consummation of the Merger, or at
such other time and place as the parties hereto mutually agree. The date of such
Share Closing is hereinafter referred to as the "Share Closing Date." At the
Share Closing:
(a) Buyer shall pay to the Trust, by wire transfer of immediately
available funds to account designated by the Trust at a U.S. bank not less than
two Business Days prior to the Share Closing Date, against delivery of the
Purchased Shares, the Purchase Price payable for each such Share; and
(b) the Trust shall deliver to Buyer stock certificates representing
the Shares, duly endorsed for transfer or accompanied by one or more duly
executed stock powers and with all necessary transfer tax stamps applied
thereto.
Section 4.4. Special Securities. If the Trust would receive more than 4.9%
of the outstanding shares of Buyer Common Stock after giving effect to and as of
immediately following the Share Closing, the Merger, the Financing and any sales
by the Trust pursuant to Section 2.2 (the "Adjusted Outstanding Shares"), then
Buyer and the Trustee shall negotiate in good faith to structure a security (the
"Special Security") that shall (i) have a value equal to the Purchase Price
multiplied by the number of shares of Buyer Common Stock that the Special
Security is meant to replace and (ii) qualify as stock for all Tax (including,
but without limitation, continuity of interest) purposes to be received by the
Trust in lieu of those shares of Buyer Common Stock in excess of 4.9% of the
Adjusted Outstanding Shares. The terms of the Special Security shall be
reasonably satisfactory to Buyer and the Trustee and shall be satisfactory to
the Federal Reserve Board on such basis as would not require the Trustee, or any
entity affiliated with Lone Star Funds IV (U.S.), LP or Korea Exchange Bank to
make any application or file any notice under the Bank Holding Company Act of
1956, as amended (the
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"BHCA"), or the Change in Bank Control Act, or otherwise to be registered as a
bank holding company as a result of the ownership of the same under the BHCA.
Section 4.5. Registration of the Trust's Shares. Buyer shall use its
reasonable best efforts to ensure that the S-4 shall (i) include a reoffer
prospectus (the "Reoffer Prospectus") relating to the offer and sale by the
Trust, the Korea Exchange Bank and any successor thereto (collectively, the
"Sellers") of any shares of Buyer Common Stock and Special Securities (if any)
received pursuant to this Agreement and in the Merger (the "Transaction
Securities") by all means reasonably specified by such parties to the extent
permitted by Form S-4 and (ii) remain effective so that such prospectus may be
used to reoffer such securities until they may be freely resold in accordance
with Rule 145(d)(2) promulgated under the Securities Act (but in no event beyond
one year after the Closing Date). As a condition to such obligation, the
applicable selling stockholder(s) shall, upon any request by Buyer for the same,
provide Buyer will all information required by Item 7 of Form S-4 (or comparable
information in any successor form) and such other information as Buyer may
reasonably request in order to comply with the requirements of applicable
federal and state securities laws. If for any reason the S-4 does not include
the Reoffer Prospectus, Buyer shall (i) promptly (but no later than 90 days
after consummation of the Merger) prepare and file with the SEC under the
Securities Act , a registration statement (including any appropriate supplements
or amendments thereto, the "Registration Statement") relating to the offer and
sale by the Sellers of the Transaction Securities, (ii) use its reasonable best
efforts to have the Registration Statement declared effective as promptly as
practicable after such filing, and (iii) keep the Registration Statement
effective so that the prospectus included in the Registration Statement be used
to reoffer such securities until they may be freely resold in accordance with
Rule 145(d)(2) promulgated under the Securities Act (but in no event beyond one
year after the Closing Date). The Registration Statement shall be a "shelf
registration" registering the Transaction Securities by the Sellers by all means
reasonably specified by the Sellers. The Registration Statement, if any, shall
contain all material statements which are required to be stated therein and
shall not include 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 are made, not misleading
(except that in each such case the Buyer makes no representation, warranty or
covenant with respect to information supplied by the Sellers).
ARTICLE V.
TERMINATION
This Agreement shall automatically terminate and no party shall have
any rights or obligations hereunder upon the first to occur of (i) the Effective
Time, (ii) the Share Closing Date, and (iii) the termination of the Merger
Agreement pursuant to Section 9.1 thereof. Notwithstanding the foregoing, (i)
the representations and warranties of the Trust set forth in sections (f)(ii)
and (f)(iii) of Article I and (ii) Section 4.5 shall survive the termination of
this Agreement if the Share Closing shall occur.
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ARTICLE VI.
MISCELLANEOUS
Section 6.1. Binding Effect. The provisions of this Agreement shall be
binding upon the parties hereto and their respective heirs, legal
representatives, successors and assigns.
Section 6.2. Third-Party Beneficiary. Buyer Sub is an express third-party
beneficiary of all of the representations, warranties, covenants and agreements
contained herein.
Section 6.3. Waiver and Amendment. Any party hereto may waive its rights
under this Agreement at any time. Any agreement on the part of any such party to
any such waiver shall be valid only if set forth in an instrument in writing
signed by such party. This Agreement may be amended only by a written instrument
signed by Buyer and by the Trust.
Section 6.4. Notices. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be given (and shall be
deemed to have been duly given upon receipt or, in the case of notice by
registered or certified mail, three business days after deposit with the United
States Postal Service) by delivery in person, by cable, facsimile, telecopy
transmission, or telegram or by registered or certified mail (postage prepaid,
return receipt requested) to the respective party at the following addresses (or
at such other address for a party as shall be specified by like notice):
(a) If to Buyer, to it at the following address:
Hanmi Financial Corporation
0000 Xxxxxxxx Xxxxxxxxx, Xxxxx XX-X
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Facsimile: (000) 000-0000
Attention: Chief Executive Officer
with a copy to:
Xxxxxxx Xxxxxxx & Xxxxxxxx LLP
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Facsimile: (000) 000-0000
Attention: Xxx Xxxxxxxx, Esq.
(b) If to the Trust, to it at the following address:
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The Trust Established Pursuant to the Trust
Agreement dated as of October 31, 2003
between The Korea Exchange Bank and
Mr. L. Xxxx Xxxxxxxx
000 Xxxx Xxxxxx
Xxxxxxxx, Xxxxxxxxxx 00000
Facsimile: (000) 000-0000
Attention: L. Xxxx Xxxxxxxx, Trustee
with a copy to:
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP
Xxxx Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxxxxxx, Esq.
Section 6.5. Applicable Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of California, without
regard to the principles of conflicts of law.
Section 6.6. Integration. This Agreement and the documents referred to
herein or delivered pursuant hereto which form a part hereof contain the entire
understanding of the parties with respect to its subject matter. There are no
restrictions, agreements, promises, representations, warranties, covenants or
undertakings with respect to the subject matter hereof other than those
expressly set forth herein and the other agreements referred to herein. This
Agreement supersedes all prior agreements and understandings between the parties
with respect to its subject matter other than those agreements and
understandings set forth herein.
Section 6.7. Counterparts. This Agreement may be executed in multiple
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
Section 6.8. Expenses. Each party hereto shall pay the legal fees and the
expenses incurred thereby in connection with this Agreement.
Section 6.9. Severability. If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by any rule of law
or public policy, all other conditions and provisions of this Agreement shall
nevertheless remain in full force and effect so long as the economic or legal
substance of the transactions contemplated hereby is not affected in any manner
materially adverse to any party. Upon such determination that any term or other
provision is invalid, illegal or incapable of being enforced, the parties hereto
shall negotiate in good faith to modify this Agreement so as to effect the
original intent of the parties as closely as possible to the fullest extent
permitted by applicable law in an acceptable manner to the end that the
transactions contemplated hereby are fulfilled to the extent possible.
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Section 6.10. Further Assurances. The parties hereto shall from time to
time execute and deliver all such further documents and do all acts and things
as the other party may reasonably require to effectively carry out or better
evidence or perfect the full intent and meaning of this Agreement.
Section 6.11. Specific Performance. The Trust acknowledges that if it
fails to perform any of its obligations under this Agreement, immediate and
irreparable harm or injury would be caused to Buyer for which money damages
would not be an adequate remedy. In such event, the Trust agrees that Buyer
shall have the right, in addition to any other rights it may have, to specific
performance of this Agreement. Accordingly, if Buyer should institute an action
or proceeding seeking specific enforcement of the provisions hereof, the Trust
in respect of such claim hereby waives the claim of defense that the other party
have an adequate remedy at law, and hereby agrees not to assert in any such
action or proceeding the claim or defense that such a remedy at law exists. The
trust further agrees to waive any requirements for the securing or posting of
any bond in connection with obtaining any such equitable relief.
Section 6.12. No Ownership Interest. Nothing contained in this Agreement
shall be deemed to vest in Buyer any direct or indirect ownership or incidence
of ownership of or with respect to any Shares. All rights, ownership and
economic benefits of and relating to the Shares shall remain vested in and
belong to the Trust, and Buyer shall have no authority to manage, direct,
superintend, restrict, regulate, govern, or administer any of the policies or
operations of the Company or exercise any power or authority to direct the
voting of any of the Shares, except as otherwise provided herein or in the
Merger Agreement, or in the performance of the Trust's duties or
responsibilities as a stockholder of the Company, including any fiduciary,
contractual or other duties it may have to KEB pursuant to the terms of the
Trust, at law or otherwise.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
HANMI FINANCIAL CORPORATION
By:/s/ Xxx Xxxx Xxx
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Name: Xxx Xxxx Yoo
Title: President and Chief Executive Officer
THE TRUST ESTABLISHED PURSUANT TO THE TRUST
AGREEMENT DATED AS OF OCTOBER 31, 2003 BETWEEN
THE KOREA EXCHANGE BANK AND MR. L. XXXX XXXXXXXX
By:/s/ L. Xxxx Xxxxxxxx
--------------------------
L. Xxxx Xxxxxxxx, Trustee
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