Exhibit 10
AGREEMENT AND PLAN OF MERGER
DATED AS OF THE 24th DAY OF APRIL, 1997
BY AND BETWEEN
FLUSHING SAVINGS BANK, FSB,
FLUSHING FINANCIAL CORPORATION
AND
NEW YORK FEDERAL SAVINGS BANK
ii
TABLE OF CONTENTS
Page
ARTICLE I. THE MERGER
SECTION 1.1. The Merger; Effective Time 1
SECTION 1.2. Effect on Outstanding Shares 2
SECTION 1.3. Exchange Procedures 2
SECTION 1.4. Options 3
SECTION 1.5. Dissenters' Rights 4
ARTICLE II. CONDUCT PENDING THE MERGER
SECTION 2.1. Conduct of the Bank's Business Prior to the Effective Time 4
SECTION 2.2. Forbearance by the Bank 4
SECTION 2.3. Cooperation 5
ARTICLE III. REPRESENTATIONS AND WARRANTIES
SECTION 3.1. Representations and Warranties of the Bank 6
SECTION 3.2. Representations and Warranties of FSB and the Company 14
ARTICLE IV. COVENANTS
SECTION 4.1. Acquisition Proposals 16
SECTION 4.2. Employees 17
SECTION 4.3. Access and Information 17
SECTION 4.4. Certain Filings, Consents and Arrangements 17
SECTION 4.5. Indemnification 18
SECTION 4.6. Additional Agreements 18
SECTION 4.7. Publicity 18
SECTION 4.8. Proxy Materials 18
SECTION 4.9. Stockholders' Meeting 19
SECTION 4.10. Letter Agreement 19
SECTION 4.11. Notification of Certain Matters 19
SECTION 4.12. Interim 19
ARTICLE V. CONDITIONS TO CONSUMMATION
SECTION 5.1. Conditions to All Parties' Obligations 19
SECTION 5.2. Conditions to Obligations of FSB and the Company 20
SECTION 5.3. Conditions to the Obligation of the Bank 22
ARTICLE VI. TERMINATION
SECTION 6.1. Termination 23
SECTION 6.2. Effect of Termination 24
SECTION 6.3. Termination Fees 24
ARTICLE VII. OTHER MATTERS
SECTION 7.1. Certain Definitions; Interpretation 25
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TABLE OF CONTENTS
Page
SECTION 7.2. Survival 26
SECTION 7.3. Waiver 26
SECTION 7.4. Counterparts 26
SECTION 7.5. Governing Law 26
SECTION 7.6. Expenses 26
SECTION 7.7. Notices 26
SECTION 7.8. Entire Agreement, Etc. 27
LIST OF EXHIBITS
EXHIBIT A Directors and Officers of the Surviving Bank
EXHIBIT B(1) Form of Letter from PASL pursuant to Section 4.10
EXHIBIT B(2) Form of Letter from Directors of the Bank pursuant
to Section 4.10
EXHIBIT C(1) Form of Employment Agreement between FSB and Xxxxxx Xxxxxxx
EXHIBIT C(2) Form of Employment Agreement between the Company
and Xxxxxx Xxxxxxx
LIST OF SCHEDULES
SCHEDULE 3.1(h) Certain Changes or Events
SCHEDULE 3.1(i) Taxes
SCHEDULE 3.1(j) Litigation and Liabilities
SCHEDULE 3.1(k) Regulatory Actions
SCHEDULE 3.1(l) Material Contracts
SCHEDULE 3.1(n) Employee Benefit Plans
SCHEDULE 3.1(o) Title to Assets
SCHEDULE 3.1(q) Fees
SCHEDULE 3.1(r) Environmental Matters
SCHEDULE 3.1(t) Material Interests of Certain Persons
SCHEDULE 3.1(w) Loans
iv
TABLE OF CONTENTS
Page
SCHEDULE 3.1(x) Shareholder Agreements
SCHEDULE 3.2(f) Regulatory Actions
v
INDEX OF DEFINED TERMS
Page
Acquisition Proposal.......................................................16
Agreement, 1
Bank........................................................................1
Bank's Financial Statements.................................................8
Bank's Knowledge...........................................................25
Bank Agreement..............................................................7
Bank Common Stock...........................................................2
Bank Meeting...............................................................19
Bank Stock..................................................................2
Benefit Plans..............................................................10
CERCLA.....................................................................13
Class A Preferred...........................................................2
Class A Redemption..........................................................2
Class B Preferred...........................................................2
Closing.....................................................................1
Code.......................................................................11
Company.....................................................................1
Company's Financial Statements.............................................16
Dissenters' Shares..........................................................2
Dissenting Stockholder......................................................2
Effective Time..............................................................1
Environmental Laws.........................................................13
ERISA......................................................................11
Exchange Agent..............................................................2
FDIC........................................................................8
FSB.........................................................................1
FSB's or the Company's Knowledge...........................................25
FSB Agreement..............................................................15
Government Regulators...................................................9, 16
Hazardous Substance........................................................13
Interim.....................................................................1
IRS........................................................................11
Material Adverse Effect....................................................25
Material Contract...........................................................9
Merger......................................................................1
Merger Consideration........................................................2
Options.....................................................................3
OREO........................................................................5
OTS.........................................................................1
PASL........................................................................7
Person.....................................................................25
vi
INDEX OF DEFINED TERMS
Page
Proxy Materials............................................................18
Subsidiary..................................................................7
Surviving Bank..............................................................1
Tax Returns.................................................................9
Taxes.......................................................................8
1
AGREEMENT AND PLAN OF MERGER, dated as of the 24th day of April,
1997 (this "Agreement"), by and between Flushing Savings Bank, FSB, a
federally chartered stock savings bank organized under the laws of the
United States of America ("FSB"), Flushing Financial Corporation, a
corporation organized under the laws of Delaware (the "Company") and New
York Federal Savings Bank, a federally chartered stock savings bank
organized under the laws of the United States of America (the "Bank").
The Boards of Directors of the Bank, FSB and the Company having
approved this Agreement by the affirmative votes of their respective
Directors as required by applicable law;
NOW, THEREFORE, in consideration of their mutual promises and
obligations hereunder, the parties hereto adopt and make this Agreement and
prescribe the terms and conditions hereof and the manner and basis of
carrying it into effect, which shall be as follows:
ARTICLE I. THE MERGER
SECTION 1.1. THE MERGER; EFFECTIVE TIME. (a) Subject to the
terms and conditions of this Agreement, (i) FSB will cause to be organized
as a wholly-owned subsidiary Flushing Interim Federal Association, a
non-operating phantom federal savings association ("Interim"), (ii) at the
Effective Time, (A) Interim will be merged with and into the Bank (the
"Merger"), (B) the separate existence of Interim shall cease and the Bank
will survive the Merger as a wholly-owned subsidiary of FSB (the "Surviving
Bank"), and (C) each outstanding share of Bank Common Stock (as defined in
Section 1.2(a)) will in consideration of the Merger be converted into the
right to receive cash in accordance with Sections 1.2(a).
(b) The effective time of the Merger (the "Effective Time")
shall be 12:01 A.M. on such date as is specified in the Articles of
Combination as filed with and endorsed by the Office of Thrift Supervision
("OTS") pursuant to its regulations, and shall be on such date as is
specified by FSB within 30 days after the expiration of all applicable
waiting periods in connection with approvals of Government Regulators (as
defined in Section 3.1(j)) occurs and all other conditions to the
consummation of this Agreement are satisfied or waived.
(c) FSB, the Company and the Bank shall regularly communicate and
consult with each other with respect to the fulfillment of the various
conditions to the obligations under this Agreement of the parties hereto.
The exchange of certificates and other documents contemplated by this
Agreement in connection with the consummation of the Merger (the "Closing")
shall take place at the offices of Xxxxxx Xxxxxxx & Xxxx LLP, Xxx Xxxxxxx
Xxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000 on the day immediately preceding the day
on which the Effective Time will occur.
(d) At the Effective Time, the Federal Stock Charter and by-laws
of the Bank in effect immediately prior to the Effective Time shall become
the Federal Stock Charter and by-laws of the Surviving Bank. At the
Effective Time the directors and officers of the Surviving Bank shall be
those persons set forth on Exhibit A.
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SECTION 1.2. Effect on Outstanding Shares.
(a) At the Effective Time, by virtue of the Merger,
automatically and without any action on the part of FSB, the Company,
Interim, the Bank or the holder of any of the following securities, (i)
each share of the common stock, par value $17.00 per share, of the Bank and
each share of Class B noncumulative preferred stock, par value $17.00 per
share, of the Bank ("Class B Preferred"; and together with the common stock
of the Bank, the "Bank Common Stock") issued and outstanding immediately
prior to the Effective Time (other than (A) shares the holders of which
(each a "Dissenting Stockholder") are exercising appraisal rights pursuant
to Section 552.14 of the regulations of the OTS (12 C.F.R. Part 552) or
other applicable law (the "Dissenters' Shares") and (B) shares held in the
Bank's treasury) shall become and be converted into the right to receive,
an amount equal to $272.50 payable in cash, without interest, (the "Merger
Consideration").
(ii) Each share of Bank Common Stock held in the Bank's
treasury shall be canceled and retired and cease to exist, and no exchange
or payment shall be made with respect thereto.
(iii) Each share of common stock of Interim issued and
outstanding immediately prior to the Effective Time shall be converted into
and become one share of Common Stock, par value $.01 per share, of the
Surviving Bank.
(b) At the Effective Time, each share of Class A, par value
$17.00 per share, noncumulative preferred stock of the Bank ("Class A
Preferred") issued and outstanding immediately prior to the Effective Time
shall be redeemed pursuant to Section 5(B)(d) of the Bank's Federal Stock
Charter and paragraph (iii) of the Supplementary Section thereto, dated
January 9, 1990, for an amount equal to $34.00 payable in cash, without
interest, plus the accrued dividend thereon for the six month period ending
June 30, 1997, not to exceed in the aggregate for all shares of Class A
Preferred, $149,466.72 ("Class A Redemption"). The Class A Preferred and
the Bank Common Stock are sometimes referred to collectively in this
Agreement as "Bank Stock".
(c) The Merger shall effect no change in any shares of common
stock issued by the Company or FSB prior to the Effective Time.
SECTION 1.3. Exchange Procedures.
(a) Prior to the Effective Time, FSB, the Company and the
Bank jointly shall designate a bank or trust company to act as Exchange
Agent in the Merger (the "Exchange Agent"). At and after the Effective
Time, the Company or FSB will cause to be made, the cash payments as
provided in Section 1.2 (by issuance of checks or drafts of the Exchange
Agent).
(b) After the Effective Time, each holder of a certificate
theretofore evidencing outstanding shares of Bank Stock (other than
Dissenters' Shares, and shares held in the Bank's treasury), upon surrender
of the same to the Exchange Agent, shall be entitled to receive in exchange
therefor a check
3
representing the amount of cash (rounded to the nearest $0.01) for which
the shares of Bank Stock theretofore represented by the certificate or
certificates so surrendered shall have been exchanged or redeemed as
provided in Section 1.2. No interest will be paid or accrue on the cash
payable upon surrender of such certificate.
(c) As soon as possible and within five days after the
Effective Time, the Exchange Agent will send a notice and transmittal form
to each holder of an outstanding certificate which immediately prior to the
Effective Time evidenced shares of Bank Stock advising such stockholder of
the terms of the exchange effected by the Merger and the procedure for
surrendering to the Exchange Agent (which may appoint forwarding agents)
such certificate for exchange into cash.
(d) Until so surrendered, each outstanding certificate which,
prior to the Effective Time, represented shares of Bank Stock (other than
Dissenters' Shares, and shares held in the Bank's treasury) will be deemed
for all corporate purposes to evidence solely a right to receive the amount
of cash (rounded to the nearest $0.01) (without interest thereon) for which
the shares of Bank Stock represented thereby were exchanged or redeemed
pursuant to Section 1.2. After the Effective Time, there shall be no
further registration of transfers on the records of the Bank of shares of
Bank Stock and, if a certificate representing such shares is presented to
the Surviving Bank, it shall be canceled and exchanged or redeemed for cash
as herein provided.
(e) If any payment of cash is to be made to a person other
than the person in whose name such certificate is registered, it shall be a
condition of the payment of such cash that the certificate of Bank Stock so
surrendered shall be properly endorsed and otherwise in proper form for
transfer and that the person requesting such exchange or redemption (i) pay
to the Exchange Agent any transfer or other taxes required by reason of the
payment of cash to a person other than the registered holder of the
certificate of Bank Stock surrendered, or (ii) establish to the
satisfaction of the Exchange Agent that such tax has been paid or is not
payable.
(f) Approval of this Agreement by holders of two-thirds of
the voting power of the Bank Common Stock shall be deemed to approve the
appointment of the Exchange Agent on behalf of all stockholders of the Bank
and the authorization of the Exchange Agent to make the foregoing exchange
and effect the foregoing redemption and to carry out the other transactions
to be carried out by it in accordance with this Agreement.
(g) In the event any certificate of Bank Stock shall have
been lost, stolen or destroyed, upon the making of an affidavit of that
fact by the person claiming such certificate to be lost, stolen or
destroyed and, if required by the Company, the posting by such person of a
bond in such amount as FSB may direct or the provision of a written
indemnity agreement in form satisfactory to FSB, as indemnity against any
claim that may be made against it with respect to such certificate, the
Exchange Agent will issue in exchange for such lost, stolen or destroyed
certificate the Merger Consideration or Class A Redemption, as the case may
be, deliverable in respect thereof pursuant to this Agreement.
SECTION 1.4. OPTIONS. The Bank shall cause each holder of
options to acquire Class B Preferred ("Options") (whether or not such
Options are then exercisable) to consent to the cancellation, effective as
of the Effective Time, of such Options and any related stock appreciation
rights, as the case may be,
4
in consideration of receipt of a cash payment equal to (i) $272.50 (ii)
minus the applicable option exercise price (iii) multiplied by the number
of shares of Class B Preferred subject to such Option.
SECTION 1.5. DISSENTERS' RIGHTS. Any Dissenting Stockholder
who shall be entitled to be paid the "fair value" of his or her Dissenters
Shares, as provided under Section 552.14 of the regulations of the OTS, 12
C.F.R. Part 552, or other applicable law, shall not be entitled to the
Merger Consideration, unless and until the holder thereof shall have failed
to perfect or shall have effectively withdrawn or lost his or her right to
dissent from the Merger under applicable law, and shall be entitled to
receive only the payment to the extent provided for by applicable law with
respect to such Dissenters' Shares. If any Dissenting Stockholder shall
fail to perfect or shall have effectively withdrawn or lost the right to
dissent, the Dissenters' Shares held by such Dissenting Stockholder shall
thereupon be treated as though such Dissenters' Shares had been converted
into the right to receive the Merger Consideration pursuant to Section 1.2.
The Company or FSB shall be responsible for paying all amounts determined
to be payable to Dissenting Stockholders properly exercising their rights
as such and shall be required to satisfy all other obligations owed by the
Bank to Dissenting Stockholders after the Effective Time.
ARTICLE II. CONDUCT PENDING THE MERGER
SECTION 2.1. CONDUCT OF THE BANK'S BUSINESS PRIOR TO THE
EFFECTIVE TIME. Except as expressly provided in this Agreement, during the
period from the date of this Agreement to the Effective Time, the Bank
shall (i) conduct its business in the usual, regular and ordinary course
consistent with past practice, (ii) use its best efforts to maintain and
preserve intact its business organization, assets, leases, properties,
investment services, employees and advantageous business relationships and
retain the services of its officers and key employees, (iii) take no action
which would adversely affect or delay the ability of the Bank, FSB or the
Company to obtain any necessary approvals, consents or waivers of any
Government Regulator (as defined in Section 3.1(j)) required for the
transactions contemplated hereby or to perform its covenants and agreements
on a timely basis under this Agreement, and (iv) take no action that is
reasonably likely to have a Material Adverse Effect (as defined in Section
7.1) on the Bank.
SECTION 2.2. FORBEARANCE BY THE BANK. During the period from
the date of this Agreement to the Effective Time, the Bank shall not,
without the prior written consent of FSB:
(a) make any advance or incur any indebtedness for borrowed
money other than in the ordinary course of business consistent with past
practice or assume, guarantee, endorse or otherwise as an accommodation
become responsible for the obligations of any other person;
(b) adjust, split, combine or reclassify any capital stock;
issue any additional shares of capital stock; make, declare or pay any
dividend or make any other distribution on, or directly or indirectly
redeem, purchase or otherwise acquire, any shares of its capital stock or
any securities or obligations convertible into or exchangeable for any
shares of its capital stock, or grant any stock appreciation rights or
grant, sell or issue to any individual, corporation or other person any
option or any other right to acquire, or
5
securities evidencing a right to convert into or acquire, any shares of its
capital stock (except, in the case of Class A Preferred, the Bank may pay
cash dividends thereon accrued prior to 1996 at the rates set forth in the
applicable certificate of incorporation or certificate of designation for
such securities, up to a maximum aggregate amount of $139,329.73);
(c) other than in the ordinary course of business consistent
with past practice and pursuant to policies currently in effect, sell,
transfer, mortgage, encumber or otherwise dispose of any of its material
properties, leasehold interests or assets to any person other than a direct
or indirect wholly owned subsidiary of the Bank, or cancel, release or
assign any indebtedness of any person or any contracts or agreements as in
force at the date of this Agreement; PROVIDED, HOWEVER, that nothing
contained in this paragraph (c) shall be interpreted to prohibit the
prudent disposition of foreclosed real estate or in substance foreclosures
("OREO") or prudent action to realize upon nonperforming assets;
(d) increase in any manner the compensation or fringe
benefits of any of its employees or directors or provide funding to any
existing plan or agreement relating to the provision of benefits to
employees or directors other than contributions to the Bank's 401(k) plan
required by the terms of such plan as in effect on December 31, 1996 or pay
any pension or retirement allowance not specifically required by any
existing plan or agreement to any such employees or directors, or become a
party to, amend or commit itself to any pension, retirement, profit-sharing
or welfare benefit plan or agreement (including any nonqualified plan) or
employment agreement with or for the benefit of any employee or director,
or voluntarily accelerate the vesting of any compensation or benefit;
(e) propose or adopt any amendments to its Federal Stock
Charter or by-laws;
(f) change its method of accounting as in effect at December
31, 1996, except as required by changes in generally accepted accounting
principles as concurred in by the Bank's independent auditors; or
(g) except as contemplated by Section 4.10, enter into any
stockholder agreement, understanding or commitment or cooperate in the
formation of any voting trust relating to the rights of stockholders of the
Bank to vote any shares of capital stock of the Bank.
In the event that FSB does not consent to any request by the Bank
to take any action specified in subsections (a)-(g) of this Section 2.2,
the effects of the Bank's not taking such requested action shall not be
taken into consideration in determining whether there has occurred a
Material Adverse Effect.
SECTION 2.3. COOPERATION. The Bank shall cooperate with FSB
and the Company prior to the Merger and shall not take, cause to be taken
or agree or make any commitment to take any action: (i) that would cause
any of the representations or warranties of the Bank that are set forth in
Article III not to be true and correct, or (ii) that is inconsistent with
or prohibited by Section 2.1 or Section 2.2.
6
ARTICLE III. REPRESENTATIONS AND WARRANTIES
SECTION 3.1. REPRESENTATIONS AND WARRANTIES OF THE BANK. The
Bank represents and warrants to FSB and the Company, that, except as
specifically disclosed on Schedule 3.1 (and making specific reference to
the paragraph of this Section 3.1 for which an exception is taken):
(a) CORPORATE ORGANIZATION AND QUALIFICATION. The Bank is a
federally chartered stock savings bank duly organized, validly existing and
in good standing under the laws of the United States of America and is duly
qualified to do business and is in good standing in all jurisdictions where
the properties owned, leased or operated, or the business conducted, by it
requires such qualification, except for such failure to qualify or be in
such good standing which, when taken together with all other such failures,
would not have a Material Adverse Effect (as defined in Section 7.1). The
Bank has the requisite corporate and other power and authority (including
all federal, state and local governmental authorizations) to carry on its
businesses as they are now being conducted and to own its properties and
assets, except for such lack thereof which would not have a Material
Adverse Effect. The Bank has made available to FSB a complete and correct
copy of the Federal Stock Charter and by-laws of the Bank and such Federal
Stock Charter and by-laws are in full force and effect.
(b) AUTHORIZED CAPITAL. The authorized capital stock of the
Bank consists of (i) 100,000 shares of common stock of which 29,430 were
issued and outstanding as of the date of this Agreement, (ii) 300,000
shares of Class A Preferred of which 109,902 were issued and outstanding as
of the date of this Agreement, and (iii) 100,000 shares of Class B
preferred stock of which 2,493 were issued and outstanding as of the date
of this Agreement. All of the outstanding shares of Bank Common Stock and
Class A Preferred have been duly authorized and are validly issued, fully
paid and nonassessable, and have not been issued in violation of any
preemptive right of any stockholder of the Bank. The Bank has no shares of
any class of equity securities reserved for issuance, except for 4,500
shares of Class B Preferred reserved for issuance pursuant to the 1993
Stock Option Plan of the Bank. The Bank does not have outstanding any
bonds, debentures, notes or other obligations, the holders of which have
the right to vote (or which are convertible into or exchangeable for
securities having the right to vote) on any matter. The holders of Class A
Preferred have no right to vote on the approval of this Agreement. Except
as set forth above, there are no shares of capital stock of the Bank
authorized, issued or outstanding and there are no preemptive rights or any
outstanding subscriptions, options, warrants, rights, convertible
securities or other agreements or commitments of any character relating to
the issued or unissued capital stock or other securities of the Bank or any
subsidiary thereof. After the Effective Time, the Surviving Bank will have
no obligation to issue, transfer or sell any shares of Bank Common Stock or
Class A Preferred or common stock of the Surviving Bank pursuant to any
Employee Plan (as defined in Section 3.1(m)).
(c) Subsidiary. The Bank has one wholly-owned subsidiary,
000 Xxxx 000xx Xxxxxx Property Corporation, a New York corporation (the
"Subsidiary"). The Subsidiary engages solely in holding and managing OREO
properties.
7
(d) PASL HOLDING CORPORATION, a New York corporation
("PASL"), is a registered savings and loan holding company for the Bank.
PASL owns no assets, other than 10,716 shares of Bank Common Stock, and has
no liabilities. PASL has the requisite corporate power and authority and
has taken all corporate action necessary in order to execute and deliver
the letter agreement referred to in Section 4.10. The officer signing such
letter agreement on behalf of PASL has been duly authorized to do so.
(e) CORPORATE AUTHORITY. Subject only to approval of this
Agreement by the stockholders of the Bank, the Bank has the requisite
corporate power and corporate authority and has taken all corporate action
necessary in order to execute and deliver this Agreement and to consummate
the transactions contemplated hereby. The Bank's Board of Directors (at a
meeting duly called and held) has by the affirmative vote of at least
two-thirds of all directors (a) determined that the Merger is advisable and in
the best interests of it and its stockholders, (b) approved this Agreement
and the transactions contemplated hereby and (c) directed that the
Agreement be submitted for approval by its stockholders. This Agreement is
a valid and binding agreement of the Bank enforceable against the Bank in
accordance with its terms, except as may be limited by bankruptcy,
insolvency, fraudulent transfer or other similar laws affecting the rights
and remedies of creditors generally and subject to general principles of
equity (including possible unavailability of specific performance or
injunctive relief and the general discretion of the court considering the
matter), regardless whether enforceability is considered in a proceeding in
equity or at law.
(f) NO VIOLATIONS. The execution and delivery of this
Agreement by the Bank do not, and the consummation of the transactions
contemplated hereby will not, (I) constitute a breach or default under, the
Federal Stock Charter or by-laws of the Bank; (ii) constitute a breach or
default under (or an event which with due notice or lapse of time or both
would constitute a default under), or result in the termination of,
accelerate the performance required by, or result in the creation of any
lien, pledge, security interest, charge or other encumbrance upon any of
the properties or assets of the Bank, or enable any person to enjoin the
Merger under, any of the terms, conditions or provisions of any note, bond,
indenture, deed of trust, loan agreement or other agreement, instrument or
obligation to which the Bank is a party, or to which any of its properties
or assets may be bound or affected ("Bank Agreement"), except for any of
the foregoing that, individually or in the aggregate, would not have a
Material Adverse Effect; or (iii) require, with respect to the Bank or the
Subsidiary, any approval, consent or waiver under any law, rule,
regulation, judgment, decree, order, governmental permit or license or the
approval, consent or waiver of any other party to any Bank Agreement other
than (A) the required approvals, consents and waivers of Government
Regulators referred to in Section 5.l(c), (B) any other approvals, consents
and waivers, the absence of which, individually or in the aggregate, would
not result in a Material Adverse Effect on the Bank or enable any person to
enjoin the Merger, and (C) the approval of the holders of Bank Common Stock
referred to in Section 5.1(a).
(g) FINANCIAL STATEMENTS. (i) Each of the consolidated
balance sheets of the Bank as of December 31, 1994, 1995, 1996, related
consolidated statements of income, changes in stockholders' equity and cash
flows for each of the years in the three-year period ended December 31,
1996, together with notes and schedules thereto, audited by BDO Xxxxxxx,
LLP, true and complete copies of which have been provided by the Bank to
FSB (such year-end financial
8
statements collectively, the "Bank's Financial Statements") (A) have been
prepared in accordance with generally accepted accounting principles
applied on a consistent basis, (B) fairly present the consolidated
financial position of the Bank at the dates and the consolidated results of
operations and cash flows of the Bank for the periods stated therein and
(C) are derived from the books and records of the Bank, which are complete
and accurate in all material respects and have been maintained in
accordance with good business practices.
(ii) The Bank and the Subsidiary have timely filed all
material reports, registrations and statements, together with any
amendments required to be made with respect thereto, that they were
required to file since January 1, 1994 with (A) the Federal Deposit
Insurance Corporation (the "FDIC"), and (B) the OTS, and all other material
reports and statements required to be filed by them since January 1, 1994,
including any report or statement required to be filed pursuant to the
laws, rules or regulations of the FDIC and the OTS, and all fees and
assessments due and payable in connection therewith have been paid.
(h) ABSENCE OF CERTAIN CHANGES OR EVENTS. Except as
disclosed in the Bank's Financial Statements with respect to dates prior to
the date hereof or on Schedule 3.1(h), since December 31, 1996, the Bank
has not incurred any liability, except in the ordinary course of its
business consistent with past practice, nor has there been any change in
the condition (financial or other) in the properties, assets, business or
results of operations of the Bank or the Subsidiary which, individually or
in the aggregate, has had a Material Adverse Effect. The Bank has not
declared or paid any dividend on its Common Stock.
(I) TAXES. No federal income Tax Returns of the Bank have
been examined. All federal, state, local, and foreign Tax Returns required
to be filed by or on behalf of the Bank and the Subsidiary have been timely
filed or requests for extensions have been timely filed and any such
extension shall have been granted and not have expired, and all such filed
Tax Returns are complete and accurate. All Taxes shown on such Tax Returns
have been paid in full or adequate provision has been made for any such
Taxes on the Bank's balance sheet (in accordance with generally accepted
accounting principles). Except as disclosed on Schedule 3.1(i), there is
no audit examination, refund claim, or litigation pending, or to the Bank's
Knowledge, threatened, with respect to any Tax Returns or Taxes of the Bank
or the Subsidiary, and any audit examinations disclosed on such Schedule
will have no Material Adverse Effect. All Taxes due with respect to
completed and settled examinations or concluded litigation relating to it
have been paid in full or adequate provision has been made for any such
Taxes on the Bank's balance sheet (in accordance with generally accepted
accounting principles). Neither the Bank nor the Subsidiary has executed
an extension or waiver of any statute of limitations on the assessment or
collection of any Taxes due that is currently in effect. For purposes of
this Agreement, "Taxes" shall mean any and all federal, state, local,
foreign and other taxes, levies, fees, imposts, duties and charges of
whatever kind (including any interest, penalties and additions thereto) and
"Tax Returns" shall mean returns, reports, information statements and other
documentation filed or maintained in connection with the calculation,
determination, assessment or collection of any Taxes.
(j) LITIGATION AND LIABILITIES. There are no (i) civil,
criminal or administrative actions, suits, claims, hearings, investigations
or proceedings before any court, Government Regulator or otherwise pending
or, to
9
the Bank's Knowledge after due inquiry, threatened against the Bank, the
Subsidiary, or any of their respective present or former officers,
directors or employees, other than those that are set forth in Schedule
3.1(j), or (ii) obligations or liabilities, whether or not accrued,
contingent or otherwise, including, without limitation, those relating to
environmental and occupational safety and health matters, or any other
facts or circumstances that could result in any claims against or
obligations or liabilities of the Bank, the Subsidiary or any of their
present or former officers, directors or employees, other than such
obligations or liabilities as are disclosed in the Bank's Financial
Statements or on Schedules 3.1(h) or 3.1(j), that, in the case of either
(i) or (ii), individually or in the aggregate (A) will have a Material
Adverse Effect, (B) are reasonably likely to hinder or delay the
consummation of the transactions contemplated hereby, or (C) are reasonably
likely to result in the obligation by the Bank or, after the Effective
Time, by the Surviving Bank (pursuant to the terms of Section 4.5 or
otherwise) to indemnify any present or former officer, director or employee
of the Bank.
(k) ABSENCE OF REGULATORY ACTIONS. Except as set forth in
Schedule 3.1(k), the Bank is not a party to any cease and desist order,
written agreement or memorandum of understanding with, or a party to any
commitment letter or similar undertaking to, or is subject to any order or
directive by, or is a recipient of any extraordinary supervisory letter
from, or has adopted any board resolutions at the request of, federal,
state or local governmental authorities or the staffs thereof ("Government
Regulators") nor has it been advised by any Government Regulator that it is
contemplating issuing or requesting (or is considering the appropriateness
of issuing or requesting) any such order, directive, written agreement,
memorandum of understanding, extraordinary supervisory letter, commitment
letter, board resolutions or similar undertaking.
(l) AGREEMENTS. (i) Except as set forth in Schedule 3.1(l),
the Bank is not bound by any contract not made in the ordinary course of
business which is material to the financial condition, assets, businesses
or results of operation of the Bank or the Subsidiary ("Material Contract")
and is to be performed after the date hereof. Except as set forth in
Schedule 3.1(l), as of the date of this Agreement, the Bank is not a party
to, or bound by, any oral or written:
(A) consulting agreement not terminable on 30 days' or
less notice involving the payment of more than $50,000 per annum, in the
case of any such agreement;
(B) agreement with any director, executive officer or
other key employee of the Bank;
(C) agreement or plan, including any stock option plan,
stock appreciation rights plan, employee stock ownership plan, restricted
stock plan, stock purchase plan or other Benefit Plan (as defined in
Section 3.1(n)), any of the benefits of which will be increased, or the
vesting of the benefits of which will be accelerated, by the occurrence of
any of the transactions contemplated by this Agreement or the value of any
of the benefits of which will be calculated on the basis of any of the
transactions contemplated by this Agreement;
10
(D) agreement containing covenants that limit the
ability of the Bank to compete in any line of business or with any person,
or that involve any restriction on the geographic area in which, or method
by which, the Bank may carry on its business (other than as may be required
by law or any regulatory agency);
(E) collective bargaining agreement, contract, or other
agreement or understanding with a labor union or labor organization
relating to the employees of the Bank or the Subsidiary; or
(F) any agreement, contract or understanding other than
this Agreement, regarding the Bank's capital stock or committing to dispose
of some or all of the capital stock or substantially all of the assets of
the Bank or the Subsidiary.
(ii) The Bank is not in default under or in violation of
any provision of any Bank Agreement other than such defaults or violations
as will not have, individually or in the aggregate, a Material Adverse
Effect.
(m) LABOR MATTERS. The Bank is not the subject of any
proceeding asserting that it has committed an unfair labor practice or
seeking to compel it to bargain with any labor organization as to wages and
conditions of employment, nor is there any strike, other labor dispute or
organizational effort involving it pending or threatened.
(n) EMPLOYEE BENEFIT PLANS. (i) Schedule 3.1(n) contains a
complete list of all pension, retirement, stock option, stock purchase,
stock ownership, savings, stock appreciation right, profit sharing,
deferred compensation, bonus, incentive, health, welfare, group insurance,
severance, fringe benefit, flexible spending and other benefit plans,
policies, contracts, and arrangements, whether or not written, in respect
to any present or former directors, officers, or employees of the Bank or
the Subsidiary (hereinafter referred to collectively as the "Benefit
Plans").
(ii) The Bank has delivered to FSB complete and correct
copies of each agreement described in Section 3.1(l)(B), each Benefit Plan
(or written summaries of any unwritten Benefit Plan), any employee handbook
applicable to employees of the Bank, and, with respect to each Benefit
Plan, any related trust agreements or insurance contracts, the current
summary plan description, the latest IRS determination letter, any
application for determination pending with the IRS, the latest annual
financial statements, the last two annual reports on IRS Form 5500 series
(including all required schedules and accountants' reports), and the last
two actuarial reports.
(iii) Each of the Benefit Plans has been operated in
accordance with its terms and complies in all material respects with all
applicable requirements of the Employee Retirement Income Security Act of
1974, as amended ("ERISA"), the Internal Revenue Code of 1986, as amended
(the "Code") and other applicable laws.
(iv) No event has occurred and no condition exists with
respect to any Benefit Plan which is likely to subject such Benefit Plan or
11
the Company or FSB to liability for a breach of fiduciary duty, a
"prohibited transaction" (within the meaning of Section 406 of ERISA or
Section 4975 of the Code), or a tax, fine or penalty under Section 502 or
4071 of ERISA or Subtitle D Chapter 43 of the Code.
(v) Neither the Bank nor any entity which is treated as
a single employer with the Bank under Section 414(b), (c), (m), or (o) of
the Code has ever contributed to, or had an obligation to contribute to,
any "defined benefit plan" within the meaning of Section 3(35) of ERISA,
any plan which is subject to the minimum funding standards of Section 412
of the Code, any "multiemployer plan" within the meaning of Section 3(37)
or 4001(a)(3) of ERISA, or any "multiple employer plan" subject to Section
4063 or 4064 of ERISA.
(vi) Each Benefit Plan which is intended to be qualified
under Section 401(a) of the Code has received a favorable determination
letter from the Internal Revenue Service (the "IRS") to the effect that it
is so qualified, and the Bank is not aware of any circumstances likely to
adversely affect the qualified status of such plan.
(vii) There is no pending or, to the Bank's Knowledge,
threatened litigation, administrative action or claim (other than routine
claims for benefits in the ordinary course) relating to any Benefit Plan.
No Benefit Plan is currently subject to investigation, audit, or
examination, and, to the Bank's Knowledge, no such investigation, audit, or
examination is under consideration. No Benefit Plan has been submitted to
any Government Regulator under any voluntary compliance or remediation
program.
(viii) There has been no announcement or legally binding
commitment by the Bank to create an additional Benefit Plan, or to amend a
Benefit Plan except for amendments required by applicable law which do not
materially increase the cost of such Benefit Plan.
(ix) Except as specifically identified on Schedule
3.1(n), the Bank has no Benefit Plan that provides post-retirement welfare
benefits to current or former directors or employees. The Bank has the
ability to amend or terminate each such plan without incurring liability
thereunder.
(x) Except as specifically identified on Schedule
3.1(n), the execution and delivery of this Agreement and the consummation
of the transactions contemplated hereby will not (A) result in any payment
or series of payments under any Benefit Plan by the Bank, FSB, or the
Company which is an "excess parachute payment" (as defined in Section 280G
of the Code), (B) increase any benefits payable under any Benefit Plan, or
(C) accelerate the time of payment or vesting of any such benefit.
(o) TITLE TO ASSETS. The Bank or the Subsidiary has good and
marketable title to the properties and assets owned by the Bank or the
Subsidiary, as the case may be (other than property as to which the Bank or
the Subsidiary is lessee), except for such defects in title which would
not, individually or in the aggregate, have a Material Adverse Effect.
With respect to any property leased by the Bank or the Subsidiary, except
as set forth on Schedule 3.1(o), there are no defaults by the Bank or the
Subsidiary or to the Bank's Knowledge any of the other parties thereto, or
any events which, with the giving of notice or lapse of time or both, would
become
12
defaults by the Bank or the Subsidiary or any of the other parties thereto,
under any of such leases, except for such defaults or events which would
not, individually or in the aggregate, have a Material Adverse Effect; and
all such leases are in full force and effect and are enforceable against
the Bank or the Subsidiary, and to the Bank's Knowledge there is no
circumstance which causes such leases to be unenforceable against any of
the other parties thereto.
(p) COMPLIANCE WITH LAWS. The Bank has all permits,
licenses, certificates of authority, orders and approvals of, and has made
all filings, applications and registrations with, Government Regulators
that are required in order to permit it to carry on its business as it is
presently conducted and the absence of which could, individually or in the
aggregate, have a Material Adverse Effect; all such permits, licenses,
certificates of authority, orders and approvals are in full force and
effect, and, to the Bank's Knowledge, no suspension or cancellation of any
of them is threatened.
(q) FEES. Except as set forth on Schedule 3.1(q) neither the
Bank nor any of its respective officers, directors, employees or agents,
has employed any broker or finder or incurred any liability for any
financial advisory fees, brokerage fees, commissions, or finder's fees, and
no broker or finder has acted directly or indirectly for the Bank in
connection with the Agreement or the transactions contemplated hereby.
(r) ENVIRONMENTAL MATTERS. Except as set forth on Schedule
3.1(r) hereto, (i) to the Bank's Knowledge, there is not and has not been
any generation, use, handling, transportation, treatment, storage, release
or disposal of any Hazardous Substance on, from or at any real property
owned or leased by the Bank or the Subsidiary or OREO (as defined in
Section 2.2(c)), nor does any such Hazardous Substance exist on any of such
real property or OREO except for such of the foregoing as, individually or
in the aggregate, will not have a Material Adverse Effect; (ii) to the
Bank's Knowledge, no underground storage tanks or surface impoundments are
located on such real property or OREO; (iii) the Bank has not received any
notice of any claims, actions or proceedings against the Bank relating to
(A) the generation, release, existence, use, handling, transportation,
treatment, storage or disposal of any Hazardous Substance from, on or under
such real property or OREO, or (B) personal injuries or damages to property
related to or arising out of exposure to Hazardous Substances discharged,
released or emitted from or into, or transported from or to, such real
property or OREO, except, in each case, for such claims, actions or
proceedings as have not had and will not have a Material Adverse Effect;
and (iv) to the Bank's Knowledge, the Bank has not undertaken any acts with
respect to its role as lender that could reasonably be expected to render
the Bank or the Subsidiary liable under any Environmental Law, except for
such acts as have not had and will not have a Material Adverse Effect. For
purposes of this Agreement, the following terms have the following
definitions: (a) "Hazardous Substance" means (i) a substance that is
defined as a hazardous or toxic substance in (x) Section 101(14) of the
Comprehensive Environmental Response, Compensation and Liability Act,
"CERCLA", 42 U.S.C. Section 9601(14), or (y) the Toxic Substances Control Act
15 U.S.C. Section 2601 et seq.; (ii) crude oil or any fraction thereof; and
(iii) any other substance that is otherwise regulated by or the subject of
laws concerning protection of health, safety, or the environment; and (b)
"Environmental Laws" means all federal, state and local laws,
constitutions, ordinances, decrees, rules, regulations, judicial or
arbitral or administrative or departmental judgments, orders, decisions,
rulings,
13
published interpretations or guidelines, awards, consent orders or consent
decrees, related to (i) Hazardous Substances, including releases of
Hazardous Substances; (ii) occupational health and safety, and (iii)
reclamation and restoration of real property.
(s) ALLOWANCE. The allowance for possible loan losses
reflected in the Bank's Financial Statements for the year ending December
31, 1996 was, and the allowance for possible loan losses maintained by the
Bank for periods ending thereafter and prior to the Effective Time will be,
adequate, under generally accepted accounting principles applicable to
federally chartered stock savings banks. The Bank has disclosed to FSB in
writing prior to the date hereof the amounts of all loans, leases,
advances, credit enhancements, other extensions of credit, commitments and
interest-bearing assets of the Bank that have been classified by the Bank
or any bank examiner (whether regulatory or internal) as "Other Loans
Specially Mentioned, "Special Mention," "Substandard," "Doubtful," "Loss,"
"Classified," "Criticized," "Credit Risk Assets," "Concerned Loans" or
words of similar import, and the Bank shall promptly after the end of any
month inform FSB of any such classification arrived at by the Bank any time
after the date hereof. The OREO included in any non-performing assets of
the Bank are carried net of reserves at the lower of cost or market value
based on current independent or management appraisals.
(t) MATERIAL INTERESTS OF CERTAIN PERSONS. Except as set
forth in Schedule 3.1(t), no "affiliated person" of the Bank (as such term
is defined in Section 561.5 of the regulations of the OTS, 12 C.F.R. Part
561) has any material interest in any material contract or property (real
or personal), tangible or intangible, used in or pertaining to the business
of the Bank.
(u) INSURANCE. The Bank is presently insured, and since
January 1, 1994, has been insured, for reasonable amounts with financially
sound and reputable insurance companies, against such risks as banks
engaged in a similar business would, in accordance with good business
practice, customarily be insured. All of the insurance policies and bonds
maintained by the Bank are in full force and effect, the Bank is not in
default thereunder and all material claims thereunder have been filed in
due and timely fashion.
(v) BOOKS AND RECORDS. The books and records of the Bank
have been, and are being, maintained in accordance with applicable legal
and accounting requirements and reflect in all material respects the
substance of events and transactions that should be included therein.
(w) LOANS. (i) Except as disclosed on Schedule 3.1(w), to
the Bank's Knowledge, all loans, leases, other extensions of credit and
investments of the Bank or the Subsidiary are legal, enforceable and
authorized under applicable statutes or laws or any judgment, decree,
injunction, order or final regulation or rule of any Government Regulator,
except for such defects as will not have a Material Adverse Effect. Except
as disclosed on Schedule 3.1(w), the Bank and the Subsidiary have good
title to all loans and other extensions of credit, except for such defects
as will not have a Material Adverse Effect. Schedule 3.1(w) includes a
description, as of the end of the month immediately preceding the date
hereof, (i) by type or classification, of the aggregate amount of all
loans, leases, other extensions of credit and commitments to extend credit
of the Bank; and (ii) by type or category, of all loans due to the Bank and
as to which any payment of
14
principal, interest or any other amount is 60 days or more past due.
(ii) Except as disclosed on Schedule 3.1(w): (A) none of the
loans or other extensions of credit of the Bank is presently serviced by
third parties and, prior to the Closing, none will be serviced by third
parties, (B) there are no obligations, agreements or understandings
whatsoever that could result in any loans or other extensions of credit of
the Bank or the Subsidiary becoming subject to any such third party
servicing, and (C) the Bank will not undertake any such obligation or enter
into any such agreement or understanding.
(x) SHAREHOLDER AGREEMENTS. Except as contemplated by
Section 4.10, or as set forth on Schedule 3.1(x), the Bank is not aware of
any voting trust or other stockholder agreement or understanding which
affects voting of the capital securities of the Bank, management of the
Bank or the ability of the Bank to enter into a combination with another
entity.
SECTION 3.2. REPRESENTATIONS AND WARRANTIES OF FSB AND THE
COMPANY. FSB and the Company represent and warrant to the Bank that:
(a) CORPORATE ORGANIZATION AND QUALIFICATION. FSB is a
federally chartered stock savings bank duly organized, validly existing and
in good standing under the laws of the United States of America and is duly
qualified to do business and is in good standing in all jurisdictions where
the properties owned, leased or operated, or the business conducted, by it
requires such qualification, except for such failure to qualify or be in
such good standing which, when taken together with all other such failures,
would not have a Material Adverse Effect. FSB has the requisite corporate
and other power and authority (including all federal, state, local and
foreign governmental authorizations) to carry on its businesses as they are
now being conducted and to own its properties and assets, except for such
lack thereof which would not have a Material Adverse Effect. All of the
issued and outstanding common stock of FSB is owned by the Company. The
Company is a corporation duly organized and in good standing under the laws
of Delaware and is in good standing as a foreign corporation in each
jurisdiction where the properties owned, leased or operated, or the
business conducted, by it requires such qualification, except for such
failure to qualify or be in such good standing which, when taken together
with all other such failures, would not have a Material Adverse Effect.
The Company has the requisite corporate and other power and authority
(including all federal, state, local and foreign governmental
authorizations) to carry on its businesses as they are now being conducted
and to own its properties and assets.
(b) CORPORATE AUTHORITY. FSB has the requisite corporate
power and corporate authority and has taken all corporate action necessary
in order to execute and deliver this Agreement and to consummate the
transactions contemplated hereby. The Company has the requisite corporate
power and corporate authority and has taken all corporate action necessary
in order to execute and deliver this Agreement and to consummate the
transactions contemplated hereby. Each of FSB's and the Company's Board of
Directors (at meetings duly called and held) has by the affirmative vote of
two-thirds of all directors (a) determined that the Merger is advisable and
in the interests of it and its respective stockholders and (b) approved
this Agreement and the
15
transactions contemplated hereby. The Company, as sole stockholder of FSB,
has approved this Agreement and the Merger. This Agreement is a valid and
binding agreement of FSB and the Company enforceable against FSB and the
Company in accordance with its terms, except as may be limited by
bankruptcy, insolvency, fraudulent transfer or other similar laws affecting
the rights and remedies of creditors generally and subject to general
principles of equity (including possible unavailability of specific
performance or injunctive relief and the general discretion of the court
considering the matter), regardless whether enforceability is considered in
a proceeding in equity or at law.
(c) NO VIOLATIONS. The execution, delivery and performance
of this Agreement by FSB and the Company do not, and the consummation of
the transactions contemplated hereby will not (i) constitute a breach or
default under, the Federal Stock Charter or by-laws of FSB or the
Certificate of Incorporation or by-laws of the Company; (ii) constitute a
breach or default under (or an event which with due notice or lapse of time
or both would constitute a default under), or result in the termination of,
accelerate the performance required by, or result in the creation of any
lien, pledge, security interest, charge or other encumbrance upon any of
the properties or assets of FSB or the Company, or enable any person to
enjoin the Merger under, any of the terms, conditions or provisions of any
note, bond, indenture, deed of trust, loan agreement or other agreement,
instrument or obligation to which any of FSB or the Company are parties, or
to which any of their properties or assets may be bound or affected ("FSB
Agreement"), except for any of the foregoing that, individually or in the
aggregate, would not have a Material Adverse Effect; or (iii) require, with
respect to FSB or the Company, any approval, consent or waiver under any
law, rule, regulation, judgment, decree, order, governmental permit or
license or the approval, consent or waiver of any other party to any FSB
Agreement, other than (A) the required approvals, consents and waivers of
Government Regulators referred to in Section 5.1(b), and (B) any other
approvals, consents or waivers the absence of which, individually or in the
aggregate, would not have a Material Adverse Effect or enable any person to
enjoin the Merger.
(d) FINANCIAL STATEMENTS. (i) Each of the consolidated
statements of financial condition of the Company and FSB as of December 31,
1994, 1995 and 1996, related consolidated statements of income, changes in
stockholders' equity and cash flows for each of the years in the three-year
period ended December 31, 1996, together with notes and schedules thereto,
audited by Coopers & Xxxxxxx L.L.P., true and complete copies of which have
been provided by the Company and FSB to the Bank, (such year-end financial
statements collectively, the "Company's Financial Statements") (A) have
been prepared in accordance with generally accepted accounting principles
applied on a consistent basis, (B) fairly present the consolidated
financial position of the Company and the Bank at the dates and the
consolidated results of operations and cash flows of the Company and the
Bank for the periods stated therein and (C) are derived from the books and
records of the Company and the Bank, which are complete and accurate in all
material respects and have been maintained in accordance with good business
practice; provided, however, that for the year ended 1994, the Company's
Financial Statements include only financial statements of the Bank.
(ii) The Company and FSB have timely filed all material
reports, registrations and statements, together with any amendments
required to be made
16
with respect thereto, that they were required to file since January 1, 1994
with the FDIC and the OTS, and all other material reports and statements
required to be filed by them since January 1, 1994, and all fees and
assessments due and payable in connection therewith have been paid.
(e) LITIGATION. There are no civil, criminal or
administrative actions, suits, claims, hearings, investigations or
proceedings before any court, Government Regulator or otherwise pending or,
to the Knowledge of the Company or FSB after due inquiry, threatened
against the Company or FSB, that individually or in the aggregate, are
reasonably likely to hinder or delay the consummation of the transactions
contemplated hereby.
(f) ABSENCE OF REGULATORY ACTIONS. Except as set forth in
Schedule 3.2(f), neither the Company nor FSB is a party to any cease and
desist order, written agreement or memorandum of understanding with, or a
party to any commitment letter or similar undertaking to, or is subject to
any order or directive by, or is a recipient of any extraordinary
supervisory letter from, or has adopted any board resolutions at the
request of Government Regulators nor has it been advised by any Government
Regulator that it is contemplating issuing or requesting (or is considering
the appropriateness of issuing or requesting) any such order, directive,
written agreement, memorandum of understanding, extraordinary supervisory
letter, commitment letter, board resolutions or similar undertaking.
ARTICLE IV. COVENANTS
SECTION 4.1. ACQUISITION PROPOSALS. The Bank agrees that
neither it nor any of its officers and directors shall, and the Bank shall
direct and use its best efforts to cause its employees, agents and
representatives (including, without limitation, any investment banker,
attorney or accountant retained by it) not to, initiate, solicit or
encourage, directly or indirectly, any inquiries or the making of any
proposal or offer (including, without limitation, any proposal or offer to
stockholders of the Bank) with respect to a merger, consolidation or
similar transaction involving, or any purchase of all or any significant
portion of the assets or any equity securities of, the Bank (any such
proposal or offer being hereinafter referred to as an "Acquisition
Proposal") or, except to the extent legally required for the discharge by
the board of directors of the Bank of its fiduciary duties as advised in
writing by counsel, engage in any negotiations concerning, or provide any
confidential information or data to, or have any discussions with, any
person relating to an Acquisition Proposal, or otherwise facilitate any
effort or attempt to make or implement an Acquisition Proposal. The Bank
will immediately cease and cause to be terminated any existing activities,
discussions or negotiations with any parties conducted heretofore with
respect to any of the foregoing. The Bank will take the necessary steps to
inform the appropriate individuals or entities referred to in the first
sentence hereof of the obligations undertaken in this Section 4.1. The
Bank will notify FSB immediately if any such inquiries or proposals are
received by, or any such information is requested from, or any such
negotiations or discussions are sought to be initiated or continued, with
the Bank.
SECTION 4.2. EMPLOYEES. At the Effective Time, FSB will pay
or cause to be paid by the Surviving Bank severance payments to Bank
employees whose employment with the Surviving Bank will not continue after
the Effective
16
Time, up to the aggregate amount of $75,000, such amount to be allocated
among such employees in accordance with a schedule to be prepared by the
President of the Bank in consultation with FSB. At and following the
Effective Time, the Surviving Bank and FSB shall honor the employment
contracts set forth on Schedule 3.1(l) between the Bank and Xxxxxxx X.
Xxxxxxxx and Xxxxxxx X. Xxxxxxx.
SECTION 4.3. ACCESS AND INFORMATION. Upon reasonable notice,
the Bank shall afford to FSB and its representatives (including, without
limitation, officers and designated employees of FSB, and counsel,
accountants and other professionals retained) such access during normal
business hours throughout the period prior to the Effective Time to the
books, records (including, without limitation, tax returns and work papers
of independent auditors), properties, personnel and to such other
information as FSB may reasonably request; provided, however, that no
investigation pursuant to this Section 4.3 shall affect or be deemed to
modify any representation or warranty made herein. FSB will not, and will
cause its representatives not to, use any information obtained pursuant to
this Section 4.3 for any purpose unrelated to the consummation of the
transactions contemplated by this Agreement. Subject to the requirements
of law, FSB will keep confidential, and will cause its representatives to
keep confidential, all information and documents obtained pursuant to this
Section 4.3 unless such information (i) was already known to FSB or the
Company, (ii) becomes available to FSB or the Company from other sources
not known by such person to be bound by a confidentiality agreement, (iii)
is disclosed with the prior written approval of the Bank or (iv) is or
becomes readily ascertainable from published information or trade sources.
In the event that this Agreement is terminated or the transactions
contemplated by this Agreement shall otherwise fail to be consummated, each
party shall promptly cause all copies of documents or extracts thereof
containing information and data as to another party hereto (or an affiliate
of any party hereto) to be returned to the party which furnished the same.
SECTION 4.4. CERTAIN FILINGS, CONSENTS AND ARRANGEMENTS.
FSB, the Company and the Bank shall (a) as soon as practicable make any
filings and applications required to be filed or made in order to obtain
all approvals, consents and waivers of Government Regulators necessary or
appropriate for the consummation of the transactions contemplated hereby,
(b) cooperate with one another in promptly (i) determining what filings are
required to be made or approvals, consents or waivers are required to be
obtained under any relevant federal, state or foreign law or regulation and
(ii) making any such filings, furnishing information required in connection
therewith and seeking timely to obtain any such approvals, consents or
waivers, and (c) deliver to the other parties copies of the publicly
available portions of all such filings and applications promptly after they
are filed.
SECTION 4.5. INDEMNIFICATION. FSB agrees that following the
Effective Time, it shall indemnify and hold harmless any director or
officer of the Bank or the Subsidiary, serving as such immediately prior to
the Effective Time, who has rights to indemnification from the Bank or the
Subsidiary to the same extent and on the same conditions as such person is
entitled to indemnification pursuant to the Bank's Federal Stock Charter or
by-laws or the Subsidiary's Certificate of Incorporation or by-laws as in
effect on December 31, 1996, to the extent legally permitted to do so, with
respect to claims asserted, or actions or proceedings commenced, within
five years after the Effective Time, based upon or arising from events or
transactions occurring on or prior to the Effective Time, or the operation
of
18
the business of the Bank, directly or indirectly by FSB or the Company,
from and after the Effective Time.
SECTION 4.6. ADDITIONAL AGREEMENTS. Subject to the terms and
conditions herein provided, each of the parties hereto agrees to use all
reasonable efforts to take promptly, or cause to be taken promptly, all
actions and to do promptly, or cause to be done promptly, all things
necessary, proper or advisable under applicable laws and regulations to
consummate and make effective the transactions contemplated by this
Agreement as promptly as practicable, including using efforts to obtain all
necessary actions or non-actions, extensions, waivers, consents and
approvals from all applicable Government Regulators, effecting all
necessary registrations, applications and filings and obtaining any
required contractual consents and regulatory approvals.
SECTION 4.7. PUBLICITY. Except as contemplated in this
Agreement or required by applicable law, neither the Bank nor FSB nor the
Company shall, without the prior consent of the other party (which consent
shall not be unreasonably withheld), issue any press release or otherwise
making public filings or statements with respect to this Agreement or the
transactions contemplated.
SECTION 4.8. PROXY MATERIALS. (a) As soon as practicable
after the date hereof, the Company, FSB and the Bank shall together, or
pursuant to an allocation of responsibility to be agreed upon between them
(i) prepare the proxy materials (the "Proxy Materials") with respect to the
Bank Meeting (as defined in Section 4.9). The Proxy Materials, at the time
of mailing thereof, shall be approved by the Bank, the Company and FSB.
(b) The Bank represents and warrants to the Company and FSB
and the Company and FSB represent and warrant to the Bank that none of the
information with respect to it or them, as the case may be, and in the case
of the Bank, any of its directors, officers or stockholders or, in the case
of the Company and FSB, any of their respective directors or officers, to
be included in the Proxy Materials and any amendments or supplements
thereto, will at the time of the mailing thereof and at the time of the
Bank Meeting, as the case may be, contain any untrue statement of a
material fact or omit to state any material fact required to be stated
therein or necessary in order to make the statements therein, in light of
the circumstances under which they are made, not misleading.
(c) The Bank, on the one hand, and the Company and FSB, on
the other hand, shall furnish as soon as practicable to one another and one
another's counsel all such information as may be required to effectuate the
actions set forth in this Section 4.8.
SECTION 4.9. STOCKHOLDERS' MEETING. The Bank shall take all
action necessary, in accordance with applicable law and its Federal Stock
Charter and by-laws, to convene an annual or special meeting of the holders
of Bank Common Stock (the "Bank Meeting") as promptly as practicable for
the purpose of considering and taking action required by this Agreement.
Except to the extent legally required for the discharge by the Bank's Board
of Directors of its fiduciary duties as advised in writing by the Bank's
counsel, the Board of Directors of the Bank shall unanimously recommend
that at the Bank Meeting the holders of the Bank Common Stock vote in favor
of and approve this Agreement and the Merger.
19
SECTION 4.10. LETTER AGREEMENT. Simultaneously with the
execution and delivery of this Agreement, PASL (by a duly authorized
officer) and each member of the Board of Directors of the Bank shall
execute and deliver to the Company and the Bank a letter in the form of
Exhibit B hereto.
SECTION 4.11. NOTIFICATION OF CERTAIN MATTERS. The Bank
shall give prompt notice to the Company and FSB of: (a) any notice of, or
other communication relating to, a default or event that, with notice or
lapse of time or both, would become a default, received by the Bank or the
Subsidiary subsequent to the date of this Agreement and prior to the
Effective Time, under any Material Contract; and (b) any change in the
financial condition, properties, business, results of operations or
prospects of it and the Subsidiary taken as a whole or the occurrence of
any event which, so far as reasonably can be foreseen at the time of its
occurrence, would result in any Material Adverse Effect. Each of the Bank,
FSB and the Company shall give prompt notice to the other parties of any
notice or other communication from any third party alleging that the
consent of such third party is or may be required in connection with the
transactions contemplated by this Agreement.
SECTION 4.12. INTERIM. FSB shall promptly take all steps
necessary or appropriate in order to organize Interim and shall cause
Interim to take all actions which are necessary or appropriate in order to
effectuate the purposes of this Agreement.
ARTICLE V. CONDITIONS TO CONSUMMATION
SECTION 5.1. CONDITIONS TO ALL PARTIES' OBLIGATIONS. The
respective obligations of FSB, the Company and the Bank to effect the
Merger shall be subject to the satisfaction or waiver prior to the
Effective Time of the following conditions:
(a) This Agreement and the transactions contemplated hereby
shall have been approved by the affirmative vote of the holders of two-thirds
of the outstanding Bank Common Stock.
(b) Interim shall have been duly organized.
(c) FSB, the Company, Interim and the Bank shall have
procured from the OTS and the FDIC (to the extent required by law) the
required approvals, consents or waivers with respect to the Agreement and
the transactions contemplated hereby and all applicable statutory waiting
periods shall have expired; and FSB, the Company, Interim and the Bank
shall have procured all other regulatory approvals, consents or waivers of
Government Regulators or other persons that are necessary to the
consummation of the transactions contemplated by the Agreement; PROVIDED,
HOWEVER, that no approval, consent or waiver referred to in this Section
5.1(c) shall be deemed to have been received if it shall include any
condition or requirement that, individually or in the aggregate, would (i)
result in a Material Adverse Effect on FSB, the Company or the Surviving
Bank (on a combined basis giving effect to the Merger and the other
transactions contemplated by this Agreement) or (ii) would materially
reduce the benefits of the transactions contemplated by the Agreement to
FSB, the Company or the Surviving Bank in a manner that FSB or the Company,
in their good faith reasonable judgment, would
20
not have entered into this Agreement had such condition or requirement been
known at the date hereof.
(d) All other requirements prescribed by law which are
necessary to the consummation of the transactions contemplated by this
Agreement shall have been satisfied.
(e) No party hereto or any affiliate thereof shall be subject
to any order, decree or injunction of a court or Government Regulator of
competent jurisdiction which enjoins or prohibits the consummation of the
Merger or any other transaction contemplated by this Agreement, and no
litigation or proceeding shall be pending against FSB, the Company or the
Bank or any of their affiliates brought by any Government Regulator seeking
to prevent consummation of the transactions contemplated hereby.
(f) No statute, rule, regulation, order, injunction or decree
shall have been enacted, entered, promulgated or enforced by any Government
Regulator which prohibits, restricts or makes illegal consummation of the
Merger or any other transaction contemplated by this Agreement.
SECTION 5.2. CONDITIONS TO OBLIGATIONS OF FSB AND THE
COMPANY. The obligations of FSB and the Company to effect the Merger shall
be subject to the satisfaction or waiver prior to the Effective Time of the
following additional conditions:
(a) Each of the representations and warranties of the Bank
contained in this Agreement shall, in all material respects, be true and
correct at the Effective Time as if made on such date (or on the date when
made in the case of any representation or warranty which specifically
relates to an earlier date); the Bank shall have performed, in all material
respects, each of its covenants and agreements contained in this Agreement
and FSB and the Company shall have received at the Closing a certificate
signed by the Chief Executive Officer and the Chief Financial Officer of
the Bank, dated the Effective Time, to the foregoing effect.
(b) The Bank shall have delivered to FSB a letter dated the
date of the Effective Time and delivered at the Closing, from BDO Xxxxxxx,
LLP, the Bank's independent public accountants, in form and substance
reasonably acceptable to the Company and FSB.
(c) FSB and the Company shall have received at the Closing an
opinion, dated as of the Effective Time, from Xxxxxxx Xxxxxxxxx LLP,
counsel to the Bank, which opinion shall be in form and substance
reasonably acceptable to the Company and FSB to the effect that:
(i) the Bank is a federally chartered stock savings bank
duly organized, validly existing and in good standing under the laws of the
United States of America and is duly qualified to do business and is in
good standing in all jurisdictions where the properties owned, leased or
operated, or the business conducted, by it requires such qualification,
except for such failure to qualify or be in such good standing which, when
taken together with all other such failures, would not have a Material
Adverse Effect and the Bank has the requisite corporate and other power and
authority (including all federal, state and local governmental
authorizations) to carry on its businesses as they are now being conducted
and to own its properties and assets;
21
(ii) the Bank has the requisite corporate power and
corporate authority and has taken all corporate action and received all
corporate approvals necessary in order to execute and deliver this
Agreement and to consummate the transactions contemplated hereby. The
Agreement has been duly executed and delivered on behalf of the Bank, and
assuming due execution and delivery on behalf of the Company and FSB, is a
valid and binding agreement of the Bank enforceable against the Bank in
accordance with its terms, except as may be limited by bankruptcy,
insolvency, fraudulent transfer or other similar laws affecting the rights
and remedies of creditors generally and subject to general principles of
equity (including possible unavailability of specific performance or
injunctive relief and the general discretion of the court considering the
matter), regardless whether enforceability is considered in a proceeding in
equity or at law;
(iii) the authorized and outstanding shares of Bank
Stock are as stated in Section 3.1(b) and such shares are duly authorized,
validly issued, fully paid and nonassessable;
(iv) the execution and delivery by the Bank of the
Agreement and the consummation of the transactions contemplated thereby do
not (A) violate the Federal Stock Charter or by-laws of the Bank, (B)
breach or result in a default under (or an event which with due notice or
lapse of time or both would constitute a default under), or result in the
termination of, accelerate the performance required by, or result in the
creation of any lien, pledge, security interest, charge or other
encumbrance upon any of the properties or assets of the Bank, or enable any
person to enjoin the Merger under, any of the terms, conditions or
provisions of any Bank Agreement known to such counsel, or (C) violate any
provisions of statutory law or regulation known to such counsel to be
applicable to the Bank.
(v) such counsel does not know of any civil, criminal or
administrative action, suit, claim, hearing, investigation or proceeding
before any court, Government Regulator or otherwise pending or threatened
against the Bank, the Subsidiary, or any of their respective present or
former officers, directors or employees, other than those that are set
forth in Schedule 3.1(j).
In rendering such opinion, such counsel may rely, to the extent such
counsel deems such reliance necessary, as to matters of fact upon
certificates of government officials and of senior officers of the Bank and
such other documents as such counsel may deem appropriate, provided that
the extent of such reliance is set forth in such opinion..
(d) FSB, the Company and Xxxxxx Xxxxxxx shall have entered
into Employment Agreements substantially in the form attached as Exhibits
C(1) and C(2), and the agreements set forth on Schedule 3.1(l) between the
Bank and Xx. Xxxxxxx shall have been terminated.
(e) The aggregate number of Dissenters' Shares shall not be
in excess of 10% of the outstanding shares of Bank Common Stock.
22
(f) The Company and FSB shall have received prior to the
mailing of the Proxy Materials a favorable written opinion of Advest, Inc.
with respect to the fairness of the transactions contemplated by this
Agreement to FSB's and the Company's shareholders from a financial point of
view.
(g) Each member of the Board of Directors of the Bank shall
have submitted his resignation in writing as a director of the Surviving
Bank, effective as of the Effective Time.
SECTION 5.3. CONDITIONS TO THE OBLIGATION OF THE BANK. The
obligation of the Bank to effect the Merger shall be subject to the
satisfaction or waiver prior to the Effective Time of the following
additional conditions:
(a) Each of the representations, warranties and covenants of
FSB and the Company contained in this Agreement shall, in all material
respects, be true and correct on the Effective Time as if made on such date
(or on the date when made in the case of any representation or warranty
which specifically relates to an earlier date); FSB and the Company shall
have performed, in all material respects, each of their covenants and
agreements contained in this Agreement; and the Bank shall have received at
the Closing certificates signed by the President and CEO and the Chief
Financial Officer of each of FSB and the Company, dated the Effective Time,
to the foregoing effect.
(b) The Bank shall have received at the Closing an opinion,
dated as of the Effective Time, from Xxxxxx Xxxxxxx & Xxxx LLP, counsel to
FSB and the Company, which opinion shall be in form and substance
reasonably acceptable to the Bank to the effect that:
(i) FSB is a federally chartered stock savings bank duly
organized, validly existing and in good standing under the laws of the
United States of America. The Company is a corporation duly organized and
in good standing under the laws of Delaware;
(ii) FSB and the Company have the requisite corporate
power and corporate authority and have taken all corporate action and
received all corporate approvals necessary in order to execute and deliver
this Agreement and to consummate the transactions contemplated hereby. The
Agreement has been duly executed and delivered on behalf of each of FSB and
the Company and, assuming due execution and delivery on behalf of the Bank,
is a valid and binding agreement of FSB and the Company enforceable against
FSB and the Company in accordance with its terms, except as may be limited
by bankruptcy, insolvency, fraudulent transfer or other similar laws
affecting the rights and remedies of creditors generally and subject to
general principles of equity (including possible unavailability of specific
performance or injunctive relief and the general discretion of the court
considering the matter), regardless whether enforceability is considered in
a proceeding in equity or at law; and
(iii) the execution and delivery by FSB and the Company
of the Agreement and the consummation of the transactions contemplated
thereby do not (A) violate the charter or by-laws of either FSB or the
Company, (B) breach, or result in a default under, any existing obligation
of FSB or the Company under any agreement listed in the exhibit sections of
the Company's filings with the Securities and Exchange Commission under the
Securities
23
Exchange Act of 1934, or (C) violate any provisions of statutory law or
regulation known to such counsel to be applicable to FSB or the Company.
(iv) such counsel does not know of any civil, criminal
or administrative action, suit, claim, hearing, investigation or proceeding
before any court, Governmental Regulation or otherwise pending or
threatened against FSB or the Company that seek to affect the
enforceability of the Agreement or to enjoin the Merger.
In rendering such opinion, such counsel may rely, to the extent such
counsel deems such reliance necessary, as to matters of fact upon
certificates of government officials and of any senior officers of FSB and
the Company and such other documents as such counsel may deem appropriate,
provided that the extent of such reliance is set forth in such opinion.
(c) The aggregate amount of the Merger Consideration and the
Class A Redemption shall have been provided to the Exchange Agent by FSB or
the Company in cash or cash equivalents to be held by the Exchange Agent,
in escrow, pending payment pursuant to Section 1.3.
ARTICLE VI. TERMINATION
SECTION 6.1. TERMINATION. This Agreement may be terminated,
and the Merger abandoned, prior to the Effective Time, either before or
after its approval by the stockholders of the Bank:
(a) by the mutual consent of FSB, the Company and the Bank,
if the Board of Directors of each so determines by vote of a majority of
the members of its entire board;
(b) by action of either the Boards of Directors of the
Company and FSB, on the one hand, or the Board of Directors of the Bank, on
the other hand, if the Merger shall not have become effective on or prior
to September 30, 1997, or such later date as shall have been approved by
the Boards of Directors of the Company, FSB and the Bank (unless the
failure to so consummate by such time is due to the breach of any
representation, warranty or covenant contained in this Agreement by the
party seeking to terminate);
(c) by action of the Boards of Directors of the Company and
FSB, if (i) the Board of Directors of the Bank shall have authorized,
recommended or proposed, or announced its intention to authorize, recommend
or propose any Acquisition Proposal (as defined in Section 4.1), or (ii)
the Bank shall have entered into any agreement in principle or definitive
agreement with respect to any Acquisition Proposal, or (iii) the Board of
Directors of the Bank shall have publicly withdrawn or modified its
recommendation that the holders of Bank Common Stock vote in favor of and
approve this Agreement and this Merger; or (iv) the condition set forth in
Section 5.1(a) shall not have been satisfied.
(d) by action of the Board of Directors of the Bank if the
condition set forth in Section 5.1(a) shall not have been satisfied AND at
least 30 days have elapsed since the convening of the Bank Meeting.
24
SECTION 6.2. EFFECT OF TERMINATION. In the event of the
termination of this Agreement by either FSB, the Company or the Bank, as
provided above, this Agreement shall thereafter become void and, subject to
the provisions of Section 6.3 and Section 7.2, there shall be no liability
on the part of any party hereto or their respective officers or directors,
except that any such termination shall be without prejudice to the rights
of any party hereto arising out of the willful breach by any other party of
any covenant or willful misrepresentation contained in this Agreement.
SECTION 6.3. Termination Fees. (a) The parties hereby
acknowledge that, in negotiating and executing this Agreement and in taking
the steps necessary or appropriate to effect the transactions contemplated
hereby, the Company and FSB have incurred and will incur direct and
indirect monetary and other costs (including without limitation attorneys'
fees and costs and costs of management and employee time). To compensate
the Company and FSB for such costs, and for foregoing other opportunities,
if (A) this Agreement terminates because the Bank does not use all
reasonable efforts to consummate the transactions contemplated by this
Agreement in accordance with the terms of this Agreement (unless a
condition set forth in Section 5.3 is not satisfied and such
nonsatisfaction has not been the result of the failure of the Bank to use
all reasonable efforts to consummate this Agreement in accordance with the
terms of this Agreement; (B) this Agreement is terminated by the Company
and FSB pursuant to Section 6.1(c) (i), (ii) or (iii); or (C) this
Agreement is terminated by the Company and FSB pursuant to Section
6.1(c)(iv) and PASL or any member of the Board of Directors of the Bank
shall have breached its or his agreement contained in the letter agreement
referred to in Section 4.10, then the Bank shall pay to FSB on demand (and
in no event more than three days after such demand) in immediately
available funds, One Million Dollars ($1,000,000); provided, however, that
no such fee shall be payable in the event that this Agreement is terminated
by the Company and FSB pursuant to Section 6.1(c)(iv) and PASL and the
members of the Board of Directors of the Bank shall have complied with the
letter agreement referred to in Section 4.10.
(b) The parties hereby acknowledge that, in negotiating and
executing this Agreement and in taking the steps necessary or appropriate
to effect the transactions contemplated hereby, the Bank has incurred and
will incur direct and indirect monetary and other costs (including with
limitation attorneys' fees and costs and costs of management and employee
time). To compensate the Bank for such costs, and for foregoing other
opportunities, if this Agreement terminates because either FSB or the
Company does not use all reasonable efforts to consummate the transactions
contemplated by this Agreement in accordance with the terms of this
Agreement (unless a condition set forth in Section 5.2 is not satisfied and
such nonsatisfaction has not been the result of the failure of FSB or the
Company to use all reasonable efforts to consummate this Agreement in
accordance with the terms of this Agreement, then FSB or the Company shall
pay to the Bank on demand (and in no event more than three days after such
demand) in immediately available funds, One Million Dollars ($1,000,000).
ARTICLE VII. OTHER MATTERS
SECTION 7.1. CERTAIN DEFINITIONS; INTERPRETATION. As used in
this Agreement, the following terms shall have the meanings indicated:
25
"BANK'S KNOWLEDGE" or "FSB's OR THE COMPANY'S KNOWLEDGE" or other
similar phrases means information which is actually known to any officer or
director of the Bank, FSB or the Company, as the case may be, who is
subject to Regulation O, 12 C.F.R. Part 215.
"MATERIAL ADVERSE EFFECT," with respect to a person, means any
condition, event, change or occurrence that is reasonably likely to have a
material adverse effect upon (A) the financial condition, properties,
assets, business or results of operations of such person and its
subsidiaries, taken as a whole, or (B) the ability of such person to
perform its obligations under, and to consummate the transactions
contemplated by, this Agreement.
"PERSON" includes an individual, corporation, partnership,
association, trust or unincorporated organization.
When a reference is made in this Agreement to Sections or
Schedules, such reference shall be to a Section of, or Schedule to, this
Agreement unless otherwise indicated. The table of contents, index of
defined terms and headings contained in this Agreement are for ease of
reference only and shall not affect the meaning or interpretation of this
Agreement. Whenever the words "include," "includes" or "including" are
used in this Agreement, they shall be deemed followed by the words "without
limitation." Any singular term in this Agreement shall be deemed to include
the plural, and any plural term the singular.
SECTION 7.2. SURVIVAL. Only those agreements and covenants
of the parties that are by their terms applicable in whole or in part after
the Effective Time shall survive the Effective Time. All other
representations, warranties, agreements and covenants shall be deemed to be
conditions of this Agreement and shall not survive the Effective Time. If
this Agreement shall be terminated, the agreements of the parties in the
last two sentences of Section 4.3 and in Section 6.3 and Section 7.6 shall
survive such termination.
SECTION 7.3. WAIVER. Prior to the Effective Time, any
provision of this Agreement may be: (i) waived by the party benefited by
the provision; or (ii) amended or modified at any time (including the
structure of the transaction) by an agreement in writing between the
parties hereto approved by their respective Boards of Directors.
SECTION 7.4. COUNTERPARTS. This Agreement may be executed in
counterparts each of which shall be deemed to constitute an original, but
all of which together shall constitute one and the same instrument.
SECTION 7.5. GOVERNING LAW. This Agreement shall be governed
by, and interpreted in accordance with, the laws of the United States of
America, as to matters governed by laws applicable to federal stock
associations and, as to other matters, the laws of the State of New York,
without reference to the choice of law principles thereof.
SECTION 7.6. EXPENSES. Except as otherwise provided in
Section 6.3, each party hereto will bear all expenses incurred by it in
connection with this Agreement and the transactions contemplated hereby.
26
SECTION 7.7. NOTICES. All notices, requests, acknowledgments
and other communications hereunder to a party shall be in writing and shall
be deemed to have been duly given when delivered by hand or telecopy
(confirmed in writing) to such party at its address set forth below or such
other address as such party may specify by notice to the other parties
hereto.
If to the Bank, to:
New York Federal Savings Bank
0 Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Telecopy: (000) 000-0000
Attention: President
With copies to:
Xxxxxxx, Xxxxxxxxx LLP
0 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Telecopy: (000) 000-0000
Attention: Xxxxxxxx X. Xxxxxxxx
If to Interim or FSB, to:
Flushing Savings Bank
000-00 Xxxxxxxx Xxxxxxxxx
Xxxxxxxx, XX 00000
Telecopy: (000) 000-0000
Attention: President and CEO
If to the Company, to:
Flushing Financial Corporation
000-00 Xxxxxxxx Xxxxxxxxx
Xxxxxxxx, XX 00000
Telecopy: (000) 000-0000
Attention: President and CEO
With copies, in the case of FSB, the Company and Interim, to:
Xxxxxx Xxxxxxx & Xxxx LLP
Xxx Xxxxxxx Xxxx Xxxxx
Xxx Xxxx, XX 00000
Telecopy: (000) 000-0000
Attention: Xxxxxxxx X. Xxxx
27
SECTION 7.8. ENTIRE AGREEMENT, ETC. This Agreement
represents the entire understanding of the parties hereto with reference to
the transactions contemplated hereby and supersedes any and all other oral
or written agreements heretofore made. All terms and provisions of this
Agreement shall be binding upon and shall inure to the benefit of the
parties hereto and their respective successors and assigns. Nothing in
this Agreement is intended to confer upon any other person any rights or
remedies of any nature whatsoever under or by reason of this Agreement.
28
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be executed by their duly authorized officers as of the day and year
first above written.
FLUSHING SAVINGS BANK, FSB
By: /s/ Xxxxx X. XxXxxxxxx
------------------------
Name: Xxxxx X. XxXxxxxxx
Title: President and C.E.O.
FLUSHING FINANCIAL CORPORATION
By: /s/ Xxxxx X. XxXxxxxxx
------------------------
Name: Xxxxx X. XxXxxxxxx
Title: President and C.E.O.
NEW YORK FEDERAL SAVINGS BANK
By: /s/ Xxxxx X. Xxxxxxx
------------------------
Name: Xxxxx X. Xxxxxxx
Title: President
29
EXHIBIT AND SCHEDULE INDEX
TO
AGREEMENT AND PLAN OF MERGER DATED
AS OF APRIL 24 1997 BY AND BETWEEN
FLUSHING SAVINGS BANK, FSB, FLUSHING
FINANCIAL CORPORATION AND NEW YORK SAVINGS BANK ("BANK")
EXHIBITS DESCRIPTION
------------ -----------------------------------------------------------
Exhibit A List of directors and officers of the Surviving Bank
Exhibit B(1) Letter Agreement between PASL Holding Corporation and
Flushing Financial Corporation confirming that all shares
will be voted to approve the transaction
Exhibit B(2) Letter Agreement between each member of the Board of
Directors of the Bank and Flushing Financial Corporation
confirming that all shares will be voted to approve the
transaction
Exhibit C(1) Employment Agreement between Flushing Savings Bank,
FSB and Xxxxxx X. Xxxxxxx
Exhibit C(2) Employment Agreement between Flushing Financial
Corporation and Xxxxxx X. Xxxxxxx
SCHEDULES DESCRIPTION
------------ -----------------------------------------------------------
Schedule 3.1(h) Absence of Certain Changes, Liabilities
Schedule 3.1(i) Tax Examinations & Audits
Schedule 3.1(j) Litigation and Other Liability Disclosures
Schedule 3.1(k) Regulatory Actions & Orders
Schedule 3.1(l) Contracts, Agreements
Schedule 3.1(n) Employee Benefit Plans
Schedule 3.1(o) Title to Assets, Leases
Schedule 3.1(q) Brokers, Finders Employed by Bank
Schedule 3.1(r) Environmental Disclosures
(continued)
30
EXHIBIT AND SCHEDULE INDEX
TO
AGREEMENT AND PLAN OF MERGER DATED
AS OF APRIL 24 1997 BY AND BETWEEN
FLUSHING SAVINGS BANK, FSB, FLUSHING
FINANCIAL CORPORATION AND NEW YORK SAVINGS BANK ("BANK")
SCHEDULES DESCRIPTION
------------ -----------------------------------------------------------
Schedule 3.1(t) Related Party Contracts, Interests
Schedule 3.1(w) Loan Portfolio Classifications
Schedule 3.1(x) Voting, Shareholder Agreements
Schedule 3.2(f) Absence of Regulatory Actions
Flushing Savings Bank, FSB and Flushing Financial Corporation hereby agree
to furnish supplementally a copy of any omitted schedule or exhibit to the
Securities and Exchange Commission upon request.
