Exhibit 2.1
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AGREEMENT AND PLAN OF MERGER
DATED AS OF JULY 17, 1998
BY AND BETWEEN
RICHMOND COUNTY FINANCIAL CORP.
AND
IRONBOUND BANKCORP, NJ
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TABLE OF CONTENTS
PAGE NO.
Introductory Statement............................................................. 4
ARTICLE I
THE MERGER................................................................. 5
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Section 1.1. Structure of the Merger...................................... 5
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Section 1.2. Effect on Outstanding Shares of Ironbound Common Stock....... 5
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Section 1.3. Exchange Procedures.......................................... 6
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Section 1.4. Stock Options................................................ 8
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Section 1.5. Bank Merger.................................................. 9
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Section 1.6. Directors of RCFC after Effective Time....................... 9
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Section 1.7. Alternative Structure........................................ 9
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Section 1.8. Dissenters' Rights........................................... 10
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ARTICLE II
REPRESENTATIONS AND WARRANTIES............................................. 10
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Section 2.1. Disclosure Letters........................................... 10
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Section 2.2. Standards.................................................... 10
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Section 2.3. Representations and Warranties of Ironbound.................. 11
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Section 2.4. Representations and Warranties of RCFC....................... 25
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ARTICLE III
CONDUCT PENDING THE MERGER................................................. 38
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Section 3.1. Conduct of Ironbound's Business Prior to the Effective Time.. 38
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Section 3.2. Forbearance by Ironbound..................................... 38
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Section 3.3. Conduct of RCFC's Business Prior to the Effective Time....... 42
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ARTICLE IV
COVENANTS.................................................................. 42
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Section 4.1. Acquisition Proposals........................................ 42
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Section 4.2. Certain Policies of Ironbound................................ 43
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Section 4.3. Access and Information....................................... 44
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Section 4.4. Certain Filings, Consents and Arrangements................... 45
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Section 4.5. Antitakeover Provisions...................................... 45
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Section 4.6. Additional Agreements........................................ 46
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Section 4.7. Publicity.................................................... 46
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Section 4.8. Stockholders Meeting......................................... 46
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Section 4.9. Proxy Statements; Comfort Letters............................ 46
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PAGE NO.
Section 4.10. Registration of RCFC Common Stock............................ 47
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Section 4.11. Affiliate Letters............................................ 47
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Section 4.12. Notification of Certain Matters.............................. 48
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Section 4.13. Employees, Directors and Officers............................ 48
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Section 4.14. Indemnification; Directors' and Officers' Insurance.......... 49
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Section 4.15. Tax-Free Reorganization Treatment............................ 50
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Section 4.16. Savings and Loan Holding Company Structure................... 51
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Section 4.17. Divisional Board............................................. 51
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ARTICLE V
CONDITIONS TO CONSUMMATION................................................. 51
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Section 5.1. Conditions to Each Party's Obligations....................... 51
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Section 5.2. Conditions to the Obligations of RCFC and RCFC Bank.......... 52
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Section 5.3. Conditions to the Obligations of Ironbound and
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Ironbound Bank............................................... 54
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ARTICLE VI
TERMINATION................................................................ 56
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Section 6.1. Termination.................................................. 56
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ARTICLE VII
CLOSING, EFFECTIVE DATE AND EFFECTIVE TIME................................. 58
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Section 7.1. Effective Date and Effective Time............................ 58
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Section 7.2. Deliveries at the Closing.................................... 58
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Section 7.3. Adjustment to the Exchange Ratio............................. 58
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ARTICLE VIII
CERTAIN OTHER MATTERS...................................................... 58
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Section 8.1. Certain Definitions; Interpretation.......................... 58
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Section 8.2. Survival..................................................... 59
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Section 8.3. Waiver; Amendment............................................ 59
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Section 8.4. Counterparts................................................. 59
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Section 8.5. Governing Law................................................ 59
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Section 8.6. Expenses..................................................... 59
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Section 8.7. Notices...................................................... 59
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Section 8.8. Entire Agreement; etc. ...................................... 61
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Section 8.9. Assignment................................................... 61
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AGREEMENT AND PLAN OF MERGER
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This is an AGREEMENT AND PLAN OF MERGER, dated as of the 17th day of
July, 1998 ("Agreement"), by and between Richmond County Financial Corp., a
Delaware corporation ("RCFC"), and Ironbound Bankcorp, NJ, a New Jersey
corporation ("Ironbound").
INTRODUCTORY STATEMENT
The Board of Directors of each of RCFC and Ironbound (i) has
determined that this Agreement and the business combination and related
transactions contemplated hereby are in the best interests of RCFC and
Ironbound, respectively, and in the best long-term interests of their respective
stockholders, (ii) has determined that this Agreement and the transactions
contemplated hereby are consistent with, and in furtherance of, its respective
business strategies and (iii) has approved, at meetings of each of such Boards
of Directors, this Agreement.
Concurrently with the execution and delivery of this Agreement, and as
a condition and inducement to RCFC's willingness to enter into this Agreement,
RCFC and Ironbound have entered into a stock option agreement (the "Option
Agreement"), pursuant to which Ironbound has granted to RCFC an option to
purchase shares of Ironbound's common stock, par value $5.00 per share
("Ironbound Common Stock"), upon the terms and conditions therein contained; and
certain officers and directors of Ironbound will each, within fourteen days of
the date of this Agreement, execute in favor of RCFC a Letter Agreement in the
form annexed as Exhibit A.
The parties hereto intend that the Merger shall qualify as a
reorganization under the provisions of Section 368(a) of the Internal Revenue
Code of 1986, as amended ("Code"), for federal income tax purposes, and that the
Merger shall be accounted for as a pooling-of-interests for accounting purposes.
RCFC and Ironbound desire to make certain representations, warranties
and agreements in connection with the business combination and related
transactions provided for herein and to prescribe various conditions to such
transactions.
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:
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ARTICLE I
THE MERGER
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Section 1.1. Structure of the Merger. On the Effective Date (as
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defined in Section 7.1), Ironbound will merge with and into RCFC ("Merger"),
with RCFC being the surviving entity, pursuant to the provisions of, and with
the effect provided in, the Delaware General Corporation Law. Upon consummation
of the Merger, the separate corporate existence of Ironbound shall cease. RCFC
shall continue to be governed by the laws of the State of Delaware and its name
and separate corporate existence, with all of its rights, privileges,
immunities, powers and franchises, shall continue unaffected by the Merger.
Section 1.2. Effect on Outstanding Shares of Ironbound Common Stock.
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(a) By virtue of the Merger, automatically and without any action on
the part of the holder thereof, each share of Ironbound Common Stock issued and
outstanding at the Effective Time (as defined in Section 7.1), other than (i)
shares the holder of which (the "Dissenting Shareholders") pursuant to any
applicable law providing for dissenters' or appraisal rights is entitled to
receive payment in accordance with the provisions of any such law, such holder
to have only the rights provided in any such law (the "Dissenters' Shares"),
(ii) shares held directly or indirectly by RCFC (other than shares held in a
fiduciary capacity or in satisfaction of a debt previously contracted), and
(iii) shares held by Ironbound as treasury stock (such shares referred to in
clauses (i), (ii) and (iii) being referred to herein as the "Excluded Shares")
shall become and be converted into the right to receive 1.45 shares of RCFC
Common Stock (the "Exchange Ratio") (subject to Section 7.3); provided, however,
that, notwithstanding any other provision hereof, no fraction of a share of RCFC
Common Stock and no certificates or scrip therefor will be issued in the Merger;
instead, RCFC shall pay to each holder of Ironbound Common Stock who would
otherwise be entitled to a fraction of a share of RCFC Common Stock an amount in
cash, rounded to the nearest cent, determined by multiplying such fraction by
the RCFC Market Value (collectively, the "Merger Consideration").
(b) As used in Sections 1.2(a), 6.1(g) and 7.3, "RCFC Market Value"
shall be the average of the closing sales price on that day, as reported on the
National Market System of The Nasdaq Stock Market, Inc. ("Nasdaq National
Market"), for the 15 consecutive trading days immediately preceding the day that
is the latest of (i) the day of expiration of the last waiting period with
respect to any of the required regulatory approvals, as contemplated by Section
5.1(b), (ii) the day on which the last of the required regulatory approvals, as
contemplated by Section 5.1(b), is obtained and (iii) the day on which the last
of the required stockholder approvals have been obtained (such date being
referred to herein as the "Valuation Date").
(c) In the event that, between the date hereof and prior to the
Effective Time, the outstanding shares of RCFC Common Stock shall have been
increased, decreased or changed into or exchanged for a different number or kind
of shares or securities by reorganization,
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recapitalization, reclassification, stock split or other like changes in the
capitalization of RCFC, or if a stock dividend is declared on RCFC Common Stock
with a record date (as to a stock split, the pay date) within such period, then
an appropriate and proportionate adjustment shall be made in the number and kind
of shares of RCFC Common Stock to be thereafter delivered pursuant to this
Agreement, and the Exchange Ratio set forth in Section 1.2 of this Article I, so
that each stockholder of Ironbound shall be entitled to receive such number of
shares of RCFC Common Stock or other securities as such stockholder would have
received pursuant to such reorganization, recapitalization, reclassification,
stock split, exchange of shares or readjustment or other like changes in the
capitalization of RCFC, or as a result of a stock dividend on RCFC Common Stock,
had the record (or pay) date therefor been immediately following the Effective
Time.
(d) As of the Effective Time, each Excluded Share, other than
Dissenters' Shares, shall be cancelled and retired and shall cease to exist, and
no exchange or payment shall be made with respect thereto. All shares of RCFC
Common Stock (as defined in Section 2.4(b)) that are held by Ironbound, if any,
other than shares held in a fiduciary capacity or in satisfaction of a debt
previously contracted, shall become treasury stock of RCFC.
Section 1.3. Exchange Procedures.
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(a) Appropriate transmittal materials ("Letter of Transmittal") in a
form satisfactory to RCFC and Ironbound, shall be mailed as soon as reasonably
practicable after the Effective Time, and in no event later than 5 business days
thereafter, to each holder of record of Ironbound Common Stock as of the
Effective Time. A Letter of Transmittal will be deemed properly completed only
if accompanied by certificates representing all shares of Ironbound Common Stock
to be converted thereby.
(b) At and after the Effective Time, each certificate ("Ironbound
Certificate") previously representing shares of Ironbound Common Stock (except
as specifically set forth in Section 1.2) shall represent only the right to
receive the Merger Consideration.
(c) Prior to the Effective Time, RCFC shall deposit, or shall cause to
be deposited, with such bank or trust company that is selected by RCFC and is
reasonably acceptable to Ironbound to act as exchange agent ("Exchange Agent"),
for the benefit of the holders of shares of Ironbound Common Stock, for exchange
in accordance with this Section 1.3, an estimated amount of cash sufficient to
pay the aggregate amount of cash in lieu of fractional shares to be paid
pursuant to Section 1.2, and RCFC shall reserve for issuance with its Transfer
Agent and Registrar a sufficient number of shares of RCFC Common Stock to
provide for payment of the Merger Consideration. On the Effective Time, RCFC
shall have granted the Exchange Agent the requisite power and authority to
effect for and on behalf of RCFC the issuance of the number of shares of RCFC
Common Stock issuable in the share exchange.
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(d) The Letter of Transmittal shall (i) specify that delivery shall be
effected, and risk of loss and title to the Ironbound Certificates shall pass,
only upon delivery of the Ironbound Certificates to the Exchange Agent, (ii) be
in a form and contain any other provisions as RCFC may reasonably determine and
(iii) include instructions for use in effecting the surrender of the Ironbound
Certificates in exchange for the Merger Consideration. Upon the proper
surrender of the Ironbound Certificates to the Exchange Agent, together with a
properly completed and duly executed Letter of Transmittal, the holder of such
Ironbound Certificates shall be entitled to receive in exchange therefor (m) a
certificate representing that number of whole shares of RCFC Common Stock that
such holder has the right to receive pursuant to Section 1.2 and (n) a check in
the amount equal to the cash in lieu of fractional shares, if any, that such
holder has the right to receive pursuant to Section 1.2 and any dividends or
other distributions to which such holder is entitled pursuant to this Section
1.3. Ironbound Certificates so surrendered shall forthwith be cancelled. As
soon as practicable, but no later than five (5) business days following receipt
of the properly completed Letter of Transmittal and any necessary accompanying
documentation, the Exchange Agent shall distribute RCFC Common Stock and cash as
provided herein. The Exchange Agent shall not be entitled to vote or exercise
any rights of ownership with respect to the shares of RCFC Common Stock held by
it from time to time hereunder, except that it shall receive and hold all
dividends or other distributions paid or distributed with respect to such shares
for the account of the persons entitled thereto. If there is a transfer of
ownership of any shares of Ironbound Common Stock not registered in the transfer
records of Ironbound, the Merger Consideration shall be issued to the transferee
thereof if the Ironbound Certificates representing such Ironbound Common Stock
are presented to the Exchange Agent, accompanied by all documents required, in
the reasonable judgment of RCFC and the Exchange Agent, (x) to evidence and
effect such transfer and (y) to evidence that any applicable stock transfer
taxes have been paid.
(e) No dividends or other distributions declared or made after the
Effective Time with respect to RCFC Common Stock shall be remitted to any person
entitled to receive shares of RCFC Common Stock hereunder until such person
surrenders his or her Ironbound Certificates in accordance with this Section
1.3. Upon the surrender of such person's Ironbound Certificates, such person
shall be entitled to receive any dividends or other distributions, without
interest thereon, which theretofore had become payable with respect to shares of
RCFC Common Stock represented by such person's Ironbound Certificates.
(f) From and after the Effective Time there shall be no transfers on
the stock transfer records of Ironbound of any shares of Ironbound Common Stock.
If, after the Effective Time, Ironbound Certificates are presented to RCFC, they
shall be cancelled and exchanged for the Merger Consideration deliverable in
respect thereof pursuant to this Agreement in accordance with the procedures set
forth in this Section 1.3.
(g) Any portion of the aggregate amount of cash to be paid in lieu of
fractional shares pursuant to Section 1.2, any dividends or other distributions
to be paid pursuant to this Section 1.3 or any proceeds from any investments
thereof that remains unclaimed by the
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stockholders of Ironbound for six months after the Effective Time shall be
repaid by the Exchange Agent to RCFC upon the written request of RCFC. After
such request is made, any stockholders of Ironbound who have not theretofore
complied with this Section 1.3 shall look only to RCFC for the Merger
Consideration deliverable in respect of each share of Ironbound Common Stock
such stockholder holds, as determined pursuant to Section 1.2 of this Agreement,
without any interest thereon. If outstanding Ironbound Certificates are not
surrendered prior to the date on which such payments would otherwise escheat to
or become the property of any governmental unit or agency, the unclaimed items
shall, to the extent permitted by any abandoned property, escheat or other
applicable laws, become the property of RCFC (and, to the extent not in its
possession, shall be paid over to it), free and clear of all claims or interest
of any person previously entitled to such claims. Notwithstanding the foregoing,
none of RCFC, RCFC Bank, the Exchange Agent or any other person shall be liable
to any former holder of Ironbound Common Stock for any amount delivered to a
public official pursuant to applicable abandoned property, escheat or similar
laws.
(h) RCFC and the Exchange Agent shall be entitled to rely upon
Ironbound's stock transfer books to establish the identity of those persons
entitled to receive the Merger Consideration, which books shall be conclusive
with respect thereto. In the event of a dispute with respect to ownership of
stock represented by any Ironbound Certificate, RCFC and the Exchange Agent
shall be entitled to deposit any Merger Consideration represented thereby in
escrow with an independent third party and thereafter be relieved with respect
to any claims thereto.
(i) If any Ironbound Certificate shall have been lost, stolen or
destroyed, upon the making of an affidavit of that fact by the person claiming
such Ironbound Certificate to be lost, stolen or destroyed and, if required by
the Exchange Agent, the posting by such person of a bond in such amount as the
Exchange Agent may direct as indemnity against any claim that may be made
against it with respect to such Ironbound Certificate, the Exchange Agent will
issue in exchange for such lost, stolen or destroyed Ironbound Certificate the
Merger Consideration deliverable in respect thereof pursuant to Section 1.2.
Section 1.4. Stock Options.
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(a) Options to purchase shares of Ironbound Common Stock that have
been issued by Ironbound and are outstanding at the Effective Time (each, a
"Ironbound Option") pursuant to the Ironbound 1994 Stock Option Plan, the
Ironbound Bankcorp, NJ 1998 Stock Option Plan for Employees/Active Officers of
the Company's Wholly Owned Subsidiary, Ironbound Bank and the Ironbound
Bankcorp, NJ 1998 Stock Option Plan for Non-Employee Directors (collectively,
the "Ironbound Option Plans") shall be converted automatically into the right to
receive such number of shares (rounded to the nearest whole share) of RCFC
Common Stock as is equal in value (the RCFC Common Stock value shall be
determined as of the date hereof) to the amount equal to: the product of
(A) the Exchange Ratio and (B) the number of shares of Ironbound Common Stock
issuable upon exercise of the Ironbound Options
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immediately prior to the Effective Time multiplied by the spread between the
market price (as determined as of the date hereof) and the exercise price for
each Ironbound Option; provided however, that Section 1.4 shall be further
modified if and to the extent necessary to enable the Merger to qualify for
pooling-of-interests accounting treatment. Prior to the Effective Time, RCFC
shall take, or cause to be taken, all necessary action to effect the intent of
the provisions set forth in this Section 1.4. RCFC, or at the option of RCFC,
Ironbound, shall make such payment at the Effective Time to each individual
provided that the individual delivers to RCFC his written acceptance, in a form
acceptable to RCFC, of such payment as full and complete consideration for the
cancellation of each Ironbound option held by him.
(b) Ironbound shall agree that any grants of options to purchase Ironbound
Common Stock, automatic or otherwise, made under the Ironbound Option Plans
shall be null and void ab initio, following the payment of the Stock Options in
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accordance with 1.4(a) above.
Section 1.5. Bank Merger. Concurrently with or as soon as
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practicable after the execution and delivery of this Agreement, Richmond County
Savings Bank ("RCFC Bank"), a wholly-owned subsidiary of RCFC, and Ironbound
Bank, a wholly-owned subsidiary of Ironbound, shall enter into the Plan of Bank
Merger, in the form attached hereto as Exhibit C, pursuant to which the Bank
Merger will be effected. The parties hereto intend that the Bank Merger shall
become effective on the Effective Date. The Plan of Bank Merger shall provide
that the directors of RCFC Bank as the surviving entity of the Bank Merger shall
be all of the directors of RCFC Bank serving immediately prior to the Bank
Merger and that it is the intent of RCFC Bank, subject to applicable statutes,
regulations or regulatory conditions, to operate the offices of Ironbound Bank
as a separate operational division of RCFC Bank.
Section 1.6. Directors of RCFC after Effective Time. At the
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Effective Time, the directors of RCFC shall consist of the directors of RCFC
serving immediately prior to the Effective Time.
Section 1.7. Alternative Structure. RCFC may at any time prior to
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the Effective Time change the method of effecting the Merger and the Bank Merger
or any part thereof if and to the extent it deems such change to be necessary,
appropriate or desirable; provided, however, that no such change shall (i) alter
or change the Merger Consideration issued to holders of Ironbound Common stock
as provided for in the Agreement, (ii) adversely affect the tax treatment of
Ironbound's stockholders as a result of receiving the Merger Consideration or
the Company Merger qualifying for "pooling-of-interests" accounting treatment,
(iii) materially impeded or delay consummation of the Merger, (iv) result in any
representation or warranty of any party set forth in this Agreement becoming
incorrect in any material respect, or (v) diminish the benefits (including the
establishment of the Divisional Board) to be received by the directors, officers
or employees of Ironbound as set forth in the Agreement or in any other
agreements between the parties made in connection with this Agreement.
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Section 1.8. Dissenters' Rights.
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(a) Any Dissenting Stockholder who shall be entitled to dissenters'
rights with respect to his or her Dissenters' Shares, as provided in Section
14A:11-1 of the New Jersey Statutes Annotated ("NJSA") 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 such holder's right to
dissent from the Merger under such law, and shall be entitled to receive only
the payment to the extent provided for therein with respect to such Dissenters'
Shares.
(b) Ironbound shall (i) give RCFC prompt written notice of the receipt
of any notice from a stockholder purporting to exercise any dissenters' rights,
(ii) not settle nor offer to settle any demand for payment without the prior
written consent of RCFC and (iii) not waive any failure to comply strictly with
any procedural requirements of the NJSA.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
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Section 2.1. Disclosure Letters. On or prior to the execution and
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delivery of this Agreement, Ironbound and RCFC each shall have delivered to the
other a letter (each, its "Disclosure Letter") setting forth, among other
things, facts, circumstances and events the disclosure of which is required or
appropriate in relation to any or all of their respective representations and
warranties (and making specific reference to the Section of this Agreement to
which they relate), other than Section 2.3(g) and Section 2.4(g); provided, that
(a) no such fact, circumstance or event is required to be set forth in the
Disclosure Letter as an exception to a representation or warranty if its absence
is not reasonably likely to result in the related representation or warranty
being deemed untrue or incorrect under the standards established by Section 2.2
and (b) the mere inclusion of a fact, circumstance or event in a Disclosure
Letter shall not be deemed an admission by a party that such item represents a
material exception or that such item is reasonably likely to result in a
Material Adverse Effect (as defined in Section 2.2(b)).
Section 2.2. Standards.
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(a) No representation or warranty of Ironbound or RCFC contained in
Sections 2.3 or 2.4, respectively, shall be deemed untrue or incorrect, and no
party hereto shall be deemed to have breached a representation or warranty, on
account of the existence of any fact, circumstance or event unless, as a direct
or indirect consequence of such fact, circumstance or event, individually or
taken together with all other facts, circumstances or events inconsistent with
any paragraph of Sections 2.3 or 2.4, as applicable, there is reasonably likely
to exist a Material Adverse Effect. Ironbound's representations, warranties and
covenants contained in this Agreement shall not be deemed to be untrue or
breached as a result of effects arising solely from actions taken in compliance
with a written request of RCFC.
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(b) As used in this Agreement, the term "Material Adverse Effect"
means either (i) an effect which is material and adverse to the business,
financial condition or results of operations of Ironbound or RCFC, as the
context may dictate, and its Subsidiaries taken as a whole; provided, however,
that any such effect resulting from any (A) changes in laws, rules or
regulations or generally accepted accounting principles or interpretations
thereof that apply to both RCFC and RCFC Bank and Ironbound and Ironbound Bank,
as the case may be, or (B) changes in the general level of market interest rates
shall not be considered in determining if a Material Adverse Effect has
occurred; or (ii) the failure of (x) a representation or warranty contained in
Section 2.3(a)(i) and (iv), Section 2.3(c), Section 2.3(d), 2.3(g)(iii),
2.4(a)(i) and (iv), Section 2.4(c), 2.4(g)(iii) or 2.4(l) to be true and correct
or (y) a representation or warranty contained in the last sentence of each of
Section 2.3(e) or 2.4(e), the second sentence of each of 2.3(f)(i) or 2.4(f)(i)
and the first two sentences of each of Section 2.3(aa) or 2.4(x) to be true and
correct in all material respects.
(c) For purposes of this Agreement, "knowledge" shall mean, with
respect to a party hereto, actual knowledge of the members of the Board of
Directors of that party, its counsel or any officer of that party with the title
ranking not less than senior vice president.
Section 2.3. Representations and Warranties of Ironbound. Subject
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to Sections 2.1 and 2.2, Ironbound represents and warrants to RCFC that, except
as disclosed in Ironbound's Disclosure Letter:
(a) Organization. (i) Ironbound is a corporation duly organized,
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validly existing and in good standing under the laws of the State of New Jersey
and is duly registered as a bank holding company under the Bank Holding Company
Act of 1956, as amended ("BHCA"). Ironbound Bank is a stock commercial bank duly
organized, validly existing and in good standing under the laws of the State of
New Jersey. Each Subsidiary (as defined below) of Ironbound Bank is a
corporation, limited liability company or partnership duly organized, validly
existing and in good standing under the laws of its jurisdiction of
incorporation or organization. Each of Ironbound and its Subsidiaries has all
requisite power and authority to own, lease and operate its properties and to
carry on its business as now being conducted. As used in this Agreement, unless
the context requires otherwise, the term "Subsidiary" when used with respect to
any party means any corporation or other organization, whether incorporated or
unincorporated, which is consolidated with such party for financial reporting
purposes or which is controlled, directly or indirectly, by such party.
(ii) Each of Ironbound and its Subsidiaries has the requisite
corporate power and authority, and is duly qualified and is in good standing, to
do business in each jurisdiction in which the nature of its business or the
ownership or leasing of its properties makes such qualification necessary.
(iii) Ironbound's Disclosure Letter sets forth all of Ironbound's
Subsidiaries and all entities (whether corporations, partnerships or similar
organizations),
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including the corresponding percentage ownership, in which Ironbound owns,
directly or indirectly, 5% or more of the ownership interests as of the date of
this Agreement and indicates for each of Ironbound's Subsidiaries, as of such
date, its jurisdiction of organization and the jurisdiction(s) wherein it is
qualified to do business. All such Subsidiaries and ownership interests are in
compliance with all applicable laws, rules and regulations relating to direct
investments in equity ownership interests. Ironbound owns, either directly or
indirectly, all of the outstanding capital stock of each of its Subsidiaries.
No Subsidiary of Ironbound other than Ironbound Bank is an "insured depository
institution" as defined in the Federal Deposit Insurance Act, as amended
("FDIA"), and the applicable regulations thereunder. All of the shares of
capital stock of each of the Subsidiaries held by Ironbound or any of its other
Subsidiaries are fully paid, nonassessable and not subject to any preemptive
rights and are owned by Ironbound or a Subsidiary of Ironbound free and clear of
any claims, liens, encumbrances or restrictions (other than those imposed by
applicable federal and state securities laws), and there are no agreements or
understandings with respect to the voting or disposition of any such shares.
(iv) The deposits of Ironbound Bank are insured by the Bank
Insurance Fund ("BIF") of the Federal Deposit Insurance Corporation ("FDIC") to
the extent provided in the FDIA.
(b) Capital Structure. (i) The authorized capital stock of
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Ironbound consists of 4,000,000 shares of Ironbound Common Stock, par value
$5.00 per share. As of the date of this Agreement: (A) 998,315 shares of
Ironbound Common Stock were issued and outstanding, (B) no shares of Ironbound
Common Stock were reserved for issuance, except that 117,908 shares of Ironbound
Common Stock were reserved for issuance pursuant to the Ironbound Option Plans
and (C) 45,505 shares of Ironbound Common Stock were held by Ironbound in its
treasury or by its Subsidiaries. The authorized capital stock of Ironbound Bank
consists of 4,000,000 shares of common stock, par value $5.00 per share. As of
the date of the Agreement, 100 shares of such common stock were outstanding, no
shares of preferred stock were outstanding and all outstanding shares of such
common stock were, and as of the Effective Time will be, owned by Ironbound.
All outstanding shares of capital stock of Ironbound and Ironbound Bank are duly
authorized and validly issued, fully paid and nonassessable and not subject to
any preemptive rights and, with respect to shares held by Ironbound in its
treasury or by its Subsidiaries, are free and clear of all liens, claims,
encumbrances or restrictions (other than those imposed by applicable federal and
state securities laws) and there are no agreements or understandings with
respect to the voting or disposition of any such shares. Ironbound's Disclosure
Letter sets forth a complete and accurate list of all options to purchase
Ironbound Common Stock that have been granted pursuant to the Ironbound Option
Plans and all restricted stock grants under the Ironbound RRP, including the
dates of grant, exercise prices, dates of vesting, dates of termination and
shares subject to each grant.
(ii) No bonds, debentures, notes or other indebtedness having the
right to vote on any matters on which stockholders may vote ("Voting Debt") of
Ironbound are issued or outstanding.
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(iii) As of the date of this Agreement, except for this Agreement
and the Ironbound Option Plans, neither Ironbound nor any of its Subsidiaries
has or is bound by any outstanding options, warrants, calls, rights, convertible
securities, commitments or agreements of any character obligating Ironbound or
any of its Subsidiaries to issue, deliver or sell, or cause to be issued,
delivered or sold, any additional shares of capital stock of Ironbound or any of
its Subsidiaries or obligating Ironbound or any of its Subsidiaries to grant,
extend or enter into any such option, warrant, call, right, convertible
security, commitment or agreement. As of the date hereof, there are no
outstanding contractual obligations of Ironbound or any of its Subsidiaries to
repurchase, redeem or otherwise acquire any shares of capital stock of Ironbound
or any of its Subsidiaries.
(c) Authority. Each of Ironbound and Ironbound Bank has all requisite
---------
corporate power and authority to enter into this Agreement and the Plan of Bank
Merger, respectively, and, subject to approval of this Agreement by the
requisite vote of Ironbound's stockholders and receipt of all required
regulatory or governmental approvals, as contemplated by Section 5.1(b) of this
Agreement, to consummate the transactions contemplated hereby. The execution
and delivery of this Agreement, and, subject to the approval of this Agreement
by Ironbound's stockholders, the consummation of the transactions contemplated
hereby, have been duly authorized by all necessary corporate actions on the part
of Ironbound and Ironbound Bank. This Agreement has been duly executed and
delivered by Ironbound and constitutes a valid and binding obligation of
Ironbound, enforceable in accordance with its terms subject to applicable
bankruptcy, insolvency and similar laws affecting creditors' rights and remedies
generally and subject, as to enforceability, to general principles of equity,
whether applied in a court of law or a court of equity.
(d) Stockholder Approval; Fairness Opinion. The affirmative vote of a
--------------------------------------
majority of the votes cast by holders of Ironbound Common Stock entitled to vote
on this Agreement is the only vote of the stockholders of Ironbound required for
approval of this Agreement and the consummation of the Merger and the related
transactions contemplated hereby. Ironbound has received the written opinion of
Xxxxxxxxx & Company, Inc. to the effect that, as of the date hereof, the
Exchange Ratio to be received by Ironbound's stockholders is fair, from a
financial point of view, to such stockholders.
(e) No Violations. The execution, delivery and performance of this
-------------
Agreement and Option Agreement by Ironbound do not, and the consummation of the
transactions contemplated hereby will not, constitute (i) assuming receipt of
all Requisite Regulatory Approvals (as defined below) and requisite stockholder
approvals, a breach or violation of, or a default under, any law, rule or
regulation or any judgment, decree, order, governmental permit or license, or
agreement, indenture or instrument of Ironbound or any of its Subsidiaries, or
to which Ironbound or any of its Subsidiaries (or any of their respective
properties) is subject, (ii) a breach or violation of, or a default under, the
certificate of incorporation or bylaws of Ironbound or the similar
organizational documents of any of its Subsidiaries or (iii) a breach or
violation of, or a default under (or an event which, with due
13
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 Ironbound or any of its Subsidiaries,
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 Ironbound or any of its Subsidiaries is a party, or to which any of their
respective properties or assets may be subject; and the consummation of the
transactions (including the Bank Merger) contemplated hereby (exclusive of the
effect of any changes effected pursuant to Section 1.7) will not require any
approval, consent or waiver under any such law, rule, regulation, judgment,
decree, order, governmental permit or license or the approval, consent or waiver
of any other party to any such agreement, indenture or instrument, other than
(x) the approval of the holders of a majority of the votes cast by holders of
Ironbound Common Stock entitled to vote, (y) the approval of the Banking Board
of the State of New York ("Banking Board") under Section 143-b of the Banking
Law of the State of New York ("Banking Law"), the approval of the Superintendent
of Banks of the State of New York ("Superintendent") under Section 601 of the
Banking Law and any other requirement of the Banking Board or the
Superintendent, the approval of the Board of Governors of the Federal Reserve
System ("FRB") under the BHCA, if necessary (or the receipt of a waiver of such
requirement), the approval of the Office of Thrift Supervision ("OTS") under the
Home Owners' Loan Act, as amended ("HOLA"), the approval of the New Jersey
Department of Banking (the "NJBD") and the approval of the appropriate
regulatory authority under Section 18(c) of the FDIA (collectively, the
"Requisite Regulatory Approvals"), and (z) such approvals, consents or waivers
as are required under the federal and state securities or "blue sky" laws in
connection with the transactions contemplated by this Agreement. As of the date
hereof, the executive officers of Ironbound know of no reason pertaining to
Ironbound why any of the approvals referred to in this Section 2.3(e) should not
be obtained without the imposition of any material condition or restriction
described in the proviso to Section 5.1(b).
(f) Reports. (i) As of their respective dates, none of the reports
-------
or other statements filed by Ironbound or Ironbound Bank on or subsequent to
December 31, 1997 with the FRB, the FDIC (collectively, "Ironbound's Reports"),
contained, or will contain, any untrue statement of a material fact or omitted
or will omit to state a material fact required to be stated therein or necessary
to make the statements made therein, in light of the circumstances under which
they were made, not misleading. Each of the financial statements of Ironbound
included in Ironbound's Reports complied as to form, as of their respective
dates of filing with the FDIC, in all material respects with applicable
accounting requirements and with the published rules and regulations of the FDIC
with respect thereto and have been prepared in accordance with generally
accepted accounting principles applied on a consistent basis during the periods
involved ("GAAP")(except as may be indicated in the notes thereto or, in the
case of the unaudited financial statements, as permitted by the FDIC or the
FRB). Each of the consolidated statements of condition contained or
incorporated by reference in Ironbound's Reports (including in each case any
related notes and schedules) fairly presented, or will fairly present, as the
case may be (A) the financial position of the entity or entities to which it
relates as of its date and each of the consolidated statements of operations,
consolidated statements of cash flows and
14
consolidated statements of changes in stockholders' equity, contained or
incorporated by reference in Ironbound's Reports (including in each case any
related notes and schedules), and (B) the results of operations, stockholders'
equity and cash flows, as the case may be, of the entity or entities to which it
relates for the periods set forth therein (subject, in the case of unaudited
interim statements, to normal year-end audit adjustments that are not material
in amount or effect), in each case in accordance with GAAP, except as may be
noted therein. Ironbound has made available to RCFC a true and complete copy of
each of Ironbound's Report filed with the FRB and FDIC since December 31, 1997.
(ii) Ironbound and each of its Subsidiaries have each 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
December 31, 1993 with (A) the NJBD, (B) the FDIC and (C) the FRB, and have paid
all fees and assessments due and payable in connection therewith.
(g) Absence of Certain Changes or Events. Except as disclosed in
------------------------------------
Ironbound's Reports filed on or prior to the date of this Agreement, since
December 31, 1997, (i) Ironbound and its Subsidiaries have not incurred any
liability, except in the ordinary course of their business consistent with past
practice, (ii) Ironbound and its Subsidiaries have conducted their respective
businesses only in the ordinary and usual course of such businesses and (iii)
there has not been any Material Adverse Effect with respect to Ironbound.
(h) Absence of Claims. Except as set forth in Ironbound's Disclosure
-----------------
Letter, no litigation, proceeding, controversy, claim or action before any court
or governmental agency is pending against Ironbound or any of its Subsidiaries
and, to the best of Ironbound's knowledge, no such litigation, proceeding,
controversy, claim or action has been threatened.
(i) Absence of Regulatory Actions. Neither Ironbound nor any of its
-----------------------------
Subsidiaries is a party to any cease and desist order, written agreement or
memorandum of understanding with, or any commitment letter or similar
undertaking to, or is subject to any action, proceeding, order or directive by,
or is a recipient of any extraordinary supervisory letter from any federal or
state governmental authority charged with the supervision or regulation of
depository institutions or depository institution holding companies or engaged
in the insurance of bank and/or savings and loan deposits ("Government
Regulators"), or has adopted any board resolutions at the request of any
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 action, proceeding, order, directive, written
agreement, memorandum of understanding, extraordinary supervisory letter,
commitment letter, board resolutions or similar undertaking.
(j) Taxes. All federal, state, local and foreign tax returns required
-----
to be filed by or on behalf of Ironbound or any of its Subsidiaries have been
timely filed or requests for extensions have been timely filed and any such
extension shall have been granted and not have
15
expired, and all such filed returns are complete and accurate in all material
respects. All taxes shown on such returns, all taxes required to be shown on
returns for which extensions have been granted and all other taxes required to
be paid by Ironbound or any of its Subsidiaries have been paid in full or
adequate provision has been made for any such taxes on Ironbound's balance sheet
(in accordance with GAAP). For purposes of this Section 2.3(j), the term "taxes"
shall include all income, franchise, gross receipts, real and personal property,
real property transfer and gains, wage and employment taxes. As of the date of
this Agreement, there is no audit examination, deficiency assessment, tax
investigation or refund litigation with respect to any taxes of Ironbound or any
of its Subsidiaries, and no claim has been made by any authority in a
jurisdiction where Ironbound or any of its Subsidiaries do not file tax returns
that Ironbound or any such Subsidiary is subject to taxation in that
jurisdiction. All taxes, interest, additions and penalties due with respect to
completed and settled examinations or concluded litigation relating to Ironbound
or any of its Subsidiaries have been paid in full or adequate provision has been
made for any such taxes on Ironbound's balance sheet (in accordance with GAAP).
Except as set forth in Ironbound's Disclosure Letter, Ironbound and its
Subsidiaries have not executed an extension or waiver of any statute of
limitations on the assessment or collection of any material tax due that is
currently in effect. Ironbound and each of its Subsidiaries has withheld and
paid all taxes required to have been withheld and paid in connection with
amounts paid or owing to any employee, independent contractor, creditor,
stockholder or other third party, and Ironbound and each of its Subsidiaries has
timely complied with all applicable information reporting requirements under
Part III, Subchapter A of Chapter 61 of the Code and similar applicable state
and local information reporting requirements. Neither Ironbound nor any of its
Subsidiaries (i) has made an election under Section 341(f) of the Code, (ii) has
issued or assumed any obligation under Section 279 of the Code, any high yield
discount obligation as described in Section 163(i) of the Code or any
registration-required obligation within the meaning of Section 163(f)(2) of the
Code that is not in registered form or (iii) is or has been a United States real
property holding corporation within the meaning of Section 897(c)(2) of the
Code.
(k) Agreements. (i) Except for the Option Agreement and
----------
arrangements made in the ordinary course of business, and except as set forth in
Ironbound's Disclosure Letter, Ironbound and its Subsidiaries are not bound by
any material contract (as defined in Item 601(b)(10) of Regulation S-K) to be
performed after the date hereof that has not been filed with or incorporated by
reference in Ironbound's Reports. Except as disclosed in Ironbound's Disclosure
Letter, neither Ironbound nor any of its Subsidiaries is a party to an oral or
written (A) consulting agreement (other than data processing, software
programming and licensing contracts entered into in the ordinary course of
business) not terminable on 60 days' or less notice, (B) agreement with any
executive officer or other key employee of Ironbound or any of its Subsidiaries
the benefits of which are contingent, or the terms of which are materially
altered, upon the occurrence of a transaction involving Ironbound or any of its
Subsidiaries of the nature contemplated by this Agreement or the Option
Agreement, (C) agreement with respect to any employee or director of Ironbound
or any of its Subsidiaries providing any term of employment or compensation
guarantee extending for a period longer than 60 days or for the payment of in
excess of $30,000 per annum, (D) agreement or plan, including any stock option
plan, phantom
16
stock or stock appreciation rights plan, restricted stock plan or stock purchase
plan, any of the benefits of which will be increased, or the vesting or payment
of the benefits of which will be accelerated, by the occurrence of any of the
transactions contemplated by this Agreement or the Option 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 or the Option Agreement or (E)
agreement containing covenants that limit the ability of Ironbound or any of its
Subsidiaries 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,
Ironbound (including any successor thereof) or any of its Subsidiaries may carry
on its business (other than as may be required by law or any regulatory agency).
(ii) Neither Ironbound nor any of its Subsidiaries is in default under
or in violation of any provision of any note, bond, indenture, mortgage, deed of
trust, loan agreement, lease or other agreement to which it is a party or by
which it is bound or to which any of its respective properties or assets is
subject.
(iii) Ironbound and each of its Subsidiaries owns or possesses valid
and binding licenses and other rights to use without payment all patents,
copyrights, trade secrets, trade names, servicemarks and trademarks used in its
businesses, and neither Ironbound nor any of its Subsidiaries has received any
notice of conflict with respect thereto that asserts the right of others. Each
of Ironbound and its Subsidiaries has performed all the obligations required to
be performed by it and are not in default under any contact, agreement,
arrangement or commitment relating to any of the foregoing.
(l) Labor Matters. Neither Ironbound nor any of its Subsidiaries is
-------------
or has ever been a party to, or is or has ever been bound by, any collective
bargaining agreement, contract or other agreement or understanding with a labor
union or labor organization with respect to its employees, nor is Ironbound or
any of its Subsidiaries the subject of any proceeding asserting that it has
committed an unfair labor practice or seeking to compel it or any such
Subsidiary 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 Ironbound or any of its Subsidiaries pending or, to Ironbound's
knowledge, threatened. Ironbound and its Subsidiaries are in compliance with
applicable laws regarding employment of employees and retention of independent
contractors and are in compliance with applicable employment tax laws.
(m) Employee Benefit Plans. Ironbound's Disclosure Letter contains a
----------------------
complete and accurate list of all pension, retirement, stock option, stock
purchase, stock ownership, savings, stock appreciation right, profit sharing,
deferred compensation, consulting, bonus, group insurance, severance and other
benefit plans, contracts, agreements and arrangements, including, but not
limited to, "employee benefit plans," as defined in Section 3(3) of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"), incentive and
welfare policies, contracts, plans and arrangements and all trust agreements
related thereto with respect to any present or former directors, officers or
other employees of Ironbound or any of its
17
Subsidiaries (hereinafter collectively referred to as the "Ironbound Employee
Plans"). Neither Ironbound nor any affiliate with which it would be aggregated
by reason of Section 414 of the Code, maintains, sponsors or participates in, or
has ever maintained, sponsored, or participated in, an "employee stock ownership
plan" (within the meaning of Section 407(d)(6) of ERISA and Sections 409 and
4975(e)(7) of the Code or employee pension benefit plan (other than the
[Ironbound 401(k) Plan] that is or was subject to any provision of ERISA or the
Code. All of the Ironbound Employee Plans comply in all material respects with
all applicable requirements of ERISA, the Code and other applicable laws; there
has occurred no "prohibited transaction" (as defined in Section 406 of ERISA or
Section 4975 of the Code) which is likely to result in the imposition of any
penalties or taxes under Section 502(i) of ERISA or Section 4975 of the Code
upon Ironbound or any of its Subsidiaries. Neither Ironbound nor any of its
Subsidiaries has provided, or is required to provide, security to any Ironbound
Pension Plan or to any single-employer plan of an ERISA Affiliate pursuant to
Section 401(a)(29) of the Code. Neither Ironbound, its Subsidiaries, nor any
ERISA Affiliate has contributed to any "multiemployer plan," as defined in
Section 3(37) of ERISA, on or after September 26, 1980. Each Ironbound Employee
Plan that is an "employee pension benefit plan" (as defined in Section 3(2) of
ERISA) and which is intended to be qualified under Section 401(a) of the Code (a
"Ironbound Qualified Plan") has received a favorable determination letter from
the Internal Revenue Service ("IRS"), and Ironbound and its Subsidiaries are not
aware of any circumstances likely to result in revocation of any such favorable
determination letter. There is no pending or, to Ironbound's knowledge,
threatened litigation, administrative action or proceeding relating to any
Ironbound Employee Plan. There has been no announcement or commitment by
Ironbound or any of its Subsidiaries to create an additional Ironbound Employee
Plan, or to amend any Ironbound Employee Plan, except for amendments required by
applicable law which do not materially increase the cost of such Ironbound
Employee Plan; and, except as specifically identified in Ironbound's Disclosure
Letter, Ironbound and its Subsidiaries do not have any obligations for post-
retirement or post-employment benefits under any Ironbound Employee Plan that
cannot be amended or terminated upon 60 days' notice or less without incurring
any liability thereunder, except for coverage required by Part 6 of Title I of
ERISA or Section 4980B of the Code, or similar state laws, the cost of which is
borne by the insured individuals. With respect to Ironbound or any of its
Subsidiaries, for the Employee Plans listed in Ironbound's Disclosure Letter,
the execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby will not result in any payment or series of
payments by Ironbound or any of its Subsidiaries to any person which is an
"excess parachute payment" (as defined in Section 280G of the Code), increase or
secure (by way of a trust or other vehicle) any benefits payable under any
Ironbound Employee Plan or accelerate the time of payment or vesting of any such
benefit. With respect to each Ironbound Employee Plan, Ironbound has supplied to
RCFC a true and correct copy of (A) the annual report on the applicable form of
the Form 5500 series filed with the IRS for the most recent three plan years, if
required to be filed, (B) such Ironbound Employee Plan, including amendments
thereto, (C) each trust agreement, insurance contract or other funding
arrangement relating to such Ironbound Employee Plan, including amendments
thereto, (D) the most recent summary plan description and summary of material
modifications thereto for such Ironbound Employee Plan, if the Ironbound
Employee Plan is subject to Title I
18
of ERISA, and (E) the most recent determination letter issued by the IRS if such
Employee Plan is a Qualified Plan.
(n) Title to Assets. Ironbound and each of its Subsidiaries has good
---------------
and marketable title to its properties and assets (including any intellectual
property asset such as any trademark, service xxxx, tradename or copyright) and
property acquired in a judicial foreclosure proceeding or by way of a deed in
lieu of foreclosure or similar transfer, other than property as to which it is
lessee, in which case the related lease is valid and in full force and effect.
Each lease pursuant to which Ironbound or any of its Subsidiaries is lessor is
valid and in full force and effect and no lessee under any such lease is in
default or in violation of any provisions of any such lease. All material
tangible properties of Ironbound and each of its Subsidiaries are in a good
state of maintenance and repair, conform with all applicable ordinances,
regulations and zoning laws and are considered by Ironbound to be adequate for
the current business of Ironbound and its Subsidiaries.
(o) Compliance with Laws. Ironbound and each of its Subsidiaries has
--------------------
all permits, licenses, certificates of authority, orders and approvals of, and
has made all filings, applications and registrations with, all federal, state,
local and foreign governmental or regulatory bodies that are required in order
to permit it to carry on its business as it is presently conducted; all such
permits, licenses, certificates of authority, orders and approvals are in full
force and effect, and, to the best knowledge of Ironbound, no suspension or
cancellation of any of them is threatened. Since the date of its incorporation,
the corporate affairs of Ironbound have not been conducted in violation of any
law, ordinance, regulation, order, writ, rule, decree or approval of any federal
or state regulatory authority having jurisdiction over insured depositary
institutions or their holding companies, the Securities and Exchange Commission
(the "SEC"), the NASD or any other SRO (each, a "Governmental Entity"). The
businesses of Ironbound and its Subsidiaries are not being conducted in
violation of any law, ordinance, regulation, order, writ, rule, decree or
condition to approval of any Governmental Entity.
(p) Fees. Other than financial advisory services performed for
----
Ironbound by Xxxxxxxxx & Company, Inc. pursuant to an agreement dated June 19,
1998, a true and complete copy of which has been previously delivered to RCFC,
neither Ironbound nor any of its Subsidiaries, nor any of their 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 Ironbound or any of its Subsidiaries in connection with this
Agreement or the transactions contemplated hereby.
(q) Environmental Matters. (i) With respect to Ironbound and each
---------------------
of its Subsidiaries:
(A) Each of Ironbound and its Subsidiaries, the Participation
Facilities (as defined herein), and, to Ironbound's knowledge, the Loan
Properties (as defined herein) are,
19
and have been, in substantial compliance with, and are not liable under, all
Environmental Laws (as defined herein);
(B) There is no suit, claim, action, demand, executive or
administrative order, directive, investigation or proceeding pending or, to
Ironbound's knowledge, threatened, before any court, governmental agency or
board or other forum against it or any of its Subsidiaries or any Participation
Facility (x) for alleged noncompliance (including by any predecessor) with, or
liability under, any Environmental Law or (y) relating to the presence of or
release (as defined herein) into the environment of any Hazardous Material (as
defined herein), whether or not occurring at or on a site owned, leased or
operated by it or any of its Subsidiaries or any Participation Facility;
(C) To Ironbound's knowledge, there is no suit, claim, action, demand,
executive or administrative order, directive, investigation or proceeding
pending or threatened before any court, governmental agency or board or other
forum relating to or against any Loan Property (or Ironbound or any of its
Subsidiaries in respect of such Loan Property) (x) relating to alleged
noncompliance (including by any predecessor) with, or liability under, any
Environmental Law or (y) relating to the presence of or release into the
environment of any Hazardous Material, whether or not occurring at or on a site
owned, leased or operated by a Loan Property;
(D) To Ironbound's knowledge, the properties currently owned or
operated by Ironbound or any of its Subsidiaries (including, without limitation,
soil, groundwater or surface water on, under or adjacent to the properties, and
buildings thereon) are not contaminated with and do not otherwise contain any
Hazardous Material other than as permitted under applicable Environmental Law;
(E) Neither Ironbound nor any of its Subsidiaries has received any
notice, demand letter, executive or administrative order, directive or request
for information from any federal, state, local or foreign governmental entity or
any third party indicating that it may be in violation of, or liable under, any
Environmental Law;
(F) To Ironbound's knowledge, there are no underground storage tanks
on, in or under any properties owned or operated by Ironbound or any of its
Subsidiaries or any Participation Facility, and no underground storage tanks
have been closed or removed from any properties owned or operated by Ironbound
or any of its Subsidiaries or any Participation Facility; and
(G) To Ironbound's knowledge, during the period of (l) Ironbound's or
any of its Subsidiaries' ownership or operation of any of their respective
current properties or (m) Ironbound's or any of its Subsidiaries' participation
in the management of any Participation Facility, there has been no contamination
by or release of Hazardous Materials in, on, under or affecting such properties.
To Ironbound's knowledge, prior to the period of (x) Ironbound's or
20
any of its Subsidiaries' ownership or operation of any of their respective
current properties or (y) Ironbound's or any of its Subsidiaries' participation
in the management of any Participation Facility, there was no contamination by
or release of Hazardous Material in, on, under or affecting such properties.
(ii) The following definitions apply for purposes of this Section
2.3(r) and Section 2.4(r): (w) "Loan Property" means any property in which the
applicable party (or a Subsidiary of it) holds a security interest, and, where
required by the context, includes the owner or operator of such property, but
only with respect to such property; (x) "Participation Facility" means any
facility in which the applicable party (or a Subsidiary of it) participates in
the management (including all property held as trustee or in any other fiduciary
capacity) and, where required by the context, includes the owner or operator of
such property, but only with respect to such property; (y) "Environmental Law"
means (i) any federal, state or local law, statute, ordinance, rule, regulation,
code, license, permit, authorization, approval, consent, legal doctrine, order,
directive, executive or administrative order, judgment, decree, injunction,
legal requirement or agreement with any governmental entity relating to (A) the
protection, preservation or restoration of the environment (which includes,
without limitation, air, water vapor, surface water, groundwater, drinking water
supply, structures, soil, surface land, subsurface land, plant and animal life
or any other natural resource), or to human health or safety as it relates to
Hazardous Materials, or (B) the exposure to, or the use, storage, recycling,
treatment, generation, transportation, processing, handling, labeling,
production, release or disposal of, Hazardous Materials, in each case as amended
and as now in effect. The term Environmental Law includes all federal, state
and local laws, rules, regulations or requirements relating to the protection of
the environment or health and safety, including, without limitation, (i) the
Federal Comprehensive Environmental Response, Compensation and Liability Act of
1980, the Superfund Amendments and Reauthorization Act of 1986, the Federal
Water Pollution Control Act of 1972, the Federal Clean Air Act, the Federal
Clean Water Act, the Federal Resource Conservation and Recovery Act of 1976
(including, but not limited to, the Hazardous and Solid Waste Amendments thereto
and Subtitle I relating to underground storage tanks), the Federal Solid Waste
Disposal and the Federal Toxic Substances Control Act, the Federal Insecticide,
Fungicide and Rodenticide Act, the Federal Occupational Safety and Health Act of
1970 as it relates to Hazardous Materials, the Federal Hazardous Substances
Transportation Act, the Emergency Planning and Community Right-To-Know Act, the
Safe Drinking Water Act, the Endangered Species Act, the National Environmental
Policy Act, the Rivers and Harbors Appropriation Act or any so-called
"Superfund" or "Superlien" law, each as amended and as now or hereafter in
effect, and (ii) any common law or equitable doctrine (including, without
limitation, injunctive relief and tort doctrines such as negligence, nuisance,
trespass and strict liability) that may impose liability or obligations for
injuries or damages due to, or threatened as a result of, the presence of or
exposure to any Hazardous Material; and (z) "Hazardous Material" means any
substance (whether solid, liquid or gas) which is or could be detrimental to
human health or safety or to the environment, currently or hereafter listed,
defined, designated or classified as hazardous, toxic, radioactive or dangerous,
or otherwise regulated, under any Environmental Law, whether by type or by
quantity, including any substance containing any
21
such substance as a component. Hazardous Material includes, without limitation,
any toxic waste, pollutant, contaminant, hazardous substance, toxic substance,
hazardous waste, special waste, industrial substance, oil or petroleum, or any
derivative or by-product thereof, radon, radioactive material, asbestos,
asbestos-containing material, urea formaldehyde foam insulation, lead and
polychlorinated biphenyl.
(r) Loan Portfolio; Allowance; Asset Quality. (i) With respect to
----------------------------------------
each loan owned by Ironbound or its Subsidiaries in whole or in part (each, a
"Loan"), to the best knowledge of Ironbound:
(A) the note and the related security documents are each legal, valid
and binding obligations of the maker or obligor thereof, enforceable against
such maker or obligor in accordance with their terms;
(B) neither Ironbound nor any of its Subsidiaries, nor any prior
holder of a Loan, has modified the note or any of the related security documents
in any material respect or satisfied, canceled or subordinated the note or any
of the related security documents except as otherwise disclosed by documents in
the applicable Loan file;
(C) Ironbound or a Subsidiary is the sole holder of legal and
beneficial title to each Loan (or Ironbound's applicable participation interest,
as applicable), except as otherwise referenced on the books and records of
Ironbound;
(D) the note and the related security documents, copies of which are
included in the Loan files, are true and correct copies of the documents they
purport to be and have not been suspended, amended, modified, canceled or
otherwise changed except as otherwise disclosed by documents in the applicable
Loan file;
(E) there is no pending or threatened condemnation proceeding or
similar proceeding affecting the property that serves as security for a Loan,
except as otherwise referenced on the books and records of Ironbound;
(F) there is no litigation or proceeding pending or threatened
relating to the property that serves as security for a Loan that would have a
Material Adverse Effect upon the related Loan; and
(G) with respect to a Loan held in the form of a participation, the
participation documentation is legal, valid, binding and enforceable.
(ii) The allowance for possible losses reflected in Ironbound's
audited statement of condition at December 31, 1997 was, and the allowance for
possible losses shown on the balance sheets in Ironbound's Reports for periods
ending after December 31, 1997 will be,
22
adequate, as of the dates thereof, under generally accepted accounting
principles applicable to stock banks consistently applied.
(iii) Ironbound's Disclosure Letter sets forth by category the
amounts of all loans, leases, advances, credit enhancements, other extensions of
credit, commitments and interest-bearing assets of Ironbound and its
Subsidiaries that have been classified (whether regulatory or internal) as
"Special Mention," "Substandard," "Doubtful," "Loss" or words of similar import,
and Ironbound and its Subsidiaries shall promptly after the end of any month
inform RCFC of any such classification arrived at any time after the date
hereof. The other real estate owned ("OREO") included in any non-performing
assets of Ironbound or any of its Subsidiaries is carried net of reserves at the
lower of cost or fair value, less estimated selling costs, based on current
independent appraisals or evaluations or current management appraisals or
evaluations; provided, however, that "current" shall mean within the past 12
months.
(s) Deposits. None of the deposits of Ironbound or any of its
--------
Subsidiaries is a "brokered" deposit.
(t) Accounting Matters. Neither Ironbound nor any of its Subsidiaries
------------------
or, to the best of its knowledge, any of its other affiliates has, through the
date hereof, taken or agreed to take any action that would prevent RCFC from
accounting for the business combination to be effected by the Merger as a
pooling-of-interests, and Ironbound has no knowledge of any fact or circumstance
that would prevent such accounting treatment.
(u) Antitakeover Provisions Inapplicable. Ironbound and its
------------------------------------
Subsidiaries have taken all actions required to exempt Ironbound, the Agreement,
the Merger and the Option Agreement from any provisions of an antitakeover
nature in their organization certificates and bylaws, and the provisions of any
federal or state "antitakeover," "fair price," "moratorium," "control share
acquisition" or similar laws or regulations.
(v) Material Interests of Certain Persons. Except as disclosed in
-------------------------------------
Ironbound's Proxy Statement for its 1998 Annual Meeting of Stockholders or in
Ironbound's Disclosure Letter, no officer or director of Ironbound, or any
"associate" (as such term is defined in Rule 12b-2 under the Securities Exchange
Act of 1934, as amended ("Exchange Act")) of any such officer or director, has
any material interest in any material contract or property (real or personal),
tangible or intangible, used in or pertaining to the business of Ironbound or
any of its Subsidiaries. No such interest has been created or modified since
the date of the last regulatory examination of Ironbound or its Subsidiaries.
(w) Insurance. Ironbound and its Subsidiaries are presently insured,
---------
and since December 31, 1995, have been insured, for reasonable amounts with
financially sound and reputable insurance companies, against such risks as
companies engaged in a similar business would, in accordance with good business
practice, customarily be insured. All of the insurance policies and bonds
maintained by Ironbound and its Subsidiaries are in full force and effect,
23
Ironbound and its Subsidiaries are not in default thereunder and all material
claims thereunder have been filed in due and timely fashion.
(x) Investment Securities; Borrowings. (i) None of the investments
---------------------------------
reflected in the consolidated balance sheet of Ironbound for the year ended
December 31, 1997, and none of the investment securities held by it or any of
its Subsidiaries since December 31, 1997, is subject to any restriction
(contractual or statutory) that would materially impair the ability of the
entity holding such investment freely to dispose of such investment at any time.
(ii) Except as set forth in Ironbound's Disclosure Letter, neither
Ironbound nor any Subsidiary is a party to or has agreed to enter into an
exchange-traded or over-the-counter equity, interest rate, foreign exchange or
other swap, forward, future, option, cap, floor or collar or any other contract
that is a derivative contract (including various combinations thereof) (each, a
"Derivatives Contract") or owns securities that (A) are referred to generically
as "structured notes," "high risk mortgage derivatives," "capped floating rate
notes" or "capped floating rate mortgage derivatives" or (B) are likely to have
changes in value as a result of interest or exchange rate changes that
significantly exceed normal changes in value attributable to interest or
exchange rate changes.
(iii) Set forth in Ironbound's Disclosure Letter is a true
and complete list of Ironbound's borrowed funds (excluding deposit accounts) as
of the date hereof.
(y) Indemnification. Except as provided in Ironbound's Disclosure
---------------
Letter, applicable New Jersey law, Ironbound's Employment Agreements or the
organization certificate or bylaws of Ironbound and its Subsidiaries, neither
Ironbound nor any Subsidiary is a party to any indemnification agreement with
any of its present or future directors, officers, employees, agents or other
persons who serve or served in any other capacity with any other enterprise at
the request of Ironbound (a "Covered Person"), and, except as set forth in
Ironbound's Disclosure Letter, to the best knowledge of Ironbound, there are no
claims for which any Covered Person would be entitled to indemnification under
the organization certificate or bylaws of Ironbound or any of its Subsidiaries,
under any applicable law or regulation or under any indemnification agreement.
(z) Books and Records. The books and records of Ironbound and its
-----------------
Subsidiaries on a consolidated basis 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.
(aa) Corporate Documents. Ironbound has delivered to RCFC true and
-------------------
complete copies of its certificate of incorporation and bylaws and of Ironbound
Bank's organization certificate and bylaws. The minute books of Ironbound and
Ironbound Bank constitute a complete and correct record of all actions taken by
their respective boards of directors (and each committee thereof) and their
stockholders. The minute books of each of
24
Ironbound's Subsidiaries constitutes a complete and correct record of all
actions taken by the respective boards of directors (and each committee thereof)
and the stockholders of each such Subsidiary.
(bb) Tax Treatment of the Merger. As of the date hereof, Ironbound
---------------------------
has no knowledge of any fact or circumstance that would prevent the transactions
contemplated by this Agreement from qualifying as a tax-free reorganization
under the Code.
(cc) Beneficial Ownership of RCFC Common Stock. As of the date
-----------------------------------------
hereof, Ironbound beneficially owns no shares of RCFC Common Stock and does not
have any option, warrant or right of any kind to acquire the beneficial
ownership of any shares of RCFC Common Stock.
(dd) Year 2000 Matters. Ironbound has completed a review of its
-----------------
computer systems to identify systems that could be affected by the "Year 2000"
issue and reasonably believes it has identified all such Year 2000 problems.
Ironbound's management has developed and commenced implementation of a plan to
respond to this issue which is designed to complete any required initial changes
to its computer systems and to complete testing of those changes by December 31,
1998. Between the date of this Agreement and the Effective Time, Ironbound
shall use commercially practicable efforts to implement and/or continue to
undertake such plan. Year 2000 issues have not had, and are not reasonably
expected to have, a Material Adverse Effect on Ironbound or its Subsidiaries.
(ee) Registration Statement. The information regarding Ironbound to
----------------------
be supplied by Ironbound for inclusion in (i) the Registration Statement on Form
S-4 and/or such other form(s) as may be appropriate to be filed under the
Securities Act of 1933, as amended ("Securities Act"), with the SEC by RCFC for
the purpose of, among other things, registering the RCFC Common Stock to be
issued to Ironbound's stockholders in the Merger (as amended or supplemented
from time to time, the "Registration Statement"), or (ii) the proxy statement to
be distributed by Ironbound in connection with Ironbound's meeting of
stockholders to vote upon this Agreement (as amended or supplemented from time
to time, the "Proxy Statement," and together with the prospectus included in the
Registration Statement, as amended or supplemented from time to time, the "Proxy
Statement-Prospectus") will not, at the time such Registration Statement becomes
effective, 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.
Section 2.4. Representations and Warranties of RCFC. Subject to
--------------------------------------
Sections 2.1 and 2.2, RCFC represents and warrants to Ironbound that, except as
specifically disclosed in RCFC's Disclosure Letter:
(a) Organization. (i) RCFC is a corporation duly organized,
------------
validly existing and in good standing under the laws of the State of Delaware
and is duly registered as a
25
savings and loan holding company under HOLA. RCFC Bank is a stock savings bank
duly organized, validly existing and in good standing under the laws of the
State of New York. Each Subsidiary of RCFC Bank is a corporation, limited
liability company or partnership duly organized, validly existing and in good
standing under the laws of its jurisdiction of incorporation or organization.
Each of RCFC and its Subsidiaries has all requisite power and authority to own,
lease and operate its properties and to carry on its business as now being
conducted.
(ii) RCFC and each of its Subsidiaries has the requisite corporate
power and authority, and is duly qualified and is in good standing, to do
business in each jurisdiction in which the nature of its business or the
ownership or leasing of its properties makes such qualification necessary.
(iii) RCFC's Disclosure Letter sets forth all of RCFC's
Subsidiaries and all entities (whether corporations, partnerships or similar
organizations), including the corresponding percentage ownership, in which RCFC
owns, directly or indirectly, 5% or more of the ownership interests as of the
date of this Agreement and indicates for each Subsidiary, as of the such date,
its jurisdiction of organization and the jurisdiction(s) wherein it is qualified
to do business. All such Subsidiaries and ownership interests are in compliance
with all applicable laws, rules and regulations relating to direct investments
in equity ownership interests. RCFC owns, either directly or indirectly, all of
the outstanding capital stock of each of its Subsidiaries. No Subsidiary of RCFC
other than RCFC Bank is an "insured depository institution" as defined in the
FDIA and the applicable regulations thereunder. All of the shares of capital
stock of each of the Subsidiaries held by RCFC or any of its other Subsidiaries
are fully paid, nonassessable and not subject to any preemptive rights and are
owned by RCFC or a Subsidiary of RCFC free and clear of any claims, liens,
encumbrances or restrictions (other than those imposed by applicable federal and
state securities laws) and there are no agreements or understandings with
respect to the voting or disposition of any such shares.
(iv) The deposits of RCFC Bank are insured by the BIF and the Savings
Association Insurance Fund of the FDIC to the extent provided in the FDIA.
(b) Capital Structure. (i) The authorized capital stock of RCFC
-----------------
consists of 75,000,000 shares of RCFC Common Stock and 5,000,000 shares of
preferred stock, par value $.01 per share ("RCFC Preferred Stock"). As of the
date of this Agreement, (A) 26,423,600 shares of RCFC Common Stock were issued
and outstanding, (B) no shares of RCFC Preferred Stock were outstanding, (C) no
shares of RCFC Common Stock were reserved for issuance, except that 2,642,360
shares of RCFC Common Stock were reserved for issuance pursuant to the RCFC 1998
Stock-Based Incentive Plan and (D) no shares of RCFC Common Stock were held by
RCFC in its treasury or by its Subsidiaries. The authorized capital stock of
RCFC Bank consists of 75,000,000 shares of common stock, par value $.01 per
share, and 5,000,000 shares of preferred stock, par value $.01 per share. As of
the date of this Agreement, 1,000 shares of such common stock were outstanding,
no shares of such preferred stock were outstanding and all
26
outstanding shares of such common stock were, and as of the Effective Time will
be, owned by RCFC. All outstanding shares of capital stock of RCFC and RCFC Bank
are validly issued, fully paid and nonassessable and not subject to any
preemptive rights and, with respect to shares held by RCFC in its treasury or by
its Subsidiaries, are free and clear of all liens, encumbrances or restrictions
(other than those imposed by applicable federal or state securities laws) and
there are no agreements or understandings with respect to the voting or
disposition of any such shares.
(ii) No Voting Debt of RCFC is issued or outstanding.
(iii) As of the date of this Agreement, except for this
Agreement and the Option Agreement and as set forth in RCFC's Disclosure Letter,
neither RCFC nor any of its Subsidiaries has or is bound by any outstanding
options, warrants, calls, rights, convertible securities, commitments or
agreements of any character obligating RCFC or any of its Subsidiaries to issue,
deliver or sell, or cause to be issued, delivered or sold, any additional shares
of capital stock of RCFC or any of its Subsidiaries or obligating RCFC or any of
its Subsidiaries to grant, extend or enter into any such option, warrant, call,
right, convertible security, commitment or agreement. As of the date hereof,
there are no outstanding contractual obligations of RCFC or any of its
Subsidiaries to repurchase, redeem or otherwise acquire any shares of capital
stock of RCFC or any of its Subsidiaries.
(c) Authority. Each of RCFC and RCFC Bank has the requisite
---------
corporate power and authority to enter into this Agreement and the Plan of Bank
Merger, respectively, and subject to the receipt of all required regulatory or
governmental approvals, as contemplated by Section 5.1(b) of this Agreement, to
consummate the transactions contemplated hereby. The execution and delivery of
this Agreement, and, subject to the approval of this Agreement by RCFC's
stockholders, the consummation of the transactions contemplated hereby, have
been duly authorized by all necessary corporate actions on the part of RCFC and
RCFC Bank. This Agreement has been duly executed and delivered by RCFC and
constitutes a valid and binding obligation of RCFC, enforceable in accordance
with its terms subject to applicable bankruptcy, insolvency and similar laws
affecting creditors' rights and remedies generally and subject, as to
enforceability, to general principles of equity, whether applied in a court of
law or a court of equity.
(d) Fairness Opinion. RCFC has received the opinion of Sandler
----------------
X'Xxxxx & Partner, L.P., to the effect that, as of the date hereof, the Exchange
Ratio is fair, from a financial point of view, to RCFC's stockholders.
(e) No Violations. The execution, delivery and performance of this
-------------
Agreement by RCFC does not, and the consummation of the transactions
contemplated hereby will not, constitute (i) assuming receipt of all Requisite
Regulatory Approvals and requisite stockholder approvals, a breach or violation
of, or a default under, any law, rule or regulation or any judgment, decree,
order, governmental permit or license, or agreement, indenture or instrument of
RCFC or any of its Subsidiaries, or to which RCFC or any of its Subsidiaries (or
any of their respective properties) is subject, (ii) a breach or violation of,
or a default under, the
27
certificate of incorporation or bylaws of RCFC or the similar organizational
documents of any of its Subsidiaries or (iii) a breach or violation of, or 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 RCFC or any of its Subsidiaries, 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 RCFC or any of its
Subsidiaries is a party, or to which any of their respective properties or
assets may be subject; and the consummation of the transactions (including the
Bank Merger) contemplated hereby (exclusive of the effect of any changes
effected pursuant to Section 1.7) will not require any approval, consent or
waiver under any such law, rule, regulation, judgment, decree, order,
governmental permit or license or the approval, consent or waiver of any other
party to any such agreement, indenture or instrument, other than (x) the
approval of the holders of a majority of the outstanding shares of RCFC Common
Stock, (y) the Requisite Regulatory Approvals and (z) such approvals, consents
or waivers as are required under the federal and state securities or "blue sky"
laws in connection with the transactions contemplated by this Agreement. As of
the date hereof, the executive officers of RCFC know of no reason pertaining to
RCFC why any of the approvals referred to in this Section 2.4(e) should not be
obtained without the imposition of any material condition or restriction
described in the proviso to Section 5.1(b).
(f) Reports. (i) As of their respective dates, none of the reports
-------
or other statements filed by RCFC or RCFC Bank on or subsequent to December 31,
1997, with the SEC, the Superintendent, the FDIC and the OTS (collectively,
"RCFC's Reports"), contained, or will contain, any untrue statement of a
material fact or omitted or will omit to state a material fact required to be
stated therein or necessary to make the statements made therein, in light of the
circumstances under which they were made, not misleading. Each of the financial
statements of RCFC included in RCFC's Report complied as to form, as of their
respective dates of filing with the SEC, in all material respects with
applicable accounting requirements and with the published rules and regulations
of the SEC with respect thereto and have been prepared in accordance with GAAP
(except as may be indicated in the notes thereto or, in the case of unaudited
financial statements, as permitted by Form 10-Q of the SEC). Each of the
consolidated statements of condition contained or incorporated by reference in
RCFC's Reports (including in each case any related notes and schedules) fairly
presented, or will fairly present, as the case may be, (A) the financial
position of the entity or entities to which it relates as of its date and each
of the statements of operations, consolidated statements of cash flows and
consolidated statements of changes in stockholders' equity, contained or
incorporated by reference in RCFC's Reports (including in each case any related
notes and schedules), and (B) the results of operations, stockholders' equity
and cash flows, as the case may be, of the entity or entities to which it
relates for the periods set forth therein (subject, in the case of unaudited
interim statements, to normal year-end audit adjustments that are not material
in amount or effect), in each case in accordance with GAAP, except as may be
noted therein. RCFC has made available to Ironbound a true and complete copy of
each of RCFC's Report filed with the SEC since December 31, 1997.
28
(ii) RCFC and each of its Subsidiaries have each 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
December 31, 1993 with (A) the OTS, (B) the SEC, (C) the NASD and (D) any other
SRO, and have paid all fees and assessments due and payable in connection
therewith.
(g) Absence of Certain Changes or Events. Except as disclosed in
------------------------------------
RCFC's Reports filed on or prior to the date of this Agreement, since December
31, 1997, (i) RCFC and its Subsidiaries have not incurred any liability, except
in the ordinary course of their business consistent with past practice, (ii)
RCFC and its Subsidiaries have conducted their respective businesses only in the
ordinary and usual course of such businesses and (iii) there has not been any
Material Adverse Effect with respect to RCFC.
(h) Absence of Claims. Except as set forth in RCFC's Disclosure
-----------------
Letter, no litigation, proceeding, controversy, claim or action before any court
or governmental agency is pending against RCFC or any of its Subsidiaries, and,
to the best of RCFC's knowledge, no such litigation, proceeding, controversy,
claim or action has been threatened.
(i) Absence of Regulatory Actions. Neither RCFC nor any of its
-----------------------------
Subsidiaries is a party to any cease and desist order, written agreement or
memorandum of understanding with, or any commitment letter or similar written
undertaking to, or is subject to any action, proceeding, order or directive by,
or is a recipient of any extraordinary supervisory letter from any Government
Regulator, or has adopted any board resolutions at the request of any Government
Regulator, nor has it been advised by any Governmental Regulator that it is
contemplating issuing or requesting (or is considering the appropriateness of
issuing or requesting) any such action, proceeding, order, directive, written
agreement, memorandum of understanding, extraordinary supervisory letter,
commitment letter, board resolutions or similar written undertaking.
(j) Taxes. All federal, state, local and foreign tax returns required
-----
to be filed by or on behalf of RCFC or any of its Subsidiaries 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 returns are
complete and accurate in all material respects. All taxes shown on such
returns, all taxes required to be shown on returns for which extensions have
been granted and all other taxes required to be paid by RCFC or any of its
Subsidiaries have been paid in full or adequate provision has been made for any
such taxes on RCFC's balance sheet (in accordance with GAAP). For purposes of
this Section 2.4(j), the term "taxes" shall include all income, franchise, gross
receipts, real and personal property, real property transfer and gains, wage and
employment taxes. As of the date of this Agreement, there is no audit
examination, deficiency assessment, tax investigation or refund litigation with
respect to any taxes of RCFC or any of its Subsidiaries, and no claim has been
made by any authority in a jurisdiction where RCFC or any of its Subsidiaries do
not file tax returns that RCFC or any such Subsidiary is subject to taxation in
that jurisdiction. All taxes, interest, additions and penalties due with
29
respect to completed and settled examinations or concluded litigation relating
to RCFC or any of its Subsidiaries have been paid in full or adequate provision
has been made for any such taxes on RCFC's balance sheet (in accordance with
GAAP). Except as set forth in RCFC's Disclosure Letter, RCFC and its
Subsidiaries have not executed an extension or waiver of any statute of
limitations on the assessment or collection of any material tax due that is
currently in effect. RCFC and each of its Subsidiaries has withheld and paid all
taxes required to have been withheld and paid in connection with amounts paid or
owing to any employee, independent contractor, creditor, stockholder or other
third party, and RCFC and each of its Subsidiaries has timely complied with all
applicable information reporting requirements under Part III, Subchapter A of
Chapter 61 of the Code and similar applicable state and local information
reporting requirements. Neither RCFC nor any of its Subsidiaries (i) has made an
election under Section 341(f) of the Code, (ii) has issued or assumed any
obligation under Section 279 of the Code, any high yield discount obligation as
described in Section 163(i) of the Code or any registration-required obligation
within the meaning of Section 163(f)(2) of the Code that is not in registered
form or (iii) is or has been a United States real property holding corporation
within the meaning of Section 897(c)(2) of the Code.
(k) Agreements. (i) Except for arrangements made in the ordinary
----------
course of business, and except as set forth in RCFC's Disclosure Letter, RCFC
and its Subsidiaries are not bound by any material contract (as defined in Item
601(b)(10) of Regulation S-K) to be performed after the date hereof that has not
been filed with or incorporated by reference in RCFC's Report. Except as
disclosed in RCFC's Report filed prior to the date of this Agreement, neither
RCFC nor any of its Subsidiaries is a party to an oral or written (A) consulting
agreement (other than data processing, software programming and licensing
contracts entered into in the ordinary course of business) not terminable on 60
days' or less notice, (B) agreement with any executive officer or other key
employee of RCFC or any of its Subsidiaries the benefits of which are
contingent, or the terms of which are materially altered, upon the occurrence of
a transaction involving RCFC or any of its Subsidiaries of the nature
contemplated by this Agreement, (C) agreement with respect to any employee or
director of RCFC or any of its Subsidiaries providing any term of employment or
compensation guarantee extending for a period longer than 60 days or for the
payment of in excess of $100,000 per annum, (D) agreement or plan, including any
stock option plan, phantom stock or stock appreciation rights plan, restricted
stock plan or stock purchase plan, any of the benefits of which will be
increased, or the vesting or payment 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 or (E) agreement
containing covenants that limit the ability of RCFC or any of its Subsidiaries
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, RCFC (including
any successor thereof) or any of its Subsidiaries may carry on its business
(other than as may be required by law or any regulatory agency).
30
(ii) Except as set forth in RCFC's Disclosure Letter, neither RCFC nor
any of its Subsidiaries is in default under or in violation of any provision of
any note, bond, indenture, mortgage, deed of trust, loan agreement, lease or
other agreement to which it is a party or by which it is bound or to which any
of its respective properties or assets is subject.
(iii) RCFC and each of its Subsidiaries owns or possesses valid and
binding licenses and other rights to use without payment all patents,
copyrights, trade secrets, trade names, servicemarks and trademarks used in its
businesses, and neither RCFC nor any of its Subsidiaries has received any notice
of conflict with respect thereto that asserts the right of others. Each of RCFC
and its Subsidiaries has performed all the obligations required to be performed
by it and are not in default under any contract, agreement, arrangement or
commitment relating to any of the foregoing.
(l) RCFC Common Stock. The shares of RCFC Common Stock to be issued
-----------------
pursuant to this Agreement, when issued in accordance with the terms of this
Agreement, will be duly authorized, validly issued, fully paid and non-
assessable and subject to no preemptive rights.
(m) Labor Matters. Neither RCFC nor any of its Subsidiaries is or has
-------------
ever been a party to, or is or has ever been bound by, any collective bargaining
agreement, contract or other agreement or understanding with a labor union or
labor organization with respect to its employees, nor is RCFC or any of its
Subsidiaries the subject of any proceeding asserting that it has committed an
unfair labor practice or seeking to compel RCFC or any of its Subsidiaries 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
RCFC or any of its Subsidiaries pending or, to RCFC's knowledge, threatened.
RCFC and its Subsidiaries are in compliance with applicable laws regarding
employment of employees and retention of independent contractors and are in
compliance with applicable employment tax laws.
(n) Employee Benefit Plans. RCFC's Disclosure Letter contains a
----------------------
complete and accurate list of all pension, retirement, stock option, stock
purchase, stock ownership, savings, stock appreciation right, profit sharing,
deferred compensation, consulting, bonus, group insurance, severance and other
benefit plans, contracts, agreements and arrangements, including, but not
limited to, "employee benefit plans," as defined in Section 3(3) of ERISA,
incentive and welfare policies, contracts, plans and arrangements and all trust
agreements related thereto with respect to any present or former directors,
officers or other employees of RCFC or any of its Subsidiaries (hereinafter
referred to collectively as the "RCFC Employee Plans"). All of the RCFC
Employee Plans comply in all material respects with all applicable requirements
of ERISA, the Code and other applicable laws; there has occurred no "prohibited
transaction" (as defined in Section 406 of ERISA or Section 4975 of the Code)
which is likely to result in the imposition of any penalties or taxes under
Section 502(i) of ERISA or Section 4975 of the Code upon RCFC or any of its
Subsidiaries. No liability to the PBGC has been or is expected by RCFC or any
of its Subsidiaries to be incurred with respect to any RCFC Employee Plan which
31
is subject to Title IV of ERISA ("RCFC Pension Plan"), or with respect to any
"single-employer plan" (as defined in Section 4001(a) of ERISA) currently or
formerly maintained by RCFC or any entity which is considered one employer with
RCFC under Section 4001(b)(1) of ERISA or Section 414 of the Code (an "ERISA
Affiliate"). No RCFC Pension Plan had an "accumulated funding deficiency" (as
defined in Section 302 of ERISA), whether or not waived, as of the last day of
the end of the most recent plan year ending prior to the date hereof; the fair
market value of the assets of each RCFC Pension Plan exceeds the present value
of the "benefit liabilities" (as defined in Section 4001(a)(16) of ERISA) under
such RCFC Pension Plan as of the end of the most recent plan year with respect
to the respective RCFC Pension Plan ending prior to the date hereof, calculated
on the basis of the actuarial assumptions used in the most recent actuarial
valuation for such RCFC Pension Plan as of the date hereof; and no notice of a
"reportable event" (as defined in Section 4043 of ERISA) for which the 30-day
reporting requirement has not been waived has been required to be filed for any
RCFC Pension Plan within the 12-month period ending on the date hereof. Neither
RCFC nor any of its Subsidiaries has provided, or is required to provide,
security to any RCFC Pension Plan or to any single-employer plan of an ERISA
Affiliate pursuant to Section 401(a)(29) of the Code. Neither RCFC, its
Subsidiaries, nor any ERISA Affiliate has contributed to any "multiemployer
plan," as defined in Section 3(37) of ERISA, on or after September 26, 1980.
Each RCFC Employee Plan that is an "employee pension benefit plan" (as defined
in Section 3(2) of ERISA) and which is intended to be qualified under Section
401(a) of the Code (an "RCFC Qualified Plan") has received a favorable
determination letter from the IRS, and RCFC and its Subsidiaries are not aware
of any circumstances likely to result in revocation of any such favorable
determination letter. Each RCFC Qualified Plan that is an "employee stock
ownership plan" (as defined in Section 4975(e)(7) of the Code) has satisfied all
of the applicable requirements of Sections 409 and 4975(e)(7) of the Code and
the regulations thereunder in all respects and any assets of any such RCFC
Qualified Plan that are not allocated to participants' individual accounts are
pledged as security for, and may be applied to satisfy, any securities
acquisition indebtedness. There is no pending or, to RCFC's knowledge,
threatened litigation, administrative action or proceeding relating to any RCFC
Employee Plan. There has been no announcement or commitment by RCFC or any of
its Subsidiaries to create an additional RCFC Employee Plan, or to amend any
RCFC Employee Plan, except for amendments required by applicable law which do
not materially increase the cost of such RCFC Employee Plan; and, except as
specifically identified in RCFC's Disclosure Letter, RCFC and its Subsidiaries
do not have any obligations for post-retirement or post-employment benefits
under any RCFC Employee Plan that cannot be amended or terminated upon 60 days'
notice or less without incurring any liability thereunder, except for coverage
required by Part 6 of Title I of ERISA or Section 4980B of the Code, or similar
state laws, the cost of which is borne by the insured individuals. With respect
to RCFC or any of its Subsidiaries, for the Employee Plans listed in RCFC's
Disclosure Letter, the execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby will not result in any
payment or series of payments by RCFC or any of its Subsidiaries to any person
which is an "excess parachute payment" (as defined in Section 280G of the Code),
increase or secure (by way of a trust or other vehicle) any benefits payable
under any RCFC Employee Plan or accelerate the time of payment or vesting of any
such benefit. With
32
respect to each RCFC Employee Plan, RCFC has supplied to Ironbound a true and
correct copy of (A) the annual report on the applicable form of the Form 5500
series filed with the IRS for the most recent three plan years, if required to
be filed, (B) such RCFC Employee Plan, including amendments thereto, (C) each
trust agreement, insurance contract or other funding arrangement relating to
such RCFC Employee Plan, including amendments thereto, (D) the most recent
summary plan description and summary of material modifications thereto for such
RCFC Employee Plan, if the RCFC Employee Plan is subject to Title I of ERISA,
(E) the most recent actuarial report or valuation if such RCFC Employee Plan is
an RCFC Pension Plan and any subsequent changes to the actuarial assumptions
contained therein and (F) the most recent determination letter issued by the IRS
if such RCFC Employee Plan is a Qualified Plan.
(o) Title to Assets. RCFC and each of its Subsidiaries has good and
---------------
marketable title to its properties and assets (including any intellectual
property asset such as any trademark, service xxxx, tradename or copyright) and
property acquired in a judicial foreclosure proceeding or by way of a deed in
lieu of foreclosure or similar transfer, other than property as to which it is
lessee, in which case the related lease is valid and in full force and effect.
Each lease pursuant to which RCFC or any of its Subsidiaries is lessor is valid
and in full force and effect and no lessee under any such lease is in default or
in violation of any provisions of any such lease. All material tangible
properties of RCFC and each of its Subsidiaries are in a good state of
maintenance and repair, conform with all applicable ordinances, regulations and
zoning laws and are considered by RCFC to be adequate for the current business
of RCFC and its Subsidiaries.
(p) Compliance with Laws. RCFC and each of its Subsidiaries has all
--------------------
permits, licenses, certificates of authority, orders and approvals of, and has
made all filings, applications and registrations with, all federal, state, local
and foreign governmental or regulatory bodies that are required in order to
permit it to carry on its business as it is presently conducted; all such
permits, licenses, certificates of authority, orders and approvals are in full
force and effect, and, to the best knowledge of RCFC, no suspension or
cancellation of any of them is threatened. Since the date of its incorporation,
the corporate affairs of RCFC have not been conducted in violation of any law,
ordinance, regulation, order, writ, rule, decree or approval of any Governmental
Entity. The businesses of RCFC and its Subsidiaries are not being conducted in
violation of any law, ordinance, regulation, order, writ, rule, decree or
condition to approval of any Governmental Entity.
(q) Fees. Other than the financial advisory services performed for
----
RCFC by Sandler X'Xxxxx & Partners, L.P. pursuant to an agreement dated July 10,
1998, a true and complete copy of which has been previously delivered to
Ironbound, neither RCFC nor any of its Subsidiaries, nor any of their 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 RCFC or any of its Subsidiaries in connection with this Agreement
or the transactions contemplated hereby.
33
(r) Environmental Matters. With respect to RCFC and each of its
---------------------
Subsidiaries:
(i) Each of RCFC and its Subsidiaries, the Participation Facilities
and, to RCFC's knowledge, the Loan Properties are, and have been, in substantial
compliance with, and are not liable under, all Environmental Laws;
(ii) There is no suit, claim, action, demand, executive or
administrative order, directive, investigation or proceeding pending or, to
RCFC's knowledge, threatened, before any court, governmental agency or board or
other forum against it or any of its Subsidiaries or any Participation Facility
(x) for alleged noncompliance (including by any predecessor) with, or liability
under, any Environmental Law or (y) relating to the presence of or release into
the environment of any Hazardous Material, whether or not occurring at or on a
site owned, leased or operated by it or any of its Subsidiaries or any
Participation Facility;
(iii) To RCFC's knowledge, there is no suit, claim, action, demand,
executive or administrative order, directive, investigation or proceeding
pending or threatened before any court, governmental agency or board or other
forum relating to or against any Loan Property (or RCFC or any of its
Subsidiaries in respect of such Loan Property) (x) relating to alleged
noncompliance (including by any predecessor) with, or liability under, any
Environmental Law or (y) relating to the presence of or release into the
environment of any Hazardous Material, whether or not occurring at or on a site
owned, leased or operated by a Loan Property;
(iv) To RCFC's knowledge, the properties currently owned or operated
by RCFC or any of its Subsidiaries (including, without limitation, soil,
groundwater or surface water on, under or adjacent to the properties, and
buildings thereon) are not contaminated with and do not otherwise contain any
Hazardous Material other than as permitted under applicable Environmental Law;
(v) Neither RCFC nor any of its Subsidiaries has received any notice,
demand letter, executive or administrative order, directive or request for
information from any federal, state, local or foreign governmental entity or any
third party indicating that it may be in violation of, or liable under, any
Environmental Law;
(vi) To RCFC's knowledge, there are no underground storage tanks on,
in or under any properties owned or operated by RCFC or any of its Subsidiaries
or any Participation Facility, and no underground storage tanks have been closed
or removed from any properties owned or operated by RCFC or any of its
Subsidiaries or any Participation Facility; and
(vii) To RCFC's knowledge, during the period of (l) RCFC's or any of
its Subsidiaries' ownership or operation of any of their respective current
properties or (m) RCFC's or any of its Subsidiaries' participation in the
management of any Participation Facility,
34
there has been no contamination by or release of Hazardous Materials in, on,
under or affecting such properties. To RCFC's knowledge, prior to the period of
(x) RCFC's or any of its Subsidiaries' ownership or operation of any of their
respective current properties or (y) RCFC's or any of its Subsidiaries'
participation in the management of any Participation Facility, there was no
contamination by or release of Hazardous Material in, on, under or affecting
such property, Participation Facility or Loan Property.
(s) Loan Portfolio; Allowance; Asset Quality. (i) With respect to
----------------------------------------
each Loan owned by RCFC or its Subsidiaries in whole or in part, to the best
knowledge of RCFC:
(A) the note and the related security documents are each legal, valid
and binding obligations of the maker or obligor thereof, enforceable against
such maker or obligor in accordance with their terms;
(B) neither RCFC nor any of its Subsidiaries nor any prior holder of a
Loan has modified the note or any of the related security documents in any
material respect or satisfied, canceled or subordinated the note or any of the
related security documents except as otherwise disclosed by documents in the
applicable Loan file;
(C) RCFC or a Subsidiary is the sole holder of legal and beneficial
title to each Loan (or RCFC Bank's applicable participation interest, as
applicable); except as otherwise referenced on the books and records of RCFC;
(D) the note and the related security documents, copies of which are
included in the Loan files, are true and correct copies of the documents they
purport to be and have not been suspended, amended, modified, canceled or
otherwise changed except as otherwise disclosed by documents in the applicable
Loan file;
(E) there is no pending or threatened condemnation proceeding or
similar proceeding affecting the property that serves as security for a Loan;
except as otherwise referenced on the books and records of RCFC;
(F) there is no litigation or proceeding pending or threatened,
relating to the property that serves as security for a Loan that would have a
Material Adverse Effect upon the related Loan; and
(G) with respect to a Loan held in the form of a participation, the
participation documentation is legal, valid, binding and enforceable.
(ii) The allowance for possible losses reflected in RCFC Bank's
audited statement of condition at June 30, 1997 was, and the allowance for
possible losses shown on the balance sheets in RCFC's Reports for periods ending
after June 30, 1998 will be adequate,
35
as of the dates thereof, under generally accepted accounting principles
applicable to stock savings banks consistently applied.
(iii) RCFC's Disclosure Letter sets forth by category the
amounts of all loans, leases, advances, credit enhancements, other extensions of
credit, commitments and interest-bearing assets of RCFC and its Subsidiaries
that have been classified (whether regulatory or internal) as "Other Loans
Specially Mentioned," "Special Mention," "Substandard," "Doubtful," "Loss,"
"Classified," "Criticized," "Credit Risk Assets," "Concerned Loans" (in the
latter two cases, to the extent available) or words of similar import, and RCFC
and its Subsidiaries shall promptly after the end of any month inform Ironbound
of any such classification arrived at any time after the date hereof. The OREO
included in any non-performing assets of RCFC or any of its Subsidiaries is
carried net of reserves at the lower of cost or fair value, less estimated
selling costs, based on current independent appraisals or evaluations or current
management appraisals or evaluations; provided, however, that "current" shall
mean within the past 12 months.
(t) Accounting Matters. Neither RCFC nor any of its Subsidiaries or,
------------------
to the best of its knowledge, any of its other affiliates has, through the date
hereof, taken or agreed to take any action that would prevent RCFC from
accounting for the business combination to be effected by the Merger as a
pooling-of-interests, and RCFC has no knowledge of any fact or circumstance that
would prevent such accounting treatment.
(u) Investment Securities; Borrowing. (i) Except for investments in
--------------------------------
FHLB Stock and pledges to secure FHLB borrowings and reverse repurchase
agreements entered into in arms-length transactions pursuant to normal
commercial terms and conditions and entered into in the ordinary course of
business and restrictions that exist for securities to be classified as "held to
maturity," none of the investments reflected in the balance sheet of RCFC Bank
for the year ended June 30, 1997, and none of the investment securities held by
RCFC or any of its Subsidiaries since June 30, 1997 is subject to any
restriction (contractual or statutory) that would materially impair the ability
of the entity holding such investment freely to dispose of such investment at
any time.
(ii) Except as set forth in RCFC's Disclosure Letter, neither RCFC nor
any Subsidiary is a party to or has agreed to enter into any Derivatives
Contract or owns securities that (A) are referred to generically as "structured
notes," "high risk mortgage derivatives," "capped floating rate notes" or
"capped floating rate mortgage derivatives" or (B) are likely to have changes in
value as a result of interest or exchange rate changes that significantly exceed
normal changes in value attributable to interest or exchange rate changes,
except for those Derivatives Contracts and other instruments legally purchased
or entered into in the ordinary course of business, consistent with safe and
sound banking practices and regulatory guidance, and listed (as of the date
hereof) in RCFC's Disclosure Letter or disclosed in RCFC's Report filed on or
prior to the date hereof.
36
(iii) Set forth in RCFC's Disclosure Letter is a true and complete
list of RCFC's borrowed funds (excluding deposit accounts) as of the date
hereof.
(v) Registration Statement. The information regarding RCFC to be
----------------------
supplied by RCFC for inclusion in (i) the Registration Statement or (ii) the
Proxy Statement will not, at the time such Registration Statement becomes
effective, 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.
(w) Books and Records. The books and records of RCFC and its
-----------------
Subsidiaries on a consolidated basis 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.
(x) Corporate Documents. RCFC has delivered to Ironbound true and
-------------------
complete copies of its organization certificate and bylaws and of RCFC Bank's
organization certificate and bylaws. The minute books of RCFC and RCFC Bank
constitute a complete and correct record of all actions taken by their
respective boards of directors (and each committee thereof) and their
stockholders. The minute books of each of RCFC's Subsidiaries constitutes a
complete and correct record of all actions taken by the respective boards of
directors (and each committee thereof) and the stockholders of each such
Subsidiary.
(y) Beneficial Ownership of Ironbound Common Stock. As of the date
----------------------------------------------
hereof, RCFC beneficially owns no shares of Ironbound Common Stock and, other
than as contemplated by the Option Agreement, does not have any option, warrant
or right of any kind to acquire the beneficial ownership of any shares of
Ironbound Common Stock.
(z) Tax Treatment of the Merger. As of the date hereof, RCFC has no
---------------------------
knowledge of any fact or circumstance that would prevent the transactions
contemplated by this Agreement from qualifying as a tax-free reorganization
under the Code.
(aa) Year 2000 Matters. RCFC has completed a review of its computer
-----------------
systems to identify systems that could be affected by the "Year 2000" issue and
reasonably believes it has identified all Year 2000 problems. RCFC's management
has developed and commenced implementation of a plan which is designed to
complete any required initial changes to its computer systems and to complete
testing of those changes by December 31, 1998. Between the date of this
Agreement and the Effective Time, RCFC shall use commercially practicable
efforts to implement and/or continue to undertake such plan. Year 2000 issues
have not had, and are not reasonably expected to have, a Material Adverse Effect
on RCFC or its Subsidiaries.
37
(bb) Deposits. None of the deposits of RCFC or any of its Subsidiaries is a
--------
"brokered deposit."
ARTICLE III
CONDUCT PENDING THE MERGER
--------------------------
Section 3.1. Conduct of Ironbound'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, Ironbound shall, and shall cause
its Subsidiaries to, use commercially reasonable efforts to (i) conduct its
business in the regular, ordinary and usual course consistent with past
practice; (ii) maintain and preserve intact its business organization,
properties, leases, 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 Ironbound or RCFC to perform their
respective covenants and agreements on a timely basis under this Agreement, (iv)
take no action which would adversely affect or delay the ability of Ironbound,
Ironbound Bank, RCFC or RCFC Bank to obtain any necessary approvals, consents or
waivers of any governmental authority required for the transactions contemplated
hereby or which would reasonably be expected to result in any such approvals,
consents or waivers containing any material condition or restriction, and (v)
take no action that results in or is reasonably likely to have a Material
Adverse Effect on Ironbound or Ironbound Bank.
Section 3.2. Forbearance by Ironbound. Without limiting the
------------------------
covenants set forth in Section 3.1 hereof, except as otherwise provided in this
Agreement and except to the extent required by law or regulation or any
Government Regulators, during the period from the date of this Agreement to the
Effective Time, Ironbound shall not, and shall not permit any of its
Subsidiaries to, without the prior consent of RCFC, which consent shall not be
unreasonably withheld:
(a) change any provisions of the certificate of incorporation or
bylaws of Ironbound or the similar governing documents of its Subsidiaries;
(b) issue any shares of capital stock or change the terms of any
outstanding stock options or warrants or issue, grant or sell any option,
warrant, call, commitment, stock appreciation right, right to purchase or
agreement of any character relating to the authorized or issued capital stock of
Ironbound except pursuant to the exercise of stock options or warrants
outstanding as of the date of this Agreement in the ordinary course of business
and consistent with past practice;
(c) make, declare or pay any cash or stock 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, other than
the $0.05 regular quarterly cash dividend payable by Ironbound. As promptly as
practicable following the date of this Agreement, the Board of Directors of
Ironbound shall cause its regular quarterly dividend record dates and payment
dates to be the
38
same as RCFC's regular quarterly dividend record dates and payments dates for
RCFC Common Stock, and Ironbound shall not thereafter change its regular
dividend payment dates and record dates. Nothing contained in this Section
3.2(c) or in any other Section of this Agreement shall be construed to permit
holders of shares of Ironbound Common Stock to receive two dividends from either
Ironbound or from Ironbound and RCFC in any one quarter. Subject to applicable
regulatory restrictions, if any, Ironbound Bank may pay a cash dividend that is,
in the aggregate, sufficient to fund any dividend by Ironbound permitted
hereunder;
(d) 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, leases or
assets to any individual, corporation or other entity other than a direct or
indirect wholly owned Subsidiary of Ironbound or cancel, release or assign any
indebtedness of any such individual, corporation or other entity, except
pursuant to contracts or agreements in force at the date of this Agreement and
which have been disclosed to RCFC;
(e) except to the extent required by law or as disclosed in Section
3.2(e) of Ironbound's Disclosure Letter or specifically provided for elsewhere
herein, increase in any manner the compensation or fringe benefits of any of its
employees or directors, other than general increases in compensation for non-
officer employees in the ordinary course of business consistent with past
practice that do not cause the annualized compensation of any of Ironbound's
non-officer employees following such increase to exceed by more than 5% the
total annual compensation expenses of Ironbound with respect to such person for
the twelve month period ended March 31, 1998 and other than promotions of non-
officer employees as a result of enhanced job classification and duties, made in
the ordinary course of business which results in an increase in the compensation
thereof so long as such increase does not cause the annual rate of such
individual's compensation to increase by more than 10% of such person's
compensation at March 31, 1998; pay, unless approved in advance by RCFC, any
reasonable "stay in place" pay where necessary or appropriate to retain key
employees; pay any pension or retirement allowance not required by any existing
plan or agreement to any such employees or directors, or become a party to,
amend or commit itself to fund or otherwise establish any trust or account
related to any Ironbound Employee Plan (as defined in Section 2.3(m)) with or
for the benefit of any employee or director; voluntarily accelerate the vesting
of any stock options or other compensation or benefit; make any discretionary
continuation to any Employee Plan; hire any employee with an annual total
compensation payment in excess of $35,000 or enter into any employment contract;
terminate or increase the costs to Ironbound or any Subsidiary of any Employee
Plan;
(f) except as contemplated by Section 4.2, change its method of
accounting as in effect at June 30, 1997, except as required by changes in GAAP
as concurred in by Ironbound's independent auditors;
(g) settle any claim, action or proceeding involving any liability of
Ironbound or any of its Subsidiaries for money damages in excess of $25,000 or
impose material restrictions upon the operations of Ironbound or any of its
Subsidiaries;
39
(h) acquire or agree to acquire, by merging or consolidating with, or
by purchasing a substantial equity interest in or a substantial portion of the
assets of, or by any other manner, any business or any corporation, partnership,
association or other business organization or division thereof or otherwise
acquire or agree to acquire any assets, in each case which are material,
individually or in the aggregate, to Ironbound, except in satisfaction of debts
previously contracted;
(i) except pursuant to commitments existing at the date hereof which
have previously been disclosed to RCFC, make any real estate loans secured by
undeveloped land or real estate located outside the State of New Jersey (other
than real estate secured by one-to-four family homes) or make any construction
loan (other than construction loans secured by one-to-four family homes) outside
the State of New Jersey;
(j) establish or commit to the establishment of any new branch or
other office facilities other than those for which all regulatory approvals have
been obtained except as disclosed in the Ironbound Disclosure Schedule;
(k) take any action that would prevent or impede the Merger from
qualifying (A) for pooling-of-interests accounting treatment, or (B) as a tax-
free reorganization under the Code;
(l) other than in the ordinary course of business consistent with past
practice in individual amounts not to exceed $50,000 and other than investments
for Ironbound's portfolio made in accordance with Section 3.2(m), make any
investment either by purchase of stock or securities, contributions to capital,
property transfers, or purchase of any property or assets of any other
individual, corporation or other entity;
(m) make any investment in any debt security, including mortgage-
backed and mortgage-related securities, other than US government and US
government agency securities with final maturities not greater than five years,
mortgage-backed or mortgage related securities which would not be considered
"high risk" securities pursuant to Thrift Bulletin Number 52 issued by the OTS
or securities of the FHLB, in each case that are purchased in the ordinary
course of business consistent with past practice;
(n) enter into or terminate any contract or agreement, or make any
change in any of its leases or contracts, other than with respect to those
involving aggregate payments of less than, or the provision of goods or services
with a market value of less than, $20,000 per annum and other than contracts or
agreements covered by Section 3.2(o);
(o) settle any claim, action or proceeding involving any liability of
Ironbound or any of its Subsidiaries for money damages in excess of $25,000 or
material restrictions upon the operations of Ironbound or any of its
Subsidiaries;
40
(p) make, grant or purchase any loan or commitment to lend in excess
of $500,000 to any individual borrower, unless such loan is fully secured by
real estate or liquid collateral and conforms in all material respects with the
Bank's existing loan policy. The Bank is also permitted to renew currently
outstanding loans or amounts above $500,000 provided the loan has a satisfactory
payment history and the renewal is not in excess of the original loan principal
amount.
(q) incur any additional borrowings beyond those set forth in the
Ironbound Disclosures Schedule other than short-term (six months or less) FHLB
borrowings and reverse repurchase agreements consistent with past practice, or
pledge any of its assets to secure any borrowings other than as required
pursuant to the terms of borrowings of Ironbound or any Subsidiary in effect at
the date hereof or in connection with borrowings or reverse repurchase
agreements permitted hereunder. Deposits shall not be deemed to be borrowings
within the meaning of this paragraph;
(r) make any capital expenditures in excess of $50,000 per expenditure
from the date of this Agreement until the Effective Date other than pursuant to
binding commitments existing on the date hereof disclosed in the Ironbound
Disclosure Schedule, other than expenditures necessary to maintain existing
assets in good repair or to make payment of necessary taxes;
(s) organize, capitalize, lend to or otherwise invest in any
Subsidiary, or invest in or acquire any equity or voting interest in any firm,
corporation or business enterprise (other than securities of the FHLB that are
purchased in the ordinary course of business consistent with past practice);
(t) elect to the Board of Directors of Ironbound or, except as
disclosed in Ironbound's Disclosure Letter, to any office any person who is not
a member of the Board of Directors of Ironbound or an officer of Ironbound as of
the date of this Agreement;
(u) accept any proposed deposits by any municipality or government
agency the terms of which exceed 90 days; or
(v) agree or make any commitment to take any action that is prohibited
by this Section 3.2.
In the event that RCFC does not respond in writing to Ironbound within
three business days of receipt by RCFC of a written request for Ironbound to
engage in any of the actions for which RCFC's prior written consent is required
pursuant to this Section 3.2, RCFC shall be deemed to have consented to such
action. Any request by Ironbound or response thereto by RCFC shall be made in
accordance with the notice provisions of Section 8.7, shall note that it is a
request pursuant to this Section 3.2 and shall state that a failure to respond
within three business days shall constitute consent.
41
Section 3.3. Conduct of RCFC'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, RCFC shall, and shall cause its
Subsidiaries to, use commercially reasonable efforts to (i) conduct its
business in the regular, ordinary and usual course consistent with past
practice; (ii) maintain and preserve intact its business organization,
properties, leases, employees and advantageous business relationships and retain
the services of its officers and key employees, (iii) take no action which would
materially adversely affect or delay the ability of Ironbound or RCFC to perform
their respective covenants and agreements on a timely basis under this
Agreement, (iv) take no action which would adversely affect or delay the ability
of Ironbound, RCFC, Ironbound Bank or RCFC Bank to obtain any necessary
approvals, consents or waivers of any governmental authority required for the
transactions contemplated hereby or which would reasonably be expected to result
in any such approvals, consents or waivers containing any material condition or
restriction, and (v) take no action that results in or is reasonably likely to
have a Material Adverse Effect on RCFC.
ARTICLE IV
COVENANTS
---------
Section 4.1. Acquisition Proposals. From and after the date hereof
---------------------
until the termination of this Agreement, neither Ironbound or Ironbound Bank,
nor any of their respective officers, directors, employees, representatives,
agents or affiliates (including, without limitation, any investment banker,
attorney or accountant retained by Ironbound or any of its subsidiaries), will,
directly or indirectly, initiate, solicit or knowingly encourage (including by
way of furnishing non-public information or assistance), or facilitate
knowingly, any inquiries or the making of any proposal that constitutes, or may
reasonably be expected to lead to, any Acquisition Proposal (as defined below),
or enter into or maintain or continue discussions or negotiate with any person
or entity in furtherance of such inquiries or to obtain an Acquisition Proposal
or agree to or endorse any Acquisition Proposal, or authorize or permit any of
its officers, directors or employees or any of its subsidiaries or any
investment banker, financial advisor, attorney, accountant or other
representative retained by any of its subsidiaries to take any such action, and
Ironbound shall notify RCFC orally (within one business day) and in writing (as
promptly as practicable) of all of the relevant details relating to all
inquiries and proposals which it or any of its subsidiaries or any such officer,
director, employee, investment banker, financial advisor, attorney, accountant
or other representative may receive relating to any of such matters and if such
inquiry or proposal is in writing, Ironbound shall deliver to RCFC a copy of
such inquiry or proposal promptly; provided, however, that nothing contained in
this Section 4.1 shall prohibit the Board of Directors of Ironbound from (i)
furnishing information to, or entering into discussions or negotiations with any
person or entity that makes an unsolicited written, bona fide proposal, to
acquire Ironbound pursuant to a merger, consolidation, share exchange, business
combination, tender or exchange offer or other similar transaction, if, and only
to the extent that, (A) the Board of Directors of Ironbound receives a written
opinion from its independent financial advisor that such proposal may be
superior to the Merger from a
42
financial point-of-view to Ironbound's stockholders, (B) the Board of Directors
of Ironbound, after consultation with and based upon the written advice of
independent legal counsel, determines in good faith that such action is
necessary for the Board of Directors of Ironbound to comply with its fiduciary
duties to stockholders under applicable law (such proposal that satisfies (A)
and (B) being referred to herein as a "Superior Proposal") and (C) prior to
furnishing such information to, or entering into discussions or negotiations
with, such person or entity, Ironbound (x) provides reasonable notice to RCFC to
the effect that it is furnishing information to, or entering into discussions or
negotiations with, such person or entity and (y) receives from such person or
entity an executed confidentiality agreement in reasonably customary form, (ii)
complying with Rule 14e-2 promulgated under the Exchange Act with regard to a
tender or exchange offer or (iii) failing to make or withdrawing or modifying
its recommendation and entering into a Superior Proposal if there exists a
Superior Proposal and the Board of Directors of Ironbound, after consultation
with and based upon the written advice of independent legal counsel, determines
in good faith that such action is necessary for the Board of Directors of
Ironbound to comply with its fiduciary duties to stockholders under applicable
law. For purposes of this Agreement, "Acquisition Proposal" shall mean any of
the following (other than the transactions contemplated hereunder) involving
Ironbound or any of its subsidiaries: (i) any merger, consolidation, share
exchange, business combination, or other similar transaction; (ii) any sale,
lease, exchange, mortgage, pledge, transfer or other disposition of 10% or more
of the assets of Ironbound or Ironbound Bank, taken as a whole, in a single
transaction or series of transactions; (iii) any tender offer or exchange offer
for 10% or more of the outstanding shares of capital stock of Ironbound or the
filing of a registration statement under the Securities Act in connection
therewith; or (iv) any public announcement of a proposal, plan or intention to
do any of the foregoing or any agreement to engage in any of the foregoing.
Section 4.2. Certain Policies of Ironbound.
-----------------------------
(a) At the request of RCFC, Ironbound shall cause Ironbound Bank to
modify and change its loan, litigation and real estate valuation policies and
practices (including loan classifications and levels of reserves) and investment
and asset/liability management policies and practices after the date on which
all Requisite Regulatory Approvals and stockholder approvals are received, and
after receipt of written confirmation from RCFC that it is not aware of any fact
or circumstance that would prevent completion of the Merger, and prior to the
Effective Time so as to be consistent on a mutually satisfactory basis with
those of RCFC Bank; provided, however, that Ironbound shall not be required to
take such action more than five business days prior to the Effective Date; and
provided, further, that such policies and procedures are not prohibited by GAAP
or any applicable laws and regulations.
(b) Ironbound's representations, warranties and covenants contained in
this Agreement shall not be deemed to be untrue or breached in any respect for
any purpose as a consequence of any modifications or changes undertaken solely
on account of this Section 4.2. RCFC agrees to hold harmless, indemnify and
defend Ironbound and its Subsidiaries, and their
43
respective directors, officers and employees, for any loss, claim, liability or
other damage caused by or resulting from compliance with this Section 4.2.
Section 4.3. Access and Information.
----------------------
(a) Upon reasonable notice, Ironbound and RCFC shall (and shall cause
their respective Subsidiaries to) afford to the other and their respective
representatives (including, without limitation, directors, officers and
employees of such party and its affiliates and counsel, accountants and other
professionals retained by such party) such reasonable 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
either party 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. In furtherance, and not in limitation
of the foregoing, Ironbound shall make available to RCFC all information
necessary or appropriate for the preparation and filing of all real property and
real estate transfer tax returns and reports required by reason of the Merger or
the Bank Merger. RCFC and Ironbound will not, and will cause their respective
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 applicable law,
each of RCFC and Ironbound will keep confidential, and will cause their
respective representatives to keep confidential, all information and documents
obtained pursuant to this Section 4.3 unless such information (i) was already
known to such party or an affiliate of such party, other than pursuant to a
confidentiality agreement or other confidential relationship, (ii) becomes
available to such party or an affiliate of such party from other sources not
known by such party to be bound by a confidentiality agreement or other
obligation of secrecy, (iii) is disclosed with the prior written approval of the
other party 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 that furnished the
same.
(b) During the period of time beginning on the day application
materials for the Bank Merger are initially filed with the OTS, the FDIC, the
NYBD and the NJBD (but in no event earlier than 30 days prior to the Effective
Time) and continuing to the Effective Time, including weekends and holidays,
Ironbound shall cause Ironbound Bank to provide RCFC, RCFC Bank and their
authorized agents and representatives full access to Ironbound Bank's offices
after normal business hours for the purpose of installing necessary wiring and
equipment (at RCFC's expense) to be utilized by RCFC Bank after the Effective
Time; provided, that:
(i) reasonable advance notice of each entry shall be given to
Ironbound Bank and Ironbound Bank approves of each entry, which approval shall
not be unreasonably withheld;
44
(ii) Ironbound Bank shall have the right to have its employees or
contractors present to inspect the work being done;
(iii) to the extent practicable, such work shall be done in a
manner that will not interfere with Ironbound Bank's business conducted at any
affected branch offices;
(iv) all such work shall be done in compliance with all applicable
laws and government regulations, and RCFC Bank shall be responsible for the
procurement, at RCFC Bank's expense, of all required governmental or
administrative permits and approvals;
(v) RCFC Bank shall maintain appropriate insurance satisfactory to
Ironbound Bank in connection with any work done by RCFC Bank's agents and
representatives pursuant to this Section 4.3;
(vi) RCFC Bank shall reimburse Ironbound Bank for any material out-of-
pocket costs or expenses incurred by Ironbound Bank in connection with this
undertaking; and
(vii) in the event this Agreement is terminated in accordance
with Article VI hereof, RCFC Bank, within a reasonable time period and at its
sole cost and expense, will restore such offices to their condition prior to the
commencement of any such installation.
Section 4.4. Certain Filings, Consents and Arrangements. RCFC and
------------------------------------------
Ironbound shall (a) as soon as practicable (and in any event within 45 days
after the date hereof) make, or cause to be made, any filings and applications
and provide any notices required to be filed or provided in order to obtain all
approvals, consents and waivers of governmental authorities and third parties
necessary or appropriate for the consummation of the transactions contemplated
hereby; (b) cooperate with one another in promptly (i) determining what filings
and notices are required to be made or approvals, consents or waivers are
required to be obtained under any relevant federal or state law or regulation or
under any relevant agreement or other document and (ii) making any such filings
and notices, furnishing information required in connection therewith and seeking
timely to obtain any such approvals, consents or waivers; and (c) deliver to the
other copies of the publicly available portions of all such filings, notices and
applications promptly after they are filed.
Section 4.5. Antitakeover Provisions. Ironbound and its
-----------------------
Subsidiaries shall take all steps required by any relevant federal or state law
or regulation or under any relevant agreement or other document (i) to exempt or
continue to exempt RCFC, the Agreement, the Merger, the Bank Merger and the
Option Agreement from any provisions of an antitakeover nature in Ironbound's or
its Subsidiaries' organization certificates and bylaws and the provisions of any
federal or state antitakeover laws, and (ii) upon the request of RCFC, to assist
in any challenge to the applicability to the Agreement, the Merger, the Bank
Merger or the Option Agreement of any federal or state antitakeover laws.
45
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, including the Bank
Merger, as expeditiously as possible, including using efforts to obtain all
necessary actions or non-actions, extensions, waivers, consents and approvals
from all applicable governmental entities, effecting all necessary
registrations, applications and filings (including, without limitation, filings
under any applicable state securities laws) and obtaining any required
contractual consents and regulatory approvals.
Section 4.7. Publicity. The initial press release announcing this
---------
Agreement shall be a joint press release and thereafter Ironbound and RCFC shall
consult with each other in issuing any press releases or otherwise making public
statements with respect to the Merger and any other transaction contemplated
hereby and in making any filings with any governmental entity or with any
national securities exchange with respect thereto.
Section 4.8. Stockholders Meeting. Ironbound shall take all action
--------------------
necessary, in accordance with applicable law and its corporate documents, to
convene a meeting of its stockholders (the "Stockholder Meeting") as promptly as
practicable for the purpose of considering and voting on approval and adoption
of the transactions provided for in this Agreement. Except to the extent
legally required for the discharge by the Board of Directors of its fiduciary
duties as advised in writing by such Board's counsel, the Board of Directors of
Ironbound shall (a) recommend at its Stockholder Meeting that the stockholders
vote in favor of and approve the transactions provided for in this Agreement and
(b) use its best efforts to solicit such approvals.
Section 4.9. Proxy Statements; Comfort Letters. (i) As soon as
---------------------------------
practicable after the date hereof, RCFC and Ironbound shall cooperate with
respect to the preparation of a Proxy Statement-Prospectus for the purpose of
taking stockholder action on the Merger and this Agreement and file the Proxy
Statement-Prospectus with the SEC and the FDIC, respond to comments of the staff
of the SEC and the FDIC and, promptly after the Registration Statement is
declared effective by the SEC and the FDIC, mail the Proxy Statement-Prospectus
to the respective holders of record (as of the applicable record date) of shares
of voting stock of each of Ironbound and RCFC. RCFC and Ironbound each
represents and covenants to the other that the Proxy Statement-Prospectus, and
any amendment or supplement thereto, with respect to the information pertaining
to it or its Subsidiaries at the date of mailing to its stockholders and the
date of its Stockholder Meeting will be in compliance with the Exchange Act and
all relevant rules and regulations of the SEC and the FDIC and will not contain
any untrue statement of a material fact or omit to state any material fact
required to be stated or necessary in order to make the statements therein, in
light of the circumstances under which they were made, not misleading.
46
(ii) RCFC shall cause Ernst & Young LLP, its independent public
accounting firm, to deliver to Ironbound, and Ironbound shall cause Deloitte &
Touche LLP, its independent public accounting firm, to deliver to RCFC and to
its officers and directors who sign the Registration Statement for this
transaction, a "comfort letter" or "agreed upon procedures" letter, in the form
customarily issued by such accountants at such time in transactions of this
type, dated (a) the date of the mailing of the Proxy Statement-Prospectus for
the Stockholders Meeting of Ironbound and the date of mailing of the Proxy
Statement for the Stockholders meeting of RCFC, respectively, and (b) a date not
earlier than five business days preceding the date of the Closing (as defined in
Section 7.1).
Section 4.10. Registration of RCFC Common Stock.
---------------------------------
(a) RCFC shall, as promptly as practicable following the preparation
thereof, file the Registration Statement (including any pre-effective or post-
effective amendments or supplements thereto) with the SEC under the Securities
Act in connection with the transactions contemplated by this Agreement, and RCFC
and Ironbound shall use all reasonable efforts to have the Registration
Statement declared effective under the Securities Act as promptly as practicable
after such filing. RCFC will advise Ironbound promptly after RCFC receives
notice of the time when the Registration Statement has become effective or any
supplement or amendment has been filed, of the issuance of any stop order or the
suspension of the qualification of the shares of capital stock issuable pursuant
to the Registration Statement, or the initiation or threat of any proceeding for
any such purpose, or of any request by the SEC for the amendment or supplement
of the Registration Statement or for additional information. RCFC will provide
Ironbound with as many copies of such Registration Statement and all amendments
thereto promptly upon the filing thereof as Ironbound may reasonably request.
(b) RCFC shall use its best efforts to obtain, prior to the effective
date of the Registration Statement, all necessary state securities laws or "blue
sky" permits and approvals required to carry out the transactions contemplated
by this Agreement.
(c) RCFC shall use its best efforts to list, prior to the Effective
Time, on the Nasdaq National Market, or on such other exchange as RCFC Common
Stock shall then be trading, subject only to official notice of issuance, the
shares of RCFC Common Stock to be issued by RCFC in exchange for the shares of
Ironbound Common Stock.
Section 4.11. Affiliate Letters. Promptly, but in any event within
-----------------
two weeks after the execution and delivery of this Agreement, Ironbound shall
deliver to RCFC a letter identifying all persons who, to the knowledge of
Ironbound, may be deemed to be "affiliates" of Ironbound under Rule 145 of the
Securities Act and the pooling-of-interests accounting rules, including, without
limitation, all directors and executive officers of Ironbound. Within two weeks
after delivery of such letter, Ironbound shall deliver executed letter
agreements, each substantially in the form attached hereto as Exhibit A,
executed by each such person so identified as an affiliate of Ironbound agreeing
(i) to comply with Rule 145, (ii) to refrain from transferring
47
shares as required by the pooling-of-interests accounting rules and (iii) to be
present in person or by proxy and vote in favor of the Merger at Ironbound
Stockholders Meeting. Within two weeks after the date hereof, RCFC shall cause
its directors and executive officers to enter into letter agreements, in the
form attached hereto as Exhibit C, with RCFC concerning the pooling-of-interests
accounting rules.
Section 4.12. Notification of Certain Matters. Each party shall
-------------------------------
give prompt notice to the others of: (a) any event or 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 it or any of its Subsidiaries
subsequent to the date of this Agreement and prior to the Effective Time, under
any contract material to the financial condition, properties, businesses or
results of operations of each party and its Subsidiaries taken as a whole to
which each party or any Subsidiary is a party or is subject; and (b) any event,
condition, change or occurrence which individually or in the aggregate has, or
which, so far as reasonably can be foreseen at the time of its occurrence, is
reasonably likely to result in a Material Adverse Event. Each of Ironbound and
RCFC shall give prompt notice to the other party 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 any of the transactions contemplated by
this Agreement.
Section 4.13. Employees, Directors and Officers.
---------------------------------
(a) All persons who are employees of Ironbound Bank immediately prior
to the Effective Time (Ironbound's Employees) and whose employment is not
specifically terminated at or prior to the Effective Time (a "Continuing
Employee") shall, at the Effective Time, become employees of RCFC or RCFC Bank,
respectively; provided, however, that in no event shall any of Ironbound's
Employees be officers of RCFC or RCFC Bank, or have or exercise any power or
duty conferred upon such an officer, unless and until duly elected or appointed
to such position in accordance with the bylaws of RCFC or RCFC Bank. All of
Ironbound's Employees who remain following the Effective Date shall be employed
at the will of RCFC or RCFC Bank. No contractual right to employment shall
inure to such employees because of this Agreement. Subject to paragraph (e) of
this Section 4.13, no employee of Ironbound will become a contractual employee
of RCFC or RCFC Bank unless such contract is in writing and executed by the
President or Chief Executive Officer of RCFC or RCFC Bank.
(b) Except as provided in paragraph (c) of this Section 4.13,
appropriate steps shall be taken to terminate all Ironbound Employee Plans as of
the Effective Time or as promptly as practical thereafter. Except as provided
in paragraph (c) of this Section 4.13, immediately following the Effective Time,
each Continuing Employee shall be eligible to participate in RCFC Employee
Plans, on the same basis as and subject as are applicable to any newly-hired
employee of RCFC or RCFC Bank (it being understood that inclusion of Continuing
Employee in RCFC Employee Plans may occur at different times with respect to
different plans); provided, however, that with respect to each RCFC Employee
Plan, other than the Richmond County Savings Bank Employee Stock Ownership Plan
(the "RCFC Bank ESOP") and the Retirement Plan of
48
Richmond County Savings Bank in RSI Trust (the "RCFC Bank Retirement Plan"), for
purposes of determining eligibility to participate, vesting, and entitlement to
benefits, service with Ironbound or Ironbound Bank shall be treated as service
with RCFC or RCFC Bank; provided further however, that such service shall not be
recognized to the extent such recognition would result in a duplication of
benefits. Such service shall also apply for purposes of satisfying any waiting
periods, evidence of insurability requirements, or the application of any
preexisting condition limitation with respect to any RCFC or RCFC Bank welfare
benefit plan. For purposes of determining eligibility to participate, vesting,
and entitlement to benefits (including accrual of benefits) under the RCFC Bank
ESOP or RCFC Bank Retirement Plan, Continuing Employees shall be treated as
newly-hired employees of RCFC or RCFC Bank as of the Effective Date and credit
for service shall begin accruing as of that date.
(c) As of the Effective Time, each Ironbound Employee who is a
participant in the Ironbound 401(k) Plan (the "Ironbound 401(k) Plan") shall
become fully vested in his or her account balance in the Ironbound 401(k) Plan
and the Ironbound 401(k) Plan will either be merged into the Richmond County
Savings Bank 401(k) Savings Plan (the "RCFC Bank 401(k) Plan") effective as of a
date following the Effective Time selected by RCFC Bank or, if so elected by
RCFC Bank, terminated immediately prior to, on, or after the Effective Time.
The determination as to whether the Ironbound Savings Plan shall be terminated
or merged into the RCFC Bank 401(k) Plan shall be made by RCFC Bank. Effective
as of the date of the merger of the Ironbound 401(k) Plan into the RCFC 401(k)
Plan or the termination of the Ironbound 401(k) Plan (or the Effective Time, if
subsequent to such termination), Ironbound Employees who are then participating
in the Ironbound 401(k) Plan shall become participants in the RCFC Bank 401(k)
Plan.
(d) RCFC agrees to honor existing employment agreements, including the
change in control provisions of such agreements, between Ironbound and Ironbound
Bank and certain employees, stock option plans and restricted stock plans, and
other benefit plans as described in Section 4.13 (collectively "Employment
Agreements") and to the payment of benefits by Ironbound as of the Effective
Time or earlier as agreed to by Ironbound and RCFC under such agreements and
plans as such amounts are calculated and disclosed on Disclosure Schedule
4.13(d). Payments under the Employment Agreements shall be made by Ironbound,
as set forth in the Ironbound Disclosure Letter, immediately prior to the
Effective Time .
(e) At the Effective Time, RCFC Bank shall enter into an employment
agreement with Xxxxxxx X. Xxxxxxxxx and Xxxxxx Xxxx, substantially in the form
attached hereto as Exhibit D.
Section 4.14. Indemnification; Directors' and Officers' Insurance.
---------------------------------------------------
(a) From and after the Effective Time through the third anniversary of
the Effective Date, RCFC agrees to indemnify and hold harmless each present and
former director and officer of Ironbound and its Subsidiaries and each officer
or employee of Ironbound and its
49
Subsidiaries that is serving or has served as a director or trustee of another
entity expressly at Ironbound's request or direction (each, an "Indemnified
Party"), against any costs or expenses (including reasonable attorneys' fees),
judgments, fines, losses, claims, damages or liabilities (collectively, "Costs")
incurred in connection with any claim, action, suit, proceeding or
investigation, whether civil, criminal, administrative or investigative, arising
out of matters existing or occurring at or prior to the Effective Time
(including the transactions contemplated by this Agreement), whether asserted or
claimed prior to, at or after the Effective Time, and to advance any such Costs
to each Indemnified Party as they are from time to time incurred, in each case
to the fullest extent such Indemnified Party would have been indemnified as a
director, officer or employee of Ironbound and its Subsidiaries and as then
permitted under applicable law.
(b) Any Indemnified Party wishing to claim indemnification under
Section 4.14(a), upon learning of any such claim, action, suit, proceeding or
investigation, shall promptly notify RCFC thereof, but the failure to so notify
shall not relieve RCFC of any liability it may have hereunder to such
Indemnified Party if such failure does not materially and substantially
prejudice the indemnifying party. In the event of any such claim, action, suit,
proceeding or investigation, (i) RCFC shall have the right to assume the defense
thereof with counsel reasonably acceptable to the Indemnified Party and RCFC
shall not be liable to such Indemnified Party for any legal expenses of other
counsel subsequently incurred by such Indemnified Party in connection with the
defense thereof, except that if RCFC does not elect to assume such defense
within a reasonable time or counsel for the Indemnified Party at any time
advises that there are issues which raise conflicts of interest between RCFC and
the Indemnified Party (and counsel for RCFC does not disagree), the Indemnified
Party may retain counsel satisfactory to such Indemnified Party, and RCFC shall
remain responsible for the reasonable fees and expenses of such counsel as set
forth above, to be paid promptly as statements therefor are received; provided,
however, that RCFC shall be obligated pursuant to this paragraph (b) to pay for
only one firm of counsel for all Indemnified Parties in any one jurisdiction
with respect to any given claim, action, suit, proceeding or investigation
unless the use of one counsel for such Indemnified Parties would present such
counsel with a conflict of interest; (ii) the Indemnified Party will reasonably
cooperate in the defense of any such matter; and (iii) RCFC shall not be liable
for any settlement effected by an Indemnified Party without its prior written
consent, which consent may not be withheld unless such settlement is
unreasonable in light of such claims, actions, suits, proceedings or
investigations against, or defenses available to, such Indemnified Party.
(c) RCFC shall pay all reasonable Costs, including attorneys' fees,
that may be incurred by any Indemnified Party in successfully enforcing the
indemnity and other obligations provided for in this Section 4.14 to the fullest
extent permitted under applicable law. The rights of each Indemnified Party
hereunder shall be in addition to any other rights such Indemnified Party may
have under applicable law.
Section 4.15. Tax-Free Reorganization Treatment. Prior to the
---------------------------------
Effective Time, neither RCFC nor Ironbound shall intentionally take, fail to
take, or cause to be taken or not
50
taken, or cause or permit any of their respective Subsidiaries to take, fail to
take, or cause to be taken or not taken, any action within its control that
would disqualify the Merger as a reorganization within the meaning of Section
368(a) of the Code. Subsequent to the Effective Time, RCFC shall not take any
action within its control that would disqualify the Merger as a pooling-of-
interests for accounting purposes or as a reorganization under the Code.
Section 4.16. Savings and Loan Holding Company Structure. If
------------------------------------------
requested by RCFC in order to facilitate the transactions contemplated in this
Agreement and assuming all other material conditions have been met, Ironbound
will take such steps as are necessary to become a savings and loan holding
company pursuant to HOLA, assuming Ironbound so qualifies.
Section 4.17. Divisional Board. RCFC shall, promptly following the
----------------
Effective Time, cause all of the members of Ironbound's Board of Directors as of
the date of this Agreement, who are willing to so serve, to be elected to or
appointed as members of Ironbound's divisional board ("Divisional Board"), the
function of which shall be to advise RCFC with respect to deposit and lending
activities in Ironbound's market area and to maintain and develop customer
relationships. The members of the Board who are willing to so serve shall be
elected to serve a term of three years. Beginning immediately after the
Effective Time, each non-employee member of the Divisional Board (except the
Chairman of the Divisional Board) shall receive an annual retainer fee of
$5,000, plus an attendance fee of $750 for each Divisional Board meeting
attended, and the Chairman of the Divisional Board shall receive an annual
retainer fee of $10,000 plus an attendance fee of $750 for each Divisional Board
meeting attended, and each non-employee member of the Divisional Board shall be
prohibited from competing directly with RCFC for the duration of the term for
which they were elected or appointed. Such Divisional Board annual retainer fee
shall be payable in quarterly installments or in one lump sum at any time in
advance at the option of RCFC.
ARTICLE V
CONDITIONS TO CONSUMMATION
--------------------------
Section 5.1. Conditions to Each Party's Obligations. The respective
-------------- --------------------------------------
obligations of each party to effect the Merger, the Bank Merger and any other
transactions contemplated by this Agreement shall be subject to the satisfaction
of the following conditions:
(a) this Agreement shall have been approved by the requisite vote of
Ironbound's stockholders in accordance with applicable laws and regulations;
(b) the Requisite Regulatory Approvals and any necessary regulatory
consents and waivers with respect to this Agreement and the transactions
contemplated hereby shall have been obtained and shall remain in full force and
effect, and all statutory waiting periods shall
51
have expired; and all other consents, waivers and approvals of any third parties
which are necessary to permit the consummation of the Merger and the other
transactions contemplated hereby shall have been obtained or made except for
those the failure to obtain would not have a Material Adverse Effect (i) on
Ironbound and its Subsidiaries taken as a whole or (ii) on RCFC and its
Subsidiaries taken as a whole. None of the approvals or waivers referred to
herein shall contain any term or condition which would have a Material Adverse
Effect on (x) Ironbound and its Subsidiaries taken as a whole or (y) RCFC and
its Subsidiaries taken as a whole;
(c) no party hereto shall be subject to any order, decree or
injunction of a court or agency of competent jurisdiction which enjoins or
prohibits the consummation of the Merger, the Bank Merger or any other
transactions contemplated by this Agreement;
(d) no statute, rule or regulation shall have been enacted, entered,
promulgated, interpreted, applied or enforced by any governmental authority
which prohibits. restricts or makes illegal consummation of the Merger, the Bank
Merger or any other transactions contemplated by this Agreement;
(e) the Registration Statement shall have been declared effective by
the SEC and no proceedings shall be pending or threatened by the SEC to suspend
the effectiveness of the Registration Statement; all required approvals by state
securities or "blue sky" authorities with respect to the transactions
contemplated by this Agreement shall have been obtained;
(f) [Reserved]
(g) RCFC shall have received the letter agreement referred to in
Section 4.11 from each affiliate of Ironbound; and
(h) RCFC shall have caused to be listed on the Nasdaq National Market,
or on such other market on which shares of RCFC Common Stock shall then be
trading, subject only to official notice of issuance, the shares of RCFC Common
Stock to be issued by RCFC in exchange for the shares of Ironbound Common Stock.
Section 5.2. Conditions to the Obligations of RCFC and RCFC Bank.
---------------------------------------------------
The obligations of RCFC and RCFC Bank to effect the Merger, the Bank Merger and
any other transactions contemplated by this Agreement shall be further subject
to the satisfaction of the following additional conditions, any one or more of
which may be waived by RCFC:
(a) each of the obligations of Ironbound and Ironbound Bank,
respectively, required to be performed by it at or prior to the Closing pursuant
to the terms of this Agreement shall have been duly performed and complied with
in all material respects and the representations and warranties of Ironbound and
Ironbound Bank contained in this Agreement shall be true and correct, subject to
Sections 2.1 and 2.2, as of the date of this Agreement and as of the Effective
Time as though made at and as of the Effective Time (except as to any
representation or warranty which specifically relates to an earlier date). RCFC
shall have received a certificate to the
52
foregoing effect signed by the chief executive officer and the chief financial
or principal accounting officer of Ironbound;
(b) all action required to be taken by, or on the part of, Ironbound
and Ironbound Bank to authorize the execution, delivery and performance of this
Agreement and the consummation by Ironbound and Ironbound Bank of the
transactions contemplated hereby shall have been duly and validly taken by the
Board of Directors and stockholders of Ironbound or Ironbound Bank, as the case
may be, and RCFC shall have received certified copies of the resolutions
evidencing such authorization;
(c) Ironbound shall have obtained the consent or approval of each
person (other than the governmental approvals or consents referred to in Section
5. 1 (b)) whose consent or approval shall be required in order to permit the
succession by the surviving corporation pursuant to the Merger to any
obligation, right or interest of Ironbound or its Subsidiaries under any loan or
credit agreement, note, mortgage, indenture, lease, license or other agreement
or instrument to which Ironbound or its Subsidiaries is a party or is otherwise
bound, except those for which failure to obtain such consents and approvals
would not, individually or in the aggregate, have a Material Adverse Effect on
RCFC (after giving effect to the consummation of the transactions contemplated
hereby) or upon the consummation of the transactions contemplated hereby.
(d) RCFC shall have received certificates (such certificates to be
dated as of a day as close as practicable to the Closing Date) from appropriate
authorities as to the corporate existence and good standing of Ironbound and its
Subsidiaries;
(e) RCFC shall have received an opinion of Xxxxxxx, Xxxxxx & Xxxxxxxx.
counsel to RCFC, dated as of the Effective Date, in form and substance customary
in transactions of the type contemplated hereby, and reasonably satisfactory to
RCFC, substantially to the effect that on the basis of the facts,
representations and assumptions set forth in such opinion which are consistent
with the state of facts existing at the Effective Time, the Merger will be
treated for federal income tax purposes as a reorganization within the meaning
of Section 368(a) of the Code and that accordingly:
(i) No gain or loss will be recognized by RCFC, RCFC Bank,
Ironbound or Ironbound Bank as a result of the Merger;
(ii) Except to the extent of any cash received in lieu of a
fractional share interest in RCFC Common Stock, no gain or loss will be
recognized by the stockholders of Ironbound who exchange their Ironbound
Common Stock for RCFC Common Stock pursuant to the Merger;
(iii) The tax basis of RCFC Common Stock received by
stockholders who exchange their Ironbound Common Stock for RCFC Common Stock
in the Merger will
53
be the same as the tax basis of Ironbound Common Stock surrendered pursuant to
the Merger. reduced by any amount allocable to a fractional share interest for
which cash is received and increased by any gain recognized on the exchange; and
(iv) The holding period of RCFC Common Stock received by each
stockholder in the Merger will include the holding period of Ironbound Common
Stock exchanged therefor, provided that such stockholder held such Ironbound
Common Stock as a capital asset on the Effective Date.
Such opinion may be based on, in addition to the review of such
matters of fact and law as Xxxxxxx, Xxxxxx & Xxxxxxxx considers appropriate, (x)
representations made at the request of Xxxxxxx, Xxxxxx & Xxxxxxxx by RCFC, RCFC
Bank, Ironbound, Ironbound Bank, stockholders of RCFC or Ironbound, or any
combination of such persons and (y) certificates provided at the request of
Xxxxxxx, Xxxxxx & Xxxxxxxx by officers of RCFC, RCFC Bank. Ironbound, Ironbound
Bank and other appropriate persons.
(f) The consummation of the sale of Ironbound's executive office is
completed subject to terms disclosed in Ironbound's Disclosure Letter.
Section 5.3. Conditions to the Obligations of Ironbound and
----------------------------------------------
Ironbound Bank. The obligations of Ironbound and Ironbound Bank to effect the
--------------
Merger, the Bank Merger and any other transactions contemplated by this
Agreement shall be further subject to the satisfaction of the following
additional conditions, any one or more of which may be waived by Ironbound:
(a) each of the obligations of RCFC and RCFC Bank, respectively,
required to be performed by it at or prior to the Closing pursuant to the terms
of this Agreement shall have been duly performed and complied with in all
material respects and the representations and warranties of RCFC and RCFC Bank
contained in this Agreement shall be true and correct, subject to Sections 2.1
and 2.2, as of the date of this Agreement and as of the Effective Time as though
made at and as of the Effective Time (except as to any representation or
warranty which specifically relates to an earlier date). Ironbound shall have
received a certificate to the foregoing effect signed by the chief executive
officer and the chief financial or principal accounting officer of RCFC;
(b) all action required to be taken by, or on the part of, RCFC and
RCFC Bank to authorize the execution, delivery and performance of this Agreement
and the consummation by RCFC and RCFC Bank of the transactions contemplated
hereby shall have been duly and validly taken by the Board of Directors and
stockholders of RCFC or RCFC Bank, as the case may be, and Ironbound shall have
received certified copies of the resolutions evidencing such authorization;
(c) RCFC shall have obtained the consent or approval of each person
(other than the governmental approvals or consents referred to in Section
5.1(b)) whose consent or
54
approval shall be required in connection with the transactions contemplated
hereby under any loan or credit agreement, note, mortgage, indenture, lease,
license or other agreement or instrument to which RCFC or its Subsidiaries is a
party or is otherwise bound, except those for which failure to obtain such
consents and approvals would not, individually or in the aggregate, have a
Material Adverse Effect on RCFC (after giving effect to the transactions
contemplated hereby) or upon the consummation of the transactions contemplated
hereby.
(d) Ironbound shall have received certificates (such certificates to
be dated as of a day as close as practicable to the Closing Date) from
appropriate authorities as to the corporate existence and good standing of RCFC
and its Subsidiaries;
(e) Ironbound shall have received an opinion of Xxxx Xxxxxx Xxxxxx
Xxxxxxxx & Xxxxxx, P.C., counsel to Ironbound, dated as of the Effective Date,
in form and substance customary in transactions of the type contemplated hereby,
and reasonably satisfactory to Ironbound, substantially to the effect that on
the basis of the facts, representations and assumptions set forth in such
opinion which are consistent with the state of facts existing at the Effective
Time, the Merger will be treated for federal income tax purposes as a
reorganization within the meaning of Section 368(a) of the Code and that
accordingly:
(i) No gain or loss will be recognized by RCFC, RCFC Bank,
Ironbound or Ironbound Bank as a result of the Merger;
(ii) Except to the extent of any cash received in lieu of a
fractional share interest in RCFC Common Stock, no gain or loss will be
recognized by the stockholders of Ironbound who exchange their Ironbound
Common Stock for RCFC Common Stock pursuant to the Merger;
(iii) The tax basis of RCFC Common Stock received by
stockholders who exchange their Ironbound Common Stock for RCFC Common Stock in
the Merger will be the same as the tax basis of Ironbound Common Stock
surrendered pursuant to the Merger, reduced by any amount allocable to a
fractional share interest for which cash is received and increased by any gain
recognized on the exchange; and
(iv) The holding period of RCFC Common Stock received by each
stockholder in the Merger will include the holding period of Ironbound Common
Stock exchanged therefor, provided that such stockholder held such Ironbound
Common Stock as a capital asset on the Effective Date.
Such opinion may be based on, in addition to the review of such
matters of fact and law as Xxxx Xxxxxx Xxxxxx Xxxxxxxx & Xxxxxx, P.C. considers
appropriate, (x) representations made at the request of Xxxx Xxxxxx Xxxxxx
Xxxxxxxx & Xxxxxx, P.C. by RCFC, RCFC Bank, Ironbound, Ironbound Bank,
stockholders of RCFC or Ironbound, or any combination of such persons and (y)
certificates provided at the request of
55
Xxxx Xxxxxx Xxxxxx Xxxxxxxx & Xxxxxx, P.C. by officers of RCFC, RCFC Bank,
Ironbound and other appropriate persons.
ARTICLE VI
TERMINATION
-----------
Section 6.1. Termination. This Agreement may be terminated, and
-----------
the Merger abandoned, at or prior to the Effective Date, either before or after
its approval by the stockholders of Ironbound.
(a) by the mutual consent of RCFC and Ironbound in a written
instrument, if the Board of Directors of each so determines by vote of a
majority of the members of its entire Board;
(b) by RCFC or Ironbound, if its Board of Directors so determines by
vote of a majority of the members of its entire Board, in the event of the
failure of the stockholders of Ironbound to approve the Agreement at its
Stockholder Meeting called to consider such approval;
(c) by RCFC or Ironbound, by written notice to the other party, if
either (i) any approval, consent or waiver of a governmental agency required to
permit consummation of the transactions contemplated hereby shall have been
denied or (ii) any governmental authority of competent jurisdiction shall have
issued a final, unappealable order enjoining or otherwise prohibiting
consummation of the transactions contemplated by this Agreement;
(d) by RCFC or Ironbound, if its Board of Directors so determines by
vote of a majority of the members of its entire Board, in the event that the
Merger is not consummated by April 30, 1999 ("Initial Termination Date"); 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; or
(e) by RCFC, if the Board of Directors of Ironbound does not publicly
recommend in the Proxy Statement that Ironbound's stockholders approve and adopt
this Agreement or if, after recommending in the Proxy that stockholders approve
and adopt this Agreement, the Board of Directors of Ironbound shall have
withdrawn, modified or amended such recommendation in any respect materially
adverse to RCFC; or
(f) by RCFC by written notice to Ironbound, or by Ironbound by written
notice to RCFC in the event that there has occurred since the date of this
Agreement an event, condition, change or occurrence which, individually or in
the aggregate, has had or could reasonably be expected to result in a Material
Adverse Effect on Ironbound or RCFC, as the case
56
may be; provided that one party shall have given the other thirty (30) calendar
days prior written notice of such termination, and the breaching party shall not
have remedied such event, condition, change or occurrence by the end of such
thirty-day period;
(g) by Ironbound, if its board of directors so determines by the
requisite vote of members of its entire board, at any time during the five-day
period commencing with the Valuation Date, in accordance with (i) below:
(i) if RCFC Market Value is less than $14.00, adjusted as
indicated in the last sentence of this Section 6.1(g).
If RCFC declares or effects a stock dividend, reclassification,
recapitalization, split-up, combination, exchange of shares or similar
transaction between the date of this Agreement and the Valuation Date, the
prices for the common stock of such company shall be appropriately adjusted, in
the manner specified in Section 1.2(c) of this Agreement, for the purposes of
applying this Section 6.1(g); or
(h) by RCFC or Ironbound (provided that the party seeking termination
is not then in material breach of any representation, warranty, covenant or
other agreement contained herein), in the event of (i) a failure to perform or
comply by the other party with any covenant or agreement of such other party
contained in this Agreement, which failure or non-compliance is material in the
context of the transactions contemplated by this Agreement, or (ii) subject to
Sections 2.2(a) and (b), any inaccuracies, omissions or breach in the
representations, warranties, covenants or agreements of the other party
contained in this Agreement the circumstances as to which either individually or
in the aggregate have, or reasonably could be expected to have, a Material
Adverse Effect on such other party; in either case which has not been or cannot
be cured within 30 calendar days after written notice thereof is given by the
party seeking to terminate to such other party.
ARTICLE VII
CLOSING, EFFECTIVE DATE AND EFFECTIVE TIME
------------------------------------------
Section 7.1. Effective Date and Effective Time. The closing of the
---------------------------------
transactions contemplated hereby ("Closing") shall take place at the offices of
Richmond County Financial Corp., 0000 Xxxxxxxxx Xxxxxx, Xxxxxx Xxxxxx, Xxx Xxxx
00000, unless another place is agreed to by RCFC and Ironbound, on a date
("Closing Date") that is no later than five business days following the date on
which the expiration of the last applicable waiting period in connection with
notices to and approvals of governmental authorities shall occur and all
conditions to the consummation of this Agreement are satisfied or waived, or on
such other date as may be agreed to by the parties. Prior to the Closing Date,
RCFC and Ironbound shall execute a Certificate of Merger in accordance with all
appropriate legal requirements, which shall be filed as required by
57
law on the Closing Date, and the Merger provided for therein shall become
effective upon such filing or on such date as may be specified in such
Certificate of Merger. The date of such filing or such later effective date as
specified in the Certificate of Merger is herein referred to as the "Effective
Date." The "Effective Time" of the Merger shall be as set forth in the
Certificate of Merger.
Section 7.2. Deliveries at the Closing. Subject to the provisions
-------------------------
of Articles V and VI, on the Closing Date there shall be delivered to RCFC and
Ironbound the documents and instruments required to be delivered under Article
V.
Section 7.3. Adjustment of Exchange Ratio. If RCFC Market Value is
----------------------------
less than $15.945, but equal to or greater than $14.00, adjusted as indicated in
the last sentence of Section 6.1(g), the Exchange Ratio shall be adjusted such
that the value of the consideration (valued at the Valuation Date) to be paid in
respect of each share of Ironbound Common Stock to be converted into RCFC Common
Stock and cash in lieu of fractional shares upon consummation of the Merger is
$23.12.
ARTICLE VIII
CERTAIN OTHER MATTERS
---------------------
Section 8.1. Certain Definitions; Interpretation. As used in this
-----------------------------------
Agreement, the following terms shall have the meanings indicated:
"material" means material to RCFC or Ironbound (as the case may be)
and its respective Subsidiaries, taken as a whole.
"person" includes an individual, corporation, limited liability
company, partnership, association, trust or unincorporated organization.
When a reference is made in this Agreement to Sections, Exhibits or
Schedules, such reference shall be to a Section of, Exhibit or Schedule to, this
Agreement unless otherwise indicated. The table of contents 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. Any
reference to gender in this Agreement shall be deemed to include any other
gender.
Section 8.2. Survival. Only those agreements and covenants of the
--------
parties that are by their terms applicable in whole or in part after the
Effective Time, including Sections 4.3(a), 4.13, 4.14, 4.16, 4.17, 4.19 and 8.6
of this Agreement, shall survive the Effective Time.
58
All other representations, warranties, agreements and covenants shall be deemed
to be conditions of the Agreement and shall not survive the Effective Time. If
the Agreement shall be terminated, the agreements of the parties in the last
three sentences of Section 4.3(a) and Section 8.6 shall survive such
termination.
Section 8.3. Waiver; Amendment. Prior to the Effective Time, any
-----------------
provision of this Agreement may be: (i) waived in writing by the party
benefitted 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 except that, after the vote by the stockholders of Ironbound or RCFC, no
amendment or modification may be made that would reduce the Merger Consideration
or contravene any provision of the Delaware General Corporation Law or the
federal banking laws, rules and regulations.
Section 8.4. 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 8.5. Governing Law. This Agreement shall be governed by,
-------------
and interpreted in accordance with, the laws of the State of New York, without
regard to conflicts of laws principles.
Section 8.6. Expenses. Each party hereto will bear all expenses
--------
incurred by it in connection with this Agreement and the transactions
contemplated hereby.
Section 8.7. 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, overnight courier or
facsimile transmission (confirmed in writing) to such party at its address or
facsimile number set forth below or such other address or facsimile transmission
as such party may specify by notice to the other party hereto.
59
If to Ironbound, to:
Ironbound Bankcorp
00 Xxxxxxx Xxxxxx
Xxxxxx, Xxx Xxxxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxxxx Xxxx
Chairman of the Board
and
Xxxxxxx X. Xxxxxxxxx
President and Chief Executive Officer
and
Xxxx Xxxxxx Xxxxxx Xxxxxxxx & Xxxxxx, P.C.
0000 Xxxxxxxxx Xxxxxx, X.X.
Xxxxx 000
Xxxxxxxxxx, X.X. 00000
Xxxx X. Xxxxxx, Esq.
Xxxx Xxxxxx, Esq.
Facsimile: (000) 000-0000
If to RCFC, to:
Richmond County Financial Corp.
0000 Xxxxxxxxx Xxxxxx
Xxxxxx Xxxxxx, Xxx Xxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxxxx
Chairman of the Board and
Chief Executive Officer
60
With copies to:
Richmond County Financial Corp.
0000 Xxxxxxxxx Xxxxxx
Xxxxxx Xxxxxx, Xxx Xxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxxxx X. Xxxxxxx
Senior Vice President, Chief Financial
Officer and Secretary
and
Xxxxxxx X. Xxxxxxxx, Esq.
Xxxxxxx, Xxxxxx & Xxxxxxxx
0000 Xxxxxxxxx Xxxxxx, X.X.
Xxxxxxxxxx, X.X. 00000
Facsimile: (000) 000-0000
Section 8.8. Entire Agreement; etc. This Agreement, together with
---------------------
the Plan of Bank Merger, Option Agreement and the Disclosure Letters, 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. Except for Section 4.13 and 4.14,
which confer rights on the parties described therein, 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.
Section 8.9. Assignment. This Agreement may not be assigned by
----------
either party hereto without the written consent of the other party.
61
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by their duly authorized officers as of the 17th day of July, 1998.
RICHMOND COUNTY FINANCIAL CORP.
By: /s/ Xxxxxxx X. Xxxxxxxx
---------------------------
Xxxxxxx X. Xxxxxxxx
Chairman of the Board and
Chief Executive Officer
IRONBOUND BANKCORP, NJ
By: /s/ Xxxxxx Xxxx
---------------------------
Xxxxxx Xxxx
Chairman of the Board
62
