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EXHIBIT 2
Agreement and Plan of Merger and Reorganization
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AGREEMENT AND PLAN OF MERGER AND REORGANIZATION
BY AND AMONG
CHARTER ONE FINANCIAL, INC.
CHARTER MICHIGAN BANCORP, INC.
CHARTER ONE BANK F.S.B.
XXXXXXXXXX CORPORATION
AND
HOME BANK, F.S.B.
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April 22, 1997
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TABLE OF CONTENTS
ARTICLE I
THE MERGER AND RELATED MATTERS
1.1 Merger; Surviving Corporations and Resulting Institution...........2
1.2 Effective Time of the Merger.......................................2
1.3 Company Merger.....................................................3
1.4 Michigan Merger....................................................8
1.5 Bank Merger........................................................9
1.6 Closing............................................................9
1.7 Reservation of Right to Revise Transaction.........................9
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF COFI AND CHARTER ONE BANK
2.1 Organization......................................................10
2.2 Authorization.....................................................11
2.3 Conflicts.........................................................11
2.4 Anti-takeover Provisions Inapplicable.............................12
2.5 Capitalization....................................................12
2.6 COFI Financial Statements; Material Changes.......................12
2.7 COFI Subsidiaries.................................................13
2.8 COFI Filings......................................................14
2.9 COFI Reports......................................................14
2.10 Compliance with Laws..............................................14
2.11 Registration Statement; Proxy Statement..........................15
2.12 Litigation........................................................16
2.13 Licenses..........................................................16
2.14 Taxes.............................................................16
2.15 Insurance.........................................................17
2.16 Loans; Investments................................................18
2.17 Allowance for Possible Loan Losses................................19
2.18 COFI Benefit Plans................................................19
2.19 Compliance With Environmental Laws................................21
2.20 Contracts and Commitments.........................................22
2.21 Defaults..........................................................23
2.22 Operations Since December 31, 1996................................23
2.23 Undisclosed Liabilities...........................................23
2.24 Assets............................................................24
2.25 Indemnification...................................................24
2.26 Insider Interests.................................................24
2.27 Brokers and Finders...............................................25
2.28 Accuracy of Information...........................................25
2.29 Governmental Approvals and Other Conditions.......................25
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ARTICLE III
REPRESENTATIONS AND WARRANTIES OF XXXXXXXXXX AND HOME BANK
3.1 Organization. ......................................................25
3.2 Authorization.......................................................26
3.3 Conflicts...........................................................26
3.4 Anti-takeover Provisions Inapplicable...............................26
3.5 Capitalization and Stockholders.....................................26
3.6 Xxxxxxxxxx Financial Statements; Material Changes...................27
3.7 Xxxxxxxxxx Subsidiaries.............................................28
3.8 Xxxxxxxxxx Filings..................................................29
3.9 Xxxxxxxxxx Reports..................................................29
3.10 Compliance With Laws................................................29
3.11 Registration Statement: Proxy Statement.............................30
3.12 Litigation..........................................................31
3.13 Licenses. .........................................................31
3.14 Taxes...............................................................31
3.15 Insurance...........................................................32
3.16 Loans; Investments..................................................33
3.17 Allowance for Possible Loan Losses..................................34
3.18 Xxxxxxxxxx Benefit Plans............................................35
3.19 Compliance with Environmental Laws..................................38
3.20 Contracts and Commitments...........................................39
3.21 Defaults............................................................42
3.22 Operations Since December 31, 1996..................................42
3.23 Corporate Records...................................................44
3.24 Undisclosed Liabilities.............................................45
3.25 Assets..............................................................45
3.26 Indemnification.....................................................46
3.27 Insider Interests...................................................46
3.28 Registration Obligations............................................46
3.29 Regulatory, Tax and Accounting Matters..............................46
3.30 Brokers and Finders.................................................46
3.31 Accuracy of Information.............................................47
3.32 Fairness Opinion....................................................47
3.33 Governmental Approvals and Other Conditions.........................47
ARTICLE IV
COVENANTS OF XXXXXXXXXX
4.1 Business in Ordinary Course.........................................47
4.2 Conforming Accounting and Reserve Policies; Restructuring Expenses..51
4.3 Certain Actions.....................................................51
ARTICLE V
ADDITIONAL AGREEMENTS
5.1 Inspection of Records; Confidentiality..............................53
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5.2 Registration Statement; Stockholder Approval........................53
5.3 Agreements of Affiliates............................................54
5.4 Expenses............................................................54
5.5 Cooperation.........................................................54
5.6 Regulatory Applications.............................................55
5.7 Financial Statements and Reports....................................55
5.8 Notice..............................................................55
5.9 Press Release.......................................................56
5.10 Delivery of Supplements to Disclosure Schedules.....................56
5.11 Litigation Matters..................................................56
5.12 Tax Opinion. ......................................................56
5.13 Written Agreements with Employees; Benefits and Related Matters.....57
5.14 Reservation of Shares to Satisfy Xxxxxxxxxx Stock Options...........58
5.15 Nasdaq Listing. ...................................................58
5.16 Directors' and Officers' Indemnification Insurance..................58
5.17 Reports to the SEC..................................................59
ARTICLE VI
CONDITIONS
6.1 Conditions to the Obligations of COFI, Charter Michigan and
Charter One Bank....................................................59
6.2 Conditions to the Obligations of Xxxxxxxxxx and Home Bank...........60
6.3 Conditions to the Obligations of the Parties........................61
ARTICLE VII
TERMINATION; AMENDMENT; WAIVER
7.1 Termination.........................................................62
7.2 Liabilities and Remedies; Break-Up Fee..............................63
7.3 Survival of Agreements..............................................65
7.4 Amendment...........................................................65
7.5 Waiver..............................................................65
ARTICLE VIII
GENERAL PROVISIONS
8.1 Survival............................................................66
8.2 Notices.............................................................66
8.3 Applicable Law......................................................67
8.4 Headings, Etc.......................................................67
8.5 Severability........................................................67
8.6 Entire Agreement; Binding Effect; Non-Assignment; Counterparts......67
8.7 No Employment Solicitation..........................................68
8.8 Additional Party....................................................68
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EXHIBIT LIST
Exhibit A - Form of Voting Agreement
Exhibit B - Directors of Resulting Institution
Exhibit C - Home and Other Offices of Resulting Institution
Exhibit D - Form of Affiliate Agreement
Exhibit E - Form of Xxxx Xxxxxx Parks L.L.P. Legal Opinion
Exhibit F - Form of Silver, Xxxxxxxx & Taff, L.L.P. Legal Opinion
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AGREEMENT AND PLAN OF MERGER AND REORGANIZATION
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THIS AGREEMENT AND PLAN OF MERGER AND REORGANIZATION (this "Agreement")
dated April 22, 1997, is by and among Charter One Financial, Inc., a Delaware
corporation ("COFI"), Charter Michigan Bancorp, Inc., a Michigan corporation and
a wholly owned first-tier subsidiary of COFI ("Charter Michigan"), Charter One
Bank F.S.B., a federally chartered savings bank and a wholly owned subsidiary of
Charter Michigan ("Charter One Bank"), Xxxxxxxxxx Corporation, an Ohio
corporation ("Xxxxxxxxxx"), and Home Bank, F.S.B., a federally chartered savings
bank and a wholly owned first-tier subsidiary of Xxxxxxxxxx ("Home Bank").
A. COFI , Charter One Bank, Charter Michigan, Xxxxxxxxxx and Home Bank
wish to provide for the terms and conditions of the following described business
combinations in which a newly formed Ohio business corporation and first-tier
subsidiary of COFI ("Merger Sub") will be merged (the "Company Merger") with and
into Xxxxxxxxxx, followed immediately by the merger (the "Michigan Merger") of
Xxxxxxxxxx into Charter Michigan and the merger (the "Bank Merger") of Home Bank
with and into Charter One Bank. The Company Merger, the Michigan Merger and the
Bank Merger are collectively referred to herein as the "Merger."
B. For federal income tax purposes, it is intended that the Merger
shall qualify as a reorganization within the meaning of Section 368(a) of the
Internal Revenue Code of 1986, as amended ("Code"), and this Agreement shall
constitute a plan of reorganization pursuant to Section 368 of the Code.
C. For accounting purposes, it is intended that the Merger shall be
accounted for as a pooling of interests.
D. The parties hereto desire to make certain representations,
warranties, covenants and agreements in connection with the Merger and also to
prescribe various conditions to the Merger.
E. Concurrently with the execution and delivery of this Agreement, and
as a condition to and inducement for COFI and Charter One Bank to enter into
this Agreement, COFI and each of the directors of Xxxxxxxxxx have entered into
voting agreements in the form attached hereto as Exhibit A ("Voting
Agreements").
Accordingly, and in consideration of the representations, warranties,
covenants, agreements and conditions herein contained, the parties hereto agree
as follows:
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ARTICLE I
THE MERGER AND RELATED MATTERS
1.1 MERGER; SURVIVING CORPORATIONS AND RESULTING INSTITUTION. Subject
to the terms and conditions of this Agreement, and pursuant to the provisions of
the Michigan Business Corporation Act ("MBCA"), the Ohio General Corporation Law
("OGCL"), the Federal Deposit Insurance Act ("FDIA"), the Home Owners' Loan Act
("HOLA") and the rules and regulations promulgated under HOLA ("Thrift
Regulations"), (a) at the Effective Time (as defined in Section 1.2 hereof),
Merger Sub shall be merged with and into Xxxxxxxxxx pursuant to the terms and
conditions set forth herein, (b) immediately after the Effective Time,
Xxxxxxxxxx shall be merged with and into Charter Michigan pursuant to the terms
and conditions set forth herein and (c) thereafter at the Bank Merger Effective
Time (as defined in Section 1.2 hereof), Home Bank shall be merged with and into
Charter One Bank pursuant to the terms and conditions set forth herein. Upon the
consummation of the Company Merger, the separate corporate existence of Merger
Sub shall cease and Xxxxxxxxxx shall continue as the surviving corporation under
the laws of the State of Ohio. Upon consummation of the Michigan Merger, the
separate corporate existence of Xxxxxxxxxx shall cease and Charter Michigan
shall continue as the surviving corporation under the laws of the State of
Michigan. Upon consummation of the Bank Merger, the separate corporate existence
of Home Bank shall cease and Charter One Bank shall continue as the resulting
institution under the laws of the United States of America. The name of
Xxxxxxxxxx as the surviving corporation of the Company Merger shall remain
"Xxxxxxxxxx Corporation". From and after the Effective Time, Xxxxxxxxxx, as the
surviving corporation of the Company Merger, shall possess all of the properties
and rights and be subject to all of the liabilities and obligations of Merger
Sub and Xxxxxxxxxx, all as more fully described in the OGCL. The name of Charter
Michigan as the surviving corporation of the Michigan Merger shall remain
"Charter Michigan Bancorp, Inc." From and after the effective time of the
Michigan Merger, Charter Michigan, as the surviving corporation of the Michigan
Merger, shall possess all of the properties and rights and be subject to all of
the liabilities and obligations of Charter Michigan and Xxxxxxxxxx, all as more
fully described in the MBCA and OGCL. The name of Charter One Bank, as the
resulting institution of the Bank Merger, shall remain "Charter One Bank
F.S.B.". From and after the Bank Merger Effective Time, Charter One Bank, as the
resulting institution of the Bank Merger, shall possess all of the properties
and rights and be subject to all of the liabilities and obligations of Charter
One Bank and Home Bank (including any liquidation account of Home Bank
established in connection with its conversion from mutual to stock form), all as
more fully described in the Thrift Regulations.
1.2 EFFECTIVE TIME OF THE MERGER. As soon as practicable after each of
the conditions set forth in Article VI hereof have been satisfied or waived, the
parties will file, or cause to be filed, with the Ohio Secretary of State and
the Michigan Department of Commerce and the Office of Thrift Supervision ("OTS")
such certificates of merger, articles of combination and other documents as they
may deem necessary or appropriate for the Company Merger, the Michigan Merger
and the Bank Merger, which certificates of merger,
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articles of combination and other documents shall in each case be in the form
required by and executed in accordance with the applicable provisions of the
OGCL, MCBA and the Thrift Regulations, respectively. The Company Merger shall
become effective at the time the certificate of merger for such merger is filed
with the Ohio Secretary of State ("Effective Time"). The Michigan Merger shall
become effective at the time the certificate(s) of merger for such merger are
filed with the Ohio Secretary of State and the Michigan Department of Commerce.
The Bank Merger shall become effective at the time the articles of combination
for such merger are endorsed by the Secretary of the OTS pursuant to the Thrift
Regulations ("Bank Merger Effective Time"). The parties shall cause the Company
Merger to become effective immediately prior to the Michigan Merger, and the
Michigan Merger to become effective immediately prior to the Bank Merger.
1.3 COMPANY MERGER.
(a) CONVERSION OF XXXXXXXXXX STOCK. At the Effective
Time:
(i) Each share of common stock of Xxxxxxxxxx, $.01
par value per share (the "Xxxxxxxxxx Common Stock"), issued
and outstanding immediately prior thereto (except for
Dissenting Shares, if applicable, as defined in Section 1.3(d)
hereof) shall, by virtue of the Company Merger and without any
action on the part of the holder thereof, but subject to
Section 1.3(f) hereof, be converted into the right to receive
shares common stock of COFI, par value $.01 per share ("COFI
Common Stock") at the Exchange Ratio (as defined in Section
1.3(b)), including the corresponding number of rights
associated with the COFI Common Stock pursuant to the Rights
Agreement dated November 20, 1989, as amended on May 26, 1995,
between COFI and The First National Bank of Boston as Rights
Agent.
Notwithstanding any other provision of this
Agreement, any shares of Xxxxxxxxxx Common Stock issued and
outstanding immediately prior to the Effective Time which are
then owned beneficially or of record by COFI, Charter One
Bank, Xxxxxxxxxx, Home Bank or by any direct or indirect
Subsidiary (as hereinafter defined) of any of them or held in
the treasury of Xxxxxxxxxx (other than any shares of
Xxxxxxxxxx Common Stock held (A) directly or indirectly in
trust accounts, managed accounts and the like, or otherwise
held in a fiduciary capacity, that are beneficially owned by
third parties or (B) in respect of a debt previously
contracted) shall, by virtue of the Company Merger, be
canceled without payment of any consideration therefor and
without any conversion thereof.
(ii) Each share of Merger Sub common stock issued and
outstanding immediately prior to the Effective Time shall be
automatically converted into an identical number of issued and
outstanding shares of Xxxxxxxxxx common stock after the
Effective Time.
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(iii) The holders of certificates formerly
representing shares of Xxxxxxxxxx Common Stock shall cease to
have any rights as stockholders of Xxxxxxxxxx, except such
rights, if any, as they may have pursuant to the OGCL. Except
as provided above, until certificates representing shares of
Xxxxxxxxxx Common Stock are surrendered for exchange, the
certificates shall, after the Effective Time, represent for
all purposes only the right to receive the number of whole
shares of COFI Common Stock into which such shares of
Xxxxxxxxxx Common Stock shall have been converted by the
Company Merger as provided above and the right to receive the
cash value of any fraction of a share of COFI Common Stock as
provided below (collectively, the "Merger Consideration").
(b) EXCHANGE RATIO.
(i) If the Average COFI Stock Price (as hereinafter
defined) is equal to or greater than $41.09 and less than or
equal to $55.60, then the Exchange Ratio shall be (rounded to
the fourth decimal place) (A) $27.00, divided by (B) the
Average COFI Stock Price. The "Average COFI Stock Price" means
the average (rounded down to the nearest whole cent) of the
closing sale price of one share of COFI Common Stock on the
Nasdaq National Market for the 20 consecutive full trading
days ending on the fifth business day immediately prior to the
Closing Date.
(ii) If the Average COFI Stock Price is less than
$41.09 but equal to or greater than $38.05, then the Exchange
Ratio shall be .6571.
(iii) If the Average COFI Stock Price is less than
$38.05 but equal to or greater than $36.55, then the Exchange
Ratio shall be (rounded to the fourth decimal place) (A)
$25.00, divided by (B) the Average COFI Stock Price.
(iv) If the Average COFI Stock Price is less than
$36.55, then subject to the provisions of Section 7.1(g), the
Exchange Ratio shall be .6840.
(v) If the Average COFI Stock Price is greater than
$55.60, then the Exchange Ratio shall be .4856.
(vi) If, subsequent to the date of this Agreement but
prior to the Effective Time, the outstanding shares of COFI
Common Stock shall, through a reclassification,
recapitalization, stock dividend, stock split or reverse stock
split have been increased, decreased, changed into or
exchanged for a different number or kind of shares or
securities, appropriate adjustment will be made to the
Exchange Ratio.
(c) RESERVATION OF SHARES. Prior to the Effective Time, the
Board of Directors of COFI shall reserve for issuance a sufficient
number of shares of COFI
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Common Stock for the purpose of issuing its shares to the stockholders
of Xxxxxxxxxx in accordance herewith.
(d) DISSENTING SHARES. Any shares of Xxxxxxxxxx Common Stock
held by a holder who dissents from the Company Merger in accordance
with Section 1701.85 of the OGCL shall be herein called "Dissenting
Shares". Notwithstanding any other provision of this Agreement, any
Dissenting Shares shall not, after the Effective Time, be entitled to
vote for any purpose or receive any dividends or other distributions
and shall be entitled only to such rights as are afforded in respect of
Dissenting Shares pursuant to the OGCL.
(e) EXCHANGE OF XXXXXXXXXX COMMON STOCK.
Effective Time, holders of record of certificates formerly
representing shares of Xxxxxxxxxx Common Stock
("Certificates") shall be instructed to tender such
Certificates to an independent exchange agent to be selected
by COFI (the "Exchange Agent") pursuant to a letter of
transmittal that COFI shall deliver or cause to be delivered
to such holders. Such letter of transmittal shall specify that
risk of loss and title to Certificates shall pass only upon
acceptance of such Certificates by COFI or the Exchange Agent.
(ii) After the Effective Time, each holder of a
Certificate that surrenders such Certificate to COFI or the
Exchange Agent will, upon acceptance thereof by COFI or the
Exchange Agent, be entitled to the Merger Consideration
payable in respect of the shares represented thereby.
(iii) COFI or the Exchange Agent shall accept
Certificates upon compliance with such reasonable terms and
conditions as COFI or the Exchange Agent may impose to effect
an orderly exchange thereof in accordance with customary
exchange practices. Certificates shall be appropriately
endorsed or accompanied by such instruments of transfer as
COFI or the Exchange Agent may reasonably require.
(iv) Each outstanding Certificate, other than those
representing Dissenting Shares, shall until duly surrendered
to COFI or the Exchange Agent be deemed to evidence the right
to receive the Merger Consideration.
(v) After the Effective Time, holders of Certificates
shall cease to have rights with respect to the Xxxxxxxxxx
Common Stock previously represented by such Certificates, and
their sole rights (other than the holders of Certificates
representing Dissenting Shares) shall be to exchange such
Certificates for the Merger Consideration. At the Effective
Time, Xxxxxxxxxx shall deliver a certified copy of a list of
its stockholders to COFI or the
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Exchange Agent. After the Effective Time, there shall be no
further transfer on the records of Xxxxxxxxxx of Certificates,
and if such Certificates are presented to Xxxxxxxxxx for
transfer, they shall be canceled against delivery of the
Merger Consideration. COFI shall not be obligated to deliver
the Merger Consideration to any holder of Xxxxxxxxxx Common
Stock until such holder surrenders the Certificates as
provided herein. No dividends declared will be remitted to any
person entitled to receive COFI Common Stock under this
Agreement until such person surrenders the Certificate
representing the right to receive such COFI Common Stock, at
which time such dividends on whole shares of COFI Common Stock
with a record date on or after the Effective Time shall be
remitted to such person, without interest and less any taxes
that may have been imposed thereon. Certificates surrendered
for exchange by any person constituting an "affiliate" of
Xxxxxxxxxx for purposes of Rule 145 under the Securities Act
of 1933 and the rules and regulations thereunder (the
"Securities Act") shall not be exchanged for certificates
representing COFI Common Stock until COFI has received a
written agreement from such person as specified in Section
5.3. Neither the Exchange Agent nor any party to this
Agreement nor any affiliate thereof shall be liable to any
holder of Xxxxxxxxxx Common Stock represented by any
Certificate for any consideration paid to a public official
pursuant to applicable abandoned property, escheat or similar
laws. COFI and the Exchange Agent shall be entitled to rely
upon the stock transfer books of Xxxxxxxxxx to establish the
identity of those persons entitled to receive consideration
specified in this Agreement, which books shall be conclusive
with respect thereto. In the event of a dispute with respect
to ownership of stock represented by any Certificate, COFI or
the Exchange Agent shall be entitled to deposit any
consideration in respect thereof in escrow with an independent
third party and thereafter be relieved with respect to any
claims thereto.
(vi) If the Merger Consideration is to be issued to a
person other than a person in whose name a surrendered
Certificate is registered, it shall be a condition of issuance
that the surrendered Certificate shall be properly endorsed or
otherwise in proper form for transfer and that the person
requesting such issuance shall pay to COFI or the Exchange
Agent any required transfer or other taxes or establish to the
satisfaction of COFI or the Exchange Agent that such tax has
been paid or is not applicable.
(vii) In the event any Certificate shall have been
lost, stolen or destroyed, the owner of such lost, stolen or
destroyed Certificate shall deliver to COFI or the Exchange
Agent an affidavit stating such fact, in form satisfactory to
COFI, and, at COFI's discretion, a bond in such reasonable sum
as COFI or the Exchange Agent may direct as indemnity against
any claim that may be made against COFI or Xxxxxxxxxx or its
successor or any other party with respect to the Certificate
alleged to have been lost, stolen or destroyed. Upon
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such delivery, the owner shall have the right to receive the
Merger Consideration with respect to the shares represented by
the lost, stolen or destroyed Certificate.
(f) NO FRACTIONAL SHARES. Notwithstanding any other provision
of this Agreement, neither certificates nor scrip for
fractional shares of COFI Common Stock shall be issued in the
Company Merger. Each holder who otherwise would have been
entitled to a fraction of a share of COFI Common Stock shall
receive in lieu thereof cash (without interest) in an amount
determined by multiplying the fractional share interest to
which such holder would otherwise be entitled by the COFI
Share Price on the last business day preceding the Effective
Time. The "COFI Share Price" shall mean the closing sale price
(rounded down to the nearest whole cent) of one share of COFI
Common Stock as reported on the Nasdaq National Market. No
such holder shall be entitled to dividends, voting rights or
any other rights in respect of any fractional share interest.
(g) STOCK OPTIONS. The Home Bank Stock Compensation Plan
including Plans I and II thereto ("1985 Option Plan") and the
Xxxxxxxxxx 1995 Stock Option Plan ("1995 Option Plan") and each option
granted thereunder outstanding on the date hereof and remaining
outstanding immediately prior to the Effective Time shall, at the
Effective Time, be assumed by COFI and each such option shall be
converted automatically into an option to purchase shares of COFI
Common Stock in an amount and at an exercise price determined as
provided below (and otherwise subject to the terms of the 1985 Option
Plan or 1995 Option Plan, whichever is applicable):
(i) the number of shares of COFI Common Stock to be
subject to the new option shall be equal to the product of the
number of shares of Xxxxxxxxxx Common Stock subject to the
original option and the Exchange Ratio, provided that any
fractional share of COFI Common Stock resulting from such
multiplication shall be rounded down to the nearest share; and
(ii) the exercise price per share of COFI Common
Stock under the new option shall be equal to the exercise
price per share of Xxxxxxxxxx Common Stock under the original
option divided by the Exchange Ratio, provided that such
exercise price shall be rounded down to the nearest cent.
The adjustment provided herein with respect to any options
which are "incentive stock options" (as defined in Section 422 of the
Code) shall be and is intended to be effected in a manner which is
consistent with Section 424(a) of the Code. The duration and other
terms of the new option shall be the same as the original option,
except that all references to Xxxxxxxxxx shall be deemed to be
references to COFI.
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(h) ARTICLES OF INCORPORATION AND CODE OF REGULATIONS OF THE
SURVIVING CORPORATION. The Articles of Incorporation and Code of
Regulations of Xxxxxxxxxx, as in effect immediately prior to the
Effective Time, shall be the Articles of Incorporation and Code of
Regulations of Xxxxxxxxxx, as the surviving corporation of the Company
Merger, until either is thereafter amended in accordance with
applicable law.
(i) DIRECTORS AND OFFICERS OF THE SURVIVING CORPORATION. The
directors and officers of Merger Sub immediately prior to the Effective
Time shall be the directors and officers of Xxxxxxxxxx, as the
surviving corporation of the Company Merger, until their respective
successors shall be duly elected and qualified or otherwise duly
selected.
1.4 MICHIGAN MERGER.
(a) CANCELLATION OF XXXXXXXXXX COMMON STOCK. At the effective
time of the Michigan Merger, each share of common stock of Xxxxxxxxxx
issued and outstanding immediately prior thereto shall, by virtue of
the Michigan Merger, be canceled. No new shares of capital stock or
other securities or obligations of Charter Michigan shall be issued
with respect to or in exchange for such canceled shares, and such
canceled shares of Xxxxxxxxxx common stock shall not be converted into
capital stock or other securities or obligations of Charter Michigan.
(b) ARTICLES OF INCORPORATION AND BYLAWS OF THE SURVIVING
CORPORATION. The Articles of Incorporation and Bylaws of Charter
Michigan, as in effect immediately prior to the Effective Time, shall
be the Articles of Incorporation and Bylaws of Charter Michigan, as the
surviving corporation of the Michigan Merger, until either is
thereafter amended in accordance with applicable law.
(c) DIRECTORS AND OFFICERS OF THE SURVIVING CORPORATION. The
directors and officers of Charter Michigan immediately prior to the
Effective Time shall be the directors and officers of Charter Michigan,
as the surviving corporation of the Michigan Merger, until their
respective successors shall be duly elected and qualified or otherwise
duly selected.
(d) SERVICE OF PROCESS. At the effective time of the Michigan
Merger, Charter Michigan, as the surviving corporation of the Michigan
Merger, consents to be sued and served with process in the State of
Ohio and irrevocably appoints the Secretary of State of the State of
Ohio as its agent to accept service of process in any proceeding in the
State of Ohio to enforce against it any obligation of Xxxxxxxxxx or to
enforce the right of the holders of Dissenting Shares.
(e) ADDITIONAL FILING REQUIREMENTS. Charter Michigan, as the
surviving corporation of the Michigan Merger, does not intend to
transact business in the State of Ohio and does not desire to be
licensed to transact business in the State of Ohio.
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Accordingly, at the time a certificate of merger relating to the
Michigan Merger is filed with the Secretary of State of the State of
Ohio, it shall be accompanied by the affidavits, receipts, certificates
or other evidence required by Division (H) of Section 1701.86 of the
OGCL with respect to Xxxxxxxxxx.
(f) PRINCIPAL OFFICE. The location of the principal office of
Charter Michigan, as the surviving corporation of the Michigan Merger,
in the State of Michigan is 00000 Xxxxxxxx Xxxxxx, 0xx Xxxxx, Xxxxxxxx,
Xxxxxxxx 00000..
1.5 BANK MERGER.
(a) CANCELLATION OF HOME BANK COMMON STOCK. At the Bank Merger
Effective Time, each share of common stock of Home Bank ("Home Bank
Common Stock") issued and outstanding immediately prior thereto shall,
by virtue of the Bank Merger, be canceled. No new shares of capital
stock or other securities or obligations of Charter One Bank shall be
issued with respect to or in exchange for such canceled shares, and
such canceled shares of Home Bank Common Stock shall not be converted
into capital stock or other securities or obligations of Charter One
Bank.
(b) CHARTER AND BYLAWS OF THE RESULTING INSTITUTION. The
charter and bylaws of Charter One Bank, as in effect immediately prior
to the Bank Merger Effective Time, shall, without any change, be the
charter and bylaws of Charter One Bank, as the resulting institution of
the Bank Merger, until either is thereafter amended in accordance with
applicable law.
(c) DIRECTORS OF THE RESULTING INSTITUTION. The directors of
Charter One Bank, as the resulting institution of the Bank Merger,
shall be those persons listed in Exhibit B to this Agreement. Such
directors shall continue in office until their successors are duly
elected and qualified or otherwise duly selected.
(d) OFFICES OF THE RESULTING INSTITUTION. The home and other
offices of Charter One Bank, as the resulting institution of the Bank
Merger, shall be as listed in Exhibit C to this Agreement.
1.6 CLOSING. Subject to the provisions of Article VI hereof, the
closing of the transactions contemplated by this Agreement (the "Closing") shall
take place as soon as practicable after satisfaction or waiver of all of the
conditions to Closing, and shall be at 10:00 a.m. on the first business day of
the first calendar month following the satisfaction of all of the conditions to
Closing, at the executive offices of COFI or at such other date, time and
location as is mutually agreed to by COFI and Xxxxxxxxxx, but in no event prior
to September 1, 1997. The date on which the Closing actually occurs is herein
referred to as the "Closing Date".
1.7 RESERVATION OF RIGHT TO REVISE TRANSACTION. After consultation
with Xxxxxxxxxx,
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COFI shall have the unilateral right to change the method of effecting the
Merger (including without limitation the provisions of this Article I), to the
extent permitted by applicable law and to the extent it deems such change to be
desirable, provided, however, that no such change shall (a) alter or change the
amount or kind of the Merger Consideration or the treatment of stock options as
set forth in Section 1.3(g) hereof, (b) diminish the benefits to be received by
the directors, officers or employees of Xxxxxxxxxx and Home Bank as set forth in
this Agreement or in any other agreements between the parties made in connection
with this Agreement, (c) materially impede or delay the consummation of the
Company Merger or (d) adversely affect the tax treatment of Xxxxxxxxxx
stockholders as a result of receiving the Merger Consideration. COFI may
exercise this right of revision by giving written notice thereof in the manner
provided in Section 8.2 of this Agreement.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF COFI AND CHARTER ONE BANK
COFI and Charter One Bank jointly and severally represent and warrant
to Xxxxxxxxxx and Home Bank that:
2.1 ORGANIZATION.
(a) COFI is a corporation duly organized, validly existing and
in good standing under the laws of the State of Delaware and has all
requisite power and authority, corporate and otherwise, to own, operate
and lease its assets and properties and to carry on its business
substantially as it has been and is now being conducted. COFI is duly
qualified to do business and is in good standing in each jurisdiction
where the character of the assets or properties owned or leased by it
or the nature of the business transacted by it requires that it be so
qualified, except where the failure to so qualify would not have a
Material Adverse Effect (as defined in Section 2.1(b) hereof)) on COFI
or its ability to consummate the transactions contemplated herein. COFI
has all requisite corporate power and authority to enter into this
Agreement and, subject to the receipt of all requisite regulatory
approvals and the expiration of applicable waiting periods, to
consummate the transactions contemplated hereby. COFI is duly
registered as a savings and loan holding company under HOLA.
(b) As used in this Agreement, the term "Material Adverse
Effect" with respect to COFI or Xxxxxxxxxx means any condition, event,
change or occurrence that has or may reasonably be expected to have a
material adverse effect on the condition (financial or otherwise),
properties, business, operations, assets or deposit liabilities of such
entity taken together with its affiliated entities on a consolidated
basis; it being understood that a Material Adverse Effect shall not
include: (i) a change with respect to, or effect on, such entity and
its Subsidiaries resulting from a change in law, rule, regulation,
generally accepted accounting principles or regulatory accounting
principles, as such would apply to the financial statements of such
entity on a
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consolidated basis; (ii) a change with respect to, or effect on, such
entity and its Subsidiaries resulting from expenses (such as legal,
accounting and investment bankers' fees) incurred in connection with
this Agreement; (iii) a change with respect to, or effect on, such
entity and its Subsidiaries resulting from any other matter affecting
depository institutions generally including, without limitation,
changes in general economic conditions and changes in prevailing
interest and deposit rates; or (iv) in the case of Xxxxxxxxxx, any
financial change resulting from adjustments taken pursuant to Section
4.2 hereof.
2.2 AUTHORIZATION. The execution, delivery and performance of this
Agreement and the consummation of the transactions contemplated hereby have been
duly approved and authorized by the Boards of Directors of COFI, Charter
Michigan and Charter One Bank, and no other corporate action on their part is
required to be taken. This Agreement has been duly executed and delivered by
COFI, Charter Michigan and Charter One Bank and constitutes the valid and
binding obligation of each of them and is enforceable against each of them,
except to the extent that enforceability thereof may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws or equitable
principles or doctrines.
2.3 CONFLICTS. Subject to the second sentence of this Section 2.3, the
execution and delivery of this Agreement does not, and the consummation of the
transactions contemplated hereby will not, conflict with or result in any
violation, breach or termination of, or default or loss of a material benefit
under, or permit the acceleration of any obligation under, or result in the
creation of any material lien, charge or encumbrance on any of the property or
assets under, any provision of the Certificate of Incorporation or Bylaws of
COFI or similar documents of any COFI Subsidiary or any mortgage, indenture,
lease, agreement or other instrument, permit, concession, grant, franchise,
license, judgment, order, decree, statute, law, ordinance, rule or regulation
applicable to COFI or any COFI Subsidiary or their respective properties, other
than any such conflicts, violations or defaults which (i) will be cured or
waived prior to the Effective Time; (ii) are not material to the conduct of
business or operations of COFI or any COFI Subsidiary; or (iii) are disclosed in
Section 2.3 of that certain confidential writing delivered by COFI to Xxxxxxxxxx
within two business days prior to the date hereof (the "COFI Disclosure
Schedule"). No consent, approval, order or authorization of, or registration,
declaration or filing with, any federal or state governmental authority is
required by or with respect to COFI, Charter Michigan or Charter One Bank, in
connection with the execution and delivery of this Agreement or the consummation
by them of the transactions contemplated hereby except for: (a) the filing of
all required regulatory applications by COFI, Xxxxxxxxxx and/or their respective
Subsidiaries for approval of the transactions contemplated by this Agreement;
(b) the filing by COFI of the registration statement relating to the COFI Common
Stock to be issued pursuant to this Agreement ("Registration Statement") with
the United States Securities and Exchange Commission ("SEC") and various blue
sky authorities, which Registration Statement shall include the prospectus/proxy
statement ("Proxy Statement") for use in connection with the Xxxxxxxxxx
stockholders' meeting to approve the Company Merger ("Xxxxxxxxxx Stockholders'
Meeting"); (c) the filing of certificates of merger with respect to the Company
Merger and the Michigan
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Merger with the Ohio Secretary of State and the Michigan Department of Commerce
and the filing of additional documents with the State of Ohio as described in
Section 1.4(e); (d) the filing of the articles of combination with the OTS
relating to the Bank Merger; (e) any filings, approvals or no-action letters
with or from state securities authorities; and (f) any anti-trust filings,
consents, waivers or approvals.
2.4 ANTI-TAKEOVER PROVISIONS INAPPLICABLE. To the best knowledge of
COFI and Charter One Bank, no "business combination," "moratorium," "control
share" or other state anti-takeover statute or regulation (i) applies to the
Company Merger, (ii) prohibits or restricts the ability of COFI, Merger Sub,
Charter Michigan or Charter One Bank to perform its obligations under this
Agreement or its ability to consummate the transactions contemplated hereby,
(iii) would have the effect of invalidating or voiding this Agreement or any
provision hereof, or (iv) would subject Xxxxxxxxxx or Home Bank to any material
impediment or condition in connection with the exercise of any of its rights
under this Agreement.
2.5 CAPITALIZATION.
(a) As of the date hereof, the authorized capital stock of
COFI consists of (i) 180,000,000 shares of COFI Common Stock, $0.01 par
value per share, of which, as of February 28, 1997, 46,330,703 shares
were issued and outstanding and (ii) 20,000,000 shares of preferred
stock, $0.01 par value per share, of which none are issued and
outstanding. All of the issued and outstanding shares of COFI Common
Stock have been, and all of the shares of COFI Common Stock to be
issued in the Company Merger will be, at the Effective Time, duly and
validly authorized and issued, and are or will be, as the case may be,
fully paid and non-assessable. None of the outstanding shares of COFI
Common Stock has been issued in violation of any preemptive rights of
the current or past stockholders of COFI and none of the outstanding
shares of COFI Common Stock is or will be entitled to any preemptive
rights in respect of the Company Merger or any of the other
transactions contemplated by this Agreement.
(b) As of March 31, 1997, COFI does not have outstanding any
securities or rights convertible into or exchangeable for COFI Common
Stock or any commitments, contracts, understandings or arrangements by
which COFI is or may be bound to issue additional shares of COFI Common
Stock, except pursuant to employee and director stock options or as
otherwise set forth in Section 2.5 of the COFI Disclosure Schedule.
2.6 COFI FINANCIAL STATEMENTS; MATERIAL CHANGES. COFI has heretofore
delivered to Xxxxxxxxxx its audited consolidated financial statements for
calendar years ended December 31, 1996 and December 31, 1995 (together the "COFI
Financial Statements"). The COFI Financial Statements (x) are true and correct
in all material respects; (y) have been prepared in accordance with generally
accepted accounting principles applied on a consistent basis during the periods
involved (except as may be indicated in the notes thereto); and (z) fairly
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present the consolidated financial position of COFI as of the dates thereof and
the consolidated results of its operations, shareholders' equity, cash flows and
changes in financial position for the periods then ended. Since December 31,
1996 to the date hereof, COFI and the COFI Subsidiaries have not undergone or
suffered any changes in their respective condition (financial or otherwise),
properties, business or operations which have been, in any case or in the
aggregate, materially adverse to COFI on a consolidated basis except as
disclosed in Section 2.6 of the COFI Disclosure Schedule. No facts or
circumstances have been discovered from which it reasonably appears that there
is a significant risk and reasonable probability that COFI will suffer or
experience a Material Adverse Effect.
2.7 COFI SUBSIDIARIES.
(a) All of the COFI Subsidiaries as of the date of this
Agreement are listed in Section 2.7 of the COFI Disclosure Schedule.
COFI owns directly or indirectly all of the issued and outstanding
shares of capital stock of the COFI Subsidiaries. No capital stock of
any of the COFI Subsidiaries is, or may become required to be, issued
(other than to COFI or another COFI Subsidiary) by reason of any
options, warrants, scrip, right to subscribe to, calls, or commitments
of any character whatsoever relating to, or securities or rights
convertible into or exchangeable for, shares of the capital stock of
any COFI Subsidiary. All of the shares of capital stock of each COFI
Subsidiary held by COFI or a COFI Subsidiary are fully paid and
non-assessable and are owned free and clear of any claim, lien or
encumbrance, except as disclosed in Section 2.7 of the COFI Disclosure
Schedule.
(b) Each COFI Subsidiary is either a savings bank or a
corporation and is duly organized, validly existing and in good
standing under the laws of the jurisdiction in which it is incorporated
or organized, and is duly qualified to do business and in good standing
in each jurisdiction where the character of the assets or properties
owned or leased by it or the nature of the business transacted by it
requires it to be so qualified, except where the failure to so qualify,
either individually or in the aggregate, would not have a Material
Adverse Effect on COFI or the ability of COFI, Merger Sub, Charter
Michigan or Charter One Bank to consummate the transactions
contemplated herein. Each COFI Subsidiary has the corporate power and
authority necessary for it to own, operate or lease its assets and
properties and to carry on its business as it has been and is now being
conducted.
(c) For purposes of this Agreement, an "COFI Subsidiary" or a
"Subsidiary" of COFI shall mean each corporation, savings bank and
other entity in which COFI owns or controls directly or indirectly 10%
or more of the outstanding equity securities; provided, however, there
shall not be included any such entity acquired in good faith through
foreclosure, or any such entity to the extent that the equity
securities of such entity are owned or controlled in a bona fide
fiduciary capacity.
(d) Charter One Bank is a member in good standing of the
Federal Home
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Loan Bank System. All eligible deposit accounts issued by Charter One
Bank are insured by the Federal Deposit Insurance Corporation ("FDIC")
through the Savings Association Insurance Fund ("SAIF") to the full
extent permitted under applicable law. Charter One Bank is, and at all
times since June 1, 1990 has been, a "domestic building and loan
association" as defined in Section 7701(a)(19) of the Code and a
"qualified thrift lender" as defined in Section 10(m) of HOLA.
2.8 COFI FILINGS. COFI has previously made available, or will make
available prior to the Effective Time, to Xxxxxxxxxx true and correct copies of
its (i) proxy statements relating to all meetings of its stockholders (whether
special or annual) during calendar years 1995, 1996, and 1997 and (ii) all other
reports, as amended, or filings, as amended, required to be filed under the
Securities and Exchange Act of 1934, as amended (the "Securities Exchange Act")
by COFI with the SEC since January 1, 1995 including without limitation on Forms
10-K, 10-Q and 8-K.
2.9 COFI REPORTS. Each of COFI and the COFI Subsidiaries has filed, and
will continue to file, all reports and statements, together with any amendment
required to be made with respect thereto, that it was, or will be required to
file with the SEC, the FDIC, the OTS, the National Association of Securities
Dealers ("NASD") and other applicable thrift, securities and other regulatory
authorities (except filings which are not material). As of their respective
dates (and without giving effect to any amendments or modifications filed after
the date of this Agreement with respect to reports and documents filed before
the date of this Agreement), each of such reports and documents, including the
financial statements, exhibits, and schedules thereto, complied in all material
respects with all of the statutes, rules and regulations enforced or promulgated
by the authority with which they were filed and did not contain any untrue
statement of a material fact or omit to state any material fact necessary in
order to make the statements made therein, in light of the circumstances under
which they were made, not misleading. Other than normal examinations conducted
by the Internal Revenue Service, state and local taxing authorities, the OTS or
the FDIC in the regular course of the business of COFI or the COFI Subsidiaries,
no federal, state or local governmental agency, commission or other entity has
initiated any proceeding or, to the best knowledge of COFI and Charter One Bank,
investigation into the business or operations of COFI or the COFI Subsidiaries
within the past two (2) years except as set forth in Section 2.9 of the COFI
Disclosure Schedule. There is no unresolved violation, criticism or exception by
the SEC, OTS, FDIC or other agency, commission or entity with respect to any
report or statement referred to herein that is material to COFI or any COFI
Subsidiary on a consolidated basis.
2.10 COMPLIANCE WITH LAWS.
(a) Except as disclosed in Section 2.10 of the COFI Disclosure
Schedule, the businesses of COFI and the COFI Subsidiaries are not
being conducted in violation of any law, ordinance or regulation of any
governmental entity, including, without limitation, any laws affecting
financial institutions (including those pertaining to the Bank Secrecy
Act, the investment of funds, the lending of money, the collection of
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interest and the extension of credit), federal and state securities
laws, laws and regulations relating to financial statements and
reports, truth-in-lending, truth-in-savings, usury, fair credit
reporting, consumer protection, occupational safety, fair employment
practices, fair labor standards and laws and regulations relating to
employees and employee benefits, and any statutes or ordinances
relating to the properties occupied or used by COFI or any COFI
Subsidiary, except for possible violations which either singly or in
the aggregate do not and, insofar as reasonably can be foreseen in the
future, will not have a Material Adverse Effect on COFI.
(b) Except as disclosed in Section 2.10 of the COFI Disclosure
Schedule, no investigation or review by any governmental entity with
respect to COFI or any COFI Subsidiary is pending or, to the best
knowledge of COFI and Charter One Bank, threatened, nor has any
governmental entity indicated to COFI or any COFI Subsidiary an
intention to conduct the same, other than normal thrift regulatory
examinations and those the outcome of which will not have a Material
Adverse Effect on COFI.
(c) COFI and each of the COFI Subsidiaries, where applicable,
is in substantial compliance with the applicable provisions of the
Community Reinvestment Act of 1977 and the regulations promulgated
thereunder. As of the date of this Agreement, neither COFI nor Charter
One Bank has been advised of the existence of any fact or circumstance
or set of facts or circumstances which, if true, would cause COFI or
any of the COFI Subsidiaries to fail to be in substantial compliance
with such provisions. No COFI Subsidiary that is a financial
institution has received a rating from an applicable regulatory
authority which is less than "satisfactory."
2.11 REGISTRATION STATEMENT; PROXY STATEMENT. The information to be
supplied by COFI for inclusion in the Registration Statement will not, at the
time the Registration Statement is declared effective and at the Effective Time,
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 the light of the circumstances under which they were made, not
misleading. The information to be supplied by COFI for inclusion in the Proxy
Statement will not, on the date the Proxy Statement (or any amendment thereof or
supplement thereto) is first mailed to Xxxxxxxxxx'x stockholders, at the time of
the Xxxxxxxxxx Stockholders' Meeting, and at the Effective Time, contain any
statement that, in light of the circumstances under which it is made, is false
or misleading with respect to any material fact, omits to state any material
fact necessary in order to make the statements made therein not false or
misleading, or omits to state any material fact necessary to correct any
statement in any earlier communication with respect to the solicitation of
proxies for the Xxxxxxxxxx Stockholders' Meeting that has become false or
misleading. If, at any time prior to the Effective Time, any event relating to
COFI or any of its affiliates, officers, or directors is discovered by COFI that
should be set forth in an amendment to the Registration Statement or a
supplement to the Proxy Statement, COFI will promptly inform Xxxxxxxxxx and such
amendment or supplement will be promptly filed with the SEC and, as required by
law, disseminated to the stockholders of Xxxxxxxxxx. Notwithstanding the
foregoing, COFI makes
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no representation or warranty with respect to any information supplied by
Xxxxxxxxxx that is contained in any of the Registration Statement or the Proxy
Statement. The Proxy Statement and the Registration Statement will (with respect
to COFI) comply in all material respects as to form and substance with the
requirements of the Exchange Act, the Securities Act, and the rules and
regulations thereunder.
2.12 LITIGATION. Except as disclosed in Section 2.12 of the COFI
Disclosure Schedule, there is no suit, action, investigation or proceeding,
legal, quasi-judicial, administrative or otherwise, pending or, to the best
knowledge of COFI and Charter One Bank threatened, against or affecting COFI or
any COFI Subsidiary, or any of their respective officers, directors, employees
or agents, in their capacities as such, which if adversely determined, would
have a Material Adverse Effect on COFI or which would materially affect the
ability of COFI, Merger Sub, Charter Michigan or Charter One Bank to consummate
the transactions contemplated herein or which is seeking to enjoin consummation
of the transactions provided for herein or to obtain other relief in connection
with this Agreement or the transactions contemplated hereby, nor is there any
judgment, decree, injunction, rule or order of any court, governmental
department, commission agency, instrumentality or arbitrator outstanding against
COFI or any COFI Subsidiary or any of their respective officers, directors,
employees or agents, in their capacities as such, having, or which, insofar as
reasonably can be foreseen in the future, would have any such effect.
2.13 LICENSES. COFI and the COFI Subsidiaries hold all licenses,
certificates, permits, franchises and all patents, trademarks, service marks,
trade names, copyrights or rights thereto, and required authorizations,
approvals, consents, licenses, clearances and orders or registrations with all
appropriate federal, state or other authorities that are material to the conduct
of their respective businesses as now conducted and as presently proposed to be
conducted.
2.14 TAXES.
(a) Except as disclosed in Section 2.14 of the COFI Disclosure
Schedule, COFI and the COFI Subsidiaries have each timely filed all tax
and information returns required to be filed and have paid (or COFI has
paid on behalf of its Subsidiaries), or have accrued on their
respective books and set up an adequate reserve for the payment of, all
taxes reflected on such returns or required to be paid in respect of
the periods covered by such returns and have accrued on their
respective books and set up an adequate reserve for the payment of all
income and other taxes anticipated to be payable in respect of periods
through the end of the calendar month next preceding the date hereof.
Neither COFI nor any COFI Subsidiary is delinquent in the payment of
any tax, assessment or governmental charge. No deficiencies for any
taxes have been proposed, asserted or assessed against COFI or any COFI
Subsidiary that have not been resolved or settled, and no requests for
waivers of the time to assess any such tax are pending or have been
agreed to. Except as set forth in Section 2.14 of the COFI Disclosure
Schedule, neither COFI nor any COFI Subsidiary is currently subject to
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audit or examination of any of its income tax returns by the Internal
Revenue Service or any state, municipal or other taxing authority.
Neither COFI nor any COFI Subsidiary is a party to any action or
proceeding by any governmental authority for the assessment or the
collection of taxes. Deferred taxes of COFI and the COFI Subsidiaries
have been accounted for in accordance with generally accepted
accounting principles.
(b) COFI has not filed any consolidated federal income tax
return with an "affiliated group" (within the meaning of Section 1504
of the Code), where COFI was not the common parent of the group.
Neither COFI nor any COFI Subsidiary is, or has been a party to any tax
allocation agreement or arrangement pursuant to which it has any
contingent or outstanding liability to anyone other than COFI or a COFI
Subsidiary.
(c) COFI and the COFI Subsidiaries have each withheld amounts
from its employees, stockholders or holders of public deposit accounts
in compliance with the tax withholding provisions of applicable
federal, state and local laws, have filed all federal, state and local
returns and reports for all periods for which such returns or reports
would be due with respect to income tax withholding, social security,
unemployment taxes, income and other taxes and all payments or deposits
with respect to such taxes have been timely made and, except as set
forth in Section 2.14 of the COFI Disclosure Schedule have notified all
employees, stockholders, and holders of public deposit accounts of
their obligations to file all forms, statements and reports with it in
accordance with applicable federal, state and local tax laws and have
taken reasonable steps to insure that such employees, stockholders and
holders of public deposit accounts have filed all such forms,
statements and reports with it.
(d) For the purposes of this Agreement, the terms "tax" and
"taxes" include without limitation, any federal, state, local or
foreign income, leasing, franchise, excise, gross receipts, sales, use,
occupational, employment, real property, ad valorem, tangible and
intangible personal property and state taxes, payments in lieu of
taxes, levies, duties, imposts, business, operations or financial
condition, assessments, fees, charges and withholdings of any nature
whatsoever, together with any related penalties, fines, additions to
tax or interest thereon.
2.15 INSURANCE. COFI and the COFI Subsidiaries maintain insurance with
insurers which in the best judgment of management of COFI are sound and
reputable on their respective assets and upon their respective businesses and
operations against loss or damage, risks, hazards and liabilities as in their
judgment they deem appropriate. COFI and the COFI Subsidiaries maintain in
effect all insurance required to be carried by law or by any agreement by which
they are bound. All material claims under all policies of insurance maintained
by COFI and the COFI Subsidiaries have been filed in due and timely fashion.
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2.16 LOANS; INVESTMENTS.
(a) Except as otherwise disclosed in Section 2.16 of the COFI
Disclosure Schedule, each material loan reflected as an asset on the
COFI Financial Statements dated as of December 31, 1996 is evidenced by
appropriate and sufficient documentation and constitutes, to the best
knowledge of COFI and Charter One Bank, the legal, valid and binding
obligation of the obligor named therein, enforceable in accordance with
its terms, except to the extent that the enforceability thereof may be
limited by bankruptcy, insolvency, reorganization, moratorium or
similar laws or equitable principles or doctrines. Except as set forth
in Section 2.16 of the COFI Disclosure Schedule, all such loans are,
and at the Effective Time will be, free and clear of any security
interest, lien, encumbrance or other charge.
(b) All guarantees of indebtedness owed to COFI or any COFI
Subsidiary, including but not limited to those of the Federal Housing
Administration, the Small Business Administration, and other state and
federal agencies, are, to the best knowledge of COFI and Charter One
Bank, valid and enforceable, except to the extent enforceability
thereof may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws or equitable principles or
doctrines and except as would not have a Material Adverse Effect on
COFI.
(c) All interest rate swaps, caps, floors and option
agreements and other interest rate risk management arrangements to
which COFI or any COFI Subsidiary is a party or by which any of their
properties or assets may be bound were entered into in the ordinary
course of business and, to the best knowledge of COFI and Charter One
Bank, in accordance with then-customary practice and applicable rules,
regulations and policies of thrift regulatory authorities and with
counterparties believed to be financially responsible at the time and
are legal, valid and binding obligations and are in full force and
effect. COFI and the COFI Subsidiaries have duly performed in all
material respects all of their respective obligations thereunder to the
extent that such obligations to perform have accrued, and to the best
knowledge of COFI and Charter One Bank, there are no material breaches,
violations or defaults or allegations or assertions of such by any
party thereunder. None of the transactions contemplated by this
Agreement would permit (i) a counterparty under any interest rate swap,
cap, floor and option agreement or any other interest rate risk
management agreement or (ii) any party to any mortgage backed security
financing arrangement, to accelerate, discontinue, terminate, or
otherwise modify any such agreement or arrangement or would require
COFI or any COFI Subsidiary to recognize any gain or loss with respect
to such arrangement.
(d) Except as set forth in Section 2.16 of the COFI Disclosure
Schedule and except for pledges to secure public and trust deposits,
none of the investments reflected in the COFI Financial Statements
dated as of December 31, 1996 under the heading "Investment
Securities," and none of the investments made by COFI and the COFI
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Subsidiaries since December 31, 1996, is subject to any restriction,
whether contractual or statutory, which materially impairs the ability
of COFI or any COFI Subsidiary to freely dispose of such investment at
any time, other than those restrictions imposed on securities held for
investment under generally accepted accounting principles. With respect
to all material repurchase agreements to which COFI or any COFI
Subsidiary is a party, COFI or such Subsidiary has a valid, perfected
first lien, or security interest in the government securities or other
collateral securing each such repurchase agreement, and the value of
the collateral securing each such repurchase agreement equals or
exceeds the amount of the debt secured by such collateral under such
agreement.
2.17 ALLOWANCE FOR POSSIBLE LOAN LOSSES. The allowance for possible
loan losses shown on the COFI Financial Statements as of December 31, 1996, (and
as shown on any financial statements to be delivered by COFI to Xxxxxxxxxx
pursuant to Section 5.7 hereof), to the best knowledge of COFI and Charter One
Bank, as of such date was (and will be as of such subsequent financial statement
dates) adequate in all respects to provide for possible or specific losses, net
of recoveries relating to loans previously charged off, on loans outstanding,
and contained (or will contain) an additional amount of unallocated reserves for
unanticipated future losses at a level considered adequate under the standards
applied by applicable federal regulatory authorities and based upon generally
accepted accounting principles applicable to Charter One Bank. To the best
knowledge of COFI and Charter One Bank, the aggregate principal amount of loans
contained (or that will be contained) in the loan portfolio of COFI and the COFI
Subsidiaries as of December 31, 1996 (and as of the dates of any financial
statements to be delivered by COFI to Xxxxxxxxxx pursuant to Section 5.7
hereof), in excess of such reserve, was (and will be) fully collectible.
2.18 COFI BENEFIT PLANS.
(a) The term "COFI Benefit Plans" as used herein refers to
each compensation, consulting, employment, termination or collective
bargaining agreement, and each stock option, stock purchase, stock
appreciation right, life, health, accident or other insurance, bonus,
deferred or incentive compensation, severance or separation agreement
or any agreement providing any payment or benefit resulting from a
change in control, profit sharing, retirement, or other employee
benefit plan, practice, policy or arrangement of any kind, oral or
written, covering any employee, former employee, director or former
director of COFI or any COFI Subsidiary or his or her beneficiaries,
including, but not limited to, any employee benefit plans within the
meaning of Section 3(3) of the Employee Retirement Income Security Acts
of 1974, as amended ("ERISA"), which COFI or any COFI Subsidiary
maintains, to which COFI or any COFI Subsidiary contributes, or under
which any employee, former employee, director or former director of
COFI or any COFI Subsidiary is covered or has benefit rights and
pursuant to which any liability of COFI or any COFI Subsidiary exists
or is reasonably likely to occur, provided that the term "Plan or
"Plans" is used in this Agreement for convenience only and does not
constitute an acknowledgment that a
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particular arrangement is an employee benefit plan within the meaning
of Section 3(3) of ERISA. No COFI Benefit Plan is a multi-employer plan
within the meaning of Section 3(37) of ERISA.
(b) Each of the COFI Benefit Plans that is intended to be a
pension, profit sharing, stock bonus, thrift, savings or employee stock
ownership plan that is qualified under Section 401(a) of the Code
("COFI Qualified Plans") has been determined by the Internal Revenue
Service to qualify under Section 401(a) of the Code, or an application
for determination of such qualification has been timely made to the
Internal Revenue Service prior to the end of the applicable remedial
amendment period under Section 401(b) of the Code, and, to the best of
COFI's knowledge, there exist no circumstances likely to adversely
affect the qualified status of any such COFI Qualified Plan. All such
COFI Qualified Plans established or maintained by COFI or any of the
COFI Subsidiaries or to which COFI or any of the COFI Subsidiaries
contribute are in compliance in all material respects with all
applicable requirements of ERISA, and are in compliance in all material
respects with all applicable requirements (including qualification and
non-discrimination requirements) of the Code for obtaining the tax
benefits the Code thereupon permits with respect to such COFI Qualified
Plans. Neither COFI nor any COFI Subsidiary maintains, sponsors or
contributes to a Qualified Plan that is a defined benefit pension plan
subject to Title IV of ERISA. All accrued contributions and other
payments required to be made by COFI or any COFI Subsidiary to any COFI
Benefit Plan through December 31, 1996, have been made or reserves
adequate for such purposes as of December 31, 1996 have been set aside
therefor and reflected in the COFI Financial Statements dated as of
December 31, 1996. Neither COFI nor any COFI Subsidiary is in material
default in performing any of its respective contractual obligations
under any of the COFI Benefit Plans or any related trust agreement or
insurance contract, and there are no material outstanding liabilities
of any such Plan other than liabilities for benefits to be paid to
participants in such Plan and their beneficiaries in accordance with
the terms of such Plan.
(c) There is no pending or, to the best knowledge of COFI and
Charter One Bank, threatened litigation or pending claim (other than
benefit claims made in the ordinary course) by or on behalf of or
against any of the COFI Benefit Plans (or with respect to the
administration of any of such Plans) now or heretofore maintained by
COFI or any COFI Subsidiary which allege violations of applicable state
or federal law which are reasonably likely to result in a liability on
the part of COFI or any COFI Subsidiary or any such Plan.
(d) COFI and the COFI Subsidiaries and all other persons
having fiduciary or other responsibilities or duties with respect to
any COFI Benefit Plan are and have since the inception of each such
Plan been in substantial compliance with, and each such Plan is and has
been operated in substantial accordance with, its provisions and in
substantial compliance with the applicable laws, rules and regulations
governing such Plan, including, without limitation, the rules and
regulations promulgated by the
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Department of Labor, the Pension Benefit Guaranty Corporation ("PBGC")
and the Internal Revenue Service under ERISA, the Code or any other
applicable law. Notwithstanding the foregoing, no representation is
made with respect to compliance by a third party insurance company. No
"reportable event" (as defined in Section 4043(b) of ERISA) has
occurred with respect to any COFI Qualified Plan. Neither COFI, any
COFI Subsidiary nor any COFI Benefit Plan has incurred or is reasonably
likely to incur any liability for any "prohibited transactions" (as
defined in Section 406 of ERISA or Section 4975(a) of the Code), or any
material liability under Section 601 of ERISA or Section 4980 of the
Code.
(e) COFI and the COFI Subsidiaries have filed or caused to be
filed, and will continue to file or cause to be filed, in a timely
manner all filings pertaining to each COFI Benefit Plan with the
Internal Revenue Service, the PBGC, the Department of Labor, and as
prescribed by the Code or ERISA, or regulations issued thereunder. All
such filings, as amended, were complete and accurate in all material
respects as of the dates of such filings, and there were no
misstatements or omissions in any such filing which would be material
to the financial condition of COFI on a consolidated basis.
Notwithstanding the foregoing, no representation is made with respect
to filings by a third party insurance company.
2.19 COMPLIANCE WITH ENVIRONMENTAL LAWS.
(a) Except as set forth in Section 2.19 of the COFI Disclosure
Schedule: (i) to the best knowledge of COFI and Charter One Bank, the
operations of COFI and each of the COFI Subsidiaries comply in all
material respects with all applicable past and present Environmental
Laws (as defined below); (ii) to the best knowledge of COFI and Charter
One Bank, none of the operations of COFI or any COFI Subsidiary, no
assets presently or formerly owned or leased by COFI or any COFI
Subsidiary and no Mortgaged Premises or a Participating Facility (as
defined below) are subject to any judicial or administrative
proceedings alleging the violation of any past or present Environmental
Law, nor are they the subject of any claims alleging damages to health
or property, pursuant to which COFI, any COFI Subsidiary or any owner
of a Mortgaged Premises or a Participating Facility would be liable in
law or equity; (iii) none of the operations of COFI or any COFI
Subsidiary, no assets presently owned or, to the best knowledge of COFI
and Charter One Bank, formerly owned by COFI or any COFI Subsidiary,
and, to the best knowledge of COFI and Charter One Bank, no Mortgaged
Premises or Participating Facility are the subject of any federal,
state or local investigation evaluating whether any remedial action is
needed to respond to a release or threatened release of any Hazardous
Substance (as defined below), or any other substance into the
environment, nor has COFI or any COFI Subsidiary, or, to the best
knowledge of COFI and Charter One Bank, any owner of a Mortgaged
Premises or Participating Facility been directed to conduct such
investigation, formally or informally, by any governmental agency, nor
have any of them agreed with any governmental agency or private person
to conduct any such investigation; and (iv)
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neither COFI or any COFI Subsidiary, nor, to the best knowledge of COFI
and Charter One Bank, any owner of a Mortgaged Premises or a
Participating Facility has filed any notice under any Environmental Law
indicating past or present treatment, storage or disposal of a
Hazardous Substance or reporting a spill or release of a Hazardous
Substance, or any other substance into the environment.
(b) For purposes of this Section, "Mortgaged Premises" shall
mean each (i) real property interest (including without limitation any
fee or leasehold interest) which is encumbered or affected by any
mortgage, deed of trust, deed to secure debt or other similar document
or instrument granting to any party hereto or any of its Subsidiaries a
lien on or security interest in such real property interest and (ii)
any other real property interest upon which is situated assets or other
property affected or encumbered by any document or instrument granting
to any party hereto or any of its Subsidiaries a lien thereon or
security interest therein; provided, however, that the term "Mortgaged
Premises" shall not include one- to four-unit, single-family
residences, and in the case of COFI and the COFI Subsidiaries, any real
property interest securing a loan with a principal balance of less than
one million dollars. For purposes of this Section, "Participating
Facility" means any property in which any party hereto or any of its
Subsidiaries participates in the management of such property and, where
the context requires, includes the owner or operator of such property.
For purposes of this Agreement, "Hazardous Substance" has the meaning
set forth in Section 9601 of the Comprehensive Environmental Response
Compensation and Liability Act of 1980, 42 U.S.C.A., Section 9601 et
seq., and also includes any substance now or hereafter regulated by or
subject to any Environmental Laws (as defined below) and any other
pollutant, contaminant, or waste, including without limitation,
petroleum, asbestos, fiberglass, radon, and polychlorinated biphenyls.
For purposes of this Agreement, "Environmental Laws" means all laws
(civil or common), ordinances, rules, regulations, guidelines, and
orders that: (i) regulate air, water, soil, and solid waste management,
including the generation, release, containment, storage, handling,
transportation, disposition, or management of any Hazardous Substance;
(ii) regulate or prescribe requirements for air, water, or soil
quality; (iii) are intended to protect public health or the
environment; or (iv) establish liability for the investigation,
removal, or cleanup of, or damage caused by, any Hazardous Substance.
2.20 CONTRACTS AND COMMITMENTS. Section 2.20 of the COFI Disclosure
Schedule contains, and shall be supplemented by COFI and Charter One Bank, as
required by Section 5.10 hereof, so as to contain at the Closing Date copies of
each of the following documents, certified by an officer of COFI to be true and
correct copies of such documents on the dates of such certificates.
(a) The Certificate or Articles of Incorporation, Charters and
Bylaws of COFI and each COFI Subsidiary.
(b) All judgments, orders, injunctions, court decrees or
settlement
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agreements arising out of or relating to the labor and employment
practices or decisions of COFI or any COFI Subsidiary which, by their
terms, continue to bind or affect COFI or any COFI Subsidiary.
(c) All orders, decrees, memorandums, agreements or
understandings with regulatory agencies binding upon or affecting the
current operations of COFI or any COFI Subsidiary or any of their
directors or officers in their capacities as such.
2.21 DEFAULTS. There has not been any default in any material
obligation to be performed by COFI or any COFI Subsidiary under any material
contract or commitment, and neither COFI nor any COFI Subsidiary has waived, any
material right under any material contract or commitment. To the best knowledge
of COFI and Charter One Bank, no other party to any material contract or
commitment is in default in any material obligation to be performed by such
party.
2.22 OPERATIONS SINCE DECEMBER 31, 1996. Between December 31, 1996 and
the date hereof, except as set forth in Section 2.22 of the COFI Disclosure
Schedule, there has not been:
(a) any creation or assumption of indebtedness (including the
extension or renewal of any existing indebtedness, or the increase
thereof) by COFI or any COFI Subsidiary for borrowed money, or
otherwise, other than in the ordinary course of business, none of which
is in default;
(b) any change in COFI's independent auditors, historic
methods of accounting (other than as required by generally accepted
accounting principles or regulatory accounting principles), or in its
system for maintaining its equipment and real estate; or
(c) any event or condition of any character (other than
changes in legal, economic or other conditions which are not specially
or uniquely applicable to COFI or any COFI Subsidiary) materially
adversely affecting the business, operations or financial condition of
COFI on a consolidated basis.
2.23 UNDISCLOSED LIABILITIES. All of the obligations or liabilities
(whether accrued, absolute, contingent, unliquidated or otherwise, whether due
or to become due, and regardless of when asserted) arising out of transactions
or events heretofore entered into, or any action or inaction, including taxes
with respect to or based upon transactions or events heretofore occurring, that
are required to be reflected, disclosed or reserved against in audited
consolidated financial statements in accordance with generally accepted
accounting principles ("Liabilities") have, in the case of COFI and the COFI
Subsidiaries, been so reflected, disclosed or reserved against in the COFI
Financial Statements dated as of December 31, 1996 or in the notes thereto, and
COFI and the COFI Subsidiaries have no other Liabilities except (a) Liabilities
incurred since December 31, 1996 in the ordinary course of business or (b) as
disclosed in Section 2.23 of the COFI Disclosure Schedule.
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2.24 ASSETS.
(a) COFI and the COFI Subsidiaries have good, and marketable
title to their real properties, including any leaseholds and ground
leases, and their other assets and properties, all as reflected as
owned or held by COFI or any COFI Subsidiary in the COFI Financial
Statements dated as of December 31, 1996, and those acquired since such
date, except for (i) assets and properties disposed of since such date
in the ordinary course of business and (ii) liens, none of which, in
the aggregate, except as set forth in the COFI Financial Statements
dated as of December 31, 1996 or in Section 2.24 of the COFI Disclosure
Schedule, are material to the assets of COFI on a consolidated basis.
All buildings, structures, fixtures and appurtenances comprising part
of the real properties of COFI and the COFI Subsidiaries (whether owned
or leased) are in good operating condition and have been well
maintained, reasonable wear and tear excepted. Title to all real
property owned by COFI and the COFI Subsidiaries is held in fee simple,
except as otherwise noted in the COFI Financial Statements as of
December 31, 1996 or as set forth in Section 2.24 of the COFI
Disclosure Schedule. COFI and the COFI Subsidiaries have title or other
rights to its assets sufficient in all material respects for the
conduct of their respective businesses as presently conducted, and
except as set forth in the COFI Financial Statements dated as of
December 31, 1996, or in Section 2.24 of the COFI Disclosure Schedule,
such assets are free, clear and discharged of and from any and all
liens, charges, encumbrances, security interests and/or equities which
are material to COFI or any COFI Subsidiary.
(b) All leases pursuant to which COFI or any COFI Subsidiary,
as lessee, leases real or personal property which are material to the
business of COFI on a consolidated basis are, to the best knowledge of
COFI and Charter One Bank, valid, effective, and enforceable against
the lessor in accordance with their respective terms. There is not
under any of such leases any existing default, or any event which, with
notice or lapse of time or both, would constitute a default, with
respect to COFI or any COFI Subsidiary, or to the best knowledge of
COFI and Charter One Bank, the other party.
2.25 INDEMNIFICATION. To the best knowledge of COFI and Charter One
Bank, except as set forth in Section 2.25 of the COFI Disclosure Schedule, no
action or failure to take action by any director, officer, employee or agent of
COFI or any COFI Subsidiary has occurred which would give rise to a claim by any
such person for indemnification from COFI or any COFI Subsidiary under the
corporate indemnification provisions of such entity in effect on the date of
this Agreement.
2.26 INSIDER INTERESTS. All outstanding loans and other contractual
arrangements (including deposit relationships) between COFI or any COFI
Subsidiary and any of its officers, directors or employees conform to applicable
rules and regulations and requirements of all applicable regulatory agencies
which were in effect when such loans and other contractual arrangements were
entered into. Except as set forth in Section 2.26 of the COFI
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Disclosure Schedule, no officer, director or employee of COFI or any COFI
Subsidiary has any material interest in any property, real or personal, tangible
or intangible, used in or pertaining to the business of COFI or any COFI
Subsidiary.
2.27 BROKERS AND FINDERS. Neither COFI nor any COFI Subsidiary nor any
of their respective officers, directors or employees has employed any broker or
finder or incurred any liability for any financial advisory fees, brokerage
fees, commissions or finders' fees, and no broker or finder has acted directly
or indirectly for COFI or any COFI Subsidiary, in connection with this Agreement
or the transactions contemplated hereby.
2.28 ACCURACY OF INFORMATION. The statements of COFI and Charter One
Bank contained in this Agreement, the Schedules hereto and in any other written
document executed and delivered by or on behalf of COFI or Charter One Bank
pursuant to the terms of this Agreement are true and correct in all material
respects.
2.29 GOVERNMENTAL APPROVALS AND OTHER CONDITIONS. To the best knowledge
of COFI and Charter One Bank, there is no reason relating specifically to COFI
or any COFI Subsidiary why (a) the approvals that are required to be obtained
from regulatory authorities having approval authority in connection with the
transactions contemplated hereby should not be granted, (b) such regulatory
approvals should be subject to a condition which would differ from conditions
customarily imposed by such regulatory authorities in orders approving
acquisitions of the type contemplated hereby or (c) any of the conditions
precedent as specified in Article VI hereof to the obligations of any of the
parties hereto to consummate the transactions contemplated hereby are unlikely
to be fulfilled within the applicable time period or periods required for
satisfaction of such condition or conditions.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF XXXXXXXXXX AND HOME BANK
Xxxxxxxxxx and Home Bank jointly and severally represent and warrant to
COFI and Charter One Bank that:
3.1 ORGANIZATION. Xxxxxxxxxx is a corporation duly organized, validly
existing and in good standing under the laws of the State of Ohio and has all
requisite power and authority, corporate and otherwise, to own, operate and
lease its assets and properties and to carry on its business substantially as it
has been and is now being conducted. Xxxxxxxxxx is duly qualified to do business
and is in good standing in each jurisdiction where the character of the assets
or properties owned or leased by it or the nature of the business transacted by
it requires that it be so qualified, except where the failure to so qualify
would not have a Material Adverse Effect on Xxxxxxxxxx or its ability to
consummate the transactions contemplated herein. Xxxxxxxxxx has all requisite
corporate power and authority to enter into this Agreement and, subject to the
approval of this Agreement and the Company Merger by its stockholders and the
receipt of all requisite regulatory approvals and the expiration of any
applicable waiting periods, to consummate the transactions contemplated hereby.
Xxxxxxxxxx
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is duly registered as a savings and loan holding company under HOLA.
3.2 AUTHORIZATION. The execution, delivery and performance of this
Agreement and the consummation of the transactions contemplated hereby have been
duly approved and authorized by the Boards of Directors of Xxxxxxxxxx and Home
Bank, and all necessary corporate action on the part of Xxxxxxxxxx and Home Bank
has been taken, subject to the approval of this Agreement and the Company Merger
by the holders of 2/3 of the issued and outstanding Xxxxxxxxxx Common Stock
("Required Vote"). This Agreement has been duly executed and delivered by
Xxxxxxxxxx and Home Bank and constitutes the valid and binding obligation of
each of them and is enforceable against each of them, except to the extent that
enforceability thereof may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws or equitable principles or doctrines.
3.3 CONFLICTS. Subject to the second sentence of this Section 3.3, the
execution and delivery of this Agreement does not, and the consummation of the
transactions contemplated hereby will not, conflict with or result in any
violation, breach or termination of, or default or loss of a material benefit
under, or permit the acceleration of any obligation under, or result in the
creation of any material lien, charge or encumbrance on any property or assets
under, any provision of the Articles of Incorporation or Code of Regulations of
Xxxxxxxxxx or similar documents of any Xxxxxxxxxx Subsidiary (as defined in
Section 3.7 hereof), or any mortgage, indenture, lease, agreement or other
instrument, permit, concession, grant, franchise, license, judgment, order,
decree, statute, law, ordinance, rule or regulation applicable to Xxxxxxxxxx or
any Xxxxxxxxxx Subsidiary or their respective properties, other than any such
conflicts, violations or defaults which (i) will be cured or waived prior to the
Effective Time or (ii) are disclosed in Section 3.3 of that certain confidential
writing delivered by Xxxxxxxxxx to COFI within two business days prior to the
date hereof (the "Xxxxxxxxxx Disclosure Schedule"). No consent, approval, order
or authorization of, or registration, declaration or filing with, any federal or
state governmental authority is required by or with respect to Xxxxxxxxxx or
Home Bank in connection with the execution and delivery of this Agreement or the
consummation by Xxxxxxxxxx or Home Bank of the transactions contemplated hereby
except for the filings, approvals or waivers contemplated by Section 2.3 hereof.
3.4 ANTI-TAKEOVER PROVISIONS INAPPLICABLE. To the best knowledge of
Xxxxxxxxxx and Home Bank, no "business combination," "moratorium," "control
share" or other state anti-takeover statute or regulation, (i) applies to the
Company Merger or to the Voting Agreements, (ii) prohibits or restricts the
ability of Xxxxxxxxxx or Home Bank to perform its obligations under this
Agreement, or the ability of Xxxxxxxxxx to consummate the Company Merger or the
ability of Home Bank to consummate the Bank Merger, (iii) would have the effect
of invalidating or voiding this Agreement, any of the Voting Agreements, or any
provision hereof or thereof, or (iv) would subject COFI, Charter Michigan or
Charter One Bank to any material impediment or condition in connection with the
exercise of any of its right under this Agreement with respect to the Company
Merger or any of the Voting Agreements.
3.5 CAPITALIZATION AND STOCKHOLDERS.
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(a) As of the date hereof, the authorized capital stock of
Xxxxxxxxxx consists of (i) 5,000,000 shares of Xxxxxxxxxx Common Stock,
$0.01 par value, of which 1,915,892 shares are issued and outstanding
and 9,543 shares are held as treasury shares and (ii) 1,000,000 shares
of preferred stock, of which none are issued and outstanding. All of
the issued and outstanding shares of Xxxxxxxxxx Common Stock have been
duly and validly authorized and issued, and are fully paid and
non-assessable. None of the outstanding shares of Xxxxxxxxxx Common
Stock has been issued in violation of any preemptive rights of current
or past stockholders or are subject to any preemptive rights of the
current or past stockholders of Xxxxxxxxxx. All of the issued and
outstanding shares of Xxxxxxxxxx Common Stock will be entitled to vote
to approve this Agreement and the Company Merger.
(b) As of the date hereof, Xxxxxxxxxx had 189,127.6 shares of
Xxxxxxxxxx Common Stock reserved for issuance under the 1985 Option
Plan and 1995 Option Plan for the benefit of employees and directors of
Xxxxxxxxxx and the Xxxxxxxxxx Subsidiaries, pursuant to which options
covering 82,845.6 shares of Xxxxxxxxxx Common Stock are outstanding
(the "Xxxxxxxxxx Stock Options"). Except as set forth in this Section,
there are no shares of capital stock or other equity securities of
Xxxxxxxxxx outstanding and no outstanding options, warrants, scrip,
rights to subscribe to, calls or commitments of any character
whatsoever relating to, or securities or rights convertible into or
exchangeable for, shares of the capital stock of Xxxxxxxxxx, or
contracts, commitments, understandings, or arrangements by which
Xxxxxxxxxx is or may be bound to issue additional shares of its capital
stock or options, warrants, or rights to purchase or acquire any
additional shares of its capital stock. Section 3.5 of the Xxxxxxxxxx
Disclosure Schedule sets forth the name of the holder of each
Xxxxxxxxxx Stock Option and the date of grant of, number of shares
represented by exercise price and expiration of, each Xxxxxxxxxx Stock
Option.
3.6 XXXXXXXXXX FINANCIAL STATEMENTS; MATERIAL CHANGES. Xxxxxxxxxx has
heretofore delivered to COFI its audited consolidated financial statements for
calendar years ended December 31, 1996 and December 31, 1995 (together the
"Xxxxxxxxxx Financial Statements"). The Xxxxxxxxxx Financial Statements (x) are
true and correct in all material respects; (y) have been prepared in accordance
with generally accepted accounting principles applied on a consistent basis
during the periods involved (except as may be indicated in the notes thereto);
and (z) fairly present the consolidated financial position of Xxxxxxxxxx as of
the dates thereof and the consolidated results of its operations, stockholders'
equity, cash flows and changes in financial position for the periods then ended.
Since December 31, 1996 to the date hereof, Xxxxxxxxxx and the Xxxxxxxxxx
Subsidiaries have not undergone or suffered any changes in their respective
condition (financial or otherwise), properties, business or operations which
have been, in any case or in the aggregate, materially adverse to Xxxxxxxxxx on
a consolidated basis except as disclosed in Section 3.6 of the Xxxxxxxxxx
Disclosure Schedule. No facts or circumstances have been discovered from which
it reasonably appears that there is a significant risk and reasonable
probability that Xxxxxxxxxx will suffer or experience a Material Adverse Effect.
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3.7 XXXXXXXXXX SUBSIDIARIES.
(a) All of the Xxxxxxxxxx Subsidiaries are listed in Section
3.7 of the Xxxxxxxxxx Disclosure Schedule. Except as set forth in
Section 3.7 of the Xxxxxxxxxx Disclosure Schedule, Xxxxxxxxxx owns
directly or indirectly all of the issued and outstanding shares of
capital stock of the Xxxxxxxxxx Subsidiaries. Section 3.7 of the
Xxxxxxxxxx Disclosure Schedule sets forth the number of shares of
authorized and outstanding capital stock of the Xxxxxxxxxx
Subsidiaries. Except for equity securities of the Federal Home Loan
Bank of Cincinnati or as set forth in Section 3.7 of the Xxxxxxxxxx
Disclosure Schedule, neither Xxxxxxxxxx nor the Xxxxxxxxxx Subsidiaries
own directly or indirectly any debt or equity securities, or other
proprietary interest in any other corporation, limited liability
company, joint venture, partnership, entity, association or other
business. No capital stock of any of the Xxxxxxxxxx Subsidiaries is or
may become required to be issued (other than to Xxxxxxxxxx) by reason
of any options, warrants, scrip, rights to subscribe to, calls, or
commitments of any character whatsoever relating to, or securities or
rights convertible into or exchangeable for, shares of the capital
stock of any Xxxxxxxxxx Subsidiary. Other than as set forth in Section
3.7 of the Xxxxxxxxxx Disclosure Schedule there are no contracts,
commitments, understandings or arrangements relating to the rights of
Xxxxxxxxxx to vote or to dispose of shares of the capital stock of any
Xxxxxxxxxx Subsidiary. All of the shares of capital stock of each
Xxxxxxxxxx Subsidiary are fully paid and non-assessable and are owned
by Xxxxxxxxxx or another Xxxxxxxxxx Subsidiary free and clear of any
claim, lien or encumbrance, except as disclosed in Section 3.7 of the
Xxxxxxxxxx Disclosure Schedule.
(b) Each Xxxxxxxxxx Subsidiary is either a savings bank or a
corporation and is duly organized, validly existing and in good
standing under the laws of the jurisdiction in which it is incorporated
or organized, and is duly qualified to do business and in good standing
in each jurisdiction where the character of the assets or properties
owned or leased by it or the nature of the business transacted by it
requires it to be so qualified, except where the failure to so qualify,
either individually or in the aggregate, would not have a Material
Adverse Effect on Xxxxxxxxxx or the ability of Xxxxxxxxxx or Home Bank
to consummate the transactions contemplated herein. Each Xxxxxxxxxx
Subsidiary has the corporate power and authority necessary for it to
own, operate or lease its assets and properties and to carry on its
business substantially as it has been and is now being conducted.
(c) For purposes of this Agreement, an "Xxxxxxxxxx Subsidiary"
or a "Subsidiary" of Xxxxxxxxxx shall mean each corporation, savings
bank, and other entity in which Xxxxxxxxxx owns or controls directly or
indirectly 10% or more of the outstanding equity securities; provided,
however, there shall not be included any such entity acquired in good
faith through foreclosure, or any such entity to the extent that the
equity securities of such entity are owned or controlled in a bona fide
fiduciary capacity.
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(d) Home Bank is a member in good standing of the Federal Home
Loan Bank System. All eligible deposit accounts issued by Home Bank are
insured by the FDIC through the SAIF to the full extent permitted under
applicable law. Home Bank is, and at all times since June 1, 1990 has
been, a "domestic building and loan association" as defined in Section
7701(a)(19) of the Code and a "qualified thrift lender" as defined in
Section 10(m) of HOLA. The liquidation account established by Home Bank
in connection with its conversion from mutual to stock form has been
maintained since its establishment in accordance with applicable laws.
3.8 XXXXXXXXXX FILINGS. Xxxxxxxxxx has previously made available, or
will make available prior to the Effective Time, to COFI true and correct copies
of the (i) proxy statements relating to all meetings of stockholders (whether
special or annual) of Xxxxxxxxxx during calendar years 1995, 1996 and 1997 and
(ii) all other reports, as amended, or filings, as amended, required to be filed
under the Securities Exchange Act by Xxxxxxxxxx with the SEC since January 1,
1995 including without limitation on Forms 10-K, 10-Q and 8-K.
3.9 XXXXXXXXXX REPORTS. Each of Xxxxxxxxxx and the Xxxxxxxxxx
Subsidiaries has filed, and will continue to file, all reports and statements,
together with any amendment required to be made with respect thereto, that it
has, or will be, required to file with the SEC, the FDIC, the OTS, the NASD, and
other applicable thrift, securities and other regulatory authorities (except
filings which are not material). As of their respective dates (and without
giving effect to any amendments or modifications filed after the date of this
Agreement with respect to reports and documents filed before the date of this
Agreement), each of such reports and documents, including the financial
statements, exhibits, and schedules thereto, complied in all material respects
with all of the statutes, rules and regulations enforced or promulgated by the
authority with which they were filed and did not contain any untrue statement of
a material fact or omit to state any material fact necessary in order to make
the statements made therein, in light of the circumstances under which they were
made, not misleading. Other than normal examinations conducted by the Internal
Revenue Service, state and local taxing authorities, the OTS or the FDIC in the
regular course of the business of Xxxxxxxxxx or the Xxxxxxxxxx Subsidiaries, no
federal, state or local governmental agency, commission or other entity has
initiated any proceeding or, to the best knowledge of Xxxxxxxxxx and Home Bank,
investigation into the business or operations of Xxxxxxxxxx or the Xxxxxxxxxx
Subsidiaries within the past two (2) years except as set forth in Section 3.9 of
the Xxxxxxxxxx Disclosure Schedule. There is no unresolved violation, criticism
or exception by the SEC, OTS, FDIC or other agency, commission or entity with
respect to any report or statement referred to herein that is material to
Xxxxxxxxxx or any Xxxxxxxxxx Subsidiary.
3.10 COMPLIANCE WITH LAWS.
(a) Except as disclosed in Section 3.10 of the Xxxxxxxxxx
Disclosure Schedule, and for violations which are not material to
Xxxxxxxxxx or any Xxxxxxxxxx Subsidiary, the businesses of Xxxxxxxxxx
and the Xxxxxxxxxx Subsidiaries are being conducted, in all material
respects, in compliance with all laws, ordinances or regulations of
governmental authorities, including without limitation, laws affecting
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financial institutions (including those pertaining to the Bank Secrecy
Act, the investment of funds, the lending of money, the collection of
interest and the extension of credit), federal and state securities
laws, laws and regulations relating to financial statements and
reports, truth-in-lending, truth-in-savings, usury, fair credit
reporting, consumer protection, occupational safety, fair employment
practices, fair labor standards and all other laws and regulations
relating to employees and employee benefits, and any statutes or
ordinances relating to the properties occupied or used by Xxxxxxxxxx or
any Xxxxxxxxxx Subsidiary.
(b) Except as disclosed in Section 3.10 of the Xxxxxxxxxx
Disclosure Schedule, no investigation or review by any governmental
entity with respect to Xxxxxxxxxx or any Xxxxxxxxxx Subsidiary is
pending or, to the best knowledge of Xxxxxxxxxx and Home Bank,
threatened, nor has any governmental entity indicated to Xxxxxxxxxx or
any Xxxxxxxxxx Subsidiary an intention to conduct the same, other than
normal thrift regulatory examinations.
(c) Xxxxxxxxxx and each of the Xxxxxxxxxx Subsidiaries, where
applicable, is in substantial compliance with the applicable provisions
of the Community Reinvestment Act of 1977 and the regulations
promulgated thereunder. As of the date of this Agreement, neither
Xxxxxxxxxx nor Home Bank has been advised of the existence of any fact
or circumstance or set of facts or circumstances which, if true, would
cause Xxxxxxxxxx or any of the Xxxxxxxxxx Subsidiaries to fail to be in
substantial compliance with such provisions. Home Bank has not received
since December 31, 1993 a rating from an applicable regulatory
authority which is less than "satisfactory."
3.11 REGISTRATION STATEMENT: PROXY STATEMENT. The information to be
supplied by Xxxxxxxxxx for inclusion in the Registration Statement will not, at
the time the Registration Statement is declared effective and at the Effective
Time, 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 the light of the circumstances under which they were
made, not misleading. The information to be supplied by Xxxxxxxxxx for inclusion
in the Proxy Statement will not, on the date of the Proxy Statement (or any
amendment thereof or supplement thereto) is first mailed to Xxxxxxxxxx'x
stockholders, at the time of the Xxxxxxxxxx Stockholders' Meeting, and at the
Effective Time, contain any statement that, in light of the circumstances under
which it is made, is false or misleading with respect to any material fact,
omits to state any material fact necessary in order to make the statements made
therein not false or misleading, or omits to state any material fact necessary
to correct any statement in any earlier communication with respect to the
solicitation of proxies for the Xxxxxxxxxx Stockholders' Meeting that has become
false or misleading. If at any time prior to the Effective Time, any event
relating to Xxxxxxxxxx or any of its affiliates, officers or directors is
discovered by Xxxxxxxxxx that should be set forth in an amendment to the
Registration Statement or a supplement to the Proxy Statement, Xxxxxxxxxx will
promptly inform COFI, and such amendment or supplement will be promptly filed
with the SEC and, as required by law, disseminated to the stockholders of
Xxxxxxxxxx. Notwithstanding the foregoing,
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Xxxxxxxxxx makes no representation or warranty with respect to any information
supplied by COFI that is contained in the Registration Statement or the Proxy
Statement. The Proxy Statement will (with respect to Xxxxxxxxxx) comply in all
material respects as to form and substance with the requirements of the Exchange
Act and the rules and regulations thereunder.
3.12 LITIGATION. Except as disclosed in Section 3.12 of the Xxxxxxxxxx
Disclosure Schedule, there is no suit, action, investigation or proceeding,
legal, quasi-judicial, administrative or otherwise, pending or, to the best
knowledge of Xxxxxxxxxx and Home Bank threatened, against or affecting
Xxxxxxxxxx or any Xxxxxxxxxx Subsidiary, or any of their respective officers,
directors, employees or agents, in their capacities as such, which is seeking
equitable relief or damages against Xxxxxxxxxx, any Xxxxxxxxxx Subsidiary, or
any of their respective officers, directors, employees or agents, in their
capacities as such, in excess of $10,000, or which would materially affect the
ability of Xxxxxxxxxx or Home Bank to consummate the transactions contemplated
herein or which is seeking to enjoin consummation of the transactions provided
for herein or to obtain other relief in connection with this Agreement or the
transactions contemplated hereby, nor is there any judgment, decree, injunction,
rule or order of any court, governmental department, commission, agency,
instrumentality or arbitrator outstanding against Xxxxxxxxxx or any Xxxxxxxxxx
Subsidiary or any of their respective officers, directors, employees or agents,
in their capacities as such, having, or which, insofar as reasonably can be
foreseen in the future, would have any such effect.
3.13 LICENSES. Xxxxxxxxxx and the Xxxxxxxxxx Subsidiaries hold all
licenses, certificates, permits, franchises and all patents, trademarks, service
marks, trade names, copyrights or right thereto, and required authorizations,
approvals, consents, licenses, clearances and orders or registrations with all
appropriate federal, state or other authorities that are material to the conduct
of their respective businesses as now conducted and as presently proposed to be
conducted.
3.14 TAXES.
(a) Except as disclosed in Section 3.14 of the Xxxxxxxxxx
Disclosure Schedule, Xxxxxxxxxx and the Xxxxxxxxxx Subsidiaries have
each timely filed all tax and information returns required to be filed
and have paid (or Xxxxxxxxxx has paid on behalf of its Subsidiaries),
or have accrued on their respective books and set up an adequate
reserve for the payment of, all taxes reflected on such returns as
required to be paid in respect of the periods covered by such returns
and have accrued on their respective books and set up an adequate
reserve for the payment of all income and other taxes anticipated to be
payable in respect of periods through the end of the calendar month
next preceding the date hereof. Neither Xxxxxxxxxx nor any Xxxxxxxxxx
Subsidiary is delinquent in the payment of any tax, assessment or
governmental charge. No deficiencies for any taxes have been proposed,
asserted or assessed against Xxxxxxxxxx or any Xxxxxxxxxx Subsidiary
that have not been resolved or settled and no requests for waivers of
the time to assess any such tax are pending or have been agreed to. The
income tax returns of Xxxxxxxxxx and Xxxxxxxxxx Subsidiaries have not
been audited by the Internal Revenue Service, state, municipal or other
taxing
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authority after the 1991 tax year. Neither Xxxxxxxxxx nor any
Xxxxxxxxxx Subsidiary is a party to any action or proceeding by any
governmental authority for the assessment or the collection of taxes.
Deferred taxes of Xxxxxxxxxx and the Xxxxxxxxxx Subsidiaries have been
accounted for in accordance with generally accepted accounting
principles.
(b) Xxxxxxxxxx has not filed any consolidated federal income
tax return with an "affiliated group" (within the meaning of Section
1504 of the Code) where Xxxxxxxxxx was not the common parent of the
group. Neither Xxxxxxxxxx nor any Xxxxxxxxxx Subsidiary is, or has
been, a party to any tax allocation agreement or arrangement pursuant
to which it has any contingent or outstanding liability to anyone other
than Xxxxxxxxxx or any Xxxxxxxxxx Subsidiary. Neither Xxxxxxxxxx nor
any Xxxxxxxxxx Subsidiary is required to include in income any
adjustment pursuant to Section 481(a) of the Code and no such
adjustment has been proposed by the Internal Revenue Service. Neither
Xxxxxxxxxx nor any Xxxxxxxxxx Subsidiary has filed a consent pursuant
to Section 341(f) of the Code or agreed to have Section 341(f)(2) of
the Code apply.
(c) Xxxxxxxxxx and the Xxxxxxxxxx Subsidiaries have each
withheld amounts from its employees, stockholders, or holders of public
deposit accounts in compliance with the tax withholding provisions of
applicable federal, state and local laws, have filed all federal, state
and local returns and reports for all periods for which such returns or
reports would be due with respect to income tax withholding, social
security, unemployment taxes, income and other taxes and all payments
or deposits with respect to such taxes have been timely made and except
as set forth in Section 3.14 of the Xxxxxxxxxx Disclosure Schedule,
have notified all employees, stockholders and holders of public deposit
accounts of their obligations to file all forms, statements or reports
with it in accordance with applicable federal, state and local tax laws
and have taken reasonable steps to insure that such employees,
stockholders and holders of public deposit accounts have filed all such
forms statements and reports with it.
3.15 INSURANCE. Xxxxxxxxxx and the Xxxxxxxxxx Subsidiaries maintain
insurance with insurers which in the best judgment of management of Xxxxxxxxxx
are sound and reputable on their respective assets and upon their respective
businesses and operations against loss or damage, risks, hazards and liabilities
as in their judgment they deem appropriate. Xxxxxxxxxx and the Xxxxxxxxxx
Subsidiaries maintain in effect all insurance required to be carried by law or
by any agreement by which they are bound. All material claims under all policies
of insurance maintained by Xxxxxxxxxx and the Xxxxxxxxxx Subsidiaries have been
filed in due and timely fashion. Each of Xxxxxxxxxx and the Xxxxxxxxxx
Subsidiaries has taken or will timely take all requisite action (including
without limitation the making of claims and the giving of notices) pursuant to
its directors' and officers' liability insurance policy or policies in order to
preserve all rights thereunder with respect to all matters (other than matters
arising in connection with this Agreement and the transactions contemplated
hereby) occurring prior to the Effective Time. Neither Xxxxxxxxxx nor any of the
Xxxxxxxxxx Subsidiaries has, during the past three years, had an insurance
policy canceled or been denied insurance coverage for which any of such
companies has applied.
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3.16 LOANS; INVESTMENTS.
(a) Except as otherwise disclosed in Section 3.16 of the
Xxxxxxxxxx Disclosure Schedule, each loan reflected as an asset on the
Xxxxxxxxxx Financial Statement dated as of December 31, 1996, is
evidenced by appropriate and sufficient documentation and constitutes,
to the best knowledge of Xxxxxxxxxx and Home Bank, the legal, valid and
binding obligation of the obligor named therein, enforceable in
accordance with its terms, except to the extent that the enforceability
thereof may be limited by bankruptcy, insolvency, reorganization,
moratorium or similar laws or equitable principles or doctrines. Except
as set forth in Section 3.16 of the Xxxxxxxxxx Disclosure Schedule, all
such loans are, and at the Effective Time will be, free and clear of
any security interest, lien, encumbrance or other charge. Except as set
forth in Section 3.16 of the Xxxxxxxxxx Disclosure Schedule, there is
no loan or other asset of Xxxxxxxxxx or of any Xxxxxxxxxx Subsidiary
that has been classified by examiners or others as "Other Loans of
Concern," "Substandard," "Doubtful" or "Loss". Set forth in Section
3.16 of the Xxxxxxxxxx Disclosure Schedule is a complete list of the
real estate acquired through foreclosure, repossession or deed in lieu
thereof ("REO") of Xxxxxxxxxx and the Xxxxxxxxxx Subsidiaries as of
March 31, 1997.
(b) All guarantees of indebtedness owed to Xxxxxxxxxx or any
Xxxxxxxxxx Subsidiary, including but not limited to those of the
Federal Housing Administration, the Small Business Administration, and
other state and federal agencies, are, to the best knowledge of
Xxxxxxxxxx and Home Bank, valid and enforceable, except to the extent
enforceability thereof may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws or equitable
principles or doctrines.
(c) All interest rate swaps, caps, floors and option
agreements and other interest rate risk management arrangements to
which Xxxxxxxxxx or any Xxxxxxxxxx Subsidiary is a party or by which
any of their properties or assets may be bound were entered into in the
ordinary course of business and, to the best knowledge of Xxxxxxxxxx
and Home Bank, in accordance with then-customary practice and
applicable rules, regulations and policies of thrift regulatory
authorities and with counterparties believed to be financially
responsible at the time and are legal, valid and binding obligations
and are in full force and effect. Xxxxxxxxxx and the Xxxxxxxxxx
Subsidiaries have duly performed in all material respects all of their
respective obligations thereunder to the extent that such obligations
to perform have accrued, and to the best knowledge of Xxxxxxxxxx and
Home Bank, there are no material breaches, violations or defaults or
allegations or assertions of such by any party thereunder. None of the
transactions contemplated by this Agreement would permit: (i) a
counterparty under any interest rate swap, cap, floor and option
agreement or any other interest rate risk management agreement or (ii)
any party to any mortgage-backed security financing arrangement, to
accelerate, discontinue, terminate or otherwise modify any such
agreement or arrangement or would require Xxxxxxxxxx or any Xxxxxxxxxx
Subsidiary to recognize any gain or loss with respect to such
arrangement.
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(d) Except as set forth in Section 3.16 of the Xxxxxxxxxx
Disclosure Schedule and except for pledges to secure public and trust
deposits, none of the investments reflected in the Xxxxxxxxxx Financial
Statements dated as of December 31, 1996 under the heading "Investment
Securities, " and none of the investments made by Xxxxxxxxxx and the
Xxxxxxxxxx Subsidiaries since December 31, 1996, is subject to any
restriction, whether contractual or statutory, which materially impairs
the ability of Xxxxxxxxxx or any Xxxxxxxxxx Subsidiary to freely
dispose of such investment at any time, other than those restrictions
imposed on securities held for investment under generally accepted
accounting principles. With respect to all material repurchase
agreements to which Xxxxxxxxxx or any Xxxxxxxxxx Subsidiary is a party,
Xxxxxxxxxx or such Subsidiary has a valid, perfected first lien or
security interest in the government securities or other collateral
securing each such repurchase agreement, and the value of the
collateral securing each such repurchase agreement equals or exceeds
the amount of the debt secured by such collateral under such agreement.
Except as set forth in Section 3.16 of the Xxxxxxxxxx Disclosure
Schedule and except for a transaction involving less than $50,000,
neither Xxxxxxxxxx nor any Xxxxxxxxxx Subsidiary has sold or otherwise
disposed of any assets in a transaction in which the acquiror of such
assets or other person has the right, either conditionally or
absolutely, to require Xxxxxxxxxx or any Xxxxxxxxxx Subsidiary to
repurchase or otherwise reacquire any such assets. Set forth in Section
3.16 of the Xxxxxxxxxx Disclosure Schedule is a complete and accurate
list of each investment and debt security, mortgage-backed and related
securities, marketable equity securities and securities purchased under
agreements to resell owned by Xxxxxxxxxx or any Xxxxxxxxxx Subsidiary
showing as of March 31, 1997 the carrying values and estimated fair
values of investment and debt securities, the gross carrying value and
estimated fair value of the mortgage-backed and related securities and
the estimated cost and estimated fair value of the marketable equity
securities.
(e) All United States Treasury securities, obligations of
other United States Government agencies and corporations, obligations
of States of United States and their political subdivisions, and other
investment securities classified as "held to maturity" and "available
for sale" held by Xxxxxxxxxx and the Xxxxxxxxxx Subsidiaries, as
reflected in the Xxxxxxxxxx Financial Statements dated December 31,
1996 were classified and accounted for in accordance with F.A.S.B. 115
and the intentions of management.
3.17 ALLOWANCE FOR POSSIBLE LOAN LOSSES.
(a) The allowance for possible loan losses shown on the
Xxxxxxxxxx Financial Statements as of December 31, 1996 (and as shown
on any financial statements to be delivered by Xxxxxxxxxx to COFI
pursuant to Section 5.7 hereof), to the best knowledge of Xxxxxxxxxx
and Home Bank, as of such date was (and will be as of such subsequent
financial statement dates) adequate in all respects to provide for
possible or specific losses, net of recoveries relating to loans
previously charged off, on loans outstanding, and contained (or will
contain) an additional amount of
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unallocated reserves for unanticipated future losses at a level
considered adequate under the standards applied by applicable federal
regulatory authorities and based upon generally accepted practices
applicable to Home Bank. To the best knowledge of Xxxxxxxxxx and Home
Bank, the aggregate principal amount of loans contained (or that will
be contained) in the loan portfolio of Xxxxxxxxxx and the Xxxxxxxxxx
Subsidiaries as of December 31, 1996 (and as of the dates of any
financial statements to be delivered by Xxxxxxxxxx to COFI pursuant to
Section 5.7 hereof), in excess of such reserve, was (and will be) fully
collectible.
(b) The sum of the aggregate amount of all Nonperforming
Assets (as defined below) and all troubled debt restructurings (as
defined under generally accepted accounting principles) on the books of
Xxxxxxxxxx and the Xxxxxxxxxx Subsidiaries does not exceed 1.2% of
total loans at the date hereof. "Nonperforming Assets" shall mean (i)
all loans and leases (A) that are contractually past due 90 days or
more in the payment of principal and/or interest, (B) that are on
nonaccrual status, (C) where a reasonable doubt exists, in the
reasonable judgment of Home Bank, as to the timely future
collectibility of principal and/or interest, whether or not interest is
still accruing or the loan is less than 90 days past due, (D) where the
interest rate terms have been reduced and/or the maturity dates have
been extended subsequent to the agreement under which the loan was
originally created due to concerns regarding the borrower's ability to
pay in accordance with such initial terms, (E) where a specific reserve
allocation exists in connection therewith, or (F) that have been
classified "Doubtful", "Loss" or the equivalent thereof by any
regulatory authority, and (ii) all assets classified as REO and other
assets acquired through foreclosure or repossession.
3.18 XXXXXXXXXX BENEFIT PLANS.
(a) Section 3.18 of the Xxxxxxxxxx Disclosure Schedule
contains a list and a true and correct copy (or, a description with
respect to any oral employee benefit plan, practice, policy or
arrangement), including all amendments thereto, of each compensation,
consulting, employment, termination or collective bargaining agreement,
and each stock option, stock purchase, stock appreciation right,
restricted stock, life, health, accident or other insurance, bonus,
deferred or incentive compensation, severance or separation agreement
or any agreement providing any payment or benefit resulting from a
change in control, profit sharing, retirement, or other employee
benefit plan, practice, policy or arrangement of any kind, oral or
written, covering any employee, former employee, director or former
director of Xxxxxxxxxx or any Xxxxxxxxxx Subsidiary or his or her
beneficiaries, including, but not limited to, any employee benefit
plans within the meaning of Section 3(3) of ERISA, which Xxxxxxxxxx or
any Xxxxxxxxxx Subsidiary maintains, to which Xxxxxxxxxx or any
Xxxxxxxxxx Subsidiary contributes, or under which any employee, former
employee, director or former director of Xxxxxxxxxx or any Xxxxxxxxxx
Subsidiary is covered or has benefit rights and pursuant to which any
liability of Xxxxxxxxxx or any Xxxxxxxxxx
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Subsidiary exists or is reasonably likely to occur (the "Xxxxxxxxxx
Benefit Plans"). Except as set forth in Section 3.18 of the Xxxxxxxxxx
Disclosure Schedule, Xxxxxxxxxx and the Xxxxxxxxxx Subsidiaries neither
maintain nor have entered into any Xxxxxxxxxx Benefit Plan or other
document, plan or agreement which contains any change in control
provisions which would cause an increase or acceleration of benefits or
benefit entitlements to employees or former employees of Xxxxxxxxxx or
any Xxxxxxxxxx Subsidiary or their respective beneficiaries, or other
provisions, which would cause an increase in the liability of
Xxxxxxxxxx or any Xxxxxxxxxx Subsidiary or to COFI or any COFI
Subsidiary as a result of the transactions contemplated by this
Agreement or any related action thereafter (a "Change in Control
Benefit"). The term "Xxxxxxxxxx Benefit Plans" as used herein refers to
all plans contemplated under the preceding sentences of this Section
3.18, provided that the term "Plan" or "Plans" is used in this
Agreement for convenience only and does not constitute an
acknowledgment that a particular arrangement is an employee benefit
plan within the meaning of Section 3(3) of ERISA. Except as disclosed
in Section 3.18 of the Xxxxxxxxxx Disclosure Schedule, no Benefit Plan
is a multi-employer plan within the meaning of Section 3(37) of ERISA.
(b) Each of the Xxxxxxxxxx Benefit Plans that is intended to
be a pension, profit sharing, stock bonus, thrift or savings plan that
is qualified under Section 401(a) of the Code ("Xxxxxxxxxx Qualified
Plans") has been determined by the Internal Revenue Service to qualify
under Section 401(a) of the Code, or an application for determination
of such qualification has been timely made to the Internal Revenue
Service prior to the end of the applicable remedial amendment period
under Section 401(b) of the Code (a copy of each such determination
letter or pending application is included in Section 3.18 of the
Xxxxxxxxxx Disclosure Schedule) and, to the best of Xxxxxxxxxx'x
knowledge, there exist no circumstances likely to adversely affect the
qualified status of any such Xxxxxxxxxx Qualified Plan. All such
Xxxxxxxxxx Qualified Plans established or maintained by Xxxxxxxxxx or
any of the Xxxxxxxxxx Subsidiaries or to which Xxxxxxxxxx or any of the
Xxxxxxxxxx Subsidiaries contribute are in compliance in all material
respects with all applicable requirements of ERISA, and are in
compliance in all material respects with all applicable requirements
(including qualification and non-discrimination requirements ) of the
Code for obtaining the tax benefits the Code thereupon permits with
respect to such Xxxxxxxxxx Qualified Plans. Neither Xxxxxxxxxx nor any
Xxxxxxxxxx Subsidiary maintains, sponsors or contributes to a Qualified
Plan that is a defined benefit pension plan subject to Title IV of
ERISA. All accrued contributions and other payments required to be made
by Xxxxxxxxxx or any Xxxxxxxxxx Subsidiary to any Xxxxxxxxxx Benefit
Plan through December 31, 1996, have been made or reserves adequate for
such purposes as of December 31, 1996, have been set aside therefor and
are reflected in the Xxxxxxxxxx Financial Statements dated as of
December 31, 1996. Neither Xxxxxxxxxx nor any Xxxxxxxxxx Subsidiary is
in material default in performing any of its respective contractual
obligations under any of the Xxxxxxxxxx Benefit Plans or any related
trust agreement or insurance contract, and there are no material
outstanding liabilities of any such Plan other than liabilities
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for benefits to be paid to participants in such Plan and their
beneficiaries in accordance with the terms of such Plan.
(c) There is no pending or, to the best knowledge of
Xxxxxxxxxx and Home Bank, threatened litigation or pending claim (other
than routine benefit claims made in the ordinary course) by or on
behalf of or against any of the Xxxxxxxxxx Benefit Plans (or with
respect to the administration of any such Plans) now or heretofore
maintained by Xxxxxxxxxx or any Xxxxxxxxxx Subsidiary which allege
violations of applicable state or federal law which are reasonably
likely to result in a liability on the part of Xxxxxxxxxx or any
Xxxxxxxxxx Subsidiary or any such Plan.
(d) Xxxxxxxxxx and the Xxxxxxxxxx Subsidiaries and all other
persons having fiduciary or other responsibilities or duties with
respect to any Xxxxxxxxxx Benefit Plan are and have since the inception
of each such Plan been in substantial compliance with, and each such
Plan is and has been operated in substantial accordance with, its
provisions and in substantial compliance with the applicable laws,
rules and regulations governing such Plan, including, without
limitation, the rules and regulations promulgated by the Department of
Labor, the PBGC and the Internal Revenue Service under ERISA, the Code
or any other applicable law. Notwithstanding the foregoing, no
representation is made with respect to compliance by a third party
insurance company. No "reportable event" (as defined in Section 4043(b)
of ERISA) has occurred with respect to any Xxxxxxxxxx Qualified Benefit
Plan. Except as disclosed in Section 3.18 of the Xxxxxxxxxx Disclosure
Schedule, neither Xxxxxxxxxx, any Xxxxxxxxxx Subsidiary nor any
Xxxxxxxxxx Benefit Plan has incurred or is reasonably likely to incur
any liability for any "prohibited transactions" (as defined in Section
406 of ERISA or Section 4975 of the Code), or any material liability
under Section 601 of ERISA or Section 4980 of the Code. All Xxxxxxxxxx
Benefit Plans that are group health plans have been operated in
substantial compliance with the group health plan continuation
requirements of Section 4980B of the Code and Section 601 of ERISA.
(e) Except as set forth in Section 3.18 of the Xxxxxxxxxx
Disclosure Schedule, neither Xxxxxxxxxx nor any Xxxxxxxxxx Subsidiary
has made any payments, or is or has been a party to any agreement or
any Xxxxxxxxxx Benefit Plan, that under any circumstances could
obligate it or its successor to make payments that are not or will not
be deductible because of Sections 162(m) or 280G of the Code.
(f) Section 3.18 of the Xxxxxxxxxx Disclosure Schedule
describes any obligation that Xxxxxxxxxx or any Xxxxxxxxxx Subsidiary
has to provide health or welfare benefits to retirees or other former
employees, directors or their dependents (other than rights under
Section 4980B of the Code or Section 601 of ERISA), including
information as to the number of retirees, other former employees or
directors and dependents entitled to such coverage and their ages.
(g) Section 3.18 of the Xxxxxxxxxx Disclosure Schedule lists:
(i) each officer, employee and director of Xxxxxxxxxx and any
Xxxxxxxxxx Subsidiary who is
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eligible to receive a Change in Control Benefit, showing the amount of
each such Change in Control Benefit, the individual's participation in
any bonus or other employee benefit plan, and such individual's
compensation from Xxxxxxxxxx and each Xxxxxxxxxx Subsidiary for each of
the calendar years 1992 through 1996 as reported by Xxxxxxxxxx and a
Xxxxxxxxxx Subsidiary on Form W-2 or Form 1099; and (ii) a copy of each
option agreement relating to Xxxxxxxxxx Stock Options.
(h) To the best knowledge of Xxxxxxxxxx and Home Bank,
Xxxxxxxxxx and the Xxxxxxxxxx Subsidiaries have filed or caused to be
filed, and will continue to file or cause to be filed, in a timely
manner all filings pertaining to each Xxxxxxxxxx Benefit Plan with the
Internal Revenue Service, the Department of Labor and the PBGC, as
prescribed by the Code or ERISA, or regulations issued thereunder. To
the best knowledge of Xxxxxxxxxx and Home Bank, all such filings, as
amended, were complete and accurate in all material respects as of the
dates of such filings. Notwithstanding the foregoing, no representation
is made with respect to filings by a third party insurance company.
3.19 COMPLIANCE WITH ENVIRONMENTAL LAWS.
(a) Except as set forth in Section 3.19 of the Xxxxxxxxxx
Disclosure Schedule: (i) to the best knowledge of Xxxxxxxxxx and Home
Bank, the operations of Xxxxxxxxxx and each of the Xxxxxxxxxx
Subsidiaries comply in all material respects with all applicable past
and present Environmental Laws; (ii) to the best knowledge of
Xxxxxxxxxx and Home Bank, none of the operations of Xxxxxxxxxx or any
Xxxxxxxxxx Subsidiary, no assets presently or formerly owned or leased
by Xxxxxxxxxx or any Xxxxxxxxxx Subsidiary and no Mortgaged Premises or
Participating Facility are subject to any judicial or administrative
proceedings alleging the violation of any past or present Environmental
Law, nor are they the subject of any claims alleging damages to health
or property, pursuant to which Xxxxxxxxxx, any Xxxxxxxxxx Subsidiary or
any owner of a Mortgaged Premises or a Participating Facility would be
liable in law or equity; (iii) none of the operations of Xxxxxxxxxx or
any Xxxxxxxxxx Subsidiary, no assets presently owned or, to the best
knowledge of Xxxxxxxxxx and Home Bank, formerly owned by Xxxxxxxxxx or
any Xxxxxxxxxx Subsidiary, and to the best knowledge of Xxxxxxxxxx and
Home Bank, no Mortgaged Premises or a Participating Facility are the
subject of any federal, state or local investigation evaluating whether
any remedial action is needed to respond to a release or threatened
release of any Hazardous Substance, or any other substance into the
environment, nor has Xxxxxxxxxx or any Xxxxxxxxxx Subsidiary, or, to
the best knowledge of Xxxxxxxxxx and Home Bank, any owner of a
Mortgaged Premises or a Participating Facility been directed to conduct
such investigation, formally or informally, by any governmental agency,
nor have any of them agreed with any governmental agency or private
person to conduct any such investigation; and (iv) neither Xxxxxxxxxx
nor any Xxxxxxxxxx Subsidiary, nor, to the best knowledge of Xxxxxxxxxx
and Home Bank, any owner of a Mortgaged Premises or a Participating
Facility has filed any notice under any Environmental Law indicating
past or present treatment, storage or disposal of a Hazardous Substance
or reporting a
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spill or release of a Hazardous Substance, or any other substance into
the environment.
(b) With respect to the real property currently owned or, to
the best knowledge of Xxxxxxxxxx and Home Bank, formerly owned or
currently leased by Xxxxxxxxxx or any Xxxxxxxxxx Subsidiary
("Xxxxxxxxxx Premises"): (x) no part of the Xxxxxxxxxx Premises has
been used for the generation, manufacture, handling, storage, or
disposal of Hazardous Substances; (y) except as disclosed in Section
3.19 of the Xxxxxxxxxx Disclosure Schedule, the Xxxxxxxxxx Premises do
not contain, and have never contained, an underground storage tank; and
(z) the Xxxxxxxxxx Premises do not contain and are not contaminated by
any quantity of a Hazardous Substance from any source. With respect to
any underground storage tank listed in Section 3.19 of the Xxxxxxxxxx
Disclosure Statement as an exception to the foregoing, such underground
storage tank has been removed in compliance with the Environmental
Laws, and has not been the source of any release of a Hazardous
Substance into the environment, unless otherwise set forth in Section
3.19 of the Xxxxxxxxxx Disclosure Schedule.
3.20 CONTRACTS AND COMMITMENTS. Section 3.20 of the Xxxxxxxxxx
Disclosure Schedule contains, and shall be supplemented by Xxxxxxxxxx and Home
Bank, as required by Section 5.10 hereof, so as to contain at the Closing Date
copies of each of the following documents, certified by an officer of Xxxxxxxxxx
to be true and correct copies of such documents on the dates of such
certificates:
(a) a list and description of each outstanding loan agreement,
mortgage, pledge agreement or other similar document or commitment to
extend credit to any officer or director of Xxxxxxxxxx or any
Xxxxxxxxxx Subsidiary, as well as a listing of all deposits or deposit
surrogates, including the amount, type and interest being paid thereon,
to which Xxxxxxxxxx or any Xxxxxxxxxx Subsidiary is a party under which
it may (contingently or otherwise) have any liability involving any
officer or director of Xxxxxxxxxx or any Xxxxxxxxxx Subsidiary;
(b) a list and description of each outstanding letter of
credit and each commitment to issue a letter of credit in excess of
$25,000 to which Xxxxxxxxxx or any Xxxxxxxxxx Subsidiary is a party
and/or under which it may (contingently or otherwise) have any
liability;
(c) a list and description of each contract or agreement (not
otherwise included in the Xxxxxxxxxx Disclosure Schedule or
specifically excluded therefrom in accordance with the terms of this
Agreement) involving goods, services or occupancy and which (i) has a
term of more than six months; (ii) cannot be terminated on thirty days
(or less) written notice without penalty; and (iii) involves an annual
expenditure by Xxxxxxxxxx or any Xxxxxxxxxx Subsidiary in excess of
$25,000;
(d) a list and description of each contract or commitment
(other than Xxxxxxxxxx Permitted Liens as defined in Section 3.22(c))
hereof) affecting ownership
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of, title to, use of, or any interest in real property which is
currently owned by Xxxxxxxxxx or any Xxxxxxxxxx Subsidiary, and a list
and description of all real property owned, leased or licensed by
Xxxxxxxxxx or any Xxxxxxxxxx Subsidiary;
(e) a list of all fees, salaries, bonuses and other forms of
compensation including but not limited to, country club memberships,
automobiles available for personal use, and credit cards available for
personal use, provided by Xxxxxxxxxx or any Xxxxxxxxxx Subsidiary to
any employee, officer, or director or former employee, officer or
director of Xxxxxxxxxx or any Xxxxxxxxxx Subsidiary who earns in excess
of $50,000 annually;
(f) a list and description of each commitment made by
Xxxxxxxxxx or any Xxxxxxxxxx Subsidiary to or with any of its officers,
directors or employees extending for a period of more than six months
from the date hereof or providing for earlier termination only upon the
payment of a penalty or equivalent thereto;
(g) the Articles of Incorporation, Charters, Code or
Regulations, and Bylaws and specimen certificates of each type of
security issued by Xxxxxxxxxx and each Xxxxxxxxxx Subsidiary;
(h) a list and description of each other contract or
commitment providing for payment based in any manner upon outstanding
loans or profits of Xxxxxxxxxx or any Xxxxxxxxxx Subsidiary;
(i) a list and description of all powers of attorney granted
by Xxxxxxxxxx or any Xxxxxxxxxx Subsidiary which are currently in
force;
(j) a list and description of all policies of insurance
currently maintained by Xxxxxxxxxx or any Xxxxxxxxxx Subsidiary and a
list and description of all unsettled or outstanding claims of
Xxxxxxxxxx or any Xxxxxxxxxx Subsidiary which have been, or to the best
knowledge of Xxxxxxxxxx and Home Bank, will be, filed with the
companies providing insurance coverage for Xxxxxxxxxx or any Xxxxxxxxxx
Subsidiary (except for routine claims for health benefits);
(k) each collective bargaining agreement to which Xxxxxxxxxx
or any Xxxxxxxxxx Subsidiary is a party and all affirmative action
plans or programs covering employees of Xxxxxxxxxx or any Xxxxxxxxxx
Subsidiary, as well as all employee handbooks, policy manuals, rules
and standards of employment promulgated by Xxxxxxxxxx or any Xxxxxxxxxx
Subsidiary;
(l) each lease or license with respect to real or personal
property, whether as lessor, lessee, licensor or licensee, with annual
rental or other payments due thereunder in excess of $10,000 to which
Xxxxxxxxxx or any Xxxxxxxxxx Subsidiary is a
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47
party, which does not expire within six months from the date hereof and
cannot be terminated upon thirty days (or less) written notice without
penalty;
(m) all employment, consulting, financial advisory, investment
banking, and professional services contracts to which Xxxxxxxxxx or any
Xxxxxxxxxx Subsidiary is a party;
(n) all judgments, orders, injunctions, court decrees or
settlement agreements arising out of or relating to the labor and
employment practices or decisions of Xxxxxxxxxx or any Xxxxxxxxxx
Subsidiary which, by their terms, continue to bind or affect Xxxxxxxxxx
or any Xxxxxxxxxx Subsidiary;
(o) all orders, decrees, memorandums, agreements or
understandings with regulatory agencies binding upon or affecting the
current operations of Xxxxxxxxxx or any Xxxxxxxxxx Subsidiary or any of
their directors or officers in their capacities as such;
(p) all trademarks, trade names, service marks, patents, or
copyrights, whether registered or the subject of an application for
registration, which are owned by Xxxxxxxxxx or any Xxxxxxxxxx
Subsidiary or licensed from a third party;
(q) all policies formally adopted by the Board of Directors of
Xxxxxxxxxx or any Xxxxxxxxxx Subsidiary as currently in effect with
respect to environmental matters and copies of all policies that have
been in effect during the last five (5) years regarding the performance
of environmental investigations of properties accepted as collateral
for loans, including the effective dates of all such policies; and
(r) each other agreement to which Xxxxxxxxxx or any Xxxxxxxxxx
Subsidiary is a party (which does not expire within six months from the
date hereof and cannot be terminated upon thirty days (or less) written
notice without penalty) which individually during its term could commit
Xxxxxxxxxx or any Xxxxxxxxxx Subsidiary to an expenditure (either
individually or through a series of installments) in excess of $25,000
or which creates a material right or benefit to receive payments, goods
or services not referred to elsewhere in this Section 3.20 including
without limitation:
(i) each agreement of guaranty or indemnification
running to any person;
(ii) each agreement containing any covenant limiting
the right of Xxxxxxxxxx or any Xxxxxxxxxx Subsidiary to engage
in any line of business or to compete with any person;
(iii) each agreement with respect to any license,
permit and similar matter that is necessary to the operations
of Xxxxxxxxxx or any Xxxxxxxxxx
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Subsidiary;
(iv) each agreement that requires the consent or
approval of any other party in order to consummate the Merger;
(v) each agreement relating to the servicing of loans
and each mortgage forward commitment and similar agreement
pursuant to which Xxxxxxxxxx or any Xxxxxxxxxx Subsidiary
sells to others mortgages which it originates;
(vi) each contract relating to the purchase or sale
of financial or other futures, or any put or call option
relating to cash, securities or commodities and each interest
rate swap agreement or other agreement relating to the hedging
of interest rate risks and each agreement or arrangement
described in Section 3.16(d) hereof; and
(vii) each contract or agreement (with the exception
of the Federal National Mortgage Association or Federal Home
Loan Mortgage Corporation Seller's Guide), including but not
limited to each contract or agreement pursuant to which
Xxxxxxxxxx or any Xxxxxxxxxx Subsidiary has sold, transferred,
assigned or agreed to service any loan, which provides for any
recourse or indemnification obligation on the part of
Xxxxxxxxxx or any Xxxxxxxxxx Subsidiary; the name and address
of each person which might or could be entitled to recourse
against or indemnification from Xxxxxxxxxx or any Xxxxxxxxxx
Subsidiary; and the monetary amount of each actual or
potential recourse or indemnification obligation under each
such contract or agreement.
3.21 DEFAULTS. There has not been any default in any material
obligation to be performed by Xxxxxxxxxx or any Xxxxxxxxxx Subsidiary under any
contract or commitment, and neither Xxxxxxxxxx nor or any Xxxxxxxxxx Subsidiary
has waived, and will not waive prior to the Effective Time, any material right
under any contract or commitment. To the best knowledge of Xxxxxxxxxx and Home
Bank, no other party to any contract or commitment is in default in any material
obligation to be performed by such party.
3.22 OPERATIONS SINCE DECEMBER 31, 1996. Between December 31, 1996 and
the date hereof, except as set forth in Section 3.22 of the Xxxxxxxxxx
Disclosure Schedule, there has not been:
(a) any increase in the compensation payable or to become
payable by Xxxxxxxxxx or any Xxxxxxxxxx Subsidiary to any employee,
officer or director, other than routine annual increases to rank and
file employees consistent with past practices;
(b) except as permitted in Section 4.1(a) hereof, any payment
of dividends or other distributions by Xxxxxxxxxx to its stockholders
or any redemption by
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Xxxxxxxxxx of its capital stock;
(c) any mortgage, pledge or subjection to lien, charge or
encumbrance of any kind of or on any asset, tangible or intangible, of
Xxxxxxxxxx or any Xxxxxxxxxx Subsidiary, except the following (each of
which, whether arising before or after the date hereof, is herein
referred to as a "Xxxxxxxxxx Permitted Lien"): (i) liens arising out of
judgments or awards in respect of which Xxxxxxxxxx or any Xxxxxxxxxx
Subsidiary is in good faith prosecuting an appeal or proceeding for
review and in respect of which it has secured a subsisting stay of
execution pending such appeal of proceeding; (ii) liens for taxes,
assessments, and other governmental charges or levies, the payment of
which is not past due, or as to which Xxxxxxxxxx or any Xxxxxxxxxx
Subsidiary is diligently contesting in good faith and by appropriate
proceeding either the amount thereof or the liability therefor or both;
(iii) deposits, liens or pledges to secure payments of worker's
compensation, unemployment insurance, pensions, or other social
security obligations, or the performance of bids, tenders, leases,
contracts (other than contracts for the payment of money), public or
statutory obligations, surety, stay or appeal bonds, or similar
obligations arising in the ordinary course of business; (iv) zoning
restrictions, easements, licenses and other restrictions on the use of
real property or any interest therein, or minor irregularities in title
thereto, which do not materially impair the use of such property or the
merchantability or the value of such property or interest therein; (v)
purchase money mortgages or other purchase money or vendor's liens or
security interests (including, without limitation, finance leases),
provided that no such mortgage, lien or security interest shall extend
to or cover any other property of Xxxxxxxxxx or any Xxxxxxxxxx
Subsidiary other than that so purchased; and (vi) pledges and liens
given to secure deposits and other liabilities of Xxxxxxxxxx or any
Xxxxxxxxxx Subsidiary arising in the ordinary course of business;
(d) any creation or assumption of indebtedness (including the
extension or renewal of any existing indebtedness, or the increase
thereof) by Xxxxxxxxxx or any Xxxxxxxxxx Subsidiary for borrowed money,
or otherwise, other than in the ordinary course of business, none of
which is in default;
(e) the establishment of any new, modification of or amendment
to, or increase in the formula for contributions to or benefits under,
any Xxxxxxxxxx Benefit Plan by Xxxxxxxxxx or any Xxxxxxxxxx Subsidiary;
(f) any action by Xxxxxxxxxx or any Xxxxxxxxxx Subsidiary
seeking any cancellation of, or decrease in the insured limit under, or
increase in the deductible amount or the insured's retention (whether
pursuant to coinsurance or otherwise) of or under, any policy of
insurance maintained directly or indirectly by Xxxxxxxxxx or any
Xxxxxxxxxx Subsidiary on any of their respective assets or businesses,
including but not by way of limitation, fire and other hazard insurance
on its assets, automobile liability insurance, general public liability
insurance, and directors' and officers' liability insurance; and if an
insurer takes any such action, Xxxxxxxxxx shall promptly notify
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COFI;
(g) any change in Xxxxxxxxxx'x independent auditors, historic
methods of accounting (other than as required by generally accepted
accounting principles or regulatory accounting principles), or in its
system for maintaining its equipment and real estate;
(h) any purchase, whether for cash or secured or unsecured
obligations (including finance leases) by Xxxxxxxxxx or any Xxxxxxxxxx
Subsidiary of any fixed asset which either (i) has a purchase price
individually or in the aggregate in excess of $50,000 or (ii) is
outside of the ordinary course of business;
(i) any sale or transfer of any asset in excess of $50,000 of
Xxxxxxxxxx or any Xxxxxxxxxx Subsidiary or outside of the ordinary
course of business with the exception of loans and marketable
securities that are held for sale and sold in the ordinary course of
business at market prices;
(j) any cancellation or compromise of any debt to, claim by or
right of, Xxxxxxxxxx or any Xxxxxxxxxx Subsidiary except in the
ordinary course of business;
(k) any amendment or termination of any contract or commitment
to which Xxxxxxxxxx or any Xxxxxxxxxx Subsidiary is a party, other than
in the ordinary course of business;
(l) any material damage or destruction to any assets or
property of Xxxxxxxxxx or any Xxxxxxxxxx Subsidiary whether or not
covered by insurance;
(m) any change in the loan underwriting policies or practices
of any Xxxxxxxxxx Subsidiary;
(n) any transaction of business or activity undertaken by
Xxxxxxxxxx or any Xxxxxxxxxx Subsidiary outside the ordinary course of
business consistent with past practices;
(o) any agreement or commitment to do any of the foregoing; or
(p) any event or condition of any character (other than
changes in legal, economic or other conditions which are not specially
or uniquely applicable to Xxxxxxxxxx or any Xxxxxxxxxx Subsidiary)
adversely affecting the business, operations or financial condition of
Xxxxxxxxxx on a consolidated basis.
3.23 CORPORATE RECORDS. The corporate record books, transfer books
and stock ledgers of Xxxxxxxxxx and each Xxxxxxxxxx Subsidiary are complete and
accurate in all material
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respects and reflect all meetings, consents and other material actions of the
organizers, incorporators, stockholders, Boards of Directors and committees of
the Boards of Directors of Xxxxxxxxxx and each such Subsidiary, and all
transactions in their respective capital stocks, since their respective
inceptions.
3.24 UNDISCLOSED LIABILITIES. All of the Liabilities have, in the case
of Xxxxxxxxxx and the Xxxxxxxxxx Subsidiaries, been reflected, disclosed or
reserved against in the Xxxxxxxxxx Financial Statements as of December 31, 1996
or in the notes thereto, and Xxxxxxxxxx and the Xxxxxxxxxx Subsidiaries have no
other Liabilities except (a) Liabilities incurred since December 31, 1996 in the
ordinary course of business or (b) as disclosed in Section 3.24 of the
Xxxxxxxxxx Disclosure Schedule.
3.25 ASSETS.
(a) Xxxxxxxxxx and the Xxxxxxxxxx Subsidiaries have good and
marketable title to their real properties, including any leaseholds and
ground leases, and their other assets and properties, all as reflected
as owned or held by Xxxxxxxxxx or any Xxxxxxxxxx Subsidiary in the
Xxxxxxxxxx Financial Statements dated as of December 31, 1996, and
those acquired since such date, except for (i) assets and properties
disposed of since such date in the ordinary course of business and (ii)
Xxxxxxxxxx Permitted Liens none of which, in the aggregate, except as
set forth in the Xxxxxxxxxx Financial Statements dated December 31,
1996 or in Section 3.25 of the Xxxxxxxxxx Disclosure Schedule, are
material to the assets of Xxxxxxxxxx on a consolidated basis. All
buildings, structures, fixtures and appurtenances comprising part of
the real properties of Xxxxxxxxxx and the Xxxxxxxxxx Subsidiaries
(whether owned or leased) are, in the opinion of management of
Xxxxxxxxxx and Home Bank, in good operating condition and have been
well maintained, reasonable wear and tear excepted. Title to all real
property owned by Xxxxxxxxxx and the Xxxxxxxxxx Subsidiaries is held in
fee simple, except as otherwise noted in the Xxxxxxxxxx Financial
Statements as of December 31, 1996 or as set forth in Section 3.25 of
the Xxxxxxxxxx Disclosure Schedule. Xxxxxxxxxx and the Xxxxxxxxxx
Subsidiaries have title or other rights to its assets sufficient in all
material respects for the conduct of their respective businesses as
presently conducted, and except as set forth in the Xxxxxxxxxx
Financial Statements dated as of December 31, 1996 or in Section 3.25
of the Xxxxxxxxxx Disclosure Schedule, such assets are free, clear and
discharged of and from any and all liens, charges, encumbrances,
security interests and/or equities which are material to Xxxxxxxxxx or
any Xxxxxxxxxx Subsidiary.
(b) All leases pursuant to which Xxxxxxxxxx or any Xxxxxxxxxx
Subsidiary, as lessee, leases real or personal property are, to the
best knowledge of Xxxxxxxxxx and Home Bank, valid, effective, and
enforceable against the lessor in accordance with their respective
terms. There is not under any of such leases any existing default, or
any event which with notice or lapse of time or both would constitute a
default, with respect to either Xxxxxxxxxx or any Xxxxxxxxxx
Subsidiary, or to the best knowledge of Xxxxxxxxxx and Home Bank, the
other party. Except as disclosed in Section 3.25 of
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52
the Xxxxxxxxxx Disclosure Schedule, none of such leases contains a
prohibition against assignment by Xxxxxxxxxx or any Xxxxxxxxxx
Subsidiary, by operation of law or otherwise, or any other provision
which would preclude the surviving corporation or resulting institution
or any Xxxxxxxxxx Subsidiary from possessing and using the leased
premises for the same purposes and upon the same rental and other terms
upon the consummation of the Merger as are applicable to the use by
Xxxxxxxxxx or any Xxxxxxxxxx Subsidiary as of the date of this
Agreement.
3.26 INDEMNIFICATION. To the best knowledge of Xxxxxxxxxx and Home
Bank, except as set forth in Section 3.26 of the Xxxxxxxxxx Disclosure Schedule,
no action or failure to take action by any director, officer, employee or agent
of Xxxxxxxxxx or any Xxxxxxxxxx Subsidiary has occurred which would give rise to
a claim by any such person for indemnification from Xxxxxxxxxx or any Xxxxxxxxxx
Subsidiary under the corporate indemnification provisions of Xxxxxxxxxx or any
Xxxxxxxxxx Subsidiary in effect on the date of this Agreement.
3.27 INSIDER INTERESTS. All outstanding loans and other contractual
arrangements (including deposit relationships) between Xxxxxxxxxx or any
Xxxxxxxxxx Subsidiary and any officer, director or employee of Xxxxxxxxxx or any
Xxxxxxxxxx Subsidiary conform to the applicable rules and regulations and
requirements of all applicable regulatory agencies which were in effect when
such loans and other contractual arrangements were entered into. Except as set
forth in Section 3.27 of the Xxxxxxxxxx Disclosure Schedule, no officer,
director or employee of Xxxxxxxxxx or any Xxxxxxxxxx Subsidiary has any material
interest in any property, real or personal, tangible or intangible, used in or
pertaining to the business of Xxxxxxxxxx or any Xxxxxxxxxx Subsidiary.
3.28 REGISTRATION OBLIGATIONS. Except as set forth in Section 3.28 of
the Xxxxxxxxxx Disclosure Schedule, neither Xxxxxxxxxx nor any Xxxxxxxxxx
Subsidiary is under any obligation, contingent or otherwise, which will survive
the Effective Time by reason of any agreement to register any of its securities
under the Securities Act or other federal or state securities laws or
regulations.
3.29 REGULATORY, TAX AND ACCOUNTING MATTERS. Xxxxxxxxxx and Home Bank
have not taken or agreed to take any action, nor does it have knowledge of any
fact or circumstance, that would (i) materially impede or delay the consummation
of the transactions contemplated by this Agreement or the ability of the parties
to obtain any approval of any regulatory authority required for the transactions
contemplated by this Agreement or to perform their covenants and agreements
under this Agreement or (ii) prevent the Merger from qualifying as a pooling of
interests for accounting purposes or the Merger from qualifying as a
reorganization within the meaning of Section 368(a) of the Code.
3.30 BROKERS AND FINDERS. Except as set forth in the agreement with
Xxxxxxx Xxxx & Co., a division of Xxxxx, Xxxxxxxx & Xxxxx, Inc., dated May 8,
1996 (which agreement has not been amended since such date), a copy of which has
previously been provided to COFI, neither Xxxxxxxxxx nor any Xxxxxxxxxx
Subsidiary nor any of their respective officers,
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53
directors or employees has employed any broker or finder or incurred any
liability for any financial advisory fees, brokerage fees, commissions or
finders' fees, and no other broker or finder has acted directly or indirectly
for Xxxxxxxxxx or any Xxxxxxxxxx Subsidiary in connection with this Agreement or
the transactions contemplated hereby.
3.31 ACCURACY OF INFORMATION. The statements of Xxxxxxxxxx and Home
Bank contained in this Agreement, the Schedules hereto and in any other written
document executed and delivered by or on behalf of Xxxxxxxxxx or Home Bank
pursuant to the terms of this Agreement are true and correct in all material
respects.
3.32 FAIRNESS OPINION. Xxxxxxxxxx has received from Xxxxxxx Xxxx & Co.,
a division of Xxxxx, Xxxxxxxx & Xxxxx, Inc. a fairness opinion, dated as of the
date of this Agreement, to the effect that the Merger Consideration to be
received by the holders of Xxxxxxxxxx Common Stock pursuant to this Agreement
and the Company Merger is fair to such holders from a financial point of view.
3.33 GOVERNMENTAL APPROVALS AND OTHER CONDITIONS. To the best knowledge
of Xxxxxxxxxx and Home Bank, there is no reason relating specifically to
Xxxxxxxxxx or any of its Subsidiaries why (a) the approvals that are required to
be obtained from regulatory authorities having approval authority in connection
with the transactions contemplated hereby should not be granted, (b) such
regulatory approvals should be subject to a condition which would differ from
conditions customarily imposed by such regulatory authorities in orders
approving acquisitions of the type contemplated hereby or (c) any of the
conditions precedent as specified in Article VI hereof to the obligations of any
of the parties hereto to consummate the transactions contemplated hereby are
unlikely to be fulfilled within the applicable time period or periods required
for satisfaction of such condition or conditions.
ARTICLE IV
COVENANTS OF XXXXXXXXXX
4.1 BUSINESS IN ORDINARY COURSE.
(a) Without the prior written consent of COFI, Xxxxxxxxxx
shall not declare or pay any dividend or make any other distribution
with respect to its capital stock whether in cash, stock or other
property, after the date of this Agreement, except it may declare and
pay its regular quarterly cash dividend of not more than $.14 per share
on Xxxxxxxxxx Common Stock; provided the declaration of the last
dividend by Xxxxxxxxxx prior to consummation of the Company Merger and
the payment thereof shall be coordinated with, and subject to the
approval of COFI, so as to preclude any duplication of dividend
benefit.
(b) Xxxxxxxxxx and the Xxxxxxxxxx Subsidiaries shall continue
to carry on, after the date hereof, their respective businesses and the
discharge or incurring of
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54
obligations and liabilities, only in the usual, regular and ordinary
course of business, as heretofore conducted, and by way of
amplification and not limitation, Xxxxxxxxxx and each of the Xxxxxxxxxx
Subsidiaries will not, without the prior written consent of COFI (which
consent in the case of subparts (xiv) and (xvii) below shall not be
unreasonably withheld or delayed):
(i) issue any capital stock or any options, warrants,
or other rights to subscribe for or purchase capital stock or
any securities convertible into or exchangeable for any
capital stock, except pursuant to the Xxxxxxxxxx Stock Options
outstanding on the date hereof;
(ii) directly or indirectly redeem, purchase or
otherwise acquire any capital stock or ownership interests of
Xxxxxxxxxx or any of the Xxxxxxxxxx Subsidiaries;
(iii) effect a reclassification, recapitalization,
split-up, exchange of shares, readjustment or other similar
change in or to any capital stock or otherwise reorganize or
recapitalize;
(iv) change its Charter, Articles of Incorporation,
Code of Regulations or Bylaws;
(v) enter into or modify any employment agreement,
severance agreement, change of control agreement, or plan
relative to the foregoing; or grant any increase (other than
ordinary and normal increases to rank and file employees
consistent with past practices) in the compensation payable or
to become payable to directors, officers or employees except
as required by law, pay or agree to pay any bonus, or adopt or
make any change in any bonus, insurance, pension, or other
Xxxxxxxxxx Benefit Plan and provided further that Xxxxxxxxxx
and Home Bank shall be permitted, consistent with past
practices, to make contributions to the employee stock
ownership plan and the 401(k) plan of Xxxxxxxxxx, pursuant to
its existing program for such contributions, which shall
accrue from the date hereof to the Closing Date;
(vi) except for the short-term renewal of Federal
Home Loan Bank ("FHLB") advances outstanding at the date of
this Agreement, raising short-term funds against its existing
line of credit with the FHLB and deposit-taking in the
ordinary course of its business, borrow or agree to borrow any
funds, including but not limited to repurchase transactions,
or indirectly guarantee or agree to guarantee any obligations
of others;
(vii) make or commit to make any new loan or letter
of credit, or any new or additional discretionary advance
under any existing loan or line of credit, or restructure any
existing loan or line of credit, (x) in the case of a
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consumer loan or extension of credit, in a principal amount in
excess of $250,000 or that would increase the aggregate credit
outstanding in this category to any one borrower (or group of
affiliated borrowers) to more than $250,000, (y) in the case
of a loan secured by an owner occupied single-family principal
residence, in a principal amount in excess of $350,000, or (z)
in the case of a commercial loan or mortgage in a principal
amount in excess of $500,000 or that would increase the
aggregate credit outstanding in this category to any one
borrower (or group of affiliated borrowers) to more than
$500,000, without the prior written consent of COFI acting
through its Chief Executive Officer in a written notice to
Xxxxxxxxxx, which approval or rejection shall be given on a
timely basis after delivery by Xxxxxxxxxx to such officer of
COFI of the complete loan package;
(viii) make any material changes in its policies
concerning loan underwriting or which persons may approve
loans;
(ix) enter into any securities transaction for its
own account or purchase or otherwise acquire any investment
security for its own account other than U.S. Treasury
obligations with maturities of less than one year and deposits
in an overnight account at the FHLB of Cincinnati, provided
COFI's consent shall not be unreasonably withheld or delayed
relating to the purchase of other readily marketable
investment securities;
(x) increase or decrease the rate of interest paid on
time deposits or on certificates of deposit, except in a
manner and pursuant to policies consistent with past
practices;
(xi) enter into, modify or extend any agreement,
contract or commitment out of the ordinary course of business
or having a term in excess of six months and involving an
expenditure in excess of ten thousand dollars ($10,000), other
than letters of credit, loan agreements, deposit agreements,
and other lending, credit and deposit documents made in the
ordinary course of business;
(xii) except in the ordinary course of business,
place on any of its assets or properties any mortgage, pledge,
lien, charge, or other encumbrance;
(xiii) cancel any material indebtedness owing to it
or any claims which it may possess or waive any rights of
material value;
(xiv) sell or otherwise dispose of any real property
or any material amount of tangible or intangible personal
property other than (a) properties acquired in foreclosure or
otherwise in the ordinary collection of indebtedness owed to
Home Bank, (b) student loans or (c) loans which are held for
sale by
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Home Bank and are sold in the secondary market within sixty
(60) days of origination;
(xv) foreclose upon or otherwise take title to or
possession or control of any real property without first
obtaining a phase one environmental report thereon; provided,
however, that Home Bank and its Subsidiaries shall not be
required to obtain such a report with respect to single
family, non-agricultural residential property of one acre or
less to be foreclosed upon unless it has reason to believe
that such property might contain Hazardous Substances;
(xvi) knowingly or wilfully commit any act or fail to
commit any act which will cause a material breach of any
agreement, contract or commitment;
(xvii) purchase any real or personal property or make
any capital expenditure where the amount paid or committed
therefor is in excess of twenty-five thousand dollars
($25,000), except for outstanding commitments set forth in
Section 3.20 of the Xxxxxxxxxx Disclosure Schedule;
(xviii) in the case of Home Bank, voluntarily make
any material changes in or to its asset and deposit mix;
(xix) engage in any activity or transaction outside
the ordinary course of business;
(xx) enter into or acquire any derivatives contract
or structured note;
(xxi) enter into any new, or modify, amend or extend
the terms of any existing contracts relating to the purchase
or sale of financial or other futures, or any put or call
option relating to cash, securities or commodities or any
interest rate swap agreements or other agreements relating to
the hedging of interest rate risk;
(xxii) take any action that would (A) materially
impede or delay the consummation of the transactions
contemplated by this Agreement or the ability of the parties
hereto to obtain any approval of any regulatory authority
required for the transactions contemplated by this Agreement
or to perform its covenants and agreements under this
Agreement or (B) prevent the Merger from qualifying as a
pooling of interests for accounting purposes or as a
reorganization within the meaning of Section 368(a) of the
Code; or
(xxiii) agree in writing or otherwise to take any of
the foregoing actions or engage in any of the foregoing
activities.
Nothing contained in this Section 4.1(b) is intended to impose
an obligation
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upon Xxxxxxxxxx or Home Bank to take any action in violation of the
fiduciary duties of its directors to its stockholders.
(c) Xxxxxxxxxx and the Xxxxxxxxxx Subsidiaries shall not,
without the prior written consent of COFI, engage in any transaction or
take any action that would render untrue any of the representations and
warranties of Xxxxxxxxxx contained in Article III hereof, if such
representations and warranties were given as of the date of such
transaction or action.
(d) Xxxxxxxxxx will, and will cause the Xxxxxxxxxx
Subsidiaries to, use their best efforts to maintain their respective
properties and assets in their present state of repair, order and
condition, reasonable wear and tear excepted, and to maintain and keep
in full force and effect all policies of insurance presently in effect,
including insurance of accounts with the FDIC. Xxxxxxxxxx will, and
will cause the Xxxxxxxxxx Subsidiaries to, take all requisite action
(including without limitation the making of claims and the giving of
notices) pursuant to its directors' and officers' liability insurance
policy or policies in order to preserve all rights thereunder with
respect to all matters which could reasonably give rise to a claim
prior to the Effective Time.
(e) Xxxxxxxxxx shall promptly notify COFI in writing of the
occurrence of any matter or event known to and directly involving
Xxxxxxxxxx or any Xxxxxxxxxx Subsidiary that is reasonably likely to
result in a Material Adverse Effect on Xxxxxxxxxx or impair the ability
of Xxxxxxxxxx or Home Bank to consummate the transactions contemplated
herein.
(f) Xxxxxxxxxx shall provide to COFI such reports on
litigation involving Xxxxxxxxxx and each of the Xxxxxxxxxx Subsidiaries as COFI
shall reasonably request, provided that Xxxxxxxxxx shall not be required to
divulge information to the extent that, in the good faith opinion of its
counsel, by doing so, it would risk waiver of the attorney-client privilege to
its detriment.
4.2 CONFORMING ACCOUNTING AND RESERVE POLICIES; RESTRUCTURING EXPENSES.
At the request of COFI, Home Bank agrees immediately prior to Closing and after
satisfaction or waiver of the conditions to Closing set forth in Article VI
hereof, to establish and take such reserves and accruals as COFI reasonably
shall request to conform Home Bank's loan, accrual, reserve and other accounting
policies to the policies of Charter One Bank, provided however, such requested
conforming adjustments shall not be taken into account in determining whether
Xxxxxxxxxx has experienced a Material Adverse Effect.
4.3 CERTAIN ACTIONS.
(a) Neither Xxxxxxxxxx (nor any of its Subsidiaries) (i) shall
solicit, initiate, participate in discussions of, or encourage or take
any other action to facilitate (including by way of the disclosing or
furnishing of any information that it is not
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58
legally obligated to disclose or furnish) any inquiry or the making of
any proposal relating to any Acquisition Proposal (as defined below)
with respect to itself or any of its Subsidiaries or (ii) shall (A)
solicit, initiate, participate in discussions of, or encourage or take
any other action to facilitate any inquiry or proposal, or (B) enter
into any agreement, arrangement, or understanding (whether written or
oral) regarding any proposal or transaction providing for or requiring
it to abandon, terminate or fail to consummate this Agreement, or
compensating it or any of its Subsidiaries under any of the instances
described in this clause. Xxxxxxxxxx and Home Bank shall immediately
instruct and otherwise use their best efforts to cause their directors,
officers, employees, agents, advisors (including, without limitation,
any investment banker, attorney, or accountant retained by it or any of
its Subsidiaries), consultants and other representatives to comply with
such prohibitions. Xxxxxxxxxx and Home Bank shall immediately cease and
cause to be terminated any existing activities, discussions, or
negotiations with any parties conducted heretofore with respect to such
activities. Notwithstanding the foregoing, Xxxxxxxxxx may provide
information at the request of or enter into negotiations with a third
party with respect to an Acquisition Proposal if the Board of Directors
of Xxxxxxxxxx determines, in good faith after consultation with
counsel, that the exercise of its fiduciary duties to Xxxxxxxxxx'x
stockholders under applicable law requires it to take such action, and,
provided further, that Xxxxxxxxxx may not, in any event, provide to
such third party any information which it has not provided to COFI.
Xxxxxxxxxx shall promptly notify COFI orally and in writing in the
event it receives any such inquiry or proposal and shall provide
reasonable detail of all relevant facts relating to such inquiries.
This Section shall not prohibit accurate disclosure by Xxxxxxxxxx in
any document (including the Proxy Statement and the Registration
Statement) or other disclosure under applicable law if in the opinion
of the Board of Directors of Xxxxxxxxxx, disclosure is appropriate
under applicable law.
(b) "Acquisition Proposal" shall, with respect to Xxxxxxxxxx,
mean any of the following (other than the Merger): (i) a merger or
consolidation, or any similar transaction of any company with either
Xxxxxxxxxx or any Subsidiary of Xxxxxxxxxx, (ii) a purchase lease or
other acquisition of a material portion of all the assets of either
Xxxxxxxxxx or any Subsidiary of Xxxxxxxxxx, (iii) a purchase or other
acquisition of "beneficial ownership" by any "person" or "group" (as
such terms are defined in Section 13(d)(3) of the Exchange Act)
(including by way of merger, consolidation, share exchange, or
otherwise) which would cause such person or group to become the
beneficial owner of securities representing 25% or more of the voting
power of either Xxxxxxxxxx or any Subsidiary of Xxxxxxxxxx, (iv) a
tender or exchange offer to acquire securities representing 25% or more
of the voting power of Xxxxxxxxxx, (v) a public proxy or consent
solicitation made to stockholders of Xxxxxxxxxx seeking proxies in
opposition to any proposal relating to any of the transactions
contemplated by this Agreement, (vi) the filing of an application or
notice with the OTS or any other federal or state regulatory authority
(which application has been accepted for processing) seeking approval
to engage in one or more of the transactions referenced
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in clauses (i) through (iv) above, or (vii) the making of a bona fide
offer to the Board of Directors Xxxxxxxxxx or Home Bank by written
communication, that is or becomes the subject of public disclosure, to
engage in one or more of the transactions referenced in clauses (i)
through (v) above.
ARTICLE V
ADDITIONAL AGREEMENTS
5.1 INSPECTION OF RECORDS; CONFIDENTIALITY.
(a) COFI and Xxxxxxxxxx shall each afford to the other and to
the other's accountants, counsel and other representatives (and their
Subsidiaries) full access during normal business hours during the
period prior to the Effective Time to all of their respective
properties, books, contracts, commitments and records, including all
attorneys' responses to auditors' requests for information, and
accountants' work papers, developed by either of them or their
respective Subsidiaries or their respective accountants or attorneys,
and will permit each other and their respective representatives to
discuss such information directly with each other's officers,
directors, employees, attorneys and accountants. COFI and Xxxxxxxxxx
shall each use their best efforts to furnish to the other all other
information concerning its business, properties and personnel as such
other party may reasonably request; however, such access may be limited
by the party from whom access is sought so as to avoid unreasonable
disruption or interference with such party's business operations, as
such party may reasonably determine. Any failure to comply with this
covenant shall be disregarded if promptly corrected without material
adverse consequences to the other party. The availability or actual
delivery of information shall not affect the representations,
warranties, covenants, and agreements of the party providing such
information that are contained in this Agreement or in any certificates
or other documents delivered pursuant hereto.
(b) All information disclosed by any party to any other party
to this Agreement, whether prior or subsequent to the date of this
Agreement including, without limitation, any information obtained
pursuant to this Section 5.1, shall be kept confidential by such other
party and shall not be used by such other party otherwise as herein
contemplated. In the event that this Agreement is terminated, each
party shall return all documents furnished hereunder, shall destroy all
documents or portions thereof prepared by such other party that contain
information furnished by another party pursuant hereto and, in any
event, shall hold all information confidential unless or until such
information is or becomes a matter of public knowledge.
5.2 REGISTRATION STATEMENT; STOCKHOLDER APPROVAL. As soon as
practicable after the date hereof, COFI shall file the Registration Statement
with the SEC, and Xxxxxxxxxx and COFI shall use their best efforts to cause the
Registration Statement to become effective under
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the Securities Act. COFI will take any action required to be taken under the
applicable blue sky or securities laws in connection with the issuance of the
shares of COFI Common Stock in the Company Merger. Each party shall furnish all
information concerning it and the holders of its capital stock as the other
party may reasonably request in connection with such action. Xxxxxxxxxx shall
call the Xxxxxxxxxx Stockholders' Meeting as soon as reasonably practicable
after the date of this Agreement for the purpose of voting upon this Agreement
and the Company Merger. In connection with the Xxxxxxxxxx Stockholders' Meeting,
(i) COFI and Xxxxxxxxxx shall jointly prepare the Proxy Statement as part of the
Registration Statement and Xxxxxxxxxx shall mail the Proxy Statement to its
stockholders and (ii) the Board of Directors of Xxxxxxxxxx shall recommend to
its stockholders the approval of this Agreement and the Company Merger;
provided, however, that such recommendation may be withdrawn, modified, or
amended, or not made at all, after the receipt by Xxxxxxxxxx of an offer to
effect an Acquisition Proposal (as defined in Section 4.3 hereof) with
Xxxxxxxxxx to the extent the Board of Directors of Xxxxxxxxxx reasonably
determines that, in the exercise of its fiduciary obligations after consultation
with counsel, it has a duty to do so.
5.3 AGREEMENTS OF AFFILIATES. As soon as practicable after the date of
this Agreement, Xxxxxxxxxx shall deliver to COFI a letter, reviewed by its
counsel, identifying all persons whom Xxxxxxxxxx believes to be "affiliates" of
Xxxxxxxxxx for purposes of Rule 145 under the Securities Act or for purposes of
qualifying for pooling of interests accounting treatment for the Merger.
Xxxxxxxxxx shall use its best efforts to cause each person who is so identified
as an "affiliate" to deliver to COFI, as soon as practicable thereafter, a
written agreement, substantially in the form of Exhibit D, providing that from
the date of such agreement each such person will agree not to sell, pledge,
transfer or otherwise dispose of any shares of stock of Xxxxxxxxxx held by such
person or any shares of COFI Common Stock to be received by such person in the
Company Merger (i) during the period commencing 30 days prior to the Company
Merger and ending at the time of publication of financial results covering at
least 30 days of combined operations after the Company Merger and (ii) at any
time, except in compliance with the applicable provisions of the Securities Act
and other applicable laws and regulations. Prior to the Effective Time,
Xxxxxxxxxx shall amend and supplement such letter and use its best efforts to
cause each additional person who is identified as an "affiliate" to execute a
written agreement as set forth in this Section 5.3.
5.4 EXPENSES. Each party hereto shall bear its own expenses incident to
preparing, entering into and carrying out this Agreement and to consummating the
Merger. Notwithstanding the foregoing, COFI and Xxxxxxxxxx will share equally
all third party printing costs incurred with respect to the Registration
Statement and Proxy Statement in preliminary and final form. The printer shall
be Xxxxx or such other printer selected by COFI that is reasonably acceptable to
Xxxxxxxxxx.
5.5 COOPERATION. Each party covenants that it will use its best efforts
to bring about the transactions contemplated by this Agreement as soon as
practicable, unless this Agreement is terminated as provided herein. Subject to
the terms and conditions herein provided, each of the parties hereto agrees to
use all reasonable efforts to take, or cause to be
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taken, all action, and to do, or cause to be done, all things necessary, proper
or advisable under applicable laws and regulations to consummate and make
effective the transactions contemplated by this Agreement at the earliest
practicable time. All third party costs and expenses incurred by Home Bank at
the direction of COFI in connection with making available to Home Bank's
customers materials relative to the combination of Home Bank and Charter One
Bank, shall be paid by COFI or Charter One Bank. In case at any time after the
Effective Time any further action is necessary or desirable to carry out the
purposes of this Agreement, the proper officers and/or directors of the parties,
shall take all such necessary action. Each party shall use its reasonable best
efforts to preserve for itself and the other parties hereto each available legal
privilege with respect to the confidentiality of their negotiations and related
communications, including the attorney-client privilege.
5.6 REGULATORY APPLICATIONS. The parties shall, as soon as practicable
after the date of this Agreement, file all necessary applications with all
applicable regulatory authorities, and shall use their best efforts to respond
as promptly as practicable to all inquiries received concerning said
applications. In the event the Merger is challenged or opposed by any
administrative or legal proceeding, whether by the United States Department of
Justice or otherwise, the determination of whether and to what extent to seek
appeal or review, administrative or otherwise, or other appropriate remedies
shall be made by COFI after consultation with Xxxxxxxxxx. The party filing an
application shall deliver a copy thereof to the other parties hereto in advance
of filing and copies of all responses from or written communications from
regulatory authorities relating to the Merger or this Agreement (to the extent
permitted by law), and the filing party shall also deliver a final copy of each
regulatory application to the other parties promptly after it is filed with the
appropriate regulatory authority. Each party shall advise the other parties
periodically of the status of each regulatory application.
5.7 FINANCIAL STATEMENTS AND REPORTS. From the date of this Agreement
and prior to the Effective Time: (a) Xxxxxxxxxx will deliver to COFI not later
than forty-five (45) days after the end of any fiscal quarter, the Report of
Condition and Income filed by Home Bank with the OTS; (b) COFI and Xxxxxxxxxx
shall deliver to each other not later than forty-five (45) days after the end of
each quarter, its Report on Form 10-Q for such quarter as filed with the SEC
which shall be prepared in conformity with generally accepted accounting
principles and the rules and regulations of the SEC; and (c) each party will
deliver to the others any and all other material reports filed with the SEC, the
FDIC, the OTS, or any other regulatory agency within five (5) business days of
the filing of any such report.
5.8 NOTICE. At all times prior to the Effective Time, each party shall
promptly notify the other in writing of the occurrence of any event which will
or may result in the failure to satisfy any of the conditions specified in
Sections 6.1 or 6.2 hereof. In the event that any party becomes aware of the
occurrence or impending occurrence of any event which would constitute or cause
a breach by it of any of its representations and warranties, covenants or
agreements herein in any material respect, or would have constituted or caused a
breach by it of its representations and warranties, covenants or agreements
herein in any
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respect, had such an event occurred or been known prior to the date hereof, said
party shall immediately give detailed and written notice thereof to the other
parties, and shall, unless the same has been waived in writing by the other
parties, use its reasonable efforts to remedy the same within 30 days, provided
that such efforts, if not successful, shall not be deemed to satisfy any
condition precedent to the Merger.
5.9 PRESS RELEASE. Except as provided in Section 4.3(a) or as otherwise
reasonably determined by a party to comply with its legal obligations, at all
times prior to the Effective Time, the parties shall mutually agree to the
issuance of any press release or other information to the press or any third
party for general circulation with respect to this Agreement or the transactions
contemplated hereby.
5.10 DELIVERY OF SUPPLEMENTS TO DISCLOSURE SCHEDULES. Five (5) business
days prior to the Effective Time, each party will supplement or amend its
Disclosure Schedule with respect to any matter hereafter arising which, if
existing or occurring at or prior to the date of this Agreement, would have been
required to be set forth or described in such Disclosure Schedule or which is
necessary to correct any information in the Disclosure Schedule or in any
representation and warranty made by the disclosing party which has been rendered
inaccurate thereby. For purposes of determining the accuracy of the
representations and warranties of COFI ,Xxxxxxxxxx and Home Bank contained,
respectively, in Articles II and III hereof in order to determine the
fulfillment of the conditions set forth in Section 6.1(a) and 6.2(a) hereof as
of the date of this Agreement, the Disclosure Schedule of each party shall be
deemed to include only that information contained therein on the date it is
initially delivered to the other party.
5.11 LITIGATION MATTERS. Xxxxxxxxxx and Home Bank will consult with
COFI about any proposed settlement, or any disposition of, any litigation
involving amounts in excess of $10,000.
5.12 TAX OPINION. COFI agrees to obtain a written opinion of Silver,
Xxxxxxxx & Taff, L.L.P., addressed to COFI and Xxxxxxxxxx, dated the Closing
Date, subject to the representations and assumptions referred to therein, and
substantially to the effect that (i) the Company Merger will constitute a
tax-free reorganization within the meaning of Section 368(a) of the Code and
that COFI, Merger Sub and Xxxxxxxxxx will each be a party to a reorganization;
(ii) that no gain or loss would be recognized by any stockholder of Xxxxxxxxxx
upon the exchange of Xxxxxxxxxx Common Stock solely for COFI Common Stock in the
Company Merger, and that the basis of the COFI Common Stock received by each
stockholder of Xxxxxxxxxx who exchanges Xxxxxxxxxx Common Stock solely for COFI
Common Stock in the Company Merger will be the same as the basis of the
Xxxxxxxxxx Common Stock surrendered and exchanged therefor (subject to any
adjustments required as the result of receipt of cash in lieu of a fractional
share of COFI Common Stock); (iii) the holding period of the COFI Common Stock
received by a stockholder of Xxxxxxxxxx in the Company Merger will include the
holding period of the Xxxxxxxxxx Common Stock surrendered and exchanged
therefor, provided that such shares of Xxxxxxxxxx Common Stock were held as a
capital asset by such stockholder at the Effective Time; and (iv) that cash
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received by a Xxxxxxxxxx stockholder in lieu of a fractional share interest of
COFI Common Stock as part of the Company Merger will be treated as having been
received as a distribution in full payment in exchange for the fractional share
interest of COFI Common Stock which such stockholder would otherwise be entitled
to receive and will qualify as a capital gain or loss (assuming the Xxxxxxxxxx
Common Stock was a capital asset in such stockholder's hands at the Effective
Time).
5.13 WRITTEN AGREEMENTS WITH EMPLOYEES; BENEFITS AND RELATED
MATTERS.
(a) WRITTEN AGREEMENTS WITH EMPLOYEES. COFI shall assume all
of the obligations of Home Bank under those five (5) Change In Control
Agreements between Xxxxxxxxxx, Home Bank and Xxxxx X. Xxxx, Xxxxxxx X.
Xxxxx, Xxxxxxx X. Xxxxxxxxxx, Xxxx X. Xxxx and Xxxxxx X. Xxxxx, each
dated August 30, 1996 (the "Severance Agreements"), and shall assume
the Change In Control Benefit obligation of Home Bank under that
certain Employment Agreement between Xxxxxxx X. Valerian, Xxxxxxxxxx,
and Home Bank dated August 28, 1996 (the "Employment Agreement")
subject to the characterization and method of payment thereof being
made in a manner that complies with accounting for the Merger as a
pooling of interests.
(b) GENERAL SEVERANCE. Each person employed by the Xxxxxxxxxx
Subsidiaries as of December 31, 1996 who is employed by the Xxxxxxxxxx
Subsidiaries immediately prior to the Effective Time (other than a
person named in subsection (a) above) will be entitled to receive (in
lieu of any other form of severance) the severance package described
below if such person's employment is terminated without cause within
one year after the Effective Time. In addition, any such employee of
the Xxxxxxxxxx Subsidiaries who voluntarily resigns after being
notified by COFI that, as a condition of employment, such employee must
work at a location outside of the Cleveland MSA or that such employee's
base salary will be decreased, in any case within one year after the
Effective Time, will be entitled to the severance package described
below. The severance package shall consist of (i) three (3) weeks base
pay for every year of full time service with the Xxxxxxxxxx
Subsidiaries prior to the Effective Time, up to a maximum of one year
of base pay, and (ii) continued health insurance coverage for a period
of 90 days after separation of service with Charter Resources Ohio,
Inc., a wholly owned subsidiary of Charter One Bank ("Charter
Resources") paying the employer's portion (50%) of the health insurance
premium. At the request of a severed employee who is entitled to the
aforesaid severance package, outplacement services will be provided by
Charter Resources. COFI acknowledges that the consummation of the
Merger will constitute both a change in control and change in
circumstances under the Severance Agreements and the Employment
Agreement.
(c) CONTINUING EMPLOYEES. To the extent permitted by
applicable law, the former employees of Home Bank (but specifically
excluding any person named in
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subsection (a) above whose employment is terminated and then rehired (a
"New Employee")) who become employees of Charter One Bank or any other
COFI Subsidiary (the "Continuing Employees") shall continue to
participate in the Xxxxxxxxxx Benefit Plans, except where any such Plan
is terminated at the request of COFI at the Effective Time. COFI or any
COFI Subsidiary may amend or terminate any Xxxxxxxxxx Benefit Plan at
any time after the Effective Time, provided, that if the termination or
amendment adversely affects the benefits provided to the Continuing
Employees, Charter One Bank or another COFI Subsidiary shall provide
the Continuing Employees with benefits that are substantially
equivalent to the benefits being received by other similarly situated
employees of Charter One Bank or such other COFI Subsidiary under
comparable plans then in effect, if any. Whenever a Continuing Employee
becomes a participant in an COFI Benefit Plan, such Continuing Employee
shall receive full credit for his past service with Home Bank for
purposes of determining eligibility to participate in and the vesting
benefits of such COFI Benefit Plan (but not for the purpose of accrual
of benefits thereunder). New Employees will not receive any past
service credit. However, both New Employees and Continuing Employees
will not be subject to any exclusion or penalty for pre-existing
conditions that were covered under the Home Bank health plan
immediately prior to the Effective Time or any waiting period relating
to coverage under the COFI health plan. COFI and Charter One Bank will
assume, or will arrange for a qualified person or entity to assume, the
duties of trustee under the Xxxxxxxxxx employee stock ownership plan as
of the Effective Time, and will assume administrative responsibility
for all employee benefit plans of Xxxxxxxxxx or Home Bank as of the
Effective Time.
5.14 RESERVATION OF SHARES TO SATISFY XXXXXXXXXX STOCK OPTIONS. COFI
shall take all corporate action necessary to reserve for issuance a sufficient
number of shares of COFI Common Stock for delivery upon exercise of Xxxxxxxxxx
Stock Options assumed by it in accordance with Section 1.3(g) hereof. As soon as
practicable after the Effective Time, COFI shall file an appropriate
registration statement with respect to the shares of COFI Common Stock subject
to such options and shall use its best efforts to maintain the effectiveness of
such registration statement or registration statements (and maintain the current
status of the prospectus or prospectuses contained therein) for so long as such
options remain outstanding.
5.15 NASDAQ LISTING. COFI shall use all reasonable efforts to cause the
shares of COFI Common Stock to be issued in the Company Merger, and the shares
of COFI Common Stock to be reserved for issuance upon exercise of Xxxxxxxxxx
Stock Options, to be approved for listing on the Nasdaq Stock Market (or such
other national securities exchange or stock market on which the COFI Common
Stock shall then be traded), subject to official notice of issuance, prior to or
as of the Closing.
5.16 DIRECTORS' AND OFFICERS' INDEMNIFICATION INSURANCE. COFI agrees
that the Merger shall not affect or diminish any of Xxxxxxxxxx'x or Home Bank's
duties and obligations of indemnification existing immediately prior to the
Effective Time in favor of the directors, officers, employees and agents of
Xxxxxxxxxx or Home Bank arising by virtue of the
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Articles of Incorporation, Charter , Code of Regulations or Bylaws of Xxxxxxxxxx
or Home Bank in the form in effect at the date of this Agreement or arising by
operation of law, and such duties and obligations shall continue in full force
and effect for so long as they would (but for the Merger) otherwise survive and
continue in full force and effect. All provisions for indemnification and
limitation of liability now existing in favor of the employees, agents,
directors or officers of Xxxxxxxxxx, Home Bank or Xxxxxxxxxx Subsidiaries, as
provided by law or regulation or in their respective Articles of Incorporation
or Codes of Regulation shall survive the Merger, shall be assumed by COFI and
shall continue in full force and effect with respect to acts or omissions
occurring prior to the Effective Time for a period of three years thereafter or
in the case of matters occurring prior to the Effective Time which have not been
resolved prior to the third anniversary of the Effective Time, until such
matters are finally resolved. COFI or Charter One Bank, respectively, shall also
purchase and keep in force for such three year period director's and officer's
liability insurance and fiduciary liability insurance to provide coverage for
acts or omissions of the type and in the amount currently covered by
Xxxxxxxxxx'x existing directors and officers liability insurance and fiduciary
liability insurance for acts or omissions occurring prior to the Effective Time,
to the extent such insurance may be purchased or kept in full force on
commercially reasonable terms taking into account the cost thereof and the
benefits provided thereby (provided that COFI may substitute or cause Xxxxxxxxxx
to substitute therefor single premium tail coverage with policy limits equal to
Home Bank's existing annual coverage limits). To the extent permitted by law,
COFI or Charter One Bank, respectively, shall advance expenses in connection
with the foregoing indemnification.
5.17 REPORTS TO THE SEC. On or after the Effective Time, COFI shall
continue to file all reports and data with the SEC necessary to permit
stockholders of Xxxxxxxxxx who may be deemed affiliates of Xxxxxxxxxx within the
meaning of Rule 145 under the Securities Act to sell COFI Common Stock held or
received by them in connection with the Merger pursuant to Rules 144 and 145
under the Securities Act if they would otherwise be so entitled.
ARTICLE VI
CONDITIONS
6.1 CONDITIONS TO THE OBLIGATIONS OF COFI, CHARTER MICHIGAN AND CHARTER
ONE BANK. Notwithstanding any other provision of this Agreement, the obligations
of COFI, Charter Michigan and Charter One Bank to consummate the Merger are
subject to the following conditions precedent (except as to those which COFI may
chose to waive):
(a) subject to the cure provisions set forth in Section 5.8,
all of the representations and warranties made by Xxxxxxxxxx and Home
Bank in this Agreement and in any documents or certificates provided by
Xxxxxxxxxx and Home Bank shall have been true and correct in all
material respects as of the date of this Agreement and as of the
Effective Time as though made on and as of the Effective Time;
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(b) subject to the cure provisions set forth in Section 5.8,
Xxxxxxxxxx and Home Bank shall have performed in all material respects
all obligations and shall have complied in all material respects with
all agreements and covenants required by this Agreement to be performed
or complied with by them prior to or at the Effective Time;
(c) there shall not have been any action taken or any statute,
rule, regulation or order enacted, promulgated or issued or deemed
applicable to the Merger by any federal or state government or
governmental agency or instrumentality or court, which would prohibit
ownership or operation of all or a portion of the business or assets of
Xxxxxxxxxx or any Xxxxxxxxxx Subsidiary by COFI, Charter Michigan or
Charter One Bank, or would compel COFI, Charter Michigan or Charter One
Bank to dispose of all or a portion of the business or assets of
Xxxxxxxxxx or any Xxxxxxxxxx Subsidiary, as a result of this Agreement,
or which would render any party hereto unable to consummate the
transactions contemplated by this Agreement;
(d) since the date hereof, Xxxxxxxxxx shall not have suffered
a Material Adverse Effect;
(e) no regulatory authority shall impose any non-standard or
unduly burdensome condition relating to the Merger such that it would
substantially deprive COFI of the economic benefits of the Merger, as
determined in the reasonable judgment of COFI;
(f) COFI shall have received the opinion of Xxxx Xxxxxx Parks,
L.L.P., counsel to Xxxxxxxxxx, in the form of the attached Exhibit E;
(g) COFI shall have received a certificate signed by the
President and Chief Executive Officer of Xxxxxxxxxx and Home Bank,
dated as of the Effective Time, certifying that based upon his best
knowledge, the conditions set forth in Sections 6.1(a), (b), and (d)
hereof have been satisfied.
(h) simultaneous with the execution and delivery of this
Agreement, the directors of Xxxxxxxxxx who are stockholders of
Xxxxxxxxxx shall have executed and delivered to COFI Voting Agreements
in the form attached hereto as Exhibit A;
(i) COFI shall have received the written affiliates'
agreements described in Section 5.3 hereof; and
(j) Dissenting Shares shall not exceed 7% of the issued and
outstanding Xxxxxxxxxx Common Stock.
6.2 CONDITIONS TO THE OBLIGATIONS OF XXXXXXXXXX AND HOME BANK.
Notwithstanding any other provision of this Agreement, the obligations of
Xxxxxxxxxx and Home Bank to consummate the Merger are subject to the following
conditions precedent (except as to those
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which Xxxxxxxxxx may chose to waive):
(a) subject to the cure provisions set forth in Section 5.8,
all of the representations and warranties made by COFI in this
Agreement and in any documents or certificates provided by COFI shall
have been true and correct in all material respects as of the date of
this Agreement and as of the Effective Time as though made on and as of
the Effective Time;
(b) subject to the cure provisions set forth in Section 5.8,
COFI shall have performed in all material respects all obligations and
shall have complied in all material respects with all agreements and
covenants required by this Agreement to be performed or complied with
by it prior to or at the Effective Time;
(c) there shall not have been any action taken or any statute,
rule, regulation or order enacted, promulgated or issued or deemed
applicable to the Merger by any federal or state government or
governmental agency or instrumentality or record, which would prohibit
ownership or operation of all or a portion of the business or assets of
Xxxxxxxxxx or any Xxxxxxxxxx Subsidiary by COFI, Charter Michigan or
Charter Bank, or which would render any party hereto unable to
consummate the transactions contemplated by this Agreement;
(d) no regulatory authority shall impose any non-standard or
unduly burdensome condition relating to the Merger, such that it would
substantially deprive Xxxxxxxxxx of the economic benefits of the
Company Merger, as determined in the reasonable judgment of Xxxxxxxxxx;
(e) since the date hereof, COFI shall not have suffered a
Material Adverse Effect;
(f) Xxxxxxxxxx shall have received the opinion of Silver,
Xxxxxxxx & Xxxx, L.L.P., counsel to COFI, in the form attached hereto
as Exhibit F; and
(g) Xxxxxxxxxx shall have received a certificate signed by the
President and Chief Executive Officer of COFI, dated as of the
Effective Time, that based upon his best knowledge, the conditions set
forth in Sections 6.2(a), (b) and (e) have been satisfied.
6.3 CONDITIONS TO THE OBLIGATIONS OF THE PARTIES. Notwithstanding any
other provision of this Agreement, the obligations of COFI, Charter Michigan and
Charter One Bank on the one hand, and Xxxxxxxxxx and Home Bank on the other
hand, to consummate the Merger are subject to the following conditions precedent
(except as to those which COFI or Xxxxxxxxxx may chose to waive):
(a) no preliminary or permanent injunction or other order by
any federal or state court which prevents the consummation of the
Merger shall have been issued and
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shall remain in effect; nor shall there be any third party proceeding
pending to prevent the consummation of the Merger;
(b) the parties shall have received all applicable regulatory
approvals and consents to consummate the transactions contemplated in
this Agreement and all required waiting periods shall have expired;
(c) the Registration Statement shall have been declared
effective under the Securities Act and no stop orders shall be in
effect and no proceedings for such purpose shall be pending or
threatened by the SEC and, if the offering for sale of the COFI Common
Stock in the Company Merger pursuant to this Agreement is subject to
the securities laws of any state, the Registration Statement shall not
be subject to a stop order of any state securities authority;
(d) each party shall have received the tax opinion addressed
to it referred to in Section 5.12 of this Agreement; and
(e) the COFI Common Stock to be issued to holders of
Xxxxxxxxxx Common Stock shall have been approved for listing on the
Nasdaq National Market subject to official notice of issuance.
ARTICLE VII
TERMINATION; AMENDMENT; WAIVER
7.1 TERMINATION. This Agreement may be terminated at any time prior to
the Effective Time:
(a) By the mutual written consent of the Boards of Directors
of COFI and Xxxxxxxxxx;
(b) At any time prior to the Effective Time, by COFI or
Xxxxxxxxxx if there shall have been a final judicial or regulatory
determination (as to which all periods for appeal shall have expired
and no appeal shall be pending) that any material provision of this
Agreement is illegal, invalid or unenforceable (unless the enforcement
thereof is waived by the affected party) or denying any regulatory
application the approval of which is a condition precedent to a party's
obligations hereunder;
(c) At any time on or before the date specified in 7.1(f)
hereof, by COFI or Xxxxxxxxxx in the event that any of the conditions
precedent to the obligations of the other party to the Merger are
rendered impossible to be satisfied or fulfilled by said date (other
than by reason of a breach by the party seeking to terminate);
(d) By COFI or Xxxxxxxxxx at any time after the stockholders
of Xxxxxxxxxx fail to approve this Agreement and the Company Merger by
the Required Vote at the
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Xxxxxxxxxx Stockholders' Meeting;
(e) By COFI or Xxxxxxxxxx, in the event of a material breach
by the other party of any representation, warranty, covenant or
agreement contained herein or in any schedule or document delivered
pursuant hereto, which breach would result in the failure to satisfy
the closing condition set forth in Section 6.1(a) or 6.1(b) in the case
of COFI, or Section 6.2(a) or 6.2(b) in the case of Xxxxxxxxxx, and
which breach cannot be or is not cured within thirty (30) days after
written notice of such breach is given by the non-breaching party to
the party committing such breach;
(f) By COFI or Xxxxxxxxxx on or after December 31, 1997, in
the event the Company Merger has not been consummated by such date
(provided, however, that the right to terminate under this Section
7.1(f) shall not be available to any party whose failure to perform an
obligation hereunder has been the cause of, or has resulted in, the
failure of the Company Merger to occur on or before such date); or
(g) By Xxxxxxxxxx, if the Average COFI Stock Price is less
than $36.55 and both of the following conditions are satisfied:
(i) written notice of its election to terminate is
delivered by Xxxxxxxxxx to COFI within one business day after
the first date upon which the Average COFI Stock Price can be
determined, and
(ii) COFI, within one business day after its receipt
of such written notice of election to terminate, fails to
agree in writing to an Exchange Ratio determined by dividing
the Average COFI Stock Price into $25.00, which Exchange Ratio
shall be rounded to the fourth decimal place. Nothing herein
shall obligate COFI to adjust the Exchange Ratio and any such
action shall be elective on the part of COFI.
In the event a party elects to effect any termination pursuant
to Section 7.1(b) through 7.1(f) above, it shall give written notice to
the other party hereto specifying the basis for such termination and
certifying that such termination has been approved by the vote of a
majority of the members of its Board of Directors.
7.2 LIABILITIES AND REMEDIES; BREAK-UP FEE.
(a) In the event that this Agreement is terminated by a party
(the "Aggrieved Party") solely by reason of the material breach by the
other party ("Breaching Party") of any of its representations,
warranties, covenants or agreements contained herein then the Aggrieved
Party shall be entitled to such remedies and relief against the
Breaching Party as are available at law or in equity. Moreover, the
Aggrieved Party without terminating this Agreement shall be entitled to
specifically enforce the terms hereof against the Breaching Party in
order to cause the Merger to be consummated. Each party acknowledges
that there is not an adequate remedy at
63
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law to compensate the other parties relating to the non-consummation of
the Merger. To this end, each party, to the extent permitted by law,
irrevocably waives any defense it might have based on the adequacy of a
remedy at law which might be asserted as a bar to specific performance,
injunctive relief or other equitable relief.
(b) In the event that the Xxxxxxxxxx Stockholder's Meeting
does not take place, the Board of Directors of Xxxxxxxxxx fails to
recommend approval of this Agreement and the Company Merger to the
stockholders of Xxxxxxxxxx, or such Board of Directors shall adversely
alter or modify its favorable recommendation of this Agreement and the
Company Merger to the stockholders of Xxxxxxxxxx, and this Agreement
and the Company Merger is not approved by the stockholders of
Xxxxxxxxxx by the Required Vote, and neither COFI or Charter One Bank
is, as of the date of such event, in material breach of this Agreement,
then, upon termination of this Agreement, Xxxxxxxxxx and Home Bank
shall jointly and severally reimburse COFI and Charter One Bank for
their third party expenses relating to this Agreement and the
transactions contemplated hereby in an amount up to Two Hundred
Thousand Dollars ($200,000) and pay COFI in immediately available funds
an additional amount of Three Million Dollars ($3,000,000) as an agreed
upon break up fee and as the sole and exclusive remedy of COFI, Merger
Sub, Charter Michigan and Charter One Bank. In order to obtain the
benefit of the expense reimbursement and break-up fees provided in this
Section 7.2(b), COFI and Charter One Bank shall be required to execute
a waiver of their rights under Section 7.2(a) above, and shall not have
taken any action to enforce any right that they might have under
Section 7.2(a).
(c) In the event that an Acquisition Proposal occurs between
the date hereof and the time of the Xxxxxxxxxx Stockholders' Meeting
and the stockholders of Xxxxxxxxxx fail to approve this Agreement and
the Company Merger under circumstances where the Board of Directors of
Xxxxxxxxxx continuously maintained its favorable recommendation of this
Agreement and Company Merger, and neither COFI or Charter One Bank was,
as of the date of such action, in material breach of this Agreement,
then if a definitive agreement relating to an Acquisition Proposal is
executed by Xxxxxxxxxx or any Xxxxxxxxxx Subsidiary, or an Acquisition
Proposal is consummated, in either case within nine months after the
termination of this Agreement, then upon the happening of such event
Xxxxxxxxxx and Home Bank shall be jointly and severally obligated to
pay COFI a cash amount of Three Million Dollars ($3,000,000) as an
agreed upon break up fee and as the sole and exclusive remedy of COFI,
Merger Sub, Charter Michigan and Charter One Bank. Notwithstanding the
foregoing, if the average (rounded down to the nearest whole cent) of
the closing sale price of one share of COFI Common Stock on the Nasdaq
National Market for the 20 full trading days ending on the day of the
Xxxxxxxxxx Stockholders' Meeting is less than $36.55, the provisions of
this Section 7.2(c) shall not survive a termination of this Agreement
under Section 7.1(d) hereof. There shall be no duplication of remedy
under this Section 7.2(c) and 7.2(b). In order to obtain the benefit of
the expense reimbursement and break-up fees provided in this Section
7.2(c), COFI and Charter One Bank shall be required to execute a waiver
of their rights under Section 7.2(a)
64
71
above, and shall not have taken any action to enforce any right that
they might have under Section 7.2(a).
(d) In the event that all of the conditions precedent to the
consummation of the Merger in Article VI have been satisfied or would
be satisfied by the delivery of documents which are under the control
of COFI and COFI in material breach of this Agreement refuses to
consummate the Company Merger, or if COFI otherwise willfully abandons
the Company Merger in material breach of this Agreement, then in either
case, COFI and Charter One Bank shall jointly and severally pay
Xxxxxxxxxx and Home Bank liquidated damages in the amount of Three
Million Two Hundred Thousand Dollars ($3,200,000) as their sole and
exclusive remedy against COFI, Merger Sub, Charter Michigan, and
Charter One Bank. In order to pursue the liquidated damage remedy
provided in this subsection, Xxxxxxxxxx and Home Bank shall be required
to execute a waiver of their rights under Section 7.2(a) hereof and
shall have not theretofore taken any action to enforce any right that
they might have under Section 7.2(a) hereof.
7.3 SURVIVAL OF AGREEMENTS. In the event of termination of this
Agreement by either COFI or Xxxxxxxxxx as provided in Section 7.1, this
Agreement shall forthwith become void and have no effect except that the
agreements contained in Sections 5.1(b), 5.4, and 7.2 hereof shall survive the
termination hereof.
7.4 AMENDMENT. This Agreement may be amended by the parties hereto by
action taken by their respective Boards of Directors at any time before or after
approval hereof by the stockholders of Xxxxxxxxxx but, after such approval, no
amendment shall be made which changes the form of consideration or the value of
the consideration to be received by the stockholders of Xxxxxxxxxx without the
approval of the stockholders of Xxxxxxxxxx. This Agreement may not be amended
except by an instrument in writing signed on behalf of each of the parties
hereto. The parties may, without approval of their respective Boards of
Directors, make such technical changes to this Agreement, not inconsistent with
the purposes hereof as may be required to effect or facilitate any regulatory
approval or acceptance of the Merger or of this Agreement or to effect or
facilitate any regulatory or governmental filing or recording required for the
consummation of any of the transactions contemplated hereby.
7.5 WAIVER. Any term, provision or condition of this Agreement (other
than the requirement of Xxxxxxxxxx stockholder approval) may be waived in
writing at any time by the party which is entitled to the benefits hereof. Each
and every right granted to any party hereunder, or under any other document
delivered in connection herewith or therewith, and each and every right allowed
it by law or equity, shall be cumulative and may be exercised from time to time.
The failure of a party at any time or times to require performance of any
provision hereof shall in no manner affect such party's right at a later time to
enforce the same. No waiver by any party of a condition or of the breach of any
term, covenant, representation or warranty contained in this Agreement, whether
by conduct or otherwise, in any one or more instances shall be deemed to be or
construed as a further or continuing waiver of any such condition or breach or a
waiver of any other condition or of the breach of
65
72
any other term, covenant, representation or warranty of this Agreement. No
investigation, review or audit by a party of another party prior to or after the
date hereof shall estop or prevent such party from exercising any right
hereunder or be deemed to be a waiver of any such right.
ARTICLE VIII
GENERAL PROVISIONS
8.1 SURVIVAL. All representations, warranties, covenants and agreements
of the parties in this Agreement or in any instrument delivered by the parties
pursuant to this Agreement (other than the agreements, covenants and obligations
set forth herein which are contemplated to be performed after the Effective
Time) shall not survive the Effective Time, provided that no such
representations, warranties or covenants shall be deemed to be terminated or
extinguished so as to deprive any party (or any of its directors, officers,
employees or agents) of any defense in law or equity which otherwise would be
available against the claims of any person, including, without limitation, any
stockholder or former stockholder of either COFI or Xxxxxxxxxx, the aforesaid
representations, warranties, and covenants being material inducements to
consummation by the parties and the surviving corporation and resulting
institution of the transactions contemplated hereby.
8.2 NOTICES. All notices and other communications hereunder shall be in
writing and shall be deemed given if delivered personally, by facsimile
transmission or by registered or certified mail to the parties at the following
addresses (or at such other address for a party as shall be specified by like
notice) and shall be deemed to be delivered on the date so delivered:
(a) if to COFI, Charter Michigan or Charter One Bank:
Xx. Xxxxxxx X. Xxxx
Chief Executive Officer
Charter One Financial, Inc.
0000 Xxxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
copy to:
Xx. Xxxxxx X. Xxxx
Chief Corporate Counsel
Charter One Financial, Inc.
0000 Xxxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
and
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73
Xxxxx X. Xxxx, Esq.
Silver, Xxxxxxxx & Xxxx L.L.P.
ll00 Xxx Xxxx Xxx., X.X.
Xxxxxxxxxx, X.X. 00000
(b) if to Xxxxxxxxxx or Home Bank:
Xx. Xxxxxxx X. Valerian
President
Xxxxxxxxxx Corporation
00 Xxxxxxxx Xxxxx
Xxxxx 000
Xxxxxxxxx, XX 00000
copy to:
F. Xxxxxx X'Xxxxx, Esq.
Xxxx Xxxxxx Parks L.L.P.
000 XX Xxxxxxx Xxxxxxxx
000 Xxxxxx Xxxxxx
Xxxxxxxxx, XX 00000-0000
8.3 APPLICABLE LAW. This Agreement shall be construed and interpreted
according to the laws of the State of Ohio without regard to conflicts of laws
principles thereof, except to the extent that the federal laws of the United
States apply.
8.4 HEADINGS, ETC. The article headings and section headings contained
in this Agreement are inserted for convenience only and shall not affect in any
way the meaning or interpretation of this Agreement.
8.5 SEVERABILITY. If any term, provision, covenant, or restriction
contained in this Agreement is held by a final and unappealable order of a court
of competent jurisdiction to be invalid, void, or unenforceable, then the
remainder of the terms, provisions, covenants, and restrictions contained in
this Agreement shall remain in full force and effect, and shall in no way be
affected, impaired, or invalidated unless the effect would be to cause this
Agreement to not achieve its essential purposes.
8.6 ENTIRE AGREEMENT; BINDING EFFECT; NON-ASSIGNMENT; COUNTERPARTS.
Except as otherwise expressly provided herein, this Agreement (including the
documents and instruments referred to herein) (a) constitutes the entire
agreement between the parties hereto and supersedes all other prior agreements
and undertakings, both written and oral, between the parties, with respect to
the subject matter hereof; and (b) is not intended to confer upon any other
person any rights or remedies hereunder except as specifically provided herein.
This Agreement shall be binding upon and inure to the benefit of the parties
named herein and
67
74
their respective successors. Neither this Agreement nor any of the rights,
interests or obligations hereunder shall be assigned by any party hereto without
the prior written consent of the other party hereto. This Agreement may be
executed in two or more counterparts which together shall constitute a single
agreement.
8.7 NO EMPLOYMENT SOLICITATION. Prior to the receipt of OTS approval of
the Merger, COFI and the COFI Subsidiaries shall not knowingly, actively solicit
the employment of any current director, officer or full time employee of
Xxxxxxxxxx or the Xxxxxxxxxx Subsidiaries.
8.8 ADDITIONAL PARTY. Upon the formation of Merger Sub, COFI shall
cause Merger Sub to take all necessary corporate action to approve this
Agreement and to become a party hereto for purposes of consummating the Company
Merger.
The undersigned have caused this Agreement to be executed as of the day
and year first above written.
CHARTER ONE FINANCIAL, INC.
By /s/ Xxxxxxx Xxxx Xxxx
------------------------------
Authorized Officer
CHARTER MICHIGAN BANCORP, INC.
By /s/ Xxxxxxx Xxxx Xxxx
------------------------------
Authorized Officer
CHARTER ONE BANK F.S.B.
By /s/ Xxxxxxx Xxxx Xxxx
------------------------------
Authorized Officer
XXXXXXXXXX CORPORATION
By /s/ Xxxxxxx X. Valerian
------------------------------
Authorized Officer
HOME BANK, F.S.B.
By /s/ Xxxxxxx X. Valerian
------------------------------
Authorized Officer
75
EXHIBIT A
VOTING AGREEMENT
This Voting Agreement dated as of April __, 1997 is entered into between
Charter One Financial, Inc. ("COFI"), and the undersigned director and
stockholder ("Stockholder") of Xxxxxxxxxx Corporation ("Xxxxxxxxxx").
W I T N E S S E T H:
WHEREAS, Xxxxxxxxxx, Home Bank, F.S.B., COFI, Charter One Bank F.S.B.
and Charter Michigan Bancorp, Inc. have entered into an Agreement and Plan of
Merger and Reorganization (the "Agreement"), dated as of today, which
contemplates the acquisition by COFI of 100% of the common stock of Xxxxxxxxxx
(the "Xxxxxxxxxx Stock") by means of the merger of an Ohio corporation to be
formed by COFI ("Merger Sub") with and into Xxxxxxxxxx (the "Merger"); and
WHEREAS, COFI is willing to expend the substantial time, effort and
expense necessary to implement the Merger only if Stockholder enters into this
Voting Agreement; and
WHEREAS, the Stockholder believes that the Merger is in his best
interest and the best interest of Xxxxxxxxxx;
NOW, THEREFORE, in consideration of the premises, Stockholder hereby
agrees as follows:
1. VOTING AGREEMENT - Stockholder shall vote, or cause to be voted, all
of the shares of Xxxxxxxxxx Stock he now or hereafter owns and over which he now
has, or prior to the record date for voting at the Meeting (as hereinafter
defined) acquires, voting control in favor of the Merger at the meeting of
stockholders of Xxxxxxxxxx to be called for the purpose of approving the Merger
(the "Meeting").
2. NO COMPETING TRANSACTION - Stockholder shall not vote any of his
shares of Xxxxxxxxxx Stock in favor of any other merger or sale of all or
substantially all the assets of Xxxxxxxxxx to any person other than COFI or its
affiliates until closing of the Merger, termination of the Agreement or
abandonment of the Merger by the mutual agreement of Xxxxxxxxxx and COFI,
whichever comes first.
3. TRANSFERS SUBJECT TO AGREEMENT - Stockholder shall not transfer any
of his shares of Xxxxxxxxxx Stock unless the transferee, prior to such transfer,
executes a voting agreement with respect to the transferred shares substantially
to the effect of this Voting Agreement and reasonably satisfactory to COFI.
4. NO OWNERSHIP INTEREST - Nothing contained in this Voting Agreement
shall be deemed to vest in COFI any direct or indirect ownership or incidents of
ownership of or with respect to any
76
shares of Xxxxxxxxxx Stock. All rights, ownership and economic benefits of and
relating to the shares of Xxxxxxxxxx Stock subject to this Voting Agreement
shall remain and belong to Stockholder and COFI shall have no authority to
manage, direct, superintend, restrict, regulate, govern or administer any of the
policies or operations of Xxxxxxxxxx or exercise any power or authority to
direct Stockholder in the voting of any of his shares of Xxxxxxxxxx Stock,
except as otherwise expressly provided herein, or the performance of his duties
or responsibilities as a director of Xxxxxxxxxx.
5. DOCUMENTS DELIVERED - Stockholder acknowledges having reviewed the
Agreement and its attachments and that all reports, proxy statements and other
information with respect to COFI as filed with the Securities and Exchange
Commission (the "Commission") were, prior to his execution of this Voting
Agreement, available for inspection and copying at the Offices of the Commission
and that COFI delivered the following such documents to Xxxxxxxxxx:
(a) COFI's Annual Report on Form 10-K for the year ended December
31, 1996;
(b) COFI's proxy statement for its 1997 Annual Meeting of
Stockholders; and
(c) COFI's Annual Report to Stockholders for the year ended
December 31, 1996;
6. AMENDMENT AND MODIFICATION - This Voting Agreement may be amended,
modified or supplemented at any time by the written approval of such amendment,
modification or supplement by Stockholder and COFI.
7. ENTIRE AGREEMENT - This Voting Agreement evidences the entire
agreement among the parties hereto with respect to the matters provided for
herein. This Voting Agreement supersedes any agreements among COFI and the
Stockholder concerning the subject matter contained herein.
8. SEVERABILITY - The parties agree that if any provision of this Voting
Agreement shall under any circumstances be deemed invalid or inoperative, this
Voting Agreement shall be construed with the invalid or inoperative provisions
deleted and the rights and obligations of the parties shall be construed and
enforced accordingly.
9. COUNTERPARTS - This Voting Agreement may be executed in counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
10. GOVERNING LAW - This Voting Agreement shall be governed by the
internal laws of the State of Ohio.
11. HEADINGS - The headings for the paragraphs of this Voting Agreement
are inserted for convenience only and shall not constitute a part hereof or
affect the meaning or interpretation of this Voting Agreement.
X-0
00
00. TERMINATION - This Voting Agreement shall terminate upon the
consummation of the Merger, termination of the Agreement or abandonment of the
Merger by the mutual agreement of Xxxxxxxxxx and COFI, whichever comes first.
13. SUCCESSORS - This Voting Agreement shall be binding upon and inure
to the benefit of COFI and its successors, and Stockholder and his executor,
personal representative, administrator, heirs, legatees, guardian and other
legal representatives. This Voting Agreement shall survive the death or
incapacity of Stockholder. This Voting Agreement may be assigned by COFI only to
an affiliate of COFI.
CHARTER ONE FINANCIAL, INC.
By:
------------------------------
STOCKHOLDER
---------------------------------
A-3
78
EXHIBIT B
DIRECTORS OF RESULTING INSTITUTION
Xxxxxx X. Xxxxxxx
Xxxxxx X. Xxxx
Xxxx X. Xxxxxx
Xxxxxxx X. Xxxxxx
Xxxxxxx X. Xxxxxx
Xxxxxxx X. Xxxxx
Xxxxxxx Xxxx Xxxx
Xxxx X. Xxxx
Xxxxxx X. Xxxxxx
Xxxxxxx X. Xxx
Xxxxx X. Xxxxx, Xx., Esq.
Xxxxxx X. Xxxx
Xxxxxx X. Xxxxxxxx
Xxxx Xxxxxxxx, Esq.
Eresteen X. Xxxxxxxx
79
Branches: EXHIBIT C
--------
000 Xxxxx Xxxxxx Xx., Xxx Xxxxxxx 00000
0000 Xxxxxxxxx Xx., Xxxxxxxxx Xxxxxxx 00000
0000 Xxxxxxxxxx Xxxx, Xxxxxxx Xxxxx 00000
0000 Xxxxxxxx Xx., Xxxxxxxxxxx 00000
0000 Xxxxxxxx Xxx., Xxxxxxxxx 00000
0000 Xxxxx Xxx., Xxxxxxxxx 00000
00000 Xxxxxxx Xxxx., Xxxxxxxxx 00000
00000 Xxxxxx Xxx., Xxxxxxxxx 00000
00000 Xxxxxx Xxx., Xxxxxxxxx 00000
0000 Xxxxx Xx., Xxxxxxxxx 00000
000 Xxxxxx Xxxxxx, Xxxxxxxxx 00000
00000 Xxxxxxx Xxx., Xxxxxxxxx 00000
0000 Xx. Xxxxx Xxx., Xxxxxxxxx 00000
0000 Xxxxxx Xxx., Xxxxxxxxx 00000
0000 Xxxxxxxx Xxx., Xxxxxxxxx 00000 - Home Xxxxxx
000 X. 000xx Xx., Xxxxxx 00000
00000 Xxxxxx Xxx., Xxxxxx 00000
00000 Xxxx Xxxxx Xxxx., Xxxxxx 00000
00000 Xxxxxx Xx., Xxxxxxxx Xxxx 00000
0000 Xxxxxxxx Xxxxx Xxxx., Xxxxxxxxxxxx 00000
0000 Xxxxxxxxxxx Xx., Xxxxxxxx 00000
00000 Xxxxxxx Xxx., Xxxxxxxx 00000
00000 Xxxxxxxx, Xxxxx Xxxxxxx 00000
0000 Xxxxxxxx Xx., Xxxxxxxx Xxxxxxx 00000
0000 Xxxxxx Xxx., Xxxxxx 00000
0000 Xxxxxx Xxx., Xxxxxx 00000
0000 Xxxxxx Xx., Xxxxxx-xx-xxx-Xxxx 00000
00000 Xxxxxx Xx., Xxxxxxxxxx Xxxxxxx 00000
00000 Xxxxxxxxxx Xx., Xxxxxxxxxx 00000
000 X. Xxxxxx Xx., Xxxxxxxxxx 00000
00000 Xxxxxx Xx., Xxxxx Xxxxxxx 00000
0000 Xxxxxxxxx Xxxx., Xxxxx 00000
0000 Xxxxx Xx., Xxxxx 00000
0000 Xxxx Xx., Xxxxx 00000
0000 Xxxxx Xx., Xxxxx Xxxxxxx 00000
00000 Xxxxxxxx Xx., Xxxxxxxx Xxxxxxx 00000
00000 Xxxxxx Xxxxx Xx., Xxxxx Xxxxx 00000
0000 XXX Xxxxxx Xx., Xxxxx 00000
0000 Xxxx Xx., Xxxxx Xxxxxxx 00000
00000 Xxxxx Xx., Xxxxxxxxxxxx 00000
00000 Xxxxx Xx., Xxxxxxxxxxxx 00000
00000 Xxxxx Xx., Xxxxxxxxxx Xxxxxxx 00000
0000 Xxxxx Xx., Xxxxxxxxxxxx Xxxxxxx 00000
0000 Xxxxxxxx Xxxx, Xxxxxxxx 00000
00000 Xxxxxx Xxx., Xxxxxxxxxx 00000
00000 Xxxxxxx Xxxx., Xxxxxxxx 00000
000 X. Xxxx Xx, Xxxxx 00000
0000 X. Xxxxxxxx Xx., Xxxxx 00000
80
0000 Xxxxxx Xx., Xxx-Xxxxxx Xxxxx, Xxxxx 00000
0000 Xxxxxxxxxx Xxxx., Xxxxx 00000
Xxxxx Xx., 000 Xxxxxxx Xxxxx Xxxx, Xxxxx 00000
00 X. Xxxx Xx., Xxxxx 00000
0000 X. Xxxxxx Xx., Xxxxxxxx 00000
0000 Xxxx Xx., Xxxx 00000
0000 Xxxxxx Xx., Xxxx 00000
000 Xxxx Xx., Xxxxxxxxx 00000
000 Xxxxx Xxxx Xx., Xxxxxxxx 00000
000 X. Xxxxx Xx., Xxxxxxxx 00000
00000 Xxxx Xxxx, X.X., Xxxxxxx 00000
3100 Cleveland, S., Canton 44707
0000 Xxxxxxxx Xx., X.X., Xxxxxx 00000
0000 00xx Xx., X.X., Xxxxxx 00000
000 X. Xxxxxxxxxx Xx., Xxxxxx 00000
0000 Xxxxxxxxxx Xx., X., Xxxxxx 00000
000 X. Xxxx Xx., Xxxxxxxxxx 00000
0000 Xxxxx Xxx., X.X., Xxxxxxxxx 00000
00 Xxxxxxx Xxx., X.X., Xxxxxxxxx 00000
0000 Xxxxxx Xx., XX, Xxxxx Xxxxxx 00000
0000 X. Xxxx Xx., Xxxxx Xxxxxx 00000
0000 X. Xxxxxxxx Xx., Xxxxx 00000
000 Xxxxxxxx-Xxxxxx Xx., Xxxxxxxx 00000
00 X. Xxxxx Xx., Xxxxxx 00000
0000 Xxxxxxx Xxx., Xxxxxxxxxx 00000
000 Xxxxxxxx Xxxxx, Xxx Xxxxxxxxxxxx 00000
507 Chillicothe, Portsmouth 45662
0000 Xxxx Xxxxx Xx., Xxxxxxxxxxxx 00000
000 Xxxxxx Xx., Xxxxxx 00000
0000 Xxxxxxx-Xxxxxxxx Xx., Xxxxxx 00000
0000 Xxxxxxx Xxx., Xxxxxx, XX 00000
0000 Xxxxxx Xx., Xxxxxx 00000
0000 Xxxx Xx., Xxxxxx 00000
0000 Xxxxxxxxx Xxxxxxx, Xxxxxx 00000
000 Xxxxx Xx., Xxxxxx 00000
0000 Xxxxxxx-Xxxxxxxx Xx., Xxxxxxxx 00000
000 Xxxxx Xx., Xxxxxx 00000
0000 Xxxxxxxx Xx., Xxxxxx 00000
0000 Xxxxx Xxx., Xxxxxx 00000
000 Xxxx Xx., Xxxxxx 00000
0000 Xxxxxx Xx., Xxxxxx 00000
0000 Xxxxxx Xx., Xxxxxx 00000
0000 X. Xxxxx Xx., Xxxxxx 00000
0000 X. Xxxxxxx Xxx., Xxxxxx 00000
0000 Xxxxxxxxx Xxxx., Xxxxxx 00000
0000 Xxxxxx Xx., Xxxxxx 00000
0000 Xxxxxxxx Xxx., Xxxxxx 00000
000 Xxxxx Xx., Xxxxxxxxxx, XX 00000
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81
0000 Xxxxxxxx, Xxxxxxx, XX 00000
0000 Xxxxxx, Xxxxxxxxxx, XX 00000
0000 X. Xxxxx, Xxxxxxxxxx Xxxxx, XX 00000
0000 Xxxxxxxx Xxx., Xxxxxxxxxx Xxxxx, XX 00000
00000 Xxxx Xx., Xxxxxx, XX 00000
000 X. Xxxxx Xx., Xxxxxxxxx, XX 00000
00000 Xxxxx Xx., Xxxxxxx Xxx., XX 00000
00000 Xxxxxxxx, Xxxxxxx Xxx., XX 00000
13606 Michigan, Xxxxxxxx, XX 00000
15930 Michigan, Xxxxxxxx, XX 00000
23801 Michigan, Xxxxxxxx, XX 00000
00000 Xxxxxx Xxxx, Xxxxxxxx Xxx., XX 00000
00000 Xxxx Xx., Xxxxxxxx Xxx., XX 00000
00000 Xxxxxx, Xxxxxxx, XX 00000
00000 X. Xxxxxx, Xxxxxxx, XX 00000
00000 Xxxxx Xxxxx, Xxxxxxx, XX 00000
0000 Xxxxxxx, Xxxxxxx, XX 00000
00000 Xxxxxxx, Xxxxxxx, XX 00000
00000 Xxx Xx., Xxxxxxx, XX 00000
0000 Xxxxxxxx, Xxxxxxx, XX 00000
00000 Xxxxxxxx, Xxxxxxx, XX 00000
00000 Xxxxxxxx Xx., Xxxxxxx., XX 00000
00000 X. Xxxxxx, Xxxxxxx, XX 00000
0000 Xxxxxxxx, Xxxxxxx, XX 00000
0000 Xxxxxxxx, Xxxxxxx, XX 00000
000 X. Xxxxxxx Xx., Xxxxxx, XX 00000
00000 Xxxxxxxxxx, Xxxxxxxxxx Xxxxx, XX 00000
00000 Xxxx 00 Xxxx, Xxxxxxxxxx Xxxxx, XX 00000
00000 Xxxxxxxx, Xxxxxxxx, XX 00000
000 Xxxxx Xxxx, Xxxxxx Xxxxxx, XX 00000
00000 Xxxx Xxx., Xxxxxx Xxxxxx Xxxxx, XX 00000
00000 Xxxxxxx, Xxxxxx Xxxxx ,XX 00000
00000 Xxxxxxxx, Xxxxxxxx Xxxx, XX 00000
000 X. Xxxxxxxx Xxx., Xxxxxxxxx, XX 00000
0000 X. Xxxx, Xxxxxxxxx, XX 00000
00000 Xxxxxxxxxx, Xxxxxxx Xxxxxxx, XX 00000
0000 Xxx Xxx., Xxxxxxx Xxxx, XX 00000
00000 Xxxxxxxxxx, Xxxxxxx, XX 00000
00000 Xxxxxxxx, Xxxxxxx, XX 00000
00000 X. 0 Xxxx, Xxxxxxx, XX 00000
00000 X. 0 Xxxx, Xxxxxxx, XX 00000
00000 X. 0 Xxxx, Xxxxxxx, XX 00000
00000 Xxxx 00 Xxxx, Xxxx, XX 00000
00000 Xxxxxxxxxx, Xxx Xxxx, XX 00000
0000 Xxxxx Xx., Xxxxxx, XX 00000
000 X. Xxxxxxx, Xxxxxx, XX 00000
000 X. Xxxx Xx., Xxxxxx, XX 00000
000 Xxxxxxxx, Xxxxxxxx, XX 00000
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82
00 X. Xxxxx Xx., Xxxxxxx, XX 00000
0000 X. Xxxxxxxxx, Xxxxxxx, XX 00000
0000 Xxxxxxxxx Xx., Xxxxxxx, XX 00000
00000 Xxxx Xx., Xxxxxxxx, XX 00000
00 X. Xxxxx, Xxxxxxxxx, XX 00000
00000 Xxxxxxx, Xxxxxxxxx, XX 00000
000 X. Xxxx, Xxxxx Xxx, XX 00000
00000 Xxxxxxx Xxxx, Xx. Xxxxx Xxxxxx, XX 00000
00000 Xxxxxx, Xx. Xxxxx Xxxxxx, XX 00000
00000 X. 00 Xxxx, Xxxxxxxxxx, XX 00000
00000 Xxxxx Xx., Xxxxxxxxx, XX 00000
00000 X. Xxxx Xx, Xxxxxxxxx, XX 00000
0000 00 Xxxx Xx., Xxxxxxxx Xxx., XX 00000
0000 00 Xxxx Xx., Xxxxxxxx Xxx., XX 00000
00000 Xxxxxxxx Xx., Xxxxxxxx Xxx., XX 00000
00000 Xxx Xxxx, Xxxxxxxx Xxx., XX 00000
0000 Xxxx Xxxxxxx, XX 00000
000 X Xxx Xxxxxx Xx., Xxxx, XX 00000
000 Xxxxxxxxxx Xxxxxxx, Xxxx, XX 00000
00 X. Xxxx Xxxx Xx., Xxxx, XX 00000
00000 Xxx Xxxx, Xxxxx, XX 00000
00000 Xxxxxx Xx., Xxxxxx, XX 00000
00000 Xxxxxxxxxx, Xxxxxx, XX 00000
0000 00 Xxxx, Xxxxxx, XX 00000
0000 00 Xxxx, Xxxxxx, XX 00000
00000 Xxx Xxxx, Xxxxxx, XX 00000
0000 Xxxxxxxx, Xxxxxxxxx, XX 00000
0000 Xxxxxxx Xxxx Xx., Xxxx Xxxxxxxxxx, XX 00000
00000 Xxxxxx Xxxx, Xxxxxxxx, XX 00000
0000 Xxxxx Xx., Xxxxxxxx, XX 00000
000 Xxxxxxxx Xxx., Xxxxxxxxx, XX 00000
New Branches of Resulting Institution
0000 Xxxxxxx Xxxxxx, Xxxxxxxx, Xxxx 00000
Brooklyn Super Kmart, In-Store Branch
Rocky River Rockport Xxxx-Xxxx, In-Store Branch
00000 Xxxxxxx Xxxx, Xxxxxxxx, Xxxx 00000
000 XXX Xxxxxx Xxxx, Xxxxxxxx Xxxxxxx, Xxxx 00000
0000 Xxxxxxxx Xxxx, Xxxxxxxxx, Xxxx 00000
0000 Xxxxxxxxxxxx Xxxxxx Xxxx, Xxxxxxxxxx Xxx., Xxxx 00000
Euclid Super Kmart, In-Store Branch Center Road
0000 Xxxxx Xxxx., Xxxxxx, Xxxx 00000
4
83
EXHIBIT D
April __, 1997
Charter One Financial, Inc.
0000 Xxxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Gentlemen:
1. I have been advised that I might be considered to be an "affiliate,"
as that term is defined for purposes of paragraphs (c) and (d) of Rule 145
("Rule 145") promulgated by the Securities and Exchange Commission (the
"Commission") under the Securities Act of 1933, as amended (the "Securities
Act"), of Xxxxxxxxxx Corporation, an Ohio corporation ("Xxxxxxxxxx").
2. Pursuant to an Agreement and Plan of Merger and Reorganization dated
as of April __, 1997 (the "Agreement"), by and among Charter One Financial,
Inc., a Delaware corporation ("COFI"), Charter Michigan Bancorp, Inc., a wholly
owned subsidiary of COFI ("Charter Michigan"), Charter One Bank F.S.B., a wholly
owned subsidiary of Charter Michigan ("Charter One Bank"), Xxxxxxxxxx and Home
Bank, F.S.B., a wholly owned subsidiary of Xxxxxxxxxx ("Home Bank"), it is
contemplated that Xxxxxxxxxx will merge with and into Charter Michigan and that
all of the outstanding common stock, $.01 par value per share, of Xxxxxxxxxx
("Xxxxxxxxxx Common Stock") will be converted into common stock, par value $.01
per share, of COFI ("Common Stock") as set forth in the Agreement (the
"Merger"). In connection with the Merger, I will receive my pro rata portion of
the shares of COFI Common Stock upon distribution of the COFI Common Stock to
the holders of Xxxxxxxxxx Common Stock.
3. I hereby agree as follows:
I will not sell, pledge, transfer or otherwise dispose of any shares of
Xxxxxxxxxx Common Stock held by me at any time, except in compliance with the
applicable provisions of the Securities Act and other applicable laws and
regulations.
I will not offer to sell, transfer or otherwise dispose of any of the
shares of COFI Common Stock distributed to me pursuant to the Merger except (a)
in compliance with the applicable provisions of Rule 145, (b) in a transaction
that is otherwise exempt from the
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Charter One Financial, Inc.
April __, 1997
Page 2
registration requirements of the Securities Act, or (c) in an offering
registered under the Securities Act.
I will not sell, transfer or otherwise reduce my risk relative to any
shares of Xxxxxxxxxx Common Stock or COFI Common Stock during the period 30 days
prior to consummation of the Merger, and will not sell, transfer or otherwise
reduce my risk relative to any shares of COFI Common Stock issued to me pursuant
to the Merger until such time as financial results covering at least 30 days of
post-Merger combined operations of COFI and Xxxxxxxxxx have been published by
COFI.
4. I consent to the endorsement of the COFI Common Stock issued to me
pursuant to the Merger with a restrictive legend which will read substantially
as follows:
"The shares represented by this certificate were issued in a
transaction to which Rule 145 promulgated under the Securities Act of
1933, as amended (the "Act"), applies, and may be sold or otherwise
transferred only in compliance with the limitations of such Rule 145, or
pursuant to an exemption from registration under the Act, or pursuant to
a registration statement under the Act."
COFI's transfer agent shall be given an appropriate stop transfer order
and shall not be required to register any attempted transfer of the shares of
the COFI Common Stock issued to me in the Merger, unless the transfer has been
effected in compliance with the terms of this letter agreement.
5. It is understood and agreed that this letter agreement shall
terminate and be of no further force and effect and the legend set forth in 4
above shall be removed by delivery of substitute certificates without such
legend, and the related stop transfer or restrictions shall be lifted forthwith,
if (a)(i) any such shares of COFI Common Stock issued to me in the Merger shall
have been registered under the Securities Act for sale, transfer or other
disposition by me or on my behalf and are sold, transferred or otherwise
disposed of or (ii) any such shares of COFI Common Stock issued to me in the
Merger are sold in accordance with the provisions of paragraphs (c), (e), (f),
and (g) of Rule 144 promulgated under the Securities Act, or (iii) I am not at
the time an affiliate of COFI and have been the beneficial owner of the COFI
Common Stock for at least one year (or such other period as may be prescribed by
the Securities Act and the rules and regulations promulgated thereunder) and
COFI has filed with the Commission all of the reports it is required to file
under the Securities Exchange Act of 1934, as amended, during the preceding
twelve months, or (iv) I am not and have not been for at least three months an
affiliate of COFI and have been the beneficial owner of the COFI Common Stock
issued to me in the Merger for at least two years (or such period as may be
prescribed by the Securities Act and the rules and regulations promulgated
thereunder), or (v) COFI shall have received a letter from the staff of the
Commission, or an opinion of counsel reasonably acceptable to COFI, to the
effect
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Charter One Financial, Inc.
April __, 1997
Page 3
that the stock transfer restrictions and the legend are not required, and (b)
financial results covering at least 30 days of post-Merger combined operations
have been published.
6. COFI shall during the period I hold the COFI Common Stock subject to
the restrictions herein comply with the requirements of Rule 144(c) under the
Securities Act.
7. I have carefully read this letter agreement and the Agreement and
have discussed their requirements and other applicable limitations upon my
ability to offer to sell, transfer or otherwise dispose of shares of the COFI
Common Stock, to the extent I felt necessary, with my counsel or counsel for
Xxxxxxxxxx.
Sincerely,
------------------------
Agreed and accepted this
__ day of April, 1997
by CHARTER ONE FINANCIAL, INC.
By:
-------------------
86
EXHIBIT E
[Xxxx Xxxxxx & Parks Legal Opinion]
____________, 1997
Charter One Financial, Inc.
Gentlemen:
We have acted as counsel to Xxxxxxxxxx Corporation ("Xxxxxxxxxx") and
Home Bank, F.S.B. ("Home Bank") in connection with the transactions contemplated
by the Agreement and Plan of Merger and Reorganization dated as of April -, 1997
(the "Agreement") by and among Charter One Financial, Inc. ("Charter One"),
Charter Michigan Bancorp, Inc. ("Charter Michigan"), Charter One Bank F.S.B.
("Charter One Bank"), Xxxxxxxxxx and Home Bank. Unless otherwise defined herein,
all capitalized terms used in this letter, which is delivered pursuant to
Section 6.1(f) of the Agreement, shall have the meanings set forth in the
Agreement.
This firm has represented Xxxxxxxxxx and its wholly-owned subsidiary,
Home Bank, in connection with the negotiation of the Agreement and matters
related thereto and with respect to other legal matters as to which we have been
consulted by them. While we provide legal services to Xxxxxxxxxx and Home Bank
on a regular basis, there may be matters of a legal nature as to which we have
not been consulted. We are familiar with the corporate proceedings taken by
Xxxxxxxxxx and Home Bank in connection with the Agreement.
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Charter One Financial
April ___, 1997
Page 2
For purposes of the opinions expressed herein, we have examined copies
of the following documents:
1. The Agreement;
2. The Articles of Incorporation of Xxxxxxxxxx (the "Xxxxxxxxxx
Articles") certified by the Secretary of State of Ohio as of April ___, 1997;
3. A copy of the Code of Regulations of Xxxxxxxxxx (the "Xxxxxxxxxx
Code") certified as true, complete and accurate by the Secretary of Xxxxxxxxxx
as of the date of this opinion;
4. The Charter of Home Bank (the "Home Bank Charter") certified by the
Secretary of Home Bank as of the date of this opinion;
5. A copy of the Bylaws of Home Bank (the "Home Bank Code") certified as
true, complete and accurate by the Secretary of Home Bank as of the date of
this opinion;
6. A Certificate of the Secretary of Xxxxxxxxxx dated as of the date
hereof, a copy of which is attached as Exhibit A hereto (the "Xxxxxxxxxx
Certificate") relating to receipt by Xxxxxxxxxx of the consideration for its
issued and outstanding shares specified in the applicable resolutions of the
Board of Xxxxxxxxxx;
7. The certificates and other documents delivered by the respective
parties to the Agreement at or prior to the Effective Time.
In addition, we have examined originals, copies or certified copies of
such other corporate records of Xxxxxxxxxx and Home Bank, certificates of
public officials and officers of Xxxxxxxxxx
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Charter One Financial
April __, 1997
Page 3
and Home Bank and such agreements, instruments and other documents as we have
deemed necessary as a basis for the opinions expressed below.
In our examination of the documents and certificates referred to above,
we have assumed, without inquiry (i) the authenticity of all documents
submitted to us as originals; (ii) the conformity to the originals thereof of
all documents submitted to us as copies; (iii) that all natural persons signing
said documents had, at the time of such signing, the full legal capacity to sign
and deliver said documents and records; (iv) that no action has been taken which
is not reflected in the corporate records made available to us from Xxxxxxxxxx
and Home Bank which amends, revokes, or otherwise affects any of the records or
documents which we have examined; (v) that each party, other than Xxxxxxxxxx or
Home Bank, executing any of the documents we have examined has full power and
authority to enter into and perform its obligations thereunder; and (vi) that
all of the facts recited, and representations and warranties made, by the
parties in the Agreement and the related certificates and documents examined by
us are true and correct in all material respects. With your permission, we do
not address in our opinion any aspects of the transactions contemplated by the
Agreement as they relate to the Michigan Merger.
Although we have conducted no independent investigation of the accuracy
or reasonableness of any of the foregoing assumptions, we have no actual
knowledge that any of these assumptions are inaccurate. The words "actual
knowledge" when used herein are intended to be limited to the knowledge of
lawyers in this firm who have given attention to matters involving Xxxxxxxxxx
and Home Bank.
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Charter One Financial
April ______, 1997
Page 4
We are members of the bar of the State of Ohio and the law covered by
the opinions expressed herein is limited to the laws of the State of Ohio and
the Federal laws of the United States as they exist on the date of this opinion.
Moreover, we do not express any opinion concerning choice of law, securities law
(except as set forth in opinion paragraph G below), or antitrust law matters.
Based upon the foregoing, and subject to the qualifications and
assumptions set forth herein, we are of the opinion that:
(A) Xxxxxxxxxx is a corporation, validly existing and in good standing
under the laws of the State of Ohio and has the requisite power and authority to
own or lease its properties and assets and to carry on its business as such
properties, assets and business are described in the Proxy Statement.
(B) Home Bank is a savings bank, validly existing under the laws of the
United States, and has the corporate power to own or lease its properties and
assets and carry on its business as such property, assets and business are
described in the Proxy Statement. Home Bank is an "insured depository
institution" as defined in the Federal Deposit Insurance Act and applicable
regulations thereunder.
(C) The outstanding shares of capital stock of Xxxxxxxxxx and Home Bank
are duly authorized, validly issued, fully paid and non-assessable and are not
subject to any pre-emptive rights under the Ohio General Corporation Law, their
respective Articles or Codes or under any agreement to which either of them are
parties of which we have actual knowledge. All the
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Charter One Financial
April ______, 1997
Page 5
outstanding shares of capital stock of Home Bank are legally and beneficially
owned by Xxxxxxxxxx free and clear of any lien, encumbrance or claim.
(D) The execution and delivery of the Agreement and the consummation of
the Company Merger and the Bank Merger have been duly and validly authorized by
the respective Boards of Directors of Xxxxxxxxxx and Home Bank and the Agreement
and the Company Merger have been approved by the holders of two-thirds of the
issued and outstanding shares of Xxxxxxxxxx Common Stock. To our actual
knowledge, no consent or approval, which has not already been obtained, from any
regulatory authority is required for execution and delivery by Xxxxxxxxxx or
Home Bank of the Agreement or any of the documents to be executed and delivered
by Xxxxxxxxxx and Home Bank therewith and the consummation of the Company Merger
and the Bank Merger.
(E) The Agreement (assuming that it has been duly authorized, executed
and delivered by, and is a binding obligation of, Charter One, Charter Michigan
and Charter One Bank) constitutes a valid and binding obligation of Xxxxxxxxxx
and Home Bank enforceable against Xxxxxxxxxx and Home Bank in accordance with
its terms, subject as to enforceability to applicable bankruptcy, insolvency,
reorganization, moratorium, liquidation or similar laws in effect from time to
time relating to or affecting the enforcement of the rights of creditors
generally and to the application of equitable principles and judicial
discretion. The opinion expressed in this paragraph is limited to the
enforceability of the provisions of the Agreement and we express no opinion as
to the enforceability of any other agreements or instruments which may be
referred to in the Agreement.
91
Charter One Financial
April ______, 1997
Page 6
(F) Neither the execution, delivery or performance of the Agreement by
Xxxxxxxxxx or Home Bank nor the consummation of the Company Merger and the Bank
Merger will (i) violate any provision of the respective Articles or Codes of
Xxxxxxxxxx or Home Bank, or (ii) to our actual knowledge violate any order,
judgment or decree which Xxxxxxxxxx or Home Bank is a party or by which either
of them or any of their properties or assets are bound.
(G) The Proxy Statement, as of the mailing date thereof, complied as to
form in all material respects with the applicable provisions of the Exchange
Act.
This opinion letter is supplied solely for your benefit pursuant to
Section 6.1(f) of the Agreement. The opinions expressed herein are as of the
date of this opinion letter and we assume no obligation to advise you of changes
that may be brought to our attention hereafter. This opinion letter may not be
relied upon by you for any other purpose, nor may this letter be quoted from,
circulated, copied, relied upon or otherwise referred to, in whole or in part,
by any other person or entity, except your counsel, without our prior written
consent.
Very truly yours,
XXXX XXXXXX & PARKS LLP
92
EXHIBIT E
[Xxxx Xxxxxx & Parks Legal Opinion]
____________, 1997
Charter One Financial, Inc.
Gentlemen:
We have acted as counsel to Xxxxxxxxxx Corporation ("Xxxxxxxxxx") and
Home Bank, F.S.B. ("Home Bank") in connection with the transactions contemplated
by the Agreement and Plan of Merger and Reorganization dated as of April -, 1997
(the "Agreement") by and among Charter One Financial, Inc. ("Charter One"),
Charter Michigan Bancorp, Inc. ("Charter Michigan"), Charter One Bank F.S.B.
("Charter One Bank"), Xxxxxxxxxx and Home Bank. Unless otherwise defined herein,
all capitalized terms used in this letter, which is delivered pursuant to
Section 6.1(f) of the Agreement, shall have the meanings set forth in the
Agreement.
This firm has represented Xxxxxxxxxx and its wholly-owned subsidiary,
Home Bank, in connection with the negotiation of the Agreement and matters
related thereto and with respect to other legal matters as to which we have been
consulted by them. While we provide legal services to Xxxxxxxxxx and Home Bank
on a regular basis, there may be matters of a legal nature as to which we have
not been consulted. We are familiar with the corporate proceedings taken by
Xxxxxxxxxx and Home Bank in connection with the Agreement.
93
Charter One Financial
April ____, 1997
Page 2
For purposes of the opinions expressed herein, we have examined copies
of the following documents:
1. The Agreement;
2. The Articles of Incorporation of Xxxxxxxxxx (the "Xxxxxxxxxx
Articles") certified by the Secretary of State of Ohio as of
April , 1997;
3. A copy of the Code of Regulations of Xxxxxxxxxx (the "Xxxxxxxxxx
Code") certified as true, complete and accurate by the Secretary
of Xxxxxxxxxx as of the date of this opinion;
4. The Charter of Home Bank (the "Home Bank Charter") certified by
the Secretary of Home Bank as of the date of this opinion;
5. A copy of the Bylaws of Home Bank (the "Home Bank Code")
certified as true, complete and accurate by the Secretary of
Home Bank as of the date of this opinion;
6. A Certificate of the Secretary of Xxxxxxxxxx dated as of the
date hereof, a copy of which is attached as Exhibit A hereto
(the "Xxxxxxxxxx Certificate") relating to receipt by Xxxxxxxxxx
of the consideration for its issued and outstanding shares
specified in the applicable resolutions of the Board of
Xxxxxxxxxx;
7. The certificates and other documents delivered by the respective
parties to the Agreement at or prior to the Effective Time.
In addition, we have examined originals, copies or certified copies of
such other corporate records of Xxxxxxxxxx and Home Bank, certificates of public
officials and officers of Xxxxxxxxxx
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Charter One Financial
April ____, 1997
Page 3
and Home Bank and such agreements, instruments and other documents as we have
deemed necessary as a basis for the opinions expressed below.
In our examination of the documents and certificates referred to above,
we have assumed, without inquiry (i) the authenticity of all documents
submitted to us as originals; (ii) the conformity to the originals thereof of
all documents submitted to us as copies; (iii) that all natural persons signing
said documents had, at the time of such signing, the full legal capacity to sign
and deliver said documents and records; (iv) that no action has been taken which
is not reflected in the corporate records made available to us from Xxxxxxxxxx
and Home Bank which amends, revokes, or otherwise affects any of the records or
documents which we have examined; (v) that each party, other than Xxxxxxxxxx or
Home Bank, executing any of the documents we have examined has full power and
authority to enter into and perform its obligations thereunder; and (vi) that
all of the facts recited, and representations and warranties made, by the
parties in the Agreement and the related certificates and documents examined by
us are true and correct in all material respects. With your permission, we do
not address in our opinion any aspects of the transactions contemplated by the
Agreement as they relate to the Michigan Merger.
Although we have conducted no independent investigation of the accuracy
or reasonableness of any of the foregoing assumptions, we have no actual
knowledge that any of these assumptions are inaccurate. The words "actual
knowledge" when used herein are intended to be limited to the knowledge of
lawyers in this firm who have given attention to matters involving Xxxxxxxxxx
and Home Bank.
95
Charter One Financial
April ______, 1997
Page 4
We are members of the bar of the State of Ohio and the law covered by
the opinions expressed herein is limited to the laws of the State of Ohio and
the Federal laws of the United States as they exist on the date of this opinion.
Moreover, we do not express any opinion concerning choice of law, securities law
(except as set forth in opinion paragraph G below), or antitrust law matters.
Based upon the foregoing, and subject to the qualifications and
assumptions set forth herein, we are of the opinion that:
(A) Xxxxxxxxxx is a corporation, validly existing and in good standing
under the laws of the State of Ohio and has the requisite power and authority to
own or lease its properties and assets and to carry on its business as such
properties, assets and business are described in the Proxy Statement.
(B) Home Bank is a savings bank, validly existing under the laws of the
United States, and has the corporate power to own or lease its properties and
assets and carry on its business as such property, assets and business are
described in the Proxy Statement, Home Bank is an "insured depository
institution" as defined in the Federal Deposit Insurance Act and applicable
regulations thereunder.
(C) The outstanding shares of capital stock of Xxxxxxxxxx and Home Bank
are duly authorized, validly issued, fully paid and non-assessable and are not
subject to any pre-emptive rights under the Ohio General Corporation Law, their
respective Articles or Codes or under any agreement to which either of them are
parties of which we have actual knowledge. All the
96
Charter One Financial
April ______, 1997
Page 5
outstanding shares of capital stock of Home Bank are legally and beneficially
owned by Xxxxxxxxxx free and clear of any lien, encumbrance or claim.
(D) The execution and delivery of the Agreement and the consummation of
the Company Merger and the Bank Merger have been duly and validly authorized by
the respective Boards of Directors of Xxxxxxxxxx and Home Bank and the Agreement
and the Company Merger have been approved by the holders of two-thirds of the
issued and outstanding shares of Xxxxxxxxxx Common Stock. To our actual
knowledge, no consent or approval, which has not already been obtained, from any
regulatory authority is required for execution and delivery by Xxxxxxxxxx or
Home Bank of the Agreement or any of the documents to be executed and delivered
by Xxxxxxxxxx and Home Bank therewith and the consummation of the Company Merger
and the Bank Merger.
(E) The Agreement (assuming that it has been duly authorized, executed
and delivered by, and is a binding obligation of, Charter One, Charter Michigan
and Charter One Bank) constitutes a valid and binding obligation of Xxxxxxxxxx
and Home Bank enforceable against Xxxxxxxxxx and Home Bank in accordance with
its terms, subject as to enforceability to applicable bankruptcy, insolvency,
reorganization, moratorium, liquidation or similar laws in effect from time to
time relating to or affecting the enforcement of the rights of creditors
generally and to the application of equitable principles and judicial
discretion. The opinion expressed in this paragraph is limited to the
enforceability of the provisions of the Agreement and we express no opinion as
to the enforceability of any other agreements or instruments which may be
referred to in the Agreement.
97
Charter One Financial
April _____, 1997
Page 6
(F) Neither the execution, delivery or performance of the Agreement by
Xxxxxxxxxx or Home Bank nor the consummation of the Company Merger and the Bank
Merger will (i) violate any provision of the respective Articles or Codes of
Xxxxxxxxxx or Home Bank, or (ii) to our actual knowledge violate any order,
judgment or decree which Xxxxxxxxxx or Home Bank is a party or by which either
of them or any of their properties or assets are bound.
(G) The Proxy Statement, as of the mailing date thereof, complied as to
form in all material respects with the applicable provisions of the Exchange
Act.
This opinion letter is supplied solely for your benefit pursuant to
Section 6.1(f) of the Agreement. The opinions expressed herein are as of the
date of this opinion letter and we assume no obligation to advise you of changes
that may be brought to our attention hereafter. This opinion letter may not be
relied upon by you for any other purpose, nor may this letter be quoted from,
circulated, copied, relied upon or otherwise referred to, in whole or in part,
by any other person or entity, except your counsel, without our prior written
consent.
Very truly yours,
XXXX XXXXXX & PARKS LLP
98
EXHIBIT F
(000) 000-0000
April __, 1997
Xxxxxxxxxx Corporation
00 Xxxxxxxx Xxxxx
Xxxxx 000
Xxxxxxxxx, XX 00000
Gentlemen:
We have served as counsel to Charter One Financial, Inc. ("COFI"),
Charter Michigan Bancorp, Inc. ("Charter Bancorp") and Charter One Bank F.S.B.
("Charter One Bank") in connection with the Agreement and Plan of Merger and
Reorganization, dated April __ 1997 (the "Agreement"), by and among COFI,
Charter Michigan, Charter One Bank, Xxxxxxxxxx Corporation ("Xxxxxxxxxx") and
Home Bank, F.S.B. ("Home Bank"). Unless otherwise defined herein, all
capitalized terms used herein shall have the meanings set forth in the
Agreement.
In connection with this opinion, which is being rendered pursuant to
Section 6.2(f) of the Agreement, we have examined (i) the Agreement; (ii)
respectively, the Certificate of Incorporation, Articles of Incorporation,
Charter and Bylaws of COFI, Charter Michigan and Charter One Bank; (iii) certain
resolutions of the Boards of Directors of COFI, Charter Michigan and Charter One
Bank; (iv) certificates or telegrams from public officials as to the existence
and good standing of COFI and certain COFI Subsidiaries under the laws of the
place of their incorporation; (v) certificates of officers of COFI, (vi) the
Proxy Statement; and (vii) and certificates and other documents delivered by the
respective parties to the Agreement or prior to the Closing.
As to all matters of fact (including factual conclusions and
characterizations and descriptions of purpose, intention or other state of
mind), we have relied entirely upon (i) the representations of COFI and Charter
One Bank set forth in the Agreement and (ii) certificates delivered to us by
public
99
Xxxxxxxxxx Corporation
________, 1997
Page 2
officials and by the management of COFI, and have assumed, without independent
inquiry, the accuracy of those representations and certificates.
This opinion is based entirely on our review of the documents listed
above and we have made no other documentary review or investigation of any kind
whatsoever. We have assumed the genuineness of all signatures, the conformity to
the originals of all documents reviewed by us as copies, the authenticity and
completeness of all original documents reviewed by us in original or copy form
and the legal competence of each individual executing any document.
As used herein, the phrase "to our actual knowledge" refers to the
conscious awareness of facts by the attorneys in this firm who have been
actively involved in the transactions contemplated by the Agreement or the
preparation of the documents involved in this opinion letter.
Each opinion set forth below relating to the enforceability of any
agreement or instrument against COFI or a COFI Subsidiary is subject to the
following general qualifications:
(i) as to any instrument delivered by COFI or a COFI Subsidiary,
we assume that COFI or the COFI Subsidiary has received or will receive
the agreed to consideration therefor;
(ii) as to any agreement to which COFI or a COFI Subsidiary is a
party, we assume that such agreement is the binding obligation of each
other party thereto; and
(iii) the enforceability of any obligation of COFI or a COFI
Subsidiary may be limited by bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium, marshalling or other rules of
law affecting the enforcement of creditors' rights and remedies
generally (including such as may deny giving effect to waivers of
debtors' or guarantors' rights) or general principles of equity and
judicial discretion.
We express no opinion as to the laws of any jurisdiction other than the
laws of the United States of America and the State of Delaware to the extent
specifically referred to herein.
We understand that all of the foregoing assumptions and limitations are
acceptable to you.
Based upon and subject to the foregoing, we are of the opinion that:
(a) COFI is a corporation, validly existing and in good standing
under the laws of the State of Delaware, and has the corporate power to
own or lease its properties and assets and to carry on its business as
such properties, assets and business are described in the Prospectus/
Proxy Statement.
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Xxxxxxxxxx Corporation
___________, 1997
Page 3
(b) Charter One Bank is a savings bank duly organized and
validly existing under the laws of the United States, and has corporate
power to own or lease its properties and assets and to carry on its
business as such properties, assets and business are described in the
Proxy Statement.
(c) The execution and delivery of the Agreement and the
consummation of the Company Merger, the Michigan Merger and the Bank
Merger have been duly and validly authorized by the Boards of Directors
of COFI, Charter Michigan and Charter One Bank. Except for the filing of
applicable certificates or articles of merger with state regulatory
authorities with respect to the Company Merger and Michigan Merger, and
articles of combination with the OTS with respect to the Bank Merger, to
our actual knowledge, no consent or approval, which has not already been
obtained, from any regulatory authority is required for execution and
delivery by COFI, Charter Michigan and Charter One Bank of the Agreement
or any of the documents to be executed and delivered by any of them in
connection therewith and the consummation of the Company Merger, the
Michigan Merger and the Bank Merger.
(d) The Agreement constitutes a valid and binding obligation of
COFI, Charter Michigan and Charter One Bank enforceable in accordance
with its terms.
(e) Neither the execution, delivery or performance of the
Agreement by COFI, Charter Michigan or Charter One Bank, nor the
consummation of the Company Merger, the Michigan Merger, and the Bank
Merger will violate, respectively, the Certificate or Articles of
Incorporation, Charter or Bylaws of COFI, Merger Sub, Charter Michigan
or Charter One Bank.
(f) The shares of COFI Common Stock to be issued pursuant to the
Company Merger to the Xxxxxxxxxx stockholders will be duly authorized,
validly issued, fully-paid and non-assessable.
The opinions expressed herein are solely for your benefit in connection
with the transactions contemplated by the Agreement. This opinion is given as of
the date hereof and we assume no obligation to advise you of changes that may be
brought to our attention hereafter. This opinion may not be relied upon by you
for any other purpose, nor may this opinion be quoted from, circulated,
101
Xxxxxxxxxx Corporation
____________ 1997
Page 4
copied, relied upon or otherwise referred to, in whole or in part, by any other
person or entity without the prior written consent of this firm.
Very truly yours,
SILVER, XXXXXXXX & TAFF, L.L.P.
