AGREEMENT AND PLAN OF MERGER
BY AND BETWEEN
NEW YORK COMMUNITY BANCORP, INC.
AND
SYNERGY FINANCIAL GROUP, INC.
May 13, 2007
TABLE OF CONTENTS
ARTICLE I CERTAIN DEFINITIONS........................................................................... 1
1.1. Certain Definitions......................................................................... 1
ARTICLE II THE MERGER................................................................................... 7
2.1. Merger...................................................................................... 7
2.2. Effective Time.............................................................................. 7
2.3. Certificate of Incorporation and Bylaws..................................................... 7
2.4. Directors and Officers of Surviving Corporation............................................. 7
2.5. Effects of the Merger....................................................................... 7
2.6. Bank Merger................................................................................. 8
2.7 Tax Consequences............................................................................ 8
2.8. Possible Alternative Structures............................................................. 8
2.9. Additional Actions.......................................................................... 8
ARTICLE III CONVERSION OF SHARES........................................................................ 9
3.1. Conversion of Synergy Common Stock; Merger Consideration.................................... 9
3.2. Procedures for Exchange of Synergy Common Stock............................................. 10
3.3. Treatment of Synergy Options................................................................ 11
3.4. Reservation of Shares....................................................................... 12
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF SYNERGY.................................................... 13
4.1. Standard.................................................................................... 13
4.2. Organization................................................................................ 13
4.3. Capitalization.............................................................................. 14
4.4. Authority; No Violation..................................................................... 15
4.5. Consents.................................................................................... 15
4.6. Financial Statements/Regulatory Reports..................................................... 16
4.7. Taxes....................................................................................... 16
4.8. No Material Adverse Effect.................................................................. 17
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4.9. Material Contracts; Leases; Defaults........................................................ 17
4.10. Ownership of Property; Insurance Coverage................................................... 19
4.11. Legal Proceedings........................................................................... 19
4.12. Compliance With Applicable Law.............................................................. 20
4.13. Employee Benefit Plans...................................................................... 20
4.14. Brokers, Finders and Financial Advisors..................................................... 22
4.15. Environmental Matters....................................................................... 22
4.16. Loan Portfolio.............................................................................. 24
4.17. Securities Documents........................................................................ 25
4.18. Related Party Transactions.................................................................. 25
4.19. Deposits.................................................................................... 25
4.20. Antitakeover Provisions Inapplicable; Required Vote......................................... 25
4.21. Registration Obligations.................................................................... 25
4.22. Risk Management Instruments................................................................. 26
4.23. Fairness Opinion............................................................................ 26
4.24. Trust Accounts.............................................................................. 26
4.25. Intellectual Property....................................................................... 26
4.26. Labor Matters............................................................................... 27
4.27. Internal Controls........................................................................... 27
4.28. Synergy Information Supplied................................................................ 27
4.29. No Dissenters Rights........................................................................ 27
ARTICLE V REPRESENTATIONS AND WARRANTIES OF NYB ........................................................ 27
5.1. Standard..................................................................................... 28
5.2. Organization................................................................................. 28
5.3. Capitalization............................................................................... 28
5.4. Authority; No Violation...................................................................... 29
5.5. Consents..................................................................................... 29
5.6. Financial Statements/Regulatory Reports...................................................... 30
5.7. Taxes........................................................................................ 30
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5.8. No Material Adverse Effect................................................................... 31
5.9. Ownership of Property; Insurance Coverage.................................................... 31
5.10. Legal Proceedings............................................................................ 31
5.11. Compliance With Applicable Law............................................................... 31
5.12. Environmental Matters........................................................................ 32
5.13. Securities Documents......................................................................... 33
5.14. Brokers, Finders and Financial Advisors...................................................... 33
5.15. NYB Common Stock............................................................................. 33
5.16. Material Contracts........................................................................... 33
5.17. NYB Information Supplied..................................................................... 33
5.18. Internal Controls............................................................................ 34
ARTICLE VI COVENANTS OF SYNERGY ........................................................................ 34
6.1. Conduct of Business.......................................................................... 34
6.2. Current Information.......................................................................... 37
6.3. Access to Properties and Records............................................................. 38
6.4. Financial and Other Statements............................................................... 39
6.5. Maintenance of Insurance..................................................................... 39
6.6. Disclosure Supplements....................................................................... 40
6.7. Consents and Approvals of Third Parties...................................................... 40
6.8. All Reasonable Best Efforts.................................................................. 40
6.9. Failure to Fulfill Conditions................................................................ 40
6.10. No Solicitation.............................................................................. 40
6.11. Reserves and Merger-Related Costs............................................................ 41
6.12. Takeover Laws................................................................................ 41
ARTICLE VII COVENANTS OF NYB............................................................................ 42
7.1. Conduct of Business.......................................................................... 42
7.2. Current Information.......................................................................... 42
7.3. Financial and Other Statements............................................................... 42
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7.4. Disclosure Supplements....................................................................... 42
7.5. Consents and Approvals of Third Parties...................................................... 42
7.6. All Reasonable Best Efforts.................................................................. 43
7.7. Failure to Fulfill Conditions................................................................ 43
7.8. Employee Benefits............................................................................ 43
7.9. Directors and Officers Indemnification and Insurance......................................... 44
7.10. Stock Listing................................................................................ 45
7.11. Stock Reserve................................................................................ 45
7.12. Section 16(b) Exemption...................................................................... 46
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ARTICLE VIII REGULATORY AND OTHER MATTERS .............................................................. 46
8.1. Synergy Stockholder Meeting.................................................................. 46
8.2. Proxy Statement-Prospectus................................................................... 46
8.3. Regulatory Approvals......................................................................... 47
8.4. Affiliates................................................................................... 48
ARTICLE IX CLOSING CONDITIONS........................................................................... 48
9.1. Conditions to Each Party's Obligations under this Agreement................................. 48
9.2. Conditions to the Obligations of NYB under this Agreement................................... 49
9.3. Conditions to the Obligations of Synergy under this Agreement............................... 49
ARTICLE X THE CLOSING .................................................................................. 50
10.1. Time and Place.............................................................................. 50
10.2. Deliveries at the Pre-Closing and the Closing............................................... 50
ARTICLE XI TERMINATION, AMENDMENT AND WAIVER ........................................................... 51
11.1. Termination................................................................................. 51
11.2. Effect of Termination....................................................................... 54
11.3. Amendment, Extension and Waiver............................................................. 55
ARTICLE XII MISCELLANEOUS............................................................................... 56
12.1. Confidentiality............................................................................. 56
12.2. Public Announcements........................................................................ 56
12.3. Survival.................................................................................... 56
12.4. Notices..................................................................................... 56
12.5. Parties in Interest......................................................................... 57
12.6. Complete Agreement.......................................................................... 57
12.7. Counterparts................................................................................ 57
12.8. Severability................................................................................ 57
12.9. Governing Law............................................................................... 58
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12.10. Interpretation.............................................................................. 58
12.11. Definition of "subsidiary" and "affiliate"; Covenants with Respect to Subsidiaries and
Affiliates............................................................................... 58
12.12. Waiver of Jury Trial........................................................................ 58
Exhibit A FORM OF SYNERGY VOTING AGREEMENT
Exhibit B PLAN OF BANK MERGER
Exhibit C AFFILIATES AGREEMENT
Exhibit D RETENTION AGREEMENT WITH XXXX XXXXX
Exhibit E NONCOMPETITION AGREEMENT OF XXXX XXXXX
Exhibit F BENEFITS TERMINATION AGREEMENT WITH XXXX XXXXX
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AGREEMENT AND PLAN OF MERGER
This AGREEMENT AND PLAN OF MERGER (this "Agreement"), dated as of May
13, 2007, is by and between New York Community Bancorp, Inc., a Delaware
corporation ("NYB"), and Synergy Financial Group, Inc., a New Jersey corporation
("Synergy").
RECITALS
WHEREAS, the Board of Directors of each of NYB and Synergy (i) has
determined that this Agreement and the business combination and related
transactions contemplated hereby are in the best interests of their respective
companies and stockholders, and (ii) has adopted a resolution approving this
Agreement and declaring its advisability; and
WHEREAS, in accordance with the terms of this Agreement, Synergy will
merge with and into NYB (the "Merger"); and
WHEREAS, as a condition to the willingness of NYB to enter into this
Agreement, each director and executive officer of Synergy has entered into a
Voting Agreement, substantially in the form of Exhibit A hereto, dated as of the
date hereof, with NYB (the "Voting Agreement"), pursuant to which each such
director and executive officer has agreed, among other things, to vote all
shares of common stock of Synergy owned by such person in favor of the approval
of this Agreement and the transactions contemplated hereby, upon the terms and
subject to the conditions set forth in such Voting Agreement;
WHEREAS, concurrent with the execution of this Agreement, NYB and/or
New York Community Bank have entered into a Retention Agreement, Noncompetition
Agreement and Benefits Termination Agreement with Xxxx Xxxxx in the forms
attached hereto as Exhibits D, E and F;
WHEREAS, the parties intend the Merger to qualify as a reorganization
within the meaning of Section 368(a) of the Internal Revenue Code of 1986, as
amended (the "Code"), and that this Agreement be and is hereby adopted as a
"plan of reorganization" within the meaning of Sections 354 and 361 of the Code;
and
WHEREAS, the parties desire to make certain representations, warranties
and agreements in connection with the business transactions described in this
Agreement and to prescribe certain conditions thereto.
NOW, THEREFORE, in consideration of the mutual covenants,
representations, warranties and agreements herein contained, and of other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
ARTICLE I
CERTAIN DEFINITIONS
1.1. Certain Definitions.
As used in this Agreement, the following terms have the following
meanings (unless the context otherwise requires, references to Articles and
Sections refer to Articles and Sections of this Agreement).
"Affiliate" means any Person who directly, or indirectly, through one
or more intermediaries, controls, or is controlled by, or is under common
control with, such Person and, without limiting the
generality of the foregoing, includes any executive officer or director of such
Person and any Affiliate of such executive officer or director.
"Aggregate Merger Consideration" has the meaning set forth in Section
3.1.6.
"Agreement" has the meaning set forth in the preamble to this Agreement
and any amendments thereto.
"Bank Merger" has the meaning set forth in Section 2.6.
"Bank Regulator" means any Federal or state banking regulator,
including but not limited to the OTS, Federal Reserve, FDIC and the Department,
which regulates the banking subsidiaries of NYB or Synergy, or any of their
respective holding companies or subsidiaries, as the case may be.
"BHCA" means the Bank Holding Company Act of 1956, as amended.
"Certificate" means each certificate evidencing shares of Synergy
Common Stock.
"Claim" has the meaning set forth in Section 7.9.2.
"Closing" has the meaning set forth in Section 2.2.
"Closing Date" has the meaning set forth in Section 2.2.
"COBRA" means the Consolidated Omnibus Budget Reconciliation Act of
1985, as amended.
"Code" has the meaning set forth in the Recitals to this Agreement.
"Confidentiality Agreement" means the confidentiality agreement
referred to in Section 12.1.
"CRA" has the meaning set forth in Section 4.12.3
"Department" means the Banking Department of the State of New York, and
where appropriate shall include the Superintendent of Banks of the State of New
York and the Banking Board of the State of New York.
"Defined Benefit Plan" has the meaning set forth in Section 4.13.3.
"DGCL" means the Delaware General Corporation Law, as amended.
"Effective Time" has the meaning set forth in Section 2.2
"Environmental Laws" means any applicable Federal, state or local law,
statute, ordinance, rule, regulation, code, license, permit, authorization,
approval, consent, order, judgment, decree, injunction or agreement with any
governmental entity relating to (1) the protection, preservation or restoration
of the environment (including, without limitation, air, water vapor, surface
water, groundwater, drinking water supply, surface soil, subsurface soil, plant
and animal life or any other natural resource), and/or (2) the use, storage,
recycling, treatment, generation, transportation, processing, handling,
labeling, production, release or disposal of Materials of Environmental Concern.
The term Environmental Law includes without limitation the Comprehensive
Environmental Response, Compensation and Liability Act, as amended, 42 U.S.C.
ss.9601, et seq; the Resource Conservation and Recovery Act, as amended, 42
U.S.C.
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ss.6901, et seq; the Clean Air Act, as amended, 42 U.S.C. ss.7401, et seq; the
Federal Water Pollution Control Act, as amended, 33 U.S.C. ss.1251, et seq; the
Toxic Substances Control Act, as amended, 15 U.S.C. ss.2601, et seq; the
Emergency Planning and Community Right to Know Act, 42 U.S.C. ss.11001, et seq;
the Safe Drinking Water Act, 42 U.S.C. ss.300f, et seq; and all comparable state
and local laws that may impose liability or obligations for injuries or damages
due to the presence of or exposure to any Materials of Environmental Concern.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Exchange Agent" means such bank or trust company or other agent
designated by NYB, and reasonably acceptable to Synergy, which shall act as
agent for NYB in connection with the exchange procedures for converting shares
of Synergy Common Stock evidenced by Certificates into the Merger Consideration.
"Exchange Fund" has the meaning set forth in Section 3.2.1.
"Exchange Ratio" has the meaning set forth in Section 3.1.3.
"FDIA" means the Federal Deposit Insurance Act, as amended.
"FDIC" means the Federal Deposit Insurance Corporation.
"Federal Reserve" means the Board of Governors of the Federal Reserve
System.
"FHLB" means the Federal Home Loan Bank of New York.
"GAAP" means accounting principles generally accepted in the United
States of America, consistently applied with prior practice.
"Governmental Entity" means any Federal or state court, administrative
agency or commission or other governmental authority or instrumentality.
"HOLA" means the Home Owners' Loan Act, as amended, and the regulations
of the OTS promulgated thereunder.
"Indemnified Party" has the meaning set forth in Section 7.9.2.
"Indemnified Liabilities" has the meaning set forth in Section 7.9.2.
"IRS" means the United States Internal Revenue Service.
"Knowledge" as used with respect to a Person (including references to
such Person being aware of a particular matter) means those facts that are known
by the executive officers and directors of such Person, and includes any facts,
matters or circumstances set forth in any written notice from any Bank Regulator
or any other material written notice received by that Person.
"Material Adverse Effect" means, with respect to NYB or Synergy,
respectively, any effect that (i) is material and adverse to the financial
condition, results of operations or business of NYB and its Subsidiaries taken
as a whole, or Synergy and its Subsidiaries taken as a whole, respectively, or
(ii) does
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or would materially impair the ability of either Synergy, on the one hand, or
NYB, on the other hand, to perform its obligations under this Agreement or
otherwise materially threaten or materially impede the consummation of the
transactions contemplated by this Agreement; provided that "Material Adverse
Effect" shall not be deemed to include the impact of any of the following: (a)
changes in laws, regulations or interpretations of laws or regulations generally
affecting banking or bank holding company businesses, but not uniquely relating
to NYB or Synergy, (b) changes in economic conditions, including changes in
prevailing interest rates, but not uniquely relating to NYB or Synergy, (c)
changes in GAAP or regulatory accounting principles generally applicable to
financial institutions and their holding companies, but not uniquely relating to
NYB or Synergy, (d) actions and omissions of a party hereto (or any of its
Subsidiaries) taken with the prior written consent of the other party or as
permitted by this Agreement, (e) changes in national or international political
or social conditions, including the engagement by the United States in
hostilities, whether or not pursuant to the declaration of a national emergency
or war, or the occurrence of any military or terrorist attack upon or within the
United States, or any of its territories, possessions or diplomatic or consular
offices or upon any military installation, equipment or personnel of the United
States, and (f) the impact of the announcement of this Agreement, and the
transactions contemplated by this Agreement, and compliance with this Agreement
on the financial position, results of operations, business or operations of NYB
and its Subsidiaries or Synergy and its Subsidiaries, respectively, including
expenses incurred with respect to this Agreement and the transactions
contemplated hereby.
"Materials of Environmental Concern" means pollutants, contaminants,
wastes, toxic substances, petroleum and petroleum products, and any other
materials regulated under Environmental Laws.
"Maximum Amount" has the meaning set forth in Section 7.9.1.
"Merger" has the meaning set forth in the Recitals to this Agreement
and shall include, if the structure of the Merger is changed pursuant to Section
2.8, the merger of Synergy with a wholly owned first tier subsidiary of NYB.
"Merger Consideration" has the meaning set forth in Section 3.1.6.
"Merger Registration Statement" means the registration statement,
together with all amendments, filed with the SEC under the Securities Act for
the purpose of registering shares of NYB Common Stock to be offered to holders
of Synergy Common Stock in connection with the Merger.
"NASD" means the National Association of Securities Dealers, Inc.
"NJBCA" means the New Jersey Business Corporation Act, as amended.
"New Option" has the meaning set forth in Section 3.3.
"New York Community Bank" means New York Community Bank, a wholly owned
savings bank subsidiary of NYB that is chartered under the laws of the State of
New York, with its principal executive offices located at 000 Xxxxxxx Xxxxxx,
Xxxxxxxx, Xxx Xxxx 00000.
"NYB" has the meaning set forth in the preamble to this Agreement, with
its principal executive offices located at 000 Xxxxxxx Xxxxxx, Xxxxxxxx, Xxx
Xxxx 00000.
"NYB Common Stock" means the common stock, par value $0.01 per share,
of NYB.
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"NYB DISCLOSURE SCHEDULE" means a written disclosure schedule delivered
by NYB to Synergy specifically referring to the appropriate section of this
Agreement.
"NYB Fee" has the meaning set forth in Section 11.2.2.
"NYB Financial Statements" means the (i) the audited consolidated
statements of financial condition (including related notes and schedules) of NYB
as of December 31, 2006 and 2005 and the consolidated statements of income,
changes in stockholders' equity and cash flows (including related notes and
schedules, if any) of NYB for each of the three years ended December 31, 2006,
2005 and 2004, as set forth in NYB's annual report for the year ended December
31, 2006, and (ii) the unaudited interim consolidated financial statements of
NYB as of the end of each calendar quarter following December 31, 2006, and for
the periods then ended, as filed by NYB in its Securities Documents.
"NYB Preferred Stock" has the meaning set forth in Section 5.3.1.
"NYB Regulatory Agreement" has the meaning set forth in Section
5.11.3.
"NYB Regulatory Reports" means the reports of NYB and New York
Community Bank and accompanying schedules, as filed with the Department or the
Federal Reserve, for each calendar quarter beginning with the quarter ended
December 31, 2004 through the Closing Date.
"NYB Stock Benefit Plans" means those stock benefit plans identified in
the Exhibits to NYB's Form 10-K for the year ended December 31, 2006, and filed
with the SEC on March 1, 2007, or subsequently adopted after the date hereof.
"OTS" means the Office of Thrift Supervision.
"Pension Plan" has the meaning set forth in Section 4.13.2.
"Person" means any individual, corporation, partnership, joint venture,
association, trust or "group" (as that term is defined under the Exchange Act).
"Pre-Closing" has the meaning set forth in Section 10.1.
"Proxy Statement-Prospectus" has the meaning set forth in Section
8.2.1.
"Regulatory Approvals" means the approvals of all Bank Regulators that
are necessary in connection with the consummation of the Merger, the Bank Merger
and the related transactions contemplated by this Agreement and the Plan of Bank
Merger.
"Rights" means warrants, options, rights, convertible securities, stock
appreciation rights and other arrangements or commitments which obligate an
entity to issue or dispose of any of its capital stock or other ownership
interests or which provide for compensation based on the equity appreciation of
its capital stock.
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended.
"Securities Documents" means all reports, offering circulars, proxy
statements, registration statements and all similar documents filed, or required
to be filed, pursuant to the Securities Laws.
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"Securities Laws" means the Securities Act; the Exchange Act; the
Investment Company Act of 1940, as amended; the Investment Advisers Act of 1940,
as amended; the Trust Indenture Act of 1939, as amended; and, with respect to
each of the foregoing, the rules and regulations of the SEC promulgated
thereunder.
"Stock Exchange" means the New York Stock Exchange.
"Subsidiary" means any entity, of which 50% or more of its ownership
interests are owned either directly or indirectly by NYB or Synergy, as
applicable.
"Surviving Corporation" has the meaning set forth in Section 2.1.
"Synergy" has the meaning set forth in the preamble to this Agreement,
with its principal executive offices located at 000 Xxxxx Xxxxxx Xxxx, Xxxxxxxx,
Xxx Xxxxxx 00000.
"Synergy Bank" means Synergy Bank, a wholly owned savings bank
subsidiary of Synergy that is chartered under the laws of the United States of
America, with its principal executive offices at 000 Xxxxx Xxxxxx Xxxx,
Xxxxxxxx, Xxx Xxxxxx 00000.
"Synergy Common Stock" means the common stock, par value $0.10 per
share, of Synergy.
"Synergy Compensation and Benefit Plans" has the meaning set forth in
Section 4.13.1.
"SYNERGY DISCLOSURE SCHEDULE" means a written disclosure schedule
delivered by Synergy to NYB specifically referring to the appropriate section of
this Agreement.
"Synergy Financial Statements" means (i) the audited consolidated
statements of financial condition (including related notes and schedules, if
any) of Synergy as of December 31, 2006 and 2005 and the consolidated statements
of income, changes in stockholders' equity and cash flows (including related
notes and schedules, if any) of Synergy for each of the three years ended
December 31, 2006, 2005 and 2004, as set forth in Synergy's annual report for
the year ended December 31, 2006, and (ii) the unaudited interim consolidated
financial statements of Synergy as of the end of each calendar quarter following
December 31, 2006, and for the periods then ended, as filed by Synergy in its
Securities Documents.
"Synergy Option" means an option to purchase shares of Synergy Common
Stock granted pursuant to the Synergy Financial Group, Inc. 2003 Option Plan and
the Synergy Financial Group, Inc. 2004 Option Plan and as set forth in SYNERGY
DISCLOSURE SCHEDULE 4.3.1.
"Synergy Option Plans" means the Synergy Financial Group, Inc. 2004
Stock Option Plan and the Synergy Financial Group, Inc. 2003 Stock Option Plan
and any amendments thereto.
"Synergy Regulatory Agreement" has the meaning set forth in Section
4.12.3.
"Synergy Regulatory Reports" means the reports of Synergy and Synergy
Bank and accompanying schedules, as filed with the OTS for each calendar quarter
beginning with the quarter ended December 31, 2004 through the Closing Date.
"Synergy Stockholders' Meeting" has the meaning set forth in Section
8.1.1.
"Takeover Laws" shall have the meaning set forth in Section 4.20.1.
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"Termination Date" means January 31, 2008.
"Treasury Stock" has the meaning set forth in Section 4.3.1.
"Voting Agreement" has the meaning set forth in the Recitals to this
Agreement.
Other capitalized terms used herein are defined elsewhere in this
Agreement.
ARTICLE II
THE MERGER
2.1. Merger.
Subject to the terms and conditions of this Agreement, at the Effective
Time: (a) Synergy shall merge with and into NYB, with NYB as the resulting or
surviving corporation (the "Surviving Corporation"), and (b) the separate
existence of Synergy shall cease and all of the rights, privileges, powers,
franchises, properties, assets, liabilities and obligations of Synergy shall be
vested in and assumed by NYB. As part of the Merger, each share of Synergy
Common Stock will be converted into the right to receive the Merger
Consideration pursuant to the terms of Article III hereof.
2.2. Effective Time.
The Closing shall occur no later than fifteen (15) business days
following the latest to occur of (i) Department approval of the Bank Merger;
(ii) Federal Reserve approval of the Merger; (iii) Synergy stockholder approval
of the Merger; (iv) FDIC approval of the Bank Merger under the Bank Merger Act;
(v) the passing of any applicable waiting periods; or at such other date or time
upon which NYB and Synergy mutually agree (the "Closing"). The Merger shall be
effected by the filing of a Certificate of Merger with the Delaware Office of
the Secretary of State and by the filing of a Certificate of Merger with the New
Jersey Office of the State Treasurer, on the day of the Closing (the "Closing
Date"). The "Effective Time" means the later of the date and time specified in
the Certificate of Merger to be filed with the Delaware Office of the Secretary
of State and in the Certificate of Merger to be filed with the New Jersey Office
of the State Treasurer.
2.3. Certificate of Incorporation and Bylaws.
The Certificate of Incorporation and Bylaws of NYB as in effect
immediately prior to the Effective Time shall be the Certificate of
Incorporation and Bylaws of the Surviving Corporation, until thereafter amended
as provided therein and by applicable law.
2.4. Directors and Officers of Surviving Corporation.
The directors of NYB immediately prior to the Effective Time shall be
the directors of the Surviving Corporation, each to hold office in accordance
with the Certificate of Incorporation and Bylaws of the Surviving Corporation.
The officers of NYB immediately prior to the Effective Time shall be the
officers of Surviving Corporation, in each case until their respective
successors are duly elected or appointed and qualified.
2.5. Effects of the Merger.
At and after the Effective Time, the Merger shall have the effects as
set forth in the DGCL and the NJBCA.
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2.6. Bank Merger.
Subject to Section 2.8, concurrently with or as soon as practicable
after the execution and delivery of this Agreement, Synergy Bank and New York
Community Bank shall enter into the Plan of Bank Merger, in the form attached
hereto as Exhibit B, pursuant to which Synergy Bank will merge with and into New
York Community Bank (the "Bank Merger"). The parties intend that the Bank Merger
will become effective simultaneously with or immediately following the Effective
Time.
2.7. Tax Consequences.
It is intended that the Merger shall constitute a reorganization within
the meaning of Section 368(a) of the Code, and that this Agreement shall
constitute a "plan of reorganization" as that term is used in Sections 354 and
361 of the Code. From and after the date of this Agreement and until the
Closing, each party hereto shall use its reasonable best efforts to cause the
Merger to qualify, and will not knowingly take any action, cause any action to
be taken, fail to take any action or cause any action to fail to be taken, which
action or failure to act could prevent the Merger from qualifying as a
reorganization under Section 368(a) of the Code. Following the Closing, neither
NYB, Synergy nor any of their Affiliates shall knowingly take any action, cause
any action to be taken, fail to take any action or cause any action to fail to
be taken, which action or failure to act could cause the Merger to fail to
qualify as a reorganization under Section 368(a) of the Code.
2.8. Possible Alternative Structures.
Notwithstanding anything to the contrary contained in this Agreement,
prior to the Effective Time, NYB shall be entitled to revise the structure of
the transactions contemplated by this Agreement, including without limitation,
by substituting New York Commercial Bank for New York Community Bank as a party
to the Bank Merger or by substituting a wholly-owned first tier subsidiary for
NYB as the merging party, provided that: (i) any such subsidiary substituted for
NYB shall become a party to, and shall agree to be bound by, the terms of this
Agreement; (ii) there are no adverse Federal or state income tax consequences to
Synergy stockholders as a result of the modification; (iii) the consideration to
be paid to the holders of Synergy Common Stock under this Agreement is not
thereby changed in kind, value or reduced in amount; and (iii) such modification
will not delay materially or jeopardize the receipt of Regulatory Approvals or
other consents and approvals relating to the consummation of the Merger or the
Bank Merger or otherwise cause any condition to Closing set forth in Article IX
not to be capable of being fulfilled. The parties hereto agree to appropriately
amend this Agreement, or the Bank Merger Agreement, and any related documents in
order to reflect any such revised structure.
2.9. Additional Actions.
If, at any time after the Effective Time, NYB shall consider or be
advised that any further deeds, assignments or assurances in law or any other
acts are necessary or desirable to: (i) vest, perfect or confirm, of record or
otherwise, in NYB its right, title or interest in, to or under any of the
rights, properties or assets of Synergy or its Subsidiaries; or (ii) otherwise
carry out the purposes of or the transactions contemplated by this Agreement,
Synergy and its officers and directors shall be deemed to have granted to NYB an
irrevocable power of attorney to execute and deliver, in such official corporate
capacities, all such deeds, assignments or assurances in law or any other acts
as are necessary or desirable to (a) vest, perfect or confirm, of record or
otherwise, in NYB its right, title or interest in, to or under any of the
rights, properties or assets of Synergy, or (b) otherwise carry out the purposes
of or the transactions contemplated by this Agreement, and the officers and
directors of the NYB are authorized in the name of Synergy or otherwise to take
any and all such action.
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ARTICLE III
CONVERSION OF SHARES
3.1. Conversion of Synergy Common Stock; Merger Consideration.
At the Effective Time, by virtue of the Merger and without any action
on the part of NYB, Synergy or the holders of any of the shares of Synergy
Common Stock, the Merger shall be effected in accordance with the following
terms:
3.1.1. Each share of NYB Common Stock that is issued and
outstanding immediately prior to the Effective Time shall remain issued and
outstanding following the Effective Time and shall be unchanged by the Merger.
3.1.2. Each share of Synergy Common Stock owned by NYB
immediately prior to the Effective Time (other than shares held in a fiduciary
capacity or in connection with debts previously contracted) shall, at the
Effective Time, cease to exist, and the certificates for such shares shall be
canceled as promptly as practicable thereafter, and no payment or distribution
shall be made in consideration therefor.
3.1.3. Each share of Synergy Common Stock issued and
outstanding immediately prior to the Effective Time shall become and be
converted into, as provided in and subject to the adjustments, if applicable,
set forth in Sections 3.1.5, 3.1.7 or 11.1.11 in this Agreement, the right to
receive 0.80 shares (the "Exchange Ratio") of NYB Common Stock.
3.1.4. After the Effective Time, each share of Synergy Common
Stock shall be no longer outstanding and shall automatically be canceled and
shall cease to exist, and shall thereafter by operation of this section
represent the right to receive the Merger Consideration and any dividends or
distributions with respect thereto, and any dividends or distributions with a
record date prior to the Effective Time that were declared or made by Synergy on
such shares of Synergy Common Stock in accordance with the terms of this
Agreement on or prior to the Effective Time and which remain unpaid at the
Effective Time.
3.1.5. In the event NYB changes (or establishes a record date
for changing) the number of, or provides for the exchange of, shares of NYB
Common Stock issued and outstanding prior to the Effective Time as a result in
each case of a stock split, stock dividend, recapitalization, reclassification,
or similar transaction with respect to the outstanding NYB Common Stock and the
record date therefor shall be prior to the Effective Time, the Exchange Ratio
shall be proportionately and appropriately adjusted.
3.1.6. The consideration that a holder of one share of Synergy
Common Stock is entitled to receive pursuant to this Article III is referred to
herein as the "Merger Consideration" and the consideration that all of the
holders of Synergy Common Stock are entitled to receive pursuant to this Article
III is referred to herein as the "Aggregate Merger Consideration."
3.1.7. No Fractional Shares. Notwithstanding anything to the
contrary contained herein, no certificates or scrip representing fractional
shares of NYB Common Stock shall be issued upon the surrender for exchange of
Certificates, no dividend or distribution with respect to NYB Common Stock shall
be payable on or with respect to any fractional share interest, and such
fractional share interests shall not entitle the owner thereof to vote or to any
other rights of a stockholder of NYB. In lieu of the issuance of any such
fractional share, NYB shall pay to each former holder of Synergy Common Stock
who otherwise would be entitled to receive a fractional share of NYB Common
Stock, an amount in
9
cash, rounded to the nearest cent and without interest, equal to the product of
(i) the fraction of a share to which such holder would otherwise have been
entitled and (ii) the closing sales price of a share of NYB Common Stock as
reported on the Stock Exchange for the trading day immediately preceding the
Closing Date. For purposes of determining any fractional share interest, all
shares of Synergy Common Stock owned by a Synergy stockholder shall be combined
so as to calculate the maximum number of whole shares of NYB Common Stock
issuable to such Synergy stockholder.
3.2. Procedures for Exchange of Synergy Common Stock.
3.2.1. NYB to Make Merger Consideration Available. On or
before the Closing Date, NYB shall deposit, or shall cause to be deposited, with
the Exchange Agent for the benefit of the holders of Synergy Common Stock, for
exchange in accordance with this Section 3.2, certificates representing the
shares of NYB Common Stock (and cash, if applicable, pursuant to Section
11.1.11) pursuant to this Article III (including any cash that may be payable in
lieu of any fractional shares of Synergy Common Stock) (such cash and
certificates for shares of NYB Common Stock, together with any dividends or
distributions with respect thereto, being hereinafter referred to as the
"Exchange Fund").
3.2.2. Exchange of Certificates. NYB shall take all
commercially reasonable steps necessary to cause the Exchange Agent, within five
(5) business days after the Effective Time, to mail to each holder of a
Certificate or Certificates, a form letter of transmittal for return to the
Exchange Agent and instructions for use in effecting the surrender of the
Certificates for the Merger Consideration and cash in lieu of fractional shares,
if any, into which the Synergy Common Stock represented by such Certificates
shall have been converted as a result of the Merger. The letter of transmittal
(which shall be subject to the reasonable approval of Synergy) shall specify
that delivery shall be effected, and risk of loss and title to the Certificates
shall pass, only upon delivery of the Certificates to the Exchange Agent. Upon
proper surrender of a Certificate for exchange and cancellation to the Exchange
Agent, together with a properly completed letter of transmittal, duly executed,
the holder of such Certificate shall be entitled to receive in exchange
therefore, as applicable, (i) a certificate representing that number of shares
of NYB Common Stock to which such former holder of Synergy Common Stock shall
have become entitled pursuant to the provisions of Section 3.1.3 hereof (and, if
applicable, pursuant to Section 11.1.11), and (ii) a check representing the
amount of cash payable in lieu of a fractional share of NYB Common Stock, which
such former holder has the right to receive in respect of the Certificate
surrendered pursuant to the provisions of Section 3.1.7, and the Certificate so
surrendered shall forthwith be cancelled.
3.2.3. Rights of Certificate Holders after the Effective Time.
The holder of a Certificate that prior to the Merger represented issued and
outstanding Synergy Common Stock shall have no rights, after the Effective Time,
with respect to such Synergy Common Stock except to surrender the Certificate in
exchange for the Merger Consideration as provided in this Agreement. No
dividends or other distributions declared after the Effective Time with respect
to NYB Common Stock shall be paid to the holder of any unsurrendered Certificate
until the holder thereof surrenders such Certificate in accordance with this
Section 3.2. After the surrender of a Certificate in accordance with this
Section 3.2, the record holder thereof shall be entitled to receive any such
dividends or other distributions, without any interest thereon, which
theretofore had become payable with respect to shares of NYB Common Stock
represented by such Certificate.
3.2.4. Surrender by Persons Other than Record Holders. If the
Person surrendering a Certificate and signing the accompanying letter of
transmittal is not the record holder thereof, then it shall be a condition of
the payment of the Merger Consideration that: (i) such Certificate is properly
endorsed to such Person or is accompanied by appropriate stock powers, in either
case signed exactly as the name of the record holder appears on such
Certificate, and is otherwise in proper form for transfer, or is accompanied by
appropriate evidence of the authority of the Person surrendering such
Certificate and
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signing the letter of transmittal to do so on behalf of the record holder; and
(ii) the Person requesting such exchange shall pay to the Exchange Agent in
advance any transfer or other taxes required by reason of the payment to a
Person other than the registered holder of the Certificate surrendered, or
required for any other reason, or shall establish to the reasonable satisfaction
of the Exchange Agent that such tax has been paid or is not payable.
3.2.5. Closing of Transfer Books. From and after the Effective
Time, there shall be no transfers on the stock transfer books of Synergy of the
Synergy Common Stock that were outstanding immediately prior to the Effective
Time. If, after the Effective Time, Certificates representing such shares are
presented for transfer to the Exchange Agent, they shall be exchanged for the
Merger Consideration and canceled as provided in this Section 3.2.
3.2.6. Return of Exchange Fund. At any time following the
twelve (12) month period after the Effective Time, NYB shall be entitled to
require the Exchange Agent to deliver to it any portions of the Exchange Fund
which had been made available to the Exchange Agent and not disbursed to holders
of Certificates (including, without limitation, all interest and other income
received by the Exchange Agent in respect of all funds made available to it),
and thereafter such holders shall be entitled to look to NYB (subject to
abandoned property, escheat and other similar laws) with respect to any Merger
Consideration payable upon due surrender of the Certificates held by them.
Notwithstanding the foregoing, neither NYB nor the Exchange Agent shall be
liable to any holder of a Certificate for any Merger Consideration delivered in
respect of such Certificate to a public official pursuant to any abandoned
property, escheat or other similar law.
3.2.7. Lost, Stolen or Destroyed Certificates. If any
Certificate shall have been lost, stolen or destroyed, upon the making of an
affidavit of that fact by the Person claiming such Certificate to be lost,
stolen or destroyed and, if required by NYB, the posting by such Person of a
bond in such amount as NYB may reasonably require as indemnity against any claim
that may be made against it with respect to such Certificate, the Exchange Agent
will issue in exchange for such lost, stolen or destroyed Certificate the Merger
Consideration deliverable in respect thereof.
3.2.8. Withholding. NYB or the Exchange Agent will be entitled
to deduct and withhold from the consideration otherwise payable pursuant to this
Agreement to any holder of Synergy Common Stock such amounts as NYB (or any
Affiliate thereof) or the Exchange Agent are required to deduct and withhold
with respect to the making of such payment under the Code, or any applicable
provision of federal, state, local or non-U.S. tax law. To the extent that such
amounts are properly withheld by NYB or the Exchange Agent, such withheld
amounts will be treated for all purposes of this Agreement as having been paid
to the holder of the Synergy Common Stock in respect of whom such deduction and
withholding were made by NYB or the Exchange Agent.
3.3. Treatment of Synergy Options. 3.3.1 Exchange for New Options
At the Effective Time, by virtue of the Merger and without any action
on the part of any holder of an option, each Synergy Option that is outstanding
and unexercised, whether vested or unvested, immediately prior thereto shall be
converted into an option (each, a "New Option") to purchase such number of
shares of NYB Common Stock at an exercise price determined as provided below
(and otherwise having the same duration and other terms as the original Synergy
Option);
(i) the number of shares of NYB Common Stock to be subject to the New
Option shall be equal to the product of (A) the number of shares
of Synergy Common Stock purchasable
11
upon exercise of the original Synergy Option and (B) the Exchange
Ratio, the product being rounded to the nearest whole share where
(i) a tenth of a share of 4 or less shall be rounded down and
(ii) a tenth of a share of 5 or more shall rounded up; and
(ii) the exercise price per share of NYB Common Stock under the New
Option shall be equal to (A) the exercise price per share of
Synergy Common Stock under the original Synergy Option divided by
(B) the Exchange Ratio, rounded to the nearest cent.
With respect to any Synergy Options that are "incentive stock options"
(as defined in Section 422(b) of the Code), the foregoing adjustments shall be
effected in a manner consistent with Section 424(a) of the Code. Synergy, or its
Board of Directors or an appropriate committee thereof, has taken all action
necessary on its part to give effect to the provisions of this Section 3.3.1.
At or prior to the Effective Time, Synergy shall make all necessary
arrangements with respect to its plans to permit assumption of the unexercised
Synergy Options by NYB pursuant to this Section 3.3.1 and as of the Effective
Time NYB shall assume such Synergy Options and the Synergy Option Plan under
which they have been issued. It is intended that such assumption shall be
undertaken consistent with and in a manner that will not constitute a
"modification" under Section 409A of the Code.
NYB shall take all corporate action necessary to reserve for future
issuance a sufficient additional number of shares of NYB Common Stock to provide
for the satisfaction of its obligations with respect to the New Options. Within
three (3) business days after the Effective Time, NYB shall file with the SEC a
registration statement on Form S-8 (or any successor registration statement) and
make any state filings or obtain state exemptions with respect to the NYB Common
Stock issuable upon exercise of the New Options and shall use reasonable best
efforts to maintain the effectiveness of such registration statement (and
maintain the current status of the prospectus contained therein) for so long as
any New Option remain outstanding.
3.3.2 Cash Out of Synergy Options
Not later than ten (10) days prior to the anticipated Closing Date,
Synergy shall be entitled to make a written offer to the holders of Synergy
Stock Options that are either then exercisable or shall become exercisable upon
the Effective Time permitting such holders to irrevocably elect to have all or a
designated number of their Synergy Stock Options cancelled at the Effective Time
for a per share cash cancellation price equal to the average closing sales price
of a share of NYB Common Stock as reported on the Stock Exchange for the twenty
(20) trading days next preceding the Closing Date multiplied by the Exchange
Ratio less the exercise price per share, which per share cancellation price
shall be paid by Synergy immediately prior to Effective Time less applicable
withholding taxes. In order to be binding, the written irrevocable election of
an optionholder must be received by Synergy not later than the 2nd day prior to
the anticipated Closing Date. Each written offer notice to be issued by Synergy
and the written election document to be delivered by optionholders shall be in
form and substance reasonably satisfactory to NYB.
3.4. Reservation of Shares.
NYB shall reserve for issuance a sufficient number of shares of the NYB
Common Stock for the purpose of issuing shares of NYB Common Stock to the
Synergy stockholders in accordance with this Article III.
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ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF SYNERGY
Synergy represents and warrants to NYB that the statements contained in
this Article IV are correct and complete as of the date of this Agreement,
subject to the standard set forth in Section 4.1 and except as set forth in the
SYNERGY DISCLOSURE SCHEDULE delivered by Synergy to NYB on the date hereof, and
except as to any representation or warranty which specifically relates to an
earlier date, which only need be correct as of such earlier date. Synergy has
made a good faith effort to ensure that the disclosure on each schedule of the
SYNERGY DISCLOSURE SCHEDULE corresponds to the section referenced herein.
However, for purposes of the SYNERGY DISCLOSURE SCHEDULE, any item disclosed on
any schedule therein is deemed to be fully disclosed with respect to all
schedules under which such item may be relevant as and to the extent that it is
reasonably clear on the face of such schedule that such item applies to such
other schedule. References to the Knowledge of Synergy shall include the
Knowledge of Synergy's Subsidiaries.
4.1. Standard.
No representation or warranty of Synergy contained in this Article IV
shall be deemed untrue or incorrect, and Synergy shall not be deemed to have
breached a representation or warranty, as a consequence of the existence of any
fact, circumstance or event unless such fact, circumstance or event,
individually or taken together with all other facts, circumstances or events
inconsistent with any paragraph of Article IV, has had or is reasonably expected
to have a Material Adverse Effect, disregarding for these purposes (x) any
qualification or exception for, or reference to, materiality in any such
representation or warranty and (y) any use of the terms "material",
"materially", "in all material respects", "Material Adverse Effect" or similar
terms or phrases in any such representation or warranty. The foregoing standard
shall not apply to representations and warranties contained in Sections 4.2
(other than the last sentence of Section 4.2.1 and the second sentence of
Section 4.2.6), 4.3, 4.4, 4.5, 4.8, 4.9.1, 4.13.5, 4.13.8, 4.13.9, the second
sentence of 4.13.10, 4.20 and 4.23 which shall be deemed untrue, incorrect and
breached if they are not true and correct in all material respects based on the
qualifications and standards therein contained.
4.2. Organization.
4.2.1. Synergy is a corporation duly organized, validly
existing and in good standing under the laws of the State of New Jersey, and is
duly registered as a savings and loan holding company under the HOLA. Synergy
has the requisite corporate power and authority to carry on its business as now
conducted and is duly licensed or qualified to do business in the states of the
United States and foreign jurisdictions where its ownership or leasing of
property or the conduct of its business requires such qualification.
4.2.2. Synergy Bank is a savings bank duly organized and
validly existing under the laws of the United States of America. The deposits of
Synergy Bank are insured by the FDIC to the fullest extent permitted by law, and
all premiums and assessments required to be paid in connection therewith have
been paid by Synergy Bank when due. Synergy Bank is a member in good standing of
the FHLB and owns the requisite amount of stock therein.
4.2.3. Synergy Capital Investments, Inc. is a corporation duly
organized, validly existing and in good standing under the laws of the State of
New Jersey. The activities of Synergy Capital Investments, Inc. have been
limited to those set forth in Section 559.3 of the HOLA.
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4.2.4. Synergy Financial Services, Inc. is a corporation that
is duly organized, validly existing and in good standing under the laws of the
State of New Jersey. The activities of Synergy Financial Services, Inc. have
been limited to those set forth in Section 559.3 of the HOLA.
4.2.5. Synergy Investment Corporation is a Delaware
corporation duly organized, validly existing and in good standing under the laws
of the State of Delaware. The activities of Synergy Investment Corporation have
been limited to those set forth in Section 559.3 of the HOLA.
4.2.6. SYNERGY DISCLOSURE SCHEDULE 4.2.6 sets forth each
direct and indirect Synergy Subsidiary. Each Synergy Subsidiary is a
corporation, limited liability company or trust duly organized, validly existing
and in good standing (except for Synergy Bank, for which no good standing
representation is made) under the laws of its jurisdiction of incorporation or
organization and is duly qualified to do business in each jurisdiction where the
property owned, leased or operated, or the business conducted, by such Synergy
Subsidiary requires such qualification. Each Synergy Subsidiary has the
requisite corporate power and authority to own or lease its properties and
assets and to carry on its businesses as it is now being conducted.
4.2.7. The respective minute books of Synergy and each Synergy
Subsidiary accurately record, in all material respects, all corporate actions of
their respective stockholders and boards of directors (including committees).
4.2.8. Prior to the date of this Agreement, Synergy has made
available to NYB true and correct copies of the certificate of incorporation or
charter and bylaws of Synergy and each Synergy Subsidiary.
4.3. Capitalization.
4.3.1. The authorized capital stock of Synergy consists of
20,000,000 shares of common stock, $0.10 par value per share, of which as of the
date hereof 12,509,636 shares are outstanding, validly issued, fully paid and
nonassessable and free of preemptive rights, and 5,000,000 shares of preferred
stock, $0.10 par value ("Synergy Preferred Stock"), of which as of the date
hereof, no shares are outstanding. There are 1,127,493 shares of Synergy Common
Stock held by Synergy as treasury stock ("Treasury Stock"). Neither Synergy nor
any Synergy Subsidiary has or is bound by any Rights of any character relating
to the purchase, sale or issuance or voting of, or right to receive dividends or
other distributions on, any shares of Synergy Common Stock, or any other
security of Synergy or a Synergy Subsidiary or any securities representing the
right to vote, purchase or otherwise receive any shares of Synergy Common Stock
or any other security of Synergy or any Synergy Subsidiary, other than shares
issuable under the Synergy Option Plans. SYNERGY DISCLOSURE SCHEDULE 4.3.1 sets
forth the name of each holder of options to purchase Synergy Common Stock, the
number of shares each such individual may acquire pursuant to the exercise of
such options, the grant and vesting dates, and the exercise price relating to
the options held. As of the date hereof, Synergy has outstanding 1,257,646
options to acquire shares of Synergy Common Stock.
4.3.2. All capital stock or other ownership interests held by
Synergy or a Synergy Subsidiary in a Synergy Subsidiary is owned free and clear
of any lien or encumbrance. All of the outstanding shares of capital stock of
each Synergy Subsidiary have been duly authorized and are validly issued, fully
paid and nonassessable. Except for the Synergy Subsidiaries and as set forth in
SYNERGY DISCLOSURE SCHEDULE 4.3.2, Synergy does not possess, directly or
indirectly, any material equity interest in any corporate entity, except for
equity interests held in the investment portfolios of Synergy
14
Subsidiaries, equity interests held by Synergy Subsidiaries in a fiduciary
capacity, and equity interests held in connection with the lending activities of
Synergy Subsidiaries, including stock in the FHLB.
4.3.3. To Synergy's Knowledge, no Person or "group" (as that
term is used in Section 13(d)(3) of the Exchange Act), is the beneficial owner
(as defined in Section 13(d) of the Exchange Act) of 5% or more of the
outstanding shares of Synergy Common Stock except as disclosed on SYNERGY
DISCLOSURE SCHEDULE 4.3.3.
4.4. Authority; No Violation.
4.4.1. Synergy has the requisite corporate power and authority
to execute and deliver this Agreement and, subject to the receipt of the
Regulatory Approvals, the expiration of all waiting periods and the approval of
this Agreement by Synergy's stockholders, to consummate the transactions
contemplated hereby. The execution and delivery of this Agreement by Synergy and
the completion by Synergy of the transactions contemplated hereby, including the
Merger, have been duly and validly approved by the Board of Directors of
Synergy, and no other corporate proceedings on the part of Synergy, except for
the approval of the holders of Synergy Common Stock and the filing of
Certificates of Merger with the Secretaries of State of Delaware and New Jersey,
are necessary to complete the transactions contemplated hereby, including the
Merger. This Agreement has been duly and validly executed and delivered by
Synergy, and subject to approval by the stockholders of Synergy and receipt of
the Regulatory Approvals, the expiration of all waiting periods and due and
valid execution and delivery of this Agreement by NYB, constitutes the valid and
binding obligation of Synergy, enforceable against Synergy in accordance with
its terms, subject to applicable bankruptcy, insolvency, reorganization,
moratorium, fraudulent transfer and similar laws affecting creditors' rights
generally, and subject, as to enforceability, to general principles of equity.
4.4.2. Subject to receipt of Regulatory Approvals and
Synergy's and NYB's compliance with any conditions contained therein, and to the
receipt of the approval of the stockholders of Synergy, (A) the execution and
delivery of this Agreement by Synergy, (B) the consummation of the transactions
contemplated hereby, and (C) compliance by Synergy with any of the terms or
provisions hereof will not: (i) conflict with or result in a breach of any
provision of the certificate of incorporation, charter or bylaws of Synergy or
any Synergy Subsidiary, including Synergy Bank; (ii) violate any statute, code,
ordinance, rule, regulation, judgment, order, writ, decree or injunction
applicable to Synergy or any Synergy Subsidiary or any of their respective
properties or assets; or (iii) violate, conflict with, result in a breach of any
provisions of, constitute a default (or an event which, with notice or lapse of
time, or both, would constitute a default), under, result in the termination of,
accelerate the performance required by, or result in a right of termination or
acceleration or the creation of any lien, security interest, charge or other
encumbrance upon any of the properties or assets of Synergy or any Synergy
Subsidiary under any of the terms, conditions or provisions of any note, bond,
mortgage, indenture, deed of trust, license, lease, agreement or other
instrument or obligation to which Synergy or any Synergy Subsidiary is a party,
or by which they or any of their respective properties or assets may be bound or
affected, except for such violations, conflicts, breaches or defaults under
clause (ii) or (iii) hereof which, either individually or in the aggregate, will
not have a Material Adverse Effect on Synergy.
4.5. Consents.
Except for (a) the receipt of the Regulatory Approvals and compliance
with any conditions contained therein, (b) the filing of the Certificate of
Merger with the Secretary of State of the State of Delaware, (c) the filing of
the Certificate of Merger with the State Treasurer of the State of New Jersey,
(d) the filing with and/or acceptance by the Department of articles of merger or
similar documentation
15
with respect to the Bank Merger (e) the filing with the SEC of (i) the Merger
Registration Statement and (ii) such reports under Sections 13(a), 13(d), 13(g)
and 16(a) of the Exchange Act as may be required in connection with this
Agreement and the transactions contemplated hereby and the obtaining from the
SEC of such orders as may be required in connection therewith, (f) approval of
the listing of NYB Common Stock to be issued in the Merger on the Stock
Exchange, (g) such filings and approvals as are required to be made or obtained
under the securities or "Blue Sky" laws of various states in connection with the
issuance of the shares of NYB Common Stock pursuant to this Agreement, and (h)
the approval of this Agreement by the requisite vote of the stockholders of
Synergy, no consents, waivers or approvals of, or filings or registrations with,
any Governmental Entity are necessary, and, except as disclosed on SYNERGY
DISCLOSURE SCHEDULE 4.5, to Synergy's Knowledge, no consents, waivers or
approvals of, or filings or registrations with, any other third parties that are
material and are necessary, in connection with (x) the execution and delivery of
this Agreement by Synergy, (y) the Plan of Bank Merger by Synergy Bank and (z)
the completion of the Merger and the Bank Merger. Synergy has no reason to
believe that: (i) any Regulatory Approvals or other required consents or
approvals will not be received; or that (ii) any public body or authority, the
consent or approval of which is not required or to which a filing is not
required, will object to the completion of the transactions contemplated by this
Agreement.
4.6. Financial Statements/Regulatory Reports.
4.6.1. Synergy has previously made available to NYB the
Synergy Regulatory Reports. The Synergy Regulatory Reports have been prepared in
all material respects in accordance with applicable regulatory accounting
principles and practices throughout the periods covered by such statements.
4.6.2. Synergy has previously made available to NYB the
Synergy Financial Statements. The Synergy Financial Statements have been
consistently prepared in accordance with GAAP, and (including the related notes
where applicable) fairly present in each case in all material respects (subject
in the case of the unaudited interim statements to normal year-end adjustments),
the consolidated financial position, results of operations and cash flows of
Synergy and the Synergy Subsidiaries on a consolidated basis as of and for the
respective periods ending on the dates thereof, in accordance with GAAP during
the periods involved, except as indicated in the notes thereto, or in the case
of unaudited statements, as permitted by Form 10-Q.
4.6.3. At the date of each balance sheet included in the
Synergy Financial Statements or the Synergy Regulatory Reports, neither Synergy
nor Synergy Bank, as applicable, had any liabilities, obligations or loss
contingencies of any nature (whether absolute, accrued, contingent or otherwise)
of a type required to be reflected in such Synergy Financial Statements or the
footnotes thereto or the Synergy Regulatory Reports which are not fully
reflected or reserved against therein or fully disclosed in a footnote thereto,
except for liabilities, obligations and loss contingencies which are not
material individually or in the aggregate or which are incurred in the ordinary
course of business, consistent with past practice and subject, in the case of
any unaudited statements, to normal, recurring audit adjustments and the absence
of footnotes.
4.7. Taxes.
Synergy and the Synergy Subsidiaries that are at least 80 percent owned
by Synergy are members of the same affiliated group within the meaning of Code
Section 1504(a). Synergy has duly filed all federal, state and material local
tax returns required to be filed by or with respect to Synergy and every Synergy
Subsidiary on or prior to the Closing Date, taking into account any extensions
(all such returns,
16
to Synergy's Knowledge, being accurate and correct in all material respects) and
has duly paid or made provisions for the payment of all federal, state and local
taxes which have been incurred by or are due or claimed to be due from Synergy
and any Synergy Subsidiary by any taxing authority or pursuant to any written
tax sharing agreement on or prior to the Closing Date other than taxes or other
charges which (i) are not delinquent, (ii) are being contested in good faith, or
(iii) have not yet been fully determined. As of the date of this Agreement,
Synergy has received no written notice of, and there is no audit examination,
deficiency assessment, tax investigation or refund litigation with respect to
any taxes of Synergy or any of its Subsidiaries, and no claim has been made by
any authority in a jurisdiction where Synergy or any of its Subsidiaries do not
file tax returns that Synergy or any such Subsidiary is subject to taxation in
that jurisdiction. Synergy and its Subsidiaries have not executed an extension
or waiver of any statute of limitations on the assessment or collection of any
tax due that is currently in effect. Synergy and each of its Subsidiaries has
withheld and paid all taxes required to have been withheld and paid in
connection with amounts paid or owing to any employee, independent contractor,
creditor, stockholder or other third party, and Synergy and each of its
Subsidiaries has timely complied with all applicable information reporting
requirements under Part III, Subchapter A of Chapter 61 of the Code and similar
applicable state and local information reporting requirements.
4.8. No Material Adverse Effect.
Synergy and the Synergy Subsidiaries, taken as a whole, have conducted
operations in the ordinary course of business and not suffered any Material
Adverse Effect since December 31, 2006 and no event has occurred or circumstance
arisen since that date which, in the aggregate, has had or is reasonably likely
to have a Material Adverse Effect on Synergy.
4.9. Material Contracts; Leases; Defaults.
4.9.1. Except as set forth in SYNERGY DISCLOSURE SCHEDULE
4.9.1, neither Synergy nor any Synergy Subsidiary is currently a party to or
subject to: (i) any employment, consulting or severance contract or material
arrangement with any past or present officer, director or employee of Synergy or
any Synergy Subsidiary; (ii) any plan, material arrangement or contract
providing for bonuses, pensions, options, deferred compensation, retirement
payments, profit sharing or similar material arrangements for or with any past
or present officers, directors or employees of Synergy or any Synergy
Subsidiary; (iii) any collective bargaining agreement with any labor union
relating to employees of Synergy or any Synergy Subsidiary; (iv) any agreement
which by its terms limits the payment of dividends by Synergy or any Synergy
Subsidiary; (v) any instrument evidencing or related to material indebtedness
for borrowed money in which Synergy or any Synergy Subsidiary is a borrower
whether directly or indirectly, by way of purchase money obligation, conditional
sale, lease purchase, guaranty or otherwise, in respect of which Synergy or any
Synergy Subsidiary is an obligor to any Person, which instrument evidences or
relates to indebtedness other than deposits, repurchase agreements, FHLB
advances, bankers' acceptances, and "treasury tax and loan" accounts and
transactions in "federal funds" in each case established in the ordinary course
of business consistent with past practice, or which contains financial covenants
or material restrictions (other than prepayment penalties and those relating to
the payment of principal and interest when due) which would be applicable on or
after the Closing Date to NYB or any NYB Subsidiary; (vi) any agreement with a
vendor of products or services, written or oral, that obligates Synergy or any
Synergy Subsidiary for the payment of more than $50,000 annually or for the
payment of more than $100,000 over its remaining term, which is not terminable
without cause on 60 days' or less notice without penalty or premium, or (vii)
any agreement (other than this Agreement), contract, arrangement, commitment or
understanding (whether written or oral) that restricts or limits in any material
way the conduct of business by Synergy or any Synergy Subsidiary (it being
understood that any non-compete or similar provision shall be deemed material).
17
4.9.2. Each real estate lease that requires the consent of the
lessor or its agent resulting from the Merger by virtue of the terms of any such
lease, is listed in SYNERGY DISCLOSURE SCHEDULE 4.9.2 identifying the section of
the lease that contains such prohibition or restriction. Subject to any consents
that may be required as a result of the transactions contemplated by this
Agreement, to the Knowledge of Synergy, neither Synergy nor any Synergy
Subsidiary is in default in any material respect under any material contract,
agreement, commitment, arrangement, lease, insurance policy or other instrument
to which it is a party, by which its assets, business, or operations may be
bound or affected, or under which it or its assets, business, or operations
receive benefits, and there has not occurred any event that, with the lapse of
time or the giving of notice or both, would constitute such a default.
4.9.3. True and correct copies of agreements, contracts,
arrangements and instruments referred to in Section 4.9.1 and 4.9.2 have been
made available to NYB on or before the date hereof, are listed on SYNERGY
DISCLOSURE SCHEDULE 4.9.1 or SYNERGY DISCLOSURE SCHEDULE 4.9.2 and are in full
force and effect on the date hereof and, neither Synergy nor any Synergy
Subsidiary has materially breached any provision of, or is in default in any
material respect under any term of, any such contract, arrangement or
instrument. Except as disclosed in SYNERGY DISCLOSURE SCHEDULE 4.9.3, no party
to any material contract, arrangement or instrument will have the right to
terminate any or all of the provisions of any such contract, arrangement or
instrument as a result of the execution of, and the consummation of the
transactions contemplated by, this Agreement. Except as disclosed in SYNERGY
DISCLOSURE SCHEDULE 4.9.3, no plan, contract, employment agreement, termination
agreement, or similar agreement or arrangement to which Synergy or any Synergy
Subsidiary is a party or under which Synergy or any Synergy Subsidiary may be
liable contains provisions which permit an employee or independent contractor to
terminate it without cause and continue to accrue future benefits thereunder.
Except as set forth in SYNERGY DISCLOSURE SCHEDULE 4.9.3, no such agreement,
plan, contract, or arrangement (x) provides for acceleration in the vesting of
benefits or payments due thereunder upon the occurrence of a change in ownership
or control of Synergy or any Synergy Subsidiary or upon the occurrence of a
subsequent event; or (y) requires Synergy or any Synergy Subsidiary to provide a
benefit in the form of Synergy Common Stock or determined by reference to the
value of Synergy Common Stock.
4.9.4. Except as disclosed in SYNERGY DISCLOSURE SCHEDULE
4.9.4, none of the execution of this Agreement, approval of this Agreement by
the stockholders of Synergy or consummation of the transactions contemplated by
this Agreement will, either alone or in conjunction with any other event, (A)
result in any payment (including, without limitation, severance, unemployment
compensation, "excess parachute payment" (within the meaning of Section 280G of
the Code), forgiveness of indebtedness or otherwise) becoming due to any
director or any employee of Synergy or any Synergy Subsidiary under any Synergy
Compensation and Benefit Plan, (B) accelerate the time of payment or vesting or
trigger any payment or funding (through a grantor trust or otherwise) of
compensation or benefits under, increase the amount payable or trigger any other
material obligation pursuant to, any Synergy Compensation and Benefit Plan, (C)
result in the breach or violation of, or a default under, any Synergy
Compensation and Benefit Plan, (D) limit or restrict the ability to merge, amend
or terminate any Synergy Compensation and Benefit Plan or (E) result in any
payment which may be nondeductible for federal income tax purposes pursuant to
Section 162(m) or 280G of the Code and the regulations promulgated thereunder.
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4.10. Ownership of Property; Insurance Coverage.
4.10.1. Synergy and each Synergy Subsidiary has good and, as
to real property, marketable title to all material assets and properties owned
by Synergy or each Synergy Subsidiary in the conduct of its businesses, whether
such assets and properties are real or personal, tangible or intangible,
including assets and property reflected in the balance sheets contained in the
Synergy Regulatory Reports and in the Synergy Financial Statements or acquired
subsequent thereto (except to the extent that such assets and properties have
been disposed of in the ordinary course of business, since the date of such
balance sheets), subject to no material encumbrances, liens, mortgages, security
interests or pledges, except (i) those items which secure liabilities for public
or statutory obligations or any discount with, borrowing from or other
obligations to FHLB, inter-bank credit facilities, or any transaction by a
Synergy Subsidiary acting in a fiduciary capacity, (ii) those reflected in the
notes to the Synergy Financial Statements, and (iii) statutory liens for amounts
not yet delinquent or which are being contested in good faith. Synergy and the
Synergy Subsidiaries, as lessee, have the right under valid and existing leases
of real and personal properties used by Synergy and its Subsidiaries in the
conduct of their businesses to occupy or use all such properties as presently
occupied and used by each of them. Such existing leases and commitments to lease
constitute or will constitute operating leases for both tax and financial
accounting purposes and the lease expense and minimum rental commitments with
respect to such leases and lease commitments are as disclosed in all material
respects in the notes to the Synergy Financial Statements.
4.10.2. With respect to all agreements pursuant to which
Synergy or any Synergy Subsidiary has purchased securities subject to an
agreement to resell, if any, Synergy or such Synergy Subsidiary, as the case may
be, has a lien or security interest (which to Synergy's Knowledge is a valid,
perfected first lien) in the securities or other collateral securing the
repurchase agreement, and the value of such collateral equals or exceeds the
amount of the debt secured thereby.
4.10.3. Synergy and each Synergy Subsidiary currently maintain
insurance considered by each of them to be reasonable for their respective
operations. Neither Synergy nor any Synergy Subsidiary has received notice from
any current insurance carrier that: (i) such insurance will be canceled or that
coverage thereunder will be reduced or eliminated; or (ii) premium costs with
respect to such policies of insurance will be substantially increased. Except as
disclosed in SYNERGY DISCLOSURE SCHEDULE 4.10.3, there are presently no material
claims pending under such policies of insurance and no notices have been given
by Synergy or any Synergy Subsidiary under such policies. Within the last three
years Synergy and each Synergy Subsidiary has received each type of insurance
coverage for which it has applied and during such periods has not been denied
indemnification for any material claims submitted under any of its insurance
policies. SYNERGY DISCLOSURE SCHEDULE 4.10.3 identifies all material policies of
insurance maintained by Synergy and each Synergy Subsidiary (other than those
providing for employee or director welfare or similar benefits) as well as the
other matters required to be disclosed under this Section.
4.11. Legal Proceedings.
Except as set forth in SYNERGY DISCLOSURE SCHEDULE 4.11, as of the date
of this Agreement, neither Synergy nor any Synergy Subsidiary is a party to any,
and there are no pending or, to Synergy's Knowledge, threatened legal,
administrative, arbitration or other proceedings, claims (whether asserted or
unasserted), actions or governmental investigations or inquiries of any nature
(i) against Synergy or any Synergy Subsidiary, (ii) to which Synergy or any
Synergy Subsidiary's assets are or may be subject, (iii) challenging the
validity or propriety of any of the transactions contemplated by this
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Agreement, or (iv) which could adversely affect the ability of Synergy to
perform its obligations under this Agreement.
4.12. Compliance With Applicable Law.
4.12.1. Each of Synergy and each Synergy Subsidiary is in
compliance in all material respects with all applicable federal, state, local
and foreign statutes, laws, regulations, ordinances, rules, judgments, orders or
decrees applicable to it, its properties, assets and deposits, its business, and
its conduct of business and its relationship with its employees, including,
without limitation, the Xxxxxxxx-Xxxxx Act of 2002, the Uniting and
Strengthening America by Providing Appropriate Tools Required to Intercept and
Obstruct Terrorism Act of 2001 (the "USA Patriot Act"), the Bank Secrecy Act,
the Equal Credit Opportunity Act, the Fair Housing Act, the Community
Reinvestment Act of 1977, the Home Mortgage Disclosure Act, and all other
applicable fair lending laws and other laws relating to discriminatory business
practices and neither Synergy nor any Synergy Subsidiary has received any
written notice to the contrary that is currently outstanding.
4.12.2. Each of Synergy and each Synergy Subsidiary has all
permits, licenses, authorizations, orders and approvals of, and has made all
filings, applications and registrations with, all Governmental Entities and Bank
Regulators that are required in order to permit it to own or lease its
properties and to conduct its business as presently conducted; all such permits,
licenses, certificates of authority, orders and approvals are in full force and
effect and, to the Knowledge of Synergy, no suspension or cancellation of any
such permit, license, certificate, order or approval is threatened or will
result from the consummation of the transactions contemplated by this Agreement,
subject to obtaining Regulatory Approvals.
4.12.3. For the period beginning December 31, 2004, neither
Synergy nor any Synergy Subsidiary has received any written notification or to
Synergy's Knowledge any other communication from any Bank Regulator (i)
asserting that Synergy or any Synergy Subsidiary is not in material compliance
with any of the statutes, regulations or ordinances which such Bank Regulator
enforces; (ii) threatening to revoke any license, franchise, permit or
governmental authorization which is material to Synergy or any Synergy
Subsidiary; or (iii) requiring or threatening to require Synergy or any Synergy
Subsidiary, or indicating that Synergy or any Synergy Subsidiary may be
required, to enter into a cease and desist order, consent order, agreement or
memorandum of understanding or any other agreement or undertaking (formal or
informal), restricting or limiting, or purporting to direct, restrict or limit,
in any manner (other than generally applicable regulatory restrictions) the
operations of Synergy or any Synergy Subsidiary, including without limitation
any restriction on the payment of dividends (any such notice, communication,
memorandum, agreement or order described in this sentence is hereinafter
referred to as a "Synergy Regulatory Agreement"). Neither Synergy nor any
Synergy Subsidiary has consented to or entered into any Synergy Regulatory
Agreement that is currently in effect or that was in effect since December 31,
2001. The most recent regulatory rating given to Synergy Bank as to compliance
with the Community Reinvestment Act ("CRA") is satisfactory or better. Synergy
Bank is not aware of any pending or threatened CRA protest relating to its
lending practices.
4.13. Employee Benefit Plans.
4.13.1. SYNERGY DISCLOSURE SCHEDULE 4.13.1 includes a
descriptive list of all existing bonus, incentive, deferred compensation,
pension, retirement, profit-sharing, thrift, savings, employee stock ownership,
stock bonus, stock purchase, restricted stock, stock option, stock appreciation,
phantom stock, severance, welfare benefit plans, fringe benefit plans,
employment, severance and change in control agreements and all other material
benefit practices, policies and arrangements maintained by Synergy or any
Synergy Subsidiary in which any employee or former employee, consultant or
former
20
consultant or director or former director of Synergy or any Synergy Subsidiary
participates or to which any such employee, consultant or director is a party or
is otherwise entitled to receive benefits (the "Synergy Compensation and Benefit
Plans"). Neither Synergy nor any of its Subsidiaries has any commitment to
create any additional Synergy Compensation and Benefit Plan or to materially
modify, change or renew any existing Synergy Compensation and Benefit Plan (any
modification or change that increases the cost of such plans would be deemed
material), except as required to maintain the qualified status thereof or to
preserve favorable financial accounting treatment. Synergy has provided to NYB
true and correct copies of the Synergy Compensation and Benefit Plans.
4.13.2. To the Knowledge of Synergy, each Synergy Compensation
and Benefit Plan has been operated and administered in all material respects in
accordance with its terms and with applicable law, including, but not limited
to, ERISA, the Code, the Securities Act, the Exchange Act, the Age
Discrimination in Employment Act, COBRA, the Health Insurance Portability and
Accountability Act and any regulations or rules promulgated thereunder, and all
material filings, disclosures and notices required by ERISA, the Code, the
Securities Act, the Exchange Act, the Age Discrimination in Employment Act and
any other applicable law have been timely made or any interest, fines, penalties
or other impositions for late filings have been paid in full. Each Synergy
Compensation and Benefit Plan which is an "employee pension benefit plan" within
the meaning of Section 3(2) of ERISA (a "Pension Plan") and which is intended to
be qualified under Section 401(a) of the Code has received a favorable
determination letter from the IRS, or is established pursuant to a prototype
plan that relies upon a favorable IRS opinion letter and Synergy is not aware of
any circumstances which are reasonably likely to result in revocation of any
such favorable determination letter. There is no material pending or, to the
Knowledge of Synergy, threatened action, suit or claim relating to any of the
Synergy Compensation and Benefit Plans (other than routine claims for benefits).
To the Knowledge of Synergy, neither Synergy nor any Synergy Subsidiary has
engaged in a transaction, or omitted to take any action, with respect to any
Synergy Compensation and Benefit Plan that would reasonably be expected to
subject Synergy or any Synergy Subsidiary to an unpaid tax or penalty imposed by
either Section 4975 of the Code or Section 502 of ERISA.
4.13.3. Neither Synergy nor any of its Subsidiaries is
currently, or has during the past five (5) years been, a sponsor or party to a
Defined Benefit Plan. Neither Synergy, its Subsidiaries, nor any ERISA Affiliate
has contributed to any "multiemployer plan," as defined in Section 3(37) of
ERISA, on or after January 1, 1998. To the Knowledge of Synergy, there is no
pending investigation or enforcement action by any Bank Regulator with respect
to any Synergy Compensation and Benefit Plan or any ERISA Affiliate Plan.
4.13.4. All material contributions required to be made under
the terms of any Synergy Compensation and Benefit Plan or any employee benefit
arrangements to which Synergy or any Synergy Subsidiary is a party or a sponsor
have been timely made, and all anticipated contributions and funding obligations
are accrued on the Synergy Financial Statements to the extent required by GAAP.
Synergy and its Subsidiaries have expensed and accrued as a liability future
benefits (inclusive of amortization of past service costs and liabilities) under
each applicable Synergy Compensation and Benefit Plan for financial reporting
purposes to the extent required by GAAP.
4.13.5. Except as set forth in SYNERGY DISCLOSURE SCHEDULE
4.13.5, neither Synergy nor any Synergy Subsidiary has any obligations to
provide retiree health, life insurance, disability insurance, or other retiree
death benefits under any Synergy Compensation and Benefit Plan, other than
benefits mandated by Section 4980B of the Code. Except as set forth in SYNERGY
DISCLOSURE SCHEDULE 4.13.5, there has been no communication to employees by
Synergy or any Synergy Subsidiary that would reasonably be expected to promise
or guarantee such employees retiree health, life insurance, disability
insurance, or other retiree death benefits.
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4.13.6. Synergy and its Subsidiaries do not maintain any
Synergy Compensation and Benefit Plans covering employees who are nonresident
aliens.
4.13.7. With respect to each Synergy Compensation and Benefit
Plan, if applicable, Synergy has provided to NYB copies of the: (A) trust
instruments and insurance contracts; (B) two most recent Forms 5500 filed with
the IRS; (C) most recent actuarial report and financial statement; (D) most
recent summary plan description; (E) most recent determination letter or opinion
letter issued by the IRS; (F) any Form 5310 or Form 5330 filed with the IRS
within the last two years; and (G) most recent nondiscrimination tests performed
under ERISA and the Code (including 401(k) and 401(m) tests).
4.13.8. Except as disclosed on SYNERGY DISCLOSURE SCHEDULE
4.13.8, neither Synergy nor any Synergy Subsidiary maintains any compensation
plans, programs or arrangements under which any payment is reasonably likely to
become non-deductible, in whole or in part, for tax reporting purposes as a
result of the limitations under Section 162(m) of the Code and the regulations
issued thereunder.
4.13.9. Except as disclosed in SYNERGY DISCLOSURE SCHEDULE
4.13.9, there are no stock appreciation or similar rights, earned dividends or
dividend equivalents, or shares of restricted stock, outstanding under any of
the Synergy Compensation and Benefit Plans or otherwise as of the date hereof
and none will be granted, awarded, or credited after the date hereof.
4.13.10. SYNERGY DISCLOSURE SCHEDULE 4.13.10 sets forth, as of
the payroll date immediately preceding the date of this Agreement, a list of the
full names of all employees of Synergy, their title and rate of salary, and
their date of hire. SYNERGY DISCLOSURE SCHEDULE 4.13.10 also sets forth any
changes to any Synergy Compensation and Benefit Plan since December 31, 2006.
4.14. Brokers, Finders and Financial Advisors.
Neither Synergy nor any Synergy Subsidiary, nor any of their respective
officers, directors, employees or agents, has employed any broker, finder or
financial advisor in connection with the transactions contemplated by this
Agreement, or incurred any liability or commitment for any fees or commissions
to any such person in connection with the transactions contemplated by this
Agreement except for the retention of Sandler X'Xxxxx & Partners, L.P. by
Synergy and the fee payable pursuant thereto. A true and correct copy of the
engagement agreement with Sandler X'Xxxxx & Partners, L.P., setting forth the
fee payable to Sandler X'Xxxxx & Partners, L.P. for its services rendered to
Synergy in connection with the Merger and transactions contemplated by this
Agreement, is attached to SYNERGY DISCLOSURE SCHEDULE 4.14.
4.15. Environmental Matters.
4.15.1. With respect to Synergy and each Synergy Subsidiary:
(A) To the Knowledge of Synergy, each of Synergy and the
Synergy Subsidiaries, the Participation Facilities, and, to Synergy's Knowledge,
the Loan Properties are, and have been, in substantial compliance with, and are
not liable under, any Environmental Laws;
(B) Synergy has received no written notice that there is any
suit, claim, action, demand, executive or administrative order, directive,
investigation or proceeding pending and, to Synergy's Knowledge, no such action
is threatened, before any court, governmental agency or other forum against it
or any of the Synergy Subsidiaries or any Participation Facility (x) for alleged
22
noncompliance (including by any predecessor) with, or liability under, any
Environmental Law or (y) relating to the presence of or release into the
environment of any Materials of Environmental Concern , whether or not occurring
at or on a site owned, leased or operated by it or any of the Synergy
Subsidiaries or any Participation Facility;
(C) Synergy has received no written notice that there is
any suit, claim, action, demand, executive or administrative order, directive,
investigation or proceeding pending and, to Synergy's Knowledge, no such action
is threatened, before any court, governmental agency or other forum relating to
or against any Loan Property (or Synergy or any of the Synergy Subsidiaries in
respect of such Loan Property) (x) relating to alleged noncompliance (including
by any predecessor) with, or liability under, any Environmental Law or (y)
relating to the presence of or release into the environment of any Materials of
Environmental Concern, whether or not occurring at or on a site owned, leased or
operated by a Loan Property;
(D) To Synergy's Knowledge, the properties currently owned or
operated by Synergy or any Synergy Subsidiary (including, without limitation,
soil, groundwater or surface water on, or under the properties, and buildings
thereon) are not contaminated with and do not otherwise contain any Materials of
Environmental Concern other than as permitted under applicable Environmental
Law;
(E) Neither Synergy nor any Synergy Subsidiary during the past
five years has received any written notice, demand letter, executive or
administrative order, directive or request for information from any federal,
state, local or foreign governmental entity or any third party indicating that
it may be in violation of, or liable under, any Environmental Law;
(F) To Synergy's Knowledge, there are no underground storage
tanks on, in or under any properties owned or operated by Synergy or any of the
Synergy Subsidiaries or any Participation Facility, and to Synergy's Knowledge,
no underground storage tanks have been closed or removed from any properties
owned or operated by Synergy or any of the Synergy Subsidiaries or any
Participation Facility; and
(G) To Synergy's Knowledge, during the period of (x) Synergy's
or any of the Synergy Subsidiaries' ownership or operation of any of their
respective current properties or (y) Synergy's or any of the Synergy
Subsidiaries' participation in the management of any Participation Facility,
there has been no contamination by or release of Materials of Environmental
Concerns in, on, under or affecting such properties that could reasonably be
expected to result in material liability to Synergy or a Synergy Subsidiary
under the Environmental Laws. To Synergy's Knowledge, prior to the period of (x)
Synergy's or any of the Synergy Subsidiaries' ownership or operation of any of
their respective current properties or (y) Synergy's or any of the Synergy
Subsidiaries' participation in the management of any Participation Facility,
there was no contamination by or release of Materials of Environmental Concern
in, on, under or affecting such properties that could reasonably be expected to
result in material liability to Synergy or a Synergy Subsidiary under the
Environmental Laws.
4.15.2. "Loan Property" means any property in which the
applicable party (or a Subsidiary of it) holds a security interest, and, where
required by the context, includes the owner or operator of such property, but
only with respect to such property. "Participation Facility" means any facility
in which the applicable party (or a Subsidiary of it) participates in the
management (including all property held as trustee or in any other fiduciary
capacity) and, where required by the context, includes the owner or operator of
such property, but only with respect to such property.
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4.16. Loan Portfolio.
4.16.1. The allowance for loan losses reflected in Synergy's
audited consolidated statement of financial condition at December 31, 2006 was,
and the allowance for loan losses shown on the balance sheets in Synergy's
Securities Documents for periods ending after December 31, 2006 will be,
adequate, as of the respective dates thereof, under GAAP.
4.16.2. SYNERGY DISCLOSURE SCHEDULE 4.16.2 sets forth a
listing, as of the most recently available date, by account, of: (A) all loans
(including loan participations) of Synergy Bank or any other Synergy Subsidiary
that have been accelerated during the past twelve months and that are
contractually past due 90 days or more in the payment of principal and/or
interest; (B) all loan commitments or lines of credit of Synergy Bank or any
other Synergy Subsidiary that are contractually past due 90 days or more in the
payment of principal and/or interest and which have been terminated by Synergy
Bank or any other Synergy Subsidiary during the past twelve months by reason of
a default or adverse developments in the condition of the borrower or other
events or circumstances affecting the credit of the borrower; (C) all loans,
lines of credit and loan commitments as to which Synergy Bank or any other
Synergy Subsidiary has given written notice of its intent to terminate during
the past twelve months and that are contractually past due 90 days or more in
the payment of principal and/or interest; (D)with respect to all commercial
loans that are contractually past due 90 days or more in the payment of
principal and/or interest (including commercial real estate loans), any demand
letters from Synergy Bank or any other Synergy Subsidiary to any such borrowers
during the past twelve months; (E) each borrower, customer or other party which
has notified Synergy Bank or any other Synergy Subsidiary during the past twelve
months of, or has asserted against Synergy Bank or any other Synergy Subsidiary,
in each case in writing, any "lender liability" or similar claim, and, to the
knowledge of Synergy Bank, each borrower, customer or other party which has
given Synergy Bank or any other Synergy Subsidiary any oral notification of, or
orally asserted to or against Synergy Bank or any other Synergy Subsidiary, any
such claim; (F) all loans, (1) that are contractually past due 90 days or more
in the payment of principal and/or interest, (2) that are on non-accrual status,
(3) that as of the date of this Agreement are classified as "Other Loans
Specially Mentioned", "Special Mention", "Substandard", "Doubtful", "Loss",
"Classified", "Criticized", "Watch list" or words of similar import, together
with the principal amount of and accrued and unpaid interest on each such Loan
and the identity of the obligor thereunder, (4) where a reasonable doubt exists
as to the timely future collectability of principal and/or interest, whether or
not interest is still accruing or the loans are less than 90 days past due, (5)
where, during the past three years, 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, or (6) where a specific
reserve allocation exists in connection therewith, and (G) all assets classified
by Synergy Bank or any Synergy Bank Subsidiary as real estate acquired through
foreclosure or in lieu of foreclosure, including in-substance foreclosures, and
all other assets currently held that were acquired through foreclosure or in
lieu of foreclosure.
4.16.3. All loans receivable (including discounts) and accrued
interest entered on the books of Synergy and the Synergy Subsidiaries arose out
of bona fide arm's-length transactions, were made for good and valuable
consideration in the ordinary course of Synergy's or the appropriate Synergy
Subsidiary's respective business, and the notes or other evidences of
indebtedness with respect to such loans (including discounts) are true and
genuine and are what they purport to be. To the Knowledge of Synergy, the loans,
discounts and the accrued interest reflected on the books of Synergy and the
Synergy Subsidiaries are subject to no defenses, set-offs or counterclaims
(including, without limitation, those afforded by usury or truth-in-lending
laws), except as may be provided by bankruptcy, insolvency or similar laws
affecting creditors' rights generally or by general principles of equity. Except
as set forth in SYNERGY DISCLOSURE SCHEDULE 4.16.3, all such loans are owned by
Synergy or the appropriate Synergy Subsidiary free and clear of any liens.
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4.16.4. The notes and other evidences of indebtedness
evidencing the loans described above, and all pledges, mortgages, deeds of trust
and other collateral documents or security instruments relating thereto are, in
all material respects, valid, true and genuine, and what they purport to be.
4.17. Securities Documents.
Synergy has made available to NYB copies of its (i) annual reports on
Form 10-K for the years ended December 31, 2006, 2005 and 2004, (ii) quarterly
reports on Form 10-Q for the quarters ended subsequent to December 31, 2006, and
(iii) proxy materials used or for use in connection with its meetings of
stockholders held in 2007, 2006 and 2005. Such reports, prospectus and proxy
materials complied, at the time filed with the SEC (or as amended), in all
material respects, with the Securities Laws.
4.18. Related Party Transactions.
Except as described in Synergy's proxy statement distributed in
connection with the annual meeting of stockholders held on April 24, 2007 (which
has previously been provided to NYB), neither Synergy nor any Synergy Subsidiary
is a party to any transaction (including any loan or other credit accommodation)
with any Affiliate of Synergy. All such transactions (a) were made in the
ordinary course of business, (b) were made on substantially the same terms,
including interest rates and collateral, as those prevailing at the time for
comparable transactions with other Persons, and (c) did not involve more than
the normal risk of collectability or present other unfavorable features. No loan
or credit accommodation to any Affiliate of Synergy or any Synergy Subsidiary is
presently in default or, during the three year period prior to the date of this
Agreement, has been in default or has been restructured, modified or extended.
Neither Synergy nor any Synergy Subsidiary has been notified that principal and
interest with respect to any such loan or other credit accommodation will not be
paid when due or that the loan grade classification accorded such loan or credit
accommodation by Synergy is inappropriate.
4.19. Deposits.
Except as set forth in SYNERGY DISCLOSURE SCHEDULE 4.19, none of the
deposits of Synergy or any Synergy Subsidiary is a "brokered deposit" as defined
in 12 CFR Section 337.6(a)(2).
4.20. Antitakeover Provisions Inapplicable; Required Vote.
4.20.1 The Board of Directors of Synergy has, to the extent
such statute is applicable, taken all action (including appropriate approvals of
the Board of Directors of Synergy) necessary to exempt NYB, the Merger, the Bank
Merger, the Merger Agreement, the Plan of Bank Merger and the transactions
contemplated hereby from any "moratorium", "control share", "fair price",
"super-majority", "business combination" or other state anti-takeover laws and
regulations, including but not limited to Section 14A:10A-1 et seq. of the NJBCA
(collectively, the "Takeover Laws").
4.20.2. The affirmative vote of a majority of the issued and
outstanding shares of Synergy Common Stock is required to approve this Agreement
and the Merger under Synergy's certificate of incorporation and the NJBCA.
4.21. Registration Obligations.
Neither Synergy nor any Synergy Subsidiary is under any obligation,
contingent or otherwise, which will survive the Effective Time by reason of any
agreement to register any transaction involving any of its securities under the
Securities Act.
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4.22. Risk Management Instruments.
All material interest rate swaps, caps, floors, option agreements,
futures and forward contracts and other similar risk management arrangements,
whether entered into for Synergy's own account, or for the account of one or
more of Synergy's Subsidiaries or their customers (all of which are set forth in
SYNERGY DISCLOSURE SCHEDULE 4.22), were in all material respects entered into in
compliance with all applicable laws, rules, regulations and regulatory policies,
and to the Knowledge of Synergy, with counterparties believed to be financially
responsible at the time; and to Synergy's Knowledge each of them constitutes the
valid and legally binding obligation of Synergy or one of its Subsidiaries,
enforceable in accordance with its terms (except as enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium,
fraudulent transfer and similar laws of general applicability relating to or
affecting creditors' rights or by general equity principles), and is in full
force and effect. Neither Synergy nor any Synergy Subsidiary, nor to the
Knowledge of Synergy any other party thereto, is in breach of any of its
obligations under any such agreement or arrangement in any material respect.
4.23. Fairness Opinion.
Synergy has received a written opinion from Sandler X'Xxxxx & Partners,
L.P. to the effect that, subject to the terms, conditions and qualifications set
forth therein, as of the date hereof, the Merger Consideration to be received by
the stockholders of Synergy pursuant to this Agreement is fair to such
stockholders from a financial point of view. Such opinion has not been amended
or rescinded as of the date of this Agreement. NYB shall be promptly advised of
any change, amendment or rescission of such opinion.
4.24. Trust Accounts.
Synergy Bank and each of its subsidiaries has properly administered all
accounts for which it acts as a fiduciary, including but not limited to accounts
for which it serves as trustee, agent, custodian, personal representative,
guardian, conservator or investment advisor, in accordance with the terms of the
governing documents and applicable laws and regulations. Neither Synergy Bank
nor any other Synergy Subsidiary, and to the Knowledge of Synergy, nor has any
of their respective directors, officers or employees, committed any breach of
trust with respect to any such fiduciary account and the records for each such
fiduciary account.
4.25. Intellectual Property.
Synergy and each Synergy Subsidiary owns or, to Synergy's Knowledge,
possesses valid and binding licenses and other rights (subject to expirations in
accordance with their terms) to use all patents, copyrights, trade secrets,
trade names, servicemarks and trademarks used in their business, each without
Payment other than renewal or similar fees (which fees, if any, are currently
paid as of the date hereof), and neither Synergy nor any Synergy Subsidiary has
received any notice of conflict with respect thereto that asserts the rights of
others. Synergy and each Synergy Subsidiary have performed all the obligations
required to be performed, and are not in default in any respect, under any
contract, agreement, arrangement or commitment relating to any of the foregoing.
To the Knowledge of Synergy, the conduct of the business of Synergy and each
Synergy Subsidiary as currently conducted or proposed to be conducted does not,
in any respect, infringe upon, dilute, misappropriate or otherwise violate any
intellectual property owned or controlled by any third party.
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4.26. Labor Matters.
There are no labor or collective bargaining agreements to which Synergy
or any Synergy Subsidiary is a party. To the Knowledge of Synergy, there is no
union organizing effort pending or threatened against Synergy or any Synergy
Subsidiary. There is no labor strike, labor dispute (other than routine employee
grievances that are not related to union employees), work slowdown, stoppage or
lockout pending or, to the Knowledge of Synergy, threatened against Synergy or
any Synergy Subsidiary. There is no unfair labor practice or labor arbitration
proceeding pending or, to the Knowledge of Synergy, threatened against Synergy
or any Synergy Subsidiary (other than routine employee grievances that are not
related to union employees). Synergy and each Synergy Subsidiary is in
compliance in all material respects with all applicable laws respecting
employment and employment practices, terms and conditions of employment and
wages and hours, and are not engaged in any unfair labor practice.
4.27. Internal Controls.
None of Synergy or Synergy Subsidiaries' records, systems, controls,
data or information are recorded, stored, maintained, operated or otherwise
wholly or partly dependent on or held by any means (including any electronic,
mechanical or photographic process, whether computerized or not) which
(including all means of access thereto and therefrom) are not under the
exclusive ownership and direct control of it or its subsidiaries or accountants
except as would not reasonably by expected to have a materially adverse effect
on the system of internal accounting controls described in the next sentence.
Synergy and Synergy Subsidiaries have devised and maintain a system of internal
accounting controls sufficient to provide reasonable assurances regarding the
reliability of financial reporting and the preparation of financial statements
for external purposes in accordance with GAAP.
4.28. Synergy Information Supplied.
The information furnished by Synergy relating to Synergy and any
Synergy Subsidiary to be contained in the Merger Registration Statement, or in
any other document filed with any Bank Regulator or other Governmental Entity in
connection herewith, will not contain any untrue statement of a material fact or
omit to state a material fact necessary to make the statements therein, in light
of the circumstances in which they are made, not misleading.
4.29. No Dissenters Rights.
Section 14A:11-1 of the NJBCA does not apply to this Agreement and to
the transactions contemplated hereby.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF NYB
NYB represents and warrants to Synergy that the statements contained in
this Article V are correct and complete as of the date of this Agreement,
subject to the standard set forth in Section 5.1, and except as set forth in the
NYB DISCLOSURE SCHEDULE delivered by NYB to Synergy on the date hereof, and
except as to any representation or warranty which specifically relates to an
earlier date, which only need be so correct as of such earlier date. NYB has
made a good faith effort to ensure that the disclosure on each schedule of the
NYB DISCLOSURE SCHEDULE corresponds to the section referenced herein. However,
for purposes of the NYB DISCLOSURE SCHEDULE, any item disclosed on any schedule
therein is deemed to be fully disclosed with respect to all schedules under
which such item may be relevant as and to the extent that it is reasonably clear
on the face of such schedule that such item applies to such other schedule.
References to the Knowledge of NYB shall include the Knowledge of NYB's
Subsidiaries.
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5.1. Standard.
No representation or warranty of NYB contained in this Article V shall
be deemed untrue or incorrect, and NYB shall not be deemed to have breached a
representation or warranty, as a consequence of the existence of any fact,
circumstance or event unless such fact, circumstance or event, individually or
taken together with all other facts, circumstances or events inconsistent with
any paragraph of Article V, has had or is reasonably expected to have a Material
Adverse Effect, disregarding for these purposes (x) any qualification or
exception for, or reference to, materiality in any such representation or
warranty and (y) any use of the terms "material", "materially", "in all material
respects", "Material Adverse Effect" or similar terms or phrases in any such
representation or warranty. The foregoing standard shall not apply to
representations and warranties contained in Sections 5.2, 5.3 (other than the
last sentence of Section 5.2.1, 5.4, 5.5 and 5.8 which shall be deemed untrue,
incorrect and breached if they are not true and correct in all material respects
based on the qualifications and standards therein contained.
5.2. Organization.
5.2.1. NYB is a corporation duly organized, validly existing
and in good standing under the laws of the State of Delaware, and is duly
registered as a bank holding company under the BHCA. NYB has full corporate
power and authority to carry on its business as now conducted and is duly
licensed or qualified to do business in the states of the United States and
foreign jurisdictions where its ownership or leasing of property or the conduct
of its business requires such qualification.
5.2.2. New York Community Bank is savings bank duly organized,
validly existing and in good standing under the laws of the State of New York.
The deposits of New York Community Bank are insured by the FDIC to the fullest
extent permitted by law, and all premiums and assessments required to be paid in
connection therewith have been paid by New York Community Bank when due. New
York Community Bank is a member in good standing of the FHLB and owns the
requisite amount of stock therein.
5.2.3. NYB DISCLOSURE SCHEDULE 5.2.3 sets forth each direct
and indirect NYB Subsidiary. Each NYB Subsidiary is a corporation or limited
liability company duly organized, validly existing and in good standing under
the laws of its jurisdiction of incorporation or organization and is duly
qualified to do business in each jurisdiction where the property owned, leased
or operated, or the business conducted, by such NYB Subsidiary requires such
qualification. Each NYB Subsidiary has the requisite corporate power and
authority to own or lease its properties and assets and to carry on its business
as it is now being conducted.
5.2.3. Prior to the date of this Agreement, NYB has made
available to Synergy true and correct copies of the certificate of incorporation
or charter and bylaws of NYB and New York Community Bank.
5.3. Capitalization.
5.3.1. As of the date hereof, the authorized capital stock of
NYB consists of 600,000,000 shares of common stock, $0.01 par value, of which as
of the date hereof, 313,436,959 shares are outstanding, validly issued, fully
paid and nonassessable and free of preemptive rights, and 5,000,000 shares of
preferred stock, $0.01 par value ("NYB Preferred Stock"), of which as of the
date hereof, no shares are outstanding. As of the date hereof, there are no
shares of NYB Common Stock held by NYB as treasury stock. As of the date hereof,
neither NYB nor any NYB Subsidiary has or is bound by any Rights of any
character relating to the purchase, sale or issuance or voting of, or right to
receive dividends
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or other distributions on any shares of NYB Common Stock, or any other security
of NYB or any securities representing the right to vote, purchase or otherwise
receive any shares of NYB Common Stock or any other security of NYB, other than
shares issuable under the NYB Stock Benefit Plans and shares issuable under
common stock warrants issued as part of NYB's BONUSES Units.
5.4. Authority; No Violation.
5.4.1. NYB has full corporate power and authority to execute
and deliver this Agreement and, subject to receipt of the Regulatory Approvals,
to consummate the transactions contemplated hereby. The execution and delivery
of this Agreement by NYB and the completion by NYB of the transactions
contemplated hereby, including the Merger, have been duly and validly approved
by the Board of Directors of NYB, and no other corporate proceedings on the part
of NYB are necessary to complete the transactions contemplated hereby, including
the Merger. This Agreement has been duly and validly executed and delivered by
NYB, and subject to approval by the stockholders of Synergy and receipt of the
Regulatory Approvals and due and valid execution and delivery of this Agreement
by Synergy, constitutes the valid and binding obligations of NYB, enforceable
against NYB in accordance with its terms, subject to applicable bankruptcy,
insolvency and similar laws affecting creditors' rights generally, and subject,
as to enforceability, to general principles of equity.
5.4.2. Subject to receipt of the Regulatory Approvals and
Synergy's and NYB's compliance with any conditions contained therein, (A) the
execution and delivery of this Agreement by NYB, (B) the consummation of the
transactions contemplated hereby, and (C) compliance by NYB with any of the
terms or provisions hereof will not: (i) conflict with or result in a breach of
any provision of the certificate of incorporation charter or bylaws of NYB or
New York Community Bank; (ii) violate any statute, code, ordinance, rule,
regulation, judgment, order, writ, decree or injunction applicable to NYB or New
York Community Bank; or (iii) violate, conflict with, result in a breach of any
provisions of, constitute a default (or an event which, with notice or lapse of
time, or both, would constitute a default), under, result in the termination of,
accelerate the performance required by, or result in a right of termination or
acceleration or the creation of any lien, security interest, charge or other
encumbrance upon any of the properties or assets of NYB or New York Community
Bank under any of the terms, conditions or provisions of any note, bond,
mortgage, indenture, deed of trust, license, lease, agreement or other
instrument or obligation to which either of them is a party, or by which they or
any of their respective properties or assets may be bound or affected, except
for such violations, conflicts, breaches or defaults under clause (ii) or (iii)
hereof which, either individually or in the aggregate, will not have a Material
Adverse Effect on NYB.
5.5. Consents.
Except for (a) the receipt of the Regulatory Approvals and compliance
with any conditions contained therein, (b) the filing of the Certificate of
Merger with the Secretary of State of the State of Delaware, (c) the filing of
the Certificate of Merger with the Secretary of State of the State of New
Jersey, (d) the filing with and/or acceptance by the Department of articles of
merger or similar documentation with respect to the Bank Merger, (e) the filing
with the SEC of (i) the Merger Registration Statement and (ii) such reports
under Sections 13(a), 13(d), 13(g) and 16(a) of the Exchange Act as may be
required in connection with this Agreement and the transactions contemplated
hereby and the obtaining from the SEC of such orders as may be required in
connection therewith, (f) approval of the listing of NYB Common Stock to be
issued in the Merger on the Stock Exchange, (g) such filings and approvals as
are required to be made or obtained under the securities or "Blue Sky" laws of
various states in connection with the issuance of the shares of NYB Common Stock
pursuant to this Agreement, and (h) the approval of this Agreement by the
requisite vote of the stockholders of Synergy, no consents, waivers or approvals
of, or filings or registrations with, any Governmental Entity are necessary,
and, to NYB's Knowledge, no
29
consents, waivers or approvals of, or filings or registrations with, any other
third parties are necessary, in connection with (x) the execution and delivery
of this Agreement by NYB, (y) the Plan of Bank Merger by New York Community Bank
and (z) the completion of the Merger and the Bank Merger. NYB has no reason to
believe that (i) any Regulatory Approvals or other required consents or
approvals will not be received, or that (ii) any public body or authority, the
consent or approval of which is not required or to which a filing is not
required, will object to the completion of the transactions contemplated by this
Agreement.
5.6. Financial Statements/Regulatory Reports.
5.6.1. NYB has previously made available to Synergy the NYB
Regulatory Reports. The NYB Regulatory Reports have been prepared in all
material respects in accordance with applicable regulatory accounting principles
and practices throughout the periods covered by such statements.
5.6.2. NYB has previously made available to Synergy the NYB
Financial Statements. The NYB Financial Statements have been prepared in
accordance with GAAP, and (including the related notes where applicable) fairly
present in each case in all material respects (subject in the case of the
unaudited interim statements to normal year-end adjustments) the consolidated
financial position, results of operations and cash flows of NYB and the NYB
Subsidiaries on a consolidated basis as of and for the respective periods ending
on the dates thereof, in accordance with GAAP during the periods involved,
except as indicated in the notes thereto, or in the case of unaudited
statements, as permitted by Form 10-Q.
5.6.3. At the date of each balance sheet included in the NYB
Financial Statements or the NYB Regulatory Reports neither NYB nor New York
Community Bank, as applicable, had any liabilities, obligations or loss
contingencies of any nature (whether absolute, accrued, contingent or otherwise)
of a type required to be reflected in such NYB Financial Statements or in the
footnotes thereto or the NYB Regulatory Reports which are not fully reflected or
reserved against therein or fully disclosed in a footnote thereto, except for
liabilities, obligations and loss contingencies which are not material
individually or in the aggregate or which are incurred in the ordinary course of
business, consistent with past practice, subject, in the case of any unaudited
statements, to normal, recurring audit adjustments and the absence of footnotes.
5.7. Taxes.
NYB and the NYB Subsidiaries that are at least 80 percent owned by NYB
are members of the same affiliated group within the meaning of Code Section
1504(a). NYB has duly filed all federal, state and material local tax returns
required to be filed by or with respect to NYB and each NYB Subsidiary on or
prior to the Closing Date, taking into account any extensions (all such returns,
to the Knowledge of NYB, being accurate and correct in all material respects)
and has duly paid or made provisions for the payment of all material federal,
state and local taxes which have been incurred by or are due or claimed to be
due from NYB and any NYB Subsidiary by any taxing authority or pursuant to any
written tax sharing agreement on or prior to the Closing Date other than taxes
or other charges which: (i) are not delinquent; (ii) are being contested in good
faith; or (iii) have not yet been fully determined. Except as set forth in NYB
DISCLOSURE SCHEDULE 5.7, as of the date of this Agreement, NYB has received no
notice of, and there is no audit examination, deficiency assessment, tax
investigation or refund litigation with respect to any taxes of NYB or any of
its Subsidiaries, and no claim has been made by any authority in a jurisdiction
where NYB or any of its Subsidiaries do not file tax returns that NYB or any
such Subsidiary is subject to taxation in that jurisdiction. Except as set forth
in NYB DISCLOSURE SCHEDULE 5.7, NYB and its Subsidiaries have not executed an
extension or waiver of any statute of limitations on the assessment or
collection of any tax due that is currently in effect. NYB and each of its
Subsidiaries has
30
withheld and paid all taxes required to have been withheld and paid in
connection with amounts paid or owing to any employee, independent contractor,
creditor, stockholder or other third party, and NYB and each of its Subsidiaries
has timely complied with all applicable information reporting requirements under
Part III, Subchapter A of Chapter 61 of the Code and similar applicable state
and local information reporting requirements.
5.8. No Material Adverse Effect.
NYB and its subsidiaries, taken as a whole, has not suffered any
Material Adverse Effect since December 31, 2006 and no event has occurred or
circumstance arisen since that date which, in the aggregate, has had or is
reasonably likely to have a Material Adverse Effect on NYB.
5.9. Ownership of Property; Insurance Coverage.
5.9.1. NYB and each NYB Subsidiary have good and, as to real
property, marketable title to all material assets and properties owned by NYB or
each NYB Subsidiary in the conduct of their businesses, whether such assets and
properties are real or personal, tangible or intangible, including assets and
property reflected in the balance sheets contained in the NYB Regulatory Reports
and in the NYB Financial Statements or acquired subsequent thereto (except to
the extent that such assets and properties have been disposed of in the ordinary
course of business, since the date of such balance sheets), subject to no
material encumbrances, liens, mortgages, security interests or pledges, except:
(i) those items which secure liabilities for public or statutory obligations or
any discount with, borrowing from or other obligations to FHLB, inter-bank
credit facilities, or any transaction by a NYB Subsidiary acting in a fiduciary
capacity; (ii) those reflected in the notes to the NYB Financial Statements; and
(iii) statutory liens for amounts not yet delinquent or which are being
contested in good faith. NYB and the NYB Subsidiaries, as lessee, have the right
under valid and subsisting leases of real and personal properties used by NYB
and its Subsidiaries in the conduct of their businesses to occupy or use all
such properties as presently occupied and used by each of them.
5.9.2. NYB and each NYB Subsidiary currently maintain
insurance considered by NYB to be reasonable for their respective operations.
5.10. Legal Proceedings.
Except as disclosed in NYB DISCLOSURE SCHEDULE 5.10 as of the date of
this Agreement, neither NYB nor New York Community Bank is a party to any, and
there are no pending or, to the Knowledge of NYB, threatened legal,
administrative, arbitration or other proceedings, claims (whether asserted or
unasserted), actions or governmental investigations or inquiries of any nature
(i) against NYB or New York Community Bank involving a claim in excess of
$500,000 or requesting equitable relief, (ii) to which NYB or New York Community
Bank assets are or may be subject, (iii) challenging the validity or propriety
of any of the transactions contemplated by this Agreement, or (iv) which would
reasonably be expected to adversely affect the ability of NYB to perform its
obligations under this Agreement.
5.11. Compliance With Applicable Law.
5.11.1. Except as disclosed in NYB DISCLOSURE SCHEDULE 5.11.1,
each of NYB and each NYB Subsidiary is in compliance in all material respects
with all applicable federal, state, local and foreign statutes, laws,
regulations, ordinances, rules, judgments, orders or decrees applicable to it,
its properties, assets and deposits, its business, and its conduct of business
and its relationship with its employees, including, without limitation, the
Xxxxxxxx-Xxxxx Act of 2002, the USA Patriot Act, the Bank
31
Secrecy Act, the Equal Credit Opportunity Act, the Fair Housing Act, the
Community Reinvestment Act of 1977, the Home Mortgage Disclosure Act, and all
other applicable fair lending laws and other laws relating to discriminatory
business practices, and neither NYB nor any NYB Subsidiary has received any
written notice of any material violation that is currently outstanding.
5.11.2. Each of NYB and each NYB Subsidiary has all permits,
licenses, authorizations, orders and approvals of, and has made all filings,
applications and registrations with, all Government Entities and Bank Regulators
that are required in order to permit it to own or lease its properties and to
conduct its business as presently conducted; all such permits, licenses,
certificates of authority, orders and approvals are in full force and effect
and, to the Knowledge of NYB, no suspension or cancellation of any such permit,
license, certificate, order or approval is threatened or will result from the
consummation of the transactions contemplated by this Agreement, subject to
obtaining the Regulatory Approvals.
5.11.3. Except as disclosed in NYB DISCLOSURE SCHEDULE 5.11.3,
for the period beginning December 31, 2004, neither NYB nor any NYB Subsidiary
has received any written notification or, to the Knowledge of NYB, any other
communication from any Bank Regulator (i) asserting that NYB or any NYB
Subsidiary is not in material compliance with any of the statutes, regulations
or ordinances which such Bank Regulator enforces; (ii) threatening to revoke any
license, franchise, permit or governmental authorization which is material to
NYB or any NYB Subsidiary; (iii) requiring or threatening to require NYB or any
NYB Subsidiary, or indicating that NYB or any NYB Subsidiary may be required, to
enter into a cease and desist order, consent order, agreement or memorandum of
understanding or any other agreement or undertaking (formal or informal)
restricting or limiting, or purporting to restrict or limit, in any material
respect the operations of NYB or any NYB Subsidiary, including without
limitation any restriction on the payment of dividends (any such notice,
communication, memorandum, agreement or order described in this sentence is
hereinafter referred to as an "NYB Regulatory Agreement"). Neither NYB nor any
NYB Subsidiary has consented to or entered into any currently effective NYB
Regulatory Agreement. The most recent regulatory rating given to New York
Community Bank as to compliance with the CRA is satisfactory or better. Neither
NYB nor New York Community Bank is aware of any pending or, to the Knowledge of
NYB, threatened CRA protest relating to the lending practices of New York
Community Bank that could result in any denial of any Regulatory Approval.
5.11.4. NYB and each NYB Subsidiary is in compliance in all
material respects with all applicable laws respecting employment and employment
practices, terms and conditions of employment and wages and hours, and are not
engaged in any unfair labor practice.
5.12. Environmental Matters.
5.12.1. Except as disclosed in NYB DISCLOSURE SCHEDULE 5.12.1,
to the Knowledge of NYB, neither the conduct nor operation of their business nor
any condition of any property currently or previously owned or operated by any
of them (including, without limitation, in a fiduciary or agency capacity), or
on which any of them holds a lien, results or resulted in a violation of any
Environmental Laws that is reasonably likely to impose a material liability
(including a material remediation obligation) upon NYB or any of NYB Subsidiary.
To the Knowledge of NYB, no condition has existed or event has occurred with
respect to any of them or any such property that, with notice or the passage of
time, or both, is reasonably likely to result in any material liability to NYB
or any NYB Subsidiary by reason of any Environmental Laws. Neither NYB nor any
NYB Subsidiary during the past five years has received any written notice from
any Person that NYB or any NYB Subsidiary or the operation or condition of any
property ever owned, operated, or held as collateral or in a fiduciary capacity
by any of them are currently in violation of or otherwise are alleged to have
financial exposure under any Environmental Laws or relating to Materials of
Environmental Concern (including, but not
32
limited to, responsibility (or potential responsibility) for the cleanup or
other remediation of any Materials of Environmental Concern at, on, beneath, or
originating from any such property) for which a material liability is reasonably
likely to be imposed upon NYB or any NYB Subsidiary.
5.12.2. There is no suit, claim, action, demand, executive or
administrative order, directive, investigation or proceeding pending or, to the
NYB's Knowledge, threatened, before any court, governmental agency or other
forum against NYB or any NYB Subsidiary (x) for alleged noncompliance (including
by any predecessor) with, or liability under, any Environmental Law or (y)
relating to the presence of or release into the environment of any Materials of
Environmental Concern, whether or not occurring at or on a site owned, leased or
operated by any of NYB or any NYB Subsidiary.
5.13. Securities Documents.
NYB has made available to Synergy copies of its: (i) annual reports on
Form 10-K for the years ended December 31, 2006, 2005 and 2004; and (ii) proxy
materials used or for use in connection with its meetings of stockholders held
in 2006, 2005 and 2004. Such reports and such proxy materials complied, at the
time filed with the SEC, in all material respects, with the Securities Laws.
5.14. Brokers, Finders and Financial Advisors.
Neither NYB nor any NYB Subsidiary, nor any of their respective
officers, directors, employees or agents, has employed any broker, finder or
financial advisor in connection with the transactions contemplated by this
Agreement, or incurred any liability or commitment for any fees or commissions
to any such person in connection with the transactions contemplated by this
Agreement except for the retention of Bear, Xxxxxxx & Co., Inc. by NYB and the
fee payable pursuant thereto.
5.15. NYB Common Stock.
The shares of NYB Common Stock to be issued pursuant to this Agreement,
when issued in accordance with the terms of this Agreement, will be duly
authorized, validly issued, fully paid and non-assessable and subject to no
preemptive rights.
5.16. Material Contracts.
Neither NYB nor any NYB Subsidiary is a party to or subject to: (i) any
collective bargaining agreement with any labor union relating to employees of
NYB or any NYB Subsidiary, or (ii) any agreement which by its terms limits the
payment of dividends by NYB or any NYB Subsidiary (except this Section 5.16
shall not apply to any real estate investment trust associated with NYB or any
NYB Subsidiary).
5.17. NYB Information Supplied.
The information relating to NYB and any NYB Subsidiary to be contained
in the Merger Registration Statement, or in any of the documents filed with any
Bank Regulator or other Governmental Entity in connection herewith, will not
contain any untrue statement of a material fact or omit to state a material fact
necessary to make the statements therein, in light of the circumstances in which
they are made, not misleading. The Merger Registration Statement will comply
with the provisions of the Securities Exchange Act and the rules and regulations
thereunder and the Securities Act and the rules and regulations thereunder,
except that no representation or warranty is made by NYB with respect to
statements made or incorporated by reference therein based on information
supplied by Synergy
33
specifically for inclusion or incorporation by reference in the Merger
Registration Statement.
5.18. Internal Controls.
None of NYB or NYB Subsidiaries' records, systems, controls, data or
information are recorded, stored, maintained, operated or otherwise wholly or
partly dependent on or held by any means (including any electronic, mechanical
or photographic process, whether computerized or not) which (including all means
of access thereto and therefrom) are not under the exclusive ownership and
direct control of it or its subsidiaries or accountants except as would not
reasonably by expected to have a materially adverse effect on the system of
internal accounting controls described in the next sentence. NYB and NYB
Subsidiaries have devised and maintain a system of internal accounting controls
sufficient to provide reasonable assurances regarding the reliability of
financial reporting and the preparation of financial statements for external
purposes in accordance with GAAP.
ARTICLE VI
COVENANTS OF SYNERGY
6.1. Conduct of Business.
6.1.1. Affirmative Covenants. During the period from the date
of this Agreement to the Effective Time, except with the written consent of NYB
(which consent shall not be unreasonably withheld), Synergy will, and it will
cause each Synergy Subsidiary to: operate its business only in the usual,
regular and ordinary course of business; use reasonable best efforts to preserve
intact its business organization and assets and maintain its rights and
franchises; and not voluntarily take any action which would (i) adversely affect
the ability of the parties to obtain any Regulatory Approval or other approvals
of Governmental Entities required for consummation of the transactions
contemplated hereby or materially increase the period of time necessary to
obtain such approvals, or (ii) adversely affect its ability to perform its
covenants and agreements under this Agreement.
6.1.2. Negative Covenants. Synergy agrees that from the date
of this Agreement to the Effective Time, except as otherwise specifically
permitted or required by this Agreement, set forth in SYNERGY DISCLOSURE
SCHEDULE 6.1.2, or consented to by NYB in writing (which consent shall not be
unreasonably withheld or delayed with respect to paragraphs (E), (M), (S), (V),
(W), (Z) and (AA) below), it will not, and it will cause each Synergy Subsidiary
not to:
(A) change or waive any provision of its Certificate of
Incorporation, Charter or Bylaws, except as required by law, or appoint a new
director to the board directors;
(B) change the number of authorized or issued shares of its
capital stock, or issue or grant any Right or agreement of any character
relating to its authorized or issued capital stock or any securities convertible
into shares of such stock, make any grant or award under the Synergy Option
Plan, or split, combine or reclassify any shares of capital stock, or declare,
set aside or pay any dividend or other distribution in respect of capital stock,
or redeem or otherwise acquire any shares of capital stock, except that (i)
Synergy may issue shares of Synergy Common Stock upon the valid exercise, in
accordance with the information set forth in SYNERGY DISCLOSURE SCHEDULE 4.3.1,
of presently outstanding Synergy Options issued under the Synergy Option Plans,
(ii) Synergy may continue to pay a regular quarterly cash dividend of no more
than $0.07 per share with payment and record dates consistent
34
with past practice (provided the declaration of the last quarterly dividend by
Synergy prior to the Effective Time and the payment thereof shall be coordinated
with NYB so that holders of Synergy Common Stock do not receive dividends on
both Synergy Common Stock and NYB Common Stock received in the Merger in respect
of such quarter or fail to receive a dividend on at least one of the Synergy
Common Stock or NYB Common Stock received in the Merger in respect of such
quarter) and provided further, that in the event the Merger has not been
consummated prior to the record date for NYB's quarterly cash dividend payable
during the fourth quarter of 2007, in lieu of the regular quarterly cash
dividend, Synergy may pay a special cash dividend in a per share amount equal to
the then-current NYB quarterly cash dividend multiplied by the Exchange Ratio
for the fourth quarter and for each subsequent quarter prior to such Effective
Time, and (iii) any Synergy Subsidiary may pay dividends to its parent company
(as permitted under applicable law or regulations) consistent with past
practice.
(C) enter into, amend in any material respect or terminate any
contract or agreement (including without limitation any settlement agreement
with respect to litigation) except in the ordinary course of business or as set
forth in Section 6.1.2(W);
(D) make application for the opening or closing of any, or
open or close any, branch or automated banking facility, except as set forth at
SYNERGY DISCLOSURE SCHEDULE 6.1.2(D) ;
(E) except as set forth on SYNERGY DISCLOSURE SCHEDULE
6.1.2(E), grant or agree to pay any bonus, severance or termination to, or enter
into, renew or amend any employment agreement, severance agreement and/or
supplemental executive agreement with, or increase in any manner the
compensation or fringe benefits of, any of its directors, officers or employees,
except: (i) as may be required pursuant to commitments existing on the date
hereof and set forth on SYNERGY DISCLOSURE SCHEDULES 4.9.1 and 4.13.1; or (ii)
as to non-executive employees, bonuses and pay increases in the ordinary course
of business consistent with past practice. Neither Synergy nor any Synergy
Subsidiary shall hire or promote any employee to a rank having a title of vice
president or other more senior rank or hire any new employee at an annual rate
of compensation in excess of $60,000, provided that Synergy or an Synergy
Subsidiary may hire at-will, non-officer employees to fill vacancies that may
from time to time arise in the ordinary course of business.
(F) enter into or, except as may be required by law,
materially modify any Synergy Compensation and Benefit Plan; or make any
contributions to any Pension Plan that are not required;
(G) merge or consolidate Synergy or any Synergy Subsidiary
with any other corporation; sell or lease all or any substantial portion of the
assets or business of Synergy or any Synergy Subsidiary; make any acquisition of
all or any substantial portion of the business or assets of any other person,
firm, association, corporation or business organization other than in connection
with foreclosures, settlements in lieu of foreclosure, troubled loan or debt
restructuring, or the collection of any loan or credit arrangement between
Synergy, or any Synergy Subsidiary, and any other Person; enter into a purchase
and assumption transaction with respect to deposits and liabilities; permit the
revocation or surrender by any Synergy Subsidiary of its certificate of
authority to maintain, or, except as set forth on SYNERGY DISCLOSURE SCHEDULE
6.1.2(G), file an application for the relocation of, any existing branch office,
or file an application for a certificate of authority to establish a new branch
office;
(H) sell or otherwise dispose of any asset of Synergy or of
any Synergy Subsidiary other than in the ordinary course of business consistent
with past practice; except for transactions with the FHLB, subject any asset of
Synergy or of any Synergy Subsidiary to a lien, pledge, security interest or
other encumbrance (other than in connection with deposits, repurchase
agreements, bankers acceptances, "treasury tax and loan" accounts established in
the ordinary course of business and transactions in "federal funds" and the
satisfaction of legal requirements in the exercise of trust powers) other than
in the
35
ordinary course of business consistent with past practice; incur any
indebtedness for borrowed money (or guarantee any indebtedness for borrowed
money), except in the ordinary course of business consistent with past practice;
(I) take any action which would result in any of the
representations and warranties of Synergy set forth in this Agreement becoming
untrue as of any date after the date hereof or in any of the conditions set
forth in Article IX hereof not being satisfied, except in each case as may be
required by applicable law;
(J) change any method, practice or principle of accounting,
except as may be required from time to time by GAAP (without regard to any
optional early adoption date) or any Bank Regulator responsible for regulating
Synergy or any Synergy Subsidiary;
(K) waive, release, grant or transfer any material rights of
value or modify or change in any material respect any existing material
agreement or indebtedness to which Synergy or any Synergy Subsidiary is a party,
other than in the ordinary course of business, consistent with past practice;
(L) purchase any equity securities, or purchase any securities
other than securities: (i) rated "A" or higher by either Standard & Poor's
Ratings Services or Xxxxx'x Investors Service; (ii) with a weighted average life
of not more than five years; and (iii) otherwise in the ordinary course of
business consistent with past practice;
(M) except for commitments issued prior to the date of this
Agreement which have not yet expired and which have been disclosed on the
SYNERGY DISCLOSURE SCHEDULE 6.1.2(M), and the renewal of existing lines of
credit, make any new loan or other credit facility commitment (including without
limitation, lines of credit and letters of credit) in an amount in excess of (i)
$2,500,000 for a commercial real estate loan; (ii) $500,000 for a commercial
business loan; or (iii) any nonconforming residential loans to be originated for
retention in the loan portfolio.
(N) enter into, renew, extend or modify any other transaction
(other than a deposit transaction) with any Affiliate;
(O) enter into any futures contract, option, interest rate
caps, interest rate floors, interest rate exchange agreement or other agreement
or take any other action for purposes of hedging the exposure of its
interest-earning assets and interest-bearing liabilities to changes in market
rates of interest;
(P) except for the execution of this Agreement, and actions
taken or which will be taken in accordance with this Agreement and performance
thereunder, take any action that would give rise to a right of payment to any
individual under any employment agreement;
(Q) make any material change in policies in existence on the
date of this Agreement with regard to: the extension of credit, or the
establishment of reserves with respect to the possible loss thereon or the
charge off of losses incurred thereon; investments; asset/liability management;
or other material banking policies except as may be required by changes in
applicable law or regulations, GAAP or by a Bank Regulator or by Xxxxxx Mae,
Xxxxxxx Mac or Xxxxxx Mae;
(R) except for the execution and approval of this Agreement,
and the consummation of transactions contemplated herein, take any action that
would give rise to an acceleration of the right to payment to any individual
under any Synergy Compensation and Benefit Plan;
(S) except as set forth on SYNERGY DISCLOSURE SCHEDULE
6.1.2(S), make
36
any capital expenditures in excess of $20,000 individually or $100,000 in the
aggregate, other than pursuant to binding commitments existing on the date
hereof and other than expenditures necessary to maintain existing assets in good
repair;
(T) purchase or otherwise acquire any assets or incur any
liabilities other than in the ordinary course of business consistent with past
practices and policies;
(U) sell any participation interest greater than $2,000,000 in
any loan (other than sales of loans secured by one- to four-family real estate
that are consistent with past practice) or OREO properties;
(V) undertake, renew, extend or enter into any lease, contract
or other commitment for its account that is not subject to termination on thirty
(30) days or less written notice without penalty or premium, other than in the
normal course of providing credit to customers as part of its banking business,
involving a payment by Synergy of more than $20,000 annually, or containing any
financial commitment extending beyond 12 months from the date hereof and
provided further that Synergy will not enter, renew or extend any branch
facility lease;
(W) pay, discharge, settle or compromise any claim, action,
litigation, arbitration or proceeding, other than any such payment, discharge,
settlement or compromise in the ordinary course of business consistent with past
practice that involves solely money damages in the amount not in excess of
$50,000 individually or $100,000 in the aggregate, and that does not create
negative precedent for other pending or potential claims, actions, litigation,
arbitration or proceedings;
(X) foreclose upon or take a deed or title to any commercial
real estate without first conducting a Phase I environmental assessment of the
property or foreclose upon any commercial real estate if such environmental
assessment indicates the presence of Materials of Environmental Concern;
(Y) purchase or sell any mortgage loan servicing rights other
than in the ordinary course of business consistent with past practice;
(Z) Prior to making any written communications to the
directors, officers or employees of Synergy or any of its Subsidiaries
pertaining to compensation or benefit matters that are affected by the
transactions contemplated by this Agreement, Synergy shall provide NYB with a
copy or description of the intended communication, NYB shall promptly review and
comment on the communication, and NYB and Synergy shall cooperate in providing
any such mutually agreeable communication;
(AA) issue any broadly distributed communication of a general
nature to customers without the prior approval of NYB (which shall not be
unreasonably withheld), except as required by law or for communications in the
ordinary course of business consistent with past practice that do not relate to
the Merger or other transactions contemplated hereby; or
(BB) agree to do any of the foregoing.
6.2. Current Information.
6.2.1. During the period from the date of this Agreement to
the Effective Time, Synergy will cause one or more of its representatives to
confer with representatives of NYB and report the general status of its ongoing
operations at such times as NYB may reasonably request. Synergy will promptly
notify NYB of any material change in the normal course of its business or in the
operation of its
37
properties and, to the extent permitted by applicable law, of any governmental
complaints, investigations or hearings (or communications indicating that the
same may be contemplated), or the institution or the threat of material
litigation involving Synergy or any Synergy Subsidiary.
6.2.2. Synergy Bank and New York Community Bank shall meet on
a regular basis to discuss and plan for the conversion of Synergy Bank's data
processing and related electronic informational systems to those used by New
York Community Bank, which planning shall include, but not be limited to,
discussion of the possible termination by Synergy Bank of third-party service
provider arrangements effective at the Effective Time or at a date thereafter,
non-renewal of personal property leases and software licenses used by Synergy
Bank in connection with its systems operations, retention of outside consultants
and additional employees to assist with the conversion, and outsourcing, as
appropriate, of proprietary or self-provided system services, it being
understood that Synergy Bank shall not be obligated to take any such action
prior to the Effective Time and, unless Synergy Bank otherwise agrees, no
conversion shall take place prior to the Effective Time, with the goal of
conducting such conversion simultaneously with the consummation of the Bank
Merger. In the event that Synergy Bank takes, at the request of New York
Community Bank, any action relative to third parties to facilitate the
conversion that results in the imposition of any termination fees or charges,
New York Community Bank shall indemnify Synergy Bank for any such fees and
charges, and the costs of reversing the conversion process, if the Merger is not
consummated for any reason other than a breach of this Agreement by Synergy, or
a termination of this Agreement under Section 11.1.9 or 11.1.10.
6.2.3. Synergy Bank shall provide New York Community Bank,
within fifteen (15) business days of the end of each calendar month, a written
list of nonperforming assets (the term "nonperforming assets," for purposes of
this subsection, means (i) loans that are "troubled debt restructuring" as
defined in Statement of Financial Accounting Standards No. 15, "Accounting by
Debtors and Creditors for Troubled Debt Restructuring," (ii) loans on
nonaccrual, (iii) real estate owned, (iv) all loans ninety (90) days or more
past due) as of the end of such month and (iv) and impaired loans. On a monthly
basis, Synergy Bank shall provide New York Community Bank with a schedule of all
loan approvals, which schedule shall indicate the loan amount, loan type and
other material features of the loan.
6.2.4. Synergy shall promptly inform NYB upon receiving notice
of any legal, administrative, arbitration or other proceedings, demands,
notices, audits or investigations (by any federal, state or local commission,
agency or board) relating to the alleged liability of Synergy or any Synergy
Subsidiary under any labor or employment law.
6.3. Access to Properties and Records.
In order to facilitate the consummation of the Merger and the Bank
Merger and the integration of the business and operations of the parties to this
Agreement, subject to Section 12.1 hereof, Synergy shall permit NYB and its
officers, employees, counsel, accountants and other authorized representatives,
reasonable access, upon reasonable notice and throughout the period before the
Effective Time, to its resources, personnel and properties and those of the
Synergy Subsidiaries, and shall disclose and make available to NYB and its
officers, employees, counsel, accountants and other authorized representatives
during normal business hours all of its books, papers and records relating to
the assets, properties, operations, obligations and liabilities, including, but
not limited to, all books of account (including the general ledger), tax
records, minute books of directors' (other than minutes that discuss any of the
transactions contemplated by this Agreement, any Acquisition Proposal or any
other subject matter Synergy reasonably determines should be treated as
confidential) and stockholders' meetings, organizational documents, Bylaws,
material contracts and agreements, filings with any regulatory authority,
litigation files, plans affecting employees, and any other business activities
or prospects in
38
which NYB may have a reasonable interest; provided, however, that Synergy shall
not be required to take any action that would provide access to or to disclose
information where such access or disclosure would violate or prejudice the
rights or business interests or confidences of any customer or other Person or
would result in the waiver by it of the privilege protecting communications
between it and any of its counsel. Synergy shall upon NYB's reasonable request
provide NYB with access to Synergy's records and systems for the purpose of
allowing NYB to obtain account and transaction information in connection with
NYB's efforts to complete a migration or integration of such data into its
systems and planning for same. Such access shall include, without limitation,
computer data linkage to Synergy's system prior to the Effective Time if NYB
deems that to be reasonably necessary or appropriate. Synergy hereby consents to
NYB sharing such information, on a confidential basis and in compliance with the
provisions of the Xxxxx-Xxxxx-Xxxxxx Act and any applicable regulations, with
such vendors as NYB deems to be necessary or appropriate for the purpose of
preparing for and implementing the required systems integration or account
migration. Synergy shall provide and shall request its auditors to provide NYB
with such historical financial information regarding it (and related audit
reports and consents) as NYB may reasonably request for securities disclosure
purposes. NYB shall use commercially reasonable best efforts to minimize any
interference with Synergy's regular business operations during any such access
to Synergy's property, books and records. Synergy and each Synergy Subsidiary
shall permit NYB, at NYB's expense, to cause a "phase I environmental audit" and
a "phase II environmental audit" to be performed at any physical location owned
or occupied by Synergy or any Synergy Subsidiary.
6.4. Financial and Other Statements.
6.4.1. Promptly upon receipt thereof, Synergy will furnish to
NYB copies of each annual or special audit of the books of Synergy and the
Synergy Subsidiaries made by its independent accountants and copies of all
internal control reports submitted to Synergy by such accountants in connection
with each annual, interim or special audit of the books of Synergy and the
Synergy Subsidiaries made by such accountants.
6.4.2. As soon as reasonably available, but in no event later
than the date such documents are filed with the SEC, Synergy will deliver to NYB
the Securities Documents filed by it with the SEC under the Securities Laws
unless the Securities Documents are available on the XXXXX System maintained by
the SEC, in which instance, Synergy shall notify NYB of the filing on the date
thereof. Synergy will furnish to NYB copies of all documents, statements and
reports as it or any Synergy Subsidiary shall send to its stockholders, the
FDIC, the FRB, the OTS or any other regulatory authority, except as legally
prohibited thereby. Within twenty-five (25) days after the end of each month,
Synergy will deliver to NYB a consolidated balance sheet and a consolidated
statement of operations, without related notes, for such month prepared in
accordance with current financial reporting practices.
6.4.3. With reasonable promptness, Synergy will furnish to NYB
such additional financial data that Synergy possesses and as NYB may reasonably
request, including without limitation, loan reports.
6.5. Maintenance of Insurance.
Synergy shall maintain, and cause each Synergy Subsidiary to maintain,
insurance in such amounts as Synergy deems reasonable to cover such risks as are
customary in relation to the character and location of theirs properties and the
nature of their business.
39
6.6. Disclosure Supplements.
From time to time prior to the Effective Time, Synergy will promptly
supplement or amend the SYNERGY DISCLOSURE SCHEDULES delivered in connection
herewith with respect to any matter hereafter arising which, if existing,
occurring or known at the date of this Agreement, would have been required to be
set forth or described in such SYNERGY DISCLOSURE SCHEDULE or which is necessary
to correct any information in such SYNERGY DISCLOSURE SCHEDULE which has been
rendered materially inaccurate thereby. No supplement or amendment to such
SYNERGY DISCLOSURE SCHEDULE shall have any effect for the purpose of determining
satisfaction of the conditions set forth in Article IX and shall be for
informational purposes only.
6.7. Consents and Approvals of Third Parties.
Synergy shall use all commercially reasonable best efforts to obtain as
soon as practicable all consents and approvals necessary or desirable for the
consummation of the transactions contemplated by this Agreement and the Plan of
Bank Merger. Without limiting the generality of the foregoing, Synergy shall
utilize the services of a professional proxy soliciting firm to provide
assistance in obtaining the stockholder vote required to be obtained by it
hereunder.
6.8. All Reasonable Best Efforts.
Subject to the terms and conditions herein provided, Synergy agrees to
use all commercially reasonable best efforts to take, or cause to be 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 and the Plan of Bank Merger.
6.9. Failure to Fulfill Conditions.
In the event that Synergy determines that a condition to its obligation
to complete the Merger or the Bank Merger cannot be fulfilled and that it will
not waive that condition, it will promptly notify NYB.
6.10. No Solicitation.
From and after the date hereof until the termination of this Agreement,
neither Synergy, nor any Synergy Subsidiary, nor any of their respective
officers, directors, employees, representatives, agents or affiliates
(including, without limitation, any investment banker, attorney or accountant
retained by Synergy or any of its Subsidiaries), will, directly or indirectly,
initiate, solicit or encourage (including by way of furnishing non-public
information or assistance) any inquiries or the making or implementation of any
proposal that constitutes, or may reasonably be expected to lead to, any
Acquisition Proposal (as defined below), or enter into or maintain or continue
discussions or negotiate with any Person in furtherance of such inquiries, or
authorize or permit any of its officers, directors, or employees or any of its
subsidiaries or any investment banker, financial advisor, attorney, accountant
or other representative retained by any of its subsidiaries to take any such
action, and Synergy shall notify NYB orally (within one business day) and in
writing (as promptly as practicable) of all of the relevant details relating to
all inquiries and proposals which it or any of its Subsidiaries or any such
officer, director, employee, investment banker, financial advisor, attorney,
accountant or other representative may receive relating to any of such matters,
provided, however, that nothing contained in this Section 6.10 shall prohibit
the Board of Directors of Synergy from furnishing information to, or entering
into discussions or negotiations with, any Person that makes an unsolicited
written proposal to acquire Synergy pursuant to a merger, consolidation, share
exchange, business combination, tender or exchange offer or other similar
40
transaction, if, and only to the extent that, (A) the Board of Directors of
Synergy determines, after consultation with and after considering the advice of
its independent financial advisor, that such proposal is superior to the Merger
from a financial point-of-view to Synergy's stockholders, (B) the Board of
Directors of Synergy, after consultation with and after considering the advice
of independent legal counsel, determines in good faith that the failure to
furnish information to or enter into discussions with such Person would be
inconsistent with the Board of Directors of Synergy's fiduciary duties under
applicable law; (C) such Acquisition Proposal was not solicited by Synergy and
did not otherwise result from a breach of this Section 6.10 by Synergy (such
proposal that satisfies (A), (B) and (C) being referred to herein as a "Superior
Proposal"); (D) Synergy promptly notifies NYB of such inquiries, proposals or
offers received by, any such information requested from, or any such discussions
or negotiations sought to be initiated or continued with Synergy or any of its
representatives indicating, in connection with such notice the material terms
and conditions of any inquiries, proposals or offers, and receives from such
Person an executed confidentiality agreement; and (E) the Synergy Stockholders'
Meeting has not occurred. For purposes of this Agreement, "Acquisition Proposal"
means any proposal or offer as to any of the following (other than the
transactions contemplated hereunder) involving Synergy or any of its
Subsidiaries: (i) any merger, consolidation, share exchange, business
combination, or other similar transactions; (ii) any sale, lease, share
exchange, mortgage, pledge, transfer or other disposition of the consolidated
assets of Synergy, in a single transaction or series of transactions other than
in the ordinary course of business consistent with past practice; (iii) any
tender offer or exchange offer for 25% or more of the outstanding shares of
capital stock of Synergy or the filing of a registration statement under the
Securities Act in connection therewith; or (iv) any public announcement of a
proposal, plan or intention to do any of the foregoing or any agreement to
engage in any of the foregoing.
6.11. Reserves and Merger-Related Costs.
Synergy agrees to consult with NYB with respect to its loan, litigation
and real estate valuation policies and practices (including loan classifications
and levels of reserves). NYB and Synergy shall also consult with respect to the
character, amount and timing of restructuring charges to be taken by Synergy in
connection with the transactions contemplated hereby and shall take such charges
as NYB shall reasonably request, provided that no such actions need be effected
until the conditions set forth in Sections 9.1. and 9. 3 have been satisfied and
until NYB shall have irrevocably certified to Synergy that all conditions set
forth in Article IX to the obligation of NYB to consummate the transactions
contemplated hereby (other than the delivery of certificates or opinions) have
been satisfied or, where legally permissible, waived. No action taken by Synergy
in accordance with this Section 6.11 shall constitute or be deemed to be a
breach, violation of or failure to satisfy any representation, warranty,
covenant, agreement, condition or other provision of this Agreement or otherwise
be considered in determining whether any such breach, violation or failure to
satisfy shall have occurred.
6.12. Takeover Laws.
If any Takeover Law may become, or may purport to be, applicable to the
transactions contemplated by this Agreement, Synergy, in conjunction with NYB,
and the members of Synergy's Board of Directors, in conjunction with NYB's Board
of Directors, will grant such approvals and take such actions as are necessary
(other than any action requiring the approval of Synergy's stockholders other
than as contemplated by Section 8.1) so that the transactions contemplated by
this Agreement may be consummated as promptly as practicable on the terms
contemplated hereby and otherwise act to eliminate or minimize the effects of
any Takeover Laws on any of the transactions contemplated by this Agreement.
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ARTICLE VII
COVENANTS OF NYB
7.1. Conduct of Business.
During the period from the date of this Agreement to the Effective
Time, except with the written consent of Synergy, NYB will not, and will cause
New York Community Savings Bank not to, voluntarily take any action, unless
required by applicable law or regulation, that would: (i) adversely affect the
ability of the parties to obtain any Regulatory Approval or other approvals of
Governmental Entities required for the consummation of the transactions
contemplated hereby in a timely manner; (ii) adversely affect its ability to
perform its covenants and agreements under this Agreement; (iii) result in any
of the conditions set forth in Article IX hereof not being satisfied, or any of
its representations or warranties in this Agreement becoming untrue as of any
date after the date hereof, subject to opportunity to cure as set forth in
Section 11.1.2; or (iv) result in the declaration, setting aside or payment of
any extraordinary dividend or other distribution in respect of NYB capital
stock.
7.2. Current Information.
During the period from the date of this Agreement to the Effective
Time, NYB will cause one or more of its representatives to confer with
representatives of Synergy and report the general status of its financial
condition, operations and business and matters relating to the completion of the
transactions contemplated hereby, at such times as Synergy may reasonably
request. NYB will promptly notify Synergy of any material change in the normal
course of its business or in the operation of its properties and, to the extent
permitted by applicable law, of any governmental complaints, investigations or
hearings (or communications indicating that the same may be contemplated), or
the institution or the threat of material litigation involving NYB or any NYB
Subsidiary.
7.3. Financial and Other Statements.
As soon as reasonably available, but in no event later than the date
such documents are filed with the SEC, NYB will deliver to Synergy the
Securities Documents filed by it with the SEC under the Securities Laws. NYB
will furnish to Synergy copies of all documents, statements and reports as it or
New York Community Bank file with, or receive from, any Bank Regulatory or other
Governmental Entity with respect to the Merger and the Bank Merger.
7.4. Disclosure Supplements.
From time to time prior to the Effective Time, NYB will promptly
supplement or amend the NYB DISCLOSURE SCHEDULES delivered in connection
herewith with respect to any matter hereafter arising which, if existing,
occurring or known at the date of this Agreement, would have been required to be
set forth or described in such NYB DISCLOSURE SCHEDULE or which is necessary to
correct any information in such NYB DISCLOSURE SCHEDULE which has been rendered
materially inaccurate thereby. No supplement or amendment to such NYB DISCLOSURE
SCHEDULE shall have any effect for the purpose of determining satisfaction of
the conditions set forth in Article IX and shall be for informational purposes
only.
7.5. Consents and Approvals of Third Parties.
NYB shall use all commercially reasonable best efforts to obtain as
soon as practicable all consents and approvals necessary or desirable for the
consummation of the transactions contemplated by
42
this Agreement and the Plan of Bank Merger.
7.6. All Reasonable Best Efforts.
Subject to the terms and conditions herein provided, NYB agrees to use
all commercially reasonable best efforts to take, or cause to be 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 and the Plan of Bank Merger.
7.7. Failure to Fulfill Conditions.
In the event that NYB determines that a condition to its obligation to
complete the Merger or the Bank Merger cannot be fulfilled and that it will not
waive that condition, it will promptly notify Synergy.
7.8. Employee Benefits.
7.8.1. Subject to Section 4.9.4, NYB agrees that it will honor
all Synergy Compensation and Benefit Plans in accordance with their terms as in
effect immediately before the Effective Time as disclosed in the SYNERGY
DISCLOSURE SCHEDULE, subject to any amendment or termination thereof that may be
required by the terms of this Agreement. NYB will review all Synergy
Compensation and Benefit Plans that are generally and uniformly provided to
employees to determine whether to maintain, terminate or continue such plans. In
the event employee compensation and/or benefits as currently provided by Synergy
or any Synergy Subsidiary are changed or terminated by NYB, in whole or in part,
NYB shall provide Continuing Employees (as defined below) with compensation and
benefits that are, in the aggregate, substantially similar to the compensation
and benefits provided to similarly situated employees of NYB or its applicable
NYB Subsidiary (as of the date any such compensation or benefit is provided);
provided, however, that Continuing Employees shall not be eligible to
participate in the NYB employee stock ownership plan until the first day of the
first plan year beginning after the Effective Time. Continuing Employees who
become participants in an NYB compensation and benefit plan shall, for purposes
of determining eligibility for and for any applicable vesting periods of such
employee benefits only (and not for benefit accrual purposes except for vacation
or as otherwise specifically set forth herein) be given credit for meeting
eligibility and vesting requirements in such plans for service as an employee of
Synergy or any Synergy Subsidiary or any predecessor thereto prior to the
Effective Time. This Agreement shall not be construed to limit the ability of
NYB or New York Community Bank to terminate the employment of any employee or to
review employee benefits programs from time to time and to make such changes as
they deem appropriate.
7.8.2. In the event of any termination or consolidation of any
Synergy health plan with any NYB health plan, NYB shall make available to
employees of Synergy or any Synergy Subsidiary who continue employment with NYB
or a NYB Subsidiary ("Continuing Employees") and their dependents
employer-provided health coverage on the same basis as it provides such coverage
to NYB employees. Unless a Continuing Employee affirmatively terminates coverage
under a Synergy health plan prior to the time that such Continuing Employee
becomes eligible to participate in the NYB health plan, no coverage of any of
the Continuing Employees or their dependents shall terminate under any of the
Synergy health plans prior to the time such Continuing Employees and their
dependents become eligible to participate in the health plans, programs and
benefits generally available to all employees of NYB and New York Community Bank
and their dependents. In the event of a termination or consolidation of any
Synergy health plan, terminated Synergy employees and qualified beneficiaries
will have the right to continued coverage under group health plans of NYB in
accordance with Code Section 4980B(f), consistent with the provisions below. In
the event of any termination of any Synergy health plan, or consolidation of any
Synergy health plan with any NYB health plan, any coverage limitation
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under the NYB health plan due to any pre-existing condition shall be waived by
the NYB health plan to the degree that such condition was covered by the Synergy
health plan and such condition would otherwise have been covered by the NYB
health plan in the absence of such coverage limitation. All Synergy Employees
who cease participating in a Synergy health plan and become participants in a
comparable NYB health plan shall receive credit for any co-payment and
deductibles paid under Synergy's health plan for purposes of satisfying any
applicable deductible or out-of-pocket requirements under the NYB health plan,
upon substantiation, in a form satisfactory to NYB that such co-payment and/or
deductible has been satisfied.
7.8.3. Neither party hereto nor any of its Subsidiaries shall
take or refrain from taking any action or be required to take or refrain from
taking any action with respect to any Synergy Compensation and Benefit Plan that
would subject any participant thereunder to additional tax under Section 409A of
the Code.
7.8.4 NYB or New York Community Bank shall establish an
advisory board and offer membership to those individuals serving as directors of
Synergy or Synergy Bank as of the Effective Time. Members shall receive $10,000
per year for service on such advisory board which shall remain in place for a
minimum of two years.
7.9. Directors and Officers Indemnification and Insurance.
7.9.1. NYB shall maintain in effect for six (6) years
following the Effective Time, the current directors' and officers' liability
insurance policies maintained by Synergy (provided, that NYB may substitute
therefor policies of at least the same coverage containing terms and conditions
which are not materially less favorable) with respect to matters occurring prior
to or at the Effective Time; provided, however, that in no event shall NYB be
required to expend in the aggregate pursuant to this Section 7.9.1 more than
150% of the annual cost currently expended by Synergy with respect to such
insurance (the "Maximum Amount"); provided, further, that if the amount of the
annual premium necessary to maintain or procure such insurance coverage exceeds
the Maximum Amount, NYB shall maintain the most advantageous policies of
directors' and officers' insurance obtainable for a premium equal to the Maximum
Amount. In connection with the foregoing, Synergy agrees in order for NYB to
fulfill its agreement to provide directors and officers liability insurance
policies for six years to provide such insurer or substitute insurer with such
reasonable and customary representations as such insurer may request with
respect to the reporting of any prior claims.
7.9.2. In addition to 7.9.1, from and after the Effective
Time, NYB shall indemnify and hold harmless each person who is now, or who has
been at any time before the date hereof, or who becomes before the Effective
Time, an officer or director of Synergy (the "Indemnified Parties") against all
losses, claims, damages, costs, expenses (including attorney's fees),
liabilities or judgments or amounts that are paid in settlement (which
settlement shall require the prior written consent of NYB, which consent shall
not be unreasonably withheld) of or in connection with any claim, action, suit,
proceeding or investigation, whether civil, criminal, or administrative (each a
"Claim"), in which an Indemnified Party is, or is threatened to be made, a party
or witness in whole or in part on or arising in whole or in part out of the fact
that such person is or was a director or officer of Synergy or a Synergy
Subsidiary if such Claim pertains to any matter of fact arising, existing or
occurring at or before the Effective Time (including, without limitation, the
Merger and the other transactions contemplated hereby), regardless of whether
such Claim is asserted or claimed before, or after, the Effective Time (the
"Indemnified Liabilities"), to the fullest extent permitted under Synergy's
Certificate of Incorporation or Bylaws to the extent permitted by applicable
law. NYB shall pay expenses in advance of the final disposition of any such
action or proceeding to each Indemnified Party to the full extent permitted by
applicable state or Federal law upon receipt of an undertaking to repay such
advance payments if the
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Indemnified Party shall be adjudicated or determined to be not entitled to
indemnification in the manner set forth below. Any Indemnified Party wishing to
claim indemnification under this Section 7.9.2 upon learning of any Claim, shall
notify NYB (but the failure so to notify NYB shall not relieve it from any
liability which it may have under this Section 7.9.2, except to the extent such
failure materially prejudices NYB) and shall deliver to NYB the undertaking
referred to in the previous sentence. In the event of any such Claim (whether
arising before or after the Effective Time) (1) after the Effective Time NYB
shall have the right to assume the defense thereof (in which event the
Indemnified Parties will cooperate in the defense of any such matter) and upon
such assumption NYB shall not be liable to any Indemnified Party for any legal
expenses of other counsel or any other expenses subsequently incurred by any
Indemnified Party in connection with the defense thereof, except that if NYB
elects not to assume such defense, or counsel for the Indemnified Parties
reasonably advises the Indemnified Parties that there are or may be (whether or
not any have yet actually arisen) issues which raise conflicts of interest
between NYB and the Indemnified Parties, the Indemnified Parties may retain
counsel reasonably satisfactory to them, and NYB shall pay the reasonable fees
and expenses of such counsel for the Indemnified Parties, (2) NYB shall be
obligated pursuant to this paragraph to pay for only one firm of counsel for all
Indemnified Parties whose reasonable fees and expenses shall be paid promptly as
statements are received except to the extent the interests of such Indemnified
Parties may conflict, (3) NYB shall not be liable for any settlement effected
without its prior written consent (which consent shall not be unreasonably
withheld, conditioned or delayed), and (4) no indemnification shall be available
to the extent the person seeking indemnification has not acted in good faith and
in a manner such person reasonably believed to be in or not opposed to the best
interests of Synergy or a Synergy Subsidiary or its successor, and with respect
to any criminal proceeding, had no reasonable cause to believe his conduct was
unlawful. The determination shall be made by a majority vote of a quorum
consisting of the Directors of NYB who are not involved in such proceeding.
7.9.3. NYB shall pay all expenses (including attorneys' fees)
that may be reasonably incurred by an Indemnified Party in enforcing the
indemnity and other obligations of NYB under this Section 7.9; provided,
however, that NYB shall only be required to pay such expenses contemplated if it
is first determined by final judicial decision that such Indemnified Party is
entitled to indemnity under this Section 7.9.
7.9.4. In the event that either NYB or any of its successors
or assigns to the extent not assumed by operation of law, transfers all or
substantially all of its properties and assets to any Person, then, and in each
such case, proper provision shall be made so that the successors and assigns of
NYB shall assume the obligations set forth in this Section 7.9.
7.9.5. The obligations of NYB provided under this Section 7.9
are intended to be enforceable against NYB directly by the Indemnified Parties
and shall be binding on all respective successors and permitted assigns of NYB.
7.10. Stock Listing.
NYB agrees to list on the Stock Exchange (or such other national
securities exchange on which the shares of the NYB Common Stock shall be listed
as of the date of consummation of the Merger), subject to official notice of
issuance, the shares of NYB Common Stock to be issued in the Merger.
7.11. Stock Reserve.
NYB agrees at all times from the date of this Agreement until the
Merger Consideration has been paid in full to reserve a sufficient number of
shares of its common stock to fulfill its obligations under this Agreement.
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7.12. Section 16(b) Exemption.
NYB and Synergy agree that, in order to most effectively compensate and
retain Synergy Insiders in connection with the Merger, both prior to and after
the Effective Time, it is desirable that Synergy Insiders not be subject to a
risk of liability under Section 16(b) of the Exchange Act to the fullest extent
permitted by applicable law in connection with the conversion of shares of
Synergy Common Stock into shares of NYB in the Merger, and for that compensatory
and retentive purpose agree to the provisions of this Section 7.12. Assuming
that Synergy delivers to NYB the Synergy Section 16 Information in a timely
fashion prior to the Effective Time, the Board of Directors of NYB, or a
committee of non-employee directors thereof (as such term is defined for
purposes of Rule 16b-3(d) under the Exchange Act), shall reasonably promptly
thereafter and in any event prior to the Effective Time adopt a resolution
providing in substance that the receipt by the Synergy Insiders (as defined
below) of NYB Common Stock in exchange for shares of Synergy Common Stock and/or
New Options for Synergy Options, pursuant to the transactions contemplated
hereby and to the extent such securities are listed in the Synergy Section 16
Information, are intended to be exempt from liability pursuant to Section 16(b)
under the Exchange Act to the fullest extent permitted by applicable law.
"Synergy Section 16 Information" means information accurate in all material
respects regarding the Synergy Insiders, the number of shares of Synergy Common
Stock held by each such Synergy Insider and expected to be exchanged for NYB
Common Stock in the Merger and the number and description of the Synergy Options
expected to be converted to New Options in connection with the Merger; provided
the requirement for a description of any Synergy Options shall be deemed to be
satisfied if copies of all plans and copies of all executed agreements, under
which such options have been granted have been delivered to NYB. "Synergy
Insiders" means those officers and directors of Synergy who are subject to the
reporting requirements of Section 16(a) of the Exchange Act and who are expected
to be subject to Section 16(a) of the Exchange Act with respect to NYB Common
Stock subsequent to the Effective Time.
ARTICLE VIII
REGULATORY AND OTHER MATTERS
8.1. Synergy Stockholder Meeting.
8.1.1. Synergy will promptly take all steps necessary to duly
call, give notice of, convene and hold a meeting of its stockholders (the
"Synergy Stockholders' Meeting"), for the purpose of considering this Agreement
and the Merger, and for such other purposes as may be, in Synergy's reasonable
judgment, necessary or desirable as soon as practicable after the Merger
Registration Statement is declared effective. Subject to the next sentence, the
Board of Directors of Synergy shall (i) recommend approval of this Agreement by
the Synergy stockholders, (ii) take all reasonable lawful action to solicit
approval of this Agreement by the Synergy stockholders and (iii) not withdraw,
modify or change in any manner adverse to NYB such favorable recommendation. The
Board of Directors of Synergy may withdraw, modify or qualify any such
recommendation only if such Board of Directors, after having consulted with and
considered the advice of outside counsel to such Board, has determined that the
making of such recommendation, or the failure so to withdraw, modify or change
its recommendation, would be inconsistent with the fiduciary duties of such
directors under applicable law.
8.2. Proxy Statement-Prospectus.
8.2.1. For the purposes (x) of registering NYB Common Stock to
be offered to holders of Synergy Common Stock in connection with the Merger with
the SEC under the Securities Act and (y) of holding the Synergy Stockholders
Meeting, NYB shall draft and prepare, and Synergy shall cooperate in the
preparation of, the Merger Registration Statement, including a proxy statement
and prospectus satisfying all applicable requirements of applicable state
securities and banking laws, and of the Securities
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Act and the Exchange Act, and the rules and regulations thereunder (such proxy
statement/prospectus in the form mailed to the Synergy stockholders, together
with any and all amendments or supplements thereto, being herein referred to as
the "Proxy Statement-Prospectus"). NYB shall use its reasonable best efforts to
file the Merger Registration Statement, including the Proxy
Statement-Prospectus, with the SEC within 45 days after the date hereof. Each of
NYB and Synergy shall use their reasonable best efforts to have the Merger
Registration Statement declared effective under the Securities Act as promptly
as practicable after such filing, and Synergy shall thereafter promptly mail the
Proxy Statement-Prospectus to its stockholders. NYB shall also use its best
efforts to obtain all necessary state securities law or "Blue Sky" permits and
approvals required to carry out the transactions contemplated by this Agreement,
and Synergy shall furnish all information concerning Synergy and the holders of
Synergy Common Stock as may be reasonably requested in connection with any such
action.
8.2.2. Synergy shall provide NYB with any information
concerning itself that NYB may reasonably request in connection with the
drafting and preparation of the Proxy Statement-Prospectus, and NYB shall notify
Synergy promptly of the receipt of any comments of the SEC with respect to the
Proxy Statement-Prospectus and of any requests by the SEC for any amendment or
supplement thereto or for additional information and shall provide to Synergy
promptly copies of all correspondence between NYB or any of their
representatives and the SEC. NYB shall give Synergy and its counsel the
opportunity to review and comment on the Proxy Statement-Prospectus prior to its
being filed with the SEC and shall give Synergy and its counsel the opportunity
to review and comment on all amendments and supplements to the Proxy
Statement-Prospectus and all responses to requests for additional information
and replies to comments prior to their being filed with, or sent to, the SEC.
Each of NYB and Synergy agrees to use all reasonable best efforts, after
consultation with the other party hereto, to respond promptly to all such
comments of and requests by the SEC and to cause the Proxy Statement-Prospectus
and all required amendments and supplements thereto to be mailed to the holders
of Synergy Common Stock entitled to vote at the Synergy Stockholders Meeting
hereof at the earliest practicable time.
8.2.3. Synergy and NYB shall promptly notify the other party
if at any time it becomes aware that the Proxy Statement-Prospectus or the
Merger Registration Statement contains any untrue statement of a material fact
or omits to state a material fact required to be stated therein or necessary to
make the statements contained therein, in light of the circumstances under which
they were made, not misleading. In such event, Synergy shall cooperate with NYB
in the preparation of a supplement or amendment to such Proxy
Statement-Prospectus that corrects such misstatement or omission, and NYB shall
file an amended Merger Registration Statement with the SEC, and Synergy shall
mail an amended Proxy Statement-Prospectus to the Synergy stockholders.
8.3. Regulatory Approvals.
Each of Synergy and NYB will cooperate with the other and use all
reasonable best efforts to promptly prepare all necessary documentation, to
effect all necessary filings and to obtain all necessary permits, consents,
waivers, approvals and authorizations of the SEC, the Bank Regulators and any
other third parties and governmental bodies necessary to consummate the
transactions contemplated by this Agreement and the Plan of Bank Merger. Synergy
and NYB will furnish each other and each other's counsel with all information
concerning themselves, their subsidiaries, directors, officers and stockholders
and such other matters as may be necessary or advisable in connection any
application, petition or any other statement or application made by or on behalf
of Synergy or NYB to any Bank Regulator or other Governmental Entity in
connection with the Merger, and the other transactions contemplated by this
Agreement. Synergy shall have the right to review and approve in advance all
characterizations of the information relating to Synergy and any of its
Subsidiaries, which appear in any filing made in connection with the
transactions contemplated by this Agreement with any Bank Regulator or other
Governmental Entity.
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8.4. Affiliates.
8.4.1. Synergy shall use all reasonable best efforts to cause
each director, executive officer and other person who is an "affiliate" (for
purposes of Rule 145 under the Securities Act) of Synergy to deliver to NYB, as
soon as practicable after the date of this Agreement, and at least thirty (30)
days prior to the date of the Synergy Stockholders Meeting, a written agreement,
in the form of Exhibit C hereto, providing that such person will not sell,
pledge, transfer or otherwise dispose of any shares of NYB Common Stock to be
received by such "affiliate," as a result of the Merger otherwise than in
compliance with the applicable provisions of the Securities Act and the rules
and regulations thereunder.
ARTICLE IX
CLOSING CONDITIONS
9.1. Conditions to Each Party's Obligations under this Agreement.
The respective obligations of each party under this Agreement shall be
subject to the fulfillment at or prior to the Closing Date of the following
conditions, none of which may be waived:
9.1.1. Stockholder Approval. This Agreement and the
transactions contemplated hereby shall have been approved by the requisite vote
of the stockholders of Synergy.
9.1.2. Injunctions. None of the parties hereto shall be
subject to any order, decree or injunction of a court or agency of competent
jurisdiction that enjoins or prohibits the consummation of the transactions
contemplated by this Agreement and no statute, rule or regulation shall have
been enacted, entered, promulgated, interpreted, applied or enforced by any
Governmental Entity or Bank Regulator, that enjoins or prohibits the
consummation of the transactions contemplated by this Agreement or the Plan of
Bank Merger.
9.1.3. Regulatory Approvals. All Regulatory Approvals and
other necessary approvals, authorizations and consents of any Governmental
Entities required to consummate the transactions contemplated by this Agreement
and the Plan of Bank Merger shall have been obtained and shall remain in full
force and effect and all waiting periods relating to such approvals,
authorizations or consents shall have expired; and no such approval,
authorization or consent shall include any condition or requirement, excluding
standard conditions that are normally imposed by the regulatory authorities in
bank merger transactions, that would, in the good faith reasonable judgment of
the Board of Directors of NYB, materially and adversely affect the business,
operations, financial condition, property or assets of the combined enterprise
of Synergy, Synergy Bank and NYB or materially impair the value of Synergy and
Synergy Bank, taken as a whole, to NYB.
9.1.4. Effectiveness of Merger Registration Statement. The
Merger Registration Statement shall have become effective under the Securities
Act and no stop order suspending the effectiveness of the Merger Registration
Statement shall have been issued, and no proceedings for that purpose shall have
been initiated or threatened by the SEC and, if the offer and sale of NYB Common
Stock in the Merger is subject to the blue sky laws of any state, shall not be
subject to a stop order of any state securities commissioner.
9.1.5. New York Stock Exchange Listing. The shares of NYB
Common Stock to be issued in the Merger shall have been authorized for listing
on the Stock Exchange, subject to official notice of issuance.
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9.2. Conditions to the Obligations of NYB under this Agreement.
The obligations of NYB under this Agreement shall be further subject to
the satisfaction of the conditions set forth in Sections 9.2.1 through 9.2.4 at
or prior to the Closing Date:
9.2.1. Representations and Warranties. Each of the
representations and warranties of Synergy set forth in this Agreement shall be
true and correct as of the date of this Agreement and upon the Effective Time
with the same effect as though all such representations and warranties had been
made on the Effective Time (except to the extent such representations and
warranties speak as of an earlier date), in any case subject to the standard set
forth in Section 4.1; and Synergy shall have delivered to NYB a certificate to
such effect signed by the Chief Executive Officer and the Chief Financial
Officer of Synergy as of the Effective Time.
9.2.2. Agreements and Covenants. Synergy shall have performed
in all material respects all obligations and complied in all material respects
with all agreements or covenants to be performed or complied with by it at or
prior to the Effective Time, and NYB shall have received a certificate signed on
behalf of Synergy by the Chief Executive Officer and Chief Financial Officer of
Synergy to such effect dated as of the Effective Time.
9.2.3. Permits, Authorizations, Etc. Synergy shall have
obtained any and all material permits, authorizations, consents, waivers,
clearances or approvals required for the lawful consummation of the Merger.
9.2.4. No Material Adverse Effect. Since December 31, 2006, no
event has occurred or circumstance arisen that, individually or in the
aggregate, has had or is reasonably likely to have a Material Adverse Effect on
Synergy.
Synergy will furnish NYB with such certificates of its officers or
others and such other documents to evidence fulfillment of the conditions set
forth in this Section 9.2 as NYB may reasonably request.
9.3. Conditions to the Obligations of Synergy under this Agreement.
The obligations of Synergy under this Agreement shall be further
subject to the satisfaction of the conditions set forth in Sections 9.3.1
through 9.3.6 at or prior to the Closing Date:
9.3.1. Representations and Warranties. Each of the
representations and warranties of NYB set forth in this Agreement shall be true
and correct as of the date of this Agreement and upon the Effective Time with
the same effect as though all such representations and warranties had been made
on the Effective Time (except to the extent such representations and warranties
speak as of an earlier date), in any case subject to the standard set forth in
Section 5.1; and NYB shall have delivered to Synergy a certificate to such
effect signed by the Chief Executive Officer and the Chief Financial Officer of
NYB as of the Effective Time.
9.3.2. Agreements and Covenants. NYB shall have performed in
all material respects all obligations and complied in all material respects with
all agreements or covenants to be performed or complied with by it at or prior
to the Effective Time, and Synergy shall have received a certificate signed on
behalf of NYB by the Chief Executive Officer and Chief Financial Officer to such
effect dated as of the Effective Time.
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9.3.3. Permits, Authorizations, Etc. NYB shall have obtained
any and all material permits, authorizations, consents, waivers, clearances or
approvals required for the lawful consummation of the Merger and the Bank
Merger.
9.3.4. No Material Adverse Effect. Since December 31, 2006, no
event has occurred or circumstance arisen that, individually or in the
aggregate, has had or is reasonably likely to have a Material Adverse Effect on
NYB.
9.3.5 Tax Opinion. On the basis of facts, representations and
assumptions which shall be consistent with the state of facts existing at the
Closing Date, NYB and Synergy shall have received an opinion of counsel to NYB,
reasonably acceptable in form and substance to NYB and Synergy, dated as of the
Closing Date, substantially to the effect that for federal income tax purposes,
that (a) the Merger will constitute a tax-free reorganization within the meaning
of Section 368(a) of the Code and NYB and Synergy will each be a party to such
reorganization; and (b) the exchange in the Merger of NYB Common Stock and cash
for Synergy Common Stock will not give rise to the recognition of any income,
gain or loss to NYB, Synergy, or the stockholders of Synergy with respect to
such exchange except, with respect to the stockholders of the Synergy, to the
extent of any Cash Consideration received in the Merger and any cash received in
lieu of fractional shares.
9.3.6 Exchange Agent Certificate. Synergy shall have received
a certificate from the Exchange Agent certifying its receipt of sufficient cash
to pay for fractional shares and the aggregate Cash Consideration (if any) and
irrevocable authorization to issue sufficient shares of NYB Common Stock to be
issued in exchange for the shares of Synergy Common Stock pursuant to the terms
of this Agreement.
NYB will furnish Synergy with such certificates of their officers or
others and such other documents to evidence fulfillment of the conditions set
forth in this Section 9.3 as Synergy may reasonably request.
ARTICLE X
THE CLOSING
10.1. Time and Place.
Subject to the provisions of Articles IX and XI hereof, the Closing of
the transactions contemplated hereby shall take place at the offices of Xxxxxxx
Xxxxxx & Xxxxxxx LLP, 0000 Xxxxxxxxx Xxxxxx, XX, Xxxxxxxxxx, X.X. 00000 at 10:00
a.m. local time, or at such other place or time upon which NYB and Synergy
mutually agree. A pre-closing of the transactions contemplated hereby (the
"Pre-Closing") shall take place at the offices of Xxxxxxx Xxxxxx & Aguggia LLP,
0000 Xxxxxxxxx Xxxxxx, XX, Xxxxxxxxxx, X.X. 00000 at 10:00 a.m. local time on
the day prior to the Closing Date.
10.2. Deliveries at the Pre-Closing and the Closing.
At the Pre-Closing there shall be delivered to NYB and Synergy the
opinions, certificates, and other documents and instruments required to be
delivered at the Pre-Closing under Article IX hereof. At or prior to the
Closing, NYB shall have delivered the Aggregate Merger Consideration to the
Exchange Agent.
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ARTICLE XI
TERMINATION, AMENDMENT AND WAIVER
11.1. Termination.
This Agreement may be terminated at any time prior to the Closing Date,
whether before or after approval of the Merger by the stockholders of Synergy:
11.1.1. At any time by the mutual written agreement of the
Boards of Directors of each of NYB and Synergy;
11.1.2. By the Board of Directors of either party (provided,
that the terminating party is not then in material breach of any representation,
warranty, covenant or other agreement contained herein) if there shall have been
a material breach of any of the representations or warranties set forth in this
Agreement on the part of the other party, which breach by its nature cannot be
cured prior to the Termination Date or shall not have been cured within thirty
(30) days after written notice of such breach by the terminating party to the
other party provided, however, that neither party shall have the right to
terminate this Agreement pursuant to this Section 11.1.2 unless the breach of
representation or warranty, together with all other such breaches, would entitle
the terminating party not to consummate the transactions contemplated hereby
under Section 9.2.1 (in the case of a breach of a representation or warranty by
Synergy) or Section 9.3.1 (in the case of a breach of a representation or
warranty by NYB);
11.1.3. By the Board of Directors of either party (provided,
that the terminating party is not then in material breach of any representation,
warranty, covenant or other agreement contained herein) if there shall have been
a material failure to perform or comply with any of the covenants or agreements
set forth in this Agreement on the part of the other party, which failure by its
nature cannot be cured prior to the Termination Date or shall not have been
cured within thirty (30) days after written notice of such failure by the
terminating party to the other party provided, however, that neither party shall
have the right to terminate this Agreement pursuant to this Section 11.1.3
unless the breach of covenant or agreement, together with all other such
breaches, would entitle the terminating party not to consummate the transactions
contemplated hereby under Section 9.2.2 (in the case of a breach of covenant by
Synergy) or Section 9.3.2 (in the case of a breach of covenant by NYB);
11.1.4. At the election of the Board of Directors of either
party if the Closing shall not have occurred by the Termination Date, or such
later date as shall have been agreed to in writing by NYB and Synergy; provided,
that no party may terminate this Agreement pursuant to this Section 11.1.4 if
the failure of the Closing to have occurred on or before said date was due to
such party's material breach of any representation, warranty, covenant or other
agreement contained in this Agreement;
11.1.5. By the Board of Directors of either party if the
stockholders of Synergy shall have voted at the Synergy Stockholders Meeting on
this Agreement and such vote shall not have been sufficient to approve this
Agreement, provided, however, that the right to terminate this Agreement under
this Section 11.1.5 shall not be available to Synergy if it failed to comply
with its obligations under Section 6.10 or Section 8.1;
11.1.6. By the Board of Directors of either party if (i) final
action has been taken by a Bank Regulator whose approval is required in
connection with this Agreement and the transactions contemplated hereby, which
final action (x) has become unappealable and (y) does not approve this Agreement
or the transactions contemplated hereby, or (ii) any court of competent
jurisdiction or other
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Governmental Entity shall have issued an order, decree, ruling or taken any
other action restraining, enjoining or otherwise prohibiting the Merger and such
order, decree, ruling or other action shall have become final and nonappealable;
11.1.7. By the Board of Directors of NYB if Synergy shall have
breached Section 6.10 or the Board of Directors of Synergy shall have withdrawn
its recommendation that Synergy stockholders approve this Agreement and the
transactions contemplated thereunder;
11.1.8. By the Board of Directors of either party (provided,
that the terminating party is not then in material breach of any representation,
warranty, covenant or other agreement contained herein) in the event that any of
the conditions precedent to the obligations of such party to consummate the
Merger cannot be satisfied or fulfilled by the date specified in Section 11.1.4
of this Agreement;
11.1.9. By the Board of Directors of NYB if Synergy has
received a Superior Proposal in accordance with Section 6.10 of this Agreement,
and either (i) Synergy has entered into an acquisition agreement with respect to
the Superior Proposal, (ii) the Board of Directors of Synergy withdraws its
recommendation of this Agreement, fails to make such recommendation or modifies
or qualifies its recommendation in a manner adverse to NYB, or (iii) the Board
of Directors of Synergy authorizes, endorses or recommends to Synergy
stockholders an Acquisition Proposal other than the transactions contemplated by
this Agreement;
11.1.10. By the Board of Directors of Synergy if Synergy has
received a Superior Proposal in accordance with Section 6.10 of this Agreement
and the Board of Directors of Synergy has made a determination to accept such
Superior Proposal; provided that Synergy shall not terminate this Agreement
pursuant to this Section 11.1.10 and enter in a definitive agreement with
respect to the Superior Proposal until the expiration of three (3) business days
following NYB's receipt of written notice advising NYB that Synergy has received
a Superior Proposal, specifying the material terms and conditions of such
Superior Proposal (and including a copy thereof with all accompanying
documentation, if in writing) and stating whether Synergy intends to enter into
a definitive agreement with respect to the Superior Proposal. After providing
such notice, Synergy shall provide a reasonable opportunity to NYB during the
three (3) business day period to make such adjustments in the terms and
conditions of this Agreement as would enable Synergy to proceed with the Merger
on such adjusted terms; and
11.1.11 By Synergy, if its Board of Directors so determines by
a majority vote of the members of its entire Board, at any time during the three
(3) business day period commencing on the Determination Date, such termination
to be effective on the fifteenth business day following the Determination Date
("Effective Termination Date"), if both of the following conditions are
satisfied:
(i) The NYB Market Value on the Determination Date is less
than $14.63; and
(ii) The number obtained by dividing the NYB Market Value on
the Determination Date by the Initial NYB Market Value ($17.73) ("NYB Ratio")
shall be less than the quotient obtained by dividing the Final Index Price by
the Initial Index Price minus 0.175; subject, however, to the following three
sentences. If Synergy elects to exercise its termination right pursuant to this
Section 11.1.11, it shall give prompt written notice thereof to NYB. During the
three business day period commencing with its receipt of such notice, NYB shall
have the option of paying additional Merger Consideration in the form of NYB
Common Stock, cash, or a combination of NYB Common Stock and cash so that the
Merger Consideration shall be valued at the lesser of (i) the product of 0.825
and the Initial NYB Market Value multiplied by the Exchange Ratio or (ii) the
product obtained by multiplying the Index Ratio by the Initial NYB Market Value
multiplied by the Exchange Ratio. If within such three business day period, NYB
delivers written notice to Synergy that it intends to proceed with the Merger by
paying such additional
52
consideration, as contemplated by the preceding sentence, then no termination
shall have occurred pursuant to this Section 11.1.11 and this Agreement shall
remain in full force and effect in accordance with its terms (except that the
Merger Consideration shall have been so modified).
For purposes of this Section 11.1.11, the following terms shall have
the meanings indicated below:
"Acquisition Transaction" means (i) a merger or consolidation, or any
similar transaction, involving the relevant companies, (ii) a purchase, lease or
other acquisition of all or substantially all of the assets of the relevant
companies, (iii) a purchase or other acquisition (including by way of merger,
consolidation, share exchange or otherwise) of securities representing 25% or
more of the voting power of the relevant companies, or (iv) agree or commit to
take any action referenced above.
"Determination Date" means the first date on which all Regulatory
Approvals (and waivers, if applicable) necessary for consummation of the Merger
and the transactions contemplated in this Agreement have been received.
"Final Index Price" means the sum of the Final Prices for each company
comprising the Index Group multiplied by the weighting set forth opposite such
company's name in the definition of Index Group below.
"Final Price," with respect to any company belonging to the Index
Group, means the average of the daily closing sales prices of a share of common
stock of such company (and if there is no closing sales price on any such day,
then the mean between the closing bid and the closing asked prices on that day),
as reported on the consolidated transaction reporting system for the market or
exchange on which such common stock is principally traded, for the ten
consecutive trading days immediately preceding the Determination Date.
"NYB Market Value on the Determination Date" shall be the average of
the daily closing sales prices of a share of NYB Common Stock as reported on the
Stock Exchange for the ten consecutive trading days immediately preceding the
Determination Date.
"Index Group" means the financial institution holding companies or
financial institutions listed below, the common stock of all of which shall be
publicly traded and as to which there shall not have been an Acquisition
Transaction involving such company publicly announced at any time during the
period beginning on the date of this Agreement and ending on the Determination
Date. In the event that the common stock of any such company ceases to be
publicly traded or an Acquisition Transaction for such company to be acquired,
or for such company to acquire another company in a transaction with a value
exceeding 25% of the acquiror's market capitalization as reflected in the table
below, is announced at any time during the period beginning on the date of this
Agreement and ending on the Determination Date, such company will be removed
from the Index Group, and the weights attributed to the remaining companies will
be adjusted proportionately for purposes of determining the Final Index Price
and the Initial Index Price. The financial institution holding companies and
financial institutions and the weights attributed to them are as follows:
53
Common Shares
Outstanding
Most Recent Quarter
Company Name (Actual) Weight (%) Index Price
-------------------------------------------------- --------------------------- ---------------- --------------------
Anchor BanCorp Wisconsin Inc. 21,782,729 2.45% 0.70
Astoria Financial Corporation 97,477,001 10.28 2.78
BankAtlantic Bancorp Inc. 59,832,492 2.28 0.22
Dime Community Bancshares, Inc. 36,062,920 1.90 0.26
Downy Financial Corp. 27,853,783 7.65 5.38
First Niagara Financial Group, Inc. 108,119,541 5.81 0.80
FirstFed Financial Corp. 16,593,000 4.19 2.71
Flagstar Bancorp, Inc. 62,359,839 3.10 0.39
Xxxxxx City Bancorp, Inc. 546,976,092 28.50 3.80
New Alliance Bancshares, Inc. 113,452,440 6.83 1.05
Partners Trust Financial Group, Inc. 43,582,198 1.88 0.21
PFF Bancorp, Inc. 24,108,834 2.67 0.75
Provident Financial Services, Inc. 62,621,748 4.11 0.69
Washington Federal, Inc. 87,326,643 8.42 2.07
Xxxxxxx Financial Corporation 56,530,058 9.94 4.47
--------------------------- ---------------- --------------------
Total: 1,364,679,318 100.00% $26.28
------------------
(1) Weighting based on index company common shares outstanding as of most
recent quarter available.
"Initial NYB Market Value" equals $17.73, adjusted as indicated in the
last sentence of this Section 11.1.11.
"Initial Index Price" means the sum of the per share closing sales
price as of May 11, 2007 of the common stock of each company comprising the
Index Group multiplied by the applicable weighting, as such prices are reported
on the consolidated transaction reporting system for the market or exchange on
which such common stock is principally traded ($26.28).
"Index Ratio" shall be the Final Index Price divided by the Initial
Index Price.
If NYB or any company belonging to the Index Group declares or effects
a stock dividend, reclassification, recapitalization, split-up, combination,
exchange of shares or similar transaction between the date of this Agreement and
the Determination Date, the prices for the common stock of such company shall be
appropriately adjusted for the purposes of applying this Section 11.1.11.
11.2. Effect of Termination.
11.2.1. In the event of termination of this Agreement pursuant
to any provision of Section 11.1, this Agreement shall forthwith become void and
have no further force, except that (i) the provisions of this Section 11.2 and
Article XII, and any other Section which, by its terms, relates to
post-termination rights or obligations, shall survive such termination of this
Agreement and remain in full force and effect.
11.2.2. If this Agreement is terminated, expenses and damages
of the parties hereto shall be determined as follows:
54
(A) Except as provided below, whether or not the Merger is
consummated, all costs and expenses incurred in connection with this Agreement
and the transactions contemplated by this Agreement shall be paid by the party
incurring such expenses.
(B) In the event of a termination of this Agreement because of
a willful breach of any representation, warranty, covenant or agreement
contained in this Agreement, the breaching party shall remain liable for any and
all damages, costs and expenses, including all reasonable attorneys' fees,
sustained or incurred by the non-breaching party as a result thereof or in
connection therewith or with respect to the enforcement of its rights hereunder.
(C) As a condition of NYB's willingness, and in order to
induce NYB, to enter into this Agreement, and to reimburse NYB for incurring the
costs and expenses related to entering into this Agreement and consummating the
transactions contemplated by this Agreement, Synergy hereby agrees to pay NYB,
and NYB shall be entitled to payment of a fee of six million dollars
($6,000,000) (the "NYB Fee"), within three (3) business days following the
occurrence of any of the events set forth below:
(i) Synergy terminates this Agreement pursuant to
Section 11.1.10; or
(ii) The entering into a definitive agreement by Synergy
relating to an Acquisition Proposal or the consummation of an
Acquisition Proposal involving Synergy before the fifteen month
anniversary of the occurrence of any of the following: (I) the
termination of this Agreement by NYB pursuant to Section 11.1.2 or
11.1.3 because of a breach by Synergy; or (II) the termination of this
Agreement by NYB or Synergy pursuant to Section 11.1.4 or 11.1.5 or by
NYB pursuant to Section 11.1.9 if, in the case of both (I) and (II),
prior to such termination an Acquisition Proposal shall have been made
known to Synergy or shall have been made directly to its shareholders;
provided, however, that if NYB pursues any cause of action against
Synergy or any of its Subsidiaries under Section 11.2.2(B) or otherwise
relating to this Agreement or the transactions contemplated hereby
(other than with respect to its entitlement to the NYB Fee), then
Synergy shall have no obligation to NYB under this Section 11.2.2(C)
and the provisions of this Section 11.2.2(C) shall thereupon terminate.
(D) If demand for payment of the NYB Fee is made pursuant to
Section 11.2.2(C) and payment is made, then NYB will not have any other rights
or claims against Synergy or its Subsidiaries under this Agreement, it being
agreed that the acceptance of the NYB Fee under Section 11.2.2(C) will
constitute the sole and exclusive remedy of NYB against Synergy and its
Subsidiaries. In no event will NYB have any claim against the officers or
directors of Synergy or any of its Subsidiaries if this Agreement is terminated
for any reason whatsoever.
11.3. Amendment, Extension and Waiver.
Subject to applicable law, at any time prior to the Effective Time
(whether before or after approval thereof by the stockholders of Synergy), the
parties hereto by action of their respective Boards of Directors, may (a) amend
this Agreement, (b) extend the time for the performance of any of the
obligations or other acts of any other party hereto, (c) waive any inaccuracies
in the representations and warranties contained herein or in any document
delivered pursuant hereto, or (d) waive compliance with any of the agreements or
conditions contained herein; provided, however, that after any approval of this
Agreement and the transactions contemplated hereby by the stockholders of
Synergy, there may not be, without further approval of such stockholders, any
amendment of this Agreement which reduces the amount, value or changes the form
of consideration to be delivered to Synergy's stockholders pursuant to this
Agreement. This Agreement may not be amended except by an instrument in writing
signed on behalf of each of the parties hereto. Any agreement on the part of a
party hereto to any extension or waiver shall
55
be valid only if set forth in an instrument in writing signed on behalf of such
party, but such waiver or failure to insist on strict compliance with such
obligation, covenant, agreement or condition shall not operate as a waiver of,
or estoppel with respect to, any subsequent or other failure.
ARTICLE XII
MISCELLANEOUS
12.1. Confidentiality.
Except as specifically set forth herein, NYB and Synergy mutually agree
to be bound by the terms of the confidentiality agreement dated February 23,
2007 (the "Confidentiality Agreement") previously executed by the parties
hereto, which Confidentiality Agreement is hereby incorporated herein by
reference. The parties hereto agree that such Confidentiality Agreement shall
continue in accordance with its terms, notwithstanding the termination of this
Agreement.
12.2. Public Announcements.
Synergy and NYB shall cooperate with each other in the development and
distribution of all news releases and other public disclosures with respect to
this Agreement, and except as may be otherwise required by law, neither Synergy
nor NYB shall issue any news release, or other public announcement or
communication with respect to this Agreement unless such news release, public
announcement or communication has been mutually agreed upon by the parties
hereto.
12.3. Survival.
All representations, warranties and covenants in this Agreement or in
any instrument delivered pursuant hereto or thereto shall expire on and be
terminated and extinguished at the Effective Time, except for those covenants
and agreements contained herein which by their terms apply in whole or in part
after the Effective Time.
12.4. Notices.
All notices or other communications hereunder shall be in writing and
shall be deemed given if delivered by receipted hand delivery or mailed by
prepaid registered or certified mail (return receipt requested) or by recognized
overnight courier addressed as follows:
If to Synergy, to: Xxxx X. Xxxxx
President and Chief Executive Officer
Synergy Financial Group, Inc.
000 Xxxxx Xxxxxx Xxxx
Xxxxxxxx, Xxx Xxxxxx 00000
Fax: (000) 000-0000
With required copies to: Xxxxxxx Xxxxx, Esq.
Xxxxxxx, Spidi & Xxxxx, PC
000 Xxx Xxxx Xxxxxx, X.X.
Xxxxx 000 Xxxx
Xxxxxxxxxx, X.X. 00000
Fax: (000) 000-0000
56
If to NYB, to: Xxxxxx X. Xxxxxxxx
Chairman, President and Chief Executive Officer
New York Community Bancorp, Inc.
000 Xxxxxxx Xxxxxx
Xxxxxxxx, Xxx Xxxx 00000
Fax: (000) 000-0000
With required copies to: Xxxx X. Xxxxxx, Esq.
Xxxxxxx Xxxxxx & Aguggia LLP
0000 Xxxxxxxxx Xxxxxx, X.X.
Xxxxxxxxxx, X.X. 00000
Fax: (000) 000-0000
or such other address as shall be furnished in writing by any party, and any
such notice or communication shall be deemed to have been given: (a) as of the
date delivered by hand; (b) three (3) business days after being delivered to the
U.S. mail, postage prepaid; or (c) one (1) business day after being delivered to
the overnight courier.
12.5. Parties in Interest.
This Agreement shall be binding upon and shall inure to the benefit of
the parties hereto and their respective successors and assigns; provided,
however, that 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, and that (except as provided in Article III
and Sections 7.8 and 7.9 of this Agreement) nothing in this Agreement is
intended to confer upon any other person any rights or remedies under or by
reason of this Agreement.
12.6. Complete Agreement.
This Agreement, including the Exhibits and Disclosure Schedules hereto
and the documents and other writings referred to herein or therein or delivered
pursuant hereto, and the Confidentiality Agreement referred to in Section 12.1,
contains the entire agreement and understanding of the parties with respect to
its subject matter. There are no restrictions, agreements, promises, warranties,
covenants or undertakings between the parties other than those expressly set
forth herein or therein. This Agreement supersedes all prior agreements and
understandings (other than the Confidentiality Agreement referred to in Section
12.1 hereof) between the parties, both written and oral, with respect to its
subject matter.
12.7. Counterparts.
This Agreement may be executed in one or more counterparts all of which
shall be considered one and the same agreement and each of which shall be deemed
an original. A facsimile copy of a signature page shall be deemed to be an
original signature page.
12.8. Severability.
In the event that any one or more provisions of this Agreement shall
for any reason be held invalid, illegal or unenforceable in any respect, by any
court of competent jurisdiction, such invalidity, illegality or unenforceability
shall not affect any other provisions of this Agreement and the parties shall
use their reasonable best efforts to substitute a valid, legal and enforceable
provision which, insofar as practical, implements the purposes and intents of
this Agreement.
57
12.9. Governing Law.
This Agreement shall be governed by the laws of the State of Delaware,
without giving effect to its principles of conflicts of laws.
12.10. Interpretation.
When a reference is made in this Agreement to Sections or Exhibits,
such reference shall be to a Section of or Exhibit to this Agreement unless
otherwise indicated. The recitals hereto constitute an integral part of this
Agreement. References to Sections include subsections, which are part of the
related Section (e.g., a section numbered "Section 5.5.1" would be part of
"Section 5.5" and references to "Section 5.5" would also refer to material
contained in the subsection described as "Section 5.5.1"). The table of
contents, index and headings contained in this Agreement are for reference
purposes only and shall not affect in any way the meaning or interpretation of
this Agreement. Whenever the words "include", "includes" or "including" are used
in this Agreement, they shall be deemed to be followed by the words "without
limitation". The phrases "the date of this Agreement", "the date hereof" and
terms of similar import, unless the context otherwise requires, shall be deemed
to refer to the date set forth in the preamble to this Agreement.
12.11. Definition of "subsidiary" and "affiliate"; Covenants with
Respect to Subsidiaries and Affiliates.
(a) When a reference is made in this Agreement to a subsidiary of a
Person, the term "subsidiary" means those other Persons that are controlled,
directly or indirectly, by such Person within the meaning of Section 2(2) of the
HOLA. When a reference is made in this Agreement to an affiliate of a Person,
the term "affiliate" (or "Affiliate") means those other Persons that, directly
or indirectly, control, are controlled by, or are under common control with,
such Person.
(b) Insofar as any provision of the Agreement shall require a
subsidiary or an affiliate of a party to take or omit to take any action, such
provision shall be deemed a covenant by NYB or Synergy, as the case may be, to
cause such action or omission to occur.
12.12. Waiver of Jury Trial.
Each party hereto acknowledges and agrees that any controversy which
may arise under this Agreement is likely to involve complicated and difficult
issues, and therefore each party hereby irrevocably and unconditionally waives
any right such party may have to a trial by jury in respect of any litigation,
directly or indirectly, arising out of, or relating to, this Agreement, or the
transactions contemplated by this Agreement. Each party certifies and
acknowledges that (a) no representative, agent or attorney of any other party
has represented, expressly or otherwise, that such other party would not, in the
event of litigation, seek to enforce the foregoing waiver, (b) each party
understands and has considered the implications of this waiver, (c) each party
makes this waiver voluntarily, and (d) each party has been induced to enter into
this Agreement by, among other things, the mutual waivers and certifications in
this Section 12.12.
58
NYB and Synergy have caused this Agreement to be executed under seal by
their duly authorized officers as of the date first set forth above.
New York Community Bancorp, Inc.
Dated: May 13, 2007 By:/s/Xxxxxx X. Xxxxxxxx
------------------------------------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Chairman, President and Chief Executive Officer
Dated: May 13, 2007 Synergy Financial Group, Inc.
By:/s/Xxxx X. Xxxxx
------------------------------------------------------
Name: Xxxx X. Xxxxx
Title: President and Chief Executive Officer
59
EXHIBIT A
FORM OF VOTING AGREEMENT
_____________________, 2007
New York Community Bancorp, Inc.
000 Xxxxxxx Xxxxxx
Xxxxxxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
New York Community Bancorp, Inc. ("NYB") and Synergy Financial Group,
Inc. ("Synergy") have entered into an Agreement and Plan of Merger dated as of
_____________________, 2007 (the "Merger Agreement"), pursuant to which, subject
to the terms and conditions set forth therein, Synergy will merge with and into
NYB, with NYB surviving the merger (the "Merger"). Stockholders of Synergy will
receive common stock of NYB as stated in the Merger Agreement.
NYB has requested, as a condition to its execution and delivery to
Synergy of the Merger Agreement, that the undersigned, being directors and
executive officers of Synergy and Synergy Bank, execute and deliver to NYB this
Letter Agreement.
Each of the undersigned, solely in his/her capacity as a stockholder of
Synergy, in order to induce NYB to execute and deliver to Synergy the Merger
Agreement, and intending to be legally bound, hereby irrevocably:
(a) Agrees to be present (in person or by proxy) at all meetings of
stockholders of Synergy called to vote for approval of the Merger so that all
shares of common stock of Synergy over which the undersigned or a member of the
undersigned's immediate family now has sole or shared voting power (other than
in a fiduciary capacity) will be counted for the purpose of determining the
presence of a quorum at such meetings and to vote, or cause to be voted, all
such shares (other than in a fiduciary capacity) in favor of approval and
adoption of the Merger Agreement and the transactions contemplated thereby
(including any amendments or modifications of the terms thereof approved by the
Board of Directors of Synergy), it being understood that as to immediate family
members, the undersigned will use his/her reasonable efforts to cause the shares
to be present and voted as provided above;
(b) Agrees not to vote or execute any written consent to rescind or
amend in any manner any prior vote or written consent, as a stockholder of
Synergy, to approve or adopt the Merger Agreement;
(c) Agrees not to sell, transfer or otherwise dispose of any common
stock of Synergy (other than shares held in a fiduciary capacity) on or prior to
the date of the meeting of Synergy stockholders to vote on the Merger Agreement,
except for transfers to charities, charitable trusts, or other charitable
organizations under Section 501(c)(3) of the IRC, lineal descendant or a spouse
of the undersigned, or to a trust or other entity for the benefit of one or more
of the foregoing persons, provided that the transferee agrees in writing to be
bound by the terms of this letter agreement;
(d) Represents that the undersigned has the capacity to enter into this
Letter Agreement and that it is a valid and binding obligation enforceable
against the undersigned in accordance with its terms, subject to bankruptcy,
insolvency and other laws affecting creditors' rights and general equitable
principles;
A-1
(e) Agrees that NYB is entitled to an injunction or injunctions to
prevent breaches of the Merger Agreement by the undersigned to enforce
specifically the terms and provisions hereof, this being in addition to any
other available remedy;
(f) Nothing herein shall impose any obligation on the undersigned to
take any action nor omit to take action in his or her capacity as a member of
the Board of Directors or as an officer of Synergy or any of its subsidiaries.
(g) Agrees that this Letter Agreement shall be construed in accordance
with and governed by the laws of the State of Delaware without regard to any
applicable principles of conflict of law.
The obligations set forth herein shall terminate concurrently with the
earlier of (i) any termination of the Merger Agreement, or (ii) the approval or
adoption of the Merger Agreement by the stockholders of Synergy.
----------------------------
This Letter Agreement may be executed in two or more counterparts, each
of which shall be deemed to constitute an original, but all of which together
shall constitute one and the same Letter Agreement.
----------------------------
The undersigned intend to be legally bound hereby.
Sincerely,
---------------------------------------------
Name
---------------------------------------------
Title
A-2
EXHIBIT B
PLAN OF BANK MERGER
PLAN OF BANK MERGER (this "Agreement") dated as of __________
___, 2007, between New York Community Bank ("New York Community Bank"), a New
York chartered stock savings bank and a wholly owned subsidiary of New York
Community Bancorp, Inc., a Delaware corporation ("NYB"), and Synergy Bank
("Synergy Bank"), a federally chartered stock savings bank and a wholly owned
subsidiary of Synergy Financial Group, Inc., a New Jersey corporation
("Synergy").
WHEREAS, the Boards of Directors of New York Community Bank
and Synergy have approved, and deem it advisable and in the best interests of
their respective stockholders to consummate, the transactions set forth in the
Agreement and Plan of Merger, dated as of _____________________ (the "Merger
Agreement"), by and between NYB and Synergy, pursuant to which Synergy will
merge with and into NYB (the "Merger"); and
WHEREAS, the Boards of Directors of New York Community Bank
and Synergy Bank have approved, and deem it advisable to consummate, subsequent
to the Merger, the merger of Synergy Bank with and into New York Community Bank
(the "Bank Merger") provided for herein, in accordance with the provisions of
the laws and regulations of the State of New York, including New York Banking
Law ("N.Y.B.L.") xx.xx. 600 and 601 and 3 New York Compilation of Codes, Rules,
and Regulations ("N.Y.C.R.R.") Part 16, as amended, and the laws of the United
States, including 12 U.S.C. xx.xx. 1467a(S) and 1828(c) and 12 C.F.R. xx.xx.
552.13 and 563.22.
NOW, THEREFORE, in consideration of the foregoing and the
respective representations, warranties, covenants and agreements set forth
herein and in the Merger Agreement, and intending to be legally bound hereby,
the parties hereto agree as follows:
ARTICLE I
THE MERGER
1.1 Effective Time of the Bank Merger. Subject to the
provisions of this Agreement, the Bank Merger shall become effective at the date
and time set forth in the certificate which shall be issued by the
Superintendent of Banks of the New York Banking Department (the
"Superintendent") pursuant to ss. 601-b of the N.Y.B.L. The "Bank Merger
Effective Time" shall be the date and time when the Bank Merger becomes
effective, as specified in the certificate of the Superintendent.
1.2 Closing. The closing of the Bank Merger will take place
at such time and at such place following the closing of the Merger as New York
Community Bank shall determine (the "Bank Merger Closing Date").
1.3 Effects of the Merger. (a) At the Bank Merger Effective
Time, (i) the separate existence of Synergy Bank shall cease and Synergy Bank
shall be merged with and into New York Community Bank (New York Community Bank
is sometimes referred to herein as the "Surviving Bank"), and Synergy Bank's
federal stock charter shall be deemed cancelled and shall be surrendered to the
Office of Thrift Supervision as soon as practicable thereafter, (ii) the
organization certificate of New York Community Bank as in effect immediately
prior to the Bank Merger Effective Time shall be the organization certificate of
the Surviving Bank until duly amended in accordance with applicable law, and the
name of the Surviving Bank shall be "New York Community Bank", (iii) the bylaws
of New York Community Bank as in effect immediately prior to the Bank Merger
Effective Time shall be the bylaws of the Surviving Bank, (iv) the main office
and branch offices of Synergy Bank, established and authorized immediately prior
to the Bank Merger Effective Time and listed on Exhibit 1 hereto, shall
B-1
become established and authorized branch offices of the Surviving Bank and (v)
the directors and officers of New York Community Bank immediately prior to the
Bank Merger Effective Time shall be the directors and officers of the Surviving
Bank, each to hold office in accordance with the organization certificate and
bylaws of the Surviving Bank until their respective successors are duly elected
or appointed and qualified.
(b) At and after the Bank Merger Effective Time, the
Bank Merger shall have all the effects set forth in
N.Y.B.L. ss. 602 and, in connection therewith, all assets of Synergy Bank as
they exist at the Bank Merger Effective Time shall pass to and vest in the
Surviving Bank without any conveyance or other transfer. The Surviving Bank
shall be responsible for all liabilities and obligations of every kind and
description of each of Synergy Bank and New York Community Bank existing as of
the Bank Merger Effective Time, whether matured or unmatured, accrued, absolute,
contingent or otherwise, and whether or not reflected or reserved against on
balance sheets, books of account or records of Synergy Bank or New York
Community Bank.
.
1.4 Offices. The principal office and the headquarters of the
Surviving Bank shall be at 000 Xxxxxxx Xxxxxx, Xxxxxxxx, Xxx Xxxx 00000. The
branch offices of the Surviving Bank shall be those of New York Community Bank
and the current principal office and branch offices of Synergy Bank.
1.5 Savings Accounts. After the Bank Merger Effective Time,
the Surviving Bank will continue to issue savings accounts on the same basis as
immediately prior to the Bank Merger Effective Time.
ARTICLE II
EFFECT OF THE BANK MERGER ON THE CAPITAL STOCK
OF THE CONSTITUENT BANKS
2.1 Effect on Synergy Bank Capital Stock. At the Bank Merger
Effective Time, by virtue of the Bank Merger and without any action on the part
of the holder of any shares of common stock, par value $0.10 per share, of
Synergy Bank ("Synergy Bank Common Stock"), all of the shares of Synergy Bank
Common Stock shall automatically be cancelled and retired and shall cease to
exist and no stock of New York Community Bank or other consideration shall be
delivered in exchange therefor.
2.2 New York Community Bank Common Stock. The shares of common
stock of New York Community Bank, par value $0.01 per share, issued and
outstanding immediately prior to the Bank Merger Effective Time shall remain
issued, outstanding and unchanged after the Bank Merger.
ARTICLE III
COVENANTS
3.1 Covenants of New York Community Bank and Synergy Bank.
During the period from the date of this Agreement and continuing until the Bank
Merger Effective Time, each of the parties hereto agrees to observe and perform
all agreements and covenants of New York Community Bank and Synergy in the
Merger Agreement that pertain or are applicable to New York Community Bank and
Synergy Bank, respectively. Each of the parties hereto agrees to use all best
efforts to take, or cause to be 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, subject to and in accordance with the applicable provisions of
the Merger Agreement.
B-2
3.2 Liquidation Account. For purposes of granting a limited
priority claim to the assets of the Surviving Bank in the unlikely event (and
only upon such event) of a complete liquidation of the Surviving Bank to persons
who continue to maintain savings accounts with the Surviving Bank after the Bank
Merger and who, immediately prior to the Bank Merger had a subaccount balance as
defined in 12 C.F.R. ss. 563b.450 et seq. with respect to the liquidation
account of Synergy Bank, the Surviving Bank shall, at the time of the Bank
Merger, establish a liquidation account in an amount equal to the liquidation
account of Synergy Bank immediately prior to the Bank Merger.
ARTICLE IV
CONDITIONS PRECEDENT
4.1 Conditions to Each Party's Obligation To Effect the Bank
Merger. The respective obligations of each party to effect the Bank Merger shall
be subject to the satisfaction prior to the Bank Merger Closing Date of the
following conditions:
(a) Consummation of Merger. The Merger shall have been
consummated in accordance with the terms and conditions of the Merger Agreement.
(b) No Injunctions or Restraints; Illegality. No order,
injunction or decree issued by any court or agency of competent jurisdiction or
other legal restraint or prohibition preventing the consummation of the Bank
Merger shall be in effect. No statute, rule, regulation, order, injunction or
decree shall have been enacted, entered, promulgated or enforced by any
Governmental Entity which prohibits, restricts or makes illegal the consummation
of the Bank Merger.
(c) Stockholder Approvals. This Agreement and the
transactions contemplated hereby shall have been duly approved, ratified and
confirmed in accordance with the applicable provisions of United States and New
York law, including 3 N.Y.C.R.R. ss. 16.3 (c)(1), N.Y.B.L. ss. 601 and 12 C.F.R.
ss. 552.13 (h), and the respective charter and bylaws of Synergy Bank and New
York Community Bank by the affirmative vote of each of the sole stockholders of
Synergy Bank and New York Community Bank, such vote adopted at a meeting of each
such sole stockholder or by each such stockholder's written consent in lieu
thereof
(d) Other Approvals. All requisite regulatory approvals or
nonobjections relating to the Bank Merger, including without limitation (i) the
Federal Deposit Insurance Corporation (the "FDIC") under the Bank Merger Act (12
U.S.C. ss. 1828(c)) and FDIC regulations, (ii) the OTS as required by 12 C.F.R.
xx.xx. 552.13 and 563.22, (iii) the Board of Governors of the Federal Reserve
System under the Bank Holding Company Act of 1956, as amended (12 U.S.C. ss.
1843(i)) and Federal Reserve Board regulations and (iv) the Superintendent under
New York law, N.Y.B.L. xx.xx. 105 and 601(1) & (2) and 3 N.Y.C.R.R. Part 16,
shall have been filed, occurred or been obtained and shall continue to be in
full force and effect and all applicable waiting periods in respect thereof
shall have expired.
ARTICLE V
TERMINATION AND AMENDMENT
5.1 Termination. This Agreement shall be terminated
immediately and without any action on the part of Synergy Bank or New York
Community Bank upon any termination of the Merger Agreement. This Agreement may
be terminated at any time prior to the Bank Merger Effective Time by mutual
consent of New York Community Bank and Synergy Bank in a written instrument, if
the Board of Directors of each so determines by a vote of a majority of the
members of its entire Board.
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5.2 Effect of Termination. In the event of termination of this
Agreement as provided in Section 5.1, this Agreement shall forthwith become void
and there shall be no liability or obligation under this Agreement on the part
of New York Community Bank, Synergy Bank or their respective officers, directors
or affiliates, except as otherwise provided in the Merger Agreement.
5.3 Amendment. This Agreement may be amended by the parties
hereto by action taken or authorized by their respective Boards of Directors.
This Agreement may not be amended except by an instrument in writing signed on
behalf of each of the parties hereto.
ARTICLE VI
GENERAL PROVISIONS
6.1 Definitions. All capitalized terms which are used but not
defined herein shall have the meanings set forth in the Merger Agreement.
6.2 Nonsurvival of Agreements. None of the agreements in this
Agreement or in any instrument delivered pursuant to this Agreement shall
survive the Bank Merger Effective Time, except to the extent set forth in the
Merger Agreement.
6.3 Notices. All notices and other communications hereunder
shall be in writing and shall be deemed given if delivered personally,
telecopied (with confirmation) or mailed by registered or certified mail (return
receipt requested) to New York Community Bank or Synergy Bank, respectively, at
the addresses for notices to NYB or Synergy, respectively, as set forth in the
Merger Agreement, with copies to the persons referred to therein.
6.4 Counterparts. This Agreement may be adopted, certified and
executed in separate counterparts, each of which shall be considered one and the
same agreement and shall become effective when all counterparts have been signed
by each of the parties and delivered to the other party, it being understood
that both parties need not sign the same counterpart.
6.5 Entire Agreement. Except as otherwise set forth in this
Agreement or the Merger Agreement (including the documents and the instruments
referred to herein or therein), this Agreement constitutes the entire agreement,
and supersedes all prior agreements and understandings, both written and oral,
among the parties with respect to the subject matter hereof.
6.6 Governing Law. This Agreement shall be governed and
construed in accordance with the laws of the State of New York without regard to
any applicable conflicts of law.
6.7 Assignment. Neither this Agreement nor any of the rights,
interests or obligations hereunder shall be assigned by any of the parties
hereto (whether by operation of law or otherwise) without the prior written
consent of the other party.
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IN WITNESS WHEREOF, New York Community Bank and Synergy Bank have
caused this Agreement to be signed by their duly authorized officers as of the
date first above written.
Attest: NEW YORK COMMUNITY BANK
By
------------------------ -----------------------------------------------
Name: Xxxxxx X. Xxxxxxxx
Secretary Chairman, President and Chief Executive Officer
Attest: SYNERGY BANK
By
------------------------ -----------------------------------------------
Name: Xxxx X. Xxxxx
Secretary President and Chief Executive Officer
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EXHIBIT C
AFFILIATES AGREEMENT
_____________________, 2007
New York Community Bancorp, Inc.
000 Xxxxxxx Xxxxxx
Xxxxxxxx, Xxx Xxxx 00000
Gentlemen:
I have been advised that I might be considered to be an "affiliate" of
Synergy Financial Group, Inc., a New Jersey corporation ("Synergy"), for
purposes of paragraphs (c) and (d) of Rule 145 of the Securities and Exchange
Commission (the "SEC") under the Securities Act of 1933, as amended (the
"Securities Act").
New York Community Bancorp, Inc. ("NYB") and Synergy have entered into
an Agreement and Plan of Merger, dated as of _____________________, 2007 (the
"Agreement"). Upon consummation of the merger contemplated by the Agreement (the
"Merger"), I may receive shares of common stock of NYB ("NYB Common Stock") (i)
in exchange for my shares of common stock, par value $0.10 per share, of Synergy
("Synergy Common Stock") or (ii) as a result of the exercise of Rights (as
defined in the Agreement). This agreement is hereinafter referred to as the
"Letter Agreement."
I represent and warrant to, and agree with, NYB as follows:
1. I have read this Letter Agreement and the Agreement and have
discussed their requirements and other applicable limitations upon my ability to
sell, pledge, transfer or otherwise dispose of shares of NYB Common Stock to be
received by me pursuant to the Merger, to the extent I felt necessary, with my
counsel or counsel for Synergy.
2. I have been advised that any issuance of shares of NYB Common Stock
to me pursuant to the Merger will be registered with the SEC. I have also been
advised, however, that, because I may be an "affiliate" of Synergy at the time
the Merger will be submitted for a vote of the stockholders of Synergy and my
disposition of such shares has not been registered under the Securities Act, I
must hold such shares indefinitely unless (i) such disposition of such shares is
subject to an effective registration statement and to the availability of a
prospectus under the Securities Act, (ii) a sale of such shares is made in
conformity with the provisions of Rule 145(d) under the Securities Act, (iii) a
sale of such shares is made following expiration of the restrictive period set
forth in Rule 145(d)(2) or (iv) in an opinion of counsel, in form and substance
reasonably satisfactory to NYB, I am advised that some other exemption from
registration is available with respect to any such proposed disposition of such
shares.
3. I understand and agree that stop transfer instructions will be given
to the transfer agent of NYB with respect to the shares of NYB Common Stock I
receive pursuant to the Merger and that there will be placed on the certificate
representing such shares, or any certificates delivered in substitution
therefor, a legend stating in substance:
The shares represented by this certificate were issued in a
transaction to which Rule 145 under the Securities Act applies. The shares
represented by this certificate may only be transferred in
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accordance with Rule 145(d) or an effective registration statement or exemption
from registration under the Securities Act.
4. Unless a transfer of my shares of the NYB Common Stock is a sale
made in conformity with the provisions of Rule 145(d), made following expiration
of the restrictive period set forth in Rule 145(d) or made pursuant to any
effective registration statement under the Securities Act, NYB reserves the
right to put an appropriate legend on the certificate issued to my transferee.
It is understood and agreed that this Letter Agreement shall terminate
and be of no further force and effect if the Agreement is terminated in
accordance with its terms. It is also understood and agreed that this Letter
Agreement shall terminate and be of no further force and effect and the stop
transfer instructions set forth above shall be lifted forthwith upon the
delivery by the undersigned to NYB of a copy of a letter from the staff of the
SEC, an opinion of counsel in form and substance reasonably satisfactory to NYB,
or other evidence reasonably satisfactory to NYB, to the effect that a transfer
of my shares of NYB Common Stock will not violate the Securities Act or any of
the rules and regulations of the SEC thereunder. In addition, it is understood
and agreed that the legend set forth in Paragraph 3 above shall be removed
forthwith from the certificate or certificates representing my shares of NYB
Common Stock upon expiration of the restrictive period set forth in Rule
145(d)(2), so long as NYB is then in compliance with SEC Rule 144(c), or if NYB
shall have received a copy of a letter from the staff of the SEC, an opinion of
counsel in form and substance reasonably satisfactory to NYB, or other evidence
satisfactory to NYB that a transfer of my shares of the NYB Common Stock
represented by such certificate or certificates will be a sale made in
conformity with the provisions of Rule 145(d), or made pursuant to an effective
registration statement under the Securities Act.
5. NYB hereby agrees (i) to make available adequate public information
with respect to itself as provided in Rule 144(a) under the Securities Act, (ii)
to provide and pay for a legal opinion (prepared by in-house attorneys for NYB
or legal counsel to NYB) with respect to compliance with Rule 144 and 145 if
required for my transfer or sale of shares in accordance therewith, and (iii) to
otherwise cooperate to the extent reasonably possible in order that I may
legally transfer or sell my shares of NYB Common Stock.
6. I recognize and agree that the foregoing provisions also apply to
(i) my spouse, (ii) any relative of mine or my spouse's occupying my home, (iii)
any trust or estate in which I, my spouse or any such relative owns at least 10%
beneficial interest or of which any of us serves as trustee, executor or in any
similar capacity and (iv) any corporation or other organization in which I, my
spouse or any such relative owns at least 10% of any class of equity securities
or of the equity interest.
7. I further recognize that in the event I become a director or officer
of NYB upon consummation of the Merger, any sale of NYB Common Stock by me may
subject me to liability pursuant to Section 16(b) of the Securities Exchange Act
of 1934, as amended.
8 Execution of this Letter Agreement should not be construed as an
admission on my part that I am an "affiliate" of Synergy as described in the
first paragraph of this Letter Agreement or as a waiver of any rights I may have
to object to any claim that I am such an affiliate on or after the date of this
Letter Agreement.
* * * * *
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This Letter Agreement shall be binding on my heirs, legal
representative and successors.
Very truly yours,
Signature
------------------------------------------
(Name)
(Title)
Accepted as of the date first above written
NEW YORK COMMUNITY BANCORP, INC.
By:
--------------------------------------------------
Name:
Title:
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