EXHIBIT 99
AGREEMENT AND PLAN OF MERGER DATED OCTOBER 1, 1999
Agreement and Plan of Merger
By and Between
TF FINANCIAL CORPORATION
and
VILLAGE FINANCIAL CORPORATION
Dated: October 1, 1999
AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER, dated October 1, 1999 (the
"Agreement"), is between TF Financial Corporation, a corporation chartered under
the laws of the State of Delaware ("TF") and Village Financial Corporation, a
corporation chartered under the laws of the State of New Jersey ("Village").
WHEREAS, TF and Village entered into a non-binding expression of
interest on September 21, 1999, regarding the acquisition by TF of Village by
way of merger;
WHEREAS, TF desires to acquire Village and Village's Board of Directors
has determined, based upon the terms and conditions hereinafter set forth, that
the acquisition described herein is in the best interests of Village and its
shareholders; and
WHEREAS, the acquisition will be accomplished by merging Village into
TF with TF as the surviving company, and the shareholders of Village receiving
the consideration hereinafter set forth; and
WHEREAS, the Boards of Directors of Village and TF have each duly
adopted and approved this Agreement;
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants and agreements herein contained, and intending to be legally bound,
the parties hereto agree as follows:
ARTICLE I
THE MERGER
1.1. The Merger. Subject to the terms and conditions of this
Agreement, at the Effective Time (as defined in Section 1.6), Village shall be
merged with and into TF under the certificate of incorporation of TF (the
"Merger") and TF shall be the surviving company (the "Surviving Company"), the
name of which shall be TF Financial Corporation. The principal office of the
Surviving Company shall be the principal office of TF. Exhibit 1 to this
Agreement lists (i) the locations of the principal and branch offices of Village
and TF, (ii) the locations of all branch offices and the main office of the
Surviving Company, (iii) the amount of the capital stock, the number of shares,
the par value and the amount of surplus of the Surviving Company.
1.2. Effect of the Merger. At the Effective Time, the
Surviving Company shall be considered the same business and corporate entity as
each of Village and TF and thereupon and thereafter, all the property, rights,
powers and franchises of each of Village and TF shall vest in the Surviving
Company and the Surviving Company shall be subject to and be deemed to have
assumed all of the debts, liabilities, obligations and duties of each of Village
and TF and shall have succeeded to all of each of their relationships, fiduciary
or otherwise, as fully and to the same extent as if such property rights,
privileges, powers, franchises, debts, obligations, duties and relationships had
been originally acquired, incurred or entered into by the Surviving Company.
1.3. Certificate of Incorporation. The Certificate of
Incorporation of TF as it exists immediately prior to the Effective Time shall
continue as the Certificate of Incorporation of the Surviving Company.
1.4. Bylaws. The Bylaws of TF as they exist immediately prior
to the Effective Time shall continue as the Bylaws of the Surviving Company
until otherwise amended as provided by law.
1.5. Directors and Officers. At the Effective Time, the
directors and officers of TF shall become the directors and officers of the
Surviving Company. The names of the persons who will be directors and officers
of the Surviving Company are included on Exhibit 1.
1.6. Effective Time and Closing. The Merger shall become
effective (and be consummated) at the date and time (the "Effective Time") as
set forth in the certificates of merger as filed with the State of Delaware and
the State of New Jersey, as applicable. The closing of the transactions
contemplated by this Agreement (the "Closing") shall take place at the offices
of ▇▇▇▇▇▇▇ Spidi & ▇▇▇▇▇, PC, Washington, D.C. commencing at 10:00 a.m. local
time on the day following the satisfaction or waiver of all conditions to the
obligations of the Parties to consummate the transactions contemplated hereby
(other than conditions with respect to actions the respective parties will take
at the Closing itself) or such other date as the parties to this Agreement may
mutually determine (the "Closing Date"). Subject to the terms and conditions of
this Agreement, each of the parties agrees to use all reasonable efforts to
cause the Closing to be completed on the earliest practicable date.
ARTICLE II
CONVERSION OF VILLAGE SHARES
2.1. Conversion of Village Common Stock. Each share of common
stock, par value $.10 per share, of Village ("Village Common Stock"), issued and
outstanding immediately prior to the Effective Time (other than any shares of
Village Common Stock retired pursuant to Section 2.4) shall, by virtue of the
Merger and without any action on the part of the holder thereof, be converted at
the Effective Time as follows:
(a) Consideration for Merger. Subject to the provisions of
this Section 2.1, each share of Village Common Stock issued and outstanding
immediately prior to the Effective Time (excluding any shares of Village Common
Stock retired pursuant to Section 2.4) shall be converted at the Effective Time
into the right to receive $2.00 in cash (the "Merger Price"), subject to
adjustment as set forth in paragraph 2.1(b) of this Agreement. No interest shall
accrue or be payable with respect to the Merger Price.
(b) Adjustment to Merger Price. The aggregate Merger Price
shall be increased if, as of the Closing Date, the negotiated amount of payments
by Village to all parties set forth in Exhibit 2 to this Agreement is less than
$65,000. The aggregate amount of the increase to the Merger Price shall be equal
to the difference between $65,000 and the negotiated amount of payments by
Village to such parties as of the Closing Date. Conversely, the aggregate Merger
Price shall be decreased if, as of the Closing Date, the negotiated amount of
payments by Village to all parties as set forth in Exhibit 2 to this Agreement
is greater than $65,000. The aggregate amount of the decrease to the Merger
Price shall be equal to the difference between $65,000 and the negotiated amount
of payments by Village to such parties as of the Closing Date.
(c) Cancellation of Village Certificates. After the Effective
Time, each such share of Village Common Stock shall no longer be outstanding and
shall automatically be canceled, and each of the certificates (the
"Certificates") previously evidencing any shares of Village Common Stock
outstanding immediately prior to the Effective Time (other than any shares of
Village Common Stock retired pursuant to Section 2.4) shall thereafter represent
the right to receive the Merger Price, as adjusted. After the Effective Time,
the shareholders of Village (hereinafter the "Shareholders") shall cease to have
any rights with respect to such shares of Village Common Stock except as
otherwise provided herein or by law.
2.2. Exchange of Shares.
(a) The parties shall exchange all the Certificates for all of
the Merger Price provided for in Section 2.1 at the Closing. Upon surrender of a
Certificate for exchange and cancellation at Closing, the record holder of the
shares represented by the Certificate shall be entitled on the date of the
Closing to receive in exchange for the Certificate the Merger Price as provided
in Section 2.1 hereof and the Certificate so surrendered shall be canceled. No
Shareholder will receive the consideration to which that Shareholder would
otherwise be entitled until the Shareholder surrenders the Certificate for
exchange or, in lieu thereof, an appropriate Affidavit of Loss and Indemnity
Agreement and/or a bond as may be reasonably required in each case by TF.
(b) After the Effective Time, there shall be no transfers on
the stock transfer books of Village of the shares of Village Common Stock which
were outstanding immediately prior to the Effective Time and, if any
Certificates representing such shares are presented for transfer, they shall be
canceled and exchanged for the Merger Price as provided in Section 2.1 hereof.
(c) If payment of the Merger Price as provided in Section 2.1
hereof is to be made in a name other than that in which the Certificate
surrendered in exchange therefor is registered, it shall be a condition of such
payment that the Certificate so surrendered shall be properly endorsed (or
accompanied by an appropriate instrument of transfer) and otherwise in proper
form for transfer, and that the person requesting such payment shall pay to
Third Federal Savings Bank, a wholly-owned subsidiary of TF (the "Exchange
Agent"), in advance any transfer or other taxes required by reason of the
payment to a person other than that of 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.
2.3 TF Common Stock. The shares of common stock of TF
outstanding immediately prior to the Effective Time shall not be affected by the
Merger but shall be the same number of shares of the Surviving Company.
2.4 Certain Village Shares Retired. Each share of Village
Common Stock that is either (a) owned by TF or any direct or indirect
wholly-owned subsidiary of TF (other than shares held in trust accounts, managed
accounts or in any similar manner as trustee or in a fiduciary capacity and
shares held as collateral or in lieu of a debt previously contracted) or (b)
held in the treasury of Village
shall be canceled and retired at the Effective Time and no cash or other
consideration shall be paid or delivered in exchange therefor.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF VILLAGE
References herein to the "Village Disclosure Schedule" shall
mean all of the disclosure schedules required by this Agreement, dated as of the
date hereof and referenced to the specific sections and subsections of this
Agreement, which have been delivered on the date hereof, by Village to TF.
Village hereby represents and warrants to TF as follows:
3.1. Organization. Village is duly organized, validly existing
and in good standing under the laws of the United States. Village has the
corporate power and authority to own or lease all of its properties and assets
and to carry on its business as it is now being conducted and is duly licensed
or qualified to do business and is in good standing in each jurisdiction in
which the nature of the business conducted by it or the character or location of
the properties and assets owned or leased by it makes such licensing or
qualification necessary, except where the failure to be so licensed, qualified
or in good standing would not have a material adverse effect on the business,
operations, assets or financial condition of Village. The Village Disclosure
Schedule sets forth true and complete copies of the Certificate of Incorporation
and Bylaws (together, the "Governing Documents") of Village as in effect on the
date hereof. Village does not have any subsidiaries.
3.2. Capitalization. The authorized capital stock of Village
consists of 5,000,000 shares of Village Common Stock and 1,000,000 shares of
preferred stock, $.10 par value per share. As of the date hereof, there were
94,850 shares of Village Common Stock issued and outstanding and no shares of
preferred stock outstanding. As of the date hereof, there were no shares of
Village Common Stock issuable upon exercise of outstanding options granted
pursuant to any Village stock option plan. All issued and outstanding shares of
Village Common Stock have been duly authorized and validly issued, and are fully
paid and no assessment has been made on such shares. The authorized but unissued
shares of Village Common Stock are not subject to pre-emptive rights. Village
does not have, nor is it bound by, any outstanding subscriptions, options,
warrants, calls, commitments or agreements of any character calling for the
transfer, purchase or issuance of any shares of capital stock of Village or any
securities representing the right to purchase or otherwise receive any shares of
such capital stock or any securities convertible into or representing the right
to subscribe for any such shares, and there are no agreements or understandings
with respect to voting of any such shares.
3.3. Authority; No Violation.
(a) There are 26 Shareholders and, other than their approval
of this Agreement and the Merger, no Shareholder consent or action is necessary
to consummate the transactions contemplated hereby. Village has full corporate
power and authority to execute and deliver this Agreement and to consummate the
transactions contemplated hereby in accordance with the terms hereof. The
execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby have been duly and validly approved by the
Board of Directors of Village. Except for the consents and approvals described
in paragraph (b) below, no other corporate proceedings on the part of Village
are
necessary to consummate the transactions contemplated hereby. This Agreement has
been duly and validly executed and delivered by Village and constitutes the
valid and binding obligation of Village, enforceable against Village in
accordance with its terms, except to the extent that enforcement may be limited
by (i) bankruptcy, insolvency, reorganization, moratorium, conservatorship,
receivership or other similar laws now or hereafter in effect relating to or
affecting the enforcement of creditors' rights generally, and (ii) general
equitable principles, except that no representation is made as to the effect or
availability of indemnification, equitable remedies or injunctive relief.
(b) Neither the execution and delivery of this Agreement by
Village, nor the consummation by Village of the transactions contemplated hereby
in accordance with the terms hereof, or compliance by Village with any of the
terms or provisions hereof, will (i) violate any provision of Village's
Governing Documents, (ii) assuming that the consents and approvals set forth
below are duly obtained, violate any statute, code, ordinance, rule, regulation,
judgment, order, writ, decree or injunction applicable to Village or any of its
properties or assets, or (iii) except as set forth in the Village Disclosure
Schedule, 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 the creation of any lien, security
interest, charge or other encumbrance upon any of the properties or assets of
Village 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 Village is a party, or by which Village or any
of its properties or assets may be bound or affected. Except for stockholder
approval, no consents or approvals of or filings or registrations with or
notices to any public body or authority are necessary on behalf of Village in
connection with (x) the execution and delivery by Village of this Agreement and
(y) the consummation by Village of the transactions contemplated hereby.
3.4. Financial Statements.
(a) The Village Disclosure Schedule sets forth copies of the
statements of condition of Village as of September 30, 1998, and the related
statements of income, stockholders' equity and cash flows for the period ended
September 30, 1998 (the "Village Audited Statements"), accompanied by the audit
report of S.R. ▇▇▇▇▇▇▇▇▇, ▇.▇., independent public accountants with respect to
Village, and the unaudited statement of condition as of June 30, 1999, and the
related unaudited statement of income of Village for the six months ended June
30, 1999 (the "Village Unaudited Statements" and, collectively with the Village
Audited Statements, the "Village Financial Statements"). The Village Financial
Statements (including the related notes) have been prepared in accordance with
generally accepted accounting principles ("GAAP") consistently applied during
the periods involved. The Village Financial Statements fairly present the
financial condition of Village as of the respective dates set forth therein and
fairly present the results of the operations, and with respect to the Village
Audited Statements the changes in stockholders' equity and cash flows, of
Village for the respective periods set forth therein.
(b) The books and records of Village have been and are being
maintained in material compliance with applicable legal and accounting
requirements, and reflect only actual transactions.
(c) Except as and to the extent reflected, disclosed or
reserved against in the Village
Audited Statements (including the notes thereto), as of September 30, 1998
Village did not have any liabilities, whether absolute, accrued, contingent or
otherwise, which are material to the business, operations, assets or financial
condition of Village and which are required by GAAP to be disclosed in the
Village Audited Statements. Except as set forth in the Village Disclosure
Schedule, as and to the extent reflected, disclosed or reserved against in the
Village Unaudited Statements (including the notes thereto), as of June 30, 1999
Village did not have any liabilities, whether absolute, accrued, contingent or
otherwise, which are material to the business, operations, assets or financial
condition of Village. Except as set forth in the Village Disclosure Schedule,
since June 30, 1999 and to the date hereof, Village has not incurred any
liabilities except in the ordinary course of business and consistent with
prudent business practice or except as specifically contemplated by this
Agreement.
3.5. Financial Advisor; Broker's and Other Fees. Neither
Village nor any of its directors or officers has employed any broker or finder
or incurred any finder's fees or commissions in connection with any of the
transactions contemplated by this Agreement. Except as set forth in the Village
Disclosure Schedule, there are no fees (other than time charges billed at usual
and customary rates) payable to any brokers, finders or consultants in
connection with this transaction or which would be triggered by consummation of
this transaction or the termination of the services of such persons by Village.
3.6. Absence of Certain Changes or Events. Except as set forth
in the Village Disclosure Schedule, there has not been any material adverse
change in the business, operations, assets or financial condition of Village
since June 30, 1999 (including without limitation a material adverse change
arising from the institution of Legal Proceedings (as defined in Section 3.7) or
the occurrence of a default as described in Section 3.12(c)), and to Village's
knowledge, no facts or conditions exist (other than regional or national
economic conditions which affect financial institutions generally) which are
reasonably likely to cause such a material adverse change in the future.
3.7. Legal Proceedings. Except as disclosed in the Village
Disclosure Schedule, as of the date of this Agreement Village is not a party to
any, and there are no pending or, to Village's knowledge, threatened, legal,
administrative, arbitral or other proceedings, claims, actions or governmental
investigations of any nature ("Legal Proceedings") against Village or against
any present or former Village officer or director in their capacity as a Village
officer or director which are material to Village. Except as disclosed in the
Village Disclosure Schedule, as of the date of this Agreement Village is not a
party to any material order, judgment or decree entered against Village in any
lawsuit or proceeding.
3.8. Taxes and Tax Returns. Village has duly filed (and until
the Effective Time will so file) all returns, declarations, reports, information
returns and statements ("Returns") required to be filed by it in respect of any
federal, state and local taxes (including withholding taxes, penalties or other
payments required) and has duly paid (and until the Effective Time will so pay)
all such taxes due and payable, other than taxes or other charges which are
being contested in good faith. Village has established (and until the Effective
Time will establish) on its books and records reserves that it reasonably
believes are adequate for the payment of all federal, state and local taxes not
yet due and payable, but are anticipated to be incurred in respect of Village
through the Effective Time. To the knowledge of Village, there are no audits or
other administrative or court proceedings presently
pending, or claims asserted, for taxes or assessments upon Village nor has
Village given any currently outstanding waivers or comparable consents regarding
the application of the statute of limitations with respect to any taxes or tax
Returns.
3.9. Employee Benefit Plans.
(a) Except as disclosed in the Village Disclosure Schedule,
Village does not maintain or contribute to any "employee pension benefit plan",
within the meaning of Section 3(2)(A) of the Employee Retirement Income Security
Act of 1974, as amended ("ERISA") (the "Village Pension Plans"), "employee
welfare benefit plan", within the meaning of Section 3(1) of ERISA (the "Village
Welfare Plans"), or any stock option plan, stock purchase plan, deferred
compensation plan, severance plan, bonus plan, employment agreement or other
similar plan, program or arrangement. Village has not contributed to any
"Multiemployer Plan", within the meaning of Sections 3(37) and 4001(a)(3) of
ERISA. Village has not sponsored a Village Pension Plan that was subject to
Title IV of ERISA within six years from the date hereof.
(b) The consummation of the transactions contemplated by this
Agreement will not (i) entitle any current or former employee of Village to
severance pay, unemployment compensation or any similar payment, or (ii)
accelerate the time of payment, accelerate the vesting, or increase the amount,
of any compensation or benefits due to any current employee or former employee
under any contract, arrangement, understanding or agreement.
(c) Village has no deferred compensation agreements,
understandings or obligations for payments or benefits to any current or former
director, officer or employee of Village or any predecessor of any thereof.
(d) Village does not maintain or otherwise pay for life
insurance policies (other than group term life policies on employees) with
respect to any director, officer or employee.
(e) Village does not maintain any retirement plan or retiree
medical plan or arrangement for directors.
3.10. [Intentionally Omitted]
3.11. Compliance with Applicable Law. Except as set forth in
the Village Disclosure Schedule, Village holds all material licenses,
franchises, permits and authorizations necessary for the lawful conduct of its
business, and has complied with and is not in default in any respect under any,
applicable law, statute, order, rule, regulation, policy and/or guideline of any
federal, state or local governmental authority relating to Village (other than
where such defaults or non-compliance will not, alone or in the aggregate,
result in a material adverse effect on the business, operations, assets or
financial condition of Village) and Village has not received notice of violation
of, nor does it know of any violations (other than violations which will not,
alone or in the aggregate, result in a material adverse effect on the business,
operations, assets or financial condition of Village) of, any of the above.
3.12. Certain Contracts. (a) Except as disclosed in the
Village Disclosure Schedule,
Village is not a party to or bound by any contract or understanding (whether
written or, to its knowledge, oral) with respect to the employment or
termination of any present or former officers, employees, directors or
consultants. The Village Disclosure Schedule sets forth true and correct copies
of all written employment agreements or termination agreements with officers,
employees, directors, or consultants to which Village is a party.
(b) Except as disclosed in the Village Disclosure Schedule or
in Exhibit 2 attached to this Agreement (i) as of the date of this Agreement,
Village is not a party to or bound by any commitment, agreement or other
instrument (excluding commitments and agreements in connection with extensions
of credit by Village) which contemplates the payment of amounts in excess of
$1,000, or which otherwise is material to the operations, assets or financial
condition of Village, (ii) no commitment, agreement or other instrument to which
Village is a party or by which it is bound limits the freedom of Village to
compete in any line of business or with any person, and (iii) Village is not a
party to any collective bargaining agreement.
(c) As of the date of this Agreement, except as disclosed in
the Village Disclosure Schedule, Village is not in default in any material
respect under any material lease, contract, mortgage, promissory note, deed of
trust, loan agreement or other commitment or arrangement.
(d) As of the date of this Agreement, except as disclosed in
the Village Disclosure Schedule, to the knowledge of Village, any other party
thereto is not in default in any material respect under any material lease,
contract, mortgage, promissory note, deed of trust, loan agreement or other
commitment or arrangement that is material to Village.
3.13. Properties and Insurance.
(a) Village has good and, as to owned real property, if any,
marketable title to all material assets and properties, whether real or
personal, tangible or intangible, reflected in Village's balance sheet as of
September 30, 1998, or owned and acquired subsequent thereto (except to the
extent that such assets and properties have been disposed of for fair value in
the ordinary course of business since September 30, 1998), subject to no
encumbrances, liens, mortgages, security interests or pledges, except (i) those
items that secure liabilities that are reflected in such balance sheet or the
notes thereto or incurred in the ordinary course of business after the date of
such balance sheet, (ii) statutory liens for amounts not yet delinquent or which
are being contested in good faith, (iii) such encumbrances, liens, mortgages,
security interests, pledges and title imperfections that are not in the
aggregate material to the business, operations, assets, and financial condition
of Village; (iv) with respect to owned real property, if any, title
imperfections noted in title reports delivered to TF prior to the date hereof
and (v) any lien, mortgages, security interests in favor of, or placed by, TF.
Village, as lessee, has the right under valid and subsisting leases to assign
its interest in such leases and to occupy, use, possess and control, in all
material respects, all real property leased by it, as presently occupied, used,
possessed and controlled by it.
(b) The Village Disclosure Schedule lists all policies of
insurance and bonds covering business operations and insurable properties and
assets of Village, all risks insured against, and the amount thereof and
deductibles relating thereto. Except as set forth in the Village Disclosure
Schedule, as of the date hereof, Village has not, since January 1, 1998,
received any notice of cancellation or
notice of a material amendment of any such insurance policy or bond and it is
not in default in any material respect under such policy or bond, and, to
Village's knowledge, no coverage thereunder is being disputed and all material
claims thereunder have been filed in a timely fashion.
3.14. Minute Books. The minute books of Village contain
records which, in all material respects, accurately record all meetings and
other corporate action of the Shareholders and Board of Directors (including
committees of its Board of Directors).
3.15. Environmental Matters.
(a) Village has not received any written notice, citation,
claim, assessment, proposed assessment or demand for abatement alleging that
Village (either directly or as a trustee or fiduciary, or as a
successor-in-interest in connection with the enforcement of remedies to realize
the value of properties serving as collateral for outstanding loans) is
responsible for the correction or cleanup of any condition resulting from the
violation of any law, ordinance or other governmental regulation regarding
environmental matters, which correction or cleanup would be material to the
business, operations, assets or financial condition of Village. Village has no
knowledge that any toxic or hazardous substances or materials have been emitted,
generated, disposed of or stored on any real property owned or leased by Village
(the "Properties"), in any manner that violates or, after the lapse of time may
violate, any presently existing federal, state or local law or regulation
governing or pertaining to such substances and materials, the violation of which
would have a material adverse effect on the business, operations, assets or
financial condition of Village.
(b) Village has no knowledge that any of the Properties has
been operated in any manner prior to the date of this Agreement that violated
any applicable federal, state or local law or regulation governing or pertaining
to toxic or hazardous substances and materials.
(c) To the knowledge of Village, there are no underground
storage tanks on, in or under any of the Properties and no underground storage
tanks have been closed or removed from any of the Properties while the property
was operated or controlled by Village.
3.16. [Intentionally Omitted]
3.17. Year 2000 Compliance. Village has taken all reasonable
steps necessary to address the software, accounting and record keeping issues
raised in order for the data processing systems used in the business conducted
by Village to be Year 2000 ready.
3.18.[Intentionally Omitted]
3.19. Disclosure. The representations and warranties of
Village contained in Article III of this Agreement are accurate in all material
respects.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF TF
TF hereby represents and warrants to Village as follows:
4.1. Corporate Organization. TF is a corporation duly
organized and validly existing and in good standing under the laws of the State
of Delaware. TF has the corporate power and authority to own or lease all of its
properties and assets and to carry on its business as it is now being conducted,
and is duly licensed or qualified to do business and is in good standing in each
jurisdiction in which the nature of the business conducted by it or the
character or location of the properties and assets owned or leased by it makes
such licensing or qualification necessary, except where the failure to be so
licensed, qualified or in good standing would not have a material adverse effect
on the business, operations, assets or financial condition of TF.
4.2. Authority; No Violation.
(a) TF has full corporate power and authority to execute and
deliver this Agreement and to consummate the transactions contemplated hereby in
accordance with the terms hereof. The execution and delivery of this Agreement
and the consummation of the transactions contemplated hereby have been duly and
validly approved by the Board of Directors of TF. No other corporate proceedings
on the part of TF is necessary to consummate the transactions contemplated
hereby. This Agreement has been duly and validly executed and delivered by TF
and constitutes a valid and binding obligation of TF, enforceable against TF in
accordance with its terms, except to the extent that enforcement may be limited
by (i) bankruptcy, insolvency, reorganization, moratorium, conservatorship,
receivership or other similar laws now or hereafter in effect relating to or
affecting the enforcement of creditors' rights generally or the rights of
federally-chartered savings associations or their holding companies, (ii)
general equitable principles, and (iii) laws relating to the safety and
soundness of insured depository institutions and except that no representation
is made as to the effect or availability of equitable remedies or injunctive
relief.
(b) Neither the execution or delivery of this Agreement nor
the consummation by TF of the transactions contemplated hereby in accordance
with the terms hereof or compliance by TF with any of the terms or provisions
hereof, will violate any provision of the Governing Documents of TF.
4.3. Adequacy of Funds. As of the date hereof and continuing
through the Effective Time, TF has, and will continue to have, sufficient liquid
funds or liquid assets to pay the Merger Price.
4.4. Disclosure. The representations and warranties of TF
contained in Article IV of this Agreement are accurate in all material respects.
ARTICLE V
COVENANTS OF THE PARTIES
5.1. Conduct of the Business of Village. During the period
from the date of this Agreement to the Effective Time, Village shall conduct its
business and engage in transactions permitted hereunder only in the ordinary
course and consistent with prudent business practice, except with the prior
written consent of TF, which consent will not be unreasonably withheld.
5.2. Negative Covenants and Dividend Covenants. Village agrees
that from the date hereof to the Effective Time, except as otherwise approved by
TF in writing, or as permitted or required by this Agreement, it will not:
(a) change any provision of its Governing Documents;
(b) change the number of shares of its authorized capital
stock or issue any shares of Village Common Stock or other capital stock or
issue or grant any option, warrant, call, commitment, subscription, right to
purchase or agreement of any character relating to the authorized or issued
capital stock of Village or any securities convertible into shares of such
stock, or split, combine or reclassify any shares of its capital stock, or
declare, set aside or pay any dividend, or other distribution (whether in cash,
stock or property or any combination thereof) in respect of its capital stock,
or redeem or otherwise acquire any shares of such capital stock;
(c) grant any severance or termination pay to, or enter into
or amend any employment agreement with, any of its directors, officers or
employees; adopt any new employee benefit plan or arrangement of any type or
amend any such existing benefit plan or arrangement; or award any increase in
compensation or benefits to its directors, officers or employees;
(d) sell or dispose of any substantial amount of assets or
incur any significant liabilities other than in the ordinary course of business
consistent with past practices and policies;
(e) make any capital expenditures;
(f) make any material change in its accounting methods or
practices, other than changes required in accordance with generally accepted
accounting principles; or
(g) agree to do any of the foregoing.
5.3. No Solicitation. Village shall not, directly or
indirectly, encourage or solicit or hold discussions or negotiations with, or
provide any information to, any person, entity or group (other than TF)
concerning any merger or sale of shares of capital stock or sale of substantial
assets or liabilities not in the ordinary course of business, or similar
transactions involving Village (an "Acquisition Transaction"), except as the
fiduciary duties of the directors of Village may require. Village will promptly
communicate to TF the terms of any proposal, whether written or oral, which is
communicated to any member of the Board of Directors or any executive officer of
Village in respect of any Acquisition Transaction.
5.4. Current Information. During the period from the date of
this Agreement to the Effective Time, Village will, at the request of TF, cause
one or more of its designated representatives to confer with representatives of
TF regarding Village's business, operations, properties, assets and financial
condition and matters relating to the completion of the transactions
contemplated herein.
5.5. Access to Properties and Records. Village shall permit TF
and its agents and representatives, including, without limitation, officers,
directors, employees, attorneys, accountants and advisors (collectively,
"Representatives"), reasonable access to their respective properties, and
shall disclose and make available to TF and its Representatives all books,
papers and records relating to their respective assets, stock ownership,
properties, operations, obligations and liabilities, including, but not limited
to, all books of account (including the general ledger), tax records, minute
books of directors' and stockholders' meetings, organizational documents,
bylaws, material contracts and agreements, filings with any regulatory
authority, independent auditors' work papers (subject to the receipt by such
auditors of a standard access representation letter), litigation files, plans
affecting employees, and any other business activities or prospects in which TF
and its representatives may have a reasonable interest.
5.6. Regulatory Matters. The parties hereto will cooperate
with each other and use all reasonable efforts to prepare all necessary
documentation, to effect all necessary filings and to obtain all necessary
permits, consents, approvals and authorizations of all third parties and
governmental bodies necessary to consummate the transactions contemplated by
this Agreement as soon as possible
5.7. Further Assurances. Each of the parties hereto agrees to
use all reasonable efforts to take, or cause to be taken, all actions and to do,
or cause to be done, all things reasonably necessary, proper or advisable under
applicable laws and regulations to satisfy the conditions to Closing and to
consummate and make effective the transactions contemplated by this Agreement.
5.8. Public Announcements. The parties hereto shall cooperate
with each other in the development and distribution of all news releases and
other public disclosures with respect to this Agreement or any of the
transactions contemplated hereby, except as may be otherwise required by law or
regulation or as to which the party releasing such information has used all
reasonable efforts to discuss with the other party in advance.
5.9. Failure to Fulfill Conditions. TF shall use its best
efforts to cause the Closing to occur on or before October 31, 1999. In the
event that TF or Village reasonably determines that a material condition to its
obligation to consummate the transactions contemplated hereby cannot be
fulfilled on or prior to December 31, 1999 (the "Cutoff Date"), and that it will
not waive that condition, it will promptly notify the other party.
5.10. Disclosure Supplements. Village will promptly supplement
or amend by written notice to TF its Disclosure Schedules delivered pursuant
hereto 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 Schedules or which is necessary to correct any
information in such Schedules or in Exhibit 2 to this Agreement which has been
rendered materially inaccurate thereby. For the purpose of determining
satisfaction of the conditions set forth in Article VI, no supplement or
amendment to such Schedules shall correct or cure any warranty which was untrue
when made, but supplements or amendments may be used to disclose subsequent
facts or events to maintain the truthfulness of any warranty.
ARTICLE VI
CLOSING CONDITIONS
6.1. Conditions of Each Party's Obligations Under this
Agreement. The respective obligations of each party under this Agreement to
consummate the Merger shall be subject to the satisfaction, or, where
permissible under applicable law, waiver at or prior to the Effective Time of
the following conditions:
(a) Approval by Shareholders. This Agreement and the
transactions contemplated hereby shall have been approved by the Shareholders.
(b) Regulatory Filings. All necessary regulatory or
governmental approvals and consents required to consummate the transactions
contemplated hereby shall have been obtained without any term or condition which
would materially impair the value of Village to TF. All conditions required to
be satisfied prior to the Effective Time by the terms of such approvals and
consents shall have been satisfied.
(c) Suits and Proceedings. No order, judgment or decree shall
be outstanding against a party hereto or a third party that would have the
effect of preventing completion of the Merger; no Legal Proceeding shall be
pending or threatened by any governmental body in which it is sought to restrain
or prohibit the Merger and no Legal Proceeding shall be pending before any court
or governmental agency in which it is sought to restrain or prohibit the Merger
or obtain other substantial monetary or other relief against one or more parties
hereto in connection with this Agreement and which TF or Village determines in
good faith, based upon the advice of their respective counsel, makes it
inadvisable to proceed with the Merger because any such Legal Proceeding has a
significant potential to be resolved in such a way as to deprive the party
electing not to proceed of any of the material benefits to it of the Merger.
6.2. Conditions to the Obligations of TF Under this Agreement.
The obligations of TF under this Agreement shall be further subject to the
satisfaction or waiver, at or prior to the Effective Time, of the following
conditions:
(a) Representations and Warranties; Performance of Obligations
of Village. The representations and warranties of Village contained in this
Agreement, other than representations and warranties which are expressly stated
to be made as of the date hereof or as of any other particular date, shall be
true and correct in all material respects on the Closing Date as though made on
and as of the Closing Date. Village shall have performed in all material
respects the agreements, covenants and obligations necessary to be performed by
it prior to the Closing Date. With respect to any representation or warranty
which as of the Closing Date has required a supplement or amendment to the
Village Disclosure Schedule to render such representation or warranty true and
correct as of the Closing Date, the representation and warranty shall be deemed
true and correct as of the Closing Date only if (i) the information contained in
the supplement or amendment to the Disclosure Schedule related to events
occurring following the execution of this Agreement and (ii) the facts disclosed
in such supplement or amendment would not either alone, or together with any
other supplements or amendments to the Village Disclosure Schedule, materially
adversely effect the representation as to
which the supplement or amendment relates.
(b) Consents. TF shall have received the written consents of
any person whose consent to the transactions contemplated hereby is required
under the applicable instrument.
(c) Certificates. Village shall have furnished TF with such
certificates of its officers or others and such other documents to evidence
fulfillment of the conditions set forth in this Section 6.2 as TF may reasonably
request.
(d) Employment Agreement Waiver. The full and unconditional
release and waiver of any rights, claims or payments, including stock options or
any other benefits, ▇▇. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ may have or be entitled to under that
certain employment agreement dated August 1, 1998, by and between Mr. Stephon
and Village.
(e) Branch Approval. Approval or non-objection by the Office
of Thrift Supervision of the location of the main office of Village as a branch
office of Third Federal Savings Bank.
(f) Lease Arrangements. The entering into of lease
arrangements with Village and Village Square Associates satisfactory to TF
regarding the assignment (conditional or otherwise) to, and/or assumption by, TF
of the Village lease pertaining to its main office.
(g) List of Payments. The receipt by Village of an
unconditional release satisfactory to TF from any further amounts owed by
Village to the parties set forth in Exhibit 2 to this Agreement.
(h) Releases. The unconditional release of any other lessors
(such as the ▇▇▇▇▇▇▇▇▇▇ Point branch office) or other parties to whom Village is
financially obligated as of the Closing Date.
6.3. Conditions to the Obligations of Village Under this
Agreement. The obligations of Village under this Agreement shall be further
subject to the satisfaction or waiver, at or prior to the Effective Time, of the
following condition:
(a) Representations and Warranties; Performance of Obligations
of TF. The representations and warranties of TF contained in this Agreement,
other than representations and warranties which are expressly stated to be made
as of the date hereof or as of any other particular date, shall be true and
correct in all material respects on the Closing Date as though made on and as of
the Closing Date. TF shall have performed in all material respects, the
agreements, covenants and obligations to be performed by it prior to the Closing
Date.
ARTICLE VII
TERMINATION, AMENDMENT AND WAIVER
7.1. Termination. This Agreement may be terminated prior to
the Effective Time, whether before or after approval of this Agreement by the
Shareholders:
(a) By mutual written consent of the parties hereto;
(b) By TF or Village if the Effective Time shall not have
occurred on or prior to the Cutoff Date unless the failure of such occurrence
shall be due to the failure of the party seeking to terminate this Agreement to
perform or observe its agreements set forth herein to be performed or observed
by such party at or before the Effective Time;
(c) By TF or Village upon written notice to the other if any
application for regulatory or governmental approval necessary to consummate the
Merger and the other transactions contemplated hereby shall have been denied or
withdrawn at the request or recommendation of the applicable regulatory agency
or governmental authority or by TF upon written notice to Village if any such
application is approved with conditions which materially impair the value of
Village to TF;
(d) By TF if (i) there shall have occurred a material adverse
change in the business, operations, assets, or financial condition of Village
from that disclosed by Village on the date of this Agreement, or (ii) there was
a material breach in any representation, warranty, covenant, agreement or
obligation of Village hereunder and such breach shall not have been remedied
within 30 days after receipt by Village of notice in writing from TF to Village
specifying the nature of such breach and requesting that it be remedied;
(e) By Village if there was a material breach in any
representation, warranty, covenant, agreement or obligation of TF hereunder and
such breach shall not have been remedied within 30 days after receipt by TF of
notice in writing from Village to TF specifying the nature of such breach and
requesting that it be remedied;
(f) By TF if any condition to Closing specified in Section 6.1
or Section 6.2 is not satisfied and is not capable of being satisfied by the
Cutoff Date unless the failure is due to the failure of TF to perform or observe
its agreements set forth herein or to be performed by TF; or
(g) By Village if any condition to Closing specified in
Section 6.1 or Section 6.3 is not satisfied and is not capable of being
satisfied by the Cutoff Date unless the failure is due to the failure of Village
to perform or observe its agreements set forth herein or to be performed by such
party.
7.2. Effect of Termination. In the event of the termination
and abandonment of this Agreement by either TF or Village pursuant to Section
7.1 hereof, this Agreement shall forthwith become void and have no effect,
without any liability on the part of any party or its officers, directors or
stockholders. Nothing contained herein, however, shall relieve any party from
any liability for any intentional or material breach of this Agreement.
7.3. Amendment. This Agreement may be amended by mutual action
taken by the parties hereto at any time before or after adoption of this
Agreement by the Shareholders. This Agreement may not be amended except by an
instrument in writing signed on behalf of TF and Village.
7.4. Extension; Waiver. The parties may, at any time prior to
the Effective Time of the Merger, (i) extend the time for the performance of any
of the obligations or other acts of the other parties hereto; (ii) waive any
inaccuracies in the representations and warranties contained herein or in any
document delivered pursuant thereto; or (iii) waive compliance with any of the
agreements or conditions contained herein. Any agreement on the part of any
party to any such extension or waiver shall be valid only if set forth in an
instrument in writing signed on behalf of such party against which the waiver is
sought to be enforced.
ARTICLE VIII
MISCELLANEOUS
8.1. Expenses. All costs and expenses incurred in connection
with this Agreement and the transactions contemplated hereby (including legal,
accounting and investment banking fees and expenses) shall be borne by the party
incurring such costs and expenses.
8.2. Notices. All notices or other communications which are
required or permitted hereunder shall be in writing and sufficient if delivered
personally or sent by telecopier with confirming copy sent promptly thereafter
by overnight courier, messenger or by registered or certified mail, postage
prepaid, as follows:
If to TF:
TF Financial Corporation
▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn.: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, President
With a copy to:
▇▇▇▇▇▇▇ Spidi & ▇▇▇▇▇, PC
▇▇▇▇ ▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇ ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇
Attn.: ▇▇▇▇ ▇. Spidi, Esq.
If to Village:
Village Financial Corporation
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Attn.: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, President
With a copy to:
▇▇▇▇▇▇▇ Spidi & ▇▇▇▇▇, PC
One Franklin Square
▇▇▇▇ ▇ ▇▇▇▇▇▇, ▇▇, ▇▇▇▇▇ ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn.: ▇▇▇▇ ▇. Spidi, Esq.
or such other addresses as shall be furnished in writing by any party, and any
such notice or communication shall be deemed to have been given as of the date
so delivered or telecopied and mailed or otherwise transmitted.
8.3. Parties in Interest. This Agreement shall be binding upon
and shall inure to the benefit of the parties hereto and their respective
successors and permitted assigns. No voluntary assignment of this Agreement may
be made except upon the written consent of the other parties hereto. No person
or entity shall be deemed a third-party beneficiary under this Agreement.
8.4. Entire Agreement. This Agreement, which includes the
Disclosure Schedules and the other documents, agreements and instruments
executed and delivered pursuant to or in connection with this Agreement,
contains the entire Agreement between the parties hereto with respect to the
transactions contemplated by this Agreement and supersedes all prior
negotiations, arrangements or understandings, written or oral, with respect
thereto.
8.5. 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.
8.6. Governing Law. This Agreement shall be governed by the
laws of the State of Delaware, without giving effect to the principles of
conflicts of laws thereof.
8.7. Descriptive Headings. The descriptive headings of this
Agreement are for convenience only and shall not control or affect the meaning
or construction of any provision of this Agreement.
8.8. No Survival. The representations and warranties set forth
in Articles III and IV hereof shall not survive the Closing, but shall expire as
of the Effective Time.
IN WITNESS WHEREOF, TF and Village have caused this Agreement
to be executed by their duly authorized officers, all as of the date first above
written.
ATTEST: TF FINANCIAL CORPORATION
By: /s/▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ By: /s/▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
---------------------------------- ---------------------------------
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Secretary President and CEO
ATTEST: VILLAGE FINANCIAL CORPORATION
By: /s/▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ By: /s/▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------------------- ---------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Secretary President and CEO