EXHIBIT 3
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____________________________
AGREEMENT AND PLAN OF MERGER
____________________________
dated as of the 3rd day of December, 1996
by and among
DIME BANCORP, INC.
FIFTH AVENUE PROPERTY CORP.
and
BFS BANKORP, INC.
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TABLE OF CONTENTS
Page
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RECITALS
A. Dime................................................................ 1
B. Merger Sub.......................................................... 1
C. BFS................................................................. 1
D. The Merger.......................................................... 1
E. The Bank Merger..................................................... 1
F. Certain Arrangements................................................ 2
G. Approvals........................................................... 2
ARTICLE I
THE MERGER; EFFECTIVE TIME; CLOSING
1.1 The Merger.......................................................... 2
1.2 Effective Time...................................................... 2
1.3 Closing............................................................. 3
ARTICLE II
GOVERNING DOCUMENTS; DIRECTORS; OFFICERS
2.1 Certificate of Incorporation........................................ 3
2.2 By-laws............................................................. 4
2.3 Directors........................................................... 4
2.4 Officers............................................................ 4
ARTICLE III
EFFECT OF MERGER ON SHARES;
MERGER CONSIDERATION; PAYMENT FOR SHARES
3.1 Effect of the Merger on Shares of BFS
Common Stock...................................................... 4
3.2 Payment for Shares.................................................. 5
3.3 Dissenters' Shares.................................................. 7
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
4.1 Representations and Warranties of BFS............................... 7
4.2 Representations and Warranties of Dime.............................. 25
Page
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ARTICLE V
COVENANTS
5.1 Conduct of Business Pending the Effective
Time............................................................... 27
5.2 Acquisition Proposals................................................ 31
5.3 Certain Policies of BFS.............................................. 32
5.4 Employees; Employee Benefit Plans.................................... 32
5.5 Access and Information............................................... 33
5.6 Options.............................................................. 35
5.7 Stockholder Approval................................................. 35
5.8 Efforts to Consummate; Proxy Statement;
Other Filings...................................................... 36
5.9 Information Supplied................................................. 37
5.10 Publicity............................................................ 37
5.11 Notification of Certain Matters...................................... 38
5.12 Indemnification; Directors' and Officers'
Insurance.......................................................... 38
5.13 Bank Merger.......................................................... 40
5.14 Forbearance by Dime.................................................. 40
5.15 Advisory Board....................................................... 40
ARTICLE VI
CONDITIONS
6.1 Conditions to Each Party's Obligation to
Effect the Merger.................................................. 41
6.2 Conditions to Obligation of Dime..................................... 42
6.3 Conditions to Obligation of BFS...................................... 42
ARTICLE VII
TERMINATION, AMENDMENT AND WAIVER
7.1 Termination.......................................................... 43
7.2 Effect of Termination................................................ 44
7.3 Termination Fee...................................................... 44
ARTICLE VIII
GENERAL PROVISIONS
8.1 Survival............................................................. 45
8.2 Expenses............................................................. 45
8.3 Modification or Amendment............................................ 45
8.4 Waiver of Conditions................................................. 46
8.5 Notices.............................................................. 46
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Page
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8.6 Certain Definitions; Interpretation.................................. 47
8.7 Entire Agreement..................................................... 49
8.8 Assignment........................................................... 49
8.9 No Third-Party Beneficiaries......................................... 49
8.10 Governing Law........................................................ 49
8.11 Counterparts......................................................... 49
ANNEXES
Annex 1 - Form of Bank Merger Agreement
Annex 2 - Form of ▇▇▇▇▇ Agreement
Annex 3 - Form of President Agreement
SCHEDULES
Schedule 4.1(c) - Subsidiaries
Schedule 4.1(d) - Stock Option Plans
Schedule 4.1(g) - Certain Agreements
Schedule 4.1(i) - Certain Loans
Schedule 4.1(j)(1) - Certain Changes
Schedule 4.1(j)(2) - Certain Liabilities
Schedule 4.1(k) - Title to Assets; Encumbrances
Schedule 4.1(l) - Certain Conflicts
Schedule 4.1(m) - Certain Litigation
Schedule 4.1(n) - Certain Tax Matters
Schedule 4.1(o) - Insurance
Schedule 4.1(q) - Employee Benefit Plans
Schedule 4.1(r) - Certain Environmental Matters
Schedule 4.1(s) - Material Agreements
Schedule 4.1(v) - Derivative Securities
Schedule 4.1(w) - Certain Controls
Schedule 5.1 - Certain Actions
Schedule 5.1(b)(16) - Certain Bonus Payments; Salary
Increases
Schedule 5.3 - Certain Policies and Reserves
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INDEX OF DEFINED TERMS
Location of
Term Definition
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1993 Agreement....................................................... 4.1(d)(3)
Acquisition Proposal................................................. 5.2
Acquisition Transaction.............................................. 7.3(b)
Agreement............................................................ Preamble
Asset Classification................................................. 4.1(i)(2)
Balance Sheet........................................................ 4.1(j)(2)
Banking Regulators................................................... 4.1(l)(7)
Bank Merger.......................................................... Recital E
Bank Merger Approvals................................................ Recital E
BFS.................................................................. Preamble
BFS Bank............................................................. Recital E
BFS Common Stock..................................................... Recital C
BFS Employees........................................................ 5.4(a)
BFS ESOP............................................................. 5.4(c)
BFS Meeting.......................................................... 5.7
BFS Options.......................................................... 5.6
BFS Stock Plans...................................................... 4.1(d)(2)
Certificate.......................................................... 3.1(a)
Certificate of Incorporation......................................... 2.1
Certificate of Merger................................................ 1.2(a)
Claim................................................................ 5.12(a)
Closing.............................................................. 1.3
Closing Date......................................................... 1.3
Compensation Plans................................................... 4.1(q)(1)
Contracts............................................................ 4.1(g)(2)
Derivative Securities................................................ 4.1(v)(1)
DGCL................................................................. 1.1
Dime................................................................. Preamble
Dime Savings......................................................... Recital E
Dissenters' Shares................................................... 3.1
Effective Time....................................................... 1.2(a)
Employees............................................................ 4.1(q)(1)
Encumbrances......................................................... 4.1(c)(3)
Environmental Law.................................................... 4.1(r)(1)
ERISA................................................................ 4.1(q)(1)
ERISA Affiliate...................................................... 4.1(q)(3)
Exception Shares..................................................... 3.1
Exchange Act......................................................... 4.1(f)
FDI Act.............................................................. Recital E
FDIC................................................................. 4.1(c)(2)
FHLB................................................................. 4.1(h)(1)
▇▇▇▇▇ Agreement...................................................... Recital F
Governing Documents.................................................. 4.1(b)
Governmental Entities................................................ 4.1(f)
Hazardous Substances................................................. 4.1(r)(1)
HOLA................................................................. Recital A
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Location of
Term Definition
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Indemnified Parties.................................................. 5.12(a)
individually or in the aggregate..................................... 8.6(a)
Insurance Amount..................................................... 5.12(c)
Internal Revenue Code................................................ 4.1(n)(4)
Lending Laws......................................................... 4.1(l)(1)
Liabilities.......................................................... 4.1(j)(2)
Loans................................................................ 4.1(i)(2)
material............................................................. 8.6(a)
Material Adverse Effect.............................................. 8.6(a)
Merger............................................................... Recital D
Merger Consideration................................................. 3.1(a)
Merger Sub........................................................... Preamble
NASD................................................................. 4.1(f)
OREO................................................................. 4.1(i)(4)
OTS.................................................................. Recital E
Paying Agent......................................................... 3.2(a)
PCBs................................................................. 4.1(r)(1)
Pension Plan......................................................... 4.1(q)(2)
Person............................................................... 8.6(a)
Plans................................................................ 4.1(q)(2)
President Agreement.................................................. Recital F
prior consultation................................................... 8.6(a)
Proxy Statement...................................................... 5.8(b)(1)
Regulatory Approvals................................................. Recital G
Reports.............................................................. 4.1(h)(2)
Representatives...................................................... 5.5
SAIF................................................................. 4.1(c)(2)
Shares............................................................... 3.1(a)
SEC.................................................................. 4.1(h)(1)
Securities Act....................................................... 4.1(h)(2)
Securities Laws...................................................... 4.1(h)(2)
significant subsidiary............................................... 7.3(b)(1)
subsidiary........................................................... 8.6(a)
Surviving Bank....................................................... Recital E
Surviving Corporation................................................ Recital D
Tax.................................................................. 4.1(n)(1)
Trigger Event........................................................ 7.3(a)
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AGREEMENT AND PLAN OF MERGER, dated as of the 3rd day of December,
1996 (this "Agreement"), by and among Dime Bancorp, Inc. ("Dime"), Fifth Avenue
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Property Corp. ("Merger Sub") and BFS Bankorp, Inc. ("BFS").
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RECITALS
A. Dime. Dime has been duly incorporated and is an existing
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corporation in good standing under the laws of the State of Delaware, with its
principal executive offices located in New York, New York. Dime is a savings
and loan holding company registered under the Home Owners' Loan Act, as amended
("HOLA").
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B. Merger Sub. Merger Sub has been duly incorporated and is an
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existing corporation in good standing under the laws of the State of Delaware,
with its principal executive offices located in New York, New York. Merger Sub
is a wholly owned subsidiary of Dime.
C. BFS. BFS has been duly incorporated and is an existing
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corporation in good standing under the laws of the State of Delaware, with its
principal executive offices located in New York, New York. As of the date
hereof, BFS has 6,000,000 authorized shares of common stock, par value $.01 per
share ("BFS Common Stock"), of which no more than 1,635,480 shares are
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outstanding as of the date hereof, and 2,000,000 authorized shares of preferred
stock, par value $.01 per share, of which no shares are issued or outstanding as
of the date hereof (no other class or series of capital stock being authorized).
BFS is a savings and loan holding company registered under HOLA.
D. The Merger. At the Effective Time (as defined in Section 1.2),
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the parties to this Agreement intend to effect the merger (the "Merger") of
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Merger Sub with and into BFS, with BFS the corporation surviving the Merger.
BFS, as the surviving corporation, is sometimes referred to in this Agreement as
the "Surviving Corporation".
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E. The Bank Merger. Immediately following the Effective Time, Dime
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and BFS intend that Dime and the Surviving Corporation will effect the merger
(the "Bank Merger") of Bankers Federal Savings FSB, a wholly owned federal
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savings bank subsidiary of BFS ("BFS Bank"), with and into The Dime Savings Bank
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of New York, FSB, a wholly owned federal savings bank subsidiary of Dime ("Dime
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Savings"). The Bank Merger shall be effected pursuant to an agreement and plan
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of merger in substantially the form of Annex 1 to this Agreement and is subject,
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among other
conditions set forth therein, to the prior approval (including any requisite
waiting periods, the "Bank Merger Approvals") of the Office of Thrift
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Supervision (the "OTS") under Sections 5(d)(3) and 18(c) of the Federal Deposit
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Insurance Act, as amended (the "FDI Act"). Dime Savings, as the surviving
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federal savings bank in the Merger, is sometimes referred to in this Agreement
as the "Surviving Bank".
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F. Certain Arrangements. As an inducement to and condition of Dime's
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willingness to enter into this agreement, (1) ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ and ▇▇▇▇▇
Investors, L.P. have entered into an agreement with Dime, substantially in the
form of Annex 2 to this Agreement (the "▇▇▇▇▇ Agreement"), and (2) ▇▇▇▇▇ ▇.
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▇▇▇▇▇▇▇, President and Chief Executive Officer of BFS, has entered into an
agreement with Dime, substantially in the form of Annex 3 to this Agreement (the
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"President Agreement").
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G. Approvals. The Boards of Directors of Dime and BFS (at meetings
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duly called and held) have determined that this Agreement, the Merger and the
other transactions contemplated hereby are in the best interests of Dime and
BFS, respectively, and their respective stockholders and have approved this
Agreement. Consummation of the Merger is subject to (1) the prior approval of
the stockholders of BFS, (2) the prior approval of the OTS under Section 10(e)
of HOLA and (3) the Bank Merger Approvals (items (2) and (3), collectively, the
"Regulatory Approvals"), among other conditions specified herein.
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NOW, THEREFORE, in consideration of the premises, and of the
representations, warranties, covenants and agreements set forth herein, the
parties hereto agree as follows:
ARTICLE I
THE MERGER; EFFECTIVE TIME; CLOSING
1.1 The Merger. Subject to the terms and conditions of this
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Agreement, at the Effective Time, Merger Sub shall merge with and into BFS, and
the separate corporate existence of Merger Sub shall thereupon cease. The
Merger shall have the effects specified in the Delaware General Corporation Law
(the "DGCL").
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1.2 Effective Time. (a) Subject to the terms and conditions of this
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Agreement, the parties to this Agreement will cause a certificate of merger to
be executed,
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acknowledged and filed with the Secretary of the State of Delaware as provided
in Section 251 of the DGCL (the "Certificate of Merger"). The Merger shall
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become effective at such time as the Certificate of Merger has been filed with
such Secretary of the State, or at such other time as may be specified in the
Certificate of Merger in accordance with applicable law. The date and time when
the Merger shall become effective is herein referred to as the "Effective Time".
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(b) The parties to this agreement will use all reasonable efforts to
cause the Effective Time to occur at a time and date specified by Dime, which
time and date shall be not later than the opening of business on the first
business day of the month next commencing after the date of satisfaction or
waiver of the last of the conditions specified in Sections 6.1(a) and (b) of
this Agreement; provided, that if such day is to occur fewer than 10 days after
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such date of satisfaction or waiver, the Effective Time shall be not later than
the opening of business on the first business day of the next succeeding month.
Notwithstanding anything to the contrary in this Section 1.2, the parties hereto
may cause the Effective Time to occur on such earlier or later day following the
satisfaction or waiver of such conditions as they may agree in writing,
consistent with the provisions of the DGCL.
1.3 Closing. The closing of the Merger (the "Closing") shall take
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place at such place within The City of New York as the parties hereto shall
agree, at 8:00 a.m. on the date when the Effective Time is to occur. The date
upon which the Closing shall occur is herein referred to as the "Closing Date".
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ARTICLE II
GOVERNING DOCUMENTS; DIRECTORS; OFFICERS
2.1 Certificate of Incorporation. By virtue of the Merger, the
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certificate of incorporation of the Surviving Corporation shall be amended and
restated to read in its entirety as the certificate of incorporation of the
Merger Sub, as in effect immediately prior to the Effective Time, except that
Article I thereof shall be further amended to replace the reference to "Fifth
Avenue Property Corp." therein with "BFS Bankorp, Inc."; such certificate of
incorporation, as so amended and restated, shall be the certificate of
incorporation of the Surviving Corporation (the "Certificate of Incorporation"),
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until duly amended in accordance with the terms thereof and the DGCL.
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2.2 By-laws. By virtue of the Merger, the by-laws of the Surviving
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Corporation shall be amended and restated to read in their entirety as the by-
laws of the Merger Sub, as in effect immediately prior to the Effective Time,
until duly amended in accordance with the terms thereof, the Certificate of
Incorporation and the DGCL.
2.3 Directors. By virtue of the Merger, the Board of Directors of
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the Surviving Corporation shall consist of the directors of the Merger Sub
serving immediately prior to the Effective Time, and such directors, together
with any additional directors as may thereafter be elected, shall hold such
office until their successors are elected and qualified in accordance with the
terms of the DGCL and the Certificate of Incorporation and the by-laws of the
Surviving Corporation.
2.4 Officers. By virtue of the Merger, the officers of the Surviving
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Corporation shall be the officers of the Merger Sub immediately prior to the
Effective Time, and such officers, together with any additional officers as may
be agreed upon prior thereto by Dime and BFS or as may be appointed thereafter,
shall serve in accordance with the terms of the DGCL and the Certificate of
Incorporation and by-laws of the Surviving Corporation.
ARTICLE III
EFFECT OF MERGER ON SHARES;
MERGER CONSIDERATION; PAYMENT FOR SHARES
3.1 Effect of the Merger on Shares of BFS Common Stock. At the
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Effective Time, by virtue of the Merger and without any action on the part of
any stockholder:
(a) Each share of BFS Common Stock issued and outstanding immediately
prior to the Effective Time (collectively, the "Shares"), other than
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Exception Shares (as defined below), shall be converted into the right to
receive, without interest, an amount in cash equal to $52.00 (the "Merger
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Consideration"); provided, that if the Effective Time occurs after June 1,
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1997, the Merger Consideration payable per Share shall be increased by an
amount equal to the product of $.01 and the number of days elapsed during
the period beginning on but excluding June 1, 1997, through and including
the date on which the Effective Time occurs, and all references herein to
the Merger Consideration shall be deemed to include such increase. All
such Shares, other than Exception Shares, shall cease to be outstanding,
shall be cancelled and retired and shall
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cease to exist, and each holder of a certificate formerly representing such
Shares (a "Certificate") shall thereafter cease to have any rights with
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respect to such Shares, except the right to receive the Merger
Consideration upon exchange of such Certificate in accordance with Section
3.2.
(b) Each Exception Share, other than Dissenters' Shares (as defined
below), shall cease to be outstanding, shall be cancelled and retired and
shall cease to exist, and no consideration shall be payable with respect
thereto.
(c) Each share of capital stock of the Merger Sub issued and
outstanding immediately prior to the Effective Time shall be converted into
a share of capital stock of the Surviving Corporation having the same par
value and denomination, and such shares shall thereafter constitute all of
the issued and outstanding shares of capital stock of the Surviving
Corporation.
For purposes of this Agreement, "Exception Shares" means (1) Shares owned, other
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than in a bona fide fiduciary capacity or in satisfaction of a debt previously
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contracted in good faith, by Dime or a subsidiary (as defined in Section 8.6) of
Dime, (2) Shares that have not been voted in favor of approval of the Merger and
with respect to which appraisal rights have been perfected in accordance with
Section 262 of the DGCL ("Dissenters' Shares") and (3) shares of BFS Common
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Stock held by BFS or a subsidiary of BFS in treasury.
3.2 Payment for Shares. (a) Appointment of Paying Agent. For the
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six-month period commencing on the Effective Time, Dime shall cause to be made
available to a paying agent (which may be a subsidiary of Dime) appointed by
Dime (the "Paying Agent") funds sufficient in the aggregate to allow the Paying
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Agent to make payments of the Merger Consideration to former holders of Shares
in accordance with Section 3.1. At the end of such six-month period, Dime shall
be entitled to cause the Paying Agent to deliver to it any of such funds
(including any interest received in respect thereof) that have not then been
disbursed to former holders of Shares. Any former holders of Shares who have
not theretofore surrendered their Certificates for payment pursuant to this
Article III shall thereafter be entitled to look exclusively to Dime, and only
as general creditors thereof, for any payment due upon surrender of their
Certificates. Notwithstanding the foregoing, neither the Paying Agent nor any
party hereto shall be liable to any former holder of Shares for any
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amount properly delivered to a public official pursuant to applicable abandoned
property, escheat or similar laws.
(b) Procedures for Surrender. Promptly after the Effective Time,
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Dime shall cause the Paying Agent to mail or deliver to each person who was,
immediately prior to the Effective Time, a holder of record of Shares (other
than Exception Shares) a form of letter of transmittal containing instructions
for use in effecting the surrender of Certificates in exchange for payment
pursuant to this Article III. Upon surrender to the Paying Agent of a
Certificate for cancellation, together with such letter of transmittal duly
executed and completed in accordance with the instructions thereto, the holder
of such Certificate shall be entitled to receive in exchange therefor a check in
the amount to which such holder is entitled pursuant to this Article III, after
giving effect to any required tax withholdings, and the Certificate so
surrendered shall forthwith be cancelled. No interest will accrue or be paid on
any amount payable upon surrender of Certificates. If any payment is to be made
to a person other than the registered holder of the Certificate surrendered
therefor, it shall be a condition of such payment that the Certificate be
properly endorsed or otherwise in proper form for transfer and that the person
requesting such payment shall pay any transfer or other taxes required by reason
of the making of such payment to a person other than the registered holder of
the Certificate surrendered (or shall establish to the satisfaction of Dime that
any such taxes have been paid or are not applicable).
(c) Lost, Stolen or Destroyed Certificates. If any Certificate shall
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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 Dime, the posting by such person of a bond in such amount as
Dime may direct as indemnity against any claim that may be made against it with
respect to such Certificate, Dime shall, in exchange for such lost, stolen or
destroyed Certificate, cause to be paid the amount deliverable in respect
thereof pursuant to this Article III.
(d) Transfers. At and after the Effective Time, there shall be no
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further registration or transfers of shares of BFS Common Stock, and the stock
ledgers of BFS shall be closed. After the Effective Time, Certificates
presented to the Surviving Corporation for transfer shall be cancelled and
exchanged for the payment to which the holder thereof is entitled pursuant to
this Article III (any certificates representing Dissenters' Shares so presented
for transfer shall be treated in accordance with the provisions of Section 3.3).
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3.3 Dissenters' Shares. The Surviving Corporation shall pay for any
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Dissenters' Shares in accordance with Section 262 of the DGCL, and the holders
thereof shall not be entitled to receive any Merger Consideration; provided,
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that if appraisal rights under Section 262 of the DGCL with respect to any
Dissenters' Shares shall have been effectively withdrawn or lost, such shares
will thereupon cease to be treated as Exception Shares and shall be converted
into the right to receive the Merger Consideration pursuant to Section 3.1(a).
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
4.1 Representations and Warranties of BFS. BFS hereby represents and
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warrants to Dime that:
(a) Recitals True. The statements of fact set forth in Recitals C
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and G of this Agreement with respect to BFS and BFS Bank are true.
(b) Organization and Qualification. Each of BFS and its subsidiaries
------------------------------
has the requisite corporate power and authority to own or lease its
material properties and material assets and to carry on its business in all
material respects as it is now being conducted and is duly qualified to do
business and in good standing in each jurisdiction where the properties
owned, leased or operated, or the business conducted, by it require such
qualification, except for any failure to be so qualified that, individually
or in the aggregate, would not have a Material Adverse Effect (as defined
in Section 8.6) on it. BFS has made available to Dime a complete and
correct copy of the Governing Documents (as defined below) of BFS and each
of its subsidiaries, each as amended to date and currently in full force
and effect. "Governing Documents" means, with respect to any organization,
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(1) those instruments that constitute its charter as filed or recorded
under the general corporation or other applicable law of the jurisdiction
of its incorporation or organization, including the articles or
certificates of its incorporation or association, any amendments thereto
and any articles or certificates of merger or consolidation, and (2) its
by-laws.
(c) Subsidiaries. (1) Schedule 4.1(c) lists all of the subsidiaries
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of BFS and its percent ownership thereof. Except as so listed or as
otherwise set forth
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on Schedule 4.1(c), none of BFS or any of its subsidiaries owns any stock,
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partnership, joint venture or limited liability company interest or any
other equity security issued by any Person (as defined in Section 8.6) (or
any security convertible into, or right to acquire, any of the preceding)
other than in a bona fide fiduciary capacity or in satisfaction of a debt
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previously contracted in good faith.
(2) BFS Bank is the only subsidiary of BFS that accepts demand
deposits. BFS Bank is a federal savings bank duly organized under the laws
of the United States, an "insured depository institution" as defined in the
FDI Act and applicable regulations thereunder and is a member of the
Savings Association Insurance Fund (the "SAIF") of the Federal Deposit
----
Insurance Corporation (the "FDIC"). All of its deposits are subject to
----
assessments payable to the SAIF.
(3) All the outstanding shares of capital stock of BFS Bank are owned
directly and of record by BFS, free and clear of all liens, pledges,
security interests, claims, proxies, preemptive or subscriptive rights or
other encumbrances or restrictions of any kind (collectively,
"Encumbrances"). All the shares of capital stock indicated as owned by BFS
------------
or a subsidiary of BFS on Schedule 4.1(c) are owned directly and of record
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by BFS or a subsidiary of BFS, free and clear of all Encumbrances.
(d) Capital Stock. (1) All of the issued and outstanding shares of
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capital stock of BFS and BFS Bank, and all of the shares of capital stock
of BFS's other subsidiaries that are owned by BFS or a subsidiary of BFS,
have been duly authorized and are validly issued, fully paid and
nonassessable.
(2) As of the date of this Agreement, there were outstanding under the
stock option and other plans identified in Schedule 4.1(d) (collectively,
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the "BFS Stock Plans"), options or rights to acquire an aggregate of
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159,220 shares of BFS Common Stock, at an average exercise price of $9.65
and on the other terms set forth in Schedule 4.1(d) (subject to adjustment
---------------
on the terms set forth in the BFS Stock Plans). As of the date of this
Agreement, BFS has no shares of BFS Common Stock reserved for issuance,
other than 17,474 shares reserved for issuance under the BFS Stock Plans,
and has no shares of preferred stock reserved for issuance.
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(3) Except as set forth in Recital C and except for shares of BFS
Common Stock to be issued after the date hereof pursuant to the options
outstanding as of the date hereof under the BFS Stock Plans, there are no
shares of capital stock of BFS authorized, issued or outstanding. There
are no preemptive rights or any outstanding subscriptions, options,
warrants, rights, convertible securities or other agreements or commitments
of BFS or any of its subsidiaries of any character relating to the issued
or unissued capital stock or other securities of BFS or any of its
subsidiaries (including those relating to the issuance, sale, purchase,
redemption, conversion, exchange, redemption, voting or transfer thereof),
other than (A) the Agreement, dated as of April 3, 1993, between BFS,
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇▇▇▇ Investors, L.P. and the other persons and entities
identified therein, as amended by Amendment No. 1 thereto (as so amended,
the "1993 Agreement"), (B) the ▇▇▇▇▇ Agreement, (C) the President Agreement
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or (D) as set forth in Section 4.1(d)(2).
(e) Corporate Authority. (1) BFS has the requisite corporate power
-------------------
and authority and has taken all corporate action necessary in order to
execute and deliver this Agreement and, subject only to the adoption by the
holders of a majority of the issued and outstanding shares of BFS Common
Stock of the agreement of merger contained in this Agreement insofar as
required by Section 251 of the DGCL, to consummate the transactions
contemplated hereby. This Agreement is a valid and legally binding
agreement of BFS enforceable in accordance with its terms, subject, as to
enforcement, to bankruptcy, insolvency, moratorium, reorganization,
fraudulent transfer and other laws affecting creditors' rights generally
and to general equitable principles.
(2) The Board of Directors of BFS (at a meeting duly called and held)
has by requisite vote authorized and approved this Agreement and the
transactions, including the Merger, contemplated hereby and directed that
the agreement of merger (as such term is used in Section 251 of the DGCL)
contained in this Agreement be submitted for consideration to, and adoption
by, its stockholders in accordance with Section 251 of the DGCL.
(3) BFS has taken all action required, if any, to exempt irrevocably
this Agreement, the Merger and the other transactions contemplated hereby
from the provisions of Article Eighth of its certificate of
-9-
incorporation and the requirements of any "business combination",
"moratorium", "control share" or any other state antitakeover statute or
regulation, including Section 203 of the DGCL.
(f) Governmental Filings. Other than the Regulatory Approvals, as
--------------------
provided in Section 1.2 and as required under the Securities and Exchange
Act of 1934, as amended (including the rules and regulations thereunder,
the "Exchange Act"), state securities and "Blue Sky" laws or the rules of
------------
the National Association of Securities Dealers, Inc. (the "NASD"), no
----
notices, reports or other filings are required to be made by BFS with, nor
are any consents, registrations, approvals, permits or authorizations
required to be obtained by BFS from, any domestic or foreign governmental
or regulatory authority, agency, court, commission or other entity
(collectively, "Governmental Entities"), in connection with the execution,
---------------------
delivery or performance of this Agreement by BFS and the consummation by
it of the Merger and the other transactions contemplated hereby, other than
those the failure of which to obtain or make (1) will not have,
individually or in the aggregate, a Material Adverse Effect on BFS and (2)
could not prevent, materially delay or materially burden, or permit any
Person to enjoin the consummation of, the transactions contemplated by this
Agreement.
(g) No Conflicts. The execution, delivery and performance of this
------------
Agreement by BFS does not and will not, and (upon receipt of the Regulatory
Approvals, the expiration of any related waiting period, compliance with
the other requirements identified in Section 4.1(f) and the adoption of
shareholders referred to in Section 4.1(e)(1)) the consummation by it of
the Merger and the other transactions contemplated hereby will not, with or
without the giving of notice, the lapse of time or both:
(1) Conflict with or violate the Governing Documents of BFS or
any subsidiary of BFS;
(2) Except as set forth on Schedule 4.1(g), constitute or result
---------------
in a breach of or default under, permit the termination of or permit
the acceleration of the performance required by, any agreement, lease,
contract, note, mortgage, indenture, arrangement or other obligation
(collectively, "Contracts") of BFS or any subsidiary
---------
-10-
of BFS (or to which their respective properties are subject);
(3) Result in the creation or imposition, pursuant to any
Contract, of any Encumbrance on any of the properties or assets of BFS
or any subsidiary of BFS; or
(4) Violate or breach any law, rule, ordinance, regulation,
judgment, decree, order, award or governmental or non-governmental
permit or license to which BFS or any subsidiary of BFS (or any of
their respective properties) is subject or permit the termination of
any of the foregoing;
except, in the cases of clauses (2) through (4), for such breaches,
------
defaults, Encumbrances, violations or terminations that, individually or in
the aggregate, would not have a Material Adverse Effect on BFS.
(h) Reports and Financial Statements. (1) With respect to periods
--------------------------------
since September 30, 1994, each of BFS and its subsidiaries has timely
filed, and has paid all fees or assessments due or payable in connection
with, all material reports and statements, together with any amendments
required to be made with respect thereto, that it was required to file with
(A) the Securities and Exchange Commission (the "SEC"), (B) the OTS, (C)
---
the FDIC, (D) the Federal Home Loan Bank of New York (the "FHLB"), (E) any
----
other applicable federal or state banking, insurance, securities, or other
regulatory authorities or (F) the NASD. Each such report or statement,
including the financial statements and exhibits thereto, complied (or will
comply, in the case of reports or statements filed after the date of this
Agreement) as to form with all applicable statutes, rules and regulations
as of the (in the case of reports or statements filed prior to the date
hereof, without giving effect to any amendments or modifications filed
after the date of this Agreement) date thereof, except for such failures to
comply that, individually or in the aggregate, would not have a Material
Adverse Effect on BFS.
(2) BFS has made available to Dime a true and complete copy of each
registration statement, offering circular, report, definitive proxy
statement or information statement under the Securities Act of 1933, as
amended (including the rules and regulations thereunder, the "Securities
----------
Act"), the Exchange Act, 12 C.F.R. Parts 563d and 563g and state securities
---
and
-11-
"Blue Sky" laws (collectively, the "Securities Laws") filed, used or
---------------
circulated by BFS or any subsidiary of BFS with respect to periods since
September 30, 1994 through the date of this Agreement, and will promptly
deliver to Dime each such document or statement filed, used or circulated
after the date hereof (collectively, the "Reports"), each in the form
-------
(including exhibits and any amendments thereto) filed with the SEC or the
OTS (or if not so filed, in the form used or circulated), including BFS's
Annual Report on Form 10-K for the fiscal year ended September 30, 1995 and
its Quarterly Reports on Form 10-Q for the periods ended December 31, 1995,
March 31, 1996 and June 30, 1996.
(3) As of their respective dates (and without giving effect to any
amendments or modifications filed after the date of this Agreement), each
of the Reports, including the financial statements, exhibits and schedules
thereto, filed, used or circulated prior to the date hereof complied (and
each of the Reports filed after the date of this Agreement, will comply) in
all material respects with the applicable Securities Laws and did not (or
in the case of Reports filed after the date of this Agreement, will not)
contain any untrue statement of a material fact or omit to state a material
fact required to be stated therein or neces sary to make the statements
made therein, in the light of the circumstances under which they were made,
not misleading.
(4) Each of BFS's consolidated balance sheets included in the Reports
fairly presents (or, in the case of Reports filed after the date of this
Agreement, will fairly present) in all material respects the consolidated
financial position of BFS and its subsidiaries as of the date of such
balance sheet and each of the consolidated income statements and statements
of changes in stockholders' equity included in the Reports fairly presents
(or, in the case of Reports filed after the date of this Agreement, will
fairly present) in all material respects the consolidated results of
operations and retained earnings, as the case may be, of BFS and its
subsidiaries for the periods set forth therein (subject, in the case of
interim statements, to normal year-end adjustments that are not material in
amount or effect), in each case in conformity with generally accepted
accounting principles consistently applied during the periods involved,
except as may be noted therein.
-12-
(i) Loans; OREO. (1) The allowance for possible loan losses shown
-----------
on the Balance Sheet (as defined below) was, and such allowance shown on
each of the consolidated balance sheets of BFS that is as of a date after
the date hereof and contained in any Report will be, adequate in all
material respects, as of the date of such balance sheet, to provide for
estimable and probable losses, net of recoveries relating to loans
previously charged off, inherent in its loan portfolio. The term "Balance
-------
Sheet" means the consolidated balance sheet of BFS at June 30, 1996
-----
included in its Quarterly Report on Form 10-Q for the period then ended, as
filed with the SEC prior to the date hereof.
(2) Schedule 4.1(i) sets forth a list, accurate and complete in all
---------------
material respects, of all Loans (as defined below), other than any such
loans, leases, extensions of credit, commitments or other assets the unpaid
principal balance of which does not exceed $100,000, of BFS and its
subsidiaries that have been criticized or classified as of September 30,
1996 by it or any such subsidiary, separated by category of classification
or criticism (the "Asset Classification"); no amounts of such Loans that
--------------------
have been classified or criticized as of the date hereof by any
representative of any Banking Regulator (as defined in Section 4.1(l)) as
"Other Loans Especially Mentioned", "Substandard", "Doubtful", "Loss" or
words of similar import are excluded from the amounts disclosed in the
Asset Classification, other than amounts that were charged off by BFS or
its subsidiaries prior to the date hereof; and no such Loans as of
September 30, 1996 that have been or, to its knowledge, should have been
classified as "non-accrual", "restructured", "90 days past due", "still
accruing and doubtful of collection" or any comparable classification are
excluded from the amounts disclosed in the Asset Classification. For
purposes of this Agreement, the term "Loans" shall mean loans, leases,
-----
extensions of credit, commitments to extend credit and other assets.
(3) Except as would not, individually or in the aggregate, have a
Material Adverse Effect on BFS, each loan or extension of credit of BFS or
any of its subsidiaries as of the date of this Agreement (A) is evidenced
by notes, agreements or other evidences of indebtedness that are true and
genuine, (B) is secured to the extent contemplated by the terms thereof,
(C) is the legal, valid and binding obligation of the obligor named
therein, enforceable in accordance with its terms, subject, as to
enforcement, to bankruptcy,
-13-
insolvency, moratorium, reorganization, fraudulent transfer and other laws
affecting creditors' rights generally and to general equity principles, and
(D) to BFS's knowledge, is not subject to any defenses that may be asserted
against BFS or any of its subsidiaries.
(4) The Other Real Estate Owned ("OREO") included in any non-
----
performing assets of BFS or its subsidiaries is carried net of reserves at
the lower of cost or market value based on current independent appraisals
or current management appraisals.
(j) Absence of Certain Events and Changes. (1) Except as set forth
-------------------------------------
in Schedule 4.1(j)(1), since June 30, 1996, BFS and its subsidiaries have
------------------
conducted their respective businesses only in the ordinary and usual course
of such businesses and there has not been any change, development or
combination of changes or developments that, individually or in the
aggregate, constitutes or has resulted in a Material Adverse Effect on BFS.
(2) BFS and its subsidiaries have no obligations or liabilities
(whether accrued, absolute, contingent, unliquidated or otherwise, whether
due or to become due, and regardless of when asserted), including for any
Tax (as defined in Section 4.1(n)) (collectively, "Liabilities"), except:
-----------
(A) as reflected on the Balance Sheet, (B) Liabilities that have arisen in
the ordinary and usual course of business after the date of such Balance
Sheet, and which will be included in the next following Report of it
provided to Dime, (C) as set forth in Schedule 4.1(j)(2) or (D) any
------------------
Liability that, either alone or when combined with all other such
Liabilities, would not have a Material Adverse Effect on BFS.
(k) Properties. Except as disclosed or reserved against in its
----------
Reports filed with the SEC prior to the date hereof or in the Balance Sheet
or as set forth in Schedule 4.1(k), BFS and its subsidiaries have good and
---------------
valid title to all of the properties and assets, tangible and intangible,
reflected on the Balance Sheet or acquired since the date thereof (other
than real property reflected on the Balance Sheet as OREO), free and clear
of all Encumbrances, except for Encumbrances that, individually or in the
aggregate, would not have a Material Adverse Effect on BFS and property
disposed of since the date of the Balance Sheet in the ordinary course of
business.
-14-
(l) Compliance with Laws. Except as set forth on Schedule 4.1(l),
-------------------- ---------------
each of BFS and its subsidiaries:
(1) Except for any failure so to comply that, individually or in
the aggregate, would not have a Material Adverse Effect on BFS, has
been since September 30, 1994 in compliance, in the conduct of its
business, with all applicable federal, state, local and foreign
statutes, laws, regulations, ordinances, rules, judgments, orders or
decrees applicable thereto or to the employees conducting such
businesses, including (A) Sections 22(h), 23A and 23B of the Federal
Reserve Act and (B) the Equal Credit Opportunity Act, the Fair Housing
Act, the Community Reinvestment Act, the Home Mortgage Disclosure Act
and all other applicable fair lending laws or other laws relating to
discrimination (clause (B), collectively, the "Lending Laws");
------------
(2) Has all permits, licenses, certificates of authority, orders
and approvals of, and has made all filings, applications and
registrations with, Governmental Entities that are required in order
to permit it to carry on its business in all material respects as it
is presently conducted and the absence of which, individually or in
the aggregate, would have a Material Adverse Effect on BFS;
(3) Has received since September 30, 1994 no notification or
communication from any Governmental Entity (including the OTS and any
other bank, insurance or securities regulatory authorities) or the
staff thereof (A) asserting that it or any of its subsidiaries is not
in compliance in any material respect with any of the statutes,
regulations or ordinances that such Governmental Entity enforces; (B)
threatening to revoke any material license, franchise, permit or
governmental authorization; or (C) threatening or contemplating
termination of FDIC deposit insurance (nor, to its knowledge, do any
grounds for any of the foregoing exist);
(4) Is not required to give prior notice to any federal banking
agency of the proposed addition of an individual to its board of
directors or the employment of an individual as a senior executive;
-15-
(5) Is not subject to the limitations on acceptance of deposits
set forth in Section 29 of the FDI Act;
(6) With respect to BFS Bank, has been assigned a rating of
"outstanding record of meeting community credit needs" or
"satisfactory record of meeting community credit needs" in its most
recent examination under Section 4 of the Community Reinvestment Act
(no other subsidiary of BFS being an "insured depositary institution"
as defined in the FDI Act); and
(7) Is not a party or subject to (nor is any officer, director,
controlling Person or property of it or any of its subsidiaries a
party or subject to) any order, decree, agreement, memorandum of
understanding or similar arrangement with, or a commitment letter or
similar submission to, any Governmental Entity charged with the
supervision or regulation of depository institutions or engaged in the
insurance of deposits, including the OTS and the FDIC (collectively,
the "Banking Regulators"), or the supervision or regulation of BFS or
------------------
any subsidiary of BFS, and neither BFS nor any subsidiary of BFS has
been advised by any such Governmental Entity that such Governmental
Entity is contemplating issuing or requesting (or is considering the
appropriateness of issuing or requesting) any such order, decree,
agreement, memorandum of understanding, commitment letter or similar
submission.
(m) Litigation. Except as set forth in Schedule 4.1(m), there are no
---------- ---------------
criminal or administrative inves tigations or hearings of, before or by any
Governmental Entity, or civil, criminal or administrative actions, suits,
claims or proceedings of, before or by any Person (including any
Governmental Entity) pending or, to BFS's knowledge, threatened or
contemplated against BFS or any of its subsidiaries (including under or
relating to any of the Lending Laws or Securities Laws or relating to any
Plan (as defined in Section 4.1(g)) of BFS or its subsidiaries) that are
reasonably likely to result in a determination that, individually or in the
aggregate, would have a Material Adverse Effect on BFS.
(n) Taxes. (1) For the purposes of this Agreement, the term "Tax"
----- ---
shall mean any tax or governmental charge, withholding obligation,
assessment, impost or
-16-
levy (including, without limitation, any income, gross receipts, deposit,
license, payroll, employee withholding, foreign or domestic withholding,
backup withholding, excise, severance, stamp, occupation, premium,
windfall profits, environmental, capital stock, franchise, disability,
real or personal property, sales, use, transfer, ad valorem, alternative or
add-on minimum or other taxes, any customs duty, unemployment insurance,
social security and workers' compensation), together with any related
liabilities, penalties, fines, additions to tax or interest (including any
penalties, fines or similar amounts related to any information return or
reporting obligations, notwithstanding that no Tax is payable if such
obligations are properly discharged), imposed by the United States or any
state, county, provincial, local or foreign government or subdivision or
agency thereof.
(2) Each of BFS and its subsidiaries has filed or will file all
material Tax returns or reports (including all Tax-related information
returns or reports) required to be filed (taking into account permissible
extensions) by them on or prior to the Effective Time. All such Tax
returns are (or, with respect to Tax Returns filed after the date of this
Agreement, will be) correct and complete in all material respects. Each of
BFS and its subsidiaries has paid or will pay in a timely manner and as
required by law all material Taxes due and payable by it or which it is
obligated to withhold from amounts owing to any employee or third party
(whether or not shown on any Tax return). All material Taxes which will be
due and payable, whether now or hereafter, for any period ending on, prior
to or including the Effective Time shall have been paid by or on behalf of
BFS and its subsidiaries or shall be reflected on the books of it and its
subsidiaries as an accrued Tax liability determined in a manner which is
consistent with past practices and the Balance Sheet.
(3) Except as set forth in Schedule 4.1(n), (A) neither BFS nor any
---------------
of its subsidiaries has waived any statute of limitations with respect to
Taxes or agreed to any extension of time with respect to Taxes or agreed to
any extension of time with respect to an assessment or deficiency for
Taxes; (B) no Tax returns or reports of BFS or its subsidiaries have to its
knowledge been audited by any Governmental Entity; and (C) there are no
material unresolved questions, material claims or material disputes claimed
or raised by any relevant taxing authority concerning the liability for
Taxes of BFS or any of its subsidiaries.
-17-
(4) Neither BFS nor any of its subsidiaries has made an election under
Section 341(f) of the Internal Revenue Code of 1986, as amended (the
"Internal Revenue Code"), for any taxable years not yet closed for statute
----------------------
of limitations purposes. Except as set forth in Schedule 4.1(n), there is
---------------
no material dispute or material claim concerning BFS or any of its
subsidiaries claimed or raised by any relevant taxing authority with
respect to any Taxes arising out of membership or participation in any
consolidated, affiliated, combined or unitary group of which it or any of
such subsidiaries was at any time a member.
(o) Insurance. (1) Each of BFS and its subsidiaries has taken all
---------
requisite action (including the making of claims and the giving of notices)
pursuant to its directors' and officers' liability insurance policy or
policies in order to preserve all material rights thereunder with respect
to all matters (other than matters arising in connection with this
Agreement and the transactions contemplated hereby) that are known to it.
Schedule 4.1(o) contains a list of all directors' and officers' liability
---------------
insurance policies maintained by BFS or its subsidiaries as of the date of
this Agreement.
(2) BFS and its subsidiaries are, and since September 30, 1994 have
been, insured for amounts management of BFS believes to be reasonable,
against such risks as companies engaged in a similar business customarily
are insured.
(3) All of the insurance policies and bonds maintained by BFS and its
subsidiaries are in full force and effect, it and its subsidiaries are not
in default thereunder, except for any defaults that could not result in the
cancellation or loss of material benefits thereunder, and all material
claims thereunder have been filed in due and timely fashion.
(p) Labor Matters. Neither BFS nor any of BFS's subsidiaries is a
-------------
party to, or is bound by, any collective bargaining agreement, contract or
other agreement or understanding with a labor union or labor organiza tion.
Neither BFS nor any of BFS's subsidiaries is the subject of any material
proceeding asserting that it has committed an unfair labor practice or
seeking to compel it to bargain with any labor organization as to wages or
conditions of employment, nor is there any strike involving BFS or any of
BFS's subsidiaries pending or, to BFS's knowledge, threatened, nor, to
-18-
BFS's knowledge, is there any activity involving employees of BFS or any of
its subsidiaries seeking to certify a collective bargaining unit or
engaging in any other organizational activity, in each case, either as of
the date of this Agreement or as would, individually or in the aggregate,
have a Material Adverse Effect on BFS.
(q) Employee Benefits. (1) Schedule 4.1(q) sets forth a list of all
----------------- ---------------
bonus, deferred compensation, pension, retirement, profit-sharing, thrift,
savings, welfare, employee stock ownership, severance, stock bonus, stock
purchase, restricted stock and stock option plans and all employment,
severance or change in control agreements that cover employees or former
employees of BFS and its subsidiaries (the "Compensation Plans"). True and
------------------
complete copies of the Compensation Plans and all other benefit plans,
contracts or arrangements covering current or former employees or directors
of it or its subsidiaries (the "Employees"), including, but not limited to,
---------
"employee benefit plans" within the meaning of Section 3(3) of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"), and all
-----
amendments thereto, have been made available to Dime.
(2) All of BFS's and its subsidiaries' employee benefit plans, within
the meaning of Section 3(3) of ERISA, other than "multiemployer plans"
within the meaning of Section 3(37) of ERISA, covering Employees
(collectively, its "Plans"), to the extent subject to ERISA, are in all
-----
material respects in compliance with ERISA. Each of the Plans which is an
"employee pension benefit plan" within the meaning of Section 3(2) of ERISA
("Pension Plan") and which is intended to be qualified under Section 401(a)
------------
of the Internal Revenue Code, has received a favorable determination letter
from the Internal Revenue Service, and to BFS's knowledge there are no
circumstances likely to result in revocation of any such favorable
determination letter. Neither BFS nor any of its subsidiaries has engaged
in a transaction with respect to any Plan that, assuming the taxable period
of such transaction expired as of the date hereof, could subject it or any
of its subsidiaries to a tax or penalty imposed by either Section 4975 of
the Internal Revenue Code or Section 502(i) of ERISA in an amount that
would be material to BFS.
(3) No material liability under Subtitle C or D of Title IV of ERISA
(other than payment of applicable
-19-
premiums) has been or is expected to be incurred by BFS or any of its
subsidiaries with respect to any ongoing, frozen or terminated "single-
employer plan", within the meaning of Section 4001(a)(15) of ERISA,
currently or formerly maintained by any of them, or the single-employer
plan of any entity which is considered one employer with it under Section
4001 of ERISA or Section 414 of the Internal Revenue Code (an "ERISA
-----
Affiliate"). BFS and its subsidiaries have not incurred and do not expect
---------
to incur any material withdrawal liability with respect to a multiemployer
plan under Subtitle E of Title IV of ERISA (regardless of whether based on
contributions of an ERISA Affiliate). No notice of a "reportable event",
within the meaning of Section 4043 of ERISA, for which the 30-day reporting
requirement has not been waived, has been required to be filed for any
Pension Plan or by any of BFS's ERISA Affiliates within the 12-month period
ending on the date hereof.
(4) All material contributions required to be made by BFS and its
subsidiaries under the terms of any of its Plans have been timely made or
have been reflected on the Balance Sheet. Neither any of the Pension Plans
nor any single-employer plan of any of BFS's ERISA Affiliates has an
"accumulated funding deficiency" (whether or not waived) within the meaning
of Section 412 of the Internal Revenue Code or Section 302 of ERISA.
Neither BFS nor its subsidiaries has provided, or is required to provide,
security to any Pension Plan or to any single-employer plan of an ERISA
Affiliate pursuant to Sections 401(a)(29) of the Internal Revenue Code.
(5) Under each of the Pension Plans which is a single-employer plan,
as of the last day of the most recent plan year ended prior to the date of
this Agreement, the actuarially determined present value of all "benefit
liabilities", within the meaning of Sec tion 4001(a)(16) of ERISA (as
determined on the basis of the actuarial assumptions contained in the
Pension Plan's most recent actuarial valuation), did not materially exceed
the then current value of the assets of such Pension Plan, and to BFS's
knowledge, there has been no materially adverse change in the financial
condition of such Pension Plan since the last day of the most recent plan
year. To BFS's knowledge, there would be no material withdrawal liability
of BFS and its subsidiaries under each Compensation Plan which is a
multiemployer plan to which it, its subsidiaries or its ERISA Affiliates
has contributed during the
-20-
preceding 12 months, if such withdrawal liability were determined as if a
"complete withdrawal", within the meaning of Section 4203 of ERISA, had
occurred as of the date hereof.
(6) Except as disclosed in its Reports or as set forth in Schedule
--------
4.1(q), neither BFS nor its subsidiaries has any obligations for retiree
------
health and life benefits under any Compensation Plan. To BFS's knowledge,
BFS or its subsidiaries may amend or terminate any Compensation Plan
providing retiree health and life benefits without incurring any liability
thereunder.
(7) Except as provided in this Agreement or as identified in Schedule
--------
4.1(q), the transactions contemplated by this Agreement will not result in
------
the vesting or acceleration of any amounts under any Compensation Plan, any
material increase in benefits under any Compensation Plan or payment of
any severance or similar compensation under any Compensation Plan.
(r) Environmental Matters. (1) For purposes of this Section 4.1(r),
---------------------
the following terms shall have the indicated meaning:
"Environmental Law" means any Federal or state law, statute,
------------------
rule, regulation, code, order, judgment, decree, injunction, common
law or agreement with any Federal or state governmental authority
relating to (A) the protection, preservation or restoration of the
environment (including air, water vapor, surface water, groundwater,
drinking water supply, surface land, subsurface land, plant and animal
life or any other natural resource), (B) human health or safety or (C)
exposure to, or the use, storage, recycling, treatment, generation,
transportation, processing, handling, labeling, production, release or
disposal of, hazardous substances, in each case as amended and now in
effect.
"Hazardous Substances" means substances that are listed,
--------------------
classified or otherwise regulated pursuant to any Environmental Law,
including any petroleum products or by-products, polychlorinated
biphenyls ("PCBs"), asbestos, lead paint or plumbing or radioactive
----
materials.
(2) To BFS's knowledge, except as identified in Schedule 4.1(r) and
---------------
except to the extent that there
-21-
would not reasonably be expected to result therefrom a Material Adverse
Effect on BFS:
(A) BFS and its subsidiaries are in compliance with all
Environmental Laws;
(B) No real property owned or operated by BFS or any of its
subsidiaries is contaminated with any Hazardous Substances;
(C) No real property formerly owned or operated by BFS or any of
its subsidiaries was contaminated with any Hazardous Substances during
the period of ownership or operation by it or such subsidiaries; and
(D) BFS and its subsidiaries are not subject to liability under
any Environmental Law for any off-site disposal or contamination of
Hazardous Substances.
(3) BFS and its subsidiaries have not received any claims or notices
concerning any, direct or indirect, potential or actual liability or loss
of BFS or any of its subsidiaries under any Environmental Law that,
individually or in the aggregate, would have a Material Adverse Effect on
BFS.
(4) To BFS's knowledge, there are no circumstances or conditions
involving BFS or its subsidiaries or their properties (including any
participation in the management of, or the holding of a security interest
in, a borrower or any other third party or property or otherwise in a role
as mortgagor, trustee or fiduciary) that could reasonably be expected to
result in any claims, liabilities, costs or restrictions on the ownership,
use or transfer of any property pursuant to any Environmental Law that, if
adversely determined, would, individually or in the aggregate, have a
Material Adverse Effect on BFS.
(5) BFS and its subsidiaries have delivered or made available to Dime
true and complete copies of all environmental reports, studies, sampling
data, permits, government filings and any other environmental information
in its possession or reasonably available to it relating to BFS or any of
its subsidiaries or any of their current or former properties or
operations.
(s) Material Agreements. (1) Except for this Agreement or as set
-------------------
forth in Schedule 4.1(s) or filed
---------------
-22-
as an exhibit to its Reports filed with the SEC prior to the date hereof,
neither BFS nor any of its subsidiaries (A) is a party to any written or
oral (w) contract for the employment of any officer, individual employee or
other person on a full-time or consulting basis, or relating to severance
or change-in-control related benefits for any such person, (x) agreement or
understanding to repurchase assets previously sold (or to indemnify or
otherwise compensate the purchaser in respect of such assets), except for
securities sold under a repurchase agreement that has been entered into in
the ordinary course of business for normal funding purposes and that
provides a repurchase date 30 days or less after the purchase date, (y)
contract or group of related contracts with the same Person for the
purchase or sale of products or services under which the undelivered
balance of such products or services has a purchase price in excess of
$50,000 for any individual contract or $50,000 for any group of related
contracts in the aggregate (including any lease that involves a remaining
aggregate balance of lease payments payable of more than $50,000 or any
group of related leases which involves a remaining aggregate balance of
lease payments payable of more than $50,000) or (z) contract that is
material to it and its subsidiaries, taken as a whole or (B) has any
commitments for capital expenditures in excess of $50,000.
(2) Except to the extent set forth in Schedule 4.1(s) and except to
---------------
an extent that would not, individually or in the aggregate, have a Material
Adverse Effect on BFS:
(A) Each of BFS and its subsidiaries has performed all
obligations required to be performed by it prior to the date hereof in
connection with the contracts or commitments set forth in Schedule
--------
4.1(s);
------
(B) None of BFS or any of its subsidiaries is in receipt of any
claim of default under any such contract or commitment or has any
present expectation or intention of not fully performing any
obligation pursuant to any such contract or commitment; and
(C) There has been no cancellation, breach or anticipated breach
by any other party to any such contract or commitment.
-23-
(3) Neither BFS nor any of its subsidiaries is subject to, or
obligated under, any agreement, arrangement or understanding that
materially restricts the ability of BFS or any of its subsidiaries, or
would materially restrict the ability of any successor of the preceding, to
engage in any and all activities permissible for federal savings banks or
savings and loan holding companies under applicable laws and regulations.
(t) Knowledge as to Conditions. As of the date of this Agreement, to
--------------------------
BFS's knowledge, there is no reason why the Regulatory Approvals and, to
the extent necessary for the consummation of the Merger, any other
approvals, authorizations, filings, registrations and notices cannot be
obtained without the imposition of any condition or restriction described
in the proviso to Section 6.1(b).
(u) Brokers and Finders. None of BFS, its subsidiaries or any of
-------------------
their officers, directors or employees has employed any broker or finder or
incurred any liability for any brokerage fees, commissions or finder's fees
in connection with the transactions contemplated hereby, except that BFS
------
has retained ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇, Inc. as its financial advisor
pursuant to a letter agreement BFS has made available to Dime, as amended
to date and currently in full force and effect.
(v) Interest Rate Risk Management Instruments; Derivatives; Certain
---------------------------------------------------------------
Other Securities. (1) Schedule 4.1(v) sets forth a true and complete list
---------------- ---------------
as of the date of this Agreement of (A) all interest rate swaps, caps,
floors, option agreements and other interest rate risk management
arrangements and other instruments generally known as "derivatives" to
which BFS or any of its subsidiaries is a party or to which any of their
properties or assets may be subject and (B) all securities owned by BFS or
its subsidiaries that are generally known as "structured notes", "high risk
mortgage derivatives", "capped floating rate notes" or "capped floating
rate mortgage derivatives" (instruments or agreements of the type referred
to in clauses (A) and (B), collectively, "Derivative Securities").
---------------------
(2) Except as would not, individually or in the aggregate, have a
Material Adverse Effect on BFS:
(A) All Derivative Securities to which BFS or any of its
subsidiaries is a party or to which
-24-
any of their properties or assets may be subject were entered into in
the ordinary course of business and, to its knowledge, in accordance
with prudent banking practice and applicable rules, regulations and
policies of the Banking Regulators and with counterparties believed to
be financially responsible at the time;
(B) All such Derivative Securities are legal, valid and binding
obligations enforceable in accordance with their terms (except, as to
enforceability, as may be limited by bankruptcy, insolvency,
moratorium, reorganization or similar laws affecting the rights of
creditors generally, and the availability of equitable remedies) and
are in full force and effect; and
(C) BFS and each of its subsidiaries has duly performed in all
material respects all of its obligations thereunder, and, to its
knowledge, there are no breaches, violations or defaults or
allegations or assertions of such by any party thereunder.
(w) Accounting Controls. Each of BFS and its subsidiaries has
-------------------
devised and maintained systems of internal accounting controls sufficient
to provide reasonable assurances, in the reasonable judgment of the Board
of Directors of BFS, that (1) all material transactions are executed in
accordance with management's general or specific authorization (except as
set forth in Schedule 4.1(w)); (2) all material transactions are recorded
---------------
as necessary to permit the preparation of financial statements in
conformity with generally accepted accounting principles consistently
applied; (3) access to the material property and assets of BFS and its
subsidiaries is permitted only in accordance with management's general or
specific authorization; and (4) the recorded accountability for items is
compared with the actual levels at reasonable intervals and appropriate
action is taken with respect to any differences.
4.2 Representations and Warranties of Dime. Dime hereby represents
--------------------------------------
and warrants to BFS that:
(a) Recitals True. The statements of fact set forth in Recitals A, B
-------------
and G of this Agreement with respect to Dime and Merger Sub are true.
-25-
(b) Organization and Qualification. Each of Dime and Merger Sub has
------------------------------
the requisite corporate power and authority to own or lease its material
properties and material assets and to carry on its business in all material
respects as it is now being conducted and is duly qualified to do business
and in good standing in each jurisdiction where the properties owned,
leased or operated, or the business conducted, by it require such
qualification, except for any failure to be so qualified that,
individually or in the aggregate, would not have a Material Adverse Effect
on it.
(c) Corporate Authority. Each of Dime and Merger Sub has the
-------------------
requisite corporate power and authority and has taken all corporate action
necessary in order to execute and deliver this Agreement and to consummate
the transactions contemplated hereby. This Agreement is a valid and
legally binding agreement of each of Dime and Merger Sub enforceable in
accordance with its terms, subject, as to enforcement, to bankruptcy,
insolvency, moratorium, reorganization, fraudulent transfer and other laws
affecting creditors' rights generally and to general equitable principles.
(d) Governmental Filings. Other than the Regulatory Approvals, as
---------------------
provided in Section 1.2 and as required under the Exchange Act, the state
securities and "Blue Sky" laws or the rules of the NASD, no notices,
reports or other filings are required to be made by Dime or Merger Sub
with, nor are any consents, registrations, approvals, permits or
authorizations required to be obtained by Dime or Merger Sub from, any
Governmental Entity in connection with the execution, delivery or
performance of this Agreement by Dime or the Merger Sub and the
consummation by them of the Merger and the other transactions contemplated
hereby, other than those the failure of which to obtain or make could not
prevent, materially delay, or materially burden, or permit any Person to
enjoin the consummation of, the transactions contemplated by this
Agreement.
(e) No Conflicts. The execution, delivery and performance of this
------------
Agreement by Dime and Merger Sub does not and will not, and (upon receipt
of the Regulatory Approvals, the expiration of any related waiting period
and compliance with the other requirements of Section 4.2(d)) the
consummation by them of the Merger and the other transactions contemplated
hereby, will not, with or without the giving of notice, the lapse of time
or both:
-26-
(1) Conflict with or violate the Governing Documents of Dime or
Merger Sub or any other subsidiary of Dime;
(2) Constitute or result in a breach of or default under, permit
the termination of or acceleration of the performance required by, any
Contracts of Dime or Merger Sub or any other subsidiary of Dime; or
(3) Violate or breach any law, rule, ordinance, regulation,
judgment, decree, order, award or governmental or non-governmental
permit or license to which Dime or Merger Sub or any other subsidiary
of Dime is subject;
except, in the cases of clauses (2) and (3), for such breaches, default or
------
violations that, individually or in the aggregate, would not have a
Material Adverse Effect on Dime.
(f) Knowledge as to Conditions. As of the date of this Agreement, to
--------------------------
Dime's knowledge, there is no reason why the Regulatory Approvals and, to
the extent necessary for consummation of the Merger, any other approvals,
authorizations, filings, registrations and notices cannot be obtained
without the imposition of any condition or restriction described in the
proviso to Section 6.1(b).
(g) Financing. Dime has available, or at the Effective Time will
---------
have available, sufficient funds, available lines of credit or other
sources of immediately available funds sufficient to enable it to
consummate the Merger on the terms and conditions of this Agreement. Dime
and Merger Sub's obligations hereunder are not subject to any conditions
regarding Dime's ability to obtain financing for the consummation of the
transactions contemplated herein.
ARTICLE V
COVENANTS
5.1 Conduct of Business Pending the Effective Time. BFS agrees as to
----------------------------------------------
itself and its subsidiaries that, from and after the date hereof until the
Effective Time, except insofar as Dime shall otherwise consent in writing
(which consent shall not be unreasonably withheld) or except
-27-
as otherwise expressly contemplated by this Agreement or set forth in Schedule
--------
5.1:
---
(a) Conduct of Business in the Ordinary and Usual Course. BFS and
----------------------------------------------------
its subsidiaries will conduct their respective businesses (including the
underwriting and making of any loan or advance) only in the ordinary and
usual course, and, to the extent consistent therewith, BFS and its
subsidiaries will use all reasonable efforts to preserve intact their
business organizations and assets and maintain their rights, franchises and
existing relations with customers, suppliers, employees and business
associates.
(b) Forbearance. BFS will not, and will cause each of its
-----------
subsidiaries not to:
(1) Declare, set aside or pay any dividend payable in cash, stock or
other property with respect to any of its capital stock, other than
dividends by direct or indirect wholly owned subsidiaries of BFS;
(2) Repurchase, redeem or otherwise acquire, directly or indirectly,
any shares of its capital stock;
(3) Grant, issue, sell, pledge, dispose of or permit any Encumbrance
to be placed on (A) any shares of its capital stock of any class, other
than issuance of BFS Common Stock pursuant to the BFS Stock Plans, (B)
securities convertible or exchangeable for such shares of capital stock,
(C) stock appreciation rights with respect to such shares or (D) options,
warrants, calls, commitments or rights of any kind to acquire any of such
shares;
(4) Effect any recapitalization, reclassifica tion, stock split or
like exchange in capitalization;
(5) Enter into, or take any action to cause any stockholders of BFS
to enter into, any agreement, understanding or commitment relating to the
right of stockholders of BFS to vote any shares of its capital stock,
except for the 1993 Agreement or as set forth in Recital F, or cooperate in
any formation of any voting trust relating to such shares;
(6) Amend its Governing Documents;
(7) Merge or consolidate with, or, except in satisfaction of a debt
previously contracted in good
-28-
faith, make any material acquisition of or investment in the assets, stock
or securities (including partnership, joint venture or limited liability
company interests) of, any other Person;
(8) Make any change in accounting principles or methods from those
currently employed, except as required by generally accepted accounting
principles or applicable regulatory requirements, as concurred in by BFS's
independent auditors;
(9) Sell, transfer, lease, securitize, swap, license, pledge or
otherwise dispose or permit any Encumbrance to be placed on any material
amount of its properties or assets (including loans, advances or securities
constituting assets of it), except in the ordinary course of business
consistent with past practice (including FHLB advances in the ordinary
course of business consistent with past practice);
(10) Other than with respect to loan transactions, enter into,
accelerate, terminate or cancel any contract, lease or license relating to
amounts in excess of $50,000 for any individual contract, lease or license
or $50,000 for any group of related contracts, leases or licenses other
than entering into such contracts, leases or licenses that can be
terminated without penalty on notice of 90 days or less;
(11) Amend, modify, waive or fail to enforce any provision of, or its
rights under, the 1993 Agreement;
(12) Incur any material amount of indebtedness, other than deposits
taken and other indebtedness incurred in the ordinary course of business
consistent with past practice (including FHLB advances in the ordinary
course of business consistent with past practice);
(13) Other than in the ordinary course of business consistent with
past practice, (A) assume, guarantee, endorse or otherwise as an
accommodation become responsible for the obligations of any other Person or
(B) cancel, release, assign or modify any material amount of indebtedness
of any other Person;
(14) Make any loan or advance (A) in excess of $250,000 or (B) other
than in the ordinary course of business consistent with past practice;
-29-
(15) Authorize or make any capital expenditures, other than in the
ordinary course of business consistent with past practice and other than
capital expenditures for replacements and repairs in amounts less than
$50,000 in the aggregate;
(16) Enter into or modify any employment, severance or similar
agreements or arrangements with, or grant any bonuses, wage, salary, fee or
compensation increases, increases in fringe benefits or severance or
termination pay to, or promote, any director, officer, employee, group of
employees or consultant or hire any employee, except that it may (A) hire
------ ----
"at will" employees with an annual salary of less than $50,000 as
replacements for terminating employees and (B) grant compensation
increases, bonuses or promotions in the ordinary course of business and
consistent with past practice to non-executive employees, provided that
--------
such grants do not result in increases in compensation that exceed 3% per
annum on average, and (C) grant those salary increases, year-end bonuses
and retention bonuses set forth on Schedule 5.1(b)(16);
-------------------
(17) Release or otherwise terminate the employ ment of any employee
of it, except in the ordinary course of business and consistent with past
practice;
(18) Establish, adopt or enter into any new, or amend any existing,
or extend coverage of or waive eligibility requirements with respect to
any, Compensation Plans (including profit sharing, bonus, director and
officer incentive compensation, severance, retirement, medical,
hospitalization, life or other insurance plans, agreements and
commitments), except in each case for amendments or modifications necessary
to comply with applicable law (after prior consultation with Dime);
(19) Knowingly take any action that would materially and adversely
affect the ability of any party hereto to obtain, on or before July 31,
1997, any necessary approvals, consents or waivers of Governmental Entities
required for the transactions contemplated hereby without imposition of a
condition or restriction of the type referred to in the proviso to Section
6.1(b) or perform its obligations under this Agreement or that is
reasonably likely, individually or in the aggregate, to have a Material
Adverse Effect on it; or
-30-
(20) Authorize or enter into an agreement to take any of the
foregoing actions.
(c) Certain Settlements. Without prior consultation with Dime,
-------------------
neither BFS nor any of its subsidiaries shall enter into any settlement or
similar agreement (other than such a settlement or agreement involving no
admission of wrongdoing and requiring only the payment of immaterial
monetary damages) with respect to, or take any other significant action
with respect to the conduct of, any action, suit, proceeding, order or
investigation against or affecting BFS or any of its subsidiaries that is
set forth in Schedule 4.1(m) or to which BFS or any of such subsidiaries
---------------
becomes a party after the date of this Agreement (other than any action,
suit, proceeding or order that is related solely to the collection of any
loan or other extension of credit in default or to the realization on any
related collateral).
5.2 Acquisition Proposals. BFS agrees that neither BFS nor any of
---------------------
its subsidiaries shall, and that BFS and its subsidiaries shall direct and use
all reasonable efforts to cause their respective directors, officers, employees,
agents and representatives (including, without limitation, any investment
banker, attorney or accountant retained by it or any of its subsidiaries) not
to, initiate, solicit or encourage, directly or indirectly, any inquiries or the
making or implementation of any proposal or offer with respect to a merger,
acquisition, consolidation or similar transaction involving, or any purchase of
all or any substantial part of the assets or any equity securities of, BFS or
any of its subsidiaries (any such proposal or offer being hereinafter referred
to as an "Acquisition Proposal") or engage in any discussions or negotiations
--------------------
with, or provide any confidential information or data to, any Person relating to
an Acquisition Proposal; provided, that, if BFS is not otherwise in violation of
--------
this Section 5.2, the Board of Directors of BFS may furnish or cause to be
furnished information and may participate in such discussions and negotiations
directly or through its representatives if such Board of Directors, after having
consulted with and considered the written advice of outside counsel, has
determined that the failure to provide such information or participate in such
negotiations and discussions would constitute a breach of their fiduciary duties
under Delaware law. If any such inquiries or proposals are received by, any
such information is requested from, or any such negotiations or discussions are
sought to be initiated or continued with, BFS or any of its subsidiaries, BFS
will immediately notify Dime. BFS will immediately cease and cause to be
terminated
-31-
any existing activities, discussions or negotiations with any parties conducted
heretofore with respect to any Acquisition Proposal, will enforce any
confidentiality agreements and will take the necessary steps to inform the
appropriate individuals or entities referred to in the first sentence of this
Section 5.2 of the obligations undertaken in this Section 5.2.
5.3 Certain Policies of BFS. Subject to Schedule 5.3 and upon the
----------------------- ------------
request of Dime, BFS shall, consistent with generally accepted accounting
principles and regulatory accounting principles, use its best efforts to record
any accounting adjustments required to conform the loan, litigation and other
reserve and real estate valuation policies and practices (including loan
classifications and levels of reserves) of BFS and its subsidiaries so as to
reflect consistently on a mutually satisfactory basis the policies and practices
of Dime; provided, however, that BFS shall not be obligated to record any such
-------- -------
accounting adjustments pursuant to this Section 5.3 (A) unless and until BFS
shall be satisfied that the conditions to the obligation of the parties to
consummate the Merger will be satisfied or waived on or before the Effective
Time, and (B) in no event until the day prior to the Effective Date. BFS's
representations, warranties (including Section 4.1(i)(1)) and covenants
contained in this Agreement shall not be deemed to be untrue or breached in any
respect for any purpose as a consequence of any modifications or changes
undertaken solely on account of this Section 5.3.
5.4 Employees; Employee Benefit Plans. (a) Dime agrees that, as of
---------------------------------
the Effective Time, the employees of BFS and its subsidiaries at such time ("BFS
---
Employees") shall be employed upon terms and conditions (including retiree and
---------
other benefits) no less favorable than those generally afforded to other
employees of Dime and its subsidiaries holding similar positions; provided, that
--------
service with BFS or its subsidiaries or any predecessor thereto prior to the
Effective Time shall be treated as service with Dime or its subsidiaries for
purposes of any length-of-service requirements, waiting periods, eligibility
periods, vesting periods or differential benefits based upon length-of-service
requirements (but not for pension benefit accrual purposes), including length-
of-service requirements used to determine the number of weeks of vacation to
which a BFS Employee is entitled under the relevant Dime policy and to satisfy
any waiting periods concerning "preexisting conditions" and any "copayment" or
deductible requirements); and provided, further, that nothing herein shall (1)
-------- -------
prevent the amendment or termination of any Compensation Plan of BFS in
accordance with its terms, (2) require the Surviving
-32-
Corporation to maintain an employee stock ownership plan or to provide or permit
investment in the securities of BFS or the Surviving Corporation or (3) limit or
restrict the ability of the Surviving Corporation to terminate the employment of
any officer or employee.
(b) Dime agrees to honor in accordance with their terms all
employment, severance and termination contracts, agreements and arrangements and
employee benefit plans set forth in Schedule 4.1(q); provided, that the
--------------- --------
foregoing shall not prevent the Surviving Corporation from amending or
terminating any such plan, contract, agreement, arrangement or plan in
accordance with its terms. It is Dime's present intention that current
recipients of retiree medical benefits from BFS and its subsidiaries will
receive retiree medical benefits no less favorable than those generally afforded
to employees of Dime and its subsidiaries holding similar positions; provided,
--------
that service with BFS or its subsidiaries or any predecessor thereto prior to
the Effective Time shall be treated as service with Dime or its subsidiaries;
and provided, further, that such recipients shall not be required to make any
-------- -------
contribution in respect of such benefits unless required in good faith by Dime
for reasons related to the accounting by Dime for postemployment benefits other
than pensions under Statement of Financial Accounting Standards No. 106 (or any
amendment or successor thereto).
(c) BFS shall take such action as is necessary to terminate the BFS
Employee Stock Ownership Plan ("BFS ESOP") effective as of the Effective Time.
--------
Subject to applicable laws and regulations, prior to the Effective Time, BFS
shall cause the BFS ESOP to be amended to provide that, in the event of the
termination of the BFS ESOP, participants in the BFS ESOP shall be entitled to
rollover the amounts then credited to their respective accounts under the BFS
ESOP to the 401(k) Savings Plan maintained by Dime. Dime shall use reasonable
efforts to have the 401(k) Savings Plan accept such rollovers in the form of
cash or cash equivalents.
5.5 Access and Information. (a) Upon reasonable notice and subject
----------------------
to applicable laws relating to the exchange of information, BFS agrees to (and
shall cause each of its subsidiaries to) afford Dime's officers, employees,
counsel, accountants and other authorized representatives (collectively, its
"Representatives") reasonable access (together with the right to copy), during
----------------
normal business hours throughout the period until the Closing Date, to its
books, properties, contracts and records (including loan and credit files, tax
returns and work papers of independent auditors) and, during such period, shall
(and shall cause
-33-
each of its subsidiaries to) furnish to Dime and its Representatives all
information concerning its business, property and personnel as may reasonably be
requested and instruct its officers, employees, counsel and accountants to be
available for, and respond to reasonable questions of, Dime and its
Representatives at reasonable hours and with reasonable notice and to cooperate
with Dime in planning for the integration of the business of BFS and its
subsidiaries with the business of Dime and its subsidiaries. Neither BFS nor
any of its subsidiaries shall be required to provide access to or to disclose
information where such access or disclosure would violate or prejudice the
rights of BFS's customers, jeopardize the attorney-client privilege of the
institution in possession or control of such information or contravene any law,
rule, regulation, order, judgment, decree, fiduciary duty or binding agreement
entered into prior to the date of this Agreement. The parties hereto will make
appropriate substitute disclosure arrangements under circumstances in which the
restrictions of the preceding sentence apply.
(b) Each of Dime and BFS agree that it and its subsidiaries will not,
and will cause their Representatives not to, use any nonpublic information
obtained from the other party in connection with or relating to this Agreement,
the investigation leading up to its execution or the transactions contemplated
hereby (including by Dime pursuant to Section 5.5(a)) for any purpose unrelated
to the consummation of the transactions contemplated by this Agreement.
Pending consummation of the transactions herein contem plated, each of Dime and
BFS agrees that it and each of its subsidiaries will keep confidential, and will
cause its Representatives to keep confidential, all nonpublic information and
documents so obtained from the other party; provided, that the obligation to
--------
keep such information or documents confidential shall not apply to (1) any
information or document that (A) was already in Dime or BFS's possession prior
to the disclosure thereof by the other party, (B) was then generally known to
the public, (C) became known to the public through no fault of Dime or BFS, as
the case may be, or (D) was disclosed to Dime or BFS, as the case may be, by a
third party not bound by an obligation of confidentiality or (2) disclosures
required by law, governmental or regulatory authority. Upon any termination of
this Agreement, each party will collect and deliver to the other party all
nonpublic documents obtained by any of it, its subsidiaries or any of their
Representatives and then in their possession (other than documents of the type
described in the proviso to the preceding sentence) and any copies thereof and
destroy or cause to be destroyed all notes, memoranda or other documents in
-34-
the possession of it, its subsidiaries or their Representatives containing or
reflecting any nonpublic information obtained from the other party (other than
information of the type described in the proviso to the preceding sentence),
except to the extent that any such information may be embodied in minutes of the
meetings of such party's Board of Directors or in filings, reports or
submissions to or with any Governmental Entity. Promptly after any such
termination, each of Dime and BFS shall deliver to the other a certificate
signed on its behalf by a senior executive officer to the effect of its
compliance with the agreements of it set forth in the preceding sentence.
(c) Without in any way limiting the provisions of Section 5.5(a), BFS
shall provide to Dime within 30 days of the end of each calendar month between
the date hereof and the Closing Date (1) consolidated financial statements
(including a balance sheet and income statement) as of, and for the period
ended, on such month-end, in the form in which such statements are prepared for
use by BFS's management, and (2) such other information customarily prepared by
BFS as may be reasonably requested by Dime.
(d) No investigation, whether pursuant to this Section 5.5 or
otherwise, shall affect or be deemed to modify any representation or warranty
herein.
5.6 Options. BFS shall terminate at its sole cost and expense the
-------
BFS Stock Plans listed on Schedule 4.1(d), effective as of the Effective Time;
---------------
provided, however, that immediately prior to the Effective Time, BFS shall take
-------- -------
such action as may be necessary so that all options to purchase BFS Common Stock
granted by BFS under the BFS Stock Plans and that are outstanding at the
Effective Time (collectively, the "BFS Options"), whether or not then
-----------
exercisable, shall be cancelled by BFS and shall thereafter represent the right
to receive (immediately prior to the Effective Time) in lieu of each share of
BFS Common Stock that would otherwise have been issuable upon exercise thereof,
consideration in an amount computed by multiplying (a) the excess, if any, of
the Merger Consideration over the per share exercise price under such BFS Option
by (b) the number of shares subject to such BFS Option.
5.7 Stockholder Approval. BFS agrees to take, subject to and in
--------------------
accordance with applicable law and its Governing Documents, all action necessary
to convene a meeting of holders of BFS Common Stock (the "BFS Meeting") as
-----------
promptly as practicable to consider and vote upon the adoption of the agreement
of merger (within the meaning of
-35-
Section 251 of the DGCL) contained in this Agreement. Subject to the next
sentence, the Board of Directors of BFS will recommend such approval, and BFS
will take all reasonable lawful action to solicit such approval by its
stockholders. The Board of Directors of BFS may fail to make such a
recommendation, or withdraw, modify or change any such recommendation only if
such Board of Directors, after having consulted with and considered the written
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 constitute a breach of the fiduciary duties of such direc
tors under Delaware law.
5.8 Efforts to Consummate; Proxy Statement; Other Filings.
-----------------------------------------------------
(a) Subject to the terms and conditions of this Agreement and
applicable law, each of Dime and BFS shall use all reasonable efforts to take,
or cause to be taken, all actions, and to do, or cause to be done, all things
necessary, proper or advisable to consummate and make effective the Merger and
the other transactions contemplated by this Agreement as soon as practicable,
including such actions or things as the other party may reasonably request in
order to cause any of the conditions to such party's obligation to consummate
the Merger specified in Article VI of this Agreement to be fully satisfied.
(b) Without limiting the generality of Section 5.8(a):
(1) BFS shall prepare as promptly as practicable after the date
hereof a proxy statement and the other proxy solicitation materials
constituting a part thereof or, in the alternative, an information
statement (as determined by mutual agreement of BFS and Dime) for the BFS
Meeting (collectively, the "Proxy Statement"). BFS agrees to use all
---------------
reasonable efforts to cause the Proxy Statement to be mailed to holders of
record of BFS Common Stock as promptly as practicable after the date
hereof.
(2) Dime and BFS agree to cooperate and, subject to the terms and
conditions set forth in this Agreement, use reasonable efforts to (A)
prepare and file all necessary documentation, (B) effect all necessary
applications, notices, petitions, filings and other documents, (C) obtain
all necessary permits, consents, orders, approvals and authorizations of,
or any exemption by, all third parties and Governmental Entities, including
the Regulatory Approvals, to make
-36-
effective the Merger and the other transactions contemplated by this
Agreement as soon as practicable.
(3) Each of Dime and BFS agrees, upon request, to furnish the other
with all information concerning itself, its subsidiaries, directors,
officers and stockholders and such other matters as may be reasonably
necessary or advisable in connection with the Proxy Statement or any other
statement, filing, notice or application made by or on behalf of such other
party or any of its subsidiaries to any Governmental Entity in connection
with the Merger and the other transactions contemplated by this Agreement.
5.9 Information Supplied. Each of Dime and BFS agrees that none of
--------------------
the information supplied or to be supplied by it for inclusion or incorporation
by reference in the Proxy Statement and any amendment or supplement thereto
will, at the date of mailing to the stockholders of BFS and at the time of the
BFS Meeting, contain any state ment which, in the light of the circumstances
under which such statement is made, will be false or misleading with respect to
any material fact, or which will omit to state any material fact necessary in
order to make the statements therein not false or misleading or necessary to
correct any earlier statement in the Proxy Statement or any amendment or
supplement thereto which has become false or misleading. The Proxy Statement
shall not be filed with the SEC or used, and, prior to the termination of this
Agreement, no amendment or supplement to the Proxy Statement shall be used or
so filed, by BFS without the prior consent of Dime and its counsel, which
consent shall not be unreasonably withheld, delayed or conditioned (including in
a manner that would interfere with the taking by the Board of Directors of BFS
of the actions contemplated by the third sentence of Section 5.7).
5.10 Publicity. Dime and BFS shall consult with each other (a) prior
---------
to issuing any press releases or otherwise making public statements with respect
to the transactions contemplated hereby, (b) prior to making any filings with
any Governmental Entity (including any self-regulatory organization) with
respect to such transactions and (c) prior to issuing any press releases or
otherwise making public statements with respect to significant regulatory
developments. In any press release or other public statement, each of Dime and
BFS warrants that neither it nor any of its authorized officers has made or will
make, regarding the Merger or any Acquisition Proposal, any untrue statement of
a material fact or omit to state a material fact necessary in order to make the
statements made, in the
-37-
light of the circumstances under which they were made, not misleading.
5.11 Notification of Certain Matters. Each of Dime and BFS will give
-------------------------------
prompt notice to the other upon its discovery of the occurrence or failure to
occur of any fact, event or circumstance that would, individually or in the
aggregate, result in (a) a Material Adverse Effect on it, (b) any of the
representations or warranties of such party contained herein being untrue or
inaccurate when made, at the Effective Time or at any time prior to the
Effective Time, (c) a material breach of any of the covenants or agreements of
such party contained herein or (d) the preclusion of the satisfaction of any
condition to consummation set forth in Article VI. Each of Dime and BFS will
give prompt notice to the other of any notice or other communication from any
Person alleging that the consent of such Person is or may be required in
connection with the transactions contemplated by this Agreement.
5.12 Indemnification; Directors' and Officers' Insurance. (a) From
---------------------------------------------------
and after the Effective Time through the sixth anniversary thereof, Dime agrees
to indemnify, defend and hold harmless each present and former director and
officer of BFS and its subsidiaries determined as of the Effective Time (the
"Indemnified Parties") against all losses, claims, damages, costs, expenses
--------------------
(including reasonable attorneys' fees), liabilities or judgments of or in
connection with any claim, action, suit, proceeding or investigation arising out
of matters existing or occurring at or prior to the Effective Time (a "Claim")
-----
in which an Indemnified Party is, or is threatened to be made, a party or a
witness based 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 BFS or any of its
subsidiaries, regardless of whether such Claim is asserted or claimed prior to,
at or after the Effective Time, to the fullest extent to which directors and
officers of BFS are entitled under Delaware or other applicable law as in effect
on the date hereof (and Dime shall pay expenses in advance of the final
disposition of any such action or proceeding to each Indemnified Party to the
extent permissible to a Delaware corporation under Delaware law as in effect on
the date hereof; provided, that the person to whom expenses are advanced
--------
provides an undertaking to repay such expenses if it is ultimately determined
that such person is not entitled to indemnification). All rights to
indemnification in respect of a Claim asserted or made within the period
described in the preceding sentence shall continue until the final disposition
of such Claim.
-38-
(b) Any Indemnified Party wishing to claim indemnification under
Section 5.12(a), upon learning of any Claim, shall promptly notify Dime, but the
failure to so notify shall not relieve Dime of any liability it may have to such
Indemnified Party except to the extent that such failure materially prejudices
Dime. In the event of any Claim, (1) Dime shall have the right to assume the
defense thereof and shall not be liable to such Indemnified Parties for any
legal expenses of other counsel or any other expenses subsequently incurred by
such Indemnified Parties in connection with the defense thereof, except that, if
Dime elects not to assume such defense or counsel for the Indemnified Parties
advises that there are issues which raise conflicts of interest between Dime and
the Indemnified Parties, the Indemnified Parties may retain counsel satisfactory
to them, and Dime shall pay all reasonable fees and expenses of such counsel for
the Indemnified Parties promptly as statements therefor are received, (2) the
Indemnified Parties will cooperate in the defense of any such Claim and (3) Dime
shall not be liable for any settlement effected without its prior written
consent (which consent shall not unreasonably be withheld).
(c) Dime shall use all reasonable efforts to cause the persons
serving as officers and directors of BFS immediately prior to the Effective Time
to be covered for a period of three years from the Effective Time by the
directors' and officers' liability insurance policy maintained by BFS (provided
that Dime may substitute therefor policies of at least the same coverage and
amounts containing terms and conditions which are not less advantageous than
such policy) with respect to acts or omissions occurring prior to the Effective
Time which were committed by such officers and directors in their capacity as
such; provided, however, that in no event shall Dime be required to expend more
-------- -------
than 200% of the current amount expended by BFS (the "Insurance Amount") to
----------------
maintain or procure insurance coverage pursuant hereto; and provided, further,
-------- -------
that if Dime is unable to maintain or obtain the insurance called for by this
Section 5.12(c), Dime shall use all reasonable efforts to obtain as much
comparable insurance as is available for the Insurance Amount.
(d) In the event Dime or any of is successors or assigns (1)
consolidates with or merges into any other Person and shall not continue or
survive such consolidation or merger, or (2) transfers or conveys all or
substantially all of its properties and assets to any Person, then, and in each
such case, to the extent necessary, proper provision shall be made so that the
successors and assigns of Dime assume the obligations set forth in this Section
5.12.
-39-
(e) The provisions of this Section 5.12 are intended to be for the
benefit of, and shall be enforceable by, each Indemnified Party and his or her
heirs and representatives.
5.13 Bank Merger. Unless otherwise agreed by the parties, Dime and
-----------
BFS will take all action necessary and appropriate to cause the Bank Merger to
occur immediately after or, if the Bank Merger cannot be effected immediately
after, as promptly as practicable after the Effective Time. Notwithstanding
anything to the contrary in this Section 5.14, Dime and BFS may cause the Bank
Merger to occur on such later date as may be agreed in writing.
5.14 Forbearance by Dime. Dime agrees that, from and after the date
-------------------
hereof until the Effective Time, except as otherwise expressly contemplated by
this Agreement, Dime will not, and will cause each of its subsidiaries not to,
knowingly take any action that would materially and adversely affect the ability
of any party hereto to obtain, on or before July 31, 1997, any necessary
approvals, consents or waivers of Governmental Entities required for the
transactions contemplated hereby without imposition of a condition or
restriction of the type referred to in the proviso to Section 6.1(b) or perform
its obligations under this Agreement.
5.15 Advisory Board. Dime agrees, promptly following the Effective
--------------
Time, to cause the members of BFS's board of directors immediately prior to the
Effective Time who are (a) not officers or employees of BFS or any of its
subsidiaries, (b) nominated by BFS and (c) are willing so to serve to be elected
or appointed as members of a newly formed advisory board to Dime Savings, the
function of which shall be as determined by the Board of Directors of Dime
Savings from time to time; provided, however, that Dime Savings may request the
-------- -------
resignation of any member of the advisory board, and such member promptly shall
so resign, if Dime Savings reasonably determines that such member has a conflict
of interest or other circumstances exist that compromise such member's ability
to effectively serve as a member of the advisory board. The advisory board
shall terminate on the first anniversary of the Effective Time. The members of
the advisory board shall receive a retainer fee of $25,000 for their year of
service.
-40-
ARTICLE VI
CONDITIONS
6.1 Conditions to Each Party's Obligation to Effect the Merger. The
----------------------------------------------------------
respective obligation of each of Dime, Merger Sub and BFS to consummate the
Merger is subject to the fulfillment or written waiver by each of Dime and BFS
of each of the following conditions prior to the Effective Time:
(a) Stockholder Approval. The agreement of merger contained in this
--------------------
Agreement shall have been duly adopted by the requisite vote of the holders
of the outstanding shares of BFS Common Stock in accordance with Section
251 of the DGCL, other applicable law and the Governing Documents of BFS.
(b) Governmental and Regulatory Consents. The Regulatory Approvals
------------------------------------
shall have been obtained and shall be in full force and effect and all
related waiting periods shall have expired; and all other material
approvals and authorizations of, filings and registrations with, and
notifications to, all Governmental Entities required for the consummation
of the Merger shall have been obtained or made and shall be in full force
and effect and all waiting periods required by law shall have expired;
provided, however, that none of the preceding shall be deemed obtained or
-------- -------
made if it shall be conditioned or restricted in a manner that,
individually or in the aggregate, would result in a Material Adverse Effect
on the Surviving Corporation or the Surviving Bank.
(c) Third Party Consents. All consents or approvals of all Persons
--------------------
(other than Governmental Entities) required for or in connection with the
execution, delivery and performance of this Agreement and the consummation
of the Merger shall have been obtained and shall be in full force and
effect, unless the failure to obtain any such consent or approval,
individually or in the aggregate, would not result in a Material Adverse
Effect on the Surviving Corporation or the Surviving Bank.
(d) No Prohibition. No jurisdiction or Governmental Entity shall
--------------
have enacted, issued, promulgated, enforced or entered any statute, rule,
regulation, judgment, decree, injunction or other order (whether temporary,
preliminary or permanent) which is in effect
-41-
and prohibits consummation of the transactions contemplated by this
Agreement.
6.2 Conditions to Obligation of Dime. The obligation of Dime and
--------------------------------
Merger Sub to consummate the Merger is also subject to the fulfillment or
written waiver by Dime of each of the following conditions prior to the
Effective Time:
(a) Representations and Warranties. The representations and
------------------------------
warranties of BFS set forth in this Agreement shall be true and correct as
of the date of this Agreement and as of the Closing Date as though made on
and as of the Closing Date, except that representations and warranties that
by their terms speak as of the date of this Agreement or some other date
certain shall be true and correct as of such date; and Dime shall have
received a certificate, dated the Closing Date, signed on behalf of BFS by
its Chief Executive Officer and Chief Financial Officer to such effect.
(b) Performance of Covenants. BFS shall have performed in all
------------------------
material respects all covenants required to be performed by it under this
Agreement at or prior to the Closing Date, and Dime shall have received a
certificate, dated the Closing Date, signed on behalf of BFS by its Chief
Executive Officer and Chief Financial Officer to such effect.
6.3 Conditions to Obligation of BFS. The obligation of BFS to
-------------------------------
consummate the Merger is also subject to the fulfillment or written waiver by
BFS of each of the following conditions prior to the Effective Time:
(a) Representations and Warranties. The representations and
------------------------------
warranties of Dime set forth in this Agreement shall be true and correct as
of the date of this Agreement and as of Closing Date as though made on and
as of the Closing Date, except that representations and warranties that by
their terms speak as of the date of this Agreement or some other date
certain shall be true and correct as of such date, and BFS shall have
received a certificate, dated the Closing Date, signed on behalf of Dime by
a senior officer of Dime to such effect.
(b) Performance of Covenants. Dime shall have performed in all
------------------------
material respects all covenants required to be performed by it under this
Agreement at or prior to the Closing Date, and BFS shall have
-42-
received a certificate, dated the Closing Date, signed on behalf of Dime by
a senior officer of Dime to such effect.
ARTICLE VII
TERMINATION, AMENDMENT AND WAIVER
7.1 Termination. This Agreement may be terminated and the Merger
-----------
abandoned at any time prior to the Effective Time, either before or after the
approval by the stockholders of BFS of the Merger:
(a) By the mutual written consent of Dime and BFS;
(b) By either Dime or BFS, if (1) the Effective Time shall not have
occurred on or prior to July 31, 1997, (2) any approval or authorization of
any Governmental Entity, the lack of which would result in the failure to
satisfy the closing condition set forth in Section 6.1(b), shall have been
denied by such Governmental Entity or such Governmental Entity shall have
requested the withdrawal of any application therefor or indicated an
intention to deny, or impose a condition of a type referred to in the
proviso to Section 6.1(b) with respect to, such approval or authorization
or (3) the approval of the stockholders of BFS referred to in Section
6.1(a) shall not have been obtained at the BFS Meeting or at any
adjournment thereof; provided, however, that the right to terminate this
-------- -------
Agreement under this Section 7.1(b) shall not be available to any party
whose failure to fulfill any obligation under this Agreement shall have
been the cause of, or shall have resulted in, either the failure of the
Effective Time to occur on or prior to such date or such action by such
Governmental Entity or the stockholders of BFS, as the case may be;
(c) By Dime, if (1) BFS shall have breached any representation,
warranty or covenant contained herein that would result in the failure to
satisfy the closing condition set forth in Section 6.2(a) or 6.2(b) and
such breach cannot be or has not been cured within 30 days after the giving
of a written notice to BFS of such breach, (2) as provided in Section 5.7,
the Board of Directors of BFS withdraws its recommendation of this
Agreement, fails to make such recommendation or modifies or qualifies its
recommendation in a manner adverse to Dime or (3) as provided in Section
5.2, the Board of Directors of BFS participates in (or
-43-
authorizes participation in) negotiations regarding the substantive terms
of a formal Acquisition Proposal; or
(d) By BFS, if (1) Dime shall have breached any representation,
warranty or covenant contained herein that would result in the failure to
satisfy the closing condition set forth in Section 6.3(a) or 6.3(b) and
such breach cannot be or has not been cured within 30 days after the giving
of a written notice to Dime of such breach or (2) without breaching Section
5.2, BFS shall have entered into a definitive agreement with a third party
providing for an Acquisition Transaction (as defined in Section 7.3(b)(1)
hereof) on terms determined by the Board of Directors of BFS, in its sole
discretion, after consultation with and considering the advice of its legal
and financial advisors, to be more favorable to the stockholders of BFS
than the Merger; provided, that the right to terminate this Agreement under
--------
Section 7.1(d)(2) shall not be available to BFS unless it delivers to Dime
simultaneously with such termination the fee referred to in Section 7.3;
provided, that to the extent required by Section 251(d) of the DGCL, any
--------
termination of the Agreement after the approval of the Merger by the
stockholders of BFS shall be by action of the Board of Directors of Dime or BFS,
as the case may be.
7.2 Effect of Termination. In the event of termination of this
---------------------
Agreement and the abandonment of the Merger pursuant to Section 7.1, no party to
this Agreement shall have any liability or further obligation to any other party
hereunder except (a) as set forth in Sections 7.3 and 8.1 and (b) such
termination will not relieve a breaching party of liability for any breach
directly or indirectly giving rise to such termination.
7.3 Termination Fee. (a) If this Agreement (1) is terminated by
---------------
Dime pursuant to Section 7.1(c)(2) or by BFS pursuant to Section 7.1(d)(2) and
(2) prior thereto or within eighteen months after such termination:
(A) BFS shall have entered into an agreement to engage in an
Acquisition Transaction or an Acquisition Transaction shall have occurred;
or
(B) The Board of Directors of BFS shall have authorized or approved
an Acquisition Transaction or shall have publicly announced an intention to
authorize or approve an Acquisition Transaction or shall have
-44-
recommended that the stockholders of BFS approve or accept an Acquisition
Transaction (each of the events set forth in clause (A) or (B), a "Trigger
-------
Event");
-----
BFS shall pay to Dime, and Dime shall be entitled to payment of, a fee of
$3,000,000.
(b) The term "Acquisition Transaction" means (1) a merger or
-----------------------
consolidation, or any similar transaction, involving BFS or any of its
significant subsidiaries (the term "significant subsidiary" for purposes of this
----------------------
definition having the meaning assigned thereto in Regulation S-X promulgated by
the SEC), (2) a purchase, lease or other acquisition of all or substantially all
of the assets or deposits of BFS or any of its significant subsidiaries or (3) 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 BFS or any of its significant subsidiaries, in each case other than
with or by Dime or a subsidiary of Dime.
ARTICLE VIII
GENERAL PROVISIONS
8.1 Survival. Only those agreements and cove nants of the parties
--------
that by their express terms apply in whole or in part after the Effective Time
shall survive the Effective Time. All other representations, warranties,
agreements and covenants shall be deemed only to be condi tions of the Merger
and shall not survive the Effective Time. If the Merger shall be abandoned and
this Agreement terminated, the provisions of Sections 7.2 and 7.3 shall apply
and the agreements of the parties in Sections 5.5(b) and (d), 5.10 and 8.2 shall
survive such abandonment.
8.2 Expenses. Each of Dime and BFS shall bear and pay all costs and
--------
expenses incurred by it or on its behalf in connection with the transactions
contemplated hereunder, including fees and expenses of its own financial or
other consultants, investment bankers, accountants and counsel; provided,
--------
however, that the costs and expenses of preparing, printing and mailing the
-------
Proxy Statement and all filing and other fees paid to the SEC in connection with
the Merger shall be borne equally by Dime and BFS.
8.3 Modification or Amendment. (a) Subject to the applicable
-------------------------
provisions of the DGCL, at any time prior to the Effective Time, the parties
hereto may modify or amend
-45-
this Agreement by written agreement executed and delivered by duly authorized
officers of the respective parties.
(b) At any time prior to the Effective Time, Dime shall be entitled
to revise the structure of the Merger or the other transactions contemplated
hereby or the manner of effecting such transactions; provided, that each of the
--------
transactions comprising such revised structure or manner shall not, as a result
of such revision, (1) subject any of the stockholders of BFS (or, prior to the
Effective Time, BFS) to adverse Tax consequences, (2) adversely affect the
consideration to be received by any such stockholder or (3) result in any
material delay in the consummation of the transactions contemplated hereby.
This Agreement and any related documents shall be appropriately amended in order
to reflect any such revised structure.
8.4 Waiver of Conditions. The conditions to each party's obligation
--------------------
to consummate the Merger are for the sole benefit of such party and may be
waived by such party in whole or in part to the extent permitted by applicable
law. No waiver shall be effective unless it is in a writing signed by a duly
authorized officer of the waiving party that makes express reference to the
provision or provisions subject to such waiver.
8.5 Notices. Any notice, request, instruction or other document to
-------
be given hereunder by any party to the other shall be in writing and shall be
deemed to have been duly given (1) on the date of delivery if delivered
personally or by telefacsimile upon confirmation of receipt, (2) on the first
business day following the date of mailing if delivered by registered next-day
courier service or (3) on the third business day following the date of mailing
if delivered by registered or certified mail, return receipt requested, postage
prepaid. All notices, requests, instructions or other documents to be given
hereunder shall be delivered as set forth below, or pursuant to such other
instructions as may be designated in writing by the party to receive such
notice, request, instruction or document:
(a) If to Dime:
Dime Bancorp, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Chief Executive Officer
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
-46-
with a copy to:
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
(b) If to BFS:
BFS Bankorp, Inc.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
President and Chief
Executive Officer
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
with copies to:
▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
Luse, Lehman, ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇., ▇.▇.
▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
and
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, Esq.
Skadden, Arps, Slate, ▇▇▇▇▇▇▇
& ▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
8.6 Certain Definitions; Interpretation. (a) As used in this
-----------------------------------
Agreement, the following terms shall have the meanings indicated:
"individually or in the aggregate", when used in or with respect to
--------------------------------
Articles IV, V or VI, includes all events, occurrences and circumstances
described in any Section of that Article and is not limited to any specific
Section.
"material" means, with respect to a Person, material to such Person
--------
and its subsidiaries, taken as a whole.
-47-
"Material Adverse Effect" means, with respect to a Person, a material
-----------------------
adverse effect upon (1) the present or prospective financial condition,
business or results of operations of such Person and its subsidiaries,
taken as a whole (provided, that in relation to the prospective condition,
--------
business or results such effect must be reasonably likely to occur), or (2)
the ability of any party hereto to perform its material obligations under
this Agreement; provided, that in determining whether a Material Adverse
--------
Effect has occurred there shall be excluded any effect on the referenced
party the cause of which is (1) any change in banking and similar laws,
rules or regulations of general applicability or interpretations thereof by
courts or governmental authorities, (2) any change in generally accepted
accounting principles or regulatory accounting requirements applicable to
thrift institutions or their holding companies generally or (3) any changes
in general economic conditions (including changes in interests rates)
affecting generally thrift institutions in the Greater New York
metropolitan area and their holding companies (provided, that such economic
--------
conditions shall not (A) affect BFS and its subsidiaries to any
substantially greater extent than thrift institutions in the Greater New
York metropolitan area and their holding companies generally or (B) cause
the total stockholder's equity of BFS at any date (calculated in accordance
with past practice and the Balance Sheet but determined without regard to
any modification or change undertaken solely on the account of Section 5.3)
to be less than the amount publicly disclosed as such at September 30, 1996
by BFS in its press release dated October 29, 1996).
"Person" includes any individual, corporation, partnership,
------
association, trust, unincorporated organization or other entity.
"prior consultation" means, with respect to any action, advance notice
------------------
of such action and a reasonable opportunity to discuss such action in good
faith prior to the taking thereof.
"subsidiary" with respect to a Person, means any other person
----------
controlled (as defined in Section 10 of the HOLA) by such Person.
(b) When a reference is made in this Agreement to Articles or
Sections, such reference shall be to an Article or Section of this Agreement
unless otherwise indicated. The table of contents, index of defined terms and
headings
-48-
contained in this Agreement are for ease of reference only and shall not affect
the meaning or interpretation of this Agreement. Whenever the words "include",
"includes", or "including" are used in this Agreement, they shall be deemed
followed by the words "without limitation". Any singular term in this Agreement
shall be deemed to include the plural, and any plural term the singular.
(c) Insofar as any provision of this Agreement shall require a
subsidiary to take or omit to take any action, such provision shall be deemed a
covenant by Dime or BFS, as the case may be, to cause such action or omission to
occur.
(d) It is the intention of the parties that this Agreement shall not
be construed more strictly with regard to one party than with regard to any
other party.
8.7 Entire Agreement. This Agreement, including the Annexes and
----------------
Schedules thereto, constitutes the entire agreement of the parties hereto with
respect to the subject matter hereof and supersedes all prior agreements and
undertakings, both written and oral.
8.8 Assignment. Without the prior written consent of the other party
----------
hereto, this Agreement shall not be assigned by operation of law or otherwise
(any attempted assignment in contravention hereof being null and void).
8.9 No Third-Party Beneficiaries. Nothing con tained in this
----------------------------
Agreement, expressed or implied, is intended to confer upon any person or entity
other than the parties hereto, any benefit right or remedies, except that the
------
provisions of Section 5.6 shall inure to the benefit of the holders of the BFS
Options, Section 5.12 shall inure to the benefit of the persons referred to
therein and Section 5.15 shall inure to the benefit of the members of the
advisory board referred to therein.
8.10 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND
-------------
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO
AGREEMENTS MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE.
8.11 Counterparts. For the convenience of the parties hereto, this
------------
Agreement may be executed in any number of separate counterparts, each such
counterpart being deemed to be an original instrument, and all such counterparts
shall together constitute the same agreement.
-49-
IN WITNESS WHEREOF, Dime, Merger Sub and BFS have caused this
Agreement to be duly executed as of the date first written above by their
respective officers thereunto duly authorized.
DIME BANCORP, INC.
By: /s/ ▇▇▇▇▇ ▇. Large Jr.
--------------------------
Name: ▇▇▇▇▇ ▇. Large, Jr.
Title: Chairman and Chief
Executive Officer
FIFTH AVENUE PROPERTY CORP.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: President
BFS BANKORP, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: President and
Chief Executive
Officer
-50-