EXHIBIT 2.1
AGREEMENT AND PLAN OF MERGER
DATED AS OF JUNE 13, 2005
AMONG
BANK OF THE WEST,
BEAR MERGER CO., INC.,
AND
COMMERCIAL FEDERAL CORPORATION
TABLE OF CONTENTS
PAGE
ARTICLE 1. DEFINITIONS........................................................1
ARTICLE 2. TERMS OF MERGER....................................................8
2.1. Effect of Merger and Surviving Corporation.........................8
2.2. Stock of Company...................................................8
2.3. Company Stock Options..............................................8
2.4. Effect on Merger Sub Stock.........................................9
2.5. Exchange Procedures................................................9
2.6. Adjustments.......................................................10
2.7. Directors of Surviving Corporation................................10
2.8. Executive Officers of Surviving Corporation.......................10
2.9. No Further Ownership Rights in Stock..............................10
2.10. Absence of Control................................................10
2.11. Articles of Incorporation and Bylaws..............................11
ARTICLE 3. THE CLOSING.......................................................11
3.1. Closing and Closing Date..........................................11
3.2. Articles of Merger................................................11
3.3. Further Assurances................................................11
ARTICLE 4. REPRESENTATIONS AND WARRANTIES OF COMPANY.........................11
4.1. Incorporation, Standing and Power..................................12
4.2. Capitalization.....................................................12
4.3. Subsidiaries.......................................................14
4.4. Financial Statements...............................................14
4.5. Reports and Filings................................................14
4.6. Authority of Company and Bank......................................15
4.7. Insurance..........................................................16
4.8. Personal Property..................................................16
4.9. Real Estate........................................................17
4.10. Litigation........................................................17
4.11. Taxes.............................................................17
4.12. Compliance with Charter Provisions and Laws and
Regulations.......................................................20
4.13. Employees.........................................................21
4.14. Brokers, Finders and Financial Advisors...........................21
4.15. Scheduled Contracts...............................................21
4.16. Performance of Obligations........................................23
4.17. Certain Material Changes..........................................24
4.18. Licenses and Permits..............................................24
4.19. Undisclosed Liabilities...........................................25
4.20. Employee Benefit Plans............................................25
4.21. Corporate Records.................................................28
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4.22. Accounting Records................................................29
4.23. Offices and ATMs..................................................29
4.24. Agreements with Regulators........................................29
4.25. Vote Required.....................................................29
4.26. Power of Attorney.................................................29
4.27. Facts Affecting Regulatory Approvals..............................29
4.28. Indemnification...................................................30
4.29. Regulatory Capitalization.........................................30
4.30. Derivative Transactions...........................................30
4.31. Trust Powers......................................................31
4.32. Disclosure Documents and Applications.............................31
4.33. Intellectual Property.............................................31
4.34. State Takeover Laws; Company Rights Plan..........................31
4.35. Registration Obligation...........................................32
4.36. Opinions of ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co., Inc. and Sandler
▇'▇▇▇▇▇ & Partners, L.P...........................................32
4.37. Loans; Investments................................................32
4.38. Allowance for Loan Losses.........................................33
4.39. Compliance with Servicing Obligations.............................33
4.40. Fiduciary Responsibilities........................................33
4.41. Controls and Procedures...........................................34
4.42. CRA, Anti-Money Laundering, OFAC and Customer
Information Security..............................................35
4.43. Investment Management and Related Activities......................36
ARTICLE 5. REPRESENTATIONS AND WARRANTIES OF PARENT..........................36
5.1. Incorporation, Standing and Power..................................36
5.2. Authority..........................................................36
5.3. Parent Stockholder Consent.........................................37
5.5. Litigation.........................................................37
5.6. Compliance with Laws and Regulations...............................37
5.7. BNP Paribas' Status as FHC.........................................38
5.8. Agreements with Regulators.........................................38
5.9. Brokers and Finders................................................38
5.10. Facts Affecting Regulatory Approvals..............................38
5.11. CRA...............................................................39
5.12. Accuracy of Information Furnished for Company Proxy
Statement and Other Filings.......................................39
5.13. Investment in Company Shares......................................39
ARTICLE 6. COVENANTS OF COMPANY PENDING EFFECTIVE TIME OF THE MERGER.........39
6.1. Limitation on Conduct Prior to Effective Time of the
Merger............................................................39
6.2. Affirmative Conduct Prior to Effective Time of the
Merger............................................................43
6.3. Access to Information.............................................45
6.4. Filings...........................................................45
6.5. Notices; Reports..................................................46
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6.6. Company Stockholders' Meeting.....................................46
6.7. No Solicitation...................................................47
6.8. Applications......................................................49
6.9. Subsequent Mergers................................................49
6.10. Takeover Statute..................................................50
ARTICLE 7. COVENANTS OF PARENT AND MERGER SUB................................50
7.1. Limitation on Conduct Prior to Effective Time of the
Merger............................................................50
7.2. Applications.......................................................50
7.3. Notices; Reports...................................................51
7.4. Indemnification and Directors' and Officers' Insurance.............51
7.5. Limitation on Parent Conduct Prior to Effective Time
of the Merger.....................................................52
ARTICLE 8. ADDITIONAL COVENANTS..............................................53
8.1. Commercially Reasonable Efforts...................................53
8.2. Public Announcements..............................................53
ARTICLE 9. CONDITIONS PRECEDENT TO THE MERGER................................53
9.1. Stockholder Approval..............................................53
9.2. No Judgments or Orders............................................53
9.3. Regulatory Approvals..............................................53
ARTICLE 10. CONDITIONS PRECEDENT TO THE OBLIGATIONS OF COMPANY................54
10.1. Representations and Warranties; Performance of
Covenants.........................................................54
10.2. Officers' Certificate.............................................54
ARTICLE 11. CONDITIONS PRECEDENT TO OBLIGATIONS OF PARENT AND MERGER SUB......54
11.1. Representations and Warranties; Performance of
Covenants.........................................................54
11.2. Authorization of Merger...........................................54
11.3. Officers' Certificate.............................................55
11.4. Employee Benefit Plans............................................55
ARTICLE 12. EMPLOYEE BENEFITS.................................................55
12.1. Employee Benefits.................................................55
12.2. Company Stock Options, Company Awards and the Company
Stock Option Plans................................................57
ARTICLE 13. TERMINATION.......................................................59
13.1. Termination.......................................................59
13.2. Effect of Termination.............................................61
ARTICLE 14. MISCELLANEOUS.....................................................63
14.1. Expenses..........................................................63
14.2. Notices...........................................................63
14.3. Assignment........................................................64
14.4. Counterparts......................................................64
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14.5. Effect of Representations and Warranties..........................64
14.6. Third Parties.....................................................65
14.7. Lists; Exhibits; Integration......................................65
14.8. Knowledge.........................................................65
14.9. Governing Law.....................................................65
14.10.Captions..........................................................65
14.11.Severability......................................................65
14.12.Waiver and Modification; Amendment................................65
14.13.Enforcement; Jurisdiction.........................................65
14.14.Waiver of Jury Trial..............................................65
14.15.Attorneys' Fees...................................................65
EXHIBIT A - Form of Articles of Merger
EXHIBIT B - Form of Agreement of Merger
EXHIBIT C - Restated Articles of Incorporation of the Surviving Corporation
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AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER ("AGREEMENT") is made and entered into
as of the 13th day of June, 2005, by and among BANK OF THE WEST, a California
state banking corporation ("PARENT"), BEAR MERGER CO., INC., a Nebraska
corporation and a wholly-owned subsidiary of Parent ("MERGER SUB") and
COMMERCIAL FEDERAL CORPORATION, a Nebraska corporation ("COMPANY").
WHEREAS, the Boards of Directors of each of Parent, Merger Sub and Company
deem advisable and in the best interests of their respective stockholders (a)
the merger of Merger Sub with and into Company (the "Merger") upon the terms and
conditions set forth herein and in the Articles of Merger in substantially the
form of Exhibit A hereto to be entered into hereafter (the "ARTICLES OF MERGER")
and in accordance with the Nebraska Business Corporation Act (the "NBCA")
(Company, following the effectiveness of the Merger, being hereinafter sometimes
referred to as the "SURVIVING CORPORATION") and (b) following, and subject to
the consummation of the Merger, the merger of the Surviving Corporation into
Parent and immediately thereafter the merger of Company's wholly-owned
subsidiary, Commercial Federal Bank, a federal savings bank ("Bank") into
Parent, upon the terms and conditions set forth in an Agreement of Merger in
substantially the form of Exhibit B hereto (the "MERGER AGREEMENT"), to be
entered into hereafter and in accordance with the NBCA, the California General
Corporation Law (the "CGCL"), the California Financial Code (the "CFC"); and the
laws of the United States, in the case of each such laws, to the extent
applicable, with Parent being the surviving corporation in each such merger
(such mergers being hereinafter sometimes collectively referred to as the
"SUBSEQUENT MERGERS").
WHEREAS, the Boards of Directors of Parent, Merger Sub and Company have
approved this Agreement and the Merger pursuant to which Merger Sub will merge
with and into Company and each outstanding share of Company common stock, par
value $.01 per share ("COMPANY STOCK"), will be converted into the right to
receive the Merger Consideration (as defined in Section 2.2(b)) upon the terms
and subject to the conditions set forth herein.
NOW, THEREFORE, on the basis of the foregoing recitals and in
consideration of the respective covenants, agreements, representations and
warranties contained herein, the parties hereto agree as follows:
ARTICLE 1.
DEFINITIONS
Except as otherwise expressly provided for in this Agreement, or unless
the context otherwise requires, as used throughout this Agreement the following
terms shall have the respective meanings specified below:
"AFFILIATE" of, or a Person "AFFILIATED" with, a specific Person(s) is a
Person that directly or indirectly, through one or more intermediaries,
controls, or is controlled by, or is under common control with, the Person(s)
specified.
"AFFILIATED GROUP" means, with respect to any entity, a group of entities
required or permitted to file consolidated, combined or unitary Tax Returns (as
defined herein) including such entity.
"ARTICLES OF MERGER" has the meaning set forth in the first recital of
this Agreement.
"ATMS" has the meaning set forth in Section 4.23.
"AVERAGE NET INCOME" has the meaning set forth in Section 6.1(b).
"BANK" has the meaning set forth in the first recital of this Agreement.
"BANK MERGER ACT" means 12 U.S.C. ss. 1828(c).
"BANK SECRECY ACT" means the Federal Bank Secrecy Act, as amended, and its
implementing regulations.
"BANCWEST" means BancWest Corporation, a Delaware corporation and the
parent of Parent.
"BENEFIT ARRANGEMENTS" has the meaning set forth in Section 4.20(b).
"BHC ACT" means the Bank Holding Company Act of 1956, as amended.
"BNP PARIBAS" means BNP Paribas, a societe anonyme (limited liability
banking corporation) organized under the laws of the Republic of France.
"BONUS PLANS" has the meaning set forth in Section 12.2(e).
"BOOK ENTRY SHARES" has the meaning set forth in Section 2.5(b).
"BUSINESS DAY" means any day other than a Saturday, Sunday or other day on
which banks in San Francisco, California and Omaha, Nebraska, are required or
authorized by Law to be closed.
"CERTIFICATES" has the meaning set forth in Section 2.5(b).
"CFC" has the meaning set forth in the first recital to this Agreement.
"CGCL" has the meaning set forth in the first recital to this Agreement.
"CHANGE IN COMPANY RECOMMENDATION" has the meaning set forth in Section
6.6(a).
"CLOSING" has the meaning set forth in Section 3.1.
"CLOSING DATE" has the meaning set forth in Section 3.1.
"CODE" means the Internal Revenue Code of 1986, as amended.
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"COMPANY 401(K) PLAN" means the Company's Retirement Savings Plan and
401(k) Plan for Acquired Companies, as amended.
"COMPANY AWARD" has the meaning set forth in Section 12.2(b).
"COMPANY DISCLOSURE LETTER" means that letter designated as such which has
been delivered by Company to Parent concurrently with the execution and delivery
of this Agreement.
"COMPANY GOVERNMENTAL FILINGS" has the meaning set forth in Section
4.5(b).
"COMPANY INTELLECTUAL PROPERTY" has the meaning set forth in Section 4.33.
"COMPANY LIST" means any list required to be furnished by Company to
Parent herewith.
"COMPANY OFFICES LIST" has the meaning set forth in Section 4.23.
"COMPANY OPTION LIST" has the meaning set forth in Section 4.2(a).
"COMPANY PROPERTY" has the meaning set forth in Section 4.12(b).
"COMPANY RECOMMENDATION" has the meaning set forth in Section 6.6(a).
"COMPANY SEC DOCUMENTS" has the meaning set forth in Section 4.5(a).
"COMPANY STOCK" has the meaning set forth in the second recital of this
Agreement.
"COMPANY STOCK OPTION" means any option granted pursuant to the Company
Stock Option Plans.
"COMPANY STOCK OPTION PLANS" means, collectively, Company's 2002 Stock
Option and Incentive Plan, Company's 1996 Stock Option and Incentive Plan As
Amended, the Bank Stock Option & Restricted Stock Deferral Plan, the First
Colorado Bancorp, Inc. 1996 Stock Option Plan, the Mid Continent Bancshares,
Inc. 1994 Stock Option Plan, the Railroad Financial Corporation 1994 Stock
Option and Incentive Plan and Company's 1984 Stock Option and Incentive Plan.
"COMPANY STOCKHOLDER APPROVAL" has the meaning set forth in Section 6.6.
"COMPANY STOCKHOLDERS' MEETING" means the meeting of Company's
stockholders provided for in Section 6.6.
"COMPANY SUBSIDIARIES" means, collectively, the entities identified in
Section 4.1 of the Company Disclosure Letter.
"COMPANY SUPPLIED INFORMATION" has the meaning set forth in Section 4.32.
"COMPANY'S CURRENT PREMIUM" has the meaning set forth in Section 7.4(b).
"COMPETING TRANSACTION" has the meaning set forth in Section 6.7.
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"CONFIDENTIALITY AGREEMENT" means that certain Confidentiality Agreement
dated June 2, 2005 by and between Parent and Company.
"COVERED PARTIES" has the meaning set forth in Section 4.28.
"CRA" has the meaning set forth in Section 4.42.
"DEFERRED COMPENSATION PLAN" has the meaning set forth in Section 12.1(d).
"DERIVATIVE TRANSACTIONS" has the meaning set forth in Section 4.30.
"DFI" means the Department of Financial Institutions of the State of
California.
"DPC SHARES" means shares of Company Stock held by Company or Parent or
any of their respective Subsidiaries in respect of a debt previously contracted.
"D&T" means Deloitte & Touche LLP, Company's independent public
accountants.
"EFFECTIVE TIME OF THE MERGER" means the date and time at which the
Articles of Merger are filed with the Secretary of State of the State of
Nebraska, or at such time thereafter as shall be agreed to by the parties and
specified in the Articles of Merger.
"EMPLOYEE PLANS" has the meaning set forth in Section 4.20(a).
"ENCUMBRANCE" shall mean any option, pledge, security interest, lien,
charge, encumbrance or restriction (whether on voting or disposition or
otherwise), whether imposed by agreement, understanding, Law or otherwise.
"ENVIRONMENTAL REGULATIONS" has the meaning set forth in Section 4.12(b).
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.
"EXCHANGE AGENT" means ▇▇▇▇▇ Fargo Shareowner Services.
"EXCHANGE FUND" has the meaning set forth in Section 2.5(a).
"EXPENSES" has the meaning set forth in Section 14.1.
"▇▇▇▇▇▇ MAE" has the meaning set forth in Section 4.37.
"FDIC" means the Federal Deposit Insurance Corporation.
"FHLB" has the meaning set forth in Section 4.1.
"FINANCIAL STATEMENTS OF BANK" means the consolidated reports of condition
and income of Bank as of December 31, 2002, 2003 and 2004, and as of March 31,
2005, as filed with the OTS.
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"FINANCIAL STATEMENTS OF COMPANY" means the consolidated financial
statements of Company consisting of (a) the consolidated statements of financial
condition as of December 31, 2002, 2003 and 2004, the related consolidated
statements of income, comprehensive income, stockholders' equity and cash flows
for the years then ended and the related notes thereto and related opinions of
D&T thereon for the years then ended and (b) the unaudited condensed
consolidated statement of financial condition as of March 31, 2005 and the
related condensed consolidated statements of income, comprehensive income,
stockholders' equity and cash flows for the quarter then ended and the related
notes thereto.
"FRB" means the Board of Governors of the Federal Reserve System.
"▇▇▇▇▇▇▇ MAC" has the meaning set forth in Section 4.37.
"GAAP" means United States generally accepted accounting principles
consistently applied during the periods involved.
"▇▇▇▇▇▇ MAE" has the meaning set forth in Section 4.37.
"GOVERNMENTAL ENTITY" means any court, tribunal or judicial or arbitral
body in any jurisdiction or any United States federal, state, municipal or local
or any foreign or other governmental, regulatory or administrative authority,
agency or instrumentality or any self-regulatory organization.
"HAZARDOUS MATERIALS" has the meaning set forth in Section 4.12(b).
"HMDA" has the meaning set forth in Section 4.42.
"HOLA" means the Home Owners Loan Act, as amended.
"HUD" has the meaning set forth in Section 4.37.
"INDEMNIFIED LIABILITIES" has the meaning set forth in Section 7.4(a).
"INDEMNIFIED PARTIES" has the meaning set forth in Section 7.4(a).
"INSTRUCTIONS" means the Instructions for preparation of consolidated
reports of condition and income, issued by the Federal Financial Institutions
Examination Council.
"INVESTMENT SECURITY" means any equity security or debt security as
defined in Statement of Financial Accounting Standards No. 115.
"IRS" means the Internal Revenue Service.
"LAW" means any and all statutes, laws, ordinances, rules, regulations,
orders, permits, judgments, injunctions, decrees, case law and other rules of
law enacted, promulgated or issued by any Governmental Entity.
"LOAN" has the meaning set forth in Section 4.37.
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"MANAGEMENT INCENTIVE PLAN" has the meaning set forth in Section 12.2(e).
"MATERIAL ADVERSE EFFECT" means any circumstance, change in or effect (1)
that is materially adverse to the financial condition, business, or results of
operations of Company and the Company Subsidiaries, taken as a whole, or (2)
that materially impairs the ability of Company to consummate the transactions
contemplated hereby; PROVIDED, HOWEVER, that in determining whether a Material
Adverse Effect has occurred there shall be excluded the effect of: (i) any
change in banking and similar Laws of general applicability or interpretations
thereof by Governmental Entities, (ii) any change in GAAP or regulatory
accounting requirements applicable to banks, savings associations or their
holding companies generally, (iii) any general social, political, economic,
environmental or natural condition, change, effect, event or occurrence,
including changes in prevailing interest rates, currency exchange rates or
general economic or market conditions, except for any condition, change, effect,
event or occurrence which would have a material adverse effect on Company and
the Company Subsidiaries taken as a whole which is substantially
disproportionate relative to the effect on comparable financial institutions,
(iv) the public announcement of the transactions contemplated by this Agreement
and any action or omission by Company or any Company Subsidiary pursuant to the
terms of this Agreement or taken with the prior written consent of the other
party in contemplation of the transactions contemplated hereby, and (v) any
expenses incurred in connection with this Agreement or the transactions
contemplated hereby.
"▇▇▇▇▇▇▇ ▇▇▇▇▇ AGREEMENT" means the letter agreement dated May 18, 2005,
between Company and ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co., Inc.
"MERGER" has the meaning set forth in the first recital of this Agreement.
"MERGER AGREEMENT" has the meaning set forth in the first recital of this
Agreement.
"MERGER CONSIDERATION" has the meaning set forth in Section 2.2(b).
"NBCA" has the meaning set forth in the first recital of this Agreement.
"NEW PLANS" has the meaning set forth in Section 12.1(c).
"OTS" means the Office of Thrift Supervision.
"PARENT SUPPLIED INFORMATION" has the meaning set forth in Section 5.12.
"PATRIOT ACT" means the USA PATRIOT ACT of 2001 and the regulations
promulgated thereunder.
"PAYROLL CONVERSION DATE" means the date that the payroll system for the
Company and Company Subsidiaries is converted to Parent's payroll system.
"PERSON" means any individual, corporation, association, partnership,
limited liability company, trust, joint venture, other entity, unincorporated
organization, government or governmental department or agency.
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"PROXY STATEMENT" means the Proxy Statement, together with any supplements
thereto, that is used to solicit proxies for the Company Stockholders' Meeting
in connection with the Merger.
"PTO" has the meaning set forth in Section 12.1(c).
"PWC" means PricewaterhouseCoopers LLP, Parent's independent public
accountants.
"REPRESENTATIVES" has the meaning set forth in Section 6.7.
"SAIF" has the meaning set forth in Section 4.1,
"SANDLER ▇'▇▇▇▇▇ AGREEMENT" means the letter agreement dated June 2, 2005,
between Company and Sandler, ▇'▇▇▇▇▇ & Partners, L.P.
"▇▇▇▇▇▇▇▇-▇▇▇▇▇ ACT" has the meaning set forth in Section 4.41.
"SCHEDULED CONTRACT" has the meaning set forth in Section 4.15.
"SEC" means the Securities and Exchange Commission.
"SECURITIES ACT" means the Securities Act of 1933, as amended.
"SPECIAL DIVIDEND" has the meaning set forth in Section 6.1(b).
"SPECIAL RETENTION BONUS" has the meaning set forth in Section 6.1(f).
"SUBSEQUENT MERGERS" has the meaning set forth in the first recital of
this Agreement.
"SUBSIDIARY" of a Person means any corporation, partnership, limited
liability company or other business entity of which more than 50% of the voting
power is owned or controlled by such Person.
"SUPERIOR PROPOSAL" has the meaning set forth in Section 6.7.
"SURVIVING CORPORATION" has the meaning set forth in the first recital of
this Agreement.
"TAKEOVER STATUTE" has the meaning set forth in Section 4.34(a).
"TANK" has the meaning set forth in Section 4.12(b).
"TAX" or "TAXES" means (i) any and all federal, state, local or foreign
taxes, imposts, levies or other like assessments, including, without limitation,
all net income, gross receipts, capital, sales, use, ad valorem, value added,
transfer, franchise, profits, inventory, capital stock, license, withholding,
payroll, employment, social security, unemployment, excise, severance, stamp,
occupation, property, corporation and estimated taxes, custom duties and other
taxes of any kind whatsoever; (ii) all interest, penalties, fines, additions to
tax or additional amounts
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imposed by any taxing authority in connection with any item described in clause
(i); and (iii) any transferee liability in respect of any items described in
clauses (i) and/or (ii).
"TAX RETURNS" means all returns, declarations, reports, estimates,
information returns, statements, elections, disclosures and schedules required
to be filed with any taxing authority in respect of any Taxes (including any
attachments thereto or amendments thereof).
"TERMINATION FEE" has the meaning set forth in Section 13.2(b).
"TRUST ACCOUNT SHARES" means shares of Company Stock held, directly or
indirectly, in trust accounts, managed accounts and the like or otherwise held
in a fiduciary or nominee capacity that are beneficially owned by third parties.
"VA" has the meaning set forth in Section 4.37.
ARTICLE 2.
TERMS OF MERGER
2.1. EFFECT OF MERGER AND SURVIVING CORPORATION. At the Effective
Time of the Merger, Merger Sub will be merged with and into Company pursuant to
the terms, conditions and provisions of this Agreement and the Articles of
Merger and in accordance with the applicable provisions of the NBCA, and the
separate corporate existence of Merger Sub shall cease. The Merger will have the
effects set forth in the NBCA.
2.2. STOCK OF COMPANY. Subject to Section 2.6, each share of Company
Stock issued and outstanding immediately prior to the Effective Time of the
Merger shall, without any further action on the part of Company or the holders
of such shares, be treated on the basis set forth in this Section 2.2.
(a) CANCELLATION OF TREASURY SHARES. All shares of Company
Stock that are owned by Company as treasury stock and all shares of
Company Stock that are owned directly or indirectly by Company or Parent
(other than Trust Account Shares and DPC Shares) shall be cancelled and
retired and shall cease to exist, and no Merger Consideration shall be
delivered in exchange therefor.
(b) CONVERSION OF COMPANY STOCK. At the Effective Time of the
Merger, each issued and outstanding share of Company Stock (other than
shares to be cancelled in accordance with Section 2.2(a)) shall be
automatically canceled and cease to be an issued and outstanding share of
Company Stock and be converted into the right to receive per share
consideration (the "MERGER CONSIDERATION") in cash in the amount of
$34.00.
2.3. COMPANY STOCK OPTIONS. Each Company Stock Option outstanding as
of the Effective Time of the Merger shall be treated in accordance with Section
12.2.
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2.4. EFFECT ON MERGER SUB STOCK. At the Effective Time of the
Merger, each issued and outstanding share of capital stock of Merger Sub shall
be converted into and become one fully paid and nonassessable share of common
stock of the Surviving Corporation.
2.5. EXCHANGE PROCEDURES.
(a) At the Effective Time of the Merger, Parent shall deposit
with the Exchange Agent for the benefit of the holders of shares of
Company Stock outstanding immediately prior to the Effective Time of the
Merger, for exchange in accordance with this Section 2.5 through the
Exchange Agent, cash in the amount of the aggregate Merger Consideration
payable to such holders of Company Stock pursuant to Section 2.2 in
exchange for their shares of Company Stock (collectively, the "EXCHANGE
FUND").
(b) Parent shall direct the Exchange Agent to mail, promptly
after the Effective Time of the Merger, to each holder of record of shares
of Company Stock which are represented by (x) a certificate or
certificates which immediately prior to the Effective Time of the Merger
represented outstanding shares of Company Stock (the "CERTIFICATES") or
(y) an entry to that effect in the shareholder records maintained on
behalf of Company by Company's stock transfer agent (the "BOOK ENTRY
SHARES"), whose shares were converted into the right to receive the Merger
Consideration pursuant to Section 2.2 hereof, (i) a letter of transmittal
(which shall specify that delivery shall be effected, and risk of loss and
title to the Certificates (if any) shall pass, only upon delivery of the
Certificates to the Exchange Agent and shall be in such form and have such
other provisions as Parent and Company may reasonably specify), and (ii)
instructions for use in effecting the surrender of the Certificates or
authorizing transfer and cancellation of Book Entry Shares in exchange for
the Merger Consideration. Upon surrender of a Certificate for cancellation
to the Exchange Agent or to such other agent or agents as may be appointed
by Parent, or authorizing transfer of Book Entry Shares, together with
such letter of transmittal, duly executed, the holder of such shares of
Company stock shall be entitled to receive in exchange therefor the amount
of the Merger Consideration which such holder has the right to receive
pursuant to Section 2.2 hereof, and any Certificate so surrendered shall
forthwith be canceled. Until surrendered as contemplated by this Section
2.5, each Certificate and any Book Entry Shares shall be deemed at any
time after the Effective Time of the Merger to represent only the right to
receive upon such surrender the Merger Consideration to be paid in
consideration therefor upon surrender of such Certificate or transfer of
the Book Entry Shares, as the case may be, as contemplated by this Section
2.5. Notwithstanding anything to the contrary set forth herein, if any
holder of shares of Company Stock that are not Book Entry Shares should be
unable to surrender the Certificates for such shares, because they have
been lost or destroyed, such holder may deliver in lieu thereof a bond in
form and substance and with surety reasonably satisfactory to Parent and
shall be entitled to receive the Merger Consideration to be paid in
consideration therefor in accordance with Section 2.2 hereof.
(c) If, after the Effective Time of the Merger, Certificates
or Book Entry Shares are presented to Parent for any reason, they shall be
canceled and exchanged as provided in this Agreement.
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(d) Any portion of the Exchange Fund which remains
undistributed to the stockholders of Company following the passage of
twelve months after the Effective Time of the Merger shall be delivered to
Parent, upon demand, and any stockholders of Company who have not
theretofore complied with this Section 2.5 shall thereafter look only to
Parent for payment of their claim for the Merger Consideration payable in
consideration for any Certificate or transfer of any Book Entry Shares.
(e) Except as otherwise required by law, none of Parent,
Company or the Surviving Corporation shall be liable to any holder of
shares of Company Stock for such cash from the Exchange Fund delivered to
a public official pursuant to any applicable abandoned property, escheat
or similar law.
(f) The parties acknowledge that the dissenters' rights
provisions of Sections 21-20,137 to 21-20,150 of the NBCA shall not be
applicable to the Merger by reason of Section 21-20,138(3) of the NBCA.
2.6. ADJUSTMENTS. If after the date hereof and on or prior to the
Effective Date of the Merger, the outstanding shares of Company Stock shall be
changed into a different number of shares by reason of any reclassification,
recapitalization or combination, stock split, reverse stock split, stock
dividend or rights issued in respect of such stock, or any similar event shall
occur, the Merger Consideration shall be adjusted accordingly to provide to the
holders of Company Stock the same economic effect as contemplated by this
Agreement prior to such event.
2.7. DIRECTORS OF SURVIVING CORPORATION. At the Effective Time of
the Merger, the Board of Directors of the Surviving Corporation shall be
comprised of the persons serving as directors of Merger Sub immediately prior to
the Effective Time of the Merger. Such persons shall serve until the earlier of
their resignation or removal or until their respective successors are duly
elected and qualified.
2.8. EXECUTIVE OFFICERS OF SURVIVING CORPORATION. At the Effective
Time of the Merger, the executive officers of the Surviving Corporation shall be
comprised of the persons serving as executive officers of Merger Sub immediately
prior to the Effective Time of the Merger. Such persons shall serve until the
earlier of their resignation or termination.
2.9. NO FURTHER OWNERSHIP RIGHTS IN STOCK. All Merger Consideration
delivered upon the surrender for exchange of shares of Company Stock in
accordance with the terms hereof shall be deemed to have been delivered in full
satisfaction of all rights pertaining to ownership of such shares of stock. At
and after the Effective Time of the Merger, there shall be no further
registration of transfers on the stock transfer books of the Surviving
Corporation of the shares of Company Stock which were outstanding immediately
prior to the Effective Time of the Merger, and upon delivery of the Merger
Consideration upon surrender for exchange of Company Stock, each such share of
Company Stock shall be canceled.
2.10. ABSENCE OF CONTROL. Subject to any specific provisions of this
Agreement, it is the intent of the parties hereto that neither Parent nor Merger
Sub by reason of this Agreement shall be deemed (until consummation of the
transactions contemplated hereby) to
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control, directly or indirectly, Company and shall not exercise, or be deemed to
exercise, directly or indirectly, a controlling influence over the management or
policies of Company.
2.11. ARTICLES OF INCORPORATION AND BYLAWS. The Articles of
Incorporation of Company as in effect immediately prior to the Effective Time of
the Merger, shall be amended as of the Effective Time of the Merger to read in
their entirety as set forth in Exhibit C, and as so amended shall be the
Articles of Incorporation of the Surviving Corporation. The Bylaws of Merger Sub
as in effect immediately prior to the Effective Time of the Merger shall be the
Bylaws of the Surviving Corporation.
ARTICLE 3.
THE CLOSING
3.1. CLOSING AND CLOSING DATE. Subject to the provisions of Articles
9, 10 and 11 hereof, the closing of the transactions contemplated by this
Agreement (the "CLOSING") shall take place no later than the third business day
following the satisfaction or waiver of the last of the conditions specified in
Articles 9, 10, and 11 hereof (other than any such conditions which are by their
terms to be satisfied or waived as of the Closing) but in no event prior to the
first Friday of December, 2005, or, if later, the date as of which any notices
legally required to be delivered to customers or other Persons with respect to
the Subsequent Mergers prior to completion thereof shall have been satisfied;
PROVIDED that, in any event, Parent may require that the Closing occur on a
Friday during such period which is a Business Day. The date on which the Closing
actually occurs is referred to as the "CLOSING DATE."
3.2. ARTICLES OF MERGER. If all conditions to the obligations of the
parties shall have been satisfied or waived by the party entitled to the
benefits thereof, the parties shall, at the Closing, duly execute the Articles
of Merger for filing with the Nebraska Secretary of State and promptly
thereafter take all steps necessary or desirable to consummate the Merger in
accordance with all applicable Laws.
3.3. FURTHER ASSURANCES. At the Closing, the parties hereto shall
deliver, or cause to be delivered, such documents or certificates as may be
necessary in the reasonable opinion of counsel for any of the parties, to
effectuate the transactions contemplated by this Agreement.
ARTICLE 4.
REPRESENTATIONS AND WARRANTIES OF COMPANY
The following representations and warranties by Company to Parent and
Merger Sub are qualified by the Company Disclosure Letter. The Company
Disclosure Letter shall refer to the representation or warranty to which
exceptions or matters disclosed therein relate; PROVIDED, HOWEVER, that an
exception or matter disclosed with respect to one representation or warranty
shall also be deemed disclosed with respect to each other warranty or
representation to which the exception or matter reasonably relates. The
inclusion of any item in such Company Disclosure Letter shall not be deemed an
admission that such item is a material fact, event or circumstance
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or that such item has or had, or would reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect.
4.1. INCORPORATION, STANDING AND POWER.
(a) Company has been duly organized, is validly existing and
in good standing as a corporation under the laws of the State of Nebraska
and is duly registered as a savings and loan holding company under HOLA
and qualified as a savings and loan holding company of the type described
in Section 10(c)(3)(A) of HOLA. Bank is a federal savings bank duly
organized, validly existing and in good standing under Section 5 of HOLA
and is authorized by the OTS to conduct the business of a savings bank.
(b) Company engages only in activities (and holds properties
only of the types) permitted by the State of Nebraska and the OTS and the
rules and regulations promulgated thereby (including but not limited to
the HOLA). Bank engages only in activities (and holds properties only of
the types) permitted by the OTS and the FDIC and the rules and regulations
promulgated thereby. Except for its ownership of Bank, Company does not
own any stock or equity interest in any depository institution (as defined
in 12 U.S.C. Section 1813(c)(1)). Bank is a qualified thrift lender
pursuant to Section 10(m) of HOLA, its deposits are insured by the FDIC
through the Savings Association Insurance Fund ("SAIF") in the manner and
to the fullest extent provided by law and Bank has paid all deposit
insurance premiums and assessments required by applicable law and
regulations. Bank is a member in good standing of the Federal Home Loan
Bank of Topeka ("FHLB"). Each of the other Company Subsidiaries has been
duly organized, is validly existing and in good standing under the laws of
its state of incorporation or organization which in each case is set forth
in the Company Disclosure Letter. Company and each of the Company
Subsidiaries has all requisite corporate power and authority to own, lease
and operate its properties and assets and to carry on its business as
presently conducted and is duly licensed or qualified to do business in
each jurisdiction in which the nature of the business conducted by it or
the character or location of the properties owned or leased by it makes
such licensing or qualification necessary, except where the failure to be
so licensed or qualified, individually or in the aggregate, would not have
nor reasonably be expected to have a Material Adverse Effect. The copies
of the Articles of Incorporation and Bylaws of Company which have
previously been made available to Parent are true, complete and correct
copies of such documents. Company has furnished to Parent true and correct
copies of each of the Company Subsidiaries' Articles of Incorporation or
Certificate of Incorporation, as the case may be, and Bylaws, as amended.
4.2. CAPITALIZATION.
(a) As of the date of this Agreement, the authorized capital
stock of Company consists of 120,000,000 shares of Company Stock, of which
38,150,915 shares are outstanding, and 10,000,000 shares of preferred
stock, none of which are outstanding. All of the outstanding shares of
Company Stock are duly authorized, validly issued, fully paid and
nonassessable and are free of preemptive rights. Except for Company Stock
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Options covering 4,185,769 shares of Company Stock granted pursuant to the
Company Stock Option Plans, there are no outstanding options, warrants or
other rights in or with respect to the unissued shares of Company Stock
nor any securities convertible into such stock, and Company is not
obligated to issue any additional shares of its common stock or any
additional options, warrants or other rights in or with respect to the
unissued shares of such stock or any other securities convertible into or
exchangeable for such stock. Company has furnished Parent a list (the
"COMPANY OPTION LIST") setting forth the name of each holder of a Company
Stock Option, the number of shares of Company Stock covered by each such
option, the exercise price per share and the expiration date of each such
option.
(b) The authorized capital stock of Bank consists of
25,000,000 shares of common stock, $0.01 par value per share, 8,977,560 of
which are outstanding and 10,000,000 shares of preferred stock, without
par value, of which 600,000 shares have been designated Series A and
150,000 shares have been designated Series B, none of which are
outstanding. All of the outstanding shares of such common stock of Bank
are duly authorized, validly issued, fully paid and nonassessable, are
free of preemptive rights and are owned of record and beneficially by
Company free and clear of any Encumbrances. There are no outstanding
options, warrants or other rights in or with respect to the unissued or
the issued or outstanding shares of such common stock or any other
securities convertible into or exchangeable for such stock, and Bank is
not obligated to issue any additional shares of its common stock or any
options, warrants or other rights in or with respect to the unissued
shares of its common stock or any other securities convertible into such
stock.
(c) The authorized and outstanding capital stock of each of
the Company Subsidiaries other than Bank is as described in the Company
Disclosure Letter. All of the outstanding shares of such capital stock are
duly authorized, validly issued, fully paid and nonassessable and are
owned of record and beneficially by Company or Bank or a Subsidiary of
Company or Bank free and clear of any Encumbrances. There are no
outstanding options, warrants or other rights in or with respect to the
unissued or the issued or outstanding shares of such capital stock or any
other securities convertible into such stock, and none of such Company
Subsidiaries is obligated to issue any additional shares of its capital
stock or any options, warrants or other rights in or with respect to the
unissued shares of its capital stock or any other securities convertible
into such stock. Each Subsidiary is a legal investment for a unitary
savings and loan holding company and, with respect to those owned by Bank,
for a federal savings bank.
(d) Neither Company nor any Subsidiary thereof has or is bound
by any outstanding subscriptions, options, warrants, calls, commitments or
agreements of any character providing for the purchase, sale, or issuance
of any shares of capital stock or any other equity security of any
Subsidiary of Company or any securities representing the right to purchase
or otherwise receive any shares of capital stock or any other equity
security of such Subsidiary, other than the Company Stock Options.
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(e) No bonds, debentures, notes or other indebtedness having
the right generally to vote on any matters on which stockholders of
Company may vote are issued and outstanding.
4.3. SUBSIDIARIES. Other than the Company Subsidiaries and as set
forth in the Company Disclosure Letter, Company does not have any other
Subsidiaries and does not own, directly or indirectly (except as a pledgee
pursuant to loans or upon acquisition in satisfaction of debt previously
contracted), the outstanding stock or equity or other voting interest in any
Person.
4.4. FINANCIAL STATEMENTS. Company has previously furnished to
Parent a copy of the Financial Statements of Company and the Financial
Statements of Bank. The Financial Statements of Company and the Financial
Statements of Bank: (a) in the case of Company, present fairly the consolidated
financial condition of Company, as of the respective dates indicated and its
consolidated statement of income, comprehensive income, stockholders' equity and
cash flows, for the respective periods then ended; (b) in the case of Bank,
present fairly its financial condition, as of the respective dates indicated,
and its statement of income, for the respective periods then ended; and (c) have
been prepared in accordance with GAAP consistently applied (except as otherwise
indicated therein and subject to normal year-end audit adjustments in the case
of unaudited statements, and except that the Financial Statements of Bank have
been prepared in accordance with the Instructions thereto).
4.5. REPORTS AND FILINGS.
(a) Company has timely filed all required reports, proxy
statements, schedules, registration statements and other documents with
the SEC since December 31, 2001 (the "COMPANY SEC DOCUMENTS"). As of their
respective dates of filing with the SEC (or, if amended, supplemented or
superseded by a filing prior to the date hereof, as of the date of such
filing), the Company SEC Documents complied in all material respects with
the requirements of the Securities Act or the Exchange Act, as the case
may be, and the rules and regulations of the SEC thereunder applicable to
such Company SEC Documents, and none of the Company SEC Documents when
filed contained any untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary to make
the statements therein, in light of the circumstances under which they
were made, not misleading. The consolidated financial statements of
Company included in the Company SEC Documents complied as to form, as of
their respective dates of filing with the SEC, in all material respects
with all applicable accounting requirements and with the published rules
and regulations of the SEC with respect thereto.
(b) In addition to the Company SEC Documents, which are
addressed in subsection (a) above, each of Company and the Company
Subsidiaries have timely filed all reports, returns, registrations and
statements, together with any amendments required to be made with respect
thereto, that they were required to file since December 31, 2001 with (a)
the OTS, (b) the FDIC, and (c) any other applicable Governmental Entity,
including taxing authorities (collectively, "COMPANY GOVERNMENTAL
FILINGS"). No administrative actions have been taken or threatened or
orders issued in
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connection with such Company Governmental Filings. As of their respective
dates, each of such Company Governmental Filings complied in all material
respects with all Laws enforced or promulgated by the Governmental Entity
with which it was filed (or was amended so as to be in compliance promptly
following discovery of any such noncompliance). Any financial statement
contained in any of such Company Governmental Filings fairly presented in
all material respects the financial position of Company on a consolidated
basis, Company alone or each of the Company Subsidiaries alone, as the
case may be, and was prepared in accordance with GAAP or applicable
banking regulations and Instructions applied on a consistent basis during
the periods involved, except as may be disclosed therein, as of the dates
and for the periods shown. Company has furnished to Parent true and
correct copies of all material Company Governmental Filings filed by
Company since December 31, 2003.
4.6. AUTHORITY OF COMPANY AND BANK.
(a) The execution and delivery by Company of this Agreement
and, subject to the requisite approval of the stockholders of Company of
this Agreement and the Merger, the consummation of the transactions
contemplated hereby have been duly and validly authorized by all necessary
corporate action on the part of Company including, without limitation, the
vote of the Board of Directors of Company (which vote was unanimous)
approving this Agreement and the Merger. This Agreement is a valid and
binding obligation of Company enforceable in accordance with its terms,
except as the enforceability thereof may be limited by bankruptcy,
liquidation, receivership, conservatorship, insolvency, moratorium or
other similar Laws affecting the rights of creditors generally and by
general equitable principles.
(b) Except as set forth in the Company Disclosure Letter,
neither the execution and delivery by Company of this Agreement or by the
Bank of the Merger Agreement, the consummation of the transactions
contemplated herein or therein, nor compliance by Company or Bank with any
of the provisions hereof or thereof, will: (a) conflict with or result in
a breach of any provision of its or any of the Company Subsidiaries'
Articles or Certificates of Incorporation, as amended, or Bylaws, as
amended; (b) constitute a breach of or result in a default (or give rise
to any rights of termination, cancellation or acceleration, or any right
to acquire any securities or assets) under any of the terms, conditions or
provisions of any note, bond, mortgage, indenture, franchise, license,
permit, lease, agreement or other instrument or obligation to which
Company or any of the Company Subsidiaries is a party, or by which Company
or any of the Company Subsidiaries or any of their respective properties
or assets are bound; (c) result in the creation or imposition of any
Encumbrance of material consequence on any of the properties or assets of
Company or any of the Company Subsidiaries; or (d) violate any order,
writ, injunction, decree, statute, rule or regulation applicable to
Company or any of the Company Subsidiaries or any of their respective
properties or assets, except (other than in the case of clause (a)) as
would not reasonably be expected to have a Material Adverse Effect on the
Company. No consent of, approval of, notice to or filing with any
Governmental Entity having jurisdiction over any aspect of the business or
assets of Company or the Company Subsidiaries, and no consent of, approval
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of or notice to any other Person, is required in connection with the
execution and delivery by Company of this Agreement or the consummation by
Company of the Merger or the execution and delivery by Bank of the Merger
Agreement, except (i) the approval of this Agreement by the stockholders
of Company (including the filing of the Proxy Statement with the SEC);
(ii) the approval of the FDIC under the Bank Merger Act; (iii) the
approval of the OTS under 12 C.F.R. ss. 574.7 and 563.22(1)(i) and (h)(1);
(iv) the approval of the DFI under the CFC; (v) the filing of a notice
with the FRB under 12 C.F.R. ss. 225.12(d)(2); (vi) the filing of the
Articles of Merger with the Secretary of State of the State of Nebraska;
(vii) with respect to the Subsequent Mergers, the filing of the Merger
Agreement (or the articles of merger provided for therein) with the
Secretaries of State of the States of California and Nebraska and the DFI;
(viii) filings under state corporate, banking, securities, insurance or
other laws in states where the Company or any Company Subsidiary maintains
offices or transacts business; and (ix) any filings required to be made
with the U.S. Federal Trade Commission or Department of Justice.
4.7. INSURANCE. Company and its Subsidiaries are insured with
reputable insurers against such risks and in such amounts as the management of
Company reasonably has determined to be prudent in accordance with industry
practices. Set forth in the Company Disclosure Letter is a list, as of the date
hereof, of all policies of insurance carried and owned by either Company or the
Company Subsidiaries showing the name of the insurance company and agent, the
nature of the coverage, the policy limit, the annual premiums and the expiration
dates. All such insurance policies and bonds are in full force and effect. No
insurer under any such policy or bond has canceled or indicated in writing an
intention to cancel or, as of the date hereof, indicated in writing an intention
not to renew any such policy or bond or generally disclaimed liability
thereunder. None of Company or any of the Company Subsidiaries is in default
under any such policy or bond which is material to the operations of Company and
the Company Subsidiaries taken as a whole and all material claims thereunder
have been filed in a timely fashion. Except for policies insuring against
potential liabilities of officers, directors and employees of Company and its
Subsidiaries, Company or the relevant Subsidiary thereof is the sole beneficiary
of such policies. All premiums and other payments due under any such policy have
been paid, and all claims thereunder have been filed, in due and timely fashion.
4.8. PERSONAL PROPERTY. Each of Company and the Company Subsidiaries
has good title to all its material properties and assets, other than real
property, owned or stated to be owned by Company or the Company Subsidiaries,
free and clear of all Encumbrances except: (a) as set forth in the Financial
Statements of Company; (b) for Encumbrances for current taxes not yet due or
taxes being contested in good faith by appropriate proceedings (any such
contests existing as of the date hereof being reflected in the Company
Disclosure Letter); (c) for Encumbrances incurred or properties or assets sold
in the ordinary course of business; or (d) for Encumbrances that are not
substantial in character, amount or extent and that do not materially detract
from the value, or interfere with present use, of the property subject thereto
or affected thereby, or otherwise materially impair the conduct of business of
Company or the Company Subsidiaries. All leases of personal property material to
Company or any of its Subsidiaries under which Company or any Subsidiary is a
lessee are valid and binding in accordance with their respective terms (other
than due to the ordinary expiration of the term thereof), there is not
- 16 -
under such lease any material existing default by Company or such Subsidiary or
any event which with notice or lapse of time or both would constitute such a
default, except as would not reasonably be expected to have, in the aggregate, a
Material Adverse Effect.
4.9. REAL ESTATE. Each of Company and the Company Subsidiaries has
duly recorded or caused to be recorded, in the appropriate county, all
recordable interests in all material real property, including leaseholds and
other interests in such real property (other than easements or security
interests) owned or, if recordable by the Company under applicable law, leased
by Company or the Company Subsidiaries. Either Company or the Company
Subsidiaries has good and marketable title to such real property, and valid
leasehold interests in such leaseholds, free and clear of all Encumbrances,
except (a) for rights of lessors, co-lessees or sublessees in such matters that
are reflected in the lease; (b) for current taxes not yet due and payable or
taxes being contested in good faith by appropriate proceedings (any such
contests existing as of the date hereof being reflected in the Company
Disclosure Letter); or (c) for such Encumbrances, if any, as do not materially
detract from the value of or materially interfere with the present use,
occupancy or operation of such property. All leases of real property material to
Company or any of its Subsidiaries under which Company or a Subsidiary is a
lessee are valid and binding in accordance with their respective terms (other
than due to the ordinary expiration of the term thereof), there is not under
such lease any material existing default by Company or such Subsidiary or any
event which with notice or lapse of time or both would constitute such a
default, and Company or such Subsidiary quietly enjoys the premises provided for
in such lease, except as would not reasonably be expected to have, in the
aggregate, a Material Adverse Effect.
4.10. LITIGATION. Except as disclosed in the Company SEC Documents
filed prior to the date of this Agreement or as set forth in the Company
Disclosure Letter, there is no suit, action, investigation, inquiry or
proceeding (whether judicial, arbitral, administrative or other) pending or, to
the knowledge of Company, threatened, against or affecting Company or any
Subsidiary of Company as to which there is a reasonable possibility of an
adverse outcome and which would, individually or in the aggregate, have or
reasonably be expected to have a Material Adverse Effect, nor is there any
judgment, decree, injunction, rule or order of any Governmental Entity
outstanding against Company or any Subsidiary of Company having or which would
reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect. There are no material judgments, decrees, stipulations or orders
against Company or the Company Subsidiaries or enjoining their respective
directors, officers or employees in respect of, having or which could reasonably
be expected to have a Material Adverse Effect or the effect of which is to
prohibit any business practice or the acquisition of any property or the conduct
of business in any area.
4.11. TAXES.
(a) (i) All Tax Returns which could be of material financial
significance to the Company required to be filed by or on behalf of
Company or the Company Subsidiaries or the Affiliated Group(s) of which
any of them is or was a member, have been duly and timely filed with the
appropriate taxing authorities in all jurisdictions in which such Tax
Returns are required to be filed (after giving effect to any valid
extensions of time in which to make such filings), and all such filed Tax
Returns were true, complete and correct in all material respects; (ii) all
Taxes due and payable by
- 17 -
or on behalf of Company or the Company Subsidiaries, either directly, as
part of an Affiliated Group Tax Return, or otherwise, have been fully and
timely paid, except to the extent adequately reserved therefor in
accordance with GAAP and/or applicable regulatory accounting principles or
banking regulations consistently applied on Company's balance sheet, and
adequate reserves or accruals for Taxes have been provided in Company's
balance sheet with respect to any period through the date thereof for
which Tax Returns have not yet been filed or for which Taxes are not yet
due and owing; and (iii) no agreement, waiver or other document or
arrangement extending or having the effect of extending the period for
assessment or collection of Taxes (including, but not limited to, any
applicable statute of limitation) has been executed or filed with any
taxing authority by or on behalf of Company, the Company Subsidiaries or
any of their Subsidiaries, or any Affiliated Group(s) of which any of them
is or was a member.
(b) Company and the Company Subsidiaries have complied in all
material respects with all applicable Laws relating to the payment and
withholding of Taxes and have duly and timely withheld from any salaries,
wages or other compensation paid to any employee or independent
contractor, and have paid over to the appropriate taxing authorities, all
amounts required to be so withheld and paid over for all periods under all
applicable Laws.
(c) Company has furnished to Parent true and correct copies of
(i) all income or franchise Tax Returns of Company and the Company
Subsidiaries relating to all taxable periods beginning after December 31,
2000, and (ii) any audit report issued within the last three years
relating to any Taxes due from or with respect to Company or the Company
Subsidiaries with respect to their respective income, assets or
operations.
(d) No claim has been made by a taxing authority in a
jurisdiction where Company or the Company Subsidiaries do not file an
income or franchise Tax Return such that Company or the Company
Subsidiaries are or may be subject to income or franchise taxation by that
jurisdiction.
(e) (i) All deficiencies asserted or assessments made as a
result of any examinations by any taxing authority of the Tax Returns of
or covering or including Company or the Company Subsidiaries have been
fully paid, and, to the best of Company's knowledge, there are no other
audits or investigations by any taxing authority in progress, nor have
Company or the Company Subsidiaries received any written notice from any
taxing authority that it intends to conduct such an audit or
investigation; (ii) no issue has been raised by any taxing authority in
any current or prior examination which, by application of the same or
similar principles, could reasonably be expected to result in a material
proposed deficiency against Company or the Company Subsidiaries for any
subsequent taxable period.
(f) Neither Company or the Company Subsidiaries nor any other
Person on behalf of Company or the Company Subsidiaries has (i) filed a
consent pursuant to Section 341(f) of the Code or agreed to have Section
341(f)(2) of the Code apply to any disposition of a subsection (f) asset
(as such term is defined in Section 341(f)(4) of the Code) owned by
Company or the Company Subsidiaries,
- 18 -
(ii) agreed to or is required to make any adjustments pursuant to Section
481(a) of the Code or any similar provision of state, local or foreign Law
by reason of a change in accounting method initiated by Company or the
Company Subsidiaries or has any knowledge that the IRS has proposed in
writing any such adjustment or change in accounting method, or has any
application pending with any taxing authority requesting permission for
any changes in accounting methods that relate to the business or
operations of Company or the Company Subsidiaries, or (iii) executed or
entered into a closing agreement pursuant to Section 7121 of the Code or
any predecessor provision thereof or any similar provision of state, local
or foreign Law with respect to Company or the Company Subsidiaries.
(g) No property owned by Company or the Company Subsidiaries
is (i) property required to be treated as being owned by another Person
pursuant to provisions of Section 168(f)(8) of the Internal Revenue Code
of 1954, as amended and in effect immediately prior to the enactment of
the Tax Reform Act of 1986, (ii) constitutes "tax exempt use property"
within the meaning of Section 168(h)(1) of the Code or (iii) is
"tax-exempt bond financed property" within the meaning of Section
168(g)(5) of the Code.
(h) Neither Company (except with the Company Subsidiaries) nor
any of the Company Subsidiaries (except with Company and the Company
Subsidiaries) is a party to any tax allocation, indemnification or sharing
agreement (or similar agreement or arrangement), whether written or not
written, pursuant to which it will have any obligation to make any
payments after the Closing.
(i) Neither Company nor any of the Company Subsidiaries has
been a member of an Affiliated Group (other than a group whose common
parent was Company).
(j) Neither Company nor any of the Company Subsidiaries has
any liability for the Taxes of any person (other than Company and any of
the Company Subsidiaries) under section 1.1502-6 of the Treasury
Regulations (or any similar provision of state, local or foreign Law), as
a transferee or successor, by contract, or otherwise.
(k) Neither Company nor any of the Company Subsidiaries has
any request for a ruling or determination letter in respect of Taxes
pending between Company or any Company Subsidiary and any taxing
authority.
(l) There are no material liens as a result of any due and
unpaid Taxes upon any of the assets of Company or the Company
Subsidiaries.
(m) Company and the Company Subsidiaries have disclosed on all
relevant Tax Returns all positions taken therein that could reasonably be
expected to give rise to a substantial underpayment penalty within the
meaning of Section 6662 of the Code (or comparable provisions of
applicable state income tax Laws). Neither Company nor any Company
Subsidiary has participated in any "reportable transaction" or "listed
- 19 -
transaction," as those terms are defined in Section 6707A(c) of the Code
(or comparable provisions of applicable state income tax Laws).
4.12. COMPLIANCE WITH CHARTER PROVISIONS AND LAWS AND REGULATIONS.
(a) Neither Company nor any of the Company Subsidiaries is in
default under or in breach or violation of (i) any provision of its
Articles or Certificate of Incorporation, as amended, or Bylaws, as
amended, or (ii) any Law, except, with respect to this clause (ii), for
such violations as would not have, or would not reasonably be expected to
have, individually or in the aggregate, a Material Adverse Effect. Except
for routine examinations by Federal or state Governmental Entities charged
with the supervision or regulation of federal savings banks or savings and
loan holding companies or engaged in the insurance of bank deposits, to
the best knowledge of Company, no investigation or inquiry by any
Governmental Entity with respect to Company or any of the Company
Subsidiaries is pending or threatened. There are no material unresolved
violations, criticisms or exceptions by any Governmental Entity with
respect to any report or statement relating to any examination of Company
or any of its Subsidiaries.
(b) To Company's knowledge, (i) each of Company and the
Company Subsidiaries is in compliance with all Environmental Regulations;
(ii) there are no Tanks on or about Company Property; (iii) there are no
Hazardous Materials on, below or above the surface of, or migrating to or
from Company Property; and (iv) without limiting Section 4.10 hereof or
the foregoing representations and warranties contained in clauses (i)
through (iii), there is no claim, action, suit, or proceeding or notice
thereof before any Governmental Entity pending against Company or the
Company Subsidiaries and there is no outstanding judgment, order, writ,
injunction, decree, or award against or affecting Company Property
relating to the foregoing representations (i)-(iii), in each case the
noncompliance with which, or the presence of which, would have or would
reasonably be expected to have a Material Adverse Effect. Company has
furnished to Parent all environmental assessments or reports with respect
to each material piece of Company Property which are in Company's
possession or control. For purposes of this Agreement, the term
"ENVIRONMENTAL REGULATIONS" shall mean all applicable statutes,
regulations, rules, ordinances, codes, licenses, permits, orders,
approvals, plans, authorizations, concessions, franchises, and similar
items, of all Governmental Entities and all applicable judicial,
administrative, and regulatory decrees, judgments, and orders relating to
the protection of human health or the environment, including, without
limitation, those pertaining to reporting, licensing, permitting,
investigation, and remediation of emissions, discharges, releases, or
threatened releases of Hazardous Materials, chemical substances,
pollutants, contaminants, or hazardous or toxic substances, materials or
wastes whether solid, liquid, or gaseous in nature, into the air, surface
water, groundwater, or land, or relating to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport, or handling of
chemical substances, pollutants, contaminants, or hazardous or toxic
substances, materials, or wastes, whether solid, liquid, or gaseous in
nature and all requirements pertaining to the protection of the health and
safety of employees or the public. "COMPANY PROPERTY" shall mean real
estate currently owned, leased, or otherwise used by Company or the
Company
- 20 -
Subsidiaries. "TANK" shall mean treatment or storage tanks, gas or oil
▇▇▇▇▇ and associated piping transportation devices. "HAZARDOUS MATERIALS"
shall mean any substance: (1) the presence of which requires investigation
or remediation under any Law; (2) which is or becomes defined as a
hazardous waste, hazardous substance, hazardous material, used oil,
pollutant or contaminant under any federal, state or local statute,
regulation, rule or ordinance or amendments thereto including, without
limitation, the Comprehensive Environmental Response, Compensation and
Liability Act (42 U.S.C. Section 9601, ET SEQ.); the Resource Conservation
and Recovery Act (42 U.S.C. Section 6901, ET SEQ.); the Clean Air Act, as
amended (42 U.S.C. Section 7401, ET SEQ.); the Federal Water Pollution
Control Act, as amended (33 U.S.C. Section 1251, ET SEQ.); the Toxic
Substances Control Act, as amended (15 U.S.C. Section 9601, ET SEQ.); the
Occupational Safety and Health Act, as amended (29 U.S.C. Section 651; the
Emergency Planning and Community Right-to-Know Act of 1986 (42 U.S.C.
Section 11001, ET SEQ.); the Mine Safety and Health Act of 1977, as
amended (30 U.S.C. Section 801, et seq.); the Safe Drinking Water Act (42
U.S.C. Section 300f, ET SEQ.); and all comparable state and local Laws;
(3) comparable Laws of other jurisdictions; or (4) the presence of which
causes or threatens to cause a nuisance, trespass or other common law tort
upon real property or adjacent properties or poses or threatens to pose a
hazard to the health or safety of persons or without limitation, which
contains gasoline, diesel fuel or other petroleum hydrocarbons; or (5)
polychlorinated biphenyls (PCBs), asbestos, lead-containing paints or urea
formaldehyde foam insulation.
4.13. EMPLOYEES. There are no controversies pending or, to the best
of Company's knowledge, threatened between either Company or the Company
Subsidiaries and any of their respective employees that would or would
reasonably be expected to have a Material Adverse Effect. Neither Company nor
any of the Company Subsidiaries is a party to any collective bargaining
agreement with respect to any of their respective employees or any labor
organization to which their respective employees or any of them belong.
4.14. BROKERS, FINDERS AND FINANCIAL ADVISORS. Except for the
obligations set forth in the ▇▇▇▇▇▇▇ ▇▇▇▇▇ Agreement and the Sandler ▇'▇▇▇▇▇
Agreement, copies of which have heretofore been delivered to Parent, neither
Company nor any of the Company Subsidiaries is a party to or obligated under any
agreement with any broker, finder or financial advisor relating to the
transactions contemplated hereby, and neither the execution of this Agreement
nor the consummation of the transactions provided for herein will result in any
liability or any commitment for fees or commissions to any broker, finder or
financial advisor.
4.15. SCHEDULED CONTRACTS. Except as set forth in the Company
Disclosure Letter or as disclosed in the Company SEC Documents (each item listed
or required to be listed in such Company Disclosure Letter or the Company SEC
Documents being referred to herein as a "SCHEDULED CONTRACT"), neither Company
nor the Company Subsidiaries is a party or otherwise subject to:
(a) any employment, deferred compensation, bonus or consulting
contract;
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(b) any advertising, brokerage, licensing, dealership,
representative or agency relationship or contract requiring payment by
Company or the Company Subsidiaries of $250,000 or more per annum;
(c) any contract or agreement that restricts Company or the
Company Subsidiaries (or would restrict any Affiliate of Company or the
Company Subsidiaries or the Surviving Corporation (including Merger Sub
and its Subsidiaries) after the Effective Time of the Merger) from
competing in any line of business with any Person or using or employing
the services of any Person;
(d) any lease of real or personal property providing for
annual lease payments by or to Company or the Company Subsidiaries in
excess of $250,000 per annum other than (A) financing leases entered into
in the ordinary course of business in which Company or the Company
Subsidiaries is lessor and (B) leases of real property presently used by
the Company Subsidiaries as offices or other facilities;
(e) any mortgage, pledge, conditional sales contract, security
agreement, option, or any other similar agreement with respect to any
interest of Company or the Company Subsidiaries (other than as mortgagor
or pledgor in the ordinary course of its banking business or as mortgagee,
secured party or deed of trust beneficiary in the ordinary course of its
banking business or as security for deposits of Governmental Entities in
the ordinary course of its banking business) in personal property having a
value of $250,000 or more;
(f) any stock purchase, stock option, stock bonus, stock
ownership, profit sharing, group insurance, bonus, deferred compensation,
severance pay, pension, retirement, savings or other incentive, welfare or
employment plan or material agreement providing benefits to any present or
former employees, officers or directors of Company or the Company
Subsidiaries (including without limitation any agreement, plan or
arrangement providing for the payment of any compensation or benefits
following a change-of-control with respect to Company, whether or not
subject to further triggering events);
(g) any agreement to acquire equipment or any commitment to
make capital expenditures of $250,000 or more;
(h) other than agreements entered into in the ordinary course
of business, including sales of other real estate owned, any agreement for
the sale of any property or assets in which Company or the Company
Subsidiaries has an ownership interest which is of material significance
to the operations of the Company or the Bank or for the grant of any
preferential right to purchase any such property or asset;
(i) any agreement for the borrowing of any money (other than
(i) liabilities or interbank borrowings made in the ordinary course of its
banking business and reflected or to be reflected in the financial records
of Company or the Company Subsidiaries, (ii) short-term borrowings
(including refinancings thereof) made at then prevailing market rates and
terms consistent with prior practice and (iii) indebtedness of
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the Company or any of its wholly-owned Subsidiaries to the Company or any
of its wholly-owned Subsidiaries);
(j) any guarantee or indemnification which involves the sum of
$250,000 or more, other than letters of credit or loan commitments issued
in the normal course of business and customary director, officer and
employee indemnification provisions;
(k) any material agreement which would be terminable other
than by Company or the Company Subsidiaries as a result of the
consummation of the transactions contemplated by this Agreement;
(l) any contract of participation with any other bank in any
loan in excess of $1 million or any sales of assets of Company or the
Company Subsidiaries with recourse of any kind to Company or the Company
Subsidiaries except the sale of mortgage loans, servicing rights,
repurchase or reverse repurchase agreements, securities or other financial
transactions in the ordinary course of business;
(m) any agreement providing for the sale or servicing of any
loan or other asset which constitutes a "recourse arrangement" under
applicable regulation or policy promulgated by a Governmental Entity
(except for agreements for the sale of guaranteed portions of loans
guaranteed in part by the U.S. Small Business Administration and related
servicing agreements);
(n) any contract relating to the provision of data processing
services to Company or the Company Subsidiaries which provides for
payments which in the aggregate (including any cancellation or termination
payments or the effect of any required minimum notice periods prior to
cancellation or termination) exceed $500,000;
(o) any contract or commitment to purchase or sell bulk
packages of mortgage servicing rights; or
(p) any other agreement of any other kind which involves
future payments or receipts or performances of services or delivery of
items requiring payment of $250,000 per annum or more to or by Company or
the Company Subsidiaries other than payments made under or pursuant to
loan agreements, letters of credit and participation agreements entered
into in the ordinary course of business.
Complete copies of all Scheduled Contracts, including all amendments and
supplements thereto, entered into on or before the date hereof have been
delivered or made available to Parent.
4.16. PERFORMANCE OF OBLIGATIONS. Each Scheduled Contract is valid,
binding and in full force and effect and is enforceable in accordance with its
terms, except as enforcement thereof may be limited by bankruptcy, liquidation,
receivership, conservatorship, insolvency, moratorium, or other similar laws
affecting the rights of creditors generally and by general equitable principles.
Each of Company and the Company Subsidiaries has performed in all material
respects all respects all of the obligations required to be performed by it to
date and
- 23 -
is not in default under or in breach of any material term or provision of any
Scheduled Contract to which it is a party, is subject or is otherwise bound, and
no event has occurred that, with the giving of notice or the passage of time or
both, would constitute such default or breach, except where such failure of
performance, breach or default would not have, or would not reasonably be
expected to have, individually or in the aggregate, a Material Adverse Effect.
Except for loans, letters of credit and leases made by Company or the Company
Subsidiaries in the ordinary course of business, to Company's knowledge, no
party to any Scheduled Contract is in default thereunder as of the date hereof.
4.17. CERTAIN MATERIAL CHANGES. Except as specifically required,
permitted or effected by this Agreement, or as disclosed in the Company SEC
Documents, since March 31, 2005, there has not been, occurred or arisen any of
the following (whether or not in the ordinary course of business unless
otherwise indicated):
(a) any change in any of the assets, liabilities, results of
operations, permits, methods of accounting or accounting practices,
business, or manner of conducting business, of Company or the Company
Subsidiaries or any other event or development that has had, or would
reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect;
(b) any damage, destruction or other casualty loss (whether or
not covered by insurance) that has had, or would reasonably be expected to
have, a Material Adverse Effect;
(c) any amendment, modification or termination of any
existing, or entry into any new, material contract or permit that has had,
or would reasonably be expected to have, a Material Adverse Effect;
(d) any disposition by Company or the Company Subsidiaries of
an asset the lack of which has had, or would reasonably be expected to
have, a Material Adverse Effect; or
(e) any direct or indirect redemption, purchase or other
acquisition by Company or the Company Subsidiaries of any equity
securities or any declaration, setting aside or payment of any dividend or
other distribution on or in respect of Company Stock whether consisting of
money, other personal property, real property or other things of value
(except for dividends permitted by Section 6.1(b), regular quarterly cash
dividends and acquisitions of Company Stock pursuant to cashless exercise
provisions of any Company Stock Options or pursuant to the surrender of
shares to Company or the withholding of shares by Company to cover tax
withholding obligations under Company Stock Plans).
4.18. LICENSES AND PERMITS. Each of Company and the Company
Subsidiaries has all material licenses and permits that are necessary for the
conduct of its business, and such licenses are in full force and effect in all
material respects. The respective properties, assets, operations and businesses
of Company and the Company Subsidiaries are and have been maintained and
conducted, in all material respects, in compliance with all such applicable
- 24 -
licenses and permits. To the knowledge of Company, no proceeding is pending or
threatened by any Governmental Entity which seeks to revoke or limit any such
licenses or permits.
4.19. UNDISCLOSED LIABILITIES. Except for liabilities or obligations
which do not have, or would not reasonably be expected to have, individually or
in the aggregate, a Material Adverse Effect, neither Company nor the Company
Subsidiaries has any liabilities or obligations, either accrued or contingent,
that have not been: (a) fully reflected or reserved against in the Financial
Statements of Company; (b) incurred subsequent to March 31, 2005 in the ordinary
course of business consistent with past practices; or (c) disclosed in the
Company Disclosure Letter.
4.20. EMPLOYEE BENEFIT PLANS.
(a) Company has previously made available to Parent copies of
each "employee benefit plan," as defined in Section 3(3) of ERISA, of
which Company or any of the Company Subsidiaries is a sponsor or
participating employer or as to which Company or any of the Company
Subsidiaries makes contributions or is required to make contributions and
which is subject to any provision of ERISA and covers any employee,
whether active or retired, of Company or any of the Company Subsidiaries,
together with all amendments thereto, all currently effective and related
summary plan descriptions, the determination letter from the IRS, the
annual reports for the most recent three years (Form 5500 including, if
applicable, Schedule B thereto, and Form 11-K, if applicable) and a
summary of material modifications prepared in connection with any such
plan. Such plans are hereinafter referred to collectively as the "EMPLOYEE
PLANS," and are listed in Section 4.20(a) of the Company Disclosure
Letter. No Employee Plan is a "multiemployer plan" within the meaning of
Section 3(37) of ERISA. Each Employee Plan that is intended to be
qualified in form and operation under Section 401(a) of the Code has
received a favorable determination letter from the IRS and the associated
trust for each such Employee Plan is exempt from tax under Section 501(a)
of the Code. No event has occurred that will subject such Employee Plans
to a material amount of tax under Section 511 of the Code. All amendments
required to bring each Employee Plan into conformity with all of the
applicable provisions of ERISA, the Code and all other applicable Laws
have been made, except to the extent that such amendments may be
retroactively adopted under Section 401(b) of the Code and the regulations
issued thereunder. Except as disclosed in the Company Disclosure Letter,
all Employee Plans were in effect prior to January 1, 2005, and there has
been no material amendment thereof (other than amendments required to
comply with applicable Law).
(b) Company has previously made available to Parent copies or
descriptions of each employment agreement, plan or arrangement maintained
or otherwise contributed to by Company or any of the Company Subsidiaries
which is not an Employee Plan and which (exclusive of base salary and base
wages and any benefit required solely under the Law of any state) provides
for any form of current or deferred compensation, bonus, stock option,
stock awards, stock-based compensation or other forms of incentive
compensation or post-termination benefits or insurance, profit sharing,
benefit, retirement, severance, change-in-control, group health or
insurance, disability, workers' compensation, vacation benefits, welfare
or similar benefits to or for the benefit
- 25 -
of any employee or class of employees, or former employees or class of
former employees, or directors or former directors, whether active or
retired, of Company or any of the Company Subsidiaries. Such plans and
arrangements are hereinafter collectively referred to as "BENEFIT
ARRANGEMENTS" and are listed in Section 4.20(b) of the Company Disclosure
Letter. Except as disclosed in the Company Disclosure Letter, all Benefit
Arrangements which are in effect were commenced or in effect prior to
January 1, 2005. Except as disclosed in the Company Disclosure Letter,
there has been no amendment thereof. Except as set forth in the Company
Disclosure Letter, there has been no increase in the compensation of or
benefits payable to any senior executive employee of Company or any
Company Subsidiary since January 1, 2005 nor any employment, severance or
similar contract entered into with any such employee, nor any amendment to
any such contract, since January 1, 2005.
(c) With respect to all Employee Plans and Benefit
Arrangements, Company and the Company Subsidiaries are in compliance
(other than noncompliance the cost or liability for which would not have,
or would not reasonably be expected to have, a Material Adverse Effect)
with the requirements prescribed by any and all statutes, governmental or
court orders, or governmental rules or regulations currently in effect,
including but not limited to ERISA and the Code, applicable to such plans
or arrangements. All government reports and filings required by Law have
been properly and timely filed and all information required to be
distributed to participants or beneficiaries has been distributed with
respect to each Employee Plan and Benefit Arrangement, including, if
applicable, Form S-8 registration statements, Forms 11-K and prospectus
disclosures with respect to Company Stock offered under any Employee Plan
and Benefit Arrangement (other than noncompliance the cost or liability
for which would not have, or would not reasonably be expected to have, a
Material Adverse Effect). Company and the Company Subsidiaries have
performed all of their obligations under all such Employee Plans and
Benefit Arrangements in all material aspects. There is no pending or, to
the best of Company's or Company Subsidiaries' knowledge, threatened legal
action, proceeding or investigation against or involving any Employee Plan
or Benefit Arrangement, other than routine claims for benefits (other than
claims which would not have, or would not reasonably be expected to have,
a Material Adverse Effect). No condition exists that could constitute
grounds for the termination of any Employee Plan under Section 4042 of
ERISA. No "prohibited transaction," as defined in Section 406 of ERISA or
Section 4975 of the Code, has occurred with respect to any Employee Plan,
or any other employee benefit plan maintained by Company or any of the
Company Subsidiaries which is covered by Title I of ERISA, which could
subject any person (other than a person for whom Company or any Company
Subsidiary is not directly or indirectly responsible) to liability under
Title I of ERISA or to the imposition of tax under Section 4975 of the
Code (other than any such transaction the cost or liability of which would
not have, or would not reasonably be expected to have, a Material Adverse
Effect). No Employee Plan subject to Part 3 of Subtitle B of Title I of
ERISA or Section 412 of the Code, or both, has incurred any "accumulated
funding deficiency," as defined in Section 412 of the Code, whether or not
waived, nor has Company or any Company Subsidiary failed to make any
contribution or pay any amount due and owing as required by the terms of
any Employee Plan or Benefit Arrangement.
- 26 -
No "reportable event" as defined in ERISA has occurred with respect to any
of the Employee Plans. Neither Company nor any of the Company Subsidiaries
has incurred nor expects to incur, directly or indirectly, any liability
under Title IV of ERISA arising in connection with the termination of, or
a complete or partial withdrawal from, any plan covered or previously
covered by Title IV of ERISA which could constitute a liability of the
Surviving Corporation or of any of its Affiliates (including the Company
Subsidiaries) at or after the Effective Time of the Merger (other than
plans maintained prior to the Effective Time of the Merger by Parent and
any of the Company Subsidiaries).
(d) Neither Company nor any of the Company Subsidiaries has
provided or is required to provide security to any Employee Plan pursuant
to Section 401(a)(29) of the Code. Each of the Employee Plans that is
intended to be a qualified plan under Section 401(a) of the Code has
received a favorable determination letter from the IRS and neither Company
nor any Company Subsidiary knows of any fact that would adversely affect
the qualified status of any such Employee Plan and which would not be
correctible under the Employee Plans Correction Resolution System (Rev.
Proc. 2003-44) without material cost to Company or any of the Company
Subsidiaries. All contributions required to be made to each of the
Employee Plans under the terms of the Employee Plans, ERISA, the Code or
any other applicable laws have been timely made. Except as disclosed in
the Company Disclosure Letter, as of the date hereof, the Financial
Statements of Company properly reflect all amounts required to be accrued
as liabilities to date under each of the Employee Plans. Except as
disclosed in the Company Disclosure Letter, the fair market value of the
assets of each Employee Plan and Benefit Arrangement that is funded, or
required to be funded under the terms of the Employee Plan or Benefit
Arrangement, ERISA, the Code or any other applicable Law, equals or
exceeds the present value of benefit obligations, of such Employee Plan or
Benefit Arrangement. Except as disclosed in the Company Disclosure
Letters, Company and the Company Subsidiaries have no obligation to
provide post-termination or retiree welfare benefits to any person for any
reason, except as may be required by The Consolidated Omnibus Budget
Reconciliation Act of 1985, as amended or similar state statute.
(e) Except for the Scheduled Contracts or as set forth in the
Company Disclosure Letter, each Employee Plan or Benefit Arrangement and
each personal services contract, fringe benefit, consulting contract or
similar arrangement with or for the benefit of any officer, director,
employee or other person can be terminated by Company within a period of
30 days following the Effective Time of the Merger, without liability to
Company or any Company Subsidiaries. There does not now exist, nor do any
circumstances exist that could result in, any Controlled Group Liability
that would be a material liability of the Company or any of its
subsidiaries following the Effective Time. "CONTROLLED GROUP LIABILITY"
means any and all liabilities (i) under Title IV of ERISA, (ii) under
Section 302 of ERISA, (iii) under Sections 412 and 4971 of the Code, or
(iv) as a result of a failure to comply with the continuation coverage
requirements of Section 601 et seq. of ERISA and Section 4980B of the
Code.
- 27 -
(f) All group health plans of Company and Company Subsidiaries
have been operated in compliance with the group health plan continuation
coverage requirements of Section 4980B of the Code and with the group
health plan portability, access and renewability requirements of Sections
9801 through 9833 of the Code, and corresponding provisions of ERISA, in
all material respects.
(g) Neither Company nor any of the Company Subsidiaries has
used the services of (i) workers who have been provided by a third party
contract labor supplier for more than six months or who may otherwise be
eligible to participate in any of the Employee Plans or to an extent that
would result in the disqualification of any of the Employee Plans or the
imposition of penalties or excise taxes with respect to the IRS, the
Department of Labor, the Pension Benefit Guaranty Corporation or any other
Governmental Entity; (ii) temporary employees who have worked for more
than six months or who may otherwise be eligible to participate in any of
the Employee Plans or to an extent that would result in the
disqualification of any of the Employee Plans or the imposition of
penalties or excise taxes with respect to the IRS, the Department of
Labor, the Pension Benefit Guaranty Corporation or any other Governmental
Entity; (iii) individuals who have provided services to Company or the
Company Subsidiaries as independent contractors for more than six months
or who may otherwise be eligible to participate in the Employee Plans or
to an extent that would result in the disqualification of any of the
Employee Plans or the imposition of penalties or excise taxes with respect
to the IRS, the Department of Labor, the Pension Benefit Guaranty
Corporation or any other Governmental Entity; or (iv) leased employees, as
that term is defined in section 414(n) of the Code.
(h) With respect to each Employee Plan that is funded wholly
or partially through an insurance policy, there will be no material
liability of Company or the Company Subsidiaries, as of the Closing Date,
under any such insurance policy or ancillary agreement with respect to
such insurance policy in the nature of a retroactive rate adjustment, loss
sharing arrangement or other actual or contingent liability arising wholly
or partially out of events occurring prior to the Closing Date.
(i) Except as set forth in the Company Disclosure Letter, no
Company Employee Plan or Benefit Arrangement provides a gross-up for any
Taxes which may be imposed under Section 4999 of the Code relating to
parachute payments or for failure to comply with the requirements of
Section 409A of the Code.
(j) As of the date hereof, the compensation information that
Company has furnished to Parent for purposes of calculating the amount of
any "excess parachute payments" (within the meaning of Section 280G of the
Code) that may be payable in connection with the Merger, assuming the
Merger is consummated in 2005, is true and correct in all respects (except
with respect to any omissions or errors that are in the aggregate de
minimis in amount.)
4.21. CORPORATE RECORDS. The minute books of each of Company and the
Company Subsidiaries which have heretofore been made available to Parent
accurately reflect all
- 28 -
material corporate actions taken since January 1, 2003 to this date by the
respective stockholders, board of directors and committees of each of Company
and the Company Subsidiaries.
4.22. ACCOUNTING RECORDS. Each of Company and the Company
Subsidiaries maintains accounting records which fairly and accurately reflect,
in all material respects, its transactions, and accounting controls exist
sufficient to provide reasonable assurances that such transactions are, in all
material respects, (i) executed in accordance with its management's general or
specific authorization, and (ii) recorded as necessary to permit the preparation
of financial statements in conformity with GAAP.
4.23. OFFICES AND ATMS. Company has furnished to Parent a list (the
"COMPANY OFFICES LIST") setting forth the headquarters of each of Company and
the Company Subsidiaries (identified as such) and, as of the date hereof, each
of the offices and automated teller machines ("ATMS") maintained and operated by
Company or the Company Subsidiaries (including, without limitation,
representative and loan production offices and operations centers) and the
location thereof. Except as set forth on the Company Offices List, as of the
date hereof, neither Company nor any of the Company Subsidiaries maintains any
other office or ATM or conducts business at any other location, and neither
Company nor the Company Subsidiaries has applied for or received permission to
open any additional branch or operate at any other location.
4.24. AGREEMENTS WITH REGULATORS. Except as set forth in the Company
Disclosure Letter, neither Company nor any Subsidiary of Company is a party to
any supervisory agreement, consent decree or memorandum of understanding with,
or a party to any commitment letter or similar undertaking to, or is subject to
any cease-and-desist or other similar order or directive by, or is a recipient
of any extraordinary supervisory letter from, or has adopted any board
resolutions specifically applicable to Company or any Subsidiary of Company at
the request of, any Governmental Entity which restricts materially the conduct
of its business, or in any manner relates to its capital adequacy, its credit or
risk management policies or its management, nor has Company been advised by any
Governmental Entity that it is contemplating issuing or requesting (or is
considering the appropriateness of issuing or requesting) any such supervisory
agreement, decree, memorandum of understanding, extraordinary supervisory
letter, commitment letter, order, directive or similar submission, or any such
board resolutions which would reasonably be expected to have a Material Adverse
Effect.
4.25. VOTE REQUIRED. The affirmative vote of the holders of
two-thirds of the outstanding shares of Company Stock to adopt this Agreement is
the only vote of the holders of any class or series of Company capital stock
necessary to approve and adopt this Agreement and the transactions contemplated
hereby (including the Merger).
4.26. POWER OF ATTORNEY. Neither Company nor any of the Company
Subsidiaries has granted any Person a power of attorney or similar authorization
that is presently in effect or outstanding except in the ordinary course of
business consistent with prior practice.
4.27. FACTS AFFECTING REGULATORY APPROVALS. To the best knowledge of
Company, there is no fact, event or condition applicable to Company or the
Company Subsidiaries which will, or reasonably could be expected to, adversely
affect the likelihood of
- 29 -
securing, or unduly delay the receipt of, the requisite approvals or consents of
any Governmental Entity to the Merger and the transactions contemplated by this
Agreement.
4.28. INDEMNIFICATION. Other than pursuant to the provisions of
their respective Certificate of Incorporation or Articles of Association, as the
case may be, or Bylaws, or as disclosed in the Company Disclosure Letter, the
Company SEC Filings, the ▇▇▇▇▇▇▇ ▇▇▇▇▇ Agreement, the Sandler ▇'▇▇▇▇▇ Agreement,
the Scheduled Contracts, or pursuant to non-material leases, vendor or other
similar contracts entered into in the ordinary course of business, neither
Company nor any of the Company Subsidiaries is a party to any indemnification
agreement with any of its present or past officers, directors, employees, agents
or other persons who serve or served in any other capacity with any other
enterprise at the request of Company or the Company Subsidiaries ("COVERED
PARTIES"), and, to the best knowledge of Company, there are no claims for which
any Covered Party would be entitled to indemnification by Company or the Company
Subsidiaries if such provisions were deemed in effect.
4.29. REGULATORY CAPITALIZATION. Bank is, and immediately prior to
the Effective Time of the Merger will be, "well capitalized," as such term is
defined in the rules and regulations of the OTS, and is, and will be at such
time, in full compliance with any capital commitments to the OTS.
4.30. DERIVATIVE TRANSACTIONS.
(a) Except as would not have, or would not reasonably be
expected to have, a Material Adverse Effect, all Derivative Transactions
(as defined herein) entered into by Company or any of its Subsidiaries
were entered into in accordance with applicable rules, regulations and
policies of any Governmental Entity, and in accordance with the
investment, securities, commodities, risk management and other policies,
practices and procedures employed by Company and the Company Subsidiaries,
and were entered into with counterparties who were believed at the time to
be financially responsible and able to understand (either alone or in
consultation with their advisers) and to bear the risks of such Derivative
Transactions; and Company and each of its Subsidiaries have duly performed
all of their obligations under the Derivative Transactions to the extent
that such obligations to perform have accrued, and, to Company's
knowledge, there are no material breaches, violations or defaults or
allegations or assertions of such by any party thereunder. Company and the
Company Subsidiaries have adopted policies and procedures consistent with
the publications of applicable Governmental Entities with respect to their
derivatives programs.
(b) For purposes of this Section 4.30, "DERIVATIVE
TRANSACTIONS" means any swap transaction, option, warrant, forward
purchase or sale transaction, futures transaction, cap transaction, floor
transaction or collar transaction relating to one or more currencies,
commodities, bonds, equity securities, loans, interest rates,
credit-related events or conditions or any indexes, or any other similar
transaction or combination of any of these transactions, including
collateralized mortgage obligations or other similar instruments or any
debt or equity instruments evidencing or embedding any such types of
transactions, and any related credit support, collateral or other similar
arrangements
- 30 -
related to such transactions; provided that, for the avoidance of doubt,
the term "DERIVATIVE TRANSACTIONS" shall not include any Company Stock
Options.
4.31. TRUST POWERS. Bank does not presently maintain trust or
exercise trust powers, nor does any other Subsidiary of Company.
4.32. DISCLOSURE DOCUMENTS AND APPLICATIONS. None of the information
supplied or to be supplied by Company in writing ("COMPANY SUPPLIED
INFORMATION") for inclusion in any documents to be filed with the SEC, the FDIC,
the OTS, the FRB, the DFI or any other Governmental Entity in connection with
the transactions contemplated in this Agreement, will, at the respective times
such documents are filed or become effective, or with respect to the Proxy
Statement when mailed, with respect to the Company Supplied Information, contain
any untrue statement of a material fact, or omit to state any material fact
required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading.
4.33. INTELLECTUAL PROPERTY. To the best knowledge of Company,
Company and the Company Subsidiaries own or have a valid license to use all
patents, trade secrets, trademarks, trade names and service marks (including any
registrations or applications for registration of any of the foregoing)
(collectively, "COMPANY INTELLECTUAL PROPERTY") necessary to carry on their
business substantially as currently conducted, except where such failures to own
or validly license such Company Intellectual Property would not, individually or
in the aggregate, reasonably be expected to have a Material Adverse Effect.
Other than in respect of Intellectual Property licensed in the ordinary course
of business, neither Company nor any of the Company Subsidiaries has any
obligation to compensate any Person for the use of any of the Company
Intellectual Property and Company has not granted to any Person any license,
option or other rights to use in any manner any of the Company Intellectual
Property, whether requiring the payment of royalties or not. The Company
Intellectual Property will not be impaired by reason of the performance of this
Agreement or the consummation of the transactions contemplated hereby, except as
would not, individually or in the aggregate, in either such case, would
reasonably be expected to have a Material Adverse Effect. Neither Company nor
any of the Company Subsidiaries has received any notice of infringement of or
conflict with, and to Company's knowledge, there are no infringements of or
conflicts with, the rights of others with respect to the use of any Company
Intellectual Property that, individually or in the aggregate, in either such
case, would reasonably be expected to have a Material Adverse Effect.
4.34. STATE TAKEOVER LAWS; COMPANY RIGHTS PLAN.
(a) No "fair price," "moratorium," "control share acquisition"
or other similar anti-takeover statute or regulation (each, a "TAKEOVER
STATUTE") or, any anti-takeover provision in the Articles or Certificate
of Incorporation or Bylaws of Company or any Subsidiary is, or at the
Effective Time of the Merger will be, applicable to the Merger or any
other transactions contemplated by this Agreement.
(b) Company has no stockholder rights plan, "poison pill" or
other similar plan, such previously existing plan of Company having been
terminated effective February 28, 2005.
- 31 -
4.35. REGISTRATION OBLIGATION. Neither Company nor any of the
Company Subsidiaries is under any obligation, contingent or otherwise, to
register any of their respective securities under the Securities Act, other than
Company Stock issued or issuable under Company's equity compensation plans.
4.36. OPINIONS OF ▇▇▇▇▇▇▇ ▇▇▇▇▇ & CO., INC. AND SANDLER ▇'▇▇▇▇▇ &
PARTNERS, L.P. Company has received the opinions of ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co., Inc.
and Sandler ▇'▇▇▇▇▇ & Partners, L.P., dated as of the date hereof, to the effect
that, based upon and subject to the matters set forth in the opinions, the
Merger Consideration, in combination with the special $0.50 dividend to be
declared by Company immediately prior to the Closing, is fair from a financial
point of view to the holders of the Company Stock.
4.37. LOANS; INVESTMENTS.
(a) (i) The Company Disclosure Letter sets forth all evidences
of indebtedness reflected as assets on the books and records of Company
and its Subsidiaries ("LOANS") by Company and the Company Subsidiaries to
executive officers (as such term is defined in Part 215 of Title 12 of the
Code of Federal Regulations) of Company or any of the Company
Subsidiaries; (ii) there are no Loans to any employee, officer, director
of other Affiliate of Company or any of the Company Subsidiaries on which
the borrower is paying a rate other than that reflected in the note or the
relevant credit agreement or on which the borrower is paying a rate which
was below market at the time the Loan was made; and (iii) except as listed
on the Company Disclosure Letter, all such Loans are and were made in
compliance in all material respects with all applicable Laws, are
evidenced in all material respects by appropriate and sufficient
documentation and, to Company's knowledge, each constitutes the legal,
valid and binding obligation of the obligor named therein, subject to
bankruptcy, liquidation, receivership, conservatorship, insolvency,
moratorium, or other similar laws affecting the rights of creditors
generally and by general equitable principles.
(b) Each outstanding Loan and each commitment to extend credit
has been solicited and originated and is administered and serviced in all
material respects in accordance with the relevant loan documents,
Company's underwriting standards and with all applicable requirements of
Laws.
(c) Except as set forth on the Company Disclosure Letter, none
of the agreements pursuant to which Company or any of the Company
Subsidiaries has sold Loans or pools of Loans or participations in Loans
or pools of Loans contains any obligation to repurchase or substitute such
Loans or interests therein solely on account of a payment default by the
obligor on any such Loan.
(d) Each of Company and Bank is approved by and is in good
standing: (i) as a supervised mortgagee by the Department of Housing and
Urban Development ("HUD") to originate and service Title I and Title I FHA
mortgage loans; (ii) as a GNMA I and II Issuer by the Government National
Mortgage Association ("▇▇▇▇▇▇ MAE"); (iii) by the Veteran's Administration
("VA") to originate and service VA loans; and (iv) as a seller/servicer by
Federal National Mortgage Association
- 32 -
("▇▇▇▇▇▇ ▇▇▇") and the Federal Home Loan Mortgage Corporation ("▇▇▇▇▇▇▇
MAC") to originate and service conventional residential and multi-family
mortgage loans.
(e) Except for indemnity agreements with any of such persons
entered into in the ordinary course of business consistent with prior
practice, none of Company or any of the Company Subsidiaries is now nor
has ever been subject to any fine, suspension, settlement or other
agreement or other administrative agreement or sanction by, or any
obligation to indemnify, HUD, ▇▇▇▇▇▇ ▇▇▇, VA, ▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇ Mac or
other investor, or any federal or state agency relating to the
origination, sale or servicing of mortgage or consumer loans.
(f) Each of Company and the Company Subsidiaries is in
compliance in all material respects with all applicable Laws pertaining to
its or their lending activities, including, without limitation, the
Truth-In-Lending Act and Regulation Z, the Equal Credit Opportunity Act
and Regulation B, the Real Estate Settlement Procedures Act and Regulation
X, the Fair Credit Reporting Act, the Fair Debt Collection Practices Act,
the Office of Foreign Asset Control rules and regulations and all HUD,
▇▇▇▇▇▇ Mae, ▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇ Mac, other investor and mortgage insurance
company requirements relating to the origination, sale and servicing of
mortgage and consumer loans.
(g) All United States Treasury securities, obligations of
other United States Government agencies and corporations, obligations of
States of the United States and their political subdivisions, and other
investment securities classified as "held to maturity" and "available for
sale" held by Company, Bank and the Company Subsidiaries (other than
Bank), as reflected in the Financial Statements of Company, were
classified and accounted for in accordance with Statement of Financial
Accounting Standards No. 115 and the intentions of management.
4.38. ALLOWANCE FOR LOAN LOSSES. Company's allowance for loan losses
was determined by application of Company's policies and procedures, as those
policies and procedures may have been amended from time to time in the ordinary
course of business, on a basis consistently applied from prior periods and
represents management's good faith estimate of reasonably expectable losses, net
of recoveries relating to loans and leases previously charged off, on loans and
leases outstanding (including accrued interest receivable) as of that date.
4.39. COMPLIANCE WITH SERVICING OBLIGATIONS. Company and the Company
Subsidiaries are in compliance in all material respects with all contract,
agency and investor requirements and guidelines, and all applicable Laws,
relating to the servicing and administration of loans by them, or any of them,
including properly and timely making interest rate adjustments to adjustable
rate loans.
4.40. FIDUCIARY RESPONSIBILITIES. Company and the Company
Subsidiaries have performed in all material respects all of their respective
duties as a trustee, custodian, guardian or as an escrow agent in a manner which
complies in all material respects with all applicable Laws.
- 33 -
4.41. CONTROLS AND PROCEDURES.
(a) Each of the principal executive officer and the principal
financial officer of Company (or each former principal executive officer
and former principal financial officer of Company, as applicable) has made
all certifications required under Sections 302 and 906 of the
▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act of 2002 and the related rules and regulations
promulgated thereunder and under the Exchange Act (collectively, the
"▇▇▇▇▇▇▇▇-▇▇▇▇▇ ACT") with respect to the Company SEC Documents, and
Company has delivered to Parent a summary of any disclosure made by
management to Company's auditors and audit committee since January 1, 2003
referred to in such certifications. For purposes of the preceding
sentence, "principal executive officer" and "principal financial officer"
shall have the meanings given to such terms in the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act.
(b) Company has (i) designed and maintained disclosure
controls and procedures (as defined in Rule 13a-15(e) under the Exchange
Act) to ensure that material information required to be disclosed by
Company in the reports it files or furnishes under the Exchange Act is
communicated to its management by others within those entities as
appropriate to allow timely decisions regarding required disclosure, (ii)
disclosed, based on its most recent evaluation, to its auditors and the
audit committee of its Board of Directors (A) any significant deficiencies
or material weaknesses in the design or operation of internal controls
over financial reporting which could adversely affect its ability to
record, process, summarize and report financial data and (B) any fraud,
whether or not material, that involves management or other employees who
have a significant role in its internal controls over financial reporting
and (iii) identified for Company's auditors any material weaknesses in
internal controls. Company has provided to Parent true and correct copies
of any of the foregoing disclosures to the auditors or audit committee
that have been made in writing from January 1, 2003 through the date
hereof, and will promptly provide to Parent true and correct copies of any
such disclosure that is made after the date hereof.
(c) Company has designed and maintains a system of internal
controls over financial reporting (as defined in Rule 13a-15(f) under the
Exchange Act) sufficient to provide reasonable assurance concerning the
reliability of financial reporting and the preparation of financial
statements for external purposes in accordance with GAAP, including
reasonable assurance (i) that transactions are executed in accordance with
management's general or specific authorizations and recorded as necessary
to permit preparation of financial statements in conformity with GAAP and
to maintain asset accountability and (ii) regarding prevention or timely
detection of any unauthorized acquisition, use or disposition of assets
that could have a material effect on Company's financial statements.
Company's management, with the participation of Company's principal
executive and financial officers, has completed an assessment of the
effectiveness of Company's internal controls over financial reporting in
compliance with the requirements of Section 404 of the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act
for the year ended December 31, 2004, and such assessment concluded that
such internal controls were effective using the framework specified in the
Company's Annual Report on Form 10-K for the fiscal year ended December
31, 2004.
- 34 -
(d) No personal loan or other extension of credit by Company
or any Company Subsidiary to any of its or their executive officers or
directors has been made or modified (other than as permitted by Section 13
of the Exchange Act and Section 402 of the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act) since July
31, 2002.
(e) Since January 1, 2003, (i) neither Company nor any of the
Company Subsidiaries nor, to Company's knowledge, any director, officer,
employee, auditor, accountant or representative of Company or any of the
Company Subsidiaries has received any written complaint, allegation,
assertion, or claim that Company or any of the Company Subsidiaries has
engaged in improper or illegal accounting or auditing practices or
maintains improper or inadequate internal accounting controls and (ii) no
attorney representing Company or any of the Company Subsidiaries, whether
or not employed by Company or any of the Company Subsidiaries, has
reported evidence of a material violation of U.S. federal or state
securities Laws, a material breach of fiduciary duty or similar material
violation by Company, any of the Company Subsidiaries or any of their
respective officers, directors, employees or agents to any officer of
Company, the Board of Directors of Company or any member or committee
thereof. For purposes of this Agreement, "knowledge" of any Person means
the actual knowledge of any officer (as such term is defined in Rule
16a-1(f) under the Exchange Act) of such Person.
4.42. CRA, ANTI-MONEY LAUNDERING, OFAC AND CUSTOMER INFORMATION
SECURITY. Bank has received a rating of "Outstanding" in its most recent
examination or interim review with respect to the Community Reinvestment Act
("CRA"). Neither Company nor Bank is aware of, has been advised of, or has
reason to believe (because of Bank's Home Mortgage Disclosure Act ("HMDA") data
for the year ended December 31, 2004 filed with the OTS on or prior to March 1,
2005, or otherwise) that any facts or circumstances exist, which would cause
Bank or any other Company Subsidiary: (i) to be deemed not to be in satisfactory
compliance in any material respect with the CRA, and the regulations promulgated
thereunder, or to be assigned a rating for CRA purposes by federal or state bank
regulators of lower than "satisfactory"; or (ii) to be deemed to be operating in
violation in any material respect of the Bank Secrecy Act, the Patriot Act, any
order issued with respect to anti-money laundering by the U.S. Department of the
Treasury's Office of Foreign Assets Control, or any other applicable anti-money
laundering statute, rule or regulation (collectively, the "anti-money laundering
laws"); or (iii) to be deemed not to be in satisfactory compliance in any
material respect with the applicable privacy of customer information
requirements contained in any federal and state privacy laws and regulations,
including without limitation, in Title V of the ▇▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Act of 1999
and the regulations promulgated thereunder, as well as the provisions of the
information security program adopted by Bank pursuant to 12 C.F.R. Part 570.
Neither Company nor Bank is aware of any facts or circumstances which would
cause either to believe that any non-public customer information has been
disclosed to or accessed by an unauthorized third party in a manner which would
cause either Company or Bank or any other Company Subsidiary to undertake any
remedial action, except for such facts or circumstances, individually or in the
aggregate, as would not reasonably be expected to have a Material Adverse
Effect. The board of directors of Bank (or where appropriate of any other
Company Subsidiary) has adopted, and Bank (or such other Company Subsidiary) has
implemented, an anti-money laundering program that contains adequate and
appropriate customer identification verification procedures
- 35 -
that comply with Section 326 of the Patriot Act and such anti-money laundering
program meets the requirements in all material respects of Section 352 of the
Patriot Act and the regulations thereunder, and Bank (or such other Company
Subsidiary) has complied in all material respects with any requirements to file
reports and other necessary documents as required by the Patriot Act and the
regulations thereunder.
4.43. INVESTMENT MANAGEMENT AND RELATED ACTIVITIES. Except as set
forth in the Company Disclosure Letter, none of Company, any of the Company
Subsidiaries or Company's or the Company Subsidiaries' directors, officers or
employees is required to be registered, licensed or authorized under any
applicable Law as an investment adviser, a broker, dealer, an insurance agency
or company, a commodity trading adviser, a commodity pool operator, a futures
commission merchant, an introducing broker, a registered representative or
associated person, investment adviser, representative or solicitor, a counseling
officer, an insurance agent or broker, a sales person or in any similar capacity
with a Governmental Entity.
ARTICLE 5.
REPRESENTATIONS AND WARRANTIES OF PARENT
Parent represents and warrants to Company as follows, except as set
forth in the Parent Disclosure Letter:
5.1. INCORPORATION, STANDING AND POWER. Parent has been duly
organized, is validly existing and in good standing as a corporation under the
laws of the State of California. Parent is duly licensed to conduct a commercial
banking business under the laws of the State of California and its deposits are
insured by the FDIC in the manner and to the fullest extent permitted under
applicable law. Merger Sub has been duly organized, is validly existing and in
good standing as a corporation under the laws of the State of Nebraska. Merger
Sub has conducted no business or operations and has no material liabilities
other than its obligations under this Agreement.
5.2. AUTHORITY. The execution and delivery by Parent of this
Agreement, and the consummation of the transactions contemplated hereby have
been duly and validly authorized by all necessary corporate action on the part
of Parent. The execution and delivery by Merger Sub of this Agreement, and the
consummation of the transactions contemplated hereby, have been duly and validly
authorized by all necessary corporate action on the part of Merger Sub. Except
for the approval described in Section 5.3 and previously obtained, no other
corporate actions or proceedings by any affiliate or any direct or indirect
stockholder of Parent is required in connection with the execution and delivery
by Parent and Merger Sub of this Agreement or the consummation of the
transactions contemplated hereby. This Agreement is a valid and binding
obligation of Parent and Merger Sub, in each case enforceable in accordance with
its terms, except as the enforceability thereof may be limited by bankruptcy,
liquidation, receivership, conservatorship, insolvency, moratorium or other
similar Laws affecting the rights of creditors generally and by general
equitable principles. Neither the execution and delivery by Parent or Merger Sub
of this Agreement, the consummation of the transactions contemplated herein, nor
compliance by Parent and Merger Sub with any of the provisions hereof, will: (a)
conflict with or result in a breach of any provision of its respective
Certificate of
- 36 -
Incorporation, as amended, or Bylaws, as amended; (b) constitute a breach of or
result in a default (or give rise to any rights of termination, cancellation or
acceleration, or any right to acquire any securities or assets) under any of the
terms, conditions or provisions of any note, bond, mortgage, indenture,
franchise, license, permit, agreement or other instrument or obligation to which
Parent or any Subsidiary of Parent is a party, or by which Parent or any
Subsidiary of Parent or any of its properties or assets is bound (except as
would not be reasonably likely to have a material adverse effect on the ability
of Parent and Merger Sub to consummate the transactions contemplated by this
Agreement); or (c) violate any order, writ, injunction, decree, statute, rule or
regulation applicable to Parent or any Subsidiary of Parent or any of its
respective properties or assets. No consent of, approval of, notice to or filing
with any Governmental Entity having jurisdiction over any aspect of the business
or assets of Parent or any of its Subsidiaries, or any of their Affiliates or
direct or indirect stockholders, and no consent of, approval of or notice to any
other Person, is required in connection with the execution and delivery by
Parent or Merger Sub of this Agreement or the Merger Agreement, or the
consummation by Parent and Merger Sub of the Merger or the Subsequent Mergers or
the transactions contemplated hereby or thereby, except (i) the approval of this
Agreement by the stockholders of Company (including the filing of the Proxy
statement with the SEC); (ii) the approval of the FDIC under the Bank Merger
Act; (iii) the approval of the OTS under 12 C.F.R. ss. 574.7 and 563.22(b)(i)
and (h)(1); (iv) the approval of the DFI under the CFC; (v) the filing of a
notice with the FRB under 12 C.F.R. ss. 225.12(d)(2); (vi) the filing of the
Articles of Merger with the Secretary of State of the State of Nebraska; (vii)
with respect to the Subsequent Mergers, the filing of the Merger Agreement (or
the articles of merger provided for therein) with the Secretaries of State of
the States of California and Nebraska and the DFI; (viii) filings under U.S.
state corporate, banking, securities, insurance or other laws in U.S. states
where the Company or any Company Subsidiary maintains offices or transacts
business; and (ix) any filings required to be made with the U.S. Federal Trade
Commission or Department of Justice.
5.3. PARENT STOCKHOLDER CONSENT. BancWest, acting as the controlling
stockholder of Parent, has approved this Agreement and the transactions
contemplated hereby.
5.4. FINANCING. Parent has available sufficient cash or other liquid
assets or financial resources which may be used to fund the Merger and perform
its other obligations hereunder.
5.5. LITIGATION. No claim, action, proceeding or investigation is
pending or, to the knowledge of Parent, threatened, that seeks to delay or
prevent the consummation of, or that would be reasonably likely to materially
adversely affect Parent's or Merger Sub's ability to consummate the transactions
contemplated by this Agreement.
5.6. COMPLIANCE WITH LAWS AND REGULATIONS.
(a) Neither Parent nor any of its Subsidiaries is in violation
of any Law, except for such violations as would not have, or would not
reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect. Except for routine examinations by Governmental
Entities charged with the supervision or regulation of banking
organizations, to the knowledge of Parent, no investigation or inquiry by
any Governmental Entity with respect to Parent or any of its Subsidiaries
is pending or
- 37 -
threatened other than, in each case, those the outcome of which,
individually or in the aggregate, would not have a Material Adverse
Effect.
(b) Parent is not aware of, has not been advised of, and has
no reason to believe that any facts or circumstances exist, which would
cause Parent or any its Subsidiaries to be deemed to be operating in
violation in any material respect of the anti-money laundering laws, or to
be deemed not to be in satisfactory compliance in any material respect
with the applicable privacy of customer information requirements contained
in any federal and state privacy laws and regulations, including without
limitation, in Title V of the ▇▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Act of 1999 and the
regulations promulgated thereunder. The board of directors of Parent has
adopted and has implemented, an anti-money laundering program that
contains adequate and appropriate customer identification verification
procedures that comply with Section 326 of the Patriot Act and such
anti-money laundering program meets the requirements in all material
respects of Section 352 of the Patriot Act and the regulations thereunder
and Parent has complied in all material respects with any requirements to
file reports and other necessary documents as required by the Patriot Act
and the regulations thereunder. Parent is not aware of any facts or
circumstances which would cause it to believe that any non-public customer
information has been disclosed to or accessed by an unauthorized third
party in a manner which would cause Parent to undertake any remedial
action, except for such facts or circumstances, individually or in the
aggregate, as would not reasonably be expected to have a Material Adverse
Effect.
5.7. BNP PARIBAS' STATUS AS FHC. BNP Paribas has duly elected to
become, and meets the applicable requirements for qualification as, a financial
holding company pursuant to Section 4(l) of the BHC Act. To Parent's knowledge,
there are no facts or circumstances that are reasonably likely to result in BNP
Paribas ceasing to meet any such requirements.
5.8. AGREEMENTS WITH REGULATORS. Neither Parent nor any of its
Subsidiaries, nor BancWest, is a party to any supervisory agreement, consent
decree or memorandum of understanding with, or a party to any commitment letter
or similar undertaking to, or is subject to any cease-and-desist or other order
or directive by, or is a recipient of any extraordinary supervisory letter from,
or has adopted board resolutions at the request of, any Governmental Entity
other than in each case, which, individually or in the aggregate, would not have
a Material Adverse Effect, nor has Parent been advised by any Governmental
Entity that it is contemplating issuing or requesting (or is considering the
appropriateness of issuing or requesting) any such supervisory agreement,
decree, memorandum of understanding, extraordinary supervisory letter,
commitment letter, order, directive or similar submission, or any such board
resolutions which would reasonably be expected to have a Material Adverse
Effect.
5.9. BROKERS AND FINDERS. Parent is not a party to or obligated
under any agreement with any broker or finder relating to the transactions
contemplated hereby, and neither the execution of this Agreement nor the
consummation of the transactions provided for herein will result in any
liability to any broker or finder.
5.10. FACTS AFFECTING REGULATORY APPROVALS. To the best knowledge of
Parent, there is no fact, event or condition applicable to Parent or any of its
Subsidiaries, or any of their
- 38 -
Affiliates or direct or indirect stockholders, which will, or reasonably could
be expected to, adversely affect the likelihood of promptly securing, or unduly
delay the receipt of, the requisite approvals or consents of any Governmental
Entity to the Merger and the transactions contemplated by this Agreement.
5.11. CRA. Parent has received a rating of "satisfactory" in its
most recent examination or interim review with respect to the CRA. Parent has
not been advised of any material supervisory concerns regarding Parent's
compliance with the Community Reinvestment Act. Parent is not aware of, has not
been advised of, and has no reason to believe (because of Parent's December 31,
2004 HMDA data filed with the FDIC on or prior to March 1, 2005, or otherwise)
that any facts or circumstances exist, which would cause Parent to be deemed not
to be in satisfactory compliance in any material respect with the CRA or the
regulations thereunder or to be assigned a rating for CRA purposes of lower than
"satisfactory."
5.12. ACCURACY OF INFORMATION FURNISHED FOR COMPANY PROXY STATEMENT
AND OTHER FILINGS. None of the information supplied or to be supplied by Parent
in writing ("PARENT SUPPLIED INFORMATION") for inclusion in any documents to be
filed by Company with the SEC, the FDIC, the OTS, or any other Governmental
Entity in connection with the transactions contemplated in this Agreement, will,
at the respective times such documents are filed or become effective, or with
respect to the Proxy Statement when mailed, with respect to the Parent Supplied
Information, contain any untrue statement of a material fact, or omit to state
any material fact required to be stated therein or necessary in order to make
the statements therein, in light of the circumstances under which they were
made, not misleading.
5.13. INVESTMENT IN COMPANY SHARES. Neither Parent nor Merger Sub
nor any Affiliate of Parent or Merger Sub owns or controls, directly or
indirectly, any capital stock of Company, other than in accordance with and as
permitted by the Confidentiality Agreement.
ARTICLE 6.
COVENANTS OF COMPANY PENDING EFFECTIVE TIME OF THE MERGER
Company covenants and agrees with Parent and Merger Sub as follows:
6.1. LIMITATION ON CONDUCT PRIOR TO EFFECTIVE TIME OF THE MERGER.
Between the date hereof and the earlier of the Effective Time of the Merger or
the termination of the Agreement, except as contemplated by this Agreement and
subject to requirements of Law, Company agrees to conduct its business (and to
cause the Company Subsidiaries to conduct their respective businesses) in the
ordinary course in substantially the manner heretofore conducted and in
accordance with sound banking practices, and Company shall not (and shall cause
the Company Subsidiaries to not), except as provided in Section 6.1 of the
Company Disclosure Letter, without the prior written consent of Parent:
(a) issue, sell or grant any Company Stock (except pursuant to
the exercise of Company Stock Options outstanding as of the date hereof),
any other securities (including long term debt) of Company or the Company
Subsidiaries, or any rights, stock appreciation rights, options or
securities to acquire any Company Stock, or
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any other securities (including long term debt) of Company or the Company
Subsidiaries or enter into any agreements to take any such actions;
(b) (i) other than dividends by a direct or indirect wholly-
owned Subsidiary of Company to its parent, declare, set aside or pay any
dividend or make any other distribution upon any of the capital stock of
Company or the Company Subsidiaries; PROVIDED, HOWEVER, that Company may
declare and pay the regular quarterly cash dividend in respect of the
second fiscal quarter of 2005 which shall not exceed $0.145 per share of
Company Stock, and for fiscal quarters thereafter, consistent with its
customary declaration, record and payment dates, regular quarterly cash
dividends in respect of each fully completed fiscal quarter prior to the
Closing Date, not to exceed the lesser of (x) $0.145 per share of
Company Stock or (y) an amount per share of Company Stock equal to the
quotient obtained by dividing (A) 50% of the Average Net Income of
Company (where "AVERAGE NET INCOME" is equal to the quotient obtained by
dividing (a) the sum of the net income of Company (1) for the fiscal
quarter in respect of which the dividend has been declared and (2) the
immediately preceding fiscal quarter by (b) two) by (B) the number of
outstanding shares of Company Stock on the record date for such
dividend, determined in each case without regard to any expenses or costs
associated with or arising as a result of transactions contemplated by
this Agreement or any non-recurring charges that would not reasonably be
expected to have been incurred had the transactions contemplated by this
Agreement not occurred); provided, FURTHER, HOWEVER, that in addition to
any other dividends and distributions permitted by this Agreement, the
Company may also declare and pay, immediately prior to the Closing, a
special cash dividend in an amount not to exceed $0.50 per share of
Company Stock (the "SPECIAL DIVIDEND"); or (ii) split, combine or
reclassify any shares of capital stock or other securities of Company or
the Company Subsidiaries;
(c) purchase, redeem or otherwise acquire any capital stock or
other securities of Company or the Company Subsidiaries or any rights,
options, or securities to acquire any capital stock or other securities of
Company or the Company Subsidiaries (other than the redemption upon
maturity of Company's subordinated notes, acquisitions of Company Stock
pursuant to cashless exercise provisions of any Company Stock Options or
pursuant to the surrender of shares to Company or the withholding of
shares by Company to cover tax withholding obligations under Company Stock
Plans, and the issuance of Company Stock upon the exercise of Company
Stock Options that are outstanding as of the date hereof in accordance
with their present terms);
(d) except as may be required to effect the transactions
contemplated herein, amend its Articles of Incorporation, as the case may
be, or Bylaws;
(e) grant any general or uniform increase in the rate of pay
of employees or employee benefits;
(f) except as provided in the Company Disclosure Letter and in
Section 12.1, grant any increase in salary, incentive compensation or
employee benefits or pay any bonus to any Person or voluntarily accelerate
the vesting of any employee benefits, other than payments of bonuses
consistent with past practice pursuant to plans in
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effect on the date hereof and disclosed in the Company Disclosure Letter
and increases in salary consistent with the Company's Compensation
Guidelines for 2005 to Persons eligible for such salary increases,
provided that the percentage increase in salaries for all such Persons
shall not exceed 3.5 percent on average and other than a retention bonus
(the "SPECIAL RETENTION BONUS") which may be paid to the holders of the
Company Stock Options and Company Awards (other than restricted shares of
Company Stock) which shall be outstanding immediately prior to the
Effective Time of the Merger in an amount which shall be equal to the
product of (x) $0.50 and (y) the number of shares of Company Stock which
shall be subject to each such outstanding Company Stock Option and Company
Award;
(g) make any capital expenditure or commitments with respect
thereto in excess of $250,000 with respect to any item or project or in
the aggregate with respect to any related items or projects, except for
capital expenditures described in the Company Disclosure letter and
ordinary repairs, renewals and replacements;
(h) compromise or otherwise settle or adjust any assertion or
claim of a material deficiency in taxes (or interest thereon or penalties
in connection therewith), extend the statute of limitations with any tax
authority or file any pleading in court in any tax litigation or any
appeal from an asserted deficiency, or file or amend any income or other
material federal, foreign, state or local tax return, or make any material
tax election that is inconsistent with Company's current tax election
practices or that concerns a matter as to which the Company has no current
tax election practice;
(i) change its tax or accounting policies and procedures or
any method or period of accounting unless required by GAAP, regulatory
accounting principles, changes in Law or a Governmental Entity;
(j) other than in the ordinary course and in compliance with
applicable Law, grant or commit to grant any extension of credit or amend
the terms of any such credit outstanding on the date hereof to any
executive officer, director or holder of 10% or more of the outstanding
Company Stock, or any Affiliate of such Person;
(k) close or relocate any offices at which business is
conducted or open any new offices, except as described in the Company
Disclosure Letter;
(l) except as provided in the Company Disclosure Letter and in
Section 12.1, adopt or enter into any new employment agreement or other
employee benefit plan or arrangement or amend or modify any employment
agreement or employee benefit plan or arrangement of any such type except
for such amendments as are required by Law;
(m) grant any Person a power of attorney or similar authority,
other than in the ordinary course of business consistent with past
practice;
(n) make any investment by purchase of stock or securities
(including an Investment Security), contributions to capital, property
transfers or otherwise in any
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other Person, except for federal funds, obligations of the United States
Treasury or an agency of the United States Government the obligations of
which are entitled to or implied to have the full faith and credit of the
United States government and which have an original maturity not in excess
of one year, bank qualified investment grade municipal bonds, in any case,
in the ordinary course of business consistent with past practices and
which are not designated as trading;
(o) amend, modify or renew any Scheduled Contract or enter
into any agreement or contract that would be required to be a Scheduled
Contract under Section 4.15; PROVIDED, that Company and any Company
Subsidiary may (i) renew an existing Scheduled Contract in the ordinary
course of business on substantially equivalent terms if the total
obligation of the Company and any Company Subsidiary thereunder (including
any cancellation or termination payments or the effect of any required
minimum notice periods prior to cancellation or termination) shall not
exceed $500,000, and (ii) enter into ordinary course business and
operations transaction agreements that (A) do not restrict Company or the
Company Subsidiaries (or any Affiliate of Company or the Company
Subsidiaries or the Surviving Corporation (including Merger Sub and its
Subsidiaries) after the Effective Time of the Merger) from competing in
any line of business with any Person or using or employing the services of
any Person or (B) call for aggregate annual payments of $250,000 or more
and is not terminable on 60 days or less notice without payment of any
material termination fee or penalty;
(p) sell, transfer, mortgage, encumber or otherwise dispose of
any assets material to the business or financial position of the Company
or any Company Subsidiary or release or waive any material claim, except
in the ordinary course of business and consistent with past practices;
(q) take any action which would or could reasonably be
expected to (i) materially adversely affect the ability of Company to
obtain any necessary approval of any Governmental Entity required for the
transactions contemplated hereby; (ii) materially adversely affect
Company's ability to perform its covenants and agreements under this
Agreement; or (iii) result in any of the conditions to the performance of
Parent's or Company's obligations hereunder, as set forth in Articles 9,
10 or 11 herein not being satisfied;
(r) make any special or extraordinary distributions or
payments not in the ordinary course of business to any Person;
(s) reclassify any Investment Security from held-to-maturity
or available for sale to trading, unless required by changes in GAAP or
regulatory accounting requirements applicable to federal savings banks and
their holding companies generally or, other than in the ordinary course of
business and in prior consultation with Parent, restructure or materially
change its investment policies, investment securities portfolio, its
hedging strategy or its gap position, through purchases, sales or
otherwise, or the manner in which the portfolio is classified or reported;
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(t) sell any security other than in the ordinary course of
business, except as provided in the Company Disclosure Letter;
(u) take title to any real property without conducting prior
thereto any environmental investigation ordinarily undertaken consistent
with past practice;
(v) settle any material claim, action or proceeding involving
any material liability for monetary damages or enter into any settlement
agreement containing material obligations;
(w) make, acquire a participation in, or reacquire an interest
in a participation sold of, any loan, commitment to make a loan or other
extension of credit, that is not in compliance with its normal credit
underwriting standards, policies and procedures as in effect on December
31, 2004 or which would involve a credit exposure on the part of Company
or any Company Subsidiary, greater than that set forth in Section 6.1(w)
of the Company Disclosure Letter;
(x) incur any indebtedness for borrowed money or assume,
guaranty, endorse or otherwise as an accommodation become responsible for
the obligations of any other person, except for (i) in connection with
banking transactions in the ordinary course of business, (ii) short-term
borrowings (including refinancings thereof) made at prevailing market
rates and terms consistent with prior practice or (iii) interbank
borrowings made in the ordinary course of its banking business or (iv)
indebtedness of the Company or any of its wholly-owned Subsidiaries to the
Company or any of its wholly-owned Subsidiaries;
(y) enter into any new material line of business;
(z) engage in any material transaction or incur or sustain any
material obligation not in the ordinary course of business consistent with
past practice;
(aa) adopt any stockholder rights plan, "poison pill" or
similar plan; or
(bb) agree or make any commitment to take any actions
prohibited by this Section 6.1.
6.2. AFFIRMATIVE CONDUCT PRIOR TO EFFECTIVE TIME OF THE MERGER.
Between the date hereof and the Effective Time of the Merger, Company shall (and
shall cause the Company Subsidiaries to):
(a) use its commercially reasonable efforts consistent with
this Agreement to maintain and preserve intact its present business
organization and to maintain and preserve its relationships and goodwill
with account holders, borrowers, key employees and others having business
relationships with Company or the Company Subsidiaries;
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(b) use its commercially reasonable efforts to keep in full
force and effect all of the existing material permits and licenses of
Company and the Company Subsidiaries;
(c) use its commercially reasonable efforts to maintain
insurance coverage at least equal to that now in effect on all properties
which it owns or leases and on its business operations;
(d) use its commercially reasonable efforts to perform its
material contractual obligations and not become in material default on any
such obligations;
(e) use its commercially reasonable efforts to duly observe
and conform in all material respects to all lawful requirements applicable
to its business;
(f) maintain its assets and properties in good condition and
repair, normal wear and tear excepted;
(g) file all Tax Returns required to be filed with any tax
authority in accordance with all applicable Laws, timely pay all Taxes due
and payable as shown in the respective Tax Returns that are so filed and
ensure that the Tax Returns will, as of the time of filing, be based on
tax positions that have substantial support under all applicable Laws;
(h) promptly notify Parent regarding receipt from any tax
authority of any written notification of the commencement of an audit
which could involve material financial consequences for the Company, any
request to extend the statute of limitations, any statutory notice of
deficiency, any revenue agent's report, any notice of proposed assessment,
or any other similar written notification of potential adjustments to the
Tax liabilities or attributes of Company which could involve material
financial consequences for the Company, or any actual or threatened
collection enforcement activity of which Company is aware by any Tax
authority with respect to tax liabilities of Company;
(i) make available to Parent monthly unaudited balance sheets
and income statements of Company and Bank, as soon as available, but in no
event later than within 15 days after the end of each calendar month;
(j) use its commercially reasonable efforts to obtain any
third party consent with respect to any contract, agreement, lease,
license, arrangement, permit or release that is material to the business
of Company and the Company Subsidiaries on a consolidated basis or that is
contemplated in this Agreement as required in connection with the Merger
or the Subsequent Mergers;
(k) maintain an allowance for loan losses consistent with
practices and methodology as in effect on the date of the execution of
this Agreement provided that the dollar amount of such allowance shall be,
in any event (but subject to applicable GAAP and regulatory accounting
requirements and Law), maintained at a level which is at least equal to
the amount thereof at December 31, 2004; and
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(l) except as otherwise required by applicable Law, manage
Company's and the Company Subsidiaries' respective assets and liabilities
in all material respects in accordance with Company's asset and liability
management policy as in effect on the date hereof as previously disclosed
to Parent, unless otherwise agreed by the parties.
6.3. ACCESS TO INFORMATION. Company will afford, upon reasonable
notice, to Parent and its representatives, counsel, accountants, agents and
employees reasonable access during normal business hours to all of their
business, operations, employees, properties, books, files and records and will
do everything reasonably necessary to enable Parent and its representatives,
counsel, accountants, agents and employees to make a complete examination of the
financial statements, business, assets and properties of Company and the Company
Subsidiaries and the condition thereof and to update such examination at such
intervals as Parent shall deem appropriate. Such examination shall be conducted
in cooperation with the officers of Company and the Company Subsidiaries and in
such a manner as to minimize any disruption of, or interference with, the normal
business operations of Company and the Company Subsidiaries. Upon the request of
Parent, and upon Parent's execution and delivery of a customary waiver, Company
will request D&T to provide reasonable access to representatives of PwC working
on behalf of Parent to auditors' work papers with respect to the business and
properties of Company and the Company Subsidiaries, including tax accrual work
papers prepared for Company and the Company Subsidiaries during the preceding 60
months, other than (a) books, records and documents covered by the
attorney-client privilege, or that are attorneys' work product, and (b) books,
records and documents that Company or the Company Subsidiaries are legally
obligated to keep confidential. No examination or review conducted under this
section shall constitute a waiver or relinquishment on the part of Parent of the
right to rely upon the representations and warranties made by Company herein.
All documents and information concerning Company and the Company Subsidiaries so
obtained from any of them (except to the extent that such documents or
information are a matter of public record or require disclosure in the Proxy
Statement or any of the public portions of any applications required to be filed
with any Governmental Entity to obtain the approvals and consents required to
effect the transactions contemplated hereby), shall be subject to the
Confidentiality Agreement.
6.4. FILINGS. Company agrees that it will use all reasonable efforts
through the Effective Time of the Merger to cause each of Company's or the
Company Subsidiaries' reports, proxy statements, registrations, statements and
other filings required to be filed with any applicable Governmental Entity will
comply in all material respects with all the applicable statutes, rules and
regulations enforced or promulgated by the Governmental Entity with which it
will be filed and none will contain any untrue statement of material fact or
omit to state a material fact required to be stated therein or necessary to make
the statements therein, in light of the circumstances under which they were
made, not misleading. Any financial statement contained in any such report,
proxy statement, registration, statement or other filing that is intended to
present the financial position of the entity to which it relates will fairly
present the financial position of such entity and will be prepared in accordance
with GAAP or applicable banking regulations consistently applied during the
periods involved.
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6.5. NOTICES; REPORTS. Company will promptly notify Parent of any
event of which Company obtains knowledge which has had or may reasonably be
expected to have a Material Adverse Effect, or in the event that Company
determines that it is unable to fulfill any of the conditions to the performance
of Parent's obligations hereunder, as set forth in Articles 9 or 11 herein, and
Company will furnish Parent (i) as soon as available, and in any event within
five Business Days after it is mailed or delivered to the Board of Directors of
Company or the Company Subsidiaries or committees thereof, any report by Company
or the Company Subsidiaries for submission to the Board of Directors of Company
or the Company Subsidiaries or committees thereof, relating to any such Material
Adverse Effect or event, PROVIDED, HOWEVER, that Company need not furnish to
Parent communications of Company's legal counsel regarding Company's rights and
obligations under this Agreement or the transactions contemplated hereby, or
books, records and documents covered by confidentiality agreements or the
attorney-client privilege, or which are attorneys' work product, (ii) as soon as
available, all proxy statements, information statements, financial statements,
reports, letters and communications sent by Company to its stockholders or other
security holders, and, subject to applicable Law, all reports filed by Company
or the Company Subsidiaries with the SEC, the OTS or other Governmental
Entities, and (iii) such other existing reports as Parent may reasonably request
relating to Company or the Company Subsidiaries.
6.6. COMPANY STOCKHOLDERS' MEETING.
(a) As promptly as practicable after the execution of this
Agreement, Company will take action necessary in accordance with
applicable Law and its Articles of Incorporation and Bylaws to convene a
meeting of its stockholders (the "COMPANY STOCKHOLDERS' MEETING") to
consider and vote upon the approval of this Agreement and the transactions
contemplated hereby so as to permit the consummation of the transactions
contemplated hereby (such approval, the "COMPANY STOCKHOLDER APPROVAL").
Except as permitted by Section 6.6(b) below, the Board of Directors of
Company shall recommend approval and adoption of this Agreement and the
Merger by Company's stockholders (the "COMPANY RECOMMENDATION") and shall
include such recommendation in the Proxy Statement. Unless permitted by
Section 6.6(b), neither the Board of Directors of Company nor any
committee thereof shall (i) withdraw, modify or qualify, or propose
publicly to withdraw, modify or qualify, in any manner adverse to Parent,
the approval of this Agreement, the Merger or the Company Recommendation
(any of the foregoing, a "CHANGE IN THE COMPANY RECOMMENDATION"), or (ii)
approve or recommend, or propose publicly to approve or recommend, any
Competing Transaction. For purposes of this Agreement, a Change in the
Company Recommendation shall include any approval or recommendation (or
public proposal to approve or recommend) by the Board of Directors of
Company or any committee thereof of a Competing Transaction, or any
failure by Company's Board of Directors to recommend against a Competing
Transaction within the 10 business day period specified in Rule 14e-2(a)
under the Exchange Act.
(b) The Board of Directors of Company shall be permitted to
effect a Change in the Company Recommendation, only if and to the extent
that all of the following conditions are met: (v) the Company Stockholder
Approval has not been obtained, (w) the Board of Directors of Company
concludes in good faith (after
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consulting with outside legal counsel) that failure to effect such Change
in the Company Recommendation would be inconsistent with its fiduciary
duties under applicable Law; (x) before taking any such action, Company
promptly gives Parent (orally and in writing) notice advising Parent of
the decision of the Board of Directors of Company to take such action,
including the reasons therefor and, in the event that such decision
relates to a Competing Transaction, such notice specifies the material
terms and conditions of such Competing Transaction and identifies the
Person making such Competing Transaction (and Company will also promptly
give Parent such a notice with respect to any subsequent change in such
proposal) and Company has given Parent at least three (3) Business Days
after delivery of each such notice to propose revisions to the terms of
this Agreement (or to make another proposal) in response to such Competing
Transaction and has negotiated in good faith with Parent with respect to
such proposed revisions or other proposal, if any, (y) if such Change in
the Company Recommendation relates to a Competing Transaction received by
Company or made directly to Company's stockholders, such Competing
Transaction constitutes a Superior Proposal; and (z) Company has complied
with its obligations set forth in Section 6.7. Nothing contained in this
Agreement shall prevent the Board of Directors of Company from (i)
complying with Rules 14d-9 and/or 14e-2 under the Exchange Act with regard
to a Competing Transaction or (ii) making any disclosure if the Board of
Directors of Company concludes in good faith (after consulting with
outside legal counsel) failure to so disclose would be inconsistent with
its fiduciary duties under applicable Law; PROVIDED, HOWEVER, that any
such disclosure that relates to a Competing Transaction (other than a
"stop, look and listen" letter or similar communication of the type
contemplated by Rule 14d-9(f) under the Exchange Act) shall be deemed to
be a Change in Company Recommendation unless Company's Board of Directors
reaffirms the Company Recommendation in such disclosure.
(c) Subject to Section 6.6(b), Company will use its reasonable
best efforts to obtain the Company Stockholder Approval at the Company
Stockholders' Meeting and shall cause its executive officers to use their
reasonable best efforts in connection with the foregoing. Company shall
otherwise coordinate and cooperate with Parent with respect to the timing
of the Company Stockholders' Meeting and will otherwise comply with all
legal requirements applicable to the Company Stockholder Meeting.
6.7. NO SOLICITATION. Company shall not initiate, solicit or
knowingly encourage (including by way of furnishing information or assistance),
or take any other action to facilitate, any inquiries or the making of any
proposal which constitutes, or would reasonably be expected to lead to, any
Competing Transaction (as such term is defined below), or negotiate or have any
discussions with any person in furtherance of such inquiries or to obtain a
Competing Transaction, or disclose any nonpublic information or afford access to
its or the Company Subsidiaries' personnel, properties, books or records to, any
Person that has made, or to Company's knowledge, is considering making, a
proposal for a Competing Transaction, or agree to or endorse any Competing
Transaction, or approve or recommend, or propose to approve or recommend, or
execute or enter into, any letter of intent, agreement in principle, merger
agreement, asset purchase or share exchange or issuance agreement, option
agreement, or other
- 47 -
similar agreement related to any Competing Transaction or propose or agree to do
any of the foregoing, or authorize any of its or the Company Subsidiaries'
officers, directors or employees or any investment banker, financial advisor,
attorney, accountant or any other representative retained by it or any of its
Affiliates (the "REPRESENTATIVES") to take any such action, and will cause the
Representatives and the Company Subsidiaries not to take any such action, and
Company shall promptly notify Parent (orally and in writing) of all of the
relevant details relating to all inquiries and proposals which it may receive
after the date hereof relating to any of such matters, including the identity of
the offeror or Person making the request or inquiry. For purposes of this
Agreement, "COMPETING TRANSACTION" shall mean any of the following involving any
Person other than Parent or any of its Affiliates: any merger, consolidation,
share exchange or other business combination with or into the Company or any
Company Subsidiary; a sale, lease, exchange, mortgage, pledge, transfer or other
disposition of assets of Company or the Company Subsidiaries representing 15% or
more of the consolidated assets of Company and the Company Subsidiaries; a sale
of shares of capital stock (or securities convertible or exchangeable into or
otherwise evidencing, or any agreement or instrument evidencing, the right to
acquire capital stock), representing 15% or more of the voting power of Company
or any of the Company Subsidiaries; or a tender offer or exchange offer for at
least 15% of the outstanding shares of Company. Company will immediately cease
and cause to be terminated (and will cause the Company Subsidiaries to cease and
terminate) any existing activities, discussions or negotiations with any parties
(other than Parent and its Affiliates and representatives) conducted heretofore
with respect to any of the foregoing. Company shall (and shall cause the Company
Subsidiaries to) take the necessary steps to inform promptly the appropriate
individuals or entities referred to above of the obligations undertaken in this
Section. Company shall notify Parent (orally and in writing) within 24 hours of
the receipt of any such inquiries, proposals or offers, the request for any such
information, or the initiation or continuation of any such negotiations or
discussions which are sought to be initiated or continued with Company and the
Company Subsidiaries. Company shall promptly request each other Person, other
than Parent or its Affiliates, that has, in the past twelve months, executed a
confidentiality agreement in connection with its consideration of entering into
a business combination with Company and the Company Subsidiaries (other than a
business combination in which Company or a Company Subsidiary would acquire
control of such Person) to return all confidential information heretofore
furnished to such person by or on behalf of Company and the Company Subsidiaries
and enforce any such confidentiality agreements. Notwithstanding any other
provision in this Section 6.7 or any other provision of this Agreement, prior to
(but not after) the date of the Company Stockholder Approval, and subject to
compliance with the other terms of this Section 6.7, and to first entering into
a confidentiality agreement with any such Person having provisions that are no
less favorable to Company than those contained in the Confidentiality Agreement,
the Board of Directors of Company shall be permitted to engage in discussions or
negotiations with, and provide nonpublic information or data to, any Person in
response to a bona fide written proposal for a Competing Transaction by such
Person first made after the date hereof which was not solicited, initiated or
knowingly encouraged by Company or any of its Affiliates or any Representative
on or after the date hereof and which the Board of Directors of Company
concludes in good faith (after consultation with a financial advisor of
nationally recognized reputation in similar transactions) constitutes or is
reasonably likely to result in a Superior Proposal (as defined below), if and
only to the extent that the Board of Directors of Company reasonably determines
in good faith (after consultation with outside legal counsel) that
- 48 -
failure to do so would be inconsistent with its fiduciary duties under
applicable Law; PROVIDED, that Company shall have given Parent (orally and in
writing) at least three (3) Business Days prior written notice of its intent to
do so before taking the first of any such actions with any one such Person;
PROVIDED, FURTHER, that Company and the Board of Directors of Company shall keep
Parent informed of the status and terms of any such proposals, offers,
discussions or negotiations on a prompt basis, including by providing a copy of
all material documentation or correspondence relating thereto. For purposes of
this Agreement, "SUPERIOR PROPOSAL" shall mean a bona fide unsolicited written
proposal for a Competing Transaction which the Board of Directors concludes in
good faith, after consultation with a financial advisor of nationally recognized
reputation in similar transactions and its legal advisors, taking into account
all legal, financial, regulatory and other aspects of the proposal (including,
without limitation, all the terms and conditions of such proposal, including any
break-up fees, expense reimbursement provisions and conditions to consummation,
as well as any revisions to the terms of the Merger or this Agreement proposed
by Parent) and the Person making the proposal (i) is more favorable to Company's
stockholders from a financial point of view, than the transactions contemplated
by this Agreement and (ii) is fully financed or reasonably capable of being
fully financed, reasonably likely to receive all required governmental approvals
on a timely basis and otherwise reasonably capable of being completed on the
terms proposed; PROVIDED, that, for purposes of this definition of "SUPERIOR
PROPOSAL" the term Competing Transaction shall have the meaning assigned to such
term in this Section 6.7, except that the reference to "15% or more" in the
definition of Competing Transaction shall be deemed to be a reference to "a
majority";
6.8. APPLICATIONS. Company will promptly prepare or cause to be
prepared the Proxy Statement and will duly send the same to the holders of the
Company Stock in connection with the Company Stockholders' Meeting, and further
agrees to provide any information requested by Parent for the preparation of any
applications necessary to consummate the transactions contemplated hereby.
Company shall afford Parent a reasonable opportunity to review and comment on
the Proxy Statement and all amendments and supplements thereto before the filing
thereof with the SEC. Company covenants and agrees that, with respect to the
information relating to Company or the Company Subsidiaries, the Proxy Statement
will comply in all material respects with the provisions of applicable Law, and
will not contain any untrue statement of material fact or omit to state any
material fact required to be stated therein or necessary to make the statements
contained therein, in light of the circumstances under which they were made, not
misleading. Company will use its commercially reasonable efforts to assist
Parent in obtaining all approvals or consents of Governmental Entities necessary
to effect the Merger and the transactions contemplated herein.
6.9. SUBSEQUENT MERGERS. Company shall, and shall cause Bank to,
cooperate in all reasonable respects with Parent in Parent's efforts to obtain
the approval of or consent to the Subsequent Mergers by all Governmental
Entities whose approval or consent is required for the consummation thereof
(including without limitation the execution and filing by Bank along with Parent
of an application to the FDIC under the Bank Merger Act). Company and Parent
shall take all action necessary and appropriate to cause the merger of Bank with
and into Parent, with Parent as the surviving institution, immediately following
the Merger, including by executing (in the case of Parent) and causing Bank to
execute (in the case of Company), upon request of Parent, the Merger Agreement.
After such approvals or consents have been obtained
- 49 -
with respect to the Subsequent Mergers, as well as all required approvals or
consents by any Governmental Entity with respect to the Merger, or prior thereto
if notices are being sent pursuant to Section 7.2, Company and Bank will
cooperate in all reasonable respects with Parent to facilitate the mailing or
posting in a timely fashion of any notices to customers of the Bank or other
Persons with respect to the Subsequent Mergers deemed necessary or appropriate
by Parent, the cost thereof to be borne by Parent. At Parent's request, and at
its expense, Company and the Company Subsidiaries shall cooperate in all
reasonable respects to facilitate the divestiture to third parties of any
branches or assets of Company or any Company Subsidiary which may be required by
any Governmental Entity as a condition to approval or consent to the Merger, any
such divestiture to be subject to consummation of the Merger. By its execution
of this Agreement, Company, in its capacity as the sole shareholder of Bank,
shall be deemed to have duly approved the Merger Agreement and the transactions
contemplated therein. For the avoidance of doubt, the consummation of the
Subsequent Mergers pursuant to the Merger Agreement shall be subject to and
conditioned upon the prior consummation of the Merger pursuant to the terms and
provisions of this Agreement, and the Subsequent Mergers shall be consummated
immediately following the Merger, subject to the terms and conditions hereof.
6.10. TAKEOVER STATUTE. If any Takeover Statute is or may become
applicable to the Merger or the other transactions contemplated by this
Agreement, each of Parent and Company and their respective Board of Directors
shall grant such approvals and take such actions as are necessary so that such
transactions may be consummated as promptly as practicable on the terms
contemplated by this Agreement or by the Merger, and otherwise act to eliminate
or minimize the effects of such statute or regulation on such transactions.
ARTICLE 7.
COVENANTS OF PARENT AND MERGER SUB
Parent and Merger Sub covenant and agree with Company as follows:
7.1. LIMITATION ON CONDUCT PRIOR TO EFFECTIVE TIME OF THE MERGER.
Between the date hereof and the Effective Time of the Merger, except as
contemplated by this Agreement and subject to requirements of Law, each of
Parent and its Subsidiaries shall not, without the prior written consent of
Company:
(a) take any action which would or is reasonably likely to (i)
adversely affect the ability to obtain any necessary approvals of any
Governmental Entity required for the transactions contemplated hereby;
(ii) adversely affect Parent's ability to perform its covenants and
agreements under this Agreement; or (iii) result in any of the conditions
to the performance of Company's or Parent's obligations hereunder, as set
forth in Articles 10 or 11 herein not being satisfied; or
(b) agree or make any commitment to take any actions
prohibited by this Section 7.1.
7.2. APPLICATIONS. Parent will, as promptly as practicable, prepare
and file in final form or cause to be prepared and filed in final form (it being
recognized that the FDIC or
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other applicable Governmental Entities may require supplemental filings after
such filing in final form) (i) an application for approval of the Merger with
the FDIC (which shall be filed not later than 30 days from the date hereof);
(ii) an application for approval of the Merger with the OTS; (iii) a notice to
the FRB under 12 C.F.R. ss. 225.12(d)(2); and (iv) any other applications or
notices necessary to consummate the transactions contemplated hereby, and
further agrees to provide any information reasonably requested by Company
required for the preparation of any applications necessary to consummate the
transactions contemplated hereby. Parent shall afford Company a reasonable
opportunity to review, subject to applicable Law, all such applications (except
for confidential portions thereof) and all correspondence, amendments and
supplements thereto before the filing thereof and provide Company with copies of
any such correspondence, amendments or supplements at the time that they are
filed. With the cooperation of Company and Bank pursuant to Section 6.9, Parent
will provide (or cooperate to enable Company or Bank to provide notices required
by Company or Bank) as promptly as practicable any required notices to customers
or other Persons with respect to the Subsequent Mergers in order to facilitate
the Closing at the earliest date practical, consistent with Section 3.1,
including providing such notices in advance of receipt of the required approvals
or consents for the Subsequent Mergers if the date thereof can be reasonably
anticipated. Parent agrees to timely provide any information reasonably
requested by Company which is necessary for the preparation of the Proxy
Statement and all amendments and supplements thereto, and agrees that the
information provided by it for use in the Proxy Statement will comply in all
material respects with the provisions of applicable Law, and will not contain
any untrue statement of material fact or omit to state any material fact
required to be stated therein or necessary to make the statements contained
therein, in light of the circumstances under which they were made, not
misleading.
7.3. NOTICES; REPORTS. Parent will promptly notify Company in the
event that Parent determines that it is unable to fulfill any of the conditions
to the performance of Company's obligations hereunder, as set forth in Articles
9 or 10 herein.
7.4. INDEMNIFICATION AND DIRECTORS' AND OFFICERS' INSURANCE.
(a) From and after the Effective Time of the Merger, Parent
shall, to the fullest extent permitted by applicable Law, indemnify,
defend and hold harmless, and provide advancement of expenses to, each
person who is now, or has been at any time prior to the date hereof or
who becomes prior to the Effective Time of the Merger, an officer or
director of Company or any of its Subsidiaries and any such person
presently or formerly serving at the request of Company or any of its
Subsidiaries as a director, officer, employee, agent, trustee or
fiduciary of another corporation, partnership, joint venture, trust or
other enterprise, or under or with respect to any employee benefit plan
(the "INDEMNIFIED PARTIES") against all losses, claims, damages, costs,
expenses, liabilities, penalties, or judgments or amounts that are paid
in settlement of or in connection with any claim, action, suit,
proceeding or investigation whether civil, criminal, or administrative,
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 Company or any
Subsidiary of Company, or pertaining to any matter existing or occurring,
or any acts or omissions occurring, at or prior to the Effective Time of
the Merger, whether asserted or claimed prior to, or at or after, the
Effective Time of the Merger (including matters, acts or
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omissions occurring in connection with the approval of this Agreement and
the consummation of the transactions contemplated hereby) ("INDEMNIFIED
LIABILITIES") (x) to the same extent such persons are indemnified or have
the right to advancement of expenses as of the date of this Agreement by
Company pursuant to Company's Articles of Incorporation, Bylaws and
indemnification agreements, if any, in existence on the date hereof (all
such agreements being listed in the Company Disclosure Letter) with any
directors or officers of Company and its Subsidiaries and (y) without
limitation of, and in addition to clause (x), to the fullest extent
permitted by Law.
(b) For a period of six years after the Effective Time of the
Merger, Parent shall cause to be maintained in effect the current policies
of directors' and officers' liability insurance maintained by Company
(PROVIDED, that the Surviving Corporation may substitute therefor policies
with a substantially comparable insurer of at least the same coverage,
amounts and retentions containing terms and conditions which are no less
advantageous to the insured) with respect to claims arising from facts or
events which occurred at or before the Effective Time of the Merger;
PROVIDED, HOWEVER, that the Surviving Corporation shall not be obligated
to make annual premium payments for such insurance to the extent such
premiums exceed 200% of the premiums paid as of the date hereof by Company
for such insurance ("COMPANY'S CURRENT PREMIUM"), and if such premiums for
such insurance would at any time exceed 200% of Company's Current Premium,
then the Surviving Corporation shall cause to be maintained policies of
insurance which, in the Surviving Corporation's good faith determination,
provide the maximum coverage available at an annual premium equal to 200%
of Company's Current Premium.
(c) Parent shall pay (as incurred) all expenses, including
reasonable fees and expenses of counsel, that an Indemnified Person may
incur in enforcing the indemnity and other obligations provided for in
this Section 7.4.
(d) If the Surviving Corporation or any of its successors or
assigns (i) consolidates with or merges into any other person and shall
not be the continuing or surviving corporation or entity of such
consolidation or merger, or (ii) 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 the Surviving Corporation, as the case may be,
shall assume the obligations set forth in this Section 7.4.
(e) The provisions of this Section 7.4, (i) are intended to be
for the benefit of, and shall be enforceable by, each Indemnified Party,
his or her heirs and representatives and (ii) are in addition to, and not
in substitution for, any other rights to indemnification or contribution
that any such person may have or contract or otherwise.
7.5. LIMITATION ON PARENT CONDUCT PRIOR TO EFFECTIVE TIME OF THE
MERGER. Parent agrees that it shall not, and it shall not permit Merger Sub, to
take any action which would or could reasonably be expected to (i) materially
adversely affect the ability of Parent to obtain any necessary approval of any
Governmental Entity required for the transactions contemplated hereby; (ii)
materially adversely affect Parent's ability to perform its covenants and
agreements
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under this Agreement; or (iii) result in any of the conditions to the
performance of Parent's or Company's obligations hereunder, as set forth in
Articles 9, 10 or 11 herein not being satisfied.
ARTICLE 8.
ADDITIONAL COVENANTS
The parties hereto hereby mutually covenant and agree with each other as
follows:
8.1. COMMERCIALLY REASONABLE EFFORTS. Subject to the terms and
conditions of this Agreement, each party will use its commercially 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 under applicable Laws to
consummate the transactions contemplated by this Agreement as promptly as
practicable.
8.2. PUBLIC ANNOUNCEMENTS. No press release or other public
disclosure of matters related to this Agreement or any of the transactions
contemplated hereby shall be made by Parent or Company unless the other party
shall have provided its prior consent (which shall not be unreasonably withheld,
delayed or conditioned) to the form and substance thereof; PROVIDED, HOWEVER,
that nothing herein shall be deemed to prohibit any party hereto from making any
disclosure which its counsel deems necessary or advisable in order to fulfill
such party's disclosure obligations imposed by Law.
ARTICLE 9.
CONDITIONS PRECEDENT TO THE MERGER
The obligations of each of the parties hereto to consummate the
transactions contemplated herein are subject to the satisfaction, on or before
the Closing Date, of the following conditions:
9.1. STOCKHOLDER APPROVAL. The Agreement and the transactions
contemplated hereby shall have received all requisite approvals of the
stockholders of Company.
9.2. NO JUDGMENTS OR ORDERS. No judgment, decree, injunction, order
or proceeding shall be outstanding by any Governmental Entity of competent
jurisdiction which prohibits the Merger.
9.3. REGULATORY APPROVALS. To the extent required by applicable Law,
all approvals or consents of any Governmental Entity, including, without
limitation, those of the FDIC, the OTS and the DFI, shall have been obtained or
granted for the Merger and the applicable waiting period under all Laws shall
have expired; provided, that, no such approvals or consents shall have imposed
any condition or restriction as a result of the combination of Company and Bank
with Parent that would reasonably be expected to have a Material Adverse Effect
(measured on a scale relative to Company) on Parent. All other statutory or
regulatory requirements for the valid completion of the transactions
contemplated hereby shall have been satisfied.
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ARTICLE 10.
CONDITIONS PRECEDENT TO THE OBLIGATIONS OF COMPANY
All of the obligations of Company to effect the transactions contemplated
hereby shall be subject to the satisfaction, on or before the Closing Date, of
the following conditions, any of which may be waived in writing by Company:
10.1. REPRESENTATIONS AND WARRANTIES; PERFORMANCE OF COVENANTS. All
the covenants, terms and conditions of this Agreement to be complied with and
performed by Parent or Merger Sub on or before the Closing Date shall have been
complied with and performed in all material respects. Each of the
representations and warranties of Parent contained in Article 5 hereof shall
have been true and correct in all material respects on and as of the date of
this Agreement and (except to the extent such representations and warranties
speak as of an earlier date or for changes expressly contemplated by this
Agreement) on and as of the Closing Date.
10.2. OFFICERS' CERTIFICATE. There shall have been delivered to
Company on the Closing Date a certificate executed by the Chief Executive
Officer and the Chief Financial Officer of Parent and Merger Sub certifying, to
the best of their knowledge, compliance with all of the provisions of Section
10.1.
ARTICLE 11.
CONDITIONS PRECEDENT TO OBLIGATIONS OF PARENT AND MERGER SUB
All of the obligations of Parent and Merger Sub to effect the transactions
contemplated hereby shall be subject to the satisfaction, on or before the
Closing Date, of the following conditions, any of which may be waived in writing
by Parent:
11.1. REPRESENTATIONS AND WARRANTIES; PERFORMANCE OF COVENANTS. All
the covenants, terms and conditions of this Agreement to be complied with and
performed by Company at or before the Closing Date shall have been complied with
and performed in all material respects. Each of the representations and
warranties of Company contained in Article 4 hereof shall have been true and
correct in all respects on and as of the date of this Agreement and (except to
the extent such representations and warranties speak as of an earlier date or
for changes expressly contemplated by this Agreement) on and as of the Closing
Date, subject to such exceptions as would not (individually or in the aggregate)
have, or would not be reasonably expected to have, a Material Adverse Effect,
with the same effect as though such representations and warranties had been made
on and as of the Closing Date (it being understood that, for purposes of
determining the effect of such exceptions, all Material Adverse Effect and
materiality qualifications contained in such representations and warranties
shall be disregarded); PROVIDED that the representations and warranties of
Company contained in Sections 4.1(a), 4.6(a), 4.25, 4.34(b) and 4.36 shall be
true and correct in all respects and Section 4.2 shall be true and correct other
than in any immaterial respects.
11.2. AUTHORIZATION OF MERGER. All corporate actions of the Company
necessary to authorize the execution, delivery and performance of this Agreement
by Company and the
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consummation of the transactions contemplated hereby shall have been duly and
validly taken by the Board of Directors and stockholders of Company.
11.3. OFFICERS' CERTIFICATE. There shall have been delivered to
Parent on the Closing Date a certificate executed by the Chief Executive Officer
and the Chief Financial Officer of Company certifying, to the best of their
knowledge, compliance with all of the provisions of Sections 11.1 and 11.2.
11.4. EMPLOYEE BENEFIT PLANS. Parent shall have received
satisfactory evidence that Company has complied in all material respects with
its obligations with respect to employee benefit plans, programs and
arrangements, including, without limitation, the Company 401(k) Plan and the
Company Stock Options, under Article 12 of this Agreement.
ARTICLE 12.
EMPLOYEE BENEFITS
12.1. EMPLOYEE BENEFITS.
(a) After the Effective Time of the Merger, Parent shall
continue the Company 401(k) Plans for the benefit of employees of Company
and the Company Subsidiaries who continue to be employed by the Surviving
Corporation after the Effective Time of the Merger ("CONTINUING
EMPLOYEES"), provided that Parent in its sole discretion, may elect to
cease contributions to the Company 401(k) Plans on or after the Payroll
Conversion Date. Continuing Employees shall be eligible to participate in
equivalent plans maintained by Parent (including the 401(k) and pension
plans of Parent) on and after the Payroll Conversion Date.
(b) Following the Effective Time of the Merger and until on or
after the Payroll Conversion Date, Continuing Employees shall continue to
participate in the Company Employee Plans and Benefit Arrangements (other
than equity-based plans or arrangements). On and after the Payroll
Conversion Date, Continuing Employees shall become eligible for the
compensation and employee benefit plans and benefit arrangements of Parent
(including, without limitation, the medical, dental, vision, 401(k) and
pension plans of Parent) on the same terms as such plans and arrangements
are generally offered from time to time to employees of Parent in
comparable positions with Parent (subject to any applicable restrictions
or limitations on new entrants or categories of entrants), it being
understood that, except as otherwise provided in this Section 12.1 or
under the terms of any such Company Employee Plan or Benefit Arrangement,
or compensation and employee benefit plans and arrangements or applicable
Law, Parent shall be entitled from time to time to modify, terminate or
supplement any such employee plans or benefit arrangements or to
substitute new employee plans or benefit arrangements for such employee
plans or benefit arrangements in the exercise of their business judgment.
(c) With respect to any employee plans and benefit
arrangements of Parent in which any Continuing Employee first becomes
eligible to participate on or after
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the Effective Time of the Merger ("NEW PLANS"), Parent shall (i) waive all
pre-existing conditions, exclusions and waiting periods with respect to
participation and coverage requirements under any such New Plans, except
to the extent such conditions or exclusions would have been recognized
under the Company Employee Plans or Benefit Arrangements, (ii) recognize
service of the Continuing Employees which was credited under Company
Employee Plans or Benefit Arrangements prior to the Payroll Conversion
Date for purposes of eligibility, vesting and benefit accruals under the
New Plans (but not for purposes of benefit accrual under any employee
pension plans), (iii) credit any deductibles, co-payments or other
out-of-pocket expenses for the current calendar year for each employee and
dependent recognized or recognizable under the Company Employee Plans or
Benefit Arrangements, and (iv) apply any increase in any of the employee's
portion of the premium cost, deductibles, co-payments and other
out-of-pocket costs no earlier than the later of the first day of the
first plan year beginning after the Effective Time of the Merger of either
the Company Employee Plan or Benefit Arrangement or the employee plan or
benefit arrangement of the Parent. In addition to the foregoing, with
respect to all vacation, volunteer time, funeral time, school conferences,
sick time, personal time, and sabbatical leave that has been accrued
through the Effective Time of the Merger ("PTO") by any Continuing
Employee under the applicable PTO Plan, Parent shall, or shall cause its
Subsidiaries to, at its discretion, either pay the Continuing Employee his
or her PTO as soon as practicable after the Effective Time of the Merger
or allow such Continuing Employee to convert such PTO into vacation or
sick leave (or a combination thereof); provided, however, that any such
converted PTO may be subject to a maximum cap, with any excess PTO to be
paid in cash to the Continuing Employee as soon as practicable after the
Effective Time of the Merger. Company agrees that it will accrue as a
liability on its financial statements prior to the Closing its good faith
estimate of the dollar amount attributable to such PTO and will advise
Parent in writing of the amount of such accrual at least five (5) Business
Days prior to the Closing Date. Notwithstanding anything in this Agreement
to the contrary, those individuals who are currently receiving retiree
welfare benefits from the Company and individuals who retire within the
twelve month period following the Effective Time of the Merger and are
eligible for retiree welfare benefits from the Company under the terms of
the applicable retiree welfare plan as in effect immediately prior to the
Effective Time of the Merger, shall be entitled to retiree welfare
benefits in effect immediately prior to the Effective Time of the Merger
for employees of the Company and its Subsidiaries. Continuing Employees
who retire after the twelve month period following the Effective Time of
the Merger shall be eligible for retiree welfare benefits of Parent as may
be in effect from time to time for similarly situated employees of the
Parent.
(d) Parent agrees that after the Effective Time of the Merger,
Parent will pay or provide for the year ending December 31, 2005, to those
persons employed by Company or the Company Subsidiaries immediately prior
to the Effective Time of the Merger and who are eligible, a credit to the
employee's account under the Commercial Federal Bank Amended and Restated
Deferred Compensation Plan for Highly Compensated Employees (the "DEFERRED
COMPENSATION PLAN") a percentage of compensation through December 31,
2005, or if earlier, the date of termination of employment (provided such
termination of employment shall be involuntary and not due
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to death, Disability or Cause) as a result of the consummation of the
transactions contemplated under this Agreement in accordance with the
terms of the Deferred Compensation Plan as in effect immediately prior to
the Effective Time of the Merger. Company agrees that it will accrue as a
liability on its financial statements prior to the Closing its good faith
estimate of the dollar amount attributable to such deferred compensation
account credit and will advise Parent in writing of the amount of such
accrual at least five (5) Business Days prior to the Closing Date. Company
also represents and warrants that the only employees of Company and the
Company Subsidiaries who are participating in the Deferred Compensation
Plan are those that are identified as such in the Company Disclosure
Letter and agrees that after the execution and delivery of this Agreement,
no other employees shall be designated as participants therein.
(e) (i) Except with respect to employees described in Section
12.1(e)(ii) below, Parent will pay and provide to employees of Company or
the Company Subsidiaries whose employment terminates on or within twelve
months after the Effective Date of the Merger as a result of the
consummation of the transactions contemplated under this Agreement
severance benefits under conditions and in an amount that are no less
favorable to the employee than those contained in the Company Severance
Plan as disclosed in the Company Disclosure Letter as in effect on the
date this Agreement is executed.
(ii) Parent will pay and provide to Employees of the
Company or the Company Subsidiaries whose employment terminates on
or after the Effective Time of the Merger and who, as a result,
become eligible for benefits under the terms of the Change in
Control Agreements as disclosed in the Company Disclosure Letter,
the benefits to which the employee is entitled under the terms of
the Change in Control Agreements.
(f) Parent will cause the Surviving Corporation to assume and
perform all of the obligations of Company under the terms of the Deferred
Compensation Plan and any directors plans, subject to Parent's right to
amend such plans in accordance with their terms, other than to reduce the
amount of benefits previously accrued or required to be credited under
Section 12.1(d) hereof or to adversely affect the timing or manner of
payment of any benefits due or the intended tax effect to any participant
(other than the right, after the Effective Time of the Merger, to receive
distributions in the form of Company Stock).
12.2. COMPANY STOCK OPTIONS, COMPANY AWARDS AND THE COMPANY STOCK
OPTION PLANS.
(a) As soon as practicable following the date of this
Agreement, the Board of Directors of Company (or, if appropriate, any
committee administering the Company Stock Option Plans) shall adopt such
resolutions or take such other actions as are required (including, if
necessary, amending any of the Company Stock Option Plans) to provide for
the cancellation of all outstanding Company Stock Options upon the
Effective Time of the Merger, in exchange for a cash payment by Parent of
an amount
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equal to (i) the excess, if any, of (x) the Merger Consideration plus the
Special Dividend less the amount, if any, of the Special Retention Bonus
paid over (y) the exercise price per share of Company Stock subject to
such Company Stock Option, multiplied by (ii) the number of shares of
Company Stock subject to such Company Stock Option for which such Company
Stock Option shall not theretofore have been exercised, whether vested or
unvested and whether or not then exercisable. Such payment shall be made
by Parent as soon as practicable, but no more than two business days after
the Effective Time of the Merger.
(b) At the Effective Time of the Merger, each right of any
kind, contingent or accrued, to receive shares of Company Stock or
benefits measured by the value of a number of shares of Company Stock,
granted under the Employee Plans and Benefit Arrangements (including,
stock appreciation rights, restricted stock units, deferred stock units,
phantom units and other deferral amounts), other than Company Stock
Options and shares of Company Stock subject to restriction (each, a
"COMPANY AWARD"), which is outstanding immediately prior to the Effective
Time of the Merger shall cease to represent a right or award with respect
to shares of Company Stock and shall be converted, at the Effective Time
of the Merger, into a right or award with respect to (i) the Merger
Consideration plus the Special Dividend less the amount, if any, of the
Special Retention Bonus paid multiplied by (ii) the number of shares of
Company Stock subject to such Company Award, whether vested or unvested
(and the Company Awards otherwise shall remain subject to the terms of the
Employee Plans and Benefit Arrangements and the agreements or letters
evidencing grants thereunder). Company agrees that it or its relevant
committee shall take such action prior to the Effective Time of the Merger
as may be required under the terms of any Company Employee Plan or Benefit
Arrangement to pay such Company Awards in cash.
(c) All amounts payable pursuant to this Section 12.2 shall be
subject to any required withholding of taxes and shall be paid without
interest. It is understood that any payments made by Parent to holders of
Company Stock Options and Company Awards pursuant to this Section 12.2
shall be allocable to the portion of the Closing Date following the
Effective Time of the Merger for purposes of Section
1.1502-76(b)(1)(ii)(B) of the Treasury Regulations.
(d) The Board of Directors of Company (or, if appropriate, any
committee administering the Company Stock Option Plans and the Employee
Plans and Benefit Arrangements) shall adopt such resolutions or take such
actions as are required to delete as of the Effective Time of the Merger
the provision in any other Benefit Arrangements of Company providing for
the issuance, transfer or grant of Company Stock or any interest in
respect of Company Stock and to ensure that following the Effective Time
of the Merger no holder of a Company Stock Option or Company Award or any
participant in any Company Stock Option Plan or other Employee Plan or
Benefit Arrangements shall have any right thereunder to acquire any
Company Stock or any capital stock of the Surviving Corporation.
(e) (i) Parent shall, or shall cause the Surviving Corporation
to, continue to maintain the Company's 2005 annual bonus plan(s) (other
than the
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Management Incentive Plan) (the "BONUS PLANS") for the 2005 fiscal year
and shall pay in cash to employees all bonus amounts due under such Bonus
Plans pursuant to the terms of the Bonus Plans. Any participant in the
Bonus Plans who incurs an involuntary termination of employment without
cause following the Effective Time of the Merger and prior to the date on
which bonuses are paid under the Bonus Plans shall be paid a bonus at such
time as bonuses are paid to similarly situated active participants equal
to the product of (x) the amount of bonus that would have been paid to
such participant had such participant continued in the employ of the
Company through the applicable payment date and (y) a fraction, the
numerator of which is the number of days in the bonus plan year during
which the participant was employed by the Company and the denominator of
which is 365. Company agrees that it will accrue as a liability on its
financial statements prior to the Closing its good faith estimate of the
dollar amount attributable to such bonus amounts and will advise Parent in
writing of the amount of such accrual at least five (5) Business Days
prior to the Closing Date. Bonuses for the 2005 fiscal year will be paid
no later than 2 1/2 months following the end of the fiscal year.
(ii) Parent shall continue to maintain the Company's
Management Incentive Plan (the "MANAGEMENT INCENTIVE PLAN") for the
2005 fiscal year and shall pay in cash to participants who are
employed on February 28, 2006, 50% of the maximum amount due under
such Management Incentive Plan for 2005 pursuant to the terms of the
Management Incentive Plan, regardless of whether Bank meets its
performance goal(s) for 2005. Any participant in the Management
Incentive Plan who incurs an involuntary termination of employment
without cause following the Effective Time of the Merger and prior
to February 28, 2006 shall be paid a bonus under the Management
Incentive Plan at such time as bonuses are paid to similarly
situated active participants equal to the product of (x) the amount
of bonus that would have been paid to such participant had such
participant continued in the employ of the Company through the
applicable payment date and (y) a fraction, the numerator of which
is the number of days in the Management Incentive Plan year during
which the participant was employed by the Company and the
denominator of which is 365. Company agrees that it will accrue as a
liability on its financial statements prior to the Closing its good
faith estimate of the dollar amount attributable to such bonus
amounts payable under the Management Incentive Plan and will advise
Parent in writing of the amount of such accrual at least five (5)
Business Days prior to the Closing Date. Bonuses for the 2005 fiscal
year will be paid no later than 2 1/2 months following the end of
the fiscal year.
ARTICLE 13.
TERMINATION
13.1. TERMINATION. This Agreement may be terminated at any time
prior to the Effective Time of the Merger, whether before or after approval of
this Agreement by the stockholders of Company, upon the occurrence of any of the
following:
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(a) By mutual agreement of the parties, in writing;
(b) By Parent or Company upon the failure of the stockholders
of Company to give the Company Stockholder Approval at the duly convened
Company Stockholders' Meeting;
(c) By Company, upon written notice to Parent, if there shall
have been a breach by Parent or Merger Sub of any of the covenants or
agreements or any of the representations or warranties set forth in this
Agreement on the part of Parent or Merger Sub, which breach, either
individually or in the aggregate, would result in the failure of the
condition set forth in Section 10.1 and which breach has not been cured
within 60 days following written notice thereof to Parent or, by its
nature, cannot be cured within such time period;
(d) By Parent, upon written notice to Company, if there shall
have been a breach by Company of any of the covenants or agreements or any
of the representations or warranties set forth in this Agreement on the
part of Company, which breach, either individually or in the aggregate,
would result in the failure of the condition set forth in Section 11.1 and
which breach has not been cured within 60 days following written notice
thereof to Company or, by its nature, cannot be cured within such time
period;
(e) By Company or Parent if (i) there shall be enacted or
adopted hereafter any Law or regulation that makes consummation of the
Merger illegal or otherwise prohibited or if any judgment, injunction,
order or decree enjoining Parent or Company from consummating the Merger
is entered by any Governmental Entity of competent jurisdiction and such
judgment, injunction, order or decree shall become final and
nonappealable, or (ii) any Governmental Entity which must grant a
regulatory approval or consent required for consummation of the Merger has
denied such approval or consent and such denial has become final and
nonappealable; PROVIDED, HOWEVER, that such right to terminate this
Agreement under clause (ii) of this Section 13.1(e) shall not be available
to Company or Parent if either such party's failure to comply in all
material respects with Section 6.8 or 7.2, respectively, was a cause of
such action;
(f) By Company or Parent if any conditions set forth in
Article 9 shall not have been met by March 31, 2006; PROVIDED, HOWEVER,
that this Agreement shall not be terminated pursuant to this Section
13.1(f) if the relevant condition shall have failed due to the failure of
the party seeking to terminate to comply in all material respects with its
obligations under this Agreement;
(g) By Company if any of the conditions set forth in Article
10 shall not have been met or waived (to the extent such can be legally
waived) by March 31, 2006; PROVIDED, HOWEVER, that this Agreement shall
not be terminated pursuant to this Section 13.1(g) if the relevant
condition shall have failed due to the failure of Company to comply in all
material respects with its obligations under this Agreement;
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(h) By Parent if any of the conditions set forth in Article 11
shall not have been met or waived (to the extent such can be legally
waived) by March 31, 2006; PROVIDED, HOWEVER, that this Agreement shall
not be terminated pursuant to this Section 13.1(h) if the relevant
condition shall have failed due to the failure of Parent to comply in all
material respects with its obligations under this Agreement;
(i) By Parent if Company or the Company Subsidiaries shall
have breached in any material respect any of their obligations contained
in Sections 6.6 or 6.7 or Company shall have breached in any material
respect its obligation under Section 6.8 to promptly prepare or cause to
be prepared the Proxy Statement and to send the same to the holders of
Company Stock in connection with the Company Stockholders' Meeting;
(j) By Parent if the Board of Directors of Company shall have
failed to recommend adoption of this Agreement at the duly convened
Company Stockholders' Meeting, or there has otherwise been a Change in
Company Recommendation, whether or not permitted by the terms hereof; or
(k) By Company if the Board of Directors of Company shall,
concurrently with such termination, authorize Company to enter into an
agreement with respect to a Competing Transaction; PROVIDED, HOWEVER, that
Company may only exercise its right to terminate this Agreement pursuant
to this Section 13.1(k) if (i) Company shall have complied in all material
respects with Section 6.7 (including, without limitation, providing to
Parent at least three (3) Business Days prior written notice of its
intention to take such termination action); (ii) the Board of Directors of
Company concludes in good faith (after consultation with a financial
advisor of nationally recognized reputation in similar transactions) that
such Competing Transaction constitutes a Superior Proposal; (iii) the
Board of Directors of Company reasonably determines in good faith (after
consultation with outside legal counsel) that the failure to exercise such
right of termination would be inconsistent with its fiduciary duties under
applicable Law; and (iv) simultaneously with such termination, Company
shall make a payment to Parent in an amount equal to the Termination Fee
(as such term is defined below) ; PROVIDED, that for purposes of this
Section 13.1(k) the term "Competing Transaction" shall have the meaning
set forth in Section 6.7, except that the reference to "15% or more" in
the definition of Competing Transaction shall be deemed to be a reference
to "a majority."
13.2. EFFECT OF TERMINATION.
(a) In the event of termination of this Agreement by either
Company or Parent as provided in Section 13.1, neither Company nor Parent
shall have any further obligation or liability to the other party except
with respect to the last sentence of Section 6.3, Section 13.1(k)(iv) and
this Section 13.2; PROVIDED, HOWEVER, that nothing herein shall relieve
any party from liability for any willful and material breach of the
warranties and representations made by it, or willful and material failure
in performance of any of its covenants, agreements or obligations
hereunder.
(b) Company shall pay Parent (by Fed wire transfer of
immediately available funds to such account as may be designated by Parent
in writing to Company)
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an amount equal to $40,000,000 (the "TERMINATION FEE") if this
Agreement is terminated as follows:
(i) if Parent shall terminate this Agreement pursuant to
Sections 13.1(i) or (j) then Company shall pay Parent the
Termination Fee on the Business Day following such termination;
(ii) if (A) either party shall terminate this Agreement
pursuant to Section 13.1(b) and (B) at any time after the date of
this Agreement and before the date of the Company Stockholders'
Meeting, a BONA FIDE Competing Transaction (or a proposal therefor)
shall have been publicly announced or otherwise publicly
communicated to Company's stockholders; and if (C) within twelve
(12) months of the date of such termination of this Agreement,
Company or any of its Subsidiaries executes any definitive agreement
with respect to, or consummates, any Competing Transaction, then
Company shall pay to Parent the Termination Fee on the Business Day
following such execution or consummation; PROVIDED, that for
purposes of this paragraph (ii) the term "Competing Transaction"
shall have the meaning set forth in Section 6.7, except that the
reference to "15% or more" in the definition of Competing
Transaction shall be deemed to be a reference to "a majority"; and
(iii) if (A) either party shall terminate this Agreement
pursuant to Sections 13.1(f), (g) or (h) or Parent shall terminate
this Agreement pursuant to Section 13.1(d), (B) at any time after
the date of this Agreement and before such termination a BONA FIDE
Competing Transaction (or a proposal therefor) shall have been
publicly announced or otherwise communicated to the Board of
Directors of Company and (C) following such public announcement or
communication of such Competing Transaction (or a proposal
therefor), Company shall have intentionally breached (and not cured
after notice thereof) any of its representations, warranties,
covenants or agreements set forth in this Agreement, which breach
shall have materially contributed to the failure of the Effective
Time of the Merger to occur prior to the termination of this
Agreement, then Company shall pay to Parent 50% of the Termination
Fee on the Business Day following such termination; and if (D)
within twelve (12) months of the date of such termination of this
Agreement, Company or any of its Subsidiaries executes any
definitive agreement with respect to, or consummates, any Competing
Transaction, then Company shall pay to Parent the remaining 50% of
the Termination Fee on the Business Day following such execution or
consummation; PROVIDED, that for purposes of this paragraph (iii)
the term "COMPETING TRANSACTION" shall have the meaning set forth in
Section 6.7, except that the reference to "15% or more" in the
definition of Competing Transaction shall be deemed to be a
reference to "a majority."
(c) If Company fails to pay all amounts due to Parent on the
dates specified in this Section 13.2, then Company shall pay all costs and
expenses (including legal fees and expenses) incurred by Parent in
connection with any action or proceeding (including the filing of any
lawsuit) taken by it to collect such unpaid amounts, together
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with interest on such unpaid amounts at the prime lending rate prevailing
at such time, as published in the Wall Street Journal, from the date such
amounts were required to be paid until the date actually received by
Parent.
(d) Parent (for itself and its Affiliates) hereby agrees that,
upon any termination of this Agreement under circumstances where Parent is
entitled to a Termination Fee under this Section 13.2 and Parent receives
such Termination Fee, Parent and its Affiliates shall be precluded from
any other remedy against Company, at law or in equity or otherwise, and
neither Parent nor any of its Affiliates shall seek (and Parent shall
cause its Affiliates not to seek) to obtain any recovery, judgment, or
damages of any kind, including consequential, indirect, or punitive
damages, against Company or any Company Subsidiary or any of their
respective directors, officers, employees, partners, managers, members or
stockholders in connection with this Agreement or the transactions
contemplated hereby.
ARTICLE 14.
MISCELLANEOUS
14.1. EXPENSES. Except as otherwise provided herein, all Expenses
incurred by Parent, Merger Sub and Company in connection with or related to the
authorization, preparation and execution of this Agreement, the solicitation of
stockholder approvals and all other matters related to the closing of the
transactions contemplated hereby, including, without limitation of the
generality of the foregoing, all fees and expenses of agents, representatives,
counsel and accountants employed by either such party or its Affiliates, shall
be borne solely and entirely by the party which has incurred the same.
"EXPENSES" as used in this Agreement shall include all reasonable out-of-pocket
expenses (including all fees and expenses of attorneys, accountants, investment
bankers, experts and consultants to the party and its Affiliates) incurred by
the party or on its behalf in connection with the consummation of the
transactions contemplated by this Agreement.
14.2. NOTICES. Any notice, request, instruction or other document to
be given hereunder by any party hereto to another shall be in writing and
delivered personally or by confirmed facsimile transmission or sent by a
recognized overnight courier service or by registered or certified mail, postage
prepaid, with return receipt requested, addressed as follows:
To Parent or Merger Sub: Bank of the West
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Vice Chairman - Finance
and
J. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Esq.,
Senior Executive Vice
President and General
Counsel
Facsimile Number: (▇▇▇) ▇▇▇-▇▇▇▇
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With a copy to: Pillsbury ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ LLP
▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇, Esq.
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
Facsimile Number: (▇▇▇) ▇▇▇-▇▇▇▇
To Company: Commercial Federal Corporation
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Executive Vice President
and Chief Financial Officer
Facsimile Number: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to: Wachtell, Lipton, ▇▇▇▇▇ & ▇▇▇▇
▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Facsimile Number: (▇▇▇) ▇▇▇-▇▇▇▇
Any such notice, request, instruction or other document shall be deemed
received (i) on the date delivered personally or delivered by confirmed
facsimile transmission, (ii) on the next Business Day after it was sent by
overnight courier, delivery charges prepaid; or (iii) on the fourth Business Day
after it was sent by registered or certified mail, postage prepaid. Any of the
persons shown above may change its address for purposes of this section by
giving notice in accordance herewith.
14.3. ASSIGNMENT. All terms and conditions of this Agreement shall
be binding upon and shall inure, to the extent permitted by Law, to the benefit
of the parties hereto and their respective permitted transferees and successors
and permitted assigns; PROVIDED, HOWEVER, that this Agreement and all rights,
privileges, duties and obligations of the parties hereto, without the prior
written approval of the other parties hereto, may not be transferred, assigned
or delegated by any party hereto (by operation of Law or otherwise) and any such
attempted transfer, assignment or delegation shall be null and void.
14.4. COUNTERPARTS. This Agreement and any exhibit hereto may be
executed in one or more counterparts, all of which, taken together, shall
constitute one original document and shall become effective when one or more
counterparts have been signed by the appropriate parties and delivered to each
party hereto.
14.5. EFFECT OF REPRESENTATIONS AND WARRANTIES. The representations
and warranties contained in this Agreement shall terminate immediately after the
Effective Time of the Merger.
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14.6. THIRD PARTIES. Each party hereto intends that this Agreement
shall not benefit or create any right or cause of action to any person other
than parties hereto, except as provided in Section 7.4(e). As used in this
Agreement the term "parties" shall refer only to Parent, Merger Sub and Company
as the context may require.
14.7. LISTS; EXHIBITS; INTEGRATION. The Confidentiality Agreement
and each Exhibit and the Company Disclosure Letter and the Parent Disclosure
Letter delivered pursuant to this Agreement shall be in writing and shall
constitute a part of this Agreement, although the Confidentiality Agreement and
each such Exhibit and the Company Disclosure Letter and the Parent Disclosure
Letter need not be attached to each copy of this Agreement. This Agreement,
together with the Confidentiality Agreement and each Exhibit and the Company
Disclosure Letter and the Parent Disclosure Letter, constitutes the entire
agreement between the parties pertaining to the subject matter hereof and
supersedes all prior agreements and understandings of the parties in connection
therewith.
14.8. KNOWLEDGE. Whenever any statement herein or in any list,
certificate or other document delivered to any party pursuant to this Agreement
is made "to the knowledge" or "to the best knowledge" of any party or another
Person, such party or other Person shall make such statement based upon the
actual knowledge of an executive officer of such Person.
14.9. GOVERNING LAW. This Agreement shall be governed by, and
construed in accordance with, the Laws of the State of California, regardless of
the Laws that might otherwise govern under applicable principles of conflict of
Laws thereof (except to the extent that mandatory provisions of federal Law or
the NBCA are applicable).
14.10. CAPTIONS. The captions contained in this Agreement are for
convenience of reference only and do not form a part of this Agreement and shall
not affect the interpretation hereof.
14.11. SEVERABILITY. If any portion of this Agreement shall be
deemed by a court of competent jurisdiction to be unenforceable, the remaining
portions shall be valid and enforceable only if, after excluding the portion
deemed to be unenforceable, the remaining terms hereof shall provide for the
consummation of the transactions contemplated herein in substantially the same
manner and with substantially the same effect as originally set forth at the
date this Agreement was executed.
14.12. WAIVER AND MODIFICATION; AMENDMENT. No waiver of any term,
provision or condition of this Agreement, in any one or more instances, shall be
deemed to be or construed as a further or continuing waiver of any such term,
provision or condition of this Agreement. Except as otherwise required by Law,
this Agreement, when executed and delivered, may be modified or amended by
action of the Boards of Directors of Parent, Merger Sub and Company without
action by their respective stockholders. This Agreement may be modified or
amended or any provision hereof waived only by an instrument of equal formality
signed by the parties or their duly authorized agents.
14.13. ENFORCEMENT; JURISDICTION. The parties agree that irreparable
damage would occur in the event that any of the provisions of this Agreement
were not performed in
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accordance with their specific terms or were otherwise breached, for which
monetary damages would not be an adequate remedy, and accordingly, each party
agrees that the other party shall be entitled to an injunction or injunctions to
prevent breaches of this Agreement and to enforce specifically the terms and
provisions hereof, this being in addition to any other remedy to which the
parties are entitled at law or in equity. Any suit, action or proceeding seeking
to enforce any provision of, or based on any matter arising out of or in
connection with, this Agreement or the transactions contemplated hereby or
thereby may be brought in any federal or state court located in the States of
California or Nebraska, and each of the parties hereby consents to the
jurisdiction of such courts (and of the appropriate appellate courts therefrom)
in any such suit, action or proceeding and irrevocably waives, to the fullest
extent permitted by Law, any objection which it may now or hereafter have to the
laying of the venue of any such suit, action or proceeding in any such court or
that any such suit, action or proceeding which is brought in any such court has
been brought in an inconvenient forum. Process in any such suit, action or
proceeding may be served on any party anywhere in the world, whether within or
without the jurisdiction of any such court. Without limiting the foregoing, each
party agrees that service of process on such party as provided in Section 14.2
shall be deemed effective service of process on such party.
14.14. WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY
IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING
ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY.
14.15. ATTORNEYS' FEES. If any legal action or any arbitration upon
mutual agreement is brought for the enforcement of this Agreement or because of
an alleged dispute, controversy, breach, or default in connection with this
Agreement, the prevailing party shall be entitled to recover reasonable
attorneys' fees and all other reasonable costs and expenses incurred in that
action or proceeding, in addition to any other relief to which it may be
entitled.
[Remainder of Page Intentionally Left Blank]
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IN WITNESS WHEREOF, the parties to this Agreement have duly executed this
Agreement as of the day and year first above written.
BANK OF THE WEST
By: /S/ ▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------------------------
Its: Chairman and Chief Executive
Officer
BEAR MERGER CO., INC.
By: /S/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------------------
Its: President and Chief Executive
Officer
COMMERCIAL FEDERAL CORPORATION
By: /S/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
----------------------------------------
Its: Chairman and Chief Executive
Officer
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