EXHIBIT 10.2
STOCK PURCHASE AGREEMENT
by and between
AMERICAN GENERAL FINANCE, INC.
and
STANDARD PACIFIC CORP.
August 26, 1998
TABLE OF CONTENTS
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Page
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ARTICLE I. PURCHASE AND SALE................................................ 1
1.1. Agreement of Purchase and Sale................................... 1
1.2. Closing.......................................................... 3
ARTICLE II. CONDUCT PENDING THE ACQUISITION.................................. 4
2.1. Conduct of Savings' Business Prior to the Closing Date........... 4
2.2. Forbearance by Seller and Savings................................ 4
2.3. Timeliness of American General's Consent......................... 6
2.4. Conduct by American General Prior to the Closing Date............ 6
ARTICLE III. REPRESENTATIONS AND WARRANTIES................................... 6
3.1. Representations and Warranties of Seller......................... 6
(a) Recitals True................................................ 6
(b) Capital Stock................................................ 6
(c) Authority.................................................... 7
(d) Subsidiaries................................................. 7
(e) Approvals.................................................... 7
(f) No Violations................................................ 7
(g) Financial Statements......................................... 8
(h) Absence of Certain Changes or Events......................... 8
(i) Taxes........................................................ 9
(j) Absence of Claims; Litigation................................10
(k) Regulatory Actions...........................................10
(l) Certain Agreements...........................................10
(m) Labor Matters................................................11
(n) Employee Benefit Plans.......................................11
(o) Insider Loans; Other Transactions............................12
(p) Title to Assets..............................................13
(q) Actual Knowledge as to Conditions............................13
(r) Compliance with Laws.........................................13
(s) Fees.........................................................13
(t) Environmental................................................14
(u) Performance of Obligations...................................16
(v) Insurance....................................................16
(w) Derivative Transactions......................................16
(x) Trust Administration.........................................16
(y) Qualified Thrift Lender......................................16
3.2. Representations and Warranties of American General...............17
(a) Recitals True................................................17
(b) Authority....................................................17
(c) Approvals....................................................17
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(d) No Violations................................................17
(e) Financial Statements.........................................17
(f) Absence of Certain Changes or Events.........................18
(g) Absence of Claims............................................18
(h) Actual Knowledge as to Conditions............................18
(i) Funds........................................................18
(j) Fees.........................................................18
ARTICLE IV. COVENANTS........................................................19
4.1. Acquisition Proposals............................................19
4.2. Employee Benefits................................................19
4.3. Access and Information...........................................20
4.4. Certain Filings, Consents and Arrangements.......................21
4.5. Additional Agreements............................................21
4.6 Publicity........................................................21
4.7. Notification of Certain Adverse Matters..........................22
4.8. Director Resignations............................................22
4.9. Human Resources Issues...........................................22
4.10. Assistance with Third-Party Agreements...........................22
4.11. Notices and Communications.......................................23
4.12. Insurance Policies Assignment....................................23
4.13. Name Change......................................................23
4.14. Tax Matters......................................................23
(a) Seller's Responsibilities....................................23
(b) American General's Responsibilities..........................25
(c) Taxes for Short Taxable Year.................................25
(d) Review of Tax Returns and Other Filings......................26
(e) Contest Provisions...........................................26
(f) Termination of Tax Allocation Agreements.....................27
(g) Section 338(h)(10)...........................................27
(A) Election...............................................27
(B) Allocation of Purchase Price...........................27
(h) Efforts to Obtain Certain Documents..........................27
(i) Cooperation after Closing....................................27
(j) Transfer Taxes...............................................28
(k) Miscellaneous................................................28
4.17. Assistance Agreement.............................................29
ARTICLE V. CONDITIONS TO CONSUMMATION.......................................29
5.1. Conditions to Each Party's Obligations...........................29
5.2. Conditions to Obligations of American General....................30
5.3. Conditions to Obligations of Seller..............................30
ARTICLE VI. TERMINATION......................................................31
6.1. Termination......................................................31
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6.2. Effect of Termination............................................31
ARTICLE VII. OTHER MATTERS....................................................32
7.1. Certain Definitions; Interpretations.............................32
7.2. Survival of Representations, Warranties and Covenants............33
7.3. Indemnification..................................................33
(a) Seller's Indemnification.....................................33
(b) American General's Indemnification...........................34
(c) Indemnification Procedures...................................35
(d) Adjustment to Purchase Price.................................38
(e) Exclusive Remedy.............................................38
7.4. Waiver...........................................................38
7.5. Counterparts.....................................................38
7.6. Governing Law; Venue.............................................38
7.7. Expenses.........................................................38
7.8. Notices..........................................................38
7.9. Entire Agreement.................................................39
7.10. Binding Effect; Assignment.......................................39
7.11. Severability.....................................................40
7.12. No Third Party Beneficiaries.....................................40
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STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT, dated as of the 26th day of August, 1998
(the "Agreement"), by and between AMERICAN GENERAL FINANCE, INC., an Indiana
corporation ("American General"), and STANDARD PACIFIC CORP., a Delaware
corporation ("Seller"), is entered into with reference to the following:
A. Standard Pacific Savings, F.A. ("Savings"), is a federally chartered
savings and loan association and subject to regulation and supervision by the
Office of Thrift Supervision ("OTS") and the Federal Deposit Insurance
Corporation ("FDIC"). The customer deposit accounts of Savings are insured by
the Savings Association Insurance Fund (the "SAIF") of the FDIC. All of the
issued and outstanding stock of Savings is owned by Seller.
B. American General desires to acquire Savings through the purchase of
all of the issued and outstanding stock of Savings on the terms and subject to
the conditions set forth in this Agreement, and Seller desires that such stock
be sold on such terms and subject to such conditions.
C. Subject to any specific provisions of this Agreement, it is the intent
of the parties that American General, by reason of this Agreement, shall not
(until consummation of the transaction contemplated hereby) control or be deemed
to control Savings, directly or indirectly, and shall not exercise or be deemed
to exercise, directly or indirectly, a controlling influence over the management
or policies of Savings.
D. The board of directors of American General has approved the
acquisition of the stock of Savings (the "Acquisition") and the transactions
contemplated by this Agreement, and has authorized the execution and delivery of
this Agreement by unanimous written consent of the Executive Committee of the
board of directors dated as of August 24, 1998. The board of directors of
Seller has authorized the execution and delivery of this Agreement at a meeting
of the board held on July 28, 1998.
Now, therefore, in consideration of the premises and the mutual agreements
contained herein, the parties hereto agree as follows:
ARTICLE I
Purchase and Sale
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1.1 Agreement of Purchase and Sale.
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(a) On the terms and subject to the conditions set forth in this
Agreement, American General agrees to purchase, and Seller agrees to sell
to American General (or to a subsidiary or affiliate of American General so
designated), all of the shares of Savings Common Stock (as defined in
Section 3.1(1)) held by Seller (the "Shares"), which Shares
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shall constitute all of the issued and outstanding shares of Savings Common
Stock. The purchase price for the Shares (the "Purchase Price") shall be
the sum of (i) the tangible stockholder's equity of Savings as of the
Closing (as defined in Section 1.2) plus $750,000. Tangible stockholder's
equity mean tangible stockholder's equity determined in accordance with
generally accepted accounting principles, consistently applied ("GAAP").
(b) No later than five business days before the Closing Date, Seller
shall provide to American General a written estimate of the Purchase Price
based upon the best available information at that time and which, absent
manifest error, shall be payable by American General by wire transfer in
immediately available funds at the Closing against delivery of the stock
certificates representing the Shares, duly endorsed for transfer to
American General (or its designee) or accompanied by stock powers separate
from the certificates that are appropriate for such purpose. Seller shall
instruct American General concerning the account to which the estimated
Purchase Price shall be paid and shall provide appropriate wire
instructions therefor at least two business days prior to the Closing.
(c) No later than 20 days following the Closing Date, Seller shall
provide to American General the unaudited statement of condition (the
"Closing Balance Sheet") of Savings, prepared in accordance with GAAP, and
the written calculation of the Purchase Price ("Purchase Price
Reconciliation"), each as of the Closing Date. Within 20 days thereafter,
American General shall indicate to Seller in writing whether it agrees or
disagrees with the Closing Balance Sheet or the Purchase Price
Reconciliation, or any portion thereof. If American General indicates its
disagreement during such period, American General and Seller shall have
until 60 days following the Closing Date to resolve such disagreement. On
the 61st day following the Closing Date, the parties shall either (i) have
agreed upon the adjustments, if any, to the Closing Balance Sheet and the
Purchase Price Reconciliation and shall, on a mutually agreeable date no
later than five days thereafter, cause the appropriate party to promptly
pay the other party the amount necessary to result in full payment of the
actual Purchase Price, as so calculated, or (ii) submit all remaining items
of disagreement to binding arbitration in accordance with Section 1.1(d)
hereof
(d) (i) In the event the parties hereto are unable to reach agreement
with respect to the Closing Balance Sheet or the Purchase Price
Reconciliation, then Ernst & Young LLP shall be retained no later than 65
days following the Closing Date to review the matter under dispute and to
determine the Purchase Price Reconciliation. If Ernst & Young LLP shall be
unable or unwilling to accept such retention, and the parties hereto are
unable to agree on another nationally recognized independent accounting
firm to make such determination, American General and Seller shall each
nominate a nationally recognized independent accounting firm that does not
regularly work for such party and is willing to accept such retention, and
one of such two nominated accounting firms shall be selected by a flip of a
coin with the flip being made by a lawyer for American General in the
presence of a lawyer for Seller, with Seller's lawyer designating prior to
the flip
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which firm will be chosen if "heads" results or "tails" results.
Such other independent accounting firm shall be selected no later than 70
days following the Closing Date and Ernst & Young or such other independent
accounting firm shall be referred to herein as the "Arbitrator."
(ii) With respect to a dispute as to the Closing Balance Sheet
and/or the Purchase Price Reconciliation contemplated by subsection 1.1(c),
American General and Seller shall each present the Arbitrator, no later
than three (3) days after the Arbitrator has accepted its appointment, with
its proposed Closing Balance Sheet and Purchase Price Reconciliation in
writing, and the Arbitrator shall select one of the two proposals to be the
Closing Balance Sheet and Purchase Price Reconciliation to which the
parties will be bound. The Arbitrator shall not have the discretion to
change either proposal or otherwise compromise between the two proposals.
(iii) American General and Seller shall be afforded the
opportunity to present to the Arbitrator any material or information
relating to the matters in dispute. The Arbitrator shall render its
decision as soon as possible, but not later than 30 days after the
Arbitrator is appointed. The Arbitrator's decision shall be in writing and
counterpart copies thereof shall be delivered to each of the disputing
parties. American General and Seller shall each bear and pay one-half of
the fees and disbursements of the Arbitrator in connection with its
analysis. The determination by the Arbitrator shall be final and binding on
the parties hereto. American General and Seller shall make such adjustments
to the Purchase Price, as determined by the Arbitrator, no later than three
(3) days following notification of the Arbitrator's decision.
(e) The payment required to adjust the estimated Purchase Price paid
at the Closing Date to the final Purchase Price payable hereunder shall
include interest, at the Federal Funds Rate, on the amount of such
additional payment from and including the Closing Date to, but not
including, the date of such additional payment. "Federal Funds Rate" shall
mean, for any day, the weighted average of the rates on overnight Federal
funds transactions with members of the Federal Reserve System arranged by
Federal funds brokers, as published on the next succeeding business day by
the Federal Reserve Bank of New York. The Federal Funds Rate for
Saturdays, Sundays and any other day on which the Federal Reserve Bank of
New York is closed shall be the Federal Funds Rate as in effect for the
next preceding day for which the Federal Funds Rate shall have been
determined.
1.2 Closing. The respective deliveries of consideration, stock
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certificates and other documents, and the taking of all other remaining actions
necessary to complete the purchase and sale transaction provided for in this
Agreement (the "Closing"), shall take place on the earlier to occur of (a)
December 31, 1998 (or, if such date is extended by American General pursuant to
Section 6.1(d) hereof, March 31, 1999), and (b) the month end following the
receipt of any required regulatory approvals and the expiration of any
applicable waiting periods or, if such receipt or expiration shall have occurred
within five (5) business days of the end of such month, then on the following
month end, or on such other date as American General and Seller may
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agree (the "Closing Date"). The Closing shall be held at the headquarters of
American General or at such other place as the parties hereto shall agree. All
deliveries of documents, payment of consideration and other actions necessary in
connection with or to complete the Closing shall be deemed to be taken and
effected simultaneously as part of one single transaction, and none of the
foregoing shall be deemed completed unless and until all are completed.
ARTICLE II
Conduct Pending the Acquisition
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2.1 Conduct of Savings' Business Prior to the Closing Date. Except as
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expressly provided in this Agreement, during the period from the date of this
Agreement to the Closing Date, Seller shall cause Savings to (a) conduct its
business in the usual, regular and ordinary course, consistent with past
practices and consistent with prudent banking practices, except that Seller may
permit Savings to engage in those actions contemplated herein; (b) use its best
efforts to maintain and preserve intact its business organization, employees and
advantageous customer relationships, to continue to develop such customer
relationships and to retain the services of its officers and key employees; (c)
maintain and keep its properties in as good repair and condition as at present
except for obsolete properties and for deterioration due to ordinary wear and
tear or damage due to casualty; (d) maintain in full force and effect insurance
comparable in amount and scope of coverage to that now maintained by it; (e)
perform in all material respects all of its obligations under its contracts,
leases and documents relating to and affecting its assets, properties and
business, except such obligations as it may in good faith reasonably dispute;
(f) comply with and perform all its obligations and duties imposed upon it by
all Federal and state laws, and applicable rules, regulations and orders imposed
by Federal, state and local governmental authorities; and (g) take no action
which would adversely affect or delay the ability of American General to obtain
any necessary approvals, consents or waivers of any governmental authority
required for the transactions contemplated hereby or to perform its covenants or
agreements on a timely basis under this Agreement.
2.2 Forbearance by Seller and Savings. During the period from the date
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of this Agreement to the Closing, except as set forth on a disclosure schedule
delivered concurrently with this Agreement (the "Disclosure Schedule") or as
otherwise contemplated by this Agreement, Seller shall not permit Savings,
without the prior written consent of American General, which consent shall not
be unreasonably withheld, to:
(a) adjust, split, combine or reclassify any capital stock; make,
declare or pay any dividend or make any other distribution on any capital
stock or, directly or indirectly, redeem, purchase or otherwise acquire any
shares of its capital stock or any securities or obligations convertible
into or exchangeable for any shares of its capital stock, or grant any
stock appreciation rights or grant any individual, corporation or other
entity any right to acquire any shares of its capital stock; or issue any
additional shares of capital stock;
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(b) except for purchases of securities in the ordinary course of
business consistent with past practice, make any material investment either
by purchase of stock, contributions to capital, property transfers, or
purchase of any properties or assets of any other individual, corporation
or other entity;
(c) enter into, renew or terminate any material contract or agreement,
or make any material change in any of its material leases or contracts,
other than (i) deposit agreements or (ii) in the ordinary course of
business consistent with past practice with respect to contracts,
agreements or leases terminable on not more than 90 days notice or
involving payment or payments of not more than $10,000 per annum in the
aggregate;
(d) increase in any manner the compensation (including, without
limitation, bonuses) or fringe benefits of any of its employees, former
employees or retirees or pay any pension or retirement allowance not
required by any existing plan or agreement to any such employees, former
employees or retirees, or become a party to, amend or commit to any
pension, retirement, retention, severance, deferred compensation, profit
sharing or welfare benefit plan or agreement or employment agreement with
or for the benefit of any employee, former employee or retiree, or
voluntarily accelerate the vesting of any employee benefits;
(e) hire additional officers or employees (except that Seller may
permit Savings to hire non-officer employees to fill vacancies in existing
positions at compensation levels and with benefits consistent with past
practices);
(f) amend its Federal Stock Charter or Bylaws, or change in any
material way its material policies and procedures (except as required by
changes in applicable law) or make any material changes to its tax or
financial accounting policies (except changes to its tax or financial
accounting policies as may be required by GAAP or regulatory accounting
practices);
(g) introduce any new services or products (other than products or
services relating to the Community Reinvestment Act (or other similar law
or regulation)), institute any new advertising campaign, open or apply to
open any new branch or facility, or, in general, change in any material
respects its products and services from those in effect at the date of this
Agreement;
(h) take any action that would result in a violation of any of the
covenants made herein by Seller or would result in any representations or
warranties of Seller becoming untrue;
(i) agree to, or make any commitment to, take any of the actions
prohibited by this Section 2.2.
2.3 Timeliness of American General's Consent. For purposes of Section
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2.2, any consent required from American General, unless earlier given or denied,
shall be deemed to have been given five (5) business days after the date on
which American General receives a written
5
request for such consent, unless during such five-day period American General
requests further information in writing reasonably necessary to allow the
decision to be made, in which case, such consent, unless earlier given or
denied, shall be deemed to have been given five (5) business days after the date
on which the requested information is furnished.
2.4 Conduct by American General Prior to the Closing Date. During the
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period from the date of this Agreement to the Closing Date, American General
shall take no action which would materially adversely affect or delay the
ability of American General to obtain any necessary approvals, consents or
waivers of any governmental authority required for the transactions contemplated
hereby or to perform its covenants or agreements on a timely basis under this
Agreement (other than actions taken either (a) in the normal course of business
or (b) otherwise without the intent of causing such effect or delay).
ARTICLE III.
Representations and Warranties
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3.1 Representations and Warranties of Seller. Seller represents and
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warrants to American General that, except as set forth in the Disclosure
Schedule:
(a) Recitals True. The information set forth in the recitals of this
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Agreement with respect to Seller and Savings is true and correct.
(b) Capital Stock. Savings is authorized to issue 100,000 shares of
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common stock, $20.00 par value ("Savings Common Stock"), and is not
authorized to issue any other class or series of capital stock, or any
other securities giving the holder thereof the right to vote on any matters
on which stockholders of Savings can vote. As of the date hereof, 100,000
shares of Savings Common Stock are issued and outstanding, all of which are
owned by Seller free and clear of any liens or encumbrances. All
outstanding shares of capital stock of Savings i.e., duly authorized,
validly issued and outstanding, fully paid and nonassessable, and are
subject to no preemptive rights.
(c) Authority. Savings has the power and authority, and is duly
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qualified in all jurisdictions where such qualification is required (except
for such qualifications the absence of which, individually or in the
aggregate, would not have a Material Adverse Effect on Savings), to carry
on its business as it is now being conducted and to own all of its material
properties and assets. Savings has all Federal, state and local
governmental authorizations necessary for it to own or lease its properties
and assets and to carry on its business as it is now being conducted,
except for such powers and authorizations the absence of which, either
individually or in the aggregate, would not have a Material Adverse Effect
on Savings. Seller is duly organized, validly existing and in good standing
under the laws of the State of Delaware and has all requisite power and
authority to perform its obligations hereunder and to consummate the
transactions contemplated herein.
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(d) Subsidiaries. Except for the stock it is required to hold in the
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Federal Home Loan Bank of San Francisco (the "FHLB SF"), Savings does not
own, directly or indirectly, any equity position or voting interest in any
corporation, partnership or other entity.
(e) Approvals. The execution by Seller of this Agreement has been
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authorized by all necessary corporate action, including, but not limited
to, a vote by unanimous written consent of its board of directors. This
Agreement is a valid and binding agreement of Seller, enforceable against
Seller in accordance with its terms, subject to bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium and similar laws of general
applicability relating to or affecting creditors' rights and to general
equitable principles.
(f) No Violations. The execution, delivery and performance of this
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Agreement by Seller does not, and the consummation of the transactions
contemplated hereby will not, constitute (i) a breach or violation of, or a
default under any applicable law, rule or regulation or any material
judgment, decree, order, governmental permit or license, or material
indenture, agreement or instrument of Seller or Savings, or to which any of
them (or any of their respective properties) is subject, which breach,
violation or default would have a Material Adverse Effect on Savings or
would materially hinder or delay the transactions contemplated hereby, or
(ii) a breach or violation of, or a default under, the charter documents or
Bylaws of either of them; and the consummation of the transactions
contemplated hereby will not require any approval, consent or waiver under
any such law, any rule, regulation, judgment, decree, order, governmental
permit or license or the approval, consent or waiver of any other party to
any such agreement, indenture or instrument, other than (1) the required
approvals, consents and waivers of governmental authorities referred to in
Section 4.4 and (2) any other approvals, consents or waivers the absence of
which, individually or in the aggregate, would neither result in a Material
Adverse Effect on Savings nor materially hinder or delay the transactions
contemplated hereby.
(g) Financial Statements.
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(i) Savings' unaudited financial statements as of December 31,
1997 and for the fiscal year then ended (the "Year-End Financials"), and
Savings' unaudited statement of condition as of June 30, 1998 and the
related statement of operations for the six-month period then ended (the
"June 30 Financials") have been provided to American General. The Year-End
Financials and the June 30 Financials (including any related notes and
schedules) fairly present the financial position, the results of
operations, retained earnings and cash flows, as the case may be, of
Savings as of the date thereof or for the periods set forth therein, in
each case in accordance with GAAP applicable to savings and loan
associations during the periods involved, except as permitted in the case
of unaudited statements (which may not include cash flow statements or
notes), and subject, in the case of the unaudited statements, to recurring
audit adjustments normal in
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nature and amount. The books and records of Savings are accurate in all
material respects.
(ii) Seller's audited consolidated financial statements as of
December 31, 1997 and for the fiscal year then ended, accompanied by the
audit report of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP, Seller's independent certified public
accountants, and Seller's unaudited consolidated balance sheet as of June
30, 1998 and the related consolidated statement of operations for the six-
month period then ended have been provided to American General. Such
audited financial statements and unaudited financial statements (including
any related notes and schedules) fairly present the financial position, the
results of operations, retained earnings and cash flows, as the case may
be, of Seller as of the date thereof or for the periods set forth therein,
in each case in accordance with GAAP during the periods involved, except as
permitted in the case of unaudited statements (which may not include cash
flow statements or notes), and subject, in the case of the unaudited
statements, to recurring audit adjustments normal in nature and amount.
(h) Absence of Certain Changes or Events. Except as set forth in the
------------------------------------
June 30 Financials, since December 31, 1997, there have not been (i) any
changes in the business, assets, financial condition or results of
operations of Savings that, individually or in the aggregate, have had a
Material Adverse Effect on Savings, except for any such changes that are
expressly contemplated by this Agreement; (ii) any amendment to the Federal
Stock Charter or Bylaws of Savings; (iii) any declaration, setting aside or
payment of any dividend or any other distribution in respect of the capital
stock of Savings; or (iv) any change by Savings in accounting principles or
methods or tax methods, except as required by GAAP or by any governmental
entities having jurisdiction over Savings with respect to financial
statements or tax returns filed by it. Except as set forth in Seller's June
30, 1998 financial statements, since December 31, 1997, there have not been
any changes in the business, assets, financial condition or results of
operations of Seller that, individually or in the aggregate, would
materially affect the ability of Seller to perform its obligations under
this Agreement.
(i) Taxes. (A) Except as set forth in the Disclosure Schedule, (i) all
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Tax Returns that are required to be filed by or with respect to Seller's
Group, including Savings, for periods ending on or before the Closing Date
have been and, with respect to the Tax Returns that are required to be
filed by Seller pursuant to Section 4.14 hereof, will be duly filed, and
were or, with respect to such Tax Returns that are required to be filed by
Seller pursuant to Section 4.14 hereof, will be, correct and complete in
all respects; (ii) Seller and Savings have delivered or made available to
American General true and complete copies of all such Tax Returns for 1995
and 1996 and, when available, will deliver to American General true and
complete copies of such Tax Returns that are required to be filed by Seller
pursuant to Section 4.14 hereof; (iii) all Taxes owed or required to be
withheld and paid over by Seller's Group, including Savings, have been paid
in full; (iv) the Tax Returns referred to in clause (i) have been examined
by the Internal Revenue Service or the appropriate state, local or foreign
taxing authority or the period for assessment of the Taxes in respect of
which such Tax Returns were required to
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be filed has expired; (v) all deficiencies asserted or assessments made as
a result of such examinations have been paid in full; (vi) no issues that
have been raised by the relevant taxing authority in connection with the
examination of any of the Tax Returns referred to in clause (i) are
currently pending; (vii) there is no dispute or claim concerning any
liability for Taxes against Savings or Seller's Group either claimed or
raised by any authority in writing or as to which any director or officer
or employee responsible for Tax matters of Seller's Group has personal
knowledge based upon personal contact with any agent of such authority;
(viii) no waivers of statutes of limitation have been given by or requested
with respect to any Taxes of Seller's Group; and (ix) no security
interests, liens, encumbrances, attachments or similar interests exist on
or with respect to any of the assets of Savings that arose in connection
with any failure or alleged failure to pay any Taxes. Savings has timely
complied with all requirements under applicable laws relating to
information, reporting and withholding for customer and other accounts
(including back-up withholding and furnishing of Forms 1099) except to the
extent in the aggregate would not result in a Material Adverse Effect on
Savings.
(B) No tax is required to be withheld pursuant to Section 1445 of
the Code as a result of the transfer contemplated by this Agreement.
(C) Savings has no liability for Taxes of any person (other than
Savings) under Treasury Regulation (S) 1.1502-6, as a transferee or
successor, or otherwise.
(D) As a result of American General's purchase of the Shares,
neither Savings nor American General will be obligated to make a payment to
an individual arising from employment or an independent contractor
relationship with Savings that would be a "parachute payment" to a
"disqualified individual" as those terms are defined in Section 280G of the
Code without regard to whether such payment is reasonable compensation for
personal services performed or to be performed in the future.
(E) Savings does not maintain a reserve for bad debts for tax
purposes, and is not and will not be required to recapture any reserve
pursuant to Sections 593(e) and (g) of the Code.
(j) Absence of Claims; Litigation. No litigation, proceeding or
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controversy before any court or governmental agency is pending against
Savings which is reasonably likely, individually or in the aggregate, to
have a Material Adverse Effect on Savings or to materially hinder or delay
consummation of the transactions contemplated hereby, and, to the actual
knowledge of Seller or Savings, no such litigation, proceeding,
controversy, claim or action has been threatened. Savings is not in
default with respect to any material judgment, order, writ, injunction,
decree, or award of any court, arbitrator or governmental agency or
instrumentality. The Disclosure Schedule contains a complete listing of
litigation pending or, to the actual knowledge of Seller or Savings,
threatened, against Savings, or to which Savings is a party or which names
Savings as a defendant or cross-defendant and the amount reserved for
litigation matters in the aggregate. The
9
litigation reserves, if any, as reflected in the June 30 Financials are
adequate in accordance with GAAP.
(k) Regulatory Actions. Savings is not a party to any cease and
------------------
desist order, written agreement, memorandum of understanding or any similar
regulatory action or order with any Federal or state governmental
authorities, nor within the past three years has Savings been a party to
any written agreement with or commitment letter or similar undertaking to,
nor has Savings been subject to any order or directive by, any Federal or
state governmental authorities, nor has it adopted any board resolution at
the request of any of its regulators. Savings has not been advised that
any such issuance or request is contemplated. As of the date hereof, to
the actual knowledge of Savings and Seller, Savings is not the subject of a
referral to either the United States Department of Justice or the
Department of Housing and Urban Development for alleged violations of the
Equal Credit Opportunity Act (15 U.S.C. (S) 1691, et seq.), the Fair
-- ---
Housing Act (420 U.S.C. (S) 3601, et seq.), the Bank Secrecy Act (31 U.S.C.
-- ---
(S) 5322, et seq.), the Home Mortgage Disclosure Act (12 U.S.C. (S) 2801,
-- ---
et seq.) and the Community Reinvestment Act (12 U.S.C. (S) 2901, et seq.)
-- --- -- ---
To the actual knowledge of Seller and Savings, each material violation,
criticism, or exception by any governmental authority with respect to any
examinations of Savings has been resolved to the satisfaction of the
applicable regulatory authority.
(l) Certain Agreements. Savings is not a party to any oral or
------------------
written (i) consultant agreement, not terminable on 90 days' or less notice
and involving the payment of more than $10,000 per annum, (ii) agreement
with or with respect to any executive officer of Savings providing any term
of employment or compensation guarantee, or (iii) agreement or plan, any of
the benefits of which will be increased, or the vesting of the benefits of
which will be accelerated, by the occurrence of any of the transactions
contemplated by this Agreement or the value of any of the benefits of which
will be calculated on the basis of any of the transactions contemplated by
this Agreement. American General has been provided with a complete and
accurate listing of the names and current annual salary rates of all
persons employed by Savings, showing for each such person the amounts paid
or payable as salary, bonus payments and any indirect compensation and any
severance or retention pay as of July 1, 1998, the names of all of Savings'
directors and officers and the names of all persons, if any, holding tax or
other powers of attorney for Savings.
(m) Labor Matters. Savings is not a party to nor is it bound by
-------------
any collective bargaining agreement, contract, or other agreement or
understanding with a labor organization, nor is Savings the subject of any
proceeding asserting Savings has committed an unfair labor practice or
seeking to compel Savings to bargain with any labor organization as to
wages and conditions of employment, nor is there any strike or labor
dispute involving Savings pending or threatened. Savings considers its
employee relations to be satisfactory.
10
(n) Employee Benefit Plans. A list of all Employee Plans (as
----------------------
hereinafter defined) is set forth in the Disclosure Schedule. Savings has
delivered or made available to American General true and complete copies of
the following documents, as they may have been amended to the date hereof,
embodying or relating to Employee Plans: Each of the Employee Plans,
including all amendments thereto, any related trust agreements, insurance
policies or any funding agreements; the most recent determination letter
from the Internal Revenue Service ("IRS") with respect to each of the
Employee Plans; the actuarial evaluation, if any, for the most recent plan
year prepared for each of the Employee Plans; the current summary plan
description of each of the Employee Plans; and the most recent annual
return/report on IRS Forms 5500, 5500-C or 5500-R for each of the Employee
Plans for which such report was prepared.
Except as set forth in the Disclosure Schedule:
(i) the written terms of each of the Employee Plans and, if
controlled by Savings or Seller, any related trust agreement, group
annuity contract, insurance policy or other agreement, have been
administered in substantial compliance with the applicable
requirements of the Employee Retirement Income Security Act of 1974,
as amended ("ERISA") and the Code;
(ii) each of the Employee Plans for which Savings has claimed a
deduction under Code Section 404, as if such Employee Plan were
qualified under Code Section 401(a), has received a favorable
determination letter from the IRS as to the tax qualification of such
Employee Plan, and to the actual knowledge of Savings such favorable
determination has not been modified, revoked or limited by failure to
satisfy any condition thereof or by a subsequent amendment to, or
failure to amend, such Employee Plan;
(iii) to the actual knowledge of Savings, neither it nor any
other "disqualified person" or "party in interest" (as defined in Code
Section 4975 and Section 3(14) of ERISA, respectively) with respect to
an Employee Plan has engaged in any "prohibited transaction" (as
defined in Code Section 4975 or Section 406 or 407 of ERISA) that
could reasonably be expected to subject Savings to any material tax,
penalty or liability under Code Section 4975 or Title I of ERISA;
(iv) no Employee Plan is a Multiple Employer Plan within the
meaning of Code Section 413 or a Multiemployer Plan within the meaning
of Section 3(37) of ERISA;
(v) Savings has not incurred and does not have actual
knowledge of any pending material tax, penalty or liability under Code
Section 4972 with respect to any Employee Plan;
(vi) continuation health care coverage requirements and notice
requirements under Code Section 4980B and Sections 601 through 608 of
ERISA
11
have been satisfied in all material respects with respect to all
current or prior employees of Savings and any "qualified beneficiary"
of any such employees (within the meaning of Code Section 4980B(g));
(vii) no "reportable event" within the meaning of Code Section
4043(c) has occurred, or is reasonably likely to occur with respect to
any Employee Plan; and
(viii) no Employee Plan provides for retiree medical benefits.
For purposes hereof, the term "Employee Plan" means any "employee
benefit plan" (as defined in (S) 3(3) of ERISA) as well as any other
material written or formal plan or contract involving direct or indirect
compensation under which Savings has any present or future obligations or
liability on behalf of its employees or former employees or their
dependents or beneficiaries, including, but not limited to, each
retirement, employee stock ownership, cash or deferred, each other deferred
or incentive compensation, bonus, stock option, employee stock purchase,
"phantom" stock or stock appreciation right plan, each other program
providing payment or reimbursement for or of medical, dental or visual
care, counseling, or vacation, sick, disability or severance pay and each
other "fringe benefit" plan or arrangement.
(o) Insider Loans; Other Transactions. Savings has previously
---------------------------------
provided American General with a listing, current as of June 30, 1998, of
all extensions of credit made to Seller's or Savings' executive officers
and directors and their related interests (all as defined under Federal
Reserve Board Regulation O), all of which have been made in compliance with
Regulation O, which listing is true, correct and complete in all material
respects. Except as set forth in the Disclosure Schedule, Savings does not
owe any amount to, or have any contract or lease with or commitment to, any
of the present executive officers or directors of Seller or Savings (other
than for compensation (including accrued vacation and severance
obligations) for current services not yet due and payable, and
reimbursement of expenses arising in the ordinary course of business).
(p) Title to Assets. Savings has good and marketable title to all
---------------
of its material properties and assets (other than property as to which it
is lessee), including, without limitation, all personal and tangible
properties reflected in the Year-End Financials or the June 30 Financials,
or acquired subsequently thereto, subject to no liens, mortgages, security
interests, encumbrances or charges of any kind except (1) as noted in the
Year-End Financials or the June 30 Financials or as set forth in the
Disclosure Schedule, (2) statutory liens not yet delinquent which are being
contested in good faith by appropriate proceedings, and liens for Taxes not
yet due, (3) defects and irregularities in title and encumbrances which do
not materially impair the use thereof for the purpose for which they are
intended, (4) pledges of assets in the ordinary course of business to
secure public deposits, (5) for those assets and properties disposed of for
fair value in the ordinary course of business since the date of the Year-
End Financials or the June 30 Financials, and (6) any other liens,
mortgages, security interests, encumbrances or
12
charges of any kind, which in the aggregate do not exceed $10,000 in
amount. Without limiting the above, Savings owns or possesses valid and
binding licenses and other rights to itself use without payment all
material patents, copyrights, trade secrets, trade names, service marks,
logos and trademarks used in its business, and Savings has not received any
notice of conflicts with respect thereto that asserts the rights of others.
(q) Actual Knowledge as to Conditions. As of the date hereof
---------------------------------
neither Seller nor Savings knows of any reason why the approvals, consents
and waivers of governmental authorities referred to in Section 5.1(b)
should not be obtained without the imposition of any condition of the type
referred to in the provisos thereto.
(r) Compliance with Laws. Savings is not in violation in respect
--------------------
of any applicable Federal, state or local laws, rules, regulations or
orders applicable to it or by which its properties may be bound, except for
violations which individually or in the aggregate could not reasonably be
expected to have a Material Adverse Effect on Savings.
(s) Fees. Other than financial advisory services performed for
----
Seller by Friedman, Billings, ▇▇▇▇▇▇ & Co., Inc. ("FBR"), neither Seller
nor Savings, nor any of their respective officers, directors, employees or
agents, has employed any broker or finder or incurred any liability for any
financial advisory fees, brokerage fees, commissions or finder's fees in
connection with this Agreement or the transactions contemplated hereby.
The fees of FBR referred to in the preceding sentence shall be paid by
Seller.
(t) Environmental.
-------------
(i) All of the properties and operations of Savings are in
compliance in all material respects with all material Environmental
Laws (as defined below) applicable to such properties and operations.
Savings' environmental practices with respect to real estate secured
loans have been substantially in compliance with industry standards
since July 1995.
(ii) Savings has obtained all material permits, licenses, and
authorizations which are required for Savings' operations under
Environmental Laws.
(iii) No Hazardous Substances (as defined below) exist on,
about, or within or have been used, generated, stored, transported,
disposed of on, or released from, any of Savings' properties except in
accordance in all material respects with Environmental Laws. Neither
Seller nor Savings has any actual knowledge as of the date of this
Agreement that any prior owners, occupants or operators of any such
property or any other property in which Savings has a security
interest, ever deposited, disposed of or allowed to be deposited or
disposed of, in, on, or under or handled or processed on, or released,
emitted or discharged from, such properties any Hazardous Materials
except in accordance in
13
all material respects with Environmental Laws, or that any prior or
present owners, occupants or operators of any properties in which
Savings holds a security interest, mortgage or other lien or interest,
deposited or disposed of, in, on or under or handled and/or processed
on, or released, emitted or discharged from, such properties any
Hazardous Material except in accordance in all material respects with
Environmental Laws. The use which Savings has made, makes and intends
to make of its properties will not result in the use, generation,
storage, transportation, accumulation, disposal or release of any
Hazardous Substance on, in, or from any of such properties except in
accordance in all material respects with applicable Environmental
Laws.
(iv) There is no action, suit, proceeding, investigation, or
inquiry before any court, administrative agency or other governmental
authority pending, or, to the actual knowledge of Seller and Savings,
threatened against Savings relating in any way to any material
violation of any Environmental Law. To the actual knowledge of Seller
and Savings, Savings has no material liability for remedial action
with respect to a violation of an Environmental Law. Seller and
Savings have not received any written requests for information
relating to any material violations of any Environmental Law from any
governmental authority with respect to the condition, use, or
operation of any of Savings' properties nor has any of them received
any notice from any governmental authority or any written notice from
any other person with respect to any material violation of or material
liability for any remedial action under any Environmental Law.
(v) As used in this Section, the term "Environmental Law"
means any and all Federal, state and local laws, regulations, and
requirements pertaining to health, safety and the environment,
including, without limitation, the Comprehensive Environmental
Response Compensation and Liability Act of 1980, 42 U.S.C. (S) 9601,
et seq. ("CERCLA"), the Resource Conservation and Recovery Act of
1975, 42 U.S.C. (S) 6901, et seq. ("RCRA"), the Occupational Safety
and Health Act, 29 U.S.C. (S) 651, et seq. (as it relates to the use
of, or exposure to, Hazardous Substances), the Clean Air Act, 42
U.S.C. (S) 7401, et seq., the Clean Water Act, 33 U.S.C. (S) 1251, et
seq., the Toxic Substance Control Act, 15 U.S.C. (S) 2601, et seq.,
the ▇▇▇▇▇▇▇▇▇-▇▇▇▇▇▇▇-▇▇▇▇▇▇ Hazardous Substance Account Act, as
amended, Chapter 6.8 of the California Health and Safety Code, (S)
25300, et seq., and the Hazardous Waste Control Law, Chapter 6.5 of
the California Health and Safety Code, (S) 25100, et seq. (the latter
two statutes being referred to herein as the State Acts), and any and
all regulations promulgated thereunder, and all similar laws,
regulations, and requirements of any governmental authority, agency
having jurisdiction over the environmental activities of Savings or of
its properties, as such laws, regulations, and requirements may be in
effect on the date hereof.
(vi) As used in this section, the term "properties" shall
include: all real estate property owned or leased by Savings; and any
other property as to which
14
Savings would reasonably be expected to be deemed an "owner" or
"operator" under any applicable Environmental Law.
(vii) As used in this section, the term "Hazardous Substance"
shall mean any "hazardous waste" as defined by CERCLA and State Acts,
as such acts are in effect on the date hereof, and any and all
regulations promulgated thereunder; (1) any "hazardous substance" as
such term is defined by CERCLA; (2) any "regulated substance" as
defined by the State Acts; (3) asbestos requiring abatement, removal
or encapsulation pursuant to the requirements of governmental
authorities; (4) polychlorinated biphenyls, (5) petroleum products;
(6) "hazardous chemicals" or extremely hazardous substances" in
quantities sufficient to require reporting, registration, notification
and/or optional treatment or handling under the Emergency Planning and
Community Right to Know Act of 1986; (7) any "hazardous chemical" in
levels that would result in exposure greater than is allowed by
permissible exposure limits established pursuant to the Occupational
Safety and Health Act of 1970; (8) any substance that requires
reporting, registration, notification, removal; abatement and/or
special treatment, storage, handling or disposal, under (S)(S) 6, 7
and 8 of the Toxic Substance Control Act (15 U.S.C. (S) 2601); (9) any
toxic or hazardous chemical described in 29 C.F.R. 1910.100-1047 in
levels that would result in exposure greater than those allowed by the
permissible exposure limits pursuant to such regulations; and (10) any
(A) "hazardous waste", (B) "solid waste" capable of causing a "release
or threatened release" that present an "imminent and substantial
endangerment" to the public health and safety of the environment, (C)
"solid waste" that is capable of causing a "hazardous substance
incident", (D) "solid waste" with respect to which special
requirements are imposed by applicable governmental authorities upon
the generation, transportation thereof as such terms are defined and
used within the meaning of the States Acts or (E) any "pollutant" or
"toxic pollutant" as such term is defined in the Federal Clean Water
Act, 33 U.S.C. (S)(S) 1251-1376, as amended, by Public Law 1004,
February 4, 1987, and the regulations promulgated thereunder,
including 40 C.F.R. (S)(S) 122.1 and 122.26.
(u) Performance of Obligations. Savings has performed in all material
--------------------------
respects all of the obligations required to be performed by it to date
under, and is not in default under or in breach of, any term or provision
of any material contract, lease, indenture or any other material agreement
to which Savings 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, in each case which would
have a Material Adverse Effect on Savings. The Disclosure Schedule contains
a list of all contracts to which Savings is a party, except for contracts
terminable without penalty on not more than 90 days' notice or involving
the payment of not more than $10,000 per annum, deposit agreements and loan
agreements.
(v) Insurance. Savings has in effect policies of insurance with
---------
respect to its assets and business against such casualties and
contingencies and in such types and forms
15
as in the judgment of Savings' management are appropriate for its business,
operations, properties and assets. Other than policies of title insurance,
Savings shall make available to American General, within ten (10) days of
the date of this Agreement, copies of all policies of insurance and bonds
carried and owned by Savings as of the date hereof, which copies are
complete and accurate in all material respects, and which are listed in the
Disclosure Schedule. Savings is not in default under any such policy of
insurance or bond such that it is reasonably likely to be canceled. No
notice of cancellation or material amendment has been received with respect
to existing material policies, and no coverage thereunder with respect to
any material claims is being disputed.
(w) Derivative Transactions. Savings is not a party to a transaction
-----------------------
in or involving forwards, futures, options on futures, swaps or other
derivative instruments.
(x) Trust Administration. Other than for retirement accounts,
--------------------
Savings does not presently exercise trust powers, including, but not
limited to, trust administration, and has not exercised such trust powers
for a period of at least five (5) years prior to the date hereof.
(y) Qualified Thrift Lender. Savings is and will remain through the
-----------------------
Closing Date a "qualified thrift lender" within the meaning of Section
1467(a)(m) (l)(B) of the Home Owners' Loan Act and the related regulations
of the OTS.
3.2 Representations and Warranties of American General. American General
---------------------------------------------------
represents and warrants to Seller that:
(a) Recitals True. The information set forth in the recitals of this
-------------
Agreement with respect to American General are true and correct.
(b) Authority. American General is duly organized, validly existing
---------
and in good standing under the laws of the State of Indiana and has all
requisite power and authority to perform its obligations hereunder and to
consummate the transactions contemplated hereby.
(c) Approvals. The execution by American General of this Agreement
---------
has been authorized by all necessary corporate actions of American General,
including, but not limited to, a vote by its board of directors. No vote,
consent or approval of the shareholders of American General is required to
authorize this Agreement or the consummation of the transactions
contemplated hereby. This Agreement is a valid and binding agreement of
American General enforceable against American General in accordance with
its terms, subject to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws of general applicability
relating to or affecting creditor's rights and to general equity
principles.
(d) No Violations. The execution, delivery and performance of this
-------------
Agreement by American General does not, and consummation of the
transactions contemplated hereby will not, constitute (i) a breach or
violation to or a default under,
16
any applicable law, rule or regulation or any material judgment, decree,
order, governmental permit or license, or material indenture, agreement or
instrument of American General, or to which American General (or its
property) is subject, which breach, violation or default would have a
Material Adverse Effect on American General or would materially hinder or
delay the transactions contemplated hereby or (ii) a breach or violation of
or a default under, the Articles of Incorporation or Bylaws of American
General; and the consummation of the transactions contemplated hereby will
not require any approval, consent or waiver under any such law, rule,
regulation, judgment, decree, order, governmental permit or license or the
approval, consent or waiver of any other party to any such agreement,
indenture or instrument, other than (1) the required approvals, consents
and waivers of governmental authorities referred to in Section 4.4, and (2)
any other approvals, consents or waivers, the absence of which,
individually or in the aggregate, would not result in a Material Adverse
Effect on American General or would not materially hinder or delay the
transactions contemplated hereby.
(e) Financial Statements. American General's audited consolidated
--------------------
financial statements as of December 31, 1997 and for the fiscal year then
ended (the "American General Audited Financials"), accompanied by the audit
report of Ernst & Young LLP, American General's independent certified
public accountants, and American General's unaudited consolidated balance
sheet as of June 30, 1998 and the related consolidated statement of income
for the six-month period then ended (the "American General June 30
Financials") have been provided to Seller. The American General Audited
Financials and the American General June 30 Financials (including any
related notes and schedules) fairly present the financial position, the
results of operations, retained earnings and cash flows, as the case may
be, of American General as of the date thereof or for the periods set forth
therein, in each case in accordance with GAAP during the periods involved,
except as permitted in the case of unaudited statements, and subject, in
the case of the unaudited statements, to recurring audit adjustments normal
in nature and amount.
(f) Absence of Certain Changes or Events. Except as set forth in the
------------------------------------
American General June 30 Financials, since December 31, 1997, there have
not been any changes in the business, assets, financial condition or
results of operations of American General that, individually or in the
aggregate, have had a Material Adverse Effect on American General.
(g) Absence of Claims. No litigation, proceeding or controversy
-----------------
before any court or governmental agency is pending against American General
which is reasonably likely, individually or in the aggregate, to materially
hinder or delay consummation of the transactions contemplated hereby, and,
to its actual knowledge, no such litigation, proceeding, controversy, claim
or action has been threatened.
(h) Actual Knowledge as to Conditions. American General knows of no
---------------------------------
reason why the approvals, consents and waivers of governmental authorities
referred to in Section 5.1(b) should not be obtained without the imposition
of any condition of the type referred to in the provisos thereto.
17
(i) Funds. American General has funds available to complete the
-----
transactions contemplated hereby.
(j) Fees. Neither American General nor any of its officers,
----
directors, employees or agents has employed any broker or finder or
incurred any liability for any financial advisory fees, brokerage fees,
commissions or finder's fees in connection with this Agreement or the
transactions contemplated hereby.
ARTICLE IV
Covenants
---------
4.1 Acquisition Proposals. Seller agrees that until any termination
---------------------
pursuant to Article VI hereof neither it nor Savings nor any of their respective
officers and directors shall, and Seller shall direct and use its best efforts
to cause its employees, agents and representatives (including, without
limitation, any investment banker, attorney or accountant retained by them) not
to, and shall cause Savings to direct and use its best efforts to cause Savings'
employees, agents and representatives (including, without limitation, any
investment banker, attorney or accountant retained by them) not to, initiate or
solicit any inquiries or the making of any proposal or offer with respect to, a
merger, consolidation or similar transaction involving, or any purchase of all
or substantially all of the assets or any equity securities of, Savings (any
such proposal or offer being hereinafter referred to as an "Acquisition
Proposal") or engage in any negotiations concerning, or provide any confidential
information or data to, or have any discussions with, any person relating to an
Acquisition Proposal. Seller will promptly cease and cause to be terminated,
and shall cause Savings to cease and cause to be terminated, any existing
discussions or negotiations with any parties conducted heretofore with respect
to any of the foregoing. Seller shall promptly notify American General, and
shall cause Savings to promptly notify American General, of any written
Acquisition Proposal that either of them receives from any third party.
4.2 Employee Benefits.
-----------------
(a) All employees of Savings continuing in the employ of Savings
following the Closing will be permitted to participate in employee benefit
plans of American General on substantially the same basis as other
similarly situated employees of American General and its affiliates,
subject to satisfaction of vesting and eligibility requirements. To the
extent that any employees of Savings are permitted pursuant to the
preceding sentence to participate in employee benefit plans (within the
meaning of Section 3(1) of ERISA) of American General, such employees will
be given credit for initial eligibility purposes (and for no other
purposes) under such employee welfare benefit plans for their period of
employment with Savings. Such employees shall also be given credit under
any American General vacation policies to which they are subject based upon
their period of employment with Savings.
(b) Except as provided in subsection 4.2(d), Seller shall assume from
Savings and perform in accordance with their terms any existing individual
employment,
18
severance, deferred compensation and similar agreements between Savings and
any current or former officer, director, employee or consultant of Savings
who is terminated by Savings on or before the Closing Date.
(c) Seller and/or Savings have entered into written and verbal
agreements to pay bonus compensation to certain employees upon the closing
of a transaction such as that contemplated herein provided that such
employees continue in their employment through the Closing Date. All
obligations associated therewith shall be recorded as of the Closing Date
on the financial statements of Savings and be taken into account in
preparing the written estimate pursuant to Section 1.1(b).
(d) On or before the Closing Date, the chief executive/financial
officer of Savings will resign or Seller shall cause Savings to otherwise
terminate their employment. All severance and other obligations of Savings
associated therewith shall be paid or recorded as of the Closing Date on
the financial statements of Savings and be taken into account in preparing
the written estimate pursuant to Section 1.1(b).
4.3 Access and Information.
----------------------
(a) Upon reasonable notice, Seller shall cause Savings to afford to
American General and its representatives (including, without limitation,
directors, officers and employees, and their affiliates, and counsel,
accountants and other professionals retained) such reasonable access during
normal business hours throughout the period prior to the Closing to the
books, records (including, without limitation, Tax Returns and work papers
of independent auditors), properties, policies, files, personnel and to
such other information as such persons may reasonably request; permit such
persons to inspect and make copies of all stock records, minute books,
books of account, contracts, commitments and other records; furnish to
American General such counterpart originals or certified or other copies of
such documents or such information with respect to its businesses and
affairs as American General may reasonably request and that Savings may
provide without violation of applicable law or regulation or jeopardy to
any attorney-client or similar privilege to which Savings may be entitled
as against third parties other than American General. Without limiting the
foregoing, Seller shall cause Savings promptly to provide American General
monthly unaudited balance sheets and operating statements, and such other
reports and materials as are normally prepared and provided to the Board of
Directors or senior management of Savings, promptly following the date the
same are provided to the Board of Directors and senior management of
Savings. Seller shall cause Savings to provide American General with as
much information concerning an exit interview or similar meetings held in
connection with any regulatory examinations of Savings and with respect to
the examination findings and results as Savings can provide without
violation of law.
(b) No party shall, and each shall cause its representatives not to,
use any information obtained pursuant to this Section 4.3 for any purpose
unrelated to the consummation of the transactions contemplated by this
Agreement. Subject to the
19
requirements of applicable laws and regulations (including stock exchange
regulations), American General shall keep confidential and shall cause its
representatives to keep confidential, and Seller shall keep confidential
and shall cause its representatives, Savings and Savings' representatives
to keep confidential, all information, documents and trade secrets obtained
pursuant to this Section 4.3 unless such information (i) becomes or has
become available to such party or Savings from other sources not known by
such party or Savings to be bound by a confidentiality obligation, (ii) is
disclosed with the prior written approval of the party to which such
information pertains or with the prior written approval of Seller if such
information pertains to Savings or (iii) is or becomes readily
ascertainable from published information or trade sources. In the event
that this Agreement is terminated or the transactions contemplated by this
Agreement shall otherwise fail to be consummated, each party shall promptly
cause all copies of documents or extracts thereof containing information
and data as to another party hereto to be destroyed or returned to the
party that furnished the same, as such furnishing party may designate.
4.4 Certain Filings, Consents and Arrangements. American General and
------------------------------------------
Seller shall, and Seller shall cause Savings to, (a) promptly make any filings
and applications required to be filed in order to obtain all approvals, consents
and waivers of the OTS, the FDIC and any other governmental authorities
necessary or appropriate for the consummation of the transactions contemplated
hereby, (b) cooperate with one another (i) in promptly determining what filings
are required to be made or approvals, consents, or waivers are required to be
obtained under any relevant Federal or state law or regulation, (ii) in
providing the other a reasonable opportunity to review and comment upon the
publicly available portions of such filings, and (iii) in promptly making any
such filings, furnishing information required in connection therewith and
seeking timely to obtain any such approvals, consents or waivers and (c) deliver
to the other copies of publicly available portions of all such filings and
applications promptly after they are filed. In addition, if American General so
elects, Seller shall cooperate, and shall cause Savings to cooperate at American
General's expense, in filing any application necessary or desirable to convert
Savings to a Federal savings bank.
4.5 Additional Agreements. Subject to the terms and conditions herein
---------------------
provided, American General and Seller agree, and Seller agrees to cause Savings,
to use all reasonable best efforts to take promptly, or cause to be taken
promptly, all actions and to do promptly or cause to be done promptly, all
things necessary, proper or advisable under applicable laws and regulations to
consummate and make effective the transactions contemplated by this Agreement as
promptly as practicable, including using reasonable best efforts to obtain all
necessary actions or nonactions, extensions, waivers, consents and approvals
from all applicable governmental entities and other third parties, affecting all
necessary registrations, applications and filings and obtaining any required
contractual consents (including consent to assignment of leases where required)
and regulatory approvals.
4.6 Publicity. The initial press releases announcing this Agreement
---------
shall be issued concurrently. The parties shall consult with each other in
issuing any press releases or otherwise making public statements with respect to
the transactions contemplated hereby and in making
20
any filings with any governmental entity or with any national securities
exchange with respect thereto, and shall not issue any press release that
discloses the identity of the other party without such other party's prior
written consent. If any party hereto, on the advice of counsel, determines that
a disclosure is required by law or regulation (including stock exchange
regulation), it may make such disclosure without the consent of the other
parties, but only after affording the other parties a reasonable opportunity to
review and comment upon the disclosure.
4.7 Notification of Certain Adverse Matters. Seller shall give American
---------------------------------------
General, and shall cause Savings to give American General, prompt notice of: (a)
with respect to Savings, any material adverse change in its respective business,
operations, or prospects (it being understood that material adverse change as
used in this clause (a) does not include any changes expressly contemplated by
this Agreement), and with respect to Seller, any change that would materially
affect the ability of Seller to perform its obligations under this Agreement,
(b) any material complaints, investigations or hearings (or communications
indicating that same may be contemplated) of any governmental agency or
regulatory authority, (c) the institution or the threat of material litigation,
or (d) any event or condition that constitutes a breach of this Agreement, or
that might be reasonably expected to cause its respective representations or
warranties set forth herein not to be true and correct in all material respects
as of the Closing Date. American General shall give Seller prompt notice of any
event or condition known to it which is reasonably likely to materially hinder
or delay consummation of the transactions contemplated hereby.
4.8 Director Resignations. Seller shall cause Savings to deliver to
---------------------
American General at the Closing the resignations of the members of the Board of
Directors of Savings.
4.9 Human Resources Issues. Seller agrees to cooperate with American
----------------------
General, and agrees to cause Savings to cooperate with American General, with
respect to any formal meetings or interviews with one or more employees called
or arranged by Savings and held for the purpose of discussing the transactions
contemplated by this Agreement or their effect on such employees, with American
General given the opportunity to participate in such meetings or interviews.
This section is not intended to apply to casual conversations about the
transaction or informal meetings initiated by employees, or to prohibit
discussion in general, but rather to allow American General a role in the formal
presentation of the transaction to employees, and an opportunity to participate
in the significant, formal meetings at which the transaction is explained and
discussed.
4.10 Assistance with Third-Party Agreements.
--------------------------------------
(a) Prior to the Closing, Seller shall cooperate with and use all
reasonable efforts, and shall cause Savings to cooperate with and to use
all reasonable efforts, to assist American General in (i) gaining access to
all of Savings' third-party vendors and the landlords of all of Savings'
leased properties, promptly after the date of this Agreement and after
Seller or Savings has contacted them, (ii) obtaining the cooperation of
such third parties in a smooth transition in accordance with American
General's timetable at or after the Closing, provided that nothing herein
shall require Seller or
21
Savings to pay fees or other consideration to any such third party in order
to obtain such cooperation.
(b) Seller shall cause Savings to be responsible for all fees and
expenses of third parties incurred by Savings in connection with the taking
of any action pursuant to Sections 4.10(a), provided that Seller shall have
the right to approve any such payments. American General agrees that all
actions taken pursuant to this Section 4.10 shall be taken in a manner
intended to minimize disruption to the customary business activities of
Savings.
4.11 Notices and Communications. Seller shall cause Savings, if requested
--------------------------
to do so by American General following receipt of all approvals of governmental
authorities to the transactions contemplated by this Agreement, but prior to the
expiration of any statutory waiting periods, if it receives a statement by
American General in writing that to its actual knowledge there are no conditions
to Closing set forth in Article V that have not been, or cannot be, satisfied
prior to Closing, (a) to cooperate with American General by sending necessary or
appropriate customer notifications and communications as drafted by American
General to advise such customers of the impending transaction and of American
General's plans for Savings following the Closing, and (b) to take or cause to
be taken at the direction of and as agent for American General, all actions
necessary to comply with the provisions of the Worker Adjustment And Retraining
Notification Act, as amended (12 U.S.C. 2101, (S)2101, et seq.), with respect
-- ---
to all employees of Savings covered by such act who are to be terminated by
American General within sixty days following the effective time, including the
issuance of notices to such employees.
4.12 Insurance Policies Assignment. Seller agrees to make commercially
-----------------------------
reasonable efforts, and agrees to cause Savings to make commercially reasonable
efforts, to obtain consent to partial or complete assignments of any insurance
policies of Savings if requested to do so by American General to the extent
necessary to maintain the benefits to American General of such policies as they
apply to Savings and its affairs. Seller shall also inform American General,
and shall cause Savings to inform American General, no later than the Closing
Date of any material unfiled insurance claims of which they have actual
knowledge and for which they believe coverage exists.
4.13 Name Change. Concurrently with the Closing, American General shall
-----------
cause Savings to cease using the name "Standard Pacific," but may thereafter
refer to "Standard Pacific" as a predecessor name to the extent reasonably
necessary.
4.14 Tax Matters.
-----------
(a) Seller's Responsibilities.
-------------------------
(i) Seller shall be liable for, and shall defend, indemnify and
hold harmless American General and its directors, officers, employees,
attorneys and agents from, any and all Taxes of any kind or character,
including, without limitation,
22
(A) all Taxes of Savings for any taxable year or period that
ends on or before the Closing Date and, with respect to any
taxable year or period beginning before and ending after the
Closing Date, the portion of such taxable year ending on, and
including, the Closing Date, including any Taxes attributable to
the election to be made under Section 338(h)(10) of the Code and
any corresponding election under applicable state Tax law;
(B) any obligation to contribute to the payment of a Tax
determined on a consolidated, combined or unitary basis with
respect to a group of corporations that includes or included
Savings and Taxes resulting from Savings ceasing to be a member
of Seller's Group;
(C) any Taxes resulting from any deferred income
recharacterized as income by reason of Treasury Regulation
(S)1.1502-13 and Treasury Regulation (S)1.1502-14 and any excess
loss accounts taken into income under Treasury Regulation
(S)1.1502-19 (and any similar state, local or foreign provision),
that are (1) imposed on Seller's Group (other than Savings) for
any taxable year or (2) imposed on Savings, or for which Savings
may otherwise be liable, for any taxable year or period that ends
on or before the Closing Date and, with respect to any taxable
year or period beginning before and ending after the Closing
Date, the portion of such taxable year ending on and including
the Closing Date; and
(D) all Taxes resulting from the application of Treas. Reg.
(S)1.1502-6 or comparable provisions of any Tax Authority in
respect of a consolidated return for any period ending on or
before the Closing Date.
The indemnification obligation provided hereunder shall
include indemnification for costs and expenses, including
reasonable attorney's fees and expenses and other costs and
expenses associated with defense of a claim or incurred in
obtaining indemnification hereunder, whether or not they are
incurred in a formal proceeding. Seller shall be entitled to any
refund of Taxes of Savings received after Closing attributable to
such periods. Notwithstanding the foregoing, Seller shall not be
liable for, and shall have no obligation to indemnify American
General hereunder for, any Taxes to the extent that (i) such
Taxes arise from the events or actions occurring on the Closing
Date after the Closing, other than those events or actions that
are deemed to occur after the Closing, under the consolidated
return Treasury Regulations or otherwise, that actually occur
prior to, or simultaneously with, the Closing or as part of the
Acquisition, (ii) such taxes arise from an adjustment to an item
of income, loss, deduction or credit claimed for a pre-Closing
period that gives rise to an offsetting adjustment and reduction
in Taxes for a post-Closing period (considering, inter alia, in
----- ----
determining the amount of such reduction, changes in tax
23
rates), or (iii) such Taxes, together with the Taxes for which
indemnification is provided pursuant to Section 7.3, are not in
excess of the amount of accrued and unpaid Taxes set forth on the
Closing Balance Sheet.
(ii) Seller shall file or cause to be filed when due (A) all
consolidated, combined or unitary Tax Returns that are required to be
filed by or with respect to Savings for taxable years or periods
ending on or before the Closing Date and (B) all other Tax Returns
that are required to be filed by or with respect to Savings that are
due on or prior to the Closing Date, and Seller shall pay any Taxes
due in respect of (A) or (B) above. Seller will take no position
(unless required by law) or make any election on such Tax Returns that
would adversely affect Savings after the Closing Date.
(b) American General's Responsibilities.
-----------------------------------
(i) American General shall be liable for all Taxes of Savings
for any taxable year or period that begins after the Closing Date and,
with respect to any taxable year or period beginning before and ending
after the Closing Date, the portion of such taxable year beginning
after the Closing Date, and American General shall indemnify Seller
for any Taxes imposed on Seller's Group or Seller to the extent that
such Taxes arise from the events or actions described in clause (i) of
the last sentence of Section 4.14(a)(i).
(ii) American General shall file or cause to be filed when due
all Tax Returns that are required to be filed by or with respect to
Savings, other than the consolidated, combined or unitary Tax Returns
referred to in Section 4.14(a)(ii)(A) above, that are due after the
Closing Date, and American General shall pay any Taxes due in respect
of the Tax returns described above, subject to reimbursement by Seller
for Taxes Seller is liable for under Section 4.14(a)(i).
(c) Taxes for Short Taxable Year. Whenever it is necessary to
----------------------------
determine the liability hereunder for Taxes of Savings for a portion of a
taxable year or period that begins before and ends after the Closing Date,
the determination of the Taxes of Savings for the portion of the year or
period ending on, and the portion of the year or period beginning after,
the Closing Date shall be determined by assuming that Savings had a taxable
year or period which ended at the close of the Closing Date and that
Savings closed its books at that time, except that exemptions, allowances
or deductions that are calculated on an annual basis, such as the deduction
for depreciation, shall be apportioned pro rata on a daily basis.
--- ----
Notwithstanding anything to the contrary herein, any franchise Tax paid or
payable with respect to Savings shall be allocated to the taxable period
during which the income, operations, assets or capital comprising the base
of such Tax is measured, regardless of whether the right to do business for
another taxable period is obtained by the payment of such Tax.
24
(d) Review of Tax Returns and Other Filings. To the extent that one
---------------------------------------
party (the "nonfiling party") would be liable under this Section 4.14 for
Taxes payable with respect to, or would otherwise be subject to increased
liability for Taxes as a result of, Tax Returns or other filings filed by
another party (the "other party"), the other party shall allow the
nonfiling party adequate opportunity to review and comment on such Tax
Returns or other filings and shall not file such Tax Returns or other
filings without the consent of the nonfiling party; provided, such
--------
nonfiling party agrees that it is liable for such Taxes hereunder and,
provided further, that such consent shall not be unreasonably withheld.
-------- -------
(e) Contest Provisions. American General and Seller shall promptly
------------------
notify each other in writing upon receipt by either of them, or any of
their affiliates, or Savings, of notice of any pending or threatened
federal, state, local or foreign tax audits or assessments which may
materially affect the tax liabilities of Savings for which Seller would be
required to indemnify American General pursuant to this Agreement.
Seller shall have the sole right to represent Savings' interests in
any tax audit or administrative or court proceeding relating to taxable
periods ending on or before the Closing Date, and to employ counsel of its
choice, at its expense. Notwithstanding the foregoing, Seller (A) shall
consult with American General with respect to the resolution of any issue
that would affect American General or Savings in any way and to any extent,
in the taxable periods subject to such proceeding or any other taxable
periods (including, but not limited to, any resolution that would result in
the imposition of income tax deficiencies, the reduction of asset basis or
cost adjustments, the lengthening of any amortization or depreciation
periods, the denial of amortization or depreciation deductions, or the
reductions of loss or credit carryforwards to Savings or American General),
and (B) shall not settle any such issue or file any amended return relating
to such issue, without the consent of American General, which consent shall
not be unreasonably withheld.
Seller shall be entitled to participate at its expense in the defense
of any claim for Taxes for a period described in Section 4.14(c) for the
portion of the year or period ending on the Closing Date that is the
subject of indemnification by Seller hereunder. Neither American General
nor Savings may agree to settle any such claim for Taxes for the portion of
the year or period ending on the Closing Date that is the subject of
indemnification by Seller hereunder without the prior written consent of
Seller, which consent shall not be unreasonably withheld. Seller shall not
settle any such claim, or take any other action with respect to such claim,
without the consent of American General, which shall not be unreasonably
withheld.
(f) Termination of Tax Allocation Agreements. Any tax allocation or
----------------------------------------
sharing agreement or arrangement, whether or not written, that may have
been entered into by Seller or any member of Seller's Group and Savings
shall be terminated as to Savings as of the Closing Date, and no payments
which are owed by or to Savings pursuant thereto
25
shall be made thereunder, except to the extent such obligation or
receivable is reflected on the final Closing Balance Sheet, in which case
it shall be paid.
(g) Section 338(h)(10).
------------------
(A) Election. At the request of American General, Seller shall
--------
make a joint election with American General under Section 338(h)(10)
of the Code with respect to the purchase of Savings' Shares and under
any similar provisions of state or foreign law. Seller represents
that its sale of the Shares of Savings is eligible for, and American
General represents that it is qualified to make, such election. If
the election is made, Seller and American General shall on the Closing
Date exchange completed and executed copies of Internal Revenue
Service Form 8023, required schedules thereto, and any similar state
and foreign forms. If any changes are required in these forms as a
result of information which is first available after the Closing Date,
the parties will promptly agree on such changes.
(B) Allocation of Purchase Price. If an election under Section
----------------------------
338(h)(10) of the Code is made, Seller and American General will (i)
cause their respective accountants to negotiate in good faith, on
their behalf, and agree to, or (ii) appoint an appraiser to determine
a purchase price and an allocation of that price among the assets of
Savings that are deemed to have been acquired pursuant to Section
338(h)(10) of the Code or state or foreign law equivalent. American
General and Seller shall use the asset values determined from such
allocation for purposes of all reports and returns with respect to
Taxes.
(h) Efforts to Obtain Certain Documents. Seller agrees, upon
-----------------------------------
request, to use its reasonable best efforts to obtain any certificate or
other document from any governmental authority or any other person as may
be necessary to mitigate, reduce or eliminate any tax that could be imposed
on Savings (including, but not limited to, with respect to the transactions
contemplated by this Agreement).
(i) Cooperation after Closing. After the Closing Date, Seller and
-------------------------
American General shall:
(i) assist (and cause their respective affiliates to assist)
the other party in preparing any Tax Returns or reports which such
other party is responsible for preparing and filing in accordance with
this Section 4.14;
(ii) cooperate fully in preparing for any audits of, or
disputes with taxing authorities regarding, any Tax Returns of
Savings;
(iii) make available to the other and to any taxing authority as
reasonably requested all information, records, and documents relating
to Taxes of Savings;
26
(iv) provide timely notice to the other in writing of any
pending or threatened tax audits or assessments of Savings for taxable
periods for which the other may have a liability under this Agreement;
(v) furnish the other with copies of all correspondence
received from any taxing authority in connection with any tax audit or
information request with respect to any such taxable period;
(vi) retain and (upon the other party's request) provide
records and information that are reasonably relevant to any audit,
litigation or other proceeding or to tax matters pertinent to Savings
relating to any taxable year or period beginning before the Closing
Date until the expiration of the statute of limitations (and any
extensions thereof) of the respective taxable periods and give the
other party reasonable written notice prior to transferring,
destroying or discarding any such records and information; provided,
--------
if American General so requests, after receiving notice that such
records are to be destroyed or discarded, Seller shall allow American
General to take possession of such books and records; and, provided
--------
further, that American General shall not be required to give such
-------
notice to Seller after the expiration of the statute of limitations
(and any extensions thereof known to American General) of the
respective tax period to which such books and records relate;
(vii) provide, upon request, all information that may be
required for reporting pursuant to Section 6043 of the Code and the
regulations thereunder; and
(viii) abide by all record retention agreements entered into with
any taxing authority.
(j) Transfer Taxes. All transfer, documentary, sales, use, stamp,
--------------
registration and other such Taxes and fees (including penalties and
interest) incurred in connection with the transactions contemplated by this
Agreement shall be paid by Seller when due, and Seller will, at its
expense, file all necessary Tax Returns or other forms for such Taxes and
other documentation with respect to all such matters. If required by
applicable law, American General will join in the execution of any such
returns or documentation.
(k) Miscellaneous. Any payment by American General or Seller under
-------------
this Section 4.14 will be an adjustment to the Purchase Price. Except as
otherwise contemplated by this Section 4.14, the provisions of Section 7.3
shall apply to any claim for indemnification hereunder.
4.15 Assistance Agreement. Seller (as successor to Standard Pacific LP),
--------------------
Savings and the FDIC (as successor to the Federal Savings and Loan Insurance
Corporation) are parties to an Assistance Agreement dated as of March 6, 1987
(the "Assistance Agreement"). Among other things, the Assistance Agreement
provides for certain payments from either Seller or Savings or both to the FDIC.
If and to the extent that Savings has any liability to the FDIC pursuant to the
27
Assistance Agreement which liability is not accrued on the Closing Balance
Sheet, Seller agrees that it will promptly pay such liability directly to the
FDIC when required or, if such direct payment is not permitted, will promptly
reimburse Savings for such amount. If and to the extent that Savings receives
any payments from the FDIC pursuant to the Assistance Agreement which receivable
is not accrued on the Closing Balance Sheet, American General will cause Savings
to promptly pay such amount to Seller. American General agrees to notify Seller
if it or Savings subsequent to the Closing Date receives any notice from the
FDIC that any such liability will be asserted and agrees to permit Seller upon
reasonable request to have access to the books and records of Savings to the
extent reasonably necessary to resolve any such claim.
ARTICLE V
Conditions to Consummation
--------------------------
5.1 Conditions to Each Party's Obligations. The respective obligations of
--------------------------------------
American General on the one hand and of Seller on the other hand to close the
transaction contemplated by this Agreement shall be subject to the satisfaction
or waiver prior to the Closing of the following conditions:
(a) The Agreement and the transactions contemplated hereby shall have
been approved by Seller in accordance with applicable law.
(b) American General shall have procured, as necessary, the required
approval, consent or waiver with respect to the Agreement and the
transactions contemplated hereby by the OTS, and, the applicable statutory
waiting period shall have expired; and the parties shall have procured all
other regulatory approvals, consents or waivers of governmental authorities
or other persons that are necessary or appropriate to the consummation of
the transactions contemplated by the Agreement; provided, however, that no
-------- -------
approval, consent or waiver referred to in this Section 5.1(b) shall be
deemed to have been received if it shall include any condition or
requirement that would be materially burdensome on American General or deny
American General the benefits anticipated from the Acquisition; and
provided, further, that a condition or requirement imposed on the basis of
-------- -------
Savings' compliance with regulatory capital requirements generally
applicable to savings associations shall not be deemed to be materially
burdensome.
(c) No party hereto shall be subject to any order, decree or
injunction of a court or agency of competent jurisdiction which enjoins or
prohibits the consummation of the Acquisition.
5.2 Conditions to Obligations of American General. The obligations of
---------------------------------------------
American General to close the transactions contemplated by this Agreement shall
be subject to the satisfaction or waiver prior to the Closing Date of the
following additional conditions:
28
(a) Each of the representations and warranties of Seller contained in
this Agreement shall, in all material respects, be true at the Closing Date
as if made on such date. Without affecting the representations of Seller
made as of the date of this Agreement, the Disclosure Schedule shall be
updated and made current to such dates as close to the Closing Date as is
reasonable for each type of disclosure and as are agreed upon by the
parties hereto no later than thirty (30) days prior to the Closing Date.
Seller shall have performed, in all material respects, each of its
covenants and agreements contained in this Agreement and American General
shall have received a certificate signed by the Chief Executive Officer or
the Chief Financial Officer of Seller, at the Closing Date, to the
foregoing effect.
(b) No litigation or proceeding shall be pending against Seller or
Savings brought by any governmental agency seeking to prevent consummation
of the transactions contemplated hereby.
5.3 Conditions to Obligations of Seller. The obligations of Seller
-----------------------------------
hereunder shall be subject to the satisfaction or waiver prior to the Closing
Date of the following additional conditions:
(a) Each of the representations, warranties and covenants of American
General contained in this Agreement shall, in all material respects, be
true at the Closing Date as if made on such date; American General shall
have performed, in all material respects, each of its covenants and
agreements contained in this Agreement; and Seller shall have received a
certificate signed by the Chief Executive Officer or the Chief Financial
Officer of American General at the Closing Date, to the foregoing effect.
(b) No litigation or proceeding shall be pending against American
General or any of its subsidiaries brought by any governmental agency
seeking to prevent consummation of the transactions contemplated thereby.
ARTICLE VI
Termination
-----------
6.1 Termination. This Agreement may be terminated, and the Acquisition
-----------
abandoned, prior to the Closing Date:
(a) by the mutual agreement of Seller and American General;
(b) by American General or Seller in the event of a material breach
by the other party hereto of any representation, warranty, covenant or
agreement contained herein, which is not cured within 30 days after written
notice of such breach is given to the party committing such breach by the
other party; provided, however, that solely for purposes of this Section
-------- -------
6.1(b) a breach by Seller of a representation or warranty contained herein
shall be deemed to be a material breach only if such breach has not been
29
waived and if the failure of any such representation or warranty to be true
has or constitutes, individually or in the aggregate with other
representations or warranties that are untrue, a Material Adverse Effect on
either Savings or Seller or hinders, delays or otherwise adversely affects
the consummation of the transactions contemplated hereby; and provided,
--------
further, that solely for purposes of this Section 6.1(b) a breach by
-------
American General of a representation or warranty contained herein shall be
deemed to be a material breach only if such breach has not been waived and
if the failure of such representation or warranty to be true hinders,
delays or otherwise adversely affects the consummation of the transactions
contemplated hereby;
(c) by American General or Seller by written notice to the other
party if any governmental authority of competent jurisdiction shall have
issued a final, nonappealable order enjoining or otherwise prohibiting
consummation of the transactions contemplated by this Agreement; or
(d) by American General or Seller in the event that the Acquisition
is not consummated by December 31, 1998, unless the failure to so
consummate by such time is due to the breach of any representation,
warranty or covenant contained in this Agreement by the party seeking to
terminate; provided, however, that American General shall be entitled to
extend such date to March 31, 1999 on or before December 31, 1998 by notice
to Seller accompanied by a wire transfer payment of $200,000 (which sum
shall not be a credit to the Purchase Price).
6.2 Effect of Termination. In the event of the termination of this
---------------------
Agreement by either American General or Seller, as provided above, this
Agreement shall thereafter become void and there shall be no liability on the
part of any party hereto or their respective officers or directors, except that
any such termination shall be without prejudice to the rights of any party
hereto arising out of the willful breach by any party of any covenant or willful
misrepresentation contained in this Agreement; provided, however, that if the
-------- -------
Acquisition does not occur on or before December 31, 1998 (or, if such date is
extended by American General pursuant to Section 6.1(d) hereof, March 31, 1999)
due to American General's failure to consummate the transactions contemplated
hereby other than by reason of a material breach by Seller of any
representation, warranty, covenant or agreement contained herein (including, but
not limited to, a failure by American General to obtain the required approval,
consent or waiver of any governmental authority required to permit consummation
of the Acquisition), then American General shall promptly pay Seller the sum of
$200,000 by wire transfer in immediately available funds.
ARTICLE VII
Other Matters
-------------
7.1 Certain Definitions; Interpretations. As used in this Agreement, the
------------------------------------
following terms shall have the meanings indicated:
30
"actual knowledge" shall mean facts and other information which any senior
vice president or superior officer or the controller of a party actually knows.
"Adverse Consequences" shall mean any and all losses, liabilities, damage
to property, liens, encumbrances, damages, judgments, demands, suits, claims,
assessments, charges, fines, penalties, environmental cleanup liability, costs
and expenses, including reasonable attorney's fees and expenses and other costs
and expenses associated with defense of a claim or incurred in obtaining
indemnification hereunder, whether or not in a formal proceeding.
"Material" means material to American General, Seller or Savings (as the
case may be) and its respective subsidiaries, taken as a whole.
"Material Adverse Effect", with respect to a person, means a material
adverse effect upon (i) business, operations, financial condition or results of
operations of such person and its subsidiaries, taken as a whole, or (ii) the
ability of such person to timely perform its obligations under, and to timely
consummate the transactions contemplated by, this Agreement.
"Person" includes an individual, corporation, partnership, association,
trust or unincorporated organization.
"Seller's Group" shall mean any "affiliated group" (as defined in Code
Section 1504(a) without regard to the limitations contained in Code Section
1504(b)) that includes Seller or any predecessor or successor to Seller (or
another such predecessor or successor).
"Subsidiary", with respect to a person, means any other person the stock or
equity of which is more than 50% owned by such person.
"Taxes" shall mean any federal, state, local, or foreign income, gross
receipts, license, payroll, employment, excise, severance, stamp, occupation,
premium, .windfall profits, environmental (including taxes under Code Section
59A), customs duties, capital stock, franchise, profits, withholding, social
security (or similar), unemployment, disability, real property, personal
property, sales, use, transfer, registration, value added, alternative or add-on
minimum, estimated, or other taxes, or assessments in the nature of taxes, of
any kind whatsoever, including any interest, penalty, or addition thereto, and
any interest in respect of such penalties or additions whether disputed or not.
"Tax Return" shall mean any return, declaration, report, claim for refund,
or information return or statement relating to Taxes, including, without
limitation, consolidated federal income tax returns of Seller's Group, and
including any schedule or attachment thereto, and including any amendment
thereof.
The table of contents and headings contained in this Agreement offer ease
of reference only and shall not affect the meaning or interpretation of this
Agreement. Whenever the words "include", "includes", or "including" are used in
this Agreement, they shall be deemed followed by the words "without limitation".
Any singular term in this Agreement shall be deemed to include the plural, and
any plural term, the singular.
31
7.2 Survival of Representations, Warranties and Covenants. The
-----------------------------------------------------
representations, warranties and covenants of the parties hereto shall survive
the Closing for a period of one year from and after the Closing Date, provided
that (i) the representations and warranties, covenants and indemnification
obligations of Seller with respect to capital stock, title to assets, litigation
and environmental manners (Sections 3.1(b), 3.1(j), 3(p), 3.1(t) and
7.3(a)(i)(A) (as it applies to Sections 3.1(b), 3.1(j), 3.1(p) and 3.1(t) and
Sections 7.3(a)(i)(B) and (C) only) shall survive the Closing for a period of
three years and (ii) the covenants and indemnification obligations related to
Taxes (Sections 4.14 and 7.3(a)(i)(A) (as it applies to obligations, but not
representations or warranties) and 7.3(a)(i)(D) only) shall survive the Closing
until all applicable statutes of limitations periods shall have run. No claim
may be made for damages asserted to arise out of any claimed breaches or
inaccuracies of the representations, warranties and covenants made by Seller
herein unless such claim is asserted prior to the termination of the respective
periods of survival stated in the preceding sentence.
7.3 Indemnification.
---------------
(a) Seller's Indemnification.
------------------------
(i) Seller shall defend, indemnify and hold harmless American
General and its officers, directors, employees, attorneys and agents
from any and all Adverse Consequences to American General of any kind
or character arising out of, in connection with, or resulting from:
(A) the breach by Seller of any of its obligations or
representations and warranties under this Agreement;
(B) litigation or claims against Savings or its directors or
officers filed prior to the Closing Date or within three years
thereafter related to matters that occurred prior to the Closing;
provided, however, that Savings' litigation reserve (if existing)
-------- -------
as set forth in the Closing Balance Sheet shall first be utilized
in the event of any such Adverse Consequences, and the
indemnification obligation of Seller shall only apply to Adverse
Consequences above that amount;
(C) environmental hazards, risks or matters, to the extent
required to be addressed by applicable Environmental Laws,
discovered by American General after the Closing Date related to
any of Savings' properties (as defined in Section 3.1(t)(vi)),
provided such environmental hazards, risks or matters result from
the condition of such property prior to the Closing Date; and
(D) any failure of Seller to fulfill its responsibilities
and satisfy its obligations as specified in Section 4.14;
provided, that the indemnification obligation of Seller under
--------
this Section 7.3(a)(i)(D) shall only apply to the extent that
such Adverse Consequences and the Taxes
32
indemnified pursuant to Section 4.14, together, exceed the amount
of accrued but unpaid taxes as set forth on the Closing Balance
Sheet.
(ii) Notwithstanding the provisions of Section 7.3(a)(i),
American General shall not be entitled to assert rights of
indemnification under subsections 7.3(a)(i)(A), (B) and (C) until the
aggregate of all Adverse Consequences described in such subsections
7.3(a)(i)(A), (B) (after utilization of the litigation reserve, as
described therein) and (C) exceeds $25,000 (the "American General
Threshold Amount"), it being understood that all such Adverse
Consequences shall accumulate until such time as the aggregate amount
thereof exceeds the American General Threshold Amount, whereupon
American General shall be entitled to indemnification hereunder for
all Adverse Consequences that have occurred in excess of the American
General Threshold Amount.
(iii) The amount of any indemnification shall be the principal
amount of the obligation, plus any interest payable by American
General in respect of such obligation, plus interest from the date
American General makes or made payment to the date when reimbursed by
Seller, at the Federal Funds Rate during such period. Any
indemnification payment shall be reduced by the amount of any tax
benefits actually realized by American General with respect to the
matters that are the subject of the claim.
(b) American General's Indemnification.
----------------------------------
(i) American General shall defend, indemnify and hold harmless
Seller and its officers, directors, employees, attorneys and agents
from any and all Adverse Consequences of any kind or character arising
out of, in connection with, or resulting from (A) the ownership,
possession, operation, use or maintenance of Savings after the Closing
Date, (B) the breach by American General of any of its obligations or
representations and warranties hereunder or (C) environmental hazards,
risks or matters, to the extent required to be addressed by applicable
Environmental Laws, discovered by American General after the Closing
Date related to any of Savings' properties (as defined in Section
3.1(t)(vi)), provided such environmental hazards, risks or matters
result solely from the condition of such property after the Closing
Date and arise after the Closing Date, and do not result from the
condition of such property prior to the Closing Date.
(ii) Notwithstanding the provisions of Section 7.3(b)(i), Seller
shall not be entitled to assert rights of indemnification under
subsections 7.3(b)(i)(A), (B) and (C) until the aggregate of all
Adverse Consequences described in such subsections 7.3(b)(i)(A), (B)
and (C) exceeds $25,000 (the "Seller Threshold Amount"), it being
understood that all such Adverse Consequences shall accumulate until
such time as the aggregate amount thereof exceeds the Seller Threshold
Amount, whereupon Seller shall be entitled to indemnification
33
hereunder for all Adverse Consequences that have occurred in excess of
the Seller Threshold Amount.
(iii) The amount of any indemnification shall be the principal
amount of the obligation, plus any interest payable by Seller in
respect of such obligation, plus interest from the date Seller makes
or made payment to the date when reimbursed by American General, at
the Federal Funds Rate during such period. Any indemnification
payment shall be reduced by the amount of any tax benefits actually
realized by Seller with respect to the matters that are the subject of
the claim.
(c) Indemnification Procedures. Except as otherwise provided in
--------------------------
Section 4.14(e), all claims for indemnification under this Agreement will
be asserted and resolved as provided in this Section 7.3(c).
(i) A party claiming indemnification under this Agreement (an
"Indemnified Party") will promptly (A) notify the party from whom
indemnification is sought (the "Indemnifying Party") of any third-
party claim or claims ("Third-Party Claim") asserted against the
Indemnified Party which could give rise to a right of indemnification
under this Agreement and (B) transmit to the Indemnifying Party a
written notice ("Claim Notice") describing in reasonable detail the
nature of the Third-Party Claim, a copy of all papers served with
respect to such claim (if any), an estimate of the amount of Adverse
Consequences attributable to the Third-Party Claim, if reasonably
possible, and the basis of the Indemnified Party's request from
indemnification under this Agreement.
Within thirty (30) days after receipt of any Claim Notice or such
lesser period as may be required in order to comply with any
applicable law or to respond to any complaint or pleading (the
"Election Period"), the Indemnifying Party will notify the Indemnified
Party whether the Indemnifying Party disputes its potential liability
to the Indemnified Party under this Agreement with respect to such
Third-Party Claim and whether the Indemnifying Party desires, at the
sole cost and expense of the Indemnifying Party, to defend the
Indemnified Party against such Third-Party Claim.
(ii) If the Indemnifying Party notifies the Indemnified Party
within the Election Period that the Indemnifying Party does not
dispute its potential liability to the Indemnified Party under this
Agreement and that the Indemnifying Party elects to assume the defense
of the Third-Party Claim, then the Indemnifying Party will have the
right to defend, at its sole cost and expense, such Third-Party Claim
by all appropriate proceedings, which proceedings will be prosecuted
diligently by the Indemnifying Party to a final conclusion or settled
at the discretion of the Indemnifying Party in accordance with this
Section 7.3(c). The Indemnifying Party will have full control of such
defense and proceedings, including any compromise or settlement
thereof and the Indemnified Party shall
34
provide its cooperation to the Indemnifying Party; provided, however,
that if an adverse result is likely to, in the Indemnified Party's
reasonable opinion, subject the Indemnified Party to material exposure
to future Adverse Consequences, the Indemnifying Party and the
Indemnified Party (at its own expense) shall jointly control such
defense and proceedings, including any compromise or settlement
thereof. The Indemnified Party is hereby authorized, at the sole cost
and expense of the Indemnifying Party (but only if the Indemnified
Party is actually entitled to indemnification hereunder or if the
Indemnifying Party assumes the defense with respect to the Third-Party
Claim), to file, during the Election Period, any motion, answer or
other pleadings which the Indemnified Party deems necessary or
appropriate to protect its interests or those of the Indemnifying
Party and which are not unnecessarily prejudicial to the Indemnifying
Party. If requested by the Indemnifying Party, the Indemnified Party
will, at the sole cost and expense of the Indemnifying Party,
cooperate with the Indemnifying Party and its counsel in contesting
any Third-Party Claim which the Indemnifying Party elects to contest,
including the making of any related counterclaim against the person
asserting the Third-Party Claim or any cross-complaint against any
person. The Indemnified Party may participate in, but not control
(except as permitted above), any defense or settlement of any Third-
Party Claim controlled by the Indemnifying Party pursuant to this
Section 7.3(c) and, except as permitted above, will bear its own costs
and expenses with respect to such participation. Notwithstanding
anything in this Section 7.3(c) to the contrary, the Indemnifying
Party will not, without the written consent of the Indemnified Party
(which consent will not be unreasonably withheld or delayed), settle
or compromise any action, suit or proceeding or consent to the entry
of any judgment if such settlement or compromise is likely to, in the
Indemnified Party's reasonable opinion, subject the Indemnified Party
to material exposure to future Adverse Consequences.
(iii) If the Indemnifying Party fails to notify the Indemnified
Party within the Election Period that the Indemnifying Party elects to
defend the Indemnified Party, or if the Indemnifying Party elects to
defend the Indemnified Party but fails to diligently and promptly
defend or settle the Third-Party Claim, then the Indemnified Party
will have the right to defend, at the sole cost and expense of the
Indemnifying Party, the Third-Party Claim by all appropriate
proceedings, which proceedings will be promptly and vigorously
prosecuted by the Indemnified Party to a final conclusion or settled.
The Indemnified Party will have full control of such defense and
proceedings; provided, however, that the Indemnified Party may not,
without the Indemnifying Party's consent (which consent will not be
unreasonably withheld or delayed), settle or compromise any action,
suit or proceeding or consent to the entry of any judgment
Notwithstanding the foregoing, if the Indemnifying Party has delivered
a written notice to the Indemnified Party to the effect that the
Indemnifying Party disputes its potential liability to the Indemnified
Party under this Agreement and if such dispute is resolved in favor of
the Indemnifying Party pursuant to the procedures set forth herein,
the Indemnifying Party will not be required to bear the costs and
35
expenses of the Indemnified Party's defense pursuant to this Section
7.3(c) or of the Indemnifying Party's participation therein at the
Indemnified Party's request and the Indemnified Party will reimburse
the Indemnifying Party in full for all costs and expenses of such
litigation. The Indemnifying Party may participate in, but not
control, any defense or settlement controlled by the Indemnified Party
pursuant to this Section 7.3(c), and the Indemnifying Party will bear
its own costs and expenses with respect to such participation.
(iv) If, from time to time, an Indemnified Party should have any
claim against an Indemnifying Party hereunder which does not involve a
Third-Party Claim, or should have knowledge of facts which could give
rise to such a claim, the Indemnified Party will transmit to the
Indemnifying Party a written notice (the "Indemnity Notice")
describing in reasonable detail the nature of the claim, an estimate
of the amount of Adverse Consequences attributable to such claim and
the basis of the Indemnified Party's request for indemnification under
this Agreement. If the Indemnifying Party does not notify the
Indemnified Party within thirty (30) days from its receipt of the
Indemnity Notice that the Indemnifying Party disputes such claim, the
claim specified by the Indemnified Party in the Indemnity Notice will
be deemed a liability of the Indemnifying Party hereunder.
(v) Except as specified below, payments of all amounts owing by
the Indemnifying Party pursuant to this Agreement will be made within
ten (10) days after the latest of (A) the effective date of the
settlement of the Third-Party Claim, (B) the date an adjudication of
such Third-Party Claim becomes final and nonappealable or (C) the date
a final decision regarding the Indemnifying Party's liability to the
Indemnified Party under this Agreement is rendered. Payments of all
amounts owing by the Indemnifying Party pursuant to Section 7.3(c)(iv)
will be made within ten (10) days after the later of(1) the expiration
of the thirty (30) day Indemnity Notice period or (2) the date a final
decision on the Indemnifying Party's liability to the Indemnified
Party under this Agreement is rendered pursuant to the procedures set
forth herein.
(d) Adjustment to Purchase Price. All indemnification payments
----------------------------
under this Section 7.3 shall be deemed to be adjustments to the Purchase
Price.
(e) Exclusive Remedy. This Section 7.3 sets forth the exclusive
----------------
post-Closing remedy of the parties hereto in respect of matters covered by
this Section 7.3, except as otherwise expressly contemplated by this
Agreement, including Section 4.14.
7.4 Waiver. Prior to the Closing, any provision of this Agreement may
------
be (a) waived by the party benefitted by the provision or by both parties or (b)
if approved by their respective boards of directors amended or modified at any
time (including the structure of the transaction) by an agreement in writing
between the parties hereto.
36
7.5 Counterparts. This Agreement may be executed in counterparts each
------------
of which shall be deemed to constitute an original, but all of which together
shall constitute one and the same instrument.
7.6 Governing Law. This Agreement shall be governed by, and interpreted
-------------
in accordance with, the laws of the State of California however, not to the
exclusion of any applicable Federal law), without regard to California statutes
or judicial decisions regarding choice of law questions. The prevailing party
shall be entitled to recover all reasonable costs and expenses, including
attorneys' fees, incurred in connection with such suit.
7.7 Expenses. Each party hereto will bear all expenses incurred by it
--------
in connection with this Agreement and the transactions contemplated hereby.
7.8 Notices. All notices, requests, acknowledgments and other
-------
communications hereunder to a party shall be in writing and shall be deemed to
have been duly given when delivered by hand, facsimile or registered mail (upon
receipt) to such party at its address set forth below or to such other address
as such party may specify by notice to the other party hereto. If to Seller,
to:
Standard Pacific Corp.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇.
▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
with a copy to:
▇▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇, Esq.
If to American General, to:
American General Finance, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇ ▇▇▇▇▇▇▇▇▇, General Counsel
37
with a copy to:
▇▇▇▇▇▇ & ▇▇▇▇▇▇ L.L.P.
2300 First City Tower
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
7.9 Entire Agreement. This Agreement represents the entire
----------------
understanding of the parties hereto with respect to the transactions
contemplated hereby and supersedes any and all other oral or written agreements
heretofore made. Nothing in this Agreement is intended to confer upon any other
person any fights or remedies of any nature whatsoever under or by reason of
this Agreement.
7.10 Binding Effect; Assignment. This Agreement shall be binding upon
--------------------------
and shall inure to the benefit of the parties hereto and their respective
successors and assigns; provided however, this Agreement may not be assigned by
any party hereto without the written consent of the other parties.
7.11 Severability. If any provision of this Agreement or the
------------
application of any such provision to any person or circumstance shall be held
invalid, illegal or unenforceable in any respect by a court of competent
jurisdiction, such invalidity, illegality or unenforceability shall not affect
any other provision hereof
7.12 No Third Party Beneficiaries. This Agreement is made solely for
----------------------------
the benefit of the parties to this Agreement and their respective successors and
permitted assigns, and no other person or entity shall have or acquire any right
by virtue of this Agreement.
38
IN WITNESS WHEREOF, the undersigned have duly executed this Agreement as of
the date first above written.
AMERICAN GENERAL FINANCE, INC.
By:
---------------------------------------------
Name: ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Title: President and Chief Executive Officer
STANDARD PACIFIC CORP.
By:
---------------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Chairman and Chief Executive Officer
39
AMENDMENT TO STOCK PURCHASE AGREEMENT
THIS AMENDMENT TO STOCK PURCHASE AGREEMENT, dated as of the 31st day of
March, 1999 (this "Amendment") is entered into by and between AMERICAN GENERAL
FINANCE, INC., an Indiana corporation ("American General"), and STANDARD PACIFIC
CORP., a Delaware corporation ("Seller")
WHEREAS, Seller and American General have entered into that certain Stock
Purchase Agreement, dated as of August 26, 1998, whereby Seller agreed to sell
and American General agreed to purchase all the issued and outstanding stock of
Standard Pacific Savings, F.A.; and
WHEREAS, American General has heretofore extended the Closing Date to March
31, 1999 by the payment of $200,000 to Seller pursuant to the Section 6.1(d);
and
WHEREAS, American General desires to extend the Closing Date and additional
ninety-one days to June 30, 1999 by the payment of an additional $200,000 to
Seller.
NOW, THEREFORE, for and in consideration of the foregoing recitals and for
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties agree as follows:
1. All capitalized terms in this Amendment shall have the meanings
indicated in the Agreement unless otherwise provided herein.
2. Section 1.2 of the Agreement is deleted in its entirety and replaced
with the following:
Section 1.2 Closing. The respective deliveries of consideration,
-------
stock certificates and other documents, and the taking of all other
remaining actions necessary to complete the purchase and sale transactions
provided for in this Agreement (the "Closing"), shall take place on the
earlier to occur of (a) December 31, 1998 (or, if such date is extended by
American General pursuant to Section 6.1(d) of the Agreement, March 31,
1999, or, if such date is further extended by American Genera1 pursuant to
Section 6.1(e) of the Agreement, June 30, 1999)), and (b) the month end
following the receipt of any required regulatory approvals and the
expiration of any applicable waiting periods or, if such receipt or
expiration shall have occurred within five (5) business days of the end of
such month, then on the following month end, or on such other date as
American General and Seller may agree (the "Closing Date"). The Closing
shall be held at the headquarters of American General or at such other
place as the parties hereto shall agree. All deliveries of documents,
payment of consideration and other actions necessary in connection with or
to complete the Closing shall be deemed to be taken and effected
simultaneously as part of one single transaction,
Amendment to Stock Purchase Agreement Page 1
-------------------------------------
and none of the foregoing shall be deemed completed unless and until all
are completed.
3. A new Subsection (e) of Section 6.1 of the Agreement is added as
follows:
(e) if American General has extended the Closing Date to March 31,
1999 pursuant to Section 6.1(d), by American General or Seller in the event
that the Acquisition is not consummated by March 31, 1999, unless the
failure to so consummate by such tune is due to the breach of any
representations, warranty or covenant contained in this Agreement by the
party seeking to terminate; provided, however, that American General shall
be entitled to extend such date to June 30, 1999 on or before April 2, 1999
by notice to Seller accompanied by a wire transfer payment of $200,000 (the
"Extension Fee", which shall not be a credit to the Purchase Price);
provided however, that if the Closing shall occur before June 30, 1999,
Seller shall rebate a portion of the Extension Fee by paying American
General an amount equal to the product of: (i) $200,000 and (ii) the
fraction, wherein the numerator is the number of days remaining after the
Closing and to and including June 30, 1999 and the denominator is 91.
4. Section 6.2 of the Agreement is deleted and replaced in its entirety
with the following:
Section 6.2 Effect of Termination. In the event of the termination
---------------------
of this Agreement by either American General or Seller, as provided above,
this Agreement shall thereafter become void and there shall be no liability
on the part of any party hereto or their respective officers or directors,
except that any such termination shall be without prejudice to the rights
of any party hereto arising out of the willful breach by any party of any
covenant or willful misrepresentation contained in this Agreement;
provided: however, that if the Acquisition does not occur on or before
-------- -------
December 31, 1998 (or, if such date is extended by American General
pursuant to Section 6.1(d) hereof, March 31, 1999, or, if such date is
further extended by American General pursuant to Section 6.1(e) hereof,
June 30, 1999) due to American General's failure to consummate the
transactions contemplated hereby other than by reason of a material breach
by Seller of any representation, warranty, covenant or agreement contained
herein (including, but not limited to, a failure by American General to
obtain the required approval, consent or waiver of any governmental
authority required to permit consummation of the Acquisition), then
American General shall promptly pay Seller the sum of $200,000 by wire
transfer in immediately available funds.
5. Counterparts. This Amendment may be executed in counterparts each of
------------
which shall be deemed to constitute an original, but all of which together shall
constitute one and the same instrument.
Amendment to Stock Purchase Agreement 2
-------------------------------------
IN WITNESS WHEREOF, the undersigned have duly executed this Agreement as of
the date first above written.
AMERICAN GENERAL FINANCE, INC.
By:
---------------------------------------------
Name: ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Title: President & Chief Executive Officer
STANDARD PACIFIC CORP.
By:
---------------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Chairman & Chief Executive Officer
Amendment to Stock Purchase Agreement
-------------------------------------
3