THE TRANSFER OF THIS AGREEMENT IS
SUBJECT TO CERTAIN PROVISIONS CONTAINED
HEREIN AND MAY BE SUBJECT TO TRANSFER
RESTRICTIONS UNDER
FEDERAL AND STATE LAW
STOCK OPTION AGREEMENT
-------------------------------------
STOCK OPTION AGREEMENT, dated as of November 13, 2001 (this
"Agreement"), by and between Atlantic Bank of New York, a New York State
chartered commercial bank ("Grantee"), and Yonkers Financial Corporation, a
Delaware corporation ("Issuer").
RECITALS
A. THE PLAN. Grantee and Issuer have entered into an Agreement and
Plan of Merger, dated as of November 13, 2001 (the "Plan"), which Plan has been
executed by the parties hereto prior to this Agreement.
B. CONDITION TO THE PLAN. As a condition and an inducement to
Grantee's execution and delivery of the Plan, Issuer has agreed to grant Grantee
the Option (as hereinafter defined).
NOW, THEREFORE, in consideration of the foregoing and the respective
representations, warranties, covenants and agreements set forth herein and in
the Plan, and intending to be legally bound hereby, Issuer and Grantee agree as
follows:
1. DEFINED TERMS. Capitalized terms which are used but not defined
herein shall have the meanings ascribed to such terms in the Plan.
2. GRANT OF OPTION. Subject to the terms and conditions set forth
herein, Issuer hereby grants to Grantee an unconditional, irrevocable option
(the "Option") to purchase up to 443,519 shares of common stock, par value $0.01
per share ("Issuer Common Stock"), of Issuer (as adjusted as set forth herein,
the "Option Shares," which shall include the Option Shares before and after any
transfer of such Option Shares, but in no event shall the number of Option
Shares for which this Option is exercised exceed 19.9% of the issued and
outstanding shares of Issuer Common Stock), at a purchase price per Option Share
(as adjusted as set forth herein, the "Purchase Price") equal to $24.45.
3. EXERCISE OF OPTION.
(a) Provided that (i) Grantee or Holder (as hereinafter defined), as
applicable, shall not be in material breach of any representation, warranty,
covenant or agreement contained in this Agreement or the Plan, and (ii) no
preliminary or permanent injunction or other order against the delivery of
Option Shares issued by any court of competent jurisdiction in the United States
shall be in effect, Holder may exercise the Option, in whole or in part, at any
time and from time to time, following the occurrence of a Purchase Event (as
hereinafter defined) which occurs prior to the occurrence of an Exercise
Termination Event (as hereinafter defined); provided, that Holder shall have
sent written notice of such exercise (as provided in subsection (e) of this
Section 3) within six (6) months after the later to occur of (i) the occurrence
of a Purchase Event or (ii) notice by Issuer to Grantee of a Purchase Event. The
Option shall terminate and be of no further force or effect upon the earliest to
occur of the following (each an "Exercise Termination Event"): (A) the Effective
Time, (B) termination of the Plan in accordance with the terms thereof prior to
the occurrence of a Purchase Event or a Preliminary Purchase Event other than a
termination thereof by Grantee pursuant to Section 6.01(b)(ii) of the Plan (a
termination of the Plan by Grantee pursuant to such Section of the Plan, being
referred to herein as a "Default Termination"), (C) 15 months after a Default
Termination, or (D) 15 months after termination of the Plan (other than a
Default Termination) following the occurrence of a Purchase Event or a
Preliminary Purchase Event; provided, however, that any purchase of the Option
Shares shall be subject to compliance with applicable law; provided further,
however, that if the Option cannot be exercised on any day because of an
injunction, order or similar restraint issued by a court of competent
jurisdiction, the period during which the Option may be exercised shall be
extended so that the Option shall expire no earlier than the tenth business day
after such injunction, order or restraint shall have been dissolved or when such
injunction, order or restraint shall have become permanent and no longer subject
to appeal, as the case may be. The term "Holder" shall mean the holder or
holders of the Option from time to time, and which initially is Grantee. The
rights set forth in Sections 8 and 9 of this Agreement shall terminate when the
right to exercise the Option and Substitute Option (as hereinafter defined)
terminate (other than as a result of a complete exercise of the Option or
Substitute Option) as set forth herein.
(b) As used herein, a "Purchase Event" means any of the following
events occurring after the date hereof:
(i) without Grantee's prior written consent, Issuer shall
have authorized, recommended, publicly proposed or publicly announced
an intention to authorize, recommend or propose, or Issuer shall have
entered into an agreement with any person (other than Grantee or any
subsidiary of Grantee) to effect (A) a merger, consolidation or
similar transaction involving Issuer or any of its significant
subsidiaries, (B) the disposition, by sale, lease, exchange or
otherwise, of assets or deposits of Issuer or any of its significant
subsidiaries representing in either case 25% or more of the
consolidated assets or deposits of Issuer and its subsidiaries or (C)
the issuance, sale or other disposition by Issuer of (including by way
of merger, consolidation, share exchange or any similar transaction)
securities representing 25% or more of the voting power of Issuer or
any of its significant subsidiaries (each of (A), (B) or (C), an
"Acquisition Transaction"); provided, however, that in no event shall
any merger, consolidation, purchase or similar transaction involving
only
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Issuer and one or more of its subsidiaries, or involving only any two
or more of such subsidiaries be deemed to be an Acquisition
Transaction, provided that any such transaction is not entered into in
violation of the terms of the Plan; or
(ii) any person (other than Grantee or any subsidiary of
Grantee) shall have acquired beneficial ownership (as such term is
defined in Rule 13d-3 promulgated under the Securities Exchange Act of
1934, as amended (the "Exchange Act")) of, or the right to acquire
beneficial ownership of, or any "group" (as such term is defined in
Section 13(d)(3) of the Exchange Act), other than a group of which
Grantee or any subsidiary of Grantee is a member, shall have been
formed which beneficially owns, or has the right to acquire beneficial
ownership of, 25% or more of the voting power of Issuer or any of its
significant subsidiaries.
(c) As used herein, a "Preliminary Purchase Event" means any of the
following events occurring after the date hereof:
(i) any person (other than Grantee, any subsidiary of Grantee
or any transferee of the Option) shall have commenced (as such term is
defined in Rule 14d-2, promulgated under the Exchange Act) or shall
have filed a registration statement under the Securities Act of 1933,
as amended (the "Securities Act"), with respect to, a tender offer or
exchange offer to purchase any shares of Issuer Common Stock such
that, upon consummation of such offer, such person would own or
control 20% or more of the then outstanding shares of Issuer Common
Stock (such an offer being referred to herein as a "Tender Offer" or
an "Exchange Offer," respectively); or
(ii) the stockholders of Issuer shall not have approved the
Plan by the requisite vote at the meeting of the stockholders of
Issuer called for that purpose ("Issuer Meeting"), the Issuer Meeting
shall not have been held or shall have been canceled prior to
termination of the Plan, or Issuer's Board of Directors shall have
publicly withdrawn or modified in a manner adverse to Grantee the
recommendation of Issuer's Board of Directors with respect to the
Plan, in each case after it shall have been publicly announced that
any person (other than Grantee or any subsidiary of Grantee) shall
have (A) made, or disclosed an intention to make, a bona fide proposal
to engage in an Acquisition Transaction, (B) commenced a Tender Offer
or filed a registration statement under the Securities Act with
respect to an Exchange Offer or (C) filed an application (or given a
notice), whether in draft or final form, under the Home Owners' Loan
Act of 1933, as amended, the Bank Holding Company Act, as amended, the
Bank Merger Act, as amended, or the Change in Bank Control Act of
1978, as amended, for approval to engage in an Acquisition
Transaction; or
(iii) any person (other than Grantee or any subsidiary of
Grantee) shall have made a bona fide proposal to Issuer or its
stockholders by public announcement, or written communication that is
or becomes the subject of public disclosure, to engage in an
Acquisition Transaction; or
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(iv) after a proposal is made by a third party to Issuer or
its stockholders to engage in an Acquisition Transaction, or such
third party states its intention to Issuer to make such a proposal if
the Plan terminates, Issuer shall breach any covenant or agreement
contained in the Plan and such breach would entitle Grantee to
terminate the Plan under Section 6.01(b)(ii) thereof (without regard
to the cure period provided for therein unless such cure is promptly
effected without jeopardizing consummation of the transactions
contemplated in the Plan).
As used in this Agreement, the term "person" shall have the meaning
specified in Sections 3(a)(9) and 13(d)(3) of the Exchange Act.
(d) Issuer shall notify Grantee promptly in writing of the occurrence
of any Preliminary Purchase Event or Purchase Event of which it has knowledge,
it being understood that the giving of such notice by Issuer shall not be a
condition to the right of Holder to exercise the Option.
(e) In the event Holder wishes to exercise the Option (in whole or in
part), it shall send to Issuer a written notice (the "Option Exercise Notice,"
the date of which being herein referred to as the "Notice Date") specifying (i)
the total number of Option Shares it intends to purchase pursuant to such
exercise and (ii) a place and date not earlier than three business days nor
later than 15 business days from the Notice Date for the closing (the "Closing")
of such purchase (such date as it may be extended pursuant to the next sentence,
the "Closing Date"). If prior notification to or approval of any federal or
state regulatory authority having jurisdiction over insured depositary
institutions or their holding companies, the Securities and Exchange Commission
(the "SEC"), the NASD or any other self-regulatory organization (each, a
"Regulatory Authority") is required in connection with any such purchase, Issuer
shall cooperate with Holder in the filing of the required notice or application
for approval and the obtaining of such approval, and, in the event that such
regulatory approvals must be obtained or mandatory waiting periods must expire
prior to Closing, the Closing shall occur promptly following receipt of any such
required regulatory approvals and the expiration of any such mandatory waiting
periods. Any exercise of the Option shall be deemed to occur on the Notice Date
relating thereto.
4. PAYMENT AND DELIVERY OF CERTIFICATES.
(a) On each Closing Date, Holder shall (i) pay to Issuer, in
immediately available funds by wire transfer to a bank account designated by
Issuer, an amount equal to the Purchase Price multiplied by the number of Option
Shares to be purchased on such Closing Date and (ii) present and surrender this
Agreement to Issuer at the address of Issuer specified in Section 14(f) of this
Agreement; provided that failure or refusal of Issuer to designate a bank
account shall not preclude Holder from exercising the Option.
(b) At each Closing, simultaneously with the delivery of immediately
available funds and surrender of this Agreement as provided in Section 4(a) of
this Agreement, (i) Issuer shall deliver to Holder (A) a certificate or
certificates representing the Option Shares to be purchased at such Closing,
which Option Shares shall be free and clear of all Liens (as defined in the
Plan) and subject to no preemptive rights, and (B) if the Option is exercised in
part only, an executed new agreement
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with the same terms as this Agreement evidencing the right to purchase the
balance of the shares of Issuer Common Stock purchasable hereunder, and (ii)
Holder shall deliver to Issuer a letter agreeing that Holder shall not offer to
sell or otherwise dispose of such Option Shares in violation of applicable
federal and state law or of the provisions of this Agreement.
(c) In addition to any other legend that is required by applicable
law, certificates for the Option Shares delivered at each Closing shall be
endorsed with a restrictive legend which shall read substantially as follows:
THE TRANSFER OF THE STOCK REPRESENTED BY THIS CERTIFICATE IS SUBJECT TO
RESTRICTIONS ARISING UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND PURSUANT
TO THE TERMS OF A STOCK OPTION AGREEMENT DATED AS OF NOVEMBER 13, 2001. A COPY
OF SUCH AGREEMENT WILL BE PROVIDED TO THE HOLDER HEREOF WITHOUT CHARGE UPON
RECEIPT BY THE ISSUER OF A WRITTEN REQUEST THEREFOR.
It is understood and agreed that the portion of the above legend relating to the
Securities Act shall be removed by delivery of substitute certificate(s) without
such legend if Holder shall have delivered to Issuer a copy of a letter from the
staff of the SEC, or an opinion of counsel in form and substance reasonably
satisfactory to Issuer and its counsel, to the effect that such legend is not
required for purposes of the Securities Act.
(d) Upon the giving by Holder to Issuer of the Option Exercise Notice,
the tender of the applicable purchase price in immediately available funds and
the tender of this Agreement to Issuer, Holder shall be deemed to be the holder
of record of the shares of Issuer Common Stock issuable upon such exercise,
notwithstanding that the stock transfer books of Issuer shall then be closed or
that certificates representing such shares of Issuer Common Stock shall not then
be actually delivered to Holder. Issuer shall pay all expenses, and any and all
United States federal, state and local taxes and other charges that may be
payable in connection with the preparation, issuance and delivery of stock
certificates under this Section 4 in the name of Holder or its assignee,
transferee or designee.
(e) Issuer agrees (i) that it shall at all times maintain, free from
preemptive rights, sufficient authorized but unissued or treasury shares of
Issuer Common Stock so that the Option may be exercised without additional
authorization of Issuer Common Stock after giving effect to all other options,
warrants, convertible securities and other rights to purchase Issuer Common
Stock, (ii) that it will not, by charter amendment or through reorganization,
consolidation, merger, dissolution or sale of assets, or by any other voluntary
act, avoid or seek to avoid the observance or performance of any of the
covenants, stipulations or conditions to be observed or performed hereunder by
Issuer, (iii) promptly to take all action as may from time to time be required
(including (A) complying with all premerger notification, reporting and waiting
period requirements and (B) in the event, under any applicable federal or state
banking law, prior approval of or notice to any Regulatory Authority is
necessary before the Option may be exercised, cooperating fully with Holder in
preparing such applications or notices and providing such information to such
Regulatory Authority as it may require) in order to permit Holder to exercise
the Option and Issuer to duly and effectively issue
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shares of Issuer Common Stock pursuant hereto, and (iv) promptly to take all
action provided herein to protect the rights of Holder against dilution.
5. REPRESENTATIONS AND WARRANTIES OF ISSUER. Issuer hereby
represents and warrants to Grantee (and Holder, if different than Grantee) as
follows:
(a) CORPORATE AUTHORITY. Issuer has full corporate power and authority
to execute and deliver this Agreement and to consummate the transactions
contemplated hereby; the execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby have been duly and validly
authorized by the Board of Directors of Issuer, and no other corporate
proceedings on the part of Issuer are necessary to authorize this Agreement or
to consummate the transactions so contemplated. This Agreement has been duly and
validly executed and delivered by Issuer.
(b) BENEFICIAL OWNERSHIP. To the best knowledge of Issuer, as of the
date of this Agreement, no person or group, except ▇▇▇▇▇ Investors, L.P. and
members of the group identified in the Schedule 13D, as amended, dated December
13, 2000, filed by ▇▇▇▇▇ Investors, L.P. with the Securities and Exchange
Commission (the "SEC") and the Yonkers Financial Corporation Employee Stock
Ownership Plan, has beneficial ownership of more than 10% of the issued and
outstanding shares of Issuer Common Stock.
(c) SHARES RESERVED FOR ISSUANCE; CAPITAL STOCK. Issuer has taken all
necessary corporate action to authorize and reserve and permit it to issue, and
at all times from the date hereof through the termination of this Agreement in
accordance with its terms, will have reserved for issuance upon the exercise of
the Option, that number of shares of Issuer Common Stock equal to the maximum
number of Option Shares at any time, and from time to time, purchasable upon
exercise of the Option, and all such Option Shares, upon issuance pursuant to
the Option, will be duly authorized, validly issued, fully paid and
nonassessable, and will be delivered free and clear of all claims, liens,
encumbrances and security interests (other than those created by this Agreement)
and not subject to any preemptive rights.
(d) NO VIOLATIONS. The execution, delivery and performance of this
Agreement does not and will not, and the consummation by Issuer of any of the
transactions contemplated hereby will not, constitute or result in (i) a breach
or violation of, or a default under, its certificate of incorporation or bylaws,
or the comparable governing instruments of any of its subsidiaries, or (ii) a
breach or violation of, or a default under, any agreement, lease, contract,
note, mortgage, indenture, arrangement or other obligation of it or any of its
subsidiaries (with or without the giving of notice, the lapse of time or both)
or under any law, rule, ordinance, regulation, judgment, decree, order, award or
governmental or non-governmental permit or license to which it or any of its
subsidiaries is subject, that would, in the case of (ii), give any other person
the ability to prevent or enjoin Issuer's performance under this Agreement.
6. REPRESENTATIONS AND WARRANTIES OF GRANTEE.
(a) Grantee hereby represents and warrants to Issuer that Grantee has
full corporate power and authority to enter into this Agreement and, subject to
obtaining the approvals referred to in this
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Agreement, to consummate the transactions contemplated by this Agreement; the
execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby have been duly authorized by all necessary
corporate action on the part of Grantee; and this Agreement has been duly
executed and delivered by Grantee.
(b) The Option is being acquired for investment and is not being, and
any shares of Issuer Common Stock or other securities acquired by Grantee upon
exercise of the Option are being acquired for investment and will not be,
acquired with a view to the public distribution thereof and will not be
transferred or otherwise disposed of except in a transaction registered, or
exempt from registration, under the Securities Act.
7. ADJUSTMENT UPON CHANGES IN ISSUER CAPITALIZATION, ETC.
(a) In the event of any change in Issuer Common Stock by reason of a
stock dividend, stock split, split-up, recapitalization, combination,
conversion, subdivision, exchange of shares or similar transaction, the type and
number of shares or securities subject to the Option, and the Purchase Price
therefor, shall be adjusted appropriately, and proper provision shall be made in
the agreement or instrument governing any such transaction so that Holder shall
receive, upon exercise of the Option, the number and class of shares or other
securities or property that Holder would have received in respect of Issuer
Common Stock if the Option had been exercised immediately prior to such event,
or the record date therefor, as applicable. If any additional shares of Issuer
Common Stock are issued after the date of this Agreement (other than pursuant to
an event described in the first sentence of this Section 7(a), upon exercise of
any option to purchase Issuer Common Stock outstanding on the date hereof or
upon conversion into Issuer Common Stock of any convertible security of Issuer
outstanding on the date hereof), the number of shares of Issuer Common Stock
subject to the Option shall be adjusted so that, after such issuance, exercise
or conversion, the Option, together with any shares of Issuer Common Stock
previously issued pursuant hereto, equals 19.9% of the number of shares of
Issuer Common Stock then issued and outstanding, without giving effect to any
shares subject to or issued pursuant to the Option. No provision of this Section
7 shall be deemed to affect or change, or constitute authorization for any
violation of, any of the covenants or representations in the Plan.
(b) In the event that Issuer shall enter into an agreement (i) to
consolidate with or merge into any person, other than Grantee or one of its
subsidiaries, and Issuer shall not be the continuing or surviving corporation of
such consolidation or merger, (ii) to permit any person, other than Grantee or
one of its subsidiaries, to merge into Issuer and Issuer shall be the continuing
or surviving corporation, but, in connection with such merger, the then
outstanding shares of Issuer Common Stock shall be changed into or exchanged for
stock or other securities of Issuer or any other person or cash or any other
property, or the outstanding shares of Issuer Common Stock immediately prior to
such merger shall, after such merger, represent less than 50% of the outstanding
shares and share equivalents of the merged company, or (iii) to sell or
otherwise transfer all or substantially all of its assets or deposits to any
person, other than Grantee or one of its subsidiaries, then, and in each such
case, the agreement governing such transaction shall make proper provisions so
that the Option shall, upon the consummation of any such transaction and upon
the terms and conditions set forth herein, be converted into, or exchanged for,
an option (the "Substitute Option"), at the election of Holder,
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to purchase shares of either (A) the Acquiring Corporation (as hereinafter
defined), (B) any person that controls the Acquiring Corporation or (C) in the
case of a merger described in clause (ii), Issuer (such person being referred to
as "Substitute Option Issuer").
(c) The Substitute Option shall have the same terms as the Option;
provided, that, if the terms of the Substitute Option cannot, for legal reasons,
be the same as the Option, such terms shall be as similar as possible and in no
event less advantageous to Holder. Substitute Option Issuer shall also enter
into an agreement with Holder in substantially the same form as this Agreement,
which shall be applicable to the Substitute Option.
(d) The Substitute Option shall be exercisable for such number of
shares of Substitute Common Stock (as hereinafter defined) as is equal to the
Assigned Value (as hereinafter defined) multiplied by the number of shares of
Issuer Common Stock for which the Option was theretofore exercisable, divided by
the Average Price (as hereinafter defined). The exercise price of the Substitute
Option per share of Substitute Common Stock (the "Substitute Option Price")
shall be equal to the Purchase Price multiplied by a fraction in which the
numerator is the number of shares of Issuer Common Stock for which the Option
was theretofore exercisable and the denominator is the number of shares of the
Substitute Common Stock for which the Substitute Option is exercisable.
(e) The following terms have the meanings indicated:
(i) "Acquiring Corporation" shall mean (A) the continuing or
surviving corporation of a consolidation or merger with Issuer (if
other than Issuer), (B) Issuer in a merger in which Issuer is the
continuing or surviving person or (C) the transferee of all or
substantially all of Issuer's assets (or a substantial part of the
assets of its subsidiaries taken as a whole).
(ii) "Substitute Common Stock" shall mean the shares of
capital stock (or similar equity interest) with the greatest voting
power in respect of the election of directors (or persons similarly
responsible for the direction of the business and affairs) of the
Substitute Option Issuer.
(iii) "Assigned Value" shall mean the highest of (A) the
price per share of Issuer Common Stock at which a Tender Offer or an
Exchange Offer therefor has been made, (B) the price per share of
Issuer Common Stock to be paid by any third party pursuant to an
agreement with Issuer, (C) the highest closing price for shares of
Issuer Common Stock within the 60-day period immediately preceding the
consolidation, merger or sale in question and (D) in the event of a
sale of all or substantially all of Issuer's assets or deposits, an
amount equal to (x) the sum of the price paid in such sale for such
assets (and/or deposits) and the current market value of the remaining
assets of Issuer, as determined by a nationally recognized investment
banking firm selected by Holder, divided by (y) the number of shares
of Issuer Common Stock outstanding at such time. In the event that a
Tender Offer or an Exchange Offer is made for Issuer Common Stock or
an agreement is entered into for a merger or consolidation involving
consideration other than cash, the value of the securities
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or other property issuable or deliverable in exchange for Issuer
Common Stock shall be determined by a nationally recognized investment
banking firm selected by Holder.
(iv) "Average Price" shall mean the average closing price of
a share of Substitute Common Stock for the one year period immediately
preceding the consolidation, merger or sale in question, but in no
event higher than the closing price of the shares of Substitute Common
Stock on the day preceding such consolidation, merger or sale;
provided, that, if Issuer is the issuer of the Substitute Option, the
Average Price shall be computed with respect to a share of common
stock issued by Issuer, the person merging into Issuer or by any
company which controls such person, as Holder may elect.
(f) In no event, pursuant to any of the foregoing paragraphs, shall
the number of shares of Substitute Common Stock for which the Substitute Option
is exercisable exceed 19.9% of the issued and outstanding shares of Substitute
Common Stock immediately prior to exercise of the Substitute Option. In the
event that the Substitute Option would be exercisable for more than 19.9% of the
issued and outstanding shares of Substitute Common Stock but for the limitation
in the first sentence of this Section 7(f), Substitute Option Issuer shall make
a cash payment to Holder equal to the excess of (i) the value of the Substitute
Option without giving effect to the limitation in the first sentence of this
Section 7(f) over (ii) the value of the Substitute Option after giving effect to
the limitation in the first sentence of this Section 7(f). This difference in
value shall be determined by a nationally recognized investment banking firm
selected by Holder.
(g) Issuer shall not enter into any transaction described in Section
7(b) of this Agreement unless the Acquiring Corporation and any person that
controls the Acquiring Corporation assume in writing all the obligations of
Issuer hereunder and take all other actions that may be necessary so that the
provisions of this Section 7 are given full force and effect (including, without
limitation, any action that may be necessary so that the holders of the other
shares of common stock issued by Substitute Option Issuer are not entitled to
exercise any rights by reason of the issuance or exercise of the Substitute
Option and the shares of Substitute Common Stock do not have lesser economic
value (other than any diminution in value resulting from the fact that the
shares of Substitute Common Stock may be restricted securities, as defined in
Rule 144, promulgated under the Securities Act ("Rule 144"), or any successor
provision) than other shares of common stock issued by Substitute Option
Issuer).
8. REPURCHASE AT THE OPTION OF HOLDER.
(a) Subject to the last sentence of Section 3(a) of this Agreement, at
the request of Holder at any time commencing upon the first occurrence of a
Repurchase Event (as defined in Section 8(d) hereof) and ending 12 months
immediately thereafter, Issuer shall repurchase from Holder (i) the Option and
(ii) all shares of Issuer Common Stock purchased by Holder pursuant hereto with
respect to which Holder then has beneficial ownership. The date on which Holder
exercises its rights under this Section 8 is referred to as the "Section 8
Request Date." Such repurchase shall be at an aggregate price (the "Section 8
Repurchase Consideration") equal to the sum of:
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(i) the aggregate Purchase Price paid by Holder for any
shares of Issuer Common Stock acquired pursuant to the Option with
respect to which Holder then has beneficial ownership;
(ii) the excess, if any, of (A) the Applicable Price (as
defined below) for each share of Issuer Common Stock over (B) the
Purchase Price (subject to adjustment pursuant to Section 7 of this
Agreement), multiplied by the number of shares of Issuer Common Stock
with respect to which the Option has not been exercised; and
(iii) the excess, if any, of the Applicable Price over the
Purchase Price (subject to adjustment pursuant to Section 7 of this
Agreement) paid (or, in the case of Option Shares with respect to
which the Option has been exercised but the Closing Date has not
occurred, payable) by Holder for each share of Issuer Common Stock
with respect to which the Option has been exercised and with respect
to which Holder then has beneficial ownership, multiplied by the
number of such shares.
(b) If Holder exercises its rights under this Section 8, Issuer shall,
within 10 business days after the Section 8 Request Date, pay the Section 8
Repurchase Consideration to Holder in immediately available funds, and
contemporaneously with such payment, Holder shall surrender to Issuer the Option
and the certificates evidencing the Option Shares purchased thereunder with
respect to which Holder then has beneficial ownership, and Holder shall warrant
that it has sole record and beneficial ownership of such shares and that the
same are then free and clear of all Liens. Notwithstanding the foregoing, to the
extent that prior notification to or approval of any Regulatory Authority is or
becomes required for any reason in connection with the payment of all or any
portion of the Section 8 Repurchase Consideration, Holder shall have the ongoing
option to revoke its request for repurchase pursuant to this Section 8, in whole
or in part, or to require that Issuer deliver from time to time that portion of
the Section 8 Repurchase Consideration that it is not then so prohibited from
paying and promptly file the required notice or application for approval and
expeditiously process the same (and each party shall cooperate with the other in
the filing of any such notice or application and the obtaining of any such
approval). If any Regulatory Authority disapproves of any part of Issuer's
proposed repurchase pursuant to this Section 8, Issuer shall promptly give
notice of such fact to Holder, and Holder shall have the right (i) to revoke the
repurchase request or (ii) to the extent permitted by such Regulatory Authority,
determine whether the repurchase should apply to the Option and/or Option Shares
and to what extent to each, and Holder shall thereupon have the right to
exercise the Option as to the number of Option Shares for which the Option was
exercisable at the Section 8 Request Date less the number of shares covered by
the Option in respect of which payment has been made pursuant to Section
8(a)(ii) of this Agreement. Holder shall notify Issuer of its determination
under the preceding sentence within five business days of receipt of notice of
disapproval of the repurchase. Notwithstanding anything herein to the contrary,
in the event that Issuer delivers to Holder written notice accompanied by a
certification of Issuer's independent auditor each stating that a requested
repurchase of Issuer Common Stock would result in the recapture of Issuer's bad
debt reserves under the Internal Revenue Code of 1986, as amended (the "Code"),
Holder's repurchase request shall be deemed to be automatically revoked.
Notwithstanding anything herein to the contrary, all of Holder's rights
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under this Section 8 shall terminate on the date of termination of this Option
pursuant to Section 3(a) of this Agreement.
(c) For purposes of this Agreement, the "Applicable Price" means the
highest of (i) the highest price per share of Issuer Common Stock paid for any
such share by the person or groups described in Section 8(d)(i) hereof, (ii) the
price per share of Issuer Common Stock received by holders of Issuer Common
Stock in connection with any merger, sale or other business combination
transaction described in Section 7(b)(i), 7(b)(ii) or 7(b)(iii) of this
Agreement, or (iii) the highest closing sales price per share of Issuer Common
Stock quoted on The Nasdaq Stock Market ("Nasdaq") (or if Issuer Common Stock is
not quoted on Nasdaq, the highest bid price per share as quoted on the principal
trading market or securities exchange on which such shares are traded as
reported by a recognized source chosen by Holder) during the 40 business days
preceding the Section 8 Request Date; provided, however that in the event of a
sale of less than all of Issuer's assets, the Applicable Price shall be the sum
of the price paid in such sale for such assets and the current market value of
the remaining assets of Issuer as determined by a nationally recognized
investment banking firm selected by Holder, divided by the number of shares of
the Issuer Common Stock outstanding at the time of such sale; provided further,
that in no event shall the Applicable Price be greater than the Market Price (as
defined in, and determined at the time specified in, Article Tenth, Section B of
Issuer's certificate of incorporation). If the consideration to be offered, paid
or received pursuant to either of the foregoing clauses (i) or (ii) shall be
other than in cash, the value of such consideration shall be determined in good
faith by an independent nationally recognized investment banking firm selected
by Holder and reasonably acceptable to Issuer, which determination shall be
conclusive for all purposes of this Agreement.
(d) As used herein, "Repurchase Event" shall occur if (i) any person
(other than Grantee or any subsidiary of Grantee) shall have acquired beneficial
ownership of (as such term is defined in Rule 13d-3 promulgated under the
Exchange Act), or the right to acquire beneficial ownership of, or any "group"
(as such term is defined under the Exchange Act) shall have been formed which
beneficially owns or has the right to acquire beneficial ownership of, 50% or
more of the then outstanding shares of Issuer Common Stock, or (ii) any of the
transactions described in Section 7(b)(i), 7(b)(ii) or 7(b)(iii) of this
Agreement shall be consummated.
9. REPURCHASE OF SUBSTITUTE OPTION.
(a) Subject to the last sentence of Section 3(a) of this
Agreement, at the request of Holder at any time commencing upon the first
occurrence of a Repurchase Event (as defined in Section 8(d) hereof) and ending
12 months immediately thereafter, Substitute Option Issuer (or any successor
entity thereof) shall repurchase from Holder (i) the Substitute Option and (ii)
all shares of Substitute Common Stock purchased by Holder pursuant hereto with
respect to which Holder then has beneficial ownership. The date on which Holder
exercises its rights under this Section 9 is referred to as the "Section 9
Request Date." Such repurchase shall be at an aggregate price (the "Section 9
Repurchase Consideration") equal to the sum of:
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(i) the aggregate Purchase Price paid by Holder for any
shares of Substitute Common Stock acquired pursuant to the Substitute
Option with respect to which Holder then has beneficial ownership;
(ii) the excess, if any, of (A) the Highest Closing Price (as
defined below) for each share of Substitute Common Stock over (B) the
Purchase Price (subject to adjustment pursuant to Section 7 of this
Agreement), multiplied by the number of shares of Substitute Common
Stock with respect to which the Substitute Option has not been
exercised; and
(iii) the excess, if any, of the Highest Closing Price over
the Purchase Price (subject to adjustment pursuant to Section 7 of
this Agreement) paid (or, in the case of Substitute Option Shares with
respect to which the Substitute Option has been exercised but the
Closing Date has not occurred, payable) by Holder for each share of
Substitute Common Stock with respect to which the Substitute Option
has been exercised and with respect to which Holder then has
beneficial ownership, multiplied by the number of such shares.
(b) If Holder exercises its rights under this Section 9, Substitute
Option Issuer shall, within 10 business days after the Section 9 Request Date,
pay the Section 9 Repurchase Consideration to Holder in immediately available
funds, and contemporaneously with such payment, Holder shall surrender to
Substitute Option Issuer the Substitute Option and the certificates evidencing
the shares of Substitute Common Stock purchased thereunder with respect to which
Holder then has beneficial ownership, and Holder shall warrant that it has sole
record and beneficial ownership of such shares and that the same are then free
and clear of all Liens. Notwithstanding the foregoing, to the extent that prior
notification to or approval of any Regulatory Authority is required in
connection with the payment of all or any portion of the Section 9 Repurchase
Consideration, Holder shall have the ongoing option to revoke its request for
repurchase pursuant to this Section 9, in whole or in part, or to require that
Substitute Option Issuer deliver from time to time that portion of the Section 9
Repurchase Consideration that it is not then so prohibited from paying and
promptly file the required notice or application for approval and expeditiously
process the same (and each party shall cooperate with the other in the filing of
any such notice or application and the obtaining of any such approval). If any
Regulatory Authority disapproves of any part of Substitute Option Issuer's
proposed repurchase pursuant to this Section 9, Substitute Option Issuer shall
promptly give notice of such fact to Holder, and Holder shall have the right (i)
to revoke the repurchase request or (ii) to the extent permitted by such
Regulatory Authority, determine whether the repurchase should apply to the
Substitute Option and/or Substitute Option Shares and to what extent to each,
and Holder shall thereupon have the right to exercise the Substitute Option as
to the number of Substitute Option Shares for which the Substitute Option was
exercisable at the Section 9 Request Date less the number of shares covered by
the Substitute Option in respect of which payment has been made pursuant to
Section 9(a)(ii) of this Agreement. Holder shall notify Substitute Option Issuer
of its determination under the preceding sentence within five business days of
receipt of notice of disapproval of the repurchase. Notwithstanding anything
herein to the contrary, in the event that Substitute Option Issuer delivers to
Holder written notice accompanied by a certification of Substitute Option
Issuer's independent auditor each stating that a requested repurchase of Issuer
Common Stock would result in the recapture of Substitute Option Issuer's bad
debt reserves under the Code, Holder's repurchase request shall be deemed to be
automatically revoked.
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Notwithstanding anything herein to the contrary, all of Holder's
rights under this Section 9 shall terminate on the date of termination of this
Substitute Option pursuant to Section 3(a) of this Agreement.
(c) For purposes of this Agreement, the "Highest Closing Price" means
the highest of closing sales price for shares of Substitute Common Stock quoted
on Nasdaq (or if the Substitute Common Stock is not quoted on Nasdaq, on the
principal trading market on which such shares are traded as reported by a
recognized source) during the six-month period preceding the Section 9 Request
Date.
10. REGISTRATION RIGHTS.
(a) DEMAND REGISTRATION RIGHT. Issuer shall, subject to the conditions
of Section 10(c) of this Agreement, if requested by any Holder, including
Grantee and any permitted transferee ("Selling Shareholder"), promptly prepare
and file a registration statement under applicable laws and regulations, if such
registration is necessary in order to permit the sale or other disposition of
any or all shares of Issuer Common Stock or other securities that have been
acquired by or are issuable to the Selling Shareholder upon exercise of the
Option in accordance with the intended method of sale or other disposition
stated by the Selling Shareholder in such request, including without limitation
a "shelf" registration statement under applicable laws and regulations, and
Issuer shall use its best efforts to qualify such shares or other securities for
sale under any applicable state securities laws.
(b) ADDITIONAL REGISTRATION RIGHTS. If Issuer, at any time after the
exercise of the Option, proposes to register any shares of Issuer Common Stock
under applicable laws and regulations in connection with an underwritten public
offering of such Issuer Common Stock, Issuer will promptly give written notice
to the Selling Shareholders of its intention to do so and, upon the written
request of any Selling Shareholder given within 30 days after receipt of any
such notice (which request shall specify the number of shares of Issuer Common
Stock intended to be included in such underwritten public offering by the
Selling Shareholder), Issuer will cause all such shares for which a Selling
Shareholder requests participation in such registration, to be so registered and
included in such underwritten public offering; provided, however, that Issuer
may elect to not cause any such shares to be so registered (i) if the
underwriters in good faith object for valid business reasons, or (ii) in the
case of a registration solely to implement an employee benefit plan or a
registration filed on Form S-4 of the Securities Act or any equivalent or
successor Form. If some, but not all the shares of Issuer Common Stock, with
respect to which Issuer shall have received requests for registration pursuant
to this Section 10(b), shall be excluded from such registration, Issuer shall
make appropriate allocation of shares to be registered among the Selling
Shareholders desiring to register their shares pro rata in the proportion that
the number of shares requested to be registered by each such Selling Shareholder
bears to the total number of shares requested to be registered by all such
Selling Shareholders then desiring to have Issuer Common Stock registered for
sale.
(c) CONDITIONS TO REQUIRED REGISTRATION. Issuer shall use reasonable
best efforts to cause each registration statement referred to in Section 10(a)
of this Agreement to become effective
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and to obtain all consents or waivers of other parties which are required
therefor and to keep such registration statement effective, provided, however,
that Issuer may delay any registration of Option Shares required pursuant to
Section 10(a) of this Agreement for a period not exceeding 90 days provided
Issuer shall in good faith determine that any such registration would adversely
affect an offering or contemplated offering of other securities by Issuer, and
Issuer shall not be required to register Option Shares under the Securities Act
pursuant to Section 10(a) hereof:
(i) prior to a Purchase Event;
(ii) on more than three occasions;
(iii) within 180 days after the effective date of a
registration referred to in Section 10(b) of this Agreement pursuant
to which the Selling Shareholder or Selling Shareholders concerned
were afforded the opportunity to register such shares under the
Securities Act and such shares were registered as requested; and
(iv) unless a request therefor is made to Issuer by Selling
Shareholders that hold at least 25% or more of the aggregate number of
Option Shares (including shares of Issuer Common Stock issuable upon
exercise of the Option) then outstanding.
In addition to the foregoing, Issuer shall not be required to maintain
the effectiveness of any registration statement after the expiration of nine
months from the effective date of such registration statement. Issuer shall use
all reasonable efforts to make any filings, and take all steps, under all
applicable state securities laws to the extent necessary to permit the sale or
other disposition of the Option Shares so registered in accordance with the
intended method of distribution for such shares; provided, however, that Issuer
shall not be required to consent to general jurisdiction or qualify to do
business in any state where it is not otherwise required to so consent to such
jurisdiction or to so qualify to do business.
(d) EXPENSES. Except where applicable state law prohibits such
payments, Issuer shall pay all expenses (including, without limitation,
registration fees, qualification fees, blue sky fees and expenses (including the
fees and expenses of counsel), legal expenses, including the reasonable fees and
expenses of one counsel to the holders whose Option Shares are being registered,
printing expenses and the costs of special audits or "cold comfort" letters,
expenses of underwriters, excluding discounts and commissions directly relating
to the sale of the Option Shares, but including liability insurance if Issuer so
desires or the underwriters so require, and the reasonable fees and expenses of
any necessary special experts) in connection with each registration pursuant to
Section 10(a) or 10(b) of this Agreement (including the related offerings and
sales by holders of Option Shares) and all other qualifications, notifications
or exemptions pursuant to Section 10(a) or 10(b) of this Agreement.
(e) INDEMNIFICATION. In connection with any registration under Section
10(a) or 10(b) of this Agreement, Issuer hereby indemnifies the Selling
Shareholders, and each underwriter thereof, including each person, if any, who
controls such holder or underwriter within the meaning of Section 15 of the
Securities Act, against all expenses, losses, claims, damages and liabilities
caused by any
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untrue, or alleged untrue, statement of a material fact contained in any
registration statement or prospectus (including any amendments or supplements
thereto) or any preliminary prospectus or notification or offering circular, or
caused by any omission, or alleged omission, to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, except insofar as such expenses, losses, claims, damages or
liabilities of such indemnified party are caused by any untrue statement or
alleged untrue statement that was included by Issuer in any such registration
statement or prospectus or notification or offering circular (including any
amendments or supplements thereto) in reliance upon and in conformity with,
information furnished in writing to Issuer by such indemnified party expressly
for use therein, and Issuer and each officer, director and controlling person of
Issuer shall be indemnified by such Selling Shareholders, or by such
underwriter, as the case may be, for all such expenses, losses, claims, damages
and liabilities caused by any untrue, or alleged untrue, statement, that was
included by Issuer in any such registration statement or prospectus or
notification or offering circular (including any amendments or supplements
thereto) in reliance upon, and in conformity with, information furnished in
writing to Issuer by such holder or such underwriter, as the case may be,
expressly for such use.
Promptly upon receipt by a party indemnified under this Section 10(e)
of notice of the commencement of any action against such indemnified party in
respect of which indemnity or reimbursement may be sought against any
indemnifying party under this Section 10(e), such indemnified party shall notify
the indemnifying party in writing of the commencement of such action, but the
failure so to notify the indemnifying party shall not relieve it of any
liability which it may otherwise have to any indemnified party under this
Section 10(e). In case notice of commencement of any such action shall be given
to the indemnifying party as above provided, the indemnifying party shall be
entitled to participate in and, to the extent it may wish, jointly with any
other indemnifying party similarly notified, to assume the defense of such
action at its own expense, with counsel chosen by it and satisfactory to such
indemnified party. The indemnified party shall have the right to employ separate
counsel in any such action and participate in the defense thereof, but the fees
and expenses of such counsel (other than reasonable costs of investigation)
shall be paid by the indemnified party unless (i) the indemnifying party agrees
to pay the same, (ii) the indemnifying party fails to assume the defense of such
action with counsel reasonably satisfactory to the indemnified party, or (iii)
the indemnified party has been advised by counsel that one or more legal
defenses may be available to the indemnifying party that may be contrary to the
interest of the indemnified party, in which case the indemnifying party shall be
entitled to assume the defense of such action notwithstanding its obligation to
bear fees and expenses of such counsel. No indemnifying party shall be liable
for any settlement entered into without its consent, which consent may not be
unreasonably withheld.
If the indemnification provided for in this Section 10(e) is
unavailable to a party otherwise entitled to be indemnified in respect of any
expenses, losses, claims, damages or liabilities referred to herein, then the
indemnifying party, in lieu of indemnifying such party otherwise entitled to be
indemnified, shall contribute to the amount paid or payable by such party to be
indemnified as a result of such expenses, losses, claims, damages or liabilities
in such proportion as is appropriate to reflect the relative benefits received
by Issuer, the Selling Shareholders and the underwriters from the offering of
the securities and also the relative fault of Issuer, the Selling Shareholders
and the underwriters in connection with the statements or omissions which
resulted in such expenses, losses,
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claims, damages or liabilities, as well as any other relevant equitable
considerations. The amount paid or payable by a party as a result of the
expenses, losses, claims, damages and liabilities referred to above shall be
deemed to include any legal or other fees or expenses reasonably incurred by
such party in connection with investigating or defending any action or claim;
provided, however, that in no case shall any Selling Shareholder be responsible,
in the aggregate, for any amount in excess of the net offering proceeds
attributable to its Option Shares included in the offering. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. Any obligation by any holder to
indemnify shall be several and not joint with other holders.
In connection with any registration pursuant to Section 10(a) or 10(b)
of this Agreement, Issuer and each Selling Shareholder (other than Grantee)
shall enter into an agreement containing the indemnification provisions of
Section 10(e) of this Agreement.
(f) MISCELLANEOUS REPORTING. Issuer shall comply with all reporting
requirements and will do all such other things as may be necessary to permit the
expeditious sale at any time of any Option Shares by the Selling Shareholders
thereof in accordance with and to the extent permitted by any rule or regulation
promulgated by the SEC from time to time, including, without limitation, Rule
144. Issuer shall at its expense provide the Selling Shareholders with any
information necessary in connection with the completion and filing of any
reports or forms required to be filed by them under the Securities Act or the
Exchange Act, or required pursuant to any state securities laws or the rules of
any stock exchange.
(g) ISSUE TAXES. Issuer shall pay all stamp taxes in connection with
the issuance and the sale of the Option Shares and in connection with the
exercise of the Option, and will save the Selling Shareholders harmless, without
limitation as to time, against any and all liabilities, with respect to all such
taxes.
11. QUOTATION; LISTING. If Issuer Common Stock or any other securities
to be acquired in connection with the exercise of the Option are then authorized
for quotation or trading or listing on Nasdaq or any securities exchange,
Issuer, upon the request of Holder, shall promptly file an application, if
required, to authorize for quotation or trading or listing the shares of Issuer
Common Stock or other securities to be acquired upon exercise of the Option on
Nasdaq or such other securities exchange and shall use its reasonable best
efforts to obtain approval, if required, of such quotation or listing as soon as
practicable.
12. DIVISION OF OPTION. This Agreement (and the Option granted hereby)
are exchangeable, without expense, at the option of Holder, upon presentation
and surrender of this Agreement at the principal office of Issuer for other
Agreements providing for Options of different denominations entitling the holder
thereof to purchase in the aggregate the same number of shares of Issuer Common
Stock purchasable hereunder. The terms "Agreement" and "Option" as used herein
include any other Agreements and related Options for which this Agreement (and
the Option granted hereby) may be exchanged. Upon receipt by Issuer of evidence
reasonably satisfactory to it of the loss, theft, destruction or mutilation of
this Agreement, and (in the case of loss, theft or destruction) of reasonably
satisfactory indemnification, and upon surrender and cancellation of this
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Agreement, if mutilated, Issuer shall execute and deliver a new Agreement of
like tenor and date. Any such new Agreement executed and delivered shall
constitute an additional contractual obligation on the part of Issuer, whether
or not this Agreement so lost, stolen, destroyed or mutilated shall at any time
be enforceable by anyone.
13. PROFIT LIMITATION.
(a) Notwithstanding any other provision of this Agreement, in no event
shall Grantee's Total Profit (as hereinafter defined) exceed $4.0 million, and,
if it otherwise would exceed such amount, Grantee, at its sole election, shall
either (i) deliver to Issuer for cancellation Option Shares previously purchased
by Grantee, (ii) pay cash or other consideration to Issuer or (iii) undertake
any combination thereof, so that Grantee's Total Profit shall not exceed $4.0
million after taking into account the foregoing actions. Notwithstanding
anything in the foregoing to the contrary, in the event that Grantee receives a
Total Profit of $4.0 million (as hereinafter defined), Grantee shall deliver (x)
to Issuer for cancellation all Option Shares previously purchased by Grantee and
Issuer shall pay Grantee the exercise price paid by Grantee for such Option
Shares, and (y) deliver for cancellation the Option or any remaining portion
thereof.
(b) Notwithstanding any other provision of this Agreement, this Option
may not be exercised for a number of Option Shares as would, as of the Notice
Date, result in a Notional Total Profit (as defined below) of more than $4.0
million, and, if exercise of the Option otherwise would exceed such amount,
Grantee, at its discretion, may increase the Purchase Price for that number of
Shares set forth in the Option Exercise Notice so that the Notional Total Profit
shall not exceed $4.0 million; provided, that nothing in this sentence shall
restrict any exercise of the Option permitted hereby on any subsequent date at
the Purchase Price set forth in Section 2 hereof.
(c) As used herein, the term "Total Profit" shall mean the aggregate
amount (before taxes) of the following: (i) the amount of cash received by
Grantee pursuant to Section 6.03 of the Plan, (ii) the amount received by
Grantee in connection with the repurchase of Option Shares or the Option or
Substitute Option pursuant to Section 8(a)(ii) or (iii) or Section 9(a)(ii) or
(iii), and (iii) (x) the net cash amounts received by Grantee pursuant to the
sale of Option Shares (or any other securities into which such Option Shares are
converted or exchanged), the Option or Substitute Option to any unaffiliated
party, less (y) Grantee's purchase price for such Option Shares.
(d) As used herein, the term "Notional Total Profit" with respect to any
number of Option Shares as to which Grantee may propose to exercise this Option
shall be the Total Profit determined as of the date of the Option Exercise
Notice assuming that this Option were exercised on such date for such number of
Option Shares and assuming that such Option Shares, together with all other
Option Shares held by Grantee and its affiliates as of such date, were sold for
cash at the closing market price for the Common Stock as of the close of
business on the preceding trading day (less customary brokerage commissions).
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14. LIMITATION ON TRANSFER OF OPTION.
(a) Grantee agrees that the Option may not be sold, transferred or
otherwise disposed of, in whole or in part, by it except after the occurrence of
a Purchase Event, and then only as follows. If the Grantee shall determine to
accept a bona fide offer to purchase any portion of the Option then held by it
or to sell any such portion of the Option, the Grantee shall give written notice
thereof to the Issuer specifying (i) the portion of the Option to be sold and
(ii) the purchase price therefor and any other significant terms of the proposed
transaction. Upon receipt of such notice, the Issuer shall, for a period of five
business days immediately following such receipt, have the right of first
refusal to cancel the portion of the Option then held by Grantee that is
proposed to be sold upon the payment of a cancellation fee equal to the purchase
price set forth in such notice. Payment for such portion of the Option to be
cancelled shall be made to the Grantee in immediately available funds within
five business days immediately following receipt of the notice of the proposed
sale.
15. MISCELLANEOUS.
(a) EXPENSES. Except to the extent expressly provided for herein, each
of the parties hereto shall bear and pay all costs and expenses incurred by it
or on its behalf in connection with the transactions contemplated hereunder,
including fees and expenses of its own financial consultants, investment
bankers, accountants and counsel.
(b) WAIVER AND AMENDMENT. Any provision of this Agreement may be waived
at any time by the party that is entitled to the benefits of such provision.
This Agreement may not be modified, amended, altered or supplemented except upon
the execution and delivery of a written agreement executed by the parties
hereto.
(c) ENTIRE AGREEMENT. NO THIRD-PARTY BENEFICIARIES; SEVERABILITY. This
Agreement, together with the Plan and the other documents and instruments
referred to herein and therein, between Grantee and Issuer (i) constitutes the
entire agreement and supersedes all prior agreements and understandings, both
written and oral, between the parties with respect to the subject matter hereof
and (ii) is not intended to confer upon any person other than the parties hereto
(other than the indemnified parties under Section 10(e) of this Agreement and
any transferees of the Option Shares or any permitted transferee of this
Agreement pursuant to Section 14(h) of this Agreement) any rights or remedies
hereunder. If any term, provision, covenant or restriction of this Agreement is
held by a court of competent jurisdiction or Regulatory Authority to be invalid,
void or unenforceable, the remainder of the terms, provisions, covenants and
restrictions of this Agreement shall remain in full force and effect and shall
in no way be affected, impaired or invalidated. If for any reason such court or
Regulatory Authority determines that the Option does not permit Holder to
acquire, or does not require Issuer to repurchase, the full number of shares of
Issuer Common Stock as provided in Section 3 of this Agreement (as may be
adjusted herein), it is the express intention of Issuer to allow Holder to
acquire or to require Issuer to repurchase such lesser number of shares as may
be permissible without any amendment or modification hereof.
(d) GOVERNING LAW. This Agreement shall be governed and construed in
accordance with the laws of the State of New York without regard to any
applicable conflicts of law rules.
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(e) DESCRIPTIVE HEADINGS. The descriptive headings contained herein are
for convenience of reference only and shall not affect in any way the meaning or
interpretation of this Agreement.
(f) NOTICES. All notices and other communications hereunder shall be in
writing and shall be deemed given if delivered personally, telecopied (with
confirmation) or mailed by registered or certified mail (return receipt
requested) to the parties at the addresses set forth in the Plan (or at such
other address for a party as shall be specified by like notice).
(g) COUNTERPARTS. This Agreement and any amendments hereto may be
executed in two counterparts, each of which shall be considered one and the same
agreement and shall become effective when both counterparts have been signed, it
being understood that both parties need not sign the same counterpart.
(h) ASSIGNMENT. Neither this Agreement nor any of the rights, interests
or obligations hereunder or under the Option shall be assigned by any of the
parties hereto (whether by operation of law or otherwise) without the prior
written consent of the other party, except that Holder may assign this Agreement
to a wholly-owned subsidiary of Holder, and Holder may assign its rights
hereunder in whole or in part after the occurrence of a Purchase Event. Subject
to the preceding sentence, this Agreement shall be binding upon, inure to the
benefit of and be enforceable by the parties and their respective successors and
assigns.
(i) FURTHER ASSURANCES. In the event of any exercise of the Option by
Holder, Issuer, and Holder shall execute and deliver all other documents and
instruments and take all other action that may be reasonably necessary in order
to consummate the transactions provided for by such exercise.
(j) SPECIFIC PERFORMANCE. The parties hereto agree that this Agreement
may be enforced by either party through specific performance, injunctive relief
and other equitable relief. Both parties further agree to waive any requirement
for the securing or posting of any bond in connection with the obtaining of any
such equitable relief and that this provision is without prejudice to any other
rights that the parties hereto may have for any failure to perform this
Agreement.
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IN WITNESS WHEREOF, Issuer and Grantee have caused this Stock Option
Agreement to be signed by their respective officers thereunto duly authorized,
all as of the day and year first written above.
ATLANTIC BANK OF NEW YORK
By: /s/ ▇▇▇▇▇▇ ▇. ▇'▇▇▇▇▇
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Name: ▇▇▇▇▇▇ ▇. ▇'▇▇▇▇▇
Title: President and Chief Executive Officer
YONKERS FINANCIAL CORPORATION
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Title: President and Chief Executive Officer