AGREEMENT AND PLAN OF MERGER by and between SP ACQUISITION HOLDINGS, INC. and FRONTIER FINANCIAL CORPORATION Dated as of July 30, 2009
Exhibit 2.1
EXECUTION
COPY
AGREEMENT
AND PLAN OF MERGER
by and
between
and
FRONTIER
FINANCIAL CORPORATION
Dated as
of July 30, 2009
Table of
Contents
Page
|
DEFINITIONS
|
1
|
|
ARTICLE
1 TRANSACTIONS AND TERMS OF MERGER
|
13
|
|
1.1 Merger.
|
13
|
|
1.2 Time
and Place of Closing.
|
13
|
|
1.3 Effective
Time.
|
13
|
|
1.4 Assumption
of Liabilities.
|
14
|
|
1.5 Restructure
of Transaction.
|
14
|
|
ARTICLE
2 TERMS OF MERGER
|
14
|
|
2.1 Charter.
|
14
|
|
2.2 Bylaws.
|
14
|
|
2.3 Directors
and Officers.
|
14
|
|
ARTICLE
3 MANNER OF CONVERTING SHARES
|
15
|
|
3.1 Conversion
of Shares.
|
15
|
|
3.2 Anti-Dilution
Provisions.
|
16
|
|
3.3 Dissenters’
Rights.
|
16
|
|
3.4 Fractional
Shares.
|
16
|
|
3.5 Stock
Options and other Stock-Based Awards.
|
17
|
|
ARTICLE
4 EXCHANGE OF SHARES
|
17
|
|
4.1 Exchange
Procedures.
|
17
|
|
4.2 Rights
of Former FFC Stockholders.
|
18
|
|
ARTICLE
5 REPRESENTATIONS AND WARRANTIES OF FFC
|
19
|
|
5.1 Organization,
Standing, and Power.
|
19
|
|
5.2 Authority
of FFC; No Breach By the Agreement.
|
19
|
|
5.3 Capital
Stock.
|
20
|
|
5.4 FFC
Subsidiaries.
|
21
|
|
5.5 Exchange
Act Filings; Securities Offerings; Financial Statements.
|
21
|
|
5.6 Absence
of Undisclosed Liabilities.
|
23
|
|
5.7 Absence
of Certain Changes or Events.
|
23
|
|
5.8 Tax
Matters.
|
24
|
|
5.9 Allowance
for Possible Loan Losses; Loan and Investment Portfolio,
etc.
|
26
|
|
5.10 Assets.
|
27
|
|
5.11 Intellectual
Property.
|
28
|
|
5.12 Environmental
Matters.
|
28
|
|
5.13 Compliance
with Laws.
|
29
|
i
Table of
Contents
(continued)
Page
|
5.14 Labor
Relations.
|
31
|
|
5.15 Employee
Benefit Plans.
|
32
|
|
5.16 Material
Contracts.
|
36
|
|
5.17 Properties
and Leases.
|
37
|
|
5.18 Privacy
of Customer Information.
|
38
|
|
5.19 Legal
Proceedings.
|
38
|
|
5.20 Reports.
|
38
|
|
5.21 Books
and Records.
|
39
|
|
5.22 Loans
to Executive Officers, Directors and Principal
Shareholders.
|
39
|
|
5.23 Independence
of Directors.
|
39
|
|
5.24 Fiduciary
Activities.
|
39
|
|
5.25 Tax
and Regulatory Matters; Consents.
|
40
|
|
5.26 State
Takeover Laws.
|
40
|
|
5.27 Stockholders’
Support Agreements.
|
40
|
|
5.28 Brokers
and Finders; Opinion of Financial Advisor.
|
40
|
|
5.29 No
Participation In TARP.
|
40
|
|
5.30 Board
Recommendation.
|
40
|
|
5.31 Statements
True and Correct.
|
41
|
|
5.32 Approvals.
|
41
|
|
ARTICLE
6 REPRESENTATIONS AND WARRANTIES OF SPAH
|
42
|
|
6.1 Organization,
Standing, and Power.
|
42
|
|
6.2 Authority;
No Breach By the Agreement.
|
42
|
|
6.3 Capital
Stock.
|
43
|
|
6.4 SPAH
Subsidiaries.
|
43
|
|
6.5 Exchange
Act Filings; Securities Offerings; Financial Statements.
|
43
|
|
6.6 Absence
of Undisclosed Liabilities.
|
45
|
|
6.7 Absence
of Certain Changes or Events.
|
45
|
|
6.8 Tax
Matters.
|
46
|
|
6.9 Assets.
|
48
|
|
6.10 Intellectual
Property.
|
49
|
|
6.11 Environmental
Matters.
|
49
|
|
6.12 Compliance
with Laws.
|
49
|
|
6.13 Labor
Relations.
|
50
|
|
6.14 Employee
Benefit Plans.
|
51
|
|
6.15 Material
Contracts.
|
51
|
|
6.16 Properties
and Leases
|
51
|
|
6.17 Legal
Proceedings.
|
52
|
|
6.18 Reports.
|
52
|
|
6.19 Books
and Records.
|
52
|
|
6.20 Loans
to Executive Officers and Directors.
|
52
|
|
6.21 Independence
of Directors.
|
52
|
ii
Table of
Contents
(continued)
Page
|
6.22 Tax
and Regulatory Matters; Consents.
|
53
|
|
6.23 Brokers
and Finders.
|
53
|
|
6.24 Board
Recommendation.
|
53
|
|
6.25 Statements
True and Correct.
|
53
|
|
6.26 SPAH
Trust Fund.
|
54
|
|
6.27 Prior
Business Operations.
|
54
|
|
ARTICLE
7 CONDUCT OF BUSINESS PENDING CONSUMMATION
|
55
|
|
7.1 Affirmative
Covenants of FFC.
|
55
|
|
7.2 Negative
Covenants of the Parties.
|
55
|
|
7.3 Affirmative
Covenants of SPAH.
|
58
|
|
7.4 Adverse
Changes in Condition.
|
58
|
|
7.5 Reports.
|
58
|
|
7.6 Claims
Against Trust Account.
|
59
|
|
ARTICLE
8 ADDITIONAL AGREEMENTS
|
59
|
|
8.1 Registration
Statement; Joint Proxy Statement.
|
59
|
|
8.2 Stockholder
and Warrantholder Approvals.
|
61
|
|
8.3 Other
Offers, etc.
|
61
|
|
8.4 Consents
of Regulatory Authorities.
|
62
|
|
8.5 Agreement
as to Efforts to Consummate.
|
63
|
|
8.6 Investigation
and Confidentiality.
|
63
|
|
8.7 Press
Releases.
|
64
|
|
8.8 Charter
Provisions.
|
64
|
|
8.9 Employee
Benefits and Contracts.
|
64
|
|
8.10 Indemnification.
|
66
|
|
ARTICLE
9 CONDITIONS PRECEDENT TO OBLIGATIONS TO
CONSUMMATE
|
67
|
|
9.1 Conditions
to Obligations of Each Party.
|
67
|
|
9.2 Conditions
to Obligations of SPAH.
|
68
|
|
9.3 Conditions
to Obligations of FFC.
|
70
|
|
ARTICLE
10 TERMINATION
|
71
|
|
10.1 Termination.
|
71
|
|
10.2 Effect
of Termination.
|
74
|
|
10.3 Non-Survival
of Representations and Covenants.
|
74
|
|
ARTICLE
11 MISCELLANEOUS
|
74
|
|
11.1 Expenses.
|
74
|
iii
Table of
Contents
(continued)
Page
|
11.2 Brokers,
Finders and Financial Advisors.
|
75
|
|
11.3 Entire
Agreement.
|
75
|
|
11.4 Amendments.
|
76
|
|
11.5 Waivers.
|
76
|
|
11.6 Assignment.
|
76
|
|
11.7 Notices.
|
77
|
|
11.8 Governing
Law.
|
78
|
|
11.9 Counterparts.
|
78
|
|
11.10 Captions;
Articles and Sections.
|
79
|
|
11.11 Interpretations.
|
79
|
|
11.12 Enforcement
of Agreement.
|
79
|
|
11.13 Severability.
|
79
|
|
11.14 No
Third Party Beneficiaries.
|
79
|
LIST OF APPENDICES AND
EXHIBITS
|
Exhibit
|
Description
|
|
|
A
|
Certificate
of Incorporation of the Surviving Corporation
|
|
|
B
|
Bylaws
of the Surviving Corporation
|
|
|
C
|
Form
of Support Agreement
|
|
|
D
|
Form
of Lock-up Agreement
|
|
|
E
|
Form
of Warrant Amendment Agreement
|
|
iv
AGREEMENT
AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF
MERGER (this “Agreement”), dated as
of July 30, 2009, is by and between SP Acquisition Holdings, Inc.,
a Delaware corporation (“SPAH”) and Frontier Financial
Corporation, a Washington corporation (“FFC”).
RECITALS
WHEREAS, the Boards of
Directors of FFC and SPAH have determined that it is in the best interests of
their respective companies and their stockholders to consummate the strategic
business combination transaction provided for in this Agreement in which FFC
will, on the terms and subject to the conditions set forth in this Agreement,
merge with and into, SPAH (the “Merger”), with SPAH
as the Surviving Corporation in the Merger;
WHEREAS, the Parties intend
the Merger to be treated as a reorganization under Section 368(a) of the
Internal Revenue Code of 1986 (the “Code”), and intend
for this Agreement to constitute a “plan of reorganization” within the meaning
of the Code; and
WHEREAS, the Parties desire to
make certain representations, warranties and agreements in connection with the
Merger and also to prescribe certain conditions to the Merger.
NOW, THEREFORE, in
consideration of the above and the mutual warranties, representations,
covenants, and agreements set forth herein, and other good and valuable
consideration and the receipt and sufficiency of which are acknowledged, the
Parties, intending to be legally bound, agree as follows:
DEFINITIONS
(a) Except
as otherwise provided herein, the capitalized terms set forth below shall have
the following meanings:
“Acquisition Proposal” means
any inquiry, offer, or proposal (whether communicated to the applicable Party or
publicly announced to a Party’s stockholders) by any Person (except, in the case
of a proposal to FFC, other than a proposal from SPAH or any of its Affiliates)
for an Acquisition Transaction involving a Party or any of its present or future
consolidated Subsidiaries, or any combination of such Subsidiaries, the assets
of which constitute 5% or more of the consolidated assets of the Party as
reflected on such Party’s consolidated statement of condition prepared in
accordance with GAAP.
“Acquisition Transaction” means
any transaction or series of related transactions (other than the transactions
contemplated by this Agreement) involving: (i) any acquisition or purchase from
a Party by any Person or Group (except, in the case of a proposal to FFC, a
proposal from SPAH or any of its Affiliates) of 25% or more in interest of the
total outstanding voting securities (or options, warrants, or Rights, or
securities convertible into or exchangeable for, such securities) of such Party
or any of its Subsidiaries, or any tender offer or exchange offer that if
consummated would result in any Person or Group (except, in the case of a
proposal to FFC, other than SPAH or any of its Affiliates) beneficially owning
25% or more in interest of the total outstanding voting securities (or options,
warrants, or Rights, or securities convertible into or exchangeable for, such
securities) of a Party or any of its Subsidiaries, or any merger, consolidation,
share exchange, business combination reorganization, recapitalization,
liquidation, dissolution or similar transaction involving a Party pursuant to
which the stockholders of such Party immediately preceding such transaction hold
less than 90% of the equity interests in the surviving or resulting entity
(which includes the parent corporation of any constituent corporation to any
such transaction) of such transaction; (ii) any sale or lease (other than in the
ordinary course of business), or exchange, transfer, license (other than in the
ordinary course of business), acquisition or disposition of 5% or more of the
assets of a Party; or (iii) any liquidation or dissolution of FFC or SPAH, other
than as provided for in the SPAH Trust Agreement; provided that, for purposes of
Section 11.1(b), “Acquisition Transaction” will include any acquisition, by
tender or exchange offer, merger, consolidation or other business combination or
otherwise, directly or indirectly, of any Person by a Party.
“Affiliate” of a Person means:
(i) any other Person directly, or indirectly through one or more intermediaries,
controlling, controlled by or under common control with such Person; (ii) any
officer, director, partner, employer, or direct or indirect beneficial owner of
any 10% or greater equity or voting interest of such Person; or (iii) any other
Person for which a Person described in clause (ii) acts in any such
capacity. For purposes of this definition, a Person shall be deemed
to have control of another Person if it has the direct or indirect ability or
power to direct or cause the direction of management policies of such other
Person or otherwise direct the affairs of such other Person, whether through
ownership of more than 50% of the voting securities of such other Person, by
Contract or otherwise.
“Articles of Merger” means the
Articles of Merger to be filed with the Secretary of State of the State of
Washington.
“Assets” of a Person means all
of the assets (including securities), properties, businesses and rights of such
Person of every kind, nature, character and description, whether real, personal
or mixed, tangible or intangible, accrued or contingent, or otherwise relating
to or utilized in such Person’s business, directly or indirectly, in whole or in
part, whether or not carried on the books and records of such Person, and
whether or not owned in the name of such Person or any Affiliate of such Person
and wherever located.
“Bank” means Frontier Bank, a
Washington state bank and a wholly owned Subsidiary of FFC.
“Bank Secrecy Act” means The
Bank Secrecy Act of 1970, as amended.
“Business Day” means any
date that is not a Saturday or Sunday or a day on which banks located in New
York City are authorized or required to be closed.
“Certificate of Merger” means
the certificate of merger to be filed with the Delaware Secretary of
State.
“Closing Date” means the date
on which the Closing occurs.
“Commission” or “SEC” means the United States
Securities and Exchange Commission.
2
“Consent” means any consent,
approval, authorization, clearance, exemption, waiver, or similar affirmation by
any Person pursuant to any Contract, Law, Order, or Permit.
“Contract” means any written or
oral agreement, arrangement, authorization, commitment, contract, indenture,
instrument, lease, license, obligation, plan, practice, restriction,
understanding, or undertaking of any kind or character, or other document to
which any Person is a Party or that is binding on any Person or its capital
stock, Assets or business.
“Default” means (i) any breach
or violation of, default under, contravention of, or conflict with, any
Contract, Law, Order, or Permit, (ii) any occurrence of any event that with the
passage of time or the giving of notice or both would constitute a breach or
violation of, default under, contravention of, or conflict with, any Contract,
Law, Order, or Permit, or (iii) any occurrence of any event that with or without
the passage of time or the giving of notice would give rise to a right of any
Person to exercise any remedy or obtain any relief under, terminate or revoke,
suspend, cancel, or modify or change the current terms of, or renegotiate, or to
accelerate the maturity or performance of, or to increase or impose any
Liability under, any Contract, Law, Order, or Permit.
“DGCL” means the General
Corporation Law of the State of Delaware.
“Employee Benefit Plan” means
each pension, retirement, profit-sharing, deferred compensation, stock option,
employee stock ownership, share purchase, severance pay, vacation, bonus,
retention, change in control or other incentive plan, medical, vision, dental or
other health plan, or program or other arrangement, any life insurance plan,
flexible spending account, cafeteria plan, vacation, holiday, disability, death
or any other employee benefit plan or fringe benefit plan, including any
“employee benefit plan,” as that term is defined in Section 3(3) of ERISA and
any other plan, fund, policy, program, practice, custom understanding or
arrangement providing compensation or other benefits, whether or not such
Employee Benefit Plan is or is intended to be (i) covered or qualified under the
Code, ERISA or any other applicable Law, (ii) written or oral, (iii) funded or
unfunded, (iv) actual or contingent or (v) arrived at through collective
bargaining or otherwise.
“Environmental Laws” shall mean
all Laws relating to pollution or protection of human health or the environment
(including ambient air, surface water, ground water, land surface or subsurface
strata) and which are administered, interpreted or enforced by the United States
Environmental Protection Agency and state and local Governmental Authorities
with jurisdiction over, and including common law in respect of, pollution or
protection of the environment, including: (i) the Comprehensive Environmental
Response Compensation and Liability Act, 42 U.S.C. §§ 9601, et
seq. (“CERCLA”); (ii) the
Solid Waste Disposal Act, as amended by the Resource Conservation and Recovery
Act, 42 U.S.C. §§ 6901, et seq. (“RCRA”); (iii) the
Emergency Planning and Community Right to Know Act (42 U.S.C. §§
11001, et seq.); (iv) the Clean Air Act (42 U.S.C. §§ 7401, et seq.);
(v) the Clean Water Act (33 U.S.C. §§ 1251, et seq.); (vi) the Toxic
Substances Control Act (15 U.S.C. §§ 2601, et seq.); (vii) any state,
county, municipal or local statues, laws or ordinances similar or analogous to
the federal statutes listed in parts (i) — (vi) of this subparagraph; (viii) any
amendments to the statues, laws or ordinances listed in parts (i) — (vi) of this
subparagraph, regardless of whether in existence on the date hereof, (ix) any
rules, regulations, guidelines, directives, orders or the like adopted pursuant
to or implementing the statutes, laws, ordinances and amendments listed in parts
(i) — (vii) of this subparagraph; and (x) any other law, statute, ordinance,
amendment, rule, regulation, guideline, directive, order or the like in effect
now or in the future relating to environmental, health or safety matters and
other Laws relating to emissions, discharges, releases, or threatened releases
of any Hazardous Material, or otherwise relating to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport, or handling of any
Hazardous Material.
3
“ERISA” means the Employee
Retirement Income Security Act of 1974.
“ERISA Affiliate” means any
entity if it would have ever been considered a single employer with the FFC
under ERISA Section 4001(b) or part of the same “controlled group” as the
FFC for purposes of ERISA Section 303(k)(6)(C) or Code Sections 414(b)
or (c) or a Member of an affiliated service group for purposes of Code
Section 414(m).
“Exchange Act” means the
Securities Exchange Act of 1934, as amended, and the rules and regulations
promulgated thereunder.
“Exchange Act Documents” means
all forms, proxy statements, registration statements, reports, schedules, and
other documents, including all certifications and statements required by the
Exchange Act or Section 906 of the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act with respect to any report
that is an Exchange Act Document, filed, or required to be filed, by a Party or
any of its Subsidiaries with any Regulatory Authority pursuant to the Securities
Laws.
“Exhibits” means the Exhibits
so marked, copies of which are attached to this Agreement. Such
Exhibits are hereby incorporated by reference herein and made a part hereof, and
may be referred to in this Agreement and any other related instrument or
document without being attached hereto or thereto.
“FDIC” shall mean the Federal
Deposit Insurance Corporation.
“Federal Reserve” shall mean
the Board of Governors of the Federal Reserve System and the Federal Reserve
Bank of San Francisco.
“FFC Common Stock” means the
common stock, no par value, of FFC.
“FFC Entities” means,
collectively, FFC and all FFC Subsidiaries.
“FFC Financial Statements”
means (i) the consolidated balance sheets (including related notes and
schedules, if any) of FFC as of December 31, 2007 and 2008 and as of June 30,
2009 and the related statements of earnings, changes in stockholders’ equity,
and cash flows (including related notes and schedules, if any) for each of the
three years ended December 31, 2006, 2007 and 2008, and for the six months ended
June 30, 2009, and (ii) the consolidated balance sheets of FFC (including
related notes and schedules, if any) and related statements of operations,
changes in stockholders’ equity, and cash flows (including related notes and
schedules, if any) with respect to periods ended subsequent to June 30,
2009.
“FFC Material Adverse Effect”
means an event, change or occurrence which, individually or together with any
other event, change or occurrence, has a material adverse effect on (i) the
financial position, property, business, assets or results of operations of FFC
and its Subsidiaries, taken as a whole, or (ii) the ability of FFC to perform
its obligations under this Agreement or to consummate the Merger or the other
transactions contemplated by this Agreement; provided that “FFC Material Adverse
Effect” shall not be deemed to include the effects of (A) changes in banking and
other Laws of general applicability or interpretations thereof by Governmental
Authorities, (B) changes in GAAP or regulatory accounting principles generally
applicable to banks and their holding companies, (C) actions and omissions of
FFC (or any of its Subsidiaries) taken with the prior written consent of SPAH in
contemplation of the transactions contemplated hereby, (D) changes in economic
conditions affecting financial institutions generally, including changes in
market interest rates or the projected future interest rate environment;
provided, however, that this exception shall not be given effect to the extent
that such change has a disproportionate effect on FFC, (E) any modifications or
changes to valuation policies and practices in connection with the Merger or
restructuring charges taken in connection with the Merger, in each case in
accordance with GAAP, or (F) direct effects of compliance with this Agreement on
the operating performance of FFC, including expenses incurred by FFC in
consummating the transactions contemplated by this Agreement.
4
“FFC Real Property” means all
Owned Real Property and all Leased Real Property.
“FFC Stock Plans” means the
Frontier Financial Corporation 2006 Stock Incentive Plan, Amended and Restated
Frontier Financial Corporation Incentive Stock Option Plan, Frontier Financial
Corporation 1999 Employee Stock Award Plan, Frontier Financial Corporation 2001
Stock Award Plan, Interbancorp, Inc. 1996 Non-Employee Director Stock Option
Plan, Interbancorp, Inc. 1996 Stock Option Plan, NorthStar Bank 2001 Employee
Stock Option Plan, NorthStar Bank 1994 Employee Stock Option Plan and NorthStar
Director Nonqualified Stock Option Plan and Liberty Bay Financial Corporation
Incentive Stock Option Plan II.
“FFC Stockholder Approval”
means the approval of this Agreement and the transactions contemplated hereby,
including the Merger, by the holders of two-thirds of the outstanding shares of
FFC Common Stock entitled to vote on the Merger in accordance with applicable
Law.
“FFC Subsidiaries” means the
Subsidiaries, if any, of FFC, as of the date of this Agreement.
“GAAP” shall mean generally
accepted accounting principles in the United States, consistently applied during
the periods involved.
“Governmental Authority” shall
mean any federal, state, local, foreign, or other court, board, body,
commission, agency, authority or instrumentality, arbitral authority,
self-regulatory authority, mediator, tribunal, including Regulatory Authorities
and Taxing Authorities.
“Group” shall mean two or more
Persons acting in concert for the purpose of acquiring, holding or disposing of
securities of an issuer.
“Hazardous Material” shall mean
any chemical, substance, waste, material, pollutant, or contaminant defined as
or deemed hazardous or toxic or otherwise regulated under any Environmental Law,
including RCRA hazardous wastes, CERCLA hazardous substances, and HSRA regulated
substances, pesticides and other agricultural chemicals, oil and petroleum
products or byproducts and any constituents thereof, urea formaldehyde
insulation, lead in paint or drinking water, mold, asbestos, and polychlorinated
biphenyls (PCBs): (i) any hazardous substance, hazardous material, hazardous
waste, regulated substance, or toxic substance (as those terms are defined by
any applicable Environmental Laws) and (ii) any chemicals, pollutants,
contaminants, petroleum, petroleum products, or oil (and specifically shall
include asbestos requiring abatement, removal, or encapsulation pursuant to the
requirements of Environmental Law), provided, notwithstanding the foregoing or
any other provision in this Agreement to the contrary, the words “Hazardous
Material” shall not mean or include any such Hazardous Material used, generated,
manufactured, stored, disposed of or otherwise handled in normal quantities in
the ordinary course of business in compliance with all applicable Environmental
Laws, or such that may be naturally occurring in any ambient air, surface water,
ground water, land surface or subsurface strata.
5
“Intellectual Property” means
copyrights, patents, trademarks, service marks, service names, trade names,
domain names, together with all goodwill associated therewith, registrations and
applications therefore, technology rights and licenses, computer software
(including any source or object codes therefore or documentation relating
thereto), trade secrets, franchises, know-how, inventions, and other
intellectual property rights.
“Joint Proxy Statement” means
the prospectus/joint proxy statement included as part of the Registration
Statement.
“▇▇▇▇▇ ▇▇▇▇▇▇▇▇” means ▇▇▇▇▇,
▇▇▇▇▇▇▇▇ & ▇▇▇▇▇, Inc.
“Knowledge” as used with
respect to a Person (including references to such Person being aware of a
particular matter) means those facts that are known or should reasonably have
been known after due inquiry by the chairman, president, or chief financial
officer, or any senior or executive vice president of such Person.
“Law” means any code, law
(including common law), ordinance, regulation, reporting or licensing
requirement, rule, statute, regulation or order applicable to a Person or its
Assets, Liabilities or business, including those promulgated, interpreted or
enforced by any Regulatory Authority.
“Liability” means any direct or
indirect, primary or secondary, liability, indebtedness, obligation, penalty,
cost or expense (including costs of investigation, collection and defense),
claim, deficiency, guaranty or endorsement of or by any Person (other than
endorsements of notes, bills, checks, and drafts presented for collection or
deposit in the ordinary course of business) of any type, whether accrued,
absolute or contingent, liquidated or unliquidated, matured or unmatured, or
otherwise.
“Lien” means any conditional
sale agreement, default of title, easement, encroachment, encumbrance,
hypothecation, infringement, lien, mortgage, pledge, reservation, restriction,
security interest, title retention or other security arrangement, or any adverse
right or interest, charge, or claim of any nature whatsoever of, on, or with
respect to any property or any property interest, other than (i) liens for
current property Taxes not yet due and payable, and (ii) for any depository
institution, pledges to secure public deposits and other liens incurred in the
ordinary course of the banking business.
6
“Litigation” means any action,
arbitration, cause of action, lawsuit, claim, complaint, criminal prosecution,
governmental or other examination or investigation, audit (other than regular
audits of financial statements by outside auditors), compliance review,
inspection, hearing, administrative or other proceeding relating to or affecting
a Party, its business, its Assets or Liabilities (including Contracts related to
Assets or Liabilities), or the transactions contemplated by this Agreement, but
shall not include regular, periodic examinations of depository institutions and
their Affiliates by Regulatory Authorities.
“Losses” means any and all
demands, claims, actions or causes of action, assessments, losses, diminution in
value, damages (including special and consequential damages), liabilities,
costs, and expenses, including interest, penalties, cost of investigation and
defense, and reasonable attorneys’ and other professional fees and
expenses.
“Material” or “material” for purposes of this
Agreement shall be determined in light of the facts and circumstances of the
matter in question; provided
that any specific monetary amount stated in this Agreement shall
determine materiality in that instance.
“NASDAQ” means The NASDAQ
Stock Market LLC
“NYSE Amex” means NYSE Amex
LLC.
“Operating Property” means any
property other than OREO that is owned, leased, or operated by the Party in
question or by any of its Subsidiaries or in which such Party or Subsidiary
holds a security interest or other interest (including an interest in a
fiduciary capacity), and used by such Party or any of its Subsidiaries in the
ordinary course of their business or held by such Party or Subsidiary for future
use in their business.
“OREO” means all real estate
that is owned by any FFC Entity, including any real estate acquired by
foreclosure or by deed-in-lieu thereof, that is not occupied and used by such
FFC Entity in the ordinary course of business or held by an FFC Entity for
future use.
“Order” means any
administrative decision or award, decree, injunction, judgment, order,
quasi-judicial decision or award, directive, ruling, or writ of any Governmental
Authority.
“Participation Facility” means
any facility or property in which the Party in question or any of its
Subsidiaries participates in the management and, where required by the context,
means the owner or operator of such facility or property, but only with respect
to such facility or property.
“Party” means SPAH or FFC and
“Parties” means both of
such Persons.
“Permit” means any Governmental
Authority approval, authorization, certificate, easement, filing, franchise,
license, notice, permit, or right to which any Person is a Party or that is or
may be binding upon or inure to the benefit of any Person or its securities,
Assets, or business.
7
“Person” means a natural person
or any legal, commercial or Governmental Authority, such as, but not limited to,
a corporation, general partnership, joint venture, limited partnership, limited
liability company, limited liability partnership, trust, business association,
group acting in concert, or any person acting in a representative
capacity.
“Privacy Requirements” means:
(i) Title V of the ▇▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Financial Modernization Act of 1999, as
amended (the “GLB
Act”); (ii) Federal regulations implementing such act and codified at 12
C.F.R. Part 332; (iii) the Interagency Guidelines Establishing
Standards for Safeguarding Customer Information set forth in 12 C.F.R. Part 364;
and (iv) any other applicable Requirements of Law relating to the privacy and
security of Customer Information.
“Prospectus” means the final
prospectus of SPAH, dated as of October 10, 2007.
“Registration Statement” means
a registration statement, together with any and all amendments and supplements
thereto, on Form S-4 filed with the SEC under the Securities Act, and complying
with applicable state securities Laws and including a prospectus/joint proxy
statement satisfying all requirements of applicable state securities Laws and
the Securities Act.
“Regulation O” means the
regulation set forth at 12 C.F.R. Part 215.
“Regulatory Authorities” means,
collectively, the Commission, the NYSE Amex, the State of Washington Department
of Financial Institutions, the NASDAQ, the Financial Industry Regulatory
Authority, the FDIC, the Department of Justice, the Federal Reserve, the Federal
Trade Commission and all other federal, state, county, local or other
Governmental Authorities having jurisdiction over a Party or its
Subsidiaries.
“Representative” means any
investment banker, financial advisor, attorney, accountant, consultant, or other
representative or agent of a Person.
“Requirements of Law” means,
with respect to any Person, any certificate or articles of incorporation, as
applicable, bylaws or other organizational or governing documents of such
Person, and any law, ordinance, statute, rule, regulation, judgment, order,
decree, injunction, permit, issuance or other determination, finding, guidance
or recommendation of any Governmental Authority or final and binding
determination of any arbitrator applicable to or binding upon such Person or to
which such Person is subject, whether federal, state, county or local
(including, if applicable, usury laws, the federal Truth-In-Lending Act, the
federal Fair Debt Collection Practices Act, the federal Equal Credit Opportunity
Act, the federal Fair Credit Reporting Act, the GLB Act, and rules and
regulations of the Federal Reserve, each as amended from time to
time).
“Rights” shall mean all
arrangements, calls, commitments, Contracts, options, rights to subscribe to,
scrip, warrants, or other binding obligations of any character whatsoever by
which a Person is or may be bound to issue additional shares of its capital
stock or other securities, securities or rights convertible into or exchangeable
for, shares of the capital stock or other securities of a Person.
“Sandler ▇’▇▇▇▇▇” means
Sandler ▇’▇▇▇▇▇ + Partners, L.P.
8
“▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act” means the
▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act of 2002, as amended, and the rules and regulations
promulgated thereunder.
“Securities Act” means the
Securities Act of 1933, as amended, and the rules and regulations promulgated
thereunder.
“Securities Laws” means the
Securities Act, the Exchange Act, the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act, the Investment Company
Act of 1940, the Investment Advisors Act of 1940, the Trust Indenture Act of
1939, each as amended, and the rules and regulations of any Regulatory Authority
promulgated thereunder.
“SPAH Certificate of
Incorporation” means the SPAH Certificate of Incorporation, as amended
and restated on October 11, 2007.
“SPAH Common Stock” means the
common stock, par value $0.001 per share, of SPAH.
“SPAH Entities” means,
collectively, SPAH and all SPAH Subsidiaries, if any.
“SPAH Financial Statements”
means (i) the balance sheets (including related notes and schedules, if any) of
SPAH as of December 31, 2007 and 2008 and as of June 30, 2009 and the related
statements of earnings, changes in stockholders’ equity, and cash flows
(including related notes and schedules, if any) for each of the two years ended
December 31, 2007 and 2008, and for the six months ended June 30, 2009, and (ii)
the balance sheets of SPAH (including related notes and schedules, if any) and
related statements of operations, changes in stockholders’ equity, and cash
flows (including related notes and schedules, if any) with respect to periods
ended subsequent to June 30, 2009.
“SPAH IPO Common Stock” means
the 43,289,600 shares of SPAH Common Stock issued in connection with the SPAH
initial public offering on October 16, 2007 and the exercise of the
over-allotment option.
“SPAH Material Adverse Effect”
means an event, change or occurrence which, individually or together with any
other event, change or occurrence, has a material adverse effect on (i) the
financial position, property, business, assets or results of operations of SPAH
and its Subsidiaries, taken as a whole, or (ii) the ability of SPAH to perform
its obligations under this Agreement or to consummate the Merger or the other
transactions contemplated by this Agreement; provided that “SPAH Material
Adverse Effect” shall not be deemed to include the effects of (A) changes in
banking and other Laws of general applicability or interpretations thereof by
Governmental Authorities, (B) changes in GAAP or regulatory accounting
principles generally applicable to banks and their holding companies, (C)
actions and omissions of SPAH (or any of its Subsidiaries) taken with the prior
written consent of FFC in contemplation of the transactions contemplated hereby,
(D) changes in economic conditions affecting financial institutions generally,
including changes in market interest rates or the projected future interest rate
environment; provided, however, that this exception shall not be given effect to
the extent that such change has a disproportionate effect on SPAH (E) any
modifications or changes to valuation policies and practices in connection with
the Merger or restructuring charges taken in connection with the Merger, in each
case in accordance with GAAP, or (F) direct effects of compliance with this
Agreement on the operating performance of SPAH, including expenses incurred by
SPAH in consummating the transactions contemplated by this
Agreement.
9
“SPAH Stockholder” means a
Person who owns SPAH Common Stock.
“SPAH Stockholder Approval”
means (a) the approval of this Agreement, on substantially the terms and
conditions set forth in this Agreement, and the transactions contemplated
hereby, including the Merger by (i) the holders of a majority of the outstanding
shares of SPAH Common Stock entitled to vote, present in person or represented
by proxy, at the Stockholders Meeting and (ii) a majority of the SPAH IPO Common
Stock cast at the Stockholders Meeting, in person or by proxy, with holders
owning no more than 10% of the shares of the SPAH IPO Common Stock (minus one
share) voting against the Agreement and the Merger and thereafter exercising
their Conversion Rights and (b) the approval of the amendments to the SPAH
Certificate of Incorporation set forth in Exhibit A by the holders of a majority
of the outstanding shares of SPAH Common Stock entitled to vote, present in
person or represented by proxy, at the Stockholders Meeting.
“SPAH Subsidiaries” means the
Subsidiaries of SPAH, which shall include any corporation, bank, savings
association, limited liability company, limited partnership, limited liability
partnership or other organization acquired as a Subsidiary of SPAH in the future
and held as a Subsidiary by SPAH at the Effective Time.
“SPAH Trust Agreement” means
the Investment Management Trust Agreement by and between SPAH and Continental
Stock Transfer & Trust Company, dated as of October 15, 2007.
“SPAH Warrants” means warrants
issued by SPAH, each entitling the holder thereof to purchase one share of SPAH
Common Stock on the terms and conditions set forth in the Amended and Restated
Warrant Agreement dated as of October 4, 2007 between SPAH and Continental Stock
Transfer & Trust Company, as the same may be amended from time to
time.
“SPAH Warrantholder” means a
Person who owns SPAH Warrants.
“SPAH Warrantholder Approval”
means the approval of the Warrant Amendment Agreement, insubstantially the form
attached hereto, by (i) the holders of a majority of the SPAH Warrants entitled
to vote on the Warrant Amendment Agreement at the Stockholders Meeting and (ii)
a majority of the outstanding SPAH Warrants issued in, or subsequent to, SPAH’s
initial public offering.
“Stockholders Meetings” means
the FFC stockholders meeting, the SPAH stockholders meeting and the SPAH
Warrantholders meeting, including any adjournment or adjournments thereof, each
held in connection with the approval of this Agreement, the Warrant Amendment
Agreement, as applicable, and the consummation of the transactions contemplated
hereby.
“Subsidiaries” means all those
corporations, banks, associations, or other entities of which the entity in
question either (i) owns or controls 50% or more of the outstanding equity
securities either directly or through an unbroken chain of entities as to each
of which 50% or more of the outstanding equity securities is owned directly or
indirectly by its parent (provided, there shall not be included any such entity
the equity securities of which are owned or controlled in a fiduciary capacity),
(ii) in the case of partnerships, serves as a general partner, (iii) in the case
of a limited liability company, serves as a managing member, or (iv) otherwise
has the ability to elect a majority of the directors, trustees or managing
members thereof.
10
“Superior Proposal” means any
unsolicited, bona fide written Acquisition Proposal (on its most recently
amended or modified terms, if amended or modified) (i) involving the acquisition
of at least a majority of the outstanding equity interest in, or all or
substantially all of the assets and liabilities of a Party and (ii) on terms
that the Board of Directors of such Party determines, in good faith, based upon
consultations with its outside legal counsel and its financial advisors, (a) are
more favorable to such Party’s stockholders, from a financial point of view,
than this Agreement and the Merger, taken as a whole, and (b) is reasonably
likely to be consummated on the terms so proposed, in each case with respect to
sub clauses (a) and (b), taking into account, among other things, all
legal, tax, financial, regulatory, timing and other aspects of, and conditions
to, the Superior Proposal and the Person or group making the Superior Proposal
(including any financing required by such Person or group).
“Surviving Corporation” means
SPAH as the surviving corporation resulting from the Merger with an amended and
restated Certificate of Incorporation as provided in Section 2.1
hereof.
“Tax” or “Taxes” means (i) any and all
taxes, charges, fees, levies, imposts, duties, or assessments, including income,
gross receipts, excise, employment, sales, use, transfer, recording license,
payroll, franchise, severance, documentary, stamp, occupation, windfall profits,
environmental, federal highway use, commercial rent, customs duties, capital
stock, paid-up capital, profits, withholding, Social Security, single business
and unemployment, disability, real property, personal property, registration, ad
valorem, value added, alternative or add-on minimum, estimated, or other taxes,
fees, assessments or charges of any kind whatsoever, imposed or required to be
withheld by any Governmental Authority (domestic or foreign), including any
interest, penalties, and additions imposed thereon or with respect thereto, and
(ii) any transferee, successor, joint and several, contractual or other
liability (including liability pursuant to Treasury Regulation Section 1.1502-6
(or any similar provision of state, local or foreign law) in respect to any item
described in clause (i).
“Tax Return” means any report,
return, information return, or other information required to be supplied to a
Governmental Authority in connection with Taxes, including any return of an
affiliated or combined or unitary group that includes a Party or its
Subsidiaries.
“Taxing Authority” means the
Internal Revenue Service and any other Governmental Authority responsible for
the administration of any Tax.
“USA Patriot Act” means the
Uniting and Strengthening America by Providing Appropriate Tools Required to
Intercept and Obstruct Terrorism Act of 2001, as amended.
“Warrant Amendment Agreement”
means the form of Warrant Amendment Agreement attached hereto as Exhibit
E.
“WBCA” means the Washington
Business Corporation Act, Title 23B of the Revised Code of Washington, as
amended.
11
(b) The
terms set forth below shall have the meanings ascribed thereto in the referenced
sections:
|
Term
|
Section
|
|
Agreement
|
Introduction
|
|
Allowance
|
5.9
(a)
|
|
BHCA
Code
|
5.1
Recitals
|
|
CERCLA
|
Definitions,
“Environmental Laws”
|
|
Claims
|
7.6
|
|
Closing
|
1.2
|
|
Conversion
Rights
|
3.1
(a)
|
|
Customer
Information
|
5.17
(a)
|
|
Dissenting
Shares
|
3.3
|
|
DOL
|
5.15
(b)
|
|
Effective
Time
|
1.3
|
|
Exchange
Agent
|
4.1
(a)
|
|
Exchange
Ratio
|
3.1(b)
|
|
Excluded
Shares
|
3.1
(b)
|
|
Expenses
|
11.1(a)
|
|
FFC
|
Introduction
|
|
FFC
Benefits Plan
|
5.15
(a)
|
|
FFC
Benefits Plans
|
5.15
(a)
|
|
FFC
Contracts
|
5.16
(a)
|
|
FFC
ERISA Plan
|
5.15
(a)
|
|
FFC
Exchange Act Reports
|
5.5
(a)
|
|
FFC
Restricted Share
|
3.5(a)
|
|
FFC
Stock Award
|
3.5(a)
|
|
FFC
Stock Option
|
3.5
(a)
|
|
FFC
Tax Opinion
|
9.3
(e)
|
|
GLB
Act
|
Definitions,
“Privacy Requirements”
|
|
Indemnified
Party
|
8.10
(a)
|
|
IRS
|
5.2
(c)
|
|
Lease
Agreement
|
5.17(c)
|
|
Leased
Real Property
|
5.17(b)
|
|
Lock-up
Agreement
|
8.9(f)
|
|
Maximum
Amount
|
8.10
(b)
|
|
Merger
|
Recitals
|
|
Merger
Consideration
|
3.1
(b)
|
|
Other
Plan
|
5.15
(a)
|
|
Owned
Real Property
|
5.17(a)
|
|
RCRA
|
Definitions,
“Environmental Laws”
|
|
Support
Agreement
|
5.27
|
|
SPAH
|
Introduction
|
|
SPAH
Contract
|
6.11
(a)
|
12
|
Term
|
Section
|
|
SPAH
Certificate of Amendment
|
9(a)(i)(2)
|
|
SPAH
Exchange Act Reports
|
6.5
(a)
|
|
SPAH
Tax Opinion
|
9.2
(g)
|
|
Termination
Fee
|
11.1
(b)
|
|
Takeover
Laws
|
5.24
|
|
Trust
Fund
|
6.19
|
|
WARN
Act
|
5.14
(c)
|
(c) Any
singular term in this Agreement shall be deemed to include the plural, and any
plural term the singular. Whenever the words “include,” “includes” or
“including” are used in this Agreement, they shall be deemed followed by the
words “without limitation”, and such terms shall not be limited by enumeration
or example.
ARTICLE
1
TRANSACTIONS
AND TERMS OF MERGER
|
|
1.1
|
Merger.
|
Subject
to the terms and conditions of this Agreement, at the Effective Time, FFC shall
be merged with and into SPAH pursuant to Section 252 of the DGCL and Section
23B.11.070 of the WBCA, with the effects set forth in the DGCL and the WBCA, and
SPAH shall be the Surviving Corporation resulting from the Merger and shall
continue to be governed by the Laws of the State of Delaware and the Bank shall
become a wholly-owned subsidiary of SPAH. The Merger shall be
consummated pursuant to the terms of this Agreement, which has been approved and
adopted by the respective Boards of Directors of SPAH and FFC.
|
|
1.2
|
Time
and Place of Closing.
|
The
closing of the transactions contemplated hereby (the “Closing”) will take
place at 9:00 A.M. Eastern Time on the date that the Effective Time
occurs, or at such other time as the Parties, acting through their authorized
officers, may mutually agree. The Closing shall be held at such
location as may be mutually agreed upon by the Parties and may be effected by
electronic or other transmission of signature pages, as mutually agreed
upon.
|
|
1.3
|
Effective
Time.
|
The
Merger and other transactions contemplated by this Agreement shall become
effective on the date and time stated in the Certificate of Merger reflecting
the Merger to be filed and become effective with the Secretary of State of the
State of Delaware as provided in Section 252 of the DGCL (the “Certificate of
Merger”) and the Articles of Merger reflecting the Merger to be filed and
become effective with the Secretary of State of the State of Washington, as
provided in Sections 23B.11.050 and 23B.11.070 of the WBCA (the “Effective
Time”). Subject to the terms and conditions hereof, unless
otherwise mutually agreed upon in writing by the authorized officers of each
Party, the Parties shall use commercially reasonable efforts to cause the
Effective Time to occur on or before October 10, 2009 and as soon as possible
after the last of the following dates to occur: (i) the effective date
(including expiration of any applicable waiting period) of the last required
Consent of any Regulatory Authority having authority over and approving or
exempting the Merger, and (ii) the date on which the last of the stockholders of
SPAH and FFC approve this Agreement to the extent such approval is required by
applicable Law, and/or the FFC Articles of Incorporation and the SPAH
Certificate of Incorporation.
13
|
|
1.4
|
Assumption
of Liabilities.
|
Effective
as of the Effective Time, the Surviving Corporation shall become and be liable
for all debts, liabilities, obligations and contracts of SPAH as well as those
of FFC, whether the same shall be matured or unmatured; whether accrued,
absolute, contingent or otherwise; and whether or not reflected or reserved
against in the balance sheets, other financial statements, books of account or
records of SPAH or FFC.
|
|
1.5
|
Restructure
of Transaction.
|
SPAH
shall have the right to revise the structure of the Merger contemplated by this
Agreement; provided, however, that no such revision to the structure of the
Merger (i) shall result in any changes in the amount or type of the
consideration which the holders of shares of FFC Common Stock or FFC Rights are
entitled to receive under this Agreement, or (ii) shall impose any less
favorable terms or conditions on the Bank or FFC; provided further, however, no
such revision shall be effective without the prior written consent of
FFC. SPAH may request such consent by giving written notice to FFC in
the manner provided in Section 11.7, which notice shall be in the form of a
proposed amendment to this Agreement or in the form of a proposed Amended and
Restated Agreement and Plan of Merger, and the addition of such other exhibits
hereto as are reasonably necessary or appropriate to effect such
change.
ARTICLE
2
TERMS
OF MERGER
|
|
2.1
|
Charter.
|
The SPAH
Certificate of Incorporation, which shall be further amended and restated in
substantially in the form attached to this Agreement as Exhibit A and
approved by the shareholders of SPAH as contemplated by Section 8.2(a) hereof,
shall be the Certificate of Incorporation of the Surviving Corporation, from and
after the Effective Time, until otherwise duly amended or repealed.
|
|
2.2
|
Bylaws.
|
The
Bylaws of SPAH, substantially in the form attached to this Agreement as Exhibit B, shall be
the Bylaws of the Surviving Corporation, from and after the Effective Time,
until otherwise duly amended or repealed.
|
|
2.3
|
Directors
and Officers.
|
(a) On
or prior to the Effective Time, the Board of Directors of SPAH shall cause the
number of directors that will comprise the full board of directors of SPAH at
the Effective Time to be fixed at five (5), which board shall consist of two (2)
directors designated by SPAH from its current board of directors, both of whom
shall be “independent” under the rules of the national securities exchange on
which the SPAH Common Stock is then listed and under the Exchange Act), two (2)
directors designated by FFC from its current board of directors, which will
consist of ▇▇▇▇▇▇▇ ▇▇▇▇▇ and one (1) other director who shall be “independent”
under the rules of the national securities exchange on which the SPAH Common
Stock is then listed and under the Exchange Act; and one (1) director who will
be ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇, or a designee of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇, which such
director shall serve as the chairman of the Surviving Corporation’s Board of
Directors, all of whom shall serve as the directors of the Surviving Corporation
from and after the Effective Time in accordance with the Surviving Corporation’s
Bylaws, until the earlier of their resignation or removal or otherwise ceasing
to be a director. No other individuals shall be designated to serve on the Board
of Directors of the Surviving Corporation at the Effective Time.
14
(b)
On or prior to the Effective Time, the Board of Directors of SPAH will take all
actions necessary to cause the officers of FFC as of the date of this Agreement
to be elected or appointed as the officers of the Surviving Corporation as of
the Effective Time, all of whom shall serve as the officers of the Surviving
Corporation from and after the Effective Time in accordance with the Surviving
Corporation’s Bylaws, until the earlier of their resignation or removal or
otherwise ceasing to be an officer.
(c) On
or prior to the Effective Time, the Board of Directors of FFC will take all such
actions necessary to (i) cause the number of directors that will comprise the
full board of directors of the Bank at the Effective Time to be fixed at either
seven (7) or five (5); provided that if the number of directors that will
comprise the full board of directors of the Bank is fixed at seven (7), such
board shall consist of ▇▇▇▇ ▇▇▇▇▇▇▇▇ as Chairman, ▇▇▇▇▇▇▇ ▇▇▇▇▇, three (3)
directors designated by SPAH and two (2) other directors designated by FFC;
however, if the number of directors that will comprise the full board of
directors of the Bank is fixed at five (5), such board shall consist of ▇▇▇▇
▇▇▇▇▇▇▇▇ as Chairman, ▇▇▇▇▇▇▇ ▇▇▇▇▇, two (2) directors designated by SPAH and
one (1) other director designated by FFC; all of whom shall serve as the
directors of the Bank from and after the Effective Time in accordance with the
Bank’s Bylaws, until the earlier of their resignation or removal or otherwise
ceasing to be a director and (ii) cause the officers of the Bank as of the date
of this Agreement to continue to serve as the officers of the Bank from and
after the Effective Time in accordance with the Bank’s Bylaws, until the earlier
of their resignation or removal or otherwise ceasing to be an
officer.
(d) The
headquarters of the Surviving Corporation will be located in Everett,
Washington.
ARTICLE
3
MANNER
OF CONVERTING SHARES
|
|
3.1
|
Conversion
of Shares.
|
Subject
to the provisions of this Article 3, at the Effective Time, by virtue of the
Merger and without any action on the part of SPAH, FFC or the stockholders of
either of the foregoing, the shares of the constituent corporations shall be
converted as follows:
15
(a) Each
share of SPAH Common Stock issued and outstanding immediately prior to the
Effective Time, other than those shares as to which conversion rights provided
for in Section C of Article Sixth of the SPAH Certification of Incorporation
(“Conversion
Rights”) have been exercised shall remain issued and outstanding from and
after the Effective Time and be unaffected solely as a result of the
Merger.
(b) Each
share of FFC Common Stock (excluding shares held by SPAH or any FFC Entity
(“Excluded
Shares”), in each case other than in a fiduciary capacity or as a result
of debt previously contracted) issued and outstanding at the Effective Time
shall cease to be outstanding and shall be converted into and exchanged for the
right to receive 0.0530 shares of newly issued SPAH Common Stock and 0.0530
newly issued SPAH Warrants having the same terms and conditions as the publicly
traded SPAH Warrants immediately prior to the Effective Time after giving effect
to the Warrant Amendment Agreement (the “Merger
Consideration”). The 0.0530 multiple used in this Section 3.1(b) is
referred to in this Agreement as the “Exchange
Ratio”.
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|
3.2
|
Anti-Dilution
Provisions.
|
In the
event SPAH changes the number of shares of SPAH Common Stock issued and
outstanding prior to the Effective Time as a result of a stock split, stock
dividend, or similar recapitalization with respect to such stock (specifically
excluding the effect of the exercise of the Conversion Rights) and the record
date therefor (in the case of a stock dividend) or the effective date thereof
(in the case of a stock split or similar recapitalization for which a record
date is not established) shall be prior to the Effective Time, the Exchange
Ratio shall be proportionately adjusted.
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|
3.3
|
Dissenters’
Rights.
|
Any
holder of shares of FFC Common Stock who perfects such holder’s dissenters’
rights in accordance with and as contemplated by Chapter 23B.13 of the
WBCA shall be entitled to receive from the Surviving Corporation, in
lieu of the Merger Consideration, the value of such shares as to which
dissenters’ rights have been perfected in cash as determined pursuant to such
provision of Law; provided, that no such payment shall be made to any dissenting
stockholder unless and until such dissenting stockholder has complied with all
applicable provisions of such Law, and surrendered to FFC the certificate or
certificates representing the shares for which payment is being made (the “Dissenting
Shares”). In the event that after the Effective Time a
dissenting stockholder of FFC fails to perfect, or effectively withdraws or
loses, such dissenters’ rights, SPAH or the Surviving Corporation shall issue
and deliver the consideration to which such holder of shares of FFC Common Stock
is entitled under this Article 3 (without interest) upon surrender by such
holder of the certificate or certificates representing such shares of FFC Common
Stock held by such holder.
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|
3.4
|
Fractional
Shares.
|
No
fraction of a share of SPAH Common Stock or fraction of a SPAH Warrant will be
issued by virtue of the Merger. Instead, each holder of FFC Common
Stock that would otherwise be entitled to a fraction of a share of SPAH Common
Stock or a fraction of a SPAH Warrant shall be permitted to aggregate all
fractional shares of SPAH Common Stock and all fractional SPAH Warrants that
otherwise would be received by such holder and any resulting fractional shares
or fractional SPAH Warrants shall be rounded to the nearest whole share or
nearest whole SPAH Warrant.
16
|
|
3.5
|
Stock
Options and other Stock-Based
Awards.
|
(a) As
of the Effective Time, all outstanding options to purchase shares of FFC Common
Stock granted under the FFC Stock Plans (each, a “FFC Stock Option”),
whether or not then vested, all outstanding shares of FFC Common Stock subject
to vesting or other lapse restrictions pursuant to any of the FFC Stock Plans
(each, a “FFC
Restricted Share”), all outstanding rights of any kind, contingent or
accrued, to receive shares of FFC Common Stock or benefits measured by the value
of a number of shares of FFC Common Stock, and all awards of any kind consisting
of shares of FFC Common Stock, granted under the FFC Stock Plans (other than FFC
Stock Options and FFC Restricted Shares) (each, a “FFC Stock Award”) and
all rights under any provision of the FFC Stock Plans and any other plan,
program or arrangement providing for the issuance or grant of any other interest
in respect of the capital stock of FFC shall be canceled, shall no longer be
outstanding and shall automatically cease to exist, and each holder of a FFC
Stock Option, a FFC Restricted Share or a FFC Stock Award shall cease to have
any rights with respect thereto. FFC shall take all such actions as
are necessary to ensure that, as of and after the Effective Time, no Person
shall have any right under the FFC Stock Plans or any other plan, program,
agreement or arrangement with respect to securities of FFC, the Surviving
Corporation or any subsidiary thereof.
(b) At
or before the Effective Time, FFC shall cause to be effected any necessary
amendments to the FFC Stock Plans and any other resolutions, letters, consents,
notices or other documents or instruments, in such form reasonably acceptable to
SPAH, as may be required under the FFC Stock Plans or any FFC Stock Options, FFC
Restricted Shares or FFC Stock Awards to give effect to the foregoing provisions
of this Section 3.5.
ARTICLE
4
EXCHANGE
OF SHARES
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|
4.1
|
Exchange
Procedures.
|
(a) As
soon as reasonably practicable after the Effective Time, SPAH shall cause the
exchange agent selected by SPAH, which shall be an independent transfer agent or
trust company (the “Exchange Agent”) to
mail to the former stockholders of FFC appropriate transmittal materials (which
shall specify that delivery shall be effected, and risk of loss and title to the
certificates or other instruments theretofore representing shares of FFC Common
Stock shall pass, only upon proper delivery of such certificates to the Exchange
Agent). The certificate or certificates of FFC Common Stock so
surrendered shall be duly endorsed as the Exchange Agent may reasonably
require. In the event of a transfer of ownership of shares of FFC
Common Stock represented by certificates that are not registered in the transfer
records of FFC, the Merger Consideration payable for such shares as provided in
Section 3.1 may be issued to a transferee if the certificates representing such
shares are delivered to the Exchange Agent, accompanied by all documents
required to evidence such transfer and by evidence reasonably satisfactory to
the Exchange Agent that such transfer is proper and that any applicable stock
transfer Taxes have been paid. In the event any certificate
representing FFC Common Stock certificate shall have been lost, stolen or
destroyed, upon the making of an affidavit of that fact by the person claiming
such certificate to be lost, stolen or destroyed and the posting by such person
of a bond in such amount as SPAH may reasonably direct, or an indemnification
agreement reasonably acceptable to SPAH, as indemnity against any claim that may
be made against it with respect to such certificate, the Exchange Agent shall
issue in exchange for such lost, stolen or destroyed certificate the Merger
Consideration as provided for in Section 3.1. The Exchange Agent may
establish such other reasonable and customary rules and procedures in connection
with its duties as it may deem appropriate. SPAH shall pay all
charges and expenses, including those of the Exchange Agent in connection with
the distribution of the Merger Consideration as provided in Section
3.1.
17
(b) After
the Effective Time, each holder of shares of FFC Common Stock (other than
Excluded Shares and Dissenting Shares) issued and outstanding at the Effective
Time shall surrender the Certificate or Certificates representing such shares to
the Exchange Agent and shall promptly upon surrender thereof receive in exchange
therefore the consideration provided in Section 3.1, without interest, pursuant
to this Section 4.1. SPAH shall not be obligated to deliver the
consideration to which any former holder of FFC Common Stock is entitled as a
result of the Merger until such holder surrenders such holder’s Certificate or
Certificates for exchange as provided in this Section 4.1. Any other
provision of this Agreement notwithstanding, neither SPAH, nor any FFC Entity,
nor the Exchange Agent shall be liable to any holder of FFC Common Stock or to
any holder of FFC Rights for any amounts paid or properly delivered in good
faith to a public official pursuant to any applicable abandoned property,
escheat or similar Law.
(c) Each
of SPAH and the Exchange Agent shall be entitled to deduct and withhold from the
consideration otherwise payable pursuant to this Agreement to any holder of
shares of FFC Common Stock such amounts, if any, as it is required to deduct and
withhold with respect to the making of such payment under the Code or any
provision of state, local or foreign Tax Law or by any Taxing Authority or
Governmental Authority. To the extent that any amounts are so
withheld by SPAH, the Surviving Corporation or the Exchange Agent, as the case
may be, such withheld amounts shall be treated for all purposes of this
Agreement as having been paid to the holder of the shares of FFC Common Stock or
FFC Rights, as applicable in respect of which such deduction and withholding was
made by SPAH, the Surviving Corporation or the Exchange Agent, as the case may
be.
(d) Adoption
of this Agreement by the stockholders of FFC shall constitute ratification of
the appointment of the Exchange Agent.
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|
4.2
|
Rights
of Former FFC Stockholders.
|
At the
Effective Time, the stock transfer books of FFC shall be closed as to holders of
FFC Common Stock and no transfer of FFC Common Stock by any holder of such
shares shall thereafter be made or recognized. Until surrendered for
exchange in accordance with the provisions of Section 4.1, each Certificate
theretofore representing shares of FFC Common Stock (other than certificates
representing Excluded Shares and Dissenting Shares), shall from and after the
Effective Time represent for all purposes only the right to receive the Merger
Consideration, without interest, as provided in Article 3.
18
ARTICLE
5
REPRESENTATIONS
AND WARRANTIES OF FFC
FFC
represents and warrants to SPAH, except as set forth on the Schedules hereto,
with respect to each such Section below as follows:
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|
5.1
|
Organization,
Standing, and Power.
|
FFC is a
corporation duly organized, validly existing, and in good standing under the
Laws of the State of Washington and is a bank holding company within the meaning
of the Bank Holding Company Act of 1956 (the “BHCA”) and, except as
disclosed in Schedule 5.13(d), in good standing with the Federal
Reserve. The Bank is a state chartered bank, duly organized and
validly existing under the laws of the State of Washington and possesses all
necessary branch approvals issued by the Regulatory Authorities to engage in the
commercial banking business at the offices in which such business is
conducted. Each of FFC and the Bank has the corporate power and
authority to carry on its business as now conducted and to own, lease and
operate its Assets. Each of FFC and the Bank is duly qualified or
licensed to transact business as a foreign corporation in good standing in the
states of the United States and foreign jurisdictions where the character of its
Assets or the nature or conduct of its business requires it to be so qualified
or licensed, except for such jurisdictions in which the failure to be so
qualified or licensed is not reasonably likely to have, individually or in the
aggregate, a FFC Material Adverse Effect. The minute books and other
organizational documents for each of FFC and the Bank have been made available
to SPAH for its review and, except as disclosed in Schedule 5.1, are true and
complete in all material respects as in effect as of the date of this Agreement
and accurately reflect in all material respects all amendments thereto and all
proceedings of the respective Board of Directors (including any committees of
the Board of Directors) and stockholders thereof.
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|
5.2
|
Authority
of FFC; No Breach By the Agreement.
|
(a) FFC
has the corporate power and authority necessary to execute, deliver and perform
its obligations under this Agreement and to consummate the transactions
contemplated hereby. The execution, delivery and performance of this
Agreement and the transactions contemplated herein, including the Merger, have
been duly and validly authorized by all necessary corporate action in respect
thereof on the part of FFC, subject to the approval of this Agreement and the
consummation of the transactions contemplated hereby, by the holders of a
two-thirds of the outstanding shares of FFC Common Stock entitled to be voted at
the FFC Stockholders Meeting (except in all cases as such enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, receivership,
conservatorship, moratorium, or similar Laws affecting the enforcement of
creditors’ rights generally and except that the availability of the equitable
remedy of specific performance or injunctive relief is subject to the discretion
of the court before which any proceeding may be brought), which is the only FFC
stockholder vote required for approval of this Agreement and consummation of the
Merger. Subject to such requisite stockholder approval, this
Agreement represents a legal, valid, and binding obligation of FFC, enforceable
against FFC in accordance with its terms.
19
(b) Neither
the execution and delivery of this Agreement by FFC, nor the consummation by FFC
of the transactions contemplated hereby, nor compliance by FFC with any of the
provisions hereof, will (i) conflict with or result in a breach of any provision
of FFC’s Articles of Incorporation or Bylaws or the charter, certificate of
incorporation or articles of association or incorporation, as the case may be,
or bylaws of any FFC Subsidiary or any resolution adopted by the Board of
Directors or the stockholders of any FFC Entity, or (ii) except as disclosed in
Schedule 5.2, constitute or result in a Default under, or require any Consent
pursuant to, or result in the creation of any Lien on any Asset of any FFC
Entity under, any FFC Contract or Permit of any FFC Entity or, (iii) subject to
receipt of the requisite Consents referred to in Section 8.4, constitute or
result in a material Default under, or require any Consent pursuant to, any Law
or Order applicable to any FFC Entity or any of their respective material
Assets.
(c) Other
than in connection or compliance with the provisions of the Securities Laws and
applicable state corporate and securities Laws and the rules of the NASDAQ, and
other than Consents required from Regulatory Authorities, other than notices to
or filings with the Internal Revenue Service (“IRS”), and other than
Consents, filings, or notifications which, if not obtained or made, are not
reasonably likely to have, individually or in the aggregate, a FFC Material
Adverse Effect, no notice to, filing with, or Consent of, any Governmental
Authority is necessary for the consummation by FFC of the Merger and the other
transactions contemplated in this Agreement.
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|
5.3
|
Capital
Stock.
|
(a) The
authorized capital stock of FFC consists of 100,000,000 shares of FFC Common
Stock and 10,000,000 shares of preferred stock, of which 47,131,853 shares of
FFC Common Stock are issued and outstanding as of the date of this Agreement and
no shares of preferred stock are issued and outstanding as of the date of this
Agreement, and, assuming that all of the issued and outstanding FFC Rights had
been exercised, not more than 47,131,853 shares would be issued and outstanding
at the Effective Time. All of the issued and outstanding shares of
capital stock of FFC are duly and validly issued and outstanding and are fully
paid and nonassessable under the WBCA. None of the outstanding shares
of capital stock of FFC have been issued in violation of any preemptive rights
of the current or past stockholders of FFC.
(b) Except
for the 5,688,665 shares of FFC Common Stock reserved for issuance pursuant to
outstanding FFC Rights, each as disclosed in Schedule 5.3, there are no shares
of capital stock or other equity securities of FFC reserved for issuance and no
outstanding Rights relating to the capital stock of FFC.
(c) Except
as specifically set forth in this Section 5.3, there are no shares of FFC
capital stock or other equity securities of FFC outstanding and there are no
outstanding Rights with respect to any FFC securities or any right or privilege
(whether pre-emptive or contractual) capable of becoming a Contract or Right for
the purchase, subscription, exchange or issuance of any securities of
FFC.
20
|
|
5.4
|
FFC
Subsidiaries.
|
Schedule
5.4 lists each of the FFC Subsidiaries that is a corporation (identifying its
jurisdiction of incorporation, each jurisdiction in which it is qualified or
licensed to transact business, and the number of shares owned and percentage
ownership interest represented by such share ownership) and each of the FFC
Subsidiaries that is a general or limited partnership, limited liability
company, or other non-corporate entity (identifying the form of organization and
the Law under which such entity is organized, each jurisdiction in which it is
qualified and/or licensed to transact business, and the amount and nature of the
ownership interest therein). Except as disclosed in Schedule 5.4, FFC
owns, directly or indirectly, all of the issued and outstanding shares of
capital stock (or other equity interests) of each FFC Subsidiary. No
capital stock (or other equity interest) of any FFC Subsidiary is or may become
required to be issued (other than to another FFC Entity) by reason of any
Rights, and there are no Contracts by which any FFC Subsidiary is bound to issue
(other than to another FFC Entity) additional shares of its capital stock (or
other equity interests) or Rights or by which any FFC Entity is or may be bound
to transfer any shares of the capital stock (or other equity interests) of any
FFC Subsidiary (other than to another FFC Entity). There are no
Contracts relating to the rights of any FFC Entity to vote or to dispose of any
shares of the capital stock (or other equity interests) of any FFC
Subsidiary. All of the shares of capital stock (or other equity
interests) of each FFC Subsidiary held by a FFC Entity are fully paid and
nonassessable and are owned directly or indirectly by such FFC Entity free and
clear of any Lien. Except as disclosed in Schedule 5.4, each FFC
Subsidiary is a national bank, state chartered bank, corporation, limited
liability company, limited partnership or limited liability partnership, and
each such FFC Subsidiary is duly organized, validly existing, and in good
standing under the Laws of the jurisdiction in which it is incorporated or
organized, and has the corporate or entity power and authority necessary for it
to own, lease, and operate its Assets and to carry on its business as now
conducted. Each FFC Subsidiary is duly qualified or licensed to
transact business as a foreign entity in good standing in the United States or
the states of the United States and foreign jurisdictions where the character of
its Assets or the nature or conduct of its business requires it to be so
qualified or licensed, except for such jurisdictions in which the failure to be
so qualified or licensed is not reasonably likely to have individually or in the
aggregate, a FFC Material Adverse Effect. The Bank is an “insured
institution” as defined in the Federal Deposit Insurance Act and applicable
regulations thereunder, and the deposits held by the Bank are insured by the
FDIC’s Deposit Insurance Fund. The minute books and other
organizational documents for each FFC Subsidiary have been made available to
SPAH for its review, and, except as disclosed in Schedule 5.4, are true and
complete in all material respects as in effect as of the date of this Agreement
and accurately reflect in all material respects all amendments thereto and all
proceedings of the Board of Directors and stockholders thereof.
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|
5.5
|
Exchange
Act Filings; Securities Offerings; Financial
Statements.
|
Except as
disclosed in Schedule 5.5:
(a) FFC
has timely filed and made available to SPAH all Exchange Act Documents required
to be filed by FFC since January 1, 2006, (together with all such Exchange Act
Documents filed, whether or not required to be filed, the “FFC Exchange Act
Reports”). The FFC Exchange Act Reports (i) at the time filed,
complied in all material respects with the applicable requirements of the
Securities Laws and other applicable Laws and (ii) did not, at the time they
were filed (or, if amended or superseded by a filing prior to the date of this
Agreement, then on the date of such amended or subsequent filing or, in the case
of registration statements, at the effective date thereof) contain any untrue
statement of a material fact or omit to state a material fact required to be
stated in such FFC Exchange Act Reports or necessary in order to make the
statements in such FFC Exchange Act Reports, in light of the circumstances under
which they were made, not misleading. Each offering or sale of
securities by FFC (i) was either registered under the Securities Act or made
pursuant to a valid exemption from registration, (ii) complied in all material
respects with the applicable requirements of the Securities Laws and other
applicable Laws, and (iii) was made pursuant to offering documents which did
not, at the time of the offering (or, in the case of registration statements, at
the effective date thereof) contain any untrue statement of a material fact or
omit to state a material fact required to be stated in the offering documents or
necessary in order to make the statements in such documents not
misleading. FFC has delivered or made available to SPAH all comment
letters received since January 1, 2006, by FFC from the staffs of the SEC and
the Washington State Department of Financial Institutions and all responses to
such comment letters by or on behalf of FFC with respect to all filings under
the Securities Laws and the Securities Act of Washington. FFC’s
principal executive officer and principal financial officer (and FFC’s former
principal executive officers and principal financial officers, as applicable)
have made the certifications required by Sections 302 and 906 of the
▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act and the rules and regulations of the Exchange Act thereunder
with respect to FFC’s Exchange Act Documents to the extent such rules or
regulations applied at the time of the filing. For purposes of the
preceding sentence, “principal executive officer” and “principal financial
officer” shall have the meanings given to such terms in the Sarbanes–Oxley
Act. Such certifications contain no qualifications or exceptions to
the matters certified therein and have not been modified or withdrawn; and
neither FFC nor any of its officers has received notice from any Regulatory
Authority questioning or challenging the accuracy, completeness, content, form
or manner of filing or submission of such certifications. No FFC
Subsidiary is required to file any Exchange Act Documents.
21
(b) Each
of the FFC Financial Statements (including, in each case, any related notes)
that are contained in the FFC Exchange Act Reports, including any FFC Exchange
Act Reports filed after the date of this Agreement until the Effective Time,
complied, or will comply, as to form in all material respects with
the applicable published rules and regulations of the SEC with respect thereto,
was prepared in accordance with GAAP applied on a consistent basis throughout
the periods involved (except as may be indicated in the notes to such financial
statements or, in the case of unaudited interim statements, as permitted by Form
10-Q of the Exchange Act), and fairly presented in all material respects, the
consolidated financial position of FFC and its Subsidiaries as at the respective
dates and the consolidated results of operations and cash flows for the periods
indicated, including the fair values of the assets and liabilities shown
therein, except that the unaudited interim financial statements were or are
subject to normal and recurring year-end adjustments which were not or are not
expected to be material in amount or effect, and were certified to the extent
required by the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act.
(c) Each
of FFC’s independent public accountants, which have expressed their opinion with
respect to the financial statements of FFC and its Subsidiaries whether or not
included in FFC’s Exchange Act Reports (including the related notes), is and
have been throughout the periods covered by such financial statements,
independent registered public accounting firms with respect to FFC within the
meaning of the Securities Laws and is registered with the Public Company
Accounting Oversight Board. With respect to FFC, FFC’s independent
public accountants are not and have not been in violation of auditor
independence requirements of the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act and the rules and
regulations promulgated in connection therewith. None of the
non-audit services performed by FFC’s independent public accountants for FFC and
its Subsidiaries were prohibited services under the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act and all
such services were pre-approved in advance by FFC’s audit committee in
accordance with the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act.
22
(d) FFC
maintains disclosure controls and procedures required by Rule 13a-15(b) or
15d-15(b) under the Exchange Act; such controls and procedures are effective to
ensure that all material information concerning FFC and its Subsidiaries is made
known on a timely basis to the principal executive officer and the principal
financial officer. FFC has delivered to SPAH copies of, all written
descriptions of, and all policies, manuals and other documents promulgating such
disclosure controls and procedures. FFC and its directors and
executive officers have complied at all times with Section 16(a) of the Exchange
Act, including the filing requirements thereunder to the extent
applicable.
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|
5.6
|
Absence
of Undisclosed Liabilities.
|
No FFC
Entity has any Liabilities required under GAAP to be set forth on a consolidated
balance sheet or in the notes thereto that are not set forth therein and are
reasonably likely to have, individually or in the aggregate, a FFC Material
Adverse Effect, except Liabilities which are (i) accrued or reserved against in
the consolidated balance sheets of FFC as of December 31, 2008 and June 30,
2009, included in the FFC Financial Statements delivered or made available prior
to the date of this Agreement or reflected in the notes thereto, (ii) incurred
or paid in the ordinary course of business consistent with past practices, or
(iii) incurred in connection with the transactions contemplated by this
Agreement. Schedule 5.6 lists and FFC has attached and delivered to
SPAH copies of the documentation creating or governing, all securitization
transactions and “off-balance sheet arrangements” (as defined in Item
303(a)(4)(ii) of Regulation S-K of the Exchange Act), if any, effected by FFC or
its Subsidiaries. Except as disclosed in Schedule 5.6, no FFC Entity
is directly or indirectly liable, by guarantee, indemnity, or otherwise, upon or
with respect to, or obligated, by discount or repurchase agreement or in any
other way, to provide funds in respect to, or obligated to guarantee or assume
any Liability of any Person for any amount. Except (x) as reflected
in FFC’s balance sheet at June 30, 2009 or liabilities described in any notes
thereto (or liabilities for which neither accrual nor footnote disclosure is
required pursuant to GAAP or any applicable Regulatory Authority) or (y) for
liabilities incurred in the ordinary course of business since June 30, 2009
consistent with past practice or in connection with this Agreement or the
transactions contemplated hereby, neither FFC nor any of its Subsidiaries has
any Material Liabilities or obligations of any nature.
|
|
5.7
|
Absence
of Certain Changes or Events.
|
(a) Since
June 30, 2009, except as disclosed in the FFC Financial Statements delivered or
made available prior to the date of this Agreement or as disclosed in Schedule
5.7(a), (i) there have been no events, changes, or occurrences which have had,
or are reasonably likely to have, individually or in the aggregate, a FFC
Material Adverse Effect, and (ii) none of the FFC Entities has taken any action,
or failed to take any action, prior to the date of this Agreement, which action
or failure, if taken after the date of this Agreement, would represent or result
in a material breach or violation of any of the covenants and agreements of FFC
provided in this Agreement.
23
(b) Since
June 30, 2009, none of the FFC Entities have issued, transferred, sold,
encumbered or pledged the FFC Common Stock, membership interests, shares of or
other securities (including securities convertible into or exchangeable for, or
options or rights to acquire, shares of FFC Common Stock or other securities) of
any FFC Entity.
(c) Since
June 30, 2009, except as disclosed in Schedule 5.7(c), none of the FFC Entities
have entered into or amended any (i) employment agreements or any other
type of employment arrangements, (ii) severance or change of control agreements
or arrangements, or (iii) deferred compensation agreements or
arrangements.
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|
5.8
|
Tax
Matters.
|
Except as
disclosed in Schedule 5.8:
(a) All
FFC Entities have timely filed with the appropriate Taxing Authorities, all Tax
Returns (or extensions for the filings thereof) in all jurisdictions in which
Tax Returns are required to be filed, and such Tax Returns are correct and
complete in all respects. All Taxes of the FFC Entities (whether or
not shown on any Tax Return) have been fully and timely paid. There
are no Liens for any Taxes (other than a Lien for current real property or ad
valorem Taxes not yet due and payable) on any of the Assets of any of the FFC
Entities. No claim has ever been made by a Taxing Authority in a
jurisdiction where any FFC Entity does not file a Tax Return that such FFC
Entity may be subject to Taxes by that jurisdiction.
(b) None
of the FFC Entities has received any notice of assessment or proposed assessment
in connection with any Taxes, and there are no threatened or pending disputes,
claims, audits or examinations regarding any Taxes of any FFC Entity or the
Assets of any FFC Entity. No FFC Entity has Knowledge that any Taxing
Authority is reasonably likely to assess any additional Taxes for any period for
which Tax Returns have been filed. No issue has been raised by a
Taxing Authority in any prior examination of any FFC Entity which, by
application of the same or similar principles, could be expected to result in a
proposed deficiency for any subsequent taxable period. None of the
FFC Entities has waived any statute of limitations in respect of any Taxes or
agreed to a Tax assessment or deficiency.
(c) Each
FFC Entity has complied with all applicable Laws, rules and regulations relating
to the withholding of Taxes and the payment thereof to appropriate authorities,
including Taxes required to have been withheld and paid in connection with
amounts paid or owing to any employee or independent contractor, and Taxes
required to be withheld and paid pursuant to Sections 1441 and 1442 of the Code
or similar provisions under foreign Law.
(d) The
unpaid Taxes of each FFC Entity (i) did not, as of the most recent fiscal month
end, exceed the reserve for Tax Liability (other than any reserve for deferred
Taxes established to reflect timing differences between book and Tax income) set
forth on the face of the most recent balance sheet (other than in any notes
thereto) for such FFC Entity and (ii) do not exceed that reserve as adjusted for
the passage of time through the Closing Date in accordance with past custom and
practice of the FFC Entities in filing their Tax Returns.
24
(e) Except
as described in Schedule 5.8(e), none of the FFC Entities is a party to any Tax
allocation or sharing agreement and no FFC Entity has been a member of an
affiliated group filing a consolidated federal income Tax Return or has any Tax
Liability of any Person under Treasury Regulation Section 1.1502-6 or any
similar provision of state, local or foreign Law, or as a transferee or
successor, by contract or otherwise.
(f) During
the five-year period ending on the date hereof, none of the FFC Entities was a
“distributing corporation” or a “controlled corporation” as defined in, and in a
transaction intended to be governed by Section 355 of the Code.
(g) Except
as disclosed in Schedule 5.8(g), none of the FFC Entities has made any payments,
is obligated to make any payments, or is a party to any contract that could
obligate it to make any payments that could be disallowed as a deduction under
Section 280G or 162(m) of the Code, or which would be subject to withholding
under Section 4999 of the Code. FFC has not been a United States real
property holding corporation within the meaning of Section 897(c)(1)(A)(ii) of
the Code. None of the FFC Entities has been, nor any of the FFC
Entities or SPAH will be, required to include any adjustment in taxable income
for any Tax period (or portion thereof) pursuant to Section 481 of the Code or
any comparable provision under state or foreign Tax Laws as a result of
transactions or events occurring prior to the Closing. None of the
FFC Entities nor SPAH will be required to include in its gross income for a
taxable period after the Closing Date any income or gain attributable to the FFC
Entities as a result of any cash or property received, or an account receivable
that arose, in a taxable period prior to the Closing Date and that was not
recognized prior to the Closing Date, as a result of the installment method, the
completed contract method, Section 263A of the Code or for any other
reason. Any net operating losses of the FFC Entities disclosed in
Schedule 5.8(g) are not subject to any limitation on their use under the
provisions of Sections 382 or 269 of the Code or any other provisions of the
Code or the Treasury Regulations dealing with the utilization of net operating
losses other than any such limitations as may arise as a result of the
consummation of the transactions contemplated by this Agreement.
(h) Each
of the FFC Entities is in compliance with, and its records contain all
information and documents (including properly completed IRS Forms W-9) necessary
to comply with, all applicable information reporting and Tax withholding
requirements under federal, state, and local Tax Laws, and such records identify
with specificity all accounts subject to backup withholding under Section 3406
of the Code.
(i) No
FFC Entity is subject to any private letter ruling of the IRS or comparable
rulings of any Taxing Authority.
(j) No
property owned by any FFC Entity is (i) property required to be treated as being
owned by another Person pursuant to the provisions of Section 168(f)(8) of the
Internal Revenue Code of 1954, as amended and in effect immediately prior to the
enactment of the Tax Reform Act of 1986, (ii) “tax-exempt use property” within
the meaning of Section 168(h)(1) of the Code, (iii) “tax-exempt bond financed
property” within the meaning of Section 168(g) of the Code, (iv) “limited use
property” within the meaning of Rev. Proc. 76-30, (v) subject to Section
168(g)(1)(A) of the Code, or (vi) subject to any provision of state, local or
foreign Law comparable to any of the provisions listed above.
25
(k) No
FFC Entity has any “corporate acquisition indebtedness” within the meaning of
Section 279 of the Code.
(l) No
FFC Entity has participated in any reportable transaction, as defined in
Treasury Regulation Section 1.6011-4(b)(1), or a transaction substantially
similar to a reportable transaction.
(m) No
FFC Entity nor any other Person on its behalf has (i) filed a consent pursuant
to Section 341(f) of the Code (as in effect prior to the repeal under the Jobs
and Growth Tax Reconciliation Act of 2003) or agreed to have Section 341(f)(2)
of the Code (as in effect prior to the repeal under the Jobs and Growth Tax
Reconciliation Act of 2003) apply to any disposition of a subsection (f) asset
(as such term is defined in Section 341(f)(4) of the Code) owned by any FFC
Entities, (ii) executed or entered into a closing agreement pursuant to Section
7121 of the Code or any similar provision of Law with respect to the FFC
Entities, or (iii) granted to any Person any power of attorney that is currently
in force with respect to any Tax matter.
(n) No
FFC Entity (i) has engaged in any “intercompany transactions” in respect of
which gain was and continues to be deferred pursuant to Treasury Regulations
Section 1.1502-13 or any analogous or similar provision of Law; (ii) has any
“excess loss accounts” in respect to the stock of any Subsidiary pursuant to
Treasury Regulations Section 1.1502-19, or any analogous or similar provision of
Law; or (iii) has a “dual consolidated loss”, within the meaning of Treasury
Regulations Section 1.1503-2.
(o) No
FFC Entity has, or ever had, a permanent establishment in any country other than
the United States, or has engaged in a trade or business in any country other
than the United States that subjected it to tax in such country.
For
purposes of this Section 5.8, any reference to FFC or any FFC Entity shall be
deemed to include any Person which merged with or was liquidated into or
otherwise combined with FFC or a FFC Entity.
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5.9
|
Allowance
for Possible Loan Losses; Loan and Investment Portfolio,
etc.
|
(a) FFC’s
allowance for loan losses (the “Allowance”) shown on
the balance sheets of FFC included in the most recent FFC Financial Statements
dated prior to the date of this Agreement was, and the Allowance shown on the
balance sheets of FFC included in the FFC Financial Statements as of dates
subsequent to the execution of this Agreement will be, as of the dates thereof,
adequate (within the meaning of GAAP and applicable regulatory requirements or
guidelines) to provide for all known or reasonably anticipated losses relating
to or inherent in the loan portfolios (including accrued interest receivables,
letters of credit, and commitments to make loans or extend credit) by the FFC
Entities as of the dates thereof. To FFC’s Knowledge, FFC Financial
Statements fairly present the fair market values of all loans, leases,
securities, tangible and intangible assets and liabilities, and any impairments
thereof.
26
(b) As
of the date hereof, all loans, discounts and financing leases (in which any FFC
Entity is lessor) reflected on the FFC Financial Statements were, and with
respect to the consolidated balance sheets delivered as of the dates subsequent
to the execution of this Agreement will be as of the dates thereof, (i) at the
time and under the circumstances in which made, made for good, valuable and
adequate consideration in the ordinary course of business and are the legal and
binding obligations of the obligors thereof, (ii) evidenced by genuine notes,
agreements or other evidences of indebtedness and (iii) to the extent secured,
have been secured, to the Knowledge of FFC, by valid liens and security
interests which have been perfected. Accurate lists of all loans,
discounts and financing leases as of June 30, 2009 and on a monthly basis
thereafter, and of the investment portfolios of each FFC Entity as of such date,
have been and will be delivered to SPAH. Except as specifically set
forth in Schedule 5.9(b), neither FFC nor the Bank is a Party to any written or
oral loan agreement, note or borrowing arrangement, including any loan guaranty,
that was, as of the most recent month-end (i) delinquent by more than 30 days in
the payment of principal or interest, (ii) to the Knowledge of FFC, otherwise in
material default for more than 30 days, (iii) placed on nonaccrual status, or
classified as “substandard,” “doubtful,” “loss,” “other assets especially
mentioned” or any comparable classification by FFC or by any applicable
Regulatory Authority, (iv) an obligation of any director, executive officer
principal shareholder (as such terms are defined in Regulation O) of any FFC
Entity who is subject to Regulation O, or any person, corporation or enterprise
controlling, controlled by or under common control with any of the foregoing, or
(v) in violation of any Law.
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5.10
|
Assets.
|
(a) Except
as disclosed in Schedule 5.10, or as disclosed or reserved against in the FFC
Financial Statements delivered or made available prior to the date of this
Agreement, the FFC Entities have good and (to the extent owned) marketable
title, free and clear of all Liens, to all of their respective
Assets. All tangible properties used in the businesses of the FFC
Entities are in good condition, reasonable wear and tear excepted, and are
usable in the ordinary course of business consistent with FFC’s past
practices.
(b) All
Assets which are material to FFC’s business on a consolidated basis, held under
leases or subleases by any of the FFC Entities, are held under valid Contracts
enforceable in accordance with their respective terms, and each such Contract is
in full force and effect.
(c) The
FFC Entities currently maintain insurance, including bankers’ blanket bonds,
with insurers of recognized financial responsibility, similar in amounts, scope,
and coverage to that maintained by other peer organizations. Except
as disclosed in Schedule 5.10(c), none of the FFC Entities have received written
notice from any insurance carrier, or have any reason to believe that (i) any
policy of insurance will be canceled or that coverage thereunder will be reduced
or eliminated, (ii) premium costs with respect to such policies of insurance
will be substantially increased, or (iii) similar coverage will be denied or
limited or not extended or renewed with respect to any FFC Entity, any act or
occurrence, or that any Asset, officer, director, employee or agent of any FFC
Entity will not be covered by such insurance or bond. There are
presently no claims for amounts exceeding $125,000 individually or in the
aggregate pending under such policies of insurance or bonds, and no notices of
claims in excess of such amounts have been given by any FFC Entity under such
policies. FFC has made no claims, and except as disclosed in Schedule
5.10(c), no claims are contemplated to be made, under its directors’ and
officers’ errors and omissions or other insurance or bankers’ blanket
bond.
27
(d) The
Assets of the FFC Entities include all Assets required by FFC Entities to
operate the business of the FFC Entities as presently conducted.
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5.11
|
Intellectual
Property.
|
Except as
disclosed in Schedule 5.11, each FFC Entity owns or has a license to use all of
the Intellectual Property used by such FFC Entity in the course of its business,
including sufficient rights in each copy possessed by each FFC
Entity. Each FFC Entity is the owner of or has a license, with the
right to sublicense, to any Intellectual Property sold or licensed to a third
party by such FFC Entity in connection with such FFC Entity’s business
operations, and such FFC Entity has the right to convey by sale or license any
Intellectual Property so conveyed. No FFC Entity is in Default under
any of its Intellectual Property licenses. No proceedings have been
instituted, or are pending or to the Knowledge of FFC threatened, which
challenge the rights of any FFC Entity with respect to Intellectual Property
used, sold or licensed by such FFC Entity in the course of its business, nor has
any person claimed or alleged any rights to such Intellectual
Property. To FFC’s Knowledge, the conduct of the business of the FFC
Entities does not infringe any Intellectual Property of any other
person. No FFC Entity is obligated to pay any recurring royalties to
any Person with respect to any such Intellectual Property. FFC has no
Contracts with any of its directors, officers, or employees which require such
officer, director or employee to assign any interest in any Intellectual
Property to a FFC Entity and to keep confidential any trade secrets, proprietary
data, customer information, or other business information of a FFC Entity, and
to FFC’s Knowledge, no such officer, director or employee is party to any
Contract with any Person other than a FFC Entity which requires such officer,
director or employee to assign any interest in any Intellectual Property to any
Person other than a FFC Entity or to keep confidential any trade secrets,
proprietary data, customer information, or other business information of any
Person other than a FFC Entity. No officer, director or employee of
any FFC Entity is party to any confidentiality, nonsolicitation, noncompetition
or other Contract which restricts or prohibits such officer, director or
employee from engaging in activities competitive with any Person, including any
FFC Entity.
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5.12
|
Environmental
Matters.
|
(a) FFC
has delivered, or caused to be delivered to SPAH, true and complete copies of,
all environmental site assessments, test results, analytical data, boring logs,
permits for storm water, wetlands fill, or other environmental permits for
construction of any building, parking lot or other improvement, and other
environmental reports and studies in the possession of any FFC Entity relating
to the Participation Facilities, Operating Properties, OREOs, or any other FFC
Real Property of any FFC Entity. To FFC’s Knowledge, there are no
material violations of Environmental Laws on properties that secure loans made
by any FFC Entity.
28
(b) To
FFC’s Knowledge, the Participation Facilities, Operating Properties, OREOs and
other FFC Real Property of any FFC Entity is, and have been, in compliance with
all Environmental Laws, except for violations which are not reasonably likely to
have, individually or in the aggregate, a FFC Material Adverse
Effect.
(c) There
is no Litigation pending, or to FFC’s Knowledge, no environmental enforcement
action, investigation, or litigation threatened before any Governmental
Authority or other forum in which any FFC Entity or any of their Operating
Properties, Participation Facilities, OREOs, or any other FFC Real Property, has
been or, with respect to threatened Litigation, may be named as a defendant (i)
for alleged noncompliance (including by any predecessor) with or Liability under
any Environmental Law or (ii) relating to the release, discharge, spillage, or
disposal into the environment of any Hazardous Material, whether or not
occurring at, on, under, adjacent to, or affecting (or potentially affecting) a
site currently or formerly owned, leased, or operated by any FFC Entity or any
of their Operating Properties, Participation Facilities, OREOs, or
any other FFC Real Property, nor is there any reasonable basis for any
litigation as described in this Section 5.12(c), except as such is not
reasonably likely to have, individually or in the aggregate, a FFC Material
Adverse Effect.
(d) During
the period of (i) any FFC Entity’s ownership, lease or operation of any current
FFC Real Property, (ii) any FFC Entity’s participation in the management of any
Participation Facility, or (iii) any FFC Entity’s holding of a security interest
in any Participation Facility or any other FFC Real Property, there have been no
releases, discharges, spillages, or disposals of Hazardous Material in, on,
under, or to FFC’s Knowledge adjacent to or affecting (or potentially
affecting), such properties. Prior to the period of (i) any FFC
Entity’s ownership, lease or operation of any of any current FFC Real Property,
(ii) any FFC Entity’s participation in the management of any Participation
Facility, or (iii) any FFC Entity’s holding of a security interest in any
Participation Facility or any other FFC Real Property, to FFC’s Knowledge, there
were no releases, discharges, spillages, or disposals of Hazardous Material in,
on, under, or affecting any such property, Participation Facility, Operating
Property, OREO or FFC Real Property. During and, to FFC’s Knowledge
prior to, the period of (i) FFC Entity’s ownership, lease or operation of any
current FFC Real Property, (ii) any FFC Entity’s participation in the management
of any Participation Facility, or (iii) any FFC Entity’s holding of a security
interest in any Participation Facility or any other FFC Real Property, there
have been no violations of any Environmental Laws at such property or facility,
including unauthorized alterations of wetlands.
(e) Except
as disclosed in Schedule 5.12(e), no FFC Real Property (a) is listed or proposed
for listing on the National Priorities List pursuant to the Comprehensive
Environmental Response, Compensation and Liability Act, 42. U.S.C. § 9601
et seq., or any similar inventory of sites maintained by any state or locality,
or (b) contains any underground storage tanks.
(f) To
FFC’s Knowledge, no conditions exist at any FFC Real Property that require, or
that with the giving of notice or the passage of time or both will reasonably
likely require, in any material respect, any remedial or corrective action,
removal, monitoring or closure pursuant to any Environmental
Law.
29
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|
5.13
|
Compliance
with Laws.
|
(a) FFC
is a bank holding company duly registered and in good standing as such with the
Federal Reserve, except as disclosed in Schedule 5.13(d). The Bank is
chartered by the State of Washington and is validly existing, and its deposits
are insured by the FDIC.
(b) Except
as disclosed in Schedule 5.13(d), each of the FFC Entities has in effect all
Permits and has made all filings, applications, and registrations with
Governmental Authorities that are required for it to own, lease, or operate its
assets and to carry on its business as now conducted, and there has occurred no
Default under any such Permit applicable to their respective businesses or
employees conducting their respective businesses.
(c) Except
as disclosed in Schedule 5.13(d), none of the FFC Entities is in Default under
any Laws or Orders (not including Environmental Laws) applicable to its business
or employees conducting its business.
(d) Except
as disclosed in Schedule 5.13(d), since January 1, 2004, none of the FFC
Entities has received any notification or communication from any Governmental
Authority (i) asserting that FFC or any of its Subsidiaries is in Default under
any of the Permits, Laws or Orders (not including Environmental Laws) which such
Governmental Authority enforces, (ii) threatening to revoke any Permits (not
including those relating to environmental matters set forth in Section 5.12 of
this Agreement), or (iii) requiring FFC or any of its Subsidiaries (x) to enter
into or consent to the issuance of a cease and desist order, formal agreement,
directive, commitment, or memorandum of understanding (not including those
relating to environmental matters set forth in Section 5.12 of this Agreement),
or (y) to adopt any resolution of its Board of Directors or similar undertaking
which restricts materially the conduct of its business or in any manner relates
to its employment decisions, its employment or safety policies or practices (not
including those relating to environmental matters set forth in Section 5.12 of
this Agreement).
(e) Except
as disclosed in Schedule 5.13(d), (i) each FFC Entity has conducted its
operations in all material respects in compliance with all Requirements of Law;
and (ii) there are no (A) unresolved violations, criticisms, or exceptions by
any Governmental Authority with respect to any report or statement relating to
any examinations or inspections of FFC or any of its Subsidiaries (not including
those relating to environmental matters set forth in Section 5.12 of this
Agreement) or (B) notices or correspondence received by FFC and FFC does not
reasonably expect to receive any notices or correspondence with respect to
formal or informal inquiries by, or disagreements or disputes with, any
Governmental Authority (not including those relating to environmental matters
set forth in Section 5.12 of this Agreement) with respect to FFC’s or any of
FFC’s Subsidiaries’ business, operations, policies or procedures since January
1, 2006. Except as disclosed in Schedule 5.13(d), there are not any
pending or, to FFC’s Knowledge, threatened investigations or reviews of FFC or
any of its Subsidiaries on behalf of any Governmental Authority, nor has any
Governmental Authority indicated an intention to conduct any investigations or
reviews of FFC or any of its Subsidiaries.
(f) None
of the FFC Entities nor any of its directors, officers, employees or
Representatives acting on its behalf has offered, paid, or agreed to pay any
Person, including any Governmental Authority, directly or indirectly, anything
of value for the purpose of, or with the intent of obtaining or retaining any
business in violation of applicable Laws, including (i) using any corporate
funds for any unlawful contribution, gift, entertainment or other unlawful
expense relating to political activity, (ii) making any direct or indirect
unlawful payment to any foreign or domestic government official or employee from
corporate funds, (iii) violating any provision of the Foreign Corrupt Practices
Act of 1977, as amended, or (iv) making any bribe, rebate, payoff, influence
payment, kickback or other unlawful payment.
30
(g) Each
FFC Entity has complied with all Requirements of Law under the Bank Secrecy Act
and the USA Patriot Act and applicable regulations promulgated thereunder, and
each FFC Entity has timely filed all reports of suspicious activity, including
those required under 12 C.F.R. Part 353.
(h) The
Bank has complied and will comply with all Requirements of Law governing and
regulating the closing of branch offices of the Bank.
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5.14
|
Labor
Relations.
|
(a) No
FFC Entity is the subject of any Litigation asserting that it or any other FFC
Entity has committed an unfair labor practice (within the meaning of the
National Labor Relations Act of 1935, as amended, or comparable state Law) or
other violation of state or federal labor Law or seeking to compel it or any
other FFC Entity to bargain with any labor organization or other employee
representative as to wages or conditions of employment, nor is any FFC Entity
Party to any collective bargaining agreement or subject to any bargaining order,
injunction or other Order relating to FFC’s relationship or dealings with its
employees, any labor organization or any other employee
representative. There is no strike, slowdown, lockout or other job
action or labor dispute involving any FFC Entity pending or threatened and there
have been no such actions or disputes in the past five years. To
FFC’s Knowledge, there has not been any attempt by any FFC Entity employees or
any labor organization or other employee representative to organize or certify a
collective bargaining unit or to engage in any other union organization activity
with respect to the workforce of any FFC Entity. Except as disclosed
in Schedule 5.14, employment of each employee and the engagement of each
independent contractor of each FFC Entity is terminable at will by the relevant
FFC Entity without (i) any penalty, liability or severance obligation incurred
by any FFC Entity, (ii) and in all cases without prior consent by any
Governmental Authority. No FFC Entity will owe any amounts to any of
its employees or independent contractors as of the Closing Date, including any
amounts incurred for any wages, bonuses, vacation pay, sick leave, contract
notice periods, change of control payments or severance obligations, except as
disclosed in Schedule 5.14. The term “FFC Benefit Plan” shall include
any and all of the FFC Stock Plans and any and all grants, options, rights and
other matters associated therewith.
(b) To
FFC’s Knowledge, all of the employees employed in the United States are either
United States citizens or are legally entitled to work in the United States
under the Immigration Reform and Control Act of 1986, as amended, other United
States immigration Laws and the Laws related to the employment of non-United
States citizens applicable in the state in which the employees are
employed.
31
(c) No
FFC Entity has effectuated (i) a “plant closing” (as defined in the Worker
Adjustment and Retraining Notification Act (the “WARN Act”)) affecting
any site of employment or one or more facilities or operating units within any
site of employment or facility of any FFC Entity; or (ii) a “mass layoff” (as
defined in the WARN Act) affecting any site of employment or facility of any FFC
Entity; and no FFC Entity has been affected by any transaction or engaged in
layoffs or employment terminations sufficient in number to trigger application
of any similar state or local Law. None of any FFC Entity’s employees
has suffered an “employment loss” (as defined in the WARN Act) since six months
prior to the Closing Date.
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5.15
|
Employee
Benefit Plans.
|
(a) FFC
has listed in Schedule 5.15(a)(i), and has delivered or made available to SPAH
prior to the execution of this Agreement copies of, (i) each Employee Benefit
Plan currently adopted, maintained by, sponsored in whole or in part by, or
contributed or required to be contributed to by any FFC Entity or ERISA
Affiliate thereof for the benefit of employees, former employees, retirees,
dependents, spouses, directors, independent contractors, or other beneficiaries
or under which employees, retirees, former employees, dependents, spouses,
directors, independent contractors, or other beneficiaries are eligible to
participate (each, a “FFC Benefit Plan,”
and collectively, the “FFC Benefit Plans”)
and (ii) has listed in Schedule 5.15(a)(ii), each Employee Benefit Plan that is
not identified in (i) above (e.g., former Employee Benefit Plans) in respect of
which any FFC Entity or ERISA Affiliate thereof has or reasonably could have any
obligation or Liability (each, an “Other
Plan”). Any of the FFC Benefit Plans which is an “employee
pension benefit plan,” as that term is defined in ERISA Section 3(2), is
referred to herein as a “FFC ERISA Plan.” No FFC ERISA Plan or Other Plan is a
“defined benefit plan” (as defined in Code Section 414(j)), or is subject to
Code Section 412 (and for plan years commencing after December 31, 2007, Code
Sections 430 and 436) or Title IV of ERISA.
(b) FFC
has delivered or made available to SPAH prior to the execution of this Agreement
(i) all trust agreements or other funding arrangements for all Employee Benefit
Plans, (ii) all determination letters, rulings, opinion letters, information
letters or advisory opinions issued by the IRS, the United States Department of
Labor (“DOL”)
during this calendar year or any of the preceding three calendar years, (iii)
any filing or documentation (whether or not filed with the IRS) where corrective
action was taken in connection with the IRS EPCRS program set forth in Revenue
Procedure 2008-50 (or its predecessor or successor rulings), (iv) annual reports
or returns, audited or unaudited financial statements, actuarial reports and
valuations prepared for any Employee Benefit Plan for the current plan year and
the three preceding plan years, and (v) the most recent summary plan
descriptions and any material modifications thereto.
(c) Each
FFC Benefit Plan is in compliance with the terms of such FFC Benefit Plan, in
compliance with the applicable requirements of the Code, in compliance with the
applicable requirements of ERISA, and in compliance with any other applicable
Laws including, with respect to any group health plans, the HIPAA privacy and
security rules. Each FFC ERISA Plan which is intended to be qualified
under Section 401(a) of the Code has received a favorable determination letter
or opinion from the IRS that is as current as possible under applicable IRS
procedures and that is still in effect and applies to the applicable FFC ERISA
Plan as amended and as administered or, within the time permitted under Code
Section 401(b), has timely applied for a favorable determination letter, which
when issued, will be as current as possible under applicable IRS procedures and
which, when issued, will apply retroactively to the FFC ERISA Plan as amended
and as administered. FFC is not aware of any circumstances likely to
result in revocation of any such favorable determination letter, which has been
issued by the IRS, and FFC is not aware of any circumstances likely to result in
a failure to issue any such favorable determination letter for which it has
applied. FFC has not received any communication (written or
unwritten) from any Governmental Authority questioning or challenging the
compliance of any FFC Benefit Plan with applicable Laws. No FFC
Benefit Plan is currently being audited by any Governmental Authority for
compliance with applicable Laws or has been audited with a determination by any
Governmental Authority that the Employee Benefit Plan failed to comply with
applicable Laws. Neither FFC nor any ERISA Affiliate has entered into
a transaction described in ERISA Sections 4069 or 4212(c).
32
(d) To
FFC’s Knowledge, there has been no oral or written representation or
communication with respect to any aspect of any FFC Benefit Plan made to any
employee of any FFC Entity which is not in accordance with the written or
otherwise preexisting terms and provisions of such plans. Neither FFC
nor any administrator or fiduciary of any FFC Benefit Plan (or any agent of any
of the foregoing) has engaged in any transaction, or acted or failed to act in
any manner, which could subject SPAH or any FFC Entity to any direct or indirect
Liability (by indemnity or otherwise) for breach of any fiduciary, co-fiduciary
or other duty under ERISA. There are no unresolved claims or disputes
under the terms of, or in connection with, any FFC Benefit Plan other than
claims for benefits which are payable in the ordinary course of business and no
action, proceeding, prosecution, inquiry, hearing or investigation has been
commenced with respect to any FFC Benefit Plan.
(e) All
FFC Benefit Plan documents and annual reports or returns, audited or unaudited
financial statements, actuarial valuations, summary annual reports, and summary
plan descriptions issued with respect to the FFC Benefit Plans are correct and
complete in all material respects, have been timely filed with the IRS or the
DOL (to the extent required by Law), and distributed to participants of any or
all of the FFC Benefit Plans (as required by Law), and there have been no
changes in the information set forth therein.
(f) To
FFC’s Knowledge, no “party in interest” (as defined in ERISA Section 3(14)) or
“disqualified person” (as defined in Code Section 4975(e)(2)) of any FFC Benefit
Plan has engaged in any nonexempt “prohibited transaction” (described in Code
Section 4975(c) or ERISA Section 406).
(g) No
FFC Entity has, or ever has had, any Liability related to, a pension plan or any
other plan that is or was subject to Code Section 412 (and for plan years
commencing after December 31, 2007, Code Sections 430 and 436) or
ERISA Section 302 or Title IV of ERISA. There is no Lien nor is there
expected to be a Lien under Code Section 430(k) or ERISA Section 303(k) or Tax
under Code Section 4971 applicable to any FFC Entity or any FFC Entity’s
Assets. All premiums required to be paid under ERISA Section 4006, if
any, have been timely paid by FFC and by each of its ERISA
Affiliates. For plan years beginning after December 31, 2007, any
Employee Benefit Plan subject to Code Section 412 has complied with Code
Sections 430 and 436.
33
(h) No
Liability under Title IV of ERISA has been or is expected to be incurred by any
FFC Entity or any ERISA Affiliate thereof and no event has occurred that could
reasonably result in Liability under Title IV of ERISA being incurred by any FFC
Entity or any ERISA Affiliate thereof with respect to any ongoing, frozen,
terminated or other single-employer plan. There has been no
“reportable event,” within the meaning of ERISA Section 4043, for which the
30-day reporting requirement has not been waived by any ongoing, frozen,
terminated or other single employer plan of any FFC Entity or of any ERISA
Affiliate thereof.
(i) Except
as disclosed in Schedule 5.15(i), no FFC Entity has any Liability for retiree or
similar health, life or death benefits under any of the FFC Benefit Plans, or
other plan or arrangement, except to the extent required under Part 6 of Title I
of ERISA or Code Section 4980B and there are no restrictions on the rights of
such FFC Entity to amend or terminate any such retiree health or benefit plan
without incurring any Liability thereunder. No Tax under Code
Sections 4980B or 5000 has been incurred with respect to any FFC Benefit Plan,
or other plan or arrangement, and no circumstance exists which could give rise
to such Taxes.
(j) Except
as disclosed in Schedule 5.15(j), neither the execution and delivery of this
Agreement nor the consummation of the transactions contemplated hereby will (i)
result in any payment (including severance, unemployment compensation, golden
parachute, or otherwise) becoming due to any director, officer or employee of
any FFC Entity from any FFC Entity under any FFC Benefit Plan or otherwise, (ii)
increase any benefits otherwise payable under any FFC Benefit Plan, or (iii)
result in any acceleration of the time of payment or vesting of any such
benefit, or any benefit under any life insurance owned by any FFC Entity or the
rights of any FFC Entity in, to or under any insurance on the life of any
current or former officer, director or employee of any FFC Entity, or change any
rights or obligations of any FFC Entity with respect to such
insurance.
(k) The
actuarial present values of all accrued deferred compensation entitlements
(including entitlements under any executive compensation, supplemental
retirement, or employment agreement) of employees and former employees of any
FFC Entity and their respective beneficiaries, other than entitlements accrued
pursuant to funded retirement plans, whether or not subject to the provisions of
Code Section 412 or ERISA Section 302, have been fully reflected on the FFC
Financial Statements to the extent required by and in accordance with
GAAP.
(l) All
individuals who render services to any FFC Entity and who are eligible to
participate in a FFC Benefit Plan pursuant to the terms of such FFC Benefit Plan
are in fact eligible to and authorized to participate in such FFC Benefit Plan
in accordance with the terms of such FFC Benefit Plan, the Code, ERISA and other
applicable Laws.
(m) Neither
FFC nor any ERISA Affiliate thereof has had an “obligation to contribute” (as
defined in ERISA Section 4212) to, or other obligations or Liability in
connection with, a “multiemployer plan” (as defined in ERISA Sections 4001(a)(3)
or 3(37)(A)).
(n) Except
as disclosed in Schedule 5.15(n), there are no payments or changes in terms due
to any insured person as a result of this Agreement, the Merger or the
transactions contemplated herein, under any bank-owned, corporate-owned split
dollar life insurance, other life insurance, or similar arrangement or Contract,
and the Surviving Corporation shall, upon and after the Effective Time, succeed
to and have all the rights in, to and under such life insurance Contracts as FFC
presently holds. Each FFC Entity will, upon the execution and
delivery of this Agreement, and will continue to have, notwithstanding this
Agreement or the consummation of the transaction contemplated hereby, all
ownership rights and interest in all corporate or bank-owned life
insurance.
34
(o) Except
as disclosed in Schedule 5.15(o), no FFC Benefit Plan holds any employer
security (within the meaning of ERISA Section 407(d)(1)) or employer real
property (within the meaning of ERISA Section 407(d)(2)); and no commitment has
been made that would require any FFC Benefit Plan to hold any such employer
security or employer real property.
(p) All
contributions and premiums required by applicable Law or the terms of an
applicable FFC Benefit Plan to be paid prior to Closing have been or will be
timely made or paid in full prior to the Closing.
(q) There
has been no act or omission which has given rise to or may give rise to material
fines, penalties, taxes or related charges under Sections 502(c), 502(i),
502(l), 502(m) or 4071 of ERISA or Chapters 43, 47 or 68 of the Code for which
any of the FFC Entities or any ERISA Affiliate thereof may be
liable.
(r) No
action has been or reasonably ought to be taken to correct any defects with
respect to any FFC Benefit Plan under any IRS correction procedure or any United
States Department of Labor fiduciary correction procedure.
(s) No
payment permitted, contemplated or required by any FFC Benefit Plan would in the
aggregate constitute excess parachute payments as defined in Section 280G of the
Code (without regard to subsection (b)(4) thereof).
(t) Each
FFC Benefit Plan which constitutes a “group health plan” (as defined in ERISA
Section 607(1) or Code Section 4980B(g)(2)) has been operated in material
compliance with applicable Law.
(u) There
has been no act or omission that would impair or otherwise limit the right or
ability of FFC or the Bank, as may be applicable, to unilaterally amend, from
time to time, or terminate, any FFC Benefit Plan in those instances where such
may be unilaterally amended or terminated.
(v) Each
FFC Benefit Plan which is subject to Code Section 409A has been operated and
administered in compliance with and otherwise complies with such
section. No tax, interest or penalty has been assessed or incurred
pursuant to Code Section 409A in relation to any FFC Benefit Plan. No
stock option, stock appreciation right, stock grant, or other equity-related
rights, grants or options associated with any FFC Entity, including the FFC
Stock Plans and all grants, options, rights or other matters associated with the
FFC Stock Plans, is subject to or required to comply with any provision of Code
Section 409A. Any FFC Benefit Plan and any other requirement to which
FFC or any ERISA Affiliate is a party, which is subject to or required to comply
with any provision of Code Section 409A is listed in Schedule
5.15(v).
35
|
|
5.16
|
Material
Contracts.
|
(a) Except
as disclosed in Schedule 5.16(a), or otherwise reflected in the FFC Financial
Statements, none of the FFC Entities, nor any of their respective Assets,
businesses, or operations, is a party to, or is bound or affected by, or
receives benefits under, (i) any employment, severance, termination, consulting,
or retirement Contract providing for aggregate payments to any Person in any
calendar year in excess of $200,000, (ii) any Contract relating to the borrowing
of money by any FFC Entity or the guarantee by any FFC Entity of any such
obligation (other than Contracts evidencing the creation of deposit liabilities,
purchases of federal funds, advances from the Federal Reserve Bank or Federal
Home Loan Bank, entry into repurchase agreements fully secured by
U.S. government securities or U.S. government agency
securities, advances of depository institution Subsidiaries incurred in the
ordinary course of FFC’s business and trade payables and Contracts relating to
borrowings or guarantees made in the ordinary course of FFC’s business), (iii)
any Contract which prohibits or restricts any FFC Entity or any personnel of a
FFC Entity from engaging in any business activities in any geographic area, line
of business or otherwise in competition with any other Person, (iv) any Contract
involving Intellectual Property (other than Contracts entered into in the
ordinary course with customers or “shrink-wrap” software licenses), (v) any
Contract relating to the provision of data processing, network communication, or
other technical services to or by any FFC Entity, (vi) any Contract relating to
the purchase or sale of any goods or services (other than Contracts entered into
in the ordinary course of business and involving payments under any individual
Contract or series of contracts not in excess of $200,000), (vii) any
exchange-traded or over-the-counter swap, forward, future, option, cap, floor,
or collar financial Contract, or any other interest rate or foreign currency
protection Contract or any Contract that is a combination thereof not included
on its balance sheet, (viii) any Contract relating to the purchase, sale or
lease of real property by or from any FFC Entity and (ix) any other Contract or
amendment thereto that would be required to be filed as an exhibit to a FFC
Exchange Act Report filed by FFC with the SEC prior to the date of this
Agreement that has not been filed as an exhibit to a FFC Exchange Act Report
(Contracts referred to in clauses (i) through (ix) of this Section 5.16(a),
together with all Contracts referred to in Sections 5.11 and 5.15(a), the “FFC
Contracts”). A true, correct and complete copy of each FFC
Contract has been filed as an exhibit to an Exchange Act Document, furnished or
made available to SPAH as of the date hereof.
(b) With
respect to each FFC Contract and except as disclosed in Schedule 5.16(b): (i)
the Contract is in full force and effect; (ii) no FFC Entity is in Default
thereunder; (iii) no FFC Entity has repudiated or waived any material provision
of any such Contract; (iv) no other Party to any such Contract is, to FFC’s
Knowledge, in Default in any respect or has repudiated or waived each material
provision thereunder; (v) no consent is required by a Contract for the
execution, delivery, or performance of this Agreement, the consummation of the
Merger or the other transactions contemplated hereby; and (vi) no consent of any
party to such Contract is required in connection with an assignment thereof to
SPAH by operation of law or otherwise. All of the indebtedness of any
FFC Entity for money borrowed is prepayable at any time by such FFC Entity
without penalty, premium or charge, except as specified in Schedule
5.16(b).
36
|
|
5.17
|
Properties
and Leases.
|
(a) Except
as set forth on Schedule 5.17(a)(i) and except for any lien for current taxes
not yet delinquent, FFC and each FFC Subsidiary have good marketable fee simple
(with respect to real property) title free and clear of any material Liens,
claims, charges, options, covenants, encumbrances or restrictions to all the
real and personal property reflected in FFC’s consolidated balance sheet as of
December 31, 2008 included in FFC's Annual Report on Form 10-K for the
period then ended, and all real and personal property acquired since such date,
except such real and personal property as has been disposed of in the ordinary
course of business. Schedule 5.17(a)(ii) sets forth a true, correct and complete
list of, and describes briefly, all real property and interests in real
property, including improvements thereon and easements appurtenant thereto owned
in fee by any FFC Entity (the “Owned Real
Property”), with such properties categorized as Participation Facilities,
Operating Properties or OREO.
(b) All
leases of real property pursuant to which such real property is leased by or
from any FFC Entity (the “Leased Real
Property”) and all leases of personal property and all other leases
material to any FFC Entity, are valid and effective in accordance with their
respective terms, and there is not, under any such lease, any material existing
default by any party thereto or any event which, with notice or lapse of time or
both, would constitute such a material default. Substantially all FFC's and each
FFC Subsidiary's owned and leased buildings and equipment have been well
maintained and are in good and serviceable condition, reasonable wear and tear
excepted, for their current use.
(c) Schedule
5.17(c) sets forth a true, correct and complete list of all existing leases,
subleases, licenses or other occupancy agreements or contracts (collectively
“Lease Agreements”) to which any FFC Entity is a party or by which any FFC
Entity is bound, and all
amendments, modifications, extensions
and supplements thereto, regardless of whether
the terms thereof have commenced; and such schedule sets forth, with respect to
each lease, (i) the name of the parties thereto, (ii) the space demised, (iii)
the monthly fixed rent and the date through which it has been paid, (iv) the
unapplied amount of the security deposit (if any), (v)
the expiration date, and (vi) any arrears of rents or
other payments and the amount thereof. A true, correct and
complete copy of each Lease Agreement has been furnished or made available to
SPAH as of the date hereof.
(d) The
current use and operation of all FFC Real Property does not violate in any
material respect any restrictions, covenants, agreements or Law (including
applicable zoning restrictions and ordinances, variances thereto, or conditional
use permits of the jurisdictions on which the FFC Real Property is located,
health and fire codes and ordinances, and subdivision regulations affecting any
of such property) affecting such FFC Real Property and no FFC Entity is in
default of the payment of any common area maintenance or similar payments or
reimbursements.
(e) There
are no condemnation or eminent domain proceedings affecting any FFC Real
Property.
37
|
|
5.18
|
Privacy
of Customer Information.
|
(a) Each
FFC Entity is the sole owner of all (i) “nonpublic personal information” as such
term is defined in the Privacy Requirements, and (ii) any personally
identifiable information or records in any form (oral, written, graphic,
electronic, machine-readable, or otherwise) (“Customer
Information”) relating to customers, former customers and prospective
customers.
(b) Each
of the FFC Entities has at all times implemented and maintained reasonable
technical, physical and organizational security measures as are appropriate in
the circumstances to protect Customer Information against unauthorized or
unlawful processing, access, input, disclosure, use, recording, copying,
alteration, removal, deletion, accidental loss, corruption, destruction or
damage, including:
(i) firewalls,
intrusion detection systems, locking file cabinets, and other appropriate
physical and electronic security mechanism, including current revisions of all
software releases and all software patches;
(ii) utilization
of industry-standard or better network access control restrictions and methods
of terminating unauthorized network access, including identification to the
extent possible of the identify of the Person making such unauthorized access;
and
(iii) not
making changes that would increase the risk of unauthorized access to FFC’s
network.
|
|
5.19
|
Legal
Proceedings.
|
Except as
disclosed in Schedule 5.19 and Schedule 5.13(d), there is no Litigation
instituted or pending, or, to the Knowledge of FFC, threatened (or unasserted
but considered probable of assertion) against any FFC Entity, or against any
director, officer, employee or agent of any FFC Entity in their capacities as
such or with respect to any service to or on behalf of any Employee Benefit Plan
or any other Person at the request of the FFC Entity or Employee Benefit Plan of
any FFC Entity, or against any Asset, interest, or right of any of them, nor are
there any Orders or judgments outstanding against any FFC Entity, except as
disclosed in Schedule 5.13(d). Except as disclosed in Schedule 5.19,
no claim for indemnity has been made or, to FFC’s Knowledge, threatened by any
director, officer, employee, independent contractor or agent to any FFC Entity
and to FFC’s Knowledge, no basis for any such claim exists.
|
|
5.20
|
Reports.
|
Except as
disclosed in Schedule 5.20, since January 1, 2006, in addition to the FFC
Exchange Act Reports, each FFC Entity has timely filed all other reports and
statements, together with any amendments required to be made with respect
thereto, that it was required to file with Governmental
Authorities. As of their respective dates, each of such reports and
documents, including the financial statements, exhibits, and schedules thereto,
complied in all material respects with all applicable Laws. As of
their respective date, each such report, statement and document did not contain
any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements made therein,
in light of the circumstances under which they were made, not
misleading.
38
|
|
5.21
|
Books
and Records.
|
FFC and
each FFC Entity maintains accurate books and records reflecting its Assets and
Liabilities and maintains proper and adequate internal accounting controls which
provide assurance that (a) transactions are executed with management’s
authorization; (b) transactions are recorded as necessary to permit preparation
of the consolidated financial statements of FFC and to maintain accountability
for FFC’s consolidated Assets; (c) access to FFC’s Assets is permitted only in
accordance with management’s authorization; (d) the reporting of FFC’s Assets is
compared with existing Assets at regular intervals; and (e) accounts, notes and
other receivables and inventory are recorded accurately, and proper and adequate
procedures are implemented to effect the collection thereof on a current and
timely basis.
|
|
5.22
|
Loans
to Executive Officers, Directors and Principal
Shareholders.
|
Neither
FFC nor the Bank has extended or maintained credit, arranged for the extension
of credit, or renewed an extension of credit, in the form of a personal loan to
or for any director, executive officer or principal shareholder (as
such terms are defined in Regulation O) of FFC, except as permitted by and in
conformance with Federal Reserve Regulation O. Schedule 5.22 lists or
otherwise identifies any loan or extension of credit maintained by FFC to which
the second sentence of Section 13(k)(1) of the Exchange Act
applies.
|
|
5.23
|
Independence
of Directors.
|
FFC’s
directors listed on Schedule 5.23, who may be serving on the Board of Directors
of the Surviving Corporation after the Closing Date and who are designated as
independent on Schedule 5.23, will be “independent” directors of the Surviving
Corporation as such term is defined in the rules of the national securities
exchange on which the SPAH Common Stock is then listed and in Rule 10A-3 of the
Exchange Act.
|
|
5.24
|
Fiduciary
Activities.
|
FFC and
each FFC Subsidiary has properly administered in all respects material and which
could reasonably be expected to be material, to the financial condition of FFC
and the FFC Subsidiaries taken as a whole all accounts for which it acts as a
fiduciary, including accounts for which it serves as a trustee, agent,
custodian, personal representative, guardian, conservator or investment advisor,
in accordance with the terms of the governing documents and applicable state and
federal law and regulation and common law. Neither FFC, any FFC
Subsidiary, nor any director, officer or employee of FFC or any FFC Subsidiary
has committed any breach of trust with respect to any such fiduciary account
which is material to, or could reasonably be expected to be material to, the
financial condition of FFC and the FFC Subsidiaries taken as a whole, and the
accountings for each such fiduciary account are true and correct in all material
respects and accurately reflect the assets of such fiduciary
account.
39
|
|
5.25
|
Tax
and Regulatory Matters; Consents.
|
None of
the FFC Entities or any Affiliate thereof has taken or agreed to take any action
or has any Knowledge of any fact or circumstance that is reasonably likely to
(i) prevent the Merger from qualifying as a reorganization within the meaning of
Section 368(a) of the Code, or (ii) materially impede or delay receipt of any
required Consents or result in the imposition of a condition or restriction of
the type referred to in the last sentence of Section 9.1(b) and
9.1(c).
|
|
5.26
|
State
Takeover Laws.
|
Each FFC
Entity has taken all necessary action to exempt the transactions contemplated by
this Agreement from, or if necessary to challenge the validity or applicability
of, any applicable “moratorium,” “fair price,” “business combination,” “control
share,” or other anti-takeover Laws (collectively, “Takeover
Laws”).
|
|
5.27
|
Stockholders’
Support Agreements.
|
Each of
the directors and executive officers of FFC and the Bank, and each stockholder
beneficially owning 5% or more of FFC’s outstanding equity securities (other
than Barclay’s Global Investors, State Street Bank and Trust Company and other
institutional investors) has executed and delivered to SPAH a support agreement
in the form of Exhibit
C attached hereto (each a “Support Agreement”).
|
|
5.28
|
Brokers
and Finders; Opinion of Financial
Advisor.
|
Except
for Sandler ▇’▇▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, neither FFC nor its Subsidiaries, or any
of their respective officers, directors, employees or Representatives, has
employed any broker, finder or investment banker or incurred any Liability for
any financial advisory fees, investment bankers fees, brokerage fees,
commissions, or finder’s or other fees in connection with this Agreement or the
transactions contemplated hereby and such total fees payable to Sandler ▇’▇▇▇▇▇
and ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ in connection with the Merger will not exceed
$10,820,000. FFC has received the written opinion of ▇▇▇▇▇ ▇▇▇▇▇▇▇▇,
dated as of the date of this Agreement, to the effect that the Merger
Consideration is fair from a financial point of view, a signed copy of which has
been delivered to SPAH.
|
|
5.29
|
No
Participation In TARP.
|
No FFC
Entity participates or has a pending application to participate in the U.S.
Treasury Department’s Troubled Asset Relief Program, including the Capital
Purchase Program.
|
|
5.30
|
Board
Recommendation.
|
The Board
of Directors of FFC, at a meeting duly called and held, has by unanimous vote of
the directors present who constituted all of the directors then in office (i)
determined that this Agreement and the transactions contemplated hereby,
including the Merger, the Support Agreements, the Lock-up Agreements and the
transactions contemplated hereby and thereby, taken together, are in the best
interests of the FFC’s stockholders and (ii) resolved, subject to the terms of
this Agreement, to recommend that the holders of the shares of FFC Common Stock
approve this Agreement, the Merger and the related transactions and to call and
hold a special meeting of FFC’s stockholders to consider this Agreement, the
Merger and the related transactions.
40
|
|
5.31
|
Statements
True and Correct.
|
(a) No
statement, certificate, instrument or other writing furnished or to be furnished
by any FFC Entity or any Affiliate thereof to SPAH pursuant to this Agreement or
any other document, agreement or instrument referred to herein contains or will
contain any untrue statement of material fact or will omit to state a material
fact necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading.
(b) None
of the information supplied or to be supplied by any FFC Entity or any Affiliate
thereof for inclusion in the Registration Statement to be filed by SPAH with the
SEC will, when the Registration Statement becomes effective, be false or
misleading with respect to any material fact, or omit to state any material fact
necessary to make the statements therein not misleading.
(c) None
of the information supplied or to be supplied by the FFC Entity or any Affiliate
thereof for inclusion in the Joint Proxy Statement, and any amendments or
supplements thereto, to be mailed to each Party’s stockholders in connection
with the Stockholders Meetings will (i) when first mailed to the stockholders of
each Party, be false or misleading with respect to any material fact, or omit to
state any material fact necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading, or, (ii) at the
time of the Stockholders Meetings, be false or misleading with respect to any
material fact, or omit to state any material fact necessary to correct any
statement in any earlier communication, in light of the circumstances under
which they were made, not misleading with respect to the solicitation of any
proxy for the Stockholders Meetings. No other documents to be filed
by any FFC Entity or any Affiliate thereof with the SEC or any other Regulatory
Authority in connection with the transactions contemplated hereby, will, at the
respective time such documents are filed, be false or misleading with respect to
any material fact, or omit to state any material fact necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading.
(d) All
documents that any FFC Entity or any Affiliate thereof is responsible for filing
with any Governmental Authority in connection with the transactions contemplated
hereby will comply as to form in all material respects with the provisions of
applicable Law.
|
|
5.32
|
Approvals.
|
As of the
date of this Agreement, except as disclosed in Schedule 5.13(d), no FFC Entity
has any Knowledge of any reason why all Consents from any Regulatory Authority
or Governmental Authority required for the consummation of the transactions
contemplated by this Agreement (including the Merger) should not be obtained on
a timely basis or conditioned or restricted in a manner (including requirements
relating to the raising of additional capital or the disposition of Assets)
which in the reasonable judgment of the Board of Directors of FFC or the Bank
would so materially adversely affect the economic or business benefits of the
transactions contemplated by this Agreement that, had such condition or
requirement been known to SPAH, SPAH would not, in its reasonable judgment, have
entered into this Agreement.
41
ARTICLE
6
REPRESENTATIONS
AND WARRANTIES OF SPAH
SPAH
hereby represents and warrants to FFC as follows:
|
|
6.1
|
Organization,
Standing, and Power.
|
SPAH is a
corporation duly organized, validly existing, and in good standing under the
Laws of the State of Delaware, and has the corporate power and authority to
carry on its business as now conducted and to own, lease and operate its
Assets. SPAH is duly qualified or licensed to transact business as a
foreign corporation in good standing in the states of the United States and
foreign jurisdictions where the character of its Assets or the nature or conduct
of its business requires it to be so qualified or licensed, except for such
jurisdictions in which the failure to be so qualified or licensed is not
reasonably likely to have, individually or in the aggregate, a SPAH Material
Adverse Effect. Except as set forth on Schedule 6.1, the minute books
and other organizational documents for SPAH have been made available to FFC for
its review and are true and complete in all material respects as in effect as of
the date of this Agreement and accurately reflect in all material respects all
amendments thereto and all proceedings of the SPAH Board of Directors (including
any committees of the Board of Directors) and stockholders thereof.
|
|
6.2
|
Authority;
No Breach By the Agreement.
|
(a) SPAH
has the corporate power and authority necessary to execute, deliver and perform
its obligations under this Agreement and to consummate the transactions
contemplated hereby. The execution, delivery and performance of this
Agreement and the consummation of the transactions contemplated herein,
including the Merger, have been duly and validly authorized by all necessary
corporate action in respect thereof on the part of SPAH, subject to the SPAH
Stockholder Approval and the SPAH Warrantholder Approval. Subject to
any necessary approvals referred to in Article 8, this Agreement represents a
legal, valid, and binding obligation of SPAH, enforceable against SPAH in
accordance with its terms (except in all cases as such enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, receivership,
conservatorship, moratorium, or similar Laws affecting the enforcement of
creditors’ rights generally and except that the availability of the equitable
remedy of specific performance or injunctive relief is subject to the discretion
of the court before which any proceeding may be brought).
(b) Except
as set forth on Schedule 6.2, neither the execution and delivery of this
Agreement by SPAH, nor the consummation by SPAH of the transactions contemplated
hereby, nor compliance by SPAH with any of the provisions hereof, will (i)
conflict with or result in a breach of any provision of SPAH’s Certificate of
Incorporation or Bylaws, or (ii) constitute or result in a Default under, or
require any Consent pursuant to, or result in the creation of any Lien on any
Asset of SPAH under, any SPAH Contract or Permit of SPAH, or, (iii) subject to
receipt of the requisite Consents referred to in Section 9.1(b), constitute or
result in a material Default under, or require any Consent pursuant to, any Law
or Order applicable to SPAH or any of its material Assets.
42
(c) Other
than in connection or compliance with the provisions of the Securities Laws,
applicable state corporate and securities Laws and the rules of NYSE Amex and
other than Consents required from Regulatory Authorities, and other than notices
to or filings with the IRS and other than Consents, filings, or notifications
which, if not obtained or made, are not reasonably likely to have, individually
or in the aggregate, a SPAH Material Adverse Effect, no notice to, filing with,
or Consent of, any Governmental Authority is necessary for the consummation by
SPAH of the Merger and the other transactions contemplated in this
Agreement.
|
|
6.3
|
Capital
Stock.
|
(a) The
authorized capital stock of SPAH consists of (i) 200,000,000 shares of SPAH
Common Stock, of which 54,112,000 shares are issued and outstanding as of the
date of this Agreement (which includes 12,986,879 shares subject to Conversion
Rights), and (ii) 1,000,000 shares of SPAH preferred stock, none of which are
issued and outstanding as of the date of this Agreement. All of the
issued and outstanding shares of the capital stock of SPAH are, and all of the
shares of SPAH Common Stock to be issued in exchange for shares of FFC Common
Stock upon consummation of the Merger, when issued in accordance with the terms
of this Agreement, will be, duly and validly issued and outstanding and fully
paid and nonassessable under the DGCL. None of the outstanding shares
of capital stock of SPAH have been, and none of the shares of SPAH Common Stock
to be issued in exchange for shares of FFC Common Stock upon consummation of the
Merger will be issued in violation of any preemptive rights of the current or
past stockholders of SPAH.
(b) Except
as set forth on Schedule 6.3(b), and except for 61,112,000 shares of SPAH Common
Stock reserved for issuance pursuant to the SPAH Warrants and the shares
reserved for issuance in connection with transactions contemplated by this
Agreement, there are no shares of capital stock or other equity securities of
SPAH reserved for issuance and no outstanding Rights relating to the capital
stock of SPAH.
(c) Except
as set forth in Sections 6.3(a) or (b), there are no shares of capital stock or
other equity securities of SPAH outstanding and no outstanding SPAH Rights
relating to the capital stock of SPAH.
|
|
6.4
|
SPAH
Subsidiaries.
|
SPAH has
no Subsidiaries.
|
|
6.5
|
Exchange
Act Filings; Securities Offerings; Financial
Statements.
|
(a) SPAH
has timely filed and made available to FFC all Exchange Act Documents required
to be filed by SPAH since inception (together with all such Exchange Act
Documents filed, whether or not required to be filed, the “SPAH Exchange Act
Reports”). The SPAH Exchange Act Reports (i) at the time
filed, complied in all material respects with the applicable requirements of the
Securities Laws and other applicable Laws and (ii) did not, at the time they
were filed (or, if amended or superseded by a filing prior to the date of this
Agreement, then on the date of such amended or subsequent filing or, in the case
of registration statements, at the effective date thereof) contain any untrue
statement of a material fact or omit to state a material fact required to be
stated in such SPAH Exchange Act Reports or necessary in order to make the
statements in such SPAH Exchange Act Reports, in light of the circumstances
under which they were made, not misleading. Each offering or sale of securities
by SPAH (i) was either registered under the Securities Act or made pursuant to a
valid exemption from registration, (ii) complied in all material respects with
the applicable requirements of the Securities Laws and other applicable Laws,
and (iii) was made pursuant to offering documents which did not, at the time of
the offering (or, in the case of registration statements, at the effective date
thereof) contain any untrue statement of a material fact or omit to state a
material fact required to be stated in the offering documents or necessary in
order to make the statements in such documents not misleading. SPAH
has delivered or made available to FFC all comment letters received since
October 10, 2007 by SPAH from the staff of the SEC and all responses to such
comment letters by or on behalf of SPAH with respect to all filings under the
Securities Laws. SPAH’s principal executive officer and principal
financial officer (and SPAH’s former principal executive officers and principal
financial officers, as applicable) have made the certifications required by
Sections 302 and 906 of the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act and the rules and regulations of
the Exchange Act thereunder with respect to SPAH’s Exchange Act Documents to the
extent such rules or regulations applied at the time of the
filing. For purposes of the preceding sentence, “principal executive
officer” and “principal financial officer” shall have the meanings given to such
terms in the Sarbanes–Oxley Act. Such certifications contain no
qualifications or exceptions to the matters certified therein and have not been
modified or withdrawn; and neither SPAH nor any of its officers has received
notice from any Regulatory Authority questioning or challenging the accuracy,
completeness, content, form or manner of filing or submission of such
certifications.
43
(b) Each
of the SPAH Financial Statements (including, in each case, any related notes)
contained in the SPAH Exchange Act Reports, including any SPAH Exchange Act
Reports filed after the date of this Agreement until the Effective Time,
complied, or will comply, as to form in all material respects with the
applicable published rules and regulations of the SEC with respect thereto, was
prepared in accordance with GAAP applied on a consistent basis throughout the
periods involved (except as may be indicated in the notes to such financial
statements or, in the case of unaudited interim statements, as permitted by Form
10-Q of the Exchange Act), and fairly presented in all material respects the
financial position of SPAH as at the respective dates and the results of
operations and cash flows for the periods indicated, including the fair values
of the assets and liabilities shown therein, except that the unaudited interim
financial statements were or are subject to normal and recurring year-end
adjustments which were not or are not expected to be material in amount or
effect, and were certified to the extent required by the ▇▇▇▇▇▇▇▇-▇▇▇▇▇
Act.
(c) Each
of SPAH’s independent public accountants, which have expressed their opinion
with respect to the financial statements of SPAH included in SPAH’s Exchange Act
Reports (including the related notes), is and have been throughout the periods
covered by such SPAH Financial Statements, registered public accounting firms
with respect to SPAH within the meaning of the Securities Laws and is registered
with the Public Company Accounting Oversight Board. With respect to
SPAH, SPAH’s independent public accountants are not and have not been in
violation of auditor independence requirements of the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act and the
rules and regulations promulgated in connection therewith. None of
the non-audit services performed by SPAH’s independent public accountants for
SPAH were prohibited services under the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act and all such services
were pre-approved in advance by SPAH’s audit committee in accordance with the
▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act.
44
(d) SPAH
maintains disclosure controls and procedures required by Rule 13a-15(b) or
15d-15(b) under the Exchange Act; such controls and procedures are effective to
ensure that all material information concerning SPAH is made known on a timely
basis to the principal executive officer and the principal financial
officer. SPAH has delivered to FFC copies of, all written
descriptions of, and all policies, manuals and other documents promulgating such
disclosure controls and procedures. SPAH and its directors and
executive officers have complied at all times with Section 16(a) of the Exchange
Act, including the filing requirements thereunder to the extent
applicable.
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|
6.6
|
Absence
of Undisclosed Liabilities.
|
SPAH has
no Liabilities required under GAAP to be set forth on a balance sheet or in the
notes thereto that are not set forth therein and are reasonably likely to have,
individually or in the aggregate, a SPAH Material Adverse Effect, except
Liabilities which are (i) accrued or reserved against in the balance sheet of
SPAH as of June 30, 2009, included in the SPAH Financial Statements delivered or
made available prior to the date of this Agreement or reflected in the notes
thereto, (ii) incurred or paid in the ordinary course of business consistent
with past practices, or (iii) incurred in connection with the transactions
contemplated by this Agreement. SPAH has never entered into any
off-balance sheet financing arrangements and has never established any special
purpose entities. SPAH is not directly or indirectly liable, by
guarantee, indemnity, or otherwise, upon or with respect to, or obligated, by
discount or repurchase agreement or in any other way, to provide funds in
respect to, or obligated to guarantee or assume any Liability of any Person for
any amount. Except (x) as reflected in SPAH’s balance sheet at June
30, 2009 or liabilities described in any notes thereto (or liabilities for which
neither accrual nor footnote disclosure is required pursuant to GAAP or any
applicable Regulatory Authority) or (y) for liabilities incurred in the ordinary
course of business since June 30, 2009 consistent with past practice or in
connection with this Agreement or the transactions contemplated hereby, SPAH has
no Material Liabilities or obligations of any nature.
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|
6.7
|
Absence
of Certain Changes or Events.
|
(a) Since
June 30, 2009, except as disclosed in the SPAH Financial Statements delivered or
made available prior to the date of this Agreement, (i) there have been no
events, changes, or occurrences which have had, or are reasonably likely to
have, individually or in the aggregate, a SPAH Material Adverse Effect, and (ii)
SPAH has not taken any action, or failed to take any action, prior to the date
of this Agreement, which action or failure, if taken after the date of this
Agreement, would represent or result in a material breach or violation of any of
the covenants and agreements of SPAH provided in this Agreement.
(b) Since
June 30, 2009, SPAH has not issued, transferred, sold, encumbered or pledged the
SPAH Common Stock, shares of or other securities (including securities
convertible into or exchangeable for, or options or rights to acquire, shares of
SPAH Common Stock or other securities) of SPAH.
45
(c) Since
June 30, 2009, SPAH has not entered into or amended any (i) employment
agreements or any other type of employment arrangements, (ii) severance or
change of control agreements or arrangements, or (iii) deferred compensation
agreements or arrangements.
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|
6.8
|
Tax
Matters.
|
(a) Except
as disclosed in Schedule 6.8, SPAH has timely filed with the appropriate Taxing
Authorities, all Tax Returns (or extensions for the filing thereof) in all
jurisdictions in which Tax Returns are required to be filed, and such Tax
Returns are correct and complete in all respects and all Taxes of SPAH (whether
or not shown on any Tax Return) have been fully and timely
paid. There are no Liens for any Taxes (other than a Lien for current
real property or ad valorem Taxes not yet due and payable) on any of the Assets
of SPAH. No claim has ever been made by a Taxing Authority in a
jurisdiction where SPAH does not file a Tax Return that SPAH may be subject to
Taxes by that jurisdiction.
(b) SPAH
has not received any notice of assessment or proposed assessment in connection
with any Taxes, and there are no threatened or pending disputes, claims, audits
or examinations regarding any Taxes of SPAH or the assets of
SPAH. SPAH has no Knowledge that any Taxing Authority is reasonably
likely to assess any additional Taxes for any period for which Tax Returns have
been filed. No issue has been raised by a Taxing Authority in any
prior examination of SPAH which, by application of the same or similar
principles, could be expected to result in a proposed deficiency for any
subsequent taxable period. SPAH has not waived any statute of
limitations in respect of any Taxes or agreed to a Tax assessment or
deficiency.
(c) SPAH
has complied with all applicable Laws, rules and regulations relating to the
withholding of Taxes and the payment thereof to appropriate authorities,
including Taxes required to have been withheld and paid in connection with
amounts paid or owing to any employee or independent contractor, and Taxes
required to be withheld and paid pursuant to Sections 1441 and 1442 of the Code
or similar provisions under foreign Law.
(d) The
unpaid Taxes of SPAH (i) did not, as of the most recent fiscal month end, exceed
the reserve for Tax Liability (other than any reserve for deferred Taxes
established to reflect timing differences between book and Tax income) set forth
on the face of the most recent balance sheet (other than in any notes thereto)
for SPAH and (ii) do not exceed that reserve as adjusted for the passage of time
through the Closing Date in accordance with past custom and practice of SPAH in
filing its Tax Returns.
(e) SPAH
is not a party to any Tax allocation or sharing agreement.
(f) At
no time since SPAH’s inception has SPAH been was a “distributing corporation” or
a “controlled corporation” as defined in, and in a transaction intended to be
governed by Section 355 of the Code.
46
(g) SPAH
has not made any payments, is not obligated to make any payments, or is not a
party to any contract that could obligate it to make any payments that could be
disallowed as a deduction under Section 280G or 162(m) of the Code, or which
would be subject to withholding under Section 4999 of the Code. SPAH
has not been a United States real property holding corporation within the
meaning of Section 897(c)(1)(A)(ii) of the Code. SPAH is not and will
not be required to include any adjustment in taxable income for any Tax period
(or portion thereof) pursuant to Section 481 of the Code or any comparable
provision under state or foreign Tax Laws as a result of transactions or events
occurring prior to the Closing. Neither SPAH nor any FFC Entity will
be required to include in its gross income for a taxable period after the
Closing Date any income or gain attributable to SPAH as a result of any cash or
property received, or an account receivable that arose, in a taxable period
prior to the Closing Date and that was not recognized prior to the Closing Date,
as a result of the installment method, the completed contract method, Section
263A of the Code or for any other reason. Any net operating losses of
SPAH disclosed in Schedule 6.8(g) are not subject to any limitation on their use
under the provisions of Sections 382 or 269 of the Code or any other provisions
of the Code or the Treasury Regulations dealing with the utilization of net
operating losses other than any such limitations as may arise as a result of the
consummation of the transactions contemplated by this Agreement.
(h) SPAH
is in compliance with, and its records contain all information and documents
(including properly completed IRS Forms W-9) necessary to comply with, all
applicable information reporting and Tax withholding requirements under federal,
state, and local Tax Laws, and such records identify with specificity all
accounts subject to backup withholding under Section 3406 of the
Code.
(i) SPAH
is not subject to any private letter ruling of the IRS or comparable rulings of
any Taxing Authority.
(j) No
property owned by SPAH is (i) property required to be treated as being owned by
another Person pursuant to the provisions of Section 168(f)(8) of the Internal
Revenue Code of 1954, as amended and in effect immediately prior to the
enactment of the Tax Reform Act of 1986, (ii) “tax-exempt use property” within
the meaning of Section 168(h)(1) of the Code, (iii) “tax-exempt bond financed
property” within the meaning of Section 168(g) of the Code, (iv) “limited use
property” within the meaning of Rev. Proc. 76-30, (v)
subject to Section 168(g)(1)(A) of the Code, or (vi) subject to any provision of
state, local or foreign Law comparable to any of the provisions listed
above.
(k) SPAH
does not have any “corporate acquisition indebtedness” within the meaning of
Section 279 of the Code.
(l) SPAH
has not participated in any reportable transaction, as defined in Treasury
Regulation Section 1.6011-4(b)(1), or a transaction substantially similar to a
reportable transaction.
(m) Neither
SPAH nor any other Person on its behalf has (i) filed a consent pursuant to
Section 341(f) of the Code (as in effect prior to the repeal under the Jobs and
Growth Tax Reconciliation Act of 2003) or agreed to have Section 341(f)(2) of
the Code (as in effect prior to the repeal under the Jobs and Growth Tax
Reconciliation Act of 2003) apply to any disposition of a subsection (f) asset
(as such term is defined in Section 341(f)(4) of the Code) owned by SPAH, (ii)
executed or entered into a closing agreement pursuant to Section 7121 of the
Code or any similar provision of Law with respect to SPAH, or (iii) granted to
any Person any power of attorney that is currently in force with respect to any
Tax matter.
47
(n) SPAH
has not (i) has engaged in any “intercompany transactions” in respect of which
gain was and continues to be deferred pursuant to Treasury Regulations Section
1.1502-13 or any analogous or similar provision of Law; or (ii) has a “dual
consolidated loss”, within the meaning of Treasury Regulations Section
1.1503-2.
(o) SPAH
has no, or ever had, a permanent establishment in any country other than the
United States, or has engaged in a trade or business in any country other than
the United States that subjected it to tax in such country.
For
purposes of this Section 6.8, any reference to SPAH shall be deemed to include
any Person which merged with or was liquidated into or otherwise combined with
SPAH.
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|
6.9
|
Assets.
|
(a) Except
as disclosed or reserved against in the SPAH Financial Statements delivered or
made available prior to the date of this Agreement, SPAH has good and (to the
extent owned) marketable title, free and clear of all Liens, to all its
Assets. All tangible properties used in the businesses of SPAH are in
good condition, reasonable wear and tear excepted, and are usable in the
ordinary course of business consistent with SPAH’s past practices.
(b) All
Assets which are material to SPAH’s business on a consolidated basis, held under
leases or subleases, are held under valid Contracts enforceable in accordance
with their respective terms, and each such Contract is in full force and
effect.
(c) SPAH
currently maintains insurance, with insurers of recognized financial
responsibility, similar in amounts, scope, and coverage to that maintained by
peer special purpose acquisition companies that have not consummated an
acquisition. SPAH has not received written notice from any insurance
carrier, or have any reason to believe that (i) any policy of insurance will be
canceled or that coverage thereunder will be reduced or eliminated, (ii) premium
costs with respect to such policies of insurance will be substantially
increased, or (iii) similar coverage will be denied or limited or not extended
or renewed with respect to SPAH, any act or occurrence, or that any Asset,
officer, director, employee or agent of SPAH will not be covered by such
insurance or bond. There are presently no claims for amounts
exceeding $125,000 individually or in the aggregate pending under such policies
of insurance or bonds, and no notices of claims in excess of such amounts have
been given by SPAH under such policies. SPAH has made no claims, and
no claims are contemplated to be made, under its directors’ and officers’ errors
and omissions or other insurance or bankers’ blanket bond.
(d) The
Assets of SPAH include all Assets required by SPAH to operate the business of
SPAH as presently conducted.
48
|
|
6.10
|
Intellectual
Property.
|
SPAH owns
or has a license to use all of the Intellectual Property used by SPAH in the
course of its business, including sufficient rights in each copy possessed by
SPAH. SPAH is the owner of or has a license, with the right to
sublicense, to any Intellectual Property sold or licensed to a third party by
SPAH in connection with such SPAH’s business operations, and SPAH has the right
to convey by sale or license any Intellectual Property so
conveyed. SPAH is not in Default under any of its Intellectual
Property licenses. No proceedings have been instituted, or are
pending or to the Knowledge of SPAH threatened, which challenge the rights of
SPAH with respect to Intellectual Property used, sold or licensed by SPAH in the
course of its business, nor has any person claimed or alleged any rights to such
Intellectual Property. To SPAH’s Knowledge, the conduct of the
business of SPAH does not infringe any Intellectual Property of any other
person. SPAH is not obligated to pay any recurring royalties to any
Person with respect to any such Intellectual Property. SPAH has no
Contracts with any of its directors, officers, or employees which require such
officer, director or employee to assign any interest in any Intellectual
Property to SPAH and to keep confidential any trade secrets, proprietary data,
customer information, or other business information of SPAH, and to
SPAH’s Knowledge, no such officer, director or employee is party to any Contract
with any Person other than SPAH which requires such officer, director or
employee to assign any interest in any Intellectual Property to any Person other
than SPAH or to keep confidential any trade secrets, proprietary data, customer
information, or other business information of any Person other than
SPAH. No officer, director or employee of SPAH is party to any
confidentiality, nonsolicitation, noncompetition or other Contract which
restricts or prohibits such officer, director or employee from engaging in
activities competitive with any Person, including SPAH.
|
|
6.11
|
Environmental
Matters.
|
(a) To
SPAH’s Knowledge, there are no material violations of any Environmental Laws for
which it would be liable that relate to the location of SPAH’s executive offices
at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇. SPAH does not, and has
not since its inception, owned or leased any other real property.
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|
6.12
|
Compliance
with Laws.
|
(a) SPAH,
upon approval by the Federal Reserve and upon consummation of the Merger, will
be a bank holding company duly registered with the Federal Reserve.
(b) SPAH
has in effect all Permits and has made all filings, applications, and
registrations with Governmental Authorities that are required for it to own,
lease, or operate its assets and to carry on its business as now conducted, and
there has occurred no Default under any such Permit applicable to its
business.
(c) SPAH
is not in Default under any Laws or Orders applicable to its business or
employees conducting its business.
(d) SPAH
has not received any notification or communication from any Governmental
Authority (i) asserting that SPAH is in Default under any of the Permits, Laws
or Orders which such Governmental Authority enforces, (ii) threatening to revoke
any Permits, or (iii) requiring SPAH (x) to enter into or consent to the
issuance of a cease and desist order, formal agreement, directive, commitment,
or memorandum of understanding, or (y) to adopt any resolution of its Board of
Directors or similar undertaking which restricts materially the conduct of its
business or in any manner relates to its employment decisions, its employment or
safety policies or practices.
49
(e) There
(i) is no unresolved violation, criticism, or exception by any Governmental
Authority with respect to any report or statement relating to any examinations
or inspections of SPAH; (ii) are no notices or correspondence received by SPAH
and SPAH does not reasonably expect to receive any notices or correspondence
with respect to formal or informal inquiries by, or disagreements or disputes
with, any Governmental Authority with respect to SPAH’s current business,
operations, policies or procedures; and (iii) is not any pending or, to SPAH’s
Knowledge, threatened investigation or review of SPAH on behalf of any
Governmental Authority, nor has any Governmental Authority indicated an
intention to conduct any, investigation or review of SPAH.
(f) None
of SPAH or any of its directors, officers, employees or Representatives acting
on its behalf has offered, paid, or agreed to pay any Person, including any
Governmental Authority, directly or indirectly, anything of value for the
purpose of, or with the intent of obtaining or retaining any business in
violation of applicable Laws, including (i) using any corporate funds for any
unlawful contribution, gift, entertainment or other unlawful expense relating to
political activity, (ii) making any direct or indirect unlawful payment to any
foreign or domestic government official or employee from corporate funds, (iii)
violating any provision of the Foreign Corrupt Practices Act of 1977, as
amended, or (iv) making any bribe, rebate, payoff, influence payment, kickback
or other unlawful payment.
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|
6.13
|
Labor
Relations.
|
SPAH
currently has four officers. These individuals are not SPAH employees and are
not obligated to devote any specific number of hours to SPAH business and devote
only as much time as they deem necessary for SPAH business. SPAH does not expect
to have any full-time employees prior to the consummation of the
Merger.
(a) SPAH
is not the subject of any Litigation asserting that has committed an unfair
labor practice (within the meaning of the National Labor Relations Act of 1935,
as amended, or comparable state Law) or other violation of state or federal
labor Law or seeking to compel it to bargain with any labor organization or
other employee representative as to wages or conditions of
employment.
(b) SPAH’s
employment of each employee, if any, and engagement of each independent
contractor, if any, is terminable at will by SPAH without (i) any penalty,
liability or severance obligation incurred by SPAH, (ii) and in all cases
without prior consent by any Governmental Authority. SPAH will not
owe any amounts to any of its employees, if any, or independent contractors, if
any, as of the Closing Date, including any amounts incurred for any wages,
bonuses, vacation pay, sick leave, contract notice periods, change of control
payments or severance obligations.
50
|
|
6.14
|
Employee
Benefit Plans.
|
SPAH has
no Employee Benefit Plans.
|
|
6.15
|
Material
Contracts.
|
(a) Except
as disclosed in Schedule 6.15, or otherwise reflected in the SPAH Financial
Statements, none of SPAH, nor any of its respective Assets, businesses, or
operations, is a party to, or is bound or affected by, or receives benefits
under, (i) any employment, severance, termination, consulting, or retirement
Contract providing for aggregate payments to any Person in any calendar year in
excess of $200,000, (ii) any Contract relating to the borrowing of money by SPAH
or the guarantee by SPAH of any such obligation (other than trade payables and
Contracts relating to borrowings or guarantees made in the ordinary course of
SPAH’s business), (iii) any Contract which prohibits or restricts SPAH or any
personnel of SPAH from engaging in any business activities in any geographic
area, line of business or otherwise in competition with any other Person, (iv)
any Contract involving Intellectual Property (other than Contracts entered into
in the ordinary course with customers or “shrink-wrap” software licenses), (v)
any Contract relating to the provision of data processing, network
communication, or other technical services to or by SPAH, (vi) any Contract
relating to the purchase or sale of any goods or services (other than Contracts
entered into in the ordinary course of business and involving payments under any
individual Contract or series of contracts not in excess of $200,000), (vii) any
exchange-traded or over-the-counter swap, forward, future, option, cap, floor,
or collar financial Contract, or any other interest rate or foreign currency
protection Contract or any Contract that is a combination thereof not included
on its balance sheet, (viii) any Contract relating to the purchase, sale or
lease of real property by or from SPAH and (ix) any other Contract or amendment
thereto that would be required to be filed as an exhibit to a SPAH Exchange Act
Report filed by SPAH with the SEC prior to the date of this Agreement that has
not been filed as an exhibit to a SPAH Exchange Act Report (Contracts referred
to in clauses (i) through (ix) of this Section 6.15(a), together the “SPAH
Contracts”). A true, correct and complete copy of each SPAH
Contract has been filed as an exhibit to an Exchange Act Document, furnished or
made available to FFC as of the date hereof.
(b) With
respect to each SPAH Contract and except as disclosed in Schedule 6.15(b): (i)
the Contract is in full force and effect; (ii) SPAH is not in Default
thereunder; (iii) SPAH has not repudiated or waived any material provision of
any such Contract; (iv) no other party to any such Contract is, to SPAH’s
Knowledge, in Default in any respect or has repudiated or waived each material
provision thereunder; and (v) no consent is required by a Contract for the
execution, delivery, or performance of this Agreement, the consummation of the
Merger or the other transactions contemplated hereby. All of the
indebtedness of SPAH for money borrowed is prepayable at any time by SPAH
without penalty, premium or charge.
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|
6.16
|
Properties
and Leases
|
Except
for any lien for current taxes not yet delinquent, SPAH has good marketable
title free and clear of any material Liens, claims, charges, options, covenants,
encumbrances or restrictions to all personal property reflected in SPAH’s
consolidated balance sheet as of December 31, 2008 included in SPAH's
Annual Report on Form 10-K for the period then ended, and all personal
property acquired since such date, except such personal property as has been
disposed of in the ordinary course of business.
51
|
|
6.17
|
Legal
Proceedings.
|
There is
no Litigation instituted or pending, or, to the Knowledge of SPAH, threatened
(or unasserted but considered probable of assertion) against SPAH, or against
any director, officer, employee or agent of SPAH in their capacities as such, or
against any Asset, interest, or right of any of them, nor are there any Orders
or judgments outstanding against SPAH. No claim for indemnity has
been made or, to SPAH’s Knowledge, threatened by any director, officer,
employee, independent contractor or agent to SPAH and to SPAH’s Knowledge, no
basis for any such claim exists.
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|
6.18
|
Reports.
|
Since
inception, in addition to the SPAH Exchange Act Reports, SPAH has timely filed
all other reports and statements, together with any amendments required to be
made with respect thereto, that it was required to file with Governmental
Authorities. As of their respective dates, each of such reports and
documents, including the financial statements, exhibits, and schedules thereto,
complied in all material respects with all applicable Laws. As of
their respective date, each such report, statement and document did not contain
any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements made therein,
in light of the circumstances under which they were made, not
misleading.
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|
6.19
|
Books
and Records.
|
SPAH
maintains accurate books and records reflecting its Assets and Liabilities and
maintains proper and adequate internal accounting controls which provide
assurance that (a) transactions are executed with management’s authorization;
(b) transactions are recorded as necessary to permit preparation of the
consolidated financial statements of SPAH and to maintain accountability for
SPAH’s consolidated Assets; (c) access to SPAH’s Assets is permitted only in
accordance with management’s authorization; (d) the reporting of SPAH’s Assets
is compared with existing Assets at regular intervals; and (e) accounts, notes
and other receivables and inventory are recorded accurately, and proper and
adequate procedures are implemented to effect the collection thereof on a
current and timely basis.
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|
6.20
|
Loans
to Executive Officers and
Directors.
|
SPAH has
not extended or maintained credit, arranged for the extension of credit, or
renewed an extension of credit, in the form of a personal loan to any director
or executive officer of SPAH in violation of Section 402 of the ▇▇▇▇▇▇▇▇-▇▇▇▇▇
Act.
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|
6.21
|
Independence
of Directors.
|
SPAH’s
directors listed on Schedule 6.21, who will be serving on the Board of Directors
of the Surviving Corporation after the Closing Date and who are designated as
independent on Schedule 6.20, will be “independent” directors of the Surviving
Corporation as such term is defined in the rules of the national securities
exchange on which the SPAH Common Stock is then listed and in Rule 10A-3 of the
Exchange Act.
52
|
|
6.22
|
Tax
and Regulatory Matters; Consents.
|
Neither
SPAH nor any Affiliate thereof has taken or agreed to take any action or has any
Knowledge of any fact or circumstance that is reasonably likely to (i) prevent
the Merger from qualifying as a reorganization within the meaning of Section
368(a) of the Code, or (ii) materially impede or delay receipt of any required
Consents or result in the imposition of a condition or restriction of the type
referred to in the last sentence of Section 9.1(b) and 9.1(c).
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|
6.23
|
Brokers
and Finders.
|
Neither
SPAH nor any of its officers, directors, employees or Representatives, has
employed any broker, finder or investment banker or incurred any Liability for
any financial advisory fees, investment bankers’ fees, brokerage fees,
commissions, or finder’s or other fees in connection with this Agreement or the
transactions contemplated hereby.
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|
6.24
|
Board
Recommendation.
|
The Board
of Directors of SPAH, at a meeting duly called and held, has by unanimous vote
of the directors present who constituted all of the directors then in office (i)
determined that this Agreement and the transactions contemplated hereby,
including the Merger, the Warrant Amendment Agreement, the amendments to SPAH’s
Certificate of Incorporation and the transactions contemplated hereby and
thereby, taken together, are in the best interests of SPAH’s stockholders and
warrantholders and (ii) resolved, subject to the terms of this Agreement, to
recommend that (1) the holders of the shares of SPAH Common Stock approve the
amendments to SPAH’s Certificate of Incorporation set forth in Exhibit A, this
Agreement, the Merger and the related transactions and to call and hold a
special meeting of SPAH’s stockholders to consider and vote on the amendments to
the SPAH Certificate of Incorporation, this Agreement, the Merger and the
related transactions and (2) the holders of SPAH Warrants approve the Warrant
Amendment Agreement and to call and hold a special meeting of SPAH’s
warrantholders to consider the Warrant Amendment Agreement.
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|
6.25
|
Statements
True and Correct.
|
(a) No
statement, certificate, instrument or other writing furnished or to be furnished
by SPAH or any Affiliate thereof to FFC pursuant to this Agreement or any other
document, agreement or instrument referred to herein contains or will contain
any untrue statement of material fact or will omit to state a material fact
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading.
(b) None
of the information supplied or to be supplied by SPAH or any Affiliate thereof
for inclusion in the Registration Statement to be filed by SPAH with the SEC
will, when the Registration Statement becomes effective, be false or misleading
with respect to any material fact, or omit to state any material fact necessary
to make the statements therein not misleading.
53
(c)
None of the information supplied or to be supplied by SPAH or any Affiliate
thereof for inclusion in the Joint Proxy Statement, and any amendments or
supplements thereto, to be mailed to each Party’s stockholders in connection
with the Stockholders Meetings, will (i) when first mailed to the stockholders
of each Party, be false or misleading with respect to any material fact, or omit
to state any material fact necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading, or, (ii) at the
time of the Stockholders Meetings, be false or misleading with respect to any
material fact, or omit to state any material fact necessary to correct any
statement in any earlier communication, in light of the circumstances under
which they were made, not misleading with respect to the solicitation of any
proxy for the Stockholders Meetings. No other documents to be filed
by SPAH or any Affiliate thereof with the SEC or any other Regulatory Authority
in connection with the transactions contemplated hereby, will, at the respective
time such documents are filed, be false or misleading with respect to any
material fact, or omit to state any material fact necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading.
(d) All
documents that SPAH or any Affiliate is responsible for filing with any
Governmental Authority in connection with the transactions contemplated hereby
will comply as to form in all material respects with the provisions of
applicable Law.
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|
6.26
|
SPAH
Trust Fund.
|
Provided
the conditions to the obligation to consummate the Merger and the related
transactions contemplated hereby in Articles 8 and 9 are satisfied or waived as
provided in this Agreement, the SPAH Trust Agreement provides that the trust
monies shall be released to and available for use by the Surviving Corporation
effective as of the Effective Time. As of the date hereof, SPAH has
no Knowledge of any claim, circumstance or event that is reasonably likely to
restrict or otherwise impair the release of such monies other than: (i) claims
of SPAH’s underwriters with respect to its initial public offering for deferred
compensation; (ii) claims for accounting fees related to the Merger and
preparation of the Proxy Statement for the SPAH Stockholders Meeting to be
undertaken in connection with the Merger; (iii) claims of SPAH Stockholders who
vote against the Merger and properly effect conversion of their shares to a
portion of the monies held in the trust account (the “Trust Fund”)
established pursuant to the SPAH Trust Agreement; and (iv) claims for advisory
and related fees by mergers and acquisition advisors currently retained by SPAH
or who may be retained by SPAH prior to SPAH’s Stockholders
Meeting.
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|
6.27
|
Prior
Business Operations.
|
SPAH has
limited its activities to those activities contemplated in the
Prospectus.
54
ARTICLE
7
CONDUCT
OF BUSINESS PENDING CONSUMMATION
|
|
7.1
|
Affirmative
Covenants of FFC.
|
From the
date of this Agreement until the earlier of the Effective Time or the
termination of this Agreement, unless the prior written consent of SPAH shall
have been obtained, and except as otherwise expressly contemplated herein, FFC
shall, and shall cause each of its Subsidiaries to, (i) operate its business
only in the usual, regular and ordinary course, (ii) use commercially reasonable
efforts to preserve intact its business organization and Assets and maintain its
rights and franchises, (iii) use commercially reasonable efforts to cause its
representations and warranties to be correct at all times, (iv) use commercially
reasonable efforts to provide all information requested by SPAH related to loans
or other transactions made by FFC with a value equal to or exceeding $1,000,000,
(v) consult with SPAH prior to entering into or making any loans or other
transactions with a value equal to or exceeding $1,000,000, and (vi) take no
action which would (A) adversely affect the ability of any Party to obtain any
Consents required for the transactions contemplated hereby without imposition of
a condition or restriction of the type referred to in the last sentences of
Sections 9.1(b) or 9.1(c), or (B) materially adversely affect the ability of any
Party to perform its covenants and agreements under this Agreement. Failure by
SPAH to object to any action set forth in clauses (iv) and (v) of this Section
7.1 within 48-hours of SPAH receiving prior written notice of such action, shall
be deemed as consent by SPAH to such action.
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|
7.2
|
Negative
Covenants of the Parties.
|
From the
date of this Agreement until the earlier of the Effective Time or the
termination of this Agreement, unless the prior written consent of the other
Party shall have been obtained, and except as otherwise expressly contemplated
herein, each Party covenants and agrees that it will not do or agree or commit
to do, or permit any of its Subsidiaries to do or agree or commit to do, any of
the following:
(a) amend
the Certificate of Incorporation, Articles of Incorporation, Articles of
Association, Bylaws or other governing instruments of SPAH or any FFC Entity, as
applicable, provided nothing in this Section 7.2(a) shall prohibit either Party
from amending its Certificate of Incorporation as contemplated by this
Agreement;
(b) (i)
modify the Bank’s lending policy (in the case of FFC), incur any additional debt
obligation or other obligation for borrowed money in excess of an aggregate of
$1,000,000 except in the ordinary course of the business of SPAH or such FFC
Entity, as applicable, consistent with past practices and that are prepayable
without penalty, charge or other payment (which exception shall include, for FFC
Entities that are depository institutions, creation of deposit liabilities,
purchases of federal funds, advances from the Federal Reserve Bank or Federal
Home Loan Bank, and entry into repurchase agreements fully secured by
U.S. government securities or U.S. government agency securities), or
(ii) impose, or suffer the imposition, on any Asset of SPAH or such FFC Entity,
as applicable, of any Lien or permit any such Lien to exist (other than in
connection with public deposits, repurchase agreements, bankers’ acceptances,
“treasury tax and loan” accounts established in the ordinary course of business
of any FFC Entity that is a depository institution, the satisfaction of legal
requirements in the exercise of trust powers, and Liens in effect as of the date
hereof that are set forth in Schedule 7.2);
55
(c) repurchase,
redeem, or otherwise acquire or exchange (other than exchanges in the ordinary
course under Employee Benefit Plans), directly or indirectly, any shares, or any
securities convertible into any shares, of the capital stock of SPAH or any FFC
Entity, or declare or pay any dividend or make any other distribution in respect
of either Party’s capital stock;
(d) except
for this Agreement and the exercise of FFC Rights that have been granted prior
to the date hereof and which shall vest prior to the Effective Time in
accordance with their terms, issue, sell, pledge, encumber, authorize the
issuance of, enter into any Contract to issue, sell, pledge, encumber, or
authorize the issuance of, or otherwise permit to become outstanding, any
additional shares of SPAH Common Stock, FFC Common Stock, any other capital
stock of any FFC Entity, or any Rights;
(e) adjust,
split, combine or reclassify any capital stock of SPAH or any FFC Entity or
issue or authorize the issuance of any other securities in respect of or in
substitution for shares of SPAH Common Stock or FFC Common Stock, or sell,
lease, mortgage or otherwise dispose of or otherwise (i) in the case of FFC, any
shares of capital stock of any FFC Subsidiary or (ii) any Asset other than in
the ordinary course of business for reasonable and adequate
consideration;
(f) except
for purchases of U.S. Treasury securities or U.S. Government agency securities,
which in either case have maturities of two years or less, purchase any
securities or make any material investment except in the ordinary course of
business consistent with past practice, either by purchase of stock or
securities, contributions to capital, Asset transfers, or purchase of any
Assets, in any Person other than in the case of FFC, a wholly owned FFC
Subsidiary, or otherwise acquire direct or indirect control over any Person,
other than in connection with foreclosures of loans in the ordinary course of
business;
(g)
(i) grant any bonus or increase in compensation or benefits to the employees,
officers or directors of SPAH or any FFC Entity, as applicable, except in the
case of officers and employees for normal individual increases in compensation
in the ordinary course of business consistent with past practice and for any
bonuses earned pursuant to any incentive plan duly adopted and approved and
existing on the date hereof; (ii) commit or agree to pay any severance or
termination pay, or any stay or other bonus to any FFC director, officer or
employee; (iii) enter into or amend any severance agreements with officers,
employees, directors, independent contractors or agents of SPAH or any FFC
Entity, as applicable; (iv) change any fees or other compensation or other
benefits to directors of any FFC Entity; or (v) waive any stock repurchase
rights, accelerate, amend or change the period of exercisability of any Rights
or restricted stock, or reprice Rights granted under the FFC Stock Plans or
authorize cash payments in exchange for any Rights; or accelerate or vest or
commit or agree to accelerate or vest any amounts, benefits or rights payable by
SPAH or any FFC Entity, except as permitted under the terms of the agreement
evidencing such right;
56
(h) enter
into or amend any employment Contract between SPAH or any FFC Entity and any
Person (unless such amendment is required by Law) that SPAH or the FFC Entity
does not have the unconditional right to terminate without Liability (other than
Liability for services already rendered), at any time on or after the Effective
Time;
(i) enter
into any severance or change of control agreements or arrangements, or deferred
compensation agreements or arrangements between SPAH or any FFC Entity and any
Person;
(j) adopt
any new employee benefit plan of SPAH or any FFC Entity, as applicable, or
terminate or withdraw from, or make any material change in or to, any existing
employee benefit plans, welfare plans, insurance, stock or other plans of SPAH
or any FFC Entity, as applicable other than any such change that is required by
Law or that, in the written opinion of counsel, is necessary or advisable to
maintain the tax qualified status of any such plan, or make any distributions
from such employee benefit or welfare plans, except as required by Law, the
terms of such plans or consistent with past practice;
(k) make
any change in any Tax or accounting methods or systems of internal accounting
controls, except, without the review and consent of the other Party, as may be
appropriate and necessary to conform to changes in Tax Laws, regulatory
accounting requirements or GAAP or file any amended Tax Return, enter into any
closing agreement, settle any Tax claim or assessment relating to SPAH or any
FFC Entity, as applicable, surrender any right to claim a refund of Taxes,
consent to any extension or waiver of the limitation period applicable to any
Tax claim or assessment relating to SPAH or any FFC Entity, or take any other
similar action relating to the filing of any Tax Return or the payment of any
Tax;
(l) commence
any Litigation other than in accordance with past practice (including collection
and foreclosure by FFC on defaulted loans) or settle any Litigation involving
any Liability of SPAH or any FFC Entity in excess of $500,000 individually or
$1,000,000 in the aggregate, as applicable for money damages or restrictions
upon the operations of SPAH or such FFC Entity;
(m) enter
into, modify, amend or terminate any material Contract (including any loan
Contract with respect to any extension of credit with an unpaid balance
exceeding $1,000,000) or waive, release, compromise or assign any material
rights or claims with respect to any material Contract, or in the case of FFC,
make any adverse changes in the mix, rates, terms or maturities of its deposits
and other Liabilities;
(n) take
any action or fail to take any action that at the time of such action or
inaction is reasonably likely to prevent, or would be reasonably likely to
materially interfere with, the consummation of this Merger.
Failure by SPAH to object to any action
set forth in Sections 7.2(b) (i), 7.2(l) and 7.2(m) within 48-hours of SPAH
receiving prior written notice of such action, shall be deemed as consent by
SPAH to such action.
57
|
|
7.3
|
Affirmative
Covenants of SPAH.
|
From the
date of this Agreement until the earlier of the Effective Time or the
termination of this Agreement, unless the prior written consent of FFC shall
have been obtained, and except as otherwise expressly contemplated herein, SPAH
shall; (i) operate its business only in the usual, regular and ordinary course;
(ii) use commercially reasonable efforts to preserve intact its business
organization and Assets and maintain its rights and franchises; (iii) use
commercially reasonable efforts to cause its representations and warranties to
be correct at all times; (iv) use commercially reasonable efforts to provide all
information requested by FFC related to loans or other transactions made by SPAH
with a value equal to or exceeding $1,000,000, (v) consult with FFC prior to
entering into or making any loans or other transactions with a value equal to or
exceeding $1,000,000; and (iv) take no action which would (A) adversely affect
the ability of any Party to obtain any Consents required for the transactions
contemplated hereby without imposition of a condition or restriction of the type
referred to in the last sentences of Sections 9.1(b) and 9.1(c) or, or (B)
materially adversely affect the ability of any Party to perform its covenants
and agreements under this Agreement. Failure by FFC to object to any
action set forth in clauses (iv) and (v) of this Section 7.3 within 48-hours of
FFC receiving prior written notice of such action, shall be deemed as consent by
FFC to such action.
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|
7.4
|
Adverse
Changes in Condition.
|
Each
Party agrees to give written notice promptly to the other Party upon becoming
aware of the occurrence or impending occurrence of any event or circumstance
relating to it or any of its Subsidiaries which (i) has had or is reasonably
likely to have, individually or in the aggregate, a FFC Material Adverse Effect
or a SPAH Material Adverse Effect, as applicable, (ii) would cause or constitute
a material breach of any of its representations, warranties, or covenants
contained herein, or (iii) would be reasonably likely to prevent or materially
interfere with the consummation of the Merger, and to use commercially
reasonable efforts to prevent or promptly to remedy the same.
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|
7.5
|
Reports.
|
Each of
SPAH, FFC and FFC’s Subsidiaries shall file all reports required to be filed by
it with Regulatory Authorities between the date of this Agreement and the
Effective Time and shall deliver to the other Party copies of all such reports
promptly after the same are filed. Each of the SPAH Financial
Statements and the FFC Financial Statements prepared after the date of this
Agreement, whether or not contained in any such reports filed under the Exchange
Act or with any other Regulatory Authority, will fairly present in all material
respects the financial position of the entity filing such statements as of the
dates indicated and the consolidated results of operations, changes in
stockholders’ equity, and cash flows for the periods then ended in accordance
with GAAP (subject in the case of interim financial statements to normal
recurring year-end adjustments that are not material). As of their
respective dates, such reports filed under the Exchange Act or with any other
Regulatory Authority will comply in all material respects with the Securities
Laws and will not contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances under which they were
made, not misleading. Any financial statements contained in any other
reports to another Regulatory Authority shall be prepared in accordance with the
Laws applicable to such reports.
58
|
|
7.6
|
Claims
Against Trust Account.
|
FFC
understands that, except for a portion of the interest earned on the amounts
held in the Trust Fund, SPAH may disburse monies from the Trust Fund only: (a)
to its public stockholders who exercise their conversion rights or in the event
of the dissolution and liquidation of SPAH, (b) to SPAH (less SPAH’s deferred
underwriting compensation only) after SPAH consummates a business combination
(as described in the Prospectus) or (c) as consideration to the sellers of a
target business with which SPAH completes a business combination.
FFC
agrees that, notwithstanding any other provision contained in this Agreement,
FFC does not now have, and shall not at any time prior to the Effective Time
have, any claim to, or make any claim against, the Trust Fund, regardless of
whether such claim arises as a result of, in connection with or relating in any
way to, the business relationship between FFC on the one hand, and SPAH on the
other hand, this Agreement, or any other agreement or any other matter, and
regardless of whether such claim arises based on contract, tort, equity or any
other theory of legal liability (any and all such claims are collectively
referred to in this Section 7.6 as the “Claims”). Notwithstanding
any other provision contained in this Agreement, FFC hereby irrevocably waives
any Claim it may have, now or in the future (in each case, however, prior to the
consummation of a business combination), and will not seek recourse against the
Trust Fund for any reason whatsoever in respect thereof. In the event
that FFC commences any action or proceeding based upon, in connection with,
relating to or arising out of any matter relating to SPAH, which proceeding
seeks, in whole or in part, relief against the Trust Fund or the public
stockholders of SPAH, whether in the form of money damages or injunctive relief,
SPAH shall be entitled to recover from FFC the associated legal fees and costs
in connection with any such action, in the event SPAH prevails in such action or
proceeding.
ARTICLE
8
ADDITIONAL
AGREEMENTS
|
|
8.1
|
Registration
Statement; Joint Proxy Statement.
|
(a) Each
of SPAH and FFC agrees to cooperate in the preparation of a Registration
Statement on Form S-4 to be filed by SPAH with the SEC and any other filings to
be made by either Party, including filings of Current Reports on Form 8-K, with
the SEC or any other Regulatory Authority, in connection with the issuance of
SPAH Common Stock in the Merger and the consummation of the
Merger. Each of SPAH and FFC agrees to use commercially reasonable
efforts to cause the Registration Statement to be filed within ten (10) Business
Days of the date of this Agreement and to be declared effective under the
Securities Act as promptly as reasonably practicable after filing
thereof. Each of SPAH and FFC shall furnish to each other all
information concerning them that they may reasonably require in connection with
the Registration Statement. FFC acknowledges and agrees that SPAH
shall have primary responsibility for the preparation and filing of the
Registration Statement, that SPAH shall be entitled to include in the
Registration Statement any and all information and disclosure SPAH deems to be
reasonably necessary and FFC will not restrict SPAH from filing any amendments
to the Registration Statement.
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(b) SPAH
also agrees to use commercially reasonable efforts to obtain all necessary state
securities law or “Blue Sky” permits and approvals required to carry out the
transactions contemplated by this Agreement. FFC agrees to furnish
SPAH all information concerning FFC, the Bank, and their respective officers,
directors, and stockholders as may be reasonably requested in connection with
the foregoing. As a result of the registration of the SPAH Common
Stock pursuant to the Registration Statement, such stock shall be freely
tradable by the stockholders of FFC except to the extent that the transfer of
any shares of SPAH Common Stock received by stockholders of FFC is subject to
the provisions of Rule 145 under the Securities Act or restricted under Tax
rules. Notwithstanding the foregoing, the executive officers and
directors of FFC, the stockholders beneficially owning 5% or more of FFC’s
outstanding equity securities (other than Barclay’s Global Investors, State
Street Bank and Trust Company and other institutional investors) and the
executive officers and directors of the Bank will be prohibited from selling or
transferring shares received pursuant to the Merger for a period of one (1) year
from the date such shares are issued, unless such directors or officers cease to
be directors or officers of the Surviving Corporation upon consummation of the
Merger.
(c) Each
of SPAH and FFC agrees, as to itself and its Subsidiaries, that (i) none of the
information supplied or to be supplied by it for inclusion or incorporation by
reference in the Registration Statement will, at the time the Registration
Statement and each amendment or supplement thereto, if any, becomes effective
under the Securities Act, contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary to
make the statements therein not misleading and (ii) none of the information
supplied by it or any of its respective Subsidiaries for inclusion or
incorporation by reference in the Joint Proxy Statement will at the date of the
mailing to its stockholders or at the time of the meeting of its stockholders
and warrantholders held for the purpose of obtaining the SPAH Stockholder
Approval, the SPAH Warrantholder Approval, or the FFC Stockholder Approval, as
applicable, contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to make the
statements therein not misleading. Each of SPAH and FFC further
agrees that if it shall become aware prior to the Effective Date of any
information that would cause any of the statements in the Registration Statement
or Joint Proxy Statement to be false or misleading with respect to any material
fact, or to omit to state any material fact necessary to make the statements
therein not false or misleading, to promptly inform the other Party thereof and
to take the necessary steps to correct the Joint Proxy Statement.
(d) In
the case of SPAH, SPAH will advise FFC, promptly after SPAH receives notice
thereof, of the time when the Registration Statement has become effective or any
supplement or amendment has been filed, or of the issuance of any stop order or
the suspension of the qualification of the SPAH Common Stock for offering or
sale in any jurisdiction, of the initiation or threat of any proceeding for any
such purpose, or of any request by the SEC for the amendment or supplement of
the Registration Statement or for additional information.
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|
|
8.2
|
Stockholder
and Warrantholder Approvals.
|
(a) SPAH
shall call a stockholders and warrantholders meeting, to be held as soon as
reasonably practicable after the Joint Proxy Statement is cleared by the SEC,
for the purpose of voting upon adoption of this Agreement, the amendments to
SPAH’s Certificate of Incorporation set forth in Exhibit A hereto, the
Warrant Amendment Agreement and such other related matters as it deems
appropriate. FFC shall call a stockholders meeting, to be held as
soon as reasonably practicable after the Joint Proxy Statement is cleared by the
SEC, for the purpose of voting upon the adoption of this Agreement and such
other related matters as it deems appropriate. The Parties shall
coordinate and cooperate with respect to the timing of such meetings and shall
use commercially reasonable efforts to hold such meetings on the same
day.
(b) In
connection with the Stockholders Meetings, (i) SPAH and FFC shall mail the Joint
Proxy Statement to their respective stockholders, (ii) the Boards of Directors
of SPAH and FFC shall recommend to their respective stockholders and
warrantholders, as applicable, the approval of the matters submitted for
approval and (iii) the Boards of Directors and officers of SPAH and FFC shall
use commercially reasonable efforts to obtain such stockholder and warrantholder
approval; provided that
each of SPAH and FFC may withdraw, modify, or change in an adverse manner to the
other Party its recommendations of the Board of Directors of such Party if,
after having consulted with and based upon the advice of counsel, such Party
determines in good faith that the failure to so withdraw, modify or change its
recommendation could constitute a breach of the fiduciary duties of such Party’s
Board of Directors under applicable Law.
|
|
8.3
|
Other
Offers, etc.
|
(a) Neither
SPAH nor any FFC Entity shall, nor shall either Party authorize or permit any of
their respective Affiliates or Representatives to, directly or indirectly (i)
solicit, initiate, encourage or induce the making, submission or announcement of
any Acquisition Proposal, (ii) participate in any discussions or negotiations
regarding, or furnish to any Person or “Group” (as such term is defined in
Section 13(d) under the Exchange Act) any nonpublic information with respect to,
or take any other action to facilitate any inquiries or the making of any
proposal that constitutes or may reasonably be expected to lead to, any
Acquisition Proposal, (iii) subject to Section 8.3(c), approve, endorse or
recommend any Acquisition Proposal, or (iv) enter into any definitive agreement
contemplating or otherwise relating to any Acquisition Transaction; provided, however, that this
Section 8.3 shall not prohibit either Party from furnishing nonpublic
information regarding itself and in the case of FFC, any FFC Entity, to or
entering into a confidentiality agreement or discussions or negotiations with,
any Person or Group in response to a bona fide unsolicited written Acquisition
Proposal submitted by such Person or Group (and not withdrawn) if (A) neither
SPAH nor any FFC Entity or their respective Representatives or Affiliates, as
applicable, shall have violated any of the restrictions set forth in this
Section 8.3, (B) the Board of Directors of SPAH or FFC, as the case may be, in
its good faith judgment (based on, among other things, the advice of their
respective independent financial advisors, including for FFC, Sandler ▇’▇▇▇▇▇,
or such other independent financial advisor as the FFC Board may select), that
such Acquisition Proposal constitutes a Superior Proposal, (C) the Board of
Directors of SPAH or FFC, as the case may be, concludes in good faith, after
consultation with and receipt of a written opinion from its outside legal
counsel, that the failure to take such action would be inconsistent with its
fiduciary duties, as such duties would exist in the absence of this Section 8.3,
to the stockholders of SPAH or FFC, as the case may be, under applicable Law,
(D) (1) at least five Business Days prior to furnishing any such nonpublic
information to, or entering into discussions or negotiations with, such Person
or Group, the Party gives the other Party written notice of the identity of such
Person or Group and of such Party’s intention to furnish nonpublic information
to, or enter into discussions or negotiations with, such Person or Group, and
(2) such Party receives from such Person or Group an executed confidentiality
agreement containing terms no less favorable to the disclosing Party than the
confidentiality terms of this Agreement, and (E) contemporaneously with
furnishing any such nonpublic information to such Person or Group, such Party
furnishes such nonpublic information to the other Party (to the extent such
nonpublic information has not been previously furnished by such
Party). In addition to the foregoing, such Party shall provide the
other Party with at least five Business Days’ prior written notice of a meeting
of its Board of Directors at which meeting such Board of Directors is reasonably
expected to resolve to recommend a Superior Proposal of SPAH or FFC, as the case
may be, to its stockholders and together with such notice a copy of the most
recently proposed documentation relating to such Superior Proposal; provided, further, that such
Party hereby agrees promptly to provide to the other Party any revised
documentation and any definitive agreement relating to such Superior
Proposal.
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(b) In
addition to the obligations set forth in this Section 8.3, as promptly as
practicable, after any of the directors or executive officers of SPAH or FFC, as
the case may be, become aware thereof, the applicable Party shall advise the
other Party of (x) any request received by it for nonpublic information which
such Party reasonably believes could lead to an Acquisition Proposal or (y) any
Acquisition Proposal, the material terms and conditions of such request or
Acquisition Proposal, and the identity of the Person or Group making any such
request or Acquisition Proposal. Each Party shall keep the other
Party informed promptly of material amendments or modifications to any such
request or Acquisition Proposal.
(c) SPAH
and each FFC Entity shall, and shall cause their respective directors, officers,
employees and Representatives to immediately cease any and all existing
activities, discussions or negotiations with any Persons conducted heretofore
with respect to any Acquisition Proposal and will use and cause to be used
commercially reasonable efforts to enforce any confidentiality or similar or
related agreement relating to any Acquisition Proposal.
(d) Nothing
contained in this Agreement shall prevent a Party or its Board of Directors from
complying with Rule 14d-9 and Rule 14e-2 under the Exchange Act with respect to
an Acquisition Proposal; provided that, such Rules
will in no way eliminate or modify the effect that any action pursuant to such
Rules would otherwise have under this Agreement.
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8.4
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Consents
of Regulatory Authorities.
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The
Parties hereto shall cooperate with each other and use commercially reasonable
efforts to promptly prepare and file all necessary documentation and
applications, to effect all applications, notices, petitions and filings, and to
obtain as promptly as practicable all Consents of all Regulatory Authorities and
other Persons which are necessary or advisable to consummate the transactions
contemplated by this Agreement (including the Merger), including those set forth
on Schedule 8.4. Each of SPAH and FFC agrees to use commercially
reasonable efforts to cause the necessary documentation and applications to be
filed with the Regulatory Authorities within ten (10) Business Days of the date
of this Agreement. The Parties agree that they will consult with each
other with respect to the obtaining of all Consents of all Regulatory
Authorities and other Persons necessary or advisable to consummate the
transactions contemplated by this Agreement and each Party will keep the other
apprised of the status of matters relating to contemplation of the transactions
contemplated herein. Each Party also shall promptly advise the other
upon receiving any communication from any Regulatory Authority or other Person
whose Consent is required for consummation of the transactions contemplated by
this Agreement which causes such Party to believe that there is a reasonable
likelihood that any requisite Consent will not be obtained or that the receipt
of any such Consent will be materially delayed.
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8.5
|
Agreement
as to Efforts to Consummate.
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Subject
to the terms and conditions of this Agreement, each Party agrees to use, and to
cause its Subsidiaries to use, commercially reasonable efforts to take, or cause
to be taken, all actions, and to do, or cause to be done, all things necessary,
proper, or advisable under applicable Laws to consummate and make effective, as
soon as reasonably practicable after the date of this Agreement, the
transactions contemplated by this Agreement, including using commercially
reasonable efforts to lift or rescind any Order adversely affecting its ability
to consummate the transactions contemplated herein and to cause to be satisfied
the conditions referred to in Article 9; provided that, nothing herein
shall preclude either Party from exercising its rights under this
Agreement.
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8.6
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Investigation
and Confidentiality.
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(a) Prior
to the Effective Time, each Party shall keep the other Party advised of all
material developments relevant to its business and the consummation of the
Merger and shall permit the other Party to make or cause to be made such
investigation of its business and properties (including that of its
Subsidiaries) and of their respective financial and legal conditions as the
other Party reasonably requests; provided that such
investigation shall be reasonably related to the transactions contemplated
hereby and shall not interfere unnecessarily with normal
operations. No investigation by a Party shall affect the ability of
such Party to rely on the representations and warranties of the other
Party. Between the date hereof and the Effective Time, FFC shall
permit SPAH’s senior officers and independent public accountants to meet with
the respective senior officers of FFC, including officers responsible for the
FFC Financial Statements, the internal controls of FFC and the disclosure
controls and procedures of FFC and FFC’s independent public accountants to
discuss such matters as SPAH may deem reasonably necessary or appropriate for
SPAH to satisfy its obligations under Sections 302, 404 and 906 of the
▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act. FFC shall permit Representatives of SPAH to
attend meetings of FFC’s Board of Directors or any committee thereof as an
observer, except that the Chief Executive Officer of SPAH may not attend, unless
otherwise permitted by FFC, any portion of such meeting during which this
Agreement and the transactions contemplated hereby are discussed or where
litigation involving FFC is being discussed and counsel for FFC has advised FFC
that the presence of SPAH representatives may jeopardize the attorney/client
privilege.
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(b) In
addition to each Party’s obligations pursuant to Section 8.6(a), each Party
shall, and shall cause its advisors and agents to, maintain the confidentiality
of all confidential information furnished to it by the other Party concerning
its and its Subsidiaries’ businesses, operations, and financial positions and
shall not use such information for any purpose except in furtherance of the
transactions contemplated by this Agreement. If this Agreement is
terminated prior to the Effective Time, each Party shall promptly return or
certify the destruction of all documents and copies thereof, and all work papers
containing confidential information received from the other Party.
(c) Each
Party agrees to give the other Party notice as soon as practicable after any
determination by it of any fact or occurrence relating to the other Party which
it has discovered through the course of its investigation and which represents,
or is reasonably likely to represent, either a material breach of any
representation, warranty, covenant or agreement of the other Party or which has
had or is reasonably likely to have a FFC Material Adverse Effect or a SPAH
Material Adverse Effect, as applicable.
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8.7
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Press
Releases.
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(a) Prior
to the Effective Time, SPAH and FFC shall consult with each other as to the form
and substance of any press release, communication with their respective
stockholders, or other public disclosure materially related to this Agreement or
any other transaction contemplated hereby; provided that nothing in this
Section 8.7 shall be deemed to prohibit any Party from making any disclosure
which its counsel deems necessary or advisable in order to satisfy such Party’s
disclosure obligations imposed by Law.
(b) In
conjunction with, or as soon as practicable following, the execution of this
Agreement, the Parties shall jointly prepare and issue a joint press release
announcing the Merger and date of the execution of this
Agreement. Any such announcement shall be made following the closing
of trading on the NYSE Amex and the NASDAQ.
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8.8
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Charter
Provisions.
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Each FFC
Entity shall take all necessary action to ensure that the entering into of this
Agreement and the consummation of the Merger and the other transactions
contemplated hereby do not and will not result in the grant of any rights to any
Person under the Articles of Incorporation, Bylaws or other governing
instruments of any FFC Entity or restrict or impair the ability of SPAH to vote,
or otherwise to exercise the rights of a stockholder with respect to, shares of
any FFC Entity that may be directly or indirectly acquired or controlled by
them.
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8.9
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Employee
Benefits and Contracts.
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(a) Following
the Effective Time, SPAH shall provide generally to officers and employees of
the FFC Entities employee benefits under employee benefit and welfare plans
(other than stock option or other plans involving the potential issuance of SPAH
Common Stock) on terms and conditions which when taken as a whole are comparable
to or better than those then provided by the FFC Entities to their similarly
situated officers and employees. Following the Effective Time, SPAH
shall adopt such stock option or other equity plans for officers and employees
of the FFC Entities as the board of directors of the Surviving Corporation deems
appropriate. For purposes of participation and vesting under any
employee benefit plans of the Surviving Corporation, whether new or existing,
the service of the employees of the FFC Entities prior to the Effective Time
shall be treated as service with a SPAH Entity participating in such employee
benefit plans.
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(b) No
provision of this Agreement constitutes or shall give rise to, or shall be
deemed to constitute or give rise to, an employment agreement or
employment-related right or entitlement, an employee benefit or employee
benefit-related plan, program or other arrangement, a provision of any such
plan, program or other arrangement, or an amendment of any such plan, program or
other arrangement.
(c) Nothing
in this Section 8.9 or any other provision of this Agreement shall prevent or
limit or shall be interpreted as preventing or limiting the Surviving
Corporation, from and after the Effective Time, from amending, modifying or
terminating any Employee Benefit Plan or any other contracts, arrangements,
commitments or plans of the Surviving Corporation, SPAH or any FFC Entity; or
shall limit the Right of the Surviving Corporation to terminate the employment
of any employee at any time.
(d) Simultaneously
with the execution of this Agreement, each director and executive officer of FFC
and the Bank and each FFC stockholder owning 5% or more of FFC Common Stock
(other than Barclay’s Global Investors, State Street Bank and Trust Company and
other institutional investors), shall execute and deliver to SPAH a Support
Agreement in the form attached hereto as Exhibit
C.
(e) FFC
shall cause each of the directors and executive officers of FFC and the Bank,
each FFC stockholder beneficially owning 5% (other than Barclay’s Global
Investors, State Street Bank and Trust Company and other institutional
investors) or more of FFC’s outstanding equity securities and each other Person
whom FFC reasonably believes may be deemed an “affiliate” of FFC for purposes of
Rule 145 under the Securities Act to deliver to SPAH not later than 30 days
prior to the Effective Time, a written agreement, in substantially the form of
Exhibit D (a
“Lock-up
Agreement”), providing that such Person will not sell, pledge, transfer,
or otherwise dispose of the shares of FFC Common Stock held by such Person
except as contemplated by such agreement or by this Agreement and will not sell,
pledge, transfer or otherwise dispose of the shares of SPAH Common Stock to be
received by such Person upon consummation of the Merger except in compliance
with applicable provisions of the Securities Act and the rules and regulations
thereunder (and SPAH shall be entitled to place restrictive legends upon
certificates for shares of SPAH Common Stock issued to affiliates of FFC
pursuant to this Agreement to enforce the provisions of this Section
8.9). SPAH shall not be required to maintain the effectiveness of the
Registration Statement under the Securities Act of the purposes of resale of
SPAH Common Stock by such affiliates.
(f) The
Surviving Corporation will, as of and after the Effective Time, assume and honor
all FFC severance and change of control agreements that any FFC Entity had in
effect with its officers and directors on July 24, 2009, and which are set forth
in Schedule 8.9(f).
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8.10
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Indemnification.
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(a) For
a period of six years after the Effective Time, SPAH shall, and shall cause the
Surviving Corporation to, indemnify, defend and hold harmless the present and
former directors, officers, employees and agents of the FFC Entities (each, an
“Indemnified
Party”) against all Liabilities arising out of actions or omissions
arising out of the Indemnified Party’s service or services as directors,
officers, employees or agents of FFC and each of its Subsidiaries at or prior to
the Effective Time (including the transactions contemplated by this Agreement)
to the fullest extent permitted under the WBCA, the Securities Laws and FDIC
Regulations Part 359 promulgated thereunder and by FFC’s Articles of
Incorporation and Bylaws as in effect on the date hereof, including provisions
relating to advances of expenses incurred in the defense of any Litigation and
whether or not SPAH is insured against any such matter. Without
limiting the foregoing, in any case in which approval by the Surviving
Corporation is required to effectuate any indemnification, the Surviving
Corporation shall direct, at the election of the Indemnified Party, that the
determination of any such approval shall be made by independent counsel mutually
agreed upon between SPAH and the Indemnified Party.
(b) SPAH
shall, or shall cause the Surviving Corporation to, use commercially reasonable
efforts (and FFC shall cooperate prior to the Effective Time in these efforts)
to maintain in effect for a period of six years after the Effective Time FFC’s
existing directors’ and officers’ liability insurance policy (provided that SPAH
or the Surviving Corporation may substitute therefor (i) policies of
substantially the same coverage and amounts containing terms and conditions
which are substantially no less advantageous or (ii) with the consent of FFC
given prior to the Effective Time, any other policy) with respect to claims
arising from facts or events which occurred prior to the Effective Time and
covering persons who are currently covered by such insurance; provided that none of FFC,
SPAH nor the Surviving Corporation shall be obligated to make aggregate premium
payments longer than six years in respect of such policy (or coverage replacing
such policy) and which exceed, for the portion related to FFC’s directors and
officers, 400% of the annual premium payments on FFC’s current policy in effect
as of the date of this Agreement (the “Maximum
Amount”). If the amount of the premiums necessary to maintain
or procure such insurance coverage exceeds the Maximum Amount, SPAH or the
Surviving Corporation shall use commercially reasonable efforts to maintain the
most advantageous policies of directors’ and officers’ liability insurance
obtainable for a premium equal to the Maximum Amount, but shall not be obligated
to maintain any insurance coverage to the extent the cost of such coverage
exceeds the Maximum Amount.
(c) Any
Indemnified Party wishing to claim indemnification under paragraph (a) of this
Section 8.10, upon learning of any such Liability or Litigation, shall promptly
notify SPAH thereof in writing. In the event of any such Litigation
(whether arising before or after the Effective Time), (i) SPAH or the Surviving
Corporation shall have the right to assume the defense thereof and neither SPAH
nor the Surviving Corporation shall be liable to such Indemnified Parties for
any legal expenses of other counsel or any other expenses subsequently incurred
by such Indemnified Parties in connection with the defense thereof, except that
if SPAH or the Surviving Corporation elects not to assume such defense or
counsel for the Indemnified Parties advises that there are substantive issues
which raise conflicts of interest between SPAH or the Surviving Corporation and
the Indemnified Parties, the Indemnified Parties may retain counsel satisfactory
to them, and SPAH or the Surviving Corporation shall pay all reasonable fees and
expenses of such counsel for the Indemnified Parties promptly as statements
therefore are received; provided that SPAH and the
Surviving Corporation shall be obligated pursuant to this paragraph (c) to pay
for only one firm of counsel for all Indemnified Parties in any jurisdiction;
(ii) the Indemnified Parties will cooperate in good faith in the defense of any
such Litigation; and (iii) neither SPAH nor the Surviving Corporation shall be
liable for any settlement effected without its prior written consent and which
does not provide for a complete and irrevocable release of all SPAH’s Entities
and their respective directors, officers and controlling persons, employees,
agents and Representatives; and provided, further, that
neither SPAH nor the Surviving Corporation shall have any obligation hereunder
to any Indemnified Party when and if a court of competent jurisdiction shall
determine, and such determination shall have become final, that the
indemnification of such Indemnified Party in the manner contemplated hereby is
prohibited by applicable Law.
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(d) If
SPAH or the Surviving Corporation or any successors or assigns shall consolidate
with or merge into any other Person and shall not be the continuing or surviving
Person of such consolidation or merger or shall transfer all or substantially
all of its assets to any Person, then and in each case, proper provision shall
be made so that the successors and assigns of SPAH or the Surviving Corporation
shall assume the obligations set forth in this Section 8.10.
(e) The
provisions of this Section 8.10 are intended to be for the benefit of and shall
be enforceable by, each Indemnified Party and their respective heirs and legal
and personal representatives.
ARTICLE
9
CONDITIONS
PRECEDENT TO OBLIGATIONS TO CONSUMMATE
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9.1
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Conditions
to Obligations of Each Party.
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The
respective obligations of each Party to perform this Agreement and consummate
the Merger and the other transactions contemplated hereby are subject to the
satisfaction of the following conditions, unless waived by both Parties pursuant
to Section 11.5:
(a) Stockholder and
Warrantholder Approvals. The FFC Stockholder Approval, SPAH
Stockholder Approval and the SPAH Warrantholder Approval shall have been
received in accordance with applicable Law.
(b) Regulatory
Approvals. All Consents of, filings and registrations with,
and notifications to, all Regulatory Authorities required for consummation of
transactions contemplated by this Agreement (including the Merger) shall have
been obtained or made and shall be in full force and effect and all waiting
periods required by Law shall have expired, including those set forth on
Schedule 8.4. No Consent obtained from any Regulatory Authority which
is necessary to consummate the transactions contemplated hereby shall be
conditioned or restricted in any manner (including any conditions or
requirements imposed on Bank and any requirements relating to the raising of
additional capital or the disposition of Assets imposed on any FFC
Entity).
(c) Consents and
Approvals. Each Party shall have obtained any and all Consents
required for consummation of the Merger (other than those referred to in Section
9.1(b)) or for the preventing of any Default under any Contract or Permit of
such Party which, if not obtained or made, is reasonably likely to have,
individually or in the aggregate, a FFC Material Adverse Effect or a SPAH
Material Adverse Effect, as applicable. No Consent so obtained which
is necessary to consummate the transactions contemplated hereby shall be
conditioned or restricted in a manner which in the reasonable judgment of the
Board of Directors of SPAH (in the case of a Consent obtained by FFC) or in the
reasonable judgment of the Board of Directors of FFC (in the case of a Consent
obtained by SPAH) would so materially adversely affect the economic or business
benefits of the transactions contemplated by this Agreement that, had such
condition or requirement been known, SPAH or FFC, as applicable, would not, in
its reasonable judgment, have entered into this Agreement.
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(d) No Injunctions or
Restraints; Illegality. Except as disclosed on Schedule
5.13(d), no Governmental Authority of competent jurisdiction shall have enacted,
issued, promulgated, enforced or entered any Law or Order (whether temporary,
preliminary or permanent) or taken any other action which prohibits, restricts
or makes illegal consummation of the transactions contemplated by this
Agreement.
(e) Exchange
Listing. The shares of Surviving Corporation common stock, and
the warrants to purchase shares of Surviving Corporation common stock, issuable
pursuant to the Merger shall have been approved for listing on NYSE Amex or the
NASDAQ, subject to official notice of issuance.
(f) Registration
Statement. The Registration Statement shall have become
effective under the Securities Act and no stop order suspending the
effectiveness of the Registration Statement shall have been issued and no
proceedings for that purpose shall have been initiated or threatened by the
SEC.
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9.2
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Conditions
to Obligations of SPAH.
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The
obligations of SPAH to perform this Agreement and consummate the Merger and the
other transactions contemplated hereby are subject to the satisfaction of the
following conditions, unless waived by SPAH pursuant to Section
11.5(a):
(a) Representations and
Warranties. For purposes of this Section 9.2(a), the accuracy
of the representations and warranties of FFC set forth in this Agreement shall
be assessed as of the date of this Agreement and as of the Effective Time with
the same effect as though all such representations and warranties had been made
on and as of the Effective Time (provided that representations and warranties
which are confined to a specified date shall speak only as of such
date). There shall not exist inaccuracies in the representations and
warranties of FFC set forth in this Agreement such that the aggregate effect of
such inaccuracies has, or is reasonably likely to have, a FFC Material Adverse
Effect; provided that
for purposes of this sentence only, those representations and warranties which
are qualified by references to “material” or “Material Adverse Effect” or to the
“Knowledge” of any Person shall be deemed not to include such
qualifications.
(b) Performance of Agreements
and Covenants. Each and all of the agreements and covenants of
FFC to be performed and complied with pursuant to this Agreement and the other
agreements contemplated hereby prior to the Effective Time shall have been duly
performed and complied with in all material respects.
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(c) Certificates. FFC
shall have delivered to SPAH (i) a certificate, dated as of the Effective Time
and signed on its behalf by its chief executive officer and its chief financial
officer, to the effect that the conditions set forth in Section 9.1 as they
relate to FFC and in Sections 9.2(a), 9.2(b) and 9.2(i) have been satisfied, and
(ii) certified copies of resolutions duly adopted by FFC’s Board of Directors
and stockholders evidencing the taking of all corporate action necessary to
authorize the execution, delivery and performance of this Agreement, and the
consummation of the transactions contemplated hereby, all in such reasonable
detail as SPAH and its counsel shall reasonably request.
(d) Support Agreements and
Lock-up Agreements. Each director and executive officer of FFC
and the Bank and each stockholder beneficially owning 5% or more of FFC’s
outstanding equity securities (other than Barclay’s Global Investors, State
Street Bank and Trust Company and other institutional investors), shall have
executed and delivered to SPAH a Support Agreement in the form attached hereto
as Exhibit
C. Each of the directors and executive officers of FFC and the
Bank, each FFC stockholder beneficially owning 5% or more of FFC’s outstanding
equity securities (other than Barclay’s Global Investors, State Street Bank and
Trust Company and other institutional investors) and each other Person whom FFC
reasonably believes may be deemed an “affiliate” of FFC for purposes of Rule 145
under the Securities Act shall have executed and delivered to SPAH Lock-up
Agreements in the forms attached hereto as Exhibit
D.
(e) Warrant Amendment
Agreement. SPAH shall have received from Continental Stock Transfer &
Trust Company a duly executed Warrant Amendment Agreement in the form attached
hereto as Exhibit
E.
(f) Tax
Matters. SPAH shall have received a written opinion of counsel
from Proskauer Rose LLP, in a form reasonably satisfactory to SPAH dated as of
the Effective Time (“SPAH Tax Opinion”) to
the effect that the Merger will constitute a reorganization with the meaning of
Section 368(a) of the Code and related matters. In rendering such
opinion, Proskauer Rose LLP will be entitled to receive and rely upon customary
certificates and representations of officers of SPAH and FFC.
(g) Conversion
Rights. Less than 10% of the holders of the outstanding shares
of SPAH IPO Common Stock shall have voted against the Merger and exercised their
Conversion Rights.
(h) Board of Directors and
Management. Since the date of this Agreement, there shall have
been no material changes in the members of the Board of Directors of FFC and the
management of FFC.
(i) No Material Adverse
Change. During the period from the execution of this Agreement to the
Effective Date, there shall have occurred or be threatened no event related to
or involving FFC and/or its Subsidiaries which is reasonably likely,
individually or in the aggregate to have an FFC Material Adverse
Effect.
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(j) Modification of
Order. Each of (i) that certain Cease and Desist Order, dated
March 20, 2009, and the related inquiry by the FDIC and the State of Washington,
as such matters are more fully described in the Quarterly Report of FFC on Form
10-Q for the fiscal quarter ended on March 31, 2009 and (ii) that certain
Written Agreement between FFC and the Federal Reserve dated July 2, 2009, and
(iii) that certain Memorandum of Understanding between the Board of Directors of
FFC and the Regional Director of the FDIC executed by Frontier on August 20,
2008, shall have been modified in a manner reasonably acceptable to SPAH,
including by the elimination of certain provisions and consequences related
thereto.
(k) Dissenters
Rights. Holders of no more than 10% of the outstanding shares of
FFC Common Stock entitled to vote on the Merger shall have exercised their
dissenters’ rights.
(l) Consents. The
consents and approvals of third parties set forth on Schedule 5.17(b) hereto
shall have been duly obtained, made or given and shall be in full force and
effect, without the imposition upon SPAH of any condition, restriction or
required undertaking.
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9.3
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Conditions
to Obligations of FFC.
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The
obligations of FFC to perform this Agreement and consummate the Merger and the
other transactions contemplated hereby are subject to the satisfaction of the
following conditions, unless waived by FFC pursuant to Section
11.5(b):
(a) Representations and
Warranties. For purposes of this Section 9.3(a), the accuracy
of the representations and warranties of SPAH set forth in this Agreement shall
be assessed as of the date of this Agreement and as of the Effective Time with
the same effect as though all such representations and warranties had been made
on and as of the Effective Time (provided that representations and warranties
which are confined to a specified date shall speak only as of such
date). There shall not exist inaccuracies in the representations and
warranties of SPAH set forth in this Agreement such that the aggregate effect of
such inaccuracies has, or is reasonably likely to have, a SPAH Material Adverse
Effect; provided that,
for purposes of this sentence only, those representations and warranties which
are qualified by references to “material” or “Material Adverse Effect” or to the
“Knowledge” of any Person shall be deemed not to include such
qualifications.
(b) Performance of Agreements
and Covenants. Each and all of the agreements and covenants of
SPAH to be performed and complied with pursuant to this Agreement and the other
agreements contemplated hereby prior to the Effective Time shall have been duly
performed and complied with in all material respects.
(c) Certificates. SPAH
shall have delivered to FFC (i) a certificate, dated as of the Effective Time
and signed on its behalf by its chief executive officer and its chief financial
officer, to the effect that the conditions set forth in Section 9.1 as they
relate to SPAH and in Sections 9.3(a), 9.3(b) and 9.3(f) have been satisfied,
and (ii) certified copies of resolutions duly adopted by SPAH’s Board of
Directors evidencing the taking of all corporate action necessary to authorize
the execution, delivery and performance of this Agreement, and the consummation
of the transactions contemplated hereby, all in such reasonable detail as FFC
and its counsel shall request.
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(d) Tax
Matters. FFC shall have received a written opinion of counsel
from ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ L.L.P., in a form reasonably satisfactory to FFC dated as
of the Effective Time (“FFC Tax Opinion”) to
the effect that the Merger will constitute a reorganization with the meaning of
Section 368(a) of the Code and related matters. In rendering such
opinion, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ L.L.P. will be entitled to receive and rely upon
customary certificates and representations of officers of SPAH and
FFC.
(e) Fairness
Opinion. FFC shall have received a written opinion of ▇▇▇▇▇
▇▇▇▇▇▇▇▇, dated as the date of this Agreement, and confirmed in writing as of
the date of the FFC Stockholders Meeting, to the effect that the Merger
Consideration is fair, from the financial point of view, to the holders of FFC
Common Stock.
(f) No Material Adverse
Change. During the period from the execution of this Agreement to the
Effective Date, there shall have occurred or be threatened no event related to
or involving SPAH, which is reasonably likely, individually or in the aggregate
to have SPAH Material Adverse Effect.
(g) Stock
Forfeiture. SP Acq LLC shall have forfeited 8,987,883 shares
of SPAH Common Stock held by them and the members of the Board of Directors of
SPAH shall have forfeited an aggregate of 465,529 shares of SPAH Common Stock
held by them.
(h) Distribution of the SPAH
Trust Fund. SPAH shall have taken all necessary action in
accordance with the SPAH Trust Agreement to allow the distribution of all of the
assets in the Trust Fund to the Surviving Corporation as of the Effective
Time.
ARTICLE
10
TERMINATION
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10.1
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Termination.
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Notwithstanding
any other provision of this Agreement, and notwithstanding the approval of this
Agreement by the stockholders of FFC or SPAH, this Agreement may be terminated
and the Merger abandoned at any time prior to the Effective Time:
(a) By
mutual written agreement of SPAH and FFC; or
(b) By
either Party (provided, that the terminating Party is not then in material
breach of any representation, warranty, covenant, or other agreement contained
in this Agreement) in the event of a material breach by the other Party of any
representation or warranty, covenant or agreement contained in this Agreement
which cannot be or has not been cured within 5 days after the giving of written
notice by the non-breaching Party to the breaching Party of such breach;
or
(c) By
either Party in the event (i) any Consent of any Regulatory Authority required
for consummation of the Merger and the other transactions contemplated hereby
shall have been denied by final nonappealable action of such authority or if any
action taken by such authority is not appealed within the time limit for appeal,
(ii) any Law or Order permanently restraining, enjoining or otherwise
prohibiting the consummation of the Merger shall have become final and
nonappealable, (iii) the stockholders of SPAH or FFC fail to vote their approval
of the matters relating to this Agreement and the transactions contemplated
hereby at SPAH’s Stockholders Meeting or FFC’s Stockholders’ Meeting,
respectively, where such matters were presented to such stockholders for
approval and voted upon, or (iv) if applicable, holders of 10% or more in
interest of the holders of SPAH IPO Common Stock vote against the Merger and
exercise their Conversion Rights; or
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(d) By
SPAH in the event that (i) (w) the Board of Directors of FFC, shall have failed
to reaffirm its approval, upon SPAH’s request for such reaffirmation, of the
Merger and the transactions contemplated by this Agreement (to the exclusion of
any other Acquisition Proposal) or shall have resolved not to reaffirm the
Merger, or (x) the Board of Directors of FFC shall have failed to include in the
Joint Proxy Statement its recommendation, without modification or qualification,
that the FFC stockholders give the FFC Stockholder Approval or shall have
withdrawn, qualified or modified, or proposed publicly to withdraw, qualify or
modify, in a manner adverse to SPAH, the recommendation of such Board of
Directors to the FFC stockholders that they give the FFC Stockholder Approval,
or (y) the Board of Directors of FFC shall have affirmed, recommended or
authorized entering into any Acquisition Transaction other than the Merger or,
within ten Business Days after commencement of any tender or exchange offer for
any shares of FFC Common Stock, the Board of Directors of FFC shall have failed
to recommend against acceptance of such tender or exchange offer by its
stockholders or shall have taken no position with respect to the acceptance of
such tender or exchange offer by its stockholders, or (z) the Board of Directors
of FFC negotiates or authorizes the conduct of negotiations (and five Business
Days have elapsed without such negotiations being discontinued) with a third
party (it being understood and agreed that “negotiate” shall not be deemed to
include the provision of information to, or the request and receipt of
information from, any Person that submits an Acquisition Proposal or discussions
regarding such information for the sole purpose of ascertaining the terms of
such Acquisition Proposal and determining whether the Board of Directors will in
fact engage in, or authorize, negotiations) regarding an Acquisition Proposal
other than the Merger, or (ii) (provided that SPAH is not then in material
breach of any representation, warranty, covenant, or other agreement contained
in this Agreement), prior to obtaining the SPAH Stockholder Approval at the SPAH
Stockholders Meeting, the Board of Directors of SPAH has (x) withdrawn or
modified or changed its recommendation or approval of this Agreement in a manner
adverse to FFC in order to approve and permit SPAH to accept a Superior Proposal
and (y) determined, after consultation with, and the receipt of advice from
outside legal counsel to SPAH, that the failure to take such action as set forth
in the preceding clause (x) would be likely to result in a breach of the Board
of Directors’ fiduciary duties under applicable Law; provided, however, that at
least five Business Days prior to such termination, SPAH shall deliver notice of
such termination and shall, and shall cause its Representatives to, negotiate
with FFC in good faith (to the extent FFC desires to negotiate) to make such
adjustments in the terms and conditions of this Agreement, and the Board of
Directors of SPAH shall take into account any changes to the financial and other
terms of this Agreement proposed by FFC in response to any such written notice
by SPAH or otherwise, so that the Acquisition Proposal ceases to constitute a
Superior Proposal (it being understood and agreed that any amendment to the
financial terms or other term of such Superior Proposal shall require a new
written notice by SPAH and a new five-Business Day period); or
72
(e) By
FFC in the event that (i) (w) the Board of Directors of SPAH, shall have failed
to reaffirm its approval, upon FFC’s request for such reaffirmation, of the
Merger and the transactions contemplated by this Agreement (to the exclusion of
any other Acquisition Proposal) or shall have resolved not to reaffirm the
Merger, or (x) the Board of Directors of SPAH shall have failed to include in
the Joint Proxy Statement its recommendation, without modification or
qualification, that SPAH stockholders give the SPAH Stockholder Approval or
shall have withdrawn, qualified or modified, or proposed publicly to withdraw,
qualify or modify, in a manner adverse to FFC, the recommendation of such Board
of Directors to the SPAH stockholders that they give the SPAH Stockholder
Approval, or (y) the Board of Directors of SPAH shall have affirmed, recommended
or authorized entering into any Acquisition Transaction other than the Merger
or, within ten Business Days after commencement of any tender or exchange offer
for any shares of SPAH Common Stock, the Board of Directors of SPAH shall have
failed to recommend against acceptance of such tender or exchange offer by its
stockholders or shall have taken no position with respect to the acceptance of
such tender or exchange offer by its stockholders, or (z) the Board of Directors
of SPAH negotiates or authorizes the conduct of negotiations (and five Business
Days have elapsed without such negotiations being discontinued) with a third
party (it being understood and agreed that “negotiate” shall not be deemed to
include the provision of information to, or the request and receipt of
information from, any Person that submits an Acquisition Proposal or discussions
regarding such information for the sole purpose of ascertaining the terms of
such Acquisition Proposal and determining whether the Board of Directors will in
fact engage in, or authorize, negotiations) regarding an Acquisition Proposal
other than the Merger, or (ii) (provided that FFC is not then in material breach
of any representation, warranty, covenant, or other agreement contained in this
Agreement), if prior to obtaining the FFC Stockholder Approval at the FFC
Stockholders’ Meeting, the Board of Directors of FFC has (x) withdrawn or
modified or changed its recommendation or approval of this Agreement in a manner
adverse to SPAH in order to approve and permit FFC to accept a Superior Proposal
and (y) determined, after consultation with, and the receipt of advice from
outside legal counsel to FFC, that the failure to take such action as set forth
in the preceding clause (x) would be likely to result in a breach of the Board
of Directors’ fiduciary duties under applicable Law; provided, however, that at
least five Business Days prior to such termination, FFC shall deliver notice of
such termination and shall, and shall cause its Representatives to, negotiate
with SPAH in good faith (to the extent SPAH desires to negotiate) to make such
adjustments in the terms and conditions of this Agreement, and the Board of
Directors of FFC shall take into account any changes to the financial and other
terms of this Agreement proposed by SPAH in response to any such written notice
by FFC or otherwise, so that the Acquisition Proposal ceases to constitute a
Superior Proposal (it being understood and agreed that any amendment to the
financial terms or other term of such Superior Proposal shall require a new
written notice by FFC and a new five-Business Day period); or
(f) By
either Party in the event that the Merger shall not have been consummated by
December 31, 2009, if the failure to consummate the transactions contemplated
hereby on or before such date is not caused by any breach of this Agreement by
the Party electing to terminate pursuant to this Section 10.1.
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10.2
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Effect
of Termination.
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In the
event of the termination of this Agreement in accordance with Section 10.1, this
Agreement shall become void and have no effect, except that (i) the provisions
of this Section 10.2 and Sections 7.6, 8.6(b), 11.1, 11.2, 11.8 and 11.14 shall
survive any such termination, and (ii) except as provided in Sections 7.6, 11.1
and 11.2, neither Party shall have any liability to the other upon termination
of this Agreement.
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10.3
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Non-Survival
of Representations and Covenants.
|
Except
for Article 2, Article 3, Article 4, Sections 8.6(b), 8.9, 8.10, Article 11 and
this Section 10.3, the respective representations, warranties, obligations,
covenants, and agreements of the Parties shall not survive the Effective
Time.
ARTICLE
11
MISCELLANEOUS
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11.1
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Expenses.
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(a) Except
as otherwise set forth in Section 8.11 and this Section 11.1, all Expenses
incurred in connection with this Agreement and the transactions contemplated
hereby shall be paid by the Party incurring such expenses, whether or not the
Merger or any other related transaction is consummated. As used in
this Agreement, "Expenses" shall
include all out-of-pocket expenses (including all fees and expenses of counsel,
accountants, investment bankers, financing sources, experts and consultants to a
Party hereto and its affiliates) incurred by a Party or on its behalf in
connection with or related to the authorization, preparation, negotiation,
execution or performance of this Agreement, the preparation, printing, filing or
mailing of the Registration Statement and Joint Proxy Statement (as applicable),
the solicitation of stockholder approvals and all other matters related to the
consummation of the Merger and the other transactions contemplated
hereby.
(b)
Notwithstanding the foregoing, if:
(i) SPAH
terminates this Agreement pursuant to Section 10.1(b) due to a breach by FFC,
either Party terminates pursuant to Section 10.1(c)(iii) or (iv) due to the
failure to obtain the FFC Stockholder Approval or either Party terminates
pursuant to Section 10.1(f) and, in the case of a termination under Section
10.1(c)(iii) or (iv) or Section 10.1(f), (x) there has been publicly announced
and not withdrawn another Acquisition Proposal relating to FFC or (y) FFC has
failed to perform and comply in all material respects with any of its
obligations, agreements or covenants required by this Agreement, and within 12
months of such termination FFC shall either (A) consummate an Acquisition
Transaction or (B) enter into a definitive agreement with respect to an
Acquisition Transaction, whether or not such Acquisition Transaction is
subsequently consummated (but changing, in the case of (A) and (B), the
references to 5% and 90% amounts in the definition of Acquisition Transaction to
50% and 80%, respectively); or
(ii) SPAH
terminates this Agreement pursuant to Section 10.1(d)(i);
74
then, FFC
shall pay to SPAH, an amount equal to $2,500,000 (the “Termination
Fee”). Each Party hereby waives any right to set-off or
counterclaim against such amount. If the Termination Fee shall be
payable pursuant to subsection (b)(i) of this Section 11.1 in connection with a
termination pursuant to Section 10.1(c)(iii) or 10.1(f), the Termination Fee
shall be paid in same-day funds at or prior to the earlier of the date of
consummation of such Acquisition Transaction or the date of execution of a
definitive agreement with respect to such Acquisition Transaction. If
the Termination Fee shall be payable pursuant to subsection (b)(ii) of this
Section 11.1, the Termination Fee shall be paid in same-day funds upon the
earlier of (i) the execution of a definitive agreement with respect to such
Acquisition Transaction or (ii) two Business Days from the date of termination
of this Agreement. If the Termination Fee shall be payable pursuant
to subsection (b)(i) of this Section 11.1 in connection with a termination
pursuant to Section 10.1(b), the Termination Fee shall be paid in same-day funds
at or prior to the termination of this
Agreement.
(c) The
Parties acknowledge that the agreements contained in Section 11.1(b) are an
integral part of the transactions contemplated by this Agreement and that
without these agreements, they would not enter into this Agreement; accordingly,
if a Party fails to pay promptly any fee payable by it pursuant to this Section
11.1, then such Party shall pay to the other Party, its costs and expenses
(including attorneys’ fees) in connection with collecting such fee, together
with interest on the amount of the fee at the then current prime rate (as
reported in The Wall Street
Journal or such other authoritative source to be agreed upon by the
Parties). The Parties further acknowledge that the agreements
contained in Sections 11.1(a) and 11.1(b) are not subject to the requirement
that the FFC Stockholder Approval be obtained and that these provisions shall be
effective without regard to whether the FFC Stockholder Approval is
obtained.
(d) Nothing
contained in this Section 11.1 shall constitute or shall be deemed to constitute
liquidated damages for the willful breach by FFC of the terms of this Agreement
or otherwise limit the rights of SPAH.
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11.2
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Brokers,
Finders and Financial Advisors.
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Except
for Sandler ▇’▇▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, as to FFC, each of the Parties
represents and warrants that neither it nor any of its officers, directors,
employees, or Affiliates has employed any broker or finder or incurred any
Liability for any financial advisory fees, investment bankers’ fees, brokerage
fees, commissions, or finders’ fees in connection with this Agreement or the
transactions contemplated hereby. FFC has provided SPAH with a copy
of the engagement letters for Sandler ▇’▇▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, and such
advisors’ expected fees for their services and FFC shall pay all amounts due
thereunder at Closing and prior to the Effective Time.
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11.3
|
Entire
Agreement.
|
Except as
otherwise expressly provided herein, this Agreement (including the documents and
instruments referred to herein) constitutes the entire agreement between the
Parties with respect to the transactions contemplated hereunder and supersedes
all prior arrangements or understandings with respect thereto, written or
oral. Nothing in this Agreement expressed or implied, is intended to
confer upon any Person, other than the Parties or their respective successors,
any rights, remedies, obligations, or liabilities under or by reason of this
Agreement, other than as provided in Sections 8.9(a) and 8.10.
75
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11.4
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Amendments.
|
This
Agreement may be amended by a subsequent writing signed by each of the Parties
upon the approval of each of the Parties, whether before or after stockholder
approval of this Agreement has been obtained; provided that after any such
approval by the holders of FFC Common Stock, there shall be made no amendment
that reduces or modifies in any respect the consideration to be received by
holders of FFC Common Stock.
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11.5
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Waivers.
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(a) Prior
to or at the Effective Time, SPAH, acting through its Board of Directors, chief
executive officer or other authorized officer, shall have the right to waive any
Default in the performance of any term of this Agreement by FFC, to waive or
extend the time for the compliance or fulfillment by FFC of any and all of its
obligations under this Agreement, and to waive any or all of the conditions
precedent to the obligations of SPAH under this Agreement, except any condition
which, if not satisfied, would result in the violation of any Law. No
such waiver shall be effective unless in writing signed by a duly authorized
officer of SPAH.
(b) Prior
to or at the Effective Time, FFC, acting through its Board of Directors, chief
executive officer or other authorized officer, shall have the right to waive any
Default in the performance of any term of this Agreement by SPAH, to waive or
extend the time for the compliance or fulfillment by SPAH of any and all of its
obligations under this Agreement, and to waive any or all of the conditions
precedent to the obligations of FFC under this Agreement, except any condition
which, if not satisfied, would result in the violation of any Law. No
such waiver shall be effective unless in writing signed by a duly authorized
officer of FFC.
(c) The
failure of any Party at any time or times to require performance of any
provision hereof shall in no manner affect the right of such Party at a later
time to enforce the same or any other provision of this Agreement. No
waiver of any condition or of the breach of any term contained in this Agreement
in one or more instances shall be deemed to be or construed as a further or
continuing waiver of such condition or breach or a waiver of any other condition
or of the breach of any other term of this Agreement.
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11.6
|
Assignment.
|
Except as
expressly contemplated hereby, neither this Agreement nor any of the rights,
interests or obligations hereunder shall be assigned by any Party hereto
(whether by operation of Law or otherwise) without the prior written consent of
the other Party. Subject to the preceding sentence, this Agreement
will be binding upon, inure to the benefit of and be enforceable by the Parties
and their respective successors and assigns.
76
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11.7
|
Notices.
|
All
notices or other communications which are required or permitted hereunder shall
be in writing and sufficient if delivered by hand, by facsimile transmission, by
registered or certified mail, postage pre-paid, or by courier or overnight
carrier, to the persons at the addresses set forth below (or at such other
address as may be provided hereunder), and shall be deemed to have been
delivered as of the date so delivered or refused:
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▇▇▇
▇▇▇▇▇▇▇ ▇▇▇. ▇▇▇▇
▇▇▇▇▇
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▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
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Telephone:
▇▇▇-▇▇▇-▇▇▇▇
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Facsimile:
▇▇▇-▇▇▇-▇▇▇▇
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Attention:
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
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Copy
to Counsel:
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▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ Frome ▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP
Park
Avenue Tower
▇▇
▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇
▇▇▇
▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone:
(▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇)
▇▇▇-▇▇▇▇
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Attention:
▇▇▇▇▇ ▇▇▇▇▇▇▇
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and
Sidley
Austin LLP
▇▇▇▇ ▇
▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇
Telephone: (▇▇▇)
▇▇▇-▇▇▇▇
Facsimile: (▇▇▇)
▇▇▇-▇▇▇▇
Attention:
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
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FFC:
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FRONTIER
FINANCIAL CORPORATION
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▇▇▇
▇.▇. ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇
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▇.▇.
▇▇▇ ▇▇▇▇
|
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|
▇▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇
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Telephone:
(▇▇▇) ▇▇▇-▇▇▇▇
|
|
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Facsimile: (▇▇▇)
▇▇▇-▇▇▇▇
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Attention:
▇▇▇▇▇▇▇ ▇▇▇▇▇
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77
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Copy
to Counsel:
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▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ L.L.P.
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▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
|
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▇▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇-▇▇▇▇
|
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Telephone: (▇▇▇)
▇▇▇-▇▇▇▇
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Facsimile: (▇▇▇)
▇▇▇-▇▇▇▇
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Attention: ▇▇▇▇
▇. ▇▇▇▇▇▇▇▇
and
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Ellenoff
▇▇▇▇▇▇▇▇ & Schole LLP
▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇,
▇▇ ▇▇▇▇▇-▇▇▇▇
Telephone: (▇▇▇)
▇▇▇-▇▇▇▇
Facsimile: (▇▇▇)
▇▇▇-▇▇▇▇
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Attention: ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇
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11.8
|
Governing
Law.
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Governing
Law. This Agreement shall be governed by, construed and
enforced in accordance with, the Laws of the State of Delaware without regard to
the conflict of laws principles thereof; provided that the laws of the
State of Washington apply solely with respect to the merger of a corporation
organized under the Laws of such jurisdiction. Any suit, action or
proceeding arising out of or relating to this Agreement shall be heard and
determined exclusively in any Delaware state or federal court. The
Parties hereto hereby (A) submit to the exclusive jurisdiction of any
Delaware state or federal court for the purpose of any suit, action or
proceeding arising out of or relating to this Agreement brought by any Party
hereto, and (B) irrevocably waive, and agree not to assert by way of
motion, defense, or otherwise, in any such suit, action or proceeding, any claim
that it is not subject personally to the jurisdiction of the above-named courts,
that its property is exempt or immune from attachment or execution, that any
such suit, action or proceeding is brought in an inconvenient forum, that the
venue of such suit, action or proceeding is improper, or that this Agreement or
the transactions contemplated hereby may not be enforced in or by any of the
above-named courts; provided, however, that such
consent to jurisdiction is solely for the purpose referred to in this Section
11.8 and shall not be deemed to be a general submission to the jurisdiction of
such court or in the State of Delaware other than for such
purposes.
Waiver of Jury
Trial. Each Party hereto hereby irrevocably waives, to the
fullest extent permitted by Law, all rights to trial by jury in any suit action,
proceeding or counterclaim (whether based upon contract, tort or otherwise)
arising out of or relating to this Agreement or any of the transactions
contemplated hereby.
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11.9
|
Counterparts.
|
This
Agreement may be executed in two or more counterparts, each of which shall be
deemed to be an original, but all of which together shall constitute one and the
same instrument.
78
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11.10
|
Captions;
Articles and Sections.
|
The
captions contained in this Agreement are for reference purposes only and are not
part of this Agreement. Unless otherwise indicated, all references to
particular Articles or Sections shall mean and refer to the referenced Articles
and Sections of this Agreement.
|
11.11
|
Interpretations.
|
Each of
the Parties acknowledges that such Party has reviewed, and has had an
opportunity to have its attorneys review, this Agreement and agrees that any
rule of construction to the effect that any ambiguities are to be resolved
against the drafting Party, or any similar rule operating against the drafter of
an agreement, shall not be applicable to the construction or interpretation of
this Agreement, and any controversy over construction of this Agreement shall be
decided without regard to events of authorship. The Parties
acknowledge and agree that this Agreement has been reviewed, negotiated, and
accepted by all Parties and their attorneys and shall be construed and
interpreted according to the ordinary meaning of the words used so as fairly to
accomplish the purposes and intentions of all Parties hereto.
|
11.12
|
Enforcement
of Agreement.
|
The
Parties hereto agree that irreparable damage would occur in the event that any
of the provisions of this Agreement was not performed in accordance with its
specific terms or was otherwise breached. It is accordingly agreed
that the Parties shall be entitled to an injunction or injunctions to prevent
breaches of this Agreement and to enforce specifically the terms and provisions
hereof in any court of the United States or any state having jurisdiction, this
being in addition to any other remedy to which they are entitled at law or in
equity.
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11.13
|
Severability.
|
Any term
or provision of this Agreement which is invalid or unenforceable in any
jurisdiction shall, as to that jurisdiction, be ineffective to the extent of
such invalidity or unenforceability without rendering invalid or unenforceable
the remaining terms and provisions of this Agreement or affecting the validity
or enforceability of any of the terms or provisions of this Agreement in any
other jurisdiction. If any provision of this Agreement is so broad as
to be unenforceable, the provision shall be interpreted to be only so broad as
is enforceable.
|
11.14
|
No
Third Party Beneficiaries.
|
(a) Other
than as set forth in Section 8.10, no officer, employee or other Person (other
than the corporate Parties to this Agreement) shall be or shall be deemed a
third party or other beneficiary of this Agreement, or shall have any right or
other entitlement in connection with any provision of this Agreement or seek any
remedy, or right or entitlement in connection with this Agreement. No
provision of this Agreement constitutes or shall give rise to, or shall be
deemed to constitute or give rise to, an employee benefit or employee
benefit-related plan, program or other arrangement, a provision of any such
plan, program or other arrangement, or an amendment of any such plan, program or
other arrangement.
79
(b) If
and to the extent any FFC Benefit Plan is sponsored by FFC, subject to SPAH’s
obligations pursuant to Section 8.9(a), SPAH may, by written direction issued
prior to Closing, require FFC to take all necessary or appropriate action to
terminate each such FFC Benefit Plan or cause the Bank to become the sole
sponsor of each such FFC Benefit Plan prior to Closing. The intent of
the preceding sentence is to permit SPAH to avoid becoming a sponsor of any and
all FFC Benefit Plans as a result of the Merger.
(c) Without
limiting the foregoing, the provisions of Section 8.9 hereof are for the sole
benefit of the Parties to this Agreement and nothing herein, expressed or
implied, is intended, or shall be construed, to confer upon or give to any
Person (including for the avoidance of doubt, any employee), other than the
Parties hereto and their respective permitted successors and assigns, any legal
or equitable or other rights or remedies (with respect to the matters provided
for in Section 8.9) under or by reason of any provision of this
Agreement.
80
IN WITNESS WHEREOF, each of
the Parties has caused this Agreement to be executed on its behalf by its duly
authorized officers as of the day and year first above written.
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SP ACQUISITION HOLDINGS,
INC.
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By:
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/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇ | ||
|
Name:
|
▇▇▇▇
▇. ▇▇▇▇▇▇
|
||
|
Title:
|
Chief
Operating Officer and Secretary
|
||
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FRONTIER
FINANCIAL CORPORATION
|
|||
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By:
|
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ | ||
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Name:
|
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ | ||
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Title:
|
Chairman and Chief Executive Officer | ||
81