SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) May 21, 1997
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FIRST COLORADO BANCORP, INC.
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(Exact name of Registrant as specified in its Charter)
Colorado 0-27126 84-1320788
- ------------------------------ ----------- -------------------
(State or Other Jurisdiction (Commission (IRS Employer
Jurisdiction of Incorporation) File Number) Identification No.)
215 South Wadsworth Boulevard, Lakewood, Colorado 80226
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(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (303) 232-2121
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Not Applicable
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(Former Name or Former Address, if Changed Since Last Report)
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FIRST COLORADO BANCORP, INC.
INFORMATION TO BE INCLUDED IN REPORT
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Item 5. Other Events
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The Registrant has signed a binding agreement dated May 21, 1997,
("Agreement") providing for the merger of Delta Federal Savings Bank, FSB,
Delta, Colorado ("Delta") into First Federal Bank of Colorado ("FFBC"), a
subsidiary of the Registrant. FFBC will purchase 100% of the outstanding stock
of Delta. Each share of Delta Common Stock will be exchanged for Registrant
Common Stock valued at $30.00. The number of shares of Registrant Common Stock
to be exchanged for Delta Common Stock will be determined based upon the market
price of the Registrant's Common Stock during the 20 trading days prior to the
closing date. Based upon the price of the Registrant's Common Stock as of May
21, 1997, a total of 320,056 shares of Registrant Common Stock will be issued
from treasury shares for the transaction. The transaction is expected to be
accounted for as a purchase by the Registrant. The transaction is subject to
certain contingencies including satisfaction of applicable federal regulatory
requirements, approval by the shareholders of Delta, and completion of a due
diligence examination. It is anticipate that the transaction will close during
the forth quarter of 1997.
A copy of a press release issued May 21, 1997 by the Registrant is
attached hereto as Exhibit 99.1 and is incorporated herein by reference in its
entirety. A copy of the Agreement signed on May 21, 1997 by the Registrant is
attached hereto as Exhibit 99.2 and is incorporated herein by reference in its
entirety.
Item 7. Financial Statements, Pro Forma Financial
Information and Exhibits
(c) Exhibits:
99.1 Press Release dated May 21, 1997.
99.2 Agreement dated May 21, 1997.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this Report to be signed on
its behalf by the undersigned, thereunto duly authorized.
FIRST COLORADO BANCORP, INC.
Date: May 12, 1997 By: /s/Brian L. Johnson
Brian L. Johnson
Executive Vice President
Exhibit 99.1
<PAGE>
[FIRST COLORADO LETTERHEAD]
First Colorado Bancorp, Inc. Contact: William Marcoux or Brian Johnson
First Federal Bank of Colorado Shareholder Relations
Lakewood, Colorado (303) 232-2121
Delta Federal Savings Bank, FSB Contact: David Humphries
Delta, Colorado (970) 874-9755
FOR IMMEDIATE RELEASE
FIRST COLORADO BANCORP, INC. ANNOUNCES
AGREEMENT TO ACQUIRE DELTA FEDERAL SAVINGS
Lakewood, Colorado -- May 21, 1997 (NASDAQ NMS: FFBA) -- Mr. Malcolm E. Collier,
Jr., Chairman of First Colorado Bancorp, Inc., Lakewood, Colorado (the
"Company"), the holding company of First Federal Bank of Colorado (the "Bank"),
announced today that the Company has signed a binding agreement providing for
the merger of Delta Federal Savings Bank, FSB, Delta, Colorado ("Delta") into
First Federal Bank of Colorado ("FFBC") a subsidiary of the Company. At March
31, 1997 total assets of Delta to be acquired in the transaction equal
approximately $39.1 million and total deposits to be acquired equal
approximately $30.6 million.
FFBC will purchase 100% of the outstanding stock of Delta. Each share of Delta
Common Stock will be exchanged for Company Common Stock valued at $30.00. The
number of shares of the Company Common Stock to be exchanged for each share of
Delta Common Stock will be determined based upon the market price of the Company
Common Stock during the 20 trading days prior to the closing date. Based upon
the price of the Company's Common Stock as of May 21, 1997, approximately
320,056 shares of Company Common Stock will be issued from treasury shares for
the transaction.
The transaction is expected to be accounted for as a purchase and to be tax-free
to the shareholders of Delta to the extent that they receive Company Common
Stock in exchange for Delta stock. The transaction is subject to certain
contingencies including satisfaction of applicable federal regulatory
requirements, approval by the shareholders of Delta, and completion of a due
diligence examination. It is anticipate that the transaction will close during
the forth quarter of 1997.
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Page 2 of 2
Mr. Collier, Chairman of the Company and FFBC said "The merging of Delta Federal
with First Federal strenghthens our market presence in this region for the
benefit of our customers and the community generally. This merger is a natural
fit for our Company."
David Humphries, President and Chief Executive Officer of Delta said, "We feel
this merger is a unique opportunity for Delta stockholders and customers. We
chose to associate with First Federal Bank of Colorado because of their
dedication to the communities they serve, their customers, and their employees."
The Company is a unitary savings and loan holding company which owns all of the
outstanding stock of the FFBC. FFBC is a community-oriented, retail savings
institution offering traditional deposit and mortgage loan products. The Bank
primarily serves the Colorado counties of Denver, Adams, Arapahoe, Jefferson,
Boulder, Douglas, Mesa, Delta and Montrose through a network of 27 offices,
providing a full range of retail banking services, with emphasis on one-to-four
family residential mortgages. Deposits at the Bank are insured up to the maximum
permissible amount by the Federal Deposit Insurance Corporation ("FDIC"). The
Corporation's common stock is traded on the Nasdaq National Market under the
symbol "FFBA."
Exhibit 99.2
<PAGE>
* 5/21/97 *
Agreement and Plan of Merger
By and Among
First Colorado Bancorp, Inc.
and
First Federal Bank of Colorado
and
Delta Federal Savings, F.S.B.
Dated: May 21, 1997
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TABLE OF CONTENTS
<TABLE>
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Page No.
<S> <C> <C> <C> <C>
ARTICLE I.......................................................................................................... 1
THE MERGER................................................................................................ 1
1.1 The Merger.............................................................................. 1
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1.2 Effective Date of the Merger............................................................ 1
----------------------------
1.3 Effects of the Merger................................................................... 2
---------------------
1.4 Closing................................................................................. 2
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ARTICLE II......................................................................................................... 2
EFFECT OF THE MERGER; CERTAIN ACTIONS IN CONNECTION
THEREWITH........................................................................................ 2
2.1 Effect of the Merger.................................................................... 2
--------------------
2.2 Effect on Common Stock of Delta and Bancorp............................................. 3
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2.3 Bancorp and FFBC to Make Stock Certificates and Cash Available.......................... 3
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2.4 Payment of Consideration................................................................ 3
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2.5 Delta Stock Options..................................................................... 4
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ARTICLE III........................................................................................................ 5
CONVERSION OF SHARES/CONSIDERATION........................................................................ 5
3.1 Conversion of Shares.................................................................... 5
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3.2 Exchange of Certificates................................................................ 6
------------------------
3.3 Closing of Stock Transfer Books......................................................... 6
-------------------------------
ARTICLE IV......................................................................................................... 7
REPRESENTATIONS AND WARRANTIES OF DELTA................................................................... 7
4.1 Corporate Organization and Qualification................................................ 7
----------------------------------------
4.2 Authorization of Agreement.............................................................. 7
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4.3 No Violation of Other Instruments....................................................... 8
---------------------------------
4.4 Financial Statements.................................................................... 8
--------------------
4.5 Absence of Certain Changes or Events.................................................... 9
------------------------------------
4.6 Form 10-KSB Annual Report and Other Reports............................................. 9
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4.7 Capitalization.......................................................................... 9
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4.8 No Actions, Etc......................................................................... 10
----------------
4.9 Compliance with Laws and Orders......................................................... 10
-------------------------------
4.10 Governmental Regulation................................................................. 10
-----------------------
4.11 Contracts and Commitments............................................................... 10
-------------------------
4.12 Broker's Fees........................................................................... 11
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4.13 Agreements with Directors, Officers and Shareholders.................................... 11
----------------------------------------------------
4.14 Title to Properties..................................................................... 11
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4.15 Environmental Matters................................................................... 11
---------------------
4.16 Insurance............................................................................... 12
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4.17 Proxy Statement......................................................................... 12
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4.18 Good Faith.............................................................................. 12
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4.19 Employee and Employee Benefit Matters................................................... 12
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4.20 Labor Disputes.......................................................................... 13
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4.21 Loan Losses............................................................................. 14
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4.22 Taxes................................................................................... 14
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4.23 Consents and Approvals.................................................................. 14
----------------------
4.24 Knowledge as to Conditions.............................................................. 14
--------------------------
4.25 Accuracy of Information................................................................. 14
-----------------------
4.26 Absence of Certain Changes.............................................................. 15
--------------------------
4.27 Full Disclosure......................................................................... 15
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4.28 Opinion................................................................................. 15
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ARTICLE V.......................................................................................................... 16
REPRESENTATIONS AND WARRANTIES OF BANCORP................................................................. 16
5.1 Organization and Qualification of Bancorp............................................... 16
-----------------------------------------
5.2 Authorization of Agreement.............................................................. 16
--------------------------
5.3 No Violation of Other Instruments....................................................... 16
---------------------------------
5.4 Financial Statements.................................................................... 17
--------------------
5.5 Absence of Certain Changes or Events.................................................... 17
------------------------------------
5.6 Form 10-K Annual Report and Other Reports............................................... 17
-----------------------------------------
5.7 No Actions, Etc......................................................................... 17
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5.8 Capitalization.......................................................................... 18
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5.9 Good Faith.............................................................................. 18
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5.10 Registration............................................................................ 18
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5.11 Copies of Public Information............................................................ 18
----------------------------
5.12 Undisclosed Liabilities: Taxes.......................................................... 18
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5.13 Title to Properties..................................................................... 19
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5.14 Absence of Regulatory Actions........................................................... 19
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5.15 Labor Disputes.......................................................................... 19
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5.16 Reserve for Possible Loan Losses........................................................ 19
--------------------------------
5.17 Benefit Plans........................................................................... 19
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5.18 Accuracy of Information................................................................. 20
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5.19 Knowledge as to Conditions.............................................................. 20
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5.20 Other Transactions...................................................................... 20
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5.21 Full Disclosure......................................................................... 20
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ARTICLE VI......................................................................................................... 20
COVENANTS OF THE PARTIES.................................................................................. 20
6.1 Conduct of Delta's Business............................................................. 20
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6.2 Covenants of Bancorp.................................................................... 23
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6.3 Reports................................................................................. 24
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6.4 Breaches................................................................................ 24
--------
6.5 Consents and Approvals.................................................................. 24
----------------------
6.6 Non-Solicitation........................................................................ 24
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(ii)
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<S> <C> <C> <C> <C>
ARTICLE VII........................................................................................................ 25
INVESTIGATION - CONFIDENTIALITY........................................................................... 25
7.1 Access to Information................................................................... 25
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7.2 Confidentiality......................................................................... 26
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ARTICLE VIII....................................................................................................... 27
ADDITIONAL AGREEMENTS..................................................................................... 27
8.1 Delta Shareholders' Meeting............................................................. 27
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8.2 Proxy Statement for Shareholders' Meetings.............................................. 27
------------------------------------------
8.3 Cooperation: Regulatory Approvals....................................................... 27
---------------------------------
8.4 Organization and Qualification of Interim, FFBC and Bancorp............................. 27
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8.5 Reports................................................................................. 28
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8.6 Brokers or Finders...................................................................... 28
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8.7 Additional Agreements: Reasonable Efforts............................................... 28
-----------------------------------------
8.8 Release of Information.................................................................. 28
----------------------
8.9 Subsequent Interim Financial Statements................................................. 28
---------------------------------------
8.10 Employee Matters........................................................................ 29
----------------
8.11 Board Members........................................................................... 29
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8.12 Breaches................................................................................ 29
--------
8.13 Reimbursement for Expenses - Subsequent Acquisition Transaction......................... 29
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8.14 Supplements to Disclosure Schedules..................................................... 29
-----------------------------------
8.15 Confidentiality......................................................................... 29
----------------
8.16 Due Diligence........................................................................... 29
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8.17 Indemnification of Directors and Officers............................................... 30
-----------------------------------------
8.18 Dividends............................................................................... 30
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8.19 Other Benefits Matters.................................................................. 30
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8.20 Accountants' Letters.................................................................... 31
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8.21 Stock Exchange Listing.................................................................. 31
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8.22 Directors............................................................................... 31
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ARTICLE IX......................................................................................................... 31
CONDITIONS TO THE OBLIGATIONS OF BANCORP AND FFBC......................................................... 31
9.1 No Material Adverse Effect.............................................................. 31
--------------------------
9.2 Representations and Warranties.......................................................... 32
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9.3 Performance and Compliance.............................................................. 32
--------------------------
9.4 No Proceeding or Litigation............................................................. 32
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9.5 Consents Under Agreements............................................................... 32
-------------------------
9.6 No Amendments to Resolutions............................................................ 32
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9.7 Certificate of Delta Officers........................................................... 32
-----------------------------
9.8 Satisfactory Completion of Due Diligence................................................ 32
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9.9 Maintenance of Stockholders' Equity of Delta............................................ 32
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ARTICLE X.......................................................................................................... 33
CONDITIONS TO THE OBLIGATIONS OF DELTA.................................................................... 33
10.1 Representations and Warranties.......................................................... 33
------------------------------
10.2 Performance and Compliance.............................................................. 33
--------------------------
10.3 Corporate Proceedings................................................................... 33
---------------------
10.4 Certificate of Bancorp Officers......................................................... 33
-------------------------------
10.5 Opinion of Financial Advisor............................................................ 33
----------------------------
ARTICLE XI......................................................................................................... 33
CONDITIONS TO THE OBLIGATIONS OF ALL PARTIES.............................................................. 33
11.1 Governmental Approvals.................................................................. 33
----------------------
11.2 Registration Statement.................................................................. 34
----------------------
11.3 No Injunctions or Restraints............................................................ 34
----------------------------
11.4 Delta Shareholder Approval.............................................................. 34
--------------------------
11.5 Corporate Proceedings................................................................... 34
----------------------
11.6 Legal Opinions.......................................................................... 34
--------------
11.7 Tax Opinion............................................................................. 34
-----------
11.8 Stock Exchange Listing.................................................................. 34
----------------------
ARTICLE XII........................................................................................................ 34
TERMINATION............................................................................................... 34
12.1 Reasons for Termination................................................................. 34
-----------------------
12.2 Effect of Termination................................................................... 36
---------------------
ARTICLE XIII....................................................................................................... 36
MISCELLANEOUS............................................................................................. 36
13.1 Survival of Representations, Warranties and Agreements................................. 36
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13.2 Expenses............................................................................... 36
--------
13.3 Waivers: Amendments.................................................................... 36
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13.4 Assignment: Parties in Interest........................................................ 36
-------------------------------
13.5 Captions and Counterparts.............................................................. 37
-------------------------
13.6 Certain Definitions.................................................................... 37
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13.7 Enforcement of the Agreement........................................................... 37
----------------------------
13.8 Governing Law.......................................................................... 37
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13.9 Notices................................................................................ 37
--------
13.10 Arbitration of Disputes................................................................ 38
-----------------------
13.11 Further Assurances..................................................................... 38
------------------
13.12 Exhibits and Disclosure Schedules...................................................... 38
---------------------------------
13.13 Severability........................................................................... 38
------------
13.14 Written Agreement to Govern............................................................ 39
---------------------------
13.15 No Waiver of Rights.................................................................... 39
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(iv)
<PAGE>
SCHEDULES
Schedule 4.1(a)
Schedule 4.5
Schedule 4.7
Schedule 4.9
Schedule 4.10
Schedule 4.11
Schedule 4.13
Schedule 4.15
Schedule 4.16
Schedule 4.19(a)
Schedule 4.19(b)
Schedule 4.23
Schedule 4.26
Schedule 5.5
Schedule 5.8
Schedule 6.1
Schedule 6.2
(v)
<PAGE>
AGREEMENT AND PLAN OF MERGER
This Agreement and Plan of Merger, dated as of May 21, 1997 (the
"Agreement"), is entered into by and among First Colorado Bancorp, Inc.
("Bancorp"), First Federal Bank of Colorado ("FFBC") and Delta Federal Savings,
F.S.B ("Delta") (collectively, the "Parties").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, Bancorp is a savings and loan holding company
incorporated under the laws of the State of Colorado, headquartered in Lakewood,
Colorado, and owns 100% of the issued and outstanding capital stock of FFBC, a
federally chartered stock savings bank headquartered in Lakewood, Colorado; and
WHEREAS, Delta is a federal stock savings bank headquartered
in Delta, Colorado; and
WHEREAS, the Boards of Directors of Bancorp, FFBC and Delta
have each approved this Agreement, authorized the execution hereof in
counterparts and the Board of Directors of Delta has directed that the Agreement
be submitted for shareholder approval; and
WHEREAS, the Boards of Directors of Bancorp and Delta believe
that the transaction is in the best interest of their respective stockholders;
and
WHEREAS, Bancorp and Delta intend, and it is a condition
hereof, that the Merger (as defined below) constitute a tax-free reorganization;
NOW, THEREFORE, in consideration of the premises and the
mutual covenants, representations, warranties, and agreements herein contained,
and in order to set forth the conditions upon which the foregoing Merger will be
carried out, the parties, intending to be legally bound, hereby agree as
follows:
ARTICLE I.
THE MERGER
1.1 The Merger. Subject to the terms and conditions of this Agreement,
and in accordance with the provisions of the Colorado Business Corporation Act
and the Rules and Regulations of the Office of Thrift Supervision ("OTS
Regulations") at the Effective Date, Delta shall be merged with and into FFBC or
a subsidiary interim stock savings bank of FFBC ("Interim"). Following the
merger of Interim with Delta, whereby Delta shall be the surviving entity, Delta
shall be a wholly-owned subsidiary of FFBC. Thereafter, Delta shall merge with
and into FFBC with FFBC being the surviving entity (collectively, the "Merger").
Upon the consummation of the Merger, the separate existence of Delta shall
cease, and FFBC shall continue as the surviving corporation in the Merger.
1.2 Effective Date of the Merger. As soon as practicable after each of
the conditions set forth in Articles IX, X and XI hereof have been satisfied or
waived, FFBC will file, or cause to be filed, articles of combination with the
Office of Thrift Supervision ("OTS"). The foregoing articles of combination
shall be in the form required by and executed in accordance with the applicable
provisions of the OTS
<PAGE>
Regulations. The Merger shall become effective at the time specified by the
Secretary of the OTS in its endorsement of the articles of combination (the
"Effective Date").
1.3 Effects of the Merger. At the Effective Time, the corporate name
and existence of Delta shall cease and all of its purposes, powers and objects,
and all of its rights, assets, liabilities and obligations, shall pass to and
vest in FFBC as the surviving institution without any conveyance or transfer,
and FFBC as the surviving institution shall continue to be governed by the laws
of the United States of America and of the State of Colorado, to the extent
applicable, and shall also succeed to all rights, assets, liabilities, and
obligations of Delta in accordance with the laws of the United States of America
and the laws of the State of Colorado, to the extent applicable. FFBC will
continue to operate under its present name and form as a subsidiary of Bancorp.
The Board of Directors of Bancorp, at its sole discretion, may merge Delta and
FFBC at or subsequent to Closing.
1.4 Closing. If (a) the Agreement and the transactions contemplated
hereby have been duly approved as required by the shareholders of Delta, and (b)
all relevant conditions of the Agreement have been satisfied or waived, the
closing (the "Closing") shall take place as promptly as practicable thereafter
at the main offices of FFBC. At the Closing, the parties hereto will exchange
certificates, letters and other documents as required hereby and will cause the
filing described in Section 1.2 hereof with respect to the Merger to be made.
Such Closing is expected to take place within five (5) business days of the
satisfaction or waiver of all conditions and/or obligations contained in
Articles IX, X and XI of this Agreement. The date on which the Closing occurs is
hereinafter referred to as the "Closing Date."
ARTICLE II.
EFFECT OF THE MERGER; CERTAIN ACTIONS IN CONNECTION THEREWITH
2.1 Effect of the Merger.
(a) FFBC, as the surviving institution in the Merger, shall possess all
of the properties and rights and be subject to all of the liabilities and
obligations of Delta, all as more fully described in the OTS Regulations. The
name of FFBC, as the surviving institution in the Merger, shall remain "First
Federal Bank of Colorado."
(b) At the Effective Time, each share of capital stock of Delta issued
and outstanding immediately prior thereto shall, by virtue of the Merger, be
exchanged for shares of Common Stock of Bancorp based upon the Exchange Ratio.
(c) The charter and bylaws of FFBC, as in effect immediately prior to
the Effective Time, shall be the charter and bylaws of FFBC, as the surviving
institution of the Merger.
(d) The directors and officers of FFBC immediately prior to the
Effective Time shall be the directors and officers of FFBC, as the surviving
institution of the Merger, and shall continue in office until their successors
are duly elected or otherwise duly selected.
(e) The liquidation account established by Delta pursuant to the plan
of conversion adopted in connection with its conversion from mutual to stock
form shall continue to be maintained by FFBC after the
2
<PAGE>
Effective Time for the benefit of those persons and entities who were savings
account holders of Delta on March 31, 1992, and who continue from time to time
to have rights therein.
(f) All deposit accounts of Delta existing immediately prior to the
Merger shall, upon consummation of the Merger, remain insured by the Savings
Association Insurance Fund ("SAIF"), as administered by the Federal Deposit
Insurance Corporation ("FDIC"), to the fullest extent permitted by law and
regulation.
2.2 Effect on Common Stock of Delta and Bancorp. As of the Effective
Time, by virtue of the Merger and without any action except as specified herein
on the part of the holders of shares of common stock, $0.01 par value, of Delta
("Delta Common Stock"), each issued and outstanding share of Delta Common Stock
(except as otherwise provided in the OTS Regulations with respect to the rights
of dissenting shareholders of Delta) shall be converted into the right to
receive common stock, $0.10 par value per share, of Bancorp ("Bancorp Common
Stock") based upon the Exchange Ratio, less any fractional shares, as defined in
Section 3.1(b) hereof. All shares of Delta Common Stock which are held in the
treasury of Delta or by any direct or indirect wholly-owned subsidiary of Delta
and any shares of Delta Common Stock owned by FFBC or any direct or indirect
wholly-owned subsidiary or parent of FFBC shall be canceled.
2.3 Bancorp and FFBC to Make Stock Certificates and Cash Available. At
the Effective Time, FFBC shall make available to the Exchange Agent (as defined
in Section 2.4(a) hereof) the common stock of Bancorp and cash payments
necessary for the transaction pursuant to Section 2.2 and Section 2.5 hereof.
2.4 Payment of Consideration.
(a) At least twenty (20) days before the Effective Time, FFBC shall
designate an exchange agent (the "Exchange Agent") in connection with the
Merger. As soon as practicable after the Effective Time, the Exchange Agent
shall send a notice and form of letter of transmittal to each holder of record
of Delta Common Stock at the Effective Time advising such shareholder of the
effectiveness of the Merger and the procedures for surrendering to the Exchange
Agent outstanding certificates formerly evidencing shares of Delta Common Stock.
Each holder of shares of Delta Common Stock subject to conversion into Bancorp
Common Stock and cash as provided in Section 2.2 hereof who thereafter delivers
his or her certificate or certificates representing such shares to the Exchange
Agent shall be mailed new stock certificates for Bancorp Common Stock equal to
the number of shares represented by the certificate or certificates so
surrendered to the Exchange Agent multiplied by the Exchange Ratio, less any
fractional shares, as defined in Section 3.1(b) hereof. Upon surrender, each
certificate evidencing Delta Common Stock shall be canceled. Until so
surrendered, each outstanding certificate which prior to the Effective Time
evidenced shares of Delta Common Stock will be deemed for all purposes (except
as otherwise provided in Section 2.2 hereof) to evidence the right to receive
Bancorp Common Stock equal to the number of shares represented by the
certificate or certificates multiplied by the Exchange Ratio. After the
Effective Time, there shall be no further registration of transfers on the
records of Delta of shares of Delta Common Stock and, if a certificate
evidencing such shares is presented for transfer, it shall be canceled in
exchange for Bancorp Common Stock based upon the Exchange Ratio (except as
otherwise provided in Section 2.2 hereof) in the appropriate amount as
calculated above. Notwithstanding any provision of this Agreement, neither the
Exchange Agent nor any person, firm or entity shall be liable or obligated to
any former holder of any share of Delta Common Stock (or to anyone claiming
through any such former holder) with respect to amounts to which any such holder
would have been entitled as a consequence of the Merger, if such amounts have
been
3
<PAGE>
properly paid, or are properly payable, to any public official pursuant to any
abandoned property, escheat or similar laws.
(b) If delivery of all or any part of the Bancorp Common Stock and cash
to be paid in connection with the Merger is to be paid to a person other than
the person in whose name the certificate surrendered in exchange therefor is
registered, it shall be a condition to such delivery that the certificate
surrendered in exchange shall be properly endorsed and otherwise in proper form
for transfer and that the person requesting such a delivery pay to the Exchange
Agent any transfer or other taxes required by reason of such delivery in any
name other than that of the registered holder of the certificate surrendered or
establish to the satisfaction of the Exchange Agent that such tax has been paid
or is not payable.
(c) In the event any certificate for Delta Common Stock shall have been
lost, stolen or destroyed, the Exchange Agent shall deliver (except as otherwise
provided in Section 2.2 hereof) in exchange for such lost, stolen or destroyed
certificate, upon the making of an affidavit of that fact by the holder thereof,
the Exchange Shares to be issued in the Merger as provided for herein; provided,
however, that FFBC may, in its sole discretion and as a condition precedent to
the delivery thereof, require the owner of such lost, stolen or destroyed
certificate to deliver a bond in such reasonable sum as Bancorp may direct as
indemnity against any claim that may be made against Bancorp, FFBC, Delta, the
Exchange Agent or any other party with respect to the certificate alleged to
have been lost, stolen or destroyed.
2.5 Delta Stock Options.
(a) At the Effective Time, each option granted by Delta (a "Delta
Option") to purchase shares of Delta Common Stock which is outstanding and
unexercised immediately prior to the date of this Agreement shall, except as
otherwise provided in Section 2.5(c) hereof, be converted automatically into an
option to purchase shares of Bancorp Common Stock in an amount and at an
exercise price determined as provided below (and otherwise subject to the terms
of Delta's 1993 Stock Option and Incentive Plan (the "Option Plan")); provided
however that upon termination of service or employment by the option holder,
such options shall cease being exercisable not later than in accordance with
their original terms or three months from the date of termination of service or
employment, whichever is earlier:
(i) The number of shares of Bancorp Common Stock to be subject
to the new option shall be equal to the product of the number of shares
of Delta Common Stock subject to the original option and the Exchange
Ratio, provided that any fractional shares of Bancorp Common Stock
resulting from such multiplication shall be rounded down to the nearest
share; and
(ii) The exercise price per share of Bancorp Common Stock
under the new option shall be equal to the exercise price per share of
Delta Common Stock under the original option divided by the Exchange
Ratio, provided that such exercise price shall be rounded up to the
nearest cent.
The adjustment provided herein with respect to any options which are
"incentive stock options" (as defined in Section 422 of the Internal Revenue
Code of 1986, as amended (the "Code")) shall be and is intended to be effected
in a manner which is consistent with Section 424(a) of the Code. The duration
and other terms of the new option shall be the same as the original option,
except that all references to Delta shall be deemed to be references to Bancorp.
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<PAGE>
(b) Within 60 days after the Effective Time, Bancorp shall file with
the Securities and Exchange Commission (the "SEC") a registration statement on
an appropriate form under the Securities Act of 1933, as amended (the
"Securities Act") with respect to the shares of Bancorp Common Stock subject to
options to acquire Bancorp Common Stock issued pursuant to Section 2.5(a)
hereof, and shall use its reasonable best efforts to maintain the current status
of the prospectus contained therein, as well as comply with applicable state
securities or "Blue sky" laws, for so long as such options remain outstanding.
(c) Without limiting the foregoing, and provided that the right
contained in this Section 2.5(c) is not inconsistent with any of the conditions
contained in Articles IX, X and XI hereof, each holder of a Delta Option shall
have the right (which right shall be exercised at least 5 days prior to the
Closing Date by written notice to Bancorp) to elect, in lieu of the provisions
of Section 2.5(a), to convert, at the Effective Time, all or a portion of his
Delta Options which have not been exercised and which have not expired prior to
the Effective Time into the right to receive cash in the amount of $30.00 per
option, less the applicable option exercise price.
ARTICLE III.
CONVERSION OF SHARES/CONSIDERATION
3.1 Conversion of Shares. On the Effective Date:
(a) All issued and outstanding shares of Delta Common Stock shall at
the Effective Time of the Merger, be converted into the number of shares of
common stock of Bancorp, par value $.10, ("Bancorp Common Stock") multiplied by
the Exchange Ratio at the Effective Time.
(b) Each share of Delta Common Stock then issued and outstanding
(excluding (i) any shares held in the treasury of Delta; and (ii) any shares as
to which dissenters' rights are exercised pursuant to the requirements of the
OTS Regulations all of which shares shall be canceled) shall and, without action
of the holder thereof, be converted by the Merger into a number of shares of
Bancorp Common Stock (together with the number of rights ("Bancorp Rights")
issued pursuant to the Rights Agreement (as defined at Section 5.10 hereof)
associated therewith) equal to the quotient (rounded to the nearest one
one-hundredth) of $30 divided by the average of the midpoint of the last bid and
ask price (the "Bancorp Stock Price") for Bancorp Common Stock as reported on
The Nasdaq National Market for the 20 trading days immediately preceding the
Effective Date (the "Exchange Ratio"). All such shares of Bancorp Common Stock
shall be validly issued, fully paid and nonassessable. Each person who, but for
the provisions of this Section 3.1(b), would be entitled to a fractional share
interest in the common stock of Bancorp as a result of the conversion, upon
surrender of certificates theretofore representing shares of common stock of
Bancorp, shall receive in lieu thereof an amount in cash equal to such fraction
multiplied by the Bancorp Stock Price.
(c) The Exchange Ratio at the Effective Time shall be adjusted to
reflect any consolidation, split-up, other subdivisions or combinations of
Bancorp Common Stock, any dividend declared and payable in Bancorp Common Stock,
or any capital reorganization involving the reclassification of Bancorp Common
Stock subsequent to the date of this Agreement.
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(d) Shareholders of Delta asserting dissenters' rights under OTS
Regulations shall have their rights determined pursuant to the OTS Regulations
and shall be entitled to cash payment pursuant to the terms and provisions of
said law with funds to be provided by Bancorp.
(e) From and after the Effective Time, the holders of the certificates
representing common stock of Delta shall cease to have any rights with respect
to such shares (except such rights as they may have as dissenting shareholders)
and their sole right shall be to receive cash and common stock of Bancorp as
herein provided.
3.2 Exchange of Certificates. As soon as practicable after the
Effective Time, the certificates representing the outstanding shares of Delta
shall be surrendered to the Exchange Agent and, upon such surrender, the
Exchange Agent shall issue and deliver in substitution therefore, cash and
certificates representing the number of shares of Bancorp Common Stock into
which such surrendered shares have been converted as hereinbefore provided, and
cash in lieu of fractional shares (without interest). Certificates representing
shares of Delta (other than the shares of Delta Common Stock as to which there
are perfected dissenters' rights) which are not surrendered shall be deemed for
all purposes to evidence the ownership of the number of shares of Bancorp Common
Stock into which said shares of Delta shall have been converted as hereinbefore
set forth and the right to receive cash in the amount determined pursuant to
Section 3.1; provided, however, that Bancorp will not distribute to the holder
of an unsurrendered certificate for Delta Common Stock dividends declared with
respect to Bancorp Common Stock until such owner shall surrender such
certificate, at which time the holder thereof shall be paid the amount of the
dividends having a record date on or after the Effective Time theretofore
declared with respect to common stock without interest. All such dividends
unclaimed at the end of one year from the Effective Time shall be repaid by the
Exchange Agent to Bancorp, and thereafter the holders of such outstanding
certificates shall look, subject to applicable escheat, unclaimed funds and
other laws, as general creditors only to Bancorp for payment thereof.
3.3 Closing of Stock Transfer Books. At the close of business on the
business day immediately preceding the Effective Time, the stock transfer books
of Delta shall be deemed closed, and no shares of Delta Common Stock shall
thereafter be transferred.
ARTICLE IV.
REPRESENTATIONS AND WARRANTIES OF DELTA
Except as set forth in the disclosure schedules to be delivered by
Delta to FFBC (the "Delta Disclosure Schedule"), Delta represents and warrants
to FFBC that:
4.1 Corporate Organization and Qualification.
(a) Delta is duly organized and validly existing as a federal stock
savings bank under the laws of the United States of America and has the
corporate power to own all of its properties and assets and to carry on its
business as it is now being conducted, and neither the ownership of its property
nor the conduct of its business requires it to be qualified to do business in
any other jurisdiction. The deposits of Delta are insured by the Savings
Association Insurance Fund ("SAIF") to the fullest extent permitted by law, and
all premiums required to be paid in connection therewith have been paid when due
by Delta. Except as set forth in Schedule 4.1(a) to the Delta Disclosure
Schedule, the issued and outstanding shares of stock of Delta
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are all duly authorized, validly issued, fully paid and nonassessable. Delta has
delivered to FFBC true, complete and correct copies of its Charter, or other
organizing documents and of the bylaws, as in effect on the date of this
Agreement. Delta is qualified to do business as a federal stock savings bank and
is in good standing in each jurisdiction in which qualification is necessary
under applicable law, except to the extent that any failures to so qualify would
not, in the aggregate, have a material adverse effect on the business, financial
condition or results of operations of Delta, taken as a whole.
(b) Delta Financial Service Corp (the "Subsidiary") is Delta's only
subsidiary. The Subsidiary is a corporation duly organized, validly existing and
in good standing under the laws of its jurisdiction of incorporation or
organization. The Subsidiary has the corporate power and authority to own or
lease all of its properties and assets and to carry on its business as it is now
being conducted and is duly licensed or qualified to do business in each
jurisdiction in which the nature of the business conducted by it or the
character or the location of the properties and assets owned or leased by it
makes such licensing or qualification necessary, except where the failure to be
so licensed or qualified would not have a Material Adverse Effect on Delta,
taken as a whole. The certificate of incorporation, bylaws or similar governing
documents of the Subsidiary, copies of which have previously been delivered to
Bancorp, are true, complete and correct copies of such documents as in effect as
of the date of this Agreement. The capital stock of the Subsidiary has been
fully paid, is duly authorized and validly issued, is non-assessable and is not
issued in violation of the preemptive rights of any stockholder. The capital
stock of the Subsidiary is beneficially owned by Delta and is held free and
clear of any claims, liens, encumbrances or security interests. Except for the
Subsidiary, Delta does not own 5% or more of the shares of stock of any other
corporation.
(c) The minute books of Delta and the Subsidiary contain true, complete
and accurate records in all material respects of all meetings and other
corporate actions held or taken since December 31, 1992 of their respective
stockholders and Boards of Directors (including committees of their respective
Boards of Directors).
4.2 Authorization of Agreement. The Board of Directors of Delta has
authorized the execution of this Agreement as set forth herein, and Delta,
subject to the approval of this Agreement by the shareholders of Delta and all
appropriate regulatory authorities as provided under the Rules and Regulations
of the OTS and the FDIC, has the corporate power to execute and deliver this
Agreement, and has taken all action required by law, its Charter and bylaws or
otherwise to authorize such, and is duly authorized to merge with Interim and
FFBC, and to execute and deliver the Agreement and related documents to FFBC
associated with the Merger and the consummation of the transactions contemplated
thereby, and upon its execution (and assuming due execution and delivery by
Bancorp) this Agreement is a valid and binding agreement of Delta enforceable in
accordance with its terms, subject to (a) all applicable bankruptcy, insolvency,
moratorium or other similar law affecting the enforcement of creditors' rights
generally, and (b) the application of equitable principles if equitable remedies
are sought.
4.3 No Violation of Other Instruments. The execution and delivery of
this Agreement do not, and the consummation of the Merger will not, (i) violate
any provisions of Delta's Charter or bylaws, (ii) violate any provision of, or
result in the acceleration of any obligation under or in the termination, if
applicable, of, any mortgage, deed of trust, note, lien, lease, franchise,
license, permit, agreements, instrument, order, arbitration award, judgment or
decree to which Delta or the Subsidiary is a party or by which it is bound
except for such as would not have a material adverse effect on the financial
condition, business, properties, or results of operations of Delta, taken as a
whole, or the transactions contemplated hereby, (iii) violate or conflict with
any other material restriction of any kind or character by which either
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Delta or the Subsidiary is bound, or (iv) enable any person to enjoin the
transactions contemplated hereby. After the approval of this Agreement by the
Board of Directors of Delta, the shareholders of Delta, the OTS, and the FDIC,
if necessary, Delta will have taken all action required by law, the Charter of
Delta, its bylaws, or otherwise to authorize the execution and delivery of this
Agreement and to authorize the Merger of Delta with Interim and FFBC pursuant to
this Agreement and the consummation of the transactions contemplated hereby.
Delta knows of no reason (including those relating to fair lending laws or other
laws relating to discrimination, including, without limitation, the Equal Credit
Opportunity Act, the Fair Housing Act, the Community Reinvestment Act, the Truth
in Lending Act, and the Home Mortgage Disclosure Act, and anti-trust or consumer
disclosure laws and regulations) why the regulatory approvals should not be
obtained.
4.4 Financial Statements.
(a) Delta has previously delivered to Bancorp copies of the
consolidated statements of financial condition of Delta as of September 30, for
the fiscal years 1996 and 1995, and the related consolidated statements of
operations, changes in stockholders' equity and cash flows for the fiscal years
1994 through 1996, inclusive, as incorporated by reference in Delta's Annual
Report to Stockholders in each case accompanied by the audit report of Dalby,
Wendland & Co., P.C., independent public accountants with respect to Delta, and
the unaudited consolidated statements of financial condition of Delta as of
December 31, 1996 and the related unaudited consolidated statements of
operations, changes in stockholders' equity and cash flows for the three month
periods then ended as reported in Delta's quarterly report to shareholders. The
consolidated statements of financial condition of Delta referred to herein
(including the related notes, where applicable) fairly present the consolidated
financial condition of Delta as of the respective dates set forth therein, and
the related consolidated statements of operations, changes in stockholders'
equity and cash flows (including the related notes, where applicable) fairly
present the results of the consolidated operations, changes in stockholders'
equity and cash flows of Delta for the respective periods or as of the
respective dates set forth therein, it being understood that Delta's interim
financial statements are not audited, not prepared with related notes and are
subject to normal year-end adjustments.
(b) From April 6, 1993 to September 12, 1996, the consolidated
statement of condition of Delta included in the Forms 10-KSB and Forms 10-QSB
reports of Delta filed with the OTS (including the related notes, where
applicable), fairly presented the consolidated financial condition of Delta as
of the respective dates set forth therein, and the related consolidated
statements of operations, changes in stockholders' equity and cash flows
(including the related notes, where applicable) fairly presented the results of
the consolidated operations, changes in stockholders' equity and changes in
financial position of Delta for the respective periods set forth therein, it
being understood that Delta's interim consolidated financial statements were
neither audited nor prepared with related notes and that such interim
consolidated financial statements were subject to normal year-end adjustments.
(c) Each of the financial statements referred to in Sections 4.4(a) and
4.4(b) (including the related notes, where applicable) has been prepared in
accordance with generally accepted accounting principles consistently applied
during the periods involved. The books and records of Delta are being maintained
in accordance with applicable legal and accounting requirements, and reflect
only actual transactions.
(d) The consolidated statement of financial condition of Delta to be
included in subsequent shareholder and OTS reports (including related notes
thereto, where applicable) referred to in Section 8.9,
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will fairly present the consolidated financial condition of Delta as of the
respective dates set forth therein, and related consolidated statements of
operations, changes in stockholders' equity and cashflows (including the related
notes, where applicable) referred to in Section 8.9 will fairly present the
results of the consolidated operations, changes in stockholders' equity and cash
flows for the respective periods set forth therein, it being understood that
Delta's interim financial statements will neither be audited nor prepared with
related notes and that such interim consolidated financial statements will be
subject to normal year-end adjustments.
4.5 Absence of Certain Changes or Events. Except as disclosed in
Schedule 4.5 to the Delta Disclosure Schedule, since December 31, 1996, (i)
neither Delta nor the Subsidiary has incurred any material liability, except in
the ordinary course of their business consistent with their past practices
(excluding the incurrence of expenses in connection with this Agreement and the
transactions contemplated thereby); (ii) there has been no material adverse
change, or development involving a reasonably foreseeable prospective material
adverse change, in or affecting the financial condition, businesses, properties,
or results of operations of Delta, taken as a whole; and (iii) Delta and the
Subsidiary have carried on their respective businesses in the ordinary course
consistent with their past practices (excluding the execution of this Agreement
and related matters).
4.6 Form 10-KSB Annual Report and Other Reports. From December 31, 1991
to the date of this Agreement, Delta has filed with the OTS and the FDIC all
documents and reports required to be filed and such reports do not contain, as
of their respective dates, an untrue statement of a material fact or omit to
state a material fact necessary to make the statements therein, in light of the
circumstances under which such statements were made, not misleading.
4.7 Capitalization. The authorized capital stock of Delta consists of
5,000,000 shares of common stock, par value of $0.01 per share, 183,365 of which
as of the date hereof are issued and outstanding and are duly authorized,
validly issued, fully paid and nonassessable. No other class or series of
capital stock of Delta is or has been authorized. There are no options,
warrants, calls, reservations for issuance or commitments of any kind relating
to, or securities convertible into, Delta common stock, except as detailed at
Schedule 4.7 to the Delta Disclosure Schedule.
4.8 No Actions, Etc. There are no actions, suits, claims, proceedings
or to the knowledge of the executive officers or directors of Delta,
investigations pending, threatened or contemplated against or relating to Delta
and/or the Subsidiary or any of their properties which, individually or in the
aggregate, could materially and adversely affect the financial condition,
businesses, properties or results of operations of Delta, taken as a whole, or
the ability of Delta to consummate the transactions contemplated hereby, and
such officers and directors do not know of any basis for any such action or
proceeding. Delta and the Subsidiary are not transacting business in violation
of any applicable law or regulation which could materially adversely affect the
financial condition, businesses, properties or results of operations of Delta,
taken as a whole, or the ability of Delta to consummate the transactions
contemplated hereby. Delta and/or the Subsidiary are not parties to any order,
judgment or decree which would reasonably be expected to have a Material Adverse
Effect, and Delta and/or the Subsidiary (a) are not the subject of any cease and
desist order, or other formal or informal enforcement action by any regulatory
authority or (b) have made any commitment to or entered into any agreement with
any regulatory authority that restricts or adversely affects their operations or
financial condition.
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4.9 Compliance with Laws and Orders. Except as set forth in Schedule
4.9 to the Delta Disclosure Schedule, to the knowledge of Delta, Delta and the
Subsidiary have not received notice of any violation or alleged material
violation of, or are subject to, any liability (whether accrued, absolute,
contingent, direct or indirect) for past or continuing material violations of,
any material law, statute or regulation. Delta is not in default under, and no
event has occurred that, with the lapse of time or action by a third party or
both, could result in a default under the terms of any judgment, decree, order,
writ, rule or regulation of any governmental authority or court, whether
federal, state or local and whether at law or in equity, where the failure to be
in full compliance would reasonably be expected to result alone or in the
aggregate in damages, which would be reasonably likely to have a Material
Adverse Effect.
4.10 Governmental Regulation. Delta and the Subsidiary hold all
material licenses, certificates, permits, franchises and rights from all
appropriate federal, state and other public authorities necessary for the
conduct of their businesses; and, between the date hereof and the Closing Date,
Delta will use its best efforts to, maintain all such licenses, certificates,
permits, franchises and rights in effect. Except as set forth in Schedule 4.10
to the Delta Disclosure Schedule, Delta and the Subsidiary are not parties or
subject to any agreements, directives, orders or similar arrangements between or
involving Delta and/or the Subsidiary and any federal or state banking
regulatory authority.
4.11 Contracts and Commitments. Except as set forth in Schedule 4.11 to
the Delta Disclosure Schedule, Delta and the Subsidiary are not parties to or
bound by any written (a) material lease or license with respect to any property,
real or personal; (b) material contract or commitment for capital expenditures;
(c) material contract or commitment for total expenses for the purchase of
materials, supplies or for the performance of services by third parties for a
period of more than 60 days from the date of this Agreement; or (d) material
contract or option for the purchase or sale of any real or personal property
other than in the ordinary course of business. To Delta's knowledge, Delta and
the Subsidiary have performed in all material respects all obligations required
to be performed by them to date and are not in default under, and no event has
occurred which, with the lapse of time or action by a third party or both, could
result in a default resulting in material damages or other material default
under any outstanding mortgage, lease, contract, commitment or agreement to
which Delta and/or the Subsidiary is a party or by which Delta and/or the
Subsidiary is bound or under any provision of their articles, charter or bylaws.
Each such outstanding material mortgage, lease, contract, commitment or
agreement is a valid and legally binding obligation of Delta and/or the
Subsidiary subject to (x) all applicable bankruptcy, insolvency, moratorium or
other similar laws affecting the enforcement of creditors rights generally or
the rights of creditors of savings associations the accounts of which are
insured by the FDIC, and (y) the application of equitable principles if
equitable remedies are sought.
4.12 Broker's Fees. Neither Delta nor the Subsidiary nor any of their
respective officers or directors has employed any broker or finder or incurred
any liability for any broker's fees, commissions or finder's fees in connection
with any transactions contemplated by this Agreement, except that Delta has
engaged, and will pay a fee or commission to, Charles Webb & Company, a Division
of Keefe, Bruyette & Woods, Inc. (the "Financial Advisor"), in accordance with
the terms of a letter agreement between Delta and the Financial Advisor, a true,
complete and correct copy which has previously been delivered to Bancorp by
Delta.
4.13 Agreements with Directors, Officers and Shareholders. Except as
set forth in Schedule 4.13 to the Delta Disclosure Schedule, no director,
executive officer, or holder of ten percent (10%) or more of the outstanding
capital stock of Delta nor any associate of any such person (a "Delta
Principal") (a) is or has
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during the period subsequent to December 31, 1996, been a party (other than as a
depositor) to any transaction with Delta, whether as a borrower or otherwise,
that (i) was made other than in the ordinary course of business, (ii) was made
on other than substantially the same terms, including interest rate and
collateral, as those prevailing at the time for comparable transactions with
other persons, or (iii) involves more than the normal risk of collectability or
presents other unfavorable features; or (b) is a party to any material loan or
loan commitment, whether written or oral. Except as disclosed in Schedule 4.13
to the Delta Disclosure Schedule, no Delta Principal holds any position with or
owns more than five percent (5%) of the outstanding shares of any class of
voting stock of any depository organization other than Delta. For the purposes
of this Section 4.13, the term "depository organization" means a commercial bank
(including a private bank), a savings bank, a trust company, a savings and loan
association, a homestead association, a cooperative bank, an industrial bank, a
credit union, or a depository holding company.
4.14 Title to Properties. Delta has good and marketable title to all
its property and assets, whether real or personal, tangible or intangible,
including, without limitation, all assets set forth in its balance sheet as of
September 30, 1996, except property and assets sold or otherwise disposed of
since September 30, 1996, in the ordinary course of business, subject to no
liens, mortgages, pledges, encumbrances or charges of any kind except liens
reflected on said balance sheet and except liens for taxes and assessments not
delinquent, pledges to secure deposits and such other liens and encumbrances and
imperfections of title as do not materially affect the value of such property as
reflected on said balance sheet and which do not interfere with or impair its
present or continued use, and all of their material leases are in full force and
effect and Delta is not in default in any material respect thereunder.
4.15 Environmental Matters. Except as set forth in Schedule 4.15 to the
Delta Disclosure Schedule, to the knowledge of Delta, the real property owned by
Delta associated with its main office as well as other real property held as an
asset and real property held as real estate owned as collateral on loans ("Real
Properties") are in material compliance with all Environmental Laws, as
hereinafter defined, and there are no conditions existing currently which would
subject Delta to damages, penalties, injunctive relief or cleanup costs under
any Environmental Laws or assertions thereof, or which require cleanup, removal,
remedial action or other response pursuant to Environmental Laws by Delta.
Copies of all environmental studies, reports, notices and the like known to
exist with regard to the Real Properties is contained at Schedule 4.15 to the
Delta Disclosure Schedule. Delta is not a party to any litigation or
administrative proceeding, nor has Delta (either in its own capacity or as
trustee or fiduciary), materially violated Environmental Laws nor, to the
knowledge of Delta and except as set forth in Schedule 4.15 to the Delta
Disclosure Schedule, is Delta (either in its own capacity or as trustee or
fiduciary) required to clean up, remove or take remedial or other responsive
action due to the disposal, depositing, discharge, leaking or other release of
any hazardous substances or materials. To the knowledge of Delta, none of the
Real Properties are, nor is Delta, subject to any judgment, decree, order or
citation related to or arising out of any Environmental Laws. To the knowledge
of Delta, no material permits, licenses or approvals are required under
Environmental Laws relative to the Real Properties; and, except as disclosed in
Schedule 4.15 to the Delta Disclosure Schedule, Delta has not stored, deposited,
treated, recycled, used or disposed of any materials (including, without
limitation, asbestos) on, under or at the Real Properties (or tanks or other
facilities thereon containing such materials), which materials if known to be
present on the Real Properties or present in soils or ground water, would
require cleanup, removal or some other remedial action under the Environmental
Laws. The term "Environmental Laws" shall mean all federal, state and local
laws, including statutes, regulations, ordinances, codes, rules and other
governmental restrictions, standards and requirements relating to the discharge
of air pollutants, water pollutants or process waste water or substances, as now
or at any time hereafter in effect, including, but not limited to, the Federal
Solid Waste
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Disposal Act, the Federal Hazardous Materials Transportation Act, the Federal
Clean Air Act, the Federal Clean Water Act, the Federal Resource Conservation
and Recovery Act of 1976, the Federal Comprehensive Environmental Responsibility
Cleanup and Liability Act of 1980, as amended ("CERCLA"), regulations of the
Environmental Protection Agency, regulations of the Nuclear Regulatory Agency,
regulations of the Occupational Safety and Health Administration, and any
so-called "Superfund" or "Superlien" Laws.
4.16 Insurance. Delta has delivered to FFBC as part of Schedule 4.16 to
the Delta Disclosure Schedule true, accurate and complete copies of all
insurance policies and fidelity bonds of Delta. Each such policy is in full
force and effect, with all premiums due thereon on or prior to the Closing Date
having been paid as and when due. Delta has not been notified that its fidelity
or insurance coverage will not be renewed by their carrier(s) on substantially
the same terms as their existing coverage. Delta agrees that prior to the
Effective Date, Delta will not decrease its existing insurance coverage without
the written consent of FFBC. Except as disclosed, no claim is pending under any
such policy with respect to the business or operations of Delta.
4.17 Proxy Statement. The information pertaining to Delta which has
been or will be furnished by or on behalf of Delta or its management for
inclusion in the Proxy Statement referred to in Section 8.2 and the Registration
Statement referred to in Section 5.10 or any amendment or supplement thereto (a)
will comply in all material respects with the provisions of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and (b) will 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 contained
therein, in light of the circumstances under which they are made, not
misleading.
4.18 Good Faith. Delta shall use its best efforts in good faith to take
or cause to be taken all action required under this Agreement on its part to be
taken as promptly as practicable so as to permit the consummation of this
Agreement at the earliest practicable date and cooperate fully with the other
parties to that end.
4.19 Employee and Employee Benefit Matters.
(a) Schedule 4.19(a) to the Delta Disclosure Schedule lists
(i) each pension, profit sharing, stock bonus, thrift, savings, employee stock
ownership or other plan, program or arrangement, which constitutes an "employee
pension benefit plan" within the meaning of Section 3(2) of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"), which is
maintained by Delta and/or the Subsidiary or to which Delta and/or the
Subsidiary contribute for the benefit of any current or former employee,
officer, director, consultant or agent; (ii) each plan, program or arrangement
for the provision of medical, surgical, or hospital care or benefits, benefits
in the event of sickness, accident, disability, death, unemployment, severance,
vacation, apprenticeship, day care, scholarship, prepaid legal services or other
benefits which constitute an "employee welfare benefit plan" within the meaning
of Section 3(1) of ERISA, which is maintained by Delta and/or the Subsidiary or
to which Delta and/or the Subsidiary contribute for the benefit of any current
or former employee, officer, director, consultant or agent; and (iii) every
other retirement or deferred compensation plan, bonus or incentive compensation
plan or arrangement, stock option plan, stock purchase plan, severance or
vacation pay arrangement, or other fringe benefit plan, program or arrangement
through which Delta and/or the Subsidiary provide benefits for or on behalf of
any current or former employee, officer, director, consultant or agent.
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(b) All of the plans, programs and arrangements described in
this Section 4.19 or listed in Schedule 4.19(a) to the Delta Disclosure Schedule
(hereinafter referred to as the "Delta Benefit Plans") that are subject to ERISA
are in material compliance with all applicable requirements of ERISA and all
other applicable federal and state laws, including the reporting and disclosure
requirements of Part I of Title I of ERISA. Each of the Delta Benefit Plans that
is intended to be a pension, profit sharing, stock bonus, thrift, savings or
employee stock ownership plan that is qualified under Section 401(a) of the Code
satisfies the applicable requirements of such provision and there exist no
circumstances that would adversely affect the qualified status of any such Plan
under that section, except with respect to any required retroactive amendment
for which the remedial amendment period has not yet expired. Except as set forth
in Schedule 4.19(b) to the Delta Disclosure Schedule, there is no pending or, to
the best knowledge of Delta, threatened litigation, governmental proceeding or
investigation against or relating to any Delta Benefit Plan and there is no
reasonable basis for any material proceedings, claims, actions or proceedings
against any such Delta Benefit Plan. No Delta Benefit Plan (or Delta Benefit
Plan fiduciary, in his capacity as such) has engaged in a non-exempt "Prohibited
Transaction" (as defined in Section 406 of ERISA and Section 4975(c) of the
Code) since the date on which said sections became applicable to such Plan.
There have been no acts or omissions by Delta that have given rise to any fines,
penalties, taxes or related charges under Sections 502(c), 502(i) or 4071 of
ERISA or Chapter 43 of the Code, or that may give rise to any material fines,
penalties, taxes or related damages under such laws for which Delta may be
liable. All group health plans of Delta, including any plans of current and
former Affiliates of Delta that must be taken into account under Section 4980B
of the Code or Section 601 of ERISA or the requirements of any similar state law
regarding insurance continuation, have been operated in material compliance with
the group health plan continuation coverage requirements of Section 4980B of the
Code and Section 601 of ERISA to the extent such requirements are applicable.
All payments due from any Delta Benefit Plan (or from Delta with respect to any
Delta Benefit Plan) have been made, and all amounts properly accrued to date as
liabilities of Delta that have not yet been paid have been properly recorded on
the books of Delta.
4.20 Labor Disputes. Delta is not directly or indirectly involved in or
to the knowledge of Delta threatened with any labor dispute or trouble or
organizational effort, including, without limitation, matters regarding actual
or alleged discrimination by reason of race, creed, sex, disability or national
origin, which might materially and adversely affect the financial condition,
assets, businesses or results of operations of Delta and the Subsidiary, taken
as a whole.
4.21 Loan Losses. The reserve for possible loan losses shown on the
consolidated balance sheet of Delta as of September 30, 1996, and on the
unaudited balance sheet as of December 31, 1996, is adequate as of the dates
thereof, and no notices have been received from the OTS or the FDIC related to
the adequacy of such reserves within the prior thirty-six months.
4.22 Taxes.
(a) Delta has filed on a timely basis all Federal Income Tax Returns
and all other federal, state, municipal and other tax returns which each of them
is required to file, and each has paid all taxes shown to be due on such returns
and, in the opinion of its Chief Executive and Financial Officers, has
adequately reserved for all current taxes;
(b) Neither the Internal Revenue Service nor any other taxing authority
is now asserting against Delta, or, to its knowledge, threatening to assert
against it, any deficiency or claim for additional taxes, interest or penalty;
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(c) There is no pending, or to the knowledge of Delta, threatened
examination of the Federal Income Tax Returns of Delta and, except for tax years
still subject to the assessment and collection of additional federal income
taxes under the three-year period of limitations prescribed in Section 6501(a)
of the Internal Revenue Code, no tax year of Delta remains open to the
assessment and collection of additional Federal Income Taxes; and
(d) There is no pending or, to the knowledge of Delta, threatened
examination of the State of Colorado Sales Use and/or Personal Property Tax, or
other local, county or municipal taxing authorities (the "Colorado Taxes")
returns of Delta or any of the Subsidiaries and, except for tax years still
subject to the assessment and collection of additional Colorado Taxes under the
applicable statutes of limitations, no tax year of Delta remains open to the
assessment and collection of additional taxes.
4.23 Consents and Approvals. Other than as set forth in Schedule 4.23
to the Delta Disclosure Schedule and other than the receipt of approvals
required by the Bank Merger Act, the Rules and Regulations of the OTS, the FDIC,
and applicable federal securities and state laws, and the approval of the
holders of Delta Common Stock as described in Section 8.1 hereof, no filing or
registration with, no notice to and no permit, authorization, consent or
approval of any third party or any public or governmental body or authority is
necessary for the consummation by Delta of the transactions contemplated by the
Agreement or to enable Delta to continue to conduct its business after the
Effective Date in a manner which is consistent with that in which it is
presently conducted, except where the failure to make such filing or obtain such
permit, authorization, consent or approval will not in the aggregate have a
Material Adverse Effect.
4.24 Knowledge as to Conditions. Delta knows of no reason relating to
Delta why the approvals, consents and waivers of governmental authorities
referred to in Section 8.3 hereof should not be obtained.
4.25 Accuracy of Information. The statements made by Delta in the
Agreement and in any other written documents executed and/or delivered by or on
behalf of Delta pursuant to the terms of the Agreement are true and correct in
all material respects.
4.26 Absence of Certain Changes. Since September 30, 1996, and except
as otherwise permitted by this Agreement, Delta has not, except as set forth in
Schedule 4.26 to the Delta Disclosure Schedule, (a) issued or sold any corporate
debt securities; (b) granted any option for the purchase of its capital stock;
(c) declared or set aside or paid any dividend or other distribution in respect
of its capital stock; (d) incurred any material obligation or liability
(absolute or contingent), except obligations or liabilities incurred in the
ordinary course of business in accordance with past practices; (e) mortgaged,
pledged or subjected to lien or encumbrance (other than statutory liens for
taxes not yet delinquent and landlord liens) any of its material assets or
properties except pledges to secure government deposits and in connection with
repurchase or reverse repurchase agreements; (f) discharged or satisfied any
material lien or encumbrance or paid any obligation or liability (absolute or
contingent), other than current liabilities included in Delta's balance sheet as
of September 30, 1996, and current liabilities incurred since the date thereof
in the ordinary course of business in accordance with past practices; (g) sold,
exchanged or otherwise disposed of any of its material capital assets other than
in the ordinary course of business in accordance with past practices; (h)
materially made or modified any wage or salary increase other than those routine
periodic increases consistent with past practices, entered into or modified any
employment contract with any officer or salaried employee or instituted any
employee welfare, bonus, stock option, profit sharing, retirement or similar
plan or arrangement; (i) suffered any damage, destruction or loss, whether or
not covered by insurance, materially and adversely affecting its business,
property or assets or waived any rights of value that are material in the
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aggregate, considering its business taken as a whole; (j) except in the ordinary
course of business in accordance with past practices, entered, or agreed to
enter, into any agreement or arrangement granting any preferential right to
purchase any of its assets, properties or rights or requiring the consent of any
party to the transfer and assignment of any such assets, properties or rights;
(k) entered into any material transaction outside the ordinary course of its
business in accordance with past practices, except as expressly contemplated by
the Agreement or (1) except in the ordinary course of business in accordance
with past practices or as reflected in Delta's consolidated financial
statements, sold or otherwise disposed of any of its material investment
securities.
4.27 Full Disclosure. No representation or warranty made herein or in
any Disclosure Schedule by Delta, nor any statement or certificate given or to
be given to FFBC pursuant hereto, or with respect to the transactions
contemplated hereby, contains or will contain any untrue statements of a
material fact, or omits or will omit to state a material fact necessary to make
the statements contained herein or therein not misleading and Delta has made,
and will make in good faith on or before the Closing Date, full disclosure of
all material facts with respect to the physical condition of the properties and
assets of Delta and with respect to the financial condition, liabilities and
operation of Delta.
4.28 Opinion. Delta has received a written opinion from the Financial
Advisor to the effect that, subject to the terms, conditions and qualifications
set forth therein, as of the date thereof, the consideration to be received by
the stockholders of Delta pursuant to this Agreement is fair to such
stockholders from a financial point of view. Such opinion has not been amended
or rescinded as of the date of this Agreement.
ARTICLE V.
REPRESENTATIONS AND WARRANTIES OF BANCORP AND FFBC
Bancorp and FFBC represent and warrant to and covenants with Delta
that:
5.1 Organization and Qualification of Bancorp. Bancorp is a corporation
duly organized and validly existing under the laws of the State of Colorado and
has the corporate power to own all of its properties and assets and to carry on
its business as it is now being conducted. Bancorp and FFBC have delivered to
Delta true and correct copies of their Articles of Incorporation, Charter and
Bylaws, as the case may be, in effect on the date of this Agreement. The
deposits of FFBC are insured by the SAIF to the fullest extent permitted by law,
and all premiums required to be paid in connection therewith have been paid when
due by FFBC. Bancorp owns 100% of the issued and outstanding shares of stock of
FFBC. FFBC is duly organized, validly existing and in good standing as a federal
savings bank under the laws of the United States and has the corporate power to
own all of its assets and to carry on its business as it is now being conducted.
Bancorp and FFBC are qualified to do business as corporations and are in good
standing in each jurisdiction in which qualification is necessary under
applicable law, except to the extent that any failures to so qualify would not,
in the aggregate, have a material adverse effect on the business, financial
condition or results of operations of Bancorp and FFBC, taken as a whole.
5.2 Authorization of Agreement. The Boards of Directors of Bancorp and
FFBC have authorized the execution of this Agreement as set forth herein, and
Bancorp and FFBC, subject to the approval of this Agreement by the shareholders
of Delta and all appropriate regulatory authorities as provided in the Colorado
Business Corporation Act and the Rules and Regulations of the OTS and the FDIC,
have the
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corporate power to execute and deliver this Agreement, and has taken all action
required by law, their respective Articles of Incorporation, Charter, and Bylaws
or otherwise to authorize such execution and delivery, the Merger and the
consummation of the transactions contemplated hereby, and upon its execution and
delivery (and assuming due execution and delivery by Delta) this Agreement is a
valid and binding agreement of FFBC and Bancorp enforceable in accordance with
its terms, subject to (a) all applicable bankruptcy, insolvency, moratorium or
other similar law affecting the enforcement of creditors' rights generally, and
(b) the application of equitable principles if equitable remedies are sought.
5.3 No Violation of Other Instruments. The execution and delivery of
this Agreement do not, and the consummation of the Merger will not, (i) violate
any provision of the Articles of Incorporation or Bylaws of Bancorp, (ii)
violate any provision of the Charter or Bylaws of FFBC, (iii) violate any
provision of, or result in the acceleration of any obligation under or in the
termination, if applicable, of, any mortgage, deed of trust, note, lien, lease,
franchise, license, permit, agreement, instrument, order, arbitration award,
judgment or decree to which Bancorp or any of its subsidiaries is a party or by
which it is bound except for such as would not have a material adverse effect on
the financial condition, business, properties, or results of operations of
Bancorp and its subsidiaries, taken as a whole, or the transactions contemplated
hereby, (iv) violate or conflict with any other material restriction of any kind
or character to which Bancorp or FFBC is subject, or (v) enable any person to
enjoin the transactions contemplated hereby. After approval of this Agreement by
the Board of Directors of Bancorp and FFBC, and the approvals of the OTS and the
FDIC, Bancorp and FFBC will have taken all action required by law and their
respective Articles of Incorporation, Charter and Bylaws necessary to authorize
the execution and delivery of this Agreement and to authorize the Merger and the
consummation of the transactions contemplated hereby. Except as set forth in
Schedule 5.3 of the Bancorp Disclosure Schedule, Bancorp and FFBC know of no
reason (including those relating to fair lending laws or other laws relating to
discrimination, including, without limitation, the Equal Credit Opportunity Act,
the Fair Housing Act, the Community Reinvestment Act, the Truth in Lending Act,
and the Home Mortgage Disclosure Act, and anti-trust or consumer disclosure laws
and regulations) why the regulatory approvals should not be obtained.
5.4 Financial Statements. Bancorp has previously delivered to Delta
copies of (a) the consolidated balance sheets of Bancorp and FFBC as of December
31 for the fiscal years 1996 and 1995 and the related consolidated statements of
income, changes in stockholder's equity and cash flows for the fiscal years 1994
through 1996, inclusive, as reported in Bancorp's Annual Report on Form 10-K for
the fiscal year ended December 31, 1996 filed with the SEC under the Exchange
Act, in each case accompanied by the audit report of KPMG Peat Marwick LLP. The
December 31, 1996 consolidated balance sheet of Bancorp (including related
notes, where applicable) fairly presents the consolidated financial position of
Bancorp and its Subsidiary as of the date thereof and the financial statements
referred to in Section 8.9 hereof will fairly present (subject, in the case of
any unaudited statements, to recurring audit adjustments normal in nature and
amount) the results of the consolidated operations and changes in shareholders'
equity and consolidated financial position of Bancorp and FFBC for the
respective fiscal periods or as of the respective dates therein set forth; each
of such statements (including the related notes, where applicable) comply, and
the financial statements referred to in Section 8.9 hereof will comply, in all
material respects with applicable accounting requirements and with the published
rules and regulations of the SEC with respect thereto; and each of such
statements (including the related notes, where applicable) has been, and the
financial statements referred to in Section 8.9 hereof will be, prepared in
accordance with GAAP consistently applied during the periods involved, except as
indicted in the notes thereto or, in the case of unaudited statements, as
permitted by Form 10-Q.
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5.5 Absence of Certain Changes or Events. Except as set forth in
Schedule 5.5 of the Bancorp Disclosure Schedule, since December 31, 1996, (i)
neither Bancorp nor FFBC has incurred any material liability, except in the
ordinary course of their business consistent with their past practices
(excluding the incurrence of expenses in connection with this Agreement and the
transactions contemplated thereby); (ii) there has been no material adverse
change, or development involving a reasonably foreseeable prospective material
adverse change, in or affecting the financial condition, businesses, properties,
or results of operations of Bancorp and FFBC, taken as a whole; and (iii)
Bancorp and FFBC have carried on their respective businesses in the ordinary
course consistent with their past practices (excluding the execution of this
Agreement and related matters).
5.6 Form 10-K Annual Report and Other Reports. Bancorp's Annual Report
on Form 10-K filed with the Securities and Exchange Commission for the year
ended December 31, 1996, heretofore delivered to Delta, does not contain, as of
the date thereof, any untrue statement of a material fact or omit to state any
material fact necessary to make the statements therein, in light of the
circumstances under which such statements were made, not misleading. Since
December 29, 1995, Bancorp has filed with the Securities and Exchange Commission
all documents and reports required to be filed and such reports do not contain,
as of their respective dates, an untrue statement of a material fact or omit to
state a material fact necessary to make the statements therein, in light of the
circumstances under which such statements were made, not misleading.
5.7 No Actions, Etc. There are no actions, suits, claims or proceedings
or, to the knowledge of the executive officers or directors of Bancorp,
investigations pending, threatened or contemplated against or relating to
Bancorp and/or FFBC or any of their properties which, individually or in the
aggregate, could materially and adversely affect the financial condition,
businesses, properties or results of operations of Bancorp, taken as a whole, or
the ability of Bancorp or FFBC to consummate the transactions contemplated
hereby, and such officers and directors do not know of any basis for any such
action or proceeding. Bancorp and FFBC are not transacting business in violation
of any applicable law or regulation which could materially adversely affect the
financial condition, businesses, properties or results of operations of Bancorp,
taken as a whole, or the ability of Bancorp or FFBC to consummate the
transactions contemplated hereby. Bancorp and/or FFBC are not parties to any
order, judgment or decree which would reasonably be expected to have a Material
Adverse Effect, and Bancorp and/or FFBC (a) are not the subject of any cease and
desist order, or other formal or informal enforcement action by any regulatory
authority or (b) have made any commitment to or entered into any agreement with
any regulatory authority that restricts or adversely affects their operations or
financial condition.
5.8 Capitalization. As of the date hereof, the authorized capital stock
of Bancorp consists of (i) 50,000,000, shares of common stock, par value $.10
per share, of which 16,561,425, are issued and outstanding and are fully paid
and nonassessable and 3,579,059 were held in Bancorp's treasury, and (ii)
25,000,000 shares of preferred stock, par value of $.10 per share ("Bancorp
Preferred Stock"), of which none are issued and outstanding. As of the date of
this Agreement, except as set for in Schedule 5.8 to the Bancorp Disclosure
Schedule, no shares of Bancorp Common Stock were reserved for issuance. As of
the date of this Agreement, no shares of Bancorp Preferred Stock were reserved
for issuance, except for 1,500,000 shares of Series A Junior Participating
Preferred Stock reserved for issuance upon exercise of the rights distributed to
the holders of Bancorp Common Stock pursuant to the Rights Agreement, dated as
of July 21, 1996, between Bancorp and American Securities Transfer & Trust,
Inc., as Rights Agent (the "Rights Agreement"). As of the date hereof, the
authorized capital stock of FFBC consists of (i) 15,000,000 shares of common
stock, par value $1.00 per share, of which 100,000 are issued and outstanding
solely to
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Bancorp and are fully paid and nonassessable and (ii) 5,000,000 shares of serial
preferred stock, none of which is issued.
5.9 Good Faith. Bancorp and FFBC shall use their best efforts in good
faith to take or cause to be taken all action required under this Agreement on
its part to be taken as promptly as practicable so as to permit the consummation
of this Agreement at the earliest practicable date and cooperate fully with the
other parties to that end.
5.10 Registration. Bancorp will cause a Registration Statement (or
other appropriate form) to be filed with and declared effective by the
Securities and Exchange Commission ("SEC"), appropriate agencies regulating
securities, and other governmental agencies having jurisdiction, with respect to
the securities to be issued in conjunction with the Merger. The information
pertaining to Bancorp which will appear in the Registration Statement and Proxy
Statement will contain no untrue statement of any material fact or omit to state
any material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they are made, not
misleading.
5.11 Copies of Public Information. Bancorp has made or will make
available for review by Delta all information publicly available concerning
Bancorp and all pension, retirement, thrift, group insurance or similar plans
with respect to any of the directors, officers or other employees of Bancorp or
FFBC.
5.12 Undisclosed Liabilities: Taxes. Bancorp has no material
liabilities other than those liabilities disclosed on or provided for in its
consolidated balance sheet as of December 31, 1996, and liabilities incurred
since such date in the ordinary course of business. Bancorp has paid all
federal, state and local taxes now due and payable and there are no material tax
items now in dispute or anticipated to be disputed.
5.13 Title to Properties. Bancorp has good and marketable title to all
its property and assets set forth on its consolidated balance sheet as of
December 31, 1996, except property and assets sold or otherwise disposed of
since December 31, 1996, in the ordinary course of business, subject to no
liens, mortgages, pledges, encumbrances or charges of any kind except liens
reflected on said consolidated balance sheet and except liens for taxes and
assessments not delinquent, pledges to secure deposits, and such other liens and
encumbrances and imperfections of title as do not materially affect the value of
such property as reflected on said balance sheet and which do not interfere with
or impair its present or continued use, and all of its leases are in full force
and effect and Bancorp is not in default thereunder.
5.14 Absence of Regulatory Actions. Neither Bancorp nor FFBC is a party
to any cease and desist order, written agreement or memorandum of understanding
with, or a party to any commitment letter or similar undertaking to, or is
subject to any order or directive by, or is a recipient of any extraordinary
supervisory letter from, or has adopted any board resolutions at the request of,
federal or state governmental authorities charged with the supervision or
regulation of the operations of any of them nor has it been advised by any such
government authority that it is contemplating issuing or requesting (or is
considering the appropriateness of issuing or requesting) any such order,
directive, written agreement, memorandum or understanding, extraordinary
supervisory letter, commitment letter, board resolutions or similar undertaking.
5.15 Labor Disputes. Bancorp is not directly or indirectly involved in
or threatened with any labor dispute or trouble or organizational effort,
including, without limitation, matters regarding actual or alleged
discrimination by reason of race, creed, sex, disability or national origin,
which might materially and adversely affect its financial condition, assets,
businesses or results of operations.
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5.16 Reserve for Possible Loan Losses. The reserve for possible loan
losses shown on the consolidated balance sheet of Bancorp as of December 31,
1996, is adequate as of the date thereof.
5.17 Benefit Plans. All of the employee benefit plans, programs and
arrangements maintained by Bancorp or FFBC ("Bancorp Benefit Plans") that are
subject to ERISA are in material compliance with all applicable requirements of
ERISA and all other applicable federal and state laws, including the reporting
and disclosure requirements of Part I of Title I of ERISA. Each of the Bancorp
Benefit Plans that is intended to be a pension, profit sharing, stock bonus,
thrift, savings or employee stock ownership plan that is qualified under Section
401(k) of the Code satisfies the applicable requirements of such provision and
there exist no circumstances that would adversely affect the qualified status of
any such Plan under that section, except with respect to any required
retroactive amendment for which the remedial amendment period has not yet
expired. There is no pending or, to the best knowledge of Bancorp, threatened
litigation, governmental proceeding or investigation against or relating to any
Bancorp Benefit Plan and there is no reasonable basis for any material
proceedings, claims, actions or proceedings against any such Bancorp Benefit
Plan. No Bancorp Benefit Plan (or Bancorp Benefit Plan fiduciary in his capacity
as such) has engaged in a non-exempt "Prohibited Transaction" (as defined in
Section 406 of ERISA and Section 4975(c) of the Code) since the date on which
said sections became applicable to such Plan. There have been no acts or
omissions by Bancorp or FFBC that have given rise to any fines, penalties, taxes
or related charges under Sections 502(c), 502(i) or 4071 of ERISA or Chapter 43
of the Code, or that may give rise to any material fines, penalties, taxes or
related damages under such laws for which Bancorp or FFBC may be liable. All
group health plans of Bancorp and FFBC, including any plans of current and
former Affiliates of Bancorp or FFBC that must be taken into account under
Section 4980B of the Code or Section 601 of ERISA or the requirements of any
similar state law regarding insurance continuation, have been operated in
material compliance with the group health plan continuation coverage
requirements of Section 4980B of the Code and Section 601 of ERISA to the extent
such requirements are applicable. All payments due from any Bancorp Benefit Plan
(or from Bancorp or FFBC with respect to any Bancorp Benefit Plan) have been
made, and all amounts properly accrued to date as liabilities of Bancorp or any
Bancorp Subsidiary that have not yet been paid have been properly recorded on
the books of Bancorp or FFBC, as appropriate.
5.18 Accuracy of Information. The statements made by Bancorp and FFBC
in the Agreement and in any other written documents executed and/or delivered by
or on behalf of Bancorp and FFBC pursuant to the terms of the Agreement are true
and correct in all material respects.
5.19 Knowledge as to Conditions. Bancorp and FFBC know of no reason
relating to Bancorp and FFBC why the approvals, consents and waivers of
governmental authorities referred to in Section 5.5 should not be obtained.
5.20 Other Transactions. Nothing contained herein shall in any manner
limit the ability of Bancorp and FFBC to acquire additional banking institutions
or other corporations, either before or after the Effective Date, for such
consideration (cash, notes, common or preferred stock) and upon such terms and
conditions as Bancorp deems appropriate. Notwithstanding the foregoing, Bancorp
will not, and will cause its subsidiaries to not, make or agree to make any
acquisition or take any action that materially adversely affects its ability to
consummate the transactions contemplated hereby in a reasonably timely manner.
5.21 Full Disclosure. No representation or warranty made herein or in
any Disclosure Schedule by Bancorp and FFBC, nor any statement or certificate
given or to be given to Delta pursuant hereto, or
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with respect to the transaction contemplated hereby, contains or will contain
any untrue statements of a material fact, or omits or will omit to state a
material fact necessary to make the statements contained herein or therein not
misleading and Bancorp has made, and will make in good faith on or before the
Closing Date, full disclosure of all material facts with respect to the physical
condition of the properties and assets of Bancorp and with respect to the
financial condition, liabilities and operation of Bancorp.
ARTICLE VI.
COVENANTS OF THE PARTIES
6.1 Conduct of Delta's Business.
(a) Unless the prior written consent of FFBC shall have been obtained
(which shall not be unreasonably withheld) and except as otherwise contemplated
herein, Delta will, and Delta shall cause the Subsidiary to:
(i) operate its businesses in the ordinary course in
accordance with past business practices, except however, as of the date
of this Agreement and thereafter, Delta's residential construction
lending activities shall be limited as detailed at Schedule 6.1 herein;
(ii) use its best efforts to preserve intact its business
organization and assets, maintain their rights and franchises, retain
the services of its officers and key employees (except that it shall
have the right to terminate the employment of any officer or key
employee in accordance with established employment procedures) and
maintain its relationships with customers;
(iii) maintain its corporate existence in good standing and
file all required Delta Reports (as defined in Section 13.6 hereof);
(iv) use its best efforts to maintain and keep their
properties in as good repair and condition as at present, except for
ordinary wear and tear;
(v) use its best efforts to keep in full force and effect
adequate fire, casualty, public liability, employer fidelity and other
insurance coverage and bonds comparable in amount and scope of coverage
to that now maintained by it and, in the event that Delta is unable to
keep such insurance and bonds in full force and effect, to provide
prompt notice of such failure to FFBC and Bancorp;
(vi) perform all material obligations required to be performed
by it under all material contracts, leases, and documents relating to
or affecting its assets, properties, and business;
(vii) use its best efforts to comply with and perform in all
material respects all obligations and duties imposed upon it by all
applicable laws and regulations;
(viii) as soon as reasonably practicable, furnish FFBC copies
of all of Delta's periodic reports filed with the OTS and the FDIC
subsequent to the date hereof;
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(ix) Delta shall (i) give Bancorp prompt written notice of the
receipt of any notice from a stockholder of his intent to demand
payment for his shares, (ii) not settle or offer to settle any such
demands without the prior written consent of Bancorp and (iii) not,
without the prior written consent of Bancorp, waive any failure to
timely deliver a written objection to the Merger and a demand for
appraisal of such shares in accordance with applicable law; and
(x) immediately upon the execution of this Agreement, direct
its accountants and attorneys to give FFBC and Bancorp access to all
relevant and material information, documents and working papers
pertaining to Delta.
(b) Negative Covenants. Except as specifically contemplated by this
Agreement, from the date hereof until the Effective Date, Delta shall not do,
nor cause the Subsidiary to do, without the prior written consent of FFBC and
Bancorp, any of the following:
(i) incur any material liabilities or material obligations,
whether directly or by way of guaranty, including any obligation for
borrowed money whether or not evidenced by a note, bond, debenture or
similar instrument or enter into or extend any material agreement
(including existing employment agreements) or lease, except in the
ordinary course of business consistent with past business practices or
in connection with the transactions contemplated and permitted by the
Agreement. Notwithstanding the foregoing, the term of the employment
agreement between Delta and Mr. Lesley R. McPherson, Vice President,
may be extended up to a term ending on June 1, 1998, within the
discretion of Delta. Notwithstanding the foregoing, the employment
agreement between Delta and Mr. Humphries may be amended within the
discretion of Delta to provide for an extension of the term of the
employment agreement for a term ending on June 1, 2000, provided that
any such amendment also provides that such individual shall not, other
than as requested by Delta, or any successor to Delta, engage in
employment or other professional activities for the benefit of a
financial institution or other business entity involved in transactions
involving banking, mortgage lending, consumer debt financing, business
financing, accepting of retail insured deposits and other related
activities currently engaged in by Delta, or any succesor to Delta,
within a one hundred mile radius of Delta, Colorado, for a period of
not less than eighteen months from the date of termination of
employment with Delta or any successor to Delta, if later, without the
prior written consent of Delta or any successor to Delta.
(ii) (A) grant any material increase in compensation to its
directors or grant any increase in compensation to its officers and
employees either individually or as a class, except routine periodic
increases and performance bonuses pursuant to Delta's existing bonus
plan in the ordinary course of business and in accordance with past
practices or as required by law, (B) effect any change in retirement
benefits to any class of employees or officers (unless any such change
shall be required by applicable law) that would increase its retirement
benefit liabilities, (C) adopt, enter into, amend or modify any Delta
Benefit Plan, or (D) enter into or amend any employment, severance or
similar agreements or arrangements with any directors or officers,
except as contemplated by the Agreement; provided, however that any
bonuses pursuant to Delta's bonus plan shall be limited to 115% of the
awards granted in fiscal 1996;
(iii) declare or pay any dividend on, or make any other
distribution in respect of, its outstanding shares of capital stock
other than in accordance with past practice as detailed at Section 8.8
hereinafter;
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(iv) (A) except pursuant to the exercise of existing options
as of the date of this Agreement, redeem, purchase or otherwise acquire
any shares of its capital stock or any securities or obligations
convertible into or exchangeable for any shares of its capital stock,
or any options, warrants, conversion or other rights to acquire any
shares of their capital stock or any such securities or obligations;
(B) subject to the fiduciary obligations of Delta's Board of Directors,
merge with or into any other corporation, savings institution or bank,
permit any other corporation, savings institution or bank to merge into
it or consolidate with any other corporation or bank, or effect any
reorganization or recapitalization; (C) purchase or otherwise acquire
any substantial portion of the assets, or more than five percent (5%)
of any class of stock, of any corporation, savings institution, bank or
other business; (D) liquidate, sell, dispose of, or encumber any assets
or acquire any assets, other than in the ordinary course of its
business consistent with past practices; or (E) split, combine or
reclassify any of its capital stock or issue or authorize or propose
the issuance of any other securities in respect of, in lieu of or in
substitution for, shares of its capital stock;
(v) except pursuant to the exercise of existing options as of
the date of this Agreement, issue, deliver, award, grant or sell, or
authorize or propose the issuance, delivery, award, grant or sale of,
any shares of its capital stock of any class (including shares held in
treasury), any debt instrument having a right to vote or any securities
convertible into, or any rights, warrants or options to acquire, any
such shares, voting debt or convertible securities;
(vi) except to the extent legally required for the discharge
by the board of directors of its fiduciary duties, Delta shall direct,
and shall use its best efforts to cause its directors, employees,
agents and representatives not to, during the period beginning on the
date hereof and ending on the first to occur of (a) the Effective Date
or (b) the termination of this Agreement (i) sell or arrange for the
sale of any Delta capital stock; (ii) negotiate, solicit or encourage
or authorize any person to solicit from any third party any proposals
relating to the merger or consolidation of Delta, disposition of the
business or assets of Delta or the acquisition of the capital stock or
the common stock or Delta; or (iii) make any information concerning
Delta available to any person for the purpose of affecting or causing a
merger, consolidation or disposition of Delta or their assets or common
stock.
(vii) propose or adopt any amendments to Delta's Charter or
bylaws, except such amendments as may be required to consummate the
transactions contemplated by this Agreement;
(viii) enter into an agreement in principle with respect to
any acquisition of a material amount of assets or securities or any
release or relinquishment of any material contract rights not in the
ordinary course of business;
(ix) except in its fiduciary capacity, purchase any shares of
capital stock of Bancorp;
(x) change any of its methods of accounting in effect at
September 30, 1996, or change any of its methods of reporting income or
deductions for federal income tax purposes from those employed in the
preparation of the federal income tax returns for the taxable year
ending September 30, 1996, except as may be required by law or
generally accepted accounting principles;
(xi) willfully take action which would or is reasonably likely
to (i) adversely affect the ability of either of Bancorp, FFBC or Delta
to obtain any necessary approvals of governmental
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authorities required for the transactions contemplated hereby; (ii)
adversely affect Delta's ability to perform its covenants and
agreements under this Agreement; or (iii) result in any of the
conditions to the Merger set forth in Articles X and XI not being
satisfied;
(xii) change in any material respect the lending, investment,
deposit, asset and liability management and other material policies
concerning the business of Delta, unless required by law or regulation
or, with respect to lending or depository activities, unless such
change is made in response to market conditions;
(xiii) file any applications or make any contract with respect
to branching by Delta (whether de novo or by purchase, sale or
relocation);
(xiv) form any new subsidiary or cause or permit a material
change in the activities presently conducted by Delta or make
additional material investments in subsidiaries or enter into or invest
in any partnership, joint venture or other business enterprise;
(xv) purchase any debt securities or derivative securities
including collateralized mortgage obligations or real estate mortgage
investment conduits products that are defined as "high risk mortgage
securities" under OTS Thrift Bulletin No. 52;
(xvi) agree in writing or otherwise to do any of the
foregoing.
6.2 Covenants of Bancorp. Except as set forth in Schedule 6.2 of the
Bancorp Disclosure Schedule or as otherwise contemplated by this agreement or
consented to in writing by Delta, Bancorp shall not, and shall not permit FFBC
to:
(a) solely, in the case of Bancorp, declare or pay any
extraordinary or special dividends on or make any other extraordinary or special
distributions in respect of any of its capital stock; provided, however, that
nothing contained herein shall prohibit Bancorp from increasing the quarterly
cash dividend of the Bancorp Common Stock;
(b) take any action that is intended or may reasonably be
expected to result in any of its representations and warranties set forth in
this Agreement being or becoming untrue in any material respect, or in any of
the conditions to the Merger set forth in Article IX not being satisfied, or in
a violation of any provision of this agreement except in every case, as may be
required by applicable law;
(c) take or cause to be taken any action which would
disqualify the Merger as a tax free reorganization under Section 368 of the
Code;
(d) amend its Articles of Incorporation or Bylaws or other
governing instrument in a manner which would adversely affect in any manner the
terms of the Bancorp Common Stock or the ability of Bancorp to consummate the
transactions contemplated hereby;
(e) make any acquisition that individually or in the aggregate
can reasonably be expected to materially adversely affect the ability of Bancorp
to consummate the transactions contemplated hereby in a reasonably timely
manner, or enter into any agreement providing for, or otherwise participate in,
any merger, consolidation or other transaction in which Bancorp or any surviving
corporation may be required
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not to consummate the Merger or any of the other transactions contemplated
hereby in accordance with the terms of this Agreement; or
(f) engage in any conversations or negotiations with any
existing loan origination correspondent of Delta prior to the closing of the
Merger, without the prior consent of Delta, such consent shall not unreasonably
be withheld.
(g) agree to do any of the foregoing.
6.3 Reports. The Parties will use their best efforts to keep the other
Parties fully informed concerning all trends and developments of which it
becomes aware that may have a material adverse effect upon the business,
properties or condition (either financial or otherwise) of Delta, FFBC or
Bancorp, as the case may be.
6.4 Breaches. The Parties shall, in the event they become aware of the
impending or threatened occurrence of any event or condition which would cause
or constitute a material breach (or would have caused or constituted a breach
had such event occurred or been known prior to the date hereof) of any of its
representations or agreements contained or referred to herein, give prompt
written notice thereof to the other Party and use their best efforts to prevent
or promptly remedy the same.
6.5 Consents and Approvals. The Parties shall use their best efforts to
assist the Parties in obtaining the consents and approvals referenced in Section
8.3 hereof.
6.6 Non-Solicitation.
(a) Delta shall not (i) solicit, initiate, participate in discussions
of, or encourage or take any other action to facilitate (including by way of the
disclosing or furnishing of any information that is not legally obligated to
disclose or furnish) any inquiry or the making of any proposal relating to any
Acquisition Transaction (as defined below) or a potential Acquisition
Transaction with respect to itself or (ii) (A) solicit, initiate, participate in
discussions of, or encourage or take any other action to facilitate any inquiry
or proposal, or (B) enter into any agreement, arrangement, or understanding
(whether written or oral) regarding any proposal or transaction providing for or
requiring it to abandon, terminate or fail to consummate this Agreement, or
compensating it under any of the instances described in this clause. Delta shall
immediately instruct and otherwise use its best efforts to cause its directors,
officers, employees, agents, advisors (including, without limitation, any
investment banker, attorney, or accountant retained by it), consultants and
other representatives to comply with such prohibitions. Delta shall immediately
cease and cause to be terminated any existing activities, discussions, or
negotiations with any parties conducted heretofore with respect to such
activities. Notwithstanding the foregoing, Delta may provide information at the
request of or enter into negotiations with a third party with respect to an
Acquisition Transaction if the Board of Directors of Delta determines, in good
faith, that the exercise of its fiduciary duties to Delta's stockholders under
applicable law, as advised in a written opinion issued by its counsel, requires
it to take such action, and, provided further, that Delta may not, in any event,
provide to such third party any information which it has not provided to Bancorp
or FFBC. Delta shall promptly notify Bancorp or FFBC orally and in writing in
the event it receives any such inquiry or proposal and shall provide reasonable
detail of any relevant facts relating to such inquiries, along with a summary of
the written opinion of its counsel. This Section shall not prohibit accurate
disclosure by Delta in any document (including the Proxy Statement and the
Registration Statement) or other disclosure to the extent required under
applicable law if in the opinion of
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the Board of Directors of Delta, disclosure is required under applicable law as
to transactions contemplated hereby.
(b) "Acquisition Transaction" shall, with respect to Delta, mean any of
the following: (i) a merger or consolidation, or any similar transaction (other
than the Merger) of any company with Delta, (ii) a purchase, lease or other
acquisition of all or substantially all the assets of Delta, (iii) a purchase or
other acquisition of "beneficial ownership" by any "person" or "group" (as such
terms are defined in Section 13(d)(3) of the Securities Exchange Act of 1934, as
amended) (including by way of merger, consolidation, share exchange, or
otherwise) which would cause such person or group to become the beneficial owner
of securities representing 20.0% or more of the voting power of Delta, but
excluding the acquisition of beneficial ownership by any employee benefit plan
maintained or sponsored by Delta, (iv) a tender or exchange offer to acquire
securities representing 20.0% or more of the voting power of Delta, (v) a public
proxy or consent solicitation made to stockholders of Delta seeking proxies in
opposition to any proposal relating to any of the transactions contemplated by
this Agreement that has been recommended by the Board of Directors of Delta,
(vi) the filing of an application or notice with the Federal Reserve Board, the
OTS, or any other federal or state regulatory authority (which application has
been accepted for processing) seeking approval to engage in one or more of the
transactions referenced in clauses (i) through (iv) above, or (vii) the making
of a bona fide proposal to Delta or its stockholders by public announcement or
written communication, that is or becomes the subject of public disclosure, to
engage in one or more of the transactions referenced in clauses (i) through (v)
above.
ARTICLE VII.
INVESTIGATION - CONFIDENTIALITY
7.1 Access to Information.
(a) Upon reasonable notice and subject to applicable laws relating to
the exchange of information, Delta shall, and shall cause the Subsidiary to,
afford to the officers, employees, accountants, counsel and other
representatives of Bancorp and FFBC, access, during normal business hours during
the period prior to the Effective Time, to all its properties, books, contracts,
commitments, records, officers, employees, accountants, counsel and other
representatives and, during such period, Delta shall, and shall cause the
Subsidiary to, make available to Bancorp and FFBC (i) a copy of each report,
schedule, registration statement and other document filed or received by it
during such period pursuant to the requirements of Federal securities laws or
Federal or state banking laws (other than reports or documents which Delta is
not permitted to disclose under applicable law) and (ii) all other information
concerning its business, properties and personnel as Bancorp and FFBC may
reasonably request. Neither Delta nor the Subsidiary shall be required to
provide access to or to disclose information where such access or disclosure
would violate or prejudice the rights of Delta customers, jeopardize any
attorney-client privilege or contravene any law, rule, regulation, order,
judgment, decree, fiduciary duty or binding agreement entered into prior to the
date of this Agreement. The parties hereto will make appropriate substitute
disclosure arrangements under circumstances in which the restrictions of the
preceding sentence apply. Bancorp will hold all such information in confidence
to the extent required by, and in accordance with, the provisions of this
Agreement.
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(b) Upon reasonable notice and subject to applicable laws relating to
the exchange of information, Bancorp shall, and shall cause its subsidiaries to,
afford to the officers, employees, accountants, counsel and other
representatives of Delta, access, during normal business hours during the period
prior to the Effective Time, to such information regarding Bancorp and its
subsidiaries as shall be reasonably necessary for Delta to fulfill its
obligations pursuant to this Agreement to prepare the Proxy Statement or which
may be reasonably necessary for Delta to confirm that the representations and
warranties of Bancorp and FFBC contained herein are true and correct and that
the covenants of Bancorp and FFBC contained herein have been performed in all
material respects. Neither Bancorp nor any of its subsidiaries shall be required
to provide access to or to disclose information where such access or disclosure
would violate or prejudice the rights of Bancorp's customers, jeopardize any
attorney-client privilege or contravene any law, rule, regulation, order,
judgment, decree, fiduciary duty or binding agreement entered into prior to the
date of this Agreement. The parties hereto will make appropriate substitute
disclosure arrangements under circumstances in which the restrictions of the
preceding sentence apply. Delta will hold all such information in confidence to
the extent required by, and in accordance with, the provisions of this
Agreement.
7.2 Confidentiality. Until the Closing Date, neither Bancorp nor Delta
shall, without the prior written consent of the other party, disclose to third
parties, and shall use care to assure that their directors, officers, employees,
and advisers do not disclose to third parties, any confidential information,
which shall include all information received from Bancorp or Delta in the course
of discussing, investigating, negotiating and performing the transactions
contemplated by this Agreement, whether such information has been obtained
before or after the date of execution of this Agreement. The term "confidential
information" does not include information which (i) is known to Bancorp or FFBC,
their directors, officers, employees, or advisers, prior to its disclosure to
Bancorp by Delta; (ii) is or becomes publicly known or available; or (iii) is
independently developed or discovered by Bancorp or FFBC, their directors,
officers, employees, or advisers outside of the discussions, investigations,
negotiations and performance contemplated by this Agreement. "Third parties" do
not include directors, officers, employees, or advisors of Delta.
In the event that the Merger contemplated by this Agreement is not
consummated, or this Agreement is otherwise terminated, the Parties shall
promptly return to each other all such confidential information (and all copies
thereof), without retaining any copies, or to the extent agreed by Bancorp, FFBC
or Delta, as the case may be, shall destroy information and documents not to be
returned, including all electronic images, and confirm such destruction in
writing to any other Party; and thereafter all such information shall continue
not to be disclosed by Bancorp, FFBC or Delta, as the case may be, and their
directors, officers, employees, or advisors to third parties without the other
Party's written consent.
ARTICLE VIII.
ADDITIONAL AGREEMENTS
8.1 Delta Shareholders' Meeting. Delta shall, as soon as is reasonably
practicable but in no event later than September 15, 1997, call and hold a
meeting of their shareholders (the "Shareholders' Meeting") to submit for
shareholder approval this Agreement and any amendments to Delta's Charter deemed
necessary to effectuate the Agreement. The Board of Directors of Delta will,
subject to their fiduciary obligations, recommend that holders of Delta Common
Stock, vote in favor of and approve this Agreement at the Shareholders' Meeting.
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8.2 Proxy Statement for Shareholders' Meetings.
(a) For the purposes of holding the Shareholders' Meeting, Delta and
Bancorp shall prepare an appropriate joint proxy statement(s) and prospectus
satisfying all applicable legal requirements of the applicable statutes, rules
and regulations (said proxy statement(s), together with any and all amendments
or supplements thereto, being herein referred to as the "Proxy Statement").
(b) As soon as practicable after the date hereof, Bancorp and Delta
shall file the Proxy Statement with the OTS and the SEC, as may be applicable,
and use its best efforts to respond to the comments of the OTS and the SEC and
to obtain the clearance of the OTS and the SEC for mailing the Proxy Statement.
Promptly after the Proxy Statement is cleared by the OTS and the SEC, Delta and
Bancorp shall mail the Proxy Statement to all holders of record of shares of
Delta Common Stock who are holders on the record date for the Shareholders'
Meeting.
8.3 Cooperation: Regulatory Approvals. The Parties shall cooperate, and
shall cause each of their affiliates and subsidiaries to cooperate, in the
preparation and submission by them, as promptly as reasonably practicable, of
such applications, petitions, and other documents and materials as any of them
may reasonably deem necessary or desirable to the OTS, the FDIC, the Department
of Justice ("DOJ"), other regulatory authorities, including such filings and
approvals as are required to be made or obtained under the securities or "blue
Sky" laws of various states in connection with the issuance of the shares of
Bancorp Common Stock pursuant to this Agreement, and any other persons for the
purpose of obtaining any approvals or consents necessary to consummate the
transactions contemplated by the Agreement. Each party will have the right to
review and comment on such applications, petitions and other documents and
materials and shall furnish to the other copies thereof promptly after filing or
submission thereof. At the date hereof, none of the parties is aware of any
reason that the regulatory approvals required to be obtained by it would not be
obtained. The obligation to take action as provided in this Section 8.3 shall
not be construed as including an obligation to accept any terms of or conditions
to a consent, authorization, order or approval of, or any exemption by, any
party that in the reasonable judgment of the Boards of Directors of Bancorp or
Delta would so materially and adversely impact the economic or business benefits
to Bancorp or Delta, as appropriate, from the transaction contemplated by this
Agreement so as to render inadvisable the consummation of the Merger. In the
event of a restraining order or injunction which prevents the Closing by reason
of the operation of Section 11.3, each of the parties hereto shall use its
respective best efforts to cause such order or injunction to be lifted and the
Closing to be consummated as soon as reasonably practicable.
8.4 Organization and Qualification of Interim, FFBC and Bancorp. FFBC,
Interim and Delta shall enter into a merger agreement in substantially the form
attached as Exhibit A to this Agreement and shall cause the Parties to take such
action as is provided in this Agreement to consummate the Merger.
8.5 Reports. Prior to the Effective Date, Delta shall prepare and file
with the OTS and the FDIC as the case may be, as and when required all Delta
Reports. Delta shall prepare such Delta Reports so that (a) they comply in all
material respects with all of the statutes, rules and regulations enforced or
promulgated by the regulatory authority with which they are filed and do 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, and (b) with respect to any Delta Reports containing financial
information of the type included in Delta's financial statements, the financial
information (i) is prepared in accordance with generally accepted accounting
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principles and practices as utilized in Delta's financial statements applied on
a consistent basis, (ii) presents fairly the consolidated financial condition of
Delta at the dates, and the consolidated results of operations and cash flows
for the periods, stated therein and (iii) in the case of interim fiscal periods,
reflects all adjustments, consisting only of normal recurring items, subject to
year-end audit adjustments.
8.6 Brokers or Finders. Each of Bancorp and Delta represents that no
agent, broker, investment banker, financial advisor or other firm or person is
or will be entitled to any broker's or finder's fee or any other commission or
similar fee in connection with any of the transactions contemplated by this
Agreement, except the Financial Advisor, whose fees and expenses will be paid by
Delta, in accordance with the agreement with such firm, and each of Bancorp and
Delta respectively agrees to indemnify and hold the other harmless from and
against any and all claims, liabilities or obligations with respect to any other
fees, commissions or expenses asserted by any person on the basis of any act or
statement alleged to have been made by such party or its affiliate.
8.7 Additional Agreements: Reasonable Efforts. Subject to the terms and
conditions of this Agreement, each of the parties hereto agrees to use all
reasonable efforts to take, or cause to be taken, all action and to do, or cause
to be done, all things necessary, proper or advisable under applicable laws and
regulations to consummate and make effective the transactions contemplated by
the Agreement, subject to the appropriate vote of the shareholders of Delta
described in Section 8.1, including cooperating fully with the other party. In
case at any time after the Effective Date any further action is necessary or
desirable to carry out the purposes of this Agreement or to vest Bancorp with
full title to all properties, assets, rights, approvals, immunities and
franchises of Delta, the proper officers and directors of each party to this
Agreement shall take all such necessary action.
8.8 Release of Information. Bancorp, FFBC and Delta agree that prior to
making any public announcement with respect to the transactions contemplated by
this Agreement, the Parties will consult with each other and will use their best
efforts either to agree upon the text of the proposed joint announcement to be
made by the Parties or to obtain the other's approval (which approval shall not
be unreasonably withheld) of the text of an announcement to be made solely on
behalf of such party. In the event that the Parties do not ultimately agree on
the text of any proposed public announcement, no such disclosure shall be made
unless the party seeking to make an announcement is advised by counsel that its
failure to do so would be reasonably likely to constitute a violation of law.
8.9 Subsequent Interim Financial Statements.
(a) As soon as reasonably available, but in no event more than 45 days
after the end of each fiscal quarter ending after the date of this Agreement
(other than the last quarter of each fiscal year), Bancorp will deliver to
Delta, Bancorp's quarterly report of Form 10-Q, as filed with the SEC under the
Exchange Act, and as soon as reasonably available, but in no event more than 90
days after the end of each fiscal year, Bancorp will deliver to Delta, Bancorp's
Annual Report on Form 10-K, as filed with the SEC under the Exchange Act.
(b) As soon as reasonably available and in accordance with past
practice, Delta will deliver to Bancorp, Delta's Office of Thrift Supervision
Thrift Financial Report and quarterly report to shareholders, and as soon as
reasonably available, following the end of each fiscal year, Delta will deliver
to Bancorp, Delta's Annual Report to Stockholders.
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8.10 Employee Matters.
Future employment of the employees of Delta will be based on FFBC's
staffing needs. The ultimate decisions relating to the retention, assignment and
compensation of personnel will be the responsibility of management of FFBC. To
the extent that as of the Closing Date employment with FFBC is not scheduled to
commence following the Closing Date by a Delta employee employed by Delta as of
the Closing Date and at work at Delta within the six business day period prior
to the Closing Date, Delta employees as of the Closing Date shall receive
severance benefits in accordance with Delta's severance plan in effect as of
March 3, 1997, with a minimum benefit of eight (8) weeks base pay and the costs
of continuing medical insurance coverage to participants as in effect as of the
Closing Date under the programs offered by FFBC for a period of two months paid
by FFBC. Thereafter, such terminated former Delta employees shall be eligible to
continue such medical insurance at their own personal expense in accordance with
applicable law ("COBRA Rights"). Such severance benefits shall not be applicable
to employees referenced at Section 8.19(b) who have entered into written
agreements with Delta.
8.11 Board Members. The existing members of the Board of Directors of
FFBC as of the Closing date will continue to be the board members of FFBC.
8.12 Breaches. Bancorp, FFBC and Delta, as the case may be, shall, in
the event they become aware of the impending or threatened occurrence of any
event or condition which would cause or constitute a material breach (or would
have caused or constituted a breach had such event occurred or been known prior
to the date hereof) of any of its representations or agreements contained or
referred to herein, give prompt written notice thereof to the other party and
use their best efforts to prevent or promptly remedy the same.
8.13 Payment upon Termination - Subsequent Acquisition Transaction.
(a) Delta hereby agrees, if following the execution of the Agreement:
(i) Delta enters into an agreement to complete an Acquisition Transaction prior
to the termination of the Agreement, or (ii) within fifteen months after the
termination of the Agreement, Delta enters into an Acquisition Transaction,
Delta shall pay FFBC compensation and damages totalling $500,000, in addition to
any payments that may be required in accordance with Section 8.13(b) herein.
Notwithstanding the foregoing, payments pursuant to this Section 8.13(a) shall
not be required in the event of termination of the Agreement pursuant to
Sections 12.1(a) or 12.1(b)(v), or in the event that Delta shall receive
reimbursements pursuant to Section 8.13(c) of the Agreement.
(b) In the event that Delta refuses to consummate the Merger after all
of the conditions in Article X and XI have been satisfied or waived, or in the
event that this Agreement is terminated by Bancorp and FFBC by reason of the
breach by Delta of any of its material representations, warranties, covenants or
agreements contained herein, or by reason of the willful breach of any of
Delta's representations, warranties, covenants or agreements contained herein,
then, in lieu of any other rights or remedies of Bancorp and FFBC, Delta shall
reimburse FFBC for its expenses not to exceed $125,000. Such amount shall be in
addition to, and in no way limit any payments that may be required in accordance
with Section 8.13(a) herein.
(c) In the event that Bancorp or FFBC refuses to consummate the Merger
after all of the conditions in Article IX and XI have been satisfied or waived,
or in the event that this Agreement is
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terminated by Delta by reason of the breach by Bancorp or FFBC of any of their
material representations, warranties, covenants or agreements contained herein,
or by reason of the willful breach of any of Bancorp's or FFBC's
representations, warranties, covenants or agreements contained herein, then, in
lieu of any other rights or remedies of Delta, Bancorp shall reimburse Delta for
its expenses not to exceed $125,000.
8.14 Supplements to Disclosure Schedules. Bancorp, FFBC and Delta will
promptly supplement or amend their Disclosure Schedules with respect to any
matter hereafter arising that, if existing or occurring at the date of this
Agreement, would have been required to be set forth or described in the
Disclosure Schedules. No supplement or amendment to the Disclosure Schedules
will have any effect for the purpose of determining satisfaction of the
conditions set forth in Sections 10.2 and 11.1 hereof.
8.15 Confidentiality. Bancorp, FFBC and Delta agree to treat as
strictly confidential and agrees not to divulge to any other person, natural or
corporate (other than employees of, and attorneys and accountants for, such
party) any proprietary financial statements, schedules, contracts, agreements,
instruments, papers, documents and other information relating to Delta, FFBC or
Bancorp (as the case may be) by which it may come to know or which may come into
its possession during the course of its due diligence investigation of Delta,
FFBC or Bancorp, as the case may be, and, if the transactions contemplated
hereby are not consummated for any reason, Bancorp agrees promptly to return to
Delta (and Delta to Bancorp) all written proprietary material furnished in
connection with such investigation.
8.16 Due Diligence. Bancorp, FFBC and Delta shall complete their due
diligence review of the books, records and operations of the other parties
within thirty days of the date of this Agreement. If written notice of an
objection is not received within a thirty (30) day period of the date of this
Agreement, it will be assumed that the due diligence review has been completed
to the satisfaction of the parties. Notwithstanding the foregoing, FFBC shall
have 45 days from the date of execution of this Agreement to cause an
independent environmental consultant of its choice to inspect and audit at
FFBC's expense, the assets and real property of Delta and the Subsidiary for the
evaluation and determination of the existence of any and all environmental
conditions and any and all violations of environmental laws, as is commonly
referred to as a Phase I environmental study (the "Environmental Audit"). If
such Environmental Audit discovers any environmental condition that FFBC
reasonably finds unacceptable within its sole discretion ("Environmental
Condition"), FFBC may terminate this Agreement by delivery of written notice of
termination on or before the day which is forty-five (45) days from the date of
the Agreement, which notice shall identify such Environmental Condition. Delta
shall have 45 days from the receipt of such notice of termination to undertake
such actions as are necessary to the reasonable satisfaction of FFBC to cure
such defects or conditions in which case such notice of termination shall be
deemed withdrawn. FFBC shall furnish Delta with a copy of the results of such
Environmental Audit within three (3) business days of receipt of such report.
The result of such Environmental Audit shall not be disclosed to any third party
without the prior written consent of the Parties. Further, FFBC may contract
with an independent firm at its own expense to conduct structural, engineering
and mechanical inspections of the premises and Leasehold improvements related to
Delta's office building within 30 days from the signing of the Agreement. Delta
shall provide reasonable access to the property and leasehold improvements
during these time periods. The inspection may include, but not be limited to,
areas of heating, air conditioning, plumbing, roof, electric, basement, well,
septic, insulation, radon, termite, structure of the premises, banking equipment
and related matters. Delta shall also allow samples to be taken of the contents
of the building and the surrounding property, including test borings, to
determine the presence of underground storage tanks and or ground/water
contamination. Should the inspection report be reasonably unacceptable to FFBC
and Delta is unable to cure
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within 30 days, FFBC within its sole discretion, may void the Agreement. Time
periods of the inspection may be expanded for a reasonable period of time
pending delivery of laboratory results.
8.17 Indemnification of Directors and Officers. FFBC will continue to
indemnify officers and Directors of Delta for prior acts in accordance with the
provisions of FFBC bylaws and applicable OTS regulations for a period of three
years from the Merger date. Ongoing insurance will be provided for the retained
officer(s) under the policy of FFBC.
8.18 Dividends. Delta will continue its ongoing semi-annual dividend
policy through the Closing Date in accordance with past practice.
8.19 Other Benefits Matters.
(a) Employee Stock Ownership Plan. On or before the Merger date, Delta
will terminate the Delta Federal Savings Bank ESOP and distribute such plan
assets to plan participants.
(b) Employment Agreements.
(i) Except as set forth below, Delta shall not initiate the
termination of the employment of David A. Humphries, President, or
Lesley R. McPherson, Vice President, (collectively, the "Officers")
absent termination for cause, or the death or disability of the
employee, prior to the Closing, nor shall Delta make any payment under
any employment agreements between Delta and either or both Officers
associated with the Merger prior to the Closing without the prior
written consent of FFBC.
(ii) Payments under the Employment Agreements between Delta
and the Officers (the "Employment Agreements") shall be paid in
accordance with their respective Employment Agreements, provided
however, in the case of Mr. Humphries, prior to the receipt of such
payments in accordance with termination of employment under the
Employment Agreement, Mr. Humphries shall enter into a written
agreement with FFBC that provides that such individual shall not, other
than as requested by Bancorp or FFBC, engage in employment or other
professional activities for the benefit of a financial institution or
other business entity involved in transactions involving banking,
mortgage lending, consumer debt financing, business financing,
accepting of retail insured deposits and other related activities
currently engaged in by Delta, Bancorp and FFBC within a one hundred
mile radius of Delta, Colorado, for a period of not less than eighteen
months from the date of termination of employment with Delta, without
the prior written consent of FFBC.
(iii) As of the Closing, Delta shall terminate the employment
of Mr. David Humphries, President and Mr. Lesley R. McPherson, Vice
President, and shall immediately pay such individuals in the form of a
lump sum payment the amounts due such individuals under the Employment
Agreements. Prior to such payments by Delta, Delta shall furnish FFBC
with documentation of the calculation of such payments. As of the
Closing, FFBC may enter into an agreement with the Officers setting
forth the terms of any future employment relationship between FFBC and
the Officers.
(iv) On or prior to the Closing Date, the Officers shall
execute an agreement whereby such Officers shall acknowledge and
consent that the opportunity to participate in the group medical
insurance program sponsored by FFBC for its employees, as may be
amended from time to time, shall be accepted as constituting benefits
which are substantially the same health benefits as are
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offered by Delta for its executive officers, and that eligibility to
participate in such FFBC plans shall satisfy the applicable provisions
of the Employment Agreements.
(c) Such Delta employees employed by FFBC as of the Closing Date will
be eligible thereafter to receive the same employee benefits, including but not
limited to medical insurance, vacation pay, sick leave, and severance pay as are
extended to FFBC's other similarly situated employees, giving effect to all
prior years of service with Delta prior to the Closing Date (with no uninsured
waiting periods or pre-existing condition limitations being imposed on otherwise
eligible employees). With respect to any Code Section 401(a) plans of FFBC, such
employees shall have all prior Delta service recognized for purposes of
eligibility to participate and benefits vesting under such plans, but not with
regard to benefits accrual.
(d) As of the Closing Date, Delta shall take such actions that are
necessary to pay all liabilities for all wages payable through the Closing Date
as of the Closing Date. FFBC shall not assume any liabilities with respect to
wages or benefits earned or accrued by Delta employees prior to the Closing
Date; provided however, with respect to Delta employees that shall as of the
Closing Date be employed by FFBC, all accrued but unused vacation time shall be
maintained by FFBC. With respect to Delta employees that shall terminate
employment as of the Closing Date, all accrued vacation shall be paid as of the
Closing Date, provided however, such payments for accrued vacation shall not
exceed the annual vacation benefit payable to any such terminating employee pro
rata based upon the product of (.08333) times the number of calendar months that
have commenced in the calendar year, plus any prior year carryover allowances,
multiplied by the hourly rate of pay in effect as of the Closing Date.
8.20 Accountants' Letters. Delta shall use its reasonable efforts to
cause to be delivered to the other party a letter of its independent public
accountants dated (i) the date on which the S-4 shall become effective and (ii)
a date shortly prior to the Effective Time, and addressed to Bancorp and FFBC,
in form and substance customary for "comfort" letters delivered by independent
accountants in accordance with Statement of Financial Accounting Standards No.
72.
8.21 Stock Exchange Listing. Bancorp shall use all reasonable efforts
to cause the shares of Bancorp Common Stock to be issued in the Merger to be
approved for listing on the Nasdaq National Market, subject to official notice
of issuance, as of the Effective Time.
8.22 Directors. Delta shall cause each of its directors to deliver to
FFBC and Bancorp duly signed resignations which resignations shall be effective
as of the Effective Time.
ARTICLE IX.
CONDITIONS TO THE OBLIGATIONS OF BANCORP AND FFBC
The obligations of Bancorp and FFBC under this Agreement to cause the
transactions contemplated herein to be consummated shall be subject to the
satisfaction or written waiver by Bancorp of the following conditions:
9.1 No Material Adverse Effect. Except as disclosed in Schedule 4.5 to
the Delta Disclosure Schedule and except for general changes in market interest
rates, payments due under any employment agreements or benefit plans which may
be modified, altered or terminated in connection with this Agreement and the
transactions contemplated hereby, costs and expenses relating to this Agreement
and the transactions
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contemplated hereby, there shall not have been any material adverse change, or
discovery of a condition or the occurrence of any event that has or is likely to
result in such a change, in the financial condition, results of operations or
business of Delta from December 31, 1996 to the Closing Date.
9.2 Representations and Warranties. Each of the representations and
warranties by Delta contained in this Agreement shall be true and correct in all
material respects (or where any statement in a representation or warranty
expressly contains a standard of materiality, such statement shall be true and
correct in all respects taking into consideration the standard of materiality
contained therein) at, or as of, the date of this Agreement and (except to the
extent such representation speaks as of an earlier date) and as of any date
subsequent, until and including the Closing Date (except as otherwise
contemplated or permitted by this Agreement) as though such representations and
warranties were made on and as of said date. Any information provided by Delta
pursuant to Section 8.12 hereof as a supplement to the Delta Disclosure Schedule
shall be true and correct in all material respects as of the date such
information is supplied to Bancorp.
9.3 Performance and Compliance. Delta shall have performed or complied
in all material respects with all covenants and agreements required by the
Agreement to be performed and satisfied by them on or prior to the Closing Date.
9.4 No Proceeding or Litigation. On the Closing Date, no suit, action
or proceeding shall be pending or overtly threatened, and no liability or claim
shall have been asserted against Delta involving any of the assets, properties,
business or operations of Delta that would reasonably be expected to have a
Material Adverse Effect.
9.5 Consents Under Agreements. Bancorp shall have received the consent
or approval of each person whose consent or approval shall be required in order
to permit consummation of the Merger under any loan or credit agreement, note,
mortgage, indenture, lease or other agreement or instrument to which Delta is a
party or to which its respective property is subject, except those for which
failure to obtain such consents and approvals would not, individually or in the
aggregate, have a Material Adverse Effect on Bancorp, whether prior to (if
applicable) or following the consummation of the transactions contemplated
hereby.
9.6 No Amendments to Resolutions. Neither the Board of Directors of
Delta nor any committees thereof shall have amended, modified, rescinded or
repealed the resolutions adopted by such Boards of Directors with respect to the
Agreement or shall have adopted any other resolutions in connection with the
Agreement and the transactions contemplated hereby which are inconsistent with
such resolutions, except resolutions adopted consistent with the express rights
of Delta under the Agreement.
9.7 Certificate of Delta Officers. Delta shall have furnished Bancorp a
certificate, signed by their Chief Executive Officer and Chief Financial
Officer, dated the Closing Date, to the effect, based on his knowledge, that the
conditions described in Sections 9.1, 9.2, 9.3, 9.4, 9.5, and 9.6. of this
Agreement have been fully satisfied.
9.8 Satisfactory Completion of Due Diligence. Bancorp and FFBC shall
have completed their due diligence procedures within the time period set forth
in Section 8.16 of this Agreement, and nothing adverse will have come to its
attention to cause Bancorp to desire to terminate or amend this Agreement.
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9.9 Maintenance of Stockholders' Equity of Delta. As of the Closing
Date, Delta shall have not less than $3.5 million of stockholder's equity,
except for such reductions that may be agreed to by the Parties as detailed at
Schedule 9.9 herein.
ARTICLE X.
CONDITIONS TO THE OBLIGATIONS OF DELTA
The obligations of Delta under this Agreement to cause the transactions
contemplated herein to be consummated shall be subject to the satisfaction or
written wavier by Delta of the following conditions:
10.1 Representations and Warranties. All representations and warranties
of Bancorp and FFBC contained in this Agreement shall be true and correct in all
material respects (or where any statement in a representation or warranty
expressly contains a standard of materiality, such statement shall be true and
correct in all respects taking into consideration the standard of materiality
contained therein) at, or as of, the date of this Agreement and (except to the
extent such representation speaks as of an earlier date) and as of any date
subsequent, until and including the Closing Date (except as otherwise
contemplated or permitted by this Agreement) as though such representations were
made on and as of said date. Any information provided by Bancorp and FFBC
pursuant to Section 8.12 hereof as a supplement to the Bancorp Disclosure
Schedule shall be true and correct in all material respects as of the date such
information is supplied to Delta.
10.2 Performance and Compliance. Bancorp and FFBC shall have performed
or complied in all material respects with all covenants and agreements required
by this Agreement to be performed and satisfied by it on or prior to the Closing
Date.
10.3 Corporate Proceedings. All action required to be taken by, or on
the part of Bancorp to authorize the execution, delivery and performance of this
Agreement and the consummation of the transactions contemplated by this
Agreement shall have been duly and validly taken by Bancorp and Bancorp.
10.4 Certificate of Bancorp Officers. Bancorp and FFBC shall have
furnished to Delta a certificate, signed by its Chief Executive Officer and its
Chief Financial Officer and dated the Closing Date, to the effect, based on
their best knowledge, that the conditions described in Sections 10.1, 10.2 and
10.3 of this Agreement have been satisfied.
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10.5 Opinion of Financial Advisor. Within five days prior to the
mailing of the Proxy Statement, Delta shall have received the opinion of the
Financial Advisor, to the effect that, the consideration to be received in the
Merger by Delta shareholders is fair to Delta's shareholders from a financial
point of view.
ARTICLE XI.
CONDITIONS TO THE OBLIGATIONS OF ALL PARTIES
In addition to the provisions of Articles IX and X hereof, the
obligations of Bancorp and Delta to cause the transactions contemplated herein
to be consummated, shall be subject to the satisfaction or written waiver by
both Bancorp and Delta of the following conditions:
11.1 Governmental Approvals. The parties hereto shall have received all
necessary approvals of the transactions contemplated by the Agreements from
governmental agencies and authorities, including, without limitation, those of
the OTS, the FDIC, and the DOJ, and each of such approvals shall remain in full
force and effect and all statutory waiting periods in connection therewith shall
have expired at the Closing Date and such approvals and the transactions
contemplated thereby shall not have been contested by any federal or state
governmental authority nor by any other third party by formal proceeding.
11.2 Registration Statement. The Registration Statement shall have been
declared effective by the SEC, no stop order suspending the effectiveness of
such Registration Statement shall be in effect and no proceedings for such
purpose shall have been initiated or threatened by or before the SEC. All state
securities and "blue sky" permits or approvals required (in the opinion of
Bancorp) to carry out the transactions contemplated by this Agreement shall have
been received;
11.3 No Injunctions or Restraints. No suit, action or proceeding shall
be pending or overtly threatened before any court or other governmental agency
by the federal or any state government in which it is sought to restrain or
prohibit the consummation of the Merger and no temporary restraining order,
preliminary or permanent injunction or other order issued by any court of
competent jurisdiction or other legal restraint or prohibition preventing the
consummation of the Merger shall be in effect.
11.4 Delta Shareholder Approval. This Agreement shall have been duly
approved by the affirmative vote of at least two-thirds of the outstanding
shareholders of Delta as contemplated by Section 8.1 hereof.
11.5 Corporate Proceedings. The obligations of the parties to this
Agreement required to be performed at or prior to the Closing Date shall have
been duly performed and complied with in all material respects. All action
required to be taken by, or on the part of, the parties to this Agreement to
authorize the execution, delivery and performance of this Agreement, and the
consummation of the transactions contemplated hereby, shall have been duly and
validly taken by the parties hereto.
11.6 Legal Opinions. Bancorp shall have received from legal counsel to
Delta a written opinion pertaining to the transactions herein provided for,
dated the Effective Date, in form and substance acceptable to counsel for
Bancorp.
11.7 Tax Opinion. Unless waived by Bancorp, Bancorp shall have received
an opinion of its counsel to the effect that the transaction will constitute a
tax free reorganization within the meaning of Section 368 of the Internal
Revenue Code.
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11.8 Stock Exchange Listing. The share of Bancorp Common Stock to be
issued in the Merger shall be approved for listing on the Nasdaq National
Market, subject to official notice of issuance, as of the Effective Time.
ARTICLE XII.
TERMINATION
12.1 Reasons for Termination. This Agreement may be terminated and the
Merger abandoned at any time before the Closing Date, whether before or after
the approval or adoption of the Agreements by the shareholders of Delta:
(a) By mutual written consent of the Board of Directors of Bancorp, the
Board of Directors of Delta and the Board of Directors of FFBC;
(b) By written notice from Bancorp and FFBC to Delta if:
(i) any condition set forth in Article IX of this Agreement
shall have become impossible to substantially satisfy at any time or has not
been substantially satisfied or waived in writing; or
(ii) any condition set forth in Article XI of this Agreement
shall have become impossible to substantially satisfy at any time or has not
been substantially satisfied or waived in writing, provided, however, Bancorp
shall not have the right to terminate this Agreement pursuant to this Section
12.1(b)(ii) if any condition imposed by Section 11.1 hereof was not met due to
the failure of Bancorp or FFBC to perform or observe the covenants and
agreements set forth in this Agreement; or
(iii) any warranty or representation as set forth in Article
IV hereof made by Delta shall be discovered to be or to have become untrue or
incorrect in any material respect, or where any statement in a representation or
warranty expressly includes a standard of materiality, such statement shall be
discovered to be or to have become untrue or incorrect in any respect taking
into consideration the standard of materiality contained therein, in either case
where any such breach has not been cured within thirty (30) days following
receipt by Bancorp or FFBC of notice of such discovery; or
(iv) Delta shall have breached one or more provisions of the
Agreement in any material respect considering all such breaches in the
aggregate, where such breach has not been cured within thirty (30) days
following receipt by Bancorp of notice of such breach; or
(v) Bancorp has determined, upon completion of its due
diligence conducted pursuant to Section 8.16 of this Agreement, that the
financial condition and/or operations of Delta are materially different than
previously represented by Delta to Bancorp.
(c) By written notice from Delta to Bancorp, which has been approved by
the Board of Directors of Delta, if
(i) any condition set forth in Article X of this Agreement
shall have become impossible to substantially satisfy at any time or has not
been substantially satisfied or waived in writing; or
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(ii) any condition set forth in Article XI of this Agreement
shall have become impossible to substantially satisfy at any time or has not
been substantially satisfied or waived in writing, provided, however, Delta
shall not have the right to terminate this Agreement pursuant to this Section
12.1(c)(ii) if any condition imposed by Section 11.1 hereof was not met due to
the failure of Delta to perform or observe the covenants and agreements set
forth in this Agreement; or
(iii) any warranty or representation as set forth in Article V
hereof made by Bancorp or FFBC shall be discovered to be or to have become
untrue or incorrect in any material respect, or where any statement in a
representation or warranty expressly includes a standard of materiality, such
statement shall be discovered to be or to have become untrue or incorrect in any
respect taking into consideration the standard of materiality contained therein,
in either case where any such breach has not been cured within thirty (30) days
following receipt by Delta of notice of such discovery; or
(iv) Bancorp shall have breached one or more provisions of the
Agreement in any material respect considering all such breaches in the
aggregate, where such breach has not been cured within thirty (30) days
following receipt by Delta of notice of such breach.
(d) By the Board of Directors of Bancorp if the Board of Directors of
Delta shall not recommend, or shall withdraw or modify in a manner adverse to
Bancorp, its recommendation to the holders of Delta Common Stock to approve the
Agreement.
(e) By the Boards of Directors of Bancorp or Delta at any time after
the Shareholders' Meeting as contemplated in Section 8.1 if the shareholders of
Delta have not approved this Agreement by the requisite affirmative vote,
provided that the circumstances contemplated by Sections 6.6 or 8.1 shall not
have occurred and provided further that the party seeking to effect such
termination shall have complied in all other material respects with and not
committed a willful breach of the terms of, or its obligations under, this
Agreement.
(f) By the Boards of Directors of Bancorp, FFBC or Delta if the Merger
has not been consummated on or before January 1, 1998.
12.2 Effect of Termination. In the event of termination of this
Agreement by Bancorp, FFBC or Delta as provided in Section 12.1, this Agreement
shall forthwith become void, and there shall be no liability or obligation on
the part of Bancorp, FFBC or Delta or their respective officers or directors
except with respect to Sections 7.2, 8.6, 8.13, 8.15, 12.2, and 13.2 hereof.
ARTICLE XIII.
MISCELLANEOUS
13.1 Survival of Representations, Warranties and Agreements. The
representations, warranties, covenants and agreements in this Agreement or in
any instrument delivered pursuant to this Agreement shall survive the Effective
Time for a period of one year, except as otherwise provided herein.
13.2 Expenses. Except as otherwise provided herein, all expenses
incurred by Bancorp, FFBC and Delta in connection with or related to the
authorization, preparation and execution of the Agreement, the solicitation of
shareholder approvals and all other matters related to the closing of the
transactions contemplated thereby, including, without limitation of the
generality of the foregoing, all fees and expenses
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of agents, representatives, counsel and accountants employed by either such
party or its Affiliates, shall be borne solely and entirely by the party that
has incurred the same.
13.3 Waivers: Amendments. At any time prior to the Closing Date, either
Bancorp, by action taken by its Board of Directors, or any committees or
officers thereunto authorized, or Delta, by action taken by their Boards of
Directors, or any committees or officers thereunto authorized, may waive the
performance of any of the obligations of the other or waive compliance by the
other with any of the covenants or conditions contained in the Agreement or
agree to the amendment or modification of the Agreement by an agreement in
writing executed in the same manner as the Agreement; provided, however, that
after the favorable vote by the shareholders of Delta pursuant to Section 8.1 of
this Agreement any such action shall be taken only if, in the opinion of Delta's
Board of Directors, such waiver, amendment or modification will not have a
material adverse effect on the benefits intended under the Agreement for the
shareholders of Delta and will not require resolicitation of any proxies from
such shareholders.
13.4 Assignment: Parties in Interest. The Agreement shall be binding
upon and inure solely to the benefit of the parties hereto and their respective
successors and assigns, but shall not be assigned by the parties hereto, by
operation of law or otherwise, without the prior written consent of the other
parties. Nothing in the Agreement, express or implied, is intended to confer
upon any third party any rights or remedies of any nature whatsoever under or by
reason of the Agreement.
13.5 Captions and Counterparts. The captions in this Agreement are for
convenience only and shall not be considered a part of or affect the
construction or interpretation of any provision of this Agreement. This
Agreement may be executed in several counterparts, each of which shall
constitute one and the same instrument.
13.6 Certain Definitions. For purposes of this Agreement, the
term:
(a) "Affiliate" means a person that directly or indirectly,
through one or more intermediaries, controls, is controlled by, or is under
common control with, another person;
(b) "Material Adverse Effect" shall mean any material adverse
change in or material adverse effect on the business, operations or financial
condition of the parties to this Agreement.
(c) "Delta Reports" shall mean all reports, registrations and
statements, together with any amendments required to be made with respect
thereto, that were and are required to be filed with the OTS, the FDIC, or any
other applicable federal or state securities or banking institution authorities:
and
(d) "to the knowledge of Bancorp" or "to the best knowledge of
Bancorp" shall mean the actual knowledge of any member of the Board of Directors
or of any senior officer of Bancorp or FFBC.
(e) "to the knowledge of Delta" or "to the best knowledge of
Delta" shall mean the actual knowledge of any member of the Board of Directors
or of any senior officer of Delta or the Subsidiary.
13.7 Enforcement of the Agreement. The parties hereto agree that
irreparable damage would occur in the event that any of the provisions of the
Agreement were not performed in accordance with their specific terms or were
otherwise breached. It is accordingly agreed that the parties hereto will be
entitled to an injunction or injunctions to prevent breaches of the 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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13.8 Governing Law. The Agreement shall be construed and interpreted in
accordance with the laws of the State of Colorado, except to the effect that
Federal Law applies, without regard to the conflicts of laws rules.
13.9 Notices. All notices given hereunder shall be in writing and shall
be mailed by first class mail, postage prepaid, or sent by facsimile
transmission or by nationally recognized overnight delivery service, addressed
as follows:
<TABLE>
<CAPTION>
<S> <C> <C>
(a) If to Bancorp to: First Colorado Bancorp, Inc.
215 S. Wadsworth Boulevard
Lakewood, Colorado 80226
Attention: Brian Johnson, Executive Vice President
Facsimile No. (303) 237-2601
with a copy to: Malizia, Spidi, Sloane & Fisch, P.C.
1301 K Street, N.W., Suite 700 East
Washington, DC 20005
Attention: Richard Fisch, Esq.
Facsimile No. (202) 434-4661
(b) If to Delta to: Delta Federal Savings, F.S.B.
145 W. Fourth Street
Delta, Colorado 81416
Attention: David A. Humphries, President
Facsimile No. (970) 874-3021
With A Copy To: Silver, Freedman & Taff, L.L.P.
1100 New York Avenue, Suite 700
Washington, DC 20005
Attention: Martin Meyrowitz, Esq.
Facsimile No. (202) 682-0354
</TABLE>
13.10 Arbitration of Disputes. It is agreed that all disputes, claims
and controversies between the parties to this Agreement, whether individual or
joint in nature, arising from or in connection with this Agreement or otherwise,
including, without limitation, contract, tort and other claims, shall be
arbitrated pursuant to the Rules of the American Arbitration Association. Any
disputes, claims or controversies concerning the lawfulness or reasonableness of
any act, or exercise of any right, concerning this Agreement, including any
claim to rescind, reform, or otherwise modify any provision of this Agreement,
shall also be arbitrated, provided, however, that no arbitrator shall have the
right or power to enjoin or restrain any act of any party. Judgment upon any
award rendered by the arbitrator(s) may be entered in any court having
jurisdiction. The statute of limitations, estoppel, waiver, laches, and similar
doctrines which would otherwise be applicable in an action brought by a party
shall be applicable.
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13.11 Further Assurances. At all times before or after the Closing, the
Parties hereto shall each perform such acts, execute and deliver such
instruments and documents and do all such other things consistent with the terms
of this Agreement as may be reasonably necessary to accomplish the transactions
contemplated in this Agreement or to otherwise carry out the purpose of this
Agreement.
13.12 Exhibits and Disclosure Schedules. All Disclosure Schedules and
Exhibits referred to in and attached to this Agreement are incorporated herein
by such reference as if fully set forth in the text hereof.
13.13 Severability. The Parties expressly agree that it is not the
intention of any party to violate any public policy, law, rule, regulation,
treaty or decision of any government or agency thereof of any state or country.
If any provision of this Agreement is judicially or administratively interpreted
to be in violation of any such provision in any state or country, such
provisions, sentences, words, clauses or combination thereof shall be
inoperative in each such state or country; and the remainder of this Agreement
shall remain binding upon the parties hereto in each such state or country with
this Agreement as a whole unaffected elsewhere.
13.14 Written Agreement to Govern. This Agreement sets forth the entire
understanding and supersedes all prior and contemporaneous agreements between
the Parties relating to the subject matter contained herein, and merges all
prior and contemporaneous discussions between them. No party shall hereto be
bound by any definition, condition, representation, warranty, covenant or
provision other than as expressly stated in or contemplated by this Agreement or
as subsequently set forth in writing and executed by a duly authorized
representative of the party to be bound thereby.
13.15 No Waiver of Rights. Any waivers hereunder must be made in
writing, and failure of any party at any time to require the other parties'
performance of any obligation under this Agreement shall not affect the right
subsequently to require performance of that obligation. Any waiver of any breach
of any provision of this Agreement shall not be construed as a waiver of any
continuing or succeeding breach of such provision or a waiver or modification of
the provision.
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IN WITNESS WHEREOF, the parties hereto have caused
this Agreement to be duly executed as of the date first above written.
ATTEST: FIRST COLORADO BANCORP, INC.
By: /s/Brian L. Johnson By: /s/Malcolm E. Collier, Jr.
-------------------- --------------------------------
Brian L. Johnson Malcolm E. Collier, Jr.
[Corporate Seal]
ATTEST: FIRST FEDERAL BANK OF COLORADO
By: /s/Brian L. Johnson By: /s/Malcolm E. Collier, Jr.
-------------------- --------------------------------
Brian L. Johnson Malcolm E. Collier, Jr.
[Corporate Seal]
ATTEST: DELTA FEDERAL SAVINGS, F.S.B.
By: /s/Nina L. Willis By: /s/David Humphries
-------------------- --------------------------------
Nina L. Willis David Humphries
[Corporate Seal]
A-1
