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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)
February 11, 1998
CENTRAL FINANCIAL ACCEPTANCE CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 95-4574983
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification number)
Commission file number: 001-11815
5480 East Ferguson Drive
Commerce, California 90022
(Address of principal executive offices and zip code)
Registrant's telephone number, including area code:
213) 720-8600
Not Applicable
(Former name or former address, if changed since last report)
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<PAGE>
Item 1. Changes in Control of Registrant
Not Applicable
Item 2. Acquisition or Disposition of Assets
Not Applicable
Item 3 Bankruptcy or Receivership
Not Applicable
Item 4. Changes in Registrant's Certifying Accountant
Not Applicable
Item 5. Other Events
On February 11, 1998, Central Financial Acceptance
Corporation ("CFAC") and Mission Savings and Loan Association, a
Federal Association ("Mission") entered into an Agreement and
Plan of Reorganization (the "Reorganization Agreement"). The
Reorganization Agreement provides for, among other things, the
merger ("Merger") of a subsidiary interim federal savings bank to
be organized by CFAC with and into Mission. Mission will
thereafter be a subsidiary of CFAC. The Merger is subject to,
among other customary conditions, (i) receipt of regulatory
approval (which shall not contain conditions, restrictions or
requirements that CFAC concludes would have a material adverse
effect on the financial condition, results of operations,
business or prospects of CFAC, Mission, any of CFAC's
subsidiaries or any affiliates of CFAC and shall not otherwise be
materially burdensome to CFAC, Mission, any of CFAC's
subsidiaries or any affiliates of CFAC or business plans or
proposed business plans of any such entities), (ii) receipt of
all necessary third party consents and (iii) approval by the
shareholders of Mission. The Reorganization Agreement is
attached hereto as Exhibit 2.1.
Item 6. Resignations of Registrant's Directors
Not Applicable
Item 7. Financial Statements, Pro Forma Financial Information
and Exhibits.
(a) Financial Statements
Not Applicable
(b) Pro Forma Financial Information
Not Applicable
(c) Exhibits
2.1 Agreement and Plan of
Reorganization by and between
Central Financial Acceptance
Corporation and Mission Savings
and Loan Association, a Federal
Association, dated as of February
11, 1998.
Item 8. Change in Fiscal Year
Not Applicable
Item 9. Sales of Equity Securities Pursuant to Regulation S
Not Applicable
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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 hereunto duly authorized.
Central Financial Acceptance Corporation
(Registrant)
Date: February 18, 1998 By /s/ Gary Cypres
-------------------------
Gary Cypres
President and
Chief Executive Officer
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Exhibit Index
2.1 Agreement and Plan of Reorganization
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EXHIBIT 2.1
AGREEMENT AND PLAN OF REORGANIZATION
AGREEMENT AND PLAN OF REORGANIZATION
BY AND BETWEEN
CENTRAL FINANCIAL ACCEPTANCE CORPORATION
AND
MISSION SAVINGS AND LOAN ASSOCIATION
February 11, 1998
<PAGE>
AGREEMENT AND PLAN OF REORGANIZATION
This AGREEMENT AND PLAN OF REORGANIZATION ("Agreement")
is made and entered into as of the 11th day of February, 1998 by
and between Central Financial Acceptance Corporation, a Delaware
corporation ("CFAC"), and Mission Savings and Loan Association, a
Federal Association ("Mission").
R E C I T A L S
WHEREAS, CFAC desires to effect the acquisition of
Mission;
WHEREAS, in connection with the acquisition of Mission,
CFAC shall form a new federally-chartered interim bank
subsidiary, "Interim Mission Savings Bank, FSB" ("Interim") in
accordance with Section 552.2-2 of the Office of Thrift
Supervision's rules and regulations;
WHEREAS, the parties hereto desire to consummate the
business combination through a merger which will be structured so
that Interim will be merged with and into Mission and the Mission
shareholders will receive cash in an amount per share equal to
the Per Share Price in the Merger;
WHEREAS, CFAC and Mission desire to make certain
representations, warranties, covenants and agreements in
connection with the transactions contemplated by this Agreement.
NOW, THEREFORE, on the basis of the foregoing recitals
and in consideration of the mutual representations, warranties,
covenants and agreements contained herein, the parties hereto
agree as follows:
ARTICLE I
DEFINITIONS
Except as otherwise expressly provided for in this
Agreement, or unless the context otherwise requires, as used
throughout this Agreement the following terms shall have the
respective meanings specified below:
1.1 "Adjusted Book Value" means the total
shareholders' equity of Mission as of the Determination Date as
set forth in the Cash Certificate, which shall reflect all
accruals and payments of fees and expenses reflected in
accordance with GAAP incurred or expected to be incurred by
Mission up to and including the Closing Date, other than
Transaction Costs up to a maximum of $150,000; provided, however,
that for purposes of calculating Adjusted Book Value, the total
shareholders' equity of Mission shall be decreased by the sum of:
(a) the amount paid to Mission between the date hereof and the
Closing Date by the holder of Mission Options for the exercise of
such options; (b) the amount of any cash dividends declared but
not paid as of the Determination Date and (c) the amount of the
Unpaid Cash Dividends.
1.2 "Affiliate" of, or a Person "Affiliated" with, a
specific Person is a Person that directly, or indirectly through
one or more intermediaries, controls, or is controlled by, or is
under common control with, the Person specified.
1.3 "Affiliated Group" means, with respect to any
entity, a group of entities required or permitted to file
consolidated, combined, or unitary Tax Returns.
1.4 "Aggregate Purchase Price" means 147% of Mission's
Adjusted Book Value as of the Determination Date, plus (a) the
amount paid to Mission between the date hereof and the Closing
Date by the holder of Mission Options for the exercise of such
options and (b) the amount of the Unpaid Cash Dividends.
1.5 "Agreement of Merger" means the Agreement of Bank
Merger between Interim and Mission to effect the Merger,
substantially in the form of EXHIBIT A attached hereto.
1.6 "Articles of Combination" means the articles
prepared pursuant to Section 552.13 of the OTS Regulations and
upon which the OTS will endorse the Effective Time of the
Merger.
1.7 "Arthur Andersen" shall mean Arthur Andersen, LLP,
accountants to CFAC.
1.8 "Business Day" shall mean any day other than a
Saturday, Sunday or day on which commercial banks in California
are authorized or required to be closed.
1.9 "Cash Certificate" has the meaning set forth in
Section 2.4.
1.10 "Certificates" has the meaning set forth in
Section 2.5(c).
1.11 "CFAC Conflicts and Consents List" has the meaning
set forth in Section 5.2.
1.12 "CFAC Contract Termination List" has the meaning
set forth in Section 6.11.
1.13 "CFAC List" means any list required to be
furnished by CFAC to Mission under this Agreement including but
not limited to the CFAC Conflicts and Consents List.
1.14 "CFAC Stock" means the common stock, $.01 par
value per share, of CFAC.
1.15 "Classified Credits" has the meaning set forth in
Section 4.29.
1.16 "Closing" means the consummation of the Merger on
the Closing Date at the offices of Manatt, Phelps & Phillips,
LLP, 11355 West Olympic Boulevard, Los Angeles, California, or at
such other place as the parties may agree upon in writing.
1.17 "Closing Date" means the first Friday which is at
least 10 Business Days after receipt of all necessary regulatory
approvals and the expiration of all requisite waiting periods, or
such other date as the parties may agree upon, but in no event
shall such date be later than May 31, 1999, unless otherwise
agreed to by the parties in writing hereto.
1.18 "Code" means the Internal Revenue Code of 1986, as
amended.
1.19 "Competing Transaction" has the meaning set forth
in Section 6.1(m).
1.20 "Covered Person" has the meaning set forth in
Section 4.26.
1.21 "Derivatives Contract" has the meaning set forth
in Section 4.31.
1.22 "Determination Date" means the last day of the
month preceding the month in which the Closing occurs, or such
other date as the parties shall mutually agree upon in writing.
1.23 "Effective Time of the Merger" means the date and
time the OTS specifies for the Merger pursuant to the OTS
Regulations in the Articles of Combination.
1.24 "Encumbrance" means any option, pledge, security
interest, lien, charge, encumbrance or restriction (whether on
voting or disposition or otherwise), whether imposed by
agreement, understanding, law or other legally binding
commitment.
1.25 "ERISA" means the Employee Retirement Income
Security Act of 1974, as amended.
1.26 "Escrow Deposit" has the meaning set forth in
Section 7.5.
1.27 "Exchange Act" means the Securities Exchange Act
of 1934, as amended.
1.28 "Exchange Agent" has the meaning set forth in
Section 2.5(a).
1.29 "Expenses" means all reasonable out-of-pocket
expenses (including all fees and expenses of attorneys,
accountants, brokers, finders, investment bankers, experts and
consultants to the party and its Affiliates) incurred by the
party or on its behalf in connection with the consummation of the
transactions contemplated by this Agreement.
1.30 "FDIC" means the Federal Deposit Insurance
Corporation.
1.31 "Financial Statements of Mission" means the
audited financial statements and notes thereto of Mission and the
related opinions thereon included in Mission's financial reports
for the years ended December 31, 1995 and 1996 and (ii) unaudited
consolidated interim financial statements and notes thereto of
Mission included in Mission's quarterly report for the nine
months ended September 30, 1997.
1.32 "Financial Statements of CFAC" means (i) the
audited consolidated financial statements and notes thereto of
CFAC and the related opinions thereon included in CFAC's annual
report for the year ended December 31, 1996; and (ii) unaudited
consolidated interim financial statements and notes thereto of
CFAC included in CFAC's quarterly report for the nine months
ended September 30, 1997.
1.33 "Governmental Entity" means any court or tribunal
in any jurisdiction or any United States federal, state,
municipal, foreign or other administrative agency, authority or
instrumentality, and shall include any quasi-governmental agency,
including, the Federal National Mortgage Association (FNMA), the
Federal Home Loan Mortgage Corporation (Freddie Mac), the United
States Small Business Administration (SBA), and the Department of
Housing and Urban Development (HUD).
1.34 "HOLA" means the Home Owners' Loan Act of 1933, as
amended.
1.35 "Immediate Family" means a natural person's
spouse, parents, in-laws, children and siblings.
1.36 "Interim Bank" means the interim bank to be
chartered by CFAC to facilitate the Merger.
1.37 "Interim Bank Stock" means the common stock of
Interim Bank.
1.38 "Investment Security" means any equity security or
debt security as defined in Statement of Financial Accounting
Standards No. 115.
1.39 "IRS" means the Internal Revenue Service.
1.40 "List" means any one of the CFAC and Mission
Lists.
1.41 "McGladery and Pullen" means McGladery and Pullen,
LLP, accountants to Mission.
1.42 "Merger" means the merger of Interim with and into
Mission pursuant to the Agreement of Merger.
1.43 "Mission" means Mission Savings and Loan
Association, a Federal Association.
1.44 "Mission Brokers and Finders List" has the meaning
set forth in Section 4.16.
1.45 "Mission Conflicts and Consents List" has the
meaning set forth in Section 4.6.
1.46 "Mission Contract List" has the meaning set forth
in Section 4.17.
1.47 "Mission Defalcation Losses List" has the meaning
set forth in Section 4.28.
1.48 "Mission Derivatives List" has the meaning set
forth in Section 4.31.
1.49 "Mission Employee Plan List" has the meaning set
forth in Section 4.20.
1.50 "Mission Filings" has the meaning set forth in
Section 4.5.
1.51 "Mission Indemnification List" has the meaning set
forth in Section 4.26.
1.52 "Mission Insurance List" has the meaning set forth
in Section 4.7.
1.53 "Mission Intellectual Property List" has the
meaning set forth in Section 4.38.
1.54 "Mission Investment Securities List" has the
meaning set forth in Section 4.30.
1.55 "Mission List" means any list required to be
furnished by Mission to CFAC under this Agreement including but
not limited to the Mission Brokers and Finders List, the Mission
Conflicts and Consents List, the Mission Contract List, the
Mission Defalcation Losses List, the Mission Derivatives List,
the Mission Employee Plan List, the Mission Indemnification List,
the Mission Insurance List, the Mission Intellectual Property
List, the Mission Investment Securities List, the Mission
Litigation List, the Mission Loan List, the Mission Material
Change List, the Mission Offices List, the Mission Defalcation
Losses List, the Mission Personal Property List, the Mission
Pledgee List, the Mission Real Property List, the Mission
Regulatory Actions List, the Mission Tax List and the Mission
Undisclosed Liabilities List.
1.56 "Mission Litigation List" has the meaning set
forth in Section 4.10.
1.57 "Mission Loan List" has the meaning set forth in
Section 4.29.
1.58 "Mission Material Change List" has the meaning set
forth in Section 4.18.
1.59 "Mission Offices List" has the meaning set forth
in Section 4.27.
1.60 "Mission Option Plan" means the Mission 1990
Incentive Stock Option Plan.
1.61 "Mission Options" shall mean options outstanding
to purchase shares of Mission Stock pursuant to the Mission
Option Plan.
1.62 "Mission Personal Property List" has the meaning
set forth in Section 4.8.
1.63 "Mission Pledgee List" has the meaning set forth
in Section 4.3.
1.64 "Mission Property" has the meaning set forth in
Section 4.12(b).
1.65 "Mission Real Property List" has the meaning set
forth in Section 4.9.
1.66 "Mission Regulatory Actions List" has the meaning
set forth in Section 4.23(b).
1.67 "Mission Stock" means the common stock, $8 stated
value per share, of Mission.
1.68 "Mission Tax List" has the meaning set forth in
Section 4.11.
1.69 "Mission Undisclosed Liabilities List" has the
meaning set forth in Section 4.4.
1.70 "OTS" means the Office of Thrift Supervision.
1.71 "OTS Regulations" means the rules and regulations
of the OTS under HOLA.
1.72 "Perfected Dissenting Shares" means shares of
Mission Stock the holders of which have not effectively withdrawn
or lost their dissenters rights under Section 552.14.
1.73 "Per Share Price" means the amount obtained by
dividing (i) the Aggregate Purchase Price by (ii) the number of
shares of Mission Stock outstanding on the Closing Date.
1.74 "Person" means any natural person, corporation,
trust, association, unincorporated body, partnership, joint
venture, other entity, government or governmental department or
agency.
1.75 "Plans" has the meaning set forth in Section 4.20.
1.76 "Proxy Statement" means the proxy materials used
by Mission to solicit shareholder approval for the Merger.
1.77 "Related Group of Persons" means Affiliates,
members of an Immediate Family or Persons the obligations of whom
would be attributed to another Person pursuant to Rule 144
promulgated by the SEC under the Exchange Act.
1.78 "SAIF" means Savings Association Insurance Fund.
1.79 "SEC" means the Securities and Exchange
Commission.
1.80 "Scheduled Contracts" has the meaning set forth in
Section 4.17.
1.81 "Section 552.14" means Section 552.14 of the rules
and regulations promulgated by the OTS.
1.82 "Surviving Bank" means the federal savings bank
surviving the Merger, which shall be under the charter of
Mission.
1.83 "Surviving Bank Stock" means the common stock of
the Surviving Bank.
1.84 "Taxes" means (i) all federal, state, local or
foreign taxes, charges, fees, imposts, levies or other
assessments, including, without limitation, all net income, gross
receipts, capital, sales, use, ad valorem, value added, transfer,
franchise, profits, inventory, capital stock, license,
withholding, payroll, employment, social security, unemployment,
excise, severance, stamp, occupation, property, corporation and
estimated taxes, custom duties, fees, assessments and charges of
any kind whatsoever; (ii) all interest, penalties, fines,
additions to tax or additional amounts imposed by any taxing
authority in connection with any item described in clause (i);
and (iii) any transferred liability (i.e., any liability acquired
through merger, consolidation, acquisition or comparable
transaction) in respect of any items described in clauses (i)
and/or (ii).
1.85 "Tax Return" means all returns, declarations,
reports, estimates, information returns and statements required
to be filed in respect of any Taxes.
1.86 "Tax Sharing Agreement" means a legally binding
agreement (whether or not in writing) pursuant to which tax
losses of one entity are made available to another entity of the
Affiliated Group or Affiliates for purpose of Taxes.
1.87 "Transaction Costs" means all expenses, costs and
fees paid or incurred, or expected to be incurred, by Mission
(but excluding administrative overhead) in connection with the
transactions described herein, including, without limitation (a)
legal, accounting, investment, advisory, investment banker,
broker, finder and other professional fees and costs; (b)
termination fees associated with the termination of any contracts
in connection with the Merger and (c) any bonus or severance
payments to employees of Mission.
1.88 "Unpaid Cash Dividends" shall mean that amount to
be declared and paid on the outstanding shares of Mission Stock
between the date hereof and the Closing Date pursuant to Section
6.2(m) herein, but which Mission failed to declare and pay.
ARTICLE II
THE MERGER AND RELATED MATTERS
2.1 THE MERGER. The parties hereto agree that each
will use their best efforts to perfect the organization of
Interim Bank in accordance with the rules and regulations of the
OTS prior to the Closing Date. The directors and officers of
Interim Bank, and the Charter and Bylaws of Interim Bank, shall
be determined by CFAC. At the Effective Time of the Merger, the
following transactions will occur simultaneously, pursuant to the
terms of the Agreement of Merger:
(a) MERGER OF INTERIM BANK WITH AND INTO
MISSION. Interim Bank shall be merged with and into Mission, and the
Surviving Bank shall be under the charter of Mission.
(b) EFFECT ON MISSION STOCK. Subject to
Section 2.3, each share of Mission Stock issued and outstanding
immediately prior to the Effective Time of the Merger shall, on
and at the Effective Time of the Merger, pursuant to the
Agreement of Merger and without any further action on the part of
Mission or the holders of Mission Stock, be automatically
canceled and cease to be an issued and outstanding share of
Mission Stock and be converted into the right to receive the Per
Share Price.
(c) EFFECT ON INTERIM BANK STOCK. Each share of
Interim Bank Stock issued and outstanding immediately prior to
the Effective Time of the Merger shall, on and at the Effective
Time of the Merger, pursuant to the Agreement of Merger, and
without any further action on the part of Interim Bank or the
holder of the Interim Bank Stock be converted into, and shall for
all purposes be deemed to represent, one share of Surviving Bank
Stock.
2.2 EFFECT OF THE MERGER. At the Effective Time of
the Merger, the corporate existence of Interim Bank and Mission
shall be merged into and continued in the Surviving Bank and the
Surviving Bank shall be deemed the same corporation as each bank
participating in the Merger. All rights, franchises, and
interests of Interim Bank and Mission in and to every type of
property (real, personal and mixed) and choses in action shall be
transferred to and vested in the Surviving Bank by virtue of the
Merger without any deed or other transfer and the Surviving Bank
shall hold and enjoy all rights of property, franchises and
interests, in the same manner and to the same extent as such
rights, franchises and interests were held or enjoyed by any one
of the merging banks at the Effective Time of the Merger.
2.3 DISSENTING SHAREHOLDERS. Any Perfected Dissenting
Shares shall not be converted into the right to receive the Per
Share Price, but the holders thereof shall be entitled to such
rights as are granted them by Section 552.14. Each holder of
Perfected Dissenting Shares who is entitled to payment for his
shares of Mission Stock under Section 552.14 shall receive such
payment in an amount determined pursuant to Section 552.14.
2.4 COMPUTATION AND CONFIRMATION OF CERTAIN ITEMS.
The Aggregate Purchase Price and Per Share Price shall be
calculated by Mission no later than five Business Days prior to
the Closing Date and shall be set forth in a certificate (the
"Cash Certificate") executed by the Chief Financial Officer of
Mission and furnished to CFAC within four Business Days prior to
the Closing Date showing the manner of calculation in reasonable
detail. McGladery & Pullen will perform certain agreed upon
procedures relating to the calculation of the Aggregate Purchase
Price and Per Share Price, which procedures will be agreed upon
by Mission and CFAC. For purposes of this Section, the parties
hereby acknowledge that McGladery & Pullen will not perform an
audit, examination or review of this information and, in any
event, that the maximum fee for such services shall not exceed
$5,000.
The Cash Certificate shall be reviewed and approved by
CFAC no later than two Business Days following its delivery to
CFAC. In the event of disagreement as to the information
contained in the Cash Certificate, the parties shall negotiate in
good faith to resolve any such disputed matters, and upon the
failure to resolve any such matters, such dispute shall be
resolved in accordance with the dispute resolution procedures set
forth in Section 14.12 hereof.
2.5 PAYMENT PROCEDURES.
(a) PAYMENT OF AGGREGATE PURCHASE PRICE.
Prior to the Effective Time of the Merger, CFAC will deposit an amount
of cash equal to the Aggregate Purchase Price in an escrow
account with a bank or trust company selected by CFAC and
reasonably acceptable to Mission (the "Exchange Agent") for the
benefit of the holders of Mission Stock, for exchange in
accordance with (i) this Agreement, and (ii) an agreement between
CFAC and the Exchange Agent in form and substance reasonably
acceptable to Mission. Delivery to such holders of the cash to
which they are entitled will subsequently be made by CFAC against
delivery of share certificates formerly evidencing Mission Stock
(duly executed and in proper form for transfer) to CFAC in
accordance with this Section 2.4 and an agreement to be entered
into between CFAC and the Exchange Agent.
(b) NO FURTHER OWNERSHIP RIGHTS IN MISSION
STOCK. All cash issued upon the surrender for exchange of shares of
Mission Stock in accordance with the terms hereof shall be deemed
to have been issued in full satisfaction of all rights pertaining
to such shares of Mission Stock.
(c) EXCHANGE PROCEDURES. CFAC shall direct the
Exchange Agent to mail, promptly after the Effective Time of the
Merger, to each holder of record of a certificate or certificates
which immediately prior to the Effective Time of the Merger
represented outstanding shares of Mission Stock (the
"Certificates") whose shares were converted into the right to
receive cash pursuant to Section 2.1 hereof, (i) a letter of
transmittal (which shall specify that delivery shall be effected,
and risk of loss and title to the Certificates shall pass, only
upon delivery of the Certificates to the Exchange Agent and shall
be in such form and have such other provisions as CFAC and
Mission may reasonably specify), and (ii) instructions for use in
effecting the surrender of the Certificates in exchange for cash.
Upon surrender of a Certificate for cancellation to the Exchange
Agent or to such other agent or agents as may be appointed by
CFAC, together with such letter of transmittal, duly executed,
the holder of such Certificate shall be entitled to receive in
exchange therefor that amount of cash which such holder has the
right to receive pursuant to the provisions of Sections 2.1 and
2.3 hereof, and the Certificate so surrendered shall forthwith be
canceled. Until surrendered as contemplated by this Section
2.5, each Certificate shall be deemed at any time after the
Effective Time of the Merger to represent only the right to
receive upon such surrender such cash as contemplated by this
Section 2.5. Notwithstanding anything to the contrary set forth
herein, if any holder of shares of Mission Stock should be unable
to surrender the Certificates because they have been lost or
destroyed, such holder may deliver in lieu thereof such bond in
form and substance and with surety reasonably satisfactory to
CFAC and shall be entitled to receive the cash in accordance with
Section 2.1.
(d) NO FURTHER OWNERSHIP RIGHTS IN MISSION
STOCK. All cash issued upon the surrender for exchange of shares of
Mission Stock in accordance with the terms hereof shall be deemed
to have been issued in full satisfaction of all rights pertaining
to such shares of Mission Stock, and there shall be no further
registration of transfers on the stock transfer books of the
Surviving Bank of the shares of Mission Stock which were
outstanding immediately prior to the Effective Time of the
Merger. If, after the Effective Time of the Merger, Certificates
are presented to the Surviving Bank for any reason, they shall be
canceled and exchanged as provided in this Agreement.
(e) TERMINATION OF EXCHANGE FUND. Any portion
of the Exchange Fund which remains undistributed to the shareholders
of Mission following the passage of six months after the
Effective Time of the Merger shall be delivered to CFAC, upon
demand, and any shareholders of Mission who have not theretofore
complied with this Section 2.4 shall thereafter look only to CFAC
for payment of their claim for cash.
(f) NO LIABILITY. Neither Mission or CFAC
shall be liable to any holder of shares of Mission Stock for cash from
the Exchange Fund delivered to a public official pursuant to any
applicable abandoned property, escheat or similar law.
2.6 DIRECTORS AND OFFICERS OF SURVIVING BANK. At the
Effective Time of the Merger, the directors of Interim Bank shall
be the directors of the Surviving Bank until their successors
have been chosen and qualified in accordance with the charter and
Bylaws of Mission. The officers of Interim Bank at the Effective
Time of the Merger shall be the officers of the Surviving Bank
until they resign or are replaced or terminated by the Board of
Directors of the Surviving Bank or otherwise in accordance with
the Surviving Bank's charter or Bylaws, except that the President
and Chief Executive Officer of Mission shall continue to be the
President of the Surviving Bank pursuant to the arrangement
identified in Section 11.15 herein, and except that CFAC may
identify other persons to serve as officers or directors of the
Surviving Bank who are not then serving as officers or directors
of Interim Bank.
2.7 NAME OF SURVIVING BANK. The name of the Surviving
Bank shall be "Mission Savings and Loan Association, a Federal
Association."
2.8 CANCELLATION OF MISSION OPTIONS. Immediately
prior to the Effective Time of the Merger, Mission shall pay to
each holder of a Mission Option canceled pursuant to a written
cancellation agreement, an aggregate amount (subject to any
applicable withholding tax) equal to (a) the number of shares of
Mission Stock covered by such Mission Option multiplied by (b)
the difference between the Per Share Price and the exercise price
of such Mission Option.
ARTICLE III
THE CLOSING
3.1 CLOSING DATE. The Closing shall take place on the
Closing Date.
3.2 EXECUTION OF AGREEMENT OF MERGER. Prior to the
Closing Date, and as soon as practicable after approval by the
OTS to organize Interim Bank, the Agreement of Merger (as
amended, if necessary, to conform to any requirements of any
Governmental Entity having authority over the Merger) shall be
executed by Mission and Interim. On the Closing Date, the Merger
shall become effective in accordance with the approval granted by
the OTS.
3.3 DOCUMENTS TO BE DELIVERED. At the Closing, the
parties hereto shall deliver, or cause to be delivered, such
documents or certificates as may be necessary, in the reasonable
opinion of counsel for any of the parties, to effectuate the
transactions contemplated by this Agreement. From and after the
Effective Time of the Merger, each of the parties hereto hereby
covenants and agrees, without the necessity of any further
consideration whatsoever, to execute, acknowledge and deliver any
and all other documents and instruments and take any and all such
other action as may be reasonably necessary or desirable to
effectuate the transactions set forth herein or contemplated
hereby, and the officers and directors of the parties hereto
shall execute and deliver, or cause to be executed and delivered,
all such documents as may reasonably be required to effectuate
such transactions.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
OF MISSION
Mission represents and warrants to CFAC as follows:
4.1 INCORPORATION, STANDING AND POWER. Mission is a
federal savings bank duly organized, validly existing and in good
standing under the laws of the United States and is authorized by
the OTS to conduct a federal savings bank business. The Federal
Stock Charter and Bylaws of Mission, all as amended to date, are
in full force and effect. Mission's deposits are insured by the
FDIC in the manner and to the fullest extent provided by law.
Mission has all requisite corporate power and authority to own,
lease and operate its properties and assets and to carry on its
business as presently conducted. Neither the scope of the
business of Mission nor the location of any of its properties
requires that Mission be licensed to do business in any
jurisdiction other than the State of California where the failure
to be so licensed would, individually or in the aggregate, have a
material adverse effect on the financial condition, results of
operation or business of Mission.
4.2 CAPITALIZATION. As of the date of this Agreement,
the authorized capital stock of Mission consists of 625,000
shares of Mission Stock, of which 304,650 shares are outstanding,
and no shares of preferred stock. All of the shares of Mission
Stock are duly authorized, validly issued, fully paid and
nonassessable. There are no outstanding options, warrants or
other rights in or with respect to the unissued shares of Mission
Stock nor any securities convertible into such stock, and Mission
is not obligated to issue any additional shares of its common
stock or any options, warrants or other rights in or with respect
to the unissued shares of such stock or any other securities
convertible into such stock, except for the 15,750 outstanding
options which have been issued pursuant to the Mission 1990
Incentive Stock Option Plan to purchase shares of Mission Stock.
To the best of Mission's knowledge, there are no voting trusts,
stockholder agreements, proxies or other agreements or
understandings in effect with respect to the voting or transfer
of any of the shares of Mission, except for that certain Buy-Sell
Agreement, dated as of February 19, 1985, a copy of which has
been furnished to CFAC.
4.3 SUBSIDIARIES. Mission does not own, directly or
indirectly (except as pledgee pursuant to loans or upon
acquisition in satisfaction of debt previously contracted, which
are disclosed on a List provided by Mission to CFAC (the "Mission
Pledgee List")), the outstanding stock or equity or other voting
interest in any corporation, partnership, joint venture or other
entity, except for the shares of capital stock, par value $100
per share, of the Federal Home Loan Bank of San Francisco held by
Mission as of the date hereof.
4.4 FINANCIAL STATEMENTS AND UNDISCLOSED LIABILITIES.
Mission has previously furnished to CFAC a copy of the Financial
Statements of Mission. The Financial Statements of Mission:
(a)present fairly the financial condition of Mission as of the
respective dates indicated and its results of operations and
changes in cash flows, for the respective periods then ended,
subject, in the case of the unaudited interim financial
statements, to normal recurring adjustments, and, where
applicable, the absence of footnotes; (b)have been prepared in
accordance with generally accepted accounting principles and/or
applicable regulatory accounting principles or banking
regulations consistently applied (except as otherwise indicated
therein); and (c) are based upon the books and records of
Mission.
Without limiting the generality of the foregoing,
Mission does not have any liabilities or obligations, either
accrued or contingent, that are material to Mission and that have
not been: (a)reflected or disclosed in the Financial Statements
of Mission; or (b)disclosed in a list furnished by Mission to
CFAC (the "Mission Undisclosed Liabilities List") or on any other
Mission List. Mission does not know of any reasonable basis for
the assertion against Mission of any liability, obligation or
claim (including, without limitation, that of any regulatory
authority) that is likely to result in or cause a material
adverse change in the business, financial condition, results of
operations or prospects of Mission that is not accurately
reflected in the Financial Statements of Mission or otherwise
disclosed in this Agreement.
4.5 REPORTS AND FILINGS. Mission has filed all
reports, returns, registrations and statements (such reports and
filings referred to as "Mission Filings"), together with any
amendments required to be made with respect thereto, that were
required to be filed by it with (a)the OTS, (b)the FDIC and
(c)any other applicable Governmental Entity, including taxing
authorities, except where the failure to file such reports,
returns, registrations or statements has not had and is not
reasonably expected to have a material adverse effect on the
business, financial condition, results of operations or prospects
of Mission. No material adverse administrative actions have been
taken or orders issued in connection with such Mission Filings.
As of their respective dates, each of such Mission Filings
complied in all material respects with all laws and regulations
enforced or promulgated by the Governmental Entity with which it
was filed (or was amended so as to be in compliance promptly
following discovery of any such noncompliance). Any financial
statement contained in any of such Mission Filings fairly
presented the financial position of Mission and was prepared in
accordance with generally accepted accounting principles and/or
applicable regulatory accounting principles or banking
regulations consistently applied, except as stated therein,
during the periods involved. Mission has furnished CFAC with
true and correct copies of all Mission Filings filed with the
OTS, FDIC and any other securities or banking authority since
January 1, 1995.
4.6 AUTHORITY OF MISSION. The execution and delivery
by Mission of this Agreement, subject to the requisite approval
of the shareholders of Mission, and the consummation of the
transactions contemplated hereby, have been duly and validly
authorized by all necessary corporate action on the part of
Mission, and this Agreement is, upon due execution and delivery
by the respective parties thereto, a valid and binding obligation
of Mission, as the case may be, enforceable in accordance with
its terms, except as the enforceability thereof may be limited by
bankruptcy, liquidation, receivership, conservatorship,
fraudulent conveyance, insolvency, moratorium or other similar
laws affecting the rights of creditors generally and by general
equitable principles and by Section 8(b)(6)(D) of the Federal
Deposit Insurance Act, 12 U.S.C. Section 1818(b)(6)(D). Except
as set forth in a list furnished by Mission to CFAC (the "Mission
Conflicts and Consents List"), neither the execution and delivery
by Mission of this Agreement, the consummation of the Merger or
the transactions contemplated herein, nor compliance by Mission
with any of the provisions hereof, will: (a)conflict with or
result in a breach of any provision of the Federal Stock Charter,
as amended, or Bylaws, as amended, of Mission; (b)constitute a
breach of or result in a default (or give rise to any rights of
termination, cancellation or acceleration, or any right to
acquire any securities or assets) under any of the terms,
conditions or provisions of any material note, bond, mortgage,
indenture, franchise, license, permit, agreement or other
instrument or obligation to which Mission or by which Mission or
any of their respective properties or assets is bound; (c)result
in the creation or imposition of any Encumbrance on any of the
material properties or assets of Mission; (d)violate any material
order, writ, injunction, decree, statute, rule or regulation
applicable to Mission or any of its properties or assets. Except
as set forth in the Mission Conflicts and Consents List, no
consent of, approval of, notice to or filing with any
Governmental Entity, and no consent of, approval of or notice to
any other Person, is required in connection with the execution
and delivery by Mission of this Agreement or the transactions
contemplated hereby, except (i) the approval of this Agreement
and the transactions contemplated hereby by the shareholders of
Mission; (ii)such approvals as may be required by the OTS and the
FDIC; and (iii)the filing of the Articles of Combination with the
OTS.
4.7 INSURANCE. Mission has furnished to CFAC a list
(the "Mission Insurance List") setting forth all policies of
insurance and bonds in effect as of the date hereof with respect
to the business and assets of Mission. Except as set forth in
the Mission Insurance List: (a) no insurer under any policy or
bond maintained by Mission has canceled or indicated an intention
to cancel or not to renew any such policy or bond or generally
disclaimed liability thereunder and all such policies and bonds
are in full force and effect; and (b) Mission is not in default
under any such policy or bond and all material claims thereunder
have been filed in a timely fashion. The Mission Insurance List
includes a list of all policies of insurance carried and owned by
Mission, showing the name of the insurance company, the nature of
the coverage, the policy limit, the annual premiums and the
expiration dates. There has been furnished to CFAC a copy of
each such policy of insurance.
4.8 TITLE TO PERSONAL PROPERTY ASSETS. Mission has
good and marketable title to all of its material, non-real
estate, properties and assets, owned or stated to be owned by
Mission, free and clear of all Encumbrances except: (a) as set
forth in the Financial Statements of Mission; (b) for
Encumbrances for current Taxes not yet due; (c) for Encumbrances
incurred in the ordinary course of business; (d)for Encumbrances
that are not substantial in character, amount or extent and that
do not materially detract from the value, or interfere with
present use, of the property subject thereto or affected thereby,
or otherwise materially impair the conduct of business of
Mission; or (e) as set forth in a list furnished by Mission to
CFAC (the "Mission Personal Property List.")
4.9 REAL ESTATE. Mission has furnished CFAC a list
(the "Mission Real Property List") of real property, including
real estate owned (REO), leaseholds and all other interests in
real property (other than security interests), owned by Mission.
Except as set forth in the Mission Real Property List, Mission
has duly recorded or caused to be recorded, in the appropriate
county, all recordable interests in such real property. Mission
has good and marketable title to the real property, and valid
leasehold interests in the leaseholds, described in the Mission
Real Property List, free and clear of all Encumbrances, except:
(a)for rights of lessors, co-lessees or sublessees in such
matters that are reflected in the lease; (b)for current Taxes not
yet due; (c)for such Encumbrances, if any, as do not materially
detract from the value of or materially interfere with the
present use of such property; and (d)as described in the Mission
Real Property List. Mission has furnished CFAC with true and
correct copies of all leases included in the Mission Real
Property List, all title insurance policies and all documents
evidencing recordation of all recordable interests in real
property included in the Mission Real Property List.
4.10 LITIGATION. Except as set forth in the Mission
Filings or in a list furnished by Mission to CFAC (the "Mission
Litigation List"), there is no private or governmental suit,
claim, action or proceeding pending, nor to Mission's knowledge
threatened, against Mission or against any of its directors,
officers or employees relating to the performance of their duties
in such capacities or against or affecting any properties of
Mission which, if adversely determined, would have a material
adverse effect upon the business, financial condition, results of
operations or prospects of Mission or the transactions
contemplated hereby or which may involve a judgment against
Mission in excess of $10,000. Also, except as disclosed in the
Mission Filings or in the Mission Litigation List, there are no
material judgments, decrees, stipulations or orders against
Mission, enjoining it or, to the knowledge of Mission, any of its
directors, officers or employees in respect of, or the effect of
which is to prohibit, any business practice or the acquisition of
any property or the conduct of business in any area as it relates
to the business of Mission.
4.11 TAXES.
(a) Except as set forth in a list furnished by
Mission to CFAC (the "Mission Tax List"), (i) all material Tax
Returns required to be filed by or on behalf of Mission or the
Affiliated Group(s) of which it is or was a member, have been
duly and timely filed with the appropriate taxing authorities in
all jurisdictions in which such Tax Returns are required to be
filed (after giving effect to any valid extensions of time in
which to make such filings), and all such Tax Returns were true,
complete and correct in all material respects; (ii) all Taxes
payable by or on behalf of Mission, either directly, as part of
an Affiliated Group Tax Return, or otherwise, have been fully and
timely paid, except to the extent adequately reserved therefor in
accordance with generally accepted accounting principles and/or
applicable regulatory accounting principles or banking
regulations consistently applied on the Financial Statements of
Mission, and adequate reserves or accruals for Taxes have been
provided in the Financial Statements of Mission with respect to
any period through the date thereof for which Tax Returns have
not yet been filed or for which Taxes are not yet due and owing;
and (iii) no agreement, waiver or other document or arrangement
extending or having the effect of extending the period for
assessment or collection of Taxes (including, but not limited to,
any applicable statute of limitation) has been executed or filed
with any taxing authority by or on behalf of Mission, or any
Affiliated Group(s) of which it is or was a member.
(b) Mission has complied in all material
respects with all applicable laws, rules and regulations relating to the
payment and withholding of Taxes and has duly and timely withheld
from employee salaries, wages and other compensation and has paid
over to the appropriate taxing authorities all amounts required
to be so withheld and paid over for all periods under all
applicable laws.
(c) CFAC has been furnished complete copies of
(i) all material income or franchise Tax Returns of Mission
relating to the taxable periods since January 1, 1993 and (ii)
any audit report issued within the last three years relating to
any material Taxes due from or with respect to Mission, with
respect to its income, assets or operations.
(d) Except as set forth in the Mission Tax List,
no claim has been made by a taxing authority in a jurisdiction
where Mission does not file an income or franchise Tax Return
such that Mission is or may be subject to taxation by that
jurisdiction.
(e) Except as set forth in the Mission Tax List:
(i) all deficiencies asserted or assessments made as a result of
any examinations by any taxing authority of the Tax Returns of or
covering or including Mission have been fully paid, and there are
no other audits or investigations by any taxing authority in
progress, nor has Mission received any notice from any taxing
authority that it intends to conduct such an audit or
investigation; (ii) no requests for a ruling or a determination
letter are pending with any taxing authority; and (iii) no issue
has been raised in writing by any taxing authority in any current
or prior examination which, by application of the same or similar
principles, could reasonably be expected to result in a proposed
deficiency against Mission for any subsequent taxable period that
could be material.
(f) Except as set forth in the Mission Tax
List, neither Mission nor any other Person on behalf of Mission has (i)
filed a consent pursuant to Section 341(f) of the Code or agreed
to have Section 341(f)(2) of the Code apply to any disposition of
a subsection (f) asset (as such term is defined in Section
341(f)(4) of the Code) owned by Mission, (ii) agreed to or is
required to make any adjustments pursuant to Section 481(a) of
the Code or any similar provision of state, local or foreign law
by reason of a change in accounting method initiated by Mission
or has any knowledge that the Internal Revenue Service has
proposed any such adjustment or change in accounting method, or
has any application pending with any taxing authority requesting
permission for any changes in accounting methods that relate to
the business or operations of Mission, or (iii) executed or
entered into a closing agreement pursuant to Section 7121 of the
Code or any predecessor provision thereof or any similar
provision of state, local or foreign law with respect to Mission.
(g) Except as set forth in the Mission Tax
List, no property owned by Mission is (i) property required to be
treated as being owned by another Person pursuant to provisions
of Section 168(f)(8) of the Internal Revenue Code of 1954, as
amended and in effect immediately prior to the enactment of the
Tax Reform Act of 1986, (ii) constitutes "tax exempt use
property" within the meaning of Section 168(h)(1) of the Code or
(iii) is "tax-exempt bond financed property" within the meaning
of Section 168(g) of the Code.
(h) Mission is not a party to any Tax Sharing
Agreement or similar agreement or arrangement (whether written or
not written) pursuant to which it will have any obligation to
make any payments after the Closing.
(i) There is no contract, agreement, plan or
arrangement covering any Person that, individually or
collectively, could give rise to the payment of any amount that
would not be deductible by Mission or its Affiliates by reason of
Section 280G of the Code, or would constitute compensation in
excess of the limitation set forth in Section 162(m) of the Code.
(j) There are no liens as a result of any
unpaid Taxes upon any of the assets of Mission.
(k) Except as set forth in the Mission Tax
List, Mission has no elections in effect for federal income tax
purposes under Sections 108, 168, 338, 441, 472, 1017, 1033, or
4977 of the Code.
(l) Except as set forth in the Mission Tax
list, Mission does not have any net operating loss carryovers.
4.12 COMPLIANCE WITH LAWS AND REGULATIONS.
(a) To Mission's knowledge, Mission is not in
default under or in breach of any provision of its Federal Stock
Charter, or Bylaws, as amended, or law, ordinance, rule or
regulation promulgated by any Governmental Entity, where such
default or breach would have a material adverse effect on the
business, financial condition, results of operations or prospects
of Mission.
(b) Except as set forth on a list furnished by
Mission to CFAC (the "Mission Environmental Compliance List"),
and without limiting Section 4.12(a), to Mission's knowledge:
(i)Mission is in compliance with all Environmental Regulations;
(ii)there are no Tanks on or about Mission Property; (iii)there
are no Hazardous Materials on, below or above the surface of, or
migrating from Mission Property; (iv)Mission has no loans
outstanding secured by real property that are not in compliance
with Environmental Regulations or which has a Tank on it or upon
which there are Hazardous Materials on or migrating from; and
(v)without limiting Section 4.10 or the foregoing representations
and warranties contained in clauses (i) through (iv), as of the
date of this Agreement, there is no claim, action, suit, or
proceeding or notice thereof before any Governmental Entity
pending against Mission or concerning property securing Mission
loans and there is no outstanding judgment, order, writ,
injunction, decree, or award against or affecting Mission
Property or property securing Mission loans, relating to the
foregoing representations (i) - (iv). For purposes of this
Section 4.12(b), the term "Environmental Regulations" shall mean
all applicable statutes, regulations, rules, ordinances, codes,
licenses, permits, orders, approvals, plans, authorizations,
concessions, franchises, and similar items, of all Governmental
Entities and all applicable judicial, administrative, and
regulatory decrees, judgments, and orders relating to the
protection of human health or the environment, including, without
limitation: all requirements, including, but not limited to
those pertaining to reporting, licensing, permitting,
investigation, and remediation of emissions, discharges,
releases, or threatened releases of Hazardous Materials, chemical
substances, pollutants, contaminants, or hazardous or toxic
substances, materials or wastes whether solid, liquid, or gaseous
in nature, into the air, surface water, groundwater, or land, or
relating to the manufacture, processing, distribution, use,
treatment, storage, disposal, transport, or handling of chemical
substances, pollutants, contaminants, or hazardous or toxic
substances, materials, or wastes, whether solid, liquid, or
gaseous in nature and all requirements pertaining to the
protection of the health and safety of employees or the public.
"Mission Property" shall mean real estate owned, leased, or
otherwise used by Mission or in which Mission has an investment
(by sale and lease-back or otherwise) in each case, which real
estate is owned, leased, or otherwise used on the date of this
Agreement, including, without limitation, properties under
foreclosure and properties held by Mission in its capacity as a
trustee or otherwise. "Tank" shall mean treatment or storage
tanks, sumps, gas or oil wells and associated piping
transportation devices. "Hazardous Materials" shall mean any
substance the presence of which requires investigation or
remediation under any federal, state or local statute,
regulation, ordinance, order, action, policy or common law; or
which is or becomes defined as a hazardous waste, hazardous
substance, hazardous material, used oil, pollutant or contaminant
under any federal, state or local statute, regulation, rule or
ordinance or amendments thereto including, without limitation,
the Comprehensive Environmental Response, Compensation and
Liability Act (42 U.S.C. Section 9601, et seq.); the Resource
Conservation and Recovery Act (42 U.S.C. Section 6901, et seq.);
the Clean Air Act, as amended (42 U.S.C. Section 7401, et seq.);
the Federal Water Pollution Control Act, as amended (33 U.S.C.
Section 1251, et seq.); the Toxic Substances Control Act, as
amended (15 U.S.C. Section 9601, et seq.); the Occupational
Safety and Health Act, as amended (29 U.S.C. Section 651 et
seq.); the Emergency Planning and Community Right-to-Know Act of
1986 (42 U.S.C. Section 11001, et seq.); the Mine Safety and
Health Act of 1977, as amended (30 U.S.C. Section 801, et seq.);
the Safe Drinking Water Act (42 U.S.C. Section 300f, et seq.);
and all comparable state and local laws, including without
limitation, the Carpenter-Presley-Tanner Hazardous Substance
Account Act (State Superfund), the Porter-Cologne Water Quality
Control Act, Section 25140, 25501(j) and (k), 25501.1,25281 and
25250.1 of the California Health and Safety Code and/or Article I
of Title 22 of the California Code of Regulations, Division 4,
Chapter 30; laws of other jurisdictions or orders and
regulations; or the presence of which causes or threatens to
cause a nuisance, trespass or other common law tort upon real
property or adjacent properties or poses or threatens to pose a
hazard to the health or safety of persons or without limitation,
which contains gasoline, diesel fuel or other petroleum
hydrocarbons; polychlorinated biphenyls (PCBs), asbestos or urea
formaldehyde foam insulation.
(c) Mission has provided to CFAC phase I
environmental assessments with respect to each interest in real
property set forth on the Mission Real Property List as to which
such a phase I environmental investigation has been prepared by
or on behalf of Mission. The Mission Real Property list
discloses each such property as to which such an assessment has
not been prepared on behalf of Mission.
4.13 PERFORMANCE OF OBLIGATIONS. Mission has performed
in all material respects all of the obligations required to be
performed by it to date and is not in default under or in breach
of any term or provision of any covenant, contract, lease,
indenture or any other covenant to which it is a party, is
subject or is otherwise bound, and no event has occurred that,
with the giving of notice or the passage of time or both, would
constitute such default or breach, where such default or breach
would have a material adverse effect on the business, financial
condition, results of operations or prospects of Mission. Except
for loans and leases made by Mission in the ordinary course of
business, to Mission 's knowledge, no party with whom Mission has
an agreement that is of material importance to the business of
Mission is in material default thereunder.
4.14 EMPLOYEES. There are no controversies pending or
threatened between Mission and any of its employees that are
likely to have a material adverse effect on the business,
financial condition, results of operations or prospects of
Mission. Mission is not a party to any collective bargaining
agreement with respect to any of its employees or any labor
organization to which its employees or any of them belong.
4.15 REGISTRATION OBLIGATION. Mission is not under
any obligation, contingent or otherwise, to register any of its
securities under the Securities Act.
4.16 BROKERS AND FINDERS. Except as set forth in a
list furnished by Mission to CFAC (the "Mission Brokers and
Finders List"), Mission is not a party to or obligated under any
agreement with any broker or finder relating to the transactions
contemplated hereby, and neither the execution of this Agreement
nor the consummation of the transactions provided for herein or
therein will result in any liability to any broker or finder.
4.17 MATERIAL CONTRACTS. Except as set forth in a list
furnished by Mission to CFAC (the "Mission Contract List")
hereto (all items listed or required to be listed in such Mission
Contract List being referred to herein as "Scheduled Contracts"),
Mission is not a party or otherwise subject to:
(a) any employment, deferred compensation,
bonus or consulting contract that (i) has a remaining term, as of the
date of this Agreement, of more than one year in length of
obligation on the part of Mission and is not terminable by
Mission within one year without penalty or (ii)requires payment
by Mission of $10,000 or more per annum;
(b) any advertising, brokerage, licensing,
dealership, representative or agency relationship or contract
requiring payment by Mission of $10,000 or more per annum;
(c) any contract or agreement that restricts
Mission (or would restrict any Affiliate of Mission (including
CFAC) after the Effective Time of the Merger) from competing in
any line of business with any Person or using or employing the
services of any Person;
(d) any lease of real or personal property
providing for annual lease payments by or to Mission in excess of
$10,000 per annum other than (i) financing leases entered into in
the ordinary course of business in which Mission is lessor and
(ii)leases of real property presently used by Mission as banking
offices;
(e) any mortgage, pledge, conditional sales
contract, security agreement, option, or any other similar
agreement with respect to any interest of Mission (other than as
mortgagor or pledgor in the ordinary course of Mission's banking
business or as mortgagee, secured party or deed of trust
beneficiary in the ordinary course of its business, including any
agreement relating to advances from the Federal Home Loan Bank of
San Francisco) in personal property having a value of $10,000 or
more;
(f) other than as described in the Mission
Filings or as set forth in the Mission Employee Plan List, any
stock purchase, stock option, stock bonus, stock ownership,
profit sharing, group insurance, bonus, deferred compensation,
severance pay, pension, retirement, savings or other incentive,
welfare or employment plan or material agreement providing
benefits to any present or former employees, officers or
directors of Mission;
(g) any agreement to acquire equipment or any
commitment to make capital expenditures of $10,000 or more;
(h) other than agreements entered into in the
ordinary course of business, including sales of other real estate
owned, any agreement for the sale of any property or assets in
which Mission has an ownership interest or for the grant of any
preferential right to purchase any such property or asset;
(i) any agreement for the borrowing of any
money (other than liabilities or interbank borrowings made in the
ordinary course of Mission 's banking business and reflected in
the financial records of Mission);
(j) any guarantee or indemnification by Mission
which involves the sum of $10,000 or more, other than letters of
credit or loan commitments issued in the normal course of
business;
(k) any supply, maintenance or landscape
contracts not terminable by Mission without penalty on 30 days or
less notice and which provide for payments in excess of $20,000
per annum;
(l) other than as disclosed with reference to
subparagraph (j) of this Section 4.17, any material agreement
which would be terminable other than by Mission as a result of
the consummation of the transactions contemplated by this
Agreement;
(m) any contract of participation with any
other financial institution or other Person in any loan in excess of
$10,000 or any sales of assets of Mission, in either case with
recourse of any kind to Mission;
(n) any agreement providing for the sale or
servicing of any loan or other asset, including any agreements
with the Small Business Administration, FNMA, HUD, or Freddie Mac
or any other Person;
(o) any contract relating to the provision of
data processing services to Mission;
(p) any other agreement of any other kind which
involves future payments or receipts or performances of services
or delivery of items requiring payment of $10,000 or more to or
by Mission other than payments made under or pursuant to loan
agreements, participation agreements and other agreements for the
extension of credit in the ordinary course of its business.
True copies of all Scheduled Contracts, including all
amendments and supplements thereto, have been furnished to CFAC.
4.18 CERTAIN MATERIAL CHANGES. Except as specifically
required, permitted or effected by this Agreement or as set forth
in a list furnished by Mission to CFAC (the "Mission Material
Change List"), since December 31, 1996 there has not been,
occurred or arisen any of the following (whether or not in the
ordinary course of business unless otherwise indicated):
(a) Any change in any of the assets,
liabilities, permits, methods of accounting or accounting practices, business
or manner of conducting business, of Mission or any other event
or development that has had or may reasonably be expected to have
a material adverse effect on the business, financial condition,
results of operations or prospects of Mission;
(b) Any damage, destruction or other casualty
loss (whether or not covered by insurance) that has had or may
reasonably be expected to have a material adverse effect on the
business, financial condition, results of operations or prospects
of Mission that may involve a loss of more than $10,000 in excess
of applicable insurance coverage;
(c) Any amendment, modification or termination
of any existing, or entry into any new, material contract or permit
that has had or may reasonably be expected to have a material
adverse effect on the business, financial condition, results of
operations or prospects of Mission;
(d) Any disposition by Mission of an asset the
lack of which has had or may reasonably be expected to have a
material adverse effect on the business, financial condition,
results of operations or prospects of Mission; or
(e) Any direct or indirect redemption, purchase
or other acquisition by Mission of any equity securities or any
declaration, setting aside or payment of any dividend or other
distribution on or in respect of the shares of Mission whether
consisting of money, other personal property, real property or
other things of value.
4.19 LICENSES AND PERMITS. Mission has all material
licenses and permits that are necessary for the conduct of its
business, and such licenses are in full force and effect, except
for any failure to be in full force and effect that would not,
individually or in the aggregate, have a material adverse effect
on the business, financial condition, results of operations or
prospects of Mission. The properties, assets, operations and
businesses of Mission are and have been maintained and
conducted, in all material respects, in compliance with all
applicable licenses and permits. The properties and operations
of Mission are and have been maintained and conducted, in all
material respects, in compliance with all applicable laws and
regulations.
4.20 EMPLOYEE BENEFIT PLANS.
(a) EXISTENCE OF PLANS. For purposes of this
Agreement, the term "Plans" shall mean (i) all "Employee Benefit
Plans" (as such term is defined in Section 3(3) of ERISA) of
which Mission or any member of the same controlled group of
corporations, trades or businesses as Mission within the meaning
of Section 4001(a)(14) of ERISA (for purposes of this Section, an
"ERISA Affiliate") is a sponsor or participating employer or as
to which Mission or any of its ERISA Affiliates makes
contributions or is required to make contributions and (ii) any
similar employment, severance or other arrangement or policy of
Mission or of any of its ERISA Affiliates (whether written or
oral) providing for insurance coverage (including self-insured
arrangements), workers' compensation, disability benefits,
supplemental unemployment benefits, vacation benefits, retirement
benefits, or for profit sharing, deferred compensation, bonuses,
stock options, stock appreciation or other forms of incentive
compensation or post-retirement insurance, compensation or
benefits. Except as is disclosed in the "Mission Employee Plan
List," (i) neither Mission nor any of its ERISA Affiliates
maintains or sponsors, or makes or is required to make
contributions to, any Plans, (ii) none of the Plans is a
"multiemployer plan," as defined in Section 3(37) of ERISA, (iii)
none of the Plans is a "defined benefit pension plan" within the
meaning of Section 3(35) of ERISA, and (iv) each of the Plans is,
and at all times since its inception has been, in compliance with
all provisions of ERISA, the Code, the Consolidated Omnibus
Budget Reconciliation Act of 1985 ("COBRA") and all other
applicable laws. Notwithstanding any statement or indication in
this Agreement to the contrary, and except as otherwise provided
for in the letter required pursuant to Article XII of this
Agreement, there are no Plans as to which Mission or its ERISA
Affiliates will be required to make any contributions, whether on
behalf of any of the current employees of the Mission, its ERISA
Affiliate or on behalf of any other person, after the Closing.
With respect to each of such Plans, at the Closing there will be
no liabilities that have not been recorded in accordance with
GAAP with respect to the establishment, implementation,
operation, administration or termination of any such Plan, or the
termination of the participation in any such Plan by Mission or
any of its ERISA Affiliates. Neither Mission nor any ERISA
Affiliate has any formal plan or commitment, whether legally
binding or not, to create any additional Plan, or modify or
change any existing Plan that would affect any employee or
terminated employee of Mission or any ERISA Affiliate, except as
disclosed on the Mission Employee Plan List. Mission has
delivered to CFAC true and complete copies of: (i) each of the
Plans and any related funding and service agreements thereto
(including insurance contracts, investment managing agreements,
subscription and participation agreements and recordkeeping
contracts) including all amendments, all of which are legally
valid and binding and in full force and effect and there are no
defaults thereunder, (ii) the currently effective Summary Plan
Description, Summary of Material Modifications and all material
employee communications pertaining to each of the Plans, (iii)
the three most recent annual reports for each of the Plans
(including all relevant schedules), (iv) the most recently filed
PBGC Form 1 (if applicable), and (v) the most recent Internal
Revenue Service determination letter for each Plan which is
intended to constitute a qualified plan under Section 401 of the
Code and each amendment to each of the foregoing documents and
any requests for rulings, determinations, or opinions pending
with the Internal Revenue Service or any other governmental
agency.
(b) TITLE IV PLANS. Mission does not maintain
any Plans subject to Title IV of ERISA.
(c) PENALTIES; REPORTABLE EVENTS. None of the
Plans, nor any trust created thereunder nor any trustee,
fiduciary or administrator thereof, has engaged in any
transaction which would be reasonably likely to subject any of
the Plans, any such trust, or any trustee, fiduciary or
administrator thereof, or any party dealing with the Plans or any
such trust, to the tax or penalty on prohibited transactions
imposed by Section 4975 of the Code or to any civil penalty
imposed by Section 502 of ERISA.
(d) DEFICIENCIES; QUALIFICATION. None of the
Plans nor any trust created thereunder has incurred any
"accumulated funding deficiency" as such term is defined in
Section 412 of the Code, whether or not waived, since the
effective date of said Section 412. Furthermore, neither Mission
nor any of its ERISA Affiliates has any unfunded liability under
ERISA in respect of any of the Plans. Each of the Plans and
associated trust is qualified in form and operation under Section
401(a) of the Code and exempt from tax under Section 501(a) of
the Code, respectively, and Mission does not know of any fact
which could adversely affect the qualified status of any such
Plan. No event has occurred which will subject such Plans to a
material amount of tax under Section 511 of the Code. Any such
Plan which has engaged in a merger, or consolidation, with any
other Plan or transfer of assets or liabilities from any other
plan, has done so in compliance with the applicable laws. All
material government reports and filings required by law have been
properly and timely filed and all information required to be
distributed to participants or beneficiaries has been distributed
with respect to each Plan. All contributions required to be made
to each of the Plans under the terms of the Plan, ERISA, the
Code, COBRA or any other applicable laws have been timely made.
The Financial Statements properly reflect all amounts required to
be accrued as liabilities to date under each of the Plans. There
is no contract, agreement or benefit arrangement covering any
employee of Mission which, individually or collectively, could
give rise to the payment of any amount which would constitute an
"excess parachute payment" (as defined in Section 280G of the
Code).
(e) LITIGATION. There have occurred and there
exists (i) no pending litigation or controversies against the
Plans or against Mission or any of its ERISA Affiliates as the
"Employer" or "Sponsor" under the Plans or against the trustee,
fiduciaries or administrators of any of the Plans and (ii) no
pending or, to the knowledge of Mission, threatened
investigations, proceedings, lawsuits, disputes, actions or
controversies involving the Plans, or the administrator or
trustee of any of the Plans with any of the Internal Revenue
Service, Department of Labor, Pension Benefit Guaranty
Corporation, any participant in the Plans or any other person
whatsoever. Without limiting the generality of the foregoing,
there are no lawsuits or other claims, pending or, to the
knowledge of Mission, threatened (other than routine claims for
benefits under a Plan) against (i) any Plan, or (ii) any
"Fiduciary" of such Plan (within the meaning of Section 3(21)(a)
of ERISA) brought on behalf of any participant, beneficiary or
Fiduciary thereunder, nor is there a reasonable basis for any
such claim.
4.21 CORPORATE RECORDS. The minute books of Mission
accurately reflect all material actions taken to this date by the
respective stockholders, boards of directors and committees of
Mission and contain true and complete copies of the Federal Stock
Charter, as amended, Bylaws, as amended, and other charter
documents, and all amendments thereto. True and complete copies
of Mission's Federal Stock Charter, as amended, Bylaws, as
amended, and other charter documents, and all amendments thereto,
have been furnished to CFAC.
4.22 COMMUNITY REINVESTMENT ACT. Mission received a
rating of "Satisfactory" in its most recent examination or
interim review with respect to the Community Reinvestment Act.
Mission has not been advised of any supervisory concerns
regarding any of Mission 's compliance with the Community
Reinvestment Act.
4.23 REGULATORY ACTIONS.
(a) As of the date hereof, and to the best of
Mission's knowledge, Mission is in compliance with all applicable
federal, state, local and foreign statutes, laws, regulations,
ordinances, rules, judgments, orders or decrees applicable
thereto or to the employees conducting such businesses,
including, without limitation, the Equal Credit Opportunity Act,
the Bank Secrecy Act, the Fair Housing Act, the Community
Reinvestment Act, the Home Mortgage Disclosure Act, the Americans
with Disabilities Act, and all other applicable fair lending laws
or other laws relating to discrimination, and Mission is not the
subject of a referral to either the United States Department of
Justice or the Department of Housing and Urban Development for
alleged violations of the Fair Lending Acts, except where any
failure to comply would not have a material adverse effect on the
business, financial condition, results of operations or prospects
of Mission.
(b) Except as set forth in a list (the "Mission
Regulatory Actions List"), to the knowledge of Mission, each
material violation, criticism, or exception by any Governmental
Entity with respect to any examinations of Mission has been
responded to or is the process of being responded to, and Mission
has not been advised by any Governmental Entity that its response
is inadequate.
(c) Except as set forth in the "Mission
Regulatory Actions List", Mission is not 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, any Governmental Entity nor
has it been advised, in writing or orally within the past 60
days, by any Governmental Entity that it is contemplating issuing
or requesting (or is considering the appropriateness of issuing
or requesting) any such order, directive, written agreement,
memorandum of understanding, extraordinary supervisory letter,
commitment letter, board resolutions or similar undertaking.
4.24 INSIDER LOANS; OTHER TRANSACTIONS. Mission has
previously provided CFAC with a listing, current as of November
30, 1997, of all extensions of credit made by Mission and each of
its executive officers and directors and their related interests
(all as defined under Federal Reserve Board Regulation O), all of
which have been made in compliance with Regulation O, which
listing is true, correct and complete in all material respects.
Mission does not owe any amount to, or has any contract or lease
with or commitment to, any of the present executive officers or
directors of Mission (other than for compensation for current
services not yet due and payable, and reimbursement of expenses
arising in the ordinary course of business).
4.25 ACCOUNTING RECORDS. Mission maintains accounting
records which fairly and accurately reflect, in all material
respects, its transactions and accounting controls exist
sufficient to provide reasonable assurances that such
transactions are, in all material respects, (a)executed in
accordance with management's general or specific authorization,
and (b) recorded as necessary to permit the preparation of
financial statements in conformity with generally accepted
accounting procedures and/or applicable regulatory accounting
principles or banking regulations consistently applied. Such
records, to the extent they contain important information
pertaining to Mission which is not easily and readily available
elsewhere, have been duplicated, and such duplicates have been
stored and maintained in compliance with OTS Regulations.
4.26 INDEMNIFICATION. Other than pursuant to the
provisions of its Federal Stock Charter or Bylaws or applicable
OTS Regulations, Mission is not a party to any indemnification
agreement with any of its present directors, officers, employees,
agents or other persons who serve or served in any other capacity
with any other enterprise at the request of Mission (a "Covered
Person"), and to the knowledge of Mission, there are no claims
for which any Covered Person would be entitled to indemnification
except as set forth in a list furnished by Mission to CFAC (the
"Mission Indemnification List").
4.27 OFFICES AND ATMS. Mission has furnished to CFAC
a list (the "Mission Offices List") setting forth the
headquarters of Mission (identified as such) and each of the
offices and automated teller machines ("ATMs") maintained and
operated by Mission (including, without limitation,
representative and loan production offices and operations
centers) and the location thereof. Except as set forth on the
Mission Offices List, Mission maintains no other office or ATM
and conducts business at no other location, and Mission has not
applied for nor received permission to open any additional branch
nor operate at any other location.
4.28 DEFALCATION LOSSES. Mission has furnished to
CFAC a list (the "Mission Defalcation Losses List") setting
forth any Defalcation Loss (as herein defined) which has occurred
at Mission during the period after December 31, 1996 to the date
of the Agreement. To the knowledge of Mission, no action has
been taken or omitted to be taken by any employee of Mission that
has resulted in the incurrence of a Defalcation Loss or that
might reasonably be expected to result in the incurrence of any
individual Defalcation Loss which, net of any insurance proceeds
payable in respect thereof, would exceed $10,000 on an individual
or aggregate basis. For purposes of this section, "Defalcation
Loss" means any loss resulting from cash shortages, lost or
misposted items, disputed clerical and accounting errors, forged
checks, payment of checks over stop payment orders, counterfeit
money, wire transfers made in error, theft, robberies,
defalcations, check kiting, fraudulent use of credit cards or
electronic teller machines, civil money penalties, fines,
litigation, claims or other similar acts or occurrences.
4.29 LOAN PORTFOLIO.
(a) Mission has furnished to CFAC a list (the
"Mission Loan List") that sets forth as of November 30, 1997 a
description of (a) by type and classification, if any, each loan,
lease, other extension of credit or commitment to extend credit
by Mission in excess of $10,000; (b) by type and classification,
all loans, leases, other extensions and commitments to extend
credit of Mission of $10,000 or more, that have been classified
by any bank regulatory authority or any unit of Mission or by any
other Person as "Special Mention," "Watch List," "Substandard,"
"Doubtful," "Loss" or any comparable classification ("Classified
Credits"); and (c) all consumer loans due to Mission as to which
any payment of principal, interest or any other amount is 90 days
or more past due. There is no material disagreement with any
regulatory agency as to any classification referred to herein.
(b) Each loan, other than loans the aggregate
amount of which to any one borrower and its related interests
reflected as an asset on Mission 's most recent balance sheet
does not exceed $20,000, and each balance sheet date subsequent
thereto (i) is evidenced by notes, agreements or other evidence
of indebtedness which are true, genuine and what they purport to
be, and (ii) is the legal, valid and binding obligation of the
obligor named therein, enforceable in accordance with its terms,
subject to bankruptcy, insolvency, fraudulent conveyance and
other laws of general applicability relating to or affecting
creditors' rights and to general equity principles. All such
loans and extensions of credit that have been made by Mission and
that are subject to Section 11 of HOLA comply therewith.
4.30 INVESTMENT SECURITIES. Mission has furnished to
CFAC a list (the "Mission Investment Securities List") setting
forth a description of each Investment Security held by Mission
on November 30, 1997 and on the date of this Agreement. The
Mission Investment Securities List sets forth, with respect to
each such Investment Security: (i)the issuer thereof; (ii) the
outstanding balance or number of shares; (iii) the maturity, if
applicable; (iv) the title of issue; and (v) the classification
under SFAS No. 115. Mission does not hold any Investment
Security classified as trading.
4.31 DERIVATIVES CONTRACTS; STRUCTURED NOTES; ETC.
Except as set forth in a list furnished by Mission to CFAC (the
"Mission Derivatives List"), Mission is not a party to nor has
agreed to enter into an exchange traded or over-the-counter
equity, interest rate, foreign exchange or other swap, forward,
future, option, cap, floor or collar or any other contract that
is not included on the balance sheet and is a derivative contract
(including various combinations thereof) (each a "Derivatives
Contract") or owns securities that are referred to generically as
"structured notes," "high risk mortgage derivatives," "capped
floating rate notes," or "capped floating rate mortgage
derivatives."
4.32 POWER OF ATTORNEY. Except as part of the
transactions entered into by Mission in the ordinary course of
its business, Mission has not granted any Person a power of
attorney or similar authorization that is presently in effect or
outstanding.
4.33 MATERIAL INTERESTS OF CERTAIN PERSONS. No officer
or director of Mission, or any associate thereof (as such term is
defined in Rule 12b-2 under the Exchange Act) has any material
interest in any material contract or property (real or personal)
tangible or intangible, used in or pertaining to the business of
Mission.
4.34 FACTS AFFECTING REGULATORY APPROVALS. To the best
of Mission's knowledge, there is no material fact, event or
condition applicable to Mission which will, or reasonably could
be expected to, adversely affect the likelihood of securing the
requisite approvals or consents of any Governmental Entity to
this Agreement and transactions contemplated by this Agreement.
4.35 DISCLOSURE DOCUMENTS AND APPLICATIONS. None of
the information supplied or to be supplied by or on behalf of
Mission ("Mission Supplied Information") for inclusion in any
documents to be filed with the OTS, the FDIC or any other
Governmental Entity in connection with the transactions
contemplated in this Agreement, will, at the respective times
such documents are filed, contain any untrue statement of a
material fact, or omit to state any material fact required to be
stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were
made, not misleading.
4.36 CERTAIN REGULATORY MATTERS.
(a) Mission is a qualified thrift lender under
Section 10(m) of the HOLA and is a member of the Federal Home
Loan Bank of San Francisco; and
(b) Mission has not paid any dividends to
Mission shareholders that (i) caused the regulatory capital of Mission to
be less than the amount then required by applicable law or (ii)
exceeded any other limitation on the payment of dividends imposed
by law, agreement or regulatory policy. Other than as required
by applicable law or OTS Regulations, there are no restrictions
on the payment of dividends by Mission.
4.37 CORPORATE APPROVAL.
(a) The affirmative vote of the holders of
two-thirds of the outstanding shares of Mission is required to
adopt this Agreement and approve the Merger and the other
transactions contemplated hereby. No other vote of the
shareholders of Mission is required by law, the Federal Stock
Charter or Bylaws of Mission or otherwise to adopt this Agreement
and approve the Merger and the other transactions contemplated
hereby; and
(b) At a duly held and constituted meeting of
the Board of Directors of Mission, the directors unanimously
authorized Mission's entry into this Agreement and the
transactions contemplated hereby.
4.38 INTELLECTUAL PROPERTY. Except as set forth in a
list furnished by Mission to CFAC (the "Mission Intellectual
Property List"), Mission owns or possesses valid and binding
licenses and other rights to use without payment all material
patents, copyrights, trade secrets, trade names, service marks
and trademarks used in their respective businesses; and Mission
has not received any notice with respect thereto that asserts the
rights of others. Mission has in all material respects performed
all the obligations required to be performed by it, and is not in
default in any material respect under any license, contract,
agreement, arrangement or commitment relating to any of the
foregoing.
4.39 ACCURACY AND CURRENTNESS OF INFORMATION FURNISHED.
The representations and warranties made by Mission hereby or in
the Lists hereto do not contain any untrue statement of a
material fact or omit to state any material fact which is
necessary under the circumstances under which they were made to
prevent the statements contained herein or in such Lists or
schedules from being misleading.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF CFAC
CFAC represents and warrants to Mission as follows:
5.1 INCORPORATION, STANDING AND POWER. CFAC is a
corporation duly organized, validly existing and in good standing
under the laws of the State of Delaware. The Certificate of
Incorporation and Bylaws of CFAC, each as amended to date, are in
full force and effect. CFAC is duly qualified and in good
standing as a foreign corporation, and is authorized to do
business, in all states or other jurisdictions in which such
qualification or authorization is necessary, except where the
failure to be so qualified or authorized would not, individually
or in the aggregate, have a material adverse effect on the
financial condition, results of operation or business of CFAC on
a consolidated basis.
5.2 AUTHORITY OF CFAC. The execution and delivery by
CFAC of this Agreement and the consummation of the transactions
contemplated hereby have been duly and validly authorized by all
necessary corporate action on the part of CFAC, and this
Agreement is a valid and binding obligation of CFAC, enforceable
in accordance with its terms, except as the enforceability
thereof may be limited by bankruptcy, liquidation, receivership,
conservatorship, insolvency, fraudulent conveyance, moratorium or
other similar laws affecting the rights of creditors generally,
and by general equitable principles. Except as set forth in a
list furnished by CFAC to Mission (the "CFAC Conflicts and
Consents List"), neither the execution and delivery by CFAC of
this Agreement, the consummation of the transactions contemplated
herein, nor compliance by CFAC with any of the provisions hereof,
will (a) conflict with or result in a breach of any provision of
the Certificate of Incorporation or Bylaws, as amended, of CFAC;
(b) constitute a breach of or result in a default (or give rise
to any rights of termination, cancellation or acceleration, or
any right to acquire any securities or assets) under any of the
terms, conditions or provisions of any material note, bond,
mortgage, indenture, franchise, license, permit, agreement or
other instrument or obligation to which CFAC is a party, or by
CFAC or any of their respective properties or assets is bound;
(c) result in the creation or imposition of any Encumbrance on
any of the material properties or assets of CFAC; or (d) violate
any material order, writ, injunction, decree, statute, rule or
regulation applicable to CFAC or any of their respective
properties or assets. Except as set forth in the CFAC Conflicts
and Consents List, no consent of, approval of, notice to or
filing with any Governmental Entity having jurisdiction over any
aspect of the business or assets of CFAC, and no consent or
approval of any other Person, is required in connection with the
execution and delivery by CFAC of this Agreement, or the
consummation by CFAC of the transactions contemplated hereby,
except such approvals as may be required by the OTS and the
FDIC.
5.3 DISCLOSURE DOCUMENTS AND APPLICATIONS. None of
the information supplied or to be supplied by or on behalf of
CFAC ("CFAC Supplied Information") for inclusion in the Proxy
Statement, or any other documents to be filed with the OTS, the
FDIC or any other Governmental Entity in connection with the
transactions contemplated in this Agreement will, at the
respective times such documents are filed or become effective
contain any untrue statement of a material fact, or omit to state
any material fact required to be stated therein or necessary in
order to make the statements therein, in light of the
circumstances under which they were made, not misleading.
5.4 CORPORATE APPROVAL. At a duly constituted
meeting of the Board of Directors of CFAC, directors constituting
at least a majority of the directors then in office authorized
CFAC's entry into this Agreement and the transactions
contemplated hereby.
5.5 FACTS AFFECTING REGULATORY APPROVALS. To the
knowledge of CFAC, there is no fact, event or condition
applicable to CFAC which will, or reasonably could be expected
to, adversely affect the likelihood of securing the requisite
approvals or consents of any Governmental Entity to the Merger
and the transactions contemplated by this Agreement.
5.6 ACCURACY AND CURRENTNESS OF INFORMATION FURNISHED.
The representations and warranties made by CFAC hereby or in the
Lists or schedules hereto do not contain any untrue statement of
material fact or omit to state any material fact which is
necessary under the circumstances to prevent the statements
contained herein or in such Lists or schedules from being
misleading.
ARTICLE VI
COVENANTS OF MISSION
PENDING EFFECTIVE TIME OF THE MERGER
Subject to the requirements of law and regulation
generally applicable to savings and loan associations and
fiduciary obligations of its Board of Directors, Mission
covenants and agrees with CFAC as follows:
6.1 LIMITATION ON MISSION'S CONDUCT PRIOR TO EFFECTIVE
TIME. Between the date hereof and the Effective Time of the
Merger, except as contemplated by this Agreement, Mission agrees
to conduct its business in the ordinary course in substantially
the manner heretofore conducted and in accordance with sound
banking practices, and Mission shall not, without prior written
consent of CFAC:
(a) issue, sell or grant any Mission Stock or
any other securities (including long term debt) of Mission or any
rights, options or securities to acquire any Mission Stock or any
other securities (including long term debt) of Mission, except
pursuant to Mission Options outstanding as of the date hereof;
(b) purchase, redeem or otherwise acquire any
capital stock or other securities of Mission or any rights,
options, or securities to acquire any capital stock or other
securities of Mission except as permitted by this Agreement;
(c) except as may be required to effect the
transactions contemplated herein, amend its Federal Stock Charter
or Bylaws, as applicable;
(d) grant any general or uniform increase in
the rate of pay of Mission's employees or Mission's employee
benefits;
(e) grant any increase in salary, incentive
compensation or employee benefits or pay any bonus to any Person
except for (i) salary increases of not more than 5% per
individual employee granted in the ordinary course of business
and consistent with past practices or as required by an existing
written employment agreement, and (ii) bonuses in a maximum
collective amount of up to $50,000 payable by Mission to its
employees immediately prior to the Closing and only in
conjunction with consummation of the transactions contemplated by
this Agreement;
(f) by or on behalf of Mission, make any
capital expenditure or commitments with respect thereto in excess of
$20,000 in the aggregate for any specific project or purpose,
except for ordinary repairs, renewals and replacements;
(g) compromise or otherwise settle or adjust
any assertion or claim of a deficiency in Taxes (or interest thereon
or penalties in connection therewith), extend the statute of
limitations with any tax authority or file any pleading in court
in any tax litigation or any appeal from an asserted deficiency,
or file or amend any federal, foreign, state or local tax return,
or make any tax election;
(h) by or on behalf of Mission, grant or commit
to grant any extension of credit if such extension of credit,
together with all other credit then outstanding to the same
Person and all Affiliated Persons, if unsecured would exceed
$20,000, or $250,000 if secured by a lien on real estate (for
purposes of this Section 6.1(h), if Mission requests approval to
grant or commit to grant any extension of credit of the type
identified in this Section 6.1(h), such consent shall be deemed
granted if CFAC does not respond within 24 hours of Mission's
request for consent);
(i) by or on behalf of Mission, change any
method or period of accounting unless and until required by generally
accepted accounting principles or a Governmental Entity;
(j) by or on behalf of Mission, grant or commit
to grant any extension of credit or amend the terms of any such
credit outstanding on the date hereof to any executive officer,
director or holder of ten percent (10%) or more of the
outstanding Mission Stock, or any Affiliate of such Person, if
such credit would exceed $20,000;
(k) by or on behalf of Mission, close any
offices at which business is conducted or open any new offices;
(l) by or on behalf of Mission, adopt or enter
into any new employment agreement or other employee benefit plan
or arrangement or amend or modify any employment agreement or
employee benefit plan or arrangement of any such type except for
such amendments as are required by law, and except as otherwise
permitted by this Agreement;
(m) initiate, solicit, or encourage (including
by way of furnishing information or assistance), or take any other
action to facilitate, any inquiries or the making of any proposal
which constitutes, or may reasonably be expected to lead to, any
Competing Transaction (as such term is defined below), or
negotiate with any person in furtherance of such inquiries or to
obtain a Competing Transaction, or agree to or endorse any
Competing Transaction, or authorize or permit any of its
officers, directors, or employees or any investment banker,
financial advisor, attorney, accountant, or other representative
retained by Mission or any of its Affiliates to take any such
action, and Mission shall promptly notify CFAC (orally and in
writing) of all of the material facts relating to all inquiries
and proposals which it may receive relating to any of such
matters. For purposes of this Agreement, "Competing
Transaction" shall mean any of the following involving Mission:
any merger, consolidation, share exchange or other business
combination; a sale, lease, exchange, mortgage, pledge, transfer
or other disposition of assets of Mission representing ten
percent (10%) or more of the consolidated assets of Mission; a
sale of shares of capital stock (or securities convertible or
exchangeable into or otherwise evidencing, or any agreement or
instrument evidencing, the right to acquire capital stock),
representing ten percent (10%) or more of the voting power of
Mission; a tender offer or exchange offer for at least ten
percent (10%) of the outstanding shares of Mission; a
solicitation of proxies in opposition to approval of the Merger
and the transactions contemplated by this Agreement by Mission's
shareholders; or a public announcement of a bona fide proposal,
plan or intention to do any of the foregoing. Mission will
immediately cease and cause to be terminated any existing
activities, discussions or negotiations with any parties (other
than CFAC) conducted heretofore with respect to any of the
foregoing. Mission will take the necessary steps to inform
promptly the appropriate individuals or entities referred to
above of the obligations undertaken in this Section. Mission
agrees that it will notify CFAC immediately if any such
inquiries, proposals or offers are received by, any such
information is requested from, or any such negotiations or
discussion are sought to be initiated or continued with Mission.
Mission also agrees that it shall promptly request each Person,
other than CFAC, that has heretofore executed a confidentiality
agreement in connection with its consideration of acquiring
Mission to return or otherwise destroy all confidential
information heretofore furnished to such person by or on behalf
of Mission and enforce any such confidentiality agreements.
Notwithstanding any other provision in this Section
6.1(n) or elsewhere in this Agreement, the obligations of Mission
in this Agreement are subject to the continuing fiduciary duties
of the Board of Directors of Mission and to the continuing
fiduciary duties of the Board of Directors of Mission to the
shareholders of Mission, as applicable. In the event the Board
of Directors of Mission receives an unsolicited, bona fide offer
for a Competing Transaction with another entity, and reasonably
determines, upon advice of counsel, that as a result of such
offer, any duty to act or to refrain from doing any act pursuant
to this Agreement is inconsistent with the continuing fiduciary
duties of said Board of Directors, such failure to act or refrain
from doing any act shall not constitute the failure of any
condition, breach of any covenant or otherwise constitute any
breach of this Agreement, except that any such failure to act or
refrain from doing any act shall entitle CFAC to terminate this
Agreement pursuant to Section 13.1(h) hereof;
(n) by or on behalf of Mission, other than in
the ordinary course of business, consistent with past practice, incur
any indebtedness for borrowed money or assume, guarantee, endorse
or otherwise as an accommodation become responsible for the
obligations of any other person;
(o) by or on behalf of Mission, change any of
Mission's basic policies and practices with respect to liquidity
management and cash flow planning, marketing, deposit
origination, lending, budgeting, profit and tax planning,
personnel practices or any other material aspect of Mission's
business or operations;
(p) by or on behalf of Mission, grant any
Person a power of attorney or similar authority;
(q) by or on behalf of Mission, make any
investment by purchase of stock or securities (including an
Investment Security), contributions to capital, personal property
transfers or otherwise in any other Person, except for federal
funds or obligations of the United States Treasury or an agency
of the United States government the obligations of which are
entitled to or implied to have the full faith and credit of the
United States government and which have an original maturity not
in excess of two years, in any case, in the ordinary course of
business consistent with past practices and which are not
designated as trading;
(r) by or on behalf of Mission, settle any
claim, action or proceeding involving any liability of Mission for money
damages in excess of $20,000 exclusive of insurance coverage, or
involving restrictions upon the operations of Mission;
(s) by or on behalf of Mission, amend or modify
in any material respect any Scheduled Contract or enter into any
agreement or contract that would be a Scheduled Contract under
Section 4.17, except as otherwise permitted by this Agreement;
(t) by or on behalf of Mission, waive or
release any material right or collateral or cancel or compromise any
extension of credit or other debt or claim, except for actions
taken in the resolution of extensions of credit or other debts or
claims that do not result in a reduction in excess of 10% of the
amount Mission is otherwise entitled to pursuant to such right,
collateral, credit or other debt or claim, and in a manner
consistent with past practice;
(u) by or on behalf of Mission, enter into any
new activities or lines of business, or cease to conduct any
material activities or lines of business that it conducts on the
date hereof, or conduct any material business activity not
consistent with past practice;
(v) by or on behalf of Mission, sell, transfer,
mortgage, encumber or otherwise dispose of any assets or release
or waive any claim, except in the ordinary course of business and
consistent with past practices;
(w) by or on behalf of Mission, reclassify any
Investment Security from hold-to-maturity or available for sale
to trading;
(x) by or on behalf of Mission, sell any
security other than in the ordinary course of business;
(y) by or on behalf of Mission, and not
including any foreclosures and deeds in lieu of foreclosures, take title to
any real property, other than single family or multifamily
residences of which Mission has no actual notice of any suspected
environmental contamination, without conducting prior thereto an
environmental investigation (which at a minimum shall consist of
a phase I environmental report), which investigation shall fail
to disclose the presence of any suspected environmental
contamination; or
(z) agree or make any commitment to take any
actions prohibited by this Section 6.1.
6.2 AFFIRMATIVE CONDUCT OF MISSION PRIOR TO EFFECTIVE
TIME. Between the date hereof and the Effective Time of the
Merger, Mission shall:
(a) use its commercially reasonable efforts
consistent with this Agreement to maintain and preserve intact
its present business organizations and to maintain and preserve
its relationships and goodwill with account holders, borrowers,
employees and others having business relationships with Mission;
(b) use its commercially reasonable efforts to
keep in full force and effect all of the existing material
permits and licenses of Mission;
(c) use its commercially reasonable efforts to
maintain insurance coverage at least equal to that now in effect
on all properties for which it is responsible and on the business
operations of Mission;
(d) perform its material contractual
obligations and not become in material default on any such obligations;
(e) duly observe and conform to all lawful
requirements applicable to its businesses, except for any failure
to so observe and conform that would not have a material adverse
effect on the business, financial condition, results of operation
or prospects of Mission;
(f) maintain its assets and properties of
Mission in good condition and repair, normal wear and tear excepted;
(g) promptly advise CFAC in writing of any
event or any other transaction within Mission 's knowledge whereby any
Person or Related Group of Persons acquires, directly or
indirectly, record or beneficial ownership or control (as defined
in Rule 13d-3 promulgated by the SEC under the Exchange Act) of
five percent (5%) or more of the outstanding shares of Mission
prior to the record date fixed for the shareholder meeting of
Mission or any adjourned meeting thereof to approve this
Agreement and the transactions contemplated herein;
(h) promptly notify CFAC regarding receipt from
any tax authority of any notification of the commencement of an
audit, any request to extend the statute of limitations, any
statutory notice of deficiency, any revenue agent's report, any
notice of proposed assessment, or any other similar notification
of potential adjustments to the tax liabilities of Mission, or
any actual or threatened collection enforcement activity by any
tax authority with respect to tax liabilities of Mission, and
make available to CFAC the calculation work papers for federal
income tax estimated payments;
(i) make available to CFAC monthly unaudited
consolidated balance sheets and consolidated income statements of
Mission within fifteen (15) days after the close of each calendar
month;
(j) not later than the 20th day of each
calendar month, amend or supplement the Mission Lists prepared and
delivered pursuant to Article IV to ensure that the information
set forth in the Mission Lists accurately reflects the
then-current status of the information provided therein, and
deliver such amendments or supplements to CFAC. Mission shall
further amend or supplement the Mission Lists as of the Closing
Date if necessary to reflect any additional information that
needs to be included in the Mission Lists. No amendment or
supplement to the Mission Lists needs to be provided to the
extent there has been no change or update in such Mission List;
(k) use its commercially reasonable efforts to
obtain any third party consent with respect to any contract,
agreement, lease, license, amendment, permit or release that is
material to the business of Mission that is contemplated in this
Agreement as required in connection with the Merger; and
(l) maintain an allowance for loan and lease
losses consistent with practices and methodology as in effect on
the date of the execution of this Agreement, subject to terms of
the Agreement;
(m) declare, set aside and pay cash dividends
between the date hereof and the Closing Date in the amount of
$0.09 per quarter, or the appropriate pro rata portion thereof,
for each full or pro rata portion of a quarterly period
commencing January 1, 1998 and ending on the Closing Date;
6.3 ACCESS TO INFORMATION.
(a) Mission will afford, upon reasonable
notice, to CFAC and its representatives, counsel, accountants, agents and
employees reasonable access during normal business hours to all
of its business, operations, properties, books, files and records
and will do everything reasonably necessary to enable CFAC and
its representatives, counsel, accountants, agents and employees
to make a complete examination of the financial statements,
businesses, assets and properties of Mission and the condition
thereof and to update such examination at such intervals as CFAC
shall reasonably deem appropriate. Such examination shall be
conducted in cooperation with the officers of Mission and in such
a manner as to minimize any disruption of, or interference with,
the normal business operations of Mission . Upon the request and
at the sole expense of CFAC, Mission will request McGladery &
Pullen to provide reasonable access to auditors' work papers with
respect to the businesses and properties of Mission including tax
accrual work papers prepared for Mission during the preceding
sixty (60) months or any future completed audits or completed
reviews of Mission other than (i) books, records and documents
covered by the attorney-client privilege, or that are attorneys'
work product, and (ii) books, records and documents that Mission
is legally obligated to keep confidential. No examination or
review conducted under this section shall constitute a waiver or
relinquishment on the part of CFAC of the right to rely upon the
representations and warranties made by Mission herein. CFAC
covenants and agrees that it and its representatives, counsel,
accountants, agents and employees will hold in strict confidence
all documents and information concerning Mission received from
any of them so obtained (except to the extent that such documents
or information are a matter of public record or require
disclosure in any of the public information of any applications
required to be filed with any Governmental Entity to obtain the
approvals and consents required to effect the transactions
contemplated hereby), and if the transactions contemplated herein
are not consummated, such confidence shall be maintained and all
such documents shall be returned to Mission.
(b) Representatives of CFAC, selected by CFAC
in its sole discretion, shall be authorized and permitted to review
each loan, lease, or other credit funded or renewed by Mission
after the date hereof, and all information associated with such
loan, lease or other credit within three Business Days of such
funding or renewal, such review to take place on Mission 's
premises.
(c) Representatives of CFAC, selected by CFAC
in its sole discretion, shall be reasonably permitted by Mission to
attend all regular and special Board of Directors' and committee
meetings of Mission from the date hereof until the Effective Time
of the Merger; provided, however, that the attendance of such
representative shall not be permitted at any meeting, or portion
thereof, for the sole purpose of discussing the transactions
contemplated by this Agreement or the obligations of Mission
under this Agreement, or information covered by the
attorney-client privilege.
6.4 REVIEW BY ACCOUNTANTS. Promptly upon request of
CFAC, Mission will request McGladery & Pullen to permit CFAC and
its representatives to review and examine the work papers of
McGladery & Pullen relating to Mission and the Financial
Statements of Mission and to review and examine the work papers
of McGladery & Pullen relating to any future completed audits or
completed reviews of Mission.
6.5 FILINGS. Mission agrees that through the
Effective Time of the Merger, each of its reports, registrations,
statements and other filings required to be filed with any
applicable Governmental Entity will comply in all material
respects with all the applicable statutes, rules and regulations
enforced or promulgated by the Governmental Entity with which it
will be filed. Any financial statement contained in any such
report, registration, statement or other filing that is intended
to present the financial position of the entity or entities to
which it relates will fairly present the financial position of
such entities or entity and will be prepared in accordance with
generally accepted accounting principles and/or applicable
regulatory accounting principles or banking regulations
consistently applied during the periods involved.
6.6 NOTICES; REPORTS. Mission will promptly notify
CFAC of any event of which Mission obtains knowledge which has
had or may have a materially adverse effect on the financial
condition, operations, business or prospects of Mission or in the
event that Mission determines that it is unable to fulfill any of
the conditions to the performance of CFAC's obligations
hereunder, as set forth in Articles IX or XI herein, and Mission
will furnish CFAC (i) as soon as available, and in any event
within ten (10) days after it is prepared, any report by Mission,
or submission to the Board of Directors of Mission or committee
thereof, except to the extent such report (or, in the case of a
portion of a report, the relevant portion thereof) has been
prepared for the sole purpose of discussing the transactions
contemplated by this Agreement or the obligations of Mission
under this Agreement or information covered by the
attorney-client privilege, provided, however, that this exception
shall not excuse any of Mission's other obligations under this
Agreement; (ii) as soon as available, all proxy statements,
information statements, financial statements, reports, letters
and communications sent by Mission to its stockholders or other
security holders, and all reports filed by Mission with, or
received by Mission from, the OTS, FDIC or any other
Governmental Entity, and (iii) such other existing reports as
CFAC may reasonably request relating to Mission.
6.7 MISSION STOCKHOLDERS' MEETING. Promptly after the
execution of this Agreement, and in no event later than 120 days
after the date hereof, Mission will take action necessary in
accordance with applicable law and its charter and Bylaws,
including preparation of the Proxy Statement, to convene a
meeting of its stockholders to consider and vote upon this
Agreement and the transactions contemplated hereby. The Board of
Directors of Mission shall, subject to its fiduciary duties,
recommend that its stockholders approve this Agreement and the
transactions contemplated hereby, and the Board of Directors of
Mission shall, subject to its fiduciary duties, use its best
efforts to obtain the affirmative vote of the holders of the
largest possible percentage of the outstanding Mission Stock to
approve this Agreement and the transactions contemplated hereby.
6.8 APPLICATIONS. Mission will cooperate with CFAC in
the preparation of the applications to be filed to obtain the
necessary regulatory approvals to consummate the transactions
contemplated by this Agreement and the Merger. Mission covenants
and agrees that all information furnished by Mission for
inclusion in all applications or statements filed with the
appropriate regulatory authorities for approval of, or consent
to, the Merger will comply in all material respects with the
provisions of applicable law, and will not contain any untrue
statement of material fact or omit to state material fact
required to be stated therein or necessary to make the statements
contained therein, in light of the circumstances under which they
were made, not misleading.
6.9 CERTAIN LOANS AND OTHER EXTENSIONS OF CREDIT.
Mission will promptly inform CFAC of the amounts and categories
of any Classified Credits. Mission will furnish CFAC, as soon as
practicable, and in any event within 20 days after the end of
each calendar month, schedules including the following: (a)
Classified Credits (including with respect to each credit its
classification category and the originating unit); (b) nonaccrual
credits (including the originating unit); (c) accrual exception
credits that are delinquent 90 or more days and have not been
placed on nonaccrual status (including its originating unit); (d)
credits delinquent as to payment of principal or interest
(including its originating unit), including an aging into
current-to-29, 30-59, 60-89, and 90+ day categories; (e)
participating loans and leases, stating, with respect to each,
whether it is purchased or sold and the originating unit; (f)
loans or leases (including any commitments) by Mission to any
Mission director, officer at or above the senior vice president
level, or shareholder holding ten percent (10%) or more of the
capital stock of Mission, including with respect to each such
loan or lease the identity and, to the knowledge of Mission, the
relation of the borrower to Mission, and the outstanding and
undrawn amounts; (g) letters of credit (including the originating
unit); (h) loans or leases wholly or partially charged off during
the previous month (including with respect to each loan or lease,
the originating amount, the write-off amount and its originating
unit); and (i) other real estate or assets acquired in
satisfaction of debt.
6.10 RESIGNATIONS. There shall have been delivered to
CFAC the resignations of the members of the Board of Directors
and officers of Mission effective at the Closing as CFAC shall
request, provided, however, that CFAC shall not request, at or
prior to the Closing, the resignation of Donavon Ternes as a
director of Mission, unless such resignation is required by any
Governmental Entity.
6.11 CONTRACT TERMINATION. Subject to compliance with
the applicable rules and regulations of the OTS, the contracts,
if any, identified by CFAC in writing no less than 45 days prior
to Closing, shall have been terminated by Mission as of the
Closing Date, and all expenses arising in connection with the
termination of such contracts shall have been included as
Transaction Costs (the "CFAC Contract Termination List").
6.12 CASH PAYMENT FOR STOCK OPTIONS; TERMINATION OF
MISSION OPTION PLAN. Prior to the Effective Time of the Merger,
Mission shall (a) use its best efforts to cause each holder of
Mission Options to enter into an agreement providing for the
cancellation of such options immediately prior to the Effective
Time of the Merger and (b) take all actions necessary to
terminate the Mission Option Plan, such termination to be
effective at the Effective Time of the Merger.
ARTICLE VII
COVENANTS OF CFAC
PENDING EFFECTIVE TIME OF THE MERGER
Subject to requirements of law and regulation generally
applicable to federally chartered savings banks and fiduciary
obligations of its Board of Directors, CFAC covenants and agrees
with Mission as follows:
7.1 LIMITATION ON CFAC'S CONDUCT PRIOR TO EFFECTIVE
TIME. Between the date hereof and the Effective Time of the
Merger, except as contemplated by this Agreement, CFAC shall not,
without prior written consent of Mission, (which consent shall
not be unreasonably withheld):
(a) enter into any agreement to acquire, merge
or consolidate with another insured depository institution which
transaction any Governmental Entity advises CFAC in writing would
result in the disapproval of the transactions contemplated in
this Agreement or the delay thereof until after May 31, 1999; or
(b) agree or make any commitment to take any
actions prohibited by this Section 7.1.
7.2 AFFIRMATIVE CONDUCT OF CFAC PRIOR TO EFFECTIVE
TIME. Between the date hereof and the Effective Time of the
Merger, CFAC shall:
(a) duly observe and conform to all lawful
requirements applicable to its business except for any failure to
so observe and conform that would not have a material adverse
effect on the ability of CFAC to consummate the Merger;
(b) use its commercially reasonable efforts to
obtain any third party consent with respect to any contract,
agreement, lease, license, arrangement, permit or release that is
material to the business of CFAC on a consolidated basis or that
is contemplated in this Agreement as required in connection with
the Merger; and
(c) not later than the 20th day of each
calendar month, amend or supplement the CFAC Lists prepared and delivered
pursuant to Article V to ensure that the information set forth in
the CFAC Lists accurately reflects the then-current status of the
information provided therein, and deliver such amendments or
supplements to Mission. CFAC shall further amend or supplement
the CFAC Lists as of the Closing Date if necessary to reflect any
additional information that needs to be included in the CFAC
Lists. No amendment or supplement to the CFAC Lists needs to be
provided to the extent there has been no change or update in such
CFAC List.
7.3 APPLICATIONS. CFAC will prepare and file or cause
to be prepared and filed an application for approval of the
Merger and organization of Interim with the OTS, and an
application pursuant to which it, and its Affiliates, as
appropriate, will become a savings and loan holding company.
CFAC shall afford Mission a reasonable opportunity to review
such applications (except the confidential portions thereof
relating to CFAC or its Affiliates) and all amendments and
supplements thereto before the filing thereof. CFAC will use
its commercially reasonable efforts to obtain all regulatory
approvals or consents necessary to effect the Merger as soon as
practicable., provided, however, under no circumstances shall
CFAC or its Affiliates be required to modify any of their
business plans or the proposed business plan for Mission in a
manner which CFAC determines would be materially burdensome.
CFAC will cooperate with Mission in its preparation of
the Proxy Statement. CFAC covenants and agrees that all
information furnished by CFAC for inclusion in the Proxy
Statement will comply in all material respects with the
provisions of applicable law, and will not contain any untrue
statement of material fact or omit to state material fact
required to be stated therein or necessary to make the statements
contained therein, in light of the circumstances under which they
were made, not misleading.
7.4 NOTICES; REPORTS. CFAC will promptly notify
Mission in the event that CFAC determines that it is unable to
fulfill any of the conditions to the performance of Mission's
obligations hereunder, and shall provide to Mission any reports
as Mission may reasonably request which relate to CFAC's
inability to fulfill any of the conditions to the performance of
CFAC's obligations hereunder. CFAC, at Mission's reasonable
request, shall provide updates to any of the reports referred to
in this Section 7.4.
7.5 DEPOSIT INTO ESCROW FUND. Within 15 Business Days
after the date of this Agreement, CFAC shall deposit into an
escrow account with a bank or trust company selected by CFAC and
reasonably acceptable to Mission for the benefit of Mission an
amount (the "Escrow Deposit") equal to five percent of the total
shareholders' equity of Mission as of October 31, 1997. In the
event the Closing does not occur because this Agreement is
terminated pursuant to Section 13.1(c), CFAC shall forfeit the
Escrow Deposit to Mission under the conditions described in
Section 14.2 hereunder. If the Closing shall occur, or the
Agreement shall be terminated for any other reason other than as
specified in Section 13.1(c), the Escrow Deposit shall be
immediately returned to CFAC.
ARTICLE VIII
ADDITIONAL COVENANTS
The parties hereto hereby mutually covenant and agree
with each other as follows:
8.1 COMMERCIALLY REASONABLE EFFORTS. Subject to the
terms and conditions of this Agreement, each party will use its
commercially reasonable efforts to take, or cause to be taken,
all actions and to do, or cause to be done, all things necessary,
proper or advisable under applicable laws and regulations to
consummate the transactions contemplated by this Agreement as
promptly as practical, provided, however, under no circumstances
shall CFAC or its Affiliates be required to modify any of their
business plans or the proposed business plan for Mission in a
manner which CFAC concludes would be materially burdensome.
8.2 PUBLIC ANNOUNCEMENTS. No press release or other
public disclosure of matters related to this Agreement or any of
the transactions contemplated hereby shall be made by CFAC, on
the one hand, or Mission, on the other hand, unless the other
party shall have provided their prior consent to the form and
substance thereof; provided, however, that nothing herein shall
be deemed to prohibit any party hereto from making any disclosure
which its counsel deems necessary or advisable in order to
fulfill such party's disclosure obligations imposed by law. To
the extent practicable, a joint press release shall be made with
respect to announcement of the entry into this Agreement.
8.3 ENVIRONMENTAL ASSESSMENT AND REMEDIATION. CFAC
may cause to be prepared at CFAC's sole cost and expense one or
more phase I environmental investigations with respect to any
property on the Mission Real Property List. In the event any
such phase I environmental investigation report, or any similar
report submitted to CFAC pursuant to Section 4.12(c) of this
Agreement, or any information from a Governmental Entity
discloses facts which, in the sole discretion of CFAC, warrant
further investigation, CFAC shall provide written notice to
Mission, and Mission shall use commercially reasonable efforts to
cause to be completed within 60 days of such written notice, at
the sole cost and expense of CFAC, a phase II environmental
investigation and report with respect to such property. The
consultant engaged by Mission to conduct such investigation and
provide such report shall be an environmental consultant
satisfactory to CFAC, who shall provide an estimate of the cost
of taking any remedial action recommended or suggested in such
phase II environmental investigation report, or which is required
by law, or which is determined to be prudent by CFAC in its sole
discretion. Mission shall either: (i) immediately commence such
remediation and complete such remediation promptly thereafter;
(ii) sell or otherwise transfer subject property in its entirety
to an unaffiliated third party without recourse to Mission, its
successors or assigns and subject to an agreement which CFAC must
approve; or (iii) refrain from taking any action with respect to
the subject property. In the event Mission refrains from taking
any action with respect to the subject property, CFAC shall have
the right to terminate this Agreement pursuant to Section
13.1(i). If Mission elects to remediate, the cost of any
remediation, including the cost, if any, of any estimates, shall
be borne by Mission (subject to applicable rights of
remibursement from third parties.) CFAC shall have the right,
notwithstanding any other provision of this Agreement, to extend
the Closing until such remediation can be fully accomplished;
provided, that in no event shall the Closing be extended beyond
May 31, 1999 unless otherwise agreed to by the parties hereto.
CFAC agrees to keep confidential, other than with
respect to Mission, and not to disclose any nonpublic information
obtained in the course of such environmental investigation
relating to environmental contamination or suspected
contamination of any property on the Mission Real Property List,
except as required by law.
ARTICLE IX
CONDITIONS PRECEDENT TO THE MERGER
The obligations of each of the parties hereto to
consummate the transactions contemplated herein are subject to
the satisfaction or waiver by each of the parties, on or before
the Closing Date, of the following conditions:
9.1 SHAREHOLDER APPROVAL. The Agreement and the
transactions contemplated hereby shall have received all
requisite approvals of the shareholders of Mission and Interim.
9.2 NO JUDGMENTS OR Orders. No judgment, decree,
injunction, order or proceeding shall be outstanding or
threatened by any Governmental Entity which prohibits the
effectuation of, or threatens to invalidate or set aside, the
Merger substantially in the form contemplated by this Agreement,
unless counsel to the party against whom such action or
proceeding was instituted or threatened renders to the other
parties hereto a favorable opinion that such judgment, decree,
injunction, order or proceeding is without merit.
9.3 REGULATORY APPROVALS. To the extent required by
applicable law or regulation, all approvals or consents of any
Governmental Entity, including, without limitation, those of the
OTS shall have been obtained or granted for the Merger and the
transactions contemplated hereby and the applicable waiting
period under all laws shall have expired. All other statutory or
regulatory requirements for the valid completion of the
transactions contemplated hereby shall have been satisfied and no
statute, rule, regulation, order, injunction or decree shall have
been enacted, entered, promulgated, interpreted, applied or
enforced by any Governmental Entity which prohibits or makes
illegal consummation of the Merger or any other transaction
contemplated by this Agreement.
ARTICLE X
CONDITIONS PRECEDENT TO THE OBLIGATIONS OF
MISSION
All of the obligations of Mission to effect the
transactions contemplated hereby shall be subject to the
satisfaction, on or before the Closing Date, of the following
conditions, any of which may be waived in writing by Mission:
10.1 LEGAL OPINION. Mission shall have received the
opinion of Manatt, Phelps & Phillips, LLP attorneys for CFAC,
dated as of the Closing Date, in substantially the form of
EXHIBIT B hereto.
10.2 REPRESENTATIONS AND WARRANTIES; PERFORMANCE OF
COVENANTS. All covenants, terms and conditions of this Agreement
to be complied with and performed by CFAC at or before the
Closing Date shall have been complied with and performed in all
material respects. Each of the representations and warranties of
CFAC contained in Article V hereof shall have been true and
correct in all material respects (except that where any statement
in a representation or warranty expressly includes a standard of
materiality, such statement shall be true and correct in all
respects) on and as of the date of this Agreement and (except to
the extent such representations and warranties speak as of an
earlier date or for changes expressly contemplated by this
Agreement) on and as of the Closing Date with the same effect as
though such representations and warranties had been made on and
as of the Closing Date. It is understood and acknowledged that
the representations being made on and as of the Closing Date
shall be made without giving effect to any update with respect to
the CFAC Lists in accordance with Section 7.2(c).
10.3 AUTHORIZATION OF MERGER. All actions necessary to
authorize the execution, delivery and performance of this
Agreement, by CFAC, and the consummation of the transactions
contemplated hereby, shall have been duly and validly taken by
the Board of Directors of CFAC to the extent required by
applicable law and CFAC shall have full power and right to merge
with Mission.
10.4 OFFICERS' CERTIFICATE. There shall have been
delivered to Mission on the Closing Date a certificate executed
by the Chief Executive Officer and the Chief Financial Officer of
CFAC, respectively, certifying, to the best of their knowledge,
compliance with all of the provisions of Sections 10.2 and 10.3.
10.5 FAIRNESS OPINION. Mission shall have received a
letter from Carpenter & Company or such other investment banking
firm selected by Mission, and reasonably satisfactory to CFAC,
within five (5) Business Days of the mailing of the Proxy
Statement to the shareholders of Mission, to the effect that the
consideration to be received in the Merger is fair from a
financial point of view to the shareholders of Mission.
ARTICLE XI
CONDITIONS PRECEDENT TO
OBLIGATIONS OF CFAC
All of the obligations of CFAC to effect the
transactions contemplated hereby shall be subject to the
satisfaction, on or before the Closing Date, of the following
conditions, any of which may be waived in writing by CFAC:
11.1 LEGAL OPINION. CFAC shall have received the
opinion of Adams, McAndrews, Matson & Landsberg, dated as of the
Closing Date, in substantially the form of EXHIBIT C hereto.
11.2 REPRESENTATIONS AND WARRANTIES; PERFORMANCE OF
COVENANTS. All the covenants, terms and conditions of this
Agreement to be complied with and performed by Mission at or
before the Closing Date shall have been complied with and
performed in all material respects. Each of the representations
and warranties of Mission contained in Article IV hereof shall
have been true and correct in all material respects (except that
where any statement is a representation or warranty expressly
including a standard of materiality, such statement shall be true
and correct in all respects) on and as of the date of this
Agreement and (except to the extent such representations and
warranties speak as of an earlier date or for changes expressly
contemplated by this Agreement) on and as of the Closing Date,
with the same effect as though such representations and
warranties had been made on and as of the Closing Date. It is
understood and acknowledged that the representations being made
on and as of the Closing Date shall be made without giving effect
to any update with respect to the Mission Lists in accordance
with Section 6.2(j).
11.3 AUTHORIZATION OF MERGER. All actions necessary to
authorize the execution, delivery and performance of this
Agreement by Mission and the consummation of the transactions
contemplated hereby shall have been duly and validly taken by the
Boards of Directors and shareholders of Mission, and Mission
shall have full power and right to merge with Interim.
11.4 REGULATORY APPROVALS AND RELATED CONDITIONS. Any
governmental and regulatory approvals and consents which are
required to consummate the Merger shall have been granted without
the imposition of conditions, restrictions or requirements that
are or would have become applicable to Mission, CFAC, any of
CFAC's subsidiaries or any of CFAC's Affiliates and that CFAC
concludes would have a material adverse affect on the financial
condition, results of operations, business, or prospects of CFAC,
Mission, any of CFAC's subsidiaries or any Affiliates of CFAC or
otherwise would be materially burdensome to CFAC, Mission, any of
CFAC's subsidiaries or any Affiliates of CFAC or business plans
or proposed business plans of any such entities.
11.5 THIRD PARTY CONSENTS AND AMENDMENTS. Mission and
CFAC shall have obtained all consents of other parties to their
respective material mortgages, notes, credit facilities, leases,
franchises, agreements, licenses and permits as may be necessary
to permit the Merger and the transactions contemplated herein to
be consummated without a material default, acceleration, breach
or loss of rights or benefits thereunder. To the extent any of
Mission's or CFAC's respective material mortgages, notes, credit
facilities, leases, franchises, agreements, licenses and permits
must be amended to permit the Merger and the transactions
contemplated herein, such amendments shall be in a form which
CFAC determines is acceptable to CFAC.
11.6 ABSENCE OF CERTAIN CHANGES. Between the date of
this Agreement and the Effective Time of the Merger, there shall
not have occurred any event that has had or could reasonably be
expected to have a material adverse effect on the business,
financial condition, results of operations or prospects of
Mission, whether or not such event, change or effect is reflected
in the Mission Lists as amended or supplemented after the date of
this Agreement.
11.7 OFFICERS' CERTIFICATE. There shall have been
delivered to CFAC on the Closing Date a certificate executed by
the President and the Chief Financial Officer of Mission,
respectively, certifying, to the best of their knowledge,
compliance with all of the provisions of Sections 11.2, 11.3,
11.4 and 11.5.
11.8 STOCKHOLDERS' AGREEMENTS. Concurrently with the
execution of this Agreement, each director of Mission who owns
shares of Mission shall have executed and delivered to CFAC an
agreement substantially in the form of EXHIBIT D agreeing, among
other things, to vote their shares of Mission in favor of the
Merger. Within 30 calendar days of the date of execution of this
Agreement, Mission shall use its best efforts to cause each
person owning 5% or more of the outstanding shares of Mission
("5% Shareholder") to execute and deliver to CFAC agreements
substantially in the form of EXHIBIT D agreeing to vote their
shares of Mission in favor of the Agreement and the transactions
contemplated hereby. In the event any other Person becomes a
director and shareholder or, 5% Shareholder of Mission after the
date of this Agreement, Mission shall cause such directors and/or
shareholders to execute and deliver to CFAC, within 5 Business
Days of becoming a director and shareholder, or 5% Shareholder,
an agreement substantially in the form of EXHIBIT D.
11.9 EMPLOYEE BENEFIT PLANS. CFAC shall have received
satisfactory evidence that all Mission 's employee benefit plans,
programs and arrangements, including without limitation, the
Plans, have been treated as provided in the letter referred to in
Article XII of this Agreement.
11.10 PENDING LITIGATION. There shall be no material
adverse change in any of the suits, claims, actions or
proceedings threatened or pending on the date of this Agreement
or subsequently threatened or brought against Mission prior to
the Closing Date.
11.11 EXPENSE REPORT. At least five Business Days
prior to the Closing Date, all attorneys, accountants, investment
bankers and other advisors and agents for Mission shall have
submitted to Mission (with a copy to CFAC) estimates of their
fees and expenses for all services rendered in any respect in
connection with the transactions contemplated hereby. Based on
such estimates, Mission shall have prepared and submitted to CFAC
a summary of such fees and expenses for the transaction. Prior
to the Closing Date (i) such advisors shall have submitted their
final bills for such fees and expenses to Mission for services
rendered with a copy to be delivered to CFAC, and based on such
summary Mission shall have prepared and submitted to CFAC a final
calculation of such fees and expenses and (ii) Mission shall have
accrued and paid the amount of such fees and expenses as
calculated above after CFAC has been given an opportunity to
review all such bills and the calculation of such fees and
expenses, and (iii) such advisors shall have released Mission and
CFAC (both before and after the Merger) from liability for any
expenses or fees to such advisors, or shall have advised them in
writing that, upon payment in full of such amounts, they shall
have no liability for any fees or expenses to such advisors.
11.12 LOAN LOSS RESERVE. Mission shall have in effect
on the Closing Date an allowance for loan and lease losses in an
amount as required by Mission's internal asset review policies,
generally accepted accounting principles, and the rules and
regulations of the OTS.
11.13 REMEDIATION. All remediation, to the extent
required hereunder, of environmental contamination or conditions
on any Mission Property shall have been completed to the
reasonable satisfaction of CFAC.
11.14 RESIGNATIONS. There shall have been delivered
to CFAC resignations of the directors and officers of Mission, as
requested by CFAC, effective as of the Closing.
11.15 PRESIDENT. Concurrently with the execution of
the Agreement, Donavon Ternes, the President of Mission, shall
have entered into an employment agreement, substantially in the
form of EXHIBIT E hereto, pursuant to which Mr. Ternes will be
employed as the President of Mission effective as of the
consummation of the transactions contemplated by this Agreement.
11.16 PERFECTED DISSENTING SHARES. The aggregate
number of Perfected Dissenting Shares shall not exceed ten
percent (10%) of the outstanding shares of Mission Stock.
11.17 OPTION CANCELLATION. CFAC shall have received
satisfactory evidence that all Mission Options outstanding prior
to the Effective Time and the Mission Option Plan have been
canceled and terminated pursuant to a written cancellation
agreement on terms and conditions satisfactory to CFAC.
ARTICLE XII
EMPLOYEE BENEFITS
The parties hereto agree that matters respecting
employee benefits shall be dealt with in a letter, dated the date
hereof, between the parties and hereby incorporated and made a
part hereof.
ARTICLE XIII
TERMINATION
13.1 TERMINATION. This Agreement may be terminated at
any time prior to the Effective Time of the Merger upon the
occurrence of any of the following:
(a) By mutual agreement of the parties, in
writing;
(b) By CFAC immediately upon the failure of the
shareholders of Mission to give the requisite approval of this
Agreement and the transactions contemplated hereby, after
conclusion of a shareholders' meeting or consent solicitation
called for such purpose;
(c) By Mission immediately upon expiration of
twenty (20) days from delivery of written notice by Mission to
CFAC of CFAC's material breach of or failure to satisfy any
covenant or agreement contained herein (provided that such
breach has not been waived by Mission or cured by CFAC prior to
expiration of such twenty (20) day period);
(d) By CFAC immediately upon expiration of
twenty (20) days from delivery of written notice by CFAC to Mission of
Mission's material breach of or failure to satisfy any covenant
or agreement contained herein (provided that such breach has not
been waived by CFAC or cured by Mission, as the case may be,
prior to expiration of such twenty (20) day period);
(e) By CFAC upon the expiration of thirty (30)
days after any Governmental Entity denies or refuses to grant any
approval, consent or authorization required to be obtained in
order to consummate the transactions contemplated by this
Agreement, or imposes, or proposes to impose, conditions,
restrictions or requirements that are or would have become
applicable to CFAC, Mission, CFAC's subsidiaries, or CFAC's
Affiliates, in such approval, consent or authorization which
CFAC concludes would have a material adverse affect on the
financial condition, results of operations, business or prospects
of CFAC, Mission, CFAC's subsidiaries or any Affiliates of CFAC,
or otherwise would be materially burdensome to CFAC, Mission, any
subsidiaries of CFAC, any Affiliates of CFAC, or business plans
or proposed business plans of any such entities, unless, within
said thirty (30) day period after such denial or refusal or
imposition of, or proposal to impose, conditions, restrictions or
requirements, CFAC agrees to resubmit the application to the
regulatory authority that has denied; or refused to grant the
approval, consent or qualification requested;
(f) By Mission or CFAC if any conditions set
forth in Article IX shall not have been met by May 31, 1999,
provided, however, that this Agreement shall not be terminated
pursuant to this Section 13.1(f) if the relevant condition shall
have failed to occur as a result of any act or omission by the
party seeking to terminate;
(g) By Mission if any of the conditions set
forth in Article X shall not have been met, or by CFAC if any of the
conditions set forth in Article XI shall not have been met, by
May 31, 1999, or such earlier time as it becomes apparent that
such condition shall not be met, provided, however, that this
Agreement shall not be terminated pursuant to this Section
13.1(g) if the relevant condition shall have failed to occur as a
result of any act or omission by the party seeking to terminate;
(h) By CFAC if Mission shall have failed to act
or refrain from doing any act pursuant to Section 6.1(m); or
(i) By CFAC under the circumstances set forth
in Section 8.3.
13.2 TERMINATION DATE. This Agreement shall be
terminated if the Closing Date shall not have occurred by May 31,
1999 unless extended in writing by the parties, provided,
however, that this Agreement shall not terminate by operation of
this Section 13.2 as a result of the breach of any covenant or
obligation contained in this Agreement by the party seeking to
terminate.
13.3 EFFECT OF TERMINATION. In the event of
termination of this Agreement by either Mission or CFAC as
provided in Section 13.1 or pursuant to Section 13.2, neither
Mission or CFAC shall have any further obligation or liability to
the other party except (a)with respect to the last sentences of
each of Section 6.3(a) and Section 8.3; (b) with respect to
Section 14.1 and Section 14.2; and (c)to the extent such
termination results from Mission's willful and material breach of
the warranties and representations made by it, or willful and
material failure in performance of any of its covenants,
agreements or obligations hereunder.
13.4 FORCE MAJEURE. Mission or CFAC agree that,
notwithstanding anything to the contrary in this Agreement, in
the event this Agreement is terminated as a result of a failure
of a condition, which failure is due to a natural disaster or
other act of God, or an act of war, and provided neither party
has failed to observe the material obligations of such party
under this Agreement, neither party shall be obligated to pay to
the other party to this Agreement any expenses or otherwise be
liable hereunder.
ARTICLE XIV
MISCELLANEOUS
14.1 EXPENSES.
(a) Notwithstanding any liquidated damages
required to be paid pursuant to Section 14.2, Mission hereby
agrees that if the Agreement is terminated by CFAC pursuant to
Section 13.1(b) with respect to the failure of Mission
stockholders to approve the Agreement and the transactions
contemplated hereby, or pursuant to Section 13.1(d) or Section
13.1(h), Mission shall promptly and in any event within 10 days
after such termination, pay CFAC all Expenses of CFAC, but not to
exceed $200,000. Any payment made by Mission pursuant to Section
14.1 hereof shall not be credited against any other amount due
under Section 14.2.
(b) Notwithstanding any liquidated damages
required to be paid pursuant to Section 14.2, CFAC hereby agrees
that if the Agreement is terminated by Mission pursuant to
Section 13.1(c), CFAC shall promptly and in any event within 10
days after such termination, pay Mission all Expenses of Mission,
but not to exceed $50,000. Any payment made by CFAC pursuant to
Section 14.1 hereof shall not be credited against any other
amount due under Section 14.2.
(c) Except as otherwise provided herein, all
Expenses incurred by Mission and CFAC in connection with or
related to the authorization, preparation and execution of this
Agreement, the solicitation of shareholder approvals and all
other matters related to the closing of the transactions
contemplated hereby, including, without limitation of the
generality of the foregoing, all fees and expenses of agents,
representatives, counsel and accountants employed by either such
party or its Affiliates, shall be borne solely and entirely by
the party which has incurred the same, with the exception of the
costs incurred by Mission in connection with providing
information pursuant to Section 6.4 hereto, which costs shall be
borne by CFAC.
14.2 LIQUIDATED DAMAGES.
(a) As an inducement to CFAC to enter into this
Agreement, (a) if this Agreement is terminated pursuant to
Section 13.1(b) as a result of the failure of the shareholders of
Mission to approve this Agreement and the transactions
contemplated hereby, Mission shall pay to CFAC the sum of
$200,000 promptly upon the termination of this Agreement, which
sum represents as reasonable and full liquidated damages and
reasonable compensation for the loss sustained thereby and not as
a penalty or forfeiture; or (b) if a Competing Transaction is
consummated prior to termination of this Agreement, or during the
twelve-month period following termination of this Agreement
pursuant to Sections 13.1(d) or (h), Mission shall pay or cause
the third party to any Competing Transaction to pay to CFAC the
sum of $200,000 promptly upon the consummation of a Competing
Transaction, which sum represents as reasonable and full
liquidated damages and reasonable compensation for the loss
sustained thereby and not as a penalty or forfeiture.
(b) As an inducement to Mission to enter into
this Agreement, if Mission terminates this Agreement pursuant to
Section 13.1(c), CFAC shall forfeit the Escrow Deposit to
Mission, which sum represents as reasonable and full liquidated
damages and reasonable compensation for the loss sustained
thereby and not as a penalty or forfeiture, and Mission shall not
have any other rights or remedies in equity or in law against
CFAC.
14.3 NOTICES. Any notice, request, instruction or
other document to be given hereunder by any party hereto to
another shall be in writing and delivered personally or by
confirmed facsimile transmission or sent by overnight courier,
registered or certified mail, postage prepaid, with return
receipt requested, addressed as follows:
To CFAC: CFAC
5480 East Ferguson Drive
Commerce, California 90022
Attention: Gary Cypres
Facsimile Number: (213) 720-8647
With a copy to: Manatt, Phelps & Phillips, LLP
11355 West Olympic Boulevard
Los Angeles, California 90064
Attention: William T. Quicksilver, Esq.
Telephone Number: (310) 312-4210
Facsimile Number: (310) 312-4224
To Mission : Mission Savings and Loan Association
4860 La Sierra Avenue
Riverside, California 92505
Attention: Donavon Ternes
Facsimile Number: (909) 359-3029
With a copy to: Adams, McAndrews, Matson & Landsberg
420 Santa Monica Boulevard, Suite 550
Santa Monica, California 90401
Attention: Peter F. McAndrews
Telephone Number: (310) 260-8760
Facsimile Number: (310) 451-3858
Any such notice, request, instruction or other
document shall be deemed received on the date delivered
personally or delivered by confirmed facsimile transmission, or
on the third Business Day after it was sent by registered or
certified mail, postage prepaid. Any of the persons shown above
may change its address for purposes of this section by giving
notice in accordance herewith.
14.4 SUCCESSORS AND ASSIGNS. All terms and conditions
of this Agreement shall be binding upon and shall inure to the
benefit of the parties hereto and their respective transferees,
successors and assigns; provided, however, that this Agreement
and all rights, privileges, duties and obligations of the parties
hereto may not be assigned or delegated by any party hereto,
without the consent of the other party, which consent shall not
be unreasonably withheld, and any such attempted assignment or
delegation shall be null and void.
14.5 COUNTERPARTS. This Agreement and any exhibit
hereto may be executed in one or more counterparts, all of which,
taken together, shall constitute one original document and shall
become effective when one or more counterparts have been signed
by the appropriate parties and delivered to each party hereto.
14.6 EFFECT OF REPRESENTATIONS AND WARRANTIES. The
representations and warranties contained in this Agreement or in
any List shall terminate immediately after the Effective Time of
the Merger.
14.7 THIRD PARTIES. Each party hereto intends that
this Agreement shall not benefit or create any right or cause of
action to any person other than parties hereto. As used in this
Agreement the term "parties" shall refer only to Mission or CFAC
as the context may require.
14.8 LISTS; EXHIBITS; INTEGRATION. Each List, exhibit
and letter delivered pursuant to this Agreement shall be in
writing and shall constitute a part of the Agreement, although
Lists and letters need not be attached to each copy of this
Agreement. This Agreement, together with such Lists, exhibits
and letters, constitutes the entire agreement between the parties
pertaining to the subject matter hereof and supersedes all prior
agreements and understandings of the parties in connection
therewith.
14.9 KNOWLEDGE. Whenever any statement herein or in
any List, certificate or other document delivered to any party
pursuant to this Agreement is made "to the knowledge" of any
party or another Person, such knowledge shall mean facts and
other information which any director, person with the title
and/or responsibilities of a vice president or above, or
controller knows as a result of the performance of his or her
duties, or that an executive officer of a corporation similar to
such party with similar duties reasonably should know in the
normal course of his or her duties, and includes such diligent
inquiry as is reasonable under the circumstances.
14.10 FURNISHED. Whenever any information pertaining
to one party is referred to herein as being "furnished" to
another party, this shall mean that the information has either
been delivered to the appropriate party or reasonably made
available at the main office of the furnishing party to the
appropriate party.
14.11 GOVERNING LAW. This Agreement is made and
entered into in the State of California, and, except to the
extent that the provisions of federal law are mandatorily
applicable, the laws of the State of California shall govern the
validity and interpretation hereof and the performance of the
parties hereto of their respective duties and obligations
hereunder.
14.12 DISPUTE RESOLUTION. In the event of any
dispute, claim, question or disagreement arising from or relating
to this Agreement, including the exhibits hereto, or the breach
thereof, the parties hereto shall use their best efforts to
settle the dispute, claim, question or disagreement in the
following order and manner:
(a) Negotiation. Senior management of the
parties hereto shall consult and negotiate with each other in
good faith and, recognizing their mutual interests, attempt to
reach a just and equitable solution satisfactory to both parties.
If they do not reach such a solution within a period of 15 days
from written notice by either party that the period of
consultation and negotiation, for purposes of this Section, has
begun, then, upon written notice by either party to the other,
the matter will be submitted to mediation as set forth below.
(b) Mediation/Arbitration. If any dispute,
claim, question or disagreement arising out of or relating to
this Agreement, or the breach thereof, cannot be settled through
negotiation, the parties hereto agree first to try in good faith
to settle the dispute by mediation administered by a retired
judge with at least seven years judicial experience from the
Judicial Arbitration and Mediation Society ("J.A.M.S./Endispute")
under its mediation rules before resorting to arbitration.
Thereafter, any unresolved claim, question or disagreement
arising out of or relating to this Agreement or breach thereof
shall be finally settled, as soon as possible thereafter, by
arbitration administered by a retired judge with at least seven
years judicial experience from J.A.M.S./Endispute in accordance
with its arbitration rules and judgment on the award rendered by
the arbitrator may be entered in any court having jurisdiction
thereof. The mediation or arbitration, as the case may be, shall
be held in the County of Los Angeles, California, or at any other
place that may be mutually agreed upon by the parties hereto.
(c) Mediator/Arbitrator Selection. In the
event that mediation or arbitration is necessary with respect to any
dispute, claim, question or disagreement arising out of or
relating to the preparation of the Cash Certificate required by
Section 2.4 above, the mediator or arbitrator, as the case may
be, shall be a certified public accountant employed or formerly
employed by an independent accounting firm of national standing
and with experience in the valuation of banks or savings and
loans.
(d) Governing Law. In rendering any award, the
mediator or arbitrator as the case may be, shall determine the
rights and obligations of the parties according to the
substantive and procedural laws of the State of California.
(e) Rights and Remedies. Except as otherwise
provided in this Agreement, each of the parties to this Agreement
shall have available to them all rights and remedies in law or
equity.
14.13 CAPTIONS. The captions contained in this
Agreement are for convenience of reference only and do not form a
part of this Agreement and shall not affect the interpretation
hereof.
14.14 SEVERABILITY. If any portion of this Agreement
shall be deemed by a court of competent jurisdiction to be
unenforceable, the remaining portions shall be valid and
enforceable only if, after excluding the portion deemed to be
unenforceable, the remaining terms hereof shall provide for the
consummation of the transactions contemplated herein in
substantially the same manner as originally set forth at the date
this Agreement was executed.
14.15 WAIVER AND MODIFICATION; AMENDMENT. No waiver
of any term, provision or condition of this Agreement, whether by
conduct or otherwise, in any one or more instances, shall be
deemed to be or construed as a further or continuing waiver of
any such term, provision or condition of this Agreement. Except
as otherwise required by law, this Agreement and the Agreement of
Merger, when executed and delivered, may be modified or amended
by action of the Boards of Directors of Mission and CFAC without
action by their respective stockholders. This Agreement may be
modified or amended only by an instrument of equal formality
signed by the parties or their duly authorized agents.
14.16 ATTORNEYS' FEES. If any mediation is brought for
the enforcement of this Agreement or because of an alleged
dispute, controversy, breach, or default in connection with this
Agreement, each party shall pay its own attorneys' fees and other
costs and expenses incurred in that action or proceeding.
If any arbitration is brought for the enforcement of
this Agreement or because of an alleged dispute, controversy,
breach, or default in connection with this Agreement, the
prevailing party shall be entitled to recover reasonable
attorneys' fees and other costs and expenses incurred in that
action or proceeding, in addition to any other relief to which it
may be entitled.
IN WITNESS WHEREOF, the parties to this Agreement have
duly executed this Agreement as of the day and year first above
written.
CENTRAL FINANCIAL ACCEPTANCE CORPORATION
By: /s/ GARY CYPRES
-----------------------
Chairman and Chief Executive Officer
MISSION SAVINGS AND LOAN
ASSOCIATION, A FEDERAL ASSOCIATION
By: /s/ DONAVON TERNES
------------------------
President and Chief Executive
Officer
<PAGE>
EXHIBIT LIST
A AGREEMENT OF BANK MERGER
B FORM OF OPINION OF COUNSEL FOR CFAC
C FORM OF OPINION OF COUNSEL FOR MISSION
D FORM OF SHAREHOLDER'S AGREEMENT
E FORM OF EMPLOYMENT AGREEMENT
<PAGE>
EXHIBIT A
AGREEMENT OF BANK MERGER
This Agreement of Bank Merger is made by and between Mission
Savings and Loan Association ("Mission") and Interim Mission Savings Bank, FSB
("Interim") and is made pursuant to the terms of that Agreement and Plan of
Reorganization, dated as of February 11, 1998, by and between, Central
Financial Acceptance Corporation and Mission (the "Reorganization Agreement").
Terms not otherwise defined herein shall have the meaning given them in the
Reorganization Agreement.
As of the date hereof, Mission has authorized capital of
____ shares of common stock, $8 par value (the "Mission Stock"). As of the
date hereof, _____ shares of Mission Stock are issued and outstanding. As of
the date hereof, Interim has authorized capital stock of ____ shares common
stock, par value $__ per share ("Interim Stock") of which _____ shares are
issued and outstanding.
Interim and Mission hereby agree as follows:
1. MERGER. At and on the Effective Time of the Merger, Interim shall be
merged with and into Mission in accordance with the terms hereof. Mission, as
the institution surviving the Merger, shall be the "Surviving Bank."
2. EFFECTIVE TIME. The Effective Time of the Merger ("Effective Time")
shall be the date the articles of combination, prepared pursuant to Section
552.13 of the OTS Regulations, are endorsed by the Office of Thrift
Supervision (the "OTS") or such later date specified in such articles, which
shall be after approval of the Merger by the OTS.
3. NAME. The name of the Surviving Bank shall continue to be "Mission
Savings and Loan Association, a Federal Association."
4. DIRECTORS AND PRINCIPAL OFFICERS. The directors and principal
officers of Interim immediately prior to the Effective Time of the Merger
shall continue to serve as directors and principal officers of the Surviving
Bank after the Effective Time of the Merger, except that the President of
Mission shall serve as the President of the Surviving Bank. Mission, as the
Surviving Bank, shall have ____ directors. The name, residential address and
term of each director is set forth below:
Term
Name Residential Address Expires
- ------- ------------------------ ----------
5. OFFICES. The location of the home office of the Surviving Bank shall
continue to be Riverside, California, and the offices of the Surviving Bank
shall be:
Address City or Town State Zip Code
- ---------- ---------------- ------- ------------
[Mission]
6. TERMS AND CONDITIONS OF MERGER.
At the Effective Time of the Merger:
(a) Each share of Mission Stock outstanding
immediately prior to the Effective Time of the Merger shall, at the Effective
Time of the Merger, other than Perfected Dissenting Shares, be canceled and be
converted into the right to receive the Per Share Price. Perfected Dissenting
Shares will not be canceled and converted into the right to receive the Per
Share Price, but rather, will be canceled and converted into the right to
receive the payment provided for in 12 C.F.R. Section 552.14 of the OTS
Regulations.
(b) Each share of Interim Stock issued and
outstanding immediately prior to the Effective Time of the Merger shall, on
and after the Effective Time of the Merger, continue to be issued and
outstanding as an identical share of common stock of the Surviving Bank.
7. CHARTER AND BYLAWS. At and after the Effective Time of the Merger,
the Charter and Bylaws of Mission as in effect immediately prior to the
Effective Time of the Merger shall continue to be the Charter and Bylaws of
the Surviving Bank until amended in accordance with law, except that [insert
amendments to Charter and Bylaws of Mission].
8. RIGHTS AND DUTIES OF THE SURVIVING BANK. At the Effective Time of the
Merger, Interim shall be merged with and into Mission, which, as the Surviving
Bank, shall be the same association as Interim. The business of the Surviving
Bank shall be that of a federal savings bank chartered under the laws of the
United States and as provided for in the Charter of Interim as now existing,
the business of which shall be continued at its head office and at its legally
established branches and other offices. All assets, rights, privileges,
powers, franchises and property (real, personal and mixed) shall be
automatically transferred to and vested in the Surviving Bank by virtue of the
Merger without any deed or other document of transfer. The Surviving Bank,
without any order or action on the part of any court or otherwise and without
any documents of assumption or assignment, shall hold and enjoy all of the
properties, franchises and interests, including appointments, powers,
designations, nominations and all other rights and interest as agent or other
fiduciary in the same manner and to the same extent as such rights, franchises
and interest and powers were held or enjoyed by Interim and Mission,
respectively. The Surviving Bank shall be responsible for all the liabilities
of every kind and description of both Interim and Mission immediately prior to
the Effective Time of the Merger, including liabilities for all debts, savings
accounts, deposit obligations, and contracts of Interim and Mission,
respectively, matured or unmatured, whether accrued, absolute, contingent or
otherwise and whether or not reflected or reserved against on balance sheets,
books or accounts or records of either Interim or Mission. All rights of
creditors and other obligees and all liens on property of either Interim or
Mission shall be preserved and shall not be released or impaired.
9. EXECUTION. This Agreement of Merger may be executed in any number of
counterparts each of which shall be deemed an original and all of such
counterparts shall constitute one and the same instrument.
Dated as of ________________, 1998.
INTERIM MISSION SAVINGS BANK, FSB
By: _________________________________
Chairman and Chief Executive Officer
By: _________________________________
Secretary
MISSION SAVINGS AND LOAN ASSOCIATION, A FEDERAL ASSOCIATION
By: _________________________________
President and Chief Executive Officer
By: _______________________________
Secretary
<PAGE>
EXHIBIT B
FORM OF OPINION OF COUNSEL OF CFAC
The opinion of counsel required by Section 10.1 of the
Agreement and Plan of Reorganization ("Agreement") shall be dated as of the
Closing Date, shall be in form and substance reasonably satisfactory to
Mission, and shall contain opinions substantially in the form set forth below.
(All capitalized terms not otherwise defined herein have the meaning specified
in the Purchase Agreement).
1. CFAC is duly incorporated, validly existing and in good
standing under the laws of the State of Delaware.
2. The execution and delivery by CFAC of the Agreement, and
the consummation of the transactions contemplated thereby, have been duly and
validly authorized by all necessary corporate action on the part of CFAC.
The Agreement constitutes a valid and binding obligation of CFAC, enforceable
in accordance with its terms, except as the enforceability thereof may be
limited by: (i) bankruptcy, liquidation, receivership, conservatorship,
insolvency, fraudulent conveyance, moratorium or other similar laws affecting
the rights of creditors generally; or (ii) general equitable principles.
3. All consents and approvals of Governmental Entities under
federal law required to be obtained by CFAC in order to permit the
transactions contemplated by the Agreement have been obtained.
In rendering our opinion, we may rely, to the extent that
we deem reliance necessary or appropriate, as to matters of fact, upon
certificates of government officials and of any officer or officers of CFAC.
The opinion need refer only to matters of federal law, and we may expressly
exclude any opinions as to choice of law matters, antitrust matters and
securities law matters and may add other qualifications and explanations of
the basis of our opinion as may be reasonably acceptable to Mission.
<PAGE>
EXHIBIT C
FORM OF OPINION OF COUNSEL OF MISSION
The opinion of counsel required by Section 11.1 of the
Agreement and Plan of Reorganization (the "Agreement") shall be
dated as of the Closing Date, shall be in form and substance
reasonably satisfactory to CFAC, and shall contain opinions
substantially in the form set forth below. (All capitalized
terms not otherwise defined herein have the meaning specified in
the Agreement).
1. Mission is a federal stock savings bank, duly organized,
validly existing and in good standing as a federal stock savings
bank chartered under Section 5 of HOLA and is authorized by the
OTS to conduct a federal savings bank business. The deposits of
Mission are insured by the FDIC in the manner and to the extent
provided by law.
2. Mission has all necessary corporate power to own or lease
its properties and assets, and to carry on its business as now
conducted. Neither the scope of the business of Mission nor the
location of any of its properties requires that it be licensed to
do business in any jurisdiction other than the State of
California.
3. The authorized capital of Mission consists of ______ shares
of Mission Stock, of which ________ shares are outstanding. All
of the shares of Mission Stock are validly issued, fully paid and
nonassessable. The outstanding shares of Mission Stock
constitute all of the issued and outstanding capital stock of
Mission. There are no outstanding options, warrants or other
rights in or with respect to the unissued shares of Mission Stock
or any other securities convertible into Mission Stock, and
Mission is not obligated to issue any additional shares of
Mission Stock or any options, warrants or other rights in or with
respect to the unissued shares of such stock or securities
convertible into such stock.
4. The execution and delivery by Mission of the Agreement and
the consummation of the transactions contemplated thereby, have
been duly and validly authorized by all necessary action on the
part of Mission. The Agreement constitutes a valid and binding
obligation of Mission enforceable in accordance with its terms,
except as the enforceability thereof may be limited by: (i)
bankruptcy, liquidation, receivership, conservatorship,
insolvency, fraudulent conveyance, moratorium or other similar
laws affecting the rights of creditors generally; (ii) general
equitable principles; or (iii) Section 8(b)(6)(D) of the Federal
Deposit Insurance Act, 12 U.S.C. Section 1818(b)(6)(D).
5. Neither the execution and delivery by Mission of the
Agreement, nor the consummation of the transactions contemplated thereby, nor
compliance by Mission with any of the provisions
thereof, will conflict with or result in the breach of, or
default under: (i) any provision of the Federal Stock Charter or
bylaws of Mission; or (ii) any material agreement, instrument or
obligation known to such counsel to which Mission is a party or
by which any of the properties or assets of Mission are bound.
6. All consents and approvals of Governmental Entities under
federal law, and all requisite stockholder approval, required to
be obtained by Mission in order to permit the consummation by it
of the transactions contemplated by the Agreement have been
obtained.
7. Except as disclosed in the Lists to the Agreement or
otherwise disclosed herein, to the best of our knowledge, there
are no actions, suits or proceedings pending or, to the best of
our knowledge, threatened against Mission or affecting any of the
property of Mission before any court or arbitration tribunal or
before or by any Governmental Entity or body questioning or
affecting the transactions contemplated by the Agreement that
would have a material adverse effect on Mission or the
transactions contemplated in the Agreement.
8. The Proxy Statement for use at the shareholders' meeting
required pursuant to Section 6.7 of the Agreement, as of the date
of mailing and the date of the shareholders' meeting, complied as
to form in all material respects with the requirements of the
Securities Exchange Act of 1934, as amended, and all applicable
rules and regulations.
Counsel shall further state that although counsel has
necessarily assumed the correctness and completeness of the
statements made by Mission in the Proxy Statement and takes no
responsibility therefor, such counsel has, in the course of the
preparation of the Proxy Statement, had conferences with
representatives of Mission with respect thereto, and that its
examination of the Proxy Statement and its discussions in the
above-mentioned conferences did not disclose to it any
information which has caused such counsel to believe that the
Proxy Statement at the time of mailing and at the time of the
meeting of Mission's shareholders contained any untrue statement
of a material fact or omitted to state a material fact necessary
to make the statements therein not misleading (except that such
counsel need express no belief or opinion as to financial
statements, including any notes thereto, or other financial or
statistical data or as to any information supplied by CFAC).
In rendering its opinion, such counsel may rely, to the
extent that such counsel deems reliance necessary or appropriate,
as to matters of fact, upon certificates of government officials
and of any officer or officers of Mission's registrar and
transfer agent. The opinion need refer only to matters of
federal law, and such counsel may expressly exclude any opinions
as to Section 14.2 of the Agreement (relating to liquidated damages), choice
of law matters, antitrust matters and (except as
set forth in paragraph 11) securities law matters and may add
other qualifications and explanations of the basis of its opinion
as may be reasonably acceptable to CFAC.
<PAGE>
EXHIBIT D
SHAREHOLDER'S AGREEMENT
This SHAREHOLDER'S AGREEMENT (this "Agreement"), dated as of
February __, 1998, is entered into by and between Central Financial Acceptance
Corporation, a Delaware corporation ("CFAC"), and ___________________________
(the "Shareholder").
R E C I T A L S
1. CFAC and Mission Savings and Loan Association, a Federal Association
("Mission") entered into that certain Agreement and Plan of Reorganization
dated as of February 11, 1998 (the "Reorganization Agreement").
2. The Shareholder is a beneficial shareholder of shares of the common
stock, $8 stated value, of Mission ("Mission Stock").
3. As an inducement to CFAC to enter into the Reorganization Agreement,
the Shareholder desires to enter into this Agreement.
4. Unless otherwise provided in this Agreement, capitalized terms shall
have the meanings ascribed to such terms in the Reorganization Agreement.
NOW THEREFORE, in consideration of the premises and of the respective
representations, warranties and covenants, agreements and conditions contained
herein and in the Reorganization Agreement, and intending to be legally bound
hereby, CFAC and Shareholder agree as follows:
ARTICLE I
SHAREHOLDER'S AGREEMENT
1.1 AGREEMENT TO VOTE. From the date hereof until the
termination of the Reorganization Agreement in accordance with its terms, the
Shareholder shall vote or cause to be voted at any meeting of shareholders of
Mission to approve the principal terms of the Reorganization Agreement, the
Merger and the transactions contemplated thereby (the "Shareholders'
Meeting"), all of the shares of Mission Stock as to which Shareholder has sole
or shared voting power (the "Shares") as of the record date established to
determine shareholders who have the right to vote at any such Shareholders'
Meeting (the "Record Date") "FOR" the Agreement, the Merger and the
transactions contemplated thereby.
1.2 LEGEND. The Shareholder agrees to stamp, print or type (or
to cause the stamping, printing or typing) on the face of his certificates of
Mission Stock evidencing the Shares the following legend:
"THE VOTING, SALE, ASSIGNMENT, TRANSFER,
PLEDGE, HYPOTHECATION OR OTHER ENCUMBRANCE
OR DISPOSITION OF THE SHARES REPRESENTED BY THIS
CERTIFICATE IS SUBJECT TO A SHAREHOLDER'S
AGREEMENT DATED AS OF THE __TH DAY OF ____, 1997
BY AND BETWEEN CENTRAL FINANCIAL ACCEPTANCE
CORPORATION AND (THE RECORD OWNER HEREOF),
COPIES OF WHICH ARE ON FILE AT THE OFFICES OF
MISSION SAVINGS AND LOAN ASSOCIATION."
1.3 RESTRICTIONS ON DISPOSITIONS. The Shareholder agrees that,
from and after the date of this Agreement and during the term of this
Agreement, the shareholder will not take any action that will alter or affect
in any way the right to vote the Shares, except (i) with the prior written
consent of CFAC or (ii) to change such right from that of a shared right of the
Shareholder to vote the Shares to a sole right of the Shareholder to vote the
Shares.
1.4 SHAREHOLDER APPROVAL. The Shareholder, if a member of the
Board of Directors of Mission, shall (i) recommend shareholder approval of the
Reorganization Agreement, the Merger and the transactions contemplated thereby
by the Mission shareholders at the Shareholders' Meeting and (ii) advise the
Mission shareholders to reject any subsequent proposal or offer received by
Mission relating to any Competing Transaction or purchase, sale, acquisition,
merger or other form of business combination involving Mission or any of their
respective assets, equity securities or debt securities and to proceed with
the transactions contemplated by the Reorganization Agreement; provided,
however, that the Shareholder shall not be obligated to take any action
specified in clause (i) or (ii) if the Board of Directors of Mission is
advised in writing by outside legal counsel (Adams, McAndrews, Matson and
Landsberg, or such other counsel that is reasonably acceptable to CFAC) that
doing any act pursuant to clause (i) or (ii) is inconsistent with the
continuing fiduciary duties of said Shareholder to the stockholders of Mission.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF SHAREHOLDER
The Shareholder represents and warrants to CFAC that the statements
set forth below are true and correct as of the date of this Agreement, except
those that are specifically as of a different date:
2.1 OWNERSHIP AND RELATED MATTERS.
1. Schedule 2.1(a) hereto correctly sets forth the
number of Shares and the nature of Shareholder's voting power with respect
thereto. Within five Business Days after the Record Date, the Shareholder
shall amend said Schedule 2.1(a) to correctly reflect the number of Shares and
the nature of Shareholder's voting power with respect thereto as of the Record
Date.
2. Except as set forth in Schedule 2.1(b), there are
no proxies, voting trusts or other agreements or understandings to or by which
the Shareholder or the Shareholder's spouse is a party or bound or that
expressly requires that any of the Shares be voted in any specific manner
other than as provided in this Agreement.
3. AUTHORIZATION AND BINDING AGREEMENT. The
Shareholder has the legal right, power, capacity and authority to execute,
deliver and perform this Agreement, and this Agreement is the valid and
binding obligation of the Shareholder enforceable in accordance with its
terms, except as the enforcement thereof may be limited by general principles
of equity.
4. NONCONTRAVENTION. The execution, delivery and
performance of this Agreement by the Shareholder will not (a) conflict with or
result in the breach of, or default or actual or potential loss of any benefit
under, any provision of any agreement, instrument or obligation to which the
Shareholder or the Shareholder's spouse is a party or by which any of the
Shareholder's properties or the Shareholder's spouse's properties are bound,
or give any other party to any such agreement, instrument or obligation a
right to terminate or modify any term thereof; (b) require any consent of any
Person which has not previously been obtained; (c) result in the creation or
imposition of any Encumbrance on any of the Shares or any other assets of the
Shareholder or the Shareholder's spouse; or (d) violate any statute or law,
judgment, decree, injunction, order, regulation or rule of any Governmental
Entity to which the Shareholder or the Shareholder's spouse is subject.
ARTICLE III
GENERAL
3.1 AMENDMENTS. To the fullest extent permitted by law, this
Agreement and any schedule or exhibit attached hereto may be amended by
agreement in writing of the parties hereto at any time.
3.2 INTEGRATION. This Agreement constitutes the entire
agreement between the parties pertaining to the subject matter hereof and
(except for other documents to be executed pursuant to the Agreement)
supersedes all prior agreements and understandings of the parties in
connection therewith.
3.3 TERMINATION. This Agreement shall terminate automatically
without further action at the earlier of the Effective Time of the Merger or
the termination of the Reorganization Agreement in accordance with its terms.
Upon such termination of this Agreement, the parties shall have no further
obligation or liability to one another, except in respect of a wilful and
material failure in the performance of any such party's agreements, covenants
and obligations hereunder.
3.4 NO ASSIGNMENT. Neither this Agreement nor any rights,
duties or obligations hereunder shall be assignable by CFAC or the
Shareholder, in whole or in part. Any attempted assignment in violation of
this prohibition shall be null and void. Subject to the foregoing, all of the
terms and provisions hereof shall be binding upon, and inure to the benefit
of, the successors of the parties hereto.
3.5 HEADINGS. The descriptive headings of the several Articles
and Sections of this Agreement are inserted for convenience only and do not
constitute a part of this Agreement.
3.6 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, all of which shall be considered one and the same agreement and
shall become effective when one or more counterparts have been signed by each
party hereto and delivered to each party hereto.
3.7 NOTICES. Any notice or communication required or permitted
hereunder, shall be deemed to have been given if in writing and (a) delivered
in person, (b) delivered by confirmed facsimile transmission, (c) sent by
overnight carrier, postage prepaid with return receipt requested, or (d)
mailed by certified or registered mail, postage prepaid with return receipt
requested, addressed as follows:
If to CFAC, addressed to:
5480 East Ferguson Drive
Commerce, California 90022
Attention: Gary Cypres
Facsimile Number: (213) 720-8647
With a copy addressed to:
Manatt, Phelps & Phillips, LLP
11355 West Olympic Blvd.
Los Angeles, CA 90064
Attention: William T. Quicksilver
Telecopier No: (310) 312-4224
If to Shareholder, addressed to:
____________________________
____________________________
____________________________
____________________________
With a copy addressed to:
Adams, McAndrews, Matson & Landsberg
420 Santa Monica Boulevard, Suite 550
Santa Monica, California 90401
Attention: Peter F. McAndrews
Telephone Number: 310-260-8760
Facsimile Number: 310-451-3858
or at such other address and to the attention of such other person as a party
may notice to the others in accordance with this Section 3.7. Any such
notice or communication shall be deemed received on the date delivered
personally or delivered by confirmed facsimile transmission, on the first
Business Day after it was sent by overnight carrier, postage prepaid with
return receipt requested or on the third Business Day after it was sent by
certified or registered mail, postage prepaid with return receipt requested.
3.8 GOVERNING LAW. This Agreement shall be governed by, and
interpreted in accordance with, the laws of the State of California applicable
to contracts between California parties made and performed in such State.
3.9 SEVERABILITY. If any provision of this Agreement shall be
held by a court of competent jurisdiction to be unreasonable as to duration,
activity or subject, it shall be deemed to extend only over the maximum
duration, range of activities or subjects as to which such provision shall be
valid and enforceable under applicable law. If any provisions shall, for any
reason, be held by a court of competent jurisdiction to be invalid, illegal or
unenforceable, such invalidity, illegality or unenforceability shall not
affect any other provision of this Agreement, but this Agreement shall be
construed as if such invalid, illegal or unenforceable provision had
never been contained herein.
3.10 WAIVER OF BREACH. Any failure or delay by CFAC in enforcing
any provision of this Agreement shall not operate as a waiver of this
Agreement. The waiver by CFAC of a breach of any provision of this Agreement
shall not operate as a waiver of this Agreement. The waiver by CFAC of a
breach of any provision of this Agreement by the Shareholder shall not operate
or be construed as a waiver of any subsequent breach or violation
thereof. All waivers shall be in writing and signed by the party to be bound.
IN WITNESS WHEREOF, the parties to this Agreement have caused and
duly executed this Agreement as of the day and year first above written.
CENTRAL FINANCIAL ACCEPTANCE
CORPORATION
By:_________________________________
Title:_______________________________
SHAREHOLDER
____________________________________
(Shareholder's Name)
SPOUSAL CONSENT
I am the spouse of __________________, the Shareholder in
the above Agreement. I understand that I may consult independent legal
counsel as to the effect of this Agreement and the consequences of my
execution of this Agreement and, to the extent I felt it necessary, I have
discussed it with legal counsel. I hereby confirm this Agreement and agree
that it shall bind my interest in the Shares, if any.
____________________________________
(Shareholder's Spouse's Name)
<PAGE>
EXHIBIT E
EMPLOYMENT AGREEMENT
This Employment Agreement ("Agreement") is made and entered
into as of this 11th day of February, 1998 by and between Mission Savings and
Loan Association, a Federal Association ("Mission"), and Donavon P. Ternes
("Executive"), with reference to the following:
A. Mission desires to employ Executive as the
President of Mission effective on the date (the "Effective Date") of the
consummation of the transactions contemplated by that certain Agreement and
Plan of Reorganization by and between Mission and Central Financial Acceptance
Corporation, a Delaware corporation ("CFAC"), dated as of February 11, 1998
(the "Reorganization Agreement"), and Executive desires to accept employment
with Mission in such capacity.
B. The parties are willing to enter into an agreement
providing for such employment upon the terms and conditions hereinafter set
forth which will replace the agreement between Mission and Executive dated as
of April 1, 1996, and any other written or oral understandings between Mission
and Executive.
NOW, THEREFORE, IN CONSIDERATION OF the recitals set forth
above and the mutual promises, covenants, agreements, conditions and
undertakings hereinafter set forth, the adequacy and receipt of which
consideration is hereby acknowledged, the parties hereto agree as follows:
1. TERM. This Agreement shall have a term of three (3) years,
commencing as of the Effective Date set forth above (the "Term"). Where
used herein, "Term" shall refer to the entire period of employment of
Executive by Mission from and after the Effective Date of this Agreement,
whether for the period provided above and as terminated earlier as hereinafter
provided.
2. DUTIES. Executive shall hold the office of President of Mission and
perform the duties customarily performed by such officer of a savings
institution, including the general supervision and operation of the business
and affairs of Mission, and reporting to the applicable regulatory authorities
regarding the activities of Mission, subject to the direction of and the
powers vested by law in the Board of Directors of Mission (the "Board") and
Mission's shareholders. During the Term hereof, Executive shall perform the
services herein contemplated to be performed by Executive faithfully,
diligently and to the best of Executive's ability in compliance with
instructions and policies of the Board, Mission's Federal Charter and Bylaws
and with all applicable laws and regulations. During the Term of this
Agreement, Executive shall also serve as a member of the Board, if elected by
Mission's shareholders, and shall faithfully, diligently and to the best of
Executive's ability perform the services of a director of Mission. While an
employee and a director of Mission, Executive shall not be entitled to any
retainer or Board fees paid for attendance at Board or Board committee meetings.
3. COMPENSATION.
(a) BASE SALARY. For Executive's services rendered
hereunder, during the Term hereof, Mission shall pay or cause to be paid a
base salary to Executive at the rate of One Hundred Two Thousand Dollars
($102,000) per annum, payable in conformity with Mission's normal payroll
periods and procedures.
(b) BONUS. In addition to Executive's base salary
provided for under Section 3(a) above, and subject to the Board's annual
review of Executive's performance and compensation as provided for in Section
7 below, the Board shall consider a bonus and incentive compensation for
Executive based upon Executive's performance during the completed fiscal year
and the overall financial performance of Mission. The Board may award
Executive bonuses and incentive compensation based upon such consideration.
However, the Board shall not be obligated in any way whatsoever to grant such
bonuses or incentive compensation.
(c) AUTOMOBILE ALLOWANCE. Mission shall provide
Executive during the Term of this Agreement with an automobile allowance of
four hundred dollars ($400) per month.
4. VACATION AND SICK LEAVE. During the Term hereof, Executive shall be
entitled to paid vacation and paid sick leave, the amount and term of which
shall be determined in accordance with the policies of Mission as in effect
from time to time.
5. GROUP MEDICAL, DISABILITY INSURANCE AND OTHER BENEFITS.
Executive shall be entitled to participate in medical insurance, disability
insurance and other employee benefits, the amount, extent and scope of which
shall be determined in accordance with the policies of Mission as in effect
from time to time.
6. BUSINESS EXPENSES. Executive shall be entitled to reimbursement by
Mission for any and all ordinary and necessary business expenses reasonably
incurred by Executive in the performance of Executive's duties and in acting
for Mission during the Term of this Agreement, provided that Executive
furnishes to Mission, for review and approval by the Chairman of the Board,
adequate records and other documentation as may be required for the
substantiation of such expenditures as a business expense of Mission.
7. TERMINATION.
(a) TERMINATION FOR CAUSE. The Board may terminate
Executive's employment for cause at any time during the Term of this
Agreement. In such event, all rights of Executive under this Agreement shall
terminate and Executive shall have no right to receive compensation or other
benefits for any period after the effective date of such termination for
cause. Termination for cause shall be defined as Executive's personal
dishonesty, willful misconduct, breach of fiduciary duty involving personal
profit, continuing intentional or habitual failure to perform stated duties,
violation of any law (other than minor traffic violations or similar
misdemeanor offenses), rule or regulation adopted by the Office of Thrift
Supervision, Federal Deposit Insurance Corporation or other regulatory agency
with jurisdiction over Mission or material breach of any provision of this
Agreement.
(b) TERMINATION WITHOUT CAUSE. The Board may terminate
Executive's employment without cause at any time during the Term of this
Agreement. In such event, Executive shall be entitled to receive as his sole
and exclusive remedy a severance payment equal to one (1) year of Executive's
base salary, as provided for in Section 3(a) of this Agreement, less any
amounts required to be deducted by Mission for federal and state taxes or
other applicable requirements. For purposes of this Agreement, a termination
of the employment of Executive without cause shall also consist of termination
of employment, or written resignation by Executive, following a material,
involuntary reduction in Executive's responsibilities as an employee of Mission.
The severance payment hereunder shall be paid in a lump sum
to Executive upon the termination of this Agreement. In the event a
severance payment is paid to Executive under this Section 7(b), this
Agreement shall be terminated and Mission shall have no further obligation to
Executive under this Agreement, including, without limitation, any
compensation or other obligations under Section 3 hereof. The parties hereto
expressly acknowledge and agree that the payment made by Mission to Executive
hereunder will constitute full, reasonable and adequate compensation for any
such termination, and that such payment shall fully satisfy and discharge all
obligations of Mission to Executive in connection with such termination.
(c) TERMINATION BY NOTICE. For purposes of this
Agreement, a termination of the employment of Executive shall consist of 30
days written notice from Mission to Executive of termination of employment.
(d) COMPLIANCE WITH LAW AND REGULATION. The parties
hereto expressly acknowledge and agree that any payments made to Executive
pursuant to this Agreement or otherwise are subject to and conditioned upon
compliance with 12 U.S.C. Section 1828(k) and any regulations promulgated
thereunder.
(e) SUSPENSION AND REMOVAL ORDERS. If Executive is
suspended and/or temporarily prohibited from participating in the conduct of
Mission's affairs by notice served under Section 8(e)(3) or 8(g)(1) of the
Federal Deposit Insurance Act (12 U.S.C. Section 1818(e)(3) and (g)(1)),
Mission's obligations under this Agreement shall be suspended as of the date
of service, unless stayed by appropriate proceedings. If the charges in the
notice are dismissed, Mission may in its discretion: (i) pay Executive all or
part of the compensation withheld while its obligations under this Agreement
were suspended; and (ii) reinstate (in whole or in part) any of its
obligations which were suspended. If Executive is removed and/or permanently
prohibited from participating in the conduct of Mission's affairs by an order
issued under Section 8(e)(3) or 8(g)(1) of the Federal Deposit Insurance Act
(12 U.S.C. Section 1818(e)(3) or (g)(1)), all obligations of Mission under
this Agreement shall terminate as of the effective date of the order, but
vested rights of the parties shall not be affected.
(f) TERMINATION BY DEFAULT. If Mission is in default
(as defined in Section 3(x)(1) of the Federal Deposit Insurance Act (12
U.S.C. Section 1813(x)(1)), all obligations under this Agreement shall
terminate as of the date of default, but vested rights of the parties shall
not be affected.
(g) SUPERVISORY ASSISTANCE OR MERGER. All obligations
under this Agreement shall be terminated, except to the extent that it is
determined that continuation of the Agreement is necessary for the continued
operation of Mission: (i) by the Director of the Office of Thrift Supervision
(the "Director") or his or her designee, at the time that the Federal Deposit
Insurance Corporation enters into an agreement to provide assistance to or on
behalf of Mission under the authority contained in Section 11 of the Federal
Deposit Insurance Act (12 U.S.C. Section 1821); or (ii) by the Director or
his or her designee, at the time that the Director or his or her designee
approves a supervisory merger to resolve problems related to the operation of
Mission or when Mission is in an unsafe or unsound condition. All rights of
the parties that have already vested, however, shall not be affected by
such action.
(h) DISABILITY. In the event that Executive shall
fail, because of illness, incapacity or injury, to render the services
contemplated by this Agreement for three (3) consecutive calendar months, or
for shorter periods aggregating four (4) months in any twelve (12) month
period, Executive's employment hereunder may be terminated by written notice
from Mission to Executive. In the event that Executive's employment is
terminated under this Section 7(i), Executive shall receive the difference
between any disability payments provided by Mission's insurance plans and his
base salary as set forth in Section 3(a) hereof, for the remaining Term of
this Agreement, plus the amount of any bonus compensation payable to
Executive under Section 3(b) hereof, prorated through the date of termination,
up to a maximum amount of one year's base salary. Such termination shall
not affect any rights which Executive may have pursuant to any insurance or
other death benefit plans or arrangements of Mission.
(i) DEATH. If Executive's employment is terminated by
reason of Executive's death, this Agreement shall terminate without further
obligations of Mission to Executive (or Executive's heirs or legal
representatives) under this Agreement, other than for payment of:
(i) Executive's base salary (as set forth in Section 3(a) hereof) through the
date of termination; (ii) the amount of any bonus compensation payable to
Executive under Section 3(b) above, prorated through the date of termination;
(iii) any compensation previously deferred by Executive; (iv) any accrued
vacation and/or sick leave pay; and (v) any amounts due pursuant to the terms
of any applicable benefit plan. All of the foregoing amounts shall be paid
to Executive's estate or beneficiary, as applicable, in a lump sum within
thirty (30) days after the date of termination or earlier as required by
applicable law.
8. DISCLOSURE OR USE OF TRADE SECRETS. During the Term hereof, Executive
will have access to and become acquainted with what Executive and Mission
acknowledge are trade secrets of Mission of any affiliate of Mission.
Executive shall not use or disclose any trade secrets or, directly or
indirectly, cause them to be used or disclosed in any manner, during the Term
hereof or for a period of one (1) year after the termination of this Agreement,
except as may be required or requested by Mission, by court order or under
applicable law or regulation.
9. RETURN OF DOCUMENTS. Executive expressly agrees that all manuals,
documents, files, reports, studies or other materials used and/or developed by
Executive for Mission during the Term of this Agreement or prior thereto while
Executive was employed by Mission are solely the property of Mission, and that
Executive has no right, title or interest therein. Upon termination of this
Agreement, Executive or Executive's representative shall promptly deliver
possession of all such materials (including any copies thereof) to Mission.
10. NOTICES. All notices, demands or other communications hereunder
shall be in writing and shall be deemed to have been duly given if delivered
in person, or sent by United States mail, certified or registered, with return
receipt requested, if to Executive, addressed to Executive at the last
residence address of Executive as shown in the records of Mission, and if to
Mission, addressed to the Chairman of the Board at Mission's principal office.
11. ARBITRATION. The parties agree if there is any controversy or claim
arising out of this Agreement or the breach hereof, including fraud in the
inducement, the matter shall be settled by arbitration. The matter shall be
settled exclusively by arbitration in accordance with the rules then in
effect of the Judicial Arbitration and Medication Service ("J.A.M.S"). in
the city of Commerce, California, as the same may be modified by the statutes
of California then in effect, by a single arbitrator who shall be a retired
judge with no less than seven years judicial experience. In case of any
failure of a party to make an appointment referred to above within two (2)
weeks after written notice of controversy, such appointment shall be made by
J.A.M.S. All arbitration proceedings shall be held in the City of Commerce,
California, and each party agrees to comply in all respects with any award
made in such proceeding and to the entry of a judgment in any jurisdiction
upon any award rendered in such proceeding. All costs and expenses of
arbitration (including costs of preparation therefor and reasonable attorneys'
fees incurred in connection therewith) of the party prevailing in such
arbitration shall be borne by the losing party to such arbitration, unless
otherwise directed by the arbitrators. Notwithstanding any provision of this
section herein set forth no party may make a request for arbitration hereunder
with respect to any matter at any time following the expiration of thirty (30)
days after notice of the filing of a legal action with respect to such matters
in a court of competent jurisdiction.
12. BENEFIT OF AGREEMENT. This Agreement shall be binding upon and shall
inure to the benefit of the parties hereto and their respective successors and
assigns; provided, however, that Executive may not assign any interest in this
Agreement without the prior written consent of Mission.
13. CAPTIONS. Captions and paragraph heading used in this Agreement are
for convenience only and shall not be used in interpreting or construing this
Agreement.
14. ENTIRE AGREEMENT. This Agreement contains the entire agreement of the
parties with respect to the employment of Executive by Mission, and it
expressly supersedes any and all other agreements, either oral or written,
relating thereto, including, without limitation, those employment agreements
between Executive and Mission dated April 1, 1996 and April 1, 1993.
15. SEVERABILITY. Should any provision of this Agreement for any reason
be declared invalid, void or unenforceable by a court of competent
jurisdiction, the validity and binding effect of any remaining portions of
this Agreement shall remain in full force and effect as if this Agreement had
been executed with such invalid, void or unenforceable provisions eliminated;
provided, however, that the remaining provisions still reflect the intent of
the parties to this Agreement.
16. AMENDMENTS. This Agreement may not be amended or modified except by a
written agreement signed by Executive and Mission. This Agreement and any
amendment thereof may be executed in counterparts.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
as of the day and year first above written.
MISSION SAVINGS AND LOAN ASSOCIATION, A FEDERAL ASSOCIATION
By: ______________________________________________
Chairman of the Board
EXECUTIVE
__________________________________________________
Donavon P. Ternes
