Exhibit 2.1
______________________________________________________________________________
AGREEMENT AND PLAN OF MERGER
AMONG
PBOC HOLDINGS, INC.
FBOP CORPORATION
AND
FBOP ACQUISITION COMPANY
As of December 8, 2000
______________________________________________________________________________
TABLE OF CONTENTS
Page
ARTICLE I. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2
MERGER . . . . . . . . . . . . . . . . . . . . . . . . . . .2
(a) Merger. . . . . . . . . . . . . . . . . . . . . . . .2
(b) Effective Time. . . . . . . . . . . . . . . . . . . .2
(c) Effects of the Merger . . . . . . . . . . . . . . . .2
(d) Prior Approvals . . . . . . . . . . . . . . . . . . .2
(e) Certificate of Incorporation. . . . . . . . . . . . .3
(f) Bylaws. . . . . . . . . . . . . . . . . . . . . . . .3
(g) Directors and Officers. . . . . . . . . . . . . . . .3
(h) Additional Actions. . . . . . . . . . . . . . . . . .3
(i) Conversion of Shares. . . . . . . . . . . . . . . . .3
(j) Total Merger Consideration. . . . . . . . . . . . . .4
(k) Surrender of Shares . . . . . . . . . . . . . . . . .4
(l) Designation of Paying Agent; Investment of Funds. . .5
(m) Transmittal Materials . . . . . . . . . . . . . . . .5
(n) Dissenting Shares . . . . . . . . . . . . . . . . . .5
(o) Termination of Paying Agent's Duties. . . . . . . . .6
(p) Closing of Holding Company's Transfer Books . . . . .6
(q) Employee Stock Options; Restricted Stock. . . . . . .6
ARTICLE II . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6
REPRESENTATIONS AND WARRANTIES OF HOLDING COMPANY. . . . . .6
(a) Organization and Standing of Holding Company. . . . .6
(b) Organization and Standing of Savings Institution. . .7
(c) Holding Company Subsidiaries. . . . . . . . . . . . .7
(d) Capitalization. . . . . . . . . . . . . . . . . . . .8
(e) Authorization . . . . . . . . . . . . . . . . . . . .8
(f) Certificates of Incorporation and Bylaws. . . . . . .8
(g) Consents and Approvals. . . . . . . . . . . . . . . .9
(h) Defaults and Conflicts. . . . . . . . . . . . . . . .9
(i) SEC Reports; Financial Statements . . . . . . . . . .9
(j) Regulatory Reports and Filings. . . . . . . . . . . 10
(k) Changes Since September 30, 2000. . . . . . . . . . 11
(l) Properties. . . . . . . . . . . . . . . . . . . . . 11
(i) Real Estate and Mortgages . . . . . . . . . . 11
(ii) Investments . . . . . . . . . . . . . . . . . 12
(iii) Title to Property; Zoning . . . . . . . . . . 12
(m) Environmental Laws. . . . . . . . . . . . . . . . . 12
(n) Proprietary Rights. . . . . . . . . . . . . . . . . 13
(o) Agreements. . . . . . . . . . . . . . . . . . . . . 13
-i-
(p) Litigation; Claims. . . . . . . . . . . . . . . . . 14
(q) Compliance with Laws. . . . . . . . . . . . . . . . 14
(r) Taxes . . . . . . . . . . . . . . . . . . . . . . . 14
(s) Related Party Transactions. . . . . . . . . . . . . 15
(t) Employee Benefit Plans. . . . . . . . . . . . . . . 16
(u) Insurance . . . . . . . . . . . . . . . . . . . . . 17
(v) Intentionally Omitted . . . . . . . . . . . . . . . 17
(w) Deposits. . . . . . . . . . . . . . . . . . . . . . 17
(x) Loans . . . . . . . . . . . . . . . . . . . . . . . 18
(y) Reserves. . . . . . . . . . . . . . . . . . . . . . 18
(z) Agreements with Regulatory Agencies . . . . . . . . 19
(aa) Information for Regulatory Approvals. . . . . . . . 19
(ab) Governmental Notices. . . . . . . . . . . . . . . . 19
(ac) SEC Filings . . . . . . . . . . . . . . . . . . . . 19
(ad) Finders and Investment Bankers. . . . . . . . . . . 19
(ae) Third Party Discussions . . . . . . . . . . . . . . 20
(af) Disclosure. . . . . . . . . . . . . . . . . . . . . 20
(ag) Bonuses; Accrued Vacation . . . . . . . . . . . . . 20
(ah) Expenses. . . . . . . . . . . . . . . . . . . . . . 20
(ai) Change in Control Payments. . . . . . . . . . . . . 20
ARTICLE III. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
REPRESENTATIONS AND WARRANTIES OF ACQUISITION AND FBOP . . 21
(a) Organization of Acquisition and FBOP. . . . . . . . 21
(b) Authorization . . . . . . . . . . . . . . . . . . . 21
(c) Consents and Approvals. . . . . . . . . . . . . . . 21
(d) Defaults and Conflicts. . . . . . . . . . . . . . . 21
(e) SEC Filings . . . . . . . . . . . . . . . . . . . . 21
(f) Funds Available . . . . . . . . . . . . . . . . . . 22
(g) Finders and Investment Bankers. . . . . . . . . . . 22
(h) Governmental Notices. . . . . . . . . . . . . . . . 22
(i) Articles; Bylaws. . . . . . . . . . . . . . . . . . 22
(j) Access to Certain Information . . . . . . . . . . . 22
ARTICLE IV . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
RIGHT TO INVESTIGATE . . . . . . . . . . . . . . . . . . . 22
ARTICLE V. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
COVENANTS OF HOLDING COMPANY . . . . . . . . . . . . . . . 23
(a) Operation in Ordinary Course. . . . . . . . . . . . 23
(b) Exclusivity . . . . . . . . . . . . . . . . . . . . 26
(c) Stockholder Meeting . . . . . . . . . . . . . . . . 27
(d) Consents. . . . . . . . . . . . . . . . . . . . . . 28
(e) Reports . . . . . . . . . . . . . . . . . . . . . . 28
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(f) Notice. . . . . . . . . . . . . . . . . . . . . . . 28
(g) Regulatory Matters. . . . . . . . . . . . . . . . . 28
(h) Schedules . . . . . . . . . . . . . . . . . . . . . 28
(i) Supplemental Information; Disclosure Supplements. . 28
(j) Cooperation . . . . . . . . . . . . . . . . . . . . 29
(k) Conditions Precedent. . . . . . . . . . . . . . . . 29
(l) Best Efforts. . . . . . . . . . . . . . . . . . . . 29
(m) Proxies . . . . . . . . . . . . . . . . . . . . . . 29
ARTICLE VI . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
COVENANTS OF ACQUISITION AND FBOP. . . . . . . . . . . . . 29
(a) Consents. . . . . . . . . . . . . . . . . . . . . . 29
(b) Cooperation . . . . . . . . . . . . . . . . . . . . 29
(c) Conditions Precedent. . . . . . . . . . . . . . . . 30
(d) Best Efforts. . . . . . . . . . . . . . . . . . . . 30
(e) Shareholder Rights Agreement. . . . . . . . . . . . 30
(f) Benefit Plans and Arrangements. . . . . . . . . . . 30
(g) Indemnification; Insurance. . . . . . . . . . . . . 30
(h) Standstill. . . . . . . . . . . . . . . . . . . . . 31
ARTICLE VII. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
CONDITIONS TO THE OBLIGATIONS OF ACQUISITION . . . . . . . 32
(a) Validity of Representation and Warranties . . . . . 32
(b) Consents. . . . . . . . . . . . . . . . . . . . . . 32
(c) Compliance with Covenants; Schedules. . . . . . . . 32
(d) Opinion of Counsel. . . . . . . . . . . . . . . . . 32
(e) Approval of Holding Company Stockholders. . . . . . 32
(f) Dissenting Holding Company Shares . . . . . . . . . 32
(g) Resignations. . . . . . . . . . . . . . . . . . . . 32
(h) Adverse Changes . . . . . . . . . . . . . . . . . . 33
(i) Effective Time. . . . . . . . . . . . . . . . . . . 33
(j) Stock Option Plans and Incentive Plans; Options . . 33
ARTICLE VIII . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
CONDITIONS TO THE OBLIGATIONS OF HOLDING COMPANY . . . . . 33
(a) Validity of Representations and Warranties. . . . . 33
(b) Consents. . . . . . . . . . . . . . . . . . . . . . 33
(c) Compliance with Covenants . . . . . . . . . . . . . 33
(d) Opinion of Counsel. . . . . . . . . . . . . . . . . 33
(e) Fairness Opinion. . . . . . . . . . . . . . . . . . 34
(f) Effective Time. . . . . . . . . . . . . . . . . . . 34
(g) Funds to Paying Agent . . . . . . . . . . . . . . . 34
ARTICLE IX . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
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CONDITIONS APPLICABLE TO ACQUISITION, FBOP AND
HOLDING COMPANY . . . . . . . . . . . . . . . . . . 34
(a) Governmental Approvals. . . . . . . . . . . . . . . 34
(b) Injunction. . . . . . . . . . . . . . . . . . . . . 34
ARTICLE X. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
CLOSING AND CLOSING DOCUMENTS. . . . . . . . . . . . . . . 35
(a) Closing . . . . . . . . . . . . . . . . . . . . . . 35
(b) Holding Company Closing Documents . . . . . . . . . 35
(c) Acquisition Closing Documents . . . . . . . . . . . 35
ARTICLE XI . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
TERMINATION AND TERMINATION FEE. . . . . . . . . . . . . . 36
(a) Termination . . . . . . . . . . . . . . . . . . . . 36
(b) Termination Fee . . . . . . . . . . . . . . . . . . 36
(c) Survival of Rights. . . . . . . . . . . . . . . . . 37
ARTICLE XII. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
SURVIVAL OF REPRESENTATIONS, WARRANTIES AND COVENANTS. . . 37
ARTICLE XIII . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
MISCELLANEOUS. . . . . . . . . . . . . . . . . . . . . . . 37
(a) Payment of Expenses . . . . . . . . . . . . . . . . 37
(b) Entire Agreement. . . . . . . . . . . . . . . . . . 37
(c) Modifications, Amendments and Waivers . . . . . . . 37
(d) Assignment; Governing Law . . . . . . . . . . . . . 37
(e) Schedules . . . . . . . . . . . . . . . . . . . . . 38
(f) Press Releases. . . . . . . . . . . . . . . . . . . 38
(g) Notices . . . . . . . . . . . . . . . . . . . . . . 38
(h) Attorneys' Fees . . . . . . . . . . . . . . . . . . 39
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AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER (the "Agreement") is entered into as
of the 8th day of December, 2000, by and among PBOC Holdings, Inc., a savings
institution holding company organized under the laws of the State of Delaware
(the "Holding Company"), FBOP Corporation, a bank and savings institution
holding company organized under the laws of the State of Illinois ("FBOP") and
FBOP Acquisition Company, a corporation organized under the laws of the State
of Delaware ("Acquisition"). Holding Company and Acquisition are sometimes
referred to herein as the "Constituent Corporations."
W I T N E S S E T H:
WHEREAS, Acquisition is a wholly-owned subsidiary of FBOP; and
WHEREAS, the parties desire that Holding Company be acquired by
Acquisition through the merger of Acquisition with and into Holding Company
upon the terms and conditions contained herein and in accordance with
applicable laws (the "Merger"); and
WHEREAS, the Board of Directors of Holding Company deems the Merger to
be advisable and in the best interests of Holding Company and its stockholders
and has adopted resolutions approving this Agreement and directing that this
Agreement be submitted for consideration at a meeting of its stockholders; and
WHEREAS, the Boards of Directors of FBOP and Acquisition deem the Merger
to be advisable and in the best interests of their respective stockholders and
each has adopted resolutions approving this Agreement; and
WHEREAS, following the execution and delivery of this Agreement, Peoples
Bank of California, a federally-chartered stock savings institution and
wholly-owned subsidiary of Holding Company (the "Savings Institution"), and
California National Bank, a national banking institution and wholly-owned
subsidiary of FBOP ("CNB," and sometimes referred to herein as the "Surviving
Bank"), may enter into a Bank Agreement and Plan of Merger (the "Bank Merger
Agreement") providing for the merger (the "Bank Merger"), of Savings
Institution with and into CNB, with the Bank Merger to be consummated
following the consummation of the Merger (the Merger and the Bank Merger and
the transactions contemplated thereby are referred to herein as the
"Transaction");
NOW, THEREFORE, for and in consideration of the premises and the mutual
agreements, representations, warranties and covenants herein contained and in
the Proxies, for the purpose of prescribing the terms and conditions of the
Merger, the manner of converting the common stock, $0.01 par value per share,
of Holding Company (the "Common Stock")
into cash, and such other details and provisions as are deemed desirable in
connection with the Merger, the parties, intending to be bound, hereby agree
as follows:
ARTICLE I
MERGER
(a) Merger. In accordance with the provisions of this Agreement and
the Delaware General Corporation Law ("DGCL"), at the Effective Time (as
herein defined), Acquisition shall be merged with and into Holding Company and
the separate existence of Acquisition thereupon shall cease. Following the
Merger, Holding Company shall continue as the surviving corporation
("Surviving Corporation"). At Acquisition's option, subject to the filing of
all necessary applications and the receipt of all required regulatory
approvals, the Merger may be structured so that Holding Company merges into
another direct or indirect wholly-owned subsidiary of FBOP (such entity, if
any, to be included in the definition of "Acquisition"); provided, however,
that (i) Acquisition shall assign to such entity, and such entity shall
assume, all rights and obligations of Acquisition under this Agreement, (ii)
the consideration to be paid to the holders of Holding Company Common Stock is
not thereby changed in kind or reduced in amount as a result of such
modification or the taxation of any amounts to be received by the holders of
Holding Company Common Stock is not altered and (iii) such modification will
not materially delay or jeopardize receipt of any required regulatory
approvals or any other condition to the obligations of FBOP and Acquisition
set forth herein.
(b) Effective Time. As soon as practicable after the satisfaction
or waiver of the conditions set forth in Article X, the parties hereto will
file a certificate of merger (the "Certificate of Merger") with the Secretary
of State of Delaware and make all other filings or recordings required by the
DGCL in connection with the Merger. The Merger shall become effective at such
time as the Certificate of Merger is duly filed with the Secretary of State of
Delaware, or at such later time as is specified in the Certificate of Merger
(the "Effective Time").
(c) Effects of the Merger. The Merger shall have the effects set
forth in the DGCL. Without limiting the generality of the foregoing, and
subject thereto, at the Effective Time, all the properties, rights,
privileges, powers and franchise of the Constituent Corporations shall vest in
the Surviving Corporation, and all debts, liabilities and duties of the
Constituent Corporations shall become the debts, liabilities and duties of the
Surviving Corporation.
(d) Prior Approvals. The parties hereto acknowledge that the
requisite approvals for the Transaction must be received from or notices must
be given to certain federal governmental bodies and agencies including, but
not limited to: (i) the Office of Thrift Supervision of the Department of the
Treasury (the "OTS"); (ii) the Federal Deposit Insurance Corporation (the
"FDIC"); (iii) the Board of Governors of the Federal Reserve System
2
("Federal Reserve Board"); and (iv) any other regulatory authorities having
jurisdiction, which approvals or notices (x) shall not contain conditions
that, individually or in the aggregate, could likely have or lead to a
Material Adverse Effect (as hereinafter defined) on FBOP, CNB or Acquisition
or (y) shall not, individually or in the aggregate, so materially reduce the
economic or business benefits of the transactions contemplated by this
Agreement to FBOP that had such condition or requirement been known, FBOP, in
its reasonable judgment, would not have entered into this Agreement. The
governmental bodies and agencies referred to in items (i)-(iv) above are
referred to herein as the "Applicable Governmental Authorities".
(e) Certificate of Incorporation. The Certificate of Incorporation
of Holding Company in effect at the time of the Merger shall be the
Certificate of Incorporation of the Surviving Corporation, until thereafter
amended as provided thereunder and in the DGCL.
(f) Bylaws. The Bylaws of Acquisition in effect at the time of the
Merger shall be the Bylaws of the Surviving Corporation until altered, amended
or repealed, as provided thereunder and in the Certificate of Incorporation
and the DGCL.
(g) Directors and Officers. The directors and officers of
Acquisition at the time of the Merger shall be the directors and officers of
the Surviving Corporation, in each case to serve, in accordance with the
Certificate of Incorporation and Bylaws of the Surviving Corporation, until
their successors shall have been elected and shall qualify. If at the
Effective Time a vacancy shall exist on the Board of Directors or in any of
the offices of the Surviving Corporation, such vacancy may thereafter be
filled in the manner provided by the Bylaws of the Surviving Corporation.
(h) Additional Actions. If, at any time after the Effective Time,
the Surviving Corporation shall consider or be advised that any further
assignments or assurances in law or any other acts are necessary or desirable
(a) to best perfect or confirm, of record or otherwise, in the Surviving
Corporation, title to and possession of any property or right of Acquisition
acquired or to be acquired by reason of, or as a result of, the Merger, or (b)
otherwise to carry out the purposes of this Agreement, Holding Company and its
proper officers and directors shall be deemed to have granted to the Surviving
Corporation an irrevocable power of attorney to execute and deliver all such
proper deeds, assignments and assurances in law and to do all acts necessary
or proper to vest, perfect or confirm title to and possession of such property
or rights in the Surviving Corporation are fully authorized in the name of
Holding Company or otherwise to take any and all such actions.
(i) Conversion of Shares. The manner and basis of converting and
exchanging the shares of Holding Company Common Stock, and the manner and
basis of making distributions, if any, to stockholders of Holding Company,
shall be as follows:
(i) Each share of Common Stock of Holding Company which is
issued and outstanding immediately prior to the Effective Time other
than Dissenting Shares
3
(as defined below) shall, by virtue of the Merger and without any action
on the part of the holder thereof, at and after the Effective Time be
converted into the right to receive $10.00 (the "Per Share Merger
Consideration") without interest thereon, after the date when such holder
satisfies the procedures contemplated by subpart (k) below in accordance
with the provisions of this Agreement.
(ii) At the Effective Time, Acquisition shall pay or cause to
be paid to each of the persons listed on Schedule 1(q) hereto, with
respect to the outstanding options for Holding Company Common Stock
(without regard to the expiration date thereof) (collectively, the
"Options") set forth opposite such person's name therein, an amount per
share of Common Stock subject to an Option equal to the excess of the
Per Share Merger Consideration over the exercise price per share of such
Option, as set forth on Schedule 1(q) (the "Cash Consideration Per
Option"). Concurrently with the payment of the Cash Consideration Per
Option, each holder of an Option shall deliver to Acquisition evidence
satisfactory to Acquisition of the cancellation of such Option. At the
Effective Time, each Option shall be canceled and retired and shall
cease to exist and shall be deemed to represent only the right to
receive the Cash Consideration Per Option. Payment of the Cash
Consideration Per Option in accordance with this Article I(i)(ii) shall
be deemed to be full satisfaction of all rights pertaining to the
Options. All amounts payable under this Article I(i)(ii) shall be
subject to any required withholding of taxes and shall be paid without
interest.
(iii) Each share of Holding Company Common Stock, if any,
which is issued and held in the treasury of Holding Company, shall, by
virtue of the Merger, at the Effective Time, be retired and canceled,
and no cash or other consideration shall be issued with respect thereto.
(iv) Each share of common stock, par value $1.00 per share,
of Acquisition issued and outstanding immediately prior to the Effective
Time shall be converted into and exchangeable for one share of common
stock, $0.01 par value per share, of the Surviving Corporation
("Surviving Corporation Common Stock").
(j) Total Merger Consideration. Notwithstanding the preceding
subparts of this Article, except to the extent payments made to holders of
Dissenting Shares exceed the Per Share Merger Consideration, in no event shall
the total cash consideration paid by Acquisition hereunder (the "Aggregate
Merger Consideration") exceed $198,762,050 plus the cash payment for the
Options as described in subpart (i)(ii) above. To the extent that any of the
Options are exercised prior to the Closing, the $198,762,050 amount shall be
increased by an amount equal to the product of (A) the number of shares of
Holding Company Common Stock issued pursuant to the exercise of such Options
and (B) $10.00.
(k) Surrender of Shares. As promptly as practicable after the
Effective Time, each holder of shares of Holding Company Common Stock shall,
upon presentation and surrender
4
of the certificate or certificates therefor to the Paying Agent (as defined
below) for cancellation in accordance with the transmittal materials described
below, be entitled to receive in exchange therefor a check or checks payable
to such person representing the payment of cash into which such holder's shares
of Holding Company Common Stock have been converted at the Effective Time.
Each certificate which represented issued and outstanding shares of Holding
Company Common Stock immediately prior to the Effective Time shall be deemed
canceled at the Effective Time and shall represent only the right to receive
cash for each share represented by such certificate. In no event shall the
holder of any such surrendered certificates be entitled to receive interest
on any of the funds to be received in the Merger.
(l) Designation of Paying Agent; Investment of Funds. Registrar and
Transfer Company shall act as paying agent hereunder ("Paying Agent"), and
Acquisition and FBOP shall make available to Paying Agent at the Effective
Time (i) an amount in cash equal to the product of the Per Share Merger
Consideration times the number of shares of Holding Company Common Stock
outstanding immediately prior to the Effective Time, which shall not include
the number of shares of Holding Company Common Stock held in Holding Company's
treasury, less the number of Holding Company Dissenting Shares whose holders
have complied with the provisions of Section 262 of the DGCL as described in
subpart (n) below at or prior to the Effective Time and less any shares owned
by Acquisition or any other subsidiary or affiliate of Acquisition, and (ii)
an amount in cash equal to the aggregate Cash Consideration Per Option. The
cash deposited with the Paying Agent shall be invested by the Paying Agent as
directed by Acquisition.
(m) Transmittal Materials. As promptly as practicable after the
Effective Time, but in any event within three business days following the
Effective Time, Acquisition shall send or cause to be sent to each former
holder of record of shares of Holding Company Common Stock transmittal
materials for use in surrendering their certificate or certificates in
exchange for cash. The letter of transmittal will contain instructions with
respect to the surrender of such certificates. Acquisition shall instruct
record date holders of Holding Company Common Stock who hold such shares for
the account of others to provide the respective beneficial holders of such
shares instructions with respect to the surrender of their shares.
(n) Dissenting Shares. Each outstanding share of Holding Company
Common Stock as to which a proper written objection to the Merger is filed in
accordance with Section 262 of the DGCL and which is not voted in favor of the
Merger shall not be converted into or represent a right to receive cash
hereunder unless and until the holder shall have failed to perfect or shall
have effectively withdrawn or lost his or her right to appraisal of and
payment for such shares of Common Stock under Section 262 of the DGCL, at
which time such shares of Common Stock shall be converted into a right to
receive cash in the same manner and subject to the same conditions as provided
for other outstanding shares of Common Stock in this Article. All such shares
of Holding Company Common Stock as to which such a written objection is so
filed and which are not voted in favor of the Merger, except any such shares
of Holding Company Common Stock the holder of which shall have effectively
withdrawn or lost
5
his or her right to appraisal of and payment for such shares of Common Stock
under the DGCL are herein called "Dissenting Shares" and each holder is
herein called a "Dissenting Shareholder." Holding Company shall give
Acquisition prompt notice upon receipt by Holding Company of any such
written objection to the Merger. Holding Company agrees that prior to the
Effective Time it will not, except with the prior written consent of
Acquisition, voluntarily make any payment with respect to, or settle or offer
to settle, any such objection. Each Dissenting Shareholder who becomes
entitled, pursuant to the provisions of the DGCL, to payment for the fair cash
value of his or her shares of Holding Company Common Stock shall receive
payment therefor from Holding Company as the Surviving Corporation (but only
after the amount thereof shall have been agreed upon or finally determined
pursuant to such provisions), and such shares of Common Stock shall be retired
and canceled.
(o) Termination of Paying Agent's Duties. Promptly following the date
which is twelve months after the Effective Time, the Paying Agent shall
deliver to FBOP all cash and other documents in its possession relating to the
transactions described in this Agreement, and the Paying Agent's duties shall
terminate. Thereafter, each holder of a certificate formerly representing
shares of Holding Company Common Stock who has not previously surrendered such
certificate may surrender such certificate to FBOP and (subject to applicable
abandoned property, escheat and similar laws) receive in exchange therefore
the Per Share Merger Consideration for each share of Holding Company Common
Stock represented by such certificate.
(p) Closing of Holding Company's Transfer Books. At the Effective
Time, the stock transfer records of Holding Company shall be closed and no
transfer of shares of Holding Company Common Stock shall thereafter be made.
(q) Employee Stock Options; Restricted Stock. Schedule 1(q) hereto
contains an accurate and complete list of all outstanding options and
restricted stock awards, including the name of the grantee, date of grant,
number of shares and exercise price.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF HOLDING COMPANY
Holding Company represents and warrants to Acquisition and FBOP
with respect to Holding Company and the Subsidiaries (as defined below) as
follows (it being understood and acknowledged that no representations and
warranties are made with respect to BYL Bancorp, a California corporation, and
BYL Bank Group, a California commercial bank and wholly owned subsidiary of
BYL Bancorp):
(a) Organization and Standing of Holding Company. Holding Company is
a corporation duly organized, validly existing and in good standing under the
laws of the State of Delaware. Holding Company has the corporate power and
authority to own or lease all of its
6
properties and assets and to carry on its business as it is now being
conducted, and is duly licensed or qualified to do business in each
jurisdiction in which the nature of the business conducted by it or the
character or location of the properties and assets owned or leased by it
makes such licensing or qualification necessary, except where the failure
to be so licensed or qualified would not have a Material Adverse Effect
(as defined below) on Holding Company and the Subsidiaries (defined below),
taken as a whole. Holding Company is duly registered as a savings and
loan holding company under the Home Owners' Loan Act, as amended ("HOLA"), and
the regulations issued thereunder.
As used in this Agreement, the term "Material Adverse Effect" or "Material
Adverse Change" means with respect to any person, any effect or change that
(i) is material and adverse to the financial condition, results of operations
or business of such person or (ii) materially impairs the ability of such
person to consummate the transactions contemplated by this Agreement or the
Bank Merger Agreement; provided, however, that Material Adverse Effect shall
not be deemed to include: (x) the impact of changes in (a) laws, regulations
or policies of any Applicable Governmental Authority or interpretations
thereof, or (b) generally accepted accounting principles, that in each case
are generally applicable to the banking industry; or (y) in the case of
Holding Company, actions taken or to be taken by Holding Company upon the
written request of FBOP and/or Acquisition pursuant to this Agreement or the
Bank Merger Agreement.
(b) Organization and Standing of Savings Institution. Savings
Institution is a federally-chartered stock savings and loan association, duly
organized, validly existing, and in good standing under the laws of the United
States of America, and Savings Institution has the requisite corporate power
and authority to enter into the Bank Merger. Savings Institution is duly
authorized to conduct a savings and loan business, is a member of the Federal
Home Loan Bank of San Francisco, and is duly authorized to operate each of its
offices, including branch offices (collectively, the main office and each
branch location are referred to herein as the "Branches"). Savings
Institution is a wholly-owned subsidiary of Holding Company.
(c) Holding Company Subsidiaries. Schedule 2(c) hereto sets forth a
list of all of Holding Company's direct and indirect subsidiaries including
Savings Institution (hereinafter separately called a "Subsidiary" and
collectively called the "Subsidiaries"). The Schedule sets forth the
authorized capital stock, the number of shares duly issued and outstanding,
the number so owned by each shareholder of the Subsidiary and the jurisdiction
of incorporation of each Subsidiary. The shares of capital stock of the
Subsidiaries are validly issued, fully paid and non-assessable (subject to
statutory obligations of holders, if any), and are owned free and clear of any
liens, claims, charges or encumbrances. Except as disclosed on such Schedule,
neither Holding Company nor any of the Subsidiaries has any investment in any
subsidiary or any investment in any partnership, joint venture, limited
liability company or similar entity, all of which investments are owned free
and clear of any liens, claims, charges or encumbrances except as disclosed
thereon. Each of the Subsidiaries is a corporation duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
incorporation and has the
7
corporate power to own or lease its properties and carry on its business as
now being conducted. Each of the Subsidiaries is duly qualified or otherwise
authorized to transact business as a foreign corporation and is in good
standing in every jurisdiction in which such qualification or authorization
is required by law to carry on its business as now being conducted, except
where the failure so to qualify or to be authorized would not have a Material
Adverse Effect on the assets, properties, business or financial condition of
Holding Company and the Subsidiaries, taken as a whole. Schedule 2(c) sets
forth a true and correct description of the activities of each of the
Subsidiaries. No certificate of authority identified in such Schedule has
been revoked, restricted, suspended, limited or modified nor is any certificate
of authority the subject of, nor to the knowledge of Holding Company is there
a basis for, a proceeding for revocation, restriction, suspension, limitation
or modification.
(d) Capitalization. The authorized capital stock of Holding Company
consists of 25,000,000 shares of Preferred Stock, $0.01 par value per share,
none of which has been issued, and 75,000,000 shares of Common Stock, par
value $0.01 per share, of which 19,876,205 shares are issued and outstanding
as of the date hereof. All of the issued and outstanding shares of Holding
Company Common Stock have been validly issued and are fully paid and non-
assessable (subject to statutory obligations of holders, if any) and free of
preemptive rights. As of the date hereof, 2,012,212 shares of Holding Company
Common Stock were reserved for issuance upon exercise of outstanding Holding
Company stock options granted pursuant to Holding Company's 1999 Stock Option
Plan and 2000 Stock Incentive Plan. Except for the options and shares
specified above and as reflected in Schedule 2(d), there is no contract,
understanding, restriction or agreement, including any voting trust or other
agreement or understanding with respect to the voting of any of the capital
stock of Holding Company, or any convertible, exchangeable or exercisable
security, option, warrant, call, or commitment on the part of Holding Company
of any character relating to issued or unissued shares of the capital stock of
Holding Company.
(e) Authorization. The Board of Directors of Holding Company has
adopted resolutions approving the Agreement and the Transaction and has
authorized the execution and delivery of the Agreement and has directed by
resolution that the Agreement be submitted to a vote of the holders of shares
of Holding Company Common Stock taken at a meeting called for the purpose of
considering and acting upon this Agreement. Holding Company has full power
and authority to enter into this Agreement and, upon appropriate consent of
its stockholders in accordance with law, subject to obtaining all required
regulatory approvals, to consummate the transactions contemplated hereby.
This Agreement has been duly executed and delivered by Holding Company and
constitutes the valid and legally binding obligation of Holding Company,
enforceable against it in accordance with its terms, subject to bankruptcy,
receivership, insolvency, reorganization, moratorium or similar laws affecting
or relating to creditors rights generally and subject to general principles of
equity.
(f) Certificates of Incorporation and Bylaws. Holding Company has
delivered to FBOP true and complete copies of its and each of the
Subsidiaries' Certificates of
8
Incorporation and Bylaws as in effect as of the date hereof, and in the case
of Savings Institution, has delivered true and complete copies of Savings
Institution's Federal Stock Charter and Bylaws.
(g) Consents and Approvals. Except for the consents and approvals of
the Applicable Governmental Authorities, no filing with, and no permit,
authorization, consent or approval of, any public body or authority is
necessary for the consummation by Holding Company of the transactions
contemplated by this Agreement and the Bank Merger Agreement.
(h) Defaults and Conflicts. Neither Holding Company, Savings
Institution or any other Subsidiary is or immediately prior to the Effective
Time will be in conflict with or default under its Certificate of
Incorporation (or similar organizational document) or Bylaws, or in default
under any indenture or under any material agreement or other material
instrument to which it is a party or by which it or any of its properties is
bound or to which it is subject. Subject to the receipt of all consents and
approvals contemplated by this Agreement, neither the execution and delivery
of this Agreement, the consummation of the Transaction nor the fulfillment of
and compliance with the terms and provisions hereof, will (i) violate any
judicial, administrative or arbitral order, writ, award, judgment, injunction
or decree involving Holding Company, Savings Institution or any other
Subsidiary, (ii) conflict with the terms, conditions or provisions of the
charter or Bylaws of Holding Company, Savings Institution or any other
Subsidiary, (iii) conflict with, result in a breach of, constitute a default
under or accelerate or permit the acceleration of the performance required by,
any indenture or any agreement or other instrument to which Holding Company,
Savings Institution or any other Subsidiary is a party or by which Holding
Company, Savings Institution or any other Subsidiary is bound, (iv) result in
the creation of any lien, charge or encumbrance upon any of the assets of
Holding Company, Savings Institution or any other Subsidiary under any such
agreement or instrument, or (v) terminate or give any party thereto the right
to terminate any such indenture, agreement or instrument, except with respect
to (iii) or (iv) above, such as individually or in the aggregate could not
reasonably be expected to have a Material Adverse Effect on the Holding
Company and its Subsidiaries, taken as a whole, and which could not reasonably
be expected to jeopardize or delay consummation of the Transaction. Except as
disclosed in Schedule 2(h) hereto, no consent of any third party to any
indenture or any material agreement or other material instrument to which
Holding Company, Savings Institution or any other Subsidiary is a party is
required in connection with the Transaction. Holding Company agrees that
prior to the Effective Time it will use its best efforts to obtain all
required consents to the Transaction of parties to any such indenture,
agreement, or other instrument which is material to the business of Holding
Company and its Subsidiaries taken as a whole.
(i) SEC Reports; Financial Statements. Holding Company has filed all
required forms, reports, registration statements and documents with the
Securities and Exchange Commission (the "SEC"), since December 31, 1995
(collectively, the "SEC Reports"), each of which, as of its respective date,
complied in all material respects with all applicable
9
requirements of the Securities Act of 1933, as amended (the "Securities Act")
and the Securities Exchange Act of 1934, as amended (the "Exchange Act"). As
of their respective dates, none of the SEC Reports, including, without
limitation, any financial statements or schedules included therein, contained
any untrue statement of a material fact or omitted to state a material fact
required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading. The audited consolidated financial statements of Holding Company
included in its Annual Report on Form 10-K for the years ended December 31,
1997, 1998 and 1999, and the unaudited consolidated interim financial
statements included in its Quarterly Report on Form 10-Q for the quarters
ended March 31, 2000, June 30, 2000, and September 30, 2000 fairly present in
conformity with generally accepted accounting principles applied on a
consistent basis (except as may be indicated therein or in the notes thereto),
the consolidated financial position of Holding Company and its Subsidiaries
as of the dates thereof and their consolidated statements of operations,
stockholders' equity, and cash flows for the periods then ended (in the case
of any unaudited interim financial statements, subject to (i) normal year-end
adjustments and (ii) standard limitations on the application of generally
accepted accounting principles).
Except as and to the extent reflected in the interim consolidated
statement of financial position of Holding Company and the Subsidiaries as of
September 30, 2000, and notes thereto (the "September 30, 2000 Balance Sheet")
or in Schedule 2(i) hereto, neither Holding Company nor any Subsidiary had, as
of September 30, 2000, any liability or obligation (absolute, contingent or
otherwise) except for contractual liabilities arising in the ordinary course
which are not required to be reflected in a balance sheet prepared in
accordance with generally accepted accounting principles. Except as and to
the extent disclosed in Schedule 2(i) hereto, neither Holding Company nor any
Subsidiary has incurred any liability or obligation (absolute, contingent or
otherwise) since September 30, 2000 other than in the ordinary course of
business.
(j) Regulatory Reports and Filings. Holding Company, Savings
Institution and each Subsidiary has filed all reports, notices and other
statements, together with any amendments required to be made with respect
thereto, if any, that it was required to file with the OTS, the FDIC, the
Federal Home Loan Bank, and any other governmental agency or authority with
jurisdiction over Holding Company, Savings Institution or such Subsidiary and
each such report, notice and other statement, including the financial
statements, exhibits and schedules thereto, complied in all material respects
with the relevant statutes, rules and regulations enforced or promulgated by
the regulatory authority with which it was filed. No material deficiencies
have been asserted by any such governmental or regulatory body with respect to
such registrations, filings and submissions that have not been satisfied.
Holding Company has furnished to FBOP or Acquisition copies of all regulatory
filings (and all related correspondence) for Holding Company and any
Subsidiary for and during the years ended December 31, 1996, 1997, 1998 and
1999 and the quarters ended March 31, 2000, June 30, 2000 and September 30,
2000 as filed with the OTS (the "Regulatory Reports"). The Regulatory
Reports, including, without limitation, the provisions made therein for
investments
11
and the valuation thereof, and loan loss reserves, together with the notes
thereto, fairly present the financial position, assets, liabilities,
change in financial position, surplus and other funds of Holding Company and
Savings Institution as of the dates thereof and the results of its operations
for the periods indicated in conformity with regulatory accounting principles
prescribed or permitted by law or the rules and regulations of OTS, applied on
a consistent basis with prior periods, except as set forth therein. Except
for liabilities and obligations disclosed or provided for in the Regulatory
Reports, Savings Institution did not have, as of the respective dates of each
such Regulatory Reports, any liabilities or obligations (whether absolute or
contingent and whether due or to become due) except for contractual
liabilities arising in the ordinary course which are not required to be
reflected in regulatory financial statements. All books of account of Savings
Institution and each other Subsidiary fairly and accurately disclose in all
material respects all the transactions, properties, assets, investments,
liabilities and obligations of Savings Institution or the respective
Subsidiary and all such books of account are in the possession of Savings
Institution or the respective Subsidiary and are true and complete in all
material respects.
(k) Changes Since September 30, 2000. Except as disclosed in Schedule
2(k) hereto, since September 30, 2000 there has been no Material Adverse
Change in the assets, properties, business, financial condition or results of
operations of Holding Company and its Subsidiaries, taken as a whole; and
neither Holding Company, Savings Institution nor any other Subsidiary has,
since September 30, 2000 (i) made any change in its authorized capital stock,
(ii) issued any stock options, warrants or other rights calling for the issue,
transfer, sale or delivery of its capital stock or other securities, (iii)
paid any stock dividend or made any reclassification in respect of its
outstanding shares of capital stock, (iv) issued, transferred, sold or
delivered any shares of its capital stock (or securities convertible into or
exchangeable, with or without additional consideration, for such capital
stock), (v) purchased or otherwise acquired for consideration any outstanding
shares of its capital stock, (vi) disposed of a material portion of its
assets, properties or business other than in the ordinary course of business,
or (vii) authorized or made any distribution to Holding Company's stockholders
of any assets of Holding Company, Savings Institution or any other Subsidiary,
by way of cash dividends or otherwise.
(l) Properties.
(i) Real Estate and Mortgages. Schedule 2(l)(i) hereto sets
forth a list and summary description of (a) all real property owned by
Holding Company or any Subsidiary and all buildings and other structures
located on such real property, (b) all leases, subleases or other
agreements under which Holding Company or any Subsidiary is the lessor
or lessee of any real property, (c) all unexpired options held by
Holding Company or any Subsidiary or contractual obligations on its part
to purchase or acquire any interest in real property, (d) all unexpired
options granted by Holding Company or any Subsidiary or contractual
obligations on its part to sell or dispose of any interest in real
property, and (e) all mortgages held by Holding Company or any
Subsidiary (other
11
than as investment securities), identifying all such mortgages, if any,
for which deficiency notices have been issued or that are otherwise not
current. Except as disclosed in Schedule 2(l)(i) hereto as of the date
hereof such leases, subleases, options and other agreements are in full
force and effect and neither Holding Company nor any Subsidiary has
received any notice of any material default thereunder.
(ii) Investments. The common stock, preferred stock, bonds,
and other investments owned by Holding Company or any Subsidiary as of
the date hereof are evidenced by written instruments and certificates
(except where in non-certificated form), and to the best knowledge of
Holding Company after due inquiry, are valid and genuine in all material
respects. All such bonds, stocks, and other investments are permissible
investments under applicable laws and regulations. Except as disclosed
in Schedule 2(l)(ii) hereto, none of such investments is in default on
the payment of principal, interest or other required distributions.
(iii) Title to Property; Zoning. Except as disclosed in
Schedule 2(l)(iii) hereto, Holding Company and each Subsidiary has good
and marketable title to all real properties reflected in Section 2(l)(i)
and good and marketable title to all other assets and properties shown
as owned by it on Holding Company's September 30, 2000 Balance Sheet or
acquired since that date (except properties disposed of in the ordinary
course of business subsequent to said date), in each case free of all
mortgages, liens, security interests, charges and encumbrances of any
nature whatsoever, other than liens for Taxes (as defined below) not yet
due and payable, except such as individually or in the aggregate could
not reasonably be expected to have a Material Adverse Effect on Holding
Company and its Subsidiaries taken as a whole. All such real property
complies with all applicable private agreements, zoning requirements,
Environmental Laws (defined below), and other governmental laws and
regulations relating thereto, except where the failure to do so could
not reasonably be expected to have a Material Adverse Effect on the
Holding Company and its Subsidiaries taken as a whole. There are no
condemnation proceedings pending or, to the best knowledge of Holding
Company, threatened with respect to the Real Property.
(m) Environmental Laws. Except as disclosed in Schedule 2(m) hereto,
and to the best knowledge of Holding Company after due inquiry, but without
the requirement that Holding Company conduct a Phase I environmental review as
part of its due inquiry, Holding Company and each Subsidiary has conducted and
is conducting its business in compliance with all applicable federal, state,
and local laws, regulations and requirements currently in force relating to
the protection of the environment ("Environmental Laws"), except where the
failure to do so could not reasonably be expected to have a Material Adverse
Effect on the Holding Company and its Subsidiaries taken as a whole. There is
no pending or, to the best knowledge of Holding Company, threatened, civil or
criminal litigation, written notice of violation, or administrative proceeding
relating to such Environmental Laws involving Holding Company or any
Subsidiary. There has not been and to Holding Company's best knowledge, there
is no
12
condition existing, with respect to the release, emission, discharge or
presence of hazardous substances in connection with the business of Holding
Company or any Subsidiary, which condition could subject Holding Company or
any Subsidiary to any proceeding or remediation under such Environmental Laws
or could otherwise have a Material Adverse Effect on the Holding Company and
its Subsidiaries taken as a whole. Holding Company and each Subsidiary has
received all approvals, consents, licenses, and permits with respect to
environmental matters necessary to carry on its business substantially as
currently conducted.
(n) Proprietary Rights. Schedule 2(n) hereto discloses all the
trademarks, trade names and service marks (and all registrations and
applications with respect thereto) (collectively the "Proprietary Rights")
used in the business of Holding Company or any Subsidiary. Except as
otherwise disclosed in such Schedule, either Holding Company or one of the
Subsidiaries owns or is duly authorized to use all of such Proprietary Rights.
Such Proprietary Rights as used by Holding Company or a Subsidiary in its
business do not violate or infringe upon the proprietary rights of any third
party, except where such violation or infringement could not reasonably be
expected to have a Material Adverse Effect on Holding Company or the
Subsidiaries, taken as a whole, and there is no claim, action, proceeding or
investigation pending or, to the best of Holding Company's knowledge,
threatened against Holding Company or any of the Subsidiaries with respect to
any such Proprietary Rights.
(o) Agreements. Except as set forth and described on Schedule 2(o)
hereto, neither Holding Company nor any Subsidiary is a party to nor is
Holding Company or any Subsidiary bound by any oral or written (i) contract
for the employment of any officer or employee, or contract with a former
officer or employee pursuant to which payments are required to be made at any
time following the date hereof, or contract with any labor union or
association representing any employee, (ii) stock ownership, profit-sharing,
bonus, deferred compensation, stock option, severance pay, pension, retirement
or similar plan or agreement, (iii) mortgage, indenture, note or installment
obligation the unpaid balance of which exceeds $500,000, or other instrument
for or relating to any borrowing of money by Holding Company or any of the
Subsidiaries, the unpaid balance of which exceeds $500,000, (iv) guaranty of
any obligation for borrowings or otherwise which in the aggregate exceed
$200,000, (v) agreement or arrangement for the sale or lease of any material
amount of its assets or part of its business other than in the ordinary course
of business or for the grant of preferential rights to purchase or lease any
material amount of its assets or part of its business, (vi) agreement or
arrangement obligating it to register any of its outstanding shares or other
securities with the SEC, (vii) agreement or arrangement with any officer or
director of Holding Company, any Subsidiary, or any other affiliate of Holding
Company, or (viii) contract, agreement or other instrument which is material
to the assets, properties, business, financial condition or results of
operations of Holding Company or any Subsidiary. True and correct copies of
each such document described in (i) - (viii) have been provided to FBOP or
Acquisition. All contracts, plans, mortgages, indentures, guaranties and
other agreements disclosed in Schedule 2(o) hereto are in full force and
effect as of the date hereof, and neither Holding Company nor any Subsidiary
or any other party thereto is in default in any material respect under such
agreement and no
13
event has occurred which with the passage of time or the taking of any action,
or both, would constitute a default in any material respect under any such
contract or agreement. No party thereto may terminate any of such agreements
by reason of the transactions contemplated by this Agreement (other than
change of control provisions in employment agreements).
(p) Litigation; Claims. Except as disclosed in Schedule 2(p) hereto,
there are no actions, suits, claims, investigations or proceedings pending,
settled since January 1, 2000, or to the best knowledge of Holding Company,
threatened, against or affecting Holding Company or any Subsidiary or its
properties or businesses, at law or in equity, or before any governmental or
administrative body or agency or before any arbitrator (i) which involve a
claim in excess of $200,000, or (ii) which alone or in the aggregate, could
have a Material Adverse Effect on Holding Company or any Subsidiary. Holding
Company is not aware of any facts that would reasonably afford a basis for any
such actions, suits, claims, investigations or proceedings. Except as may be
disclosed on such Schedule, there are no unresolved disputes under any
contract to which Holding Company or any Subsidiary is a party or by which
Holding Company or any Subsidiary is bound involving in the aggregate an
amount in excess of $100,000. Neither Holding Company nor any Subsidiary is
in default with respect to any order, writ, award, judgment, injunction or
decree of any court, governmental or administrative body or agency, or
arbitrator applicable to it which could have a Material Adverse Effect on the
Holding Company or any Subsidiary.
(q) Compliance with Laws. Holding Company and each of the
Subsidiaries has complied with all laws, regulations, opinions, orders,
ordinances, judgments or decrees of all governmental authorities (federal,
state, local, foreign or otherwise) applicable to its businesses, including
without limitation, the FDIC and OTS, except where the failure to have so
complied would not, individually or in the aggregate, have a Material Adverse
Effect on the Holding Company or any Subsidiary. Except as disclosed in
Schedule 2(q) hereto, neither Holding Company nor any Subsidiary has received
any notification of any asserted failure by it to comply with any of such
laws.
(r) Taxes.
(i) Except as disclosed in Schedule 2(r) hereto: (a) all Tax
Returns (as defined below) required to be filed with the appropriate
taxing authorities have been filed by or on behalf of Holding Company or
any Subsidiary and all Taxes (as defined below) due have been paid or
provided for in full; (b) there are no liens for Taxes upon the assets
of Holding Company or any Subsidiaries except statutory liens for Taxes
not yet due; (c) there are no outstanding deficiencies in respect of
Taxes asserted or threatened or assessments of Taxes made or threatened,
nor any administrative or judicial proceedings pending or threatened
concerning Taxes, with respect to Holding Company or any Subsidiary and
any deficiencies, assessments or proceedings shown in Holding Company
Schedule are being contested in good faith through appropriate
proceedings; (d) Holding Company has established on the financial
statements described
14
in Section 2(i) of this Agreement reserves and accruals adequate for
the payment of all Taxes accruing with respect to or payable by Holding
Company and each Subsidiary for all periods reflected therein; (e) there
are no outstanding agreements or waivers extending the statutory period
of limitations applicable to any Tax Returns required to be filed with
respect to Holding Company or any Subsidiary; and (f) neither Holding
Company nor any Subsidiary has requested any extension of time within
which to file any Tax Return, which Tax Return has not been filed.
(ii) The appropriate income Tax Returns of Holding Company and
each Subsidiary have been examined by (a) the Internal Revenue Service
or the statute of limitations has expired for all periods up to and
including December 31, 1996, and (b) the taxing authorities of all of
the states disclosed in Schedule 2(c) or the statute of limitations has
expired for all periods up to and including December 31, 1996,
respectively, and there are no outstanding or unresolved proposed
adjustments.
(iii) Except as disclosed in Schedule 2(r)(iii) hereto, no
power of attorney has been granted by Holding Company or any Subsidiary
with respect to any matter relating to Taxes which is currently in
force.
(iv) The consummation of the transactions contemplated by this
Agreement will not give rise to any payments by Holding Company or any
Subsidiary which payments will not be deductible (in whole or in part)
by reason of Sections 280G or 162(m) of the Internal Revenue Code (the
"Code").
For purposes of this Agreement, the term "Taxes" shall mean all taxes,
charges, fees, levies or other assessments, including without limitation, all
net income, gross income, premium or privilege, gross receipts, sales, use, ad
valorem, transfer, franchise, profits, license, withholding, payroll,
employment, excise, estimated, severance, stamp, occupation, property or other
taxes, customs duties, fees, assessments, or charges of any kind whatsoever,
together with any interest and any penalties, additions to tax or additional
amounts imposed by any governmental authority (domestic or foreign) upon
Holding Company or any Subsidiary and the term "Tax Returns" shall mean all
returns, declarations, reports, estimates, and statements, regarding Taxes,
required to be filed under United States federal, state, local or any foreign
laws.
(s) Related Party Transactions. Except as disclosed in Schedule 2(s)
hereto, and other than transactions exclusively between or among Holding
Company and/or any of the Subsidiaries, neither Holding Company nor any
Subsidiary has made any loan to any director, officer or other Affiliate (as
defined below in Article V(b)) of Holding Company or a Subsidiary which
remains outstanding nor has Holding Company or any Subsidiary entered into any
agreement, other than an agreement referred to in subpart (o) hereof, for the
purchase or sale of any property or services from or to any director, officer
or other Affiliate of Holding Company or a Subsidiary.
15
(t) Employee Benefit Plans.
(i) Schedule 2(t)(i) hereto sets forth a true and complete
list of each employee benefit plan, as defined in Section 3(3) of the
Employee Retirement Income Security Act of 1974, as amended ("ERISA")
and each other plan, arrangement and agreement providing employee
benefits (collectively the "Plans"), that covers current or former
employees of Holding Company or any Subsidiary or affiliate and is
presently maintained by Holding Company or any Subsidiary or any
affiliate thereof or by any trade or business, whether or not
incorporated (an "ERISA Affiliate"), which together with Holding Company
would be deemed a "single employer" within the meaning of Section 4001
of ERISA. None of the Plans is a "multiemployer plan," as defined in
Section 3(37) of ERISA. Holding Company has delivered or made available
to FBOP or Acquisition: copies of all such Plans; any related trust
agreements, group annuity contracts, insurance policies or other funding
agreements or arrangements relating thereto; the most recent
determination letter, if any, from the Internal Revenue Service with
respect to each of the Plans which is subject to ERISA ("ERISA Plans");
actuarial valuations, if applicable, for the most recent plan year for
which such valuations are available; the current summary plan
descriptions; and the annual return/report on Form 5500 and summary
annual reports for each of the Plans for each of the last three years.
(ii) Each of the ERISA Plans is in compliance in all material
respects with all applicable provisions of law, including the Code and
ERISA. Neither Holding Company nor any ERISA Affiliate currently
maintains or sponsors a defined benefit pension plan as defined in
Section 414(j) of the Code and neither Holding Company nor any ERISA
Affiliate has ever maintained or sponsored any such plan that could give
rise to a liability against Holding Company or any Subsidiary.
(iii) The written terms of each of the Plans, and any related
trust agreement, group annuity contract, insurance policy or other
funding arrangement are in compliance with all applicable laws in all
material respects including ERISA, the Code, and the Age Discrimination
in Employment Act, as applicable, and each of such Plans has been
administered in substantial compliance with such requirements.
(iv) Except with respect to income taxes on benefits paid or
provided, no income, excise or other tax or penalty (federal or state)
has been waived or excused, has been paid or is owed by any person
(including, but not limited to, any Plan, any Plan fiduciary, Holding
Company and ERISA Affiliates) with respect to the operations of, or any
transactions with respect to, any Plan. No action has been taken, nor
has there been any failure to take any action, nor is any action or
failure to take action contemplated, that would subject any person or
entity to any material liability for any tax or penalty in connection
with any Plan. No reserve for any taxes or penalties has been
established with respect to any Plan, nor has any advice been given to
any person with respect to the need to establish such a reserve.
16
(v) There are no (A) actions, suits, arbitrations or claims
(other than routine claims for benefits), (B) legal, administrative or
other proceedings or governmental investigations or audits, or (C)
complaints to or by any governmental entity, which are pending,
anticipated, or to the Holding Company's best knowledge, threatened,
against the Plans or their assets.
(vi) The present value of the future cost to Holding Company
and ERISA Affiliates of post-retirement medical benefits that Holding
Company or any ERISA Affiliate is obligated to provide, calculated on
the basis of actuarial assumptions Holding Company considers reasonable
estimates of future experience and which have been provided to
Acquisition, does not exceed the amount specified in Schedule 2(t)(vi)
hereto.
(vii) Neither Holding Company nor any ERISA Affiliate, nor any
of the ERISA Plans, nor any trust created thereunder, nor any trustee or
administrator thereof has engaged in a transaction in connection with
which Holding Company or any ERISA Affiliate, any of the ERISA Plans,
any such trust, or any trustee or administrator thereof, or any party
dealing with the ERISA Plans or any such trust could be subject to
either a civil penalty assessed pursuant to Section 409 or 502(i) of
ERISA or a tax imposed pursuant to Section 4975 or 4976 of the Code.
Neither Holding Company nor any ERISA Affiliate is, or, as a result of
any actions, omissions, occurrences or state of facts existing prior to
the Effective Time, may become liable for any tax imposed under Section
4978 of the Code.
(u) Insurance. All properties of Holding Company and each Subsidiary
are covered by valid and currently effective insurance policies issued in
favor of Holding Company or a Subsidiary and such insurance policies provide
Holding Company and its Subsidiaries with coverage and limits for its
operations consistent with past practices and reasonably believed by the
Holding Company to be adequate. Schedule 2(u) hereto sets forth a true and
correct list of all insurance policies covering Holding Company and the
Subsidiaries. Holding Company or a Subsidiary is included as an insured party
under such policies or has full rights as a loss payee. No notice of
cancellation or termination has been received with respect to any such policy.
Such policies will not be terminable or cancelable by reason of this Agreement
and the consummation of the transactions contemplated hereby.
(v) Intentionally Omitted.
(w) Deposits. Schedule 2(w) hereto is a schedule of the aggregate
deposit accounts of Savings Institution, prepared as of the date indicated
thereon, listing by category and by Branch the amount of such deposits,
together with the amount of accrued but unpaid interest thereon (the
"Deposits"). All such Deposits are insured to the fullest permissible extent
by the Savings Association Insurance Fund ("SAIF") administered by the FDIC.
All related
17
insurance premiums due and owing have been paid to the FDIC as of the
date hereof. Savings Institution has, and will have at the Effective
Time, all rights and full authority to transfer the Deposits pursuant to the
Bank Merger without restriction to the extent customary for a SAIF-insured
institution (subject to any notification or similar requirements pursuant to
laws and regulations limiting deposit insurance to $100,000 per account). As
of the date hereof, with respect to the Deposits, subject to immaterial
bookkeeping errors, Savings Institution has administered all of the Deposits
in accordance with good and sound financial practices and procedures, and has
properly made all appropriate credits and debits thereto.
(x) Loans.
(i) All loans of Savings Institution (the "Loans") and loan
commitments extended by Savings Institution and any extensions, renewals
or continuations of such Loans and loan commitments were made in
accordance with applicable regulatory requirements in the ordinary
course of business. The Loans are evidenced by appropriate and
sufficient documentation based upon customary and ordinary past
practices for federal savings institutions.
(ii) All documents and instruments which evidence the Loans
are in all material respects legal and enforceable in accordance with
the terms thereof, except as may be limited by bankruptcy, insolvency,
moratorium or other laws affecting creditors generally or by the
exercise of judicial discretion, and authorized under applicable federal
and state laws and regulations. For purposes of the foregoing sentence,
it is agreed and understood that the phrase "enforceable in accordance
with the terms thereof" shall not mean that the borrower has the
financial ability to pay a loan or that the collateral is sufficient in
value to result in payment of the loan secured thereby.
(iii) Except for loans pledged to the Federal Home Loan Bank or
participations purchased or sold by the Savings Institution or loans
held in custody and in each case as fully described at Schedule 2(x)
hereto, the note evidencing each Loan and the collateral documents
securing each Loan have not been assigned or pledged, the Savings
Institution has good and marketable title thereto, and the Savings
Institution is the sole owner and holder of each note evidencing a Loan
and each collateral document securing such Loan, and except as fully
described at Schedule 2(x), each Loan and each collateral document
securing a Loan is free and clear of any and all prior liens, claims,
encumbrances, participation interests, equities, pledges, charges or
security interests of any nature.
(y) Reserves. The loan loss reserves of Savings Institution, as set
forth on the September 30, 2000 financial statements have been computed in
accordance with generally accepted methods and principles consistently applied
and, in all cases, have been properly computed in all material respects and in
management's opinion are adequate under applicable
18
requirements of law and generally accepted accounting standards to provide for
possible losses on Loans outstanding.
(z) Agreements with Regulatory Agencies. Except as set forth in
Schedule 2(z) hereto, neither Holding Company nor any of its Subsidiaries is
subject to any cease-and-desist or other order issued by, or is a party to any
written agreement, consent agreement or memorandum of understanding (each a
"Regulatory Agreement"), with any regulatory agency or other government entity
that restricts in any respect the conduct of its business or that relates to
its capital adequacy, its credit policies or its management, nor has Holding
Company or any of its Subsidiaries been notified by any regulatory agency or
other governmental entity that it is considering issuing or requesting any
Regulatory Agreement. Except as set forth in Schedule 2(z) hereto, no
regulatory agency has initiated any investigation or proceeding into the
business or operations of Holding Company or any of its Subsidiaries.
(aa) Information for Regulatory Approvals. The information furnished
or to be furnished by Holding Company or Savings Institution in any regulatory
application filed by Holding Company, Savings Institution, FBOP or Acquisition
in connection with the Transaction, will be true and complete in all material
respects as of the date so furnished.
(ab) Governmental Notices. Neither Holding Company nor Savings
Institution has received notice from any federal, state, or other governmental
agency indicating that such agency would oppose or not grant or issue its
consent or approval, if requested, with respect to the Transaction. To the
best knowledge of Holding Company, there are no facts that could reasonably be
expected to have an adverse effect on the ability of Holding Company or
Savings Institution to obtain all requisite regulatory consents or to perform
their respective obligations under this Agreement and in connection with the
Transaction.
(ac) SEC Filings. None of the information contained in the proxy
statement to be mailed to the stockholders of Holding Company in connection
with the Merger or in any amendments thereof or supplements thereto (the
"Proxy Statement") will, at the time of (i) the first mailing thereof, and
(ii) the meeting of stockholders to be held in connection with the Merger,
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; provided that the foregoing representation shall not apply to
information supplied by Acquisition or FBOP in writing expressly for inclusion
in the Proxy Statement.
(ad) Finders and Investment Bankers. Neither Holding Company nor any
Subsidiary has retained any broker, finder or other agent or incurred any
liability for any brokerage fees, commissions or finders' fees with respect to
the Transaction except for Holding Company's retention of Sandler O'Neill &
Partners, L.P. ("Sandler O'Neill") and Keefe Bruyette & Woods, Inc. ("Keefe
Bruyette") pursuant to the terms of their agreements dated November 29,
19
2000. True and correct copies of the agreements with Sandler O'Neill and Keefe
Bruyette have been delivered to FBOP.
(ae) Third Party Discussions. Holding Company is not currently
negotiating or discussing with any third party a possible sale or merger of
Holding Company or any Subsidiary or a substantial portion of any of their
assets or business.
(af) Disclosure. No representation or warranty of Holding Company and
no statement or information relating to Holding Company or any Subsidiary or
their respective businesses or properties contained in (i) this Agreement
(including the Schedules hereto),
or (ii) in any certificate furnished or to be furnished to FBOP or Acquisition
pursuant to this Agreement contains or will contain any untrue statement of a
material fact or omits or will omit to state a material fact necessary to make
the statements made herein or therein, in light of the circumstances in which
they were made, not misleading.
(ag) Bonuses; Accrued Vacation. Bonuses paid or payable by the Holding
Company, Savings Institution and the other Subsidiaries during or for the
fiscal year ended December 31, 2000 shall not exceed $2,500,000 in the
aggregate, and liabilities for accrued vacation, if any, for employees of any
of Holding Company, Savings Institution and any other Subsidiary shall not, at
December 31, 2000 exceed $200,000 in the aggregate.
(ah) Expenses. The sum of all third party fees and expenses incurred
by Holding Company and Savings Institution in connection with the Transaction,
including finders' and brokers' fees, legal expenses and filing and printing
fees shall not exceed in the aggregate $3,750,000.
(ai) Change in Control Payments. The following sets forth a list of
all cash payments due to officers and employees of Holding Company, Savings
Institution or any Subsidiary under any employment, severance or other
agreement as a result of the Transaction:
Name Amount
---- ------
Rudolf P. Guenzel $1,301,370
J. Michael Holmes $ 795,718
William W. Flader $ 646,046
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ARTICLE III
REPRESENTATIONS AND WARRANTIES OF ACQUISITION AND FBOP
FBOP and Acquisition each represent and warrant to Holding Company as
follows:
(a) Organization of Acquisition and FBOP. Acquisition is a
corporation duly organized, validly existing and in good standing under the
laws of Delaware. Acquisition is a wholly-owned subsidiary of FBOP. FBOP is
a corporation duly organized, validly existing and in good standing under the
laws of the State of Illinois.
(b) Authorization. The Boards of Directors of FBOP and Acquisition
have adopted resolutions approving the Agreement and the Transaction and have
authorized the execution and delivery of this Agreement. Acquisition and FBOP
have full power and authority to enter into this Agreement and, subject to
obtaining all required regulatory approvals, to consummate the transactions
contemplated hereby. This Agreement has been duly executed and delivered by
Acquisition and FBOP and constitutes the valid and legally binding obligation
of Acquisition and FBOP, enforceable against them in accordance with its
terms, subject to bankruptcy, receivership, insolvency, reorganization,
moratorium or similar laws affecting or relating to creditors rights generally
and subject to general principles of equity.
(c) Consents and Approvals. Except for consents and approvals of the
Applicable Governmental Authorities, no filing with, and no permit,
authorization, consent or approval of, any public body or authority is
necessary for the consummation by Acquisition and FBOP of the transactions
contemplated by this Agreement.
(d) Defaults and Conflicts. Subject to the receipt of all consents
and approvals contemplated by this Agreement, the execution and delivery of
this Agreement, the consummation of the transactions contemplated hereby or
the fulfillment of and compliance with the terms and provisions hereof will
not (i) violate any judicial or administrative order, writ, award, judgment,
injunction or decree involving Acquisition or FBOP or (ii) conflict with any
of the terms, conditions or provisions of the charter or bylaws of Acquisition
or FBOP. No consent of any third party to any indenture or any material
agreement or other material instrument to which Acquisition or FBOP is a party
is required in connection with the Transaction.
(e) SEC Filings. None of the information supplied or to be supplied
by Acquisition or FBOP in writing expressly for inclusion in the Proxy
Statement will, at the time of (i) the first mailing thereof and (ii) the
meeting of stockholders to be held in connection with the Merger, 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.
21
(f) Funds Available. Acquisition and FBOP have or will have available
to them sufficient funds to perform all of their obligations pursuant to the
Merger.
(g) Finders and Investment Bankers. FBOP and Acquisition will be
responsible for any of their respective brokerage fees, commissions or
finders' fees with respect to the Transaction.
(h) Governmental Notices. Neither FBOP nor Acquisition has received
any notice from any federal, state, or other governmental agency indicating
that such agency would oppose or not grant or issue its consent or approval,
if requested, with respect to the Transaction. To the best knowledge of
Acquisition and FBOP, there are no facts that could reasonably be expected to
have an adverse effect on the ability of Acquisition or FBOP to obtain all
requisite regulatory consents or to perform their respective obligations under
this Agreement.
(i) Articles; Bylaws. FBOP will deliver to Holding Company true and
complete copies of its Articles of Incorporation and Bylaws as in effect as of
the date hereof.
(j) Access to Certain Information. For a period of 14 days from the
date hereof, FBOP shall make available to Holding Company FBOP's consolidated
financial statements for the year ended December 31, 1999 and the quarters
ended March 31, 2000, June 30, 2000 and September 30, 2000.
ARTICLE IV
RIGHT TO INVESTIGATE
Holding Company shall afford (during regular business hours) to the
officers and authorized representatives of Acquisition and FBOP reasonable
access to the offices, properties, books, contracts, commitments and records
(including all relevant computer files and databases) of Holding Company and
Savings Institution in order that FBOP and Acquisition may have full
opportunity to make such investigations as they shall desire of the affairs of
Holding Company, Savings Institution and the other Subsidiaries. The officers
of Holding Company shall furnish Acquisition and FBOP with such additional
financial and operating data and other information as to the assets,
properties and business of Holding Company, Savings Institution and the other
Subsidiaries as Acquisition or FBOP shall from time to time reasonably
request; provided that such requested data and information may be presented in
the format maintained by Holding Company in the normal course of its business.
Holding Company, Savings Institution and the Subsidiaries shall consent to the
review by the officers and authorized representatives of Acquisition or FBOP
of the reports and working papers of Holding Company's independent auditors
(upon reasonable advance notice) and to discussions by the officers and
authorized representatives of Acquisition or FBOP with parties
22
with which Holding Company, Savings Institution and the other Subsidiaries have
business relationships.
ARTICLE V
COVENANTS OF HOLDING COMPANY
The covenants in this Article V relate to Holding Company and the
Subsidiaries, but specifically do not include BYL Bancorp or BYL Bank Group.
(a) Operation in Ordinary Course. From the date hereof to the
Effective Time, each of Holding Company, Savings Institution and the other
Subsidiaries shall: (a) not engage in any transaction except in the ordinary
course of business and shall conduct its business consistent with past
practices; (b) maintain the Branches in a condition substantially the same as
on the date of this Agreement, reasonable wear and use excepted; (c) maintain
its books of accounts and records in the usual, regular and ordinary manner;
and (d) duly maintain compliance in all material respects with all laws,
regulatory requirements and agreements to which it is subject or by which it
is bound. Without limiting the generality of the foregoing, prior to the
Effective Time, Holding Company, Savings Institution and other Subsidiaries
shall not, without the prior written consent of FBOP:
(1) fail to maintain its tangible property and assets in their
present state of repair, order and condition, reasonable wear and tear and
damage by fire or other casualty excepted;
(2) fail to maintain its books, accounts and records in
accordance with generally accepted accounting principles consistently applied;
(3) fail to comply in all material respects with all applicable
laws and regulations;
(4) make, renew or modify the terms (including, but not limited
to, any release or substitution of collateral, change of the interest rate, or
release or substitution of any guarantor) of any loan, letter of credit or
other extension of credit, or commitment to make a loan, in excess of
$2,000,000, provided, however, that loans which are originated pursuant to
binding commitments entered into prior to the date hereof and loans that are
secured by secondary market qualified mortgages on single-family dwellings
shall be permitted under this subsection;
(5) except for the terminations of benefit agreements listed on
Schedule 5(a)(5) hereto, enter into, adopt, amend or terminate any bonus,
profit sharing, compensation, termination, stock option, stock appreciation
right, restricted stock, performance unit, pension, retirement, deferred
compensation, employment, severance or other employee benefit
23
agreements, trusts, plans, funds or other arrangements for the benefit or
welfare of any director, officer or employee;
(6) authorize or enter into any employee contract or employment
agreement, grant any pay raise or increase in any manner the compensation or
fringe benefits of any director, officer or employee or pay any benefit not
required by an existing plan or arrangement or authorize or enter into any
contract, agreement, commitment or arrangement to do any of the foregoing;
provided however, that bonuses described in Article II (ag) hereof and pay
raises to employees pursuant to regularly scheduled reviews in the ordinary
course of business not to exceed 6% of such employee's current salary shall
not be prohibited hereunder; and provided further that nothing contained in
this subparagraph (6) shall restrict the hiring of non-officer, clerical or
teller employees whose compensation does not exceed $50,000 per year;
(7) Intentionally Omitted;
(8) authorize or enter into, or amend, modify or supplement any
contract or commitment (excluding all loans and loan commitments and except as
otherwise set forth in Article V(a)(14)) which provides for the receipt or
payment of amounts, in the aggregate, in excess of $100,000;
(9) sell, transfer, convey, assign or otherwise dispose of any of
its assets or properties (other than assets which are being sold pursuant to
binding commitments entered into prior to the date hereof and immaterial
assets or properties sold, transferred, conveyed, assigned or otherwise
disposed of in the ordinary course of business consistent with past practices
and policies), or authorize any of the foregoing, or sell loans in bulk other
than (i) up to $5,000,000 per month of residential mortgage loans sold in the
ordinary course of business pursuant to existing and on-going commitments, and
(ii) other loans which are sold in the ordinary course of business pursuant to
existing written commitments, which commitments will not be amended, modified
or supplemented except in accordance with the terms of this Agreement;
(10) authorize or make any expenditures for assets in excess of
$100,000 for any item, or lease or encumber any assets outside the ordinary
course of business;
(11) authorize or make any amendment to its charter or bylaws;
(12) fail to keep in force all insurance policies presently in
effect, including insurance of deposit accounts with the FDIC;
(13) do any act which, or omit to do any act the omission of
which, will cause a material breach of any material contract, commitment or
obligation;
24
(14) make any borrowing, incur any debt (other than (i) deposits
in the ordinary course of business and consistent with past practice and (ii)
overnight borrowings from the Federal Home Loan Bank and federal funds
purchased or securities sold under agreements to repurchase, in each case in
the ordinary course of business and for less than one year in duration and
consistent with past practices), or assume, guarantee, endorse or otherwise
become liable with respect to any such obligations;
(15) fail to maintain deposit rates substantially in accord with
the average of the prevailing rates of competing financial institutions in the
local Los Angeles area market, provided that in no event will Savings
Institution accept any deposits for which the interest rate payable thereon
exceeds by more than 1.00 percent the average interest rate being paid on
similar deposits by savings banks and savings and loan associations in the
local Los Angeles area market;
(16) waive, release or cancel any claims in excess of $100,000
against third parties or debts in excess of $100,000 owing to it, or any
rights which have any value in excess of $100,000;
(17) make any changes in its accounting systems, policies,
principles or practices, except as required by changes in laws or regulations
or generally accepted accounting principles;
(18) enter into, authorize, or permit any transaction, except as
now existing and disclosed to Acquisition or FBOP, with any affiliate of
Holding Company or any Subsidiary (other than transactions between Holding
Company and Savings Institution on the one hand, and Peoples Preferred Capital
Corporation on the other hand, in the ordinary course of business and
consistent with past practices);
(19) make any capital contribution to any person or purchase or
invest in any securities issued by any person other than securities which are
issued or guaranteed by the United States government or an agency thereof
having a maturity of more than twelve (12) months from the date of purchase;
(20) sell any investment securities except in the ordinary course
of business consistent with past practices;
(21) enter into, amend or renew any data processing service
contract;
(22) materially change or amend its schedules and policies
relating to service charges or service fees;
25
(23) fail to use its best efforts to (i) preserve the present
business organizations intact, (ii) keep available the services of its present
officers and employees or (iii) preserve its present relationships with
persons having business dealings with it;
(24) fail to maintain, consistent with its past practices, a
reserve for possible loan and lease losses which is adequate under the
requirements of generally accepted accounting principles to provide for
possible losses, net of recoveries relating to loans previously charged off,
on loans outstanding (including, without limitation, accrued interest
receivable);
(25) make any material change in any lease of real property;
(26) fail to file in a timely manner all required filings with
all proper regulatory authorities and fail to cause such filings to be true
and correct in all material respects;
(27) foreclose upon or take deed or title to any commercial real
estate without first conducting a Phase I environmental assessment of the
property; or foreclose upon such commercial real estate if such environmental
assessment indicates the presence of hazardous material in amounts that, if
such foreclosure were to occur, would be reasonably likely to result in a
material adverse effect on Savings Institution;
(28) amend or modify any of its promotional, deposit account or
account loan practices, other than amendments or modifications in the ordinary
course of business; or
(29) (i) make any change in its authorized capital stock, (ii)
issue any stock options, or issue any warrants, or other rights calling for
the issue, transfer, sale or delivery of its capital stock or other
securities, (iii) pay any stock dividend or make any reclassification in
respect of its outstanding shares of capital stock, (iv) except for the
issuance of Common Stock upon exercise of any Options, issue, sell, exchange
or deliver any shares of its capital stock (or securities convertible into or
exchangeable, with or without additional consideration, for such capital
stock), (v) purchase or otherwise acquire for consideration any outstanding
shares of its capital stock, or (vi) declare, pay or set apart in respect of
its capital stock any dividends or other distributions or payments.
For purposes of this Article V(a), FBOP and Acquisition shall be
deemed to have consented to any action described in (1) - (29) above if the
chief financial officer of FBOP shall have received a written request for
consent to any action described in (1) - (29) above, which request describes
in sufficient detail the proposed action, and FBOP shall have failed to
respond to such request within five (5) business days of his receipt of such
request.
(b) Exclusivity. Except as may be required by any regulatory
authority, or except to the extent required by fiduciary obligations under
applicable law in reliance upon the opinion of outside counsel, neither
Holding Company, Savings Institution, nor any other
26
Subsidiary or any of their respective directors, officers, employees,
representatives, investment bankers (including but not limited to Sandler
O'Neill and Keefe Bruyette), agents or Affiliates (as defined below) shall,
directly or indirectly, solicit, initiate, encourage or respond favorably to
inquiries or proposals from, or provide any confidential information or access
to Savings Institution's or Holding Company's premises to, or participate in
any discussions or negotiations with, any person (other than Acquisition and
FBOP and their directors, officers, employees, representatives and agents)
concerning (i) any merger, sale of assets not in the ordinary course of
business, acquisition, business combination, change of control or other similar
transaction involving Holding Company or Savings Institution, or (ii) any
purchase or other acquisition by any person of any shares of capital stock of
Holding Company or Savings Institution, or (iii) any issuance by Holding Company
or Savings Institution of any shares of its capital stock. It is understood
that notwithstanding the foregoing or anything to the contrary herein, Holding
Company will promptly advise FBOP or Acquisition of, and communicate to FBOP
or Acquisition the terms and conditions of (and the identity of the person
making), any such inquiry or proposal received, and will promptly furnish FBOP
or Acquisition with copies of any documents received and summaries of any
other communications with respect thereto. Holding Company will cease any
such existing activities, discussions or negotiations with any person
conducted heretofore with respect to any of the foregoing.
As used in this Agreement, the term "Affiliate" shall mean, with respect
to any specified person, (1) any other person which, directly or indirectly,
owns or controls, is under common ownership or control with, or is owned or
controlled by, such specified person, (2) any other person which is a
director, officer or partner, of the specified person or a person described in
clause (1) of this paragraph, (3) another person of which the specified person
is a director, officer or partner, (4) another person in which the specified
person has a substantial beneficial interest or as to which the specified
person serves as trustee or in a similar capacity, or (5) any relative or
spouse of the specified person or any of the foregoing persons, any relative
of such spouse or any spouse of any such relative.
(c) Stockholder Meeting. Holding Company shall take all steps
necessary to duly call, give notice of, convene and hold a meeting of its
stockholders to be held as soon as is practicable for the purpose of voting
upon the approval of the Merger and this Agreement. Holding Company will,
through its Board of Directors, use its best efforts to obtain stockholder
approval and, except to the extent otherwise specifically required by the
Board of Directors' fiduciary duties under applicable law as set forth in
Article V(b) above, will recommend to its stockholders approval of this
Agreement and the transactions contemplated hereby and such other matters as
may be submitted to its stockholders in connection with this Agreement. As
soon as practicable, Holding Company shall prepare and cause to be filed with
the SEC the related proxy material and shall use its best efforts to obtain
clearance by the SEC for the mailing of such material to Holding Company
stockholders. FBOP or Acquisition shall have the right to review the proxy
material prior to filing with the SEC.
27
(d) Consents. Holding Company shall, and shall cause the Savings
Institution to, as soon as practicable, prepare or cause to be prepared and
make all filings required to be made by either of them, if any, with
Applicable Governmental Authorities and shall use its best efforts to obtain
all consents, waivers, approvals, authorizations, rulings or orders from all
governmental or regulatory bodies or other entities and furnish true, correct
and complete copies of each thereof to FBOP or Acquisition.
(e) Reports. Promptly after filing with the applicable authorities,
Holding Company shall provide to FBOP or Acquisition copies of: (i) all
reports filed with the SEC, including its Annual Report on Form 10-K for the
year ended December 31, 2000, which shall conform to the requirements for SEC
Reports specified in Article II(i) above; and (ii) its Regulatory Reports,
which shall conform to the requirements for Regulatory Reports specified in
Article II(j) and (v) above.
(f) Notice. Holding Company shall give prompt notice to FBOP or
Acquisition of (i) any notice of, or other communication relating to, a
default or event which with notice or lapse of time or both would become a
default, received by Holding Company or any Subsidiary subsequent to the date
of this Agreement and prior to the Effective Time, under its charter or bylaws
or any indenture, or material instrument or agreement, to which Holding
Company or any Subsidiary is a party, by which it or any of its properties is
bound or to which it or any of its properties is subject, (ii) any notice or
other communication from any third party alleging that the consent of such
third party is or may be required in connection with the transactions
contemplated hereby and (iii) any matter which, if it had occurred prior to
the date hereof, would have been required to be included on the Schedules
hereto.
(g) Regulatory Matters. Holding Company shall, from the date hereof
through the Effective Time, keep FBOP and Acquisition advised with respect to
any and all regulatory matters or proceedings affecting Holding Company or
Savings Institution and shall promptly forward to FBOP or Acquisition copies
of all correspondence, notices, orders, memoranda or other written material
received from any regulatory agency (to the extent permitted by law) and shall
provide FBOP and Acquisition full access to its regulatory files to the extent
permitted by law.
(h) Schedules. Within seven (7) days of the date hereof, Holding
Company will deliver to FBOP each of the Schedules to this Agreement, which
Schedules will be attached hereto and made a part hereof, and which Schedules
will be in form and substance acceptable to FBOP in its sole discretion,
pursuant to such format and presentation as Holding Company and FBOP shall
mutually agree.
(i) Supplemental Information; Disclosure Supplements. From time to
time prior to the Effective Time, Holding Company will promptly disclose in
writing to FBOP and Acquisition any matter hereafter arising which, if
existing, occurring or known at the date of this Agreement would have been
required to be disclosed or which would render inaccurate
28
any of the representations, warranties or statements set forth in this
Agreement. From time to time prior to the Effective Time, Holding Company
will promptly supplement or amend the Schedules delivered in connection with
the execution of this Agreement to reflect any matter which, if existing,
occurring or known at the date of this Agreement, would have been required to
be set forth or described in such Schedule or which is necessary to correct any
information in such Schedule that has been rendered inaccurate thereby.
(j) Cooperation. Holding Company and its Subsidiaries shall execute
such documents and other papers, provide such information, and take such
further actions as may be reasonably requested by FBOP or Acquisition to carry
out the provisions hereof and to consummate the Transaction.
(k) Conditions Precedent. Holding Company and the Subsidiaries shall
use their commercially reasonable best efforts to cause all of the conditions
precedent to the consummation of the Transaction applicable to them to be met.
(l) Best Efforts. Subject to the terms and conditions of this
Agreement, Holding Company and the Subsidiaries shall use their commercially
reasonable best efforts to take or cause to be taken all actions necessary,
proper or advisable to consummate the Merger on a prompt basis.
(m) Proxies. Holding Company shall deliver to FBOP irrevocable
proxies, in substantially the form attached hereto as Exhibit A (the
"Proxies"), from Arbur, Inc. and the individuals set forth on Schedule 7(m),
which shall include all of the members of the board of directors of Holding
Company, to vote the shares of Common Stock owned by such persons.
ARTICLE VI
COVENANTS OF ACQUISITION AND FBOP
(a) Consents. Acquisition and FBOP shall, as soon as practicable,
prepare and make all necessary filings with all Applicable Governmental
Authorities and shall use their best efforts to obtain all consents, waivers,
approvals, authorizations, rulings or orders from all governmental or
regulatory bodies or other entities and furnish true, correct and complete
copies of each to Holding Company.
(b) Cooperation. Acquisition and FBOP shall execute such documents
and other papers, provide such information, and take such further actions as
may be reasonably requested by Holding Company to carry out the provisions
hereof and to consummate the transactions contemplated hereby.
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(c) Conditions Precedent. Acquisition and FBOP shall use their
commercially reasonable best efforts to cause all of the conditions precedent
to the consummation of the Transaction applicable to each to be met.
(d) Best Efforts. Subject to the terms and conditions of this
Agreement, Acquisition and FBOP will use their commercially reasonable best
efforts to take or cause to be taken all actions necessary, proper or
advisable to consummate the Merger on a prompt basis.
(e) Shareholder Rights Agreement. Acquisition and CNB will assume the
rights and obligations of Holding Company and Savings Institution to the
extent required under that certain Shareholder Rights Agreement dated as of
April 20, 1998 by and among Holding Company, Savings Institution, the Trustees
of the Estate of Bernice Pauahi Bishop, BIL Securities (Offshore) Limited and
Arbur, Inc.
(f) Benefit Plans and Arrangements. As soon as administratively
practicable after the Effective Time, FBOP and CNB shall take reasonable
action so that employees of Holding Company and Savings Institution who, in
the sole discretion of FBOP or CNB, are retained by FBOP and/or CNB and become
employees thereof, shall be entitled to participate in the respective FBOP and
CNB employee benefit plans of general applicability. For purposes of
determining eligibility to participate in and the vesting of benefits under
the FBOP and CNB employee benefit plans (other than under any defined benefit
plan), FBOP and CNB shall recognize years of service with Holding Company and
Savings Institution prior to the Effective Time.
(g) Indemnification; Insurance.
(i) From and after the Effective Time through the fourth
anniversary of the Effective Time, FBOP and CNB (each an "Indemnifying
Party" and together the "Indemnifying Parties"), agrees to indemnify and
hold harmless each present director, officer or employee of Holding
Company or Savings Institution, determined as of the Effective Time (the
"Indemnified Parties"), against any costs or expenses (including
reasonable attorneys' fees), judgments, fines, losses, claims, damages
or liabilities incurred in connection with any claim, action, suit,
proceeding or investigation, whether civil, criminal, administrative or
investigative, arising out of matters existing or occurring at or prior
to the Effective Time, whether asserted or claimed prior to, at or after
the Effective Time, to the fullest extent to which Holding Company or
Savings Institution is or was required by law or their respective Bylaws
to indemnify such Indemnified Parties and in the manner to which it
could indemnify such parties under the Bylaws of Holding Company and
Savings Institution, in each case as in effect on the date hereof,
provided, however, that all rights to indemnification in respect of any
claim asserted or made within such period shall continue until the final
disposition of such claim.
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(ii) Any Indemnified Party wishing to claim indemnification under
this Article VI(g), upon learning of any such claim, suit, proceeding or
investigation, shall promptly notify the appropriate Indemnifying Party
thereof, but the failure to so notify shall not relieve the Indemnifying
Party of any liability it may have to such Indemnified Party if such
failure does not materially prejudice the Indemnifying Party. In the
event of any such claim, action, suit, proceeding or investigation
(whether arising before or after the Effective Time), (i) the
Indemnifying Party shall have the right to assume the defense thereof
and the Indemnifying Party shall not be liable to such Indemnified
Parties for any legal expenses of other counsel or any other expenses
subsequently incurred by such Indemnified Parties in connection with the
defense thereof, except that if the Indemnifying Party elects not to
assume such defense or a conflict of interest exists or arises between
the Indemnified Party and the Indemnifying Parties, the Indemnified
Parties may retain counsel which is reasonably satisfactory to the
Indemnifying Party, and the Indemnifying Party shall pay, promptly as
statements therefor are received, the reasonable fees and expenses of
such counsel for the Indemnified Parties (which may not exceed one firm
in any jurisdiction); (ii) the Indemnified Parties will cooperate in the
defense of any such matter; (iii) the Indemnifying Party shall not be
liable for any settlement effected without its prior written consent;
and (iv) the Indemnifying Party shall have no obligation hereunder in
the event that a federal or state banking agency or a court of competent
jurisdiction shall determine that indemnification of an Indemnified
Party in the manner contemplated hereby is prohibited by applicable laws
and regulations.
(iii) Holding Company shall be permitted to maintain up to
$15,000,000 in aggregate directors' and officers' liability insurance
coverage for acts or omissions occurring prior to the Effective time by
persons who are currently covered by the directors' and officers'
liability insurance policy maintained by Holding Company and to purchase
an extension of the claims reporting period for the policy providing
such coverage for a period of four years following the Effective Date.
(h) Standstill. For the period beginning on the date of this
Agreement and ending on the earlier of (x) December 21, 2000, (y) the date of
termination of this Agreement by FBOP or Acquisition pursuant to Article
XI(a)(v), or (z) the date that FBOP delivers to Holding Company written notice
of its intent to waive its right to terminate this Agreement pursuant to
Article XI(a)(v), neither FBOP nor Acquisition nor any of their respective
subsidiaries nor any of the shareholders, directors, officers or affiliates
(as defined in Rule 12b-2 under the Exchange Act) of any of the foregoing will
in any manner directly or indirectly: (i) acquire, purchase, agree to acquire
or offer, assist, advise or encourage any other person in acquiring any
additional equity securities of Holding Company, any warrants or options to
acquire such securities, any securities convertible into or exchangeable for
such securities or any other right to acquire such securities; (ii) have any
discussions or enter into any arrangements, understandings or agreements
(whether written or oral) with, or advise, encourage, finance or assist, any
other persons in connection with any of the foregoing; and
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(iii) make any publicly disclosed proposal regarding any of the foregoing or
make any proposal, statement or inquiry, or disclose any intention, plan or
arrangement (whether written or oral) inconsistent with the foregoing.
ARTICLE VII
CONDITIONS TO THE OBLIGATIONS OF ACQUISITION AND FBOP
The obligations of Acquisition and FBOP under this Agreement to cause
this Agreement to become effective and have the transactions contemplated
hereby be consummated are, at their option, subject to the conditions that:
(a) Validity of Representation and Warranties. The representations
and warranties of Holding Company herein contained shall be true and correct
in all material respects when made and, in addition, shall be true and correct
in all material respects on and at the Effective Time with the same force and
effect as though made on and at the Effective Time.
(b) Consents. All required consents, waivers, approvals,
authorizations or orders in connection with the Transaction (other than those
set forth in Article IX(a)) shall have been obtained by Holding Company and
copies of the same shall have been delivered to Acquisition and FBOP.
(c) Compliance with Covenants; Schedules. Holding Company shall have
performed in all material respects all obligations and agreements and complied
in all material respects with all covenants and conditions contained in this
Agreement to be performed and complied with by it at or prior to the Effective
Time. The Schedules and information disclosed to FBOP pursuant to Articles
V(h) and V(i) hereof shall be in form and substance acceptable to FBOP in its
sole discretion and shall not, in the case of Schedules provided pursuant to
Article V(i), be materially different from the Schedules provided to FBOP
pursuant to Article V(h).
(d) Opinion of Counsel. FBOP and Acquisition shall have received the
opinion of Elias, Matz, Tiernan & Herrick L.L.P., counsel for Holding Company,
specified in Article X(b)(ii).
(e) Approval of Holding Company Stockholders. This Agreement shall
have been approved and adopted at a duly called meeting of the stockholders of
Holding Company Common Stock by at least a majority of the issued and
outstanding shares of Holding Company Common Stock entitled to vote thereon.
(f) Dissenting Holding Company Shares. The holders of not more than
10% of the issued and outstanding shares of Holding Company Common Stock at
the Effective Time shall
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have delivered written notice of intent to demand payment of the fair value of
their shares of Holding Company Common Stock pursuant to Section 262 of the
DGCL.
(g) Resignations. The directors of Holding Company, Savings
Institution and the Subsidiaries shall have tendered their resignations in
writing, effective on the Effective Time.
(h) Adverse Changes. From September 30, 2000 to the Effective Time,
there shall not have been any Material Adverse Effect on Holding Company and
Savings Institution, taken as a whole, but not including Material Adverse
Effects which result solely from FBOP's unreasonable failure to consent to
actions under Article V(a).
(i) Effective Time. The Effective Time shall be no later than 5:00
P.M. Central Time on June 30, 2001; provided however, that if the condition in
Article IX(a) shall not have been satisfied prior to June 30, 2001, but all
other conditions to Closing shall be substantially satisfied, the Effective
Time shall automatically be extended for an additional period of 90 days.
(j) Stock Option Plans and Incentive Plans; Options. Acquisition
shall have received evidence satisfactory to it that, upon payment of the Cash
Consideration Per Option, each Option shall have been canceled, and any other
options or warrants for Common Stock and all related plans have been
cancelled.
ARTICLE VIII
CONDITIONS TO THE OBLIGATIONS OF HOLDING COMPANY
The obligations of Holding Company under this Agreement to cause this
Agreement to become effective and have the transactions contemplated hereby be
consummated are, at its option, subject to the conditions that:
(a) Validity of Representations and Warranties. The representations
and warranties of Acquisition and FBOP herein contained shall have been true
and correct in all material respects when made and, in addition, shall be true
and correct in all material respects on and at the Effective Time with the
same force and effect as though made on and at the Effective Time.
(b) Consents. All consents, waivers, approvals, authorizations or
orders (other than those set forth in Article IX(a)) required to be obtained
by Acquisition and FBOP shall have been obtained and copies of the same shall
have been delivered to Holding Company.
(c) Compliance with Covenants. Acquisition and FBOP shall have
performed in all material respects all obligations and agreements and complied
in all material respects with all
33
covenants and conditions contained in this Agreement to be performed and
complied with by them at or prior to the Effective Time.
(d) Opinion of Counsel. Holding Company shall have received the
opinion of Lord, Bissell & Brook, counsel for Acquisition, specified in
Article X(c)(ii).
(e) Fairness Opinion. Holding Company shall have received an opinion
from Keefe, Bruyette dated as of the date of this Agreement to the effect
that, in its opinion, the consideration to be paid to the shareholders of
Holding Company hereunder is fair to such shareholders from a financial point
of view.
(f) Effective Time. The Effective Time shall be no later than 5:00
P.M. Central Time on June 30, 2001; provided however, that if the condition
in Article IX(a) shall not have been satisfied prior to June 30, 2001, but all
other conditions to Closing shall be substantially satisfied, the Effective
Time shall automatically be extended for an additional period of 90 days.
(g) Funds to Paying Agent. FBOP or Acquisition shall have made
available to the Paying Agent the funds as described at Article I(l) hereof.
ARTICLE IX
CONDITIONS APPLICABLE TO ACQUISITION, FBOP AND HOLDING COMPANY
The obligations of Acquisition, FBOP and Holding Company under this
Agreement to cause this Agreement to become effective and have the
transactions contemplated hereby be consummated are subject to the following
terms and conditions:
(a) Governmental Approvals. To the extent required by applicable law
or regulation, the OTS, the Federal Reserve Board, the FDIC and/or such other
state or federal agencies whose approval of the Transaction and the other
transactions contemplated by this Agreement is so required, shall have
approved or authorized the Transaction and all of the transactions
contemplated by this Agreement and such approval (x) shall not contain
conditions that, individually or in the aggregate, could likely have or lead
to a Material Adverse Effect on FBOP, CNB or Acquisition or (y) shall not,
individually or in the aggregate, so materially reduce the economic or
business benefits of the transactions contemplated by this Agreement to FBOP
that had such condition or requirement been known, FBOP, in its reasonable
judgment, would not have entered into this Agreement. All other statutory or
regulatory requirements for the valid consummation of the Transaction shall
have been satisfied and all other required governmental consents and approvals
shall have been obtained.
(b) Injunction. The consummation of the Merger shall not have been
restrained, enjoined or prohibited by any court or governmental authority of
competent jurisdiction. No
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material litigation or administrative proceeding
shall be pending or threatened as of the Effective Time seeking to restrain,
enjoin or prohibit the consummation of this Agreement, the Merger or the
Transaction.
ARTICLE X
CLOSING AND CLOSING DOCUMENTS
(a) Closing. The closing ("Closing") under this Agreement shall be
held at the offices of Lord, Bissell & Brook in Los Angeles, California, as
promptly as practicable after the fulfillment or waiver of all the terms and
conditions contained in Articles VII, VIII, IX and X of this Agreement, or at
such other place and time as shall be mutually agreeable to the parties. The
required number of fully executed and verified copies of the Certificate of
Merger shall be filed immediately after the Closing with the Secretary of
State of Delaware.
(b) Holding Company Closing Documents. At the Closing, Holding
Company shall deliver, or cause to be delivered, to FBOP and Acquisition:
(i) A certificate of Holding Company, signed by its Chairman or
President, which shall confirm the compliance in all material respects
by Holding Company with its covenants and agreements contained in this
Agreement and the accuracy in all material respects of the
representations and warranties made by Holding Company in this Agreement
at and as of the Effective Time as if made at such time and as
contemplated by this Agreement.
(ii) The opinion of Elias, Matz, Tiernan & Herrick L.L.P.,
counsel for Holding Company, dated the Effective Time, and in form and
substance reasonably satisfactory to FBOP and Acquisition.
(iii) A certificate of Holding Company's inspector of
elections as to the vote taken at the meeting of the holders of shares of
Holding Company Common Stock with respect to this Agreement and as to the
holders of shares of Holding Company Common Stock that shall have
demanded payment of the fair value of their shares of Holding Company
Common Stock pursuant to the DGCL.
(iv) Written resignations, effective the Effective Time, of all
of the directors of Holding Company and the Subsidiaries.
(v) Certificate of Incorporation and Certificate of Good
Standing of Holding Company each certified by the Secretary of State of
Delaware within ten (10) days prior to the Closing.
35
(c) Acquisition Closing Documents. At the Closing, Acquisition shall
deliver, or cause to be delivered, to Holding Company:
(i) A Certificate of Acquisition, signed by its President
or Vice President, which shall confirm the compliance in all
material respects by Acquisition with its covenants and agreements
contained in this Agreement and the accuracy in all material
respects of the representations and warranties made by it in this
Agreement at and as of the Effective Time as if made at such time
and as contemplated by this Agreement.
(ii) The opinion of Lord, Bissell & Brook, counsel for
Acquisition, dated the Effective Time, and in form and substance
reasonably satisfactory to Holding Company.
ARTICLE XI
TERMINATION AND TERMINATION FEE
(a) Termination. This Agreement and the Transaction may be terminated
at any time prior to the filing of the Certificate of Merger with the
Secretary of State of Delaware, whether before or after action by the
stockholders of Holding Company as contemplated by Article V(k) of this
Agreement and without further approval by the outstanding stockholders of
Holding Company (i) by mutual written consent of the Boards of Directors of
Acquisition and Holding Company, (ii) by action of the Board of Directors of
Acquisition in the event of a failure of a condition set forth in Article VII
of this Agreement as of the time such condition is required hereunder to be
fulfilled, (iii) by action of the Board of Directors of Holding Company in the
event of failure of a condition set forth in Article VIII of this Agreement as
of the time such condition is required hereunder to be fulfilled, or (iv) by
action of the Board of Directors of either Acquisition or Holding Company in
the event of a failure of a condition set forth in Article IX of this
Agreement as of the time such condition is required hereunder to be fulfilled,
or (v) by action of the Board of Directors of Acquisition or FBOP at any time
on or prior to December 21, 2000 if the results of FBOP's investigation of the
business, operations, assets, liabilities, capital, prospects, investments,
affairs, condition (financial or otherwise) of Holding Company and its
Subsidiaries are not satisfactory to FBOP or Acquisition in their sole
discretion, whether or not any of the foregoing would constitute a Material
Adverse Change.
(b) Termination Fee. If Holding Company and Acquisition fail to
consummate the Merger and (i) Holding Company or Savings Institution enters
into a letter of intent, commitment letter or other written agreement with a
third party regarding a merger, consolidation, sale of assets or other similar
transaction involving Holding Company or Savings Institution within twelve
(12) months following the termination of the Merger, and (ii) Holding Company
shall not have terminated this Agreement by reason of
36
paragraphs (a)(iii) or (a)(iv) above, and (iii) Acquisition shall not have
terminated this Agreement by reason of paragraph (a)(i) or (a)(v) above,
Holding Company shall, upon execution of any such letter or agreement, promptly
pay Ten Million Dollars ($10,000,000) to FBOP, and Holding Company shall have
no further liability or obligation to FBOP or Acquisition with respect to this
Agreement.
(c) Survival of Rights. Except as otherwise provided in paragraph (b)
above, nothing in this Article XI or in this Agreement shall be construed as
limiting the rights of any party in the event of a breach by any party of this
Agreement.
ARTICLE XII
SURVIVAL OF REPRESENTATIONS, WARRANTIES AND COVENANTS
Except for the agreements set forth in Articles I, II(ad), V(j), VI(e),
VI(f), VI(g), VII(g),XI, XII, XIII(a), XIII(f) and XIII(g), no representations,
warranties or agreements shall survive beyond the Effective Time.
ARTICLE XIII
MISCELLANEOUS
(a) Payment of Expenses. Whether or not the Merger shall be
consummated, each party hereto shall pay its own expenses incident to
preparing for, entering into and carrying out this Agreement and incident to
the consummation of the Merger and the Transaction.
(b) Entire Agreement. This Agreement (together with the Schedules and
Exhibits hereto and the documents referred to herein) contains, and is
intended as, a complete statement of all of the terms of the arrangements
between the parties with respect to the matters provided for herein, and
supersedes any previous agreements and understandings between the parties with
respect to those matters.
(c) Modifications, Amendments and Waivers. At any time prior to the
Effective Time, the parties hereto may, by written agreement, (a) extend the
time for the performance of any of the obligations or other acts of the
parties hereto, (b) waive any inaccuracies in the representations and
warranties contained in this Agreement or in any document delivered pursuant
hereto, (c) waive compliance with any of the covenants or agreements contained
in this Agreement, or (d) make any other modification of this Agreement
approved by the respective Boards of Directors of the parties hereto. This
Agreement shall not be altered or otherwise amended except pursuant to an
instrument in writing executed and delivered on behalf of each of the parties
hereto. For the convenience of the parties hereto, this Agreement may be
executed in any number of counterparts, and each such counterpart shall be
deemed to be an original instrument, and all such counterparts shall together
constitute the same agreement.
37
(d) Assignment; Governing Law. Except as provided in Article I(a)
hereto, this Agreement shall not be assignable by any of the parties hereto
and shall be construed in accordance with the laws of the State of Illinois.
(e) Schedules. All information set forth in the Schedules hereto
shall be deemed a representation and warranty of Holding Company as to the
accuracy and completeness of such information.
(f) Press Releases. Except as may otherwise be required by law, no
publicity release or announcement concerning this Agreement or the
transactions contemplated hereby shall be made prior to the Effective Time
without advance approval thereof by Holding Company and FBOP. Holding Company
and FBOP will cooperate with each other in the development and distribution of
all news releases and other public information disclosures with respect to
this Agreement, the Transaction or any of the transactions contemplated hereby
or thereby.
(g) Notices. Any notice, request, instruction or other document to be
given hereunder by any party to the others shall be in writing and delivered
personally or sent by registered or certified mail, postage prepaid, overnight
express service or confirmed facsimile transmission as follows:
If to Holding Company: PBOC Holdings, Inc.
5900 Wilshire Blvd.
Los Angeles, CA 90036
Facsimile: 323-965-6216
Attn: Rudolf P. Guenzel
With a copy to: Elias, Matz, Tiernan & Herrick L.L.P.
734 15th Street, N.W.
Washington, D.C. 20005
Facsimile: 202-347-2172
Attn: Norman B. Antin
Jeffrey D. Haas
If to FBOP or
Acquisition: FBOP Corporation
11 West Madison Street
Oak Park, IL 60302
Facsimile: 708-445-3223
Attn: Michael E. Kelly
38
With a copy to: Lord, Bissell & Brook
115 S. LaSalle Street
Chicago, IL 60603
Facsimile: 312-443-0336
Attn: Edward C. Fitzpatrick
(h) Attorneys' Fees. If any action at law or in equity, including an
action for declaratory relief is brought to enforce or interpret the
provisions of this Agreement, the prevailing party shall be entitled to
recover reasonable attorneys' fees from the other party, which fees shall be
in addition to any other relief which may be awarded.
39
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed and delivered as of the day and year first above written.
PBOC HOLDINGS, INC.
Attest:
_________________________ By: _________________________
Name: _________________________
Title: _________________________
FBOP ACQUISITION COMPANY
Attest:
_________________________ By: _________________________
Name: _________________________
Title: _________________________
FBOP CORPORATION
Attest:
_________________________ By: _________________________
Name: _________________________
Title: _________________________
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