<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(AMENDMENT NO. 9)
DEGEORGE FINANCIAL CORPORATION
------------------------------------
(Name of Issuer)
Common Stock, par value $.10 per share
----------------------------------------------
(Title of Class of Securities)
244783 10 6
------------------
(CUSIP Number)
Jonathan K. Dodge, Esq.
Vice President, Secretary and General Counsel
DeGeorge Financial Corporation
99 Realty Drive
Cheshire, Connecticut 06410
Tel. (203) 699-3400
----------------------------------------------------
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
January 29, 1998
---------------------------
(Date of Event which Requires
Filing of This Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box: / /
Check the following box if a fee is being paid with this statement: / /
<PAGE>
CUSIP No. 244783-10-6
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1) Name of Reporting Person BNC Acquisition Corp.
S.S. or I.R.S. Identification No. of Above 41-1651186
Person
- --------------------------------------------------------------------------------
2) Check the Appropriate (a) [x]
Box if a Member of a (b) [ ]
Group
- --------------------------------------------------------------------------------
3) SEC Use Only
- --------------------------------------------------------------------------------
4) Source of Funds 00
- --------------------------------------------------------------------------------
5) Check if Disclosure Not Applicable
of Legal Proceedings
is Required Pursuant
to Items 2(d) or 2(e)
- --------------------------------------------------------------------------------
6) Citizenship or Place Delaware
of Organization
- --------------------------------------------------------------------------------
Number of Shares 7) Sole Voting Power 5,668,570 shares of
Beneficially Owned by Each Common Stock, $.10 par
Reporting Person With: value
8) Shared Voting Power -0-
9) Sole Dispositive 5,668,570 shares of
Power Common Stock, $.10 par
value
10) Shared Dispositive -0-
Power
- --------------------------------------------------------------------------------
11) Aggregate Amount Beneficially Owned by Each 5,668,570 shares of
Reporting Person Common Stock, $.10 par
value
- --------------------------------------------------------------------------------
12) Check if the Aggregate Amount in Row (11)
Excludes Certain Shares
- --------------------------------------------------------------------------------
13) Percent of Class Represented by Amount in Row 52.4%
(11)
- --------------------------------------------------------------------------------
14) Type of Reporting Person CO/HC
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CUSIP No. 244783-10-6
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1) Name of Reporting Person Peter R. DeGeorge
S.S. or I.R.S. Identification No. of Above
Person
- --------------------------------------------------------------------------------
2) Check the Appropriate (a) [x]
Box if a Member of a (b) [ ]
Group
- --------------------------------------------------------------------------------
3) SEC Use Only
- --------------------------------------------------------------------------------
4) Source of Funds PF
- --------------------------------------------------------------------------------
5) Check if Disclosure [X]
of Legal Proceedings
is Required Pursuant
to Items 2(d) or 2(e)
- --------------------------------------------------------------------------------
6) Citizenship or Place United States of
of Organization America
- --------------------------------------------------------------------------------
Number of Shares 7) Sole Voting Power 5,801,903 shares of
Beneficially Owned by Each Common Stock, $.10 par
Reporting Person With: value
8) Shared Voting Power -0-
9) Sole Dispositive 5,801,903 shares of
Power Common Stock, $.10 par
value
10) Shared Dispositive -0-
Power
- --------------------------------------------------------------------------------
11) Aggregate Amount Beneficially Owned by Each 5,801,903 shares of
Reporting Person Common Stock, $.10 par
value
- --------------------------------------------------------------------------------
12) Check if the Aggregate Amount in Row (11)
Excludes Certain Shares
- --------------------------------------------------------------------------------
13) Percent of Class Represented by Amount in Row 53.7%
(11)
- --------------------------------------------------------------------------------
14) Type of Reporting Person IN
- --------------------------------------------------------------------------------
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<PAGE>
CUSIP No. 244783-10-6
- --------------------------------------------------------------------------------
1) Name of Reporting Person Herbert L. Getzler
S.S. or I.R.S. Identification No. of Above
Person
- --------------------------------------------------------------------------------
2) Check the Appropriate (a) [x]
Box if a Member of a (b) [ ]
Group
- --------------------------------------------------------------------------------
3) SEC Use Only
- --------------------------------------------------------------------------------
4) Source of Funds PF
- --------------------------------------------------------------------------------
5) Check if Disclosure Not Applicable
of Legal Proceedings
is Required Pursuant
to Items 2(d) or 2(e)
- --------------------------------------------------------------------------------
6) Citizenship or Place United States of
of Organization America
- --------------------------------------------------------------------------------
Number of Shares 7) Sole Voting Power 515,000 shares of
Beneficially Owned by Each Common Stock, $.10 par
Reporting Person With: value
8) Shared Voting Power -0-
9) Sole Dispositive 515,000 shares of
Power Common Stock, $.10 par
value
10) Shared Dispositive -0-
Power
- --------------------------------------------------------------------------------
11) Aggregate Amount Beneficially Owned by Each 515,000 shares of
Reporting Person Common Stock, $.10 par
value
- --------------------------------------------------------------------------------
12) Check if the Aggregate Amount in Row (11)
Excludes Certain Shares
- --------------------------------------------------------------------------------
13) Percent of Class Represented by Amount in Row 4.8%
(11)
- --------------------------------------------------------------------------------
14) Type of Reporting Person IN
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<PAGE>
CUSIP No. 244783-10-6
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1) Name of Reporting Person James G. Einloth
S.S. or I.R.S. Identification No. of Above
Person
- --------------------------------------------------------------------------------
2) Check the Appropriate (a) [x]
Box if a Member of a (b) [ ]
Group
- --------------------------------------------------------------------------------
3) SEC Use Only
- --------------------------------------------------------------------------------
4) Source of Funds PF
- --------------------------------------------------------------------------------
5) Check if Disclosure Not Applicable
of Legal Proceedings
is Required Pursuant
to Items 2(d) or 2(e)
- --------------------------------------------------------------------------------
6) Citizenship or Place United States of
of Organization America
- --------------------------------------------------------------------------------
Number of Shares 7) Sole Voting Power 315,666 shares of
Beneficially Owned by Each Common Stock, $.10 par
Reporting Person With: value
8) Shared Voting Power -0-
9) Sole Dispositive 315,666 shares of
Power Common Stock, $.10 par
value
10) Shared Dispositive -0-
Power
- --------------------------------------------------------------------------------
11) Aggregate Amount Beneficially Owned by Each 315,666 shares of
Reporting Person Common Stock, $.10 par
value
- --------------------------------------------------------------------------------
12) Check if the Aggregate Amount in Row (11)
Excludes Certain Shares
- --------------------------------------------------------------------------------
13) Percent of Class Represented by Amount in Row 2.9%
(11)
- --------------------------------------------------------------------------------
14) Type of Reporting Person IN
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<PAGE>
CUSIP No. 244783-10-6
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1) Name of Reporting Person Jonathan K. Dodge
S.S. or I.R.S. Identification No. of Above
Person
- --------------------------------------------------------------------------------
2) Check the Appropriate (a) [x]
Box if a Member of a (b) [ ]
Group
- --------------------------------------------------------------------------------
3) SEC Use Only
- --------------------------------------------------------------------------------
4) Source of Funds PF
- --------------------------------------------------------------------------------
5) Check if Disclosure Not Applicable
of Legal Proceedings
is Required Pursuant
to Items 2(d) or 2(e)
- --------------------------------------------------------------------------------
6) Citizenship or Place United States of
of Organization America
- --------------------------------------------------------------------------------
Number of Shares 7) Sole Voting Power 153,166 shares of
Beneficially Owned by Each Common Stock, $.10 par
Reporting Person With: value
8) Shared Voting Power -0-
9) Sole Dispositive 153,166 shares of
Power Common Stock, $.10 par
value
10) Shared Dispositive -0-
Power
- --------------------------------------------------------------------------------
11) Aggregate Amount Beneficially Owned by Each 153,166 shares of
Reporting Person Common Stock, $.10 par
value
- --------------------------------------------------------------------------------
12) Check if the Aggregate Amount in Row (11)
Excludes Certain Shares
- --------------------------------------------------------------------------------
13) Percent of Class Represented by Amount in Row 1.4%
(11)
- --------------------------------------------------------------------------------
14) Type of Reporting Person IN
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CUSIP No. 244783-10-6
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1) Name of Reporting Person Lawrence J. DeGeorge
S.S. or I.R.S. Identification No. of Above
Person
- --------------------------------------------------------------------------------
2) Check the Appropriate (a) [x]
Box if a Member of a (b) [ ]
Group
- --------------------------------------------------------------------------------
3) SEC Use Only
- --------------------------------------------------------------------------------
4) Source of Funds PF
- --------------------------------------------------------------------------------
5) Check if Disclosure Not Applicable
of Legal Proceedings
is Required Pursuant
to Items 2(d) or 2(e)
- --------------------------------------------------------------------------------
6) Citizenship or Place United States of
of Organization America
- --------------------------------------------------------------------------------
Number of Shares 7) Sole Voting Power 52,500 shares of Common
Beneficially Owned by Each Stock, $.10 par value
Reporting Person With:
8) Shared Voting Power -0-
9) Sole Dispositive 52,500 shares of Common
Power Stock, $.10 par value
10) Shared Dispositive -0-
Power
- --------------------------------------------------------------------------------
11) Aggregate Amount Beneficially Owned by Each 52,500 shares of Common
Reporting Person Stock, $.10 par value
- --------------------------------------------------------------------------------
12) Check if the Aggregate Amount in Row (11)
Excludes Certain Shares
- --------------------------------------------------------------------------------
13) Percent of Class Represented by Amount in Row 0.5%
(11)
- --------------------------------------------------------------------------------
14) Type of Reporting Person IN
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<PAGE>
CUSIP No. 244783-10-6
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1) Name of Reporting Person Florence A. DeGeorge
S.S. or I.R.S. Identification No. of Above
Person
- --------------------------------------------------------------------------------
2) Check the Appropriate (a) [x]
Box if a Member of a (b) [ ]
Group
- --------------------------------------------------------------------------------
3) SEC Use Only
- --------------------------------------------------------------------------------
4) Source of Funds PF
- --------------------------------------------------------------------------------
5) Check if Disclosure Not Applicable
of Legal Proceedings
is Required Pursuant
to Items 2(d) or 2(e)
- --------------------------------------------------------------------------------
6) Citizenship or Place United States of
of Organization America
- --------------------------------------------------------------------------------
Number of Shares 7) Sole Voting Power 35,000 shares of Common
Beneficially Owned by Each Stock, $.10 par value
Reporting Person With:
8) Shared Voting Power -0-
9) Sole Dispositive 35,000 shares of Common
Power Stock, $.10 par value
10) Shared Dispositive -0-
Power
- --------------------------------------------------------------------------------
11) Aggregate Amount Beneficially Owned by Each 35,000 shares of Common
Reporting Person Stock, $.10 par value
- --------------------------------------------------------------------------------
12) Check if the Aggregate Amount in Row (11)
Excludes Certain Shares
- --------------------------------------------------------------------------------
13) Percent of Class Represented by Amount in Row 0.3%
(11)
- --------------------------------------------------------------------------------
14) Type of Reporting Person IN
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<PAGE>
CUSIP No. 244783-10-6
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1) Name of Reporting Person Lawrence F. DeGeorge
S.S. or I.R.S. Identification No. of Above
Person
- --------------------------------------------------------------------------------
2) Check the Appropriate (a) [x]
Box if a Member of a (b) [ ]
Group
- --------------------------------------------------------------------------------
3) SEC Use Only
- --------------------------------------------------------------------------------
4) Source of Funds PF
- --------------------------------------------------------------------------------
5) Check if Disclosure Not Applicable
of Legal Proceedings
is Required Pursuant
to Items 2(d) or 2(e)
- --------------------------------------------------------------------------------
6) Citizenship or Place United States of
of Organization America
- --------------------------------------------------------------------------------
Number of Shares 7) Sole Voting Power 400,000 shares of
Beneficially Owned by Each Common Stock, $.10 par
Reporting Person With: value
8) Shared Voting Power -0-
9) Sole Dispositive 400,000 shares of
Power Common Stock, $.10 par
value
10) Shared Dispositive -0-
Power
- --------------------------------------------------------------------------------
11) Aggregate Amount Beneficially Owned by Each 400,000 shares of
Reporting Person Common Stock, $.10 par
value
- --------------------------------------------------------------------------------
12) Check if the Aggregate Amount in Row (11)
Excludes Certain Shares
- --------------------------------------------------------------------------------
13) Percent of Class Represented by Amount in Row 3.7%
(11)
- --------------------------------------------------------------------------------
14) Type of Reporting Person IN
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<PAGE>
CUSIP No. 244783-10-6
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1) Name of Reporting Person Mary M. Dunn
S.S. or I.R.S. Identification No. of Above
Person
- --------------------------------------------------------------------------------
2) Check the Appropriate (a) [x]
Box if a Member of a (b) [ ]
Group
- --------------------------------------------------------------------------------
3) SEC Use Only
- --------------------------------------------------------------------------------
4) Source of Funds PF
- --------------------------------------------------------------------------------
5) Check if Disclosure Not Applicable
of Legal Proceedings
is Required Pursuant
to Items 2(d) or 2(e)
- --------------------------------------------------------------------------------
6) Citizenship or Place United States of
of Organization America
- --------------------------------------------------------------------------------
Number of Shares 7) Sole Voting Power 130,000 shares of
Beneficially Owned by Each Common Stock, $.10 par
Reporting Person With: value
8) Shared Voting Power -0-
9) Sole Dispositive 130,000 shares of
Power Common Stock, $.10 par
value
10) Shared Dispositive -0-
Power
- --------------------------------------------------------------------------------
11) Aggregate Amount Beneficially Owned by Each 130,000 shares of
Reporting Person Common Stock, $.10 par
value
- --------------------------------------------------------------------------------
12) Check if the Aggregate Amount in Row (11)
Excludes Certain Shares
- --------------------------------------------------------------------------------
13) Percent of Class Represented by Amount in Row 1.2%
(11)
- --------------------------------------------------------------------------------
14) Type of Reporting Person IN
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<PAGE>
CUSIP No. 244783-10-6
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1) Name of Reporting Person DeGeorge Financial
S.S. or I.R.S. Identification No. of Above Acquisition Corp.
Person
- --------------------------------------------------------------------------------
2) Check the Appropriate (a) [x]
Box if a Member of a (b) [ ]
Group
- --------------------------------------------------------------------------------
3) SEC Use Only
- --------------------------------------------------------------------------------
4) Source of Funds PF
- --------------------------------------------------------------------------------
5) Check if Disclosure Not Applicable
of Legal Proceedings
is Required Pursuant
to Items 2(d) or 2(e)
- --------------------------------------------------------------------------------
6) Citizenship or Place United States of
of Organization America
- --------------------------------------------------------------------------------
Number of Shares 7) Sole Voting Power -0-
Beneficially Owned by Each
Reporting Person With:
8) Shared Voting Power -0-
9) Sole Dispositive -0-
Power
10) Shared Dispositive -0-
Power
- --------------------------------------------------------------------------------
11) Aggregate Amount Beneficially Owned by Each -0-
Reporting Person
- --------------------------------------------------------------------------------
12) Check if the Aggregate Amount in Row (11)
Excludes Certain Shares
- --------------------------------------------------------------------------------
13) Percent of Class Represented by Amount in Row 0.0%
(11)
- --------------------------------------------------------------------------------
14) Type of Reporting Person CO
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<PAGE>
CUSIP No. 244783-10-6
AMENDMENT NO. 9 TO SCHEDULE 13D
Reference is hereby made to the statement on Schedule 13D as originally
filed with the Securities and Exchange Commission on December 21, 1992 and
amended by Amendment No. 1 (dated January 15 1993), Amendment No. 2 (dated July
8, 1993), Amendment No. 3 (dated October 18, 1993), Amendment No. 4 (dated March
10, 1994), Amendment No. 5 (dated November 9, 1994), Amendment No. 6 (dated
April 30, 1996), Amendment No. 7 (dated January 6, 1997) and Amendment No. 8
(dated September 12, 1997) thereto (as so amended, the "Schedule 13D"). Terms
defined in the Schedule 13D and not otherwise defined herein are used herein as
so defined.
The Schedule 13D is amended as follows:
Item 1. SECURITY AND ISSUER.
The class of equity securities to which this statement relates is the
common stock, par value $.10 per share (the "DFC Common Stock"), of DeGeorge
Financial Corporation, a Delaware corporation ("DFC"), formerly known as Miles
Homes, Inc. The principal executive office of DFC is located at 99 Realty
Drive, Cheshire, Connecticut 06410.
Item 2. IDENTITY AND BACKGROUND
This statement is being filed pursuant to Section 13(d)(1) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and Rule 13d-1
promulgated thereunder by the following corporation and individuals (the "Filing
Parties"):
1. BNC Acquisition Corp. ("BNC") is a privately-owned corporation
organized under the laws of the state of Delaware. Its principal business
is that of a holding company. The address of BNC's principal business and
principal office is c/o DeGeorge Homes of Florida, Inc.
("DeGeorge/Florida"), 140 Intracoastal Pointe Drive, Suite 410, Jupiter,
Florida 33477.
2. Peter R. DeGeorge's present principal occupation or employment is
Chairman of the Board and Chief Executive Officer of DFC. DFC arranges
financing and is currently managing over $200 million in underwritten
construction loans. It provides access to home ownership for people who
lack a sufficient down payment or sufficient income to support the purchase
of the home they desire through conventional mortgage programs. Through
its packaging of financial services and customer support, the Company
enables its customers to reduce the cost of home construction by
eliminating the general contractor, the intent of which is to create an
equity position that serves as the down payment for permanent financing
upon the conclusion of the home construction process. DFC's address is 99
Realty Drive, Cheshire, Connecticut 06410. Mr. DeGeorge is also Chairman
of the Board, Chief Executive Officer and President of
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CUSIP No. 244783-10-6
BNC. His business address is c/o DeGeorge/Florida, 140 Intracoastal Pointe
Drive, Suite 410, Jupiter, Florida 33477.
3. Herbert L. Getzler's present principal occupation or employment
is retired. His residence is 2702 Captains Way, Jupiter, Florida 33477.
4. James G. Einloth's present principal occupation or employment is
President of DeGeorge/Florida. His business address is c/o
DeGeorge/Florida, 140 Intracoastal Pointe Drive, Suite 410, Jupiter,
Florida 33477.
5. Jonathan K. Dodge's present principal occupation or employment is
Vice President, Secretary and General Counsel of DFC. His business address
is c/o DeGeorge Home Alliance, Inc., a Delaware corporation ("DHA"),
591 Park Avenue, New York, New York 10021.
6. Lawrence J. DeGeorge's present principal occupation is managing
personal investments. His business address is c/o DeGeorge/Florida, 140
Intracoastal Pointe Drive, Suite 410, Jupiter, Florida 33477.
7. Florence A. DeGeorge's present principal occupation is homemaker.
Her address is c/o DeGeorge/Florida, 140 Intracoastal Pointe Drive, Suite
410, Jupiter, Florida 33477.
8. Lawrence F. DeGeorge's present principal occupation is managing
personal investments. His residence is 3127 Casseekey Island Road,
Jupiter, Florida 33477.
9. Mary M. Dunn's present principal occupation is homemaker. Her
residence is 210 Weise Road, Cheshire, Connecticut 06410.
10. DeGeorge Financial Acquisition Corp. ("DFC Acquisition") is a
privately-owned corporation organized under the laws of the state of
Delaware. Its principal business is to acquire by merger the Non-Affiliate
Shares (as defined in Item 4). The address of DFC Acquisition's principal
business and principal office is c/o DFC, 99 Realty Drive, Cheshire,
Connecticut 06410.
The name, business address and present principal occupation or
employment of each executive officer and director of BNC and DFC Acquisition
(the "BNC Officers") is set forth in Schedule I hereto, which is incorporated
herein by reference.
None of the Filing Parties nor any of the BNC Officers has, during the
last five years, been convicted in a criminal proceeding (excluding traffic
violations or similar misdemeanors).
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<PAGE>
CUSIP No. 244783-10-6
On November 13, 1997, the Company issued a press release announcing
that it had reached a settlement (the "Settlement") with the Securities and
Exchange Commission (the "Commission") regarding an investigation of the
Company, certain of its officers, directors, employees, affiliates and other
persons or entities. The investigation was related to transactions between
the Company and its directors, officers, its major stockholder, BNC, which is
wholly owned by Peter R. DeGeorge, and other related entities. BNC, its
wholly-owned subsidiary, Star Services, Inc. of Delaware ("Star Services"),
and others also received subpoenas as part of the investigation. Under the
Settlement, the Company consented to a cease and desist order in a Commission
administrative proceeding without admitting or denying the Commission's
findings. In addition, as required by the Settlement, the Company hired a
consultant acceptable to the staff of the Commission to advise the Company
with respect to improving procedures relating to the approval, recording and
disclosure of related party transactions. The Company also has agreed to
adopt the recommendations of such consultant unless such recommendations are
impractical or unduly burdensome. The Company is not paying any fine or
civil penalty under the Settlement.
In a separate proceeding, Peter R. DeGeorge, Chairman of the Board and
Chief Executive Officer of the Company, settled with the Commission certain
charges, without admitting or denying the Commission's allegations. He agreed
to the entry of an injunction against him prohibiting future violations of the
federal securities laws and further agreed to the payment of a civil penalty of
$50,000 and a payment in the nature of restitution to the Company of $248,000
(which includes $44,000 of prejudgment interest).
Item 3. SOURCE AND AMOUNT OF FUNDS AND OTHER CONSIDERATION.
It is expected that approximately $6.9 million will be necessary to
effect the proposal to acquire Non-Affiliated Shares described in Item 4 below.
It is expected that the Filing Parties or an affiliate of the Filing Parties
will borrow some or all of such funds from an entity controlled by Peter
DeGeorge's father, Lawrence J. DeGeorge.
Of the 5,668,570 shares of DFC Common Stock currently owned by BNC,
4,475,744 shares were owned by Milestar, Inc., a Delaware corporation
("Milestar"), prior to the merger of Milestar with and into DFC on October 13,
1994 (the "Merger"). Of these shares, 80,333 shares had been received by
Milestar as a capital contribution in October 1990 from BNC and had originally
been issued to Mr. DeGeorge for consideration of $.10 per share from his
personal funds. Another 3,000 shares of DFC Common Stock were received by
Milestar as a capital contribution in October 1990 from James G. Einloth and had
originally been issued to Mr. Einloth for consideration of $.10 per share from
his personal funds. An additional 3,075,830 shares of DFC Common Stock were
received by Milestar as a result of a stock split which took place immediately
prior to DFC's initial public offering (the "Offering"), the registration
statement for which (File No. 33-50696) was declared effective on December 3,
1992. Milestar received 1,720,581 shares of DFC Common Stock in a share
exchange immediately prior to the Offering pursuant to which BNC contributed to
Milestar, which in turn contributed to DFC, all
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CUSIP No. 244783-10-6
of the outstanding 12 1/2% Cumulative Preferred Stock of DHA, a subsidiary of
DFC formerly known as Miles Homes Services, Inc., in exchange for 545 shares
of Milestar common stock (to BNC) and 1,720,581 shares of DFC Common Stock
(to Milestar). BNC received 4,475,744 shares of DFC Common Stock in the
Merger, as described below. The remaining 1,192,826 shares of DFC Common
Stock currently owned by BNC were contributed to BNC by Peter R. DeGeorge in
the second quarter of 1998.
The DFC Common Stock bought by Mary M. Dunn (formerly Mary M.
DeGeorge) in June of 1993 was purchased using $620,097.20 of her own personal
funds. These shares were transferred to Mr. Peter R. DeGeorge as part of their
divorce settlement in 1995.
On September 23, 1993, Peter R. DeGeorge loaned $2 million to DFC
pursuant to a note which was later converted into DFC Common Stock as described
below. The $2 million loan was made with his own personal funds.
The DFC Common Stock bought by Peter R. DeGeorge in July of 1994 was
purchased using $244,688 of his own personal funds. The DFC Common Stock bought
by Peter R. DeGeorge on December 14, 1995 was purchased using $494,504 of his
own personal funds. The DFC Common Stock bought by Peter R. DeGeorge on
December 17, 1996 was purchased using $182,817 of his own personal funds. The
DFC Common Stock bought by Peter R. DeGeorge on April 15, 1997 was purchased
using $112,129.88 of his own personal funds. All of such shares were
contributed to BNC in the second quarter of 1998.
The 465,000 shares of DFC Common Stock owned by Herbert L. Getzler
were purchased using $46,500 of his own personal funds.
The 279,000 shares of DFC Common Stock owned by James G. Einloth were
purchased using $27,900 of his own personal funds.
The 19,500 shares of DFC Common Stock owned by Jonathan K. Dodge were
purchased using $66,500 of his own personal funds.
The 52,500 shares of DFC Common Stock owned by Lawrence J. DeGeorge
were purchased using $206,875 of his own personal funds.
The 35,000 shares of DFC Common Stock owned by Florence A. DeGeorge
were purchased using $122,500 of her own personal funds.
Of the 400,000 shares of DFC Common Stock owned by Lawrence F.
DeGeorge 100,000 shares were purchased using $625,000 of his own personal funds
and 300,000 were purchased using $1,500,000 of his own personal funds.
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<PAGE>
CUSIP No. 244783-10-6
The 130,000 shares of DFC Common Stock owned by Mary M. Dunn were
purchased using approximately $260,000 of her own personal funds.
Item 4. PURPOSE OF TRANSACTION.
The Filing Parties have engaged in the transactions described herein
for the purpose of acquiring through a merger all of the outstanding shares of
Common Stock of DFC not currently owned by them (the "Non-Affiliated Shares").
By letter dated September 12, 1997, Peter R. DeGeorge submitted a
proposal (the "Proposal") to the Board of Directors of DFC to acquire the
Non-Affiliated Shares for $1.30 in cash per share. After negotiations between
Mr. DeGeorge and a special committee of independent directors (the "Special
Committee"), the Proposal was amended on December 3, 1997 to provide for a per
share merger consideration of $1.50.
On January 29, 1998, DFC and the Filing Parties executed a definitive
agreement (the "Merger Agreement"), whereby each Non-Affiliated Share will be
converted into the right to receive $1.50 in cash.
The Merger Agreement and the consideration to be received by
holders of shares of DFC Common Stock (other than the Filing Parties) were
approved by the Company's board of directors following the unanimous
recommendation of the Special Committee. The Special Committee was advised
by Houlihan Lokey Howard & Zukin Capital which provided their opinion that
the consideration to be received by DFC's stockholders (other than the Filing
Parties) in this merger is fair to them from a financial point of view.
The merger is subject to obtaining all necessary corporate and
regulatory approvals, but is not subject to financing. The Filing Parties
expect to complete the merger by July 31, 1998.
Item 5. INTEREST IN SECURITIES OF THE ISSUER.
(a) The following information is based upon 10,810,193 shares of DFC
Common Stock outstanding:
(i) BNC owns 5,668,570 shares of DFC Common Stock, or
approximately 52.4% of the DFC Common Stock outstanding.
(ii) Peter R. DeGeorge owns 100% of the capital stock of BNC, and
therefore may be deemed to beneficially own the shares of DFC Common
Stock owned by BNC.
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<PAGE>
CUSIP No. 244783-10-6
(iii) Peter R. DeGeorge has outstanding stock options, which
would enable him to acquire 400,000 shares of DFC Common Stock at an
option exercise price of $1.50 per share. Such options were
previously subject to earnings criteria that have been eliminated by
the Board of Directors of DFC. Of such amount, options to purchase
133,333 shares of DFC Common Stock are currently exercisable.
(iv) Herbert L. Getzler owns 465,000 shares of DFC Common Stock,
or approximately 4.3% of the DFC Common Stock outstanding. He has
sole power to vote, direct the vote of, dispose and direct the
disposition of all such shares. Mr. Getzler has a currently
exercisable outstanding option to purchase 50,000 shares of DFC Common
Stock at an option exercise price of $1.50 per share.
(v) James G. Einloth owns 279,000 shares of DFC Common Stock, or
approximately 2.6% of the DFC Common Stock outstanding. He has sole
power to vote, direct the vote of, dispose and direct the disposition
of all such shares. Mr. Einloth has outstanding options to purchase
110,000 shares of DFC Common Stock, of which options to purchase
36,666 shares are currently exercisable.
(vi) Jonathan K. Dodge owns 19,500 shares of DFC Common Stock, or
approximately .2% of the DFC Common Stock outstanding. He has sole
power to vote, direct the vote of, dispose and direct the
disposition of all such shares. Mr. Dodge has outstanding options
to purchase (a) 67,000 shares of DFC Common Stock at an option
exercise price of $3.50 per share, which option expires on April 29,
2003, (b) 50,000 shares of DFC Common Stock at an option exercise
price of $2.00 per share, which option expires on December 12, 2004
and (c) 50,000 shares of DFC Common Stock at an option exercise price
of $1.25 per share, which option expires on March 14, 2007. The
options set forth in (a) and (b) above and options to purchase
16,666 shares set forth in (c) above are currently exercisable.
(vii) Lawrence J. DeGeorge owns 52,500 shares of DFC Common
Stock, or approximately 0.5% of the DFC Common Stock outstanding.
He has sole power to vote, direct the vote of, dispose and direct the
disposition of all such shares.
(viii) Florence A. DeGeorge owns 35,000 shares of DFC Common
Stock, or approximately 0.3% of the DFC Common Stock outstanding. She
has sole power to vote, direct the vote of, dispose and direct the
disposition of all such shares.
(ix) Lawrence F. DeGeorge owns 400,000 shares of DFC Common
Stock, or approximately 3.7% of the DFC Common Stock outstanding.
He has
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<PAGE>
CUSIP No. 244783-10-6
sole power to vote, direct the vote of, dispose and direct the
disposition of all such shares.
(x) Mary M. Dunn owns 130,000 shares of DFC Common Stock, or
approximately 1.2% of the DFC Common Stock outstanding. She has
sole power to vote, direct the vote of, dispose and direct the
disposition of all such shares.
(xi) DFC Acquisition was formed to effect the acquisition of the
Non-Affiliated Shares. It owns no shares of DFC Common Stock.
(b) BNC has sole power to vote or to direct the vote of all shares of
DFC Common Stock referred to in paragraph (i) above and sole power to dispose or
to direct the disposition of all such shares. Mr. DeGeorge is deemed to have
the sole power to vote or to direct the vote and to dispose of or direct the
disposition of the shares of DFC Common Stock owned by BNC by virtue of his
ownership of 100% of the issued and outstanding stock of BNC.
(c) None of the Filing Parties has effected any transactions in DFC
Common Stock during the past 60 days except as described herein.
(d) No other person is known to have the right to receive or the
power to direct the receipt of dividends from, or the proceeds from the sale of,
the shares of DFC Common Stock beneficially owned by the Filing Parties.
Item 7. MATERIAL TO BE FILED AS EXHIBITS.
Exhibit 7(a) Agreement and Plan of Merger among the Filing Parties
and DFC dated January 29, 1998
Exhibit 7(b) Agreement Concerning Joint Filing of Schedule 13D
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<PAGE>
CUSIP No. 244783-10-6
SCHEDULE I
INFORMATION WITH RESPECT TO DIRECTORS AND
EXECUTIVE OFFICERS OF BNC ACQUISITION CORP.
AND DFC ACQUISITION CORP.
I. DIRECTORS AND EXECUTIVE OFFICERS
The following table sets forth the name and present principal occupation or
employment of each of the current directors and executive officers of each of
BNC and DFC Acquisition Corp. The present business address of Mr. DeGeorge is
c/o DeGeorge/Florida, 140 Intracoastal Pointe Drive, Suite 410, Jupiter, Florida
33477. The present business address of Mr. Dodge is 591 Park Avenue, New York,
New York 10021.
NAME PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT
Peter R. DeGeorge Chairman of the Board and Chief Executive
Officer of DFC; Chairman of the Board,
President and Chief Executive Officer of BNC
and DFC Acquisition Corp.
Jonathan K. Dodge Vice President, Secretary and General Counsel
of DFC; Vice President, Secretary and a
director of BNC and DFC Acquisition Corp.
DeGeorge Financial Corporation arranges financing and is currently managing
over $200 million in underwritten construction loans. It provides access to
home ownership for people who lack a sufficient down payment or sufficient
income to support the purchase of the home they desire through conventional
mortgage programs. Through its packaging of financial and customer support, the
Company enables its customers to reduce the cost of home construction by
eliminating the general contractor, the intent of which is to create an equity
position that serves as the down payment for permanent financing upon the
conclusion of the home construction process.
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<PAGE>
CUSIP No. 244783-10-6
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Dated: June 11, 1998
BNC ACQUISITION CORP.
By: /s/ Peter R. DeGeorge
--------------------------------
Name: Peter R. DeGeorge
Title: Chairman and Chief Executive
Officer
/s/ Peter R. DeGeorge
---------------------------------------
Peter R. DeGeorge
/s/ Herbert L. Getzler
---------------------------------------
Herbert L. Getzler
/s/ James G. Einloth
---------------------------------------
James G. Einloth
/s/ Jonathan K. Dodge
---------------------------------------
Jonathan K. Dodge
/s/ Lawrence J. DeGeorge
---------------------------------------
Lawrence J. DeGeorge
/s/ Florence A. DeGeorge
---------------------------------------
Florence A. DeGeorge
/s/ Lawrence F. DeGeorge
---------------------------------------
Lawrence F. DeGeorge
<PAGE>
CUSIP No. 244783-10-6
/s/ Mary M. Dunn
---------------------------------------
Mary M. Dunn
DEGEORGE FINANCIAL ACQUISITION CORP.
/s/ Peter R. DeGeorge
---------------------------------------
By: Peter R. DeGeorge
Title: President
<PAGE>
CUSIP No. 244783-10-6
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT DESCRIPTION
- ------------------------ ----------------------------------------------------
<S> <C>
Exhibit 7(a) Agreement and Plan of Merger among the Filing
Parties and DFC dated January 29, 1998
Exhibit 7(b) Agreement Concerning Joint Filing of Schedule 13D
</TABLE>
<PAGE>
AGREEMENT AND PLAN OF MERGER
among
PETER R. DEGEORGE,
DEGEORGE FINANCIAL ACQUISITION CORP.
BNC ACQUISITION CORP.,
THE CONTINUING STOCKHOLDERS named herein,
and
DEGEORGE FINANCIAL CORPORATION
January 29, 1998
<PAGE>
TABLE OF CONTENTS
ARTICLE I
THE SPECIAL MEETING . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
SECTION 1.1 MEETING OF THE COMPANY'S STOCKHOLDERS. . . . . . . . . . . . 2
SECTION 1.2 PROXY STATEMENT; SCHEDULE 13E-3. . . . . . . . . . . . . . . 2
ARTICLE II
THE CONTRIBUTION AND THE MERGER . . . . . . . . . . . . . . . . . . . . . 3
SECTION 2.1 THE CONTRIBUTION. . . . . . . . . . . . . . . . . . . . . . 3
SECTION 2.2 THE MERGER.. . . . . . . . . . . . . . . . . . . . . . . . . 3
SECTION 2.3 EFFECTIVE TIME; CLOSING. . . . . . . . . . . . . . . . . . . 3
SECTION 2.4 EFFECT OF THE MERGER.. . . . . . . . . . . . . . . . . . . . 4
SECTION 2.5 CONVERSION OF SHARES.. . . . . . . . . . . . . . . . . . . . 4
SECTION 2.6 STOCK OPTIONS. . . . . . . . . . . . . . . . . . . . . . . . 5
SECTION 2.7 SURRENDER OF SHARES; STOCK TRANSFER BOOKS. . . . . . . . . . 5
ARTICLE III
THE SURVIVING CORPORATION . . . . . . . . . . . . . . . . . . . . . . . . 7
SECTION 3.1 CERTIFICATE OF INCORPORATION.. . . . . . . . . . . . . . . . 7
SECTION 3.2 BYLAWS . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
SECTION 3.3 DIRECTORS AND OFFICERS.. . . . . . . . . . . . . . . . . . . 7
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE COMPANY . . . . . . . . . . . . . . 7
SECTION 4.1 ORGANIZATION AND STANDING. . . . . . . . . . . . . . . . . . 7
SECTION 4.2. CAPITALIZATION. . . . . . . . . . . . . . . . . . . . . . . 8
SECTION 4.3 AUTHORITY FOR AGREEMENT. . . . . . . . . . . . . . . . . . . 8
SECTION 4.4 NO CONFLICT. . . . . . . . . . . . . . . . . . . . . . . . . 9
SECTION 4.5 REQUIRED FILINGS AND CONSENTS. . . . . . . . . . . . . . . . 9
SECTION 4.6 COMPLIANCE.. . . . . . . . . . . . . . . . . . . . . . . . . 9
SECTION 4.7 REPORTS AND FINANCIAL STATEMENTS.. . . . . . . . . . . . . . 9
SECTION 4.8 ABSENCE OF CERTAIN CHANGES OR EVENTS.. . . . . . . . . . . .10
SECTION 4.9 CHANGE OF CONTROL AGREEMENTS. . . . . . . . . . . . . . . .10
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF DFC ACQUISITION . . . . . . . . . . . .10
SECTION 5.1 ORGANIZATION AND STANDING. . . . . . . . . . . . . . . . . .10
SECTION 5.2 CAPITALIZATION OF DFC ACQUISITION.. . . . . . . . . . . . . .11
SECTION 5.3 AUTHORITY FOR AGREEMENT. . . . . . . . . . . . . . . . . . .11
SECTION 5.4 NO CONFLICT. . . . . . . . . . . . . . . . . . . . . . . . .11
SECTION 5.5 REQUIRED FILINGS AND CONSENTS. . . . . . . . . . . . . . . .11
SECTION 5.6 SUBSIDIARIES AND EQUITY INVESTMENTS . . . . . . . . . . . . .12
SECTION 5.7 NO KNOWLEDGE OF CERTAIN FACTS . . . . . . . . . . . . . . . .12
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<PAGE>
ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF BNC AND THE CONTINUING
STOCKHOLDERS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .12
SECTION 6.1 ORGANIZATION AND STANDING. . . . . . . . . . . . . . . . . .12
SECTION 6.2 AUTHORITY FOR AGREEMENT. . . . . . . . . . . . . . . . . . .12
SECTION 6.3 NO CONFLICT. . . . . . . . . . . . . . . . . . . . . . . . .12
SECTION 6.4 REQUIRED FILINGS AND CONSENTS. . . . . . . . . . . . . . . .13
SECTION 6.5 SHARE OWNERSHIP. . . . . . . . . . . . . . . . . . . . . . .13
SECTION 6.6 CAPITALIZATION OF BNC. . . . . . . . . . . . . . . . . . . .13
SECTION 6.7 NO KNOWLEDGE OF CERTAIN FACTS. . . . . . . . . . . . . . . .13
ARTICLE VII
COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .13
SECTION 7.1 CONDUCT OF THE BUSINESS PENDING THE MERGER. . . . . . . . .13
SECTION 7.2 ACCESS TO INFORMATION, CONFIDENTIALITY.. . . . . . . . . . .15
SECTION 7.3 NOTIFICATION OF CERTAIN MATTERS. . . . . . . . . . . . . . .15
SECTION 7.4 FURTHER ACTION; REASONABLE BEST EFFORTS. . . . . . . . . . .16
SECTION 7.5 INDEMNIFICATION. . . . . . . . . . . . . . . . . . . . . . .16
SECTION 7.6 PUBLIC ANNOUNCEMENTS.. . . . . . . . . . . . . . . . . . . .17
SECTION 7.7 NO MERGERS, CONSOLIDATIONS, SALE OF STOCK.. . . . . . . . . .17
SECTION 7.8 CONDUCT OF DFC ACQUISITION. . . . . . . . . . . . . . . . . .17
SECTION 7.9 NO SALE OR DISPOSITION. . . . . . . . . . . . . . . . . . . .17
SECTION 7.10 EXPENSES.. . . . . . . . . . . . . . . . . . . . . . . . . .17
SECTION 7.11 FURTHER ASSURANCES.. . . . . . . . . . . . . . . . . . . . .18
ARTICLE VIII
CONDITIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .18
SECTION 8.1 CONDITIONS TO THE OBLIGATION OF EACH PARTY.. . . . . . . . .18
SECTION 8.2 CONDITIONS TO THE OBLIGATION OF THE COMPANY. . . . . . . . .19
SECTION 8.3 CONDITIONS TO THE OBLIGATION OF THE PURCHASER GROUP. . . . .19
ARTICLE IX
TERMINATION, AMENDMENT AND WAIVER . . . . . . . . . . . . . . . . . . . .20
SECTION 9.1 TERMINATION. . . . . . . . . . . . . . . . . . . . . . . . .20
SECTION 9.2 EFFECT OF TERMINATION. . . . . . . . . . . . . . . . . . . .20
SECTION 9.3 AMENDMENTS.. . . . . . . . . . . . . . . . . . . . . . . . .20
SECTION 9.4 WAIVER.. . . . . . . . . . . . . . . . . . . . . . . . . . .20
ARTICLE X
GENERAL PROVISIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . .21
SECTION 10.1 NO THIRD PARTY BENEFICIARIES. . . . . . . . . . . . . . . .21
SECTION 10.2 ENTIRE AGREEMENT. . . . . . . . . . . . . . . . . . . . . .21
SECTION 10.3 SUCCESSION AND ASSIGNMENT.. . . . . . . . . . . . . . . . .21
SECTION 10.4 COUNTERPARTS. . . . . . . . . . . . . . . . . . . . . . . .21
SECTION 10.5 HEADINGS. . . . . . . . . . . . . . . . . . . . . . . . . .21
SECTION 10.6 GOVERNING LAW.. . . . . . . . . . . . . . . . . . . . . . .21
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<PAGE>
SECTION 10.7 SEVERABILITY. . . . . . . . . . . . . . . . . . . . . . . .21
SECTION 10.8 SPECIFIC PERFORMANCE. . . . . . . . . . . . . . . . . . . .22
SECTION 10.9 CONSTRUCTION. . . . . . . . . . . . . . . . . . . . . . . .22
SECTION 10.10 NON-SURVIVAL OF REPRESENTATIONS AND WARRANTIES.. . . . . .22
SECTION 10.11 CERTAIN DEFINITIONS. . . . . . . . . . . . . . . . . . . .22
SECTION 10.12 FEES AND EXPENSES. . . . . . . . . . . . . . . . . . . . .22
SECTION 10.13 NOTICES. . . . . . . . . . . . . . . . . . . . . . . . . .22
-iii-
<PAGE>
INDEX TO DEFINED TERMS
<TABLE>
<CAPTION>
Defined Term Where Defined
- ------------ -------------
<S> <C>
Advisor. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Recitals
Advisor's Opinion. . . . . . . . . . . . . . . . . . . . . . . . . . Section 4.3
Agreement. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Introduction
Blue Sky Laws. . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 4.5
BNC. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Introduction
Canceled Share . . . . . . . . . . . . . . . . . . . . . . . Section 2.5(a)(iii)
Certificate of Merger. . . . . . . . . . . . . . . . . . . . . . . . Section 2.3
Code . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Section 2.6(e)
Company Board. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Recitals
Company Bylaws . . . . . . . . . . . . . . . . . . . . . . . . . .Section 4.1(a)
Company Certificate of Incorporation . . . . . . . . . . . . . . .Section 4.1(a)
Company Option . . . . . . . . . . . . . . . . . . . . . . . . . .Section 2.6(a)
Company Reports. . . . . . . . . . . . . . . . . . . . . . . . . . . Section 4.7
Company Stock Option Plan. . . . . . . . . . . . . . . . . . . . .Section 2.6(a)
Continuing Stockholders. . . . . . . . . . . . . . . . . . . . . . .Introduction
Continuing Stockholders' Shares. . . . . . . . . . . . . . . . . . . . .Recitals
Contribution . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 2.1
DeGeorge . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Introduction
DeGeorge Shares. . . . . . . . . . . . . . . . . . . . . . . . . . . . .Recitals
Delaware Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 2.2
DFCA Common. . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 2.1
DFC Acquisition. . . . . . . . . . . . . . . . . . . . . . . . . . .Introduction
Dissenting Shares. . . . . . . . . . . . . . . . . . . . . . . . .Section 2.5(b)
Dissenting Stockholder . . . . . . . . . . . . . . . . . . . . . .Section 2.5(b)
Effective Time . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 2.3
Exchange Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 1.2
Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . Section 4.7
Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Section 2.7(a)
Indemnified Party. . . . . . . . . . . . . . . . . . . . . . . . .Section 7.5(a)
Material Adverse Effect. . . . . . . . . . . . . . . . . . . . . . . Section 4.1
Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Recitals
Paying Agent . . . . . . . . . . . . . . . . . . . . . . . . . . .Section 2.7(a)
Preferred Shares . . . . . . . . . . . . . . . . . . . . . . . . . . Section 4.2
Proxy Statement. . . . . . . . . . . . . . . . . . . . . . . . . . . Section 1.2
Purchaser Group. . . . . . . . . . . . . . . . . . . . . . . . . . .Introduction
Schedule 13E-3 . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 1.2
SEC. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 1.2
Share Certificates . . . . . . . . . . . . . . . . . . . . . . . .Section 2.7(b)
Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Recitals
Special Committee. . . . . . . . . . . . . . . . . . . . . . . . . . . .Recitals
Special Meeting. . . . . . . . . . . . . . . . . . . . . . . . . . . Section 1.1
Subsidiary . . . . . . . . . . . . . . . . . . . . . . . . . . . .Section 4.1(b)
-iv-
<PAGE>
Transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 1.2
</TABLE>
-v-
<PAGE>
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER (the "Agreement") dated as of
January 29, 1998, among DeGeorge Financial Corporation, a Delaware
corporation (the "Company"), Peter R. DeGeorge ("DeGeorge"), DeGeorge
Financial Acquisition Corp., a Delaware corporation wholly owned by DeGeorge
("DFC Acquisition"), BNC Acquisition Corp., a Delaware corporation wholly
owned by DeGeorge ("BNC"), and Herbert L. Getzler, James G. Einloth, Jonathan
K. Dodge, Lawrence J. DeGeorge, Florence A. DeGeorge, Lawrence F. DeGeorge
and Mary M. Dunn (collectively, the "Continuing Stockholders" and, together
with DeGeorge, DFC Acquisition and BNC, are collectively referred to as the
"Purchaser Group").
W I T N E S S E T H
WHEREAS, as of the date hereof, DeGeorge owns (without giving
effect to any shares of Common Stock of the Continuing Stockholders that
DeGeorge may be deemed to beneficially own) 5,668,570 shares (the "DeGeorge
Shares") of the common stock, par value $.10 per share, of the Company (the
"Shares"), of which 4,475,444 Shares are owned by BNC and 1,193,126 Shares
are owned by DeGeorge, representing approximately 52.4% of the total number
of Shares issued and outstanding as of the date hereof;
WHEREAS, as of the date hereof, the Continuing Stockholders own
(without giving effect to any Shares of DeGeorge that such Continuing
Stockholders may be deemed to beneficially own) an aggregate of 1,381,000
Shares (the "Continuing Stockholders' Shares"), consisting of 465,000 Shares
owned by Mr. Getzler, 279,000 Shares owned by Mr. Einloth, 19,500 Shares
owned by Mr. Dodge, 52,500 Shares owned by Lawrence J. DeGeorge, 35,000
Shares owned by Ms. DeGeorge, 400,000 Shares owned by Lawrence F. DeGeorge
and 130,000 Shares owned by Ms. Dunn, together representing approximately
12.8% of the total number of Shares issued and outstanding as of the date
hereof;
WHEREAS, 1,231,000 of the Continuing Stockholders' Shares,
representing approximately 11.4% of the total number of Shares, will be
contributed to DFC Acquisition immediately prior to the Effective Time of the
Merger (each as defined herein);
WHEREAS, the parties hereto desire to effect the merger of DFC
Acquisition with and into the Company (the "Merger") pursuant to the terms of
this Agreement;
WHEREAS, the Special Committee (the "Special Committee") of
independent directors of the Board of Directors of the Company (the "Company
Board") has unanimously (i) recommended that the Company Board approve and
authorize the Special Meeting (as defined below), the Proxy Statement (as
defined below), the Merger and this Agreement, which recommendation was based
in part on the opinion of Houlihan Lokey Howard & Zukin Capital (the
"Advisor"), independent financial advisors to the Special Committee, and (ii)
determined that the consideration to be received by the stockholders of the
Company (other than members of the Purchaser Group) in the Merger is fair to
and in the best interest of such stockholders;
<PAGE>
WHEREAS, the Board of Directors of the Company has determined
that the Merger contemplated hereby is fair to and in the best interests of
the Company and its stockholders;
WHEREAS, the Board of Directors of DFC Acquisition has determined
that the Merger contemplated hereby is fair to and in the best interests of
DFC Acquisition and its stockholder;
NOW, THEREFORE, in consideration of the foregoing and the
respective representations, warranties, covenants and agreements contained in
this Agreement, the parties hereto agree as follows:
ARTICLE I
THE SPECIAL MEETING
SECTION 1.1 MEETING OF THE COMPANY'S STOCKHOLDERS. The Company will
take all action necessary in accordance with applicable law to convene a meeting
of its stockholders (the "Special Meeting") as promptly as practicable after the
date hereof to consider and vote upon the Merger. The Board of Directors of the
Company, subject to its fiduciary duties as advised by counsel, will recommend
that the Company's stockholders vote in favor of the Merger and the approval and
adoption of this Agreement.
SECTION 1.2 PROXY STATEMENT; SCHEDULE 13E-3. As soon as reasonably
practicable following the date hereof, the Company shall file with the
Securities and Exchange Commission (the "SEC") under the Securities Exchange Act
of 1934, as amended, (the "Exchange Act"), and shall use its best efforts to
have cleared by the SEC, a proxy statement (together with any amendments or
supplements thereto, the "Proxy Statement"), with respect to the Special
Meeting. In addition, the Company and DFC Acquisition shall file with the SEC
and make available to the Company's stockholders, as required by applicable law,
a joint Rule 13e-3 Transaction Statement on Schedule 13E-3 (together with any
amendments or supplements thereto, the "Schedule 13E-3") with respect to the
Special Meeting, the Merger and the other transactions contemplated hereby
(collectively, the "Transactions"). The Purchaser Group and the Company shall
also take any action required to be taken under Blue Sky Laws (as defined below)
in connection with the Merger. The Purchaser Group and the Company shall
cooperate with each other in taking such action and in the preparation of each
of the Proxy Statement and the Schedule 13E-3. The Purchaser Group will provide
all information relating to the Purchaser Group or its affiliates (other than
the Company and its subsidiaries) for use in preparation of the Proxy Statement
and Schedule 13E-3. The Company will provide all information (other than that
relating to DFC Acquisition, BNC and the Purchaser Group or their respective
affiliates (other than the Company and its subsidiaries)) for use in the Proxy
Statement and in the Schedule 13E-3. The information provided and to be
provided by the Purchaser Group, DFC Acquisition and BNC, for use in the Proxy
Statement and in the Schedule 13E-3 shall be true and correct in all material
respects and shall not omit to state any material fact necessary in order to
make such information not misleading as of the date of the Proxy Statement or
the Schedule 13E-3, as the case may be, and as of the date of the Special
Meeting. The information provided and to be provided by the Company for use in
the Proxy Statement and in the Schedule 13E-3 shall be true and correct in all
material respects and shall not omit to state any material fact necessary in
order
-2-
<PAGE>
to make such information not misleading as of the date of the Proxy Statement or
the Schedule 13E-3, as the case may be, and as of the date of the Special
Meeting. The Company shall give the Purchaser Group and their counsel
reasonable opportunity to review and comment upon the Proxy Statement and the
Schedule 13E-3 and any amendments thereto prior to the filing thereof with the
SEC and prior to dissemination of the Proxy Statement to holders of Shares. The
Company shall provide the Purchaser Group and their counsel with a copy of any
written comments or telephonic notification of any verbal comments the Company
may receive from the SEC or its staff with respect to the Proxy Statement and
the Schedule 13E-3 promptly after the receipt thereof, shall permit the
Purchaser Group and their counsel to participate in the preparation of any
written responses or any verbal responses of the Company or its counsel and
shall provide the Purchaser Group and their counsel with a copy of any written
responses and telephonic notification of any verbal responses of the Company or
its counsel. Each of the Company and the Purchaser Group agrees to use its
reasonable best efforts, after consultation with the other parties hereto, to
respond promptly to all such comments of or requests by the SEC and to cause the
Proxy Statement and all required amendments and supplements to be mailed to the
holders of Shares entitled to vote at the Special Meeting at the earliest
practicable time. The Proxy Statement shall contain the recommendation of the
Company Board referred to in Section 1.1 as well as the conclusion of the
Company Board that the terms and conditions of the Merger are fair to the
stockholders of the Company (other than members of the Purchaser Group).
ARTICLE II
THE CONTRIBUTION AND THE MERGER
SECTION 2.1 THE CONTRIBUTION. Immediately prior to the Effective
Time (as defined below), DeGeorge, BNC and the Continuing Stockholders shall
contribute or cause to be contributed (the "Contribution") all Shares owned by
them, other than 150,000 Shares beneficially owned by Mr. Getzler, to DFC
Acquisition in exchange for an equal number of shares of common stock, par value
$.01 per share, of DFC Acquisition (the "DFCA Common").
SECTION 2.2 THE MERGER. Upon the terms and subject to the conditions
set forth in this Agreement, and in accordance with the General Corporation Law
of the State of Delaware ("Delaware Law"), at the Effective Time, DFC
Acquisition shall be merged with and into the Company, and as a result of the
Merger, the separate corporate existence of DFC Acquisition shall cease and the
Company shall continue as the surviving corporation of the Merger. In its
capacity as the surviving corporation of the Merger, the Company is sometimes
referred to herein as the "Surviving Corporation.''
SECTION 2.3 EFFECTIVE TIME; CLOSING. As promptly as practicable
after the Contribution and the satisfaction or, if permissible, waiver of the
conditions set forth in Article VIII, the Company and DFC Acquisition shall file
a certificate of merger (the "Certificate of Merger") with the Secretary of
State of the State of Delaware, in such form as is required by, and executed in
accordance with, the relevant provisions of Delaware Law. The Merger shall
become effective at such time as the Certificate of Merger is duly filed with
the Secretary of State of the State of Delaware, or at such other time as the
parties hereto agree shall be specified in the Certificate of Merger (the date
and time the Merger becomes effective, the "Effective Time"). On the date of
such
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filing, a closing shall be held at the offices of Kirkland & Ellis, New York,
New York, or such other place as the parties shall agree.
SECTION 2.4 EFFECT OF THE MERGER. From and after the Effective Time,
the Surviving Corporation shall possess all the rights, privileges, powers and
franchises and be subject to all of the restrictions, disabilities and duties of
the Company and DFC Acquisition, all as provided under Delaware Law.
SECTION 2.5 CONVERSION OF SHARES.
(a) At the Effective Time:
(i) each Share held by the Company as treasury stock
immediately prior to the Effective Time or owned by any direct or indirect
subsidiary of the Company immediately prior to the Effective Time shall be
canceled, and no payment shall be made with respect thereto;
(ii) each Share other than Canceled Shares (as defined below)
outstanding immediately prior to the Effective Time shall, except as otherwise
provided in paragraph (a)(i) or paragraph (b) of this Section 2.5, be converted
into the right to receive in cash without interest $1.50 (the "Merger
Consideration");
(iii) each Share held by the Purchaser Group (other than
150,000 Shares held by Mr. Getzler) outstanding following the Contribution and
immediately prior to the Effective Time (a "Canceled Share" and, collectively,
the "Canceled Shares") shall, by virtue of the Merger, and without any action on
the part of the holder thereof, be canceled and retired and cease to exist,
without any conversion thereof; provided, however, that in connection with, and
only in connection with, the consummation of the Merger, each member of the
Purchaser Group (except Mr. Getzler with respect to 150,000 Shares) waives such
member's right to receive the Merger Consideration and consents to being treated
less favorably than the other stockholders of the Company; and
(iv) each share of common stock of DFC Acquisition outstanding
immediately prior to the Effective Time shall be converted into and become one
share of common stock of the Surviving Corporation and shall constitute the only
outstanding shares of capital stock of the Surviving Corporation.
(b) Anything in this Agreement to the contrary notwithstanding, any
issued and outstanding Shares held by a person (a "Dissenting Stockholder") who
objects to , does not vote in favor of, or has not consented in writing to, the
Merger and complies with all the provisions of Delaware Law concerning the right
of holders of Shares to dissent from the Merger and require appraisal of their
Shares ("Dissenting Shares") shall not be converted as described in Section
2.5(a)(ii) but shall become, by virtue of the Merger, the right to receive such
consideration as may be determined to be due to such Dissenting Stockholder
pursuant to Delaware Law unless such Dissenting Stockholder withdraws his demand
for or fails to perfect or loses his right to appraisal. If, after the
Effective Time, such Dissenting Stockholder withdraws his demand for appraisal
or fails to perfect or otherwise loses his right of appraisal, in any case
pursuant to Delaware Law, such Dissenting Shares shall be deemed to have been
converted as of the Effective Time into the right to
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receive the Merger Consideration without any interest thereon or addition
thereto. The Company shall give DeGeorge (i) prompt notice of any demands for
appraisal of Shares received by the Company and (ii) the opportunity to
participate in and direct all negotiations and proceedings with respect to any
such demands. The Company shall not, without the prior written consent of
DeGeorge, make any payment with respect to, or settle, offer to settle or
otherwise negotiate, any such demands.
SECTION 2.6 STOCK OPTIONS.
(a) At the Effective Time, (i) each holder of an option to purchase
Shares issued pursuant to the DeGeorge Financial Corporation 1994 Stock Option
and Restricted Stock Plan (the "Company Stock Option Plan" and each option
issued thereunder, a "Company Option") shall continue to hold such option to
purchase shares of common stock of the Surviving Corporation and (ii) such
option shall remain subject to all the terms and conditions (including with
respect to the exercisability thereof) applicable to such Company Option
pursuant to the option agreement related to such Company Option and to the
Company Stock Option Plan pursuant to which such Company Option was issued.
(b) Notwithstanding anything to the contrary in this Agreement,
immediately prior to the Effective Time, all Company Options held by John H.
Warren and P. Peter Pascali which are then outstanding and exercisable in full,
shall be canceled and each holder thereof shall be entitled to receive from DFC
Acquisition at the Effective Time an amount in cash equal $7,500. Appropriate
arrangements shall be made for reduction of the amount to be paid to each holder
of such canceled Company Options for any applicable withholding taxes or other
amounts required by law to be paid or withheld, either through reducing the
amount paid to or by obtaining a cash payment from, such holder.
SECTION 2.7 SURRENDER OF SHARES; STOCK TRANSFER BOOKS.
(a) Prior to the Effective Time, the Company, with the approval of
DeGeorge shall designate a bank or trust company to act as agent (the "Paying
Agent") for the holders of Shares in connection with the Merger to receive the
funds to which holders of Shares shall become entitled pursuant to Section
2.5(a)(ii). DFC Acquisition will deposit with the Paying Agent the aggregate
Merger Consideration to be paid in respect of the Shares (the "Fund"). The Fund
shall be invested by the Paying Agent as directed by DeGeorge. The Paying Agent
shall pay the Merger Consideration as provided in Section 2.7(b).
(b) Promptly after the Effective Time, the Surviving Corporation, or
the Paying Agent pursuant to an agreement in a form to be mutually agreed upon
by the Company and DFC Acquisition, shall cause to be mailed to each person who
was, at the Effective Time, a holder of record of Shares entitled to receive the
Merger Consideration pursuant to Section 2.5(a)(ii) and a holder of the Company
Options referred to in Section 2.6(b), a letter of transmittal (which shall
specify that delivery shall be effected, and risk of loss and title to the
certificates evidencing such Shares and such Company Options (the
"Certificates") shall pass, only upon proper delivery of the Certificates to the
Paying Agent) and instructions for use in effecting the surrender of the
Certificates pursuant to such letter of transmittal. Upon surrender to the
Paying Agent of a
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Certificate, together with such letter of transmittal, duly completed and
validly executed in accordance with the instructions thereto, and such other
documents as may be required pursuant to such instructions, the holder of such
Certificate shall be entitled to receive in exchange therefor the Merger
Consideration for each Share or Company Option, as applicable, formerly
evidenced by such Certificate, and such Certificate shall then be canceled.
Until so surrendered, each such Certificate shall, at and after the Effective
Time, represent for all purposes, only the right to receive such Merger
Consideration. No interest shall accrue or be paid to any beneficial owner of
Shares or Company Options referred to in Section 2.6(b) or any holder of any
Certificate with respect to the Merger Consideration payable upon the surrender
of any Certificate. If payment of the Merger Consideration is to be made to a
person other than the person in whose name the surrendered Certificate is
registered on the stock transfer books of the Company, it shall be a condition
of payment that the Certificate so surrendered shall be endorsed in blank or to
the Paying Agent or otherwise be in proper form for transfer and that the person
requesting such payment shall have paid all transfer and other taxes required by
reason of the payment of the Merger Consideration to a person other than the
registered holder of the Certificate surrendered or shall have established to
the satisfaction of the Surviving Corporation that such taxes either have been
paid or are not applicable. The Surviving Corporation shall establish
reasonable procedures for the delivery of the Merger Consideration to holders of
Shares whose stock certificates have been lost, destroyed or mutilated.
(c) At any time following the eighth month after the Effective Time,
the Surviving Corporation shall be entitled to require the Paying Agent to
deliver to it any portion of the Fund which had been made available to the
Paying Agent and not disbursed to holders of Shares (including, without
limitation, all interest and other income received by the Paying Agent in
respect of all amounts held in the Fund or other funds made available to it),
and thereafter each such holder shall be entitled to look only to the Surviving
Corporation (subject to abandoned property, escheat and other similar laws), and
only as general creditors thereof, with respect to any Merger Consideration that
may be payable upon due surrender of the Share Certificates held by such holder.
The foregoing notwithstanding, neither the Surviving Corporation nor the Paying
Agent shall be liable to any holder of a Share for any Merger Consideration
delivered in respect of such Share to a public official pursuant to any
abandoned property, escheat or other similar law.
(d) After the Effective Time, the stock transfer books of the Company
shall be closed and thereafter there shall be no further registration of
transfers of Shares on the records of the Company. From and after the Effective
Time, the holders of Shares outstanding immediately prior to the Effective Time
shall cease to have any rights with respect to such Shares except as otherwise
provided herein or by applicable law.
(e) The Paying Agent, and, after the release of funds described in
paragraph (c) above, the Surviving Corporation, shall be entitled to deduct and
withhold from the consideration otherwise payable pursuant to this Agreement to
any holder of Shares such amounts that the Paying Agent or the Surviving
Corporation, as applicable, is required to deduct and withhold with respect to
the making of such payment under the Internal Revenue Code of 1986, as amended
(the "Code"), the rules and regulations promulgated thereunder or any provision
of state, local or foreign tax law. To the extent that amounts are so withheld
by the Paying Agent or the Surviving Corporation, as applicable, such amounts
shall be treated for all purposes of this Agreement as having been paid to
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the holder of the Shares in respect of which such deduction and withholding was
made by the Paying Agent or the Surviving Corporation, as applicable.
ARTICLE III
THE SURVIVING CORPORATION
SECTION 3.1 CERTIFICATE OF INCORPORATION. At the Effective Time and
subject to the terms of Section 7.5, the certificate of incorporation of DFC
Acquisition shall be the certificate of incorporation of the Surviving
Corporation until thereafter amended in accordance with Delaware Law; provided,
however, that, at the Effective Time, Article I of the certificate of
incorporation of the Surviving Corporation shall be amended to read as follows:
"The name of the corporation is DeGeorge Financial Corporation".
SECTION 3.2 BYLAWS. Subject to the terms of Section 7.5, the bylaws
of DFC Acquisition in effect at the Effective Time shall be the bylaws of the
Surviving Corporation until amended in accordance with Delaware Law, and the
certificate of incorporation and such bylaws of the Surviving Corporation.
SECTION 3.3 DIRECTORS AND OFFICERS. From and after the Effective
Time, until successors are duly elected or appointed in accordance with
applicable law, (i) the directors of the Company at the Effective Time shall be
the directors of the Surviving Corporation, and (ii) the officers of the Company
at the Effective Time shall continue as the officers of the Surviving
Corporation in each ease until their respective successors are duly elected or
appointed and qualified.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to the Purchaser Group as follows:
SECTION 4.1 ORGANIZATION AND STANDING. (a) The Company is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Delaware and has full corporate power and authority to own its
properties and assets, to conduct its business as presently conducted and to
enter into and perform this Agreement and to carry out the Transactions. The
Company is duly qualified to do business as a foreign corporation and is in good
standing in every jurisdiction in which the failure to so qualify could have a
Material Adverse Effect (as defined below) on the Company. The Company has
furnished to DeGeorge true and complete copies of its certificate of
incorporation (the "Company Certificate of Incorporation") and bylaws (the
"Company Bylaws"), each as amended to date and presently in effect. "Material
Adverse Effect" shall mean, with respect to any party hereto, any change, event
or effect that, when taken together with all other adverse changes, events or
effects, is or is reasonably likely to be materially adverse to the business,
operations, properties, condition (financial or otherwise), assets, or
liabilities (including, without limitation, contingent liabilities) of such
party and its subsidiaries, taken as a whole.
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(b) Each Subsidiary of the Company is a corporation duly organized,
validly existing and in good standing under the laws of its jurisdiction of
incorporation and has full corporate power and authority to own its properties
and assets and to conduct its business as presently conducted. "Subsidiary"
means any corporation of which the Company owns, directly or indirectly, shares
of capital stock having in the aggregate 50% or more of the total combined
voting power of the issued and outstanding shares of capital stock entitled to
vote generally in the election of directors of such corporation. Schedule
4.1(b) contains a list of all the Subsidiaries together with the Company's
percentage of ownership of each such Subsidiary. Each Subsidiary is duly
qualified to do business as a foreign corporation and is in good standing in
every jurisdiction in which the failure to so qualify could have a Material
Adverse Effect on the Company or any of the Subsidiaries.
SECTION 4.2. CAPITALIZATION. The authorized capital stock of the
Company consists of 25,000,000 Shares and 1,000,000 shares of preferred stock,
$.10 par value per share (the "Preferred Shares"). As of the date hereof, (i)
10,810,193 Shares are issued and outstanding, all of which are validly issued,
fully paid and nonassessable, (ii) no Shares are held in the treasury of the
Company, (iii) 1,810,000 Shares are authorized and reserved for future issuance
under the Company Stock Option Plans, and (v) no Preferred Shares are issued and
outstanding. The Company has previously furnished to DeGeorge a detailed
schedule of outstanding Company Options, including, where available, the
exercise prices and existing provisions therefore. Except as provided in this
Section 4.2 and except for any rights of DeGeorge pursuant to prior agreements
between DeGeorge and the Company, (A) no subscription, warrant, option,
convertible security or other right (contingent or otherwise) to purchase or
acquire any shares of capital stock of the Company is authorized or outstanding,
(B) the Company has no obligation (contingent or otherwise) to issue any
subscription, warrant, option, convertible security or other such right or to
issue or distribute to holders of any shares of its capital stock any evidence
of indebtedness or assets of the Company, (C) the Company has no obligation
(contingent or otherwise) to purchase, redeem or otherwise acquire any shares of
its capital stock or any interest therein or to pay any dividend or make any
other distribution in respect thereof, (D) the Company has issued no stock
appreciation rights, phantom stock options or similar instruments and (E) no
outstanding shares of capital stock of the Company are subject to preemptive or
similar rights.
SECTION 4.3 AUTHORITY FOR AGREEMENT. The Company has the corporate
power to enter into this Agreement, to carry out its obligations hereunder, and
to consummate the Merger. The execution and delivery of this Agreement and the
performance of the Company's obligations hereunder have been duly authorized by
all necessary corporate action, including, without limitation, by the Company
Board. The consummation of the Merger has been duly authorized by all necessary
corporate action, other than the affirmative vote of the stockholders of the
Company in accordance with applicable law and this Agreement, and approval of
the Merger by the stockholders of the Company has been recommended by the
Company Board. The Advisor has delivered to the Special Committee its opinion
(the "Advisor's Opinion") that the Merger Consideration is fair from a financial
point of view to the holders of the Shares other than the Purchaser Group.
This Agreement has been duly executed by the Company and constitutes the valid
and binding obligation of the Company enforceable against the Company in
accordance with its terms, except (i) to the extent that enforceability may be
limited by applicable bankruptcy, insolvency, reorganization or other laws
affecting the enforcement of creditors' rights generally and (ii) that the
availability of
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equitable remedies, including specific performance, is subject to the discretion
of the court before which any proceeding therefor may be brought.
SECTION 4.4 NO CONFLICT. The execution and delivery of this
Agreement by the Company do not, and the performance of this Agreement by the
Company and the consummation of the Transactions will not, (i) conflict with or
violate the Company Certificate of Incorporation or Company Bylaws or equivalent
organizational documents of any of the Subsidiaries, (ii) conflict with or
violate any law, rule, regulation, order, judgment or decree applicable to the
Company or any of its subsidiaries or by which any property or asset of the
Company or any of the Subsidiaries is bound or affected, or (iii) result in any
breach of or constitute a default (or an event which with notice or lapse of
time or both would become a default) under, or give to others any right of
termination, amendment, acceleration or cancellation of, or result in the
creation of a lien or other encumbrance on any property or asset of the Company
or any of the Subsidiaries pursuant to, any note, bond, mortgage, indenture,
contract, agreement, lease, license, permit, franchise or other instrument or
obligation to which the Company or any of its subsidiaries is a party or by
which the Company or any of the Subsidiaries or any property or asset of any of
them is bound or affected, except (in the case of clauses (ii) and (iii) above
only) for such violations or breaches which would not, individually or in the
aggregate, have a material adverse effect on the business, assets or financial
condition of the Company and its Subsidiaries, taken as a whole.
SECTION 4.5 REQUIRED FILINGS AND CONSENTS. The execution and
delivery of this Agreement by the Company do not, and the performance of this
Agreement by the Company will not, require any consent, approval, authorization
or permit of, or filing with or notification to, any governmental or regulatory
authority, domestic or foreign, except for applicable requirements, if any, of
the Exchange Act, state securities or "blue sky" laws ("Blue Sky Laws") and
filing and recordation of appropriate merger documents as required by Delaware
Law.
SECTION 4.6 COMPLIANCE. Neither the Company nor any of the
Subsidiaries is in conflict with, or in default or violation of, (i) any law,
rule, regulation, order, judgment or decree applicable to the Company or any of
the Subsidiaries or by which any property, or asset of the Company or any of the
Subsidiaries is bound or affected, or (ii) any note, bond, mortgage, indenture,
contract, agreement, lease, license, permit, franchise or other instrument or
obligation to which the Company or any of the Subsidiaries is a party or by
which the Company or any of the Subsidiaries or any property or asset of the
Company or any of the Subsidiaries is bound or affected, except for any such
conflicts, defaults or violations that would not, individually of in the
aggregate, have a Material Adverse Effect on the Company, or prevent or
materially delay the performance by the Company of any of its obligations under
this Agreement or the consummation of the Transactions.
SECTION 4.7 REPORTS AND FINANCIAL STATEMENTS. The Company has
previously furnished to DeGeorge complete and accurate copies, as amended or
supplemented, of its (i) Annual Report on Form 10-K for the fiscal year ended
December 31, 1996, (ii) Quarterly Reports on Form 10-Q for the quarters ended
March 31, 1997, June 30, 1997 and September 30, 1997 and (iii) all other reports
or registration statements filed by the Company with the SEC since December 31,
1996 (such annual reports, quarterly reports, registration statements and other
filings, together with any amendments or supplements thereto, are collectively
referred to herein as the "Company Reports"). The Company Reports constitute
all of the documents filed or required to be filed by the Company
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with the SEC since December 31, 1996. As of their respective dates, the Company
Reports did not contain any untrue statement of a material fact or omit to state
a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading. The audited financial statements and unaudited interim
financial statements of the Company included in the Company Reports (together,
the "Financial Statements") (A) comply as to form in all material respects with
applicable accounting requirements and the published rules and regulations of
the SEC with respect thereto, (B) have been prepared in accordance with United
States generally accepted accounting principles ("GAAP") applied on a
consistent basis throughout the periods covered thereby except as may be
indicated therein or in the notes thereto, and in the case of quarterly
financial statements, as permitted by Form 10-Q under the Exchange Act), and (C)
fairly present in all material respects the consolidated financial condition,
results of operations and cash flows of the Company and its consolidated
subsidiaries as of the respective dates thereof and for the periods referred to
therein.
SECTION 4.8 ABSENCE OF CERTAIN CHANGES OR EVENTS. Except as
contemplated by this Agreement or as disclosed in the Company Reports filed
prior to the date hereof, since December 31, 1996, the Company and its
subsidiaries have conducted their respective businesses only in the ordinary
course and consistent with prior practice and, as of the date hereof, there has
not been (i) to the best of the Company's knowledge, any event or occurrence of
any condition that has had or would have a Material Adverse Effect on the
Company (other than changes due to industry wide events or general economic
conditions) or (ii) any material change in accounting methods, principles or
practices employed by the Company.
SECTION 4.9 CHANGE OF CONTROL AGREEMENTS. Neither the execution and
delivery of this Agreement nor the consummation of the Transactions, will
(either alone or in conjunction with any other event) result in, cause the
accelerated vesting or delivery of, or increase the amount or value of, any
payment or benefit to any employee of the Company. Without limiting the
generality of the foregoing, to the best of the Company's knowledge, no amount
paid or payable by the Company in connection with the Transactions (either
solely as a result thereof or as a result of such Transactions in conjunction
with any other event) will be an "excess parachute payment" within the meaning
of Section 280G of the Code.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF DFC ACQUISITION
DFC Acquisition represents and warrants to the Company as follows:
SECTION 5.1 ORGANIZATION AND STANDING. DFC Acquisition is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Delaware and has full corporate power and authority to conduct
its business as presently conducted and to enter into and perform this Agreement
and to carry out the Transactions. Since its date of incorporation, DFC
Acquisition has not engaged in any activities not related to the acquisition, or
proposed acquisition, of the Shares or the transactions contemplated by this
Agreement and the Merger, and as of the
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Effective Time, DFC Acquisition will have no liabilities other than those
incurred to facilitate or in connection with the acquisition, or proposed
acquisition, of Shares or the transactions contemplated by this Agreement and
the Merger.
SECTION 5.2 CAPITALIZATION OF DFC ACQUISITION. The authorized capital
stock of DFC Acquisition consists of (i) 15,000,000 shares of common stock, par
value $.01 per share, one share of which is issued and outstanding and owned of
record by DeGeorge on the date hereof and (ii) 1,000 shares of preferred stock,
par value $.01 per share, none of which are issued and outstanding on the date
hereof. Following the Contribution, and immediately prior to the Effective
Time, 6,899,571 shares of DFCA Common will be issued and outstanding, of which
4,475,444 will be owned of record by BNC, 1,193,127 by DeGeorge, 315,000 by Mr.
Getzler, 279,000 by Mr. Einloth, 19,500 by Mr. Dodge, 52,500 by Lawrence J.
DeGeorge, 35,000 by Ms. DeGeorge, 400,000 by Lawrence F. DeGeorge and 130,000 by
Ms. Dunn.
SECTION 5.3 AUTHORITY FOR AGREEMENT. DFC Acquisition has the
corporate power to enter into this Agreement and to carry out its obligations
hereunder. The execution and delivery of this Agreement, the performance of DFC
Acquisition's obligations hereunder and the consummation of the Merger have been
duly authorized by the Board of Directors and by the sole shareholder of DFC
Acquisition and no other proceedings on the part of DFC Acquisition are
necessary to authorize such execution, delivery and performance. This Agreement
has been duly executed and delivered DFC Acquisition and constitutes a legal,
valid and binding obligation of DFC Acquisition enforceable against DFC
Acquisition in accordance with its terms, except (i) to the extent that
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization or other laws affecting the enforcement of creditors' rights
generally and (ii) that the availability of equitable remedies, including
specific performance, is subject to the discretion of the court before which any
proceeding therefor may be brought.
SECTION 5.4 NO CONFLICT. The execution and delivery of this
Agreement by DFC Acquisition do not, and the performance of this Agreement by
DFC Acquisition and the consummation of the Transactions, will not, (i) conflict
with or violate the certificate of incorporation or bylaws of DFC Acquisition,
(ii) conflict with or violate any law, rule, regulation, order, judgment or
decree applicable to DFC Acquisition or by which any property or asset of DFC
Acquisition is bound or affected, or (iii) result in any breach of or constitute
a default (or an event which with notice or lapse of time or both would become a
default) under, or give to others any right of termination, amendment,
acceleration or cancellation of, or result in the creation of a lien or other
encumbrance on any property or asset of DFC Acquisition or any subsidiary of DFC
Acquisition pursuant to, any note, bond, mortgage, indenture, contract,
agreement, lease, license, permit, franchise or other instrument or obligation
to which DFC Acquisition or any subsidiary of DFC Acquisition is a party or by
which DFC Acquisition or any subsidiary of DFC Acquisition or any property or
asset of any of them is bound or affected, except in the case of clauses (ii)
and (iii) for any such conflicts, violations, breaches, defaults or other
occurrences which would not, individually or in the aggregate, prevent or delay
the performance by DFC Acquisition of its obligations under this Agreement or
the consummation of the Transactions.
SECTION 5.5 REQUIRED FILINGS AND CONSENTS. The execution and
delivery of this Agreement by DFC Acquisition do not, and the performance of
this Agreement by DFC Acquisition
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will not, require any consent, approval, authorization or permit of, or filing
with or notification to, any governmental or regulatory authority, domestic or
foreign, except (i) for applicable requirements, if any, of the Exchange Act,
state securities or Blue Sky Laws and filing and recordation of appropriate
merger documents as required by Delaware Law and (ii) where failure to obtain
such consents, approvals, authorizations or permits, or to make such filings or
notifications, would not, individually or in the aggregate, prevent or delay the
performance by DFC Acquisition of any of its obligations under this Agreement or
the consummation of the Transactions.
SECTION 5.6 SUBSIDIARIES AND EQUITY INVESTMENTS. As of the date of
this Agreement, there are no corporations of which DFC Acquisition owns,
directly or indirectly, shares of capital stock having in the aggregate 50% or
more of the total combined voting power of the issued and outstanding shares of
capital stock entitled to vote generally in the election of directors of such
corporation.
SECTION 5.7 NO KNOWLEDGE OF CERTAIN FACTS. DFC Acquisition has no
actual knowledge of any facts or circumstances that would make any of the
representations and warranties of the Company contained herein untrue in any
respect.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF BNC
AND THE CONTINUING STOCKHOLDERS
Each of BNC, each Continuing Stockholder and DeGeorge severally but
not jointly, as to matters pertaining to such person, represents and warrants to
the Company as follows:
SECTION 6.1 ORGANIZATION AND STANDING. If such person is a
corporation, it is duly organized, validly existing and in good standing under
the laws of the State of Delaware and has full corporate power and authority to
conduct its business as presently conducted and to enter into and perform this
Agreement and to carry out the Transactions.
SECTION 6.2 AUTHORITY FOR AGREEMENT. If such person is a corporation,
such person has the corporate power to enter into this Agreement and carry out
its obligations hereunder. If such person is a corporation, the execution and
delivery of this Agreement and the performance of such person's obligations
hereunder have been duly authorized by all necessary corporate action. This
Agreement has been duly executed by such person and constitutes the valid and
binding obligation of such person enforceable against such person in accordance
with its terms, except (i) to the extent that enforceability may be limited by
applicable bankruptcy, insolvency, reorganization or other laws affecting the
enforcement of creditors' rights generally and (ii) that the availability of
equitable remedies, including specific performance, is subject to the discretion
of the court before which any proceeding therefor may be brought.
SECTION 6.3 NO CONFLICT. The execution and delivery of this
Agreement by such person do not, and the performance of this Agreement by such
person and the consummation of the
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Transactions will not, (i) conflict with or violate the certificate of
incorporation or bylaws of such person, if such person is a corporation, (ii)
conflict with or violate any law, rule, regulation, order, judgment or decree
applicable to such person or by which any property or asset of such person is
bound or affected, or (iii) result in any breach of or constitute a default (or
an event which with notice or lapse of time or both would become a default)
under, or give to others any right of termination, amendment, acceleration or
cancellation of, or result in the creation of a lien or other encumbrance on any
property or asset of such person pursuant to, any note, bond, mortgage,
indenture, contract, agreement, lease, license, permit, franchise or other
instrument or obligation to which such person is a party or by which such person
or any of its properties or assets is bound or affected, except in the case of
clauses (ii) and (iii) for any such conflicts, violations, breaches, defaults or
other occurrences which would not, individually or in the aggregate, prevent or
delay the performance by such person of its obligations under this Agreement or
the consummation of the Transactions.
SECTION 6.4 REQUIRED FILINGS AND CONSENTS. The execution and
delivery of this Agreement by such person do not, and the performance of this
Agreement by such person will not, require any consent, approval, authorization
or permit of, or filing with or notification to, any governmental or regulatory
authority, domestic or foreign, except (i) for applicable requirements, if any,
of the Exchange Act, state securities or Blue Sky Laws and filing and
recordation of appropriate merger documents as required by Delaware Law and (ii)
where failure to obtain such consents, approvals, authorizations or permits, or
to make such filings or notifications, would not, individually or in the
aggregate, prevent or delay the performance by such person of any of such
person's obligations under this Agreement or the consummation of the
Transactions.
SECTION 6.5 SHARE OWNERSHIP. Immediately prior to the Effective
Time, DeGeorge, BNC and the Continuing Stockholders will own the Canceled
Shares, beneficially and of record, free and clear of any security interest,
claim, lien, encumbrance or adverse interest of any nature, other than Canceled
Shares owned by Mr. Getzler, which have been pledged to secure a loan.
SECTION 6.6 CAPITALIZATION OF BNC. The authorized capital stock of
BNC consists of 100,000 shares of common stock, par value $.01 per share, all of
which are issued and outstanding and all of which are owned by DeGeorge and
10,000 shares of preferred stock, $.01 per share, none of which is outstanding.
SECTION 6.7 NO KNOWLEDGE OF CERTAIN FACTS. Neither BNC, DeGeorge nor
any Continuing Stockholder has actual knowledge of any facts or circumstances
that would make any of the representations and warranties of the Company
contained herein untrue in any respect.
ARTICLE VII
COVENANTS
SECTION 7.1 CONDUCT OF THE BUSINESS PENDING THE MERGER.
(a) From and after the date of this Agreement and until the Effective
Time, the Company shall, and shall cause each of the Subsidiaries to, conduct
its business solely in the
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ordinary course consistent with past practice, and shall not, nor permit any of
the Subsidiaries to, except as required or permitted pursuant to the terms
hereof or as may occur in the ordinary course of business consistent with past
practice:
(i) make any material change in the conduct of its businesses and
operations or enter into any material transaction;
(ii) make any change in its Certificate of Incorporation or
By-laws;
(iii) issue any additional shares of capital stock or equity
securities (other than upon exercise of options or convertible securities, in
each case outstanding on the date hereof), issue or grant any option, warrant or
right to acquire any capital stock or equity securities, issue any security
convertible into or exchangeable for its capital stock, alter in any material
respect the terms of any of its outstanding securities, or make any change in
its outstanding shares of capital stock or in its capitalization, whether by
reason of a reclassification, recapitalization, stock split or combination,
exchange or readjustment of shares, stock dividend or otherwise or issue,
deliver or sell, or authorize or propose the issuance, delivery or sale of, any
stock appreciation rights, phantom stock options or similar instruments;
(iv) incur, assume or guarantee any indebtedness for borrowed
money, issue any notes, bonds, debentures or other corporate securities or grant
any option, warrant or right to purchase any thereof;
(v) make any sale, assignment, transfer, abandonment or other
conveyance of any of its assets or any part thereof;
(vi) subject any of its assets, or any part thereof, to any lien or
suffer such to be imposed other than such liens as may arise by operation of
law;
(vii) redeem, retire, purchase or otherwise acquire, directly or
indirectly, any shares of its capital stock or declare, set aside or pay any
dividends or other distribution in respect of such shares, except for dividends
by a wholly owned Subsidiary to the Company or any other wholly owned
Subsidiary;
(viii) take any other action that would cause any of the
representations and warranties made in this Agreement not to remain true and
correct; or
(ix) commit itself to do any of the foregoing.
(b) From and after the date of this Agreement and until the
Effective Time, the Company shall use its best efforts to preserve substantially
intact the business organization of the Company and the Subsidiaries, to keep
available the services of the current officers and employees of the Company and
the Subsidiaries and to preserve the current relationships of the Company and
the Subsidiaries with customers, suppliers and other persons with which the
Company and the Subsidiaries have significant business relations.
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SECTION 7.2 ACCESS TO INFORMATION, CONFIDENTIALITY.
(a) From the date hereof to the Effective Time, the Company shall,
and shall cause the officers, directors, employees, auditors and agents of the
Company to, afford DeGeorge and the officers, employees, counsel, financial
advisors, auditors and agents of DeGeorge or DFC Acquisition, as the case may
be, access at all reasonable times to the officers, employees, agents,
properties, offices, plants and other facilities, books and records of the
Company and the Subsidiaries, and shall furnish DeGeorge and DFC Acquisition
with financial, operating and other data and information as DeGeorge or DFC
Acquisition, through its officers, employees, counsel, financial advisors,
auditors or agents, may reasonably request. From the date hereof to the
Effective Time, DFC Acquisition shall, and shall cause its officers, directors,
employees, auditors and agents to, afford the Company and its officers,
employees, counsel, financial advisors, auditors and agents access at all
reasonable times to the officers, employees, agents, properties, offices, plants
and other facilities, books and records of DFC Acquisition, and shall furnish
the Company with financial, operating and other data and information as the
Company, through its officers, employees, counsel, financial advisors, auditors
or agents, may reasonably request.
(b) No investigation pursuant to this Section 7.2 shall affect any
representation or warranty in this Agreement of any party hereto or any
condition to the obligations of the parties hereto.
(c) Information afforded or furnished to DeGeorge, DFC Acquisition
or the Company or their agents by DeGeorge, DFC Acquisition or the Company
pursuant to this Section 7.2 shall be kept confidential and shall not be
disclosed to third parties except (i) with the consent of DeGeorge or the
Company, as the case may be, (ii) as may be required by law, regulation or by
legal process (including by deposition, interrogatory, request for documents,
subpoena, civil investigative demand or similar process), or (iii) as may be
necessary in connection with the consummation of the Transactions.
SECTION 7.3 NOTIFICATION OF CERTAIN MATTERS. Each party to this
Agreement will give prompt notice to the other parties hereof of:
(a) any notice or other communication from any person or entity
alleging that the consent of such person or entity is or may be required in
connection with the transactions contemplated by this Agreement;
(b) any notice or other communication from any governmental or
regulatory agency or authority in connection with the transactions contemplated
by this Agreement;
(c) any action, suit, claim, investigation or proceeding commenced
or, to its knowledge, threatened against, relating to or involving or otherwise
affecting the Company on the one hand, or the Purchaser Group on the other hand,
which is reasonably likely to affect materially the transactions contemplated by
this Agreement;
(d) the occurrence, or failure to occur, of any event or change in
circumstances where such occurrence or failure to occur would be likely to cause
any representation or warranty
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contained in this Agreement to be untrue and inaccurate in any material respect
at any time from the date hereof to the Effective Time; and
(e) any failure of such party to comply with or satisfy any
covenant, condition or agreement to be complied with or satisfied by it
hereunder;
provided, however, that the delivery of any notice pursuant to this Section 7.3
shall not limit or otherwise affect the remedies available hereunder to the
party receiving such notice.
SECTION 7.4 FURTHER ACTION; REASONABLE BEST EFFORTS. Upon the terms
and subject to the conditions hereof, each of the parties hereto shall use its
reasonable best efforts to take, or cause to be taken, all appropriate action,
and to do, or cause to be done, all things necessary, proper or advisable under
applicable laws and regulations to consummate and make effective the
Transactions, including, without limitation, using its reasonable best efforts
to obtain all licenses, permits, consents, approvals, authorizations,
qualifications and orders of governmental authorities and parties to contracts
with the Company and its subsidiaries as are necessary for the consummation of
the Transactions and to fulfill the conditions to the Merger. In case at any
time after the Effective Time any further action is necessary or desirable to
carry out the purposes of this Agreement, DeGeorge and the proper officers of
the Surviving Corporation shall use their reasonable best efforts to take all
such action. The Company shall use its best efforts to solicit from holders of
Shares entitled to vote at the Special Meeting proxies in favor of such approval
and shall take all other action necessary or, in the reasonable judgment of
DeGeorge, helpful to secure the vote or consent of such holders required by
Delaware Law to effect the Merger. At the Special Meeting, each member of the
Purchaser Group shall cause all Shares it beneficially owns to be voted in favor
of the approval and adoption of this Agreement, the Merger and the Transactions.
SECTION 7.5 INDEMNIFICATION.
(a) It is understood and agreed that all rights to indemnification
by the Company now-existing in favor of each present and former director and
officer of the Company (each an "Indemnified Party") as provided in the Company
Certificate of Incorporation or the Company Bylaws, in each case as in effect on
the date of this Agreement, or pursuant to any other agreements in effect on the
date hereof, copies of which have been provided to DeGeorge, shall survive the
Merger and shall continue in full force and effect until the expiration of the
statute of limitations relating to the claim for which such indemnification is
sought. Consistent with the foregoing, for such period, the Certificate of
Incorporation and Bylaws of the Surviving Corporation shall contain the
provisions with respect to indemnification set forth, respectively, in
DFC Acquisition's Certificate of Incorporation and Bylaws, which provisions
shall not be amended, repealed or otherwise modified during such period in any
manner that would adversely affect the rights thereunder of individuals who,
immediately prior to the Effective Time, were directors, officers, employees or
agents of the Company.
(b) In the event the Surviving Corporation or any of its successors or
assigns (i) consolidates with or merges into any other person and shall not be
the continuing or surviving corporation or entity of such consolidation or
merger or (ii) transfers all or substantially all of its properties and assets
to any person, then, and in each such case, proper provision shall be made so
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that the successors and assigns of the Surviving Corporation shall assume the
obligations set forth in this Section 7.5.
SECTION 7.6 PUBLIC ANNOUNCEMENTS. The Purchaser Group and the
Company shall consult with each other before issuing any press release or
otherwise making any public statements with respect to this Agreement or any
Transaction and shall not issue any such press release or make any such public
statement prior to such consultation, except as may be required by law or any
listing agreement with a national securities exchange to which the Company is a
party.
SECTION 7.7 NO MERGERS, CONSOLIDATIONS, SALE OF STOCK. From and after
the date hereof, neither the Company nor any of the Subsidiaries will directly
or indirectly, through officers, employees, representatives or agents, solicit
any inquiries or proposals to enter into or continue any discussions,
negotiations or agreements relating to the sale or exchange of the Shares, the
merger, reorganization or business combination of the Company with, or the
disposition of a significant amount of the Company's or any of the Subsidiaries'
assets or business to, any person other than the Purchaser Group or their
affiliates.
SECTION 7.8 CONDUCT OF DFC ACQUISITION. From and after the date of
this Agreement and until the Effective Time, DFC Acquisition shall conduct its
business solely in the ordinary course consistent with past practice and,
without the prior written consent of the Company, shall not, except as required
or permitted pursuant to the terms hereof or as may occur in the ordinary course
of business consistent with past practice:
(a) make any change in its Certificate of Incorporation or By-Laws;
(b) take any other action that would cause any of the
representations and warranties made in this Agreement not to remain true and
correct; or
(c) commit itself to do any of the foregoing.
SECTION 7.9 NO SALE OR DISPOSITION. From and after the date of this
Agreement and until the earlier of the Effective Time and termination of this
Agreement, except as provided in this Agreement, no member of the Purchaser
Group will sell or otherwise dispose of any Canceled Shares other than to any of
their affiliates or otherwise to facilitate the consummation of the transactions
contemplated by this Agreement.
SECTION 7.10 EXPENSES. The Company shall (i) reimburse the Purchaser
Group for out-of-pocket expenses incurred prior to or after the date hereof by
or on behalf of the Purchaser Group in connection with the negotiation and
preparation of this Agreement and the transactions contemplated hereby,
including without limitation, reasonable fees and expenses of the Purchaser
Group's attorneys, accountants, consultants and financing sources and (ii) pay
DeGeorge liquidated damages of $100,000, in each case in the event that the
Company Board approves a change of control transaction involving any person
other than DeGeorge or any affiliate of DeGeorge within one year of the date of
this Agreement or such a transaction is consummated within one year of the date
of this Agreement.
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SECTION 7.11 FURTHER ASSURANCES. At and after the Effective Time, the
officers and directors of the Surviving Corporation will be authorized to
execute and deliver, in the name and on behalf of the Company or DFC
Acquisition, any deeds, bills of sale, assignments or assurances and to take and
do in the name and on behalf of the Company or DFC Acquisition any other actions
and things to vest, perfect or confirm of record or otherwise in the Surviving
Corporation any and all right, title and interest in, to and under any of the
rights, properties or assets of the Company acquired or to be acquired by the
Surviving Corporation as a result of, or in connection with, the Merger.
ARTICLE VIII
CONDITIONS
SECTION 8.1 CONDITIONS TO THE OBLIGATION OF EACH PARTY. The
respective obligations of DFC Acquisition and the Company to effect the Merger
and the respective obligations of DeGeorge, BNC and the Continuing Stockholders
to effect the Contribution are subject to the satisfaction of the following
conditions, unless waived in writing by all relevant parties:
(a) STOCKHOLDER APPROVAL. This Agreement and the Merger shall have
been approved and adopted by the affirmative vote of (i) at least the holders of
a majority of the Shares outstanding on the record date of the Special Meeting
or (ii) 662/3 of the votes cast at the Special Meeting by the holders of the
Shares, whichever is greater.
(b) NO ORDER. No foreign, United States or state governmental
authority or other agency or commission or foreign, United States or state court
of competent jurisdiction shall have enacted, issued, promulgated, enforced or
entered any law, rule, regulation, executive order, decree, injunction or other
order (whether temporary, preliminary or permanent) which is then in effect, and
no action or proceeding shall have been commenced or threatened for the purpose
of obtaining a decree, injunction or other order or damages before any court or
governmental agency or other agency or commission, which has or would have the
effect of: (i) making the acquisition of Shares by DeGeorge or DFC Acquisition
or any affiliate of either of them pursuant hereto illegal or otherwise
restricting, preventing or prohibiting consummation of any of the Transactions,
(ii) seeking to prohibit or limit materially the ownership or operation by
either of the Company or any of its subsidiaries or DeGeorge of all or any
material portion of the business or assets of either of the Company or any of
its subsidiaries or DeGeorge as a result of any Transaction, or (iii) compelling
the Company, DFC Acquisition or any of their respective subsidiaries or DeGeorge
to dispose of or hold separate all or any material portion of the business or
assets of the Company, DeGeorge, DFC Acquisition or any Subsidiary as a result
of any Transaction; provided, however, that each of the parties shall have used
its reasonable efforts to prevent the entry of any such injunction or other
order and to appeal as promptly as practicable any injunction or other order
that may be entered.
(c) ADVISOR'S OPINION. The Advisor's Opinion shall not have been
withdrawn.
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SECTION 8.2 CONDITIONS TO THE OBLIGATION OF THE COMPANY. The
obligation of the Company to consummate the Merger is subject to the
satisfaction or waiver of the following further conditions:
(a) DFC Acquisition shall have performed in all material respects
all of its obligations hereunder required to be performed by it at or prior to
the Effective Time;
(b) the representations and warranties of the Purchaser Group
contained in this Agreement and in any certificate or other writing delivered by
the Purchaser Group pursuant hereto shall be true in all respects at and as of
the Effective Time as if made at and as of such time (other than any
inaccuracies in such representations or warranties that are attributable to the
Company); and
(c) receipt by the Company of (i) a certificate signed by an
executive officer of DFC Acquisition to the effect set forth in paragraphs (a)
and (b) of this Section and (ii) a certificate signed by or on behalf of
DeGeorge, BNC and each Continuing Stockholder to the effect set forth in
paragraph (b) of this Section.
(d) DFC Acquisition shall have deposited the aggregate Merger
Consideration as required by Section 2.7(a).
(e) Receipt of an opinion of Kirkland & Ellis, counsel to the
Purchaser Group, in a form reasonably satisfactory to the Company.
SECTION 8.3 CONDITIONS TO THE OBLIGATION OF THE PURCHASER GROUP. The
obligation of DFC Acquisition to consummate the Merger and of the Purchaser
Group to consummate the Contribution is subject to the satisfaction or waiver of
the following further conditions:
(a) The Company shall have performed in all material respects all
of its obligations hereunder required to be performed by it at or prior to the
Effective Time;
(b) the representations and warranties of the Company contained in
this Agreement and in any certificate or other writing delivered by the Company
pursuant hereto shall be true in all respects at and as of the Effective Time as
if made at and as of such time;
(c) receipt by DFC Acquisition of a certificate signed by an
executive officer of the Company to the effect set forth in paragraphs (a) and
(b) of this Section; and
(d) the holders of not more than 5% of the outstanding Shares shall
have exercised their appraisal rights in the Merger in accordance with Delaware
Law.
(e) Receipt of an opinion of Rogers & Wells, counsel to the Company
and the Special Committee, in a form reasonably satisfactory to DFC Acquisition
and the Purchaser Group.
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ARTICLE IX
TERMINATION, AMENDMENT AND WAIVER
SECTION 9.1 TERMINATION. This Agreement may be terminated and the
Merger may be abandoned at any time prior to the Effective Time:
(a) By mutual written consent duly authorized by DFC Acquisition
and the Company after approval of their respective Boards of Directors;
(b) By either DFC Acquisition or the Company if any court of
competent jurisdiction or administrative agency, commission, governmental or
regulatory authority, domestic or foreign, shall have issued an order, decree,
ruling or taken any other action restraining, enjoining or otherwise prohibiting
the Contribution or the Merger and such order, decree, ruling or other action
shall have become final and nonappealable; or
(c) By any of DeGeorge, DFC Acquisition or the Company if (i) the
Effective Time shall not have occurred on or before June 30, 1998; provided,
however, that the right to terminate this Agreement under this Section 9.1(c)
shall not be available to any party whose failure to fulfill any obligation
under this Agreement has been the cause of, or resulted in, the failure of the
Effective Time to occur on or before such date.
SECTION 9.2 EFFECT OF TERMINATION. In the event of the termination
of this Agreement pursuant to Section 9.1, this Agreement shall forthwith become
void, and except as set forth in Section 7.10, there shall be no liability on
the part of any party hereto, provided that nothing herein shall relieve any
party from liability for any willful breach hereof.
SECTION 9.3 AMENDMENTS. This Agreement may not be amended except by
action of the individuals parties hereto and the board of directors of each of
the other parties hereto (and, in the case of the Company, with the approval of
the Special Committee) set forth in an instrument in writing signed by or on
behalf of each of the parties hereto, as the case may be; provided, however,
that after approval of the Merger by the stockholders of the Company at the
Special Meeting, no amendment may be made without the further approval of the
stockholders of the Company if the effect of such amendment would be to (i)
reduce the Merger Consideration or change the form thereof or (ii) alter or
change any of the terms and conditions of this Agreement if any of such
alterations or changes, alone or in the aggregate, would be materially adverse
to the stockholders of the Company (other than the Purchaser Group).
SECTION 9.4 WAIVER. (a) At any time prior to the Effective Time,
whether before or after the Special Meeting, any party hereto, by action taken
by its board of directors, if necessary (and, in the case of the Company, with
the approval or the Special Committee), may (i) extend the time for the
performance of any of the covenants, obligations or other acts of any other
party hereto or (ii) waive any inaccuracy of any representations or warranties
or compliance with any of the agreements, covenants or conditions of any other
party or with any conditions to its own obligations. Any agreement on the part
of a party hereto to any such extension or waiver shall be valid only if
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set forth in an instrument in writing signed by such party or on behalf of such
party by its duly authorized officer, as the case may be.
(b) No failure or delay by any party in exercising any right, power
or privilege hereunder shall operate as a waiver thereof nor shall any single or
partial exercise thereof preclude any other right, power or privilege. The
rights and remedies herein provided shall be cumulative and not exclusive of any
rights or remedies provided by law.
ARTICLE X
GENERAL PROVISIONS
SECTION 10.1 NO THIRD PARTY BENEFICIARIES. Other than the provisions
of Section 7.5 and Section 2.5(a)(ii), nothing in this Agreement shall confer
any rights or remedies upon any person other than the parties hereto.
SECTION 10.2 ENTIRE AGREEMENT. This Agreement (including any Annex
or Schedule hereto) constitutes the entire agreement among the parties with
respect to the subject matter hereof and supersedes any prior understandings,
agreements, or representations by or among the parties, written or oral, with
respect to the subject matter hereof.
SECTION 10.3 SUCCESSION AND ASSIGNMENT. This Agreement shall be
binding upon and inure to the benefit of the parties named herein and their
respective successors. No party may assign either this Agreement or any of its
rights, interests, or obligations hereunder without the prior written approval
of the other party, provided, however, that DFC Acquisition may freely assign
its rights to another wholly owned subsidiary of DeGeorge without such prior
written approval.
SECTION 10.4 COUNTERPARTS. This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.
SECTION 10.5 HEADINGS. The section headings contained in this
Agreement are inserted for convenience only and shall not affect in any way the
meaning or interpretation of this Agreement.
SECTION 10.6 GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware, without regard
to principles of conflicts of law thereof.
SECTION 10.7 SEVERABILITY. Any term or provision of this Agreement
that is invalid or unenforceable in any situation in any jurisdiction shall not
affect the validity or enforceability of the remaining terms and provisions
hereof or the validity or enforceability of the offending term or provision in
any other situation or in any other jurisdiction. If the final judgment of a
court of competent jurisdiction declares that any term or provision hereof is
invalid or unenforceable, the parties agree that the court making the
determination of invalidity or unenforceability shall have the power to reduce
the scope, duration, or area of the term or provision, to delete specific words
or
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phrases, or to replace any invalid or unenforceable term or provision with a
term or provision that is valid and enforceable and that comes closest to
expressing the intention of the invalid or unenforceable term or provision, and
this Agreement shall be enforceable as so modified after the expiration of the
time within which the judgment may be appealed.
SECTION 10.8 SPECIFIC PERFORMANCE. Each of the parties acknowledges
and agrees that the other party would be damaged irreparably in the event any of
the provisions of this Agreement are not performed in accordance with their
specific terms or otherwise are breached. Accordingly, each of the parties
agrees that the other party shall be entitled to an injunction or injunctions to
prevent breaches of the provisions of this Agreement and to enforce specifically
this Agreement and the terms and provisions hereof in any action instituted in
any court of the United States or any state thereof having jurisdiction over the
parties and the matters in addition to any other remedy to which it may be
entitled, at law or in equity.
SECTION 10.9 CONSTRUCTION. The language used in this Agreement shall
be deemed to be the language chosen by the parties hereto to express their
mutual intent and no rule of strict construction shall be applied against any
party.
SECTION 10.10 NON-SURVIVAL OF REPRESENTATIONS AND WARRANTIES. None
of the representations and warranties in this Agreement or in any instrument
delivered pursuant to this Agreement shall survive the Effective Time. Nothing
in this Section 10.10 shall limit any covenant or agreement of the parties which
by its terms contemplates performance after the Effective Time including,
without limitation, Sections 2.4, 2.5, 2.7, 3.1, 3.2, 3.3, 7.5, 7.10 and 7.11.
SECTION 10.11 CERTAIN DEFINITIONS. For purposes of this Agreement,
the term "affiliate" shall have the same meaning as set forth in Rule 12B-2 of
the Regulation 12B of the General Rules and Regulations under the Exchange Act,
and the term "person" shall mean any individual, corporation, partnership
(general or limited), limited liability company, limited liability partnership,
trust, joint venture, joint-stock company, syndicate, association, entity,
unincorporated organization or government or any political subdivision, agency
or instrumentality thereof.
SECTION 10.12 FEES AND EXPENSES. Except as set forth in Section
7.10, whether or not the Merger is consummated, all costs and expenses incurred
in connection with the Merger, this Agreement and the Transactions shall be paid
by the party incurring such expenses.
SECTION 10.13 NOTICES. All notices, requests, claims, demands and
other communications hereunder shall be in writing and shall be given (and shall
be deemed to have been duly given upon receipt) by delivery in person, by
telecopy or by registered or certified mail (postage prepaid, return receipt
requested) to the respective parties at the following addresses, or at such
other address for a party as shall be specified in a notice given in accordance
with this Section 10.13:
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If to DeGeorge, BNC or DFC Acquisition:
Peter R. DeGeorge
c/o DeGeorge Financial Corporation
99 Realty Drive
Cheshire, CT 06410
Telecopier: (203) 699-3410
With a copy to:
Kirkland & Ellis
153 East 53rd Street
New York, NY 10022
Telecopier: (212 ) 446-4900
Attn: Lance C. Balk, Esq.
If to the Company:
DeGeorge Financial Corporation
99 Realty Drive
Cheshire, CT 06410
Telecopier: (203) 699-3400
Attn: John Brunjes
with copies to:
Rogers & Wells
200 Park Avenue
New York, NY 10166
Telecopier: (212) 878-8375
Attn: Samuel M. Feder, Esq.
If to any Continuing Stockholders to the address set forth beneath
such person's name on the signature pages hereto:
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed as of the date first above written.
DEGEORGE FINANCIAL ACQUISITION CORP.
------------------------------------
By: Peter R. DeGeorge
Title: President
DEGEORGE FINANCIAL CORPORATION
------------------------------------
By:
Title:
------------------------------------
Peter R. DeGeorge
BNC ACQUISITION CORP.
------------------------------------
By: Peter R. DeGeorge
Title: President
------------------------------------
Herbert L. Getzler
2702 Captains Way
Jupiter, FL 33477
------------------------------------
James G. Einloth
c/o DeGeorge Financial Corporation
99 Realty Drive
Cheshire, CT 06410
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------------------------------------
Jonathan K. Dodge
c/o DeGeorge Home Alliance, Inc.
591 Park Avenue
New York, NY 10021
------------------------------------
Lawrence J. DeGeorge
140 Intracostal Point Drive, Suite 410
Jupiter, FL 33477
------------------------------------
Florence A. DeGeorge
140 Intracoastal Point Drive, Suite 410
Jupiter, FL 33477
------------------------------------
Lawrence F. DeGeorge
3127 Casseekey Island Road
Jupiter, FL 33477
------------------------------------
Mary M. Dunn
210 Weise Road
Cheshire, CT 06410
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CUSIP No. 244783-10-6
AGREEMENT CONCERNING JOINT FILING
OF SCHEDULE 13D
The undersigned agree as follows:
(i) each of them is individually eligible to use the Schedule 13D to which
this Exhibit is attached, and such Schedule 13D is filed on behalf of each of
them; and
(ii) each of them is responsible for the timely filing of such Schedule 13D
and any amendments thereto, and for the completeness and accuracy of the
information concerning such person contained therein; but none of them is
responsible for the completeness or accuracy of the information concerning the
other persons making the filing, unless such person knows or has reason to
believe that such information is inaccurate.
This Agreement may be executed in any number of counterparts, each of which
shall be deemed to be an original, but all of which, taken together, shall
constitute one and the same instrument.
Dated: June 11, 1998
DEGEORGE FINANCIAL ACQUISITION CORP.
/s/ Peter R. DeGeorge
--------------------------------------
By: Peter R. DeGeorge
Title: President
/s/ Peter R. DeGeorge
--------------------------------------
Peter R. DeGeorge
BNC ACQUISITION CORP.
/s/ Peter R. DeGeorge
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By: Peter R. DeGeorge
Title: President
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CUSIP No. 244783-10-6
/s/ Herbert L. Getzler
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Herbert L. Getzler
/s/ James G. Einloth
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James G. Einloth
/s/ Jonathan K. Dodge
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Jonathan K. Dodge
/s/ Lawrence J. DeGeorge
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Lawrence J. DeGeorge
/s/ Florence A. DeGeorge
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Florence A. DeGeorge
/s/ Lawrence F. DeGeorge
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Lawrence F. DeGeorge
/s/ Mary M. Dunn
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Mary M. Dunn
