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AGREEMENT AND PLAN OF MERGER
dated as of June 27, 2000
by and between
Queens County Bancorp, Inc.
and
Haven Bancorp, Inc.
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<TABLE>
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TABLE OF CONTENTS
Page
INTRODUCTORY STATEMENT..........................................................................................-1-
ARTICLE I
THE MERGER
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Section 1.1. Structure of the Merger.....................................................-1-
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Section 1.2. Effect on Outstanding Shares of Haven Common Stock..........................-2-
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Section 1.3. Exchange Procedures.........................................................-3-
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Section 1.4. Stock Options...............................................................-5-
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Section 1.5. Directors and Officers of Queens after Effective Time.......................-6-
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Section 1.6. Certificate of Incorporation and By-laws....................................-6-
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ARTICLE II
REPRESENTATIONS AND WARRANTIES
Section 2.1. Disclosure Letters..........................................................-7-
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Section 2.2. Standards...................................................................-7-
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Section 2.3. Representations and Warranties of Haven.....................................-8-
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Section 2.4. Representations and Warranties of Queens...................................-21-
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ARTICLE III
CONDUCT PENDING THE MERGER
Section 3.1. Conduct of Haven's Business Prior to the Effective Time....................-30-
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Section 3.2. Forbearance by Haven.......................................................-30-
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Section 3.3. Conduct of Queens' Business Prior to the Effective Time....................-33-
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Section 3.4. Forbearance by Queens......................................................-33-
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ARTICLE IV
COVENANTS
Section 4.1. Acquisition Proposals......................................................-34-
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Section 4.2. Certain Policies of Haven..................................................-35-
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Section 4.3. Access and Information.....................................................-36-
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Section 4.4. Certain Filings, Consents and Arrangements.................................-37-
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Section 4.5. Antitakeover Provisions....................................................-37-
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Section 4.6. Additional Agreements......................................................-38-
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Section 4.7. Publicity..................................................................-38-
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Section 4.8. Stockholders Meetings......................................................-38-
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Section 4.9. Joint Proxy Statement-Prospectus; Comfort Letters..........................-39-
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Section 4.10. Registration of Queens Common Stock........................................-39-
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Section 4.11. Affiliate Letters..........................................................-40-
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Section 4.12. Notification of Certain Matters............................................-40-
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Section 4.13. Directors and Officers.....................................................-40-
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Section 4.14. Indemnification; Directors' and Officers' Insurance........................-41-
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Section 4.15. Tax-Free Reorganization Treatment..........................................-42-
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Section 4.16. Employees; Benefit Plans and Programs......................................-42-
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Section 4.17. Advisory Board.............................................................-44-
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ARTICLE V
CONDITIONS TO CONSUMMATION
Section 5.1. Conditions to Each Party's Obligations.....................................-44-
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Section 5.2. Conditions to the Obligations of Queens....................................-45-
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Section 5.3. Conditions to the Obligations of Haven.....................................-46-
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ARTICLE VI
TERMINATION
Section 6.1. Termination................................................................-48-
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Section 6.2. Effect of Termination......................................................-51-
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ARTICLE VII
CLOSING, EFFECTIVE DATE AND EFFECTIVE TIME
Section 7.1. Effective Date and Effective Time..........................................-52-
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Section 7.2. Deliveries at the Closing..................................................-52-
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ARTICLE VIII
CERTAIN OTHER MATTERS
Section 8.1. Certain Definitions; Interpretation........................................-52-
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Section 8.2. Survival...................................................................-53-
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Section 8.3. Waiver; Amendment..........................................................-53-
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Section 8.4. Counterparts...............................................................-53-
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Section 8.5. Governing Law..............................................................-53-
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Section 8.6. Expenses...................................................................-53-
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Section 8.7. Notices....................................................................-53-
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Section 8.8. Entire Agreement; etc......................................................-54-
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Section 8.9. Assignment.................................................................-54-
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Section 8.10. Waiver of Jury Trial.......................................................-54-
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</TABLE>
Exhibits
Exhibit A - Form of Affiliate Letter [Section 4.11]
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<TABLE>
<CAPTION>
INDEX OF DEFINED TERMS
DEFINED TERM
SECTION
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Advisory Board.................................................................................................4.17
Acquisition Transaction......................................................................................3.4(g)
Acquisition Proposal .........................................................................................Intro
Agreement.....................................................................................................Intro
Average Index Price..........................................................................................6.1(e)
Average Queens Market Value .................................................................................1.2(a)
Bank Regulator...............................................................................................2.3(i)
CFS Bank.....................................................................................................2.2(b)
Closing.........................................................................................................7.1
Closing Date....................................................................................................7.1
Code...............................................................................................Intro. Statement
Confidentiality Agreement.......................................................................................4.1
Converted Options............................................................................................1.4(a)
Costs.......................................................................................................4.14(a)
Covered Agreements..............................................................................................8.8
Covered Person...............................................................................................2.3(y)
Derivatives Contract.....................................................................................2.3(x)(ii)
DGCL............................................................................................................1.1
Disclosure Letter...............................................................................................2.1
Effective Date..................................................................................................7.1
Effective Termination Date...............................................................................6.1(e)(ii)
Effective Time..................................................................................................7.1
Employment Agreements........................................................................................2.3(y)
Environmental Law........................................................................................2.3(q)(ii)
ERISA........................................................................................................2.3(m)
ERISA Affiliate..............................................................................................2.4(n)
Exchange Act..............................................................................................2.3(f)(i)
Exchange Agent...............................................................................................1.3(a)
Exchange Ratio...............................................................................................1.2(a)
Excluded Shares..............................................................................................1.2(a)
FDIA....................................................................................................2.3(a)(iii)
FDIC.....................................................................................................2.3(a)(iv)
FHLB.....................................................................................................2.3(a)(iv)
FRB......................................................................................................2.4(f)(ii)
GAAP.........................................................................................................2.2(b)
Governmental Entity..........................................................................................2.3(h)
Haven.........................................................................................................Intro
Haven Certificate............................................................................................1.2(a)
Haven Common Stock.................................................................................Intro. Statement
Haven Employee..............................................................................................4.16(a)
Haven Employee Plans.........................................................................................2.3(m)
Haven's ESOP...........................................................................................4.16(b)(iii)
Haven Option Agreement.............................................................................Intro. Statement
Haven Option.................................................................................................1.4(a)
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Haven Option Plans...........................................................................................1.4(a)
Haven Pension Plan...........................................................................................2.3(m)
Haven Preferred Stock.....................................................................................2.3(b)(i)
Haven Preferred Share Purchase Right.........................................................................1.2(a)
Haven Qualified Plan.........................................................................................2.3(m)
Haven Rights Agreement.......................................................................................1.2(a)
Haven's Reports...........................................................................................2.3(f)(i)
Haven RRPs......................................................................................................1.2
Hazardous Material.......................................................................................2.3(q)(ii)
HOLLA........................................................................................................2.3(a)
Indemnified Party...........................................................................................4.14(a)
Index Group..................................................................................................6.1(e)
Index Price..................................................................................................6.1(e)
Index Ratio..................................................................................................6.1(e)
Initial Queens Market Value..................................................................................6.1(e)
IRS..........................................................................................................2.3(m)
Joint Proxy Statement-Prospectus..........................................................................2.3(e.e.)
Letter of Transmittal........................................................................................1.3(a)
Loan.........................................................................................................2.3(r)
Loan Property............................................................................................2.3(q)(ii)
Material Adverse Effect......................................................................................2.2(b)
Maximum Agreement...........................................................................................4.14(d)
Merger..........................................................................................................1.1
Merger Consideration.........................................................................................1.2(a)
NASD.....................................................................................................2.3(f)(ii)
Nasdaq Stock Market.........................................................................................4.10(c)
New Queens Directors........................................................................................4.13(a)
New Compensation and Benefits Program...................................................................4.16(a)(ii)
Option Washout Payment.......................................................................................1.7(b)
OREO....................................................................................................2.3(r)(iii)
OTS..........................................................................................................2.3(e)
Participation Facility...................................................................................2.3(q)(ii)
PBGC.........................................................................................................2.3(m)
Queens.............................................................................................Intro. Statement
Queens Bank..................................................................................................2.2(b)
Queens Common Stock..........................................................................................1.2(a)
Queens Employee Plan.........................................................................................2.4(n)
Queens Market Value..........................................................................................6.1(e)
Queens Pension Plan..........................................................................................2.4(n)
Queens Preferred Stock....................................................................................2.4(b)(i)
Queens Qualified Plan........................................................................................2.4(n)
Queens Ratio...................................................................................................6.16
Queens Rights Agreement .....................................................................................1.2(a)
Queens' Reports...........................................................................................2.4(f)(i)
Registration Statement......................................................................................2.3(ee)
Requisite Regulatory Approvals...............................................................................2.3(e)
SAIF.....................................................................................................2.3(a)(iv)
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SEC.......................................................................................................2.3(f)(i)
Securities Act..............................................................................................2.3(ee)
SRO......................................................................................................2.3(f)(ii)
Significant Subsidiary.......................................................................................2.3(a)
Starting Date................................................................................................6.1(e)
Stock Adjustment.............................................................................................1.2(b)
Stockholder Meeting.............................................................................................4.8
Subsidiary...................................................................................................2.3(a)
Unsolicited Acquisition Proposal................................................................................4.1
Third Party Non-Regulatory Consents..........................................................................5.1(b)
Valuation Date...............................................................................................6.1(e)
Voting Debt..............................................................................................2.3(b)(ii)
</TABLE>
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<PAGE>
AGREEMENT AND PLAN OF MERGER
This is an AGREEMENT AND PLAN OF MERGER, dated as of the 27th
day of June, 2000 ("Agreement"), by and between QUEENS COUNTY BANCORP, INC., a
Delaware corporation ("Queens"), and HAVEN BANCORP, INC., a Delaware corporation
("Haven").
INTRODUCTORY STATEMENT
The Board of Directors of each of Queens and Haven (i) has
determined that this Agreement and the business combination and related
transactions contemplated hereby are in the best interests of Queens and Haven,
respectively, and in the best long-term interests of their respective
stockholders, (ii) has determined that this Agreement and the transactions
contemplated hereby are consistent with, and in furtherance of, their respective
business strategies and (iii) has approved, at meetings of each of such Boards
of Directors, this Agreement.
Concurrently with the execution and delivery of this
Agreement, and as a condition and inducement to Queens' willingness to enter
into this Agreement, Queens and Haven have entered into a stock option agreement
("Option Agreement"), pursuant to which Haven has granted to Queens an option to
purchase shares of Haven's common stock, par value $.01 per share ("Haven Common
Stock"), upon the terms and conditions contained therein.
The parties hereto intend that the Merger shall qualify as a
reorganization under the provisions of Section 368(a) of the Internal Revenue
Code of 1986, as amended ("Code"), for federal income tax purposes.
Queens and Haven desire to make certain representations,
warranties and agreements in connection with the business combination and
related transactions provided for herein and to prescribe various conditions to
such transactions.
In consideration of their mutual promises and obligations
hereunder, the parties hereto adopt and make this Agreement and prescribe the
terms and conditions hereof and the manner and basis of carrying it into effect,
which shall be as follows:
ARTICLE I
THE MERGER
Section 1.1. STRUCTURE OF THE MERGER. On the Effective Date
(as defined herein), Haven will merge with and into Queens ("Merger"), with
Queens being the surviving entity, pursuant to the provisions of, and with the
effect provided in, the Delaware General Corporation Law ("DGCL"). Subject to
the receipt of any necessary clearances, the parties intend that the name of the
Surviving Corporation shall be "New York Community Bancorp, Inc." (or a
variation thereof acceptable to Queens). Upon consummation of the Merger, the
separate corporate existence of Haven shall cease. Queens shall continue to be
governed by the laws of the State of Delaware, and its separate corporate
existence, with all of its rights, privileges, immunities, powers and
franchises,
<PAGE>
shall continue unaffected by the Merger. Queens may at any time prior to the
Effective Time change the method of effecting the combination with Haven
(including, without limitation, the provisions of this Article I) if and to the
extent it deems such change to be necessary or appropriate; provided, however,
that no such change shall (1) alter or change the amount or kind of
consideration to be issued to holders of Haven Common Stock as provided for in
this Agreement, (2) adversely affect the tax treatment of Haven or Haven's
stockholders as a result of receiving the Merger Consideration (as defined
herein), (3) materially impede or delay consummation of the transactions
contemplated by this Agreement or (4) adversely effect the obligations of Queens
hereunder. In the event of such an election, the parties agree to execute an
appropriate amendment to this Agreement in order to reflect such election.
Section 1.2. Effect on Outstanding Shares of Haven Common
---------------------------------------------
Stock.
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(a) By virtue of the Merger, automatically and without any
action on the part of the holders of Haven Common Stock, each share of Haven
Common Stock issued and outstanding at the Effective Time (as defined herein),
other than (i) shares held directly or indirectly by Queens (other than shares
held in a fiduciary capacity or in satisfaction of a debt previously
contracted), (ii) shares held by Haven as treasury stock and (iii) unallocated
shares held in the Amended and Restated Columbia Federal Savings Bank
Recognition and Retention Plan for Officers and Employees and the Amended and
Restated Columbia Federal Savings Bank Recognition and Retention Plan for
Outside Directors (collectively, "Haven RRPs") (such shares referred to in
clauses (i), (ii) and (iii) being referred to herein as the "Excluded Shares"),
together with the related preferred share purchase right ("Haven Preferred Share
Purchase Right") issued pursuant to the Stockholder Rights Agreement ("Haven
Rights Agreement"), dated as of January 25, 1996, between Haven and Chemical
Bank, as Rights Agent, to the extent that they shall exist, shall become and be
converted into the right to receive 1.04 shares (the "Exchange Ratio") of Queens
common stock par value $0.01 per share ("Queens Common Stock"), together with
the related preferred share purchase right issuable pursuant to any rights
agreement entered into by Queens ("Queens Rights Agreement") provided, however,
that notwithstanding any other provision hereof, no fraction of a share of
Queens Common Stock and no certificates or scrip therefor will be issued in the
Merger; instead Queens shall pay to each holder of Haven Common Stock who would
otherwise be entitled to a fraction of a share of Queens Common Stock an amount
in cash, rounded to the nearest cent, determined by multiplying such fraction by
the last reported sale price of Queens Common Stock on the day immediately
preceding the Effective Time. The shares of Queens Common Stock and any cash for
fractional shares are collectively referred to in this Agreement as the "Merger
Consideration."
At and after the Effective Time, each certificate ("Haven
Certificate") previously representing shares of Haven Common Stock (except as
specifically set forth in this Section 1.2) shall represent only the right to
receive the Merger Consideration. The record holder of such outstanding Haven
Certificate shall, after the Effective Date, be entitled to vote the shares of
Queens Common Stock into which the shares of Haven Common Stock evidenced by
such certificate shall have been so converted on any matters on which the
holders of record of Queens Common Stock, as of any date subsequent to the
Effective Date, shall be entitled to vote.
(b) If, between the date of this Agreement and the Effective
Time, the outstanding shares of Queens Common Stock shall have been changed into
a different number of shares or into
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a different class (or a record date for such a change shall have been
determined) by reason of any stock dividend, subdivision, reclassification,
recapitalization, split, combination or exchange of shares (each, a "Stock
Adjustment"), the Exchange Ratio shall be adjusted correspondingly to the extent
appropriate to reflect the Stock Adjustment.
(c) As of the Effective Time, each Excluded Share shall be
canceled and retired and shall cease to exist, and no exchange or payment shall
be made with respect thereto. All shares of Queens Common Stock and Queens
Preferred Stock (as defined herein) that are held by Haven, if any, other than
shares held in a fiduciary capacity or in satisfaction of a debt previously
contracted, shall become treasury stock of Queens.
Section 1.3. Exchange Procedures.
-------------------
(a) Appropriate transmittal materials (the "Letter of
Transmittal") will be mailed within three business days after the Effective Date
to each holder of record of Haven Common Stock as of the Effective Time. Prior
to the Effective Time, Queens shall deposit, or shall cause to be deposited,
with a bank or trust company as shall be selected by Queens and reasonably
acceptable to Haven (the "Exchange Agent"), for the benefit of the holders of
shares of Haven Common Stock, for exchange in accordance with this Section 1.3,
an estimated amount of cash sufficient to pay the aggregate amount of cash in
lieu of fractional shares to be paid pursuant to Section 1.2(a), and Queens
shall reserve for issuance with its transfer agent and registrar a sufficient
number of shares of Queens Common Stock to provide for payment of the Queens
Common Stock.
(b) The Letter of Transmittal shall (i) specify that delivery
shall be effected, and risk of loss and title to Haven Certificates shall pass,
only upon delivery of Haven Certificates to the Exchange Agent, (ii) be in a
form and contain any other provisions as Queens may reasonably determine and
(iii) include instructions for use in effecting the surrender of Haven
Certificates in exchange for the Merger Consideration. Upon the proper surrender
of Haven Certificates to the Exchange Agent, together with a properly completed
and duly executed Letter of Transmittal, the holder of such Haven Certificates
shall be entitled to receive in exchange therefor (1) a certificate representing
that number of whole shares of Queens Common Stock that such holder has the
right to receive pursuant to Section 1.2 and (2) a check in the amount equal to
the cash in lieu of fractional shares that such holder has the right to receive
pursuant to Section 1.2(a) and any dividends or other distributions to which
such holder is entitled pursuant to Section 1.3(c). Haven Certificates so
surrendered shall forthwith be cancelled. No later than 10 business days
following receipt of the properly completed Letter of Transmittal and the
requisite Haven Certificates, the Exchange Agent shall distribute Queens Common
Stock and cash as provided herein. The Exchange Agent shall not be entitled to
vote or exercise any rights of ownership with respect to the shares of Queens
Common Stock held by it from time to time hereunder, except that it shall
receive and hold all dividends or other distributions paid or distributed with
respect to such shares for the account of the persons entitled thereto. If there
is a transfer of ownership of any shares of Haven Common Stock not registered in
the transfer records of Haven, the Merger Consideration shall be issued to the
transferee thereof if Haven Certificates representing such Haven Common Stock
are presented to the Exchange Agent, accompanied by all documents required, in
the reasonable judgment of Queens and the Exchange Agent, (x) to evidence and
effect such transfer and (y) to evidence that any applicable stock transfer
taxes have been paid.
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(c) No interest will be paid on the cash in lieu of fractional
shares. Whenever a dividend or other distribution is declared by Queens on
Queens Common Stock, the record date for which is at or after the Effective
Time, the declaration shall include dividends or other distributions on all
shares issuable pursuant to this Agreement, but no dividends or other
distributions declared or made after the Effective Time with respect to Queens
Common Stock shall be remitted to any person entitled to receive shares of
Queens Common Stock hereunder until such person surrenders his or her Haven
Certificates in accordance with this Section 1.3. Upon the surrender of such
person's Haven Certificates, such person shall be entitled to receive any
dividends or other distributions, without interest thereon, which theretofore
had become payable with respect to shares of Queens Common Stock represented by
such person's Haven Certificates.
(d) From and after the Effective Time there shall be no
transfers on the stock transfer records of Haven of any shares of Haven Common
Stock. If, after the Effective Time, Haven Certificates are presented to Queens,
they shall be canceled and exchanged for the Merger Consideration deliverable in
respect thereof pursuant to this Agreement in accordance with the procedures set
forth in this Section 1.3.
(e) Any portion of the aggregate amount of cash to be paid in
lieu of fractional shares pursuant to Section 1.2(a), any dividends or other
distributions to be paid pursuant to this Section 1.3 that remains unclaimed by
the stockholders of Haven for six months after the Effective Time, as well as
any proceeds from any investments, shall be repaid by the Exchange Agent to
Queens upon the written request of Queens. After such request is made, any
stockholders of Haven who have not theretofore complied with this Section 1.3
shall look only to Queens for the Merger Consideration deliverable in respect of
each share of Haven Common Stock such stockholder holds, as determined pursuant
to Section 1.2 of this Agreement, without any interest thereon. If outstanding
Haven Certificates are not surrendered prior to the date on which such payments
would otherwise escheat to or become the property of any governmental unit or
agency, the unclaimed items shall, to the extent permitted by any abandoned
property, escheat or other applicable laws, become the property of Queens (and,
to the extent not in its possession, shall be paid over to it), free and clear
of all claims or interest of any person previously entitled to such claims.
Notwithstanding the foregoing, none of Queens, the Exchange Agent or any other
person shall be liable to any former holder of Haven Common Stock for any amount
delivered to a public official pursuant to applicable abandoned property,
escheat or similar laws.
(f) Queens and the Exchange Agent shall be entitled to rely
upon Haven's stock transfer books to establish the identity of those persons
entitled to receive the Merger Consideration, which books shall be conclusive
with respect thereto. In the event of a dispute with respect to ownership of
stock represented by any Haven Certificate, Queens and the Exchange Agent shall
be entitled to deposit any Merger Consideration represented thereby in escrow
with an independent third party and thereafter be relieved with respect to any
claims thereto.
(g) If any Haven Certificate shall have been lost, stolen or
destroyed, upon the making of an affidavit of that fact by the person claiming
such Haven Certificate to be lost, stolen or destroyed and, if required by the
Exchange Agent, the posting by such person of a bond in such amount as the
Exchange Agent may direct as indemnity against any claim that may be made
against it with respect to such Haven Certificate, the Exchange Agent will issue
in exchange for such lost,
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<PAGE>
stolen or destroyed Haven Certificate the Merger Consideration deliverable in
respect thereof pursuant to Section 1.2.
Section 1.4. Stock Options.
-------------
(a) Subject to Section 1.4(b), each option to purchase shares
of Haven Common Stock that has been issued by Haven and is outstanding at the
Effective Time (each, a "Haven Option") pursuant to the Haven Incentive Stock
Option Plan, the Haven Stock Option Plan for Outside Directors and the Haven
Stock Incentive Plan (collectively, the "Haven Option Plans") shall be converted
into an option to purchase shares of Queens Common Stock as follows:
(i) the aggregate number of shares of Queens Common
Stock issuable upon the exercise of each converted Haven Option after
the Effective Time shall be equal to the product of (A) the Exchange
Ratio multiplied by (B) the number of shares of Haven Common Stock
issuable upon exercise of the Haven Option immediately prior to the
Effective Time, such product to be rounded to the nearest whole share
of Queens Common Stock; and
(ii) the exercise price per share of each converted
Haven Option shall be equal to the quotient of the exercise price of
such Haven Option at the Effective Time divided by the Exchange Ratio,
such quotient to be rounded to the nearest whole cent;
PROVIDED, HOWEVER, that, in the case of any Haven Option that is intended to
qualify as an incentive stock option under Section 422 of the Code, the number
of shares of Queens Common Stock issuable upon exercise of and the exercise
price per share for such converted Haven Option determined in the manner
provided above shall be further adjusted in such manner as Queens may determine
to be necessary to conform to the requirements of Section 424(b) of the Code.
Options to purchase shares of Queens Common Stock that arise from the operation
of this Section 1.4 shall be referred to as the "Converted Options." All
Converted Options shall be exercisable for the same period and otherwise have
the same terms and conditions applicable to Haven Options that they replace.
Prior to the Effective Time, Queens shall take, or cause to be taken, all
necessary action to effect the intent of the provisions set forth in this
Section 1.4.
(b) Notwithstanding Section 1.4(a) and subject to the
provisions of this Section 1.4(b), any Haven Option shall, if so requested by
the option holder, be cancelled and shall cease to be exercisable. Any such
request shall be made in writing in the form and manner specified by Haven and
reasonably acceptable to the Queens and shall be delivered to the Queens at
least ten (10) business days prior to the Effective Time. In consideration for
such cancellation, each holder of a Haven Option making such request shall be
paid, with respect to each Haven Option so canceled, an amount equal to the
excess (if any) of the product of the Queens Market Value (as defined herein)
times the Exchange Ratio over the price at which the holder may acquire a share
of Haven Common Stock upon exercise of such Haven Option (such excess, the
"Option Cashout Payment"). Such payment shall be made as soon as practicable
following the Effective Time or, if later in the case of any holder of a Haven
Option, the date on which such holder delivers to Haven his written acceptance
of an Option Cashout Payment as full and complete consideration for the
cancellation of each Haven Option held by such holder. Haven shall take such
action as is necessary or appropriate under the terms of Haven's Option Plans to
convert each Haven Option for which such
-5-
<PAGE>
a request is timely made as of the Effective Time, into the right to receive an
Option Cashout Payment upon the terms and conditions set forth herein. Such
payment hereunder shall be subject to withholding for applicable federal, state
and local taxes.
(c) Prior to the date of Haven stockholders meeting
contemplated by Section 4.8, Haven shall take, or cause to be taken, appropriate
action under the terms of any stock option plan, agreement or arrangement under
which Haven Options have been granted to provide for the conversion of Haven
Options outstanding at the Effective Time into Converted Options and to effect
any other modifications contemplated by Section 1.4(a).
(d) Concurrently with the reservation of shares of Queens
Common Stock to provide for the payment of the Merger Consideration, Queens
shall take all corporate action necessary to reserve for future issuance a
sufficient additional number of shares of Queens Common Stock to provide for the
satisfaction of its obligations with respect to the Converted Options. As soon
as practicable following the Effective Time, Queens shall (i) cause to be
executed and delivered to each holder of a Converted Option an agreement,
certificate or other instrument, in such form and of such substance as Queens
may reasonably determine, evidencing such holder's rights with respect to the
Converted Options; and (ii) file a registration statement on Form S-8 (or any
successor or other appropriate form) and make any state filings or obtain state
exemptions with respect to the Queens Common Stock issuable upon exercise of the
Converted Options.
Section 1.5. DIRECTORS AND OFFICERS OF QUEENS AFTER EFFECTIVE
TIME. At the Effective Time, the directors and officers of Queens shall consist
of (a) the directors and officers of Queens serving immediately prior to the
Effective Time and (b) such additional persons who shall become directors or
officers of Queens as contemplated by Section 4.13 and any employment agreements
entered into by and between Queens and any officer of Haven.
Section 1.6. CERTIFICATE OF INCORPORATION AND BY-LAWS. The
Certificate of Incorporation and By-laws of Queens immediately after the Merger
shall be those of Queens as in effect immediately prior to the Effective Time,
except as may be affected by the proposed change of name of Queens.
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ARTICLE II
REPRESENTATIONS AND WARRANTIES
Section 2.1. DISCLOSURE LETTERS. On or prior to the execution
and delivery of this Agreement, Haven and Queens each shall have delivered to
the other a letter (each, its "Disclosure Letter") setting forth, among other
things, facts, circumstances and events the disclosure of which is required or
appropriate in relation to any or all of their respective representations and
warranties (and making specific reference to the Section of this Agreement to
which they relate); PROVIDED, that (a) no such fact, circumstance or event is
required to be set forth in the Disclosure Letter as an exception to a
representation or warranty if its absence is not reasonably likely to result in
the related representation or warranty being deemed untrue or incorrect under
the standards established by Section 2.2 and (b) the mere inclusion of a fact,
circumstance or event in a Disclosure Letter shall not be deemed an admission by
a party that such item represents a material exception or that such item is
reasonably likely to result in a Material Adverse Effect (as defined herein).
Section 2.2. Standards.
---------
(a) No representation or warranty of Haven or Queens contained
in Sections 2.3 or 2.4, respectively, shall be deemed untrue or incorrect, and
no party hereto shall be deemed to have breached a representation or warranty,
on account of the existence of any fact, circumstance or event unless, as a
direct or indirect consequence of such fact, circumstance or event, individually
or taken together with all other facts, circumstances or events inconsistent
with any paragraph of Sections 2.3 or 2.4, as applicable, there is reasonably
likely to exist a Material Adverse Effect (as defined herein).
Haven's representations, warranties and covenants contained in this Agreement
shall not be deemed to be untrue or breached as a result of effects arising
solely from actions taken in compliance with a written request of Queens.
(b) As used in this Agreement, the term "Material Adverse
Effect" means either (i) an effect which is material and adverse to the
business, financial condition or results of operations of Haven or Queens, as
the context may dictate, and its Subsidiaries taken as a whole; PROVIDED,
HOWEVER, that any such effect resulting from any (A) changes in laws, rules or
regulations or generally accepted accounting principles ("GAAP") or
interpretations thereof that apply to both Queens and Queens County Savings
Bank, a New York State chartered savings bank ("Queens Bank") and Haven and CFS
Bank, a federally chartered savings association ("CFS Bank"), as the case may
be, or (B) changes in the general level of market interest rates shall not be
considered in determining if a Material Adverse Effect has occurred; or (ii) the
failure of (x) a representation or warranty contained in Section 2.3(a)(i) and
(iv), Section 2.3(d), Section 2.3(g)(iii), Section 2.4(a)(i) and (iv), Section
2.4(d), 2.4(g)(ii) or Section 2.4(l) to be true and correct or (y) a
representation or warranty contained in Section 2.3(a)(v), Section 2.3(b),
Section 2.3(c), clause (ii) of Section 2.3(e), Section 2.3(f)(i), Section
2.3(k)(i)(E), the first sentence of Section 2.3(m), Section 2.3(p), Section
2.3(u), Section 2.3(aa), Section 2.4(a)(v), Section 2.4(b), Section 2.4(c),
clause (ii) of Section 2.4(e), Section 2.4(f)(i), the first sentence of Section
2.4(n), Section 2.4(q), Section 2.4(u) and Section 2.4(y) to be true and correct
in all material respects.
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(c) For purposes of this Agreement, "knowledge" shall mean,
with respect to a party hereto, actual knowledge of the members of the Board of
Directors of that party, its counsel or any officer of that party with the title
ranking not less than senior vice president.
Section 2.3. Representations and Warranties of Haven.
---------------------------------------
Subject to Sections 2.1 and 2.2, Haven represents and warrants to Queens that,
except as specifically disclosed in Haven's Disclosure Letter:
(a) ORGANIZATION. (i) Haven is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware
and is duly registered as a savings and loan holding company under the Home
Owners' Loan Act of 1933, as amended ("HOLA"). CFS Bank is a savings association
duly organized, validly existing and in good standing under the laws of the
United States of America and is a wholly-owned Subsidiary (as defined herein) of
Haven. Each Significant Subsidiary (as defined herein) of Haven, other than CFS
Bank, is a corporation, limited liability company or partnership duly organized,
validly existing and in good standing under the laws of its jurisdiction of
incorporation or organization. Each of Haven and its Significant Subsidiaries
has all requisite power and authority to own, lease and operate its properties
and to carry on its business as now being conducted, and unless the context
requires otherwise, the term "Subsidiary" when used with respect to any party
means any corporation or other organization, whether incorporated or
unincorporated, which is consolidated with such party for financial reporting
purposes or which is controlled, directly or indirectly, by such party, and the
term "Significant Subsidiary" shall mean each Subsidiary that is a "significant
subsidiary" as defined in Regulation S-X, promulgated by the SEC (as defined
herein), as in effect as of the date hereof.
(ii) Haven and each of its Significant Subsidiaries
has the requisite corporate power and authority, and is duly qualified and is in
good standing, to do business in each jurisdiction in which the nature of its
business or the ownership or leasing of its properties makes such qualification
necessary.
(iii) Haven's Disclosure Letter sets forth all
of Haven's Subsidiaries and all entities (whether corporations, partnerships or
similar organizations), including the corresponding percentage ownership, in
which Haven owns, directly or indirectly, 5% or more of the ownership interests
as of the date of this Agreement and indicates for each such Subsidiary, as of
such date, its jurisdiction of organization and the jurisdiction(s) wherein it
is qualified to do business. All such Subsidiaries and ownership interests are
in compliance with all applicable laws, rules and regulations relating to direct
investments in equity ownership interests. Haven owns, either directly or
indirectly, all of the outstanding capital stock of each of its Subsidiaries. No
Subsidiary of Haven other than CFS Bank is an "insured depository institution"
as defined in the Federal Deposit Insurance Act, as amended ("FDIA"), and the
applicable regulations thereunder. All of the shares of capital stock of each of
the Subsidiaries held by Haven or any of its other Subsidiaries are duly
authorized and validly issued, fully paid and nonassessable and not subject to
any preemptive rights and are owned by Haven or a Subsidiary of Haven free and
clear of any claims, liens, encumbrances or restrictions (other than those
imposed by applicable federal and state securities laws), and there are no
agreements or understandings with respect to the voting or disposition of any
such shares.
(iv) The deposits of CFS Bank are insured by the
Savings Association Insurance Fund ("SAIF") of the Federal Deposit Insurance
Corporation ("FDIC") to the extent
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provided in the FDIA. CFS Bank is a member of the Federal Home Loan Bank
("FHLB") of New York.
(v) As of the date of this Agreement, CFS Bank
is "well managed" and "well capitalized" as defined under applicable federal
banking law and regulation.
(b) CAPITAL STRUCTURE. (i) As of the date of this Agreement,
the authorized capital stock of Haven consists of 30,000,000 shares of Haven
Common Stock and 2,000,000 shares of preferred stock, par value $.01 per share
("Haven Preferred Stock"). As of the date of this Agreement, (A) 9,119,219
shares of Haven Common Stock were issued and outstanding, (B) no shares of Haven
Preferred Stock were issued and outstanding, (C) no shares of Haven Common Stock
were reserved for issuance, except that 1,299,962 shares of Haven Common Stock
were reserved for issuance pursuant to Haven Option Plans, which includes
1,299,962 shares reserved for issuance upon the exercise of options that have
already been granted under Haven Option Plans, (D) no shares of Haven Preferred
Stock were reserved for issuance except pursuant to Haven Rights Agreement and
(E) 799,531 shares of Haven Common Stock were held by Haven in its treasury or
by its Subsidiaries. The authorized capital stock of CFS Bank consists of
10,500,000 shares of common stock, par value $1.00 per share, and 2,000,000
shares of preferred stock, par value $1.00 per share. As of this date of the
Agreement, 1,000 shares of such common stock were outstanding, no shares of such
preferred stock were outstanding and all outstanding shares of such common stock
were, and as of the Effective Time will be, owned by Haven. All outstanding
shares of capital stock of Haven and CFS Bank are duly authorized and validly
issued, fully paid and nonassessable and not subject to any preemptive rights
and, with respect to shares held by Haven in its treasury or by its Significant
Subsidiaries, are free and clear of all liens, claims, encumbrances or
restrictions (other than those imposed by applicable federal and state
securities laws), and there are no agreements or understandings with respect to
the voting or disposition of any such shares. Haven's Disclosure Letter sets
forth a complete and accurate list of all options to purchase Haven Common Stock
that have been granted pursuant to Haven Option Plans and all restricted stock
grants under Haven Option Plans and Haven RRPs, including the dates of grant,
exercise prices, dates of vesting, dates of termination and shares subject to
each grant.
(ii) No bonds, debentures, notes or other
indebtedness having the right to vote on any matters on which stockholders of
Haven may vote ("Voting Debt") are issued or outstanding.
(iii) Except for the Option Agreement, neither
Haven nor any of its Subsidiaries has or is bound by any outstanding options,
warrants, calls, rights, convertible securities, commitments or agreements of
any character obligating Haven or any of its Subsidiaries to issue, deliver or
sell, or cause to be issued, delivered or sold, any additional shares of capital
stock of Haven or any of its Subsidiaries or obligating Haven or any of its
Subsidiaries to grant, extend or enter into any such option, warrant, call,
right, convertible security, commitment or agreement. As of the date hereof,
there are no outstanding contractual obligations of Haven or any of its
Subsidiaries to repurchase, redeem or otherwise acquire any shares of capital
stock of Haven or any of its Subsidiaries.
(c) AUTHORITY. Haven has the requisite corporate power and
authority to enter into this Agreement, and, subject to approval of this
Agreement by the requisite vote of Haven's
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stockholders and receipt of all required regulatory or governmental approvals,
as contemplated by Section 5.1(b) of this Agreement, to consummate the
transactions contemplated hereby. The execution and delivery of this Agreement,
and, subject to the approval of this Agreement by Haven's stockholders, the
consummation of the transactions contemplated hereby, have been duly authorized
by all necessary corporate actions on the part of Haven. This Agreement has been
duly executed and delivered by Haven and constitutes a valid and binding
obligation of Haven, enforceable in accordance with its terms subject to
applicable bankruptcy, insolvency and similar laws affecting creditors' rights
and remedies generally and subject, as to enforceability, to general principles
of equity, whether applied in a court of law or a court of equity.
(d) STOCKHOLDER APPROVAL; Fairness Opinion. The affirmative
vote of the holders of a majority of the outstanding shares of Haven Common
Stock entitled to vote on this Agreement is the only vote of the stockholders of
Haven required for approval of this Agreement by Haven and the consummation by
Haven of the Merger and the related transactions contemplated hereby. Haven has
received the written opinion of Lehman Brothers, Inc. to the effect that, as of
the date hereof, the Merger Consideration is fair, from a financial point of
view, to Haven's stockholders.
(e) NO VIOLATIONS. The execution, delivery and performance of
this Agreement and the Option Agreement by Haven do not, and the consummation of
the transactions contemplated hereby and thereby will not, constitute (i)
assuming (in the case of this Agreement only) receipt of all Requisite
Regulatory Approvals (as defined herein) and (in the case of this Agreement
only) requisite stockholder approvals, a breach or violation of, or a default
under, any law, rule or regulation or any judgment, decree, order, governmental
permit or license, or agreement, indenture or instrument of Haven or any of its
Significant Subsidiaries, or to which Haven or any of its Significant
Subsidiaries (or any of their respective properties) is subject, (ii) a breach
or violation of, or a default under, the certificate of incorporation or bylaws
of Haven or the similar organizational documents of any of its Significant
Subsidiaries or (iii) a breach or violation of, or a default under (or an event
which, with due notice or lapse of time or both, would constitute a default
under), or result in the termination of, accelerate the performance required by,
or result in the creation of any lien, pledge, security interest, charge or
other encumbrance upon any of the properties or assets of Haven or any of its
Significant Subsidiaries, under, any of the terms, conditions or provisions of
any note, bond, indenture, deed of trust, loan agreement or other agreement,
instrument or obligation to which Haven or any of its Significant Subsidiaries
is a party, or to which any of their respective properties or assets may be
subject; and the consummation of the transactions contemplated hereby will not
require any approval, consent or waiver under any such law, rule, regulation,
judgment, decree, order, governmental permit or license or the approval, consent
or waiver of any other party to any such agreement, indenture or instrument,
other than (v) the approval of the holders of a majority of the outstanding
shares of Haven Common Stock referred to in Section 2.3(d), (w) the approval of
the Office of Thrift Supervision ("OTS") under the HOLA, the approval of the
FDIC under Section 18(c) of the FDIA, the approval of the Board of Governors of
the Federal Reserve System under the Bank Holding Company Act of 1956, as
amended (including the approval for Queens to become a financial holding company
in connection with the Merger) and the approval of the NASD for a change in
control of any broker-dealers, (x) the declaration of effectiveness by the SEC
(as defined herein) of the Registration Statement (as defined herein) and the
SEC's approval of Haven's and Queens' proxy materials, (y) approval of the
Antitrust Division of the Department of Justice or the Federal Trade Commission
under the antitrust laws, including, without limitation, the Hart-Scott-Rodino
Antitrust Improvements Act of 1976, as amended, or the expiration of any
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required waiting periods thereunder ((w), (x) and (y) are, collectively,
referred to as the "Requisite Regulatory Approvals") and (z) such approvals,
consents or waivers as are required under the federal and state securities or
"blue sky" laws in connection with the transactions contemplated by this
Agreement or Option Agreement.
(f) REPORTS. (i) As of their respective dates, none of the
reports or other statements filed by Haven on or subsequent to December 31, 1998
with the Securities and Exchange Commission ("SEC") under Section 13(a), 13(c),
14 or 15(d) of the Securities Exchange Act of 1934, as amended ("Exchange Act")
(collectively, "Haven's Reports"), contained, or will contain, any untrue
statement of a material fact or omitted or will omit to state a material fact
required to be stated therein or necessary to make the statements made therein,
in light of the circumstances under which they were made, not misleading. Each
of the financial statements of Haven included in Haven's Reports complied, as of
its respective date of filing with the SEC, in all material respects with
applicable accounting requirements and with the published rules and regulations
of the SEC with respect thereto and has been prepared in accordance with GAAP
applied on a consistent basis during the periods involved (except as may be
indicated in the notes thereto or, in the case of the unaudited financial
statements, as permitted by Form 10-Q of the SEC). Each of the consolidated
statements of condition, consolidated statements of operations, consolidated
statements of cash flows and consolidated statements of changes in stockholders'
equity contained or incorporated by reference in Haven's Reports (including in
each case any related notes and schedules) fairly presented, or will fairly
present, as the case may be, the financial condition, results of operations,
cash flows and stockholders' equity, as the case may be, of the entity or
entities to which it relates for the periods set forth therein (subject, in the
case of unaudited interim statements, to normal year-end audit adjustments that
are not material in amount or effect), in each case in accordance with GAAP,
except as may be noted therein.
(ii) Haven and each of its Subsidiaries have each
timely filed all material reports, registrations and statements, together with
any amendments required to be made with respect thereto, that they were required
to file since December 31, 1999 with (A) the OTS, (B) the FDIC, (C) the SEC, (D)
the National Association of Securities Dealers, Inc. ("NASD"), and (E) any other
self-regulatory organization ("SRO"), and have paid all fees and assessments due
and payable in connection therewith.
(g) ABSENCE OF CERTAIN CHANGES OR EVENTS. Since March 31,
2000, (i) Haven and its Subsidiaries have not incurred any liability, except in
the ordinary course of their business consistent with past practice, (ii) Haven
and its Subsidiaries have conducted their respective businesses, other than the
negotiation, execution and delivery of this Agreement and ancillary matters
related thereto, only in the ordinary course of such businesses and (iii) there
has not been any Material Adverse Effect with respect to Haven.
(h) ABSENCE OF CLAIMS. No litigation, proceeding, controversy,
claim or action before any court or any federal, state, local or foreign
governmental or regulatory body (each, a "Governmental Entity") is pending
against Haven or any of its Subsidiaries and, to the best of Haven's knowledge,
no such litigation, proceeding, controversy, claim or action has been
threatened.
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(i) ABSENCE OF REGULATORY ACTIONS. Neither Haven nor any of
its Subsidiaries is a party to any cease and desist order, written agreement or
memorandum of understanding with, or any commitment letter or similar written
undertaking to, or is subject to any action, proceeding, order or directive by,
or is a recipient of any extraordinary supervisory letter from, any federal or
state governmental authority charged with the supervision or regulation of
depository institutions or depository institution holding companies or engaged
in the insurance of bank and/or savings and loan deposits (each, a "Bank
Regulator"), or has adopted any board resolutions at the request of any Bank
Regulator, nor has it been advised by any Bank Regulator that it is
contemplating issuing or requesting (or is considering the appropriateness of
issuing or requesting) any such action, proceeding, order, directive, written
agreement, memorandum of understanding, extraordinary supervisory letter,
commitment letter, board resolutions or similar written undertaking.
(j) TAXES. All federal, state, local and foreign tax returns
required to be filed by or on behalf of Haven or any of its Subsidiaries have
been timely filed, or requests for extensions have been timely filed and any
such extension shall have been granted and not have expired, and all such filed
returns are complete and accurate in all material respects. All taxes shown on
such returns, all taxes required to be shown on returns for which extensions
have been granted and all other taxes required to be paid by Haven or any of its
Subsidiaries have been paid in full or adequate provision has been made for any
such taxes on Haven's balance sheet (in accordance with GAAP).
For purposes of this Section 2.3(j), the term "taxes" shall include all federal,
state, local or foreign taxes, charges or other assessments, including, without
limitation, income, franchise, gross receipts, real and personal property, real
property transfer and gains, wage and employment taxes. As of the date of this
Agreement, there is no audit examination, deficiency assessment, tax
investigation or refund litigation with respect to any taxes of Haven or any of
its Subsidiaries, and no claim has been made by any authority in a jurisdiction
where Haven or any of its Subsidiaries do not file tax returns that Haven or any
such Subsidiary is subject to taxation in that jurisdiction. All taxes,
interest, additions and penalties due with respect to completed and settled
examinations or concluded litigation relating to Haven or any of its
Subsidiaries have been paid in full or adequate provision has been made for any
such taxes on Haven's balance sheet (in accordance with GAAP). Haven and its
Subsidiaries have not executed an extension or waiver of any statute of
limitations on the assessment or collection of any material tax due that is
currently in effect. Haven and each of its Subsidiaries has withheld and paid
all taxes required to have been withheld and paid in connection with amounts
paid or owing to any employee, independent contractor, creditor, stockholder or
other third party, and Haven and each of its Subsidiaries has timely complied
with all applicable information reporting requirements under Part III,
Subchapter A of Chapter 61 of the Code and similar applicable state and local
information reporting requirements. Neither Haven nor any of its Subsidiaries
(i) has made an election under Section 341(f) of the Code, (ii) has issued or
assumed any obligation under Section 279 of the Code, any high yield discount
obligation as described in Section 163(i) of the Code or any
registration-required obligation within the meaning of Section 163(f)(2) of the
Code that is not in registered form or (iii) is or has been a United States real
property holding corporation within the meaning of Section 897(c)(2) of the
Code.
(k) AGREEMENTS. (i) Except for this Agreement, the Option
Agreement and arrangements made in the ordinary course of business, Haven and
its Subsidiaries are not bound by any material contract (as defined in Item
601(b)(10) of Regulation S-K) to be performed after the date hereof that is
required to but has not been filed with or incorporated by reference in Haven's
Reports. Except as disclosed in Haven's Reports filed prior to the date of this
Agreement, neither
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Haven nor any of its Subsidiaries is a party to an oral or written (A)
consulting agreement (other than data processing, software programming and
licensing contracts entered into in the ordinary course of business) not
terminable on 60 days' or less notice, (B) agreement with any executive officer
or other key employee of Haven or any of its Subsidiaries the benefits of which
are contingent, or the terms of which are materially altered, upon the
occurrence of a transaction involving Haven or any of its Subsidiaries of the
nature contemplated by this Agreement or the Option Agreement, (C) agreement
with respect to any employee or director of Haven or any of its Subsidiaries
providing any term of employment or compensation guarantee extending for a
period longer than 60 days or for the payment of in excess of $50,000 per annum,
(D) agreement or plan, including any stock option plan, phantom stock or stock
appreciation rights plan, restricted stock plan or stock purchase plan, any of
the benefits of which will be increased, or the vesting or payment of the
benefits of which will be accelerated, by the occurrence of any of the
transactions contemplated by this Agreement or the Option Agreement or the value
of any of the benefits of which will be calculated on the basis of any of the
transactions contemplated by this Agreement or the Option Agreement or (E)
agreement containing covenants that limit the ability of Haven or any of its
Subsidiaries to compete in any line of business or with any person, or that
involve any restriction on the geographic area in which, or method by which,
Haven (including any successor thereof) or any of its Subsidiaries may carry on
its business (other than as may be required by law or any regulatory agency).
(ii) Neither Haven nor any of its Subsidiaries is in
default under or in violation of any provision of any note, bond, indenture,
mortgage, deed of trust, loan agreement, lease or other agreement to which it is
a party or by which it is bound or to which any of its respective properties or
assets is subject.
(iii) Haven and each of its Subsidiaries owns or
possesses valid and binding licenses and other rights to use without payment all
patents, copyrights, trade secrets, trade names, service marks and trademarks
used in its businesses, and neither Haven nor any of its Subsidiaries has
received any notice of conflict with respect thereto that asserts the right of
others. Each of Haven and its Subsidiaries has performed all the obligations
required to be performed by it and are not in default under any contact,
agreement, arrangement or commitment relating to any of the foregoing.
(l) LABOR MATTERS. Neither Haven nor any of its Subsidiaries
is or has ever been a party to, or is or has ever been bound by, any collective
bargaining agreement, contract or other agreement or understanding with a labor
union or labor organization with respect to its employees, nor is Haven or any
of its Subsidiaries the subject of any proceeding asserting that it has
committed an unfair labor practice or seeking to compel it or any such
Subsidiary to bargain with any labor organization as to wages and conditions of
employment, nor is there any strike, other labor dispute or organizational
effort involving Haven or any of its Subsidiaries pending or, to Haven's
knowledge, threatened. Haven and its Subsidiaries are in compliance with
applicable laws regarding employment of employees and retention of independent
contractors and are in compliance with applicable employment tax laws.
(m) EMPLOYEE BENEFIT PLANS. Haven's Disclosure Letter contains
a complete and accurate list of all pension, retirement, stock option, stock
purchase, stock ownership, savings, stock appreciation right, profit sharing,
deferred compensation, consulting, bonus, group insurance,
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severance and other benefit plans, contracts, agreements and arrangements,
including, but not limited to, "employee benefit plans," as defined in Section
3(3) of the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), incentive and welfare policies, contracts, plans and arrangements and
all trust agreements related thereto with respect to any present or former
directors, officers or other employees of Haven or any of its Subsidiaries
(hereinafter referred to collectively as the "Haven Employee Plans"). All Haven
Employee Plans comply in all material respects with all applicable requirements
of ERISA, the Code and other applicable laws; there has occurred no "prohibited
transaction" (as defined in Section 406 of ERISA or Section 4975 of the Code)
which is likely to result in the imposition of any material penalties or taxes
under Section 502(i) of ERISA or Section 4975 of the Code upon Haven or any of
its Subsidiaries. No liability to the Pension Benefit Guaranty Corporation
("PBGC") has been or is expected by Haven or any of its Subsidiaries to be
incurred with respect to any Haven Employee Plan which is subject to Title IV of
ERISA ("Haven Pension Plan"), or with respect to any "single-employer plan" (as
defined in Section 4001(a) of ERISA) currently or formerly maintained by Haven
or any entity which is considered one employer with Haven under Section
4001(b)(1) of ERISA or Section 414 of the Code (an "ERISA Affiliate"). No Haven
Pension Plan had an "accumulated funding deficiency" (as defined in Section 302
of ERISA), whether or not waived, as of the last day of the end of the most
recent plan year ending prior to the date hereof; the fair market value of the
assets of each Haven Pension Plan exceeds the present value of the "benefit
liabilities" (as defined in Section 4001(a)(16) of ERISA) under such Haven
Pension Plan as of the end of the most recent plan year with respect to the
respective Haven Pension Plan ending prior to the date hereof, calculated on the
basis of the actuarial assumptions used in the most recent actuarial valuation
for such Haven Pension Plan as of the date hereof; and no notice of a
"reportable event" (as defined in Section 4043 of ERISA) for which the 30-day
reporting requirement has not been waived has been required to be filed for any
Haven Pension Plan within the 12-month period ending on the date hereof. Neither
Haven nor any of its Subsidiaries has provided, or is required to provide,
security to any Haven Pension Plan or to any single-employer plan of an ERISA
Affiliate pursuant to Section 401(a)(29) of the Code. Neither Haven, its
Subsidiaries, nor any ERISA Affiliate has contributed to any "multiemployer
plan," as defined in Section 3(37) of ERISA, on or after September 26, 1980.
Each Haven Employee Plan that is an "employee pension benefit plan" (as defined
in Section 3(2) of ERISA) and which is intended to be qualified under Section
401(a) of the Code (a "Haven Qualified Plan") has received a favorable
determination letter from the Internal Revenue Service ("IRS"), and Haven and
its Subsidiaries are not aware of any circumstances likely to result in
revocation of any such favorable determination letter. There is no pending or,
to Haven's knowledge, threatened litigation, administrative action or proceeding
relating to any Haven Employee Plan. Except as provided elsewhere in this
Agreement, there has been no announcement or commitment by Haven or any of its
Subsidiaries to create an additional Haven Employee Plan, or to amend any Haven
Employee Plan, except for amendments required by applicable law which do not
materially increase the cost of such Haven Employee Plan; and, Haven and its
Subsidiaries do not have any obligations for post-retirement or post-employment
benefits under any Haven Employee Plan that cannot be amended or terminated upon
60 days' notice or less without incurring any liability thereunder, except for
coverage required by Part 6 of Title I of ERISA or Section 4980B of the Code, or
similar state laws, the cost of which is borne by the insured individuals. All
contributions required to be made under the terms of any Haven Employee Plan
have been timely made or have been reflected on Haven's Reports. With respect to
Haven or any of its Subsidiaries, for Haven Employee Plans listed in Haven's
Disclosure Letter, the execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby will not result in any
payment or series of payments by Haven or any of its Subsidiaries to any person
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which is an "excess parachute payment" (as defined in Section 280G of the Code),
increase or secure (by way of a trust or other vehicle) any benefits payable
under any Haven Employee Plan or accelerate the time of payment or vesting of
any such benefit. With respect to each Haven Employee Plan, Haven has supplied
to Queens a true and correct copy of (A) the annual report on the applicable
form of the Form 5500 series filed with the IRS for the most recent three plan
years, if required to be filed, (B) such Haven Employee Plan, including
amendments thereto, (C) each trust agreement, insurance contract or other
funding arrangement relating to such Haven Employee Plan, including amendments
thereto, (D) the most recent summary plan description and summary of material
modifications thereto for such Haven Employee Plan, if Haven Employee Plan is
subject to Title I of ERISA, (E) the most recent actuarial report or valuation
if such Haven Employee Plan is a Haven Pension Plan and any subsequent changes
to the actuarial assumptions contained therein and (F) the most recent
determination letter issued by the IRS if such Haven Employee Plan is a Haven
Qualified Plan.
(n) TITLE TO ASSETS. Haven and each of its Subsidiaries has
good and marketable title to its properties and assets (including any
intellectual property asset such as any trademark, service mark, tradename or
copyright) and property acquired in a judicial foreclosure proceeding or by way
of a deed in lieu of foreclosure or similar transfer, other than property as to
which it is lessee, in which case the related lease is valid and in full force
and effect. Each lease pursuant to which Haven or any of its Subsidiaries is
lessor is valid and in full force and effect, and no lessee under any such lease
is in default or in violation of any provisions of any such lease. All material
tangible properties of Haven and each of its Subsidiaries are in a good state of
maintenance and repair, conform with all applicable ordinances, regulations and
zoning laws and are considered by Haven to be adequate for the current business
of Haven and its Subsidiaries.
(o) COMPLIANCE WITH LAWS. Haven and each of its Subsidiaries
has all permits, licenses, certificates of authority, orders and approvals of,
and has made all filings, applications and registrations with, all Governmental
Entities that are required in order to permit it to carry on its business as it
is presently conducted; all such permits, licenses, certificates of authority,
orders and approvals are in full force and effect, and, to the best knowledge of
Haven, no suspension or cancellation of any of them is threatened. Since the
date of its incorporation, the corporate affairs of Haven have not been
conducted in violation of any law, ordinance, regulation, order, writ, rule,
decree or approval of any Governmental Entity. The businesses of Haven and its
Subsidiaries are not being, and have not been conducted in violation of any law,
ordinance, regulation, order, writ, rule, decree or condition to approval of any
Governmental Entity or any policy or procedure.
(p) FEES. Other than financial advisory services performed for
Haven by Lehman Brothers, Inc. pursuant to an agreement dated September 17,
1999, a true and complete copy of which is set forth in Haven's Disclosure
Letter, neither Haven nor any of its Subsidiaries, nor any of their respective
officers, directors, employees or agents, has employed any broker or finder or
incurred any liability for any financial advisory fees, brokerage fees,
commissions or finder's fees, and no broker or finder has acted directly or
indirectly for Haven or any of its Subsidiaries in connection with this
Agreement or the transactions contemplated hereby.
(q) ENVIRONMENTAL MATTERS. (i) With respect to Haven and each
of its Subsidiaries:
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(A) Each of Haven and its Subsidiaries, the
Participation Facilities (as defined herein), and, to Haven's
knowledge, the Loan Properties (as defined herein) are, and
have been, in substantial compliance with, and are not liable
under, all Environmental Laws (as defined herein);
(B) There is no suit, claim, action, demand,
executive or administrative order, directive, investigation or
proceeding pending or, to Haven's knowledge, threatened,
before any court, governmental agency or board or other forum
against Haven or any of its Subsidiaries or any Participation
Facility (x) for alleged noncompliance (including by any
predecessor) with, or liability under, any Environmental Law
or (y) relating to the presence of or release (as defined
herein) into the environment of any Hazardous Material (as
defined herein), whether or not occurring at or on a site
owned, leased or operated by it or any of its Subsidiaries or
any Participation Facility;
(C) To Haven's knowledge, there is no suit, claim,
action, demand, executive or administrative order, directive,
investigation or proceeding pending or threatened before any
court, governmental agency or board or other forum relating to
or against any Loan Property (or Haven or any of its
Subsidiaries in respect of such Loan Property) (x) relating to
alleged noncompliance (including by any predecessor) with, or
liability under, any Environmental Law or (y) relating to the
presence of or release into the environment of any Hazardous
Material, whether or not occurring at or on a site owned,
leased or operated by a Loan Property;
(D) To Haven's knowledge, the properties currently
owned or operated by Haven or any of its Subsidiaries
(including, without limitation, soil, groundwater or surface
water on, under or adjacent to the properties, and buildings
thereon) are not contaminated with and do not otherwise
contain any Hazardous Material other than as permitted under
applicable Environmental Law;
(E) Neither Haven nor any of its Subsidiaries has
received any notice, demand letter, executive or
administrative order, directive or request for information
from any federal, state, local or foreign governmental entity
or any third party indicating that it may be in violation of,
or liable under, any Environmental Law;
(F) To Haven's knowledge, there are (i) no
underground storage tanks on, in or under any properties owned
or operated by Haven or any of its Subsidiaries, any
Participation Facility or any Loan Property, and (ii) no
underground storage tanks have been closed or removed from any
properties owned or operated by Haven or any of its
Subsidiaries, any Participation Facility or any Loan Property;
and
(G) To Haven's knowledge, during the period of (l)
Haven's or any of its Subsidiaries' ownership or operation of
any of their respective current properties, (m) Haven's or any
of its Subsidiaries' participation in the management of any
Participation Facility or (n) Haven's or any of its
Subsidiaries' holding of a security interest in a Loan
Property, there has been no contamination by or release of
Hazardous Materials in, on, under or affecting such
properties. To Haven's
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knowledge, prior to the period of (x) Haven's or any of its
Subsidiaries' ownership or operation of any of their
respective current properties, (y) Haven's or any of its
Subsidiaries' participation in the management of any
Participation Facility or (z) Haven's or any of its
Subsidiaries' holding of a security interest in a Loan
Property, there was no contamination by or release of
Hazardous Material in, on, under or affecting such properties.
(ii) The following definitions apply for purposes
of this Section 2.3(q) and Section 2.4(r): (w) "Loan Property" means any
property in which the applicable party (or any of its Subsidiaries) holds a
security interest, and, where required by the context, includes the owner or
operator of such property, but only with respect to such property; (x)
"Participation Facility" means any property in which the applicable party (or a
Subsidiary of it) participates in the management thereof (including all property
held as trustee or in any other fiduciary capacity) and, where required by the
context, includes the owner or operator of such property, but only with respect
to such property; (y) "Environmental Law" means (i) any federal, state or local
law, statute, ordinance, rule, regulation, code, license, permit, authorization,
approval, consent, legal doctrine, order, directive, executive or administrative
order, judgment, decree, injunction, legal requirement or agreement with any
Governmental Entity relating to (A) the protection, preservation or restoration
of the environment (which includes, without limitation, air, water vapor,
surface water, groundwater, drinking water supply, structures, soil, surface
land, subsurface land, plant and animal life or any other natural resource), or
to human health or safety as it relates to Hazardous Materials, or (B) the
exposure to, or the use, storage, recycling, treatment, generation,
transportation, processing, handling, labeling, production, release or disposal
of, Hazardous Materials, in each case as amended and as now in effect,
including, without limitation, (1) the Federal Comprehensive Environmental
Response, Compensation and Liability Act of 1980, the Superfund Amendments and
Reauthorization Act of 1986, the Federal Water Pollution Control Act of 1972,
the Federal Clean Air Act, the Federal Clean Water Act, the Federal Resource
Conservation and Recovery Act of 1976 (including, but not limited to, the
Hazardous and Solid Waste Amendments thereto and Subtitle I relating to
underground storage tanks), the Federal Solid Waste Disposal and the Federal
Toxic Substances Control Act, the Federal Insecticide, Fungicide and Rodenticide
Act, the Federal Occupational Safety and Health Act of 1970 as it relates to
Hazardous Materials, the Federal Hazardous Substances Transportation Act, the
Emergency Planning and Community Right-To-Know Act, the Safe Drinking Water Act,
the Endangered Species Act, the National Environmental Policy Act, the Rivers
and Harbors Appropriation Act or any so-called "Superfund" or "Superlien" law,
each as amended and as now or hereafter in effect, and (2) any common law or
equitable doctrine (including, without limitation, injunctive relief and tort
doctrines such as negligence, nuisance, trespass and strict liability) that may
impose liability or obligations for injuries or damages due to, or threatened as
a result of, the presence of or exposure to any Hazardous Material; and (z)
"Hazardous Material" means any substance (whether solid, liquid or gas) which is
or could be detrimental to human health or safety or to the environment,
currently or hereafter listed, defined, designated or classified as hazardous,
toxic, radioactive or dangerous, or otherwise regulated, under any Environmental
Law, whether by type or by quantity, including any substance containing any such
substance as a component. Hazardous Material includes, without limitation, any
toxic waste, pollutant, contaminant, hazardous substance, toxic substance,
hazardous waste, special waste, industrial substance, oil or petroleum, or any
derivative or by-product thereof, radon, radioactive material, asbestos,
asbestos-containing material, urea formaldehyde foam insulation, lead and
polychlorinated biphenyl.
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(r) LOAN PORTFOLIO; ALLOWANCE; ASSET QUALITY. (i) With
respect to each loan owned by Haven or its Subsidiaries in whole or in part
(each, a "Loan"), to the best knowledge of Haven:
(A) the note and the related security documents are
each legal, valid and binding obligations of the maker or
obligor thereof, enforceable against such maker or obligor in
accordance with their terms;
(B) neither Haven nor any of its Subsidiaries, nor
any prior holder of a Loan, has modified the note or any of
the related security documents in any material respect or
satisfied, canceled or subordinated the note or any of the
related security documents except as otherwise disclosed by
documents in the applicable Loan file;
(C) Haven or a Subsidiary is the sole holder of legal
and beneficial title to each Loan (or Haven's applicable
participation interest, as applicable), except as otherwise
referenced on the books and records of Haven;
(D) the note and the related security documents,
copies of which are included in the Loan files, are true and
correct copies of the documents they purport to be and have
not been suspended, amended, modified, canceled or otherwise
changed except as otherwise disclosed by documents in the
applicable Loan file;
(E) there is no pending or threatened condemnation
proceeding or similar proceeding affecting the property that
serves as security for a Loan, except as otherwise referenced
on the books and records of Haven;
(F) there is no litigation or proceeding pending or
threatened relating to the property that serves as security
for a Loan that would have a material adverse effect upon the
related Loan; and
(G) with respect to a Loan held in the form of a
participation, the participation documentation is legal,
valid, binding and enforceable.
(ii) The allowance for possible losses reflected
in Haven's audited statements of condition at December 31, 1999 and March 31,
2000 (unaudited) were, and the allowance for possible losses shown on the
balance sheets in Haven's Reports for periods ending after March 31, 2000 will
be, adequate, as of the dates thereof, under GAAP applicable to stock savings
banks consistently applied.
(iii) Haven's Disclosure Letter sets forth, as of
May 31, 2000, by category the amounts of all loans, leases, advances, credit
enhancements, other extensions of credit, commitments and interest-bearing
assets of Haven and its Subsidiaries that have been classified by any bank
examiner (whether regulatory or internal) as "Special Mention," "Substandard,"
"Doubtful," "Loss" or words of similar import. The other real estate owned
("OREO") included in any non-performing assets of Haven or any of its
Subsidiaries is carried net of reserves at the lower of cost or fair value, less
estimated selling costs, based on current management appraisals or
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evaluations to the extent material; PROVIDED, HOWEVER, that "current" shall mean
within the past 12 months.
(s) DEPOSITS. None of the deposits of Haven or any of its
Subsidiaries is a "brokered" deposit.
(t) HAVEN RIGHTS AGREEMENT. The Haven Rights Agreement has
been amended (the form of which is set forth in Haven's Disclosure Letter) so as
to provide that Queens will not become an "Acquiring Person" and that no "Shares
Acquisition Date" or "Distribution Date" (as such terms are defined in Haven
Rights Agreement) will occur as a result of the approval, execution or delivery
of the Covered Agreements or any transactions contemplated thereby, as well as
additional purchases by Queens of up to 4.9% of the then outstanding Haven
Common Stock.
(u) ANTITAKEOVER PROVISIONS INAPPLICABLE. Haven and its
Subsidiaries have taken all actions required to exempt Haven and Queens and the
Covered Agreements or any transactions contemplated thereby, as well as
additional purchases by Queens of up to 4.9% of the then outstanding Haven
Common Stock from any provisions of an antitakeover nature in their organization
certificates and bylaws and the provisions of Section 203 of the DGCL.
(v) MATERIAL INTERESTS OF CERTAIN PERSONS. Except as disclosed
in Haven's Proxy Statement for its 2000 Annual Meeting of Stockholders, no
officer or director of Haven, or any "associate" (as such term is defined in
Rule 12b-2 under the Exchange Act) of any such officer or director, has any
material interest in any material contract or property (real or personal),
tangible or intangible, used in or pertaining to the business of Haven or any of
its Subsidiaries.
(w) INSURANCE. Haven and its Subsidiaries are presently
insured, and since December 31, 1998, have been insured, for reasonable amounts
with financially sound and reputable insurance companies, against such risks as
companies engaged in a similar business would, in accordance with good business
practice, customarily be insured. All of the insurance policies and bonds
maintained by Haven and its Subsidiaries are in full force and effect, Haven and
its Subsidiaries are not in default thereunder and all material claims
thereunder have been filed in due and timely fashion.
(x) INVESTMENT SECURITIES; BORROWINGS. (i) Except for
investments in FHLB stock and pledges to secure FHLB borrowings and reverse
repurchase agreements entered into in arms- length transactions pursuant to
customary commercial terms and conditions and entered into in the ordinary
course of business, and restrictions that exist for securities to be classified
as "held to maturity," none of the investments reflected in the consolidated
balance sheet of Haven included in Haven's Report on Form 10-K for the year
ended December 31, 1999, and none of the investment securities held by it or any
of its Subsidiaries since December 31, 1999, is subject to any restriction
(contractual or statutory) that would materially impair the ability of the
entity holding such investment freely to dispose of such investment at any time.
(ii) Neither Haven nor any Subsidiary is a party to
or has agreed to enter into an exchange-traded or over-the-counter equity,
interest rate, foreign exchange or other swap, forward, future, option, cap,
floor or collar or any other contract that is not included on the consolidated
statements of condition and is a derivative contract (including various
combinations
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thereof) (each, a "Derivatives Contract") or owns securities that (A) are
referred to generically as "structured notes," "high risk mortgage derivatives,"
"capped floating rate notes" or "capped floating rate mortgage derivatives" or
(B) are likely to have changes in value as a result of interest or exchange rate
changes that significantly exceed normal changes in value attributable to
interest or exchange rate changes, except for those Derivatives Contracts and
other instruments legally purchased or entered into in the ordinary course of
business, consistent with safe and sound banking practices and regulatory
guidance, and listed (as of March 31, 2000) in Haven's Disclosure Letter or
disclosed in Haven's Reports filed on or prior to the date hereof.
(iii) Set forth in Haven's Disclosure Letter is a
true and complete list of Haven's borrowed funds (excluding deposit accounts) as
of June 23, 2000.
(y) INDEMNIFICATION. Neither Haven nor any of its Subsidiaries
is a party to any indemnification agreement with any of its present or future
directors, officers, employees, agents or other persons who serve or have served
as a director or officer of Haven or any of its Subsidiaries or who serve or
have served in any other capacity with any other enterprise at the request of
Haven (a "Covered Person"), except as provided in Haven's employment agreements
with Covered Persons ("Employment Agreements"), the organization certificate or
bylaws of Haven or any of its Subsidiaries, or as required by any applicable law
or regulation, and, to the best knowledge of Haven, there are no claims for
which any Covered Person would be entitled to indemnification under the
organization certificate or bylaws of Haven or any of its Subsidiaries, under
any applicable law or regulation or under any indemnification agreement.
(z) BOOKS AND RECORDS. The books and records of Haven and its
Subsidiaries on a consolidated basis have been, and are being, maintained in
accordance with applicable legal and accounting requirements and reflect in all
material respects the substance of events and transactions that should be
included therein.
(aa) CORPORATE DOCUMENTS. Haven has made available to Queens
true and complete copies of its certificate of incorporation and bylaws and of
CFS Bank's organization certificate and bylaws. The minute books of Haven and
each Significant Subsidiary contain records of all meetings and other corporate
actions taken by their respective boards of directors (and each committee
thereof) and their stockholders and are complete and correct in all material
respects.
(bb) LIQUIDATION ACCOUNT. The Merger will not result in
any payment or distribution payable out of the liquidation account of CFS Bank
established in connection with CFS Bank's conversion from mutual to stock form.
(cc) TAX TREATMENT OF THE MERGER. As of the date hereof, Haven
has no knowledge of any fact or circumstance that would prevent the transactions
contemplated by this Agreement from qualifying as a reorganization under the
Code.
(dd) BENEFICIAL OWNERSHIP OF QUEENS COMMON STOCK. As of the
date hereof, Haven does not beneficially own any shares of Queens Common Stock
and does not have any option, warrant or right of any kind to acquire the
beneficial ownership of any shares of Queens Common Stock.
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(ee) REGISTRATION STATEMENT. The information regarding Haven
to be supplied by Haven for inclusion in (i) the Registration Statement (as
defined herein) on Form S-4 and/or such other form(s) as may be appropriate to
be filed under the Securities Act of 1933, as amended ("Securities Act"), with
the SEC by Queens for the purpose of, among other things, registering the Queens
Common Stock to be issued to Haven's stockholders in the Merger (as amended or
supplemented from time to time, the "Registration Statement"), or (ii) the joint
proxy statement to be filed with the SEC by Haven and Queens under the Exchange
Act and distributed in connection with Haven's and Queens' respective meeting of
stockholders to vote upon this Agreement (together with the prospectus included
in the Registration Statement, the "Joint Proxy Statement-Prospectus") will not,
at the time such Registration Statement becomes effective, contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary in order to make the statements therein, in light of
the circumstances under which they are made, not misleading.
Section 2.4. Representations and Warranties of Queens.
----------------------------------------
Subject to Sections 2.1 and 2.2, Queens represents and warrants to Haven that,
except as specifically disclosed in Queens' Disclosure Letter:
(a) ORGANIZATION. (i) Queens is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware
and is duly registered as a bank holding company under the Bank Holding Company
Act of 1956, as amended. Queens Bank is a bank duly organized, validly existing
and in good standing under the laws of the State of New York and is a
wholly-owned Subsidiary of Queens. Each Significant Subsidiary of Queens, other
than Queens Bank is a corporation, limited liability company or partnership duly
organized, validly existing and in good standing under the laws of its
jurisdiction of incorporation or organization. Each of Queens and its
Significant Subsidiaries has all requisite power and authority to own, lease and
operate its properties and to carry on its business as now being conducted.
(ii) Queens and each of its Subsidiaries has the
requisite corporate power and authority, and is duly qualified and is in good
standing, to do business in each jurisdiction in which the nature of its
business or the ownership or leasing of its properties makes such qualification
necessary.
(iii) Queens' Disclosure Letter sets forth all of
Queens' Subsidiaries and all entities (whether corporations, partnerships or
similar organizations), including the corresponding percentage ownership, in
which Queens owns, directly or indirectly, 5% or more of the ownership interests
as of the date of this Agreement and indicates for each such Subsidiary, as of
such date, its jurisdiction of organization and the jurisdiction(s) wherein it
is qualified to do business. All such Subsidiaries and ownership interests are
in compliance with all applicable laws, rules and regulations relating to direct
investments in equity ownership interests. Queens owns, either directly or
indirectly, all of the outstanding capital stock of each of its Subsidiaries. No
Subsidiary of Queens other than Queens Bank is an "insured depository
institution" as defined in the FDIA and the applicable regulations thereunder.
All of the shares of capital stock of each of the Subsidiaries held by Queens or
any of its other Subsidiaries are duly authorized and validly issued, fully paid
and nonassessable and not subject to any preemptive rights and are owned by
Queens or a Subsidiary of Queens free and clear of any claims, liens,
encumbrances or restrictions (other than those imposed
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by applicable federal and state securities laws) and there are no agreements or
understandings with respect to the voting or disposition of any such shares.
(iv) The deposits of Queens Bank are insured by
the Bank Insurance Fund or SAIF of the FDIC to the extent provided in the FDIA.
(b) CAPITAL STRUCTURE. (i) As of the date of this Agreement,
the authorized capital stock of Queens consists of 60,000,000 shares of Queens
Common Stock and 5,000,000 shares of preferred stock, par value $0.01 per share
("Queens Preferred Stock"). As of the date of this Agreement, (A) 20,764,910
shares of Queens Common Stock were issued and outstanding, (B) no shares of
Queens Preferred Stock were issued and outstanding, (C) no shares of Queens
Common Stock were reserved for issuance, except that 2,400,290 shares of Queens
Common Stock were reserved for issuance pursuant to the Queens County Bancorp,
Inc. 1993 Incentive Stock Option Plan, the Queens County Savings Bank 1993
Directors' Stock Option Plan and the Queens County Savings Bank 1997 Stock
Option Plan, (D) no shares of Queens Preferred Stock were reserved for issuance
except pursuant to the Queens Rights Agreement and (E) 10,205,783 shares of
Queens Common Stock were held by Queens in its treasury or by its Subsidiaries.
The authorized capital stock of Queens Bank consists of 30,000,000 shares of
common stock, par value $0.01 per share, and 5,000,000 shares of preferred
stock, par value $0.01 per share. As of the date of this Agreement, 1,000 shares
of such common stock were outstanding, no shares of such preferred stock were
outstanding and all outstanding shares of such common stock were, and as of the
Effective Time will be, owned by Queens. All outstanding shares of capital stock
of Queens and Queens Bank are duly authorized and validly issued, fully paid and
nonassessable and not subject to any preemptive rights and, with respect to
shares held by Queens in its treasury or by its Significant Subsidiaries, are
free and clear of all liens, claims, encumbrances or restrictions (other than
those imposed by applicable federal or state securities laws) and, as of the
date hereof, there are no agreements or understandings with respect to the
voting or disposition of any such shares.
(ii) As of the date of this Agreement, no Voting
Debt of Queens is issued or outstanding.
(iii) As of the date of this Agreement, neither
Queens nor any of its Subsidiaries has or is bound by any outstanding options,
warrants, calls, rights, convertible securities, commitments or agreements of
any character obligating Queens or any of its Subsidiaries to issue, deliver or
sell, or cause to be issued, delivered or sold, any additional shares of capital
stock of Queens or any of its Subsidiaries or obligating Queens or any of its
Subsidiaries to grant, extend or enter into any such option, warrant, call,
right, convertible security, commitment or agreement. As of the date hereof,
there are no outstanding contractual obligations of Queens or any of its
Subsidiaries to repurchase, redeem or otherwise acquire any shares of capital
stock of Queens or any of its Subsidiaries.
(c) AUTHORITY. Queens has the requisite corporate power and
authority to enter into this Agreement and, subject to approval of this
Agreement by the requisite vote of Queens' stockholders and receipt of all
required regulatory or governmental approvals, as contemplated by Section 5.1(b)
of this Agreement, to consummate the transactions contemplated hereby. The
execution and delivery of this Agreement, and, subject to the approval of this
Agreement by Queens' stockholders, the consummation of the transactions
contemplated hereby, have been duly authorized
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by all necessary corporate actions on the part of Queens. This Agreement has
been duly executed and delivered by Queens and constitutes a valid and binding
obligation of Queens, enforceable in accordance with its terms subject to
applicable bankruptcy, insolvency and similar laws affecting creditors' rights
and remedies generally and subject, as to enforceability, to general principles
of equity, whether applied in a court of law or a court of equity.
(d) STOCKHOLDER APPROVAL; FAIRNESS OPINION. The affirmative
vote of the holders of a majority of the outstanding shares of the Queens Common
Stock entitled to vote on this Agreement is the only vote of the stockholders of
Queens required for approval of this Agreement by Queens and the consummation of
the Merger and the related transactions contemplated hereby.
Queens has received the written opinion of Salomon Smith Barney Inc. to the
effect that, as of the date hereof, the Merger Consideration is fair, from a
financial point of view, to Queens.
(e) NO VIOLATIONS. The execution, delivery and performance of
this Agreement by Queens do not, and the consummation of the transactions
contemplated hereby will not, constitute (i) assuming receipt of all Requisite
Regulatory Approvals and requisite stockholder approvals, a breach or violation
of, or a default under, any law, rule or regulation or any judgment, decree,
order, governmental permit or license, or agreement, indenture or instrument of
Queens or any of its Significant Subsidiaries, or to which Queens or any of its
Significant Subsidiaries (or any of their respective properties) is subject,
(ii) a breach or violation of, or a default under, the certificate of
incorporation or bylaws of Queens or the similar organizational documents of any
of its Significant Subsidiaries or (iii) a breach or violation of, or a default
under (or an event which, with due notice or lapse of time or both, would
constitute a default under), or result in the termination of, accelerate the
performance required by, or result in the creation of any lien, pledge, security
interest, charge or other encumbrance upon any of the properties or assets of
Queens or any of its Subsidiaries, under, any of the terms, conditions or
provisions of any note, bond, indenture, deed of trust, loan agreement or other
agreement, instrument or obligation to which Queens or any of its Subsidiaries
is a party, or to which any of their respective properties or assets may be
subject; and the consummation of the transactions will not require any approval,
consent or waiver under any such law, rule, regulation, judgment, decree, order,
governmental permit or license or the approval, consent or waiver of any other
party to any such agreement, indenture or instrument, other than (w) the
approval of the holders of a majority of the outstanding shares of Queens Common
Stock referred to in Section 2.4(d), (x) the Requisite Regulatory Approvals, (y)
the declaration of effectiveness by the SEC of the Registration Statement and
the SEC's approval of Queens' and Haven's proxy materials and (z) such
approvals, consents or waivers as are required under the federal and state
securities or "blue sky" laws in connection with the transactions contemplated
by this Agreement.
(f) REPORTS. (i) As of their respective dates, none of the
reports or other statements filed by Queens, on or subsequent to December 31,
1998, with the SEC under Section 13(a), 13(c), 14 or 15(d) of the Exchange Act
(collectively, "Queens' Reports"), contained, or will contain, any untrue
statement of a material fact or omitted or will omit to state a material fact
required to be stated therein or necessary to make the statements made therein,
in light of the circumstances under which they were made, not misleading. Each
of the financial statements of Queens included in Queens' Report complied as of
their respective dates of filing with the SEC, in all material respects with
applicable accounting requirements and with the published rules and regulations
of the SEC with respect thereto and have been prepared in accordance with GAAP
applied on a consistent basis during the period involved (except as may be
indicated in the notes
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thereto or, in the case of unaudited financial statements, as permitted by Form
10-Q of the SEC). Each of the consolidated statements of condition, consolidated
statements of operations, consolidated statements of cash flows and consolidated
statements of changes in stockholders' equity contained or incorporated by
reference in Queens' Reports (including in each case any related notes and
schedules) fairly presented, or will fairly present, as the case may be, the
financial condition, results of operations, stockholders' equity and cash flows,
as the case may be, of the entity or entities to which it relates for the
periods set forth therein (subject, in the case of unaudited interim statements,
to normal year-end audit adjustments that are not material in amount or effect),
in each case in accordance with GAAP, except as may be noted therein.
(ii) Queens and each of its Subsidiaries have each
timely filed all material reports, registrations and statements, together with
any amendments required to be made with respect thereto, that they were required
to file since December 31, 1999 with (A) the Federal Reserve Board (the "FRB"),
(B) the New York Banking Department, (C) the SEC, (D) the NASD and (E) any other
SRO, and have paid all fees and assessments due and payable in connection
therewith.
(g) ABSENCE OF CERTAIN CHANGES OR EVENTS. Except as disclosed
in Queens' Reports filed on or prior to the date of this Agreement, from the
date of March 31, 2000, there has not been any Material Adverse Effect with
respect to Queens.
(h) ABSENCE OF CLAIMS. No litigation, proceeding, controversy,
claim or action before any court or Governmental Entity is pending against
Queens or any of its Subsidiaries, and, to the best of Queens' knowledge, no
such litigation, proceeding, controversy, claim or action has been threatened.
(i) ABSENCE OF REGULATORY ACTIONS. Neither Queens nor any of
its Subsidiaries is a party to any cease and desist order, written agreement or
memorandum of understanding with, or any commitment letter or similar written
undertaking to, or is subject to any action, proceeding, order or directive by,
or is a recipient of any extraordinary supervisory letter from, any Bank
Regulator, or has adopted any board resolutions at the request of any Bank
Regulator, nor has it been advised by any Bank Regulator that it is
contemplating issuing or requesting (or is considering the appropriateness of
issuing or requesting) any such action, proceeding, order, directive, written
agreement, memorandum of understanding, extraordinary supervisory letter,
commitment letter, board resolutions or similar written undertaking.
(j) TAXES. All federal, state, local and foreign tax returns
required to be filed by or on behalf of Queens or any of its Subsidiaries have
been timely filed or requests for extensions have been timely filed and any such
extension shall have been granted and not have expired, and all such filed
returns are complete and accurate in all material respects. All taxes shown on
such returns, all taxes required to be shown on returns for which extensions
have been granted and all other taxes required to be paid by Queens or any of
its Subsidiaries have been paid in full or adequate provision has been made for
any such taxes on Queens' balance sheet (in accordance with GAAP).
For purposes of this Section 2.4(j), the term "taxes" shall include all federal,
state, local or foreign taxes, charges or other assessments, including, without
limitation, income, franchise, gross receipts, real and personal property, real
property transfer and gains, wage and employment taxes.
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(k) AGREEMENTS. (i) Except for
arrangements made in the ordinary course of business, as of the date hereof
Queens and its Subsidiaries are not bound by any material contract (as defined
in Item 601(b)(10) of Regulation S-K) to be performed after the date hereof that
is required to but has not been filed with or incorporated by reference in
Queens' Report. Except as disclosed in Queens' Report filed prior to the date of
this Agreement, as of the date hereof neither Queens nor any of its Subsidiaries
is a party to an oral or written agreement containing covenants that limit the
ability of Queens or any of its Subsidiaries to compete in any line of business
or with any person, or that involve any restriction on the geographic area in
which, or method by which, Queens (including any successor thereof) or any of
its Subsidiaries may carry on its business (other than as may be required by law
or any regulatory agency).
(ii) Neither Queens nor any of its Subsidiaries
is in default under or in violation of any provision of any note, bond,
indenture, mortgage, deed of trust, loan agreement, lease or other agreement to
which it is a party or by which it is bound or to which any of its respective
properties or assets is subject.
(iii) Queens and each of its Subsidiaries owns or
possesses valid and binding licenses and other rights to use without payment all
patents, copyrights, trade secrets, trade names, service marks and trademarks
used in its businesses, and neither Queens nor any of its Subsidiaries has
received any notice of conflict with respect thereto that asserts the right of
others. Each of Queens and its Subsidiaries has performed all the obligations
required to be performed by it and are not in default under any contact,
agreement, arrangement or commitment relating to any of the foregoing.
(l) QUEENS COMMON STOCK. The shares of Queens Common Stock to
be issued pursuant to this Agreement, when issued in accordance with the terms
of this Agreement, will be duly authorized, validly issued, fully paid and
non-assessable and not subject to any preemptive rights.
(m) LABOR MATTERS. Neither Queens nor any of its Subsidiaries
is or has ever been a party to, or is or has ever been bound by, any collective
bargaining agreement, contract or other agreement or understanding with a labor
union or labor organization with respect to its employees, nor is Queens or any
of its Subsidiaries the subject of any proceeding asserting that it has
committed an unfair labor practice or seeking to compel it or any such
Subsidiary to bargain with any labor organization as to wages and conditions of
employment, nor is there any strike, other labor dispute or organizational
effort involving Queens or any of its Subsidiaries pending or, to Queens'
knowledge, threatened. Queens and its Subsidiaries are in compliance with
applicable laws regarding employment of employees and retention of independent
contractors and are in compliance with applicable employment tax laws.
(n) EMPLOYEE BENEFIT PLANS. Queens' Disclosure Letter contains
a complete and accurate list as of the date hereof of all pension, retirement,
stock option, stock purchase, stock ownership, savings, stock appreciation
right, profit sharing, deferred compensation, consulting, bonus, group
insurance, severance and other benefit plans, contracts, agreements and
arrangements, including, but not limited to, "employee benefit plans," as
defined in Section 3(3) of ERISA, incentive and welfare policies, contracts,
plans and arrangements and all trust agreements related thereto with respect to
any present or former directors, officers or other employees of Queens or any
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of its Subsidiaries (hereinafter referred to collectively as the "Queens
Employee Plans"). All of the Queens Employee Plans comply in all respects with
all applicable requirements of ERISA, the Code and other applicable laws; there
has occurred no "prohibited transaction" (as defined in Section 406 of ERISA or
Section 4975 of the Code) which is likely to result in the imposition of any
penalties or taxes under Section 502(i) of ERISA or Section 4975 of the Code
upon Queens or any of its Subsidiaries. No liability to the PBGC has been or is
expected by Queens or any of its Subsidiaries to be incurred with respect to any
Queens Employee Plan which is subject to Title IV of ERISA ("Queens Pension
Plan"), or with respect to any "single-employer plan" (as defined in Section
4001(a) of ERISA) currently or formerly maintained by Queens or any entity which
is considered one employer with Queens under Section 4001(b)(1) of ERISA or
Section 414 of the Code (an "ERISA Affiliate"). No Queens Pension Plan had an
"accumulated funding deficiency" (as defined in Section 302 of ERISA), whether
or not waived, as of the last day of the end of the most recent plan year ending
prior to the date hereof; the fair market value of the assets of each Queens
Pension Plan exceeds the present value of the "benefit liabilities" (as defined
in Section 4001(a)(16) of ERISA) under such Queens Pension Plan as of the end of
the most recent plan year with respect to the respective Queens Pension Plan
ending prior to the date hereof, calculated on the basis of the actuarial
assumptions used in the most recent actuarial valuation for such Queens Pension
Plan as of the date hereof; and no notice of a "reportable event" (as defined in
Section 4043 of ERISA) for which the 30-day reporting requirement has not been
waived has been required to be filed for any Queens Pension Plan within the
12-month period ending on the date hereof. Neither Queens nor any of its
Subsidiaries has provided, or is required to provide, security to any Queens
Pension Plan or to any single-employer plan of an ERISA Affiliate pursuant to
Section 401(a)(29) of the Code. Neither Queens, its Subsidiaries, nor any ERISA
Affiliate has contributed to any "multiemployer plan," as defined in Section
3(37) of ERISA, on or after September 26, 1980. Each Queens Employee Plan that
is an "employee pension benefit plan" (as defined in Section 3(2) of ERISA) and
which is intended to be qualified under Section 401(a) of the Code (a "Queens
Qualified Plan") has received a favorable determination letter from the IRS, and
Queens and its Subsidiaries are not aware of any circumstances likely to result
in revocation of any such favorable determination letter.
Each Queens Qualified Plan that is an "employee stock ownership plan" (as
defined in Section 4975(e)(7) of the Code) has satisfied all of the applicable
requirements of Sections 409 and 4975(e)(7) of the Code and the regulations
thereunder in all respects and any assets of any such Queens Qualified Plan that
are not allocated to participants' individual accounts are pledged as security
for, and may be applied to satisfy, any securities acquisition indebtedness.
There is no pending or, to Queens' knowledge, threatened litigation,
administrative action or proceeding relating to any Queens Employee Plan. As of
the date of this Agreement, there has been no announcement or commitment by
Queens or any of its Subsidiaries to create an additional Queens Employee Plan,
or to amend any Queens Employee Plan, except for amendments required by
applicable law which do not materially increase the cost of such Queens Employee
Plan; and, Queens and its Subsidiaries do not have any obligations for
post-retirement or post-employment benefits under any Queens Employee Plan that
cannot be amended or terminated upon 60 days' notice or less without incurring
any liability thereunder, except for coverage required by Part 6 of Title I of
ERISA or Section 4980B of the Code, or similar state laws, the cost of which is
borne by the insured individuals. With respect to Queens or any of its
Subsidiaries, for the Employee Plans listed in Queens' Disclosure Letter, the
execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby will not result in any payment or series of
payments by Queens or any of its Subsidiaries to any person which is an "excess
parachute payment" (as defined in Section 280G of the Code), increase or secure
(by way of a trust or other vehicle) any benefits payable under any Queens
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Employee Plan or accelerate the time of payment or vesting of any such benefit.
All contributions required to be made under the terms of any Queens Employee
Plan have been timely made or have been reflected on Queens' Reports. With
respect to each Queens Employee Plan, Queens has supplied to Haven a true and
correct copy of (A) the annual report on the applicable form of the Form 5500
series filed with the IRS for the most recent three plan years, if required to
be filed, (B) such Queens Employee Plan, including amendments thereto, (C) each
trust agreement, insurance contract or other funding arrangement relating to
such Queens Employee Plan, including amendments thereto, (D) the most recent
summary plan description and summary of material modifications thereto for such
Queens Employee Plan, if the Queens Employee Plan is subject to Title I of
ERISA, (E) the most recent actuarial report or valuation if such Queens Employee
Plan is a Queens Pension Plan and any subsequent changes to the actuarial
assumptions contained therein and (F) the most recent determination letter
issued by the IRS if such Queens Employee Plan is a Queens Qualified Plan.
(o) TITLE TO ASSETS. Queens and each of its
Subsidiaries has good and marketable title to its properties and assets
(including any intellectual property asset such as any trademark, service mark,
tradename or copyright) and property acquired in a judicial foreclosure
proceeding or by way of a deed in lieu of foreclosure or similar transfer, other
than property as to which it is lessee, in which case the related lease is valid
and in full force and effect. Each lease pursuant to which Queens or any of its
Subsidiaries is lessor is valid and in full force and effect and no lessee under
any such lease is in default or in violation of any provisions of any such
lease. All material tangible properties of Queens and each of its Subsidiaries
are in a good state of maintenance and repair, conform with all applicable
ordinances, regulations and zoning laws and are considered by Queens to be
adequate for the current business of Queens and its Subsidiaries.
(p) COMPLIANCE WITH LAWS. Queens and each of its Subsidiaries
has all permits, licenses, certificates of authority, orders and approvals of,
and has made all filings, applications and registrations with, all Governmental
Entities that are required in order to permit it to carry on its business as it
is presently conducted; all such permits, licenses, certificates of authority,
orders and approvals are in full force and effect, and, to the best knowledge of
Queens, no suspension or cancellation of any of them is threatened. Since the
date of its incorporation, the corporate affairs of Queens have not been
conducted in violation of any law, ordinance, regulation, order, writ, rule,
decree or approval of any Governmental Entity. The businesses of Queens and its
Subsidiaries are not being, and have not been conducted in violation of any law,
ordinance, regulation, order, writ, rule, decree or condition to approval of any
Governmental Entity or any policy or procedure.
(q) FEES. Other than the financial advisory services performed
for Queens by Salomon Smith Barney Inc., the fee for which is set forth in
Queens' Disclosure Letter, neither Queens nor any of its Subsidiaries, nor any
of their respective officers, directors, employees or agents, has employed any
broker or finder or incurred any liability for any financial advisory fees,
brokerage fees, commissions or finder's fees, and no broker or finder has acted
directly or indirectly for Queens or any of its Subsidiaries in connection with
this Agreement or the transactions contemplated hereby.
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(r) ENVIRONMENTAL MATTERS. With respect to Queens and
each of its Subsidiaries:
(i) Each of Queens and its Subsidiaries, the
Participation Facilities and, to Queens' knowledge, the Loan Properties
are, and have been, in substantial compliance with, and are not liable
under, all Environmental Laws;
(ii) There is no suit, claim, action, demand,
executive or administrative order, directive, investigation or
proceeding pending or, to Queens' knowledge, threatened, before any
court, governmental agency or board or other forum against Queens or
any of its Subsidiaries or any Participation Facility (x) for alleged
noncompliance (including by any predecessor) with, or liability under,
any Environmental Law or (y) relating to the presence of or release
into the environment of any Hazardous Material, whether or not
occurring at or on a site owned, leased or operated by it or any of its
Subsidiaries or any Participation Facility;
(iii) To Queens' knowledge, there is no suit, claim,
action, demand, executive or administrative order, directive,
investigation or proceeding pending or threatened before any court,
governmental agency or board or other forum relating to or against any
Loan Property (or Queens or any of its Subsidiaries in respect of such
Loan Property) (x) relating to alleged noncompliance (including by any
predecessor) with, or liability under, any Environmental Law or (y)
relating to the presence of or release into the environment of any
Hazardous Material, whether or not occurring at or on a site owned,
leased or operated by a Loan Property;
(iv) To Queens' knowledge, the properties currently
owned or operated by Queens or any of its Subsidiaries (including,
without limitation, soil, groundwater or surface water on, under or
adjacent to the properties, and buildings thereon) are not contaminated
with and do not otherwise contain any Hazardous Material other than as
permitted under applicable Environmental Law;
(v) Neither Queens nor any of its Subsidiaries has
received any notice, demand letter, executive or administrative order,
directive or request for information from any federal, state, local or
foreign governmental entity or any third party indicating that it may
be in violation of, or liable under, any Environmental Law;
(vi) To Queens' knowledge, (A) there are no
underground storage tanks on, in or under any properties owned or
operated by Queens or any of its Subsidiaries, any Participation
Facility or any Loan Property, and (B) no underground storage tanks
have been closed or removed from any properties owned or operated by
Queens or any of its Subsidiaries, any Participation Facility or any
Loan Property; and
(vii) To Queens' knowledge, during the period of (l)
Queens' or any of its Subsidiaries' ownership or operation of any of
their respective current properties, (m) Queens' or any of its
Subsidiaries' participation in the management of any Participation
Facility or (n) Queens' or any of its Subsidiaries' holding of a
security interest in a Loan Property, there has been no contamination
by or release of Hazardous Materials in, on, under or affecting such
properties. To Queens' knowledge, prior to the period of (x) Queens' or
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any of its Subsidiaries' ownership or operation of any of their
respective current properties, (y) Queens' or any of its Subsidiaries'
participation in the management of any Participation Facility or (z)
Queens' or any of its Subsidiaries' holding of a security interest in a
Loan Property, there was no contamination by or release of Hazardous
Material in, on, under or affecting such properties.
(s) DEPOSITS. As of the date hereof, None of the deposits of
Queens or any of its Subsidiaries is a "brokered" deposit.
(t) INSURANCE. Queens and its Subsidiaries are presently
insured, and since December 31, 1998, have been insured, for reasonable amounts
with financially sound and reputable insurance companies, against such risks as
companies engaged in a similar business would, in accordance with good business
practice, customarily be insured. All of the insurance policies and bonds
maintained by Queens and its Subsidiaries are in full force and effect, Queens
and its Subsidiaries are not in default thereunder and all material claims
thereunder have been filed in due and timely fashion.
(u) BORROWINGS. Set forth in Queens' Disclosure Letter is a
true and complete list of Queens' borrowed funds (excluding deposit accounts) as
of the date hereof.
(v) BOOKS AND RECORDS. The books and records of Queens and its
Subsidiaries on a consolidated basis have been, and are being, maintained in
accordance with applicable legal and accounting requirements and reflect in all
material respects the substance of events and transactions that should be
included therein.
(w) CORPORATE DOCUMENTS. Queens has made available to Haven
true and complete copies of its certificate of incorporation and bylaws and of
Queens Bank's organization certificate and bylaws. The minute books of Queens
and each Significant Subsidiary contain records of all meetings and other
corporate actions taken by their respective boards of directors (and each
committee thereof) and their stockholders and are complete and correct in all
material respects.
(x) TAX TREATMENT OF THE MERGER. As the date hereof, Queens
has no knowledge of any fact or circumstance that would prevent the transactions
contemplated by this Agreement from qualifying as a reorganization under the
Code.
(y) BENEFICIAL OWNERSHIP OF HAVEN COMMON STOCK. As the date
hereof, Queens does not beneficially own any shares of Haven Common Stock and,
other than as contemplated by Option Agreement, does not have any option,
warrant or right of any kind to acquire the beneficial ownership of any shares
of Haven Common Stock.
(z) REGISTRATION STATEMENT. The information to be supplied by
Queens for inclusion in (i) the Registration Statement or (ii) the Joint Proxy
Statement-Prospectus will not, at the time such Registration Statement becomes
effective, contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they are made, not
misleading.
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ARTICLE III
CONDUCT PENDING THE MERGER
Section 3.1. CONDUCT OF HAVEN'S BUSINESS PRIOR TO THE
EFFECTIVE TIME. Except as expressly provided in this Agreement, during the
period from the date of this Agreement to the Effective Time, Haven shall, and
shall cause its Subsidiaries to, use commercially reasonable efforts to (i)
conduct its business in the ordinary course consistent with past practice; (ii)
maintain and preserve intact its business organization, properties, leases,
employees and advantageous business relationships and retain the services of its
officers and key employees, (iii) not knowingly take any action which would
adversely affect or delay the ability of Haven, CFS Bank, Queens or Queens Bank
to perform their respective covenants and agreements on a timely basis under
this Agreement, (iv) not knowingly take any action which would adversely affect
or delay the ability of Haven, CFS Bank, Queens or Queens Bank to obtain any
necessary approvals, consents or waivers of any governmental authority required
for the transactions contemplated hereby or which would reasonably be expected
to result in any such approvals, consents or waivers containing any material
condition or restriction, and (v) not knowingly take any action that results in
or is reasonably likely to have a Material Adverse Effect on Haven or CFS Bank.
Section 3.2. FORBEARANCE BY HAVEN. Without limiting the
covenants set forth in Section 3.1 hereof, except as otherwise provided in this
Agreement and except to the extent required by law or regulation or any Bank
Regulator, during the period from the date of this Agreement to the Effective
Time, Haven shall not, and shall not permit any of its Subsidiaries to, without
the prior written consent of Queens, which consent shall not be unreasonably
withheld or delayed:
(a) change any provisions of the certificate of
incorporation or bylaws of Haven or the similar governing documents of any of
its Subsidiaries;
(b) issue any shares of capital stock or change the terms of
any outstanding stock options or warrants, issue, grant or sell any option,
warrant, call, commitment, stock appreciation right, right to purchase or
agreement of any character relating to the authorized or issued capital stock of
Haven except pursuant to (i) the exercise of stock options granted pursuant to
the Haven Option Plans in existence prior to the date hereof, (ii) the exercise
of stock options or warrants as set forth in Haven's Disclosure Letter or
consistent with Section 1.4 of this Agreement, (iii) the Option Agreement or
(iv) the terms of the Haven Rights Agreement; adjust, split, combine or
reclassify any capital stock; make, declare or pay any dividend (except for (A)
Haven's regular quarterly dividend of $0.075, and (B) dividends by wholly-owned
Subsidiaries) or make any other distribution on, or directly or indirectly
redeem, purchase or otherwise acquire, any shares of its capital stock or any
securities or obligations convertible into or exchangeable for any shares of its
capital stock. As promptly as practicable following the date of this Agreement,
the Board of Directors of Haven shall cause its regular quarterly dividend
record dates and payment dates to be the same as Queens' regular quarterly
dividend record dates and payments dates for Queens Common Stock (i.e., Haven's
quarterly dividend expected to have a record date in September or October, 2000
shall be postponed to conform to the Queens dividend that is expected to have a
record date in November, 2000), and Haven shall not thereafter change its
regular dividend payment dates and record dates.
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(c) other than in the ordinary course of business consistent
with past practice and pursuant to policies currently in effect (i) sell,
transfer, mortgage, encumber or otherwise dispose of any of its material
properties, leases or assets to any individual, corporation or other entity
other than a direct or indirect wholly-owned Subsidiary of Haven or (ii) cancel,
release or assign any indebtedness in individual amounts of greater than
$100,000 of any individual, corporation or other entity, except pursuant to
contracts or agreements in force at the date of this Agreement and which have
been disclosed to Queens;
(d) except to the extent required by law or as disclosed in
Section 3.2(d) of Haven's Disclosure Letter or specifically provided for
elsewhere herein, increase the compensation or fringe benefits of any of its
employees or directors other than general increases in compensation to employees
having a title of Vice President and below made in the ordinary course of
business consistent with past practice, which increases do not exceed in any
individual case 15% of the annual rate of base salary in effect on the date of
this Agreement for such individual and 6% in the aggregate of the annual rate of
base year salary in effect on the date of this Agreement for such group, or pay
any pension or retirement allowance not required by any existing plan or
agreement to any such employees or directors, or become a party to, amend or
commit itself to fund or otherwise establish any trust or account related to any
Haven Employee Plan (as defined herein) with or for the benefit of any employee
or director; or voluntarily accelerate the vesting of any stock options or other
compensation or benefit;
(e) except as contemplated by Section 4.2, change its method
of accounting as in effect at December 31, 1999, except as required by changes
in GAAP as concurred in by Haven's independent auditors;
(f) except as set forth in Haven's Disclosure Letter, settle
any claim, action or proceeding involving any liability of Haven or any of its
Subsidiaries for money damages in excess of $100,000 or impose material
restrictions upon the operations of Haven or any of its Subsidiaries;
(g) acquire or agree to acquire, by merging or consolidating
with, or by purchasing a substantial equity interest in or a substantial portion
of the assets of, or by any other manner, any business or any corporation,
partnership, association or other business organization or division thereof or
otherwise acquire or agree to acquire any assets, in each case which are
material, individually or in the aggregate, to Haven, except in satisfaction of
debts previously contracted;
(h) except pursuant to commitments existing at the date hereof
which have previously been disclosed to Queens, make any real estate loans
secured by undeveloped land or real estate located outside the States of New
York, New Jersey and Connecticut (other than real estate secured by one-to-four
family homes) or make any construction loan (other than construction loans
secured by one-to-four family homes) outside the States of New York, New Jersey
and Connecticut;
(i) establish or commit to the establishment of any new
branch or other office facilities other than as set forth in Haven's Disclosure
Letter;
(j) take any action that would prevent or impede the Merger
from qualifying as a reorganization within the meaning of Section 368(a) of the
Code;
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(k) make any investment in any debt security, including
mortgage-backed and mortgage related securities, other than U.S. government and
U.S. government agency securities with final maturities not greater than two
years or reinvestments of interest on, and prepayments and payments at maturity
of the principal of mortgage-backed or mortgage related securities in
mortgage-backed or mortgage related securities that are purchased in the
ordinary course of business consistent with past practice;
(l) other than by and among CFS Bank and any of its
Subsidiaries, make any investment either by purchase of stock or securities,
contributions to capital, property transfers, or purchase of any property or
assets of any other individual, corporation or other entity other than (i) in
the ordinary course of business consistent with past practice in individual
amounts not to exceed $50,000, (ii) investments for Haven's portfolio made in
accordance with Section 3.2(k), (iii) the purchase of FHLB stock necessary to
maintain Haven's membership status with the FHLB of New York and (iv) pursuant
to contractual commitments existing as of the date hereof as set forth in
Section 3.2(l) of Haven's Disclosure Letter;
(m) enter into any contract or agreement that is not
terminable within 30 days, or make any change in, or terminate, any of its
leases or contracts, other than with respect to those involving aggregate
payments of less than, or the provision of goods or services with a market value
of less than $100,000 per annum and other than contracts or agreements permitted
by other clauses of this Section 3.2;
(n) make, renegotiate, renew, increase, extend or purchase any
(i) loan, lease (credit equivalent), advance, credit enhancement or other
extension of credit, or make any commitment in respect of any of the foregoing,
except (a) in conformity with existing lending practices in amounts not to
exceed $500,000 to any individual borrower (except for commercial real estate
loans which shall be limited to $3.5 million to any individual borrower and
except for small business and commercial loans which shall be limited to
$300,000 to any individual borrower) or (b) loans or advances as to which Haven
or any Subsidiary has a legally binding obligation to make such loan or advances
as of the date hereof; PROVIDED, however, that Haven and its Subsidiaries may
not make, renegotiate, renew, increase, extend or purchase any loan that is
underwritten based on no verification of income or loans commonly known or
referred to as "no documentation loans;" or (ii) loans, advances or commitments
to directors, officers or other affiliated parties of Haven or any of its
Subsidiaries;
(o) incur any additional borrowings beyond those set forth on
Haven's Disclosure Letter other than short-term (two years or less) FHLB
borrowings and reverse repurchase agreements consistent with past practice, or
pledge any of its assets to secure any borrowings other than as required
pursuant to the terms of borrowings of Haven or any Subsidiary in effect at the
date hereof or in connection with borrowings or reverse repurchase agreements
permitted hereunder. Deposits shall not be deemed to be borrowings within the
meaning of this paragraph;
(p) make any capital expenditures in excess of $50,000 per
expenditure other than (i) pursuant to binding commitments existing on the date
hereof, (ii) expenditures necessary to replace or maintain existing assets in
good repair and (iii) expenditures necessary to establish any new branches set
forth in Section 3.2(i) of Haven's Disclosure Letter;
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(q) make any investment or commitment to invest in real estate
or in any real estate development project, other than real estate acquired in
satisfaction of defaulted mortgage loans and investments or commitments approved
by the Board of Directors of Haven or CFS Bank prior to the date of this
Agreement and disclosed in writing to Queens in Section 3.2(q) of Haven's
Disclosure Letter;
(r) elect to the Board of Directors of Haven any person
who is not a member of the Board of Directors of Haven as of the date of this
Agreement;
(s) make any tax election other than in the ordinary
course of business consistent with past practice; or
(t) agree or commit to take any action that is prohibited by
this Section 3.2.
In the event that Queens does not respond in writing to Haven
within four business days of receipt by Queens of a written request for Haven to
engage in any of the actions for which Queens' prior written consent is required
pursuant to this Section 3.2, Queens shall be deemed to have consented to such
action. Any request by Haven or response thereto by Queens shall be made in
accordance with the notice provisions of Section 8.7, shall note that it is a
request pursuant to this Section 3.2 and shall state that a failure to respond
within four business days shall constitute consent.
Section 3.3. CONDUCT OF QUEENS' BUSINESS PRIOR TO THE
EFFECTIVE TIME. Except as otherwise provided in this Agreement and except to the
extent required by law or regulation or any Bank Regulator, during the period
from the date of this Agreement to the Effective Time, Queens shall not, and
shall not permit Queens Bank to, materially change the nature of its or Queens
Bank's business plan or eliminate any material business line in existence on the
date hereof without first consulting with the Chairman of the Board and Chief
Executive Officer or the President of Haven.
Section 3.4. FORBEARANCE BY QUEENS. Except as otherwise
provided in this Agreement and except to the extent required by law or
regulation or any Bank Regulator, during the period from the date of this
Agreement to the Effective Time, Queens shall not, and shall not permit any of
its Subsidiaries to, without the prior written consent of Haven, which consent
shall not be unreasonably withheld or delayed:
(a) change any provisions of the certificate of incorporation
or bylaws of Queens, other than to increase the authorized capital stock of
Queens or issue shares of preferred stock thereunder;
(b) make, declare or pay any dividend (except for Queens'
regular quarterly dividend, which shall not be increased by more than $0.05 from
the prior quarter's dividend, and dividends of Queens's wholly-owned
subsidiaries) or make any other distribution on its capital stock or any
securities or obligations convertible into or exchangeable for any shares of its
capital stock;
(c) knowingly take any action which (1) would materially
adversely affect its ability to consummate the Merger; (2) is reasonably likely
to prevent or impede the Merger from qualifying as a reorganization within the
meaning of Section 368 of the Code; or (3) is intended or is reasonably likely
to result in (i) any of its representations and warranties set forth in this
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Agreement being or becoming untrue in any material respect at any time at or
prior to the Effective Time, (ii) any of the conditions to the Merger set forth
in Article V not being satisfied or (iii) a material violation of any provision
of this Agreement;
(d) change its method of accounting as in effect at
December 31, 1999, except as permitted by GAAP as concurred in by Queens'
independent auditors;
(e) elect to the Board of Directors of Queens any person who
is not a member of the Board of Directors of Queens as of the date of this
Agreement other than to fill a vacancy that arises due to the death, disability,
resignation or retirement of a director and if, within two years after the
Effective Time, a New Queens Director, New Queens Bank Director or Continuing
CFS Bank Director ceases to be a director of Queens, Queens Bank or CFS Bank,
respectively, thereby creating a vacancy on the Queens Board of Directors,
Queens Bank Board of Directors or the CFS Bank Board of Directors (so long as it
shall exist), such Board of Directors shall elect a new member, selected by
Queens, in its discretion. Queens shall give first consideration to persons who
were members of the Haven Board as of the date hereof to fill such vacancy;
(f) enter into an agreement with respect to an Acquisition
Transaction (as defined herein) with a third party which is conditioned on
Queens not completing the Merger; PROVIDED, that the foregoing shall not prevent
Queens or any of its Subsidiaries from acquiring any other assets or businesses
or from discontinuing or disposing of any of its assets or business if such
action is, in the reasonable judgment of Queens desirable in the conduct of the
business of Queens and its Subsidiaries and would not, in the reasonable
judgment of Queens, likely delay the Effective Time to a date subsequent to the
date set forth in Section 7.1 of this Agreement. For purposes of this Agreement,
"Acquisition Transaction" shall mean (x) a merger or consolidation, or any
similar transaction, involving Queens, (y) a purchase, lease or other
acquisition of all or substantially all of the assets of Queens or (z) a
purchase or other acquisition (including by way of merger, consolidation, share
exchange or otherwise) of securities representing 15% or more of the voting
power of Queens; PROVIDED, that the term "Acquisition Transaction" does not
include any internal merger or consolidation involving only Queens and its
Subsidiaries; or
(g) agree or commit to take any action that is prohibited by
this Section 3.4.
ARTICLE IV
COVENANTS
Section 4.1. ACQUISITION PROPOSALS. Haven agrees that neither
it nor any of its Subsidiaries, nor any of the respective officers and directors
of Haven or any of its Subsidiaries, shall, and Haven shall direct and use its
best efforts to cause its employees, agents and representatives (including,
without limitation, any investment banker, attorney or accountant retained by it
or any of its Subsidiaries) not to, initiate, solicit or encourage, directly or
indirectly, any inquiries or the making of any proposal or offer (including,
without limitation, any proposal or offer to Haven's stockholders) with respect
to a merger, consolidation or similar transaction involving, or any purchase of
all or any significant portion of the assets or any equity securities of, Haven
or any of its material Subsidiaries (any such proposal or offer being
hereinafter referred to as an
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"Acquisition Proposal") or (b) engage in any negotiations concerning, or provide
any confidential information or data to, or have any discussions with, any
person relating to an Acquisition Proposal, or otherwise facilitate any effort
or attempt to make or implement an Acquisition Proposal; PROVIDED, HOWEVER, that
nothing contained in this Agreement shall prevent Haven or its Board of
Directors from (i) complying with Rule 14e-2 promulgated under the Exchange Act
with regard to an Acquisition Proposal or (ii) (A) providing information in
response to a request therefor by a person who has made an unsolicited BONA FIDE
written Acquisition Proposal (an "Unsolicited Acquisition Proposal") if the
Board of Directors receives from the person so requesting such information
executed confidentiality agreement on terms substantially equivalent to those
contained in such confidentiality agreements between Queens and Haven, dated as
of April 12, 2000 (the "Confidentiality Agreement"); or (B) engaging in any
negotiations or discussions with any person who has made an Unsolicited
Acquisition Proposal, if and only to the extent that, in each such case referred
to in clause (A) or (B) above, (x) the Board of Directors of Haven, after
consultation with outside legal counsel, in good faith deems such action to be
legally necessary for the proper discharge of its fiduciary duties under
applicable law and (y) the Board of Directors of Haven, after consultation with
its financial advisor, determines in good faith that such Acquisition Proposal,
if accepted, is reasonably likely to be consummated, taking into account all
legal, financial and regulatory aspects of the proposal and the person making
the proposal and would, if consummated, result in a more favorable transaction
than the transaction contemplated by this Agreement, taking into account the
long-term prospects and interests of Haven and its stockholders. Haven will
notify Queens immediately orally (within one business day) and in writing
(within three business days) if any such Acquisition Proposals are received by,
any such information is requested from or any such negotiations or discussions
are sought to be initiated or continued with Haven after the date hereof, the
identity of the person making such inquiry, proposal or offer and the substance
thereof and will keep Queens informed of any developments with respect thereto
immediately upon the occurrence thereof. Subject to the foregoing, Haven will
immediately cease and cause to be terminated any existing activities,
discussions or negotiations with any parties conducted heretofore with respect
to any of the foregoing. Haven will take the necessary steps to inform the
appropriate individuals or entities referred to in the first sentence hereof of
the obligations undertaken in this Section 4.1. Haven will promptly request each
person (other than Queens) that has executed a confidentiality agreement prior
to the date hereof in connection with its consideration of a business
combination with Haven or any of its Subsidiaries to return or destroy all
confidential information previously furnished to such person by or on behalf of
Haven or any of its Subsidiaries.
Section 4.2. Certain Policies of Haven.
-------------------------
(a) At the request of Queens, Haven shall cause CFS Bank to
modify and change its loan, litigation and real estate valuation policies and
practices (including loan classifications and levels of reserves) and investment
and asset/liability management policies and practices after the date on which
all Requisite Regulatory Approvals and stockholder approvals are received, and
after receipt of written confirmation from Queens that it is not aware of any
fact or circumstance that would prevent completion of the Merger, and prior to
the Effective Time so as to be consistent on a mutually satisfactory basis with
those of Queens Bank; PROVIDED, HOWEVER, that Haven shall not be required to
take such action more than 30 days prior to the Effective Date; and PROVIDED,
FURTHER, that such policies and procedures are not prohibited by GAAP or any
applicable laws or regulations.
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(b) Haven's representations, warranties and covenants
contained in this Agreement shall not be deemed to be untrue or breached in any
respect for any purpose as a consequence of any modifications or changes
undertaken solely on account of this Section 4.2. Queens agrees to hold
harmless, indemnify and defend Haven and its Subsidiaries, and their respective
directors, officers and employees, for any loss, claim, liability or other
damage caused by or resulting from compliance with this Section 4.2.
Section 4.3. Access and Information.
----------------------
(a) Upon reasonable notice, Haven and Queens shall (and shall
cause their respective Subsidiaries to) afford to the other and their respective
representatives (including, without limitation, directors, officers and
employees of such party and its affiliates and counsel, accountants and other
professionals retained by such party) such reasonable access during normal
business hours throughout the period prior to the Effective Time to the books,
records (including, without limitation, tax returns and work papers of
independent auditors), properties, personnel and to such other information as
either party may reasonably request; PROVIDED, HOWEVER, that no investigation
pursuant to this Section 4.3 shall affect or be deemed to modify any
representation or warranty made herein.
In furtherance, and not in limitation of the foregoing, Haven shall make
available to Queens all information necessary or appropriate for the preparation
and filing of all real property and real estate transfer tax returns and reports
required by reason of the Merger. Queens and Haven shall not, and shall cause
their respective representatives not to, use any information obtained pursuant
to this Section 4.3 for any purpose unrelated to the consummation of the
transactions contemplated by this Agreement. Subject to the requirements of
applicable law, each of Queens and Haven will keep confidential, and will cause
their respective representatives to keep confidential, all information and
documents obtained pursuant to this Section 4.3 or otherwise obtained in
connection with the transactions contemplated by this Agreement unless such
information (i) was already known to such party or an affiliate of such party,
other than pursuant to a confidentiality agreement or other confidential
relationship, (ii) becomes available to such party or an affiliate of such party
from other sources not known by such party to be bound by a confidentiality
agreement or other obligation of secrecy, (iii) is disclosed with the prior
written approval of the other party or (iv) is or becomes readily ascertainable
from published information or trade sources. In the event that this Agreement is
terminated or the transactions contemplated by this Agreement shall otherwise
fail to be consummated, each party shall promptly cause all copies of documents
or extracts thereof containing information and data as to another party hereto
(or an affiliate of any party hereto) to be returned to the party that furnished
the same or destroyed; PROVIDED, HOWEVER, that an officer's certificate
attesting as to such destruction has been provided to the other party.
(b) During the period of time beginning on the day application
materials are deemed complete by the OTS, the FDIC and the FRB, to the extent an
application was required to be filed with such regulator, and continuing to the
Effective Time, including weekends and holidays, Haven shall cause CFS Bank to
provide Queens, Queens Bank and their authorized agents and representatives full
access to CFS Bank's offices after normal business hours for the purpose of
installing necessary wiring and equipment to be utilized by Queens Bank after
the Effective Time; PROVIDED, that:
(i) reasonable advance notice of each entry shall be
given to CFS Bank and CFS Bank approves of each entry, which approval
shall not be unreasonably
withheld;
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<PAGE>
(ii) CFS Bank shall have the right to have its
employees or contractors present to inspect the work being done;
(iii) to the extent practicable, such work shall be
done in a manner that will not interfere with CFS Bank's business
conducted at any affected branch offices;
(iv) all such work shall be done in compliance with
all applicable laws and government regulations, and Queens shall be
responsible for the procurement, at Queens' expense, of all required
governmental or administrative permits and approvals;
(v) Queens shall maintain appropriate insurance
satisfactory to CFS Bank in connection with any work done by Queens'
agents and representatives pursuant to this Section 4.3;
(vi) Queens shall reimburse CFS Bank for any
out-of-pocket costs or expenses incurred by CFS Bank in connection
with this undertaking; and
(vii) in the event this Agreement is terminated in
accordance with Article VI hereof, Queens, within a reasonable time
period and at its sole cost and expense, will restore such offices to
their condition prior to the commencement of any such installation.
Section 4.4. Certain Filings, Consents and Arrangements.
Queens and Haven shall (a) as soon as practicable (and in any event within 45
days after the date hereof) make, or cause to be made, any filings and
applications and provide any notices required to be filed or provided in order
to obtain all approvals, consents and waivers of Governmental Entities and third
parties necessary or appropriate for the consummation of the transactions
contemplated hereby or by Option Agreement; and (b) cooperate with one another
in promptly (i) determining what filings and notices are required to be made or
approvals, consents or waivers are required to be obtained under any relevant
federal or state law or regulation or under any relevant agreement or other
document and (ii) making any such filings and notices, furnishing information
required in connection therewith and seeking timely to obtain any such
approvals, consents or waivers. Each party shall provide the other party with
(i) a copy of all applications, notices and filings referred to in this Section
4.4 together with all attachments (other than biographical and financial
disclosure forms), no less than five days before filing such application, notice
or filing with the applicable Governmental Entity and (ii) a copy of all
applications, notices and filings referred to in this Section 4.4 filed with any
Governmental Entity. Each party shall notify the other of the receipt of any
comments of any Governmental Entity with respect to any application, notice or
filing in connection with this Agreement and shall provide the other party with
copies of all correspondence between that party or any representative of that
party and the Governmental Entity and copies of any amendments or supplements to
any application, notice or filing.
Section 4.5. Antitakeover Provisions.
-----------------------
(a) Haven and its Subsidiaries shall take all steps required
by any relevant federal or state law or regulation or under any relevant
agreement or other document (i) to exempt or continue to exempt Queens, the
Covered Agreements and any transactions contemplated thereby,
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as well as additional purchases by Queens of up to 4.9% of then outstanding
shares of Haven Common Stock, from any provisions of an antitakeover nature in
Haven's or its Subsidiaries' certificates of incorporation or charters, as the
case may be, and bylaws and the provisions of Section 203 of the DGCL and (ii)
upon the request of Queens, to assist in any challenge to the applicability to
the foregoing of Section 203 of the DGCL.
(b) Except for amendments approved in writing by Queens, Haven
will not, following the date hereof, amend or waive any of the provisions of, or
take any action to exempt any other persons from the provisions of, Haven Rights
Agreement in any manner that adversely affects Queens or Queens Bank with
respect to the consummation of the Merger or, except as provided in the next
sentence, redeem the rights thereunder; PROVIDED, HOWEVER, that nothing herein
shall prevent Haven from amending or otherwise taking any action under the Haven
Rights Agreement to delay the Distribution Date (as defined in the Haven Rights
Agreement). If requested by Queens, but not otherwise, Haven will redeem all
outstanding Haven Preferred Share Purchase Rights at a redemption price of not
more than $.01 per Haven Preferred Share Purchase Right effective immediately
prior to the Effective Time.
Section 4.6. ADDITIONAL AGREEMENTS. Subject to the terms and
conditions herein provided, each of the parties hereto agrees to use all
reasonable efforts to take promptly, or cause to be taken promptly, all actions
and to do promptly, or cause to be done promptly, all things necessary, proper
or advisable under applicable laws and regulations to consummate and make
effective the transactions contemplated by this Agreement, as expeditiously as
possible, including using commercially reasonable efforts to obtain all
necessary actions or non-actions, extensions, waivers, consents and approvals
from all applicable Governmental Entities, effecting all necessary
registrations, applications and filings (including, without limitation, filings
under any applicable state securities laws) and obtaining any required
contractual consents and regulatory approvals.
Section 4.7. PUBLICITY. The initial press release announcing
this Agreement shall be a joint press release and thereafter Haven and Queens
shall consult with each other in issuing any press releases or otherwise making
public statements with respect to the Merger and any other transaction
contemplated hereby and in making any filings with any Governmental Entity or
with the Nasdaq Stock Market or any national securities exchange with respect
thereto.
Section 4.8. STOCKHOLDERS MEETINGS. Haven and Queens each
shall take all action necessary, in accordance with applicable law and its
respective corporate documents, to convene a meeting of its respective
stockholders (each, a "Stockholder Meeting") as promptly as practicable for the
purpose of considering and voting on approval and adoption of the transactions
provided for in this Agreement. Except to the extent the Board of Directors of
each of Haven or Queens, as the case may be, after consultation with outside
legal counsel, in good faith deems such action or inaction to be legally
necessary for the proper discharge of its fiduciary duties under applicable law
the Board of Directors of each of Haven and Queens shall (a) recommend at its
Stockholder Meeting that the stockholders vote in favor of and approve the
transactions provided for in this Agreement and (b) use its commercially
reasonable efforts to solicit such approvals. Haven and Queens, in consultation
with the other, shall each employ professional proxy solicitors to assist in
contacting stockholders in connection with soliciting favorable votes on the
Merger. Haven and Queens shall coordinate and cooperate with respect to the
timing of their respective Stockholder Meetings.
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Section 4.9. JOINT PROXY STATEMENT-PROSPECTUS; COMFORT
LETTERS. (i) Queens and Haven shall cooperate with respect to the preparation of
a Registration Statement for the shares of Queens Common Stock to be issued in
the Merger and a Joint Proxy Statement-Prospectus for the purpose of taking
stockholder action on the Merger and this Agreement and file the Joint Proxy
Statement-Prospectus with the SEC as soon as practicable after the date hereof,
respond to comments of the staff of the SEC and, promptly after the Registration
Statement is declared effective by the SEC, mail the Joint Proxy
Statement-Prospectus to the respective holders of record (as of the applicable
record date) of shares of voting stock of each of Haven and Queens. Queens and
Haven each represents and covenants to the other that the Joint Proxy
Statement-Prospectus, and any amendment or supplement thereto, with respect to
the information pertaining to it or its Subsidiaries at the date of mailing to
its stockholders and the date of its Stockholder Meeting will be in compliance
with the Exchange Act and all relevant rules and regulations of the SEC and will
not contain any untrue statement of a material fact or omit to state any
material fact required to be stated or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading.
(ii) Queens shall cause KPMG, LLP, its
independent public accounting firm, to deliver to Haven, and Haven shall cause
KPMG, LLP, its independent public accounting firm, to deliver to Queens and to
its officers and directors who sign the Registration Statement for this
transaction, a "comfort letter" or "agreed upon procedures" letter, in the form
customarily issued by such accountants at such time in transactions of this
type, dated (a) the date of the mailing of the Joint Proxy Statement-Prospectus
for the Stockholders Meeting of Haven and the date of mailing of the Joint Proxy
Statement for the Stockholders meeting of Queens, respectively, and (b) a date
not earlier than five business days preceding the date of the Closing (as
defined herein).
Section 4.10. Registration of Queens Common Stock.
-----------------------------------
(a) Queens shall, as promptly as practicable following the
preparation thereof, file the Registration Statement (including any
pre-effective or post-effective amendments or supplements thereto) with the SEC
under the Securities Act in connection with the transactions contemplated by
this Agreement, and Queens and Haven shall use all reasonable efforts to have
the Registration Statement declared effective under the Securities Act as
promptly as practicable after such filing. Queens will advise Haven promptly
after Queens receives notice of the time when the Registration Statement has
become effective or any supplement or amendment has been filed, of the issuance
of any stop order or the suspension of the qualification of the shares of
capital stock issuable pursuant to the Registration Statement, or the initiation
or threat of any proceeding for any such purpose, or of any request by the SEC
for the amendment or supplement of the Registration Statement or for additional
information. Queens will provide Haven with as many copies of such Registration
Statement and all amendments thereto promptly upon the filing thereof as Haven
may reasonably request.
(b) Queens shall use its commercially reasonable efforts to
obtain, prior to the effective date of the Registration Statement, all necessary
state securities laws or "blue sky" permits and approvals required to carry out
the transactions contemplated by this Agreement.
(c) Queens shall use its commercially reasonable efforts to
list, prior to the Effective Time, on the National Market System of The Nasdaq
Stock Market, Inc. ("Nasdaq Stock
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<PAGE>
Market"), or on such other exchange as Queens Common Stock shall then be
trading, subject only to official notice of issuance, the shares of Queens
Common Stock to be issued by Queens in exchange for the shares of Haven Common
Stock.
Section 4.11. AFFILIATE LETTERS. Promptly, but in any event
within two weeks after the execution and delivery of this Agreement, Haven shall
deliver to Queens a letter identifying all persons who, to the knowledge of
Haven, may be deemed to be "affiliates" of Haven under Rule 145 of the
Securities Act including, without limitation, all directors and executive
officers of Haven. Within two weeks after delivery of such letter, Haven shall
deliver executed letter agreements, each substantially in the form attached
hereto as Exhibit A, executed by each such person so identified as an affiliate
of Haven agreeing (i) to comply with Rule 145, and (ii) to be present in person
or by proxy and vote in favor of the Merger at Haven Stockholders Meeting.
Section 4.12. NOTIFICATION OF CERTAIN MATTERS. Each party
shall give prompt notice to the other of: (a) any event or notice of, or other
communication relating to, a default or event that, with notice or lapse of time
or both, would become a default, received by it or any of its Subsidiaries
subsequent to the date of this Agreement and prior to the Effective Time, under
any contract material to the financial condition, properties, businesses or
results of operations of such party and its Subsidiaries taken as a whole to
which such party or any Subsidiary is a party or is subject; and (b) any event,
condition, change or occurrence which individually or in the aggregate has, or
which, so far as reasonably can be foreseen at the time of its occurrence, is
reasonably likely to result in a Material Adverse Effect. Each of Haven and
Queens shall give prompt notice to the other party of any notice or other
communication from any third party alleging that the consent of such third party
is or may be required in connection with any of the transactions contemplated by
this Agreement.
Section 4.13. Directors and Officers.
----------------------
(a) Queens agrees to cause three persons who are members of
the Haven Board of Directors on the date hereof, selected by Queens in its
discretion, who are willing so to serve ("New Queens Directors"), to be elected
or appointed as directors of Queens and two persons who are currently members of
the Haven Board of Directors, selected by Queens in its discretion, who are
willing to so serve (" New Queens Bank Directors") to be elected or appointed to
the Board of Directors of Queens Bank at, or as promptly as practicable after,
the Effective Time (such appointment or election of New Queens Directors and New
Queens Bank Directors, respectively, to be as evenly distributed as possible
among the classes of Queens and Queens Bank directors, respectively). The
existing members of the CFS Bank Board of Directors shall resign as of the
Effective Time, and the Board of Directors of CFS Bank, following the Effective
Time, shall include three members of the Haven Board of Directors as of the date
hereof, as selected by Queens in its discretion, and eight members from among
the existing Directors of Queens and Queens Bank, or otherwise as determined by
Queens ("Continuing CFS Bank Directors"). Queens may, in its discretion, select
the same person for more than one Board position. Queens agrees not to increase
the size of the Queens Board of Directors beyond 11 members for a period of two
years following the Effective Time; provided, however, that Queens may increase
the size of the Queens Board of Directors during such two year period in order
to appoint one or more persons to such board who, immediately prior to such
time, were directors of a financial organization then being acquired by Queens.
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(b) Queens shall honor (i) the Employment Agreements and the
Change in Control Agreements between Haven and, respectively, those persons
listed in Section 4.13 of Haven's Disclosure Letter, each as amended and
restated as of the date set forth for such person therein and (ii) the
Employment Agreements and the Change in Control Agreements between CFS Bank and,
respectively, those persons listed in Section 4.13 of Haven's Disclosure Letter,
each as amended and restated as of the date set forth for such person therein.
Section 4.14. Indemnification; Directors' and Officers'
------------------------------------------
Insurance.
---------
(a) From and after the Effective Time through the sixth
anniversary of the Effective Date, Queens agrees to indemnify and hold harmless
each director and officer of Haven or any of its Subsidiaries as of the date of
this Agreement (each, an "Indemnified Party"), against any costs or expenses
(including reasonable attorneys' fees and expenses), judgments, fines, losses,
claims, damages or liabilities (collectively, "Costs") incurred in connection
with any claim, action, suit, proceeding or investigation, whether civil,
criminal, administrative or investigative, arising out of matters existing or
occurring at or prior to the Effective Time (including the transactions
contemplated by this Agreement, including the entering into the Option
Agreement), whether asserted or claimed prior to, at or after the Effective
Time, and to advance any such Costs to each Indemnified Party as they are from
time to time incurred, in each case to the fullest extent such Indemnified Party
would have been indemnified as a director, officer or employee of Haven or any
of its Subsidiaries under the DGCL.
(b) Any Indemnified Party wishing to claim indemnification
under Section 4.14(a), upon learning of any such claim, action, suit, proceeding
or investigation, shall promptly notify Queens thereof, but the failure to so
notify shall not relieve Queens of any liability it may have hereunder to such
Indemnified Party if such failure does not materially prejudice the indemnifying
party. In the event of any such claim, action, suit, proceeding or
investigation, (i) Queens shall have the right to assume the defense thereof
with counsel reasonably acceptable to the Indemnified Party, and Queens shall
not be liable to such Indemnified Party for any legal expenses of other counsel
subsequently incurred by such Indemnified Party in connection with the defense
thereof, except that if Queens does not elect to assume such defense within a
reasonable time or counsel for the Indemnified Party at any time advises that
there are issues which raise conflicts of interest between Queens and the
Indemnified Party, the Indemnified Party may retain counsel satisfactory to such
Indemnified Party, and Queens shall remain responsible for the reasonable fees
and expenses of such counsel as set forth above, to be paid promptly as
statements therefor are received; PROVIDED, HOWEVER, that Queens shall be
obligated pursuant to this paragraph (b) to pay for only one firm of counsel for
all Indemnified Parties in any one jurisdiction with respect to any given claim,
action, suit, proceeding or investigation unless the use of one counsel for such
Indemnified Parties would present such counsel with a conflict of interest; (ii)
the Indemnified Party will reasonably cooperate in the defense of any such
matter; and (iii) Queens shall not be liable for any settlement effected by an
Indemnified Party without its prior written consent, which consent may not be
withheld or delayed unless such settlement is unreasonable in light of such
claims, actions, suits, proceedings or investigations against, or defenses
available to, such Indemnified Party.
(c) Queens shall pay all reasonable Costs, including
attorneys' fees, that may be incurred by any Indemnified Party in successfully
enforcing the indemnity and other obligations
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provided for in this Section 4.14 to the fullest extent permitted under
applicable law. The rights of each Indemnified Party hereunder shall be in
addition to any other rights such Indemnified Party may have under applicable
law.
(d) For a period of six years after the Effective Time, Queens
shall cause to be maintained in effect for the former directors and officers of
Haven coverage under Queens' policy of directors and officers liability
insurance no less advantageous to the beneficiaries thereof than the current
policies of directors' and officers' liability insurance maintained by Haven;
PROVIDED, HOWEVER, that in no event shall Queens be obligated to expend, in
order to maintain or provide insurance coverage pursuant to this Subsection
4.14(d), any premium per annum in excess of 200% of the amount of the annual
premiums paid as of the date hereof by Haven for such insurance ("Maximum
Agreement"); PROVIDED, FURTHER, that if the amount of the annual premiums
necessary to maintain or procure such insurance coverage exceeds the Maximum
Amount, Queens shall obtain the most advantageous coverage of directors' and
officers' insurance obtainable for an annual premium equal to the Maximum
Amount; and PROVIDED, FURTHER, that officers and directors of Haven may be
required to make application and provide customary representations and
warranties to Queens' insurance carrier for the purpose of obtaining such
insurance.
Section 4.15. TAX-FREE REORGANIZATION TREATMENT. Prior to the
Effective Time, neither Queens nor Haven shall intentionally take, fail to take,
or cause to be taken or not taken, or cause or permit any of their respective
Subsidiaries to take, fail to take, or cause to be taken or not taken, any
action within its control that would disqualify the Merger as a reorganization
within the meaning of Section 368(a) of the Code. Subsequent to the Effective
Time, Queens shall not take any action within its control that would disqualify
the Merger as a tax-free reorganization under the Code.
Section 4.16. Employees; Benefit Plans and Programs.
-------------------------------------
(a) Each person who is employed by Haven or CFS Bank
immediately prior to the Effective Time (a "Haven Employee") shall, at the
Effective Time, become an employee of Queens or Queens Bank or shall remain an
employee of CFS Bank. Beginning at the Effective Time, each Haven Employee shall
serve Queens, Queens Bank or CFS Bank in the same capacity in which he or she
served immediately prior to the Effective Time and upon the same terms and
conditions generally applicable to other employees of Queens or Queens Bank with
comparable positions, with the following special provisions:
(i) No Haven Employee shall be, or have or exercise
the authority of, an officer of Queens or Queens Bank unless and until
elected or appointed an officer of Queens or Queens Bank in accordance
with Queens' or Queens Bank's bylaws;
(ii) At or as soon as practicable following the
Effective Time, Queens and Queens Bank shall establish and implement a
program of compensation and benefits designed to cover all similarly
situated employees on a uniform basis ("New Compensation and Benefits
Program"). The New Compensation and Benefits Program may contain any
combination of new plans, continuations of plans maintained by Queens
or Queens Bank immediately prior to the Effective Time and continuation
of plans maintained by Haven or
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CFS Bank immediately prior to the Effective Time as Queens, in its
discretion, may determine. To the extent that it is not practicable to
implement any constituent part of the New Compensation and Benefits
Program at the Effective Time, Queens and Queens Bank shall continue in
effect any comparable plan maintained immediately prior to the
Effective Time for the respective employees of Queens, Haven, Queens
Bank and CFS Bank for a transition period. During the transition
period, the persons who were employees of Haven or CFS Bank immediately
prior to the Effective Time who become employees of Queens or Queens
Bank or remain employees of CFS Bank at the Effective Time shall
continue to participate in the plans of Haven and CFS Bank that are
continued for transitional purposes, and all other employees of Queens
or Queens Bank will participate only in the comparable plans of Queens
and Queens Bank that are continued for transitional purposes.
(iii) Each constituent part of the New Compensation
and Benefits Program shall recognize, in the case of persons employed
by Queens, Queens Bank, Haven or CFS Bank immediately prior to the
Effective Time who are also employed by Queens, Queens Bank or CFS Bank
immediately after the Effective Time, all service with Queens, Queens
Bank, Haven or CFS Bank as service with Queens, Queens Bank and CFS
Bank for eligibility, participation, vesting and all other such
purposes except for purposes of any post- retirement, health and life
insurance benefits.
(iv) In the case of any constituent part of the New
Compensation and Benefits Program which is a life, health or long-term
disability insurance plan: (A) such plan shall not apply any
preexisting condition limitations for conditions covered under the
applicable life, health or long-term disability insurance plans
maintained by Queens, Queens Bank, Haven and CFS Bank as of the
Effective Time, (B) each such plan which is a health insurance plan
shall honor any deductible and out of pocket expenses incurred under
the applicable life health plans maintained by Queens, Queens Bank,
Haven and CFS Bank as of the Effective Time and (C) each such plan
which is a life or long-term disability insurance plan shall waive any
medical certification otherwise required in order to assure the
continuation of coverage at a level not less than that in effect
immediately prior to the implementation of such plan (but subject to
any overall limit on the maximum amount of coverage under such plans).
(b) (i) Queens shall assume the obligations of Haven and CFS
Bank with respect to any severance plans or agreements identified in Haven's
Disclosure Letter, as they may be in effect at the Effective Time, and shall pay
amounts thereunder when due. In the event of the termination of employment of
any person who was an officer or employee of Haven or CFS Bank prior to the
Effective Time prior to the first anniversary of the Effective Time, such person
shall only be eligible for severance benefits under the plans referred to in the
preceding sentence. Thereafter, such person shall be entitled to a severance
benefit under the severance plan maintained by Queens or Queens Bank.
(ii) The amounts payable under the CFS Bank bonus programs
shall be determined for the period from January 1, 2000 through the Closing
Date, except that (A) the adjusted pre-tax net income and target goals shall be
adjusted and pro-rated for the portion of the
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year from January 1, 2000 through the Closing Date and (B) payments thereunder,
as so adjusted, shall be made as of the Closing Date.
(iii) Before the Effective Time, Haven may, in its sole and
absolute discretion, in accordance with applicable law, terminate any employee
stock ownership plan maintained by Haven ("Haven's ESOP") and cause Haven's ESOP
to sell unallocated shares held in the ESOP to the extent necessary to pay in
full any outstanding ESOP loan. In such event, any remaining unallocated shares
shall be distributed to the accounts of Haven's ESOP participants as investment
earnings in proportion to the amount held in each participant's account as of
the termination date.
Section 4.17. ADVISORY BOARD. Queens shall, promptly following
the Effective Time, cause all of the members of Haven's Board of Directors as of
the date of this Agreement, other than the New Queens Directors, New Queens Bank
Directors and Continuing CFS Bank Directors who are willing to so serve to be
elected or appointed as members of Queens' advisory board ("Advisory Board"),
the function of which shall be to advise Queens with respect to deposit and
lending activities in Haven's former market area and to maintain and develop
customer relationships. The members of the Advisory Board shall be elected to
serve an initial term of three years beginning on the Effective Date. Each
member of the Advisory Board shall receive an annual retainer fee for such
service of $30,000, payable in monthly installments or in one lump sum at any
time in advance at the option of Queens.
ARTICLE V
CONDITIONS TO CONSUMMATION
Section 5.1. CONDITIONS TO EACH PARTY'S OBLIGATIONS. The
respective obligations of each party to effect the Merger and any other
transactions contemplated by this Agreement shall be subject to the satisfaction
of the following conditions:
(a) this Agreement shall have been approved by (i) the
requisite vote of Haven's stockholders in accordance with applicable law and
regulations and (ii) the requisite vote of Queens' stockholders in accordance
with applicable law and regulations;
(b) (i) the Requisite Regulatory Approvals and any necessary
regulatory consents and waivers with respect to this Agreement and the
transactions contemplated hereby shall have been obtained and shall remain in
full force and effect, and all statutory waiting periods in respect thereof
shall have expired; and (ii) all other consents, waivers and approvals of any
third parties which are necessary to permit the consummation of the Merger and
the other transactions contemplated hereby (the "Third Party Non-Regulatory
Consents") shall have been obtained or made except for those Third Party
Non-Regulatory Consents the failure to obtain would not have, or would not be
reasonably likely to have, a Material Adverse Effect (x) on Haven and its
Subsidiaries taken as a whole or (y) on Queens and its Subsidiaries taken as a
whole. None of the approvals or waivers referred to herein shall contain any
term or condition which (A) would have, or would be reasonably likely to have, a
Material Adverse Effect on (x) Haven and its Subsidiaries taken as a whole or
(y)
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Queens and its Subsidiaries taken as a whole; or (B) which would reduce, or
would be reasonably likely to reduce, the benefits of the transactions
contemplated hereby to such a degree that the Board of Directors of Queens
determines, in its reasonable good faith judgement, that Queens would not have
entered into this Agreement had such term or condition been known at the date
hereof.
(c) no party hereto shall be subject to any order, decree or
injunction of a court or agency of competent jurisdiction which enjoins or
prohibits the consummation of the Merger or any other transactions contemplated
by this Agreement;
(d) no statute, rule or regulation shall have been enacted,
entered, promulgated, interpreted, applied or enforced by any Governmental
Entity which prohibits, restricts or makes illegal consummation of the Merger or
any other transactions contemplated by this Agreement;
(e) the Registration Statement shall have been declared
effective by the SEC, and no proceedings shall be pending or threatened by the
SEC to suspend the effectiveness of the Registration Statement; all required
approvals by state securities or "blue sky" authorities with respect to the
transactions contemplated by this Agreement shall have been obtained;
(f) Queens shall have caused to be listed on the Nasdaq Stock
Market, or on such other market on which shares of Queens Common Stock shall
then be trading, subject only to official notice of issuance, the shares of
Queens Common Stock to be issued by Queens in exchange for the shares of Haven
Common Stock.
Section 5.2. CONDITIONS TO THE OBLIGATIONS OF QUEENS. The
obligations of Queens to effect the Merger, and any other transactions
contemplated by this Agreement shall be further subject to the satisfaction of
the following additional conditions, any one or more of which may be waived by
Queens:
(a) each of the obligations of Haven required to be performed
by it at or prior to the Closing pursuant to the terms of this Agreement shall
have been duly performed and complied with in all material respects, and the
representations and warranties of Haven contained in this Agreement shall be
true and correct, subject to Sections 2.1 and 2.2, as of the date of this
Agreement and as of the Effective Time as though made at and as of the Effective
Time (except as to any representation or warranty which specifically relates to
an earlier date). Queens shall have received a certificate to the foregoing
effect signed by the chief executive officer and the chief financial or
principal accounting officer of Haven;
(b) all action required to be taken by, or on the part of,
Haven to authorize the execution, delivery and performance of this Agreement and
the consummation by Haven of the transactions contemplated hereby shall have
been duly and validly taken by the Board of Directors and stockholders of Haven,
as the case may be, and Queens shall have received certified copies of the
resolutions evidencing such authorization;
(c) Haven shall have obtained the consent or approval of each
person (other than the regulatory approvals or consents referred to in Section
5.1(b)) whose consent or approval shall be required in order to consummate the
Merger or to permit the succession by the surviving
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corporation pursuant to the Merger to any obligation, right or interest of Haven
or its Subsidiaries under any loan or credit agreement, note, mortgage,
indenture, lease, license or other agreement or instrument to which Haven or its
Subsidiaries is a party or is otherwise bound.
(d) Neither a Distribution Date nor a Shares Acquisition Date,
as such terms are defined in Haven Rights Agreement, shall have occurred, and
Haven Preferred Share Purchase Rights shall not have become nonredeemable and
shall not become nonredeemable upon consummation of the Merger, and Haven
Preferred Share Purchase Rights shall not become exercisable for capital stock
of Queens upon consummation of the Merger.
(e) Queens shall have received certificates (such certificates
to be dated as of a day as close as practicable to the Closing Date) from
appropriate authorities as to the corporate existence and good standing of
Haven;
(f) Queens shall have received an opinion of Sullivan &
Cromwell, counsel to Queens, dated as of the Effective Date, in form and
substance customary in transactions of the type contemplated hereby, and
reasonably satisfactory to Queens, substantially to the effect that on the basis
of the facts, representations and assumptions set forth in such opinion which
are consistent with the state of facts existing at the Effective Time, the
Merger will be treated for federal income tax purposes as a reorganization
within the meaning of Section 368(a) of the Code and that accordingly:
(i) no gain or loss will be recognized by Queens,
Queens Bank, Haven or CFS Bank as a result of the Merger; and
(ii) except to the extent of any cash received in
lieu of a fractional share interest in Queens Common Stock, no gain or
loss will be recognized by the stockholders of Haven who exchange their
Haven Common Stock for Queens Common Stock pursuant to the Merger.
Such opinion may be based on, in addition to the review of
such matters of fact and law as Sullivan & Cromwell considers appropriate, (x)
representations made at the request of Sullivan & Cromwell by Queens, Queens
Bank, Haven, CFS Bank, stockholders of Queens or Haven, or any combination of
such persons and (y) certificates provided at the request Sullivan & Cromwell by
officers of Queens, Queens Bank, Haven, CFS Bank and other appropriate persons.
Section 5.3. Conditions to the Obligations of Haven. The
obligations of Haven to effect the Merger and any other transactions
contemplated by this Agreement shall be further subject to the satisfaction of
the following additional conditions, any one or more of which may be waived by
Haven:
(a) each of the obligations of Queens, required to be
performed by it at or prior to the Closing pursuant to the terms of this
Agreement shall have been duly performed and complied with in all material
respects, and the representations and warranties of Queens contained in this
Agreement shall be true and correct, subject to Sections 2.1 and 2.2, as of the
date of this Agreement and as of the Effective Time as though made at and as of
the Effective Time (except as to any representation or warranty which
specifically relates to an earlier date). Haven shall have received
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a certificate to the foregoing effect signed by the chief executive officer and
the chief financial or principal accounting officer of Queens;
(b) all action required to be taken by, or on the part of,
Queens to authorize the execution, delivery and performance of this Agreement
and the consummation by Queens of the transactions contemplated hereby shall
have been duly and validly taken by the Board of Directors and stockholders of
Queens, as the case may be, and Haven shall have received certified copies of
the resolutions evidencing such authorization;
(c) Queens shall have obtained the consent or approval of each
person (other than the regulatory approvals or consents referred to in Section
5.1(b)) whose consent or approval shall be required in connection with the
transactions contemplated hereby under any loan or credit agreement, note,
mortgage, indenture, lease, license or other agreement or instrument to which
Queens or its Subsidiaries is a party or is otherwise bound, except those for
which failure to obtain such consents and approvals would not, individually or
in the aggregate, have a Material Adverse Effect on Queens (after giving effect
to the transactions contemplated hereby) or upon the consummation of the
transactions contemplated hereby;
(d) Haven shall have received certificates (such certificates
to be dated as of a day as close as practicable to the Closing Date) from
appropriate authorities as to the corporate existence and good standing of
Queens;
(e) Queens shall have taken such action as is required to
assume the covenants and conditions to be performed or kept by Haven in the
Indenture, dated as of February 12, 1997, in connection with Haven Capital Trust
I, and the Indenture, dated as of May 26, 1999, in connection with Haven Capital
Trust II in supplemental indentures;
(f) Haven shall have received an opinion of Thacher Proffitt &
Wood, counsel to Haven, dated as of the Effective Date, in form and substance
customary in transactions of the type contemplated hereby, and reasonably
satisfactory to Haven, substantially to the effect that on the basis of the
facts, representations and assumptions set forth in such opinion which are
consistent with the state of facts existing at the Effective Time, the Merger
will be treated for federal income tax purposes as a reorganization within the
meaning of Section 368(a) of the Code and that accordingly:
(i) no gain or loss will be recognized by Queens,
Queens Bank, Haven or CFS Bank as a result of the Merger;
(ii) except to the extent of any cash received in
lieu of a fractional share interest in Queens Common Stock, no gain or
loss will be recognized by the stockholders of Haven who exchange their
Haven Common Stock for Queens Common Stock pursuant to the Merger;
(iii) the tax basis of Queens Common Stock received
by stockholders who exchange their Haven Common Stock for Queens Common
Stock in the Merger will be the same as the tax basis of Haven Common
Stock surrendered pursuant to the Merger, reduced
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by any amount allocable to a fractional share interest for which cash
is received and increased by any gain recognized on the exchange; and
(iv) the holding period of Queens Common Stock
received by each stockholder in the Merger will include the holding
period of Haven Common Stock exchanged therefor, provided that such
stockholder held such Haven Common Stock as a capital asset on the
Effective Date.
Such opinion may be based on, in addition to the review of
such matters of fact and law as Thacher Proffitt & Wood considers appropriate,
(x) representations made at the request of Thacher Proffitt & Wood by Queens,
Queens Bank, Haven, CFS Bank, stockholders of Queens or Haven, or any
combination of such persons and (y) certificates provided at the request of
Thacher Proffitt & Wood by officers of Queens, Queens Bank, Haven, CFS Bank and
other appropriate persons.
ARTICLE VI
TERMINATION
Section 6.1. TERMINATION. This Agreement may be terminated,
and the Merger abandoned, at or prior to the Effective Time, either before or
after its approval by the stockholders of Haven and Queens:
(a) by the mutual consent of Queens and Haven, if the Board of
Directors of each so determines by vote of a majority of the members of its
entire Board;
(b) by Queens or Haven, if its Board of Directors so
determines by vote of a majority of the members of its entire Board, in the
event of (i) the failure of the stockholders of Haven or Queens to approve the
Agreement at its Stockholder Meeting called to consider such approval; PROVIDED,
HOWEVER, that Haven or Queens, as the case may be, shall only be entitled to
terminate the Agreement pursuant to this clause (i) if it has complied in all
material respects with its obligations under Sections 4.8 and 4.9, or (ii) a
material breach by the other party hereto of any representation, warranty,
covenant or agreement contained herein which causes the conditions set forth in
Section 5.2(a) (in the case of termination by Queens) or Section 5.3(a) (in the
case of the termination by Haven) not to be satisfied and such breach is not
cured within 25 business days after written notice of such breach is given to
the party committing such breach by the other party or which breach is not
capable of being cured by the date set forth in Section 6.1(d) or any extension
thereof;
(c) by Queens or Haven, by written notice to the other party,
if either (i) any approval, consent or waiver of a Governmental Entity required
to permit consummation of the transactions contemplated hereby shall have been
denied or (ii) any court or governmental authority of competent jurisdiction
shall have issued a final, unappealable order enjoining or otherwise prohibiting
consummation of the transactions contemplated by this Agreement;
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(d) by Queens or Haven, if its Board of Directors so
determines by vote of a majority of the members of its entire Board, in the
event that the Merger is not consummated by March 31, 2001 unless the failure to
so consummate by such time is due to the breach of any representation, warranty
or covenant contained in this Agreement by the party seeking to terminate;
(e) by Haven, if its Board of Directors so determines by a
majority vote of the members of its entire Board, at any time during the five
day period commencing on the Valuation Date, such termination to be effective on
the 15th business day following such Valuation Date, ("Effective Termination
Date") if both of the following conditions are satisfied:
(i) the Queens Market Value on the Valuation
Date is less than an amount equal to 80% of the Initial
Queens Market Value; and
(ii) the Queens Ratio shall be less than 0.80
times the Index Ratio;
SUBJECT, HOWEVER, to the following three sentences. If Haven elects to exercise
its termination right pursuant to this Section 6.1(e), it shall give prompt
written notice thereof to Queens within five business days of the Valuation
Date; PROVIDED, that such notice of election to terminate may be withdrawn at
any time prior to the Effective Termination Date. During the five business day
period commencing with its receipt of such notice, Queens shall have the option
to increase the consideration to be received by the holders of Haven Common
Stock hereunder by adjusting the Exchange Ratio to equal the lesser of (x) a
number equal to a fraction, the numerator of which is 0.832 multiplied by the
Initial Queens Market Value and the denominator of which is the Queens Market
Value, and (y) the quotient obtained by dividing (1) the product of the Index
Ratio and the Exchange Ratio (as then in effect) by (2) the Queens Ratio. If
Queens so elects, it shall give, within such five day period, written notice to
Haven of such election and the revised Exchange Ratio, whereupon no termination
shall be deemed to have occurred pursuant to this Section 6.1(e) and this
Agreement shall remain in full force and effect in accordance with its terms
(except as the Merger Consideration shall have been so modified).
For purposes of Section 6.1(e), the following terms shall have
the meanings indicated below:
"Average Index Price" shall mean the average of the daily
Index Prices for the 15 consecutive full trading days immediately preceding the
Valuation Date.
"Index Group" means the 25 financial institution holding
companies listed below, the common stock of all of which shall be publicly
traded and as to which there shall not have been an Acquisition Transaction
involving such company publicly announced at any time during the period
beginning on the date of this Agreement and ending on the Valuation Date. In the
event that the common stock of any such companies ceases to be publicly traded
or an Acquisition Proposal involving any such companies is announced at any time
during the period beginning on the date of this Agreement and ending on the
Valuation Date, such company will be removed from the Index Group, and the
weights attributed to the remaining companies will be adjusted proportionately
for purposes of determining the Index Price on the relevant dates. The 25
financial institution holding companies and the weights attributed to them are
as follows:
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HOLDING COMPANY WEIGHTING
--------------- ---------
WASHINGTON FEDERAL, INC. 7.95%
INDEPENDENCE COMMUNITY BANK CORP. 10.18
COMMERCIAL FEDERAL CORPORATION 8.59
WEBSTER FINANCIAL CORPORATION 6.45
DOWNEY FINANCIAL CORP. 4.26
STATEN ISLAND BANCORP, INC. 5.65
RICHMOND COUNTY FINANCIAL CORP. 4.38
AMERICAN FINANCIAL HOLDINGS, INC. 4.37
MAF BANCORP, INC. 3.55
FIRST SENTINEL BANCORP, INC. 5.46
HARBOR FLORIDA BANCSHARES, INC. 3.96
FIRST INDIANA CORPORATION 1.91
FIRSTFED FINANCIAL CORP. 2.63
UNITED COMMUNITY FINANCIAL CORP. 5.72
SEACOAST FINANCIAL SERVICES CORPORATION 3.85
OCEANFIRST FINANCIAL CORP. 1.82
INTERWEST BANCORP, INC. 2.34
DIME COMMUNITY BANCSHARES, INC. 1.84
PFF BANCORP, INC. 2.02
FIRST FEDERAL CAPITAL CORP. 2.77
PBOC HOLDINGS, INC. 3.01
FIRST FINANCIAL HOLDINGS INC. 2.02
ANDOVER BANCORP, INC. .96
VIRGINIA CAPITAL BANCSHARES, INC. 1.56
CFS BANCORP, INC. 2.75
"Index Price" on a given date shall mean the sum of the
following: the closing sales price of a share of common stock of each company
comprising the Index Group (as reported for such date on the consolidated
transaction reporting system for the stock exchange or market on which such
common stock is principally traded, multiplied by the applicable weighting for
such common stock.
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"Initial Queens Market Value" means the average of (i) $18.125
and (ii) the closing sales price of Queens Common Stock on the Starting Date, as
reported on the Nasdaq Stock Market.
The Initial Queens Market Value shall be equitably adjusted to take into effect
any stock dividend, reclassification, recapitalization, split up, combination,
exchange of shares, or similar transaction between the date of this Agreement
and the Valuation Date.
"Index Ratio" shall mean the quotient of the Average Index
Price divided by the Index Price on the Starting Date.
"Queens Market Value" shall be the average of the closing sale
prices of a share of Queens Common Stock, as reported on the principal stock
exchange or trading system upon which Queens Common Stock is then trading, for
the 15 consecutive trading days immediately preceding the day on which the
approval of the FRB is received (such date being referred to herein as the
"Valuation Date").
"Queens Ratio" shall mean the quotient of the Queens Market
Value divided by the Initial Queens Market Value.
"Starting Date" shall mean June 28, 2000.
"Valuation Date" shall have the meaning set forth in this
Section 6.1(e).
If Queens or any company belonging to the Index Group declares
or effects a stock dividend, reclassification, recapitalization, split-up,
combination, exchange of shares or similar transaction between the date of this
Agreement and the Valuation Date, the prices for the common stock of such
company shall be appropriately adjusted for the purposes of applying this
Section 6.1(e).
Section 6.2. Effect of Termination. In the event of the
termination of this Agreement by either Queens or Haven, as provided above, this
Agreement shall thereafter become void and there shall be no liability on the
part of any party hereto or their respective officers or directors, except that
(a) any such termination shall be without prejudice to the rights of any party
hereto arising out of the willful breach by any other party of any covenant,
representation or obligation contained in this Agreement and (b) the obligations
of the parties under Section 4.3(a) (the last three sentences only), Section 6.2
and Section 8.6 shall survive.
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ARTICLE VII
CLOSING, EFFECTIVE DATE AND EFFECTIVE TIME
Section 7.1. EFFECTIVE DATE AND EFFECTIVE TIME. The closing of
the transactions contemplated hereby ("Closing") shall take place at the offices
of Thacher Proffitt & Wood, Two World Trade Center, New York, New York 10048, on
a date ("Closing Date") that is no later than five business days following the
date on which the expiration of the last applicable waiting period in connection
with notices to and approvals of regulatory and governmental authorities shall
occur and all conditions to the consummation of this Agreement are satisfied or
waived, or on such other date as may be agreed to by the parties. Prior to the
Closing Date, Queens and Haven shall execute a Certificate of Merger in
accordance with all appropriate legal requirements, which shall be filed as
required by law on the Closing Date, and the Merger provided for therein shall
become effective upon such filing or at such time as may be specified in such
Certificate of Merger. The date of such filing or such later effective time as
specified in the Certificate of Merger is herein referred to as the "Effective
Date." The "Effective Time" of the Merger shall be as set forth in the
Certificate of Merger.
Section 7.2. DELIVERIES AT THE CLOSING. Subject to the
provisions of Articles V and VI, on the Closing Date there shall be delivered to
Queens and Haven the documents and instruments required to be delivered under
Article V.
ARTICLE VIII
CERTAIN OTHER MATTERS
Section 8.1. CERTAIN DEFINITIONS; INTERPRETATION. As
used in this Agreement, the following terms shall have the meanings indicated:
"business day" means each day except Saturday, Sunday or a day
on which banking institutions in New York are authorized or required by
law to remain closed.
"material" means material to Queens or Haven (as the case may
be) and its respective Subsidiaries, taken as a whole.
"person" includes an individual, corporation, limited
liability company, partnership, association, trust or unincorporated
organization.
When a reference is made in this Agreement to Sections,
Exhibits or Schedules, such reference shall be to a Section of, Exhibit or
Schedule to, this Agreement unless otherwise indicated.
The table of contents and headings contained in this Agreement are for ease of
reference only and shall not affect the meaning or interpretation of this
Agreement. Whenever the words "include," "includes" or "including" are used in
this Agreement, they shall be deemed followed by the words "without limitation."
Any singular term in this Agreement shall be deemed to include the plural, and
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any plural term the singular. Any reference to gender in this Agreement shall be
deemed to include any other gender.
Section 8.2. SURVIVAL. Only those agreements and covenants of
the parties that are by their terms applicable in whole or in part after the
Effective Time, including Sections 4.14, 4.15, and 8.6 of this Agreement, shall
survive the Effective Time. All other representations, warranties, agreements
and covenants shall be deemed to be conditions of the Agreement and shall not
survive the Effective Time. If the Agreement shall be terminated, the agreements
of the parties in the last three sentences of Section 4.3(a), Section 6.2, and
Section 8.6 shall survive such termination.
Section 8.3. WAIVER; AMENDMENT. Prior to the Effective Time,
any provision of this Agreement may be: (i) waived in writing by the party
benefitted by the provision or (ii) amended or modified at any time (including
the structure of the transaction) by an agreement in writing between the parties
hereto except that, after the vote by the stockholders of Haven or Queens, no
amendment or modification may be made that would reduce the Merger Consideration
or contravene any provision of the DGCL or federal banking laws, rules and
regulations.
Section 8.4. COUNTERPARTS. This Agreement may be
executed in counterparts each of which shall be deemed to constitute an
original, but all of which together shall constitute one and the same
instrument.
Section 8.5. GOVERNING LAW. This Agreement shall be
governed by, and interpreted in accordance with, the laws of the State of New
York, without regard to conflicts of laws principles.
Section 8.6. EXPENSES. Except as provided in Section
6.3, each party hereto will bear all expenses incurred by it in connection with
this Agreement and the transactions contemplated hereby.
Section 8.7. NOTICES. All notices, requests, acknowledgments
and other communications hereunder to a party shall be in writing and shall be
deemed to have been duly given when delivered by hand, overnight courier or
facsimile transmission (confirmed in writing) to such party at its address or
facsimile number set forth below or such other address or facsimile transmission
as such party may specify by notice to the other party hereto.
If to Haven, to:
Haven Bancorp, Inc.
615 Merrick Avenue
Westbury, New York 11590
Facsimile: 516-683-8344
Attention: Philip S. Messina, Chairman and
Chief Executive Officer
and
William J. Jennings II, President
and Chief Operating Officer;
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With copies to:
Thacher Proffitt & Wood, 38th Floor
Two World Trade Center
New York, New York 10048
Facsimile: 212-912-8371
Attention: Omer S.J. Williams, Esq.
If to Queens, to:
Queens County Bancorp, Inc.
38-25 Main Street
Flushing, New York 11354
Facsimile: 718-359-0888
Attention: Joseph R. Ficalora, Chairman,
President and Chief Executive
Officer
With copies to:
Sullivan & Cromwell
125 Broad Street
New York, New York 10004
Facsimile: 212-558-3345
Attention: Mark J. Menting, Esq.
Section 8.8. Entire Agreement; etc. This Agreement, the Option
Agreement and the Disclosure Letters together with any ancillary voting
agreements and the affiliate letters described in Section 4.11 hereof (the
"Covered Agreements") represent the entire understanding of the parties hereto
with reference to the transactions contemplated hereby and supersede any and all
other oral or written agreements heretofore made. All terms and provisions of
this Agreement shall be binding upon and shall inure to the benefit of the
parties hereto and their respective successors and assigns.
Except for Sections 4.13 and 4.14, which confer rights on the parties described
therein, nothing in this Agreement is intended to confer upon any other person
any rights or remedies of any nature whatsoever under or by reason of this
Agreement. The confidentiality agreement referred to in Section 4.1 hereof is
hereby terminated. Nothing herein shall be deemed to prohibit Queens from
acquiring up to 4.9% of Haven's then outstanding Common Stock.
Section 8.9. ASSIGNMENT. This Agreement may not be
assigned by either party hereto without the written consent of the other party.
Section 8.10. WAIVER OF JURY TRIAL. Each party hereto
acknowledges and agrees that any controversy which may arise under any of the
Covered Agreements is likely to involve complicated and difficult issues, and
therefore each party hereby irrevocably and unconditionally waives any right
such party may have to a trial by jury in respect of any litigation, directly or
indirectly, arising out of, or relating to, any of the covered Agreements, or
the transactions contemplated by any of the Covered Agreements. Each party
certifies and acknowledges that (a) no
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representative, agent or attorney of any other party has represented, expressly
or otherwise, that such other party would not, in the event of litigation, seek
to enforce the foregoing waiver, (b) such party understands and has considered
the implications of this waiver, (c) such party makes this waiver voluntarily,
and (d) such party has been induced to enter into this Agreement by, among other
things, the mutual waivers and certifications in this Section 8.10.
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IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their duly authorized officers as of the day and
year first above written.
QUEENS COUNTY BANCORP, INC.
By: /s/ Joseph R. Ficalora
----------------------------------------
Joseph R. Ficalora
Chairman of the Board, President and
Chief Executive Officer
HAVEN BANCORP, INC.
By: /s/ Philip S. Messina
----------------------------------------
Philip S. Messina
Chairman of the Board
and Chief Executive Officer
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Exhibit A
---------
June 27, 2000
Queens County Bancorp, Inc.
38-25 Main Street, 2nd Floor
Flushing, New York 11354
Attention: Mr. Joseph R. Ficalora
Chairman, President and Chief Executive Officer
Ladies and Gentlemen:
Reference is made to the Agreement and Plan of Merger, dated as of June
__, 2000 (the "Merger Agreement"), by and between Queens County Bancorp, Inc., a
Delaware corporation ("Queens") and Haven Bancorp, Inc., a Delaware corporation
("Haven"). The Merger Agreement provides, among other things, for the merger of
Haven with and into Queens, with Queens being the surviving entity (the
"Merger"). Upon consummation of the Merger, each share of Haven common stock,
par value $0.01 per share ("Haven Common Stock") other than Excluded Shares (as
defined in the Merger Agreement) will become and be converted into the right to
receive 1.04 shares of common stock, par value $0.01 per share, of Queens
("Queens Common Stock") as determined pursuant to Section 1.2 of the Merger
Agreement. This Letter Agreement is being entered into pursuant to Section 4.11
of the Merger Agreement.
I have been advised that (i) the Merger constitutes a transaction
covered by Rule 145 of the Rules and Regulations (the "Regulations") of the
Securities and Exchange Commission (the "Commission") under the Securities Act
of 1933, as amended (the "Act"), and (ii) I may be deemed to be an affiliate of
Haven, as the term "affiliate" is defined for purposes of Rule 145 under the
Act; and that, accordingly, the shares of Queens Common Stock that I may acquire
in connection with the Merger may be disposed of only in conformity with the
provisions hereof.
I hereby represent and warrant to, and covenant with, Queens as
follows:
1. I have full power to execute this Letter Agreement, to make the
representations, warranties and agreements herein and to perform my obligations
hereunder.
2. I have carefully read this Letter Agreement and, to the extent I
felt necessary, discussed its requirements and other applicable limitations upon
my ability to sell, transfer or otherwise dispose of shares of Queens Common
Stock with my counsel or counsel for Haven.
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Queens County Bancorp, Inc. Page 2.
3. In the event I receive any shares of Queens Common Stock in exchange
for shares of Haven Common Stock as a result of the consummation of the Merger,
or any securities which may be paid as a dividend or otherwise distributed
thereon or with respect thereto or issued or delivered in exchange or
substitution therefor, or any option, right or other interest (all such shares
and securities being referred to herein as "Restricted Securities"), and with
respect to any such Restricted Securities:
(A) I will not make any sale, transfer or other disposition of
Restricted Securities in violation of the Act or the Regulations.
(B) I have been advised that the shares of Queens Common Stock
to be issued in the Merger have been registered under the Act by a
Registration Statement of Queens on Form S-4. However, I have also been
advised that because (i) at the time of the submission of the Merger
Agreement to a vote of the stockholders of Haven, I may be deemed an
affiliate of Haven, and (ii) the distribution by me of Queens Common
Stock has not been registered under the Act, that I may not sell,
transfer or otherwise dispose of Queens Common Stock issued to me in
the Merger or other Restricted Securities unless (a) such sale,
transfer or other disposition has been registered under the Act, (b)
such sale, transfer or other disposition is made in conformity with the
volume and other limitations imposed by Rule 145 under the Act, or (c)
in the opinion of counsel reasonably acceptable to Queens, such sale,
transfer or other disposition is otherwise exempt from registration
under the Act.
(C) I understand that Queens is under no obligation to
register the sale, transfer or other disposition of shares of Queens
Common Stock or other Restricted Securities by me or on my behalf under
the Act or to take any other action necessary in order to make
compliance with an exemption from such registration available.
(D) I also understand that stop transfer instructions will be
given to Queens' transfer agent with respect to my Restricted
Securities and that there will be placed on the certificates for
Restricted Securities issued to me, or any substitutions therefor, a
legend stating in substance:
THE SHARES REPRESENTED BY THIS CERTIFICATE WERE ISSUED IN A
TRANSACTION TO WHICH RULE 145 UNDER THE SECURITIES ACT OF
1933, AS AMENDED, APPLIES. THE SHARES REPRESENTED BY THIS
CERTIFICATE MAY ONLY BE TRANSFERRED IN ACCORDANCE WITH THE
TERMS OF AN AGREEMENT BETWEEN THE REGISTERED HOLDER HEREOF AND
QUEENS COUNTY BANCORP, INC. ("QUEENS"), A COPY OF WHICH
AGREEMENT IS ON FILE AT THE PRINCIPAL OFFICE OF QUEENS. A COPY
OF SUCH AGREEMENT SHALL BE PROVIDED, WITHOUT CHARGE, UPON
RECEIPT BY QUEENS OF A WRITTEN REQUEST.
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Queens County Bancorp, Inc. Page 3.
(E) Unless a transfer of Restricted Securities is a sale made
in conformity with the provisions of Rule 145(d), or made pursuant to
any effective registration statement under the Act, Queens reserves the
right to put an appropriate legend on the certificate issued to my
transferee.
(F) It is understood and agreed that the legends set forth in
paragraphs D and E above shall be removed by delivery of substitute
certificates without such legend, and/or the issuance of a letter to
Queens' transfer agent removing such stop transfer instructions, if I
shall have delivered to Queens (i) a copy of a letter from the staff of
the Commission, or an opinion of counsel in form and substance
reasonably satisfactory to Queens, or other evidence reasonably
satisfactory to Queens, to the effect that such legend and/or stop
transfer instructions are not required for purposes of the Act or (ii)
reasonably satisfactory evidence or representations that the securities
represented by such certificates are being or have been transferred in
a transaction made in conformity with the provisions of Rule 145 under
the Act.
4. I recognize and agree that the foregoing provisions also apply to
(A) my spouse, (B) any relative of mine or my spouse occupying my home, (C) any
trust or estate in which I, my spouse or any such relative owns at least 10%
beneficial interest or of which any of us serves as trustee, executor or in any
similar capacity and (D) any corporation or other organization in which I, my
spouse or any such relative owns at least 10% of any class of equity securities
or of the equity interest. It is understood that this Letter Agreement shall be
binding upon and enforceable against my administrators, executors,
representatives, heirs, legatees and devisees, and any pledgee holding
securities restricted pursuant to this Letter Agreement.
5. I will (a) vote all shares of Haven Common Stock I then own in favor
of the Merger Agreement and the Merger at any meeting or meetings of Haven's
stockholders called to vote upon the Merger Agreement and the Merger and (b) not
vote such shares (or otherwise provide a proxy or consent or enter into another
voting agreement with respect thereto) in favor of any other Acquisition
Proposal (as defined in the Merger Agreement).
6. Execution of this letter should not be construed as an admission on
my part that I am an "affiliate" of Haven, as described in the second paragraph
of this letter, or as a waiver of any rights I may have to object to any claim
that I am such an affiliate on or after the date of this letter.
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Queens County Bancorp, Inc. Page 4.
6. This Letter Agreement shall terminate and be of no further force
and effect if the Merger Agreement is terminated pursuant to the terms thereof.
Very truly yours,
----------------------------
Name:
Acknowledged as of the date
first written above
Queens County Bancorp, Inc.
By:
----------------------------
Name:
Title:
