EXHIBIT 99.1
STOCK PURCHASE AGREEMENT
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THIS STOCK PURCHASE AGREEMENT (this "Agreement") is dated as of this 26th
day of May, 1999, by and among LOCAL OKLAHOMA BANK, N.A., a national banking
association, and its successors and assigns, with mailing address of 0000 X.X.
00xx, Xxxxxxxx Xxxx, Xxxxxxxx 00000 ("Buyer"), and XXXXXXX SAVINGS, INC., an
Oklahoma corporation ("GSI") and XXXXXXX FEDERAL SAVINGS BANK, a federally
chartered stock savings bank ("Guthrie Bank"). GSI and Guthrie Bank both have
the mailing address of 000 Xxxxx Xxxxxxxx Xxxxxx, Xxxxxxx, Xxxxxxxx 00000-0000,
and shall sometimes hereinafter be collectively referred to as the "Sellers."
(All of the foregoing shall sometimes hereinafter be collectively referred to
herein as the "Parties.")
R E C I T A L S:
a. GSI is an Oklahoma corporation and a publicly-held company
which files periodic reports with the Securities and Exchange
Commission ("SEC"). GSI is a unitary federal savings and loan
holding company under the Home Owners' Loan Act, as amended
("HOLA") duly registered with the Office of Thrift Supervision
("OTS") pursuant to applicable laws and regulations by reason of
its sole ownership of Guthrie Bank. GSI has authorized capital
stock consisting of Three Million (3,000,000) shares of common
stock, par value $0.01 per share (the "Common Stock"), and One
Million (1,000,000) shares of serial preferred stock, par value
$0.01 per share (the "Preferred Stock"). There are a total of
Four Hundred Two Thousand Two Hundred Fifty-Seven (402, 257)
shares of the Common Stock currently issued and outstanding
(hereinafter collectively referred to as the "Shares"). None of
the Preferred Stock has ever been issued. GSI has granted
qualified stock options to nine (9) individuals to purchase a
total of Thirty-Nine Thousand Six Hundred Sixty-One (39,661)
shares of its Common Stock for an exercise price of Twelve and
62.5/100 Dollars ($12.625) per share ("First Stock Options"), all
of which are currently exercisable. GSI has granted an additional
qualified stock option to one (1) other individual to purchase a
total of One Thousand Five Hundred Forty-Five (1,545) shares of
its Common Stock for an exercise price of Seventeen and No/100
Dollars ($17.00) per share ("Second Stock Option"). The First
Stock Options and the Second Stock Option are sometimes
hereinafter collectively referred to as the "Stock Options." The
Second Stock Option is fully exercisable by the individual holder
thereof in the event of the acquisition of control of GSI by
another corporation, or the merger of GSI into another
corporation with that corporation being the surviving
corporation.
x. Xxxxxxx Bank has authorized capital stock of Three Million
(3,000,000) shares of common stock, par value $0.01 per share
(the "Guthrie Bank Stock"), and One Million (1,000,000) shares of
serial preferred stock, no par value per share. There are a total
of One Hundred Thousand (100,000) shares of the Guthrie Bank
Stock issued and outstanding. GSI is the owner of all of the
issued and outstanding Guthrie Bank Stock. None of the preferred
stock of Guthrie Bank
has ever been issued. Guthrie Bank is engaged in the business of
operating a federal stock savings bank, subject to the regulation
and supervision of the OTS, with its only office in the City of
Xxxxxxx, Xxxxx County, Oklahoma.
c. Messrs. XXXXX XXXXXXX, XXXXXXX X. XXXXXXXXXX, XXXXX X.
XXXXXXX, H. XXXXXXX XXXX and XXXXX X. XXXXXX, XX. (the
"Directors") are the individuals who constitute all of the
currently elected members of the Board of Directors of GSI and of
Guthrie Bank, respectively.
d. Buyer is engaged in the business of operating a national
banking association, subject to the regulation and supervision of
the Office of the Comptroller of the Currency ("OCC"), with its
principal office in Oklahoma City, Oklahoma, and has Fifty (50)
branches at various locations in the State of Oklahoma. Buyer is
the wholly-owned subsidiary bank of Local Financial Corporation,
a Delaware corporation ("LFC"), a publicly held reporting company
whose stock is listed on the American Stock Exchange. LFC is duly
registered as a bank holding company under Section 3(a)(1) of the
Bank Holding Company Act and is regulated by the Federal Reserve
Board ("FRB").
e. The Parties (including, specifically, the respective Boards
of Directors of GSI, Guthrie Bank and the Buyer) consider it
advisable and to the benefit of and in the best interests of all
of the Parties, including, specifically, all of the Common Stock
shareholders of GSI ("GSI Shareholders") that Buyer and GSI
participate in and effectuate a share acquisition of all of the
Shares and all of the Stock Options by Buyer in accordance with
the provisions of Section 1090.1 of the Oklahoma General
Corporation Act (18 O.S. 1991,ss.1090.1), as a result of which
GSI will become a wholly-owned subsidiary of Buyer (the
"Acquisition") upon the terms, for the consideration and subject
to the other terms and conditions set forth in this Agreement.
GSI will subsequently be dissolved and Guthrie Bank will then, in
turn, be merged with and into Buyer, with Buyer to be the
surviving bank. The Directors and the Board of Directors of Buyer
have, respectively, duly authorized and approved GSI, Guthrie
Bank and Buyer entering into and performing this Agreement.
NOW, THEREFORE, in consideration of the aforementioned Recitals, the
premises, of the mutual covenants set forth herein, and of such other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged by GSI, Guthrie Bank and the Buyer, and in order to consummate the
Acquisition and to be legally bound, the Parties hereto do hereby covenant and
agree as follows:
ARTICLE I
SALE AND PURCHASE OF THE SHARES
AND THE STOCK OPTIONS; CLOSING
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Section 1.1 Buyer's Acquisition of All of the Common Stock of
GSI Pursuant to this Agreement and 18 O.S. 1991, ss.1090.1.
1.1.1 Subject to the terms and conditions of this
Agreement, at the Effective Time (as that term is defined in Section
1.15, below), each share of Common Stock (other than Dissenting Shares
of Common Stock, as such term is defined in Section 1.2 below) which is
outstanding immediately prior to the Effective Time, shall, by virtue
of the consummation of the Acquisition hereunder, and without any
further action, be converted into the right to receive a cash payment
in the amount set forth below, in this Subsection 1.1.1, pursuant to
the provisions of Section 1090.1 of the Oklahoma General Corporation
Act and the terms and provisions of this Agreement. The total amount of
approximately Nine Million Three Hundred Forty Thousand Sixty-Six and
62/100 Dollars ($9,340,066.62) will be payable on the date upon which
the Effective Time occurs (which shall be hereinafter sometimes
referred to as the "Closing Date" hereunder) for all of the issued and
outstanding Shares and all existing Stock Options ("Purchase Price") as
finally determined on the Closing Date in the following manner:
(i) a price of Twenty-Two and 25/100 Dollars
($22.25) per share of issued and outstanding Common Stock,
subject to reduction to account for any deduction(s) from the
Purchase Price, as provided for in Subsection 1.1.1(iv) below,
if applicable;
(ii) a price of Nine and 62.5/100 Dollars
($9.625) for each share subject to the First Stock Options
(which have an exercise price equal to $12.625 per share), to
be paid by GSI to the holders of the First Stock Options on or
before the Closing Date;
(iii) a price of Five and 25/100 Dollars
($5.25) for each share subject to the Second Stock Option
(which has an exercise price equal to $17.00 per share), to be
paid by GSI to the holder of the Second Stock Option on the
Closing Date; and
(iv) an amount will be deducted from the
Purchase Price which is equal to the total amount of any and
all cash dividends declared and paid by GSI to the holders of
its Common Stock during calendar year 1999, up to and
including the Closing Date, as determined on a per share basis
by dividing the total amount of any and all cash dividends so
declared and paid by the number of issued and outstanding
shares of Common Stock receiving such dividends and reducing
pro tanto the purchase price to be paid by Buyer for each
share of GSI Common Stock pursuant to Subsection 1.1.1(i),
above; PROVIDED, HOWEVER, that this provision shall not apply
to and there shall be no deduction from the Purchase Price
for: (i) the regular semi-annual dividend already declared and
paid by GSI to the holders of its Common Stock in March, 1999,
and (ii) in
the event, and only in the event, the Closing of the
Acquisition shall not be consummated on or before September
30, 1999 (unless due to the failure of GSI or Guthrie Bank to
perform hereunder and/or to fully comply with the terms,
conditions and other provisions of this Agreement, to include,
without limitation, the obtaining by GSI of the approval of
the Acquisition by the vote of a majority of the Shares at a
meeting of the GSI Shareholders validly held for that purpose,
as required by Section 5.2(ii), below, in this Agreement) to a
dividend to be declared and paid by GSI to the GSI
Shareholders, before the Closing Date, in an amount not to
exceed one hundred percent (100%) of all earnings (i.e., the
net income from the consolidated operations of GSI and Guthrie
Bank) realized by GSI from and after September 30, 1999, and
up to and until the Closing Date, as determined on a per share
basis by dividing the total amount of said earnings from and
after September 30, 1999 to the Closing Date, by the total
number of issued and outstanding Shares. For this purpose only
the net income of GSI, on a consolidated basis, shall be
calculated without regard to, or deduction of, the
out-of-pocket expenses incurred by GSI or Guthrie Bank which
are solely attributable to this Agreement and the Acquisition
contemplated hereunder.
1.1.2 In addition to the payment of the Purchase
Price, as defined above, the Buyer agrees as additional and material
consideration to GSI and Guthrie Bank to assume all of the liabilities
of GSI and Guthrie Bank on the Closing Date, including the liquidation
account maintained by Guthrie Bank with regard to its conversion from a
federal mutual savings bank to a federal stock savings bank.
1.1.3 The conversion ratio, i.e. the right to receive
cash in exchange for each share of the Common Stock, and for the Stock
Options shall be appropriately and proportionately adjusted in the
event of any stock dividend on, or stock split or stock combination of,
or any other change in the Common Stock based on a record date
occurring during the period from the date of this Agreement until
immediately before the Effective Time, such that the total amount of
the Purchase Price shall not be increased in any event by reason
thereof. No adjustment in the Purchase Price will be made for the
payment of any cash dividends which GSI is specifically authorized to
pay to the holders of its Common Stock during the term of this
Agreement pursuant to the provisions of Section 1.1.1(iv), above.
Section 1.2 Dissenting Shares. Notwithstanding anything in
this Agreement to the contrary, shares of Common Stock which are outstanding
immediately prior to the Effective Time and which are held by shareholders who
shall not have voted such shares in favor of the Acquisition and who shall have
delivered to GSI in a timely manner a written demand for appraisal of such
shares in accordance with the procedures provided for in the Oklahoma General
Corporation Act [18 O.S. 1991 (Supp. 1998), ss.1091] shall not be converted into
the consideration provided for under Section 1.1, above, at the Effective Time
(the "Dissenting Shares"), but, instead, the holders thereof shall be entitled
to the payment of the appraised value of such shares in accordance with the said
provisions of the Oklahoma General Corporation Act; provided, however, in the
event a shareholder fails to perfect, withdraws, does not comply with
the procedure required by the provisions of the Oklahoma General Corporation
Act, or otherwise loses his right to appraisal and payment for his shares of
Common Stock, pursuant to the applicable provisions of the Oklahoma General
Corporation Act, each such Dissenting Share of Common Stock held by such
Dissenting GSI Shareholder shall be converted into and represent only the right
to receive the consideration for the share of Common Stock, as specified in
Section 1.1 above, upon surrender of the certificate or certificates so
representing the Dissenting Shares of Common Stock.
Section 1.3 Effect of the Acquisition. At the Effective Time,
Buyer shall become the owner of all of the issued and outstanding capital stock
of GSI and GSI shall become a wholly-owned subsidiary corporation of Buyer, all
without any further action, corporate or otherwise, on the part of Buyer or GSI,
Guthrie Bank, the Directors, or any of the GSI Shareholders. None of the GSI
Shareholders shall have any further rights in their respective shares of Common
Stock as of the Effective Time and all such shares shall be automatically
converted into the right to receive the consideration set forth herein, subject
only to the Appraisal Rights accorded to the Dissenting Shares as set forth and
described in Section 1.2 above.
Section 1.4 Certificates of Incorporation. The Charter or the
Articles of Association of the Buyer, as the case may be, and the Certificate of
Incorporation of GSI, as in effect immediately prior to the Effective Time,
shall remain in effect thereafter, unless and until amended as provided by
applicable law. The Charter of Guthrie Bank, as in effect immediately prior to
the Effective Time, shall remain in effect thereafter, unless and until amended
by applicable law.
Section 1.5 By-Laws. The respective By-Laws of the Buyer, of
GSI, and of Guthrie Bank, as in effect immediately prior to the Effective Time,
shall remain in effect thereafter, unless and until amended or repealed as
provided by the By-Laws, the respective Articles of Association, Certificate of
Incorporation or Charter and applicable law.
Section 1.6 GSI Directors and Officers. Subject to their
respective rights under any existing employment agreements by and between
Guthrie Bank and any officer of Guthrie Bank, (provided such agreements have
been fully disclosed to Buyer as of the date of this Agreement), all directors
and officers of GSI and of Guthrie Bank, respectively, shall tender their
resignation from all positions held by them as an officer or director of either
GSI or Guthrie Bank (but not as an employee) at the Effective Time. New officers
and directors of GSI and Guthrie Bank, respectively, shall be designated by
Buyer at the Effective Time. The directors and officers of Buyer immediately
prior to the Effective Time shall remain as the directors and officers of Buyer
after the Effective Time.
Section 1.7 Continued Employment of Xxxxxxx X. Xxxxxxxxxx;
Payment of Termination Fee for Cancellation of His Existing Employment and
Severance Agreements.
1.7.1 Xxxxxxx X. Xxxxxxxxxx ("Xxxxxxxxxx") currently
serves as
President and Chief Executive Officer of both GSI and Guthrie Bank. The
terms and conditions of Xxxxxxxxxx'x employment by Guthrie Bank in that
capacity are expressly set forth in that certain Amended and Restated
Employment Agreement entered into by and between Xxxxxxxxxx and Guthrie
Bank dated March 17, 1998 ("Guthrie Bank- Xxxxxxxxxx Employment
Agreement"). In addition, Xxxxxxxxxx has made and entered into that
certain Change in Control Severance Agreement with GSI dated February
11, 1997 ("Xxxxxxxxxx Xxxxxxxxx Agreement"). Buyer is desirous of
retaining Xxxxxxxxxx'x expertise, knowledge, experience and strong
community relationship and ties with regard to the operation of Guthrie
Bank for the benefit of Buyer after consummation of the Acquisition.
Accordingly, Buyer agrees to employ Xxxxxxxxxx at its Guthrie, Oklahoma
branch for a period of not less than twelve (12) months from and after
the Closing Date so that he can work with Buyer in smoothing the
transition to its new ownership, management and control of Guthrie
Bank, both with the existing employees and customers of Guthrie Bank
and with the community of Guthrie, Oklahoma. Xxxxxxxxxx shall, during
such period of time, be a full-time employee of Buyer working the
normal work day required of all of Buyer's employees and performing
such specific duties, holding such position(s) and serving as such
officer(s) of Buyer, as Buyer's Board of Directors shall specify and
direct, in its sole discretion, from and after the Closing Date
hereunder, from time to time. During this said twelve (12) month period
of employment of Xxxxxxxxxx by Buyer, Buyer shall pay to Xxxxxxxxxx as
salary for his said services to Buyer after Closing the sum of Five
Thousand and No/100 Dollars ($5,000.00) per month, subject to normal
withholding for federal and state income taxes and social security and
employment taxes. In addition, Xxxxxxxxxx shall be entitled to receive
during this said twelve (12) month period of employment by Buyer all of
the same employee benefits provided to the Buyer's other senior
management employees by Buyer including, without limitation, the
provision of one (1) automobile for Xxxxxxxxxx'x use during said
employment, all medical coverage, health plans, pension, profit-sharing
or other retirement benefits normally provided by Buyer to its senior
management employees; provided, however, that Xxxxxxxxxx shall not be
entitled to participate in, or be granted any stock options by Buyer,
or its parent company, LFC, pursuant to any existing stock option plan
of LFC by reason of his employment by Buyer for the twelve (12) months
immediately following the Closing Date. Xxxxxxxxxx, as a condition
precedent to Buyer being obligated to consummate this Agreement, must
(i) accept employment by Buyer for the twelve (12) month period of time
immediately following the Closing Date upon the foregoing terms and
conditions, and in consideration of the payment to him by Buyer of the
foregoing salary and benefits; and (ii) execute and enter into an
Employment Agreement with Buyer on the Closing Date containing those
terms and conditions substantially in the form of that certain Local
Oklahoma-Xxxxxxxxxx Employment Agreement, a copy of which is attached
hereto as Exhibit 1.7 and by this reference thereto made an integral
part hereof ("Local Oklahoma- Xxxxxxxxxx Employment Agreement"). At the
end of the twelve (12) month guaranteed period of employment of
Xxxxxxxxxx by Buyer pursuant hereto, the Local Oklahoma- Xxxxxxxxxx
Employment Agreement shall terminate and Xxxxxxxxxx can continue to be
employed thereafter by Buyer, or not, as Buyer then sees fit, on such
terms and conditions and in such capacity as Buyer then deems
appropriate, in its sole and absolute
discretion, at will. Upon termination of the Local Oklahoma-Xxxxxxxxxx
Employment Agreement, Xxxxxxxxxx will have no further rights or
entitlements and Buyer will have no further obligations to Xxxxxxxxxx
with regard to his employment thereafter by Buyer, whether under this
Agreement, the Local Oklahoma-Xxxxxxxxxx Employment Agreement, or
otherwise.
1.7.2 At the same time, Buyer is desirous of
cancelling, terminating and fully abrogating the existing Guthrie
Bank-Xxxxxxxxxx Employment Agreement and Xxxxxxxxxx Xxxxxxxxx Agreement
on the Closing Date such that neither of those agreements will be an
ongoing obligation or liability of Buyer, GSI or Guthrie Bank,
respectively, after consummation of the Acquisition. Accordingly, GSI
or Guthrie Bank shall pay to Xxxxxxxxxx on the Closing Date a one-time
lump sum payment in the sum of One Hundred Eighty-Seven Thousand Two
Hundred and No/100 Dollars ($187,200.00) as payment in full and
complete settlement of any and all obligations, liabilities or amounts
owing, or that might be owing at any time thereafter, by GSI, Guthrie
Bank or Buyer to Xxxxxxxxxx under the Guthrie Bank-Xxxxxxxxxx
Employment Agreement or Xxxxxxxxxx Xxxxxxxxx Agreement. Xxxxxxxxxx
will, as a condition precedent to Buyer's obligation to consummate this
Agreement, agree to accept a cash payment to him immediately prior to
the Effective Time from either GSI or Guthrie Bank in the sum of One
Hundred Eighty-Seven Thousand Two Hundred and No/100 Dollars
($187,200.00) as payment in full and complete satisfaction and
discharge of all obligations and liabilities which may be owing to him
at Closing, or at any future time, by Buyer, GSI or Guthrie Bank,
respectively, under the terms and conditions of the Guthrie
Bank-Xxxxxxxxxx Employment Agreement and the Xxxxxxxxxx Xxxxxxxxx
Agreement. As a condition precedent to being entitled to receive the
foregoing payment from GSI or Guthrie Bank at Closing, Xxxxxxxxxx will
execute and deliver to GSI, Guthrie Bank and Buyer in exchange therefor
a receipt and general release and discharge of all of his rights under
the Guthrie Bank-Xxxxxxxxxx Employment Agreement and the Xxxxxxxxxx
Severance Agreement, in form and substance mutually acceptable to GSI,
Guthrie Bank and Buyer, on the Closing Date.
1.8 Retention of GSI's and Guthrie Bank's Outside
Directors as Consultants to Buyer Post-Closing. GSI and Guthrie Bank
each have three (3) directors who are not officers or employees of GSI
or Guthrie Bank, i.e., outside directors, namely Xxxxx Xxxxxxx, A.R.
Xxxxxx, Jr., and Xx. Xxxxx X. Xxxxxxx (collectively, the "Outside
Directors"). After consummation of the Acquisition, Buyer is desirous
of retaining the services of each of the Outside Directors as a
consultant to Buyer in order to assure that they will be a positive
influence to promote Buyer's well-being and the growth of its business
in the City of Xxxxxxx, Xxxxx County, Oklahoma, and to otherwise assist
Buyer in a smooth transition to its new ownership, management and
control of Guthrie Bank after Closing, both with the continuing
employees and customers of Guthrie Bank and with the community of
Guthrie, in general. Each of the Outside Directors is a recognized
community leader in Guthrie and Xxxxx County, Oklahoma and will be able
to provide valuable consultation to Buyer as to maintaining and
expanding its community relationships and marketing its services in the
best and most effective way possible to
increase its presence in Guthrie. Each of the Outside Directors is
willing to provide such consulting services to Buyer after the Closing
and to provide consultation to Buyer on an ongoing basis thereafter
concerning the marketing, community activities and public relations of
Buyer in the Guthrie, Oklahoma area. Accordingly, Buyer hereby
covenants and agrees to retain each of the Outside Directors to serve
as consultants to Buyer for the foregoing purposes for a period of
three (3) years after the Closing and agrees to pay each of the Outside
Directors therefor an annual consulting fee in the amount of Nine
Thousand Six Hundred and No/100 Dollars ($9,600.00) per year, payable
quarterly each year for the three (3) years immediately following the
Closing Date, so long as such Outside Director continues to provide
such consulting to Buyer in accordance with the terms of the Consulting
Agreement, as defined below, to be entered into between them. As an
express condition precedent to Buyer being obligated to consummate this
Agreement, each of the Outside Directors will execute and deliver to
the Buyer on the Closing Date a Consulting Agreement, whereby each of
the Outside Directors will agree to serve as a consultant to Buyer for
the three (3) years immediately following the Closing Date and to
provide the consulting services and community relations described above
to Buyer on an ongoing basis during that time as the Buyer may
reasonably request, from time to time, and to be a positive force and
active promoter of Buyer's business in operating a branch in the
Guthrie, Oklahoma area during that period of time. It is not
contemplated that any of the Outside Directors will be designated a
director, or an advisory director, of Buyer after the Closing. None of
the Outside Directors will be deemed to be employees of Buyer by reason
of their serving as consultants to Buyer from and after the Closing
Date and thus they shall not be entitled to receive any of the benefits
which full-time employees of Buyer are ordinarily accorded by reason of
such employment, e.g., medical coverage and retirement benefits, etc.
Buyer and each of the Outside Directors will execute and enter into on
the Closing Date a Consulting Agreement containing the same terms and
conditions described above in this Section 1.8, substantially in the
form of that certain Consulting Agreement, a copy of which is attached
hereto as Exhibit 1.8 and by this reference made an integral part
hereof ("Consulting Agreement"). Sellers acknowledge and agree that,
other than the employment of Xxxxxxxxxx, on the terms described above
in Section 1.7, and the consultant fees to be paid to the Outside
Directors, as provided for in this Section 1.8, there are no other
agreements, whether written or oral, of Buyer with any other director,
officer, attorney or GSI Shareholder with regard to employment,
bonuses, benefits, consulting arrangements, or board, or Advisory Board
membership, of whatsoever kind or nature to occur after the
consummation of the Acquisition by reason thereof (other than the
assumption by Buyer on the Closing Date of the existing Amended and
Restated Employment Agreements granted to H. Xxxxxxx Xxxx, a Vice
President of Guthrie Bank ("Xxxx") and to Xxxxxxxx X. Xxxxxx, a Vice
President of Guthrie Bank ("Warner") by Guthrie Bank, both dated March
17, 1998, full and complete copies of which (together with any
amendments thereto) have previously been delivered by Guthrie Bank to
Buyer (hereinafter, respectively, the "Xxxx Employment Agreement" and
the "Warner Employment Agreement").
1.9 Guthrie Bank Employees. Unless otherwise expressly
provided herein,
Buyer shall have the right to terminate or to retain any of the
employees of Guthrie Bank after Closing, in its sole and absolute
discretion. Any employees of Guthrie Bank who are terminated from
employment by Buyer shall be subject to the appropriate treatment
accorded by Buyer's Severance Plan (a copy of which has previously been
provided to Sellers by Buyer) and not in accordance with any severance
policy maintained, or formerly maintained, by GSI or Guthrie Bank prior
to the Closing Date. Employees of Guthrie Bank who continue employment
with Buyer shall be immediately eligible for all employment benefit
plans maintained by Buyer for the benefit of its employees, including
group medical coverage, life insurance and disability coverage and
401(k) and retirement plans, to the same extent and on the same basis
accorded to any other employee of Buyer under the specific provisions
of each of those respective employment benefit plans. Those employees
and their dependents who were covered by the Xxxxxxx Bank medical plan
prior to the Closing Date and who become employees of Buyer thereafter,
will receive credit for time covered under the Xxxxxxx Bank medical
plan against the pre-existing condition clause in Buyer's group medical
coverage insurance policy pursuant to the specific provisions of that
policy. Any amounts accrued by the Xxxxxxx Bank employees who become
employees of Buyer after the Closing Date under the Xxxxxxx Bank
medical plan will be accrued towards the applicable deductible and
out-of-pocket amounts under Buyer's group medical insurance coverage
pursuant to the specific provisions of that plan.
Participation/coverage for such former Xxxxxxx Bank employees under the
Buyer's group medical insurance shall begin on the first day of the
month immediately following the Closing Date; provided, however Xxxxxxx
Bank shall pay for continuation of medical insurance coverage under its
existing medical plan for all of its employees through the last day of
the month in which the Closing Date occurs. Employees of Xxxxxxx Bank
whose employment is continued by Buyer shall not, however, be entitled
under the provisions of Buyer's retirement plans to receive credit
under Buyer's retirement plans for their years of prior service with
Xxxxxxx Bank or any of their other previous employers. There will be no
reduction in existing vacation or sick leave accruals of the employees
of Xxxxxxx Bank whose employment is continued by Buyer after Closing.
There will also be no reduction in the existing salary or wages of the
employees of Xxxxxxx Bank whose employment is continued by Buyer, after
Closing, by reason of the Closing, and such continuing employees will
continue to be paid at their then current salary and wages (i.e., in
the same amounts paid to them by Xxxxxxx Bank on the day prior to the
Closing Date), subject to Buyer's right to increase or decrease such
wages and salaries of such continued employees after the Closing in any
amount it sees fit, in its sole and absolute discretion, from time to
time, except as otherwise provided in the existing Xxxx or Warner
Employment Agreements, or in the Local Oklahoma-Xxxxxxxxxx Employment
Agreement to be entered into by Buyer and Xxxxxxxxxx on the Closing
Date.
1.10 GSI and Xxxxxxx Bank Officers and Directors Must Purchase
Their Own Extended Directors and Officers Liability Coverage Prior to
Closing. Buyer does not carry or maintain, and will not acquire prior
to the Closing Date, the type of Directors and Officers Liability
Insurance Policy ("D&O Policy") which would provide any coverage or
indemnification for the directors and officers of an institution or
bank which it is acquiring for the period prior to the consummation of
such acquisition. Accordingly, prior to the Closing Date, the
Directors, at their option, may authorize GSI or Xxxxxxx Bank, or both,
to obtain extended D&O Policy coverage under their existing D&O Policy,
for a period of time after the
Closing Date in order to provide such coverage to their officers and
directors for any occurrences or claims which are made against them in
that capacity for the period of time prior to the Closing Date,
provided, however, that the cost of obtaining any such extended D&O
Policy coverage by GSI or Xxxxxxx Bank shall not in any event exceed
the amount of Twenty-Five Thousand and No/100 Dollars ($25,000.00).
Section 1.11 Xxxxxxx Money Deposit. Upon the date this
Agreement is fully executed by Sellers and Buyer, Buyer shall make an xxxxxxx
money payment in the amount of Five Hundred Thousand and No/100 Dollars
($500,000.00) ("Xxxxxxx Money Deposit") into an escrow account to be established
pursuant to a written escrow agreement ("Escrow Agreement") by and among
Sellers, Buyer and the Trust Company of Oklahoma, an Oklahoma corporation with
trust powers ("Escrow Agent"), to be held by the Escrow Agent upon the following
terms and conditions:
1.11.1 The Xxxxxxx Money Deposit which has been
escrowed with the Escrow Agent, plus any interest earned thereon from
the date of the Escrow Agreement until the date of distribution of the
escrow fund in accordance with the terms and conditions of the Escrow
Agreement, shall be paid by the Escrow Agent to Buyer in immediately
available funds on the date any of the following events first occurs:
(a) This Agreement is terminated by either
Buyer or GSI for any reason upon the terms and conditions and
in accordance with the procedures set forth and described in
Section 7.1 through Section 7.5 of Article VII of this
Agreement; or
(b) The Acquisition is consummated on the
Closing Date in accordance with the terms and conditions of
the Agreement and GSI is acquired by Buyer in accordance
herewith.
1.11.2 The Xxxxxxx Money Deposit escrowed with the
Escrow Agent pursuant to the Escrow Agreement, plus any interest
accrued thereon from the date of the Escrow Agreement until the date of
the distribution of the escrow fund in accordance with the terms and
conditions of the Escrow Agreement, shall be paid by the Escrow Agent
to GSI in
immediately available funds, upon the receipt by the Escrow Agent from
Buyer and GSI of a joint certification that Buyer has failed to
consummate the Acquisition in accordance with the terms and conditions
of this Agreement even though (i) all of the conditions to the
obligations of Buyer to complete and consummate the Acquisition as set
forth in Article V of the Agreement have been fully satisfied, and (ii)
Sellers are not in default in any material respect under the Agreement.
If Buyer and Seller shall so jointly certify to the Escrow Agent in
writing that Buyer has failed to consummate the Acquisition under the
above circumstances, then, Buyer shall forfeit all rights to the
escrowed funds and the Escrow Agent shall forthwith pay to GSI the full
amount of the Xxxxxxx Money Deposit, together with any and all interest
thereon to the date of such payment, the same to be
retained the Sellers as liquidated damages and not as a penalty for
such default or breach by Buyer under this Agreement. This Agreement
shall, in such event, be forthwith cancelled and be of no further force
and effect between the parties hereto and Buyer shall, in such event,
have no further obligations or liability to Sellers for damages. Buyer
and Sellers hereby agree that the amount of said Xxxxxxx Money Deposit
which is being escrowed pursuant to this Agreement is a reasonable
amount for liquidated damages in the event of the default, breach or
failure to consummate this Agreement by Buyer in the circumstances
described above in this Section 1.11.2 and that it would be impractical
and extremely difficult to determine the actual amount of damages
resulting from such breach by Buyer under such circumstances.
1.11.3 The Escrow Agent shall invest the funds
escrowed with it by Buyer pursuant to this Section 1.11 in accordance
with the written instructions to be given by Buyer to the Escrow Agent
on the date the Escrow Agreement is executed.
1.11.4 All fees charged the Escrow Agent for its
services as such in accordance with the provisions of this Section
shall be promptly paid when due by Buyer.
1.11.5 Such other terms and conditions as are
mutually acceptable to Buyer, Sellers and the Escrow Agent.
1.11.6 Buyer, Sellers and the Escrow Agent will
execute and enter into a certain Escrow Agreement containing the terms
set forth and described above in this Section 1.11 substantially in the
form of that certain Escrow Agreement which is attached to this
Agreement as Exhibit 1.11 hereto, and by this reference thereto made an
integral part hereof. The Escrow Agreement shall be executed and
delivered and the Xxxxxxx Money Deposit paid on the date when this
Agreement is fully executed by Sellers and Buyer.
1.11.7 Any provision of this Section 1.11 to the
contrary notwithstanding, neither Buyer nor Sellers shall be deemed to
have waived any right or remedies, whether at law or in equity, which
either of them may have to seek a judicial determination as to whether
any term or condition of this Section 1.11 and/or the said Escrow
Agreement, Exhibit 1.11 hereto, has been properly construed, applied,
satisfied or performed or to seek to enforce the provisions thereof.
Section 1.12 Closing. The consummation of the Acquisition
pursuant to this Agreement (the "Closing") shall take place on the Closing Date,
provided all of the conditions precedent to the Parties' obligations under this
Agreement as set forth in Articles V and VI herein have been fully performed and
satisfied in accordance with this Agreement. The Closing shall be effected on
the Closing Date at the offices of Buyer in Oklahoma City, Oklahoma, or at such
other place as the Parties hereto may mutually agree, at 10:00 a.m., Central
Time. At the Closing on the Closing Date, Buyer shall act as the exchange agent
(the "Exchange Agent") to effect the exchange of the Common Stock in accordance
with the following procedures:
1.12.1 As of twenty (20) days prior to the Closing
Date, GSI shall submit written instructions to all of the GSI
Shareholders for submitting stock certificates to GSI on or before the
Closing Date, in form and substance reasonably acceptable to Buyer. All
Common Stock certificates delivered to GSI shall be appropriately
endorsed for transfer to Buyer, or have an executed stock power
pertaining to all of the shares covered by such certificate(s) attached
thereto authorizing the transfer of said shares to Buyer. All Common
Stock certificates which are so delivered to GSI on or before the
Closing Date shall be delivered to Buyer by GSI on the Closing Date in
exchange for the payment to the various shareholders by Buyer's
corporate check of an amount equal to the price per share of the
Purchase Price for the Common Stock, as determined in Section 1.1.1(i)
above, multiplied times the number of Shares being so surrendered.
Those checks will be so delivered to GSI for mailing or delivery to
those GSI Shareholders by GSI on the Closing Date. Each holder of a
stock certificate or certificates representing outstanding Shares of
Common Stock being converted as a result of the Acquisition pursuant to
this Agreement, at the Effective Time, who does not present their stock
certificate to GSI endorsed for transfer to Buyer, on or before the
Closing Date, shall, as soon after the Effective Time as possible,
surrender or deliver such certificate or certificates to the Exchange
Agent duly endorsed for transfer, or with an appropriate executed stock
power (or, if such certificate or certificates shall have been lost or
destroyed, shall deliver to the Exchange Agent an affidavit to such
effect and, if reasonably requested by the Exchange Agent, a bond or
indemnity agreement in form and substance satisfactory to the Exchange
Agent with regard thereto), and each such holder shall be entitled upon
such surrender (or upon such delivery), to receive from the Buyer in
exchange therefor by corporate check, an amount equal to the price per
share of the Purchase Price, as determined in the manner set forth
above in Section 1.1.1(i), at the Effective Time. The price received by
the selling GSI Shareholder whose shares are being redeemed shall be
equal to the Purchase Price per share for the Shares, as adjusted
pursuant to the provisions of Section 1.1.1, above, multiplied times
the number of Shares being surrendered for exchange pursuant hereto. No
interest will accrue on the cash payment to be made from and after the
Effective Time prior to the receipt by the Exchange Agent of the
certificate or certificates representing Shares being surrendered
pursuant to this provision to effectuate the conversion thereof.
1.12.2 Each holder of a Stock Option being acquired
pursuant to this Agreement, as a result of the Acquisition, shall, on
or before the Closing Date, execute and deliver to GSI for delivery by
GSI to Buyer on the Closing Date, that certain Cancellation and
Surrender of Qualified Stock Options Awarded Under Xxxxxxx Savings,
Inc. 1994 Stock Option Plan ("Cancellation and Surrender"),
substantially in the form of that certain Cancellation and Surrender, a
copy of which is attached to this Agreement as Exhibit 1.12 hereto, and
by this reference made an integral part hereof, thereby cancelling and
surrendering all of the Stock Options held by that holder in exchange
for the payment to that holder, on or before the Closing Date, by GSI's
corporate check, of an amount equal to the Purchase Price per share for
the shares of Common Stock so covered by such Stock Option, as
specified in Section 1.1.1, above, multiplied times the number of
shares of Common Stock which are subject to the Stock Options being so
surrendered.
No interest will accrue on the cash payment to be made by Buyer to the
holder of such Stock Options from and after the Effective Time prior to
the receipt by the Exchange Agent of the original, executed
Cancellation and Surrender from the holder of the Stock Options to
which payment is being so made.
1.12.3 All payments to GSI Shareholders made pursuant
to Subsection 1.12.1, above, shall be made by corporate check delivered
to the shareholder personally in exchange for the shareholder's share
certificates duly endorsed for transfer, or mailed to such shareholder
at the shareholder's address as shown on the stock records of GSI, or
to such other address a GSI Shareholder may specify in a written
instructions submitted with the shareholder's said stock certificates.
Notwithstanding the tender or non-tender of the stock certificates, all
Shares shall be and become void and shall cease to evidence any
ownership interests or rights in GSI, Xxxxxxx Bank or Buyer on the
Closing Date having been converted pursuant to Oklahoma law to a right
to receive the cash payment expressly provided for in Subsection 1.1.1,
above. Notwithstanding anything to the contrary in this Agreement, this
Section 1.12 shall be construed as an agreement by Buyer as to which
the GSI Shareholders are intended to be third-party beneficiaries and
shall be enforceable by them, or by their respective personal
representatives and heirs.
Section 1.13 Closing Date Deliveries by Buyer. At the Closing,
Buyer shall deliver to GSI and Xxxxxxx Bank the following:
1.13.1 Evidence in a form satisfactory to GSI and the
Xxxxxxx Bank and their counsel that all requisite federal and state
regulatory approvals have been obtained to authorize the Acquisition of
GSI by Buyer and the concomitant acquisition of Xxxxxxx Bank by Buyer
and the subsequent merger of Xxxxxxx Bank with and into Buyer with
Buyer to be the surviving bank;
1.13.2 The payment of the Purchase Price by Buyer in
the manner and at the times required under the provisions of this
Article I, above;
1.13.3 A copy of Buyer's Board of Directors'
Resolutions as represented and required of the Buyer under the
provisions of Section 3.2 of the Agreement, below;
1.13.4 The Buyer's Closing Certificate, as
hereinafter defined, and required to be provided in Section 6.4 of this
Agreement, executed by the President of Buyer;
1.13.5 Execute and file the Certificate of
Acquisition with the Oklahoma Secretary of State to evidence the
consummation of the Acquisition pursuant hereto as required by the
provisions of 18 O.S. 1991, ss.1090.1;
1.13.6 An opinion of counsel for Buyer, substantially
in the form of Buyer's Opinion of Counsel which is attached to this
Agreement as Exhibit 1.13.6 and by this reference thereto made an
integral part hereof, in final form approved by Sellers'
counsel prior to the execution thereof by Buyer's counsel;
1.13.7 The original, executed Local Oklahoma-
Xxxxxxxxxx Employment Agreement, duly executed by Buyer, substantially
in the form which is Exhibit 1.7 to this Agreement.
1.13.8 An original, executed Consulting Agreement for
each of the Outside Directors of GSI, duly executed by Buyer,
substantially in the form which is Exhibit 1.8 to this Agreement.
Section 1.14 Closing Date Deliveries by Sellers and the GSI
Shareholders. At the Closing, Sellers and the GSI Shareholders shall deliver to
the Buyer the following respective items, as stated below:
1.14.1 Closing Certificate of GSI and Xxxxxxx Bank,
as required to be provided in Section 5.4 of this Agreement, duly
executed by the President of GSI and by the President and by the Chief
Financial Officer of Xxxxxxx Bank;
1.14.2 A certified copy of the Resolutions of the GSI
Board of Directors, of the GSI Shareholders and of the Board of
Directors and Shareholders of Xxxxxxx Bank, respectively, as required
and represented under the provisions of Sections 2.1, 2.2 and 2.10,
respectively, of this Agreement;
1.14.3 The share certificates representing all of the
issued and outstanding Shares, duly endorsed for transfer to the Buyer
by each of the GSI Shareholders who have not dissented to the
Acquisition and who have elected to deliver their Shares to GSI on or
before the Closing Date, as to their respective stock certificates, or
accompanied by stock powers duly executed for transfer to Buyer by each
of the GSI Shareholders as to their said, respective stock
certificates;
1.14.4 The original, executed Cancellation and
Surrender substantially in the form which is Exhibit 1.12 hereto, from
each holder of a Stock Option as to all of that holder's respective
Stock Options being acquired by Buyer at Closing obtained in exchange
for the payment made to the holder thereof by GSI of the applicable
portion of the Purchase Price, as specifically provided in Section
1.1.1, above.
1.14.5 Copies certified by the applicable government
agency of the Charter, Certificate of Incorporation and Bylaws of GSI,
Xxxxxxx Bank, as required to be provided by GSI and Xxxxxxx Bank to
Buyer pursuant to Sections 2.1 and 2.2, respectively, of this
Agreement;
1.14.6 All stock certificate(s) representing all of
the issued and outstanding Shares of Xxxxxxx Bank Stock duly endorsed
for transfer, in such manner as Buyer may elect, by GSI, or accompanied
by stock powers duly executed by GSI for transfer of all of the issued
and outstanding Xxxxxxx Bank Stock to Buyer;
1.14.7 Copies of all insurance policies required to
be provided by GSI to Buyer pursuant to Section 2.23 of this Agreement;
1.14.8 The original, executed resignations, in form
satisfactory to Buyer, of all of the members of the Board of Directors
and all Officers of GSI and Xxxxxxx Bank, respectively, and of any
subsidiary corporations of either of them from their respective office
or position on the Board of Directors held by them with regard to GSI,
Xxxxxxx Bank and/or any of their subsidiary corporations, respectively;
1.14.9 Opinion of counsel for GSI and Xxxxxxx Bank,
substantially in the form of GSI's Opinion of Counsel which is attached
to this Agreement as Exhibit 1.14.9 and by this reference thereto made
an integral part hereof, in final form approved by Buyer's counsel
prior to the execution thereof by GSI's counsel;
1.14.10 Original, executed copies of the Releases
substantially in the form of Exhibit 1.14.10, which is attached to this
Agreement and by this reference thereto made an integral part hereof,
shall be delivered to Buyer, executed by all of the Directors and all
of the executive officers of GSI and of Xxxxxxx Bank, respectively
(collectively, the "Releases");
1.14.11 GSI shall execute and deliver to Buyer the
Certificate of Acquisition to be filed with the Oklahoma Secretary of
State to evidence the consummation of the Acquisition pursuant hereto
as required by the provisions of 18 O.S. 1991, ss.1090.1;
1.14.12 Evidence in form and substance satisfactory
to Buyer and GSI that the Xxxxxxx Federal Savings Bank Employee Stock
Ownership Plan and Trust ("Xxxxxxx Bank ESOP") will be completely
terminated on or before the Closing Date in compliance with all
applicable laws and regulations and the terms of the Xxxxxxx Bank ESOP
and that neither GSI, Xxxxxxx Bank nor Buyer will have any continuing
liability or responsibility for the operation or maintenance of the
Xxxxxxx Bank ESOP from and after the Closing Date;
1.14.13 Evidence in form and substance satisfactory
to Buyer that the Xxxxxxx Federal Savings Bank 401(k) Plan and Trust
("Xxxxxxx Bank 401(k) Plan") will be completely terminated on or before
the Closing Date in compliance with all applicable laws and regulations
and the terms of the Xxxxxxx Bank 401(k) Plan and that neither GSI,
Xxxxxxx Bank nor Buyer will have any continuing liability or
responsibility for the operation or maintenance of the Xxxxxxx Bank
401(k) Plan from and after the Closing Date.
1.14.14 Evidence in form and substance satisfactory
to Buyer that the Xxxxxxx Federal Savings Bank Management Stock Bonus
Plan and Trust ("Xxxxxxx Bank Management Stock Bonus Plan") will be
completely terminated on or before the Closing Date in compliance with
all applicable laws and regulations and the terms of the Xxxxxxx
Bank Management Stock Bonus Plan and that neither GSI, Xxxxxxx Bank nor
Buyer will have any continuing liability or responsibility for the
operation or maintenance of the Xxxxxxx Bank Management Stock Bonus
Plan from and after the Closing Date.
1.14.15 If Buyer so elects, in its sole discretion,
to obtain one, the evaluation of pension benefit consultants selected
by Buyer, at its sole expense, rendering its evaluation to Buyer that
each of the (i) Xxxxxxx Bank ESOP; (ii) Xxxxxxx Bank 401(k) Plan, and
(iii) the Xxxxxxx Bank Management Stock Bonus Plan, were properly and
validly established, operated, maintained in accordance with each of
those respective plans and that the ESOP and each of said plans are
being terminated, respectively, in accordance with all applicable laws
and regulations and that such consultant does not know, or have reason
to believe, that Buyer will incur any material tax liability, or any
other material liability of any other kind or nature, with regard to
each of the (i) Xxxxxxx Bank ESOP; (ii) Xxxxxxx Bank 401(k) Plan, and
(iii) the Xxxxxxx Bank Management Stock Bonus Plan, other than (i)
those liabilities which are ordinarily and customarily incurred in the
termination of such plans; (ii) the amounts reflected as a liability
therefor on the most recently available Financial Statements of GSI, as
that term is defined below; and (iii) any amounts which have been
disclosed by the Sellers on Exhibit 5.7, which is attached hereto, as
described and defined below in Section 5.7.
1.14.16 The payment in full by the Xxxxxxx Bank ESOP
to GSI or Xxxxxxx Bank, as the case may be, on the Closing Date of all
amounts then owing by the Xxxxxxx Bank ESOP to GSI or Xxxxxxx Bank to
include, without limitation, under that certain Promissory Note in the
original principal amount of Four Hundred Twelve Thousand One Hundred
and No/100 Dollars ($412,100.00), dated October 12, 1994, which was
made, executed and delivered by the Trustees of the Xxxxxxx Bank ESOP
to GSI on that date ("ESOP Note"); provided that the Buyer has made
payment to the Xxxxxxx Bank ESOP in full for all Shares of GSI Common
Stock owned by the Xxxxxxx Bank ESOP which are delivered to Buyer, duly
endorsed for transfer, on the Closing Date by GSI.
1.14.17 Sellers shall use their best efforts to
obtain and deliver to Buyer, on or before the Closing Date, an
original, executed cancellation, surrender and release from Xxxx and
Warner, respectively, of all of their rights and entitlements under
their respective Severance Agreements with GSI and an original,
executed amendment to their respective employment agreements with
Xxxxxxx Bank making the changes and modifications to those employment
agreements, which are specified in Section 4.12, below, otherwise to
remain in full force and effect as originally stated;
1.14.18 The original, executed Local
Oklahoma-Xxxxxxxxxx Employment Agreement duly executed by Xxxxxxxxxx,
substantially in the form which is Exhibit 1.7 hereto, and an original,
executed receipt and release from Xxxxxxxxxx (in form and substance
satisfactory to Buyer) acknowledging his receipt from GSI or Xxxxxxx
Bank of the payment to him on the Closing Date of the sum of
$187,200.00 pursuant to the terms and conditions of Section 1.7, above,
and his resultant complete release and discharge of any and all rights
he had, had or may thereafter have had under either the
Xxxxxxx Bank-Xxxxxxxxxx Employment Agreement or the Xxxxxxxxxx
Severance Agreement.
1.14.19 An original, executed Consulting Agreement
duly executed by each of the Outside Directors of GSI substantially in
the form which is Exhibit 1.8 hereto.
1.14.20 Such other documents, assignments, transfers
or officers' certificates as Buyer may deem reasonable and necessary in
order to fully effectuate the transaction contemplated by this
Agreement under the circumstances.
Section 1.15 Effective Time of the Acquisition. The
Acquisition shall become effective at 5:00 p.m., Central Time, on the date when
the last of the following actions shall have been completed:
1.15.1 The requisite approval by the GSI Shareholders
has been obtained and all necessary orders, consents and approvals
shall have been entered by any applicable regulatory authority having
jurisdiction over any of the Parties, to include, without limitation,
the Federal Deposit Insurance Corporation ("FDIC"), the Federal Reserve
Board ("FRB"), the OTS and the Comptroller of the Currency ("OCC"),
granting consent, authorization or approval as necessary to consummate
the transactions contemplated by this Agreement, without the imposition
of any condition or conditions which in the reasonable opinion of Buyer
or of GSI are unduly burdensome and all applicable waiting periods have
expired and all required notices have been published;
1.15.2 All of the conditions precedent to Buyer's
obligations to complete the Acquisition as set forth in Article V of
this Agreement, below, shall have been completely satisfied or
expressly waived in writing by Buyer;
1.15.3 All of the conditions precedent to the
obligations of GSI and Xxxxxxx Bank to complete the Acquisition as set
forth in Article VI of this Agreement, below, shall have been
completely satisfied or expressly waived in writing by GSI;
1.15.4 A Certificate of Acquisition will have been
executed by Buyer and GSI, duly acknowledged and filed with the
Secretary of State of Oklahoma in accordance with the provisions of
Section 1090.1 of the Oklahoma General Corporation Act, which shall be
done five (5) business days after Subsections 1.15.1 through 1.15.3,
above, have been satisfied, unless the Parties mutually agree to a
different date. The Certificate of Acquisition shall specify the
"Effective Time" of the Acquisition. In the event that Buyer and GSI
fail to specify the date and time of the Effective Time in the
Certificate of Acquisition, the Acquisition shall become effective upon
(and the Effective Time will be) the time of the filing of the said
Certificate of Acquisition with the Secretary of State of Oklahoma.
The time when the Acquisition shall become effective, as defined by this Section
1.15, is herein
called the "Effective Time" and the date upon which the Effective Time occurs
shall be hereinafter sometimes referred to as the "Closing Date" hereunder. The
stock transfer books of GSI shall be closed on the Closing Date and no transfer
of Common Stock by the GSI Shareholders shall be made thereafter by them, except
to Buyer pursuant to the Acquisition.
Section 1.16 Liquidation Account. The liquidation account
established by Xxxxxxx Bank pursuant to the plan of conversion adopted by it in
connection with its conversion from a mutual federal savings bank to a stock
savings bank shall, to the extent required by applicable law, continue to be
maintained by Buyer after the Acquisition for the benefit of those persons and
entities who were savings account holders of Xxxxxxx Bank on the eligibility and
supplemental eligibility record dates for such conversion and who continue, from
time to time, to have rights therein.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
OF GSI AND XXXXXXX BANK
-----------------------
GSI and Xxxxxxx Bank do each hereby specifically covenant and
agree to prepare and deliver to Buyer, on or before the date of this Agreement,
complete and correct copies of each of the Exhibits required to be provided to
Buyer by the terms and provisions of this Article II, below, namely, Exhibits
2.3, 2.6-2.12, 2.15-2.16, 2.18, 2.20-2.24 and 2.30. GSI and Xxxxxxx Bank also do
each hereby, respectively, represent and warrant to the Buyer, as of the date of
this Agreement and as of the Closing Date hereunder, as follows:
Section 2.1 Organization and Standing of GSI. GSI is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Oklahoma, and has all requisite power and authority (corporate
and other), and is duly qualified and licensed and possess all licenses,
franchises, permits and other governmental authorizations necessary to own,
lease and operate its assets and properties and to conduct its business as now
being conducted, including, without limitation, the full power and authority for
GSI to own all of the issued and outstanding capital stock of Xxxxxxx Bank and
for GSI to enter into and perform its obligations under this Agreement and the
transactions contemplated hereby. GSI is duly licensed or qualified to do
business and is in good standing in each jurisdiction in which its ownership or
leasing of property or the conduct of its business requires such licensing or
qualification, except where the failure to be so licensed, qualified or in good
standing would not have a material adverse effect on the financial condition,
operations, business or prospects of GSI or Xxxxxxx Bank, respectively, either
individually, or taken as a whole. GSI is duly registered as a unitary bank
holding company with the OTS pursuant to applicable laws and regulations. GSI
does not own any equity interest, directly or indirectly, in any corporation,
limited liability company, partnership, joint venture, firm or other entity, of
any kind or nature, except for Xxxxxxx Bank. All approvals for the Acquisition
required to be obtained from the Board of Directors or the Shareholders of GSI
under its Certificates of Incorporation or By-Laws, or under applicable law have
been obtained or will have been obtained prior to the Closing Date. GSI has
delivered to Buyer complete and correct copies of the Certificate of
Incorporation of GSI, as certified to by the Secretary of State of Oklahoma and
of the By-Laws of GSI, as certified to by the Secretary or
Assistant Secretary of GSI, as in effect on the Closing Date.
Section 2.2 Organization and Standing of Xxxxxxx Bank. Xxxxxxx
Bank is a federally chartered stock savings bank duly organized, validly
existing and with a corporate existence under federal laws and with the OTS, its
regulator. Xxxxxxx Bank has the full power and authority, corporate and
otherwise, and is duly qualified and licensed and possesses all licenses,
franchises, permits and other governmental authorizations necessary to own,
lease and operate its assets and properties and to conduct its business as now
being conducted, including, without limitation, the full power and authority to
operate Xxxxxxx Bank and to enter into and perform each of its obligations under
this Agreement and the transactions contemplated hereby following the amendment
which Sellers will make to the Charter of Xxxxxxx Bank, prior to the Closing
Date, to delete Section 8A thereof in its entirety. All approvals, if any,
required to be obtained from the Board of Directors or the Shareholders of
Xxxxxxx Bank under its Charter or By-Laws, or by applicable law, have been
obtained, or will be obtained, on or before the Closing Date. Xxxxxxx Bank is
duly licensed or qualified to do business and is in good standing in each
jurisdiction in which its ownership or leasing of property or the conduct of its
business requires such qualification, except where the failure to be so
licensed, qualified or in good standing would not have a material adverse effect
on the financial condition, operations, business or prospects of Xxxxxxx Bank,
either individually or taken as a whole. Xxxxxxx Bank does not own any equity
interest, directly or indirectly, in any corporation, limited liability company,
partnership, joint venture, firm or other entity of any kind or nature. The
deposit accounts of Xxxxxxx Bank are insured by the Savings Association
Insurance Fund to the maximum extent permitted by the Federal Deposit Insurance
Act ("FDIA"), and Xxxxxxx Bank has paid all premiums and assessments required to
be paid by it by the provisions of the FDIA and the regulations thereunder.
Xxxxxxx Bank is a member in good standing of the Federal Deposit Insurance
Corporation ("FDIC") and of the Federal Home Loan Bank. Xxxxxxx Bank has
delivered to Buyer complete and correct copies of the Charter of Xxxxxxx Bank,
as certified to by the OTS and the By-Laws of Xxxxxxx Bank, as certified to by
the Secretary or Assistant Secretary of Xxxxxxx Bank.
Section 2.3 Capitalization of GSI and Xxxxxxx Bank. The
authorized capital stock of GSI consists of Four Million (4,000,000) shares
consisting of (i) Three Million (3,000,000) shares of common stock, par value
$0.01 per share ("Common Stock"), of which Four Hundred Two Thousand Two Hundred
Fifty-Seven (402,257) shares are issued and outstanding and are owned by the
Shareholders listed on Exhibit 2.3.1 to this Agreement, which is attached hereto
and by this reference made a part hereof ("GSI Shareholders"), in the amounts
reflected thereon opposite the name of each such Shareholder, and of (ii) One
Million (1,000,000) shares of serial preferred stock, par value $0.01 per share,
none of which are issued and outstanding ("Preferred Stock"). One Hundred Eight
Thousand Seven Hundred Forty-Four (108,744) shares of the Common Stock of GSI
are held in its treasury. Ten Thousand Nine Hundred Forty-Two (10,942) shares of
GSI Common Stock are held by the Xxxxxxx Bank Management Stock Bonus Plan as
"Plan Shares," of which Four Thousand One Hundred Twenty-Four (4,124) have not
been awarded to any employee or non-employee director of GSI or Xxxxxxx Bank and
thus are not included in the total issued and outstanding shares of GSI Common
Stock stated above. No share of the capital stock of GSI has been reserved for
any
purpose other than the Stock Options. The authorized capital of Xxxxxxx Bank
consists of (i) Three Million (3,000,000) shares of common stock, par value
$0.01 per share ("Xxxxxxx Bank Stock"), of which One Hundred Thousand (100,000)
shares are issued and outstanding and are owned by GSI, and (ii) One Million
(1,000,000) shares of serial preferred stock, no par value per share, of which
none is issued and outstanding. None of the capital stock of Xxxxxxx Bank is
held in its treasury. No share of the capital stock of Xxxxxxx Bank has been
reserved for any purpose. All of the issued and outstanding shares of the
capital stock of GSI and of Xxxxxxx Bank, respectively, are duly and validly
authorized and issued, fully paid and non-assessable and have not been issued in
violation of any pre-emptive rights. There are no outstanding securities
convertible into or exchangeable for the capital stock of GSI, or of Xxxxxxx
Bank, respectively, and there are no outstanding options, rights (pre-emptive or
otherwise), or warrants to purchase or to subscribe for any equity securities of
either GSI or Xxxxxxx Bank, respectively, except for the Stock Options, as
defined above, granted by GSI for the total amount of Forty-One Thousand Two
Hundred Six (41,206) shares of Common Stock granted to the ten (10) individuals
listed on Exhibit 2.3.2 to this Agreement, which is attached hereto and by this
reference made a part hereof ("Stock Option Holders"). There are no outstanding
agreements, arrangements, commitments or understandings of any kind affecting or
relating to the voting, issuance, purchase, redemption, repurchase or transfer
of the capital stock of either GSI or Xxxxxxx Bank, respectively, or any equity
securities of GSI or Xxxxxxx Bank, respectively, except as expressly provided
for and described in this Agreement. On the Closing Date, GSI will have good,
valid and marketable title to all of the issued and outstanding shares of
Xxxxxxx Bank Stock, free and clear of all mortgages, liens, pledges, charges,
claims, security interests, agreements, encumbrances and equities whatsoever,
with full right and authority to sell and transfer all of the Xxxxxxx Bank Stock
to Buyer. Xxxxxxx Bank has properly established and maintained a liquidation
account pursuant to the plan of conversion adopted by it in connection with its
conversion from a mutual federal savings bank to a stock savings bank, as
referenced above in Section 1.16, and has provided Buyer true and complete
copies of all records and information which it has in its possession or control
as to the operation or maintenance of its Liquidation Account prior to the date
of this Agreement.
Section 2.4 Trade Names. To the knowledge of Sellers, no other
person, firm or corporation is presently using or claiming, or has the right to
use or claim, any of the following trade names: "Xxxxxxx Savings, Inc." and/or
"Xxxxxxx Federal Savings Bank," or to any of the trademarks, logos or symbols
used by either GSI or Xxxxxxx Bank in conjunction with said trade names,
respectively. Neither GSI nor Xxxxxxx Bank has conferred any right or license to
use any of the aforesaid trade names, trademarks, logos, or symbols on any other
person, firm or corporation.
Section 2.5 Financial Statements. GSI and Xxxxxxx Bank have
separately delivered to Buyer and identified by reference to this Section 2.5,
each of the following financial statements: (i) the audited annual consolidated
financial statements of GSI and Xxxxxxx Bank (including a Balance Sheet and the
related Statements of Operations, Equity and Cash Flows, and the notes relating
thereto), as of and for the fiscal years ending March 31, 1996, March 31, 1997,
March 31, 1998, and March 31, 1999 (when and if available prior to the Closing
Date); (ii) the monthly unaudited financial statements of Xxxxxxx Bank
(including a Balance Sheet and related
Statements of Operations, Equity and Cash Flows, and the notes relating thereto)
prepared internally by Xxxxxxx Bank, as of and for the months ending September
30, 1998, January 31, 1999, and February 28, 1999; and (iii) the unaudited,
internal annual consolidated financial statements of GSI and Xxxxxxx Bank as of
and for the fiscal year ending March 31, 1999 (collectively, the "Financial
Statements"). The Financial Statements fairly present the consolidated financial
condition and results of operations of GSI and Xxxxxxx Bank, respectively, as of
the dates and for the periods indicated therein, were prepared in accordance
with generally accepted accounting principles consistently applied throughout
the periods involved, except as otherwise set forth therein, and in accordance
with the books and records of GSI and Xxxxxxx Bank, respectively. The books and
records of GSI and Xxxxxxx Bank, respectively, on the basis of which such
respective Financial Statements were prepared fully and fairly reflect all of
the transactions of GSI and Xxxxxxx Bank, respectively, and are complete and
correct in all material respects. Each of the books of account of GSI and
Xxxxxxx Bank, reflect, respectively, substantially all items of income and
expense, and substantially all of their respective assets, liabilities and
accruals, and reflect all material items of income and expense and all material
assets, liabilities and accruals, and are maintained in form and substance
adequate for preparing audited Financial Statements in accordance with generally
accepted accounting principles.
Section 2.6 Liabilities. Neither GSI nor Xxxxxxx Bank has any
indebtedness, obligation or liability, contingent or otherwise, and whether due
or to become due, which is required by generally accepted accounting principles
to be reflected in the Financial Statements, or which is material, except (i)
those reflected in the Financial Statements, (ii) those individual liabilities
subsequently incurred in the Ordinary Course of Business (as that term is
defined below in this Agreement), (iii) deposit accounts opened in the Ordinary
Course of Business of a type authorized by law, or (iv) those set forth in
Exhibit 2.6 to this Agreement. All deposit accounts and notes payable, and other
liabilities of either GSI or Xxxxxxx Bank, respectively, are current and not in
default.
Section 2.7 Taxes. To the best of their respective knowledge
and belief, GSI and Xxxxxxx Bank have each duly filed with the appropriate
governmental agencies all tax reports and returns required to be filed by each
said entity, including, without limitation, all federal, state, and local
income, franchise, sales and property tax returns, complete and accurate copies
of which have previously been provided to Buyer and each has duly paid in full,
or made adequate provision for the payment of, all taxes and other charges due
or claimed to be due from it by federal, state or local taxing authorities; and
there are no federal, state or local tax liens upon any of the property or
assets of either GSI or Xxxxxxx Bank, respectively. All of such reports and
returns are true, correct, and complete in all material respects. The federal
income tax returns of GSI and Xxxxxxx Bank, respectively, have been examined by
the federal tax authorities or closed by applicable statute and satisfied for
all periods to and including the fiscal year ended March 31, 1998; all
deficiencies asserted as a result of such examinations have been paid or finally
settled, and no state of facts exists or has existed which might constitute
grounds for the assessment of any further tax liability with respect to the
periods which have not been audited by the federal, state or local taxing
authorities. All of the respective tax liabilities of GSI and Xxxxxxx Bank for
the current year to date and all prior years, whether or not they have become
due and payable, have been paid in full or adequately reserved for, and to the
extent tax liabilities have accrued but
not become payable, they are properly reflected on the respective books of GSI
or Xxxxxxx Bank or in the Financial Statements. No income, franchise, sales or
property tax return of either GSI or Xxxxxxx Bank is currently being audited by
the Internal Revenue Service or any other taxing authority having jurisdiction
over any of them. Except as set forth on Exhibit 2.7 hereto, neither GSI nor
Xxxxxxx Bank is a party to, or bound by, or have any obligation under any tax
sharing or similar Agreement. There are no outstanding agreements or waivers
extending the statutory period of limitation applicable to any state or federal
income tax return of either GSI or Xxxxxxx Bank, respectively, for any period.
Neither GSI nor Xxxxxxx Bank is a party to any action or proceeding by any
governmental authority for assessment or collection of taxes, and no claim for
assessment or collection of taxes by any governmental authority has been
asserted against either GSI or Xxxxxxx Bank. All federal or state income taxes
that either GSI or Xxxxxxx Bank is or was required by applicable laws to
withhold or collect have been duly withheld or collected and, to the extent
required, have been paid to the proper governmental body or other person who is
entitled by law to receive such withholding.
Section 2.8 Property and Assets. Subject to Permitted Title
Exceptions, as that term is defined and described below in this Section, or as
otherwise indicated in Exhibit 2.8 hereto, GSI or Xxxxxxx Bank, respectively,
each have good and marketable title to all of their respective properties and
assets, whether real, personal, tangible or intangible, reflected in the
Financial Statements or subsequently acquired, free and clear of all liens,
charges, Encumbrances, as that term is defined below in this Section, and claims
of third parties or restrictions. Permitted Title Exceptions include (i) liens
for current real estate taxes or special assessments not yet delinquent, (ii)
utility, access and other easements and rights-of-way, restrictions and
exceptions, that will not materially interfere with the present use or
occupation of the real estate owned by GSI or Xxxxxxx Bank, respectively, as the
case may be, or impair the present business operations conducted thereon, (iii)
such minor defects, irregularities, encumbrances, easements, rights-of-way and
clouds on title as normally exist with respect to property similar in character
which do not materially impair the use of the premises affected thereby for the
purpose for which it is presently being used, and (iv) any building, zoning or
subdivision ordinances applicable to the premises, provided the same have not
been violated. Exhibit 2.8 lists and describes all real property and all
interests in real property (other than mortgages and deeds of trust) owned by
GSI or Xxxxxxx Bank, respectively, separately identified as to the property and
assets owned by each of said entities, as of the date hereof, including, but not
limited to, all leaseholds, options to purchase real property and leases,
including without limitation, equipment leases, under which either GSI or
Xxxxxxx Bank, respectively, is the lessor or the lessee. Subject to the
Permitted Title Exceptions, (A) GSI and Xxxxxxx Bank, respectively, each enjoys
peaceful and undisturbed possession under all leases for the use of real
property and all equipment leases under which it is the lessee; (B) all of such
leases are in full force and effect and neither GSI nor Xxxxxxx Bank is in
default in any regard under any such lease; and (C) except as disclosed in
Exhibit 2.8, all personal property and assets and improvements on real property
owned and currently used by either GSI or Xxxxxxx Bank and material to their
respective businesses are in good operating condition and repair, normal wear
and tear excepted. For purposes of this Agreement, the term "Encumbrance" shall
mean any charge, claim, community property interest, condition, equitable
interest, lien, option, pledge, security interest, right of first refusal, or
restriction of any kind, including any restriction on use, voting, transfer,
receipt of
income, or exercise of any other attribute of ownership.
Section 2.9 Litigation and Proceedings. Except as set forth in
Exhibit 2.9 hereto, (i) there is not pending any legal, administrative,
arbitration, governmental or other proceeding to which any of the Directors, GSI
or Xxxxxxx Bank is a party, or, to the knowledge of GSI or Xxxxxxx Bank is
threatened to be made a party; (ii) neither any of the Directors, GSI nor
Xxxxxxx Bank is under any investigation to their respective knowledge with
respect to, or is charged with any violation or alleged violation of, any
federal, state, local or other law or regulation other than as described in each
of their respective most recent regulatory examination reports, if applicable;
(iii) Neither GSI nor Xxxxxxx Bank is subject to any order of any federal,
state, or local court or other governmental agency not generally applicable to
entities engaged in their same business; (iv) no one has asserted, and to the
knowledge of GSI or Xxxxxxx Bank, no one has grounds to assert any material
claims against any of the Directors, GSI or Xxxxxxx Bank based upon the wrongful
action or inaction of any of the Directors, GSI or Xxxxxxx Bank or any of their
respective officers, directors, agents or employees; and (v) no one has asserted
and, to the knowledge of GSI or Xxxxxxx Bank, there do not exist grounds for any
claims against any of the Directors, GSI or Xxxxxxx Bank, which have resulted or
may result in litigation that will prevent or delay the consummation of the
transactions contemplated by this Agreement.
Section 2.10 Authority. Each of GSI and Xxxxxxx Bank,
respectively, has full corporate power and authority to carry out the
transactions provided for in this Agreement on the terms and conditions set
forth herein. The execution and delivery by GSI and Xxxxxxx Bank of this
Agreement and the respective consummation by each of them of the transactions
contemplated hereby have been duly and validly authorized by all necessary
corporate action of each of them. This Agreement constitutes a valid and legally
binding obligation of GSI and Xxxxxxx Bank, respectively, in accordance with its
terms, except that the enforcement of the rights and remedies created hereby and
thereby is subject to bankruptcy, insolvency, reorganization and similar laws of
general application affecting the rights and remedies of creditors and that the
availability of the remedy of specific performance or of injunctive or other
equitable relief is subject to the discretion of the court before which any
proceeding therefor may be brought. Except as listed on Exhibit 2.10 hereto,
neither the execution and delivery of this Agreement, nor the consummation by
GSI and/or Xxxxxxx Bank, respectively, of the transactions contemplated hereby
in accordance with the terms and conditions hereof, nor the respective
compliance by GSI and Xxxxxxx Bank with any of the provisions hereof, will
violate, conflict with, result in a breach of, constitute a default under,
accelerate the performance required by the terms of, or permit the termination
of any order, writ, injunction, decree, statute, rule, regulation or policy
guidelines applicable to GSI or Xxxxxxx Bank, respectively, or any contract,
Agreement, indenture or instrument to which either GSI or Xxxxxxx Bank is a
party or by which GSI or Xxxxxxx Bank is bound or committed or the respective
Certificate of Incorporation, Charter or Bylaws of GSI or Xxxxxxx Bank. Except
for the approvals contemplated by this Agreement, neither GSI nor Xxxxxxx Bank
is required to obtain any consent, approval, order or authorization of, or to
effect any registration, declaration or filing with, any governmental authority
or under any contract, Agreement, indenture or instrument to which either of GSI
or Xxxxxxx Bank is a party, or by which either of them is bound or committed in
connection with the execution and delivery of this Agreement, or the
consummation of the transactions contemplated hereby.
Section 2.11 Absence of Certain Changes. Except as set forth
in Exhibit 2.11 hereto or permitted by this Agreement, since February 28, 1999,
none of the following actions, changes or matters has been taken by or
transpired with regard to either GSI or Xxxxxxx Bank, respectively:
2.11.1 any material adverse change in the financial
condition, operations, business or prospects of GSI or Xxxxxxx Bank,
either individually or taken as a whole, other than changes which are
the result of changes in laws or regulations, conditions affecting the
economy generally or other factors affecting banking institutions in
general;
2.11.2 any sale, assignment, transfer, purchase or
other disposition of any tangible or intangible asset of GSI or Xxxxxxx
Bank, respectively, except in the Ordinary Course of Business
consistent with past practice, as that term is defined below in this
Section, and for fair and adequate consideration;
2.11.3 any suffering of any damage, destruction, or
loss, whether as the result of fire, explosion, earthquake, accident,
casualty, labor trouble, requisition or taking of property by any
government or any agency of any government, flood, windstorm, embargo,
riot or act of God or the enemy, or other similar or dissimilar
casualty or event or otherwise, and whether or not covered by
insurance, materially and adversely affecting the business, property,
or assets of GSI or Xxxxxxx Bank, respectively;
2.11.4 any increase in the compensation payable or to
become payable by GSI or Xxxxxxx Bank, respectively, to any of their
respective directors, officers, employees, agents, consultants, or any
bonus granted to any such persons, except in the Ordinary Course of
Business consistent with past practice;
2.11.5 any material change in the method of
recordkeeping employed by GSI or Xxxxxxx Bank, respectively;
2.11.6 any issuance or sale by GSI or Xxxxxxx Bank,
respectively, of any of their respective corporate debt securities, or
any borrowings of money or other pledging of any of their respective
credit except in the Ordinary Course of Business consistent with past
practice;
2.11.7 any occurrence of any other material
obligation or liability (absolute or contingent), except normal trade
or business obligations or liabilities incurred in the Ordinary Course
of Business;
2.11.8 any mortgage, pledge, or subjecting to lien,
claim, security interest, charge, Encumbrance, or restriction (other
than Permitted Title Exceptions) of any of the respective assets or
properties of GSI or Xxxxxxx Bank, respectively;
2.11.9 any discharge or satisfaction of any lien,
mortgage, pledge, claim, security interest, charge, Encumbrance, or
restriction or payment of any obligation or
liability (absolute or contingent), of GSI or Xxxxxxx Bank, other than
in the Ordinary Course of Business;
2.11.10 any declaration or payment of dividends by
either GSI or Xxxxxxx Bank on their respective capital stock, except as
expressly authorized to be paid by GSI to the GSI Shareholders pursuant
to the provisions of Section 1.1.1(iv), above;
2.11.11 any cancellation or compromise by GSI or
Xxxxxxx Bank, respectively, of any material debt or claim, other than
in the Ordinary Course of Business or upon payment in full;
2.11.12 any waiver by GSI or Xxxxxxx Bank,
respectively, of any material rights of value, other than in the
Ordinary Course of Business or upon payment in full;
2.11.13 except in the Ordinary Course of their
respective Businesses, any entering into, or agreeing to enter into,
any agreement or arrangement granting any preferential right to
purchase any of their respective assets, properties, or rights or
requiring the consent of any party to the transfer and assignment of
any such respective assets, properties, or rights;
2.11.14 any entering into of any material
transaction, contract, or commitment outside the Ordinary Course of its
Business;
2.11.15 any introduction of any material change with
respect to the operation of their respective businesses, including,
without limitation, their respective methods of accounting (exclusive
of changes generally applicable to the banking business or industry
such as, without limitation, changes in banking statutes, rules and
regulations, changes in accounting principles, rules and practices and
changes in tax laws and regulations, and the prevailing interpretation
of any thereof);
2.11.16 any receipt of notice or knowledge of, or
reason to believe that any labor unrest exists among any of their
respective employees, or that any group, organization or union has
attempted to organize any of their respective employees, or any receipt
of notice or knowledge of, or reason to believe that there will be,
resignations of several of their respective employees, or of more than
two (2) of the key executive employees of Xxxxxxx Bank, i.e., Vice
President, or above, by reason of the execution of this Agreement or
the consummation of the transactions contemplated by this Agreement;
2.11.17 any failure to operate their respective
business organizations intact and to seek to preserve the goodwill of
their respective customers and others with whom they have business
relations;
2.11.18 any making by either GSI or Xxxxxxx Bank,
respectively, of any capital expenditure or capital addition or
betterment in excess of $10,000 per respective project;
2.11.19 any making by either GSI or Xxxxxxx Bank,
respectively, of any loan or discount or entering into a financing
lease (A) which has not been made for good, valuable and adequate
consideration in the Ordinary Course of Business, and (B) which has not
been evidenced by notes or other evidences of indebtedness which are
true, genuine and what they purport to be; or
2.11.20 any agreement to do any of the foregoing.
2.11.21 For purposes of this Agreement, the term
"Ordinary Course of Business" shall be defined to mean an action taken
by a person which: (i) is consistent with the past practices of such
person and is taken in the ordinary course of the normal day-to-day
operations of such person; (ii) is not required to be authorized by
Board of Directors of such person (or by any person or group of persons
exercising similar authority); and (iii) is similar in nature and
magnitude to action customarily taken, without any authorization by the
Board of Directors (or by any person or group of persons exercising
similar authority), in the ordinary course of the normal day-to-day
operations of such persons that are in the same line of business as
such person.
Section 2.12 Employee Benefit Plans. Unless disclosed in
Exhibit 2.12 hereto:
2.12.1 Neither GSI nor Xxxxxxx Bank, respectively,
maintains nor has maintained, nor has any present or future obligation
or liability under, any funded deferred compensation plans (including
profit sharing, pension, 401(k), savings, employee stock ownership
plans or trusts or other stock bonus plans), unfunded deferred
compensation arrangements or employee benefit plans as defined in
Section 3(3) of the Employee Retirement Income Security Act of 1974, as
amended ("ERISA"), other than the respective plans, if any, maintained
by any of them as set forth in Exhibit 2.12 hereto, to include, without
limitation, the Xxxxxxx Bank ESOP, the Xxxxxxx Bank 401(k) Plan and the
Xxxxxxx Bank Management Stock Bonus Plan (true and correct copies of
each of which have been delivered to Buyer) (hereinafter collectively
referred to as the "Benefit Plans").
2.12.2 There are no multi-employer plans, as defined
in Section 4001(a)(3) of ERISA, to which either GSI or Xxxxxxx Bank,
respectively, contributes, or under which either of them has any
present or future obligation or liability.
2.12.3 Each of the Benefit Plans which is an employee
pension benefit plan, as defined in Section 3(2) of ERISA, and which is
intended to be "qualified" within the meaning of Section 401(a) of the
Internal Revenue Code of 1986 ("Code") ("Pension Plan"), has been
determined by the Internal Revenue Service to be so qualified and
neither GSI nor Xxxxxxx Bank is aware of any fact that would adversely
affect such qualified status. To the best of the knowledge of Sellers,
each Benefit Plan has been operated and administered in accordance with
the requirements of ERISA and the applicable provisions of the Code and
has been fully funded at the times and in the amounts required by the
terms and conditions of each Benefit Plan by the entity
maintaining that Benefit Plan, i.e., GSI or Xxxxxxx Bank, respectively,
as the case may be.
2.12.4 With respect to each Benefit Plan for which an
annual report has been filed, no material adverse change has occurred
with respect to the matters covered by the most recent such annual
report on IRS Form 5500, which is included in Exhibit 2.12, since the
end of the period covered thereby.
2.12.5 None of the Benefit Plans (or any pension plan
maintained by a trade or business, whether or not incorporated, which
is under common control with either GSI or Xxxxxxx Bank, respectively,
or any of them, within the meaning of Section 414(b) or (c) of the
Code) which are subject to Title IV of ERISA has completely or
partially terminated, or been the subject of a reportable event as
defined in Section 4043 of ERISA.
2.12.6 No proceedings by the Pension Benefit Guaranty
Corporation to terminate a Pension Plan (or any pension plan maintained
by a trade or business, whether or not incorporated, which is under
common control with either GSI or Xxxxxxx Bank, respectively, or any of
them, within the meaning of Section 414(b) or (c) of the Code) pursuant
to Subtitle C of Title IV or ERISA have been instituted or threatened.
No liability under Subtitle D of Title IV of ERISA has been incurred by
either GSI or Xxxxxxx Bank with respect to a Pension Plan or a pension
plan maintained by a trade or business whether or not incorporated
which is under common control with either GSI or Xxxxxxx Bank,
respectively, or any of them, within the meaning of Section 414(b) or
(c) of the Code.
2.12.7 The present value of all accrued benefits
(vested and non-vested) under each of the defined benefit pension plans
disclosed under Exhibit 2.12 did not, as of the latest valuation date,
exceed the then current market value of the assets of such plan
allocable to such accrued benefits based upon the actuarial assumptions
currently utilized for such plans and as disclosed under Exhibit 2.12,
and no accumulated funding deficiency (whether or not waived) exists
with respect to any such plan which has been terminated by either GSI
or Xxxxxxx Bank, respectively, or any of their respective predecessors.
2.12.8 There has been no prohibited transaction (as
is defined in Section 4975 of the Code or in Part 4 of Subtitle B of
Title I of ERISA) with respect to any Benefit Plan. No penalty or tax
under Section 402(i) of ERISA or Section 4975 of the Code has been
imposed upon either GSI or Xxxxxxx Bank.
2.12.9 There are no pending or, to the knowledge of
GSI or Xxxxxxx Bank, any threatened claims by or on behalf of the
Benefit Plans, by any employee or beneficiary covered under the Benefit
Plans, or otherwise involving the Benefit Plans which allege a breach
of fiduciary duties or violations of other applicable state or federal
law which could result in liability on the part of either GSI or
Xxxxxxx Bank, respectively, or any of the Benefit Plans under ERISA or
any other law, nor, to the knowledge of GSI
or Xxxxxxx Bank, respectively, is there any basis for such a claim.
2.12.10 Each of GSI and Xxxxxxx Bank, respectively,
has complied with all provisions relating to continuation coverage
required by Title I, Subtitle B, Part 6 of ERISA as applicable.
Section 2.13 Forms of Instruments, Etc. GSI and Xxxxxxx Bank
will make available to Buyer, upon request, copies of all standard forms of
savings and deposit accounts, certificates of deposit, notes, mortgages, deeds
of trust, security agreements and other routine documents of a like nature
utilized on a regular and recurring basis by any of them in their respective
Ordinary Course of Business.
Section 2.14 Required Reports and Compliance with Laws and
Orders. GSI and Xxxxxxx Bank has each duly filed with the OTS, the FDIC and the
SEC, as the case may be, in correct form the reports required to be filed by and
is in material compliance in all material respects with all laws, rules,
regulations, policy guidelines, orders and requirements applicable to it and has
paid all premiums and special assessments due and such reports were in all
material respects complete and accurate and in compliance with the requirements
of applicable laws and regulations, provided that information as of a later date
shall be deemed to modify information as of an earlier date; and GSI and Xxxxxxx
Bank have previously delivered or made available to Buyer accurate and complete
copies of all such reports. In connection with the most recent examinations of
GSI and Xxxxxxx Bank, respectively, by the OTS or the FDIC, as the case may be,
neither GSI nor Xxxxxxx Bank was required to correct or change any action,
procedure or proceeding which GSI or Xxxxxxx Bank believes has not been
corrected or changed as required by said examination. To the best of Sellers'
knowledge, there are not any facts or circumstances which would prevent any
required consents and approvals to the Acquisition being obtained from the OCC,
the OTS, the FRB, the SEC or the FDIC.
Section 2.15 Loans. All loan agreements, notes receivable,
borrowing arrangements, and leases ("Loans") made or held by GSI or Xxxxxxx
Bank, as lender, as reflected in the Financial Statements and/or on the books of
GSI or Xxxxxxx Bank, respectively, are valid, binding, and enforceable
obligations of the respective debtors without any claims or defenses, except as
set forth on Exhibit 2.15 which is attached hereto and by this reference made an
integral part hereof, and each such Loan which is secured by a security interest
in personal property is secured by a valid and perfected lien and each such Loan
which is secured by an interest in real property is secured by a valid and
perfected mortgage lien. The Loans and loan portfolio of GSI or Xxxxxxx Bank,
respectively, are in accordance in all material respects with all applicable
laws, regulations, orders and policy guidelines other than as disclosed in
examination reports or in Exhibit 2.15 hereto. Exhibit 2.15 hereto contains a
list of all loan commitments of GSI or Xxxxxxx Bank exceeding $50,000 including
the name of the borrower, other loans of such borrower held by GSI or Xxxxxxx
Bank, respectively, and the type of security for the loan. The aggregate
reserves for Loans included in the Financial Statements are adequate as of such
dates in all respects for all known and/or estimated losses as of such dates
(net of recoveries relating to Loans previously charged off) on any Loans of GSI
or Xxxxxxx Bank, respectively, which were outstanding as of such date. To the
best of the knowledge of GSI and Xxxxxxx Bank, all Loans of
GSI and Xxxxxxx Bank are bona fide and arose in the Ordinary Course of Business.
Except for Loans described and listed in Exhibit 2.15 hereto (which Exhibit
shall include the borrower's name, amount of the loan, the number of days, if
any, the loan is delinquent and the name of the entity, bank or holding company,
i.e., GSI or Xxxxxxx Bank, which made that Loan), neither GSI nor Xxxxxxx Bank,
respectively, is a party to any written or oral (i) Loan under the terms of
which the obligor is more than thirty (30) days in default in payment of
principal, interest, or other provisions thereof as of the dates shown thereon;
(ii) Loan which has been or may be classified by the examiners for the OTS or
the FDIC, as "substandard," "doubtful," "loss," "other loans especially
mentioned," or any comparable classification used by such regulatory agencies;
(iii) Loan which has been so classified internally by that lender; (iv) Loan by
GSI or Xxxxxxx Bank to any of its respective directors or officers, or any
member of its respective directors' or officers' immediate families (spouse,
siblings, children, or parents), or any affiliate or associate (as such terms
are defined in the rules and regulations applicable to that respective bank) of
the foregoing which is more than thirty (30) days delinquent, or (v) Loans which
are in known violation of any law, regulation, or rule of any governmental
authority, federal, state or county. Except as noted in Exhibit 2.15 hereto, the
documentation for all Loans of GSI or Xxxxxxx Bank, respectively, which are
described in Exhibit 2.15 is substantially in the same form as for the other
Loans of similar type of GSI or Xxxxxxx Bank, respectively.
Section 2.16 No Impending Material Adverse Events. Unless
disclosed in Exhibit 2.16, which is attached hereto and by this reference made
an integral part hereof, as of the date hereof, neither GSI nor Xxxxxxx Bank,
respectively, has knowledge of any impending loss of their respective business,
or of any other presently existing facts or circumstances which would be
reasonably likely to have a material adverse effect upon the respective
financial condition, results of operations, business, or prospects of GSI or of
Xxxxxxx Bank, respectively, other than changes which are the result of changes
in laws or regulations or other factors affecting banking institutions in
general.
Section 2.17 Books and Records. The minute books of GSI and
Xxxxxxx Bank, respectively, each reflect accurately all significant action ever
taken by the shareholders and board of directors (or any committee thereof), of
each of those entities, i.e., GSI or Xxxxxxx Bank, respectively.
Section 2.18 Regulatory Agreements. Except as disclosed in
Exhibit 2.18 hereto, neither GSI nor Xxxxxxx Bank, respectively, is a party to
any Prompt Corrective Action, Assistance Agreement, Supervisory Directive,
memorandum of understanding, consent order, cease and desist order or condition
or any other regulatory letter, order or decree with, or a party to any
commitment letter or similar undertaking to, or is subject to any order to or
directive by, or has adopted any board resolutions at the request of, the OTS,
the FDIC or the SEC, as applicable, or any other regulatory agency that
restricts the conduct of the respective business of GSI or Xxxxxxx Bank, or in
any manner relates to the capital adequacy, credit policies, ability to pay
dividends, net worth or asset management or maintenance, or good standing of GSI
or Xxxxxxx Bank, respectively; nor has either GSI or Xxxxxxx Bank been advised
by any such regulatory agency that it is contemplating issuing or requesting (or
is considering the appropriateness of issuing or requesting) any such order,
directive, written agreement,
memorandum of understanding, extraordinary supervisory letter, commitment
letter, board resolution or similar undertaking.
Section 2.19 Full Disclosure. None of the information
concerning GSI or Xxxxxxx Bank, respectively, contained in this Agreement and
the schedules hereto, or in any of the lists, documents or instruments attached
hereto or to be delivered by or on behalf of GSI or Xxxxxxx Bank, respectively,
as contemplated by any provision of this Agreement, or as provided to Buyer for
inclusion in any of the applications or documents to be filed with governmental
agencies in connection with obtaining requisite approvals for the transactions
contemplated hereby, contains or will contain any untrue statement of a material
fact or omits or will omit to state any material fact necessary to make the
statements contained herein or therein, taken as a whole with all other such
lists, documents, instruments or other information so furnished in light of the
circumstances in which they are made, not misleading.
Section 2.20 Investments.
2.20.1 Set forth in Exhibit 2.20 hereto is a list of
all investment and mortgage-backed and related securities owned by GSI
and Xxxxxxx Bank, respectively, indicating the original cost and
current market value thereof. Except as disclosed in Exhibit 2.20,
since February 28, 1999, no investment or mortgage-backed and related
securities have been acquired or disposed of by either GSI or Xxxxxxx
Bank, respectively, except in the Ordinary Course of Business and the
investments of GSI or of Xxxxxxx Bank in investment and mortgage-backed
and related securities are in accordance in all material respects with
all applicable laws, regulations, orders, and policy guidelines.
2.20.2 GSI and Xxxxxxx Bank have each set forth
respectively in Exhibit 2.20 hereto a written description as of the
date hereof of each real estate development project in which either GSI
or Xxxxxxx Bank has an equity ownership, if any, the amount of funds
invested by either GSI or Xxxxxxx Bank, respectively, the appraised
value of any real property for which appraisals exist and the carrying
value on the books of GSI and Xxxxxxx Bank, respectively, for any such
investment and, with respect to each such project which has not been
completed, an estimate of the cost of completing such project. GSI and
Xxxxxxx Bank, each has made available to Buyer true and complete copies
of appraisal reports relating to each such project as are available.
Exhibit 2.20 also includes a listing of all other real property in
which either GSI or Xxxxxxx Bank, respectively, has an equity interest
and the amount of each such investment. To the best of the knowledge of
GSI and Xxxxxxx Bank, respectively, there are no facts, circumstances
or contingencies which exist or which are reasonably likely to occur
prior to the Closing hereunder (other than general economic conditions
and conditions generally affecting real estate) which would require a
material reduction under generally accepted accounting principles in
the aggregate values of the real estate investments, other real estate
owned, joint ventures, and construction loans, respectively, of either
GSI or Xxxxxxx Bank, which reductions are not disclosed or reflected in
the Financial Statements, or Exhibit 2.20.
Section 2.21 Repurchase Agreements. Unless disclosed in
Exhibit 2.21 hereto,
with respect to all repurchase agreements pursuant to which either GSI or
Xxxxxxx Bank, is a party, (a) where either GSI or Xxxxxxx Bank, respectively,
has an obligation to resell securities, it has either good title to or a valid,
perfected first lien or security interest in the government securities or other
collateral securing the repurchase Agreement, and the value of the collateral
securing each such repurchase agreement to which any of them is a party at the
date hereof equals or exceeds the amount of the debt secured by such collateral
under such repurchase Agreement, and (b) where either GSI or Xxxxxxx Bank has
the respective obligation to repurchase securities, the value of the collateral
securing the said obligation of GSI or Xxxxxxx Bank, respectively, does not
exceed 100% of the amount of said obligation.
Section 2.22 Significant Agreements. Except as set forth in
Exhibit 2.22 hereto, neither GSI nor Xxxxxxx Bank, respectively, is a party to
(in its own name or as a successor in interest) nor bound by any written or
oral:
2.22.1 contracts or commitments involving employment,
consulting, deferred compensation, profit sharing, pension, bonus,
retirement, percentage compensation, incentive compensation, service
award, severance payment, employee benefit, or stock options or
warrants;
2.22.2 leases or licenses with respect to any
property, real or personal, as lessor, lessee, licensor, or licensee,
except leases of personal property with either GSI or Xxxxxxx Bank,
respectively, as the case may be, as lessee with rental payments of
less than $5,000 per annum in the aggregate;
2.22.3 contract or commitment for capital
expenditures in excess of $10,000 for any one project;
2.22.4 material contract or commitment made other
than in the Ordinary Course of Business for the purchase of materials
or supplies or for the performance of services for a period extending
beyond February 28, 1999;
2.22.5 contract or option for the purchase of any
real or personal property other than in the Ordinary Course of
Business;
2.22.6 letter of credit or guarantee Agreement;
2.22.7 collective bargaining or other agreement
entered into with any union or other entity representing employees;
2.22.8 contract or commitment to (a) acquire
investment securities in excess of $25,000, or (b) to extend credit in
excess of $100,000, in each case for any one contract or commitment; or
2.22.9 contracts, commitments, or agreements not
otherwise described in Subsections 2.22.1 - 2.22.8, above, made other
than in the Ordinary Course of Business,
in an amount with a value of more than $10,000 in the aggregate.
Each of GSI and Xxxxxxx Bank, respectively, has performed in
all material respects all material obligations required to be performed by it to
date, and is not in default under, and no event has occurred which, with the
lapse of time or action by a third party, would result in a default under, any
presently outstanding indenture, mortgage, lease, contract, commitment, or
agreement to which either GSI or Xxxxxxx Bank is a party, respectively, or by
which it is bound and which is material, or is set forth in Exhibit 2.22 hereto,
and each such presently outstanding indenture, mortgage, lease, contract,
commitment, or agreement is a valid, legally binding obligation of GSI and/or
Xxxxxxx Bank, respectively, as the case may be, and the other party or parties
thereto.
Section 2.23 Insurance. Exhibit 2.23 hereto lists the
insurance policies which GSI and Xxxxxxx Bank each has in full force and effect
with respect to its respective assets and business. Unless disclosed in Exhibit
2.23, since January 1, 1998, neither GSI nor Xxxxxxx Bank has received any
notice of cancellation with respect to any of its insurance policies or bonds,
and within the last three (3) years neither GSI nor Xxxxxxx Bank has been
refused any insurance coverage sought or applied for (except where the refusal
of coverage relates to an insurer's ceasing generally to offer a particular type
of coverage), and it has no reason to believe that existing insurance coverage
cannot be renewed as and when the same shall expire.
Section 2.24 Transactions with Affiliated Persons. Except as
listed in Exhibit 2.24 hereto, or elsewhere in this Agreement, no "affiliated
persons" or "affiliate" of either GSI or Xxxxxxx Bank, respectively, as those
terms are defined in 12 C.F.R. ss.561.5 and 12 C.F.R. ss.563.41, respectively,
have engaged in any material transactions with either GSI or Xxxxxxx Bank,
respectively.
Section 2.25 Brokers. Except as listed in Exhibit 2.25 hereto,
neither the Directors, GSI nor Xxxxxxx Bank has retained or otherwise engaged or
employed any broker, finder or any other person, or paid or agreed to pay any
fee or commission to any agent, broker, finder or other person, for or on
account of such person's acting as a broker, finder or otherwise in connection
with this Agreement, the Acquisition or the other transactions contemplated
hereby, other than Xxxxx Financial, Inc., a Washington, D.C. investment banking
firm and/or Xxxxxxx X. Xxxxxxx, Senior Vice President of Xxxxx Financial, Inc.
(Referred to herein collectively as "Xxxxx") pursuant to a separate written
agreement between Sellers and Xxxxx, a complete and accurate copy of which was
delivered to Buyer by Sellers before the date of this Agreement. Accordingly,
GSI and Xxxxxxx Bank hereby indemnify and agree to hold Buyer harmless from and
against any and all loss, cost or expense (including reasonable attorneys' fees
and expenses) resulting from any claim for any fee, commission, or similar
payment by any broker, agent, finder or salesman as the result of any action of
the Directors, GSI or Xxxxxxx Bank, respectively, incident to the Acquisition,
this Agreement or the transactions contemplated hereby, it being understood that
the liability of Xxxxxxx Bank under this provision is limited to the extent
necessary to comply with the requirements of 12 U.S.C. xx.xx. 371c and 371c-1.
GSI and Xxxxxxx Bank hereby acknowledge and agree that, conditioned wholly upon
the successful consummation of the Acquisition pursuant to this Agreement, GSI
and Xxxxxxx Bank shall hold
Buyer wholly harmless from and shall cause Xxxxx to be fully paid the full
amount of the commission or finder's fee which GSI and Xxxxxxx Bank have agreed
to pay Xxxxx pursuant to their separate agreement with Xxxxx, the full and
complete copy of which was previously provided to Buyer.
Section 2.26 No Default. Neither GSI nor Xxxxxxx Bank,
respectively, is in default under and no event has occurred which, with the
lapse of time or action by a third party, would result in a default under the
terms of (i) any judgment, decree, order, or writ of any agency of any
government or court, whether federal, state or local and whether at law or in
equity, or (ii) any license, permit, rule or regulation of any federal or state
or local governmental agency which default would have a materially adverse
effect upon the respective financial condition, results of operation, business
or properties of GSI or Xxxxxxx Bank.
Section 2.27 Hazardous Materials. To the best knowledge of GSI
or Xxxxxxx Bank, respectively, no "Hazardous Materials" (as hereinafter defined)
has been disposed of, buried beneath, or percolated beneath the respective real
property, or improvements thereon, owned now or during the last five years by
GSI or Xxxxxxx Bank, respectively (the "Real Property"), nor has any Hazardous
Materials ever been removed from and stored off-site of the Real Property, or of
any real or personal property securing the Loans of any of those said respective
entities. Further, to the best knowledge of GSI and Xxxxxxx Bank, respectively,
there has been no "Release" (as hereinafter defined) of any Hazardous Materials
on or from the Real Property or any improvements thereon. GSI and Xxxxxxx Bank,
respectively, is each in material compliance with all applicable federal, state
and local laws, administrative rulings, and regulations of any court,
administrative agency or other governmental or quasi-governmental authority,
relating to the protection of the environment (including, but not limited to,
laws prohibiting the creation of a public nuisance). Neither GSI nor Xxxxxxx
Bank, respectively, has received notification from any governmental entity or a
private citizen acting in the public interest that it is a potentially
responsible party under Section 107 of the Comprehensive Environmental Response
Compensation and Liability Act of 1980, as amended ("CERCLA") or Section 7003 of
the Resource Conservation and Recovery Act of 1976, as amended ("RCRA") and none
of them has received notification from any federal, state, or local government
agency, or regulatory body, of a violation. The term "Environmental Laws" for
the purposes of this Agreement, shall include, without limitation, the Clean Air
Act, 42 U.S.C. ss.7401, et seq.; the Clean Water Act, 33 U.S.C. ss.1251, et
seq., and the Water Quality Act of 1981; the Federal Insecticide, Fungicide and
Rodenticide Act ("FIFRA"), 7 U.S.C. ss.136 et seq.; the Marine, Protection,
Research and Sanctuaries Act, 33 U.S.C. ss.1401, et seq.; the National
Environmental Policy Act, 42 U.S.C. ss.4321, et seq.; the Noise Control Act, 42
U.S.C. ss.4901, et seq.; the Occupational Safety and Health Act, 29 U.S.C.
ss.651, et seq.; the RCRA, 42 U.S.C. ss.6901, et seq.; as amended by the
Hazardous and Solid Waste Amendments of 1984; the Safe Drinking Water Act, 42
U.S.C. ss.300f, et seq.; CERCLA, 42 U.S.C. ss.9601, et seq., as amended by the
Superfund Amendments and Reauthorization Act, and the Emergency Planning and
Community- Right-to-Know Act; the Toxic Substance Control Act ("TSCA"), 15
U.S.C. ss.2601, et seq. and the Atomic Energy Act, 42 U.S.C. ss.2011, et seq.,
all as may have been amended as of the date of this Agreement, together with
their implementing regulations and guidelines as of the date of this Agreement.
The term "Environmental Laws" shall also include all state, regional, county,
municipal and other local laws, regulations and ordinances that are equivalent
or similar to the federal laws recited above or that purport to regulate
Hazardous Materials. The term "Hazardous Materials" shall include, without
limitation, any hazardous substance, pollutant, or contaminants regulated under
CERCLA; oil and petroleum products and natural gas, natural gas liquids,
liquified natural gas, and synthetic gas usable for fuel; pesticides regulated
under FIFRA; asbestos, polychlorinated biphenyls, and other substances regulated
under TSCA; source material; special nuclear material, and by-product materials
regulated under the Atomic Energy Act; and industrial process and pollution
control wastes to the extent regulated under applicable Environmental Laws. The
term "Release" shall have the meaning given to such term in Section 101(22) of
CERCLA.
Section 2.28 Books and Records. The books of account, minutes
books, stock record books and other records of GSI and Xxxxxxx Bank,
respectively, all of which have been made available to Buyer (except for any
records relative to the Acquisition), are complete and correct and have been
maintained in accordance with sound business practices. The minutes books of
each of GSI and Xxxxxxx Bank contain accurate and complete records of all
meetings held of, and corporate action taken by, the shareholders, the Boards of
Directors, and committees of the Boards of Directors of each of GSI and Xxxxxxx
Bank, respectively, and no meetings of any such shareholders, Board of
Directors, or committee has been held for which minutes have not been prepared
and are not contained in such minute books. At the Closing hereunder, all of
those books and records will be in the possession and control of GSI and Xxxxxxx
Bank, respectively.
Section 2.29 Condition and Sufficiency of Assets. The
buildings, structures and equipment of GSI and Xxxxxxx Bank, respectively,
whether owned or leased, are structurally sound, are in good operating condition
and repair, and are adequate for the uses to which they are being put, and none
of such buildings, plants, structures, or equipment is in need of maintenance or
repairs except for ordinary, routine maintenance and repairs that are not
material in nature or cost. The building, structures and equipment of GSI and
Xxxxxxx Bank, respectively, are sufficient for the continued conduct of the
businesses of each of those entities after the Closing in substantially the same
manner as they were being conducted prior to the Closing.
Section 2.30 Employees and Directors.
2.30.1 Exhibit 2.30 which is attached hereto and by
this reference made an integral part hereof, contains a complete and
accurate list of the following information for each employee or
director of GSI or Xxxxxxx Bank, respectively, including, each employee
on leave of absence or layoff status; employer; employee name; job
title, current compensation paid or payable, and any change in
compensation since December 31, 1998; vacation accrued; and service
credited for purposes of vesting and eligibility to participate under
any pension, retirement, profit-sharing, thrift-savings, deferred
compensation, stock bonus, stock option, cash bonus, employee stock
ownership (including investment credit or payroll stock ownership),
severance pay, insurance, medical, welfare, or vacation plan, or any
other Benefit Plan of any type or kind or any other Pension Plan,
employee benefit plan or any other director plan of any type or kind
maintained by either GSI or Xxxxxxx Bank, respectively. Exhibit 4.1.10,
which is
attached hereto as referenced in Section 4.1.10, below, contains a
complete and accurate list of the employee salary increases and cash
bonuses (not to exceed, in the aggregate, $10,000) which Sellers
contemplate making and paying to their employees on or before the
Effective Time.
2.30.2 No employee or director of GSI or Xxxxxxx
Bank, respectively, is a party to, or is otherwise bound by, any
agreement or arrangement, including any confidentiality,
non-competition, or proprietary rights Agreement, between such employee
or director and any other person ("Proprietary Rights Agreement") that
in any way adversely affects or will affect (i) the performance of
his/her duties as an employee or director of GSI or Xxxxxxx Bank,
respectively, or (ii) the ability of GSI or Xxxxxxx Bank, respectively,
to conduct its respective business, including, without limitation, any
Proprietary Rights Agreement with the Directors, the GSI Shareholders,
GSI or Xxxxxxx Bank by any such employee or director. To the knowledge
of GSI or Xxxxxxx Bank, no director, officer, or other key employee of
either GSI or Xxxxxxx Bank, respectively, intends to terminate his/her
employment with such entity in the immediate future or as a result of
the entering into this Agreement or consummating of the Acquisition
contemplated hereunder.
Section 2.31 Improper Payments. None of the officers,
directors, agents or employees of either GSI or Xxxxxxx Bank, respectively, nor,
to the knowledge of GSI or Xxxxxxx Bank themselves, respectively, any other
person or entity (including, without limitation, any affiliate of the Directors,
GSI or Xxxxxxx Bank, respectively) acting on behalf of either GSI or Xxxxxxx
Bank, as the case may be, in any case for which such action may be attributable
to either GSI or Xxxxxxx Bank, has directly or indirectly, on behalf of or with
respect to either GSI or Xxxxxxx Bank, (i) made any political contributions with
funds of GSI or Xxxxxxx Bank, respectively, (ii) made any payment which was not
legal to make or which was not legal for the payee to receive, (iii) received
any payment which was not legal to receive or which was not legal for the payor
to make, (iv) executed any material transaction or payment which is not properly
booked in accordance with generally accepted accounting principles, or (v) had
any off- book bank or cash accounts of which GSI or Xxxxxxx Bank, respectively,
was the beneficial owner.
2.32 Year 2000 Data Processing Compliance. To the best
knowledge of Sellers, the data processing systems of each of GSI and Xxxxxxx
Bank have been made, or are currently in the process of being made, Year 2000
compliant and will be fully Year 2000 compliant on or before December 31, 1999.
GSI and Xxxxxxx Bank are currently in compliance with all existing OTS rules and
regulations pertaining to becoming or being Year 2000 compliant and neither has
received any notification of any kind or nature from the OTS, or any other
government regulatory agency which has jurisdiction over them, that they are not
in compliance with, or are failing in any manner to fully satisfy all of the OTS
rules and requirements for their data processing systems being or becoming Year
2000 compliant. GSI and Xxxxxxx Bank have been examined by the OTS in the last
year to verify their efforts to comply with the OTS rules and regulations on
becoming Year 2000 complaint (a full and complete copy of which said OTS exam
has been provided by Sellers to Buyer) and said exam did not note any
deficiencies or
defaults of GSI or Xxxxxxx Bank in becoming Year 2000 complaint on a timely
basis which have not been completely satisfied or cured by GSI and Xxxxxxx Bank
prior to the date of this Agreement.
Section 2.33 Delays. Sellers are not aware of any matter that
could cause a delay in receiving the approvals required by this Agreement before
it can be consummated.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF BUYER
---------------------------------------
Buyer hereby makes the following representations and
warranties to GSI as of the date of this Agreement, and as of the Closing Date,
as follows:
Section 3.1 Organization and Standing of Buyer. Buyer is a
national banking association organized, validly existing and with a corporate
existence under the laws of the United States of America. Buyer has all
requisite corporate power and authority and is duly qualified and licensed and
possesses all licenses, franchises, permits and other governmental
authorizations necessary to own, lease and operate its assets and properties and
to conduct its business as now being conducted, including, without limitation,
the full power and authority to enter into and perform under this Agreement and
the transactions contemplated hereby. All approvals, if any, required to be
obtained from the Board of Directors or the shareholders of Buyer under Buyer's
Articles of Association and By-laws or applicable law have been obtained or will
be obtained prior to the Closing Date, subject to the absolute right of any
government regulatory agency to deny such approval.
Section 3.2 Authority. Buyer has full corporate power and
authority to carry out the transactions provided for in this Agreement on the
terms and conditions set forth herein. The execution and delivery of this
Agreement and the consummation by Buyer of the transactions contemplated hereby
have been duly and validly authorized by all necessary corporate action. This
Agreement constitutes a valid and legally binding obligation of Buyer,
enforceable against Buyer in accordance with its terms, except that the
enforcement of the rights and remedies created hereby is subject to bankruptcy,
insolvency, reorganization and similar laws of general application affecting the
rights and remedies of creditors and that the availability of the remedy of
specific performance or of injunctive relief is subject to the discretion of the
court before which any proceeding therefor may be brought. Neither the execution
and delivery of this Agreement, nor the consummation by Buyer of the
transactions contemplated hereby, will conflict with, or result in a breach of,
any terms, condition or provision of, or constitute a default under, (a) the
Articles of Association or Bylaws of Buyer, (b) any agreement or instrument to
which Buyer is a party or by which it is bound, or (c) any material order,
judgment or decree to which Buyer is subject.
Section 3.3 Brokers. Buyer has not retained or otherwise
engaged or employed any broker, finder or any other person, or paid or agreed to
pay any fee or commission to any agent, broker, finder or other person, for or
on account of such person's acting as a broker or
finder in connection with this Agreement, or the Acquisition or the other
transactions contemplated hereby.
Section 3.4 Legal Proceedings. There is no action, suit or
proceeding pending against or affecting, or, to the knowledge of Buyer,
threatened against or affecting Buyer, or any of its assets, before any court or
arbitrator or any governmental body, agency or official that would, if decided
against Buyer, have a material adverse impact on the business, properties,
assets, liabilities or financial condition of Buyer (that are not already
reflected in Buyer's current financial statements) and which would have a
material adverse effect on Buyer's ability to consummate the Acquisition.
Section 3.5 Consents and Approvals. Except for the respective
consents and approvals of or filings or registrations with or notices to the
OTS, the FRB, the OCC and/or the FDIC or the expiration of any related
applicable waiting periods, no consents or approvals of or filings or
registrations with, or notices to any governmental agency, commission or
authority are necessary, and no waiting periods related thereto are required to
expire, in connection with (i) the execution and delivery by Buyer of this
Agreement and (ii) the consummation by Buyer of the transactions contemplated
hereby. To the best of Buyer's knowledge, there are not any facts or
circumstances which would prevent any required consents and approvals to the
Acquisition being obtained from the federal regulatory agencies listed above in
this Section 3.5.
Section 3.6 No Impending Material Adverse Events. As of the
date hereof, Buyer has no knowledge of any impending loss of business, or of any
other presently existing facts or circumstances which would be reasonably likely
to have a material adverse effect upon the financial condition, results of
operations, business, or prospects of Buyer.
Section 3.7 Full Disclosure. None of the information
concerning Buyer contained in this Agreement and the schedules hereto, or in any
of the lists, documents or instruments attached hereto or to be delivered by or
on behalf of Buyer as contemplated by a provision of this Agreement, or in any
of the applications or documents to be filed with governmental agencies in
connection with obtaining requisite approvals for the transactions contemplated
hereby, contains or will contain any untrue statement of a material fact or
omits or will omit to state any material fact necessary to make the statements
contained herein or therein, taken as a whole with all other such lists,
documents, instruments or other information so furnished in light of the
circumstances in which they are made, not misleading.
Section 3.8 Buyer's Financial Statements. Buyer has delivered
or will deliver to GSI copies of the statements of financial condition of Buyer
as of December 31, 1997, and as of December 31, 1998, and the related statements
of operations, changes in equity and cash flows for the six months period ending
December 31, 1997, and the year ended December 31, 1998, in each case
accompanied by the audit report of KPMG, LLP. The statements of financial
condition of Buyer referred to herein (including the related notes, where
applicable) fairly present the results of the operations, changes in equity and
cash flows of Buyer for the respective periods or as of the respective dates set
forth therein, in each case in conformity with generally accepted accounting
principles ("GAAP") consistently applied.
Section 3.9 Compliance with Laws.
3.9.1 To the knowledge of Buyer, it is in compliance
with all laws, rules, regulations, reporting and licensing
requirements, and orders applicable to its business or employees
conducting its business (including, but not limited to, those relating
to consumer disclosure and currency transaction reporting) the breach
or violation of which would reasonably be expected to have a material
adverse effect on the financial condition or operations of Buyer; and
3.9.2 Buyer is not a party to any cease and desist
order, written agreement or memorandum of understanding with, or a
party to any commitment letter or similar undertaking to, or is subject
to any order to, directive by, or is a recipient of any extraordinary
supervisory letter from, or has adopted any board resolutions at the
request of, federal or state governmental authorities (the "Regulatory
Authorities") charged with the supervision or regulation of the
operations of any of them nor has it been advised by any such
government authority that it is contemplating issuing or requesting (or
is considering the appropriateness of issuing or requesting) any such
order, directive, written agreement, memorandum or understanding,
extraordinary supervisory letter, commitment letter, board resolutions
or similar undertaking.
Section 3.10 Delays. Buyer is not aware of any matter that
could cause a delay in receiving the approval required by this Agreement.
Section 3.11 Year 2000 Compliance. To the knowledge of Buyer,
Buyer has taken all reasonable steps necessary to address the software,
accounting and record keeping issues raised in order for the data processing
systems used in the banking business conducted by Buyer to be substantially Year
2000 compliant on or before the end of 1999 and, except as may be set forth on
Exhibit 3.11 hereto, which is attached hereto and by this reference made an
integral part hereof, Buyer does not expect its future cost of addressing such
Year 2000 issues to be material.
ARTICLE IV
FURTHER COVENANTS AND AGREEMENTS OF THE PARTIES
-----------------------------------------------
Section 4.1 Conduct of Business. GSI and Xxxxxxx Bank,
respectively, warrant and covenant to Buyer that, between the date of this
Agreement, and the Closing Date, the business of GSI and of Xxxxxxx Bank,
respectively, shall (except with the prior written approval of Buyer), be
conducted in accordance with the following provisions:
4.1.1 Except as contemplated by this Agreement,
neither GSI nor Xxxxxxx Bank, respectively, shall engage in any
transaction or incur any obligations except in the Ordinary Course of
Business consistent with good corporate and banking practices. GSI and
Xxxxxxx Bank, respectively, shall each use its best efforts to maintain
in effect all approvals, licenses and authorizations from all federal
and state regulatory bodies and
officials and all other rights, approvals and consents required to
carry on their respective business as now being conducted by each of
them.
4.1.2 GSI and Xxxxxxx Bank shall each use its
respective best efforts to maintain and preserve its respective
business organization intact (including, to the extent consistent with
good business practice under the circumstances, the retention of its
respective employees) and maintain its relationships and goodwill with
deposit account holders, borrowers, employees and others having
business relationships with either GSI or Xxxxxxx Bank, respectively,
so that they will be preserved for Buyer on and after the Closing Date.
4.1.3 Each of GSI and Xxxxxxx Bank, respectively,
shall be maintained at all times as a corporation or federal savings
bank, as the case may be, duly organized, validly existing and in good
standing and shall be qualified to conduct its business as now being
conducted in accordance with all applicable laws.
4.1.4 Each of GSI and Xxxxxxx Bank, respectively,
shall take all steps reasonably necessary to maintain in force all of
its respective existing casualty, liability and other insurance
policies and fidelity bonds with respect to its respective business,
properties, employees and agents, or replace them with substantially
similar policies and bonds providing substantially the same coverage.
4.1.5 Neither GSI nor Xxxxxxx Bank, respectively,
shall make any change in their respective methods of accounting or in
their respective applications of generally accepted accounting
principles from the methods consistently applied throughout the periods
covered by the Financial Statements referred to in Section 2.5 of this
Agreement, except for changes required by changes in generally accepted
accounting principles and changes in applicable regulatory
requirements.
4.1.6 Each of GSI and Xxxxxxx Bank, respectively,
shall, at their sole cost and expense, maintain all of their respective
properties in their respective present repair, order and condition,
ordinary wear and tear excepted.
4.1.7 Neither GSI nor Xxxxxxx Bank, respectively,
shall (i) amend its respective Certificate of Incorporation, Charter or
Bylaws, as the case may be, except as specified herein, or as consented
to in advance by Buyer, (ii) or merge or consolidate with or into any
other corporation, (iii) effect any stock split, or change in any
manner the rights of the holders of its capital stock or the character
of its business or (iv) elect any additional directors or officers.
4.1.8 Neither GSI nor Xxxxxxx Bank, respectively,
shall redeem or issue any of their respective securities or enter into
any agreement providing for or granting any option, warrant, call,
commitment or any agreement of any character relating to the purchase,
sale, redemption or issuance of the respective securities of GSI or
Xxxxxxx Bank, nor shall GSI or Xxxxxxx Bank, respectively, declare or
pay any cash or stock
dividends on any of their respective shares of issued and outstanding
capital stock; except that GSI shall be expressly authorized to declare
a dividend in the amount, at the time and subject to the terms and
conditions imposed on such dividend by the express provisions of
Section 1.1.1 (iv) above.
4.1.9 Neither GSI nor Xxxxxxx Bank, respectively,
shall take any action or omit to take any action which, to their
respective knowledge, will cause a material breach of any of their
respective contracts, commitments or obligations, including, but not
limited to, their respective obligations under this Agreement.
4.1.10 Neither GSI nor Xxxxxxx Bank, respectively,
will (i) grant any increase in compensation or pay any bonus to any of
their respective officers or other employees except as expressly
provided in the Sellers' 1999 schedule of employee salary increases,
and cash bonuses, a true and complete copy of which has been provided
by Sellers to Buyer before the execution of this Agreement and is
attached hereto as Exhibit 4.1.10 to this Agreement and by this
reference made an integral part hereof, and/or except as provided for
by contracts in existence as of the date of this Agreement (the cash
bonuses to be granted by Sellers to Sellers' employees prior to the
Effective Time shall not exceed the sum of $10,000, in the aggregate,
as reflected on Exhibit 4.1.10 attached hereto); or (ii) enter into,
amend or alter any bonus, incentive compensation, profit sharing, stock
purchase, stock option, retirement, pension, group insurance, death
benefit or other fringe benefit, arrangement or trust agreement for the
benefit of officers or other employees of either GSI or Xxxxxxx Bank,
respectively, or any employment or consulting agreement thereof, other
than any actions needed to be taken to terminate or modify such
agreements in accordance with the requirements of this Agreement; or
(iii) increase the staff of either GSI or Xxxxxxx Bank, respectively,
or (iv) pay any deferred compensation or any other payments to any of
the respective directors, officers or employees of either GSI or
Xxxxxxx Bank; except for the regular board meeting fees payable to
Directors and Xxxxxxx Bank or the other compensation payable to
officers or employees of GSI or Xxxxxxx Bank in the Ordinary Course of
Business.
4.1.11 Each of GSI and Xxxxxxx Bank shall exercise
good faith and use their respective best efforts to duly comply with
all laws and regulations applicable to them and to the conduct of their
business, including the Community Reinvestment Act, and all applicable
anti-discrimination statutes and regulations regarding employment
practices and the extension or denial of credit. Each of GSI and
Xxxxxxx Bank, shall file all tax returns and pay all taxes required of
them and shall not extend or agree to the extension of any statutes of
limitations with regard to such tax returns or tax liabilities.
4.1.12 Without limiting any of the foregoing
covenants, each of GSI and Xxxxxxx Bank shall conduct its respective
business and affairs until the Closing hereunder in such manner that
all of the representations and warranties contained in Article II of
this Agreement required to be true at such time shall be true at such
time, and so that all its agreements and conditions contained in this
Agreement required to be performed by such time are so performed.
4.1.13 Neither GSI nor Xxxxxxx Bank, respectively,
shall (i) incur or guarantee any additional borrowings of any person or
(ii) pledge any of their assets, except, in each such case in the
Ordinary Course of Business and consistent with current business
practice, and good corporate and banking practices.
4.1.14 Neither GSI nor Xxxxxxx Bank shall purchase,
or sell, or contract to sell any of their respective assets except in
the Ordinary Course of Business, consistent with their current business
practice.
4.1.15 Between the date of this Agreement and the
Closing Date, neither GSI nor Xxxxxxx Bank, respectively, shall take
any of the actions, or allow any of the changes or matters to transpire
which are set forth above in Section 2.11 of this Agreement.
Section 4.2 Access and Information.
4.2.1 Consistent with applicable law, each of GSI and
Xxxxxxx Bank, respectively, will permit Buyer, through its designated
agents, accountants, counsel, auditors, and other representatives
(collectively referred to as "Agents") to make or cause to be made such
investigation of the business, properties and personnel of each of GSI
and Xxxxxxx Bank, respectively, as Buyer may reasonably deem necessary
or advisable prior to the Closing under the circumstances (other than
Sellers' internal documents and correspondence related solely to this
Agreement and/or protected by the attorney/client privilege as to the
Acquisition only). The Buyer and its Agents shall, at all reasonable
times and with reasonable notice given to GSI and Xxxxxxx Bank, as the
case may be, without unduly interfering with the normal business
operations of GSI or Xxxxxxx Bank, respectively, have full access to
their respective premises and to all of the respective properties,
books, contracts, commitments, and records of GSI or Xxxxxxx Bank. GSI
and Xxxxxxx Bank, respectively, shall, and each shall also authorize
and direct its respective agents, auditors, accountants, and counsel,
to fully cooperate with Buyer and its Agents in making available to
them all financial and other information requested, including, without
limitation, providing them with the right to examine all working papers
pertaining to audits made and to make copies and extracts thereof, and
full and complete access to all information concerning any litigation
in which any of them is currently involved. GSI and Xxxxxxx Bank,
respectively, agree to cause to be delivered to Buyer or to make
available to Buyer to the extent such documents or information exists,
or are in their possession or control, all of the items pertaining to
each of GSI or Xxxxxxx Bank, respectively, if any, as are set forth and
listed by Buyer on Exhibit 4.2.1 to this Agreement. Sellers shall not
be required to provide access to or to disclose information where such
access or disclosure would violate or prejudice the rights of any
customer, or would contravene any law, rule, regulation, order or
judgment to which Sellers are expressly subject. No investigation by or
on behalf of Buyer under this Section 4.2 or otherwise will affect any
of the representations and warranties of either GSI or Xxxxxxx Bank,
respectively, as contained in this Agreement.
4.2.2 Until the Closing, each of the Parties hereto
and their respective employees, agents, accountants, counsel, auditors
and other representatives shall keep confidential any information
(unless readily ascertainable from public information or sources)
obtained from the other party, except as may be required to be
disclosed to regulatory authorities, or in any requisite SEC filings,
or to the public, or to LFC's, Buyer's or GSI's shareholders,
respectively, in proxy and related materials. If this Agreement is
terminated, promptly after such termination all documents, working
papers or other written material obtained by one party from the other
party in connection with this Agreement shall be returned to the party
that provided such material and all additional copies thereof shall be
destroyed by the non-providing party and the parties shall comply with
all the provisions of section 8.1.1 of this Agreement, below,
concerning the treatment of Confidential Information.
4.2.3 Commencing with the date of this Agreement and
continuing until the first to occur of the Closing Date or the
termination of this Agreement in accordance with the terms and
provisions hereof, each of GSI and Xxxxxxx Bank, as the case may be,
shall promptly advise Buyer in writing of any matter relating to its
respective financial condition, operations, assets, liabilities or
business which arises or is discovered after the date of this
Agreement, and which if existing or known on the date hereof would have
been required to be set forth and described herein or in one of the
Exhibits to this Agreement.
Section 4.3 Cooperation. The Parties hereto shall cooperate
with each other in every way in carrying out the transactions contemplated
hereby, in obtaining all required regulatory and any other approvals and
authorizations therefor, and in executing and delivering all documents,
instruments or copies thereof deemed necessary or useful by either party hereto.
Buyer shall, at its sole cost and expense, promptly prepare and file such
regulatory applications as are necessary to secure all federal and state
approvals necessary to effectuate the transactions contemplated herein and GSI
and Xxxxxxx Bank, respectively, shall each assist Buyer with respect to any
necessary applications to be filed with the OCC, the OTS, the FRB and the FDIC,
respectively, provided, that the preparation and expense of all such
applications shall be the sole responsibility of Buyer. Each party shall have
the right to review and approve in advance all characterizations of the
information relating to it and made by the other party which appear in any
filing made in connection with the transactions contemplated by this Agreement.
Section 4.4 Buyer to Have No Control of GSI or Xxxxxxx Bank
Prior to the Closing Date. Prior to the Closing Date, Buyer will not control or
attempt to exercise any control (as that term is defined in the Bank Control
Act) of the respective business or affairs of either GSI or Xxxxxxx Bank. Prior
to the Closing Date, the management and policy control of GSI and Xxxxxxx Bank
will each reside solely in its respective officers and directors and the
election of its respective directors shall be solely the affair of their
respective shareholders.
Section 4.5 Employees and Benefits. All employees of GSI and
of Xxxxxxx Bank, respectively, will, upon the Closing Date, continue as the
respective employees of GSI and of Xxxxxxx Bank, but the continuation of said
employment thereafter shall be within the sole and
absolute discretion of the officers and directors of Buyer, except to the extent
otherwise specifically provided in this Agreement.
Section 4.6 Agreement Not to Negotiate. As a material
inducement to cause Buyer to enter into this Agreement, Sellers (subject to the
exercise of their fiduciary duties as advised by their counsel) hereby agree
that during the term of this Agreement they will not, either themselves, itself,
or through their, or its respective officers, directors, employees, agents,
accountants, counsel, representatives or others, (i) solicit any other
acquisition proposals, engage in any discussions concerning, or negotiate with
other persons or entities regarding, any other acquisition proposals, whether
formally or informally, or (ii) provide (except as may be required by law) any
non-public information documents or materials to any person or entity (other
than Buyer), or its agents, in connection with such proposals. If either of GSI
or Xxxxxxx Bank, respectively, violates this Section 4.6 in any respect, then,
and in such event, Buyer shall be entitled to immediately seek the specific
performance of this Agreement and GSI and Xxxxxxx Bank each specifically
acknowledge and agree that, then, and in such event, such equitable remedy will
be necessary and appropriate for Buyer to seek and that in such event a legal
remedy of damages would not be adequate to compensate Buyer for such a breach of
this Agreement.
Section 4.7 Alternative Structure. Notwithstanding any
provision of this Agreement to the contrary, Buyer may, with the written consent
of GSI, which consent shall not be unreasonably withheld or denied, elect,
subject to the filing of all necessary applications and the receipt of all
required regulatory approvals, to modify the structure of the acquisition of GSI
and Xxxxxxx Bank set forth herein; provided that (i) the federal income tax
consequences of any transactions created by such modification shall not be
changed, (ii) the consideration to be paid to the GSI Shareholders is not
thereby changed in kind or reduced in amount as a result of such modification,
and (iii) such modification will not materially delay or jeopardize receipt of
any required regulatory approvals or any other conditions to the obligations of
Buyer as set forth in Article V of this Agreement below.
Section 4.8 Environmental Audits of All Real Property Owned
During Last Five Years. GSI and Xxxxxxx Bank covenant and agree, at the
direction and control of Buyer, at Buyer's sole cost and expense, to obtain, as
expeditiously as possible, Phase I Environmental Audits of all parcels of real
property which either GSI or Xxxxxxx Bank now own or have owned at any time
during the five (5) year period of time immediately preceding the date this
Agreement is fully executed by the Parties. Within fifteen (15) days after the
execution of this Agreement, GSI and Xxxxxxx Bank will provide a list and
adequate legal descriptions of all such parcels of real property so owned by
them to Buyer and shall fully cooperate and assist the environmental consultants
selected by Buyer in performing such audits and in facilitating the prompt
completion thereof. If any of the Phase I Environmental Audits recommend the
conducting of a Phase II Environmental Audit of any such parcel of real property
owned or formerly owned by GSI or Xxxxxxx Bank then, and in such event, the
Phase II Environmental Audits shall be conducted by Buyer's environmental
consultants, as expeditiously as possible, at the sole cost and expense of
Buyer. Complete copies of all such Phase I and Phase II Environmental Audits so
obtained shall be provided to GSI and to Buyer as soon as they are available,
subject to the confidentiality provisions of this Agreement.
Section 4.9 Termination of the Benefit Plans. Each participant
in the Xxxxxxx Bank ESOP who is not fully vested on the Closing Date will, in
accordance with the existing terms of the Xxxxxxx Bank ESOP, become fully vested
in his or her respective Xxxxxxx Bank ESOP account as of the Effective Time. GSI
and Xxxxxxx Bank shall, at their sole cost and expense, take all necessary and
appropriate actions to cause all of the Benefit Plans, i.e., the Xxxxxxx Bank
ESOP, the Xxxxxxx Bank 401(k) Plan and the Xxxxxxx Bank Management Stock Bonus
Plan, each of which are described and defined in Sections 1.14.12, 1.14.13 and
1.14.14, above, respectively, to be completely terminated on the Closing Date,
or as soon thereafter as possible, in order that each of them will not have any
continuing existence insofar as GSI, Xxxxxxx Bank or Buyer is concerned and
neither GSI, Xxxxxxx Bank nor Buyer shall have any further or future liability
or responsibility for any of the Benefit Plans from and after the Closing Date.
The termination of each of the Benefit Plans shall be done in a manner complying
with all provisions of the applicable laws and regulations and with the express
terms and conditions of each of the Benefit Plans themselves. All funds to be
paid by Buyer to the Xxxxxxx Bank ESOP on the Closing Date to purchase all of
the Common Stock owned by the Xxxxxxx ESOP on the Closing Date, shall be held or
distributed by the Trustees of the Xxxxxxx Bank ESOP, as expeditiously as
possible, in a manner fully complying with all applicable laws and regulations
and the express terms of the Xxxxxxx Bank ESOP, subject to the requirement in
Section 1.14.16, above, that the Trustees of the Xxxxxxx Bank ESOP cause the
Xxxxxxx Bank ESOP to pay in full the then remaining balance of the ESOP Note to
GSI, or Xxxxxxx Bank, as the case may be, on the Closing Date (the ESOP Note has
a balance of $226,655.00 as of the date of this Agreement). Upon repayment of
the Xxxxxxx Bank ESOP Note, the assets of the Xxxxxxx Bank ESOP will be
allocated in accordance with the terms of the Xxxxxxx Bank ESOP. GSI, Xxxxxxx
Bank and the Directors, respectively, hereby covenant and agree to take all
actions necessary to terminate each of the Benefit Plans in accordance with the
terms and provisions of this Section 4.9 and to provide to Buyer on the Closing
Date evidence satisfactory to Buyer that each of the Benefit Plans has been, or
will expeditiously be, properly terminated and that neither Buyer, GSI nor
Xxxxxxx Bank will have any continuing liability or responsibility for operation
and maintenance of any of the Benefit Plans from and after the Closing Date.
Section 4.10 Filings, Notices and Financial Statements. During
the period commencing on the date hereof and ending on the Closing Date, Buyer
shall provide to Sellers and Sellers shall provide to Buyer copies of all
filings made by either Buyer or Seller, respectively, as the case may be, on or
after the date hereof with the FRB, OTS, OCC and/or FDIC and any other federal
or state regulatory agency which has authority to regulate Sellers or Buyer or
any of their respective subsidiaries within three (3) business days following
any such filing.
Section 4.11 Termination of Computer Servicing Agreement with
BISYS, INC. On or before June 1, 1999, Xxxxxxx Bank will provide written notice
to BISYS, INC. ("BISYS") of its intent to completely terminate and discontinue,
effective as of December 31, 1999, all data processing and other services
currently being provided to Xxxxxxx Bank under the terms and conditions of that
certain Computer Servicing Agreement originally entered into by and between
Xxxxxxx Bank and COMAC Joint Venture dated January 1, 1985 ("BISYS Agreement"),
as subsequently assigned to BISYS by COMAC Joint Venture and assumed by
BISYS, with Xxxxxxx Bank's consent by virtue of that certain Acknowledgment and
Assignment executed and delivered by COMAC Financial Systems, Inc. (The assignee
of COMAC Joint Venture), BISYS and Xxxxxxx Bank dated September 8, 1992 ("BISYS
Assignment"). Xxxxxxx Bank has delivered to Buyer prior to the date of this
Agreement, true, complete and correct copies of the BISYS Agreement and the
BISYS Assignment, together with any and all amendments and modifications
thereto. The written notice of termination of the BISYS Agreement, effective
December 31, 1999, to be given by Xxxxxxx Bank on or before June 1, 1999,
pursuant to this Section 4.11 shall be in form and substance acceptable to
Buyer.
Section 4.12 Modification of Xxxx and Xxxxxx Employment
Agreements. Sellers agree to use their best efforts to obtain and provide to
Buyer, on or before the Closing Date, from Xxxx and Warner a written
cancellation, release and surrender (in form and substance satisfactory to
Buyer) of those certain Change in Control Severance Agreements, each dated
February 11, 1997, by and between GSI and Xxxx and Xxxxxx, respectively, such
that such agreements shall cease, terminate, be of no further force and effect
and impose absolutely no obligations or liabilities on either GSI or Buyer from
and after the Closing Date. In addition, Xxxxxxx Bank will use its best efforts
to execute and enter into written modifications or amendments to the Xxxx
Employment Agreement and the Warner Employment Agreement, respectively, which
will amend those employment agreements to delete in their entirety therefrom the
provisions of Section 12(b)(ii) and (v) thereof, with all other provisions of
the Xxxx and Xxxxxx Employment Agreements to remain in full force and effect as
originally stated. The said amendments to the Xxxx and Warner Employment
Agreements shall be in form and substance satisfactory to Buyer.
ARTICLE V
CONDITIONS TO OBLIGATIONS OF BUYER TO CLOSE
-------------------------------------------
The obligations of Buyer to complete and consummate the
transactions provided for in this Agreement shall be subject to the complete
satisfaction, on or prior to the Closing Date, of each of the following
conditions precedent, provided that any such condition (other than those set
forth in Section 5.1 below) may be waived by Buyer in writing.
Section 5.1 Regulatory Approvals. To the extent required by
applicable law and regulations, (i) all applicable state and federal regulatory
authorities having jurisdiction over the approval of this transaction, to
include, without limitation, the OCC, the FDIC, the FRB and the OTS, shall have
approved this Agreement and the transactions contemplated by this Agreement
without the imposition of any condition or conditions which in the reasonable
opinion of the Buyer, are unduly burdensome; (ii) all required notices have been
published and all applicable waiting periods, including those under the Xxxx
Xxxxx Xxxxxx Act, if applicable, have expired.
Section 5.2 Performance of Agreements. Each of the Sellers
shall have performed all of their respective conditions, duties and obligations
contained in this Agreement required to be performed by each of them prior to
the Closing and specifically shall have obtained (i) the resolution of the Board
of Directors authorizing and approving this Agreement and submitting it to a
vote of the GSI Shareholders for approval, and (ii) the valid approval by a
majority of the Shares of Common Stock owned by the GSI Shareholders of this
Agreement and of the Acquisition, as expeditiously as possible after the date
this Agreement is fully executed by the Parties, in a manner sufficient to cause
the provisions of 18 O.S. 1991, ss.1090.1 to be applicable to this Agreement and
the Acquisition for all purposes, and shall have provided evidence to Buyer, in
form reasonably satisfactory to Buyer, that such requisite Board of Directors'
and GSI Shareholders' approvals have been properly obtained. In addition, GSI
shall have evidenced, or be able to evidence to Buyer on the Closing Date, that
each of the Benefit Plans will be on the Closing Date, or as expeditiously as
possible thereafter, completely terminated in accordance with the requirements
of Sections 1.14.12, 1.14.13 and 1.14.14, respectively, and of Section 4.9 of
this Agreement, above. Each of the Directors shall be prepared to transfer and
convey to Buyer all of the Shares and Stock Options which they own on the
Closing Date in the manner required by this Agreement.
Section 5.3 Continued Accuracy of Representations and
Warranties. The representations and warranties of GSI and of Xxxxxxx Bank
(considered individually and collectively) contained in Article II of this
Agreement must have been accurate in all material respects as of the date of the
execution of this Agreement and must be accurate in all material respects on and
as of the Closing Date with the same effect as if made on that date, without
giving effect to any supplement made to the Exhibits to this Agreement after the
date of the execution of this Agreement.
Section 5.4 Delivery of Closing Certificate by GSI and Xxxxxxx
Bank. Buyer shall have received a certificate, dated the Closing Date, in form
satisfactory to Buyer, of GSI and Xxxxxxx Bank, respectively, executed on behalf
of GSI by its President and on behalf of Xxxxxxx Bank by its President and by
its Chief Financial Officer, certifying to (i) the Purchase Price, less any and
all deductions, and (ii) to the satisfaction of the conditions set forth in
Sections 5.2, 5.3, 5.5, 5.9 and 5.10 of this Article V to the best of the
signers' knowledge (the "GSI Closing Certificate").
Section 5.5 Absence of Material Adverse Changes. There shall
have been no material adverse change in the business, assets, prospects or
financial condition of GSI and its subsidiary bank, Xxxxxxx Bank, taken as a
whole since December 31, 1998 (which will include, without limitation, the
resignations of more than two (2) of their key executive employees, i.e., Vice
President or above of Xxxxxxx Bank, from their employment, or such key executive
employees giving clear indication to Buyer, GSI or Xxxxxxx Bank that they intend
to resign from such employment, on or before the Closing Date or shortly
thereafter, in anticipation of, or as a result of, the consummation of the
Acquisition), other than changes which are the result of changes in laws or
regulations or other factors affecting banking institutions, in general, and
except for changes not prohibited by this Agreement.
Section 5.6 Opinion of Counsel of GSI and Xxxxxxx Bank. Buyer
shall have received from counsel for GSI and Xxxxxxx Bank an opinion of counsel,
dated the Closing Date, in the form and substance set forth in Exhibit 1.14.9 to
this Agreement. In rendering such opinion, counsel for GSI and Xxxxxxx Bank may
rely upon the opinion of qualified counsel, upon certificates of government
officials and officers of GSI and Xxxxxxx Bank, respectively, provided that such
counsel states that such counsel reasonably believes that such counsel and Buyer
may justifiably rely upon such other opinions and the accuracy of such
certificates, and provided further that such other opinions and certificates are
delivered to Buyer concurrently with such counsel's opinion.
Section 5.7 Report of Pension Benefit Consultants Retained by
Buyer as to Each of the Benefit Plans. Buyer shall have received the evaluation
and report of the pension benefit consultants of Buyer's choosing, addressed to
GSI and Buyer, in form and substance satisfactory to Buyer, opining or finding
that each of the Benefit Plans was properly and validly established, has been
and is qualified as an employee benefit plan by the Internal Revenue Service,
has been properly operated and maintained by GSI and Xxxxxxx Bank until the
Closing Date and is being properly terminated by GSI or Xxxxxxx Bank, as the
case may be, on the Closing Date, or as expeditiously thereafter as possible, in
accordance with all applicable laws and regulations and the express terms and
provisions of each of the Benefit Plans, and that such consultants, do not know,
or have any reason to know, of any materially adverse tax consequences or other
liabilities that may be incurred by GSI, Xxxxxxx Bank or Buyer, respectively, by
reason of the operation, maintenance and termination of any of the Benefit Plans
(other than (i) any amounts reflected for any such liabilities on the Financial
Statements of GSI and Xxxxxxx Bank; (ii) any amounts ordinarily and customarily
incurred with regard to the termination of such plans; and (iii) any amounts
disclosed b Sellers to Buyer on Exhibit 5.7, which is attached hereto and by
this reference made an integral part hereof).
Section 5.8 Environmental Audits Do Not Disclose the Existence
of a Significant Hazardous Materials Problem. None of the Phase I or Phase II
Environmental Audits to be obtained by GSI and Xxxxxxx Bank and provided to
Buyer pursuant to the requirements of Section 4.9, above, reveals the presence
of Hazardous Materials, as defined above, or the violation of any Environmental
Laws, as defined above, with regard to any of the real property owned by GSI or
Xxxxxxx Bank now, or in the immediately preceding five (5) year period of time,
which would, in the reasonable opinion of Buyer, impose a material liability, or
a material potential liability (legal or economic) to Buyer if the Acquisition
was to be consummated.
Section 5.9 Absence of Litigation. There shall not be pending
any action in any court of competent jurisdiction seeking to enjoin consummation
of the transactions contemplated by this Agreement, or any action which, in the
opinion of counsel for Buyer, after an independent review of readily available
facts and applicable law, poses a significant risk of resulting in the
divestiture by Buyer of GSI or Xxxxxxx Bank, or any material portion of the
assets of either GSI or Xxxxxxx Bank, respectively, or otherwise threatens to
materially impair the value of the assets of either GSI or Xxxxxxx Bank,
respectively, or poses the possible assessment of significant damages against or
the imposition of any other materially adverse consequences upon GSI or Xxxxxxx
Bank.
Section 5.10 Third Party Consents. GSI and Xxxxxxx Bank,
respectively, as the case may be, shall have received the consent of all third
parties who are subject to agreements with any of them and which agreement
requires or purports to require the consent of the other or another party
thereto to the transactions contemplated by this Agreement.
Section 5.11 Resignation of Directors and Officers. Buyer
shall have received currently dated original, written resignations from all of
the current Directors and officers of GSI and Xxxxxxx Bank, respectively
(effective on the Closing Date).
Section 5.12 Executive Officers' and Directors' Releases.
Buyer shall have received the currently dated original Releases, in the form and
substance set forth in Exhibit 1.13.10 to this Agreement, from each of the
executive officers and each of the Directors of GSI and Xxxxxxx Bank,
respectively.
ARTICLE VI
CONDITIONS TO OBLIGATIONS
OF GSI AND XXXXXXX BANK
-----------------------
The obligations of GSI and Xxxxxxx Bank to complete the
transactions provided for in this Agreement shall be subject to the
satisfaction, at or prior to the Closing Date, of each of the following
conditions precedent by Buyer, provided that any such condition (other than
those set forth in Section 6.3 below) may be waived by GSI or Xxxxxxx Bank in
writing.
Section 6.1 Performance of Agreements. Buyer shall have
performed all conditions, duties and obligations contained in this Agreement
required to be performed by it prior to the Closing Date, and shall be prepared
to pay the Purchase Price, in full, to all of the GSI Shareholders and all of
the Stock Option Holders on the Closing Date.
Section 6.2 Continued Accuracy of Representations and
Warranties. The representations and warranties of Buyer contained in Article III
of this Agreement shall, be true and correct in all material respects on and as
of the Closing Date with the same effect as if made on that date.
Section 6.3 Regulatory Approvals. To the extent required by
applicable law and regulations, all applicable federal and state regulatory
authorities, if any, to include, without limitation, the OCC, the FDIC, the FRB
and the OTS, shall have approved this Agreement and the transactions
contemplated by this Agreement, without the imposition of any condition or
conditions which in the reasonable opinion of GSI are unduly burdensome and all
applicable waiting periods have expired and all required notices have been
published.
Section 6.4 Delivery of Buyer's Closing Certificate. GSI and
Xxxxxxx Bank shall have received a certificate, dated the Closing Date, of
Buyer's President, certifying to (i) the Closing Date and the Effective Time;
(ii) the Purchase Price, less any and all deductions; and (iii) to the
satisfaction of the conditions set forth in Sections 6.1, 6.2 and 6.5 of this
Article VI to the best of the signer's knowledge (the "Buyer's Closing
Certificate").
Section 6.5 Absence of Litigation. There shall be no pending
or threatened litigation or administrative proceeding seeking to restrain,
prevent, rescind or change the terms of the transaction contemplated by this
Agreement or to obtain damages in connection therewith or any preliminary
injunction restraining such transactions.
Section 6.6 Approval of Acquisition by GSI Shareholders. The
valid approval of this Agreement and of the Acquisition has been made by a
majority of the Shares of Common Stock owned by the GSI Shareholders in the
manner required by 18 O.S. 1991 ss. 1090.1, and by the applicable provisions of
GSI's Certificate of Incorporation and By-Laws.
Section 6.7 Opinion of Counsel of Buyer. Sellers shall receive
from
counsel for Buyer an opinion of counsel, dated the Closing Date, substantially
in the form set forth in Exhibit 1.13.6 to this Agreement. In rendering such
opinion, counsel for Buyer may rely upon the opinion of qualified counsel, upon
certificates of government officials and officers of Buyer, provided that such
counsel states that such counsel reasonably believes that such counsel and
Sellers may justifiably rely upon such other opinions and the accuracy of such
certificates, and provided further that such other opinions and certificates are
delivered to Sellers concurrently with such counsel's opinion.
Section 6.8 Fairness Opinion. GSI shall have received an
opinion from Xxxxx dated no more than three (3) days prior to the date the proxy
statement pertaining to the shareholder meeting to be held to vote on the
Acquisition is mailed to the GSI Shareholders (and if it becomes necessary to
resolicit proxies thereafter, dated no more than three (3) days prior to the
date of any substantive amendment to that proxy statement), to the effect that,
in Xxxxx'x opinion, the consideration to be paid to the GSI Shareholders under
this Agreement for the Acquisition of their Shares is fair to them from a
financial point of view ("Xxxxx Fairness Opinion").
ARTICLE VII
TERMINATION, AMENDMENT AND WAIVER; REMEDIES
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Section 7.1 Termination by Mutual Consent. This Agreement may
be terminated prior to the Closing Date by the mutual written consent of the
Buyer and GSI.
Section 7.2 Termination by Any Party. This Agreement may be
terminated by either GSI or Buyer after (i) receipt of written notice of final
denial by any regulatory authority having jurisdiction of the transactions
contemplated hereby, or (ii) if a vote of the GSI Shareholders is taken and GSI
Shareholders possessing a majority of the issued and outstanding stock of GSI
fail to vote to approve the Acquisition at the meeting held for that purpose (or
any adjournment or postponement thereof) in accordance with the requirements of
18 O.S. 1991, ss. 1090.1.
Section 7.3 Termination by Buyer. Buyer may terminate this
Agreement by giving written notice to GSI (i) if any condition in Article V
hereof which must be fulfilled shall not have been fulfilled on or before the
date specified for the fulfillment thereof; provided, however, that such notice
shall include a statement of the grounds thereof and GSI shall have twenty (20)
days thereafter to cure the events or conditions cited in such notice (to the
extent curable) and if GSI cures the events or conditions giving the rise to
such grounds to the satisfaction of Buyer, Buyer shall not have any right to
terminate this Agreement based upon such specified events or conditions. If
Buyer does elect to terminate this Agreement, pursuant to this provision, and
GSI is unable to timely cure such default or breach within the said twenty (20)
day period, then, in such event, this Agreement shall be null, void and of no
further force and effect and none of the Parties hereto shall have any further
rights, duties or liabilities hereunder unless otherwise expressly provided in
this Agreement, except as otherwise specifically provided by Sections 4.2.2,
8.1.1, 8.1.2 or 7.9 of this Agreement.
Section 7.4 Termination by GSI. GSI may terminate this
Agreement by giving written notice to Buyer if any condition in Article VI
hereof which must be fulfilled before GSI is obligated to consummate the
transactions contemplated hereby shall not have been fulfilled on or before the
date specified for the fulfillment thereof; provided, however, that such notice
shall include a statement of the grounds thereof and Buyer shall have twenty
(20) days thereafter to cure the events or conditions cited in such notice (to
the extent curable) and if Buyer cures the events or conditions giving rise to
such grounds, GSI shall not have any right to terminate this Agreement based
upon such events or conditions. If GSI does elect to terminate this Agreement,
pursuant to this Section, and Buyer is unable to timely cure its breach or
default within said twenty (20) day period of time, then, and in such event,
this Agreement shall be null, void and of no further force and effect, and none
of the Parties hereto shall have any further rights, duties or liabilities
hereunder, except as otherwise specifically provided by Sections 4.2.2, 8.1.1,
8.1.2, or 7.8 of this Agreement, or by the Escrow Agreement.
Section 7.5 Termination by Expiration. If the transactions
contemplated by this Agreement have not been consummated prior to December 31,
1999, any Party hereto may elect to terminate this Agreement by giving written
notice to the other Party hereto; provided that this right to terminate shall
not be available to any Party hereto whose failure to perform an obligation
under the Agreement has been the cause of, or has resulted in, the failure of
the transactions contemplated herein to be consummated by December 31, 1999.
Section 7.6 Amendment. This Agreement may be amended or
modified in whole or in part at any time by an agreement in writing executed by
all of the Parties hereto.
Section 7.7 Waiver. At any time prior to the Closing Date, any
of the Parties to this Agreement may, on their own respective behalf:
7.7.1 waive any inaccuracies in the representations
and warranties by the other Party contained herein or in any document
delivered by the other Party pursuant hereto; or
7.7.2 waive compliance by the other Party with the
covenants, agreements or conditions contained herein.
Any agreement to such waiver shall be valid only if set forth
in an instrument in writing executed by a duly authorized officer or
representative of the Party granting such waiver.
Section 7.8 Remedies Upon Buyer's Failure or Refusal to
Consummate the
Acquisition. In the event of the failure or refusal of Buyer to consummate the
Acquisition under this Agreement despite the full satisfaction of all of the
conditions to Buyer's obligations to consummate the Acquisition as set forth in
Article V of the Agreement, other than as a result of a failure or refusal of
the Sellers to comply in some material respect with the terms and conditions of
this Agreement (in addition to Sellers' right to terminate this Agreement in
accordance with Section 7.4, above, in such event), in those circumstances,
Buyer and Sellers agree that Sellers will incur expenses related to the
Acquisition contemplated by this Agreement and that it is extremely difficult
and impracticable to ascertain the extent of the detriment to Sellers caused by
the breach or default by Buyer under this Agreement and the failure on Buyer's
part to consummate the Acquisition contemplated by this Agreement under such
circumstances, or the amount of compensation which Sellers should receive as a
result of Buyer's said failure or refusal to consummate the Acquisition under
the foregoing circumstances. Therefore, Buyer and Sellers do hereby agree that a
reasonable estimate of the total net detriment that Sellers would suffer in the
event that Buyer fails and refuses to consummate the Acquisition under this
Agreement under the circumstances set forth and described in the first sentence
of this section, is and shall be, as Sellers' sole and exclusive remedy under
this Agreement in such event (whether at law or in equity), an amount equal to
the Xxxxxxx Money Deposit, which has been paid by the Buyer to the Escrow Agent
pursuant to the terms and provisions of Section 1.11 of this Agreement and the
Escrow Agreement, which said Xxxxxxx Money Deposit, in such event, shall be paid
or disbursed to the Sellers by the Escrow Agent in accordance with the specific
terms and conditions of the Escrow Agreement. Said amount of the Xxxxxxx Money
Deposit shall be the full, agreed and liquidated damages for the failure or
refusal of the Buyer to consummate the Acquisition under the circumstances
described above in this Section, all other claims to damages or any other
remedies of any kind or nature (legal or equitable) being herein expressly
waived and relinquished by Sellers. The payment of such amount to Sellers as
liquidated damages is not intended as a forfeiture or penalty, but rather is
intended to constitute liquidated damages to Sellers for Buyer's failure or
refusal to consummate the Acquisition under the circumstances described above in
this section. Upon the failure or refusal of the Buyer to consummate the
Acquisition on the grounds described above in this Section, this Agreement shall
be terminated and none of the Parties hereto shall have any further rights or
obligations hereunder, except as otherwise specifically provided by Sections
4.2.2, 8.1.1, 8.1.2 and this Section 7.8 of this Agreement and for the right of
Sellers to collect such liquidated damages in the amount of the Xxxxxxx Money
Deposit, plus all interest accrued thereon, from the Escrow Agent, to the extent
not previously disbursed by the Escrow Agent to the Sellers in accordance with
the Escrow Agreement.
Section 7.9 Remedies Upon Sellers' Failure or Refusal to
Consummate the Acquisition. In the event of a failure or refusal of the Sellers
to consummate the Acquisition under this Agreement despite the full satisfaction
of all of the conditions to Sellers' obligations to consummate this Agreement as
set forth in Article VI of the Agreement, other than as a result of a failure or
refusal of the Buyer to comply in some material respect with the terms and
conditions of this Agreement, the Buyer, as its sole and exclusive remedies,
shall be entitled to either (i) terminate this Agreement pursuant to the
provisions of Section 7.3, above, and, in such event, shall receive a prompt
payment or distribution as a refund or return of the Xxxxxxx Money Deposit,
together with all interest earned thereon, from the Escrow Agent; or (ii)
enforce specific
performance of this Agreement, in which event, Sellers agree that such equitable
remedy will be necessary and appropriate for Buyer to seek and that in such
event a legal remedy of damages would not be adequate to compensate Buyer for
such a breach of this Agreement by Sellers under the circumstances described
above in this Section 7.9. However, if a court considering the request for
specific performance determines that both (i) a breach of this Agreement
resulted from the exercise of the fiduciary duties of the board of directors of
Sellers as advised by their counsel in connection with another acquisition
proposal obtained in compliance with Section 4.6 of this Agreement following the
approval of this Agreement by GSI Stockholders and (ii) specific performance
would be inequitable to the GSI Stockholders because of their approval of this
Agreement prior to the Sellers' consideration of another acquisition proposal,
then specific performance will not be required. The foregoing remedies shall be
the sole and exclusive remedies of Buyer in the event of Sellers' failure or
refusal to consummate the Acquisition under the circumstances described above in
this Section, except for those rights and obligations accorded to Buyer by
Sections 4.2.2, 8.1.1, 8.1.2 and this Section 7.9 of this Agreement which shall
specifically survive the termination of this Agreement.
ARTICLE VIII
GENERAL AND MISCELLANEOUS PROVISIONS
------------------------------------
Section 8.1 Confidentiality.
8.1.1 Buyer acknowledges and agrees that the
information to be provided by GSI and Guthrie Bank to Buyer under this
Agreement and with regard to the transactions contemplated by this
Agreement will contain information, reports and financial data which
are confidential in nature and the property of GSI and Guthrie Bank, as
the case may be (the "Confidential Information"). Accordingly, Buyer
agrees that it, and any of its directors, officers, attorneys,
accountants, employees or other agents that are given access to the
Confidential Information, agree to be bound by the terms and provisions
of this Section 8.1 of the Agreement. In consideration of GSI and
Guthrie Bank providing Buyer with the Confidential Information, Buyer
agrees to keep the Confidential Information in strict confidence,
except as otherwise provided by this Agreement, and in order to
maintain its confidentiality, Buyer agrees that it will not use or
allow the use for any purpose of any Confidential Information other
than in connection with preparing, evaluating and performing the
transaction to be consummated pursuant to this Agreement. Buyer will
not disclose or allow disclosure to others of any of the Confidential
Information, except as provided herein and except to officers,
employees, directors, attorneys, accountants or agents of Buyer who are
actively and directly participating in Buyer's work in connection with
the consummation of the transaction contemplated by this Agreement and
Buyer will use its best efforts to cause all such officers, employees,
directors, attorneys, accountants or agents to observe the terms of
this section. Finally, Buyer agrees not to make or allow to be made
copies of any of the Confidential Information except as necessary to
perform the work to be performed by Buyer in conjunction with its
evaluating and consummating the transaction contemplated by this
Agreement.
8.1.2 The provisions of this Section 8.1 shall be
inoperative as to particular portions of the Confidential Information
if such information (i) becomes generally available to the public other
than as a result of a disclosure by Buyer, its officers, directors,
attorneys, accountants, employees or agents; (ii) was available to
Buyer on a non-confidential basis prior to its disclosure to Buyer by
GSI or Guthrie Bank, or their respective officers, employees,
directors, accountants, counsel, agents, advisors or representatives,
(iii) becomes available to Buyer on a non-confidential basis from a
source other than GSI or Guthrie Bank, or their respective officers,
employees, directors, accountants, counsel, agents, advisors or
representatives, unless Buyer knows, after due inquiry, that such
source is not entitled to make the disclosure of such information to
it; or (iv) is disclosed to the OCC, FRB, OTS or FDIC, or any other
federal or state regulatory authority having jurisdiction over Buyer,
or GSI or Guthrie Bank, upon a proper and valid request being made
therefor by such agency, or by Buyer, or Buyer's affiliate, LFC, or by
GSI, with regard to any required securities filing made by LFC or GSI
with the SEC, the American Stock Exchange, NASDAQ and/or the Oklahoma
Securities Commission or with their respective public shareholders. The
provisions of this Section 8.1 shall be binding upon Buyer and its
directors, officers, employees, accountants, attorneys and agents for a
period of two (2) years from May 1, 1999, or until the Closing Date, if
the transaction contemplated by this Agreement is consummated,
whichever shall first occur. If Buyer is requested by any court or
governmental agency or authority (other than the aforesaid state or
federal regulatory authorities) to disclose any of the Confidential
Information, then it will provide GSI with prompt notice of such
request or requirement. GSI may then either seek appropriate protective
or other injunctive relief from all or part of such request or
requirement or waive the Buyer's compliance with the provisions of this
Section 8.1 pertaining to the Confidential Information so sought with
respect to all or any part of such request or requirement to produce
such Confidential Information. If, after GSI has had a reasonable
opportunity to seek such protective or injunctive relief, GSI has
failed to obtain such relief, and, in the opinion of Buyer's counsel,
Buyer believes it is legally compelled to disclose any of the
Confidential Information to such court, agency, arbitrator or
authority, then Buyer may disclose that portion of the Confidential
Information which its counsel advises it that it is so compelled to
disclose. In no event will Buyer oppose any action by GSI to obtain
injunctive or other appropriate protective relief and/or other reliable
assurance that confidential treatment will be accorded to the
Confidential Information disclosed to such court, agency, arbitrator or
other authority in such instances.
Section 8.2 Entire Agreement. The terms and conditions of this
Agreement (i) constitute the entire agreement and understanding between the
Buyer, GSI and Guthrie Bank; (ii) supersede all prior agreements and
understandings, written or oral, between the Buyer, GSI and Guthrie Bank; and
(iii) may not be modified or amended except by an instrument mutually executed
and delivered by the Buyer, GSI and Guthrie Bank.
Section 8.3 Governing Law. The terms and conditions of this
Agreement shall be governed by and construed in accordance with federal law, to
the extent applicable, and otherwise by the laws and decisions of the State of
Oklahoma.
Section 8.4 Notices. Any notice or other communication
required or permitted under this Agreement, or convenient to the Buyer, GSI or
Guthrie Bank in the consummation of the transactions contemplated hereby, shall
be deemed delivered when (i) three (3) days after deposited in a receptacle of
the United States Postal Service, as registered or certified mail, return
receipt requested, postage prepaid, (ii) sent by electronic facsimile
transmission (if receipt is verified), (iii) personally delivered, or (iv) one
(1) day after received by an overnight courier service (which obtains a receipt
evidencing delivery) and shall be addressed as follows:
(i) If to the Directors, Xxxxxxx X. Xxxxxxxxxx, President
GSI or Guthrie Bank: and Chief Executive Officer
Guthrie Savings, Inc. and
Guthrie Federal Savings Bank
000 Xxxxx Xxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000-0000
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
with a copy to: Xxxxxxx Xxxxx, Esq.
Xxxxxxx, Spidi, Sloane & Xxxxx, P.C.
One Franklin Square
1301 "K" Street, N.W., Xxxxx 000 Xxxx
Xxxxxxxxxx, X.X. 00000
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
(ii) If to Buyer: Xxxxxx X. Xxxxxxxx, Chairman of the Board
of Directors and Chief Executive Officer
Local Oklahoma Bank, F.S.B.
0000 X.X. 00xx Xxxxxx
Xxxxxxxx Xxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
with a copy to: Xxxxxxx X. Xxxx, Esq.
Fellers, Snider, Xxxxxxxxxxx,
Xxxxxx & Xxxxxxx
Bank One Tower
000 X. Xxxxxxxx, Xxxxx 0000
Xxxxxxxx Xxxx, XX 00000-0000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Section 8.5 Successors. The terms and conditions hereof shall
be binding upon and inure to the benefit of the respective successors, assigns,
heirs and personal representatives of the Directors, GSI and Guthrie Bank and of
the Buyer.
Section 8.6 Attorney Fees, Costs and Expenses. Except as
otherwise expressly provided herein, each of the Parties hereto shall pay its
own respective legal and accounting fees and all other expenses and fees
incurred by it in connection with the transactions contemplated by this
Agreement. Should either the Buyer, GSI or Guthrie Bank employ an attorney or
attorneys to enforce any of the terms and conditions hereof, or to protect any
right, title or interest created or evidenced hereby, the non-prevailing party
in any action pursued in courts of competent jurisdiction shall pay to the
prevailing party all reasonable costs, damages, and expenses, including
reasonable attorneys' fees, expended or incurred by the prevailing party.
Section 8.7 Press Releases and Public Statements. No party to
this Agreement shall make, issue or release any public announcement, statement
or acknowledgment of the existence of, or publicly reveal the terms, conditions
or the status of, the transactions provided for herein without first obtaining
the consent to such announcement, statement, acknowledgment, or revelation from
the other Parties hereto, provided, however, that Buyer, or its affiliates, or
GSI, may make any such release or announcement which, in the opinion of counsel
for the Buyer or GSI, respectively, is necessary or appropriate for Buyer, or
its affiliates, or GSI, as the case may be, to make in order to comply with
applicable laws or regulations, to include, without limitation, any such
release, announcement or filing which Buyer, or its affiliate, LFC, or GSI, is
required to make pursuant to the applicable provisions of federal or state
securities laws, or the rules and requirements of the SEC, American Stock
Exchange or NASDAQ.
Section 8.8 Survival of Representations and Warranties. If the
Acquisition is consummated or this Agreement is terminated pursuant to Article
VII, above, then, and in either such event, the representations and warranties
made by GSI and Guthrie Bank in Article II and by Buyer in Article III,
respectively, in this Agreement shall not survive the Closing Date hereunder.
Section 8.9 Assignment and Legal Effect. None of the Parties
to this Agreement may assign any of their respective rights, obligations or
duties under this Agreement to any other person without the prior written
consent of all other Parties hereto. Any assignment in contravention of this
provision shall be void. Anything in this Agreement to the contrary
notwithstanding, the Parties hereto shall not be required to take any action
under this Agreement which is found by the final decision of appropriate federal
or state governmental authorities to be inconsistent or in conflict with
applicable federal or state laws or regulations pertaining to any of the Parties
hereto.
Section 8.10 No Third-Party Beneficiaries. Execution of this
Agreement by the Parties hereto is not intended to and does not confer any
benefits or rights on (contractually or otherwise) any person or entity not a
party to this Agreement unless otherwise expressly stated herein.
Section 8.11 Time. Time is of the essence to the performance
of the terms and conditions of this Agreement, provided, however, that if the
final date of any period which is set for a time provision under this Agreement
falls on a Saturday, Sunday or legal holiday under the laws of the United States
of America or the State of Oklahoma, in such event the time of such
period shall be extended to the next day which is not a Saturday, Sunday or
legal holiday.
Section 8.12 Severability. If any of the terms and conditions
of this Agreement shall for any reason be held to be invalid, illegal or
unenforceable in any respect, such invalidity, illegality or unenforceability
shall not affect any other of the terms and conditions hereof and the terms and
conditions hereof shall be thereafter construed as if such invalid, illegal or
unenforceable term or conditions had never been contained herein.
Section 8.13 Counterparts. This Agreement may be executed in
any number of counterparts, and each counterpart hereof shall be deemed to be an
original instrument, but all counterparts hereof taken together shall constitute
one and the same instrument.
Section 8.14 Additional Acts. In addition to the acts and
deeds recited herein and contemplated hereby to be performed, executed and/or
delivered by them, each of GSI, Guthrie Bank and Buyer, hereby agree to perform,
execute and/or deliver or cause to be performed, executed and/or delivered at
the Closing hereunder and thereafter any and all such further acts, deeds and
assurances as the Buyer or GSI may reasonably require to (i) invest in the Buyer
the complete ownership of and clear title to all assets and stock of GSI and
Guthrie Bank, and (ii) to consummate the Acquisition and all of the other
transactions contemplated by this Agreement.
Section 8.15 Headings. The headings herein are for reference
purposes only and shall not affect the meanings or interpretation of the terms
and conditions of this Agreement.
Section 8.16 Interpretation. Whenever the context hereof shall
so require, the singular shall include the plural, the male gender shall include
the female gender and neuter, and vice-versa.
