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AGREEMENT AND PLAN OF MERGER
DATED AS OF APRIL 25, 2006
BY AND BETWEEN
FIRST BANCORP OF INDIANA, INC.
AND
HOME BUILDING BANCORP, INC.
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TABLE OF CONTENTS
Page No.
Introductory Statement............................................................................................1
ARTICLE I - DEFINITIONS...........................................................................................1
ARTICLE II - THE MERGER...........................................................................................6
2.1 The Merger.....................................................................................6
2.2 Closing........................................................................................6
2.3 Effective Time.................................................................................6
2.4 Effects of the Merger..........................................................................6
2.5 Effect on Outstanding Shares of Home Building Bancorp Common Stock.............................6
2.6 Election and Proration Procedures..............................................................7
2.7 Exchange Procedures...........................................................................10
2.8 Effect on Outstanding Shares of First Bancorp Common Stock....................................12
2.9 Directors of Surviving Corporation After Effective Time.......................................12
2.10 Articles of Incorporation and Bylaws..........................................................13
2.11 Treatment of Stock Options....................................................................13
2.12 Dissenters' Rights............................................................................13
2.13 Bank Merger...................................................................................14
2.14 Alternative Structure.........................................................................14
2.15 Absence of Control............................................................................14
ARTICLE III - REPRESENTATIONS AND WARRANTIES.....................................................................14
3.1 Disclosure Letters............................................................................14
3.2 Representations and Warranties of Home Building Bancorp.......................................14
3.3 Representations and Warranties of First Bancorp...............................................30
ARTICLE IV - CONDUCT PENDING THE MERGER..........................................................................34
4.1 Forbearances by Home Building Bancorp.........................................................34
4.2 Forbearances by First Bancorp.................................................................37
ARTICLE V - COVENANTS............................................................................................37
5.1 Acquisition Proposals.........................................................................37
5.2 Advice of Changes.............................................................................39
5.3 Access and Information........................................................................39
5.4 Applications; Consents........................................................................40
5.5 Antitakeover Provisions.......................................................................41
5.6 Additional Agreements.........................................................................41
5.7 Publicity.....................................................................................41
5.8 Shareholder Meeting...........................................................................41
5.9 Registration of First Bancorp Common Stock....................................................42
5.10 Notification of Certain Matters...............................................................43
5.11 Employee Benefit Matters......................................................................43
5.12 Indemnification...............................................................................44
5.13 Affiliate Letters.............................................................................45
5.14 Board of Directors; Advisory Board............................................................46
5.15 Operations of Home Building Savings after the Merger..........................................46
5.16 Environmental Reports.........................................................................46
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ARTICLE VI - CONDITIONS TO CONSUMMATION..........................................................................46
6.1 Conditions to Each Party's Obligations........................................................46
6.2 Conditions to the Obligations of First Bancorp................................................48
6.3 Conditions to the Obligations of Home Building Bancorp........................................48
ARTICLE VII - TERMINATION........................................................................................49
7.1 Termination...................................................................................49
7.2 Termination Fee...............................................................................51
7.3 Effect of Termination.........................................................................52
ARTICLE VIII - CERTAIN OTHER MATTERS.............................................................................52
8.1 Interpretation................................................................................52
8.2 Survival......................................................................................52
8.3 Waiver; Amendment.............................................................................52
8.4 Counterparts..................................................................................52
8.5 Governing Law.................................................................................52
8.6 Expenses......................................................................................53
8.7 Notices.......................................................................................53
8.8 Entire Agreement; etc.........................................................................53
8.9 Successors and Assigns; Assignment............................................................54
8.10 Specific Performance..........................................................................54
EXHIBITS
Exhibit A Form of Voting Agreement
Exhibit B Plan of Merger
Exhibit C Plan of Bank Merger
Exhibit D Form of Employment Agreement
Exhibit E Form of Affiliate Letter
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AGREEMENT AND PLAN OF MERGER
This is an AGREEMENT AND PLAN OF MERGER, dated as of the 25th day of
April, 2006 ("AGREEMENT"), by and between First Bancorp of Indiana, Inc., an
Indiana corporation ("FIRST BANCORP"), and Home Building Bancorp, Inc., an
Indiana corporation ("HOME BUILDING BANCORP").
INTRODUCTORY STATEMENT
The Board of Directors of each of First Bancorp and Home Building
Bancorp has determined that this Agreement and the business combination and
related transactions contemplated hereby are advisable and in the best interests
of First Bancorp or Home Building Bancorp, as the case may be, and in the best
long-term interests of the shareholders of First Bancorp or Home Building
Bancorp, as the case may be.
The parties hereto intend that the Merger as defined herein shall
qualify as a reorganization under the provisions of Section 368(a) of the IRC
for federal income tax purposes.
First Bancorp and Home Building Bancorp each desire to make certain
representations, warranties and agreements in connection with the business
combination and related transactions provided for herein and to prescribe
various conditions to such transactions.
As a condition and inducement to First Bancorp's willingness to enter
into this Agreement, each of the members of the Board of Directors of Home
Building Bancorp has entered into an agreement dated as of the date hereof in
the form of Exhibit A pursuant to which he will vote his shares of Home Building
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Bancorp Common Stock in favor of this Agreement and the transactions
contemplated hereby.
In consideration of their mutual promises and obligations hereunder,
the parties hereto adopt and make this Agreement and prescribe the terms and
conditions hereof and the manner and basis of carrying it into effect, which
shall be as follows:
ARTICLE I
DEFINITIONS
The following terms are defined in this Agreement in the Section indicated:
Defined Term Location of Definition
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Articles of Merger Section 2.3
Bank Merger Section 2.13
Cash Consideration Section 2.5(a)
Cash Election Section 2.6(b)
Cash Election Shares Section 2.6(b)
Certificate(s) Section 2.6(c)
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Change in Recommendation Section 5.8
Closing Section 2.2
Closing Date Section 2.2
Continuing Employee Section 5.11(a)
Disclosure Letter Section 3.1
Dissenters' Shares Section 2.12
Effective Time Section 2.3
Election Deadline Section 2.6(c)
Election Form Section 2.6(a)
Environmental Consultant Section 5.16
Exchange Agent Section 2.6(c)
Exchange Ratio Section 2.5(a)
Fee Section 7.2(a)
FIRF Section 5.11(c)
First Bancorp preamble
First Bancorp Price Section 2.5(a)
First Bancorp Ratio Section 7.1(g)
First Bancorp's Reports Section 3.3(g)
First Federal Section 2.13
Home Building Bancorp preamble
Home Building Bancorp Employee Plans Section 3.2(r)(i)
Home Building Bancorp Option Section 2.11
Home Building Bancorp Pension Plan Section 3.2(r)(iii)
Home Building Bancorp Property Section 5.16
Home Building Bancorp Qualified Plan Section 3.2(r)(iv)
Home Building Bancorp's Reports Section 3.2(g)
Home Building Savings Section 2.13
Indemnified Party Section 5.12(a)
Index Ratio Section 7.1(g)
Intellectual Property Section 3.2(p)
Letter of Transmittal Section 2.7(a)
Mailing Date Section 2.6(a)
Maximum Insurance Amount Section 5.12(c)
Measurement Period Section 2.5(a)
Merger Section 2.1
Merger Consideration Section 2.5(a)
Mixed Election Section 2.6(b)
Non-Election Section 2.6(b)
Non-Election Shares Section 2.6(b)
Proxy Statement-Prospectus Section 5.9(a)
Registration Statement Section 5.9(a)
Representative Section 2.6(b)
Shareholder Meeting Section 5.8
Shortfall Number Section 2.6(e)(ii)
Stock Consideration Section 2.5(a)
Stock Conversion Number Section 2.6(d)
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Stock Election Section 2.6(b)
Stock Election Number Section 2.6(b)
Stock Election Shares Section 2.6(b)
Surviving Corporation Section 2.1
In addition, for purposes of this Agreement:
"ACQUISITION PROPOSAL" means any proposal or offer with respect to any
of the following (other than the transactions contemplated hereunder): (i) any
merger, consolidation, share exchange, business combination, or other similar
transaction involving Home Building Bancorp or any of its Subsidiaries; (ii) any
sale, lease, exchange, mortgage, pledge, transfer or other disposition of 25% or
more of Home Building Bancorp's consolidated assets in a single transaction or
series of transactions; (iii) any tender offer or exchange offer for 25% or more
of the outstanding shares of Home Building Bancorp's capital stock or the filing
of a registration statement under the Securities Act of 1933, as amended, in
connection therewith; or (iv) any public announcement of a proposal, plan or
intention to do any of the foregoing or any agreement to engage in an any of the
foregoing.
"AGREEMENT" means this Agreement, as amended, modified or amended and
restated from time to time in accordance with its terms.
"CRA" means the Community Reinvestment Act.
"ENVIRONMENTAL LAW" means any federal, state or local law, statute,
ordinance, rule, regulation, code, license, permit, authorization, approval,
consent, order, directive, executive or administrative order, judgment, decree,
injunction, or agreement with any Governmental Entity relating to (i) the
protection, preservation or restoration of the environment (which includes,
without limitation, air, water vapor, surface water, groundwater, drinking water
supply, soil, surface land, subsurface land, plant and animal life or any other
natural resource), or to human health or safety as it relates to Hazardous
Materials, or (ii) the exposure to, or the use, storage, recycling, treatment,
generation, transportation, processing, handling, labeling, production, release
or disposal of, Hazardous Materials, in each case as amended and as now in
effect. The term Environmental Law includes, without limitation, the Federal
Comprehensive Environmental Response, Compensation and Liability Act of 1980,
the Superfund Amendments and Reauthorization Act of 1986, the Federal Water
Pollution Control Act of 1972, the Federal Clean Air Act, the Federal Clean
Water Act, the Federal Resource Conservation and Recovery Act of 1976, the
Federal Solid Waste Disposal and the Federal Toxic Substances Control Act, the
Federal Insecticide, Fungicide and Rodenticide Act, the Federal Occupational
Safety and Health Act of 1970 as it relates to Hazardous Materials, the Federal
Hazardous Substances Transportation Act, the Emergency Planning and Community
Right-To-Know Act, the Safe Drinking Water Act, the Endangered Species Act, the
National Environmental Policy Act, the Rivers and Harbors Appropriation Act or
any so-called "Superfund" or "Superlien" law, each as amended and as now in
effect.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
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"ERISA AFFILIATE" means any entity that is considered one employer with
Home Building Bancorp under Section 4001(b)(1) of ERISA or Section 414 of the
IRC.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.
"EXCLUDED SHARES" shall consist of (i) Dissenters' Shares and (ii)
shares held directly or indirectly by First Bancorp (other than shares held in a
fiduciary capacity or in satisfaction of a debt previously contracted).
"FDIC" means the Federal Deposit Insurance Corporation.
"GAAP" means generally accepted accounting principles.
"GOVERNMENT REGULATOR" means any federal or state governmental
authority charged with the supervision or regulation of depository institutions
or depository institution holding companies or engaged in the insurance of bank
deposits.
"GOVERNMENTAL ENTITY" means any court, administrative agency or
commission or other governmental authority or instrumentality.
"HAZARDOUS MATERIAL" means any substance (whether solid, liquid or gas)
which is or could be detrimental to human health or safety or to the
environment, currently or hereafter listed, defined, designated or classified as
hazardous, toxic, radioactive or dangerous, or otherwise regulated, under any
Environmental Law, whether by type or by quantity, including any substance
containing any such substance as a component. Hazardous Material includes,
without limitation, any toxic waste, pollutant, contaminant, hazardous
substance, toxic substance, hazardous waste, special waste, industrial
substance, oil or petroleum, or any derivative or by-product thereof, radon,
radioactive material, asbestos, asbestos-containing material, urea formaldehyde
foam insulation, lead and polychlorinated biphenyl.
"HOLA" means the Home Owners' Loan Act, as amended.
"HOME BUILDING BANCORP COMMON STOCK" means the common stock, par value
$.01 per share, of Home Building Bancorp.
"IBCL" means the Indiana Business Corporation Law.
"IRC" means the Internal Revenue Code of 1986, as amended.
"KNOWLEDGE" means, with respect to a party hereto, actual knowledge of
the members of the Board of Directors of that party or any officer of that party
with the title ranking not less than vice president.
"LIEN" means any charge, mortgage, pledge, security interest, claim,
lien or encumbrance.
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"LOAN" means a loan, lease, advance, credit enhancement, guarantee or
other extension of credit.
"LOAN PROPERTY" means any property in which the applicable party (or a
subsidiary of it) holds a security interest and, where required by the context,
includes the owner or operator of such property, but only with respect to such
property.
"MATERIAL ADVERSE EFFECT" means an effect which is material and adverse
to the business, financial condition or results of operations of Home Building
Bancorp or First Bancorp, as the context may dictate, and its Subsidiaries taken
as a whole; PROVIDED, HOWEVER, that any such effect resulting from any (i)
changes in laws, rules or regulations or generally accepted accounting
principles or regulatory accounting requirements or interpretations thereof that
apply to both First Bancorp and Home Building Bancorp, or to financial and/or
depository institutions generally, (ii) changes in economic conditions affecting
financial institutions generally, including but not limited to, changes in the
general level of market interest rates, (iii) actions and omissions of First
Bancorp or Home Building Bancorp taken with the prior written consent of the
other or (iv) direct effects of compliance with this Agreement on the operating
performance of the parties, including expenses incurred by the parties in
consummating the transactions contemplated by this Agreement, shall not be
considered in determining if a Material Adverse Effect has occurred.
"OTS" means the Office of Thrift Supervision.
"PARTICIPATION FACILITY" means any facility in which the applicable
party (or a Subsidiary of it) participates in the management (including all
property held as trustee or in any other fiduciary capacity) and, where required
by the context, includes the owner or operator of such property, but only with
respect to such property.
"PERSON" means an individual, corporation, limited liability company,
partnership, association, trust, unincorporated organization or other entity.
"SECURITIES ACT" means the Securities Act of 1933, as amended.
"SUBSIDIARY" means a corporation, partnership, joint venture or other
entity in which Home Building Bancorp or First Bancorp, as the case may be, has,
directly or indirectly, an equity interest representing 50% or more of any class
of the capital stock thereof or other equity interests therein.
"SUPERIOR PROPOSAL" means an unsolicited, bona fide written offer made
by a third party to consummate an Acquisition Proposal that (i) Home Building
Bancorp's Board of Directors determines in good faith, after consulting with its
outside legal counsel and its financial advisor, would, if consummated, result
in a transaction that is more favorable to the shareholders of Home Building
Bancorp than the transactions contemplated hereby (taking into account all
legal, financial, regulatory and other aspects of the proposal and the entity
making the proposal), (ii) is not conditioned on obtaining financing (and with
respect to which First Bancorp has received written evidence of such person's
ability to fully finance its Acquisition Proposal), (iii) is for 100% of the
outstanding shares of Home Building Bancorp Common Stock and (iv) is, in the
written opinion of Home Building Bancorp's financial advisor, more favorable to
the shareholders of Home Building Bancorp from a financial point of view than
the transactions contemplated hereby (including any adjustments to the terms and
conditions of such transactions proposed by First Bancorp in response to such
Acquisition Proposal).
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"TAXES" means all income, franchise, gross receipts, real and personal
property, real property transfer and gains, wage and employment taxes.
ARTICLE II
THE MERGER
2.1 THE MERGER. Upon the terms and subject to the conditions set
forth in this Agreement and the Plan of Merger attached hereto as Exhibit B,
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Home Building Bancorp will merge with and into First Bancorp (the "MERGER") at
the Effective Time. At the Effective Time, the separate corporate existence of
Home Building Bancorp shall cease. First Bancorp shall be the surviving
corporation (hereinafter sometimes referred to in such capacity as the
"SURVIVING CORPORATION") in the Merger and shall continue to be governed by the
IBCL and its name and separate corporate existence, with all of its rights,
privileges, immunities, powers and franchises, shall continue unaffected by the
Merger.
2.2 CLOSING. The closing of the Merger (the "CLOSING") will take
place in the offices of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP, ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇, ▇▇, or at such other location as is agreed to by the parties hereto,
at 10:00 a.m. on the date designated by First Bancorp within thirty days
following satisfaction or waiver of the conditions to Closing set forth in
Article VI (other than those conditions that by their nature are to be satisfied
at the Closing), or such later date as the parties may otherwise agree (the
"CLOSING DATE").
2.3 EFFECTIVE TIME. In connection with the Closing, First Bancorp
shall duly execute and deliver articles of merger (the "ARTICLES OF MERGER") to
the Indiana Secretary of State for filing pursuant to the IBCL. The Merger shall
become effective at such time as the Articles of Merger are duly filed with the
Indiana Secretary of State or at such later date or time as First Bancorp and
Home Building Bancorp agree and specify in the Articles of Merger (the date and
time the Merger becomes effective being the "EFFECTIVE TIME").
2.4 EFFECTS OF THE MERGER. The Merger will have the effects set
forth in the IBCL. Without limiting the generality of the foregoing, and subject
thereto, from and after the Effective Time, First Bancorp shall possess all of
the properties, rights, privileges, powers and franchises of Home Building
Bancorp and be subject to all of the debts, liabilities and obligations of Home
Building Bancorp.
2.5 EFFECT ON OUTSTANDING SHARES OF HOME BUILDING BANCORP COMMON
STOCK.
(a) Subject to the provisions of Section 2.6 hereof, by virtue
of the Merger, automatically and without any action on the part of the holder
thereof, each share of Home Building Bancorp Common Stock issued and outstanding
at the Effective Time, other than Excluded Shares, shall become and be converted
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into, at the election of the holder as provided in and subject to the
limitations set forth in this Agreement, either the right to receive (i) $43.50
in cash, without interest (the "CASH CONSIDERATION") or (ii) the number of
shares of First Bancorp Common Stock equal to the Exchange Ratio, as defined
below (the "STOCK CONSIDERATION"). The Cash Consideration and the Stock
Consideration are sometimes referred to herein collectively as the "MERGER
CONSIDERATION." The "EXCHANGE RATIO" shall be equal to (A) 2.3016 if the First
Bancorp Price is $18.90 or less, (B) the result obtained by dividing $43.50 by
the First Bancorp Price (rounded to the nearest ten-thousandth) if the First
Bancorp Price is greater than $18.90 and less than $23.10, or (C) 1.8831 if the
First Bancorp Price is $23.10 or more. "FIRST BANCORP PRICE" means the average
of the closing sales price of First Bancorp Common Stock, as reported on The
Nasdaq Stock Market, for the ten consecutive trading days ending on the date
that is ten business days prior to the Closing Date ("MEASUREMENT PERIOD");
PROVIDED, HOWEVER, that any date on which fewer than 100 shares of First Bancorp
Common Stock trades shall be disregarded in computing the average closing sales
price and the average shall be based upon the closing sales price and number of
days on which 100 or more shares of First Bancorp Common Stock traded during the
Measurement Period.
(b) Notwithstanding any other provision of this Agreement,
no fraction of a share of First Bancorp Common Stock and no certificates or
scrip therefor will be issued in the Merger; instead, First Bancorp shall pay to
each holder of Home Building Bancorp Common Stock who would otherwise be
entitled to a fraction of a share of First Bancorp Common Stock an amount in
cash, rounded to the nearest cent, determined by multiplying such fraction by
the First Bancorp Price.
(c) If, between the date of this Agreement and the Effective
Time, the outstanding shares of First Bancorp Common Stock shall have been
changed into a different number of shares or into a different class by reason of
any stock dividend, subdivision, reclassification, recapitalization, split,
combination or exchange of shares, the Exchange Ratio shall be adjusted
appropriately to provide the holders of Home Building Bancorp Common Stock the
same economic effect as contemplated by this Agreement prior to such event.
(d) As of the Effective Time, each Excluded Share, other
than Dissenters' Shares, shall be canceled and retired and shall cease to exist,
and no exchange or payment shall be made with respect thereto. All shares of
First Bancorp Common Stock that are held by Home Building Bancorp, if any, other
than shares held in a fiduciary capacity or in satisfaction of a debt previously
contracted, shall be canceled and shall constitute authorized but unissued
shares. In addition, no Dissenters' Shares shall be converted into shares of
First Bancorp Common Stock pursuant to this SECTION 2.5 but instead shall be
treated in accordance with the provisions set forth in SECTION 2.12 of this
Agreement.
2.6 ELECTION AND PRORATION PROCEDURES.
(a) An election form in such form as Home Building Bancorp and
First Bancorp shall mutually agree (an "ELECTION FORM") shall be mailed on the
Mailing Date (as defined below) to each holder of record of shares of Home
Building Bancorp Common Stock as of a record date which shall be the same date
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as the record date for eligibility to vote on the Merger. The "MAILING DATE"
shall be the date on which proxy materials relating to the Merger are mailed to
holders of shares of Home Building Bancorp Common Stock. First Bancorp shall
make available Election Forms as may be reasonably requested by all persons who
become holders of Home Building Bancorp Common Stock after the record date for
eligibility to vote on the Merger and prior to the Election Deadline (as defined
herein), and Home Building Bancorp shall provide to the Exchange Agent all
information reasonably necessary for it to perform its obligations as specified
herein.
(b) Each Election Form shall entitle the holder of shares of
Home Building Bancorp Common Stock (or the beneficial owner through appropriate
and customary documentation and instructions) to (i) elect to receive the Cash
Consideration for all of such holder's shares (a "CASH ELECTION"), (ii) elect to
receive the Stock Consideration for all of such holder's shares (a "STOCK
ELECTION"), (iii) elect to receive the Cash Consideration with respect to some
of such holder's shares and the Stock Consideration with respect to such
holder's remaining shares (a "MIXED ELECTION") or (iv) make no election or to
indicate that such holder has no preference as to the receipt of the Cash
Consideration or the Stock Consideration (a "NON-ELECTION"). Holders of record
of shares of Home Building Bancorp Common Stock who hold such shares as
nominees, trustees or in other representative capacities (a "REPRESENTATIVE")
may submit multiple Election Forms, provided that such Representative certifies
that each such Election Form covers all the shares of Home Building Bancorp
Common Stock held by that Representative for a particular beneficial owner.
Shares of Home Building Bancorp Common Stock as to which a Cash Election has
been made (including pursuant to a Mixed Election) are referred to herein as
"CASH ELECTION SHARES." Shares of Home Building Bancorp Common Stock as to which
a Stock Election has been made (including pursuant to a Mixed Election) are
referred to herein as "STOCK ELECTION SHARES." Shares of Home Building Bancorp
Common Stock as to which no election has been made are referred to as
"NON-ELECTION SHARES." The aggregate number of shares of Home Building Bancorp
Common Stock with respect to which a Stock Election has been made is referred to
herein as the "STOCK ELECTION NUMBER."
(c) To be effective, a properly completed Election Form must
be received by Registrar and Transfer Company (the "EXCHANGE AGENT") on or
before 5:00 p.m., New York City time, on the third business day subsequent to
Home Building Bancorp's Shareholder Meeting (or such other time and date as Home
Building Bancorp and First Bancorp may mutually agree) (the "ELECTION
DEADLINE"). An election shall have been properly made only if the Exchange Agent
shall have actually received a properly completed Election Form by the Election
Deadline. An Election Form shall be deemed properly completed only if
accompanied by one or more certificates theretofore representing Home Building
Bancorp Common Stock ("CERTIFICATE(S)") (or customary affidavits and, if
required by First Bancorp pursuant to SECTION 2.7(I), indemnification regarding
the loss or destruction of such Certificates or the guaranteed delivery of such
Certificates) representing all shares of Home Building Bancorp Common Stock
covered by such Election Form, together with duly executed transmittal materials
included with the Election Form. Any Home Building Bancorp shareholder may at
any time prior to the Election Deadline change his or her election by written
notice received by the Exchange Agent prior to the Election Deadline accompanied
by a properly completed and signed revised Election Form. Any Home Building
Bancorp shareholder may, at any time prior to the Election Deadline, revoke his
or her election by written notice received by the Exchange Agent prior to the
Election Deadline or by withdrawal prior to the Election Deadline of his or her
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Certificates, or of the guarantee of delivery of such Certificates, previously
deposited with the Exchange Agent. All elections shall be revoked automatically
if the Exchange Agent is notified in writing by First Bancorp and Home Building
Bancorp that this Agreement has been terminated. If a shareholder either (i)
does not submit a properly completed Election Form by the Election Deadline or
(ii) revokes its Election Form prior to the Election Deadline and does not
submit a new properly executed Election Form prior to the Election Deadline, the
shares of Home Building Bancorp Common Stock held by such shareholder shall be
designated Non-Election Shares. First Bancorp shall cause the Certificates
representing Home Building Bancorp Common Stock described in clause (ii) to be
promptly returned without charge to the person submitting the Election Form upon
written request to that effect from the person who submitted the Election Form.
Subject to the terms of this Agreement and of the Election Form, the Exchange
Agent shall have reasonable discretion to determine whether any election,
revocation or change has been properly or timely made and to disregard
immaterial defects in any Election Form, and any good faith decisions of the
Exchange Agent regarding such matters shall be binding and conclusive.
(d) Notwithstanding any other provision contained in this
Agreement, 50% of the total number of shares of Home Building Bancorp Common
Stock outstanding at the Effective Time (the "STOCK CONVERSION NUMBER") shall be
converted into the Stock Consideration and the remaining outstanding shares of
Home Building Bancorp Common Stock (excluding shares of Home Building Bancorp
Common Stock to be canceled as provided in SECTION 2.5(D) and Dissenters'
Shares) shall be converted into the Cash Consideration; PROVIDED, HOWEVER, that
for federal income tax purposes, it is intended that the Merger will qualify as
a reorganization under the provisions of Section 368(a) of the IRC and,
notwithstanding anything to the contrary contained herein, in order that the
Merger will not fail to satisfy continuity of interest requirements under
applicable federal income tax principles relating to reorganizations under
Section 368(a) of the IRC, First Bancorp shall increase the number of shares of
Home Building Bancorp Common Stock that will be converted into the Stock
Consideration and reduce the number of shares of Home Building Bancorp Common
Stock that will be converted into the right to receive the Cash Consideration to
ensure that the Stock Consideration will represent at least 40% of the value of
the aggregate Merger Consideration, increased by the value of any Excluded
Shares, each as measured as of the Effective Time.
(e) Within five business days after the later to occur of the
Election Deadline or the Effective Time, First Bancorp shall cause the Exchange
Agent to effect the allocation among holders of Home Building Bancorp Common
Stock of rights to receive the Cash Consideration and the Stock Consideration as
follows:
(i) If the Stock Election Number exceeds the Stock
Conversion Number, then all Cash Election Shares and all Non-Election Shares
shall be converted into the right to receive the Cash Consideration, and each
holder of Stock Election Shares will be entitled to receive (A) the Stock
Consideration in respect of the number of Stock Election Shares held by such
holder multiplied by a fraction, the numerator of which is the Stock Conversion
Number and the denominator of which is the Stock Election Number and (B) the
Cash Consideration in respect of the remaining number of such holder's Stock
Election Shares;
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(ii) If the Stock Election Number is less than the
Stock Conversion Number (the amount by which the Stock Conversion Number exceeds
the Stock Election Number being referred to herein as the "SHORTFALL NUMBER"),
then all Stock Election Shares shall be converted into the right to receive the
Stock Consideration and the Non-Election Shares and Cash Election Shares shall
be treated in the following manner:
(A) if the Shortfall Number is less than or
equal to the number of Non-Election Shares, then all Cash Election Shares shall
be converted into the right to receive the Cash Consideration and each holder of
Non-Election Shares shall receive (1) the Stock Consideration in respect of the
number of Non-Election Shares held by such holder multiplied by a fraction, the
numerator of which is the Shortfall Number and the denominator of which is the
total number of Non-Election Shares and (2) the Cash Consideration in respect of
the remaining number of such holder's Non-Election Shares; or
(B) if the Shortfall Number exceeds the
number of Non-Election Shares, then all Non-Election Shares shall be converted
into the right to receive the Stock Consideration, and each holder of Cash
Election Shares shall receive (1) the Stock Consideration in respect of the
number of Cash Election Shares held by such holder multiplied by a fraction, the
numerator of which is the amount by which the Shortfall Number exceeds the
number of Non-Election Shares and the denominator of which is the total number
of Cash Election Shares and (2) the Cash Consideration in respect of the
remaining number of such holder's Cash Election Shares.
For purposes of the foregoing calculations, Excluded Shares
shall be deemed Cash Election Shares. For purposes of this SECTION 2.6(E), if
First Bancorp is obligated to increase the number of shares of Home Building
Bancorp Common Stock to be converted into shares of First Bancorp Common Stock
as a result of the application of the last clause of SECTION 2.6(D) above, then
the higher number shall be substituted for the Stock Conversion Number in the
calculations set forth in this SECTION 2.6(E).
2.7 EXCHANGE PROCEDURES.
(a) Appropriate transmittal materials ("LETTER OF
TRANSMITTAL") in a form satisfactory to First Bancorp and Home Building Bancorp
shall be mailed as soon as practicable after the Effective Time to each holder
of record of Home Building Bancorp Common Stock as of the Effective Time who did
not previously submit a completed Election Form. A Letter of Transmittal will be
deemed properly completed only if accompanied by certificates representing all
shares of Home Building Bancorp Common Stock to be converted thereby.
(b) At and after the Effective Time, each Certificate
(except as specifically set forth in SECTION 2.5) shall represent only the right
to receive the Merger Consideration.
(c) Prior to the Effective Time, First Bancorp shall (i)
reserve for issuance with its transfer agent and registrar a sufficient number
of shares of First Bancorp Common Stock to provide for payment of the aggregate
Stock Consideration and (ii) deposit, or cause to be deposited, with the
Exchange Agent, for the benefit of the holders of shares of Home Building
Bancorp Common Stock, for exchange in accordance with this SECTION 2.7, an
amount of cash sufficient to pay the aggregate Cash Consideration.
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(d) The Letter of Transmittal shall (i) specify that delivery
shall be effected, and risk of loss and title to the Certificates shall pass,
only upon delivery of the Certificates to the Exchange Agent, (ii) be in a form
and contain any other provisions as First Bancorp may reasonably determine and
(iii) include instructions for use in effecting the surrender of the
Certificates in exchange for the Merger Consideration. Upon the proper surrender
of the Certificates to the Exchange Agent, together with a properly completed
and duly executed Letter of Transmittal, the holder of such Certificates shall
be entitled to receive in exchange therefor a certificate representing that
number of whole shares of First Bancorp Common Stock that such holder has the
right to receive pursuant to SECTION 2.5, if any, and a check in the amount
equal to the cash that such holder has the right to receive pursuant to SECTION
2.5, if any (including any cash in lieu of fractional shares, if any, that such
holder has the right to receive pursuant to SECTION 2.5, and any dividends or
other distributions to which such holder is entitled pursuant to SECTION 2.5).
Certificates so surrendered shall forthwith be canceled. As soon as practicable
following receipt of the properly completed Letter of Transmittal and any
necessary accompanying documentation, the Exchange Agent shall distribute First
Bancorp Common Stock and cash as provided herein. The Exchange Agent shall not
be entitled to vote or exercise any rights of ownership with respect to the
shares of First Bancorp Common Stock held by it from time to time hereunder,
except that it shall receive and hold all dividends or other distributions paid
or distributed with respect to such shares for the account of the persons
entitled thereto. If there is a transfer of ownership of any shares of Home
Building Bancorp Common Stock not registered in the transfer records of Home
Building Bancorp, the Merger Consideration shall be issued to the transferee
thereof if the Certificates representing such Home Building Bancorp Common Stock
are presented to the Exchange Agent, accompanied by all documents required, in
the reasonable judgment of First Bancorp and the Exchange Agent, to evidence and
effect such transfer and to evidence that any applicable stock transfer taxes
have been paid.
(e) No dividends or other distributions declared or made
after the Effective Time with respect to First Bancorp Common Stock issued
pursuant to this Agreement shall be remitted to any person entitled to receive
shares of First Bancorp Common Stock hereunder until such person surrenders his
or her Certificates in accordance with this SECTION 2.7. Upon the surrender of
such person's Certificates, such person shall be entitled to receive any
dividends or other distributions, without interest thereon, which subsequent to
the Effective Time had become payable but not paid with respect to shares of
First Bancorp Common Stock represented by such person's Certificates.
(f) The stock transfer books of Home Building Bancorp shall
be closed immediately upon the Effective Time and from and after the Effective
Time there shall be no transfers on the stock transfer records of Home Building
Bancorp of any shares of Home Building Bancorp Common Stock. If, after the
Effective Time, Certificates are presented to First Bancorp, they shall be
canceled and exchanged for the Merger Consideration deliverable in respect
thereof pursuant to this Agreement in accordance with the procedures set forth
in this SECTION 2.7.
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(g) Any portion of the aggregate amount of cash to be paid
pursuant to SECTION 2.5, any dividends or other distributions to be paid
pursuant to this SECTION 2.7 or any proceeds from any investments thereof that
remains unclaimed by the shareholders of Home Building Bancorp for six months
after the Effective Time shall be repaid by the Exchange Agent to First Bancorp
upon the written request of First Bancorp. After such request is made, any
shareholders of Home Building Bancorp who have not theretofore complied with
this SECTION 2.7 shall look only to First Bancorp for the Merger Consideration
deliverable in respect of each share of Home Building Bancorp Common Stock such
shareholder holds, as determined pursuant to SECTION 2.5 of this Agreement,
without any interest thereon. If outstanding Certificates are not surrendered
prior to the date on which such payments would otherwise escheat to or become
the property of any governmental unit or agency, the unclaimed items shall, to
the extent permitted by any abandoned property, escheat or other applicable
laws, become the property of First Bancorp (and, to the extent not in its
possession, shall be paid over to it), free and clear of all claims or interest
of any person previously entitled to such claims. Notwithstanding the foregoing,
neither the Exchange Agent nor any party to this Agreement (or any affiliate
thereof) shall be liable to any former holder of Home Building Bancorp Common
Stock for any amount delivered to a public official pursuant to applicable
abandoned property, escheat or similar laws.
(h) First Bancorp and the Exchange Agent shall be entitled to
rely upon Home Building Bancorp's stock transfer books to establish the identity
of those persons entitled to receive the Merger Consideration, which books shall
be conclusive with respect thereto. In the event of a dispute with respect to
ownership of stock represented by any Certificate, First Bancorp and the
Exchange Agent shall be entitled to deposit any Merger Consideration represented
thereby in escrow with an independent third party and thereafter be relieved
with respect to any claims thereto.
(i) If any Certificate shall have been lost, stolen or
destroyed, upon the making of an affidavit of that fact by the person claiming
such Certificate to be lost, stolen or destroyed and, if required by the
Exchange Agent or First Bancorp, the posting by such person of a bond in such
amount as the Exchange Agent may direct as indemnity against any claim that may
be made against it with respect to such Certificate, the Exchange Agent will
issue in exchange for such lost, stolen or destroyed Certificate the Merger
Consideration deliverable in respect thereof pursuant to SECTION 2.5.
2.8 EFFECT ON OUTSTANDING SHARES OF FIRST BANCORP COMMON STOCK. At
the Effective Time, each share of common stock of First Bancorp issued and
outstanding immediately prior to the Effective Time shall remain an issued and
outstanding share of common stock of the Surviving Corporation and shall not be
affected by the Merger.
2.9 DIRECTORS OF SURVIVING CORPORATION AFTER EFFECTIVE TIME. Subject
to SECTION 5.14(A), immediately after the Effective Time, until their respective
successors are duly elected or appointed and qualified, the directors of the
Surviving Corporation shall consist of the directors of First Bancorp serving
immediately prior to the Effective Time.
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2.10 ARTICLES OF INCORPORATION AND BYLAWS. The articles of
incorporation of First Bancorp, as in effect immediately prior to the Effective
Time, shall be the articles of incorporation of the Surviving Corporation until
thereafter amended in accordance with applicable law. The bylaws of First
Bancorp, as in effect immediately prior to the Effective Time, shall be the
bylaws of the Surviving Corporation until thereafter amended in accordance with
applicable law.
2.11 TREATMENT OF STOCK OPTIONS. As soon as practicable following the
date of this Agreement, Home Building Bancorp's Board of Directors shall adopt
such resolutions or take such other actions as are required to provide for the
cancellation of all outstanding options to acquire shares of Home Building
Bancorp Common Stock (each, a "HOME BUILDING BANCORP OPTION"), whether or not
vested, as of the Effective Time in exchange for a cash payment by Home Building
Bancorp in cash an amount equal to the product of (i) the number of shares of
Home Building Bancorp Common Stock subject to such option at the Effective Time
and (ii) the amount by which the Cash Consideration exceeds the exercise price
per share of such option, net of any cash which must be withheld under federal
and state income and employment tax requirements. In the event that the exercise
price of a Home Building Bancorp Option is greater than the Cash Consideration,
then at the Effective Time such Home Building Bancorp Option shall be canceled
without any payment made in exchange therefor.
2.12 DISSENTERS' RIGHTS. Notwithstanding any other provision of this
Agreement to the contrary, shares of Home Building Bancorp Common Stock that are
outstanding immediately prior to the Effective Time and which are held by
shareholders who shall have not voted in favor of the Merger or consented
thereto in writing and who properly shall have demanded payment of the fair
value for such shares in accordance with the IBCL (collectively, the
"DISSENTERS' SHARES") shall not be converted into or represent the right to
receive the Merger Consideration. Such shareholders instead shall be entitled to
receive payment of the fair value of such shares held by them in accordance with
the provisions of the IBCL, except that all Dissenters' Shares held by
shareholders who shall have failed to perfect or who effectively shall have
withdrawn or otherwise lost their rights as dissenting shareholders under the
IBCL shall thereupon be deemed to have been converted into and to have become
exchangeable, as of the Effective Time, for the right to receive, without any
interest thereon, the Merger Consideration upon surrender in the manner provided
in SECTION 2.7 of the Certificate(s) that, immediately prior to the Effective
Time, evidenced such shares. Home Building Bancorp shall give First Bancorp (i)
prompt notice of any written demands for payment of fair value of any shares of
Home Building Bancorp Common Stock, attempted withdrawals of such demands and
any other instruments served pursuant to the IBCL and received by Home Building
Bancorp relating to shareholders' dissenters' rights and (ii) the opportunity to
participate in all negotiations and proceedings with respect to demands under
the IBCL consistent with the obligations of Home Building Bancorp thereunder.
Home Building Bancorp shall not, except with the prior written consent of First
Bancorp, (x) make any payment with respect to such demand, (y) offer to settle
or settle any demand for payment of fair value or (z) waive any failure to
timely deliver a written demand for payment of fair value or timely take any
other action to perfect payment of fair value rights in accordance with the
IBCL.
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2.13 BANK MERGER. Concurrently with or as soon as practicable after
the execution and delivery of this Agreement, First Federal Savings Bank ("FIRST
FEDERAL"), a wholly owned subsidiary of First Bancorp, and Home Building Savings
Bank, FSB ("HOME BUILDING SAVINGS"), a wholly owned subsidiary of Home Building
Bancorp, shall enter into the Plan of Bank Merger, in the form attached hereto
as Exhibit C, pursuant to which Home Building Savings will merge with and into
---------
First Federal (the "BANK MERGER"). The parties intend that the Bank Merger will
become effective simultaneously with or immediately following the Effective
Time.
2.14 ALTERNATIVE STRUCTURE. Notwithstanding anything to the contrary
contained in this Agreement, prior to the Effective Time, First Bancorp may
specify that the structure of the transactions contemplated by this Agreement be
revised and the parties shall enter into such alternative transactions as First
Bancorp may reasonably determine to effect the purposes of this Agreement;
PROVIDED, HOWEVER, that such revised structure shall not (i) alter or change the
amount or kind of the Merger Consideration or (ii) materially impede or delay
the receipt of any regulatory approval referred to in, or the consummation of
the transactions contemplated by, this Agreement. In the event that First
Bancorp elects to make such a revision, the parties agree to execute appropriate
documents to reflect the revised structure.
2.15 ABSENCE OF CONTROL. Subject to any specific provisions of this
Agreement, it is the intent of the parties hereto that First Bancorp by reason
of this Agreement shall not be deemed (until consummation of the transactions
contemplated hereby) to control, directly or indirectly, Home Building Bancorp
or to exercise, directly or indirectly, a controlling influence over the
management or policies of Home Building Bancorp.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
3.1 DISCLOSURE LETTERS. Prior to the execution and delivery of this
Agreement, First Bancorp and Home Building Bancorp have each delivered to the
other a letter (each, its "DISCLOSURE LETTER") setting forth, among other
things, facts, circumstances and events the disclosure of which is required or
appropriate either in response to an express disclosure requirement contained in
a provision hereof or as an exception to one or more of their respective
representations and warranties (and making specific reference to the Section of
this Agreement to which they relate).
3.2 REPRESENTATIONS AND WARRANTIES OF HOME BUILDING BANCORP. Home
Building Bancorp represents and warrants to First Bancorp that, except as
disclosed in Home Building Bancorp's Disclosure Letter:
(a) ORGANIZATION AND QUALIFICATION. Home Building Bancorp is
a corporation duly organized and validly existing under the laws of the State of
Indiana and is registered with the OTS as a savings and loan holding company.
Home Building Bancorp has all requisite corporate power and authority to own,
lease and operate its properties and to conduct the business currently being
conducted by it. Home Building Bancorp is duly qualified or licensed as a
foreign corporation to transact business and is in good standing in each
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jurisdiction in which the character of the properties owned or leased by it or
the nature of the business conducted by it makes such qualification or licensing
necessary, except where the failure to be so qualified or licensed and in good
standing would not have a Material Adverse Affect on Home Building Bancorp. Home
Building Bancorp engages only in activities (and holds properties only of the
types) permitted to savings and loan holding companies by the HOLA and the rules
and regulations of the OTS promulgated thereunder.
(b) SUBSIDIARIES.
(i) Home Building Bancorp's Disclosure Letter sets
forth with respect to each of Home Building Bancorp's Subsidiaries its name, its
jurisdiction of incorporation, Home Building Bancorp's percentage ownership, the
number of shares of stock owned or controlled by Home Building Bancorp and the
name and number of shares held by any other person who owns any stock of the
Subsidiary. Home Building Bancorp owns of record and beneficially all the
capital stock of each of its Subsidiaries free and clear of any Liens. There are
no contracts, commitments, agreements or understandings relating to Home
Building Bancorp's right to vote or dispose of any equity securities of its
Subsidiaries. Home Building Bancorp's ownership interest in each of its
Subsidiaries is in compliance with all applicable laws, rules and regulations
relating to equity investments by savings and loan holding companies or federal
savings associations.
(ii) Each of Home Building Bancorp's Subsidiaries is
a corporation duly organized and validly existing under the laws of its
jurisdiction of incorporation, has all requisite corporate power and authority
to own, lease and operate its properties and to conduct the business currently
being conducted by it and is duly qualified or licensed as a foreign corporation
to transact business and is in good standing in each jurisdiction in which the
character of the properties owned or leased by it or the nature of the business
conducted by it makes such qualification or licensing necessary, except where
the failure to be so qualified or licensed and in good standing would not have a
Material Adverse Affect on such Subsidiary.
(iii) The outstanding shares of capital stock of each
Subsidiary have been validly authorized and are validly issued, fully paid and
nonassessable. No shares of capital stock of any Subsidiary of Home Building
Bancorp are or may be required to be issued by virtue of any options, warrants
or other rights, no securities exist that are convertible into or exchangeable
for shares of such capital stock or any other debt or equity security of any
Subsidiary, and there are no contracts, commitments, agreements or
understandings of any kind for the issuance of additional shares of capital
stock or other debt or equity security of any Subsidiary or options, warrants or
other rights with respect to such securities.
(iv) No Subsidiary of Home Building Bancorp other
than Home Building Savings is an "insured depository institution" as defined in
the Federal Deposit Insurance Act, as amended, and the applicable regulations
thereunder. Home Building Savings's deposits are insured by the FDIC to the
fullest extent permitted by law. Home Building Savings is a member in good
standing of the Federal Home Loan Bank of Indianapolis. Home Building Savings
engages only in activities (and holds properties only of the types) permitted by
the HOLA and the rules and regulations of the OTS promulgated thereunder.
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(c) CAPITAL STRUCTURE.
(i) The authorized capital stock of Home Building
Bancorp consists of 1,000,000 shares of Home Building Bancorp Common Stock and
250,000 shares of preferred stock, no par value.
(ii) As of the date of this Agreement: (A) 255,428
shares of Home Building Bancorp Common Stock are issued and outstanding, all of
which are validly issued, fully paid and nonassessable and were issued in full
compliance with all applicable federal and state securities laws, and no shares
of preferred stock are outstanding; and (B) 7,610 shares of Home Building
Bancorp Common Stock are reserved for issuance pursuant to outstanding Home
Building Bancorp Options.
(iii) Set forth in Home Building Bancorp's Disclosure
Letter is a complete and accurate list of all outstanding Home Building Bancorp
Options, including the names of the optionees, dates of grant, exercise prices,
dates of vesting, dates of termination, shares subject to each grant and whether
stock appreciation, limited or other similar rights were granted in connection
with such options.
(iv) No bonds, debentures, notes or other
indebtedness having the right to vote on any matters on which shareholders of
Home Building Bancorp may vote are issued or outstanding.
(v) Except as set forth in this SECTION 3.2(C), as
of the date of this Agreement, (A) no shares of capital stock or other voting
securities of Home Building Bancorp are issued, reserved for issuance or
outstanding and (B) neither Home Building Bancorp nor any of its Subsidiaries
has or is bound by any outstanding subscriptions, options, warrants, calls,
rights, convertible securities, commitments or agreements of any character
obligating Home Building Bancorp or any of its Subsidiaries to issue, deliver or
sell, or cause to be issued, delivered or sold, any additional shares of capital
stock of Home Building Bancorp or obligating Home Building Bancorp or any of its
Subsidiaries to grant, extend or enter into any such option, warrant, call,
right, convertible security, commitment or agreement. As of the date hereof,
there are no outstanding contractual obligations of Home Building Bancorp or any
of its Subsidiaries to repurchase, redeem or otherwise acquire any shares of
capital stock of Home Building Bancorp or any of its Subsidiaries.
(d) AUTHORITY. Home Building Bancorp has all requisite
corporate power and authority to enter into this Agreement, to perform its
obligations hereunder and to consummate the transactions contemplated by this
Agreement. The execution and delivery of this Agreement and the consummation of
the transactions contemplated by this Agreement have been duly authorized by all
necessary corporate actions on the part of Home Building Bancorp's Board of
Directors, and no other corporate proceedings on the part of Home Building
Bancorp are necessary to authorize this Agreement or to consummate the
transactions contemplated by this Agreement other than the approval and adoption
of this Agreement by the affirmative vote of the holders of a majority of the
outstanding shares of Home Building Bancorp Common Stock. This Agreement has
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been duly and validly executed and delivered by Home Building Bancorp and
constitutes a valid and binding obligation of Home Building Bancorp, enforceable
against Home Building Bancorp in accordance with its terms, subject to
applicable bankruptcy, insolvency and similar laws affecting creditors' rights
and remedies generally and to general principles of equity, whether applied in a
court of law or a court of equity.
(e) NO VIOLATIONS. The execution, delivery and performance of
this Agreement by Home Building Bancorp do not, and the consummation of the
transactions contemplated by this Agreement will not, (i) assuming all required
governmental approvals have been obtained and the applicable waiting periods
have expired, violate any law, rule or regulation or any judgment, decree,
order, governmental permit or license to which Home Building Bancorp or any of
its Subsidiaries (or any of their respective properties) is subject, (ii)
violate the articles of incorporation or bylaws of Home Building Bancorp or the
similar organizational documents of any of its Subsidiaries or (iii) constitute
a breach or violation of, or a default under (or an event which, with due notice
or lapse of time or both, would constitute a default under), or result in the
termination of, accelerate the performance required by, or result in the
creation of any Lien upon any of the properties or assets of Home Building
Bancorp or any of its Subsidiaries under, any of the terms, conditions or
provisions of any note, bond, indenture, deed of trust, loan agreement or other
agreement, instrument or obligation to which Home Building Bancorp or any of its
Subsidiaries is a party, or to which any of their respective properties or
assets may be subject except, in the case of (iii), for any such breaches,
violations or defaults that would not, individually or in the aggregate, have a
Material Adverse Effect on Home Building Bancorp.
(f) CONSENTS AND APPROVALS. No consents or approvals of, or
filings or registrations with, any Governmental Entity or any third party are
required to be made or obtained in connection with the execution and delivery by
Home Building Bancorp of this Agreement or the consummation by Home Building
Bancorp of the Merger and the other transactions contemplated by this Agreement,
including the Bank Merger, except for filings of applications and notices with,
receipt of approvals or nonobjections from, and expiration of the related
waiting period required by, federal and state banking authorities. As of the
date hereof, Home Building Bancorp has no knowledge of any reason pertaining to
Home Building Bancorp why any of the approvals referred to in this SECTION
3.2(F) should not be obtained without the imposition of any material condition
or restriction described in SECTION 6.1(B).
(g) GOVERNMENTAL FILINGS. Home Building Bancorp and each of
its Subsidiaries has filed all reports, schedules, registration statements and
other documents that it has been required to file since December 31, 2002 with
the OTS, the FDIC or any other Governmental Regulator (collectively, "HOME
BUILDING BANCORP'S REPORTS"). No administrative actions have been taken or
threatened or orders issued in connection with any of Home Building Bancorp's
Reports. As of their respective dates, each of Home Building Bancorp's Reports
complied in all material respects with all laws or regulations under which it
was filed (or was amended so as to be in compliance promptly following discovery
of such noncompliance). Any financial statement contained in any of Home
Building Bancorp's Reports fairly presented in all material respects the
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financial position of Home Building Bancorp on a consolidated basis, Home
Building Bancorp alone or each of Home Building Bancorp's Subsidiaries alone, as
the case may be, and was prepared in accordance with GAAP or applicable
regulations.
(h) FINANCIAL STATEMENTS. Home Building Bancorp's Disclosure
Letter contains copies of (i) the consolidated balance sheets of Home Building
Bancorp and its Subsidiaries as of September 30, 2005 and 2004 and related
consolidated statements of income, cash flows and changes in stockholders'
equity for each of the years in the two-year period ended September 30, 2005,
together with the notes thereto, accompanied by the audit report of Home
Building Bancorp's independent public auditors and (ii) the unaudited
consolidated balance sheet of Home Building Bancorp and its Subsidiaries as of
December 31, 2005 and the related consolidated statements of income and changes
in stockholders' equity for the three months ended December 31, 2005. Such
financial statements were prepared from the books and records of Home Building
Bancorp and its Subsidiaries, fairly present the consolidated financial position
of Home Building Bancorp and its Subsidiaries in each case at and as of the
dates indicated and the consolidated results of operations, retained earnings
and cash flows of Home Building Bancorp and its Subsidiaries for the periods
indicated, and, except as otherwise set forth in the notes thereto, were
prepared in accordance with GAAP consistently applied throughout the periods
covered thereby; PROVIDED, HOWEVER, that the unaudited financial statements for
interim periods are subject to normal year-end adjustments (which will not be
material individually or in the aggregate) and lack a statement of cash-flows
and footnotes. The books and records of Home Building Bancorp and its
Subsidiaries have been, and are being, maintained in all respects in accordance
with GAAP and any other legal and accounting requirements and reflect only
actual transactions.
(i) UNDISCLOSED LIABILITIES. Neither Home Building Bancorp
nor any of its Subsidiaries has incurred any debt, liability or obligation of
any nature whatsoever (whether accrued, contingent, absolute or otherwise and
whether due or to become due) other than liabilities reflected on or reserved
against in the consolidated balance sheet of Home Building Bancorp as of
September 30, 2005, except for (i) liabilities incurred since September 30, 2005
in the ordinary course of business consistent with past practice that, either
alone or when combined with all similar liabilities, have not had, and would not
reasonably be expected to have, a Material Adverse Effect on Home Building
Bancorp and (ii) liabilities incurred for legal, accounting, financial advising
fees and out-of-pocket expenses in connection with the transactions contemplated
by this Agreement.
(j) ABSENCE OF CERTAIN CHANGES OR EVENTS. Since September 30,
2005:
(i) Home Building Bancorp and its Subsidiaries have
conducted their respective businesses only in the ordinary and usual course of
such businesses consistent with their past practices;
(ii) there has not been any event or occurrence that
has had, or is reasonably expected to have, a Material Adverse Effect on Home
Building Bancorp;
(iii) Home Building Bancorp has not declared, paid or
set aside any dividends or distributions with respect to the Home Building
Bancorp Common Stock;
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(iv) except for supplies or equipment purchased in
the ordinary course of business, neither Home Building Bancorp nor any of its
Subsidiaries have made any capital expenditures exceeding individually or in the
aggregate $10,000;
(v) there has not been any write-down by Home
Building Savings in excess of $25,000 with respect to any of its Loans or other
real estate owned;
(vi) there has not been any sale, assignment or
transfer of any assets by Home Building Bancorp or any of its Subsidiaries in
excess of $10,000 other than in the ordinary course of business or pursuant to a
contract or agreement disclosed in Home Building Bancorp's Disclosure Letter;
(vii) there has been no increase in the salary,
compensation, pension or other benefits payable or to become payable by Home
Building Bancorp or any of its Subsidiaries to any of their respective
directors, officers or employees, other than in conformity with the policies and
practices of such entity in the usual and ordinary course of its business;
(viii) neither Home Building Bancorp nor any of its
Subsidiaries has paid or made any accrual or arrangement for payment of bonuses
or special compensation of any kind or any severance or termination pay to any
of their directors, officers or employees; and
(ix) there has been no change in any accounting
principles, practices or methods of Home Building Bancorp or any of its
Subsidiaries other than as required by GAAP.
(k) LITIGATION. Other than for routine matters incidental to
the business of Home Building Bancorp, which would not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect on Home
Building Bancorp, there are no suits, actions or legal, administrative or
arbitration proceedings pending or, to the knowledge of Home Building Bancorp,
threatened against or affecting Home Building Bancorp or any of its Subsidiaries
or any property or asset of Home Building Bancorp or any of its Subsidiaries. To
the knowledge of Home Building Bancorp, there are no investigations, reviews or
inquiries by any court or Governmental Entity pending or threatened against Home
Building Bancorp or any of its Subsidiaries. There are no judgments, decrees,
injunctions, orders or rulings of any Governmental Entity or arbitrator
outstanding against Home Building Bancorp or any of its Subsidiaries that have
not been satisfied or that enjoin Home Building Bancorp or any of its
Subsidiaries from taking any action.
(l) ABSENCE OF REGULATORY ACTIONS. Since December 31, 2002,
neither Home Building Bancorp nor any of its Subsidiaries has been a party to
any cease and desist order, written agreement or memorandum of understanding
with, or any commitment letter or similar undertaking to, or has been subject to
any action, proceeding, order or directive by any Government Regulator, or has
adopted any board resolutions at the request of any Government Regulator, or has
been advised by any Government Regulator that it is contemplating issuing or
requesting (or is considering the appropriateness of issuing or requesting) any
such action, proceeding, order, directive, written agreement, memorandum of
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understanding, commitment letter, board resolutions or similar undertaking.
There are no unresolved violations, criticisms or exceptions by any Government
Regulator with respect to any report or statement relating to any examinations
of Home Building Bancorp or its Subsidiaries.
(m) COMPLIANCE WITH LAWS. Home Building Bancorp and each of
its Subsidiaries conducts its business in compliance with all statutes, laws,
regulations, ordinances, rules, judgments, orders or decrees applicable to it.
Home Building Bancorp and each of its Subsidiaries has all permits, licenses,
certificates of authority, orders and approvals of, and has made all filings,
applications and registrations with, all Governmental Entities that are required
in order to permit it to carry on its business as it is presently conducted; all
such permits, licenses, certificates of authority, orders and approvals are in
full force and effect, and no suspension or cancellation of any of them is
threatened. Neither Home Building Bancorp nor any of its Subsidiaries has been
given notice or been charged with any violation of, any law, ordinance,
regulation, order, writ, rule, decree or condition to approval of any
Governmental Entity which, individually or in the aggregate, would reasonably be
expected to have a Material Adverse Effect on Home Building Bancorp.
(n) TAXES. All federal, state, local and foreign Tax returns
required to be filed by or on behalf of Home Building Bancorp or any of its
Subsidiaries have been timely filed or requests for extensions have been timely
filed and any such extension shall have been granted and not have expired, and
all such filed returns are complete and accurate in all material respects. All
Taxes shown on such returns, all Taxes required to be shown on returns for which
extensions have been granted and all other taxes required to be paid by Home
Building Bancorp or any of its Subsidiaries have been paid in full or adequate
provision has been made for any such Taxes on Home Building Bancorp's balance
sheet (in accordance with GAAP). There is no audit examination, deficiency
assessment, tax investigation or refund litigation with respect to any Taxes of
Home Building Bancorp or any of its Subsidiaries, and no claim has been made in
writing by any authority in a jurisdiction where Home Building Bancorp or any of
its Subsidiaries do not file Tax returns that Home Building Bancorp or any such
Subsidiary is subject to taxation in that jurisdiction. All Taxes, interest,
additions and penalties due with respect to completed and settled examinations
or concluded litigation relating to Home Building Bancorp or any of its
Subsidiaries have been paid in full or adequate provision has been made for any
such Taxes on Home Building Bancorp's balance sheet (in accordance with GAAP).
Home Building Bancorp and its Subsidiaries have not executed an extension or
waiver of any statute of limitations on the assessment or collection of any Tax
due that is currently in effect. Home Building Bancorp and each of its
Subsidiaries has withheld and paid all Taxes required to have been withheld and
paid in connection with amounts paid or owing to any employee, independent
contractor, creditor, shareholder or other third party, and Home Building
Bancorp and each of its Subsidiaries has timely complied with all applicable
information reporting requirements under Part III, Subchapter A of Chapter 61 of
the IRC and similar applicable state and local information reporting
requirements. Neither Home Building Bancorp nor any of its Subsidiaries is a
party to any agreement, contract, arrangement or plan that has resulted or would
result, individually or in the aggregate, in connection with this Agreement in
the payment of any "excess parachute payments" within the meaning of Section
280G of the IRC and neither Home Building Bancorp nor any of its Subsidiaries
has made any payments and is not a party to any agreement, and does not maintain
any plan, program or arrangement, that could require it to make any payments
(including any deemed payment of compensation upon the exercise of a Home
Building Bancorp Option or upon the issuance of any Home Building Bancorp Common
Stock), that would not be fully deductible by reason of Section 162(m) of the
IRC.
21
(o) AGREEMENTS.
(i) Home Building Bancorp's Disclosure Letter lists,
and contains a complete and correct copy of, any contract, arrangement,
commitment or understanding (whether written or oral) to which Home Building
Bancorp or any of its Subsidiaries is a party or is bound:
(A) with any executive officer or other key
employee of Home Building Bancorp or any of its Subsidiaries the benefits of
which are contingent, or the terms of which are materially altered, upon the
occurrence of a transaction involving Home Building Bancorp or any of its
Subsidiaries of the nature contemplated by this Agreement;
(B) with respect to the employment of any
directors, officers, employees or consultants;
(C) any of the benefits of which will be
increased, or the vesting or payment of the benefits of which will be
accelerated, by the occurrence of any of the transactions contemplated by this
Agreement, or the value of any of the benefits of which will be calculated on
the basis of any of the transactions contemplated by this Agreement (including
any stock option plan, phantom stock or stock appreciation rights plan,
restricted stock plan or stock purchase plan);
(D) containing covenants that limit the ability
of Home Building Bancorp or any of its Subsidiaries to compete in any line of
business or with any person, or that involve any restriction on the geographic
area in which, or method by which, Home Building Bancorp (including any
successor thereof) or any of its Subsidiaries may carry on its business (other
than as may be required by law or any regulatory agency);
(E) pursuant to which Home Building Bancorp
or any of its Subsidiaries may become obligated to invest in or contribute
capital to any entity;
(F) that relates to borrowings of money (or
guarantees thereof) by Home Building Bancorp or any of its Subsidiaries in
excess of $50,000, other than advances from the Federal Home Loan Bank of
Indianapolis; or
(G) which is a lease or license with respect
to any property, real or personal, whether as landlord, tenant, licensor or
licensee, involving a liability or obligation as obligor in excess of $25,000 on
an annual basis.
(ii) Neither Home Building Bancorp nor any of its
Subsidiaries is in default under (and no event has occurred which, with due
notice or lapse of time or both, would constitute a default under) or is in
violation of any provision of any note, bond, indenture, mortgage, deed of
21
trust, loan agreement, lease or other agreement to which it is a party or by
which it is bound or to which any of its respective properties or assets is
subject and, to the knowledge of Home Building Bancorp, no other party to any
such agreement (excluding any loan or extension of credit made by Home Building
Bancorp or any of its Subsidiaries) is in default in any respect thereunder,
except for such defaults or violations that would not, individually or in the
aggregate, have a Material Adverse Effect on Home Building Bancorp.
(p) INTELLECTUAL PROPERTY. Home Building Bancorp and each of
its Subsidiaries owns or possesses valid and binding licenses and other rights
to use without payment all patents, copyrights, trade secrets, trade names,
service marks and trademarks material to its business. Home Building Bancorp's
Disclosure Letter sets forth a complete and correct list of all material
trademarks, trade names, service marks and copyrights owned by or licensed to
Home Building Bancorp or any of its Subsidiaries for use in its business, and
all licenses and other agreements relating thereto and all agreements relating
to third party intellectual property that Home Building Bancorp or any of its
Subsidiaries is licensed or authorized to use in its business, including without
limitation any software licenses (collectively, the "INTELLECTUAL PROPERTY").
With respect to each item of Intellectual Property owned by Home Building
Bancorp or any of its Subsidiaries, the owner possesses all right, title and
interest in and to the item, free and clear of any Lien. With respect to each
item of Intellectual Property that Home Building Bancorp or any of its
Subsidiaries is licensed or authorized to use, the license, sublicense or
agreement covering such item is legal, valid, binding, enforceable and in full
force and effect. Neither Home Building Bancorp nor any of its Subsidiaries has
received any charge, complaint, claim, demand or notice alleging any
interference, infringement, misappropriation or violation with or of any
intellectual property rights of a third party (including any claims that Home
Building Bancorp or any of its Subsidiaries must license or refrain from using
any intellectual property rights of a third party). To the knowledge of Home
Building Bancorp, neither Home Building Bancorp nor any of its Subsidiaries has
interfered with, infringed upon, misappropriated or otherwise come into conflict
with any intellectual property rights of third parties and no third party has
interfered with, infringed upon, misappropriated or otherwise come into conflict
with any intellectual property rights of Home Building Bancorp or any of its
Subsidiaries.
(q) LABOR MATTERS. Home Building Bancorp and its Subsidiaries
are in material compliance with all applicable laws respecting employment,
retention of independent contractors, employment practices, terms and conditions
of employment, and wages and hours. Neither Home Building Bancorp nor any of its
Subsidiaries is or has ever been a party to, or is or has ever been bound by,
any collective bargaining agreement, contract or other agreement or
understanding with a labor union or labor organization with respect to its
employees, nor is Home Building Bancorp or any of its Subsidiaries the subject
of any proceeding asserting that it has committed an unfair labor practice or
seeking to compel it or any such Subsidiary to bargain with any labor
organization as to wages and conditions of employment nor has any such
proceeding been threatened, nor is there any strike, other labor dispute or
organizational effort involving Home Building Bancorp or any of its Subsidiaries
pending or, to the knowledge of Home Building Bancorp, threatened.
22
(r) EMPLOYEE BENEFIT PLANS.
(i) Home Building Bancorp's Disclosure Letter
contains a complete and accurate list of all pension, retirement, stock option,
stock purchase, stock ownership, savings, stock appreciation right, profit
sharing, deferred compensation, consulting, bonus, group insurance, severance
and other benefit plans, contracts, agreements and arrangements, including, but
not limited to, "employee benefit plans," as defined in Section 3(3) of ERISA,
incentive and welfare policies, contracts, plans and arrangements and all trust
agreements related thereto with respect to any present or former directors,
officers or other employees of Home Building Bancorp or any of its Subsidiaries
(hereinafter referred to collectively as the "HOME BUILDING BANCORP EMPLOYEE
PLANS"). Home Building Bancorp has previously delivered or made available to
First Bancorp true and complete copies of each agreement, plan and other
documents referenced in Home Building Bancorp's Disclosure Letter, along with,
where applicable, copies of the IRS Form 5500 or 5500-C for the most recently
completed year. There has been no announcement or commitment by Home Building
Bancorp or any of its Subsidiaries to create an additional Home Building Bancorp
Employee Plan, or to amend any Home Building Bancorp Employee Plan, except for
amendments required by applicable law which do not materially increase the cost
of such Home Building Bancorp Employee Plan.
(ii) There is no pending or threatened litigation,
administrative action or proceeding relating to any Home Building Bancorp
Employee Plan. All of the Home Building Bancorp Employee Plans comply in all
material respects with all applicable requirements of ERISA, the IRC and other
applicable laws. There has occurred no "prohibited transaction" (as defined in
Section 406 of ERISA or Section 4975 of the IRC) with respect to the Home
Building Bancorp Employee Plans which is likely to result in the imposition of
any penalties or taxes upon Home Building Bancorp or any of its Subsidiaries
under Section 502(i) of ERISA or Section 4975 of the IRC.
(iii) No liability to the Pension Benefit Guarantee
Corporation has been or is expected by Home Building Bancorp or any of its
Subsidiaries to be incurred with respect to any Home Building Bancorp Employee
Plan which is subject to Title IV of ERISA ("HOME BUILDING BANCORP PENSION
PLAN"), or with respect to any "single-employer plan" (as defined in Section
4001(a) of ERISA) currently or formerly maintained by Home Building Bancorp or
any ERISA Affiliate. No Home Building Bancorp Pension Plan had an "accumulated
funding deficiency" (as defined in Section 302 of ERISA), whether or not waived,
as of the last day of the end of the most recent plan year ending prior to the
date hereof; the fair market value of the assets of each Home Building Bancorp
Pension Plan exceeds the present value of the "benefit liabilities" (as defined
in Section 4001(a)(16) of ERISA) under such Home Building Bancorp Pension Plan
as of the end of the most recent plan year with respect to the respective Home
Building Bancorp Pension Plan ending prior to the date hereof, calculated on the
basis of the actuarial assumptions used in the most recent actuarial valuation
for such Home Building Bancorp Pension Plan as of the date hereof; and no notice
of a "reportable event" (as defined in Section 4043 of ERISA) for which the
30-day reporting requirement has not been waived has been required to be filed
for any Home Building Bancorp Pension Plan within the 12-month period ending on
23
the date hereof. Neither Home Building Bancorp nor any of its Subsidiaries has
provided, or is required to provide, security to any Home Building Bancorp
Pension Plan or to any single-employer plan of an ERISA Affiliate pursuant to
Section 401(a)(29) of the IRC. Neither Home Building Bancorp, its Subsidiaries,
nor any ERISA Affiliate has contributed to any "multiemployer plan," as defined
in Section 3(37) of ERISA, on or after September 26, 1980.
(iv) Each Home Building Bancorp Employee Plan that is
an "employee pension benefit plan" (as defined in Section 3(2) of ERISA) and
which is intended to be qualified under Section 401(a) of the IRC (a "HOME
BUILDING BANCORP QUALIFIED PLAN") has received a favorable determination letter
from the IRS, and Home Building Bancorp and its Subsidiaries are not aware of
any circumstances likely to result in revocation of any such favorable
determination letter. Each Home Building Bancorp Qualified Plan that is an
"employee stock ownership plan" (as defined in Section 4975(e)(7) of the IRC)
has satisfied all of the applicable requirements of Sections 409 and 4975(e)(7)
of the IRC and the regulations thereunder in all material respects and any
assets of any such Home Building Bancorp Qualified Plan that, as of the end of
the plan year, are not allocated to participants' individual accounts are
pledged as security for, and may be applied to satisfy, any securities
acquisition indebtedness.
(v) With respect to each Home Building Bancorp
Employee Plan that is a "multiple employer plan" (as defined in Section 4063 of
ERISA): (A) none of Home Building Bancorp or any of its Subsidiaries, nor any of
their respective ERISA Affiliates, has received any notification, nor has any
actual knowledge, that if Home Building Bancorp or any of its Subsidiaries or
any of their respective ERISA Affiliates were to experience a withdrawal or
partial withdrawal from such plan it would incur withdrawal liability that would
be reasonably likely to have a Material Adverse Effect on Home Building Bancorp;
and (B) none of Home Building Bancorp or any of its Subsidiaries, nor any of
their respective ERISA Affiliates, has received any notification, nor has any
reason to believe, that any Home Building Bancorp Employee Plan is in
reorganization, has been terminated, is insolvent, or may be in reorganization,
become insolvent or be terminated.
(vi) Neither Home Building Bancorp nor any of its
Subsidiaries has any obligations for post-retirement or post-employment benefits
under any Home Building Bancorp Employee Plan that cannot be amended or
terminated upon 60 days' notice or less without incurring any liability
thereunder, except for coverage required by Part 6 of Title I of ERISA or
Section 4980B of the IRC, or similar state laws, the cost of which is borne by
the insured individuals.
(vii) All contributions required to be made with
respect to any Home Building Bancorp Employee Plan by applicable law or
regulation or by any plan document or other contractual undertaking, and all
premiums due or payable with respect to insurance policies funding any Home
Building Bancorp Employee Plan, for any period through the date hereof have been
timely made or paid in full, or to the extent not required to be made or paid on
or before the date hereof, have been fully reflected in the financial statements
of Home Building Bancorp. Each Home Building Bancorp Employee Plan that is an
employee welfare benefit plan under Section 3(1) of ERISA either (A) is funded
through an insurance company contract and is not a "welfare benefit fund" within
the meaning of Section 419 of the IRC or (B) is unfunded.
24
(s) PROPERTIES.
(i) A list and description of all real property owned
or leased by Home Building Bancorp or a Subsidiary of Home Building Bancorp is
set forth in Home Building Bancorp's Disclosure Letter. Home Building Bancorp
and each of its Subsidiaries has good and marketable title to all real property
owned by it (including any property acquired in a judicial foreclosure
proceeding or by way of a deed in lieu of foreclosure or similar transfer), in
each case free and clear of any Liens except (i) liens for taxes not yet due and
payable and (ii) such easements, restrictions and encumbrances, if any, as are
not material in character, amount or extent, and do not materially detract from
the value, or materially interfere with the present use of the properties
subject thereto or affected thereby. Each lease pursuant to which Home Building
Bancorp or any of its Subsidiaries as lessee, leases real or personal property
is valid and in full force and effect and neither Home Building Bancorp nor any
of its Subsidiaries, nor, to Home Building Bancorp's knowledge, any other party
to any such lease, is in default or in violation of any material provisions of
any such lease. A complete and correct copy of each such lease is attached to
Home Building Bancorp's Disclosure Letter. All real property owned or leased by
Home Building Bancorp or any of its Subsidiaries are in a good state of
maintenance and repair (normal wear and tear excepted), conform with all
applicable ordinances, regulations and zoning laws and are considered by Home
Building Bancorp to be adequate for the current business of Home Building
Bancorp and its Subsidiaries. To the knowledge of Home Building Bancorp, none of
the buildings, structures or other improvements located on any real property
owned or leased by Home Building Bancorp or any of its Subsidiaries encroaches
upon or over any adjoining parcel or real estate or any easement or
right-of-way.
(ii) Home Building Bancorp and each of its
Subsidiaries has good and marketable title to all tangible personal property
owned by it, free and clear of all Liens except such Liens, if any, as are not
material in character, amount or extent, and do not materially detract from the
value, or materially interfere with the present use of the properties subject
thereto or affected thereby. With respect to personal property used in the
business of Home Building Bancorp and its Subsidiaries that is leased rather
than owned, neither Home Building Bancorp nor any of its Subsidiaries is in
default under the terms of any such lease.
(t) FAIRNESS OPINION. Home Building Bancorp has received the
opinion of ▇▇▇▇▇▇▇▇▇ & Associates, LLC to the effect that, as of the date
hereof, the Merger Consideration is fair, from a financial point of view, to
Home Building Bancorp's shareholders.
(u) FEES. Other than for financial advisory services
performed for Home Building Bancorp by ▇▇▇▇▇▇▇▇▇ & Associates, LLC pursuant to
an agreement dated December 21, 2005, a true and complete copy of which is
attached as an exhibit to Home Building Bancorp's Disclosure Letter, neither
Home Building Bancorp nor any of its Subsidiaries, nor any of their respective
officers, directors, employees or agents, has employed any broker or finder or
incurred any liability for any financial advisory fees, brokerage fees,
commissions or finder's fees, and no broker or finder has acted directly or
indirectly for Home Building Bancorp or any of its Subsidiaries in connection
with this Agreement or the transactions contemplated hereby.
25
(v) ENVIRONMENTAL MATTERS.
(i) Each of Home Building Bancorp and its
Subsidiaries, the Participation Facilities, and, to the knowledge of Home
Building Bancorp, the Loan Properties are, and have been, in substantial
compliance with all Environmental Laws.
(ii) There is no suit, claim, action, demand,
executive or administrative order, directive, investigation or proceeding
pending or, to the knowledge of Home Building Bancorp, threatened, before any
court, governmental agency or board or other forum against Home Building Bancorp
or any of its Subsidiaries or any Participation Facility (A) for alleged
noncompliance (including by any predecessor) with, or liability under, any
Environmental Law or (B) relating to the presence of or release into the
environment of any Hazardous Material, whether or not occurring at or on a site
owned, leased or operated by Home Building Bancorp or any of its Subsidiaries or
any Participation Facility.
(iii) To the knowledge of Home Building Bancorp,
there is no suit, claim, action, demand, executive or administrative order,
directive, investigation or proceeding pending or threatened before any court,
governmental agency or board or other forum relating to or against any Loan
Property (or Home Building Bancorp or any of its Subsidiaries in respect of such
Loan Property) (A) relating to alleged noncompliance (including by any
predecessor) with, or liability under, any Environmental Law or (B) relating to
the presence of or release into the environment of any Hazardous Material,
whether or not occurring at a Loan Property.
(iv) Neither Home Building Bancorp nor any of its
Subsidiaries has received any notice, demand letter, executive or administrative
order, directive or request for information from any Governmental Entity or any
third party indicating that it may be in violation of, or liable under, any
Environmental Law.
(v) There are no underground storage tanks at any
properties owned or operated by Home Building Bancorp or any of its Subsidiaries
or any Participation Facility. Neither Home Building Bancorp nor any of its
Subsidiaries nor, to the knowledge of Home Building Bancorp, any other person or
entity, has closed or removed any underground storage tanks from any properties
owned or operated by Home Building Bancorp or any of its Subsidiaries or any
Participation Facility.
(vi) During the period of (A) Home Building Bancorp's
or its Subsidiary's ownership or operation of any of their respective current
properties or (B) Home Building Bancorp's or its Subsidiary's participation in
the management of any Participation Facility, there has been no release of
Hazardous Materials in, on, under or affecting such properties. To the knowledge
of Home Building Bancorp, prior to the period of (A) Home Building Bancorp's or
its Subsidiary's ownership or operation of any of their respective current
properties or (B) Home Building Bancorp's or its Subsidiary's participation in
the management of any Participation Facility, there was no contamination by or
release of Hazardous Material in, on, under or affecting such properties.
26
(w) LOAN PORTFOLIO; ALLOWANCE FOR LOAN LOSSES.
(i) With respect to each Loan owned by Home Building
Bancorp or its Subsidiaries in whole or in part:
(A) The note and the related security
documents are each legal, valid and binding obligations of the maker or obligor
thereof, enforceable against such maker or obligor in accordance with their
terms;
(B) neither Home Building Bancorp nor any
of its Subsidiaries, nor any prior holder of a Loan, has modified the note or
any of the related security documents in any material respect or satisfied,
canceled or subordinated the note or any of the related security documents
except as otherwise disclosed by documents in the applicable Loan file;
(C) Home Building Bancorp or a Subsidiary
of Home Building Bancorp is the sole holder of legal and beneficial title to
each Loan (or Home Building Bancorp's or its Subsidiary's applicable
participation interest, as applicable), except as otherwise referenced on the
books and records of Home Building Bancorp or a Subsidiary of Home Building
Bancorp;
(D) the original note and the related
security documents are included in the Loan files, and copies of any documents
in the Loan files are true and correct copies of the documents they purport to
be and have not been suspended, amended, modified, canceled or otherwise changed
except as otherwise disclosed by documents in the applicable Loan file; and
(E) with respect to a Loan held in the
form of a participation, the participation documentation is legal, valid,
binding and enforceable in accordance with its terms, subject to bankruptcy,
insolvency, fraudulent conveyance and other laws of general applicability
relating to or affecting creditors' rights and to general equity principles.
(ii) Neither the terms of any Loan, any of the
documentation for any Loan, the manner in which any Loans have been administered
and serviced, nor Home Building Bancorp's practices of approving or rejecting
Loan applications, violate any federal, state, or local law, rule or regulation
applicable thereto, including, without limitation, the Truth In Lending Act,
Regulations O and Z of the Federal Reserve Board, the CRA, the Equal Credit
Opportunity Act, and any state laws, rules and regulations relating to consumer
protection, installment sales and usury.
(iii) The allowance for loan losses reflected in Home
Building Bancorp's audited balance sheet at September 30, 2005 was, and the
allowance for loan losses shown on the balance sheets in Home Building Bancorp's
Reports for periods ending after such date, in the opinion of management, was or
will be adequate, as of the dates thereof, under GAAP.
27
(x) ANTI-TAKEOVER PROVISIONS INAPPLICABLE. Home Building
Bancorp and its Subsidiaries have taken all actions required to exempt First
Bancorp, the Agreement, the Plan of Bank Merger, the Merger and the Bank Merger
from any provisions of an antitakeover nature contained in their organizational
documents, and the provisions of any federal or state "anti-takeover," "fair
price," "moratorium," "control share acquisition" or similar laws or
regulations.
(y) MATERIAL INTERESTS OF CERTAIN PERSONS. No current or
former officer or director of Home Building Bancorp, or any family member or
affiliate of any such person, has any material interest, directly or indirectly,
in any contract or property (real or personal), tangible or intangible, used in
or pertaining to the business of Home Building Bancorp or any of its
Subsidiaries.
(z) INSURANCE. In the opinion of management, Home Building
Bancorp and its Subsidiaries are presently insured for amounts deemed reasonable
by management against such risks as companies engaged in a similar business
would, in accordance with good business practice, customarily be insured. Home
Building Bancorp's Disclosure Letter contains a list of all policies of
insurance carried and owned by Home Building Bancorp or any of Home Building
Bancorp's Subsidiaries showing the name of the insurance company and agent, the
nature of the coverage, the policy limit, the annual premiums and the expiration
date. All of the insurance policies and bonds maintained by Home Building
Bancorp and its Subsidiaries are in full force and effect, Home Building Bancorp
and its Subsidiaries are not in default thereunder, all premiums and other
payments due under any such policy have been paid and all material claims
thereunder have been filed in due and timely fashion.
(aa) INVESTMENT SECURITIES; DERIVATIVES.
(i) Except for restrictions that exist for securities
that are classified as "held to maturity," none of the investment securities
held by Home Building Bancorp or any of its Subsidiaries is subject to any
restriction (contractual or statutory) that would materially impair the ability
of the entity holding such investment freely to dispose of such investment at
any time.
(ii) Neither Home Building Bancorp nor any of its
Subsidiaries is a party to or has agreed to enter into an exchange-traded or
over-the-counter equity, interest rate, foreign exchange or other swap, forward,
future, option, cap, floor or collar or any other contract that is a derivative
contract (including various combinations thereof) or owns securities that (A)
are referred to generically as "structured notes," "high risk mortgage
derivatives," "capped floating rate notes" or "capped floating rate mortgage
derivatives" or (B) are likely to have changes in value as a result of interest
or exchange rate changes that significantly exceed normal changes in value
attributable to interest or exchange rate changes.
(bb) INDEMNIFICATION. Except as provided in the articles of
incorporation or bylaws of Home Building Bancorp and the similar organizational
documents of its Subsidiaries, neither Home Building Bancorp nor any of its
Subsidiaries is a party to any agreement that provides for the indemnification
of any of its present or former directors, officers or employees, or other
persons who serve or served as a director, officer or employee of another
corporation, partnership or other enterprise at the request of Home Building
28
Bancorp and, to the knowledge of Home Building Bancorp, there are no claims for
which any such person would be entitled to indemnification under the certificate
of incorporation or bylaws of Home Building Bancorp or the similar
organizational documents of any of its Subsidiaries, under any applicable law or
regulation or under any indemnification agreement.
(cc) CORPORATE DOCUMENTS AND RECORDS. Home Building Bancorp's
Disclosure Letter includes a complete and correct copy of the articles of
incorporation, bylaws and similar organizational documents of Home Building
Bancorp and each of Home Building Bancorp's Subsidiaries, as in effect as of the
date of this Agreement. Neither Home Building Bancorp nor any of Home Building
Bancorp's Subsidiaries is in violation of its articles of incorporation, bylaws
or similar organizational documents. The minute books of Home Building Bancorp
and each of Home Building Bancorp's Subsidiaries constitute a complete and
correct record of all actions taken by their respective boards of directors (and
each committee thereof) and their shareholders. Home Building Bancorp and each
of its Subsidiaries maintains accounting records that fairly and accurately
reflect, in all material respects, its transactions, and accounting controls
exist sufficient to provide reasonable assurances that such transactions are, in
all material respects, (i) executed in accordance with management's general or
specific authorization and (ii) recorded as necessary to permit the preparation
of financial statements in accordance with GAAP.
(dd) HOME BUILDING BANCORP INFORMATION. The information
regarding Home Building Bancorp and its Subsidiaries to be supplied by Home
Building Bancorp for inclusion in the Registration Statement, any filings or
approvals under applicable state securities laws or any filing pursuant to Rule
165 or Rule 425 under the Securities Act or Rule 14a-12 under the Exchange Act
will not contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they are made, not
misleading.
(ee) CRA, ANTI-MONEY LAUNDERING, OFAC AND CUSTOMER INFORMATION
SECURITY. Home Building Savings has received a rating of "Satisfactory" in its
most recent examination or interim review with respect to the CRA. Home Building
Bancorp is not aware of, has not been advised of, and has no reason to believe
that any facts or circumstances exist that would cause Home Building Savings or
any other Subsidiary of Home Building Bancorp: (i) to be deemed not to be in
satisfactory compliance in any material respect with the CRA, and the
regulations promulgated thereunder, or to be assigned a rating for CRA purposes
by federal or state bank regulators of lower than "satisfactory"; or (ii) to be
deemed to be operating in violation in any material respect of the Bank Secrecy
Act, the Patriot Act, any order issued with respect to anti-money laundering by
the U.S. Department of the Treasury's Office of Foreign Assets Control, or any
other applicable anti-money laundering statute, rule or regulation; or (iii) to
be deemed not to be in satisfactory compliance in any material respect with the
applicable privacy of customer information requirements contained in any federal
and sate privacy laws and regulations, including without limitation, in Title V
of the ▇▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Act of 1999 and the regulations promulgated
thereunder, as well as the provisions of the information security program
adopted by Home Building Savings. Home Building Bancorp is not aware of any
facts or circumstances that would cause it to believe that any non-public
30
customer information has been disclosed to or accessed by an unauthorized third
party in a manner which would cause either Home Building Bancorp or of its
Subsidiaries to undertake any remedial action. The board of directors of Home
Building Savings (or where appropriate of any other Subsidiary of Home Building
Bancorp) has adopted, and Home Building Savings (or such other Subsidiary of
Home Building Bancorp) has implemented, an anti-money laundering program that
contains adequate and appropriate customer identification verification
procedures that comply with Section 326 of the Patriot Act and such anti-money
laundering program meets the requirements in all material respects of Section
352 of the Patriot Act and the regulations thereunder, and Home Building Savings
(or such other Subsidiary of Home Building Bancorp) has complied in all material
respects with any requirements to file reports and other necessary documents as
required by the Patriot Act and the regulations thereunder.
(ff) TAX TREATMENT OF THE MERGER. Home Building Bancorp has no
knowledge of any fact or circumstance relating to it that would prevent the
transactions contemplated by this Agreement from qualifying as a reorganization
under Section 368 of the IRC.
3.3 REPRESENTATIONS AND WARRANTIES OF FIRST BANCORP. First
Bancorp represents and warrants to Home Building Bancorp that, except as set
forth in First Bancorp's Disclosure Letter:
(a) ORGANIZATION AND QUALIFICATION. First Bancorp is a
corporation duly organized and validly existing under the laws of the State of
Indiana and is registered with the OTS as a savings and loan holding company.
First Bancorp has all requisite corporate power and authority to own, lease and
operate its properties and to conduct the business currently being conducted by
it. First Bancorp is duly qualified or licensed as a foreign corporation to
transact business and is in good standing in each jurisdiction in which the
character of the properties owned or leased by it or the nature of the business
conducted by it makes such qualification or licensing necessary, except where
the failure to be so qualified or licensed and in good standing would not have a
Material Adverse Affect on First Bancorp.
(b) SUBSIDIARIES. First Bancorp owns of record and
beneficially all the capital stock of each of First Federal free and clear of
any Liens. First Federal is a federally chartered savings bank duly organized
and validly existing under the laws of the United States of America, has all
requisite corporate power and authority to own, lease and operate its properties
and to conduct the business currently being conducted by it and is duly
qualified or licensed as a foreign corporation to transact business and is in
good standing in each jurisdiction in which the character of the properties
owned or leased by it or the nature of the business conducted by it makes such
qualification or licensing necessary, except where the failure to be so
qualified or licensed and in good standing would not have a Material Adverse
Affect on First Federal. First Federal's deposits are insured by the FDIC to the
fullest extent permitted by law. First Federal is a member in good standing of
the Federal Home Loan Bank of Indianapolis. First Federal engages only in
activities (and holds properties only of the types) permitted by the HOLA and
the rules and regulations of the OTS promulgated thereunder.
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(c) CAPITAL STRUCTURE.
(i) The authorized capital stock of First Bancorp
consists of: (A) 9,000,000 shares of First Bancorp Common Stock; and (B)
1,000,000 shares of preferred stock, par value $.01 per share.
(ii) As of March 31, 2006, (A) 1,553,748 shares of
First Bancorp Common Stock were issued and outstanding, all of which are validly
issued, fully paid and nonassessable and were issued in full compliance with all
applicable laws; (B) no shares of First Bancorp preferred stock are issued and
outstanding; and (C) 118,549 shares of First Bancorp Common Stock were reserved
for issuance pursuant to outstanding grants or awards under First Bancorp's
stock-based benefit plans.
(iii) The shares of First Bancorp Common Stock to be
issued in exchange for shares of Home Building Bancorp Common Stock upon
consummation of the Merger in accordance with this Agreement have been duly
authorized and when issued in accordance with the terms of this Agreement, will
be validly issued, fully paid and nonassessable and subject to no preemptive
rights.
(d) AUTHORITY. First Bancorp has all requisite corporate power
and authority to enter into this Agreement, to perform its obligations hereunder
and to consummate the transactions contemplated by this Agreement. The execution
and delivery of this Agreement and the consummation of the transactions
contemplated by this Agreement have been duly authorized by all necessary
corporate actions on the part of the Board of Directors of First Bancorp, and no
other corporate proceedings on the part of First Bancorp are necessary to
authorize this Agreement or to consummate the transactions contemplated by this
Agreement. This Agreement has been duly and validly executed and delivered by
First Bancorp and constitutes a valid and binding obligation of First Bancorp,
enforceable against First Bancorp in accordance with its terms, subject to
applicable bankruptcy, insolvency and similar laws affecting creditors' rights
and remedies generally and to general principles of equity, whether applied in a
court of law or a court of equity.
(e) NO VIOLATIONS. The execution, delivery and performance of
this Agreement by First Bancorp do not, and the consummation of the transactions
contemplated by this Agreement will not, (i) assuming all required governmental
approvals have been obtained and the applicable waiting periods have expired,
violate any law, rule or regulation or any judgment, decree, order, governmental
permit or license to which First Bancorp or any of its Subsidiaries (or any of
their respective properties) is subject, (ii) violate the articles of
incorporation or bylaws of First Bancorp or the similar organizational documents
of any of its Subsidiaries or (iii) constitute a breach or violation of, or a
default under (or an event which, with due notice or lapse of time or both,
would constitute a default under), or result in the termination of, accelerate
the performance required by, or result in the creation of any Lien upon any of
the properties or assets of First Bancorp or any of its Subsidiaries under, any
of the terms, conditions or provisions of any note, bond, indenture, deed of
trust, loan agreement or other agreement, instrument or obligation to which
First Bancorp or any of its Subsidiaries is a party, or to which any of their
respective properties or assets may be subject except, in the case of (iii), for
any such breaches, violations or defaults that would not, individually or in the
aggregate, have a Material Adverse Effect on First Bancorp.
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(f) CONSENTS AND APPROVALS. No consents or approvals of, or
filings or registrations with, any Governmental Entity or any third party are
required to be made or obtained in connection with the execution and delivery by
First Bancorp of this Agreement or the consummation by First Bancorp of the
Merger and the other transactions contemplated by this Agreement, including the
Bank Merger, except for (i) filings of applications and notices with, receipt of
approvals or nonobjections from, and expiration of the related waiting period
required by, federal and state banking authorities, (ii) filing of the
Registration Statement with the SEC and declaration by the SEC of the
Registration Statement's effectiveness under the Securities Act, (iii) the
registration or qualification of the shares of First Bancorp Common Stock to be
issued in exchange for shares of Home Building Bancorp Common Stock under state
securities or "blue sky" laws and (iv) the listing of the shares of First
Bancorp Common Stock to be issued in exchange for shares of Home Building
Bancorp Common Stock on the Nasdaq Stock Market. As of the date hereof, First
Bancorp knows of no reason pertaining to First Bancorp why any of the approvals
referred to in this SECTION 3.3(F) should not be obtained without the imposition
of any material condition or restriction described in SECTION 6.1(B).
(g) SECURITIES FILINGS. First Bancorp has filed with the SEC
all reports, schedules, registration statements, definitive proxy statements and
other documents that it has been required to file under the Securities Act or
the Exchange Act since December 31, 2002 (collectively, "FIRST BANCORP'S
REPORTS"). None of First Bancorp's Reports contained any untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or necessary to make the statements made therein, in light of the circumstances
under which they were made, not misleading. As of their respective dates, all of
First Bancorp's Reports complied in all material respects with the applicable
requirements of the Securities Act or the Exchange Act, as the case may be, and
the rules and regulations of the SEC promulgated thereunder. Each of the
financial statements (including, in each case, any notes thereto) of First
Bancorp included in First Bancorp's Reports complied as to form, as of their
respective dates of filing with the SEC, in all material respects with
applicable accounting requirements and with the published rules and regulations
of the SEC with respect thereto.
(h) FINANCIAL STATEMENTS. First Bancorp has previously made
available to Home Building Bancorp copies of (i) the consolidated balance sheets
of First Bancorp and its Subsidiaries as of June 30, 2005 and 2004 and related
consolidated statements of income, cash flows and changes in stockholders'
equity for each of the years in the three-year period ended June 30, 2005,
together with the notes thereto, accompanied by the audit report of First
Bancorp's independent public auditors, as reported in First Bancorp's Annual
Report on Form 10-KSB for the year ended June 30, 2005 filed with the SEC and
(ii) the unaudited consolidated balance sheet of First Bancorp and its
Subsidiaries as of December 31, 2005 and the related consolidated statements of
income, cash flows and changes in stockholders' equity for the six months ended
December 31, 2005, as reported in First Bancorp's Quarterly Report on Form
10-QSB for the period ended December 31, 2005 filed with the SEC. Such financial
statements were prepared from the books and records of First Bancorp and its
Subsidiaries, fairly present the consolidated financial position of First
Bancorp and its Subsidiaries in each case at and as of the dates indicated and
the consolidated results of operations, retained earnings and cash flows of
32
First Bancorp and its Subsidiaries for the periods indicated, and, except as
otherwise set forth in the notes thereto, were prepared in accordance with GAAP
consistently applied throughout the periods covered thereby; PROVIDED, HOWEVER,
that the unaudited financial statements for interim periods are subject to
normal year-end adjustments (which will not be material individually or in the
aggregate) and lack a statement of cash flows and footnotes to the extent
permitted under applicable regulations. The books and records of First Bancorp
and its Subsidiaries have been, and are being, maintained in all respects in
accordance with GAAP and any other legal and accounting requirements and reflect
only actual transactions.
(i) UNDISCLOSED LIABILITIES. Neither First Bancorp nor any of
its Subsidiaries has incurred any debt, liability or obligation of any nature
whatsoever (whether accrued, contingent, absolute or otherwise and whether due
or to become due) other than liabilities reflected on or reserved against in the
consolidated balance sheet of First Bancorp as of December 31, 2005 as included
in First Bancorp's Quarterly Report on Form 10-QSB for the period ended December
31, 2005, except for (i) liabilities incurred since December 31, 2005 in the
ordinary course of business consistent with past practice that, either alone or
when combined with all similar liabilities, have not had, and would not
reasonably be expected to have, a Material Adverse Effect on First Bancorp and
(ii) liabilities incurred for legal, accounting, financial advising fees and
out-of-pocket expenses in connection with the transactions contemplated by this
Agreement.
(j) ABSENCE OF CERTAIN CHANGES OR EVENTS. Except as disclosed
in First Bancorp's Reports filed with the SEC prior to the date of this
Agreement, since December 31, 2005, (i) First Bancorp and its Subsidiaries have
conducted their respective businesses only in the ordinary and usual course of
such businesses consistent with their past practices and (ii) there has not been
any event or occurrence that has had, or is reasonably expected to have, a
Material Adverse Effect on First Bancorp.
(k) LITIGATION. There are no suits, actions or legal,
administrative or arbitration proceedings pending or, to the knowledge of First
Bancorp, threatened against or affecting First Bancorp or any of its
Subsidiaries or any property or asset of First Bancorp or any of its
Subsidiaries that (i) individually or in the aggregate, would reasonably be
expected to have a Material Adverse Effect on First Bancorp or (ii) challenge
the validity or propriety of the transactions contemplated by this Agreement.
There are no judgments, decrees, injunctions, orders or rulings of any
Governmental Entity or arbitrator outstanding against First Bancorp or any of
its Subsidiaries that, individually or in the aggregate, would reasonably be
expected to have a Material Adverse Effect on First Bancorp.
(l) ABSENCE OF REGULATORY ACTIONS. Since December 31, 2002,
neither First Bancorp nor any of its Subsidiaries has been a party to any cease
and desist order, written agreement or memorandum of understanding with, or any
commitment letter or similar undertaking to, or has been subject to any action,
proceeding, order or directive by any Government Regulator, or has adopted any
board resolutions at the request of any Government Regulator, or has been
advised by any Government Regulator that it is contemplating issuing or
requesting (or is considering the appropriateness of issuing or requesting) any
such action, proceeding, order, directive, written agreement, memorandum of
33
understanding, commitment letter, board resolutions or similar undertaking.
There are no unresolved violations, criticisms or exceptions by any Government
Regulator with respect to any report or statement relating to any examinations
of First Bancorp or its Subsidiaries.
(m) FIRST BANCORP INFORMATION. The information regarding First
Bancorp and its Subsidiaries to be supplied by First Bancorp for inclusion in
the Registration Statement, any filings or approvals under applicable state
securities laws, or any filing pursuant to Rule 165 or Rule 425 under the
Securities Act or Rule 14a-12 under the Exchange Act will not contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary in order to make the statements therein, in light of
the circumstances under which they are made, not misleading. The Proxy
Statement-Prospectus (except for such portions thereof that relate only to Home
Building Bancorp or any of its Subsidiaries) will comply as to form in all
material respects with the provisions of the Exchange Act and the rules and
regulations thereunder. The Registration Statement will comply as to form in all
material respects with the provisions of the Securities Act and the rules and
regulations thereunder.
(n) TAX TREATMENT OF THE MERGER. First Bancorp has no
knowledge of any fact or circumstance relating to it that would prevent the
transactions contemplated by this Agreement from qualifying as a reorganization
under Section 368 of the IRC.
(o) AVAILABILITY OF FUNDS. First Bancorp has and will have
available to it at the Effective Time, sources of capital sufficient to pay the
aggregate Cash Consideration and to pay any other amounts payable pursuant to
this Agreement and to effect the transactions contemplated hereby.
ARTICLE IV
CONDUCT PENDING THE MERGER
4.1 FORBEARANCES BY HOME BUILDING BANCORP. Except as expressly
contemplated or permitted by this Agreement, during the period from the date of
this Agreement to the Effective Time, Home Building Bancorp shall not, nor shall
Home Building Bancorp permit any of its Subsidiaries to, without the prior
written consent of First Bancorp, which consent shall not be unreasonably
withheld:
(a) conduct its business other than in the regular, ordinary
and usual course consistent with past practice; fail to maintain and preserve
intact its business organization, properties, leases, employees and advantageous
business relationships and retain the services of its officers and key
employees; or take any action that would adversely affect or delay its ability
to perform its obligations under this Agreement or to consummate the
transactions contemplated hereby;
(b) (i) incur, modify, extend or renegotiate any indebtedness
for borrowed money, or assume, guarantee, endorse or otherwise as an
accommodation become responsible for the obligations of any other individual,
corporation or other entity, other than (A) the creation of deposit liabilities
in the ordinary course of business consistent with past practice and (B)
34
advances from the Federal Home Loan Bank of Indianapolis with a maturity of not
more than one year;
(ii) prepay any indebtedness or other similar
arrangements so as to cause Home Building Bancorp to incur any prepayment
penalty thereunder;
(c) (i) adjust, split, combine or reclassify any capital
stock;
(ii) make, declare or pay any dividend or any other
distribution on its capital stock, except for regular quarterly cash dividends
at a rate not in excess of $0.115 per share of Home Building Bancorp Common
Stock and dividends paid by any of Home Building Bancorp's Subsidiaries for the
purpose of enabling Home Building Bancorp to pay such dividends;
(iii) grant any stock appreciation rights or grant
any individual, corporation or other entity any right to acquire any shares of
its capital stock;
(iv) issue any additional shares of capital stock or
any securities or obligations convertible or exercisable for any shares of its
capital stock except pursuant to the exercise of stock options outstanding as of
the date hereof; or
(v) directly or indirectly redeem, purchase or
otherwise acquire any shares of its capital stock;
(d) sell, transfer, mortgage, encumber or otherwise dispose of
any of its material properties or assets to any individual, corporation or other
entity other than a Subsidiary, or cancel, release or assign any indebtedness to
any such person or any claims held by any such person, except in the ordinary
course of business consistent with past practice or pursuant to contracts or
agreements in force at the date of this Agreement;
(e) except pursuant to contracts or agreements in force at the
date of or permitted by this Agreement, make any equity investment, either by
purchase of stock or securities, contributions to capital, property transfers,
or purchase of any property or assets of any other individual, corporation or
other entity;
(f) enter into, renew, amend or terminate any contract or
agreement, or make any change in any of its leases or contracts, other than with
respect to those involving aggregate payments of less than, or the provision of
goods or services with a market value of less than, $10,000 per annum and other
than contracts or agreements covered by SECTION 4.1(G);
(g) make, renegotiate, renew, increase, extend, modify or
purchase any loan, lease (credit equivalent), advance, credit enhancement or
other extension of credit, or make any commitment in respect of any of the
foregoing, except (i) in conformity with existing lending practices in amounts
not to exceed an aggregate of $400,000 with respect to any individual borrower,
or (ii) loans or advances as to which Home Building Bancorp has a binding
obligation to make such loans or advances as of the date hereof;
35
(h) except for loans or extensions of credit made on terms
generally available to the public, make or increase any loan or other extension
of credit, or commit to make or increase any such loan or extension of credit,
to any director or executive officer of Home Building Bancorp or Home Building
Savings, or any entity controlled, directly or indirectly, by any of the
foregoing, other than renewals of existing loans or commitments to loan;
(i) (i) increase in any manner the compensation or fringe
benefits of any of its employees or directors other than in the ordinary course
of business consistent with past practice and pursuant to policies currently in
effect, or pay any bonus, pension, retirement allowance or contribution not
required by any existing plan or agreement to any such employees or directors;
(ii) become a party to, amend or commit itself to any
pension, retirement, profit-sharing or welfare benefit plan or agreement or
employment agreement with or for the benefit of any employee or director;
(iii) voluntarily accelerate the vesting of, or the
lapsing of restrictions with respect to, any stock options or other stock-based
compensation; or
(iv) elect to any senior executive office any person
who is not a member of its senior executive officer team as of the date of this
Agreement or elect to its Board of Directors any person who is not a member of
its Board of Directors as of the date of this Agreement, or hire any employee
with annual compensation in excess of $30,000;
(j) settle any claim, action or proceeding involving payment
by it of money damages in excess of $20,000 or impose any material restriction
on its operations or the operations of any of its Subsidiaries;
(k) amend its articles of incorporation or bylaws, or similar
governing documents;
(l) restructure or materially change its investment securities
portfolio or its interest rate risk position, through purchases, sales or
otherwise, or in the manner in which the portfolio is classified;
(m) make any investment in any debt security, including
mortgage-backed and mortgage-related securities, other than U.S. government and
U.S. government agency securities with final maturities not greater than one
year;
(n) make any capital expenditures other than pursuant to
binding commitments existing on the date hereof and other than expenditures
necessary to maintain existing assets in good repair or to make payment of
necessary taxes;
(o) establish or commit to the establishment of any new branch
or other office facilities or file any application to relocate or terminate the
operation of any banking office;
36
(p) take any action that is intended or expected to result in
any of its representations and warranties set forth in this Agreement being or
becoming untrue in any material respect at any time prior to the Effective Time,
or in any of the conditions to the Merger set forth in Article VI not being
satisfied or in a violation of any provision of this Agreement;
(q) implement or adopt any change in its accounting
principles, practices or methods, other than as may be required by GAAP or
regulatory guidelines;
(r) knowingly take action that would prevent or impede the
Merger from qualifying as a reorganization within the meaning of Section 368 of
the IRC; or
(s) agree to take, make any commitment to take, or adopt any
resolutions of its board of directors in support of, any of the actions
prohibited by this SECTION 4.1.
Any request by Home Building Bancorp or response thereto by
First Bancorp shall be made in accordance with the notice provisions of SECTION
8.7 and shall note that it is a request pursuant to this SECTION 4.1.
4.2 FORBEARANCES BY FIRST BANCORP. Except as expressly
contemplated or permitted by this Agreement, and except to the extent required
by law or regulation or any Governmental Entity, during the period from the date
of this Agreement to the Effective Time, First Bancorp shall not, nor shall
First Bancorp permit any of its Subsidiaries to, without the prior written
consent of Home Building Bancorp, which shall not unreasonably be withheld:
(a) take any action that would adversely affect or delay its
ability to perform its obligations under this Agreement or to consummate the
transactions contemplated hereby;
(b) take any action that is intended to or expected to result
in any of its representations and warranties set forth in this Agreement being
or becoming untrue in any material respect at any time prior to the Effective
Time, or in any of the conditions to the Merger set forth in Article VI not
being satisfied or in a violation of any provision of this Agreement;
(c) knowingly take action that would prevent or impede the
Merger from qualifying as a reorganization within the meaning of Section 368 of
the IRC; or
(d) agree to take, make any commitment to take, or adopt any
resolutions of its Board of Directors in support of, any of the actions
prohibited by this SECTION 4.2.
ARTICLE V
COVENANTS
5.1 ACQUISITION PROPOSALS.
(a) Except as permitted by this Agreement, Home Building
Bancorp shall not, and shall not authorize or permit any of its Subsidiaries or
any of its Subsidiaries' officers, directors or employees or any investment
37
banker, financial advisor, attorney, accountant or other representative retained
by Home Building Bancorp or any of its Subsidiaries to, directly or indirectly,
(i) solicit, initiate or encourage (including by way of furnishing non-public
information), or take any other action to facilitate, any inquiries, discussions
or the making of any proposal that constitutes or could reasonably be expected
to lead to an Acquisition Proposal, (ii) participate in any discussions or
negotiations, or otherwise communicate in any way with any person (other than
First Bancorp), regarding an Acquisition Proposal or (iii) enter into or
consummate any agreement, arrangement or understanding requiring it to abandon,
terminate or fail to consummate the transactions contemplated hereby. Without
limiting the foregoing, it is understood that any violation of the restrictions
set forth in the preceding sentence by any officer, director or employee of Home
Building Bancorp or any of the Subsidiaries or any investment banker, financial
advisor, attorney, accountant or other representative retained by Home Building
Bancorp or any of its Subsidiaries shall be deemed to be a breach of this
SECTION 5.1 by Home Building Bancorp. Notwithstanding the foregoing, Home
Building Bancorp may, in response to a Superior Proposal that has not been
withdrawn and that did not otherwise result from a breach of this SECTION 5.1,
(x) furnish non-public information with respect to Home Building Bancorp to the
person who made such Superior Proposal pursuant to a confidentiality agreement
on terms no more favorable to such person than the confidentiality agreement
between Home Building Bancorp and First Bancorp dated January 26, 2006 and (y)
participate in discussions or negotiations with such person regarding such
Superior Proposal, if and so long as Home Building Bancorp's Board of Directors
determines in good faith, after consultation with and based upon the advice of
its outside legal counsel, that failing to take such action would constitute a
breach of its fiduciary duties under applicable law.
(b) Home Building Bancorp will notify First Bancorp
immediately orally (within one day) and in writing (within three days) of
receipt of any Acquisition Proposal, any request for non-public information that
could reasonably be expected to lead to an Acquisition Proposal, or any inquiry
with respect to or that could reasonably be expected to lead to an Acquisition
Proposal, including, in each case, the identity of the person making such
Acquisition Proposal, request or inquiry and the terms and conditions thereof,
and shall provide to First Bancorp any written materials received by Home
Building Bancorp or any of its Subsidiaries in connection therewith. Home
Building Bancorp will keep First Bancorp informed of any developments with
respect to any such Acquisition Proposal, request or inquiry immediately upon
the occurrence thereof.
(c) Home Building Bancorp will immediately cease and cause to
be terminated any existing activities, discussions or negotiations with any
parties conducted prior to the date of this Agreement with respect to any of the
foregoing. Home Building Bancorp will take the necessary steps to inform the
appropriate individuals or entities referred to in the first sentence of SECTION
5.1(A) of the obligations undertaken in this SECTION 5.1. Home Building Bancorp
will promptly request each person (other than First Bancorp) that has executed a
confidentiality agreement in the 12 months prior to the date hereof in
connection with its consideration of a business combination with Home Building
Bancorp or any of its Subsidiaries to return or destroy all confidential
information previously furnished to such person by or on behalf of Home Building
Bancorp or any of its Subsidiaries. Home Building Bancorp shall not release any
third party from, or waive any provisions of, any confidentiality agreements or
standstill agreement to which it or any of its Subsidiaries is a party.
38
5.2 ADVICE OF CHANGES. Prior to the Closing, each party shall
promptly advise the other party orally and in writing to the extent that it has
knowledge of (i) any representation or warranty made by it contained in this
Agreement becoming untrue or inaccurate in any material respect or (ii) the
failure by it to comply in any material respect with or satisfy in any material
respect any covenant, condition or agreement to be complied with or satisfied by
it under this Agreement; PROVIDED, HOWEVER, that no such notification shall
affect the representations, warranties, covenants or agreements of the parties
or the conditions to the obligations of the parties under this Agreement.
5.3 ACCESS AND INFORMATION.
(a) Upon reasonable notice, Home Building Bancorp shall (and
shall cause Home Building Bancorp's Subsidiaries to) afford First Bancorp and
its representatives (including, without limitation, directors, officers and
employees of First Bancorp and its affiliates and counsel, accountants and other
professionals retained by First Bancorp) such reasonable access during normal
business hours throughout the period prior to the Effective Time to the books,
records (including, without limitation, tax returns and work papers of
independent auditors), contracts, properties, personnel and to such other
information relating to Home Building Bancorp and Home Building Bancorp's
Subsidiaries as First Bancorp may reasonably request; PROVIDED, HOWEVER, that no
investigation pursuant to this SECTION 5.3 shall affect or be deemed to modify
any representation or warranty made by Home Building Bancorp in this Agreement.
(b) From the date hereof until the Effective Time, Home
Building Bancorp shall, and shall cause Home Building Bancorp's Subsidiaries to,
promptly provide First Bancorp with (i) a copy of each report filed with federal
or state banking regulators, (ii) a copy of each periodic report to its senior
management and all materials relating to its business or operations furnished to
its Board of Directors, (iii) a copy of each press release made available to the
public and (iv) all other information concerning its business, properties and
personnel as First Bancorp may reasonably request. Notwithstanding the
foregoing, neither Home Building Bancorp nor its Subsidiaries shall be required
to provide access to or to disclose information where such access or disclosure
would violate the rights of such entity's customers, jeopardize the
attorney-client privilege of the entity in possession or control of such
information, or contravene any law, rule, regulation, order, judgment, decree or
binding agreement entered into prior to the date of this Agreement. The parties
hereto will make appropriate substitute disclosure arrangements under
circumstances in which the restrictions of the previous sentence apply.
(c) First Bancorp will not, and will cause its representatives
not to, use any information obtained pursuant to this SECTION 5.3 for any
purpose unrelated to the consummation of the transactions contemplated by this
Agreement. Subject to the requirements of applicable law, First Bancorp will
keep confidential, and will cause its representatives to keep confidential, all
information and documents obtained pursuant to this SECTION 5.3 unless such
information (i) was already known to First Bancorp or an affiliate of First
Bancorp, other than pursuant to a confidentiality agreement or other
confidential relationship, (ii) becomes available to First Bancorp or an
affiliate of First Bancorp from other sources not known by such party to be
39
bound by a confidentiality agreement or other obligation of secrecy, (iii) is
disclosed with the prior written approval of Home Building Bancorp or (iv) is or
becomes readily ascertainable from published information or trade sources.
(d) From and after the date hereof, representatives of First
Bancorp and Home Building Bancorp shall meet on a regular basis to discuss and
plan for the conversion of Home Building Bancorp's and its Subsidiaries' data
processing and related electronic informational systems to those used by First
Bancorp and its Subsidiaries with the goal of conducting such conversion
simultaneously with the consummation of the Bank Merger.
(e) Home Building Bancorp shall give notice, and shall cause
Home Building Savings to give notice, to a designee of First Bancorp, and shall
invite such person to attend all regular and special meetings of the Board of
Directors of Home Building Bancorp and Home Building Savings and all regular and
special meetings of any senior management committee (including but not limited
to the executive committee and the loan and discount committee of Home Building
Savings) of Home Building Bancorp or Home Building Savings. Such designees shall
have no right to vote and shall not attend sessions of board and committees
during which there is being discussed (i) matters involving this Agreement, (ii)
information or material that Home Building Bancorp or Home Building Savings is
required or obligated to maintain as confidential under applicable laws or
regulations or policies or procedures of Home Building Bancorp or Home Building
Savings, or (iii) pending or threatened litigation or investigations if, in the
opinion of counsel to Home Building Bancorp, the presence of such designees
would or might adversely affect the confidential nature of or any privilege
relating to the matters being discussed.
5.4 APPLICATIONS; CONSENTS.
(a) The parties hereto shall cooperate with each other and
shall use their reasonable best efforts to prepare and file as soon as
practicable after the date hereof all necessary applications, notices and
filings to obtain all permits, consents, approvals and authorizations of all
Governmental Entities that are necessary or advisable to consummate the
transactions contemplated by this Agreement. Home Building Bancorp and First
Bancorp shall furnish each other with all information concerning themselves,
their respective subsidiaries, and their and their respective subsidiaries'
directors, officers and shareholders and such other matters as may be reasonably
necessary or advisable in connection with any application, notice or filing made
by or on behalf of First Bancorp, Home Building Bancorp or any of their
respective subsidiaries to any Governmental Entity in connection with the
transactions contemplated by this Agreement and the Plan of Bank Merger. First
Bancorp and Home Building Bancorp shall have the right to review in advance, and
to the extent practicable each will consult with the other on, all the
information relating to First Bancorp and Home Building Bancorp, as the case may
be, and any of their respective subsidiaries, that appears in any filing made
with, or written materials submitted to, any Governmental Entity pursuant to
this SECTION 5.4(A).
(b) As soon as practicable after the date hereof, each of the
parties hereto shall, and they shall cause their respective subsidiaries to, use
40
its best efforts to obtain any consent, authorization or approval of any third
party that is required to be obtained in connection with the transactions
contemplated by this Agreement and the Plan of Bank Merger.
5.5 ANTITAKEOVER PROVISIONS. Home Building Bancorp and its
Subsidiaries shall take all steps required by any relevant federal or state law
or regulation or under any relevant agreement or other document to exempt or
continue to exempt First Bancorp, First Federal, the Agreement, the Plan of Bank
Merger and the Merger from any provisions of an antitakeover nature in Home
Building Bancorp's or its Subsidiaries' articles of incorporation and bylaws, or
similar organizational documents, and the provisions of any federal or state
antitakeover laws.
5.6 ADDITIONAL AGREEMENTS. Subject to the terms and conditions herein
provided, each of the parties hereto agrees to use all reasonable efforts to
take promptly, or cause to be taken promptly, all actions and to do promptly, or
cause to be done promptly, all things necessary, proper or advisable under
applicable laws and regulations to consummate and make effective the
transactions contemplated by this Agreement as expeditiously as possible,
including using efforts to obtain all necessary actions or non-actions,
extensions, waivers, consents and approvals from all applicable Governmental
Entities, effecting all necessary registrations, applications and filings
(including, without limitation, filings under any applicable state securities
laws) and obtaining any required contractual consents and regulatory approvals.
5.7 PUBLICITY. The initial press release announcing this Agreement
shall be a joint press release and thereafter Home Building Bancorp and First
Bancorp shall consult with each other prior to issuing any press releases or
otherwise making public statements (including any written communications to
shareholders) with respect to the Merger and any other transaction contemplated
hereby and in making any filings with any Governmental Entity; PROVIDED,
HOWEVER, that nothing in this SECTION 5.7 shall be deemed to prohibit any party
from making any disclosure which its counsel deems necessary in order to satisfy
such party's disclosure obligations imposed by law.
5.8 SHAREHOLDER MEETING. Home Building Bancorp will submit to its
shareholders this Agreement and any other matters required to be approved or
adopted by shareholders in order to carry out the intentions of this Agreement.
In furtherance of that obligation, Home Building Bancorp will take, in
accordance with applicable law and its articles of incorporation and bylaws, all
action necessary to call, give notice of, convene and hold a meeting of its
shareholders (the "SHAREHOLDER MEETING") as promptly as practicable for the
purpose of considering and voting on approval and adoption of this Agreement and
the transactions provided for in this Agreement. Home Building Bancorp's Board
of Directors will use all reasonable best efforts to obtain from Home Building
Bancorp's shareholders a vote approving this Agreement. Except as provided in
this Agreement, (i) Home Building Bancorp's Board of Directors shall recommend
to Home Building Bancorp's shareholders approval of this Agreement, (ii) the
Proxy Statement-Prospectus shall include a statement to the effect that Home
Building Bancorp's Board of Directors has recommended that Home Building
Bancorp's shareholders vote in favor of the approval of this Agreement and (iii)
neither Home Building Bancorp's Board of Directors nor any committee thereof
shall withdraw, amend or modify, or propose or resolve to withdraw, amend or
modify, the recommendation of Home Building Bancorp's Board of Directors that
Home Building Bancorp's shareholders vote in favor of approval of this Agreement
or make any statement in connection with the Shareholder Meeting inconsistent
41
with such recommendation (collectively, a "CHANGE IN RECOMMENDATION").
Notwithstanding the foregoing, if (x) Home Building Bancorp has complied in all
material respects with its obligations under SECTION 5.1, (y) Home Building
Bancorp (1) has received an unsolicited bona fide written Acquisition Proposal
from a third party that Home Building Bancorp's Board of Directors concludes in
good faith constitutes a Superior Proposal after giving effect to all of the
adjustments that may be offered by First Bancorp pursuant to clause (3) below,
(2) has notified First Bancorp, at least five business days in advance, of it is
intention to effect a Change in Recommendation, specifying the material terms
and conditions of any such Superior Proposal and furnishing to First Bancorp a
copy of the relevant proposed transaction documents, if such exist, with the
person making such Superior Proposal and (3) during the period of not less than
five business days following Home Building Bancorp's delivery of the notice
referred to in clause (2) above and prior to effecting such Change in
Recommendation, has negotiated, and has used reasonable best efforts to cause
its financial and legal advisors to negotiate, with First Bancorp in good faith
(to the extent that First Bancorp desires to negotiate) to make such adjustments
in the terms and conditions of this Agreement so that such Acquisition Proposal
ceases to constitute a Superior Proposal and (z) Home Building Bancorp's Board
of Directors, after consultation with and based on the advice of counsel,
determines in good faith that it would result in a violation of its fiduciary
duties under applicable law to recommend this Agreement, then in submitting the
Agreement to shareholders at the Shareholder Meeting it may submit the Agreement
without recommendation, or following submission of the Agreement to shareholders
it may withdraw, amend or modify its recommendation, in which case the Board of
Directors may communicate the basis for its lack of a recommendation, or the
withdrawal, amendment or modification of its recommendation, to the shareholders
in the Proxy Statement-Prospectus or an appropriate amendment or supplement
thereto to the extent required by law.
5.9 REGISTRATION OF FIRST BANCORP COMMON STOCK.
(a) As promptly as reasonably practicable following the date
hereof, First Bancorp shall prepare and file with the SEC a registration
statement on Form S-4 with respect to the issuance of First Bancorp Common Stock
in the Merger (such Form S-4, and any amendments or supplements thereto, the
"REGISTRATION Statement"). The Registration Statement shall contain proxy
materials relating to the matters to be submitted to the Home Building Bancorp
shareholders at the Shareholders Meeting, which shall also constitute the
prospectus relating to the shares of First Bancorp Common Stock to be issued in
the Merger (such proxy statement/prospectus, and any amendments or supplements
thereto, the "PROXY STATEMENT-PROSPECTUS"). Home Building Bancorp will furnish
to First Bancorp the information required to be included in the Registration
Statement with respect to its business and affairs and shall have the right to
review and consult with First Bancorp and approve the form of, and any
characterizations of such information included in, the Registration Statement
prior to its being filed with the SEC. First Bancorp shall use reasonable best
efforts to have the Registration Statement declared effective by the SEC and to
keep the Registration Statement effective as long as is necessary to consummate
the Merger and the transactions contemplated hereby. Home Building Bancorp will
use reasonable best efforts to cause the Proxy Statement-Prospectus to be mailed
to Home Building Bancorp's shareholders as promptly as practicable after the
Registration Statement is declared effective under the Securities Act. First
Bancorp will advise Home Building Bancorp, promptly after it receives notice
42
thereof, of the time when the Registration Statement has become effective, the
issuance of any stop order, the suspension of the qualification of the First
Bancorp Common Stock issuable in connection with the Merger for offering or sale
in any jurisdiction, or any request by the SEC for amendment of the Proxy
Statement-Prospectus or the Registration Statement. If at any time prior to the
Effective Time any information relating to First Bancorp or Home Building
Bancorp, or any of their respective affiliates, officers or directors, should be
discovered by First Bancorp or Home Building Bancorp which should be set forth
in an amendment or supplement to any of the Registration Statement or the Proxy
Statement-Prospectus so that any of such documents would not include any
misstatement of a material fact or omit to state any material fact necessary to
make the statements therein, in light of the circumstances under which they were
made, not misleading, the party which discovers such information shall promptly
notify the other party hereto and, to the extent required by law, rules or
regulations, an appropriate amendment or supplement describing such information
shall be promptly filed by First Bancorp with the SEC and disseminated by Home
Building Bancorp to the shareholders of Home Building Bancorp.
(b) First Bancorp shall also take any action required to be
taken under any applicable state securities laws in connection with the Merger
and each of Home Building Bancorp and First Bancorp shall furnish all
information concerning it and the holders of Home Building Bancorp Common Stock
as may be reasonably requested in connection with any such action.
(c) Prior to the Effective Time, First Bancorp shall notify
The Nasdaq Stock Market of the additional shares of First Bancorp Common Stock
to be issued by First Bancorp in exchange for the shares of Home Building
Bancorp Common Stock.
5.10 NOTIFICATION OF CERTAIN MATTERS. Each party shall give prompt
notice to the other of: (i) any event or notice of, or other communication
relating to, a default or event that, with notice or lapse of time or both,
would become a default, received by it or any of its Subsidiaries subsequent to
the date of this Agreement and prior to the Effective Time, under any contract
material to the financial condition, properties, businesses or results of
operations of each party and its Subsidiaries taken as a whole to which each
party or any Subsidiary is a party or is subject; and (ii) any event, condition,
change or occurrence which individually or in the aggregate has, or which, so
far as reasonably can be foreseen at the time of its occurrence, is reasonably
likely to result in a Material Adverse Effect. Each of Home Building Bancorp and
First Bancorp shall give prompt notice to the other party of any notice or other
communication from any third party alleging that the consent of such third party
is or may be required in connection with any of the transactions contemplated by
this Agreement.
5.11 EMPLOYEE BENEFIT MATTERS.
(a) First Bancorp intends to offer employment beginning as of
the Effective Time to all employees of Home Building Savings. All persons who
are employees of Home Building Savings immediately prior to the Effective Time
and whose employment is not specifically terminated at or prior to the Effective
Time (a "CONTINUING EMPLOYEE") shall, at the Effective Time, become employees of
First Federal; PROVIDED, HOWEVER, that in no event shall any of Home Building
43
Savings's employees be officers of First Federal, or have or exercise any power
or duty conferred upon such an officer, unless and until duly elected or
appointed to such position in accordance with the bylaws of First Federal.
Except for those persons who enter into an employment agreement with First
Federal, all of the Continuing Employees shall be employed at the will of First
Federal and no contractual right to employment shall inure to such employees
because of this Agreement.
(b) Each Continuing Employee shall be treated as a new
employee of First Bancorp for purposes of First Bancorp's 401(k) plan and
employee stock ownership plan; PROVIDED, HOWEVER, that with respect to such
plans Continuing Employees will receive credit for service with Home Building
Bancorp for purposes of vesting and determination of eligibility to participate,
but not for accrual of benefits. As of the Effective Time, First Bancorp shall
make available employer-provided health and other employee welfare benefit plans
to each Continuing Employee on the same basis as it provides such coverage to
First Bancorp employees except that any pre-existing condition, eligibility
waiting period or other limitations or exclusions otherwise applicable under
such plans to new employees shall not apply to a Continuing Employee or their
covered dependents who were covered under a similar Home Building Bancorp plan
at the Effective Time of the Merger.
(c) Home Building Bancorp shall withdraw from and terminate
its participation in the multiple-employer pension plan known as the "Financial
Institutions Retirement Fund" in which Home Building Bancorp has participated
and to which it has made contributions ("FIRF"), effective July 1, 2006, and
shall notify the Pension Benefit Guarantee Corporation and all other required
parties of such withdrawal in accordance with the requirements of Section 4041
of ERISA and the FIRF. Home Building Bancorp further agrees to take all other
actions requested by First Bancorp or required under ERISA or under the FIRF in
connection with such withdrawal, including, but not limited to, satisfying any
related liability as required under Section 4064 of ERISA. Home Building Bancorp
shall also take such action to terminate its 401(k) plan not later than
immediately prior to the Closing Date.
(d) Notwithstanding anything to the contrary contained herein,
Home Building Bancorp may pay cash bonuses to employees of Home Building Bancorp
and its Subsidiaries who are selected by the Board of Directors of Home Building
Bancorp with the prior approval of First Bancorp in order to help retain key
employees through the Effective Time, provided that the aggregate amount of such
bonuses shall not exceed $25,000.
(e) First Bancorp will offer employment contracts to ▇▇▇
▇▇▇▇▇, ▇▇▇ ▇. ▇▇▇▇▇▇ and ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ in substantially the form attached
hereto as Exhibit D.
---------
5.12 INDEMNIFICATION.
(a) From and after the Effective Time through the sixth
anniversary of the Effective Time, First Bancorp agrees to indemnify and hold
harmless each present and former director and officer of Home Building Bancorp
and its Subsidiaries and each officer or employee of Home Building Bancorp and
its Subsidiaries that is serving or has served as a director or officer of
another entity expressly at Home Building Bancorp's request or direction (each,
an "INDEMNIFIED PARTY"), against any costs or expenses (including reasonable
44
attorneys' fees), judgments, fines, amounts paid in settlement, losses, claims,
damages or liabilities incurred in connection with any claim, action, suit,
proceeding or investigation, whether civil, criminal, administrative or
investigative, arising out of matters existing or occurring at or prior to the
Effective Time (including the transactions contemplated by this Agreement),
whether asserted or claimed prior to, at or after the Effective Time, as they
are from time to time incurred, in each case to the fullest extent such person
would have been indemnified or have the right to advancement of expenses
pursuant to Home Building Bancorp's articles of incorporation and bylaws as in
effect on the date of this Agreement and to the fullest extent permitted by law.
(b) Any Indemnified Party wishing to claim indemnification
under SECTION 5.12(A), upon learning of any such claim, action, suit, proceeding
or investigation, shall promptly notify First Bancorp thereof, but the failure
to so notify shall not relieve First Bancorp of any liability it may have
hereunder to such Indemnified Party if such failure does not materially and
substantially prejudice First Bancorp.
(c) First Bancorp shall use its reasonable best efforts to
maintain Home Building Bancorp's existing directors' and officers' liability
insurance policy (or provide a policy providing comparable coverage and amounts
on terms no less favorable to the persons currently covered by Home Building
Bancorp's existing policy, including First Bancorp's existing policy if it meets
the foregoing standard) covering persons who are currently covered by such
insurance for a period of three years after the Effective Time; PROVIDED,
HOWEVER, that in no event shall First Bancorp be obligated to expend, in order
to maintain or provide insurance coverage pursuant to this SECTION 5.12(C), an
amount per annum in excess of 150% of the amount of the annual premiums paid by
Home Building Bancorp as of the date hereof for such insurance ("MAXIMUM
INSURANCE AMOUNT"); PROVIDED FURTHER, that if the amount of the annual premiums
necessary to maintain or procure such insurance coverage exceeds the Maximum
Insurance Amount, First Bancorp shall obtain the most advantageous coverage
obtainable for an annual premium equal to the Maximum Insurance Amount.
(d) In the event First Bancorp or any of its successors or
assigns (i) consolidates with or merges into any other person or entity and
shall not be the continuing or surviving corporation or entity of such
consolidation or merger or (ii) transfers or conveys all or substantially all of
its properties and assets to any person or entity, then, and in each such case,
to the extent necessary, proper provision shall be made so that the successors
and assigns of First Bancorp assume the obligations set forth in this SECTION
5.12.
(e) The provisions of this SECTION 5.12 are intended to be
for the benefit of, and shall be enforceable by, each Indemnified Party and his
or her representatives.
5.13 AFFILIATE LETTERS. Home Building Bancorp shall use its best
efforts to cause each director, executive officer and other person who is an
"affiliate" of Home Building Bancorp under Rule 145 of the Securities Act to
deliver to First Bancorp as soon as practicable and prior to the mailing of the
Proxy Statement-Prospectus executed letter agreements, each substantially in the
form attached hereto as Exhibit E, providing that such person will comply with
---------
Rule 145.
45
5.14 BOARD OF DIRECTORS; ADVISORY BOARD.
(a) First Bancorp shall take all action necessary to appoint
one member of Home Building Bancorp's Board of Directors, selected by First
Bancorp after consultation with Home Building Bancorp, to First Bancorp's and
First Federal's Boards of Directors, effective immediately following the
Effective Time.
(b) For a period of two years from the Effective Time or such
longer time as First Bancorp in its sole discretion shall determine, First
Bancorp shall maintain an advisory board for the purpose of advising First
Bancorp on its operations in area served by Home Building Savings' offices and
generating additional business contacts for First Bancorp in such area. Such
advisory board will meet no less frequently than monthly. Each director of Home
Building Bancorp as of the Effective Time shall be invited to serve on the
advisory board. Each advisory director, other than any advisory director who
also serves on the Board of Directors of First Bancorp, shall be paid $200 per
meeting attended.
5.15 OPERATIONS OF HOME BUILDING SAVINGS AFTER THE MERGER.
Immediately following the Bank Merger and for such period of time as First
Bancorp in its sole discretion shall determine, First Bancorp will operate the
former offices of Home Building Savings as branch offices of First Federal with
the name Home Building Savings Bank.
5.16 ENVIRONMENTAL REPORTS. Home Building Bancorp shall cooperate
with an environmental consulting firm designated by First Bancorp that is
reasonably acceptable to Home Building Bancorp (the "ENVIRONMENTAL CONSULTANT")
in connection with the conduct by the Environmental Consultant of a Phase I
and/or II Environmental Site Assessment or other environmental investigation on
all real property owned or leased by Home Building Bancorp or its Subsidiaries
as of the date of this Agreement (the "HOME BUILDING BANCORP PROPERTY"). If
First Bancorp reasonably determines that further investigatory procedures are
required as to any Home Building Bancorp Property on the basis of the review of
the report of the initial investigation with respect to such Home Building
Bancorp Property prepared by the Environmental Consultant, and should First
Bancorp order the Environmental Consultant to perform such further investigatory
procedures, Home Building Bancorp shall cooperate with such further
investigatory procedures. First Bancorp shall furnish true and complete copies
of any reports of the Environmental Consultant that it receives with respect to
any Home Building Bancorp Property. Home Building Bancorp shall not, and shall
cause its Subsidiaries not to, without the written consent of First Bancorp,
knowingly take any action or execute any instruments that would affect the
status of any of its properties under environmental laws or its rights or duties
under such laws.
ARTICLE VI
CONDITIONS TO CONSUMMATION
6.1 CONDITIONS TO EACH PARTY'S OBLIGATIONS. The respective
obligations of each party to effect the Merger shall be subject to the
satisfaction of the following conditions:
46
(a) SHAREHOLDER APPROVAL. This Agreement shall have been
approved by the requisite vote of Home Building Bancorp's shareholders in
accordance with applicable laws and regulations.
(b) REGULATORY APPROVALS. All approvals, consents or waivers
of any Governmental Entity required to permit consummation of the transactions
contemplated by this Agreement shall have been obtained and shall remain in full
force and effect, and all statutory waiting periods shall have expired;
PROVIDED, HOWEVER, that none of such approvals, consents or waivers shall
contain any condition or requirement that would so materially and adversely
impact the economic or business benefits to First Bancorp of the transactions
contemplated hereby that, had such condition or requirement been known, First
Bancorp would not, in its reasonable judgment, have entered into this Agreement.
(c) NO INJUNCTIONS OR RESTRAINTS; ILLEGALITY. No party hereto
shall be subject to any order, decree or injunction of a court or agency of
competent jurisdiction that enjoins or prohibits the consummation of the Merger
or the Bank Merger and no Governmental Entity shall have instituted any
proceeding for the purpose of enjoining or prohibiting the consummation of the
Merger or the Bank Merger or any transactions contemplated by this Agreement. No
statute, rule or regulation shall have been enacted, entered, promulgated or
enforced by any Governmental Entity which prohibits or makes illegal
consummation of the Merger.
(d) THIRD PARTY CONSENTS. First Bancorp and Home Building
Bancorp shall have obtained the consent or approval of each person (other than
the governmental approvals or consents referred to in SECTION 6.1(B)) whose
consent or approval shall be required to consummate the transactions
contemplated by this Agreement, except those for which failure to obtain such
consents and approvals would not, individually or in the aggregate, have a
Material Adverse Effect on First Bancorp (after giving effect to the
consummation of the transactions contemplated hereby).
(e) TAX OPINIONS. First Bancorp and Home Building Bancorp
shall have received opinions of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ & Aguggia LLP and ▇▇▇▇▇ ▇▇▇▇▇▇▇
LLP, respectively, dated as of the Closing Date, in form and substance customary
in transactions of the type contemplated hereby, and reasonably satisfactory to
Home Building Bancorp and First Bancorp, as the case may be, substantially to
the effect that on the basis of the facts, representations and assumptions set
forth in such opinions which are consistent with the state of facts existing at
the Effective Time, (i) the Merger will be treated for federal income tax
purposes as a reorganization within the meaning of Section 368(a) of the IRC and
(ii) First Bancorp and Home Building Bancorp will each be a party to that
reorganization within the meaning of Section 368(b) of the IRC. Such opinions
may be based on, in addition to the review of such matters of fact and law as
counsel considers appropriate, representations contained in certificates of
officers of First Bancorp, Home Building Bancorp and others.
(f) REGISTRATION STATEMENT; BLUE SKY LAWS. The Registration
Statement shall have been declared effective by the SEC and no proceedings shall
be pending or threatened by the SEC to suspend the effectiveness of the
47
Registration Statement, and First Bancorp shall have received all required
approvals by state securities or "blue sky" authorities with respect to the
transactions contemplated by this Agreement.
(g) NASDAQ LISTING. To the extent required, the shares of
First Bancorp Common Stock issuable pursuant to the Merger shall have been
approved for listing on the Nasdaq National Market, subject to official notice
of issuance.
6.2 CONDITIONS TO THE OBLIGATIONS OF FIRST BANCORP. The
obligations of First Bancorp to effect the Merger shall be further subject to
the satisfaction of the following additional conditions, any one or more of
which may be waived by First Bancorp:
(a) HOME BUILDING BANCORP'S REPRESENTATIONS AND WARRANTIES.
Each of the representations and warranties of Home Building Bancorp contained in
this Agreement and in any certificate or other writing delivered by Home
Building Bancorp pursuant hereto shall be true and correct in all material
respects at and as of the Closing Date as though made at and as of the Closing
Date, except that those representations and warranties that address matters only
as of a particular date need only be true and correct as of such date.
(b) PERFORMANCE OF HOME BUILDING BANCORP'S OBLIGATIONS. Home
Building Bancorp shall have performed in all material respects all obligations
required to be performed by it under this Agreement at or prior to the Effective
Time.
(c) OFFICERS' CERTIFICATE. First Bancorp shall have received a
certificate signed by the chief executive officer and the chief financial or
principal accounting officer of Home Building Bancorp to the effect that the
conditions set forth in SECTIONS 6.2(A) and (B) have been satisfied.
6.3 CONDITIONS TO THE OBLIGATIONS OF HOME BUILDING BANCORP. The
obligations of Home Building Bancorp to effect the Merger shall be further
subject to the satisfaction of the following additional conditions, any one or
more of which may be waived by Home Building Bancorp:
(a) FIRST BANCORP'S REPRESENTATIONS AND WARRANTIES. Each of
the representations and warranties of First Bancorp contained in this Agreement
and in any certificate or other writing delivered by First Bancorp pursuant
hereto shall be true and correct in all material respects at and as of the
Closing Date as though made at and as of the Closing Date, except that those
representations and warranties that address matters only as of a particular date
need only be true and correct as of such date.
(b) PERFORMANCE OF FIRST BANCORP'S OBLIGATIONS. First Bancorp
shall have performed in all material respects all obligations required to be
performed by it under this Agreement at or prior to the Effective Time.
(c) OFFICERS' CERTIFICATE. Home Building Bancorp shall have
received a certificate signed by the chief executive officer and the chief
financial or principal accounting officer of First Bancorp to the effect that
the conditions set forth in SECTIONS 6.3(A) and (B) have been satisfied.
48
ARTICLE VII
TERMINATION
7.1 TERMINATION. This Agreement may be terminated, and the Merger
abandoned, at any time prior to the Effective Time, by action taken or
authorized by the Board of Directors of the terminating party, either before or
after any requisite shareholder approval:
(a) by the mutual written consent of First Bancorp and Home
Building Bancorp; or
(b) by either First Bancorp or Home Building Bancorp, in the
event of the failure of Home Building Bancorp's shareholders to approve the
Agreement at the Shareholder Meeting; PROVIDED, HOWEVER, that Home Building
Bancorp shall only be entitled to terminate the Agreement pursuant to this
clause if it has complied in all material respects with its obligations under
SECTION 5.8; or
(c) by either First Bancorp or Home Building Bancorp, if
either (i) any approval, consent or waiver of a Governmental Entity required to
permit consummation of the transactions contemplated by this Agreement shall
have been denied or (ii) any Governmental Entity of competent jurisdiction shall
have issued a final, unappealable order enjoining or otherwise prohibiting
consummation of the transactions contemplated by this Agreement; or
(d) by either First Bancorp or Home Building Bancorp, in the
event that the Merger is not consummated by December 31, 2006, unless the
failure to so consummate by such time is due to the failure of the party seeking
to terminate this Agreement to perform or observe the covenants and agreements
of such party set forth herein; or
(e) by either First Bancorp or Home Building Bancorp (provided
that the party seeking termination is not then in material breach of any
representation, warranty, covenant or other agreement contained herein), in the
event of a breach of any covenant or agreement on the part of the other party
set forth in this Agreement, or if any representation or warranty of the other
party shall have become untrue, in either case such that the conditions set
forth in SECTIONS 6.2(A) and (B) or SECTIONS 6.3(A) and (B), as the case may be,
would not be satisfied and such breach or untrue representation or warranty has
not been or cannot be cured within thirty (30) days following written notice to
the party committing such breach or making such untrue representations or
warranty; or
(f) by First Bancorp, (i) if Home Building Bancorp shall have
materially breached its obligations under SECTION 5.1 or SECTION 5.8 or (ii) if
the Home Building Bancorp's Board of Directors does not publicly recommend in
the Proxy Statement-Prospectus that shareholders approve and adopt this
Agreement or if, after recommending in the Proxy Statement-Prospectus that
shareholders approve and adopt this Agreement, the Board of Directors of Home
49
Building Bancorp withdraws, qualifies or revises such recommendation or takes
any action in any respect materially adverse to First Bancorp; or
(g) by Home Building Bancorp, at any time during the
five-day period commencing with the last day of the Measurement Period, if both
of the following conditions are satisfied:
(i) The First Bancorp Price shall be less than
$16.80; and
(ii) The number obtained by dividing the First
Bancorp Price by $21.00 (the "FIRST BANCORP RATIO") shall be
less than the number obtained by dividing (x) the average
closing index value of the America's Community Bankers NASDAQ
Index during the Measurement Period by (y) the closing index
value of the America's Community Bankers NASDAQ Index on the
date of the first public announcement of entry into this
Agreement and subtracting 0.20 from such quotient (such number
being referred to herein as the "INDEX RATIO");
subject, however, to the following four sentences. If Home Building Bancorp
elects to exercise its termination right pursuant to this Section, it shall give
written notice to First Bancorp (provided that such notice of election to
terminate may be withdrawn at any time within the aforementioned five-day
period). During the five-day period commencing with its receipt of such notice,
First Bancorp shall have the option to increase the consideration to be received
by the holders of Home Building Bancorp Common Stock hereunder, by adjusting the
Exchange Ratio (calculated to the nearest ten-thousandth) to equal the lesser of
(x) a number (rounded to the nearest ten-thousandth) obtained by dividing (A)
the product of $16.80 and the Exchange Ratio (as then in effect) by (B) the
First Bancorp Price and (y) a number (rounded to the nearest ten-thousandth)
obtained by dividing (A) the product of the Index Ratio and the Exchange Ratio
(as then in effect) by (B) the First Bancorp Ratio. If First Bancorp so elects
within such five-day period, it shall give prompt written notice to Home
Building Bancorp of such election and the revised Exchange Ratio, whereupon no
termination shall have occurred pursuant to this Section and this Agreement
shall remain in effect in accordance with its terms (except as the Exchange
Ratio shall have been so modified). If, as result of the revision of the
Exchange Ratio, First Bancorp would be required to issue more than 310,000
shares of First Bancorp Common Stock, First Bancorp may decrease the number of
shares of Home Building Bancorp Common Stock that will be converted into the
Stock Consideration and increase the number of shares of Home Building Bancorp
Common Stock that will be converted into the Cash Consideration so that the
aggregate number of shares of First Bancorp Common Stock that will be issued in
connection with the Merger does not exceed 310,000; or
(h) by First Bancorp, if, on the basis of one or more Phase II
Environmental Site Assessment Reports of the Environmental Consultant, First
Bancorp reasonably determines that (A) the aggregate costs of taking all
50
remedial and corrective actions and measures (1) required by applicable law, or
(2) recommended by such report(s), in the aggregate (including the aggregate
costs of the taking of further investigative procedures and the obtaining of the
Phase II Environmental Site Assessment Report(s)), would exceed the sum of
$150,000, or (B) that the sum of such costs identified in clause (A) cannot be
reasonably estimated with any degree of certainty but could reasonably be
expected to exceed the sum of $150,000 in the aggregate; provided, however, that
First Bancorp may not exercise this termination right after June 30, 2006.
7.2 TERMINATION FEE.
(a) Home Building Bancorp shall pay to First Bancorp a fee of
$500,000 (the "FEE") if this Agreement is terminated as follows:
(i) if this Agreement is terminated by First Bancorp
pursuant to SECTION 7.1(F), then Home Building Bancorp shall
pay the Fee on the second business day following such
termination; and
(ii) if this Agreement is terminated by (A) either
party pursuant to SECTION 7.1(B) or (B) by First Bancorp
pursuant to SECTION 7.1(E) because of Home Building Bancorp's
willful breach of any representation, warranty, covenant or
agreement under this Agreement, and in any such case an
Acquisition Proposal with respect to Home Building Bancorp
shall have been publicly announced or otherwise communicated
or made known to Home Building Bancorp's Board of Directors
(or any person shall have publicly announced, communicated or
made known an intention to make an Acquisition Proposal) at
any time after the date of this Agreement and on or prior to
the date of the Shareholders Meeting, in the case of clause
(A), or the date of termination, in the case of clause (B),
then Home Building Bancorp shall pay (x) one third of the Fee
to First Bancorp on the second business day following such
termination and (y) if within 12 months after such termination
Home Building Bancorp enters into a definitive agreement with
respect to, or consummates, an Acquisition Proposal, then Home
Building Bancorp shall pay the remainder of the Fee on the
date of such execution or consummation.
(b) Any amount that becomes payable pursuant to SECTION 7.2(A)
shall be paid by wire transfer of immediately available funds to an account
designated by First Bancorp in writing to Home Building Bancorp.
(c) Home Building Bancorp acknowledges that the agreement
contained in SECTION 7.2(A) is an integral part of the transactions contemplated
by this Agreement, that without such agreement by Home Building Bancorp, First
Bancorp would not have entered into this Agreement and that such amounts do not
constitute a penalty. If Home Building Bancorp fails to pay the amounts due
under SECTION 7.2(A) with the time periods specified, Home Building Bancorp
shall pay the costs and expenses (including reasonable legal fees and expenses)
incurred by First Bancorp in connection with any action, including the filing of
any lawsuit, taken to collect payment of such amounts, together with interest on
the amount of any such unpaid amounts at the prime lending rate prevailing
during such period as published in The Wall Street Journal, calculated on a
daily basis from the date such amounts were required to be paid until the date
of actual payment.
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(d) Notwithstanding anything to the contrary contained herein,
Home Building Bancorp shall be obligated, subject to the terms of this SECTION
7.2, to pay only one Fee.
7.3 EFFECT OF TERMINATION. In the event of termination of this
Agreement by either First Bancorp or Home Building Bancorp as provided in
SECTION 7.1, this Agreement shall forthwith become void and, subject to SECTION
7.2, have no effect, and there shall be no liability on the part of any party
hereto or their respective officers and directors, except that (i) SECTIONS
5.3(C), 7.2 and 8.6, shall survive any termination of this Agreement, and (ii)
notwithstanding anything to the contrary contained in this Agreement, no party
shall be relieved or released from any liabilities or damages arising out of its
willful breach of any provision of this Agreement.
ARTICLE VIII
CERTAIN OTHER MATTERS
8.1 INTERPRETATION. When a reference is made in this Agreement to
Sections or Exhibits such reference shall be to a Section of, or Exhibit to,
this Agreement unless otherwise indicated. The table of contents and headings
contained in this Agreement are for ease of reference only and shall not affect
the meaning or interpretation of this Agreement. Whenever the words "include,"
"includes" or "including" are used in this Agreement, they shall be deemed
followed by the words "without limitation." Any singular term in this Agreement
shall be deemed to include the plural, and any plural term the singular. Any
reference to gender in this Agreement shall be deemed to include any other
gender.
8.2 SURVIVAL. Only those agreements and covenants of the parties
that are by their terms applicable in whole or in part after the Effective Time,
including SECTION 5.12 of this Agreement, shall survive the Effective Time. All
other representations, warranties, agreements and covenants shall be deemed to
be conditions of the Agreement and shall not survive the Effective Time.
8.3 WAIVER; AMENDMENT. Prior to the Effective Time, any provision
of this Agreement may be: (i) waived in writing by the party benefited by the
provision or (ii) amended or modified at any time (including the structure of
the transaction) by an agreement in writing between the parties hereto except
that, after the vote by the shareholders of Home Building Bancorp, no amendment
or modification may be made that would reduce the amount or alter or change the
kind of consideration to be received by holders of Home Building Bancorp Common
Stock or that would contravene any provision of the IBCL, or the federal banking
laws, rules and regulations.
8.4 COUNTERPARTS. This Agreement may be executed in counterparts
each of which shall be deemed to constitute an original, but all of which
together shall constitute one and the same instrument.
8.5 GOVERNING LAW. This Agreement shall be governed by, and
interpreted in accordance with, the laws of the State of Indiana, without regard
to conflicts of laws principles (except to the extent that mandatory provisions
of federal law are applicable).
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8.6 EXPENSES. Each party hereto will bear all expenses incurred
by it in connection with this Agreement and the transactions contemplated
hereby.
8.7 NOTICES. All notices, requests, acknowledgments and other
communications hereunder to a party shall be in writing and shall be deemed to
have been duly given when delivered by hand, overnight courier or facsimile
transmission to such party at its address or facsimile number set forth below or
such other address or facsimile transmission as such party may specify by notice
(in accordance with this provision) to the other party hereto.
If to First Bancorp, to:
▇▇▇▇▇▇▇ ▇. Head
President and Chief Executive Officer
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
With copies to:
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ & Aguggia LLP
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
If to Home Building Bancorp, to:
▇▇▇▇ ▇. ▇▇▇▇▇▇
President and Chief Executive Officer
▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
With copies to:
▇▇▇▇▇ ▇▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
8.8 ENTIRE AGREEMENT; ETC. This Agreement, together with the
Exhibits and the Disclosure Letters, represents the entire understanding of the
parties hereto with reference to the transactions contemplated hereby and
supersedes any and all other oral or written agreements heretofore made. All
terms and provisions of this Agreement shall be binding upon and shall inure to
the benefit of the parties hereto and their respective successors and assigns.
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Except for SECTION 5.12, which confers rights on the parties described therein,
nothing in this Agreement is intended to confer upon any other person any rights
or remedies of any nature whatsoever under or by reason of this Agreement.
8.9 SUCCESSORS AND ASSIGNS; ASSIGNMENT. This Agreement shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors and assigns; PROVIDED, HOWEVER, that this Agreement may not be
assigned by either party hereto without the written consent of the other party.
8.10 SPECIFIC PERFORMANCE. Each of the parties hereto acknowledges
that the other party would be irreparably damaged and would not have an adequate
remedy at law for money damages in the event that any of the provisions of this
Agreement were not performed in accordance with their specific terms or were
otherwise breached. Each of the parties hereto therefore agrees that, without
the necessity of proving actual damages or posting bond or other security, the
other party shall be entitled to temporary or permanent injunction or
injunctions to prevent breaches of such performance and to enforce specifically
the terms and provisions of this Agreement in addition to any other remedy to
which they may be entitled, at law or in equity.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their duly authorized officers as of the date first
above written.
FIRST BANCORP OF INDIANA, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. Head
--------------------------------------
▇▇▇▇▇▇▇ ▇. Head
President and Chief Executive Officer
HOME BUILDING BANCORP, INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇
President and Chief Executive Officer
55
EXHIBIT A
April 25, 2006
Board of Directors
First Bancorp of Indiana, Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
To the Board of Directors:
The undersigned is a director of Home Building Bancorp, Inc. ("Home
Building Bancorp") and the beneficial holder of shares of common stock of Home
Building Bancorp (the "Home Building Bancorp Common Stock").
First Bancorp of Indiana, Inc. ("First Bancorp") and Home Building
Bancorp are considering the execution of an Agreement and Plan of Merger (the
"Agreement") pursuant to which First Bancorp will acquire Home Building Bancorp
(the "Merger"). The execution of the Agreement by First Bancorp is subject to
the execution and delivery of this letter agreement.
The undersigned, in order to induce First Bancorp to execute and
deliver to Home Building Bancorp the Agreement, agrees and undertakes, solely in
his or her capacity as a stockholder of Home Building Bancorp, and not in his or
her capacity as a director or officer of Home Building Bancorp, as follows:
1. While this letter agreement is in effect the undersigned shall
not, directly or indirectly, (a) sell or otherwise dispose of or encumber prior
to the record date of Home Building Bancorp's Shareholders Meeting, as defined
in the Agreement, any or all of his or her shares of Home Building Bancorp
Common Stock, or (b) deposit any shares of Home Building Bancorp Common Stock
into a voting trust or enter into a voting agreement or arrangement with respect
to any shares of Home Building Bancorp Common Stock or grant any proxy with
respect thereto, other than to other members of the Board of Directors of Home
Building Bancorp for the purpose of voting to approve the Agreement and the
Merger and matters related thereto.
2. While this letter agreement is in effect the undersigned shall
vote or cause to be voted all of the shares of Home Building Bancorp Common
Stock that the undersigned shall be entitled to so vote, whether such shares are
beneficially owned by the undersigned on the date of this letter agreement or
are subsequently acquired, and whether pursuant to the exercise of stock options
or otherwise, for the approval of the Agreement and the Merger at Home Building
Bancorp's Shareholders Meeting.
First Bancorp of Indiana, Inc.
April 25, 2006
Page 2
3. The undersigned acknowledges and agrees that any remedy at law for
breach of the foregoing provisions shall be inadequate and that, in addition to
any other relief which may be available, First Bancorp shall be entitled to
temporary and permanent injunctive relief without having to prove actual
damages.
4. The foregoing restrictions shall not apply to shares with respect
to which the undersigned may have voting power as a fiduciary for others. In
addition, this letter agreement shall only apply to actions taken by the
undersigned in his or her capacity as a stockholder of Home Building Bancorp
and, if applicable, shall not in any way limit or affect actions the undersigned
may take in his or her capacity as a director or officer of Home Building
Bancorp.
5. This letter agreement shall automatically terminate upon the
earlier of (i) the favorable vote of Home Building Bancorp's stockholders with
respect to the approval of the Agreement and the Merger, (ii) the termination of
the Agreement in accordance with its terms, or (iii) the Effective Time, as that
term is defined in the Agreement, of the Merger.
6. As of the date hereof, the undersigned has voting power with
respect to _____________ shares of Home Building Bancorp Common Stock.
IN WITNESS WHEREOF, the undersigned has executed this agreement as of
the date first above written.
Very truly yours,
-----------------------------------
-----------------------------------
Print Name
Accepted and agreed to as of
the date first above written:
First Bancorp of Indiana, Inc.
----------------------------------------
▇▇▇▇▇▇▇ ▇. Head
President and Chief Executive Officer
EXHIBIT B
PLAN OF MERGER
The following constitutes a Plan of Merger within the meaning of the
Indiana Business Corporation Law (Indiana Code 23-1-40-1) ("IBCL"):
1. The names of each corporation planning to merge (the "MERGER")
are:
First Bancorp of Indiana, Inc., an Indiana corporation (the "SURVIVING
CORPORATION"); and
Home Building Bancorp, Inc., an Indiana corporation (the "MERGING
CORPORATION").
2. The corporation surviving the Merger is First Bancorp of Indiana,
Inc., the name of which is not changed pursuant to this Plan of Merger.
3. At the time of filing with the Indiana Secretary of State of
appropriate Articles of Merger with respect to the Merger or at such later time
as shall be specified by such Articles of Merger (the "EFFECTIVE Time"), each of
the shares of common stock, par value $0.01 per share, of the Merging
Corporation ("MERGING CORPORATION STOCK") that shall then be issued and
outstanding (other than shares that are held by any holder of Merging
Corporation Stock who has timely given notice of such holder's intent to
exercise dissenters' rights under the IBCL with respect to such shares in strict
compliance with the IBCL, hereafter referred to as "DISSENTING SHARES") shall be
converted into, at the election of the holder as provided in and subject to the
limitations set forth in the Agreement and Plan of Merger between the Surviving
Corporation and the Merging Corporation dated April 25, 2006, the right to
receive either (i) $43.50 in cash, without interest, or (ii) [_______] [HERE
INSERT THE EXCHANGE RATIO PURSUANT TO SECTION 2.05(A) OF THE AGREEMENT AND PLAN
OF MERGER] shares of common stock, par value $0.01, of the Surviving Corporation
("SURVIVING CORPORATION STOCK"). Holders of Dissenting Shares shall be entitled
to the rights provided by the IBCL.
4. The shares of Surviving Corporation Stock issued and outstanding
immediately prior to the Effective Time shall continue to be issued and
outstanding shares of Surviving Corporation Stock.
5. The Articles of Incorporation and the Bylaws of the Surviving
Corporation (each as amended immediately prior to the effective time of the
merger) shall not change as a result of the Merger.
6. No fractional shares of the Surviving Corporation Stock shall be
issued in the Merger and, in lieu thereof, holders of shares of Merging
Corporation Stock who would otherwise be entitled to a fraction of a share of
Surviving Corporation Stock shall be paid an amount in cash equal to the product
of multiplying such fractional share by $_________. [HERE INSERT THE AMOUNT
REQUIRED BY SECTION 2.05(B) OF THE AGREEMENT AND PLAN OF MERGER.]
