Agreement and Plan of Merger
By and Among
Fidelity Bankshares, Inc.
Fidelity Federal Savings Bank of Florida
and
BankBoynton, a Federal Savings Bank
Dated: August 18, 1997
TABLE OF CONTENTS
Page No.
ARTICLE I 2
THE MERGER 2
1.1. The Merger 2
1.2. Effective Time of the Merger 2
1.3. Closing 2
1.4. Modification of Structure 2
ARTICLE II. 3
EFFECT OF THE MERGER; CERTAIN ACTIONS IN CONNECTION
THEREWITH 3
2.1. Effect of the Merger 3
2.2. Effect on Common Stock of BankBoynton and
Bankshares 3
2.3. Options 4
2.4. Fidelity to Make Cash Available 4
2.5. Payment of Cash 4
ARTICLE III. 5
REPRESENTATIONS AND WARRANTIES OF BANKSHARES
AND FIDELITY 5
3.1. Corporate Organization 5
3.2. Authorization 6
3.3. No Violation 6
3.4. Consents and Approvals 6
3.5. Information Supplied for Inclusion in the
BankBoynton Proxy Statement 6
3.6. Cash Payment 7
3.7. Accuracy of Information 7
3.8. Supplement to Bankshares Disclosure Schedule 7
3.9. Litigation 7
3.10.Regulatory Approvals 7
ARTICLE IV. 8
REPRESENTATIONS AND WARRANTIES OF BANKBOYNTON 8
4.1. Corporate Organization 8
4.2. Capitalization 8
4.3. Authorization 9
4.4. No Violation 9
4.5. Reports and Consolidated Financial
Statements 10
4.6. Consents and Approvals 10
4.7. Absence of Certain Changes 10
4.8. Employee and Employee Benefits Matters 11
4.9. Litigation 13
▇.▇▇.▇▇▇ Matters 13
4.11.Information in the BankBoynton Proxy
Statement 14
4.12.Environmental Matters 14
▇.▇▇.▇▇▇▇▇▇▇▇▇ 16
4.14.Compliance with Laws and Orders 16
4.15.Governmental Regulation 17
4.16.Contracts and Commitments 17
4.17.Agreements with Directors, Officers and
Shareholders. 17
4.18.Accuracy of Information 18
4.19.Supplement to BankBoynton Disclosure
Schedule 18
4.20.Title to Assets; Leases 18
4.21.Fees 19
▇.▇▇.▇▇▇▇▇▇▇▇ of BankBoynton 19
ARTICLE V. 19
COVENANTS OF BANKSHARES 19
5.1. Affirmative Covenants 19
5.2. Negative Covenants 19
5.3. Breaches 20
5.4. Employee Benefit Plans: Employment
Arrangements 20
5.5. Filing of Applications 20
5.6. Expenses 20
5.7. Supplement to Bankshares Disclosure Schedule 21
5.8. Non-Assignability 21
ARTICLE VI. 21
COVENANTS OF BANKBOYNTON 21
6.1. Affirmative Covenants 21
6.2. Negative Covenants 22
6.3. Report to Bankshares 24
6.4. Breaches 25
6.5. Supplement to Disclosure Schedule 25
6.6. Expenses 25
6.7. Consents and Approvals 25
ARTICLE VII. 25
ADDITIONAL AGREEMENTS 25
7.1. BankBoynton Shareholders' Meeting 25
7.2. Proxy Statement for BankBoynton
Shareholders' Meeting 25
7.3. Cooperation: Regulatory Approvals 26
7.4. Reports 26
7.5. Additional Agreements: Reasonable Efforts 26
7.6. Release of Information 27
7.7. Access to Properties and Records;
Confidentiality 27
7.8. Certain Policies 28
ARTICLE VIII. 28
CONDITIONS TO THE OBLIGATIONS OF BANKSHARES 28
8.1. No Material Adverse Effect 28
8.2. Representations and Warranties 29
8.3. Performance and Compliance 29
8.4. No Proceeding or Litigation 29
8.5. Consents Under Agreements 29
8.6. No Amendments to Resolutions 29
8.7. Certificate of BankBoynton Officers 29
8.8. Corporate Proceedings 30
8.9.(a)Legal Opinion 30
ARTICLE IX. 31
CONDITIONS TO THE OBLIGATIONS OF BANKBOYNTON 31
9.1. Representations and Warranties 31
9.2. Performance and Compliance 31
9.3. Corporate Proceedings 31
9.4. Certificate of Bankshares Officers 32
9.5.(a)Legal Opinion 32
9.6. Opinion of Financial Advisor 33
ARTICLE X 33
CONDITIONS TO THE OBLIGATIONS OF ALL PARTIES 33
10.1.Governmental Approvals 33
▇▇.▇.▇▇ Injunctions or Restraints 33
10.3.BankBoynton Shareholder Approval 34
10.4 Corporate Proceedings 34
ARTICLE XI. 34
TERMINATION 34
11.1.Reasons for Termination 34
11.2 Special Termination Rights Pending
Completion of Fidelity Investigation 35
11.3.Effect of Termination 36
ARTICLE XII. 36
MISCELLANEOUS 36
12.1.Nonsurvival of Representations, Warranties
and Agreements 36
12.2.Expenses 36
12.3.Waivers: Amendments 37
12.4.Assignment: Parties in Interes 37
12.5.Entire Agreement 37
12.6.Captions and Counterparts 37
12.7.Certain Definitions 37
12.8.Enforcement of the Agreement 38
12.9.Governing Law 38
12.10.Notices 38
SCHEDULES
Schedule 3.1
Schedule 3.9
Schedule 4.1(a)
Schedule 4.2
Schedule 4.4
Schedule 4.5
Schedule 4.6
Schedule 4.7
Schedule 4.8(a)
Schedule 4.8(b)
Schedule 4.9
Schedule 4.10
Schedule 4.12(a)
Schedule 4.12(b)
Schedule 4.12(c)
Schedule 4.12(d)
Schedule 4.12(e)
Schedule 4.12(f)
Schedule 4.13
Schedule 4.14
Schedule 4.15
Schedule 4.16
Schedule 4.17
Schedule 4.20(b)
EXHIBITS
Exhibit 1 Form of Agreement with ▇▇▇▇ ▇▇▇▇▇
Exhibit 2 Bank Merger Agreement
AGREEMENT AND PLAN OF MERGER
This Agreement and Plan of Merger, dated as of August 18,
1997 (the "Agreement"), is entered into by and among Fidelity
Bankshares MHC ("MHC"), Fidelity Bankshares, Inc. ("Bankshares"),
Fidelity Federal Savings Bank of Florida ("Fidelity"), and
BankBoynton, a Federal Savings Bank ("BankBoynton"). References
to Bankshares shall include Fidelity and any subsidiaries of
Fidelity unless the context indicates otherwise.
W I T N E S S E T H:
WHEREAS, Fidelity is a federally-chartered stock
savings bank headquartered in West Palm Beach, Florida, 100% of
the issued and outstanding capital stock of which is owned by
Bankshares, a Delaware corporation in stock form; and
WHEREAS, BankBoynton is a federally-chartered stock
savings bank headquartered in Boynton Beach, Florida; and
WHEREAS, the parties desire to provide for Bankshares'
acquisition of BankBoynton pursuant to a merger (the "Merger") of
Fidelity and BankBoynton (as described in Section 1.1 hereof) on
or after the Effective Time (as defined in Section 1.2 hereof);
and
WHEREAS, in connection with the Merger the outstanding
capital stock of BankBoynton will be converted into the right to
receive cash; and
WHEREAS, it is intended that Fidelity and BankBoynton
will be merged such that Fidelity will be the surviving
corporation and that the resulting savings institution will
expand its market area and achieve certain economies of scale and
efficiencies as a result of the Merger; and
WHEREAS, as an inducement to and condition of the
willingness of Bankshares and Fidelity to enter into the
agreement, ▇▇▇▇ ▇▇▇▇▇ has entered into an agreement with
Bankshares and Fidelity substantially in the form of Exhibit 1 to
this Agreement; and
NOW, THEREFORE, in consideration of the premises and
the mutual covenants, representations, warranties, and agreements
herein contained, and in order to set forth the conditions upon
which the foregoing Merger will be carried out, the parties,
intending to be legally bound, hereby agree as follows:
ARTICLE I.
THE MERGER
1.1. The Merger. Subject to the terms and conditions of
this Agreement, and in accordance with the provisions of Section
18(c) of the Federal Deposit Insurance Act (12 U.S.C. 1828(c)),
as amended (the "Bank Merger Act"), the Home Owners' Loan Act
(the "HOLA"), and the rules and regulations promulgated
thereunder including 12 C.F.R. 563.22 and 574.3(a) (the "Thrift
Regulations") at the Effective Time, BankBoynton shall be merged
with and into Fidelity pursuant to the terms and conditions set
forth herein and in the Bank Merger Agreement substantially in
the form attached hereto as Exhibit 2. Upon the consummation of
the Merger, the separate existence of BankBoynton shall cease,
and Fidelity, which is wholly owned by Bankshares, shall continue
as the surviving institution in the Merger. Bankshares shall
remain a unitary holding company as defined under the HOLA and
regulations promulgated thereunder.
1.2. Effective Time of the Merger. As soon as practicable
after each of the conditions set forth in Articles VIII, IX and X
hereof have been satisfied or waived, Fidelity and BankBoynton
will file, or cause to be filed, articles of combination with the
Office of Thrift Supervision (the "OTS"), which articles of
combination shall be in the form required by and executed in
accordance with the Thrift Regulations. The Merger shall become
effective at the time the articles of combination for such merger
are endorsed by the OTS pursuant to Section 552.13(k) of the
Thrift Regulations (the "Effective Time").
1.3. Closing. If (a) the Agreement and the transactions
contemplated hereby have been duly approved as required by the
shareholders of BankBoynton, and (b) all relevant conditions of
the Agreement have been satisfied or waived and all applicable
waiting periods have expired, the closing (the "Closing") shall
take place within thirty (30) business days thereafter, on such
date as Fidelity shall designate to BankBoynton at least five (5)
business days prior to the designated closing date, at the
executive offices of Fidelity or at such other location mutually
acceptable to Fidelity and BankBoynton. At the Closing, the
parties hereto will exchange certificates, letters and other
documents as required hereby and will cause the filing described
in Section 1.2 hereof with respect to the Merger to be made. The
date on which the Closing occurs is hereinafter referred to as
the "Closing Date."
1.4. Modification of Structure. Notwithstanding any
provision of this Agreement to the contrary, Bankshares may
elect, subject to the filing of all necessary applications and
the receipt of all required regulatory approvals, to modify the
structure of the transactions contemplated hereby so long as (i)
there are no material adverse federal income tax consequences to
the stockholders of BankBoynton as a result of such modification,
(ii) the consideration to be paid to holders of BankBoynton
Common Stock under this Agreement is not thereby changed in kind
or reduced in amount solely because of such modification and
(iii) such modification will not be likely to materially delay or
jeopardize receipt of any required regulatory approvals.
ARTICLE II.
EFFECT OF THE MERGER; CERTAIN ACTIONS IN CONNECTION THEREWITH
2.1. Effect of the Merger.
(a) As the surviving institution in the Merger, Fidelity
shall possess all of the properties and rights and be subject to
all of the liabilities and obligations of BankBoynton, all as
more fully described in the Merger Agreement and the Thrift
Regulations. The name of Fidelity, as the surviving institution
in the Merger, shall remain "Fidelity Federal Savings Bank of
Florida."
(b) At the Effective Time, each share of common stock, par
value $3.75 per share, of BankBoynton ("BankBoynton Common
Stock") issued and outstanding immediately prior thereto (except
shares as to which the holders have perfected dissenters' rights
in accordance with 12 C.F.R. 552.14) shall be canceled. No new
shares of the capital stock or other securities or obligations of
Bankshares shall be issued or be deemed issued with respect to or
in exchange for such canceled shares, and such canceled shares
shall not be converted into any shares or other securities or
obligations of Bankshares.
(c) The Certificate of Incorporation and bylaws of
Bankshares, as in effect immediately prior to the Effective Time,
shall be the Certificate of Incorporation and bylaws of
Bankshares following the Merger.
(d) The charter and bylaws of Fidelity, as in effect
immediately prior to the Effective Time, shall be the charter and
bylaws of Fidelity, as the surviving institution of the Merger.
(e) The directors and officers of Fidelity immediately
prior to the Effective Time shall be the directors and officers
of Fidelity, as the surviving institution of the Merger, and
shall continue in office until their successors are duly elected
or otherwise duly selected.
(f) All deposit accounts of BankBoynton existing
immediately prior to the Merger shall, upon consummation of the
Merger, remain insured by the Federal Deposit Insurance
Corporation ("FDIC") to the fullest extent permitted by law and
regulation.
2.2. Effect on Common Stock of BankBoynton and Bankshares.
As of the Effective Time, by virtue of the Merger and without any
action except as specified herein on the part of the holders of
shares of BankBoynton Common Stock, each issued and outstanding
share of BankBoynton Common Stock (except as otherwise provided
in the Office of Thrift Supervision ("OTS") regulations with
respect to the rights of dissenting shareholders of BankBoynton)
shall be converted into the right to receive $9.00 in cash (the
"Purchase Price"), which shall be non-adjustable for any change
in value between the date hereof and the Closing Date, and all
outstanding certificates representing BankBoynton Common Stock
shall thereafter represent solely the right to receive the
Purchase Price. All shares of BankBoynton Common Stock which are
held in the treasury of BankBoynton and any
shares of BankBoynton Common Stock owned by Fidelity or any
direct or indirect wholly owned subsidiary or parent of Fidelity
shall be canceled and no consideration shall be paid or delivered
in exchange therefor. At the Effective Time, the stock transfer
books of BankBoynton shall be closed and no transfer of
BankBoynton Common Stock by any holder thereof shall thereafter
be made or recognized.
2.3. Options. As of the date hereof, there are no
outstanding options to purchase shares of BankBoynton Common
Stock.
2.4. Fidelity to Make Cash Available. At the Effective
Time, Fidelity shall make available the amount of cash payable
pursuant to Section 2.2 hereof; such cash to be deposited in an
escrow account, as mutually agreed to by the parties to this
Agreement, for the benefit of BankBoynton stockholders as set
forth pursuant to Section 2.2 hereof. The escrow account shall
be maintained until the earlier to occur of the twelve month
anniversary of the Effective Time or such time as all funds are
distributed to the stockholders of BankBoynton.
2.5. Payment of Cash.
(a) Fidelity shall act as the exchange agent (the "Exchange
Agent") in connection with the Merger. The Exchange Agent shall
promptly, following the Effective Time, mail to each former
shareholder of BankBoynton a notice specifying the consummation
of the merger and the procedures to be followed in surrendering
such shareholder's BankBoynton Common Stock certificates. At the
Closing or as soon as practicable thereafter, the Exchange Agent
shall (except to those holders of BankBoynton Common Stock who
have properly exercised dissenters' rights of appraisal) pay to
each holder who delivers his or her certificate or certificates
representing such shares to the Exchange Agent a check for an
amount equal to the number of shares represented by the
certificate or certificates so surrendered to the Exchange Agent
multiplied by the Purchase Price. As to each holder of record of
BankBoynton Common Stock who does not surrender his shares at
Closing, the Exchange Agent shall send within ten (10) business
days thereafter a notice and form of letter of transmittal
advising such shareholder of the effectiveness of the Merger and
the procedures for surrendering to the Exchange Agent outstanding
certificates formerly evidencing shares of BankBoynton Common
Stock. Each shareholder who thereafter delivers his or her
certificate or certificates representing such shares to the
Exchange Agent, together with a properly completed and duly
executed letter of transmittal, shall promptly be mailed a check
for an amount, without interest, equal to the number of shares
represented by the certificate or certificates so surrendered to
the Exchange Agent multiplied by the Purchase Price. Upon
surrender, each certificate evidencing BankBoynton Common Stock
shall be canceled. Until so surrendered, each outstanding
certificate which prior to the Effective Time evidenced shares of
BankBoynton Common Stock will be deemed for all purposes (except
as otherwise provided in Section 2.2 hereof) to evidence the
right to receive cash, without interest, equal to the number of
shares represented by the certificate or certificates multiplied
by the Purchase Price. After the Effective Time, there shall be
no further registration of transfers on the records of
BankBoynton of shares of BankBoynton Common Stock and, if a
certificate evidencing such shares is presented for transfer, it
shall be canceled in exchange for a
check (except as otherwise provided in Section 2.2 hereof) in the
appropriate amount as calculated above. Notwithstanding any
provision of this Agreement, neither the Exchange Agent nor any
person, firm or entity shall be liable or obligated to any former
holder of any share of BankBoynton Common Stock (or to anyone
claiming through any such former holder) with respect to amounts
to which any such holder would have been entitled as a
consequence of the Merger, if such amounts have been paid, or are
payable, to any public official pursuant to any abandoned
property, escheat or similar laws.
(b) If delivery of all or any part of the cash to be paid
in connection with the Merger is to be paid to a person other
than the person in whose name the certificate surrendered in
exchange therefor is registered, it shall be a condition to such
delivery that the certificate surrendered in exchange shall be
properly endorsed and otherwise in proper form for transfer and
that the person requesting such a delivery pay to the Exchange
Agent any transfer or other taxes required by reason of such
delivery in any name other than that of the registered holder of
the certificate surrendered or establish to the satisfaction of
the Exchange Agent that such tax has been paid or is not payable.
(c) In the event any certificate for BankBoynton Common
Stock shall have been lost, stolen or destroyed, the Exchange
Agent shall deliver (except as otherwise provided in Section 2.2
hereof) in exchange for such lost, stolen or destroyed
certificate, upon the making of an affidavit of that fact by the
holder thereof, the cash to be paid in the Merger as provided for
herein; provided, however, that Bankshares may, in its sole
discretion and as a condition precedent to the delivery thereof,
require the owner of such lost, stolen or destroyed certificate
to deliver a bond in such reasonable sum as Bankshares may direct
as indemnity against any claim that may be made against
BankBoynton, the Exchange Agent or any other party with respect
to the certificate alleged to have been lost, stolen or
destroyed.
ARTICLE III.
REPRESENTATIONS AND WARRANTIES OF BANKSHARES AND FIDELITY
Bankshares and Fidelity hereby represent and warrant to
BankBoynton as follows:
3.1. Corporate Organization. Fidelity is a stock savings
bank duly organized, validly existing and in good standing under
the laws of the United States. Bankshares is a holding company
duly organized and validly existing and in good standing under
the laws of the State of Delaware and a registered savings and
loan holding company under HOLA. All eligible accounts issued by
Fidelity are insured by the FDIC to the maximum extent permitted
under applicable law. Each of Bankshares and Fidelity has all
requisite corporate power and authority to own, operate and lease
its properties as presently owned, operated and leased and to
engage in the activities and business now being conducted by it.
Schedule 3.1 to the Bankshares disclosure schedule attached
hereto as Annex I (the "Bankshares Disclosure Schedule") lists
each "subsidiary" of Bankshares and Fidelity.
3.2. Authorization. The Boards of Directors of Bankshares
and Fidelity have approved the Agreement and the transactions
contemplated hereby and have authorized the execution, delivery
and performance by Bankshares and Fidelity of the Agreement. No
corporate proceeding on the part of Bankshares or Fidelity other
than those previously obtained is necessary to authorize the
Agreement or to consummate the transactions contemplated hereby,
and Bankshares and Fidelity have full corporate power and
authority to enter into the Agreement and to consummate the
transactions contemplated hereby subject to the conditions set
forth in Articles VIII and X of this Agreement. This Agreement
has been duly and validly executed and delivered by Bankshares
and Fidelity and constitutes the valid and binding obligation of
Bankshares and Fidelity, enforceable against each of them in
accordance with its terms, subject to (a) all applicable
bankruptcy, insolvency, moratorium or other similar laws
affecting the enforcement of creditors' rights generally, and (b)
the application of equitable principles if equitable remedies are
sought.
3.3. No Violation. Neither the execution and delivery of
the Agreement nor, subject to the receipt of the consents and
approvals contemplated by Section 3.4, the consummation of the
transactions contemplated herein will, (a) conflict with, result
in the breach of, constitute a violation of, constitute a default
under or accelerate the performance of the terms of any
government regulation, judgment, order or decree of any court or
other governmental agency to which Bankshares, Fidelity or any
subsidiary (the "Fidelity Subsidiary") may be subject, or any
contract, agreement or instrument to which Bankshares, Fidelity
or Fidelity Subsidiary is a party or by which Bankshares,
Fidelity or any of the Fidelity Subsidiaries are bound or
committed, or the Certificate of Incorporation of Bankshares, the
charter of Fidelity, the Articles of Incorporation of the
Fidelity Subsidiary, or the bylaws of Bankshares, Fidelity or the
Fidelity Subsidiary, or, any law, or any rule or regulation of
any governmental agency or authority, or (b) constitute an event
that with the lapse of time or action by a third party could
result in a default under any of the foregoing, or (c) result in
the creation of any lien, charge or encumbrance upon any of the
assets or properties of Bankshares, Fidelity or the Fidelity
Subsidiary.
3.4. Consents and Approvals. Other than the receipt of
approvals required by the HOLA and the Bank Merger Act, and the
regulations promulgated thereunder, no filing or registration
with, no notice to and no permit, authorization, consent or
approval of the shareholders of Bankshares or any public or
governmental body or authority is necessary for the consummation
by Bankshares of the transactions contemplated by the Agreement.
Bankshares knows of no reason (including those relating to fair
lending laws or other laws relating to discrimination, including,
without limitation, the Equal Credit Opportunity Act, the Fair
Housing Act, the Community Reinvestment Act and the Home Mortgage
Disclosure Act, and anti-trust or consumer disclosure laws and
regulations) why the regulatory approvals should not be obtained,
and has no reason to believe that such approvals would include
any term, condition or requirement that, individually or in the
aggregate, would have a Material Adverse Effect on the results,
business, operations, assets, or financial condition of
Bankshares and Fidelity on a consolidated basis.
3.5. Information Supplied for Inclusion in the BankBoynton
Proxy Statement. Any information regarding Bankshares, Fidelity
or the Fidelity Subsidiary supplied by Bankshares to
BankBoynton specifically for inclusion in the BankBoynton Proxy
Statement (as defined in Section 7.2(a) hereof) will not contain
any untrue statement of a material fact or omit to state a
material fact necessary to make the statements therein, in light
of the circumstances in which they were made, not misleading.
3.6. Cash Payment. Fidelity has sufficient funds to pay the
cash payment required under Section 2.2 and such payment will not
cause it to fail to meet any regulatory capital requirements to
which it is subject.
3.7. Accuracy of Information. The statements made by
Bankshares in the Agreement and in any other written documents
executed and/or delivered by or on behalf of Bankshares pursuant
to the terms of the Agreement are true and correct in all
material respects. None of the information supplied or to be
supplied by Bankshares or Fidelity for inclusion, or included, in
(i) the Proxy Statement to be mailed to the shareholders of
BankBoynton (as described below), in connection with the
BankBoynton Shareholder Meeting and (ii) any other documents to
be filed with FDIC, OTS or any regulatory agency in connection
with the transactions contemplated hereby will, to the best
knowledge of Bankshares or Fidelity and at such respective times
as such information is supplied or such documents are filed or
mailed, be false or misleading with respect to any material fact,
or omit to state any material fact necessary in order to make the
statements therein not misleading. All documents which Bankshares
or Fidelity is responsible for filing with the FDIC, OTS and any
regulatory agency in connection with the Merger will comply as to
form in all material respects with the provisions of applicable
law.
3.8. Supplement to Bankshares Disclosure Schedule.
Bankshares will promptly supplement or amend the Bankshares
Disclosure Schedule with respect to any matter hereafter arising
that, if existing or occurring at the date of this Agreement,
would have been required to be set forth or described in the
Bankshares Disclosure Schedule. A breach of a representation or
warranty will not be cured by a supplement or amendment to the
Bankshares Disclosure Schedule, without the written consent of
BankBoynton.
3.9. Litigation. Except as set forth in Schedule 3.9 to the
Bankshares Disclosure Schedule, no claims have been asserted and
no relief has been sought against Bankshares, Fidelity or the
Fidelity Subsidiary in any pending litigation or governmental
proceedings or otherwise which would be reasonably likely to
result in Bankshares becoming unable to pay the Purchase Price or
otherwise perform its obligations under, and consummate the
transactions contemplated by, this Agreement.
3.10. Regulatory Approvals. Bankshares is not aware of
any facts or circumstances relating to the business, operations
or financial condition of Bankshares, Fidelity or their wholly-
owned subsidiaries which would result in the denial, or
conditioning in a manner unacceptable to Bankshares or Fidelity,
of any of the regulatory approvals required for consummation of
the Merger.
ARTICLE IV.
REPRESENTATIONS AND WARRANTIES OF BANKBOYNTON
BankBoynton represents and warrants to Bankshares and
Fidelity as follows:
4.1. Corporate Organization.
(a) BankBoynton has all requisite corporate power and
authority to own, operate and lease its properties as presently
owned, operated or leased and to engage in the activities and
business now conducted by it. BankBoynton is qualified to do
business in each jurisdiction in which the nature of business
conducted or assets owned or leased by it makes such
qualification necessary and where a failure to do so would have a
Material Adverse Effect. The jurisdictions in which BankBoynton
is qualified to do business as a foreign corporation are
identified in Schedule 4.1(a) to the BankBoynton disclosure
schedule attached hereto as Annex II (the "BankBoynton Disclosure
Schedule"). BankBoynton is a member in good standing of the
Federal Home Loan Bank of Atlanta and all eligible accounts
issued by BankBoynton are insured by the FDIC to the maximum
extent permitted under applicable law. BankBoynton is a savings
bank duly organized, validly existing and in good standing under
the laws of the United States of America. BankBoynton has no
direct or indirect subsidiaries.
(b) BankBoynton has heretofore delivered to Bankshares true
and complete copies of the Federal Stock Charter and bylaws of
BankBoynton, in effect on the date hereof. The minute books of
BankBoynton contain accurate minutes of all meetings and accurate
consents in lieu of meetings of the board of directors (and any
committee thereof) and of the stockholder(s) of BankBoynton
recorded therein, and as of the Effective Time such minute books
will contain accurate minutes of all such meetings and such
consents in lieu of meetings respectively held or executed prior
thereto. The minute books accurately reflect all transactions
referred to in such minutes and consents in lieu of meetings and
disclose all material corporate actions of the stockholder(s) and
board of directors of BankBoynton and all committees thereof.
Except as reflected in such minute books, there are no minutes of
meetings or consents in lieu of meetings of the board of
directors (or any committee thereof) or of the stockholder(s) of
BankBoynton. The representations in this Section 4.1(b) with
respect to the minute books of BankBoynton are limited to the
past four (4) years from the date hereof.
4.2. Capitalization. The authorized capital stock of
BankBoynton consists of 1,000,000 shares of BankBoynton capital
stock, of which 1,000,000 shares are common stock, par value
$3.75 per share, and of which no shares are serial preferred
stock. As of the date hereof, there were issued and outstanding
625,200 shares of BankBoynton Common Stock and no shares were
outstanding of serial preferred stock. As of the date hereof, no
shares of BankBoynton Common Stock were reserved for issuance
pursuant to stock options and no shares of serial preferred stock
were reserved for issuance. All of such issued and outstanding
shares of BankBoynton capital stock are validly issued, fully
paid and nonassessable and not issued in violation of any
preemptive rights.
BankBoynton does not have any arrangements or commitments
obligating BankBoynton to issue or sell or otherwise dispose of,
or to purchase or redeem, shares of its capital stock or any
securities convertible into or having the right to purchase
shares of its capital stock. Schedule 4.2 of the BankBoynton
Disclosure Schedule sets forth a complete and accurate list of
all options to purchase BankBoynton Common Stock that have been
granted and which remain unexercised, including the dates of
grant, exercise prices, dates of vesting, dates of termination
and shares subject to option for each grant. To the best of
BankBoynton's knowledge, no person or group (as that term is used
in Section 13(d)(3) of the Securities Exchange Act of 1934 (the
"Exchange Act") other than as set forth at Schedule 4.2 of the
BankBoynton Disclosure Schedule, is the beneficial owner of more
than 5% of the outstanding BankBoynton Common Stock.
4.3. Authorization. The Board of Directors of BankBoynton
has approved the Agreement and the transactions contemplated
thereby and authorized the execution, delivery and performance by
BankBoynton of the Agreement. No other corporate proceeding on
the part of BankBoynton is necessary to authorize the Agreement
or to consummate the transactions contemplated thereby other than
the approval of the holders of BankBoynton Common Stock as
provided in Section 7.1 hereof. BankBoynton has full corporate
power and authority to enter into this Agreement and, upon
approval of the shareholders of BankBoynton Common Stock in
accordance with law and subject to the additional conditions set
forth in Articles IX and X of this Agreement, to consummate the
transactions contemplated hereby. This Agreement has been duly
and validly executed and delivered by BankBoynton and constitutes
the valid and binding obligations of BankBoynton, enforceable
against it in accordance with its terms, subject to (a) all
applicable bankruptcy, insolvency, moratorium, or other similar
laws affecting the enforcement of creditors' rights generally or
the rights of creditors of savings associations the accounts of
which are insured by the FDIC, (b) the application of equitable
principles if equitable remedies are sought, and (c) the
provisions of this Agreement providing that the Merger will be
enforceable only upon approval by the holders of BankBoynton
Common Stock as described in Section 7.1 hereof.
4.4. No Violation. Other than as set forth in Schedule 4.4
of the BankBoynton Disclosure Schedule, neither the execution and
delivery of the Agreement nor, subject to the receipt of the
consents and approvals contemplated by Section 4.6, the
consummation of the transactions contemplated herein will (a) to
the knowledge of BankBoynton (as defined in Section 12.7(e)
hereof) conflict with, result in the breach of, constitute a
default under or accelerate the performance provided by the terms
of any judgment, order or decree of any court or other
governmental agency to which BankBoynton may be subject, or any
contract, agreement or instrument to which BankBoynton is a party
or by which BankBoynton is bound or committed, or the Federal
Stock Charter of BankBoynton or the bylaws of BankBoynton, or any
law, or any rule or regulation of any governmental agency or
authority, or (b) to the knowledge of BankBoynton (as defined in
Section 12.7(e) hereof), constitute an event that with the lapse
of time or action by a third party, or both, could result in a
default under any of the foregoing or (c) result in the creation
of any lien, charge or encumbrance upon any of the assets,
properties or stock of BankBoynton which would reasonably be
deemed to have a Material Adverse Effect.
4.5. Reports and Consolidated Financial Statements. (a)
BankBoynton has previously furnished Bankshares with true and
complete copies of its financial statements as of and for the
years ended June 30, 1997, 1996 and 1995. As of their respective
dates, such financial statements did not contain any untrue
statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were
made, not misleading. The audited consolidated financial
statements of BankBoynton delivered to Bankshares (collectively
referred to herein as the "BankBoynton Financial Statements")
have been prepared in accordance with generally accepted
accounting principles applied on a consistent basis (except as
may be indicated therein or in the notes thereto) and fairly
present the financial position of BankBoynton as of the dates
thereof and the results of its operations and changes in
financial position for the periods then ended. Except as set
forth in Schedule 4.5 to the BankBoynton Disclosure Schedule,
since July 1, 1996 to the Closing Date, BankBoynton has not
suffered a Material Adverse Effect and BankBoynton is not aware
of any event or circumstance, or series of events and
circumstances, which is reasonably likely to result in a Material
Adverse Effect to BankBoynton. The books and records of
BankBoynton have been, and are being, maintained in accordance
with applicable legal and accounting requirements and reflect
only actual transactions. As of July 1, 1996 to the Closing
Date, except and to the extent (i) reflected, disclosed or
provided for in the financial statements referred to above and
(ii) of liabilities incurred since July 1, 1996 to the Closing
Date, in the ordinary course of business and consistent with
prudent banking practice, BankBoynton does not have any
liabilities, whether absolute, accrued, contingent or otherwise,
which involves a Material Adverse Effect relating to the
business, operations, assets or financial condition of
BankBoynton.
(b) BankBoynton has filed all reports, together with any
amendments required to be made with respect thereto, that were
required to be filed since June 30, 1994 to the date of this
Agreement with (1) the OTS; (2) the FDIC; and (3) any state
banking commission or other banking authority, and has paid all
fees and assessments due and payable in connection therewith.
4.6. Consents and Approvals. Other than as set forth in
Schedule 4.6 to the BankBoynton Disclosure Schedule and other
than the receipt of approvals required by the HOLA, the Thrift
Regulations, and applicable federal securities and state laws,
and the approval of the holders of BankBoynton Common Stock as
described in Section 7.1 hereof, no filing or registration with,
no notice to and no permit, authorization, consent or approval of
any third party or any public or governmental body or authority
is necessary for the consummation by BankBoynton of the
transactions contemplated by the Agreement or to enable
BankBoynton to continue to conduct its business after the
Effective Time in a manner which is consistent with that in which
it is presently conducted, except where the failure to make such
filing or obtain such permit, authorization, consent or approval
will not in the aggregate have a Material Adverse Effect.
4.7. Absence of Certain Changes. Since June 30, 1996 to the
Closing Date, and except as otherwise permitted by this
Agreement, BankBoynton has not except as set forth in Schedule
4.7 to the BankBoynton Disclosure Schedule: (a) issued or sold
any corporate debt securities as issuer thereof; (b) granted any
option for the purchase of its capital stock; (c) declared or set
aside or paid
any dividend or other distribution in respect of its capital
stock; (d) incurred any material obligation or liability
(absolute or contingent), except obligations or liabilities
incurred in the ordinary course of business in accordance with
past practices; (e) mortgaged, pledged or subjected to lien or
encumbrance (other than statutory liens for taxes not yet
delinquent and landlord liens) any of its material assets or
properties except pledges to secure government deposits and in
connection with repurchase or reverse repurchase agreements; (f)
discharged or satisfied any material lien or encumbrance or paid
any obligation or liability (absolute or contingent), other than
current liabilities included in BankBoynton's balance sheet as of
June 30, 1996, and current liabilities incurred since the date
thereof in the ordinary course of business in accordance with
past practices; (g) sold, exchanged or otherwise disposed of any
of its material capital assets other than in the ordinary course
of business in accordance with past practices; (h) materially
made or modified any wage or salary increase other than routine
periodic increases in salary for employees in the ordinary course
of business and in accordance with past practices or as required
by law, entered into any employment contract with any officer or
salaried employee or instituted any employee welfare, bonus,
stock option, profit sharing, retirement or similar plan or
arrangement; (i) suffered any damage, destruction or loss,
whether or not covered by insurance, materially and adversely
affecting its business, property or assets or waived any rights
of value that are material in the aggregate, considering its
business taken as a whole; (j) except in the ordinary course of
business in accordance with past practices, entered, or agreed to
enter, into any agreement or arrangement granting any
preferential right to purchase any of its assets, properties or
rights or requiring the consent of any party to the transfer and
assignment of any such assets, properties or rights; (k) entered
into any material transaction outside the ordinary course of its
business in accordance with past practices, except as expressly
contemplated by the Agreement; or (1) except in the ordinary
course of business in accordance with past practices or as
reflected in the BankBoynton Financial Statements, sold or
otherwise disposed of any of its material investment securities.
4.8. Employee and Employee Benefits Matters. Except as
disclosed in Schedule 4.8(a), BankBoynton does not provide any
employee benefit plans. (a) Schedule 4.8(a) to the BankBoynton
Disclosure Schedule lists (i) each employee benefit plan which is
maintained by BankBoynton for the benefit of any current or
former employee, officer, director, consultant or agent; (ii)
each plan, program or arrangement for the provision of medical,
surgical, or hospital care or benefits, benefits in the event of
sickness, accident, disability, death, unemployment, severance,
vacation, apprenticeship, day care, scholarship, prepaid legal
services or other benefits; and (iii) every other retirement or
deferred compensation plan, bonus or incentive compensation plan
or arrangement, severance or vacation pay arrangement, or other
fringe benefit plan, program or arrangement through which
BankBoynton provides benefits for or on behalf of any current or
former employee, officer, director, consultant or agent.
BankBoynton has delivered or made available to Bankshares a true
and correct copy of (a) each BankBoynton Benefit Plan, (b) the
most recent annual report (Form 5500) filed with the Internal
Revenue Service ("IRS") with respect to each BankBoynton Benefit
Plan, if applicable, (c) each trust agreement and group annuity
contract, if any, relating to such BankBoynton Benefit Plan, (d)
the most recent actuarial report or valuation relating to a
BankBoynton Benefit Plan subject to Title IV of ERISA and (e) all
rulings and determination letters and any open requests for
rulings or letters that pertain to any BankBoynton Benefit Plan.
(b) All of the plans, programs and arrangements described
in this Section 4.8 or listed in Schedule 4.8(a) to the
BankBoynton Disclosure Schedule (hereinafter referred to as the
"BankBoynton Benefit Plans") that are subject to ERISA and the
Internal Revenue Code ("Code") are in material compliance with
all applicable requirements of ERISA and the Code and all other
applicable federal and state laws, including, without limitation,
the reporting and disclosure requirements of Part I of Title I of
ERISA. Each of the BankBoynton Benefit Plans that is intended to
be a pension, profit sharing, stock bonus, thrift, savings or
employee stock ownership plan that is qualified under Section
401(a) of the Code satisfies the applicable requirements of such
provision and there exist no circumstances that would adversely
affect the qualified status of any such Plan under that section,
except with respect to any required retroactive amendment for
which the remedial amendment period has not yet expired. Except
as set forth in Schedule 4.8(b) to the BankBoynton Disclosure
Schedule, to the knowledge of BankBoynton, there is no pending
or, threatened litigation, claim, action, governmental proceeding
or investigation against or relating to any BankBoynton Benefit
Plan which could give rise to any material liability, and there
is no reasonable basis for any material litigations, claims,
actions or proceedings against any such BankBoynton Benefit Plan.
No BankBoynton Benefit Plan (or BankBoynton Benefit Plan
fiduciary) has engaged in a non-exempt "Prohibited Transaction"
(as defined in Section 406 of ERISA and Section 4975(c) of the
Code) since the date on which said sections became applicable to
such Plan. There have been no acts or omissions by BankBoynton
that have given rise to any fines, penalties, taxes or related
charges under Sections 502(c), 502(i) or 4071 of ERISA or Chapter
43 of the Code, or that may give rise to any material fines,
penalties, taxes or related damages under such laws for which
BankBoynton may be liable. BankBoynton has no knowledge of, or
any reasonable basis to believe, that any material liability
under Title IV of ERISA has been incurred by BankBoynton, any
former Affiliates of BankBoynton or the BankBoynton Benefit Plans
since the effective date of ERISA that has not been satisfied in
full, and that any condition exists that presents a material risk
of incurring a liability under such Title, other than liability
for premiums due the Pension Benefit Guaranty Corporation
("PBGC"), which payments have been made or will be made when due.
With respect to each of the BankBoynton Benefit Plans which is
subject to Title IV of ERISA, the present value of accrued
benefits under such Plan or Plans, based upon the actuarial
assumptions used for funding purposes in the most recent
actuarial report prepared by such Plan's actuary with respect to
such Plan, did not, as of its latest valuation date, exceed the
then current value of the assets of such Plan allocable to such
accrued benefits and BankBoynton is not aware of any facts or
circumstances that would materially change the funded status of
any such ERISA Plan. None of the BankBoynton Benefit Plans is a
"multiemployer pension plan" as such term is defined in section
3(37) of ERISA. Except as listed on Schedule 4.8(a) of the
BankBoynton Disclosure Schedule, no employee of BankBoynton will
be entitled to any additional benefits or any acceleration of the
time of payment or vesting of any benefits under any BankBoynton
Benefit Plan as a result of the transactions contemplated by this
Agreement. Other than current or contingent liabilities
previously disclosed on Schedule 4.8(a) of the BankBoynton
Disclosure Schedule, neither BankBoynton nor any BankBoynton
Benefit Plan will have any material current or contingent
liability with respect to any Plan. All group health plans of
BankBoynton, including any plans of current and former Affiliates
of BankBoynton that must be taken into account under Section
4980B of the Code or Section 601 of ERISA or the requirements of
any similar state law regarding insurance continuation, have been
operated in material compliance
with the group health plan continuation coverage requirements of
Section 4980B of the Code and Section 601 of ERISA to the extent
such requirements are applicable. All payments due from any
BankBoynton Benefit Plan (or from BankBoynton with respect to any
BankBoynton Benefit Plan) have been made, and all amounts
properly accrued to date as liabilities of BankBoynton that have
not yet been paid have been properly recorded on the books of
BankBoynton.
(c) Neither BankBoynton, nor its Subsidiary, is a party to,
or is bound by, any collective bargaining agreement, contract, or
other agreement or understanding with a labor union or labor
organization with respect to its employees. Neither BankBoynton
nor its Subsidiary is the subject of any proceeding asserting
that its has committed an unfair labor practice or seeking to
compel it or its Subsidiary to bargain with any labor
organization as to the wages and conditions of employment, nor is
the management of BankBoynton aware of any strike or other labor
dispute involving BankBoynton.
4.9. Litigation. No claims have been asserted and no relief
has been sought against BankBoynton in any pending litigation or
governmental proceedings or otherwise which would be reasonably
expected to result in damages or other relief which would be
reasonably likely to have a Material Adverse Effect. To the
knowledge of BankBoynton, there are no circumstances, conditions,
events or arrangements, contractual or otherwise, which may
hereafter give rise to any proceedings, claims, actions or
government investigations involving BankBoynton which would
reasonably be expected to result in damages or other relief which
would be reasonably likely to have a Material Adverse Effect, nor
are any such proceedings, claims, actions or government
investigations threatened. Except as set forth in Schedule 4.9
to the BankBoynton Disclosure Schedule, BankBoynton is not a
party to any order, judgment or decree which would reasonably be
expected to have a Material Adverse Effect, and BankBoynton (a)
is not the subject of any cease and desist order, or other formal
or informal enforcement action by any regulatory authority and
(b) has not made any commitment to or entered into any agreement
with any regulatory authority that restricts or adversely affects
its operations or financial condition.
4.10. Tax Matters. BankBoynton has timely filed
(inclusive of applicable extension periods) with the appropriate
governmental agencies all material federal, state and local
income, franchise, excise, sales, use, real and personal property
and other tax returns and reports (including information returns
and reports) that are required to be filed, and BankBoynton is
not materially delinquent in the payment of any taxes shown on
such returns or reports or on any assessments for any such taxes
received by BankBoynton. There are included in the BankBoynton
Financial Statements adequate reserves for the payment of all
accrued but unpaid material federal, state and local taxes of
BankBoynton, including interest and penalties, whether or not
disputed for such fiscal years as reflected therein and all
fiscal years prior thereto. BankBoynton has not executed or
filed with the Internal Revenue Service ("IRS") or any state tax
authority any agreement extending the period for assessment and
collection of any federal or state tax, and BankBoynton is not a
party to any action or proceeding by any governmental authority
for assessment or collection of taxes. There is no outstanding
material assessment or claim for collection of taxes against
BankBoynton. Except as set forth in Schedule 4.10 to the
BankBoynton Disclosure Schedule, the federal income tax returns
of
BankBoynton have been audited by the IRS (or are closed to
examination due to the expiration of the applicable statute of
limitations) and no deficiencies were asserted as a result of
such audit which have not been resolved and paid in full or
adequate reserves or accruals established in accordance with
generally accepted accounting principles with respect thereto.
"Taxes" shall mean all taxes, charges, fees, levies,
penalties or other assessments imposed by federal, state, local
or foreign taxing authorities, including but not limited to,
income, excise, property, sales, transfer, franchise, payroll,
withholding, social security or other taxes, including any
interest, penalties or additions thereto.
BankBoynton has not, during the past five (5) years, except
as disclosed in Schedule 4.10 to the BankBoynton Disclosure
Schedule, received any notice of deficiency, proposed deficiency
or assessment from the IRS or any other governmental agency, with
respect to any federal, state, county or local taxes. No federal
or state tax return of BankBoynton is currently the subject of
any audit by the IRS or any other governmental agency. During
the past five (5) years, no material deficiencies have been
asserted in connection with the federal and state income tax
returns of BankBoynton, and BankBoynton has no reason to believe
that any material deficiency would be asserted relating thereto.
Except as disclosed in Schedule 4.10 to the BankBoynton
Disclosure Schedule, BankBoynton is not a party to any agreement
providing for allocation or sharing of taxes. BankBoynton has
not ever been a member of an "affiliated group of corporations"
(within the meaning of Section 1504(a) of the Code) filing
consolidated returns, other than the affiliated group of which
BankBoynton is or BankBoynton was the common parent.
4.11. Information in the BankBoynton Proxy Statement.
BankBoynton represents and warrants that the BankBoynton Proxy
Statement will not, either at the time it is mailed to the
shareholders of BankBoynton in connection with the BankBoynton
Shareholders' Meeting (as defined in Section 7.1 hereof) or at
the time of the BankBoynton Shareholders Meeting, contain any
untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances in which they
were made, not misleading; provided, however, that none of the
representations and warranties in this Section 4.11 shall apply
to statements in or omissions from the BankBoynton Proxy
Statement made in reliance upon and in conformity with
information about or furnished by or on behalf of Bankshares or
Fidelity for use in the BankBoynton Proxy Statement.
4.12. Environmental Matters. For purposes of this
Section 4.12, the following terms shall have the indicated
meaning:
"Environmental Law" means any federal, state or local law,
statute, ordinance, rule, regulation, code, license, permit,
authorization, approval, consent, order, judgment, decree,
injunction or agreement with any governmental entity relating to
(1) the protection, preservation or restoration of the
environment (including, without limitation, air, water vapor,
surface water, groundwater, drinking water supply, surface soil,
subsurface soil, plant and animal life or any other natural
resource), and/or (2) the use, storage, recycling, treatment,
generation, transportation,
processing, handling, labeling, production, release or disposal
of Materials of Environmental Concern. The term Environmental
Law includes without limitation (1) the Comprehensive
Environmental Response, Compensation and Liability Act, as
amended, 42 U.S.C. Section 9601, et seq; the Resource
Conservation and Recovery Act, as amended, 42 U.S.C. Section
6901, et seq; the Clean Air Act, as amended, 42 U.S.C. Section
7401, et seq; the Federal Water Pollution Control Act, as
amended, 33 U.S.C. Section 1251, et seq; the Toxic Substances
Control Act, as amended, 15 U.S.C. Section 9601, et seq; the
Emergency Planning and Right to Know Act, 42 U.S.C. Section
11001, et seq; the Safe Drinking Water Act, 42 U.S.C. Section
300f, et seq; and all comparable state and local laws, and (2)
any common law (including without limitation common law that may
impose strict liability) that may impose liability or obligations
for injuries or damages due to, or threatened as a result of, the
presence of or exposure to any Materials of Environmental
Concern.
"Environmental Claim" means any written notice from any
governmental authority or third party alleging potential
liability (including, without limitation, potential liability for
investigatory costs, cleanup costs, governmental response costs,
natural resources damages, property damages, personal injuries or
penalties) arising out of, based on, or resulting from the
presence, or release into the environment, of any Materials of
Environmental Concern.
"Materials of Environmental Concern" means pollutants,
contaminants, wastes, toxic substances, petroleum and petroleum
products and any other materials regulated under Environmental
Laws.
"Properties Owned" means those properties owned, leased or
operated by BankBoynton, not including those properties serving
as collateral for any loans made and retained by BankBoynton or
for which BankBoynton serves in a trust relationship for the
loans retained in portfolio.
(a) Other than as set forth on Schedule 4.12(a) to the
BankBoynton Disclosure Schedule, to the knowledge of BankBoynton,
BankBoynton is in compliance with all Environmental Laws, except
for any violations of any Environmental Law which would not,
singly or in the aggregate, have a material adverse effect on the
business, operations, assets, financial condition or prospects of
BankBoynton. Other than as set forth on Schedule 4.12(a) to the
BankBoynton Disclosure Schedule, since June 30, 1992, BankBoynton
has not received any communication alleging that BankBoynton is
not in such compliance and, to the knowledge of BankBoynton,
there are no present circumstances that would prevent or
interfere with the continuation of such compliance.
(b) Other than as set forth on Schedule 4.12(b) to the
BankBoynton Disclosure Schedule, to the knowledge of BankBoynton,
BankBoynton has not been or is not in violation of or liable
under any Environmental Law, except any such violations or
liabilities which would not singly or in the aggregate have a
material adverse effect on the business, operations, assets or
financial condition of BankBoynton.
(c) Other than as set forth on Schedule 4.12(c) to the
BankBoynton Disclosure Schedule, to the knowledge of BankBoynton,
none of the Properties Owned by it has been or is in violation of
or liable under any Environmental Law, except any such violations
or liabilities which singly or in the aggregate would not have a
material adverse effect on the business, operations, assets or
financial condition of BankBoynton.
(d) Other than as set forth on Schedule 4.12(d) to the
BankBoynton Disclosure Schedule, to the knowledge of BankBoynton,
there are no actions, suits, demands, notices, claims,
investigations or proceedings pending or threatened relating to
the liability of the Properties Owned by BankBoynton under any
Environmental Law, including without limitation any notices,
demand letters or requests for information from any federal or
state environmental agency relating to any such liabilities under
or violations of Environmental Law, except such which would not
have or result in a material adverse effect on the business,
operations, assets or financial condition of BankBoynton.
(e) Other than as set forth on Schedule 4.12(e) to the
BankBoynton Disclosure Schedule, to the knowledge of BankBoynton,
there are no past or present actions, activities, circumstances,
conditions, events or incidents that could reasonably form the
basis of any Environmental Claim or other claim or action or
governmental investigation that could result in the imposition of
any liability arising under any Environmental Law against
BankBoynton or against any person or entity whose liability for
any Environmental Claim BankBoynton has or may have retained or
assumed either contractually or by operation of law, except such
which would not have a material adverse effect on the business,
operations, assets, financial condition or prospects of
BankBoynton.
(f) BankBoynton has set forth on Schedule 4.12(f) to the
BankBoynton Disclosure Schedule, any environmental studies
conducted by it during the past five years with respect to any
properties owned by it as of the date of this Agreement.
4.13. Insurance. BankBoynton will deliver to Bankshares
as part of Schedule 4.13 to the BankBoynton Disclosure Schedule
true, accurate and complete copies of all insurance policies and
fidelity bonds of BankBoynton. Each such policy is in full force
and effect, with all premiums due thereon on or prior to the
Closing Date having been paid as and when due. BankBoynton has
not been notified that its fidelity or insurance coverage will
not be renewed by its carrier(s) on substantially the same terms
as its existing coverage. All such policies (i) are sufficient
for compliance by BankBoynton with all requirements of law and
all agreements to which BankBoynton is a party, and (ii) will not
terminate or lapse prior to the Effective Time without similar
policies being obtained that would continue until the Effective
Time.
4.14. Compliance with Laws and Orders. Except as set
forth in Schedule 4.14 to the BankBoynton Disclosure Schedule,
BankBoynton has not received notice of any violation or alleged
material violation of, or, to the knowledge of BankBoynton, is
subject to any liability (whether accrued, absolute, contingent,
direct or indirect) for past or continuing material violations
of, any law, statute or regulation. BankBoynton is not in
default under, and no event has occurred that, with the lapse of
time or action by a third party or both, could result in a
default under the terms of any judgment, decree, order, writ,
rule or regulation of any governmental authority or court,
whether federal, state or local and whether at law or in equity,
where the failure to be in full compliance
would reasonably be expected to result alone or in the aggregate
in damages, which would be reasonably likely to have a Material
Adverse Effect.
4.15. Governmental Regulation. BankBoynton holds all
licenses, certificates, permits, franchises and rights from all
appropriate federal, state and other public authorities necessary
for the conduct of its business; and, between the date hereof and
the Closing Date, BankBoynton will maintain all such licenses,
certificates, permits, franchises and rights in effect. Except
as set forth in Schedule 4.15 to the BankBoynton Disclosure
Schedule, BankBoynton is not a party or subject to any
agreements, directives, orders or similar arrangements between or
involving BankBoynton and any state or federal savings
institution regulatory authority. In connection with its most
recent examination of BankBoynton, neither the OTS nor the FDIC
have informed BankBoynton, whether by written communication or
otherwise, to amend or change in any material way its accounting
methods, methods of operation or business practices, or to
classify any loans not previously classified or to charge-off
loans, or increase its allowance for loan losses or to take or
discontinue any activity or action.
4.16. Contracts and Commitments. Except as set forth in
Schedule 4.16 to the BankBoynton Disclosure Schedule, BankBoynton
is not a party to or bound by any (a) material lease or license
with respect to any property, real or personal; (b) material
contract or commitment for capital expenditures; (c) material
contract or commitment for total expenses for the purchase of
materials, supplies or for the performance of services by third
parties for a period of more than 60 days from the date of this
Agreement; (d) material contract or option for the purchase or
sale of any real or personal property other than in the ordinary
course of business; or (e) agreement, arrangement or
understanding relating to the employment, election, retention in
office or severance of any present or former director, officer or
employee of BankBoynton. To its knowledge, BankBoynton has
performed in all material respects all obligations required to be
performed by it to date and is not in default under, and no event
has occurred which, with the lapse of time or action by a third
party or both, could result in a default resulting in material
damages or other material default under any outstanding mortgage,
lease, contract, commitment or agreement to which BankBoynton is
a party or by which BankBoynton is bound or under any provision
of its charter or bylaws. To the knowledge of BankBoynton, each
such outstanding material mortgage, lease, contract, commitment
or agreement is a valid and legally binding obligation of
BankBoynton subject to (x) all applicable bankruptcy, insolvency,
moratorium or other similar laws affecting the enforcement of
creditors rights generally or the rights of creditors of savings
associations the accounts of which are insured by the FDIC, and
(y) the application of equitable principles if equitable remedies
are sought.
4.17. Agreements with Directors, Officers and
Shareholders.. Except as set forth in Schedule 4.17 to the
BankBoynton Disclosure Schedule, no director, executive officer,
or holder of five percent (5.0%) or more of the outstanding
capital stock of BankBoynton nor any associate of any such person
(a "BankBoynton Principal") (a) is or has during the period
subsequent to June 30, 1996, been a party (other than as a
depositor) to any transaction with BankBoynton, whether as a
borrower or otherwise, that (i) was made other than in the
ordinary course of business, (ii) was made on other than
substantially the same terms, including interest rate and
collateral, as those prevailing at the time
for comparable transactions with other persons, or (iii)
involves more than the normal risk of collectability or presents
other unfavorable features; or (b) is a party to any material
loan or loan commitment, whether written or oral.
4.18. Accuracy of Information. The statements made by
BankBoynton in the Agreement and in any other written documents
executed and/or delivered by or on behalf of BankBoynton pursuant
to the terms of the Agreement are true and correct in all
substantial respects. The statements contained in such other
documents or specifically referred to in the Agreement will be
deemed to constitute representations and warranties of
BankBoynton under this Agreement to the same extent as if set
forth herein in full.
4.19. Supplement to BankBoynton Disclosure Schedule.
BankBoynton will promptly supplement or amend the BankBoynton
Disclosure Schedule to the date of Closing with respect to any
matter hereafter arising that, if existing or occurring at the
date of this Agreement, would have been required to be set forth
or described in the BankBoynton Disclosure Schedule. A breach of
a representation or warranty will not be cured by a supplement or
amendment to the BankBoynton Disclosure Schedule, without the
written consent of Bankshares and Fidelity.
4.20. Title to Assets; Leases.
(a) Except for (i) liens and encumbrances specifically
disclosed in any of the consolidated financial statements of
BankBoynton referred to in Section 4.5 hereof, (ii) landlords' or
statutory liens or other liens incurred in the ordinary course of
business and not securing indebtedness for borrowed money and not
yet delinquent, and (iii) liens and encumbrances which are not
material in amount and do not materially impair the value of any
property subject thereto or the use of such property for the
purposes for which it is presently used or intended to be used,
BankBoynton has good and marketable title, free and clear of all
security interests, encumbrances, trust agreements, liens or
other adverse claims, to all its assets and property, real and
personal, reflected in the financial statements referred to in
Section 4.5 hereof or acquired thereafter, which includes all
property and assets used by BankBoynton that are material to the
conduct of its businesses, except for assets and property
disposed of in the ordinary course of business after June 30,
1996.
(b) BankBoynton as lessee has the right under valid and
existing leases to occupy, use, possess and control all property
leased by it in all material respects as presently occupied,
used, possessed and controlled by BankBoynton and such leases
will not terminate or lapse prior to the Effective Time or be
affected in any material respect by consummation of the
transactions contemplated hereby. Schedule 4.20(b) contains an
accurate listing of each lease pursuant to which BankBoynton acts
as lessor or lessee, including the expiration date and the terms
of any renewal options which relate to the same, as well as a
listing of each real property owned by BankBoynton and used in
the conduct of its business.
(c) All material real and personal property owned by
BankBoynton or used by it is in an adequate condition (ordinary
wear and tear excepted) to carry on the business of BankBoynton
in the manner conducted currently by it.
4.21. Fees. BankBoynton has not, and to the knowledge
of BankBoynton none of its 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 fee, and no broker or finder has
acted directly or indirectly for BankBoynton, in connection with
this Agreement or the transactions contemplated hereby.
4.22. Business of BankBoynton. Since June 30, 1996,
BankBoynton has conducted its business in the ordinary course.
For purposes of the foregoing, BankBoynton has not, since June
30, 1996, controlled expenses through the (i) elimination of
employee benefits; (ii) deferral of routine maintenance of real
property or leased premises; (iii) elimination of reserves where
the liability related to such reserve has remained; (iv)
reduction of capital improvements from previous levels; (v)
failure to depreciate capital assets in accordance with past
practice or to eliminate capital assets no longer used in
BankBoynton's business; (vi) capitalized loan production expenses
other than in accordance with SFAS No. 91, or (vii) extraordinary
reduction or deferral of ordinary or necessary expenses.
ARTICLE V.
COVENANTS OF BANKSHARES
Bankshares hereby agrees that from the date of this
Agreement until the Effective Time:
5.1. Affirmative Covenants. As soon as reasonably
practicable, Bankshares will furnish BankBoynton with copies of
all of Bankshares' periodic reports on Forms 10-K, 10-Q and 8-K
and all proxy statements filed with the Securities and Exchange
Commission ("SEC") subsequent to the date hereof.
5.2. Negative Covenants. Except as specifically
contemplated by this Agreement, Bankshares shall not do, or agree
or commit to do, or permit Fidelity or the Fidelity Subsidiary to
do, without the prior written consent of BankBoynton (which shall
not be unreasonably withheld), any of the following:
(a) willfully take action which would or is reasonably
likely to (i) adversely affect the ability of either Bankshares,
Fidelity or BankBoynton to obtain any necessary approvals of
governmental authorities required for the transactions
contemplated hereby; (ii) adversely affect Bankshares' ability to
perform its covenants and agreements under this Agreement; or
(iii) result in any of the conditions to the Merger set forth in
Articles IX and X not being satisfied; or
(b) agree in writing or otherwise to do any of the
foregoing.
5.3. Breaches. Bankshares shall, in the event it becomes
aware of the impending or threatened occurrence of any event or
condition which would cause or constitute a material breach (or
would have caused or constituted a breach had such event occurred
or been known prior to the date hereof) of any of its
representations or agreements contained or referred to herein,
give prompt written notice thereof to BankBoynton and use its
best efforts to prevent or promptly remedy the same.
5.4. Employee Benefit Plans: Employment Arrangements.
(a) Subject to the continuing discretion and judgment of
Bankshares and Fidelity, Bankshares and Fidelity will consider
making offers of continuing employment to the employees of
BankBoynton who are in the employ of BankBoynton at the Effective
Time, although nothing herein shall be deemed to require
Bankshares or Fidelity to employ any such employee on and after
the Effective Time or to continue the employment of any such
employee employed as of the Effective Time, including without
limitation, any officer of BankBoynton. Employees of BankBoynton
who become employees of Bankshares or Fidelity on and after the
Effective Time shall be referred to herein as "Continuing
Employees."
(b) Fidelity, at its option, may continue, freeze or
terminate all or any of the BankBoynton Benefit Plans, if any, or
may merge any such benefit plans into its own plans, all in
accordance with applicable federal and state laws, including
ERISA. Each Continuing Employee who becomes a participant in any
Fidelity Plan shall participate in such Plan as a new employee of
Fidelity, except as specifically required otherwise by law.
(c) Bankshares and Fidelity shall, at their election,
either continue to employ ▇▇▇▇▇▇ ▇. Page for the term and under
the provisions of the employment agreement listed in Schedule
5.4(c) hereto, or alternatively shall pay ▇▇▇▇▇▇ ▇. Page
severance in an amount equal to the compensation he would have
received under the employment agreement.
5.5. Filing of Applications. Bankshares and Fidelity shall
use their best efforts to prepare within 45 days of the date of
this Agreement, submit, publish and file (a) an application to
the Office of Thrift Supervision ("OTS") under 12 C.F.R. Part
574; and (b) any other applications, notices or statements
required to be filed in connection with the transactions
contemplated hereby.
5.6. Expenses. Bankshares hereby agrees that if this
Agreement or the transactions contemplated hereby are terminated
by BankBoynton pursuant to Sections 11.1(c) (iii) or (iv) as a
result of a willful breach by Bankshares, Bankshares shall
promptly (and in any event within ten (10) business days after
such termination) pay all reasonable Expenses of BankBoynton in
an amount not to exceed $50,000. For purposes of this Section
5.6, the "Expenses of BankBoynton" shall include all reasonable
out-of-pocket expenses (including all fees and expenses of
counsel, accountants, investment bankers, experts and consultants
to BankBoynton and its Affiliates) incurred by it or on its
behalf in connection with the consummation of the transactions
contemplated by this Agreement.
5.7. Supplement to Bankshares Disclosure Schedule.
Bankshares will promptly supplement or amend the Bankshares
Disclosure Schedule with respect to any matter hereafter arising
that, if existing or occurring at the date of this Agreement,
would have been required to be set forth or described in the
Bankshares Disclosure Schedule. No supplement or amendment to
the Bankshares Disclosure Schedule will have any effect for the
purpose of determining satisfaction of the condition set forth in
Section 9.1 hereof.
5.8. Non-Assignability. Bankshares hereby agrees that its
rights under this Agreement may not be assigned, sold or
otherwise transferred to any other party.
ARTICLE VI.
COVENANTS OF BANKBOYNTON
BankBoynton hereby agrees that from the date of this
Agreement until the Effective Time:
6.1. Affirmative Covenants. Unless the prior written
consent of Bankshares shall have been obtained (which shall not
be unreasonably withheld) and except as otherwise contemplated
herein, BankBoynton will:
(a) operate its business in the ordinary course in
accordance with past business practices;
(b) use its best efforts to preserve intact its business
organization and assets, maintain its rights and franchises,
retain the services of its officers and key employees (except
that it shall have the right to terminate the employment of any
officer or key employee in accordance with established employment
procedures) and maintain its relationships with customers:
(c) maintain its corporate existence in good standing and
file all required BankBoynton Reports (as defined in such Section
12.7(c) hereof);
(d) use its best efforts to maintain and keep its
properties in as good repair and condition as at present, except
for ordinary wear and tear;
(e) use its best efforts to keep in full force and effect
insurance and bonds comparable in amount and scope of coverage to
that now maintained by it and, in the event that BankBoynton is
unable to keep such insurance and bonds in full force and effect,
to provide prompt notice of such failure to Bankshares;
(f) perform all obligations required to be performed by it
under all material contracts, leases, and documents relating to
or affecting its assets, properties, and business;
(g) use its best efforts to comply with and perform in all
material respects all obligations and duties imposed upon it by
all applicable laws and regulations, including the filing of all
reports required to be filed with the OTS, the FDIC and any other
banking authority; and
(h) as soon as reasonably practicable, furnish Bankshares
copies of all of BankBoynton's financial and regulatory reports
subsequent to the date hereof.
(i) promptly inform Bankshares of its receipt of a
Different Proposal for purchase.
6.2. Negative Covenants. Except as specifically
contemplated by this Agreement, from the date hereof until the
Effective Time, BankBoynton shall not do, without the prior
written consent of Bankshares (which shall not be unreasonably
withheld), any of the following:
(a) incur any material liabilities or material obligations,
whether directly or by way of guaranty, including any obligation
for borrowed money whether or not evidenced by a note, bond,
debenture or similar instrument or enter into or extend any
material agreement or lease, except in the ordinary course of
business consistent with prudent business practices or in
connection with the transactions contemplated and permitted by
the Agreement;
(b) (i) grant any bonus or increase in compensation to its
directors or grant any bonus or any increase in compensation to
its officers and employees either individually or as a class,
except routine periodic increases in salary for employees in the
ordinary course of business and in accordance with past practices
or as required by law, (ii) effect any change in retirement
benefits to any class of employees or officers (unless any such
change shall be required by applicable law) that would increase
its retirement benefit liabilities, (iii) adopt, enter into,
amend or modify any BankBoynton Benefit Plan, (iv) enter into any
employment, severance or similar agreements or arrangements with
any directors or officers, or enter into any employment
agreement.
(c) declare or pay any dividend on, or make any other
distribution in respect of, its outstanding shares of capital
stock;
(d) (i) redeem, purchase or otherwise acquire any shares of
its capital stock or any securities or obligations convertible
into or exchangeable for any shares of its capital stock,
conversion or other rights to acquire any shares of its capital
stock or any such securities or obligations; (ii) merge with or
into any other corporation, savings institution or bank, permit
any other corporation, savings institution or bank to merge into
it or consolidate with any other corporation or bank, in either
case, unless the fiduciary duties of BankBoynton's Board of
Directors require it to do so, or effect any reorganization or
recapitalization; (iii) purchase or otherwise acquire any assets,
or shares of any class of stock, of any corporation, savings
institution, bank or other business; (iv) liquidate, sell,
dispose of, or encumber any assets or acquire any assets, other
than in the ordinary course of its business consistent with past
practices; or (v) split, combine or reclassify any of its capital
stock or issue or authorize or propose the issuance of any other
securities in respect of, in lieu of or in substitution for,
shares of its capital stock;
(e) issue, deliver, award, grant or sell, or authorize or
propose the issuance, delivery, award, grant or sale of, any
shares of its capital stock of any class (including shares held
in treasury), any debt instrument having a right to vote or any
securities convertible into, or any rights, including options, to
acquire, any such shares, voting debt or convertible securities;
(f) initiate, solicit or encourage, or take any other
action to facilitate, any inquiries or the making of any proposal
which constitutes a Different Proposal, take any action in
furtherance of such inquiries or to obtain a Different Proposal,
or negotiate with any person in, or agree to or endorse any
Different Proposal, or authorize or permit any of its officers,
directors or employees or any investment banker, financial
advisor, accountant or other representative retained by it to
take any such action; except for such actions relating to a
Different Proposal which are reasonably considered by the Board
of Directors of BankBoynton, based upon consultation with outside
legal counsel, to be required in order to fulfill the Board of
Directors' fiduciary obligations. The mere receipt of an
unsolicited Different Proposal shall not by itself be deemed a
violation of this Section 6.2(f). "Different Proposal" means a
bona fide proposal to acquire the entire equity interest in
BankBoynton or substantially all of the assets of BankBoynton,
which is expressly conditioned upon the termination of this
Agreement and is made by a third party;
(g) propose or adopt any amendments to its Federal Stock
Charter or bylaws, except such amendments as may be required to
consummate the transactions contemplated by this Agreement;
(h) enter into an agreement in principle with respect to
any acquisition of a material amount of assets or securities or
any release or relinquishment of any material contract rights not
in the ordinary course of business;
(i) except in its fiduciary capacity, purchase any shares
of capital stock of Bankshares;
(j) change any of its methods of accounting in effect at
June 30, 1996, or change any of its methods of reporting income
or deductions for federal income tax purposes from those employed
in the preparation of the federal income tax returns for the
taxable year ending December 31, 1996, except as may be required
by law or generally accepted accounting principles;
(k) willfully take action which would or is reasonably
likely to (i) adversely affect the ability of either of
Bankshares or BankBoynton to obtain any necessary approvals of
governmental authorities required for the transactions
contemplated hereby; (ii) adversely affect BankBoynton's ability
to perform its covenants and agreements under this Agreement; or
(iii) result in any of the conditions to the Merger set forth in
Articles VIII and X not being satisfied;
(l) change in any material respect the lending, investment,
deposit, asset and liability management and other operating
policies concerning the business of BankBoynton, unless required
by law or regulation or, with respect to lending or depository
activities, unless such change is made in response to market
conditions;
(m) file any applications or make any contract with respect
to branching by BankBoynton (whether de novo or by purchase, sale
or relocation);
(n) form any new subsidiary or enter into or invest in any
partnership, joint venture or other business enterprise;
(o) purchase any debt securities or derivative securities;
(p) purchase any equity securities other than Federal Home
Loan Bank stock;
(q) discharge or satisfy any lien or encumbrance or pay any
material obligation or liability (absolute or contingent) other
than at scheduled maturity or in the ordinary course of business;
(r) sell or otherwise dispose of any loan, mortgage-backed
security or investment security except in the ordinary course of
business consistent with prudent banking practices and policies;
(s) modify or restructure the terms of any loans except in
the ordinary course of business consistent with prudent banking
practices;
(t) make, renew, increase, extend or purchase any loan
secured by commercial real estate or multi-family real estate,
land acquisition or development loan, commercial business loan,
residential loan an amount in excess of $250,000, or consumer
credit card loans, except to the extent that BankBoynton is
contractually obligated to do so as of the date hereof;
(u) make any capital expenditures in excess of $5,000
individually or $10,000 in the aggregate, other than pursuant to
binding commitments existing on the date hereof and other than
expenditures necessary to maintain existing assets in good
repair;
(v) acquire in any manner whatsoever (other than to realize
upon collateral for a defaulted loan) any business or entity; or
(w) fail to keep in full force and effect its insurance and
bonds as now carried;
(x) fail to notify Bankshares promptly of its receipt of
any letter, notice or other communication, whether written or
oral, from any regulatory authority advising that it is
contemplating issuing, requiring or requesting any agreement,
memoranda, understanding or similar undertaking, or order,
directive, or extraordinary supervisory letter;
(y) agree in writing or otherwise to do any of the
foregoing.
6.3. Report to Bankshares. BankBoynton will use its best
efforts to keep Bankshares fully informed concerning all trends
and developments of which it becomes aware that may have a
material effect upon the business, any properties or condition
(either financial or otherwise) of BankBoynton.
6.4. Breaches. BankBoynton shall, in the event it becomes
aware of the impending or threatened occurrence of any event or
condition which would cause or constitute a material breach (or
would have caused or constituted a breach had such event occurred
or been known prior to the date hereof) of any of its
representations or agreements contained or referred to herein,
give prompt written notice thereof to Bankshares and use its best
efforts to prevent or promptly remedy the same.
6.5. Supplement to Disclosure Schedule. BankBoynton will
promptly supplement or amend the BankBoynton Disclosure Schedule
with respect to any matter hereafter arising that, if existing or
occurring at the date of this Agreement, would have been required
to be set forth or described in the BankBoynton Disclosure
Schedule. A breach of a representation or warranty will not be
cured by a supplement or amendment to the BankBoynton Disclosure
Schedule, without the written consent of Bankshares and Fidelity.
6.6. Expenses. BankBoynton hereby agrees that if this
Agreement or the transactions contemplated hereby are terminated
pursuant to Sections 11.1 (b)(iii) or 11.1 (b)(iv) as a result of
a willful breach by BankBoynton, BankBoynton shall promptly (and
in any event within ten (10) business days after such
termination) pay all reasonable Expenses of Bankshares in an
amount not to exceed $50,000. For purposes of this Section 6.6,
the "Expenses of Bankshares" shall include all reasonable
out-of-pocket expenses of Bankshares (including all fees and
expenses of counsel, accountants, investment bankers, experts and
consultants to Bankshares and its Affiliates) incurred by it or
on its behalf in connection with the consummation of the
transactions contemplated by this Agreement.
6.7. Consents and Approvals. BankBoynton shall use its best
efforts to assist Bankshares in obtaining the consents and
approvals referenced in Section 8.5 hereof.
ARTICLE VII.
ADDITIONAL AGREEMENTS
7.1. BankBoynton Shareholders' Meeting. BankBoynton shall,
as soon as is reasonably practicable and in any event no later
than 60 days from the date hereof unless a longer time is
reasonably necessary for regulatory or bylaw purposes, call and
hold a meeting of its shareholders (the "BankBoynton
Shareholders' Meeting") to submit for shareholder approval this
Agreement. The Board of Directors of BankBoynton will recommend
that holders of BankBoynton Common Stock vote in favor of and
approve this Agreement at the BankBoynton Shareholders' Meeting.
7.2. Proxy Statement for BankBoynton Shareholders' Meeting.
If required under applicable law, for the purposes of holding the
BankBoynton Shareholders' Meeting, BankBoynton shall prepare an
appropriate proxy statement satisfying all applicable
requirements under state and federal law and regulations
thereunder (said proxy statement, together with any and all
amendments or supplements thereto, being herein referred to as
the "BankBoynton Proxy Statement").
7.3. Cooperation: Regulatory Approvals. The parties shall
cooperate, and shall cause each of their affiliates and
subsidiaries to cooperate, in the preparation and submission by
them, as promptly as reasonably practicable, of such
applications, petitions, and other documents and materials as any
of them may reasonably deem necessary or desirable to the OTS,
the FDIC, the Department of Justice ("DOJ"), other regulatory
authorities, and any other persons for the purpose of obtaining
any approvals or consents necessary to consummate the
transactions contemplated by the Agreement. Each party will have
the right prior to filing to review and comment on such
applications, petitions and other documents and materials and
shall furnish to the other copies thereof promptly after filing
or submission thereof. At the date hereof, none of the parties
is aware of any reason that the regulatory approvals required to
be obtained by it would not be obtained. The obligation to take
action as provided in this Section 7.3 shall not be construed as
including an obligation to accept any terms of or conditions to a
consent, authorization, order or approval of, or any exemption
by, any party that are unduly burdensome as reasonably determined
by the Boards of Directors of Bankshares or BankBoynton. In the
event of a restraining order or injunction which prevents the
Closing by reason of the operation of Section 10.2, each of the
parties hereto shall use its respective best efforts to cause
such order or injunction to be lifted and the Closing to be
consummated as soon as reasonably practicable.
7.4. Reports. Prior to the Effective Time, BankBoynton
shall prepare and file as and when required all BankBoynton
Reports. BankBoynton shall prepare such BankBoynton Reports so
that (a) they comply in all material respects with all of the
statutes, rules and regulations enforced or promulgated by the
regulatory authority with which they are filed and do not contain
any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary in order
to make the statements therein, in light of the circumstances
under which they were made, not misleading, and (b) with respect
to any BankBoynton Reports containing financial information of
the type included in the BankBoynton Financial Statements, the
financial information (i) is prepared in accordance with
generally accepted accounting principles and practices as
utilized in the BankBoynton Financial Statements applied on a
consistent basis, (ii) presents fairly the financial condition of
BankBoynton at the dates, and the results of operations and cash
flows for the periods, stated therein and (iii) in the case of
interim fiscal periods, reflects all adjustments, consisting only
of normal recurring items, subject to year-end audit adjustments.
All BankBoynton Reports shall be provided to Bankshares promptly
following the filing of such reports with the respective
regulatory authority.
7.5. Additional Agreements: Reasonable Efforts. Subject to
the terms and conditions of this Agreement, each of the parties
hereto agrees to use all reasonable efforts to take, or cause to
be taken, all action and to do, or cause to be done, all things
necessary, proper or advisable under applicable laws and
regulations to consummate and make effective the transactions
contemplated by the Agreement, subject to the appropriate vote of
the shareholders of BankBoynton described in Section 7.1,
including cooperating fully with the other party. In case at any
time after the Effective Time any further action is necessary or
desirable to carry out the purposes of this Agreement or to vest
Bankshares with full title to all properties, assets, rights,
approvals, immunities and franchises
of BankBoynton, the proper officers and directors of each party
to this Agreement shall take all such necessary action.
7.6. Release of Information. BankBoynton and Bankshares
agree that prior to making any public announcement with respect
to the transactions contemplated by this Agreement, each party
will consult with the other and will use its best efforts either
to agree upon the text of the proposed joint announcement to be
made by both parties or to obtain the other's approval (which
approval shall not be unreasonably withheld) of the text of an
announcement to be made solely on behalf of such party. In the
event that the parties do not ultimately agree on the text of any
proposed public announcement, no such disclosure shall be made
unless the party seeking to make an announcement is advised by
counsel that its failure to do so would be reasonably likely to
constitute a violation of law.
7.7. Access to Properties and Records; Confidentiality. (a)
BankBoynton shall permit Bankshares and its representatives
reasonable access to its properties, and shall disclose and make
available to them all books, papers and records relating to the
assets, stock ownership, properties, operations, obligations and
liabilities of BankBoynton, including, but not limited to, all
books of account (including the general ledger), tax records,
minute books of meetings of boards of directors (and any
committees thereof) and stockholders, organizational documents,
bylaws, material contracts and agreements, filings with any
regulatory authority, accountants' work papers, litigation files
(except to the extent necessary to preserve the attorney-client
privilege for the benefit of BankBoynton), plans affecting
employees, and any other business activities or prospects in
which BankBoynton may have a reasonable interest; BankBoynton
shall make its officers, employees and agents and authorized
representatives (including counsel and independent public
accountants) available to confer with Bankshares and its
representatives. Promptly following the execution of this
Agreement the parties hereto shall each identify a selected group
of their respective personnel that shall constitute a "Joint
Implementation Team" who shall be available to Fidelity and
BankBoynton, respectively, at reasonable times to provide
information and assistance in connection with Fidelity's
investigation of matters relating to BankBoynton as well as
consultation regarding the combined operation of the parties
following the Closing. The Fidelity personnel assigned to the
Joint Implementation Team shall be provided office space and
access to all records during normal business hours by BankBoynton
in order to facilitate the merger.
(b) All information furnished previously in connection with
the transactions contemplated by this Agreement or pursuant
hereto shall be treated as the sole property of the party
furnishing the information until consummation of the transactions
contemplated hereby and, if such transactions shall not occur,
the party receiving the information shall, upon request, return
to the party which furnished such information all documents or
other materials containing, reflecting or referring to such
information, shall use its best efforts to keep confidential all
such information, and shall not directly or indirectly use such
information for any competitive or other commercial purposes.
The obligation to keep such information confidential shall
continue from the date the proposed transactions are abandoned
but shall not apply to (i) any information which (1) the party
receiving the information can establish by convincing evidence
was already in its possession prior to the disclosure thereof by
the party furnishing the information; (2) was then generally
known to the public; or (3) became
known to the public through no fault of the party receiving the
information; or (ii) disclosures pursuant to a legal requirement
or in accordance with an order of a court of competent
jurisdiction, provided that the party which is the subject of any
such legal requirement or order shall use its best efforts to
give the other party at least ten business days prior notice
thereof.
7.8. Certain Policies. At the request of Bankshares,
BankBoynton shall, no earlier than five business days prior to
the Effective Time, (i) establish and take such reserves and
accruals as Bankshares shall reasonably request to conform, on a
mutually satisfactory basis, BankBoynton's loan, real estate,
accrual and reserve policies to Fidelity's policies and (ii)
establish and take such accruals, reserves and charges in order
to implement such policies in respect of severance costs, write-
off or write-down of various assets and other appropriate
accounting adjustments, and to recognize for financial accounting
purposes such expenses incurred in connection with the Merger,
provided, however, that BankBoynton shall not be obligated to
take any such action pursuant to this Section 7.8 unless and
until (x) Bankshares specifies its request in a writing delivered
to BankBoynton, and acknowledges that all conditions to the
obligations of Fidelity to consummate the Merger set forth in
Articles VIII and X have been waived (if available) or satisfied
and (y) BankBoynton acknowledges that the conditions to its
obligation to consummate the Merger set forth in Articles IX and
X have been waived (if available) or satisfied. BankBoynton
shall not be required to take any such action that is not
consistent with generally accepted accounting principles, or any
requirement applicable to BankBoynton by any bank regulatory
agency. The representations, warranties and covenants of
BankBoynton contained in this Agreement shall not be deemed to be
untrue or breached in any respect for any purpose as a
consequence of any action undertaken on account of Sections 7.11
and shall not constitute grounds for termination of the Agreement
by Bankshares.
ARTICLE VIII.
CONDITIONS TO THE OBLIGATIONS OF BANKSHARES
The obligations of Bankshares under this Agreement to cause
the transactions contemplated herein to be consummated shall be
subject to the satisfaction or written waiver by Bankshares or
cure by BankBoynton pursuant to the provisions of Section
11.1(b)(i) of the following conditions:
8.1. No Material Adverse Effect. Except as disclosed in
Schedule 4.5 to the BankBoynton Disclosure Schedule and except
for the transactions contemplated hereby and changes attributable
to or resulting from any changes in law, obligation, or generally
accepted accounting principles, changes in interest rates,
economic, financial or market conditions affecting the banking or
thrift industry generally or changes that may occur as a
consequence of actions or inactions that either party hereto is
expressly obligated to take under this Agreement there shall not
have been any Material Adverse Effect, or discovery of a
condition or the occurrence of any event that has or is likely to
result in such a Effect, in the financial condition, results of
operations or business of BankBoynton from March 31, 1997 to the
Closing Date; provided, however, that there shall not have
occurred a Material Adverse Effect for purposes of this Section
8.1 if such action that would have given rise to
a Material Adverse Effect was taken by BankBoynton at the request
of Bankshares pursuant to Section 7.8 of this Agreement. Any
changes in governing law or regulations affecting BankBoynton,
Fidelity and Bankshares shall not be deemed a Material Adverse
Effect.
8.2. Representations and Warranties. Each of the
representations and warranties by BankBoynton contained in this
Agreement shall be true and correct in all material respects (or
where any statement in a representation or warranty expressly
contains a standard of materiality, such statement shall be true
and correct in all respects taking into consideration the
standard of materiality contained therein) at, or as of, the date
of this Agreement and (except to the extent such representation
speaks as of an earlier date) and as of any date subsequent,
until and including the Closing Date (except as otherwise
contemplated or permitted by this Agreement) as though such
representations and warranties were made on and as of said date.
8.3. Performance and Compliance. BankBoynton shall have
performed or complied in all material respects with all covenants
and agreements required by the Agreements to be performed and
satisfied by it on or prior to the Closing Date.
8.4. No Proceeding or Litigation. On the Closing Date, no
suit, action or proceeding shall be pending or overtly
threatened, and no liability or claim shall have been asserted
against BankBoynton involving any of the assets, properties,
business or operations of BankBoynton, which would reasonably be
expected to have a Material Adverse Effect.
8.5. Consents Under Agreements. Bankshares shall have
received the consent or approval of each person whose consent or
approval shall be required in order to permit consummation of the
Merger under any loan or credit agreement, note, mortgage,
indenture, lease or other agreement or instrument to which
BankBoynton is a party or to which its respective property is
subject, except those for which failure to obtain such consents
and approvals would not, individually or in the aggregate, have a
Material Adverse Effect on Bankshares on a consolidated basis,
whether prior to (if applicable) or following the consummation of
the transactions contemplated hereby.
8.6. No Amendments to Resolutions. Neither the Board of
Directors of BankBoynton nor any committee thereof shall have
amended, modified, rescinded or repealed the resolutions adopted
by such Board of Directors with respect to the Agreement or shall
have adopted any other resolutions in connection with the
Agreement and the transactions contemplated hereby which are
inconsistent with such resolutions, except resolutions adopted
consistent with the express rights of BankBoynton under the
Agreement.
8.7. Certificate of BankBoynton Officers. BankBoynton shall
have furnished Bankshares a certificate, signed by its Chief
Executive Officer and its Chief Financial Officer, dated the
Closing Date, to the effect, based on his knowledge, that the
conditions described in Sections 8.1, 8.2, 8.3, 8.4, 8.5, and
8.6. of this Agreement have been fully satisfied.
8.8. Corporate Proceedings. All action required to be
taken by, or on the part of BankBoynton to authorize the
execution, delivery and performance of this Agreement and the
consummation of the transactions contemplated by this Agreement
shall have been duly and validly taken by BankBoynton.
8.9.(a)Legal Opinion. Bankshares shall have received an
opinion or opinions, dated the Closing Date from legal counsel to
BankBoynton, reasonably acceptable to Bankshares and Fidelity, to
the effect that:
(i) BankBoynton is a federally chartered stock savings
bank duly incorporated and in existence under the laws of the
United States of America;
(ii) BankBoynton has the corporate power and authority
to carry on its business and to own, lease and operate its
properties as currently conducted and to consummate the merger of
BankBoynton and Fidelity;
(iii) this Agreement has been duly authorized and
approved by BankBoynton's Board of Directors and BankBoynton's
shareholders and this Agreement constitutes the valid and binding
obligation of BankBoynton in accordance with its terms subject to
applicable bankruptcy, insolvency, reorganization, moratorium,
receivership or other similar laws relating to or affecting
creditors' rights generally and subject to general principles of
equity;
(iv) Neither the execution and delivery of this
Agreement nor the consummation of the merger of BankBoynton into
Fidelity, with or without the giving of notice or the lapse of
time, or both, will (i) violate any provision of the Charter or
Bylaws of BankBoynton; or (ii) to the knowledge of such counsel,
violate, any federal banking statute, rule or regulation
applicable to BankBoynton, which would have a Material Adverse
Effect on the financial condition, assets, liabilities, or
business of BankBoynton; to the knowledge of such counsel, no
consent, approval, authorization, order, registration or
qualification of or with any court, regulatory authority or other
governmental body, other than as specifically contemplated by
this Agreement is required for the consummation by BankBoynton of
the Merger;
(v) except as disclosed pursuant to Schedule 4.9 of
the BankBoynton Disclosure Schedule or as disclosed in such legal
opinion, to counsel's knowledge, there are no actions, suits,
proceedings or investigations of any nature pending or threatened
that challenge the validity or legality of the Merger or which
seek or threaten to restrain, enjoin or prohibit (or obtain
substantial damages in connection with) the consummation of the
Merger.
(vi) to the knowledge of such counsel and except as is
set forth in Schedule 4.9 of the BankBoynton Disclosure Schedule
or as disclosed in such legal opinion, there is no litigation or
governmental investigation pending or threatened in writing
against or relating to BankBoynton or the Subsidiary.
Such opinion may (i) expressly rely as to matters of fact
upon certificates furnished by appropriate officials of
BankBoynton or appropriate governmental officials, (ii) be
limited to federal law, and (iii) incorporate, be guided by, and
be interpreted in accordance with, the Legal Opinion Accord of
the ABA Section of Business Law (1991).
(b) Securities Letter. BankBoynton shall have delivered to
Bankshares, a letter, dated the Effective Time, of counsel to
BankBoynton, reasonably acceptable to Bankshares and Fidelity, in
form and substance reasonably satisfactory to Bankshares and its
counsel, to the effect that such counsel has no reason to believe
that the Proxy Statement, as it may be amended or supplemented,
contained an untrue statement of a material fact or omitted any
material fact required to be stated therein or necessary in order
to make the statements therein, in light of the circumstances in
which they were made, not misleading, as of the time of the
BankBoynton shareholder meeting, provided that no statement need
be made as to any financial statements and other financial or
statistical data or as to materials relating to or supplied by
Bankshares or Fidelity or any of their respective subsidiaries
for inclusion in the Proxy Statement.
ARTICLE IX.
CONDITIONS TO THE OBLIGATIONS OF BANKBOYNTON
The obligations of BankBoynton under this Agreement to cause
the transactions contemplated herein to be consummated shall be
subject to the satisfaction or written waiver by BankBoynton of
the following conditions:
9.1. Representations and Warranties. Each of the
representations and warranties of Bankshares and Fidelity
contained in this Agreement shall be true and correct in all
material respects (or where any statement in a representation or
warranty expressly contains a standard of materiality, such
statement shall be true and correct in all respects taking into
consideration the standard of materiality contained therein) at,
or as of, the date of this Agreement and (except to the extent
such representation speaks as of an earlier date) and as of any
date subsequent, until and including the Closing Date (except as
otherwise contemplated or permitted by this Agreement) as though
such representations were made on and as of said date.
9.2. Performance and Compliance. Bankshares shall have
performed or complied in all material respects with all covenants
and agreements required by this Agreement to be performed and
satisfied by it on or prior to the Closing Date.
9.3. Corporate Proceedings. All action required to be taken
by, or on the part of Bankshares and Fidelity to authorize the
execution, delivery and performance of this Agreement and the
consummation of the transactions contemplated by this Agreement
shall have been duly and validly taken by Bankshares and
Fidelity.
9.4. Certificate of Bankshares Officers. Bankshares shall
have furnished to BankBoynton a certificate, signed by its Chief
Executive Officer and its Chief Financial Officer and dated the
Closing Date, to the effect, based on their best knowledge, that
the conditions described in Sections 9.1, 9.2 and 9.3 of this
Agreement have been satisfied.
9.5.(a)Legal Opinion. BankBoynton shall have received an
opinion, dated as of the Closing Date, from ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, P.C., counsel for Bankshares to the effect
that:
(i) Bankshares is a corporation duly organized,
validly existing and in good standing under the laws of the State
of Delaware, and Fidelity is a savings bank organized under the
laws of the United States;
(ii) Bankshares has the corporate power and authority
to carry on its business as now conducted, to own, lease and
operate its properties and to consummate the transactions
contemplated by the Agreement;
(iii) the Agreement has been duly authorized,
executed and delivered by Bankshares and Fidelity and constitutes
the valid and binding obligation of Bankshares and Fidelity in
accordance with its terms subject to applicable bankruptcy,
insolvency, reorganization, moratorium, receivership or other
similar laws relating to or affecting creditors' rights generally
and subject to general principles of equity;
(iv) to counsel's actual knowledge, all corporate acts
and other proceedings required to be taken by or on the part of
Bankshares and Fidelity to consummate the transactions
contemplated by the Agreement have been properly taken; neither
the execution and delivery of the Agreement, nor the consummation
of the transactions contemplated hereby and thereby, with and
without the giving of notice or the lapse of time, or both, will
violate any provision of the Certificate of Incorporation or
Bylaws of Bankshares or Charter and Bylaws of Fidelity;
(v) except as disclosed in such opinion, to the actual
knowledge of such counsel there are no actions, suits,
proceedings or investigations (public or private) of any nature
pending or threatened that challenge the validity or propriety of
the transactions contemplated by the Agreement or which seek or
threaten to restrain, enjoin or prohibit or to obtain substantial
damages in connection with the consummation of such transactions;
and
(vi) all regulatory and governmental approvals and
consents which are necessary to be obtained by Bankshares and its
subsidiaries to permit the execution, delivery and performance of
the Agreement have been obtained.
Such counsel shall also state that it has no reason to
believe that the information relating to Bankshares and Fidelity
provided to BankBoynton for inclusion in the BankBoynton Proxy
Statement, as of the date of the Proxy Statement and up to and
including the meeting of stockholders contained
an untrue statement of a material fact or omitted to state a
material fact necessary to make the statements therein, in light
of the circumstances under which they were made, not misleading.
9.6. Opinion of Financial Advisor. BankBoynton shall have
received on or before the date on which the proxy statement or
other similar document is to be mailed to holders of BankBoynton
Common Stock the written opinion of its investment or financial
advisor to the effect that the merger consideration payable to
BankBoynton's shareholders pursuant to the Merger is fair from a
financial point of view to the shareholders of BankBoynton.
ARTICLE X
CONDITIONS TO THE OBLIGATIONS OF ALL PARTIES
In addition to the provisions of Articles VIII and IX
hereof, the obligations of Bankshares and BankBoynton to cause
the transactions contemplated herein to be consummated, shall be
subject to the satisfaction or written waiver by both Bankshares
and BankBoynton of the following conditions:
10.1. Governmental Approvals. The parties hereto shall
have received all necessary approvals of the transactions
contemplated by the Agreement from governmental agencies and
authorities, including, without limitation, those of the OTS, the
FDIC and, if necessary, the DOJ, and each of such approvals shall
remain in full force and effect and all statutory waiting periods
in connection therewith shall have expired at the Closing Date
and such approvals and the transactions contemplated thereby
shall not have been contested by any federal or state
governmental authority nor by any other third party by formal
proceeding. Provided, however, that no approval or consent
referred to in this Section 10.1 shall be deemed to have been
received by Bankshares if it shall include any term, condition or
requirement that, individually or in the aggregate, (i) would
result in a Material Adverse Effect on the results, business,
operations, assets, or financial condition of Bankshares on a
consolidated basis, or (ii) would reduce the economic or business
benefits of the transactions contemplated by this Agreement to
Bankshares in so material a manner that Bankshares, in its
reasonable judgment, would not have entered into this Agreement;
provided further, that no condition or requirement which does no
more than subject BankBoynton, Fidelity or Bankshares to legal
requirements generally applicable to entities and transactions of
the same type as a matter of law or regulation shall be deemed to
affect materially the economic benefits of the transactions
contemplated by this Agreement. Bankshares shall notify
BankBoynton in writing of its intention to terminate this
Agreement pursuant to Section 11.1(b) hereof as a result of the
receipt by Bankshares of any such term, condition or requirement
within five business days of the written receipt of such term,
condition or requirement, or the condition set forth in the
second sentence of this Section 10.1 shall be deemed waived by
Bankshares.
10.2. No Injunctions or Restraints. No suit, action or
proceeding shall be pending or overtly threatened before any
court or other governmental agency by the federal or any state
government or private individual in which it is sought to
restrain or prohibit the consummation of the Merger and no
temporary restraining order, preliminary or permanent injunction
or other order issued by any
court of competent jurisdiction or other legal restraint or
prohibition preventing the consummation of the Merger shall be in
effect.
10.3. BankBoynton Shareholder Approval. This Agreement
shall have been duly approved by the requisite affirmative vote
of the shareholders of BankBoynton as contemplated by Section 7.1
hereof.
10.4 Corporate Proceedings. The obligations of the parties
to this Agreement required to be performed at or prior to the
Closing Date shall have been duly performed and complied with in
all material respects. All action required to be taken by, or on
the part of, the parties to this Agreement to authorize the
execution, delivery and performance of this Agreement, and the
consummation of the transactions contemplated hereby, shall have
been duly and validly taken by the parties hereto.
ARTICLE XI.
TERMINATION
11.1. Reasons for Termination. This Agreement may be
terminated and the Merger abandoned at any time before the
Closing Date, whether before or after the approval or adoption of
the Agreement by the shareholders of BankBoynton:
(a) By mutual written consent of the Board of Directors of
Bankshares and the Board of Directors of BankBoynton;
(b) By written notice from Bankshares to BankBoynton if:
(i) any condition set forth in Article VIII of this
Agreement shall have become impossible to substantially satisfy
at any time or has not been substantially satisfied or waived in
writing, or cured by BankBoynton within 30 days of receipt of
written notice from Bankshares of such failure by BankBoynton; or
(ii) any condition set forth in Article X of this
Agreement shall have become impossible to substantially satisfy
at any time or has not been substantially satisfied or waived in
writing, provided, however, Bankshares shall not have the right
to terminate this Agreement pursuant to this Section 11.1(b)(ii)
if any condition set forth in a regulatory approval received in
connection with Section 10.1 hereof was not met due to the
failure of Bankshares to perform or observe the covenants and
agreements set forth in this Agreement;
(iii) any warranty or representation as set forth
in Article IV hereof made by BankBoynton shall be discovered to
be or to have become untrue or incorrect to the extent such
representation and warranty is required to be satisfied pursuant
to Section 8.2, or where any statement in a representation or
warranty expressly includes a standard of materiality, such
statement
shall be discovered to be or to have become untrue or incorrect
in any respect taking into consideration the standard of
materiality contained therein, in either case where any such
breach has not been cured within thirty (30) days following
receipt by BankBoynton of written notice of such discovery;
(iv) BankBoynton shall have breached one or more
provisions of the Agreement in any material respect considering
all such breaches in the aggregate, and to the extent the breach
fails to meet the standard set forth in Section 8.3, where such
breach has not been cured within thirty (30) days following
receipt by BankBoynton of written notice of such breach; or
(c) By written notice from BankBoynton to Bankshares, which
has been approved by the Board of Directors of BankBoynton, if
(i) any condition set forth in Article IX of this
Agreement has not been substantially satisfied or waived in
writing; or
(ii) any condition set forth in Article X of this
Agreement has not been substantially satisfied or waived in
writing; provided, however, BankBoynton shall not have the right
to terminate this Agreement pursuant to this Section 11.1(c)(ii)
if any condition set forth in a regulatory approval received in
connection with Section 10.1 hereof was not met due to the
failure of BankBoynton to perform or observe the covenants and
agreements set forth in this Agreement, or
(iii) any warranty or representation as set forth
in Article III hereof made by Bankshares shall be discovered to
be or to have become untrue or incorrect to the extent such
representation and warranty is required to be satisfied pursuant
to Section 9.1, in such case where any such breach has not been
cured within thirty (30) days following receipt by Bankshares of
written notice of such discovery; or
(iv) Bankshares shall have breached one or more
provisions of the Agreement in any material respect considering
all such breaches in the aggregate, and to the extent the breach
fails to meet the standard in Section 9.2, where such breach has
not been cured within thirty (30) days following receipt by
Bankshares of written notice of such breach.
(d) By the Board of Directors of Bankshares or BankBoynton
at any time after the BankBoynton Shareholders' Meeting as
contemplated in Section 7.1 if the shareholders of BankBoynton
have not approved this Agreement by the requisite affirmative
vote.
(e) By the Board of Directors of Bankshares or BankBoynton
if the Merger has not been consummated on or before June 30,
1998.
11.2 Special Termination Rights Pending Completion of
Fidelity Investigation. Notwithstanding any investigation made
by or information known to Fidelity prior to the date hereof and
notwithstanding anything to the contrary herein, and in
recognition of the fact that Fidelity, as
of the date hereof, has not had an opportunity to complete its
due diligence review of BankBoynton, in addition to the
termination rights set forth in Section 11.1, Bankshares and
Fidelity shall have the following rights: at any time after the
date of this Agreement through 6:00 p.m. on a date 21 days after
the date hereof, Bankshares and Fidelity shall have the right to
continue their due diligence investigation of BankBoynton and
shall further have the right to terminate this Agreement if, in
their discretion, they are not satisfied with the results of the
due diligence investigation, by written notice to BankBoynton
pursuant to Section 12.10. Failure to exercise such right shall
have no effect on Bankshares or Fidelity's right to terminate
pursuant to Section 11.1.
11.3. Effect of Termination. In the event of
termination of this Agreement by either BankBoynton or Bankshares
as provided in Section 11.1 and 11.2, this Agreement shall
forthwith become void and have no effect except with respect to
Sections 5.6, 5.8, 6.6, 7.7 and 12.2 hereof which shall survive
termination of this Agreement. 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
wilful breach of any provision of the Agreement.
ARTICLE XII.
MISCELLANEOUS
12.1. Nonsurvival of Representations, Warranties and
Agreements. None of the representations, warranties, covenants
and agreements in this Agreement or in any instrument delivered
pursuant to this Agreement shall survive the Effective Time,
except for the covenants and agreements which by their terms are
contemplated to be performed after the Effective Time.
12.2. Expenses. (a) Except as otherwise provided
herein, all expenses incurred by Bankshares and BankBoynton in
connection with or related to the authorization, preparation and
execution of the Agreement, the solicitation of shareholder
approvals and all other matters related to the closing of the
transactions contemplated thereby, including, without limitation
of the generality of the foregoing, all fees and expenses of
agents, representatives, counsel and accountants employed by
either such party or its Affiliates, shall be borne solely and
entirely by the party that has incurred the same.
(b) BankBoynton also hereby agrees to pay Bankshares, and
Bankshares shall be entitled to payment of, a fee (the "Fee") of
$150,000, upon the occurrence of any of the following events on
or before the earlier of the date this Agreement is terminated or
June 30, 1998: (i) if BankBoynton's Board recommends a Proposal
other than this Agreement; or (ii) if BankBoynton's Board
withdraws or modifies its recommendation of approval of this
Agreement; or (iii) if BankBoynton shareholders do not approve
the Agreement; or (iv) if BankBoynton enters into an agreement to
be acquired by any other party; or (v) if BankBoynton both (1)
fails to receive the opinion of its financial advisor specified
in Section 9.6. to this Agreement that the transaction is fair to
BankBoynton shareholders and (2) the Merger is not consummated.
Such payment shall be made to Bankshares in immediately available
funds within five business days after the occurrence of an event
set forth above.
12.3. Waivers: Amendments. At any time prior to the
Closing Date, either Bankshares, by action taken by its Board of
Directors, or any committee or officers thereunto authorized, or
BankBoynton, by action taken by its Board of Directors, or any
committee or officers thereunto authorized, may waive the
performance of any of the obligations of the other or waive
compliance by the other with any of the covenants or conditions
contained in the Agreement or agree to the amendment or
modification of the Agreement by an agreement in writing executed
in the same manner as the Agreement; provided, however, that
after the favorable vote by the shareholders of BankBoynton
pursuant to Section 7.1 of this Agreement any such action shall
be taken only if, in the opinion of BankBoynton's Board of
Directors, such waiver, amendment or modification will not have a
Material Adverse Effect on the benefits intended under the
Agreement for the shareholders of BankBoynton and will not
require resolicitation of any proxies from such shareholders.
12.4. Assignment: Parties in Interest. The Agreement
shall be binding upon and inure solely to the benefit of the
parties hereto and their respective successors and assigns, but
shall not be assigned by the parties hereto, by operation of law
or otherwise. Nothing in the Agreement, express or implied, is
intended to confer upon any third party any rights or remedies of
any nature whatsoever under or by reason of the Agreement.
12.5. Entire Agreement. This Agreement supersedes any
other agreement, whether written or oral, that may have been made
or entered into by BankBoynton or Bankshares or by any officer or
officers of such parties relating to the acquisition of the
business or the capital stock of BankBoynton by Bankshares. The
aforementioned agreements constitute the entire agreement by the
respective parties, and there are no agreements or commitments
except as set forth herein and therein.
12.6. Captions and Counterparts. The captions in this
Agreement are for convenience only and shall not be considered a
part of or affect the construction or interpretation of any
provision of this Agreement. This Agreement may be executed in
several counterparts, each of which shall constitute one and the
same instrument.
12.7. Certain Definitions. For purposes of this
Agreement, the term:
(a) "Affiliate" means a person that directly or indirectly,
through one or more intermediaries, controls, is controlled by,
or is under common control with, another person.
(b) "Material Adverse Effect," with respect to a person,
means a material adverse effect upon (A) the business, assets,
financial condition or results of operations, in each case, of
BankBoynton or its Subsidiary, either individually or taken as a
whole, except for any material adverse effect caused by any
change occurring after the date hereof in general economic
conditions applied to BankBoynton, Bankshares and Fidelity,
generally or any federal or state law rule or regulation or in
GAAP, which change affects federally chartered savings banks
generally, or (B) the ability of such person to consummate the
transactions contemplated by this Agreement.
(c) "BankBoynton Reports" shall mean all reports,
registrations and statements, together with any amendments
required to be made with respect thereto, that were and are
required to be filed with the OTS, the FDIC, and any other
applicable state securities or savings institution authorities.
(d) "to the knowledge of Bankshares" or "to the best
knowledge of Bankshares" shall mean the actual knowledge of any
member of the Board of Directors or of any senior officer of
Bankshares or Fidelity.
(e) "to the knowledge of BankBoynton" or "to the best
knowledge of BankBoynton" shall mean the actual knowledge of any
member of the Board of Directors or of any senior officer of
BankBoynton.
(f) "material" shall, for the purpose of determining
whether BankBoynton has complied with its representations and
warranties, and with its covenants, be quantified as any amount
in excess of $10,000.
12.8. Enforcement of the Agreement. The parties hereto
agree that irreparable damage would occur in the event that any
of the provisions of the Agreement were not performed in
accordance with their specific terms or were otherwise breached.
It is accordingly agreed that the parties hereto will be entitled
to an injunction or injunctions to prevent breaches of the
Agreement and to enforce specifically the terms and provisions
hereof only in the courts of the State of Florida located in Palm
Beach County or in the United States District Court for the
Southern District of Florida, this being in addition to any other
remedy to which they are entitled at law or in equity. The
parties consent to personal jurisdiction in the courts described
in this section for the purposes of all actions, and waive all
objections to venue and the right to assert that a court chosen
under this section is improper based on the doctrine of forum
non-conveniens. If litigation is brought concerning this
Agreement, the prevailing party shall be entitled to an award of
attorneys' fees and costs, including without limitation,
attorneys' fees in costs incurred in bookkeeping, administrative
or appellate proceedings, THE PARTIES KNOWINGLY AND
INTENTIONALLY WAIVE THE RIGHT EITHER OF THEM HAS TO TRIAL BY
JURY. THE PARTIES AGREE THIS PROVISION IS A MATERIAL INDUCEMENT
TO THE PARTIES ENTERING INTO THIS AGREEMENT.
12.9. Governing Law. The Agreement shall be construed
and interpreted in accordance with the laws of the State of
Florida, except to the effect that Federal Law applies, without
regard to the conflicts of laws rules.
12.10. Notices. All notices given hereunder shall be in
writing and shall be mailed by first class mail, postage prepaid,
or sent by facsimile transmission or by nationally recognized
overnight delivery service, addressed as follows:
(a) If to Bankshares or Fidelity to:
Fidelity Bankshares, Inc.
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Facsimile No. (▇▇▇) ▇▇▇-▇▇▇▇
With A Copy To:
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, P.C.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇, Esq.
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
Facsimile No. (▇▇▇) ▇▇▇-▇▇▇▇
(b) If to BankBoynton to:
BankBoynton, A Federal Savings Bank
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Facsimile No. (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
Brackett, Sned, ▇▇▇▇▇, D'Angio, ▇▇▇▇▇▇ &
Farach, P.A.
▇.▇. ▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇, Esq.
Facsimile No. (▇▇▇) ▇▇▇-▇▇▇▇
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed as of the date first above written.
ATTEST: FIDELITY BANKSHARES, INC.
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Secretary President and Chief
Executive Officer
ATTEST: FIDELITY FEDERAL SAVINGS BANK
OF FLORIDA
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Secretary President and Chief
Executive Officer
ATTEST: BANKBOYNTON, A FEDERAL SAVINGS BANK
By: ------------------------- By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
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Chairman of the Board
EXHIBIT 1
August 18, 1997
Fidelity Bankshares, Inc.
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Re: Agreement and Plan of Merger by and among Fidelity
Bankshares, Inc., Fidelity Federal Savings Bank of
Florida and BankBoynton, a Federal Savings Bank
Ladies and Gentlemen:
The undersigned understands that Fidelity Bankshares, Inc.
("Bankshares") and Fidelity Federal Savings Bank of Florida
("Fidelity") are considering entering into an Agreement and Plan
of Merger, to be dated as of the date hereof (the "Merger
Agreement"), with BankBoynton, a Federal Savings Bank
("BankBoynton") and providing for the merger of BankBoynton with
and into Fidelity (the "Merger"). In consideration of the
substantial expenses and other obligations Bankshares and
Fidelity will incur in connection with the transactions
contemplated by the Merger Agreement and in order to induce
Bankshares and Fidelity to execute the Merger Agreement and to
proceed to incur such expenses, the undersigned agrees and
undertakes as follows:
1. The undersigned represents and warrants that he is
the beneficial owner of not less than ________ shares (the
"Shares") of common stock, par value $1.00 per share (the "Common
Stock"), of BankBoynton. The Shares are held of record by the
undersigned directly. [Confirm]
2. The undersigned will vote or caused to be voted
for approval of the Merger all shares of common stock that, on
the record date therefor, are beneficially owned by the
undersigned or with respect to which the undersigned has the
power to vote.
3. The undersigned agrees not to, directly or
indirectly, sell, transfer, pledge, assign or otherwise dispose
of, or enter into any contract, option, commitment or other
arrangement or understanding with respect to the sale, transfer,
pledge, assignment or other disposition of, any of the Shares
(including as part of a transaction involving the sale of
BankBoynton). In the case of any transfer by operation of law,
this letter agreement shall be binding upon and inure to the
transferee. Any transfer or other disposition in violation of
the terms of this paragraph 2 shall be null and void.
4. The undersigned agrees that he shall not, and
shall direct and use all reasonably efforts to cause his
employees, agents and representatives (including, without
limitation, any investment banker, attorney or accountant
retained by him) not to, (a) initiate, solicit or encourage,
directly or indirectly, any inquiries with respect to, or the
making or implementation of, any Different Proposal (as defined
in the Merger
Agreement) or engage in any discussions or negotiations with, or
provide any confidential information or data to, any person
relating to any such Different Proposal; provided that, if the
undersigned is not otherwise in violation of this paragraph 5,
the undersigned may furnish or cause to be furnished information
and may participate in such discussions or negotiations directly
or through his representatives following a determination by the
Board of Directors of BankBoynton (other than the undersigned and
any of his affiliates who are members of such Board) that it is
required to take the actions contemplated by the proviso to
Section 6.2(f) of the Merger Agreement.
5. As a stockholder of BankBoynton, the undersigned
shall cooperate with Bankshares and Fidelity in (a) preparing and
filing documentation, (b) effecting applications, notices,
petitions, filings and other documents and (c) obtaining permits,
consents, orders, approvals and authorizations necessary to make
effective the Merger and the other transactions contemplated by
the Merger Agreement and, except as otherwise permitted under
this letter agreement or the Merger Agreement, shall not
willfully take, or cause to be taken, any action that could
significantly impair the prospects of completing the Merger in
accordance with the Merger Agreement.
6. This letter agreement shall terminate at the time
of the termination of the Merger Agreement, except that any such
termination shall be without prejudice to your rights arising out
of any breach of any agreement or representation contained
herein.
This letter agreement constitutes the complete understanding
between the undersigned and Bankshares and Fidelity concerning
the subject matter hereof. This Letter Agreement shall be
governed by, and construed in accordance with, the laws of the
State of Florida applicable to agreements made and to be
performed entirely within such state.
Very truly yours,
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/s/ ▇▇▇▇ ▇▇▇▇▇
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Accepted:
FIDELITY BANKSHARES, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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Chief Executive Officer
FIDELITY FEDERAL SAVINGS BANK OF FLORIDA
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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Chief Executive Officer
EXHIBIT 2
PLAN OF MERGER
OF
BANKBOYNTON, A FEDERAL SAVINGS BANK
INTO
FIDELITY FEDERAL SAVINGS BANK OF FLORIDA
Plan of Merger, dated as of the ----- day of August, 1997 by
and between Fidelity Federal Savings Bank of Florida, a savings
bank chartered under the laws of the United States of America
("Fidelity" or the "Resulting Bank"), and BankBoynton, a Federal
Savings Bank, a savings bank chartered under the laws of the
United States of America ("BankBoynton"), such institutions being
sometimes hereinafter called the "Constituent Associations" or,
individual, "Constituent Association".
WITNESSETH:
Whereas, all of the outstanding capital stock of Fidelity is
owned directly by Fidelity Bankshares, Inc. ("Bankshares");
Whereas, Bankshares, Fidelity and BankBoynton, have entered
into an Agreement and Plan of Merger ("Merger Agreement"),
pursuant to which BankBoynton shall be merged with and into
Fidelity.
Now, Therefore, in consideration of the mutual covenants,
agreements and provisions hereinafter contained, and for the
purpose of prescribing the terms and conditions of said merger
and mode of carrying the same into effect, Fidelity and
BankBoynton have agreed and do hereby agree and covenant as
follows:
1. Plan of Merger. The merger provided for herein shall
be effected as follows:
(a) The execution and delivery of this Agreement by
Fidelity and BankBoynton shall have been duly approved by at
least a two-thirds ( ) vote of the Board of Directors of
Fidelity and BankBoynton, respectively.
(b) The Office of Thrift Supervision or any successor
thereto ("OTS") shall have approved the merger.
(c) The merger shall be approved by the shareholder of
Fidelity and by the shareholders of BankBoynton.
(d) Thereupon BankBoynton shall be merged with and
into Fidelity.
2. Effect of Merger. When this Plan of Merger shall
become effective in accordance with the laws and regulations of
the United States of America:
(a) The separate existence of BankBoynton shall cease
and BankBoynton shall be merged into Fidelity, which shall be the
savings bank resulting from the merger and shall continue its
existence under the name "Fidelity Federal Savings Bank of
Florida." The date on which such merger becomes effective is
hereinafter called the "Effective Time".
(b) The Charter and Bylaws of Fidelity, as then in
effect, shall remain in effect and shall become the Charter and
Bylaws of the Resulting Bank.
(c) The Directors and Officers of Fidelity immediately
prior to the Effective Time shall be the directors and officers
of the Resulting Bank after the Effective Time and shall continue
in office until their successors are duly elected or otherwise
duly selected.
(d) All savings accounts of BankBoynton shall be and
become savings accounts in the Resulting Bank without change in
their respective terms, maturity, minimum required balances or
withdrawal value. Each savings account of BankBoynton shall, as
of the Effective Time, be considered, for purpose of interest
declared by the Resulting Bank thereafter, as if it had been a
savings account of the Resulting Bank at the time said savings
account was opened in BankBoynton and at all times thereafter
until such account ceases to be a savings account of the
Resulting Bank. Appropriate evidence of savings account
ownership interest in the Resulting Bank shall be provided, as
necessary, after consummation of the merger by the Resulting Bank
to each savings account holder of BankBoynton.
(e) All savings accounts of Fidelity prior to
consummation of the merger shall continue to be savings accounts
in the Resulting Bank after consummation of the merger without
any change whatsoever in any of the provisions of such savings
accounts, including, without limitation, their respective terms,
maturity, minimum required balances or withdrawal value.
(f) All of the assets, properties, obligations and
liabilities of every kind and character, real, personal and
mixed, tangible and intangible, choses in action, rights, and
credits then owned by either Fidelity or BankBoynton, or which
would inure or be subject to either of them, shall immediately by
operation of law and without any conveyance or transfer and
without any further act or deed, be vested in and become the
property and obligations of the Resulting Bank which shall have,
hold and enjoy the same in its own right as fully and to the same
extent as the same were possessed, held and enjoyed by Fidelity
and BankBoynton immediately prior to the consummation of the
merger. The Resulting Bank shall be deemed to be and shall be a
continuation of the entity and identity both of Fidelity and of
BankBoynton and the rights and obligations of Fidelity and of
BankBoynton shall remain unimpaired; and the Resulting Bank, upon
the consummation of the merger shall succeed to all of such
rights and obligations and the duties and liabilities connected
therewith.
(g) The main office of Fidelity at ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, shall be the main office of the
Resulting Bank and branch offices thereof will be located at the
locations set forth in Exhibit 1 hereof.
3. Disposition of Shares
(a) All of the shares of BankBoynton capital stock
issued and outstanding on the Effective Time, and all rights in
respect thereof, shall be canceled.
(b) The shares of capital stock of Fidelity
outstanding immediately prior to consummation of the merger shall
constitute the only outstanding shares of capital stock of the
Resulting Bank following consummation of the merger.
4. Effective Time of Merger. The merger provided for
herein shall become effective on the
date of endorsement of the Articles of Combination by the
Secretary of the OTS (the "Effective Time"). The merger shall
not be effective unless and until approved by the OTS.
5. Action by Shareholders. The shareholders of Fidelity
and BankBoynton, respectively, shall take appropriate action to
vote to approve this Plan of Merger.
6. Condition of Closing. The obligations of the parties
hereto to consummate the transactions contemplated herein shall
be subject to approval by the OTS and fulfillment or waiver (as
may be applicable) of the conditions set forth in Articles VIII,
IX and X of the Merger Agreement.
7. Amendment. This Agreement may be amended or modified
at any time by a written instrument signed by Fidelity and
BankBoynton.
8. Paragraph Headings. The paragraph headings in this
Plan of Merger are for convenience only; they form no part of
this Plan of Merger and shall not affect its interpretation.
9. Governing Law. This Plan of Merger shall be governed
by the laws of the State of Florida, except to the extent federal
law governs.
10. Termination. This Plan of Merger shall automatically
terminate without any further action of the parties hereto upon
termination of the Merger Agreement.
11. Miscellaneous. This Plan of Merger may be executed in
counterparts, each of which shall be deemed an original and all
of which constitute one and the same instrument.
In Witness Whereof, the parties hereto have caused this Plan
of Merger to be executed on their behalf by their duly authorized
representatives as of the day and year first above written.
Fidelity Federal Savings Bank BankBoynton, a Federal Savings
of Florida Bank
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
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▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
President and Chief Executive Chairman of the Board
Officer
