AGREEMENT AND PLAN OF MERGER
BY AND BETWEEN
FIRST NIAGARA FINANCIAL GROUP, INC.
AND
GREAT LAKES BANCORP, INC.
SEPTEMBER 9, 2007
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TABLE OF CONTENTS
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ARTICLE I CERTAIN DEFINITIONS
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1
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1.1.
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Certain Definitions.
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1
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ARTICLE II THE MERGER
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8
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2.1.
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Merger.
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8
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2.2.
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Effective Time.
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8
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2.3.
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Certificate of Incorporation and
Bylaws.
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8
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2.4.
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Directors and Officers of Surviving
Corporation.
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8
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2.5.
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Advisory Board.
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9
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2.6.
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Effects of the Merger.
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9
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2.7
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Tax Consequences.
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9
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2.8.
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Possible Alternative Structures.
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9
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2.9.
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Bank Merger
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9
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2.10.
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Additional Actions
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10
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ARTICLE III CONVERSION OF SHARES
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10
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3.1.
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Conversion of GLB Common Stock; Merger
Consideration.
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10
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3.2.
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Election Procedures.
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12
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3.3.
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Procedures for Exchange of GLB Common
Stock.
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15
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3.4
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Reservation of Shares.
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17
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ARTICLE IV REPRESENTATIONS AND
WARRANTIES OF GLB
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17
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4.1.
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Standard.
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18
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4.2.
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Organization.
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18
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4.3.
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Capitalization.
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19
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4.4.
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Authority; No Violation.
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19
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4.5.
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Consents.
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20
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4.6.
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Financial Statements.
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21
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4.7.
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Taxes.
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22
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4.8.
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No Material Adverse Effect.
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23
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4.9.
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Material Contracts; Leases;
Defaults.
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23
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4.10.
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Ownership of Property; Insurance
Coverage.
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25
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4.11.
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Legal Proceedings.
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26
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4.12.
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Compliance With Applicable Law.
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26
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4.13.
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Employee Benefit Plans.
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27
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4.14.
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Brokers, Finders and Financial
Advisors.
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30
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4.15.
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Environmental Matters.
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30
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4.16.
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Loan Portfolio.
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31
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4.17.
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Securities Documents.
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32
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4.18.
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Related Party Transactions.
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33
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4.19.
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Deposits.
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33
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4.20.
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Antitakeover Provisions Inapplicable;
Required Vote.
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33
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4.21.
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Registration Obligations.
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33
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4.22.
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Risk Management Instruments.
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33
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4.23.
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Fairness Opinion.
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34
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4.24.
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Trust Accounts
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34
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4.25.
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Intellectual Property
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34
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4.26.
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Labor Matters
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34
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4.27.
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GLB Information Supplied
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35
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ARTICLE V REPRESENTATIONS AND
WARRANTIES OF FNFG
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35
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5.1.
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Standard.
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35
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5.2.
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Organization.
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36
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5.3.
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Capitalization.
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36
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5.4.
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Authority; No Violation.
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37
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5.5.
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Consents.
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37
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5.6.
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Financial Statements.
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38
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5.7.
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Taxes.
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39
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5.8.
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No Material Adverse Effect.
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39
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5.9.
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Ownership of Property; Insurance
Coverage.
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40
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5.10.
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Legal Proceedings.
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40
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5.11.
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Compliance With Applicable Law.
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40
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5.12.
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Employee Benefit Plans.
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41
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5.13.
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Environmental Matters.
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43
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5.14.
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Loan Losses.
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43
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5.15.
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Securities Documents
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43
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5.16.
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Brokers, Finders and Financial
Advisors
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43
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5.17.
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FNFG Common Stock
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44
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5.18.
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FNFG Information Supplied
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44
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ARTICLE VI COVENANTS OF GLB
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44
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6.1.
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Conduct of Business.
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44
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6.2.
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Current Information.
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48
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6.3.
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Access to Properties and Records.
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49
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6.4.
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Financial and Other Statements.
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50
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6.5.
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Maintenance of Insurance.
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51
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6.6.
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Disclosure Supplements.
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51
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6.7.
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Consents and Approvals of Third
Parties.
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51
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6.8.
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All Reasonable Efforts.
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51
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6.9.
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Failure to Fulfill Conditions.
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51
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6.10.
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No Solicitation.
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51
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6.11.
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Reserves and Merger-Related
Costs.
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54
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6.12.
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Board of Directors and Committee
Meetings.
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55
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ARTICLE VII COVENANTS OF FNFG
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55
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7.1.
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Conduct of Business.
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55
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7.2.
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Current Information.
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55
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7.3.
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Financial and Other Statements.
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56
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7.4.
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Disclosure Supplements.
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56
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7.5.
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Consents and Approvals of Third
Parties.
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56
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7.6.
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All Reasonable Efforts.
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56
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7.7.
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Failure to Fulfill Conditions.
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56
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7.8.
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Employee Benefits.
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56
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7.9.
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Directors and Officers Indemnification
and Insurance.
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58
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7.10.
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Stock Listing.
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59
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7.11.
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Stock and Cash Reserve.
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59
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ARTICLE VIII REGULATORY AND OTHER
MATTERS
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59
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8.1.
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GLB Shareholder Meeting.
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59
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8.2.
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Proxy Statement-Prospectus.
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59
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8.3.
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Regulatory Approvals.
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61
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8.4.
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Affiliates.
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61
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ARTICLE IX CLOSING CONDITIONS
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61
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9.1.
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Conditions to Each Party’s
Obligations under this Agreement.
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61
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9.2.
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Conditions to the Obligations of FNFG
under this Agreement.
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62
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9.3.
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Conditions to the Obligations of GLB
under this Agreement.
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63
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ARTICLE X THE CLOSING
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64
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10.1.
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Time and Place.
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64
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10.2.
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Deliveries at the Pre-Closing and the
Closing.
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64
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ARTICLE XI TERMINATION, AMENDMENT AND
WAIVER
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64
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11.1.
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Termination.
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64
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11.2.
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Effect of Termination.
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67
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11.3.
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Amendment, Extension and Waiver.
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68
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ARTICLE XII MISCELLANEOUS
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68
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12.1.
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Confidentiality.
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68
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12.2.
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Public Announcements.
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68
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12.3.
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Survival.
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69
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12.4.
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Notices.
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69
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12.5.
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Parties in Interest.
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70
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12.6.
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Complete Agreement.
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70
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12.7.
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Counterparts.
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71
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12.8.
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Severability.
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71
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12.9.
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Governing Law.
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71
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12.10.
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Interpretation.
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71
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12.11.
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Specific Performance.
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71
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AGREEMENT AND PLAN OF MERGER
This
AGREEMENT AND PLAN OF MERGER (this “Agreement”) is
dated as of September 9, 2007, by and between First Niagara
Financial Group, Inc., a Delaware corporation
(“FNFG”), and Great Lakes Bancorp, Inc., a
Delaware corporation (“GLB”).
WHEREAS , the Board of Directors of each of FNFG and GLB
(i) has determined that this Agreement and the business combination
and related transactions contemplated hereby are in the best
interests of their respective companies and shareholders and (ii)
has determined that this Agreement and the transactions
contemplated hereby are consistent with and in furtherance of their
respective business strategies, and (iii) has adopted a resolution
approving this Agreement and declaring its advisability;
and
WHEREAS, in accordance with the terms of this Agreement,
GLB will merge with and into FNFG (the “Merger”), and
immediately thereafter Greater Buffalo Savings Bank, a New York
chartered stock savings bank and wholly owned subsidiary of GLB
(“GBSB”), will be merged with and into First Niagara
Bank, a federally chartered stock savings bank and wholly owned
subsidiary of FNFG (“First Niagara Bank”);
and
WHEREAS , as a condition to the willingness of FNFG to
enter into this Agreement, each of the directors of GLB has entered
into a Voting Agreement, substantially in the form of Exhibit A
hereto, dated as of the date hereof, with FNFG (the “GLB
Voting Agreements”), pursuant to which each such director has
agreed, among other things, to vote all shares of common stock of
GLB owned by such person in favor of the approval of this Agreement
and the transactions contemplated hereby, upon the terms aznd
subject to the conditions set forth in the GLB Voting Agreements;
and
WHEREAS , the parties intend the Merger to qualify as a
reorganization within the meaning of Section 368(a) of the Internal
Revenue Code of 1986, as amended (the “Code”), and that
this Agreement be and is hereby adopted as a “plan of
reorganization” within the meaning of Sections 354 and 361 of
the Code; and
WHEREAS , the parties desire to make certain
representations, warranties and agreements in connection with the
business transactions described in this Agreement and to prescribe
certain conditions thereto.
NOW, THEREFORE , in consideration of the mutual covenants,
representations, warranties and agreements herein contained, and of
other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties hereto agree as
follows:
ARTICLE I
CERTAIN DEFINITIONS
1.1.
Certain Definitions.
As
used in this Agreement, the following terms have the following
meanings (unless the context otherwise requires, references to
Articles and Sections refer to Articles and Sections of this
Agreement).
“Affiliate”
means any Person who directly, or indirectly, through one or
more intermediaries, controls, or is controlled by, or is
under common control with, such Person and, without limiting
the generality of the foregoing, includes any executive
officer or director of such Person and any Affiliate of such
executive officer or director.
“Agreement”
means this agreement, and any amendment hereto.
“Applications”
means the applications for regulatory approval that are
required by the transactions contemplated hereby.
“Bank
Merger” shall mean the merger of GBSB with and into
First Niagara Bank, with First Niagara Bank as the surviving
institution, which merger shall occur immediately following
the Merger.
“Bank
Regulator” shall mean any Federal or state banking
regulator, including but not limited to the OTS, the FRB, the
FDIC and the Department, which regulates First Niagara Bank or
GBSB, or any of their respective holding companies or
subsidiaries, as the case may be.
“BHCA”
shall mean the Bank Holding Company Act of 1956, as
amended.
“Cash
Consideration” shall have the meaning set forth in
Section 3.1.3.
“Cash
Election” shall have the meaning set forth in Section
3.1.3.
“Cash
Election Shares” shall have the meaning set forth in
Section 3.1.3.
“Certificate”
shall mean certificates evidencing shares of GLB Common
Stock.
“Closing”
shall have the meaning set forth in Section 2.2.
“Closing
Date” shall have the meaning set forth in Section
2.2.
“COBRA”
shall mean the Consolidated Omnibus Budget Reconciliation Act
of 1985, as amended.
“Code”
shall mean the Internal Revenue Code of 1986, as
amended.
“Confidentiality
Agreement” shall mean the confidentiality agreement
referred to in Section 12.1 of this Agreement.
“Department”
shall mean the Banking Department of the State of New York,
and where appropriate shall include the Superintendent of
Banks of the State of New York and the Banking Board of the
State of New York.
“DGCL”
shall mean the Delaware General Corporation Law.
“Dissenting
Shares” shall have the meaning set forth in
Section 3.1.4.
“Dissenting
Shareholder” shall have the meaning set forth in
Section 3.1.4.
“Effective
Time” shall mean the date and time specified pursuant to
Section 2.2 hereof as the effective time of the
Merger.
“Election
Deadline” shall have the meaning set forth in Section
3.2.3.
“Election
Form” shall have the meaning set forth in Section
3.2.2.
“Election
Form Record Date” shall have the meaning set forth in
Section 3.2.2.
“Environmental
Laws” means any applicable 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 (a) the Comprehensive Environmental
Response, Compensation and Liability Act, as amended, 42
U.S.C. §9601, et seq; the Resource Conservation and
Recovery Act, as amended, 42 U.S.C. §6901, et seq; the
Clean Air Act, as amended, 42 U.S.C. §7401, et seq; the
Federal Water Pollution Control Act, as amended, 33 U.S.C.
§1251, et seq; the Toxic Substances Control Act, as
amended, 15 U.S.C. §2601, et seq; the Emergency Planning
and Community Right to Know Act, 42 U.S.C. §11001, et
seq; the Safe Drinking Water Act, 42 U.S.C. §300f, et
seq; and all comparable state and local laws, and (b) 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 the presence of or
exposure to any Materials of Environmental
Concern.
“ERISA”
shall mean the Employee Retirement Income Security Act of
1974, as amended.
“Exchange
Act” shall mean the Securities Exchange Act of 1934, as
amended.
“Exchange
Agent” shall mean Mellon Investor Services, LLC, or such
other bank or trust company or other agent designated by FNFG,
and reasonably acceptable to GLB, which shall act as agent for
FNFG in connection with the exchange procedures for converting
Certificates into the Merger Consideration.
“Exchange
Fund” shall have the meaning set forth in Section
3.3.1.
“Exchange
Ratio” shall have the meaning set forth in Section
3.1.3.
“FDIA”
shall mean the Federal Deposit Insurance Act, as
amended.
“FDIC”
shall mean the Federal Deposit Insurance Corporation or any
successor thereto.
“FHLB”
shall mean the Federal Home Loan Bank of New
York.
“First
Niagara Bank” shall mean First Niagara Bank, a federally
chartered stock savings association, with its principal
offices located at 6950 South Transit Road, P.O. Box 514,
Lockport, New York, which is a wholly owned subsidiary of
FNFG.
“First
Niagara Commercial Bank” shall mean the wholly owned,
commercial bank subsidiary of First Niagara Bank that is
chartered under the laws of the State of New York and is
limited to those activities set forth in Section
2(a)(5)(E)(ii) of the BHCA.
“FNFG”
shall mean First Niagara Financial Group, Inc., a Delaware
corporation, with its principal executive offices located at
6950 South Transit Road, Lockport, New York
14095.
“FNFG
Common Stock” shall mean the common stock, par value
$.01 per share, of FNFG.
“FNFG
DISCLOSURE SCHEDULE” shall mean a written disclosure
schedule delivered by FNFG to GLB specifically referring to
the appropriate section of this Agreement.
“FNFG
Financial Statements” shall mean the (i) the audited
consolidated statements of condition (including related notes
and schedules) of FNFG and subsidiaries as of December 31,
2006 and 2005 and the consolidated statements of income,
comprehensive income, changes in stockholders’ equity
and cash flows (including related notes and schedules, if any)
of FNFG and subsidiaries for each of the three years ended
December 31, 2006, 2005 and 2004, as set forth in FNFG’s
annual report for the year ended December 31, 2006, and (ii)
the unaudited interim consolidated financial statements of
FNFG and subsidiaries as of the end of each calendar quarter
following December 31, 2006, and for the periods then ended,
as filed by FNFG in its Securities Documents.
“FNFG
Regulatory Agreement” shall have the meaning set forth
in Section 5.11.3.
“FNFG
Stock Benefit Plans” shall mean the 1999 Stock Option
Plan, the 1999 Recognition and Retention Plan and the 2002
Long-Term Incentive Stock Benefit Plan.
“FNFG
Subsidiary” means any corporation, of which more than
50% of the capital stock is owned, either directly or
indirectly, by FNFG or First Niagara Bank, except any
corporation the stock of which is held in the ordinary course
of the lending activities of First Niagara Bank.
“FRB”
shall mean the Board of Governors of the Federal Reserve
System and, where appropriate, the Federal Reserve Bank of New
York.
“GAAP”
shall mean accounting principles generally accepted in the
United States of America, consistently applied with prior
practice.
“GBSB”
shall mean Greater Buffalo Savings Bank, a New York chartered
stock savings bank, with its principal offices located at 2421
Main Street, Buffalo, New York, 14214, which is a wholly owned
subsidiary of GLB.
“GLB”
shall mean Great Lakes Bancorp, Inc., a Delaware corporation,
with its principal offices located at 2421 Main Street,
Buffalo, New York, 14214.
“GLB
Common Stock” shall mean the common stock, par value
$0.01 per share, of GLB.
“GLB
DISCLOSURE SCHEDULE” shall mean a written disclosure
schedule delivered by GLB to FNFG specifically referring to
the appropriate section of this Agreement.
“GLB
Financial Statements” shall mean (i) the audited
consolidated balance sheets (including related notes and
schedules, if any) of GLB and subsidiaries as of December 31,
2006 and 2005 and the consolidated statements of operations,
stockholders’ equity and cash flows (including related
notes and schedules, if any) of GLB and subsidiaries for each
of the three years ended December 31, 2006, 2005 and 2004, as
set forth in GLB’s annual report for the year ended
December 31, 2006, and (ii) the unaudited interim consolidated
financial statements of GLB and subsidiaries as of the end of
each calendar quarter following December 31, 2006 and for the
periods then ended, as filed by GLB in its Securities
Documents.
“GLB
Option Plans” shall mean the GLB 2000 Stock Option, the
GLB 2002 Stock Option Plan and the Bay View Capital
Corporation 1995 Stock Option and Incentive Plan, and any
amendments thereto.
“GLB
Option” shall mean an option to purchase shares of GLB
Common Stock granted pursuant to the GLB Option Plans and as
set forth in GLB DISCLOSURE SCHEDULE 4.3.1.
“GLB
Recommendation” shall have the meaning set forth in
Section 8.1.
“GLB
Regulatory Agreement” shall have the meaning set forth
in Section 4.12.3.
“GLB
Regulatory Reports” means the Call Reports of GBSB and
accompanying schedules, as filed with the FDIC, for each
calendar quarter beginning with the quarter ended March 31,
2007, through the Closing Date, and all Reports filed with the
FDIC by GLB from March 31, 2007 through the Closing
Date.
“GLB
Shareholders Meeting” shall have the meaning set forth
in Section 8.1.1.
“GLB
Subsidiary” means any corporation, of which more than
50% of the capital stock is owned, either directly or
indirectly, by GLB or GBSB, except any corporation the stock
of which is held in the ordinary course of the lending
activities of GBSB.
“Governmental
Entity” shall mean any Federal or state court,
administrative agency or commission or other governmental
authority or instrumentality.
“HOLA”
shall mean the Home Owners’ Loan Act, as
amended.
“IRS”
shall mean the United States Internal Revenue
Service.
“Knowledge”
as used with respect to a Person (including references to such
Person being aware of a particular matter) means those facts
that are known or should have been known by the executive
officers and directors of such Person, and includes any facts,
matters or circumstances set forth in any written notice from
any Bank Regulator or any other material written notice
received by that Person.
“Material
Adverse Effect” shall mean, with respect to FNFG or GLB,
respectively, any effect that (i) is material and adverse to
the financial condition, results of operations or business of
FNFG and its Subsidiaries taken as a whole, or GLB and its
Subsidiaries taken as a whole, respectively, or (ii) does or
would materially impair the ability of either GLB, on the one
hand, or FNFG, on the other hand, to perform its obligations
under this Agreement or otherwise materially threaten or
materially impede the consummation of the transactions
contemplated by this Agreement; provided that “Material
Adverse Effect” shall not be deemed to include the
impact of (a) changes in laws and regulations affecting banks
or thrift institutions or their holding companies generally,
or interpretations thereof by courts or governmental agencies,
(b) changes in GAAP or regulatory accounting principles
generally applicable to financial institutions and their
holding companies, (c) actions and omissions of a party hereto
(or any of its Subsidiaries) taken with the prior written
consent of the other party, (d) the impact of the announcement
of this Agreement and the transactions contemplated hereby,
and compliance with this Agreement on the business, financial
condition or results of operations of the parties and their
respective subsidiaries, including the expenses incurred by
the parties hereto in consummating the transactions
contemplated by this Agreement, (e) changes in national or
international political or social conditions including the
engagement by the United States in hostilities, whether or not
pursuant to the declaration of a national emergency or war, or
the occurrence of any military or terrorist attack upon or
within the United States, or any of its territories,
possessions or diplomatic or consular offices or upon any
military installation, equipment or personnel of the United
States, unless it uniquely affects either or both of the
parties or any of their Subsidiaries (f) any change in the
value of the securities or loan portfolio, or any change in
the value of the deposits or borrowings, of FNFG or GLB, or
any of their Subsidiaries, respectively, resulting from a
change in interest rates generally, or (g) any charge or
reserve taken by GLB at the request of FNFG pursuant to
Section 6.11 of this Agreement.
“Materials
of Environmental Concern” means pollutants,
contaminants, wastes, toxic substances, petroleum and
petroleum products, and any other materials regulated under
Environmental Laws.
“Merger”
shall mean the merger of GLB with and into FNFG (or a
subsidiary thereof) pursuant to the terms hereof.
“Merger
Consideration” shall mean the cash or FNFG Common Stock,
or combination thereof, in an aggregate per share amount to be
paid by FNFG for each share of GLB Common Stock, as set forth
in Section 3.1.
“Merger
Registration Statement” shall mean the registration
statement, together with all amendments, filed with the SEC
under the Securities Act for the purpose of registering shares
of FNFG Common Stock to be offered to holders of GLB Common
Stock in connection with the Merger.
“Nasdaq”
shall mean the Nasdaq Global Select Market.
“OTS”
shall mean the Office of Thrift Supervision or any successor
thereto.
“PBGC”
shall mean the Pension Benefit Guaranty Corporation, or any
successor thereto.
“Pension
Plan” shall have the meaning set forth in Section
4.13.2.
“Person”
shall mean any individual, corporation, partnership, joint
venture, association, trust or “group” (as that
term is defined under the Exchange Act).
“Proxy
Statement-Prospectus” shall have the meaning set forth
in Section 8.2.1.
“Regulatory
Approvals” means the approval of any Bank Regulator that
is necessary in connection with the consummation of the
Merger, the Bank Merger and the related transactions
contemplated by this Agreement.
“Rights”
shall mean warrants, options, rights, convertible securities,
stock appreciation rights and other arrangements or
commitments which obligate an entity to issue or dispose of
any of its capital stock or other ownership interests or which
provide for compensation based on the equity appreciation of
its capital stock.
“SEC”
shall mean the Securities and Exchange Commission or any
successor thereto.
“Securities
Act” shall mean the Securities Act of 1933, as
amended.
“Securities
Documents” shall mean all reports, offering circulars,
proxy statements, registration statements and all similar
documents filed, or required to be filed, pursuant to the
Securities Laws.
“Securities
Laws” shall mean the Securities Act; the Exchange Act;
the Investment Company Act of 1940, as amended; the Investment
Advisers Act of 1940, as amended; the Trust Indenture Act of
1939, as amended, and the rules and regulations of the SEC
promulgated thereunder.
“Shortfall
Number” shall have the meaning set forth in Section
3.2.5.
“Significant
Subsidiary” shall have the meaning set forth in Rule
1-02 of Regulation S-X of the SEC.
“Stock
Consideration” shall have the meaning set forth in
Section 3.1.3.
“Stock
Conversion Number” shall have the meaning set forth in
Section 3.2.1.
“Stock
Election” shall have the meaning set forth in Section
3.1.3.
“Stock
Election Number” shall have the meaning set forth in
Section 3.2.4.
“Stock
Election Shares” shall have the meaning set forth in
Section 3.1.3.
“Surviving
Corporation” shall have the meaning set forth in Section
2.1 hereof.
“Termination
Date” shall mean June 30, 2008.
“Treasury
Stock” shall have the meaning set forth in Section
3.1.2.
Other
terms used herein are defined in the preamble and elsewhere in
this Agreement.
ARTICLE II
THE MERGER
2.1.
Merger.
Subject
to the terms and conditions of this Agreement, at the
Effective Time: (a) GLB shall merge with and into FNFG, with
FNFG as the resulting or surviving corporation (the
“Surviving Corporation”); and (b) the separate
existence of GLB shall cease and all of the rights,
privileges, powers, franchises, properties, assets,
liabilities and obligations of GLB shall be vested in and
assumed by FNFG. As part of the Merger, each share
of GLB Common Stock (other than Dissenting Shares and Treasury
Stock) will be converted into the right to receive the Merger
Consideration pursuant to the terms of Article III
hereof. Immediately after the Merger, GBSB shall
merge with and into First Niagara Bank, with First Niagara
Bank as the resulting institution.
2.2.
Effective Time.
The
Closing shall occur no later than the close of business on the
fifth business day following the latest to occur
of (i) the receipt of all Regulatory Approvals,
(ii) GLB shareholder approval of the Merger, or (iii) the
passing of any applicable waiting periods; or at such other
date or time upon which FNFG and GLB mutually agree (the
“Closing”). The Merger shall be effected by the
filing of a certificate of merger with the Delaware Office of
the Secretary of State on the day of the Closing (the
“Closing Date”), in accordance with the
DGCL. The “Effective Time” means the
date and time upon which the certificate of merger is filed
with the Delaware Office of the Secretary of State, or as
otherwise stated in the certificate of merger, in accordance
with the DGCL.
2.3.
Certificate of Incorporation and Bylaws.
The
Certificate of Incorporation and Bylaws of FNFG as in effect
immediately prior to the Effective Time shall be the
Certificate of Incorporation and Bylaws of the Surviving
Corporation, until thereafter amended as provided therein and
by applicable law.
2.4.
Directors and Officers of Surviving
Corporation.
The
directors of FNFG immediately prior to the Effective Time
shall be the initial directors of the Surviving Corporation,
each to hold office in accordance with the Certificate of
Incorporation and Bylaws of the Surviving
Corporation. The officers of FNFG immediately prior
to the Effective Time shall be the initial officers of
Surviving Corporation, in each case until their respective
successors are duly elected or appointed and
qualified.
2.5.
Advisory Board.
Effective
immediately after the Effective Time, Gerard T. Mazurkiewicz
and David L. Ulrich shall be appointed to the currently
existing Western New York Advisory Board of First Niagara Bank
(the “Advisory Board”).
2.6.
Effects of the Merger.
At
and after the Effective Time, the Merger shall have the
effects as set forth in the DGCL.
2.7.
Tax Consequences.
It
is intended that the Merger shall constitute a reorganization
within the meaning of Section 368(a) of the Code, and that
this Agreement shall constitute a “plan of
reorganization” as that term is used in Sections 354 and
361 of the Code. From and after the date of this
Agreement and until the Closing, each party hereto shall use
its reasonable best efforts to cause the Merger to qualify,
and will not knowingly take any action, cause any action to be
taken, fail to take any action or cause any action to fail to
be taken which action or failure to act could prevent the
Merger from qualifying as a reorganization under Section
368(a) of the Code. Following the Closing, neither
FNFG, GLB nor any of their affiliates shall knowingly take any
action, cause any action to be taken, fail to take any action
or cause any action to fail to be taken, which action or
failure to act could cause the Merger to fail to qualify as a
reorganization under Section 368(a) of the
Code. FNFG and GLB each hereby agrees to deliver
certificates substantially in compliance with IRS published
advance ruling guidelines, with customary exceptions and
modifications thereto, to enable counsel to deliver the legal
opinion contemplated by Section 9.1.6, which certificates
shall be effective as of the date of such
opinion.
2.8.
Possible Alternative Structures.
Notwithstanding
anything to the contrary contained in this Agreement, prior to
the Effective Time FNFG shall be entitled to revise the
structure of the Merger or the Bank Merger, including without
limitation, by merging GLB into a wholly owned subsidiary of
FNFG, provided that (i) any such subsidiary shall become
a party to, and shall agree to be bound by, the terms of this
Agreement (ii) there are no adverse Federal or state
income tax consequences to GLB shareholders as a result of the
modification; (iii) the consideration to be paid to the
holders of GLB Common Stock under this Agreement is not
thereby changed in kind, value or reduced in amount; and (iv)
such modification will not delay materially or jeopardize the
receipt of Regulatory Approvals or other consents and
approvals relating to the consummation of the Merger and the
Bank Merger or otherwise cause any condition to Closing set
forth in Article IX not to be capable of being
fulfilled. The parties hereto agree to
appropriately amend this Agreement and any related documents
in order to reflect any such revised structure.
2.9.
Bank Merger
FNFG
and GLB shall use their reasonable best efforts to cause the
merger of GBSB with and into First Niagara Bank, with First
Niagara Bank as the surviving institution, to occur as soon as
practicable after the Effective Time. In addition,
following the execution and delivery of
this
Agreement, FNFG will cause First Niagara Bank, and GLB will
cause GBSB, to execute and deliver a mutually acceptable Plan
of Bank Merger.
2.10.
Additional Actions
If,
at any time after the Effective Time, FNFG shall consider or
be advised that any further deeds, assignments or assurances
in law or any other acts are necessary or desirable to
(i) vest, perfect or confirm, of record or otherwise, in
FNFG its right, title or interest in, to or under any of the
rights, properties or assets of GLB, GBSB, or
(ii) otherwise carry out the purposes of this Agreement,
GLB and its officers and directors shall be deemed to have
granted to FNFG an irrevocable power of attorney to execute
and deliver, in such official corporate capacities, all such
deeds, assignments or assurances in law or any other acts as
are necessary or desirable to (a) vest, perfect or
confirm, of record or otherwise, in FNFG its right, title or
interest in, to or under any of the rights, properties or
assets of GLB or (b) otherwise carry out the purposes of
this Agreement, and the officers and directors of the FNFG are
authorized in the name of GLB or otherwise to take any and all
such action.
ARTICLE III
CONVERSION OF SHARES
3.1.
Conversion of GLB Common Stock; Merger
Consideration.
At
the Effective Time, by virtue of the Merger and without any
action on the part of FNFG, GLB or the holders of any of the
shares of GLB Common Stock, the Merger shall be effected in
accordance with the following terms:
3.1.1. Each
share of FNFG Common Stock that is issued and outstanding
immediately prior to the Effective Time shall remain issued
and outstanding following the Effective Time and shall be
unchanged by the Merger.
3.1.2. All
shares of GLB Common Stock held in the treasury of GLB
(“Treasury Stock”) and each share of GLB Common
Stock owned by FNFG immediately prior to the Effective Time
(other than shares held in a fiduciary capacity or in
connection with debts previously contracted) shall, at the
Effective Time, cease to exist, and the certificates for such
shares shall be canceled as promptly as practicable
thereafter, and no payment or distribution shall be made in
consideration therefor.
3.1.3. Subject
to the provisions of this Article III, each share of GLB
Common Stock issued and outstanding immediately prior to the
Effective Time (other than Treasury Stock and Dissenting
Shares) shall become and be converted into, as provided in and
subject to the limitations set forth in this Agreement, the
right to receive at the election of the holder thereof as
provided in Section 3.2, the following, without
interest:
(A) for
each share of GLB Common Stock with respect to which an
election to receive cash has been effectively made and not
revoked or lost, pursuant to Section 3.2 (a “Cash
Election”), cash from FNFG in an amount equal to $14.00
(the “Cash Consideration”) (collectively,
“Cash Election Shares”);
(B) for
each share of GLB Common Stock with respect to which an
election to receive FNFG Common Stock has been effectively
made and not revoked or lost, pursuant to Section 3.2 (a
“Stock Election”), .993 shares (“the
Exchange Ratio”) of FNFG Common (the
“Stock Consideration”) (collectively, the
“Stock Election Shares”);
(C) a
combination of the Cash Consideration and the Stock
Consideration (a “Mixed Election” and collectively
the “Mixed Election Shares”); and
(D) for
each share of GLB Common Stock other than shares as to which a
Cash Election, a Stock Election or a Mixed Election has been
effectively made and not revoked or lost, pursuant to Section
3.2 (collectively, “Non-Election Shares”), such
Stock Consideration and/or Cash Consideration as is determined
in accordance with Section 3.2.
3.1.4. Each
outstanding share of GLB Common Stock the holder of which has
perfected his right to dissent under the DGCL and has not
effectively withdrawn or lost such right as of the Effective
Time (the “Dissenting Shares”) shall not be
converted into or represent a right to receive the Merger
Consideration hereunder, and the holder thereof shall be
entitled only to such rights as are granted by the
DGCL. GLB shall give FNFG prompt notice upon
receipt by GLB of any written demand for payment of the fair
value of such shares of GLB Common Stock and of withdrawals of
such notice and any other instruments provided pursuant to
applicable law (any shareholder duly making such demand being
hereinafter called a “Dissenting Shareholder”),
and FNFG shall have the right to participate in all
negotiations and proceedings with respect to any such
demands. GLB shall not, except with the prior
written consent of FNFG, voluntarily make any payment with
respect to, or settle or offer to settle, any such demand for
payment, or waive any failure to timely deliver a written
demand for appraisal or the taking of any other action by such
Dissenting Shareholder as may be necessary to perfect
appraisal rights under the DGCL. Any payments made in respect
of Dissenting Shares shall be made by the Surviving
Company.
3.1.5. If
any Dissenting Shareholder shall effectively withdraw or lose
(through failure to perfect or otherwise) his right to such
payment at or prior to the Effective Time, such holder’s
shares of GLB Common Stock shall be converted into a right to
receive cash or FNFG Common Stock in accordance with the
applicable provisions of this Agreement. If such
holder shall effectively withdraw or lose (through failure to
perfect or otherwise) his right to such payment after the
Effective Time (or the Election Deadline), each share of GLB
Common Stock of such holder shall be treated as a Non-Election
Share.
3.1.6. After
the Effective Time, shares of GLB Common Stock shall be no
longer outstanding and shall automatically be canceled and
shall cease to exist, and shall thereafter by operation of
this section represent the right to receive the Merger
Consideration (or as to Dissenting Shares, such rights as
provided by the DGCL) and any dividends or distributions with
respect thereto or any dividends or distributions with a
record date prior to the Effective Time that were declared or
made by GLB on such shares of GLB Common Stock in accordance
with the terms of this Agreement on or prior to the Effective
Time and which remain unpaid at the Effective
Time.
3.1.7. In
the event FNFG changes (or establishes a record date for
changing) the number of, or provides for the exchange of,
shares of FNFG Common Stock issued and outstanding prior to
the Effective Time as a result of a stock split, stock
dividend, recapitalization, reclassification, or similar
transaction with respect to the outstanding FNFG Common Stock
and the record date therefor shall be prior to the Effective
Time, the Exchange Ratio shall be proportionately and
appropriately adjusted; provided , that no such
adjustment shall be made with regard to FNFG Common Stock if
FNFG issues additional shares of Common Stock and receives
fair market value consideration for such shares.
3.2.
Election Procedures.
3.2.1. Holders
of GLB Common Stock may elect to receive shares of FNFG Common
Stock or cash (in either case without interest) in exchange
for their shares of GLB Common Stock in accordance with the
procedures set forth herein; provided that, in the aggregate,
and subject to the provisions of 3.2, 50% of the total number
of shares of GLB Common Stock issued and outstanding at the
Effective Time, including any Dissenting Shares but excluding
any Treasury Shares (the “Stock Conversion
Number”), shall be converted into the Stock
Consideration and the remaining outstanding shares of GLB
Common Stock shall be converted into the Cash
Consideration. Shares of GLB Common Stock as to
which a Cash Election (including, pursuant to a Mixed
Election) has been made are referred to herein as “Cash
Election Shares.” Shares of GLB Common Stock
as to which a Stock Election has been made (including,
pursuant to a Mixed Election) are referred to as “Stock
Election Shares.” Shares of GLB Common Stock
as to which no election has been made (or as to which an
Election Form is not returned properly completed) are referred
to herein as “Non-Election Shares.” The
aggregate number of shares of GLB Common Stock with respect to
which a Stock Election has been made is referred to herein as
the “Stock Election Number.” Any
Dissenting Shares shall be deemed to be Cash Election Shares,
and the holders thereof shall in no event receive
consideration comprised of FNFG Common Stock with respect to
such shares; provided; however, that for purposes of making
the proration calculations provided for in this Section 3.2,
only Dissenting Shares as existing at the Effective Time shall
be deemed Cash Election Shares.
3.2.2. An
election form and other appropriate and customary transmittal
materials (which shall specify that delivery shall be
effected, and risk of loss and title to the Certificates shall
pass, only upon proper delivery of such Certificates to the
Exchange Agent), in such form as GLB and FNFG shall mutually
agree (“Election Form”), shall be mailed no more
than 40 business days and no less than 20 business days prior
to the anticipated Effective Time or on such earlier date as
FNFG and GLB shall mutually agree (the “Mailing
Date”) to each holder of record of GLB Common Stock as
of five business days prior to the Mailing Date (the
“Election Form Record Date”). Each
Election Form shall permit such holder, subject to the
allocation and election procedures set forth in this Section
3.2, (i) to elect to receive the Cash Consideration for all of
the shares of GLB Common Stock held by such holder, in
accordance with Section 3.1.3, (ii) to elect to receive the
Stock Consideration for all of such shares, in accordance with
Section 3.1.3, (iii) elect to receive the Stock Consideration
for a part of such holder’s GLB Common Stock and the
Cash consideration for the remaining part of such
holder’s GLB Common Stock, or (iv) to indicate that such
record holder has no preference as to the receipt of cash or
FNFG Common Stock for such shares. A holder of
record of shares of GLB Common Stock who holds such shares as
nominee, trustee or in another representative
capacity
(a
“Representative”) may submit multiple Election
Forms, provided that each such Election Form covers all the
shares of GLB Common Stock held by such Representative for a
particular beneficial owner. Any shares of GLB
Common Stock with respect to which the holder thereof shall
not, as of the Election Deadline, have made an election by
submission to the Exchange Agent of an effective, properly
completed Election Form shall be deemed Non-Election
Shares.
3.2.3. To
be effective, a properly completed Election Form shall be
submitted to the Exchange Agent on or before 5:00 p.m., New
York City time, on the 20 th day
following the Mailing Date (or such other time and date as
FNFG and GLB may mutually agree) (the “Election
Deadline”); provided, however, that the Election
Deadline may not occur on or after the Closing
Date. GLB shall use its reasonable best efforts to
make available up to two separate Election Forms, or such
additional Election Forms as FNFG may permit, to all persons
who become holders (or beneficial owners) of GLB Common Stock
between the Election Form Record Date and the close of
business on the business day prior to the Election
Deadline. GLB shall provide to the Exchange Agent
all information reasonably necessary for it to perform as
specified herein. An election shall have been
properly made only if the Exchange Agent shall have actually
received a properly completed Election Form by the Election
Deadline. An Election Form shall be deemed properly
completed only if accompanied by one or more Certificates (or
customary affidavits and indemnification regarding the loss or
destruction of such Certificates or the guaranteed delivery of
such Certificates) representing all shares of GLB Common Stock
covered by such Election Form, together with duly executed
transmittal materials included with the Election
Form. If an GLB shareholder either (i) does not
submit a properly completed Election Form in a timely fashion
or (ii) revokes its Election Form prior to the Election
Deadline (without later submitting a properly completed
Election Form prior to the Election Deadline), the shares of
GLB Common Stock held by such shareholder shall be designated
as Non-Election Shares. Any Election Form may be
revoked or changed by the person submitting such Election Form
to the Exchange Agent by written notice to the Exchange Agent
only if such notice of revocation or change is actually
received by the Exchange Agent at or prior to the Election
Deadline. FNFG shall cause the Certificate or
Certificates relating to any revoked Election Form to be
promptly returned without charge to the person submitting the
Election Form to the Exchange Agent. Subject to the
terms of this Agreement and of the Election Form, the Exchange
Agent shall have discretion to determine when any election,
modification or revocation is received and whether any such
election, modification or revocation has been properly
made. All elections shall be revoked automatically
if the Exchange Agent is notified in writing by FNFG or GLB,
upon exercise by FNFG or GLB of its respective or their mutual
rights to terminate this Agreement to the extent provided
under Article XI, that this Agreement has been terminated in
accordance with Article XI.
3.2.4. If
the aggregate number of shares of GLB Common Stock with
respect to which Stock Elections shall have been made (the
“Stock Election Number”) exceeds the Stock
Conversion Number, then all Cash Election Shares and all
Non-Election Shares of each holder thereof shall be converted
into the right to receive the Cash Consideration, and Stock
Election Shares of each holder thereof will be converted into
the right to receive the Stock Consideration in respect of
that number of Stock Election Shares equal to the product
obtained by multiplying (x) the number of Stock Election
Shares held by such holder by (y) a fraction, the numerator of
which is the Stock Conversion Number and the denominator of
which is the Stock Election
Number,
with the remaining number of such holder’s Stock
Election Shares being converted into the right to receive the
Cash Consideration.
3.2.5.
If the Stock Election Number is less than the Stock Conversion
Number (the amount by which the Stock Conversion Number
exceeds the Stock Election Number being referred to herein as
the “Shortfall Number”), then all Stock Election
Shares shall be converted into the right to receive the Stock
Consideration and the Non-Election Shares and Cash Election
Shares shall be treated in the following manner:
(A) If
the Shortfall Number is less than or equal to the number of
Non-Election Shares, then all Cash Election Shares shall be
converted into the right to receive the Cash Consideration and
the Non-Election Shares of each holder thereof shall convert
into the right to receive the Stock Consideration in respect
of that number of Non-Election Shares equal to the product
obtained by multiplying (x) the number of Non-Election Shares
held by such holder by (y) a fraction, the numerator of which
is the Shortfall Number and the denominator of which is the
total number of Non-Election Shares, with the remaining number
of such holder’s Non-Election Shares being converted
into the right to receive the Cash Consideration;
or
(B) If
the Shortfall Number exceeds the number of Non-Election
Shares, then all Non-Election Shares shall be converted into
the right to receive the Stock Consideration and Cash Election
Shares of each holder thereof shall convert into the right to
receive the Stock Consideration in respect of that number of
Cash Election Shares equal to the product obtained by
multiplying (x) the number of Cash Election Shares held by
such holder by (y) a fraction, the numerator of which is the
amount by which (1) the Shortfall Number exceeds (2) the total
number of Non-Election Shares and the denominator of which is
the total number of Cash Election Shares, with the remaining
number of such holder’s Cash Election Shares being
converted into the right to receive the Cash
Consideration.
3.2.6.
Adjustment to Preserve Tax Treatment. Notwithstanding
anything in this Article III to the contrary, if the aggregate
value of the Stock Consideration to be delivered as of the
Effective Time, less the amount of cash paid in lieu of
fractional shares of FNFG Common Stock pursuant to Section
3.2.7 (the “Stock Value”), is less than 40% of the
sum of (i) the aggregate value of the Merger Consideration to
be delivered as of the Effective Time, plus (ii) the value of
any consideration described in Treasury Regulations Section
1.368-1(e)(1)(ii), plus (iii) cash paid to holders of
Dissenting Shares, plus (iv) the value of any consideration
paid by FNFG or any of its Subsidiaries (or any “related
person” to FNFG or any of its Subsidiaries within the
meaning of Treasury Regulations Section 1.368-1(e)(3)) to
acquire shares of GLB Common Stock prior to the Effective Time
(such sum, the “Aggregate Value”), then FNFG may
reduce the number of shares of outstanding GLB Common Stock
entitled to receive the Cash Consideration and correspondingly
increase the number of shares of GLB Common Stock entitled to
receive the Stock Consideration by the minimum amount
necessary to cause the Stock Value to equal 40% of the
Aggregate Value.
3.2.7.
No Fractional Shares. Notwithstanding anything to the
contrary contained herein, no certificates or scrip
representing fractional shares of FNFG Common Stock shall be
issued upon the surrender for exchange of Certificates, no
dividend or distribution with respect to FNFG Common Stock
shall be payable on or with respect to any fractional share
interest, and
such
fractional share interests shall not entitle the owner thereof
to vote or to any other rights of a shareholder of
FNFG. In lieu of the issuance of any such
fractional share, FNFG shall pay to each former holder of GLB
Common Stock who otherwise would be entitled to receive a
fractional share of FNFG Common Stock, an amount in cash,
rounded to the nearest cent and without interest, equal to the
product of (i) the fraction of a share to which such holder
would otherwise have been entitled and (ii) the average of the
daily closing sales prices of a share of FNFG Common Stock as
reported on the Nasdaq for the five consecutive trading days
immediately preceding the Closing Date. For
purposes of determining any fractional share interest, all
shares of GLB Common Stock owned by a GLB shareholder shall be
combined so as to calculate the maximum number of whole shares
of FNFG Common Stock issuable to such GLB
shareholder.
3.3.
Procedures for Exchange of GLB Common
Stock.
3.3.1.
FNFG to Make Merger Consideration Available.
After the Election Deadline and no later than the
Closing Date, FNFG shall deposit, or shall cause to be
deposited, with the Exchange Agent for the benefit of the
holders of GLB Common Stock, for exchange in accordance with
this Section 3.3, certificates representing the shares of FNFG
Common Stock and an aggregate amount of cash sufficient to pay
the aggregate amount of cash payable pursuant to this Article
III (including any cash that may be payable in lieu of any
fractional shares of GLB Common Stock) (such cash and
certificates for shares of FNFG Common Stock, together with
any dividends or distributions with respect thereto, being
hereinafter referred to as the “Exchange
Fund”).
3.3.2.
Exchange of Certificates . FNFG shall take
all steps necessary to cause the Exchange Agent, within five
(5) business days after the Effective Time, to mail to each
holder of a Certificate or Certificates, a form letter of
transmittal for return to the Exchange Agent and instructions
for use in effecting the surrender of the Certificates for the
Merger Consideration and cash in lieu of fractional shares, if
any, into which the GLB Common Stock represented by such
Certificates shall have been converted as a result of the
Merger. The letter of transmittal shall specify
that delivery shall be effected, and risk of loss and title to
the Certificates shall pass, only upon delivery of the
Certificates to the Exchange Agent. Upon proper surrender of a
Certificate for exchange and cancellation to the Exchange
Agent, together with a properly completed letter of
transmittal, duly executed, the holder of such Certificate
shall be entitled to receive in exchange therefor, as
applicable, (i) a certificate representing that number of
shares of FNFG Common Stock (if any) to which such former
holder of GLB Common Stock shall have become entitled pursuant
to the provisions of Section 3.1 or 3.2 hereof, (ii) a check
representing that amount of cash (if any) to which such former
holder of GLB Common Stock shall have become entitled pursuant
to the provisions of Section 3.1 or 3.2 hereof and (iii) a
check representing the amount of cash (if any) payable in lieu
of fractional shares of FNFG Common Stock, which such former
holder has the right to receive in respect of the Certificate
surrendered pursuant to the provisions of Section 3.2, and the
Certificate so surrendered shall forthwith be
cancelled. No interest will be paid or accrued on
the cash payable in lieu of fractional
shares. Certificates surrendered for exchange by
any person who is an “affiliate” of GLB for
purposes of Rule 145(c) under the Securities Act shall not be
exchanged for certificates representing shares of FNFG Common
Stock until FNFG has received the written agreement of such
person contemplated by Section 8.4 hereof.
3.3.3.
Rights of Certificate Holders after the Effective
Time . The holder of a Certificate that prior
to the Merger represented issued and outstanding GLB Common
Stock shall have no rights, after the Effective Time, with
respect to such GLB Common Stock except to surrender the
Certificate in exchange for the Merger Consideration as
provided in this Agreement (or as to Dissenting Shares, such
rights as provided by the DGCL). No dividends or
other distributions declared after the Effective Time with
respect to FNFG Common Stock shall be paid to the holder of
any unsurrendered Certificate until the holder thereof shall
surrender such Certificate in accordance with this Section
3.3. After the surrender of a Certificate in
accordance with this Section 3.3, the record holder thereof
shall be entitled to receive any such dividends or other
distributions, without any interest thereon, which theretofore
had become payable with respect to shares of FNFG Common Stock
represented by such Certificate.
3.3.4.
Surrender by Persons Other than Record Holders
. If the Person surrendering a Certificate and
signing the accompanying letter of transmittal is not the
record holder thereof, then it shall be a condition of the
payment of the Merger Consideration that: (i) such
Certificate is properly endorsed to such Person or is
accompanied by appropriate stock powers, in either case signed
exactly as the name of the record holder appears on such
Certificate, and is otherwise in proper form for transfer, or
is accompanied by appropriate evidence of the authority of the
Person surrendering such Certificate and signing the letter of
transmittal to do so on behalf of the record holder; and (ii)
the person requesting such exchange shall pay to the Exchange
Agent in advance any transfer or other taxes required by
reason of the payment to a person other than the registered
holder of the Certificate surrendered, or required for any
other reason, or shall establish to the satisfaction of the
Exchange Agent that such tax has been paid or is not
payable.
3.3.5.
Closing of Transfer Books . From and after the
Effective Time, there shall be no transfers on the stock
transfer books of GLB of the GLB Common Stock that were
outstanding immediately prior to the Effective
Time. If, after the Effective Time, Certificates
representing such shares are presented for transfer to the
Exchange Agent, they shall be exchanged for the Merger
Consideration and canceled as provided in this Section
3.3.
3.3.6.
Return of Exchange Fund . At any time following the
six (6) month period after the Effective Time, FNFG shall be
entitled to require the Exchange Agent to deliver to it any
portions of the Exchange Fund which had been made available to
the Exchange Agent and not disbursed to holders of
Certificates (including, without limitation, all interest and
other income received by the Exchange Agent in respect of all
funds made available to it), and thereafter such holders shall
be entitled to look to FNFG (subject to abandoned property,
escheat and other similar laws) with respect to any Merger
Consideration that may be payable upon due surrender of the
Certificates held by them. Notwithstanding the foregoing,
neither FNFG nor the Exchange Agent shall be liable to any
holder of a Certificate for any Merger Consideration delivered
in respect of such Certificate to a public official pursuant
to any abandoned property, escheat or other similar
law.
3.3.7.
Lost, Stolen or Destroyed Certificates
. In the event any Certificate shall have been
lost, stolen or destroyed, upon the making of an affidavit of
that fact by the person claiming such Certificate to be lost,
stolen or destroyed and, if required by FNFG, the posting by
such person of a bond in such amount as FNFG may reasonably
direct as indemnity against any
claim
that may be made against it with respect to such Certificate,
the Exchange Agent will issue in exchange for such lost,
stolen or destroyed Certificate the Merger Consideration
deliverable in respect thereof.
3.3.8.
Withholding. FNFG or the Exchange Agent
will be entitled to deduct and withhold from the consideration
otherwise payable pursuant to this Agreement or the
transactions contemplated hereby to any holder of GLB Common
Stock such amounts as FNFG (or any Affiliate thereof) or the
Exchange Agent are required to deduct and withhold with
respect to the making of such payment under the Code, or any
applicable provision of U.S. federal, state, local or non-U.S.
tax law. To the extent that such amounts are
properly withheld by FNFG or the Exchange Agent, such withheld
amounts will be treated for all purposes of this Agreement as
having been paid to the holder of the GLB Common Stock in
respect of whom such deduction and withholding were made by
FNFG or the Exchange Agent.
3.3.9.
Treatment of GLB Options . GLB DISCLOSURE
SCHEDULE 4.3.1 sets forth all of the outstanding GLB Options
as of the date hereof. Prior to and effective as of
the Effective Time, GLB shall take all actions necessary to
terminate the GLB Option Plans (and all other option plans
listed in GLB DISCLOSURE SCHEDULE
4.9.1(ii). Holders of all unexercised GLB Options
as of the Effective Time will receive, in cancellation of
their GLB Options, a cash payment from GLB immediately prior
to the Effective Time, in an amount equal to the product of
(x) the number of shares of GLB Common Stock provided for in
such GLB Option and (y) the excess, if any, of $14.00 over the
exercise price per share provided for in such GLB Option (the
“Cash Option Payment”), which cash payment shall
be treated as compensation and shall be net of any applicable
federal or state withholding tax. Prior to the
Effective Time, GLB shall use its reasonably best efforts to
obtain the written consent of each option holder to the
cancellation of the GLB Options in exchange for the Cash
Option Payment, provided that the failure to obtain each
consent shall not be a breach of this agreement, provided
further that the execution of this Agreement confirms the
agreement of Andrew W. Dorn, Jr., Michael J. Rogers and Peter
B. Babiarz, and the current directors of GLB, to enter into
such written consent.
3.3.10.
3.4
Reservation
of Shares. FNFG shall reserve for issuance a
sufficient number of shares of the FNFG Common Stock for the
purpose of issuing shares of FNFG Common Stock to the GLB
shareholders in accordance with this Article III.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF GLB
GLB
represents and warrants to FNFG that the statements contained
in this Article IV are correct and complete as of the date of
this Agreement and will be correct and complete as of the
Closing Date (as though made then and as though the Closing
Date were substituted for the date of this Agreement
throughout this Article IV), subject to the standard set forth
in Section 4.1 and except as set forth in the GLB DISCLOSURE
SCHEDULE delivered by GLB to FNFG on the date hereof, and
except as to any representation or warranty which specifically
relates to an earlier date, which only need be so correct as
of such earlier date. GLB has made a good faith
effort to ensure that the disclosure on each schedule of the
GLB DISCLOSURE SCHEDULE corresponds to the section referenced
herein. However, for purposes of the GLB DISCLOSURE
SCHEDULE, any item disclosed on any schedule therein is deemed
to be fully disclosed with
respect
to all schedules under which such item may be relevant as and
to the extent that it is reasonably clear on the face of such
schedule that such item applies to such other
schedule. References to the Knowledge of GLB shall
include the Knowledge of GBSB.
4.1.
Standard.
No
representation or warranty of GLB contained in this Article IV
shall be deemed untrue or incorrect, and GLB shall not be
deemed to have breached a representation or warranty, as a
consequence of the existence of any fact, circumstance or
event unless such fact, circumstance or event, individually or
taken together with all other facts, circumstances or events
inconsistent with any paragraph of Article IV, has had or is
reasonably expected to have a Material Adverse Effect,
disregarding for these purposes (x) any qualification or
exception for, or reference to, materiality in any such
representation or warranty and (y) any use of the terms
“material”, “materially”, “in
all material respects”, “Material Adverse
Effect” or similar terms or phrases in any such
representation or warranty. The foregoing standard
shall not apply to representations and warranties contained in
Sections 4.2 (other than the last sentence of
Sections 4.2.1 and 4.2.2), and Sections 4.2.4, 4.2.5,
4.3, 4.4, 4.13.5, 4.13.8, 4.13.10 and 4.13.11, which shall be
deemed untrue, incorrect and breached if they are not true and
correct in all material respects based on the qualifications
and standards therein contained. Provided further,
that as to the representations contained in Sections 4.13.5,
4.13.8, 4.13.10, 4.13.11, if there is a breach that relates to
an undisclosed payment, expense accrual or cost in excess of
$300,000 (either individually or in the aggregate), such
breach shall be considered material.
4.2.
Organization.
4.2.1. GLB
is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware, and is duly
registered as a bank holding company under the
BHCA. GLB has full corporate power and authority to
carry on its business as now conducted and is duly licensed or
qualified to do business in the states of the United States
and foreign jurisdictions where its ownership or leasing of
property or the conduct of its business requires such
qualification.
4.2.2. GBSB
is a New York chartered savings bank duly organized, validly
existing and in good standing (to the extent required) under
the laws of the State of New York. The deposits of
GBSB are insured by the FDIC to the fullest extent permitted
by law, and all premiums and assessments required to be paid
in connection therewith have been paid by GBSB when
due. GBSB is a member in good standing of the FHLB
and owns the requisite amount of stock therein.
4.2.3. GLB
DISCLOSURE SCHEDULE 4.2.3 sets forth each GLB
Subsidiary. Each GLB Subsidiary is a corporation or
limited liability company duly organized, validly existing and
in good standing under the laws of its jurisdiction of
incorporation or organization.
4.2.4. The
respective minute books of GLB, GBSB and each other GLB
Subsidiary accurately records, in all material respects, all
material corporate actions of their respective shareholders
and boards of directors (including committees).
4.2.5. Prior
to the date of this Agreement, GLB has made available to FNFG
true and correct copies of the certificate of incorporation or
charter and bylaws of GLB, GBSB and each other GLB
Subsidiary.
4.3.
Capitalization.
4.3.1. The
authorized capital stock of GLB consists of 20,000,000 shares
of common stock, $0.01 par value per share, of which
10,826,198 shares are outstanding, validly issued, fully paid
and nonassessable and free of preemptive
rights. There are 99,189 shares of GLB Common Stock
held by GLB as treasury stock. Neither GLB nor any
GLB Subsidiary has or is bound by any Rights of any character
relating to the purchase, sale or issuance or voting of, or
right to receive dividends or other distributions on any
shares of GLB Common Stock, or any other security of GLB or a
GLB Subsidiary or any securities representing the right to
vote, purchase or otherwise receive any shares of GLB Common
Stock or any other security of GLB or any GLB Subsidiary,
other than (i) shares issuable under the GLB Option Plans,
(ii) capital securities issued by GLB Statutory Trust I (the
“Trust”); (iii) debentures issued by
GLB to the Trust; (iv) the guarantee issued by GLB to the
holders of the capital securities issued by the Trust, and (v)
the warrants listed on GLB DISCLOSURE SCHEDULE 4.3.1. GLB
DISCLOSURE SCHEDULE 4.3.1 sets forth the name of each holder
of options to purchase GLB Common Stock, the number of shares
each such individual may acquire pursuant to the exercise of
such options, the grant and vesting dates, and the exercise
price relating to the options held.
4.3.2. GLB
owns all of the capital stock of GBSB, free and clear of any
lien or encumbrance. Except for the GLB Subsidiaries, GLB does
not possess, directly or indirectly, any material equity
interest in any corporate entity, except for equity interests
held in the investment portfolios of GLB Subsidiaries, equity
interests held by GLB Subsidiaries in a fiduciary capacity,
and equity interests held in connection with the lending
activities of GLB Subsidiaries, including stock in the
FHLB. Either GLB or GBSB owns all of the
outstanding shares of capital stock of each GLB Subsidiary
free and clear of all liens, security interests, pledges,
charges, encumbrances, agreements and restrictions of any kind
or nature, except that, in the case of the Trust, GLB owns
100% of the common securities and less than 100% of the
preferred securities.
4.3.3. To
GLB’s Knowledge, except as set forth in the GLB
DISCLOSURE SCHEDULE 4.3.3, no Person or “group”
(as that term is used in Section 13(d)(3) of the Exchange
Act), is the beneficial owner (as defined in Section 13(d) of
the Exchange Act) of 5% or more of the outstanding shares of
GLB Common Stock.
4.4.
Authority; No Violation.
4.4.1. GLB
has full corporate power and authority to execute and deliver
this Agreement and, subject to the receipt of the Regulatory
Approvals and the approval of this Agreement by GLB’s
shareholders, to consummate the transactions contemplated
hereby. The execution and delivery of this
Agreement by GLB and the completion by GLB of the transactions
contemplated hereby, including the Merger, have been duly and
validly approved by the Board of Directors of GLB, and no
other corporate proceedings on the part of GLB, except for the
approval of the GLB shareholders, is necessary to complete the
transactions contemplated
hereby,
including the Merger. This Agreement has been duly
and validly executed and delivered by GLB, and subject to
approval by the shareholders of GLB and receipt of the
Regulatory Approvals and due and valid execution and
delivery of this Agreement by FNFG, constitutes the valid and
binding obligation of GLB, enforceable against GLB in
accordance with its terms, subject to applicable bankruptcy,
insolvency and similar laws affecting creditors’ rights
generally, and subject, as to enforceability, to general
principles of equity.
4.4.2. Subject
to receipt of Regulatory Approvals and GLB’s and
FNFG’s compliance with any conditions contained therein,
and to the receipt of the approval of the shareholders of GLB,
(A) the execution and delivery of this Agreement by GLB,
(B) the consummation of the transactions contemplated
hereby, and (C) compliance by GLB with any of the terms or
provisions hereof will not (i) conflict with or result in a
breach of any provision of the certificate of incorporation or
bylaws of GLB or any GLB Subsidiary or the charter and bylaws
of GBSB; (ii) violate any statute, code, ordinance, rule,
regulation, judgment, order, writ, decree or injunction
applicable to GLB or any GLB Subsidiary or any of their
respective properties or assets; or (iii) except as set
forth on GLB DISCLOSURE SCHEDULE 4.4.2, violate, conflict
with, result in a breach of any provisions of, constitute a
default (or an event which, with notice or lapse of time, or
both, would constitute a default), under, result in the
termination of, accelerate the performance required by, or
result in a right of termination or acceleration or the
creation of any lien, security interest, charge or other
encumbrance upon any of the properties or assets of GLB or
GBSB under any of the terms, conditions or provisions of any
note, bond, mortgage, indenture, deed of trust, license,
lease, agreement or other investment or obligation to which
GLB or GBSB is a party, or by which they or any of their
respective properties or assets may be bound or affected,
except for such violations, conflicts, breaches or defaults
under clause (ii) or (iii) hereof which, either individually
or in the aggregate, will not have a Material Adverse Effect
on GLB and the GLB Subsidiaries taken as a whole.
4.5.
Consents.
Except
for (a) filings with Bank Regulators, the receipt of the
Regulatory Approvals, and compliance with any conditions
contained therein, (b) the filing of the Certificate of
Merger with the Secretary of State of the State of Delaware,
(c) the filing with the SEC of (i) the Merger
Registration Statement and (ii) such reports under Sections
13(a), 13(d), 13(g) and 16(a) of the Exchange Act as may be
required in connection with this Agreement and the
transactions contemplated hereby and the obtaining from the
SEC of such orders as may be required in connection therewith,
(d) approval of the listing of FNFG Common Stock to be
issued in the Merger on the Nasdaq, (e) such filings and
approvals as are required to be made or obtained under the
securities or “Blue Sky” laws of various states in
connection with the issuance of the shares of FNFG Common
Stock pursuant to this Agreement, and (f) the approval of
this Agreement by the requisite vote of the shareholders of
GLB, no consents, waivers or approvals of, or filings or
registrations with, any Governmental Entity are necessary,
and, to GLB’s Knowledge, except as set forth on GLB
DISCLOSURE SCHEDULE 4.5, no consents, waivers or approvals of,
or filings or registrations with, any other third parties are
necessary, in connection with (x) the execution and delivery
of this Agreement by GLB, and (y) the completion of the Merger
and the Bank Merger. GLB has no reason to believe
that (i) any Regulatory Approvals or other required consents
or approvals will not be received, or that (ii)
any
public body or authority, the consent or approval of which is
not required or to which a filing is not required, will object
to the completion of the transactions contemplated by this
Agreement.
4.6.
Financial Statements.
4.6.1. GLB
has previously made available to FNFG the GLB Regulatory
Reports. The GLB Regulatory Reports have been
prepared in all material respects in accordance with
applicable regulatory accounting principles and practices
throughout the periods covered by such
statements.
4.6.2. GLB
has previously made available to FNFG the GLB Financial
Statements. The GLB Financial Statements have been
prepared in accordance with GAAP, and (including the related
notes where applicable) fairly present in each case in all
material respects (subject in the case of the unaudited
interim statements to normal year-end adjustments), the
consolidated financial position, results of operations and
cash flows of GLB and the GLB Subsidiaries on a consolidated
basis as of and for the respective periods ending on the dates
thereof, in accordance with GAAP during the periods involved,
except as indicated in the notes thereto, or in the case of
unaudited statements, as permitted by Form 10-Q.
4.6.3. At
the date of each balance sheet included in the GLB Financial
Statements or the GLB Regulatory Reports, neither GLB nor
GBSB, as applicable, had any liabilities, obligations or loss
contingencies of any nature (whether absolute, accrued,
contingent or otherwise) of a type required to be reflected in
such GLB Financial Statements or GLB Regulatory Reports or in
the footnotes thereto which are not fully reflected or
reserved against therein or fully disclosed in a footnote
thereto, except for liabilities, obligations and loss
contingencies which are not material individually or in the
aggregate or which are incurred in the ordinary course of
business, consistent with past practice, and except for
liabilities, obligations and loss contingencies which are
within the subject matter of a specific representation and
warranty herein and subject, in the case of any unaudited
statements, to normal, recurring audit adjustments and the
absence of footnotes.
4.6.4. The
records, systems, controls, data and information of GLB and
its Subsidiaries are recorded, stored, maintained and operated
under means (including any electronic, mechanical or
photographic process, whether computerized or not) that are
under the exclusive ownership and direct control of GLB or its
Subsidiaries or accountants (including all means of access
thereto and therefrom), except for any non-exclusive ownership
and non-direct control that would not reasonably be expected
to have a material adverse effect on the system of internal
accounting controls described below in this
Section 4.6.4. GLB (x) has implemented and maintains
a system of internal control over financial reporting (as
required by Rule 13a-15(a) of the Exchange Act) that is
designed to provide reasonable assurances regarding the
reliability of financial reporting and the preparation of its
financial statements for external purposes in accordance with
GAAP, (y) has implemented and maintains disclosure
controls and procedures (as defined in Rule 13a-15(e) of the
Exchange Act) to ensure that material information relating to
GLB, including its consolidated Subsidiaries, is made known to
the chief executive officer and the chief financial officer of
GLB by others within those entities, and (z) has
disclosed, based on its most recent evaluation prior to the
date hereof, to GLB’s outside auditors and the
audit
committee
of GLB’s Board of Directors (i) any significant
deficiencies and material weaknesses in the design or
operation of internal control over financial reporting (as
defined in Rule 13a-15(f) of the Exchange Act) which are
reasonably likely to adversely affect GLB’s ability to
record, process, summarize and report financial information
and (ii) any fraud, whether or not material, that
involves management or other employees who have a significant
role in GLB’s internal control over financial reporting.
These disclosures (if any) were made in writing by management
to GLB’s auditors and audit committee and a copy has
previously been made available to FNFG. As of the date hereof,
to the knowledge of GLB, its chief executive officer and chief
financial officer will be able to give the certifications
required pursuant to the rules and regulations adopted
pursuant to Section 302 of the Sarbanes-Oxley Act,
without qualification, when next due.
4.6.5. Since
June 30, 2006, (i) neither GLB nor any of its
Subsidiaries nor, to the Knowledge of GLB, any director,
officer, employee, auditor, accountant or representative of
GLB or any of its Subsidiaries has received or otherwise had
or obtained knowledge of any material complaint, allegation,
assertion or claim, whether written or oral, regarding the
accounting or auditing practices, procedures, methodologies or
methods of GLB or any of its Subsidiaries or their respective
internal accounting controls, including any material
complaint, allegation, assertion or claim that GLB or any of
its Subsidiaries has engaged in questionable accounting or
auditing practices, and (ii) no attorney representing GLB
or any of its Subsidiaries, whether or not employed by GLB or
any of its Subsidiaries, has reported evidence of a material
violation of Securities Laws, breach of fiduciary duty or
similar violation by GLB or any of its officers, directors,
employees or agents to the Board of Directors of GLB or any
committee thereof or to any director or officer of
GLB.
4.7.
Taxes.
Except
as set forth in GLB DISCLOSURE SCHEDULE 4.7(a), GLB and the
GLB Subsidiaries that are at least 80 percent owned by GLB are
members of the same affiliated group within the meaning of
Code Section 1504(a). GLB has duly filed all federal, state
and material local tax returns required to be filed by or with
respect to GLB and every GLB Subsidiary on or prior to the
Closing Date, taking into account any extensions (all such
returns, to GLB’s Knowledge, being accurate and correct
in all material respects) and has duly paid or made provisions
for the payment of all material federal, state and local taxes
which have been incurred by or are due or claimed to be due
from GLB and any GLB Subsidiary by any taxing authority or
pursuant to any written tax sharing agreement on or prior to
the Closing Date other than taxes or other charges which (i)
are not delinquent, (ii) are being contested in good faith, or
(iii) have not yet been fully determined. Except as
set forth in GLB DISCLOSURE SCHEDULE 4.7(b), as of the
date of this Agreement, GLB has received no written notice of,
and to GLB’s Knowledge there is no audit examination,
deficiency assessment, tax investigation or refund litigation
with respect to any taxes of GLB or any of its Subsidiaries,
and no claim has been made by any authority in a jurisdiction
where GLB or any of its Subsidiaries do not file tax returns
that GLB or any such Subsidiary is subject to taxation in that
jurisdiction. Except as set forth in GLB DISCLOSURE
SCHEDULE 4.7(c), GLB and its Subsidiaries have not
executed an extension or waiver of any statute of limitations
on the assessment or collection of any material tax due that
is currently in effect. GLB and each of its Subsidiaries has
withheld and paid all taxes required to have been withheld and
paid in connection with amounts paid or owing to any
employee,
independent
contractor, creditor, shareholder or other third party, and
GLB and each of its Subsidiaries, to GLB’s Knowledge,
has timely complied with all applicable information reporting
requirements under Part III, Subchapter A of Chapter 61 of the
Code and similar applicable state and local information
reporting requirements.
4.8.
No Material Adverse Effect.
GLB
has not suffered any Material Adverse Effect since December
31, 2006 and no event has occurred or circumstance arisen
since that date which, in the aggregate, has had or is
reasonably likely to have a Material Adverse Effect on
GLB.
4.9.
Material Contracts; Leases; Defaults.
4.9.1. Except
as set forth in GLB DISCLOSURE SCHEDULE 4.9.1, neither GLB nor
any GLB Subsidiary is a party to or subject to: (i) any
employment, consulting or severance contract or material
arrangement with any past or present officer, director or
employee of GLB or any GLB Subsidiary, except for “at
will” arrangements; (ii) any plan, material arrangement
or contract providing for bonuses, pensions, options, deferred
compensation, retirement payments, profit sharing or similar
material arrangements for or with any past or present
officers, directors or employees of GLB or any GLB Subsidiary;
(iii) any collective bargaining agreement with any labor union
relating to employees of GLB or any GLB Subsidiary; (iv) any
agreement which by its terms limits the payment of dividends
by GLB or any GLB Subsidiary; (v) any instrument evidencing or
related to material indebtedness for borrowed money whether
directly or indirectly, by way of purchase money obligation,
conditional sale, lease purchase, guaranty or otherwise, in
respect of which GLB or any GLB Subsidiary is an obligor to
any person, which instrument evidences or relates to
indebtedness other than deposits, repurchase agreements, FHLB
advances, bankers’ acceptances, and “treasury tax
and loan” accounts and transactions in “federal
funds” in each case established in the ordinary course
of business consistent with past practice, or which contains
financial covenants or other restrictions (other than those
relating to the payment of principal and interest when due)
which would be applicable on or after the Closing Date to FNFG
or any FNFG Subsidiary; (vi) any other agreement, written or
oral, that obligates GLB or any GLB Subsidiary for the payment
of more than $50,000 annually or for the payment of more than
$100,000 over its remaining term, which is not terminable
without cause on 60 days’ or less notice without penalty
or payment, or (vii) any agreement (other than this
Agreement), contract, arrangement, commitment or understanding
(whether written or oral) that restricts or limits in any
material way the conduct of business by GLB or any GLB
Subsidiary (it being understood that any non-compete or
similar provision shall be deemed material).
4.9.2. Each
real estate lease that requires the consent of the lessor or
its agent resulting from the Merger or the Bank Merger by
virtue of the terms of any such lease, is listed in GLB
DISCLOSURE SCHEDULE 4.9.2 identifying the section of the lease
that contains such prohibition or
restriction. Subject to any consents that may be
required as a result of the transactions contemplated by this
Agreement, to its Knowledge, neither GLB nor any GLB
Subsidiary is in default in any material respect under any
material contract, agreement, commitment, arrangement, lease,
insurance policy or other instrument to which it is a party,
by which its assets, business, or operations may be bound or
affected, or under which it or its assets,
business,
or operations receive benefits, and there has not occurred any
event that, with the lapse of time or the giving of notice or
both, would constitute such a default.
4.9.3. True
and correct copies of agreements, contracts, arrangements and
instruments referred to in Section 4.9.1 and 4.9.2 have been
made available to FNFG on or before the date hereof, and are
in full force and effect on the date hereof and neither GLB
nor any GLB Subsidiary (nor, to the Knowledge of GLB, any
other party to any such contract, arrangement or instrument)
has materially breached any provision of, or is in default in
any respect under any term of, any such contract, arrangement
or instrument, except as set forth in GLB DISCLOSURE SCHEDULE
4.9.3(a). Except as listed on GLB DISCLOSURE
SCHEDULE 4.9.3(b), no party to any material contract,
arrangement or instrument will have the right to terminate any
or all of the provisions of any such contract, arrangement or
instrument as a result of the execution of, and the
consummation of the transactions contemplated by, this
Agreement. Except as set forth in GLB DISCLOSURE
SCHEDULE 4.9.3(c), no plan, contract, employment agreement,
termination agreement, or similar agreement or arrangement to
which GLB or any GLB Subsidiary is a party or under which GLB
or any GLB Subsidiary may be liable contains provisions which
permit an employee or independent contractor to terminate it
without cause and continue to accrue future benefits
thereunder. Except as set forth in GLB DISCLOSURE
SCHEDULE 4.9.3(d), no such agreement, plan, contract, or
arrangement (x) provides for acceleration in the vesting of
benefits or payments due thereunder upon the occurrence of a
change in ownership or control of GLB or any GLB Subsidiary or
upon the occurrence of a subsequent event; or (y) requires GLB
or any GLB Subsidiary to provide a benefit in the form of GLB
Common Stock or determined by reference to the value of GLB
Common Stock.
4.9.4. Since
December 31, 2006, through and including the date of this
Agreement, except as publicly disclosed by GLB in the
Securities Documents filed or furnished by GLB prior to the
date hereof, neither GLB nor any GLB Subsidiary has
(i) except for (A) normal increases for employees
(other than officers and directors subject to the reporting
requirements of Section 16(a) of the Exchange Act) made
in the ordinary course of business consistent with past
practice, or (B) as required by applicable law, increased
the wages, salaries, compensation, pension, or other fringe
benefits or perquisites payable to any executive officer,
employee, or director from the amount thereof in effect as of
December 31, 2006 (which amounts have been previously
made available to FNFG), granted any severance or termination
pay, entered into any contract to make or grant any severance
or termination pay (except as required under the terms of
agreements or severance plans listed on GLB DISCLOSURE
SCHEDULE 4.13.1, as in effect as of the date hereof), or
paid any bonus other than the customary year-end bonuses in
amounts consistent with past practice, (ii) granted any
options to purchase shares of GLB Common Stock, or any right
to acquire any shares of its capital stock to any executive
officer, director or employee other than grants to employees
(other than officers subject to the reporting requirements of
Section 16(a) of the Exchange Act) made in the ordinary
course of business consistent with past practice under GLB
Option Plans, (iii) increased or established any bonus,
insurance, severance, deferred compensation, pension,
retirement, profit sharing, stock option (including, without
limitation, the granting of stock options, stock appreciation
rights, performance awards, or restricted stock awards), stock
purchase or other employee benefit plan, (iv) made any
material election for federal or state income tax purposes,
(v) made any material change in the credit policies or
procedures of GLB or any of its
Subsidiaries,
the effect of which was or is to make any such policy or
procedure less restrictive in any material respect,
(vi) made any material acquisition or disposition of any
assets or properties, or any contract for any such acquisition
or disposition entered into other than loans and loan
commitments, (vii) entered into any lease of real or
personal property requiring annual payments in excess of
$100,000, other than in connection with foreclosed property or
in the ordinary course of business consistent with past
practice, (viii) changed any accounting methods,
principles or practices of GLB or its Subsidiaries affecting
its assets, liabilities or businesses, including any
reserving, renewal or residual method, practice or policy or
(ix) suffered any strike, work stoppage, slow-down, or
other labor disturbance.
4.10.
Ownership of Property; Insurance
Coverage.
4.10.1. Except
as set forth in GLB DISCLOSURE SCHEDULE 4.10, GLB and
each GLB Subsidiary has good and, as to real property,
marketable title to all material assets and properties owned
by GLB or each GLB Subsidiary in the conduct of its
businesses, whether such assets and properties are real or
personal, tangible or intangible, including assets and
property reflected in the balance sheets contained in the GLB
Regulatory Reports and in the GLB Financial Statements or
acquired subsequent thereto (except to the extent that such
assets and properties have been disposed of in the ordinary
course of business, since the date of such balance sheets),
subject to no material encumbrances, liens, mortgages,
security interests or pledges, except (i) those items
which secure liabilities for public or statutory obligations
or any discount with, borrowing from or other obligations to
FHLB, inter-bank credit facilities, or any transaction by an
GLB Subsidiary acting in a fiduciary capacity, (ii) statutory
liens for amounts not yet delinquent or which are being
contested in good faith, (iii) non-monetary liens affecting
real property which do not materially and adversely affect the
value or use of such real property, and (iv) those described
and reflected in the GLB Financial Statements. GLB and the GLB
Subsidiaries, as lessee, have the right under valid and
existing leases of real and personal properties used by GLB
and its Subsidiaries in the conduct of their businesses to
occupy or use all such properties as presently occupied and
used by each of them.
4.10.2. With
respect to all material agreements pursuant to which GLB or
any GLB Subsidiary has purchased securities subject to an
agreement to resell, if any, GLB or such GLB Subsidiary, as
the case may be, has a lien or security interest (which to
GLB’s Knowledge is a valid, perfected first lien) in the
securities or other collateral securing the repurchase
agreement, and the value of such collateral equals or exceeds
the amount of the debt secured thereby.
4.10.3. GLB
and each GLB Subsidiary currently maintain insurance
considered by each of them to be reasonable for their
respective operations. Neither GLB nor any GLB
Subsidiary, except as disclosed in GLB DISCLOSURE
SCHEDULE 4.10.3(a), has received notice from any
insurance carrier during the past two years that (i) such
insurance will be canceled or that coverage thereunder will be
reduced or eliminated, or (ii) premium costs (other than with
respect to health or disability insurance) with respect to
such policies of insurance will be substantially increased.
There are presently no material claims pending under such
policies of insurance and no notices have been given by GLB or
any GLB Subsidiary under such policies (other than with
respect to health or disability insurance). All such insurance
is valid and enforceable and in full force and effect, and
within the last two years GLB and each GLB
Subsidiary
has received each type of insurance coverage for which it has
applied and during such periods has not been denied
indemnification for any material claims submitted under any of
its insurance policies. GLB DISCLOSURE SCHEDULE 4.10.3(b)
identifies all material policies of insurance maintained by
GLB and each GLB Subsidiary as well as the other matters
required to be disclosed under this Section.
4.11.
Legal Proceedings.
Except
as set forth in GLB DISCLOSURE SCHEDULE 4.11, neither GLB
nor any GLB Subsidiary is a party to any, and there are no
pending or, to GLB’s Knowledge, threatened legal,
administrative, arbitration or other proceedings, claims
(whether asserted or unasserted), actions or governmental
investigations or inquiries of any nature (i) against GLB or
any GLB Subsidiary, (ii) to which GLB or any GLB
Subsidiary’s assets are or may be subject, (iii)
challenging the validity or propriety of any of the
transactions contemplated by this Agreement, or (iv) which
could adversely affect the ability of GLB or GBSB to perform
under this Agreement, except, in each of (i) through (iv)
above, for any proceeding, claim, action, investigation or
inquiry which, if adversely determined, individually or in the
aggregate, would not be reasonably expected to have a Material
Adverse Effect on GLB.
4.12.
Compliance With Applicable Law.
4.12.1. To
GLB’s Knowledge, and except as set forth in GLB
DISCLOSURE SCHEDULE 4.12.1, each of GLB and each GLB
Subsidiary is in compliance in all material respects with all
applicable federal, state, local and foreign statutes, laws,
regulations, ordinances, rules, judgments, orders or decrees
applicable to it, its properties, assets and deposits, its
business, and its conduct of business and its relationship
with its employees, including, without limitation, the USA
Patriot Act, the Equal Credit Opportunity Act, the Fair
Housing Act, the Community Reinvestment Act of 1977, the Home
Mortgage Disclosure Act, and all other applicable fair lending
laws and other laws relating to discriminatory business
practices and neither GLB nor any GLB Subsidiary has received
any written notice to the contrary. The Board of
Directors of GBSB has adopted and GBSB has implemented an
anti-money laundering program that contains adequate and
appropriate customer identification verification procedures
that has not been deemed ineffective by any Governmental
Authority and that meets the requirements of Sections 352 and
326 of the USA Patriot Act and the regulations
thereunder.
4.12.2. Each
of GLB and each GLB Subsidiary has all material permits,
licenses, authorizations, orders and approvals of, and has
made all filings, applications and registrations with, all
Governmental Entities and Bank Regulators that are required in
order to permit it to own or lease its properties and to
conduct its business as presently conducted; all such permits,
licenses, certificates of authority, orders and approvals are
in full force and effect and, to the Knowledge of GLB, no
suspension or cancellation of any such permit, license,
certificate, order or approval is threatened or will result
from the consummation of the transactions contemplated by this
Agreement, subject to obtaining Regulatory
Approvals.
4.12.3. For
the period beginning January 1, 2003 as to GBSB, and for
the period beginning June 30, 2006 for GLB and each GLB
Subsidiary (other than GBSB), neither GLB nor any GLB
Subsidiary has received any written notification or, to
GLB’s Knowledge, any other
communication
from any Bank Regulator (i) asserting that GLB or any GLB
Subsidiary is not in material compliance with any of the
statutes, regulations or ordinances which such Bank Regulator
enforces; (ii) threatening to revoke any license, franchise,
permit or governmental authorization which is material to GLB
or any GLB Subsidiary; (iii) requiring, or threatening to
require, GLB or any GLB Subsidiary, or indicating that GLB or
any GLB Subsidiary may be required, to enter into a cease and
desist order, agreement or memorandum of understanding or any
other agreement with any federal or state governmental agency
or authority which is charged with the supervision or
regulation of banks or engages in the insurance of bank
deposits restricting or limiting, or purporting to restrict or
limit, in any material respect the operations of GLB or any
GLB Subsidiary, including without limitation any restriction
on the payment of dividends; or (iv) directing, restricting or
limiting, or purporting to direct, restrict or limit, in any
manner the operations of GLB or any GLB Subsidiary, including
without limitation any restriction on the payment of dividends
(any such notice, communication, memorandum, agreement or
order described in this sentence is hereinafter referred to as
a “GLB Regulatory Agreement”). Neither GLB nor any
GLB Subsidiary (other than GBSB) has consented to or entered
into any GLB Regulatory Agreement that is currently in effect
or that was in effect since June 30, 2006, and GBSB has not
consented to or entered into any GLB Regulatory Agreement that
is currently in effect or that was in effect since June 30,
2003. The most recent regulatory rating given to
GBSB as to compliance with the Community Reinvestment Act
(“CRA”) is satisfactory or better.
4.12.4. Since
December 31, 2006, GLB has been and is in compliance in all
material respects with (i) the applicable provisions of
the Sarbanes-Oxley Act and (ii) the applicable listing
and corporate governance rules and regulations of the
NYSE. GLB DISCLOSURE SCHEDULE 4.12.4 sets
forth, as of July 31, 2007, a schedule of all executive
officers and directors of GLB who have outstanding loans from
GLB or GBSB, and there has been no default on, or forgiveness
or waiver of, in whole or in part, any such loan during the
two years immediately preceding the date hereof.
4.13.
Employee Benefit Plans.
4.13.1. GLB
DISCLOSURE SCHEDULE 4.13.1 includes a descriptive list of all
existing bonus, incentive, deferred compensation, pension,
retirement, profit-sharing, thrift, savings, employee stock
ownership, stock bonus, stock purchase, restricted stock,
stock option, stock appreciation, phantom stock, severance,
welfare benefit plans (including paid time off policies and
other benefit policies and procedures), fringe benefit plans,
employment, severance and change in control agreements and all
other material benefit practices, policies and arrangements
maintained by GLB or any GLB Subsidiary in which any employee
or former employee, consultant or former consultant or
director or former director of GLB or any GLB Subsidiary
participates or to which any such employee, consultant or
director is a party or is otherwise entitled to receive
benefits (the “GLB Compensation and Benefit
Plans”). Except as set forth in GLB
DISCLOSURE SCHEDULE 4.13.1, neither GLB nor any of its
Subsidiaries has any commitmen
