EXHIBIT 2.1
AGREEMENT AND PLAN OF MERGER
By and Between
WASHINGTON MUTUAL, INC.
and
BANK UNITED CORP.
Dated as of August 18, 2000
TABLE OF CONTENTS
Page No.
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1. DEFINITIONS..............................................................1
1.1 Defined Terms......................................................1
1.2 Other Definitional Provisions......................................3
2. THE MERGER...............................................................4
2.1 The Merger.........................................................4
2.2 Effective Time.....................................................4
2.3 Effects of the Merger..............................................4
2.4 Closing of the Merger..............................................4
2.5 Conversion of Bank United Corp. Capital Stock......................4
2.6 Dissenting Shares..................................................6
2.7 Washington Mutual Common Stock; Washington Mutual Preferred Stock..7
2.8 Options............................................................7
2.9 Articles of Incorporation..........................................7
2.10 Bylaws.............................................................8
2.11 Board of Directors.................................................8
2.12 Tax Consequences...................................................8
2.13 Stock Option Agreement.............................................8
2.14 Reservation of Right to Revise Structure...........................8
3. EXCHANGE OF SHARES.......................................................9
3.1 Washington Mutual to Make Shares Available.........................9
3.2 Exchange of Shares.................................................9
4. REPRESENTATIONS AND WARRANTIES OF BANK UNITED CORP......................11
4.1 Corporate Organization............................................11
4.2 Capitalization....................................................12
4.3 Authority; No Violation...........................................14
4.4 Consents and Approvals............................................15
4.5 Reports...........................................................16
4.6 Financial Statements..............................................16
4.7 Broker's Fees.....................................................17
4.8 Absence of Certain Changes or Events..............................17
4.9 Legal Proceedings.................................................17
4.10 Taxes.............................................................18
4.11 Employees; Employee Benefit Plans.................................19
4.12 SEC Reports.......................................................21
4.13 Compliance with Applicable Law....................................21
4.14 Certain Contracts.................................................21
4.15 Agreements with Regulatory Agencies...............................22
4.16 Undisclosed Liabilities...........................................22
4.17 Anti-takeover Provisions..........................................23
4.18 Bank United Corp. Information.....................................23
4.19 Title to Property.................................................23
4.20 Insurance.........................................................24
4.21 Environmental Liability...........................................24
4.22 Opinion of Financial Advisor......................................25
4.23 Patents, Trademarks, Etc..........................................25
4.24 Loan Matters......................................................25
4.25 Community Reinvestment Act Compliance.............................26
4.26 Labor Matters.....................................................26
5. REPRESENTATIONS AND WARRANTIES OF WASHINGTON MUTUAL.....................27
5.1 Corporate Organization............................................27
5.2 Capitalization....................................................27
5.3 Authority; No Violation...........................................28
5.4 Consents and Approvals............................................29
5.5 Reports...........................................................29
5.6 Financial Statements..............................................29
5.7 Broker's Fees.....................................................30
5.8 Absence of Certain Changes or Events..............................30
5.9 Legal Proceedings.................................................30
5.10 Taxes.............................................................31
5.11 SEC Reports.......................................................31
5.12 Compliance with Applicable Law....................................31
5.13 Agreements with Regulatory Agencies...............................31
5.14 Undisclosed Liabilities...........................................32
5.15 Rights Agreement; Anti-takeover Provisions........................32
5.16 Washington Mutual Information.....................................32
5.17 Environmental Liability...........................................33
5.18 Opinion of Financial Advisor......................................33
5.19 Community Reinvestment Act Compliance.............................33
6. COVENANTS RELATING TO CONDUCT OF BUSINESS...............................34
6.1 Conduct of Business Prior to the Effective Time...................34
6.2 Bank United Corp. Forbearances....................................34
6.3 No Fundamental Washington Mutual Changes..........................38
7. ADDITIONAL AGREEMENTS...................................................38
7.1 Regulatory Matters................................................38
7.2 Access to Information.............................................39
7.3 Stockholder Approval..............................................40
7.4 Legal Conditions to Merger........................................40
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7.5 Affiliates........................................................41
7.6 Stock Exchange Listing............................................41
7.7 Employees; Employee Benefit Plans.................................41
7.8 Indemnification; Directors' and Officers' Insurance...............43
7.9 Additional Agreements.............................................44
7.10 Advice of Changes.................................................45
7.11 Subsequent Interim and Annual Financial Statements................45
7.12 CPR Trust.........................................................45
7.13 Reorganization....................................................46
7.14 Exemption from Liability Under Section 16(b)......................46
7.15 Merger............................................................47
8. CONDITIONS PRECEDENT....................................................47
8.1 Conditions to Each Party's Obligation to Effect the Merger........47
8.2 Conditions to Obligations of Washington Mutual....................48
8.3 Conditions to Obligations of Bank United Corp.....................49
9. TERMINATION AND AMENDMENT...............................................50
9.1 Termination.......................................................50
9.2 Effect of Termination.............................................52
9.3 Amendment.........................................................53
9.4 Extension; Waiver.................................................53
10. GENERAL PROVISIONS......................................................54
10.1 Nonsurvival of Representations, Warranties and Agreements.........54
10.2 Expenses..........................................................54
10.3 Notices...........................................................54
10.4 Interpretation....................................................55
10.5 Counterparts......................................................55
10.6 Entire Agreement..................................................56
10.7 Governing Law.....................................................56
10.8 Severability......................................................56
10.9 Publicity.........................................................56
10.10 Assignment; Third Party Beneficiaries.............................57
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EXHIBITS
Exhibit 2.12 - Stock Option Agreement
Exhibit 4.4 - Trust Agreement
Exhibit 6.2(e) - Bonuses for Certain Employees
Exhibit 8.2(f) - Commitment Agreement
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AGREEMENT AND PLAN OF MERGER
This AGREEMENT AND PLAN OF MERGER, dated as of August 18, 2000 (as
amended, supplemented or otherwise modified from time to time, this
"Agreement"), is entered into by and between WASHINGTON MUTUAL, INC., a
Washington corporation ("Washington Mutual") and BANK UNITED CORP., a Delaware
corporation ("Bank United Corp.").
The respective Boards of Directors of each of Washington Mutual and
Bank United Corp. have determined that it is in the best interests of their
respective companies and stockholders to consummate the business combination
transaction provided for herein. It is the intention of the parties to this
Agreement that the business combination contemplated hereby be treated as a
"reorganization" within the meaning of Section 368 of the Internal Revenue Code
of 1986, as amended (the "Code").
Simultaneously with the execution of this Agreement, Washington
Mutual is entering into employment agreements and litigation trustee agreements,
as applicable, with each of the Bank United Corp. executives listed on Exhibit A
hereto.
Therefore, in consideration of the mutual covenants,
representations, warranties and agreements contained herein, and intending to be
legally bound hereby, the parties agree as follows:
1. DEFINITIONS
1.1 Defined Terms. The following terms shall have the meanings defined
for such terms in the Sections set forth below:
Term Section
---- -------
401(k) Plan 7.7(a)
Agreement Preamble
Articles of Amendment 4.4
Articles of Merger 2.2
Association Merger 4.3(a)
Bank United Corp. Preamble
Bank United Corp. Capital Stock 2.5(b)
Bank United Corp. Common Stock 2.5(a)
Bank United Corp. Contract 4.14(a)
Bank United Corp. Disclosure Schedule 4.2(a)
Bank United Corp. Option 2.8
Bank United Corp. PIES 2.5(b)
Bank United Corp. Preferred Stock 4.2(a)
Bank United Corp. Reports 4.12
Bank United Corp. Stock Option Plans 2.8
Term Section
---- -------
Business Day 2.4
Certificate of Merger 2.2
Certificates 2.5(d)
Claims 7.8(a)
Class B Common Stock 4.2(a)
Closing 2.4
Closing Date 2.4
Code Preamble
Commitment 8.2(h)
Common Certificate 2.5(c)
Confidentiality Agreement(s) 7.2(c)
Controlled Entity 4.2(b)
CPR Certificates 4.4
CPR Trust 4.4
CPR Trust Registration Statement 4.4
CRA 4.25
Delaware Secretary 2.2
DGCL 2.1
Dissenting Shares 2.6
DPC Shares 2.5(e)
Effective Time 2.2
Environmental Laws 4.21
ERISA 4.11(a)
ERISA Affiliate 4.11(a)
Exchange Act 4.6
Exchange Agent 3.1
Exchange Fund 3.1
Exchange Ratio 2.5(a)
FDIC 4.1(d)
FHLB 4.1(d)
Freddie Mac 4.24(d)
GAAP 4.1(a)
Ginnie Mae 4.24(d)
Governmental Entity 4.4
HOLA 4.1(a)
Holdings 4.1(c)
HUD 4.24(d)
Indemnified Parties 7.8(a)
Initial Termination Fee 9.2(b)
Injunction 8.1(f)
Liens 4.2(b)
Litigation 4.4
Loans 4.23(a)
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Term Section
---- -------
Material Adverse Effect 4.1(a)
Merger 2.1
Merger Consideration 2.13
NYSE 3.2(e)
OTS 4.1(d)
PBGC 4.11(c)
PIES Certificate 2.5(d)
Plans 4.11(a)
Proxy Statement/Prospectus 4.4
Regulatory Agreement 4.15
Representatives 6.2(f)
Requisite Regulatory Approvals 8.1(c)
S-4 4.4
SAIF 4.1(d)
SEC 4.4
Second Merger 4.3(a)
Securities Act 4.12
Stock Option Agreement 2.12
Subsequent Termination Fee 9.2(b)
Subsidiary 2.5(a)
Surviving Company 2.1
Takeover Proposal 6.2(f)
Tax Returns 4.10(c)
Taxes 4.10(b)
Termination Fee 9.2(b)
Trust Account Shares 2.5(e)
Trust Agreement 4.4
Trust Indenture Act 7.1(b)
VA 4.24(d)
Washington Mutual Preamble
Washington Mutual Capital Stock 2.5(b)
Washington Mutual Common Stock 2.5(a)
Washington Mutual Disclosure Schedule 5.2
Washington Mutual PIES 2.5(b)
Washington Mutual Regulatory 5.13
Agreement
Washington Mutual Reports 5.11
Washington Mutual Rights 2.5(a)
Washington Mutual Rights Agreement 5.2
Washington Secretary 2.2
WBCA 2.1
1.2 Other Definitional Provisions. The meanings given to terms defined
herein shall be equally applicable to both the singular and plural forms of
such terms.
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2. THE MERGER
2.1 The Merger. Subject to the terms and conditions of this Agreement,
in accordance with the Washington Business Corporation Act (the "WBCA") and the
Delaware General Corporation Law (the "DGCL") at the Effective Time (as defined
in Section 2.2 hereof), Bank United Corp. shall merge (the "Merger") with and
into Washington Mutual. Washington Mutual shall be the surviving corporation
(hereinafter sometimes called the "Surviving Company") in the Merger, and shall
continue its corporate existence under the laws of the State of Washington. The
name of the Surviving Company shall be Washington Mutual, Inc. Upon consummation
of the merger, the separate corporate existence of Bank United Corp. shall
terminate.
2.2 Effective Time. The Merger shall become effective as set forth in
the articles of merger (the "Articles of Merger") which shall be filed with the
Secretary of State of the State of Washington (the "Washington Secretary") and
in the certificate of merger (the "Certificate of Merger") which shall be filed
with the Secretary of State of the State of Delaware (the "Delaware Secretary"),
on the Closing Date (as defined in Section 2.4 hereof). The term "Effective
Time" shall mean the time on the Closing Date when the Merger becomes effective,
as set forth in the Articles of Merger and the Certificate of Merger.
2.3 Effects of the Merger. At and after the Effective Time, the Merger
shall have the effects set forth in Chapter 11 of the WBCA and Section 259 of
the DGCL.
2.4 Closing of the Merger. Subject to the terms and conditions of this
Agreement, the closing of the Merger (the "Closing") will take place at 9:00
a.m. Pacific time, on a date to be specified by the parties, which shall be the
first Business Day which is at least five Business Days after the satisfaction
or waiver (subject to applicable law) of the latest to occur of the conditions
set forth in Section 8 hereof, other than conditions which by their terms are to
be satisfied at Closing, or such other date or time as the parties may mutually
agree (the "Closing Date"). For purposes of this Agreement, a "Business Day"
shall mean any day that is not a Saturday, a Sunday or other day on which the
office of the Washington Secretary or the Delaware Secretary is closed.
2.5 Conversion of Bank United Corp. Capital Stock. At the Effective
Time, without any action on the part of Washington Mutual, Bank United Corp. or
the holder of any of the shares of common stock of Bank United Corp., the Merger
shall be effected in accordance with the following terms:
(a) Each share of the Class A common stock, par value $0.01 per
share, of Bank United Corp. (the "Bank United Corp. Common Stock") issued and
outstanding immediately prior to the Effective Time (other than Dissenting
Shares (as defined in Section 2.6), if any, and shares of Bank United Corp.
Common Stock held (x) in Bank United Corp.'s treasury or (y) directly by
Washington Mutual (except for Trust Account Shares and DPC Shares, as such terms
are defined below)) shall be converted into the right to receive 1.3 shares (the
"Exchange Ratio") of common stock, no par value, of Washington Mutual
("Washington Mutual Common Stock"), together with the number of rights
("Washington Mutual Rights") issued pursuant to the
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Washington Mutual Rights Agreement (as defined in Section 5.2 hereof) associated
therewith. For purposes of this Agreement, "Subsidiary" means, with respect to
any person, any corporation, partnership, joint venture, limited liability
company or other entity that is consolidated with such person for financial
reporting purposes.
(b) Each share of Bank United Corp.'s 8% Corporate Premium Income
Equity Securities (including the shares of Redeemable Preferred Stock Series B
of Bank United Corp. issued and outstanding in connection therewith, the "Bank
United Corp. PIES") issued and outstanding immediately prior to the Effective
Time shall be converted into the right to receive one share of Washington
Mutual's 8% Corporate Premium Income Equity Securities (including the shares of
preferred stock of Washington Mutual to be issued and outstanding in connection
therewith, the "Washington Mutual PIES"). The terms of the Washington Mutual
PIES shall be substantially the same as the terms of the Bank United Corp. PIES.
For purposes of this Agreement, (i) the Bank United Corp. Common Stock and Bank
United Corp. PIES are sometimes collectively referred to herein as the "Bank
United Corp. Capital Stock" and (ii) the Washington Mutual Common Stock and
Washington Mutual PIES and sometimes collectively referred to herein as the
"Washington Mutual Capital Stock."
(c) All of the shares of Bank United Corp. Common Stock converted
into the right to receive the Washington Mutual Common Stock pursuant to this
Section 2.5 shall no longer be outstanding and shall automatically be cancelled
and shall cease to exist as of the Effective Time, and each certificate (each a
"Common Certificate") previously representing any such shares shall thereafter
represent solely the right to receive (i) a certificate representing the number
of whole shares of Washington Mutual Common Stock and (ii) the cash in lieu of
fractional shares into which the shares of Bank United Corp. Common Stock
represented by such Common Certificate have been converted pursuant to this
Section 2.5 and Section 3.2 hereof. Common Certificates previously representing
shares of Bank United Corp. Common Stock shall be exchanged for certificates
representing shares of Washington Mutual Common Stock upon the surrender of such
Common Certificates in accordance with Section 3.2 hereof, without any interest
thereon.
(d) All of the shares of Bank United Corp. PIES converted into the
right to receive Washington Mutual PIES pursuant to this Section 2.5 shall no
longer be outstanding and shall automatically be cancelled and shall cease to
exist as of the Effective Time, and each certificate (each a "PIES Certificate,"
and collectively with the Common Certificates, the "Certificates") previously
representing any such shares of Bank United Corp. PIES shall thereafter
represent the right to receive a certificate representing the number of shares
of corresponding Washington Mutual PIES into which the shares of Bank United
Corp. PIES represented by such PIES Certificate have been converted pursuant to
this Section 2.5. PIES Certificates previously representing shares of Bank
United Corp. PIES shall be exchanged for certificates representing shares of
corresponding Washington Mutual PIES issued in consideration therefor upon the
surrender of such PIES Certificates in accordance with Section 3.2 hereof,
without any interest thereon.
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(e) At the Effective Time, all shares of Bank United Corp. Capital
Stock that are owned by Bank United Corp. as treasury stock and all shares of
Bank United Corp. Capital Stock that are owned directly or indirectly by
Washington Mutual or Bank United Corp. or any of their respective Subsidiaries
(other than shares of Bank United Corp. Capital Stock held directly or
indirectly in trust accounts, managed accounts and the like or otherwise held in
a fiduciary or nominee capacity that are beneficially owned by third parties
(any such shares being referred to herein as "Trust Account Shares") and other
than any shares of Bank United Corp. Capital Stock held by Washington Mutual or
Bank United Corp. or any of their respective Subsidiaries in respect of a debt
previously contracted (any such shares of Bank United Corp. Capital Stock being
referred to herein as "DPC Shares")) shall be cancelled and shall cease to exist
and no capital stock or warrants of Washington Mutual or other consideration
shall be delivered in exchange therefor.
(f) If prior to the Effective Time the outstanding shares of Bank
United Corp. Common Stock or the outstanding shares of Washington Mutual Common
Stock shall have been increased, decreased, changed into or exchanged for a
different number or kind of shares or securities as a result of a
reorganization, recapitalization, reclassification, stock dividend, stock split,
reverse stock split, or other similar change in Bank United Corp.'s
capitalization or Washington Mutual's capitalization, respectively, then an
appropriate and proportionate adjustment shall be made to the Exchange Ratio.
2.6 Dissenting Shares. Notwithstanding anything to the contrary
contained in this Agreement, the shares of Bank United Corp. Common Stock issued
and outstanding immediately prior to the Effective Time held by holders (if any)
who have not voted in favor of the Merger or consented thereto in writing and
who are eligible to and who have demanded appraisal rights (if any) with respect
thereto in accordance with Section 262 of the DGCL and, as of the Effective
Time, shall not have failed to perfect or shall not have effectively withdrawn
or lost their rights to appraisal and payment (if any) under Section 262 of the
DGCL (the "Dissenting Shares") shall not be converted into the right to receive
shares of Washington Mutual Common Stock as described in Section 2.5, but
holders of such shares shall instead be entitled to receive payment of the
appraised value of such Dissenting Shares in accordance with the provisions of
such Section 262, except that any Dissenting Shares held by a holder which shall
have failed to perfect or shall have effectively withdrawn or lost its right to
appraisal and payment under Section 262 of the DGCL shall thereupon be deemed to
have been converted into the right to receive shares of Washington Mutual Common
Stock as described in Section 2.5, without interest thereon. In addition, to the
extent required under the DGCL, holders of Dissenting Shares which have
perfected and have not effectively withdrawn or lost their rights to appraisal
and payment under Section 262 of the DGCL shall be required to surrender all CPR
Certificates relating to the Dissenting Shares. Bank United Corp. shall give
Washington Mutual (i) prompt notice of any written demands for appraisal of any
shares, attempted withdrawals of such demands, and any other instruments served
pursuant to the DGCL received by Bank United Corp. relating to stockholders'
rights of appraisal and (ii) the opportunity to direct all negotiations and
proceedings with respect to demands for appraisal under the DGCL. Bank United
Corp. shall not, except with the prior written consent of Washington Mutual,
voluntarily make any payment
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with respect to any demands for appraisals of capital stock of Bank United
Corp., offer to settle or settle any such demands or approve any withdrawal of
any such demands.
2.7 Washington Mutual Common Stock; Washington Mutual Preferred Stock.
At and after the Effective Time, each share of Washington Mutual Common Stock
and each share of any preferred stock of Washington Mutual issued and
outstanding immediately prior to the Effective Time shall remain an issued and
outstanding share of common stock or preferred stock, as the case may be, of
Washington Mutual and shall not be affected by the Merger.
2.8 Options. At the Effective Time, each option granted by Bank United
Corp. to purchase shares of Bank United Corp. Common Stock (each a "Bank United
Corp. Option") which is outstanding and unexercised immediately prior thereto
shall cease to represent a right to acquire shares of Bank United Corp. Common
Stock and shall be converted automatically into (i) the right to receive, upon
exercise of the option, one CPR Certificate for each share of Bank United Corp.
Common Stock that would have been issuable upon exercise in full of such Bank
United Corp. Option and (ii) an option to purchase shares of Washington Mutual
Common Stock in an amount and at an exercise price determined as provided below
(and otherwise subject to the terms of the Bank United Corp. 1999 Stock
Incentive Plan, as amended to date, the Bank United Corp. 1996 Stock Incentive
Plan, as amended to date, the Bank United Corp. 2000 Stock Incentive Plan, as
amended to date, the Executive Management Compensation Program, as amended to
date or the Bank United Corp. Director Stock Plan, as amended to date, as
applicable (collectively, the "Bank United Corp. Stock Option Plans"), and the
agreements evidencing grants thereunder):
(a) the number of shares of Washington Mutual Common Stock to be
subject to the new option shall be equal to the product of the number of shares
of Bank United Corp. Common Stock subject to the original option and the
Exchange Ratio, provided that any fractional shares of Washington Mutual Common
Stock resulting from such multiplication shall be rounded to the nearest share;
and
(b) the exercise price per share of Washington Mutual Common Stock
under the new option shall be equal to the exercise price per share of Bank
United Corp. Common Stock under the original option divided by the Exchange
Ratio, provided that such exercise price shall be rounded to the nearest cent.
In the case of any options which are "incentive stock options" (as defined
in Section 422 of the Code), the exercise price, the number of shares
purchasable pursuant to such options and the terms and conditions of exercise of
such options shall be determined in order to comply with Section 424(a) of the
Code. The duration and other terms of each new option shall be the same as the
applicable original option except that all references to Bank United Corp. shall
be deemed to be references to Washington Mutual.
2.9 Articles of Incorporation. At the Effective Time, the Articles of
Incorporation of Washington Mutual, as in effect immediately prior to the
Effective Time, shall be the Articles of
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Incorporation of the Surviving Company, until thereafter amended in accordance
with applicable law.
2.10 Bylaws. At the Effective Time, the Bylaws of Washington Mutual, as
in effect immediately prior to the Effective Time, shall be the Bylaws of the
Surviving Company until thereafter amended in accordance with applicable law.
2.11 Board of Directors. The directors of Washington Mutual immediately
prior to the Effective Time shall continue to be the directors of the Surviving
Company, each to hold office in accordance with the Articles of Incorporation
and Bylaws of the Surviving Company, until their respective successors are duly
elected or appointed (as the case may be) and qualified.
2.12 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.
2.13 Stock Option Agreement. As an inducement to Washington Mutual to
continue to pursue the transactions contemplated by this Agreement, Bank United
Corp. is granting to Washington Mutual an option pursuant to the Stock Option
Agreement in the form of Exhibit 2.12 hereto (the "Stock Option Agreement").
2.14 Reservation of Right to Revise Structure. Washington Mutual may at
any time change the method of effecting the business combination contemplated by
this Agreement if and to the extent that it deems such a change to be desirable,
including, without limitation, to provide for a merger of Bank United Corp. with
a wholly-owned subsidiary of Washington Mutual; provided, however, that no such
change shall (A) alter or change the amount or kind of consideration to be
received by holders of Bank United Corp. Capital Stock under this Agreement (the
"Merger Consideration"), or (B) adversely affect the anticipated tax
consequences of the Merger to the holders of Bank United Corp. Capital Stock as
a result of receiving the Merger Consideration, or (C) materially impede or
delay consummation of the Merger. In the event Washington Mutual elects to make
such a change, the parties agree to execute appropriate documents to reflect the
change.
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3. EXCHANGE OF SHARES
3.1 Washington Mutual to Make Shares Available. At or prior to the
Effective Time, Washington Mutual shall deposit, or shall cause to be deposited,
with either a bank or trust company reasonably acceptable to each of Washington
Mutual and Bank United Corp. or with Washington Mutual's transfer agent (the
"Exchange Agent"), for the benefit of the holders of Certificates, for exchange
in accordance with this Section 3, certificates representing the shares of
Washington Mutual Common Stock and Washington Mutual PIES and an estimated
amount of cash that may be payable in lieu of any fractional shares (such cash
(plus any additional cash necessary if the estimated amount of cash is
insufficient to pay in lieu of fractional share interests) and, certificates for
shares of Washington Mutual Common Stock and Washington Mutual PIES, together
with any dividends or distributions with respect thereto, being hereinafter
referred to as the "Exchange Fund") to be issued pursuant to Section 2.5 and
paid pursuant to Section 3.2(a) in exchange for outstanding shares of Bank
United Corp. Capital Stock.
3.2 Exchange of Shares.
(a) As soon as practicable after the Effective Time, the Exchange
Agent shall mail to each holder of record of a Certificate or Certificates a
form of letter of transmittal (which 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) and instructions for use in
effecting the surrender of the Certificates in exchange for certificates
representing, as the case may be, the shares of Washington Mutual Common Stock
or Washington Mutual PIES and cash in lieu of fractional shares of Washington
Mutual Common Stock, if any, into which the shares of Bank United Corp. Capital
Stock represented by such Certificate or Certificates shall have been converted
pursuant to this Agreement. 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 Washington Mutual Common Stock to which
such former holder of Bank United Corp. Common Stock shall have become entitled
pursuant to the provisions of Section 2 hereof, and (ii) a certificate
representing that number of shares of Washington Mutual PIES to which such
former holder of Bank United Corp. PIES shall have become entitled pursuant to
the provisions of Section 2 hereof and (iii) a check representing the amount of
cash (if any) payable in lieu of fractional shares of Washington Mutual Common
Stock, which such former holder has the right to receive in respect of the
Common Certificate surrendered pursuant to the provisions of this Section 3,
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.
(b) No dividends or other distributions with a record date after the
Effective Time with respect to Washington Mutual Common Stock or Washington
Mutual PIES shall be paid to the holder of any unsurrendered Certificate until
the holder thereof shall surrender such Certificate in accordance with this
Section 3. After the surrender of a Certificate in accordance with this Section
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
9
respect to shares of Washington Mutual Common Stock or Washington
Mutual PIES represented by such Certificate.
(c) If any certificate representing shares of Washington Mutual
Common Stock or Washington Mutual PIES is to be issued in the name of other than
the registered holder of the Certificate surrendered in exchange therefor, it
shall be a condition of the issuance thereof that the Certificate so surrendered
shall be properly endorsed (or accompanied by an appropriate instrument of
transfer) and otherwise in proper form for transfer, and that the person
requesting such exchange shall pay to the Exchange Agent in advance any transfer
or other taxes required by reason of the issuance of a certificate representing
shares of Washington Mutual Common Stock or Washington Mutual PIES in the name
of and payment of cash to any person other than the registered holder of the
Certificate surrendered, or required for any other reason relating to such
holder or requesting person, or shall establish to the reasonable satisfaction
of the Exchange Agent that such tax has been paid or is not payable.
(d) At or after the Effective Time, there shall be no transfers on
the stock transfer books of Bank United Corp. of the shares of Bank United Corp.
Capital Stock which were issued and 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 cancelled
and exchanged for certificates representing shares of Washington Mutual Capital
Stock as provided in this Section 3.
(e) Notwithstanding anything to the contrary contained herein, no
certificates or scrip representing fractional shares of Washington Mutual Common
Stock shall be issued upon the surrender for exchange of Common Certificates, no
dividend or distribution with respect to Washington Mutual Common Stock shall be
payable on or with respect to any fractional share, and such fractional share
interests shall not entitle the owner thereof to vote or to any other rights of
a stockholder of Washington Mutual. In lieu of the issuance of any such
fractional share, Washington Mutual shall pay to each former holder of Bank
United Corp. Common Stock who otherwise would be entitled to receive such
fractional share an amount in cash determined by multiplying (i) the average of
the closing prices of Washington Mutual Common Stock on The New York Stock
Exchange ("NYSE") as reported by the Wall Street Journal for the five trading
days immediately preceding the Closing Date by (ii) the fraction of a share of
Washington Mutual Common Stock which such holder would otherwise be entitled to
receive pursuant to Section 2.5 hereof. For purposes of determining any such
fractional share interests, all shares of Bank United Corp. Common Stock
beneficially owned by any Bank United Corp. stockholder shall be combined so as
to calculate the maximum number of shares of Washington Mutual Common Stock
issuable to such holder of Bank United Corp. Common Stock.
(f) Any portion of the Exchange Fund that remains unclaimed by the
stockholders of Bank United Corp. for twelve months after the Effective Time
shall be paid, at the request of Washington Mutual, to Washington Mutual. Any
stockholders of Bank United Corp. who have not theretofore complied with this
Section 3 shall thereafter look only to Washington Mutual for payment of the
shares of Washington Mutual Common Stock,
10
Washington Mutual PIES, cash in lieu of any fractional shares and unpaid
dividends and distributions on the Washington Mutual Common Stock or Washington
Mutual PIES, as the case may be, deliverable in respect of each share of Bank
United Corp. Common Stock or Bank United Corp. PIES, as the case may be, held by
such stockholder at the Effective Time as determined pursuant to this Agreement,
in each case, without any interest thereon. Notwithstanding anything to the
contrary contained herein, none of Washington Mutual, Bank United Corp., the
Exchange Agent or any other person shall be liable to any former holder of
shares of Bank United Corp. Common Stock or Bank United Corp. PIES, for any
amount properly delivered to a public official pursuant to applicable abandoned
property, escheat or similar laws.
(g) 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 Washington
Mutual, the posting by such person of a bond in such amount as Washington Mutual
may determine is reasonably necessary 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 shares of
Washington Mutual Common Stock and cash in lieu of fractional shares or the
Washington Mutual PIES, as the case may be, deliverable in respect thereof
pursuant to this Agreement.
4. REPRESENTATIONS AND WARRANTIES OF BANK UNITED CORP.
Bank United Corp. hereby represents and warrants to Washington
Mutual as follows:
4.1 Corporate Organization.
(a) Bank United Corp. is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware. Bank
United Corp. has the corporate power and authority to own or lease all of its
properties and assets and to carry on its business as it is now being conducted,
and is duly licensed or qualified to do business in each jurisdiction in which
the nature of the business conducted by it or the character or location of the
properties and assets owned or leased by it makes such licensing or
qualification necessary, except where the failure to be so licensed or qualified
would not have nor reasonably be expected to have a Material Adverse Effect (as
defined below) on Bank United Corp. As used in this Agreement, the term
"Material Adverse Effect" means, with respect to Bank United Corp., Washington
Mutual or the Surviving Corporation, as the case may be, a material adverse
effect on the business, results of operations, financial condition or prospects
of such party and its Subsidiaries taken as a whole or a material adverse effect
on such party's ability to consummate the transactions contemplated hereby on a
timely basis; provided, however, that in determining whether a Material Adverse
Effect has occurred, there shall be excluded any effect on the referenced party
the cause of which is (i) any change in banking, savings association and similar
laws, rules or regulations of general applicability or interpretations thereof
by courts or governmental authorities, (ii) any change in generally accepted
accounting principles ("GAAP") or regulatory accounting requirements applicable
to banks, savings associations, or their holding
11
companies generally, (iii) the announcement of this Agreement or action or
omission of Bank United Corp. or Washington Mutual or any Subsidiary of either
of them taken in accordance with this Agreement or with the prior written
consent of Washington Mutual or Bank United Corp., as applicable, in
contemplation of the transactions contemplated by this Agreement and (iv) any
changes in general economic conditions affecting banks, savings associations, or
their holding companies generally, provided that the effect of such changes
described in this clause (iv) (including, without limitation, changes in the
interest rates) shall not be excluded to the extent of the disproportionate
impact (if any) they have on such person. Bank United Corp. is duly registered
as a savings and loan holding company under the Home Owners' Loan Act, as
amended ("HOLA"), and qualifies as a savings and loan holding company of the
type described in Section 10(c)(3)(A) of HOLA. The copies of the Certificate of
Incorporation and Bylaws of Bank United Corp. which have previously been made
available to Washington Mutual are true, complete and correct copies of such
documents as in effect as of the date of this Agreement.
(b) Each Subsidiary of Bank United Corp. (i) is duly organized and
validly existing as a corporation or partnership under the laws of its
jurisdiction of organization, (ii) is duly licensed or qualified to do business
and is in good standing in all jurisdictions (whether federal, state, local or
foreign) where its ownership or leasing of property or the conduct of its
business requires it to be so licensed or qualified and in which the failure to
be so qualified would have or would reasonably be expected to have, either
individually or in the aggregate, a Material Adverse Effect on Bank United
Corp., and (iii) has all requisite corporate power and authority to own or lease
its properties and assets and to carry on its business as now conducted.
(c) LBW Holdings, Inc. ("Holdings") is duly registered as a savings
and loan holding company under HOLA and qualifies as a savings and loan holding
company of the type described in Section 10(c)(3)(A) of HOLA.
(d) Except for its ownership of Bank United of Texas, Bank United
Corp. does not own any stock or equity interest in any depository institution
(as defined in 12 U.S.C. Section 1813(c)(1)). Bank United of Texas is a
qualified thrift lender pursuant to Section 10(m) of HOLA and its deposits are
insured by the Federal Deposit Insurance Corporation (the "FDIC") through the
Savings Association Insurance Fund ("SAIF") to the fullest extent permitted by
law. Bank United of Texas is a member in good standing of the Federal Home Loan
Bank ("FHLB") of Dallas. Bank United of Texas has not been advised by the Office
of Thrift Supervision ("OTS") that it does not qualify as a savings association
described in Section 10(c)(3)(B)(i) of HOLA.
4.2 Capitalization.
(a) The authorized capital stock of Bank United Corp. consists of
40,000,000 shares of Bank United Corp. Common Stock, 40,000,000 shares of Class
B common stock, par value $0.01 per share, of Bank United Corp. (the "Class B
Common Stock") and 10,000,000 shares of preferred stock, par value $0.01 per
share, of Bank United Corp. (the "Bank United Corp. Preferred Stock"). At the
close of business on July 31, 2000, there were 32,476,697 shares of Bank United
Corp. Common Stock outstanding, 2,000,000 shares of Bank United Corp.
12
Redeemable Preferred Stock Series B (issued in connection with the Bank United
Corp. PIES) outstanding and 21,216 shares of Bank United Corp. Common Stock held
in Bank United Corp.'s treasury. No other shares of Bank United Corp. Common
Stock, Bank United Corp. Preferred Stock or Class B Common Stock were
outstanding. As of July 31, 2000, no shares of Bank United Corp. Common Stock or
Bank United Corp. Preferred Stock were reserved for issuance, except for
4,636,091 shares of Bank United Corp. Common Stock reserved for issuance upon
the exercise of stock options pursuant to the Bank United Corp. Stock Option
Plans and 6,462,862 shares of Bank United Corp. Common Stock reserved for
issuance upon exercise of the Option (as defined in the Stock Option Agreement).
All of the issued and outstanding shares of Bank United Corp. Common Stock have
been duly authorized and validly issued and are fully paid, nonassessable and
free of preemptive rights, with no personal liability attaching to the ownership
thereof. As of the date of this Agreement, except (i) as set forth in
Section 4.2(a) of the disclosure schedule of Bank United Corp. delivered to
Washington Mutual concurrently herewith (the "Bank United Corp. Disclosure
Schedule"), (ii) pursuant to the Option, (iii) pursuant to the Bank United Corp.
PIES and (iv) as set forth elsewhere in this Section 4.2(a), Bank United Corp.
does not have and is not bound by any outstanding subscriptions, options,
warrants, calls, commitments or agreements of any character calling for the
purchase or issuance of any shares of Bank United Corp. Common Stock or Bank
United Corp. Preferred Stock or any other equity securities of Bank United Corp.
or any securities representing the right to purchase or otherwise receive any
shares of Bank United Corp. capital stock (including, without limitation, any
rights plan or agreement). Except as set forth in Section 4.2(a) of the Bank
United Corp. Disclosure Schedule, since July 31, 2000, Bank United Corp. has not
issued any shares of its capital stock or any securities convertible into or
exercisable for any shares of its capital stock, other than upon the exercise of
employee stock options granted prior to such date, as would be permitted under
Section 6.2 or upon the exercise of the Option.
(b) Section 4.2(b) of the Bank United Corp. Disclosure Schedule lists
the name, jurisdiction of incorporation, authorized and outstanding shares of
capital stock and record and beneficial owners of such capital stock for each
entity in which Bank United Corp. beneficially owns or controls, directly or
indirectly, any equity interest (regardless of whether such entity is a
Subsidiary) (a "Controlled Entity") that is a Significant Subsidiary (as such
term is defined in Rule 1-02 of Regulation S-X) of Bank United Corp. Each
Controlled Entity in which Bank United Corp. or any Bank United Corp. Subsidiary
beneficially owns or controls, directly or indirectly, more than 9.9% equity
interest is a legal investment for a unitary savings and loan holding company
and, with respect to those owned by Bank United of Texas, for a federal savings
association. Except as set forth in Section 4.2(b) of the Bank United Corp.
Disclosure Schedule, Bank United Corp. owns, directly or indirectly, all of the
issued and outstanding shares of capital stock of or all other equity interests
in each of Bank United Corp.'s Subsidiaries, free and clear of any liens,
charges, encumbrances, adverse rights or claims and security interests
whatsoever ("Liens"), and all of such shares are duly authorized and validly
issued and are fully paid, nonassessable and free of preemptive rights, with no
personal liability attaching to the ownership thereof. Neither Bank United Corp.
nor any Subsidiary thereof has or is bound by any outstanding subscriptions,
options, warrants, calls, commitments or agreements of any character calling for
the purchase, sale or issuance of any shares of capital stock or any other
equity security of any Subsidiary of Bank United Corp. or any securities
representing the
13
right to purchase or otherwise receive any shares of capital stock or any other
equity security of any such Subsidiary.
(c) Except as disclosed in Section 4.2(c) of the Bank United Corp.
Disclosure Schedule and for the ownership of Bank United Corp.'s Subsidiaries,
neither Bank United Corp. nor any of its Controlled Entities beneficially owns
or controls, directly or indirectly, any shares of stock or other equity
interest in any depository institution (as defined in 12 U.S.C.
Section 1813(c)), corporation, firm, partnership, joint venture or other entity.
4.3 Authority; No Violation.
(a) Bank United Corp. has full corporate power and authority to
execute and deliver this Agreement and the Stock Option Agreement and to
consummate the transactions contemplated hereby and thereby. The execution and
delivery of this Agreement and the Stock Option Agreement and the consummation
of the transactions contemplated hereby and thereby have been duly and validly
approved by the Board of Directors of Bank United Corp. Subject to the terms
and conditions of this Agreement, the Board of Directors of Bank United Corp.
has resolved to submit the agreement of merger (within the meaning of Section
252 of the DGCL) contained in this Agreement and the transactions contemplated
hereby to Bank United Corp.'s stockholders for approval at a meeting of such
stockholders and, except for the adoption of such agreement of merger by the
affirmative vote of the holders of a majority of the voting power represented by
the outstanding shares of Bank United Corp. Common Stock, no other corporate
proceedings on the part of Bank United Corp. are necessary to approve this
Agreement or the Stock Option Agreement or to consummate the transactions
contemplated hereby and thereby. This Agreement and the Stock Option Agreement
have been duly and validly executed and delivered by Bank United Corp. and
(assuming due authorization, execution and delivery by Washington Mutual) each
constitutes a valid and binding obligation of Bank United Corp., enforceable
against Bank United Corp. in accordance with its terms, except as enforcement
may be limited by general principles of equity whether applied in a court of law
or a court of equity and by bankruptcy, insolvency and similar laws affecting
creditors' rights and remedies generally. Bank United Corp. acknowledges that
Washington Mutual may elect at or promptly after the Effective Time to cause the
merger of Holdings and one of Washington Mutual's wholly owned Subsidiaries (the
"Second Merger") and the merger of Bank United of Texas and Washington Mutual
Bank, FA, a wholly owned depository institution subsidiary of Washington Mutual
(the "Association Merger"); provided, however, that Washington Mutual agrees
that the structure of the Second Merger and the Association Merger shall not
adversely affect the ability of the Merger to be treated as a reorganization
within the meaning of Section 368(a) of the Code. Holdings and Bank United of
Texas each has full corporate power and authority to consummate the Second
Merger and the Association Merger, respectively.
(b) Except as set forth in Section 4.3(b) of the Bank United Corp.
Disclosure Schedule, neither the execution and delivery of this Agreement or the
Stock Option Agreement by Bank United Corp. nor the consummation by Bank United
Corp. of the transactions contemplated hereby or thereby, nor compliance by Bank
United Corp. with any of the terms or provisions hereof or thereof, nor the
consummation of the Second Merger or the Association
14
Merger will (i) violate any provision of the Certificate of Incorporation or
Bylaws of Bank United Corp. or any of the similar governing documents of any of
its Subsidiaries or (ii) assuming that the consents and approvals referred to in
Section 4.4 are duly obtained, (x) violate any statute, code, ordinance, rule,
regulation, judgment, order, writ, decree or injunction applicable to Bank
United Corp. or any of its Subsidiaries or any of their respective properties or
assets, or (y) violate, conflict with, result in a breach of any provision of or
the loss of any benefit under, 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 or a right of termination or cancellation under, accelerate
the performance required by, or result in the creation of any Lien upon any of
the respective properties or assets of Bank United Corp. or any of its
Subsidiaries under, any of the terms, conditions or provisions of any note,
bond, mortgage, indenture, deed of trust, license, lease, agreement or other
instrument or obligation to which Bank United Corp. or any of its Subsidiaries
is a party, or by which they or any of their respective properties or assets may
be bound or affected, except (in the case of clause (y) above) for such
violations, conflicts, breaches or defaults which, either individually or in the
aggregate, will not have and would not reasonably be expected to have a Material
Adverse Effect on Bank United Corp.
4.4 Consents and Approvals. Except for (i) the approval of the Merger,
the Second Merger and the Association Merger by the OTS, (ii) approval of the
listing of the Washington Mutual Common Stock and Washington Mutual PIES to be
issued in the Merger on NYSE, (iii) the filing with the Securities and Exchange
Commission (the "SEC") of a proxy statement in definitive form relating to the
meeting of Bank United Corp.'s stockholders to be held to vote on approval of
this Agreement and the Merger (the "Proxy Statement/Prospectus") and the filing
and declaration of effectiveness of the registration statement on Form S-4 (the
"S-4") in which the Proxy Statement/Prospectus will be included as a prospectus
and any filings or approvals under applicable state securities laws, (iv) the
filing with the SEC by the trust (the "CPR Trust") to be established and
operated by Bank United Corp. pursuant to the declaration of trust substantially
in the form of Exhibit 4.4 hereto (the "Trust Agreement") prior to the Effective
Time for the purpose of managing the Litigation (as defined below) and
administering the proceeds, if any, received by Bank United of Texas (or any
other successor) as a result of the Litigation and declaration of effectiveness
of the registration statement on Form S-1 or other applicable form, which may be
the S-4 if permitted by applicable law (the "CPR Trust Registration Statement")
in connection with the distribution of the certificates (the "CPR Certificates")
which represent assignable and beneficial interests in the assets of the CPR
Trust, and any filings or approvals under applicable state securities laws, (v)
the filing of the Articles of Merger with the Washington Secretary pursuant to
the WBCA and the Certificate of Merger with the DELAWARE Secretary pursuant to
the DGCL, (vi) the filing of Articles of Amendment to Washington Mutual's
Articles of Incorporation (the "Articles of Amendment") by Washington Mutual
with the Washington Secretary pursuant to the WBCA to provide for the terms of
the Washington Mutual Preferred Stock, (vii) the adoption of the agreement of
merger (within the meaning of Section 252 of the DGCL) contained in this
Agreement by the requisite votes of the stockholders of Bank United Corp.,
(viii) the consents and approvals set forth in Section 4.4 of the Bank United
Corp. Disclosure Schedule, and (ix) the consents and approvals of third parties
which are not Governmental Entities (as hereinafter defined), the failure of
which to obtain will not have and would not be reasonably expected to have,
individually or in the aggregate, a
15
Material Adverse Effect, no consents or approvals of, or filings or
registrations with, any court, administrative agency or commission or other
governmental authority or instrumentality or self-regulatory organization (each
a "Governmental Entity") or with any third party are necessary in connection
with (A) the execution and delivery by Bank United Corp. of this Agreement and
(B) the consummation by Bank United Corp. of the Merger and the other
transactions contemplated hereby. The "Litigation" means the case brought by
Bank United Corp., Bank United of Texas and Hyperion Partners L.P. against the
United States government relating to the failure to abide by certain
forbearances and commitments made by the United States government in 1988, in
connection with Bank United Corp.'s acquisition of Bank United of Texas in 1988.
4.5 Reports. Bank United Corp. and each of its Subsidiaries have timely
filed all material reports, registrations and statements, together with any
amendments required to be made with respect thereto, that they were required to
file since October 1, 1997 with any Governmental Entity and have paid all fees
and assessments due and payable in connection therewith. Except for normal
examinations conducted by a Governmental Entity in the regular course of the
business of Bank United Corp. and its Subsidiaries or as set forth in Section
4.5 of the Bank United Corp. Disclosure Schedule, no Governmental Entity has
initiated any proceeding or, to the best knowledge of Bank United Corp.,
threatened an investigation into the business or operations of Bank United Corp.
or any of its Subsidiaries since October 1, 1997. Except as set forth in Section
4.5 of the Bank United Corp. Disclosure Schedule, there is no material
unresolved violation, criticism or exception by any Governmental Entity with
respect to any report or statement relating to any examinations of Bank United
Corp. or any of its Subsidiaries.
4.6 Financial Statements. Bank United Corp. has previously made
available to Washington Mutual copies of (a) the consolidated statements of
financial conditions of Bank United Corp. and its Subsidiaries, as of
September 30, for the fiscal years 1998 and 1999 and the related consolidated
statements of operations, stockholders' equity and cash flows for the fiscal
years 1997 through 1999, inclusive, as reported in Bank United Corp.'s Annual
Report on Form 10-K for the fiscal year ended September 30, 1999 filed with the
SEC under the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
in each case accompanied by the audit report of KPMG LLP, independent auditors
with respect to Bank United Corp., and (b) the unaudited consolidated statements
of financial condition of Bank United Corp. and its Subsidiaries as of March 31,
1999 and March 31, 2000, and the related unaudited consolidated statements of
operations, stockholders, equity and cash flows for the three-month periods then
ended, as reported in Bank United Corp.'s Quarterly Report on Form 10-Q for the
period ended March 31, 2000, filed with the SEC under the Exchange Act. Each of
the financial statements referred to in this Section 4.6 (including the related
notes, where applicable) fairly present, and the financial statements referred
to in Section 7.11(a) hereof (including the related notes, where applicable)
will fairly present, (subject, in the case of the unaudited statements, to
normal recurring adjustments, none of which are expected to be material in
nature or amount), the results of the consolidated operations and changes in
stockholders' equity and consolidated financial position of Bank United Corp.
and its Subsidiaries for the respective fiscal periods or as of the respective
dates therein set forth. Each of such financial statements (including the
related notes, where applicable) complies, and the financial statements referred
to in Section 7.11(a) hereof (including the related notes, where applicable)
will comply, in all material respects with
16
applicable accounting requirements and with the published rules and regulations
of the SEC with respect thereto and each of such financial statements (including
the related notes, where applicable) has been, and the financial statements
referred to in Section 7.11(a) (including the related notes, where applicable)
will be, prepared in accordance with GAAP consistently applied during the
periods involved, except in each case as indicated in such statements or in the
notes thereto or, in the case of unaudited statements, as permitted by
Form 10-Q. The books and records of Bank United Corp. and its Subsidiaries have
been, and are being, maintained in all material respects in accordance with GAAP
and any other applicable legal and accounting requirements and reflect only
actual transactions.
4.7 Broker's Fees. Except as set forth in Section 4.7 of the Bank United
Corp. Disclosure Schedule, neither Bank United Corp. nor any Subsidiary thereof
nor any of their respective officers or directors has employed any broker or
finder or incurred any liability for any broker's fees, commissions or finder's
fees in connection with any of the transactions contemplated by this Agreement.
Copies of all agreements with each broker or finder listed in Section 4.7 of the
Bank United Corp. Disclosure Schedule have previously been furnished to
Washington Mutual.
4.8 Absence of Certain Changes or Events.
(a) Except as publicly disclosed in the Bank United Corp. Reports (as
defined in Section 4.12) filed prior to the date hereof, or as set forth in
Section 4.8(a) of the Bank United Corp. Disclosure Schedule, since
September 30, 1999, no event has occurred which has had or would reasonably be
expected to have, individually or in the aggregate, a Material Adverse Effect on
Bank United Corp.
(b) Except as publicly disclosed in the Bank United Corp. Reports
filed prior to the date hereof, as set forth in Section 4.8(b) of the Bank
United Corp. Disclosure Schedule or as contemplated by this Agreement or
permitted under Section 6.2, since September 30, 1999, Bank United Corp. and its
Subsidiaries have carried on their respective businesses in all material
respects in the ordinary course of business, and neither Bank United Corp. nor
any of its Subsidiaries has (i) except for normal increases in the ordinary
course of business consistent with past practice and except as required by
applicable law, increased the wages, salaries, compensation, pension or other
fringe benefits or perquisites payable to any officer or director, other than
persons newly hired for or promoted to such position, from the amount thereof in
effect as of September 30, 1999 or granted any severance or termination pay,
entered into any contract to make or grant any severance or termination pay, or
paid any bonus, in each case to any such officer or director, other than
pursuant to preexisting agreements, arrangements or bonus plans, or (ii)
suffered any strike, work stoppage, slow-down or other labor disturbance.
4.9 Legal Proceedings.
(a) Except as set forth in Section 4.9(a) of the Bank United Corp.
Disclosure Schedule, neither Bank United Corp. nor any of its Subsidiaries is a
party to any, and there are no pending or, to the best of Bank United Corp.'s
knowledge, threatened legal, administrative, arbitral or other proceedings,
claims, actions or governmental or regulatory investigations of any
17
nature against Bank United Corp. or any of its Subsidiaries or challenging the
validity or propriety of the transactions contemplated by this Agreement as to
which there is a reasonable possibility of an adverse determination and which,
if adversely determined, would, individually or in the aggregate, have or
reasonably be expected to have a Material Adverse Effect on Bank United Corp.
(b) Except as set forth in Section 4.9(b) of the Bank United Corp.
Disclosure Schedule, there is no injunction, order, judgment, decree or
regulatory restriction specifically imposed upon Bank United Corp., any of
its Subsidiaries or the assets of Bank United Corp. or any of its
Subsidiaries which has had, or would reasonably be expected to have, a
Material Adverse Effect on Bank United Corp. or the Surviving Company.
4.10 Taxes.
(a) Except as set forth in Section 4.10(a) of the Bank United Corp.
Disclosure Schedule: (x) each of Bank United Corp. and its Subsidiaries has (i)
duly and timely filed (including pursuant to applicable extensions granted
without penalty) all material Tax Returns (as hereinafter defined) required to
be filed by it, and such Tax Returns are true, correct and complete in all
material respects, and (ii) paid in full or made adequate provision in the
financial statements of Bank United Corp. (in accordance with GAAP) for all
Taxes (as hereinafter defined) related to such Tax Returns; (y) no material
deficiencies for any Taxes have been proposed, asserted or assessed in writing
against or with respect to Bank United Corp. or any of its Subsidiaries; and (z)
there are no material Liens for Taxes upon the assets of either Bank United
Corp. or its Subsidiaries except for statutory liens for current Taxes not yet
due or Liens for Taxes that are being contested in good faith by appropriate
proceedings for which reserves adequate in accordance with GAAP have been
provided.
(b) For purposes of this Agreement, "Taxes" shall mean (x) all taxes,
charges, levies, penalties or other assessments imposed by any United States
federal, state, local or foreign taxing authority, including, but not limited to
income, excise, property, sales, transfer, franchise, payroll, withholding,
social security or other similar taxes, including any interest or penalties
attributable thereto, and (y) any liability with respect to the foregoing, as a
result of being a member of any affiliated, consolidated, combined, unitary or
similar group, as a result of any transferee liability in respect of the
foregoing, as a result of any agreements, or otherwise by operation of law.
(c) For purposes of this Agreement, "Tax Return" shall mean any
return, report, information return or other document (including any related or
supporting information) required to be filed with any taxing authority with
respect to Taxes, including without limitation all information returns relating
to Taxes of third parties, any claims for refunds of Taxes and any amendments or
supplements to any of the foregoing.
(d) Except as set forth in Section 4.10(d) of the Bank United Corp.
Disclosure Schedule, neither Bank United Corp. nor any of its Subsidiaries is a
party to any agreement, contract, arrangement or plan that has resulted or would
result, individually or in the aggregate,
18
in connection with this Agreement in the payment of any "excess parachute
payments" within the meaning of Section 280G of the Code.
(e) Neither Bank United Corp. nor any of its Subsidiaries has filed
a consent to the application of Section 341(f) of the Code.
(f) Bank United Corp. is not aware of any fact or circumstance that
could reasonably be expected to prevent the Merger from qualifying as a
reorganization within the meaning of Section 368(a) of the Code.
4.11 Employees; Employee Benefit Plans.
(a) Section 4.11(a) of the Bank United Corp. Disclosure Schedule sets
forth a true and complete list of each employee benefit plan, arrangement or
agreement and any amendments or modifications thereof (including, without
limitation, all stock purchase, stock option, severance, employment,
change-in-control, health/welfare and Section 125 plans, fringe benefit, bonus,
incentive, deferred compensation and other agreements, programs, policies and
arrangements, whether or not subject to the Employee Retirement Income Security
Act of 1974, as amended ("ERISA")) that is maintained or contributed to as of
the date of this Agreement (the "Plans") by Bank United Corp. or any of its
Subsidiaries or by any trade or business, whether or not incorporated (an
"ERISA Affiliate"), all of which together with Bank United Corp. would be deemed
a "single employer' within the meaning of Section 4001 of ERISA.
(b) Bank United Corp. has previously made available to Washington
Mutual true and complete copies of each of the Plans and all related documents,
including but not limited to (i) the actuarial reports for each Plan (if
applicable) for each of the last two years, and (ii) the most recent
determination letter from the Internal Revenue Service (if applicable) for each
Plan.
(c) Except as set forth in Section 4.11(c) of the Bank United Corp.
Disclosure Schedule, (i) each of the Plans has been operated and administered in
all material respects in accordance with applicable laws, including but not
limited to ERISA and the Code, (ii) each of the Plans intended to be "qualified"
within the meaning of Section 401(a) of the Code has been determined to be so
qualified by the Internal Revenue Service or will be submitted for such
determination within the applicable remedial amendment period, (iii) with
respect to each Plan which is subject to Title IV of ERISA, the present value of
accrued benefits under such Plan, based upon the actuarial assumptions used for
funding purposes in the most recent actuarial report prepared by such Plan's
actuary with respect to such Plan, did not, as of its latest valuation date,
exceed the then current value of the assets of such Plan allocable to such
accrued benefits, (iv) no Plan provides benefits, including without limitation
death or medical benefits (whether or not insured), with respect to current or
former employees of Bank United Corp., its Subsidiaries or any ERISA Affiliate
beyond their retirement or other termination of service, other than (w) coverage
mandated by applicable law, (x) death benefits or retirement benefits under any
"employee pension plan," as that term is defined in Section 3(2) of ERISA, (y)
deferred compensation benefits accrued as liabilities on the books of Bank
United Corp., its Subsidiaries or the ERISA Affiliates or (z) benefits the full
cost of which is borne by the current or former employee (or his beneficiary),
(v) no liability under Title IV of ERISA has been incurred by
19
Bank United Corp., its Subsidiaries or any ERISA Affiliate that has not been
satisfied in full (other than payment of premiums not yet due to the Pension
Benefit Guaranty Corporation (the "PBGC")), and no condition exists that
presents a material risk to Bank United Corp., its Subsidiaries or any ERISA
Affiliate of incurring a material liability thereunder, (vi) no Plan is a
"multi-employer pension plan," as such term is defined in Section 3(37) of
ERISA, (vii) all contributions or other amounts payable by Bank United Corp. or
its Subsidiaries as of the Effective Time with respect to each Plan in respect
of current or prior plan years have been paid or accrued in accordance with GAAP
and Section 412 of the Code, (viii) neither Bank United Corp., its Subsidiaries
nor any ERISA Affiliate has engaged in a transaction in connection with which
Bank United Corp., its Subsidiaries or any ERISA Affiliate could be subject to
either a material civil penalty assessed pursuant to Section 409 or 502(i) of
ERISA or a material tax imposed pursuant to Section 4975 or 4976 of the Code,
and (ix) there are no pending, or, to the knowledge of Bank United Corp.,
threatened or anticipated claims (other than routine claims for benefits) by, on
behalf of or against any of the Plans or any trusts related thereto which would,
individually or in the aggregate, have or be reasonably expected to have a
Material Adverse Effect on Bank United Corp.
(d) Except as set forth in Section 4.11(d) of the Bank United Corp.
Disclosure Schedule, no Plan exists which provides for or could result in the
payment to any Bank United Corp. employee of any money or other property or
rights or accelerate the vesting or payment of such amounts or rights to any
Bank United Corp. employee as a result of the transactions contemplated by this
Agreement, including the Merger, whether or not such payment or acceleration
would constitute a parachute payment within the meaning of Code Section 280G.
Except as set forth in Section 4.11(d) of the Bank United Corp. Disclosure
Schedule, since September 30, 1999, neither Bank United Corp. nor any of its
Subsidiaries has taken any action that would result in the payment of any
amounts, or the accelerated vesting of any rights or benefits, under any Plan
set forth in Section 4.11(d) of the Bank United Corp. Disclosure Schedule.
(e) To the best knowledge of Bank United Corp., (i) except as set
forth in Section 4.11(e) of the Bank United Corp. Disclosure Schedule, neither
Bank United Corp. nor any of its Subsidiaries is a party to or is bound by any
written contract or arrangement with respect to the employment or compensation
of any (x) consultants receiving in excess of $100,000 annually and (y)
employees receiving compensation (salary, bonus and commission) in excess of
$250,000 annually, and (ii) except as provided under the Plans set forth in
Sections 4.11(d) and (e) of the Bank United Corp. Disclosure Schedule and other
agreements or arrangements set forth in Sections 4.11(d) and (e) of the Bank
United Corp. Disclosure Schedule, consummation of the transactions contemplated
by this Agreement will not (either alone or upon the occurrence of any
additional acts or events) result in any payment (whether of severance pay or
otherwise) becoming due from Bank United Corp. or any Subsidiary to any officer
or employee thereof. Bank United Corp. has previously delivered or made
available to Washington Mutual true and complete copies of all consulting
agreements calling for payments in excess of $150,000 annually, and employment
and deferred compensation agreements (or forms thereof) providing for
compensation (salary, bonus and commission) in excess of $250,000 annually that
are in writing to which Bank United Corp. or any of its Subsidiaries is a party.
20
(f) Except as set forth in Section 4.11(f) of the Bank United Corp.
Disclosure Schedule, no current employee of Bank United Corp. or any of its
Subsidiaries received aggregate remuneration (bonus, salary and commission) in
excess of $250,000 for 1999 or would reasonably be expected to receive aggregate
remuneration (excluding severance or other payments which, pursuant to an
agreement or arrangement set forth in Section 4.11(e) of the Bank United Corp.
Disclosure Schedule, are made as a result of consummation of the transactions
contemplated by this Agreement, either alone or upon the occurrence of any
additional acts or events) in excess of $250,000 in 2000.
4.12 SEC Reports. Bank United Corp. has previously made available to
Washington Mutual an accurate and complete copy of each final registration
statement, prospectus, report, schedule and definitive proxy statement filed
since October 1, 1997 and prior to the date hereof by Bank United Corp. or any
of its Subsidiaries with the SEC pursuant to the Securities Act of 1933, as
amended (the "Securities Act"), or the Exchange Act (the "Bank United Corp.
Reports"), and no such registration statement, prospectus, report, schedule or
proxy statement contained any untrue statement of a material fact or omitted to
state any material fact required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances in which they were
made, not misleading. Bank United Corp. and its Subsidiaries have timely filed
all Bank United Corp. Reports and other documents required to be filed by them
under the Securities Act and the Exchange Act, and, as of their respective
dates, all Bank United Corp. Reports complied in all material respects with the
published rules and regulations of the SEC with respect thereto.
4.13 Compliance with Applicable Law. Except as disclosed in Section 4.13
of the Bank United Corp. Disclosure Schedule, Bank United Corp. and each of its
Subsidiaries hold, and have at all times held, all licenses, franchises, permits
and authorizations necessary for the lawful conduct of their respective
businesses under and pursuant to all, and have complied with and are not in
violation in any material respect under any, applicable law, statute, order,
rule, regulation, policy and/or guideline of any Governmental Entity relating to
Bank United Corp. or any of its Subsidiaries, except where the failure to hold
such license, franchise, permit or authorization or such noncompliance or
violation would not, individually or in the aggregate, have or reasonably be
expected to have a Material Adverse Effect on Bank United Corp., and neither
Bank United Corp. nor any of its Subsidiaries knows of, or has received notice
of, any violations of any of the above which, individually or in the aggregate,
would have or would reasonably be expected to have a Material Adverse Effect on
Bank United Corp.
4.14 Certain Contracts.
(a) Except as publicly disclosed in the Bank United Corp. Reports
filed prior to the date hereof or as set forth in Section 4.14(a) of the Bank
United Corp. Disclosure Schedule, neither Bank United Corp. nor any of its
Subsidiaries is a party to or is bound by any contract, arrangement, commitment
or understanding (whether written or oral) (i) which is a material contract (as
defined in Item 601(b)(10) of Regulation S-K of the SEC) to be performed after
the date of this Agreement, (ii) which limits the freedom of Bank United Corp.
or any of its Subsidiaries to compete in any line of business, in any geographic
area or with any person, or
21
(iii) with or to a labor union or guild (including any collective bargaining
agreement). Each contract, arrangement, commitment or understanding of the type
described in this Section 4.14(a), whether or not publicly disclosed in the Bank
United Corp. Reports filed prior to the date hereof or set forth in Section
4.14(a) of the Bank United Corp. Disclosure Schedule, is referred to herein as a
"Bank United Corp. Contract," and neither Bank United Corp. nor any of its
Subsidiaries knows of, or has received notice of, any violation of the above by
any of the other parties thereto which, individually or in the aggregate, would
have or would reasonably be expected to have a Material Adverse Effect on Bank
United Corp. Bank United Corp. has made available all contracts which involved
payments by Bank United Corp. or any of its Subsidiaries in fiscal year 1999 of
more than $500,000 or which could reasonably be expected to involve payments
during fiscal year 2000 of more than $500,000, other than any such contract that
is terminable at will on 60 days or less notice without payment of a penalty in
excess of $50,000 and other than any contract entered into on or after the date
hereof that is permitted under the provisions of Section 6.2.
(b) Except as set forth in Section 4.14(b) of the Bank United Corp.
Disclosure Schedule, (i) each Bank United Corp. Contract is valid and binding on
Bank United Corp. and in full force and effect, and, to the knowledge of Bank
United Corp., is valid and binding on the other parties thereto, (ii) Bank
United Corp. and each of its Subsidiaries has in all material respects performed
all obligations required to be performed by it to date under each Bank United
Corp. Contract, and (iii) no event or condition exists which constitutes or,
after notice or lapse of time or both, would constitute a material default on
the part of Bank United Corp. or any of its Subsidiaries under any such Bank
United Corp. Contract, except, in each case, where such invalidity, failure to
be binding, failure to so perform or default, individually or in the aggregate,
would not have or reasonably be expected to have a Material Adverse Effect on
Bank United Corp.
4.15 Agreements with Regulatory Agencies. Except as set forth in
Section 4.15 of the Bank United Corp. Disclosure Schedule, neither Bank United
Corp. nor any of its Subsidiaries is subject to any cease-and-desist or other
order issued by, or is a party to any written agreement, consent agreement or
memorandum of understanding with, or is a party to any commitment letter or
similar undertaking to, or is subject to any order or directive by, or has
adopted any board resolutions at the request of (each, whether or not set forth
in Section 4.15 of the Bank United Corp. Disclosure Schedule, a "Regulatory
Agreement"), any Governmental Entity that currently restricts or by its terms
will in the future restrict the conduct of its business or relates to its
capital adequacy, its credit policies, its management or its business, nor has
Bank United Corp. or any of its Subsidiaries been advised by any Governmental
Entity that it is considering issuing or requesting any Regulatory Agreement.
4.16 Undisclosed Liabilities. Except (i) for those liabilities that are
fully reflected or reserved against on the consolidated balance sheet of Bank
United Corp. included in the Bank United Corp. Form 10-Q for the quarter ended
March 31, 2000 or (ii) for liabilities incurred in the ordinary course of
business consistent with past practice since March 31, 2000, neither Bank United
Corp. nor any of its Subsidiaries has incurred any liability of any nature
whatsoever (whether absolute, accrued or contingent or otherwise and whether due
or to become due) that,
22
either alone or when combined with all the liabilities not described in clause
(i) or (ii), has had, or would be reasonably expected to have, a Material
Adverse Effect on Bank United Corp.
4.17 Anti-takeover Provisions. The Board of Directors of Bank United
Corp. has taken all necessary action so that the provisions of Section 203 of
the DGCL, any applicable provisions of the takeover laws of the State of Texas,
the provisions of Section 2.11 of the Bylaws of Bank United Corp. and the
provisions of Article 4, Section 4 of the Certificate of Incorporation of
Bank United Corp. do not and will not apply to this Agreement, the Merger or
the transactions contemplated hereby, the Stock Option Agreement or the
exercise of the Option.
4.18 Bank United Corp. Information. The information relating to Bank
United Corp. and its Subsidiaries to be provided by Bank United Corp. for
inclusion in the Proxy Statement/Prospectus, the S-4 and the CPR Trust
Registration Statement, or in any other document filed with any other
Governmental Entity in connection herewith, will not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements therein, in light of the circumstances in which they are made,
not misleading. The Proxy Statement/Prospectus (except for such portions thereof
as relate only to Washington Mutual or any of its Subsidiaries) will comply as
to form in all material respects with the provisions of the Exchange Act and the
rules and regulations thereunder. The CPR Trust Registration Statement (except
for such portions thereof as relate only to Washington Mutual or any of its
Subsidiaries) will comply as to form in all material respects with the
provisions of the Securities Act and the rules and regulations thereunder.
4.19 Title to Property.
(a) Real Property. Except as disclosed on Section 4.19(a) of the Bank
United Corp. Disclosure Schedule, Bank United Corp. and its Subsidiaries have
good, valid and marketable title to all real property owned by them free and
clear of all Liens, except Liens for current taxes not yet due and payable and
other standard exceptions commonly found in title policies in the jurisdiction
where such real property is located, and such encumbrances and imperfections of
title, if any, as do not materially detract from the value of the properties and
do not materially interfere with the present or proposed use of such properties
or otherwise materially impair such operations. All real property and fixtures
material to the business, operations or financial condition of Bank United Corp.
and its Subsidiaries are in substantially good condition and repair except as
would not reasonably be expected to have, in the aggregate, a Material Adverse
Effect on Bank United Corp.
(b) Personal Property. Bank United Corp. and its Subsidiaries have
good, valid and marketable title to all tangible personal property owned by them
on the date hereof, free and clear of all Liens except as publicly disclosed in
the Bank United Corp. Reports filed prior to the date hereof or as disclosed on
Section 4.19(b) of the Bank United Corp. Disclosure Schedule or as would not
reasonably be expected to have, in the aggregate, a Material Adverse Effect on
Bank United Corp. With respect to personal property used in the business of
Bank United Corp. and its Subsidiaries which is leased rather than owned,
neither Bank United Corp.
23
nor any Subsidiary thereof is in default under the terms of
any such lease the loss of which would have a Material Adverse Effect on Bank
United Corp.
(c) Leased Property. All leases of real property and all other leases
material to Bank United Corp. and its Subsidiaries under which Bank United Corp.
or a Subsidiary, as lessee, leases real or personal property are valid and
binding in accordance with their respective terms, there is not under such lease
any material existing default by Bank United Corp. or such Subsidiary or any
event which with notice or lapse of time would constitute such a default, and
Bank United Corp. or such Subsidiary quietly enjoys the premises provided for in
such lease except as would not reasonably be expected to have, in the aggregate,
a Material Adverse Effect on Bank United Corp.
4.20 Insurance. Bank United Corp. and is Subsidiaries are insured with
reputable insurers against such risks and in such amounts as the management of
Bank United Corp. reasonably has determined to be prudent in accordance with
industry parties. Section 4.20 of the Bank United Corp. Disclosure Schedule
contains a true and complete list and a brief description (including name of
insurer, agent, coverage and expiration date) of all insurance policies in force
on the date hereof with respect to the business and assets of the Bank United
Corp. and its Subsidiaries (other than insurance policies under which Bank
United Corp. or any Subsidiary thereof is named as a loss payee, insured or
additional insured as a result of its position as a secured lender on specific
loans and mortgage insurance policies on specific loans). Bank United Corp. and
its Subsidiaries are in material compliance with their insurance policies and
are not in default under any of the material terms thereof. Each such policy is
outstanding and in full force and effect and, except as set forth on
Section 4.20 of the Bank United Corp. Disclosure Schedule and except for
policies insuring against potential liabilities of officers, directors and
employees of Bank United Corp. and its Subsidiaries, Bank United Corp. or the
relevant Subsidiary thereof is the sole beneficiary of such policies. All
premiums and other payments due under any such policy have been paid, and all
claims thereunder have been filed in due and timely fashion.
4.21 Environmental Liability. Except as set forth in Section 4.21 of the
Bank United Corp. Disclosure Schedule, there are no legal, administrative,
arbitral or other proceedings, claims, actions, causes of action, private
environmental investigations or remediation activities or governmental
investigations of any nature seeking to impose, or that reasonably could be
expected to result in the imposition, on Bank United Corp. or any of its
Subsidiaries of any liability or obligation arising under common law standards
relating to environmental protection, human health or safety, or under any
local, state or federal environmental statute, regulation or ordinance,
including, without limitation, the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended (collectively, the
"Environmental Laws"), pending or, to the knowledge of Bank United Corp.,
threatened against Bank United Corp. or any of its Subsidiaries, which liability
or obligation would have or would reasonably be expected to have a Material
Adverse Effect on Bank United Corp. To the knowledge of Bank United Corp.,
there is no reasonable basis for any such proceeding, claim, action or
governmental investigation that would impose any liability or obligation that
would have or would reasonably be expected to have a Material Adverse Effect on
Bank United Corp. To the knowledge of Bank United Corp., during or prior to the
period of (i) its or any of its Subsidiaries, ownership or operation of any of
24
their respective current properties, (ii) its or any of its Subsidiaries,
participation in the management of any property, or (iii) its or any of its
Subsidiaries' holding of a security interest or other interest in any property,
there were no releases or threatened releases of hazardous, toxic, radioactive
or dangerous materials or other materials regulated under Environmental Laws in,
on, under or affecting any such property which would reasonably be expected to
have a Material Adverse Effect on Bank United Corp. Neither Bank United Corp.
nor any of its Subsidiaries is subject to any agreement, order, judgment,
decree, letter or memorandum by or with any court, governmental authority,
regulatory agency or third party imposing any material liability or obligation
pursuant to or under any Environmental Law that would have or would reasonably
be expected to have a Material Adverse Effect on Bank United Corp.
4.22 Opinion of Financial Advisor. Bank United Corp. has received the
opinion of Goldman, Sachs & Co., dated August 18, 2000, to the effect that,
as of such date, the Exchange Ratio is fair from a financial point of view to
the holders of Bank United Corp. Common Stock.
4.23 Patents, Trademarks, Etc. Bank United Corp. and each of its
Subsidiaries owns or possesses all legal rights, or is licensed or otherwise
has the right to use, all proprietary rights, including without limitation
all trademarks, trade names, service marks and copyrights, that are material
to the conduct of their existing businesses. Except for the agreements
listed on Section 4.23 of the Bank United Corp. Disclosure Schedule, neither
Bank United Corp. nor any of its Subsidiaries is bound by or a party to any
options, licenses or agreements of any kind with respect to any trademarks,
service marks or trade names which it claims to own. Neither Bank United
Corp. nor any of its Subsidiaries has received any communications alleging
that any of them has violated any of the patents, trademarks, service marks,
trade names, copyrights or trade secrets or other proprietary rights of any
other person or entity.
4.24 Loan Matters.
(a) (i) Section 4.24(a) of the Bank United Corp. Disclosure Schedule
sets forth all evidences of indebtedness reflected as assets on the books and
records of Bank United Corp. and its Subsidiaries ("Loans") by Bank United Corp.
and its Subsidiaries to executive officers (as such term is defined in Part 215
of Title 12 of the Code of Federal Regulations) of Bank United Corp. or any of
its Subsidiaries; (ii) there are no employee, officer, director or other
affiliate Loans on which the borrower is paying a rate other than that reflected
in the note or the relevant credit agreement or on which the borrower is paying
a rate which was below market at the time the Loan was made; and (iii) except as
listed on Section 4.24(a) of the Bank United Corp. Disclosure Schedule, all such
Loans are and were made in compliance in all material respects with all
applicable federal laws and regulations.
(b) Each outstanding Loan and each commitment to extend credit has
been solicited and originated and is administered and serviced in all material
respects in accordance with the relevant loan documents, Bank United Corp.'s
underwriting standards and with all applicable requirements of federal, state
and local laws, regulations and rules.
25
(c) Except as set forth on Section 4.24(c) of the Bank United Corp.
Disclosure Schedule, none of the agreements pursuant to which Bank United Corp.
or any of its Subsidiaries has sold Loans or pools of Loans or participations in
Loans or pools of Loans contains any obligation to repurchase such Loans or
interests therein solely on account of a payment default by the obligor on any
such Loan.
(d) Each of Bank United Corp. and its Subsidiaries is approved by and
is in good standing: (i) as a supervised mortgagee by the Department of Housing
and Urban Development ("HUD") to originate and service Title I and Title I FHA
mortgage loans; (ii) as a GNMA I and II Issuer by the Government National
Mortgage Association ("Ginnie Mae"); (iii) by the Veteran's Administration
("VA") to originate and service VA loans; and (iv) as a seller/servicer by
Fannie Mae and the Federal Home Loan Mortgage Corporation ("Freddie Mac") to
originate and service conventional residential and multi-family mortgage loans.
(e) Except for indemnity agreements with any of such persons (a true
and complete list of all current such agreements having been previously provided
to Washington Mutual), none of Bank United Corp. or any of its Subsidiaries is
now nor has it ever been subject to any fine, suspension, settlement or other
agreement or other administrative agreement or sanction by, or any obligation to
indemnify, HUD, Ginnie Mae, VA, Fannie Mae, Freddie Mac or other investor, or
any federal or state agency relating to the origination, sale or servicing of
mortgage or consumer loans.
(f) Each of Bank United Corp. and its Subsidiaries is in compliance
in all material respects with all applicable federal, state and local laws,
rules and regulations, including, without limitation, the Truth-In-Lending Act
and Regulation Z, the Equal Credit Opportunity Act and Regulation B, the Real
Estate Settlement Procedures Act and Regulation X, the Fair Credit Reporting
Act, the Fair Debt Collection Practices At and all HUD, Ginnie Mae, Fannie Mae,
Freddie Mac, other investor and mortgage insurance company requirements relating
to the origination, sale and servicing of mortgage and consumer loans.
4.25 Community Reinvestment Act Compliance. Bank United of Texas is in
compliance in all material respects with the applicable provisions of the
Community Reinvestment Act of 1977 and the regulations promulgated thereunder
(collectively, "CRA") and has received a CRA rating of "outstanding" from the
OTS in its most recent exam, and Bank United Corp. has no knowledge of the
existence of any fact or circumstance or set of facts or circumstances which
could be reasonably expected to result in Bank United of Texas failing to be in
compliance in all material respects with such provisions or having its current
rating lowered.
4.26 Labor Matters. Neither Bank United Corp. nor any of its Subsidiaries
is a party to or is bound by any collective bargaining agreement, contract or
other agreement or understanding with a labor union or labor organization, nor
is Bank United Corp. or any of its Subsidiaries the subject of a proceeding
asserting that it or any such Subsidiary has committed an unfair labor practice
(within the meaning of the National Labor Relations Act) or seeking to compel
Bank United Corp. or any such Subsidiary to bargain with any labor organization
as to wages or
26
conditions of employment, nor is there any strike or other material labor
dispute or disputes involving it or any of its Subsidiaries pending, or to Bank
United Corp.'s knowledge, threatened, nor is Bank United Corp. aware of any
activity involving its or any of its Subsidiaries' employees seeking to certify
a collective bargaining unit or engaging in other
organizational activity.
5. REPRESENTATIONS AND WARRANTIES OF WASHINGTON MUTUAL
Washington Mutual hereby represents and warrants to Bank United
Corp. as follows:
5.1 Corporate Organization. Washington Mutual is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Washington. Washington Mutual has the corporate power and authority to own or
lease all of its properties and assets and to carry on its business as it is now
being conducted, and is duly licensed or qualified to do business in each
jurisdiction in which the nature of the business conducted by it or the
character or location of the properties and assets owned or leased by it makes
such licensing or qualification necessary, except where the failure to be so
licensed or qualified would not have or reasonably be expected to have a
Material Adverse Effect on Washington Mutual. Washington Mutual is duly
registered as a savings and loan holding company under HOLA. The copies of the
Articles of Incorporation and Bylaws of Washington Mutual which have previously
been made available to Bank United Corp. are true, complete and correct copies
of such documents as in effect as of the date of this Agreement. Washington
Mutual Bank, FA is a qualified thrift lender pursuant to Section 10(m) of HOLA
and its deposits and insured by the FDIC primarily through the SAIF, to the
fullest extent permitted by law. Washington Mutual Bank, FA is a member in good
standing of the FHLB of San Francisco.
5.2 Capitalization. The authorized capital stock of Washington
Mutual consists of 1,600,000,000 shares of Washington Mutual Common Stock and
10,000,000 shares of preferred stock, no par value. At the close of business on
July 31, 2000, there were 538,875,901 shares of Washington Mutual Common Stock
outstanding and no shares of Washington Mutual preferred stock outstanding. As
of July 31, 2000, no shares of Washington Mutual Common Stock or Washington
Mutual preferred stock were reserved for issuance. All of the issued and
outstanding shares of Washington Mutual Common Stock have been duly authorized
and validly issued and are fully paid, nonassessable and free of preemptive
rights, with no personal liability attaching to the ownership thereof. As of the
date of this Agreement, except (i) as set forth in Section 5.2 of the disclosure
schedule of Washington Mutual delivered to Bank United Corp. concurrently
herewith (the "Washington Mutual Disclosure Schedule"), (ii) as provided in the
Rights Agreement, dated as of October 16, 1990, between Washington Mutual and
First Interstate Bank of Washington (as amended and supplemented, the
"Washington Mutual Rights Agreement"), and (iii) as set forth elsewhere in this
Section 5.2, Washington Mutual does not have and is not bound by any outstanding
subscriptions, options, warrants, calls, commitments or agreements of any
character calling for the purchase or issuance of any shares of Washington
Mutual Common Stock or Washington Mutual preferred stock or any other equity
securities of Washington Mutual or any securities representing the right to
purchase or otherwise receive any shares of
27
Washington Mutual Common Stock or Washington Mutual preferred stock. The
shares of Washington Mutual Common Stock to be issued pursuant to the Merger
will be duly authorized and validly issued and, at the Effective Time, all such
shares will be fully paid, nonassessable and free of preemptive rights, with no
personal liability attaching to the ownership thereof.
5.3 Authority; No Violation.
(a) Washington Mutual has full corporate power and authority to
execute and deliver this Agreement and the Stock Option Agreement and to
consummate the transactions contemplated hereby and thereby. The execution and
delivery of this Agreement and the Stock Option Agreement and the consummation
of the transactions contemplated hereby (including the issuance of Washington
Mutual Common Stock hereunder) and thereby have been duly and validly approved
by the Board of Directors of Washington Mutual and no other corporate
proceedings on the part of Washington Mutual are necessary to approve this
Agreement or the Stock Option Agreement or to consummate the transactions
contemplated hereby and thereby. This Agreement and the Stock Option Agreement
have been duly and validly executed and delivered by Washington Mutual and
(assuming due authorization, execution and delivery by Bank United Corp.) each
constitutes a valid and binding obligation of Washington Mutual, enforceable
against Washington Mutual in accordance with its terms, except as enforcement
may be limited by general principles of equity whether applied in a court of law
or a court of equity and by bankruptcy, insolvency and similar laws affecting
creditors' rights and remedies generally.
(b) Except as set forth in Section 5.3(b) of the Washington Mutual
Disclosure Schedule, neither the execution and delivery of this Agreement or the
Stock Option Agreement by Washington Mutual, nor the consummation by Washington
Mutual of the transactions contemplated hereby or thereby, nor compliance by
Washington Mutual with any of the terms or provisions hereof or thereof, will
(i) violate any provision of the Articles of Incorporation or Bylaws of
Washington Mutual or any of the similar governing documents of any of its
Subsidiaries or (ii) assuming that the consents and approvals referred to in
Section 5.4 are duly obtained, (x) violate any statute, code, ordinance, rule,
regulation, judgment, order, writ, decree or injunction applicable to Washington
Mutual or any of its Subsidiaries or any of their respective properties or
assets, or (y) violate, conflict with, result in a breach of any provision of or
the loss of any benefit under, 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 or a right of termination or cancellation under, accelerate
the performance required by, or result in the creation of any Lien upon any of
the respective properties or assets of Washington Mutual or any of its
Subsidiaries under, any of the terms, conditions or provisions of any note,
bond, mortgage, indenture, deed of trust, license, lease, agreement or other
instrument or obligation to which Washington Mutual or any of its Subsidiaries
is a party, or by which they or any of their respective properties or assets may
be bound or affected, except (in the case of clause (y) above) for such
violations, conflicts, breaches or defaults which either individually or in the
aggregate will not have and would not reasonably be expected to have a Material
Adverse Effect on Washington Mutual.
28
5.4 Consents and Approvals. Except for (i) the approval of the Merger,
the Second Merger and the Association Merger by the OTS, (ii) approval of the
listing of the Washington Mutual Common Stock and Washington Mutual PIES to be
issued in the Merger on the NYSE, (iii) the filing with the SEC of the Proxy
Statement/Prospectus and the filing and declaration of effectiveness of the S-4,
(iv) the filing of the Articles of Merger with the Washington Secretary pursuant
to the WBCA and the Certificate of Merger with the DELAWARE Secretary pursuant
to the DGCL, (v) the adoption of the agreement of merger (within the meaning of
Section 252 of the DGCL) contained in this Agreement by the requisite votes of
the stockholders of Bank United Corp., (vi) the filing of the Articles of
Amendment by Washington Mutual with the Washington Secretary to provide for the
terms of the Washington Mutual Preferred Stock, (vii) the consents and approvals
set forth in Section 5.4 of the Washington Mutual Disclosure Schedule, and
(viii) the consents and approvals of third parties which are not Governmental
Entities, the failure of which to obtain will not have and would not be
reasonably expected to have, individually or in the aggregate, a Material
Adverse Effect, no consents or approvals of, or filings or registrations with,
any Governmental Entity or any third party are necessary in connection with (A)
the execution and delivery by Washington Mutual of this Agreement and (B) the
consummation by Washington Mutual of the Merger and the other transactions
contemplated hereby.
5.5 Reports. Washington Mutual and each of its Subsidiaries have timely
filed all material reports, registrations and statements, together with any
amendments required to be made with respect thereto, that they were required to
file since January 1, 1998 with any Governmental Entities, and have paid all
fees and assessments due and payable in connection therewith. Except as set
forth in Section 5.5 of the Washington Mutual Disclosure Schedule and except for
normal examinations conducted by a Governmental Entity in the regular course of
the business of Washington Mutual and its Subsidiaries, no Governmental Entity
has initiated any proceeding or, to the best knowledge of Washington Mutual,
investigation into the business or operations of Washington Mutual or any of its
Subsidiaries since January 1, 1997. There is no material unresolved violation,
criticism, or exception by any Government Entity with respect to any report or
statement relating to any examinations of Washington Mutual or any of its
Subsidiaries.
5.6 Financial Statements. Washington Mutual has previously made
available to Bank United Corp. copies of (a) the consolidated balance sheets of
Washington Mutual and its Subsidiaries, as of December 31, for the fiscal years
1998 and 1999, and the related consolidated statements of income, changes in
stockholders' equity and cash flows for the fiscal years 1997 through 1999,
inclusive, as reported in Washington Mutual's Annual Report on Form 10-K for the
fiscal year ended December 31, 1999 filed with the SEC under the Exchange Act,
in each case accompanied by the audit report of Deloitte & Touche, LLP,
independent public accountants with respect to Washington Mutual, and (b) the
unaudited consolidated balance sheets of Washington Mutual and its Subsidiaries
as of March 31, 1999, and March 31, 2000, and the related unaudited consolidated
statements of income, cash flows and changes in stockholders' equity for the
three-month periods then ended, as reported in Washington Mutual's Quarterly
Report on Form 10-Q for the period ended March 31, 2000 filed with the SEC under
the Exchange Act. Each of the financial statements referred to in this Section
5.6 (including the related notes, where applicable) fairly present, and the
financial statements referred to in Section 7.11 hereof (including the related
notes, where applicable) will fairly present (subject, in
29
the case of the unaudited statements, to normal recurring adjustments, none of
which are expected to be material in nature and amount), the results of the
consolidated operations and changes in stockholders' equity and consolidated
financial position of Washington Mutual and its Subsidiaries for the respective
fiscal periods or as of the respective dates therein set forth. Each of such
financial statements (including the related notes, where applicable) complies,
and the financial statements referred to in Section 7.11 hereof (including the
related notes, where applicable) will comply, in all material respects with
applicable accounting requirements and with the published rules and regulations
of the SEC with respect thereto; and each of such financial statements
(including the related notes, where applicable) has been, and the financial
statements referred to in Section 7.11 (including the related notes, where
applicable) will be, prepared in accordance with GAAP consistently applied
during the periods involved, except in each case as indicated in such statements
or in the notes thereto or, in the case of unaudited statements, as permitted by
Form 10-Q. The books and records of Washington Mutual and its Subsidiaries have
been, and are being, maintained in all material respects in accordance with GAAP
and any other applicable legal and accounting requirements and reflect only
actual transactions.
5.7 Broker's Fees. Except as set forth in Section 5.7 of the Washington
Mutual Disclosure Schedule, neither Washington Mutual nor any Subsidiary thereof
nor any of their respective officers or directors has employed any broker or
finder or incurred any liability for any broker's fees, commissions or finder's
fees in connection with any of the transactions contemplated by this Agreement.
5.8 Absence of Certain Changes or Events. Except as publicly disclosed
in Washington Mutual Reports (as defined in Section 5.10) filed prior to the
date hereof or as set forth in Section 5.8 of the Washington Mutual Disclosure
Schedule, since December 31, 1999, no event has occurred which has had or would
reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect on Washington Mutual.
5.9 Legal Proceedings.
(a) Neither Washington Mutual nor any of its Subsidiaries is a party
to any, and there are no pending or, to the best of Washington Mutual's
knowledge, threatened legal, administrative, arbitral or other proceedings,
claims, actions or governmental or regulatory investigations of any nature
against Washington Mutual or any of its Subsidiaries or challenging the validity
or propriety of the transactions contemplated by this Agreement as to which
there is a reasonable possibility of an adverse determination and which, if
adversely determined, would, individually or in the aggregate, have or
reasonably be expected to have a Material Adverse Effect on Washington Mutual.
(b) There is no injunction, order, judgment, decree, or regulatory
restriction imposed upon Washington Mutual, any of its Subsidiaries or the
assets of Washington Mutual or any of its Subsidiaries which has had, or would
reasonably be expected to have, a Material Adverse Effect on Washington Mutual.
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5.10 Taxes. Except as set forth in Section 5.10 of the Washington Mutual
Disclosure Schedule, each of Washington Mutual and its Subsidiaries has (i) duly
and timely filed (including pursuant to applicable extensions granted without
penalty) all material Tax Returns required to be filed by it, and such Tax
Returns are to the best knowledge of Washington Mutual true, correct and
complete in all material respects, and (ii) paid in full or made adequate
provision in the financial statements of Washington Mutual (in accordance with
GAAP) for all Taxes related to such Tax Returns. Except as set forth in Section
5.10 of the Washington Mutual Disclosure Schedule, no material deficiencies for
any Taxes have been proposed, asserted or assessed in writing against or with
respect to Washington Mutual or any of its Subsidiaries, and, to the best
knowledge of Washington Mutual, there are no material Liens for Taxes upon the
assets of either Washington Mutual or its Subsidiaries except for statutory
liens for current Taxes not yet due or Liens for Taxes that are being contested
in good faith by appropriate proceedings for which reserves adequate in
accordance with GAAP have been provided. Washington Mutual is not aware of any
fact or circumstance that could reasonably be expected to prevent the Merger
from qualifying as a reorganization within the meaning of Section 368(a) of the
Code.
5.11 SEC Reports. Washington Mutual has previously made available to Bank
United Corp. an accurate and complete copy of each final registration statement,
prospectus, report, schedule and definitive proxy statement filed since January
1, 1999 and prior to the date hereof by Washington Mutual with the SEC pursuant
to the Securities Act or the Exchange Act (the "Washington Mutual Reports"), and
no such registration statement, prospectus, report, schedule or proxy statement
contained any untrue statement of a material fact or omitted to state any
material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances in which they were made, not
misleading. Washington Mutual and its Subsidiaries have timely filed all
Washington Mutual Reports and other documents required to be filed by them under
the Securities Act and the Exchange Act, and, as of their respective dates, all
Washington Mutual Reports complied in all material respects with the published
rules and regulations of the SEC with respect thereto.
5.12 Compliance with Applicable Law. Except as disclosed in Section 5.12
of the Washington Mutual Disclosure Schedule, Washington Mutual and each of its
Subsidiaries hold, and have at all times held, all material licenses,
franchises, permits and authorizations necessary for the lawful conduct of their
respective businesses under and pursuant to all, and have complied with and are
not in default in any material respect under any, applicable law, statute,
order, rule, regulation, policy and/or guideline of any Governmental Entity
relating to Washington Mutual or any of its Subsidiaries, except where the
failure to hold such license, franchise, permit or authorization or such
noncompliance or default would not, individually or in the aggregate, have or
reasonably be expected to have a Material Adverse Effect on Washington Mutual,
and neither Washington Mutual nor any of its Subsidiaries knows of, or has
received notice of, any material violations of any of the above which,
individually or in the aggregate, would have or reasonably be expected to have a
Material Adverse Effect on Washington Mutual.
5.13 Agreements with Regulatory Agencies. Except as set forth in Section
5.13 of the Washington Mutual Disclosure Schedule, neither Washington Mutual nor
any of its Subsidiaries is subject to any cease-and-desist or other order issued
by, or is a party to any written agreement,
31
consent agreement or memorandum of understanding with, or is a party to any
commitment letter or similar undertaking to, or is subject to any order or
directive by, or has adopted any board resolutions at the request of (each,
whether or not set forth in Section 5.12 of the Washington Mutual Disclosure
Schedule, a "Washington Mutual Regulatory Agreement"), any Governmental Entity
that restricts the conduct of its business or relates to its capital adequacy,
its credit policies, its management or its business, nor has Washington Mutual
or any of its Subsidiaries been advised by any Governmental Entity that it is
considering issuing or requesting any Regulatory Agreement.
5.14 Undisclosed Liabilities. Except for those liabilities that are fully
reflected on reserved against on the consolidated balance sheet of Washington
Mutual included in the Washington Mutual Form 10-Q for the quarter ended March
31, 2000 or for liabilities incurred in the ordinary course of business
consistent with past practice since March 31, 2000, neither Washington Mutual
nor any of its Subsidiaries has incurred any liability of any nature whatsoever
(whether absolute, accrued, contingent or otherwise and whether due or to become
due) that, either alone or when combined with all similar liabilities, has had,
or would reasonably be expected to have, a Material Adverse Effect on Washington
Mutual.
5.15 Rights Agreement; Anti-takeover Provisions. Washington Mutual has
taken all action (including, if required, redeeming all of the outstanding
Rights issued pursuant to the Washington Mutual Rights Agreement or amending or
terminating the Washington Mutual Rights Agreement) so that the entering into of
this Agreement and the consummation of the transactions contemplated hereby do
not and will not result in the grant of any rights to any person under the
Washington Mutual Rights Agreement or enable or require the Washington Mutual to
be exercised, distributed or triggered. The Board of Directors of Washington
Mutual has taken all necessary action so that the takeover laws of the
Washington Business Corporation Act and any comparable provisions of Washington
Mutual's Articles of Incorporation do not and will not apply to this Agreement,
the Merger or the transactions contemplated hereby.
5.16 Washington Mutual Information. The information relating to
Washington Mutual and its Subsidiaries to be provided by Washington Mutual to be
contained in the Proxy Statement/Prospectus, the S-4 and the CPR Trust
Registration Statement, or in any other document filed with any other
Governmental Entity in connection herewith, will not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements therein, in light of the circumstances in which they are made,
not misleading. The Proxy Statement/Prospectus (except for such portions thereof
that relate only to Bank United Corp. or any of its Subsidiaries) will comply
as to form in all material respects with the provisions of the Exchange Act and
the rules and regulations thereunder. The S-4 will comply as to form in all
material respects with the provisions of the Securities Act and the rules and
regulations thereunder.
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5.17 Environmental Liability. Except as set forth in Section 5.17 of the
Washington Mutual Disclosure Schedule, there are no legal, administrative,
arbitral or other proceedings, claims, actions, causes of action, private
environmental investigations or remediation activities or governmental
investigations of any nature seeking to impose, or that reasonably would be
expected to result in the imposition, on Washington Mutual or any of its
Subsidiaries of any liability or obligation arising under any Environmental Law,
pending or, to the knowledge of Washington Mutual, threatened, against
Washington Mutual or any of its Subsidiaries, which liability or obligation that
would reasonably be expected to have a Material Adverse Effect on Washington
Mutual. To the knowledge of Washington Mutual, there is no reasonable basis for
any such proceeding, claim, action or governmental investigation that would
impose any liability or obligation that would have or would reasonably be
expected to have a Material Adverse Effect on Washington Mutual. To the
knowledge of Washington Mutual, during or prior to the period of (i) its or any
of its Subsidiaries' ownership or operation of any of their respective current
properties, (ii) its or any of its Subsidiaries' participation in the management
of any property, or (iii) its or any of its Subsidiaries' holding of a security
interest or other interest in any property, there were no releases or threatened
releases of hazardous, toxic, radioactive or dangerous materials or other
materials regulated under Environmental Laws in, on, under or affecting any such
property, which would reasonably be expected to have a Material Adverse Effect
on Washington Mutual. Neither Washington Mutual nor any of its Subsidiaries is
subject to any agreement, order, judgment, decree, letter or memorandum by or
with any court, governmental authority, regulatory agency or third party
imposing any material liability or obligation pursuant to or under any
Environmental Law that would reasonably be expected to have a Material Adverse
Effect on Washington Mutual.
5.18 Opinion of Financial Advisor. Washington Mutual has received the
opinion of Lehman Brothers, Inc., dated August 18, 2000, to the effect that,
as of such date, the Exchange Ratio is fair from a financial point of view to
Washington Mutual.
5.19 Community Reinvestment Act Compliance. Each of Washington Mutual
subsidiary depository institutions is in compliance in all material respects
with the applicable provisions of the CRA and has received a CRA rating of
"outstanding" from the OTS in its most recent exam, and Washington Mutual has no
knowledge of the existence of any fact or circumstances or set of facts or
circumstances which could be reasonably expected to result in any of such
institutions failing to be in compliance in all material respects with such
provisions or having its current rating lowered.
33
6. COVENANTS RELATING TO CONDUCT OF BUSINESS
6.1 Conduct of Business Prior to the Effective Time. Except as set forth
in Section 6.1 or 6.2 of the Bank United Corp. Disclosure Schedule, as expressly
contemplated or permitted by this Agreement, or as required by applicable law,
rule or regulation, during the period from the date of this Agreement to the
Effective Time, Bank United Corp. shall, and shall cause each of its
Subsidiaries to, (i) conduct its business in the usual, regular and ordinary
course consistent with past practice, (ii) use reasonable best efforts to
maintain and preserve intact its business organization, employees and
advantageous business relationships and retain the services of its officers and
key employees and (iii) take no action which would reasonably be expected to
adversely affect or delay its ability to obtain any approvals of any
Governmental Entity required to consummate the transactions contemplated hereby
or to consummate the transactions contemplated hereby.
6.2 Bank United Corp. Forbearances. Except as set forth in Section 6.2
of the Bank United Corp. Disclosure Schedule, as expressly contemplated or
permitted by this Agreement, or as required by applicable law, rule or
regulation, during the period from the date of this Agreement to the Effective
Time, Bank United Corp. shall not, and shall not permit any of its Subsidiaries
to, without the prior written consent of Washington Mutual (which consent shall
not be unreasonably withheld):
(a) adjust, split, combine or reclassify any capital stock; set any
record or payment dates for the payment of any dividends or distributions on its
capital stock except in the ordinary and usual course of business consistent
with past practice; make, declare or pay any dividend or make any other
distribution on, or directly or indirectly redeem, purchase or otherwise
acquire, any shares of its capital stock or any securities or obligations
convertible into or exchangeable for any shares of its capital stock, or except
as otherwise permitted by this paragraph (a) or by paragraph (e) grant any stock
appreciation rights or grant any individual, corporation, joint venture or other
entity any right to acquire any shares of its capital stock, other than (i)
regular quarterly cash dividends on Bank United Corp. Common Stock equal to the
rate paid during the fiscal quarter immediately preceding the date hereof,
provided, however, that no dividend shall be paid by Bank United Corp. on Bank
United Corp. Common Stock if Bank United Corp. shall be required to borrow to do
so; (ii) in the case of Bank United Corp. and Bank United of Texas series of
preferred stock outstanding on the date hereof, cash dividends thereon at the
rates set forth in the applicable certificate of incorporation, certificate of
designation or supplemental charter for such securities; (iii) dividends paid by
any of the Subsidiaries of Bank United Corp. so long as such dividends are only
paid to Bank United Corp. or any of its wholly owned Subsidiaries; provided that
no such dividend shall cause Bank United of Texas to cease to qualify as a "well
capitalized" institution under 12 CFR 565); or issue any additional shares of
capital stock except pursuant to the exercise of stock options outstanding as of
the date hereof or permitted to be issued under this Section 6.2;
(b) sell, transfer, mortgage, encumber or otherwise dispose of any
of its assets or properties to any individual, corporation or other entity
(other than a direct wholly owned Subsidiary), or cancel, release or assign any
indebtedness to any such person or any claims held
34
by any such person, in each case that is material to such party, except (i) in
the ordinary course of business consistent with past practice or (ii) as
expressly required by the terms of any contracts or agreements in force at the
date of this Agreement and set out in Section 6.2 of the Bank United Corp.
Disclosure Schedule;
(c) make any acquisition or investment, by purchase or other
acquisition of stock or other equity interests (other than in a fiduciary or
agent capacity or pursuant to written contracts or agreements entered into prior
to the date hereof (true and correct copies of which have been previously
delivered to Washington Mutual)), by merger, consolidation or other business
combination, or by contributions to capital; or make any material property
transfers or material purchases of any property or assets, in or from any other
individual, corporation, joint venture or other entity other than a wholly
owned Subsidiary of Bank United Corp., except as expressly required by the
terms of any contracts or agreements in force at the date of this Agreement
and set out in Section 6.2 of the Bank United Corp. Disclosure Schedule;
(d) enter into, renew or terminate any contract or agreement, other
than Loans made in the ordinary course of business, that calls for aggregate
annual payments of $500,000 and which is not either (i) terminable at will on 60
days or less notice without payment of a penalty in excess of $50,000 or (ii)
has a term of less than one year; or make any material change in any of its
leases or such contracts, other than renewals of such contracts or leases for a
term of one year or less without material adverse changes to the terms thereof;
(e) other than general salary increases consistent with past
practices for employees or as required by contractual commitments outstanding on
the date hereof (provided that any new salary increases resulting from the
salary scale adopted prior to the date hereof may be phased in by Bank United
Corp. only in accordance with such salary scale increase program), increase in
any material respect the compensation or fringe benefits of any of its employees
or pay any pension or retirement allowance not required by any existing plan or
agreement to any such employees or become a party to, amend (other than
amendments required by law) or commit itself to any pension, retirement,
profit-sharing, severance or welfare benefit plan or agreement or employment
agreement with or for the benefit of any employee or accelerate the vesting of
any stock options or other stock-based compensation; provided, that Bank United
Corp. may pay a bonus to one or more of the Bank United Corp. employees set
forth on Exhibit 6.2 hereto so long as such bonus, in the aggregate, does not
exceed the amount set forth across from the applicable employee's name therein;
(f) authorize or permit any of its officers, directors, employees,
representatives or agents (collectively, "Representatives") to directly or
indirectly solicit, initiate or encourage any inquiries relating to, or that may
reasonably be expected to lead to, or the making of any proposal which
constitutes, a Takeover Proposal (as defined below), or recommend or endorse any
Takeover Proposal, or participate in any discussions or negotiations, or provide
third parties with any nonpublic information, relating to any such Takeover
Proposal or otherwise facilitate any effort or attempt to make or implement a
Takeover Proposal; provided, however, that, at any time prior to the time its
stockholders shall have approved this Agreement and the Merger, Bank United
Corp. may, and may authorize and permit its
35
Representatives to, (i) provide third parties with nonpublic information and
participate in discussions and negotiations with any third party in response to
a Takeover Proposal which was not solicited subsequent to the date hereof if
Bank United Corp.'s Board of Directors, after consulting with its financial
advisers and outside counsel, has determined in its reasonable good faith
judgment that such action is necessary to comply with its fiduciary duties under
applicable law and (ii) the Bank United Corp. Board of Directors may take the
actions described in the proviso in the second sentence of Section 7.3(b) as
permitted thereby; provided, further, however, that nothing contained in this
Agreement shall prevent Bank United Corp. or the Bank United Corp. Board of
Directors from (A) complying with Rule 14e-3 promulgated under the Exchange Act
or (B) making any disclosure to the holders of the Bank United Corp. Capital
Stock required by applicable law. Bank United Corp. shall (i) advise Washington
Mutual orally (within one day) and in writing (as promptly as practicable
thereafter) of the receipt after the date hereof of any Takeover Proposal by it
or by any of its Subsidiaries or any of its Representatives and (ii) unless its
Board of Directors, after consulting with its financial advisers and outside
counsel, has determined in its reasonable good faith judgment that it cannot
take such action if it is to comply with its fiduciary duties under applicable
law, inform Washington Mutual orally and in writing, as promptly as practicable
after the receipt thereof, of the material terms and conditions of any such
Takeover Proposal (including the identity of the party making such inquiry or
proposal) and shall keep Washington Mutual informed of the status (including any
changes in the material terms and conditions) thereof. Bank United Corp. shall
not furnish any nonpublic information to any other party pursuant to this
Section 6.2(f) except pursuant to the terms of a confidentiality agreement on
customary terms as advised by its outside legal counsel. Bank United Corp. will
immediately cease and cause to be terminated any activities, discussions or
negotiations conducted prior to the date of this Agreement with any parties
other than Washington Mutual with respect to any Takeover Proposal and require
the return (or if permitted by the terms of the applicable confidentiality
agreement, the destruction) of all confidential information previously provided
to such parties. As used in this Agreement, "Takeover Proposal" shall mean any
inquiry, proposal or offer relating to any tender or exchange offer, proposal
for a merger, consolidation or other business combination involving Bank United
Corp. or any of its Subsidiaries or the acquisition in any manner of 25% or more
of the voting stock or equity, or 25% or more of the consolidated assets, of
Bank United Corp. or any of its Subsidiaries, other than the transactions
contemplated by this Agreement;
(g) make any capital expenditures in excess of (A) $300,000 per
project or related series of projects or (B) $1,800,000 in the aggregate, other
than expenditures necessary to maintain existing assets in good repair;
(h) except in the ordinary course of business, make application for
the opening, relocation or closing of any, or open, relocate or close any,
branch office or loan production or servicing facility;
(i) except for Loans or commitments for Loans that have previously
been approved by Bank United Corp. prior to the date of this Agreement, (A) make
or acquire any Loan or issue a commitment for any Loan (1) except for Loans and
commitments that are made in the ordinary course of business consistent with
past practice or (2) with a principal balance
36
above $10,000,000, other than with the prior consent of Washington Mutual, which
consent will not be unreasonably withheld (the parties hereby agreeing to work
in a cooperative manner to establish procedures by which such consent will be
provided in order to ensure that this consent process does not materially
interfere with the continued operations of Bank United Corp. in the ordinary
course of business consistent with past practice); (B) take any action that
would result in any discretionary releases of collateral or guarantees or
otherwise restructure any Loan or commitment for any Loan with a principal
balance in excess of $1,000,000; or (C) agree to guarantee the obligations of
any person other than any wholly owned Subsidiary of Bank United Corp.;
(j) except as otherwise expressly permitted elsewhere in this Section
6.2, engage or participate in any material transaction or incur or sustain any
material obligation, in each case other than in the ordinary course of business;
(k) settle any claim, action or proceeding involving monetary
damages, except in the ordinary course of business consistent with past
practice, or agree or consent to the issuance of any injunction, decree, order
or judgment restricting its business or operations;
(l) amend its certificate of incorporation, bylaws or similar
governing documents;
(m) except in the ordinary course of business consistent with past
practice, materially change its investment securities portfolio policy, or the
manner in which the portfolio is classified or reported;
(n) make any material changes in its policies and practices with
respect to (i) underwriting, pricing, originating, acquiring, selling,
servicing, or buying or selling rights to service loans or (ii) hedging its loan
positions or commitments;
(o) take any action that is intended or may reasonably be expected to
result in any of its representations and warranties set forth in this Agreement
being or becoming untrue in any material respect at any time prior to the
Effective Time, or in any of the conditions to the Merger set forth in Section
8.1 or 8.2 not being satisfied or in a material violation of any provision of
this Agreement, except, in every case, as may be required by applicable law;
(p) make any changes in its accounting methods, practices or
policies, except as may be required under law, rule, regulation or GAAP, in each
case as concurred in by Bank United Corp.'s independent public accountants;
(q) enter into any securitizations of any loans or create any
special purpose funding entity;
(r) settle or compromise any material Tax liability of Bank United
Corp. or any of its Subsidiaries or, except in the ordinary course of business
consistent with past practice, agree to an extension of the statute of
limitations with respect to the assessment or determination of Taxes of Bank
United Corp. or any of its Subsidiaries ; or
37
(s) agree to, or make any commitment to, take any of the actions
prohibited by this Section 6.2.
6.3 No Fundamental Washington Mutual Changes. Except as expressly
contemplated or permitted by this Agreement, or as required by applicable law,
rule or regulation, during the period from the date of this Agreement to the
Effective Time, Washington Mutual shall not, without the prior written consent
of Bank United Corp. (which consent shall not be unreasonably withheld), (i)
amend its articles of incorporation or bylaws in a manner that would adversely
affect the economic benefits of the Merger to the holders of Bank United Corp.
Capital Stock, (ii) take any action that is intended or may reasonably be
expected to result in any of its representations and warranties set forth in
this Agreement being or becoming untrue in any material respect at any time
prior to the Effective Time, or in any of the conditions to the Merger set forth
in Section 8.1 or 8.3 not being satisfied or in a material violation of any
provision of this Agreement, except, in every case, as may be required by
applicable law, or (iii) agree to, or make any commitment to, take any of the
actions prohibited by this Section 6.3.
7. ADDITIONAL AGREEMENTS
7.1 Regulatory Matters.
(a) Washington Mutual and Bank United Corp. shall promptly prepare
and file with the SEC the Proxy Statement/Prospectus and the S-4. Each of
Washington Mutual and Bank United Corp. shall use reasonable best efforts to
have the S-4 declared effective under the Securities Act as promptly as
practicable after such filing, and Bank United Corp. shall thereafter mail the
Proxy Statement/Prospectus to its stockholders.
(b) Bank United Corp. shall promptly prepare and cause the CPR Trust
to file with the SEC the CPR Trust Registration Statement (except to the extent
the CPR Certificates can be registered under applicable law, and are registered,
on the S-4). Bank United Corp. shall use reasonable best efforts to have the CPR
Trust Registration Statement declared effective under the Securities Act as
promptly as practicable after such filing (except to the extent the CPR
Certificates can be registered under applicable law, and are registered, on the
S-4), and to cause the Trust Agreement to be qualified under the Trust Indenture
Act of 1939, as amended, including the rules and regulations thereunder (the
"Trust Indenture Act"), if required by applicable law.
(c) Subject to the other provisions of this Agreement, the parties
hereto shall cooperate with each other and use reasonable best efforts to
promptly prepare and file all necessary documentation, to effect all
applications, notices, petitions and filings, to obtain as promptly as
practicable all permits, consents, approvals and authorizations of all third
parties and Governmental Entities which are necessary or advisable to
consummate the transactions contemplated by this Agreement (including without
limitation the Merger) and to comply with the terms and conditions of all such
permits, consents, approvals and authorizations of all such third parties and
Governmental Entities.
38
(d) Washington Mutual and Bank United Corp. shall, upon request,
furnish each other with all information concerning themselves, their
Subsidiaries, directors, officers and stockholders and such other matters as may
be reasonably necessary or advisable in connection with the Proxy
Statement/Prospectus, the S-4 or any other statement, filing, notice or
application made by or on behalf of Washington Mutual, Bank United Corp. or any
of their respective Subsidiaries to any Governmental Entity in connection with
the Merger and the other transactions contemplated by this Agreement.
(e) Washington Mutual and Bank United Corp. shall promptly advise
each other upon receiving any communication from any Governmental Entity whose
consent or approval is required for consummation of the transactions
contemplated by this Agreement which causes such party to believe that there is
a reasonable likelihood that any Requisite Regulatory Approval (as defined in
Section 8.1(c) below) will not be obtained or that the receipt of any such
approval will be materially delayed or conditioned.
7.2 Access to Information.
(a) Upon reasonable notice and subject to applicable laws relating to
the exchange of information, Bank United Corp. shall, and shall cause each of
its Subsidiaries to, afford to the officers, employees, accountants, counsel and
other Representatives of Washington Mutual access, during normal business hours
during the period prior to the Effective Time, to all its properties, books,
contracts, commitments and records, and to its officers, employees, accountants,
counsel and other representatives, in each case in a manner not unreasonably
disruptive to the operation of the business of Bank United Corp. and its
Subsidiaries, and, during such period, Bank United Corp. shall, and shall cause
its Subsidiaries to, make available to Washington Mutual (i) a copy of each
report, schedule, registration statement and other document filed or received by
it during such period pursuant to the requirements of Federal securities laws or
Federal or state banking, mortgage lending, real estate or consumer finance or
protection laws (other than reports or documents which Bank United Corp. is not
permitted to disclose under applicable law) and (ii) all other information
concerning its business, properties and personnel as such other party may
reasonably request. Neither Bank United Corp. nor any of its Subsidiaries shall
be required to provide access to or to disclose information where such access or
disclosure would violate or prejudice the rights of its customers, jeopardize
the attorney-client privilege of the institution in possession or control of
such information or contravene any law, rule, regulation, order, judgment,
decree, fiduciary duty or binding agreement entered into prior to the date of
this Agreement or in the ordinary course of business consistent with past
practice. The parties hereto will make appropriate substitute disclosure
arrangements under circumstances in which the restrictions of the preceding
sentence apply.
(b) During the 30-day period prior to the Closing and from time to
time after the date of this Agreement upon Bank United Corp.'s reasonable
request, Bank United Corp. and its Representatives shall have a reasonable
opportunity to conduct an update of their due diligence review of Washington
Mutual and its Subsidiaries. In order to permit such due diligence update, upon
reasonable notice and subject to applicable laws relating to the exchange of
information, and in a manner not unreasonably disruptive to the operation of the
business of
39
Washington Mutual and its Subsidiaries, Washington Mutual shall afford Bank
United Corp. and its Representatives reasonable access, during normal business
hours during such 30-day period or upon such reasonable request, to all its
properties, books, contracts and records relating to the assets, stock
ownership, properties, obligations, operations and liabilities of Washington
Mutual and its Subsidiaries, and to its officers, employees, accountants,
counsel and other representatives, in all cases in which Bank United Corp. may
have a reasonable interest. Washington Mutual and its Subsidiaries shall not be
required to provide access to or disclose information where such access or
disclosure would violate or prejudice the rights of its customers, jeopardize
the attorney-client privilege of Washington Mutual or any of its Subsidiaries or
contravene any law, rule, regulation, order, judgment, decree, fiduciary duty
or binding agreement entered into prior to the date of this Agreement or in the
ordinary course of business consistent with past practice. The parties hereto
will make appropriate substitute disclosure arrangements under circumstances in
which the restrictions of the preceding sentence apply.
(c) Washington Mutual and Bank United Corp. shall hold all
information furnished by the other party or any of its Subsidiaries or
representatives pursuant to Section 7.2(a) or (b) in confidence to the extent
required by, and in accordance with, the provisions of the Confidentiality
Agreement(s), dated March 23, 2000, between Washington Mutual and Bank United
Corp. (the "Confidentiality Agreement(s)").
(d) No investigation by either of the parties or their respective
Representatives shall affect the representations, warranties, covenants or
agreements of the other set forth herein.
7.3 Stockholder Approval. Bank United Corp. shall duly call, give notice
of, convene and hold a meeting of its stockholders to be held as soon as
practicable following the date hereof for the purpose of obtaining the requisite
stockholder approval required in connection with this Agreement and the Merger;
provided, however, that Bank United Corp. shall not be required to convene and
hold such meeting at any time substantially earlier than the time when
Washington Mutual anticipates receiving all requisite regulatory approvals for
the Merger. Bank United Corp. shall, through its Board of Directors, recommend
to its stockholders approval of the Merger; provided, however, that this
Section 7.3 shall not prohibit accurate disclosure by Bank United Corp. of
information that is required in the Proxy Statement/Prospectus or any other
document required to be filed with the SEC (including without limitation a
disclosure statement on Schedule 14D-9) or otherwise required by applicable law
or regulation or the rules of The Nasdaq Stock Market to be publicly disclosed;
provided, further, however, that Bank United Corp. may withdraw or modify such
recommendation to the extent that its Board of Directors, after consulting with
its financial advisers and outside counsel, has determined in its reasonable
good faith judgment that such action is necessary to comply with its fiduciary
duties under applicable law. In the event that the Board of Directors of Bank
United Corp. withdraws or modifies its recommendation in accordance with the
preceding sentence, the Board shall nevertheless submit this Agreement and the
Merger to its stockholders for approval.
7.4 Legal Conditions to Merger.
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(a) Subject to the terms and conditions of this Agreement, each of
Washington Mutual and Bank United Corp. shall, and shall cause its Subsidiaries
to, use their reasonable best efforts (i) to take, or cause to be taken, all
actions necessary, proper or advisable to comply promptly with all legal
requirements which may be imposed on such party or its Subsidiaries with respect
to the Merger and, subject to the conditions set forth in Section 8 hereof, to
consummate the transactions contemplated by this Agreement and (ii) to obtain
(and to cooperate with the other party to obtain) any consent, authorization,
order or approval of, or any exemption by, any Governmental Entity and any other
third party which is required to be obtained by Bank United Corp. or Washington
Mutual or any of their respective Subsidiaries in connection with the Merger and
the other transactions contemplated by this Agreement.
(b) Subject to the terms and conditions of this Agreement, each of
Washington Mutual and Bank United Corp. agrees to use reasonable best efforts to
take, or cause to be taken, all actions, and to do, or cause to be done, all
things necessary, proper or advisable to consummate and make effective, as soon
as practicable after the date of this Agreement, the transactions contemplated
hereby, including, without limitation, using reasonable best efforts to (i)
modify or amend any contracts, plans or arrangements to which Washington Mutual
or Bank United Corp. is a party (to the extent permitted by the terms thereof)
if necessary in order to satisfy the conditions to closing set forth in Section
8 hereof, (ii) lift or rescind any injunction or restraining order or other
order adversely affecting the ability of the parties to consummate the
transactions contemplated hereby, and (iii) defend any litigation seeking to
enjoin, prevent or delay the consummation of the transactions contemplated
hereby or seeking material damages.
7.5 Affiliates. Bank United Corp. shall use its reasonable best efforts
to cause each director, executive officer and other person who is an "affiliate"
(for purposes of Rule 145 under the Securities Act) of Bank United Corp. to
deliver to Washington Mutual, as soon as practicable after the date of this
Agreement, and in any event prior to the date of the stockholders meeting called
by Bank United Corp. pursuant to Section 7.3 hereof, a written agreement, in the
form and substance reasonably satisfactory to Washington Mutual, relating to
required transfer restrictions on the Washington Mutual Common Stock received by
them in the Merger pursuant to Rule 145.
7.6 Stock Exchange Listing. Washington Mutual shall use its best efforts
to cause the shares of Washington Mutual Common Stock and the Washington Mutual
PIES to be issued in the Merger to be approved for listing on the NYSE, subject
to official notice of issuance, prior to the Effective Time.
7.7 Employees; Employee Benefit Plans.
(a) From and after the Effective Time, the benefits to be provided to
employees of Bank United Corp. and its Subsidiaries as of the Effective Time
("Covered Employees") shall be the benefit plans and programs provided to
similarly situated employees of Washington Mutual. Washington Mutual shall, from
and after the Effective Time, (i) comply with the Plans and other contractual
commitments of Bank United Corp. to its current and former employees in
accordance with their terms and honor all employee benefit obligations to
current and former employees of Bank United Corp. and its Subsidiaries under the
Plans or the
41
applicable contractual commitment, (ii) provide Covered Employees credit for the
most recent period of uninterrupted service (including any bridging or prior
service credit, without regard to whether there has been an interruption in
service, solely to the extent provided by Bank United Corp. and its Subsidiaries
as of the date hereof) with Bank United Corp. or any of its Subsidiaries (and
their predecessors) prior to the Effective Time for all purposes under employee
benefit plans of Washington Mutual or its Subsidiaries (other than Washington
Mutual's noncontributory cash balance defined benefit pension plan), (iii)
permit each Covered Employee which was a participant in the Bank United
Corp. 401(k) plan (the "401(k) Plan") immediately prior to the Closing Date to
commence participation in the Washington Mutual, Inc. 401(k) plan on the
Closing Date, (iv) cause any and all pre-existing condition limitations (to
the extent such limitations did not apply to a pre-existing condition under
comparable Plans) and eligibility waiting periods under group health plans of
Washington Mutual to be waived with respect to Covered Employees (and their
eligible dependents) who become participants in such group health plans and
(v) use reasonable efforts to give credit for or otherwise take into account the
out-of-pocket expenses and annual expense limitations paid by each Covered
Employee under the comparable Plans for the year in which the Effective Time
occurs. From and after the Effective Time, Washington Mutual shall honor all
vacation and paid time off of the Covered Employees accrued as of the Effective
Time, in accordance with the Bank United Corp. policy as in effect on the date
hereof. From and after the Effective Time, a Covered Employee who is terminated
(as defined in the applicable Bank United Corp. severance plan or policy as in
effect immediately prior to the Effective Time) during the period commencing at
the Effective Time and ending on the 12-month anniversary thereof shall be
entitled to receive the severance payments and benefits under the applicable
Bank United Corp. severance plan or policy as in effect on the date hereof
(without amendment on or after the Effective Time). Except as otherwise
prohibited under this Section 7.7, nothing in this Section 7.7 shall be
interpreted as preventing Washington Mutual or its Subsidiaries from amending,
modifying or terminating any Plans or other contracts, arrangements, commitments
or understandings, in a manner consistent with their terms and applicable law.
(b) Subject to applicable law and the amendment provisions of the
401(k) Plan, Bank United Corp. agrees to amend the 401(k) Plan prior to the
Effective Time so that (i) participant loans are no longer available as of the
Effective Time, (ii) discretionary matching contributions on participant
contributions made after the Effective Time shall not exceed 100% of such
participant's contributions not in excess of three percent of each participant's
considered compensation, (iii) on and after the Effective Time, employees shall
first become participants in the 401(k) Plan only after completing one year of
active service with the plan sponsor and its related entities, and (iv)
effective as of the Effective Time, the vesting schedule shall be revised to
conform to the following: (A) less than two years vesting service = 0% vested;
(B) two years vesting service = 25% vested; (C) three years vesting
service = 50% vested; (D) four years vesting service = 75% vested; and
(E) five or more years vesting service = 100% vested. Bank United Corp. agrees
that the plan does not currently provide, and will not be amended to provide,
benefit distribution options other than lump sum distributions with respect to
any portion of a participant's account attributable to service with Bank United
Corp.
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7.8 Indemnification; Directors' and Officers' Insurance.
(a) From and after the Effective Time, in the event of any threatened
or actual claim, action, suit, proceeding or investigation, whether civil,
criminal or administrative, including, without limitation, any such claim,
action, suit, proceeding or investigation in which any person who is now, or has
been at any time prior to the date of this Agreement, or who becomes prior to
the Effective Time, a director, officer or employee of Bank United Corp. or any
of its Subsidiaries (the "Indemnified Parties") is, or is threatened to be, made
a party based in whole or in part on, or arising in whole or in part out of, or
pertaining to (i) the fact that he is or was a director, officer or employee of
Bank United Corp., any of its Subsidiaries or any of their respective
predecessors or was prior to the Effective Time serving at the request of any
such party as a director, officer, employee, fiduciary or agent of another
corporation, partnership, trust or other enterprise (a list of which with
respect to the directors, officers or employees of Bank United Corp. or any of
its Subsidiaries as of the date of this Agreement is set forth in Section 7.8(a)
of the Bank United Corp. Disclosure Schedule) or (ii) this Agreement, or any of
the transactions contemplated hereby and all actions taken by an Indemnified
Party in connection herewith, whether in any case asserted or arising before or
after the Effective Time, the parties hereto agree to cooperate in connection
with defending against and responding to such proceedings. It is understood and
agreed that after the Effective Time, Washington Mutual shall indemnify and hold
harmless, as and to the fullest extent permitted by the corporate governance
documents of Bank United Corp. or its Subsidiaries as of the date hereof and by
law, each such Indemnified Party against any losses, claims, damages,
liabilities, costs, expenses (including reasonable attorneys' fees and expenses
in advance of the final disposition of any claim, suit, proceeding or
investigation to each Indemnified Parry to the fullest extent permitted by law
upon receipt of an undertaking, to the extent required by the DGCL, from such
Indemnified Party to repay such advanced expenses if it is finally and
unappealably determined that such Indemnified Party was not entitled to
indemnification hereunder), judgments, fines and amounts paid in settlement in
connection with any such threatened or actual claim, action, suit, proceeding or
investigation, and in the event of any such threatened or actual claim, action,
suit, proceeding or investigation (whether asserted or arising before or after
the Effective Time) (collectively, "Claims"), the Indemnified Parties may retain
counsel reasonably satisfactory to them after consultation with Washington
Mutual; provided, however, that (1) Washington Mutual shall not be liable for
any settlement effected without its prior written consent (which consent shall
not be unreasonably withheld) and (2) Washington Mutual shall have no obligation
hereunder to any Indemnified Party when and if a court of competent jurisdiction
shall ultimately determine, and such determination shall have become final and
nonappealable, that indemnification of such Indemnified Party in the manner
contemplated hereby is prohibited by the corporate governance documents of Bank
United Corp. or its Subsidiaries or applicable law. Any Indemnified Party
wishing to claim indemnification under this Section 7.8, upon learning of any
such claim, action, suit, proceeding or investigation, shall notify Washington
Mutual thereof, provided that the failure to so notify shall not affect the
obligations of Washington Mutual under this Section 7.8 except (and only) to the
extent such failure to notify materially prejudices Washington Mutual.
(b) Without limiting any of the obligations under paragraph (a) of
this Section 7.8, Washington Mutual agrees that all rights to indemnification
and all limitations of
43
liability existing in favor of the Indemnified Parties as provided in Bank
United Corp.'s Certificate of Incorporation or Bylaws or in the similar
governing documents of any of Bank United Corp.'s Subsidiaries as in effect as
of the date of this Agreement with respect to matters occurring on or prior to
the Effective Time shall survive the Merger and shall continue in full force and
effect thereafter, without any amendment thereto; provided, however, that
nothing contained in this Section 7.8(b) shall be deemed to preclude the
liquidation, consolidation or merger of Bank United Corp. or any Subsidiary
thereof, in which case all of such rights to indemnification and limitations on
liability shall be deemed to so survive and continue notwithstanding any such
liquidation, consolidation or merger and shall constitute rights which may be
asserted against Washington Mutual. Nothing contained in this Section 7.8(b)
shall be deemed to preclude any rights to indemnification or limitations on
liability provided in Washington Mutual's Articles of Incorporation or Bylaws or
the similar governing documents of any of Washington Mutual's Subsidiaries with
respect to matters occurring subsequent to the Effective Time to the extent that
the provisions establishing such rights or limitations are not otherwise amended
to the contrary.
(c) Washington Mutual shall use its best efforts to cause the persons
serving as officers and directors of Bank United Corp. immediately prior to the
Effective Time to be covered for a period of six (6) years from the Closing Date
by the directors' and officers' liability insurance policy or policies
maintained by Washington Mutual (provided that Washington Mutual's policy or
policies provide at least the same coverage and amounts containing terms and
conditions which are not less advantageous to such directors and officers of
Bank United Corp. than the terms and conditions of the existing directors' and
officers' liability insurance policy of Bank United Corp., and provided further
that in no event will Washington Mutual be required to expend in any one year an
amount in excess of 200% of the annual premiums currently paid by Bank United
Corp. for such insurance (the "Insurance Amount"), and further provided, that if
Washington Mutual is unable to maintain or obtain the insurance called for by
this Section 7.8(c) as a result of the preceding proviso, Washington Mutual
shall use its reasonable best efforts to obtain as much comparable insurance as
available for the Insurance Amount) with respect to acts or omissions occurring
prior to the Effective Time which were committed by such officers and directors
in their capacity as such. The provisions of this Section 7.8 are intended to be
for the benefit of, and shall be enforceable by, each Indemnified Party and his
or her heirs and representatives.
7.9 Additional Agreements. In case at any time after the Effective Time
any further action is necessary or desirable to carry out the purposes of this
Agreement (including, without limitation, any merger between a Subsidiary of
Washington Mutual and a Subsidiary of Bank United Corp.) or to vest the
Surviving Company with full title to all properties, assets, rights, approvals,
immunities and franchises of any of the parties to the Merger, the proper
officers and directors of each party to this Agreement and their respective
Subsidiaries shall take all such necessary action as may be reasonably requested
by Washington Mutual.
44
7.10 Advice of Changes. Washington Mutual and Bank United Corp. shall
promptly advise the other party of any change or event which, individually or in
the aggregate with other such changes or events, has a Material Adverse Effect
on it or which it believes would or would be reasonably likely to cause or
constitute a material breach of any of its representations, warranties or
covenants contained herein.
7.11 Subsequent Interim and Annual Financial Statements.
(a) As soon as reasonably available, but in no event more than 45
days after the end of each fiscal quarter (other than the fourth quarter of a
fiscal year) or 90 days after the end of each fiscal year ending after the date
of this Agreement, each party will deliver to the other party its Quarterly
Report on Form 10-Q or its Annual Report on Form 10-K, as the case may be, as
filed with the SEC under the Exchange Act.
(b) As soon as reasonably practicable and as soon as they are
available, but in no event more than 30 days, after the end of each calendar
month ending after the date of this Agreement, Bank United Corp. shall furnish
to Washington Mutual (i) consolidated and consolidating financial statements
(including balance sheet, statement of operations and stockholders' equity) of
Bank United Corp. and each of its Subsidiaries as of and for such month then
ended, (ii) servicing reports regarding cash flows, delinquencies and
foreclosures on asset pools serviced or master serviced by Bank United Corp. or
any of its Subsidiaries, and (iii) any internal management reports relating to
the foregoing. All information furnished by Bank United Corp. to Washington
Mutual pursuant to this Section 7.11(b) shall be held in confidence by
Washington Mutual to the extent required by, and in accordance with, the
provisions of the Confidentiality Agreement(s).
7.12 CPR Trust. Bank United Corp. agrees to (i) take all actions
necessary to cause the CPR Trust to be formed prior to the Effective Time and to
be operated in accordance with the Trust Agreement and (ii) execute the
Commitment (as defined in Section 8.2) and perform its obligations thereunder.
In addition, Bank United Corp. agrees to take all actions necessary to cause the
issuance of the CPR Certificates by the CPR Trust to Bank United Corp. and the
distribution of such CPR Certificates to the holders of Bank United Corp. Common
Stock prior to the Effective Time pursuant to the merger described in
Section 7.15. Except as set forth in this Section 7.12, the terms of the CPR
Trust and the CPR Certificates shall be as set forth in the Trust Agreement.
Bank United Corp. agrees to cause the CPR Trust immediately prior to the
Effective Time to deliver to Washington Mutual a number of CPR Certificates
sufficient for the delivery of CPR Certificates required by Section 2.8.
Washington Mutual hereby agrees to honor and perform the obligations of Bank
United Corp. under both the Trust Agreement and the Commitment on and after the
Effective Time.
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7.13 Reorganization. Neither Washington Mutual nor Bank United Corp.
shall take, or cause or permit any of its Subsidiaries to take, any action that
could reasonably be expected to prevent the Merger from qualifying as a
reorganization within the meaning of Section 368(a) of the Code.
7.14 Exemption from Liability Under Section 16(b). Assuming that Bank
United Corp. delivers to Washington Mutual the Section 16 Information (as
defined below) reasonably in advance of the Effective Time, the Board of
Directors of Washington Mutual, or a committee of Non-Employee Directors thereof
(as such term is defined for purposes of Rule 16b-3(d) under the Exchange Act),
shall reasonably promptly thereafter and in any event prior to the Effective
Time adopt a resolution providing that the receipt by the Bank United Corp.
Insiders (as defined below) of Washington Mutual Common Stock in exchange for
shares of Bank United Corp. Common Stock, and of options to purchase Washington
Mutual Common Stock upon conversion of Bank United Corp. Options, in each case
pursuant to the transactions contemplated hereby and to the extent such
securities are listed in the Section 16 Information provided by Bank United
Corp. to Washington Mutual prior to the Effective Time, are intended to be
exempt from liability pursuant to Section 16(b) under the Exchange Act such that
any such receipt shall be so exempt. "Section 16 Information" shall mean
information accurate in all respects regarding the Bank United Corp. Insiders,
the number of shares of Bank United Corp. Common Stock held by each such Bank
United Corp. Insider and expected to be exchanged for Washington Mutual Common
Stock in the Merger, and the number and description of the Bank United Corp.
Options held by each such Bank United Corp. Insider and expected to be converted
into options to purchase shares of Washington Mutual Common Stock in connection
with the Merger. "Bank United Corp. Insiders" shall mean those officers and
directors of Bank United Corp. who are subject to the reporting requirements of
Section 16(a) of the Exchange Act and who are listed in the Section 16
Information.
46
7.15 Merger. Prior to the Effective Time, Bank United Corp. shall form a
new wholly owned Subsidiary and shall merge such Subsidiary with and into Bank
United Corp., with the surviving corporation being Bank United Corp. In
connection with such merger and prior to the Effective Time, Bank United Corp.
shall cause the CPR Trust to issue the CPR Certificates to Bank United Corp. as
provided in Section 7.12. In such merger, (i) each share of Bank United Corp.
Common Stock shall be converted into the right to receive (A) one share of Bank
United Corp. Common Stock and (B) one CPR Certificate, and each share of stock
of such wholly owned Subsidiary shall be cancelled without consideration and
(ii) each of the Bank United Corp. PIES shall be adjusted in accordance with the
terms thereof to provide for the purchase of shares of Bank United Corp. Common
Stock and associated CPR Certificates reflecting the terms specified in clause
(i) above.
8. CONDITIONS PRECEDENT
8.1 Conditions to Each Party's Obligation to Effect the Merger. The
respective obligations of each party to effect the Merger shall be subject to
the satisfaction at or prior to the Effective Time of the following conditions:
(a) Stockholder Approval. The agreement of merger contained in
this Agreement shall have been approved and adopted by the requisite affirmative
vote of the stockholders of Bank United Corp. entitled to vote thereon.
(b) NYSE Listing. The shares of Washington Mutual Common Stock and
the Washington Mutual PIES which shall be issued to the holders of Bank United
Corp. Capital Stock upon consummation of the Merger shall have been authorized
for listing on the NYSE, subject to official notice of issuance.
(c) Other Approvals. All regulatory approvals required to consummate
the transactions contemplated hereby shall have been obtained and shall remain
in full force and effect and all statutory waiting periods in respect thereof
shall have expired or been terminated (all such approvals and the expiration or
termination of all such waiting periods being referred to herein as the
"Requisite Regulatory Approvals").
(d) S-4 Effectiveness. The S-4 shall have become effective under the
Securities Act, no stop order suspending the effectiveness of the S-4 shall have
been issued and no proceedings for that purpose shall have been initiated or
threatened by the SEC.
(e) CPR Trust Registration Statement Effectiveness; Trust Indenture
Act. The CPR Trust Registration Statement shall have become effective under the
Securities Act, no stop order suspending the effectiveness of the CPR Trust
Registration Statement shall have been issued and no proceedings for that
purpose shall have been initiated or threatened by the SEC (except to the extent
the CPR Certificates can be registered under applicable law, and are registered,
on the S-4). If required by applicable law, the Trust Agreement shall have been
duly qualified under the Trust Indenture Act.
47
(f) No Injunctions or Restraints; Illegality. No order, injunction or
decree issued by any court or agency of competent jurisdiction or other legal
restraint or prohibition (an "Injunction") preventing the consummation of the
Merger or any of the other transactions contemplated by this Agreement shall be
in effect. No statute, rule, regulation, order, injunction or decree shall have
been enacted, entered, promulgated or enforced by any Governmental Entity which
prohibits or makes illegal the consummation of the Merger.
8.2 Conditions to Obligations of Washington Mutual. The obligations
of Washington Mutual to effect the Merger are also subject to the satisfaction
or waiver by Washington Mutual at or prior to the Effective Time of the
following conditions:
(a) Representations and Warranties. The representations and
warranties of Bank United Corp. set forth in this Agreement shall be true and
correct in all respects as of the date of this Agreement and (except to the
extent such representations and warranties speak as of an earlier date) as of
the Closing Date as though made on and as of the Closing Date; provided,
however, that for purposes of determining the satisfaction of this condition, no
effect shall be given to any exception in such representations and warranties
relating to materiality or a Material Adverse Effect, and provided, further,
that, for purposes of this condition, such representations and warranties (other
than the representations and warranties contained in Section 4.2(a), which shall
be true and correct in all material respects) shall be deemed to be true and
correct in all respects unless the failure or failures of such representations
and warranties to be so true and correct, individually or in the aggregate,
results or would reasonably be expected to result in a Material Adverse Effect
on Bank United Corp. Washington Mutual shall have received a certificate signed
on behalf of Bank United Corp. by the Chief Executive Officer and Chief
Financial Officer of Bank United Corp. to the foregoing effect.
(b) Performance of Obligations of Bank United Corp. Bank United
Corp. shall have performed in all material respects all obligations required to
be performed by it under this Agreement at or prior to the Closing Date, and
Washington Mutual shall have received a certificate signed on behalf of Bank
United Corp. by the Chief Executive Officer and the Chief Financial Officer
of Bank United Corp. to such effect.
(c) Burdensome Condition. There shall not be any action taken, or
any statute, rule, regulation or order enacted, entered, enforced or deemed
applicable to the transactions contemplated by this Agreement, by any
Governmental Entity, in connection with the grant of a Requisite Regulatory
Approval or otherwise, which imposes any restriction or condition which would
be reasonably likely to have or result in a Material Adverse Effect on Bank
United Corp., the Surviving Company or Washington Mutual.
(d) Director Resignations. Washington Mutual shall have received
resignations from each director of Bank United Corp. and each of its
Subsidiaries.
(e) CPR Trust. Prior to the Effective Time, Bank United Corp.
shall have established the CPR Trust and shall have caused the issuance of the
CPR Certificates by the CPR Trust to Bank United Corp. and the distribution of
the CPR Certificates to the holders of Bank
48
United Corp. Common Stock pursuant to the merger described in Section 7.15 as
required by Section 7.12.
(f) Commitment. Prior to the Effective Time, Bank United Corp.
shall have executed and delivered a Commitment Agreement substantially in the
form of Exhibit 8.2(f) hereto (the "Commitment").
(g) Merger. Prior to the Effective Time, Bank United Corp. shall
have formed a new wholly owned Subsidiary and shall have merged such Subsidiary
with and into Bank United Corp. as required by Section 7.15.
(h) Dissenting Shares. The aggregate number of Dissenting Shares
shall not constitute more than 10% of all outstanding Bank United Corp. Common
Stock.
(i) Federal Tax Opinion. Washington Mutual shall have received an
opinion of Gibson, Dunn & Crutcher LLP, special counsel to Washington Mutual,
dated the Closing Date, to the effect that, on the basis of facts,
representations, and assumptions set forth in such opinion, (i) the Merger
constitutes a "reorganization" within the meaning of Section 368(a) of the Code
and (ii) Washington Mutual and Bank United Corp. will each be a party to that
reorganization within the meaning of Section 368(b) of the Code. In rendering
its opinion, Gibson, Dunn & Crutcher LLP may require and rely upon written
representations from Bank United Corp., Washington Mutual and stockholders of
Bank United Corp.
8.3 Conditions to Obligations of Bank United Corp. The obligation of
Bank United Corp. to effect the Merger is also subject to the satisfaction or
waiver by Bank United Corp. at or prior to the Effective Time of the
following conditions:
(a) Representations and Warranties. The representations and
warranties of Washington Mutual set forth in this Agreement shall be true and
correct in all respects as of the date of this Agreement and (except to the
extent such representations and warranties speak as of an earlier date) as of
the Closing Date as though made on and as of the Closing Date; provided,
however, that for purposes of determining the satisfaction of this condition, no
effect shall be given to any exception in such representations and warranties
relating to materiality or a Material Adverse Effect, and provided, further,
that, for purposes of this condition, such representations and warranties shall
be deemed to be true and correct in all respects unless the failure or failures
of such representations and warranties to be so true and correct, individually
or in the aggregate, results or would reasonably be expected to result in a
Material Adverse Effect on Washington Mutual. Bank United Corp. shall have
received a certificate signed on behalf of Washington Mutual by the chief
Executive Officer and the Chief Financial Officer of Washington Mutual to the
foregoing effect.
(b) Performance of Obligations of Washington Mutual. Washington
Mutual shall have performed in all material respects all obligations required to
be performed by it under this Agreement at or prior to the Closing Date, and
Bank United Corp. shall have received a certificate signed on behalf of
Washington Mutual by the Chief Executive Officer and the Chief Financial Officer
of Washington Mutual to such effect.
49
(c) Commitment. Washington Mutual shall have executed and delivered
an agreement providing for the assignment by Bank United Corp. and the
assumption by Washington Mutual of the Commitment as of the Effective Time,
which agreement shall be in form and substance satisfactory to Washington Mutual
and Bank United Corp.
(d) Federal Tax Opinion. Bank United Corp. shall have received an
opinion of Wachtell, Lipton, Rosen & Katz, special counsel to Bank United Corp.,
dated the Closing Date, to the effect that, on the basis of facts,
representations and assumptions set forth in such opinion, (i) the Merger
constitutes a"reorganization" within the meaning of Section 368(a) of the Code
and that, accordingly, (A) no gain or loss will be recognized by Bank United
Corp. as a result of the Merger and (B) no gain or loss will be recognized by a
stockholder of Bank United Corp. who receives shares of Washington Mutual Common
Stock in exchange for shares of Bank United Corp. Common Stock, except (x) with
respect to cash received in lieu of any fractional share interest in Washington
Mutual Common Stock and (y) for gain that may be recognized in an amount not
exceeding the fair market value at the Effective Time of such stockholder's CPR
Certificates (which represent such stockholder's share of the Commitment Amount
(as defined in the Commitment)), and (ii) the CPR Trust will not itself be
subject to any material federal income taxes. In rendering its opinion, such
counsel may require and rely upon representations contained in letters from Bank
United Corp., Washington Mutual and stockholders of Bank United Corp. The
foregoing opinion will not apply to stock holders or persons receiving
Washington Mutual Common Stock or CPR Certificates as compensation.
9. TERMINATION AND AMENDMENT
9.1 Termination. This Agreement may be terminated at any time prior to
the Effective Time:
(a) by mutual consent of Washington Mutual and Bank United Corp. in
a written instrument, if the Board of Directors of each so determines;
(b) by either Washington Mutual or Bank United Corp. if (i) any
Governmental Entity which must grant a Requisite Regulatory Approval has denied
approval of the Merger and such denial has become final and nonappealable or
(ii) any Governmental Entity of competent jurisdiction shall have issued a final
nonappealable order enjoining or otherwise prohibiting the consummation of the
transactions contemplated by this Agreement;
(c) by either Washington Mutual or Bank United Corp. if the Effective
Time shall not have occurred on or before March 31, 2001, unless the failure of
the Effective Time to occur by such date shall be due to the failure of the
party seeking to terminate this Agreement to perform or observe the covenants
and agreements of such party set forth herein; provided, however, if the failure
of the Effective Time to occur by March 31, 2001 is solely due to the failure to
satisfy the condition set forth in Section 8.1(c), then the termination right
set forth in this Section 9.1(c) shall not be exercisable until June 30, 2001;
(d) by either Washington Mutual or Bank United Corp. (provided that
the terminating party is not then in material breach of any representation,
warranty, covenant or other
50
agreement contained herein) if the other party shall have breached (i) any of
the covenants or agreements made by such other party herein or (ii) any of the
representations or warranties made by such other party herein, and in either
case, such breach (x) is not cured within 30 days following written notice to
the party committing such breach, or which breach, by its nature, cannot be
cured prior to the Closing and (y) would entitle the non-breaching party not to
consummate the transactions contemplated hereby under Section 8 hereof;
(e) by either Washington Mutual or Bank United Corp. if any
approval of the stockholders of Bank United Corp. contemplated by this Agreement
shall not have been obtained by reason of the failure to obtain the required
vote at a duly held meeting of stockholders or at any adjournment or
postponement thereof;
(f) by the Board of Directors of Washington Mutual, if the Board of
Directors of Bank United Corp. shall have failed to recommend the Merger, or
shall have withdrawn, modified or changed in a manner adverse to Washington
Mutual its approval;
(g) by the Board of Directors of Washington Mutual if a tender offer
or exchange offer for 25% or more of the outstanding shares of Bank United Corp.
Common Stock is commenced (other than by Washington Mutual or a Subsidiary
thereof), and the Board of Directors of Bank United Corp. recommends that the
stockholders of Bank United Corp. tender their shares in such tender or exchange
offer or otherwise fails to recommend that such stockholders reject such tender
offer or exchange offer within 10 Business Days after the commencement thereof
(which, in the case of an exchange offer, shall be the effective date of the
registration statement relating to such exchange offer);
(h) by Washington Mutual if a Subsequent Triggering Event (as
defined in the Stock Option Agreement) has occurred;
(i) by Washington Mutual if a Material Adverse Change (as defined
below) has occurred with respect to Bank United Corp.; or
(j) by Bank United Corp. if a Material Adverse Change has occurred
with respect to Washington Mutual.
As used in this Agreement, the term "Material Adverse Change" means,
with respect to Bank United Corp. or Washington Mutual, as the case may be, a
material adverse change since June 30, 2000, in the business, results of
operations, financial condition or prospects of such party and its Subsidiaries
taken as a whole; provided, however, that in determining whether a Material
Adverse Change has occurred, there shall be excluded any change in the
referenced party the cause of which is (i) any change in banking, savings
association and similar laws, rules or regulations of general applicability or
interpretations thereof by courts or governmental authorities, (ii) any change
in GAAP or regulatory accounting requirements applicable to banks, savings
associations, or their holding companies generally, (iii) announcement of this
Agreement or any action or omission of Bank United Corp. or Washington Mutual or
any Subsidiary of either of them taken in accordance with this Agreement or with
the prior written consent of Washington Mutual or Bank United Corp., as
applicable, in
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contemplation of the transactions contemplated by this Agreement and (iv) any
changes in general economic conditions affecting banks, savings associations, or
their holding companies generally, provided that the effect of such changes
described in this clause (iv) (including, without limitation, changes in the
interest rates) shall not be excluded to the extent of the disproportionate
impact (if any) they have on such person.
9.2 Effect of Termination.
(a) In the event of termination of this Agreement by either
Washington Mutual or Bank United Corp. as provided in Section 9.1, this
Agreement shall forthwith become void and have no effect, and none of Washington
Mutual, Bank United Corp., any of their respective Subsidiaries or any of the
officers or directors of any of them shall have any liability of any nature
whatsoever hereunder, or in connection with the transactions contemplated
hereby, except that (i) Sections 7.2(b), 9.2, and 10.2 shall survive any
termination of this Agreement and (ii) notwithstanding anything to the contrary
contained in this Agreement, neither Washington Mutual nor Bank United Corp.
shall be relieved or released from any liabilities or damages arising out of its
willful breach of any provision of this Agreement.
(b) If this Agreement is terminated (A) by Washington Mutual pursuant
to Section 9.1(f) if the failure to recommend or the withdrawal, modification or
change of recommendation forming the basis for such termination occurs after a
bona fide Takeover Proposal shall have been made known to the Board of Directors
of Bank United Corp. or shall have been publicly disclosed to Bank United
Corp.'s stockholders, or any person or entity shall have made known to the Board
of Directors of Bank United Corp., or otherwise publicly disclosed, a bona fide
intention (whether or not conditional) to make a Takeover Proposal or pursuant
to Section 9.1(g), (B) by Washington Mutual pursuant to Section 9.1(h), or (C)
by Washington Mutual pursuant to Section 9.1(d) if the breach giving rise to
such termination was willful and, at or prior to such willful violation forming
the basis for such termination, a bona fide Takeover Proposal shall have been
made known to the Board of Directors of Bank United Corp. or shall have been
publicly disclosed to Bank United Corp.'s stockholders, or any person or entity
shall have made known to the Board of Directors of Bank United Corp., or
otherwise publicly disclosed, a bona fide intention (whether or not conditional)
to make a Takeover Proposal, and regardless of whether such Takeover Proposal
shall have been rejected by Bank United Corp. or withdrawn prior to the time of
such termination, then in any such case Bank United Corp. shall pay to
Washington Mutual, upon Washington Mutual's written request, a termination fee
of $15 million (the "Initial Termination Fee"). In addition, if (x) within 15
months of any such termination described in the preceding sentence that gave
rise to an obligation to pay the Initial Termination Fee or (y) within 15 months
after this Agreement is terminated by Washington Mutual or Bank United Corp.
pursuant to Section 9.1(e) because of a failure to obtain the required approval
of the stockholders of Bank United Corp. after a bona fide Takeover Proposal for
Bank United Corp. shall have been publicly disclosed, or any person or entity
shall have publicly disclosed a bona fide intention (whether or not conditional)
to make a Takeover Proposal, (1) Bank United Corp. shall have entered into a
definitive agreement with respect to, or consummated a transaction contemplated
in, a Takeover Proposal or (2) a Repurchase Event (as defined in the Option
Agreement) shall have occurred, then (a) in the case
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of clause (x) above, Bank United Corp. shall pay to Washington Mutual, upon
Washington Mutual's written request, an additional termination fee equal to
$37 million (the "Subsequent Termination Fee" and together with the Initial
Termination Fee, the "Termination Fee") or (b) in the case of clause (y) above,
Bank United Corp. shall pay to Washington Mutual, upon Washington Mutual's
written request, the entire Termination Fee equal to $52 million. Washington
Mutual shall not be entitled to either the Initial Termination Fee or the
Subsequent Termination Fee or the Termination Fee if Washington Mutual has
exercised all or any part of the Option.
(c) Any Termination Fee that becomes payable pursuant to
Section 9.2(b) shall be paid by wire transfer of immediately available funds to
an account designated by Washington Mutual within one Business Day following the
receipt by Bank United Corp. of a written request from Washington Mutual for
payment of such Termination Fee. Notwithstanding the foregoing, in no event
shall Bank United Corp. be obligated to pay any such fees to Washington Mutual
if immediately prior to the termination hereof Bank United Corp. was entitled to
terminate this Agreement pursuant to Section 9.1(d).
(d) Bank United Corp. and Washington Mutual agree that the agreements
contained in paragraphs (b) and (c) above are an integral part of the
transactions contemplated by this Agreement, that without such agreements
Washington Mutual would not have entered into this Agreement, and that such
amounts do not constitute a penalty. If Bank United Corp. fails to pay
Washington Mutual the amounts due under paragraph (b) above within the time
periods specified in paragraph (c) above, Bank United Corp. shall pay the costs
and expenses (including reasonable legal fees and expenses) incurred by
Washington Mutual in connection with any action, including the filing of any
lawsuit, taken to collect payment of such amounts, together with interest on the
amount of any such unpaid amounts at the publicly announced prime rate of The
Chase Manhattan Bank from the date such amounts were required to be paid.
9.3 Amendment. Subject to compliance with applicable law, this Agreement
may be amended by the parties hereto, by action taken or authorized by their
respective Boards of Directors, at any time before or after approval of the
matters presented in connection with the Merger by the stockholders of Bank
United Corp.; provided, however, that after any approval of the transactions
contemplated by this Agreement by Bank United Corp.'s stockholders, there may
not be, without further approval of such stockholders, any amendment of this
Agreement which reduces the amount or changes the form of the consideration to
be delivered to the Bank United Corp. stockholders hereunder other than as
contemplated by this Agreement or which negatively impacts the intended tax
treatment of the holders of Bank United Corp. Common Stock. This Agreement may
not be amended except by an instrument in writing signed on behalf of each of
the parties hereto.
9.4 Extension; Waiver. At any time prior to the Effective Time, the
parties hereto may, to the extent legally allowed, (a) extend the time for the
performance of any of the obligations or other acts of the other parties hereto,
(b) waive any inaccuracies in the representations and warranties contained
herein or in any document delivered pursuant hereto and (c) waive compliance
with any of the agreements or conditions contained herein. Any agreement on the
53
part of a party hereto to any such extension or waiver shall be valid only if
set forth in a written instrument signed on behalf of such party, but such
extension or waiver or failure to insist on strict compliance with an
obligation, covenant, agreement or condition shall not operate as a waiver of,
or estoppel with respect to, any subsequent or other failure.
10. GENERAL PROVISIONS
10.1 Nonsurvival of Representations, Warranties and Agreements. None of
the representations, warranties, covenants and agreements in this Agreement or
in any instrument delivered pursuant to this Agreement shall survive the
Effective Time, except for those covenants and agreements contained herein and
therein which by their terms apply in whole or in part after the Effective Time.
10.2 Expenses. Except as provided in Section 9.2 hereof, all costs and
expenses incurred in connection with this Agreement and the transactions
contemplated hereby shall be paid by the party incurring such expense; provided,
however, that notwithstanding anything to the contrary contained in this
Agreement, neither Washington Mutual nor Bank United Corp. shall be relieved or
released from any liabilities or damages arising out of its willful breach of
any provision of this Agreement.
10.3 Notices. All notices and other communications hereunder shall be in
writing and shall be deemed given if delivered personally, telecopied (with
confirmation), mailed by registered or certified mail (return receipt requested)
or delivered by an express courier (with confirmation) to the parties at the
following addresses (or at such other address for a party as shall be specified
by like notice):
(a) if to Washington Mutual, to:
Washington Mutual
1201 Third Avenue, 15th Floor
Seattle, WA 98101
Fax: (206) 461-5739
Attn: James Fitzgerald
and:
Washington Mutual
1201 Third Avenue, 15th Floor
Seattle, WA 98101
Fax: (206) 461-5739
Attn: Fay Chapman
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with a copy to:
Heller Ehrman White & McAuliffe
701 Fifth Avenue, Suite 6100
Seattle, WA 98104
Fax: (206) 447-0849
Attn: Bernard L. Russell
(b) if to Bank United Corp., to:
Bank United Corp.
3200 Southwest Freeway, Suite 2600
Houston, TX 77027
Fax: (713) 543-7744
Attn: Jonathon K. Heffron
with a copy to:
Wachtell, Lipton, Rosen & Katz
51 West 52nd Street
New York, New York 10019
Fax: (212) 403-2000
Attn: Craig M. Wasserman, Esq.
10.4 Interpretation. The words "hereof," "herein" and "hereunder" and
words of similar import when used in this Agreement shall refer to this
Agreement as a whole and not to any particular provision of this Agreement, and
Article and Section references are to this Agreement unless otherwise specified.
Whenever the words "include," "includes" or "including" are used in this
Agreement, they shall be deemed to be followed by the words "without
limitation." The table of contents and headings contained in this Agreement are
for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement. No provision of this Agreement shall be
construed to require Bank United Corp., Washington Mutual or any of their
respective Subsidiaries or affiliates to take any action which would violate or
conflict with any applicable law (whether statutory or common), rule or
regulation.
10.5 Counterparts. This Agreement may be executed in counterparts, all of
which shall be considered one and the same agreement and shall become effective
when counterparts have been signed by each of the parties and delivered to the
other parties, it being understood that all parties need not sign the same
counterpart.
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10.6 Entire Agreement. This Agreement (together with the documents and
the instruments referred to herein) constitutes the entire agreement and
supersedes all prior agreements and understandings, both written and oral, among
the parties with respect to the subject matter hereof, other than the
Confidentiality Agreement(s).
10.7 Governing Law. This Agreement shall be governed and construed in
accordance with the laws of the State of Washington, without regard to any
applicable conflicts of law provisions (except to the extent that mandatory
provisions of federal law or the DGCL are applicable).
10.8 Severability. Any term or provision of this Agreement which is
determined by a court of competent jurisdiction to be invalid or unenforceable
in any jurisdiction shall, as to that jurisdiction, be ineffective to the extent
of such invalidity or unenforceability without rendering invalid or
unenforceable the remaining terms and provisions of this Agreement or affecting
the validity or enforceability of any of the terms or provisions of this
Agreement in any other jurisdiction, and if any provision of this Agreement is
determined to be so broad as to be unenforceable, the provision shall be
interpreted to be only so broad as is enforceable, in all cases so long as
neither the economic nor legal substance of the transactions contemplated hereby
is affected in any manner materially adverse to any party or its stockholders.
Upon any such determination, the parties shall negotiate in good faith in an
effort to agree upon a suitable and equitable substitute provision to effect the
original intent of the parties.
10.9 Publicity. Washington Mutual and Bank United Corp. shall consult
with each other before issuing any press release with respect to the Merger or
this Agreement and shall not issue any such press release or make any such
public statement without the prior consent of the other party, which shall not
be unreasonably withheld; provided, however, that a party may, without the prior
consent of the other party (but after prior consultation, to the extent
practicable in the circumstances) issue such press release or make such public
statement as may upon the advice of outside counsel be required by law or the
rules and regulations of the NYSE (in the case of Washington Mutual) or The
Nasdaq Stock Market (in the case of Bank United Corp.). Without limiting the
reach of the preceding sentence, Washington Mutual and Bank United Corp. shall
cooperate to develop all public announcement materials and (b) make appropriate
management available at presentations related to the transactions contemplated
by this Agreement as reasonably requested by the other party. In addition, Bank
United Corp. and its Subsidiaries shall (a) consult with Washington Mutual
regarding communications with customers, shareholders, prospective investors and
employees related to the transactions contemplated hereby, (b) provide
Washington Mutual with shareholder lists of Bank United Corp. and (c) allow and
facilitate Washington Mutual contact with shareholders of Bank United Corp. and
other prospective investors.
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10.10 Assignment; Third Party Beneficiaries. Neither this Agreement nor
any of the rights, interests or obligations of any party hereunder shall be
assigned by any of the parties hereto (whether by operation of law or otherwise)
without the prior written consent of the other party. Subject to the preceding
sentence, this Agreement will be binding upon, inure to the benefit of and be
enforceable by the parties and their respective successors and permitted
assigns. Except as otherwise specifically provided in Section 7.8 hereof, this
Agreement (including the documents and instruments referred to herein) is not
intended to confer upon any person other than the parties hereto any rights or
remedies hereunder.
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IN WITNESS WHEREOF, Washington Mutual and Bank United Corp. have
caused this Agreement to be executed by their respective officers hereunto duly
authorized as of the date first above written.
WASHINGTON MUTUAL, INC.
By: /s/ JAMES B. FITZGERALD
James Fitzgerald
Senior Vice President
BANK UNITED CORP.
By: /s/ JONATHON K. HEFFRON
Jonathon K. Heffron
Executive Vice President
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