AGREEMENT OF MERGER
THIS AGREEMENT OF MERGER is made and entered into as of this 22nd day
of May, 1998, by and between BYL Bancorp ("BYL"), a California corporation, and
DNB Financial ("DNBF"), a California corporation, with reference to the
following facts:
RECITALS
1. BYL is a California corporation duly organized, validly existing
and in good standing under the laws of the State of California, with authorized
capital of 50,000,000 shares of no par value common stock of which, on the date
hereof, there are 1,569,595 shares issued and outstanding, and 25,000,000 shares
of Preferred Stock, none of which is outstanding ("BYL Stock").
2. DNBF is a California corporation duly organized, validly existing
and in good standing under the laws of the State of California, with authorized
capital of 10,000,000 shares of no par value common stock, of which, on the date
hereof, there are 232,423 shares issued and outstanding ("DNBF Stock").
3. The respective Boards of Directors of BYL and DNBF deem it
desirable and in the best interest of their respective corporations and
stockholders that DNBF be merged (the "Merger") with and into BYL as provided in
this Agreement of Merger pursuant to the laws of the State of California and
that BYL be the surviving corporation ("Surviving Corporation").
4. In connection with the Merger, BYL and DNBF, and their respective
wholly-owned banking subsidiaries, have entered into an Agreement and Plan of
Reorganization, dated as of January 29, 1998, as amended (the "Reorganization
Agreement").
NOW THEREFORE, in consideration of the premises and of the mutual
covenants and agreements herein set forth and for the purpose of prescribing the
terms and conditions of such Merger, the parties hereto agree as follows:
ARTICLE I
THE MERGER
Upon consummation of the Merger at the Effective Time (as defined in
Article IX hereof), DNBF shall be merged with and into BYL which shall thereupon
be the Surviving Corporation, and the separate corporate existence of DNBF shall
cease.
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ARTICLE II
NAME
The name of the Surviving Corporation shall remain "BYL Bancorp."
ARTICLE III
ARTICLES OF INCORPORATION
The Articles of Incorporation of BYL as in effect immediately prior to
the Effective Time shall, at and after the Effective Time, continue to be the
Articles of Incorporation of the Surviving Corporation.
ARTICLE IV
BYLAWS
The Bylaws of BYL as in effect immediately prior to the Effective Time
shall, at and after the Effective Time, continue to be the Bylaws of the
Surviving Corporation.
ARTICLE V
DIRECTORS
The Board of Directors and officers of BYL at the Effective Time shall
serve as the Board of Directors and officers of the Surviving Corporation until
such time as their successors have been elected and qualified as provided for by
the Bylaws of BYL.
ARTICLE VI
RIGHTS AND DUTIES OF SURVIVING CORPORATION
At and after the Effective Time, all rights, privileges, powers and
franchises and property and assets of every kind and description of BYL and DNBF
shall be vested in and be held and enjoyed by the Surviving Corporation, without
further act or deed, and all the estates and interests of every kind of BYL and
DNBF, including all debts due to either of them, shall be as effectively the
property of the Surviving Corporation as they were of BYL and DNBF, and the
title to any real estate vested by deed or otherwise in either BYL or DNBF shall
not revert or be in any way impaired by reason of the Merger; and all rights of
creditors and liens upon any property of BYL and DNBF shall be preserved
unimpaired and all debts, liabilities and duties of BYL and DNBF shall be debts,
liabilities and duties of the Surviving Corporation and may be enforced against
it to the same extent as if said debts, liabilities and duties had been incurred
or contracted by it.
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ARTICLE VII
CONVERSION OF SHARES
In and by virtue of the Merger and at the Effective Time, pursuant to
this Agreement of Merger, the shares of BYL Stock and DNBF Stock outstanding at
the Effective Time shall be converted as follows:
(a) EFFECT ON DNBF STOCK. Each share of DNBF Common Stock issued and
outstanding immediately prior to the Effective Time shall, on and after the
Effective Time, be automatically cancelled and cease to be an issued and
outstanding share of DNBF Stock and shall be converted into the right to
converted into the right to receive 4.1162 shares of common stock of BYL Stock.
No fractional shares of BYL Stock shall be issued in the Merger. BYL will pay
or cause to be paid cash in lieu of fractional shares of BYL Stock in an amount
proportionate to the fair value of a whole share as determined by the board of
directors of BYL which would otherwise be issuable as provided above.
(b) EFFECT ON BYL STOCK. Each share of BYL Stock issued and outstanding
immediately prior to the Effective Time, except for shares as to which
dissenters' rights are perfected pursuant to Section 1300 ET SEQ. of the
California Corporations Code ("Perfected Dissenting Shares") shall for all
purposes be deemed to represent, one share of common stock of the Surviving
Corporation.
ARTICLE VIII
FURTHER ACTION
The parties hereto shall execute and deliver, or cause to be executed
and delivered, all such deeds and other instruments, and will take or cause to
be taken all further or other action as they may deem necessary or desirable, in
order to vest in and confirm to the Surviving Corporation title to and
possession of all of DNBF's and BYL's property, rights, privileges, powers and
franchises hereunder, and otherwise to carry out the intent and purposes of this
Agreement of Merger.
ARTICLE IX
EFFECTIVE TIME
The Merger will become effective upon the filing of a copy of this
Agreement of Merger and all other requisite accompanying certificates in the
office of the Secretary of State of the State of California. The date and time
of such filing with the Secretary of State of the State of California is
referred to herein as the "Effective Time".
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ARTICLE X
SUCCESSORS AND ASSIGNS
This Agreement of Merger shall be binding upon and enforceable by the
parties hereto and their respective successors, assigns and transferees, but
this Agreement of Merger may not be assigned by either party without the
written consent of the other.
ARTICLE XI
GOVERNING LAW
This Agreement of Merger has been executed in the State of California,
and the laws of the State of California shall govern the validity and
interpretation hereof and the performance by the parties hereto.
ARTICLE XII
TERMINATION
This Agreement of Merger may, by the mutual consent and action of the
Boards of Directors of DNBF and BYL, be abandoned at any time before or after
approval thereof by the shareholders of BYL and DNBF, but not later than the
filing of this Agreement of Merger with the Secretary of State of the State of
California.
ARTICLE XIII
SATISFACTION OF OBLIGATIONS AND CONDITIONS
(a) The obligations of DNBF to proceed with the Closing are subject
to the satisfaction at or prior to the Closing of all of the conditions to the
obligations of BYL and Bank of Yorba Linda under the Reorganization Agreement,
any one or more of which, to the extent it is or they are waivable, may be
waived, in whole or in part, by DNBF.
(b) The obligations of BYL to proceed with the Closing are subject to
the satisfaction at or prior to the Closing of all of the conditions to the
obligations of DNBF and De Anza National Bank under the Reorganization
Agreement, any one or more of which, to the extent it is or they are waivable,
may be waived, in whole or in party, by BYL.
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IN WITNESS WHEREOF, DNBF and BYL, pursuant to the approval and
authority duly given by resolution of their respective Board of Directors, have
caused this Agreement of Merger to be signed by their respective officers on the
day and year first above written.
DNB FINANCIAL
By: /s/ Neil F. Hatcher
--------------------------
Neil F. Hatcher, President
By: /s/ John L. West
--------------------------
John L. West, Secretary
BYL BANCORP
By: /s/ H. Rhoads Martin, Jr.
--------------------------
H. Rhoads Martin, Jr.
Chairman of the Board
By: /s/ John F. Myers
--------------------------
John F. Myers, Secretary
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OFFICERS' CERTIFICATE
Neil F. Hatcher and James L. West certify that:
1. They are the President and the Secretary, respectively, of DNB
Financial, a California corporation ("DNBF") organized under the laws of the
State of California.
2. DNBF has one class of Common Stock outstanding, and the total number
of shares of DNBF Common Stock outstanding is 232,423.
3. The principal terms of the Agreement of Merger in the form attached
was duly approved by DNBF by the vote of a number of shares of the Common Stock
which equaled or exceeded the vote required.
4. The percentage vote required of the class of DNBF Common Stock is more
than 50%.
We further declare under penalty of perjury under the laws of the State of
California that the matters set forth in this certificate are true and correct
of our own knowledge.
Dated this 22nd day of May, 1998.
/s/ Neil F. Hatcher
--------------------
Neil F. Hatcher, President
/s/ John L. West
-----------------
John W. West, Secretary
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OFFICERS' CERTIFICATE
H. Rhoads Martin, Jr. and John F. Myers:
1. They are the Chairman of the Board and the Secretary, respectively, of
BYL Bancorp, a California corporation ("BYL") organized under the laws of the
State of California.
2. BYL has only one class of stock outstanding, which is Common Stock,
and the total number of shares of BYL Common Stock outstanding is 1,569,595.
3. The principal terms of the Agreement of Merger in the form attached
was duly approved by BYL by the vote of a number of shares of the Common Stock
which equaled or exceeded the vote required.
4. The percentage vote required of the class of BYL Common Stock is more
than 50%.
We further declare under penalty of perjury under the laws of the State of
California that the matters set forth in this certificate are true and correct
of our own knowledge.
Dated this 22nd day of May, 1998.
/s/ H. Rhoads Martin, Jr.
--------------------------
H. Rhoads Martin, Jr.,
Chairman of the Board
/s/ John F. Myers
------------------
John F. Myers, Secretary
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