Exhibit 10.0 Stock Purchase Agreement & Stockholder Agreement between ARGO
Bancorp, Inc. and Deltec Banking Corporation Limited
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STOCK PURCHASE AGREEMENT
BETWEEN
ARGO BANCORP, INC.
(the "Company")
and
THE DELTEC BANKING CORPORATION LIMITED
(the "Buyer")
Dated as of December 31, 1996
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STOCK PURCHASE AGREEMENT, dated as of December 31, 1996 (hereinafter,
together with the Annexes hereto, referred to as "this Agreement"), between
Argo Bancorp, Inc., a corporation organized under the laws of the State of
Delaware (the "Company"), and The Deltec Banking Corporation Limited, a
banking corporation organized under the laws of the Commonwealth of the
Bahamas (the "Buyer").
W I T N E S S E T H:
WHEREAS, the Office of Thrift Supervision ("OTS") has accepted a
Rebuttal of Control Submission filed by Deltec International S.A., a
Panamanian corporation ("Deltec"), and has signed a Rebuttal Agreement with
Deltec and related parties permitting Deltec to acquire, through the Buyer,
25% of the outstanding voting stock of the Company;
NOW, THEREFORE, in consideration of the premises and the
representations, warranties and agreements contained herein, the Company and
the Buyer hereby agree as follows:
ARTICLE 1
PURCHASE AND SALE
1.1. Purchase and Sale. On the basis of the representations,
warranties and agreements herein contained, but subject to the terms and
conditions set forth herein, the Company agrees to issue and sell to the
Buyer, and the Buyer agrees to purchase from the Company, at a purchase price
of $38.00 per share, an aggregate of 111,563 2/3 shares (the "Shares") of the
Company's original common stock, par value $0.01 per share (the "Common
Stock"), or an aggregate consideration equal to $4,239,419.34.
1.2. Closing. The Company will deliver to the Buyer the certificates
for the Shares, registered in the name of "The Deltec Banking Corporation
Limited" and in such denominations (including fractional shares) as may be
requested by the Buyer, against payment of the purchase price by wire
transfer of New York Clearing House funds to the Company's Account #409278 at
Mid City National Bank of Chicago, ABA #071001737, on December 31, 1996 or
such other date as the Buyer and the Company may agree (the "Closing Date").
The certificates for the Shares and other documents to be delivered by the
company shall be delivered at the offices of Sullivan & Cromwell, 125 Broad
Street, New York, New York 10004, who shall hold the certificates in escrow
for delivery to the Buyer against payment therefor. The Buyer shall have the
right to rescind this Agreement unless an amended Rebuttal Agreement
satisfactory to the Buyer has been executed by the OTS within 60 days after
the execution and delivery of this Agreement or such later date as may be
mutually agreed by the parties hereto.
1.3. Stockholder Agreement. At the Closing, the Company and the Buyer
will enter into the Stockholder Agreement, dated as of the Closing Date, in
substantially the form attached hereto as Annex 1 (the "Stockholder
Agreement").
1.4. Use of Proceeds. The Company will use the proceeds from the sale
of the Shares to maintain regulatory capital at well capitalized levels at a
subsidiary following growth of the subsidiary through its purchase of
mortgage pools prior to year-end 1996.
ARTICLE 2
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to the Buyer, that, except as
specifically disclosed in a letter of the Company delivered to the Buyer
prior to or on the date hereof (the "Disclosure Letter") (and making specific
reference to the Section of this Agreement for which an exception is taken):
2.1. Incorporation, Capitalization, Etc. The Company has been duly
incorporated, is validly existing as a corporation in good standing under the
laws of the State of Delaware and is duly qualified to do business as a
foreign corporation in all jurisdictions where such qualification is
required. The Company has the authority to issue 5,000,000 shares of the par
value $0.01 per share, of which 4,500,000 shares are common stock and 500,000
shares are serial preferred stock. The Company's authorized common stock
consists of 3,020,000 shares designated as original common stock, 340,000
shares designated as Class B common stock, 340,000 shares designated as Class
C common stock and 800,000 shares designated as Class D common stock, of
which 334,691 shares designated as original common stock have been issued and
no shares of Class B common stock, Class C common stock or Class D common
stock have ever been issued or authorized to be issued. No shares of serial
preferred stock have ever been issued or authorized to be issued. All
outstanding shares of Common Stock have been duly authorized and validly
issued and are fully paid and nonassessable, and when issued to the Buyer in
accordance with this Agreement the Shares will be duly authorized, validly
issued, fully paid and nonassessable. The Company does not have any shares of
its capital stock of any class reserved for issuance for any purpose,
including for any outstanding option, warrant, call or commitment, nor does
the Company have any outstanding securities, obligations or agreements
convertible into or exchangeable for, or giving any person any right
(including, without limitation, preemptive rights) to subscribe for or
acquire, any shares of its capital stock, except for stock options to
purchase not more than 202,259 shares of Common Stock pursuant to Company
plans. The Company is a savings and loan holding company duly registered with
the OTS under Section 10 of the Home Owners' Loan Act, as amended.
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2.2 Subsidiaries. The Company owns of record and beneficially all of the
capital stock of Argo Federal Savings Bank, F.S.B. (the "Bank") and On-Line
Financial Services, Inc. ("On-Line") and is the managing member of
Empire/Argo Mortgage LLC ("Empire", and together with the Bank and On-Line,
the "Subsidiaries"). The Company has delivered to the Buyer a true and
complete list of all of its subsidiaries other than the Subsidiaries and of
all other entities (whether corporations, partnerships, trusts, limited
liability companies or other entities) in which the Company owns, directly or
indirectly, 10% or more of the ownership interests. Each of the Subsidiaries
has been duly incorporated, is validly existing as a corporation or limited
liability company, as the case may be, in good standing under the laws of the
jurisdiction of its incorporation and is duly qualified to do business as a
foreign corporation or foreign limited liability company, as the case may be,
in all jurisdictions where such qualification is required. All outstanding
shares of capital stock of the Subsidiaries have been duly authorized and
validity issued and are fully paid and nonassessable and are owned by the
Company free and clear of any lien, pledge, option, security interest, claim,
restriction or other encumbrance. None of the Subsidiaries has any shares of
its capital stock of any class reserved for issuance for any purpose,
including for any outstanding option, warrant, call or commitment, nor does
it have any outstanding securities, obligations or agreements convertible
into or exchangeable for, or giving any person any right (including, without
limitation, preemptive rights) to subscribed for or acquire, any shares of
its capital stock.
2.3. Authorization, Execution, Etc. The execution, delivery and
performance by the Company of this Agreement and the Stockholder Agreement
and the consummation of the transactions contemplated hereby and thereby have
been duly authorized by all required action on the part of the Company and
its stockholders, and each of this Agreement and the Stockholder Agreement
has been duly executed and delivered by the Company and constitutes a valid
and binding obligation of the Company, enforceable against the Company in
accordance with its terms, subject to bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium and other similar laws of general
applicability relating, to or affecting creditors' rights and to general
equity principles. The execution and delivery by the Company of this
Agreement and the Stockholder Agreement and the consummation of the
transactions contemplated hereby and thereby do not and will not conflict
with or result in a breach or violation of or default under any law, rule or
regulation, the certificate of incorporation or by-laws of the Company or the
corresponding documents of any of the Subsidiaries, any judgement, decree,
order, license or permit issued by any governmental or regulatory body, board
or agency, or any agreement, indenture or instrument to which the Company or
any of its Subsidiaries (or any of their respective properties) is a party or
is otherwise subject.
2.4 Reports, Financial Statements, Etc. All reports other documents filed
by the Company with the Securities and Exchange Commission (the "SEC") under
Section 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934, as
amended (the "Securities Exchange Act") (collectively, the "Reports"), are
accurate and complete
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in all material respects and do not contain any untrue statement of a
material fact or omit to state any material fact required to be stated
therein or necessary to make the statements made therein, in the light of the
circumstances under which they were made, not misleading. True and complete
copies of all Reports filed since January 1, 1995 have been furnished by the
Company to the Buyer. The financial statements contained or incorporated by
reference in the Reports fairly present the financial position, results of
operations and changes in financial position to which they relate as at the
dates and for the periods covered thereby (subject, in the case of unaudited
interim statements, to normal year-end audit adjustments) in each case in
accordance with generally accepted accounting principles consistently applied
during the periods involved, except as otherwise stated therein. The Company
and its Subsidiaries have timely filed all required reports, registrations
and statements, together with any amendments thereto, with the SEC, THE OTS,
the Board of Governors of the Federal Reserve System, the Federal Deposit
Insurance Corporation, any state banking commission or other regulatory
authority, the National Association of Securities Dealers, Inc. and any other
self-regulatory organization.
2.5. No Material Adverse Change. Except as otherwise disclosed in the
Reports, since December 31, 1995, there has not been any material adverse
change in the financial condition, results of operations, properties, assets,
liabilities, business or prospects of the Company or any of its Subsidiaries.
2.6. Compliance with Law. To the best of its knowledge, the Company and
each of its Subsidiaries has conducted its operations in compliance with all
applicable laws, rules and regulations, has all material permits, licenses,
authorizations, orders and approvals of, and has made all material filings,
applications and registrations with, all federal, state, local and foreign
governmental or regulatory bodies that are required in order to permit it to
carry on its business as presently conducted, and all such material permits,
licenses, authorizations, orders and approvals are in full force and effect,
except in each case where the failure to do so or to have done so would not
have a material adverse effect on the Company or any of its Subsidiaries.
Neither the Company nor any of its Subsidiaries is a party to any cease and
desist order, written agreement or memorandum of understanding with, or a
party to any commitment letter or similar undertaking to, or is subject to
any order or directive by, or is a recipient of any extraordinary supervisory
letter from, federal or state governmental authorities charged with the
supervision or regulation of depository institutions or depository
institution holding companies or engaged in the insurance of bank and/or
savings and loan deposits, nor has it been advised by any such authorities
that they are contemplating issuing or requesting (or are considering the
appropriateness of issuing or requesting) any such order, directive, written
agreement, memorandum of understanding, extraordinary supervisory letter,
commitment letter or similar undertaking.
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2.7. Tax Matters. To the best of the Company's knowledge, the provisions
made for taxes on the Company's balance sheets are sufficient for the payment
of all accrued federal, state, county and local taxes, whether or not
disputed, and all required tax returns have been timely and properly filed by
the Company and each of its Subsidiaries.
2.8. Litigation. There is no litigation, proceeding or governmental
investigation pending or, so far as known to the Company, in prospect or
threatened before any court, governmental agency or arbitrator against or
relating to or affecting the Company or any of its Subsidiaries, which might
result in a material adverse change in the financial condition, results of
operations, properties, assets, liabilities, business or prospects of the
Company or any of its Subsidiaries.
2.9. Brokers and intermediaries. Except as set forth in the Disclosure
Letter, the Company has not employed any broker, finder, consultant, adviser
or intermediary that would be entitled to a broker's, finder's or similar fee
or commission in connection herewith or upon the consummation hereof.
2.10. Antitakeover Provisions inapplicable. The provisions of Articles
XIII and XIV of the Company's restated certificate of incorporation do not
and will not apply to this Agreement or the Stockholder Agreement or the
transactions contemplated hereby or thereby, in the case of Article XIII,
because the time provision applicable to that article has expired, and in the
case of Article XIV, because the transactions contemplated thereby have
received all of the required approvals stated therein.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF THE BUYER
The buyer represents and warrants to the Company that:
3.1. Incorporation, Etc. The Buyer has been duly incorporated and is
validly existing as a corporation in good standing under the laws of the
Commonwealth of the Bahamas.
3.2. Authorization; Non-Contravention. The execution, delivery and
performance by the Buyer of this Agreement and the Stockholder Agreement and
the consummation of the transactions contemplated hereby and thereby have been
duly authorized by all required action on the part of the Buyer, and each of
this Agreement and the Stockholder Agreement has been duly executed and
delivered by the Buyer and constitutes a valid and binding obligation of the
Buyer, enforceable against the Buyer in accordance with its terms, subject to
bankruptcy, insolvency, fraudulent transfer,
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reorganization, moratorium and similar laws of general applicability relating
to or affecting creditors' rights and to general equity principles. The
execution and delivery by the Buyer of this Agreement and the Stockholder
Agreement and the consummation of the transactions contemplated hereby and
thereby do not and will not conflict with or result in a breach or violation
of or default under any law, rule or regulation, the certificate of
incorporation or bylaws of the Buyer, any judgment, decree, order, license or
permit issued by any government or regulatory body, board or agency, or any
agreement, indenture or instrument to which the Buyer is a party or is
otherwise subject.
3.3. Consents. Except for the filing of a Rebuttal of Control Submission
and entering into a Rebuttal Agreement with the OTS, no consent, license,
approval or authorization is required to be obtained by the Buyer from, and
no notice or filing is required to be given by the Buyer to or be made by
the Buyer with, any governmental or regulatory authority in connection with
the execution and delivery of this Agreement or the Stockholder Agreement and
the consummation of the transactions contemplated hereby or thereby.
3.4. Brokers and Intermediaries. The Buyer has not employed any broker,
finder, consultant, adviser or intermediary that would be entitled to a
broker's, finder's or similar fee or commission in connection herewith or
upon the consummation hereof.
3.5 Acquisition for Investment. The Shares are being acquired by the
Buyer for its own account solely for the purpose of investment without any
view to, or for sale in connection with, any distribution thereof in
violation of federal or state securities laws, and with no present intention
of distributing or reselling any part thereof.
ARTICLE 4
CONDITIONS PRECEDENT OF THE COMPANY
The obligation of the Company to sell the Shares to the Buyer is subject
to the satisfaction (or waiver) of each of the following conditions:
4.1. Representations and Warranties. The representations and warranties
of the Buyer contained in Article 3 shall be true and correct in all respects
as if made at and as of the Closing, and the Buyer shall have performed and
compiled in all respects with all undertakings and agreements required by
this Agreement to be performed or compiled with by the Buyer prior to the
Closing.
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4.2. Compliance with Law. No law, regulation, order or injunction of any
court or governmental authority of competent jurisdiction shall be in effect
which prohibits the consummation of the transactions contemplated hereby.
ARTICLE 5
CONDITIONS PRECEDENT OF THE BUYER
The obligation of the Buyer to purchase the Shares at the Closing is
subject to the satisfaction (or waiver) of each of the following conditions:
5.1. Representations and Warranties. The representations and warranties
of the Company contained in Article 2 shall be true and complete in all
respects as if made at and as of the Closing, and the Company shall have
performed and complied in all respects with all undertakings and agreements
required by this Agreement to be performed or complied with by the Company
prior to the Closing.
5.2. Compliance with Law. No law, regulation, order or injunction of any
court or governmental authority of competent jurisdiction shall be in effect
which prohibits the consummation of the transactions contemplated hereby.
5.3. Legal Opinion. At the Closing, the Buyer shall have received the
opinion of Muldoon, Murphy & Faucette, counsel to the Company, substantially
in the form attached as Annex 2 hereto.
ARTICLE 6
MISCELLANEOUS
6.1. Further Assurances. From time to time after the Closing, the
Company shall execute and deliver, or cause to be executed and delivered,
such documents to the Buyer as the Buyer shall reasonably request in order to
consummate more effectively the transactions contemplated by this Agreement
or the Stockholder Agreement, and from time to time after the Closing, the
Buyer will execute and deliver, or cause to be executed and delivered, such
documents to the Company as the Company shall reasonably request in order to
consummate more effectively the transactions contemplated by this Agreement
or the Stockholder Agreement.
6.2. GOVERNING LAW. ALL QUESTIONS CONCERNING THE CONSTRUCTION, VALIDITY
AND INTERPRETATION OF THIS AGREEMENT SHALL BE GOVERNED BY THE INTERNAL LAW OF
THE STATE OF
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DELAWARE, WITHOUT GIVING EFFECT TO PRINCIPLES OF CONFLICTS OF LAW.
6.3. Notices. All notices, requests, permissions, waivers, and other
communications hereunder shall be in writing and shall be deemed to have been
duly given when received if delivered by hand, facsimile transmission or by
United States mail (registered, return receipt requested), properly addressed
and postage prepaid:
If to the Company, to:
Argo Bancorp, Inc.
7600 West 63rd Street
Summit, Illinois 60501
Attn: Frances Pitts, Esq.
General Counsel
Tel.: 708-496-7178
Fax: 708-496-2946
with a copy to:
Muldoon, Murphy & Faucette
5101 Wisconsin Avenue, N.W.
Washington, D.C. 20016
Attn: Mary M. Sjoquist, Esq.
Tel.: 202-362-0840
Fax: 202-966-9409
If to the Buyer, to:
The Deltec Banking Corporation Limited
Deltec House, P.O. Box N-3229
Lyford Cay, Nassau, Bahamas
Attn: Matthew F. Gibbons, President
Tel.: 242-362-4549
Fax: 242-362-4623
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with a copy to:
Sullivan & Cromwell
125 Broad Street
New York, New York 10004
Attn: Richard R. Howe, Esq.
Tel.: 212 558-3612
Fax : 212 558-3111
Such names and addresses may be changed by such notice.
6.4. ENTIRE AGREEMENT. This Agreement and the Stockholder Agreement
contain the entire understanding of the parties hereto with respect to the
subject matter contained herein, and supersede and cancel all prior
agreements, negotiations, correspondence, undertakings and communications of
the parties, oral or written, regarding such subject matter.
6.5. AMENDMENTS. This Agreement may be amended only by a written
instrument executed by the parties or their respective successors or
permitted assigns.
6.6. HEADINGS; REFERENCES. The article, section and paragraph headings
and table of contents contained in this Agreement are for reference purposes
only and shall not affect in any way the meaning or interpretation of this
Agreement.
6.7. COUNTERPARTS. This Agreement may be executed in one or more
counterparts and each counterpart shall be deemed to be an original.
6.8. PARTIES IN INTEREST; ASSIGNMENT. This Agreement shall inure to the
benefit of and be binding upon the Company and the Buyer and their respective
successors and permitted assigns. Nothing in this Agreement, express or
implied, is intended to confer upon any Person not a party to this Agreement
any rights or remedies under or by reason of this Agreement. No party to this
Agreement may assign or delegate all or any portion of its rights,
obligations or liabilities under this Agreement without the prior written
consent of the other party to this Agreement.
6.9. SEVERABILITY; ENFORCEMENT. Whenever possible, each provision of this
Agreement will be interpreted in such a manner as to be effective and valid
under applicable law, but if any provision of this Agreement is held to be
invalid, illegal or unenforceable under any applicable law or rule in any
jurisdiction, such provision will be ineffective only to the extent of such
invalidity, illegality or unenforceability in such jurisdiction, without
invalidating the remainder of this Agreement in such jurisdiction or any
provision hereof in any other jurisdiction.
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6.10. JURISDICTION. The Buyer and the Company hereby irrevocably and
unconditionally submit to the exclusive jurisdiction of the federal and state
courts located in the State of Delaware, for any actions, suits or
proceedings arising out of or relating to this Agreement and the transactions
contemplated hereby (and the Buyer and the Company agree not to commence any
action, suit or proceeding relating thereto except in such courts), and
further agree that service of any process, summons, notice or document by
U.S. registered mail to its address set forth above shall be effective
service of process of any action, suit or proceeding brought against it in
any such court. The Buyer and the Company hereby irrevocably and
unconditionally waive any objection to the laying of venue of any action,
suit or proceeding arising out of this Agreement or the transactions
contemplated hereby in such courts as aforesaid and hereby further
irrevocably and unconditionally waive and agree not to plead or claim in any
such court that any such action, suit or proceeding brought in any such court
has been brought in an inconvenient forum. The Company and the Buyer waive
any rights they may have to a jury trial.
6.11. WAIVER. Any of the conditions to Closing set forth in this
Agreement may be waived in writing at any time prior to or at the Closing
hereunder by the party entitled to the benefit thereof. The failure of any
party hereto to enforce at any time any of the provisions of this Agreement
shall in no way be construed to be a waiver of any such provision, nor in any
way to affect the validity of this Agreement or any part hereof or the right
of such party thereafter to enforce each and every such provisions. No waiver
of any breach of or non-compliance with this Agreement shall be held to be a
waiver of any other or subsequent breach or non-compliance.
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IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the date first above written.
ARGO BANCORP, INC.
By: /s/ Frances M. Pitts
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Name: Frances M. Pitts
Title: Executive Vice President &
Corporate Secretary
THE DELTEC BANKING CORPORATION LIMITED
By: /s/ Matthew F. Gibbons
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Name: Matthew F. Gibbons
Title: President
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STOCKHOLDER AGREEMENT, dated as of December 31, 1996, among Argo
Bancorp, Inc., a corporation organized under the laws of the State of
Delaware (the "Company"), The Deltec Banking Corporation Limited, a banking
corporation organized under the laws of the Commonwealth of the Bahamas
("Deltec"), and John G. Yedinak, the controlling stockholder of the Company
(the "Controlling Stockholder"), who is signing this Agreement solely for the
purposes of Section 1.1 hereof.
W I T N E S S E T H
WHEREAS, concurrently with the execution and delivery hereof, Deltec has
purchased 111,563 2/3 shares (the "Shares") of original common stock, par
value $0.01 per share (the "Common Stock") of the Company, pursuant to the
Stock Purchase Agreement, dated as of December 31, 1996 (the "Stock Purchase
Agreement"), between the Company and Deltec;
WHEREAS, as of the date hereof, the Company has the authority to issue
5,000,000 shares of the par value $0.01 per share, of which 4,500,000 shares
are common stock and 500,000 shares are serial preferred stock, and the
Company's authorized common stock consists of 3,020,000 shares designated as
original common stock, 340,000 shares designated as Class B common stock,
340,000 shares designated as Class C common stock and 800,000 shares
designated as Class D common stock, of which 446,254 2/3 shares of Common
Stock have been issued (after giving effect to Deltec's purchase of the
Shares) and no shares of Class B common stock, Class C common stock or Class
D common stock have ever been issued or authorized to be issued, and no
shares of serial preferred stock have ever been issued or authorized to be
issued; and
WHEREAS, by entering into this Agreement and the Stock Purchase
Agreement, the Company, Deltec and the Controlling Stockholder understand
that Deltec's acquisition of the Shares is solely for Deltec's own account
for the purpose of investment and for the purpose of owning up to, but not
more than, 25% of the outstanding voting stock of the Company and with no
purchase or effect of controlling or exercising a controlling influence over
the management or policies of the Company;
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants and agreements set forth herein and for other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged,
and in order to induce Deltec to purchase the Shares as contemplated by the
Stock Purchase Agreement, the parties hereto hereby agree as follows:
ARTICLE I
BOARD OF DIRECTORS
1.1 Directors. So long as this Agreement shall continue in effect and
so long as Deltec shall own at least 15% of the outstanding Common Stock of
the Company, Deltec shall have the right to nominate one director to serve on
the Board of Directors of the Company, and so long as Deltec shall remain in
compliance with Section 1.2 of this Agreement, the Controlling Stockholder
shall vote (or cause to be voted) all shares of Common Stock owned by him for
the election as a director of the Company of the nominee designated by Deltec
at any annual or special meeting called for such purpose.
1.2 Rebuttal Agreement. While this Agreement continues in effect,
Deltec shall remain in compliance with the Rebuttal Agreement between Deltec
and the Office of Thrift Supervision.
ARTICLE II
SALE OR PURCHASE OF CAPITAL STOCK
2.1 Issuance of Capital Stock. If the Company shall at any time propose
to issue or sell any additional shares of its Common Stock (the "Additional
Shares"), whether such shares are authorized but previously unissued shares
or are treasury shares, then the Company shall notify Deltec thereof as
promptly as practicable and shall offer to sell to Deltec, concurrently with
the issuance and sale of the Additional Shares, such number of additional
shares of Common Stock (including fractional shares) so that Deltec shall
continue, after giving effect to such sales, to own exactly 25% of the
outstanding shares of Common Stock. In case such sale of Additional Shares is
for cash, the Company's offer to Deltec shall be at a purchase price equal to
the price per share paid for the Additional Shares and shall be upon
substantially the same other terms and conditions, except that in the case of
the exercise of employee stock options, the Company's offer to Deltec shall
be at a price equal to the Market Price (as hereinafter defined) on the date
of sale. In case such sale of Additional Shares is for consideration other
than cash, the Company's offer to Deltec shall be a price equal to the fair
market value per share of such other consideration, as determined by the
Board of Directors of the Company for purposes of the Company's financial
statements. "Market Price" as of any date shall mean the average of the high
and low sale prices of the Company's Common Stock as reported on the NASDAQ
Stock Market (the "Average") for the 30 business days immediately preceding
the date in question, provided that (i) prior to the issuance of stock
pursuant to a public offering (the "Public Offering") expected to occur prior
to June 30, 1997, or such later date as the Company and its underwriters may
determine, the Market Price shall equal 94.7% of the book value of the
Company as set forth on the Company's most recent balance sheet prior to the
date in question, (ii) the Market Price of stock purchased in connection with
the Public
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Offering shall equal the public offering price, (iii) during the 30-day
period following the Public Offering the Market Price will equal the greater
of the public offering price or the Average for the period from the date of
the Public Offering to the date in question, and (iv) the Market Price of
stock purchased in connection with any subsequent public offering shall equal
the public offering price in such subsequent public offering.
2.2 Purchase or Acquisition of Common Stock. If at any time the Company
shall propose to purchase or otherwise acquire any outstanding shares of its
Common Stock, then the Company shall notify Deltec thereof as promptly as
practicable and shall offer to purchase from Deltec, concurrently with such
purchase or other acquisition, such number of shares (including fractional
shares) that, after giving effect thereto, Deltec will own exactly 25% of the
outstanding shares of Common Stock.
2.3 Other Classes of Stock. If at any time the Company shall propose to
issue or sell any shares of Class B common stock, Class C common stock, Class
D common stock or serial preferred stock authorized by its certificate of
incorporation or any other class of common stock hereafter authorized by the
Company, then the Company shall notify Deltec thereof as promptly as
practicable and shall offer to sell to Deltec, concurrently with the issuance
of such shares such number of such shares as will enable Deltec to maintain
ownership of 25% of such other class of stock.
2.4 Registration Rights. The Company hereby grants Deltec the following
rights with respect to registration under the Securities Act of 1933 (the
"Securities Act") of any shares of Common Stock or other equity securities
(hereinafter referred to as the "Registrable Securities") acquired by Deltec
from the Company under the Stock Purchase Agreement or this Agreement. If
Deltec desires to sell any Registrable Securities at any time after the
earlier of the completion of the Public Offering or June 30, 1997, Deltec
shall give the Company at least 30 days' notice thereof, specifying the
approximate number of Registrable Securities Deltec desires to sell and the
intended method of disposition thereof, and if the opinion of Deltec or the
Company such intended method of disposition requires registration under the
Securities Act, the Company will promptly prepare and file a Registration
Statement under the Securities Act covering the Registrable Securities and
will use its best efforts to cause such Registration Statement to become
effective as promptly as practicable. If at any time after the completion of
the Public Offering the Company shall propose to file a Registration
Statement under the Securities Act, the Company shall give Deltec at least 10
days' notice thereof and shall afford Deltec the opportunity to include any
Registrable Securities it proposes to sell in such Registration Statement. In
connection with any such Registration Statement, the Company shall indemnify
and hold harmless Deltec and any underwriter or placement agent of such
Registrable Securities (each an "Underwriter") against any losses, claims,
damages or liabilities, joint or several, or actions in respect thereof
("Claims"), to which Deltec or such Underwriter may become subject, under the
Securities Act or otherwise, insofar as such Claims arise out of or are based
upon any untrue statement or alleged untrue statement of any material fact
contained in the Registration Statement, the related prospectus, any
preliminary prospectus or any
3
amendment or supplement thereto (collectively, "Registration Documents") or
the omission or alleged omission to state in any Registration Document a
material fact required to be stated therein or necessary to make the
statements made therein not misleading, and will reimburse Deltec or any such
Underwriter for any legal or other expenses reasonably incurred in
investigating or defending any such Claim as such expenses are incurred;
provided, that the Company shall not be liable in any such case to the extent
that any such Claim arises out of or is based upon an untrue statement or
alleged untrue statement or omission or alleged omission made in any
Registration Document in reliance upon and in conformity with written
information furnished to the Company by or on behalf of Deltec or any such
Underwriter specifically for use in such Registration Document. In
connection with any such Registration Statement, Deltec shall indemnify and
hold harmless the Company and any Underwriter against any Claims to which the
Company or such Underwriter may become subject, under the Securities Act or
otherwise, insofar as such Claims arise out of or are based upon any untrue
statement or alleged untrue statement of any material fact contained in
written information furnished to the Company by or on behalf of Deltec
specifically for use therein, and will reimburse the Company or any such
Underwriter for any legal or other expenses reasonably incurred in
investigating or defending any such Claim as such expenses are incurred. In
connection with only the first two Registration Statements filed by the
Company pursuant to the second sentence of this Section 2.4 and all
Registration Statements filed by the Company pursuant to the third sentence
of this Section 2.4, the Company shall be responsible for all expenses and
fees incident to the preparation of such Registration Statement, including
all registration and filing fees, the cost of preparing and printing the
Registration Documents and any other documents used in connection with the
offering, purchase, sale and delivery of the Registrable Securities, the
costs and charges of any transfer agent, registrar, custodian or
attorneys-in-fact and the fees and disbursements of counsel for the Company
and the Company's independent public accountants, including the expenses of
any "comfort" letters; provided that Deltec shall be responsible for the
fees and disbursements of its own counsel, if any, and all underwriting
discounts and commissions relating to the sale or disposition of the
Registrable Securities.
ARTICLE III
MISCELLANEOUS
3.1 Amendments, Termination, Transfer, etc. Neither this Agreement nor
any provision hereof may be changed, waived, discharged or terminated orally,
but only by an instrument in writing signed by each of the Company, Deltec,
and the Controlling Stockholder.
3.2 Notices. All notices, requests, permissions, waivers, and other
communications hereunder shall be in writing and shall be deemed to have been
duly given when received if delivered by hand, facsimile transmission or by
United States mail (registered, return receipt requested), properly addressed
and postage prepaid:
4
If to the Company or the Controlling Stockholder, to:
Argo Bancorp, Inc.
7600 West 63rd Street
Summit, Illinois 60501
Attn: Frances Pitts, Esq.
General Counsel
Tel: 708-496-7178
Fax: 708-496-2946
with a copy to:
Muldoon, Murphy & Faucette
5101 Wisconcin Avenue, N.W.
Washington, D.C. 20016
Attn: Mary M. Sjoquist, Esq.
Tel: 202-362-0840
Fax: 202-966-9409
If to Deltec, to:
The Deltec Banking Corporation Limited
Deltec House, P. O. Box N-3229
Lyford Cay, Nassau, Bahamas
Attn: Matthew F. Gibbons, President
Tel: 242-362-4549
Fax: 242-362-4623
with a copy to:
Sullivan & Cromwell
125 Broad Street
New York, New York 10004
Attn: Richard R. Howe, Esq.
Tel: 212-558-3612
Fax: 212-558-3111
Such names and addresses may be changed by such notice.
5
3.3 Binding Effect; Benefit. This Agreement shall inure to the benefit
of and be binding upon the parties hereto and their respective successors,
legal representatives and permitted assigns. Nothing in this Agreement,
expressed or implied, is intended to confer upon any person other than the
parties hereto and their respective successors, legal representatives and
permitted assigns, any rights, obligations or liabilities under or by reason
of this Agreement.
3.4 Assignability. This Agreement shall not be assignable by any party
without the prior written consent of each other party hereto.
3.5 Headings. The headings contained in this Agreement are for
convenience only and shall not affect the meaning or interpretation of this
Agreement.
3.6 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original and all of
which together shall be deemed to be one and the same instrument.
3.7 APPLICABLE LAW. ALL QUESTIONS CONCERNING THE CONSTRUCTION, VALIDITY
AND INTERPRETATION OF THIS AGREEMENT SHALL BE GOVERNED BY THE INTERNAL LAW OF
THE STATE OF DELAWARE, WITHOUT GIVING EFFECT TO PRINCIPLES OF CONFLICTS OF
LAW.
IN WITNESS WHEREOF, the undersigned have hereto set their hands as of the
day and year first above written.
ARGO BANCORP, INC.
By:
-------------------------------------
Name: Frances M. Pitts
Title: Senior Vice President &
Corporate Secretary
THE DELTEC BANKING CORPORATION LIMITED
By:
-------------------------------------
Name: Matthew F. Gibbons
Title: President
----------------------------------------
JOHN G. YEDINAK
6
Annex 2
[Letterhead of Muldoon, Murphy & Faucette]
[December 31, 1996]
The Deltec Banking Corporation Limited
Deltec House, P.O. Box N-3229
Lyford Cay, Nassau, Bahamas
Ladies and Gentlemen:
We have acted as counsel for Argo Bancorp, Inc., a Delaware
corporation (the "Company"), in connection with the Stock Purchase Agreement,
dated as of [December 30, 1996] (the "Stock Purchase Agreement"), between the
Company and The Deltec Banking Corporation Limited, a Bahamas banking
corporation (the "Buyer"), and the Stockholder Agreement among the Company,
the Buyer and John G. Yedinak, dated as of December [31], 1996 (the
"Stockholder Agreement"). Unless otherwise defined herein, capitalized terms
used herein have the respective meanings ascribed to them in the Stock
Purchase Agreement. We have examined the Stock Purchase Agreement and such
corporate records, certificates and other documents, and such questions of
law, as we have considered necessary or appropriate for the purposes of this
opinion. Upon the basis of such examination, it is our opinion that:
1. The Company has been duly incorporated and is validly existing
as a corporation in good standing under the laws of the State of
Delaware. The Company is duly registered as a savings and loan holding
company with the Office of Thrift Supervision under Section 10 of the
Home Owners' Loan Act, as amended. The Company has all requisite power
and authority to enter into the Stock Purchase Agreement and the
Stockholder Agreement and to perform its respective obligations
thereunder.
2. The Company has the authority to issue 5,000,000 shares of the
par value $0.01 per share, of which 4,500,000 shares are common stock and
500,000 shares are serial preferred stock. The Company's authorized
common stock consists of 3,020,000 shares designated as original common
stock (herein, the "Common Stock"), 340,000 shares designated as Class B
common stock, 340,000 shares designated as Class C common stock and
800,000 shares designated as Class D common stock, of which 334,691
shares designated as original common stock have been issued prior to the
date hereof. All outstanding shares of Common Stock have been duly
authorized and validly
The Deltec Banking Corporation Limited 2
issued and are fully paid and nonassessable, and the Shares issued to
the Buyer have been duly authorized and validly issued and are fully
paid and nonassessable.
3. The execution, delivery and performance by the Company of
the Stock Purchase Agreement and the Stockholder Agreement and the
consummation of the transactions completed thereby have been duly
authorized by all required action on the part of the Company and its
stockholders, and each of the Stock Purchase Agreement and the
Stockholder Agreement has been duly executed and delivered by the
Company and constitutes a valid and binding obligation of the Company,
enforceable against the Company in accordance with its terms, subject to
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium
and other similar laws of general applicability relating to or affecting
creditors' rights and to general equity principles. The execution and
delivery by the Company of the Stock Purchase Agreement and the
Stockholder Agreement and the consummation of the transactions
contemplated thereby do not and will not conflict with or result in a
breach or violation of or default under any law, rule or regulation, the
certificate of incorporation or by-laws of the Company, any judgment,
decree, order, license or permit, known to us, issued by any governmental
or regulatory body, board or agency, or any agreement, indenture or
instrument, known to us, to which the Company is a party or is otherwise
subject.
4. The provisions of Articles XIII and XIV of the Company's
restated certificate of incorporation do not and will not apply to the
Stock Purchase Agreement or the Stockholder Agreement or the
transactions contemplated thereby, in the case of Article XIII,
because the time provision applicable to that article has expired, and
in the case of Article XIV, because the transactions contemplated
thereby have received all of the approvals required by that article.
In rendering the foregoing opinion, we have relied as to certain
matters upon information obtained from public officials, officers of the
Company and other sources believed by us to be responsible, and we have
assumed that the signatures on all documents examined by us are genuine,
assumptions which we have not independently verified.
Very truly yours,