AGREEMENT AND PLAN OF MERGER
DATED AS OF APRIL 2, 2008
BY AND BETWEEN
FIRST PLACE FINANCIAL CORP.
AND
OC FINANCIAL, INC.
TABLE OF CONTENTS
PAGE
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ARTICLE I THE MERGER...........................................................1
1.1 THE MERGER.......................................................1
1.2 EFFECTIVE TIME...................................................2
1.3 EFFECTS OF THE MERGER............................................2
1.4 CERTIFICATE OF INCORPORATION AND BYLAWS..........................2
1.5 DIRECTORS AND EXECUTIVE OFFICERS OF THE SURVIVING CORPORATION....2
1.6 TAX CONSEQUENCES.................................................2
1.7 OFFICES..........................................................2
1.8 ADDITIONAL ACTIONS...............................................2
ARTICLE II CONSIDERATION; ELECTION AND EXCHANGE PROCEDURES.....................3
2.1 CONVERSION OF SHARES.............................................3
2.2 EXCHANGE PROCEDURES..............................................4
2.3 RIGHTS AS STOCKHOLDERS; STOCK TRANSFERS..........................5
2.4 NO FRACTIONAL SHARES.............................................5
2.5 ANTI-DILUTION PROVISIONS.........................................5
2.6 WITHHOLDING RIGHTS...............................................5
2.7 DISSENTERS' RIGHTS...............................................6
ARTICLE III REPRESENTATIONS AND WARRANTIES OF SELLER...........................6
3.1 CORPORATE ORGANIZATION...........................................7
3.2 CAPITALIZATION...................................................7
3.3 AUTHORITY; NO VIOLATION..........................................8
3.4 CONSENTS AND APPROVALS..........................................10
3.5 REPORTS.........................................................10
3.6 FINANCIAL STATEMENTS............................................10
3.7 BROKER'S FEES...................................................11
3.8 ABSENCE OF CERTAIN CHANGES OR EVENTS............................11
3.9 LEGAL PROCEEDINGS...............................................12
3.10 TAXES...........................................................12
3.11 EMPLOYEE BENEFIT PLAN MATTERS...................................16
3.12 REGULATORY REPORTS..............................................17
3.13 OC FINANCIAL INFORMATION........................................17
3.14 OWNERSHIP OF FIRST PLACE COMMON STOCK...........................18
3.15 COMPLIANCE WITH APPLICABLE LAW..................................18
3.16 CERTAIN CONTRACTS...............................................18
3.17 AGREEMENTS WITH REGULATORY AGENCIES.............................19
3.18 INVESTMENT SECURITIES...........................................20
3.19 INTELLECTUAL PROPERTY...........................................20
3.20 UNDISCLOSED LIABILITIES.........................................21
3.21 STATE TAKEOVER LAWS.............................................21
3.22 ADMINISTRATION OF FIDUCIARY ACCOUNTS............................21
3.23 ENVIRONMENTAL MATTERS...........................................21
3.24 DERIVATIVE TRANSACTIONS.........................................22
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3.25 OPINION.........................................................22
3.26 ASSISTANCE AGREEMENTS...........................................23
3.27 APPROVALS.......................................................23
3.28 LOAN PORTFOLIO..................................................23
3.29 MORTGAGE BANKING BUSINESS.......................................24
3.30 PROPERTIES......................................................26
3.31 LABOR AND EMPLOYMENT MATTERS....................................26
3.32 TERMINATION BENEFITS............................................27
3.33 DEPOSITS........................................................27
3.34 REQUIRED VOTE; ANTITAKEOVER PROVISIONS INAPPLICABLE.............27
3.35 TRANSACTIONS WITH AFFILIATES....................................27
3.36 INSURANCE.......................................................27
3.37 INDEMNIFICATION.................................................28
3.38 VOTING AGREEMENTS...............................................28
3.39 CRA RATING......................................................28
3.40 DISCLOSURE......................................................28
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF FIRST PLACE......................28
4.1 CORPORATE ORGANIZATION..........................................29
4.2 CAPITALIZATION..................................................29
4.3 AUTHORITY; NO VIOLATION.........................................30
4.4 CONSENTS AND APPROVALS..........................................31
4.5 REPORTS.........................................................32
4.6 FINANCIAL STATEMENTS............................................32
4.7 BROKER'S FEES...................................................33
4.8 ABSENCE OF CERTAIN CHANGES OR EVENTS............................33
4.9 LEGAL PROCEEDINGS...............................................33
4.10 TAXES...........................................................34
4.11 SEC REPORTS.....................................................34
4.12 FIRST PLACE INFORMATION.........................................35
4.13 OWNERSHIP OF OC FINANCIAL COMMON STOCK..........................35
4.14 COMPLIANCE WITH APPLICABLE LAW..................................35
4.15 AGREEMENTS WITH REGULATORY AGENCIES.............................35
4.16 UNDISCLOSED LIABILITIES.........................................36
4.17 LOAN PORTFOLIO..................................................36
4.18 TRANSACTIONS WITH AFFILIATES....................................36
4.19 INSURANCE.......................................................36
4.20 CRA RATING......................................................37
4.21 EMPLOYEE BENEFIT MATTERS........................................37
4.22 DISCLOSURE......................................................38
4.23 REQUIRED VOTE...................................................38
4.24 APPROVALS.......................................................38
ARTICLE V COVENANTS RELATING TO CONDUCT OF BUSINESS...........................38
5.1 FORBEARANCES OF OC FINANCIAL....................................38
5.2 FORBEARANCES OF FIRST PLACE.....................................43
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ARTICLE VI ADDITIONAL AGREEMENTS..............................................44
6.1 REASONABLE BEST EFFORTS.........................................44
6.2 STOCKHOLDER APPROVAL............................................44
6.3 REGISTRATION STATEMENT..........................................44
6.4 REGULATORY FILINGS..............................................45
6.5 PRESS RELEASES..................................................46
6.6 ACCESS; INFORMATION.............................................46
6.7 ACQUISITION PROPOSALS...........................................47
6.8 CERTAIN POLICIES................................................48
6.9 NASDAQ LISTING..................................................48
6.10 INDEMNIFICATION.................................................48
6.11 BENEFIT PLANS...................................................50
6.12 NOTIFICATION OF CERTAIN MATTERS.................................52
6.13 SUBSEQUENT INTERIM AND ANNUAL FINANCIAL STATEMENTS..............52
6.14 BOARD AND LOAN COMMITTEE VISITATION RIGHTS......................52
6.15 CURRENT INFORMATION.............................................53
6.16 EXECUTION AND AUTHORIZATION OF BANK MERGER AGREEMENT............53
ARTICLE VII CONDITIONS PRECEDENT..............................................54
7.1 CONDITIONS TO EACH PARTY'S OBLIGATION TO EFFECT THE MERGER......54
7.2 CONDITIONS TO OBLIGATIONS OF FIRST PLACE........................55
7.3 CONDITIONS TO OBLIGATIONS OF OC FINANCIAL.......................57
ARTICLE VIII TERMINATION AND AMENDMENT........................................58
8.1 TERMINATION.....................................................58
8.2 EFFECT OF TERMINATION...........................................60
8.3 EXTENSION; WAIVER...............................................61
ARTICLE IX GENERAL PROVISIONS.................................................61
9.1 CLOSING.........................................................61
9.2 ALTERNATIVE STRUCTURE...........................................62
9.3 NONSURVIVAL OF REPRESENTATIONS, WARRANTIES AND AGREEMENTS.......62
9.4 EXPENSES........................................................62
9.5 NOTICES.........................................................62
9.6 INTERPRETATION..................................................63
9.7 ENTIRE AGREEMENT................................................63
9.8 GOVERNING LAW...................................................63
9.9 ENFORCEMENT OF THE AGREEMENT....................................64
9.10 SEVERABILITY....................................................64
9.11 AMENDMENT.......................................................64
9.12 ASSIGNMENT......................................................64
9.13 COUNTERPARTS....................................................64
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AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER, dated as of April 2, 2008
("Agreement"), is by and between First Place Financial Corp., a Delaware
corporation ("First Place"), and OC Financial, Inc., a Maryland corporation ("OC
Financial") (First Place and OC Financial are sometimes collectively referred to
herein as the "Parties").
WHEREAS, the boards of directors of First Place and OC Financial: (i) have
determined that it is in the best interests of their respective companies and
their stockholders to consummate the Merger (as defined in Section 1.1 hereof)
and the Subsidiary Merger (as defined below) and (ii) have determined that this
Agreement and the transactions contemplated hereby are consistent with, and in
furtherance of, its respective business strategies; and (iii) have approved, at
meetings of each such board of directors, this Agreement; and
WHEREAS, following the execution and delivery of this Agreement, First
Place Bank (the "Bank"), a federal savings association and a wholly owned
subsidiary of First Place and Ohio Central Savings ("OC Bank"), a federal
savings association and a wholly owned subsidiary of OC Financial, will enter
into a Plan of Merger (the "Bank Merger Agreement"), a form of which is attached
hereto as ANNEX A, that provides for the merger of the Bank after the Effective
Time (as defined in Section 1.2 hereof), with OC Bank as the surviving
institution ("Subsidiary Merger"); and
WHEREAS, the directors and executive officers of OC Financial have on the
date hereof entered into Voting Agreements with First Place, in the form
attached hereto as ANNEX B, agreeing to vote for the Merger; and
WHEREAS, the Parties desire to make certain representations, warranties
and agreements in connection with the Merger and also to prescribe certain
conditions to the Merger.
NOW, 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:
ARTICLE I
THE MERGER
1.1 THE MERGER. Subject to the terms and conditions of this Agreement,
in accordance with the Delaware General Corporation Law (the "DGCL") and the
Maryland General Corporation Law (the "MGCL"), at the Effective Time (as defined
in Section 1.2 hereof), OC Financial shall merge with and into First Place (the
"Merger"), with First Place as the surviving corporation (hereinafter sometimes
called the "Surviving Corporation") in the Merger. Upon completion of the
Merger, First Place will continue its corporate existence under the laws of the
State of Delaware. The name of the Surviving Corporation shall be "First Place
Financial Corp." Upon consummation of the Merger, the separate corporate
existence of OC Financial shall terminate.
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1.2 EFFECTIVE TIME. The Merger shall become effective as set forth in
the certificate of merger ("Certificate of Merger") which shall be filed with
the Secretary of State of Delaware and the articles of merger ("Articles of
Merger") which shall be filed with the Maryland State Department of Assessments
and Taxation (the "SDAT") on the Closing Date (as defined in Section 9.1
hereof). The term "Effective Time" shall be the date and time when the Merger
becomes effective, as set forth in the Certificate of Merger and Articles of
Merger. The Effective Time shall be on a date that is no later than the Closing
Date.
1.3 EFFECTS OF THE MERGER. At and after the Effective Time, the Merger
shall have the effects set forth in the DGCL, including Sections 259 and 261,
and in the MGCL.
1.4 CERTIFICATE OF INCORPORATION AND BYLAWS. At the Effective Time, the
Certificate of Incorporation and Bylaws of First Place, as in effect immediately
prior to the Effective Time, shall be the Certificate of Incorporation and
Bylaws of the Surviving Corporation until thereafter changed or amended as
provided therein or by applicable law.
1.5 DIRECTORS AND EXECUTIVE OFFICERS OF THE SURVIVING CORPORATION. The
directors of First Place prior to the Effective Time shall be the directors of
First Place immediately after the Effective Time. The executive officers of
First Place prior to the Effective Time shall be the executive officers of First
Place immediately after the Effective Time.
1.6 TAX CONSEQUENCES. It is intended that the Merger constitute a
reorganization within the meaning of Section 368(a) of the Internal Revenue Code
of 1986, as amended (the "Code"), and that this Agreement shall constitute a
"plan of reorganization" for the purposes of Section 368 of the Code.
1.7 OFFICES. After the Effective Time, the headquarters of the Surviving
Corporation shall be at 185 East Market Street, Warren, Ohio 44481.
1.8 ADDITIONAL ACTIONS. If, at any time after the Effective Time, First
Place shall consider that any further assignments or assurances in law or any
other acts are necessary or desirable to (i) vest, perfect or confirm, of record
or otherwise, in First Place its right, title or interest in, to or under any of
the rights, properties or assets of OC Financial acquired or to be acquired by
First Place as a result of, or in connection with, the Merger, or (ii) otherwise
carry out the purposes of this Agreement, OC Financial, and its proper officers
and directors, shall be deemed to have granted to First Place an irrevocable
power of attorney to execute and deliver all such proper deeds, assignments and
assurances in law and to do all acts necessary or proper to vest, perfect or
confirm title to and possession of such rights, properties or assets in First
Place, consummate the Merger or otherwise to carry out the purposes of this
Agreement, and the proper officers and directors of First Place are fully
authorized in the name of First Place or otherwise to take any and all such
action.
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ARTICLE II
CONSIDERATION; ELECTION AND EXCHANGE PROCEDURES
2.1 CONVERSION OF SHARES. At the Effective Time, by virtue of the Merger
and without any action on the part of a holder of shares of OC Financial common
stock, $0.01 par value per share ("OC Financial Common Stock"):
(a) OC FINANCIAL COMMON STOCK. Subject to Sections 2.1(b), 2.2,
2.4, 2.5, 2.6 and 2.7, each share of OC Financial Common Stock issued and
outstanding immediately prior to the Effective Time (EXCLUDING: (i) those shares
of OC Financial Common Stock held by a Dissenting Stockholder (defined in
Section 2.7) asserting their Dissenters' Rights as set forth in Section 2.7;
(ii) OC Financial Common Stock held as treasury shares; and (iii) all shares of
OC Financial Common Stock that are owned directly or indirectly by First Place
or OC Financial or any of their respective Subsidiaries (other than Trust
Account Shares (defined in Section 2.1(b)) (collectively, the "Excluded
Shares")) shall be converted into, and shall be canceled in exchange for .9615
shares (the "Per Share Stock Consideration") of First Place common stock, par
value $0.01 per share ("First Place Common Stock").
The aggregate consideration ("Aggregate Merger Consideration") to the
holders of OC Financial Common Stock will be comprised of all the issued and
outstanding shares of OC Financial Common Stock converting into the right to
receive the Per Share Stock Consideration ("Stock Consideration"). In addition,
the Aggregate Merger Consideration may be adjusted in accordance with Section
3.11(c).
(b) At the Effective Time, all shares of OC Financial Common Stock
that are owned by OC Financial as treasury stock and all shares of OC Financial
Common Stock that are owned directly or indirectly by First Place or OC
Financial or any of their respective Subsidiaries (other than shares of OC
Financial Common Stock held directly or indirectly in trust accounts, managed
accounts and the like or otherwise held in a fiduciary capacity that are
beneficially owned by third parties, whether held directly or indirectly by
First Place or OC Financial, as the case may be, being referred to herein as
"Trust Account Shares") shall be cancelled and shall cease to exist and no stock
of First Place or other consideration shall be delivered in exchange therefore.
All shares of First Place Common Stock that are owned by OC Financial or any of
its Subsidiaries (other than Trust Account Shares), if any, shall become
treasury stock of First Place.
(c) ADJUSTMENT BASED UPON OC FINANCIAL'S STOCKHOLDERS' EQUITY. If
as of the calendar month ending immediately before the Effective Time (providing
such Effective Time is after the 15th day of the month and if not the case, the
previous calendar month) the OC Financial stockholders' equity (as calculated in
Section 7.2(c)) is less than $5,700,000 (but not less than $5,200,000) the Per
Share Stock Consideration ratio of .9615 shall be adjusted by 1.2 times the
percentage by which the stockholders' equity is less than $5,700,000 (but not
less than $5,200,000). For example, if stockholders' equity is 1% less than
$5,700,000, the Per Share Stock Consideration ratio would be .9500, which ratio
is calculated by subtracting an amount equal to 1.2% of .9615 from .9615.
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2.2 EXCHANGE PROCEDURES.
(a) MAILING OF TRANSMITTAL MATERIAL. Provided that OC Financial
has delivered, or caused to be delivered, to the Exchange Agent all information
which is necessary for the Exchange Agent to perform its obligations as
specified herein, First Place shall instruct the Exchange Agent to, no later
than 15 business days after the Closing Date, mail or make available to each
holder of record as of the Effective Time of a stock certificate or certificates
representing shares of OC Financial Common Stock ("Certificate"): a notice and
letter of transmittal (which shall specify that delivery shall be effected, and
risk of loss and title to the Certificates shall pass, only upon proper delivery
of the Certificates to the Exchange Agent) advising such holder of the
effectiveness of the Merger and the procedure for surrendering to the Exchange
Agent such Certificate or Certificates in exchange for the consideration set
forth in Section 2.1(a) hereof deliverable in respect thereof pursuant to this
Agreement. A letter of transmittal will be properly completed only if
accompanied by Certificates representing all shares of OC Financial Common Stock
covered thereby, subject to the provisions of paragraph (d) of this Section 2.2
hereof.
(b) FIRST PLACE DELIVERIES. Prior to the Effective Time, for the
benefit of the holders of Certificates, First Place shall deliver to the
Exchange Agent certificates evidencing the number of shares of First Place
Common Stock issuable. The Exchange Agent shall not be entitled to vote or
exercise any rights of ownership with respect to the shares of First Place
Common Stock held by it from time to time hereunder, except that it shall
receive and hold all dividends or other distributions paid or distributed with
respect to such shares for the account of the persons entitled thereto.
(c) EXCHANGE AGENT DELIVERIES. Each holder of an outstanding
Certificate or Certificates who has surrendered such Certificate or Certificates
to the Exchange Agent will, upon acceptance thereof by the Exchange Agent, be
entitled to a certificate or certificates representing the number of whole
shares of First Place Common Stock (and including, payment for fractional shares
under Section 2.4 hereof) and, if such holder's shares of OC Financial Common
Stock have been converted into First Place Common Stock, any other distribution
theretofore paid with respect to First Place Common Stock issuable in the
Merger, in each case without interest. The Exchange Agent shall accept such
Certificates upon compliance with such reasonable terms and conditions as the
Exchange Agent may impose to effect an orderly exchange thereof in accordance
with normal exchange practices. Each outstanding Certificate which prior to the
Effective Time represented OC Financial Common Stock and which is not
surrendered to the Exchange Agent in accordance with the procedures provided for
herein shall, except as otherwise herein provided, until duly surrendered to the
Exchange Agent be deemed to evidence ownership of the number of shares of First
Place Common Stock into which such OC Financial Common Stock shall have been
converted. After the Effective Time, there shall be no further transfer on the
records of OC Financial of Certificates representing shares of OC Financial
Common Stock and if such Certificates are presented to OC Financial for
transfer, they shall be cancelled against delivery of certificates for First
Place Common Stock or cash as hereinabove provided in this Section. No dividends
which have been declared will be remitted to any person entitled to receive
shares of First Place Common Stock until such person surrenders the Certificate
or Certificates representing OC Financial Common Stock, at which time such
dividends shall be remitted to such person, without interest.
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(d) LOST OR DESTROYED CERTIFICATES; ISSUANCES OF FIRST PLACE
COMMON STOCK IN NEW NAMES. The Exchange Agent and First Place, as the case may
be, shall not be obligated to deliver cash and/or a certificate or certificates
representing shares of First Place Common Stock to which a holder of OC
Financial Common Stock would otherwise be entitled as a result of the Merger
until such holder surrenders the Certificate or Certificates representing the
shares of OC Financial Common Stock for exchange as provided in this Section 2.2
hereof, or, in default thereof, an appropriate affidavit of loss and indemnity
agreement and/or a bond in an amount as may be reasonably required in each case
by First Place. If any certificates evidencing shares of First Place Common
Stock are to be issued in a name other than that in which the Certificate
evidencing OC Financial Common Stock surrendered in exchange therefore is
registered, it shall be a condition of the issuance thereof that the Certificate
so surrendered shall be properly endorsed or accompanied by an executed form of
assignment separate from the Certificate and otherwise in proper form for
transfer and that the person requesting such exchange pay to the Exchange Agent
any transfer or other tax required by reason of the issuance of a certificate
for shares of First Place Common Stock in any name other than that of the
registered holder of the Certificate surrendered or otherwise establish to the
satisfaction of the Exchange Agent that such tax has been paid or is not
payable.
2.3 RIGHTS AS STOCKHOLDERS; STOCK TRANSFERS. At the Effective Time,
holders of OC Financial Common Stock shall cease to be, and shall have no rights
as, stockholders of OC Financial other than to receive the consideration
provided under this Article II hereof. After the Effective Time, there shall be
no transfers on the stock transfer books of OC Financial or the Surviving
Corporation of shares of OC Financial Common Stock.
2.4 NO FRACTIONAL SHARES. Notwithstanding any other provision of this
Agreement, neither certificates nor scrip for fractional shares of First Place
Common Stock shall be issued in the Merger. Each holder of OC Financial Common
Stock who otherwise would have been entitled to a fraction of a share of First
Place Common Stock (after taking into account all Certificates delivered by such
holder) shall receive in lieu thereof cash (without interest) in an amount
determined by multiplying the fractional share interest to which such holder
would otherwise be entitled by $13.00, rounded to the nearest whole cent. No
such holder shall be entitled to dividends, voting rights or any other rights in
respect of any fractional share.
2.5 ANTI-DILUTION PROVISIONS. If, between the date hereof and the
Effective Time, the shares of First Place Common Stock shall be changed into a
different number or class of shares by reason of any reclassification,
recapitalization, split-up, combination, exchange of shares or readjustment, or
a stock dividend thereon shall be declared with a record date within said period
(a "Capital Change"), the Per Share Stock Consideration shall be adjusted
accordingly.
2.6 WITHHOLDING RIGHTS. First Place (through the Exchange Agent, if
applicable) shall be entitled to deduct and withhold from any amounts otherwise
payable pursuant to this Agreement to any holder of shares of OC Financial
Common Stock such amounts as First Place is required under the Code or any
state, local or foreign tax law or regulation thereunder to deduct and withhold
with respect to the making of such payment. Any amounts so withheld shall be
treated for all purposes of this Agreement as having been paid to the holder of
OC Financial Common Stock in respect of which such deduction and withholding was
made by First Place.
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2.7 DISSENTERS' RIGHTS. (a) Each share of OC Financial Common Stock that
is held by a stockholder ("Dissenting Stockholder") who properly exercises and
perfects the right to demand and receive payment of the fair value for such
share of OC Financial Common Stock (a "Dissenting Share") in accordance with
Title 3, Subtitle 2 of the MGCL ("Dissenters Rights") shall not be converted
into or exchanged for a right to receive any part of the Aggregate Merger
Consideration pursuant to this Agreement, but instead shall be deemed converted
as of the Effective Time into the right to receive such amount as shall be
determined to be payable pursuant to Dissenters Rights in accordance with the
applicable provisions of the MGCL, without interest (the "Dissenter Payment").
Any Dissenter Payment for each Dissenting Share shall be paid by the Surviving
Corporation in accordance with the applicable provisions of the MGCL. In the
case of any Dissenting Shares held by a shareholder who effectively withdraws
his/her exercise of Dissenters Rights in accordance with the applicable
provisions of the MGCL or who fails to file a petition for appraisal within
fifty (50) days after the Effective Time, such shares shall no longer be deemed
Dissenting Shares but shall be deemed to have been converted as of the Effective
Time into the right to receive their portion of the Aggregate Merger
Consideration in accordance with the provisions of this Article II, and the
provisions of this Section 2.7 shall not apply to such shares or such
stockholder.
(b) OC Financial shall (i) give First Place prompt written notice
of the receipt of any notice from a stockholder purporting to exercise any
Dissenters' Rights or that OC Financial has reason to believe may assert
Dissenters' Rights, (ii) not settle or offer to settle any demand for payment
without the prior written consent of First Place, which shall not be
unreasonably withheld; and (iii) not waive any failure to comply strictly with
any procedural requirements of Title 3, Subtitle 2 of the MGCL.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF SELLER
Prior to the date hereof, OC Financial has delivered to First Place a
schedule setting forth, among other things, items the disclosure of which is
necessary or appropriate either in response to an express disclosure requirement
contained in a provision of this Agreement or as an exception to one or more
representations or warranties contained in Article III hereof or to one or more
of its covenants contained in Article V hereof or additional agreements in
Article VI hereof ("OC Financial Disclosure Schedules"). OC Financial hereby
represents and warrants to First Place that each of the following
representations and warranties in this Article III of this Agreement, which
include and incorporate the exceptions set forth on the OC Financial Disclosure
Schedules, are true and correct as of the date of this Agreement and as of the
Closing Date, except to the extent such representations and warranties expressly
are made as of specific date and time (in which case such representations and
warranties will be true and correct as of such date and time):
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3.1 CORPORATE ORGANIZATION.
(a) OC Financial is a corporation duly organized, validly existing
and in good standing under the laws of the State of Maryland. OC Financial 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 the 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 a Material Adverse Effect (as defined in Section 8.1(e) hereof). OC
Financial is duly registered as a savings and loan holding company under the
Home Owners' Loan Act ("HOLA"). The Articles of Incorporation and Bylaws of OC
Financial, copies of which have previously been delivered to First Place, are
true, complete and correct copies of such documents as in effect as of the date
of this Agreement. As used in this Agreement, the word "Subsidiary" when used
with respect to any party means any corporation, partnership, association,
organization, trust or other organization, whether incorporated or
unincorporated, which is consolidated with such party for financial reporting
purposes.
(b) OC Bank is a federal savings association that is duly
organized and validly existing under the laws of the United States of America
and the rules and regulations of the U.S. Office of Thrift Supervision ("OTS").
OC Bank has in effect all federal, state, local and foreign governmental
authorizations necessary for it to own or lease its properties and assets and to
carry on its business as now conducted. The deposit accounts of OC Bank are
insured by the Federal Deposit Insurance Corporation (the "FDIC") through the
Deposit Insurance Fund ("DIF") in the manner and to the maximum extent permitted
by law, and all premiums and assessments required to be paid in connection
therewith have been paid when due by OC Bank. Each of OC Financial's
Subsidiaries is duly organized, validly existing and in good standing under the
laws of its jurisdiction of incorporation or organization. Each of OC
Financial's Subsidiaries 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 the
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 a Material Adverse Effect. The Charter, Bylaws and
similar governing documents of each Subsidiary of OC Financial, copies of which
have previously been delivered to First Place, are true, complete and correct
copies of such documents as in effect as of the date of this Agreement.
(c) The minute books of OC Financial and each of its Subsidiaries
contain true, complete and accurate records in all material respects of all
meetings and other corporate actions held or taken since April 1, 2005 of its
respective stockholders and boards of directors (including committees of their
respective boards of directors). OC Financial has made available to First Place
correct and complete copies of all minutes of the board of directors of OC
Financial and its Subsidiaries since April 1, 2005, except for such minutes that
reflect deliberation of the transactions contemplated by this Agreement.
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3.2 CAPITALIZATION.
(a) The authorized capital stock of OC Financial consists of
20,000,000 shares of OC Financial Common Stock and 5,000,000 shares of OC
Financial preferred stock, par value $0.01 per share ("OC Financial Preferred
Stock"). No other capital stock is authorized. As of the date of this Agreement,
there are (x) 560,198 shares of OC Financial Common Stock issued and outstanding
and no shares of OC Financial Common Stock held in OC Financial's treasury; (y)
no shares of OC Financial Preferred Stock are issued or outstanding; and (z) no
shares of OC Financial Common Stock are reserved for issuance upon exercise of
outstanding stock options. All of the issued and outstanding shares of OC
Financial Common Stock have been duly authorized and validly issued and are
fully paid, nonassessable and free of preemptive rights. Except as referred to
above, OC Financial does not have and is not bound by any outstanding
subscriptions, options, warrants, calls, commitments, contracts or agreements of
any character that could require OC Financial to issue, sell or otherwise cause
to become outstanding any shares of OC Financial Common Stock or OC Financial
Preferred Stock or any other equity security of OC Financial or any securities
representing the right to purchase or otherwise receive any shares of OC
Financial Common Stock or any other equity security of OC Financial. There are
no outstanding or authorized stock appreciation, phantom stock, profit
participation or similar rights with respect to OC Financial.
(b) SCHEDULE 3.2(B) of the OC Financial Disclosure Schedules sets
forth a true and correct list of all of the Subsidiaries of OC Financial and OC
Bank as of the date of this Agreement, including the number of shares of capital
stock of each Subsidiary issued and the holder(s) of such shares. OC Financial
and OC Bank each own, directly or indirectly, all of the issued and outstanding
shares of the capital stock of each of their respective such Subsidiaries, free
and clear of all liens, charges, encumbrances, pledges or security interests
whatsoever, and all of such shares of capital stock are duly authorized and
validly issued and are fully paid, nonassessable and free of preemptive rights.
No Subsidiary of OC Financial or OC Bank has or is bound by any outstanding
subscriptions, options, warrants, calls, commitments or agreements of any
character calling for the purchase or issuance of any shares of capital stock or
any other equity security of such Subsidiary or any securities representing the
right to purchase or otherwise receive any shares of capital stock or any other
equity security of such Subsidiary.
3.3 AUTHORITY; NO VIOLATION.
(a) OC Financial has full corporate power and authority to
execute, deliver and perform its obligations under this Agreement and to
consummate the transactions contemplated hereby. The execution and delivery of
this Agreement and the consummation of the Merger and the transactions
contemplated hereby have been duly and validly approved by the board of
directors of OC Financial. The board of directors of OC Financial has directed
that this Agreement be submitted to OC Financial's stockholders for adoption at
a meeting of such stockholders and, except for the adoption of this Agreement by
the requisite vote of OC Financial's stockholders, no other corporate
proceedings (except for regulatory approvals) on the part of OC Financial are
necessary to approve this Agreement and to consummate the transactions
contemplated hereby. This Agreement has been duly and validly executed and
delivered by OC Financial and (assuming due authorization, execution and
delivery by First Place) constitutes a valid and binding obligation of OC
Financial, enforceable against OC Financial 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,
reorganization, moratorium, fraudulent transfer and similar laws affecting
creditors' rights and remedies generally.
8
(b) OC Bank has full corporate power and authority to execute,
deliver and perform its obligations under the Bank Merger Agreement and to
consummate the Subsidiary Merger and the transactions contemplated thereby. The
execution and delivery of the Bank Merger Agreement and the consummation of the
transactions contemplated thereby will be duly and validly approved by the board
of directors of OC Bank and approved by the sole stockholder of OC Bank. No
other corporate proceedings on the part of OC Bank will be necessary to
consummate the transactions contemplated by the Bank Merger Agreement. The Bank
Merger Agreement has been duly and validly executed and delivered by OC Bank and
(assuming due authorization, execution and delivery by the Bank) constitutes a
valid and binding obligation of OC Bank, enforceable against OC Bank 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, reorganization, receivership, conservatorship,
moratorium, fraudulent transfer and similar laws affecting creditors' rights and
remedies generally.
(c) Except as set forth on SCHEDULE 3.3(C) of the OC Financial
Disclosure Schedules, neither the execution and delivery of this Agreement by OC
Financial or the Bank Merger Agreement by OC Bank, nor the consummation by OC
Financial or OC Bank, as the case may be, of the transactions contemplated
hereby or thereby, nor compliance by OC Financial or OC Bank, as the case may
be, with any of the terms or provisions hereof or thereof, will (i) violate any
provision of the Articles of Incorporation or Bylaws of OC Financial or the
Charter, bylaws or similar governing documents of any of its Subsidiaries
(subject to the deletion of Section 10, "Certain Provisions Applicable for Five
Years" contained in the Charter; OC Financial shall take all necessary action to
remove and delete such section as soon as practicable from the date hereof,
including, but not limited to, obtaining all requisite regulatory approvals that
may be required in respect of said removal and deletion), or (ii) assuming that
the consents and approvals referred to in Section 3.4 hereof are duly obtained,
(x) violate any statute, code, ordinance, rule, regulation, judgment, order,
writ, decree or injunction applicable to OC Financial 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,
result in the obligation to sell or result in the creation of any lien, pledge,
security interest, charge or other encumbrance upon any of the respective
properties or assets of OC Financial 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
OC Financial 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 for any
violation, conflict, breach, default, acceleration, termination, modification or
cancellation which, individually or in the aggregate, would not have a Material
Adverse Effect on OC Financial or materially impact the terms and conditions or
transactions contemplated hereby. First Place shall be approved as a successor
lessee to any lease agreements.
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3.4 CONSENTS AND APPROVALS. Except for (a) the filing of applications
with the OTS, and approval or non-objection of such applications by the OTS, (b)
the filing with the SEC of the S-4 (defined in Section 3.13), which includes the
OC Financial proxy statement/prospectus in definitive form relating to the OC
Financial Stockholder Meeting to be held in connection with this Agreement and
the Merger (the "Proxy Statement"), (c) the adoption of this Agreement by the
requisite vote of the stockholders of OC Financial, (d) the filing of the
Articles of Merger with the SDAT and the Certificate of Merger with the Delaware
Secretary of State, and (e) such filings, authorizations or approvals as may be
set forth in SCHEDULE 3.4 of the OC Financial Disclosure Schedules, no consents
or approvals of or filings or registrations with any court, administrative
agency or commission or other governmental authority or instrumentality (each a
"Governmental Entity") or with any third party are necessary in connection with
(1) the execution and delivery by OC Financial of this Agreement and (2) the
consummation by OC Financial of the Merger and the other transactions
contemplated hereby.
3.5 REPORTS. Except as listed on SCHEDULE 3.5 of the OC Financial
Disclosure Schedules, OC Financial 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 April 1, 2005 with (i) the OTS, (ii) the FDIC, (iii) any other state
regulatory authority (each a "State Regulator") and (v) any other
self-regulatory organization ("SRO") (collectively, the "Regulatory Agencies"
and individually a "Regulatory Agency"), and all other material reports and
statements required to be filed by them since April 1, 2005, including, without
limitation, any report or statement required to be filed pursuant to the laws,
rules or regulations of the United States, the OTS, the FDIC, any State
Regulator or any SRO, and have paid all fees and assessments due and payable in
connection therewith. Except for normal examinations conducted by a Regulatory
Agency in the regular course of the business of OC Financial and its
Subsidiaries and except as set forth in SCHEDULE 3.5 of the OC Financial
Disclosure Schedules, no Regulatory Agency has initiated any proceeding or, to
OC Financial's knowledge, investigation into the business or operations of OC
Financial or any of its Subsidiaries since April 1, 2005. There is no unresolved
material violation, criticism, or exception by any Regulatory Agency with
respect to any report or statement relating to any examinations of OC Financial
or any of its Subsidiaries.
3.6 FINANCIAL STATEMENTS. OC Financial has previously delivered to First
Place copies of (a) the consolidated balance sheets of OC Financial and its
Subsidiaries at September 30 for the fiscal years ended 2007 and 2006, and the
related consolidated statements of income, changes in stockholders' equity and
cash flows for the fiscal years ended September 30, 2005 through 2007,
inclusive, in each case accompanied by the audit report of Beard Miller Company
LLP, independent public accountants with respect to OC Financial, and (b) the
unaudited consolidated balance sheets of OC Financial and its Subsidiaries as of
December 31, 2007 and December 31, 2006 and the related unaudited consolidated
statements of income, cash flows and changes in stockholders' equity for the
three month periods then ended (collectively the "OC Financial Statements"). The
December 31, 2007 consolidated balance sheet of OC Financial (including the
related notes, where applicable) fairly presents the consolidated financial
position of OC Financial and its Subsidiaries as of the date thereof, and the
other financial statements referred to in this Section 3.6 hereof (including the
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related notes, where applicable) fairly present, and the financial statements
referred to in Section 6.13 hereof will fairly present (subject, in the case of
the unaudited statements, to recurring audit adjustments normal in nature and
amount and the absence of footnotes), the results of the consolidated operations
and consolidated financial position of OC Financial and its Subsidiaries for the
respective fiscal periods or as of the respective dates therein set forth; each
of such statements (including the related notes, where applicable) comply, and
the financial statements referred to in Section 6.13 hereof will comply, in all
material respects with applicable accounting requirements (subject, in the case
of the unaudited statements, to recurring audit adjustments normal in nature and
amount and the absence of footnotes), and the financial statements referred to
in Section 6.13 hereof will be, prepared in accordance with generally accepted
accounting principles ("GAAP") (subject, in the case of the unaudited
statements, to recurring audit adjustments normal in nature and amount and the
absence of footnotes) consistently applied during the periods involved, except
as indicated in the notes thereto. The fiscal year-end audits of OC Financial
and its Subsidiaries have been conducted in accordance with generally accepted
auditing standards of the United States of America. The books and records of OC
Financial 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.
3.7 BROKER'S FEES. Neither OC Financial nor any Subsidiary of OC
Financial 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, except that OC Financial has engaged, and will pay a fee or
commission to Keefe, Bruyette & Woods, Inc. ("KBW") in accordance with the terms
of a letter agreement between KBW and OC Financial concerning the Merger and the
issuance of an opinion regarding the fairness, from a financial point of view,
of the Aggregate Merger Consideration to OC Financial stockholders, a true,
complete and correct copy of which has been previously delivered by OC Financial
to First Place.
3.8 ABSENCE OF CERTAIN CHANGES OR EVENTS.
(a) Except as may be set forth in SCHEDULE 3.8(A) of the OC
Financial Disclosure Schedules or as provided for in the OC Financial
Statements, since September 30, 2007, (i) neither OC Financial nor any of its
Subsidiaries has incurred any material liability, and (ii) no event has occurred
which has caused, or is reasonably likely to cause, individually or in the
aggregate, a Material Adverse Effect on OC Financial.
(b) Except as set forth in SCHEDULE 3.8(B) of the OC Financial
Disclosure Schedules, since September 30, 2007, OC Financial and its
Subsidiaries each (i) has been operated in the ordinary course of business
consistent with past practice and (ii) has not made any changes in its
respective capital or corporate structures, nor any material change in its
methods of business operations.
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(c) Except as set forth in SCHEDULE 3.8(C) of the OC Financial
Disclosure Schedules and to the extent permitted under Section 5.1(d)(i), since
September 30, 2007, neither OC Financial nor any of its Subsidiaries has (i)
increased the wages, salaries, compensation, pension, or other fringe benefits
or perquisites payable to any executive officer, employee, or director from the
amount thereof in effect as of September 30, 2007 (which amounts have been
previously disclosed to First Place), granted any severance or termination pay,
entered into any contract to make or grant any severance or termination pay,
granted any stock options or other derivative security or paid any bonus or (ii)
suffered any strike, work stoppage, slow-down, or other labor disturbance or
(iii) taken any of the actions set forth in Section 5.1 hereof.
(d) Since September 30, 2007, neither OC Financial nor any of its
Subsidiaries has had any layoffs, work force reductions or otherwise terminated
the employment of its employees, other than in the ordinary course of business,
consistent with past practice.
3.9 LEGAL PROCEEDINGS.
(a) Except as set forth in SCHEDULE 3.9(A) of the OC Financial
Disclosure Schedules, neither OC Financial nor any of its Subsidiaries is a
party to any, and there are no pending or, to OC Financial's knowledge,
threatened, legal, administrative, arbitral or other proceedings, claims,
actions, suits or governmental or regulatory investigations (i) of any nature
against OC Financial or any of its Subsidiaries or (ii) challenging the validity
or propriety of the transactions contemplated by this Agreement.
(b) Except as set forth in SCHEDULE 3.9(B) of the OC Financial
Disclosure Schedules, there is no injunction, order, judgment, decree, or
regulatory restriction imposed upon OC Financial, any of its Subsidiaries or the
assets of OC Financial or any of its Subsidiaries, which has had, or could
reasonably be expected to have, a Material Adverse Effect on OC Financial.
(c) Except as set forth in SCHEDULE 3.9(C) of the OC Financial
Disclosure Schedules, there are no actions, suits, claims, proceedings,
investigations or assessments of any kind pending, or to OC Financial's
knowledge, threatened against any of the directors or officers of OC Financial
or any of its Subsidiaries in their capacities as such, and no director or
officer of OC Financial or any of its Subsidiaries currently is being
indemnified or seeking to be indemnified by OC Financial or any of its
Subsidiaries pursuant to applicable law or their governing documents.
3.10 TAXES.
(a) (i) All Tax Returns for which the statute of limitations for
assessment has not expired that are required to be filed on or before the
Closing Date (taking into account any extensions of time within which to file
which have not expired) by or with respect to OC Financial and its Subsidiaries
have been or will be timely filed on or before the Closing Date; (ii) all such
Tax Returns are or will be true and complete in all material respects; (iii) all
Taxes owed by OC Financial or its Subsidiaries (whether or not shown or required
to be shown on any Tax Return referred to in clause (i)) have been or will be
timely paid in full; (iv) the Tax Returns referred to in clause (i) for which
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the statute of limitations for assessment has not expired have not been examined
by the IRS or the appropriate Tax authority; (v) all deficiencies asserted or
assessments made as a result of examinations conducted by any taxing authority
have been paid in full; (vi) no issues that have been raised by the relevant
taxing authority in connection with the examination of any of the Tax Returns
referred to in clause (i) are currently pending; and (vii) neither OC Financial
nor any Subsidiary has extended any statutes of limitation with respect to the
assessment of any Taxes of OC Financial or any of its Subsidiary, other than
extensions that have expired.
(b) OC Financial has made available to First Place (i) true and
correct copies of the United States federal, state, local and foreign income Tax
Returns filed by OC Financial and its Subsidiaries for each of the three most
recent fiscal years for which such returns have been filed; and (ii) any audit
report issued within the last three years relating to Taxes due from or with
respect to OC Financial and its Subsidiaries. Since April 1, 2005, no claim has
been made by a taxing authority in a jurisdiction where OC Financial and its
Subsidiaries do not file Tax Returns that OC Financial and its Subsidiaries is
or may be subject to taxation by that jurisdiction.
(c) Neither OC Financial nor any of its Subsidiaries has liability
with respect to income, franchise or similar Taxes that accrued on or before the
end of the most recent period covered by the OC Financial Statements in excess
of the amounts accrued or subject to a reserve with respect thereto that are
reflected in the OC Financial Statements.
(d) SCHEDULE 3.10(D) of the OC Financial Disclosure Schedules list
all combined, consolidated or unitary federal, state, local, or foreign returns
filed by or with respect to OC Financial and any of its Subsidiaries on or after
April 1, 2005.
(e) Except as set forth in SCHEDULE 3.10(E) of the OC Financial
Disclosure Schedules, neither OC Financial nor any of its Subsidiaries is a
party to any Tax allocation or sharing agreement or otherwise has any liability
for the Taxes of any person other than OC Financial or any of its Subsidiaries.
Any such Tax allocation or sharing agreement will be terminated on or before the
Closing Date. No liability will be created for OC Financial or any of its
successors after the Closing Date as a result of the application of Treasury
Regulations section 1.1502-6. No liability will be created for OC Financial or
its successors after the Closing Date to reimburse any Subsidiary Affiliates for
any Taxes.
(f) No closing agreements, private letter rulings, technical
advice memoranda or similar agreements or rulings have been entered into or
issued by any taxing authority with respect to OC Financial or any of its
Subsidiaries.
(g) Except for the amounts calculated and the detailed disclosure
for each Person set forth on SCHEDULE 3.10(G) of the OC Financial Disclosure
Schedules, neither OC Financial nor any of its Subsidiaries maintains any
compensation plans, programs or arrangements the payments under which would not
reasonably be expected to be deductible as a result of the limitations under
Section 162(m) or Section 280G of the Code and the regulations issued
thereunder. Neither OC Financial nor any of its Subsidiaries has ever been, an
"S corporation" within the meaning of Section 1361 of the Code. Neither OC
13
Financial nor any of its Subsidiaries has filed a consent under Code ss.341(f)
concerning collapsible corporations. Neither OC Financial nor any of its
Subsidiaries has been a United States real property holding corporation within
the meaning of Code ss.897(c)(2) during the applicable period specified in Code
ss.897(c)(1)(A)(ii). Since April 1, 2005, neither OC Financial nor any of its
Subsidiaries (A) has been a member of an affiliated group filing a consolidated
federal income tax return (other than a group the common parent of which was OC
Financial) or (B) has any liability for the taxes of any person (other than OC
Financial or any of its Subsidiaries) under Reg. ss.1.1502-6 (or any similar
provision of state, local, or foreign law), as a transferee or successor, by
contract, or otherwise.
(h) Except as set forth on SCHEDULE 3.10(H) of the OC Financial
Disclosure Schedules, since April 1, 2005, neither OC Financial nor any of its
Subsidiaries has agreed to, or is required to, make any adjustments pursuant to
Section 481(a) of the Code or any similar provision of law by reason of a change
in accounting method initiated by OC Financial or any of its Subsidiaries or
proposed by any taxing authority, and no application is pending with any taxing
authority requesting permission for any changes in accounting methods that
related to business or operations of OC Financial or any of its Subsidiaries.
(i) Neither OC Financial nor any of its Subsidiaries is required
to make any disclosure to any taxing authority with respect to a "listed
transaction" pursuant to Section 1.6011-4(b)(2) of the Treasury Regulations.
(j) As of the date hereof, OC Financial has no reason to believe
that any conditions exist that might prevent or impede the Merger from
qualifying as reorganization within the meaning of Section 368(a) of the Code.
(k) Each of OC Financial and its Subsidiaries has complied in all
respects with all applicable laws, rules and regulations relating to the
withholding of Taxes and has duly and timely withheld from employee salaries,
wages and other compensation paid to independent contractors, creditors,
stockholders, or other third parties and has paid over to the appropriate taxing
authorities all amounts required to be so withheld and paid over for all periods
under applicable laws.
(l) There are no liens or other encumbrances on any of the assets
of OC Financial or its Subsidiaries that arose in connection with any failure
(or alleged failure) to pay Tax.
(m) Except as set forth in SCHEDULE 3.10(M) of the OC Financial
Disclosure Schedules, which Schedule lists the amount and the expiration dates
of consolidated net operating losses, net capital losses, net unrealized
built-in losses, foreign tax credits, minimum tax credits, investment tax
credits and other tax credits carryovers of the OC Financial Group allocable to
OC Financial and each of its Subsidiaries, OC Financial Group does not have any
net operating losses or other tax attributes that are currently subject to
limitation under Section 382, 383 or 384 of the Code.
14
(n) No liability will be created for OC Financial or its
successors after the Closing Date as a result of the triggering into income or
gain of deferred inter-company transactions or excess loss accounts as a result
of the application of Treasury Regulations sections 1.1502-13 and 1.152-19 or
related to items of income or gain arising with respect to any interest in a
Subsidiary which is not a member of the OC Financial Group.
(o) Neither OC Financial nor any of its Subsidiaries has
investment tax credits or overall foreign losses allocable to it subject to
recapture.
(p) Except as set forth in SCHEDULE 3.10(P) of the OC Financial
Disclosure Schedules, each of OC Financial and its Subsidiaries has made
estimated Tax payments of federal and state income and franchise Taxes on the
applicable estimated Tax payment dates at level sufficient not to cause OC
Financial or its Subsidiaries to be liable for any penalties attributable to
underpayment of estimated Taxes, and OC Financial and its Subsidiaries will
continue to make timely estimated Tax payments at levels sufficient to not cause
OC Financial or any successor to OC Financial to be liable for any such
penalties.
(q) None of OC Financial's Subsidiaries will be required to
include any item of income in, or exclude any item of deduction from, taxable
income for any taxable period (or portion thereof) ending after the Closing Date
as a result of (i) any "closing agreement" as described in Code ss.7121 (or any
corresponding provisions of state, local or foreign income Tax law; (ii) any
inter-company transactions or excess loss account (or corresponding provision of
state, local or foreign income Tax law); (iii) any installment sale or open
transaction made on or prior to the Closing Date; or (iv) as a result of any
prepaid amount received on or prior to the Closing Date.
(r) Neither OC Financial nor any of its Subsidiaries has
distributed stock of another "person" as defined under Code ss.7701(a)(1), or
has had its stock distributed by another "person" as defined under Code
ss.7701(a)(1), in a transaction that was purported or intended to be governed in
whole or in part by Code ss.355 or Code ss.361.
For the purposes of this Agreement, "Tax" or "Taxes" shall mean all taxes,
charges, fees, 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 taxes, including any interest, penalties
or additions attributable thereto.
For purposes of this Agreement, "Tax Return" shall mean any return,
report, information return or other document (including any related or
supporting information) with respect to Taxes.
For purposes of this Agreement, "OC Financial Group" shall mean any
"affiliated group" (as defined in Section 1504(a) of the Code without regard to
the limitation contained in Section 1504(b) of the Code that includes OC
Financial and its Subsidiaries or any predecessor of or any successor to OC
Financial (or to another such predecessor or successor) since April 1, 2005.
For purposes of this Agreement, "Subsidiary Affiliates" shall mean any
stockholders, directors, officers, or employees of any of OC Financial or its
Subsidiaries.
15
3.11 EMPLOYEE BENEFIT PLAN MATTERS.
(a) SCHEDULE 3.11(A) of the OC Financial Disclosure Schedules sets
forth a true and complete list of each employee benefit plan, as the term is
defined in Section 3 of the Employee Retirement Income Security Act of 1974, as
amended ("ERISA"), and any other employee benefit arrangement or agreement that
is sponsored, maintained or contributed to, or required to be contributed to, as
of the date of this Agreement (collectively referred to as the "Plans") by OC
Financial, any of its Subsidiaries or by any trade or business, whether or not
incorporated (an "ERISA Affiliate"), all of which together with OC Financial
would be deemed a "single employer" within the meaning of Section 4001 of ERISA
or Section 414 of the Code, for the benefit of any employee or former employee
of OC Financial, any Subsidiary or any ERISA Affiliate.
(b) OC Financial has heretofore delivered to First Place true and
complete copies of each of the Plans and related trust instruments and all
amendments thereto, the most recent summary plan description and summaries of
material modifications thereto, underlying insurance contracts and all other
related documents thereto, including, but not limited to (i) the actuarial
report for any Plan (if applicable) for each of the last three (3) years, (ii)
the most recent determination letter from the Internal Revenue Service ("IRS")
(if applicable) for any Plan, (iii) the most recent three (3) years' annual
reports (Form 5500), together with all schedules, as required, filed with the
IRS or Department of Labor ("DOL") for any Plan, (iv) any financial statements
and opinions required by Section 103(e)(3) of ERISA with respect to each Plan,
and (v) for any Plan which for ERISA purposes is a "top-hat" plan, a copy of any
top-hat filing with DOL.
(c) Except as set forth in SCHEDULE 3.11(C) of the OC Financial
Disclosure Schedules, (i) each of the Plans has been operated and administered
in all material respects in accordance with its terms and applicable law,
including but not limited to ERISA and the Code (any liability in excess of
$25,000 arising as a result of a breach of this representation shall be deemed
to be material and shall result in a reduction of the Aggregate Merger
Consideration equal to the entire liability), (ii) each of the Plans intended to
be "qualified" within the meaning of Section 401(a) of the Code either (1) has
received a favorable determination letter from the IRS, or (2) is or will be the
subject of an application for a favorable determination letter, and OC Financial
is not aware of any circumstances likely to result in the revocation or denial
of any such favorable determination letter, (iii) no Plan provides benefits,
including without limitation death or medical benefits (whether or not insured),
with respect to current or former employees of OC Financial, 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 OC Financial, 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), (iv) neither OC Financial nor any ERISA
Affiliate sponsors a Plan that is subject to Title IV of ERISA and no Plan of OC
Financial or any ERISA affiliate is a "multiemployer pension plan," as such term
is defined in Section 3(37) of ERISA, (v) each Plan that is a "nonqualified
16
deferred compensation plan" (as defined in Section 409A(d)(1) of the Code) and
which has not been terminated has been operated since January 1, 2005 in good
faith compliance with Section 409A of the Code, Internal Revenue Service Notice
2005-1 and the regulations issued under Section 409A of the Code, (vi) each Plan
can be terminated without payment of any additional contribution or amount,
other than contributions and amounts required by the terms of the Plan without
regard to the Plan's termination, and without vesting or acceleration of any
benefits provided under such Plan, other than vesting required by the Code as a
result of a qualified Plan's termination, (vii) all contributions or other
amounts payable by OC Financial, its Subsidiaries or any ERISA Affiliates 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 OC Financial, its Subsidiaries nor any ERISA Affiliate has
engaged in a transaction in connection with which OC Financial, its Subsidiaries
or any ERISA Affiliate could be subject to either a civil penalty assessed
pursuant to Section 409 or 502(i) of ERISA or a tax imposed pursuant to Section
4975 or 4976 of the Code, (ix) there are no pending, or, to OC Financial's
knowledge, threatened or anticipated proceedings, investigations or claims
(other than routine claims for benefits) by, on behalf of or against any of the
Plans or any trusts related thereto and (x) the consummation of the transactions
contemplated by this Agreement will not (1) entitle any current or former
employee or officer of OC Financial or any ERISA Affiliate to severance pay,
termination pay or any other payment, except as expressly provided in this
Agreement or (2) accelerate the time of payment or vesting or increase the
amount of compensation due any such employee or officer.
3.12 REGULATORY REPORTS. OC Financial has previously made available to
First Place an accurate and complete copy of each (a) offering memorandum, final
registration statement, prospectus, report, schedule, consent solicitations or
notices and definitive proxy statement filed since April 1, 2005 by OC Financial
or its Subsidiaries with their Regulatory Agencies (the "OC Financial Reports")
and (b) communication mailed by OC Financial to its stockholders since April 1,
2005, and no such offering memorandum, registration statement, prospectus,
report, schedule, consent solicitations or notices, proxy statement or
communication 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 not misleading, except that information as of a
later date shall be deemed to modify information as of an earlier date. Except
as set forth in SCHEDULE 3.5 of the OC Financial Disclosure Schedules, OC
Financial and its Subsidiaries have timely filed all OC Financial Reports and
other documents required to be filed by it under the laws, rules or regulations
of the OTS and other Regulatory Agencies, and, as of their respective dates, all
OC Financial Reports complied in all material respects with the published rules
and regulations of the OTS and other Regulatory Agencies with respect thereto.
3.13 OC FINANCIAL INFORMATION. The information provided by and relating
to OC Financial and its Subsidiaries to be contained in, or incorporated by
reference in, the Proxy Statement and First Place's Registration Statement on
Form S-4 (the "S-4"), or in any other document filed with any other regulatory
agency 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 not misleading. The information included in, or incorporated by
reference in, the sections of the Proxy Statement and provided by OC Financial
for inclusion in the S-4 will comply in all material respects with the
provisions of the Securities Act of 1933, as amended ("Securities Act") and the
Securities Exchange Act of 1934, as amended ("Exchange Act") and the rules and
regulations thereunder.
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3.14 OWNERSHIP OF FIRST PLACE COMMON STOCK. Except as set forth in
SCHEDULE 3.14 of the OC Financial Disclosure Schedules, none of OC Financial,
its Subsidiaries or their respective directors, officers or affiliates, (i)
beneficially own, directly or indirectly, or (ii) are a party to any agreement,
arrangement or understanding for the purpose of acquiring, holding, voting or
disposing of, in each case, any shares of capital stock of First Place.
3.15 COMPLIANCE WITH APPLICABLE LAW. Each of OC Financial and its
Subsidiaries: (i) is in material compliance with all applicable federal, state,
local and foreign statutes, laws, regulations, policies, ordinances, rules,
judgments, orders or decrees applicable thereto or to the employees conducting
such businesses, including, without limitation, the Equal Credit Opportunity Act
of 1974 and the regulations promulgated thereunder, the Truth in Lending Act and
Regulation Z promulgated thereunder, the Fair Housing Act, the Community
Reinvestment Act, the Home Mortgage Disclosure Act, the Real Estate Settlement
Procedures Act, the Fair Debt Collection Practices Act, the Bank Secrecy Act,
the PATRIOT Act and all other applicable fair lending laws and other laws
relating to discriminatory business practices; (ii) hold all material licenses,
franchises, permits and authorizations necessary for the lawful conduct of their
respective businesses under and pursuant to all, and are in compliance with and
are not, to its knowledge, in default in any respect under such licenses,
franchises, permits and authorizations under any applicable law, statute, order,
rule, regulation, policy and/or guideline of any Governmental Entity relating to
OC Financial 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 be reasonably likely to
have a Material Adverse Effect on OC Financial; and (iii) neither OC Financial
nor any of its Subsidiaries knows of, or has received notice of, any material
violations of any of the above or threats to resolve, suspect or otherwise
restrict any of the above since April 1, 2005.
3.16 CERTAIN CONTRACTS.
(a) Except as set forth in SCHEDULE 3.16(A) of the OC Financial
Disclosure Schedules, neither OC Financial nor any of its Subsidiaries is a
party to or bound by any contract, arrangement, commitment or understanding
(whether written or oral) (i) with respect to the employment of any directors,
officers, employees or consultants; (ii) which would entitle any present or
former director, officer, employee or agent of OC Financial or any of its
Subsidiaries to indemnification from OC Financial or any of its Subsidiaries,
(iii) which, upon the consummation of the transactions contemplated by this
Agreement or the Bank Merger Agreement will (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 First Place, OC Financial, OC Bank, the Bank
or any of their respective Subsidiaries or successors to any officer or employee
thereof, (iv) that OC Financial or any Subsidiary is a party which involves the
annual payment of more than $10,000 or more; (v) which is a consulting agreement
(including data processing, software programming and licensing contracts) not
terminable on 60 days or less notice involving the payment of more than $10,000
per annum, in the case of any such agreement with an individual, or $25,000 per
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annum, in the case of any other such agreement; (vi) which materially restricts
the conduct of any line of business by OC Financial or any of its Subsidiaries;
(vi) with or to a labor union or guild (including any collective bargaining
agreement); (vii) relating to the acquisition or disposition of any business
(whether by merger, sale of stock, sale of assets or otherwise) or material
assets; (viii) that grants any right of first refusal or right of first offer or
similar right or that limits or purports to limit the ability of OC Financial or
any of its Subsidiaries to own, operate, sell, transfer, pledge or otherwise
dispose of any material amount of assets or business; (ix) with respect to any
material joint venture, partnership agreement or similar agreement; (x) with
respect to any agreement relating to any intellectual property; (xi) relating to
the indebtedness by OC Financial or its Subsidiaries for borrowed money or any
guaranty of indebtedness for borrowed money in excess of $10,000; or (xii) where
any employee benefits (including any stock option plan, stock appreciation
rights plan, restricted stock plan or stock purchase plan) will be increased, or
the vesting of the benefits of which will be accelerated, by the occurrence of
any of the transactions contemplated by this Agreement or the Bank Merger
Agreement, or the value of any of the benefits of which will be calculated on
the basis of any of the transactions contemplated by this Agreement or the Bank
Merger Agreement. Each contract, arrangement, commitment or understanding of the
type described in this Sections 3.16(a) and 3.16(c) hereof, whether or not set
forth in SCHEDULE 3.16(A) or SCHEDULE 3.16(C) of the OC Financial Disclosure
Schedules, is referred to herein as a "OC Financial Contract." OC Financial has
previously delivered to First Place true and correct copies of each OC Financial
Contract.
(b) Except as set forth in SCHEDULE 3.16(B) of the OC Financial
Disclosure Schedules, (i) each OC Financial Contract is valid and binding and in
full force and effect, 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, receivership, conservatorship reorganization,
moratorium, fraudulent transfer and similar laws affecting creditors' rights and
remedies generally, (ii) OC Financial and each of its Subsidiaries has in all
material respects performed all obligations required to be performed by it to
date under each OC Financial Contract, except where such noncompliance,
individually or in the aggregate, would not have or be reasonably likely to have
a Material Adverse Effect on OC Financial, (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 OC Financial or any of its Subsidiaries under
any such OC Financial Contract, except where such default, individually or in
the aggregate, would not have or be reasonably likely to have a Material Adverse
Effect on OC Financial and (iv) no other party to such OC Financial Contract is,
to OC Financial's knowledge, in default in any respect thereunder.
(c) SCHEDULE 3.16(C) of the OC Financial Disclosure Schedules sets
forth all agreements of OC Financial providing for the lease of real property,
including term of the lease, any option to extend such lease and any consent or
notice required in connection with the Merger and the transactions contemplated
hereby.
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3.17 AGREEMENTS WITH REGULATORY AGENCIES. Except as set forth in SCHEDULE
3.17 of the OC Financial Disclosure Schedules, neither OC Financial 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 is a recipient of
any supervisory letter from, or has adopted any board resolutions at the request
of (each, whether or not set forth on SCHEDULE 3.17 of the OC Financial
Disclosure Schedules, a "Regulatory Agreement"), any Regulatory Agency or other
Governmental Entity that restricts the conduct of its business or that in any
manner relates to its capital adequacy, its credit policies, its management or
its business, nor has OC Financial or any of its Subsidiaries been advised by
any Regulatory Agency or other Governmental Entity that it is considering
issuing or requesting any Regulatory Agreement.
3.18 INVESTMENT SECURITIES. SCHEDULE 3.18 of the OC Financial Disclosure
Schedules sets forth the book and market value as of February 29, 2008 of the
investment securities, mortgage-backed securities and securities held for
investment, sale or trading of OC Financial and its Subsidiaries. SCHEDULE 3.18
of the OC Financial Disclosure Schedules sets forth an investment securities
report that includes, security descriptions, CUSIP numbers, pool face values,
book values, coupon rates and current market values. The totals presented in the
securities report agree to the amounts carried in OC Financial's and its
Subsidiaries' general ledgers in accordance with GAAP. Except as disclosed in
SCHEDULE 3.18 of the OC Financial Disclosure Schedules, since April 1, 2005 to
the date hereof, neither OC Financial nor its Subsidiaries has incurred any
unusual or extraordinary losses in its investment portfolio, and, except for
matters of general application to the banking industry (including, but not
limited to, changes in laws or regulations or generally accepted accounting
principles) or for events relating to the business environment in general,
including market fluctuations and changes in interest rates, OC Financial is not
aware of any events which may be expected to result in any material adverse
change in the quality or performance of the investment portfolio of OC Financial
or its Subsidiaries.
3.19 INTELLECTUAL PROPERTY. OC Financial and each of its Subsidiaries
owns (without lien or encumbrance of any kind) or possesses valid and binding
licenses and other rights to use without payment all material patents,
copyrights, trade secrets, trade names, servicemarks, trademarks and computer
software used in its businesses; and neither OC Financial nor any of its
Subsidiaries has received any notice of conflict with respect thereto that
asserts the right of others. OC Financial and each of its Subsidiaries have in
all material respects performed all the obligations required to be performed by
them and are not in default in any material respect under any contract,
agreement, arrangement or commitment relating to any of the foregoing, except
where such non-performance or default would not, individually or in the
aggregate, have or be reasonably likely to have a Material Adverse Effect on OC
Financial. SCHEDULE 3.19 of the OC Financial Disclosure Schedules lists (i) all
patents, registered copyrights, trade names, servicemarks, trademarks of OC
Financial and its Subsidiaries that are owned by OC Financial and its
Subsidiaries and (ii) all patents, registered copyrights, trade names,
servicemarks, trademarks of OC Financial and its Subsidiaries that are licensed
by OC Financial and its Subsidiaries.
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3.20 UNDISCLOSED LIABILITIES. Except (a) as set forth in SCHEDULE 3.20 of
the OC Financial Disclosure Schedules, (b) for those liabilities that are fully
reflected or reserved against on the consolidated balance sheet of OC Financial
included in the OC Financial Statements; and (c) for liabilities incurred in the
ordinary course of business since September 30, 2007 that, either alone or when
combined with all similar liabilities, have not had, and could not reasonably be
expected to have, a Material Adverse Effect on OC Financial, neither OC
Financial 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).
3.21 STATE TAKEOVER LAWS. OC Financial, OC Bank and each other Subsidiary
has taken all actions required to exempt such company, this Agreement, the
Merger and the Subsidiary Merger, and the transaction contemplated hereby and by
the Bank Merger Agreement, from any provisions of an antitakeover nature
contained in their organizational documents or the provisions of any federal or
state "antitakeover," "fair price," "moratorium," "affiliate transaction",
"control share acquisition" or similar laws or regulations ("Takeover Laws"),
including but not limited to Sections 3-601 through 3-604 and Section 3-701
through 3-709 of the MGCL.
3.22 ADMINISTRATION OF FIDUCIARY ACCOUNTS. OC Financial and each of its
Subsidiaries has properly administered in all material respects all accounts for
which it acts as a fiduciary, including but not limited to accounts for which it
serves as a trustee, agent, custodian, personal representative, guardian,
conservator or investment advisor, in accordance with the terms of the governing
documents and applicable state and federal law and regulation and common law.
Neither OC Financial nor any of its Subsidiaries nor any of their respective
directors, officers or employees has committed any breach of trust with respect
to any such fiduciary account which has had or could reasonably be expected to
have a Material Adverse Effect on OC Financial, and the books and records for
each such fiduciary account are true and correct in all material respects and
accurately reflect the assets of such fiduciary account.
3.23 ENVIRONMENTAL MATTERS. Except as set forth in SCHEDULE 3.23 of the
OC Financial Disclosure Schedules:
(a) Each of OC Financial, its current or prior Subsidiaries, the
Participation Facilities and the Loan Properties (each as hereinafter defined)
are, and have been, in material compliance with all applicable federal, state
and local laws including common law, regulations and ordinances and with all
applicable permits, decrees, orders and contractual obligations relating to
pollution, the discharge of, or exposure to materials in the environment or
workplace ("Environmental Laws");
(b) There is no suit, claim, action or proceeding, pending or, to
OC Financial's knowledge, threatened, before any court, Governmental Entity or
other forum (including arbitration) in which OC Financial, any of its
Subsidiaries, any Participation Facility or any Loan Property, has been or, with
respect to threatened proceedings, may be, named as a defendant (x) for alleged
noncompliance (including by any predecessor), with any Environmental Laws, or
(y) relating to the release, threatened release or exposure to any material
whether or not occurring at or on a site owned, leased or operated by OC
Financial or any of its current or prior Subsidiaries, any Participation
Facility or any Loan Property;
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(c) During the period of (x) OC Financial's or any of its
Subsidiaries' ownership or operation of any of their respective current
properties, (y) OC Financial's or any of its Subsidiaries' participation in the
management of any Participation Facility, or (z) OC Financial's or any of its
Subsidiaries' holding of a security interest in a Loan Property, there has been
no release of materials in, on, under or affecting any such property except in
compliance with required governmental permits. Prior to the period of (x) OC
Financial's or any of its Subsidiaries' ownership or operation of any of their
respective current properties, (y) OC Financial's or any of its Subsidiaries'
participation in the management of any Participation Facility, or (z) OC
Financial's or any of its Subsidiaries' holding of a security interest in a Loan
Property, there was no release or threatened release of materials in, on, under
or affecting any such property, Participation Facility or Loan Property, except
in compliance with required permits;
(d) Except as set forth in SCHEDULE 3.23(D) of the OC Financial
Disclosure Schedules, all Phase I or Phase II environmental surveys on any
properties owned or leased by OC Financial or its Subsidiaries, including but
not limited to other real estate owned ("OREO") properties have been provided in
full to First Place and its representatives prior to execution of this
agreement, and those listed in the Schedule will be provided within ten days of
execution of this agreement; and
(e) The following definitions apply for purposes of this Section
3.23 hereof: (x) "Loan Property" means any property in which OC Financial or any
of its current or prior Subsidiaries holds a security interest or otherwise
owns; (y) "Participation Facility" means any facility in which OC Financial or
any of its Subsidiaries participates in the management thereof; (z) "materials"
includes, but is not limited to, hazardous substances and petroleum as defined
in section 101(14) of the Comprehensive Environmental Response, Compensation and
Liability Act (CERCLA), 42 U.S.C. ss. 9601(14) and section 311 of the Clean
Water Act, 33 U.S.C. ss. 1321 and their implementing regulations.
3.24 DERIVATIVE TRANSACTIONS. Except as set forth in SCHEDULE 3.24 of the
OC Financial Disclosure Schedules, neither OC Financial nor any of its
Subsidiaries is a party to or has agreed to enter into an exchange traded or
over-the-counter equity, interest rate, foreign exchange or other swap, forward,
future, option, cap, floor or collar or any other contract that is not included
on its balance sheet and is a derivatives contract (including various
combinations thereof) (each, a "Derivatives Contract") nor does OC Financial or
any of its Subsidiaries own securities that (i) are referred to generically as
"structured notes," "high risk mortgage derivatives," "capped floating rate
notes" or "capped floating rate mortgage derivatives" or (ii) are likely to have
changes in value as a result of interest or exchange rate changes that
significantly exceed normal changes in value attributable to interest or
exchange rate changes.
3.25 OPINION. OC Financial has received a written opinion, dated the date
hereof, from KBW to the effect that, subject to the terms, conditions and
qualifications set forth therein, as of the date thereof the Aggregate Merger
Consideration is fair to OC Financial's stockholders from a financial point of
view.
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3.26 ASSISTANCE AGREEMENTS. Neither OC Financial nor any of its
Subsidiaries is a party to any agreement or arrangement entered into in
connection with the consummation of a federally assisted acquisition of a
depository institution pursuant to which OC Financial or any of its Subsidiaries
is entitled to receive financial assistance or indemnification from any
governmental agency.
3.27 APPROVALS. As of the date of this Agreement, OC Financial knows of
no reason why all regulatory approvals required for the consummation of the
transactions contemplated hereby (including, without limitation, the Merger)
should not be obtained without the imposition of a Burdensome Condition (as
defined in Section 7.1(g) hereof).
3.28 LOAN PORTFOLIO.
(a) In OC Financial's reasonable judgment, the allowance for loan
losses reflected in OC Financial's audited statement of financial condition at
September 30, 2007 was, and the allowance for loan losses shown on the balance
sheets in OC Financial's Reports for periods ending after September 30, 2007
have been and will be, adequate in all material respects, as of the dates
thereof, under GAAP, and no Regulatory Agencies have required or requested OC
Bank to increase the allowance for loan losses for such periods. OC Bank's
allowance for loan losses is, and shall be as of the Effective Time (including
any modification as required by Section 6.9 hereof), in compliance with
standards established by applicable Governmental Entities and the Financial
Accounting Standards Board and is and shall be adequate under all such
standards.
(b) As of September 30, 2007, except as set forth in SCHEDULE 3.28
of the OC Financial Disclosure Schedules, neither OC Financial nor any of its
Subsidiaries is a party to any written or oral (i) loan agreement, note or
borrowing arrangement (including, without limitation, leases, credit
enhancements, commitments, guarantees and interest-bearing assets) (individually
a "Loan" and collectively, "Loans"), under the terms of which the obligor is, as
of the date of this Agreement, over 90 days delinquent in payment of principal
or interest or in default of any other provision, or (ii) Loans with any
director, executive officer or ten percent stockholder of OC Financial or any of
its Subsidiaries, or to the knowledge of OC Financial, any person, corporation
or enterprise controlling, controlled by or under common control with any of the
foregoing. SCHEDULE 3.28 of the OC Financial Disclosure Schedules sets forth (i)
all of the Loans of OC Financial or any of its Subsidiaries that as of the date
of this Agreement are classified as "Other Loans Specially Mentioned," "Special
Mention," "Substandard," "Doubtful," "Loss," "Classified," "Criticized," "Credit
Risk Assets," "Concerned Loans," "Watch List," "OREO" acquired by foreclosure or
deed in lieu thereof, or words of similar import, together with the principal
amount of and the accrued and unpaid interest on each such Loan and the identity
of the Loan by number; and (ii) by category of Loan (i.e., commercial, consumer,
etc.), all of the other Loans of OC Financial or any of its Subsidiaries that as
of the date of this Agreement are classified as such, together with the
aggregate principal amount of and accrued and unpaid interest on such Loans by
category. OC Financial shall promptly inform First Place in writing of any Loan
that becomes classified in the manner described in the previous sentence, or any
Loan the classification of which is changed, at any time after September 30,
2007.
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(c) Each Loan reflected as an asset in the OC Financial Reports
(i) is evidenced by notes, agreements or other evidences of indebtedness which
are true, genuine and correct in all material respects, (ii) to the extent
secured, has been secured by valid liens and security interests which have been
perfected, and (iii) is the legal, valid and binding obligation of the obligor
named therein, enforceable in accordance with its terms, subject to bankruptcy,
insolvency, fraudulent conveyance and other laws of general applicability
relating to or affecting creditors' rights and to general equity principles, in
each case other than loans as to which the failure to satisfy the foregoing
standards would not have a Material Adverse Effect on OC Financial.
3.29 MORTGAGE BANKING BUSINESS.
(a) WAREHOUSE LINES OF CREDIT. OC Financial and its Subsidiaries
do not maintain any warehouse lines of credit.
(b) COMPLIANCE. Neither OC Financial nor any of its Subsidiaries
has done or failed to do, or caused to be done or omitted to be done, any act,
the effect of which would operate to invalidate or materially impair (i) any
private mortgage insurance or commitment of any private mortgage insurer to
insure, (ii) any title insurance policy, (iii) any hazard insurance policy, (iv)
any flood insurance policy, (v) any fidelity bond, direct surety bond, errors
and omissions or other insurance policy required by any Regulatory Agency,
investor or insurer, (vi) any surety or guaranty agreement or (ix) the rights of
OC Financial or any of its Subsidiaries under any Loan servicing agreement or
loan purchase commitment. No Regulatory Agency or investor in Loans or insurer
has (i) notified OC Financial or its Subsidiaries, or to OC Financial's
knowledge, claimed that OC Financial or any of its Subsidiaries has violated or
has not complied on a recurring basis with the applicable underwriting standards
with respect to Loans sold by OC Financial or any of its Subsidiaries to an
investor or (ii) imposed restrictions on the activities (including commitment
authority) of OC Financial or any of its Subsidiaries. OC Bank has not and
currently does not originate any FHA or VA Loans.
(c) LOAN FILES. The loan documents relating to each Loan
maintained in the loan files of OC Bank were in compliance with all applicable
laws and regulations at the time of the origination, assumption or modification
of such Loan, as the case may be, except where the failure to so comply, either
individually or in the aggregate, would not have a Material Adverse Effect on OC
Financial. The loan files maintained by OC Bank contain originals (or, where
necessitated by the terms of the applicable mortgage servicing agreements,
contain true, correct and complete copies) of the documents relating to each
Loan and the information contained in such loan files with respect to each such
Loan is true, complete and accurate and in compliance with all applicable laws
and regulations, except where the failure to so comply, either individually or
in the aggregate, would not have a Material Adverse Effect on OC Financial.
Except as set forth in the loan documents relating to a Loan maintained in the
loan files of OC Bank, the terms of the note, bond, deed of trust and mortgage
for each such Loan have not been impaired, waived, altered or modified in any
respect from the date of their origination except by a written instrument which
written instrument has been recorded, or submitted for recordation in due
course, if recordation is necessary to protect the interests of the owner
thereof, except where the failure to do any of the foregoing, either
individually or in the aggregate, would not have a Material Adverse Effect on OC
Financial. Except as set forth in the loan documents maintained in the loan
files by OC Bank, to OC Financial's knowledge no mortgagor has been released
from such mortgagor's obligations with respect to the applicable Loan.
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(d) NO RECOURSE. Except as set forth in SCHEDULE 3.29(D) of the OC
Financial Disclosure Schedules, OC Bank is not subject to recourse in connection
with any Loans sold by it, in each case for losses on liquidation of a loan,
borrower defaults or repurchase obligations upon the occurrence of non-payment
or other events.
(e) ESCROW ACCOUNT. All escrow accounts have been maintained by OC
Bank and, to OC Financial's knowledge, all prior servicers in accordance with
the related loan documents, all applicable laws, rules, regulations, and
requirements of governmental authorities. OC Bank has credited to the account of
borrowers all interest required to be paid on any escrow account in accordance
with applicable law and the terms of such agreements and loan documents. All
escrow, custodial, and suspense accounts related to the Loans are held in OC
Bank's name or the investor's name by OC Bank.
(f) ARM ADJUSTMENTS. With respect to each Loan for which the
interest rate is not fixed for the entire term of the Loan, OC Bank has, since
the date it originated such Loan: (i) properly and accurately entered into its
system all data required to service the loan in accordance with the related loan
documents and all regulations, (ii) properly and accurately adjusted the monthly
payment on each payment adjustment date, (iii) properly and accurately
calculated the amortization of principal and interest on each payment adjustment
date, in each case in compliance with all applicable laws, rules and regulations
and the related Loan documents, and (iv) executed and delivered any and all
necessary notices required under, and in a form that complies with, all
applicable laws, rules and regulations and the terms of the related loan
documents regarding the interest rate and payment adjustments, except where the
failure to do any of the foregoing, either individually or in the aggregate,
would not have a Material Adverse Effect on OC Financial.
(g) POOLS. Each Loan included in a pool of Loans originated or
acquired by OC Bank (a "Pool") meets all eligibility requirements (including,
without limitation, all applicable requirements for obtaining mortgage insurance
certificates and loan guaranty certificates) for inclusion in such Pool. All of
such Pools have been finally certified or, if required, recertified in
accordance with all applicable laws, rules and regulations, except where the
time for certification or recertification has not expired. To OC Financial's
knowledge, no Pools have been improperly certified. The loan file for each Loan
included in a certified Pool contains all documents and instruments necessary
for the final certification or recertification of such Pool. Neither the
execution, delivery or performance of this Agreement by OC Financial nor the
consummation by OC Financial or OC Bank of the transactions contemplated hereby
will require any Pool to be recertified.
(h) MORTGAGE INSURANCE. Each Loan which is indicated in the
related loan file to be insured by private mortgage insurance, OC Bank has
complied with or been granted waivers from applicable provisions of the
insurance or guarantee contract and applicable laws and regulations, except
where such failure to comply or to receive waivers, either individually or in
the aggregate, would not have a Material Adverse Effect on OC Financial, the
insurance or guarantee is in full force and effect with respect to each such
Loan, and to OC Financial's knowledge, there does not exist any event or
condition which, but for the passage of time or the giving of notice or both,
can result in a revocation of any such insurance or guarantee or constitute
adequate grounds for the applicable Insurer to refuse to provide insurance or
guarantee payments thereunder.
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3.30 PROPERTIES. All real and personal property owned by OC Financial and
its Subsidiaries or presently used by it in their businesses is in an adequate
condition (ordinary wear and tear excepted) and is sufficient to carry on its
business in the ordinary course of business consistent with its past practices.
OC Financial and its Subsidiaries have good and marketable title free and clear
of all liens to all of the material properties and assets, real and personal,
reflected on the balance sheet of OC Financial as of September 30, 2007 included
in OC Financial's Reports or acquired after such date, other than properties
sold by OC Financial in the ordinary course of business, except (i) liens for
current taxes and assessments not yet due or payable (ii) pledges to secure
deposits and other liens incurred in the ordinary course of its banking
business, (iii) such imperfections of title, easements and encumbrances, if any,
as are not material in character, amount or extent and (iv) as reflected on the
balance sheet of OC Financial as of September 30, 2007 detailed and included in
OC Financial's Reports. All real and personal property which is material to OC
Financial or any of its Subsidiaries' businesses and leased or licensed by OC
Financial or its Subsidiaries is held pursuant to leases or licenses which are
valid and enforceable in accordance with their respective terms and such leases
will not terminate or lapse prior to the Effective Time.
3.31 LABOR AND EMPLOYMENT MATTERS. Except as set forth in SCHEDULE 3.31
of the OC Financial Disclosure Schedules, neither OC Financial nor its
Subsidiaries is or has ever been a party to, or is or has ever been bound by,
any collective bargaining agreement, contract, or other agreement or
understanding with a labor union or labor organization with respect to its
employees, nor is OC Financial or its Subsidiaries the subject of any proceeding
asserting that it has committed an unfair labor practice or seeking to compel it
or any such Subsidiary to bargain with any labor organization as to wages and
conditions of employment, nor is the management of OC Financial or any of its
Subsidiaries aware of any strike, other labor dispute, organizational effort or
other activity taken with a view toward unionization involving OC Financial or
its Subsidiaries pending or threatened. Except as set forth in SCHEDULE 3.31 of
the OC Financial Disclosure Schedules, OC Financial and its Subsidiaries are now
and since April 1, 2005 have been in compliance with all applicable laws,
executive orders, rules and regulations regarding employees and independent
contractors, including without limitation all applicable laws, executive orders,
rules and regulations relating to employment, compensation, working conditions,
classification as employees, employment practices, leave, safety, affirmative
action, applicant tracking, discrimination, harassment, retaliation,
whistleblowing, immigration, lay offs, notice regarding lay offs, labor
relations, payroll practices, wages, and hours of work. Except as set forth in
SCHEDULE 3.31 of the OC Financial Disclosure Schedules, OC Financial and its
Subsidiaries are now and since April 1, 2005 have been in material compliance
with all applicable employment tax laws.
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3.32 TERMINATION BENEFITS. SCHEDULE 3.32 of the OC Financial Disclosure
Schedules contains a complete and accurate schedule showing as of the date of
this Agreement the monetary amounts payable (or a formula for any such monetary
payment if the amount cannot be calculated as of the date hereof) as a result of
entering into this Agreement or otherwise completing the transactions
contemplated hereby, subject to a determination of the market value, and
identifying the in-kind benefits due under the Specified Compensation and
Benefit Programs (as defined herein) for each Named Individual (as defined
herein) individually. If a formula is provided by OC Financial on SCHEDULE 3.32
of the OC Financial Disclosure Schedules on the date hereof, then the actual
amounts payable to Named Individuals as a result of entering into this Agreement
or otherwise completing the transactions contemplated hereby shall be updated by
OC Financial and provided on the Closing Date. For purposes hereof, "Specified
Compensation and Benefit Programs" shall include all employment agreements,
change in control agreements, severance or special termination agreements,
severance plans, pension, retirement or deferred compensation plans for
non-employee directors, supplemental executive retirement programs, tax
indemnification agreements, outplacement programs, cash bonus programs, stock
appreciation right, phantom stock or stock unit plan, and health, life,
disability and other insurance or welfare plans, but shall not include any
tax-qualified pension, profit-sharing or employee stock ownership plan, amounts
payable for unused vacation time or COBRA. For purposes hereof, "Named
Individual" shall include each non-employee director of OC Financial or, if
applicable, its Subsidiaries and any officer or employee of OC Financial or, if
applicable, its Subsidiaries.
3.33 DEPOSITS. Except as set forth in SCHEDULE 3.33 of the OC Financial
Disclosure Schedules, none of the deposits of OC Bank is a "brokered" deposit as
defined in 12 C.F.R. Part 337.
3.34 REQUIRED VOTE; ANTITAKEOVER PROVISIONS INAPPLICABLE. The affirmative
vote of the holders of a majority of the issued and outstanding shares of OC
Financial is necessary to approve this Agreement and the Merger on behalf of OC
Financial. No other vote of the stockholders of OC Financial or any Subsidiary
is required by law, the OC Financial Articles of Incorporation and Bylaws or
otherwise to approve this Agreement and the Merger. OC Financial and its
Subsidiaries have taken all actions required to exempt First Place and the
Agreement from any provisions of an antitakeover nature in their Articles of
Incorporation and Bylaws and any other governing documents and the provisions of
any federal or state "antitakeover," "fair price," "moratorium," "control share
acquisition" or similar laws or regulations. OC Financial does not have in place
any "poison pill" or other type of stockholder rights plans, agreement or
arrangement.
3.35 TRANSACTIONS WITH AFFILIATES. All "covered transactions" between OC
Financial and its Subsidiaries and an "affiliate" within the meaning of Sections
23A and 23B of the Federal Reserve Act and the regulations thereunder have been
in compliance with such provisions.
3.36 INSURANCE. Except as set forth in SCHEDULE 3.36 of the OC Financial
Disclosure Schedules, OC Financial and its Subsidiaries are presently insured,
and since April 1, 2005, have been insured, for reasonable amounts with
financially sound and reputable insurance companies, against such risks as
companies engaged in a similar business would, in accordance with good business
practice, customarily be insured. All of the insurance policies and bonds
maintained by OC Financial and its Subsidiaries are in full force and effect, OC
Financial and its Subsidiaries are not in default thereunder and all material
claims thereunder have been filed in due and timely fashion.
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3.37 INDEMNIFICATION. Except as set forth in SCHEDULE 3.37(A) of the OC
Financial Disclosure Schedules, and except as provided in OC Financial's
employment agreements, or the Articles of Incorporation or Bylaws of OC
Financial, neither OC Financial nor its Subsidiaries is a party to any
indemnification agreement with any of its present or future directors, officers,
employees, agents or other persons who serve or served in any other capacity
with any other enterprise at the request of OC Financial or any of its
Subsidiaries (a "Covered Person"), and, except as set forth in SCHEDULE 3.37(B)
of the OC Financial Disclosure Schedules, there are no claims for which any
Covered Person would be entitled to indemnification under the Articles of
Incorporation or Bylaws of OC Financial or any Subsidiary of OC Financial,
applicable law, regulation or any indemnification agreement.
3.38 VOTING AGREEMENTS. The OC Financial directors and officers, as set
forth in SCHEDULE 3.38 of the OC Financial Disclosure Schedules, have entered
into a voting agreement ("Voting Agreement"), the form of which is attached as
ANNEX B, hereto.
3.39 CRA RATING. Each of the Subsidiaries or affiliates of OC Financial
that is an insured depository institution was rated "Satisfactory" or
"Outstanding" following its most recent Community Reinvestment Act examination
by the regulatory agency responsible for its supervision. Neither OC Financial
nor its Subsidiaries have received notice of and has knowledge of any planned or
threatened objection by any community group to the transactions contemplated
hereby.
3.40 DISCLOSURE. The representations and warranties contained in this
Article III hereof do not contain any untrue statement of a material fact or
omit to state any material fact necessary in order to make the statements and
information contained in this Article III hereof not misleading. There is no
fact known to OC Financial that has not been disclosed herein or in any other
agreement, document or written statement furnished by OC Financial to First
Place or its counsel, accountants or other service professional in connection
with the transactions contemplated hereby, which has or is reasonably likely to
have a Material Adverse Effect on the Merger or the transactions contemplated by
this Agreement.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF FIRST PLACE
Prior to the date hereof, First Place has delivered to OC Financial a
schedule setting forth certain information, the disclosure of which, is
necessary or appropriate either in response to an express disclosure requirement
contained in a provision of this Agreement or as an exception to one or more
representations or warranties contained in Article IV hereof or to one or more
of its covenants contained in Article V hereof or additional agreements in
Article VI hereof ("First Place Disclosure Schedules"). First Place represents
and warrants to OC Financial that each of the following representations and
warranties in this Article IV of this Agreement, which include and incorporate
the exceptions set forth on the First Place Disclosure Schedules, are true and
correct as of the date of this Agreement and as of the Closing Date, except to
the extent such representations and warranties expressly are made as of specific
date and time (in which case such representations and warranties will be true
and correct as of such date and time):
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4.1 CORPORATE ORGANIZATION.
(a) First Place is a corporation duly organized, validly existing
and in good standing under the laws of the State of Delaware. First Place 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 a
Material Adverse Effect on First Place. First Place is duly registered as a
unitary savings and loan holding company under the HOLA. The Certificate of
Incorporation and Bylaws of First Place, copies of which have previously been
made available to OC Financial, are true, complete and correct copies of such
documents as in effect as of the date of this Agreement.
(b) The Bank is a federal savings association that is duly
organized and validly existing under the laws of the United States of America
and the rules and regulations of the OTS. The Bank has in effect all federal,
state, local and foreign governmental authorizations necessary for it to own or
lease its properties and assets and to carry on its business as now conducted.
The deposit accounts of the Bank are insured by the FDIC through the DIF to the
fullest extent permitted by law, and all premiums and assessments required in
connection therewith have been paid by the Bank. Each of First Place's other
Subsidiaries is duly organized, validly existing and in good standing under the
laws of the jurisdiction of its incorporation. Each Subsidiary of First Place
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 a
Material Adverse Effect on First Place. The governing documents of each
Subsidiary of First Place, copies of which have previously been made available
to OC Financial, are true, complete and correct copies of such documents as in
effect as of the date of this Agreement.
(c) The minute books of First Place and each of its Subsidiaries
contain true, complete and accurate records in all material respects of all
meetings and other corporate actions held or taken since December 31, 2005 of
their respective stockholders and boards of directors (including committees of
their respective boards of directors). First Place has made available to OC
Financial correct and complete copies of all minutes of the board of directors
of OC Financial and its Subsidiaries since December 31, 2005.
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4.2 CAPITALIZATION.
(a) As of the date of this Agreement, the authorized capital stock
of First Place consists of 33,000,000 shares of First Place Common Stock and
3,000,000 shares of preferred stock, par value $.01 per share ("First Place
Preferred Stock"). As of the date of this Agreement, there were 18,114,673
shares of First Place Common Stock and no shares of First Place Preferred Stock
issued and outstanding, and 1,698,644 shares of First Place Common Stock held in
First Place's treasury. As of the date of this Agreement, no shares of First
Place Common Stock or First Place Preferred Stock were reserved for issuance,
except that 975,632 shares of First Place Common Stock were reserved for
issuance upon the exercise of stock options pursuant to First Place Financial
Corp. 1999 Incentive Plan and the First Place Financial Corp. 2004 Incentive
Plan (the "First Place Stock Plans"). All of the issued and outstanding shares
of First Place 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. Except for the stock options set
forth above, First Place 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 First Place
Common Stock or First Place Preferred Stock or any other equity securities of
First Place or any securities representing the right to purchase or otherwise
receive any shares of First Place Common Stock or First Place Preferred Stock.
The shares of First Place 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.
(b) SCHEDULE 4.2(B) of the First Place Disclosure Schedules sets
forth a true and correct list of all of First Place Subsidiaries as of the date
of this Agreement. Except as set forth in SCHEDULE 4.2(B) of the First Place
Disclosure Schedules, First Place owns, directly or indirectly, all of the
issued and outstanding shares of capital stock of each of the Subsidiaries of
First Place, free and clear of all liens, charges, encumbrances and security
interests whatsoever, and all of such shares are duly authorized and validly
issued and are fully paid, nonassessable and free of preemptive rights. No
Subsidiary of First Place has or is bound by any outstanding subscriptions,
options, warrants, calls, commitments or agreements of any character with any
party that is not a direct or indirect Subsidiary of First Place calling for the
purchase or issuance of any shares of capital stock or any other equity security
of such Subsidiary or any securities representing the right to purchase or
otherwise receive any shares of capital stock or any other equity security of
such Subsidiary.
4.3 AUTHORITY; NO VIOLATION.
(a) First Place has full corporate power and authority to execute,
deliver and perform its obligations under this Agreement and to consummate the
transactions contemplated hereby. The execution and delivery of this Agreement
and the consummation of the transactions contemplated hereby have been duly and
validly approved by the Board of Directors of First Place. Except for action to
be taken to complete the Subsidiary Merger, no other corporate proceedings on
the part of First Place are necessary to approve the Agreement and to consummate
the transactions contemplated hereby. This Agreement has been duly and validly
executed and delivered by First Place and (assuming due authorization, execution
and delivery by OC Financial) constitutes a valid and binding obligation of
First Place, enforceable against First Place 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,
reorganization, moratorium, fraudulent transfer and similar laws affecting
creditors' rights and remedies generally.
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(b) The Bank has full corporate power and authority to execute,
deliver and perform its obligations under the Bank Merger Agreement and to
consummate the Subsidiary Merger contemplated thereby. The execution and
delivery of the Bank Merger Agreement and the consummation of the transactions
contemplated thereby have been duly and validly approved by the board of
directors of the Bank and approved by the sole stockholder of the Bank. No other
corporate proceedings on the part of the Bank will be necessary to consummate
the transactions contemplated by the Bank Merger Agreement. The Bank Merger
Agreement has been duly and validly executed and delivered by the Bank and will
(assuming due authorization, execution and delivery by OC Bank) constitutes a
valid and binding obligation of the Bank, enforceable against the Bank 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, reorganization, receivership, conservatorship,
moratorium, fraudulent transfer and similar laws affecting creditors' rights and
remedies generally.
(c) Except as set forth in SCHEDULE 4.3(C) of the First Place
Disclosure Schedules, neither the execution and delivery of this Agreement by
First Place or the Bank Merger Agreement by the Bank, nor the consummation by
First Place or the Bank, as the case may be, of the transactions contemplated
hereby or thereby, nor compliance by First Place or the Bank, as the case may
be, with any of the terms or provisions hereof or thereof, will (i) violate any
provision of the Certificate of Incorporation or Bylaws of First Place, or the
Certificate of Incorporation or Bylaws or similar governing documents of any of
its Subsidiaries or (ii) assuming that the consents and approvals referred to in
Section 4.4 hereof are duly obtained, (x) violate any statute, code, ordinance,
rule, regulation, judgment, order, writ, decree or injunction applicable to
First Place 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, result in the obligation to sell or result in the
creation of any lien, pledge, security interest, charge or other encumbrance
upon any of the respective properties or assets of First Place 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 First Place 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 for any violation, conflict, breach, default,
acceleration, termination, modification or cancellation which, individually or
in the aggregate, would not have a Material Adverse Effect on First Place or
materially impact the terms and conditions or transactions contemplated hereby.
4.4 CONSENTS AND APPROVALS. Except for (a) the filing of applications
with the OTS and approval or non-objection of such applications by the OTS and
any other Governmental Entity, (b) the filing with the SEC of the S-4, (c) the
filing of the Articles of Merger with the SDAT and the Certificate of Merger
31
with the Delaware Secretary of State, (d) such filings and approvals as are
required to be made or obtained under the securities or "Blue Sky" laws of
various states in connection with the issuance of the shares of First Place
Common Stock pursuant to this Agreement, (e) the approval by the NASDAQ Stock
Market of the listing of the additional shares of First Place Common Stock on
the NASDAQ Global Select Market to be issued pursuant to Article II hereof, and
(f) such filings, authorizations or approvals as may be set forth in SCHEDULE
4.4 of the First Place Disclosure Schedules, no consents or approvals of or
filings or registrations with any Governmental Entity or with any third party
are necessary in connection with (1) the execution and delivery by First Place
of this Agreement and (2) the consummation by First Place of the Merger and the
other transactions contemplated hereby.
4.5 REPORTS. First Place 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
June 30, 2005 with any Regulatory Agency, and all other material reports and
statements required to be filed by them since June 30, 2005, including, without
limitation, any report or statement required to be filed pursuant to the laws,
rules or regulations of the United States, the OTS, the FDIC, any State
Regulator or any SRO, and have paid all fees and assessments due and payable in
connection therewith. Except for normal examinations conducted by a Regulatory
Agency in the regular course of the business of First Place and its
Subsidiaries, and, except as set forth in SCHEDULE 4.5 of the First Place
Disclosure Schedules, no Regulatory Agency has initiated any proceeding or, to
First Place's knowledge, investigation into the business or operations of First
Place or any of its Subsidiaries since June 30, 2005. There is no unresolved
material violation, criticism, or exception by any Regulatory Agency with
respect to any report or statement relating to any examinations of First Place
or any of its Subsidiaries, which has been communicated to First Place or any of
its Subsidiaries.
4.6 FINANCIAL STATEMENTS. First Place has previously delivered to OC
Financial copies of (i) the consolidated balance sheets of First Place and its
Subsidiaries at June 30 for the fiscal years ended 2007 and 2006, and the
related consolidated statements of income, changes in stockholders' equity and
cash flows for First Place for the fiscal years ended June 30, 2006 through
2007, in each case accompanied by the audit report of Crowe Chizek and Company
LLC, independent public accountants with respect to First Place and its
Subsidiaries, and (ii) the unaudited consolidated balance sheet of First Place
and its Subsidiaries as of December 31, 2007 and 2006 and the related unaudited
consolidated statements of income, changes in stockholders' equity and cash
flows for the six month periods then ended as reported in First Place's
Quarterly Report on Form 10-Q for the period ended December 31, 2007 and filed
with the SEC under the Exchange Act. The December 31, 2007 consolidated balance
sheet of First Place (including the related notes, where applicable) fairly
presents the consolidated financial position of First Place and its Subsidiaries
as of the date thereof, and the other financial statements referred to in this
Section 4.6 hereof (including the related notes, where applicable) fairly
present, and the financial statements referred to in Section 6.14 hereof will
fairly present (subject, in the case of the unaudited statements, to recurring
audit adjustments normal in nature and amount and the absence of footnotes), the
results of the consolidated operations and changes in stockholders' equity and
consolidated financial position of First Place and its Subsidiaries for the
32
respective fiscal periods or as of the respective dates therein set forth; each
of such statements (including the related notes, where applicable) comply, and
the financial statements referred to in Section 6.14 hereof 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
statements (including the related notes, where applicable) has been, and the
financial statements referred to in Section 6.14 hereof will be, prepared in
accordance with GAAP consistently applied during the periods involved, except as
indicated in the notes thereto or, in the case of unaudited statements, as
permitted by Form 10-Q. The books and records of First Place 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. Neither First Place nor any Subsidiary of First
Place, 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 or the Bank Merger Agreement, except that First Place has engaged, and
will pay a fee or commission to, Sandler O'Neill Partners, LP ("Sandler") in
accordance with the terms of a letter agreement between Sandler and First Place.
4.8 ABSENCE OF CERTAIN CHANGES OR EVENTS.
(a) Except as may be set forth in SCHEDULE 4.8(A) of the First
Place Disclosure Schedules, or as disclosed in First Place's Quarterly Report on
Form 10-Q for the quarter ended December 31, 2007 (a true, complete and correct
copy of which has previously been delivered to OC Financial), since December 31,
2007, (i) neither First Place nor any of its Subsidiaries has incurred any
material liability, except in the ordinary course of their business consistent
with their past practices, and (ii) no event has occurred which has caused, or
is reasonably likely to cause, individually or in the aggregate, a Material
Adverse Effect on First Place.
(b) Except as set forth in SCHEDULE 4.8(B) of the First Place
Disclosure Schedules, since September 30, 2007, First Place and its Subsidiaries
have carried on their respective businesses in the ordinary course consistent
with their past practices.
4.9 LEGAL PROCEEDINGS.
(a) Except as set forth in SCHEDULE 4.9(A) of the First Place
Disclosure Schedules, neither First Place nor any of its Subsidiaries is a party
to any and there are no pending or to First Place's knowledge, threatened,
legal, administrative, arbitral or other proceedings, claims, actions or
governmental or regulatory investigations of any nature against First Place or
any of its Subsidiaries or challenging the validity or propriety of the
transactions contemplated by this Agreement or the Bank Merger Agreement as to
which there is a reasonable probability of an adverse determination and which,
if adversely determined, would, individually or in the aggregate, have or be
reasonably likely to have a Material Adverse Effect on First Place.
33
(b) There is no injunction, order, judgment, decree, or regulatory
restriction imposed upon First Place, any of its Subsidiaries or the assets of
First Place or any of its Subsidiaries that has had, or could reasonably be
expected to have, a Material Adverse Effect on First Place.
(c) Except as set forth in SCHEDULE 4.9(C) of the First Place
Disclosure Schedules, to First Place's knowledge there are no actions, suits,
claims, proceedings, investigations or assessments of any kind pending, or to
the best of First Place's knowledge, threatened against any of the directors or
officers of First Place or its Subsidiaries in their capacities as such, and no
director or officer of First Place or its Subsidiaries currently is being
indemnified or seeking to be indemnified by First Place or its Subsidiaries
pursuant to applicable law or the Certification of Incorporation, charter,
bylaws or other similar governing documents.
4.10 TAXES. Except as set forth in SCHEDULE 4.10 of the First Place
Disclosure Schedules, each of First Place and its Subsidiaries has since January
1, 2004 (i) duly and timely filed or will duly and timely file (including
applicable extensions granted without penalty) all Tax Returns required to be
filed at or prior to the Effective Time, and such Tax Returns which have
heretofore been filed are, and those to be hereinafter filed will be, complete
and accurate in all material respects, and (ii) paid in full or have made
adequate provision for on the financial statements of First Place (in accordance
with GAAP) all Taxes and will pay in full or make adequate provision for all
Taxes. There are no material liens for Taxes upon the assets of either First
Place or its Subsidiaries except for statutory liens for current Taxes not yet
due. Except as set forth in SCHEDULE 4.10 of the First Place Disclosure
Schedules, since January 1, 2004, neither First Place nor any of its
Subsidiaries has requested any extension of time within which to file any Tax
Returns in respect of any fiscal year which have not since been filed and no
request for waivers of the time to assess any Taxes are pending or outstanding.
Except as set forth on SCHEDULE 4.10 of the First Place Disclosure Schedules,
neither First Place nor any of its Subsidiaries is presently subject to any
audits, investigations or proceeding by any tax authority, and since January 1,
2004, neither First Place nor any of its Subsidiaries has received any notice
from any tax authority that it intends to conduct any such audit, investigation
or proceeding. Except as set forth in SCHEDULE 4.10 of the First Place
Disclosure Schedules, since January 1, 2004, no claim has been made by a tax
authority in a jurisdiction where First Place or any of its Subsidiaries does
not file a tax return that First Place or any of its Subsidiaries is or may be
subject to taxation in the jurisdiction.
4.11 SEC REPORTS. First Place has previously made available to OC
Financial an accurate and complete copy of each (a) final registration
statement, prospectus, report (including Forms 10-K, 10-K and 8-K), schedule and
definitive proxy statement filed since June 30, 2005 by First Place with the SEC
pursuant to the Securities Act or the Exchange Act (the "First Place Reports")
and (b) communication mailed by First Place to its stockholders since June 30,
2005, and no such registration statement, prospectus, report, schedule, proxy
statement or communication 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, except that information as of a later date shall
be deemed to modify information as of an earlier date. First Place has timely
filed all First Place Reports and other documents required to be filed by it
under the Securities Act and the Exchange Act, and, as of their respective
dates, all First Place Reports complied in all material respects with the
published rules and regulations of the SEC with respect thereto.
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4.12 FIRST PLACE INFORMATION. The information relating to First Place and
its Subsidiaries to be contained in, or incorporated by reference in, the S-4
(except for such portions thereof that relate only to OC Financial as
represented in Section 3.13 hereof), or in any other document filed with any
other regulatory agency 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 S-4 (except for such portions thereof that relate only to OC
Financial or any of its Subsidiaries as represented in Section 3.13 hereof) will
comply in all material respects with the provisions of the Securities Act and
Exchange Act and the rules and regulations thereunder and the Exchange Act and
the rules and regulations thereunder.
4.13 OWNERSHIP OF OC FINANCIAL COMMON STOCK. None of First Place or any
of its Subsidiaries, (i) beneficially own, directly or indirectly, or (ii) is a
party to any agreement, arrangement or understanding for the purpose of
acquiring, holding, voting or disposing of, in each case, any shares of capital
stock of OC Financial.
4.14 COMPLIANCE WITH APPLICABLE LAW. First Place and each of its
Subsidiaries: (i) is in material compliance with all applicable federal, state,
local and foreign statutes, laws, regulations, ordinances, rules, judgments,
orders or decrees applicable thereto or to the employees conducting such
businesses, including, without limitation, the Equal Credit Opportunity Act of
1974 and the regulations promulgated thereunder, the Truth in Lending Act and
Regulation Z promulgated thereunder, the Fair Housing Act, the Community
Reinvestment Act, the Home Mortgage Disclosure Act, the Real Estate Settlement
Procedures Act, the Fair Debt Collection Practices Act, the Bank Secrecy Act,
the PATRIOT Act and all other applicable fair lending laws and other laws
relating to discriminatory business practices; (ii) holds all material licenses,
franchises, permits and authorizations necessary for the lawful conduct of their
respective businesses under and pursuant to all, and are in compliance with and
are not, to its knowledge, in default in any respect under any such licenses,
franchises, permits and authorizations under applicable law, statute, order,
rule, regulation, policy and/or guideline of any Governmental Entity relating to
First Place or any of its Subsidiaries, except where the failure to hold such
license, franchise, permit or authorization or such non-compliance or default
would not, individually or in the aggregate, have, or be reasonably likely to
have, a Material Adverse Effect on First Place; and (iii) neither First Place
nor any of its Subsidiaries knows of, or has received notice of, any material
violations of any of the above since December 31, 2001.
4.15 AGREEMENTS WITH REGULATORY AGENCIES. Except as set forth in SCHEDULE
4.15 of the First Place Disclosure Schedules, neither First Place 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 is a recipient of
any supervisory letter from, or has adopted any board resolutions at the request
of (each, whether or not set forth in SCHEDULE 4.15 of First Place Disclosure
35
Schedules, a "First Place Regulatory Agreement"), any Regulatory Agency or other
Governmental Entity that restricts the conduct of its business or that in any
manner relates to its capital adequacy, its credit policies, its management or
its business, nor has First Place or any of its Subsidiaries been advised by any
Regulatory Agency or other Governmental Entity that it is considering issuing or
requesting any Regulatory Agreement.
4.16 UNDISCLOSED LIABILITIES. Except (a) as set forth in SCHEDULE 4.16 of
the First Place Disclosure Schedules, (b) for those liabilities that are fully
reflected or reserved against on the consolidated balance sheet of First Place
included in its Form 10-Q (including, but not limited to any footnotes contained
therein) for the period ended December 31, 2007 and (c) for liabilities incurred
in the ordinary course of business consistent with past practice since December
31, 2007 that, either alone or when combined with all similar liabilities, have
not had, and could not reasonably be expected to have, a Material Adverse Effect
on First Place, neither First Place 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).
4.17 LOAN PORTFOLIO.
(a) Except as set forth in SCHEDULE 4.17(A) of the First Place
Disclosure Schedules, in First Place's reasonable judgment, the allowance for
loan losses reflected in First Place's audited statement of financial condition
at June 30, 2007 was, and the allowance for loan losses shown on the balance
sheets in First Place's filings with the SEC for periods ending after June 30,
2007 have been and will be, adequate in all material respects, as of the dates
thereof, under GAAP, and no Regulatory Agencies have required or requested First
Place to increase the allowance for loan losses for such periods. The Bank's
allowance for loan losses is, and shall be as of the Effective Time, in
compliance with standards established by applicable Governmental Entities and
the Financial Accounting Standards Board and is and shall be adequate under all
such standards.
(b) Each loan reflected as an asset in First Place's filings with
the SEC (i) is evidenced by notes, agreements or other evidences of indebtedness
which are true, genuine and correct in all material respects, (ii) to the extent
secured, has been secured by valid liens and security interests which have been
perfected, and (iii) is the legal, valid and binding obligation of the obligor
named therein, enforceable in accordance with its terms, subject to bankruptcy,
insolvency, fraudulent conveyance and other laws of general applicability
relating to or affecting creditors' rights and to general equity principles, in
each case other than loans as to which the failure to satisfy the foregoing
standards would not have a Material Adverse Effect on First Place.
4.18 TRANSACTIONS WITH AFFILIATES. All "covered transactions" between
First Place and its Subsidiaries and an "affiliate" within the meaning of
Sections 23A and 23B of the Federal Reserve Act and the regulations thereunder
have been in compliance with such provisions.
4.19 INSURANCE. First Place and its Subsidiaries are presently insured,
and since June 30, 2004, have been insured, for reasonable amounts with
financially sound and reputable insurance companies, against such risks as
companies engaged in a similar business would, in accordance with good business
practice, customarily be insured. All of the insurance policies and bonds
maintained by First Place and its Subsidiaries are in full force and effect,
First Place and its Subsidiaries are not in default thereunder and all material
claims thereunder have been filed in due and timely fashion.
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4.20 CRA RATING. Each of the Subsidiaries or affiliates of First Place
that is an insured depository institution was rated "Satisfactory" or
"Outstanding" following its most recent Community Reinvestment Act examination
by the regulatory agency responsible for its supervision. Neither First Place
nor its Subsidiaries have received notice of and has knowledge of any planned or
threatened objection by any community group to the transactions contemplated
hereby.
4.21 EMPLOYEE BENEFIT MATTERS.
(a) First Place has heretofore delivered to OC Financial true and
complete copies of each employee benefit plan, as the term is defined in Section
3 of the Employee Retirement Income Security Act of 1974, as amended ("ERISA"),
and any other employee benefit arrangement or agreement that is sponsored,
maintained or contributed to, or required to be contributed to, as of the date
of this Agreement (collectively referred to as the "Plans") and related trust
instruments and all amendments thereto, the most recent summary plan description
and summaries of material modifications thereto, underlying insurance contracts
and all other related documents thereto, including, but not limited to (i) the
actuarial report for any Plan (if applicable) for the most recent year, (ii) the
most recent determination letter from the Internal Revenue Service ("IRS") (if
applicable) for any Plan, (iii) the most recent year's annual reports (Form
5500), together with all schedules, as required, filed with the IRS or
Department of Labor ("DOL") for any Plan, and (iv) any financial statements and
opinions required by Section 103(e)(3) of ERISA with respect to each Plan.
(b) Each of the Plans has been operated and administered in all
material respects in accordance with its terms and applicable law, 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 either (1) has
received a favorable determination letter from the IRS, or (2) is or will be the
subject of an application for a favorable determination letter, and First Place
is not aware of any circumstances likely to result in the revocation or denial
of any such favorable determination letter, (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
liability under Title IV of ERISA has been incurred by First Place, its
Subsidiaries or any ERISA Affiliate that has not been satisfied in full, and no
condition exists that presents a material risk to First Place, its Subsidiaries
or a First Place ERISA Affiliate of incurring a material liability thereunder,
(v) no Plan is a "multiemployer pension plan, as such term is defined in Section
3(37) of ERISA, (vi) all contributions or other amounts payable by First Place,
its Subsidiaries or any ERISA Affiliates 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, and (vii) neither First
Place, its Subsidiaries nor any ERISA Affiliate has engaged in a transaction in
connection with which First Place, its Subsidiaries or any ERISA Affiliate could
be subject to either a civil penalty assessed pursuant to Section 409 or 502(i)
of ERISA or a tax imposed pursuant to Section 4975 or 4976 of the Code.
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4.22 DISCLOSURE. The representations and warranties contained in this
Article IV hereof do not contain any untrue statement of a material fact or omit
to state any material fact necessary in order to make the statements and
information contained in this Article IV hereof not misleading. There is no fact
known to First Place that has not been disclosed herein or in any other
agreement, document or written statement furnished by First Place to OC
Financial or its counsel, accountants or other service professional in
connection with the transactions contemplated hereby, which has or is reasonably
likely to have a Material Adverse Effect on the Merger or the transactions
contemplated by this Agreement.
4.23 REQUIRED VOTE. No Vote of the stockholders of First Place is
required by law, First Place's Certificate of Incorporation or Bylaws or
otherwise to approve this Agreement and the Merger.
4.24 APPROVALS. As of the date of this Agreement, First Place knows of no
reason why all regulatory approvals required for the consummation of the
transactions contemplated hereby (including, without limitation, the Merger)
should not be obtained without the imposition of a Burdensome Condition (as
defined in Section 7.1(g) hereof).
ARTICLE V
COVENANTS RELATING TO CONDUCT OF BUSINESS
5.1 FORBEARANCES OF OC FINANCIAL. From the date hereof until the
Effective Time, except as expressly contemplated or permitted by this Agreement
or as expressly set forth on a schedule under this Article V ("Previously
Disclosed"), without the prior written consent of First Place, which shall not
be unreasonably withheld, OC Financial will not and will cause each of its
Subsidiaries not to:
(a) ORDINARY COURSE. Conduct its business OTHER THAN in the
ordinary and usual course of business consistent with past practice or fail to
use reasonable best efforts to preserve its business organization, keep
available the present services of its employees and preserve for itself and
First Place the goodwill of the customers of OC Financial and its Subsidiaries
and others with whom business relations exist.
(b) CAPITAL STOCK. Issue, sell or otherwise permit to become
outstanding, or authorize the creation of, any additional shares of any equity
or debt securities or any rights or (ii) permit any additional shares of equity
securities to become subject to grants of employee, director or consultant stock
options or other rights.
(c) DIVIDENDS; ETC. (i) Make, declare, pay or set aside for
payment any dividend on or in respect of, or declare or make any distribution on
any shares of OC Financial Common Stock or (ii) directly or indirectly adjust,
split, combine, redeem, reclassify, purchase or otherwise acquire, any shares of
its capital stock or (iii) declare any special dividend.
38
(d) COMPENSATION; EMPLOYMENT AGREEMENTS; ETC. Enter into or amend
or renew any employment, consulting, severance or similar agreements or
arrangements with any director, officer or employee of OC Financial or grant any
salary or wage increase or increase any employee benefit (including incentive or
bonus payments), except (i) for normal individual increases in compensation to
employees in the ordinary course of business consistent with past practice,
provided that no such increase shall result in an annual adjustment of more than
3.5% (ii) for other changes that are required by applicable law, and (iii) to
satisfy contractual obligations existing as of the date hereof and set forth in
SCHEDULE 5.1(D) of the OC Financial Disclosure Schedules.
(e) HIRING AND TERMINATIONS. Have any layoffs or work force
reductions or, except in the ordinary course of business consistent with past
practice, otherwise terminate the employment of any employee. Hire any person as
an employee of OC Financial or its Subsidiaries or promote any employee, except
(i) to satisfy contractual obligations existing as of the date hereof and set
forth on SCHEDULE 5.1(E) of the OC Financial Disclosure Schedules and (ii)
persons hired to fill any vacancies arising after the date hereof and whose
employment is terminable at the will of OC Financial or its Subsidiaries other
than any person to be hired who would have a base salary, including any
guaranteed bonus or any similar bonus, considered on an annual basis of more
than $30,000 (and any vacancies in the positions that OC Financial or its
Subsidiaries intends to fill after the date hereof shall be done with the prior
advice, consultation and consent of First Place, which consent shall not be
unreasonably withheld).
(f) BENEFIT PLANS. (i) Other than making contributions to the OC
Financial 401(k) Plan not to exceed $30,000 in the aggregate for the 2008
calendar year (said $30,000 shall not include employee elective deferrals deemed
to be employer contributions), enter into, establish, adopt or amend, or make
any contributions to (except (i) as may be required by applicable law or (ii) to
satisfy contractual obligations existing as of the date hereof and set forth on
SCHEDULE 5.1(F) of the OC Financial Disclosure Schedules), any pension,
retirement, stock option, stock purchase, savings, profit sharing, deferred
compensation, consulting, bonus, group insurance or other employee benefit,
incentive or welfare contract, plan or arrangement, or any trust agreement (or
similar arrangement) related thereto, in respect of any director, officer or
employee of OC Financial or any Subsidiary or take any action, other than
contemplated by this Agreement, to accelerate the vesting or exercisability of
stock options, restricted stock or other compensation or benefits payable
thereunder; (ii) the OC Financial Employee Stock Ownership Plan (the "ESOP")
shall be terminated as of the Effective Time. The Merger consideration received
by the ESOP trustees with respect to the unallocated shares of OC Finance Common
Stock held by the ESOP shall be first applied by the ESOP trustees to the full
repayment of the ESOP loan. The remaining shares of First Place Common Stock and
cash received by the ESOP shall be allocated to the ESOP participants in
accordance with the terms of the ESOP and applicable laws as soon as practicable
after the Effective Time. In connection with the termination of the ESOP, OC
Financial shall promptly apply to the IRS for a favorable determination letter
39
on the tax-qualified status of the ESOP on terminations and any amendments made
to the ESOP in connection with its termination or otherwise, if such amendments
have not previously received a favorable determination letter from the IRS with
respect to their qualification under Code Section 401(a). Any amendments to the
ESOP requested by the IRS prior to the Effective Time shall be adopted by OC
Financial and any amendments requested by the IRS after the Effective Time shall
be promptly adopted by First Place. Any and all distributions from the ESOP
after its termination shall be made consistent with the aforementioned
determination letter from the IRS. Prior to the Effective Time, OC Financial
shall make contributions to, and payments on the loan of the ESOP consistent
with past practices on regularly scheduled payment dates.
(g) DISPOSITIONS. Sell, transfer, mortgage, pledge, encumber or
otherwise dispose of or discontinue any of its assets, deposits, business or
properties, including investment securities, loans and OREO.
(h) ACQUISITIONS. Acquire (other than by way of foreclosures,
repossessions or acquisitions of control in a bona fide fiduciary capacity or in
satisfaction of debts previously contracted in good faith, in each case in the
ordinary and usual course of business consistent with past practice) all or any
portion of the assets, business, deposits or properties of any other entity.
(i) CAPITAL EXPENDITURES. Make any capital expenditures other than
capital expenditures in the ordinary course of business consistent with past
practice in amounts exceeding $10,000.
(j) GOVERNING DOCUMENTS. Amend its Articles of Incorporation,
Bylaws or similar governing documents.
(k) ACCOUNTING METHODS. Implement or adopt any change in its
accounting principles, practices or methods, other than as may be required by
changes in laws or regulations or GAAP, except as contemplated in Section 6.8
hereof.
(l) CONTRACTS. Enter into, renew, terminate, permit automatic
renewal, amendment to or modification of any agreement for services to be
provided to OC Financial or any Subsidiary or any other contract that exceeds
$10,000 in value.
(m) CLAIMS. Enter into any settlement or similar agreement with
respect to any action, suit, proceeding, order or investigation to which OC
Financial or any Subsidiary is currently a party or becomes a party after the
date of this Agreement, which settlement, agreement or action involves payment
by OC Financial or any Subsidiary of an amount which exceeds $10,000 and/or
would impose any material restriction on the business of OC Financial or any
Subsidiary or otherwise have a Material Adverse Effect on OC Financial.
(n) BANKING OPERATIONS. Enter into any new material line of
business; implement, adopt or otherwise change its lending, investment,
underwriting, risk (including interest rate risk policies, procedures and
practices) and asset liability management and other material banking and
operating policies or other Policies and Practices (as defined in Section 6.8),
except as required by applicable law, regulation or policies imposed by any
Governmental Entity; or file any application or make any contract with respect
40
to branching or site location or branching or site relocation or fail to follow
its existing policies and practices with respect to managing their exposure to
interest rate risk or fail to use commercially reasonable means to avoid any
material increase in their aggregate exposure to interest rate risk.
(o) DERIVATIVES CONTRACTS. Enter into any structured transactions,
securities, arbitrage or hedging activity, including use of derivatives.
(p) INDEBTEDNESS. Incur any new indebtedness for borrowed money in
excess of $2,000,000 in the aggregate or assume, guarantee, endorse or otherwise
as an accommodation become responsible for the obligations of any other person,
other than in the ordinary course of business consistent with past practice.
(q) JUMBO CERTIFICATES OF DEPOSIT. Originate any certificate of
deposit in excess of $250,000 ("Jumbo CD") or reprice any existing Jumbo CD in
excess of the then current Federal Funds rate.
(r) INVESTMENT SECURITIES. Acquire (other than by way of
foreclosures or acquisitions in a bona fide fiduciary capacity or in
satisfaction of debts previously contracted in good faith, in each case in the
ordinary course of business consistent with past practice) any debt security or
equity investment other than federal funds or United States Government
securities or United States Government agency securities with a term of one (1)
year or less.
(s) LOANS. Make, purchase, renew or otherwise modify any loan,
loan commitment, letter of credit or other extension of credit (collectively,
"Loans") other than in the ordinary course of business, provided that any
commercial business loan with a principal balance in excess of $100,000 (whether
individually or in the aggregate), multi-family residential loan with a
principal balance in excess of $100,000 (whether individually or in the
aggregate), commercial real estate loan with a principal balance in excess of
$200,000 (whether individually or in the aggregate), single family owner
occupied loan with a principal balance in excess of $417,000 (whether
individually or in the aggregate and only if there is a concurrent loan
commitment to sell in the secondary market) or any other loan with a principal
balance in excess of $50,000 (whether individually or in the aggregate) cannot
be originated, purchased, renewed or modified without First Place's prior
written consent which shall be deemed given if a written objection thereto is
not received within two (2) business days after delivery of written notice
thereof. Purchase or commit to purchase any bulk loan portfolio. Originate,
purchase or otherwise acquire any automobile loans, except for loans that are
made with existing underwriting standards, they are originations and not
purchases and no such loans shall offer rates less than 5.99% per annum unless
approved by First Place. Originate, purchase or otherwise acquire any loan in
excess of $200,000 from any correspondent relationship. Authorize the use of any
pricing schedule for Loans without the prior review and approval of First Place
which approval/disapproval shall be provided within three (3) business days.
(t) INVESTMENTS IN REAL ESTATE. Make any investment or commitment
to invest in real estate or in any real estate development project (other than
by way of foreclosure or acquisitions in a bona fide fiduciary capacity or in
satisfaction of a debt previously contracted in good faith, in each case in the
41
ordinary course of business consistent with past practice). Foreclose on or take
a deed or title to any commercial real estate without first conducting a Phase I
environmental assessment of the property or foreclose on any commercial real
estate if such environmental assessment indicates the presence of a hazardous
substance (as defined in Section 3.23(e)) in amounts which, if such foreclosure
were to occur, would be a violation of applicable law or otherwise materially
reduce the value of the property.
(u) ADVERSE ACTIONS. (i) Take any action that would, or is
reasonably likely to, prevent or impede the Merger from qualifying as a
reorganization within the meaning of Section 368(a) of the Code or (ii) take any
action that is intended or is reasonably likely to result in (x) any of its
representations and warranties set forth in this Agreement being or becoming
untrue in any material respect at any time at or prior to the Effective Time,
(y) any of the conditions to the Merger set forth in Article VII hereof not
being satisfied or (z) a material violation of any provision of this Agreement
except as may be required by applicable law or regulation.
(v) BOARD MEMBERSHIP AND OFFICERS. Elect or appoint (i) any person
to the board of directors of OC Financial or any Subsidiary who is not a
director serving on the OC Financial or any Subsidiary board of directors as of
the date hereof, or (ii) any person to serve as an officer of OC Financial or
any Subsidiary who is not already serving in such position as of the date of
this Agreement, or (iii) any existing officer or director of OC Financial or any
Subsidiary to serve in a different capacity or position than such person holds
as of the date of this Agreement.
(w) TRANSACTIONS WITH AFFILIATES. Except pursuant to agreements or
arrangements in effect on the date hereof which are previously disclosed, pay,
lend or advance any amount to, or sell, transfer or lease any properties or
assets (real, personal or mixed, tangible or intangible) to, or enter into any
agreement or arrangement with, any of its officers or directors or any of their
immediate family members or any affiliates or associates (as such terms are
defined under the Exchange Act and the rules and regulations thereunder) of any
of its officers or directors other than compensation in the ordinary course of
business consistent with past practice.
(x) OC FINANCIAL ADVERTISING. Increase, reduce, diminish or
otherwise materially adversely affect the existing level, quality and frequency
of advertising, commercials and/or other promotional campaigns for OC Financial
and its Subsidiaries.
(y) BROAD COMMUNICATIONS. Issue any broadly distributed
communication of a general nature to its customers or employees (including,
without limitation, any general communications relating to benefits or
compensation in connection with or following the Merger), except for (i) written
or oral communications in the ordinary course of business that do not relate in
any manner to the Merger or (ii) written or oral communications about the Merger
consistent with information publicly available through approved press releases
(as provided for in Section 6.5) or through SEC or OTS regulatory filings.
42
(z) ACQUISITION OF ADMINISTRATIVE MATERIALS. Order, purchase or
otherwise acquire any catalogs, brochures, fliers, marketing materials,
letterhead, forms, office supplies, office materials, customer documentation or
other similar items of personal property, documents and records used or to be
used in the business that have the OC Financial or OC Bank logo, brand , name or
other identifying information specific to such entities or the business
conducted by such entities.
(aa) NO NEW SUBSIDIARIES. Neither OC Financial nor its Subsidiaries
will establish, acquire or otherwise create any new entity or otherwise enter
into any joint venture or other association or change, alter or modify the
business operations of any Subsidiary.
(bb) TAX RELATED PROVISIONS. Make any elections, or change current
elections, with respect to Taxes affecting OC Financial and its Subsidiaries
without prior written consent of First Place, which consent shall not be
unreasonably withheld.
(cc) COMMITMENTS. Enter into any contract with respect to, or
otherwise agree or commit to do, any of the foregoing.
5.2 FORBEARANCES OF FIRST PLACE. From the date hereof until the
Effective Time, except as expressly contemplated or permitted by this Agreement,
without the prior written consent of OC Financial, First Place will not, and
will cause each of its Subsidiaries not to:
(a) ADVERSE ACTIONS. (i) Take any action that would, or is
reasonably likely to, prevent or impede the Merger from qualifying as a
reorganization within the meaning of Section 368(a) of the Code or (ii) take any
action that is intended or its reasonably likely to result in (x) any of its
representations and warranties set forth in this Agreement being or becoming
untrue in any material respect at any time at or prior to the Effective Time,
except as may be required by applicable law or regulation, (y) any of the
conditions to the Merger that are set forth in Article VII hereof not being
materially satisfied, except as may be required by applicable law or regulation,
or (z) a material violation of any provision of this Agreement, except as may be
required by applicable law or regulation.
(b) GOVERNING DOCUMENTS. Amend its Certificate of Incorporation or
Bylaws, which as a direct result of such amendment materially and adversely
affects the economic value to be received by the holders of OC Financial Common
Stock.
(c) COMMITMENTS. Enter into any contract with respect to, or
otherwise agree or commit to do, any of the foregoing.
(d) DIVIDENDS. As to First Place only, declare or pay any
extraordinary or special dividends on or make any other extraordinary or special
distribution to its stockholders.
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ARTICLE VI
ADDITIONAL AGREEMENTS
6.1 REASONABLE BEST EFFORTS. Subject to the terms and conditions of this
Agreement, each of OC Financial, OC Bank, First Place and the Bank agrees to use
its reasonable best efforts in good faith to take, or cause to be taken, all
actions, and to do, or cause to be done, all things necessary, proper or
desirable, or advisable under applicable laws, so as to permit consummation of
the Merger and the Bank Merger Agreement as promptly as practicable and
otherwise to enable consummation of the Merger and the Bank Merger Agreement,
including the satisfaction of the conditions set forth in Article VII hereof,
and shall cooperate fully with the other Party hereto to that end. First Place
agrees to inform OC Financial promptly of the receipt of any Requisite
Regulatory Approvals.
6.2 STOCKHOLDER APPROVAL. OC Financial agrees to take, in accordance
with applicable law and its Articles of Incorporation and Bylaws, all action
necessary to convene as soon as reasonably practicable a special meeting of its
stockholders to consider and vote upon the approval of this Agreement, the Bank
Merger Agreement and any other matters required to be approved by OC Financial's
stockholders for consummation of the Merger and the transaction contemplated by
this Agreement (including any adjournment or postponement, the "OC Financial
Stockholder Meeting"). OC Financial shall hold the OC Financial Stockholder
Meeting by the later to occur of (i) 60 days after the date of this Agreement or
(ii) 35 days after the SEC has approved or cleared an S-4 filed in connection
with this transaction and such S-4 is effective. OC Financial agrees to cause
its Subsidiaries to take, in accordance with applicable law and their governing
documents, all action necessary to approve the Bank Merger Agreement and any
other matters contemplated thereby and by this Agreement. Other than the
election of directors and the ratification of the appointment of auditors,
except with the prior approval of First Place, no other matters shall be
submitted for the approval of OC Financial stockholders at the OC Financial
Stockholders Meeting. The OC Financial board of directors shall at all times
prior to and during such meeting recommend such approval and shall take all
reasonable lawful action to solicit such approval by its stockholders; provided
that nothing in this Agreement shall prevent the OC Financial board of directors
from withholding, withdrawing, amending or modifying its recommendation if the
OC Financial board of directors determines, after consultation with its outside
counsel and financial advisors, that such action is legally required in order
for the directors to comply with their fiduciary duties to the OC Financial
stockholders under applicable law; provided, further, that Section 6.7 hereof
shall govern the withholding, withdrawing, amending or modifying of such
recommendation in the circumstances described therein.
6.3 REGISTRATION STATEMENT.
(a) First Place agrees to prepare an S-4 or other applicable
registration statement to be filed by First Place with the SEC in connection
with the issuance of First Place Common Stock in the Merger (including the Proxy
Statement and other proxy solicitation materials of OC Financial constituting a
part thereof and all related documents). OC Financial shall promptly prepare and
furnish no later than 15 days after the date of this Agreement such information
relating to it and its directors, officers and stockholders, any description of
the business or any financial information as may be required under applicable
SEC rules and regulations in connection with the above referenced documents
44
based on its knowledge of and access to the information required for said
documents, and OC Financial, and its legal, financial and accounting advisors,
shall have the right to review and approve (which approval shall not be
unreasonably withheld or delayed) the S-4 prior to its filing. OC Financial
agrees to cooperate with First Place and First Place's counsel and accountants
in requesting and obtaining appropriate opinions, consents and letters from its
financial advisor and independent auditor in connection with the S-4 and the
Proxy Statement. Provided that OC Financial has cooperated as described above,
First Place agrees to file, or cause to be filed, the S-4 with the SEC as
promptly as reasonably practicable. Each of OC Financial and First Place agrees
to use its reasonable best efforts to cause the S-4 to be declared effective
under the Securities Act as promptly as reasonably practicable after the filing
thereof. First Place also agrees to use its reasonable best efforts to obtain
all necessary state securities law or "Blue Sky" permits and approvals required
to carry out the transactions contemplated by this Agreement. After the S-4 is
declared effective under the Securities Act, OC Financial shall promptly mail at
its expense the Proxy Statement to all of its stockholders.
(b) Each of OC Financial and First Place agrees that none of the
information supplied or to be supplied by it for inclusion or incorporation by
reference in (i) the S-4 shall, at the time the S-4 and each amendment or
supplement thereto, if any, becomes effective under the Securities Act, 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 therein not
misleading and (ii) the Proxy Statement and any amendment or supplement thereto
shall, at the date(s) of mailing to stockholders and at the time of the OC
Financial Stockholders Meeting, 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 therein not misleading. Each of OC Financial and First Place
further agrees that if such party shall become aware prior to the Effective Time
of any information furnished by such Party that would cause any of the
statements in the S-4 or the Proxy Statement to be false or misleading with
respect to any material fact, or to omit to state any material fact necessary to
make the statements therein not false or misleading, to promptly inform the
other Parties thereof and to take the necessary steps to correct the S-4 or the
Proxy Statement.
(c) First Place agrees to advise OC Financial, promptly after
First Place receives notice thereof, of the time when the S-4 has become
effective or any supplement or amendment is required to be filed, of the
issuance of any stop order or the suspension of the qualification of First Place
Common Stock for offering or sale in any jurisdiction, of the initiation or, to
the extent First Place is aware thereof, threat of any proceeding for any such
purpose, or of any request by the SEC for the amendment or supplement of the S-4
or for additional information.
6.4 REGULATORY FILINGS.
(a) Each of First Place and OC Financial shall cooperate and cause
their respective Subsidiaries to cooperate and use their respective reasonable
best efforts to prepare all documentation, to effect all filings and to obtain
all permits, consents, approvals and authorizations of all third parties and
Governmental Entities necessary to consummate the Merger and Subsidiary Merger
45
and the other transactions contemplated hereby; and any initial filings with
Governmental Entities shall be made by First Place as soon as reasonably
practicable after the execution hereof. Each of First Place and OC Financial
shall have the right to review and approve (which approval shall not be
unreasonably withheld or delayed), and to the extent practicable each shall
consult with the other, in each case subject to applicable laws relating to the
exchange of information, with respect to all written information submitted to
any third party or any Governmental Entity in connection with the Merger and
Subsidiary Merger. In exercising the foregoing right, each of such Party agrees
to act reasonably and as promptly as practicable. Each Party hereto agrees that
it shall consult with the other Party hereto with respect to the obtaining of
all permits, consents, approvals, waivers and authorizations of all third
parties and Governmental Entities necessary or advisable to consummate the
Merger and Subsidiary Merger, and each Party shall keep the other Party apprised
of the status of material matters relating to completion of the Merger.
(b) Each Party agrees, upon request, to furnish the other Party
with all information concerning itself, its Subsidiaries (if applicable),
directors, officers and stockholders and such other matters as may be reasonably
necessary or advisable in connection with any filing, notice or application made
by or on behalf of such other Party or any of their Subsidiaries (if applicable)
to any third party or Governmental Entity.
6.5 PRESS RELEASES. OC Financial and First Place shall consult with each
other before issuing any press release with respect to the Merger or this
Agreement. First Place and OC Financial will issue a joint press release with
respect to the Merger or this Agreement as soon as practicable after this
Agreement is fully executed. OC Financial shall not issue any press release with
respect to the Merger or this Agreement or make any such public statements
without the prior consent of First Place, which consent shall not be
unreasonably withheld; provided, however, that OC Financial may, without the
prior consent of First Place (but after consultation with First Place, to the
extent practicable under the circumstances), issue such press release or make
such public statements as may upon the advice of outside counsel be required by
law. OC Financial and First Place shall cooperate to develop all public
announcement materials and make appropriate management available at
presentations related to the Merger as reasonably requested by the other Party.
6.6 ACCESS; INFORMATION.
(a) OC Financial agrees that upon reasonable notice and subject to
applicable laws relating to the exchange of information, it shall afford First
Place and First Place's officers, employees, counsel, accountants and other
authorized representatives such access during normal business hours throughout
the period prior to the Effective Time to the books, records (including, without
limitation, Tax Returns and work papers of independent auditors), properties and
personnel of OC Financial and to such other information relating to OC Financial
as First Place may reasonably request and, during such period, it shall furnish
promptly to First Place all information concerning the business, properties and
personnel of OC Financial as First Place may reasonably request, subject to
applicable law.
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(b) First Place agrees that upon reasonable notice and subject to
applicable laws relating to the exchange of information, it shall afford OC
Financial and its authorized representatives such access (during normal business
hours) to First Place's personnel as OC Financial may reasonably request.
(c) Each Party agrees that it will not, and will cause its
representatives not to, use any information obtained pursuant to this Section
6.6 hereof (as well as any other information obtained prior to the date hereof
in connection with the entering into of this Agreement) for any purpose
unrelated to the consummation of the Merger. Subject to the requirements of law,
each Party shall keep confidential, and shall cause its representatives to keep
confidential, all information and documents obtained pursuant to this Section
6.6 hereof (as well as any other information obtained prior to the date hereof
in connection with the entering into of this Agreement) unless such information
(i) was already known to such Party, (ii) becomes available to such Party from
other sources not known by such Party to be bound by a confidentiality
obligation, (iii) is disclosed with the prior written approval of the Party to
which such information pertains or (iv) is or becomes readily ascertainable from
publicly available sources. In the event that this Agreement is terminated or
the Merger shall otherwise fail to be consummated, each Party shall promptly
cause all copies of documents or extracts thereof containing information and
data as to another party hereto to be returned to the Party that furnished the
same. No investigation by any Party of the business and affairs of any other
Party shall affect or be deemed to modify or waive any representation, warranty,
covenant or agreement in this Agreement, or the conditions to any Party's
obligation to consummate the Merger.
6.7 ACQUISITION PROPOSALS. OC Financial agrees that it shall not, and
that it shall direct and use its reasonable best efforts to cause its directors,
officers, employees, agents and representatives not to, directly or indirectly,
initiate, solicit, encourage or otherwise facilitate any inquiries or the making
of any proposal or offer with respect to a merger, reorganization, share
exchange, consolidation or similar transaction involving OC Financial, or any
purchase of all or substantially all of the assets of OC Financial or more than
10% of the outstanding equity securities of OC Financial (any such proposal or
offer being hereinafter referred to as an "Acquisition Proposal"). OC Financial
further agrees that it shall not, and that it shall direct and use its
reasonable best efforts to cause its directors, officers, employees, agents and
representatives not to, directly or indirectly, engage in any negotiations
concerning, or provide any confidential information or data to, or have any
discussions with, any person relating to an Acquisition Proposal, or otherwise
facilitate any effort or attempt to make or implement an Acquisition Proposal;
provided, however, that nothing contained in this Agreement shall prevent OC
Financial or the OC Financial board of directors from (A) complying with its
disclosure obligations under federal or state law; (B) providing information in
response to a request therefore by a Person who has made an unsolicited bona
fide written Acquisition Proposal if the OC Financial board of directors
receives from the Person so requesting such information an executed
confidentiality agreement; (C) engaging in any negotiations or discussions with
any person who has made an unsolicited bona fide written Acquisition Proposal or
(D) voting to recommend such an Acquisition Proposal to the stockholders of OC
Financial, if and only to the extent that, in each such case referred to in
clause (B), (C) or (D) above, (i) the OC Financial board of directors determines
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in good faith (after consultation with its outside legal counsel) that such
action would be required in order for its directors to comply with their
respective fiduciary duties under applicable law and (ii) the OC Financial board
of directors determines in good faith (after consultation with its outside legal
counsel and receipt of a written opinion of its financial advisor) that such
Acquisition Proposal, if accepted, is reasonably likely to be consummated,
taking into account all legal, financial and regulatory aspects of the proposal
and the person making the proposal and would, if consummated, result in a
transaction more favorable to OC Financial's stockholders from a financial point
of view than the Merger. An Acquisition Proposal which is received and
considered by the OC Financial board of directors in compliance with this
Section 6.7 hereof and which meets the requirements set forth in clause (D) of
the preceding sentence is herein referred to as a "Superior Proposal." OC
Financial agrees that it will immediately cease and cause to be terminated any
existing activities, discussions or negotiations with any parties conducted
heretofore with respect to any Acquisition Proposals. OC Financial agrees that
it will promptly notify (which notification shall not more than 24 hours after
the earlier of knowledge or receipt of such inquiry, proposal, offer or request)
First Place if any such inquiries, proposals or offers are received by, any such
information is requested from, or any such discussions or negotiations are
sought to be initiated or continued with, OC Financial or any of its
representatives.
6.8 CERTAIN POLICIES. Prior to the Effective Time, and upon direction
from First Place, OC Financial shall, consistent with GAAP, the rules and
regulations of the SEC and applicable banking laws and regulations, modify or
change its loan, OREO, investment portfolio, accrual, reserve, tax, litigation
and real estate valuation policies and practices (including loan classifications
and levels of reserves) (collectively the "Policies and Practices") so as to be
applied on a basis that is consistent with that of First Place; provided that in
any event, no modification or change to the Policies and Practices made by OC
Financial pursuant to this Section 6.9 hereof shall constitute or be deemed to
be a breach, violation of or failure to satisfy any representation, warranty,
covenant, agreement, condition or other provision of this Agreement or otherwise
be considered in determining whether any such breach, violation or failure to
satisfy shall have occurred. First Place shall provide such assistance and
direction to OC Financial as is necessary in conforming to such Policies and
Practices between the date of this Agreement until the Effective Time. The
recording of any such modifications or changes shall not be deemed to imply any
misstatement of previously furnished financial statements or information and
shall not be construed as concurrence of OC Financial or its management with any
such modifications or changes.
6.9 NASDAQ LISTING. First Place agrees to use its reasonable best
efforts to list, prior to the Effective Time, on the NASDAQ Global Select Market
the shares of First Place Common Stock to be issued in connection with the
Merger.
6.10 INDEMNIFICATION.
(a) From and after the Effective Time through the third
anniversary of the Effective Time, First Place and its Subsidiaries (the
"Indemnifying Party") shall indemnify and hold harmless each present and former
director, officer and employee of OC Financial, determined as of the Effective
Time (the "Indemnified Parties") against any costs or expenses (including
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reasonable attorneys' fees), judgments, fines, losses, claims, damages or
liabilities incurred in connection with any claim, action, suit, proceeding or
investigation, whether civil, criminal, administrative or investigative, arising
out of matters existing or occurring at or prior to the Effective Time, whether
asserted or claimed prior to, at or after the Effective Time, arising in whole
or in part out of or pertaining to the fact that he or she was a director,
officer, employee, fiduciary or agent of OC Financial or its Subsidiaries or is
or was serving at the request of OC Financial or its Subsidiaries as a director,
officer, employee, fiduciary or agent of another corporation, partnership, joint
venture, trust or other enterprise, including without limitation matters related
to the negotiation, execution and performance of this Agreement or consummation
of the Merger, to the fullest extent which such Indemnified Parties would be
entitled under the OC Financial Articles of Incorporation, the OC Financial
Bylaws, and/or any agreement, arrangement or understanding which is set forth
and described on SCHEDULE 6.10(A) of the OC Financial Disclosure Schedules, in
each case as in effect on the date hereof, provided, however, that First Place
and its Subsidiaries shall not be required to indemnify any party for material
breaches of the representations of this agreement to either or both of First
Place and its Subsidiaries.
(b) Any Indemnified Party wishing to claim indemnification under
this Section 6.10 hereof, upon learning of any such claim, action, suit,
proceeding or investigation, shall promptly notify the Indemnifying Party, but
the failure to so notify shall not relieve the Indemnifying Party of any
liability it may have to such Indemnified Party if such failure does not
actually prejudice the Indemnifying Party. In the event of any such claim,
action, suit, proceeding or investigation (whether arising before or after the
Effective Time), (i) the Indemnifying Party shall have the right to assume the
defense thereof and the Indemnifying Party shall not be liable to such
Indemnified Parties for any legal expenses of other counsel or any other
expenses subsequently incurred by such Indemnified Parties in connection with
the defense thereof, except that if the Indemnifying Party elects not to assume
such defense or counsel for the Indemnified Parties advises that there are
issues which raise conflicts of interest between the Indemnifying Party and the
Indemnified Parties, the Indemnified Parties may retain counsel which is
reasonably satisfactory to the Indemnifying Party, and the Indemnifying Party
shall pay, promptly as statements therefore are received, the reasonable fees
and expenses of such counsel for the Indemnified Parties (which may not exceed
one firm in any jurisdiction), (ii) the Indemnified Parties will cooperate in
the defense of any such matter, (iii) the Indemnifying Party shall not be liable
for any settlement effected without its prior written consent and (iv) the
Indemnifying Party shall have no obligation hereunder to the extent that a
federal or state banking agency or a court of competent jurisdiction shall
determine that indemnification of an Indemnified Party in the manner
contemplated hereby is prohibited by applicable laws and regulations.
(c) Prior to Effective Time, First Place shall cause the persons
serving as directors and officers of OC Financial and its Subsidiaries
immediately prior to the Effective Time to be covered by the directors' and
officers' liability insurance policy maintained by OC Financial for a period of
three years after the Effective Time (provided that First Place may substitute
therefore policies of at least the same coverage and amounts containing terms
and conditions which are not materially less advantageous than such policy or
single premium tail coverage with policy limits equal to OC Financial's existing
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coverage limits) with respect to acts or omissions occurring prior to the
Effective Time which were committed by such directors and officers in their
capacities as such, provided that in no event shall First Place be required to
expend for any one year an amount in excess of 125% of the aggregate premiums
paid by OC Financial in 2007 on an annualized basis for such purpose (which
aggregate premiums on an annualized basis are disclosed in SCHEDULE 6.10(C) of
the OC Financial Disclosure Schedules) (the "Insurance Amount"), and further
provided that if First Place is unable to maintain or obtain the insurance
called for by this Section 6.10 hereof as a result of the preceding provision,
First Place shall use its reasonable best efforts to obtain the most
advantageous coverage as is available for the Insurance Amount.
(d) If First Place or any of its successors or assigns shall
consolidate with or merge into any other entity and shall not be the continuing
or surviving entity of such consolidation or merger or shall transfer all or
substantially all of its assets to any other entity, then and in each case,
proper provision shall be made so that the successors and assigns of First Place
or the surviving company shall assume the obligations set forth in this Section
6.10 hereof prior to or simultaneously with the consummation of such
transaction.
(e) The provision of this Section 6.10 shall survive for up to
three years after the Closing Date.
6.11 BENEFIT PLANS.
(a) First Place shall take all reasonable action so that either
contemporaneous with or as soon as administratively practicable after the
Effective Time, employees of OC Financial or OC Bank who become employees of
First Place or its Subsidiaries shall be entitled (i) to participate in each
employee benefit plan, program or arrangement of First Place of general
applicability ("First Place Plans") to the extent a similarly situated employee
of First Place or its Subsidiaries participates in such First Place Plans as of
such date, and (ii) credit for their consecutive years of employment by OC
Financial up to the Effective Time for purposes of any eligibility or vesting
requirements under the First Place Plans to be provided as described in Section
6.11(a)(i). Nothing herein shall limit the ability of First Place to amend or
terminate any of OC Financial's Benefit Plans in accordance with their terms at
any time.
(b) At and following the Effective Time, First Place shall honor,
and First Place shall continue to be obligated to perform, in accordance with
their terms, contractual rights of, current and former employees of OC Financial
and OC Bank existing as of the Effective Time, as well as any severance,
employment or "change-in-control" agreements of OC Financial that are set forth
on SCHEDULE 3.16 of the OC Financial Disclosure Schedules, subject in each case
as the same may be modified or terminated with respect to certain executive
officers of OC Financial and OC Bank in accordance with the applicable terms
thereof. The severance or termination payments which are payable pursuant to
such agreements, plans or policies of OC Financial and OC Bank (which have been
quantified in reasonable detail as of the date hereof) are set forth in SCHEDULE
6.11(B) of the OC Financial Disclosure Schedules and shall be subject to the
limitations under Sections 280(G). The payment of any such payments shall comply
with Section 409A of the Code, to the extent applicable.
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(c) In the event of any termination or consolidation of any OC
Financial health plan with any health plan of First Place or any of its
Subsidiaries, First Place shall make available to employees of OC Financial or
its Subsidiaries who continue employment with First Place or its Subsidiaries
("Continuing Employees") and their dependents employer-provided health coverage
on the same basis as it provides such coverage to First Place employees. Unless
a Continuing Employee affirmatively terminates coverage under an OC Financial
health plan prior to the time that such Continuing Employee becomes eligible to
participate in the First Plan health plan, no coverage of any of the Continuing
Employees or their dependents shall terminate under any of the OC Financial
health plans prior to the time such Continuing Employees and their dependents
become eligible to participate in the health plans, programs and benefits common
to all employees of First Place and their dependents. In the event of a
termination of any OC Financial health plan, or consolidation of any OC
Financial health plan with any First Place health plan, any coverage limitation
under the First Place health plan due to any pre-existing condition shall be
waived by the First Place health plan to the degree that such condition was
covered by the OC Financial health plan and such condition would otherwise have
been covered by the First Place health plan in the absence of such coverage
limitation. First Place shall assume full responsibility for providing COBRA
continuation coverage to current and former OC Financial employees who are M&A
Qualified Beneficiaries as the term is defined in Treas. Reg. ss.ss. 54.4980B-1
- - B-10.
(d) Those employees of OC Financial or its Subsidiaries (other
than employees who are otherwise parties to an employment agreement, change in
control agreement or severance agreement with OC Financial or a Subsidiary under
which severance payments would be due upon termination and not including
temporary and/or co-operative employees) who are (i) terminated at the Effective
Time; (ii) identified by First Place for inclusion in a force reduction as a
result of the pending Merger and who sign and deliver a termination and release
agreement in the form acceptable to First Place or (iii) continue as an employee
of First Place or its Subsidiaries at the Effective Time, but are terminated
within one year of the Effective Time, shall be entitled to severance pay equal
to two weeks of pay for each full year of service, subject to a maximum of 30
weeks. Such payments will be made by First Place within 30 days after the later
of the Effective Time or the date the release becomes effective or the
negotiated date of termination after the Effective Time. Employees employed by
more than one corporation shall be eligible for severance pay based only on the
corporation with which they have the longest service. If any corporation
employing the employee also has a severance pay plan, any amounts paid pursuant
to that plan shall reduce the amount that the employee will receive under this
Section 6.11(d) and in no event shall there be any duplication of severance pay.
Nothing contained in this Section 6.11(d) hereof shall be construed or
interpreted to limit or modify in any way First Place's at will employment
policy or provide any third party beneficiary rights to employees of OC
Financial or its Subsidiaries. In no event shall severance pay be taken into
account in determining the amount of any other benefit (including but not
limited to, an individual's benefit under any pension plan). If, by reason of
the controlling plan document, controlling law or otherwise, severance pay is
taken into account in determining any other benefit, the severance pay otherwise
payable shall be reduced by the present value of the additional benefit
determined under other benefit plans attributable to the severance pay period.
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(e) The OC Financial Employee Stock Ownership Plan ("ESOP") shall
be terminated, effective as of the Effective Time. The portion of the Aggregate
Merger Consideration received by the ESOP trustee with respect to the
unallocated shares of OC Financial Common Stock held by the ESOP shall after
repayment of the outstanding balance on the ESOP exempt loan from the Merger
Consideration received on the unallocated shares, if any, be allocated to the
ESOP participants in accordance with the terms of the ESOP and applicable laws
as soon as practicable after the Effective Time. In connection with the
termination of the ESOP, OC Financial shall promptly apply to the IRS for a
favorable determination letter on the tax-qualified status of the ESOP on
terminations and any amendments made to the ESOP in connection with its
termination or otherwise, if such amendments have not previously received a
favorable determination letter from the IRS with respect to their qualification
under Section 401(a) of the Code. Any amendments to the ESOP requested by the
IRS prior to the Effective Time shall be adopted by OC Financial and any
amendments requested by the IRS after the Effective Time shall be promptly
adopted by First Place. Any and all distributions from the ESOP after its
termination shall be made consistent with the aforementioned determination
letter from the IRS.
(f) Following the Effective Date and subject to Section 6.11(a),
First Place shall review the OC Financial 401(k) Plan to determine whether to
maintain, terminate, freeze or continue such plan. In the event that First Place
elects to terminate or freeze the OC Financial 401(k) Plan following the
Effective Date, Continuing Employees who were eligible for participation in the
OC Financial 401(k) Plan will become immediately eligible to participate in the
First Place 401(k) Plan, including for purposes of making elective deferrals, so
that such Continuing Employees have no gap in participation in a 401(k) Plan. If
necessary, First Place shall take such action as deemed necessary to amend the
First Place 401(k) Plan to ensure immediate participation.
6.12 NOTIFICATION OF CERTAIN MATTERS. Each of OC Financial and First
Place shall give prompt notice to the other of any fact, event or circumstance
known to it that (i) is reasonably likely, individually or taken together with
all other facts, events and circumstances known to it, to result in any Material
Adverse Effect with respect to First Place or (ii) would cause or constitute a
material breach of any of its representations, warranties, covenants or
agreements contained herein.
6.13 SUBSEQUENT INTERIM AND ANNUAL FINANCIAL STATEMENTS. First Place has
delivered to OC Financial and OC Financial has delivered to First Place their
respective audited financial statements and annual reports (or equivalent
documentation) for the year ending June 30, 2007 and September 30, 2007,
respectively. As soon as reasonably available, but in no event more than 45 days
after the end of each fiscal quarter ending after the date of this Agreement,
First Place will deliver to OC Financial and OC Financial will deliver to First
Place their respective consolidated quarterly financial information as required
to be filed with the SEC, including their respective Quarterly Reports on Form
10-Q for the applicable quarter.
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6.14 BOARD AND LOAN COMMITTEE VISITATION RIGHTS. OC Financial shall allow
one representative designated by First Place to attend all meetings of OC
Financial's and its Subsidiaries' board of directors in a nonvoting capacity,
and in connection therewith, OC Financial shall give such representative copies
of all notices, minutes, consents and other materials, financial or otherwise,
which OC Financial and its Subsidiaries provide to its board of directors. OC
Financial shall also allow one representative of First Place to attend all
meetings of OC Bank's loan committee in a nonvoting capacity, and in connection
therewith, OC Financial shall give such representative copies of all notices,
minutes, consents and other materials, financial or otherwise, which OC Bank
provides to its loan committee, provided, however, that OC Financial may exclude
the representative of First Place from access to any meeting or materials, or
portion thereof, if a majority of the OC Financial board of directors
determines, in good faith and after consultation with outside legal counsel,
that such exclusion is necessary to (i) preserve attorney-client privilege for
existing or pending litigation or (ii) to protect confidential or proprietary
information that First Place does not contractually have the right to have
access to under the terms of this Agreement or (iii) with respect to a
discussion of a Superior Proposal.
6.15 CURRENT INFORMATION. During the period from the date of this
Agreement to the Effective Time, OC Financial will cause one or more of its
designated representatives to notify on a regular and frequent basis (not less
than monthly) representatives of First Place and to report (i) the general
status of the ongoing operations of OC Financial and its Subsidiaries; (ii) the
status of, and the action proposed to be taken with respect to, those Loans held
by it or any Subsidiary, as well as its non-performing assets; (iii) the
origination of all Loans; (iv) changes in its deposit balances equal to or more
than $500,000; and (v) any material changes in its pricing of deposits. OC
Financial shall also provide to First Place, within 15 days after the end of
each calendar month, a monthly consolidated balance sheet and income statement,
beginning with the month ended January 2008. OC Financial will promptly notify
First Place of any material change in the normal course of business or in the
operation of its properties or the properties of any of its Subsidiaries and all
regulatory communications and governmental complaints, investigations or
hearings (or communications indicating that the same may be contemplated), or
the institution or the threat of litigation or any adverse legal proceedings
involving itself or any of its Subsidiaries, and will keep First Place fully
informed of such events.
6.16 EXECUTION AND AUTHORIZATION OF BANK MERGER AGREEMENT. As of the date
hereof, (a) First Place shall have (i) caused the board of directors of the Bank
to approve the Bank Merger Agreement a form of which is attached hereto as ANNEX
A, (ii) caused the Bank to execute and deliver the Bank Merger Agreement, and
(iii) approved the Bank Merger Agreement as the sole stockholder of the Bank,
and (b) OC Financial shall have (i) caused the board of directors of OC Bank to
approve the Bank Merger Agreement and (ii) caused OC Bank to execute and deliver
the Bank Merger Agreement. The approval of the stockholder of OC Bank to
complete the Subsidiary Merger will be obtained after First Place acquires OC
Financial at the Effective Time.
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ARTICLE VII
CONDITIONS PRECEDENT
7.1 CONDITIONS TO EACH PARTY'S OBLIGATION TO EFFECT THE MERGER. The
respective obligation of each Party hereto to effect the Merger is subject to
the satisfaction or, to the extent permitted by applicable law, written waiver
by the Parties hereto at or prior to the Effective Time each of the following
conditions:
(a) STOCKHOLDER APPROVAL. This Agreement shall have been adopted
by the requisite affirmative vote of the holders of at least a majority of the
outstanding shares of OC Financial Common Stock entitled to vote thereon.
(b) NASDAQ STOCK MARKET LISTING. The shares of First Place Common
Stock which shall be issued to the stockholders of OC Financial upon
consummation of the Merger shall have been authorized for listing on the NASDAQ
Global Select Market, subject to official notice of issuance.
(c) OTHER APPROVALS. All regulatory approvals required to
consummate the transactions contemplated hereby (including the Merger and the
Subsidiary Merger) shall have been obtained and shall remain in full force and
effect and all statutory waiting periods in respect thereof shall have expired
(all such approvals and the expiration of all such waiting periods being
referred to herein as the "Requisite Regulatory Approvals").
(d) S-4. The S-4 shall have become effective under the Securities
Act and 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) 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, the Subsidiary Merger or any of the other transactions contemplated by
this Agreement or the Bank Merger 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, restricts or
makes illegal consummation of the Merger or the Subsidiary Merger.
(f) FEDERAL TAX OPINION. First Place and OC Financial shall have
received an opinion of Patton Boggs LLP, counsel to First Place ("First Place's
Counsel"), in form and substance reasonably satisfactory to both First Place and
OC Financial, substantially to the effect that, on the basis of facts,
representations and assumptions set forth in such opinion which are consistent
with the state of facts existing at the Effective Time, the Merger will be
treated as reorganization within the meaning of Section 368(a) of the Code. In
rendering such opinion, First Place's Counsel may require and rely upon
representations and covenants, including those contained in certificates of
officers of First Place, the Bank, OC Financial, OC Bank and others, reasonably
satisfactory to such counsel.
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(g) NO BURDENSOME CONDITION. None of the Requisite Regulatory
Approvals shall impose any term, condition or restriction upon First Place, OC
Financial, OC Bank, the Bank or any of their respective Subsidiaries (if
applicable) that First Place, or OC Financial, in good faith, reasonably
determines would so materially adversely affect the economic or business
benefits of the transactions contemplated by this Agreement to First Place or OC
Financial as to render inadvisable in the reasonable good faith judgment of
First Place or OC Financial, the consummation of the Merger (a "Burdensome
Condition").
7.2 CONDITIONS TO OBLIGATIONS OF FIRST PLACE. The obligation of First
Place to effect the Merger is also subject to the satisfaction or waiver by
First Place at or prior to the Effective Time of the following conditions:
(a) REPRESENTATIONS AND WARRANTIES. The representations and
warranties of OC Financial set forth in this Agreement shall be true and correct
in all material 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. First Place shall
have received a certificate dated as of the Closing Date signed on behalf of OC
Financial by the Chief Executive Officer and the Chief Financial Officer of OC
Financial to the foregoing effect.
(b) PERFORMANCE OF OBLIGATIONS OF OC FINANCIAL. OC Financial 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 First Place
shall have received a certificate dated as of the Closing Date signed on behalf
of OC Financial by the Chief Executive Officer and the Chief Financial Officer
of OC Financial to such effect.
(c) CHANGE IN STOCKHOLDER EQUITY. The aggregate amount of
consolidated stockholders' equity (including OC Financial Common Stock,
additional paid-in capital, retained earnings, accumulated other comprehensive
income and excluding treasury stock) of OC Financial immediately prior to the
Effective Time (as calculated at the time specified in Section 2.1(c)), as shown
by and reflected in its books and records of accounts on a consolidated basis in
accordance with GAAP, consistently applied, shall not be less than $5,200,000.
For purposes of this Section 7.2(c) hereof, any expenses or accruals after the
date hereof relating to (i) termination or funding of any of the Plans of OC
Financial or its Subsidiaries as contemplated herein, (ii) adjustments made to
reflect expenses and losses in the market value of investments held by OC
Financial or its Subsidiaries, as required by GAAP, including SFAS 115, (iii)
expenses, restructuring charges and transaction expenses (including but not
limited to, accounting, investment banking and legal fees) associated with this
Agreement and the transactions contemplated herein or (iv) modification and
amendments to loan and other policy and procedures as set forth under Section
6.9 hereof that adversely impact stockholders' equity, shall be excluded for
purposes of calculation of OC Financial's stockholders equity as contemplated
herein.
(d) RECEIPT OF VOTING AGREEMENTS. OC Financial shall have
delivered executed voting agreements from its executive officers and directors
on the date of this Agreement.
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(e) CONSENTS UNDER AGREEMENTS. OC Financial, OC Bank and any
Subsidiaries shall have obtained all third party consents, approvals or waivers
that relate to any obligation, right, asset, property or interest of OC
Financial or any Subsidiary of OC Financial under any loan or credit agreement,
note, mortgage, indenture, lease, license, permit or other agreement or
instrument shall have been obtained, except where the failure to obtain such
consent, approval or waiver would not have a Material Adverse Effect on OC
Financial or adversely impact the economic or business benefits of the
transactions contemplated by this Agreement to First Place as to render
inadvisable, in the reasonable good faith judgment of First Place, the
consummation of the Merger.
(f) NO PENDING GOVERNMENTAL ACTIONS. No proceeding initiated by
any Governmental Entity seeking an Injunction shall be pending.
(g) DISSENTING SHARES. Dissenting Shares shall not represent 9.9%
or more of the outstanding OC Financial Common Stock.
(h) NO MATERIAL ADVERSE CHANGE. There shall not have been any
Material Adverse Effect in the business, operation, assets, financial condition,
results of operations or prospects of OC Financial or and OC Bank, taken as a
whole. Not in limitation of anything contained herein, material adverse
developments in any litigation may be considered in determining whether a
Material Adverse Effect has occurred.
(i) NO LITIGATION. At the Effective Time, there shall not be
pending or threatened against OC Financial or OC Bank or the officers, directors
or employees thereof in their capacity as such, any suit, action or proceeding
(including antitrust actions) which, if successful, would, in the reasonable
judgment of First Place, have a Material Adverse Effect on the financial
condition, operations, business or prospects of OC Financial or OC Bank.
(j) PERMITS, AUTHORIZATIONS, ETC. OC Financial and OC Bank shall
have obtained any and all material permits, authorizations, consents, waivers,
clearances or approvals, including Requisite Regulatory Approvals, required for
the lawful consummation of the Merger and Subsidiary Merger in accordance with
applicable law and without violation of any material contract.
(k) 280G ISSUES. First Place shall be satisfied in its sole
discretion, either through mutually agreeable pre-Closing amendments or
otherwise, that OC Financial and it Subsidiaries shall have taken any and all
reasonably necessary steps such that the Merger will not trigger any "excess
parachute payment" (as defined in Section 280G of the Code) under any
employment, severance or change in control agreement, benefit plans, or similar
arrangements between OC Financial or any Subsidiary and any officers, directors,
or employees thereof.
(l) OTHER ACTIONS. OC Financial shall have furnished First Place
with such certificates of its officers or others and such other documents to
evidence fulfillment of the conditions set forth in Section 7.1 and this Section
7.2 hereof as First Place may reasonably request.
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7.3 CONDITIONS TO OBLIGATIONS OF OC FINANCIAL. The obligation of OC
Financial to effect the Merger is also subject to the satisfaction or waiver by
OC Financial at or prior to the Effective Time of the following conditions:
(a) REPRESENTATIONS AND WARRANTIES. The representations and
warranties of First Place set forth in this Agreement shall be true and correct
in all material 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. OC Financial
shall have received a certificate dated as of the Closing Date signed on behalf
of First Place by the Chief Executive Officer and the Chief Financial Officer of
First Place to the foregoing effect.
(b) PERFORMANCE OF OBLIGATIONS OF FIRST PLACE. First Place 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 OC Financial
shall have received a certificate dated as of the Closing Date signed on behalf
of First Place by the Chief Executive Officer and the Chief Financial Officer of
First Place to such effect.
(c) NO PENDING GOVERNMENTAL ACTIONS. No proceeding initiated by
any Governmental Entity seeking an injunction shall be pending.
(d) DEPOSIT OF STOCK CONSIDERATION. First Place shall have
deposited with the Exchange Agent the Stock Consideration (and any cash for
fractional shares) to be paid to holders of OC Financial Common Stock pursuant
to Article II hereof.
(e) NO MATERIAL ADVERSE CHANGE. There shall not have been any
Material Adverse Effect on the business operation, assets, financial condition,
results of operations or prospects of First Place, taken as a whole. Not in
limitation of anything contained herein, material adverse developments in any
litigation may be considered in determining whether a Material Adverse Effect
has occurred.
(f) NO LITIGATION. At the Effective Time, there shall not be
pending or threatened against First Place or First Place Bank or the officers,
directors or employees thereof in their capacity as such, any suit, action or
proceeding (including antitrust actions) which if successful, would, in the
reasonable judgment of OC Financial, have a Material Adverse Effect on the
financial condition, operations, business or prospects of First Place or First
Place Bank.
(g) OTHER ACTIONS. First Place shall have furnished OC Financial
with such certificates of its officers or others and such other documents to
evidence fulfillment of the conditions set forth in Section 7.1 and this Section
7.3 hereof as OC Financial may reasonably request.
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ARTICLE VIII
TERMINATION AND AMENDMENT
8.1 TERMINATION. This Agreement may be terminated at any time prior to
the Effective Time, whether before or after approval of the matters presented in
connection with the Merger by the stockholders of OC Financial:
(a) MUTUAL CONSENT. By mutual consent of OC Financial and First
Place in a written instrument, if the board of directors of each so determines
by a two-thirds vote of the members of its entire board;
(b) NO REGULATORY APPROVAL. By either First Place or OC Financial
upon written notice to the other Party (i) 60 days after the date on which any
request or application for a Requisite Regulatory Approval shall have been
denied or withdrawn at the request or recommendation of the Governmental Entity
which must grant such Requisite Regulatory Approval, unless within the 60-day
period following such denial or withdrawal a petition for rehearing or an
amended application has been filed with the applicable Governmental Entity,
PROVIDED, HOWEVER, that no Party shall have the right to terminate this
Agreement pursuant to this Section 8.1(b)(i) hereof if such denial or request or
recommendation for withdrawal 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; (ii) if any Governmental Entity of competent
jurisdiction shall have issued a final nonappealable order enjoining or
otherwise prohibiting the consummation of any of the transactions contemplated
by this Agreement; or (iii) there shall be a Burdensome Condition upon First
Place, the Bank, OC Financial or OC Bank.
(c) DELAY. (i) By either First Place or OC Financial if the Merger
shall not have been consummated on or before September 30, 2008, unless the
failure of the Closing 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;
(d) OC FINANCIAL STOCKHOLDER APPROVAL. By either First Place or OC
Financial (provided that if OC Financial is the terminating Party it shall not
be in material breach of any of its obligations under Section 6.2 hereof) if any
approval of the stockholders of OC Financial required for the consummation of
the Merger shall not have been obtained by reason of the failure to obtain the
required vote at a duly held meeting of such stockholders or at any adjournment
or postponement thereof;
(e) MATERIAL BREACH OF REPRESENTATIONS. By either First Place or
OC Financial (provided that the terminating Party is not then in material breach
of any representation, warranty, covenant or other agreement contained herein)
if there shall have been a material breach of any of the representations or
warranties set forth in this Agreement on the part of the other Party, which
breach is not cured within 30 days following written notice to the Party
committing such breach, or which breach, by its nature, cannot be cured within
30 days after notice with the breaching Party failing to diligently pursue a
cure to completion (except that breaches of Section 6.2, 6.3 and 6.16 shall not
have a 30 day cure period). For purposes of this Agreement, "knowledge" shall
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mean, with respect to a Party hereto, actual knowledge of any officer of that
Party with the title, if any, ranking not less than senior vice president and
that Party's in-house counsel, if any. "Material Adverse Effect" means, for
purposes of this Agreement, any effect that (i) is material and adverse to the
business, properties, assets liabilities, results of operations, financial
condition or business of such Party and its Subsidiaries taken as a whole, or
(ii) would materially impair the ability of First Place or OC Financial to
perform its obligations under this Agreement or otherwise materially threaten or
materially impede the consummation of the Merger and the other transactions
contemplated by this Agreement; PROVIDED, HOWEVER, that Material Adverse Effect
shall not be deemed to include the impact of (a) changes in thrift, banking and
similar laws of general applicability or interpretations thereof by courts or
governmental authorities, or other changes affecting depository institutions
generally, including changes in general economic conditions and changes in
prevailing interest and deposit rates, (b) changes in GAAP or regulatory
accounting requirements applicable to thrifts, banks and their holding companies
generally, (c) any modifications or changes to valuation policies and practices
in connection with the Merger or Subsidiary Merger or restructuring charges
taken in connection with the Merger or Subsidiary Merger, in each case in
accordance with GAAP, (d) changes resulting from expenses (such as legal,
accounting and investment bankers' fees) incurred in connection with this
Agreement, (e) actions or omissions of First Place or OC Financial taken with
the prior written consent of OC Financial or First Place, as applicable, in
contemplation of the transactions contemplated hereby, (f) the payments of any
amounts due, or the provision of any benefits to, any officer or employee under
employment, change-in-control or severance agreements as of the date hereof, and
(g) acts of terrorism or war.
(f) MATERIAL BREACH OF COVENANTS. By either First Place or OC
Financial (provided that the terminating Party is not then in material breach of
any representation, warranty, covenant or other agreement contained herein) if
there shall have been a material breach of any of the covenants or agreements
set forth in this Agreement on the part of the other Party, which breach shall
not have been cured within thirty days following receipt by the breaching Party
of written notice of such breach from the other Party hereto; PROVIDED, HOWEVER,
that neither Party shall have the right to terminate this Agreement pursuant to
this Section 8.1(f) hereof unless such breach shall have a Material Adverse
Effect, as defined in Section 8.1(e) hereof, on the other Party; or
(g) FAILURE TO RECOMMEND. By First Place, if (i) the board of
directors of OC Financial do not recommend in the Proxy Statement that its
stockholders adopt this Agreement; (ii) after recommending in the Proxy
Statement that stockholders adopt this Agreement, the board of directors shall
have withdrawn, modified or qualified such recommendation in any respect adverse
in any respect to the interest of First Place or (iii) OC Financial fails to
call, give proper notice of, convene and hold the OC Financial Stockholder
Meeting.
(h) CERTAIN TENDER OR EXCHANGE OFFERS. By First Place if a tender
offer or exchange offer for 20% or more of the outstanding shares of OC
Financial Common Stock is commenced (other than by First Place or a Subsidiary
thereof), and the OC Financial board of directors recommends that the
stockholders of OC Financial 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 the ten-business day period specified in Rule
14e-2(a) under the Exchange Act.
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(i) SUPERIOR PROPOSAL. At any time prior to the OC Financial
Stockholder Meeting, by OC Financial in order to concurrently enter into an
acquisition agreement or similar agreement (each, an "Acquisition Agreement")
with respect to a Superior Proposal which has been received and considered by OC
Financial and the OC Financial board of directors in full compliance with all of
the requirements of Section 6.7 hereof, provided, however, that this Agreement
may be terminated by OC Financial pursuant to this Section 8.1(i) hereof only
after the fifth business day following OC Financial's provision of written
notice to First Place advising First Place that the OC Financial board of
directors is prepared to accept a Superior Proposal, and only if, during such
five-business day period, First Place does not, in its sole discretion, make an
offer to OC Financial that the OC Financial board of directors determines in
good faith, after consultation with its financial and legal advisors, is at
least as favorable to OC Financial and its stockholders as the Superior
Proposal.
8.2 EFFECT OF TERMINATION.
(a) In the event of termination of this Agreement and the
abandonment of the Merger pursuant to this Article VIII hereof, no Party to this
Agreement shall have any liability or further obligation to any other Party
hereunder except (i) as set forth in this Section 8.2, Section 9.3 and 9.4
hereof and (ii) that termination will not relieve a breaching Party from
liability for any fraudulent or willful breach of any covenant, agreement,
representation or warranty of this Agreement giving rise to such termination.
(b) In recognition of the efforts, expenses and other
opportunities foregone by First Place while structuring and pursuing the Merger,
the Parties hereto agree that OC Financial shall pay to First Place a
termination fee of $400,000 in the manner set forth in (i), (ii) and (iii) below
if:
(i) this Agreement is terminated by First Place pursuant to
Section 8.1 (e)(only as it relates to breaches of Sections 6.2, 6.3 and 6.16),
(g) or (h) hereof;
(ii) this Agreement is terminated by (A) First Place pursuant
to Section(s) 8.1(e) and (f) hereof, (B) by First Place pursuant to Section
8.1(c) hereof (provided such delay is caused by OC Financial), or (C) by either
First Place or OC Financial pursuant to Section 8.1(d) hereof (other than by
reason of any breach by First Place or OC Financial, respectively), and in the
case of any termination pursuant to clause (A), (B) or (C) an Acquisition
Proposal (as defined in Section 6.7 hereof) shall have been publicly announced
or otherwise communicated or made known to the OC Financial board of directors
or any of its members (or any Person shall have publicly announced, communicated
or made known an intention, whether or not conditional, to make an Acquisition
Proposal) at any time after the date of this Agreement and prior to the taking
of the vote of the stockholders of OC Financial contemplated by this Agreement
at the OC Financial Stockholder Meeting, in the case of clause (C), or the date
of termination of this Agreement, in the case of clause (A) or (B); or
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(iii) this Agreement is terminated by OC Financial pursuant to
Section 8.1(i) hereof.
In the event the Termination Fee shall become payable pursuant to Section 8.2(b)
hereof, the Termination Fee shall be paid within one business day following the
date of termination of this Agreement. Any amount that becomes payable pursuant
to Section 8.2(b) hereof shall be paid by wire transfer of immediately available
funds to an account designated by First Place. The sums paid under this Section
8.2(b) shall be the sole remedy available to First Place in the event of a
termination of this Agreement under 8.2(b)(i), (ii) and (iii) except for claims
brought under Section 8.2(a)(ii) hereof.
(c) OC Financial and First Place agree that the agreement
contained in Section 8.2(b) hereof is an integral part of the transactions
contemplated by this Agreement, that without such agreement First Place would
not have entered into this Agreement and that such amounts do not constitute a
penalty or liquidated damages in the event of a breach of this Agreement by OC
Financial. If OC Financial fails to pay First Place the amounts due under
paragraph (b) above within the time periods specified in this Section, then OC
Financial shall pay the costs and expenses (including reasonable legal fees and
expenses) incurred by First Place in connection with any action in which First
Place prevails, 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 prime lending rate prevailing during such period as published in THE WALL
STREET JOURNAL, calculated on a daily basis from the date such amounts were
required to be paid until the date of actual payment.
8.3 EXTENSION; WAIVER. At any time prior to the Effective Time, the
Parties hereto, by action taken or authorized by their respective boards of
directors, may, to the extent legally allowed, (a) extend the time for the
performance of any of the obligations or other acts of the other Party 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
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.
ARTICLE IX
GENERAL PROVISIONS
9.1 CLOSING. Subject to the terms and conditions of this Agreement and
the Bank Merger Agreement, the closing of the Merger (the "Closing") will take
place at 10:00 a.m. on a date to be specified by the Parties, which shall be the
first day which is (a) the last business day of a month and (b) at least two
business days after the satisfaction or waiver (subject to applicable law) of
the latest to occur of the conditions set forth in Article VII hereof (the
"Closing Date"), at the offices of First Place's counsel unless another time,
date or place is agreed to in writing by the Parties hereto.
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9.2 ALTERNATIVE STRUCTURE. Notwithstanding anything to the contrary
contained in this Agreement, subject to OC Financial's consent, which consent
shall not be unreasonably withheld or delayed, prior to the Effective Time,
First Place shall be entitled to revise the structure of the Merger and/or the
Subsidiary Merger and related transactions provided that each of the
transactions comprising such revised structure shall (i) fully qualify as, or
fully be treated as part of, one or more tax-free reorganizations within the
meaning of Section 368(a) of the Code, and not subject any of the stockholders
of OC Financial to adverse tax consequences or change the amount of
consideration to be received by such stockholders, (ii) be capable of
consummation in as timely a manner as the structure contemplated herein and
(iii) not otherwise be prejudicial to the interests of the stockholders of OC
Financial. This Agreement and any related documents shall be appropriately
amended in order to reflect any such revised structure.
9.3 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)
or the termination of this Agreement if this Agreement is terminated prior to
the Effective Time (other than Sections 6.6(c), 8.1, 8.2 and this Article IX
hereof, which shall survive any such termination). The representations,
warranties, agreements and covenants contained in this Agreement shall not be
deemed to be terminated or extinguished so as to deprive either Party hereto or
any of their affiliates of any defense at law or in equity which otherwise would
be available against the claims of any person.
9.4 EXPENSES. Except as costs and expenses may be payable pursuant to
Sections 8.2 and 9.4(b) hereof all costs and expenses incurred in connection
with this Agreement and the transactions contemplated hereby, including, without
limitation, fees and expenses of its own financial consultants, accountants and
counsel shall be paid by the Party incurring such expense, PROVIDED, HOWEVER,
that all filing and other fees paid to the SEC or any other Governmental Entity
in connection with the Merger, the Subsidiary Merger and other transactions
contemplated thereby shall be borne by First Place, PROVIDED, FURTHER, HOWEVER,
that nothing contained herein shall limit either Party's rights to recover any
liabilities or damages arising out of the other Party's willful breach of any
provision of this Agreement.
9.5 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 First Place, to:
First Place Financial Corp.
185 East Market Street
Warren, Ohio 44481
Attention: Steven R. Lewis
President and Chief Executive Officer
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with a copy to:
Patton Boggs LLP
2550 M Street, N.W.
Washington, D.C. 20037
Attention: Joseph G. Passaic, Jr.
(b) if to OC Financial, to:
OC Financial, Inc.
6033 Perimeter Drive
Dublin, Ohio 43017
Attention: Diane M. Gregg
President and Chief Executive Officer
with a copy to:
Luse Gorman Pomerenk & Schick, P.C.
5335 Wisconsin Avenue, Suite 400
Washington, DC 20015
Attention: Richard S. Garabedian
9.6 INTERPRETATION. When a reference is made in this Agreement to
Sections, Exhibits or Schedules, such reference shall be to a Section of or
Exhibit or Schedule to this Agreement unless otherwise indicated. The headings
contained in this Agreement are for reference purposes only and shall not affect
in any way the meaning or interpretation of this Agreement. 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 phrases "the date
of this Agreement," "the date hereof" and terms of similar import, unless the
context otherwise requires, shall be deemed to refer to April 2, 2008.
9.7 ENTIRE AGREEMENT. This Agreement (including the disclosure
schedules, annexes, exhibits, 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.
9.8 GOVERNING LAW. This Agreement shall be governed and construed in
accordance with the law of the State of Delaware, without regard to any
applicable conflicts of law. Any action or proceeding seeking to enforce any
provision of, or based on any claims for equitable relief arising out of this
Agreement or the transaction contemplated hereby may be brought against any
Party only in the United States District Court for the Northern District of Ohio
and if any Party does not have standing for such federal court, then to the
Cuyahoga County Court of Common Pleas and each Party consents to the
jurisdiction of such courts (and of the appropriate appellate courts) in any
such action or proceeding and waives any objection to venue laid therein.
Process in any action or proceeding referred to in the preceding sentence may be
served on any Party anywhere in the world.
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9.9 ENFORCEMENT OF THE AGREEMENT. The Parties hereto agree that
irreparable damage would occur in the event that any of the provisions of this
Agreement were not performed in accordance with their specific terms or were
otherwise breached. It is accordingly agreed that the Parties shall be entitled
to an injunction or injunctions to prevent breaches of this Agreement and to
enforce specifically the terms and provisions hereof in any court of the United
States or any state having jurisdiction, this being in addition to any other
remedy to which they are entitled at law or in equity.
9.10 SEVERABILITY. Except to the extent that application of this Section
9.10 hereof would have a Material Adverse Effect on OC Financial or First Place,
any term or provision of this Agreement which is 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. If any provision of this Agreement is so broad as to be
unenforceable, the provision shall be interpreted to be only so broad as is
enforceable. In all such cases, the Parties shall use their reasonable best
efforts to substitute a valid, legal and enforceable provision which, insofar as
practicable, implements the original purposes and intents of this Agreement.
9.11 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 adoption of the
Agreement by the stockholders of either OC Financial or First Place; PROVIDED,
HOWEVER, that after adoption of this Agreement by OC Financial'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 OC Financial stockholders hereunder other than
as contemplated by this Agreement or as otherwise required by applicable law.
This Agreement may not be amended except by an instrument in writing signed on
behalf of each of the Parties hereto.
9.12 ASSIGNMENT. Neither this Agreement nor any of the rights, interests
or obligations 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 assigns.
9.13 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 Party, it being understood that each Party need not sign the same
counterpart.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK.]
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IN WITNESS WHEREOF, First Place and OC Financial have caused this
Agreement to be executed by their respective officers thereunto duly authorized
as of the date first above written.
FIRST PLACE FINANCIAL CORP.
By: /s/ Steven R. Lewis
----------------------------------------
Name: Steven R. Lewis
Title: President and Chief Executive Officer
Attest:
/s/ J. Craig Carr
- ------------------------------------
Name: J. Craig Carr
Title: General Counsel and Secretary
OC FINANCIAL, INC.
By: /s/ Diane M. Gregg
-----------------------------------------
Name: Diane M. Gregg
Title: President and Chief Executive Officer
Attest:
/s/ Amanda E. Thomas
- ------------------------------------
Name: Amanda E. Thomas
Title: Chief Financial Officer and
Secretary
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