Washington Mutual Inc. Contracts
Sample Business Contracts
Agreement and Plan of Merger - Washington Mutual Inc. and Dime Bancorp. Inc.
AGREEMENT AND PLAN OF MERGER
BY AND BETWEEN
WASHINGTON MUTUAL, INC.
AND
DIME BANCORP, INC.
DATED AS OF JUNE 25, 2001
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Table of Contents
Page
1. Definitions................................................................1
1.1. Defined Terms.......................................................1
1.2. Other Definitional Provisions.......................................4
2. The Merger.................................................................4
2.1. The Merger..........................................................4
2.2. Effective Time......................................................4
2.3. Effects of the Merger...............................................4
2.4. Closing of the Merger...............................................4
2.5. Conversion of Dime Capital Stock....................................5
2.6. Election Procedures.................................................6
2.7. No Fractional Shares................................................9
2.8. Washington Mutual Common Stock; Washington Mutual
Preferred Stock...................................................9
2.9. Treatment of Options and Other Stock-Based Awards...................9
2.10. Litigation Tracking Warrant Conversion.............................10
2.11. Articles of Incorporation..........................................11
2.12. Bylaws.............................................................11
2.13. Board of Directors.................................................11
2.14. Tax Consequences...................................................11
2.15. Reservation of Right to Revise Structure...........................11
3. Exchange of Certificates for Merger Consideration.........................11
3.1. Washington Mutual to Make Merger Consideration Available...........11
3.2. Exchange of Shares.................................................12
4. Representations and Warranties of Dime....................................14
4.1. Corporate Organization.............................................14
4.2. Capitalization.....................................................15
4.3. Authority; No Violation............................................17
4.4. Consents and Approvals.............................................17
4.5. Reports............................................................18
4.6. Financial Statements...............................................18
4.7. Broker's Fees......................................................19
4.8. Absence of Certain Changes or Events...............................19
4.9. Legal Proceedings..................................................20
4.10. Taxes..............................................................20
4.11. Employees; Employee Benefit Plans..................................21
4.12. SEC Reports........................................................24
4.13. Compliance With Applicable Law.....................................24
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4.14. Certain Contracts..................................................25
4.15. Agreements With Regulatory Agencies................................25
4.16. Undisclosed Liabilities............................................26
4.17. Rights Agreement; Anti-Takeover Provisions.........................26
4.18. Dime Information...................................................26
4.19. Title to Property..................................................26
4.20. Insurance..........................................................27
4.21. Environmental Liability............................................27
4.22. Opinion of Financial Advisor.......................................28
4.23. Loan Matters.......................................................28
4.24. Labor Matters......................................................28
4.25. CRA Agreements.....................................................29
5. Representations and Warranties of Washington Mutual.......................29
5.1. Corporate Organization.............................................29
5.2. Capitalization.....................................................29
5.3. Authority; No Violation............................................30
5.4. Consents and Approvals.............................................31
5.5. Reports............................................................31
5.6. Financial Statements...............................................31
5.7. Broker's Fees......................................................32
5.8. Absence of Certain Changes or Events...............................32
5.9. Legal Proceedings..................................................32
5.10. SEC Reports........................................................32
5.11. Compliance With Applicable Law.....................................33
5.12. Agreements With Regulatory Agencies................................33
5.13. Undisclosed Liabilities............................................33
5.14. Washington Mutual Information......................................33
6. Covenants Relating to Conduct of Business.................................34
6.1. Conduct of Business Prior to the Effective Time....................34
6.2. Dime Forbearances..................................................34
6.3. No Fundamental Washington Mutual Changes...........................38
6.4. Dividends..........................................................39
7. Additional Agreements.....................................................39
7.1. Regulatory Matters.................................................39
7.2. Access to Information..............................................40
7.3. Stockholder Approval...............................................41
7.4. Legal Conditions to Merger.........................................42
7.5. Affiliates.........................................................42
7.6. Stock Exchange Listing.............................................42
7.7. Employees; Employee Benefit Plans..................................43
7.8. Indemnification; Directors' and Officers' Insurance................45
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7.9. Advice of Changes; Other Matters...................................46
7.10. Subsequent Interim and Annual Financial Statements.................46
7.11. Reorganization.....................................................47
7.12. Exemption From Liability Under Section 16(b).......................47
7.13. Warrant Agreement Assumption.......................................47
7.14. Board of Directors.................................................47
7.15. Insider Loan Disclosure............................................48
7.16. Insurance Disclosure...............................................48
7.17. Management Consultation Meetings and Distribution of Information...48
7.18. Redesign of Branches...............................................48
8. Conditions Precedent......................................................48
8.1. Conditions to Each Party's Obligation to Effect the Merger.........48
8.2. Conditions to Obligations of Washington Mutual.....................49
8.3. Conditions to Obligations Of Dime..................................50
9. Termination and Amendment.................................................51
9.1. Termination........................................................51
9.2. Effect of Termination..............................................52
9.3. Amendment..........................................................53
9.4. Extension; Waiver..................................................53
10. General Provisions........................................................54
10.1. Nonsurvival of Representations, Warranties and Agreements..........54
10.2. Expenses...........................................................54
10.3. Notices............................................................54
10.4. Interpretation.....................................................55
10.5. Counterparts.......................................................55
10.6. Entire Agreement...................................................55
10.7. Governing Law......................................................55
10.8. Severability.......................................................55
10.9. Publicity..........................................................56
10.10. Assignment; Third Party Beneficiaries..............................56
EXHIBITS
Exhibit A - Voting/Purchase Agreement
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AGREEMENT AND PLAN OF MERGER
This AGREEMENT AND PLAN OF MERGER, dated as of June 25, 2001 (as
amended, supplemented or otherwise modified from time to time, this
"Agreement"), is entered into by and between Washington Mutual, Inc., a
Washington corporation ("Washington Mutual"), and Dime Bancorp, Inc., a Delaware
corporation ("Dime").
The respective Boards of Directors of each of Washington Mutual and
Dime have determined that it is in the best interests of their respective
companies and stockholders to consummate the business combination transaction
provided for herein. It is the intention of the parties to this Agreement that
the business combination contemplated hereby be treated as a "reorganization"
within the meaning of Section 368(a) of the Internal Revenue Code of 1986, as
amended (the "Code").
Simultaneously with the execution of this Agreement, Washington Mutual
is entering into an agreement with Warburg, Pincus Equity Partners, L.P.
("Warburg") in the form of Exhibit A hereto (the "Voting/Purchase Agreement")
pursuant to which Warburg has agreed, among other things, to vote its shares of
Dime Common Stock in favor of the adoption of this Agreement and to sell to
Washington Mutual on the Closing Date (as defined below) all of the warrants it
holds to purchase Dime securities, all on the terms set forth therein.
Therefore, in consideration of the mutual covenants, representations,
warranties and agreements contained herein, and intending to be legally bound
hereby, the parties agree as follows:
1. Definitions
1.1. Defined Terms. The following terms shall have the meanings defined
for such terms in the Sections set forth below:
TERM SECTION
401(k) Plan............................................7.7(b)
Acquisition Proposal...................................6.2(f)
Agreement..............................................Preamble
Articles of Merger.....................................2.2
Average Market Price...................................2.5(b)
BIF....................................................4.1(c)
Business Day...........................................2.4
Cash Conversion Shares.................................2.6
Cash Election Price....................................2.5(c)
Cash Percentage........................................2.6
Cash Proration Factor..................................2.6
Certificate............................................3.2
Certificate of Merger..................................2.2
Change in Dime Recommendation..........................7.3(a)
Closing................................................2.4
Closing Date...........................................2.4
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Code...................................................Preamble
Confidentiality Agreement..............................7.2(b)
Controlled Entity......................................4.2(b)
Covered Employees......................................7.7(a)
Deemed Shares..........................................2.6
Delaware Secretary.....................................2.2
DGCL...................................................2.1
Dime...................................................Preamble
Dime Cash Election Shares..............................2.6
Dime Common Stock......................................2.5(a)
Dime Contract..........................................4.14(a)
Dime Disclosure Schedule...............................4.2(a)
Dime Insiders..........................................7.12
Dime Member............................................7.7(f)
Dime Option............................................2.9(a)
Dime Phantom Stock Plans...............................2.10
Dime Preferred Stock...................................4.2(a)
Dime Reports...........................................4.12
Dime Rights............................................2.5(b)
Dime Savings Bank......................................4.1(c)
Dime Stock Election Shares.............................2.6
Dime Stockholders Meeting..............................7.3
Dime Stock Option Plans................................2.9(a)
Director Committee.....................................7.7(f)
Director Umbrella Trusts...............................4.11(g)
Dissenting Shareholder.................................2.5(d)
Dissenting Shares......................................2.5(d)
Effective Time.........................................2.2
Election Deadline......................................2.6
Election Form..........................................2.6
ELP....................................................2.10
Employee Committee.....................................7.7(f)
Employee Umbrella Trusts...............................4.11(g)
Environmental Laws.....................................4.21
ERISA..................................................4.11(a)
ERISA Affiliate........................................4.11(a)
ETC....................................................2.10
Exchange Act...........................................4.6
Exchange Agent.........................................2.6
Exchange Fund..........................................3.1
Exchange Ratio.........................................2.5(b)
Expense Amount.........................................9.2(b)
Extension Notice.......................................2.4
FDIC...................................................4.1(c)
FHLB...................................................4.1(c)
Freddie Mac............................................4.24(b)
GAAP...................................................4.1(a)
Ginnie Mae.............................................4.24(b)
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Governmental Entity....................................4.4
HOLA...................................................4.1(a)
HUD....................................................4.24(b)
Indemnified Parties....................................7.8(a)
Injunction.............................................8.1(e)
Insurance Amount.......................................7.8(c)
Liens..................................................4.2(b)
Loans..................................................7.15
LTW....................................................2.10
Material Adverse Effect................................4.1(a)
Merger.................................................2.1
Merger Consideration...................................2.15
NYSE...................................................2.7
Option Conversion Ratio................................2.9(a)
OTS....................................................4.4
PBGC...................................................4.11(c)
Per Share Consideration Value..........................2.5(b)
Plans..................................................4.11(a)
Proxy Statement/Prospectus.............................4.4
Regulatory Agreement...................................4.15
Representatives........................................6.2(f)
Requisite Regulatory Approvals.........................8.1(c)
Restricted Share.......................................2.9(b)
Rights Plan............................................4.2(a)
S-4....................................................4.18
SAIF...................................................4.1(c)
SEC....................................................4.4
Second Merger..........................................7.1(b)
Section 16 Information.................................7.12
Securities Act.........................................4.12
Stock Conversion Shares................................2.6
Stock Percentage.......................................2.6
Stock Proration Factor.................................2.6
Subsidiary.............................................4.1(a)
Superior Proposal......................................6.2(f)
Surviving Company......................................2.1
Tax Return.............................................4.10(k)
Taxes..................................................4.10(j)
Termination Fee........................................9.2(b)
Umbrella Trust Agreements..............................4.11(g)
VA.....................................................4.24(b)
Valuation Period.......................................2.5(b)
Voting/Purchase Agreement..............................Preamble
Warburg................................................Preamble
Warburg Agreement......................................4.2(a)
Warrant Agent..........................................2.10
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Warrant Agreement......................................2.10
Warrant Holder.........................................2.6
Washington Mutual......................................Preamble
Washington Mutual Common Stock.........................2.5(a)
Washington Mutual Disclosure Schedule..................5.2
Washington Mutual Regulatory Agreement.................5.12
Washington Mutual Reports..............................5.10
Washington Mutual Rights...............................2.5(b)
Washington Mutual Rights Agreement.....................5.2
Washington Mutual Share Price..........................2.7
Washington Secretary...................................2.2
WBCA...................................................2.1
1.2. Other Definitional Provisions. The meanings given to terms defined
herein shall be equally applicable to both the singular and plural forms of such
terms.
2. The Merger
2.1. The Merger. Subject to the terms and conditions of this Agreement,
in accordance with the Washington Business Corporation Act (the "WBCA") and the
Delaware General Corporation Law (the "DGCL") at the Effective Time (as defined
in Section 2.2 hereof), Dime shall merge (the "Merger") with and into Washington
Mutual. Washington Mutual shall be the surviving corporation (hereinafter
sometimes called the "Surviving Company") in the Merger, and shall continue its
corporate existence under the laws of the State of Washington. The name of the
Surviving Company shall be Washington Mutual, Inc. Upon consummation of the
merger, the separate corporate existence of Dime shall terminate.
2.2. Effective Time. The Merger shall become effective as set forth in
the articles of merger (the "Articles of Merger") which shall be filed with the
Secretary of State of the State of Washington (the "Washington Secretary") and
in the certificate of merger (the "Certificate of Merger") which shall be filed
with the Secretary of State of the State of Delaware (the "Delaware Secretary"),
on the Closing Date (as defined in Section 2.4 hereof). The term "Effective
Time" shall mean the time on the Closing Date when the Merger becomes effective,
as set forth in the Articles of Merger and the Certificate of Merger.
2.3. Effects of the Merger. At and after the Effective Time, the Merger
shall have the effects set forth in the WBCA and the DGCL.
2.4. Closing of the Merger. Subject to the terms and conditions of this
Agreement, except as provided in the following paragraph, the closing of the
Merger (the "Closing") will take place at the offices of Simpson Thacher &
Bartlett at 425 Lexington Avenue, New York, New York at 9:00 a.m. Pacific time
on the first Friday which is a Business Day occurring 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 Section 8 hereof, other than conditions
which by their terms are to be satisfied at Closing, or such other date or time
as the parties may mutually agree (the "Closing Date"). For purposes of this
Agreement, a "Business Day" shall mean any day that is
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not a Saturday, a Sunday or other day on which the office of the Washington
Secretary or the Delaware Secretary is closed.
If the Closing shall not have occurred prior to January 4, 2002, at any
time during the five- Business Day period beginning on the first Business Day
following the satisfaction of the conditions set forth in Sections 8.1 and 8.2
(other than conditions which by their terms are to be satisfied at Closing),
Washington Mutual may deliver a notice to Dime (the "Extension Notice")
specifying that the Closing Date shall be January 4, 2002. Upon receipt of the
Extension Notice, Dime shall within five Business Days deliver to Washington
Mutual a certificate signed on behalf of Dime by the Chief Executive Officer and
Chief Financial Officer of Dime to the effect set forth in Section 8.2(a) as of
such date of delivery. If the certificate referred to in the immediately
preceding sentence has been delivered in response to an Extension Notice, the
certificate contemplated to be delivered at Closing pursuant to Section 8.2(a)
will be required to certify only that there have been no intentional breaches of
the representations and warranties contained in Section 4, subject to the
standard in the proviso contained in Section 8.2(a), and upon delivery thereof
Section 8.2(a) will be deemed satisfied.
2.5. Conversion of Dime Capital Stock. At the Effective Time, without
any action on the part of Washington Mutual, Dime or the holder of any of the
shares of common stock of Dime, the Merger shall be effected in accordance with
the following terms:
(a) All shares of common stock, par value $0.01 per share, of Dime
(the "Dime Common Stock") owned directly by Dime (including treasury
shares) or Washington Mutual (other than shares in trust accounts,
managed accounts and the like or shares held in satisfaction of a debt
previously contracted) shall be cancelled and retired and shall not
represent capital stock of the Surviving Company and shall not be
exchanged for shares of common stock, no par value, of Washington
Mutual ("Washington Mutual Common Stock"), cash or other consideration.
(b) Each outstanding share of Dime Common Stock together with the
associated rights (the "Dime Rights") issued pursuant to the Rights
Plan (as defined in Section 4.2(a)) which under the terms of Section
2.6 is to be converted into the right to receive shares of Washington
Mutual Common Stock shall, subject to Section 2.7, be converted into
and become the right to receive a number of shares of Washington Mutual
Common Stock (together with the requisite number of rights (the
"Washington Mutual Rights") issued pursuant to the Washington Mutual
Rights Agreement (as defined in Section 5.2)) equal to the Cash
Election Price divided by the Average Market Price (the "Exchange
Ratio"). For purposes of this Agreement, "Average Market Price" shall
mean the average of the closing prices of shares of Washington Mutual
Common Stock as reported on the New York Stock Exchange Composite
Transactions Tape for the ten consecutive full trading days (the
"Valuation Period") ending on the tenth Business Day prior to the
Closing Date. The Average Market Price shall be calculated to the
nearest one-hundredth of one cent and the Exchange Ratio shall be
calculated to the nearest ten thousandth.
(c) Each outstanding share of Dime Common Stock which under the
terms of Section 2.6 is to be converted into the right to receive cash
shall be converted into the
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right to receive the sum of (x) 0.715341 times 1.05 times the Average
Market Price and (y) 0.284659 times $40.8366 (the "Cash Election
Price").
(d) Each outstanding share of Dime Common Stock the holder of
which has perfected his right to dissent under applicable law and has
not effectively withdrawn or lost such right as of the Effective Time
(the "Dissenting Shares") shall not be converted into or represent a
right to receive shares of Washington Mutual Common Stock or cash
hereunder, and the holder thereof shall be entitled only to such rights
as are granted by applicable law. Dime shall give Washington Mutual
prompt notice upon receipt by Dime of any such demands for payment of
the fair value of such shares of Dime Common Stock and of withdrawals
of such notice and any other instruments provided pursuant to
applicable law (any shareholder duly making such demand being
hereinafter called a "Dissenting Shareholder"), and Washington Mutual
shall have the right to participate in all negotiations and proceedings
with respect to any such demands. Dime shall not, except with the prior
written consent of Washington Mutual, voluntarily make any payment with
respect to, or settle or offer to settle, any such demand for payment,
or waive any failure to timely deliver a written demand for appraisal
or the taking of any other action by such Dissenting Shareholder as may
be necessary to perfect appraisal rights under the DGCL. Any payments
made in respect of Dissenting Shares shall be made by the Surviving
Company.
(e) If any Dissenting Shareholder shall effectively withdraw or
lose (through failure to perfect or otherwise) his right to such
payment at or prior to the Effective Time, such holder's shares of Dime
Common Stock shall be converted into a right to receive cash or
Washington Mutual Common Stock in accordance with the applicable
provisions of this Agreement. If such holder shall effectively withdraw
or lose (through failure to perfect or otherwise) his right to such
payment after the Effective Time, each share of Dime Common Stock of
such holder shall be converted on a share by share basis into either
the right to receive the Cash Election Price or Washington Mutual
Common Stock as Washington Mutual shall determine in its sole
discretion.
(f) The Exchange Ratio set forth above shall be subject to
appropriate adjustments in the event that, subsequent to the date of
this Agreement but prior to the Effective Time, the outstanding
Washington Mutual Common Stock shall have been increased, decreased,
changed into or exchanged for a different number or kind of shares or
securities through reorganization, recapitalization, reclassification,
stock dividend, stock split, reverse stock split, or other like changes
in Washington Mutual's capitalization.
2.6. Election Procedures. An election form as Washington Mutual and
Dime shall mutually agree ("Election Form") will be sent no later than 15
Business Days prior to the expected Effective Time (provided that it need not be
sent until the Requisite Regulatory Approvals (as defined in Section 8.1(c))
have been obtained) to each holder of record of Dime Common Stock and to each
holder of record of warrants (each, a "Warrant Holder") with respect to Deemed
Shares (as defined in the Voting/Purchase Agreement) permitting such holder (or
in the case of nominee record holders, the beneficial owner through proper
instructions and documentation) (i) to elect to receive Washington Mutual Common
Stock with respect to each
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share of such holder's Dime Common Stock as provided herein or, in the case of
each Warrant Holder, Deemed Shares as provided herein (the "Dime Stock Election
Shares") or (ii) to elect to receive cash with respect to each share of such
holder's Dime Common Stock as provided herein or, in the case of each Warrant
Holder, with respect to the Deemed Shares as provided herein (the "Dime Cash
Election Shares"). Any shares of Dime Common Stock or Deemed Shares with respect
to which the holder thereof or the Warrant Holder shall not, as of the Election
Deadline, have made such an election by submission to an exchange agent that
Washington Mutual shall designate with Dime's reasonable consent (the "Exchange
Agent"), on an effective, properly completed Election Form shall be deemed to be
Dime Stock Election Shares. Any Dissenting Shares shall be deemed to be Dime
Cash Election Shares, and with respect to such shares the holders thereof shall
in no event receive consideration comprised of Washington Mutual Common Stock.
The term "Election Deadline", as used below, shall mean 5:00 p.m.,
Eastern time, on the 20th Business Day following but not including the date of
mailing of the Election Form or such other date as Dime and Washington Mutual
shall mutually agree upon.
Any election to receive Washington Mutual Common Stock or cash shall
have been properly made only if the Exchange Agent shall have actually received
a properly completed Election Form by the Election Deadline. Any Election Form
may be revoked or changed by the person submitting such Election Form to the
Exchange Agent by written notice to the Exchange Agent only if such notice is
actually received by the Exchange Agent at or prior to the Election Deadline.
The certificate or certificates representing Dime Common Stock relating to any
revoked Election Form shall be promptly returned without charge to the person
submitting the Election Form to the Exchange Agent. The Exchange Agent shall
have discretion to determine when any election, modification or revocation is
received and whether any such election, modification or revocation has been
properly made.
Within five Business Days after the Election Deadline, the Exchange
Agent shall calculate the allocation among holders of Dime Common Stock (and
each Warrant Holder with respect to Deemed Shares) of rights to receive
Washington Mutual Common Stock or cash in the Merger in accordance with the
Election Forms as follows:
(i) If the number of Dime Cash Election Shares is greater than the
quotient of (x) $1,428,809,000 divided by (y) the Cash Election Price
(the "Cash Conversion Shares"), then:
(1) all Dime Stock Election Shares will be converted into the
right to receive Washington Mutual Common Stock, and
(2) each Dime Cash Election Share will be converted into the
right to receive Washington Mutual Common Stock and cash in the
following manner:
(A) a proration factor (the "Cash Proration Factor")
shall be determined by dividing (x) $1,428,809,000 , by (y)
the product of the number of Dime Cash Election Shares
multiplied by the Cash Election Price;
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(B) the number of Dime Cash Election Shares held by each
holder of shares of Dime Common Stock that will be converted
into the right to receive cash pursuant to the terms of
Section 2.5(c) shall be determined by multiplying the Cash
Proration Factor by the number of Dime Cash Election Shares
held by such holder; and
(C) all Dime Cash Election Shares other than those
shares converted into the right to receive cash in accordance
with the preceding subparagraph (B) shall be converted into
the right to receive Washington Mutual Common Stock in
accordance with the terms of Section 2.5(b); or
(ii) If the number of Dime Cash Election Shares is less than the
Cash Conversion Shares, then:
(1) all Dime Cash Election Shares (subject to the provisions
of Section 2.5(d) with respect to any Dissenting Shares) will be
converted into the right to receive cash, and
(2) each Dime Stock Election Share will be converted into the
right to receive Washington Mutual Common Stock and cash in the
following manner:
(A) a proration factor (the "Stock Proration Factor")
shall be determined by dividing the Stock Conversion Shares
(as defined below) by the number of Dime Stock Election
Shares. The "Stock Conversion Shares" shall mean the
difference between (x) the total number of shares of Dime
Common Stock outstanding immediately prior to the Effective
Time plus the Deemed Shares minus (y) the Cash Conversion
Shares;
(B) the number of Dime Stock Election Shares held by
each holder of shares of Dime Common Stock that will be
converted into the right to receive shares of Washington
Mutual Common Stock pursuant to the terms of Section 2.5(b)
shall be determined by multiplying the Stock Proration Factor
by the number of Dime Stock Election Shares held by such
holder; and
(C) all Dime Stock Election Shares other than those
shares converted into the right to receive Washington Mutual
Common Stock in accordance with the preceding subparagraph
(B) shall be converted into the right to receive cash in
accordance with the terms of Section 2.5(c); or
(iii) If the number of Dime Stock Election Shares is equal to
the number of Stock Conversion Shares and the number of Dime Cash
Election Shares is equal to the number of Cash Conversion Shares,
then subparagraphs (i) and (ii) above shall not apply and all Dime
Stock Election Shares will be converted into the right to receive
Washington Mutual Common Stock and all Dime Cash Election Shares
(subject to the provisions of Section 2.5(d)) will be converted
into the right to receive cash.
2.7. No Fractional Shares. Notwithstanding any other provision of this
Agreement, neither certificates nor scrip for fractional shares of Washington
Mutual Common Stock shall be
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issued in the Merger. Each holder who otherwise would have been entitled to a
fraction of a share of Washington Mutual Common Stock 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
(after taking into account all shares of Dime Common Stock owned by such holder
at the Effective Time) by the Washington Mutual Share Price . The "Washington
Mutual Share Price " shall mean the average of the closing sale prices of one
share of Washington Mutual Common Stock for the ten trading days immediately
preceding the Closing Date on the New York Stock Exchange (the "NYSE") as
reported by The Wall Street Journal. No such holder shall be entitled to
dividends, voting rights or any other rights in respect of any fractional share.
2.8. Washington Mutual Common Stock; Washington Mutual Preferred Stock.
At and after the Effective Time, each share of Washington Mutual Common Stock
and each share of any preferred stock of Washington Mutual issued and
outstanding immediately prior to the Effective Time shall remain an issued and
outstanding share of common stock or preferred stock, as the case may be, of
Washington Mutual and shall not be affected by the Merger.
2.9. Treatment of Options and Other Stock-Based Awards. (a) At the
Effective Time, each option granted or heretofore assumed by Dime to purchase
shares of Dime Common Stock (each an "Dime Option") which is outstanding and
unexercised (whether or not exercisable) immediately prior thereto shall cease
to represent a right to acquire shares of Dime Common Stock and shall be
converted automatically into an option to purchase shares of Washington Mutual
Common Stock in an amount and at an exercise price determined as provided below
(and otherwise shall remain subject to the terms of the Dime Stock Incentive
Plan, as amended to the date hereof, the Dime 1991 Stock Incentive Plan, as
amended to the date hereof, the Dime Stock Incentive Plan for Outside Directors,
as amended to the date hereof, the Dime 1992 Stock Option Plan, as amended to
the date hereof, the Dime 1990 Stock Option Plan, as amended to the date hereof,
the Dime 1997 Stock Incentive Plan, as amended to the date hereof, the Dime 1997
Stock Incentive Plan for Outside Directors, as amended to the date hereof, the
Dime Pride Shares Program, as amended to the date hereof, the Dime Pride Shares
II Program, as amended to the date hereof, the Dime 1993 Employee Stock Purchase
Plan, as amended to the date hereof, and the North American Mortgage Company
Incentive Stock Option Plan, as amended to the date hereof, as applicable
(collectively, the "Dime Stock Option Plans"), and the agreements or letters
evidencing grants thereunder):
(i) the number of shares of Washington Mutual Common Stock to
be subject to the converted option shall be equal to the product
of (x) the number of shares of Dime Common Stock subject to the
Dime Option and (y) the Exchange Ratio (the "Option Conversion
Ratio"), provided that any fractional shares of Washington Mutual
Common Stock resulting from such multiplication shall be rounded
up to the nearest whole share; and
(ii) the exercise price per share of Washington Mutual Common
Stock under the converted option shall be equal to the exercise
price per share of Dime Common Stock under the Dime Option divided
by the Option Conversion Ratio, provided that such exercise price
shall be rounded down to the nearest cent.
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<PAGE> 14
In the case of any Dime Options which are "incentive stock
options" (as defined in Section 422 of the Code), the exercise price,
the number of shares purchasable pursuant to such options and the terms
and conditions of exercise of such options shall be determined in order
to comply with Section 424(a) of the Code and to avoid a "modification"
of any such option under Code Section 424(h). Except as otherwise
provided in this Section 2.9, the duration and other terms of each
converted option shall be the same as the applicable Dime Option except
that all references to Dime shall be deemed to be references to
Washington Mutual.
In addition to the foregoing, in the event that any Dime
Option has associated with it a stock appreciation right and/or limited
stock appreciation right, the number and kind of shares subject to such
right and the exercise price thereof shall be adjusted in the same
manner as provided above for such Dime Option, and the terms and
conditions thereof shall otherwise remain the same as they were
immediately prior to the Effective Time.
(b) At the Effective Time, each share of restricted stock (a
"Restricted Share" and, collectively, the "Restricted Shares")
outstanding as of the Effective Time and issued pursuant to a Dime
Stock Option Plan or any other equity-based plans or agreements of or
with Dime or any of its Subsidiaries providing for the grant of
Restricted Share awards, to the extent not already vested, shall vest
and shall represent a right to receive the same rights provided to
other holders of Dime Common Stock pursuant to Section 2.5 above.
(c) Except as provided herein or as otherwise agreed to by the
parties, the Dime Stock Option Plans and any other plan, program or
arrangement providing for the issuance or grant of any other interest
in respect of the capital stock of Dime or any Subsidiary thereof shall
terminate as of the Effective Time, and Dime shall ensure that
following the Effective Time no holder of a Dime Option nor any holder
of a Restricted Share or any other equity-based right shall have any
right to acquire equity securities of Dime or the Surviving Corporation
(except to the extent required under any qualified plan maintained by
Dime or any of its Subsidiaries).
2.10. Litigation Tracking Warrant Conversion. At and following the
Effective Time, each outstanding Litigation Tracking Warrant ("LTW") issued by
Dime pursuant to the Warrant Agreement, dated as of December 21, 2000 (the
"Warrant Agreement"), among Dime, the EquiServe Trust Company, N.A. ("ETC") and
EquiServe Limited Partnership ("ELP", and together with ETC, the "Warrant
Agent") shall entitle the holder thereof to receive upon exercise of such LTW in
accordance with the terms of the Warrant Agreement Merger Consideration
consistent with the terms thereof. In addition, in accordance with the
provisions of the Dime Stock Option Plans and the Dime Voluntary Deferred
Compensation Plan, the Dime Voluntary Deferred Compensation Plan for Directors,
the Deferred Compensation Plan for Board Members of The Dime Savings Bank of New
York, FSB, and the Benefit Restoration Plan of The Dime Savings Bank of New
York, FSB (the "Dime Phantom Stock Plans"), any Dime Options, shares of
restricted Dime Common Stock, and any other Dime equity-based compensation
(including the phantom Dime Common Stock provided for in the Dime Phantom Stock
Plans) that are outstanding immediately prior to the Effective Time and that, as
of such time, entitle the holder
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<PAGE> 15
thereof to receive LTWs (or, as applicable, the economic value of such LTWs),
shall at and following the Effective Time entitle the holder or beneficiary
thereof to receive LTWs (or, as applicable, their economic value), representing
the right to receive shares of Washington Mutual Common Stock upon the exercise
of such LTWs, consistent with the methodology and procedures described in
resolutions heretofore adopted by the Board of Directors and Compensation
Committee of Dime.
2.11. Articles of Incorporation. At the Effective Time, the Articles of
Incorporation of Washington Mutual, as in effect immediately prior to the
Effective Time, shall be the Articles of Incorporation of the Surviving Company,
until thereafter amended in accordance with applicable law.
2.12. Bylaws. At the Effective Time, the Bylaws of Washington Mutual,
as in effect immediately prior to the Effective Time, shall be the Bylaws of the
Surviving Company until thereafter amended in accordance with applicable law.
2.13. Board of Directors. Subject to Section 7.14, the directors of
Washington Mutual immediately prior to the Effective Time shall continue to be
the directors of the Surviving Company, each to hold office in accordance with
the Articles of Incorporation and Bylaws of the Surviving Company, until their
respective successors are duly elected or appointed (as the case may be) and
qualified.
2.14. Tax Consequences. It is intended that the Merger shall constitute
a reorganization within the meaning of Section 368(a) of the Code, and that this
Agreement shall constitute a "plan of reorganization" as that term is used in
Sections 354 and 361 of the Code.
2.15. Reservation of Right to Revise Structure. Washington Mutual may
at any time change the method of effecting the business combination contemplated
by this Agreement if and to the extent that it deems such a change to be
desirable, including, without limitation, to provide for a merger of Dime with a
wholly owned subsidiary of Washington Mutual; provided, however, that no such
change shall (A) alter or change the amount or kind of consideration to be
received by holders of Dime Common Stock under this Agreement (the "Merger
Consideration") or their method of electing such Merger Consideration, or (B)
adversely affect the anticipated tax consequences of the Merger to the holders
of Dime Common Stock as a result of receiving the Merger Consideration, or (C)
materially impede or delay consummation of the Merger. In the event Washington
Mutual elects to make such a change, the parties agree to execute appropriate
documents to reflect the change.
3. Exchange of Certificates for Merger Consideration
3.1. Washington Mutual to Make Merger Consideration Available. At or
promptly after the Election Deadline (but in no event prior to the Effective
Time), Washington Mutual shall deposit, or shall cause to be deposited, with the
Exchange Agent, for the benefit of the holders of Certificates (as defined
below) and for the benefit of each Warrant Holder in respect of the purchase
price under the Voting/Purchase Agreement, for exchange in accordance with this
Section 3, certificates representing the shares of Washington Mutual Common
Stock and an estimated amount of cash sufficient to pay the aggregate Cash
Election Price payable hereunder
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<PAGE> 16
and thereunder and any cash that may be payable in lieu of any fractional shares
(such cash and certificates for shares of Washington Mutual Common Stock,
together with any dividends or distributions with respect thereto, being
hereinafter referred to as the "Exchange Fund").
3.2. Exchange of Shares.
(a) As soon as practicable after the Effective Time, the Exchange
Agent shall mail to each holder of record of a certificate formerly
representing shares of Dime Common Stock (a "Certificate") a form of
letter of transmittal (which shall specify that delivery shall be
effected, and risk of loss and title to the Certificates shall pass,
only upon delivery of the Certificates to the Exchange Agent) and
instructions for use in effecting the surrender of the Certificates in
exchange for certificates representing, as the case may be, the shares
of Washington Mutual Common Stock, cash in respect of the Cash Election
Price and cash in lieu of fractional shares of Washington Mutual Common
Stock, if any, into which the shares of Dime Capital Stock represented
by such Certificate or Certificates shall have been converted pursuant
to this Agreement. Upon proper surrender of a Certificate for exchange
and cancellation to the Exchange Agent, together with a properly
completed letter of transmittal, duly executed, the holder of such
Certificate shall be entitled to receive in exchange therefor, as
applicable, (i) a certificate representing that number of shares of
Washington Mutual Common Stock (if any) to which such former holder of
Dime Common Stock shall have become entitled pursuant to the provisions
of Section 2 hereof, (ii) a check representing that amount of cash (if
any) to which such former holder of Dime Common Stock shall have become
entitled in respect of the Cash Election Price pursuant to the
provisions of Section 2 hereof and (iii) a check representing the
amount of cash (if any) payable in lieu of fractional shares of
Washington Mutual Common Stock, which such former holder has the right
to receive in respect of the Certificate surrendered pursuant to the
provisions of this Section 3, and the Certificate so surrendered shall
forthwith be cancelled. No interest will be paid or accrued on the cash
payable in lieu of fractional shares.
(b) No dividends or other distributions with a record date after
the Effective Time with respect to Washington Mutual Common Stock shall
be paid to the holder of any unsurrendered Certificate until the holder
thereof shall surrender such Certificate in accordance with this
Section 3. After the surrender of a Certificate in accordance with this
Section 3, the record holder thereof shall be entitled to receive any
such dividends or other distributions, without any interest thereon,
which theretofore had become payable with respect to shares of
Washington Mutual Common Stock represented by such Certificate.
(c) If any certificate representing shares of Washington Mutual
Common Stock is to be issued in the name of other than the registered
holder of the Certificate surrendered in exchange therefor, it shall be
a condition of the issuance thereof that the Certificate so surrendered
shall be properly endorsed (or accompanied by an appropriate instrument
of transfer) and otherwise in proper form for transfer, and that the
person requesting such exchange shall pay to the Exchange Agent in
advance any transfer or other taxes required by reason of the issuance
of a certificate representing shares of Washington Mutual Common Stock
in the name of and payment of cash to any person
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<PAGE> 17
other than the registered holder of the Certificate surrendered, or
required for any other reason relating to such holder or requesting
person, or shall establish to the reasonable satisfaction of the
Exchange Agent that such tax has been paid or is not payable.
(d) At or after the Effective Time, there shall be no transfers on
the stock transfer books of Dime of the shares of Dime Capital Stock
which were issued and outstanding immediately prior to the Effective
Time. If, after the Effective Time, Certificates representing such
shares are presented for transfer to the Exchange Agent, they shall be
cancelled and exchanged for certificates representing shares of
Washington Mutual Common Stock or payment of cash as provided in this
Section 3.
(e) Any portion of the Exchange Fund that remains unclaimed by the
stockholders of Dime for six months after the Effective Time shall be
paid, at the request of Washington Mutual, to Washington Mutual. Any
stockholders of Dime who have not theretofore complied with this
Section 3 shall thereafter look only to Washington Mutual for payment
of the shares of Washington Mutual Common Stock, cash, cash in lieu of
any fractional shares and unpaid dividends and distributions on the
Washington Mutual Common Stock deliverable in respect of each share of
Dime Common Stock held by such stockholder at the Effective Time as
determined pursuant to this Agreement, in each case, without any
interest thereon. Notwithstanding anything to the contrary contained
herein, none of Washington Mutual, Dime, the Exchange Agent or any
other person shall be liable to any former holder of shares of Dime
Common Stock, for any amount properly delivered to a public official
pursuant to applicable abandoned property, escheat or similar laws.
(f) In the event any Certificate shall have been lost, stolen or
destroyed, upon the making of an affidavit of that fact by the person
claiming such Certificate to be lost, stolen or destroyed and, if
required by Washington Mutual, the posting by such person of a bond in
such amount as Washington Mutual may determine is reasonably necessary
as indemnity against any claim that may be made against it with respect
to such Certificate, the Exchange Agent will issue in exchange for such
lost, stolen or destroyed Certificate the shares of Washington Mutual
Common Stock, cash and cash in lieu of fractional shares deliverable in
respect thereof pursuant to this Agreement.
(g) As soon as practicable after the Election Deadline, the
Exchange Agent shall deliver to each Warrant Holder (i) a certificate
representing that number of shares of Washington Mutual Common Stock
(if any) and a check representing the amount of cash (if any) in
respect of the Cash Election Price to which each Warrant Holder would
have become entitled pursuant to Section 2 hereof with respect to the
Deemed Shares if the Deemed Shares were outstanding shares of Dime
Common Stock as of the Effective Time, and (ii) a check representing
the amount of cash (if any) payable in lieu of fractional shares of
Washington Mutual Common Stock to which each Warrant Holder would have
become entitled pursuant to Section 2.7 with respect to the Deemed
Shares if the Deemed Shares were outstanding shares of Dime Common
Stock as of the Effective Time.
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<PAGE> 18
(h) Washington Mutual or the Exchange Agent will be entitled to
deduct and withhold from the consideration otherwise payable pursuant
to this Agreement or the transactions contemplated hereby to any holder
of Dime Common Stock or to any Warrant Holder such amounts as
Washington Mutual (or any Affiliate thereof) or the Exchange Agent are
required to deduct and withhold with respect to the making of such
payment under the Code, or any applicable provision of U.S. federal,
state, local or non-U.S. tax law. To the extent that such amounts are
properly withheld by Washington Mutual or the Exchange Agent, such
withheld amounts will be treated for all purposes of this Agreement as
having been paid to the holder of the Dime Common Stock or to any
Warrant Holder in respect of whom such deduction and withholding were
made by Washington Mutual or the Exchange Agent.
4. Representations and Warranties of Dime.
Dime hereby represents and warrants to Washington Mutual as follows:
4.1. Corporate Organization.
(a) Dime is a corporation duly organized, validly existing and in
good standing under the laws of the State of Delaware. Dime has the
corporate power and authority to own or lease all of its properties and
assets and to carry on its business as it is now being conducted, and
is duly licensed or qualified to do business in each jurisdiction in
which the nature of the business conducted by it or the character or
location of the properties and assets owned or leased by it makes such
licensing or qualification necessary, except where the failure to be so
licensed or qualified would not have nor reasonably be expected to have
a Material Adverse Effect (as defined below) on Dime. As used in this
Agreement, the term "Material Adverse Effect" means, with respect to
Dime, Washington Mutual or the Surviving Corporation, as the case may
be, a material adverse effect on the business, results of operations or
financial condition of such party and its Subsidiaries taken as a whole
or a material adverse effect on such party's ability to consummate the
transactions contemplated hereby on a timely basis; provided, however,
that in determining whether a Material Adverse Effect has occurred,
there shall be excluded any effect on the referenced party the cause of
which is (i) any change in banking, savings association and similar
laws, rules or regulations of general applicability or interpretations
thereof by courts or governmental authorities, (ii) any change in
generally accepted accounting principles ("GAAP") or regulatory
accounting requirements applicable to banks, savings associations, or
their holding companies generally, (iii) the announcement of this
Agreement or any action of either party or any Subsidiary thereof
required to be taken by it under this Agreement and (iv) any changes in
general economic conditions affecting banks, savings associations, or
their holding companies generally, provided that the effect of such
changes described in this clause (iv) (including, without limitation,
changes in the interest rates) shall not be excluded to the extent of
any materially disproportionate impact (if any) they have on such
party. For purposes of this Agreement, "Subsidiary" means, with respect
to any person, any corporation, partnership, joint venture, limited
liability company or any other entity that is consolidated with such
person for financial reporting purposes. Dime is duly registered as a
savings and loan holding company under the Home Owners' Loan Act, as
amended
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<PAGE> 19
("HOLA"), and qualifies as a savings and loan holding company of the
type described in Section 10(c)(3)(A) of HOLA. The copies of the
Certificate of Incorporation and Bylaws of Dime which have previously
been made available to Washington Mutual are true, complete and correct
copies of such documents as in effect as of the date of this Agreement.
(b) Each Subsidiary of Dime (i) is duly organized and validly
existing as a savings bank, corporation or partnership under the laws
of its jurisdiction of organization, (ii) is duly licensed or qualified
to do business and is in good standing in all jurisdictions (whether
federal, state, local or foreign) where its ownership or leasing of
property or the conduct of its business requires it to be so licensed
or qualified and in which the failure to be so qualified would have or
would reasonably be expected to have, either individually or in the
aggregate, a Material Adverse Effect on Dime and (iii) has all
requisite corporate power and authority to own or lease its properties
and assets and to carry on its business as now conducted.
(c) Except for its ownership of The Dime Savings Bank of New York,
FSB ("Dime Savings Bank"), Dime does not beneficially own, either
directly or through its Subsidiaries, any stock or equity interest in
any depository institution (as defined in 12 U.S.C. Section
1813(c)(1)). Dime Savings Bank is a qualified thrift lender pursuant to
Section 10(m) of HOLA and its deposits are insured by the Federal
Deposit Insurance Corporation (the "FDIC") through the Savings
Association Insurance Fund ("SAIF") and the Bank Insurance Fund ("BIF")
to the fullest extent permitted by law. Dime Savings Bank is a member
in good standing of the Federal Home Loan Bank ("FHLB") of New York.
4.2. Capitalization.
(a) The authorized capital stock of Dime consists of 350,000,000
shares of Dime Common Stock and 40,000,000 shares of preferred stock,
par value $0.01 per share, of Dime (the "Dime Preferred Stock"). As of
the close of business on June 22, 2001, there were 115,010,263 shares
of Dime Common Stock outstanding, no shares of Dime Preferred Stock
outstanding and 5,244,031 shares of Dime Common Stock held in Dime's
treasury. No other shares of Dime Common Stock or Dime Preferred Stock
were outstanding. As of the close of business on June 22, 2001, no
shares of Dime Common Stock or Dime Preferred Stock were reserved for
issuance, except for 19,471,485 shares of Dime Common Stock reserved
for issuance in connection with the LTWs, 13,607,664 shares of Dime
Common Stock reserved for issuance in connection with the Investment
Agreement, dated as of July 6, 2000, between Dime and Warburg Pincus
Equity Partners, L.P. (the "Warburg Agreement"), and 9,546,033 shares
of Dime Common Stock reserved for issuance upon the exercise of stock
options pursuant to the Dime Stock Option Plans and shares of Dime
Preferred Stock reserved for issuance upon the exercise of rights
granted under Dime's Stockholder Protection Rights Agreement, dated
as of October 20, 1995 and amended as of July 6, 2000 (the "Rights
Plan"). All of the issued and outstanding shares of Dime Common Stock
have been duly authorized and validly issued and are fully paid, n
onassessable and free of preemptive rights, with no personal liability
attaching to the ownership thereof. As of the date of this Agreement,
except (i) as set
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<PAGE> 20
forth in Section 4.2(a) of the disclosure schedule of Dime delivered to
Washington Mutual concurrently herewith (the "Dime Disclosure
Schedule"), (ii) for up to 112,975,607 LTWs, warrants to acquire
8,142.738 shares of Series C junior nonvoting convertible preferred
stock (which are convertible into 8,142,738 shares of Dime Common
Stock) and warrants to acquire 5,464.926 shares of Series D junior
nonvoting convertible preferred stock (which are convertible into
5,464,926 shares of Dime Common Stock) and (iii) as set forth elsewhere
in this Section 4.2(a), Dime 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 Dime Common Stock or Dime Preferred Stock or any other equity
securities of Dime or any securities representing the right to purchase
or otherwise receive any shares of Dime capital stock (including,
without limitation, any rights plan or agreement). Except as set forth
in Section 4.2(a) of the Dime Disclosure Schedule, since May 31, 2001,
Dime has not issued any shares of its capital stock or any securities
convertible into or exercisable for any shares of its capital stock,
other than upon the exercise of employee stock options or pursuant to
restricted stock awards granted prior to such date and disclosed in
this Section 4.2(a).
(b) Section 4.2(b) of the Dime Disclosure Schedule lists the name,
jurisdiction of incorporation, authorized and outstanding shares of
capital stock and record and beneficial owners of such capital stock
(with respect to owners other than Dime or any Dime Subsidiary, to the
extent known to Dime) for each entity in which Dime beneficially owns
or controls, directly or indirectly, any equity interest (regardless of
whether such entity is a Subsidiary) (a "Controlled Entity") that is a
Significant Subsidiary (as such term is defined in Rule 1-02 of
Regulation S-X) of Dime. Each Controlled Entity in which Dime or any
Dime Subsidiary beneficially owns or controls, directly or indirectly,
more than a 9.9% equity interest is a legal investment for a unitary
savings and loan holding company and, with respect to those owned by
Dime Savings Bank, for a federal savings association. Except as set
forth in Section 4.2(b) of the Dime Disclosure Schedule, Dime owns,
directly or indirectly, all of the issued and outstanding shares of
capital stock of or all other equity interests in each of Dime's
Subsidiaries, free and clear of any liens, charges, encumbrances,
adverse rights or claims and security interests whatsoever ("Liens"),
and all of such shares are duly authorized and validly issued and are
fully paid, nonassessable and free of preemptive rights, with no
personal liability attaching to the ownership thereof. Neither Dime nor
any Subsidiary thereof has or is bound by any outstanding
subscriptions, options, warrants, calls, commitments or agreements of
any character calling for the purchase, sale or issuance of any shares
of capital stock or any other equity security of any Subsidiary of Dime
or any securities representing the right to purchase or otherwise
receive any shares of capital stock or any other equity security of any
such Subsidiary.
(c) No bonds, debentures, notes or other indebtedness having the
right to vote on any matters on which stockholders may vote are
outstanding.
4.3. Authority; No Violation.
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<PAGE> 21
(a) Dime has full corporate power and authority to execute and
deliver this Agreement and to consummate the transactions contemplated
hereby. The Board of Directors of Dime at a meeting held on June 24,
2001 has duly (i) determined that this Agreement and the Merger are
fair to and in the best interests of Dime and its stockholders and
declared this Agreement and the Merger to be advisable, (ii) approved
the Merger, the execution and delivery of this Agreement and the
consummation of the transaction contemplated hereby and (iii)
recommended that stockholders of Dime adopt this Agreement and directed
that such matter be submitted for consideration by Dime's stockholders
at the Dime Stockholders Meeting (as defined below). Except for the
adoption of this Agreement by the affirmative vote of the holders of a
majority of the outstanding shares of Dime Common Stock, no other
corporate proceedings on the part of Dime are necessary to approve this
Agreement or to consummate the transactions contemplated hereby. This
Agreement has been duly and validly executed and delivered by Dime and
(assuming due authorization, execution and delivery by Washington
Mutual) constitutes a valid and binding obligation of Dime, enforceable
against Dime in accordance with its terms, except as enforcement may be
limited by general principles of equity whether applied in a court of
law or a court of equity and by bankruptcy, insolvency and similar laws
affecting creditors' rights and remedies generally.
(b) Neither the execution and delivery of this Agreement by Dime
nor the consummation by Dime of the transactions contemplated hereby,
nor compliance by Dime with any of the terms or provisions hereof, will
(i) violate any provision of the Certificate of Incorporation or Bylaws
of Dime or any of the similar governing documents of any of its
Subsidiaries or (ii) assuming that the consents and approvals referred
to in Section 4.4 are duly obtained, (x) violate any statute, code,
ordinance, rule, regulation, judgment, order, writ, decree or
injunction applicable to Dime 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, or require redemption or repurchase or otherwise require the
purchase or sale of any securities, constitute a default (or an event
which, with notice or lapse of time, or both, would constitute a
default) under, result in the termination of or a right of termination
or cancellation under, accelerate the performance required by, or
result in the creation of any Lien upon any of the respective
properties or assets of Dime 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 Dime or any of its Subsidiaries is a party, or
by which they or any of their respective properties or assets may be
bound or affected, except (in the case of clause (y) above) for such
violations, conflicts, breaches, defaults or other events which, either
individually or in the aggregate, will not have and would not
reasonably be expected to have a Material Adverse Effect on Dime.
4.4. Consents and Approvals. Except for (i) the approval of the Merger
by the Office of Thrift Supervision (the "OTS"), (ii) approval of the listing of
the Washington Mutual Common Stock to be issued in the Merger on NYSE, (iii) the
filing with the Securities and Exchange Commission (the "SEC") of a proxy
statement in definitive form relating to the meeting of Dime's stockholders to
be held to vote on approval of this Agreement and the Merger (the "Proxy
Statement/Prospectus") and any filings or approvals under applicable state
securities
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<PAGE> 22
laws, (iv) the filing of the Certificate of Merger with the Delaware Secretary
pursuant to the DGCL, (vi) the adoption of this Agreement by the requisite votes
of the stockholders of Dime, (vii) the consents and approvals set forth in
Section 4.4 of the Dime Disclosure Schedule, and (viii) the consents and
approvals of third parties which are not Governmental Entities (as hereinafter
defined), the failure of which to be obtained will not have and would not be
reasonably expected to have, individually or in the aggregate, a Material
Adverse Effect on Dime or Washington Mutual, no consents or approvals of, or
filings or registrations with, any court, administrative agency or commission or
other governmental authority or instrumentality or self-regulatory organization
(each a "Governmental Entity") or with any third party are required to be
obtained by Dime or its Subsidiaries in connection with (A) the execution and
delivery by Dime of this Agreement and (B) the consummation by Dime of the
Merger and the other transactions contemplated hereby.
4.5. Reports. Dime and each of its Subsidiaries have timely filed all
material reports, registrations and statements, together with any amendments
required to be made with respect thereto, that they were required to file since
January 1, 1998 with any Governmental Entity and have paid all fees and
assessments due and payable in connection therewith, except for such failures to
file or make payment which will not have and would not be reasonably expected to
have, individually or in the aggregate, a Material Adverse Effect on Dime.
Except for normal examinations conducted by a Governmental Entity in the regular
course of the business of Dime and its Subsidiaries or as set forth in Section
4.5 of the Dime Disclosure Schedule, no Governmental Entity has initiated any
proceeding or, to the best knowledge of Dime, threatened an investigation into
the business or operations of Dime or any of its Subsidiaries since January 1,
1998. Except as set forth in Section 4.5 of the Dime Disclosure Schedule, there
is no material unresolved violation, criticism or exception by any Governmental
Entity with respect to any report or statement relating to any examinations of
Dime or any of its Subsidiaries, except for such violations, criticisms or
exceptions will not have and would not be reasonably expected to have,
individually or in the aggregate, a Material Adverse Effect on Dime.
4.6. Financial Statements. Dime has previously made available to
Washington Mutual copies of (a) the consolidated statements of financial
condition of Dime and its Subsidiaries as of December 31, 1999 and 2000 and the
related consolidated statements of operations, stockholders' equity and cash
flows for the years ended December 31, 1998 through 2000, inclusive, as reported
in Dime's Annual Report on Form 10-K for the year ended December 31, 2000 filed
with the SEC under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), accompanied by the audit report of KPMG LLP, independent
auditors with respect to Dime, and (b) the unaudited consolidated statements of
financial condition of Dime and its Subsidiaries as of March 31, 2000 and March
31, 2001, and the related unaudited consolidated statements of operations,
stockholders equity and cash flows for the three-month periods then ended, as
reported in Dime's Quarterly Report on Form 10-Q for the period ended March 31,
2001, filed with the SEC under the Exchange Act. Each of the financial
statements referred to in this Section 4.6 (including the related notes, where
applicable) fairly present, and the financial statements referred to in Section
7.10(a) hereof (including the related notes, where applicable) will fairly
present when filed with the SEC (subject, in the case of the unaudited
statements, to normal recurring adjustments, none of which are expected to be
material in nature or amount) the results of the consolidated operations and
changes in stockholders' equity and consolidated financial position of Dime and
its Subsidiaries for the respective fiscal periods or as of the
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<PAGE> 23
respective dates therein set forth. Each of such financial statements (including
the related notes, where applicable) complies, and the financial statements
referred to in Section 7.10(a) hereof (including the related notes, where
applicable) will comply when filed with the SEC, in all material respects with
applicable accounting requirements and with the published rules and regulations
of the SEC with respect thereto and each of such financial statements (including
the related notes, where applicable) has been, and the financial statements
referred to in Section 7.10(a) (including the related notes, where applicable)
will be when filed with the SEC, prepared in accordance with GAAP consistently
applied during the periods involved, except in each case as indicated in such
statements or in the notes thereto or, in the case of unaudited statements, as
permitted by Form 10-Q. The books and records of Dime and its Subsidiaries have
been, and are being, maintained in all material respects in accordance with GAAP
and any other applicable legal and accounting requirements and reflect only
actual transactions.
4.7. Broker's Fees. Except for Credit Suisse First Boston Corporation
and Merrill Lynch & Co., neither Dime nor any Subsidiary thereof nor any of
their respective officers or directors has employed any broker or finder or
incurred any liability for any broker's fees, commissions or finder's fees in
connection with any of the transactions contemplated by this Agreement. Copies
of all agreements with Credit Suisse First Boston Corporation and Merrill Lynch
& Co. have previously been furnished to Washington Mutual.
4.8. Absence of Certain Changes or Events.
(a) Except as publicly disclosed in the Dime Reports (as defined
in Section 4.12) filed with the SEC prior to the date hereof, or as set
forth in Section 4.8(a) of the Dime Disclosure Schedule, since December
31, 2000, no event has occurred which has had or would reasonably be
expected to have, individually or in the aggregate, a Material Adverse
Effect on Dime.
(b) Except as publicly disclosed in the Dime Reports filed prior
to the date hereof, as set forth in Section 4.8(b) of the Dime
Disclosure Schedule or as contemplated by this Agreement or permitted
under Section 6.2, since December 31, 2000, Dime and its Subsidiaries
have carried on their respective businesses in all material respects in
the ordinary course of business, and neither Dime nor any of its
Subsidiaries has (i) except for normal increases in the ordinary course
of business consistent with past practice and except as required by
applicable law, increased the wages, salaries, compensation, pension or
other fringe benefits or perquisites payable to any officer or
director, other than persons newly hired for or promoted to such
position, from the amount thereof in effect as of December 31, 2000 or
granted any severance or termination pay, entered into any contract to
make or grant any severance or termination pay, or paid any bonus, in
each case to any such officer or director, other than pursuant to
preexisting agreements, arrangements or bonus plans, or (ii) suffered
any strike, work stoppage, slow-down or other labor disturbance.
4.9. Legal Proceedings.
(a) Except as publicly disclosed in the Dime Reports filed with
the SEC prior to the date hereof, neither Dime nor any of its
Subsidiaries is a party to any, and there are
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<PAGE> 24
no pending or, to the best of Dime's knowledge, threatened legal,
administrative, arbitral or other proceedings, claims, actions or
governmental or regulatory investigations of any nature against Dime or
any of its Subsidiaries or challenging the validity or propriety of the
transactions contemplated by this Agreement which can reasonably be
expected to have an adverse determination and which, if adversely
determined, would, individually or in the aggregate, have or reasonably
be expected to have a Material Adverse Effect on Dime.
(b) There is no injunction, order, judgment, decree or regulatory
restriction specifically imposed upon Dime, any of its Subsidiaries or
the assets of Dime or any of its Subsidiaries which has had, or would
reasonably be expected to have, a Material Adverse Effect on Dime or
the Surviving Company.
4.10. Taxes.
(a) (x) Each of Dime and its Subsidiaries has (i) duly and timely
filed (including pursuant to applicable extensions granted without
penalty) all material Tax Returns (as hereinafter defined) required to
be filed by it, and such Tax Returns are true, correct and complete in
all material respects, and (ii) paid in full all Taxes due or made
adequate provision in the financial statements of Dime (in accordance
with GAAP) for any such Taxes (as hereinafter defined), whether or not
shown as due on such Tax Returns; (y) no material deficiencies for any
Taxes have been proposed, asserted or assessed in writing against or
with respect to any Taxes due by or Tax Returns of Dime or any of its
Subsidiaries; and (z) there are no material Liens for Taxes upon the
assets of either Dime or its Subsidiaries except for statutory liens
for current Taxes not yet due or Liens for Taxes that are being
contested in good faith by appropriate proceedings and for which
reserves adequate in accordance with GAAP have been provided.
(b) Except as set forth in Section 4.10(b) of the Dime Disclosure
Schedule, neither Dime nor any of its Subsidiaries (A) is or has ever
been a member of an affiliated group (other than a group the common
parent of which is Dime) filing a consolidated tax return or (B) has
any material liability for Taxes of any person arising from the
application of Treasury Regulation Section 1.1502-6 or any analogous
provision of state, local or foreign law, or as a transferee or
successor, by contract, or otherwise.
(c) Except as set forth in Section 4.10(c) of the Dime Disclosure
Schedule, none of the Dime or any of its Subsidiaries is a party to, is
bound by or has any obligation under any Tax sharing or Tax indemnity
agreement or similar contract or arrangement for which liability is
material. No closing agreement pursuant to Section 7121 of the Code (or
any similar provision of state, local or foreign law) has been entered
into by or with respect to Dime or any of its Subsidiaries for which
liability is material.
(d) None of the Dime or any of its Subsidiaries has been a party
to any distribution occurring during the last two years in which the
parties to such distribution treated the distribution as one to which
Section 355 of the Code is applicable.
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<PAGE> 25
(e) All material Taxes required to be withheld, collected or
deposited by or with respect to Dime and each Subsidiary have been
timely withheld, collected or deposited as the case may be, and to the
extent required, have been paid to the relevant taxing authority.
(f) Neither Dime nor any of its Subsidiaries has requested, or
been granted any waiver of any federal, state, local or foreign statute
of limitations with respect to, or any extension of a period for the
assessment of, any Tax.
(g) Except as set forth in Section 4.10(g) of the Dime Disclosure
Schedule, neither Dime nor any of its Subsidiaries is a party to any
agreement, contract, arrangement or plan that has resulted or would
result, individually or in the aggregate, in connection with this
Agreement in the payment of any "excess parachute payments" within the
meaning of Section 280G of the Code and neither Dime nor any of its
Subsidiaries has made any payments and is not a party to any agreement,
and does not maintain any plan, program or arrangement, that could
require it to make any payments (including any deemed payment of
compensation upon the exercise of a Dime Option or upon the issuance
of any Dime Common Stock), that would not be fully deductible by reason
of Section 162(m) of the Code.
(h) Neither Dime nor any of its Subsidiaries has filed a consent
to the application of Section 341(f) of the Code.
(i) Dime is not aware of any fact or circumstance that could
reasonably be expected to prevent the Merger from qualifying as a
reorganization within the meaning of Section 368(a) of the Code.
(j) For purposes of this Agreement, "Taxes" shall mean all taxes,
charges, levies, penalties or other assessments imposed by any United
States federal, state, local or foreign taxing authority, including,
but not limited to income, excise, property, sales, transfer,
franchise, payroll, withholding, social security or other similar
taxes, including any interest or penalties attributable thereto.
(k) For purposes of this Agreement, "Tax Return" shall mean any
return, report, information return or other document (including any
related or supporting information) required to be filed with any taxing
authority with respect to Taxes, including without limitation all
information returns relating to Taxes of third parties, any claims for
refunds of Taxes and any amendments or supplements to any of the
foregoing.
4.11. Employees; Employee Benefit Plans.
(a) Section 4.11(a) of the Dime Disclosure Schedule sets forth a
true and complete list or description of each material employee benefit
plan, arrangement or agreement and any amendments or modifications
thereof (including, without limitation, all stock purchase, stock
option, severance, employment, change-in-control, health/welfare plans,
fringe benefit, bonus, incentive, deferred compensation, pension and
other agreements, programs, policies and arrangements, whether or not
subject to the Employee Retirement Income Security Act of 1974, as
amended ("ERISA")) that is
21
<PAGE> 26
maintained or contributed to as of the date of this Agreement (the
"Plans") by Dime or any of its Subsidiaries or by any trade or business
related thereto, whether or not incorporated (an "ERISA Affiliate"),
all of which together with Dime would be deemed a "single employer"
within the meaning of Section 4001 of ERISA.
(b) Except as set forth in Section 4.11(b) of the Dime Disclosure
Schedule, Dime has previously provided or made available to Washington
Mutual true and complete copies of each of the Plans and all related
documents, including but not limited to (i) the actuarial reports for
each Plan (if applicable) for each of the last two years, and (ii) the
most recent determination letter from the Internal Revenue Service (if
applicable) for each Plan.
(c) Except as set forth in Section 4.11(c) of the Dime Disclosure
Schedule, (i) each of the Plans has been operated and administered in
all material respects in accordance with applicable laws, including but
not limited to ERISA and the Code, (ii) each of the Plans intended to
be "qualified" within the meaning of Section 401(a) of the Code has
been determined to be so qualified by the Internal Revenue Service or
will be submitted for such determination within the applicable remedial
amendment period and nothing has occurred that would be reasonably
expected to result in any such plan ceasing to be qualified, (iii) with
respect to each Plan that is subject to Title IV of ERISA, the present
value of accrued benefits under such Plan, based upon the actuarial
assumptions used for funding purposes in the most recent actuarial
report prepared by such Plan's actuary with respect to such Plan, did
not, as of its latest valuation date, exceed the then current value of
the assets of such Plan allocable to such accrued benefits, (iv) no
Plan provides benefits, including without limitation death or medical
benefits (whether or not insured), with respect to current or former
employees of Dime, 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 Dime, its Subsidiaries or the ERISA
Affiliates or (z) benefits the full cost of which is borne by the
current or former employee (or his beneficiary), (v) no liability under
Title IV of ERISA has been incurred by Dime, its Subsidiaries or any
ERISA Affiliate that has not been satisfied in full (other than payment
of premiums not yet due to the Pension Benefit Guaranty Corporation
(the "PBGC")), and no condition exists that would be reasonably
expected to result in Dime, its Subsidiaries or any ERISA Affiliate
incurring a material liability thereunder, (vi) no Plan is a
"multi-employer pension plan", as such term is defined in Section 3(37)
of ERISA, (vii) all contributions or other amounts payable by Dime or
its Subsidiaries as of the Effective Time with respect to each Plan in
respect of current or prior plan years have been paid or accrued in
accordance with GAAP and Section 412 of the Code, (viii) neither Dime,
its Subsidiaries nor any ERISA Affiliate has engaged in a transaction
in connection with which Dime, its Subsidiaries or any ERISA Affiliate
could be subject to either a material civil penalty assessed pursuant
to Section 409 or 502(i) of ERISA or a material tax imposed pursuant to
Section 4975 or 4976 of the Code, and (ix) there are no pending, or, to
the knowledge of Dime, threatened or anticipated claims (other than
routine claims for benefits) by, on behalf of or against any of the
Plans or any trusts related thereto.
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<PAGE> 27
(d) Except as set forth in Section 4.11(d) of the Dime Disclosure
Schedule, no Plan exists which provides for or could result in the
payment to any Dime employee of any money or other property or rights
or accelerate the vesting or payment of such amounts or rights to any
Dime employee as a result of the transactions contemplated by this
Agreement, including the Merger, whether or not such payment or
acceleration would constitute a parachute payment within the meaning of
Code Section 280G. Except as set forth in Section 4.11(d) of the Dime
Disclosure Schedule, since March 31, 2001, neither Dime nor any of its
Subsidiaries has taken any action that would result in a payment or
acceleration described in the preceding sentence.
(e) Except as set forth in Section 4.11(e) of the Dime Disclosure
Schedule, (i) neither Dime nor any of its Subsidiaries is a party to or
is bound by any written contract or arrangement with respect to the
employment or compensation of any (x) consultants receiving in excess
of $100,000 annually and (y) employees receiving compensation (salary,
bonus and commission) in excess of $250,000 annually, and (ii) except
as provided under the Plans set forth in Sections 4.11(d) and (e) of
the Dime Disclosure Schedule and other agreements or arrangements set
forth in Sections 4.11(d) and (e) of the Dime Disclosure Schedule,
consummation of the transactions contemplated by this Agreement will
not (either alone or upon the occurrence of any additional acts or
events) result in any payment (whether of severance pay or otherwise)
becoming due from Dime or any Subsidiary to any officer or employee
thereof. No officer or employee of Dime or any Subsidiary is, nor shall
be, entitled to receive duplicative severance payments and benefits
under both (i) an employment or severance agreement and (ii) a
severance or change-in-control plan, program, or other arrangement.
Dime has previously delivered or made available to Washington Mutual
true and complete copies of all consulting agreements calling for
payments in excess of $150,000 annually, and employment and deferred
compensation agreements (or forms thereof) providing for compensation
(salary, bonus and commission) in excess of $250,000 annually that are
in writing to which Dime or any of its Subsidiaries is a party.
(f) Except as set forth in Section 4.11(f) of the Dime Disclosure
Schedule, no current employee of Dime or any of its Subsidiaries
received aggregate remuneration (bonus, salary and commission) in
excess of $250,000 for 2000 or would reasonably be expected to receive
aggregate remuneration (excluding severance or other payments which,
pursuant to an agreement or arrangement set forth in Section 4.11(e) of
the Dime Disclosure Schedule, are made as a result of consummation of
the transactions contemplated by this Agreement, either alone or upon
the occurrence of any additional acts or events) in excess of $250,000
in 2001.
(g) With respect to the Amended and Restated Umbrella Trust
Agreements among Dime Bancorp, Inc., The Dime Savings Bank of New York,
FSB and HSBC Bank USA, as Trustee, with respect to the Covered
Arrangements of The Dime Savings Bank of New York, FSB and Related
Entities, the Umbrella Trust Agreement among Dime Bancorp, Inc., The
Dime Savings Bank of New York, FSB and HSBC Bank USA, as Trustee with
respect to the Designated Arrangements of The Dime Savings Bank of New
York, FSB and Related Entities, and the Benefit Protection Trust
Agreement among Dime Bancorp, Inc., The Dime Savings Bank of New York,
FSB and HSBC Bank USA,
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<PAGE> 28
as Trustee (together, the "Employee Umbrella Trusts") and the Amended
and Restated Umbrella Trust Agreement among Dime Bancorp, Inc., The
Dime Savings Bank of New York, FSB and HSBC Bank USA, as Trustee with
respect to the Covered Arrangements for Outside Directors of The Dime
Savings Bank of New York, FSB and Related Entities, (the "Director
Umbrella Trust" and, collectively with the Employee Umbrella Trusts,
the "Umbrella Trust Agreements"): (i) there has been no Irrevocable
Election (as defined in each such agreement); (ii) all Covered
Arrangements (as defined in each such agreement) have been disclosed to
Washington Mutual prior to the date of this Agreement, and there shall
be no additional Covered Arrangements both approved and entered into
after June 22, 2001, and (iii) except as provided in Section 7.7(f), at
no time on or after the date of this Agreement and prior to the
Effective Time shall the Committee (as defined in the Umbrella Trust
Agreements during such time period) amend the Umbrella Trust Agreements
in any way without the prior written consent of Washington Mutual.
(h) Effective as of the date of this Agreement, all Dime Stock
Option Plans under which grants may be made prospectively have been
amended to delete all references to "the publication or dissemination
of an announcement of action intended to result in a Terminating Event"
(as defined in each applicable Dime Stock Option Plan) with respect to
future payments.
4.12. SEC Reports. Dime has previously made available to Washington
Mutual an accurate and complete copy of each final registration statement,
prospectus, report, schedule and definitive proxy statement filed since January
1, 1999 and prior to the date hereof by Dime or any of its Subsidiaries with the
SEC pursuant to the Securities Act of 1933, as amended (the "Securities Act"),
or the Exchange Act (the "Dime Reports"), and no such registration statement,
prospectus, report, schedule or proxy statement contained any untrue statement
of a material fact or omitted to state any material fact required to be stated
therein or necessary in order to make the statements therein, in light of the
circumstances in which they were made, not misleading. Dime and its Subsidiaries
have timely filed all material Dime Reports and other documents required to be
filed by them under the Securities Act and the Exchange Act, and, as of their
respective dates, all Dime Reports complied as to form in all material respects
with the published rules and regulations of the SEC with respect thereto.
4.13. Compliance With Applicable Law. Except as disclosed in Section
4.13 of the Dime Disclosure Schedule, Dime and each of its Subsidiaries hold,
and have at all times held, all licenses, franchises, permits and authorizations
necessary for the lawful conduct of their respective businesses under and
pursuant to all, and have complied with and are not in violation in any material
respect under any, applicable law, statute, order, rule, regulation, policy
and/or guideline of any Governmental Entity relating to Dime or any of its
Subsidiaries, except where the failure to hold such license, franchise, permit
or authorization or such noncompliance or violation would not, individually or
in the aggregate, have or reasonably be expected to have a Material Adverse
Effect on Dime, and neither Dime nor any of its Subsidiaries knows of, or has
received notice of, any violations of any of the above which, individually or in
the aggregate, would have or would reasonably be expected to have a Material
Adverse Effect on Dime.
4.14. Certain Contracts.
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<PAGE> 29
(a) Except as publicly disclosed in the Dime Reports filed prior
to the date hereof or as set forth in Section 4.14(a) of the Dime
Disclosure Schedule, neither Dime nor any of its Subsidiaries is a
party to or is bound by any contract, arrangement, commitment or
understanding (whether written or oral) (i) which is a material
contract (as defined in Item 601(b)(10) of Regulation S-K of the SEC)
to be performed after the date of this Agreement, (ii) which materially
limits the freedom of Dime or any of its Subsidiaries to compete in any
material line of business, in any geographic area or with any person,
or which requires exclusive referrals of material business or requires
Dime or any of its Subsidiaries to make available investment
opportunities of a material nature or magnitude to any person on a
priority or exclusive basis, or (iii) with or to a labor union or guild
(including any collective bargaining agreement). Each contract,
arrangement, commitment or understanding of the type described in this
Section 4.14(a), whether or not publicly disclosed in the Dime Reports
filed prior to the date hereof or set forth in Section 4.14(a) of the
Dime Disclosure Schedule, is referred to herein as a "Dime Contract",
and neither Dime nor any of its Subsidiaries knows of, or has received
notice of, any violation of the above by any of the other parties
thereto which, individually or in the aggregate, would have or would
reasonably be expected to have a Material Adverse Effect on Dime. Dime
has made available all contracts which involved payments by Dime or any
of its Subsidiaries in fiscal year 2000 of more than $700,000 or which
could reasonably be expected to involve payments during fiscal year
2001 of more than $700,000, other than any such contract that is
terminable at will on 60 days or less notice without payment of a
penalty in excess of $125,000 and other than any contract entered into
on or after the date hereof that is permitted under the provisions of
Section 6.2.
(b) Except as set forth in Section 4.14(b) of the Dime Disclosure
Schedule, (i) each Dime Contract is valid and binding on Dime and in
full force and effect, and, to the knowledge of Dime, is valid and
binding on the other parties thereto, (ii) Dime and each of its
Subsidiaries has in all material respects performed all obligations
required to be performed by it to date under each Dime Contract, and
(iii) no event or condition exists which constitutes or, after notice
or lapse of time or both, would constitute a material default on the
part of Dime or any of its Subsidiaries under any such Dime Contract,
except, in each case, where such invalidity, failure to be binding,
failure to so perform or default, individually or in the aggregate,
would not have or reasonably be expected to have a Material Adverse
Effect on Dime.
4.15. Agreements With Regulatory Agencies. Except as set forth in
Section 4.15 of the Dime Disclosure Schedule, neither Dime nor any of its
Subsidiaries is subject to any cease-and-desist or other order issued by, or is
a party to any written agreement, consent agreement or memorandum of
understanding with, or is a party to any commitment letter or similar
undertaking to, or is subject to any order or directive by, or has adopted any
board resolutions at the request of (each, whether or not set forth in Section
4.15 of the Dime Disclosure Schedule, a "Regulatory Agreement"), any
Governmental Entity that currently restricts or by its terms will in the future
restrict the conduct of its business or relates to its capital adequacy, its
credit policies, its management or its business, nor has Dime or any of its
Subsidiaries been advised by any Governmental Entity that it is considering
issuing or requesting any Regulatory Agreement. Dime is not aware of any fact or
circumstance which is reasonably likely to prevent it or Washington Mutual from
obtaining the governmental approvals and consents required in
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<PAGE> 30
connection with the consummation by Dime of the Merger and the other
transactions contemplated hereby.
4.16. Undisclosed Liabilities. Except (i) for those liabilities that
are fully reflected or reserved against on the consolidated balance sheet of
Dime included in the Dime Form 10-Q for the quarter ended March 31, 2001 or (ii)
for liabilities incurred in the ordinary course of business consistent with past
practice since March 31, 2001, neither Dime nor any of its Subsidiaries has
incurred any liability of any nature whatsoever (whether absolute, accrued or
contingent or otherwise and whether due or to become due) that, either alone or
when combined with all the liabilities not described in clause (i) or (ii), has
had, or would be reasonably expected to have, a Material Adverse Effect on Dime.
4.17. Rights Agreement; Anti-Takeover Provisions. Dime has taken all
action necessary so that the entering into of this Agreement and the
Voting/Purchase Agreement and the consummation of the transactions contemplated
hereby and thereby do not and will not result in the grant of any rights to any
person under the Rights Agreement or enable or require the rights issuable
thereunder to be exercised, distributed or triggered. The Board of Directors of
Dime has taken all necessary action so that the provisions of Section 203 of the
DGCL and any applicable provisions of the takeover laws of any other state (and
any comparable provisions of Dime's Certificate of Incorporation and Bylaws), do
not and will not apply to this Agreement, the Voting/Purchase Agreement, the
Merger or the transactions contemplated hereby or thereby.
4.18. Dime Information. The information relating to Dime and its
Subsidiaries to be provided by Dime for inclusion in the Proxy
Statement/Prospectus, the registration statement on Form S-4 (the "S-4") in
which the Proxy Statement/Prospectus will be included as a prospectus, any
filings or approvals under applicable state securities laws, any filing pursuant
to Rule 165 or Rule 425 under the Securities Act or Rule 14a-12 under the
Exchange Act, or in any other document filed with any other Governmental Entity
in connection herewith, will not contain any untrue statement of a material fact
or omit to state a material fact necessary to make the statements therein, in
light of the circumstances in which they are made, not misleading. The Proxy
Statement/Prospectus (except for such portions thereof as relate only to
Washington Mutual or any of its Subsidiaries) will comply as to form in all
material respects with the provisions of the Exchange Act and the rules and
regulations thereunder.
4.19. Title to Property.
(a) Real Property. Except as disclosed in Section 4.19(a) of the
Dime Disclosure Schedule, Dime and its Subsidiaries have good, valid
and marketable title to all material real property owned by them free
and clear of all Liens, except Liens for current taxes not yet due and
payable and other standard exceptions commonly found in title policies
in the jurisdiction where such real property is located, and such
encumbrances and imperfections of title, if any, as do not materially
detract from the value of the properties and do not materially
interfere with the present or proposed use of such properties or
otherwise materially impair such operations. All real property and
fixtures material to the business, operations or financial condition of
Dime and its Subsidiaries are in substantially good condition and
repair except as would not
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<PAGE> 31
reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect on Dime.
(b) Personal Property. Dime and its Subsidiaries have good, valid
and marketable title to all tangible personal property owned by them on
the date hereof, free and clear of all Liens except as publicly
disclosed in the Dime Reports filed prior to the date hereof or as
disclosed in Section 4.19(b) of the Dime Disclosure Schedule or as
would not reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect on Dime. With respect to personal
property used in the business of Dime and its Subsidiaries which is
leased rather than owned, neither Dime nor any Subsidiary thereof is in
default under the terms of any such lease the loss of which would
reasonably be expected to have, either individually or in the
aggregate, a Material Adverse Effect on Dime.
(c) Leased Property. All leases of real property and all other
leases material to Dime and its Subsidiaries under which Dime or a
Subsidiary, as lessee, leases real or personal property are valid and
binding in accordance with their respective terms, there is not under
such lease any material existing default by Dime or such Subsidiary or
any event which with notice or lapse of time would constitute such a
default, and Dime or such Subsidiary quietly enjoys the premises
provided for in such lease except as would not reasonably be expected
to have, individually or in the aggregate, a Material Adverse Effect on
Dime.
4.20. Insurance. Dime and its Subsidiaries are insured with reputable
insurers against such risks and in such amounts as the management of Dime
reasonably has determined to be prudent in accordance with industry practice.
Dime and its Subsidiaries are in material compliance with their insurance
policies and are not in default under any of the material terms thereof. Each
such policy is outstanding and in full force and effect and, except as set forth
on Section 4.20 of the Dime Disclosure Schedule and except for policies insuring
against potential liabilities of officers, directors and employees of Dime and
its Subsidiaries, Dime or the relevant Subsidiary thereof is the sole
beneficiary of such policies. All premiums and other payments due under any such
policy have been paid, and all claims thereunder have been filed in due and
timely fashion.
4.21. Environmental Liability. Except as set forth in Section 4.21 of
the Dime Disclosure Schedule, there are no legal, administrative, arbitral or
other proceedings, claims, actions, causes of action, private environmental
investigations or remediation activities or governmental investigations of any
nature seeking to impose, or that reasonably could be expected to result in the
imposition, on Dime or any of its Subsidiaries of any liability or obligation
arising under common law standards relating to environmental protection, human
health or safety, or under any local, state or federal environmental statute,
regulation or ordinance, including, without limitation, the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as amended
(collectively, the "Environmental Laws"), pending or, to the knowledge of Dime,
threatened against Dime or any of its Subsidiaries, which liability or
obligation would have or would reasonably be expected to have a Material Adverse
Effect on Dime. To the knowledge of Dime, there is no reasonable basis for any
such proceeding, claim, action or governmental investigation that would impose
any liability or
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<PAGE> 32
obligation that would have or would reasonably be expected to have a Material
Adverse Effect on Dime. To the knowledge of Dime, during or prior to the period
of (i) its or any of its Subsidiaries' ownership or operation of any of their
respective current properties, (ii) its or any of its Subsidiaries'
participation in the management of any property, or (iii) its or any of its
Subsidiaries' holding of a security interest or other interest in any property,
there were no releases or threatened releases of hazardous, toxic, radioactive
or dangerous materials or other materials regulated under Environmental Laws in,
on, under or affecting any such property which would reasonably be expected to
have a Material Adverse Effect on Dime. Neither Dime nor any of its Subsidiaries
is subject to any agreement, order, judgment, decree, letter or memorandum by or
with any court, governmental authority, regulatory agency or third party
imposing any material liability or obligation pursuant to or under any
Environmental Law that would have or would reasonably be expected to have a
Material Adverse Effect on Dime.
4.22. Opinion Of Financial Advisor. Dime has received the opinions of
Credit Suisse First Boston Corporation and Merrill Lynch & Co., each dated as of
the date of this Agreement, to the effect that, as of such date, the Merger
Consideration to be received by holders of Dime Common Stock in the Merger is
fair from a financial point of view to such holders of Dime Common Stock.
4.23. Loan Matters.
(a) Each outstanding Loan and each commitment to extend credit has
been solicited and originated and is administered and serviced in
accordance with the relevant loan documents and Dime's underwriting
standards, except to the extent that any such failure would not have
and would not reasonably be expected to have, either individually or in
the aggregate, a Material Adverse Effect on Dime.
(b) Each of Dime and its Subsidiaries which is required to be so
approved is approved by and is in good standing: (i) as a supervised
mortgagee by the Department of Housing and Urban Development ("HUD") to
originate and service Title I and Title I FHA mortgage loans; (ii) as a
GNMA I and II Issuer by the Government National Mortgage Association
("Ginnie Mae"); (iii) by the Veteran's Administration ("VA") to
originate and service VA loans; and (iv) as a seller/servicer by Fannie
Mae and the Federal Home Loan Mortgage Corporation ("Freddie Mac") to
originate and service conventional residential and multi-family
mortgage loans.
4.24. Labor Matters. Neither Dime nor any of its Subsidiaries is a
party to or is bound by any collective bargaining agreement, contract or other
agreement or understanding with a labor union or labor organization; nor is Dime
or any of its Subsidiaries the subject of a proceeding asserting that it or any
such Subsidiary has committed an unfair labor practice (within the meaning of
the National Labor Relations Act) or seeking to compel Dime or any such
Subsidiary to bargain with any labor organization as to wages or conditions of
employment, nor is there any strike or other material labor dispute or disputes
involving it or any of its Subsidiaries pending, or to Dime's knowledge,
threatened except for such disputes as would not have and would not reasonably
be expected to have, either individually or in the aggregate, a Material Adverse
Effect on Dime, nor is Dime aware of any activity involving its or any of its
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Subsidiaries' employees seeking to certify a collective bargaining unit or
engaging in other organizational activity.
4.25. CRA Agreements. Except as disclosed in Section 4.25 of the Dime
Disclosure Schedule, neither Dime nor any of its Subsidiaries is a party to any
"agreement" (as such term is defined in 12 U.S.C. Section 1831y(e)(1)), whether
entered into before or after the enactment date of the Gramm-Leach-Bliley Act.
5. Representations and Warranties of Washington Mutual
Washington Mutual hereby represents and warrants to Dime as follows:
5.1. Corporate Organization. Washington Mutual is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Washington. Washington Mutual has the corporate power and authority to own or
lease all of its properties and assets and to carry on its business as it is now
being conducted, and is duly licensed or qualified to do business in each
jurisdiction in which the nature of the business conducted by it or the
character or location of the properties and assets owned or leased by it makes
such licensing or qualification necessary, except where the failure to be so
licensed or qualified would not have or reasonably be expected to have a
Material Adverse Effect on Washington Mutual. Washington Mutual is duly
registered as a savings and loan holding company under HOLA. The copies of the
Articles of Incorporation and Bylaws of Washington Mutual which have previously
been made available to Dime are true, complete and correct copies of such
documents as in effect as of the date of this Agreement. Washington Mutual Bank,
FA is a qualified thrift lender pursuant to Section 10(m) of HOLA and its
deposits and insured by the FDIC primarily through the SAIF, to the fullest
extent permitted by law. Washington Mutual Bank, FA is a member in good standing
of the FHLB of San Francisco.
5.2. Capitalization. The authorized capital stock of Washington Mutual
consists of 1,600,000,000 shares of Washington Mutual Common Stock and
10,000,000 shares of preferred stock, no par value. As of the close of business
on May 31, 2001, there were 895,957,472 shares of Washington Mutual Common Stock
outstanding and 2,000,000 shares of Washington Mutual Series H Preferred Stock
outstanding. As of the close of business on May 31, 2001, except for 4,006,680
shares of Washington Mutual Common Stock reserved for issuance in connection
with the Washington Mutual Series H Preferred Stock and 27,786,300 shares of
Washington Mutual common stock reserved for issuance in connection with
Washington Mutual's Trust Preferred Income Equity Redeemable Securities Units,
no shares of Washington Mutual Common Stock or Washington Mutual preferred stock
were reserved for issuance. All of the issued and outstanding shares of
Washington Mutual Common Stock have been duly authorized and validly issued and
are fully paid, nonassessable and free of preemptive rights, with no personal
liability attaching to the ownership thereof. As of the date of this Agreement,
except (i) as set forth in Section 5.2 of the disclosure schedule of Washington
Mutual delivered to Dime concurrently herewith (the "Washington Mutual
Disclosure Schedule"), (ii) as provided in the Rights Agreement, dated as of
December 20, 2000, between Washington Mutual and Mellon Investor Services L.L.C.
(as amended and supplemented, the "Washington Mutual Rights Agreement"), and
(iii) as set forth elsewhere in this Section 5.2, Washington Mutual does not
have and is not bound by any outstanding subscriptions, options, warrants,
calls, commitments or agreements of any character
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calling for the purchase or issuance of any shares of Washington Mutual Common
Stock or Washington Mutual preferred stock or any other equity securities of
Washington Mutual or any securities representing the right to purchase or
otherwise receive any shares of Washington Mutual Common Stock or Washington
Mutual preferred stock. The shares of Washington Mutual Common Stock to be
issued pursuant to the Merger will be duly authorized and validly issued and, at
the Effective Time, all such shares will be fully paid, nonassessable and free
of preemptive rights, with no personal liability attaching to the ownership
thereof.
5.3. Authority; No Violation.
(a) Washington Mutual has full corporate power and authority to
execute and deliver this Agreement and to consummate the transactions
contemplated hereby. The execution and delivery of this Agreement and
the consummation of the transactions contemplated hereby (including the
issuance of Washington Mutual Common Stock hereunder) have been duly
and validly approved by the Board of Directors of Washington Mutual and
no other corporate proceedings on the part of Washington Mutual are
necessary to approve this Agreement or to consummate the transactions
contemplated hereby. This Agreement has been duly and validly executed
and delivered by Washington Mutual and (assuming due authorization,
execution and delivery by Dime) each constitutes a valid and binding
obligation of Washington Mutual, enforceable against Washington Mutual
in accordance with its terms, except as enforcement may be limited by
general principles of equity whether applied in a court of law or a
court of equity and by bankruptcy, insolvency and similar laws
affecting creditors' rights and remedies generally.
(b) Except as set forth in Section 5.3(b) of the Washington Mutual
Disclosure Schedule, neither the execution and delivery of this
Agreement by Washington Mutual, nor the consummation by Washington
Mutual of the transactions contemplated hereby, nor compliance by
Washington Mutual with any of the terms or provisions hereof, will (i)
violate any provision of the Articles of Incorporation or Bylaws of
Washington Mutual or any of the similar governing documents of any of
its Subsidiaries or (ii) assuming that the consents and approvals
referred to in Section 5.4 are duly obtained, (x) violate any statute,
code, ordinance, rule, regulation, judgment, order, writ, decree or
injunction applicable to Washington Mutual or any of its Subsidiaries
or any of their respective properties or assets, or (y) violate,
conflict with, result in a breach of any provision of or the loss of
any benefit under, constitute a default (or an event which, with notice
or lapse of time or both, would constitute a default) under, result in
the termination of or a right of termination or cancellation under,
accelerate the performance required by, or result in the creation of
any Lien upon any of the respective properties or assets of Washington
Mutual or any of its Subsidiaries under, any of the terms, conditions
or provisions of any note, bond, mortgage, indenture, deed of trust,
license, lease, agreement or other instrument or obligation to which
Washington Mutual or any of its Subsidiaries is a party, or by which
they or any of their respective properties or assets may be bound or
affected, except (in the case of clause (y) above) for such violations,
conflicts, breaches, defaults or other events which either individually
or in the aggregate will not have and would not reasonably be expected
to have a Material Adverse Effect on Washington Mutual.
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5.4. Consents and Approvals. Except for (i) the approval of the Merger
by the OTS, (ii) approval of the listing of the Washington Mutual Common Stock
to be issued in the Merger on the NYSE, (iii) the filing with the SEC of the
Proxy Statement/Prospectus and the filing and declaration of effectiveness of
the S-4, (iv) the filing of the Articles of Merger with the Washington Secretary
pursuant to the WBCA and the Certificate of Merger with the Delaware Secretary
pursuant to the DGCL, (v) the adoption this Agreement by the requisite vote of
the stockholders of Dime, (vi) the consents and approvals set forth in Section
5.4 of the Washington Mutual Disclosure Schedule, and (vii) the consents and
approvals of third parties which are not Governmental Entities, the failure of
which to be obtained will not have and would not be reasonably expected to have,
individually or in the aggregate, a Material Adverse Effect on Washington
Mutual, no consents or approvals of, or filings or registrations with, any
Governmental Entity or any third party are necessary in connection with (A) the
execution and delivery by Washington Mutual of this Agreement and (B) the
consummation by Washington Mutual of the Merger and the other transactions
contemplated hereby.
5.5. Reports. Washington Mutual and each of its Subsidiaries have
timely filed all material reports, registrations and statements, together with
any amendments required to be made with respect thereto, that they were required
to file since January 1, 1998 with any Governmental Entities, and have paid all
fees and assessments due and payable in connection therewith. Except as set
forth in Section 5.5 of the Washington Mutual Disclosure Schedule and except for
normal examinations conducted by a Governmental Entity in the regular course of
the business of Washington Mutual and its Subsidiaries, no Governmental Entity
has initiated any proceeding or, to the best knowledge of Washington Mutual,
investigation into the business or operations of Washington Mutual or any of its
Subsidiaries since January 1, 1998. There is no material unresolved violation,
criticism, or exception by any Government Entity with respect to any report or
statement relating to any examinations of Washington Mutual or any of its
Subsidiaries.
5.6. Financial Statements. Washington Mutual has previously made
available to Dime copies of (a) the consolidated balance sheets of Washington
Mutual and its Subsidiaries as of December 31, 1999 and 2000, and the related
consolidated statements of income, changes in stockholders' equity and cash
flows for the years ending December 31, 1998 through 2000, inclusive, as
reported in Washington Mutual's Annual Report on Form 10-K for the year ended
December 31, 2000 filed with the SEC under the Exchange Act, accompanied by the
audit report of Deloitte & Touche, LLP, independent public accountants with
respect to Washington Mutual, and (b) the unaudited consolidated balance sheets
of Washington Mutual and its Subsidiaries as of March 31, 2000, and March 31,
2001, and the related unaudited consolidated statements of income, cash flows
and changes in stockholders' equity for the three-month periods then ended, as
reported in Washington Mutual's Quarterly Report on Form 10-Q for the period
ended March 31, 2001 filed with the SEC under the Exchange Act. Each of the
financial statements referred to in this Section 5.6 (including the related
notes, where applicable) fairly present, and the financial statements referred
to in Section 7.10 hereof (including the related notes, where applicable) will
fairly present when filed with the SEC (subject, in the case of the unaudited
statements, to normal recurring adjustments, none of which are expected to be
material in nature and amount), the results of the consolidated operations and
changes in stockholders' equity and consolidated financial position of
Washington Mutual and its Subsidiaries for the respective fiscal periods or as
of the respective dates therein set forth. Each of such financial statements
(including the related notes, where applicable) complies, and the financial
statements referred to in Section 7.10
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hereof (including the related notes, where applicable) will comply when filed
with the SEC, in all material respects with applicable accounting requirements
and with the published rules and regulations of the SEC with respect thereto;
and each of such financial statements (including the related notes, where
applicable) has been, and the financial statements referred to in Section 7.10
(including the related notes, where applicable) will be, prepared in accordance
with GAAP consistently applied during the periods involved, except in each case
as indicated in such statements or in the notes thereto or, in the case of
unaudited statements, as permitted by Form 10-Q. The books and records of
Washington Mutual and its Subsidiaries have been, and are being, maintained in
all material respects in accordance with GAAP and any other applicable legal and
accounting requirements and reflect only actual transactions.
5.7. Broker's Fees. Except as set forth in Section 5.7 of the
Washington Mutual Disclosure Schedule, neither Washington Mutual nor any
Subsidiary thereof nor any of their respective officers or directors has
employed any broker or finder or incurred any liability for any broker's fees,
commissions or finder's fees in connection with any of the transactions
contemplated by this Agreement.
5.8. Absence of Certain Changes or Events. Except as publicly disclosed
in Washington Mutual Reports (as defined in Section 5.10) filed prior to the
date hereof or as set forth in Section 5.8 of the Washington Mutual Disclosure
Schedule, since December 31, 2000, no event has occurred which has had or would
reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect on Washington Mutual.
5.9. Legal Proceedings.
(a) Neither Washington Mutual nor any of its Subsidiaries is a
party to any, and there are no pending or, to the best of Washington
Mutual's knowledge, threatened legal, administrative, arbitral or other
proceedings, claims, actions or governmental or regulatory
investigations of any nature against Washington Mutual or any of its
Subsidiaries or challenging the validity or propriety of the
transactions contemplated by this Agreement as to which there is a
reasonable possibility of an adverse determination and which, if
adversely determined, would, individually or in the aggregate, have or
reasonably be expected to have a Material Adverse Effect on Washington
Mutual.
(b) There is no injunction, order, judgment, decree, or regulatory
restriction imposed upon Washington Mutual, any of its Subsidiaries or
the assets of Washington Mutual or any of its Subsidiaries which has
had, or would reasonably be expected to have, a Material Adverse Effect
on Washington Mutual.
5.10. SEC Reports. Washington Mutual has previously made available to
Dime an accurate and complete copy of each final registration statement,
prospectus, report, schedule and definitive proxy statement filed since January
1, 1999 and prior to the date hereof by Washington Mutual with the SEC pursuant
to the Securities Act or the Exchange Act (the "Washington Mutual Reports"), and
no such registration statement, prospectus, report, schedule or proxy statement
contained any untrue statement of a material fact or omitted to state any
material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances in which they were made, not
misleading. Washington Mutual and its Subsidiaries
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have timely filed all Washington Mutual Reports and other documents required to
be filed by them under the Securities Act and the Exchange Act, and, as of their
respective dates, all Washington Mutual Reports complied as to form in all
material respects with the published rules and regulations of the SEC with
respect thereto.
5.11. Compliance With Applicable Law. Except as disclosed in Section
5.11 of the Washington Mutual Disclosure Schedule, Washington Mutual and each of
its Subsidiaries hold, and have at all times held, all material licenses,
franchises, permits and authorizations necessary for the lawful conduct of their
respective businesses under and pursuant to all, and have complied with and are
not in default in any material respect under any, applicable law, statute,
order, rule, regulation, policy and/or guideline of any Governmental Entity
relating to Washington Mutual or any of its Subsidiaries, except where the
failure to hold such license, franchise, permit or authorization or such
noncompliance or default would not, individually or in the aggregate, have or
reasonably be expected to have a Material Adverse Effect on Washington Mutual,
and neither Washington Mutual nor any of its Subsidiaries knows of, or has
received notice of, any material violations of any of the above which,
individually or in the aggregate, would have or reasonably be expected to have a
Material Adverse Effect on Washington Mutual.
5.12. Agreements With Regulatory Agencies. Except as set forth in
Section 5.12 of the Washington Mutual Disclosure Schedule, neither Washington
Mutual nor any of its Subsidiaries is subject to any cease-and-desist or other
order issued by, or is a party to any written agreement, consent agreement or
memorandum of understanding with, or is a party to any commitment letter or
similar undertaking to, or is subject to any order or directive by, or has
adopted any board resolutions at the request of (each, whether or not set forth
in Section 5.12 of the Washington Mutual Disclosure Schedule, a "Washington
Mutual Regulatory Agreement"), any Governmental Entity that restricts the
conduct of its business or relates to its capital adequacy, its credit policies,
its management or its business, nor has Washington Mutual or any of its
Subsidiaries been advised by any Governmental Entity that it is considering
issuing or requesting any Regulatory Agreement. Washington Mutual is not aware
of any fact or circumstance which is reasonably likely to prevent it or Dime
from obtaining the governmental approvals and consents required in connection
with the consummation by Washington Mutual of the Merger and the other
transactions contemplated hereby.
5.13. Undisclosed Liabilities. Except for those liabilities that are
fully reflected or reserved against on the consolidated balance sheet of
Washington Mutual included in the Washington Mutual Form 10-Q for the quarter
ended March 31, 2001 or for liabilities incurred in the ordinary course of
business consistent with past practice since March 31, 2001, neither Washington
Mutual nor any of its Subsidiaries has incurred any liability of any nature
whatsoever (whether absolute, accrued, contingent or otherwise and whether due
or to become due) that, either alone or when combined with all similar
liabilities, has had, or would reasonably be expected to have, a Material
Adverse Effect on Washington Mutual.
5.14. Washington Mutual Information. The information relating to
Washington Mutual and its Subsidiaries to be provided by Washington Mutual to be
contained in the Proxy Statement/Prospectus, the S-4, any filing pursuant to
Rule 165 or Rule 425 under the Securities Act or Rule 14a-12 under the Exchange
Act, or in any other document filed with any other Governmental Entity in
connection herewith, will not contain any untrue statement of a material
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fact or omit to state a material fact necessary to make the statements therein,
in light of the circumstances in which they are made, not misleading. The Proxy
Statement/Prospectus (except for such portions thereof that relate only to Dime
or any of its Subsidiaries) will comply as to form in all material respects with
the provisions of the Exchange Act and the rules and regulations thereunder. The
S-4 will comply as to form in all material respects with the provisions of the
Securities Act and the rules and regulations thereunder.
6. Covenants Relating to Conduct Of Business
6.1. Conduct of Business Prior to the Effective Time. Except as
expressly contemplated or permitted by this Agreement, or as required by
applicable law, rule or regulation, during the period from the date of this
Agreement to the Effective Time, Dime shall, and shall cause each of its
Subsidiaries to, (i) conduct its business in the usual, regular and ordinary
course consistent with past practice, (ii) use reasonable best efforts to
maintain and preserve intact its business organization, employees and
advantageous business relationships and retain the services of its officers and
key employees and (iii) take no action which would reasonably be expected to
adversely affect or delay its ability to obtain any approvals of any
Governmental Entity required to consummate the transactions contemplated hereby
or to consummate the transactions contemplated hereby.
6.2. Dime Forbearances. Except as set forth in Section 6.2 of the Dime
Disclosure Schedule, as expressly contemplated or permitted by this Agreement,
or as required by applicable law, rule or regulation, during the period from the
date of this Agreement to the Effective Time, Dime shall not, and shall not
permit any of its Subsidiaries to, without the prior written consent of
Washington Mutual
(which consent shall not be unreasonably withheld):
(a) adjust, split, combine or reclassify any capital stock; set
any record or payment dates for the payment of any dividends or
distributions on its capital stock or make, declare or pay any dividend
or make any other distribution on, or directly or indirectly redeem,
purchase or otherwise acquire, any shares of its capital stock or any
securities or obligations convertible into or exchangeable for any
shares of its capital stock, or grant any stock appreciation rights or
grant any individual, corporation, joint venture or other entity any
right to acquire any shares of its capital stock, other than (i)
subject to Section 6.4, regular quarterly cash dividends on Dime Common
Stock equal to the rate declared and paid during the current fiscal
quarter with record and payment dates consistent with past practice,
provided, however, that no dividend shall be paid by Dime on Dime
Common Stock if Dime shall be required to borrow to do so; and (ii)
dividends paid by any of the Subsidiaries of Dime so long as such
dividends are only paid to Dime or any of its other wholly owned
Subsidiaries; provided that no such dividend shall cause Dime Savings
Bank to cease to qualify as a "well capitalized" institution under 12
CFR 565); or issue or commit to issue any additional shares of capital
stock (except pursuant to the exercise of stock options or warrants
outstanding as of the date hereof) or any securities convertible into
or exercisable for, or any rights, warrants or options to acquire, any
additional shares of capital stock;
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(b) sell, transfer, mortgage, encumber or otherwise dispose of any
of its assets or properties to any individual, corporation or other
entity (other than a direct wholly owned Subsidiary), by merger,
consolidation, asset sale or other business combination or cancel,
release or assign any indebtedness to any such person or any claims
held by any such person, in each case that is material to Dime, except
(i) in the ordinary course of business consistent with past practice or
(ii) as expressly required by the terms of any contracts or agreements
in force at the date of this Agreement and set out in Section 6.2 of
the Dime Disclosure Schedule;
(c) make any acquisition or investment, by purchase or other
acquisition of stock or other equity interests (other than in a
fiduciary or agent capacity or pursuant to written contracts or
agreements entered into prior to the date hereof (true and correct
copies of which have been delivered to Washington Mutual prior to the
date of this Agreement)), by merger, consolidation, asset purchase or
other business combination, or by contributions to capital, or make any
material property transfers or material purchases of any property or
assets, in or from any other individual, corporation, joint venture or
other entity other than a wholly owned Subsidiary of Dime, except as
expressly required by the terms of any contracts or agreements in force
at the date of this Agreement and set out in Section 6.2 of the Dime
Disclosure Schedule;
(d) enter into, renew, extend or terminate any Loan, lease,
contract or other agreement, other than Loans made in the ordinary
course of business and in accordance with paragraph (i) below, that
calls for aggregate annual payments of $700,000 and which is not either
(i) terminable at will on 60 days or less notice without payment of a
penalty in excess of $70,000 or (ii) has a term of less than one year;
make any change to the lease relating to North American Mortgage
Company's headquarters in Tampa, Florida; or make any material change
in any of its other leases, material contracts or other material
agreements, other than renewals for a term of one year or less without
material adverse changes to the terms thereof;
(e) other than general salary increases consistent with past
practices for employees (other than officers above the level of Vice
President) or as required by contractual commitments outstanding on the
date hereof, (i) increase in any material respect the compensation or
fringe benefits of any of its employees, (ii) pay any pension or
retirement allowance not required by any existing plan or agreement to
any such employees, (iii) become a party to, amend (other than
amendments required by law or by Washington Mutual as set forth in
Section 7.7) or (iii) commit itself (orally or in writing) to any
compensation (other than any retention plan approved in writing by
Washington Mutual), pension, retirement, profit-sharing, severance,
change-in-control or welfare benefit plan or agreement or employment
agreement with or for the benefit of any employee, (iv) hire any new
executive officers, or (v) accelerate the vesting of any stock options
or other stock-based compensation;
(f) authorize or permit its officers, directors, employees,
agents, advisors and affiliates (collectively, "Representatives") to
(i) initiate, solicit, encourage or knowingly facilitate any inquiries
or proposals with respect to, any Acquisition Proposal or (ii) engage
in any negotiations concerning, or provide any nonpublic information
to, or have
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any discussions with, any person relating to, any Acquisition Proposal,
or (iii) waive any provision of or amend the terms of the Rights
Agreement (or redeem the rights issued thereunder) in respect of an
Acquisition Proposal; provided that, in the event Dime receives an
unsolicited bona fide Acquisition Proposal and Dime's board of
directors concludes in good faith that such Acquisition Proposal
constitutes or is reasonably likely to result in a Superior Proposal,
Dime may, and may permit its Subsidiaries and its and their
Representatives to, take any action described in clause (ii) above to
the extent that the board of directors of Dime concludes in good faith
(based on the advice of its outside counsel) that failure to take such
actions would more likely than not result in a violation of its
fiduciary duties under applicable law; provided that prior to providing
any nonpublic information permitted to be provided pursuant to the
foregoing proviso, Dime shall have entered into a confidentiality
agreement with such third party on terms no less favorable to Dime than
the Confidentiality Agreement. Dime will immediately cease and cause to
be terminated any activities, discussions or negotiations conducted
before the date of this Agreement with any persons other than
Washington Mutual with respect to any Acquisition Proposal and will use
its reasonable best efforts to enforce any confidentiality or similar
agreement relating to an Acquisition Proposal. Dime will promptly
(within one Business Day) advise Washington Mutual following receipt of
any Acquisition Proposal of the substance thereof (including the
identity of the person making such Acquisition Proposal), and will keep
Washington Mutual apprised of any related developments, discussions and
negotiations (including the terms and conditions of the Acquisition
Proposal) on a current basis. Nothing contained in this Agreement shall
prevent Dime or its board of directors from complying with Rule 14d-9
and Rule 14e-2 under the Exchange Act with respect to an Acquisition
Proposal, provided that such Rules will in no way eliminate or modify
the effect that any action pursuant to such Rules would otherwise have
under this Agreement. As used in this Agreement, "Acquisition Proposal"
shall mean any tender or exchange offer, proposal for a merger,
consolidation or other business combination involving Dime or any of
its Subsidiaries or any proposal or offer to acquire in any manner more
than 15% of the voting power in, or more than 15% of the business,
assets or deposits of, Dime or any of its Subsidiaries, other than the
transactions contemplated by this Agreement. As used in this Agreement,
"Superior Proposal" means any bona fide written Acquisition Proposal
which the board of directors of Dime concludes in good faith to be more
favorable from a financial point of view to its stockholders than the
Merger and the other transactions contemplated hereby, (1) after
receiving the advice of its financial advisors (who shall be nationally
recognized investment banking firms), (2) after taking into account the
likelihood of consummation of such transaction on the terms set forth
therein (as compared to, and with due regard for, the terms herein) and
(3) after taking into account all legal (with the advice of outside
counsel), financial (including the financing terms of any such
proposal), regulatory and other aspects of such proposal and any other
relevant factors permitted under applicable law; provided that for
purposes of the definition of "Superior Proposal", the references to
"more than 15%" in the definition of Acquisition Proposal shall be
deemed to be references to "a majority" and the definition of
Acquisition Proposal shall only refer to a transaction involving Dime
and not its Subsidiaries;
(g) other than in accordance with contracts entered into prior to
the date of this Agreement which were disclosed to Washington Mutual
prior to the date hereof or
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otherwise in accordance with this Agreement, make (i) any capital
expenditures relating to technology initiatives (including Internet web
sites) or (ii) any other capital expenditures in excess of (A) $400,000
per project or related series of projects or (B) $2,500,000 in the
aggregate, other than expenditures necessary to maintain existing
assets in good repair;
(h) expand its private banking business in any material respect
or, except in the ordinary course of business, make application for the
opening, relocation or closing of any, or open, relocate or close any,
branch office or loan production or servicing facility (provided that
Dime shall not open any new branch office or loan production or
servicing facility in any state in which it does not have such
operations at the date of this Agreement);
(i) except for Loans or commitments for Loans that have previously
been approved by Dime prior to the date of this Agreement, (A) make or
acquire any Loan or issue a commitment for any Loan other than Loans
made or acquired in the ordinary course of business consistent with
past practice which have (x) in the case of commercial and commercial
real estate Loans, (i) a principal balance not in excess of $10,000,000
and (ii) involve aggregate borrowings by the applicable borrower not in
excess of $20,000,000, or (y) in the case of Loans for the purchase of
single-family residences, a principal balance not in excess of
$1,500,000 unless, in each such case, Dime promptly provides to
Washington Mutual copies of the approvals for such Loans; provided that
Washington Mutual may in its reasonable judgment determine to require
that it consent in advance to Loans of the types referred to in clauses
(x) or (y)and in such event, Washington Mutual and Dime will work in a
cooperative manner to establish procedures by which such consent will
be provided in order to ensure that this consent process does not
materially interfere with the continued operations of Dime in the
ordinary course of business consistent with past practice; (B) take any
action that would result in any discretionary releases of collateral or
guarantees or otherwise restructure any Loan or commitment for any Loan
with a principal balance in excess of the respective amounts set forth
in clause (A) above; or (C) agree to guarantee the obligations of any
person other than any wholly owned Subsidiary of Dime;
(j) settle any claim, action or proceeding involving monetary
damages, except in the ordinary course of business consistent with past
practice, or agree or consent to the issuance of any injunction,
decree, order, agreement or judgment restricting its business or
operations;
(k) amend its certificate of incorporation, bylaws or similar
governing documents, or enter into a plan of consolidation, merger,
share exchange or reorganization with any person (other than
consolidations, mergers or reorganizations solely among wholly owned
subsidiaries of Dime), or a letter of intent or agreement in principle
with respect thereto;
(l) materially change its investment securities portfolio policy,
or the manner in which the portfolio is classified or reported;
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(m) make any material changes in its policies and practices with
respect to (i) underwriting, pricing, originating, acquiring, selling,
servicing, or buying or selling rights to service loans, (ii) hedging
its loan positions or commitments, or (iii) without prior notice to
Washington Mutual, pricing of its other products and services;
(n) take any action that is intended or may reasonably be expected
to result in any of its representations and warranties set forth in
this Agreement being or becoming untrue in any material respect at any
time prior to the Effective Time, or in any of the conditions to the
Merger set forth in Section 8.1 or 8.2 not being satisfied or in a
material violation of any provision of this agreement, except, in every
case, as may be required by applicable law;
(o) make any changes in its accounting methods or method of Tax
accounting, practices or policies, except as may be required under law,
rule, regulation or GAAP, in each case as concurred in by Dime's
independent public accountants;
(p) enter into any commercial loan securitizations or create any
special purpose funding entity;
(q) enter into any agreement or amend or terminate any agreement
between Dime or any of its Subsidiaries, on the one hand, and Warburg
or any of its affiliates, on the other, in each case other than
agreements entered into by Dime and its Subsidiaries with customers in
the ordinary course of its banking business;
(r) introduce any material new products or services, any material
marketing campaigns or any material new sales compensation or incentive
programs or arrangements, in each case without prior notice to
Washington Mutual;
(s) make or change any Tax election, settle or compromise any
material Tax liability of Dime or any of its Subsidiaries, agree to an
extension of the statute of limitations with respect to the assessment
or determination of Taxes of Dime or any of its Subsidiaries, enter
into any closing agreement with respect to any Tax or surrender any
right to claim a Tax refund;
(t) intentionally take any action or fail to take any action which
would reasonably be expected to materially and adversely impair or
delay consummation of the transactions contemplated hereby beyond the
time period contemplated by this Agreement; or
(u) agree to, or make any commitment to, take any of the actions
prohibited by this Section 6.2.
6.3. No Fundamental Washington Mutual Changes. Except as expressly
contemplated or permitted by this Agreement, or as required by applicable law,
rule or regulation, during the period from the date of this Agreement to the
Effective Time, Washington Mutual shall not, without the prior written consent
of Dime (which consent shall not be unreasonably withheld), (i) amend its
articles of incorporation or bylaws in a manner that would materially and
adversely affect the economic benefits of the Merger to the holders of Dime
Capital Stock, (ii) take any
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action that is intended or may reasonably be expected to result in any of its
representations and warranties set forth in this Agreement being or becoming
untrue in any material respect at any time prior to the Effective Time, or in
any of the conditions to the Merger set forth in Section 8.1 or 8.3 not being
satisfied or in a material violation of any provision of this Agreement, (iii)
intentionally take any action or fail to take any action which would reasonably
be expected to materially and adversely impair or delay consummation of the
transactions contemplated hereby beyond the time period contemplated by this
Agreement or (iv) agree to, or make any commitment to, take any of the actions
prohibited by this Section 6.3.
6.4. Dividends. Until the Effective Time, Dime and Washington Mutual
shall coordinate the declaration and payment of any dividends in respect of Dime
Common Stock and Washington Mutual Common Stock and the record dates and the
payment dates relating thereto, it being the intention of Dime and Washington
Mutual that holders of Dime Common Stock shall not receive two dividends, or
fail to receive one dividend, for any single calendar quarter with respect to
their shares of Dime Common Stock and/or any shares of Washington Mutual Common
Stock that any such holder receives in exchange therefor pursuant to the
Merger.
7. Additional Agreements
7.1. Regulatory Matters
(a) Washington Mutual and Dime shall promptly prepare and file
with the SEC the Proxy Statement/Prospectus and the S-4. Each of
Washington Mutual and Dime shall use reasonable best efforts to have
the S-4 declared effective under the Securities Act as promptly as
practicable after such filing, and Dime shall thereafter mail the Proxy
Statement/ Prospectus to its stockholders.
(b) Dime acknowledges that Washington Mutual desires to cause at
or promptly following the Effective Time the merger (the "Second
Merger") of Dime Savings Bank with and into one of Washington Mutual's
wholly owned depository institution Subsidiaries to be selected by
Washington Mutual.
(c) Subject to the other provisions of this Agreement, the parties
hereto shall cooperate with each other and use reasonable best efforts
to promptly prepare and file all necessary documentation, to effect all
applications, notices, petitions and filings, to obtain as promptly as
practicable all permits, consents, approvals and authorizations of all
third parties and Governmental Entities which are necessary or
advisable to consummate the transactions contemplated by this Agreement
(including without limitation the Merger and the Second Merger) and to
comply with the terms and conditions of all such permits, consents,
approvals and authorizations of all such third parties and Governmental
Entities.
(d) Washington Mutual and Dime shall, upon request, furnish each
other with all information concerning themselves, their Subsidiaries,
directors, officers and stockholders and such other matters as may be
reasonably necessary or advisable in connection with the Proxy
Statement/Prospectus, the S-4 or any other statement, filing, notice or
application made by or on behalf of Washington Mutual, Dime or any of
their
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respective Subsidiaries to any Governmental Entity in connection with
the Merger and the other transactions contemplated by this
Agreement.
(e) Washington Mutual and Dime shall promptly advise each other
upon receiving any communication from any Governmental Entity whose
consent or approval is required for consummation of the transactions
contemplated by this Agreement which causes such party to believe that
there is a reasonable likelihood that any Requisite Regulatory Approval
(as defined in Section 8.1(c) below) will not be obtained or that the
receipt of any such approval will be materially delayed or conditioned.
7.2. Access to Information
(a) Upon reasonable notice and subject to applicable laws relating
to the exchange of information, Dime shall, and shall cause each of its
Subsidiaries to, afford to the officers, employees, accountants,
counsel and other Representatives of Washington Mutual access, during
normal business hours during the period prior to the Effective Time, to
all its properties, books, contracts, commitments and records, and to
its officers, employees, accountants, counsel and other
representatives, in each case in a manner not unreasonably disruptive
to the operation of the business of Dime and its Subsidiaries, and,
during such period, Dime shall, and shall cause its Subsidiaries to,
make available to Washington Mutual (i) a copy of each report,
schedule, registration statement and other document filed or received
by it during such period pursuant to the requirements of Federal
securities laws or Federal or state banking, mortgage lending, real
estate or consumer finance or protection laws (other than reports or
documents which Dime is not permitted to disclose under applicable law)
and (ii) all other information concerning its business, properties and
personnel as such other party may reasonably request. Neither Dime nor
any of its Subsidiaries shall be required to provide access to or to
disclose information where such access or disclosure would violate or
prejudice the rights of its customers, jeopardize the attorney-client
privilege of the institution in possession or control of such
information or contravene any law, rule, regulation, order, judgment,
decree, fiduciary duty or binding agreement entered into prior to the
date of this Agreement or in the ordinary course of business consistent
with past practice. The parties hereto will make appropriate and
reasonable substitute disclosure arrangements under circumstances in
which the restrictions of the preceding sentence apply.
(b) Washington Mutual shall hold all information furnished by Dime
or any of its Subsidiaries or representatives pursuant to Section
7.2(a) in confidence to the extent required by, and in accordance with,
the provisions of the Confidentiality Agreement, dated May 2, 2001,
between Washington Mutual and Dime (the "Confidentiality Agreement").
(c) No investigation by either of the parties or their respective
Representatives shall affect the representations, warranties, covenants
or agreements of the other set forth herein.
7.3. Stockholder Approval
(a) Dime shall duly take all lawful action to call, give notice
of, convene and hold a meeting of its stockholders as promptly as
practicable following
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the date upon which the Form S-4 becomes effective (the "Dime Stockholders
Meeting") for the purpose of obtaining the required vote of the holders of Dime
Common Stock with respect to the transactions contemplated by this Agreement
and, subject to Section 7.3(b), shall take all lawful action to solicit the
adoption of this Agreement by such stockholders. The Board of Directors of Dime
shall recommend adoption of this Agreement by the stockholders of Dime and shall
not (x) withdraw, modify or qualify in any manner adverse to Washington Mutual
such recommendation or (y) take any other action or make any other public
statement in connection with the Dime Stockholders Meeting inconsistent with
such recommendation (collectively, a "Change in Dime Recommendation"), except as
and to the extent expressly permitted by Section 7.3(b). Notwithstanding any
Change in Dime Recommendation, this Agreement shall be submitted to the
stockholders of Dime at the Dime Stockholders Meeting for the purpose of
adopting this Agreement and nothing contained herein shall be deemed to relieve
Dime of such obligation. In addition to the foregoing, Dime shall not submit to
the vote of its stockholders any Acquisition Proposal other than the Merger.
(b) Notwithstanding the foregoing Dime and its Board of Directors
shall be permitted to effect a Change in Dime Recommendation, if and
only to the extent that:
(i) Dime's Board of Directors, based on the advice of its
outside counsel, determines in good faith that failure to take
such action would result in a violation of its fiduciary duties
under applicable law, and
(ii) If the Board of Directors of Dime intends to effect a
Change in Dime Recommendation following an Acquisition Proposal,
prior to effecting such Change in Dime Recommendation, (A) Dime
shall have complied in all material respects with Section 6.2(f),
(B) the Board of Directors of Dime shall have concluded in good
faith that such Acquisition Proposal constitutes a Superior
Proposal after giving effect to all of the adjustments which may
be offered by Washington Mutual pursuant to clause (D) below, (C)
Dime shall notify Washington Mutual, at least five Business Days
in advance, of its intention to effect a Change in Dime
Recommendation in response to such Superior Proposal, specifying
the material terms and conditions of any such Superior Proposal
and furnishing to Washington Mutual a copy of the relevant
proposed transaction agreements with the party making such
Superior Proposal and other material documents, and (D) prior to
effecting such a Change in Dime Recommendation, Dime shall, and
shall cause its financial and legal advisors to, during the period
following Dime's delivery of the notice referred to in clause (C)
above, negotiate with Washington Mutual in good faith (to the
extent Washington Mutual desires to negotiate) to make such
adjustments in the terms and conditions of this Agreement so that
such Acquisition Proposal ceases to constitute a Superior
Proposal.
7.4. Legal Conditions to Merger.
(a) Subject to the terms and conditions of this Agreement, each of
Washington Mutual and Dime shall, and shall cause their respective
Subsidiaries to, use their reasonable best efforts (i) to take, or
cause to be taken, all actions necessary, proper
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or advisable to comply promptly with all legal requirements which may
be imposed on such party or its Subsidiaries with respect to the Merger
and, subject to the conditions set forth in Section 8 hereof, to
consummate the transactions contemplated by this Agreement and (ii) to
obtain (and to cooperate with the other party to obtain) any consent,
authorization, order or approval of, or any exemption by, any
Governmental Entity and any other third party which is required to be
obtained by Dime or Washington Mutual or any of their respective
Subsidiaries in connection with the Merger and the other transactions
contemplated by this Agreement; provided, however, that no party shall
be required to take any action pursuant to the foregoing sentence if
the taking of such action or the obtaining of such consents,
authorizations, orders, approvals or exemptions is reasonably likely to
result in a condition or restriction having an effect of the type
referred to in Section 8.2(c).
(b) Subject to the terms and conditions of this Agreement, each of
Washington Mutual and Dime agrees to use reasonable best efforts to
take, or cause to be taken, all actions, and to do, or cause to be
done, all things necessary, proper or advisable to consummate and make
effective, as soon as practicable after the date of this Agreement, the
transactions contemplated hereby, including, without limitation, using
reasonable best efforts to (i) modify or amend any contracts, plans or
arrangements to which Washington Mutual or Dime is a party (to the
extent permitted by the terms thereof) if necessary in order to satisfy
the conditions to closing set forth in Section 8 hereof, (ii) lift or
rescind any injunction or restraining order or other order adversely
affecting the ability of the parties to consummate the transactions
contemplated hereby, and (iii) defend any litigation seeking to enjoin,
prevent or delay the consummation of the transactions contemplated
hereby or seeking material damages.
7.5. Affiliates. Dime shall use its reasonable best efforts to cause
each director, executive officer and other person who is an "affiliate" (for
purposes of Rule 145 under the Securities Act) of Dime to deliver to Washington
Mutual, as soon as practicable after the date of this Agreement, and in any
event prior to the date of the stockholders meeting called by Dime pursuant to
Section 7.3 hereof, a written agreement, in the form and substance reasonably
satisfactory to Washington Mutual, relating to required transfer restrictions on
the Washington Mutual Common Stock received by them in the Merger pursuant to
Rule 145.
7.6. Stock Exchange Listing. Washington Mutual shall use its best
efforts to cause the shares of Washington Mutual Common Stock to be issued in
the Merger, to each Warrant Holder pursuant to the Voting/Purchase Agreement and
to LTW holders pursuant to the Warrant Agreement to be approved for listing on
the NYSE, subject to official notice of issuance, prior to the Effective Time.
7.7. Employees; Employee Benefit Plans
(a) The benefits to be provided to employees of Dime and its
Subsidiaries as of the Effective Time ("Covered Employees") shall be
the benefits provided to similarly situated employees of Washington
Mutual, which shall be so provided as soon as practicable after the
Effective Time, but in no event later than the date the Covered
Employees are placed on the same payroll service as such employees of
Washington Mutual; provided, however, that until such time that the
Covered Employees are placed on the same payroll service as such
employees of Washington Mutual, Washington Mutual shall, or shall cause
its Subsidiaries to provide benefits no less
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favorable, in the aggregate, than the benefits provided to similarly situated
employees under Washington Mutual's plans, programs and arrangements. Washington
Mutual shall, from and after the Effective Time, (i) comply with the contractual
commitments of Dime to its current and former employees in accordance with their
terms and honor all employee benefit obligations to current and former employees
of Dime and its Subsidiaries under the applicable contractual commitment, (ii)
provide Covered Employees credit for the most recent period of uninterrupted
service (including any bridging or prior service credit, without regard to
whether there has been an interruption in service, solely to the extent provided
by Dime and its Subsidiaries as of the date hereof) with Dime or any of its
Subsidiaries (and their predecessors) prior to the Effective Time for all
purposes under employee benefit plans of Washington Mutual or its Subsidiaries
(including for purposes of benefit accrual), (iii) cause any and all
pre-existing condition limitations (to the extent such limitations did not apply
to a pre-existing condition under comparable Plans) and eligibility waiting
periods under group health plans of Washington Mutual to be waived with respect
to Covered Employees (and their eligible dependents) who become participants in
such group health plans and (iv) use reasonable efforts to give credit for or
otherwise take into account the out-of-pocket expenses and annual expense
limitations paid by each Covered Employee under the comparable Plans for the
year in which the Effective Time occurs; provided, however, that no credits for
service as described in clause (ii) above shall be permitted if to do so would
result in duplication of benefits under such plans. From and after the Effective
Time, Washington Mutual shall honor all vacation and paid time off of the
Covered Employees accrued as of the Effective Time, in accordance with the Dime
policy as in effect on the date hereof. Except as otherwise prohibited under
this Section 7.7, nothing in this Section 7.7 shall be interpreted as preventing
Washington Mutual or its Subsidiaries from amending, modifying or terminating
any Plans or other contracts, arrangements, commitments or understandings, in a
manner consistent with their terms and applicable law.
(b) Subject to applicable law and the amendment provisions of any
defined contribution plans maintained by Dime or its Subsidiaries (the "401(k)
Plans"), Dime agrees to amend the 401(k) Plans prior to the Effective Time so
that new participant loans are no longer available as of the Effective Time.
(c) Dime shall be permitted to pay up to an aggregate of $8 million as
retention bonuses to such employees of Dime or any of its Subsidiaries as Dime
may determine (but not including any employees who are parties to any individual
employment or change in control agreements), with such bonus amounts payable on
the earlier of the first anniversary of the Effective Time or the date the
eligible employee's employment is terminated by Dime or Washington Mutual or any
of their Subsidiaries.
(d) With respect to the Severance Pay Program for Employees of Dime and
Participating Subsidiaries (including the programs in place for Non-Officers,
Vice Presidents or lower, and Senior Vice President), as soon as practicable
after the date hereof but in any event prior to the Effective Time, Dime shall,
or shall cause its Subsidiaries to, amend such plans to provide that the
payments to be made to any participants therein shall only be made in a lump sum
cash amount, and in no event shall Dime provide the participants the right to
elect to receive such payments in the form of an annuity. In addition, as soon
as practicable after the date hereof but in any event prior to the Effective
Time, Dime shall, or shall cause its Subsidiaries to, use reasonable best
efforts to cause Covered Employees who are parties to employment, change-in-
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control or severance agreements (which have been previously disclosed to
Washington Mutual on Section 4.11(a) of the Dime Disclosure Schedule) to agree
to receive any severance or other related payments thereunder, which would
otherwise be paid in the form of an annuity, in a lump sum payment within thirty
(30) days after the date such payments would otherwise commence (or, if such
payments have already commenced, after the date of such amendment); provided,
however, that all such Covered Employees shall continue to be entitled to all
other rights and benefits to which they are previously entitled under any such
agreements, which shall remain in full force and effect, as modified to take
into account solely the provisions described herein; and provided, further,
however, that in no event shall any such amendments be made to those agreements
pursuant to which any Covered Employee is entitled to receive an amount payable
either (i) in respect of a covenant not to solicit or (ii) expressly not in
respect of any severance obligation.
(e) With respect to the Dime Employee Stock Purchase Plan, Dime shall
take all actions necessary to cause the offering period commencing on July 1,
2001 under such plan to terminate effective prior to the Effective Time, and
Washington Mutual shall provide that all Covered Employees shall, effective as
of the Effective Time, be eligible to participate in the Washington Mutual
Employee Stock Purchase Plan, on the same terms and conditions as similarly
situated employees of Washington Mutual.
(f) With respect to the Committee as defined under the Employee
Umbrella Trusts (the "Employee Committee") and the Committee as defined under
the Director Umbrella Trust (the "Director Committee"), prior to the Effective
Time, Dime shall cause all actions necessary to be taken to provide that at and
following the Effective Time, each such committee shall be made up of three
members, selected as follows: (i) two of the members of the Employee Committee
shall be current senior executive officers of Dime and two of the members of the
Director Committee shall be nonemployee directors of Dime (and each such
committee member, a "Dime Member"), in each case selected by the Employee
Committee (or Director Committee, as applicable) as constituted immediately
prior to the Effective Time, and (ii) the third member of the Employee Committee
and the Director Committee shall be selected by Washington Mutual. In addition,
in the event that a Dime Member ceases to serve on the Employee Committee (or
Director Committee, as applicable), he or she shall be permitted to designate
his or her successor (or, in the case of his or her death or disability, the
other remaining Dime Member shall be permitted to so designate).
7.8. Indemnification; Directors' and Officers' Insurance.
(a) From and after the Effective Time, in the event of any claim,
action, suit, proceeding or investigation, whether civil, criminal or
administrative, including, without limitation, any such claim, action,
suit, proceeding or investigation in which any person who is now, or
has been at any time prior to the date of this Agreement, or who
becomes prior to the Effective Time, a director, officer or employee of
Dime or any of its Subsidiaries (the "Indemnified Parties") is, or is
threatened to be, made a party based in whole or in part on, or arising
in whole or in part out of, or pertaining to (i) the fact that he is or
was a director, officer or employee of Dime, any of its Subsidiaries or
any of their respective predecessors or was prior to the Effective Time
serving at the request of any such party as a director, officer,
employee, fiduciary or agent of another corporation,
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partnership, trust or other enterprise (a list of which directors,
officers and employees of Dime or any of its Subsidiaries who as of the
date of this Agreement are serving in any such capacity with another
corporation, trust, partnership, trust or other enterprise is set forth
in Section 7.8(a) of the Dime Disclosure Schedule) or (ii) this
Agreement, or any of the transactions contemplated hereby and all
actions taken by an Indemnified Party in connection herewith, whether
in any case asserted or arising before or after the Effective Time,
Washington Mutual shall indemnify and hold harmless, as and to the
fullest extent permitted by applicable law, each such Indemnified Party
against any losses, claims, damages, liabilities, costs, expenses
(including reasonable attorneys' fees and expenses in advance of the
final disposition of any claim, suit, proceeding or investigation to
each Indemnified Party to the fullest extent permitted by law upon
receipt of an undertaking, to the extent required by law, from such
Indemnified Party to repay such advanced expenses if it is determined
by a final and non-appealable judgment of a court of competent
jurisdiction that such Indemnified Party was not entitled to
indemnification hereunder), judgments, fines and amounts paid in
settlement in connection with any such threatened or actual claim,
action, suit, proceeding or investigation). Any Indemnified Party
wishing to claim indemnification under this Section 7.8, upon learning
of any such claim, action, suit, proceeding or investigation, shall
notify Washington Mutual thereof, provided that the failure to so
notify shall not affect the obligations of Washington Mutual under this
Section 7.8 except (and only) to the extent such failure to notify
materially prejudices Washington Mutual.
(b) Without limiting any of the obligations under paragraph (a) of
this Section 7.8, Washington Mutual agrees that all rights to
indemnification and all limitations of liability existing in favor of
the Indemnified Parties as provided in Dime's Certificate of
Incorporation or Bylaws or in the corresponding constituent documents
of any of Dime's Subsidiaries as in effect as of the date of this
Agreement with respect to matters occurring on or prior to the
Effective Time shall survive the Merger and shall continue in full
force and effect thereafter, without any amendment thereto; provided,
however, that nothing contained in this Section 7.8(b) shall be deemed
to preclude the liquidation, consolidation or merger of Dime or any
Subsidiary thereof, in which case all of such rights to indemnification
and limitations on liability shall be deemed to so survive and continue
notwithstanding any such liquidation, consolidation or merger and shall
constitute rights which may be asserted against Washington Mutual.
Nothing contained in this Section 7.8(b) shall be deemed to preclude
any rights to indemnification or limitations on liability provided in
Washington Mutual's Articles of Incorporation or Bylaws or the similar
governing documents of any of Washington Mutual's Subsidiaries with
respect to matters occurring subsequent to the Effective Time to the
extent that the provisions establishing such rights or limitations are
not otherwise amended to the contrary.
(c) Washington Mutual shall use its best efforts to cause the
persons serving as officers and directors of Dime immediately prior to
the Effective Time to be covered for a period of six (6) years from the
Closing Date by the directors' and officers' liability insurance policy
or policies maintained by Washington Mutual (provided that Washington
Mutual's policy or policies provide at least the same coverage and
amounts containing terms and conditions which are in the aggregate no
less advantageous to such directors and officers of Dime than the terms
and conditions of the existing directors' and
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officers' liability insurance policy of Dime, and provided further that
in no event will Washington Mutual be required to expend in any one
year an amount in excess of 200% of the annual premiums currently paid
by Dime for such insurance (the "Insurance Amount"), and further
provided, that if Washington Mutual is unable to maintain or obtain the
insurance called for by this Section 7.8(c) as a result of the
preceding proviso, Washington Mutual shall use its reasonable best
efforts to obtain as much comparable insurance as available for the
Insurance Amount) with respect to acts or omissions occurring prior to
the Effective Time which were committed by such officers and directors
in their capacity as such. The provisions of this Section 7.8 are
intended to be for the benefit of, and shall be enforceable by, each
Indemnified Party and his or her heirs and representatives.
7.9. Advice of Changes; Other Matters
(a) Washington Mutual and Dime shall promptly advise the other
party of any change or event which, individually or in the aggregate
with other such changes or events, has a Material Adverse Effect on it
or which it believes would or would be reasonably likely to cause or
constitute a material breach of any of its representations, warranties
or covenants contained herein.
(b) Dime will use all reasonable best efforts to implement, within
30 days after the date of this Agreement, procedures developed jointly
by the parties to ensure compliance with state and local consumer
protection laws relating to its retail subprime loan origination and
servicing businesses.
7.10. Subsequent Interim and Annual Financial Statements.
(a) As soon as reasonably available, but in no event more than 45
days after the end of each fiscal quarter (other than the fourth
quarter of a fiscal year) or 90 days after the end of each fiscal year
ending after the date of this Agreement, each party will deliver to the
other party its Quarterly Report on Form 10-Q or its Annual Report on
Form 10-K, as the case may be, as filed with the SEC under the Exchange
Act.
(b) As soon as reasonably practicable and as soon as they are
available, but in no event more than 30 days, after the end of each
calendar month ending after the date of this Agreement, Dime shall
furnish to Washington Mutual (i) consolidated and consolidating
financial statements (including balance sheet, statement of operations
and stockholders' equity) of Dime and each of its Subsidiaries as of
and for such month then ended, (ii) servicing reports regarding cash
flows, delinquencies and foreclosures on asset pools serviced or master
serviced by Dime or any of its Subsidiaries, and (iii) any internal
management reports relating to the foregoing. All information furnished
by Dime to Washington Mutual pursuant to this Section 7.10(b) shall be
held in confidence by Washington Mutual to the extent required by, and
in accordance with, the provisions of the Confidentiality Agreement.
7.11. Reorganization. Neither Washington Mutual nor Dime shall take, or
cause or permit any of its Subsidiaries to take, any action that could
reasonably be expected to prevent the Merger from qualifying as a reorganization
within the meaning of Section 368(a) of the Code.
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7.12. Exemption From Liability Under Section 16(b). Assuming that Dime
delivers to Washington Mutual the Section 16 Information (as defined below)
reasonably in advance of the Effective Time, the Board of Directors of
Washington Mutual, or a committee of Non-Employee Directors thereof (as such
term is defined for purposes of Rule 16b-3(d) under the Exchange Act), shall
reasonably promptly thereafter and in any event prior to the Effective Time
adopt a resolution providing that the receipt by the Dime Insiders (as defined
below) of Washington Mutual Common Stock in exchange for shares of Dime Common
Stock, and of options to purchase Washington Mutual Common Stock upon conversion
of Dime Options, in each case pursuant to the transactions contemplated hereby
and to the extent such securities are listed in the Section 16 Information
provided by Dime to Washington Mutual prior to the Effective Time, are intended
to be exempt from liability pursuant to Section 16(b) under the Exchange Act
such that any such receipt shall be so exempt. "Section 16 Information" shall
mean information accurate in all respects regarding the Dime Insiders, the
number of shares of Dime Common Stock held by each such Dime Insider and the
number and description of the Dime Options held by each such Dime Insider. "Dime
Insiders" shall mean those officers and directors of Dime who are subject to the
reporting requirements of Section 16(a) of the Exchange Act and who are listed
in the Section 16 Information.
7.13. Warrant Agreement Assumption. Washington Mutual shall enter into
an agreement with the Warrant Agent confirming the rights of holders of LTWs as
provided in Section 4.2(d) of the Warrant Agreement. Washington Mutual shall use
its best efforts to maintain the trading designation of the LTWs on the Nasdaq
Stock Market.
7.14. Board of Directors. At or promptly following the Effective Time,
Washington Mutual shall take all action necessary to appoint one member of
Dime's Board of Directors, selected by Washington Mutual after consultation with
Dime, to Washington Mutual's board of directors.
7.15. Insider Loan Disclosure. Within 30 days after the date of this
Agreement Dime shall prepare and deliver to Washington Mutual a schedule setting
forth the following information as of a date not more than 15 days prior to such
date of delivery: (i) all evidences of indebtedness reflected as assets on the
books and records of Dime and its Subsidiaries ("Loans") by Dime and its
Subsidiaries to executive officers (as such term is defined in Part 215 of Title
12 of the Code of Federal Regulations) of Dime or any of its Subsidiaries; (ii)
any such Loans to any employee, officer, director or other affiliate on which
the borrower is paying a rate other than that reflected in the note or the
relevant credit agreement or on which the borrower is paying a rate which was
below market at the time the Loan was made; and (iii) any such Loans which were
not made in compliance in all material respects with all applicable federal laws
and regulations.
7.16. Insurance Disclosure. Within 30 days after the date of this
Agreement Dime shall prepare and deliver to Washington Mutual a schedule setting
forth the following information as of a date not more than 15 days prior to such
date of delivery: a true and complete list and a brief description (including
name of insurer, agent, coverage and expiration date) of all insurance policies
in force with respect to the business and assets of Dime and its Subsidiaries
(other than insurance policies under which Dime or any Subsidiary thereof is
named as a loss payee, insured
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or additional insured as a result of its position as a secured lender on
specific loans and mortgage insurance policies on specific loans).
7.17. Management Consultation Meetings and Distribution of Information.
From the date of this Agreement until the Effective Time, Steve Freimuth the
Washington Mutual senior manager responsible for the integration of Washington
Mutual and Dime, and an officer of Dime (who shall be an executive vice
president or higher selected by Dime and reasonably acceptable to Washington
Mutual) responsible for the integration of Washington Mutual and Dime, shall
confer on a regular basis regarding the business and operations of Washington
Mutual and Dime.
7.18. Redesign of Branches. Dime shall cooperate with Washington Mutual
and use reasonable efforts to take all actions, in a manner that does not
unreasonably interfere with the conduct of business, necessary to facilitate the
redesign of Dime's branch offices with the view toward obtaining all necessary
permits and completing all other steps reasonably necessary for construction, at
Washington Mutual's direction and expense, to begin as promptly as possible
after the Closing Date.
8. Conditions Precedent
8.1. Conditions to Each Party's Obligation to Effect the Merger. The
respective obligations of each party to effect the Merger shall be subject to
the satisfaction at or prior to the Effective Time of the following conditions:
(a) Stockholder Approval. The agreement of merger contained in
this Agreement shall have been approved and adopted by the requisite
affirmative vote of the stockholders of Dime entitled to vote thereon.
(b) NYSE Listing. The shares of Washington Mutual Common Stock to
be issued to the holders of Dime Common Stock upon consummation of the
Merger, to each Warrant Holder in respect of the Deemed Shares in
accordance with the terms of the Voting/Purchase Agreement and to LTW
holders in accordance with the Warrant Agreement shall have been
authorized for listing on the NYSE, subject to official notice of
issuance.
(c) Other Approvals. All regulatory approvals required to
consummate the transactions contemplated hereby shall have been
obtained and shall remain in full force and effect and all statutory
waiting periods in respect thereof shall have expired or been
terminated (all such approvals and the expiration or termination of all
such waiting periods being referred to herein as the "Requisite
Regulatory Approvals").
(d) S-4 Effectiveness. The S-4 shall have become effective under
the Securities Act, no stop order suspending the effectiveness of the
S-4 shall have been issued and no proceedings for that purpose shall
have been initiated or threatened by the SEC.
(e) No Injunctions or Restraints; Illegality. No order, injunction
or decree issued by any court or agency of competent jurisdiction or
other legal restraint or
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prohibition (an "Injunction") preventing the consummation of the Merger
or any of the other transactions contemplated by this Agreement shall
be in effect. No statute, rule, regulation, order, injunction or decree
shall have been enacted, entered, promulgated or enforced by any
Governmental Entity which prohibits or makes illegal the consummation
of the Merger.
8.2. Conditions to Obligations of Washington Mutual. The obligations of
Washington Mutual to effect the Merger are also subject to the satisfaction or
waiver by Washington Mutual at or prior to the Effective Time of the following
conditions:
(a) Representations and Warranties. The representations and
warranties of Dime set forth in this Agreement shall be true and
correct in all respects as of the date of this Agreement and (except to
the extent such representations and warranties speak as of an earlier
date) as of the Closing Date as though made on and as of the Closing
Date; provided, however, that for purposes of determining the
satisfaction of this condition, no effect shall be given to any
exception in such representations and warranties relating to
materiality or a Material Adverse Effect, and instead, for purposes of
this condition, such representations and warranties (other than the
representations and warranties contained in Section 4.2(a), which shall
be true and correct in all material respects) shall be deemed to be
true and correct in all respects unless the failure or failures of such
representations and warranties to be so true and correct, individually
or in the aggregate, results or would reasonably be expected to result
in a Material Adverse Effect on Dime. Washington Mutual shall have
received a certificate signed on behalf of Dime by the Chief Executive
Officer and Chief Financial Officer of Dime to the foregoing effect.
(b) Performance of Obligations of Dime. Dime shall have performed
in all material respects all obligations required to be performed by it
under this Agreement at or prior to the Closing Date, and Washington
Mutual shall have received a certificate signed on behalf of Dime by
the Chief Executive Officer and the Chief Financial Officer of Dime to
such effect.
(c) Burdensome Condition. There shall not be any action taken, or
any statute, rule, regulation or order enacted, entered, enforced or
deemed applicable to the transactions contemplated by this Agreement,
by any Governmental Entity, in connection with the grant of a Requisite
Regulatory Approval or otherwise, which imposes any restriction or
condition which would be reasonably likely to have or result in a
Material Adverse Effect on the Surviving Company or Washington Mutual.
(d) Director Resignations. Washington Mutual shall have received
resignations from each director of each Dime Subsidiary designated by
Washington Mutual.
(e) Tax Opinion. Washington Mutual shall have received an opinion
of Simpson Thacher & Bartlett, counsel to Washington Mutual, dated the
Closing Date, to the effect that, on the basis of facts,
representations and assumptions set forth in such opinion, (i) the
Merger constitutes a "reorganization" within the meaning of Section
368(a) of the Code and (ii) each of Washington Mutual and Dime will be
a party to that
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reorganization within the meaning of Section 368(b) of the Code. In
rendering its opinion, such counsel may require and rely upon written
representations from Dime, Washington Mutual and stockholders of Dime.
(f) Satisfaction of Voting/Purchase Agreement Conditions. All
conditions precedent to the obligation of Washington Mutual to purchase
warrants from each Warrant Holder pursuant to the Voting/Purchase
Agreement shall have been duly satisfied or waived.
8.3. Conditions To Obligations Of Dime. The obligation of Dime to
effect the Merger is also subject to the satisfaction or waiver by Dime at or
prior to the Effective Time of the following conditions:
(a) Representations and Warranties. The representations and
warranties of Washington Mutual set forth in this Agreement shall be
true and correct in all respects as of the date of this Agreement and
(except to the extent such representations and warranties speak as of
an earlier date) as of the Closing Date as though made on and as of the
Closing Date; provided, however, that for purposes of determining the
satisfaction of this condition, no effect shall be given to any
exception in such representations and warranties relating to
materiality or a Material Adverse Effect, and instead, for purposes of
this condition, such representations and warranties shall be deemed to
be true and correct in all respects unless the failure or failures of
such representations and warranties to be so true and correct,
individually or in the aggregate, results or would reasonably be
expected to result in a Material Adverse Effect on Washington Mutual.
Dime shall have received a certificate signed on behalf of Washington
Mutual by the Chief Executive Officer and the Chief Financial Officer
of Washington Mutual to the foregoing effect.
(b) Performance of Obligations of Washington Mutual. Washington
Mutual shall have performed in all material respects all obligations
required to be performed by it under this Agreement at or prior to the
Closing Date, and Dime shall have received a certificate signed on
behalf of Washington Mutual by the Chief Executive Officer and the
Chief Financial Officer of Washington Mutual to such effect.
(c) Tax Opinion. Dime shall have received an opinion of Sullivan &
Cromwell, counsel to Dime, dated the Closing Date, to the effect that,
on the basis of facts, representations and assumptions set forth in
such opinion, (i) the Merger constitutes a "reorganization" within the
meaning of Section 368(a) of the Code, (ii) each of Dime and Washington
Mutual will be a party to that reorganization within the meaning of
Section 368(b) of the Code and (iii) subject to customary exceptions
and, except to the extent of any cash received, no gain or loss will be
recognized by any of the stockholders of Dime in the Merger. In
rendering its opinion, such counsel may require and rely upon written
representations from Dime, Washington Mutual and stockholders of Dime.
9. Termination and Amendment
9.1. Termination. This Agreement may be terminated at any time prior to
the Effective Time:
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(a) by mutual consent of Washington Mutual and Dime in a written
instrument, if the Board of Directors of each so determines;
(b) by either Washington Mutual or Dime if (i) any Governmental
Entity which must grant a Requisite Regulatory Approval has denied
approval of the Merger and such denial has become final and
nonappealable or (ii) any Governmental Entity of competent jurisdiction
shall have issued a final nonappealable order enjoining or otherwise
prohibiting the consummation of the transactions contemplated by this
Agreement;
(c) by either Washington Mutual or Dime if the Effective Time
shall not have occurred on or before April 30, 2002, unless the failure
of the Effective Time to occur by such date shall be due to the failure
of the party seeking to terminate this Agreement to perform or observe
the covenants and agreements of such party set forth herein;
(d) by either Washington Mutual or Dime (provided that the
terminating party is not then in material breach of any representation,
warranty, covenant or other agreement contained herein) if the other
party shall have breached (i) any of the covenants or agreements made
by such other party herein or (ii) any of the representations or
warranties made by such other party herein, and in either case, such
breach (x) is not cured within 30 days following written notice to the
party committing such breach, or which breach, by its nature, cannot be
cured prior to the Closing and (y) would entitle the non-breaching
party not to consummate the transactions contemplated hereby under
Section 8 hereof;
(e) by either Washington Mutual or Dime if any approval of the
stockholders of Dime contemplated by this Agreement shall not have been
obtained by reason of the failure to obtain the required vote at the
Dime Stockholders Meeting or at any adjournment or postponement
thereof;
(f) by Washington Mutual if (i) the Board of Directors of Dime
shall have failed to recommend the Merger, or shall have withdrawn,
modified or changed in a manner adverse to Washington Mutual its
recommendation of the Merger (or shall have disclosed its intention to
withdraw, modify or adversely change such recommendation), (ii) Dime
shall have breached the terms of Section 6.2(f) hereof in any respect
adverse to Washington Mutual, or (iii) Dime shall have materially
breached its obligations under Section 7.3 by failing to call, give
notice of, convene and hold the Dime Stockholders Meeting in accordance
with Section 7.3; or
(g) by Washington Mutual if a tender offer or exchange offer for
25% or more of the outstanding shares of Dime Common Stock is commenced
(other than by Washington Mutual or a Subsidiary thereof), and the
Board of Directors of Dime recommends that the stockholders of Dime
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 10 business day period specified in Rule
14e-2(a) under the Exchange Act.
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9.2. Effect of Termination.
(a) In the event of termination of this Agreement by either
Washington Mutual or Dime as provided in Section 9.1, this Agreement
shall forthwith become void and have no effect, and none of Washington
Mutual, Dime, any of their respective Subsidiaries or any of the
officers or directors of any of them shall have any liability of any
nature whatsoever hereunder, or in connection with the transactions
contemplated hereby, except that (i) Sections 7.2(b), 9.2, and 10.2
shall survive any termination of this Agreement and (ii)
notwithstanding anything to the contrary contained in this Agreement,
neither Washington Mutual nor Dime shall be relieved or released from
any liabilities or damages arising out of its willful breach of any
provision of this Agreement.
(b) Dime shall pay Washington Mutual, by wire transfer of
immediately available funds, the sum of $185 million (the "Termination
Fee") if this Agreement is terminated as follows:
(i) if this Agreement is terminated by Washington Mutual
pursuant to Sections 9.1(f) or 9.1(g), then Dime shall pay the
entire Termination Fee on the second Business Day following such
termination; and
(ii) if this Agreement is terminated by (A) Washington Mutual
pursuant to Section 9.1(d) if the breach giving rise to such
termination was willful or (B) by either Washington Mutual or Dime
pursuant to Section 9.1(e) and in any such case an Acquisition
Proposal shall have been publicly announced or otherwise
communicated or made known to the senior management or Board of
Directors of Dime (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 date of the taking of
the vote of the stockholders of Dime contemplated by this
Agreement at the Dime Stockholders Meeting, in the case of clause
(B), or the date of termination, in the case of clause (A), then
Dime shall (x) pay Washington Mutual an amount equal to $20
million on the second Business Day following such termination, and
(y) if within 18 months after such termination, Dime or any of its
Subsidiaries enters into a definitive agreement with respect to,
or consummates, an Acquisition Proposal, then Dime shall pay the
Termination Fee (net of any payment made pursuant to clause (x)
above) on the date of such execution or consummation.
(c) Any amount that becomes payable pursuant to Section 9.2(b)
shall be paid by wire transfer of immediately available funds to an
account designated by Washington Mutual.
(d) Dime and Washington Mutual agree that the agreement contained
in paragraph (b) above is an integral part of the transactions
contemplated by this Agreement, that without such agreement Washington
Mutual would not have entered into this Agreement, and that such
amounts do not constitute a penalty. If Dime fails to pay Washington
Mutual the amounts due under paragraph (b) above within the time
periods
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specified in such paragraph (b), Dime shall pay the costs and expenses
(including reasonable legal fees and expenses) incurred by Washington
Mutual in connection with any action in which Washington Mutual
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.
9.3. Amendment. Subject to compliance with applicable law, this
Agreement may be amended by the parties hereto, by action taken or authorized by
their respective Boards of Directors, at any time before or after approval of
the matters presented in connection with the Merger by the stockholders of Dime;
provided, however, that after any approval of the transactions contemplated by
this Agreement by Dime's stockholders, there may not be, without further
approval of such stockholders, any amendment of this Agreement which reduces the
amount or changes the form of the consideration to be delivered to the Dime
stockholders hereunder other than as contemplated by this Agreement or which
negatively impacts the intended tax treatment of the holders of Dime Common
Stock. This Agreement may not be amended except by an instrument in writing
signed on behalf of each of the parties hereto.
9.4. Extension; Waiver. At any time prior to the Effective Time, the
parties hereto may, to the extent legally allowed, (a) extend the time for the
performance of any of the obligations or other acts of the other parties hereto,
(b) waive any inaccuracies in the representations and warranties contained
herein or in any document delivered pursuant hereto and (c) waive compliance
with any of the agreements or conditions contained herein. Any agreement on the
part of a party hereto to any such extension or waiver shall be valid only if
set forth in a written instrument signed on behalf of such party, but such
extension or waiver or failure to insist on strict compliance with an
obligation, covenant, agreement or condition shall not operate as a waiver of,
or estoppel with respect to, any subsequent or other failure.
10. General Provisions
10.1. Nonsurvival of Representations, Warranties and Agreements. None
of the representations, warranties, covenants and agreements in this Agreement
or in any instrument delivered pursuant to this Agreement shall survive the
Effective Time, except for those covenants and agreements contained herein and
therein which by their terms apply in whole or in part after the Effective Time.
10.2. Expenses. Except as provided in Section 9.2 hereof, all costs and
expenses incurred in connection with this Agreement and the transactions
contemplated hereby shall be paid by the party incurring such expense.
10.3. Notices. All notices and other communications hereunder shall be
in writing and shall be deemed given if delivered personally, telecopied (with
confirmation) or delivered by an overnight courier (with confirmation) to the
parties at the following addresses (or at such other address for a party as
shall be specified by like notice):
(a) if to Washington Mutual, to:
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Washington Mutual, Inc.
1201 Third Avenue - WMT 1501
Seattle, WA 98101
Fax: (206) 461-5739
Attn: Craig E. Tall
with a copy to:
Simpson Thacher & Bartlett
425 Lexington Avenue
New York, NY 10017
Fax: (212) 455-2502
Attn: Lee Meyerson
Brian Stadler
(b) if to Dime, to:
Dime Bancorp, Inc.
589 Fifth Avenue
New York, NY 10017
Fax: (212) 326-6110
Attn: James E. Kelly
with a copy to:
Sullivan & Cromwell
125 Broad Street
New York, NY 10004
Fax: (212) 558-3588
Attn: Mitchell S. Eitel
10.4. Interpretation. The words "hereof," "herein" and "hereunder" and
words of similar import when used in this Agreement shall refer to this
Agreement as a whole and not to any particular provision of this Agreement, and
Section references are to this Agreement unless otherwise specified. Whenever
the words "include," "includes" or "including" are used in this Agreement, they
shall be deemed to be followed by the words "without limitation." The table of
contents and headings contained in this Agreement are for reference purposes
only and shall not affect in any way the meaning or interpretation of this
Agreement. No provision of this Agreement shall be construed to require Dime,
Washington Mutual or any of their respective officers, directors, Subsidiaries
or affiliates to take any action which would violate or conflict with any
applicable law (whether statutory or common), rule or regulation. It is agreed
that any disclosure in a particular section of a party's Disclosure Schedule
shall be deemed disclosed in respect of any other section thereof to the extent
it is readily apparent that such disclosure is applicable to such other section.
10.5. Counterparts. This Agreement may be executed in counterparts, all
of which shall be considered one and the same agreement and shall become
effective when counterparts have
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been signed by each of the parties and delivered to the other parties, it being
understood that all parties need not sign the same counterpart.
10.6. Entire Agreement. This Agreement (together with the documents and
the instruments referred to herein) constitutes the entire agreement and
supersedes all prior agreements and understandings, both written and oral, among
the parties with respect to the subject matter hereof, other than the
Confidentiality Agreement, which shall survive the execution and delivery of
this Agreement to the extent provided in Section 7.2(b).
10.7. Governing Law. This Agreement shall be governed and construed in
accordance with the laws of the State of Washington, without regard to any
applicable conflicts of law provisions (except to the extent that mandatory
provisions of federal law or the DGCL are applicable).
10.8. Severability. Any term or provision of this Agreement which is
determined by a court of competent jurisdiction to be invalid or unenforceable
in any jurisdiction shall, as to that jurisdiction, be ineffective to the extent
of such invalidity or unenforceability without rendering invalid or
unenforceable the remaining terms and provisions of this Agreement or affecting
the validity or enforceability of any of the terms or provisions of this
Agreement in any other jurisdiction, and if any provision of this Agreement is
determined to be so broad as to be unenforceable, the provision shall be
interpreted to be only so broad as is enforceable, in all cases so long as
neither the economic nor legal substance of the transactions contemplated hereby
is affected in any manner materially adverse to any party or its stockholders.
Upon any such determination, the parties shall negotiate in good faith in an
effort to agree upon a suitable and equitable substitute provision to effect the
original intent of the parties.
10.9. Publicity. Washington Mutual and Dime shall consult with each
other before issuing any press release with respect to the Merger or this
Agreement and shall not issue any such press release or make any such public
statement without the prior consent of the other party, which shall not be
unreasonably withheld; provided, however, that a party may, without the prior
consent of the other party (but after prior consultation, to the extent
practicable in the circumstances) issue such press release or make such public
statement as may upon the advice of outside counsel be required by law or the
rules and regulations of the NYSE. Without limiting the reach of the preceding
sentence, Washington Mutual and Dime shall cooperate to develop all public
announcement materials and (b) make appropriate management available at
presentations related to the transactions contemplated by this Agreement as
reasonably requested by the other party. In addition, Dime and its Subsidiaries
shall (a) consult with Washington Mutual regarding communications with
customers, stockholders, prospective investors and employees related to the
transactions contemplated hereby, (b) provide Washington Mutual with stockholder
lists of Dime and (c) allow and facilitate Washington Mutual contact with
stockholders of Dime and other prospective investors.
10.10. Assignment; Third Party Beneficiaries. Neither this Agreement
nor any of the rights, interests or obligations of any party hereunder shall be
assigned by any of the parties hereto (whether by operation of law or otherwise)
without the prior written consent of the other party. Subject to the preceding
sentence, this Agreement will be binding upon, inure to the benefit of and be
enforceable by the parties and their respective successors and permitted
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assigns. Except as otherwise specifically provided in Section 7.8 hereof, this
Agreement (including the documents and instruments referred to herein) is not
intended to confer upon any person other than the parties hereto any rights or
remedies hereunder.
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IN WITNESS WHEREOF, Washington Mutual and Dime have caused this
Agreement to be executed by their respective officers hereunto duly authorized
as of the date first above written.
WASHINGTON MUTUAL, INC.
By: /s/ Craig E. Tall
----------------------------------
Name: Craig E. Tall
Title: Vice Chair
DIME BANCORP, INC.
By: /s/ Lawrence Toal
----------------------------------
Name: Lawrence Toal
Title: President and Chief
Executive Officer