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EXHIBIT 2.1
AGREEMENT AND PLAN OF MERGER
BY AND BETWEEN
PARK MERIDIAN FINANCIAL CORPORATION
AND
REGIONS FINANCIAL CORPORATION
DATED AS OF JUNE 26, 2001
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TABLE OF CONTENTS
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Parties....................................................................................................1
Preamble...................................................................................................1
ARTICLE 1 - TRANSACTIONS AND TERMS OF MERGER...............................................................2
1.1 Merger......................................................................................2
1.2 Time and Place of Closing...................................................................2
1.3 Effective Time..............................................................................2
1.4 Execution of Support Agreements.............................................................2
1.5 Execution of the Stock Option Agreement.....................................................2
ARTICLE 2 - TERMS OF MERGER................................................................................2
2.1 Certificate of Incorporation................................................................2
2.2 Bylaws......................................................................................3
2.3 Directors and Officers......................................................................3
ARTICLE 3 - MANNER OF CONVERTING SHARES....................................................................3
3.1 Conversion of Shares........................................................................3
3.2 Anti-Dilution Provisions....................................................................3
3.3 Shares Held by Park Meridian or Regions.....................................................4
3.4 Dissenting Stockholders.....................................................................4
3.5 Fractional Shares...........................................................................4
3.6 Conversion of Stock Rights..................................................................4
ARTICLE 4 - EXCHANGE OF SHARES.............................................................................5
4.1 Exchange Procedures.........................................................................5
4.2 Rights of Former Park Meridian Stockholders.................................................6
ARTICLE 5 - REPRESENTATIONS AND WARRANTIES OF PARK MERIDIAN................................................7
5.1 Organization, Standing, and Power...........................................................7
5.2 Authority; No Breach of Agreement...........................................................7
5.3 Capital Stock...............................................................................8
5.4 Park Meridian Subsidiaries..................................................................9
5.5 SEC Filings; Financial Statements...........................................................9
5.6 Absence of Undisclosed Liabilities.........................................................10
5.7 Absence of Certain Changes or Events.......................................................10
5.8 Tax Matters................................................................................10
5.9 Assets.....................................................................................12
5.10 Environmental Matters......................................................................12
5.11 Compliance with Laws.......................................................................13
5.12 Labor Relations............................................................................14
5.13 Employee Benefit Plans.....................................................................14
5.14 Material Contracts.........................................................................16
5.15 Legal Proceedings..........................................................................17
5.16 Reports....................................................................................17
5.17 Statements True and Correct................................................................17
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5.18 Tax and Regulatory Matters.................................................................18
5.19 Intellectual Property......................................................................18
5.20 State Takeover Laws........................................................................19
5.21 Charter Provisions.........................................................................19
5.22 Support Agreements.........................................................................19
5.23 Derivatives................................................................................19
ARTICLE 6 - REPRESENTATIONS AND WARRANTIES OF REGIONS.....................................................19
6.1 Organization, Standing, and Power..........................................................19
6.2 Authority; No Breach of Agreement..........................................................20
6.3 Capital Stock..............................................................................20
6.4 Regions Subsidiaries.......................................................................21
6.5 SEC Filings; Financial Statements..........................................................21
6.6 Absence of Undisclosed Liabilities.........................................................22
6.7 Absence of Certain Changes or Events.......................................................22
6.8 Compliance with Laws.......................................................................22
6.9 Legal Proceedings..........................................................................23
6.10 Reports....................................................................................23
6.11 Statements True and Correct................................................................23
6.12 Tax and Regulatory Matters.................................................................24
6.13 Derivatives................................................................................24
ARTICLE 7 - CONDUCT OF BUSINESS PENDING CONSUMMATION......................................................24
7.1 Affirmative Covenants of Both Parties......................................................24
7.2 Negative Covenants of Park Meridian........................................................24
7.3 Adverse Changes in Condition...............................................................26
7.4 Reports....................................................................................26
ARTICLE 8 - ADDITIONAL AGREEMENTS.........................................................................27
8.1 Registration Statement; Proxy Statement; Stockholder Approval..............................27
8.2 Applications...............................................................................27
8.3 Filings with State Offices.................................................................27
8.4 Agreement as to Efforts to Consummate......................................................28
8.5 Investigation and Confidentiality..........................................................28
8.6 Press Releases.............................................................................29
8.7 No Solicitation............................................................................29
8.8 Tax Treatment..............................................................................29
8.9 Agreement of Affiliates....................................................................30
8.10 Employee Benefits and Contracts............................................................30
8.11 Indemnification............................................................................31
8.12 Exemption for Liability Under Section 16(b)................................................32
ARTICLE 9 - CONDITIONS PRECEDENT TO OBLIGATIONS TO CONSUMMATE.............................................33
9.1 Conditions to Obligations of Each Party....................................................33
9.2 Conditions to Obligations of Regions.......................................................34
9.3 Conditions to Obligations of Park Meridian.................................................35
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ARTICLE 10 - TERMINATION..................................................................................36
10.1 Termination................................................................................36
10.2 Effect of Termination......................................................................37
10.3 Non-Survival of Representations and Covenants..............................................37
ARTICLE 11 - MISCELLANEOUS................................................................................37
11.1 Definitions................................................................................37
11.2 Expenses...................................................................................46
11.3 Brokers and Finders........................................................................46
11.4 Entire Agreement...........................................................................46
11.5 Amendments.................................................................................46
11.6 Waivers....................................................................................47
11.7 Assignment.................................................................................47
11.8 Notices....................................................................................47
11.9 Governing Law..............................................................................48
11.10 Counterparts...............................................................................48
11.11 Captions...................................................................................48
11.12 Interpretations............................................................................48
11.13 Enforcement of Agreement...................................................................49
11.14 Severability...............................................................................49
Signatures................................................................................................50
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LIST OF EXHIBITS
EXHIBIT NUMBER DESCRIPTION
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1. Form of Support Agreement. (ss. 1.4).
2. Form of Stock Option Agreement. (ss. 1.4).
3. Form of Affiliate Agreement. (ss. 8.11).
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AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER (this "Agreement") is made
and entered into as of June 26, 2001, by and between PARK MERIDIAN FINANCIAL
CORPORATION ("Park Meridian"), a corporation organized and existing under the
Laws of the State of North Carolina, with its principal office located in
Charlotte, North Carolina; and REGIONS FINANCIAL CORPORATION ("Regions"), a
corporation organized and existing under the Laws of the State of Delaware, with
its principal office located in Birmingham, Alabama.
PREAMBLE
The Boards of Directors of Park Meridian and Regions are of
the opinion that the transactions described herein are in the best interests of
the parties to this Agreement and their respective stockholders. This Agreement
provides for the acquisition of Park Meridian by Regions pursuant to the merger
of Park Meridian with and into Regions. At the effective time of the merger, the
outstanding shares of the capital stock of Park Meridian shall be converted into
shares of the common stock of Regions (except as provided herein). As a result,
stockholders of Park Meridian shall become stockholders of Regions, and each of
the subsidiaries of Park Meridian shall continue to conduct its business and
operations as a subsidiary of Regions. The transactions described in this
Agreement are subject to the approvals of the stockholders of Park Meridian, the
Board of Governors of the Federal Reserve System, and certain state regulatory
authorities, and the satisfaction of certain other conditions described in this
Agreement. It is the intention of the parties to this Agreement that the Merger
for federal income tax purposes shall qualify as a "reorganization" within the
meaning of Section 368(a) of the Internal Revenue Code and that this Agreement
shall constitute a "plan of reorganization" for purposes of Sections 354 and 361
of the Internal Revenue Code.
As a condition and inducement to Regions' willingness to enter
into this Agreement, (i) Park Meridian's directors and certain executive
officers are executing and delivering to Regions an agreement (a "Support
Agreement"), in substantially the form of Exhibit 1, and (ii) Park Meridian and
Regions are entering into a stock option agreement (the "Stock Option
Agreement"), in substantially the form of Exhibit 2.
Certain terms used in this Agreement are defined in Section
11.1 of this Agreement.
NOW, THEREFORE, in consideration of the above and the mutual
warranties, representations, covenants, and agreements set forth herein, and
intending to be legally bound hereby, the Parties agree as follows:
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ARTICLE 1
TRANSACTIONS AND TERMS OF MERGER
1.1 MERGER. Subject to the terms and conditions of this
Agreement, at the Effective Time, Park Meridian shall be merged with and into
Regions in accordance with the provisions of Sections 55-11-01 and 55-11-07 of
the NCBCA and Sections 252 and 258 of the DGCL and with the effect provided in
Section 55-11-06 of the NCBCA and Section 259 of the DGCL, respectively (the
"Merger"). Regions shall be the Surviving Corporation resulting from the Merger
and shall continue to be governed by the Laws of the State of Delaware. The
Merger shall be consummated pursuant to the terms of this Agreement, which has
been approved and adopted by the respective Boards of Directors of Park Meridian
and Regions.
1.2 TIME AND PLACE OF CLOSING. The consummation of the
Merger (the "Closing") shall take place at 9:00 A.M. on the date that the
Effective Time occurs (or the immediately preceding day if the Effective Time is
earlier than 9:00 A.M.), or at such other time as the Parties, acting through
their duly authorized officers, may mutually agree. The place of Closing shall
be at such location as may be mutually agreed upon by the Parties.
1.3 EFFECTIVE TIME. The Merger and the other transactions
contemplated by this Agreement shall become effective on the date and at the
time the North Carolina Articles of Merger reflecting the Merger shall become
effective with the Secretary of State of the State of North Carolina and the
Delaware Certificate of Merger reflecting the Merger shall become effective with
the Secretary of State of the State of Delaware (the "Effective Time"). Subject
to the terms and conditions hereof, unless otherwise mutually agreed upon by the
duly authorized officers of each Party, the Parties shall use their reasonable
efforts to cause the Effective Time to occur on the last business day of the
month in which the last of the following occurs: (i) the effective date
(including expiration of any applicable waiting period) of the last required
Consent of any Regulatory Authority having authority over and approving or
exempting the Merger and (ii) the date on which the stockholders of Park
Meridian approve the matters relating to this Agreement required to be approved
by such stockholders by applicable Law, or such later day within 30 days thereof
as may be specified.
1.4 EXECUTION OF SUPPORT AGREEMENTS. Simultaneously with
the execution of this Agreement and as a condition hereto, the directors and
certain executive officers of Park Meridian are executing and delivering to
Regions a Support Agreement.
1.5 EXECUTION OF THE STOCK OPTION AGREEMENT.
Simultaneously with the execution of this Agreement and as a condition hereto,
Park Meridian is executing and delivering to Regions the Stock Option Agreement.
ARTICLE 2
TERMS OF MERGER
2.1 CERTIFICATE OF INCORPORATION. The Certificate of
Incorporation of Regions in effect immediately prior to the Effective Time shall
be the Certificate of
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Incorporation of the Surviving Corporation after the Effective Time until
otherwise amended or repealed.
2.2 BYLAWS. The Bylaws of Regions in effect immediately
prior to the Effective Time shall be the Bylaws of the Surviving Corporation
after the Effective Time until otherwise amended or repealed.
2.3 DIRECTORS AND OFFICERS. The directors of Regions in
office immediately prior to the Effective Time, together with such additional
persons as may thereafter be elected, shall serve as the directors of the
Surviving Corporation from and after the Effective Time in accordance with the
Bylaws of the Surviving Corporation. The officers of Regions in office
immediately prior to the Effective Time, together with such additional persons
as may thereafter be elected, shall serve as the officers of the Surviving
Corporation from and after the Effective Time in accordance with the Bylaws of
the Surviving Corporation.
ARTICLE 3
MANNER OF CONVERTING SHARES
3.1 CONVERSION OF SHARES. Subject to the provisions of
this Article 3, at the Effective Time, by virtue of the Merger and without any
action on the part of Regions or Park Meridian, or the stockholders of either of
the foregoing, the shares of the constituent corporations shall be converted as
follows:
(a) Each share of Regions Common Stock issued
and outstanding immediately prior to the Effective Time shall remain
issued and outstanding from and after the Effective Time.
(b) Each share of Park Meridian Common Stock,
excluding shares held by any Park Meridian Company or any Regions
Company, in each case other than in a fiduciary capacity or as a result
of debts previously contracted, issued and outstanding at the Effective
Time shall cease to be outstanding and shall be converted into .55 of a
share of Regions Common Stock (subject to adjustment as set forth in
the following proviso, the "Exchange Ratio"); provided that in the
event the Average Price is less than $29.00, the Exchange Ratio shall
be equal to the quotient obtained by dividing (i) the product of $29.00
and the Exchange Ratio (as then in effect) by (ii) the Average Price.
3.2 ANTI-DILUTION PROVISIONS. In the event Park Meridian
changes the number of shares of Park Meridian Common Stock issued and
outstanding prior to the Effective Time as a result of a stock split, reverse
stock split, stock dividend, or similar recapitalization with respect to such
stock, the Exchange Ratio shall be proportionately adjusted. In the event
Regions changes the number of shares of Regions Common Stock issued and
outstanding prior to the Effective Time as a result of a stock split, reverse
stock split, stock dividend, or similar recapitalization with respect to such
stock and the record date therefor (in the case of a stock dividend) or the
effective date thereof (in the case of a stock split or similar recapitalization
for
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which a record date is not established) shall be prior to the Effective Time,
the Exchange Ratio shall be proportionately adjusted.
3.3 SHARES HELD BY PARK MERIDIAN OR REGIONS. Each of the
shares of Park Meridian Common Stock held by any Park Meridian Company or by any
Regions Company, in each case other than in a fiduciary capacity or as a result
of debts previously contracted, shall be canceled and retired at the Effective
Time and no consideration shall be issued in exchange therefor.
3.4 DISSENTING STOCKHOLDERS. Any holder of shares of Park
Meridian Common Stock who perfects such holder's dissenters' rights of appraisal
in accordance with and as contemplated by Article 13 of the NCBCA shall be
entitled to receive the value of such shares in cash as determined pursuant to
such provision of Law; provided, however, that no such payment shall be made to
any dissenting stockholder unless and until such dissenting stockholder has
complied with the applicable provisions of the NCBCA and surrendered to the
Surviving Corporation the certificate or certificates representing the shares
for which payment is being made. In the event that after the Effective Time a
dissenting stockholder of Park Meridian fails to perfect, or effectively
withdraws or loses, such holder's right to appraisal and of payment for such
holder's shares, Regions shall issue and deliver the consideration to which such
holder of shares of Park Meridian Common Stock is entitled under this Article 3
(without interest) upon surrender by such holder of the certificate or
certificates representing shares of Park Meridian Common Stock held by such
holder.
3.5 FRACTIONAL SHARES. Notwithstanding any other
provision of this Agreement, each holder of shares of Park Meridian Common Stock
exchanged pursuant to the Merger who would otherwise have been entitled to
receive a fraction of a share of Regions Common Stock shall receive, in lieu
thereof, cash (without interest) in an amount equal to a fractional part of a
share of Regions Common Stock multiplied by the market value of one share of
Regions Common Stock at the Effective Time. The market value of one share of
Regions Common Stock at the Effective Time shall be the last sale price of
Regions Common Stock at the close of regular trading on the Nasdaq NMS (as
reported by The Wall Street Journal or, if not reported thereby, any other
authoritative source agreed to by Park Meridian and Regions) on the last trading
day preceding the Effective Time. No such holder will be entitled to dividends,
voting rights, or any other rights as a stockholder in respect of any fractional
shares.
3.6 CONVERSION OF STOCK RIGHTS.
(a) At the Effective Time, all rights with
respect to Park Meridian Common Stock pursuant to stock options or stock
appreciation rights ("Park Meridian Options") granted by Park Meridian under the
Park Meridian Stock Plans, which are outstanding at the Effective Time, whether
or not exercisable, shall be converted into and become rights with respect to
Regions Common Stock, and Regions shall assume each Park Meridian Option, in
accordance with the terms of the Park Meridian Stock Plan and stock option
agreement by which it is evidenced. From and after the Effective Time, (i) each
Park Meridian Option assumed by Regions may be exercised solely for shares of
Regions Common Stock (or cash in the case of stock appreciation rights), (ii)
the number of shares of Regions Common Stock subject to such Park Meridian
Option shall be equal to the number of shares of Park Meridian Common Stock
subject to such
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Park Meridian Option immediately prior to the Effective Time multiplied by the
Exchange Ratio, and (iii) the per share exercise price under each such Park
Meridian Option shall be adjusted by dividing the per share exercise price under
each such Park Meridian Option by the Exchange Ratio and rounding down to the
nearest cent. It is intended that the foregoing assumption shall be undertaken
in a manner that will not constitute a "modification" as defined in Section 424
of the Internal Revenue Code, as to any stock option which is an "incentive
stock option." Park Meridian and Regions agree to take all necessary steps to
effectuate the foregoing provisions of this Section 3.6.
(b) As soon as reasonably practicable after the
Effective Time, Regions shall file a registration statement on Form S-3 or S-8,
as the case may be (or any successor or other appropriate forms), with respect
to the shares of Regions Common Stock subject to such options and shall use its
reasonable efforts to maintain the effectiveness of such registration statement
(and maintain the current status of the prospectus or prospectuses therein) for
so long as such options remain outstanding.
(c) As soon as reasonably practicable after the
Effective Time, Regions shall deliver to the participants in each of the Park
Meridian Stock Plans an appropriate notice setting forth such participant's
rights pursuant thereto and the grants pursuant to such Park Meridian Stock Plan
shall continue in effect on the same terms and conditions (subject to the
adjustments required by Section 3.6(a) of this Agreement after giving effect to
the Merger), and Regions shall comply with the terms of each of the Park
Meridian Stock Plans to ensure, to the extent required by, and subject to the
provisions of, such Park Meridian Stock Plan, that Park Meridian Options that
qualified as incentive stock options prior to the Effective Time continue to
qualify as incentive stock options after the Effective Time. At or prior to the
Effective Time, Regions shall take all corporate action necessary to reserve for
issuance sufficient shares of Regions Common Stock for delivery upon exercise of
Park Meridian Options assumed by it in accordance with this Section 3.6.
ARTICLE 4
EXCHANGE OF SHARES
4.1 EXCHANGE PROCEDURES.
(a) As soon as reasonably practicable after the
Effective Time, Regions and Park Meridian shall cause the exchange agent
selected by Regions (the "Exchange Agent") to mail to the former stockholders of
Park Meridian appropriate transmittal materials (which shall specify that
delivery shall be effected, and risk of loss and title to the certificates
theretofore representing shares of Park Meridian Common Stock shall pass, only
upon proper delivery of such certificates to the Exchange Agent). After the
Effective Time, Regions shall cause each holder of shares of Park Meridian
Common Stock (other than shares to be canceled pursuant to Section 3.3 of this
Agreement or as to which dissenters' rights of appraisal as contemplated by
Section 3.4 of this Agreement have been perfected and not withdrawn or forfeited
under Article 13 of the NCBCA) issued and outstanding at the Effective Time
promptly
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upon surrender of the certificate or certificates representing such shares to
the Exchange Agent, to receive in exchange therefor the consideration provided
in Section 3.1 of this Agreement, together with all undelivered dividends and
other distributions in respect of such shares (without interest thereon)
pursuant to Section 4.2 of this Agreement. To the extent required by Section 3.5
of this Agreement, each holder of shares of Park Meridian Common Stock issued
and outstanding at the Effective Time also shall receive, upon surrender of the
certificate or certificates representing such shares, cash in lieu of any
fractional share of Regions Common Stock to which such holder may be otherwise
entitled (without interest). Until so surrendered, each outstanding certificate
of Park Meridian Common Stock shall be deemed for all purposes, other than as
provided below with respect to the payment of dividends or other distributions
payable to the holders of shares of Regions Common Stock, to represent the
consideration into which the number of shares of Park Meridian Common Stock
represented thereby prior to the Effective Time shall have been converted.
Regions shall not be obligated to deliver the consideration to which any former
holder of Park Meridian Common Stock is entitled as a result of the Merger until
such holder surrenders such holder's certificate or certificates representing
the shares of Park Meridian Common Stock for exchange as provided in this
Section 4.1. The certificate or certificates of Park Meridian Common Stock so
surrendered shall be duly endorsed as the Exchange Agent may require. Any other
provision of this Agreement notwithstanding, neither the Surviving Corporation,
Park Meridian, nor the Exchange Agent shall be liable to a holder of Park
Meridian Common Stock for any amounts paid or property delivered in good faith
to a public official pursuant to any applicable abandoned property Law.
(b) In the event any Park Meridian Common Stock
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 Regions, the posting by such person of
a bond in such amount as Regions may reasonably direct as indemnity against any
claim that may be made against it with respect to such certificate, the Exchange
Agent shall issue in exchange for such lost, stolen, or destroyed certificate,
the consideration deliverable in respect thereof pursuant to this Agreement.
4.2 RIGHTS OF FORMER PARK MERIDIAN STOCKHOLDERS. At the
Effective Time, the stock transfer books of Park Meridian shall be closed as to
holders of Park Meridian Common Stock immediately prior to the Effective Time
and no transfer of Park Meridian Common Stock by any such holder shall
thereafter be made or recognized. Until surrendered for exchange in accordance
with the provisions of Section 4.1 of this Agreement, each certificate
theretofore representing shares of Park Meridian Common Stock (other than shares
to be canceled pursuant to Section 3.3 of this Agreement or as to which
dissenters' rights of appraisal as contemplated by Section 3.4 of this Agreement
have been perfected and not withdrawn or forfeited under Article 13 of the
NCBCA) shall from and after the Effective Time represent for all purposes only
the right to receive the consideration provided in Sections 3.1 and 3.5 of this
Agreement in exchange therefor, subject, however, to the Surviving Corporation's
obligation to pay any dividends or make any other distributions with a record
date prior to the Effective Time which have been declared or made by Park
Meridian in respect of such shares of Park Meridian Common Stock in accordance
with the terms of this Agreement and which remain unpaid at the Effective Time.
To the extent permitted by Law, former holders of record of Park Meridian Common
Stock at the Effective Time (other than holders of shares as to which
dissenters' rights
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of appraisal as contemplated by Section 3.4 of this Agreement have been
perfected and not withdrawn or forfeited under Article 13 of the NCBCA) shall be
entitled to vote after the Effective Time at any meeting of Regions stockholders
the number of whole shares of Regions Common Stock into which their respective
shares of Park Meridian Common Stock are converted, regardless of whether such
holders have exchanged their certificates representing Park Meridian Common
Stock for certificates representing Regions Common Stock in accordance with the
provisions of this Agreement. Whenever a dividend or other distribution is
declared by Regions on the Regions Common Stock, the record date for which is at
or after the Effective Time, the declaration shall include dividends or other
distributions on all shares of Regions Common Stock issuable pursuant to this
Agreement, but no dividend or other distribution payable to the holders of
record of Regions Common Stock as of any time subsequent to the Effective Time
shall be delivered to the holder of any certificate representing shares of Park
Meridian Common Stock issued and outstanding at the Effective Time until such
holder surrenders such certificate for exchange as provided in Section 4.1 of
this Agreement. However, upon surrender of such Park Meridian Common Stock
certificate, both the Regions Common Stock certificate (together with all such
undelivered dividends or other distributions without interest) and any
undelivered dividends and cash payments to be paid for fractional share
interests (without interest) shall be delivered and paid with respect to each
share represented by such certificate.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF PARK MERIDIAN
Park Meridian hereby represents and warrants, except as
specifically disclosed in a section of the Park Meridian Disclosure Memorandum
corresponding to the relevant section of this Article 5, to Regions as follows:
5.1 ORGANIZATION, STANDING, AND POWER. Park Meridian is a
corporation duly incorporated, validly existing, and in good standing under the
Laws of the State of North Carolina, and has the corporate power and authority
to carry on its business as now conducted and to own, lease, and operate its
Material Assets. Park Meridian is duly qualified or licensed to transact
business as a foreign corporation in good standing in the States of the United
States and foreign jurisdictions where the character of its Assets or the nature
or conduct of its business requires it to be so qualified or licensed, except
for such jurisdictions in which the failure to be so qualified or licensed is
not reasonably likely to have, individually or in the aggregate, a Material
Adverse Effect on Park Meridian.
5.2 AUTHORITY; NO BREACH OF AGREEMENT.
(a) Park Meridian has the corporate power and
authority necessary to execute, deliver, and perform its obligations under this
Agreement and to consummate the transactions contemplated hereby. The execution,
delivery, and performance of this Agreement, and the consummation of the
transactions contemplated herein, including the Merger, have been duly and
validly authorized by all necessary corporate action (including valid
authorization and adoption of this Agreement by Park Meridian's duly constituted
Board of Directors) in respect
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thereof on the part of Park Meridian, subject to the approval of this Agreement
by the holders of a majority of the outstanding shares of Park Meridian Common
Stock, which is the only stockholder vote required for approval of this
Agreement and consummation of the Merger by Park Meridian. Subject to such
requisite stockholder approval, this Agreement (which for this purpose only does
not include the Stock Option Agreement) represents a legal, valid, and binding
obligation of Park Meridian, enforceable against Park Meridian in accordance
with its terms (except in all cases as such enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, receivership,
conservatorship, moratorium, or similar Laws affecting the enforcement of
creditors' rights generally and except that the availability of the equitable
remedy of specific performance or injunctive relief is subject to the discretion
of the court before which any proceeding may be brought).
(b) Neither the execution and delivery of this
Agreement by Park Meridian, nor the consummation by Park Meridian of the
transactions contemplated hereby, nor compliance by Park Meridian with any of
the provisions hereof, will (i) conflict with or result in a breach of any
provision of Park Meridian's Articles of Incorporation or Bylaws, or (ii)
constitute or result in a Default under, or require any Consent pursuant to, or
result in the creation of any Lien on any Asset of any Park Meridian Company
under, any Contract or Permit of any Park Meridian Company, where such Default
or Lien, or any failure to obtain such Consent, is reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on Park Meridian, or
(iii) subject to receipt of the requisite Consents referred to in Section 9.1(b)
of this Agreement, violate any Law or Order applicable to any Park Meridian
Company or any of their respective Material Assets, which violation is
reasonably likely to have, individually or in the aggregate, a Material Adverse
Effect on Park Meridian.
(c) Other than in connection or compliance with
the provisions of the Securities Laws, applicable state corporate and securities
Laws, and other than Consents required from Regulatory Authorities, and other
than notices to or filings with the Internal Revenue Service or the Pension
Benefit Guaranty Corporation or both with respect to any employee benefit plans,
or under the HSR Act, and other than Consents, filings, or notifications which,
if not obtained or made, are not reasonably likely to have, individually or in
the aggregate, a Material Adverse Effect on Park Meridian, no notice to, filing
with, or Consent of, any public body or authority is necessary for the
consummation by Park Meridian of the Merger and the other transactions
contemplated in this Agreement.
5.3 CAPITAL STOCK.
(a) The authorized capital stock of Park
Meridian consists, as of the date of this Agreement, of 25,000,000 shares of
Park Meridian Common Stock, of which, as of the date of this Agreement, (i)
2,798,073 shares were issued and outstanding and (ii) 354,278 shares of Park
Meridian Common Stock were issuable pursuant to outstanding awards under Park
Meridian's Stock Plans, and not more than 3,152,351 shares of Park Meridian
Common Stock will be issued and outstanding at the Effective Time. All of the
issued and outstanding shares of Park Meridian Common Stock are duly and validly
issued and outstanding and are fully paid and, except as expressly provided
otherwise under applicable Law, nonassessable under the NCBCA. None of the
outstanding shares of Park Meridian Common
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Stock has been issued in violation of any preemptive rights of the current or
past stockholders of Park Meridian.
(b) Except as set forth in Section 5.3(a) of
this Agreement or Section 5.3(b) of the Park Meridian Disclosure Memorandum,
there are no shares of capital stock or other equity securities of Park Meridian
outstanding and no outstanding Rights relating to the capital stock of Park
Meridian.
5.4 PARK MERIDIAN SUBSIDIARIES. Park Meridian has
disclosed in Section 5.4 of the Park Meridian Disclosure Memorandum all of the
Park Meridian Subsidiaries as of the date of this Agreement. Park Meridian or
one of its Subsidiaries owns all of the issued and outstanding shares of capital
stock of each Park Meridian Subsidiary. No equity securities of any Park
Meridian Subsidiary are or may become required to be issued (other than to
another Park Meridian Company) by reason of any Rights, and there are no
Contracts by which any Park Meridian Subsidiary is bound to issue (other than to
another Park Meridian Company) additional shares of its capital stock or Rights
or by which any Park Meridian Company is or may be bound to transfer any shares
of the capital stock of any Park Meridian Subsidiary (other than to another Park
Meridian Company). There are no Contracts relating to the rights of any Park
Meridian Company to vote or to dispose of any shares of the capital stock of any
Park Meridian Subsidiary. All of the shares of capital stock of each Park
Meridian Subsidiary held by a Park Meridian Company are fully paid and, except
as expressly provided otherwise under applicable Law, nonassessable under the
applicable corporate or banking Law of the jurisdiction in which such Subsidiary
is incorporated or organized and are owned by the Park Meridian Company free and
clear of any Lien. Each Park Meridian Subsidiary is either a bank, a limited
liability company, or a corporation, and is duly organized, validly existing,
and (if applicable) in good standing under the Laws of the jurisdiction in which
it is incorporated or organized, and has the corporate power and authority
necessary for it to own, lease, and operate its Assets and to carry on its
business as now conducted. Each Park Meridian Subsidiary is duly qualified or
licensed to transact business as a foreign corporation in good standing in the
States of the United States and foreign jurisdictions where the character of its
Assets or the nature or conduct of its business requires it to be so qualified
or licensed, except for such jurisdictions in which the failure to be so
qualified or licensed is not reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on Park Meridian. Each Park Meridian
Subsidiary that is a depository institution is an "insured depository
institution" as defined in the Federal Deposit Insurance Act and applicable
regulations thereunder, and the deposits in which are insured by the Bank
Insurance Fund or Savings Association Insurance Fund to the fullest extent
permitted by Law.
5.5 SEC FILINGS; FINANCIAL STATEMENTS.
(a) Park Meridian and each Park Meridian
Subsidiary has filed and made available to Regions all forms, reports, and
documents required to be filed by Park Meridian or such Park Meridian Subsidiary
with the SEC since December 31, 1996 (collectively, the "Park Meridian SEC
Reports"). The Park Meridian SEC Reports (i) at the time filed, complied in all
Material respects with the applicable requirements of the Securities Laws, and
(ii) did not at the time they were filed (or if amended or superseded by a
filing prior to the date of this Agreement, then on the date of such filing)
contain any untrue statement of a Material fact or
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omit to state a Material fact required to be stated in such Park Meridian SEC
Reports or necessary in order to make the statements in such Park Meridian SEC
Reports, in light of the circumstances under which they were made, not
misleading.
(b) Each of the Park Meridian Financial
Statements (including, in each case, any related notes) contained in the Park
Meridian SEC Reports, including any Park Meridian SEC Reports filed after the
date of this Agreement until the Effective Time, complied or will comply as to
form in all Material respects with the applicable requirements of the Securities
Laws with respect thereto, was prepared or will be prepared in accordance with
GAAP throughout the periods involved (except as may be indicated in the notes to
such financial statements, or, in the case of unaudited statements, as permitted
by Form 10-Q of the SEC), and fairly presented or will fairly present the
consolidated financial position of Park Meridian and its Subsidiaries as at the
respective dates and the consolidated results of its operations and cash flows
for the periods indicated, except that the unaudited interim financial
statements were or are subject to normal and recurring year-end adjustments
which were not or are not expected to be Material in amount or effect.
5.6 ABSENCE OF UNDISCLOSED LIABILITIES. No Park Meridian
Company has any Liabilities that are reasonably likely to have, individually or
in the aggregate, a Material Adverse Effect on Park Meridian, except Liabilities
which are accrued or reserved against in the consolidated balance sheets of Park
Meridian as of March 31, 2001, included in the Park Meridian Financial
Statements or reflected in the notes thereto, Liabilities incurred in the
ordinary course of business subsequent to March 31, 2001, and Liabilities to be
incurred in connection with the transactions contemplated by this Agreement. No
Park Meridian Company has incurred or paid any Liability since March 31, 2001,
except for such Liabilities incurred or paid in the ordinary course of business
consistent with past business practices and which are not reasonably likely to
have, individually or in the aggregate, a Material Adverse Effect on Park
Meridian.
5.7 ABSENCE OF CERTAIN CHANGES OR EVENTS. Since March 31,
2001, except as disclosed in the Park Meridian Financial Statements delivered
prior to the date of this Agreement or as otherwise disclosed in the Park
Meridian Disclosure Memorandum, there have been no events, changes, or
occurrences which have had, or are reasonably likely to have, individually or in
the aggregate, a Material Adverse Effect on Park Meridian.
5.8 TAX MATTERS.
(a) Since December 31, 1994, all Tax Returns
required to be filed by or on behalf of any of the Park Meridian Companies have
been timely filed, or requests for extensions have been timely filed, granted,
and have not expired for periods ended on or before December 31, 2000, and all
Tax Returns filed are complete and accurate in all Material respects. All Tax
Returns for periods ending on or before the date of the most recent fiscal year
end immediately preceding the Effective Time will be timely filed or requests
for extensions will be timely filed. All Taxes shown on filed Tax Returns have
been paid. There is no audit examination, deficiency, or refund Litigation with
respect to any Taxes, that is reasonably likely to result in a determination
that would have, individually or in the aggregate, a Material Adverse
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16
Effect on Park Meridian, except to the extent reserved against in the Park
Meridian Financial Statements dated prior to the date of this Agreement. All
Taxes due with respect to completed and settled examinations or concluded
Litigation with respect to Taxes have been paid.
(b) None of the Park Meridian Companies has
executed an extension or waiver of any statute of limitations on the assessment
or collection of any Tax due (excluding such statutes that relate to years
currently under examination by the Internal Revenue Service or other applicable
taxing authorities) that is currently in effect.
(c) Adequate provision for any Material Taxes
due or to become due for any of the Park Meridian Companies for the period or
periods through and including the date of the respective Park Meridian Financial
Statements has been made in accordance with GAAP and is reflected on such Park
Meridian Financial Statements.
(d) Each of the Park Meridian Companies is in
Material compliance with, and its records contain the information and documents
(including properly completed IRS Forms W-9) necessary to comply with, in all
Material respects, applicable information reporting and Tax withholding
requirements under federal, state, and local Tax Laws, and such records identify
with specificity all accounts subject to backup withholding under Section 3406
of the Internal Revenue Code.
(e) None of the Park Meridian Companies has made
any payments, is obligated to make any payments, or is a party to any contract,
agreement, or other arrangement that could obligate it to make any payments that
would be disallowed as a deduction under Section 280G or 162(m) of the Internal
Revenue Code.
(f) There are no Material Liens with respect to
Taxes upon any of the Assets of the Park Meridian Companies.
(g) There has not been an ownership change, as
defined in Internal Revenue Code Section 382(g), of the Park Meridian Companies
that occurred during or after any Taxable Period in which the Park Meridian
Companies incurred a net operating loss that carries over to any Taxable Period
ending after December 31, 2000.
(h) After the date of this Agreement, no
Material election with respect to Taxes will be made without the prior consent
of Regions, which consent will not be unreasonably withheld.
(i) No Park Meridian Company has or has had a
permanent establishment in any foreign country, as defined in any applicable tax
treaty or convention between the United States and such foreign country.
(j) No Park Meridian Company has filed any
consent under Section 341(f) of the Internal Revenue Code concerning collapsible
corporations.
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5.9 ASSETS. The Park Meridian Companies have good and
marketable title, free and clear of all Liens, to all of their respective Assets
other than such defects and liens which are not reasonably likely to have a
Material Adverse Effect on Park Meridian. All tangible properties used in the
businesses of the Park Meridian Companies are in good condition, reasonable wear
and tear excepted, and are usable in the ordinary course of business consistent
with Park Meridian's past practices, except as would not be reasonably likely to
have a Material Adverse Effect on Park Meridian. All Assets which are Material
to Park Meridian's business on a consolidated basis, held under leases or
subleases by any of the Park Meridian Companies, are held under valid Contracts
enforceable in accordance with their respective terms (except as enforceability
may be limited by applicable bankruptcy, insolvency, reorganization, moratorium,
or other Laws affecting the enforcement of creditors' rights generally and
except that the availability of the equitable remedy of specific performance or
injunctive relief is subject to the discretion of the court before which any
proceedings may be brought), and each such Contract is in full force and effect.
The Park Meridian Companies currently maintain insurance in amounts, scope and
coverage reasonably necessary for their operations. None of the Park Meridian
Companies has received notice from any insurance carrier that (i) such insurance
will be canceled or that coverage thereunder will be Materially reduced or
eliminated, or (ii) premium costs with respect to such policies of insurance
will be substantially increased. The Assets of the Park Meridian Companies
include all Material Assets required to operate the business of the Park
Meridian Companies as presently conducted.
5.10 ENVIRONMENTAL MATTERS.
(a) Each Park Meridian Company, and to the
Knowledge of Park Meridian, its Participation Facilities and its Loan Properties
are, and have been, in compliance with all Environmental Laws, except those
instances of non-compliance which are not reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on Park Meridian.
(b) There is no Litigation pending or, to the
Knowledge of Park Meridian, threatened before any court, governmental agency, or
authority, or other forum in which any Park Meridian Company or any of its
Participation Facilities has been or, with respect to threatened Litigation, may
reasonably be expected to be named as a defendant (i) for alleged noncompliance
(including by any predecessor) with any Environmental Law or (ii) relating to
the release into the environment of any Hazardous Material, whether or not
occurring at, on, under, or involving a site owned, leased, or operated by any
Park Meridian Company or any of its Participation Facilities, except for such
Litigation pending or threatened that is not reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on Park Meridian.
(c) To the Knowledge of Park Meridian, there is
no Litigation pending, or , threatened before any court, governmental agency, or
board, or other forum in which any of its Loan Properties (or Park Meridian in
respect of such Loan Property) has been or, with respect to threatened
Litigation, may reasonably be expected to be named as a defendant or potentially
responsible party (i) for alleged noncompliance (including by any predecessor)
with any Environmental Law or (ii) relating to the release into the environment
of any Hazardous Material, whether or not occurring at, on, under, or involving
a Loan Property, except for such
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Litigation pending or threatened that is not reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on Park Meridian.
(d) To the Knowledge of Park Meridian, there is
no reasonable basis for any Litigation of a type described in subsections (b) or
(c), except such as is not reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on Park Meridian.
(e) To the Knowledge of Park Meridian, during
the period of (i) any Park Meridian Company's ownership or operation of any of
their respective current properties, (ii) any Park Meridian Company's
participation in the management of any Participation Facility, or (iii) any Park
Meridian Company's holding of a security interest in a Loan Property, there have
been no releases of Hazardous Material in, on, under, or affecting (or
potentially affecting) such properties, except such as are not reasonably likely
to have, individually or in the aggregate, a Material Adverse Effect on Park
Meridian. Prior to the period of (i) any Park Meridian Company's ownership or
operation of any of their respective current properties, (ii) any Park Meridian
Company's participation in the management of any Participation Facility, or
(iii) any Park Meridian Company's holding of a security interest in a Loan
Property, to the Knowledge of Park Meridian, there were no releases of Hazardous
Material in, on, under, or affecting any such property, Participation Facility,
or Loan Property, except such as are not reasonably likely to have, individually
or in the aggregate, a Material Adverse Effect on Park Meridian.
5.11 COMPLIANCE WITH LAWS. Park Meridian is duly
registered as a bank holding company under the BHC Act. Each Park Meridian
Company has in effect all Permits necessary for it to own, lease, or operate its
Material Assets and to carry on its business as now conducted, except for those
Permits the absence of which are not reasonably likely to have, individually or
in the aggregate, a Material Adverse Effect on Park Meridian, and there has
occurred no Default under any such Permit, other than Defaults which are not
reasonably likely to have, individually or in the aggregate, a Material Adverse
Effect on Park Meridian. None of the Park Meridian Companies:
(a) is in violation of any Material Laws,
Orders, or Permits applicable to its business or employees conducting
its business, except for violations which are not reasonably likely to
have, individually or in the aggregate, a Material Adverse Effect on
Park Meridian; and
(b) has received any written notification or
communication from any agency or department of federal, state, or local
government or any Regulatory Authority or the staff thereof (i)
asserting that any Park Meridian Company is not in compliance with any
of the Laws or Orders which such governmental authority or Regulatory
Authority enforces, where such noncompliance is reasonably likely to
have, individually or in the aggregate, a Material Adverse Effect on
Park Meridian, (ii) threatening to revoke any Permits, the revocation
of which is reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on Park Meridian, or (iii)
requiring any Park Meridian Company (x) to enter into or consent to the
issuance of a cease and desist order, formal agreement, directive,
commitment, or memorandum of understanding, or (y) to adopt any Board
resolution or similar undertaking, which restricts Materially the
conduct of its
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business, or in any Material manner relates to its capital adequacy,
its credit or reserve policies, its management, or the payment of
dividends.
5.12 LABOR RELATIONS. No Park Meridian Company is the
subject of any Litigation asserting that it or any other Park Meridian Company
has committed an unfair labor practice (within the meaning of the National Labor
Relations Act or comparable state Law) or seeking to compel it or any other Park
Meridian Company to bargain with any labor organization as to wages or
conditions of employment, nor is any Park Meridian Company a party to or bound
by any collective bargaining agreement, Contract, or other agreement or
understanding with a labor union or labor organization, nor is there any strike
or other labor dispute involving any Park Meridian Company, pending or, to the
Knowledge of Park Meridian, threatened, or to the Knowledge of Park Meridian, is
there any activity involving employees of any Park Meridian Company seeking to
certify a collective bargaining unit or engaging in any other organization
activity.
5.13 EMPLOYEE BENEFIT PLANS.
(a) Park Meridian has disclosed in Section 5.13
of the Park Meridian Disclosure Memorandum, and has delivered or made available
to Regions prior to the execution of this Agreement correct and complete copies
in each case of, all Park Meridian Benefit Plans. For purposes of this
Agreement, "Park Meridian Benefit Plans" means all Material written pension,
retirement, profit-sharing, deferred compensation, stock option, employee stock
ownership, severance pay, vacation, bonus, or other incentive plan, all other
Material written employee programs or agreements, all medical, vision, dental,
or other written health plans, all life insurance plans, and all other Material
written employee benefit plans or fringe benefit plans, including written
"employee benefit plans" as that term is defined in Section 3(3) of ERISA,
maintained by, sponsored in whole or in part by, or contributed to by, any Park
Meridian Company for the benefit of employees, retirees, dependents, spouses,
directors, independent contractors, or other beneficiaries and under which
employees, retirees, dependents, spouses, directors, independent contractors, or
other beneficiaries are eligible to participate. Any of the Park Meridian
Benefit Plans which is an "employee welfare benefit plan," as that term is
defined in Section 3(l) of ERISA, or an "employee pension benefit plan," as that
term is defined in Section 3(2) of ERISA, is referred to herein as a "Park
Meridian ERISA Plan." Any Park Meridian ERISA Plan which is also subject to
Section 412 of the Internal Revenue Code or Section 302 of ERISA, is referred to
herein as a "Park Meridian Pension Plan." Neither Park Meridian nor any Park
Meridian Company has an "obligation to contribute" (as defined in ERISA Section
4212) to a "multiemployer plan" (as defined in ERISA Sections 4001(a)(3) and
3(37)(A)). Each "employee pension benefit plan," as defined in Section 3(2) of
ERISA, ever maintained by any Park Meridian Company, that was intended to
qualify under Section 401(a) of the Internal Revenue Code is disclosed as such
in Section 5.13 of the Park Meridian Disclosure Memorandum.
(b) Park Meridian has delivered or made
available to Regions prior to the execution of this Agreement correct and
complete copies of the following documents: (i) all trust agreements or other
funding arrangements for such Park Meridian Benefit Plans (including insurance
contracts), and all amendments thereto, (ii) with respect to any such Park
Meridian Benefit Plans or
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amendments, the most recent determination letters, and all Material rulings,
Material opinion letters, Material information letters, or Material advisory
opinions issued by the Internal Revenue Service, the United States Department of
Labor, or the Pension Benefit Guaranty Corporation after December 31, 1994,
(iii) annual reports or returns, audited or unaudited financial statements,
actuarial valuations and reports, and summary annual reports prepared for any
Park Meridian Benefit Plan with respect to the most recent plan year and (iv)
the most recent summary plan descriptions and any Material modifications
thereto.
(c) All Park Meridian Benefit Plans are in
compliance with the applicable terms of ERISA, the Internal Revenue Code, and
any other applicable Laws, other than instances of noncompliance which are not
reasonably likely to have, individually or in the aggregate, a Material Adverse
Effect on Park Meridian. Each Park Meridian ERISA Plan which is intended to be
qualified under Section 401(a) of the Internal Revenue Code has received a
favorable determination letter from the Internal Revenue Service, and to the
Knowledge of Park Meridian, there are no circumstances likely to result in
revocation of any such favorable determination letter. Each trust created under
any Park Meridian ERISA Plan has been determined to be exempt from Tax under
Section 501(a) of the Internal Revenue Code and Park Meridian is not aware of
any circumstance which will or could reasonably result in revocation of such
exemption. With respect to each Park Meridian Benefit Plan to the Knowledge of
Park Meridian, no event has occurred which will or could reasonably give rise to
a loss of any intended Tax consequences under the Internal Revenue Code or to
any Tax under Section 511 of the Internal Revenue Code that is reasonably
likely, individually or in the aggregate, to have a Material Adverse Effect on
Park Meridian. There is no Material pending or, to the Knowledge of Park
Meridian, threatened Litigation relating to any Park Meridian ERISA Plan.
(d) No Park Meridian Company has engaged in a
transaction with respect to any Park Meridian Benefit Plan that, assuming the
Taxable Period of such transaction expired as of the date of this Agreement,
would subject any Park Meridian Company to a Material tax or penalty imposed by
either Section 4975 of the Internal Revenue Code or Section 502(i) of ERISA in
amounts which are reasonably likely to have, individually or in the aggregate, a
Material Adverse Effect on Park Meridian. Neither Park Meridian nor, any
administrator or fiduciary of any Park Meridian Benefit Plan (or any agent of
any of the foregoing) has engaged in any transaction, or acted or failed to act
in any manner with respect to any Park Meridian Benefit Plan which could subject
Park Meridian to any direct or indirect Liability (by indemnity or otherwise)
for breach of any fiduciary, co-fiduciary, or other duty under ERISA, where such
Liability, individually or in the aggregate, is reasonably likely to have a
Material Adverse Effect on Park Meridian. No oral or written representation or
communication with respect to any aspect of the Park Meridian Benefit Plans has
been made to employees of any Park Meridian Company which is not in conformity
with the written or otherwise preexisting terms and provisions of such plans,
where any Liability resulting from such non-conformity is reasonably likely to
have a Material Adverse Effect on Park Meridian.
(e) No Park Meridian Pension Plan has any
"unfunded current liability," as that term is defined in Section 302(d)(8)(A) of
ERISA, and the fair market value of the Assets of any such plan is equal to or
exceeds the actuarial present value of all accrued benefits under such plans
(whether vested or not), based upon the actuarial assumptions used to
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prepare the most recent actuarial reports for such plans and to the Knowledge of
Park Meridian, since the date of the most recent actuarial valuation, no event
has occurred which would be reasonably expected to change any such funded status
in a way that is reasonably likely to have, individually or in the aggregate, a
Material Adverse Effect on Park Meridian. Neither any Park Meridian Pension Plan
nor any "single-employer plan," within the meaning of Section 4001(a)(15) of
ERISA, currently maintained by any Park Meridian Company, or the single-employer
plan of any entity which is considered one employer with Park Meridian under
Section 4001 of ERISA or Section 414 of the Internal Revenue Code or Section 302
of ERISA (whether or not waived) (a "Park Meridian ERISA Affiliate") has an
"accumulated funding deficiency" within the meaning of Section 412 of the
Internal Revenue Code or Section 302 of ERISA. All required contributions with
respect to any Park Meridian Pension Plan or any single-employer plan of an Park
Meridian ERISA Affiliate have been timely made and there is no lien either
existing or expected under Internal Revenue Code Section 412(n) or ERISA Section
302(f) or Tax under Internal Revenue Code Section 4971. No Park Meridian Company
has provided, or is required to provide, security to an Park Meridian Pension
Plan or to any single-employer plan of an Park Meridian ERISA Affiliate pursuant
to Section 401(a)(29) of the Internal Revenue Code. All premiums required to be
paid by Park Meridian under ERISA Section 4006 have been timely paid by Park
Meridian, except to the extent any failure to timely pay would not have a
Material Adverse Effect on Park Meridian.
(f) No Liability under Title IV of ERISA has
been or is expected to be incurred by any Park Meridian Company with respect to
any defined benefit plan currently or formerly maintained by any of them or by
any Park Meridian ERISA Affiliate that has not been satisfied in full (other
than Liability for Pension Benefit Guaranty Corporation premiums, which have
been paid when due, except for Liabilities that, individually or in the
aggregate, would not reasonably be expected to have a Material Adverse Effect on
Park Meridian).
(g) No Park Meridian Company has any obligations
for retiree health and retiree life benefits under any of the Park Meridian
Benefit Plans other than with respect to benefit coverage mandated by applicable
Law.
(h) Neither the execution and delivery of this
Agreement nor the consummation of the transactions contemplated hereby will, by
themselves, (i) result in any payment (including, without limitation, severance,
golden parachute, or other payment) becoming due to any director or any employee
of any Park Meridian Company from any Park Meridian Company under any Park
Meridian Benefit Plan or otherwise, other than by operation of Law, (ii)
increase any benefits otherwise payable under any Park Meridian Benefit Plan, or
(iii) result in any acceleration of the time of payment or vesting of any such
benefit.
5.14 MATERIAL CONTRACTS. Except for Contracts filed as
exhibits to Park Meridian's Form 10-K for the fiscal year ended December 31,
2000, and as exhibits to Form 10-Q for the period ended March 31, 2001, as of
the date of this Agreement, none of the Park Meridian Companies, nor any of
their respective Assets, businesses, or operations, is a party to, or is bound
or affected by, or receives benefits under, (i) any employment, severance,
termination, consulting, or retirement Contract providing for aggregate payments
to any Person in any calendar year in excess of $75,000, (ii) any Contract
relating to the borrowing of money
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by any Park Meridian Company or the guarantee by any Park Meridian Company of
any such obligation (other than Contracts pertaining to fully-secured repurchase
agreements, and trade payables, and Contracts relating to borrowings or
guarantees made in the ordinary course of business), and (iii) any other
Contract or amendment thereto that would be required to be filed as an exhibit
to a Form 10-K filed by Park Meridian with the SEC that has not been filed as an
exhibit to Park Meridian's Form 10-K filed for the fiscal year ended December
31, 2000 or on another SEC Document and identified to Regions (together with all
Contracts referred to in Sections 5.9 and 5.13 (a) of this Agreement, the "Park
Meridian Contracts"). With respect to each Park Meridian Contract: (i) the
Contract is in full force and effect; (ii) no Park Meridian Company is in
Default thereunder, other than Defaults which are not reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on Park Meridian;
(iii) no Park Meridian Company has repudiated or waived any Material provision
of any such Contract; and (iv) no other party to any such Contract is, to the
Knowledge of Park Meridian, in Default in any Material respect, other than
Defaults which are not reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on Park Meridian. All of the indebtedness
of any Park Meridian Company for money borrowed is prepayable at any time by
such Park Meridian Company without penalty or premium.
5.15 LEGAL PROCEEDINGS.
(a) There is no Litigation instituted or
pending, or, to the Knowledge of Park Meridian, threatened against any Park
Meridian Company, or against any Asset, interest, or right of any of them, that
is reasonably likely to have, individually or in the aggregate, a Material
Adverse Effect on Park Meridian, nor are there any Orders of any Regulatory
Authorities, other governmental authorities, or arbitrators outstanding against
any Park Meridian Company, that are reasonably likely to have, individually or
in the aggregate, a Material Adverse Effect on Park Meridian.
(b) Section 5.15(b) of the Park Meridian
Disclosure Memorandum includes a summary report of all Litigation as of the date
of this Agreement to which any Park Meridian Company is a party and which names
a Park Meridian Company as a defendant or cross-defendant.
5.16 REPORTS. Since December 31, 1996, or the date of
organization if later, each Park Meridian Company has timely filed all reports
and statements, together with any amendments required to be made with respect
thereto, that it was required to file with any Regulatory Authorities, except
failures to file which are not reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on Park Meridian.
5.17 STATEMENTS TRUE AND CORRECT. None of the information
supplied or to be supplied by any Park Meridian Company or any Affiliate thereof
regarding Park Meridian or such Affiliate for inclusion in the Registration
Statement to be filed by Regions with the SEC will, when the Registration
Statement becomes effective, contain any untrue statement of a Material fact, or
omit to state any Material fact required to be stated thereunder or necessary to
make the statements therein, in light of the circumstances under which they were
made, not misleading. None of the information supplied or to be supplied by any
Park Meridian Company
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23
or any Affiliate thereof for inclusion in the Proxy Statement to be mailed to
Park Meridian's stockholders in connection with the Stockholders' Meeting will,
when first mailed to the stockholders of Park Meridian, contain any misstatement
of Material fact, or omit to state any Material fact required to be stated
thereunder or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading, or, in the case of the
Proxy Statement or any amendment thereof or supplement thereto, at the time of
the Stockholders' Meeting, omit to state any Material fact required to be stated
thereunder or necessary to correct any Material statement in any earlier
communication with respect to the solicitation of any proxy for the
Stockholders' Meeting. All documents that any Park Meridian Company or any
Affiliate thereof is responsible for filing with any Regulatory Authority in
connection with the transactions contemplated hereby will comply as to form in
all Material respects with the provisions of applicable Law.
5.18 TAX AND REGULATORY MATTERS. No Park Meridian Company
or any Affiliate thereof has taken or agreed to take any action, and Park
Meridian has no Knowledge of any fact or circumstance that is reasonably likely
to (i) prevent the Merger from qualifying as a reorganization within the meaning
of Section 368(a) of the Internal Revenue Code, or (ii) Materially impede or
delay receipt of any Consents of Regulatory Authorities referred to in Section
9.1(b) of this Agreement. To the Knowledge of Park Meridian there exists no
fact, circumstance, or reason why the requisite Consents referred to in Section
9.1(b) of this Agreement cannot be received in a timely manner.
5.19 INTELLECTUAL PROPERTY. All of the Intellectual
Property rights of Park Meridian and the Park Meridian Subsidiaries are in full
force and effect and, to the extent Park Meridian or any of the Park Meridian
Subsidiaries license the right to use such Intellectual Property, such licenses
constitute legal, valid, and binding obligations of the respective parties
thereto, and there have not been, and, to the Knowledge of Park Meridian, there
currently are not, any Defaults thereunder by Park Meridian or a Park Meridian
Subsidiary. Park Meridian or a Park Meridian Subsidiary owns or is the valid
licensee of all such Intellectual Property rights free and clear of all Liens or
claims of infringement, except for such Liens or claims of infringement which
would not reasonably be expected to have a Material Adverse Effect on Park
Meridian. Neither Park Meridian nor any of the Park Meridian Subsidiaries nor,
to the Knowledge of Park Meridian, their respective predecessors has infringed
the Intellectual Property rights of others and, to the Knowledge of Park
Meridian, none of the Intellectual Property rights as used in the business
conducted by Park Meridian or the Park Meridian Subsidiaries infringes upon or
otherwise violates the rights of any Person, nor has any Person asserted a claim
of such infringement, in each case, except as would not reasonably be expected
to have a Material Adverse Effect on Park Meridian. Neither Park Meridian nor
any of the Park Meridian Subsidiaries is obligated to pay any royalties to any
Person with respect to any such Intellectual Property other than in the ordinary
course of business. Park Meridian or a Park Meridian Subsidiary owns or has the
valid right to use all of the Intellectual Property rights which it is presently
using, or in connection with performance of any Material Contract to which it is
a party. No officer, director, or employee of Park Meridian or the Park Meridian
Subsidiaries is party to any Contract which requires such officer, director, or
employee to assign any interest in any Intellectual Property or keep
confidential any trade secrets, proprietary data, customer information, or other
business information or which restricts or prohibits such officer,
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24
director, or employee from engaging in activities competitive with any Person,
in each case, other than with Park Meridian or any of the Park Meridian
Subsidiaries.
5.20 STATE TAKEOVER LAWS. Subject to Park Meridian's right
to withdraw or alter its recommendation in accordance with the proviso set forth
in the fourth sentence of Section 8.1 of this Agreement, each Park Meridian
Company has taken all necessary action to exempt the transactions contemplated
by this Agreement from any applicable "moratorium," "control share," "fair
price," "business combination," or other anti-takeover laws and regulations of
the State of North Carolina (collectively, "Takeover Laws") including the
relevant provisions of Article 9A of the NCBCA.
5.21 CHARTER PROVISIONS. Each Park Meridian Company has
taken all action so that the entering into of this Agreement and the
consummation of the Merger and the other transactions contemplated by this
Agreement do not and will not result in the grant of any rights to any Person
under the Articles of Incorporation or Bylaws or, subject to Park Meridian's
right to withdraw or alter its recommendation in accordance with the proviso set
forth in the fourth sentence of Section 8.1 of this Agreement, restrict or
impair the ability of Regions to vote, or otherwise to exercise the rights of a
stockholder with respect to, shares of any Park Meridian Company that may be
directly or indirectly acquired or controlled by it.
5.22 SUPPORT AGREEMENTS. Each of the directors of Park
Meridian has executed and delivered to Regions a Support Agreement in
substantially the form attached as Exhibit 1 to this Agreement.
5.23 DERIVATIVES. All interest rate swaps, caps, floors,
option agreements, futures and forward contracts, and other similar risk
management arrangements, whether entered into for Park Meridian's own account,
or for the account of one or more the Park Meridian Subsidiaries or their
customers, were entered into (i) in accordance with prudent business practices
and all applicable Laws, and (ii) with counterparties believed to be financially
responsible.
ARTICLE 6
REPRESENTATIONS AND WARRANTIES OF REGIONS
Regions hereby represents and warrants to Park Meridian as
follows:
6.1 ORGANIZATION, STANDING, AND POWER. Regions is a
corporation duly organized, validly existing, and in good standing under the
Laws of the State of Delaware, and has the corporate power and authority to
carry on its business as now conducted and to own, lease, and operate its
Material Assets. Regions is duly qualified or licensed to transact business as a
foreign corporation in good standing in the States of the United States and
foreign jurisdictions where the character of its Assets or the nature or conduct
of its business requires it to be so qualified or licensed, except for such
jurisdictions in which the failure to be so qualified or licensed is not
reasonably likely to have, individually or in the aggregate, a Material Adverse
Effect on Regions.
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6.2 AUTHORITY; NO BREACH OF AGREEMENT.
(a) Regions has the corporate power and
authority necessary to execute, deliver, and perform its obligations under this
Agreement and to consummate the transactions contemplated hereby. The execution,
delivery, and performance of this Agreement and the consummation of the
transactions contemplated herein, including the Merger, have been duly and
validly authorized by all necessary corporate action in respect thereof on the
part of Regions. This Agreement (which for this purpose only does not include
the Stock Option Agreement) represents a legal, valid, and binding obligation of
Regions, enforceable against Regions in accordance with its terms (except in all
cases as such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, receivership, conservatorship, moratorium, or
similar Laws affecting the enforcement of creditors' rights generally and except
that the availability of the equitable remedy of specific performance or
injunctive relief is subject to the discretion of the court before which any
proceeding may be brought).
(b) Neither the execution and delivery of this
Agreement by Regions, nor the consummation by Regions of the transactions
contemplated hereby, nor compliance by Regions with any of the provisions
hereof, will (i) conflict with or result in a breach of any provision of
Regions' Certificate of Incorporation or Bylaws, (ii) constitute or result in a
Default under, or require any Consent pursuant to, or result in the creation of
any Lien on any Asset of any Regions Company under, any Contract or Permit of
any Regions Company, where such Default or Lien, or any failure to obtain such
Consent, is reasonably likely to have, individually or in the aggregate, a
Material Adverse Effect on Regions, or (iii) subject to receipt of the requisite
Consents referred to in Section 9.1(b) of this Agreement, violate any Law or
Order applicable to any Regions Company or any of their respective Material
Assets.
(c) Other than in connection or compliance with
the provisions of the Securities Laws, applicable state corporate and securities
Laws, and rules of the NASD, and other than Consents required from Regulatory
Authorities, and other than notices to or filings with the Internal Revenue
Service or the Pension Benefit Guaranty Corporation with respect to any employee
benefit plans, or under the HSR Act, and other than Consents, filings, or
notifications which, if not obtained or made, are not reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on Regions, no
notice to, filing with, or Consent of, any public body or authority is necessary
for the consummation by Regions of the Merger and the other transactions
contemplated in this Agreement.
6.3 CAPITAL STOCK. The authorized capital stock of
Regions consists, as of the date of this Agreement, of 500,000,000 shares of
Regions Common Stock, of which 227, 501,610 shares were issued and outstanding
as of April 30, 2001. All of the issued and outstanding shares of Regions Common
Stock are, and all of the shares of Regions Common Stock to be issued in
exchange for shares of Park Meridian Common Stock upon consummation of the
Merger, when issued in accordance with the terms of this Agreement, will be,
duly and validly issued and outstanding and fully paid and, except as expressly
provided otherwise under applicable Law, nonassessable under the DGCL. None of
the outstanding shares of Regions Common Stock has been, and none of the shares
of Regions Common Stock to be issued in
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exchange for shares of Park Meridian Common Stock upon consummation of the
Merger will be, issued in violation of any preemptive rights of the current or
past stockholders of Regions.
6.4 REGIONS SUBSIDIARIES. Regions or one of its
Subsidiaries owns all of the issued and outstanding shares of capital stock of
each Regions Subsidiary. No equity securities of any Regions Subsidiary are or
may become required to be issued (other than to another Regions Company) by
reason of any Rights, and there are no Contracts by which any Regions Subsidiary
is bound to issue (other than to another Regions Company) additional shares of
its capital stock or Rights or by which any Regions Company is or may be bound
to transfer any shares of the capital stock of any Regions Subsidiary (other
than to another Regions Company). There are no Contracts relating to the rights
of any Regions Company to vote or to dispose of any shares of the capital stock
of any Regions Subsidiary. All of the shares of capital stock of each Regions
Subsidiary held by a Regions Company are fully paid and, except as expressly
provided otherwise under applicable Law, nonassessable under the applicable
corporate or banking Law of the jurisdiction in which such Subsidiary is
incorporated or organized and are owned by the Regions Company free and clear of
any Lien. Each Regions Subsidiary is either a bank or a corporation, and is duly
organized, validly existing, and (as to corporations) in good standing under the
Laws of the jurisdiction in which it is incorporated or organized, and has the
corporate power and authority necessary for it to own, lease, and operate its
Assets and to carry on its business as now conducted. Each Regions Subsidiary is
duly qualified or licensed to transact business as a foreign corporation in good
standing in the States of the United States and foreign jurisdictions where the
character of its Assets or the nature or conduct of its business requires it to
be so qualified or licensed, except for such jurisdictions in which the failure
to be so qualified or licensed is not reasonably likely to have, individually or
in the aggregate, a Material Adverse Effect on Regions. Each Regions Subsidiary
that is a depository institution is an "insured depository institution" as
defined in the Federal Deposit Insurance Act and applicable regulations
thereunder, and the deposits in which are insured by the Bank Insurance Fund or
Savings Association Insurance Fund to the fullest extent permitted by Law.
6.5 SEC FILINGS; FINANCIAL STATEMENTS.
(a) Regions has filed and made available to Park
Meridian all forms, reports, and documents required to be filed by Regions with
the SEC since January 1 of the second complete fiscal year preceding the date of
this Agreement (collectively, the "Regions SEC Reports"). The Regions SEC
Reports (i) at the time filed, complied in all Material respects with the
applicable requirements of the 1933 Act and the 1934 Act, as the case may be,
and (ii) did not at the time they were filed (or if amended or superseded by a
filing prior to the date of this Agreement, then on the date of such filing)
contain any untrue statement of a Material fact or omit to state a Material fact
required to be stated in such Regions SEC Reports or necessary in order to make
the statements in such Regions SEC Reports, in light of the circumstances under
which they were made, not misleading. Except for Regions Subsidiaries that are
registered as a broker, dealer, or investment adviser or filings required due to
fiduciary holdings of the Regions Subsidiaries, none of Regions Subsidiaries is
required to file any forms, reports, or other documents with the SEC.
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(b) Each of the Regions Financial Statements
(including, in each case, any related notes) contained in the Regions SEC
Reports, including any Regions SEC Reports filed after the date of this
Agreement until the Effective Time, complied or will comply as to form in all
Material respects with the applicable published rules and regulations of the SEC
with respect thereto, was or will be prepared in accordance with GAAP applied on
a consistent basis throughout the periods involved (except as may be indicated
in the notes to such financial statements or, in the case of unaudited
statements, as permitted by Form 10-Q of the SEC), and fairly presented or will
fairly present the consolidated financial position of Regions and its
Subsidiaries as at the respective dates and the consolidated results of its
operations and cash flows for the periods indicated, except that the unaudited
interim financial statements were or are subject to normal and recurring
year-end adjustments which were not or are not expected to be Material in amount
or effect.
6.6 ABSENCE OF UNDISCLOSED LIABILITIES. No Regions
Company has any Liabilities that are reasonably likely to have, individually or
in the aggregate, a Material Adverse Effect on Regions, except Liabilities which
are accrued or reserved against in the consolidated balance sheets of Regions as
of March 31, 2001, included in the Regions Financial Statements or reflected in
the notes thereto, Liabilities incurred in the ordinary course of business
subsequent to March 31, 2001, and Liabilities to be incurred in connection with
the transactions contemplated by the Agreement. No Regions Company has incurred
or paid any Liability since March 31, 2001, except for such Liabilities incurred
or paid in the ordinary course of business consistent with past business
practice and which are not reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on Regions.
6.7 ABSENCE OF CERTAIN CHANGES OR EVENTS. Since March 31,
2001, except as disclosed in the Regions Financial Statements delivered prior to
the date of this Agreement, there have been no events, changes or occurrences
which have had, or are reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on Regions.
6.8 COMPLIANCE WITH LAWS. Regions is duly registered as a
financial holding company under the BHC Act. Each Regions Company has in effect
all Permits necessary for it to own, lease, or operate its Material Assets and
to carry on its business as now conducted, except for those Permits the absence
of which are not reasonably likely to have, individually or in the aggregate, a
Material Adverse Effect on Regions, and there has occurred no Default under any
such Permit, other than Defaults which are not reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on Regions. None of
the Regions Companies:
(a) is in violation of any Laws, Orders, or
Permits applicable to its business or employees conducting its
business, except for violations which are not reasonably likely to
have, individually or in the aggregate, a Material Adverse Effect on
Regions; and
(b) has received any notification or
communication from any agency or department of federal, state, or local
government or any Regulatory Authority or the staff thereof (i)
asserting that any Regions Company is not in compliance with any of the
Laws or Orders which such governmental authority or Regulatory
Authority enforces,
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where such noncompliance is reasonably likely to have, individually or
in the aggregate, a Material Adverse Effect on Regions, (ii)
threatening to revoke any Permits, the revocation of which is
reasonably likely to have, individually or in the aggregate, a Material
Adverse Effect on Regions, or (iii) requiring any Regions Company (x)
to enter into or consent to the issuance of a cease and desist order,
formal agreement, directive, commitment, or memorandum of
understanding, or (y) to adopt any Board resolution or similar
undertaking, which restricts Materially the conduct of its business, or
in any manner relates to its capital adequacy, its credit or reserve
policies, its management, or the payment of dividends.
6.9 LEGAL PROCEEDINGS. There is no Litigation instituted
or pending, or, to the Knowledge of Regions, threatened against any Regions
Company, or against any Asset, employee benefit plan, interest, or right of any
of them, that is reasonably likely to have, individually or in the aggregate, a
Material Adverse Effect on Regions, nor are there any Orders of any Regulatory
Authorities, other governmental authorities, or arbitrators outstanding against
any Regions Company, that are reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on Regions.
6.10 REPORTS. Since December 31, 1996, or the date of
organization if later, each Regions Company has timely filed all reports and
statements, together with any amendments required to be made with respect
thereto, that it was required to file with any Regulatory Authorities, except
failures to file which are not reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on Regions. As of their respective dates,
each of such reports and documents, including the financial statements,
exhibits, and schedules thereto, complied in all Material respects with all
applicable Laws.
6.11 STATEMENTS TRUE AND CORRECT. None of the information
supplied or to be supplied by any Regions Company or any Affiliate thereof
regarding Regions or such Affiliate for inclusion in the Registration Statement
to be filed by Regions with the SEC will, when the Registration Statement
becomes effective, contain any untrue statement of a Material fact, or omit to
state any Material fact required to be stated thereunder or necessary to make
the statements therein not misleading. None of the information supplied or to be
supplied by any Regions Company or any Affiliate thereof for inclusion in the
Proxy Statement to be mailed to Park Meridian's stockholders in connection with
the Stockholders' Meeting, will, when first mailed to the stockholders of Park
Meridian, contain any misstatement of Material fact, or omit to state any
Material fact required to be stated thereunder or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading, or, in the case of the Proxy Statement or any amendment thereof
or supplement thereto, at the time of the Stockholders' Meeting, omit to state
any Material fact required to be stated thereunder or necessary to correct any
Material statement in any earlier communication with respect to the solicitation
of any proxy for the Stockholders' Meeting. All documents that any Regions
Company or any Affiliate thereof is responsible for filing with any Regulatory
Authority in connection with the transactions contemplated hereby will comply as
to form in all Material respects with the provisions of applicable Law.
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6.12 TAX AND REGULATORY MATTERS. No Regions Company or any
Affiliate thereof has taken or agreed to take any action, and Regions has no
Knowledge of any fact or circumstance that is reasonably likely to (i) prevent
the Merger from qualifying as a reorganization within the meaning of Section
368(a) of the Internal Revenue Code, or (ii) Materially impede or delay receipt
of any Consents of Regulatory Authorities referred to in Section 9.1(b) of this
Agreement. To the Knowledge of Regions there exists no fact, circumstance, or
reason why the requisite Consents referred to in Section 9.1(b) of this
Agreement cannot be received in a timely manner.
6.13 DERIVATIVES. All interest rate swaps, caps, floors, option
agreements, futures and forward contracts, and other similar risk management
arrangements, whether entered into for Regions' own account, or for the account
of one or more of the Regions Subsidiaries or their customers, were entered into
(i) in accordance with prudent business practices and all applicable Laws, and
(ii) with counterparties believed to be financially responsible.
ARTICLE 7
CONDUCT OF BUSINESS PENDING CONSUMMATION
7.1 AFFIRMATIVE COVENANTS OF BOTH PARTIES. Unless the
prior written consent of the other Party shall have been obtained, and except as
otherwise expressly contemplated herein, each Party shall and shall cause each
of its Subsidiaries to (i) operate its business only in the usual, regular, and
ordinary course, (ii) use its reasonable efforts to preserve intact its business
organization and Assets and maintain its rights and franchises, (iii) use its
reasonable efforts to maintain its current employee relationships, and (iv)
except as may be required by Law, take no action which would (a) adversely
affect the ability of any Party to obtain any Consents required for the
transactions contemplated hereby, or (b) adversely affect the ability of any
Party to perform its covenants and agreements under this Agreement; provided,
that the foregoing shall not prevent any Regions Company from discontinuing or
disposing of any of its Assets or business, or from acquiring or agreeing to
acquire any other Person or any Assets thereof, if such action is, in the
reasonable good faith judgment of Regions, desirable in the conduct of the
business of Regions and its Subsidiaries.
7.2 NEGATIVE COVENANTS OF PARK MERIDIAN. From the date of
this Agreement until the earlier of the Effective Time or the termination of
this Agreement, except as specifically contemplated by this Agreement, Park
Meridian covenants and agrees that it will not do or agree or commit to do, or
permit any of its Subsidiaries to do or agree or commit to do, any of the
following without the prior written consent of Regions, which consent shall not
be unreasonably withheld:
(a) amend the Articles of Incorporation, Bylaws,
or other governing instruments of any Park Meridian Company; or
(b) incur, guarantee, or otherwise become
responsible for, any additional debt obligation or other obligation for
borrowed money (other than indebtedness of a Park Meridian Company to
another Park Meridian Company) in excess
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of an aggregate of $500,000 (for the Park Meridian Companies on a
consolidated basis), except in the ordinary course of business
consistent with past practices (which shall include entry into
repurchase agreements or other fully secured securities), or impose, or
suffer the imposition, on any Asset of any Park Meridian Company of any
Material Lien, except in the ordinary course of business consistent
with past practices; or
(c) except as contemplated by Section 7.1 of
this Agreement, repurchase, redeem, or otherwise acquire or exchange
(other than exchanges in the ordinary course under employee benefit
plans), directly or indirectly, any shares, or any securities
convertible into any shares, of the capital stock of any Park Meridian
Company, or declare or pay any dividend or make any other distribution
in respect of Park Meridian's capital stock; provided that Park
Meridian may (to the extent legally able to do so), but shall not be
obligated to declare and pay regular quarterly cash dividends on the
Park Meridian Common Stock in an amount per share and with the usual
and regular record and payment dates as disclosed in Section 7.2(c) of
the Park Meridian Disclosure Memorandum, and provided, that,
notwithstanding the provisions of Section 1.3 of this Agreement, the
Parties shall cooperate in selecting the Effective Time to ensure that,
with respect to the quarterly period in which the Effective Time
occurs, the holders of Park Meridian Common Stock do not become
entitled to receive both a dividend in respect of their Park Meridian
Common Stock and a dividend in respect of their Regions Common Stock or
fail to be entitled to receive any dividends; or
(d) except for this Agreement or pursuant to the
exercise of Rights outstanding as of the date of this Agreement and
pursuant to the terms thereof in existence on the date of this
Agreement, (i) issue, sell, pledge, encumber, authorize the issuance
of, (ii) enter into any Contract to issue, sell, pledge, encumber, or
authorize the issuance of, or (iii) otherwise permit to become
outstanding, any additional shares of Park Meridian Common Stock or any
capital stock of any Park Meridian Company, or any stock appreciation
rights, or any option, warrant, conversion, or other right to acquire
any such stock, or any security convertible into any such stock; or
(e) adjust, split, combine, or reclassify any
capital stock of any Park Meridian Company or issue or authorize the
issuance of any other securities in respect of or in substitution for
shares of Park Meridian Common Stock (other than upon the exercise of
existing Rights), or sell, lease, mortgage, or otherwise dispose of or
otherwise encumber (i) any shares of capital stock of any Park Meridian
Subsidiary (unless any such shares of stock are sold or otherwise
transferred to another Park Meridian Company), or (ii) any Asset other
than in the ordinary course of business for reasonable and adequate
consideration and other than dispositions in the ordinary course of
business consistent with past practice; or
(f) (i) grant any increase in compensation or
benefits to the employees, officers, or directors of any Park Meridian
Company, except as required by Law, (ii) pay any severance or
termination pay or any bonus other than pursuant to written policies or
written Contracts in effect on the date of this Agreement, (iii) enter
into or amend any severance agreements with officers of any Park
Meridian Company;
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(iv) grant any increase in fees or other increases in compensation or
other benefits to directors of any Park Meridian Company; or (v)
voluntarily accelerate the vesting of any stock options or other
stock-based compensation or employee benefits; or
(g) enter into or amend any employment Contract
between any Park Meridian Company and any Person (unless such amendment
is required by Law) that the Park Meridian Company does not have the
unconditional right to terminate without Liability (other than
Liability for services already rendered and in accordance with the Park
Meridian Benefit Plans), at any time on or after the Effective Time; or
(h) adopt any new employee benefit plan of any
Park Meridian Company or make any Material change in or to any existing
employee benefit plans of any Park Meridian Company other than any such
change that is required by Law or that, in the opinion of counsel, is
necessary or advisable to maintain the tax qualified status of any such
plan; or
(i) make any significant change in any Tax or
accounting methods, Material elections, or systems of internal
accounting controls, except as may be appropriate to conform to changes
in Tax Laws or regulatory accounting requirements or GAAP; or
(j) commence any Litigation other than as deemed
necessary or advisable in the good faith judgment of management for the
prudent operation of its business or settle any Litigation involving
any Liability of any Park Meridian Company for Material money damages
or Material restrictions upon the operations of any Park Meridian
Company; or
(k) except in the ordinary course of business,
modify, amend, or terminate any Material Contract or waive, release,
compromise, or assign any Material rights or claims.
7.3 ADVERSE CHANGES IN CONDITION. Each Party agrees to
give written notice promptly to the other Party upon becoming aware of the
occurrence or impending occurrence of any event or circumstance relating to it
or any of its Subsidiaries which (i) is reasonably likely to have, individually
or in the aggregate, a Material Adverse Effect on it, or (ii) would cause or
constitute a Material breach of any of its representations, warranties, or
covenants contained herein, and to use its reasonable efforts to prevent or
promptly to remedy the same.
7.4 REPORTS. Each Party and its Subsidiaries shall file
all reports required to be filed by it with Regulatory Authorities between the
date of this Agreement and the Effective Time and shall deliver to the other
Party copies of all such reports promptly after the same are filed.
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ARTICLE 8
ADDITIONAL AGREEMENTS
8.1 REGISTRATION STATEMENT; PROXY STATEMENT; STOCKHOLDER
APPROVAL. As soon as reasonably practicable after execution of this Agreement,
Regions shall file the Registration Statement with the SEC, and shall use its
reasonable efforts to cause the Registration Statement to become effective under
the 1933 Act and take any action required to be taken under the applicable state
Blue Sky or securities Laws in connection with the issuance of the shares of
Regions Common Stock upon consummation of the Merger. Park Meridian shall
furnish all information concerning it and the holders of its capital stock as
Regions may reasonably request for inclusion in the Registration Statement. Park
Meridian shall call a Stockholders' Meeting, to be held as soon as reasonably
practicable after the Registration Statement is declared effective by the SEC,
for the purpose of voting upon approval of this Agreement and such other related
matters as it deems appropriate. In connection with the Stockholders' Meeting,
(i) Park Meridian shall prepare and file with the SEC a Proxy Statement and mail
such Proxy Statement to its stockholders, (ii) each Party shall furnish to the
other all information concerning them that such other Party may reasonably
request in connection with such Proxy Statement, (iii) the Board of Directors of
Park Meridian shall recommend to its stockholders the approval of the matters
submitted for approval, and (iv) the Board of Directors of Park Meridian shall
use its reasonable efforts to obtain such stockholders' approval, provided that
Park Meridian may withdraw, modify, or change in an adverse manner to Regions
its recommendations if the Board of Directors of Park Meridian, after having
consulted with and based upon the advice of outside counsel, determines in good
faith that the failure to so withdraw, modify, or change its recommendation
could reasonably constitute a breach of the fiduciary duties of Park Meridian's
Board of Directors under applicable Law. In addition, nothing in this Section
8.1 or elsewhere in this Agreement shall prohibit accurate disclosure by Park
Meridian of information that is required to be disclosed in the Registration
Statement or the Proxy Statement or in any other document required to be filed
with the SEC (including, without limitation, a Solicitation/Recommendation
Statement on Schedule 14D-9) or otherwise required to be publicly disclosed by
applicable Law or regulations or rules of the NASD.
8.2 APPLICATIONS. As soon as reasonably practicable after
the execution of this Agreement, Regions shall prepare and file, and Park
Meridian shall cooperate in the preparation and, where appropriate, filing of,
applications with all Regulatory Authorities having jurisdiction over the
transactions contemplated by this Agreement seeking the requisite Consents
necessary to consummate the transactions contemplated by this Agreement. Regions
shall use all reasonable efforts to obtain the requisite Consents of all
Regulatory Authorities as soon as reasonably practicable after the filing of the
appropriate applications. Regions will promptly furnish to Park Meridian copies
of applications filed with all Regulatory Authorities and copies of written
communications received by Regions from any Regulatory Authorities with respect
to the transactions contemplated hereby.
8.3 FILINGS WITH STATE OFFICES. Upon the terms and
subject to the conditions of this Agreement, Regions shall execute and file the
Delaware Certificate of Merger with the Secretary of State of the State of
Delaware and the North Carolina Articles of Merger with the Secretary of State
of the State of North Carolina in connection with the Closing.
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8.4 AGREEMENT AS TO EFFORTS TO CONSUMMATE. Subject to the
terms and conditions of this Agreement, each Party agrees to use, and to cause
its Subsidiaries to use, its reasonable efforts to take, or cause to be taken,
all actions, and to do, or cause to be done, all things necessary, proper, or
advisable under applicable Laws to consummate and make effective, as soon as
reasonably practicable after the date of this Agreement, the transactions
contemplated by this Agreement, including, without limitation, using its
reasonable efforts to lift or rescind any Order adversely affecting its ability
to consummate the transactions contemplated herein and to cause to be satisfied
the conditions referred to in Article 9 of this Agreement; provided, that
nothing herein shall preclude either Party from exercising its rights under this
Agreement. Subject to the terms and conditions of this Agreement, each Party
shall use, and shall cause each of its Subsidiaries to use, its reasonable
efforts to obtain as promptly as practicable all Consents necessary or desirable
for the consummation of the transactions contemplated by this Agreement.
8.5 INVESTIGATION AND CONFIDENTIALITY.
(a) Prior to the Effective Time, each Party
shall keep the other Party advised of all Material developments relevant to its
business and to consummation of the Merger and shall permit the other Party to
make or cause to be made such investigation of the business and properties of it
and its Subsidiaries and of their respective financial and legal conditions as
the other Party reasonably requests, provided that such investigation shall be
reasonably related to the transactions contemplated hereby and shall not
interfere unnecessarily with normal operations. No investigation by a Party
shall affect the representations and warranties of the other Party.
(b) Each Party shall, and shall cause its
advisers and agents to, maintain the confidentiality of all confidential
information furnished to it by the other Party concerning its and its
Subsidiaries' businesses, operations, and financial positions to the extent
required by, and in accordance with confidentiality agreements between the
Parties, and shall not use such information for any purpose except in
furtherance of the transactions contemplated by this Agreement. If this
Agreement is terminated prior to the Effective Time, each Party shall promptly
return or certify the destruction of all documents and copies thereof, and
copies of all work papers containing confidential information received from the
other Party.
(c) Each Party agrees to give the other Party
notice as soon as practicable after any determination by it of any fact or
occurrence relating to the other Party which it has discovered through the
course of its investigation and which represents, or is reasonably likely to
represent, either a Material breach of any representation, warranty, covenant,
or agreement of the other Party or which has had or is reasonably likely to have
a Material Adverse Effect on the other Party; provided, however, that the giving
of such notice shall not be dispositive of the occurrence of such breach or a
Material Adverse Effect.
(d) Neither Party nor any of their respective
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 or similar privilege with respect to
such information or contravene any Law, rule, regulation, Order, judgment,
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decree, fiduciary duty, or agreement entered into prior to the date of this
Agreement. The Parties will use their reasonable efforts to make appropriate
substitute disclosure arrangements, to the extent practicable, in circumstances
in which the restrictions of the preceding sentence apply.
8.6 PRESS RELEASES. Prior to the Effective Time, Regions
and Park Meridian shall consult with each other as to the form and substance of
any press release Materially related to this Agreement or any other transaction
contemplated hereby; provided, that nothing in this Section 8.6 shall be deemed
to prohibit any Party from making any disclosure which its counsel deems
necessary or advisable in order to satisfy such Party's disclosure obligations
imposed by Law.
8.7 NO SOLICITATION. Except with respect to this
Agreement and the transactions contemplated hereby, Park Meridian agrees that it
shall not, and shall use its reasonable efforts to cause its officers,
directors, agents, Affiliates, and Representatives not to, directly or
indirectly, initiate, solicit, encourage or knowingly facilitate (including by
way of furnishing confidential information) any inquiries or the making of any
Acquisition Proposal. Notwithstanding anything herein to the contrary, Park
Meridian and its Board of Directors shall be permitted (i) to the extent
applicable, to comply with Rule 14d-9 and Rule 14e-2 promulgated under the 1934
Act with regard to an Acquisition Proposal, (ii) to engage in any discussions or
negotiations with, or provide any information to, any Person in response to an
unsolicited bona fide written Acquisition Proposal by any such Person, if and
only to the extent that (a) Park Meridian's Board of Directors concludes in good
faith and consistent with its fiduciary duties to Park Meridian's stockholders
under applicable Law that such Acquisition Proposal could reasonably be expected
to result in a Superior Proposal, (b) prior to providing any information or data
to any Person in connection with an Acquisition Proposal by any such Person,
Park Meridian's Board of Directors receives from such Person an executed
confidentiality agreement containing terms at least as stringent as those
contained in the Park Meridian Confidentiality Agreement, and (c) prior to
providing any information or data to any Person or entering into discussions or
negotiations with any Person, Park Meridian's Board of Directors notifies
Regions promptly of such inquiries, proposals, or offers received by, any such
information requested from, or any such discussions or negotiations sought to be
initiated or continued with, any of its Representatives indicating, in
connection with such notice, the name of such Person and the Material terms and
conditions of any inquiries, proposals or offers. Park Meridian agrees that it
will promptly keep Regions informed of the status and terms of any such
proposals or offers and the status and terms of any such discussions or
negotiations. Park Meridian agrees that it will, and will cause its officers,
directors and Representatives to, immediately cease and cause to be terminated
any activities, discussions, or negotiations existing as of the date of this
Agreement with any parties conducted heretofore with respect to any Acquisition
Proposal. Park Meridian agrees that it will use reasonable best efforts to
promptly inform its directors, officers, key employees, agents, and
Representatives of the obligations undertaken in this Section 8.7. Nothing in
this Section 8.7 shall (i) permit Park Meridian to terminate this Agreement
(except as specifically provided in Article 10 of this Agreement) or (ii) affect
any other obligation of Regions or Park Meridian under this Agreement.
8.8 TAX TREATMENT. Each of the Parties undertakes and
agrees to use its reasonable efforts to cause the Merger, and to take no action
which would cause the Merger not,
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to qualify for treatment as a "reorganization" within the meaning of Section
368(a) of the Internal Revenue Code for federal income tax purposes.
8.9 AGREEMENT OF AFFILIATES. Park Meridian has disclosed
in Section 8.9 of the Park Meridian Disclosure Memorandum each Person whom it
reasonably believes may be deemed an "affiliate" of Park Meridian for purposes
of Rule 145 under the 1933 Act. Park Meridian shall use its reasonable efforts
to cause each such Person to deliver to Regions not later than the Effective
Time, a written agreement, in substantially the form of Exhibit 3, providing
that such Person will not sell, pledge, transfer, or otherwise dispose of the
shares of Park Meridian Common Stock held by such Person except as contemplated
by such agreement or by this Agreement and will not sell, pledge, transfer, or
otherwise dispose of the shares of Regions Common Stock to be received by such
Person upon consummation of the Merger except in compliance with applicable
provisions of the 1933 Act and the rules and regulations thereunder. Shares of
Regions Common Stock issued to such affiliates of Park Meridian in exchange for
shares of Park Meridian Common Stock shall not be transferable, regardless of
whether each such affiliate has provided the written agreement referred to in
this Section 8.9 (and Regions shall be entitled to place restrictive legends
upon certificates for shares of Regions Common Stock issued to affiliates of
Park Meridian pursuant to this Agreement to enforce the provisions of this
Section 8.9), except as provided herein. Regions shall not be required to
maintain the effectiveness of the Registration Statement under the 1933 Act for
the purposes of resale of Regions Common Stock by such affiliates.
8.10 EMPLOYEE BENEFITS AND CONTRACTS. Following the
Effective Time, Regions shall provide generally to officers and employees of the
Park Meridian Companies, who at or after the Effective Time become employees of
a Regions Company ("Continuing Employees"), employee benefits under employee
benefit plans (other than stock option or other plans involving the potential
issuance of Regions Common Stock except as set forth in this Section 8.10), on
terms and conditions which when taken as a whole are substantially similar to
those currently provided by the Regions Companies to their similarly situated
officers and employees. For purposes of participation and vesting (but not
accrual of benefits) under such employee benefit plans, (i) service under any
qualified defined benefit plans of Park Meridian shall be treated as service
under Regions' qualified defined benefit plans, (ii) service under any qualified
defined contribution plans of Park Meridian shall be treated as service under
Regions' qualified defined contribution plans, and (iii) service under any other
employee benefit plans of Park Meridian shall be treated as service under any
similar employee benefit plans maintained by Regions. Regions shall cause the
Regions welfare benefit plans that cover the Continuing Employees after the
Effective Time to (a) waive any waiting period and restrictions and limitations
for preexisting conditions or insurability, and (b) cause any deductible,
co-insurance, or maximum out-of-pocket payments made by the Continuing Employees
under Park Meridian's welfare benefit plans to be credited to such Continuing
Employees under the Regions welfare benefit plans, so as to reduce the amount of
any deductible, co-insurance, or maximum out-of-pocket payments payable by the
Continuing Employees under the Regions welfare benefit plans. The continued
coverage of the Continuing Employees under the employee benefits plans
maintained by Park Meridian and/or any Park Meridian Subsidiary immediately
prior to the Effective Time during a transition period shall be deemed to
provide the Continuing Employees with benefits that are no less favorable than
those offered to other employees of Regions and its
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Subsidiaries, provided that after the Effective Time there is no Material
reduction (determined on an overall basis) in the benefits provided under the
Park Meridian employee benefit plans. Regions also shall cause Park Meridian and
its Subsidiaries to honor all employment, severance, consulting, and other
compensation Contracts disclosed in Section 8.10 of the Park Meridian Disclosure
Memorandum to Regions between any Park Meridian Company and any current or
former director, officer, or employee thereof, and all provisions for vested
benefits or other vested amounts earned or accrued through the Effective Time
under the Park Meridian Benefit Plans. Regions shall be responsible for the fees
related to the termination of the Park Meridian Benefit Plans.
8.11 INDEMNIFICATION.
(a) From and after the Effective Time, in the
event of any threatened or actual claim, action, suit, proceeding, or
investigation, whether civil, criminal, or administrative, including, without
limitation, any such claim, action, suit, proceeding or investigation in which
any person who is now, or has been at any time prior to the date of this
Agreement, or who becomes prior to the Effective Time, a director or officer of
Park Meridian or any Park Meridian Subsidiary (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 Park Meridian, any of the Park Meridian
Subsidiaries, or any of their respective predecessors, or (ii) this Agreement or
any of the transactions contemplated hereby, whether in any case asserted or
arising before or after the Effective Time, Regions shall indemnify and hold
harmless, as and to the fullest extent permitted by Law, each such Indemnified
Party against any Liability (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 any undertaking required by applicable Law), judgments, fines,
and amounts paid in settlement in connection with any such threatened or actual
claim, action, suit, proceeding, or investigation, and in the event of any such
threatened or actual claim, action, suit, proceeding, or investigation (whether
asserted or arising before or after the Effective Time), the Indemnified Parties
may retain counsel reasonably satisfactory to them; provided, however, that (a)
Regions shall have the right to assume the defense thereof and upon such
assumption Regions shall not be liable to any Indemnified Party for any legal
expenses of other counsel or any other expenses subsequently incurred by any
Indemnified Party in connection with the defense thereof, except that if Regions
elects not to assume such defense or counsel for the Indemnified Parties
reasonably advises the Indemnified Parties that there are issues which raise
conflicts of interest between Regions and the Indemnified Parties, the
Indemnified Parties may retain counsel reasonably satisfactory to them, and
Regions shall pay the reasonable fees and expenses of such counsel for the
Indemnified Parties, (b) Regions shall not be liable for any settlement effected
without its prior written consent (which consent shall not be unreasonably
withheld), and (c) Regions shall have no obligation hereunder to any Indemnified
Party when and if a court of competent jurisdiction shall ultimately determine,
and such determination shall have become final and nonappealable, that
indemnification of such Indemnified Party in the manner contemplated hereby is
prohibited by applicable Law. Regions' obligations under this Section 8.11(a)
continue in full force and effect for a period of six years after the Effective
Time; provided, however, that all rights to
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indemnification in respect of any claim (a "Claim") asserted or made within such
period shall continue until the final disposition of such Claim.
(b) Regions agrees that all rights to
indemnification and all limitations on Liability existing in favor of the
directors, officers, and employees of Park Meridian and its Subsidiaries (the
"Covered Parties") as provided in their respective Articles of Incorporation,
Bylaws, or similar governing instruments as in effect as of the date of this
Agreement with respect to matters occurring prior to the Effective Time shall
survive the Merger and shall continue in full force and effect, and shall be
honored by such entities, and by their respective successors as if such
successors were the indemnifying party thereunder, without any amendment
thereto, for a period of six years after the Effective Time; provided, however,
that all rights to indemnification in respect of any Claim asserted or made
within such period shall continue until the final disposition of such Claim;
provided, further, however, that nothing contained in this Section 8.11(b) shall
be deemed to preclude the liquidation, consolidation, or merger of Park Meridian
or any Park Meridian Subsidiary, 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. Without
limiting the foregoing, in any case in which approval by Regions is required to
effectuate any indemnification, Regions shall direct, at the election of the
Indemnified Party, that the determination of any such approval shall be made by
independent counsel mutually agreed upon between Regions and the Indemnified
Party.
(c) Regions, from and after the Effective Time,
will directly or indirectly cause the persons who served as directors or
officers of Park Meridian at or before the Effective Time to be covered by Park
Meridian's existing directors' and officers' liability insurance policy
(provided that Regions may substitute therefor policies of at least the same
coverage and amounts containing terms and conditions which are not less
advantageous than such policy). Such insurance coverage, shall commence at the
Effective Time and will be provided for a period of no less than three years
after the Effective Time.
(d) If Regions or any of its successors or
assigns shall consolidate with or merge into any other Person and shall not be
the continuing or surviving Person of such consolidation or merger or shall
transfer all or substantially all of its Assets to any Person, then and in each
case, proper provision shall be made so that the successors and assigns of
Regions shall assume the obligations set forth in this Section 8.11.
(e) The provisions of this Section 8.11 are
intended to be for the benefit of, and shall be enforceable by, each Indemnified
Party and his or her heirs and representatives.
8.12 EXEMPTION FROM LIABILITY UNDER SECTION 16(B). Park
Meridian shall take all such steps as may be required to cause the transactions
contemplated by Section 3.1 of this Agreement and any other dispositions of Park
Meridian equity securities (including derivative securities) in connection with
this Agreement by each individual who is a director or officer of Park Meridian
to be exempt under Rule 16b-3 promulgated under the 1934 Act.
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ARTICLE 9
CONDITIONS PRECEDENT TO OBLIGATIONS TO CONSUMMATE
9.1 CONDITIONS TO OBLIGATIONS OF EACH PARTY. The
respective obligations of each Party to perform this Agreement and to consummate
the Merger and the other transactions contemplated hereby are subject to the
satisfaction of the following conditions, unless waived by both Parties pursuant
to Section 11.6 of this Agreement:
(a) STOCKHOLDER APPROVAL. The stockholders of
Park Meridian shall have approved this Agreement, and the consummation of the
transactions contemplated hereby, as and to the extent required by Law and by
the provisions of any governing instruments.
(b) REGULATORY APPROVALS. All Consents of,
filings and registrations with, and notifications to, all Regulatory Authorities
required for consummation of the Merger shall have been obtained or made and
shall be in full force and effect and all waiting periods required by Law shall
have expired. No Consent obtained from any Regulatory Authority which is
necessary to consummate the transactions contemplated hereby shall be
conditioned or restricted in a manner (excluding requirements relating to the
raising of additional capital or the disposition of Assets or deposits) which in
the reasonable good faith judgment of the Board of Directors of Regions would so
Materially adversely impact the economic or business benefits of the
transactions contemplated by this Agreement so as to render inadvisable the
consummation of the Merger.
(c) CONSENTS AND APPROVALS. Each Party shall
have obtained any and all Consents required for consummation of the Merger
(other than those referred to in Section 9.1(b) of this Agreement) or for the
preventing of any Default under any Contract or Permit of such Party which, if
not obtained or made, is reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on such Party after the Effective Time and
no Consent obtained which is necessary to consummate the transactions
contemplated hereby shall be conditioned or restricted in a manner which in the
reasonable good faith judgment of the Board of Directors of Regions would so
Materially adversely impact the economic or business benefits of the
transactions contemplated by this Agreement so as to render inadvisable the
consummation of the Merger.
(d) LEGAL PROCEEDINGS. No court or governmental
or Regulatory Authority of competent jurisdiction shall have enacted, issued,
promulgated, enforced, or entered any Law or Order (whether temporary,
preliminary, or permanent) which is then in effect which prohibits, restrains,
or makes illegal consummation of the transactions contemplated by this
Agreement.
(e) REGISTRATION STATEMENT. The Registration
Statement shall be effective under the 1933 Act, no stop orders suspending the
effectiveness of the Registration Statement shall have been issued, and no
action, suit, proceeding, or investigation by the SEC to suspend the
effectiveness thereof shall have been initiated and be continuing.
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(f) TAX OPINION. Each Party shall have received
a written opinion from ▇▇▇▇▇▇ & Bird LLP in a form reasonably satisfactory to
such Party (the "Tax Opinion"), dated the date of the Effective Time,
substantially to the effect that, (i) the Merger will constitute a
reorganization within the meaning of Section 368(a) of the Internal Revenue
Code, (ii) no gain or loss will be recognized by holders of Park Meridian Common
Stock who exchange all of their Park Meridian Common Stock solely for Regions
Common Stock pursuant to the Merger (except with respect to any cash received in
lieu of a fractional share interest in Regions Common Stock), (iii) the tax
basis of the Regions Common Stock received (including fractional shares deemed
received and redeemed) by holders of Park Meridian Common Stock who exchange all
of their Park Meridian Common Stock solely for Regions Common Stock in the
Merger will be the same as the tax basis of the Park Meridian Common Stock
surrendered in exchange for the Regions Common Stock (reduced by an amount
allocable to a fractional share interest in Regions Common Stock deemed received
and redeemed), and (iv) the holding period of the Regions Common Stock received
(including fractional shares deemed received and redeemed) by holders who
exchange all of their Park Meridian Common Stock solely for Regions Common Stock
in the Merger will be the same as the holding period of the Park Meridian Common
Stock surrendered in exchange therefor, provided that such Park Meridian Common
Stock is held as a capital Asset at the Effective Time. In rendering such Tax
Opinions, such counsel shall be entitled to rely upon representations of
officers of Park Meridian and Regions reasonably satisfactory in form and
substance to such counsel.
9.2 CONDITIONS TO OBLIGATIONS OF REGIONS. The obligations
of Regions to perform this Agreement and consummate the Merger and the other
transactions contemplated hereby are subject to the satisfaction of the
following conditions, unless waived by Regions pursuant to Section 11.6(a) of
this Agreement:
(a) REPRESENTATIONS AND WARRANTIES. For purposes
of this Section 9.2(a), representations and warranties of Park Meridian set
forth in this Agreement shall be accurate as of the date of this Agreement and
as of the Effective Time with the same effect as though all such representations
and warranties had been made on and as of the Effective Time (provided that
representations and warranties which speak as of the date of this Agreement or
some other date shall speak only as of such date). The representations and
warranties of Park Meridian set forth in Section 5.3 of this Agreement shall be
true and correct (except for inaccuracies which are de minimis in amount). The
representations and warranties of Park Meridian set forth in Sections 5.18,
5.20, and 5.21 of this Agreement shall be true and correct in all Material
respects. There shall not exist inaccuracies in the representations and
warranties of Park Meridian set forth in this Agreement (including the
representations and warranties set forth in Sections 5.3, 5.18, 5.20, and 5.21
of this Agreement) such that the aggregate effect of such inaccuracies has, or
is reasonably likely to have, a Material Adverse Effect on Park Meridian;
provided that, for purposes of this sentence only, those representations and
warranties which are qualified by references to "Material," "Material Adverse
Effect," or variations thereof, or to the "Knowledge" of Park Meridian or to a
matter being "known" by Park Meridian shall be deemed not to include such
qualifications.
(b) PERFORMANCE OF AGREEMENTS AND COVENANTS.
Each and all of the agreements and covenants of Park Meridian to be performed
and complied with pursuant to this
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Agreement and the other agreements contemplated hereby prior to the Effective
Time shall have been duly performed and complied with in all Material respects.
(c) CERTIFICATES. Park Meridian shall have
delivered to Regions (i) a certificate, dated as of the Effective Time and
signed on Park Meridian's behalf by its duly authorized officers, to the effect
that the conditions set forth in Sections 9.2(a) and 9.2(b) of this Agreement
have been satisfied, and (ii) certified copies of resolutions duly adopted by
(1) Park Meridian's Board of Directors evidencing the taking of all corporate
action necessary to authorize the execution, delivery, and performance of this
Agreement, and the consummation of the transactions contemplated hereby, and (2)
Park Meridian's stockholders evidencing the approval of this Agreement, all in
such reasonable detail as Regions and its counsel shall request.
9.3 CONDITIONS TO OBLIGATIONS OF PARK MERIDIAN. The
obligations of Park Meridian to perform this Agreement and consummate the Merger
and the other transactions contemplated hereby are subject to the satisfaction
of the following conditions, unless waived by Park Meridian pursuant to Section
11.6(b) of this Agreement:
(a) REPRESENTATIONS AND WARRANTIES. For purposes
of this Section 9.3(a), the representations and warranties of Regions set forth
in this Agreement shall be accurate as of the date of this Agreement and as of
the Effective Time with the same effect as though all such representations and
warranties had been made on and as of the Effective Time (provided that
representations and warranties which speak as of the date of this Agreement or
some other date shall speak only as of such date). The representations and
warranties of Regions set forth in Section 6.3 of this Agreement shall be true
and correct (except for inaccuracies which are de minimis in amount). The
representations and warranties of Regions set forth in Section 6.12 of this
Agreement shall be true and correct in all Material respects. There shall not
exist inaccuracies in the representations and warranties of Regions set forth in
this Agreement (including the representations and warranties set forth in
Sections 6.3 and 6.12 of this Agreement) such that the aggregate effect of such
inaccuracies has, or is reasonably likely to have, a Material Adverse Effect on
Regions; provided that, for purposes of this sentence only, those
representations and warranties which are qualified by references to "Material,"
"Material Adverse Effect," or variations thereof, or to the "Knowledge" of
Regions or to a matter being "known" by Regions shall be deemed not to include
such qualifications.
(b) PERFORMANCE OF AGREEMENTS AND COVENANTS.
Each and all of the agreements and covenants of Regions to be performed and
complied with pursuant to this Agreement and the other agreements contemplated
hereby prior to the Effective Time shall have been duly performed and complied
with in all Material respects.
(c) CERTIFICATES. Regions shall have delivered
to Park Meridian (i) a certificate, dated as of the Effective Time and signed on
Regions' behalf by its duly authorized officers, to the effect that the
conditions set forth in Sections 9.3(a) and 9.3(b) of this Agreement have been
satisfied, and (ii) certified copies of resolutions duly adopted by Regions'
Board of Directors evidencing the taking of all corporate action necessary to
authorize the execution, delivery, and performance of this Agreement, and the
consummation of the transactions contemplated hereby, all in such reasonable
detail as Park Meridian and its counsel shall request.
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ARTICLE 10
TERMINATION
10.1 TERMINATION. Notwithstanding any other provision of
this Agreement, and notwithstanding the approval of this Agreement by the
stockholders of Park Meridian, this Agreement may be terminated and the Merger
abandoned at any time prior to the Effective Time:
(a) By mutual consent of the Board of Directors
of Regions and the Board of Directors of Park Meridian; or
(b) By the Board of Directors of either Party
(provided that the terminating Party is not then in breach of any
representation or warranty contained in this Agreement under the
applicable standard set forth in Section 9.2(a) of this Agreement in
the case of Park Meridian and Section 9.3(a) of this Agreement in the
case of Regions or in Material breach of any covenant or other
agreement contained in this Agreement) in the event of an inaccuracy of
any representation or warranty of the other Party contained in this
Agreement which cannot be or has not been cured within 30 days after
the giving of written notice to the breaching Party of such inaccuracy
and which inaccuracy would provide the terminating Party the ability to
refuse to consummate the Merger under the applicable standard set forth
in Section 9.2(a) of this Agreement in the case of Park Meridian and
Section 9.3(a) of this Agreement in the case of Regions; or
(c) By the Board of Directors of either Party
(provided that the terminating Party is not then in breach of any
representation or warranty contained in this Agreement under the
applicable standard set forth in Section 9.2(a) of this Agreement in
the case of Park Meridian and Section 9.3(a) in the case of Regions or
in Material breach of any covenant or other agreement contained in this
Agreement) in the event of a Material breach by the other Party of any
covenant or agreement contained in this Agreement which cannot be or
has not been cured within 30 days after the giving of written notice to
the breaching Party of such breach; or
(d) By the Board of Directors of either Party in
the event (i) any Consent of any Regulatory Authority required for
consummation of the Merger and the other transactions contemplated
hereby shall have been denied by final nonappealable action of such
authority, or (ii) the stockholders of Park Meridian fail to vote their
approval of this Agreement at the Stockholders' Meeting where this
Agreement was presented to such stockholders for approval and voted
upon; or
(e) By the Board of Directors of either Party in
the event that the Merger shall not have been consummated by December
31, 2001, if the failure to consummate the transactions contemplated
hereby on or before such date is not caused by any breach of this
Agreement by the Party electing to terminate pursuant to this Section
10.1(e).
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10.2 EFFECT OF TERMINATION. In the event of the
termination and abandonment of this Agreement pursuant to Section 10.1 of this
Agreement, this Agreement shall become void and have no effect, and none of
Regions, Park Meridian, 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 conjunction with the transactions contemplated
hereby, except that (i) the provisions of Section 8.5(b) of this Agreement, this
Section 10.2, Section 10.3, and Article 11 of this Agreement shall survive any
such termination and abandonment, and (ii) a termination of this Agreement shall
not relieve the breaching Party from Liability for an uncured willful breach of
a representation, warranty, covenant, or agreement of such Party contained in
this Agreement. The Stock Option Agreement shall be governed by its terms as to
its termination.
10.3 NON-SURVIVAL OF REPRESENTATIONS AND COVENANTS. The
respective representations, warranties, obligations, covenants, and agreements
of the Parties shall not survive the Effective Time, except for those covenants
and agreements which by their terms apply in whole or in part after the
Effective Time.
ARTICLE 11
MISCELLANEOUS
11.1 DEFINITIONS.
(a) Except as otherwise provided herein, the
capitalized terms set forth below shall have the following meanings:
"ACQUISITION PROPOSAL" with respect to a Party shall
mean any tender offer or exchange offer or any proposal for a merger,
acquisition of all of the stock or Assets of, or other business
combination involving such Party or any of its Subsidiaries or the
acquisition of a substantial equity interest in, or a substantial
portion of the Assets of, such Party or any of its Subsidiaries.
"AFFILIATE" of a Person shall mean any other Person
directly, or indirectly through one or more intermediaries,
controlling, controlled by or under common control with such Person.
"AGREEMENT" shall mean this Agreement and Plan of
Merger, including the Exhibits delivered pursuant hereto and
incorporated herein by reference.
"ASSETS" of a Person shall mean all of the assets,
properties, businesses, and rights of such Person of every kind,
nature, character, and description, whether real, personal, or mixed,
tangible or intangible, accrued or contingent, or otherwise relating to
or utilized in such Person's business, directly or indirectly, in whole
or in part, whether or not carried on the books and records of such
Person, and whether or not owned in the name of such Person or any
Affiliate of such Person and wherever located.
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"AVERAGE PRICE" shall mean the average of the daily
volume weighted averages of the trading prices of Regions Common Stock
as reported on the Nasdaq NMS (as reported by The Wall Street Journal
or, if not reported thereby, another authoritative source agreed to by
Park Meridian and Regions) for the ten consecutive full trading days in
which such shares are traded on the Nasdaq NMS ending at the close of
trading on the second full trading day prior to the date of the
Stockholders' Meeting.
"BHC ACT" shall mean the federal Bank Holding Company
Act of 1956, as amended.
"CONFIDENTIALITY AGREEMENT" shall mean that certain
Confidentiality Agreement, dated May 14, 2001, by and between Park
Meridian and Regions.
"CONSENT" shall mean any consent, approval,
authorization, clearance, exemption, waiver, or similar affirmation by
any Person pursuant to any Contract, Law, Order, or Permit.
"CONTRACT" shall mean any written or oral agreement,
arrangement, commitment, contract, indenture, instrument, lease,
understanding, or undertaking of any kind or character to which any
Person is a party or that is binding on any Person or its capital
stock, Assets, or business.
"DEFAULT" shall mean (i) any breach or violation of
or default under any Contract, Order, or Permit, (ii) any occurrence of
any event that with the passage of time or the giving of notice or both
would constitute a breach or violation of or default under any
Contract, Order, or Permit, or (iii) any occurrence of any event that
with or without the passage of time or the giving of notice would give
rise to a right to terminate or revoke, change the current terms of, or
renegotiate, or to accelerate, increase, or impose any Liability under,
any Contract, Order, or Permit, where, in any such event, such Default
is reasonably likely to have, individually or in the aggregate, a
Material Adverse Effect on a Party.
"DELAWARE CERTIFICATE OF MERGER" shall mean the
certificate of merger to be executed by Regions and filed with the
Secretary of State of the State of Delaware, relating to the Merger as
contemplated by Section 1.1 of this Agreement.
"DGCL" shall mean the Delaware General Corporation
Law.
"ENVIRONMENTAL LAWS" shall mean all Laws relating to
pollution or protection of human health or the environment (including
ambient air, surface water, ground water, land surface, or subsurface
strata) and which are administered, interpreted, or enforced by the
United States Environmental Protection Agency and state and local
agencies with jurisdiction over, and including common law in respect
of, pollution or protection of the environment, including the
Comprehensive Environmental Response Compensation and Liability Act, as
amended, 42 U.S.C. 9601 et seq. ("CERCLA"), the Resource Conservation
and Recovery Act, as amended, 42 U.S.C. 6901 et seq., and other
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Laws relating to emissions, discharges, releases, or threatened
releases of any Hazardous Material, or otherwise relating to the
manufacture, processing, distribution, use, treatment, storage,
disposal, transport, or handling of any Hazardous Material.
"ERISA" shall mean the Employee Retirement Income
Security Act of 1974, as amended.
"EXHIBITS" 1 through 3, inclusive, shall mean the
Exhibits so marked, copies of which are attached to this Agreement.
Such Exhibits are hereby incorporated by reference herein and made a
part hereof, and may be referred to in this Agreement and any other
related instrument or document without being attached hereto.
"GAAP" shall mean generally accepted accounting
principles, consistently applied during the periods involved.
"HAZARDOUS MATERIAL" shall mean (i) any hazardous
substance, hazardous material, hazardous waste, regulated substance, or
toxic substance (as those terms are defined by any applicable
Environmental Laws), and (ii) any chemicals, pollutants, contaminants,
petroleum, petroleum products that are or become regulated under any
applicable local, state, or federal Law (and specifically shall include
asbestos requiring abatement, removal, or encapsulation pursuant to the
requirements of governmental authorities and any polychlorinated
biphenyls).
"HSR ACT" shall mean Section 7A of the ▇▇▇▇▇▇▇ Act,
as added by Title II of the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements
Act of 1976, as amended, and the rules and regulations promulgated
thereunder.
"INTELLECTUAL PROPERTY" shall mean copyrights,
patents, trademarks, service marks, service names, trade names,
applications therefor, technology rights and licenses, computer
software (including any source or object codes therefor or
documentation relating thereto), trade secrets, franchises, know-how,
inventions and other intellectual property rights.
"INTERNAL REVENUE CODE" shall mean the Internal
Revenue Code of 1986, as amended, and the rules and regulations
promulgated thereunder.
"INVESTMENT COMPANY" shall have the meaning set forth
in the Investment Company Act.
"KNOWLEDGE" as used with respect to a Person
(including references to such Person being aware of a particular
matter) shall mean the personal knowledge of the chairman, president,
or chief financial officer of such Person.
"LAW" shall mean any code, law, ordinance,
regulation, rule, or statute applicable to a Person or its Assets,
Liabilities, or business, including those promulgated, interpreted, or
enforced by any Regulatory Authority.
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"LIABILITY" shall mean any direct or indirect,
primary or secondary, liability, indebtedness, obligation, penalty,
cost, or expense (including costs of investigation, collection, and
defense), claim, deficiency, or guaranty of any type, whether accrued,
absolute or contingent, liquidated or unliquidated, matured or
unmatured, or otherwise.
"LIEN" shall mean any mortgage, pledge, reservation,
restriction (other than a restriction on transfers arising under the
Securities Laws), security interest, or claim, lien, or encumbrance of
any nature whatsoever of, on, or with respect to any property or
property interest, other than (i) Liens for property Taxes not yet due
and payable, and (ii) for depository institution Subsidiaries of a
Party, pledges to secure deposits, and other Liens incurred in the
ordinary course of the banking business.
"LITIGATION" shall mean any action, arbitration,
cause of action, claim, complaint, criminal prosecution, demand letter,
governmental or other examination or investigation, hearing, inquiry,
administrative or other proceeding, or notice (written or oral) by any
Person alleging potential Liability, but shall not include regular,
periodic examinations of depository institutions and their Affiliates
by Regulatory Authorities.
"LOAN PROPERTY" shall mean any property owned,
leased, or operated by the Party in question or by any of its
Subsidiaries or in which such Party or Subsidiary holds a security or
other interest (including an interest in a fiduciary capacity), and,
where required by the context, includes the owner or operator of such
property, but only with respect to such property.
"MATERIAL" for purposes of this Agreement shall be
determined in light of the facts and circumstances of the matter in
question; provided that any specific monetary amount stated in this
Agreement shall determine materiality in that instance.
"MATERIAL ADVERSE EFFECT" on a Party shall mean a
Material adverse impact, arising from an event, change, or occurrence
which, individually or together with any other event, change, or
occurrence on (i) the financial condition, results of operations, or
business of such Party and its Subsidiaries, taken as a whole, or (ii)
the ability of such Party to perform its obligations under this
Agreement or to consummate the Merger or the other transactions
contemplated by this Agreement, provided that "Material Adverse Effect"
shall not be deemed to include the impact of (a) changes in banking and
similar Laws of general applicability or interpretations thereof by
courts or governmental authorities, (b) changes in GAAP or regulatory
accounting principles generally applicable to banks, investment banks,
broker-dealers, and their holding companies, (c) actions and omissions
of a Party (or any of its Subsidiaries) taken with the prior informed
consent of the other Party in contemplation of the transactions
contemplated hereby, (d) general economic or market conditions or the
securities industry in general, and (e) this Agreement or the
announcement thereof.
"NASD" shall mean the National Association of
Securities Dealers, Inc.
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"NASDAQ NMS" shall mean the National Market System of
The Nasdaq Stock Market.
"1933 ACT" shall mean the Securities Act of 1933, as
amended, and the rules and regulations promulgated thereunder.
"1934 ACT" shall mean the Securities Exchange Act of
1934, as amended, and the rules and regulations promulgated thereunder.
"NCBCA" shall mean the North Carolina Business
Corporation Act.
"NORTH CAROLINA ARTICLES OF MERGER" shall mean the
Articles of Merger executed by Regions and filed with the Secretary of
State of the State of North Carolina relating to the Merger as
contemplated by Section 1.1 of this Agreement.
"ORDER" shall mean any administrative decision or
award, decree, injunction, judgment, order, quasi-judicial decision or
award, ruling, or writ of any federal, state, local, or foreign or
other court, arbitrator, mediator, tribunal, administrative agency, or
Regulatory Authority.
"PARK MERIDIAN COMMON STOCK" shall mean the $.01 par
value common stock of Park Meridian.
"PARK MERIDIAN COMPANIES" shall mean, collectively,
Park Meridian and all Park Meridian Subsidiaries.
"PARK MERIDIAN DISCLOSURE MEMORANDUM" shall mean the
written information entitled "Park Meridian Disclosure Memorandum"
delivered prior to the execution of this Agreement to Regions
describing in reasonable detail the matters contained therein and, with
respect to each disclosure made therein, specifically referencing each
Section or subsection of this Agreement under which such disclosure is
being made. Information disclosed with respect to one Section or
subsection shall not be deemed to be disclosed for any other Section or
subsection of this Agreement. The inclusion of any matter in this
document shall not be deemed an admission or otherwise to imply that
any such matter is Material for purposes of this Agreement.
"PARK MERIDIAN FINANCIAL STATEMENTS" shall mean (i)
the consolidated statements of condition (including related notes and
schedules, if any) of Park Meridian as of March 31, 2001, and as of
December 31, 2000, and 1999, and the related statements of income,
changes in stockholders' equity, and cash flows (including related
notes and schedules, if any) for the three months ended March 31, 2001
and for each of the three years ended December 31, 2000, 1999, and
1998, as filed by Park Meridian in SEC Documents, and (ii) the
consolidated statements of condition of Park Meridian (including
related notes and schedules, if any) and related statement of income,
change in stockholders equity, and cash flows (including related notes
and schedules, if any)
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included in SEC Documents filed with respect to periods ended
subsequent to March 31, 2001.
"PARK MERIDIAN STOCK PLANS" shall mean the existing
stock option and other stock-based compensation plans of Park Meridian,
including, without limitation, the stock option plans and programs of
any Persons acquired by Park Meridian or a Park Meridian Subsidiary.
"PARK MERIDIAN SUBSIDIARIES" shall mean the
Subsidiaries of Park Meridian, which shall include the Park Meridian
Subsidiaries described in Section 5.4 of this Agreement and any
corporation, bank, savings association, or other organization acquired
as a Subsidiary of Park Meridian in the future and owned by Park
Meridian at the Effective Time.
"PARTICIPATION FACILITY" shall mean any facility or
property in which the Party in question or any of its Subsidiaries
participates in the management, as such term is defined in CERCLA
(including, but not limited to, participating in a fiduciary capacity),
and, where required by the context, said term means the owner or
operator of such facility or property, but only with respect to such
facility or property.
"PARTY" shall mean either Park Meridian or Regions,
and "PARTIES" shall mean both Park Meridian and Regions.
"PERMIT" shall mean any federal, state, local, or
foreign governmental approval, authorization, certificate, easement,
filing, franchise, license, or permit from governmental authorities
that is required for the operation of a Party's respective businesses.
"PERSON" shall mean a natural person or any legal,
commercial, or governmental entity, such as, but not limited to, a
corporation, general partnership, joint venture, limited partnership,
limited liability company, trust, business association, group acting in
concert, or any person acting in a representative capacity.
"PROXY STATEMENT" shall mean the proxy statement used
by Park Meridian to solicit the approval of its stockholders of the
transactions contemplated by this Agreement, which shall include the
prospectus of Regions relating to the issuance of the Regions Common
Stock to holders of Park Meridian Common Stock.
"REASONABLE EFFORTS" shall mean the reasonable best
efforts of a Party, but shall not require any Party to take any
commercially unreasonable action.
"REGIONS COMMON STOCK" shall mean the $.625 par value
common stock of Regions.
"REGIONS COMPANIES" shall mean, collectively, Regions
and all Regions Subsidiaries.
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"REGIONS FINANCIAL STATEMENTS" shall mean (i) the
consolidated statements of condition (including related notes and
schedules, if any) of Regions as of March 31, 2001 and as of December
31, 2000 and 1999, and the related statements of income, changes in
stockholders' equity, and cash flows (including related notes and
schedules, if any) for the three months ended March 31, 2001 and for
each of the three years ended December 31, 2000, 1999, and 1998, as
filed by Regions in SEC Documents, and (ii) the consolidated statements
of condition of Regions (including related notes and schedules, if any)
and related statements of income, changes in stockholders' equity, and
cash flows (including related notes and schedules, if any) included in
SEC Documents filed with respect to periods ended subsequent to March
31, 2001.
"REGIONS SUBSIDIARIES" shall mean the Subsidiaries of
Regions and any corporation, bank, savings association, or other
organization acquired as a Subsidiary of Regions in the future and
owned by Regions at the Effective Time.
"REGISTRATION STATEMENT" shall mean the Registration
Statement on Form S-4, or other appropriate form, including any
pre-effective or post-effective amendments or supplements thereto,
filed with the SEC by Regions under the 1933 Act with respect to the
shares of Regions Common Stock to be issued to the stockholders of Park
Meridian in connection with the transactions contemplated by this
Agreement.
"REGULATORY AUTHORITIES" shall mean, collectively,
the Federal Trade Commission, the United States Department of Justice,
the Board of the Governors of the Federal Reserve System, the Office of
the Comptroller of the Currency, the Federal Deposit Insurance
Corporation, the Office of Thrift Supervision, the Internal Revenue
Service, all state regulatory agencies having jurisdiction over the
Parties and their respective Subsidiaries, the NASD, and the SEC.
"REPRESENTATIVE" shall mean any investment banker,
financial advisor, attorney, accountant, consultant, or other
representative of a Person.
"RIGHTS" shall mean, with respect to any Person,
securities, or obligations convertible into or exercisable for, or
giving any Person any right to subscribe for or acquire, or any
options, calls, or commitments relating to, or any stock appreciation
right or other instrument the value of which is determined in whole or
in part by reference to the market price or value of, shares of capital
stock of such Person.
"SEC" shall mean the United States Securities and
Exchange Commission.
"SEC DOCUMENTS" shall mean all forms, proxy
statements, registration statements, reports, schedules, and other
documents filed, or required to be filed, by a Party or any of its
Subsidiaries with the SEC.
"SECURITIES LAWS" shall mean the 1933 Act, the 1934
Act, the Investment Company Act, the Investment Advisers Act, the Trust
Indenture Act of 1939, as
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amended, and the rules and regulations of any Regulatory Authority
promulgated thereunder.
"STOCK OPTION AGREEMENT" shall mean that certain
stock option agreement by and between Park Meridian and Regions
substantially in the form of Exhibit 2.
"STOCKHOLDERS' MEETING" shall mean the meeting of the
stockholders of Park Meridian to be held pursuant to Section 8.1 of
this Agreement, including any adjournment or adjournments thereof.
"SUBSIDIARIES" shall mean all those corporations,
banks, associations, or other entities of which the entity in question
owns or controls 50% or more of the outstanding equity securities
either directly or through an unbroken chain of entities as to each of
which 50% or more of the outstanding equity securities is owned
directly or indirectly by its parent; provided, there shall not be
included any such entity acquired through foreclosure or any such
entity the equity securities of which are owned or controlled in a
fiduciary capacity.
"SUPERIOR PROPOSAL" means, with respect to Park
Meridian, any written Acquisition Proposal made by a Person other than
Regions which (i) is for (a) a merger, reorganization, consolidation,
share exchange, business combination, recapitalization, liquidation,
dissolution, or similar transaction involving Park Meridian as a result
of which either (1) Park Meridian's stockholders prior to such
transaction (by virtue of their ownership of Park Meridian's shares) in
the aggregate cease to own at least 50% of the voting securities of the
entity surviving or resulting from such transaction (or the ultimate
parent entity thereof) or (2) the individuals comprising the Board of
Directors of Park Meridian prior to such transaction do not constitute
a majority of the board of directors of such ultimate parent entity,
(b) a sale, lease, exchange, transfer, or other disposition of at least
50% of the Assets of Park Meridian and its Subsidiaries, taken as a
whole, in a single transaction or a series of related transactions, or
(c) the acquisition, directly or indirectly, by a Person of beneficial
ownership of 25% or more of the common stock of Park Meridian whether
by merger, consolidation, share exchange, business combination, tender,
or exchange offer or otherwise, and (ii) which is otherwise on terms
which the Board of Directors of Park Meridian in good faith concludes
(after consultation with its financial advisors and outside counsel),
taking into account, among other things, all legal, financial,
regulatory, and other aspects of the proposal (including the impact of
the Stock Option Agreement) and the Person making the proposal, (1)
would, if consummated, result in a transaction that is more favorable
to its stockholders (in their capacities as stockholders), from a
financial point of view, than the transactions contemplated by this
Agreement, and (2) is reasonably capable of being completed.
"SUPPORT AGREEMENT" shall mean the various support
agreements, each in substantially the form of Exhibit 1.
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"SURVIVING CORPORATION" shall mean Regions as the
surviving corporation resulting from the Merger.
"TAX" OR "TAXES" shall mean all federal, state,
local, and foreign taxes, levies, imposts, duties, or other like
assessments, including income, gross receipts, excise, employment,
sales, use, transfer, license, payroll, franchise, severance, stamp,
occupation, windfall profits, environmental, federal highway use,
commercial rent, customs duties, capital stock, paid-up capital,
profits, withholding, Social Security, single business and
unemployment, disability, real property, personal property,
registration, ad valorem, value added, alternative or add-on minimum,
estimated, or other tax of any kind whatsoever, imposed or required to
be withheld by the United States or any state, local, or foreign
government or subdivision or agency thereof, including any related
interest and penalties, or additions thereto.
"TAX RETURN" shall mean any report, return,
information return, or other information required to be supplied to a
taxing authority in connection with Taxes, including any return of an
affiliated or combined or unitary group that includes a Party or its
Subsidiaries.
"TAXABLE PERIOD" shall mean any period prescribed by
any governmental authority, including the United States or any state,
local, or foreign government or subdivision or agency thereof for which
a Tax Return is required to be filed or Tax is required to be paid.
(b) The terms set forth below shall have the
meanings ascribed thereto in the referenced sections:
Claim................................................ Section 8.11(a)
Closing.............................................. Section 1.2
Continuing Employees................................. Section 8.10
Covered Parties...................................... Section 8.11(b)
Effective Time....................................... Section 1.3
Exchange Agent....................................... Section 4.1
Exchange Ratio....................................... Section 3.1(b)
Indemnified Parties.................................. Section 8.11(a)
Merger............................................... Section 1.1
Park Meridian Benefit Plans.......................... Section 5.13(a)
Park Meridian Contracts.............................. Section 5.14(a)
Park Meridian ERISA Affiliate........................ Section 5.13(e)
Park Meridian ERISA Plan............................. Section 5.13(a)
Park Meridian Options................................ Section 3.6(a)
Park Meridian Pension Plan........................... Section 5.13(a)
Park Meridian SEC Reports............................ Section 5.5(a)
Regions SEC Reports.................................. Section 6.5(a)
Takeover Laws........................................ Section 5.20
Tax Opinion.......................................... Section 9.1(f)
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(c) Any singular term in this Agreement shall be
deemed to include the plural, and any plural term the singular. Whenever the
words "include," "includes," or "including" are used in this Agreement, they
shall be deemed followed by the words "without limitation."
11.2 EXPENSES.
(a) Except as otherwise provided in this Section
11.2, each of the Parties shall bear and pay all direct costs and expenses
incurred by it or on its behalf in connection with the transactions contemplated
hereunder, including filing, registration, and application fees, printing fees,
and fees and expenses of its own financial or other consultants, investment
bankers, accountants, and counsel, except that Regions shall bear and pay the
filing fees payable in connection with the Registration Statement and the Proxy
Statement and one half of the printing costs incurred in connection with the
printing of the Registration Statement and the Proxy Statement.
(b) Nothing contained in this Section 11.2 shall
constitute or shall be deemed to constitute liquidated damages for the willful
breach by a Party of the terms of this Agreement or otherwise limit the rights
of the nonbreaching Party.
11.3 BROKERS AND FINDERS. Each of the Parties represents
and warrants that neither it nor any of its officers, directors, employees, or
Affiliates has employed any broker or finder or incurred any Liability for any
financial advisory fees, investment bankers' fees, brokerage fees, commissions,
or finders' fees in connection with this Agreement or the transactions
contemplated hereby. In the event of a claim by any broker or finder based upon
his, her, or its representing or being retained by or allegedly representing or
being retained by Park Meridian or Regions, each of Park Meridian and Regions,
as the case may be, agrees to indemnify and hold the other Party harmless of and
from any Liability in respect of any such claim.
11.4 ENTIRE AGREEMENT. Except as otherwise expressly
provided herein, this Agreement (including the Park Meridian Disclosure
Memorandum) constitutes the entire agreement between the Parties with respect to
the transactions contemplated hereunder and supersedes all prior arrangements or
understandings with respect thereto, written or oral, other than the
Confidentiality Agreement, which shall remain in effect. Nothing in this
Agreement expressed or implied, is intended to confer upon any Person, other
than the Parties or their respective successors, any rights, remedies,
obligations, or liabilities under or by reason of this Agreement other than as
provided for in Sections 8.12 and 8.14 of this Agreement.
11.5 AMENDMENTS. To the extent permitted by Law, this
Agreement may be amended by a subsequent writing signed by each of the Parties
upon the approval of the Boards of Directors of each of the Parties, whether
before or after stockholder approval of this Agreement has been obtained;
provided, that the provisions of this Agreement relating to the manner or basis
in which shares of Park Meridian Common Stock will be exchanged for Regions
Common Stock or cash shall not be amended after the Stockholders' Meeting
without the
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requisite approval of the holders of the issued and outstanding shares of Park
Meridian Common Stock entitled to vote thereon and Section 8.11 of this
Agreement may not be amended after the Effective Time in a manner adverse to any
director or officer of Park Meridian without such director's or officer's
written consent.
11.6 WAIVERS.
(a) Prior to or at the Effective Time, Regions,
acting through its Board of Directors, chief executive officer, chief financial
officer, or other authorized officer, shall have the right to waive any Default
in the performance of any term of this Agreement by Park Meridian, to waive or
extend the time for the compliance or fulfillment by Park Meridian of any and
all of its obligations under this Agreement, and to waive any or all of the
conditions precedent to the obligations of Regions under this Agreement, except
any condition which, if not satisfied, would result in the violation of any Law.
No such waiver shall be effective unless in writing signed by a duly authorized
officer of Regions except that any unfulfilled conditions shall be deemed to
have been waived at the Effective Time.
(b) Prior to or at the Effective Time, Park
Meridian, acting through its Board of Directors, chief executive officer, chief
financial officer, or other authorized officer, shall have the right to waive
any Default in the performance of any term of this Agreement by Regions, to
waive or extend the time for the compliance or fulfillment by Regions of any and
all of its obligations under this Agreement, and to waive any or all of the
conditions precedent to the obligations of Park Meridian under this Agreement,
except any condition which, if not satisfied, would result in the violation of
any Law. No such waiver shall be effective unless in writing signed by a duly
authorized officer of Park Meridian except that any unfulfilled conditions shall
be deemed to have been waived at the Effective Time.
(c) The failure of any Party at any time or
times to require performance of any provision hereof shall in no manner affect
the right of such Party at a later time to enforce the same or any other
provision of this Agreement. No waiver of any condition or of the breach of any
term contained in this Agreement in one or more instances shall be deemed to be
or construed as a further or continuing waiver of such condition or breach or a
waiver of any other condition or of the breach of any other term of this
Agreement.
11.7 ASSIGNMENT. Except as expressly contemplated hereby,
neither this Agreement nor any of the rights, interests, or obligations
hereunder shall be assigned by any Party hereto (whether by operation of Law or
otherwise) without the prior written consent of the other Party. Subject to the
preceding sentence, this Agreement will be binding upon, inure to the benefit
of, and be enforceable by the Parties and their respective successors and
assigns.
11.8 NOTICES. All notices or other communications which
are required or permitted hereunder shall be in writing and sufficient if
delivered by hand, by facsimile transmission, by registered or certified mail,
postage pre-paid, or by courier or overnight carrier, to the persons at the
addresses set forth below (or at such other address as may be provided
hereunder), and shall be deemed to have been delivered as of the date so
delivered:
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Park Meridian: PARK MERIDIAN FINANCIAL CORPORATION
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopy Number: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
President and Chief Executive Officer
Copy to Counsel: ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, P.A.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopy Number: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Regions: REGIONS FINANCIAL CORPORATION
▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopy Number: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Vice Chairman and Executive
Financial Officer
Copy to Counsel: REGIONS FINANCIAL CORPORATION
▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopy Number: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇.
General Counsel
11.9 GOVERNING LAW. This Agreement shall be governed by
and construed in accordance with the Laws of the State of Delaware, without
regard to any applicable principles of conflicts of Laws, except to the extent
that the Laws of the State of North Carolina relate to the consummation of the
Merger.
11.10 COUNTERPARTS. This Agreement may be executed in two
or more counterparts, each of which shall be deemed to be an original, but all
of which together shall constitute one and the same instrument.
11.11 CAPTIONS. The captions contained in this Agreement
are for reference purposes only and are not part of this Agreement.
11.12 INTERPRETATIONS. Neither this Agreement nor any
uncertainty or ambiguity herein shall be construed or resolved against any
Party, because such Party may be considered the draftsman. The Parties
acknowledge and agree that this Agreement has been reviewed, negotiated, and
accepted by all Parties and their attorneys and shall be construed and
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interpreted according to the ordinary meaning of the words used so as fairly to
accomplish the purposes and intentions of the Parties.
11.13 ENFORCEMENT OF AGREEMENT. The Parties hereto agree
that irreparable damage would occur in the event that any of the provisions of
this Agreement was not performed in accordance with its specific terms or was
otherwise breached. It is accordingly agreed that the Parties shall be entitled
to an injunction or injunctions to prevent breaches of this Agreement and to
enforce specifically the terms and provisions hereof in any court of the United
States or any state having jurisdiction, this being in addition to any other
remedy to which they are entitled at law or in equity.
11.14 SEVERABILITY. Any term or provision of this Agreement
which is invalid or unenforceable in any jurisdiction shall, as to that
jurisdiction, be ineffective to the extent of such invalidity or
unenforceability without rendering invalid or unenforceable the remaining terms
and provisions of this Agreement or affecting the validity or enforceability of
any of the terms or provisions of this Agreement in any other jurisdiction. If
any provision of this Agreement is so broad as to be unenforceable, the
provision shall be interpreted to be only so broad as is enforceable.
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IN WITNESS WHEREOF, each of the Parties has caused this
Agreement to be executed on its behalf and its corporate seal to be hereunto
affixed and attested by officers thereunto as of the day and year first above
written.
ATTEST: PARK MERIDIAN FINANCIAL CORPORATION
By: \s\ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ By: \s\ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------- --------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, III ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Executive Vice President President and Chief Executive Officer
[CORPORATE SEAL]
ATTEST: REGIONS FINANCIAL CORPORATION
By: \s\ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇. By: \s\ ▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
--------------------------- --------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇. ▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
Corporate Secretary President and Chief Executive Officer
[CORPORATE SEAL]
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