Exhibit 2
AMENDED AND RESTATED
AGREEMENT AND PLAN OF REORGANIZATION
This Amended and Restated Agreement and Plan of Reorganization (the
"Agreement") is made and entered into as of October 5, 1998, by and among GOLD
BANC CORPORATION, INC., a Kansas corporation ("Gold"), GOLD BANC ACQUISITION
CORPORATION IX, INC., a Kansas corporation ("Sub") and CITIZENS BANCORPORATION,
INC., an Oklahoma corporation ("Company").
WITNESSETH:
WHEREAS, the Boards of Directors of Gold, Sub and Company have approved
and deem it advisable and in the best interests of their respective companies
and stockholders that Gold and Company become affiliated through the merger of
Company with and into Sub in the manner hereinafter set forth (the "Merger");
and
WHEREAS, the parties desire to make certain representations, warranties
and agreements in connection with the Merger and also to prescribe certain
conditions to the Merger.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements herein contained, the parties hereby agree as follows:
ARTICLE I
THE COMPANY MERGER
1.1 The Company Merger. Upon the terms and subject to the conditions of
this Agreement at the Effective Time (as hereinafter defined), Company shall be
merged with and into Sub and the separate existence and corporate organization
of Company shall thereupon cease and Sub and Company shall thereupon be a single
corporation. Sub shall be the surviving corporation in the Merger and the
separate corporate existence of Sub shall continue unaffected and unimpaired by
the Merger.
1.2 Effective Time of the Company Merger. On the Closing Date (as
hereinafter defined), the proper officers of Company and Sub shall execute and
acknowledge appropriate certificates of merger that shall be filed as soon as
possible following the closing, but not later than the first business day
following the closing with (i) the Kansas Secretary of State in accordance with
the Kansas General Corporation Code (the "KGCC") and (ii) the Oklahoma Secretary
in accordance with the Oklahoma General Corporation Act (the"OGCA"). The Merger
shall become effective upon filing the last of the certificates of merger with
the Kansas Secretary of State or the Oklahoma Secretary of State (the "Effective
Time"). The closing shall be on a day (the "Closing Date") occurring no later
than forty-five (45) days following the
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satisfaction or waiver, to the extent permitted hereunder, of the last of the
conditions to the consummation of the Merger specified in Articles VII and VIII
of this Agreement at 10:00 a.m. at the offices of Gold, located at ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇, which day shall be specified by notice from Gold to
Company (such notice to be at least five (5) days in advance of such Closing
Date), or on such other date and at such other place and time as the parties
hereto may mutually agree. The parties shall use their best efforts to cause the
Closing Date to occur on or before November 30, 1998.
1.3 The Articles of Incorporation. The Articles of Incorporation and
Bylaws of Sub as in effect immediately prior to the Effective Time shall be and
remain the Articles of Incorporation and Bylaws of the surviving corporation
from and after the Effective Time until amended as provided by law and the
officers and directors of Sub shall continue as the officers and directors of
the surviving corporation from and after the Effective Time.
1.4 Effect of Company Merger. Subject to the laws of Kansas and
Oklahoma, at the Effective Time (a) Sub shall possess all assets and property of
every description, and every interest therein, wherever located, and the rights,
privileges, immunities, powers, franchises, and authority, of a public as well
as of a private nature, of Company and all obligations belonging to or due each
of Company and Sub shall be vested in Sub without further act or deed; (b) title
to any real estate or any interest therein vested in Company shall not revert or
in any way be impaired by reason of the Company Merger; (c) all rights of
creditors and all liens on any property of the Company shall be preserved
unimpaired; and (d) Sub shall be liable for all the obligations of Company, and
any claim existing, or action or proceeding pending, by or against either of
Company or Sub, may be prosecuted to judgment with the right of appeal, as if
the Merger had not taken place.
1.5 Further Assurances. If at any time after the Effective Time, Sub
shall consider it advisable that any further conveyances, agreements, documents,
instruments or assurances of law or any other actions or things are necessary or
desirable to vest, perfect, confirm, or record in Sub the title to any property,
rights, privileges, powers, or franchises of the Company, the former Board of
Directors and officers of the Company shall, and will be authorized to, execute
and deliver in the name and on behalf of the Company or otherwise, any and all
proper conveyances, agreements, documents, instruments, and assurances of law
and do all things necessary or proper to vest, perfect, or confirm title to such
property, rights, privileges, powers and franchises in Sub, and otherwise to
carry out the provisions of this Agreement.
ARTICLE II
PROVISIONS OF MERGER TRANSACTION
2.1 Effect of Merger on Sub Stock. At the Effective Time, each share of
common stock, $1.00 par value per share, of Sub ("Sub Common Stock") issued and
outstanding immediately prior to the Effective Time shall remain issued and
outstanding, and shall be unaffected by the Merger.
2.2 Conversion of the Company Common Stock in the Merger. At the
Effective Time, by virtue of the Merger and without any action on the part of
any holder thereof:
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(a) Each share of common stock, $1.00 par value per share of the
Company ("Company Common Stock"), that is either authorized but unissued or held
in the treasury of the Company, if any, or held by the Company or any subsidiary
of the Company other than as trustee, fiduciary, nominee or in some similar
capacity shall be canceled and retired and shall cease to exist from and after
the Effective Time, and no cash or other consideration shall be delivered in
exchange therefore;
(b) The following definitions are relevant in determining the
conversion of each outstanding share of Company Common Stock:
(i) The "Average Gold Price" shall equal $15.00.
(ii) The "Average Gold Future Price" shall equal the average
of the closing price of Gold Common Stock for the ten consecutive trading days
immediately preceding the third trading day prior to the Closing Date.
(iii) "Stockholders' Equity" shall equal total capital,
surplus, undivided profits, and year-to-date earnings, excluding FASB 115
adjustments to "available for sale" securities.
(iv) The "Aggregate Company Value" shall equal: (A) the
product of (w) the Stockholders' Equity of the Company on the Closing Date, as
determined on the basis of the June 30, 1998 financial statements of the Company
previously delivered to Gold, and after adjustments for retained income
subsequent to June 30, 1998 and increases for any loan loss reserves greater
than $1,591,847, (x) multiplied by 3.03; plus (B) $1,725,500, plus, (C) the
greater of zero or the product of (y) the Average Gold Future Price minus 15 (z)
multiplied by the quotient of 850,000 divided by the Average Gold Future Price.
(v) The "Common Per Share Amount" shall equal the Aggregate
Company Value divided by 25,000.
(c) Each outstanding share of Company Common Stock, shall be converted
into that fraction of a share (rounded to the nearest one/one-thousandth of a
share) of Gold Common Stock, as defined in Section 3.6 below, equal to the
quotient derived from dividing the Common Per Share Amount by the Average Gold
Price (the "Common Stock Conversion Ratio").
2.3 Exchange of Certificates.
(a) Gold, on behalf of Sub, shall make available to Exchange
National Bank and/or to Midwest Capital Management, Inc., which are hereby
designated as exchange agents (the "Exchange Agents"), in trust for the benefit
of holders of shares of Company common stock, at or prior to the Effective Time,
such number of shares of Gold Common Stock as shall be issuable to the holders
of Company Common Stock in accordance with Section 2.2 hereof. As soon as
practicable after the Closing Date, Gold, on behalf of the Exchange Agents,
shall mail to each holder of record of a certificate that immediately prior to
the Closing Date represented outstanding shares of Company Common Stock (i) a
form letter of transmittal and (ii) instructions for effecting the surrender of
certificates of Company Common Stock for exchange
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into certificates of Gold Common Stock. The Gold Common Stock into which the
Company Common Stock is being converted in accordance with Section 2.2(c) hereof
may be delivered to a brokerage account established at Midwest Capital
Management, Inc. for each stockholder of the Company; provided, however, that
definitive stock certificates for shares of Gold Common Stock will be issued by
the Exchange Agents and delivered to each Company stockholder that requests such
certificates.
(b) Notwithstanding any other provision herein, no fractional
shares of Gold Common Stock and no certificates or script therefor or other
evidence of ownership thereof will be issued. All fractional shares of Gold
Common Stock to which a holder of Company Common Stock would otherwise be
entitled under Section 2.2 hereof shall be aggregated. If a fractional share
results from such aggregation, such stockholder shall be entitled, after the
Effective Time and upon the surrender of such stockholder's certificate or
certificates representing shares of Company Common Stock, to receive from the
Exchange Agent an amount in cash in lieu of such fractional share equal to the
product of such fraction and the Average Gold Price. Gold, on behalf of Sub,
shall make available to the Exchange Agent, as required from time to time, any
cash necessary for this purpose.
2.4 Closing of the Company Transfer Books. At the Effective Time, the
stock transfer books of the Company shall be closed and no transfer of Company
Common Stock shall thereafter be made.
2.5 Dividends. No dividends or other distributions that are declared
after the Effective Time with respect to Gold Common Stock payable to holders of
record thereof after the Effective Time shall be paid to the Company
stockholders entitled to receive certificates representing Gold Common Stock
until such stockholders surrender to the Exchange Agent their certificates
representing Company Common Stock. Upon such surrender, there shall be paid to
the stockholder in whose name the certificates representing such Gold Common
Stock shall be issued any dividends which shall have become payable with respect
to such Gold Common Stock between the Effective Time and the time of such
surrender, without interest. After such surrender there shall also be paid to
the stockholder in whose name the certificates representing such Gold Common
Stock shall be issued any dividend on such Gold Common Stock that shall have (a)
a record date subsequent to the Effective Time and prior to such surrender and
(b) a payment date after such surrender, and such payment shall be made on such
payment date. In no event shall the stockholders entitled to receive such
dividends be entitled to receive interest on such dividends.
2.6 Dissenting Shares. Notwithstanding anything to the contrary
contained in this Agreement, to the extent appraisal rights are available to the
Company's stockholders pursuant to the OGCA, any shares of Company Common Stock
held by a person who objects to the Merger, whose shares of Company Common Stock
were not entitled to vote or were not voted in favor of the Merger and who
complies with all of the provisions of the OGCA concerning the rights of such
person to dissent from the Merger and to require appraisal of such person's
shares of Company Common Stock and who has not withdrawn such objection or
waived such rights prior to the Closing Date ("Company Dissenting Shares") shall
not be converted pursuant to Section 2.2 but shall become the right to receive
such consideration as may be determined to be due to
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the holder of such Company Dissenting Shares pursuant to the OGCA, including, if
applicable, any costs determined to be payable by Sub or the Company to the
holders of the Company Dissenting Shares pursuant to the OGCA. Notwithstanding
the foregoing, as set forth hereinafter, the obligation of Gold to close on this
transaction is contingent upon the total required cash payments due Company's
stockholders totaling less than 5% of the total consideration being provided by
Gold as consideration for this Merger.
2.7 Adjustments. If at any time during the period between the date
hereof and the Effective Time, any change in the outstanding shares of Gold
Common Stock is effected by reason of any reclassification, recapitalization,
stock split or combination, exchange or readjustment of shares, or any stock
dividend thereon with a record date during such period, the Common Stock
Conversion Ratio shall be adjusted on a pro rata basis.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF GOLD AND SUB
Except as set forth on the Gold Disclosure Schedule attached hereto,
Gold and Sub, jointly and severally, hereby represent and warrant to the Company
and the Stockholders of the Company as follows:
3.1 Organization and Authority.
(a) Gold is a corporation duly organized, validly existing and
in good standing under the laws of the State of Kansas with the corporate power
and authority to own its properties and conduct its business as it is now being
conducted and is duly registered as a bank holding company under the provisions
of the Bank Holding Company Act of 1956, as amended.
(b) Sub is a corporation duly organized, validly existing and
in good standing under the laws of the State of Kansas. Sub has the corporate
power to enter into and perform this Agreement and the execution, delivery and
performance of this Agreement by Sub and the consummation by Sub of the
transactions contemplated hereby have been duly authorized by its Board of
Directors and by Gold as the sole stockholder of Sub.
3.2 Authority. Gold has all requisite corporate power and authority to
enter into this Agreement, and to consummate the transactions contemplated
hereby with the exception of Gold stockholder approval as contemplated by
Section 3.3 below. The execution, delivery and performance of this Agreement,
and the consummation by Gold of the transactions contemplated hereby, have been
duly authorized by all necessary corporate action on the part of Gold. This
Agreement has been duly executed and delivered by Gold, and assuming due
execution and delivery by Company, constitutes a valid and binding obligation of
Gold, enforceable against Gold in accordance with its terms subject to
applicable conservatorship, receivership, bankruptcy, insolvency and similar
laws affecting creditors' rights and remedies generally, and subject, as to
enforceability, to general principles of equity (including without limitation
specific performance), whether applied in a court of law or a court of equity.
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3.3 Gold Stockholder Approval. The Board of Directors of Gold will
direct that this Agreement and the transactions contemplated hereby be submitted
to Gold's stockholders for approval at a special meeting of such stockholders
and, except for approval of this Agreement by the majority of the outstanding
shares of Gold Common Stock entitled to vote with respect to such matter, no
other stockholder action is necessary to consummate the transactions
contemplated hereby.
3.4 No Violations. Subject to approval by the appropriate regulatory
agencies, the execution, delivery and performance of this Agreement by Gold and
Sub do not, and the consummation of the transactions contemplated hereby will
not, constitute (i) a breach or violation of, or a default under, any law, rule
or regulation or any judgment, decree, order, governmental permit or license, or
agreement, indenture or instrument of Gold or any subsidiary of Gold or to which
Gold or any subsidiary (or any of their respective properties) is subject, (ii)
a breach or violation of, or a default under, the Articles of Incorporation, or
Bylaws of Gold or any subsidiary of Gold or (iii) a breach or violation of, or a
default under (or an event which with due notice or lapse of time or both would
constitute a default under), or result in the termination of, accelerate the
performance required by, or result in the creation of any lien, pledge, security
interest, charge or other encumbrance upon any of the properties or assets of
Gold or any subsidiary of Gold under any of the terms, conditions or provisions
of any note, bond, indenture, deed of trust, loan agreement or other agreement,
instrument or obligation to which Gold or any subsidiary of Gold is a party, or
to which any of their respective properties or assets may be bound or affected.
3.5 Consents. Except for approvals of the appropriate regulatory
agencies and such filings and registrations as are required under federal and
state securities and Blue Sky laws, no filing or registration with, or
authorization, consent or approval of, any public body or authority is necessary
for the consummation by Gold of the Merger or the other transactions
contemplated by this Agreement.
3.6 Capital Stock of Gold. Gold has authorized capital stock consisting
of (a) 25,000,000 shares of common stock, $1.00 par value ("Gold Common Stock"),
of which 11,124,801 shares were issued and outstanding on August 21, 1998, (b)
$28.75 Million of 8.75% Junior Subordinated Deferrable Interest Debentures and
(c) 25,000,000 shares of preferred stock, none of which are issued and
outstanding. All of the issued and outstanding shares of Gold Common Stock are
validly issued, fully paid and non-assessable. Holders of Gold Common Stock do
not have any preemptive rights with respect to the issuance of additional
authorized shares of Gold Common Stock.
3.7 Government Regulation. Gold and its subsidiaries hold all material
licenses, certificates, permits, franchises and rights from all appropriate
federal, state or other public authorities necessary for the lawful conduct of
their respective businesses and ownership of their respective properties. Gold
and its subsidiaries have substantially complied with all material federal,
state and local statutes, regulations, ordinances or rules applicable to the
ownership of their respective properties or the conduct of their respective
businesses.
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3.8 Financial Statements. The consolidated balance sheets of Gold as of
December 31, 1997, the consolidated statement of earnings for the year ended
December 31, 1997, and all related schedules and notes to the foregoing, all of
which have been delivered to Company, have been audited by KPMG Peat Marwick
LLP, independent certified public accountants. All of the foregoing financial
statements, together with the unaudited financial statements of Gold dated as of
June 30, 1998 and for the period then ending, have been prepared in accordance
with generally accepted accounting principles and practices which were applied
on a consistent basis, and present fairly in all material respects the financial
position, results of operation and changes in financial position of Gold as of
their respective dates and for the periods indicated. From June 30, 1998 until
the date hereof, there has been no material adverse change in the financial
condition, properties, assets, liabilities, business or prospects of Gold.
3.9 SEC Reports. Gold's Report on Form 10-K for the year ended December
31, 1997, filed with the Securities and Exchange Commission and all subsequent
reports and proxy statements filed by Gold thereafter pursuant to Section 13(a)
or 14(a) of the Securities Exchange Act of 1934 do not and will not contain a
misstatement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not misleading as of
the time the document was filed. Since the filing of such Report on Form 10-K,
no other report, proxy statement, or other document has been required to be
filed by Gold pursuant to Section 13(a) or 14(a) of the Securities Exchange Act
of 1934 which has not been filed. Gold has delivered to Company the Form 10-K
for the fiscal year ended December 31, 1997 and unaudited financial statements
for the six months ended June 30, 1998.
3.10 Status of Gold Common Stock to be Issued. The shares of Gold
Common Stock into which the Company Common Stock are to be exchanged or
converted pursuant to this Agreement will be, when delivered as specified in
this Agreement, validly authorized and issued, fully paid and non-assessable,
and registered pursuant to an effective registration statement under the
Securities Act of 1933, as amended, or any successor federal statute and the
rules and regulations promulgated thereunder, all as the same shall be in effect
at the time (the "Securities Act").
3.11 Legal Proceedings. There are as of the date hereof no actions,
suits, claims, demands or other proceedings or investigations, either judicial
or administrative, pending or, to the best knowledge of Gold, threatened against
or affecting the properties, assets, rights or business of Gold or any
subsidiary of Gold or the right to carry on or conduct their business, nor are
there to the best knowledge of Gold any grounds therefor, which, if adversely
determined, would have a material adverse effect on the business, operations,
properties or financial condition of Gold. There are as of the date hereof no
actions, suits, claims, demands or other proceedings or investigations, either
judicial or administrative, pending or, to the best knowledge of Gold,
threatened which will or could prevent or interfere with the consummation of the
transactions contemplated by this Agreement.
3.12 Taxes. Gold and Sub have timely filed all federal, state and local
tax returns required to be filed by them, and have timely paid and discharged
any taxes due in connection with all such tax returns. To the best knowledge of
Gold, the liability for taxes set forth on each such tax return adequately
reflects the taxes due with respect to such returns. Neither the
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Internal Revenue Service nor any other taxing authority is now asserting, either
through audits, administrative proceedings, court proceedings or otherwise any
deficiency or claim for additional taxes against Gold or Sub or any subsidiary
of Gold. Neither Gold nor Sub has granted any waiver of any statute of
limitations with respect to, or any extension of a period for the assessments
of, any tax. There are no tax liens on any of the assets of Gold or Sub or any
subsidiary of Gold.
3.13 Defaults. Neither Gold nor any of its subsidiaries is in material
breach or material default under any material agreement or commitment to which
Gold or any of its subsidiaries is a party, or under any loan agreement, note,
security agreement, guarantee or other document pursuant to or in connection
with Gold's or any of its subsidiaries' extension of credit; and, to their
knowledge, there has not occurred any event which, after the giving of notice,
the lapse of time or otherwise, would constitute any such default under, or
result in any such breach of, any such agreement, commitment or extension of
credit.
3.14 Information Supplied. Gold will ensure that none of the
information supplied or to be supplied by Gold and Sub for inclusion or
incorporation by reference in (a) the Registration Statement (as defined in
Section 10.1) will, at the time the Registration Statement is filed with the
Securities and Exchange Commission (the "SEC") and at the time it becomes
effective under the Securities Act, contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary to make the statements therein not misleading, and (b) the proxy
statements of Gold and the Company will, at the date of mailing to the
respective stockholders of the Company and Gold and at the time of the
respective meetings of the stockholders of the Company and Gold to be held in
connection with the Merger, contain any untrue statement of a material fact or
omit to have stated a material fact required to be stated therein or necessary
in order to make the statements therein, in light of the circumstances under
which they were made, not misleading, other than information supplied by
Company.
3.15 Absence of Adverse Agreements. Neither Gold nor Sub nor any other
subsidiary of Gold is a party to any agreement or instrument or any judgment,
order or decree or any rule or regulation of any court or other governmental
agency or authority which materially and adversely affects or in the future may
have a material adverse effect on the financial condition, results or
operations, assets, business or prospects of Gold or Sub or any subsidiary of
Gold, taken as a whole.
3.16 Broker's Fees. Neither Gold nor Sub nor any of their respective
officers or directors has employed any broker or finder or incurred any
liability for any broker's fees, commissions or finder's fees in connection with
any of the transactions contemplated by this Agreement.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF COMPANY
Except as set forth on the Company Disclosure Schedule hereto, Company
hereby represents and warrants to each of Gold and Sub as follows:
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4.1 Organization and Good Standing.
(a) Company is a corporation duly organized, validly existing
and in good standing under the laws of the State of Oklahoma with the corporate
power and authority to own its properties and conduct its business as it is now
being conducted and is duly registered as a bank holding company under the Bank
Holding Company Act of 1956, as amended. The conduct of Company's business and
the ownership of its properties do not require Company to qualify as a foreign
corporation in any jurisdiction except where the failure to be so qualified
individually or in the aggregate would not materially and adversely affect the
business, operations, properties or financial condition of Company and its
subsidiary.
(b) Company has one subsidiary, Citizens Bank of Tulsa (the
"Bank"), which is an Oklahoma banking corporation duly organized, validly
existing and in good standing under the laws of the State of Oklahoma, with the
corporate power and authority to carry on its business as it is now being
conducted. Bank is duly qualified to do business in each jurisdiction in which
the conduct of its business requires such qualification except where the failure
to be so qualified individually or in the aggregate would not materially and
adversely affect the business, operations, properties or financial condition of
Company and/or Bank.
4.2 Authority. Company has all requisite corporate power and authority
to enter into this Agreement, and to consummate the transactions contemplated
hereby with the exception of Company stockholder approval as contemplated by
Section 4.3 below. The execution and delivery of this Agreement, and the
consummation of the transactions contemplated hereby have been duly authorized
by all necessary corporate action on the part of Company. This Agreement has
been duly executed and delivered by Company, and assuming due execution and
delivery by Gold, constitutes a valid and binding obligation of Company,
enforceable in accordance with its terms subject to applicable conservatorship,
receivership, bankruptcy, insolvency and similar laws affecting creditors'
rights and remedies generally, and subject, as to enforceability, to general
principles of equity (including without limitation specific performance),
whether applied in a court of law or a court of equity.
4.3 Company Stockholder Approval. The Board of Directors of Company
will direct, that this Agreement and the transactions contemplated hereby be
submitted to Company's stockholders for approval at a special meeting of such
stockholders and, except for approval of this Agreement by the majority of the
outstanding shares of Company Common Stock entitled to vote with respect to such
matter, no other stockholder action is necessary to consummate the transactions
contemplated hereby.
4.4 No Violations. Except for the approvals of the appropriate
regulatory agencies and such filings and registrations as are required under
federal and state securities and Blue Sky laws, the execution, delivery and
performance of this Agreement by Company do not, and the consummation of the
transactions contemplated hereby will not, constitute (i) a breach or violation
of, or a default under, any law, rule or regulation or any judgment, decree,
order, governmental permit or license, or agreement, indenture or instrument of
Company or Bank or to which Company or Bank (or any of their respective
properties) is subject, (ii) a breach or violation of, or a default under, the
Articles of Incorporation, Bylaws of Company or Bank or
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(iii) a breach or violation of, or a default under (or an event which with due
notice or lapse of time or both would constitute a default under), or result in
the termination of, accelerate the performance required by, or result in the
creation of any lien, pledge, security interest, charge or other encumbrance
upon any of the properties or assets of Company or Bank under any of the terms,
conditions or provisions of any note, bond, indenture, deed of trust, loan
agreement or other agreement, instrument or obligation to which the Company or
Bank is a party, or to which any of their respective properties or assets may be
bound or affected.
4.5 Consents. Except for the approvals of the appropriate regulatory
agencies and such filings and registrations as are required under federal and
state securities and Blue Sky laws, no filing or registration with, or
authorization, consent or approval of, any public body or authority is necessary
for the consummation by Company of the Merger or the other transactions
contemplated by this Agreement.
4.6 Capitalization. Company has authorized capital stock consisting of
50,000 shares of common stock, par value $1.00 per share, of which 25,000 shares
are issued and outstanding, and no shares held as treasury stock. All of the
issued and outstanding shares of Company Common Stock are validly issued, fully
paid and non-assessable. There are no outstanding warrants, options,
subscriptions, contracts, rights or other agreements or commitments obligating
Company to issue or sell any additional shares of Company Common Stock nor are
there outstanding any securities, debts, obligations or rights which are
convertible into or exchangeable for shares of Company Common Stock. The
authorized capital stock of Bank consists of 125 shares of common stock,
$8,000.00 par value per share ("Bank Stock"), of which 125 shares have been duly
and validly issued, are fully paid, and, are owned directly by Company. Such
shares are free and clear of all liens, encumbrances, equities or claims. There
are no outstanding warrants, options, subscriptions, contracts, rights or other
arrangements or commitments obligating Company or Bank to issue or sell any
additional shares of Bank's capital stock nor are there outstanding any
securities, debts, obligations or rights which are convertible into or
exchangeable for shares of capital stock or any other equity security of Bank.
4.7 Government Regulation. Company and Bank hold all material licenses,
certificates, permits, franchises and rights from all appropriate federal, state
or other public authorities necessary for the lawful conduct of their respective
businesses and ownership of their respective properties. Company and Bank have
substantially complied with all material federal, state and local statutes,
regulations, ordinances or rules applicable to the ownership of their respective
properties or the conduct of their respective businesses.
4.8 Financial Statements. The Company has previously delivered to Gold
and Sub balance sheets for the Company as of June 30, 1998, December 31, 1997
and December 31, 1996, the statements of earnings for the period ended June 30,
1998 and for the years ended December 31, 1997 and December 31, 1996, the
balance sheet and statement of earnings for the Bank as of June 30, 1998 and for
the period then ending, and all related schedules and notes to the foregoing
(collectively the "Company Financial Statements"). Although such statements have
not been certified as of the date hereof by independent certified public
accountants, the Company Financial Statements have been prepared (except for the
absence of notes thereto) in accordance with generally accepted accounting
principles and practices required by applicable
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bank regulatory agencies that were applied on a consistent basis, and present
fairly in all material respects the financial position, results of operation and
changes of financial position of Company or the Bank, as applicable, as of their
respective dates and for the periods indicated. Company has no material
liabilities or obligations of a type which would be included in a balance sheet
prepared in accordance with regulatory accounting principles whether related to
tax or non-tax matters, accrued or contingent, due or not yet due, liquidated or
unliquidated, or otherwise, except as and to the extent disclosed or reflected
in the balance sheet of Company as of June 30, 1998, or incurred since June 30,
1998, in the ordinary course of business.
4.9 Legal Proceedings. There are as of the date hereof no actions,
suits, claims, demands or other proceedings or investigations, either judicial
or administrative, pending or, to the best knowledge of Company, threatened
against or affecting the properties, assets, rights or business of Company or
Bank or the right to carry on or conduct their respective businesses, nor are
there to the best knowledge of Company any grounds therefor, which, if adversely
determined, would in the aggregate materially adversely affect the business,
operations, properties or financial condition of Company or Bank. There are as
of the date hereof no actions, suits, claims, demands or other proceedings or
investigations, either judicial or administrative, pending or, to the best
knowledge of Company, threatened which will or could prevent or interfere with
the consummation of the transactions contemplated by this Agreement. The Company
agrees to advise Gold and Sub if at any time between the date hereof and the
Effective Time, any legal proceeding as described in this paragraph is initiated
or, to the best knowledge of Company, threatened.
4.10 Title to Assets. Except for securities pledged to secure public
funds deposits or subject to customer repurchase agreements entered into in the
ordinary course of business, and leased property discussed below, Company and
Bank have good and marketable title to and possession of all of their respective
real and personal properties and assets, in each case free and clear of any
liens, restrictions, encumbrances, rights, title and interests of others, except
for other real estate owned and except as reflected on their respective
financial statements and except for the lien of current taxes, covenants and
restrictions of record, and other minor imperfections of title not affecting
marketability, which liens, covenants, restrictions and imperfections do not
materially affect the value of such property and do not interfere with the use
made of such property by Company and Bank. The real and personal properties and
assets held under lease by Company and Bank are held by them under valid,
subsisting and enforceable leases with such exceptions as do not interfere with
the use made of such properties and assets by Company and Bank. No consent is
necessary under the terms of any such lease in connection with the consummation
of the transactions contemplated hereby.
4.11 Undisclosed Liabilities. As of the date hereof, neither Company
nor Bank have any debt, liability or obligation (whether accrued, contingent,
absolute or otherwise) of the nature which would customarily be included in a
corporate balance sheet or the notes thereto prepared in accordance with
regulatory accounting principles that is not reflected or reserved against in
the Company Financial Statements or was not incurred in the ordinary course of
their business.
4.12 Taxes. The Company and Bank have timely filed all tax returns
required to be filed by them, and the Company and Bank have timely paid and
discharged all taxes due in connection
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with or with respect to the filing of such tax returns and have timely paid all
other taxes as are due, except such as are being contested in good faith by
appropriate proceedings and with respect to which the Company is maintaining
reserves adequate for their payment. To the best knowledge of the Company, the
liability for taxes set forth on each such tax return adequately reflects the
taxes required to be reflected on such tax return. Neither the IRS nor any other
governmental entity or taxing authority or agency is now asserting, either
through audits, administrative proceedings, court proceedings or otherwise, or,
to the best of Company's knowledge, threatening to assert against Company or
Bank any deficiency or claim for additional taxes. Neither the Company nor Bank
has granted any waiver of any statute of limitations with respect to, or any
extension of a period for the assessment of, any tax. There are no tax liens on
any assets (excluding OREO properties) of the Company or Bank. Neither the
Company nor Bank has received a ruling or entered into an agreement with the
Internal Revenue Service or any other governmental entity or taxing authority or
agency.
4.13 Contracts. Neither Company nor Bank is party to or bound by any:
(a) employment contract or letter or other writing or oral
agreement relating to employment;
(b) bonus, deferred compensation, savings, profit sharing,
severance pay, pension or retirement plan or arrangement, except for the Plans
referenced in Section 4.16 hereof;
(c) material lease or license with respect to any property,
real or personal, whether Company or Bank is landlord or tenant, licensor or
licensee, involving a liability or obligation of Company or Bank as obligor in
excess of $5,000 on an annual basis;
(d) agreement, contract or indenture relating to the borrowing
of money by Company or any subsidiary, excluding deposit obligations,
obligations under certificates of deposit, letters of credit, items in the
process of collection, commitments to loan or discount, endorsements made for
collection and guarantees made in the ordinary course of business;
(e) agreement with any present or former officer, director
or stockholder of Company or Bank; or
(f) other contract, agreement or other commitment which is
material to the business, operations, property, prospects or assets or to the
condition, financial or otherwise, of Company or Bank or which involve a payment
by Company or Bank of more than $5,000 on an annual basis.
4.14 Regulatory Reports; Examinations. Company and Bank have timely
filed all material reports, registrations and statements, together with any
amendments required to be made with respect thereto, with all governmental or
regulatory authorities, agencies, courts, commissions or other entity
("Governmental Entity") and have paid all fees and assessments due and payable
in connection therewith. Except for normal examinations conducted by a
Governmental Entity in the regular course of the business of Company and Bank,
no Governmental Entity has initiated any proceeding or, to the best knowledge of
Company,
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investigation into the business or operations of Company or Bank. There is no
unresolved material violation, criticism, or exception by any Governmental
Entity with respect to any written report or statement relating to any
examinations of Company or Bank. Company has made available to Gold all reports
of examinations conducted by any Governmental Entity with respect to Company
and/or Bank, during the preceding three (3) years. Company will also make
available to Gold and Sub any subsequent reports of examination received from
any Government Entity between the date hereof and the Effective Time.
4.15 Conduct. From June 30, 1998 until the date hereof:
(a) There has been no material adverse change in the financial
condition of, or in the properties, assets, liabilities, rights or business,
taken as a whole, of Company or Bank or in the relationship of Company or Bank
with respect to their employees, creditors, suppliers, distributors, customers
or others with whom they have business relationships ("Material Adverse
Effect").
(b) The business affairs of Company and Bank have been
conducted and carried on only in their ordinary and regular course of business,
and Company and Bank have not incurred or become subject to any liabilities or
obligations other than those incurred in their ordinary course of business,
those incurred pursuant to existing contracts included on the Company Disclosure
Schedule and those incurred pursuant to commitments permitted hereby.
(c) Neither Company nor Bank have entered into any employment
contract or agreement of any nature with any director, officer or salaried
employee, paid any or made any accrual or arrangement for payment of bonuses or
special compensation of any kind or any severance or termination pay to any of
their officers, employees or directors, increased the rate of compensation, if
any, or instituted or made any material increase in any officer's, employee's or
director's welfare, retirement or similar plan or arrangement, other than merit
increases made in accordance with past practices and procedures.
4.16 Compliance with ERISA. Neither Company nor Bank has established,
maintained or contributed at any time during the five-year period ending as of
the Effective Time to any employee benefit plan (as defined in Sections 3(3) or
3(37) of the Employment Retirement Income Security Act of 1974 ("ERISA")) or any
other plan with respect to which any governmental filings are required, except
for the plans listed on the Company Disclosure Schedule (collectively, the
"Plans"). A true and accurate copy of each of the Plans, any related trust
agreements and each of the amendments thereto has been provided to Gold together
with (i) all determination letters received in respect of any qualified plans,
and (ii) all required reports and supporting schedules filed with any government
agency in respect of the Plans for the three most recent years ending on or
before the date hereof. To Company's knowledge as sponsor of the Plans, the
Plans and each fiduciary (as defined in Section 3(21) of ERISA) of the Plans are
in compliance in all material respects with all applicable requirements
(including nondiscrimination requirements in effect as of the date hereof) of
the Internal Revenue Code of 1986 ("Code"), including, but not limited to,
Sections 79, 105, 106, 125, 401, 501, and 4975 of the Code. For purposes of this
Section 4.16, noncompliance with the Code or ERISA is material if such
noncompliance could have a Material Adverse Effect on the condition of one or
more of the
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Plans or of Company or Bank, either as of the Effective Time or upon discovery
of the noncompliance. To Company's knowledge as sponsor of the Plans, all
required contributions to the Plans through the date hereof have been made. To
Company's knowledge, Company and Bank (each with respect to the Plans), as well
as the Plans, have no material current or threatened liability of any kind to
any person, including but not limited to any government agency, as of the date
hereof, other than for the payment of benefits in the ordinary course.
4.17 Defaults. Neither Company nor Bank is in material breach or
material default under any material agreement or commitment to which the Company
or Bank is a party, or under any loan agreement, note, security agreement,
guarantee or other document pursuant to or in connection with the Company's or
Bank's extension of credit; and to Company's knowledge, there has not occurred
any event which, after the giving of notice, the lapse time or otherwise, would
constitute any such default under, or result in any such breach of, any such
agreement, commitment or extension of credit.
4.18 Insurance. Complete and correct copies of all material policies of
fire, product or other liability, workers' compensation and other similar forms
of insurance owned or held by Company and Bank have been delivered or made
available to Gold. Subject to expirations and renewals of insurance policies in
the ordinary course of business, all such policies are in full force and effect,
all premiums with respect thereto covering all periods up to and including the
date as of which this representation is being made have been paid (other than
retrospective premiums which may be payable with respect to worker's
compensation insurance policies), and no notice of cancellation or termination
has been received with respect to any such policy. Such policies are valid and
enforceable policies. To the best knowledge of Company, the insurance policies
to which Company or Bank are parties are sufficient for compliance with all
material requirements of law and all material agreements to which Company or
Bank are parties and will be maintained by Company and Bank until the Effective
Time. Neither Company nor Bank has been refused any insurance with respect to
any material assets or operations, nor has coverage been limited in any respect
material to their operations by any insurance carrier to which they have applied
for any such insurance or with which they have carried insurance during the last
five (5) years.
4.19 Absence of Adverse Agreements. Neither the Company nor Bank is a
party to any agreement or instrument or any judgment, order or decree or any
rule or regulation of any court or other governmental agency or authority which
materially and adversely affects or is reasonably likely to result in a Material
Adverse Effect on the financial condition, results of operations, assets,
business or prospects of the Company or Bank, taken as a whole.
4.20 Internal Controls and Records. The Company and Bank maintain books
of account which accurately and validly reflect, in all material respects, all
loans, mortgages, collateral and other business transactions and maintain
accounting controls sufficient to ensure that all such transactions are (a) in
all material respects, executed in accordance with its management's general or
specific authorization, and (b) recorded in conformity with generally accepted
accounting principles. The Company has furnished to Gold all of Company's and
Bank's written internal policies and procedures that are identified on the
Company Disclosure Schedule.
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4.21 Loans. (a) Bank is not a party to any written or oral loan
agreement, note or borrowing arrangement which has been classified as
"substandard", "doubtful," "loss," "other loans especially mentioned" or any
comparable classifications by Company or Bank or banking regulators except as
previously disclosed to Gold; (b) neither Company nor Bank is a party to any
written or oral loan agreement, note, or borrowing arrangement, including any
loan guaranty, with any director or executive officer of Company or Bank, or any
person, corporation or enterprise controlling, controlled by or under common
control with any of the foregoing; (c) to the best knowledge of Company neither
Company nor Bank is a party to any written or oral loan agreement, note or
borrowing arrangement in violation of any law, regulation or rule of any
governmental authority.
4.22 Environmental Laws. To the best knowledge of the Company: (i) the
operations of Company and Bank comply in all material respects with all
applicable past and present federal, state and local environmental statutes and
regulations and neither the condition of any property owned by Company or Bank
nor the operation of the business of any of such entities violates in all
material respects any applicable federal, state or local environmental statute
or regulation; (ii) none of the operations of Company or Bank is subject to any
judicial or administrative proceeding alleging the violation of any federal,
state or local environmental health or safety statute or regulation nor is it
the subject of any claim alleging damages to health or property pursuant to
which the Company or Bank may be liable; (iii) none of the operations of nor any
of the properties owned by Company or Bank is the subject of any federal, state
or local investigation in evaluating whether any remedial action is needed to
respond to a release or threatened release of any hazardous waste or substance
from whatever source; (iv) no condition or event has occurred which, with notice
or the passage of time or both, would constitute a violation of any federal,
state or local environmental law and at no time has the Company or Bank stored
or used any pollutants, contaminants or hazardous or toxic waste, substances or
materials on or at any location owned by Company or Bank; (v) there are no
underground storage tanks now or heretofore located on any real property owned
by Company or Bank; (vi) neither Company nor Bank has ever been notified by
either a federal, state or local governmental authority, or any private party,
that Company or Bank is a potentially responsible party for remedial costs spent
addressing the release, or threat of a release, of a hazardous substance and to
the environment pursuant to the Comprehensive Environmental Response,
Compensation or Liability Act, 42 U.S.C. ▇▇.▇▇. 9601, et seq. or any
corresponding state law.
Gold may obtain at its option and expense an environmental audit of all
properties and assets of Company and Bank whether directly owned or classified
as other real estate owned. Such environmental audit shall constitute a part of
the due diligence process, should Gold choose to pursue it, and if Gold
determines in its sole discretion that such environmental audit reflects the
potential of a material environmental problem with respect to any of the
properties or assets of Company or Bank, then Gold may deem the due diligence
unsatisfactory and terminate this Agreement under the terms of Section 9.1
hereinafter.
4.23 Broker's Fees. Neither Company nor Bank nor any of their
respective officers or directors has employed any broker or finder or incurred
any liability for any broker's fees, commissions or finder's fees in connection
with any of the transactions contemplated by this Agreement.
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4.24 Labor Matters. To the best knowledge of Company, (a) Company and
Bank are in compliance in all material respects with all applicable laws
respecting employment and employment practices, terms and conditions of
employment and wages and hours, and are not engaged in any unfair labor
practice; (b) there is no unfair labor practice complaint against Company or
Bank pending before the National Labor Relations Board; (c) there is no labor
strike, dispute, slowdown, representation campaign or work stoppage actually
pending or threatened against or affecting Company or Bank; (d) no grievance or
arbitration proceeding arising out of or under collective bargaining agreements
is pending and no claim therefor has been asserted against Company or Bank; and
(e) neither Company nor Bank is experiencing any material work stoppage.
4.25. Information Supplied. None of the information supplied or to be
supplied by Company or Bank for inclusion or incorporation by reference in (i)
the Registration Statement will, at the time the Registration Statement is filed
with the SEC and at the time it becomes effective under the Securities Act,
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements therein
not misleading, and (ii) the proxy statements of Gold and the Company will, at
the date of mailing to the respective stockholders of Gold and the Company and
at the times of the respective meetings of stockholders of Gold and the Company
to be held in connection with the Merger, contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading, other than information
supplied by Gold or Sub.
4.26 Full Disclosure. No statement contained in any document,
certificate, or other writing furnished or to be furnished by or at the
direction of Company or Bank to Gold in, or pursuant to the provisions of, this
Agreement contains or shall contain any untrue statement of a material fact or
omits or shall omit to state any material fact necessary, in light of the
circumstances under which it was made, in order to make the statements herein or
therein not misleading.
ARTICLE V
COVENANTS OF COMPANY
5.1 Affirmative Covenants of the Company. Unless the prior written
consent of Gold shall have been obtained, and which consent will be given or
denied within five (5) business days of receipt of written request for such
consent, and except as otherwise expressly contemplated herein, the Company
shall and shall cause Bank to (i) operate its business only in the usual,
regular, and ordinary course; (ii) preserve intact its business organization and
assets and maintain its rights and franchises; (iii) maintain as valid and
enforceable all policies of insurance as referenced in Section 4.18 herein; and
(iv) take no action which would (a) materially adversely affect the ability of
any party to obtain any consents required for the transactions contemplated
hereby, (b) would prevent the transactions contemplated hereby, including the
Merger, from qualifying as a reorganization within the meaning of Section 368(a)
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of the Code, or (c) materially adversely affect the ability of any party to
perform its covenants and agreements under this Agreement.
5.2 Negative Covenants of the Company. Except as specifically permitted
by this Agreement or as disclosed on the Company Disclosure Schedule, from the
date of this Agreement until the earlier of the Effective Time or the
termination of this Agreement, the Company covenants and agrees that it will not
do or agree to commit to do, or permit Bank to do or agree to commit to do, any
of the following without the prior written consent of Gold, which consent shall
not be unreasonably withheld and which consent will be given or denied within
three (3) business days of receipt of written request for such consent:
(a) make any single loan (or series of loans to the same or
related entities or persons) or any commitment (verbal or written) for a loan
(or series of commitments to the same or related entities or persons) in an
amount greater than $500,000.00 other than renewals of existing loans or
commitments to loan;
(b) purchase or invest in any securities, other than U.S.
government obligations or other securities backed by the full faith and credit
of the United States having a maturity of not more than two years from the date
of purchase;
(c) amend or adopt any employee benefit plan or grant any
increase in the rates of pay of their employees or any increase in the
compensation payable or to become payable, if any, to any director, officer,
employee or agent thereof, or contribute to any pension plan or otherwise
increase in any amount the benefits or compensation of any such directors,
officers or employees of Company or Bank under any pension plan or other
contract or commitment except for merit increases in accordance with past
practices;
(d) make any capital expenditure or enter into any material
contract or commitment (except loan commitments as permitted in Subparagraph (a)
of this Section 5.2); involving an obligation or commitment in excess of $15,000
or engage in any transaction not in their usual and ordinary course of business
and consistent with past practices;
(e) except as set forth in Section 7.6 hereinafter, declare or
pay any dividend or make any other distribution in respect of any capital stock
of Company or Bank, split, combine or reclassify any shares of its capital stock
or, directly or indirectly, redeem, purchase or otherwise acquire any share of
the capital stock of the Company or Bank;
(f) amend the Articles of Incorporation or Bylaws of either of
the Company or Bank or make any change in the authorized, issued or outstanding
capital stock (or any change in the par value thereof) of Company or Bank;
(g) acquire or purchase any assets of or make any investment
in any financial institution other than the purchase of loans or participations
therein in the ordinary course of business, but subject to Section 5.2(a);
(h) enter into any new line of business;
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(i) acquire or agree to acquire, by merging or consolidating
with, or by purchasing a substantial equity interest in or a substantial portion
of the assets of, or by any other manner, any business or any corporation,
partnership, association or other business organization or division thereof, or
otherwise acquire any assets, which would be material, individually or in the
aggregate, to Company or Bank, other than in connection with foreclosures,
settlements in lieu of foreclosure or troubled loan or debt restructuring in the
ordinary course of business consistent with prudent banking practices;
(j) take any action that is intended or may reasonably be
expected to result in any of its representations and warranties set forth in
this Agreement being or becoming untrue in any material respect, or in any of
the conditions to the Merger set forth in Article VII not being satisfied, or in
a violation of any provisions of this Agreement except, in every case, as may be
required by applicable law;
(k) change its methods of accounting in effect on the date
hereof, except as required by changes in generally accepted accounting
principles ("GAAP") or regulatory accounting principles;
(l) other than activities in the ordinary course of business
consistent with prior practice, sell, lease, encumber, assign or otherwise
dispose of any of its material assets or properties;
(m) file any application to relocate or terminate the
operations of any banking office;
(n) make any equity investment or commitment to make such an
investment in real estate or in any real estate development project, other than
in connection with foreclosures, settlements in lieu of foreclosure or troubled
loan or debt restructuring in the ordinary course of business consistent with
prudent banking practices;
(o) create, renew, amend or terminate or give notice of a
proposed renewal, amendment or termination of, any material contract, agreement
or lease for goods, services or office space to which the Company or Bank is a
party or by which the Company or Bank or their respective properties is bound;
or
(p) make any new loan or new extension of credit, or commit to
make any such loan or extension of credit, to any director or officer of the
Company or Bank without giving Gold five (5) days' notice in advance of the
Company's or Bank's approval of such loan or extension of credit or commitment
relating thereto.
(q) cause, or allow, on the Closing Date, the reserve for loan
and lease loss of Bank to be less than $1,591,847 or the total indebtedness of
the Company to exceed $887,500, as determined on the basis of the June 30, 1998
financial statements of the Bank and the Company delivered to Gold.
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5.3 Inspection. Between the date hereof and the Closing Date and upon
reasonable notice, Gold and its authorized representatives shall be permitted
full access during regular business hours to all properties, books, employees,
records, contracts and documents of Company and Bank. The Company shall furnish
to Gold and its authorized representative all information with respect to the
affairs of Company and Bank as Gold may reasonably request.
5.4 Financial Statements and Call Reports. From and after the date
hereof through the Closing Date, Company shall deliver to Gold monthly reports
of condition and income statements of Bank and shall deliver to Gold copies of
the call reports for Bank as filed with any regulatory agency promptly after
such filing.
5.5 Right to Attend Meetings. Company and Bank shall allow a
representative of Gold to attend as an observer all meetings of the Board of
Directors of Company and Bank and all meetings of the committees of each such
board, including, without limitation, the audit and executive committees thereof
and any other meetings of Company or Bank officials at which policy is being
made; provided, however, that representatives of Gold shall not be allowed to
attend any meeting or portion of any meeting at which Company or Bank officials
discuss this Agreement and the transactions contemplated hereby. Company and
Bank shall give reasonable notice to Gold of any such meeting and, if known, the
agenda for or business to be discussed at such meeting. Company and Bank shall
provide to Gold all information provided to the directors on all such boards and
committees in connection with all such meetings or otherwise provided to the
directors and shall provide any other financial reports or other analyses
prepared for senior management of Company or Bank.
5.6. Data Processing. Prior to the Effective Time the Company shall
cooperate with Gold in taking those planning actions necessary to be in a
position to convert its data processing procedures and formats to procedures and
formats used by Gold as soon as practicable after the Effective Time. All such
data processing conversion shall be at Gold's expense. Gold shall provide such
assistance and consultation as Company may reasonably require in such planning
process.
5.7 No Solicitation. Neither Company nor Bank nor any affiliates,
associates, agents, or others acting for or on behalf of Company or Bank shall,
directly or indirectly, make, encourage, facilitate, solicit, assist or initiate
any inquiry or proposal, or participate in any negotiations with, or provide any
information to, any corporation, partnership, agent, attorney, financial
adviser, person, or other entity or group (other than (a) Gold, Sub, an
affiliate or associate of Gold or Sub or an officer, employee or other
authorized representative of Gold, Sub or such affiliate or associate or (b) the
Company's counsel, accountants and financial adviser solely for use in
connection with the transactions contemplated hereby) relating to any (i)
liquidation, dissolution, recapitalization, merger or consolidation of the
Company or Bank, (ii) sale of a significant amount of assets of the Company or
Bank, (iii) purchase or sale of shares of capital stock of the Company or Bank,
or (iv) any similar transactions involving Company or Bank, other than the
transactions contemplated by this Agreement. Company shall immediately cease and
cause to be terminated any and all such contacts and negotiations with respect
to any such transaction. Company shall immediately inform Gold and Sub of any
inquiry, proposal or request for
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information (including the terms thereof and the person making such inquiry)
which it may receive in respect of such a transaction.
5.8 Regulatory Approvals. Subject to the terms and conditions of this
Agreement, Company agrees to use its reasonable best efforts to cooperate with
Gold in Gold's efforts to secure as expeditiously as practicable all the
necessary approvals, regulatory or otherwise, needed to consummate the
transactions contemplated herein.
5.9 Information. Company shall provide such information and answer such
inquiries as Gold may reasonably request or make concerning the subject matter
of the representations and warranties of Company herein.
5.10 Tax Free Reorganization Treatment. Company shall not intentionally
take or cause to be taken any action, whether before or after the Effective
Time, which would disqualify the Merger as a tax free "reorganization" within
the meaning of Section 368(a) of the Code.
5.11 Accounting Matters. Neither the Company nor any of its
"affiliates" (for purposes of pooling of interests accounting treatment) shall
take or cause to be taken any action, whether before or after the Effective
Time, that would prevent the accounting for the transactions contemplated by the
Agreement as a pooling of interests in accordance with GAAP and applicable SEC
regulations.
ARTICLE VI
COVENANTS OF GOLD AND SUB
6.1 Regulatory Approvals. Subject to the terms and conditions of this
Agreement, Gold and Sub agree to use their reasonable best efforts to secure as
expeditiously as practicable all the necessary approvals, regulatory or
otherwise, needed to consummate the transactions contemplated herein and agree
to exercise best efforts to file applications relating to such approvals within
thirty (30) days from the date hereof or as soon thereafter as is reasonably
possible. Gold and Sub shall provide to Company's counsel a copy of all
applications for such approvals and shall keep such counsel or the Company
advised of the status of the regulatory review process.
6.2 Information. Gold and Sub shall provide such information and answer
such inquiries, as the Company may reasonably request or make concerning the
subject matter of the representations and warranties of Gold and Sub herein.
6.3 Tax Free Reorganization Treatment. Neither Gold nor Sub shall
intentionally take or cause to be taken any action, whether before or after the
Effective Time, which would disqualify the Merger as a tax free "reorganization"
within the meaning of Section 368(a) of the Code.
6.4 Employee Benefits. Employees of Company or Bank shall be eligible
to participate in all Gold employee welfare benefit plans in accordance with
their terms, and for such purpose all service of such employees with the Company
and Bank shall be counted as service with Gold.
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6.5 Registration Rights Agreements. Gold will properly execute and date
as of the Closing Date the registration rights agreement, in substantially the
form of Exhibit 8.8 attached to this Agreement (the "Registration Rights
Agreement").
6.6 Ordinary Course. Gold and Sub shall carry on their respective
businesses in the usual, regular and ordinary course in all material respects,
in substantially the same manner as heretofore conducted, and shall use all
reasonable efforts to preserve intact their present lines of business, maintain
their rights and franchises and preserve their relationships with customers and
others having business dealings with them to the end that their ongoing
businesses shall not be impaired in any material respect at the Effective Time.
6.7 Governing Documents. Except to the extent required to comply with
their respective obligations hereunder, required by law or required by the rules
and regulations of NASDAQ, Gold and Sub shall not amend in any material respect
their respective articles of incorporation, by-laws or other governing
documents.
6.8 Acquisitions. Other than acquisitions in existing or related lines
of business of Gold the fair market value of the total consideration (including
the value of indebtedness or other liability acquired or assumed) for which does
not exceed $56,000,000 per acquisition and other than pending acquisitions,
Gold, shall not, and shall not permit its subsidiaries to, acquire or agree to
acquire by merging or consolidating with, or by purchasing a substantial equity
interest in or a substantial portion of the assets of, or by any other manner,
any business or any corporation, partnership, association or other business
organization or division thereof or otherwise acquire or agree to acquire any
assets (other than the acquisition of assets used in the ordinary course);
provided, however, that the foregoing shall not prohibit (x) internal
reorganizations or consolidations involving existing subsidiaries of Gold or (y)
the creation of new subsidiaries of Gold organized to conduct or continue
activities otherwise permitted by this Agreement.
ARTICLE VII
CONDITIONS PRECEDENT TO GOLD'S OBLIGATIONS
The obligations of Gold and Sub to consummate the transactions
hereunder shall be subject to the satisfaction on or before the Closing Date of
all of the following conditions, except such conditions as Gold or Sub may waive
in writing:
7.1 Representations, Warranties and Covenants. All representations and
warranties of Company contained in this Agreement shall be true and correct in
all material respects on and as of the Closing Date, except for changes
permitted by or contemplated by this Agreement and except to the extent that any
such representation or warranty is made solely as of a specified date. Company
shall have performed all agreements and covenants in all material respects
required by this Agreement to be performed on or prior to the Closing Date and
Gold shall have received a certificate signed by an executive officer of the
Company, dated the Closing Date, to the foregoing effect.
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7.2 Material Actions; Debts or Defaults. On the Closing Date, there
shall not be: (i) except as set forth on the Company Disclosure Schedule, any
actions, suits, claims, demands or other proceedings or investigations, either
judicial or administration, pending or, to the knowledge of Company or Bank,
threatened against or affecting the properties, assets, rights or business of
Company or Bank or the right to carry on or conduct their respective businesses
that, if adversely determined, would have a Material Adverse Effect; (ii) any
debt, liability or obligation of Company or Bank (whether accrued, contingent,
absolute or otherwise) required to be reflected in a corporate balance sheet or
the notes thereto that is not reflected or reserved against in their respective
financial statements or was not incurred in ordinary course of their respective
businesses; or (iii) any material breach or material default of Company or Bank
under any material agreement or commitment to which either is a party.
7.3 Adverse Changes. From the date hereof to the Closing Date, there
will have been no material adverse change in the financial condition of, or in
the properties, assets, liabilities, rights or business, taken as a whole, of
Company or Bank, and taking into account for this purpose the proceeds of any
applicable insurance.
7.4 Regulatory Authority Approval. Orders, consents and approvals in
form and substance reasonably satisfactory to Gold shall have been entered by or
obtained from the appropriate regulatory authorities authorizing consummation of
the transactions contemplated hereby pursuant to the provisions of the Bank
Holding Company Act and any other applicable federal or state banking regulatory
statute or rule, and no such order, consent or approval shall be conditioned or
restricted in any manner which in the reasonable judgment of Gold would
materially adversely affect the operations of or be unduly burdensome to Gold.
7.5 Litigation. At the Closing Date, there shall not be pending or
threatened litigation in any court or any proceeding by any governmental
commission, board or agency which Gold reasonably believes could reasonably
result in restraining, enjoining or prohibiting the consummation of this
Agreement.
7.6 Financial Measures. The parties agree that prior to the Closing
Date, the Company may make a dividend distribution to its stockholders subject
to the limitation that such distribution shall not exceed the federal and state
income taxes payable by the stockholders of the Company on the consolidated
earnings of Bank and Company for the period from July 1, 1998 through the
earlier of September 30, 1998 or Closing Date; provided, however, that for
purposes of determining the amount of tax payable by the Company's stockholders
on such earnings, the combined federal and state income tax shall not exceed
40%.
7.7 Approval by Stockholders. The stockholders of the Company and Gold
shall have duly approved this Agreement and the other transactions contemplated
hereby to the extent required by applicable requirements of law, the NASDAQ
Rules and the respective Articles of Incorporation and ByLaws of the Company and
Gold.
7.8 Tax Representations. Each stockholder of Company owning more than
10% of the outstanding Company Common Stock shall have made those
representations reasonably
A-22
requested by counsel and necessary to enable them to render the opinion
described in Section 7.11 hereof.
7.9 Affiliate Agreements. Each person who is an "affiliate" (for
purposes of Rule 145 under the Securities Act and for pooling-of-interests
accounting treatment) of the Company and Bank at the time this Agreement is
submitted to approval of the stockholders of the Company and Bank shall deliver
to Gold a letter in substantially the form set forth in Exhibit 7.9 (the
"Affiliate Letter").
7.10. Satisfactory Due Diligence. Representatives of Company and Bank
have cooperated with Gold, Sub and representatives of Gold and Sub in conducting
its due diligence in accordance with the terms of Section 5.3 above.
7.11 Federal Tax Opinion. Gold shall have received an opinion of
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ LLP, counsel to Gold ("Gold's Counsel"), in form
and substance reasonably satisfactory to Gold, dated the Closing Date, stating
that the Merger will be treated as a tax-free reorganization within the meaning
of Section 368(a) of the Code.
7.12 Opinion of Counsel. Gold shall have received an opinion of ▇▇▇▇▇ &
▇▇▇▇▇▇▇, ("Company's Counsel"), dated the Closing Date, in form and substance
reasonably satisfactory to Gold covering the matters set out in Exhibit 7.12
hereto.
7.13 Qualification for Pooling-of-Interest Treatment. Gold shall have
received an opinion from KPMG Peat Marwick LLP that this transaction will
qualify for pooling-of-interest accounting treatment and that all conditions
applicable thereto (including limitation of any cash consideration paid by Gold
hereunder and absence of any capital transactions involving any parties hereto)
have been met.
ARTICLE VIII
CONDITIONS PRECEDENT TO OBLIGATION
OF COMPANY AND BANK
The obligations of Company to consummate the transactions contemplated
hereunder shall be subject to satisfaction on or before the Closing Date of all
of the following conditions, except such conditions as Company may waive in
writing:
8.1 Representations, Warranties and Covenants. All representations and
warranties of Gold and Sub contained in this Agreement shall be true in all
material respects on and as of the Closing Date, except to the extent that any
such representation or warranty is made solely as of a specified date, and Gold
shall have performed all agreements and covenants in all material respects
required by this Agreement to be performed on or prior to the Closing Date, and
Company shall have received a certificate signed by an executive officer of
Gold, dated the Closing Date, to the foregoing effect.
8.2 Regulatory Authority Approval. Orders, consents and approvals in
form and substance reasonably satisfactory to Company shall have been entered by
or obtained
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from the appropriate regulatory authorities authorizing consummation of the
transactions contemplated by this Agreement pursuant to the provisions of the
Bank Holding Company Act and any other applicable federal or state banking
regulatory statute or rule.
8.3 Litigation. There shall not be pending or threatened litigation in
any court or any proceeding by any governmental commission, board or agency
which Company believes could reasonably result in restraining, enjoining or
prohibiting the consummation of the transactions contemplated by this Agreement.
8.4 Approval by Stockholders. The stockholders of the Company and Gold
shall have duly approved and adopted this Agreement, the Merger and the
transactions contemplated hereby to the extent required by applicable
requirements of law, the NASDAQ Rules and the respective Articles of
Incorporation and Bylaws of the Company and Gold.
8.5 Adverse Changes. From the date of this Agreement to the Closing
Date, there will have been no material adverse change in the financial
condition, properties, assets, liabilities, rights, business or prospects of
Gold.
8.6. Federal Tax Opinion. The Company shall have received, at Gold's
expense, an opinion of Gold's Counsel, addressed to the Company and its
stockholders in form and substance reasonably satisfactory to the Company and
Company's Counsel, dated the Closing Date, to the effect that the Merger will be
a tax-free reorganization under Section 368(a) of the Code and that to the
extent Company stockholders receive solely Gold Common Stock in exchange for
shares of Company Common Stock, such holders of Company Common Stock will
receive "tacked" holding periods and will incur no income tax liability.
8.7. Opinion of Counsel. Company shall have received, at Gold's
expense, an opinion of Gold's Counsel, dated the Closing Date, in form and
substance reasonably satisfactory to Company, covering the matters set out in
Exhibit 8.7 hereto.
8.8 Registration Rights Agreement. The Company shall have received the
Registration Rights Agreement properly executed and dated as of the Closing
Date.
ARTICLE IX
TERMINATION OF AGREEMENT; INDEMNIFICATION
9.1 Basis for Termination. Notwithstanding any other provision of this
Agreement, this Agreement and the transactions contemplated hereby may be
terminated at any time prior to the Closing Date:
(a) by mutual consent in writing of the parties hereto; or
(b) by Gold upon written notice to Company if any regulatory
approval of the transactions contemplated under the terms of this Agreement
shall be denied or if any
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such regulatory approval shall be conditioned or restricted in any manner which
in the reasonable judgment of Gold would materially adversely affect the
operations of or would be unduly burdensome to Gold; or
(c) by Gold upon written notice to Company, in the event that
the Board of Directors of the Company shall (i) have failed to recommend to its
stockholders the approval of the Merger and the transactions contemplated by
this Agreement, to the exclusion of any other 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 the acquisition of the Company or Bank or
the acquisition of a substantial equity interest in, or a substantial portion of
the assets of, the Company or Bank (an "Acquisition Proposal"), or (ii) have
resolved not to recommend to its stockholders the approval of the Merger, or
(iii) have affirmed, recommended or authorized entering into any other
Acquisition Proposal or other transaction involving a merger, share exchange,
consolidation or transfer of substantially all of the assets of the Company or
Bank, or (iv) failed to call and hold a special stockholders' meeting of the
Company for purposes of voting on the approval of the Merger and the
transactions contemplated hereby; or
(d) by Gold or Company (provided that the terminating party is
not then in material breach of any representation, warranty, covenant, or other
agreement contained in this Agreement) in the event the stockholders of Gold
fail to vote their approval of the matters relating to this Agreement and the
transactions contemplated hereby; or
(e) by Gold or Company in the event the stockholders of the
Company fail to vote their approval of the matters relating to this Agreement
and the transactions contemplated hereby; or
(f) by Gold or Company (provided that the terminating party is
not then in material breach of any representation, warranty, covenant, or other
agreement contained in this Agreement) if the other party has materially
breached this Agreement and has not cured such breach within the earlier of (i)
10 days after the nonbreaching party shall have given notice to the breaching
party of the existence of such breach or (ii) the Closing Date; or
(g) by Gold or Company (provided that the terminating party is
not then in material breach of any representation, warranty, covenant, or other
agreement contained in this Agreement) upon written notice to the other of any
other condition imposed for the benefit of the notifying party, other than the
approval of stockholders of the other entity, that shall not have been satisfied
or waived prior to the Closing Date; or
(h) by either Gold or Company if the Closing Date shall not
have occurred by December 31, 1998, unless Gold and Company agree in writing to
extend such deadline; provided that the terminating party is not then in
material breach of this Agreement; or
As used in this Section 9.1, actions contemplated as being taken by
Gold or the Company must be taken by their respective Board of Directors.
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9.2 Effect of Termination. Except as provided in Sections 11.1(b) and
(d), in the event of termination of this Agreement for any reason set forth in
Sections 9.1 (a), (b), (d) or (g), no party hereto shall have any liability to
the other of any nature whatsoever, including any liability for loss, damages or
expenses suffered or claimed to be suffered by reason thereof.
In the event Gold and Sub have performed all of their obligations
hereunder and all conditions precedent to the obligation of Company to close
have been met or waived in writing by Company, but Company fails or otherwise
refuses to close, then Gold shall be entitled to enforce the terms hereof by an
action seeking specific performance. Such right is not exclusive and shall not
preclude Gold from also pursuing an action to recover any and all damages
resulting from the Company's default hereunder.
All remedies available to Gold hereunder or by law are cumulative.
In the event Company has performed all of its obligations hereunder and
all conditions precedent to the obligations of Gold and Sub to close have been
met or waived in writing by Gold and Sub, but Gold and Sub fail or otherwise
refuse to close, then Company shall be entitled to enforce the terms hereof by
an action seeking specific performance. Such right is not exclusive and shall
not preclude Company from also pursuing an action to recover any and all damages
resulting from the default by Gold and Sub hereunder. All remedies available to
Company hereunder or by law are cumulative.
9.3 Amendment. This Agreement may be amended by the parties hereto, by
action taken or authorized by their respective Boards of Directors, at any time
before or after approval of the matters presented in connection with the Merger
by the stockholders of Company and Gold, but, after any such approval, no
amendment shall be made which by law requires further approval by such
stockholders without such further approval. This Agreement may not be amended
except by an instrument in writing signed on behalf of each of the parties
hereto.
9.4 Extension; Waiver. At any time prior to the Effective Time, the
parties hereto, by action taken or authorized by their respective Board of
Directors, may, to the extent legally allowed, (a) extend the time for the
performance of any of the obligations or other acts of the other parties hereto,
(b) waive any inaccuracies in the representations and warranties contained
herein or in any document delivered pursuant hereto and (c) waive compliance
with any of the agreements or conditions contained herein. Any agreement on the
part of a party hereto to any such extension or waiver shall be valid only if
set forth in a written instrument signed on behalf of such party.
9.5 Indemnification by Company. The Company agrees to indemnify and
hold harmless Gold, Sub and the officers, stockholders and directors of each
such entity from and against and in respect of any and all damages, losses,
diminution of value, or expenses suffered or incurred by any such party (whether
as a result of third party claims, demands, suits, causes of action,
proceedings, investigations, judgments or liabilities or otherwise), including
costs of investigation in defense and reasonable attorneys' fees assessed,
incurred or sustained by or against any of them, with respect to or arising out
of
A-26
any breach of the representations, warranties and/or covenants of the Company
set forth herein.
9.6 Indemnification by Gold. Gold agrees to indemnify, defend and hold
harmless Company and the Bank, and the stockholders, directors, officers,
employees, agents and representatives of each such entity, from and against and
in respect of any and all damages, losses, diminution of value, or expenses
suffered or incurred by Company (whether as a result of third party claims,
demands, suits, causes of action, proceedings, investigations, judgments,
liabilities or otherwise), including costs of investigation and defense and
reasonable attorneys' fees assessed or incurred or sustained by or against
Company or its stockholders, with respect to or arising out of any breach of the
representations, warranties and covenants of Gold and Sub set forth herein.
9.7 Limitations on Indemnification. Notwithstanding anything herein
contained to the contrary, no person shall be entitled to indemnification under
the provisions of this Agreement: (i) unless such party shall have given written
notice to the indemnifying party setting forth its claim for indemnification in
reasonable detail, (ii) unless the total aggregate claims for indemnification
have exceeded $50,000.00 and (iii) to the extent that the aggregate amount of
all indemnification liability under Section 9.5 or Section 9.6, as applicable,
exceeds the total value of consideration provided (as of the Closing Date) by
Gold and Sub under Section 2.2 in exchange for Company Common Stock.
9.8 Procedure for Indemnification. If a party hereto becomes aware of
an event which gives rise to a claim for indemnification hereunder, such party
shall give the other party prompt notice of any such action, claim, liability,
assessment or notice of deficiency received by such party which might result in
any liability under this provision. Further, any party who may claim a right of
indemnification hereunder agrees to refrain from paying, settling or
compromising any such claim for which indemnification may be sought without
giving notice of same to the other party. If the other party wishes to contest
or defend such third party claim, then the party against whom the claim was made
shall be obligated to cooperate fully with such party in contesting and
preserving all rights with respect to such contest; provided, however, that if
the other party does not wish to challenge or contest such third party claim,
then the party against whom the claim was being made by settle same on terms and
conditions it deems to be the most favorable it can be obtained and then
asserting the indemnification claim against the other party hereto. When giving
a notice under this provision, a party may specify a time for a response from
the other party as to whether such other party wishes to contest or defend such
third party claim. Such deadline for response may be established consistent with
the facts and circumstances surrounding the situation. If a party hereunder
claims indemnification for a claim other than a third party claim, the party
seeking indemnification shall notify the indemnifying party in writing of the
basis for such claim setting forth the nature and amount of the damages
resulting from such claim. To the extent a party is deemed to have ultimately
been responsible for indemnification, then interest shall be deemed to accrue on
the unpaid amount of indemnification obligation at the prime rate of interest
announced from time to time by Exchange National Bank, such interest to be
calculated based on the actual number of days elapsed from the date each
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indemnification obligation becomes due and owing until paid in full and based on
365 day year.
ARTICLE X
SECURITIES LAWS MATTERS
10.1 Registration Statement and Proxy Statement. Gold shall, at Gold's
expense (but subject to the terms of Section 11.1 hereinafter) as soon as
practicable prepare and file a registration statement on Form S-4 to be filed
with the SEC pursuant to the Securities Act for the purpose of registering the
shares of Gold Common Stock to be issued in the Merger (the "Registration
Statement"). Company, Gold and Sub shall each provide promptly to the other such
information concerning their respective businesses, financial conditions, and
affairs as may be required or appropriate for inclusion in the Registration
Statement or the proxy statement to be used in connection with the special
stockholders' meetings of the Company and Gold and to be called for the purpose
of considering and voting on the Merger (the "Proxy Statement"). Company, Gold
and Sub shall each cause their counsel and auditors to cooperate with the
other's counsel and auditors in the preparation and filing of the Registration
Statement and the Proxy Statement. Gold shall not include in the Registration
Statement any information concerning Company or Bank to which Company shall
reasonably and timely object in writing. Gold, Sub and Company shall use their
reasonable best efforts to have the Registration Statement declared effective
under the Securities Act as soon as may be practicable and thereafter Company
and Gold shall distribute the respective Proxy Statement to its stockholders in
accordance with applicable laws and the NASDAQ Rules not fewer than 20 business
days prior to the date on which this Agreement is to be submitted to its
respective stockholders for voting thereon. If necessary, in light of
developments occurring subsequent to the distribution of the Proxy Statement,
Company and Gold shall mail or otherwise furnish to its stockholders such
amendments to the Proxy Statement or supplements to the Proxy Statement as may,
in the reasonable opinion of Gold, Sub or the Company, be necessary so that the
Proxy Statement, as so amended or supplemented, will contain no untrue statement
of any material fact and will not omit to state any material fact required to be
stated therein or necessary to make the statement therein, in light of the
circumstances under which they were made, not misleading, or as may be necessary
to comply with applicable law. For a period of at least two years from the
Effective Time, Gold shall make available "adequate current public information"
within the meaning of and as required by paragraph (c) of Rule 144 adopted
pursuant to the Securities Act.
10.2 State Securities Laws. The parties hereto shall cooperate in
making any filings required under the securities laws of any state in order
either to qualify or register the Gold Common Stock so it may be offered and
sold lawfully in such state in connection with the Merger or to obtain an
exemption from such qualification or registration.
10.3 Publication of Combined Financial Results. Gold will file with the
Securities and Exchange Commission a Periodic Report on Form 8K containing
financial statements which include no less than 30 days of combined operations
of Gold and the Company, ended on a normal closing date, as soon as practicable
after the Effective Time unless the
A-28
first 30 day period of combined operations is reflected in and ends on the
normal closing date for an annual report on Form 10K or quarterly report on Form
10Q.
10.4. Affiliates. Certificates representing shares of Gold Common Stock
issued to "Affiliates" (as defined in Rules 145 and 405 adopted under the
Securities Act) of the Company pursuant to this Agreement will be subject to
stop transfer orders (as reasonably required in connection with Rule 145) and
will bear a restrictive legend set out in the Affiliate Letter; provided,
however, that following publication of financial results covering at least
thirty (30) days of combined operations of Gold and the Company and upon receipt
of an opinion of counsel reasonably satisfactory to Gold that a proposed sale,
pledge, transfer or other disposition of a specified number of shares of Gold
Common Stock by an Affiliate will comply with or will be exempt from the
Securities Act, Gold shall, as promptly as practicable after receipt of the
stock certificates representing such Affiliate's Gold Common Stock (and in any
event within seven (7) business days after such receipt), direct the Transfer
Agent for the Gold Common Stock to remove the stock transfer order related
thereto and reissue a stock certificate evidencing such shares to the Affiliate
with such restrictive legend.
10.5. Indemnification. Gold agrees to indemnify and hold harmless the
Company and its stockholders, directors, officers, employees, representatives
and agents from and against any and all claims, liabilities, damages and
expenses (including reasonable attorneys' fees), whether arising under federal
or state securities or Blue Sky laws or otherwise, which may be asserted against
any of them and which arise as a result of any alleged act or failure to act, or
any alleged statement or omission, of Gold done or made in connection with the
Merger, Registration Statement, Proxy Statement, or any other statement or form
filed or required to be filed with the SEC or any state securities department or
delivered or required to be delivered to the holders of Company Common Stock,
except to the extent any such alleged act, failure to act, statement or omission
is a result of information provided by the Company or Bank or any employee,
officer, director, or stockholder of Company or Bank.
ARTICLE XI
MISCELLANEOUS
11.1 Expenses.
(a) Except as provided elsewhere in this Agreement and as set
forth herein, each party shall be responsible for its own expenses in connection
with this transaction. Specifically, each party shall be responsible for their
own legal and accounting fees and any related costs or charges associated with
the negotiation, execution and consummation of this Agreement.
(b) Notwithstanding the foregoing, it is understood and agreed
that the Company shall pay up to an aggregate of $30,000 of the total cost of
(i) the certified audit of the consolidated balance sheets of the Company as of
December 31, 1996, December 31, 1997 and June 30, 1998 (if required) and the
statement of income for the periods then
A-29
ended and (ii) the preparation and filing of the Registration Statement and the
Proxy Statement referenced in Section 10.1 above.
(c) Notwithstanding the foregoing, if this Agreement is
terminated (i) by Gold pursuant to either of Sections 9.1(c) or (e) or (ii) by
the Company pursuant to Section 9.1(e), then the Company shall promptly pay Gold
as liquidated damages an amount equal to all of the out-of-pocket costs and
expenses of Gold, including reasonable costs of counsel and accountants up to
but not exceeding $100,000.
(d) Notwithstanding the foregoing, if this Agreement is
terminated by the Company or Gold pursuant to Section 9.1(d), then Gold shall
promptly pay the Company as liquidated damages an amount equal to all of the
out-of-pocket costs and expenses of the Company, including reasonable costs of
counsel and accountants (including amounts the Company is obligated to pay Gold
under Section 11.1(b)) up to but not exceeding $100,000.
(e) In the event this Agreement is terminated for any reason
except as set forth in Sections 11.1(c) or (d), the parties shall retain the
rights and remedies available to them at law or in equity.
11.2 Parties in Interest. This Agreement and the rights hereunder are
not assignable unless such assignment is consented to in writing by all parties
hereto. Except as otherwise expressly provided herein, all of the terms and
provisions of this Agreement shall be binding upon, shall inure to the benefit
of and shall be enforceable by the respective heirs, beneficiaries, personal and
legal representatives, successors and permitted assigns of the parties hereto.
11.3 Entire Agreement, Amendments, Waiver. This Agreement contains the
entire understanding of Gold, Sub and Company with respect to the Merger and
supersedes all prior agreements and understandings, whether written or oral,
between them with respect to the Merger contemplated herein other than that
certain Confidentiality Agreement dated July 22, 1998, between Gold and the
Company (the "Confidentiality Agreement") that is hereby reaffirmed and adopted,
and incorporated by reference herein, and shall survive the execution and
delivery of this Agreement. This Agreement may be amended only by a written
instrument duly executed by the parties or their respective successors or
permitted assigns. Any condition to a party's obligation hereunder may be waived
by such party in writing.
11.4 Notices. All notices, requests, demands or other communications
hereunder shall be in writing and shall be deemed to have been duly given when
personally delivered or transmitted by telefacsimile with a copy thereof
transmitted by a nationally recognized overnight delivery service or deposited
in the United States mail, certified or registered, return receipt requested,
postage prepaid, addressed to the parties at the following addresses or at such
other address as shall be given in like manner by any party to the other:
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If to Company: Citizens Bancorporation, Inc.
▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
FAX: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Esq.
▇▇▇▇▇ & ▇▇▇▇▇▇▇
1800 Mid-America Tower
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
FAX: (▇▇▇) ▇▇▇-▇▇▇▇
If to Gold: ▇▇. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Gold Banc Corporation, Inc.
▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
FAX: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ LLP
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
FAX: (▇▇▇) ▇▇▇-▇▇▇▇
11.5 Law Governing. This Agreement shall be governed by and construed
and enforced in accordance with the laws of the State of Kansas.
11.6 Further Acts. Gold, Company and Sub agree to execute and deliver
on or before the Closing Date such other documents, certificates, agreements or
other writings and take such other actions as may be necessary or desirable in
order to consummate or implement expeditiously the transactions contemplated by
this Agreement.
11.7 No Third Party Beneficiaries. This Agreement shall be binding upon
and inure solely to the benefit of each party hereto, and nothing in this
Agreement, express or implied, is intended to or shall confer upon any other
person any rights, benefit or remedy of any nature whatsoever under or by reason
of this Agreement, other than Sections 6.3, 9.5, 9.6 and 10.3 (which are
intended to be for the benefit of the persons covered thereby and may be
enforced by such persons).
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IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as
of October 5, 1998.
GOLD BANC CORPORATION, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: President and Chief Executive
Officer
ATTEST:
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Secretary
GOLD BANC ACQUISITION CORPORATION IX, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: President and Chief Executive
Officer
ATTEST:
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Secretary
CITIZENS BANCORPORATION, INC.
By: /s/ ▇.▇. ▇▇▇▇▇▇▇
Name: ▇▇▇▇ ▇▇▇▇▇▇▇
Title: Chief Executive Officer
ATTEST:
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Secretary
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