Exhibit 2
AGREEMENT AND PLAN OF MERGER
DATED AS OF JUNE 27, 2000
BETWEEN
U.S. BANCORP
AND
SCRIPPS FINANCIAL CORPORATION
TABLE OF CONTENTS
RECITALS..........................................................................................................1
ARTICLE I CERTAIN DEFINITIONS...................................................................................1
1.01 CERTAIN DEFINITIONS...................................................................................1
ARTICLE II THE MERGER............................................................................................6
2.01 THE MERGER............................................................................................6
2.02 EFFECTIVE DATE AND EFFECTIVE TIME.....................................................................7
ARTICLE III MERGER CONSIDERATION; EXCHANGE PROCEDURES.............................................................7
3.01 MERGER CONSIDERATION..................................................................................7
3.02 RIGHTS AS SHAREHOLDERS; STOCK TRANSFERS...............................................................8
3.03 FRACTIONAL SHARES.....................................................................................8
3.04 EXCHANGE PROCEDURES...................................................................................9
3.05 ANTI-DILUTION PROVISIONS.............................................................................11
3.06 OPTIONS..............................................................................................11
ARTICLE IV ACTIONS PENDING ACQUISITION..........................................................................12
4.01 FORBEARANCES OF SELLER...............................................................................12
4.02 FORBEARANCES OF ACQUIRER.............................................................................15
ARTICLE V REPRESENTATIONS AND WARRANTIES.......................................................................15
5.01 DISCLOSURE SCHEDULE..................................................................................15
5.02 STANDARD.............................................................................................15
5.03 REPRESENTATIONS AND WARRANTIES OF SELLER.............................................................16
5.04 REPRESENTATIONS AND WARRANTIES OF ACQUIRER...........................................................28
ARTICLE VI COVENANTS............................................................................................31
6.01 REASONABLE BEST EFFORTS..............................................................................31
6.02 SHAREHOLDER APPROVAL.................................................................................31
6.03 REGISTRATION STATEMENT...............................................................................32
6.04 PRESS RELEASES.......................................................................................33
6.05 ACCESS; INFORMATION..................................................................................33
6.06 ACQUISITION PROPOSALS................................................................................34
6.07 AFFILIATE AGREEMENTS.................................................................................34
6.08 STOCK EXCHANGE LISTING...............................................................................35
6.09 REGULATORY APPLICATIONS..............................................................................35
6.10 INDEMNIFICATION; DIRECTORS'AND OFFICERS'INSURANCE....................................................36
6.11 TAKEOVER LAWS; NO RIGHT TRIGGERED....................................................................37
6.12 NOTIFICATION OF CERTAIN MATTERS......................................................................37
6.13 CERTAIN LOANS AND RELATED MATTERS....................................................................38
6.14 MONTHLY FINANCIAL STATEMENTS.........................................................................38
6.15 ACCOUNTANTS'LETTERS..................................................................................38
6.16 TAX MATTERS..........................................................................................38
6.17 ESTABLISHMENT OF ACCRUALS............................................................................39
6.18 COORDINATION OF DIVIDENDS............................................................................39
6.19 BENEFIT PLANS........................................................................................39
6.20 EMPLOYMENT AND CONFIDENTIALITY/NONSOLICITATION AGREEMENTS............................................40
ARTICLE VII CONDITIONS TO CONSUMMATION OF THE MERGER.............................................................40
7.01 CONDITIONS TO EACH PARTY'S OBLIGATION TO EFFECT THE MERGER...........................................40
7.02 CONDITIONS TO OBLIGATION OF SELLER...................................................................41
7.03 CONDITIONS TO OBLIGATION OF ACQUIRER.................................................................42
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ARTICLE VII TERMINATION..........................................................................................43
8.01 TERMINATION..........................................................................................43
8.02 EFFECT OF TERMINATION AND ABANDONMENT................................................................44
8.03 TERMINATION FEE......................................................................................45
ARTICLE IX MISCELLANEOUS........................................................................................45
9.01 SURVIVAL.............................................................................................45
9.02 WAIVER; AMENDMENT....................................................................................45
9.03 COUNTERPARTS.........................................................................................46
9.04 GOVERNING LAW; WAIVER OF JURY TRIAL..................................................................46
9.05 EXPENSES.............................................................................................46
9.06 NOTICES..............................................................................................46
9.07 ENTIRE UNDERSTANDING; NO THIRD PARTY BENEFICIARIES...................................................47
9.08 INTERPRETATION; EFFECT...............................................................................47
9.09 ENFORCEMENT OF AGREEMENT.............................................................................47
EXHIBIT A--Form of Affiliate Agreement
ii
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER, dated as of June 27, 2000 (this
"Agreement") between U.S. BANCORP ("Acquirer") and SCRIPPS FINANCIAL CORPORATION
("Seller").
RECITALS
A. ACQUIRER. Acquirer is a Delaware corporation, having its principal
place of business in Minneapolis, Minnesota.
B. SELLER. Seller is a California corporation, having its principal
place of business in San Diego, California.
C. INTENTIONS OF THE PARTIES. Acquirer and Seller intend that the
merger (the "Merger") contemplated by this Agreement shall qualify as a
reorganization under Section 368 of the Internal Revenue Code of 1986 as amended
(the "Code").
D. BOARD ACTION. The respective Boards of Directors of Seller and
Acquirer have determined that it is advisable and in the best interests of their
respective companies and their shareholders to consummate the Merger in
accordance with the terms provided for herein.
E. VOTING AGREEMENTS. Simultaneously herewith, certain directors and
executive officers of Seller each have entered into a shareholder voting
agreement with Acquirer.
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants, representations, warranties and agreements contained herein, the
parties agree as follows:
ARTICLE I
CERTAIN DEFINITIONS
1.01 CERTAIN DEFINITIONS. The following terms are used in this
Agreement with the meanings set forth below:
"Acquirer" has the meaning set forth in the preamble to this Agreement.
"Acquirer Average Price" means the average of the daily closing sales
prices of a share of Acquirer Common Stock as reported on the consolidated tape
of the NYSE during the 10 consecutive trading days ending with the date of FRB
approval of the Merger.
"Acquirer Board" means the Board of Directors of Acquirer.
"Acquirer Common Stock" means the common stock, $1.25 par value per
share, of Acquirer.
"Acquirer Preferred Stock" has the meaning set forth in Section
5.04(b).
"Acquirer Transaction" has the meaning set forth in Section
3.01(a)(ii).
"Agreement" means this Agreement, as amended or modified from time to
time in accordance with Section 9.02.
"Business Combination" has the meaning set forth in Section 3.05.
"CGCL" means the California General Corporation Law, as amended.
"Code" has the meaning set forth in the recitals.
"Compensation and Benefit Plans" has the meaning set forth in Section
5.03(p)(i).
"Confidentiality Agreements" has the meaning set forth in Section
6.05(b).
"Costs" has the meaning set forth in Section 6.10(a).
"DFI" means the California Department of Financial Institutions.
"DGCL" means the Delaware General Corporation Law, as amended.
"DPC Shares" means shares of Seller Common Stock held as a result of
debts previously contracted in good faith.
"Disclosure Schedule" has the meaning set forth in Section 5.01.
"Dissenting Shares" has the meaning set forth in Section 3.04(f).
"Effective Date" has the meaning set forth in Section 2.02.
"Effective Time" has the meaning set forth in Section 2.02.
"Environmental Law" has the meaning set forth in Section 5.03(s).
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"ERISA Affiliate" has the meaning set forth in Section 5.03(p)(iv).
"Exchange Act" means the Securities Exchange Act of 1934, as amended,
and the rules and regulations thereunder.
"Exchange Agent" has the meaning set forth in Section 3.04(a).
"Exchange Ratio" has the meaning set forth in Section 3.01(a).
"FDIC" means the Federal Deposit Insurance Corporation.
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"FRB" means the Board of Governors of the Federal Reserve System.
"GAAP" means United States generally accepted accounting principles,
consistently applied.
"Governmental Authority" means any court, administrative agency or
commission or other federal, state or local governmental authority or
instrumentality.
"Hazardous Substance" has the meaning set forth in Section 5.03(s).
"Indemnified Parties" has the meaning set forth in Section 6.10(a).
"Injunction" has the meaning set forth in Section 7.01(c).
"Insurance Amount" has the meaning set forth in Section 6.10(c).
"Latest Seller Balance Sheet" has the meaning set forth in Section
5.03(i).
"Leases" has the meaning set forth in Section 5.03(r)(ii).
"Liabilities" has the meaning set forth in Section 5.03(i).
"Liens" means any charge, mortgage, pledge, security interest,
restriction, claim, lien or encumbrance other than liens for taxes not yet due
and payable.
"Loans" has the meaning set forth in Section 5.03(w)(i).
"Material Adverse Effect" means, with respect to Acquirer or Seller, as
the case may be, any effect that: (i) is material and adverse to the financial
position, results of operations or business of Acquirer and its Subsidiaries,
taken as a whole, or Seller and its Subsidiaries, taken as a whole, or (ii)
would materially impair the ability of either Acquirer or Seller to perform its
obligations under this Agreement or otherwise materially threaten or materially
impede the consummation of the Merger and the other transactions contemplated by
this Agreement; provided, however, that Material Adverse Effect shall not be
deemed to include the impact of (a) changes in banking and similar laws of
general applicability or interpretations thereof by any court or any
Governmental Authority, (b) changes in GAAP or regulatory accounting
requirements applicable to banks and their holding companies generally, (c) any
expenses incurred by a party hereto in connection with this Agreement or the
transactions contemplated hereby, or (d) any action or omission of Seller or any
of its Subsidiaries or Acquirer or any of its Subsidiaries taken with the prior
written consent of the other party hereto.
"Material Contract" means, with respect to any Person, any agreement,
contract, arrangement, commitment or understanding (whether written or oral):
(i) that is a "material contract" within the meaning of Item 601(b)(10) of the
SEC's Regulation S-K, (ii) that
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materially restricts the conduct of its business, or (iii) that is otherwise
material to its financial position, results of operations or business.
"Merger" has the meaning set forth in Section 2.01(a).
"Merger Consideration" has the meaning set forth in Section 2.01(a).
"Multiemployer Plans" has the meaning set forth in Section
5.03(p)(iii).
"New Certificates" has the meaning set forth in Section 3.04(a).
"NYSE" means the New York Stock Exchange.
"OCC" means the Office of the Comptroller of the Currency.
"Old Certificates" has the meaning set forth in Section 3.04(a).
"OREO" means "other real estate owned."
"Pension Plan" has the meaning set forth in Section 5.03(p)(iii).
"Person" means any individual, bank, corporation, partnership,
association, joint-stock company, business trust or other entity or
unincorporated organization.
"Plans" has the meaning set forth in Section 5.03(p)(iii).
"Previously Disclosed" by a party means information set forth in its
Disclosure Schedule.
"Proxy Statement" has the meaning set forth in Section 6.03(a).
"Registration Statement" has the meaning set forth in Section 6.03(a).
"Regulatory Authorities" has the meaning set forth in Section
5.03(k)(i).
"Replacement Option" has the meaning set forth in Section 3.06(a).
"Representatives" means, with respect to any Person, such Person's
directors, officers, employees, legal or financial advisors or any
representatives of such legal or financial advisors.
"Rights" means, with respect to any Person, securities or obligations
convertible into or exercisable or exchangeable for, or giving any Person any
right to subscribe for or acquire, or any options, calls or commitments relating
to, or any stock appreciation right or other instrument the value of which is
determined in whole or in part by reference to the market price or value of,
shares of capital stock of such Person.
"SEC" means the Securities and Exchange Commission.
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"SEC Documents" has the meaning set forth in Section 5.03(g).
"Sections 1300 et seq." has the meaning set forth in Section 3.04(f).
"Securities Act" means the Securities Act of 1933, as amended, and
rules and regulations thereunder.
"Seller" has the meaning set forth in the preamble to this Agreement.
"Seller Articles" means the Articles of Incorporation of Seller as in
effect as of the date hereof.
"Seller Board" means the Board of Directors of Seller.
"Seller By-Laws" means the By-Laws of Seller as in effect as of the
date hereof.
"Seller Common Stock" means the common stock, no par value per share,
of Seller.
"Seller Meeting" has the meaning set forth in Section 6.02.
"Seller Plans" means those plans set forth under the heading "Plans" on
Schedule 5.03--Employee Benefit Plans in the Disclosure Schedule.
"Seller Preferred Stock" has the meaning set forth in Section 5.03(b).
"Seller Regulatory Reports" has the meaning set forth in Section
5.03(k)(iii).
"Seller Stock Option" has the meaning set forth in Section 3.06(a).
"Seller's Knowledge" means the actual knowledge of any director or
executive officer of Seller or a Subsidiary of Seller, after reasonable inquiry
and investigation.
"Subsidiary" and "Significant Subsidiary" have the meanings ascribed to
them in Rule 1-02 of Regulation S-X of the SEC.
"Superior Proposal" means a bona fide Takeover Proposal which a
majority of the disinterested members of the Seller Board determines in its
reasonable good faith judgment to be more favorable to the Seller's shareholders
than the Merger (after receiving the advice of the Seller's independent
financial advisor that the financial value of the consideration provided for in
such Takeover Proposal exceeds the financial value of the Merger Consideration)
and for which financing, to the extent required, is then committed by a third
party or which, in the reasonable good faith judgment of a majority of such
disinterested members (after receiving the advice of the Seller's independent
financial advisor), is highly likely to be financed by such third party.
"Surviving Corporation" has the meaning set forth in Section 2.01(a).
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"Takeover Laws" has the meaning set forth in Section 5.03(aa).
"Takeover Proposal" means, with respect to any Person, any tender or
exchange offer, proposal for a merger, consolidation or other business
combination involving Seller or any of its Significant Subsidiaries, or any
proposal or offer to acquire in any manner a substantial equity interest in, or
a substantial portion of the assets or deposits of, Seller or any of its
Significant Subsidiaries, other than the transactions contemplated by this
Agreement.
"Tax" and "Taxes" means all federal, state, local or foreign taxes,
charges, fees, levies or other assessments, however denominated, including,
without limitation, all net income, gross income, gains, gross receipts, sales,
use, ad valorem, goods and services, capital, production, transfer, franchise,
windfall profits, license, withholding, payroll, employment, disability,
employer health, excise, estimated, severance, stamp, occupation, property,
environmental, unemployment or other taxes, custom duties, fees, assessments or
charges of any kind whatsoever, together with any interest and any penalties,
additions to tax or additional amounts imposed by any taxing authority.
"Tax Returns" means any return, amended return or other report
(including elections, declarations, disclosures, schedules, estimates and
information returns) required to be filed with respect to any Tax.
"Termination Fee" has the meaning set forth in Section 8.03.
"Treasury Stock" means shares of Seller Common Stock held by Seller or
by Acquirer or any of its Subsidiaries, in each case other than Trust Account
Shares and DPC Shares.
"Trust Account Shares" means shares of Seller Common Stock held in a
fiduciary (including custodial or agency) capacity.
ARTICLE II
THE MERGER
2.01 THE MERGER.
(a) THE SURVIVING CORPORATION. At the Effective Time, Seller shall
merge with and into Acquirer (the "Merger"), the separate corporate existence of
Seller shall cease and Acquirer shall survive and continue to exist as a
Delaware corporation (Acquirer, as the surviving corporation in the Merger,
sometimes being referred to herein as the "Surviving Corporation"). Acquirer may
at any time prior to the Effective Time change the method of effecting the
combination with Seller (including, without limitation, the provisions of this
Article II) if and to the extent it deems such change to be desirable,
including, without limitation, to provide for a merger of Seller directly with
and into a wholly-owned subsidiary of Acquirer, in which either Seller or such
subsidiary is the surviving corporation; PROVIDED, HOWEVER, that no such change
shall (i) alter or change the amount, method of calculating or kind of
consideration to be issued
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to holders of Seller Common Stock as provided for in this Agreement (the "Merger
Consideration"), or the relative equity interest in the Surviving Corporation
represented thereby, (ii) adversely affect the tax treatment of Seller's
shareholders as a result of receiving the Merger Consideration, or (iii)
materially impede or delay consummation of the transactions contemplated by this
Agreement.
(b) EFFECTIVE DATE OF MERGER; EFFECTS OF MERGER. Subject to the
satisfaction or waiver of the conditions set forth in Article VII in accordance
with this Agreement, the Merger shall become effective upon the occurrence of
both (i) the filing in the office of the Secretary of State of California of an
agreement of merger in accordance with Section 1103 of the CGCL and (ii) the
filing in the office of the Secretary of State of the State of Delaware of a
certificate of merger in accordance with Section 252 of the DGCL, or such later
date and time as may be set forth in such agreement and certificate. The Merger
shall have the effects prescribed in the CGCL and the DGCL.
(c) CERTIFICATE OF INCORPORATION AND BY-LAWS. The certificate of
incorporation and by-laws of the Surviving Corporation immediately after the
Effective Time shall be those of Acquirer as in effect immediately prior to the
Effective Time.
(d) DIRECTORS AND OFFICERS OF THE SURVIVING CORPORATION. The directors
and officers of the Surviving Corporation immediately after the Effective Time
shall be the directors and officers of Acquirer immediately prior to the
Effective Time, until such time as their successors shall be duly elected and
qualified.
2.02 EFFECTIVE DATE AND EFFECTIVE TIME. Subject to the satisfaction or
waiver of the conditions as set forth in Article VII in accordance with this
Agreement, the parties shall cause the effective date of the Merger (the
"Effective Date") to occur on (i) a date within two business days of the day on
which the last of the conditions set forth in Sections 7.01, 7.02 and 7.03 shall
have been satisfied or waived in accordance with the terms of this Agreement
(ii) such other date to which the parties hereto may agree in writing. The time
on the Effective Date when the Merger shall become effective is referred to as
the "Effective Time."
ARTICLE III
MERGER CONSIDERATION; EXCHANGE PROCEDURES
3.01 MERGER CONSIDERATION. Subject to the provisions of this Agreement,
at the Effective Time, automatically by virtue of the Merger and without any
action on the part of any Person:
(a) OUTSTANDING SELLER COMMON STOCK. Each share of Seller
Common Stock, excluding Treasury Stock, issued and outstanding immediately prior
to the Effective Time shall be converted, subject to Section 3.05, into 1.067
shares of Acquirer Common Stock (the "Exchange Ratio"). Notwithstanding the
foregoing:
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(i) if the Acquirer Average Price is less than
$18.56, then the Exchange Ratio shall be adjusted so that it is equal
to the quotient (rounded up to the nearest third decimal point)
obtained by dividing $19.80 by the Acquirer Average Price; and
(ii) if the Acquirer Average Price is greater than
$22.69, then the Exchange Ratio shall be adjusted so that it is equal
to the quotient (rounded up to the nearest third decimal point)
obtained by dividing $24.21 by the Acquirer Average Price; provided,
however, that, notwithstanding any other provision of this Agreement,
if (x) the average of the daily closing prices of a share of Acquirer
Common Stock as reported on the consolidated tape of the NYSE during
the 10 consecutive trading days ending with the third business day
prior to the Effective Date is greater than $22.69 and (y) after the
date hereof and prior to the Effective Date, Acquirer has publicly
announced an Acquirer Transaction (as defined below), then the Exchange
Ratio shall be equal to 1.067. As used in this Section 3.01(a)(ii), the
term "Acquirer Transaction" means the execution by Acquirer of a
definitive agreement or letter of intent providing for a transaction in
which a merger, consolidation or other business combination involving
Acquirer in which either (A) the Acquirer Board approving such
definitive agreement shall not constitute a majority of the board of
directors of the combined or merged entity surviving in such merger,
consolidation or other business combination or (B) less than a majority
of the outstanding voting securities of the combined or merged entity
surviving in such merger, consolidation or other business combination
are owned by the former shareholders of Acquirer.
(b) OUTSTANDING ACQUIRER COMMON STOCK. Each share of Acquirer
Common Stock issued and outstanding immediately prior to the Effective Time
shall remain outstanding and unaffected and, together with the shares converted
into Acquirer Common Stock pursuant to Section 3.01(a), shall constitute all of
the then-issued and outstanding shares of capital stock of the Surviving
Corporation.
(c) TREASURY STOCK. Each of the shares of Seller Common Stock
held as Treasury Stock immediately prior to the Effective Time shall be canceled
and retired at the Effective Time and no consideration shall be issued in
exchange therefor.
3.02 RIGHTS AS SHAREHOLDERS; STOCK TRANSFERS. At the Effective Time,
holders of Seller Common Stock shall cease to be, and shall have no rights as,
shareholders of Seller, other than to receive any dividend or other distribution
with respect to Seller Common Stock with a record date occurring prior to the
Effective Date and the consideration provided under this Article III, including
any dissenter's rights provided in Section 3.04(f). After the Effective Time,
there shall be no transfers on the stock transfer books of Seller or the
Surviving Corporation of shares of Seller Common Stock.
3.03 FRACTIONAL SHARES. Notwithstanding any other provision hereof, no
certificates for fractional shares of Acquirer Common Stock, or other evidence
of ownership thereof, will be issued in the Merger (unless otherwise
specifically provided by Acquirer with respect to any shares of Acquirer Common
Stock issued in the form of book-entry securities); instead, Acquirer
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shall pay to each holder of Seller Common Stock who would otherwise be entitled
to a fractional share of Acquirer Common Stock (after taking into account all of
the shares of Seller Common Stock represented by all of the Old Certificates
delivered by such holder) an amount in cash (without interest) determined by
multiplying such fraction by the average of the closing sale prices of Acquirer
Common Stock, as reported by the NYSE Composite Transactions Reporting System
(as reported in THE WALL STREET JOURNAL or, if not reported therein, in another
authoritative source), for the five NYSE trading days immediately preceding the
Effective Date.
3.04 EXCHANGE PROCEDURES.
(a) DEPOSIT OF EXCHANGE FUND. At or prior to the Effective Time,
Acquirer shall deposit, or shall cause to be deposited, with such bank or trust
company as Acquirer shall elect (which may be a Subsidiary of Acquirer) (the
"Exchange Agent"), for the benefit of the holders of certificates formerly
representing shares of Seller Common Stock ("Old Certificates"), for exchange in
accordance with this Article III, certificates or book-entry securities
representing the shares of Acquirer Common Stock ("New Certificates") and any
cash in lieu of fractional shares (such cash and New Certificates, together with
any dividends or distributions with a record date occurring after the Effective
Date with respect thereto (without any interest on any such cash, dividends or
distributions) being hereinafter referred to as the "Exchange Fund") to be paid
pursuant to this Article III in exchange for the shares of Seller Common Stock
outstanding immediately prior to the Effective Time.
(b) EXCHANGE OF CERTIFICATES. As promptly as practicable after the
Effective Date, Acquirer shall send or cause to be sent to each former holder of
record of shares of Seller Common Stock (other than Treasury Stock) immediately
prior to the Effective Time transmittal materials for use in exchanging such
shareholder's Old Certificates for the Merger Consideration set forth in this
Article III. Following the dissemination of such transmittal materials and
receipt by the Exchange Agent of duly completed copies thereof, all as
disseminated and processed by the Exchange Agent in the ordinary course,
Acquirer shall cause the New Certificates representing Acquirer Common Stock
into which shares of a shareholder's Seller Common Stock are converted on the
Effective Date and/or any check in respect of fractional share interests or
dividends or distributions which such Person shall be entitled to receive to be
delivered to such shareholder upon delivery to the Exchange Agent of Old
Certificates representing such shares of Seller Common Stock (or indemnity
reasonably satisfactory to Acquirer and the Exchange Agent, if any of such
certificates are lost, stolen or destroyed) owned of record immediately prior to
the Effective Time by such shareholder. No interest will be paid on any such
cash to be paid in lieu of fractional share interests or dividends or
distributions which any such Person shall be entitled to receive pursuant to
this Article III upon such delivery.
(c) UNCLAIMED CERTIFICATES. If Old Certificates are not surrendered or
the consideration therefor is not claimed prior to the date on which such
consideration would otherwise escheat to or become the property of any
governmental unit or agency, the unclaimed consideration shall, to the extent
permitted by abandoned property and any other applicable law, become the
property of Acquirer (and to the extent not in its possession shall be paid over
to Acquirer), and thereafter any shareholders of Seller who have not surrendered
their Old Certificates shall thereafter look only to Acquirer for payment of the
shares of Acquirer Common
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Stock, cash in lieu of any fractional shares of Acquirer Common Stock, and
unpaid dividends and distributions on Acquirer Common Stock deliverable in
respect to each share of Seller Common Stock such shareholder holds immediately
prior to the Effective Time, as determined pursuant to this Agreement, in each
case, without any interest thereon. Notwithstanding the foregoing, neither the
Exchange Agent nor any party hereto shall be liable to any former holder of
Seller Common Stock for any amount properly delivered to a public official
pursuant to applicable abandoned property, escheat or similar laws.
(d) DISTRIBUTIONS IN RESPECT OF UNCLAIMED CERTIFICATES. No dividends or
other distributions with respect to Acquirer Common Stock with a record date
occurring after the Effective Time shall be paid to the holder of any
unsurrendered Old Certificate representing shares of Seller Common Stock
converted in the Merger into the right to receive shares of such Acquirer Common
Stock until the holder thereof shall be entitled to receive New Certificates in
exchange therefor after having complied with the procedures set forth in this
Section 3.04, and no such shares of Acquirer Common Stock shall be eligible to
vote until the holder of Old Certificates is entitled to receive New
Certificates after having complied with the procedures set forth in this Section
3.04. After becoming so entitled and after having complied with this Section
3.04, the record holder thereof also shall be entitled to receive any such
dividends or other distributions, without any interest thereon, which
theretofore had otherwise become payable with respect to shares of Acquirer
Common Stock such holder had the right to receive upon surrender of the Old
Certificate.
(e) DISPOSITION OF UNCLAIMED EXCHANGE FUND. Any portion of the Exchange
Fund that remains unclaimed by the shareholders of Seller for six months after
the Effective Time shall be returned by the Exchange Agent to Acquirer if
Acquirer so requests. In the event of the return of such Exchange Fund to
Acquirer, any shareholders of Seller who have not theretofore complied with this
Article III shall thereafter look only to Acquirer for payment of the shares of
Acquirer Common Stock, cash in lieu of any fractional shares of Acquirer Common
Stock, and unpaid dividends and distributions on Acquirer Common Stock
deliverable in respect of each share of Seller Common Stock such shareholder
holds immediately prior to the Effective Time, as determined pursuant to this
Agreement, in each case, without any interest thereon.
(f) DISSENTING SHARES. Notwithstanding anything in this Agreement to
the contrary, shares of Seller Common Stock which are outstanding immediately
prior to the Effective Time and which constitute "dissenting shares" as defined
in Section 1300 of the CGCL (such shares are referred to herein as "Dissenting
Shares") shall not be converted into shares of Acquirer Common Stock but,
instead, the holders thereof shall be entitled to receive payment of the fair
market value of such Dissenting Shares as determined in accordance with the
provisions of Sections 1300-1312 ("Sections 1300 et seq.") of the CGCL;
provided, however, that (i) if any holder of Dissenting Shares shall
subsequently withdraw, with the consent of the Surviving Corporation, his or her
demand for purchase of such shares, or (ii) if any holder of Dissenting Shares
fails to establish or perfect or otherwise loses his or her entitlement to
payment of the fair market value of such shares as provided in Sections 1300 et
seq. such holder or holders (as the case may be) shall not be entitled to
receive payment of the fair market value of such shares of Seller Common Stock
as contemplated by Sections 1300 et seq., and each of such shares shall
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thereupon be deemed to have been converted into shares of Acquirer Common Stock
and cash in lieu of fractional shares, without any interest thereon, as provided
in Article III hereof.
3.05 ANTI-DILUTION PROVISIONS. In the event Acquirer changes (or
establishes a record date for changing) the number of shares of Acquirer Common
Stock issued and outstanding prior to the Effective Date as a result of any
stock split, recapitalization, reclassification, combination, exchange of
shares, readjustment or similar transaction with respect to the outstanding
Acquirer Common Stock, or Acquirer declares a stock dividend or extraordinary
cash dividend, and the record date therefor shall be prior to the Effective
Date, the Exchange Ratio shall be proportionately adjusted. If, between the date
hereof and the Effective Time, Acquirer shall merge, be acquired or consolidate
with, by or into any other corporation (a "Business Combination") and the terms
thereof shall provide that Acquirer Common Stock shall be converted into or
exchanged for the shares of any other corporation or entity, then provision
shall be made as part of the terms of such Business Combination so that
shareholders of Seller who would be entitled to receive shares of Acquirer
Common Stock pursuant to this Agreement shall be entitled to receive, in lieu of
each share of Acquirer Common Stock issuable to such shareholders as provided
herein, the same kind and amount of securities or assets as shall be
distributable upon such Business Combination with respect to one share of
Acquirer Common Stock (provided that nothing herein shall be construed so as to
release the acquiring entity in any such Business Combination from its
obligations under this Agreement as the successor to Acquirer).
3.06 OPTIONS.
(a) At the Effective Time, all outstanding options to purchase
shares of Seller Common Stock outstanding immediately prior to the Effective
Time under any of the Seller Plans (all such options of an option holder having
the same exercise price, a "Seller Stock Option") shall be converted into an
option to acquire, on the same terms and conditions as were applicable under
such Seller Stock Option, the number of shares of Acquirer Common Stock equal to
(a) the number of shares of Seller Common Stock subject to the Seller Stock
Option, multiplied by (b) the Exchange Ratio (such product rounded up (or down
as provided below with respect to "incentive stock options") to the nearest
whole number) (all such new options of an option holder, a "Replacement
Option"), at an exercise price per share (rounded up or down to the nearest
whole cent) equal to (y) the aggregate exercise price for the shares of Seller
Common Stock which were purchasable pursuant to such Seller Stock Option divided
by (z) the number of full shares of Acquirer Common Stock subject to such
Replacement Option in accordance with the foregoing. Notwithstanding the
foregoing, each Seller Stock Option which is intended to be an "incentive stock
option" (as defined in Section 422 of the Code) shall be adjusted in accordance
with the requirements of Section 424 of the Code. At or prior to the Effective
Time, Seller shall take all reasonable action, if any, necessary with respect to
the Seller Plans to permit the replacement of the outstanding Seller Stock
Options by Acquirer pursuant to this Section. At the Effective Time, Acquirer
shall assume the Seller Plans; provided, that such assumption shall be only in
respect of the Replacement Options resulting from the conversion of Seller Stock
Options issued under such plans and that Acquirer shall have no obligation with
respect to any awards under the Seller Plans other than the Replacement Options
and shall have no obligation to make any additional grants or awards under such
assumed Seller Plans.
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(b) Prior to the Effective Time, Acquirer shall reserve for
issuance the number of shares of Acquirer Common Stock necessary to satisfy
Acquirer's obligations under this Section 3.06.
ARTICLE IV
ACTIONS PENDING ACQUISITION
4.01 FORBEARANCES OF SELLER. From the date hereof until the Effective
Time, except as set forth in a written action plan furnished to Acquirer prior
to the date hereof or as expressly contemplated by this Agreement without the
prior written consent of Acquirer, Seller will not, and will cause each of its
Subsidiaries not to:
(a) ORDINARY COURSE. Conduct the business of Seller and its
Subsidiaries other than in the ordinary and usual course in accordance in all
material respects with all applicable laws, rules and regulations and past
practice, or, to the extent consistent therewith, fail to use reasonable efforts
to preserve intact in all material respects the business organizations and
assets and maintain in all material respects its rights, franchises and existing
relations with customers, suppliers, employees and business associates.
(b) DELAY. Willfully take any action that Seller knows or
should reasonably know would materially and adversely affect or delay the
ability of Seller or Acquirer to perform any of their respective obligations
under this Agreement.
(c) CAPITAL STOCK. Other than pursuant to the Rights
Previously Disclosed and outstanding on the date hereof, or pursuant to existing
plans providing for periodic grants or purchase rights; (i) issue, sell or
otherwise permit to become outstanding, or authorize the creation of, any
additional shares of capital stock or any Rights, (ii) enter into any agreement
with respect to the foregoing, or (iii) permit any additional shares of capital
stock to become subject to new grants of employee or director stock options,
other Rights or similar stock-based employee rights.
(d) DIVIDENDS, ETC. (i) Subject to the provisions of Section
6.18, take, declare, pay or set aside for payment any dividend on or in respect
of, or declare or make any distribution on any shares of its capital stock,
other than normal quarterly dividends not in excess of $0.0625 per share of
Seller Common Stock with record and payment dates consistent with past practice,
or (ii) directly or indirectly adjust, split, combine, redeem, reclassify,
purchase or otherwise acquire (except for the acquisition of DPC Shares and
Trust Account Shares), any shares of its capital stock or any Rights with
respect to Seller securities.
(e) COMPENSATION; EMPLOYMENT AGREEMENTS; ETC. Enter into or
amend or renew any employment, consulting, severance or similar agreements or
arrangements with any director, officer or employee of Seller or any of its
Subsidiaries, or grant any bonus or any salary or wage increase or establish or
increase any employee benefit (including incentive or bonus payments), except
(i) for normal individual increases in compensation and/or benefits to employees
in the ordinary course of business consistent with past practice, (ii) for other
changes
12
that are required by applicable law, (iii) to satisfy Previously Disclosed
contractual obligations existing as of the date hereof, or (iv) for engagement
of, and grants of awards to newly hired employees consistent with past practice
(provided that Seller shall not enter into any new employment agreement without
the prior written consent of Acquirer.)
(f) BENEFIT PLANS. Enter into, establish, adopt or amend
(except (i) as may be required by applicable law or (ii) to satisfy Previously
Disclosed contractual obligations existing as of the date hereof) any pension,
retirement, stock option, stock purchase, savings, profit sharing, deferred
compensation, consulting, bonus, group insurance or other employee benefit,
incentive or welfare contract, plan or arrangement, or any trust agreement (or
similar arrangement) related thereto, in respect of any director, officer or
employee of Seller or any of its Subsidiaries, or take any action to accelerate
the vesting or exercisability of stock options, restricted stock or other
compensation or benefits payable thereunder.
(g) DISPOSITIONS. Sell, transfer, mortgage, encumber or
otherwise dispose of or discontinue any of the assets, deposits, business or
properties of Seller or any of its Subsidiaries except in the ordinary course of
business; provided, that any such sale, transfer, mortgage, encumbrance or
disposition of any real property, other than OREO, shall not be considered to be
in the ordinary course of business.
(h) ACQUISITIONS. Acquire (other than by way of foreclosures
or acquisitions of control in a bona fide fiduciary capacity or in satisfaction
of debts previously contracted in good faith, in each case in the ordinary and
usual course of business consistent with past practice) all or any portion of
the assets, business, deposits or properties of any other entity except in the
ordinary course of business consistent with past practice and in a transaction
that is not material to Seller and its Subsidiaries, taken as a whole.
(i) CAPITAL EXPENDITURES. Make any capital expenditures other
than capital expenditures in the ordinary course of business consistent with
past practice in amounts not exceeding $100,000 individually or $1,000,000 in
the aggregate.
(j) GOVERNING DOCUMENTS. Amend the Seller Articles or Seller
By-Laws.
(k) ACCOUNTING METHODS. Implement or adopt any change in its
financial accounting principles, practices or methods, other than as may be
required by GAAP or regulatory accounting principles.
(l) CONTRACTS. Except in the ordinary course of business
consistent with past practice, enter into, terminate or renew any Material
Contract or amend or modify in any material respect any of its existing Material
Contracts.
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(m) ADVERSE ACTIONS.
(i) Take any action while knowing that such action
would, or would be reasonably likely to, prevent or impede the Merger
from qualifying as a reorganization within the meaning of Section 368
of the Code; or
(ii) Knowingly take any action not otherwise
specifically permitted by this Agreement that is intended or is
reasonably likely to result in (A) any of its representations and
warranties set forth in this Agreement being or becoming untrue in any
material respect at any time at or prior to the Effective Time, (B) any
of the conditions to the Merger set forth in Article VII not being
satisfied, or (C) a material violation of any provision of this
Agreement except, in each case, as may be required by applicable law or
regulation.
(n) RISK MANAGEMENT. Except as required by applicable law or
regulation (a) implement or adopt any material change in its interest rate and
other risk management policies, procedures or practices, (b) fail to follow its
existing policies or practices with respect to managing its exposure to interest
rate risk, or (c) fail to use commercially reasonable means to avoid any
material increase in its aggregate exposure to interest rate risk.
(o) INDEBTEDNESS; LIABILITIES. Incur any indebtedness for
borrowed money or voluntarily incur or become subject to any material liability,
in each case other than in the ordinary course of business consistent with past
practice.
(p) DISCHARGE. Discharge or satisfy any material lien or
encumbrance on the properties or assets of Seller or any of its Subsidiaries or
pay or cancel any material debt, liability or claim of Seller or any of its
Subsidiaries or otherwise waive any rights of material value of Seller or any of
its Subsidiaries, except in the ordinary course of business.
(q) INSURANCE. Permit the current insurance policies of Seller
or any of its Subsidiaries to be canceled or terminated or any of the coverage
thereunder to lapse, unless simultaneously with such termination, cancellation
or lapse, replacement policies providing coverages substantially equal to the
coverages under the canceled, terminated or lapsed policies are in full force
and effect.
(r) SETTLEMENTS. Enter into any settlement or similar
agreement with respect to, or take any other significant action with respect to
the conduct of, any action, suit, proceeding, order or investigation to which
Seller or any of its Subsidiaries becomes a party after the date of this
Agreement, which settlement, agreement or action involves payment by Seller or
its Subsidiaries of amounts in excess of $100,000.
(s) EXTENSIONS OF CREDIT. Make any agreements or commitments
binding it to extend credit except in a manner consistent with past practice and
in accordance with the lending policies of the bank Subsidiaries of Seller or
make any agreement or commitment binding it to extend credit for any individual
loan in an amount in excess of $3,500,000 without submitting
14
loan package information to the Chief Credit Officer of Acquirer or his designee
for review with a right of comment at least one full business day prior to
taking such action.
(t) COMMITMENTS. Agree or commit to do any of the foregoing.
4.02 FORBEARANCES OF ACQUIRER. From the date hereof until the Effective
Time, except as expressly contemplated by this Agreement, without the prior
written consent of Seller, Acquirer will not, and will cause each of its
Subsidiaries not to:
(a) DELAY. Willfully take any action Acquirer knows or should
know would materially adversely affect or delay the ability of Seller or
Acquirer to perform any of their respective obligations under this Agreement.
(b) ADVERSE ACTIONS.
(i) Take any action while knowing that such action
would, or would be reasonably likely to, prevent or impede the Merger
from qualifying as a reorganization within the meaning of Section 368
of the Code.
(ii) Knowingly take any action not otherwise
specifically permitted by this Agreement that is intended or is
reasonably likely to result in (A) any of its representations and
warranties set forth in this Agreement being or becoming untrue in any
material respect at any time at or prior to the Effective Time, (B) any
of the conditions to the Merger set forth in Article VII not being
satisfied, or (C) a material violation of any provision of this
Agreement except, in each case, as may be required by applicable law or
regulation.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
5.01 DISCLOSURE SCHEDULE. On or prior to the date hereof, Seller has
delivered to Acquirer a schedule (the "Disclosure Schedule") setting forth,
among other things, items the disclosure of which is necessary either in
response to an express disclosure requirement contained in a provision hereof or
as an exception to one or more representations or warranties contained in
Section 5.03; provided, that (a) no such item is required to be set forth in a
Disclosure Schedule as an exception to a representation or warranty if its
absence would not be reasonably likely to result in the related representation
or warranty being deemed untrue or incorrect under the standard established by
Section 5.02, and (b) the mere inclusion of an item in a Disclosure Schedule as
an exception to a representation or warranty shall not be deemed an admission by
a party that such item represents a material exception or fact, event or
circumstance or that such item has had or will have a Material Adverse Effect.
5.02 STANDARD. No representation or warranty of Seller or Acquirer
contained in Section 5.03 or 5.04, respectively, shall be deemed untrue or
incorrect for any purpose under this Agreement, and no party hereto shall be
deemed to have breached a representation or warranty,
15
as a consequence of the existence of any fact, event or circumstance unless such
fact, event or circumstance, individually or taken together with all other
facts, events or circumstances inconsistent with any representation or warranty
contained in Section 5.03 or 5.04 has had or would be reasonably expected to
have a Material Adverse Effect on the party making such representation or
warranty; provided, however that the representations and warranties of Seller
contained in Sections 5.03(b), (c)(i), (e), (h), and (n) shall be true and
correct in all respects without qualification by the standard set forth in this
Section 5.02.
5.03 REPRESENTATIONS AND WARRANTIES OF SELLER. Subject to Sections 5.01
and 5.02 and except as Previously Disclosed, Seller hereby represents and
warrants to Acquirer:
(a) ORGANIZATION, STANDING AND AUTHORITY. Seller is a
corporation duly organized, validly existing and in good standing under the laws
of the State of California. Seller is duly registered as a bank holding company
under the Bank Holding Company Act of 1956, as amended. Seller is duly licensed
and qualified to do business and is in good standing in the states of the United
States and any foreign jurisdictions where its ownership or leasing of property
or assets or the conduct of its business requires it to be so licensed and
qualified. Seller has in effect all federal, state, local, and foreign
governmental authorizations necessary for it to own or lease its properties and
assets and to carry on its business as it is now conducted. The copies of the
Seller Articles and Seller By-Laws which have been provided to Acquirer prior to
the date of this Agreement are correct and complete and reflect all amendments
made thereto through the date hereof. True and correct copies of the minute
books of Seller have been made available to Acquirer and fairly and accurately
reflect all material corporate action taken by the Seller Board and the
shareholders of Seller since inception.
(b) SELLER CAPITAL STOCK. As of the date of this Agreement,
the authorized capital stock of Seller consists solely of 20,000,000 shares of
Seller Common Stock and 10,000,000 shares of preferred stock (the "Seller
Preferred Stock"). As of June 26, 2000, there were 6,907,766 shares of Seller
Common Stock and no shares of Seller Preferred Stock issued and outstanding. As
of the date hereof no shares of Seller Common Stock were held in treasury by
Seller or otherwise owned by Seller. As of the date of this Agreement, no shares
of Seller Common Stock were reserved for issuance, except (i) a total of 343,532
shares of Seller Common Stock were reserved for issuance upon the exercise of
outstanding stock options or stock purchases pursuant to the Seller Plans and
(ii) a total of 212,369 shares of Seller Common Stock were reserved for issuance
under stock options or stock purchases pursuant to the Seller Plans. Seller has
provided or made available to Acquirer true and correct copies of all such
agreements, arrangements (including all stock option plans) or commitments
referred to above. All of the issued and outstanding shares of Seller Common
Stock have been duly authorized and validly issued and are fully paid,
nonassessable and free of preemptive rights. As of the date of this Agreement,
except as referred to above or as Previously Disclosed, Seller does not have any
Rights issued or outstanding with respect to any shares of Seller Common Stock
or any other equity securities of Seller. Other than as described above, Seller
has not authorized or issued any indebtedness, instrument, contract or other
arrangement that could be treated as equity of the Seller under United States
federal income tax law. Additionally, Seller has no outstanding stock,
indebtedness, instrument, contract or arrangement that Seller has treated as
debt for United States federal income tax purposes but not debt for other
purposes.
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(c) SUBSIDIARIES; OWNERSHIP OF OTHER SECURITIES.
(i) (A) Seller has Previously Disclosed a list of all
of its Subsidiaries together with the jurisdiction of incorporation of
each such Subsidiary, (B) Seller owns, directly or indirectly, all of
the issued and outstanding capital stock of each of its Subsidiaries,
(C) no equity securities of any of its Subsidiaries are or may become
required to be issued (other than to it or its Subsidiaries) by reason
of any Rights, (D) there are no contracts, commitments, understandings
or arrangements by which any of such Subsidiaries is or may be bound to
sell or otherwise transfer any shares of the capital stock of any such
Subsidiaries (other than to it or its Subsidiaries), (E) there are no
contracts, commitments, understandings, or arrangements relating to its
rights to vote or to dispose of such shares (other than to it or its
Subsidiaries), and (F) all of the shares of capital stock of each such
Subsidiary held by it or its Subsidiaries are fully paid and (except
pursuant to 12 U.S.C. Section 55 or equivalent state statutes in the
case of bank Subsidiaries) nonassessable and are owned by it or its
Subsidiaries free and clear of any Liens.
(ii) Other than in a bona fide fiduciary capacity or
as a result of a debt previously contracted, none of Seller or its
Subsidiaries owns beneficially, directly or indirectly, any equity
securities or similar interests of any Person, or any interest in a
partnership or joint venture of any kind, other than (i) its
Subsidiaries or (ii) securities held pursuant to the asset liability
management policy of Seller.
(iii) Each of Seller's Subsidiaries has been duly
organized and is validly existing in good standing under the laws of
the jurisdiction of its incorporation, and is duly qualified to do
business and in good standing in the jurisdictions where its ownership
or leasing of property or the conduct of its business requires it to be
so qualified. Each of such Subsidiaries has in effect all federal,
state, local, and foreign governmental authorizations necessary for it
to own or lease its properties and assets and to carry on its business
as it is now conducted.
(d) CORPORATE POWER. Each of Seller and its Subsidiaries has
the corporate power and authority to carry on its business as it is now being
conducted and to own all of its properties and assets; and Seller has the
corporate power and authority to execute, deliver and perform its obligations
under this Agreement and to consummate the transactions contemplated hereby.
(e) CORPORATE AUTHORITY. Subject in the case of this Agreement
to receipt of the requisite approval by the holders of a majority of the
outstanding shares of Seller Common Stock entitled to vote thereon (which is the
only shareholder vote required thereon), this Agreement and the transactions
contemplated hereby have been authorized by all necessary corporate action of
each of Seller and the Seller Board on or prior to the date hereof and no other
corporate proceedings on the part of Seller are necessary to authorize this
Agreement and the transactions contemplated hereby. This Agreement is a valid
and legally binding obligation of Seller, enforceable in accordance with its
terms (except as enforceability may be limited by
17
applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent
transfer and similar laws of general applicability relating to or affecting
creditors' rights generally or by general equity principles). The Seller Board
has received the opinion of Sandler ▇'▇▇▇▇▇ & Partners, L.P. to the effect that
as of the date hereof the consideration to be received by the holders of Seller
Common Stock in the Merger is fair to the holders of Seller Common Stock from a
financial point of view.
(f) REGULATORY APPROVALS; NO DEFAULTS.
(i) No consents or approvals of, or filings or
registrations with, any Governmental Authority or any third party are
required to be made or obtained by Seller in connection with the
execution, delivery or performance by Seller of this Agreement or to
consummate the transactions contemplated hereby except for: (A) filings
of applications or notices with the FRB, the FDIC and the DFI; (B)
filings with the SEC and state securities authorities; (C) the approval
of this Agreement by the shareholders of Seller; and (D) the filing of
the agreement of merger and the certificate of merger as contemplated
in Section 2.01(b). As of the date hereof, Seller is not aware of any
reason why the approvals set forth in Section 7.01(b) will not be
received.
(ii) Subject to receipt of the regulatory approvals
referred to in the preceding paragraph, and the expiration of related
waiting periods, and required filings under federal and state
securities laws, the execution, delivery and performance of this
Agreement and the consummation of the transactions contemplated hereby
do not and will not:
(A) constitute a breach or violation of, or
a default under, or give rise to any Lien, any acceleration of
remedies or any right of termination under, any law, rule or
regulation or any judgment, decree, order, governmental permit
or license, or agreement, arrangement, understanding,
indenture or instrument of Seller or any of its Subsidiaries
or to which Seller or any of its Subsidiaries or any of their
respective properties is subject or bound,
(B) constitute a breach or violation of, or
a default under, the Seller Articles or the Seller By-Laws or
the certificate of incorporation or by-laws (or similar
governing documents) of any of Seller's Subsidiaries, or
(C) require any consent or approval under
any such law, rule, regulation, judgment, decree, order,
governmental permit or license, agreement, arrangement,
understanding, indenture or instrument.
(g) FINANCIAL REPORTS AND SEC DOCUMENTS. Seller registered its
Common Stock pursuant to Section 12(g) of the Exchange Act in 1999. The Annual
Report on Form 10-K for the fiscal year ended December 31, 1999, the Quarterly
Report on Form 10-Q for the quarter ended March 31, 2000, and all other reports,
registration statements, definitive proxy statements or information statements
filed or to be filed subsequent to December 31, 1999 under the Securities Act or
under Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act, in the form filed
18
or to be filed with the SEC (collectively, the "SEC Documents"), of Seller or
any of its Subsidiaries, as of the date filed (A) complied or will comply in all
material respects as to form with the applicable requirements under the
Securities Act or the Exchange Act, as the case may be, and (B) did not and will
not contain any untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading; and
each of the balance sheets contained in or incorporated by reference into any
such SEC Document of Seller or any of its Subsidiaries, including the related
notes and schedules thereto, fairly presents and will fairly present the
financial position of the entity or entities to which it relates as of its date,
and each of the statements of income and changes in shareholders' equity and
cash flows or equivalent statements in such SEC Documents of Seller or any of
its Subsidiaries (including any related notes and schedules thereto) fairly
presents and will fairly present the results of operations, changes in
shareholders' equity and changes in cash flows, as the case may be, of the
entity or entities to which it relates for the periods to which they relate, in
each case in accordance with GAAP consistently applied during the periods
involved, except in each case as may be noted therein, subject to normal
year-end audit adjustments in the case of unaudited statements.
(h) NO MATERIAL ADVERSE CHANGES. Since March 31, 2000, no
event has occurred or circumstance arisen that, individually or taken together
with all other facts, circumstances and events (described in any paragraph of
this Section 5.03 or otherwise), has had or would reasonably be expected to have
a Material Adverse Effect with respect to Seller and its Subsidiaries, taken as
a whole.
(i) ABSENCE OF UNDISCLOSED LIABILITIES. All of the obligations
or liabilities (whether accrued, absolute, contingent, unliquidated or
otherwise, whether due or to become due, and regardless of when asserted,
including Taxes with respect to or based upon transactions or events heretofore
occurring ("Liabilities"), required to be reflected in the balance sheets of
Seller and its Subsidiaries in accordance with GAAP have been so reflected.
Seller has no Liabilities except (a) as reflected in the consolidated balance
sheets of Seller and its Subsidiaries as of March 31, 2000 contained in Seller's
SEC Documents (the "Latest Seller Balance Sheet"), (b) Liabilities which have
arisen after the date of the Latest Seller Balance Sheet in the ordinary course
of business (including, without limitation, deposit obligations), none of which
(other than deposit obligations) is a material uninsured liability, and (c) as
otherwise Previously Disclosed.
(j) LITIGATION. No litigation, claim or other proceeding
before any court or Governmental Authority is pending against Seller or any of
its Subsidiaries and, to Seller's Knowledge, no such litigation, claim or other
proceeding has been threatened. None of Seller or its Subsidiaries is subject to
any outstanding order, writ, injunction or decree.
(k) REGULATORY MATTERS.
(i) None of Seller or its Subsidiaries is a party to
or subject to any order, decree, agreement, memorandum of understanding
or similar arrangement with, or a commitment letter or similar
submission to, or extraordinary supervisory letter from, any
Governmental Authority charged with the supervision or regulation of
financial institutions or issuers of securities or engaged in the
insurance of deposits (including,
19
without limitation, the DFI, the OCC, the FRB, the FDIC and/or any
other State regulatory agencies) (collectively, the "Regulatory
Authorities").
(ii) None of Seller or its Subsidiaries has been
advised by any Regulatory Authority that such Regulatory Authority is
contemplating issuing or requesting (or is considering the
appropriateness of issuing or requesting) any such order, decree,
agreement, memorandum of understanding, commitment letter, supervisory
letter or similar submission.
(iii) Since December 31, 1997, each of Seller and its
Subsidiaries has filed each report or other filing that it was required
to file with any federal or state banking or other applicable
Regulatory Authorities having jurisdiction over it (together with all
exhibits thereto, the "Seller Regulatory Reports"). Seller has provided
or made available to Acquirer copies of all of the Seller Regulatory
Reports. As of their respective dates or as subsequently amended prior
to the date hereof, each of the Seller Regulatory Reports was true and
correct and complied with the requirements of the applicable form for
each such Seller Regulatory Report.
(l) COMPLIANCE WITH LAWS; PERMITS. Each of Seller and its
Subsidiaries:
(i) is in compliance with all applicable federal,
state, local and foreign statutes, laws, regulations, ordinances,
rules, judgments, orders or decrees applicable thereto or to the
employees conducting such businesses on behalf of Seller and its
Subsidiaries, including, without limitation, to the extent applicable
if at all, the Equal Credit Opportunity Act, the Fair Housing Act, the
Community Reinvestment Act, the Occupational Safety and Health Act of
1970, the Federal Deposit Insurance Act, as amended, the Real Estate
Settlement Procedures Act, the Federal Reserve Act, the Home Mortgage
Disclosure Act of 1975, the Home Owners Loan Act (each as amended) and
all other applicable fair lending laws and other laws relating to the
business practices of Seller's bank Subsidiaries;
(ii) has all permits, licenses, authorizations,
orders and approvals of, and has made all filings, applications and
registrations with, all Governmental Authorities that are required in
order to permit it to own or lease its properties and to conduct its
businesses as presently conducted; all such permits, licenses,
certificates of authority, orders and approvals are in full force and
effect and, to Seller's Knowledge, no suspension or cancellation of any
of them is threatened;
(iii) is in compliance with the provisions of its
articles of incorporation or association or similar governing document
and its by-laws; and
(iv) has received, since December 31, 1997, no
notification or communication from any Governmental Authority (A)
asserting that Seller or any of its Subsidiaries is not in compliance
with any of the statutes, regulations or ordinances which such
Governmental Authority enforces, or (B) threatening to revoke any
license, franchise, permit or governmental authorization.
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(m) MATERIAL CONTRACTS; DEFAULTS. Except for those agreements
and other documents filed as exhibits to their respective SEC Documents, none of
Seller or its Subsidiaries is a party to, bound by or subject to any agreement,
contract, arrangement, commitment or understanding (whether written or oral)
that is a Material Contract. None of Seller or its Subsidiaries is in default
and no circumstances exist under which by notice or passage of time (or both) it
would be in default under any Material Contract to which it is a party, by which
its assets, business, or operations may be bound or affected, or under which it
or its assets, business, or operations receives benefits, and there has not
occurred any event that, with the lapse of time or the giving of notice or both,
would constitute such a default. To Seller's Knowledge, there has been no
default, cancellation or breach by any other party to any Material Contract to
which Seller or any of its Subsidiaries is a party. To Seller's Knowledge, no
material customer of Seller or its Subsidiaries has indicated that it will stop
or decrease the rate of business done with Seller or any of its Subsidiaries
(except for changes in the ordinary course of such business).
(n) NO BROKERS. No action has been taken by Seller or any of
its Subsidiaries that would give rise to any valid claim against any party
hereto for a brokerage commission, finder's fee or other like payment with
respect to the transactions contemplated by this Agreement, other than the fee
to be paid to Sandler ▇'▇▇▇▇▇ & Partners, L.P. as Previously Disclosed.
(o) EMPLOYEES. To Seller's Knowledge, as of the date of this
Agreement there is no announced resignation (and there have been no
communications to executive officers or directors of Seller or any of its
Subsidiaries that have indicated that any such resignation is likely) of any key
employee of Seller or any of its Subsidiaries. Seller has complied with all laws
relating to the employment of labor, including provisions thereof relating to
wages, hours, equal opportunity, collective bargaining and non-discrimination.
(p) EMPLOYEE BENEFIT PLANS.
(i) Seller's Disclosure Schedule contains a complete
list of all bonus, vacation, deferred compensation, pension,
retirement, profit-sharing, thrift, savings, employee stock ownership,
stock bonus, stock purchase, restricted stock, stock appreciation and
stock option plans, all employment or severance contracts, all medical,
dental, disability, severance, health and life plans, all other
employee benefit and fringe benefit plans, contracts or arrangements
and any "change of control" or similar provisions in any plan, contract
or arrangement maintained or contributed to by Seller or any of its
Subsidiaries for the benefit of officers, former officers, employees,
former employees, directors, former directors, or the beneficiaries of
any of the foregoing (collectively, "Compensation and Benefit Plans").
Under the applicable terms of the Compensation and Benefit Plans,
Seller may amend or terminate any such Compensation and Benefit Plans
at any time without incurring any liability thereunder, other than
liability for the payment of benefits due under the Compensation and
Benefit Plan at the time of such amendment or termination.
21
(ii) True and complete copies of the Compensation and
Benefit Plans, including, but not limited to, any trust instruments
and/or insurance contracts, if any, forming a part thereof, and all
amendments thereto have been supplied or made available to Acquirer.
(iii) Except as set forth in the Disclosure Schedule,
each of the Compensation and Benefit Plans has been administered in
accordance with the terms thereof. All "employee benefit plans" within
the meaning of Section 3(3) of ERISA, other than "multi-employer plans"
within the meaning of Section 3(37) of ERISA ("Multiemployer Plans"),
covering employees or former employees of Seller and its Subsidiaries
(its "Plans"), to the extent subject to ERISA, are in material
compliance with ERISA, the Code, the Age Discrimination in Employment
Act and other applicable laws. Each Compensation and Benefit Plan of
Seller or its Subsidiaries which is an "employee pension benefit plan"
within the meaning of Section 3(2) of ERISA (a "Pension Plan") and
which is intended to be qualified under Section 401(a) of the Code has
received a favorable determination letter from the Internal Revenue
Service, any voluntary employees' beneficiary association used to fund
Compensation and Benefit Plans has received an exemption letter from
the Internal Revenue Service, and Seller is not aware of any
circumstances reasonably likely to result in the revocation or denial
of any such favorable determination letter. There is no pending or, to
its knowledge, threatened litigation or governmental audit, examination
or investigation relating to the Plans.
(iv) No Pension Plan subject to Title IV of ERISA has
been or is currently maintained by Seller or any of its Subsidiaries or
by any entity which is considered one employer with Seller under
Section 4001(a)(14) of ERISA or Section 414 of the Code (an "ERISA
Affiliate"). Neither Seller nor any of its present or former
Subsidiaries nor any ERISA Affiliate of it or any of its Subsidiaries
presently contributes to a Multiemployer Plan or a multiple employer
plan (as described in Section 4064(a) of ERISA), nor have they
contributed to such a plan within this calendar year and the preceding
five calendar years.
(v) All contributions, premiums and payments required
to have been made under the terms of any Compensation and Benefit Plan
of Seller or any of its Subsidiaries have been made. Neither any
Pension Plan of Seller or any of its Subsidiaries nor any
single-employer plan of an ERISA Affiliate of Seller is subject to the
funding requirements of Section 412 of the Code or Section 302 of
ERISA.
(vi) Except as set forth in Seller's Disclosure
Schedule, neither Seller nor any of its Subsidiaries has any
obligations under any Compensation and Benefit Plans to provide
benefits, including death or medical benefits, with respect to
employees of it or its Subsidiaries beyond their retirement or other
termination of service other than (A) coverage mandated by Part 6 of
Title I of ERISA or Section 4980B of the Code or applicable state law,
(B) retirement or death benefits under any employee pension benefit
plan (as defined under Section 3(2) of ERISA), (C) disability benefits
under any employee welfare plan that have been fully provided for by
insurance or otherwise, or (D) benefits in the nature of severance pay.
22
(vii) Except as set forth in Seller's Disclosure
Schedule, neither the execution and delivery of this Agreement nor the
consummation of the transactions contemplated hereby will (A) result in
any payment (including, without limitation, severance, unemployment
compensation, golden parachute or otherwise) becoming due to any
current or former director or employee of it or any of its Subsidiaries
under any Compensation and Benefit Plan or otherwise from it or any of
its Subsidiaries, (B) increase any benefits otherwise payable under any
Compensation and Benefit Plan or (C) result in any acceleration of the
time of payment or vesting of any such benefit.
(viii) No Compensation and Benefit Plan, separately
or in the aggregate, requires or would result in the payment of any
"excess parachute payments" within the meaning of Section 280G of the
Code, and the consummation of the transactions contemplated by this
Agreement will not be a factor in causing payments to be made by
Acquirer or Seller that are not deductible (in whole or in part) under
Section 280G of the Code.
(q) LABOR MATTERS. None of Seller or its Subsidiaries is a
party to nor bound by any collective bargaining agreement, contract or other
agreement or understanding with a labor union or labor organization, nor is it
the subject of a proceeding asserting that it has committed an unfair labor
practice (within the meaning of the National Labor Relations Act) or seeking to
compel it to bargain with any labor organization as to wages or conditions of
employment, nor is there any strike or other labor dispute involving it or, to
Seller's Knowledge, threatened, nor to Seller's Knowledge is there any activity
involving any employee of Seller or any of its Subsidiaries seeking to certify a
collective bargaining unit or engaging in other organizational activity.
(r) PROPERTIES.
(i) Each of Seller and its Subsidiaries owns good and
marketable title to all of the real property and all of the personal
property, fixtures, furniture and equipment owned by it as reflected in
the Latest Seller Balance Sheet (other than real property reflected in
the Latest Seller Balance Sheet as OREO), free and clear of all liens
and encumbrances, except for (A) mortgages on real property as
Previously Disclosed, (B) encumbrances which do not materially affect
the value of, or interfere with the past or future use or ability to
convey, the property subject thereto or affected thereby, (C) liens for
current taxes and special assessments not yet due and payable, (D)
leasehold estates with respect to multi-tenant buildings owned by it,
(E) mechanic's, materialman's and other liens imposed by operation of
law, and (F) property disposed of since the date of the Latest Seller
Balance Sheet in the ordinary course of business; PROVIDED, HOWEVER,
that no disposal of any fee interest in real property housing Seller
branches, loan offices or offices engaged in Seller operations shall be
considered to be in the ordinary course of business.
(ii) Seller has previously made available to Acquirer
complete and accurate copies of each of the real estate leases of
Seller or any of its Subsidiaries, including all amendments and
modifications thereto (such leases, as amended and
23
modified, the "Leases"). As of the date of this Agreement, the Leases
are in full force and effect, and Seller or such Subsidiary, as
applicable, has valid and existing leasehold interests under the Leases
for the terms set forth therein. With respect to the Leases, none of
Seller or its Subsidiaries is in default, and, to Seller's Knowledge,
none of the other parties to any of the Leases is in default, and, to
Seller's Knowledge, no circumstances (not in the control of Seller)
exist which could result in such a default under any of such Leases.
(iii) The rent rolls previously made available to
Acquirer are true and correct in all material respects and describe all
occupancies and the material terms of each occupancy as of the dates
thereof.
(iv) All of the buildings, fixtures, furniture and
equipment necessary for the conduct of the business of Seller and its
Subsidiaries are in good condition and repair, ordinary wear and tear
excepted, and are usable in the ordinary course of business. Each of
Seller and its Subsidiaries owns, or leases under valid leases, all
buildings, fixtures, furniture, personal property, land improvements
and equipment necessary for the conduct of its business as it is
presently being conducted.
(s) ENVIRONMENTAL MATTERS. To Seller's Knowledge, neither the
conduct nor operation of Seller or any of its Subsidiaries nor any condition of
any property presently or previously owned, leased or operated by it (including,
without limitation, in a fiduciary or agency capacity), violates or violated
Environmental Laws and to Seller's Knowledge, no condition has existed or event
has occurred with respect to it or any such property that, with notice or the
passage of time, or both, is reasonably likely to result in liability under
Environmental Laws. None of Seller or any of its Subsidiaries has received any
written notice from any Person that it or the operation or condition of any
property ever owned, leased, operated, or held as collateral or in a fiduciary
capacity by it is or was in violation of or otherwise is alleged to have
liability under any Environmental Law, including, but not limited to,
responsibility (or potential responsibility) for the cleanup or other
remediation of any pollutants, contaminants, or hazardous or toxic wastes,
substances or materials at, on, beneath, or originating from, any such property.
To Seller's Knowledge, no Hazardous Substances (as defined below) have been
deposited or disposed of in, on or under Seller's or any Subsidiary's owned or
leased properties (including properties owned, managed or controlled by Seller
or any Subsidiary in connection with its lending or fiduciary operations). As
used herein, the term "Environmental Law" means any federal, state or local law,
regulation, order, decree, permit, authorization, opinion, common law or agency
requirement relating to:
(i) the protection or restoration of the environment,
health, safety, or natural resources;
(ii) the handling, use, presence, disposal, release
or threatened release of any Hazardous Substance; or
24
(iii) noise, odor, wetlands, indoor air, pollution,
contamination or any injury or threat of injury to persons or property
in connection with any Hazardous Substance.
As used herein, the term "Hazardous Substance" means any substance in any
concentration that is:
(i) listed, classified or regulated pursuant to any
Environmental Law;
(ii) any petroleum product or by-product,
asbestos-containing material, lead-containing paint or plumbing,
polychlorinated biphenyls, radioactive materials or radon; or
(iii) any other substance which is or may be the
subject of regulatory action by any Governmental Authority in
connection with any Environmental Law.
(t) TAX MATTERS. Each of Seller and its Subsidiaries and all
members of any consolidated, affiliated, combined or unitary group of which
Seller or any of its Subsidiaries is or at any time was a member have filed or
will file all Tax Returns required to be filed (taking into account permissible
extensions) by them on or prior to the Effective Time, and have paid (or have
accrued or will accrue, prior to the Effective Time, amounts for the payment of)
all Taxes relating to the time periods covered by such returns and reports. The
accrued taxes payable accounts for Taxes reflected on the Latest Seller Balance
Sheet (or the notes thereto) are sufficient for the payment of all unpaid Taxes
of Seller and its Subsidiaries accrued for or applicable to all periods ended on
or prior to the date of the Latest Seller Balance Sheet or which may
subsequently be determined to be owing with respect to any such period. None of
Seller or its Subsidiaries has waived any statute of limitations with respect to
Taxes or agreed to any extension of time with respect to an assessment or
deficiency for Taxes. Each of Seller and its Subsidiaries has paid or will pay
in a timely manner and as required by law all Taxes due and payable by it or
which it is obligated to withhold from amounts owing to any employee or third
party. All Taxes which will be due and payable, whether now or hereafter, for
any period ending on, prior to or including the Effective Time, shall have been
paid by or on behalf of Seller and its Subsidiaries or shall be reflected on the
books of Seller and its Subsidiaries as an accrued Tax liability determined in a
manner which is consistent with past practices and the Latest Balance Sheets,
without taking account of the Merger. There are no unresolved questions, claims
or disputes asserted by any relevant taxing authority concerning the liability
for Taxes of Seller or any of its Subsidiaries. None of Seller or its
Subsidiaries has made an election under Section 341(f) of the Code for any
taxable years not yet closed for statute of limitations purposes. In the five
years prior to the date of this Agreement, no demand or claim has been made
against Seller or any of its Subsidiaries with respect to any Taxes arising out
of membership or participation in any consolidated, affiliated, combined or
unitary group of which Seller or any of its Subsidiaries was at any time a
member. As of the date hereof, Seller has no reason to believe that any
conditions exist that might prevent or impede the Merger from qualifying as a
reorganization within the meaning of Section 368 of the Code.
25
(u) RISK MANAGEMENT INSTRUMENTS. All interest rate swaps,
caps, floors, option agreements, futures and forward contracts and other similar
risk management arrangements, whether entered into for Seller's or any of its
Subsidiaries' own account, or for the account of one or more of its customers
(all of which are listed on Seller's Disclosure Schedule), if any, were entered
into:
(i) in accordance with prudent business practices and
all applicable laws, rules, regulations and regulatory policies, and
(ii) with counterparties believed to be financially
responsible at the time;
and each of them constitutes the valid and legally binding obligation of the
other party thereto enforceable in accordance with its terms (except as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium, fraudulent transfer and similar laws of general
applicability relating to or affecting creditors' rights generally or by general
equity principles) and is in full force and effect.
None of Seller or its Subsidiaries, or to Seller's knowledge, any other party
thereto, is in breach of any of its obligations under any such agreement or
arrangement.
(v) BOOKS AND RECORDS. The books and records of each of Seller
and its Subsidiaries prepared on or after December 31, 1996, have been fully,
properly and accurately maintained in all material respects, and there are no
material inaccuracies or discrepancies of any kind contained or reflected
therein.
(w) LOAN PORTFOLIO.
(i) None of Seller or its Subsidiaries is a party to
any written or oral (A) loan agreement, note or borrowing arrangement
(including, without limitation, leases, credit enhancements,
commitments, guarantees and interest-bearing assets) reflected as an
asset, in the Seller's Financial Statements as of March 31, 2000
(collectively, "Loans"), as to which the unpaid unguaranteed principal
balance of such Loan the obligor was, as of March 31, 2000, over 90
days delinquent in payment of principal or interest or in default of
any other provision, or (B) Loan with any director, executive officer
or five percent or greater shareholder of Seller or any of its
Subsidiaries, or to Seller's Knowledge, any Person controlling,
controlled by or under common control with any of the foregoing.
Seller's Disclosure Schedule sets forth all of the Loans of Seller or
any of its Subsidiaries that as of March 31, 2000, were classified by
any bank examiner (whether regulatory or internal) as "Other Loans
Specially Mentioned", "Special Mention", "Substandard", "Doubtful",
"Loss", "Classified", "Criticized", "Credit Risk Assets", "Concerned
Loans", "Watch List" or words of similar import, together with the
principal amount of and accrued and unpaid interest on each such Loan
and the identity of the borrower thereunder, (y) by category of Loan
(i.e., commercial, consumer, etc.), all of the other Loans of Seller or
any of its Subsidiaries that as of March 31, 2000, were classified as
such, together with the aggregate principal amount of and accrued and
unpaid interest
26
on such Loans by category and (z) each asset of Seller that as of March
31, 2000, was classified as "Other Real Estate Owned" and the book
value thereof.
(ii) The documentation relating to each Loan and
relating to all security interests, mortgages and other liens with
respect to all collateral for each such Loan, taken as a whole, is
adequate for the enforcement of the material terms of each such Loan
and of the related security interests, mortgages and other Liens. The
terms of each such Loan and of the related security interests,
mortgages and other Liens comply in all material respects with all
applicable laws, rules and regulations (including, without limitation,
laws, rules and regulations relating to the extension of credit).
(x) INSURANCE. Seller's Disclosure Schedule lists each
insurance policy maintained by Seller or any of its Subsidiaries with respect to
its properties and assets. Prior to the date hereof, Seller has provided or made
available to Acquirer complete and accurate copies of each of the insurance
policies described on Seller's Disclosure Schedule. All such insurance policies
are in full force and effect, and Seller is not in default with respect to its
obligations under any of such insurance policies.
(y) AFFILIATE TRANSACTIONS. None of Seller or its Subsidiaries
nor any of their respective executive officers or directors, or, to Seller's
Knowledge, any member of the immediate family of any such executive officer or
director (which for the purposes hereof shall mean a spouse, minor child or
adult child living at the home of any such executive officer or director), or,
to Seller's Knowledge, any entity which any of such persons "controls" (within
the meaning of Regulation O of the FRB), has any agreement with Seller or any of
its Subsidiaries (other than employment arrangements or deposit account
relationships) or any interest in any property, real, personal or mixed,
tangible or intangible, used in or pertaining to the business of Seller or any
of its Subsidiaries.
(z) ADMINISTRATION OF FIDUCIARY ACCOUNTS. Each of Seller and
its Subsidiaries has properly administered, in all respects material and which
could reasonably be expected to be material to the business, operations or
financial condition of Seller and its Subsidiaries, taken as a whole, all
accounts for which it acts as a fiduciary, including but not limited to accounts
for which it serves as a trustee, agent, custodian, personal representative,
guardian, conservator or investment advisor, in accordance with the terms of the
governing documents and applicable state and federal law and regulation and
common law. None of Seller or its Subsidiaries nor any of their respective
officers or directors has committed any breach of trust with respect to any such
fiduciary account which is material to or could reasonably be expected to be
material to the business, operations or financial condition of Seller and its
Subsidiaries, taken as a whole, and the accountings for each such fiduciary
account are true and correct in all material respects and accurately reflect the
assets of such fiduciary account in all material respects.
(aa) TAKEOVER LAWS. Seller has taken all action required to be
taken by it in order to exempt this Agreement and the transactions contemplated
hereby from the requirements of any applicable "moratorium", "control share",
"fair price" or other antitakeover laws and regulations of any state
(collectively, "Takeover Laws").
27
5.04 REPRESENTATIONS AND WARRANTIES OF ACQUIRER. Subject to Section
5.02, Acquirer hereby represents and warrants to Seller as follows:
(a) ORGANIZATION, STANDING AND AUTHORITY. Acquirer is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Delaware. Acquirer is duly registered as a bank holding company
under the Bank Holding Company Act of 1956, as amended. Acquirer and each of its
Significant Subsidiaries is duly licensed and qualified to do business and is in
good standing in the states of the United States and any foreign jurisdictions
where its ownership or leasing of property or assets or the conduct of its
business requires it to be so licensed and qualified. Acquirer has in effect all
federal, state, local, and foreign governmental authorizations necessary for it
to own or lease its properties and assets and to carry on its business as it is
now conducted.
(b) ACQUIRER CAPITAL STOCK. As of the date of this Agreement,
the authorized capital stock of Acquirer consists solely of 1,500,000,000 shares
of Acquirer Common Stock and 50,000,000 shares of preferred stock, par value
$1.00 per share ("Acquirer Preferred Stock"). As of May 31, 2000, there were
749,923,995 shares of Acquirer Common Stock and 54,620 shares of Acquirer
Preferred Stock issued and outstanding. As of May 31, 9,181,673 shares of
Acquirer Common Stock were held in treasury by Acquirer or otherwise owned by
Acquirer. As of such date, no shares of Acquirer Common Stock or Acquirer
Preferred Stock were reserved for issuance, except that 100,003,205 shares of
Acquirer Common Stock were reserved for issuance pursuant to Acquirer's employee
and director stock purchase and option plans, dividend reinvestment plan and
Term Participating Preferred Stock rights, 217,860 shares were reserved for
issuance under outstanding warrants to purchase Acquirer Common Stock and
45,000,000 shares were reserved for issuance upon exercise of the Periodic Stock
Purchase Rights and Risk Event Warrants of Acquirer. As of March 31, 2000,
12,750 shares of Acquirer Preferred were Stock reserved for issuance. All of the
issued and outstanding shares of Acquirer Common Stock have been duly authorized
and validly issued and are fully paid, nonassessable and free of preemptive
rights, with no personal liability attaching to the ownership thereof. As of the
date of this Agreement, except as referred to above, Acquirer does not have any
Rights issued or outstanding with respect to any shares of Acquirer Common Stock
or Acquirer Preferred Stock or any other equity securities of Acquirer. The
shares of Acquirer Common Stock to be issued pursuant to the Merger will be duly
authorized and validly issued and, at the Effective Time, all such shares will
be fully paid, nonassessable and free of preemptive rights, with no personal
liability attaching to the ownership thereof.
(c) CORPORATE POWER. Each of Acquirer and its Subsidiaries has
the corporate power and authority to carry on its business as it is now being
conducted and to own all of its properties and assets; and Acquirer has the
corporate power and authority to execute, deliver and perform its obligations
under this Agreement and to consummate the transactions contemplated hereby.
(d) CORPORATE AUTHORITY. This Agreement and the transactions
contemplated hereby have been authorized by all necessary corporate action of
each of Acquirer and the Acquirer Board on or prior to the date hereof and no
other corporate proceedings on the part of Acquirer are necessary to authorize
this Agreement and the transactions contemplated hereby.
28
This Agreement is a valid and legally binding agreement of Acquirer, enforceable
in accordance with its terms (except as enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent
transfer and similar laws of general applicability relating to or affecting
creditors' rights or by general equity principles).
(e) REGULATORY APPROVALS; NO DEFAULTS.
(i) No consents or approvals of, or filings or
registrations with, any Governmental Authority or with any third party
are required to be made or obtained by Acquirer or any of its
Subsidiaries in connection with the execution, delivery or performance
by Acquirer of this Agreement or to consummate the transactions
contemplated hereby except for: (A) filings of applications or notices
with the FRB, the OCC and the DFI; (B) filings with the SEC and state
securities authorities and the approval of the listing on the NYSE of
Acquirer Common Stock to be issued in the Merger; and (C) the filing of
the agreement of merger and the certificate of merger as contemplated
in Section 2.01(b). As of the date hereof, Acquirer is not aware of any
reason why the approvals set forth in Section 7.01(b) will not be
received.
(ii) Subject to receipt of the regulatory approvals
referred to in the preceding paragraph and the expiration of related
waiting periods, and required filings under federal and state
securities laws, the execution, delivery and performance of this
Agreement and the consummation of the transactions contemplated hereby
do not and will not:
(A) constitute a breach or violation of, or
a default under, or give rise to any Lien, any acceleration of
remedies or any right of termination under, any law, rule or
regulation or any judgment, decree, order, governmental permit
or license, or agreement, indenture or instrument of Acquirer
or of any of its Subsidiaries or to which Acquirer or any of
its Subsidiaries or any of their respective properties is
subject or bound;
(B) constitute a breach or violation of, or
a default under, the certificate of incorporation or by-laws
(or similar governing documents) of Acquirer or any of its
Subsidiaries; or
(C) require any consent or approval under
any such law, rule, regulation, judgment, decree, order,
governmental permit or license, agreement, indenture or
instrument.
(f) FINANCIAL REPORTS AND SEC DOCUMENTS. The SEC Documents of
Acquirer or any of its Subsidiaries, as of the date filed: (A) complied or will
comply in all material respects as to form with the applicable requirements
under the Securities Act or the Exchange Act, as the case may be, and (B) did
not and will not contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading; and each of the balance sheets contained in or incorporated by
reference into any such SEC Document of Acquirer or any of its Subsidiaries,
including the related notes and schedules thereto, fairly presents and will
fairly present the financial position of the entity or entities to which it
relates as of its date, and each of the statements of income and changes in
shareholders' equity and cash flows or equivalent statements in such SEC
29
Documents of Acquirer or any of its Subsidiaries (including any related notes
and schedules thereto) fairly presents and will fairly present the results of
operations, changes in shareholders' equity and changes in cash flows, as the
case may be, of the entity or entities to which it relates for the periods to
which they relate, in each case in accordance with GAAP consistently applied
during the periods involved, except in each case as may be noted therein,
subject to normal year-end audit adjustments in the case of unaudited
statements.
(g) NO MATERIAL ADVERSE CHANGES. Except as Previously
Disclosed, since December 31, 1999, no event has occurred or circumstance arisen
that, individually or taken together with all other facts, circumstances and
events (described in any paragraph of this Section 5.04 or otherwise), has had
or would reasonably be expected to have a Material Adverse Effect with respect
to Acquirer and its Subsidiaries, taken as a whole.
(h) TAX MATTERS. As of the date hereof, Acquirer has no reason
to believe that any conditions exist that might prevent or impede the Merger
from qualifying as a reorganization within the meaning of Section 368 of the
Code.
(i) REGULATORY MATTERS.
(i) Since December 31, 1997, each of Acquirer and its
Subsidiaries has filed each report or other filing that it was required
to file with any federal or state banking or other applicable
Regulatory Authorities having jurisdiction over it (together with all
exhibits thereto, the "Acquirer Regulatory Reports"). As of their
respective dates or as subsequently amended prior to the date hereof,
each of the Acquirer Regulatory Reports was true and correct and
complied with the requirements of the applicable form for each such
Acquirer Regulatory Report.
(ii) None of Acquirer or its Subsidiaries or any of
their properties is a party to or is subject to any order, decree,
agreement, memorandum of understanding or similar arrangement with, or
a commitment letter or similar submission to, or extraordinary
supervisory letter from, any Regulatory Authority.
(iii) None of Acquirer or its Subsidiaries has been
advised by any Regulatory Authority that such Regulatory Authority is
contemplating issuing or requesting (or is considering the
appropriateness of issuing or requesting) any such order, decree,
agreement, memorandum of understanding, commitment letter, supervisory
letter or similar submission.
(j) LITIGATION. No litigation, claim or other proceeding
before any court or Governmental Authority is pending against Acquirer or any of
its Subsidiaries and, to Acquirer's knowledge, no such litigation, claim or
other proceeding has been threatened. None of Acquirer or its Subsidiaries is
subject to any outstanding order, writ, injunction or decree.
30
(k) COMPLIANCE WITH LAWS; PERMITS. Each of Acquirer and its
Subsidiaries:
(i) is in compliance with all applicable federal,
state, local and foreign statutes, laws, regulations, ordinances,
rules, judgments, orders or decrees applicable thereto or to the
employees conducting such businesses on behalf of Acquirer and its
Subsidiaries;
(ii) has all permits, licenses, authorizations,
orders and approvals of, and has made all filings, applications and
registrations with, all Governmental Authorities that are required in
order to permit it to own or lease its properties and to conduct its
businesses as presently conducted; all such permits, licenses,
certificates of authority, orders and approvals are in full force and
effect and, to Acquirer's knowledge, no suspension or cancellation of
any of them is threatened; and
(iii) is in compliance with the provisions of its
articles of incorporation or association or similar governing document
and its by-laws.
ARTICLE VI
COVENANTS
6.01 REASONABLE BEST EFFORTS. Subject to the terms and conditions of
this Agreement, each of Seller and Acquirer agrees to use its reasonable best
efforts in good faith to take, or cause to be taken, all actions, and to do, or
cause to be done, all things necessary, proper or desirable, or advisable under
applicable laws, so as to permit consummation of the Merger as promptly as
practicable and otherwise to enable consummation of the transactions
contemplated hereby and shall cooperate fully with the other party hereto to
that end.
6.02 SHAREHOLDER APPROVAL. Seller shall take, in accordance with
applicable law, applicable stock exchange or Nasdaq rules and the Seller
Articles and the Seller By-Laws, all action necessary to convene, an appropriate
meeting of shareholders of Seller to consider and vote upon (i) the approval of
the principal terms of this Agreement and (ii) any other matters required to be
approved by the shareholders of Seller for consummation of the Merger (including
any adjournment or postponement, the "Seller Meeting"), as promptly as
practicable after the Registration Statement is declared effective. Seller Board
shall recommend such approval, and Seller shall take all reasonable necessary
lawful action to solicit such approval by its shareholders. The Seller Board may
not withdraw or modify its recommendation except as expressly permitted by
Section 6.06(b).
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6.03 REGISTRATION STATEMENT.
(a) REGISTRATION STATEMENT. Acquirer and Seller agree to
cooperate in the preparation of a registration statement on Form S-4 or other
applicable form (the "Registration Statement") to be filed by Acquirer with the
SEC in connection with the issuance of Acquirer Common Stock in the Merger
(including the proxy statement and prospectus and other proxy solicitation
materials of Seller constituting a part thereof (the "Proxy Statement") and all
related documents). Seller agrees to file the Proxy Statement in preliminary
form with the SEC as soon as reasonably practicable, and Acquirer agrees to file
the Registration Statement with the SEC as soon as reasonably practicable after
any SEC comments with respect to the preliminary Proxy Statement are resolved.
Each of Seller and Acquirer agrees to use all reasonable efforts to cause the
Registration Statement to be declared effective under the Securities Act as
promptly as reasonably practicable after filing thereof. Acquirer also agrees to
use all reasonable efforts to obtain all necessary state securities law or "Blue
Sky" permits and approvals required to carry out the transactions contemplated
by this Agreement. Seller and Acquirer agree to furnish all information
concerning Seller or Acquirer, and their respective officers, directors and
shareholders as may be reasonably requested in connection with the foregoing.
(b) QUALITY OF INFORMATION. Each of Seller and Acquirer agrees
that none of the information supplied or to be supplied by it for inclusion or
incorporation by reference in:
(i) the Registration Statement will, at the time the
Registration Statement and each amendment or supplement thereto, if
any, becomes effective under the Securities Act, contain any untrue
statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements
therein not misleading, and
(ii) the Proxy Statement and any amendment or
supplement thereto will, at the date of mailing to shareholders and at
the time of the Seller Meeting, contain any untrue statement of a
material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein not misleading or
any statement which, in the light of the circumstances under which such
statement is made, will be false or misleading with respect to any
material fact, or which will omit to state any material fact necessary
in order to make the statements therein not false or misleading or
necessary to correct any statement in any earlier statement in the
Proxy Statement or any amendment or supplement thereto.
Each of Seller and Acquirer further agrees that if it shall become
aware prior to the Effective Date of any information furnished by it that would
cause any of the statements in the Proxy Statement to be false or misleading
with respect to any material fact, or that it has omitted to state any material
fact necessary to make the statements therein not false or misleading, it shall
promptly inform the other party thereof and to take the necessary steps to
correct the Proxy Statement and the Registration Statement.
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(c) NOTICES REGARDING REGISTRATION. Acquirer agrees to advise
Seller, promptly after Acquirer receives notice thereof, of the time when the
Registration Statement has become effective or any supplement or amendment has
been filed, of the issuance of any stop order or the suspension of the
qualification of Acquirer Common Stock for offering or sale in any jurisdiction,
of the initiation or threat of any proceeding for any such purpose, or of any
request by the SEC for the amendment or supplement of the Registration Statement
or for additional information.
6.04 PRESS RELEASES. The parties have mutually approved the joint press
release which shall be released promptly following the signing of this Agreement
by both parties. Except for the aforementioned press release, each of Seller and
Acquirer agrees that it will not, without the prior approval of the other party,
issue any press release or written statement for general circulation relating to
the transactions contemplated hereby, except as otherwise required by applicable
law or regulation or rules of the stock market where its securities are traded
(provided that the issuing party shall nevertheless provide the other party with
notice of, and the opportunity to review, any such press release or written
statement).
6.05 ACCESS; INFORMATION.
(a) ACCESS. Seller agrees that upon reasonable notice, it
shall afford Acquirer and Acquirer's officers, employees, counsel, accountants
and other authorized representatives, such access during normal business hours
throughout the period prior to the Effective Time to the books, records
(including, without limitation, tax returns and work papers of independent
auditors), properties, personnel and to such other information as Acquirer may
reasonably request and, during such period, Seller shall furnish promptly to
Acquirer (i) a copy of each material report, schedule and other document filed
by it pursuant to the requirements of federal or state securities or banking
laws, and (ii) all other information concerning the business, properties and
personnel of it as Acquirer may reasonably request. Seller shall not be required
to provide access to or to disclose information where such access or disclosure
would violate or prejudice the rights of its customers, jeopardize any
attorney-client privilege or contravene any law, rule, regulation, order,
judgment, decree, fiduciary duty or binding agreement entered into prior to the
date of this Agreement. The parties hereto will make appropriate substitute
disclosure arrangements under circumstances in which the restrictions of the
preceding sentence apply.
(b) CONFIDENTIALITY. All information furnished to Acquirer
pursuant to Section 6.05(a) shall be subject to, and Acquirer shall hold all
such information in confidence in accordance with, the provisions of the
confidentiality agreement dated May 25, 2000 (the "Acquirer Confidentiality
Agreement") between Acquirer and Seller. All information furnished to Seller by
Acquirer pursuant to or in connection with this Agreement shall be subject to,
and Seller shall hold all such information in confidence in accordance with, the
provisions of the confidentiality agreement dated June 13, 2000 (the "Seller
Confidentiality Agreement" and together with the Acquirer Confidentiality
Agreement, the "Confidentiality Agreements") between Acquirer and Seller.
(c) INVESTIGATION. No investigation by either party of the
business and affairs of the other party shall affect or be deemed to modify or
waive any representation, warranty,
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covenant or agreement in this Agreement, or the conditions to either party's
obligation to consummate the transactions contemplated by this Agreement.
6.06 ACQUISITION PROPOSALS.
(a) Seller shall not, and shall cause its Subsidiaries and its
and its Subsidiaries' officers, directors, agents, advisors and affiliates not
to, solicit or encourage inquiries or proposals with respect to, or engage in
any negotiations concerning, or provide any confidential information to, or have
any discussions with, any person relating to, any Takeover Proposal. Seller
shall immediately cease and cause to be terminated any activities, discussions
or negotiations conducted prior to the date of this Agreement with any parties
other than Acquirer with respect to any of the foregoing. Seller shall promptly
(within 24 hours) advise Acquirer following the receipt by Seller of any
Takeover Proposal and the substance thereof (including the identity of the
person making such Takeover Proposal), and advise the Acquirer of any
developments with respect to such Takeover Proposal immediately upon the
occurrence thereof. Notwithstanding the first sentence of this Section 6.06(a),
in the event that the Seller Board determines in good faith and in conformity
with the advice of outside counsel, after Seller has received an unsolicited
Takeover Proposal that is a Superior Proposal, that the failure to do so would
likely result in a breach of Seller Board's fiduciary duties to Seller's
shareholders, Seller may, in response to an unsolicited request therefor,
furnish information with respect to Seller to, and enter into discussions with,
the party making the Superior Proposal pursuant to a customary confidentiality
agreement.
(b) Except as expressly permitted by this Section 6.06(b), the
Seller Board may not (i) withdraw or modify, or propose publicly to withdraw or
modify, in a manner adverse to Acquirer, the approval or recommendation by the
Seller Board of the Merger or this Agreement, (ii) approve or recommend, or
propose publicly to approve or recommend, any Takeover Proposal, or (iii) cause
or authorize Seller to enter into any letter of intent, agreement in principle,
acquisition agreement or other similar agreement relating to any Takeover
Proposal. Notwithstanding the foregoing, in the event that prior to the date of
the Seller Meeting, the Seller Board determines in good faith, after the Seller
has received a Superior Proposal and in conformity with the advice of outside
counsel, that failure to do so would reasonably likely result in a breach of its
fiduciary duties to the Seller's shareholders under applicable law, the Seller
Board may upon not less than three business days notice to Acquirer of Seller
Board's intention to do so take any of the actions specified in (i) through
(iii) of the first sentence of this Section 6.06(b) in order concurrently to
enter into a definitive agreement with respect to a Superior Proposal, provided
it shall, concurrently with entering into such agreement, terminate this
Agreement pursuant to the provisions of Section 8.01(g) hereof and commit in
writing to pay or cause to be paid to Acquirer the Termination Fee required by
Section 8.03 hereof.
6.07 AFFILIATE AGREEMENTS. Seller shall use its reasonable best efforts
to cause each director, executive officer and other Person who is an "affiliate"
(for purposes of Rule 145 under the Securities Act) of Seller to execute and
deliver to Acquirer on or before the date of mailing of the Proxy Statement a
written agreement in the form of Exhibit A hereto.
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6.08 STOCK EXCHANGE LISTING. Acquirer agrees to use its reasonable best
efforts to list, prior to the Effective Date, on the NYSE, subject to official
notice of issuance, the shares of Acquirer Common Stock to be issued to the
holders of Seller Common Stock in the Merger, other than any shares to be issued
out of Acquirer's treasury for which such listing is not required.
6.09 REGULATORY APPLICATIONS.
(a) COOPERATION WITH FILINGS. Seller and Acquirer and their
respective Subsidiaries shall cooperate and use their respective reasonable best
efforts (i) to prepare all documentation, to effect all filings and to obtain
all permits, consents, approvals and authorizations of all third parties and
Regulatory Authorities necessary to consummate the transactions contemplated by
this Agreement, including, without limitation, any such approvals or
authorizations required by the FRB, the OCC, the DFI and any other applicable
Regulatory Authority, and (ii) to cause the Merger to be consummated as
expeditiously as reasonably practicable. Provided Seller has cooperated as
required above, Acquirer agrees to file the requisite applications to be filed
by it with the FRB, the OCC, the DFI and any other applicable Regulatory
Authority, as promptly as reasonably practicable. Each of Acquirer and Seller
shall have the right to review in advance, and to the extent practicable each
will consult with the other, in each case subject to applicable laws relating to
the exchange of information, with respect to, all material written information
submitted to any third party or any Regulatory Authority in connection with the
transactions contemplated by this Agreement. In exercising the foregoing right,
each of the parties hereto agrees to act reasonably and as promptly as
practicable. Each party hereto agrees that it will consult with the other party
hereto with respect to the obtaining of all material permits, consents,
approvals and authorizations of all third parties and Regulatory Authorities
necessary or advisable to consummate the transactions contemplated by this
Agreement and each party will keep the other party appraised of the status of
material matters relating to completion of the transactions contemplated hereby.
(b) AGREEMENT TO FURNISH INFORMATION. Each party agrees, upon
request, to furnish the other party with all information concerning itself, its
Subsidiaries, directors, officers and shareholders and such other matters as may
be reasonably necessary or advisable in connection with any filing, notice or
application made by or on behalf of such other party or any of its Subsidiaries
to any third party or Regulatory Authority. Any such information that is not
ultimately included in any publicly available filing, notice or application
shall be kept confidential in accordance with Section 6.05(b).
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6.10 INDEMNIFICATION; DIRECTORS' AND OFFICERS' INSURANCE.
(a) INDEMNIFICATION BY ACQUIRER. From and after the Effective
Time, Acquirer agrees to indemnify and hold harmless each present and former
director and officer of Seller and its Subsidiaries determined as of the
Effective Time (the "Indemnified Parties"), against any costs or expenses
(including reasonable attorneys' fees), judgments, fines, losses, claims,
damages or liabilities (collectively, "Costs") incurred in connection with any
actual or threatened claim, action, suit, proceeding or investigation, whether
civil, criminal, administrative or investigative, arising out of matters
existing or occurring at or prior to the Effective Time (including with respect
to this Agreement or any of the transactions contemplated hereby) to the fullest
extent permitted by the DGCL and the certificate of incorporation and bylaws of
Acquirer. Acquirer shall also advance expenses as incurred to the fullest extent
permitted under Delaware law, upon receipt of any undertaking required by
applicable law.
(b) INDEMNIFICATION PROCEDURE. Any Indemnified Party wishing
to claim indemnification under Section 6.10(a), upon learning of any such claim,
action, suit, proceeding or investigation, shall as promptly as possible notify
Acquirer thereof, but the failure to so notify shall not relieve Acquirer of any
liability it may have to such Indemnified Party if such failure does not
materially prejudice Acquirer. In the event of any such claim, action, suit,
proceeding or investigation (whether arising before or after the Effective
Time):
(i) Acquirer shall have the right to assume the
defense thereof and Acquirer shall not be liable to such Indemnified
Parties for any legal expenses of other counsel or any other expenses
subsequently incurred by such Indemnified Parties in connection with
the defense thereof, except that if Acquirer elects not to assume such
defense or counsel for the Indemnified Parties advises in writing that
there are issues which raise conflicts of interest between Acquirer and
the Indemnified Parties, the Indemnified Parties may retain counsel
satisfactory to them, and Acquirer shall pay the reasonable fees and
expenses of one such counsel for the Indemnified Parties in any
jurisdiction promptly as statements thereof are received;
(ii) the Indemnified Parties will cooperate in the
defense of any such matter; and
(iii) Acquirer shall not be liable for any settlement
effected without its prior written consent (which consent shall not be
unreasonably withheld); and provided, further, that Acquirer shall not
have any obligation hereunder to any Indemnified Party when and if a
court of competent jurisdiction shall ultimately determine, and such
determination shall have become final and nonappealable, that the
indemnification of such Indemnified Party in the manner contemplated
hereby is not permitted or is prohibited by applicable law.
(c) DIRECTORS' AND OFFICERS' LIABILITY INSURANCE. For a period
of six years after the Effective Date, Acquirer shall use its best efforts to
provide that portion of directors' and officers' liability insurance that serves
to reimburse officers and directors of Seller or any of
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its Subsidiaries (determined as of the Effective Time) with respect to claims
against such officers and directors arising from facts or events which occurred
on or before the Effective Time of at least the same coverage and amounts, and
containing terms and conditions no less advantageous, as that coverage currently
provided by Seller; provided, however, that in no event shall Acquirer be
required to expend more than 200% per annum of the current amount expended by
Seller (the "Insurance Amount") to maintain or procure such directors and
officers insurance coverage; provided, further, that if Acquirer is unable to
obtain the insurance called for by this Section 6.10(c), Acquirer shall use its
reasonable best efforts to obtain as much comparable insurance as is available
for the Insurance Amount; and provided, further, that officers and directors of
Seller or any of its Subsidiaries may be required to make application and
provide customary representations and warranties to Acquirer's insurance carrier
for the purpose of obtaining such insurance; and provided, further, that such
coverage will have a single aggregate for such six-year period in an amount not
less than the annual aggregate of such coverage currently provided by Seller.
(d) SUCCESSOR LIABILITY. If Acquirer or any of its successors
or assigns (i) shall consolidate with or merge into any other corporation or
entity and shall not be the continuing or surviving corporation or entity of
such consolidation or merger or (ii) shall transfer all or substantially all of
its properties and assets to any individual, corporation or other entity, then
and in each such case, proper provision shall be made so that the successors and
assigns of Acquirer shall assume the obligations set forth in this Section 6.10.
6.11 TAKEOVER LAWS; NO RIGHT TRIGGERED.
(a) No party shall take any action that would cause the
transactions contemplated by this Agreement to be subject to requirements
imposed by any Takeover Law and each of them shall take all necessary steps
within its control to exempt (or ensure the continued exemption of) the
transactions contemplated by this Agreement from, or if necessary challenge the
validity or applicability of, any applicable Takeover Law, as now or hereafter
in effect that purport to apply to this Agreement or the transactions
contemplated hereby.
(b) Seller shall take all reasonable steps necessary to ensure
that the entering into of this Agreement and the consummation of the
transactions contemplated hereby and any other action or combination of actions,
or any other transactions contemplated hereby, do not and will not result in the
grant of any rights to any Person (i) under the Seller Articles or the Seller
By-Laws or (ii) under any material agreement to which it or any of its
Subsidiaries is a party (except as expressly contemplated by the mandatory
provisions under the Seller Plans).
6.12 NOTIFICATION OF CERTAIN MATTERS. Each of Seller and Acquirer shall
give prompt notice to the other of any fact, event or circumstance known to it
that:
(i) individually or taken together with all other
facts, events and circumstances known to it, has had or is reasonably
likely to have a Material Adverse Effect, or
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(ii) would cause or constitute a material breach of
any of its representations, warranties, covenants or agreements
contained herein.
6.13 CERTAIN LOANS AND RELATED MATTERS . Seller will furnish to
Acquirer a complete and accurate list as of the end of each calendar month after
June 30, 2000, within 20 business days after the end of each such calendar
month, of (a) all of the periodic internal credit quality reports prepared
during such calendar month (which reports will be prepared in a manner
consistent with past practices) of Seller or any of its Subsidiaries, (b) all
loans of Seller or any of its Subsidiaries classified as non-accrual, as
restructured, as 90 days past due, as still accruing and doubtful of collection
or any comparable classification, (c) all OREO, including in-substance
foreclosures and real estate in judgment, (d) any current repurchase obligations
of Seller or any of its Subsidiaries with respect to any loans, loan
participations or state or municipal obligations or revenue bonds and (e) any
standby letters of credit issued by Seller or any of its Subsidiaries.
6.14 MONTHLY FINANCIAL STATEMENTS. Seller shall furnish Acquirer with
the balance sheets of Seller and each of its Subsidiaries as of the end of each
calendar month after June 30, 2000 and the related statements of income, within
20 business days after the end of each such calendar month. Such financial
statements shall be prepared on a basis consistent with the SEC Documents and on
a consistent basis during the periods involved and shall fairly present the
financial positions of Seller and its Subsidiaries as of the dates thereof and
the results of operations of Seller and its Subsidiaries for the periods then
ended.
6.15 ACCOUNTANTS' LETTERS. Each of Seller and Acquirer shall use
commercially reasonable efforts to cause to be delivered to the other party, and
such other party's directors and officers who sign the Registration Statement, a
letter of PricewaterhouseCoopers LLP and Ernst & Young LLP, respectively,
independent auditors, dated (i) the date on which the Registration Statement
shall become effective and (ii) a date shortly prior to the Effective Date, and
addressed to such other party, and such directors and officers, in form and
substance customary for "comfort" letters delivered by independent accountants
in accordance with Statement of Accounting Standards No. 72 subject to customary
qualifications applicable to the transactions of the type contemplated by this
Agreement.
6.16 TAX MATTERS. Seller shall file (or cause to be filed) at its own
expense, on or prior to the due date, all Tax returns of Seller and its
Subsidiaries, including all Compensation and Benefit Plan returns and reports,
for all Tax periods ending on or before the Effective Time where the due date
for such returns or reports (taking into account valid extensions of the
respective due dates) falls on or before the Effective Time; PROVIDED, HOWEVER,
that Seller shall not file (and shall cause not to be filed) any such Tax
returns, or other returns, elections or information statements with respect to
any liabilities for Taxes (other than federal, state or local sales, use,
withholding or employment tax returns or statements), or consent to any
adjustment or otherwise compromise or settle any matters with respect to Taxes,
without prior consultation with Acquirer; PROVIDED, FURTHER, that Seller shall
not make (and shall cause not to be made) any election or take any other
discretionary position with respect to Taxes, in a manner inconsistent with past
practices, without the prior written approval of Acquirer.
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6.17 ESTABLISHMENT OF ACCRUALS. If requested by Acquirer, on the
business day immediately prior to the Effective Time, Seller shall, consistent
with GAAP, establish such additional accruals and reserves as may be necessary
to conform its and its Subsidiaries accounting and credit loss reserve practices
and methods to those of Acquirer (as such practices and methods are to be
applied to Seller and its Subsidiaries from and after the Effective Time) and
reflect Acquirer's plans with respect to the conduct of Seller's and its
Subsidiaries' business following the Merger and to provide for the costs and
expenses relating to the consummation by Seller of the transactions contemplated
by this Agreement. The establishment of such accruals and reserves shall not, in
and of itself, constitute a breach of any representation or warranty of Seller
contained in this Agreement or constitute a material adverse change in the
business, operations or financial condition of Seller and its Subsidiaries,
taken as a whole.
6.18 COORDINATION OF DIVIDENDS. Until the Effective Time, Seller shall
coordinate with Acquirer the declaration of any dividends or other distributions
with respect to the Seller Common Stock and the record dates and payment dates
relating thereto, it being the intention of the parties that holders of shares
of Seller Common Stock shall not receive more than one dividend, or fail to
receive one dividend, for any single calendar quarter on their shares of Seller
Common Stock (including any shares of Acquirer Common Stock received in exchange
therefor in the Merger).
6.19 BENEFIT PLANS.
(a) Acquirer shall, commencing within a reasonable time after the
Effective Date and continuing for at least one year after the Effective Date,
cause former employees of Seller and its Subsidiaries who, on the Effective
Date, become employees of Acquirer, the Surviving Corporation, or the Surviving
Corporation's subsidiaries ("Continuing Employees"), to be provided with
compensation and employee benefit plans that are no less favorable in the
aggregate than those provided to other similarly situated employees of Acquirer
or the Surviving Corporation; provided, however, that it is understood and
agreed that Acquirer shall provide severance benefits under the General
Severance Pay Program of Acquirer (rather than any other severance pay program
that Acquirer may now maintain or hereafter establish, or the severance pay
program of Seller). From time to time after the Effective Date, Acquirer may, at
its sole discretion, cause all or any of the Compensation and Benefit Plans
maintained by Seller to be discontinued, or amended, so long as the foregoing
standard is still met by the aggregate of any remaining Compensation and Benefit
Plans and any other compensation and employee benefit plans of Acquirer, the
Surviving Corporation, or the Surviving Corporation's subsidiaries that are
provided to the Continuing Employees.
(b) If a Continuing Employee becomes a participant in any employee
benefit plan of Acquirer, the Surviving Corporation, or the Surviving
Corporation's subsidiaries, for which service is taken into account or
recognized, such Continuing Employee shall be given credit under such plan for
all service with Seller from not later than the Continuing Employee's most
recent date of hire prior to the Effective Date by Seller (as provided by Seller
to Acquirer prior to the Effective Date) for purposes of eligibility and
vesting, but not for the purposes of determining benefit accruals or the rate of
benefit accruals, provided that there be shall be no
39
obligation to duplicate any benefits provided under any Compensation and Benefit
Plan of Seller or its Subsidiaries that continues in effect following the
Effective Date.
(c) This Section 6.19 is an agreement solely between Seller and
Acquirer. Nothing in this Section 6.19, whether express or implied, shall be
considered to be a contract with any other person, or shall confer upon any
employee of Seller, Seller's Subsidiaries, the Acquirer, the Surviving
Corporation, or the Surviving Corporation's subsidiaries, any rights or remedies
that such person did not already have, including, but not limited to: (i) any
right to employment or recall, (ii) any right to continued employment, or (iii)
any right to claim any particular compensation, benefit or aggregation of
benefits of any kind or nature whatsoever.
6.20 EMPLOYMENT AND CONFIDENTIALITY/NONSOLICITATION AGREEMENTS.
Acquirer and Seller will each use their reasonable best efforts to cause to be
executed by Acquirer and certain key employees of Seller previously identified
by Acquirer and disclosed to Seller: (a) employment agreements, in the form and
containing the terms and conditions reasonably satisfactory to Acquirer, which
employment agreements shall replace the existing employment agreements of such
key employees, and (b) confidentiality/nonsolicitation agreements in the form
previously provided by Acquirer to Seller.
ARTICLE VII
CONDITIONS TO CONSUMMATION OF THE MERGER
7.01 CONDITIONS TO EACH PARTY'S OBLIGATION TO EFFECT THE MERGER. The
respective obligation of each of Acquirer and Seller to consummate the Merger is
subject to the fulfillment or written waiver by Acquirer and Seller prior to the
Effective Time of each of the following conditions:
(a) SHAREHOLDER APPROVAL. This Agreement and the Merger shall
have been duly adopted by the requisite vote of the shareholders of Seller.
(b) REGULATORY APPROVALS. All regulatory approvals required to
consummate the Merger and the other transactions contemplated hereby shall have
been obtained and shall remain in full force and effect and all statutory
waiting periods in respect thereof shall have expired. None of such approvals
shall contain any conditions or restrictions that Acquirer reasonably believes
will materially restrict or limit the business or activities of Acquirer, Seller
or any Subsidiary or have a Material Adverse Effect, or would be reasonably
likely to have a Material Adverse Effect, with respect to Acquirer, Seller or
the Surviving Corporation.
(c) NO INJUNCTION. No Governmental Authority of competent
jurisdiction shall have enacted, issued, promulgated, enforced or entered any
statute, rule or regulation, or any judgment, decree, injunction or other order
(whether temporary, preliminary or permanent) (an "Injunction") which is in
effect and prohibits consummation of the transactions contemplated by this
Agreement.
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(d) REGISTRATION STATEMENT; NYSE LISTING. The Registration
Statement shall have become effective under the Securities Act and no stop order
suspending the effectiveness of the Registration Statement shall have been
issued and no proceedings for that purpose shall have been initiated or
threatened by the SEC. The Acquirer Common Stock to be issued in the Merger
shall have been approved for listing on the NYSE, subject to official notice of
issuance.
(e) BLUE SKY APPROVALS. All permits and other authorizations
under state securities laws necessary to consummate the transactions
contemplated hereby and to issue the shares of Acquirer Common Stock to be
issued in the Merger shall have been received and be in full force and effect.
(f) NO PENDING GOVERNMENTAL ACTIONS. No proceeding initiated
by any Governmental Authority seeking an Injunction shall be pending.
7.02 CONDITIONS TO OBLIGATION OF SELLER. The obligation of Seller to
consummate the Merger is also subject to the fulfillment or written waiver by
Seller prior to the Effective Time of each of the following conditions:
(a) REPRESENTATIONS AND WARRANTIES. (i) Subject to Section
5.02, the representations and warranties of Acquirer set forth in this Agreement
shall be true and correct as of the date of this Agreement and as of the
Effective Date as though made on and as of the Effective Date (except that
representations and warranties that by their terms speak only as of the date of
this Agreement or some other date shall be true and correct as of such date);
and (ii) Seller shall have received a certificate, dated the Effective Date,
signed on behalf of Acquirer by the Chief Financial Officer of Acquirer to such
effect.
(b) PERFORMANCE OF OBLIGATIONS OF ACQUIRER. Acquirer shall
have performed in all material respects all obligations required to be performed
by it under this Agreement at or prior to the Effective Time, and Seller shall
have received a certificate, dated the Effective Date, signed on behalf of
Acquirer by the Chief Financial Officer of Acquirer to such effect.
(c) OPINION OF SELLER'S COUNSEL. Seller shall have received an
opinion from ▇▇▇▇ ▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇▇ LLP, counsel to Seller, dated as of the
Effective Time, substantially to the effect that, on the basis of the facts,
representations and assumptions set forth in such opinion which are consistent
with the state of facts existing at the Effective Time, the Merger will be
treated for Federal income tax purposes as a reorganization within the meaning
of Section 368(a) of the Code and that accordingly:
(i) No gain or loss will be recognized by Acquirer or
Seller as a result of the Merger;
(ii) No gain or loss will be recognized by the
shareholders of Seller who exchange their Seller Common Stock for
Acquirer Common Stock pursuant to the Merger (except with respect to
cash received in lieu of a fractional share interest in Acquirer Common
Stock);
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(iii) The tax basis of the Acquirer Common Stock
received by the shareholders who exchange all of their Seller Common
Stock in the Merger will be the same as the tax basis of the Seller
Common Stock surrendered in exchange therefor; and
(iv) The holding period of the Acquirer Common Stock
received by a shareholder of Seller pursuant to the Merger will include
the period during which the Seller Common Stock surrendered therefor
was held, provided the Seller Common Stock is a capital asset in the
hands of the shareholder of Seller at the time of the Merger.
In rendering such opinion, such counsel may require and rely upon
representations and covenants including those contained in certificates of
officers of Acquirer, Seller and others.
(d) MATERIAL ADVERSE CHANGE. Since the date of this Agreement,
there shall have been no material adverse change in, and no event, occurrence or
development in the business of Acquirer or any of its Subsidiaries that, taken
together with other events, occurrences and developments with respect to such
business, would have or would reasonably be expected to have a Material Adverse
Effect with respect to Acquirer and its Subsidiaries, taken as a whole.
7.03 CONDITIONS TO OBLIGATION OF ACQUIRER. The obligation of Acquirer
to consummate the Merger is also subject to the fulfillment or written waiver by
Acquirer prior to the Effective Time of each of the following conditions:
(a) REPRESENTATIONS AND WARRANTIES. (i) Subject to Section
5.02, the representations and warranties of Seller set forth in this Agreement
shall be true and correct as of the date of this Agreement and as of the
Effective Date as though made on and as of the Effective Date (except that
representations and warranties that by their terms speak only as of the date of
this Agreement or some other date shall be true and correct as of such date);
and (ii) Acquirer shall have received a certificate, dated the Effective Date,
signed on behalf of Seller by the Chief Financial Officer of Seller to such
effect.
(b) PERFORMANCE OF OBLIGATIONS OF SELLER. Seller shall have
performed in all material respects all obligations required to be performed by
it under this Agreement at or prior to the Effective Time; provided that Seller
shall have performed its agreements contained in Sections 4.01(c) and (d) in all
respects; and Acquirer shall have received a certificate, dated the Effective
Date, signed on behalf of Seller by Chief Financial Officer of Seller to such
effect.
(c) OPINION OF ACQUIRER'S COUNSEL. Acquirer shall have
received an opinion from ▇▇▇▇▇▇ & Whitney LLP, Minneapolis, Minnesota, counsel
to Acquirer, dated as of the Effective Time, substantially to the effect that,
on the basis of the facts, representations and assumptions set forth in such
opinion which are consistent with the state of facts existing at the Effective
Time, the Merger will be treated for Federal income tax purposes as a
reorganization within the meaning of Section 368(a) of the Code and that
accordingly:
(i) No gain or loss will be recognized by Acquirer or
Seller as a result of the Merger;
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(ii) No gain or loss will be recognized by the
shareholders of Seller who exchange their Seller Common Stock for
Acquirer Common Stock pursuant to the Merger (except with respect to
cash received in lieu of a fractional share interest in Acquirer Common
Stock);
(iii) The tax basis of the Acquirer Common Stock
received by the shareholders of Seller who exchange all of their Seller
Common Stock in the Merger will be the same as the tax basis of the
Seller Common Stock surrendered in exchange therefor; and
(iv) The holding period of the Acquirer Common Stock
received by a shareholder of Seller pursuant to the Merger will include
the period during which the Seller Common Stock surrendered therefor
was held, provided the Seller Common Stock is a capital asset in the
hands of the shareholder of Seller at the time of the Merger.
In rendering such opinion, such counsel may require and rely upon
representations and covenants including those contained in certificates of
officers of Acquirer, Seller, and others.
(d) MATERIAL ADVERSE CHANGE. Since the date of this Agreement,
there shall have been no material adverse change in, and no event, occurrence or
development in the business of Seller or any of its Subsidiaries that, taken
together with other events, occurrences and developments with respect to such
business, would have or would reasonably be expected to have a Material Adverse
Effect with respect to Seller and its Subsidiaries, taken as a whole.
ARTICLE VIII
TERMINATION
8.01 TERMINATION. This Agreement may be terminated, and the Merger may
be abandoned, whether before or after approval of the matters presented in
connection with the Merger by the shareholders of Seller, only as set forth
below:
(a) MUTUAL CONSENT. At any time prior to the Effective Time,
by the mutual consent of Acquirer and Seller.
(b) BREACH. At any time prior to the Effective Time, by
Acquirer or Seller, upon written notice to the other party, in the event of
either:
(i) a breach by the other party of any representation
or warranty contained herein (subject to the standard set forth in
Section 5.02), which breach cannot be or has not been cured within 30
days after the giving of written notice to the breaching party of such
breach, or
(ii) a breach by the other party of any of the
covenants or agreements contained herein, which breach cannot be or has
not been cured within 30 days after the giving of written notice to the
breaching party of such breach, provided that such breach
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(whether under (i) or (ii)) individually or in the aggregate with other
breaches, has had or is reasonably expected to have a Material Adverse
Effect on the breaching party.
(c) DELAY. At any time prior to the Effective Time, by
Acquirer or Seller, in the event that the Merger is not consummated by December
31, 2000, except to the extent that the failure of the Merger then to be
consummated arises out of or results from the failure of the party seeking to
terminate pursuant to this Section 8.01(c) to perform or observe the covenants
and agreements of such party set forth herein; provided, however,
notwithstanding the foregoing, in the event that the Merger is not consummated
by December 31, 2000 due principally to delays in obtaining regulatory approval
as a result of an announced, pending Takeover Proposal involving Acquirer
(involving at least a 25% equity interest in Acquirer), then either party shall
have the right to extend such December 31, 2000 deadline to no later than June
30, 2001 upon written notice to the other party.
(d) NO APPROVAL. By Seller or Acquirer, in the event:
(i) the approval of any Governmental Authority
required for consummation of the Merger and the other transactions
contemplated by this Agreement shall have been denied by final
nonappealable action of such Governmental Authority, or
(ii) the shareholder approval required by Section
7.01(a) herein is not obtained at the Seller Meeting or the Seller
Meeting is not called and held.
(e) FAILURE TO RECOMMEND, ETC. By Acquirer if (i) the Seller
Board shall have failed to make its recommendation referred to in Section 6.02,
withdrawn such recommendation or modified or changed such recommendation in a
manner adverse in any respect to the interests of Acquirer or recommended or
approved any Takeover Proposal by a party not affiliated with Acquirer or (ii)
Seller shall have entered into any agreement in principle or definitive
agreement with respect to any such Takeover Proposal or (iii) the Seller Board
or any committee thereof shall have resolved to do any of the foregoing.
(f) FAILURE OF CONDITION. By either Acquirer or Seller, if any
of the conditions to such party's obligation to consummate the transactions
contemplated in this Agreement shall have become impossible to satisfy.
(g) EXECUTION OF DEFINITIVE AGREEMENT BY SELLER. By Seller in
connection with entering into a definitive agreement providing for a Superior
Proposal in accordance with Section 6.06(b), provided Seller has complied with
all provisions in Section 6.06(b), including payment of the Termination Fee
required by Section 8.03.
8.02 EFFECT OF TERMINATION AND ABANDONMENT. In the event of termination
of this Agreement and the abandonment of the Merger pursuant to this Article
VIII, no party to this Agreement shall have any liability or further obligation
to any other party hereunder except (a) as set forth in Sections 8.03 and 9.01,
and (b) that termination will not relieve a breaching party from liability for
any willful breach of this Agreement giving rise to such termination.
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8.03 TERMINATION FEE. In the event that this Agreement is terminated:
(a) by Seller pursuant to Section 8.01(g),
(b) by Acquirer pursuant to Section 8.01(e), or
(c) by Acquirer pursuant to Section 8.01(b) or Section
8.01(d)(ii) and both (i) prior to such termination and after the date hereof, a
Takeover Proposal is publicly announced and (ii) a Takeover Proposal is
consummated, or an agreement providing for a Takeover Proposal is entered into,
on or prior to June 30, 2001.
then in any such case, and upon any closing of a transaction implementing a
Takeover Proposal, Seller shall promptly pay to Acquirer a fee of $5,000,000
(the "Termination Fee") in immediately available funds. Acquirer's right to
receive such fee, and ability to enforce the provisions of this Section 8.03
shall not be subject to approval by the shareholders of Seller. Upon and after
payment of the Termination Fee to Acquirer, Seller shall not have any liability
to Acquirer for any breach by Seller specified in Section 8.01(b).
ARTICLE IX
MISCELLANEOUS
9.01 SURVIVAL. No representations, warranties, agreements and covenants
contained in this Agreement shall survive the Effective Time (other than those
covenants and agreements which by their terms apply in whole or in part after
the Effective Time, and this Article IX which shall survive the Effective Time)
or the termination of this Agreement (other than Sections 6.05(b), 8.02 and
8.03, and this Article IX, each of which shall survive such termination).
9.02 WAIVER; AMENDMENT.
(a) At any time prior to the Effective Time, each of the
parties hereto, by action taken or authorized by its Board of Directors, may, to
the extent legally allowed, (i) extend the time for the performance of any of
the obligations or other acts of the other party hereto, (ii) waive any
inaccuracies in the representations and warranties of the other party contained
herein or in any document delivered pursuant hereto and (iii) waive compliance
with any of the agreements or conditions of the other party contained herein.
Any agreement on the part of a party hereto to any such extension or waiver
shall be valid only if set forth in a written instrument signed on behalf of
such party, but such extension or waiver or failure to insist on strict
compliance with an obligation, covenant, agreement or condition shall not
operate as a waiver of, or estoppel with respect to, any subsequent or other
failure.
(b) Prior to the Effective Time, any provision of this
Agreement may be amended or modified at any time, by an agreement in writing
between the parties hereto executed in the same manner as this Agreement, except
that after the Seller Meeting, this Agreement may not be amended if it would
violate the CGCL or reduce the amount or change the form of the consideration to
be received by Seller shareholders in the Merger.
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9.03 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to constitute an original.
9.04 GOVERNING LAW; WAIVER OF JURY TRIAL. This Agreement shall be
governed by, and interpreted in accordance with, the laws of the State of
Delaware applicable to contracts made and to be performed entirely within such
State (except to the extent that mandatory provisions of Federal law apply).
Each of the parties hereto irrevocably waives any and all right to trial by jury
in any legal proceeding arising out of or related to this Agreement or the
transactions contemplated thereby.
9.05 EXPENSES. Except as otherwise provided in Section 8.03 hereof,
each party hereto will bear all expenses incurred by it in connection with this
Agreement and the transactions contemplated hereby.
9.06 NOTICES. All notices, requests and other communications
hereunder to a party shall be in writing and shall be deemed given if
personally delivered, telecopied (with confirmation) or mailed by registered
or certified mail (return receipt requested) to such party at its address set
forth below or such other address as such party may specify by notice to the
parties hereto.
If to Seller, to: Scripps Financial Corporation
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, President
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to: ▇▇▇▇ ▇▇▇▇ ▇▇▇▇ & Friedenrich LLP
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇/▇▇▇▇▇▇▇ ▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
If to Acquirer, to: U.S. Bancorp
U.S. Bank Place
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇ ▇. Mitau, Esq.
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
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With a copy to: ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP
Pillsbury Center South
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
9.07 ENTIRE UNDERSTANDING; NO THIRD PARTY BENEFICIARIES. This Agreement
represents the entire understanding of the parties hereto with reference to the
transactions contemplated hereby and thereby and this Agreement supersedes any
and all other oral or written agreements heretofore made, in each case other
than the Confidentiality Agreements. Except as otherwise expressly provided
herein, nothing in this Agreement is intended to confer upon any Person, other
than the parties hereto or their respective successors, any rights, remedies,
obligations or liabilities under or by reason of this Agreement, except that
Section 6.10 shall inure to the benefit of the persons identified therein.
9.08 INTERPRETATION; EFFECT. When a reference is made in this
Agreement to Sections, Exhibits or Schedules, such reference shall be to a
Section of, or Exhibit or Schedule to, this Agreement unless otherwise
indicated. The table of contents and headings contained in this Agreement are
for reference purposes only and are not part of this Agreement. Whenever the
words "include," "includes" or "including" are used in this Agreement, they
shall be deemed to be followed by the words "without limitation." The phrases
"the date of this Agreement", "the date hereof" and terms of similar import,
unless the context otherwise requires, shall be deemed to refer to June 27,
2000.
9.09 ENFORCEMENT OF AGREEMENT. The parties hereto agree that
irreparable damage would occur in the event that the provisions contained in
Section 6.05(b) of this Agreement were not performed in accordance with their
respective specific terms or were otherwise breached. It is accordingly agreed
that the parties shall be entitled to an injunction or injunctions to prevent
breaches of Section 6.05(b) of this Agreement and to enforce specifically the
terms and provisions thereof in any court of the United States or any state
having jurisdiction, this being in addition to any other remedy to which they
are entitled at law or in equity.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed in counterparts by their duly authorized officers, all as of the day
and year first above written.
U.S. BANCORP
By
------------------------------------------
Name: ▇▇▇ ▇. Mitau
Title: Executive Vice President-Corporate
Development, General Counsel and
Secretary
SCRIPPS FINANCIAL CORPORATION
By
------------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: President and Chief Executive Officer
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