AGREEMENT AND PLAN OF REORGANIZATION
BY AND BETWEEN
FIRST MUTUAL BANCORP, INC.
AND
UNION PLANTERS CORPORATION
DATED AS OF JULY 2, 1998
TABLE OF CONTENTS
Page
ARTICLE 1 - TRANSACTIONS AND TERMS OF MERGER 1
1.1 MERGER 1
1.2 TIME AND PLACE OF CLOSING 2
1.3 EFFECTIVE TIME 2
1.4 EXECUTION OF STOCK OPTION AGREEMENT 2
1.5 RESTRUCTURE OF TRANSACTION 2
ARTICLE 2 - TERMS OF MERGER 2
2.1 CHARTER 2
2.2 BYLAWS 3
2.3 DIRECTORS AND OFFICERS 3
ARTICLE 3 - MANNER OF CONVERTING SHARES 3
3.1 CONVERSION OF SHARES 3
3.2 ANTI-DILUTION PROVISIONS 3
3.3 SHARES HELD BY MUTUAL OR ▇▇▇ ▇
3.4 FRACTIONAL SHARES 4
3.5 CONVERSION OF STOCK RIGHTS 4
ARTICLE 4 - EXCHANGE OF SHARES 4
4.1 EXCHANGE PROCEDURES 4
4.2 RIGHTS OF FORMER MUTUAL STOCKHOLDERS 5
ARTICLE 5 - REPRESENTATIONS AND WARRANTIES OF MUTUAL 5
5.1 ORGANIZATION, STANDING, AND POWER 5
5.2 AUTHORITY; NO BREACH BY AGREEMENT 5
5.3 CAPITAL STOCK 6
5.4 MUTUAL SUBSIDIARIES 7
5.5 SEC FILINGS; FINANCIAL STATEMENTS 7
5.6 ABSENCE OF UNDISCLOSED LIABILITIES 8
5.7 ABSENCE OF CERTAIN CHANGES OR EVENTS 8
5.8 TAX MATTERS 8
5.9 ASSETS 9
5.10 ENVIRONMENTAL MATTERS 9
5.11 COMPLIANCE WITH LAWS 10
5.12 LABOR RELATIONS 10
5.13 EMPLOYEE BENEFIT PLANS 11
5.14 MATERIAL CONTRACTS 13
5.15 LEGAL PROCEEDINGS 13
5.16 REPORTS 14
5.17 STATEMENTS TRUE AND CORRECT 14
5.18 TAX AND REGULATORY MATTERS 14
5.19 STATE TAKEOVER LAWS 14
5.20 CHARTER PROVISIONS 14
5.21 RIGHTS AGREEMENT 15
5.22 DERIVATIVES 15
5.23 YEAR 2000 15
ARTICLE 6 - REPRESENTATIONS AND WARRANTIES OF ▇▇▇ ▇▇
6.1 ORGANIZATION, STANDING, AND POWER 15
6.2 AUTHORITY; NO BREACH BY AGREEMENT 15
6.3 CAPITAL STOCK 16
6.4 UPC SUBSIDIARIES 16
6.5 SEC FILINGS; FINANCIAL STATEMENTS 17
6.6 ABSENCE OF UNDISCLOSED LIABILITIES 17
6.7 ABSENCE OF CERTAIN CHANGES OR EVENTS 17
6.8 TAX MATTERS 18
6.9 ASSETS 18
6.10 ENVIRONMENTAL MATTERS 19
6.11 COMPLIANCE WITH LAWS 20
6.12 LABOR RELATIONS 20
6.13 LEGAL PROCEEDINGS 20
6.14 REPORTS 20
6.15 STATEMENTS TRUE AND CORRECT 21
6.16 TAX AND REGULATORY MATTERS 21
6.17 EMPLOYEE BENEFIT PLANS 21
6.18 DERIVATIVES 22
6.19 YEAR 2000 22
ARTICLE 7 - CONDUCT OF BUSINESS PENDING CONSUMMATION 22
7.1 AFFIRMATIVE COVENANTS OF BOTH PARTIES 22
7.2 NEGATIVE COVENANTS OF MUTUAL 22
7.3 ADVERSE CHANGES IN CONDITION 24
7.4 REPORTS 24
ARTICLE 8 - ADDITIONAL AGREEMENTS 25
8.1 REGISTRATION STATEMENT; PROXY STATEMENT;
STOCKHOLDER APPROVAL 25
8.2 EXCHANGE LISTING 25
8.3 APPLICATIONS 25
8.4 FILINGS WITH STATE OFFICES 25
8.5 AGREEMENT AS TO EFFORTS TO CONSUMMATE 25
8.6 INVESTIGATION AND CONFIDENTIALITY 26
8.7 PRESS RELEASES 26
8.8 CERTAIN ACTIONS 26
8.9 TAX TREATMENT 27
8.10 STATE TAKEOVER LAWS 27
8.11 CHARTER PROVISIONS 27
8.12 AGREEMENT OF AFFILIATES 27
8.13 EMPLOYEE BENEFITS AND CONTRACTS 27
8.14 INDEMNIFICATION 28
8.15 CERTAIN MODIFICATIONS 29
ARTICLE 9 - CONDITIONS PRECEDENT TO OBLIGATIONS TO
CONSUMMATE 29
9.1 CONDITIONS TO OBLIGATIONS OF EACH PARTY 29
9.2 CONDITIONS TO OBLIGATIONS OF UPC 31
9.3 CONDITIONS TO OBLIGATIONS OF MUTUAL 31
ARTICLE 10 - TERMINATION 32
10.1 TERMINATION 32
10.2 EFFECT OF TERMINATION 33
10.3 NON-SURVIVAL OF REPRESENTATIONS AND COVENANTS 33
ARTICLE 11 - MISCELLANEOUS 34
11.1 DEFINITIONS 34
11.2 EXPENSES 40
11.3 BROKERS AND FINDERS 41
11.4 ENTIRE AGREEMENT 41
11.5 AMENDMENTS 41
11.6 WAIVERS 41
11.7 ASSIGNMENT 42
11.8 NOTICES 42
11.9 GOVERNING LAW 43
11.10 COUNTERPARTS 43
11.11 CAPTIONS 43
11.12 INTERPRETATIONS 43
11.13 ENFORCEMENT OF AGREEMENT 43
11.14 SEVERABILITY 43
LIST OF EXHIBITS
----------------
Exhibit 1 Stock Option Agreement
Exhibit 2 Plan of Merger
Exhibit 3 Affiliate Agreement
AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION (this
"Agreement") is made and entered into as of July 2, 1998, by and
between FIRST MUTUAL BANCORP, INC. ("Mutual"), a corporation
organized and existing under the Laws of the State of Delaware,
with its principal office located in Decatur, Illinois; and UNION
PLANTERS CORPORATION ("UPC"), a corporation organized and
existing under the Laws of the State of Tennessee, with its
principal office located in Memphis, Tennessee.
PREAMBLE
The Boards of Directors of Mutual and UPC are of the
opinion that the transactions described herein are in the best
interests of the parties to this Agreement and their respective
stockholders. This Agreement provides for the acquisition of
Mutual by UPC pursuant to the merger (the "Merger") of Mutual
with and into Union Planters Holding Corporation ("UPHC"), a
wholly-owned subsidiary of UPC organized under the Laws of the
State of Tennessee. At the effective time of the Merger, the
outstanding shares of the common stock of Mutual shall be
converted into shares of the common stock of UPC (except as
provided herein). As a result, stockholders of Mutual shall
become stockholders of UPC, and UPHC shall continue to conduct
the business and operations of Mutual as a wholly-owned
subsidiary of UPC. The transactions described in this Agreement
are subject to the approvals of the stockholders of Mutual, the
Board of Governors of the Federal Reserve System, and certain
state regulatory authorities, and the satisfaction of certain
other conditions described in this Agreement. It is the
intention of the parties to this Agreement that the Merger for
federal income tax purposes shall qualify as a "reorganization"
within the meaning of Section 368(a) of the Internal Revenue
Code.
Immediately after the execution and delivery of this
Agreement, as a condition and inducement to UPC's willingness to
enter into this Agreement, Mutual and UPC are entering into a
stock option agreement (the "Stock Option Agreement"), in
substantially the form of Exhibit 1, pursuant to which Mutual is
granting to UPC an option to purchase shares of Mutual Common
Stock.
Certain terms used in this Agreement are defined in
Section 11.1 of this Agreement.
NOW, THEREFORE, in consideration of the above and the
mutual warranties, representations, covenants, and agreements set
forth herein, the Parties agree as follows:
ARTICLE 1
TRANSACTIONS AND TERMS OF MERGER
1.1 MERGER. Subject to the terms and conditions of this
Agreement, at the Effective Time, Mutual shall be merged with and
into UPHC in accordance with the provisions of Section 252 of the
DGCL and with the effect provided in Section 259 of the DGCL and
in accordance with the provisions of Section ▇▇-▇▇-▇▇▇ of the
TBCA and with the effect provided in Section ▇▇-▇▇-▇▇▇ of the
TBCA (the "Merger"). UPHC shall be the Surviving Corporation
resulting from the Merger and shall continue to be governed by
the Laws of the State of Tennessee. The Merger shall be
consummated pursuant to the terms of this Agreement, which has
been approved and adopted
by the Board of Directors of Mutual and has been or will be
adopted by the Board of Directors of UPC, and the Plan of Merger,
in substantially the form of Exhibit 2, which has been approved
and adopted by the Board of Directors of Mutual and will be
approved and adopted by the Board of Directors of UPHC prior to
the Effective Time.
1.2 TIME AND PLACE OF CLOSING. The consummation of the
Merger (the "Closing") shall take place at 9:00 A.M. on the date
that the Effective Time occurs (or the immediately preceding day
if the Effective Time is earlier than 9:00 A.M.), or at such
other time as the Parties, acting through their duly authorized
officers, may mutually agree. The place of Closing shall be at
such location as may be mutually agreed upon by the Parties.
1.3 EFFECTIVE TIME. The Merger and the other transactions
contemplated by this Agreement shall become effective on the date
and at the time the Certificate of Merger shall become effective
with the Secretary of State of the State of Delaware and the
Articles of Merger shall become effective with the Secretary of
State of the State of Tennessee (the "Effective Time"). Subject
to the terms and conditions hereof, unless otherwise mutually
agreed upon in writing by the duly authorized officers of each
Party, the Parties shall use their reasonable efforts to cause
the Effective Time to occur on or before the 15th business day
(as designated by UPC) following the last to occur of (i) the
effective date (including expiration of any applicable waiting
period) of the last required Consent of any Regulatory Authority
having authority over and approving or exempting the Merger and
(ii) the date on which the stockholders of Mutual approve the
matters relating to this Agreement required to be approved by
such stockholders by applicable Law.
1.4 EXECUTION OF STOCK OPTION AGREEMENT. Immediately after
the execution of this Agreement and as a condition hereto, Mutual
is executing and delivering to UPC the Stock Option Agreement.
1.5 RESTRUCTURE OF TRANSACTION. UPC shall, in its
reasonable discretion, have the unilateral right to revise the
structure of the Merger contemplated by this Agreement in order
to achieve tax benefits or for any other reason which UPC may
deem advisable; provided, however, that UPC shall not have the
right, without the approval of the Board of Directors of Mutual,
to make any revision to the structure of the Merger which: (i)
changes the amount of the consideration which the holders of
shares of Mutual Common Stock are entitled to receive (determined
in the manner provided in Section 3.1 of this Agreement); (ii)
changes the intended tax-free effects of the Merger to UPC or the
holders of shares of Mutual Common Stock; (iii) would permit UPC
to pay the consideration other than by delivery of UPC Common
Stock registered with the SEC (in the manner described in Section
4.1 of this Agreement); (iv) would be materially adverse to the
interests of Mutual or holders of shares of Mutual Common Stock;
(v) would unreasonably impede or delay consummation of the
Merger; or (vi) would affect any of the provisions in Sections
8.13 or 8.14 of this Agreement. UPC may exercise this right of
revision by giving written notice to Mutual in the manner
provided in Section 11.8 of this Agreement which notice shall be
in the form of an amendment to this Agreement or in the form of
an Amended and Restated Agreement and Plan of Merger.
ARTICLE 2
TERMS OF MERGER
2.1 CHARTER. The Charter of UPHC in effect immediately
prior to the Effective Time shall be the Charter of the Surviving
Corporation after the Effective Time until otherwise amended or
repealed.
2.2 BYLAWS. The Bylaws of UPHC in effect immediately prior
to the Effective Time shall be the Bylaws of the Surviving
Corporation after the Effective Time until otherwise amended or
repealed.
2.3 DIRECTORS AND OFFICERS. The directors of UPHC in
office immediately prior to the Effective Time, together with
such additional individuals thereafter elected, shall serve as
the directors of the Surviving Corporation from and after the
Effective Time in accordance with the Bylaws of the Surviving
Corporation. The officers of UPHC in office immediately prior to
the Effective Time, together with such additional individuals
thereafter elected, shall serve as the officers of the Surviving
Corporation from and after the Effective Time in accordance with
the Bylaws of the Surviving Corporation.
ARTICLE 3
MANNER OF CONVERTING SHARES
3.1 CONVERSION OF SHARES. Subject to the provisions of
this Article 3, at the Effective Time, by virtue of the Merger
and without any action on the part of UPC or Mutual, or the
stockholders of either of the foregoing, the shares of the
constituent corporations shall be converted as follows:
(a) Each share of UPC Common Stock issued and
outstanding immediately prior to the Effective Time shall remain
issued and outstanding from and after the Effective Time.
(b) Each share of UPHC Common Stock issued and
outstanding immediately prior to the Effective Time shall remain
issued and outstanding from and after the Effective Time.
(c) Each share of Mutual Common Stock, but excluding
shares held by any Mutual Company or any UPC Company (in each
case other than in a fiduciary capacity or as a result of debts
previously contracted), issued and outstanding at the Effective
Time shall be converted into a fraction of a share of UPC Common
Stock equal to the quotient obtained (the "Exchange Ratio") by
dividing [i] $18.50 by [ii] the average of the daily last sales
prices of UPC Common Stock as reported on the NYSE (as reported
by The Wall Street Journal or, if not reported thereby, another
authoritative source chosen by UPC) for the 20 consecutive full
trading days in which such shares are traded on the NYSE
preceding the third business day prior to the Closing Date.
Pursuant to the UPC Rights Agreement, each share of UPC Common
Stock issued in connection with the Merger upon conversion of
Mutual Common Stock shall be accompanied by a UPC Right.
3.2 ANTI-DILUTION PROVISIONS. In the event Mutual changes
the number of shares of Mutual Common Stock issued and
outstanding prior to the Effective Time as a result of a stock
split, stock dividend, recapitalization, or similar transaction
with respect to such stock, the Exchange Ratio shall be
proportionately adjusted. In the event UPC changes the number of
shares of UPC Common Stock issued and outstanding prior to the
Effective Time as a result of a stock split, stock dividend,
recapitalization, or similar transaction with respect to such
stock and the record date therefor (in the case of a stock
dividend) or the effective date thereof (in the case of a stock
split or similar recapitalization for which a record date is not
established) shall be prior to the Effective Time, the Exchange
Ratio shall be proportionately adjusted.
3.3 SHARES HELD BY MUTUAL OR UPC. Each of the shares of
Mutual Common Stock issued but not outstanding or held by any
Mutual Company or by any UPC Company, in each case other than in
a fiduciary capacity or as a result of debts previously
contracted, shall be canceled and retired at the Effective Time
and no consideration shall be issued in exchange therefor.
3.4 FRACTIONAL SHARES. Notwithstanding any other provision
of this Agreement, each holder of shares of Mutual Common Stock
exchanged pursuant to the Merger who would otherwise have been
entitled to receive a fraction of a share of UPC Common Stock
(after taking into account all certificates delivered by such
holder) shall receive, in lieu thereof, cash (without interest)
in an amount equal to such fractional part of a share of UPC
Common Stock multiplied by the market value of one share of UPC
Common Stock at the Effective Time. The market value of one share
of UPC Common Stock at the Effective Time shall be the last sale
price of UPC Common Stock on the NYSE-Composite Transactions List
(as reported by The Wall Street Journal or, if not reported
thereby, any other authoritative source selected by UPC) on the
last trading day preceding the Effective Time. No such holder
will be entitled to dividends, voting rights, or any other rights
as a stockholder in respect of any fractional shares.
3.5 CONVERSION OF STOCK RIGHTS. At or prior to the
Closing, Mutual shall cause each option to purchase shares of
Mutual Common Stock granted by Mutual under the Mutual Stock
Plans, which are outstanding, whether or not then exercisable, to
be canceled in exchange for cash in an amount equal to the
product of (i) the total number of shares of Mutual Common Stock
subject to such option and (ii) the excess of $18.50 over the
exercise price per share subject to such option.
ARTICLE 4
EXCHANGE OF SHARES
4.1 EXCHANGE PROCEDURES. Promptly after the Effective
Time, UPC and Mutual shall cause the exchange agent selected by
UPC (the "Exchange Agent") to mail to the former stockholders of
Mutual appropriate transmittal materials (which shall specify
that delivery shall be effected, and risk of loss and title to
the certificates theretofore representing shares of Mutual Common
Stock shall pass, only upon proper delivery of such certificates
to the Exchange Agent). After the Effective Time, each holder of
shares of Mutual Common Stock (other than shares to be canceled
pursuant to Section 3.3 of this Agreement) issued and outstanding
at the Effective Time shall surrender the certificate or
certificates representing such shares to the Exchange Agent and
shall promptly upon surrender thereof receive in exchange
therefor the consideration provided in Section 3.1 of this
Agreement, together with all undelivered dividends or
distributions in respect of such shares (without interest
thereon) pursuant to Section 4.2 of this Agreement. To the
extent required by Section 3.4 of this Agreement, each holder of
shares of Mutual Common Stock issued and outstanding at the
Effective Time also shall receive, upon surrender of the
certificate or
certificates representing such shares, cash in lieu of any
fractional share of UPC Common Stock to which such holder may be
otherwise entitled (without interest). UPC shall not be
obligated to deliver the consideration to which any former holder
of Mutual Common Stock is entitled as a result of the Merger
until such holder surrenders such holder's certificate or
certificates representing the shares of Mutual Common Stock for
exchange as provided in this Section 4.1. The certificate or
certificates of Mutual Common Stock so surrendered shall be duly
endorsed as the Exchange Agent may require. Any other provision
of this Agreement notwithstanding, neither the Surviving
Corporation nor the Exchange Agent shall be liable to a holder of
Mutual Common Stock for any amounts paid or property delivered in
good faith to a public official pursuant to any applicable
abandoned property Law.
4.2 RIGHTS OF FORMER MUTUAL STOCKHOLDERS. At the Effective
Time, the stock transfer books of Mutual shall be closed as to
holders of Mutual Capital Stock immediately prior to the
Effective Time and no transfer of Mutual Capital Stock by any
such holder shall thereafter be made or recognized. Until
surrendered for exchange in accordance with the provisions of
Section 4.1 of this Agreement, each certificate theretofore
representing shares of Mutual Common Stock (other than shares to
be canceled pursuant to Section 3.3 of this Agreement) shall from
and after the Effective Time represent for all purposes only the
right to receive the consideration provided in Sections 3.1 and
3.4 of this Agreement in exchange therefor, subject, however, to
the Surviving Corporation's obligation to pay any dividends or
make any other distributions with a record date prior to the
Effective Time which have been declared or made by Mutual in
respect of such shares of Mutual Common Stock in accordance with
the terms of this Agreement and which remain unpaid at the
Effective Time. To the extent permitted by Law, former
stockholders of record of Mutual shall be entitled to vote after
the Effective Time at any meeting of UPC stockholders the number
of whole shares of UPC Common Stock into which their respective
shares of Mutual Common Stock are converted, regardless of
whether such holders have exchanged their certificates
representing Mutual Common Stock for certificates representing
UPC Common Stock in accordance with the provisions of this
Agreement. Whenever a dividend or other distribution is declared
by UPC on the UPC Common Stock, the record date for which is at
or after the Effective Time, the declaration shall include
dividends or other distributions on all shares issuable pursuant
to this Agreement, but beginning 30 days after the Effective Time
no dividend or other distribution payable to the holders of
record of UPC Common Stock as of any time subsequent to the
Effective Time shall be delivered to the holder of any
certificate representing shares of Mutual Common Stock issued and
outstanding at the Effective Time until such holder surrenders
such certificate for exchange as provided in Section 4.1 of this
Agreement. However, upon surrender of such Mutual Common Stock
certificate, both the UPC Common Stock certificate (together with
all such undelivered dividends or other distributions without
interest) and any undelivered dividends and cash payments to be
paid for fractional share interests (without interest) shall be
delivered and paid with respect to each share represented by such
certificate.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF MUTUAL
Except as set forth below and as set forth in the
Mutual Disclosure Memorandum referencing a specific section of
this Agreement, Mutual hereby represents and warrants to UPC as
follows:
5.1 ORGANIZATION, STANDING, AND POWER. Mutual is a
corporation duly organized and validly existing under the Laws of
the State of Delaware, and has the corporate power and authority
to carry on its business as now conducted and to own, lease, and
operate its Material Assets. Mutual is duly qualified or licensed
to transact business as a foreign corporation in the States of
the United States and foreign jurisdictions where the character
of its Assets or the nature or conduct of its business requires
it to be so qualified or licensed, except for such jurisdictions
in which the failure to be so qualified or licensed is not
reasonably likely to have, individually or in the aggregate, a
Material Adverse Effect on Mutual.
5.2 AUTHORITY; NO BREACH BY AGREEMENT.
(a) Mutual has the corporate power and authority
necessary to execute, deliver, and perform its obligations under
this Agreement and the Plan of Merger and to consummate the
transactions contemplated hereby and thereby. Except as set
forth in Section 5.2(a) of the Mutual Disclosure Memorandum, the
execution, delivery, and performance of this Agreement and the
Plan of Merger, and the consummation of the transactions
contemplated herein and therein, including the Merger, have been
duly and validly authorized by all necessary corporate action in
respect thereof on the part of Mutual, subject to the approval of
this Agreement and the Plan of Merger by holders of a majority of
the issued and outstanding shares of Mutual Common Stock, voting
together as one class, as required by Law, which is the only
stockholder vote required for approval of this Agreement and the
Plan of Merger and consummation of the Merger by Mutual. Subject
to such requisite stockholder approval and as set forth in
Section 5.2(a) of the Mutual Disclosure Memorandum, this
Agreement and the Plan of Merger represent legal, valid, and
binding obligations of Mutual, enforceable against Mutual in
accordance with their respective terms (except in all cases as
such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, receivership, conservatorship,
moratorium, or similar Laws affecting the enforcement of
creditors' rights generally and except that the availability of
the equitable remedy of specific performance or injunctive relief
is subject to the discretion of the court before which any
proceeding may be brought).
(b) Neither the execution and delivery of this
Agreement and the Plan of Merger by Mutual, nor the consummation
by Mutual of the transactions contemplated hereby or thereby, nor
compliance by Mutual with any of the provisions hereof or
thereof, will (i) conflict with or result in a breach of any
provision of Mutual's Certificate of Incorporation or Bylaws or
(ii) constitute or result in a Default under, or require any
Consent pursuant to, or result in the creation of any Lien on any
Asset of any Mutual Company under, any Contract or Permit of any
Mutual Company, where such Default or Lien, or any failure to
obtain such Consent, is reasonably likely to have, individually
or in the aggregate, a Material Adverse Effect on Mutual, or
(iii) subject to receipt of the requisite Consents referred to in
Section 9.1(b) of this Agreement, violate any Law or Order
applicable to any Mutual Company or any of their respective
Material Assets.
(c) Other than in connection or compliance with the
provisions of the Securities Laws and applicable state corporate
and securities Laws and rules of the Nasdaq, and other than
Consents required from Regulatory Authorities, and other than
notices to or filings with the Internal Revenue Service or the
Pension Benefit Guaranty Corporation with respect to any employee
benefit plans, or under the HSR Act, and other than Consents,
filings, or notifications which, if not obtained or made, are not
reasonably likely to have, individually or in the aggregate, a
Material Adverse Effect on Mutual, no notice to, filing with, or
Consent of, any public body or authority is necessary for the
consummation by Mutual of the Merger and the other transactions
contemplated in this Agreement and the Plan of Merger.
5.3 CAPITAL STOCK.
(a) The authorized capital stock of Mutual consists,
as of the date of this Agreement, of (i) 8,000,000 shares of
Mutual Common Stock, of which 3,530,570 shares were issued and
outstanding, and 1,169,430 shares were held by Mutual in
treasury, as of June 30, 1998, and not more than 3,530,570 shares
will be issued and outstanding, and not more than 1,169,430
shares will be held by Mutual in treasury, at the Effective Time
and (ii) 2,000,000 shares of Mutual Preferred Stock, of which no
shares are issued and outstanding and of which no shares will be
issued and outstanding at the Effective Time. All of the issued
and outstanding shares of Mutual Common Stock are duly and
validly issued and outstanding and are fully paid and
nonassessable under the DGCL. None of the outstanding shares of
Mutual Common Stock has been issued in violation of any
preemptive rights of the current or past stockholders of Mutual.
(b) Except (i) as set forth in Section 5.3(a) of this
Agreement, (ii) with respect to 383,700 shares of Mutual Common
Stock subject to outstanding options under the Mutual Stock
Plans, and (iii) as provided pursuant to the Stock Option
Agreement, there are no shares of capital stock or other equity
securities of Mutual outstanding and no outstanding Rights
relating to the capital stock of Mutual.
5.4 MUTUAL SUBSIDIARIES. Mutual has disclosed in Section
5.4 of the Mutual Disclosure Memorandum all of the Mutual
Subsidiaries. Mutual or one of its Subsidiaries owns all of the
issued and outstanding shares of capital stock of each Mutual
Subsidiary. No equity securities of any Mutual Subsidiary are or
may become required to be issued (other than to another Mutual
Company) by reason of any Rights, and there are no Contracts by
which any Mutual Subsidiary is bound to issue (other than to
another Mutual Company) additional shares of its capital stock or
Rights or by which any Mutual Company is or may be bound to
transfer any shares of the capital stock of any Mutual Subsidiary
(other than to another Mutual Company). There are no Contracts
relating to the rights of any Mutual Company to vote or to
dispose of any shares of the capital stock of any Mutual
Subsidiary. All of the shares of capital stock of each Mutual
Subsidiary held by an Mutual Company are duly authorized, validly
issued, and fully paid and, except as provided in statutes
pursuant to which depository institution Subsidiaries are
organized, nonassessable under the applicable corporation Law of
the jurisdiction in which such Subsidiary is incorporated or
organized and are owned by the Mutual Company free and clear of
any Lien. Each Mutual Subsidiary is either a bank, a savings
association or a corporation, and is duly organized, validly
existing, and (as to national banking associations) in good
standing under the Laws of the jurisdiction in which it is
incorporated or organized, and has the corporate power and
authority necessary for it to own, lease, and operate its Assets
and to carry on its business as now conducted. Each Mutual
Subsidiary is duly qualified or licensed to transact business as
a foreign corporation in the States of the United States and
foreign jurisdictions where the character of its Assets or the
nature or conduct of its business requires it to be so qualified
or licensed, except for such jurisdictions in which the failure
to be so qualified or licensed is not reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on
Mutual. Each Mutual Subsidiary that is a depository institution
is an "insured institution" as defined in the Federal Deposit
Insurance Act and applicable regulations thereunder, and the
deposits in which are insured by the Bank Insurance Fund or
Savings Association Insurance Fund.
5.5 SEC FILINGS; FINANCIAL STATEMENTS.
(a) Mutual has filed and made available to UPC all
forms, reports, and documents required to be filed by Mutual with
the SEC since June 30, 1995 (collectively, the
"Mutual SEC Reports"). The Mutual SEC Reports (i) at the time
filed, complied in all Material respects with the applicable
requirements of the 1933 Act and the 1934 Act, as the case may
be, and (ii) did not at the time they were filed (or if amended
or superseded by a filing prior to the date of this Agreement,
then on the date of such latter filing) contain any untrue
statement of a Material fact or omit to state a Material fact
required to be stated in such Mutual SEC Reports or necessary in
order to make the statements in such Mutual SEC Reports, in light
of the circumstances under which they were made, not misleading.
None of Mutual's Subsidiaries is required to file any forms,
reports, or other documents with the SEC.
(b) Each of the Mutual Financial Statements
(including, in each case, any related notes) contained in the
Mutual SEC Reports, including any Mutual SEC Reports filed after
the date of this Agreement until the Effective Time, complied or
will comply as to form in all Material respects with the
applicable published rules and regulations of the SEC with
respect thereto, was prepared or will be prepared in accordance
with GAAP applied on a consistent basis throughout the periods
involved (except as may be indicated in the notes to such
financial statements, or, in the case of unaudited statements, as
permitted by Form 10-Q of the SEC), and fairly presented or will
fairly present in all Material respects the consolidated
financial position of Mutual and its Subsidiaries as at the
respective dates and the consolidated results of its operations
and cash flows for the periods indicated, except that the
unaudited interim financial statements were or are subject to
normal and recurring year-end adjustments which were not or are
not expected to be Material in amount or effect.
5.6 ABSENCE OF UNDISCLOSED LIABILITIES. No Mutual Company
has any Liabilities that are reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on
Mutual, except Liabilities which are accrued or reserved against
in the consolidated balance sheets of Mutual as of March 31,
1998, included in the Mutual Financial Statements or reflected in
the notes thereto and except for Liabilities incurred in the
ordinary course of business subsequent to March 31, 1998. No
Mutual Company has incurred or paid any Liability since March 31,
1998, except for such Liabilities incurred or paid in the
ordinary course of business consistent with past business
practice and which are not reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on
Mutual and Liabilities incurred in connection with this Agreement
and the transactions contemplated hereby.
5.7 ABSENCE OF CERTAIN CHANGES OR EVENTS. Since March 31,
1998, except as disclosed in the Mutual Financial Statements, (i)
there have been no events, changes, or occurrences which have
had, or are reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on Mutual and (ii) the
Mutual Companies have conducted their respective businesses in
the ordinary and usual course (excluding the incurrence of
expenses in connection with this Agreement and the transactions
contemplated hereby).
5.8 TAX MATTERS.
(a) All Tax Returns required to be filed by or on
behalf of any of the Mutual Companies have been timely filed, or
requests for extensions have been timely filed, granted, and have
not expired for periods ended on or before December 31, 1996,
and, to the Knowledge of Mutual, all Tax Returns filed are
complete and accurate in all Material respects. All Tax Returns
for periods ending on or before the date of the most recent
fiscal year end immediately preceding the Effective Time will be
timely filed or requests for extensions will be timely filed.
All Taxes shown on filed Tax Returns have been paid. There is no
audit examination, deficiency, or refund Litigation with respect
to any Taxes, that is reasonably likely to result in a
determination that would
have, individually or in the aggregate, a Material Adverse Effect
on Mutual, except to the extent reserved against in the Mutual
Financial Statements dated prior to the date of this Agreement.
All Taxes and other Liabilities due with respect to completed and
settled examinations or concluded Litigation have been paid.
(b) None of the Mutual Companies has executed an
extension or waiver of any statute of limitations on the
assessment or collection of any Tax due (excluding such statutes
that relate to years currently under examination by the Internal
Revenue Service or other applicable taxing authorities) that is
currently in effect.
(c) Adequate provision for any Taxes due or to become
due for any of the Mutual Companies for the period or periods
through and including the date of the respective Mutual Financial
Statements has been made and is reflected on such Mutual
Financial Statements.
(d) Each of the Mutual Companies is in compliance
with, and its records contain all information and documents
(including properly completed IRS Forms W-9) necessary to comply
with, all applicable information reporting and Tax withholding
requirements under federal, state, and local Tax Laws, and such
records identify with specificity all accounts subject to backup
withholding under Section 3406 of the Internal Revenue Code,
except for such instances of noncompliance and such omissions as
are not reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on Mutual.
(e) Except as disclosed in Section 5.8(e) of the
Mutual Disclosure Memorandum, none of the Mutual Companies has
made any payments, is obligated to make any payments, or is a
party to any contract, agreement, or other arrangement that could
obligate it to make any payments that would be disallowed as a
deduction under Section 280G or 162(m) of the Internal Revenue
Code.
(f) There are no Material Liens with respect to Taxes
upon any of the Assets of the Mutual Companies.
(g) No Mutual Company has filed any consent under
Section 341(f) of the Internal Revenue Code concerning
collapsible corporations.
5.9 ASSETS. The Mutual Companies have good and marketable
title, free and clear of all Liens, to all of their respective
Assets, except where the failure to have such good and marketable
title is not reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on Mutual. All Material
tangible properties used in the businesses of the Mutual
Companies are in good condition, reasonable wear and tear
excepted, and are usable in the ordinary course of business
consistent with Mutual's past practices. All Assets which are
Material to Mutual's business on a consolidated basis, held under
leases or subleases by any of the Mutual Companies, are held
under valid Contracts enforceable in accordance with their
respective terms (except as enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium, or
other Laws affecting the enforcement of creditors' rights
generally and except that the availability of the equitable
remedy of specific performance or injunctive relief is subject to
the discretion of the court before which any proceedings may be
brought), and each such Contract is in full force and effect.
The Mutual Companies currently maintain insurance in amounts,
scope, and coverage reasonably necessary for their operations.
None of the Mutual Companies has received notice from any
insurance carrier that (i) such insurance will be canceled or
that coverage
thereunder will be reduced or eliminated or (ii) premium costs
with respect to such policies of insurance will be substantially
increased. The Assets of the Mutual Companies include all Assets
required to operate the business of the Mutual Companies as
presently conducted.
5.10 ENVIRONMENTAL MATTERS.
(a) To the Knowledge of Mutual, each Mutual Company,
its Participation Facilities, and its Loan Properties are, and
have been, in compliance with all Environmental Laws, except
those violations which are not reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on
Mutual.
(b) There is no Litigation pending or, to the
Knowledge of Mutual, threatened before any court, governmental
agency, or authority, or other forum in which any Mutual Company
or any of its Participation Facilities has been or, with respect
to threatened Litigation, may reasonably be expected to be named
as a defendant (i) for alleged noncompliance (including by any
predecessor) with any Environmental Law or (ii) relating to the
release into the environment of any Hazardous Material, whether
or not occurring at, on, under, or involving a site owned,
leased, or operated by any Mutual Company or any of its
Participation Facilities, except for such Litigation pending or
threatened that is not reasonably likely to have, individually or
in the aggregate, a Material Adverse Effect on Mutual.
(c) There is no Litigation pending, or to the
Knowledge of Mutual, threatened before any court, governmental
agency, or board, or other forum in which any of its Loan
Properties (or Mutual in respect of such Loan Property) has been
or, with respect to threatened Litigation, may reasonably be
expected to be named as a defendant or potentially responsible
party (i) for alleged noncompliance (including by any
predecessor) with any Environmental Law or (ii) relating to the
release into the environment of any Hazardous Material, whether
or not occurring at, on, under, or involving a Loan Property,
except for such Litigation pending or threatened that is not
reasonably likely to have, individually or in the aggregate, a
Material Adverse Effect on Mutual.
(d) To the Knowledge of Mutual, there is no reasonable
basis for any Litigation of a type described in subsections (b)
or (c), except such as is not reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on
Mutual.
(e) To the Knowledge of Mutual, during the period of
(i) any Mutual Company's ownership or operation of any of their
respective current properties, (ii) any Mutual Company's
participation in the management of any Participation Facility, or
(iii) any Mutual Company's holding of a security interest in a
Loan Property, there have been no releases of Hazardous Material
in, on, under, or affecting (or potentially affecting) such
properties, except such as are not reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on
Mutual. To the Knowledge of Mutual, prior to the period of (i)
any Mutual Company's ownership or operation of any of their
respective current properties, (ii) any Mutual Company's
participation in the management of any Participation Facility, or
(iii) any Mutual Company's holding of a security interest in a
Loan Property, to the Knowledge of Mutual, there were no releases
of Hazardous Material in, on, under, or affecting any such
property, Participation Facility, or Loan Property, except such
as are not reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on Mutual.
5.11 COMPLIANCE WITH LAWS. Mutual is duly registered as a
bank holding company under the BHC Act. Each Mutual Company has
in effect all Permits necessary for it to own, lease,
or operate its Material Assets and to carry on its business as
now conducted, except for those Permits the absence of which are
not reasonably likely to have, individually or in the aggregate,
a Material Adverse Effect on Mutual, and there has occurred no
Default under any such Permit, other than Defaults which are not
reasonably likely to have, individually or in the aggregate, a
Material Adverse Effect on Mutual. None of the Mutual Companies:
(a) is in violation of any Laws, Orders, or Permits
applicable to its business or employees conducting its business,
except for violations which are not reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on
Mutual; and
(b) has received any notification or communication
from any agency or department of federal, state, or local
government or any Regulatory Authority or the staff thereof (i)
asserting that any Mutual Company is not in compliance with any
of the Laws or Orders which such governmental authority or
Regulatory Authority enforces, where such noncompliance is
reasonably likely to have, individually or in the aggregate, a
Material Adverse Effect on Mutual, (ii) threatening to revoke any
Permits, the revocation of which is reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on
Mutual, or (iii) requiring any Mutual Company (x) to enter into
or consent to the issuance of a cease and desist order, formal
agreement, directive, commitment, or memorandum of understanding,
or (y) to adopt any Board resolution or similar undertaking,
which restricts materially the conduct of its business, or in any
manner relates to its capital adequacy, its credit or reserve
policies, its management, or the payment of dividends.
5.12 LABOR RELATIONS. No Mutual Company is the subject of
any Litigation asserting that it or any other Mutual Company has
committed an unfair labor practice (within the meaning of the
National Labor Relations Act or comparable state Law) or seeking
to compel it or any other Mutual Company to bargain with any
labor organization as to wages or conditions of employment, nor
is any Mutual Company a party to or bound by any collective
bargaining agreement, Contract, or other agreement or
understanding with a labor union or labor organization, nor is
there any strike or other labor dispute involving any Mutual
Company, pending or, to the Knowledge of Mutual, threatened, or
to the Knowledge of Mutual, is there any activity involving any
Mutual Company's employees seeking to certify a collective
bargaining unit or engaging in any other organization activity.
5.13 EMPLOYEE BENEFIT PLANS.
(a) Mutual has disclosed to UPC in writing prior to
the execution of the Agreement and in Section 5.13(a) of the
Mutual Disclosure Memorandum, and has delivered or made available
to UPC prior to the execution of this Agreement correct and
complete copies in each case of, all Material Mutual Benefits
Plans. For purposes of this Agreement, "Mutual Benefit Plans"
means all pension, retirement, profit-sharing, deferred
compensation, stock option, employee stock ownership, severance
pay, vacation, bonus, or other incentive plan, all other written
employee programs or agreements, all medical, vision, dental, or
other health plans, all life insurance plans, and all other
employee benefit plans or fringe benefit plans, including,
without limitation, "employee benefit plans" as that term is
defined in Section 3(3) of ERISA maintained by, sponsored in
whole or in part by, or contributed to by, any Mutual Company for
the benefit of employees, retirees, dependents, spouses,
directors, independent contractors, or other beneficiaries and
under which employees, retirees, dependents, spouses, directors,
independent contractors, or other beneficiaries are eligible to
participate. Any of the Mutual Benefit Plans which is an
"employee welfare benefit plan," as that term is defined in
Section 3(l) of ERISA, or an
"employee pension benefit plan," as that term is defined in
Section 3(2) of ERISA, is referred to herein as a "Mutual ERISA
Plan." Any Mutual ERISA Plan which is also a "defined benefit
plan" (as defined in Section 414(j) of the Internal Revenue Code
or Section 3(35) of ERISA) is referred to herein as a "Mutual
Pension Plan." Neither Mutual nor any Mutual Company has an
"obligation to contribute" (as defined in ERISA Section 4212) to
a "multiemployer plan" (as defined in ERISA Sections 4001(a)(3)
and 3(37)(A)). Each "employee pension benefit plan," as defined
in Section 3(2) of ERISA, maintained by any Mutual Company at any
time during the last six years that was intended to qualify under
Section 401(a) of the Internal Revenue Code and with respect to
which any Mutual Company has any Liability, is disclosed as such
in Section 5.13(a) of the Mutual Disclosure Memorandum.
(b) Mutual has delivered or made available to UPC
prior to the execution of this Agreement correct and complete
copies of the following documents: (i) all trust agreements or
other funding arrangements for such Mutual Benefit Plans
(including insurance contracts), and all amendments thereto, (ii)
with respect to any such Mutual Benefit Plans or amendments
thereto, all determination letters, rulings, opinion letters,
information letters, or advisory opinions issued by the Internal
Revenue Service, the United States Department of Labor, or the
Pension Benefit Guaranty Corporation after December 31, 1994,
(iii) annual reports or returns, audited or unaudited financial
statements, actuarial valuations and reports, and summary annual
reports prepared for any Mutual Benefit Plan with respect to the
most recent plan year, and (iv) the most recent summary plan
descriptions and any modifications thereto.
(c) All Mutual Benefit Plans are in compliance with
the applicable terms of ERISA, the Internal Revenue Code, and any
other applicable Laws, the breach or violation of which is
reasonably likely to have, individually or in the aggregate, a
Material Adverse Effect on Mutual. Each Mutual ERISA Plan which
is intended to be qualified under Section 401(a) of the Internal
Revenue Code has received a favorable determination letter from
the Internal Revenue Service, and Mutual is not aware of any
circumstances which could reasonably result in revocation of any
such favorable determination letter. Each trust created under
any Mutual ERISA Plan has been determined to be exempt from Tax
under Section 501(a) of the Internal Revenue Code and Mutual is
not aware of any circumstance which could reasonably result in
revocation of such exemption. With respect to each Mutual
Benefit Plan, to the Knowledge of Mutual, no event has occurred
which could reasonably give rise to a loss of any intended Tax
consequences under the Internal Revenue Code or to any Tax under
Section 511 of the Internal Revenue Code that is reasonably
likely, individually or in the aggregate, to have a Material
Adverse Effect on Mutual. There is no Material pending or, to the
Knowledge of Mutual, threatened Litigation (other than routine
claims for benefits) relating to any Mutual ERISA Plan.
(d) No Mutual Company has engaged in a transaction
with respect to any Mutual Benefit Plan that, assuming the
Taxable Period of such transaction expired as of the date of this
Agreement, would subject any Mutual Company to a Material Tax or
penalty imposed by either Section 4975 of the Internal Revenue
Code or Section 502(i) of ERISA in amounts which are reasonably
likely to have, individually or in the aggregate, a Material
Adverse Effect on Mutual. Neither Mutual nor, to the Knowledge
of Mutual, any administrator or fiduciary of any Mutual Benefit
Plan (or any agent of any of the foregoing) has engaged in any
transaction, or acted or failed to act in any manner which could
subject Mutual to any direct or indirect Liability (by indemnity
or otherwise) for breach of any fiduciary, co-fiduciary, or other
duty under ERISA, where such Liability, individually or in the
aggregate, is reasonably likely to have a Material Adverse Effect
on Mutual. Except as disclosed under Section 5.13 of the Mutual
Disclosure Memorandum, no oral or written representation or
communication with respect to any aspect of the Mutual Benefit
Plans has been made to employees of any Mutual Company which is
not in accordance with the written or otherwise preexisting terms
and provisions of such plans, where any Liability with respect to
such representation or disclosure is reasonably likely to have a
Material Adverse Effect on Mutual.
(e) No Mutual Pension Plan has any "unfunded current
liability," as that term is defined in Section 302(d)(8)(A) of
ERISA, and the fair market value of all benefits (whether vested
or not) accrued to date by all present or former participants in
such Mutual Pension Plan exceeds the plan's "benefit liabilities"
as that term is defined in Section 4001(a)(16) of ERISA. For
this purpose, the assumptions for valuing plan Assets or
Liabilities shall be the assumptions set forth in the most recent
actuarial valuations and reports with respect to any such Mutual
Pension Plan. Since the date of the most recent actuarial
valuation, there has been (i) no Material change in the financial
position or funded status of any Mutual Pension Plan, (ii) no
change in the actuarial assumptions with respect to any Mutual
Pension Plan, and (iii) no increase in benefits under any Mutual
Pension Plan as a result of plan amendments or changes in
applicable Law, any of which is reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on
Mutual. Neither any Mutual Pension Plan nor any "single-employer
plan," within the meaning of Section 4001(a)(15) of ERISA,
currently or formerly maintained by any Mutual Company, or the
single-employer plan of any entity which is considered one
employer with Mutual under Section 4001 of ERISA or Section 414
of the Internal Revenue Code or Section 302 of ERISA (a "Mutual
ERISA Affiliate") has an "accumulated funding deficiency" within
the meaning of Section 412 of the Internal Revenue Code or
Section 302 of ERISA (whether or not waived). All contributions
with respect to a Mutual Pension Plan or any single-employer plan
of an Mutual ERISA Affiliate have or will be timely made and
there is no lien or expected to be a lien under Internal Revenue
Code Section 412(n) or ERISA Section 302(f) or Tax under Internal
Revenue Code Section 4971. No Mutual Company has provided, or is
required to provide, security to an Mutual Pension Plan or to any
single-employer plan of an Mutual ERISA Affiliate pursuant to
Section 401(a)(29) of the Internal Revenue Code. All premiums
required to be paid under ERISA Section 4006 have been timely
paid by Mutual, except to the extent any failure would not have a
Material Adverse Effect on Mutual.
(f) No Liability under Title IV of ERISA has been or
is expected to be incurred by any Mutual Company with respect to
any defined benefit plan currently or formerly maintained by any
of them or by any Mutual ERISA Affiliate that has not been
satisfied in full (other than Liability for Pension Benefit
Guaranty Corporation premiums, which have been paid when due)
except to the extent any failure would not have a Material
Adverse Effect on Mutual.
(g) Except as set forth in Section 5.13(g) of the
Mutual Disclosure Memorandum, no Mutual Company has any
obligations for retiree health and retiree life benefits under
any of the Mutual Benefit Plans other than with respect to
benefit coverage mandated by applicable Law.
(h) Except as set forth in Section 5.13(h) of the
Mutual Disclosure Memorandum, neither the execution and delivery
of this Agreement nor the consummation of the transactions
contemplated hereby will, by themselves, (i) result in any
payment (including, without limitation, severance, golden
parachute, or otherwise) becoming due to any director or any
employee of any Mutual Company from any Mutual Company under any
Mutual Benefit Plan or otherwise, (ii) increase any benefits
otherwise payable under any Mutual Benefit Plan, or (iii) result
in any acceleration of the time of payment or vesting of any such
benefit.
5.14 MATERIAL CONTRACTS. Except as set forth in Section
5.14 of the Mutual Disclosure Memorandum, none of the Mutual
Companies, nor any of their respective Assets, businesses, or
operations, is a party to, or is bound or affected by, or
receives benefits under, (i) any employment, severance,
termination, consulting, or retirement Contract providing for
aggregate payments to any Person in any calendar year in excess
of $50,000, (ii) any Contract relating to the borrowing of money
by any Mutual Company or the guarantee by any Mutual Company of
any such obligation (other than Contracts evidencing deposit
liabilities, purchases of federal funds, fully-secured repurchase
agreements, and Federal Home Loan Bank advances of depository
institution Subsidiaries, trade payables, and Contracts relating
to borrowings or guarantees made in the ordinary course of
business), and (iii) any other Contract or amendment thereto that
would be required to be filed as an exhibit to a Form 10-K filed
by Mutual with the SEC as of the date of this Agreement that has
not been filed as an exhibit to Mutual's Form 10-K filed for the
fiscal year ended December 31, 1997, or in another SEC Document
(together with all Contracts referred to in Sections 5.9 and
5.13(a) of this Agreement, the "Mutual Contracts"). With respect
to each Mutual Contract: (i) the Contract is in full force and
effect; (ii) no Mutual Company is in Default thereunder, other
than Defaults which are not reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on
Mutual; (iii) no Mutual Company has repudiated or waived any
Material provision of any such Contract; and (iv) no other party
to any such Contract is, to the Knowledge of Mutual, in Default
in any respect, other than Defaults which are not reasonably
likely to have, individually or in the aggregate, a Material
Adverse Effect on Mutual, or has repudiated or waived any
Material provision thereunder.
5.15 LEGAL PROCEEDINGS.
(a) There is no Litigation instituted or pending, or,
to the Knowledge of Mutual, threatened (or unasserted but
considered probable of assertion and which if asserted would have
at least a reasonable probability of an unfavorable outcome to
any Mutual Company) against any Mutual Company, or against any
Asset, employee benefit plan, interest, or right of any of them,
that is reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on Mutual, nor are there any
Orders of any Regulatory Authorities, other governmental
authorities, or arbitrators outstanding against any Mutual
Company, that are reasonably likely to have, individually or in
the aggregate, a Material Adverse Effect on Mutual.
(b) Section 5.15(b) of the Mutual Disclosure
Memorandum includes a summary report of all Litigation as of the
date of this Agreement to which any Mutual Company is a party and
which names a Mutual Company as a defendant or cross-defendant
and where the maximum exposure is estimated to be $50,000 or
more.
5.16 REPORTS. Since January 1, 1994, or the date of
organization if later, each Mutual Company has timely filed all
reports and statements, together with any amendments required to
be made with respect thereto, that it was required to file with
any Regulatory Authorities, except failures to file which are not
reasonably likely to have, individually or in the aggregate, a
Material Adverse Effect on Mutual. As of their respective dates,
each of such reports and documents, including the financial
statements, exhibits, and schedules thereto, complied in all
Material respects with all applicable Laws.
5.17 STATEMENTS TRUE AND CORRECT. None of the information
supplied or to be supplied by any Mutual Company regarding Mutual
for inclusion in the Registration Statement to be filed by UPC
with the SEC will, when the Registration Statement becomes
effective, be false or misleading with respect to any Material
fact, or contain any untrue statement of a Material fact,
or omit to state any Material fact required to be stated
thereunder or necessary to make the statements therein not
misleading. None of the information supplied or to be supplied
by any Mutual Company for inclusion in the Proxy Statement to be
mailed to Mutual's stockholders in connection with the
Stockholders' Meeting will, when first mailed to the stockholders
of Mutual, be false or misleading with respect to any Material
fact, or contain any misstatement of Material fact, or omit to
state any 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, or, in
the case of the Proxy Statement or any amendment thereof or
supplement thereto, at the time of the Stockholders' Meeting, be
false or misleading with respect to any Material fact, or omit to
state any Material fact required to be stated therein or
necessary to correct any Material statement in any earlier
communication with respect to the solicitation of any proxy for
the Stockholders' Meeting. All documents that any Mutual Company
is responsible for filing with any Regulatory Authority in
connection with the transactions contemplated hereby will comply
as to form in all Material respects with the provisions of
applicable Law.
5.18 TAX AND REGULATORY MATTERS. No Mutual Company has
taken or agreed to take any action, and Mutual has no Knowledge
of any fact or circumstance that is reasonably likely to (i)
prevent the transactions contemplated hereby, including the
Merger, from qualifying as a reorganization within the meaning of
Section 368(a) of the Internal Revenue Code or (ii) materially
impede or delay receipt of any Consents of Regulatory Authorities
referred to in Section 9.1(b) of this Agreement or result in the
imposition of a condition or restriction of the type referred to
in the last sentence of such Section.
5.19 STATE TAKEOVER LAWS. Each Mutual Company has taken
all necessary action to exempt the transactions contemplated by
this Agreement and the Plan of Merger from any applicable
"moratorium," "control share," "fair price," "business
combination," or other anti-takeover laws and regulations
(collectively, "Takeover Laws").
5.20 CHARTER PROVISIONS. Except as set forth in Section
5.2(a) of the Mutual Disclosure Memorandum, each Mutual Company
has taken all action so that the entering into of this Agreement
and the Plan of Merger and the consummation of the Merger and the
other transactions contemplated by this Agreement and the Plan of
Merger do not and will not result in the grant of any rights to
any Person under the Certificate of Incorporation, Bylaws, or
other governing instruments of any Mutual Company or restrict or
impair the ability of UPC or any of its Subsidiaries to vote, or
otherwise to exercise the rights of a stockholder with respect
to, shares of any Mutual Company that may be directly or
indirectly acquired or controlled by it.
5.21 RIGHTS AGREEMENT. Mutual is not a party to any rights
agreement or rights plan as a result of which any Person has or
may acquire Rights with respect to Mutual Capital Stock.
5.22 DERIVATIVES. All interest rate swaps, caps, floors,
option agreements, futures and forward contracts, and other
similar risk management arrangements, whether entered into for
Mutual's own account, or for the account of one or more of the
Mutual Subsidiaries or their customers, were entered into (i) in
accordance with prudent business practices and all applicable
Laws and (ii) with counterparties believed to be financially
responsible.
5.23 YEAR 2000. Mutual has disclosed to UPC a complete and
accurate copy of Mutual's plan, including an estimate of the
anticipated associated costs, for implementing modifications to
Mutual's hardware, software, and computer systems, chips, and
microprocessors, to ensure proper execution and accurate
processing of all date-related data, whether from years in the
same
century or in different centuries. Between the date of this
Agreement and the Effective Time, Mutual shall endeavor to
continue its efforts to implement such plan.
ARTICLE 6
REPRESENTATIONS AND WARRANTIES OF UPC
UPC hereby represents and warrants to Mutual as
follows:
6.1 ORGANIZATION, STANDING, AND POWER. UPC is a
corporation duly organized and validly existing under the Laws of
the State of Tennessee, and has the corporate power and authority
to carry on its business as now conducted and to own, lease, and
operate its Material Assets. UPC is duly qualified or licensed to
transact business as a foreign corporation in the States of the
United States and foreign jurisdictions where the character of
its Assets or the nature or conduct of its business requires it
to be so qualified or licensed, except for such jurisdictions in
which the failure to be so qualified or licensed is not
reasonably likely to have, individually or in the aggregate, a
Material Adverse Effect on UPC.
6.2 AUTHORITY; NO BREACH BY AGREEMENT.
(a) UPC has the corporate power and authority
necessary to execute, deliver, and perform its obligations under
this Agreement and to consummate the transactions contemplated
hereby. The execution, delivery, and performance of this
Agreement and the consummation of the transactions contemplated
herein, including the Merger, have been duly and validly
authorized by all necessary corporate action in respect thereof
on the part of UPC. This Agreement represents a legal, valid,
and binding obligation of UPC, enforceable against UPC in
accordance with its terms (except in all cases as such
enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, receivership, conservatorship,
moratorium, or similar Laws affecting the enforcement of
creditors' rights generally and except that the availability of
the equitable remedy of specific performance or injunctive relief
is subject to the discretion of the court before which any
proceeding may be brought).
(b) Neither the execution and delivery of this
Agreement by UPC, nor the consummation by UPC of the transactions
contemplated hereby, nor compliance by UPC with any of the
provisions hereof, will (i) conflict with or result in a breach
of any provision of UPC's Restated Charter or Bylaws, (ii)
constitute or result in a Default under, or require any Consent
pursuant to, or result in the creation of any Lien on any Asset
of any UPC Company under, any Contract or Permit of any UPC
Company, where such Default or Lien, or any failure to obtain
such Consent, is reasonably likely to have, individually or in
the aggregate, a Material Adverse Effect on UPC, or (iii) subject
to receipt of the requisite Consents referred to in Section
9.1(b) of this Agreement, violate any Law or Order applicable to
any UPC Company or any of their respective Material Assets.
(c) Other than in connection or compliance with the
provisions of the Securities Laws, applicable state corporate and
securities Laws, and rules of the NYSE, and other than Consents
required from Regulatory Authorities, and other than notices to
or filings with the Internal Revenue Service or the Pension
Benefit Guaranty Corporation with respect to any employee benefit
plans, or under the HSR Act, and other than Consents, filings, or
notifications which, if not obtained or made, are not reasonably
likely to have, individually or in the aggregate, a Material
Adverse Effect on UPC, no notice to, filing with, or Consent of,
any public body or authority is necessary for the consummation by
UPC of the Merger and the other transactions contemplated in this
Agreement.
6.3 CAPITAL STOCK. The authorized capital stock of UPC
consists of (i) 300,000,000 shares of UPC Common Stock as of the
date of this Agreement, of which 84,970,899 shares are issued and
outstanding as of May 31, 1998 and (ii) 10,000,000 shares of UPC
Preferred Stock, of which 1,156,231 shares of UPC Series E
Preferred Stock were issued and outstanding as of May 31, 1998.
All of the issued and outstanding shares of UPC Capital Stock
are, and all of the shares of UPC Common Stock to be issued in
exchange for shares of Mutual Common Stock upon consummation of
the Merger when issued in accordance with the terms of this
Agreement, will be, duly and validly issued and outstanding and
fully paid and nonassessable under the TBCA. None of the
outstanding shares of UPC Capital Stock has been, and none of the
shares of UPC Common Stock to be issued in exchange for shares of
Mutual Common Stock upon consummation of the Merger will be,
issued in violation of any preemptive rights of the current or
past stockholders of UPC.
6.4 UPC SUBSIDIARIES. Except with respect to Capital
Factors, Inc. or as otherwise disclosed in the UPC SEC Reports,
UPC or one of its Subsidiaries owns all of the issued and
outstanding shares of capital stock of each UPC Subsidiary. No
equity securities of any UPC Subsidiary are or may become
required to be issued (other than to another UPC Company) by
reason of any Rights, and there are no Contracts by which any UPC
Subsidiary is bound to issue (other than to another UPC Company)
additional shares of its capital stock or Rights or by which any
UPC Company is or may be bound to transfer any shares of the
capital stock of any UPC Subsidiary (other than to another UPC
Company). There are no Contracts relating to the rights of any
UPC Company to vote or to dispose of any shares of the capital
stock of any UPC Subsidiary. All of the shares of capital stock
of each UPC Subsidiary held by a UPC Company are duly authorized,
validly issued, fully paid and, except as provided in statutes
pursuant to which depository institution Subsidiaries are
organized, nonassessable under the applicable corporation Law of
the jurisdiction in which such Subsidiary is incorporated or
organized and are owned by the UPC Company free and clear of any
Lien. Each UPC Subsidiary is either a bank or a corporation, and
is duly organized, validly existing, and (as to national banking
associations) in good standing under the Laws of the jurisdiction
in which it is incorporated or organized, and has the corporate
power and authority necessary for it to own, lease, and operate
its Assets and to carry on its business as now conducted. Each
UPC Subsidiary is duly qualified or licensed to transact business
as a foreign corporation in the States of the United States and
foreign jurisdictions where the character of its Assets or the
nature or conduct of its business requires it to be so qualified
or licensed, except for such jurisdictions in which the failure
to be so qualified or licensed is not reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on
UPC. Each UPC Subsidiary that is a depository institution is an
"insured institution" as defined in the Federal Deposit Insurance
Act and applicable regulations thereunder, and the deposits in
which are insured by the Bank Insurance Fund or Savings
Association Insurance Fund.
6.5 SEC FILINGS; FINANCIAL STATEMENTS.
(a) UPC has filed and made available to Mutual all
forms, reports, and documents required to be filed by UPC with
the SEC since December 31, 1993 (collectively, the "UPC SEC
Reports"). The UPC SEC Reports (i) at the time filed, complied
in all Material respects with the applicable requirements of the
1933 Act and the 1934 Act, as the case may be, and (ii) did not
at the time they were filed (or if amended or superseded by a
filing prior to the date of this
Agreement, then on the date of such latter filing) contain any
untrue statement of a Material fact or omit to state a Material
fact required to be stated in such UPC SEC Reports or necessary
in order to make the statements in such UPC SEC Reports, in light
of the circumstances under which they were made, not misleading.
Except for UPC Subsidiaries that are registered as a broker,
dealer, or investment advisor or filings required due to
fiduciary holdings of the UPC Subsidiaries, none of UPC
Subsidiaries is required to file any forms, reports, or other
documents with the SEC.
(b) Each of the UPC Financial Statements (including,
in each case, any related notes) contained in the UPC SEC
Reports, including any UPC SEC Reports filed after the date of
this Agreement until the Effective Time, complied or will comply
as to form in all Material respects with the applicable published
rules and regulations of the SEC with respect thereto, was or
will be prepared in accordance with GAAP applied on a consistent
basis throughout the periods involved (except as may be indicated
in the notes to such financial statements or, in the case of
unaudited statements, as permitted by Form 10-Q of the SEC), and
fairly presented or will fairly present in all Material respects
the consolidated financial position of UPC and its Subsidiaries
as at the respective dates and the consolidated results of its
operations and cash flows for the periods indicated, except that
the unaudited interim financial statements were or are subject to
normal and recurring year-end adjustments which were not or are
not expected to be Material in amount or effect.
6.6 ABSENCE OF UNDISCLOSED LIABILITIES. No UPC Company has
any Liabilities that are reasonably likely to have, individually
or in the aggregate, a Material Adverse Effect on UPC, except
Liabilities which are accrued or reserved against in the
consolidated balance sheets of UPC as of March 31, 1998, included
in the UPC Financial Statements or reflected in the notes thereto
and except for Liabilities incurred in the ordinary course of
business subsequent to March 31, 1998. No UPC Company has
incurred or paid any Liability since March 31, 1998, except for
such Liabilities incurred or paid in the ordinary course of
business consistent with past business practice and which are not
reasonably likely to have, individually or in the aggregate, a
Material Adverse Effect on UPC.
6.7 ABSENCE OF CERTAIN CHANGES OR EVENTS. Since March 31,
1998, except as disclosed in the UPC Financial Statements
delivered prior to the date of this Agreement, (i) there have
been no events, changes or occurrences which have had, or are
reasonably likely to have, individually or in the aggregate, a
Material Adverse Effect on UPC and (ii) the UPC Companies have
conducted their respective businesses in the ordinary and usual
course (excluding the incurrence of expenses in connection with
this Agreement and the transactions contemplated hereby).
6.8 TAX MATTERS.
(a) All Tax Returns required to be filed by or on
behalf of any of the UPC Companies have been timely filed, or
requests for extensions have been timely filed, granted, and have
not expired for periods ended on or before December 31, 1996,
and, to the Knowledge of UPC, all Tax Returns filed are complete
and accurate in all Material respects. All Tax Returns for
periods ending on or before the date of the most recent fiscal
year end immediately preceding the Effective Time will be timely
filed or requests for extensions will be timely filed. All Taxes
shown on filed Tax Returns have been paid. There is no audit
examination, deficiency, or refund Litigation with respect to any
Taxes, that is reasonably likely to result in a determination
that would have, individually or in the aggregate, a Material
Adverse Effect on UPC, except to the extent reserved against in
the UPC Financial Statements dated prior to the date of this
Agreement. All
Taxes and other Liabilities due with respect to completed and
settled examinations or concluded Litigation have been paid.
(b) None of the UPC Companies has executed an
extension or waiver of any statute of limitations on the
assessment or collection of any Tax due (excluding such statutes
that relate to years currently under examination by the Internal
Revenue Service or other applicable taxing authorities) that is
currently in effect.
(c) Adequate provision for any Taxes due or to become
due for any of the UPC Companies for the period or periods
through and including the date of the respective UPC Financial
Statements has been made and is reflected on such UPC Financial
Statements.
(d) Each of the UPC Companies is in compliance with,
and its records contain all information and documents (including
properly completed IRS Forms W-9) necessary to comply with, all
applicable information reporting and Tax withholding requirements
under federal, state, and local Tax Laws, and such records
identify with specificity all accounts subject to backup
withholding under Section 3406 of the Internal Revenue Code,
except for such instances of noncompliance and such omissions as
are not reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on UPC.
(e) None of the UPC Companies has made any payments,
is obligated to make any payments, or is a party to any contract,
agreement, or other arrangement that could obligate it to make
any payments that would be disallowed as a deduction under
Section 280G or 162(m) of the Internal Revenue Code.
(f) There are no Material Liens with respect to Taxes
upon any of the Assets of the UPC Companies.
(g) No UPC Company has filed any consent under Section
341(f) of the Internal Revenue Code concerning collapsible
corporations.
6.9 ASSETS. The UPC Companies have good and marketable
title, free and clear of all Liens, to all of their respective
Assets, except where the failure to have such good and marketable
title is not reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on UPC. All Material
tangible properties used in the businesses of the UPC Companies
are in good condition, reasonable wear and tear excepted, and are
usable in the ordinary course of business consistent with UPC's
past practices. All Assets which are Material to UPC's business
on a consolidated basis, held under leases or subleases by any of
the UPC Companies, are held under valid Contracts enforceable in
accordance with their respective terms (except as enforceability
may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium, or other Laws affecting the
enforcement of creditors' rights generally and except that the
availability of the equitable remedy of specific performance or
injunctive relief is subject to the discretion of the court
before which any proceedings may be brought), and each such
Contract is in full force and effect. The UPC Companies
currently maintain insurance sufficient in amounts, scope, and
coverage reasonably necessary for their operations. None of the
UPC Companies has received notice from any insurance carrier that
(i) such insurance will be canceled or that coverage thereunder
will be reduced or eliminated or (ii) premium costs with respect
to such policies of insurance will be substantially increased.
The Assets of the UPC Companies include all Assets required to
operate the business of the UPC Companies as presently conducted.
6.10 ENVIRONMENTAL MATTERS.
(a) To the Knowledge of UPC, each UPC Company, its
Participation Facilities, and its Loan Properties are, and have
been, in compliance with all Environmental Laws, except those
violations which are not reasonably likely to have, individually
or in the aggregate, a Material Adverse Effect on UPC.
(b) There is no Litigation pending or, to the
Knowledge of UPC, threatened before any court, governmental
agency, or authority, or other forum in which any UPC Company or
any of its Participation Facilities has been or, with respect to
threatened Litigation, may reasonably be expected to be named as
a defendant (i) for alleged noncompliance (including by any
predecessor) with any Environmental Law or (ii) relating to the
release into the environment of any Hazardous Material, whether
or not occurring at, on, under, or involving a site owned,
leased, or operated by any UPC Company or any of its
Participation Facilities, except for such Litigation pending or
threatened that is not reasonably likely to have, individually or
in the aggregate, a Material Adverse Effect on UPC.
(c) There is no Litigation pending or, to the
Knowledge of UPC, threatened before any court, governmental
agency, or board, or other forum in which any of its Loan
Properties (or UPC in respect of such Loan Property) has been or,
with respect to threatened Litigation, may reasonably be expected
to be named as a defendant or potentially responsible party (i)
for alleged noncompliance (including by any predecessor) with any
Environmental Law or (ii) relating to the release into the
environment of any Hazardous Material, whether or not occurring
at, on, under, or involving a Loan Property, except for such
Litigation pending or threatened that is not reasonably likely to
have, individually or in the aggregate, a Material Adverse Effect
on UPC.
(d) To the Knowledge of UPC, there is no reasonable
basis for any Litigation of a type described in subsections (b)
or (c), except such as is not reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on
UPC.
(e) To the Knowledge of UPC, during the period of (i)
any UPC Company's ownership or operation of any of their
respective current properties, (ii) any UPC Company's
participation in the management of any Participation Facility, or
(iii) any UPC Company's holding of a security interest in a Loan
Property, there have been no releases of Hazardous Material in,
on, under, or affecting (or potentially affecting) such
properties, except such as are not reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on
UPC. To the Knowledge of UPC, prior to the period of (i) any UPC
Company's ownership or operation of any of their respective
current properties, (ii) any UPC Company's participation in the
management of any Participation Facility, or (iii) any UPC
Company's holding of a security interest in a Loan Property, to
the Knowledge of UPC, there were no releases of Hazardous
Material in, on, under, or affecting any such property,
Participation Facility, or Loan Property, except such as are not
reasonably likely to have, individually or in the aggregate, a
Material Adverse Effect on UPC.
6.11 COMPLIANCE WITH LAWS. UPC is duly registered as a
bank holding company under the BHC Act. Each UPC Company has in
effect all Permits necessary for it to own, lease, or operate its
Material Assets and to carry on its business as now conducted,
except for those Permits the absence of which are not reasonably
likely to have, individually or in the aggregate, a Material
Adverse Effect on UPC, and there has occurred no Default under
any such Permit,
other than Defaults which are not reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on
UPC. None of the UPC Companies:
(a) is in violation of any Laws, Orders, or Permits
applicable to its business or employees conducting its business,
except for violations which are not reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on
UPC; and
(b) has received any notification or communication
from any agency or department of federal, state, or local
government or any Regulatory Authority or the staff thereof (i)
asserting that any UPC Company is not in compliance with any of
the Laws or Orders which such governmental authority or
Regulatory Authority enforces, where such noncompliance is
reasonably likely to have, individually or in the aggregate, a
Material Adverse Effect on UPC, (ii) threatening to revoke any
Permits, the revocation of which is reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on
UPC, or (iii) requiring any UPC Company (x) to enter into or
consent to the issuance of a cease and desist order, formal
agreement, directive, commitment, or memorandum of understanding,
or (y) to adopt any Board resolution or similar undertaking,
which restricts materially the conduct of its business, or in any
manner relates to its capital adequacy, its credit or reserve
policies, its management, or the payment of dividends.
6.12 LABOR RELATIONS. No UPC Company is the subject of any
Litigation asserting that it or any other UPC Company has
committed an unfair labor practice (within the meaning of the
National Labor Relations Act or comparable state Law) or seeking
to compel it or any other UPC Company to bargain with any labor
organization as to wages or conditions of employment, nor is any
UPC Company a party to or bound by any collective bargaining
agreement, Contract, or other agreement or understanding with a
labor union or labor organization, nor is there any strike or
other labor dispute involving any UPC Company, pending or, to the
Knowledge of UPC, threatened, or to the Knowledge of UPC, is
there any activity involving any UPC Company's employees seeking
to certify a collective bargaining unit or engaging in any other
organization activity.
6.13 LEGAL PROCEEDINGS. There is no Litigation instituted
or pending, or, to the Knowledge of UPC, threatened (or
unasserted but considered probable of assertion and which if
asserted would have at least a reasonable probability of an
unfavorable outcome to any UPC Company) against any UPC Company,
or against any Asset, employee benefit plan, interest, or right
of any of them, that is reasonably likely to have, individually
or in the aggregate, a Material Adverse Effect on UPC, nor are
there any Orders of any Regulatory Authorities, other
governmental authorities, or arbitrators outstanding against any
UPC Company, that are reasonably likely to have, individually or
in the aggregate, a Material Adverse Effect on UPC.
6.14 REPORTS. Since January 1, 1994, or the date of
organization if later, each UPC Company has timely filed all
reports and statements, together with any amendments required to
be made with respect thereto, that it was required to file with
any Regulatory Authorities, except failures to file which are not
reasonably likely to have, individually or in the aggregate, a
Material Adverse Effect on UPC. As of their respective dates,
each of such reports and documents, including the financial
statements, exhibits, and schedules thereto, complied in all
Material respects with all applicable Laws.
6.15 STATEMENTS TRUE AND CORRECT. None of the information
supplied or to be supplied by any UPC Company regarding UPC for
inclusion in the Registration Statement to be filed by UPC with
the SEC will, when the Registration Statement becomes effective,
be false or
misleading with respect to any Material fact, or contain any
untrue statement of a Material fact, or omit to state any
Material fact required to be stated thereunder or necessary to
make the statements therein not misleading. None of the
information supplied or to be supplied by any UPC Company for
inclusion in the Proxy Statement to be mailed to Mutual's
stockholders in connection with the Stockholders' Meeting, will,
when first mailed to the stockholders of Mutual, be false or
misleading with respect to any Material fact, or contain any
misstatement of Material fact, or omit to state any 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, or, in the case of the Proxy Statement or
any amendment thereof or supplement thereto, at the time of the
Stockholders' Meeting, be false or misleading with respect to any
Material fact, or omit to state any Material fact required to be
stated therein or necessary to correct any Material statement in
any earlier communication with respect to the solicitation of any
proxy for the Stockholders' Meeting. All documents that any UPC
Company is responsible for filing with any Regulatory Authority
in connection with the transactions contemplated hereby will
comply as to form in all Material respects with the provisions of
applicable Law.
6.16 TAX AND REGULATORY MATTERS. No UPC Company or any
Affiliate thereof has taken or agreed to take any action, and UPC
has no Knowledge of any fact or circumstance that is reasonably
likely to (i) prevent the transactions contemplated hereby,
including the Merger, from qualifying as a reorganization within
the meaning of Section 368(a) of the Internal Revenue Code or
(ii) materially impede or delay receipt of any Consents of
Regulatory Authorities referred to in Section 9.1(b) of this
Agreement or result in the imposition of a condition or
restriction of the type referred to in the last sentence of such
Section.
6.17 EMPLOYEE BENEFIT PLANS. All UPC Plans are in
compliance with the applicable terms of ERISA, the Internal
Revenue Code, and any other applicable Laws, the breach or
violation of which is reasonably likely to have, individually or
in the aggregate, a Material Adverse Effect on UPC. For purposes
of this Agreement, the term "UPC Plan" means each bonus,
incentive compensation, severance pay, medical or other insurance
program, retirement plan, or other employee benefit plan program,
agreement, or arrangement sponsored, maintained, or contributed
to by UPC or any trade or business, whether or not incorporated,
that together with UPC or any of its Subsidiaries would be deemed
a "single employer" under Section 4001 of ERISA or Section 414 of
the Internal Revenue Code (a "UPC ERISA Affiliate") or under
which UPC or any UPC ERISA Affiliate has any Liability or
obligation. No Liability under Title IV of ERISA has been
incurred by UPC or any UPC ERISA Affiliate that has not been
satisfied in full, and no condition exists that presents a
Material risk to UPC or any UPC ERISA Affiliate of incurring any
such Liability. With respect to any UPC Plan that is subject to
Title IV of ERISA, full payment has been made, or will be made in
accordance with Section 404(a)(6) of the Internal Revenue Code,
of all amounts that UPC or any UPC ERISA Affiliate is required to
pay under Section 412 of the Internal Revenue Code or under the
terms of the UPC Plans, and no accumulated funding deficiency
(within the meaning of Section 412 of the Internal Revenue Code
or Section 302 of ERISA, whether or not waived) exists with
respect to any UPC Plan. There are no Material actions, suits,
or claims pending, or, to the Knowledge of UPC, threatened or
anticipated relating to any UPC Plan. There has been no Material
adverse change in the financial position or funded status of any
UPC Plan that is subject to Title IV of ERISA since the date of
the information relating to the financial position and funded
status of each such plan contained in the most recent Annual
Report on Form 10-K filed by UPC with the SEC.
6.18 DERIVATIVES. All interest rate swaps, caps, floors,
option agreements, futures and forward contracts, and other
similar risk management arrangements, whether entered into for
UPC's own account, or for the account of one or more of the UPC
Subsidiaries or their customers, were entered into (i) in
accordance with prudent business practices and all applicable
Laws and (ii) with counterparties believed to be financially
responsible.
6.19 YEAR 2000. UPC has disclosed to Mutual a complete and
accurate copy of UPC's plan, including an estimate of the
anticipated associated costs, for implementing modifications to
UPC's hardware, software, and computer systems, chips, and
microprocessors, to ensure proper execution and accurate
processing of all date-related data, whether from years in the
same century or in different centuries. Between the date of this
Agreement and the Effective Time, UPC shall endeavor to continue
its efforts to implement such plan.
ARTICLE 7
CONDUCT OF BUSINESS PENDING CONSUMMATION
7.1 AFFIRMATIVE COVENANTS OF BOTH PARTIES. From the date
of this Agreement until the earlier of the Effective Time or the
termination of this Agreement, unless the prior written consent
of the other Party shall have been obtained, and except as
otherwise expressly contemplated herein, each Party shall and
shall cause each of its Subsidiaries to (i) operate its business
only in the usual, regular, and ordinary course, (ii) preserve
intact its business organization and Assets and maintain its
rights and franchises, (iii) use its reasonable efforts to
maintain its current employee relationships, and (iv) take no
action which would (a) adversely affect the ability of any Party
to obtain any Consents required for the transactions contemplated
hereby without imposition of a condition or restriction of the
type referred to in the last sentence of Section 9.1(b) of this
Agreement, or (b) adversely affect the ability of any Party to
perform its covenants and agreements under this Agreement;
provided that in the case of UPC, the provisions of this Section
7.1 (other than the provisions of clause (iv) above) shall not be
deemed to preclude UPC from continuing to implement its program
of acquiring unaffiliated depository and nondepository
institutions.
7.2 NEGATIVE COVENANTS OF MUTUAL. From the date of this
Agreement until the earlier of the Effective Time or the
termination of this Agreement, Mutual covenants and agrees that
it will not do or agree or commit to do, or permit any of its
Subsidiaries to do or agree or commit to do, any of the following
without the prior written consent of the chief executive officer
or chief financial officer of UPC, which consent shall not be
unreasonably withheld:
(a) except for the Savings Bank Charter Amendment,
amend the Certificate of Incorporation, Bylaws, or other
governing instruments of any Mutual Company, or
(b) incur, guarantee, or otherwise become responsible
for, any additional debt obligation or other obligation for
borrowed money (other than indebtedness of an Mutual Company to
another Mutual Company) in excess of an aggregate of $50,000 (for
the Mutual Companies on a consolidated basis), except in the
ordinary course of the business consistent with past practices
(which shall include, for Mutual Subsidiaries that are depository
institutions, creation of deposit liabilities, purchases of
federal funds, advances from the Federal Reserve Bank or Federal
Home Loan Bank, and entry into repurchase agreements fully
secured by U.S. government or agency securities), or impose, or
suffer the imposition, on any Asset of any Mutual Company of any
Lien or permit any such Lien to exist (other than in connection
with deposits, repurchase agreements, bankers acceptances,
"treasury tax and loan" accounts established in the ordinary
course of
business, the satisfaction of legal requirements in the exercise
of trust powers, and Liens in effect as of the date hereof that
are disclosed in the Mutual Disclosure Memorandum or incurred in
the ordinary course of business consistent with past practices);
or
(c) repurchase, redeem, or otherwise acquire or
exchange (other than exchanges in the ordinary course under
employee benefit plans), directly or indirectly, any shares, or
any securities convertible into any shares, of the capital stock
of any Mutual Company, or declare or pay any dividend or make any
other distribution in respect of Mutual's capital stock, provided
that Mutual may (to the extent legally and contractually
permitted to do so), but shall not be obligated to, declare and
pay regular quarterly cash dividends on the shares of Mutual
Common Stock at a rate of $.08 per share, with usual and regular
record and payment dates in accordance with past practice as
disclosed in Section 7.2(c) of the Mutual Disclosure Memorandum
and such dates may not be changed without the prior written
consent of UPC; provided, that, notwithstanding the provisions of
Section 1.3 of this Agreement, the Parties shall cooperate in
selecting the Effective Time to ensure that, with respect to the
quarterly period in which the Effective Time occurs, the holders
of Mutual Common Stock do not receive both a dividend in respect
of their Mutual Common Stock and a dividend in respect of UPC
Common Stock or fail to receive any dividend; or
(d) except for this Agreement, or pursuant to the
Stock Option Agreement or pursuant to the exercise of Rights
outstanding as of the date of this Agreement and pursuant to the
terms thereof in existence on the date of this Agreement, issue,
sell, pledge, encumber, authorize the issuance of, enter into any
Contract to issue, sell, pledge, encumber, or authorize the
issuance of, or otherwise permit to become outstanding, any
additional shares of Mutual Common Stock or any other capital
stock of any Mutual Company, or any stock appreciation rights, or
any option, warrant, conversion, or other right to acquire any
such stock, or any security convertible into any such stock; or
(e) adjust, split, combine, or reclassify any capital
stock of any Mutual Company or issue or authorize the issuance of
any other securities in respect of or in substitution for shares
of Mutual Common Stock, or sell, lease, mortgage, or otherwise
dispose of or otherwise encumber (i) any shares of capital stock
of any Mutual Subsidiary (unless any such shares of stock are
sold or otherwise transferred to another Mutual Company) or (ii)
any Asset having a book value in excess of $50,000 other than in
the ordinary course of business for reasonable and adequate
consideration; or
(f) except for purchases of investment securities
acquired in the ordinary course of business consistent with past
practice, purchase any securities or make any Material
investment, either by purchase of stock or securities,
contributions to capital, Asset transfers, or purchase of any
Assets, in any Person other than a wholly-owned Mutual
Subsidiary, or otherwise acquire direct or indirect control over
any Person, other than in connection with (i) foreclosures in the
ordinary course of business, (ii) acquisitions of control by a
depository institution Subsidiary in its fiduciary capacity, or
(iii) the creation of new wholly-owned Subsidiaries organized to
conduct or continue activities otherwise permitted by this
Agreement; or
(g) except as permitted by this Agreement, grant any
increase in compensation or benefits to the employees or officers
of any Mutual Company, except in accordance with the ordinary
course of business consistent with past practice or as required
by Law; pay any severance or termination pay or any bonus other
than pursuant to written policies or written Contracts in effect
on the date of this Agreement; enter into or amend any severance
agreements
with officers of any Mutual Company; grant any Material increase
in fees or other increases in compensation or other benefits to
directors of any Mutual Company except in accordance with the
ordinary course of business consistent with past practice; or
voluntarily accelerate the vesting of any stock options or other
stock-based compensation or employee benefits; or
(h) enter into or amend any employment Contract
between any Mutual Company and any Person (unless such amendment
is required by Law or a pre-existing contractual obligation) that
the Mutual Company does not have the unconditional right to
terminate without Liability (other than Liability for services
already rendered), at any time on or after the Effective Time; or
(i) adopt any new employee benefit plan of any Mutual
Company or make any Material change in or to any existing
employee benefit plans of any Mutual Company other than any such
change that is required by Law or that, in the opinion of
counsel, is necessary or advisable to maintain the tax qualified
status of any such plan; or
(j) make any significant change in any Tax or
accounting methods or systems of internal accounting controls,
except as may be appropriate to conform to changes in Tax Laws or
regulatory accounting requirements or GAAP; or
(k) commence any Litigation other than as necessary
for the prudent operation of its business or settle any
Litigation involving any Liability of any Mutual Company for
Material money damages or restrictions upon the operations of any
Mutual Company; or
(l) except in the ordinary course of business, modify,
amend, or terminate any Material Contract or waive, release,
compromise, or assign any Material rights or claims.
7.3 ADVERSE CHANGES IN CONDITION. Each Party agrees to
give written notice promptly to the other Party upon becoming
aware of the occurrence or impending occurrence of any event or
circumstance relating to it or any of its Subsidiaries which (i)
is reasonably likely to have, individually or in the aggregate, a
Material Adverse Effect on it or (ii) would cause or constitute a
Material breach of any of its representations, warranties, or
covenants contained herein, and to use its reasonable efforts to
prevent or promptly to remedy the same.
7.4 REPORTS. Each Party and its Subsidiaries shall file
all reports required to be filed by it with Regulatory
Authorities between the date of this Agreement and the Effective
Time and shall deliver to the other Party copies of all such
reports promptly after the same are filed. If financial
statements are contained in any such reports filed with the SEC,
such financial statements will fairly present the consolidated
financial position of the entity filing such statements as of the
dates indicated and the consolidated results of operations,
changes in stockholders' equity, and cash flows for the periods
then ended in accordance with GAAP (subject in the case of
interim financial statements to normal recurring year-end
adjustments that are not Material). As of their respective
dates, such reports filed with the SEC will comply in all
Material respects with the Securities Laws 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 in order
to make the statements therein, in light of the circumstances
under which they were made, not misleading. Any financial
statements contained in any other reports to another Regulatory
Authority shall be prepared in accordance with Laws applicable to
such reports.
ARTICLE 8
ADDITIONAL AGREEMENTS
8.1 REGISTRATION STATEMENT; PROXY STATEMENT; STOCKHOLDER
APPROVAL. As soon as reasonably practicable after execution of
this Agreement, UPC shall file the Registration Statement with
the SEC, and shall use its reasonable efforts to cause the
Registration Statement to become effective under the 1933 Act and
take any action required to be taken under the applicable state
Blue Sky or securities Laws in connection with the issuance of
the shares of UPC Common Stock upon consummation of the Merger.
Prior to the filing of the Registration Statement, UPC shall
provide Mutual and its counsel copies thereof. Mutual shall
furnish all information concerning it and the holders of its
capital stock as UPC may reasonably request in connection with
such action. Mutual shall call a Stockholders' Meeting, to be
held as soon as reasonably practicable after the Registration
Statement is declared effective by the SEC, for the purpose of
voting upon approval of (i) this Agreement and the Plan of Merger
and (ii) such other related matters as it deems appropriate. In
connection with the Stockholders' Meeting, (i) Mutual shall
prepare and file with the SEC a Proxy Statement and mail such
Proxy Statement to Mutual's stockholders, (ii) the Parties shall
furnish to each other all information concerning them that they
may reasonably request in connection with such Proxy Statement,
(iii) the Board of Directors of Mutual shall recommend to
Mutual's stockholders the approval of the matters submitted for
approval, and (iv) the Board of Directors and officers of Mutual
shall use their reasonable efforts to obtain such stockholders'
approvals, provided that Mutual may withdraw, modify, or change
in an adverse manner to UPC its recommendations if the Board of
Directors of Mutual, after having consulted with and based upon
the advice of outside counsel, determines in good faith that the
failure to so withdraw, modify, or change its recommendation
could constitute a breach of the fiduciary duties of Mutual's
Board of Directors under applicable Law. In addition, nothing in
this Section 8.1 or elsewhere in this Agreement shall prohibit
accurate disclosure by either Party of information that is
required to be disclosed in the Registration Statement or the
Proxy Statement or in any other document required to be filed
with the SEC (including, without limitation, a
Solicitation/Recommendation Statement on Schedule 14D-9 under the
▇▇▇▇ ▇▇▇) or otherwise required to be publicly disclosed by
applicable Law or regulations or rules of the NYSE or the NASD.
8.2 EXCHANGE LISTING. UPC shall use its reasonable efforts
to list, prior to the Effective Time, on the NYSE, subject to
official notice of issuance, the shares of UPC Common Stock to be
issued to the holders of Mutual Common Stock pursuant to the
Merger.
8.3 APPLICATIONS. UPC shall promptly prepare and file, and
Mutual shall cooperate in the preparation and, where appropriate,
filing of, applications with all Regulatory Authorities having
jurisdiction over the transactions contemplated by this Agreement
seeking the requisite Consents necessary to consummate the
transactions contemplated by this Agreement. Prior to each
filing, UPC shall provide Mutual and its counsel with copies of
such applications.
8.4 FILINGS WITH STATE OFFICES. Upon the terms and subject
to the conditions of this Agreement, UPC shall cause UPHC to
execute and file the Certificate of Merger with the Secretary of
State of the State of Delaware and the Articles of Merger with
the Secretary of State of the State of Tennessee.
8.5 AGREEMENT AS TO EFFORTS TO CONSUMMATE. Subject to the
terms and conditions of this Agreement, each Party agrees to use,
and to cause its Subsidiaries to use, its reasonable efforts to
take, or cause to be taken, all actions, and to do, or cause to
be done, all
things necessary, proper, or advisable under applicable Laws to
consummate and make effective, as soon as reasonably practicable
after the date of this Agreement, the transactions contemplated
by this Agreement, including, without limitation, using its
reasonable efforts to lift or rescind any Order adversely
affecting its ability to consummate the transactions contemplated
herein and to cause to be satisfied the conditions referred to in
Article 9 of this Agreement; provided, that nothing herein shall
preclude either Party from exercising its rights under this
Agreement. Each Party shall use, and shall cause each of its
Subsidiaries to use, its reasonable efforts to obtain all
Consents necessary or desirable for the consummation of the
transactions contemplated by this Agreement.
8.6 INVESTIGATION AND CONFIDENTIALITY.
(a) Prior to the Effective Time, each Party shall keep
the other Party advised of all Material developments relevant to
its business and to consummation of the Merger and shall permit
the other Party to make or cause to be made such investigation of
the business and properties of it and its Subsidiaries and of
their respective financial and legal conditions as the other
Party reasonably requests, provided that such investigation shall
be reasonably related to the transactions contemplated hereby and
shall not interfere unnecessarily with normal operations. No
investigation by a Party shall affect the representations and
warranties of the other Party.
(b) Each Party shall, and shall cause its advisers and
agents to, maintain the confidentiality of all confidential
information furnished to it by the other Party concerning its and
its Subsidiaries' businesses, operations, and financial positions
and shall not use such information for any purpose except in
furtherance of the transactions contemplated by this Agreement.
If this Agreement is terminated prior to the Effective Time, each
Party shall promptly return or certify the destruction of all
documents and copies thereof, and all work papers containing
confidential information received from the other Party.
(c) Each Party agrees to give the other Party notice
as soon as practicable after any determination by it of any fact
or occurrence relating to the other Party which it has discovered
through the course of its investigation and which represents, or
is reasonably likely to represent, either a Material breach of
any representation, warranty, covenant, or agreement of the other
Party or which has had or is reasonably likely to have a Material
Adverse Effect on the other Party.
(d) Neither Party nor any of their respective
Subsidiaries shall be required to provide access to or to
disclose information where such access or disclosure would
violate or prejudice the rights of its customers, jeopardize the
attorney-client or similar privilege with respect to such
information or contravene any Law, rule, regulation, Order,
judgment, decree, fiduciary duty, or agreement entered into prior
to the date of this Agreement. The Parties will use their
reasonable efforts to make appropriate substitute disclosure
arrangements, to the extent practicable, in circumstances in
which the restrictions of the preceding sentence apply.
8.7 PRESS RELEASES. Prior to the Effective Time, UPC and
Mutual shall consult with each other as to the form and substance
of any press release or other public disclosure materially
related to this Agreement or any other transaction contemplated
hereby; provided, that nothing in this Section 8.7 shall be
deemed to prohibit any Party from making any disclosure which its
counsel deems necessary or advisable in order to satisfy such
Party's disclosure obligations imposed by Law.
8.8 CERTAIN ACTIONS. Except with respect to this Agreement
and the Plan of Merger and the transactions contemplated hereby
and thereby, no Mutual Company nor any Affiliate thereof nor any
Representatives thereof retained by any Mutual Company shall
directly or indirectly solicit or engage in negotiations
concerning any Acquisition Proposal, or provide any confidential
information or assistance to, or have any discussions with, any
Person with respect to an Acquisition Proposal. Notwithstanding
the foregoing, Mutual may, and may authorize and permit its
Representatives to, provide Persons with confidential
information, have discussions or negotiations with, or otherwise
facilitate an effort or attempt by such Person to make or
implement an Acquisition Proposal not solicited in violation of
this Agreement if Mutual's Board of Directors, after having
consulted with, and based upon the advice of, outside counsel,
determines in good faith that the failure to take such actions
could constitute a breach of the fiduciary duties of Mutual's
Board of Directors under applicable Law; provided, that Mutual
shall promptly advise UPC following the receipt of any
Acquisition Proposal and the Material details thereof; and,
provided further, that prior to delivery of confidential
information relating to Mutual or access to Mutual's books,
records, or properties in connection therewith, the other Person
shall have entered into a confidentiality agreement substantially
similar to the Confidentiality Agreement previously entered into
between Mutual and UPC. Nothing contained in this Section 8.8
shall prohibit the Board of Directors of Mutual from complying
with Rule 14e-2, promulgated under the 1934 Act. Mutual shall
(i) immediately cease and cause to be terminated any existing
activities, discussions, or negotiations with any Persons
conducted heretofore with respect to any of the foregoing and
(ii) direct and use its reasonable efforts to cause of all its
Representatives not to engage in any of the foregoing.
8.9 TAX TREATMENT. Each of the Parties undertakes and
agrees to use its reasonable efforts to cause the Merger, and to
take no action which would cause the Merger not, to qualify as a
"reorganization" within the meaning of Section 368(a) of the
Internal Revenue Code for federal income tax purposes.
8.10 STATE TAKEOVER LAWS. Each Mutual Company shall take
all necessary steps to exempt the transactions contemplated by
this Agreement and the Plan of Merger from, or if necessary,
challenge the validity or applicability of, any applicable
Takeover Laws.
8.11 CHARTER PROVISIONS. Each Mutual Company shall take
all necessary action to ensure that the entering into of this
Agreement and the Plan of Merger and the consummation of the
Merger and the other transactions contemplated hereby and thereby
do not and will not result in the grant of any rights to any
Person under the Certificate of Incorporation, Bylaws, or other
governing instruments of any Mutual Company or restrict or impair
the ability of UPC or any of its Subsidiaries to vote, or
otherwise to exercise the rights of a stockholder with respect
to, shares of any Mutual Company that may be directly or
indirectly acquired or controlled by it. Prior to the Closing,
Mutual shall cause the charter of First Mutual Bank, S.B. to be
amended to delete the provisions of Section 8.A thereof (the
"Savings Bank Charter Amendment").
8.12 AGREEMENT OF AFFILIATES. Mutual has disclosed in
Section 8.12 of the Mutual Disclosure Memorandum each Person whom
it reasonably believes may be deemed an "affiliate" of Mutual for
purposes of Rule 145 under the 1933 Act. Mutual shall use its
reasonable efforts to cause each such Person to deliver to UPC
not later than 30 days prior to the Effective Time, a written
agreement, in substantially the form of Exhibit 3, providing that
such Person will not sell, pledge, transfer, or otherwise dispose
of the shares of Mutual Common Stock held by such Person except
as contemplated by such agreement or by this Agreement and will
not sell, pledge, transfer, or otherwise dispose of the shares of
UPC Common Stock to be received by such Person
upon consummation of the Merger except in compliance with
applicable provisions of the 1933 Act and the rules and
regulations thereunder (and UPC shall be entitled to place
restrictive legends upon certificates for shares of UPC Common
Stock issued to affiliates of Mutual pursuant to this Agreement
to enforce the provisions of this Section 8.12). UPC shall not
be required to maintain the effectiveness of the Registration
Statement under the 1933 Act for the purposes of resale of UPC
Common Stock by such affiliates.
8.13 EMPLOYEE BENEFITS AND CONTRACTS. Following the
Effective Time, but in no event earlier than the consolidation of
Mutual's depository institution Subsidiaries with UPC's
depository institution Subsidiaries, UPC shall provide to
officers and employees of the Mutual Companies (the "Continuing
Employees"), employee benefits under employee benefit plans on
terms and conditions which when taken as a whole are
substantially similar to those currently provided by the UPC
Companies to their similarly situated officers and employees.
For purposes of participation, vesting, and benefit accruals (but
not accrual of benefits under UPC's tax-qualified retirement
plans) under such employee benefit plans, (i) service under any
qualified defined benefit or contribution plans of Mutual shall
be treated as service under UPC's qualified defined benefit or
contribution plans and (ii) service under any other employee
benefit plans of Mutual shall be treated as service under any
similar employee benefit plans maintained by UPC. UPC shall
cause the UPC welfare benefit plans that cover the Continuing
Employees after the Effective Time to (i) waive any waiting
period and restrictions and limitations for preexisting
conditions or insurability and (ii) cause any deductible,
co-insurance, or maximum out-of-pocket payments made by the
Continuing Employees under Mutual's welfare benefit plans to be
credited to such Continuing Employees under the UPC welfare
benefit plans, so as to reduce the amount of any deductible,
co-insurance, or maximum out-of-pocket payments payable by the
Continuing Employees under the UPC welfare benefit plans. Prior
to the commencement of the Continuing Employee's participation in
the UPC employee benefit plans and programs, the benefit coverage
of, and participation in benefit plans by, the Continuing
Employees shall continue under the Mutual Benefit Plans, as in
effect immediately prior to the Effective Time. During such
transition period, the coverage under and participation in the
Mutual Benefit Plans shall be deemed to provide the Continuing
Employees with benefits that are no less favorable than those
offered to other employees of UPC and its Subsidiaries. Except
as expressly provided in the Supplemental Letter, UPC also shall
cause Mutual and its Subsidiaries to honor all employment,
severance, consulting, and other compensation Contracts disclosed
in Section 8.13 of the Mutual Disclosure Memorandum to UPC
between any Mutual Company and any current or former director,
officer, independent contractor, or employee thereof, and all
provisions of the Mutual Benefit Plans.
8.14 INDEMNIFICATION.
(a) After the Effective Time, UPC shall indemnify,
defend and hold harmless the present and former directors,
officers, employees, and agents of Mutual or any of Mutual's
Subsidiaries (each, a "Indemnified Party") (including any person
who becomes a director, officer, employee, or agent prior to the
Effective Time) against all Liabilities (including reasonable
attorneys' fees, and expenses, judgments, fines and amounts paid
in settlement) arising out of actions or omissions occurring at
or prior to the Effective Time (including the transactions
contemplated by this Agreement and the Stock Option Agreement) to
the full extent permitted under Delaware Law and by Mutual's
Certificate of Incorporation and Bylaws, as in effect on the date
hereof, and any indemnity agreements entered into prior to the
date of this Agreement by any of the Mutual Companies and any
director, officer, employee, or agent of any of the Mutual
Companies, including, without limitation, provisions relating to
advances of expenses incurred in the defense of any Litigation,
and as provided in Section 8.14(a) of the Mutual Disclosure
Memorandum. Without limiting the foregoing, in any case in which
approval by UPC is required to effectuate any indemnification,
UPC shall direct, at the election of the Indemnified Party, that
the determination of any such approval shall be made by
independent counsel mutually agreed upon between UPC and the
Indemnified Party.
(b) Any Indemnified Party wishing to claim
indemnification under paragraph (a) of this Section 8.14, upon
learning of any such Liability or Litigation, shall promptly
notify UPC thereof, provided that the failure so to notify shall
not affect the obligations of UPC under this Section 8.14 unless
and to the extent such failure materially increases UPC's
Liability under this Section 8.14. In the event of any such
Litigation (whether arising before or after the Effective Time),
(i) UPC or the Surviving Corporation shall have the right to
assume the defense thereof and UPC 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
UPC or the Surviving Corporation elects not to assume such
defense or counsel for the Indemnified Parties advises that there
are substantive issues which raise conflicts of interest between
UPC or the Surviving Corporation and the Indemnified Parties, the
Indemnified Parties may retain counsel satisfactory to them, and
UPC or the Surviving Corporation shall pay all reasonable fees
and expenses of such counsel for the Indemnified Parties promptly
as statements therefor are received; provided, that UPC shall be
obligated pursuant to this paragraph (c) to pay for only one firm
of counsel for all Indemnified Parties in any jurisdiction, (ii)
the Indemnified Parties will cooperate in the defense of any such
Litigation, and (iii) UPC shall not be liable for any settlement
effected without its prior written consent; and provided further
that the Surviving Corporation shall not have any obligation
hereunder to any Indemnified Party when and if a court of
competent jurisdiction shall determine, and such determination
shall have become final, that the indemnification of such
Indemnified Party in the manner contemplated hereby is prohibited
by applicable Law.
(c) The Surviving Corporation shall not be liable for
any settlement effected without its prior written consent which
shall not be unreasonably withheld.
(d) If either UPC or the Surviving Corporation or any
of their respective successors or assigns shall consolidate with
or merge into any other Person and shall not be the continuing or
surviving Person of such consolidation or merger or shall
transfer all or substantially all of its Assets to any Person,
then and in each case, proper provision shall be made so that the
successors and assigns of either UPC or the Surviving Corporation
shall assume the obligations set forth in this Section 8.14.
(e) UPC shall pay all reasonable costs, including
attorneys' fees, that may be incurred by any Indemnified Party in
enforcing the indemnity and other obligations provided for in
this Section 8.14.
(f) The provisions of this Section 8.14 are intended
to be for the benefit of, and shall be enforceable by, each
Indemnified Party and his or her heirs or representatives.
8.15 CERTAIN MODIFICATIONS. UPC and Mutual shall consult
with each other with respect to their loan, litigation, and real
estate valuation policies and practices (including loan
classifications and levels of reserves) and Mutual shall make
such modifications or changes to its policies and practices, if
any, prior to the Effective Time, as may be mutually agreed upon.
UPC and Mutual also shall consult with each other with respect to
the character, amount, and timing of restructuring and
Merger-related expense charges to be taken by each of the Parties
in
connection with the transactions contemplated by this Agreement
and shall take such charges in accordance with GAAP as may be
mutually agreed upon by the Parties. Neither Party's
representations, warranties, and covenants contained in this
Agreement shall be deemed to be inaccurate or breached in any
respect as a consequence of any modifications or charges
undertaken solely on account of this Section 8.15.
ARTICLE 9
CONDITIONS PRECEDENT TO OBLIGATIONS TO CONSUMMATE
9.1 CONDITIONS TO OBLIGATIONS OF EACH PARTY. The
respective obligations of each Party to perform this Agreement
and the Plan of Merger and to consummate the Merger and the other
transactions contemplated hereby are subject to the satisfaction
of the following conditions, unless waived by both Parties
pursuant to Section 11.6 of this Agreement:
(a) STOCKHOLDER APPROVALS. The stockholders of Mutual
shall have approved this Agreement and the Plan of Merger and the
consummation of the transactions contemplated hereby and thereby,
including the Merger, as and to the extent required by Law and by
the provisions of any governing instruments.
(b) REGULATORY APPROVALS. All Consents of, filings
and registrations with, and notifications to, all Regulatory
Authorities required for consummation of the Merger shall have
been obtained or made and shall be in full force and effect and
all waiting periods required by Law shall have expired. No
Consent obtained from any Regulatory Authority which is necessary
to consummate the transactions contemplated hereby shall be
conditioned or restricted in a manner (excluding requirements
relating to the raising of additional capital or the disposition
of Assets or deposits) which in the reasonable good faith
judgment of the Board of Directors of UPC would so materially
adversely impact the economic or business benefits of the
transactions contemplated by this Agreement so as to render
inadvisable the consummation of the Merger.
(c) CONSENTS AND APPROVALS. Each Party shall have
obtained any and all Consents required for consummation of the
Merger (other than those referred to in Section 9.1(b) of this
Agreement) or for the preventing of any Default under any
Contract or Permit of such Party which, if not obtained or made,
is reasonably likely to have, individually or in the aggregate, a
Material Adverse Effect on such Party.
(d) LEGAL PROCEEDINGS. No court or governmental or
Regulatory Authority of competent jurisdiction shall have
enacted, issued, promulgated, enforced, or entered any Law or
Order (whether temporary, preliminary, or permanent) or taken any
other action which prohibits, restricts, or makes illegal
consummation of the transactions contemplated by this Agreement.
(e) REGISTRATION STATEMENT. The Registration
Statement shall be effective under the 1933 Act, no stop orders
suspending the effectiveness of the Registration Statement shall
have been issued, no action, suit, proceeding, or investigation
by the SEC to suspend the effectiveness thereof shall have been
initiated and be continuing, and all necessary approvals under
state securities Laws or the 1933 Act or 1934 Act relating to the
issuance or trading of the shares of UPC Common Stock issuable
pursuant to the Merger shall have been received.
(f) EXCHANGE LISTING. The shares of UPC Common Stock
issuable pursuant to the Merger shall have been approved for
listing on the NYSE, subject to official notice of issuance.
(g) TAX MATTERS. Mutual and UPC shall have received a
written opinion from ▇▇▇▇▇, ▇▇▇▇▇▇▇ & ▇▇▇▇▇ in each case in a
form reasonably satisfactory to such Party (the "Tax Opinions"),
dated the date of the Effective Time, substantially to the effect
that (i) the Merger will constitute a reorganization within the
meaning of Section 368(a) of the Internal Revenue Code, (ii) no
gain or loss will be recognized by holders of Mutual Common Stock
who exchange all of their Mutual Common Stock solely for UPC
Common Stock pursuant to the Merger (except with respect to any
cash received in lieu of a fractional share interest in UPC
Common Stock), (iii) the tax basis of the UPC Common Stock
received by holders of Mutual Common Stock who exchange all of
their Mutual Common Stock solely for UPC Common Stock in the
Merger will be the same as the tax basis of the Mutual Common
Stock surrendered in exchange for the UPC Common Stock (reduced
by an amount allocable to a fractional share interest in UPC
Common Stock for which cash is received), and (iv) the holding
period of the UPC Common Stock received by holders who exchange
all of their Mutual Common Stock solely for UPC Common Stock in
the Merger will be the same as the holding period of the Mutual
Common Stock surrendered in exchange therefor, provided that such
Mutual Common Stock is held as a capital asset at the Effective
Time. In rendering such Tax Opinions, such counsel shall be
entitled to rely upon representations of officers of Mutual and
UPC reasonably satisfactory in form and substance to such
counsel.
9.2 CONDITIONS TO OBLIGATIONS OF UPC. The obligations of
UPC to perform this Agreement and consummate the Merger and the
other transactions contemplated hereby are subject to the
satisfaction of the following conditions, unless waived by UPC
pursuant to Section 11.6(a) of this Agreement:
(a) REPRESENTATIONS AND WARRANTIES. For purposes of
this Section 9.2(a), the accuracy of the representations and
warranties of Mutual set forth in this Agreement shall be
assessed as of the date of this Agreement and as of the Effective
Time with the same effect as though all such representations and
warranties had been made on and as of the Effective Time
(provided that representations and warranties which are confined
to a specified date shall speak only as of such date). The
representations and warranties of Mutual set forth in Section 5.3
of this Agreement shall be true and correct (except for
inaccuracies which are de minimis in amount). The
representations and warranties of Mutual set forth in Sections
5.18, 5.19, 5.20, and 5.21 of this Agreement shall be true and
correct in all Material respects. There shall not exist
inaccuracies in the representations and warranties of Mutual set
forth in this Agreement (including the representations and
warranties set forth in Sections 5.3, 5.18, 5.19, 5.20, and 5.21)
such that the aggregate effect of such inaccuracies has, or is
reasonably likely to have, a Material Adverse Effect on Mutual;
provided that, for purposes of this sentence only, those
representations and warranties which are qualified by references
to "material, "Material," "Material Adverse Effect," or
variations thereof, or to the "Knowledge" of Mutual or to a
matter being "known" by Mutual shall be deemed not to include
such qualifications.
(b) PERFORMANCE OF AGREEMENTS AND COVENANTS. Each and
all of the agreements and covenants of Mutual to be performed and
complied with pursuant to this Agreement and the other agreements
contemplated hereby prior to the Effective Time shall have been
duly performed and complied with in all Material respects.
(c) CERTIFICATES. Mutual shall have delivered to UPC
(i) a certificate, dated as of the Effective Time and signed on
its behalf by its duly authorized officers, to the effect that
the conditions of its obligations set forth in Section 9.2(a) and
9.2(b) of this Agreement have been satisfied and (ii) certified
copies of resolutions duly adopted by Mutual's Board of Directors
and stockholders evidencing the taking of all corporate action
necessary to authorize the execution, delivery, and performance
of this Agreement and the Plan of Merger, and the consummation of
the transactions contemplated hereby and thereby, all in such
reasonable detail as UPC and its counsel shall request.
(d) AFFILIATE AGREEMENTS. UPC shall have received
from each affiliate of Mutual the affiliates agreement referred
to in Section 8.12 of this Agreement.
9.3 CONDITIONS TO OBLIGATIONS OF MUTUAL. The obligations
of Mutual to perform this Agreement and the Plan of Merger and
consummate the Merger and the other transactions contemplated
hereby are subject to the satisfaction of the following
conditions, unless waived by Mutual pursuant to Section 11.6(b)
of this Agreement:
(a) REPRESENTATIONS AND WARRANTIES. For purposes of
this Section 9.3(a), the accuracy of the representations and
warranties of UPC set forth in this Agreement shall be assessed
as of the date of this Agreement and as of the Effective Time
with the same effect as though all such representations and
warranties had been made on and as of the Effective Time
(provided that representations and warranties which are confined
to a specified date shall speak only as of such date). The
representations and warranties of UPC set forth in Section 6.3 of
this Agreement shall be true and correct (except for inaccuracies
which are de minimis in amount). The representations and
warranties of UPC set forth in Section 6.16 of this Agreement
shall be true and correct in all Material respects. There shall
not exist inaccuracies in the representations and warranties of
UPC set forth in this Agreement (including the representations
and warranties set forth in Sections 6.3 and 6.16) such that the
aggregate effect of such inaccuracies has, or is reasonably
likely to have, a Material Adverse Effect on UPC; provided that,
for purposes of this sentence only, those representations and
warranties which are qualified by references to "material,"
"Material," "Material Adverse Effect," or variations thereof, or
to the "Knowledge" of UPC or to a matter being "known" by UPC
shall be deemed not to include such qualifications.
(b) PERFORMANCE OF AGREEMENTS AND COVENANTS. Each and
all of the agreements and covenants of UPC to be performed and
complied with pursuant to this Agreement and the other agreements
contemplated hereby prior to the Effective Time shall have been
duly performed and complied with in all Material respects.
(c) CERTIFICATES. UPC shall have delivered to Mutual
(i) a certificate, dated as of the Effective Time and signed on
its behalf by its duly authorized officers, to the effect that
the conditions of its obligations set forth in Section 9.3(a) and
9.3(b) of this Agreement have been satisfied and (ii) certified
copies of resolutions duly adopted by UPC's Board of Directors
evidencing the taking of all corporate action necessary to
authorize the execution, delivery, and performance of this
Agreement and the consummation of the transactions contemplated
hereby, all in such reasonable detail as Mutual and its counsel
shall request.
(d) FAIRNESS OPINION. Mutual shall have received an
opinion from ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ & Co. Incorporated to the effect
that the Merger is fair to shareholders of Mutual from a
financial point of view dated the date of the Proxy Statement.
ARTICLE 10
TERMINATION
10.1 TERMINATION. Notwithstanding any other provision of
this Agreement and the Plan of Merger, and notwithstanding the
approval of this Agreement by the stockholders of Mutual or UPC,
this Agreement may be terminated and the Merger abandoned at any
time prior to the Effective Time:
(a) By mutual consent of the Board of Directors of UPC
and the Board of Directors of Mutual; or
(b) By the Board of Directors of either Party
(provided that the terminating Party is not then in breach of any
representation or warranty contained in this Agreement under the
applicable standard set forth in Section 9.2(a) of this Agreement
in the case of Mutual and Section 9.3(a) of this Agreement in the
case of UPC or in Material breach of any covenant or other
agreement contained in this Agreement) in the event of an
inaccuracy of any representation or warranty of the other Party
contained in this Agreement which cannot be or has not been cured
within 30 days after the giving of written notice to the
breaching Party of such inaccuracy and which inaccuracy would
provide the terminating Party the ability to refuse to consummate
the Merger under the applicable standard set forth in Section
9.2(a) of this Agreement in the case of Mutual and Section 9.3(a)
of this Agreement in the case of UPC; or
(c) By the Board of Directors of either Party
(provided that the terminating Party is not then in breach of any
representation or warranty contained in this Agreement under the
applicable standard set forth in Section 9.2(a) of this Agreement
in the case of Mutual and Section 9.3(a) in the case of UPC) in
the event of a Material breach by the other Party of any covenant
or agreement contained in this Agreement which cannot be or has
not been cured within 30 days after the giving of written notice
to the breaching Party of such breach; or
(d) By the Board of Directors of either Party in the
event (i) any Consent of any Regulatory Authority required for
consummation of the Merger and the other transactions
contemplated hereby shall have been denied by final nonappealable
action of such authority or if any action taken by such authority
is not appealed within the time limit for appeal, or (ii) the
stockholders of Mutual fail to vote their approval of the matters
submitted for the approval by such stockholders at the
Stockholders' Meeting where the transactions were presented to
such stockholders for approval and voted upon; or
(e) By the Board of Directors of either Party in the
event that the Merger shall not have been consummated by March
31, 1999, if the failure to consummate the transactions
contemplated hereby on or before such date is not caused by any
breach of this Agreement by the Party electing to terminate
pursuant to this Section 10.1(e); or
(f) By the Board of Directors of either Party
(provided that the terminating Party is not then in breach of any
representation or warranty contained in this Agreement under the
applicable standard set forth in Section 9.2(a) of this Agreement
in the case of Mutual and Section 9.3(a) of this Agreement in the
case of UPC or in Material breach of any covenant or other
agreement contained in this Agreement) in the event that any of
the conditions precedent to the obligations of such Party to
consummate the Merger cannot be satisfied or fulfilled by the
date specified in Section 10.1(e) of this Agreement;
10.2 EFFECT OF TERMINATION. In the event of the
termination and abandonment of this Agreement pursuant to Section
10.1 of this Agreement, this Agreement, the Plan of Merger, and
the Supplemental Letter shall become void and have no effect,
except that (i) the provisions of this Section 10.2 and Article
11 and Section 8.6(b) of this Agreement shall survive any such
termination and abandonment and (ii) a termination pursuant to
Sections 10.1(b), 10.1(c), or 10.1(f) of this Agreement shall not
relieve the breaching Party from Liability for an uncured willful
breach of a representation, warranty, covenant, or agreement
giving rise to such termination. The Stock Option Agreement
shall be governed by its own terms.
10.3 NON-SURVIVAL OF REPRESENTATIONS AND COVENANTS. The
respective representations, warranties, obligations, covenants,
and agreements of the Parties shall not survive the Effective
Time except this Section 10.3 and Articles 2, 3, 4, and 11 and
Sections 8.12, 8.13 and 8.14 of this Agreement and the
Supplemental Letter.
ARTICLE 11
MISCELLANEOUS
11.1 DEFINITIONS.
(a) Except as otherwise provided herein, the
capitalized terms set forth below shall have the following
meanings:
"Acquisition Proposal" with respect to a Party shall
mean any tender offer or exchange offer or any proposal for a
merger, acquisition of all of the stock or Assets of, or other
business combination involving such Party or any of its
Subsidiaries or the acquisition of a substantial equity interest
in, or a substantial portion of the Assets of, such Party or any
of its Subsidiaries.
"Affiliate" of a Person shall mean any other Person
directly, or indirectly through one or more intermediaries,
controlling, controlled by or under common control with such
Person.
"Agreement" shall mean this Agreement and Plan of
Reorganization, including the Exhibits hereto (except the Stock
Option Agreement) delivered pursuant hereto and incorporated
herein by reference.
"Articles of Merger" shall mean the Articles of Merger
to be executed by UPHC and filed with the Secretary of State of
the State of Tennessee relating to the Merger as contemplated by
Sections 1.1 and 1.3 of this Agreement.
"Assets" of a Person shall mean all of the assets,
properties, businesses, and rights of such Person of every kind,
nature, character, and description, whether real, personal, or
mixed, tangible or intangible, accrued or contingent, or
otherwise relating to or utilized in such Person's business,
directly or indirectly, in whole or in part, whether or not
carried on the books and records of such Person, and whether or
not owned in the name of such Person or any Affiliate of such
Person and wherever located.
"BHC Act" shall mean the federal Bank Holding Company
Act of 1956, as amended.
"Certificate of Merger" shall mean the Certificate of
Merger to be executed by UPHC and filed with the Secretary of
State of the State of Delaware relating to the Merger as
contemplated by Section 1.1 and 1.3 of this Agreement.
"Confidentiality Agreements" shall mean those certain
Confidentiality Agreements, entered into prior to the date of
this Agreement, between Mutual and UPC.
"Consent" shall mean any consent, approval,
authorization, clearance, exemption, waiver, or similar
affirmation by any Person pursuant to any Contract, Law, Order,
or Permit.
"Contract" shall mean any written or oral agreement,
arrangement, authorization, commitment, contract, indenture,
instrument, lease, obligation, plan, practice, restriction,
understanding, or undertaking of any kind or character, or other
document to which any Person is a party or that is binding on any
Person or its capital stock, Assets, or business.
"DGCL" shall mean the Delaware General Corporation Law.
"Default" shall mean (i) any breach or violation of or
default under any Contract, Order, or Permit, (ii) any occurrence
of any event that with the passage of time or the giving of
notice or both would constitute a breach or violation of or
default under any Contract, Order, or Permit, or (iii) any
occurrence of any event that with or without the passage of time
or the giving of notice would give rise to a right to terminate
or revoke, change the current terms of, or renegotiate, or to
accelerate, increase, or impose any Liability under, any
Contract, Order, or Permit, where, in any such event, such
Default is reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on a Party.
"Environmental Laws" shall mean all Laws relating to
pollution or protection of human health or the environment
(including ambient air, surface water, ground water, land
surface, or subsurface strata) and which are administered,
interpreted, or enforced by the United States Environmental
Protection Agency and state and local agencies with jurisdiction
over, and including common law in respect of, pollution or
protection of the environment, including the Comprehensive
Environmental Response Compensation and Liability Act, as
amended, 42 U.S.C. 9601 et seq. ("CERCLA"), the Resource
Conservation and Recovery Act, as amended, 42 U.S.C. 6901 et seq.
("RCRA"), and other Laws relating to emissions, discharges,
releases, or threatened releases of any Hazardous Material, or
otherwise relating to the manufacture, processing, distribution,
use, treatment, storage, disposal, transport, or handling of any
Hazardous Material.
"ERISA" shall mean the Employee Retirement Income
Security Act of 1974, as amended.
"Exhibits" 1 through 3, inclusive, shall mean the
Exhibits so marked, copies of which are attached to this
Agreement. Such Exhibits are hereby incorporated by reference
herein and made a part hereof, and may be referred to in this
Agreement and any other related instrument or document without
being attached hereto.
"GAAP" shall mean generally accepted accounting
principles, consistently applied during the periods involved.
"Hazardous Material" shall mean (i) any hazardous
substance, hazardous material, hazardous waste, regulated
substance, or toxic substance (as those terms are defined by any
applicable Environmental Laws) and (ii) any chemicals,
pollutants, contaminants, petroleum, petroleum products, or oil
(and specifically shall include asbestos requiring abatement,
removal, or encapsulation pursuant to the requirements of
governmental authorities and any polychlorinated biphenyls).
"HSR Act" shall mean Section 7A of the ▇▇▇▇▇▇▇ Act, as
added by Title II of the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements
Act of 1976, as amended, and the rules and regulations
promulgated thereunder.
"Internal Revenue Code" shall mean the Internal Revenue
Code of 1986, as amended.
"Knowledge" as used with respect to a Person (including
references to such Person being aware of a particular matter)
shall mean the personal knowledge of the chairman, president,
chief financial officer, chief accounting officer, chief credit
officer, general counsel, or any executive vice president of such
Person.
"Law" shall mean any code, law, ordinance, regulation,
reporting or licensing requirement, rule, or statute applicable
to a Person or its Assets, Liabilities, or business, including
those promulgated, interpreted, or enforced by any Regulatory
Authority.
"Liability" shall mean any direct or indirect, primary
or secondary, liability, indebtedness, obligation, penalty, cost,
or expense (including costs of investigation, collection, and
defense), claim, deficiency, guaranty, or endorsement of or by
any Person (other than endorsements of notes, bills, checks, and
drafts presented for collection or deposit in the ordinary course
of business) of any type, whether accrued, absolute or
contingent, liquidated or unliquidated, matured or unmatured, or
otherwise.
"Lien" shall mean any conditional sale agreement,
default of title, easement, encroachment, encumbrance,
hypothecation, infringement, lien, mortgage, pledge, reservation,
restriction, security interest, title retention, or other
security arrangement, or any adverse right or interest, charge,
or claim of any nature whatsoever of, on, or with respect to any
property or property interest, other than (i) Liens for property
Taxes not yet due and payable and (ii) for depository institution
Subsidiaries of a Party, pledges to secure deposits, and other
Liens incurred in the ordinary course of the banking business.
"Litigation" shall mean any action, arbitration, cause
of action, claim, complaint, criminal prosecution, demand letter,
governmental or other examination or investigation, hearing,
inquiry, administrative or other proceeding, or notice (written
or oral) by any Person alleging potential Liability or requesting
information relating to or affecting a Party, its business, its
Assets (including Contracts related to it), or the transactions
contemplated by this Agreement, but shall not include regular,
periodic examinations of depository institutions and their
Affiliates by Regulatory Authorities.
"Loan Property" shall mean any property owned, leased,
or operated by the Party in question or by any of its
Subsidiaries or in which such Party or Subsidiary holds a
security or other interest (including an interest in a fiduciary
capacity), and, where required by the context, includes the owner
or operator of such property, but only with respect to such
property.
"Material" for purposes of this Agreement shall be
determined in light of the facts and circumstances of the matter
in question; provided that any specific monetary amount stated in
this Agreement shall determine materiality in that instance.
"Material Adverse Effect" on a Party shall mean an
event, change, or occurrence which, individually or together with
any other event, change, or occurrence, has a Material adverse
impact on (i) the financial condition, results of operations, or
business of such Party and its Subsidiaries, taken as a whole or
(ii) the ability of such Party to perform its obligations under
this Agreement or to consummate the Merger or the other
transactions contemplated by this Agreement, provided that
"Material Adverse Effect" shall not be deemed to include the
impact of (a) changes in banking and similar Laws of general
applicability or interpretations thereof by courts or
governmental authorities, (b) changes in GAAP or regulatory
accounting principles generally applicable to banks and their
holding companies, (c) actions and omissions of a Party (or any
of its Subsidiaries) taken with the prior informed consent of the
other Party in contemplation of the transactions contemplated
hereby, and (d) the Merger and compliance with the provisions of
this Agreement (including the expense associated with the vesting
of benefits under the various employee or other benefit plans of
Mutual as a result of the Merger constituting a change of
control) on the operating performance of the Parties.
"Mutual Capital Stock" shall mean Mutual Common Stock
and Mutual Preferred Stock.
"Mutual Common Stock" shall mean the $.10 par value
common stock of Mutual.
"Mutual Companies" shall mean, collectively, Mutual and
all Mutual Subsidiaries.
"Mutual Disclosure Memorandum" shall mean the written
information entitled "Mutual Disclosure Memorandum" delivered
prior to the execution of this Agreement to UPC describing in
reasonable detail the matters contained therein and, with respect
to each disclosure made therein, specifically referencing each
Section or subsection of this Agreement under which such
disclosure is being made.
"Mutual Financial Statements" shall mean (i) the
consolidated statements of condition (including related notes and
schedules, if any) of Mutual as of December 31, 1997, 1996 and
1995, and the related statements of income, changes in
stockholders' equity, and cash flows (including related notes and
schedules, if any) for each of the three years ended December 31,
1997, 1996 and 1995, as filed by Mutual in SEC Documents and (ii)
the consolidated statements of condition of Mutual (including
related notes and schedules, if any) and related statements of
income, changes in stockholders' equity, and cash flows
(including related notes and schedules, if any) included in SEC
Documents filed with respect to periods ended subsequent to
December 31, 1997.
"Mutual Preferred Stock" shall mean the $.10 par value
preferred stock of Mutual.
"Mutual Stock Plans" shall mean the existing stock
option and other stock-based compensation plans of Mutual.
"Mutual Subsidiaries" shall mean the Subsidiaries of
Mutual, which shall include the Mutual Subsidiaries described in
Section 5.4 of this Agreement and any corporation, bank, savings
association, or other organization acquired as a Subsidiary of
Mutual in the future and owned by Mutual at the Effective Time.
"NASD" shall mean the National Association of
Securities Dealers, Inc.
"NYSE" shall mean the New York Stock Exchange, Inc.
"1933 Act" shall mean the Securities Act of 1933, as
amended.
"1934 Act" shall mean the Securities Exchange Act of
1934, as amended.
"Order" shall mean any administrative decision or
award, decree, injunction, judgment, order, quasi-judicial
decision or award, ruling, or writ of any federal, state, local,
or foreign or other court, arbitrator, mediator, tribunal,
administrative agency, or Regulatory Authority.
"Participation Facility" shall mean any facility or
property in which the Party in question or any of its
Subsidiaries participates in the management (including, but not
limited to, participating in a fiduciary capacity) and, where
required by the context, said term means the owner or operator of
such facility or property, but only with respect to such facility
or property.
"Party" shall mean either Mutual or UPC, and "Parties"
shall mean both Mutual and UPC.
"Permit" shall mean any federal, state, local, and
foreign governmental approval, authorization, certificate,
easement, filing, franchise, license, notice, permit, or right to
which any Person is a party or that is or may be binding upon or
inure to the benefit of any Person or its securities, Assets, or
business.
"Person" shall mean a natural person or any legal,
commercial, or governmental entity, such as, but not limited to,
a corporation, general partnership, joint venture, limited
partnership, limited liability company, trust, business
association, group acting in concert, or any person acting in a
representative capacity.
"Plan of Merger" shall mean the plan of merger
providing for the Merger, in substantially the form of Exhibit 2.
"Proxy Statement" shall mean the proxy statement used
by Mutual to solicit the approval of its stockholders of the
transactions contemplated by this Agreement, which shall include
the prospectus of UPC relating to the issuance of the UPC Common
Stock to holders of Mutual Common Stock.
"Registration Statement" shall mean the Registration
Statement on Form S-4, or other appropriate form, including any
pre-effective or post-effective amendments or supplements
thereto, filed with the SEC by UPC under the 1933 Act with
respect to the shares of UPC Common Stock to be issued to the
stockholders of Mutual in connection with the transactions
contemplated by this Agreement.
"Regulatory Authorities" shall mean, collectively, the
Federal Trade Commission, the United States Department of
Justice, the Board of the Governors of the Federal Reserve
System, the Office of the Comptroller of the Currency, the
Federal Deposit Insurance Corporation,
the Office of Thrift Supervision, all state regulatory agencies
having jurisdiction over the Parties and their respective
Subsidiaries, the NASD, the NYSE and the SEC.
"Representative" shall mean any investment banker,
financial advisor, attorney, accountant, consultant, or other
representative of a Person.
"Rights" shall mean all arrangements, calls,
commitments, Contracts, options, rights to subscribe to, scrip,
understandings, warrants, or other binding obligations of any
character whatsoever relating to, or securities or rights
convertible into or exchangeable for, shares of the capital stock
of a Person or by which a Person is or may be bound to issue
additional shares of its capital stock or other Rights.
"SEC" shall mean the United States Securities and
Exchange Commission.
"SEC Documents" shall mean all forms, proxy statements,
registration statements, reports, schedules, and other documents
filed, or required to be filed, by a Party or any of its
Subsidiaries with any Regulatory Authority pursuant to the
Securities Laws.
"Securities Laws" shall mean the 1933 Act, the 1934
Act, the Investment Company Act of 1940, as amended, the
Investment Advisors Act of 1940, as amended, the Trust Indenture
Act of 1939, as amended, and the rules and regulations of any
Regulatory Authority promulgated thereunder.
"Stock Option Agreement" shall mean the stock option
agreement by and between Mutual and UPC, in substantially the
form of Exhibit 1.
"Stockholders' Meeting" shall mean the meeting of the
stockholders of Mutual to be held pursuant to Section 8.1 of this
Agreement, including any adjournment or adjournments thereof.
"Subsidiaries" shall mean all those corporations,
banks, associations, or other entities of which the entity in
question owns or controls 50% or more of the outstanding equity
securities either directly or through an unbroken chain of
entities as to each of which 50% or more of the outstanding
equity securities is owned directly or indirectly by its parent;
provided, there shall not be included any such entity acquired
through foreclosure or any such entity the equity securities of
which are owned or controlled in a fiduciary capacity.
"Supplemental Letter" shall mean the supplemental
letter of even date herewith between the Parties relating to
certain understandings and agreements in addition to those
included in this Agreement.
"Surviving Corporation" shall mean UPHC as the
surviving corporation resulting from the Merger.
"Tax" or "Taxes" shall mean all federal, state, local,
and foreign taxes, charges, fees, levies, imposts, duties, or
other assessments, including income, gross receipts, excise,
employment, sales, use, transfer, license, payroll, franchise,
severance, stamp, occupation, windfall profits, environmental,
federal highway use, commercial rent, customs duties, capital
stock, paid-up capital, profits, withholding, Social Security,
single business and unemployment, disability, real property,
personal property, registration, ad valorem, value added,
alternative or
add-on minimum, estimated, or other tax of any kind whatsoever,
imposed or required to be withheld by the United States or any
state, local, or foreign government or subdivision or agency
thereof, including any interest, penalties, or additions thereto.
"Taxable Period" shall mean any period prescribed by
any governmental authority, including the United States or any
state, local, or foreign government or subdivision or agency
thereof for which a Tax Return is required to be filed or Tax is
required to be paid.
"Tax Return" shall mean any report, return, information
return, or other information required to be supplied to a taxing
authority in connection with Taxes, including any return of an
affiliated or combined or unitary group that includes a Party or
its Subsidiaries.
"TBCA" shall mean the Tennessee Business Corporation
Act.
"UPC Capital Stock" shall mean, collectively, the UPC
Common Stock, the UPC Preferred Stock and any other class or
series of capital stock of UPC.
"UPC Common Stock" shall mean the $5.00 par value
common stock of UPC.
"UPC Companies" shall mean, collectively, UPC and all
UPC Subsidiaries.
"UPC Financial Statements" shall mean (i) the
consolidated balance sheets (including related notes and
schedules, if any) of UPC as of December 31, 1997 and 1996, and
the related statements of earnings, changes in stockholders'
equity, and cash flows (including related notes and schedules, if
any) for each of the three years ended December 31, 1997, 1996
and 1995, as filed by UPC in SEC Documents and (ii) the
consolidated balance sheets of UPC (including related notes and
schedules, if any) and related statements of earnings, changes in
stockholders' equity, and cash flows (including related notes and
schedules, if any) included in SEC Documents filed with respect
to periods ended subsequent to December 31, 1997.
"UPC Preferred Stock" shall mean the no par value
preferred stock of UPC and shall include the (i) Series A
Preferred Stock and (ii) Series E 8% Cumulative, Convertible
Preferred Stock, of UPC ("UPC Series E Preferred Stock").
"UPC Rights" shall mean the preferred stock purchase
rights issued pursuant to the UPC Rights Agreement.
"UPC Rights Agreement" shall mean that certain Rights
Agreement, dated January 19, 1989, between UPC and Union Planters
Bank, National Association, as Rights Agent.
"UPC Subsidiaries" shall mean the Subsidiaries of UPC
and any corporation, bank, or other organization acquired as a
Subsidiary of UPC in the future and owned by UPC at the Effective
Time.
"UPHC" shall mean the wholly-owned subsidiary of UPC
organized under the Laws of the State of Tennessee.
"UPHC Common Stock" shall mean the $1.00 par value
common stock of UPHC.
(b) The terms set forth below shall have the meanings
ascribed thereto in the referenced sections:
Mutual Benefit Plans Section 5.13(a)
Mutual Contracts Section 5.14
Mutual ERISA Affiliate Section 5.13(e)
Mutual ERISA Plan Section 5.13(a)
Mutual Rights Section 3.5(a)
Mutual Pension Plan Section 5.13(a)
Mutual SEC Reports Section 5.5(a)
Closing Section 1.2
Effective Time Section 1.3
Exchange Agent Section 4.1
Exchange Ratio Section 3.1(c)
Indemnified Party Section 8.14
Merger Section 1.1
Takeover Laws Section 5.19
Tax Opinion Section 9.1(g)
UPC ERISA Affiliate Section 6.17
UPC SEC Reports Section 6.5(a)
(d) Any singular term in this Agreement shall be
deemed to include the plural, and any plural term the singular.
Whenever the words "include," "includes," or "including" are used
in this Agreement, they shall be deemed followed by the words
"without limitation."
11.2 EXPENSES.
(a) Except as otherwise provided in this Section 11.2,
each of the Parties shall bear and pay all direct costs and
expenses incurred by it or on its behalf in connection with the
transactions contemplated hereunder, including filing,
registration, and application fees, printing fees, and fees and
expenses of its own financial or other consultants, investment
bankers, accountants, and counsel, except that each of the
Parties shall bear and pay one-half of the printing costs
incurred in connection with the printing of the Registration
Statement and the Proxy Statement.
(b) Nothing contained in this Section 11.2 shall
constitute or shall be deemed to constitute liquidated damages
for the willful breach by a Party of the terms of this Agreement
or otherwise limit the rights of the nonbreaching Party.
11.3 BROKERS AND FINDERS. Except for ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ & Co.
Incorporated as to Mutual, each of the Parties represents and
warrants that neither it nor any of its officers, directors,
employees, or Affiliates has employed any broker or finder or
incurred any Liability for any financial advisory fees,
investment bankers' fees, brokerage fees, commissions, or
finders' fees in connection with this Agreement or the
transactions contemplated hereby. In the event of a claim by any
broker or finder based upon his, her, or its representing or
being retained by or allegedly representing or being retained by
Mutual or UPC, each of Mutual and UPC, as the case may be, agrees
to indemnify and hold the other Party harmless of and from any
Liability in respect of any such claim.
11.4 ENTIRE AGREEMENT. Except as otherwise expressly
provided herein, this Agreement (including the documents and
instruments referred to herein) constitutes the entire agreement
between the Parties with respect to the transactions contemplated
hereunder and supersedes all prior arrangements or understandings
with respect thereto, written or oral (including any provision of
the Confidentiality Agreements which would act to preclude UPC
(or any Holder as defined in the Stock Option Agreement from
exercising its rights under the Stock Option Agreement) to the
extent that the Stock Option Agreement is in force and effect,
but excluding the Supplemental Letter). Nothing in this
Agreement expressed or implied, is intended to confer upon any
Person, other than the Parties or their respective successors,
any rights, remedies, obligations, or liabilities under or by
reason of this Agreement, other than as provided in Sections 8.12
and 8.14 of this Agreement.
11.5 AMENDMENTS. To the extent permitted by Law, this
Agreement may be amended by a subsequent writing signed by each
of the Parties upon the approval of the Boards of Directors of
each of the Parties, whether before or after stockholder approval
of this Agreement has been obtained; provided, that the
provisions of this Agreement relating to the manner or basis in
which shares of Mutual Common Stock will be exchanged for UPC
Common Stock shall not be amended after the Stockholders' Meeting
without the requisite approval of the holders of the issued and
outstanding shares of UPC Common Stock and Mutual Common Stock,
as the case may be, entitled to vote thereon.
11.6 WAIVERS.
(a) Prior to or at the Effective Time, UPC, acting
through its Board of Directors, chief executive officer, chief
financial officer, or other authorized officer, shall have the
right to waive any Default in the performance of any term of this
Agreement by Mutual, to waive or extend the time for the
compliance or fulfillment by Mutual of any and all of its
obligations under this Agreement, and to waive any or all of the
conditions precedent to the obligations of UPC under this
Agreement, except any condition which, if not satisfied, would
result in the violation of any Law. No such waiver shall be
effective unless in writing signed by a duly authorized officer
of UPC.
(b) Prior to or at the Effective Time, Mutual, acting
through its Board of Directors, chief executive officer, chief
financial officer, or other authorized officer, shall have the
right to waive any Default in the performance of any term of this
Agreement by UPC, to waive or extend the time for the compliance
or fulfillment by UPC of any and all of its obligations under
this Agreement, and to waive any or all of the conditions
precedent to the obligations of Mutual under this Agreement,
except any condition which, if not satisfied, would result in the
violation of any Law. No such waiver shall be effective unless
in writing signed by a duly authorized officer of Mutual.
(c) The failure of any Party at any time or times to
require performance of any provision hereof shall in no manner
affect the right of such Party at a later time to enforce the
same or any other provision of this Agreement. No waiver of any
condition or of the breach of any term contained in this
Agreement in one or more instances shall be deemed to be or
construed as a further or continuing waiver of such condition or
breach or a waiver of any other condition or of the breach of any
other term of this Agreement.
11.7 ASSIGNMENT. Except as expressly contemplated hereby,
neither this Agreement nor any of the rights, interests, or
obligations hereunder shall be assigned by any Party hereto
(whether by operation of Law or otherwise) without the prior
written consent of the other Party. Subject to the preceding
sentence, this Agreement will be binding upon, inure to the
benefit of, and be enforceable by the Parties and their
respective successors and assigns.
11.8 NOTICES. All notices or other communications which
are required or permitted hereunder shall be in writing and
sufficient if delivered by hand, by facsimile transmission, by
registered or certified mail, postage pre-paid, or by courier or
overnight carrier, to the persons at the addresses set forth
below (or at such other address as may be provided hereunder),
and shall be deemed to have been delivered as of the date so
delivered:
Mutual: First Mutual Bancorp, Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopy Number: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇,
President and Chief
Executive Officer
Copy to Counsel: Barack ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telecopy Number: ▇▇▇-▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
UPC: UNION PLANTERS CORPORATION
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopy Number: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
President and
Chief Operating Officer
Copy to Counsel: UNION PLANTERS CORPORATION
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopy Number: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: ▇. ▇▇▇▇▇ House, Jr.
▇▇▇▇▇, TARRANT & ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telecopy Number: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
11.9 GOVERNING LAW. This Agreement shall be governed by
and construed in accordance with the Laws of the State of
Tennessee, without regard to any applicable conflicts of Laws,
except to the extent that the Laws of the State of Delaware
relate to the consummation of the Merger.
11.10 COUNTERPARTS. This Agreement may be executed in two
or more counterparts, each of which shall be deemed to be an
original, but all of which together shall constitute one and the
same instrument.
11.11 CAPTIONS. The captions contained in this Agreement
are for reference purposes only and are not part of this
Agreement.
11.12 INTERPRETATIONS. Neither this Agreement nor any
uncertainty or ambiguity herein shall be construed or resolved
against any Party, whether under any rule of construction or
otherwise. No Party to this Agreement shall be considered the
draftsman. The Parties acknowledge and agree that this Agreement
has been reviewed, negotiated, and accepted by all Parties and
their attorneys and shall be construed and interpreted according
to the ordinary meaning of the words used so as fairly to
accomplish the purposes and intentions of the Parties.
11.13 ENFORCEMENT OF AGREEMENT. The Parties hereto agree
that irreparable damage would occur in the event that any of the
provisions of this Agreement was not performed in accordance with
its specific terms or was otherwise breached. It is accordingly
agreed that the Parties shall be entitled to an injunction or
injunctions to prevent breaches of this Agreement and to enforce
specifically the terms and provisions hereof in any court of the
United States or any state having jurisdiction, this being in
addition to any other remedy to which they are entitled at law or
in equity.
11.14 SEVERABILITY. Any term or provision of this
Agreement which is invalid or unenforceable in any jurisdiction
shall, as to that jurisdiction, be ineffective to the extent of
such invalidity or unenforceability without rendering invalid or
unenforceable the remaining terms and provisions of this
Agreement or affecting the validity or enforceability of any of
the terms or provisions of this Agreement in any other
jurisdiction. If any provision of this Agreement is so broad as
to be unenforceable, the provision shall be interpreted to be
only so broad as is enforceable.
IN WITNESS WHEREOF, each of the Parties has caused this
Agreement to be executed on its behalf and its corporate seal to
be hereunto affixed and attested by officers thereunto as of the
day and year first above written.
ATTEST: FIRST MUTUAL BANCORP, INC.
By: -------------------- By: ----------------------
G. ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Secretary President and Chief Executive
Officer
ATTEST: UNION PLANTERS CORPORATION
By: -------------------- By: ----------------------
▇. ▇▇▇▇▇ House, Jr. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Secretary President
[CORPORATE SEAL]