EXHIBIT 2.1
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AGREEMENT AND PLAN OF MERGER
dated as of August 29, 2002
among
ADMIRALTY BANCORP, INC.
RBC CENTURA BANKS, INC.
and
ROYAL BANK OF CANADA
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TABLE OF CONTENTS
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ARTICLE I
CERTAIN DEFINITIONS; INTERPRETATION
1.01 CERTAIN DEFINITIONS........................................................................2
1.02 INTERPRETATION.............................................................................9
ARTICLE II
THE MERGER
2.01 THE MERGER.................................................................................9
2.02 EFFECTIVE TIME............................................................................10
2.03 CLOSING...................................................................................10
2.04 RESERVATION OF RIGHT TO REVISE STRUCTURE..................................................10
ARTICLE III
CONSIDERATION
3.01 EFFECT ON CAPITAL STOCK...................................................................11
3.02 RIGHTS AS STOCKHOLDERS; STOCK TRANSFERS...................................................11
3.03 PAYMENT FOR SHARES........................................................................11
3.04 DISSENTING STOCKHOLDERS...................................................................12
3.05 COMPANY STOCK OPTIONS.....................................................................12
ARTICLE IV
ACTIONS PENDING THE MERGER
4.01 FORBEARANCES OF THE COMPANY...............................................................13
4.02 FORBEARANCES OF THE ACQUIROR..............................................................17
4.03 COOPERATION; COMMUNICATION................................................................17
ARTICLE V
REPRESENTATIONS AND WARRANTIES
5.01 DISCLOSURE SCHEDULE.......................................................................17
5.02 STANDARD..................................................................................17
5.03 REPRESENTATIONS AND WARRANTIES OF THE COMPANY.............................................18
5.04 REPRESENTATIONS AND WARRANTIES OF THE ACQUIROR............................................32
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ARTICLE VI
COVENANTS
6.01 REASONABLE BEST EFFORTS...................................................................34
6.02 STOCKHOLDER APPROVALS.....................................................................34
6.03 PROXY STATEMENT...........................................................................34
6.04 PRESS RELEASES............................................................................35
6.05 ACCESS; INFORMATION.......................................................................35
6.06 ACQUISITION PROPOSALS.....................................................................36
6.07 TAKEOVER LAWS.............................................................................38
6.08 NO RIGHTS TRIGGERED.......................................................................38
6.09 REGULATORY APPLICATIONS...................................................................38
6.10 INDEMNIFICATION...........................................................................39
6.11 NOTIFICATION OF CERTAIN MATTERS...........................................................41
6.12 EMPLOYEE BENEFITS.........................................................................41
6.13 CERTAIN ADJUSTMENTS.......................................................................42
6.14 CERTAIN CONTRACTS.........................................................................43
6.15 REGULATORY COMPLIANCE.....................................................................43
6.16 FORMATION OF ACQUIROR SUB.................................................................43
6.17 IBB LINE OF CREDIT........................................................................43
6.18 LEASES....................................................................................43
6.19 ADMIRALTY INSURANCE SERVICES, L.L.C.......................................................43
ARTICLE VII
CONDITIONS TO CONSUMMATION OF THE MERGER
7.01 CONDITIONS TO EACH PARTY'S OBLIGATION TO EFFECT THE MERGER................................44
7.02 CONDITIONS TO OBLIGATION OF THE COMPANY...................................................45
7.03 CONDITIONS TO OBLIGATION OF THE ACQUIROR..................................................45
ARTICLE VIII
TERMINATION
8.01 TERMINATION...............................................................................46
8.02 EFFECT OF TERMINATION AND ABANDONMENT.....................................................47
8.03 TERMINATION FEE...........................................................................47
ARTICLE IX
MISCELLANEOUS
9.01 SURVIVAL..................................................................................50
9.02 WAIVER; AMENDMENT.........................................................................50
9.03 COUNTERPARTS..............................................................................51
9.04 GOVERNING LAW.............................................................................51
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9.05 EXPENSES..................................................................................51
9.06 NOTICES...................................................................................51
9.07 ENTIRE UNDERSTANDING; NO THIRD-PARTY BENEFICIARIES........................................52
9.08 ASSIGNMENT................................................................................53
EXHIBIT A List of Persons to Execute Voting Agreements
EXHIBIT B Form of Voting Agreement
EXHIBIT C Form of Employment Agreement
ANNEX A List of Designated Employees to Execute Employment Agreements
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AGREEMENT AND PLAN OF MERGER, dated as of August 29, 2002, by and among
Admiralty Bancorp, Inc. (the "COMPANY"), RBC Centura Banks, Inc. ("RBC CENTURA")
and Royal Bank of Canada (the "ACQUIROR").
RECITALS
A. THE COMPANY. The Company is a Delaware corporation, having its
principal place of business in Palm Beach Gardens, Florida.
B. THE ACQUIROR AND RBC CENTURA. The Acquiror is a Canadian chartered
bank, having its principal places of business in Toronto, Ontario and Montreal,
Quebec. RBC Centura is a North Carolina corporation, having its principal place
of business in Rocky Mount, North Carolina and is a wholly owned subsidiary of
the Acquiror.
C. ACQUIROR SUB. Acquiror Sub ("ACQUIROR SUB") will be a Delaware
corporation and a direct or indirect wholly owned subsidiary of Acquiror that
will have been organized as of the Closing Date for the purpose of effecting the
Merger in accordance with this Agreement.
D. THE MERGER. On the terms and subject to the conditions contained in
this Agreement, the parties to this Agreement intend to effect the merger of
Acquiror Sub with and into the Company, with the Company as the surviving
corporation.
E. VOTING AGREEMENTS. The stockholders of the Company identified on
EXHIBIT A have agreed to execute a Voting and Support Agreement (the "VOTING
AGREEMENT") in substantially the form of EXHIBIT B.
F. BOARD ACTION. The respective Boards of Directors of each of the
Company, RBC Centura and the Acquiror have adopted resolutions approving this
Agreement and the transactions contemplated by this Agreement and, in the case
of the Company Board, declaring the advisability of this Agreement in accordance
with the Delaware General Corporation Law (the "DGCL").
G. EMPLOYMENT AGREEMENTS. As further conditions and inducements to the
willingness of the Acquiror and RBC Centura to enter into this Agreement,
concurrently with the execution and delivery of this Agreement, each of the
Designated Employees (as defined herein) has executed and delivered an
employment agreement with the Company (each, an "EMPLOYMENT AGREEMENT").
NOW, THEREFORE, in consideration of the premises, and of the mutual
covenants, representations, warranties and agreements contained herein, the
parties agree as follows:
ARTICLE I
CERTAIN DEFINITIONS; INTERPRETATION
1.01 CERTAIN DEFINITIONS. The following terms are used in this
Agreement with the meanings assigned below:
"ACQUIROR" has the meaning assigned in the preamble to this
Agreement.
"ACQUIROR SUB" has the meaning assigned in RECITAL C.
"ACQUIROR SUBSIDIARY" has the meaning assigned in Section
8.03(c)(i).
"ACQUISITION PROPOSAL" has the meaning assigned in Section
6.06.
"ACQUISITION TRANSACTION" shall mean (x) a merger or
consolidation, or any similar transaction, involving the Company or any of its
Significant Subsidiaries, PROVIDED, HOWEVER, that in no event shall any merger,
consolidation or similar transaction involving only the Company and one or more
of its Significant Subsidiaries or involving only any two or more of such
Subsidiaries, if such transaction is not in violation of the terms of this
Agreement, be deemed to be an Acquisition Transaction, (y) a purchase, lease or
other acquisition of all or any substantial part of the assets or business
operations of the Company or any of its Significant Subsidiaries, or (z) a
purchase or other acquisition (including by way of merger, consolidation, share
exchange or otherwise) of securities representing 20% or more of the voting
power of the Company or any of its Significant Subsidiaries.
"AGREEMENT" means this Agreement, as amended or modified from
time to time in accordance with Section 9.02.
"AWARD HOLDER" has the meaning assigned in Section 3.05.
"BANK" means Admiralty Bank, a Florida state chartered
commercial bank.
"BENEFICIAL OWNERSHIP" has the meaning assigned in Section
8.03(c)(ii).
"BYLAWS" has the meaning assigned in Section 2.01(c).
"CERTIFICATE OF INCORPORATION" has the meaning assigned in
Section 2.01(b).
"CIC BENEFITS CONTINUATION" has the meaning assigned in
Section 6.12(f).
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"CIC PAYMENTS" mean payments that are required to be made as a
result of the Merger in accordance with the terms of the Specified Compensation
Plans.
"CLAIM" has the meaning assigned in Section 6.10(a).
"CLOSING DATE" has the meaning assigned in Section 2.02.
"CODE" means the Internal Revenue Code of 1986.
"COMPANY" has the meaning assigned in the preamble to this
Agreement.
"COMPANY BOARD" means the Board of Directors of the Company.
"COMPANY COMMON STOCK" means the common stock, no par value,
of the Company.
"COMPANY IP RIGHTS" has the meaning assigned in Section
5.03(w).
"COMPANY MEETING" has the meaning assigned in Section 6.02.
"COMPANY PREFERRED STOCK" means the preferred stock, no par
value, of the Company.
"COMPANY REPORTS" has the meaning assigned in Section 5.03(j).
"COMPANY REQUISITE VOTE" has the meaning assigned in Section
5.03(e).
"COMPANY STOCK" means, collectively, the Company Common Stock
and the Company Preferred Stock.
"COMPANY STOCK OPTION" means each option to purchase shares of
Company Common Stock outstanding under the Company Stock Plans.
"COMPANY STOCK PLANS" has the meaning assigned in Section
5.03(b).
"COMPANY STOCK RESOLUTION" has the meaning assigned in Section
3.05.
"COMPANY'S SEC DOCUMENTS" has the meaning assigned in Section
5.03(g).
"COMPENSATION PLANS" has, with respect to any person, the
meaning assigned in Section 5.03(n).
"CONFIDENTIALITY AGREEMENT" means the Mutual Confidentiality
Agreement between the Company and the Acquiror, dated July 3, 2002.
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"CONSIDERATION" has the meaning assigned in Section 3.01(a).
"CONSIDERATION PER SHARE" has the meaning assigned in Section
3.05.
"CONSTITUTIVE DOCUMENTS" means with respect to any juridical
person, such person's articles or certificate of incorporation and its bylaws,
or similar constitutive documents.
"CONTRACT" means, with respect to any person, any agreement,
indenture, undertaking, debt instrument, contract, lease, understanding or other
commitment, whether oral or in writing, to which such person or any of its
Subsidiaries is a party or by which any of them is bound or to which any of
their properties is subject.
"CORBEL DETERMINATION LETTER" has the meaning assigned in
Section 5.03(y).
"COSTS" has the meaning assigned in Section 6.10(a).
"CRA" means the Community Reinvestment Act of 1977.
"DESIGNATED EMPLOYEES" means, collectively, the individuals
identified in ANNEX A.
"DGCL" has the meaning assigned in RECITAL F.
"DISCLOSURE SCHEDULE" has the meaning assigned in Section
5.01.
"DISSENTERS' SHARES" means shares of Company Common Stock the
holders of which shall have perfected and not withdrawn or lost their appraisal
rights in accordance with Section 262 of the DGCL.
"EFFECTIVE TIME" means the date and time at which the Merger
becomes effective.
"EMPLOYMENT AGREEMENT" has the meaning assigned in RECITAL G.
"ENVIRONMENTAL LAWS" means any federal, state or local law,
regulation, order, decree, permit, authorization, common law or agency
requirement relating to: (1) the protection or restoration of the environment,
health or safety (in each case as relating to the environment) or natural
resources; or (2) the handling, use, presence, disposal, release or threatened
release of any Hazardous Substance.
"ERISA" means the Employee Retirement Income Security Act of
1974.
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"ERISA AFFILIATE" has, with respect to any person, the meaning
assigned in Section 5.03(n).
"ERISA AFFILIATE PLAN" has the meaning assigned in Section
5.03(n).
"EXCHANGE ACT" means the Securities Exchange Act of 1934.
"FDBF" means the Florida Department of Banking and Finance.
"FEE PAYMENT EVENT" has the meaning assigned in Section
8.03(d).
"FEE TERMINATION EVENT" has the meaning assigned in Section
8.03(b).
"GOVERNMENTAL AUTHORITY" means any court, administrative
agency or commission or other federal, state or local governmental authority or
instrumentality.
"HAZARDOUS SUBSTANCE" means any substance in any concentration
that is: (1) listed, classified or regulated pursuant to any Environmental Law;
(2) any petroleum or coal product or by-product, asbestos-containing material,
lead-containing paint or plumbing, polychlorinated biphenyls, radioactive
materials or radon; or (3) any other substance that may be the subject of
regulatory action by any Governmental Authority or a source of liability
pursuant to any Environmental Law.
"HSR ACT" means the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements
Act of 1976.
"INDEMNIFIED PARTY" has the meaning assigned in Section
6.10(a).
"INSURANCE AMOUNT" has the meaning assigned in Section
6.10(b).
"INSURANCE POLICIES" has the meaning assigned in Section
5.03(u).
"INTELLECTUAL PROPERTY RIGHTS" shall mean all worldwide
industrial and intellectual property rights, including patents, patent
applications, patent rights, trademarks, trademark applications, trade names,
service marks, service ▇▇▇▇ applications, copyright, copyright applications,
franchises, licenses, inventories, know-how, trade secrets, customer lists,
proprietary processes and formulae, all source and object code, algorithms,
architecture, structure, display screens, layouts, inventions, development
tools, software, databases and all documentation and media constituting,
describing or relating to the above, including manuals, memoranda and records.
"IRS" means the United States Internal Revenue Service.
"LIENS" means any charge, mortgage, pledge, security interest,
restriction, claim, lien, or encumbrance of any nature whatsoever.
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"LISTED TERMINATION" has the meaning assigned in Section
8.03(b).
"LOANS" means loans, leases, extensions of credit (including
guaranties), commitments to extend credit and other similar assets.
"MATERIAL ADVERSE EFFECT" means, with respect to the Acquiror
or the Company, any effect that (1) is materially adverse to the financial
position, results of operations, shareholder's equity or business of the
Acquiror and its Subsidiaries taken as a whole, or the Company and its
Subsidiaries taken as a whole, respectively, other than (A) payments of expenses
associated with the Merger as contemplated by this Agreement, (B) changes in
generally accepted accounting principles applicable to bank holding companies
generally in Canada or the United States, respectively, (C) any changes
resulting primarily from changes in banking laws or regulations (or
interpretations thereof) of general applicability in Canada or the United
States, respectively and (D) any change or effect arising out of general
economic conditions or conditions generally affecting the banking industry that
do not have a materially more adverse effect on such party than that experienced
by similarly situated financial services companies; or (2) would materially
impair the ability of either the Acquiror or the Company to perform its
obligations under this Agreement or otherwise materially threaten or materially
impede the consummation of the Merger and the other transactions contemplated by
this Agreement.
"MATERIAL INTEREST" has the meaning assigned in the definition
of Related Person.
"MERGER" has the meaning assigned in Section 2.01(a).
"MULTIEMPLOYER PLAN" means, with respect to any person, a
multiemployer plan within the meaning of Section 3(37) of ERISA.
"NCCOB" means the North Carolina Commissioner of Banks.
"OPERATING AGREEMENT" has the meaning assigned in Section
6.19.
"PAYING AGENT" has the meaning assigned in Section 3.03.
"PBGC" means the Pension Benefit Guaranty Corporation.
"PENSION PLAN" has, with respect to any person, the meaning
assigned in Section 5.03(n).
"PERMITTED TERMINATION DATE" has the meaning assigned in
Section 8.01(c).
"PERSON" means any individual, bank, savings bank,
corporation, partnership, limited liability company, association, joint-stock
company, business trust or unincorporated organization.
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"PREVIOUSLY DISCLOSED" means, with respect to the Company or
the Acquiror, information set forth in such party's Disclosure Schedule in a
paragraph or section identified therein as corresponding to the provision of
this Agreement in respect of which such information has been so set forth or has
otherwise been set forth therein in a manner reasonably indicating to a reader
the provisions to which such information may be relevant.
"PROXY STATEMENT" has the meaning assigned in Section 6.03(a).
"RBC CENTURA" has the meaning assigned in the preamble to this
Agreement.
"RELATED PERSON" means any person (or family member of such
person) (1) that directly or indirectly, controls, or is under common control
with, the Company or any of its affiliates, (2) that serves as a director,
officer, employee, partner, member, executor, or trustee of the Company or any
of its affiliates or Subsidiaries (or in any other similar capacity), (3) that
has, or is a member of a group having, direct or indirect beneficial ownership
(as defined for purposes of Rule 13d-3 under the Exchange Act) of voting
securities or other voting interests representing at least 5 percent of the
outstanding voting power or equity securities or other equity interests
representing at least 5 percent of the outstanding equity interests (a "MATERIAL
Interest") in the Company or any of its affiliates or (4) in which any person
(or family member of such person) that falls under (1), (2) or (3) above
directly or indirectly holds a Material Interest or serves as a director,
officer, employee, partner, member, executor, or trustee (or in any other
similar capacity).
"REPRESENTATIVES" means, with respect to any person, such
person's directors, officers, employees, legal or investment or financial
advisors or any representatives of such legal or financial advisors.
"REQUIRED PARTY" has the meaning assigned in Section 6.05(b).
"RIGHTS" means, with respect to any person, securities or
obligations convertible into or exercisable or exchangeable for, or giving any
person any right to subscribe for or acquire, or any options, calls or
commitments relating to, or any stock appreciation right or other instrument the
value of which is determined in whole or in part by reference to the market
price or value of, shares of capital stock of such person.
"RISK MANAGEMENT CONTRACT" has the meaning assigned in Section
5.03(r).
"SEC" means the Securities and Exchange Commission.
"SECURITIES ACT" means the Securities Act of 1933.
"SIGNIFICANT STOCKHOLDER" means a record holder who
beneficially owns at least 52,884 shares of Company Common Stock.
"SIGNIFICANT SUBSIDIARY" has the meaning assigned to that term
in Rule 1-02 of Regulation S-X of the SEC.
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"SPECIFIED COMPENSATION PLANS" means the following plans and
agreements of the Company: the Amended Senior Management 1998 Change in Control
Program, the Change in Control Program for the Chairman of the Board, the
Directors' 2002 Change in Control Bonus Program, the Senior Management 2002
Change in Control Bonus Program and the Employment Agreement of ▇▇▇▇ ▇▇▇▇▇▇▇,
dated June 23, 1998.
"SUBSIDIARY" includes either a "subsidiary" as defined in Rule
1-02 of Regulation S-X of the SEC or a "subsidiary" as defined in Section
225.2(o) of Title Twelve of the Code of Federal Regulations.
"SUPERIOR PROPOSAL" has the meaning assigned in Section 6.06.
"SURVIVING CORPORATION" has the meaning assigned in Section
2.01(a).
"TAKEOVER LAWS" has the meaning assigned in Section 5.03(e).
"TAXES" means all taxes, charges, fees, levies or other
assessments, however denominated, including all net income, gross income, gross
receipts, sales, use, ad valorem, goods and services, capital, transfer,
franchise, profits, license, withholding, payroll, employment, employer health,
excise, estimated, severance, stamp, occupation, property or other taxes, custom
duties, fees, or charges of any kind whatsoever, together with any interest and
any penalties or additions to tax with respect thereto and with respect to any
information reporting requirements imposed by the Code or any similar provision
of foreign, state or local law and any interest in respect of such additions or
penalties imposed by any taxing authority whether arising before, on or after
the Closing Date.
"TAX RETURNS" means all reports and returns required to be
filed on or before the Closing Date with respect to the Taxes of the Company or
any of its Subsidiaries, including consolidated federal income tax returns and
any documentation required to be filed with any taxing authority or to be
retained by the Company or any of its Subsidiaries in respect of information
reporting requirements imposed by the Code or any similar foreign, state or
local law.
"TERMINATION FEE" has the meaning assigned in Section 8.03(a).
"TOLLING EVENT" has the meaning assigned in Section 8.03(c).
"TREASURY SHARES" means shares of Company Common Stock owned,
directly or indirectly, by the Company or any of its Subsidiaries.
"VOTING AGREEMENT" has the meaning assigned in RECITAL E.
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1.02 INTERPRETATION. When a reference is made in this Agreement to
Recitals, Sections, Exhibits, Annexes or Schedules, such reference shall be to a
Recital in, Section of, or Exhibit, Annex or Schedule to, this Agreement unless
otherwise indicated. The table of contents and headings contained in this
Agreement are for reference purposes only and are not part of this Agreement.
Whenever the words "INCLUDE," "INCLUDES" or "INCLUDING" are used in this
Agreement, they shall be deemed to be followed by the words "WITHOUT
LIMITATION." References herein to "TRANSACTION CONTEMPLATED BY THIS Agreement"
include the Merger as well as the other transactions contemplated hereby and the
transactions contemplated by the Voting Agreement. No rule of construction
against the draftsperson shall be applied in connection with the interpretation
or enforcement of this Agreement. Whenever this Agreement shall require a party
to take an action, such requirement shall be deemed to constitute an undertaking
by such party to take, to cause its Subsidiaries to take, and to use its
reasonable best efforts to cause its other affiliates to take, appropriate
action in connection therewith. References to "KNOWLEDGE" of a person means
knowledge after reasonable diligence in the circumstances. All references to
"DOLLARS" or "$" mean the lawful currency of the United States, and all
references to "CANADIAN DOLLARS" or "C$" mean the lawful currency of Canada,
unless otherwise indicated. Any reference in this Agreement to any law, rule or
regulation shall be deemed to include a reference to any amendments, revisions
or successor provisions to such law, rule or regulation.
ARTICLE II
THE MERGER
2.01 THE MERGER. At the Effective Time, on the terms and subject to the
conditions set forth in this Agreement, the following shall occur:
(a) STRUCTURE AND EFFECTS OF THE MERGER. Acquiror Sub shall merge with
and into the Company, and the separate corporate existence of Acquiror Sub shall
thereupon cease (the "MERGER"). The Company shall be the surviving corporation
in the Merger (sometimes hereinafter referred to as the "SURVIVING CORPORATION")
and shall continue to be governed by the laws of the State of Delaware, and the
separate corporate existence of the Company with all its rights, privileges,
immunities, powers and franchises shall continue unaffected by the Merger. The
Merger shall have the effects specified in the DGCL.
(b) CERTIFICATE OF INCORPORATION. At the Effective Time, and without
any further action on the part of the Acquiror, RBC Centura, Acquiror Sub or any
holder of any shares of capital stock of the Company as in effect at the
Effective Time, the certificate of incorporation of the Company shall be amended
to read in its entirety as the certificate of incorporation of Acquiror Sub as
in effect immediately prior to the Effective Time (the "CERTIFICATE OF
INCORPORATION"), until duly amended in accordance with the terms thereof and the
DGCL.
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(c) BYLAWS. The bylaws of the Surviving Corporation (the "BYLAWS") will
be the bylaws of the Acquiror Sub as in effect immediately prior to the
Effective Time, until duly amended in accordance with the terms thereof and the
Certificate of Incorporation.
(d) DIRECTORS. The directors of the Surviving Corporation will be the
directors of Acquiror Sub immediately prior to the Effective Time, and such
directors, together with any additional directors as may thereafter be elected,
shall hold such office until such time as their successors shall be duly elected
or appointed and qualified or until their earlier death, resignation or removal
in accordance with the Certificate of Incorporation and the Bylaws.
(e) OFFICERS. The officers of the Surviving Corporation will be the
officers of Acquiror Sub immediately prior to the Effective Time, and such
officers, together with any additional officers as may thereafter be elected,
shall hold such office until such time as their successors shall be duly elected
or appointed and qualified or until their earlier death, resignation or removal
in accordance with the Certificate of Incorporation and the Bylaws.
2.02 EFFECTIVE TIME. The Merger shall become effective upon the filing,
in the office of the Secretary of State of the State of Delaware, of a
certificate of merger in accordance with Section 251 of the DGCL, or at such
later date and time as may be set forth in such certificate. Subject to the
terms of this Agreement, the parties shall cause the Merger to become effective
(1) on a day within ten business days after the last of the conditions set forth
in Article VII (other than conditions relating solely to the delivery of
documents dated the Closing Date) shall have been satisfied or waived in
accordance with the terms of this Agreement (or, at the election of the
Acquiror, on the last business day of the month in which such day occurs) or (2)
on such date as the parties may agree in writing (the "CLOSING DATE").
2.03 CLOSING. The closing of the Merger shall take place at 10:00 a.m.,
New York City time, on the Closing Date at the offices of ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇,
125 Broad Street, New York, New York, or at such other time and place as the
parties shall agree.
2.04 RESERVATION OF RIGHT TO REVISE STRUCTURE. At the Acquiror's
election, the Merger may alternatively be structured so that a directly or
indirectly wholly owned transitory subsidiary of the Acquiror other than
Acquiror Sub is merged with and into the Company; PROVIDED, HOWEVER, that no
such change shall (a) alter or change the amount or kind of the Consideration or
alter or change adversely the treatment of the holders of Company Stock or
Company Stock Options, (b) alter or change the Acquiror's or the Company's
obligations hereunder, including with respect to the Company's obligations to
make CIC Payments (unless the employee, officer or director entitled to such CIC
Payments consents) or (c) impede or delay consummation of the transactions
contemplated by this Agreement. In the event the Acquiror makes such an
election, the parties agree to execute an appropriate amendment to this
Agreement in order to reflect such election.
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ARTICLE III
CONSIDERATION
3.01 EFFECT ON CAPITAL STOCK. At the Effective Time, by virtue of the
Merger and without any action on the part of the holder of any shares of Company
Common Stock:
(a) CONVERSION OF COMPANY COMMON STOCK. Each share of Company Common
Stock outstanding immediately prior to the Effective Time (other than Treasury
Shares and Dissenters' Shares) shall be converted into the right to receive
consideration (the "CONSIDERATION") comprising $26.00 in cash, without interest
thereon. At the Effective Time, the shares of Company Common Stock shall no
longer be outstanding and shall automatically be cancelled and cease to exist,
and from and after the Effective Time, certificates representing Company Common
Stock immediately prior to the Effective Time shall be deemed for all purposes
to represent the Consideration pursuant to this Section 3.01(a).
(b) ACQUIROR SUB COMMON STOCK. Each share of Acquiror Sub common stock
issued and outstanding immediately prior to the Effective Time shall be
converted into one share of common stock, par value $1.00 per share, of the
Surviving Corporation.
(c) TREASURY AND DISSENTERS' SHARES. Each share of Company Common Stock
held as Treasury Shares or Dissenters' Shares immediately prior to the Effective
Time shall be canceled and retired at the Effective Time and, except as set
forth in Section 3.04 with respect to Dissenters' Shares, no consideration shall
be issued in exchange therefor.
3.02 RIGHTS AS STOCKHOLDERS; STOCK TRANSFERS. At the Effective Time,
holders of Company Common Stock (other than Dissenters' Shares, if applicable)
shall cease to be, and shall have no rights as, stockholders of the Company,
other than to receive any dividend or other distribution with respect to such
Company Common Stock with a record date occurring prior to the Effective Time
and the right to receive Consideration provided under this Article III. After
the Effective Time, there shall be no transfers on the stock transfer books of
the Surviving Corporation of shares of Company Common Stock (other than
Dissenters' Shares, if applicable).
3.03 PAYMENT FOR SHARES. At or prior to the Effective Time, RBC Centura
shall make available or cause to be made available to such bank as the Acquiror
shall appoint (and shall be reasonably acceptable to the Company), as paying
agent (the "PAYING AGENT"), amounts in immediately available funds sufficient in
the aggregate to provide all funds necessary for the Paying Agent to make
payments of Consideration to holders of shares of Company Common Stock that were
outstanding immediately prior to the Effective Time. Promptly after the
Effective Time, the Surviving Corporation shall cause the Paying Agent to mail
to each person who was, at the Effective Time, a holder of record of outstanding
shares of Company Common Stock a form (mutually agreed to by the Acquiror and
the Company) of letter of transmittal and instructions for use in effecting the
surrender of the certificates which, immediately prior to the Effective Time,
represented any of such shares in exchange for payment therefor. Upon surrender
to the Paying Agent of such certificates, together with such letter of
transmittal, duly executed and completed in accordance with the instructions
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thereto, the Surviving Corporation shall promptly cause the Paying Agent to pay
to each person entitled thereto a check in the amount of the Consideration to
which such person is entitled, after giving effect to any required tax
withholdings. The Paying Agent shall pay the consideration to which a
Significant Stockholder is entitled by wire transfer, at such Significant
Stockholder's request provided that such Significant Stockholder provides the
Paying Agent sufficient notice of its account information. No interest will be
paid or will accrue on any amount payable upon the surrender of any such
certificate. If payment is to be made to a person other than the registered
holder of the certificate surrendered, it shall be a condition of such payment
that the certificate so surrendered be properly endorsed or otherwise in proper
form for transfer and that the person requesting such payment pay any transfer
or other taxes required by reason of the payment to a person other than the
registered holder of the certificate surrendered or establish to the
satisfaction of the Surviving Corporation or the Paying Agent that such tax has
been paid or is not applicable. One hundred and eighty days following the
Effective Time, the Surviving Corporation shall be entitled to cause the Paying
Agent to deliver to it any funds (including any interest or other amounts
received with respect thereto) made available to the Paying Agent that have not
been disbursed to holders of certificates formerly representing shares of
Company Common Stock outstanding on the Effective Time, and thereafter such
holders shall be entitled to look to the Surviving Corporation only as general
creditors thereof with respect to the cash payable upon due surrender of their
certificates. Notwithstanding the foregoing, neither the Paying Agent nor any
party hereto shall be liable to any holder of certificates formerly representing
shares of Company Common Stock for any amount paid to a public official pursuant
to any applicable abandoned property, escheat or similar laws.
3.04 DISSENTING STOCKHOLDERS. Dissenters' Shares shall be purchased and
paid for in accordance with Sections 262 of the DGCL. The Company shall give the
Acquiror (a) prompt notice of any written demands for fair value received by the
Company, withdrawals of such demands and any other related instruments served
pursuant to the DGCL and received by the Company and (b) the opportunity to
direct all negotiations and proceedings with respect to demands for fair value
under the DGCL. The Company shall not, except with prior written consent of the
Acquiror, voluntarily make any payment with respect to any demands for fair
value for Dissenters' Shares or offer to settle, or settle, any such demands.
3.05 COMPANY STOCK OPTIONS. At the Effective Time, each vested Company
Stock Option then outstanding, exercisable or unexercisable, without any action
on the part of the holder, shall be converted into the right to receive payment
of an amount in cash equal to the product of (1) the excess of the Consideration
Per Share over the exercise price per share, if any, subject to such Company
Stock Option and (2) the number of shares of Company Stock subject to such
Company Stock Option immediately prior to the Effective Time; PROVIDED that the
Company shall be entitled to withhold from such cash payment any amounts
required to be withheld by applicable law. Each vested Company Stock Option to
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which this paragraph applies will be cancelled and shall cease to exist by
virtue of such payment. For the purposes of this Section 3.05, "CONSIDERATION
PER SHARE" means $26.00 cash. Prior to the Effective Time the Company shall take
all necessary actions, including obtaining (1) consents of each award holder
including employees of the Company and of its Subsidiaries and each of the
directors on the Company Board and each of the directors on the board of
directors of the Bank (each, an "AWARD HOLDER"), in each case, in their
individual capacities and (2) resolutions of the Company Board, of the board of
directors of the Bank or of a committee established under a Company Stock Plan
(collectively, the "COMPANY STOCK RESOLUTIONS"), if applicable, to effect the
foregoing.
ARTICLE IV
ACTIONS PENDING THE MERGER
4.01 FORBEARANCES OF THE COMPANY. Until the Effective Time (or, if
earlier, the termination of this Agreement), the Company agrees, except as
expressly provided in this Agreement, without the prior written consent of an
officer to be designated by the Acquiror, the Company will not, and will cause
each of its Subsidiaries not to:
(a) ORDINARY COURSE. Conduct the business of the Company and its
Subsidiaries other than in the ordinary and usual course consistent with past
practice or, to the extent consistent therewith, fail to use reasonable efforts
to preserve intact their business organizations and assets and maintain their
rights, franchises and existing relations with customers, suppliers, employees
and business associates; or take any action that would reasonably be expected to
have a Material Adverse Effect upon the Company's ability to perform its
obligations under this Agreement.
(b) NEW ACTIVITIES. Engage in any material new activities or lines of
business or make any material changes to its existing activities or lines of
business.
(c) CAPITAL STOCK. Other than pursuant to Rights Previously Disclosed
and outstanding on the date hereof, (1) Issue, sell or otherwise permit to
become outstanding, or authorize the creation of, any additional shares of
Company Stock or any Rights, (2) permit any additional shares of Company Stock
to become subject to new grants of employee or director stock options, or
stock-based employee rights or arrangements, (3) repurchase, redeem or otherwise
acquire, directly or indirectly, any shares of Company Stock, (4) effect any
recapitalization, reclassification, stock split or like change in capitalization
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or (5) enter into, or take any action to cause any holders of Company Stock to
enter into, any agreement, understanding or commitment relating to the right of
holders of Company Stock to vote any shares of Company Stock, or cooperate in
any formation of any voting trust or similar arrangement relating to such
shares.
(d) SUBSIDIARIES. Issue, sell or otherwise permit to become
outstanding, transfer, mortgage, encumber or otherwise dispose of or permit the
creation of any Lien in respect of, or amend or modify the terms of, any equity
interests held in a Subsidiary of the Company.
(e) DIVIDENDS, ETC. Make, declare, pay or set aside for payment any
dividend, other than dividends from wholly owned Subsidiaries to the Company or
to another wholly owned Subsidiary of the Company on or in respect of, or
declare or make any distribution on any shares of its capital stock or split,
combine, redeem, reclassify, purchase or otherwise acquire, any shares of its
capital stock.
(f) COMPENSATION; EMPLOYMENT CONTRACTS; ETC. Enter into, amend, modify,
renew or terminate any employment, consulting, severance, change in control or
similar Contracts with any directors, officers, employees of, or independent
contractors with respect to, the Company or its Subsidiaries, or grant any
salary, wage or other increase or increase any employee benefit (including
incentive or bonus payments), except (1) for changes that are required by
applicable law, (2) to satisfy Previously Disclosed Contracts existing on the
date hereof, (3) for merit-based or annual salary increases in the ordinary
course of business and in accordance with past practice (including with respect
to timing and amount) to employees other than the Designated Employees, (4)
terminate employees who are not Designated Employees on severance terms
consistent with the terms of the Company's Employee Severance Program or (5) for
employment arrangements for newly hired non-executive employees in the ordinary
and usual course of business consistent with past practice, PROVIDED that total
annual guaranteed compensation for any such newly hired non-executive employee
shall not exceed $50,000 and any such Contract shall not include any provision
providing for payments to, or the conferring of other benefits on, the person
arising from a change of control of the Company.
(g) BENEFIT PLANS. Except as Previously Disclosed, enter into,
establish, adopt, amend, modify or terminate any Compensation Plan in respect of
any current or former directors, officers, employees, former employees of, or
independent contractors with respect to, the Company or its Subsidiaries (or any
dependent or beneficiary of any of the foregoing persons), including taking any
action that accelerates the vesting or exercisability of or the payment or
distribution with respect to, stock options, restricted stock or other
compensation or benefits payable thereunder, except, in each such case, (1) as
may be required by applicable law or (2) to satisfy Previously Disclosed
Contracts existing on the date hereof.
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(h) DISPOSITIONS. Except (1) pursuant to Previously Disclosed Contracts
existing on the date hereof, or (2) for sales of Loans, debt securities or
similar investments in the ordinary and usual course of business consistent with
past practice, sell, transfer, mortgage, lease, encumber or otherwise dispose of
or permit the creation of any Lien (except for a Lien for Taxes not yet due and
payable) in respect of, or discontinue any material portion of, its assets,
deposits, business or properties.
(i) ACQUISITIONS. Except (1) pursuant to Previously Disclosed Contracts
existing on the date hereof, or (2) by way of foreclosures in satisfaction of
debts previously contracted in good faith, in each case in the ordinary and
usual course of business consistent with past practice, acquire any material
amount, taken individually or in the aggregate, of assets, business, properties
or deposits of another person in any one transaction or a series of related
transactions.
(j) CONSTITUTIVE DOCUMENTS. Amend (or suffer to be amended) the
Constitutive Documents of the Company or any of its Subsidiaries.
(k) ACCOUNTING METHODS. Implement or adopt any change in the accounting
principles, practices or methods used by the Company and its Subsidiaries, other
than as may be required by generally accepted accounting principles.
(l) CONTRACTS. Except in the ordinary course of business consistent
with past practice or pursuant to Section 6.14, (1) enter into, amend, renew or
terminate any material Contract or any agreement that provides for either (A)
aggregate payments of $25,000 or more or (B) a term exceeding 30 days or (2)
amend or modify in any material respect any of its existing material Contracts.
(m) CLAIMS. Settle any claim, action or proceeding, except for any
claim, action or proceeding involving solely money damages in an amount,
individually and in the aggregate for all such settlements, not more than
$60,000 and that would not reasonably be expected to establish an adverse
precedent or basis for subsequent settlements or require material changes in
business practices.
(n) RISK MANAGEMENT. Except as required by applicable law or
regulation: (1) implement or adopt any material change in its credit risk and
interest rate risk management and hedging policies, procedures or practices; (2)
fail to follow its existing policies or practices with respect to managing its
exposure to credit and interest rate risk; or (3) fail to use commercially
reasonable means to avoid any material increase in its aggregate exposure to
interest rate risk.
(o) INDEBTEDNESS. Other than in the ordinary course of business
(including by way of creation of deposit liabilities, entry into repurchase
agreements, purchases or sales of federal funds, Federal Home Loan Bank
advances, and sales of certificates of deposit) consistent with past practice,
(1) incur any indebtedness for borrowed money, (2) assume, guarantee, endorse or
otherwise as an accommodation become responsible for the obligations of any
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other person or (3) cancel, release, assign or modify any material amount of
indebtedness of any other person.
(p) LOANS. (1) Make any Loan other than in the ordinary course of
business consistent with lending policies as in effect on the date hereof; (2)
except pursuant to Contracts existing on the date hereof, make any Loan in
excess of $3,000,000; (3) make forward rate commitments (that is, commitments
for a period in excess of three months) with respect to the interest rate on any
Loan; or (4) make any Loan (other than a residential real estate mortgage loan)
with a term greater than five years; PROVIDED that the Company or any of its
Subsidiaries may make any such Loan in the event (A) the Company or any of its
Subsidiaries has delivered to the Acquiror or a representative to be designated
by the Acquiror a notice of its intention to make such Loan or advance and such
additional information as the Acquiror or its designated representative may
reasonably require and (B) the Acquiror or its designated representative shall
not have reasonably objected to such Loan or advance by giving notice of such
objection within three business days following the actual receipt by the
Acquiror of the applicable notice of intention; or (5) sell, transfer, mortgage,
encumber or otherwise dispose of, or permit the creation of, any Lien in respect
of mezzanine Loans made by the Company or any Subsidiary of the Company.
(q) ADVERSE ACTIONS. (1) Subject to Section 6.06, take any action that
is intended or would reasonably be expected to result in (A) any of its
representations and warranties set forth in this Agreement being or becoming
untrue in any material respect at any time at or prior to the Effective Time,
(B) any of the conditions to the Merger set forth in Article VII not being
satisfied or (C) a material breach of any provision of this Agreement; EXCEPT,
in each case, as may be required by applicable law, or (2) engage in any new
line of business or make any acquisition that would not be permissible for a
United States bank holding company (as defined in the Bank Holding Company Act
of 1956) or would subject the Acquiror, the Company or any Subsidiary of either
to material regulation by a Governmental Authority that does not presently
regulate such company or to regulation by a Governmental Authority that is
materially different from current regulation.
(r) TAXES. Make or change any election with respect to Taxes, settle
any material Tax audit or proceeding, enter into any Tax closing agreement, or
request any Tax private letter or similar ruling.
(s) RELATED PERSON TRANSACTIONS. Except pursuant to Previously
Disclosed Contracts entered into in the ordinary course of business before the
date of this Agreement, make any payment of cash or other consideration to, or
make any Loan to or on behalf of, or enter into, amend or grant a consent or
waiver under, or fail to enforce, any Contract with, any Related Person.
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(t) CAPITAL EXPENDITURES. Make any capital expenditures in excess of
$50,000 in any one case or $125,000 in the aggregate or enter into any agreement
contemplating capital expenditures in excess of $50,000 for any twelve (12)
month period.
(u) COMMITMENTS. Agree or commit to do, or enter into any Contract
regarding, anything that would be precluded by clauses (a) through (t) without
first obtaining the Acquiror's consent.
4.02 FORBEARANCES OF THE ACQUIROR. From the date hereof until the
Effective Time (or, if earlier, the termination of this Agreement), except as
expressly contemplated by this Agreement, without the prior written consent of
the Company, the Acquiror will not, and will cause each of its Subsidiaries not
to take any action that is intended or is reasonably likely to result in (a) any
of its representations and warranties set forth in this Agreement being or
becoming untrue in any material respect at any time at or prior to the Effective
Time, (b) any of the conditions to the Merger set forth in Article VII not being
satisfied on or before the date specified in Section 8.01 or (c) a material
breach of any provision of this Agreement; except, in each case, as may be
required by applicable law.
4.03 COOPERATION; COMMUNICATION. The parties agree to develop a
methodology of communication with respect to the forbearances of the Company
intended to effectuate the purposes of this Article IV while permitting the
Company to operate in the ordinary course of business consistent with the terms
of this Agreement.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
5.01 DISCLOSURE SCHEDULE. On or prior to the date hereof, the Company
has delivered to the Acquiror and the Acquiror has delivered to the Company a
schedule (respectively, its "DISCLOSURE SCHEDULE") setting forth, among other
things, items the disclosure of which is necessary or appropriate either (a) in
response to an express disclosure requirement contained in a provision hereof or
(b) as an exception to one or more representations or warranties contained in
Section 5.03 or 5.04, respectively, or to one or more of its covenants contained
in Article IV; PROVIDED that the inclusion of an item in a Disclosure Schedule
as an exception to a representation or warranty shall not be deemed an admission
by the disclosing party that such item (or any undisclosed item or information
of comparable or greater significance) represents a material exception or fact,
event or circumstance with respect to the Company or the Acquiror, respectively.
5.02 STANDARD. No representation or warranty of the Company or the
Acquiror contained in Section 5.03 or 5.04 shall be considered untrue or
incorrect, and no party hereto shall be considered to have breached a
representation or warranty, as a consequence of the existence of any fact, event
or circumstance unless such fact, event or circumstance, (a) is not Previously
-17-
Disclosed and (b) individually or taken together with all other facts, events or
circumstances that should have been Previously Disclosed with respect to any one
or more representations or warranties contained in Section 5.03 (other than
Section 5.03(h)) or 5.04, has had or is reasonably likely to have a Material
Adverse Effect with respect to the Company or the Acquiror, respectively.
5.03 REPRESENTATIONS AND WARRANTIES OF THE COMPANY. Except as
Previously Disclosed, the Company represents and warrants to the Acquiror, RBC
Centura and Acquiror Sub as set forth in its Disclosure Schedule and as follows:
(a) ORGANIZATION, STANDING AND AUTHORITY. The Company is duly
organized, validly existing and in good standing as a corporation under the laws
of Delaware and is duly qualified to do business and is in good standing in all
the jurisdictions where its ownership or leasing of property or assets or the
conduct of its business requires it to be so qualified.
(b) COMPANY STOCK. As of the date hereof, the authorized capital stock
of the Company consists solely of 8,500,000 shares of Company Common Stock, of
which not more than 5,288,437 shares are outstanding as of August 26, 2002, and
2,000,000 shares of Company Preferred Stock, no shares of which are outstanding.
The outstanding shares of Company Stock have been duly authorized and are
validly issued, fully paid and nonassessable, and subject to no preemptive
rights (and were not issued in violation of any preemptive rights). Except as
Previously Disclosed, there are no shares of Company Stock reserved for
issuance, the Company does not have any Rights issued or outstanding with
respect to Company Stock, and the Company does not have any commitment to
authorize, issue or sell any Company Stock or Rights, except pursuant to this
Agreement. The Company has Previously Disclosed a list of each Compensation Plan
under which any shares of capital stock of the Company or any Rights with
respect thereto have been or may be awarded or issued ("COMPANY STOCK PLANS").
As of August 26, 2002, the Company has outstanding Company Stock Options
representing the right to acquire no more than 760,136 shares of Company Common
Stock. The Company has Previously Disclosed the weighted average exercise price
for the Company Stock Options under each of its Company Stock Plans. Except as
described in the immediately preceding sentence, the Company has no Company
Common Stock authorized for issuance pursuant to any Company Stock Plans. The
Company does not have outstanding any bonds, debentures, notes or other
obligations the holders of which have the right to vote (or which are
convertible into or exercisable for securities having the right to vote) with
the stockholders of the Company on any matter.
(c) SUBSIDIARIES. (1)(A) The Company has Previously Disclosed a list of
all its Subsidiaries together with the jurisdiction of organization of each such
Subsidiary, (B) except as Previously Disclosed, the Company owns, directly or
indirectly, all the outstanding equity securities of each of its Subsidiaries,
(C) except as Previously Disclosed, no equity securities of any of its
Subsidiaries are or may become required to be issued (other than to the Company
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or its Subsidiaries), (D) except as Previously Disclosed, there are no Contracts
by which any of such Subsidiaries is or may be bound to sell or otherwise
transfer any equity securities of any such Subsidiaries (other than to the
Company or its Subsidiaries), (E) except as Previously Disclosed, there are no
Contracts relating to its rights to vote or to dispose of such securities (other
than to the Company or its Subsidiaries), and (F) all the equity securities of
each such Subsidiary held by the Company or its Subsidiaries are fully paid and
nonassessable and except as Previously Disclosed, are owned by the Company or
its Subsidiaries free and clear of any Liens.
(2) The Company has Previously Disclosed, as of the date
hereof, a list of all equity securities it or one of its Subsidiaries holds
involving, in the aggregate, beneficial ownership or control by the Company or
any such Subsidiary of 5% or more of any class of the issuer's voting securities
or 25% or more of any class of the issuer's securities, including a description
of any such issuer and the percentage of the issuer's voting and/or non-voting
securities and, as of the Effective Time, no additional persons would need to be
included on such a list. The Company has Previously Disclosed a list, as of the
date hereof, of all partnerships, limited liability companies, joint ventures or
similar entities, in which it owns or controls an equity, partnership or
membership interest, directly or indirectly, and the nature and amount of each
such interest, and as of the Effective Time, no additional persons would need to
be included on such a list.
(3) Each of the Company's Subsidiaries has been duly organized
and is validly existing and in good standing under the laws of the jurisdiction
of its organization, and is duly qualified to do business and in good standing
in all the jurisdictions where its ownership or leasing of property or assets or
the conduct of its business requires it to be so qualified. The Bank is the
Company's only depository institution Subsidiary, and it (A) is an "insured
depository institution" as defined in the Federal Deposit Insurance Act and the
applicable regulations thereunder and (B) has a rating of "Satisfactory" or
better under the CRA as of the date hereof.
(d) CORPORATE POWER. The Company and each of its Subsidiaries has the
requisite power and authority to carry on its business as it is now being
conducted and to own all its properties and assets; the Company has the
corporate power and authority to execute, deliver and perform its obligations
under this Agreement and to consummate the transactions contemplated hereby, and
the Company has made available to the Acquiror a brief description of each line
of business in which the Company or any of its Subsidiaries is engaged.
(e) CORPORATE AUTHORITY AND ACTION. (1) The Company has taken all
corporate action necessary in order (A) to authorize the execution and delivery
of, and performance of its obligations under, this Agreement and (B) subject
only to receipt of the approval of the plan of merger contained in this
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Agreement by the holders of a majority of the outstanding shares of Company
Common Stock (the "COMPANY REQUISITE VOTE") and to the approvals of applicable
Government Authorities, to consummate the Merger. This Agreement is a valid and
legally binding obligation of the Company, enforceable in accordance with its
terms (except as enforceability may be limited by applicable bankruptcy,
insolvency, reorganization and similar laws of general applicability relating to
or affecting creditors' rights or by general equity principles).
(2) The Company has taken all action required to be taken by
it in order to exempt this Agreement, the Voting Agreement and the transactions
contemplated hereby from, and each of this Agreement, the Voting Agreement and
the transactions contemplated hereby is exempt from, (A) the requirements of any
applicable "moratorium," "control share," "fair price," or other antitakeover
laws and regulation of any state (collectively, "TAKEOVER LAWS"), including
Section 203 of the DGCL and (B) any other applicable provision of the
Constitutive Documents of the Company or any of its Subsidiaries.
(3) The Company has received the opinion of Sandler ▇'▇▇▇▇▇ &
Partners, L.P., dated the date of this Agreement, to the effect that, as of the
date of this Agreement, the Consideration to be received in the Merger by the
stockholders of the Company is fair to the stockholders of the Company from a
financial point of view.
(f) REGULATORY FILINGS; NO DEFAULTS. (1) No consents or approvals of,
or filings or registrations with, any Governmental Authority or with any third
party are required to be made or obtained by the Company or any of its
Subsidiaries in connection with the execution, delivery or performance by the
Company of this Agreement, or to consummate the Merger or the other transactions
contemplated hereby, except for (A) the filing with the SEC of the Proxy
Statement in definitive form, (B) the filing and approval of applications and
notices, as applicable, with the Board of Governors of the Federal Reserve
System, the NCCOB and the FDBF, and expiration of any related waiting periods,
with respect to the Merger, (C) the filing of a notification, if required, and
expiration of the related waiting period under the HSR Act, (D) the filing of a
certificate of merger with the Secretary of State of the State of Delaware
pursuant to the DGCL, and (E) the filings of applications and notices, as
applicable, required to be made pursuant to the Bank Act (Canada). As of the
date hereof, the Company is not aware of any reason why the approvals of all
Governmental Authorities necessary to permit consummation of the transactions
contemplated by this Agreement will not be received without the imposition of a
condition or requirement described in Section 7.01(b).
(2) Subject to receipt of the regulatory approvals, and
expiration of the waiting periods, referred to in the preceding paragraph and
the making of required filings under federal and state securities laws, if any,
the execution, delivery and performance of this Agreement and the consummation
of the transactions contemplated hereby do not and will not (A) constitute a
breach or violation of, or a default under, or give rise to any Lien, any
acceleration of remedies or any right of termination under, any law, rule or
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regulation or any judgment, decree, order, governmental permit or license, or
Contract of the Company or of any of its Subsidiaries or to which the Company or
any of its Subsidiaries or properties is subject or bound, (B) constitute a
breach or violation of, or a default under, the Constitutive Documents of the
Company or any of its Subsidiaries or (C) require any consent or approval under
any such law, rule, regulation, judgment, decree, order, governmental permit or
license or Contract.
(g) SEC DOCUMENTS; FINANCIAL STATEMENTS. The Company's Annual Reports
on Form 10-KSB for the fiscal years ended December 31, 1999, 2000 and 2001, and
all other reports, registration statements, definitive proxy statements or
information statements filed or to be filed by the Company or any of its
Subsidiaries subsequent to December 31, 2001 under the Securities Act, or under
Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act, in the form filed or to
be filed (collectively, the "COMPANY'S SEC DOCUMENTS") with the SEC, as of the
date filed, (A) complied or will comply in all material respects as to form with
the applicable requirements under the Securities Act or the Exchange Act, as the
case may be, and (B) did not (or if amended or superseded by a filing prior to
the date of this Agreement, then did not as of the date of such filing) and will
not contain any untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements therein,
in the light of the circumstances under which they were made, not misleading;
and each of the balance sheets contained in or incorporated by reference into
any such SEC Document (including the related notes and schedules thereto) fairly
presents, or will fairly present, the financial position of the Company and its
Subsidiaries as of its date, and each of the statements of income and changes in
stockholders' equity and cash flows or equivalent statements in such SEC
Documents (including any related notes and schedules thereto) fairly presents,
or will fairly present, the results of operations, changes in stockholders'
equity and changes in cash flows, as the case may be, of the Company and its
Subsidiaries for the periods to which they relate, in each case in accordance
with generally accepted accounting principles consistently applied during the
periods involved, except in each case as may be noted therein, subject to normal
year-end audit adjustments in the case of unaudited statements.
(h) ABSENCE OF UNDISCLOSED LIABILITIES AND CHANGES. (1) Except as
disclosed in the Company's SEC Documents filed prior to the date hereof, none of
the Company or its Subsidiaries has any obligation or liability (whether or not
required to be reflected in financial statements prepared in accordance with
generally accepted accounting principles or otherwise), that, individually or in
the aggregate, would reasonably be expected to constitute or have a Material
Adverse Effect on the Company, and, since December 31, 2001, on a consolidated
basis the Company and its Subsidiaries have not incurred any liability other
than in the ordinary course of business consistent with past practice.
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(2) Since December 31, 2001, except for execution of this
Agreement and performance of its obligations hereunder, (A) the Company and its
Subsidiaries have conducted their respective businesses in the ordinary and
usual course consistent with past practice, and (B) no event has occurred or
circumstance arisen that, individually or taken together with all other facts,
events and circumstances (described in any paragraph of Section 5.03 or
otherwise), has had or is reasonably likely to have a Material Adverse Effect
with respect to the Company.
(i) LITIGATION. Except as Previously Disclosed, no litigation, claim or
other proceeding before any court, arbitrator or Governmental Authority is
pending against the Company or any of its Subsidiaries and, to the Company's
knowledge, no such litigation, claim or other proceeding has been threatened.
(j) COMPLIANCE WITH LAWS. (1) The Company and each of its Subsidiaries
and, to the knowledge of the Company, their respective officers and employees:
(A) conducts its business in compliance with all applicable
federal, state, local and foreign statutes, laws, regulations,
ordinances, rules, judgments, orders or decrees applicable thereto or
to the employees conducting such businesses, including applicable fair
lending laws and other laws relating to discriminatory business
practices, the USA PATRIOT Act of 2001, the International Money
Laundering Abatement and Anti-Terrorist Financing Act of 2001, and the
▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act of 2002, in each case as in effect and applicable to
such business and employees;
(B) has all permits, licenses, authorizations, orders and
approvals of, and has made all filings, applications and registrations
with, all Governmental Authorities required in order to permit them to
own or lease their properties and to conduct their businesses as
presently conducted; all such permits, licenses, certificates of
authority, orders and approvals are in full force and effect and, to
the Company's knowledge, no suspension or cancellation of any of them
is threatened or would reasonably be expected to occur, and all such
filings, applications and registrations are current;
(C) has received, since December 31, 1997, no notification or
communication from any Governmental Authority (i) asserting that the
Company or any of its Subsidiaries is not in compliance with any of the
statutes, regulations, or ordinances that such Governmental Authority
enforces, (ii) threatening to revoke any license, franchise, permit, or
governmental authorization (nor, to the Company's knowledge, do grounds
for any of the foregoing exist) or (iii) restricting or disqualifying
their activities (except for restrictions generally imposed by rule,
-22-
regulation or administrative policy on banking organizations
generally);
(D) is not aware of any pending or threatened investigation,
review or disciplinary proceedings by any Governmental Authority
against the Company, any of its Subsidiaries or any officer, director
or employee thereof;
(E) is not subject to any order or decree issued by, or a
party to any agreement or memorandum of understanding with, or a party
to any commitment letter or similar undertaking to, or subject to any
order or directive by, or a recipient of any supervisory letter from,
and has not adopted any board resolutions at the request of any
Governmental Authority and has not been advised by any Governmental
Authority that it is considering issuing or requesting any such
agreement or other action; and
(F) since December 31, 1997, has timely filed all reports,
registrations and statements, together with any amendments required to
be made with respect thereto, that were required to be filed under any
applicable law, regulation or rule, with any applicable Governmental
Authority (collectively, the "COMPANY REPORTS"). As of their respective
dates, the Company Reports complied with the applicable statutes,
rules, regulations and orders enforced or promulgated by the regulatory
authority with which they were filed.
(2) None of the Company or its Subsidiaries has engaged in any
of the practices listed in Office of the Comptroller of the Currency Advisory
Letter AL 2000-7 as "indications that an institution may be engaging in abusive
lending practices" or as practices that "may suggest the potential for fair
lending violations" or has originated, owned or serviced or currently owns or
services any Loan subject to the requirements of Section 226.32 of title 12 of
the Code of Federal Regulations as will be in effect on October 1, 2002.
(k) MATERIAL CONTRACTS; DEFAULTS. The Company has Previously Disclosed
a complete and accurate list of all material Contracts (and in the case of
material Contracts constituting Loans by the Company or any of its Subsidiaries,
the total amounts committed and outstanding under such Loans as of the date
hereof) to which the Company or any of its Subsidiaries is a party, including
the following:
(1) any Contract not constituting a Loan that (A) is not
terminable at will both without cost or other liability to the Company or any of
its Subsidiaries and upon notice of 30 days or less and (B) provides for fees or
other payments in excess of $20,000 per annum or in excess of $40,000 for the
remaining term of the Contract;
-23-
(2) any Contract with a third party to perform services for
the Company or any of its Subsidiaries on a regular or ongoing basis;
(3) any Contract that contains an "exclusivity" clause (that
is, obligates the Company or any of its Subsidiaries to conduct business with
another party on an exclusive basis or restricts the ability of the Company or
any of its Subsidiaries to conduct business with any person);
(4) any Loan by the Company or any of the Subsidiaries
pursuant to which total amounts committed or outstanding under such Loan exceed
$1,000,000;
(5) any Contract with a term beyond the Effective Time under
which the Company or any of its Subsidiaries created, incurred, assumed, or
guaranteed (or may create, incur, assume, or guarantee) indebtedness for
borrowed money (including capitalized lease obligations);
(6) any Contract to which the Company or any of its
Subsidiaries is a party, on the one hand, and under which any affiliate,
officer, director, employee or equity holder or other Related Person of the
Company or any of its Subsidiaries, on the other hand, is a party or
beneficiary;
(7) any Contract with respect to the employment of, or payment
to, any present or former directors, officers, employees or consultants;
(8) any Contract involving the purchase or sale of assets with
a book value greater than $50,000 entered into since December 31, 1999; and
(9) any Contract involving a capital expenditure in excess of
$50,000 in a twelve month period or $125,000 in the aggregate.
Neither the Company nor any of its Subsidiaries nor, to the Company's knowledge,
any other party thereto is in default under any such Contract, and there has not
occurred any event that, with the lapse of time or the giving of notice or both,
would constitute such a default. The Contracts referred to in Section 5.03(k)(6)
above are on arm's-length terms or terms more favorable to the Company and its
Subsidiaries.
(l) NON-COMPETITION/NON-SOLICITATION. Except as Previously Disclosed,
neither the Company nor any of its Subsidiaries is a party to or bound by any
non-competition or non-solicitation agreement or any other agreement or
obligation (1) that limits, purports to limit, or would limit in any respect the
manner in which, or the localities in which, any business of the Company or its
affiliates is or could be conducted or the types of business that the Company or
its affiliates conducts or may conduct, (2) that would reasonably be understood
to limit or purport to limit in any respect the manner in which, or the
localities in which, any business of the Acquiror or its affiliates is or could
-24-
be conducted or the types of business that the Acquiror or its affiliates
conducts or may conduct or (3) that limits, purports to limit or would limit in
any way the ability of the Company and its Subsidiaries to solicit prospective
employees or would so limit or purport to limit the ability of the Acquiror or
its affiliates to do so.
(m) PROPERTIES. Except as disclosed in the financial statements filed
in its SEC Documents on or before the date hereof, the Company and its
Subsidiaries have good and marketable title, free and clear of all Liens (other
than Liens for current Taxes not yet delinquent, mechanics liens, materialmen
Liens, or other inchoate Liens) to the properties and assets, tangible or
intangible, reflected in such financial statements (including the notes thereto)
as being owned by the Company and its Subsidiaries as of the dates thereof. All
buildings and all fixtures, equipment, and other property and assets that are
material to its business and are held under leases or subleases by any of the
Company and its Subsidiaries are held under valid leases or subleases
enforceable in accordance with their respective terms (except as enforceability
may be limited by applicable bankruptcy, insolvency, reorganization, moratorium
or other laws affecting creditors' rights generally and to general equity
principles).
(n) EMPLOYEE BENEFIT PLANS. (1) The Company has Previously Disclosed a
complete list of all bonus, vacation, deferred compensation, commission-based,
pension, retirement, profit-sharing, thrift, savings, employee stock ownership,
stock bonus, stock purchase, restricted stock, stock appreciation and stock
option plans, all employment or severance contracts, all medical, dental,
disability, severance, health and life plans, all other employee benefit and
fringe benefit plans, contracts, programs or arrangements and any "change of
control" or similar provisions in any plan, contract, program or arrangement
maintained or contributed to by the Company or any of its Subsidiaries for the
benefit of current or former officers, employees or directors or the
beneficiaries or dependents of any of the foregoing (collectively, (and
including the Specified Compensation Plans) the "COMPENSATION PLANS") other than
plans, programs or arrangements that cost less than $2,000 per annum to maintain
in the aggregate.
(2) With respect to each Compensation Plan, if applicable, the
Company has provided to the Acquiror, true and complete copies of the existing:
(A) Compensation Plan documents and amendments thereto; (B) trust instruments
and insurance contracts; and (C) two most recent Forms 5500 filed with the IRS.
(3) Except as Previously Disclosed, each of the Compensation
Plans has been administered and operated in accordance with the terms thereof
and with applicable law, including ERISA, the Code and the Securities Act. Each
of the Compensation Plans that is an "employee pension benefit plan" within the
meaning of Section 3(2) of ERISA ("PENSION PLAN") and that is intended to be
qualified under Section 401(a) of the Code has received a favorable
determination letter from the IRS covering all tax law changes prior to the
Economic Growth and Tax Relief Reconciliation Act of 2001 or has applied to the
IRS for such favorable determination letter within the applicable remedial
amendment period under Section 401(b) of the Code, and the Company is not aware
of any circumstances that would likely result in the revocation or denial of any
such favorable determination letter. None of the Company, any of its
-25-
Subsidiaries or an Indemnified Party has engaged in any transaction with respect
to any Compensation Plan that has subjected, or (assuming the taxable period
with respect to the transaction expired as of the date hereof) could subject the
Company or any of its Subsidiaries to a tax or penalty imposed by either Section
4975 of the Code or Section 502 of ERISA in an amount that would be material.
There is no pending or, to the Company's knowledge, threatened litigation or
governmental audit, examination or investigation relating to the Compensation
Plans.
(4) No liability under Subtitle C or D of Title IV of ERISA
has been or is expected to be incurred by the Company or any of its Subsidiaries
with respect to any "single-employer plan" (within the meaning of Section 4001
(a)(15) of ERISA) or Multiemployer Plan currently or formerly maintained or
contributed to by any of them, or the single-employer plan or Multiemployer Plan
of any entity (an "ERISA AFFILIATE") that is considered one employer with the
Company under Section 4001(a)(14) of ERISA or Section 414(b) or (c) of the Code
(an "ERISA AFFILIATE PLAN"). No notice of a "reportable event," within the
meaning of Section 4043 of ERISA for which the 30-day reporting requirement has
not been waived or extended, other than pursuant to PBGC Reg. Section 4043.66,
has been required to be filed for any Pension Plan or by any ERISA Affiliate
within the 12-month period ending on the date hereof. The PBGC has not
instituted proceedings to terminate any Pension Plan or ERISA Affiliate Plan,
and, to the Company's knowledge, no condition exists that presents a material
risk that such proceedings will be instituted. The Company and its Subsidiaries
have not incurred and do not expect to incur any withdrawal liability with
respect to a Multiemployer Plan under Subtitle E of Title IV of ERISA
(regardless of whether based on contributions of an ERISA Affiliate).
(5) All contributions, premiums and payments required to have
been made under the terms of any of the Compensation Plans or applicable law
have been timely made or reflected in the Company's SEC Documents. Neither any
of the Pension Plans nor ERISA Affiliate Plans has an "accumulated funding
deficiency" (whether or not waived) within the meaning of Section 412 of the
Code or Section 302 of ERISA. None of the Company, any of its Subsidiaries or
any ERISA Affiliate has provided, or is required to provide, security to any
Pension Plan or any ERISA Affiliate Plan pursuant to Section 401(a)(29) or
Section 412(n) of the Code.
(6) Under each Pension Plan which is a single-employer plan,
as of the last day of the most recent plan year ended prior to the date hereof,
the actuarially determined present value of all "benefit liabilities," within
the meaning of Section 4001(a)(16) of ERISA (as determined on the basis of the
actuarial assumptions contained in the plan's most recent actuarial valuation),
did not exceed the then current value of the assets of such plan. Under each of
-26-
the Pension Plans, there has been no adverse change in the financial condition
of any Pension Plan (with respect to either assets or benefits) since the last
day of the most recent plan year.
(7) There is no material pending or, to the knowledge of the
Company, threatened, litigation relating to the Compensation Plans. Neither the
Company nor any of its Subsidiaries has any obligations for retiree health and
life benefits under any Compensation Plan, except as Previously Disclosed. The
Company or the Subsidiaries may amend or terminate any such plan at any time
without incurring any liability thereunder. There has been no communication to
employees, former employees or their spouses, beneficiaries or dependents by the
Company or any of its Subsidiaries that promised or guaranteed such employees
retiree health or life insurance or other retiree death benefits on a permanent
basis or promised or guaranteed that any such benefits could not be modified,
eliminated or terminated.
(8) Except as Previously Disclosed, there has been no
amendment to, announcement by the Company or any of its Subsidiaries relating
to, or change in employee participation or coverage under, any Compensation Plan
which would increase the expense of maintaining such plan above the level of the
expense incurred therefor for the most recently ended fiscal year. Except as
Previously Disclosed, neither the execution of this Agreement, stockholder
adoption of this Agreement nor the consummation of the transactions contemplated
hereby will (v) entitle any employees of the Company or any of its Subsidiaries
to severance pay or any increase in severance pay upon any termination of
employment after the date hereof, (w) accelerate the time of payment or vesting
or trigger any payment or funding (through a grantor trust or otherwise) of
compensation or benefits under, increase the amount payable or trigger any other
material obligation pursuant to, any of the Compensation Plans, (x) limit or
restrict the right of the Company to merge, amend or terminate any of the
Compensation Plans, (y) cause the Company or any of its Subsidiaries to record
additional compensation expense on its income statement with respect to any
outstanding stock option or other equity-based award or (z) result in payments
under any of the Compensation Plans which would not be deductible under Section
162(m) or Section 280G of the Code.
(9) The Company has Previously Disclosed a complete list
stating the current base salary, 2001 earned incentive compensation and 2002
target incentive compensation, and additional payments triggered by the Merger
and the Company's estimate of the excise tax gross-up for each such amount for
all current officers, employees and directors of the Company or any of its
Subsidiaries.
(o) LABOR MATTERS. Each of the Company and its Subsidiaries is in
compliance with all applicable laws respecting employment and employment
practices, terms and conditions of employment and wages and hours, including the
Immigration Reform and Control Act of 1986, any such laws respecting employment
discrimination, disability rights or benefits, equal opportunity, affirmative
action, workers' compensation, employee benefits, severance payments, labor
relations, employee leave issues, wage and hour standards, occupational safety
and health requirements and unemployment insurance and related matters. Neither
-27-
the Company nor any of its Subsidiaries is a party to or is bound by any
collective bargaining Contract with a labor union or labor organization, nor is
the Company or any of its Subsidiaries the subject of a proceeding asserting
that it or any such Subsidiary has committed an unfair labor practice (within
the meaning of the National Labor Relations Act) or seeking to compel the
Company or any such Subsidiary to bargain with any labor organization as to
wages or conditions of employment, nor is there any strike or other labor
dispute involving it or any of its Subsidiaries pending or, to the Company's
knowledge, threatened, nor is the Company aware of any activity involving it or
any of its Subsidiaries' employees seeking to certify a collective bargaining
unit or engaging in other organizational activity. The consummation of the
Merger and the other transactions contemplated by this Agreement will not
entitle any third party (including any labor union or labor organization) to any
payments under any Contract to which the Company or any Subsidiary of the
Company is a party.
(p) ENVIRONMENTAL MATTERS. (1) The Company and each of its Subsidiaries
have complied at all times with all applicable Environmental Laws; (2) to the
Company's knowledge, no property (including soils, groundwater, buildings and
any other structures) currently or formerly owned or operated by the Company or
any of its Subsidiaries or in which the Company or any of its Subsidiaries has a
Lien, has been contaminated with, or has had any release of, any Hazardous
Substance; (3) to the Company's knowledge, neither the Company nor any of its
Subsidiaries could be deemed the owner or operator under any Environmental Law
of any property in connection with any Loans or in which it has currently or
formerly held a Lien or security interest; (4) to the Company's knowledge,
neither the Company nor any of its Subsidiaries is subject to liability for any
Hazardous Substance disposal or contamination on any other third-party property;
(5) neither the Company nor any of its Subsidiaries has received any notice,
demand letter, claim or request for information relating to any violation of, or
liability under, any Environmental Law; (6) neither the Company nor any of its
Subsidiaries is subject to any order, decree, injunction or other agreement with
any Governmental Authority or any third party relating to any Environmental Law;
(7) to the Company's knowledge, there are no other circumstances or conditions
involving the Company or any of its Subsidiaries, any currently or formerly
owned or operated property, or any Lien held by the Company or any of its
Subsidiaries (including the presence of asbestos, underground storage tanks,
contamination, polychlorinated biphenyls or gas station sites) that could be
expected to result in any claims, liability or investigations or result in any
restrictions on the ownership, use, or transfer of any property pursuant to any
Environmental Law; and (8) the Company has made available to the Acquiror copies
-28-
of all environmental reports, studies, sampling data, correspondence, filings
and other environmental information in its possession or reasonably available to
it relating to the Company, any of its Subsidiaries, any currently or formerly
owned or operated property or any property in which the Company or any of its
Subsidiaries has held a Lien and, to its knowledge, could be deemed an owner or
operator of such property pursuant to any Environmental Law.
(q) TAX MATTERS. (1) All Tax Returns that are required to be filed with
respect to the Company or any of its Subsidiaries, have been or will be timely
filed, or requests for extensions have been timely filed and have not expired;
(2) all Tax Returns filed by the Company and its Subsidiaries are complete and
accurate; (3) all Taxes that are due and payable (without regard to whether such
Taxes have been assessed) have been timely paid or adequate reserves have been
established for the payment of such Taxes; (4) except as Previously Disclosed,
all income Tax Returns referred to in clause (1) have been examined by the IRS
or the appropriate taxing authority or the period for assessment of the Taxes
for which such return has been filed has expired; (5) no audit or examination or
refund litigation with respect to any such Tax Return is pending or, to the
Company's knowledge, has been threatened; (6) all deficiencies asserted or
assessments made as a result of any examination of a Tax Return of the Company
or any of its Subsidiaries, have been paid in full or are being contested in
good faith; (7) no waivers of statute of limitations have been given by or
requested with respect to any Taxes of the Company or its Subsidiaries for any
currently open taxable period; (8) the Company and each of its Subsidiaries has
complied with all information reporting requirements and has in its respective
files all Tax Returns that it is required to retain in respect of information
reporting requirements imposed by the Code or any similar foreign, state or
local law; (9) the Company and its Subsidiaries have never been a member of an
affiliated, combined, consolidated or unitary Tax group for purposes of filing
any Tax Return (other than a consolidated group of which the Company was the
common parent); (10) no closing agreements, private letter rulings, technical
advice memoranda or similar agreements or rulings have been entered into or
issued by any taxing authority with respect to the Company or any of its
Subsidiaries; (11) no tax is required to be withheld pursuant to Section 1445 of
the Code as a result of the transfer contemplated by this Agreement; (12) except
as Previously Disclosed, the Company and its Subsidiaries are not bound by any
tax indemnity, tax sharing or tax allocation agreement or arrangement; (13) all
Taxes that the Company or any Subsidiary is or was required by law to withhold
or collect have been duly withheld or collected and, to the extent required by
applicable law, have been paid to the proper Governmental Authority or other
person; (14) there are no Liens on any of the assets of any member of the
Company or any of its Subsidiaries that arose in connection with any failure (or
alleged failure) to pay any Tax; (15) neither the Company nor any predecessor to
the Company has made with respect to the Company, or any predecessor of the
Company any consent under Section 341 of the Code; and (16) none of the Company
or any of its Subsidiaries has been a party to any distribution occurring during
the last 3 years in which the parties to such distribution treated the
distribution as one to which Section 355 of the Code (or any similar provision
of state, local or foreign law) applied.
-29-
(r) RISK MANAGEMENT; ALLOWANCE FOR LOAN LOSSES. (1) All swaps, caps,
floors, option agreements, futures and forward contracts and other similar risk
management arrangements, whether entered into for the Company's own account, or
for the account of one or more of the Company's Subsidiaries or their customers
(each a "RISK MANAGEMENT CONTRACT"), were entered into (A) in accordance with
prudent business practices and all applicable laws, rules, regulations and
regulatory policies and (B) with counterparties believed to be financially
responsible at the time; and each of them constitutes the valid and legally
binding obligation of the Company or one of its Subsidiaries, enforceable in
accordance with its terms (except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer and
similar laws of general applicability relating to or affecting creditors' rights
or by general equity principles), and are in full force and effect. Neither the
Company nor its Subsidiaries, nor to the Company's knowledge any other party
thereto, is in breach of any of its obligations under any Risk Management
Contract.
(2) The allowances for loan losses reflected on the
consolidated balance sheets included in the Company's SEC Documents are, in the
reasonable judgment of the Company's management, adequate as of their respective
dates under the requirements of generally accepted accounting principles and
applicable regulatory requirements and guidelines.
(s) BOOKS AND RECORDS. The books and records of the Company and its
Subsidiaries have been properly and accurately maintained, and there are no
inaccuracies or discrepancies contained or reflected therein.
(t) ACCOUNTING CONTROLS. Each of the Company and its Subsidiaries has
devised and maintained systems of internal accounting controls sufficient to
provide reasonable assurances, in the judgment of the Company Board, that (1)
all material transactions are executed in accordance with management's general
or specific authorization; (2) all material transactions are recorded as
necessary to permit the preparation of financial statements in conformity with
generally accepted accounting principles consistently applied with respect to
any criteria applicable to such statements, (3) access to the material property
and assets of the Company and its Subsidiaries is permitted only in accordance
with management's general or specific authorization; and (4) the recorded
accountability for items is compared with the actual levels at reasonable
intervals and appropriate action is taken with respect to any differences.
(u) INSURANCE. The Company has made available to the Acquiror all of
the insurance policies, binders, or bonds maintained by or for the benefit of
the Company or its Subsidiaries ("INSURANCE POLICIES") or their representatives.
The Company and its Subsidiaries are insured with reputable insurers against
such risks and in such amounts as the management of the Company reasonably has
determined to be prudent in accordance with industry practices. All of the
Insurance Policies are in full force and effect; the Company and its
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Subsidiaries are not in default thereunder; and all claims thereunder have been
filed in due and timely fashion.
(v) NO BROKERS. No action has been taken by the Company or its
Subsidiaries (including their directors, officers or employees) that would give
rise to any valid claim against any party hereto for a brokerage commission,
finder's fee or other like payment with respect to the transactions contemplated
by this Agreement, except that the Company has employed Sandler ▇'▇▇▇▇▇ &
Partners, L.P. in connection with this transaction on Previously Disclosed
terms.
(w) INTELLECTUAL PROPERTY. The Company and its Subsidiaries own or have
the right to use all material Intellectual Property Rights necessary or required
for the operation of their business as currently conducted (collectively,
"COMPANY IP RIGHTS"), and have the right to use, license, sublicense or assign
the same without material liability to, or any requirement of consent from, any
other person or party. The Company has Previously Disclosed all Company IP
Rights. The Company's use of the Company IP Rights does not infringe any
Intellectual Property Rights of any person; there is no pending or, to the
knowledge of the Company, threatened litigation, adversarial proceeding,
administrative action or other challenge or claim relating to any Company IP
Rights; to the knowledge of the Company, there is currently no infringement by
any person of any Company IP Rights; and the Company IP Rights owned, used or
possessed by the Company and its Subsidiaries are sufficient and adequate to
conduct the business of the Company and its Subsidiaries to the full extent as
such business is currently conducted.
(x) CONTRACTS WITH RELATED PERSONS. The Company has Previously
Disclosed all Contracts with Related Persons.
(y) PROFIT SHARING PLAN. The Company's 401(k) Profit Sharing Plan is
identical (except for sponsor identifying information) to the Corbel & Co. plan
that has received the favorable IRS determination letter dated September 4, 2001
provided to the Acquiror (the "CORBEL DETERMINATION LETTER"), and the Company
has chosen only the options permitted by that plan. The Company has followed the
terms of the plan and is entitled to rely on the Corbel Determination Letter for
purposes of qualification.
(z) OPERATING AGREEMENT. The Operating Agreement is the only Contract
creating rights or obligations on the part of the Company or any of its
Subsidiaries with respect to Admiralty Insurance Services, L.L.C.
(aa) DISCLOSURE. The information Previously Disclosed or otherwise
provided to the Acquiror in connection with this Agreement, when taken together
with the representations and warranties contained herein, does not contain any
untrue statement of a material fact or omit to state any material fact necessary
in order to make the statements contained therein, in the light of the
-31-
circumstances in which they are being made, not misleading. The copies of all
documents furnished to the Acquiror hereunder are true and complete.
5.04 REPRESENTATIONS AND WARRANTIES OF THE ACQUIROR. The Acquiror
represents and warrants to the Company as follows:
(a) ORGANIZATION, STANDING AND AUTHORITY. The Acquiror is duly
organized, validly existing and in good standing under the laws of Canada. RBC
Centura is duly organized, validly existing and in good standing under the laws
of North Carolina. Following its formation, Acquiror Sub will be duly organized,
validly existing and in good standing under the laws of Delaware. The Acquiror
and RBC Centura are, and Acquiror Sub will be, following its formation, duly
qualified to do business and in good standing in the jurisdictions where the
ownership or leasing of property or assets or the conduct of business requires
such qualification.
(b) CORPORATE POWER. The Acquiror and RBC Centura and each of
their Significant Subsidiaries each has, and Acquiror Sub will have, as of the
Closing Date, the requisite power and authority to carry on its business as it
is now being or, in the case of Acquiror Sub, will be, conducted and to own all
its properties and assets; the Acquiror and RBC Centura each has, and Acquiror
Sub will have, as of the date it executes a supplement to this Agreement, the
corporate power and authority to execute, deliver and perform its obligations
under this Agreement and, in the case of Acquiror Sub, to adopt the plan of
merger contained in this Agreement and, in accordance therewith, to consummate
the transactions contemplated hereby.
(c) CORPORATE AUTHORITY AND ACTION. Each of the Acquiror and
RBC Centura has, and Acquiror Sub will have, as of the date it executes a
supplement to this Agreement, taken all corporate action necessary in order to
authorize the execution and delivery of, and performance of its obligations
under, this Agreement and to consummate the Merger. This Agreement is a valid
and legally binding agreement of the Acquiror and RBC Centura, enforceable in
accordance with its terms (except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, and similar laws of general
applicability relating to or affecting creditors' rights or by general equity
principles). Upon the execution of a supplement to this Agreement by Acquiror
Sub, this Agreement will be the valid and binding agreement of Acquiror Sub,
enforceable in accordance with its terms (except as enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, and similar laws
of general applicability relating to or affecting creditors' rights or by
general equity principles).
(d) REGULATORY APPROVALS; NO DEFAULTS. (1) No consents or
approvals of, or filings or registrations with, any Governmental Authority or
with any third party are required to be made or obtained by the Acquiror or any
of its Subsidiaries in connection with the execution, delivery or performance by
the Acquiror of this Agreement or to consummate the Merger or the other
transactions contemplated hereby except for (A) the filing of applications and
notices, as applicable, with the Federal Reserve System, the NCCOB and the FDBF
with respect to the Merger; (B) the filing of a notification, if required, and
expiration of the related waiting period under the HSR Act, (C) the filing of a
-32-
certificate of merger with the Secretary of State of the State of Delaware
pursuant to the DGCL; and (D) approval by the Superintendent of Financial
Institutions under the Bank Act (Canada). As of the date hereof, the Acquiror is
not aware of any reason why the approvals of all Governmental Authorities
necessary to permit consummation of the transactions contemplated hereby will
not be received without the imposition of a condition or requirement described
in Section 7.01(b).
(2) Subject to receipt of the regulatory approvals, and
expiration of the waiting periods, referred to in the preceding paragraph and
the making of all required filings under federal and state securities laws, the
execution, delivery and performance of this Agreement and the consummation of
the transactions contemplated hereby do not and will not (A) constitute a breach
or violation of, or a default under, or give rise to any Lien, any acceleration
of remedies or any right of termination under, any law, rule or regulation or
any judgment, decree, order, governmental permit or license, or Contract of the
Acquiror or of any of its Subsidiaries or to which the Acquiror or any of its
Subsidiaries or properties is subject or bound, (B) constitute a breach or
violation of, or a default under, the Constitutive Documents of the Acquiror or
any of its Subsidiaries or (C) require any consent or approval under any such
law, rule, regulation, judgment, decree, order, governmental permit or license,
agreement, indenture or instrument.
(e) FUNDS. At the Effective Time, the Acquiror will have the funds
necessary to consummate the Merger and pay the Consideration in accordance with
the terms of this Agreement.
(f) INTERIM OPERATIONS OF ACQUIROR SUB. Acquiror Sub will be formed
solely for the purpose of engaging in the transactions contemplated hereby and,
as of the Closing Date, will have engaged in no business other than in
connection with the transactions contemplated by this Agreement. Acquiror Sub
will be a direct or indirect wholly owned subsidiary of the Acquiror.
(g) NO BROKERS. No action has been taken by the Acquiror, RBC Centura
or Acquiror Sub that would give rise to any valid claim against any party hereto
for a brokerage commission, finder's fee or other, like payment with respect to
the transactions contemplated by this Agreement, except that the Acquiror has
employed RBC ▇▇▇▇ ▇▇▇▇▇▇▇▇ in connection with this transaction.
(h) LITIGATION. No litigation, claim or other proceeding before any
court, arbitrator or Governmental Authority is pending against the Acquiror or
any of its Subsidiaries and, to the Acquiror's knowledge, no such litigation,
claim or other proceeding has been threatened, that would materially impair the
ability of the Acquiror to perform its obligations under this Agreement or
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otherwise materially threaten or materially impede the consummation of the
Merger and the other transactions contemplated by this Agreement.
ARTICLE VI
COVENANTS
6.01 REASONABLE BEST EFFORTS. (a) Subject to the terms and conditions
of this Agreement, each of the Company, the Acquiror, RBC Centura and Acquiror
Sub agrees to use its reasonable best efforts in good faith to take, or cause to
be taken, all actions, and to do, or cause to be done, all things necessary,
proper or desirable, or advisable under applicable laws, so as to permit
consummation of the Merger as promptly as practicable and otherwise to enable
consummation of the transactions contemplated hereby and shall cooperate fully
with the other party hereto to that end.
(b) Without limiting the generality of Section 6.01(a), the Company
agrees to use its reasonable best efforts to obtain the consent or approval of
all persons party to a Contract with the Company or any of its Subsidiaries, to
the extent such consent or approval is required in order to consummate the
Merger or for the Surviving Corporation to receive the benefits of such
Contract.
6.02 STOCKHOLDER APPROVALS. The Company agrees to take, in accordance
with applicable law, applicable NASDAQ National Market System rules and the
Company's Constitutive Documents, all action necessary to convene an appropriate
meeting of stockholders of the Company to consider and vote upon the approval of
this Agreement and any other matters required to be approved by the Company's
stockholders for consummation of the Merger and the transactions contemplated
hereby (including any adjournment or postponement, the "COMPANY MEETING"), and
to solicit stockholder approval, as promptly as practicable after the date
hereof. The Company Board has adopted a resolution contemplated by DGCL Section
251 recommending that the stockholders approve this Agreement (and will keep
such resolution in effect) and take any other action required to permit
consummation of the transactions contemplated hereby. The obligation of the
Company to hold the Company Meeting shall not be affected by any Acquisition
Proposal or other event or circumstance.
6.03 PROXY STATEMENT. (a) The Acquiror and the Company will cooperate
in the preparation of a proxy statement and other proxy solicitation materials
of the Company (the "PROXY STATEMENT"). The Acquiror agrees to provide as
promptly as reasonably practicable all necessary information for inclusion in
the Proxy Statement. The Company agrees to file the Proxy Statement in
preliminary form with the SEC as promptly as reasonably practicable. The Company
will advise the Acquiror promptly of the time when the Proxy Statement and any
amendment or supplement to the Proxy Statement has been filed, and of any
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request by the SEC for amendment of the Proxy Statement or comments thereon and
responses thereto or requests by the SEC for additional information. The Company
agrees to use its reasonable best efforts, after consultation with the Acquiror,
to respond promptly to all such comments of and requests by the SEC.
(b) Each of the Company and the Acquiror agrees, as to itself and its
Subsidiaries, that none of the information supplied or to be supplied by it for
inclusion or incorporation by reference in the Proxy Statement and any amendment
or supplement thereto will, at the date of mailing to stockholders and at the
time of the Company Meeting, contain any untrue statement that, at the time and
in the light of the circumstances under which such statement is made, is false
or misleading with respect to any material fact, or omit to state any material
fact necessary in order to make the statements therein not false or misleading
or necessary to correct any earlier statement in the Proxy Statement or any
amendment or supplement thereto. Each of the Company and the Acquiror further
agrees that if it shall become aware prior to the Effective Time of any
information furnished by it that would cause any of the statements in the Proxy
Statement to be false or misleading with respect to any material fact, or to
omit to state any material fact necessary to make the statements therein not
false or misleading, to inform promptly the other party thereof and to take the
necessary steps to correct the Proxy Statement.
(c) The Company will use its reasonable best efforts to cause the
definitive Proxy Statement and all required amendments and supplements thereto
to be mailed to its stockholders as promptly as practicable after the date
hereof.
6.04 PRESS RELEASES. The initial press release concerning the Merger
and the other transactions contemplated by this Agreement shall be a joint press
release in such form agreed to in advance by the parties, and thereafter each of
the Company and the Acquiror agrees that it will not, without the prior approval
of the other party, issue any press release or written statement for general
circulation relating to the transactions contemplated hereby (except for any
release or statement that, in the written opinion of outside counsel to the
Company or the Acquiror, as the case may be, is required by law or regulation
and as to which the Company or the Acquiror, as the case may be, has used its
best efforts to discuss with the other in advance, provided that such release or
statement has not been caused by, or is not the result of, a previous disclosure
by or at the direction of the Company or the Acquiror, as the case may be, or
any of its representatives that was not permitted by this Agreement).
6.05 ACCESS; INFORMATION. (a) Upon reasonable notice and subject to
applicable laws relating to the exchange of information, the Company shall
afford the Acquiror and its officers, employees, counsel, accountants and other
authorized representatives, such access during normal business hours throughout
the period prior to the Effective Time to the books, records (including credit
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files, tax returns and work papers of independent auditors), properties,
personnel and to such other information as it may reasonably request and, during
such period, the Company shall furnish promptly (1) a copy of each material
report, schedule and other document filed by it pursuant to the requirements of
federal or state securities or banking laws and (2) all other information
concerning its business, properties and personnel as the other may reasonably
request.
(b) Each of the Company and the Acquiror agrees that it will not, and
will cause its representatives not to, use any information obtained pursuant to
this Section 6.05 for any purpose unrelated to the consummation of the
transactions contemplated by this Agreement. Subject to the requirements of law,
each party will keep confidential, and will cause its representatives to keep
confidential, all information and documents obtained pursuant to this Section
6.05, and, with respect to the Company, in connection with the transactions
contemplated hereby, unless such information (1) was already known to such
party, (2) becomes available to such party from other sources not known by such
party to be bound by a confidentiality obligation, (3) is disclosed with the
prior written approval of the party to which such information pertains, (4) is
or becomes readily ascertainable from published information or trade sources or
(5) is such that such party is required by law or court order to disclose. If
either party is required or reasonably believes that it is required to disclose
any information described in this section by (i) law, (ii) any court of
competent jurisdiction or (iii) any inquiry or investigation by any
governmental, official or regulatory body which is lawfully entitled to require
any such disclosure, such party (the "REQUIRED PARTY") shall, so far as it is
lawful, notify the other party of such required disclosure on the same day that
the Required Party (a) is notified of a request for such disclosure from the
relevant authority, body or other entity or (b) determines that such disclosure
is required, whichever is earlier. Immediately thereafter, and to the extent
practical on the same day, and subject to applicable laws, the parties shall
discuss and use their reasonable best efforts to agree as to the mandatory
nature, the required timing and the required content of such disclosure. The
Required Party will furnish only that portion of the information described in
this section that is legally required to be disclosed and will exercise its
reasonable best efforts to obtain an order or other reliable assurance that
confidential treatment will be accorded to the information described in this
section so furnished. In the event that this Agreement is terminated or the
transactions contemplated by this Agreement shall otherwise fail to be
consummated, each party shall promptly cause all copies of documents or extracts
thereof containing information and data as to another party hereto to be
returned to the party which furnished the same, or at the other party's request,
destroyed.
(c) No investigation by either party of the business and affairs of the
other shall affect or be deemed to modify or waive any representation, warranty,
covenant or agreement in this Agreement, or the conditions to either party's
obligation to consummate the transactions contemplated by this Agreement.
6.06 ACQUISITION PROPOSALS. The Company agrees that it shall not, and
shall cause its Subsidiaries and its and its Subsidiaries' representatives not
to, solicit or encourage inquiries or proposals with respect to, or engage in
any negotiations concerning, or provide any confidential information to, or have
any discussions with, any person relating to, any tender or exchange offer,
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proposal for a merger, consolidation or other business combination involving the
Company or any of its Subsidiaries or any proposal or offer to acquire in any
manner a substantial equity interest in, or a substantial portion of the assets
or deposits of, the Company or any of its Subsidiaries, other than the
transactions contemplated by this Agreement (any of the foregoing, an
"ACQUISITION PROPOSAL"); PROVIDED that nothing contained in this Agreement shall
prevent the Company Board from (i) making any disclosure to its stockholders if,
in the good faith judgment of the Company Board, failure so to disclose would be
inconsistent with its obligations under applicable law; (ii) before the date of
the Company Meeting, providing (or authorizing the provision of) information to,
or engaging in (or authorizing) such discussions or negotiations with, any
person who has made a bona fide written Acquisition Proposal received after the
date hereof which did not result from a breach of this Section 6.06; or (iii)
recommending such an Acquisition Proposal to its stockholders if and only to the
extent that, in the case of actions referred to in clause (ii) or (iii), (x)
such Acquisition Proposal is a Superior Proposal, (y) the Company Board, after
having consulted with and considered the advice of outside counsel to the
Company Board, determines in good faith that providing such information or
engaging in such negotiations or discussions, or making such recommendation is
required in order to discharge the directors' fiduciary duties to the Company
and its stockholders in accordance with the DGCL and (z) the Company receives
from such person a confidentiality agreement substantially in the form of the
Confidentiality Agreement. For purposes of this Agreement, a "SUPERIOR PROPOSAL"
means any Acquisition Proposal by a third party on terms that the Company Board
determines in its good faith judgment, after receiving the advice of its
financial advisors, to be materially more favorable from a financial point of
view to the Company and its stockholders than the Merger and the other
transactions contemplated hereby, after taking into account the likelihood of
consummation of such transaction on the terms set forth therein, taking into
account all legal, financial (including the financing terms of any such
proposal), regulatory and other aspects of such proposal and any other relevant
factors permitted under applicable law, after giving the Acquiror at least two
business days to respond to such third-party Acquisition Proposal once the Board
has notified the Acquiror that in the absence of any further action by the
Acquiror it would consider such Acquisition Proposal to be a Superior Proposal,
and then taking into account any amendment or modification to this Agreement
proposed by the Acquiror. The Company also agrees immediately to cease and cause
to be terminated any activities, discussions or negotiations conducted prior to
the date of this Agreement with any parties other than the Acquiror, with
respect to any of the foregoing. The Company shall promptly (within one business
day) advise the Acquiror following the receipt by it of any Acquisition Proposal
and the material terms thereof (including the identity of the person making such
Acquisition Proposal), and advise the Acquiror of any developments (including
any change in such terms) with respect to such Acquisition Proposal promptly
upon the occurrence thereof. The Company agrees that neither it nor any of its
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Subsidiaries shall terminate, amend, modify or waive any provision of or release
any of its rights under any confidentiality or standstill agreement to which it
is a party. The Company shall enforce, to the fullest extent permitted under
applicable law, the provisions of any such agreement, including, but not limited
to, by obtaining injunctions to prevent any breaches of such agreements and to
enforce specifically the terms and provisions thereof in any court having
jurisdiction.
Nothing contained in this Section 6.06 or any other provision of this
Agreement will prohibit the Company or the Company Board from notifying any
third party that contacts the Company on an unsolicited basis after the date
hereof concerning an Acquisition Proposal of the Company's obligations under
this Section 6.06.
6.07 TAKEOVER LAWS. No party shall knowingly take any action that would
cause the transactions contemplated by this Agreement or the Voting Agreement to
be subject to requirements imposed by any Takeover Law and each of them shall
take all necessary steps within its control to exempt (or ensure the continued
exemption of) the transactions contemplated by this Agreement from any
applicable Takeover Law, as now or hereafter in effect.
6.08 NO RIGHTS TRIGGERED. The Company shall take all reasonable steps
necessary to ensure that the entering into of this Agreement and the
consummation of the transactions contemplated hereby and any other action or
combination of actions, or any other transactions contemplated hereby, do not
and will not result in the grant of any rights to any person (a) under the
Constitutive Documents of the Company or (b) under any material Contract to
which it or any of its Subsidiaries is a party except, in each case, as
Previously Disclosed or contemplated by this Agreement.
6.09 REGULATORY APPLICATIONS. (a) The Acquiror and the Company and
their respective Subsidiaries shall cooperate and use their respective
reasonable best efforts to prepare all documentation, to effect all filings and
to obtain all permits, consents, approvals and authorizations of all third
parties and Governmental Authorities necessary to consummate the transactions
contemplated by this Agreement. The Acquiror and the Company will promptly file
applications, notices or other materials required to be filed with Governmental
Authorities by applicable law in connection with the Merger and promptly file
any additional information requested as soon as practicable after receipt of
request thereof; PROVIDED that each party shall duly file such filings
(including the Proxy Statement in preliminary form) no later than 25 business
days after the date HEREOF. The Acquiror shall have the right to review in
advance, and to the extent practicable to consult with the Company, subject to
applicable laws relating to the exchange of information, with respect to, all
material written information submitted to any third party or any Governmental
Authority in connection with the transactions contemplated by this Agreement. In
exercising the foregoing right, the Acquiror agrees to act reasonably and as
promptly as practicable. Each of the Acquiror and the Company agrees that it
will consult with the other party hereto with respect to the obtaining of all
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material consents, registrations, approvals, permits and authorizations of all
third parties and Governmental Authorities necessary or advisable to consummate
the transactions contemplated by this Agreement, and each party will keep the
other party apprised of the status of material matters relating to completion of
the transactions contemplated hereby.
(b) Each of the Acquiror and the Company agrees, upon request, to
furnish the other party with all information concerning itself, its
Subsidiaries, directors, officers and stockholders and such other matters as may
be reasonably necessary or advisable in connection with any filing, notice or
application made by or on behalf of such other party or any of its Subsidiaries
to any third party or Governmental Authority.
6.10 INDEMNIFICATION. (a) Following the Effective Time and for a period
of six years thereafter, the Acquiror shall, or shall cause the Surviving
Corporation to, indemnify, defend and hold harmless the present and former
directors and officers of the Company and its Subsidiaries (each, an
"INDEMNIFIED PARTY") against all costs or expenses (including reasonable
attorneys' fees), judgments, fines, losses, claims, damages or liabilities
(collectively, "COSTS") incurred in connection with any claim, action, suit,
proceeding or investigation, whether civil, criminal, administrative or
investigative, arising out of actions or omissions occurring at or prior to the
Effective Time (including the transactions contemplated by this Agreement),
whether asserted or claimed prior to, at or after the Effective Time (each, a
"CLAIM"), to the fullest extent that the Company is permitted to indemnify its
directors and officers under applicable law and its Constitutive Documents in
effect on the date hereof (and the Acquiror shall, or shall cause the Surviving
Corporation to, also advance expenses as incurred to the fullest extent
permitted under applicable law provided the person to whom expenses are advanced
provides an undertaking to repay such advances if it is ultimately determined
that such person is not entitled to indemnification); PROVIDED that any
determination required to be made with respect to whether such an officer's or
director's conduct complies with the standards set forth under applicable law
and the Company's Constitutive Documents shall be made by independent counsel
reasonably acceptable to both the Indemnified Party and the Surviving
Corporation.
(b) For a period of four years from the Effective Time, the Acquiror
shall use its reasonable best efforts to provide (or cause the Surviving
Corporation to provide) that portion of director's and officer's liability
insurance that serves to reimburse the present and former officers and directors
of the Company or any of its Subsidiaries (determined as of the Effective Time)
with respect to claims against such directors and officers arising from facts or
events which occurred before the Effective Time, which insurance shall contain
at least the same coverage and amounts, and contain terms and conditions no less
advantageous, as that coverage currently provided by the Company; PROVIDED,
HOWEVER, that in no event shall the Acquiror be required to expend more than
twice the current amount spent by the Company (the "INSURANCE AMOUNT") to
maintain or procure such directors' and officers' insurance coverage; PROVIDED,
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FURTHER, that if the Acquiror is unable to maintain or obtain the insurance
called for by this Section 6.10(b), the Acquiror shall use its reasonable best
efforts to obtain as much comparable insurance as is available for the Insurance
Amount; PROVIDED, FURTHER, that officers and directors of the Company or any
Subsidiary may be required to make application and provide customary
representations and warranties to the Acquiror's insurance carrier for the
purpose of obtaining such insurance.
(c) Any Indemnified Party wishing to claim indemnification under
Section 6.10(a), upon learning of a Claim, shall promptly notify the Acquiror
thereof; PROVIDED that the failure so to notify shall not affect the obligations
of the Acquiror under Section 6.10(a) unless and to the extent that the Acquiror
is actually prejudiced as a result of such failure. In the event of a Claim
(whether arising before or after the Effective Time), (1) the Acquiror or the
Surviving Corporation shall have the right to assume the defense thereof and the
Acquiror 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 the Acquiror or
the Surviving Corporation elects not to assume such defense or counsel for the
Indemnified Parties advises that there are issues that raise conflicts of
interest between the Acquiror or the Surviving Corporation and the Indemnified
Parties, the Indemnified Parties may retain counsel satisfactory to them, and
the Acquiror 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, HOWEVER, that the Acquiror shall be obligated
pursuant to this paragraph (c) to pay for only one firm of counsel for all
Indemnified Parties in any jurisdiction unless the use of one counsel for such
Indemnified Parties would present such counsel with a conflict of interest, (2)
the Indemnified Parties will cooperate in the defense of any such matter and (3)
the Acquiror shall not be liable for any settlement effected without its prior
written consent, which consent shall not be unreasonably withheld; and PROVIDED,
FURTHER, that the Acquiror shall not have any obligation hereunder to any
Indemnified Party when and if a court of competent jurisdiction shall ultimately
determine, and such determination shall have become final and non-appealable,
that the indemnification of such Indemnified Party in the manner contemplated
hereby is prohibited by applicable law.
(d) If the Acquiror or any of its successors or assigns shall
consolidate with or merge into any other entity and shall not be the continuing
or surviving entity of such consolidation or merger or shall transfer all or
substantially all of its assets to any entity, then and in each case, proper
provision shall be made so that the successors and assigns of the Acquiror shall
assume the obligations set forth in this Section 6.10.
(e) The provisions of this Section 6.10 are intended to benefit, and
may be enforced by, all Indemnified Parties and their respective heirs and
representatives. An Indemnified Party shall be entitled to be reimbursed for all
expenses (including reasonable attorneys' fees) incurred in successfully
enforcing this Section.
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6.11 NOTIFICATION OF CERTAIN MATTERS. (a) Each of the Company and the
Acquiror shall give prompt notice to the other of any fact, event or
circumstance known to it that would reasonably be expected, individually or
taken together with all other facts, events and circumstances known to it, (1)
to result in any Material Adverse Effect with respect to it or (2) to cause or
constitute a material breach of any of its representations, warranties,
covenants or agreements contained herein.
(b) The Company shall promptly notify the Acquiror of any written
notice or other bona fide communication from any person alleging that the
consent of such person is or may be required as a condition to the Merger.
(c) The Company and each of its Subsidiaries shall, prior to the
Closing Date, notify its insurers in writing of all known incidents, events and
circumstance that would reasonably be expected to give rise to a claim against
the Company or its Subsidiaries, as applicable.
6.12 EMPLOYEE BENEFITS.
(a) Following the Effective Time, the Acquiror agrees to permit or
cause the Company or its Subsidiaries to honor all Compensation Plans in
accordance with their terms.
(b) The Company shall and the Acquiror shall permit or cause the
Company to pay the CIC Payments in accordance with the Specified Compensation
Plans.
(c) Following the Effective Time, the employees of the Company and its
Subsidiaries will be subject to the policies of RBC Centura that are applicable
to similarly situated employees of RBC Centura and its Subsidiaries and will be
provided employee retirement, welfare and other benefits, fringes, and
perquisites that are generally comparable in the aggregate to those provided by
RBC Centura to similarly situated employees of RBC Centura and its Subsidiaries.
(d) The Acquiror will cause each employee benefit plan of RBC Centura
and its Subsidiaries in which employees of the Company and its Subsidiaries are
eligible to participate to take into account for purposes of eligibility and
vesting thereunder, but not for purposes of benefit accrual, the prior service
of such employees with the Company and its Subsidiaries as if such service were
with RBC Centura and its Subsidiaries, to the same extent that such service was
credited under a comparable plan of the Company. Employees of the Company and
its Subsidiaries shall not be subject to any waiting periods or pre-existing
condition limitations under the medical, dental and health plans of RBC Centura
and its Subsidiaries in which they are eligible to participate. Employees of the
Company and its Subsidiaries will retain credit for vacation pay which has been
accrued as of the Effective Time and for purposes of determining the entitlement
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of such employees to vacation pay following the Effective Time, the service of
such employees with the Company and its Subsidiaries shall be treated as if such
service was with RBC Centura and its Subsidiaries.
(e) Prior to the Effective Time, the Company shall take all actions
necessary to terminate the Admiralty 401(k) Profit Sharing Plan effective as of
the day prior to the Closing Date, including adopting resolutions of the Company
Board.
(f) Ten days prior to the Effective Time, for each current officer,
employee or director of the Company or its Subsidiaries entitled to receive any
payments or benefits triggered by the Merger, the Company shall deliver to the
Acquiror, in a form reasonably satisfactory to the Acquiror, a general waiver
and release of claims signed by such officer, employee or director. Such release
shall provide that if a termination of employment occurs during a period in
which an officer, employee or director is entitled to the continued provision of
benefits triggered by the Merger under any Compensation and Benefit Plan (the
"CIC BENEFITS CONTINUATION"), then the Company will provide such benefits on
substantially the same terms and at the same employee costs as then in effect
for the remainder of the period covered by the CIC Benefits Continuation, and
that such period shall be coincident with the period of required coverage under
the Consolidated Omnibus Budget Reconciliation Act (COBRA).
(g) The Company shall be responsible for providing or discharging any
and all notifications, benefits and liabilities to employees and Governmental
Authorities required by the Workers Adjustment and Retraining Notification Act
of 1988 (WARN Act) or by any other applicable law relating to plant closings or
employee separations or severance pay that are required to be provided before
the Effective Time as a result of the transactions contemplated by this
Agreement and RBC Centura shall be responsible for any and all such matters
following the Effective Time. The Company shall cooperate in preparing and
distributing any notices that RBC Centura may desire to provide prior to the
Effective Time, in connection with actions by RBC Centura after the Effective
Time would result in a notice requirement under such laws.
6.13 CERTAIN ADJUSTMENTS. Upon the request of the Acquiror, the Company
shall (a) consistent with generally accepted accounting principles and
regulatory accounting principles, use its best efforts to record any accounting
adjustments required to conform the (1) loan, litigation and other reserves
(including loan classifications and levels of reserves) and (2) real estate and
securities valuation policies and practices of the Company and its Subsidiaries
so as to reflect consistently on a mutually satisfactory basis the policies and
practices of the Acquiror and (b) make reasonable adjustments to the corporate
structure of the Company or its direct or indirect subsidiaries and transfer
assets or liabilities between the Company and its Subsidiaries or between
Subsidiaries; PROVIDED, HOWEVER, that the Company shall not be obligated to
record any such accounting adjustments (1) unless and until the Company shall be
satisfied that the conditions to the obligation of the parties to consummate the
Merger will be satisfied or waived on or before the Closing Date and (2) in no
event until the day prior to the Closing Date.
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6.14 CERTAIN CONTRACTS. Prior to the Effective Time, the Company (a)
shall cause any Contracts with Related Persons (other than Compensation Plans)
to be terminated (effective prior to or as of the Effective Time) without any
penalty or other adverse consequences to the Company and (b) will use its
reasonable best efforts to cause the Contracts with third parties reasonably
requested by the Acquiror to be terminated (effective prior to or as of the
Effective Time) without any penalty or other adverse consequences to the Company
or to be amended in the manner reasonably requested by the Acquiror; PROVIDED,
HOWEVER, that the Company shall not be obligated to cause any such Contract to
be terminated unless and until the Company shall be satisfied that the
conditions to the obligation of the parties to consummate the Merger will be
satisfied or waived on or before the Closing Date.
6.15 REGULATORY COMPLIANCE. In consultation with the Acquiror, the
Company will take all reasonable measures to ensure that the Surviving
Corporation's subsidiary depository institutions will perform at a level of at
least "satisfactory" under the CRA and that the Surviving Corporation and its
subsidiary depository institutions should be deemed "well managed" by their
"appropriate Federal banking agency" (as such term is defined in Section 3(q) of
the Federal Deposit Insurance Act).
6.16 FORMATION OF ACQUIROR SUB. As soon as practicable following the
date of this Agreement, the Acquiror shall cause Acquiror Sub to be duly
organized as a direct or indirect wholly owned Subsidiary of the Acquiror and to
become a party to this Agreement by executing and delivering a supplement
hereto.
6.17 IBB LINE OF CREDIT. Prior to the Effective Time, the Company shall
repay in full any outstanding amounts borrowed under its line of credit with the
Independent Bankers' Bank of Florida, terminate such line of credit, satisfy all
of its obligations under such line of credit and obtain release and return of
the stock of the Bank pledged to secure such line of credit.
6.18 LEASES. (a) Within 30 days after the date of this Agreement, the
Company shall deliver to the Acquiror an estoppel certificate for each lease of
real property to which it is a party, each in a form reasonably satisfactory to
the Acquiror.
(b) The Company shall consult with the Acquiror in connection with any
discussions it has with third parties concerning the Company's lease of real
property in Palm Beach Gardens, Florida and shall use reasonable best efforts to
accommodate the views of the Acquiror in connection with such discussions and
any decisions relating to such property.
6.19 ADMIRALTY INSURANCE SERVICES, L.L.C. Within 30 days after the date
of this Agreement, the Company shall cause to be terminated all of the
obligations of and restrictions on the Company and each of its Subsidiaries
under the Operating Agreement relating to Admiralty Insurance Services, L.L.C.,
dated as of March 31, 2000, by and among ▇▇▇▇ Insurance Consultants, Inc. and
the Company (the "OPERATING AGREEMENT"), and provide for the change of the name
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of Admiralty Insurance Services, L.L.C., all in a manner reasonably satisfactory
to the Acquiror.
ARTICLE VII
CONDITIONS TO CONSUMMATION OF THE MERGER
7.01 CONDITIONS TO EACH PARTY'S OBLIGATION TO EFFECT THE MERGER. The
obligation of each of the Acquiror, RBC Centura, Acquiror Sub and the Company to
consummate the Merger is subject to the fulfillment or written waiver by the
Acquiror and the Company prior to the Effective Time of each of the following
conditions:
(a) STOCKHOLDER APPROVAL. This Agreement shall have been duly approved
and adopted and a plan of merger shall have been duly approved by the
affirmative vote of the holders of the requisite number of the outstanding
shares of Company Common Stock entitled to vote thereon in accordance with
applicable law and the Company's Constitutive Documents.
(b) GOVERNMENTAL AND REGULATORY CONSENTS. All approvals and
authorizations of, filings and registrations with, and notifications to, all
Governmental Authorities required for the consummation of the Merger, and for
the prevention of any termination of any material right, privilege, license or
agreement of either the Acquiror or the Company or their respective
Subsidiaries, shall have been obtained or made and shall be in full force and
effect and all waiting periods required by law shall have expired; PROVIDED,
HOWEVER, that none of the preceding shall be deemed obtained or made if it shall
be subject to any condition or restriction the effect of which, together with
any other such conditions or restrictions, would be reasonably expected to have
a Material Adverse Effect on the Surviving Corporation or the Acquiror or its
operations in the United States after the Effective Time.
(c) THIRD PARTY CONSENTS. All consents or approvals of all persons,
other than Governmental Authorities, required for or in connection with the
execution, delivery and performance of this Agreement and the consummation of
the Merger shall have been obtained and shall be in full force and effect,
unless the failure to obtain any such consent or approval is not reasonably
likely to have, individually or in the aggregate, a Material Adverse Effect on
the Surviving Corporation.
(d) NO INJUNCTION. No Governmental Authority of competent jurisdiction
shall have enacted, issued, promulgated, enforced or entered any statute, rule,
regulation, judgment, decree, injunction or other order (whether temporary,
preliminary or permanent) which is in effect and prohibits consummation of the
transactions contemplated by this Agreement.
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7.02 CONDITIONS TO OBLIGATION OF THE COMPANY. The obligation of the
Company to consummate the Merger is also subject to the fulfillment or written
waiver by the Company prior to the Effective Time of each of the following
conditions:
(a) REPRESENTATIONS AND WARRANTIES. The representations and warranties
of the Acquiror set forth in this Agreement shall be true and correct as of the
date of this Agreement and as of the Closing Date as though made on and as of
the Closing Date (except that representations and warranties that by their terms
speak as of the date of this Agreement or some other date shall be true and
correct only as of such date), and the Company shall have received a
certificate, dated the Closing Date, signed on behalf of the Acquiror by a
senior officer of the Acquiror to such effect.
(b) PERFORMANCE OF OBLIGATIONS OF THE ACQUIROR. The Acquiror shall have
performed in all material respects all obligations required to be performed by
it under this Agreement at or prior to the Effective Time, and the Company shall
have received a certificate, dated the Closing Date, signed on behalf of the
Acquiror by a senior officer of the Acquiror to such effect.
7.03 CONDITIONS TO OBLIGATION OF THE ACQUIROR. The obligations of the
Acquiror, RBC Centura and Acquiror Sub to consummate the Merger are also subject
to the fulfillment or written waiver by the Acquiror prior to the Effective Time
of each of the following conditions:
(a) REPRESENTATIONS AND WARRANTIES. Subject to the standard set forth
in Section 5.02, the representations and warranties of the Company set forth in
this Agreement shall be true and correct as of the date of this Agreement and as
of the Closing Date as though made on and as of the Closing Date (except that
representations and warranties that by their terms speak as of the date of this
Agreement or some other date shall be true and correct only as of such date),
and the Acquiror shall have received a certificate, dated the Closing Date,
signed on behalf of the Company by the Chief Executive Officer and the Chief
Financial Officer of the Company to such effect.
(b) PERFORMANCE OF OBLIGATIONS OF THE COMPANY. The Company shall have
performed in all material respects all obligations required to be performed by
it under this Agreement (provided that the Company's obligations pursuant to
Section 6.17 and Section 6.19 shall have been performed in full) at or prior to
the Effective Time, and the Acquiror shall have received a certificate, dated
the Closing Date, signed on behalf of the Company by the Chief Executive Officer
and the Chief Financial Officer of the Company to such effect.
(c) EMPLOYMENT AGREEMENTS. The Employment Agreements of (1) each
individual comprising Group A as set forth in ANNEX A and (2) at least 15 of the
17 individuals comprising Group B as set forth in ANNEX A shall be in full force
and effect and shall not have been amended and, in each case, such individual
shall still be employed by the Company or a Subsidiary of the Company, and shall
not have committed an act or omission that would permit their termination for
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"cause" thereunder; PROVIDED, HOWEVER, that this condition shall not be deemed
unsatisfied as a result of the death or disability of one of the individuals
named in Group A as set forth in ANNEX A or any or all of the individuals named
in Group B as set forth in ANNEX A.
(d) ENVIRONMENTAL ASSESSMENTS. The Company shall have caused ASTM 1527
"Phase I" and/or "Phase II" environmental site assessment reports reasonably
requested by the Acquiror to be prepared on up to two properties for such of the
real properties owned, operated or controlled by the Company or any of the
Company's Subsidiaries and identified by the Acquiror in a form and substance
reasonably acceptable to the Acquiror and, as a result of such assessments, no
conditions shall be revealed or discovered that would be reasonably likely,
individually or in the aggregate, to have a Material Adverse Effect on the
Company.
ARTICLE VIII
TERMINATION
8.01 TERMINATION. This Agreement may be terminated and the Merger may
be abandoned:
(a) MUTUAL CONSENT. At any time prior to the Effective Time, by the
mutual consent of the Acquiror and the Company, if the Board of Directors of
each so determines by vote of a majority of the members of its entire Board.
(b) BREACH. At any time prior to the Effective Time, by the Acquiror or
the Company (and with written notice to the other party), in each case if its
Board of Directors so determines by vote of a majority of the members of its
entire Board, in the event of either: (1) a breach by the other party of any
representation or warranty contained herein, which breach cannot be or has not
been cured within 30 days after the giving of written notice to the breaching
party of such breach; or (2) a breach by the other party of any of the covenants
or agreements contained herein, which breach cannot be or has not been cured
within 30 days after the giving of written notice to the breaching party of such
breach and which breach, individually or in the aggregate with other such
breaches, would cause the conditions set forth in Section 7.03(a) or (b), in the
case of a breach or breaches by the Company, or Section 7.02(a) or (b), in the
case of a breach or breaches by the Acquiror, not to be satisfied or would
reasonably be expected to prevent, materially delay or materially impair the
ability of the Company or the Acquiror to consummate the Merger and the other
transactions contemplated by this Agreement.
(c) DELAY. At any time prior to the Effective Time, by the Acquiror or
the Company (and with written notice to the other party), in each case if its
Board of Directors so determines by vote of a majority of the members of its
entire Board, in the event that the Merger is not consummated by March 31, 2003
(the "PERMITTED TERMINATION DATE"), except to the extent that the failure of the
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Merger then to be consummated arises out of or results from the action or
inaction of the party seeking to terminate pursuant to this Section 8.01(c).
(d) NO APPROVAL. By the Company or the Acquiror (and with written
notice to the other party), in each case if its Board of Directors so determines
by a vote of a majority of the members of its entire Board, in the event the
approval of any Governmental Authority required for consummation of the Merger
and the other transactions contemplated by this Agreement shall have been denied
by final nonappealable action of such Governmental Authority.
(e) FAILURE TO RECOMMEND, ETC. By the Acquiror (and with written notice
to the other party), if (i) at any time prior to the receipt of the approval of
the Company's stockholders contemplated by Section 7.01(a), the Company Board
shall not recommend that the stockholders give such approval, or (ii) the
Company Board takes any of the actions described in clause (ii) or (iii) of the
proviso to Section 6.06.
(f) SUPERIOR PROPOSAL. At any time prior to the adoption of this
Agreement by the Company's stockholders contemplated by Section 7.01(a), by the
Company, if the Company Board so determines by vote of a majority of the members
of its entire Company Board if (1) the Company is not in breach of any material
term of this Agreement, (2) the Company Board authorizes the Company, subject to
complying with the terms of this Agreement, to enter into a definitive written
agreement concerning a transaction that constitutes a Superior Proposal and (3)
the Company notifies the Acquiror in writing that it intends to enter into such
an agreement as soon as practicable upon termination of this Agreement,
attaching the most current version of such agreement to such notice. The Company
agrees to notify the Acquiror promptly if it shall determine not to enter into
the written agreement referred to in its notification at any time after giving
such notification.
(g) ADMIRALTY INSURANCE SERVICES. By the Acquiror, if the Operating
Agreement shall not have been terminated within 30 days after the date of this
Agreement.
8.02 EFFECT OF TERMINATION AND ABANDONMENT. In the event of termination
of this Agreement and the abandonment of the Merger pursuant to this Article
VIII, no party to this Agreement shall have any liability or further obligation
to any other party hereunder except (a) as set forth in Sections 8.03 and 9.01
and (b) that termination will not relieve a breaching party from liability for
any willful breach of this Agreement giving rise to such termination.
8.03 TERMINATION FEE. (a) In addition to any other rights that the
Acquiror has under this Agreement and/or otherwise, the Company shall pay to the
Acquiror $6,000,000 (the "TERMINATION FEE") (it being understood that such fee
is not intended as liquidated damages), if either:
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(i) this Agreement is terminated by the Acquiror pursuant to (A)
Section 8.01(b) with respect to a breach of Section 6.02 or
6.06 on the part of the Company or (B) Section 8.01(e),
PROVIDED, HOWEVER, that the Acquiror shall not be in material
breach of any of its covenants or agreements contained in this
Agreement such that the Company shall be entitled to terminate
this Agreement pursuant to Section 8.01(b); or
(ii) this Agreement is terminated by the Company pursuant to
Section 8.01(f); or
(iii) a Fee Payment Event shall have occurred prior to the
occurrence of a Fee Termination Event; PROVIDED that the
Company has not previously paid a Termination Fee to the
Acquiror pursuant to clause (i) or (ii) of this Section
8.03(a).
(b) Each of the following shall be a "FEE TERMINATION EVENT": (i) the
Effective Time; (ii) termination of this Agreement in accordance with its terms,
other than a Listed Termination, if such termination occurs prior to the
occurrence of a Tolling Event; or (iii) the passage of eighteen (18) months
after termination of this Agreement if such termination follows the occurrence
of a Tolling Event or is a Listed Termination. The term "LISTED TERMINATION"
shall mean a termination by the Acquiror pursuant to Section 8.01(b) (unless the
breach giving rise to such right of termination is wholly not volitional on the
part of Company, its Affiliates or representatives).
(c) The term "TOLLING EVENT" shall mean any of the following events or
transactions occurring on or after the date hereof:
(i) The Company or any of its Significant Subsidiaries, without
having received the Acquiror's prior written consent, shall
have entered into an agreement to engage in an Acquisition
Transaction with any person other than the Acquiror or any of
its Subsidiaries (each an "ACQUIROR SUBSIDIARY"), or the
Company Board shall have recommended that the stockholders of
the Company approve or accept any Acquisition Transaction with
any person other than the Acquiror or an Acquiror Subsidiary.
(ii) Any person other than the Acquiror or any Acquiror Subsidiary
shall have acquired beneficial ownership or the right to
acquire beneficial ownership of 20% or more of the outstanding
shares of Company Common Stock (the term "BENEFICIAL
OWNERSHIP" for purposes of this Agreement having the meaning
assigned thereto in Section 13(d) of the Exchange Act, and the
rules and regulations thereunder);
(iii) The stockholders of the Company shall have voted and failed to
approve this Agreement at a meeting which has been held for
that purpose or any adjournment or postponement thereof, or
such meeting shall not have been held or shall have been
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canceled prior to termination of this Agreement if, prior to
such meeting (or if such meeting shall not have been held or
shall have been canceled, prior to such termination), it shall
have been publicly announced that any person (other than the
Acquiror or any of its Subsidiaries) shall have made, or
disclosed an intention to make, a bona fide proposal to engage
in an Acquisition Transaction;
(iv) The Company Board shall have withdrawn, modified or qualified
(or publicly announced its intention to withdraw, modify or
qualify) in any manner adverse in any respect to the Acquiror
its recommendation that the stockholders of the Company
approve the transactions contemplated by this Agreement in
anticipation of engaging in an Acquisition Transaction, or
Company shall have authorized, recommended, proposed (or
publicly announced its intention to authorize, recommend or
propose) an agreement to engage in an Acquisition Transaction
with any person other than the Acquiror or a Acquiror
Subsidiary;
(v) Any person other than the Acquiror or any Acquiror Subsidiary
shall have filed with the SEC a registration statement or
tender offer materials with respect to a potential exchange or
tender offer that would constitute an Acquisition Transaction
(or filed a preliminary proxy statement with the SEC with
respect to a potential vote by its stockholders to approve the
issuance of shares to be offered in such an exchange offer);
(vi) The Company shall have willfully breached any covenant or
obligation contained in this Agreement after an overture is
made by a third party to Company or its stockholders to engage
in an Acquisition Transaction, and following such breach the
Acquiror would be entitled to terminate this Agreement
(whether immediately or after the giving of notice or passage
of time or both); or
(vii) Any person other than the Acquiror or any Acquiror Subsidiary,
without Acquiror's prior written consent, shall have filed an
application or notice with any regulatory or antitrust
authority regarding an Acquisition Transaction.
(d) The term "FEE PAYMENT EVENT" shall mean any of the following events
or transactions occurring after the date hereof:
(i) The acquisition by any person (other than the Acquiror or any
Acquiror Subsidiary) of beneficial ownership of 25% or more of
the then outstanding Company Common Stock; or
(ii) The occurrence of the Tolling Event described in clause (i) of
the definition of the term "Tolling Event", except that the
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percentage referred to in clause (z) of the definition of the
term "Acquisition Transaction" shall be 25%.
(e) Any payment required to be made under Section 8.03(a)(i) shall be
payable within three business days following such termination; any payment
required to be made under Section 8.03(a)(ii) shall be made prior to or
contemporaneously with such termination; and any payment required to be made
under Section 8.03(a)(iii) shall be payable within three business days following
the Fee Payment Event. In any case such payment shall be made, without setoff,
by wire transfer in immediately available funds, to an account specified by the
Acquiror.
(f) The Company acknowledges that the agreements contained in this
Section 8.03 are an integral part of the transactions contemplated by this
Agreement and are cumulative with, and not intended to limit, other remedies
that may be available, and that, without these agreements, the Acquiror would
not enter into this Agreement; accordingly, if the Company fails promptly to pay
any amount due pursuant to this Section 8.03, and, in order to obtain such
payment, the Acquiror commences a suit which results in a judgment against the
Company for the payment set forth in this Section 8.03, the Company shall pay
the Acquiror's costs and expenses (including attorneys' fees) in connection with
such suit, together with interest on any amount due pursuant to this Section
8.03 from the date such amount becomes payable until the date of such payment at
the prime rate of Citibank N.A. in effect on the date such payment was required
to be made plus two (2) percent.
(g) The Company shall notify the Acquiror promptly in writing of the
occurrence of any Tolling Event or Fee Payment Event, it being understood that
the giving of such notice by the Company shall not be a condition to the
Acquiror's rights pursuant to this Section 8.03.
ARTICLE IX
MISCELLANEOUS
9.01 SURVIVAL. No representations, warranties, agreements and covenants
contained in this Agreement (a) other than those contained in Sections 6.05(b),
8.02, and 8.03 and in this Article IX, shall survive the termination of this
Agreement if this Agreement is terminated prior to the Effective Time or (b)
other than those contained in Section 6.10 and in this Article IX, shall survive
the Effective Time.
9.02 WAIVER; AMENDMENT. Prior to the Effective Time, any provision of
this Agreement may be (a) waived by the party benefitted by the provision, or
(b) amended or modified at any time, by an agreement in writing executed by both
parties, except that, after adoption of this Agreement by the stockholders of
the Company, no amendment may be made which under applicable law requires
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further approval of such stockholders without obtaining such required further
approval.
9.03 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to constitute an original.
9.04 GOVERNING LAW. This Agreement shall be governed by, and
interpreted in accordance with, the laws of the State of New York applicable to
contracts made and to be performed entirely within such State.
9.05 EXPENSES. Subject to Section 8.03, each party hereto will bear all
expenses incurred by it in connection with this Agreement and the transactions
contemplated hereby, except that printing and postage expenses and any other
fees and expenses related to the Proxy Statement shall be shared equally between
the Company and the Acquiror. The Acquiror shall be entitled to select a
printing company of its choice.
9.06 NOTICES. All notices, requests and other communications hereunder
to a party shall be in writing and shall be deemed given (a) on the date of
delivery, if personally delivered or telecopied (with confirmation), (b) on the
first business day following the date of dispatch, if delivered by a recognized
next-day courier service, or (c) on the third business day following the date of
mailing, if mailed by registered or certified mail (return receipt requested),
in each case to such party at its address or telecopy number set forth below or
such other address or numbers as such party may specify by notice to the parties
hereto.
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If to the Company, to:
Admiralty Bancorp, Inc.
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to:
▇▇▇▇ ▇. ▇▇▇▇▇▇, P.A.
Broad and ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
If to the Acquiror, RBC Centura or Acquiror Sub, to:
Royal Bank of Canada
▇▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ Tower
Royal Bank Plaza
Toronto, Ontario
Canada M5J 2J5
Attention: W. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
9.07 ENTIRE UNDERSTANDING; NO THIRD-PARTY BENEFICIARIES. This Agreement
(together with the Disclosure Schedule, the Exhibits and the Annex hereto)
represents the entire understanding of the parties hereto with reference to all
the matters encompassed or contemplated herein or agreed to in contemplation
hereof and this Agreement supersedes any and all other oral or written
agreements heretofore made. Except for Section 6.10, insofar as such Section
expressly provides certain rights to the Indemnified Parties named therein,
nothing in this Agreement, expressed or implied, is intended to confer upon any
person, other than the parties hereto or their respective successors and
permitted assigns, any rights, remedies, obligations or liabilities under or by
reason of this Agreement.
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9.08 ASSIGNMENT. Neither this Agreement nor any of the rights,
interests or obligations hereunder shall be assigned or delegated, in whole or
in part (except by operation of law), by any of the parties hereto without the
prior written consent of each other party hereto, except that the Acquiror, RBC
Centura and Acquiror Sub may assign or delegate in their sole discretion any or
all of their rights, interests or obligations under this Agreement to any direct
or indirect, wholly owned subsidiary of the Acquiror, but no such assignment
shall relieve the Acquiror of any of its obligations hereunder. Subject to the
preceding sentence, this Agreement shall be binding upon, inure to the benefit
of and be enforceable by, the parties hereto and their respective successors and
assigns.
* * *
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IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed as of the day and year first above written.
ADMIRALTY BANCORP, INC.
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇
----------------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇
Title: President and CEO
ROYAL BANK OF CANADA
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
----------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice Chairman
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice Chairman and CFO
RBC CENTURA BANKS, INC.
By: /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
----------------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: President
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