PREFERRED STOCK PURCHASE AGREEMENT
DATED AS OF SEPTEMBER 26, 1996
BETWEEN
FIRST INTERSTATE BANCSYSTEM OF MONTANA, INC.
AND
FIRST SECURITY CORPORATION
$20,000,000 NONCUMULATIVE
PERPETUAL PREFERRED STOCK
FIRST INTERSTATE BANCSYSTEM OF MONTANA, INC.
$20,000,000 NONCUMULATIVE
PERPETUAL PREFERRED STOCK
PREFERRED STOCK PURCHASE AGREEMENT
THIS PREFERRED STOCK PURCHASE AGREEMENT (this "Agreement") is made as
of September 26, 1996, between FIRST INTERSTATE BANCSYSTEM OF MONTANA, INC., a
Montana corporation (the "Company"), and the Persons listed on the Schedule of
Purchasers attached (collectively referred to as the "Purchasers" and
individually as a "Purchaser"). Except as otherwise indicated, capitalized
terms are defined in Section 7.
R E C I T A L S
A. The Company has entered into a Stock Purchase Agreement (the "Stock
Purchase Agreement") dated as of May 24, 1996 by and among the Company and ▇▇▇▇▇
Fargo & Company ("▇▇▇▇▇ Fargo") pursuant to which ▇▇▇▇▇ Fargo has agreed to
sell, and the Company has agreed to purchase, all of the issued and outstanding
capital stock of First Interstate Bank of Montana, N.A. (the "Montana Bank") and
First Interstate Bank of Wyoming, N.A. (the "Wyoming Bank") (the Montana Bank
and the Wyoming Bank are collectively referred to as the "Banks").
B. In order to finance a portion of the purchase price to be paid by the
Company for the acquisition of all of the issued and outstanding capital stock
of the Banks (the "Acquisition"), the Company has agreed to sell, and the
Purchasers have agreed to purchase, the Company's Noncumulative Perpetual
Preferred Stock, on the terms and conditions set forth herein.
AUTHORIZATION.
AUTHORIZATION OF THE PREFERRED STOCK. The Company shall authorize
the issuance and sale to the Purchasers of 20,000 shares of its Noncumulative
Perpetual Preferred Stock, no par value (the "Preferred Stock"), having the
rights and preferences set forth in the Certificate of Designation attached as
EXHIBIT A (the Certificate of Designation").
PURCHASE AND SALE OF THE PREFERRED STOCK. At the Closing the
Company shall sell to each Purchaser and, subject to the terms and conditions
set forth herein, each Purchaser shall purchase from the Company the number of
shares of Preferred Stock set forth opposite such Purchaser's name on the
Schedule of Purchasers at a price of $1,000 per share. The sale of Preferred
Stock to each Purchaser shall constitute a separate sale hereunder.
THE CLOSING. The closing of the separate purchases and sales of
the Preferred Stock (the "Closing") shall take place at the offices of Holland &
▇▇▇▇, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ at 10:00 a.m. after
the date on which the conditions set forth in Section 2 of this Agreement have
been met and simultaneously with the closing of the transactions contemplated by
the Stock Purchase Agreement, or at such other place or on such other date as
may be mutually agreeable to the Company and each Purchaser (the "Closing
Date"), but in no event later than December 31, 1996 (the "Outside Closing
Date"). At the Closing, the Company shall deliver to each Purchaser stock
certificates evidencing the Preferred Stock to be
purchased by each Purchaser, registered in such Purchaser's name, upon payment
of the purchase price therefor by a cashier's or certified check, or by wire
transfer of immediately available funds to the Company's account in accordance
with the following wire transfer instructions, in the amount set forth opposite
such Purchaser's name on the Schedule of Purchasers:
ABA No. ▇▇▇▇▇▇▇▇▇
First Interstate Bank of Commerce, Billings, MT
Acct. No. 1101357554
Account Name: First Interstate BancSystem of Montana, Inc.
2. CONDITIONS PRECEDENT TO OBLIGATIONS TO CLOSE.
2.1. CONDITIONS TO EACH PARTY'S OBLIGATION TO EFFECT THE
PURCHASE AND SALE OF THE PREFERRED STOCK. The respective obligation of the
Company and each Purchaser to consummate the purchase and sale of the Preferred
Stock is subject to the fulfillment, or written waiver by the Company and each
Purchaser, of each of the following conditions:
2.1.1 GOVERNMENTAL AND REGULATORY CONSENTS. The approval
of (i) the Federal Reserve Board ("FRB") of the issuance of the Preferred Stock
on the terms and conditions set forth herein, (ii) the FRB of the inclusion of
the Preferred Stock in the Company's Tier 1 Capital, and (iii) the FRB and the
Wyoming state banking commissioner of the Acquisition, shall have been obtained
and shall be in full force and effect and all related waiting periods, if any,
shall have expired.
2.1.2 THIRD PARTY CONSENTS. All consents or approvals
of all Persons (other than those set forth in Section 2.1.1) required for or in
connection with the execution, delivery and performance of this Agreement and
the consummation of the purchase and sale of the Preferred Stock shall have been
obtained and shall be in full force and effect, unless the failure to obtain any
such consent or approval would not have a Material Adverse Effect.
2.1.3 PURCHASE PERMITTED BY APPLICABLE LAWS. No United
States or state court or other Governmental Entity 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.
____________________2.1.4 CONSUMMATION OF THE ACQUISITION. All conditions to
the Acquisition shall have been satisfied or waived on or prior to December 31,
1996.
2.2. CONDITIONS TO OBLIGATION OF EACH PURCHASER. The
obligation of each Purchaser to consummate the purchase of the Preferred Stock
is also subject to the fulfillment, or written waiver by such Purchaser, of each
of the following conditions:
2.2.1 REPRESENTATIONS AND WARRANTIES. The
representations and warranties of the Company set forth in Section 3 of this
Agreement shall be true and correct in all material respects 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 in all material respects
2
as of such date), and the Purchasers shall have received a certificate, dated as
of the Closing Date, signed on behalf of the Company by an Executive Officer of
the Company to such effect.
2.2.2 CERTIFICATE OF DESIGNATION. The Company shall have
duly adopted, executed and filed with the Secretary of State of Montana Articles
of Amendment establishing the terms and the relative rights and preferences of
the Preferred Stock as set forth in the Certificate of Designation ("Articles of
Amendment"). The Articles of Amendment shall be in full force and effect on the
Closing Date and shall not have been amended or modified.
2.2.3 BLUE SKY CLEARANCES. The Company shall have made
all filings under applicable state securities laws necessary to consummate the
issuance of the Preferred Stock pursuant to this Agreement in compliance with
such laws.
2.2.4 CLOSING DOCUMENTS. The Company shall have
delivered to each Purchaser all of the following documents:
(i) an Officer's Certificate, dated the date of
the Closing, stating that the conditions specified in Sections 2.1 and
2.2.2 through 2.2.3, inclusive, have been fully satisfied;
(ii) certified copies of the resolutions duly
adopted by the Company's board of directors authorizing the execution,
delivery and performance of this Agreement and each of the other
agreements contemplated hereby, the filing of the Articles of
Amendment, the issuance and sale of the Preferred Stock, and the
consummation of all other transactions contemplated by this Agreement;
(iii) certified copies of the Articles of
Incorporation, the Articles of Amendment and the Company's bylaws,
each as in effect at the Closing;
(iv) copies of all third party and governmental
consents, approvals and filings required in connection with the
consummation of the transactions hereunder.
2.2.5 PROCEEDINGS. All corporate and other proceedings
taken or required to be taken in connection with the transactions contemplated
hereby to be consummated at or prior to the Closing and all documents incident
thereto shall be reasonably satisfactory in form and substance to each
Purchaser.
2.2.6 EXPENSES. The Company shall have reimbursed the
Purchasers for the fees and expenses of their special counsel as provided in
Section 8.5.
2.2.7 COMPLIANCE WITH APPLICABLE LAWS. The purchase of
Preferred Stock by each Purchaser shall not be prohibited by any applicable law
or governmental regulation, shall not subject any Purchaser to any penalty,
liability or, in such Purchaser's reasonable judgment, other onerous condition
under or pursuant to any applicable law or governmental regulation, and shall be
permitted by laws and regulations of the jurisdictions to
3
which such Purchaser is subject.
2.2.8 DELIVERY OF STOCK CERTIFICATES. The Company shall
have delivered to each Purchaser stock certificates for the number of shares of
Preferred Stock set forth opposite such Purchaser's name on the Schedule of
Purchasers.
2.2.9 NO MATERIAL ADVERSE CHANGE. Between the date of
this Agreement and the Closing, there shall not have been any material adverse
change in the business or financial condition of the Company.
2.2.10 PERFORMANCE OF OBLIGATIONS. The Company shall
have performed all other obligations required by this Agreement to be performed
by it prior to or at the Closing.
2.3. CONDITIONS TO OBLIGATION OF THE COMPANY. The obligation
of the Company to consummate the sale of the Preferred Stock is also subject to
the fulfillment, or written waiver by the Company, of the following conditions:
2.3.1 PROOF EACH PURCHASER IS AN INSTITUTIONAL INVESTOR.
Each Purchaser shall have provided the Company with any documentation reasonably
requested by the Company establishing that such Purchaser is an Institutional
Investor.
3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. As a material
inducement to the Purchasers to enter into this Agreement and purchase the
Preferred Stock, the Company represents, warrants and covenants that:
3.1. ORGANIZATION; BANK HOLDING COMPANY REGISTRATION. The
Company has been duly organized and is a validly existing corporation in good
standing under the laws of the State of Montana, with its chief executive
offices located in Billings, Montana. The Company is a bank holding company
registered under the Bank Holding Company Act of 1956, as amended.
3.2. CORPORATE POWER; AUTHORIZATION. The Company has all
requisite corporate power and authority to execute, deliver and perform its
obligations under this Agreement. The execution, delivery and performance of
this Agreement have been duly and validly authorized by the Company, and this
Agreement has been duly executed by the Company and constitutes a valid and
binding obligation of the Company, enforceable against the Company in accordance
with its terms, except as such enforceability may be limited by bankruptcy,
insolvency, reorganization or similar laws affecting the rights of creditors
generally and subject to general principles of equity. The issuance of the
Preferred Stock on the terms and conditions contained herein has been duly and
validly authorized by the Company.
3.3. NO CONFLICT. The execution, delivery and performance
of this Agreement does not and will not violate, conflict with or constitute a
default under any provision of the charter documents of the Company or any
regulation, order, arbitration award, judgment or decree or any contract to
which the Company is a party or by which its property or assets are bound.
4
3.4. CAPITALIZATION. The Company's authorized capital stock
consists of 5,000,000 shares of common stock, no par value, approximately
1,981,489 shares of which are outstanding, and 100,000 shares of preferred
stock, none of which are outstanding prior to the issuance of the Preferred
Stock. All of the issued and outstanding shares of capital stock of the Company
have been duly and validly authorized and issued and are fully paid and
nonassessable. Except as set forth on Schedule 3.4, there are no options,
warrants, agreements, contracts or other rights in existence to purchase or
acquire from the Company any shares of the capital stock of the Company. There
are no preemptive rights to purchase securities of the Company.
3.5. DISCLOSURE. Neither this Stock Purchase Agreement, the
Offering Memorandum nor any of the schedules, attachments, written statements,
documents, certificates or other items prepared and supplied to any Purchaser by
or on behalf of the Company with respect to the transactions contemplated hereby
contain any untrue statement of a material fact or omit a material fact
necessary to make each statement contained herein or therein not misleading.
There is no fact which the Company has not disclosed to the Purchasers in
writing and of which any of its Executive Officers or directors is aware (other
than matters of a general economic nature) and which has had or would reasonably
be anticipated to have a Material Adverse Effect.
3.6. FINANCIAL STATEMENTS. The Company has furnished to the
Purchasers its consolidated financial statements for its three most recent
fiscal years. (Such financial statements are collectively referred to as the
"Reports".) The consolidated financial statements and related notes included in
the Reports present fairly the consolidated financial position of the Company
and its Subsidiaries at the dates of the balance sheets included therein and the
consolidated results of their operations for the periods covered and were
prepared in conformity with GAAP consistently applied, except as may be noted
therein. Since January 1, 1996, there has been no change in the financial
condition or business of the Company or its Subsidiaries, taken as a whole,
which would constitute a Material Adverse Effect.
3.7. COMPLIANCE WITH LAW. Except where the failure to comply
would not have a Material Adverse Effect, the Company and its Subsidiaries are
in compliance, in the conduct of their respective businesses, 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, without limitation, the Fair
Lending Laws.
3.8. GOVERNMENTAL CONSENTS. Other than the consents
described in Section 2.1.1 and the filing of the Articles of Amendment with the
Montana Secretary of State, no notices, reports or other filings are required to
be made by the Company with, nor are any consents, registrations, approvals,
permits or authorizations required to be obtained by the Company from, any
governmental or regulatory authority, agency, court, commission or other entity
("Governmental Entities"), in connection with the execution, delivery or
performance of this Agreement by the Company and the consummation by the Company
of the transactions contemplated hereby.
3.9. LITIGATION. There are no criminal or administrative
investigations or hearings of, before or by any Governmental Entity, or civil,
criminal or administrative actions, suits, claims or proceedings of, before or
by any person or entity (including any Governmental
5
Entity) pending or, to the knowledge of the Company's Executive Officers,
threatened, against the Company or any of its Subsidiaries (including, without
limitation, under any of the Fair Lending Laws); and neither the Company nor any
of its Subsidiaries is a party to or is subject to any order, decree, agreement,
memorandum of understanding or similar arrangement with, or similar submission
to, any Governmental Entity charged with the supervision or regulation of
depository institutions or engaged in the insurance of deposits (including,
without limitation, the Federal Deposit Insurance Corporation (the "FDIC") or
the supervision or regulation of it or any of its Subsidiaries, and neither the
Company nor any of its Subsidiaries has been advised by any such Governmental
Entity that such Governmental Entity is contemplating issuing or requesting (or
is considering the appropriateness of issuing or requesting) any such order,
decree, agreement, memorandum of understanding, or similar submission.
3.10. TAXES. The Company has timely filed, for itself and on
behalf of its Subsidiaries, all tax returns reasonably deemed by the Company to
be required and has paid all Taxes due, payable or owed for all periods for
which returns are required to be filed, other than Taxes contested in good
faith. Except as set forth on Schedule 3.10, (a) no governmental entity has,
during the past three years, examined or is in the process of examining any tax
returns of either the Company or its Subsidiaries, and (b) no governmental
entity has proposed any deficiency, assessment, or claim for Taxes against
either the Company or its Subsidiaries.
3.11. TITLE TO ASSETS. Except as disclosed or reserved
against in the Call Reports and except for security interests in securities of
the Company's Subsidiaries which are banks granted by such Subsidiaries to
deposit customers of such Subsidiaries in connection with repurchase agreements
entered into by such Subsidiaries in the ordinary course of business with their
deposit customers, the Company and its Subsidiaries have good and marketable
title, free and clear of all liens, claims, security interests or other
encumbrances (except those encumbrances which do not interfere in any material
respect with the use of the property or the conduct of the business of the
Company and its Subsidiaries) to their properties and assets, tangible or
intangible, including all assets identified in the Latest Balance Sheet (except
to the extent such properties or assets have been disposed of in the ordinary
course of the business of the Company or its Subsidiaries).
3.12. REQUIRED LICENSES. Except where such failure would not
have a Material Adverse Effect, the Company and its Subsidiaries have all
permits, licenses, certificates of authority, orders and approvals of, and have
made all filings, applications and registrations with, Governmental Entities,
that are required in order to permit them to carry on their respective
businesses as presently conducted. Neither the Company nor any of its
Subsidiaries has received notification or communication from any Governmental
Entity (including any bank, insurance and securities regulatory authorities) or
the staff thereof, which remains in effect (a) asserting that the Company or any
of its Subsidiaries is not in compliance with any of the statutes, regulations
or ordinances that such Governmental Entity enforces; (b) threatening to revoke
any license, franchise, permit or governmental authorization of the Company or
any of its Subsidiaries; or (c) threatening or contemplating revocation or
limitation of, or which would have the effect of revoking or limiting, FDIC
deposit insurance of the Company's Subsidiaries which are banks.
3.13. EMPLOYEE BENEFITS. (a) The Company and each of its
Subsidiaries and each ERISA Affiliate have fulfilled all of their obligations in
all material respects under ERISA and the Code with respect to each Plan,
including but not limited to all minimum funding
6
standards, all reporting and disclosure requirements and, where applicable, the
continuation coverage requirements in Part 6 of Title I of ERISA and Section
4980B of the Code; and they are in compliance in all material respects with the
presently applicable provisions of ERISA and the Code; and they have not
incurred any liability to the PBGC (other than premiums due and not delinquent
under Section 4007 of ERISA) or a Plan under ERISA. The representations and
warranties set forth in this Section 3.13(a) (other than as to the incurrence of
any liability to a Plan under ERISA) are made to the best of the Company's
knowledge to the extent they apply to any Multiemployer Plan.
(b) Neither the Company nor any of its Subsidiaries nor any ERISA
Affiliate has incurred any withdrawal liability with respect to any
Multiemployer Plan under Title IV of ERISA, and no such liability is expected to
be incurred.
(c) Neither the Company nor any of its Subsidiaries nor any ERISA
Affiliate has incurred any unpaid liability with respect to any Multiemployer
Plan under Title IV of ERISA, and no such liability is expected to be incurred.
3.14. PRIVATE OFFERING BY THE COMPANY. Neither the Company
nor anyone acting on its behalf has or will take any action that would cause the
loss of exemption for the offer and sale of the Preferred Stock from the
registration requirements of the Securities Act.
3.15. USE OF PROCEEDS; MARGIN REGULATIONS. The Company shall
not, nor shall it permit any Subsidiary to, use any proceeds from the sale of
the Preferred Stock hereunder, directly or indirectly, for the purposes of
purchasing or carrying any "margin securities" within the meaning of Regulation
G or T promulgated by the Board of Governors of the Federal Reserve Board or for
the purpose of arranging for the extension of credit secured, indirectly or
indirectly, in whole or in part by collateral that includes any "margin
securities."
3.16. EXISTING INDEBTEDNESS. The Company and its Subsidiaries
do not have any material obligation or liability (whether accrued, absolute,
contingent, unliquidated or otherwise, whether or not known to the Company or
any Subsidiary, whether due or to become due and regardless of when asserted)
arising out of transactions entered into at or prior to the Closing, or any
state of facts or inaction at or prior to the Closing other than: (i)
liabilities set forth on the balance sheet (including any notes thereto) of the
Company at December 31, 1995 (the "Latest Balance Sheet"), (ii) liabilities and
obligations which have arisen after the date of the Latest Balance Sheet in the
ordinary course of business (none of which is a liability resulting from breach
of contract, breach of warranty, tort, infringement, claim or lawsuit), and
(iii) other liabilities and obligations expressly disclosed in the other
Schedules to this Agreement.
3.17. FOREIGN ASSETS CONTROL REGULATIONS. The Company
acknowledges that certain Purchasers may be foreign entities or have foreign
persons and entities as partners and that the Company may be required, and
hereby agrees, to file or cause to be filed in the future with the Internal
Revenue Service ("IRS") all statements with its United States income tax returns
required under Section 1.897-2(h) of the U.S. Treasury Regulations. To the
Company's knowledge, it is not presently a "United States real property holding
corporation" within the meaning of Section 897(c)(2) of the Code. The Company
shall use its reasonable efforts consistent with sound business practice to
avoid becoming a "United States real property holding corporation" within the
meaning of Section 897(c)(2) of the Code. In the event the
7
Company in the future becomes aware that it is a "United States real property
holding corporation" within the meaning of Section 897(c)(2) of the Code, the
Company shall promptly notify each Purchaser in writing of such fact. Promptly
after receipt of a request from a Purchaser, the Company shall prepare and
deliver to such Purchaser the statement required under U.S. Treasury Regulation
Section 1.897-2(h)(1) under the Code. The Company shall provide a notice to the
IRS with respect to such requested statement as required by U.S. Treasury
Regulation Section 1.897(2)(h)(1) under the Code. Further, the Company shall
prepare and deliver to the IRS within thirty days after the receipt of a request
from a Purchaser either or both of the following documents: (i) an affidavit in
conformance with the requirements of Section 1445(b)(3) of the Code, or (ii) a
notarized statement, executed by an officer of the Company having actual
knowledge of the facts, that the shares of the Company stock held by such
Purchaser are of a class that is regularly traded on an established securities
market, within the meaning of Section 1445(b)(6) of the Code. If the Company is
unable to provide either of the documents described in (i) or (ii) above, if
requested, it shall promptly notify such Purchaser in writing of the reasons for
such inability. Finally, upon the request of a Purchaser and without regard to
whether either document described in (i) or (ii) above has been requested, the
Company shall cooperate fully with the efforts of such Purchaser to obtain a
"qualifying statement," within the meaning of Section 1445(b)(4) of the Code, or
such other documents as would excuse a transferee of a foreign investor's
interest from withholding of income tax imposed pursuant to Section 897(a) and
1445 of the Code.
3.18. ENVIRONMENTAL MATTERS. (a) For purposes of this Section
3.18, the following terms shall have the indicated meaning:
"BUSINESS" means the business conducted by the Company and its
Subsidiaries.
"ENVIRONMENTAL LAW: means any law, regulation, order or decree
relating to Hazardous Substances or the protection of the environment.
"HAZARDOUS SUBSTANCES" means substances which are listed or classified
pursuant to any Environmental Law, including any petroleum products or
byproducts, polychlorinated biphenyls ("PCBs"), radioactive materials
or radon gas.
(b) The Company and its Subsidiaries, and all real property owned by the
Company or its Subsidiaries (collectively, "Real Property"), are in material
compliance with applicable Environmental Laws.
(c) There are no pending claims, actions, or proceedings involving the
Company or any of its Subsidiaries relating to:
(i) an asserted liability of the Company or its
Subsidiaries under any Environmental Law or the terms and conditions of any
permit, license, authority, settlement, agreement, decree or other obligation
pursuant to any Environmental Law;
(ii) the handling, storage, use, transportation, removal or
disposal of Hazardous Substances;
8
(iii) the discharge, release or emission of Hazardous
Substances from, on or under or within the Real Property into the air, water,
surface water, ground water, land surface or subsurface strata; or
(iv) personal injuries or damage to property caused by a
release of Hazardous Substances.
(d) To the knowledge of the Company's Executive Officers and the
Executive Officers of the Company's Subsidiaries, no Hazardous Substances have
been used, handled, stored, released or emitted by the Company or its
Subsidiaries at or on any Real Property except in compliance with applicable
Environmental Laws and as would not be reasonably expected to create conditions
requiring remediation under any Environmental Law.
3.19. SUBSIDIARIES. The Subsidiaries of the Company and the
percentage of issued and outstanding shares of stock of each such Subsidiary
owned of record and beneficially by the Company are as set forth in Schedule
3.19. All of the issued and outstanding shares of capital stock of the
Company's Subsidiaries have been duly and validly authorized and issued and are
fully paid and nonassessable. Except as set forth on Schedule 3.19, there are
no options, warrants, agreements, contracts or other rights in existence to
purchase or acquire from the Company any shares of the capital stock of any of
the Company's Subsidiaries. Each such Subsidiary has been duly incorporated and
is validly existing and in good standing under the laws of the state of its
incorporation. Each such Subsidiary has the corporate power and authority to
own its properties and conduct its business as presently conducted and is fully
qualified to do business as a foreign corporation in good standing in each
jurisdiction in which (a) its ownership or lease of real property or the conduct
of its business makes such qualification necessary and (b) the failure to so
qualify would have a Material Adverse Effect. Other than the Subsidiaries set
forth on Schedule 3.19, the Company owns no capital stock or other equity,
ownership or proprietary interest in any other entity. The deposit accounts of
each of the Company's Subsidiaries which are banks are insured by the Bank
Insurance Fund of the FDIC up to the maximum applicable amount in accordance
with the rules and regulations of the FDIC, and no proceedings for the
termination or revocation of such membership or insurance are pending, or, to
the knowledge of the Company, threatened.
3.20. MAINTENANCE OF INSURANCE BY SUBSIDIARIES. The Company
and the Company's Subsidiaries maintain (either in the Company's or the
Subsidiary's own name), with financially sound and reputable insurance
companies, insurance on their properties in at least such amounts and against
such risks as are usually insured against in the same general area by companies
of established repute engaged in the same or similar businesses.
3.21. SECURITIES LAWS. The Company (a) has not taken and
will not take any action that would cause the sale of the Preferred Stock to be
subject to the provisions of Section 5 of the Securities Act of 1933, as
amended, and (b) directly or indirectly, has not offered and will not offer any
interest in the Preferred Stock or any part thereof for sale to, or solicited
any such sale from, anyone other than the Purchasers and not more than 29 other
Persons.
3.22. BROKER'S FEES. No Person acting on behalf of the
Company is
9
or will be entitled to any brokerage fee, commission, finder's fee or financial
advisory fee, directly or indirectly, from the Purchasers in connection with the
transactions contemplated by this Agreement.
3.23. USE OF PROCEEDS. The Company will use the proceeds of
the sale of the Preferred Stock to purchase the stock of the Banks.
4. AFFIRMATIVE COVENANTS.
The Company covenants and agrees that:
4.1. REPORTS AND NOTICES. The Company shall provide to each
Purchaser the following reports, information and notices:
(a) ANNUAL FINANCIAL STATEMENTS. As soon as available, but in
no event later than 120 days after the end of any fiscal year of the Company
occurring while the Preferred Stock is outstanding, annual financial statements
for the Company and its Subsidiaries on a consolidated basis, prepared in
accordance with GAAP consistently applied which shall: (i) be audited by
independent certified public accountants selected by the Company ; (ii) be
accompanied by a report of such accountants containing an opinion of such
accountants; and (iii) include a balance sheet, an income statement, a statement
of cash flow, a statement of stockholders' equity, and all notes and schedules
relating thereto.
(b) QUARTERLY FINANCIAL STATEMENTS. As soon as available, but
in no event more than 60 days after the end of each of the first three quarters
in any fiscal year of the Company occurring while the Preferred Stock is
outstanding, the following financial statements of the Company and its
Subsidiaries on a consolidated basis, prepared in accordance with GAAP
consistently applied: (i) a balance sheet, (ii) an income statement, and (iii)
a statement of stockholders' equity, for such quarter and for the year to date.
4.2. MAINTENANCE OF PROPERTIES. The Company will cause its
properties and the properties of its Subsidiaries used or useful in the conduct
of the business of the Company and its Subsidiaries to be maintained and kept in
good condition, repair and working order and supplied with all necessary
facilities and equipment and will cause to be made all necessary repairs,
renewals, replacements and improvements thereof, all as in the judgment of the
Company may be necessary so that the business carried on in connection therewith
may be properly and advantageously conducted at all times; PROVIDED, HOWEVER,
that the foregoing shall not prevent the Company or a Subsidiary from
discontinuing the operation and maintenance of any of its properties if such
discontinuance is, in the judgment of the Company, desirable in the conduct of
its business and not disadvantageous in any material respect to the Purchasers.
4.3. INSURANCE. Subject to the right to sell, abandon or
otherwise dispose of any building or property whenever in the opinion of the
Company the retention thereof is inadvisable or not necessary to the business of
the Company and its Subsidiaries, the Company will at all times cause all
buildings, equipment and other insurable properties owned or operated by it or
any Subsidiary to be insured with responsible insurance carriers against loss or
damage by fire and other hazards, to the extent, and in such amounts, as is
customary among corporations owning or operating properties of a similar
character.
10
4.3. COMPLIANCE WITH LAW. The Company and its Subsidiaries
shall comply with all statutes, rules, regulations and orders of and
restrictions imposed by Governmental Entities applicable to the Company and its
Subsidiaries.
4.5. MAINTENANCE OF CORPORATE EXISTENCE. The Company shall
do or cause to be done all things necessary to preserve and keep in full force
and effect the corporate existence of the Company and its Subsidiaries.
4.6. PAYMENT OF TAXES. The Company and the Company's
Subsidiaries will pay or discharge or cause to be paid or discharge, before the
same shall become delinquent, all Taxes levied or imposed upon the Company or
any of its Subsidiaries or upon the income, profits or property of the Company
or any of the Company's Subsidiaries; PROVIDED, HOWEVER, that the Company shall
not be required to pay or discharge or cause to be paid or discharged any such
tax, assessment charge or claim whose amount, applicability or validity is being
contested in good faith by appropriate proceedings.
5. NEGATIVE COVENANTS. So long as any of the Preferred Stock
remains outstanding, the Company covenants and agrees:
5.1. NO CONFLICTING AGREEMENTS. The Company shall not become
subject to, or permit any of its Subsidiaries to become subject to, any
agreement or instrument which by its terms would (under any circumstances)
restrict the Company's right to perform the provisions of this Agreement, the
Articles of Amendment , the Articles of Incorporation or the Company's bylaws
(including, without limitation, provisions relating to payment of dividends on
the Preferred Stock).
5.2. RELATED PARTY TRANSACTIONS. The Company shall not enter
into, or permit any Subsidiary to enter into, any transaction with any of its or
any Subsidiary's officers, directors, employees or Affiliates, except for normal
employment arrangements and benefit programs on reasonable terms and except as
otherwise expressly contemplated by this Agreement.
11
6. TRANSFER OF THE PREFERRED STOCK.
6.1. PERMITTED TRANSFERS. The Preferred Stock is
transferable (a) pursuant to public offerings registered under the Securities
Act, (b) to Institutional Investors, and (c) subject to the conditions specified
in Section 6.2, pursuant to any other legally available means of transfer.
6.2. RESTRICTIONS ON TRANSFER; RIGHT OF FIRST REFUSAL. In
connection with any proposed transfer of the Preferred Stock (other than a
transfer described in Section 6.1(a) or (b)), the holder thereof shall deliver
written notice to the Company describing in reasonable detail the terms of the
proposed transfer, including without limitation the identity of the proposed
purchaser, the consideration to be paid, and the proposed date of the transfer
(the "Sale Notice"). Upon receipt of a Sale Notice, the Company shall have the
right (but shall not be obligated to exercise the right) to purchase the
Preferred Stock proposed to be transferred on the same terms and conditions
contained in the Sale Notice. The Company shall notify the holder proposing to
transfer the Preferred Stock within 30 days after receipt of the Sale Notice
whether or not it elects to purchase the Preferred Stock. If the Company elects
to purchase such Preferred Stock, the holder proposing disposition shall be
bound to transfer such Preferred Stock, free and clear of all liens and
encumbrances, to the Company. If the Company does not elect to purchase such
Preferred Stock, the holder proposing disposition may proceed with the
disposition of the Preferred Stock, but only to the Persons and on the terms and
conditions set forth in the Sale Notice. The purchaser of the Preferred Stock
must agree in writing to be bound by the provisions of this Section 6.2 with
respect to future transfers of the Preferred Stock.
7. DEFINITIONS. For purposes of this Agreement:
"Affiliate" shall mean, with respect to the Company (or any other
specified Person), any other Person directly or indirectly controlling,
controlled by or under direct or indirect common control with the Company (or
such specified Person), and shall include (a) any officer or director or general
partner of the Company (or such specified Person) and (b) any Person of which
the Company (or such specified Person) or any Affiliate (as defined in clause
(a) above) of the Company (or such specified Person) shall, directly or
indirectly, beneficially own either (i) at least 10% of the outstanding equity
securities having the general power to vote or (ii) at least 10% of all equity
interests.
"Business Day" shall mean any day other than a Saturday or Sunday and
other than a day which is a Federal legal holiday or a legal holiday for banks
in the State of Montana or the State of New York.
"Call Reports" shall mean the Consolidated Reports of Condition filed
by the Company's Subsidiaries which are banks with respect to periods since
January 1, 1996.
"Code" shall mean the Internal Revenue Code of 1986, as amended, from
time to time, or any successor statute thereto.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended, and any successor statute.
12
"ERISA Affiliate" shall mean any Person which would be deemed to be
under "common control" with the Company within the meaning of Section 4001(b)(1)
of ERISA.
"Executive Officer" shall mean (a) for the Company, the chief
executive officer, president and chief financial officer; and (b) for the
Company's Subsidiaries which are banks, the chief executive officer, president
and executive vice presidents.
"Fair Lending Laws" shall mean the National Bank Act, the Equal Credit
Opportunity Act, the Fair Housing Act, the Community Reinvestment Act, the Home
Mortgage Disclosure Act and all other applicable fair lending laws or other laws
relating to discrimination.
"GAAP" shall mean generally accepted accounting principles as from
time to time defined by controlling pronouncements of the Financial Accounting
Standards Board or any successor organization, consistently applied.
"Institutional Investors" shall mean institutional accredited
investors as defined in Rule 501(a)(1), (2), (3) or (7) under the Securities Act
or to Qualified Institutional Buyers, as defined in Rule 144A under the
Securities Act.
"Material Adverse Effect" shall mean an effect which (a) is materially
adverse to the business, financial condition, results of operations or prospects
of the Company and its Subsidiaries taken as a whole, (b) significantly and
adversely affects the ability of the Company to consummate the transactions
contemplated hereby or to perform its material obligations hereunder, or (c)
enables any person or entity to prevent the consummation of the transactions
contemplated hereby; PROVIDED, HOWEVER, that any effect resulting from (i)
actions or omissions of the Company taken with the prior consent of the
Purchasers in contemplation of the transactions provided for herein or (ii)
circumstances affecting the banking industry in Montana or Wyoming generally
shall be deemed not to be a Material Adverse Effect.
"Offering Memorandum" shall mean the Private Placement Offering
Memorandum dated August 16, 1996 relating to the offering of the Preferred
Stock.
"PBGC" shall mean the Pension Benefit Guaranty Corporation or any
entity succeeding to any or all of its functions under ERISA.
"Person" shall mean a corporation, association, partnership, limited
liability company, joint venture, trust, organization, business, individual or
government or any governmental agency or political subdivision thereof.
"Plan" shall mean any employee welfare benefit plan or employee
pension benefit plan or any plan that is both an employee welfare benefit plan
and an employee pension benefit plan, as defined in Section 3 of ERISA that the
Company or any ERISA Affiliate maintains or is obligated to contribute to for
the benefit of employees or former employees of the Company of any ERISA
Affiliate.
"Securities Act" shall mean the Securities Act of 1933, as amended,
and the rules and regulations promulgated thereunder.
13
"Subsidiary" shall mean any Person of which the Company shall,
directly or indirectly through one or more of its Subsidiaries, (a) own at least
50% of the issued and outstanding voting capital stock, (b) hold at least 50% of
the partnership, joint venture or similar interests, or (c) be a general
partner.
"Tax" shall mean any tax or similar governmental charge, assessment or
levy (including, without limitation, income taxes, franchise taxes, transfer
taxes or fees, stamp taxes, sales taxes, use taxes, excise taxes, ad valorem
taxes, withholding taxes, employee withholding taxes, worker's compensation,
payroll taxes, unemployment insurance, social security, or minimum taxes)
together with any related liabilities, penalties, fines, additions to tax or
interest, imposed by the United States or any state, county, provincial, local
or foreign government or subdivisions or agency thereof.
"Tier 1 Capital" shall have the meaning and characteristics ascribed
to such term in Appendix A to 12 C.F.R. Part 225.
The following terms are defined elsewhere in the Agreement:
"Acquisition" Recitals
"Agreement" Recitals
"Articles of Amendment Section 2.2.2
"Banks" Recitals
"Business" Section 3.16(a)
"Certificate of Designation" Section 1.1
"Closing" Section 1.3
"Closing Date" Section 1.3
"Company" Recitals
"Environmental Law" Section 3.16(a)
"FRB" Section 2.1.1
"FDIC" Section 3.7
"Governmental Entities" Section 3.6
"Hazardous Substances" Section 3.16(a)
"IRS" Section 3.15
"Latest Balance Sheet" Section 3.14
"Montana Bank" Recitals
"Outside Closing Date" Section 1.3
"PCBs" Section 3.16(a)
"Purchaser" Recitals
"Real Property" Section 3.16(b)
"Reports" Section 3.4
"Stock Purchase Agreement" Recitals
"▇▇▇▇▇ Fargo" Recitals
"Wyoming Bank" Recitals
8. MISCELLANEOUS.
8.1. COURSE OF DEALING. For the purposes of this Agreement
and all documents and instruments executed pursuant hereto, except as otherwise
specifically set forth
14
herein or therein, no course of dealing between the Company and the Purchasers
and no delay on the part of any party hereto in exercising any rights hereunder
or thereunder shall operate as a waiver of the rights hereof and thereof.
8.2. NOTICES. Any notice, request, instruction or other
document to be given hereunder by any party to the other shall be in writing and
shall be deemed to have been duly given (a) on the date of delivery if delivered
personally or by facsimile upon confirmation or receipt, (b) on the first
business day following the date of mailing if delivered by next-day courier
service, or (c) on the third business day following the date of mailing if
delivered by registered or certified mail, return receipt requested, postage
prepaid. All notices, requests, instructions or other documents to be given
hereunder shall be delivered as set forth below, or pursuant to such other
instructions as may be designated in writing by the party to receive such
notice, request, instruction or document in accordance with this Section 8.2:
8.2. (a) If to the Company:
First Interstate BancSystem of
Montana, Inc.
▇▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
with a copy to:
Holland & ▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
(b) If to the Purchasers:
First Security Corporation
▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
8.3. TREATMENT OF THE PREFERRED STOCK. The Company covenants
and agrees that so long as federal income tax laws prohibit a deduction for
distributions made by the Company with respect to preferred stock (a) it shall
treat all distributions paid by it on the Preferred Stock as non-deductible
dividends on all of its tax returns and (b) it shall treat the Preferred Stock
as preferred stock in all of its financial statements and other reports and
shall treat all distributions paid by it on the Preferred Stock as dividends on
preferred stock in such statements and reports.
15
8.4. PURCHASER'S REPRESENTATIONS. Each Purchaser hereby
represents (a) that it is an Institutional Investor, (b) that it is acquiring
the Preferred Stock purchased hereunder for its own account with the present
intention of holding such securities for purposes of investment, and that it has
no intention of selling such securities in a public distribution in violation of
the federal securities laws or any applicable state securities laws; (c) that
the acquisition of the Preferred Stock will not constitute a "prohibited
transaction" (as such terms is defined under ERISA) under Section 406 of ERISA
or Section 4975 of the Code, and (d) that it has not, directly or indirectly,
incurred and will not directly or indirectly incur any obligation for any
finder's or broker's or similar fees or commissions in connection with this
Agreement, the issuance and delivery of the Preferred Stock, or the transactions
contemplated hereby. The acquisition of the Preferred Stock by each Purchaser
at Closing shall constitute confirmation by it of the accuracy of the foregoing
representations and warranties on and as of the time the Preferred Stock is
issued.
8.4. Each Purchaser acknowledges that the Preferred Stock has not been
registered under the Securities Act, or the securities laws of any state or
other jurisdiction. Each Purchaser agrees not to transfer the Preferred Stock
except in accordance with all applicable securities laws. Each certificate for
the Preferred Stock shall be imprinted with a legend in substantially the
following form:
"The securities represented by this certificate have not
been registered under the Securities Act of 1933, as
amended, or any state securities law and may be reoffered
and sold only if so registered or if an exemption from such
registration is available. The transfer of the securities
represented hereby is subject to the conditions specified in
the Preferred Stock Purchase Agreement, dated as of
September 26, 1996, between the issuer (the "Company") and
certain investors, and the Company reserves the right to
refuse the transfer of such securities until such conditions
have been fulfilled with respect to such transfer. A copy
of such conditions shall be furnished by the Company to the
holder hereof upon written request and without charge."
8.5. EXPENSES. The Company agrees to pay, and hold each
Purchaser harmless against liability for the payment of, (i) the reasonable fees
(not to exceed $25,000, provided that no material unforeseen issues or
conditions arise) and expenses of one special counsel representing all of the
Purchasers arising in connection with the negotiation and execution of this
Agreement and the consummation of the transactions contemplated by this
Agreement which shall be payable at the Closing or, if the Closing does not
occur, upon demand, (ii) the reasonable fees and expenses incurred with respect
to any amendments or waivers (whether or not the same become effective) under or
in respect of this Agreement, the agreements contemplated hereby, the Articles
of Incorporation or the Articles of Amendment, provided that if such amendment
or waiver is initially requested by any holder, then each holder shall pay its
own fees and expenses, (iii) stamp and other taxes which may be payable in
respect of the execution and delivery of this Agreement or the issuance,
delivery or acquisition of any shares of Preferred Stock and, (iv) the
enforcement of the rights granted under this Agreement, the agreements
contemplated hereby, the Articles of Incorporation and the Articles of
Amendment.
16
8.6. REMEDIES. Each holder of Preferred Stock shall have all
rights and remedies set forth in this Agreement, the Articles of Incorporation
and the Articles of Amendment and all rights and remedies which such holders
have been granted at any time under any other agreement or contract and all of
the rights which such holders have under any law. Any holder having any rights
under any provision of this Agreement shall be entitled to enforce such rights
specifically, to recover damages by reason of any breach of any provision of
this Agreement and to exercise all other rights granted by law.
8.7. CONFIDENTIALITY. Each Purchaser will make no disclosure
of confidential information furnished to it by the Company or any of the
Company's Subsidiaries, unless such information shall have become public, except
(i) in connection with enforcement of this
Agreement to Persons who have a reasonable need to be furnished such
confidential information and who agree to comply with the restrictions
contained in this Section 8.7 with respect to such information;
(ii) pursuant to any statutory or regulatory
requirement or any mandatory court order, subpoena or other legal process;
(iii) to any parent or corporate Affiliate of such
Purchaser to any permitted transferee of the Preferred Stock; PROVIDED,
HOWEVER, that any such Person shall agree to comply with the restrictions
set forth in this Section 8.7 with respect to such information;
(iv) to its independent counsel, auditors and
other professional advisors, with an instruction to such Person to keep such
information confidential; and
(v) with the prior written consent of the
Company,to any other Person.
8.8. HEADINGS. The headings contained in this Agreement are
for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
8.9. SEVERABILITY. If any provision of this Agreement or the
application thereof to any Person or circumstances is determined by a court of
competent jurisdiction to be invalid, void or unenforceable, the remaining
provisions hereof, or the application of such provision to Persons or
circumstances, other than those as to which it has been held invalid or
unenforceable, shall remain in full force and effect and shall in no way be
affected, impaired or invalidated thereby, so long as the economic or legal
substance of the transactions contemplated hereby is not affected in any manner
materially adverse to any party. Upon such determination, the parties shall
negotiate in good faith in an effort to agree upon a suitable and equitable
substitute provision to effect the original intent of the parties.
8.10. ENTIRE AGREEMENT; INTERPRETATION. This Agreement,
including the Schedules and Exhibits hereto, constitutes the entire agreement of
the parties hereto with
17
respect to the subject matter hereof and supersedes all prior agreements and
undertakings, both written and oral. It is the intention of the parties that
this Agreement shall not be construed more strictly with regard to one party
than with regard to any other party.
8.11. ASSIGNMENT. Without the written consent of the other
parties hereto, this Agreement shall not be assigned by operation of law or
otherwise (any attempted assignment in contravention hereof being null and
void); PROVIDED, HOWEVER, that First Security Corporation may assign this
Agreement to an Affiliate of First Security Corporation upon prior written
notice to the Company.
8.12. CONSENT TO AMENDMENTS. Except as otherwise expressly
provided herein, the provisions of this Agreement may be amended and the Company
may take any action herein prohibited, or omit to perform any act herein
required to be performed by it, only if the Company has obtained the written
consent of the holders of 66-2/3% of the shares of Preferred Stock. No other
course of dealing between the Company and the holder of any Preferred Stock or
any delay in exercising any rights hereunder or under the Articles of
Incorporation or the Articles of Amendment shall operate as a waiver of any
rights of any such holders. For purposes of this Agreement, shares of Preferred
Stock held by the Company or any Subsidiaries shall not be deemed to be
outstanding.
8.13. GOVERNING LAW; CONSENT TO JURISDICTION; APPOINTMENT OF
AGENT FOR SERVICE OF PROCESS. This Agreement shall be governed by, and construed
in accordance with, the laws of the State of Utah. Each party hereto for such
party and such party's successors and assigns agrees that the State of Utah
shall be the exclusive venue (to the extent that subject matter jurisdiction
exists) for all causes of action arising out of this Agreement. This consent to
jurisdiction and venue shall not be deemed a waiver of any right of any party to
remove any litigation to a federal court located in the State of Utah. The
Company hereby irrevocably designates, appoints and empowers CT Corporation
System at its Salt Lake City, Utah, office, as its authorized agent for service
of process in the State of Utah in any suit or proceeding with respect to this
Agreement.
8.14. UNDERSTANDING AMONG THE PURCHASERS. The determination
of each Purchaser to purchase the Preferred Stock pursuant to this Agreement has
been made by such Purchaser independent of any statements or opinions as to the
advisability of such purchase or as to the properties, business, prospects or
condition (financial or otherwise) of the Company and its Subsidiaries which may
have been made or given by any other Purchaser or by any agent or employee of
any other Purchaser.
8.15. COUNTERPARTS. This Agreement may be executed in any
number of separate counterparts, each of which when executed shall be deemed to
be an original but all of which taken together shall constitute one and the same
agreement.
8.16. JURY WAIVER. EACH OF THE COMPANY AND THE PURCHASERS
HEREBY WAIVE TRIAL BY JURY IN ANY ACTION, PROCEEDING, SUIT, OR COUNTERCLAIM ON
ANY MATTER WHATSOEVER ARISING OUT OF OR IN ANY WAY CONNECTED WITH THIS AGREEMENT
AND THE TRANSACTIONS CONTEMPLATED HEREBY.
18
8.17. TIME. Time is of the essence.
IN WITNESS WHEREOF, the Company and the Purchasers have caused this
Agreement to be duly executed as of the date first written above by their
respective officers thereunto duly authorized.
FIRST INTERSTATE BANCSYSTEM OF
MONTANA, INC.
By:_________________________
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: President & Chief
Executive Officer
19
PURCHASERS:
FIRST SECURITY CORPORATION
By:
----------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Executive Vice President Finance and Capital
Markets and Chief Financial Officer
TABLE OF CONTENTS
1. Authorization .............................................................1
1.1. Authorization of the Preferred Stock ................................1
1.2. Purchase and Sale of the Preferred Stock ............................1
1.3. The Closing .........................................................1
2. Conditions Precedent to Obligations to Close ..............................2
2.1. Conditions to Each Party's Obligation to Effect the
Purchase and Sale of the Preferred Stock .......................2
2.1.1 Governmental and Regulatory Consents ...............................2
2.1.2 Third Party Consents ...............................................2
2.1.3 Purchase Permitted by Applicable Laws ..............................2
2.1.4 Consummation of the Acquisition ....................................2
2.2. Conditions to Obligation of Each Purchaser ..........................2
2.2.1 Representations and Warranties .....................................2
2.2.2 Certificate of Designation .........................................3
2.2.3 Blue Sky Clearances ................................................3
2.2.4 Closing Documents ..................................................3
2.2.5 Proceedings ........................................................3
2.2.6 Expenses ...........................................................3
2.2.7 Compliance with Applicable Laws ....................................3
2.2.8 Delivery of Stock Certificates .....................................4
2.2.9 No Material Adverse Change .........................................4
2.2.10 Performance of Obligations ........................................4
2.3. Conditions to Obligation of the Company .............................4
2.3.1 Proof Each Purchaser is An Institutional Investor ..................4
i
3. Representations and Warranties of the Company .............................4
3.1. Organization; Bank Holding Company Registration .....................4
3.2. Corporate Power; Authorization ......................................4
3.3. No Conflict .........................................................4
3.4. Capitalization ......................................................5
3.5. Disclosure ..........................................................5
3.6. Financial Statements ................................................5
3.7. Compliance with Law .................................................5
3.8. Governmental Consents ...............................................5
3.9. Litigation ..........................................................5
3.10. Taxes ..............................................................6
3.11. Title to Assets ....................................................6
3.12. Required Licenses ..................................................6
3.13. Employee Benefits ..................................................6
3.14. Private Offering by the Company ....................................7
3.15. Use of Proceeds; Margin Regulations ................................7
3.16. Existing Indebtedness ..............................................7
3.17. Foreign Assets Control Regulations .................................7
3.18. Environmental Matters ..............................................8
3.19. Subsidiaries .......................................................9
3.20. Maintenance of Insurance by Subsidiaries ...........................9
3.21. Securities Laws ....................................................9
3.22. Broker's Fees ......................................................9
3.23. Use of Proceeds ...................................................10
4. Affirmative Covenants ....................................................10
ii
4.1. Reports and Notices ................................................10
4.2. Maintenance of Properties ..........................................10
4.3. Insurance ..........................................................10
4.4. Compliance With Law ................................................11
4.5. Maintenance of Corporate Existence .................................11
4.6. Payment of Taxes ...................................................11
5. Negative Covenants .......................................................11
5.1. No Conflicting Agreements ..........................................11
5.2. Related Party Transactions .........................................11
6. Transfer of the Preferred Stock ..........................................11
6.1. Permitted Transfers ................................................11
6.2. Restrictions on Transfer; Right of First Refusal ...................11
7. Definitions ..............................................................12
8. Miscellaneous ............................................................14
8.1. Course of Dealing ..................................................14
8.2. Notices ............................................................14
8.3. Treatment of the Preferred Stock ...................................15
8.4. Purchaser's Representations ........................................15
8.5. Expenses ...........................................................16
8.6. Remedies ...........................................................16
8.7. Confidentiality ....................................................16
8.8. Headings ...........................................................17
8.9. Severability .......................................................17
8.10. Entire Agreement; Interpretation ..................................17
8.11. Assignment ........................................................17
iii
8.12. Consent to Amendments .............................................17
8.13. Governing Law; Consent to Jurisdiction; Appointment of Agent
for Service of Process .......................................18
8.14. Understanding Among the Purchasers ................................18
8.15. Counterparts ......................................................18
8.16. JURY WAIVER .......................................................18
8.17. Time ..............................................................18
iv
SCHEDULES
Schedule of Purchasers i
Schedule 3.4 Options ii
Schedule 3.10 Taxes ii
Schedule 3.19 Subsidiaries vi
EXHIBITS
Exhibit A Certificate of Designation vii
v
