EXHIBIT 2
AGREEMENT AND PLAN OF REORGANIZATION
BY AND AMONG
GREATER BAY BANCORP,
GBB MERGER CORP.
AND
BANK OF SANTA XXXXX
January 26, 2000
AGREEMENT AND PLAN OF REORGANIZATION
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THIS AGREEMENT AND PLAN OF REORGANIZATION ("Agreement") is made and entered
into as of the 26th day of January, 2000, by and among GREATER BAY BANCORP, a
California corporation ("GBB"), GBB Merger Corp., a California corporation and
wholly owned subsidiary of GBB ("Newco") and Bank of Santa Xxxxx, a California
corporation ("BSC").
WHEREAS, the Boards of Directors of GBB, Newco and BSC deem advisable and
in the best interests of their respective shareholders the merger of BSC with
and into Newco (the "Merger") upon the terms and conditions set forth herein
and in accordance with the California General Corporation Law (the "CGCL") (BSC,
following the effectiveness of the Merger, being hereinafter sometimes referred
to as the "Surviving Corporation");
WHEREAS, the Boards of Directors of GBB, Newco and BSC have approved the
Merger pursuant to this Agreement and the Agreement of Merger by and between
Newco and BSC (the "Agreement of Merger"), in substantially the form of Exhibit
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A attached hereto, pursuant to which Newco will merge with and into BSC and each
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outstanding share of BSC common stock, no par value ("BSC Stock"), excluding any
BSC Perfected Dissenting Shares (as defined below), will be converted into the
right to receive a specified amount of GBB common stock, no par value ("GBB
Stock"), upon the terms and subject to the conditions set forth herein; and
WHEREAS, the Merger is intended to qualify as a tax-free reorganization
within the meaning of the provisions of Section 368 of the Internal Revenue Code
of 1986, as amended (the "Code").
NOW, THEREFORE, on the basis of the foregoing recitals and in consideration
of the mutual covenants, agreements, representations and warranties contained
herein, the parties hereto do covenant and agree as follows:
ARTICLE 1.
DEFINITIONS
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Except as otherwise expressly provided for in this Agreement, or unless the
context otherwise requires, as used throughout this Agreement the following
terms shall have the respective meanings specified below:
"Affiliate" of, or a person "Affiliated" with, a specific person(s) is a
person that directly or indirectly, through one or more intermediaries,
controls, or is controlled by, or is under common control with, the person(s)
specified.
"Affiliated Group" means, with respect to any entity, a group of entities
required or permitted to file consolidated, combined or unitary Tax Returns (as
defined herein).
"Agreement of Merger" has the meaning set forth in the second recital of
this Agreement.
"Average Closing Price" means the average of the daily closing price of a
share of GBB Stock reported on the Nasdaq National Market System during the 20
consecutive trading days ending at the end of the third trading day immediately
preceding the Effective Time of the Merger (as defined herein).
"BAB" means Bay Area Bank, a California state chartered bank and wholly
owned subsidiary of GBB.
"BBC" means Bay Bank of Commerce, a California state chartered bank and
wholly owned subsidiary of GBB.
"Banks" means BAB, BBC, CNB, GGB, MPB and PBC.
"Benefit Arrangements" has the meaning set forth in Section 4.20(b).
"BHC Act" means the Bank Holding Company Act of 1956, as amended.
"BSC 401(k) Plan" means the BSC Profit Sharing and Salary Deferral 401(k)
Plan.
"BSC Conflicts and Consents List" has the meaning set forth in Section 4.6.
"BSC Contract List" has the meaning set forth in Section 4.16.
"BSC Derivatives List" has the meaning set forth in Section 4.32.
"BSC Dissenting Shares" means any shares of BSC Stock held by "dissenting
shareholders" within the meaning of Chapter 13 of the CGCL.
"BSC Employee Plan List" has the meaning set forth in Section 4.20.
"BSC Environmental Compliance List" has the meaning set forth in Section
4.12(b).
"BSC Filings" has the meaning set forth in Section 4.5.
"BSC Filings List" has the meaning set forth in Section 4.5.
"BSC Fully Diluted Book Value" means the total stockholders' equity of BSC
as reflected on the consolidated financial statements to be provided by BSC to
GBB pursuant to Section 11.14, as adjusted (a) to eliminate all amounts paid in
connection with the exercise of any BSC Stock Options (as defined herein) since
September 30, 1999, (b) to eliminate any amount related to accumulated other
comprehensive income and including instead on such financial statements the
amount of BSC's consolidated accumulated other comprehensive income as of
September 30, 1999, (c) to deduct any dividends to be paid pursuant to Section
6.1(b) hereof after the date of such financial statements and (d) to eliminate
amounts paid or accrued for
Merger-related expenses, including but not limited to, legal, accounting and
financial advisory fees.
"BSC Indemnification List" has the meaning set forth in Section 4.30.
"BSC Insurance List" has the meaning set forth in Section 4.7.
"BSC Intellectual Property List" has the set forth in Section 4.35.
"BSC Investment Securities List" has the meaning set forth in Section 4.26.
"BSC List" means any list required to be furnished by BSC to GBB herewith.
"BSC Litigation List" has the meaning set forth in Section 4.10.
"BSC Loan List" has the meaning set forth in Section 4.25.
"BSC Offices List" has the meaning set forth in Section 4.23.
"BSC Operating Losses List" has the meaning set forth in Section 4.24.
"BSC Perfected Dissenting Shares" means BSC Dissenting Shares which the
holders thereof have not withdrawn or caused to lose their status as BSC
Dissenting Shares.
"BSC Personal Property List" has the meaning set forth in Section 4.8.
"BSC Real Property List" has the meaning set forth in Section 4.9.
"BSC Shareholders' Meeting" means the meeting of BSC's shareholders
referred to in Section 6.6.
"BSC Stock" has the meaning set forth in the second recital of this
Agreement.
"BSC Stock Option" means any option issued pursuant to the BSC Stock Option
Plan.
"BSC Stock Option Plan" means the BSC 1997 Stock Option Plan.
"BSC Supplied Information" has the meaning set forth in Section 4.34.
"BSC Tax List" has the meaning set forth in Section 4.11.
"BSC Undisclosed Liabilities List" has the meaning set forth in Section
4.19.
"Business Day" means any day other than a Saturday, Sunday or day on which
a bank chartered under the laws of the State of California is closed.
"Certificates" has the meaning set forth in Section 2.5(b).
"CFC" means the California Financial Code.
"CGCL" has the meaning set forth in the first recital of this Agreement.
"Classified Credits" has the meaning set forth in Section 6.7.
"Closing" means the consummation of the Merger provided for in Article 2 of
this Agreement on the Closing Date (as defined herein) at the offices of Greater
Bay Bancorp, 000 Xxxxxxx Xxxxxx, Xxxx Xxxx, Xxxxxxxxxx, or at such other place
as the parties may agree upon.
"Closing Date" means the date which is the first Friday which follows the
last to occur of (i) the approval of this Agreement and the transactions
contemplated hereby by the shareholders of BSC, (ii) the receipt of all permits,
authorizations, approvals and consents specified in Section 9.3 hereof, (iii)
the expiration of all applicable waiting periods under the law, (iv) the
expiration of the 30 day period following the mailing by BSC to its shareholders
of a notice of approval of the Merger by the outstanding shares pursuant to
Section 1301 of the CGCL, or such other date as the parties may agree upon.
Notwithstanding the foregoing, if in the good faith judgment of GBB the Closing
would (a) interfere with or affect any financing, acquisition or other
significant transaction being contemplated by GBB, whether or not a final
determination has been made to undertake such transaction, or (b) GBB has a
bona fide business purpose for delaying the Closing, GBB will have the right to
delay the Closing for a period of not more than 90 Business Days from the date
which would otherwise be the Closing Date as determined by the first sentence of
this paragraph, except that in no event shall the Closing Date occur after
August 31, 2000, unless the parties hereto shall otherwise mutually agree.
"CNB" means Cupertino National Bank, a national banking association and
wholly owned subsidiary of GBB.
"Code" has the meaning set forth in the fourth recital of this Agreement.
"Commissioner" means the Commissioner of the Department of Financial
Institutions of the State of California.
"Competing Transaction" has the meaning set forth in Section 6.1(n).
"Conversion Ratio" has the meaning set forth in Section 2.2(a).
"Covered Person" has the meaning set forth in Section 4.30.
"DFI" means the Department of Financial Institutions of the State of
California.
"Effective Time of the Merger" means the date upon which the Merger is
consummated and the Agreement of Merger is filed with the Secretary of State of
the State of California.
"Employee Plans" has the meaning set forth in Section 4.20(a).
"Encumbrance" shall mean any option, pledge, security interest, lien,
charge, encumbrance or restriction (whether on voting or disposition or
otherwise), whether imposed by agreement, understanding, law or otherwise.
"Environmental Regulations" has the meaning set forth in Section 4.12(b).
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"ERISA Affiliates" has the meaning set forth in Section 4.20(a).
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Exchange Agent" means Norwest Bank Minnesota, N.A.
"Exchange Fund" has the meaning set forth in Section 2.5(a) hereof.
"FDIC" means the Federal Deposit Insurance Corporation.
"Financial Statements of BSC" means the audited financial statements of BSC
consisting of the consolidated balance sheets as of December 31, 1996, 1997 and
1998, the related statements of income, stockholders' equity and cash flows for
the years then ended and related notes thereto and related opinions thereon for
the years then ended and BSC's unaudited consolidated balance sheet and
consolidated statement of income and cash flows as of and for the nine month
period ended September 30, 1999.
"Financial Statements of GBB" means the audited consolidated financial
statements of GBB consisting of the consolidated balance sheets as of December
31, 1996, 1997 and 1998, the related consolidated statements of operations,
shareholders' equity and cash flows for the years then ended and the related
notes thereto and related opinions thereon for the years then ended and GBB's
unaudited consolidated balance sheets and consolidated statement of operations
and cash flows as of and for the ninth month period ended September 30, 1999.
"FRB" means the Board of Governors of the Federal Reserve System.
"FSVK Agreement" means the letter agreement between BSC and First Security
Xxx Xxxxxx dated September 24, 1999.
"GBB 401(k) Plan" means the Greater Bay Bancorp 401(k) Profit Sharing Plan.
"GBB Acquisition Transaction" has the meaning set forth in Section
2.2(a)(v).
"GBB Conflicts and Consents List" has the meaning set forth in Section 5.5.
"GBB Filings" has the meaning set forth in Section 5.4.
"GBB Stock" has the meaning set forth in the second recital of this
Agreement.
"GBB Stock Option Plan" means the Greater Bay Bancorp 1996 Stock Option
Plan, as amended.
"GBB Subsidiaries" means Newco, the Banks, Pacific Business Funding
Corporation and Peninsula Real Estate Corporation.
"GBB Supplied Information" has the meaning set forth in Section 5.14.
"GGB" means Golden Gate Bank, a California state chartered bank and wholly
owned subsidiary of GBB.
"Governmental Entity" shall mean any court or tribunal in any jurisdiction
or any United States federal, state, municipal, domestic, foreign or other
administrative authority or instrumentality.
"Xxxxx Xxxxxxxx" means Xxxxx Xxxxxxxx, BSC's independent public
accountants.
"Hazardous Materials" has the meaning set forth in Section 4.12(b).
"Immediate Family" means a person's spouse, parents, in-laws, children and
siblings.
"Investment Security" means any equity security or debt security as defined
in Statement of Financial Accounting Standards No. 115.
"IRS" means the Internal Revenue Service.
"MPB" means Mid-Peninsula Bank, a California state chartered bank and
wholly-owned subsidiary of GBB.
"Operating Loss" has the meaning set forth in Section 4.24.
"PBC" means Peninsula Bank of Commerce, a California state chartered bank
and wholly owned subsidiary of GBB.
"Person" means any individual, corporation, association, partnership,
limited liability company, trust, joint venture, other entity, unincorporated
body, government or governmental department or agency.
"Proxy Statement and Prospectus" means the Proxy Statement and Prospectus
that is included as part of the Registration Statement on Form S-4 (as defined
herein) and used to solicit proxies for the BSC Shareholders' Meeting and to
offer and sell the shares of GBB Stock to be issued in connection with the
Merger.
"PwC" means PricewaterhouseCoopers LLP, GBB's independent public
accountants.
"Related Group of Persons" means Affiliates, members of an Immediate Family
or Persons the obligations of whom would be attributed to another Person
pursuant to the regulations promulgated by the SEC (as defined herein).
"Registration Statement on Form S-4" means the Registration Statement on
Form S-4, and such amendments thereto, that is filed with the SEC to register
the shares of GBB Stock to be issued in the Merger under the Securities Act and
to clear use of the Proxy Statement and Prospectus in connection with the BSC
Shareholders' Meeting pursuant to the regulations promulgated under the Exchange
Act.
"Scheduled Contracts" has the meaning set forth in Section 4.16.
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended.
"Surviving Corporation" has the meaning set forth in the first recital of
this Agreement.
"Tanks" has the meaning set forth in Section 4.12(b).
"Tax Returns" means all returns, declarations, reports, estimates,
information returns and statements required to be filed in respect of any Taxes.
"Taxes" means (i) all federal, state, local or foreign taxes, charges,
fees, imposts, levies or other assessments, including, without limitation, all
net income, gross receipts, capital, sales, use, ad valorem, value added,
transfer, franchise, profits, inventory, capital stock, license, withholding,
payroll, employment, social security, unemployment, excise, severance, stamp,
occupation, property, corporation and estimated taxes, custom duties, fees,
assessments and charges of any kind whatsoever; (ii) all interest, penalties,
fines, additions to tax or additional amounts imposed by any taxing authority in
connection with any item described in clause (i); and (iii) any transferred
liability in respect of any items described in clauses (i) and/or (ii).
"Top Up Option" means, in the event that the Average Closing Price is less
than $36.3600, the right of GBB to elect to issue that number of shares of GBB
Stock equal to the quotient obtained by dividing $32.7240 by the Average Closing
Price.
"Understanding" means any contract, agreement, understanding, commitment or
offer, whether oral or written, which may become a binding obligation if
accepted by another Person.
ARTICLE 2.
TERMS OF MERGER
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2.1. Effect of Merger and Surviving Corporation. At the Effective Time
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of the Merger, Newco will be merged with and into BSC pursuant to the terms,
conditions and provisions of the Agreement of Merger and in accordance with the
applicable provisions of the CGCL. By virtue of the Merger, all the rights,
privileges, powers and franchises and all property and assets of every kind and
description of Newco and BSC shall be vested in and be held and enjoyed by the
Surviving Corporation, without further act or deed, and all the interests of
every kind of Newco and BSC, including all debts due to either of them on
whatever account, shall be the property of the Surviving Corporation as they
were of Newco and BSC and the title to any interest in real property and any
interest in personal property vested by deed or otherwise in either Newco or BSC
shall not revert or be in any way impaired by reason of the Merger; and all
rights of creditors and liens upon any property of Newco and BSC shall be
preserved unimpaired and all debts, liabilities and duties of Newco and BSC
shall be debts, liabilities and duties of the Surviving Corporation and may be
enforced against it to the same extent as if said debts, liabilities and duties
had been incurred or contracted by it.
2.2. Stock of BSC. Subject to Section 2.4, each share of BSC Stock
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issued and outstanding immediately prior to the Effective Time of the Merger
shall, without any further action on the part of BSC or the holders of such
shares, be treated on the basis set forth herein.
(a) Conversion of BSC Stock. At the Effective Time of the Merger,
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pursuant to the Agreement of Merger, each outstanding share of BSC Stock
excluding any BSC Perfected Dissenting Shares shall, without any further action
on the part of BSC or the holders of any such shares, be automatically canceled
and cease to be an issued and outstanding share of BSC Stock and be converted
into shares of GBB Stock (the "Conversion Ratio") as follows:
(i) If the Average Closing Price is greater than or equal to
$38.3875 or less than or equal to $44.6125, 0.8700 shares of GBB Stock;
(ii) If the Average Closing Price is greater than $44.6125, a number
of shares of GBB Stock equal to the quotient obtained by dividing (x) $38.8129
plus the product of .3333 times the difference between the Average Closing Price
and $44.6125, by (y) the Average Closing Price; or
(iii) If the Average Closing Price is less than $38.3875 or greater
than or equal to $36.3600, a number of shares of GBB Stock equal to the quotient
obtained by dividing (x) $33.3971 less the product of .3333 times the difference
between $38.3875 and the Average Closing Price, by (y) the Average Closing
Price; or
(iv) If the Average Closing Price is less than $36.3600, 0.9000
shares of GBB Stock; provided, however, if the Average Closing Price is less
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than $36.3600, BSC may give written notice to GBB within one Business Day of
the calculation of the Average Closing Price of its intention to terminate the
Agreement pursuant to Section 13.1(l), unless GBB elects, by
written notice to BSC within one Business Day from the date of receipt of
written notice from BSC of its intention to terminate the Agreement, to
exercise the Top Up Option, in which case the Conversion Ratio will equal that
number of shares of GBB Stock equal to the quotient obtained by dividing
$32.7240 by the Average Closing Price.
(v) In the event that, prior to the Closing Date, GBB publicly
announces the signing of a definitive agreement with a third party with respect
to a business combination, tender offer or similar transaction which if
consummated would result in the GBB shareholders as of the date of such
announcement owning less than 51% of the outstanding shares of common stock of
the surviving corporation, the price to be paid to GBB shareholders in such
transaction would exceed $44.6125 and such transaction is not terminated or
abandoned prior to the Closing Date (a "GBB Acquisition Transaction"), the
Conversion Ratio shall be 0.8700 shares of GBB Stock. If such GBB Acquisition
Transaction is terminated or abandoned during the period for determining the
Average Closing Price, GBB can elect to either set the Conversion Ratio at
0.8700 shares of GBB Stock or unilaterally delay the Closing Date to a date
which is 25 trading days after the date of the public announcement of the
termination or abandonment of such GBB Acquisition Transaction. To preserve the
rights of holders of shares of BSC Stock pursuant to this Section 2.2(a)(v), GBB
and BSC agree to coordinate the closing of any GBB Acquisition Transaction with
the Closing and to cooperate with such third party in otherwise accomplishing
the purpose hereof.
(b) BSC Perfected Dissenting Shares. BSC Perfected Dissenting Shares
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shall not be converted into shares of GBB Stock, but shall, after the Effective
Time of the Merger, be entitled only to such rights as are granted them by
Chapter 13 of the CGCL. Each dissenting shareholder who is entitled to payment
for his shares of BSC Stock shall receive such payment in an amount as
determined pursuant to Chapter 13 of the CGCL.
(c) Dividends, Etc. If, prior to the Effective Time of the Merger,
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GBB shall declare a stock dividend or distribution upon or subdivide, split up,
reclassify or combine the GBB Stock, or make a distribution on the GBB Stock in
any security convertible into GBB Stock, with a record date prior to the
Effective Time of the Merger, appropriate adjustment or adjustments will be made
to the Conversion Ratio.
2.3. Effect on GBB Stock. At the Effective Time of the Merger, each
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outstanding share of GBB Stock shall remain an outstanding share of GBB Stock
and shall not be converted or otherwise affected by the Merger.
2.4. Fractional Shares. No fractional shares of GBB Stock shall be
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issued in the Merger. In lieu thereof, each holder of BSC Stock who would
otherwise be entitled to receive a fractional share shall receive an amount in
cash equal to the product (calculated to the nearest cent) obtained by
multiplying (a) the closing price of GBB Stock reported on the Nasdaq National
Market System on the Business Day immediately preceding the Closing Date times
(b) the fraction of the share of GBB Stock to which such holder would otherwise
be entitled. No such holder shall be entitled to dividends or other rights in
respect of any such fraction.
2.5 Exchange Procedures.
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(a) As of the Effective Time of the Merger, GBB shall have deposited
with the Exchange Agent for the benefit of the holders of shares of BSC Stock,
for exchange in accordance with this Section 2.5 through the Exchange Agent,
certificates representing the shares of GBB Stock issuable pursuant to Section
2.2 in exchange for shares of BSC Stock outstanding immediately prior to the
Effective Time of the Merger, and funds in an amount not less than the amount of
cash payable in lieu of fractional shares of GBB Stock which would otherwise be
issuable in connection with Section 2.2 hereof but for the operation of Section
2.4 of this Agreement (collectively, the "Exchange Fund").
(b) GBB shall direct the Exchange Agent to mail, promptly after the
Effective Time of the Merger, to each holder of record of a certificate or
certificates which immediately prior to the Effective Time of the Merger
represented outstanding shares of BSC Stock (the "Certificates") whose shares
were converted into the right to receive shares of GBB Stock pursuant to Section
2.2 hereof, (i) a letter of transmittal (which shall specify that delivery shall
be effected, and risk of loss and title to the Certificates shall pass, only
upon delivery of the Certificates to the Exchange Agent and shall be in such
form and have such other provisions as GBB and BSC may reasonably specify), and
(ii) instructions for use in effecting the surrender of the Certificates in
exchange for certificates representing shares of GBB Stock. Upon surrender of a
Certificate for cancellation to the Exchange Agent or to such other agent or
agents as may be appointed by GBB, together with such letter of transmittal,
duly executed, the holder of such Certificate shall be entitled to receive in
exchange therefor a certificate representing that number of whole shares of GBB
Stock and cash in lieu of fractional shares which such holder has the right to
receive pursuant to Sections 2.2 and 2.4 hereof, and the Certificate so
surrendered shall forthwith be canceled. In the event a certificate is
surrendered representing BSC Stock, the transfer of ownership of which is not
registered in the transfer records of BSC, a certificate representing the proper
number of shares of GBB Stock may be issued to a transferee if the Certificate
representing such BSC Stock is presented to the Exchange Agent, accompanied by
all documents required to evidence and effect such transfer and by evidence that
any applicable stock transfer taxes have been paid. Until surrendered as
contemplated by this Section 2.5, each Certificate shall be deemed at any time
after the Effective Time of the Merger to represent only the right to receive
upon such surrender the certificate representing shares of GBB Stock and cash in
lieu of any fractional shares of stock as contemplated by this Section 2.5.
Notwithstanding anything to the contrary set forth herein, if any holder of
shares of BSC should be unable to surrender the Certificates for such shares,
because they have been lost or destroyed, such holder may deliver in lieu
thereof a bond in form and substance and with surety reasonably satisfactory to
GBB and shall be entitled to receive the certificate representing the proper
number of shares of GBB Stock and cash in lieu of fractional shares in
accordance with Sections 2.2 and 2.4 hereof.
(c) No dividends or other distributions declared or made with respect
to GBB Stock with a record date after the Effective Time of the Merger shall be
paid to the holder of any unsurrendered Certificate with respect to the shares
of GBB Stock represented thereby and no cash payment in lieu of fractional
shares shall be paid to any such holder pursuant to Section 2.4 until the holder
of record of such Certificate shall surrender such Certificate. Subject to the
effect of applicable laws, following surrender of any such Certificate, there
shall be paid to the record holder of the certificates representing whole shares
of GBB Stock issued in exchange thereof, without interest, (i) at the time of
such surrender, the amount of any cash payable in lieu of a fractional share of
GBB Stock to which such holder is entitled pursuant to Section 2.4 and the
amount of dividends or other distributions with a record date after the
Effective Time of the Merger theretofore paid with respect to such whole shares
of GBB Stock, and (ii) at the appropriate payment date, the amount of dividends
or other distributions with a record date after the Effective Time of the Merger
but prior to surrender and a payment date subsequent to surrender payable with
respect to such whole shares of GBB Stock.
(d) All shares of GBB Stock issued upon the surrender for exchange of
BSC Stock in accordance with the terms hereof (including any cash paid pursuant
to Section 2.4) shall be deemed to have been issued in full satisfaction of all
rights pertaining to such shares of BSC Stock, and there shall be no further
registration of transfers on the stock transfer books of the Surviving
Corporation of the shares of BSC Stock which were outstanding immediately prior
to the Effective Time of the Merger. If, after the Effective Time of the
Merger, Certificates are presented to GBB for any reason, they shall be canceled
and exchanged as provided in this Agreement.
(e) Any portion of the Exchange Fund which remains undistributed to
the shareholders of BSC following the passage of six months after the Effective
Time of the Merger shall be delivered to GBB, upon demand, and any shareholders
of BSC who have not theretofore complied with this Section 2.5 shall thereafter
look only to GBB for payment of their claim for GBB Stock, any cash in lieu of
fractional shares of GBB Stock and any dividends or distributions with respect
to GBB Stock.
(f) Neither GBB, Newco nor BSC shall be liable to any holder of shares
of BSC Stock for such shares (or dividends or distributions with respect
thereto) or cash from the Exchange Fund delivered to a public official pursuant
to any applicable abandoned property, escheat or similar law.
(g) The Exchange Agent shall not be entitled to vote or exercise any
rights of ownership with respect to the shares of GBB Stock held by it from time
to time hereunder, except that it shall receive and hold all dividends or other
distributions paid or distributed with respect to such shares of GBB Stock for
the account of the Persons entitled thereto.
(h) Certificates surrendered for exchange by any Person constituting
an "Affiliate" of BSC for purposes of Rule 145(c) under the Securities Act shall
not be exchanged for certificates representing whole shares of GBB Stock until
GBB has received a written agreement from such person as provided in Section
6.9.
2.6. Directors of Surviving Corporation. Immediately after the Effective
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Time of the Merger, the Board of Directors of the Surviving Corporation shall be
comprised of the persons serving as directors of BSC immediately prior to the
Effective Time of the Merger and Xxxx Xxxxx, or such other person designated by
GBB and reasonably acceptable to BSC. Immediately after the Effective Time of
the Merger, the Board of Directors of GBB shall be comprised of the
persons serving as directors of GBB immediately prior to the Effective Time of
the Merger and one member of BSC's Board of Directors designated by BSC and
reasonably acceptable to GBB. Such persons shall serve until the earlier of
their resignation or removal or until their respective successors are duly
elected and qualified. During the six month period following the Effective
Time of the Merger, the BSC Board of Directors shall continue to meet on a
monthly basis and receive its current director fees of $1,000 per month.
Commencing with the first calendar quarter after such six month period, the
BSC Board of Directors will meet on a quarterly basis and the BSC director
fees will be revised to equal the amount of director fees paid to members of
the Boards of Directors of the Banks.
2.7 Executive Officers of Surviving Corporation. Immediately after the
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Effective Time of the Merger, the executive officers of the Surviving
Corporation shall be comprised of the persons serving as executive officers of
BSC immediately prior to the Effective Time of the Merger. Such persons shall
serve until the earlier of their resignation or termination.
ARTICLE 3.
THE CLOSING
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3.1. Closing Date. The Closing shall take place on the Closing Date.
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3.2. Execution of Agreements. As soon as practicable after execution of
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this Agreement, the Agreement of Merger together with all other agreements
necessary to consummate the transactions described herein shall be executed by
the parties thereto. On the Closing Date, the Agreement of Merger, together
with all requisite certificates, shall be duly filed with the Secretary of State
of the State of California as required by applicable law and regulations.
3.3 Further Assurances. At the Closing, the parties hereto shall
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deliver, or cause to be delivered, such documents or certificates as may be
necessary in the reasonable opinion of counsel for any of the parties, to
effectuate the transactions contemplated by this Agreement. From and after the
Effective Time of the Merger, each of the parties hereto covenants and agrees,
without the necessity of any further consideration whatsoever, to execute,
acknowledge and deliver any and all other documents and instruments and take any
and all such other action as may be reasonably necessary or desirable to more
effectively carry out the intent and purpose of this Agreement and the Agreement
of Merger.
ARTICLE 4.
REPRESENTATIONS AND WARRANTIES OF BSC
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BSC represents and warrants to GBB as follows:
4.1. Incorporation, Standing and Power.
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(a) BSC is a California state chartered bank duly organized, validly
existing and in good standing under the laws of the State of California and is
authorized by the DFI to conduct a general banking business. BSC's deposits are
insured by the FDIC in the manner and to the fullest extent provided by law.
BSC has all requisite corporate power and authority to own, lease and operate
its properties and assets and to carry on its business as presently conducted.
Neither the scope of the business of BSC nor the location of any of its
properties requires that BSC be licensed to do business in any jurisdiction
other than the State of California where the failure to be so licensed would,
individually or in the aggregate, have a material adverse effect on the
business, financial condition, results of operations or prospects of BSC on a
consolidated basis. BSC has delivered to GBB true and correct copies of its
Articles of Incorporation and Bylaws, as amended, and in effect as of the date
hereof.
(b) BSC Development Corporation is a California corporation duly
organized, validly existing and in good standing under the laws of the State of
California. BSC Development Corporation has no assets and conducts no
operations. BSC Development Corporation has all requisite corporate power and
authority to own, lease and operate its properties and assets and to carry on
its business as presently conducted. Neither the scope of the business of BSC
Development Corporation nor the location of any of its properties requires that
it be licensed to do business in any jurisdiction other than the State of
California. BSC has delivered to GBB true and correct copies of the Articles of
Incorporation and Bylaws, as amended, and in effect as of the date hereof of BSC
Development Corporation.
4.2. Capitalization.
--------------
(a) As of the date of this Agreement, the authorized capital stock of
BSC consists of 20,000,000 shares of BSC Stock, of which 2,326,693 shares are
outstanding as of January 25, 2000. All of the outstanding shares of BSC Stock
are duly authorized, validly issued, fully paid and nonassessable. Except for
BSC Options covering 311,082 shares of BSC Stock granted pursuant to the BSC
Stock Option Plan, there are no outstanding options, warrants or other rights in
or with respect to the unissued shares of BSC Stock nor any securities
convertible into such stock, and BSC is not obligated to issue any additional
shares of its common stock or any additional options, warrants or other rights
in or with respect to the unissued shares of such stock or any other securities
convertible into such stock. BSC has furnished GBB a list (the "BSC Option
List") setting forth the name of each holder of a BSC Option, the number of
shares of BSC Stock covered by each such option, the vesting schedule of such
option, the exercise price per share and the expiration date of each such
option.
(b) As of the date of this Agreement, the authorized capital stock of
BSC Development Corporation consists of 1,000 shares of common stock, none of
which is outstanding. There are no outstanding options, warrants or other
rights in or with respect to the unissued shares of such stock nor any
securities convertible into such stock, and BSC Development Corporation is not
obligated to issue any additional shares of its common stock or any additional
options, warrants or other rights in or with respect to the unissued shares of
such stock or any other securities convertible into such stock.
4.3. Subsidiaries. Except for BSC Development Corporation, BSC does not
------------
own, directly or indirectly (except as a pledgee pursuant to loans or upon
acquisition in satisfaction of debt previously contracted), the outstanding
stock or equity or other voting interest in any Person. In addition, BSC
sponsors the Bank of Santa Xxxxx Foundation, a California non-profit public
benefit corporation.
4.4. Financial Statements. BSC has previously furnished to GBB a copy of
--------------------
the Financial Statements of BSC. The Financial Statements of BSC: (a) present
fairly the consolidated financial condition of BSC as of the respective dates
indicated and its consolidated results of operations and changes in cash flows,
for the respective periods then ended, subject, in the case of the unaudited
interim financial statements, to normal recurring adjustments; (b) have been
prepared in accordance with generally accepted accounting principles
consistently applied (except as otherwise indicated therein); (c) set forth as
of the respective dates indicated adequate reserves for loan losses and other
contingencies and (d) are based upon the books and records of BSC.
4.5. Reports and Filings. Except as set forth in a list (the "BSC
-------------------
Filings List"), since January 1, 1996, BSC has filed all reports, returns,
registrations and statements (collectively, "BSC Filings"), together with any
amendments required to be made with respect thereto, that were required to be
filed with (a) the FDIC, (b) the DFI, (d) the SEC and (e) any other applicable
Governmental Entity, including taxing authorities, except where the failure to
file such reports, returns, registrations or statements has not had and is not
reasonably expected to have a material adverse effect on the business, financial
condition, results of operations or prospects of BSC on a consolidated basis.
No administrative actions have been taken or orders issued in connection with
such BSC Filings. As of their respective dates, each of such BSC Filings (y)
complied in all material respects with all laws and regulations enforced or
promulgated by the Governmental Entity with which it was filed (or was amended
so as to be in compliance promptly following discovery of any such
noncompliance); and (z) did not contain any untrue statement of a material fact
or omit to state a material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they were
made, not misleading. Any financial statement contained in any of such BSC
Filings fairly presented the financial position of BSC on a consolidated basis,
and was prepared in accordance with generally accepted accounting principles or
banking regulations consistently applied, except as stated therein, during the
periods involved. BSC has furnished or made available to GBB true and correct
copies of all BSC Filings filed by BSC since January 1, 1996.
4.6. Authority of BSC. The execution and delivery by BSC of this
----------------
Agreement and the Agreement of Merger and, subject to the requisite approval of
the shareholders of BSC of this
Agreement and the transactions contemplated hereby, the consummation of the
transactions contemplated hereby and thereby have been duly and validly
authorized by all necessary corporate action on the part of BSC. This
Agreement is, and the Agreement of Merger will be, upon due execution and
delivery by the respective parties thereto, a valid and binding obligation of
BSC enforceable in accordance with their respective terms, except as the
enforceability thereof may be limited by bankruptcy, liquidation,
receivership, conservatorship, insolvency, moratorium or other similar laws
affecting the rights of creditors generally and by general equitable
principles. Except as set forth in a list furnished by BSC to GBB (the "BSC
Conflicts and Consents List"), neither the execution and delivery by BSC of
this Agreement and the Agreement of Merger, the consummation of the
transactions contemplated herein or therein, nor compliance by BSC with any of
the provisions hereof or thereof, will: (a) conflict with or result in a
breach of any provision of its Articles of Incorporation, as amended, or
Bylaws, as amended; (b) constitute a breach of or result in a default (or give
rise to any rights of termination, cancellation or acceleration, or any right
to acquire any securities or assets) under any of the terms, conditions or
provisions of any note, bond, mortgage, indenture, franchise, license, permit,
agreement or other instrument or obligation to which BSC is a party, or by
which BSC any of its properties or assets are bound; (c) result in the
creation or imposition of any Encumbrance on any of the properties or assets
of BSC; or (d) violate any order, writ, injunction, decree, statute, rule or
regulation applicable to BSC or any of its properties or assets. Except as set
forth in the BSC Conflicts and Consents List, no consent of, approval of,
notice to or filing with any Governmental Entity having jurisdiction over any
aspect of the business or assets of BSC, and no consent of, approval of or
notice to any other Person, is required in connection with the execution and
delivery by BSC of this Agreement and the Agreement of Merger or the
consummation by BSC of the Merger or the transactions contemplated hereby or
thereby, except (i) the approval of this Agreement and the Agreement of Merger
and the transactions contemplated hereby and thereby by the shareholders of
BSC; (ii) such approvals as may be required by the FRB, the FDIC and the DFI;
(iii) the filing of the Proxy Statement and Prospectus and Registration
Statement on Form S-4 with the SEC; and (iv) the filing of the Agreement of
Merger with the Secretary of State.
4.7. Insurance. BSC has policies of insurance and bonds with respect to
---------
its assets and business against such casualties and contingencies and in such
amounts, types and forms as are customarily appropriate for its business,
operations, properties and assets. All such insurance policies and bonds are in
full force and effect. Except as set forth in a list furnished by BSC to GBB
(the "BSC Insurance List"), no insurer under any such policy or bond has
canceled or indicated an intention to cancel or not to renew any such policy or
bond or generally disclaimed liability thereunder. Except as set forth in the
BSC Insurance List, BSC is not in default under any such policy or bond and all
material claims thereunder have been filed in a timely fashion. Set forth in
the BSC Insurance List is a list of all policies of insurance carried and owned
by BSC showing the name of the insurance company, the nature of the coverage,
the policy limit, the annual premiums and the expiration dates. There has been
delivered to GBB a copy of each such policy of insurance.
4.8. Personal Property. BSC has good and marketable title to all its
-----------------
properties and assets, other than real property, owned or stated to be owned by
BSC, free and clear of all Encumbrances except: (a) as set forth in the
Financial Statements of BSC; (b) for Encumbrances
for current taxes not yet due; (c) for Encumbrances incurred in the ordinary
course of business; (d) for Encumbrances that are not substantial in
character, amount or extent and that do not materially detract from the value,
or interfere with present use, of the property subject thereto or affected
thereby, or otherwise materially impair the conduct of business of BSC; or (e)
as set forth in a list furnished by BSC to GBB (the "BSC Personal Property
List.")
4.9. Real Estate. BSC has furnished GBB a list of real property,
-----------
including leaseholds and all other interests in real property (other than
security interests), owned by BSC (the "BSC Real Property List"). Except as set
forth on the BSC Real Property List, BSC has duly recorded or caused to be
recorded, in the appropriate county, all recordable interests in the real
property described in the BSC Real Property List. BSC has good and marketable
title to the real property, and valid leasehold interests in the leaseholds,
described in the BSC Real Property List, free and clear of all Encumbrances,
except (a) for rights of lessors, co-lessees or sublessees in such matters that
are reflected in the lease; (b) for current taxes not yet due and payable; (c)
for such Encumbrances, if any, as do not materially detract from the value of or
materially interfere with the present use of such property; and (d) as described
in the BSC Real Property List. BSC has furnished GBB with true and correct
copies of all leases included in the BSC Real Property List, all title insurance
policies and all documents evidencing recordation of all recordable interests in
real property included in the BSC Real Property List.
4.10. Litigation. Except as set forth in a list furnished by BSC to GBB
----------
(the "BSC Litigation List"), there is no private or governmental suit, claim,
action or proceeding pending, nor to BSC's knowledge threatened, against BSC or
any of its subsidiaries or against any of their respective directors, officers
or employees relating to the performance of their duties in such capacities or
against or affecting any properties of BSC or any of its subsidiaries which, if
adversely determined, would have, individually or in the aggregate, a material
adverse effect upon the business, financial condition or results of operations
of BSC on a consolidated basis, or the transactions contemplated hereby, or
which may involve a judgment against BSC in excess of $50,000. Also, except as
disclosed in the BSC Litigation List, there are no material judgments, decrees,
stipulations or orders against BSC or any of its subsidiaries or enjoining their
respective directors, officers or employees in respect of, or the effect of
which is to prohibit, any business practice or the acquisition of any property
or the conduct of business in any area.
4.11. Taxes.
-----
(a) Except as set forth in a list furnished by BSC to GBB (the "BSC
Tax List"), (i) all Tax Returns required to be filed by or on behalf of BSC or
any of its subsidiaries or the Affiliated Group(s) of which any of them is or
was a member, have been duly and timely filed with the appropriate taxing
authorities in all jurisdictions in which such Tax Returns are required to be
filed (after giving effect to any valid extensions of time in which to make such
filings), and all such Tax Returns were true, complete and correct in all
material respects; (ii) all Taxes due and payable by or on behalf of BSC or any
of its subsidiaries, either directly, as part of an Affiliated Group Tax Return,
or otherwise, have been fully and timely paid, except to the extent adequately
reserved therefor in accordance with generally accepted accounting principles
and/or applicable regulatory accounting principles or banking regulations
consistently applied on the BSC balance sheet, and adequate reserves or accruals
for Taxes have been provided in the
BSC balance sheet with respect to any period through the date thereof for
which Tax Returns have not yet been filed or for which Taxes are not yet due
and owing; and (iii) no agreement, waiver or other document or arrangement
extending or having the effect of extending the period for assessment or
collection of Taxes (including, but not limited to, any applicable statute of
limitation) has been executed or filed with any taxing authority by or on
behalf of BSC or any of its subsidiaries, or any Affiliated Group(s) of which
any of them is or was a member.
(b) BSC and its subsidiaries have complied in all material respects
with all applicable laws, rules and regulations relating to the payment and
withholding of Taxes and have duly and timely withheld from employee salaries,
wages and other compensation and have paid over to the appropriate taxing
authorities all amounts required to be so withheld and paid over for all periods
under all applicable laws.
(c) GBB has received complete copies of (i) all income or franchise
Tax Returns of BSC and any of its subsidiaries relating to the taxable periods
since January 1, 1995 and (ii) any audit report issued within the last three
years relating to any Taxes due from or with respect to BSC or any of its
subsidiaries with respect to their respective income, assets or operations.
(d) Except as set forth in the BSC Tax List, no written claim has been
made by a taxing authority in a jurisdiction where BSC or any of its
subsidiaries do not file an income or franchise Tax Return such that BSC or any
of its subsidiaries are or may be subject to taxation by that jurisdiction.
(e) Except as set forth in the BSC Tax List: (i) all deficiencies
asserted or assessments made as a result of any examinations by any taxing
authority of the Tax Returns of or covering or including BSC or any of its
subsidiaries have been fully paid, and, to the best of BSC's knowledge, there
are no other audits or investigations by any taxing authority in progress, nor
has BSC or any of its subsidiaries received any written notice from any taxing
authority that it intends to conduct such an audit or investigation; (ii) no
requests for a ruling or a determination letter are pending with any taxing
authority; and (iii) no issue has been raised in writing by any taxing authority
in any current or prior examination which, by application of the same or similar
principles, could reasonably be expected to result in a proposed deficiency
against BSC or any of its subsidiaries for any subsequent taxable period that
could be material.
(f) Except as set forth in the BSC Tax List, neither BSC, any of its
subsidiaries nor any other Person on behalf of BSC or any of its subsidiaries
has (i) filed a consent pursuant to Section 341(f) of the Code or agreed to have
Section 341(f)(2) of the Code apply to any disposition of a subsection (f) asset
(as such term is defined in Section 341(f)(4) of the Code) owned by BSC or any
of its subsidiaries (ii) agreed to or is required to make any adjustments
pursuant to Section 481(a) of the Code or any similar provision of state, local
or foreign law by reason of a change in accounting method initiated by BSC or
any of its subsidiaries or has any knowledge that the Internal Revenue Service
has proposed in writing any such adjustment or change in accounting method, or
has any application pending with any taxing authority requesting permission for
any changes in accounting methods that relate to the business or operations of
BSC or any of its subsidiaries or (iii) executed or entered into a closing
agreement pursuant to Section 7121 of the Code or any predecessor provision
thereof or any similar provision of state, local or foreign law with respect to
BSC or any of its subsidiaries.
(g) Except as set forth in the BSC Tax List, no property owned by BSC
or any of its subsidiaries is (i) property required to be treated as being owned
by another Person pursuant to provisions of Section 168(f)(8) of the Internal
Revenue Code of 1954, as amended and in effect immediately prior to the
enactment of the Tax Reform Act of 1986, (ii) constitutes "tax exempt use
property" within the meaning of Section 168(h)(1) of the Code or (iii) is "tax-
exempt bond financed property" within the meaning of Section 168(g) of the Code.
(h) BSC is not a party to any tax sharing agreement or similar
agreement or arrangement (whether written or not written) pursuant to which it
will have any obligation to make any payments after the Closing.
(i) Except as set forth in the BSC Tax List, there is no contract,
agreement, plan or arrangement covering any Person that, individually or
collectively, could give rise to the payment of any amount that would not be
deductible by BSC or any of its subsidiaries or their respective affiliates by
reason of Section 280G of the Code, or would constitute compensation in excess
of the limitation set forth in Section 162(m) of the Code.
(j) There are no liens as a result of any due and unpaid Taxes upon
any of the assets of BSC or any of its subsidiaries.
(k) Except as set forth in the BSC Tax List, BSC or any of its
subsidiaries have no elections in effect for federal income tax purposes under
Sections 108, 168, 338, 441, 472, 1017, 1033, or 4977 of the Code.
(l) Except as set forth in the BSC Tax list, none of the members of
BSC's Affiliated Group has any net operating loss carryovers.
(m) BSC agrees, and agrees to cause its subsidiaries, to cooperate
with tax counsel in furnishing reasonable and customary written tax
representations to tax counsel for purposes of supporting tax counsel's opinion
that the Merger qualifies as a tax-deferred reorganization within the meaning of
Section 368(a) of the Code as contemplated in Section 9.6 hereof. BSC
acknowledges that its or any of its subsidiaries' inability or unwillingness to
provide such reasonable and customary written representations could preclude tax
counsel from rendering such opinion, with consequences specified elsewhere
herein.
4.12. Compliance with Laws and Regulations.
------------------------------------
(a) BSC is not in default under or in breach or violation of (i) any
provision its Articles of Incorporation, as amended, or Bylaws, as amended, or
(ii) law, ordinance, rule or regulation promulgated by any Governmental Entity,
except, with respect to this clause (ii), for such violations as would not have,
individually or in the aggregate, a material adverse effect on the business,
financial condition, results of operations or prospects of BSC on a consolidated
basis.
(b) Except as set forth on a list furnished by BSC to GBB (the "BSC
Environmental Compliance List"), to the best of BSC's knowledge, (i) BSC is in
compliance with all Environmental Regulations; (ii) there are no Tanks on or
about BSC Property; (iii) there are no Hazardous Materials on, below or above
the surface of, or migrating to or from BSC Property; (iv) BSC has no loans
outstanding secured by real property that is not in compliance with
Environmental Regulations or which has a leaking Tank or upon which there are
Hazardous Materials on or migrating to or from; and (v) without limiting Section
4.10 or the foregoing representations and warranties contained in clauses (i)
through (iv), as of the date of this Agreement, there is no claim, action, suit,
or proceeding or notice thereof before any Governmental Entity pending against
BSC or concerning property securing BSC loans and there is no outstanding
judgment, order, writ, injunction, decree, or award against or affecting BSC
Property or property securing BSC loans, relating to the foregoing
representations (i) - (iv), in each case the noncompliance with which, or the
presence of which would have a material adverse effect on the business,
financial condition, results of operations or prospects of BSC on a consolidated
basis. For purposes of this Agreement, the term "Environmental Regulations"
shall mean all applicable statutes, regulations, rules, ordinances, codes,
licenses, permits, orders, approvals, plans, authorizations, concessions,
franchises, and similar items, of all Governmental Entities and all applicable
judicial, administrative, and regulatory decrees, judgments, and orders relating
to the protection of human health or the environment, including, without
limitation: all requirements, including, but not limited to those pertaining to
reporting, licensing, permitting, investigation, and remediation of emissions,
discharges, releases, or threatened releases of Hazardous Materials, chemical
substances, pollutants, contaminants, or hazardous or toxic substances,
materials or wastes whether solid, liquid, or gaseous in nature, into the air,
surface water, groundwater, or land, or relating to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport, or handling of
chemical substances, pollutants, contaminants, or hazardous or toxic substances,
materials, or wastes, whether solid, liquid, or gaseous in nature and all
requirements pertaining to the protection of the health and safety of employees
or the public. "BSC Property" shall mean real estate currently owned, leased,
or otherwise used by BSC, or in which BSC has an investment or security interest
(by mortgage, deed of trust, sale and lease-back or otherwise), including,
without limitation, properties under foreclosure and properties held by BSC in
its capacity as a trustee or otherwise. "Tank" shall mean treatment or storage
tanks, sumps, or water, gas or oil xxxxx and associated piping transportation
devices. "Hazardous Materials" shall mean any substance the presence of which
requires investigation or remediation under any federal, state or local statute,
regulation, ordinance, order, action, policy or common law; or which is or
becomes defined as a hazardous waste, hazardous substance, hazardous material,
used oil, pollutant or contaminant under any federal, state or local statute,
regulation, rule or ordinance or amendments thereto including, without
limitation, the Comprehensive Environmental Response, Compensation and Liability
Act (42 U.S.C. Section 9601, et seq.); the Resource Conservation and Recovery
Act (42 U.S.C. Section 6901, et seq.); the Clean Air Act, as amended (42 U.S.C.
Section 7401, et seq.); the Federal Water Pollution Control Act, as amended (33
U.S.C. Section 1251, et seq.); the Toxic Substances Control Act, as amended (15
U.S.C. Section 9601, et seq.); the Occupational Safety and Health Act, as
amended (29 U.S.C. Section 651; the Emergency Planning and Community Right-to-
Know Act of 1986 (42 U.S.C. Section 11001, et seq.); the Mine Safety and Health
Act of 1977, as amended (30 U.S.C. Section 801, et seq.); the Safe Drinking
Water Act (42 U.S.C.
Section 300f, et seq.); and all comparable state and local laws, including
without limitation, the Xxxxxxxxx-Xxxxxxx-Xxxxxx Hazardous Substance Account
Act (State Superfund), the Xxxxxx-Cologne Water Quality Control Act, Section
25140, 25501(j) and (k), 25501.1,25281 and 25250.1 of the California Health
and Safety Code and/or Article I of Title 22 of the California Code of
Regulations, Division 4, Chapter 30; laws of other jurisdictions or orders and
regulations; or the presence of which causes or threatens to cause a nuisance,
trespass or other common law tort upon real property or adjacent properties or
poses or threatens to pose a hazard to the health or safety of persons or
without limitation, which contains gasoline, diesel fuel or other petroleum
hydrocarbons; polychlorinated biphenyls (PCBs), asbestos or urea formaldehyde
foam insulation.
(c) BSC has provided to GBB phase I environmental assessments with
respect to each interest in real property set forth on the BSC Real Property
List as to which such a phase I environmental investigation has been prepared by
or on behalf of BSC. The BSC Real Property List shall disclose each such
property as to which such an assessment has not been prepared on behalf of BSC.
4.13. Performance of Obligations. BSC has performed in all material
--------------------------
respects all of the obligations required to be performed by it to date and is
not in default under or in breach of any term or provision of any covenant,
contract, lease, indenture or any other agreement to which it is a party, is
subject or is otherwise bound, and no event has occurred that, with the giving
of notice or the passage of time or both, would constitute such default or
breach, where such default or breach would have, individually or in the
aggregate, a material adverse effect on the business, financial condition,
results of operations or prospects of BSC on a consolidated basis. Except for
loans and leases made by BSC in the ordinary course of business, to the best of
BSC's knowledge, no party with whom BSC has an agreement that is of material
importance to the business of BSC is in default thereunder.
4.14. Employees. There are no controversies pending or, to the best of
---------
BSC's knowledge, threatened between BSC and any of its employees that are likely
to have a material adverse effect on the business, financial condition, results
of operations or prospects of BSC on a consolidated basis. BSC is not a party
to any collective bargaining agreement with respect to any of its employees or
any labor organization to which its employees or any of them belong.
4.15. Brokers and Finders. Except for the obligation to First Security
-------------------
Xxx Xxxxxx set forth in the FSVK Agreement, a copy of which has been delivered
to GBB, BSC is not a party to or obligated under any agreement with any broker
or finder relating to the transactions contemplated hereby, and neither the
execution of this Agreement nor the consummation of the transactions provided
for herein will result in any liability to any broker or finder.
4.16. Material Contracts. Except as set forth in a list furnished by
------------------
BSC to GBB (the "BSC Contract List") hereto (all items listed or required to be
listed in such BSC Contract List being referred to herein as "Scheduled
Contracts"), BSC is not a party or otherwise subject to:
(a) any employment, deferred compensation, bonus or consulting
contract that (i) has a remaining term, as of the date of this Agreement, of
more than one year in length of
obligation on the part of BSC and is not terminable by BSC within one year
without penalty or (ii) requires payment by BSC of $50,000 or more per annum;
(b) any advertising, brokerage, licensing, dealership, representative
or agency relationship or contract requiring payment by BSC of $50,000 or more
per annum;
(c) any contract or agreement that restricts BSC (or would restrict
any Affiliate of BSC or the Surviving Corporation (including GBB and its
subsidiaries) after the Effective Time of the Merger) from competing in any line
of business with any Person or using or employing the services of any Person;
(d) any lease of real or personal property providing for annual lease
payments by or to BSC in excess of $50,000 per annum other than (A) financing
leases entered into in the ordinary course of business in which BSC is lessor
and (B) leases of real property presently used by BSC as banking offices;
(e) any mortgage, pledge, conditional sales contract, security
agreement, option, or any other similar agreement with respect to any interest
of BSC (other than as mortgagor or pledgor in the ordinary course of its banking
business or as mortgagee, secured party or deed of trust beneficiary in the
ordinary course of its business) in personal property having a value of $50,000
or more;
(f) other than as described in the BSC Filings or as set forth in the
BSC Employee Plan List, any stock purchase, stock option, stock bonus, stock
ownership, profit sharing, group insurance, bonus, deferred compensation,
severance pay, pension, retirement, savings or other incentive, welfare or
employment plan or material agreement providing benefits to any present or
former employees, officers or directors of BSC;
(g) any agreement to acquire equipment or any commitment to make
capital expenditures of $50,000 or more;
(h) other than agreements entered into in the ordinary course of
business, including sales of other real estate owned, any agreement for the sale
of any property or assets in which BSC has an ownership interest or for the
grant of any preferential right to purchase any such property or asset;
(i) any agreement for the borrowing of any money (other than
liabilities or interbank borrowings made in the ordinary course of its banking
business and reflected in the financial records of BSC);
(j) any restrictive covenant contained in any deed to or lease of real
property owned or leased by BSC (as lessee) that materially restricts the use,
transferability or value of such property;
(k) any guarantee or indemnification which involves the sum of $50,000
or more, other than letters of credit or loan commitments issued in the normal
course of business;
(l) any supply, maintenance or landscape contracts not terminable by
BSC without penalty on 30 days' or less notice and which provides for payments
in excess of $50,000 per annum;
(m) any material agreement which would be terminable other than by BSC
as a result of the consummation of the transactions contemplated by this
Agreement;
(n) any contract of participation with any other bank in any loan in
excess of $50,000 or any sales of assets of BSC with recourse of any kind to BSC
except the sale of mortgage loans, servicing rights, repurchase or reverse
repurchase agreements, securities or other financial transactions in the
ordinary course of business;
(o) any agreement providing for the sale or servicing of any loan or
other asset which constitutes a "recourse arrangement" under applicable
regulation or policy promulgated by a Governmental Entity (except for agreements
for the sale of guaranteed portions of loans guaranteed in part by the U. S.
Small Business Administration and related servicing agreements);
(p) any contract relating to the provision of data processing services
to BSC; or
(q) any other agreement of any other kind which involves future
payments or receipts or performances of services or delivery of items requiring
payment of $50,000 or more to or by BSC other than payments made under or
pursuant to loan agreements, participation agreements and other agreements for
the extension of credit in the ordinary course of their business.
True copies of all Scheduled Contracts, including all amendments and
supplements thereto, have been delivered to GBB.
4.17. Certain Material Changes. Except as specifically required,
------------------------
permitted or effected by this Agreement, since December 31, 1998, there has not
been, occurred or arisen any of the following (whether or not in the ordinary
course of business unless otherwise indicated):
(a) any change in any of the assets, liabilities, permits, methods of
accounting or accounting practices, business, or manner of conducting business,
of BSC or any other event or development that has had or may reasonably be
expected to have, individually or in the aggregate, a material adverse effect on
the assets, liabilities, permits, business, financial condition, results of
operations or prospects of BSC on a consolidated basis;
(b) any damage, destruction or other casualty loss (whether or not
covered by insurance) that has had or may reasonably be expected to have a
material adverse effect on the assets, liabilities, business, financial
condition, results of operations or prospects of BSC on a consolidated basis or
that may involve a loss of more than $50,000 in excess of applicable insurance
coverage;
(c) any amendment, modification or termination of any existing, or
entry into any new, material contract or permit that has had or may reasonably
be expected to have a material adverse effect on the assets, liabilities,
business, financial condition, results of operations or prospects of BSC on a
consolidated basis;
(d) any disposition by BSC of an asset the lack of which has had or
may reasonably be expected to have a material adverse effect on the assets,
liabilities, business, financial condition, results of operations or prospects
of BSC on a consolidated basis; or
(e) any direct or indirect redemption, purchase or other acquisition
by BSC of any equity securities or any declaration, setting aside or payment of
any dividend or other distribution on or in respect of BSC Stock whether
consisting of money, other personal property, real property or other things of
value.
4.18. Licenses and Permits. BSC has all material licenses and permits
--------------------
that are necessary for the conduct of its business, and such licenses are in
full force and effect, except for any failure to be in full force and effect
that would not, individually or in the aggregate, have a material adverse effect
on the business, financial condition, results of operations or prospects of BSC
on a consolidated basis. The properties, assets, operations and businesses of
BSC are and have been maintained and conducted, in all material respects, in
compliance with all applicable (a) licenses and permits; and (b) laws and
regulations.
4.19. Undisclosed Liabilities. BSC does not have any liabilities or
-----------------------
obligations, either accrued or contingent, that are material to BSC and that
have not been: (a) reflected or disclosed in the Financial Statements of BSC;
(b) incurred subsequent to December 31, 1998 in the ordinary course of business
consistent with past practices; or (c) disclosed in a list furnished by BSC to
GBB (the "Undisclosed Liabilities List") or on any other BSC List. BSC does not
know of any basis for the assertion against it of any liability, obligation or
claim (including, without limitation, that of any regulatory authority) that is
likely to result in or cause a material adverse change in the business,
financial condition, results of operations or prospects of BSC on a consolidated
basis that is not fairly reflected in the Financial Statements of BSC or
otherwise disclosed in this Agreement.
4.20. Employee Benefit Plans.
----------------------
(a) BSC has previously made available to GBB copies of each
"employee benefit plan," as defined in Section 3(3) of ERISA, of which BSC or
any member of the same controlled group of corporations, trades or businesses
as BSC within the meaning of Section 4001(a)(14) of ERISA ("ERISA Affiliates")
is a sponsor or participating employer or as to which BSC or any of its ERISA
Affiliates makes contributions or is required to make contributions and which
is subject to any provision of ERISA and covers any employee, whether active
or retired, of BSC or any of its ERISA Affiliates, together with all
amendments thereto, all currently effective and related summary plan
descriptions, the determination letter from the IRS, the annual reports for
the most recent three years (Form 5500 including, if applicable, Schedule B
thereto) and a summary of material modifications and all material employee
communications prepared in connection with any such plan. Such plans are
hereinafter referred to collectively as
the "Employee Plans." BSC does not participate in an employee benefit pension
plan that is a "multiemployer plan" within the meaning of Section 3(37) of
ERISA. Each Employee Plan which is intended to be qualified in form and
operation under Section 401(a) of the Code is so qualified and the associated
trust for each such Employee Plan is exempt from tax under Section 501(a) of
the Code. No event has occurred that will subject such Employee Plans to a
material amount of tax under Section 511 of the Code. All amendments required
to bring each Employee Plan into conformity with all of the applicable
provisions of ERISA, the Code and all other applicable laws have been made.
Except as disclosed in a list furnished by BSC to GBB (the "BSC Employee Plan
List"), all Employee Plans were in effect for substantially all of 1999, and
there has been no material amendment thereof (other than amendments required
to comply with applicable law) or increase in the cost thereof or benefits
thereunder on or after January 1, 1999.
(b) BSC has previously made available to GBB copies or descriptions of
each plan or arrangement maintained or otherwise contributed to by BSC or any of
its ERISA Affiliates which is not an Employee Plan and which (exclusive of base
salary and base wages) provides for any form of current or deferred
compensation, bonus, stock option, stock awards, stock-based compensation or
other forms of incentive compensation or post-termination insurance, profit
sharing, benefit, retirement, group health or insurance, disability, workers'
compensation, welfare or similar plan or arrangement for the benefit of any
employee or class of employees, whether active or retired, of BSC or any of its
ERISA Affiliates (such plans and arrangements being collectively referred to
herein as "Benefit Arrangements"). Except as disclosed in the BSC Employee Plan
List hereto, all Benefit Arrangements which are in effect were in effect for
substantially all of 1999 and to date. Except as disclosed in the BSC Employee
Plan List, there has been no material amendment thereof or increase in the cost
thereof or benefits payable thereunder since January 1, 1998. Except as set
forth in the BSC Employee Plan List, there has been no material increase in the
compensation of or benefits payable to any senior executive employee of BSC
since December 31, 1998, nor any employment, severance or similar contract
entered into with any such employee, nor any amendment to any such contract,
since December 31, 1998.
(c) With respect to all Employee Plans and Benefit Arrangements, BSC
and its ERISA Affiliates are in compliance (other than noncompliance the cost or
liability for which is not material) with the requirements prescribed by any and
all statutes, governmental or court orders, or governmental rules or regulations
currently in effect, including but not limited to ERISA and the Code, applicable
to such plans or arrangements. All government reports and filings required by
law have been properly and timely filed and all information required to be
distributed to participants or beneficiaries has been distributed with respect
to each Employee Plan. BSC and its ERISA Affiliates have performed all of their
obligations under all such Employee Plans and Benefit Arrangements in all
material aspects. There is no pending or, to the best of BSC's knowledge,
threatened legal action, proceeding or investigation against or involving any
Employee Plan or Benefit Arrangement. No condition exists that could constitute
grounds for the termination of any Employee Plan under Section 4042 of ERISA.
No "prohibited transaction," as defined in Section 406 of ERISA and Section 4975
of the Code, has occurred with respect to any Employee Plan, or any other
employee benefit plan maintained by BSC or any of its ERISA Affiliates which is
covered by Title I of ERISA, which could subject
any person (other than a person for whom BSC is not directly or indirectly
responsible) to liability under Title I of ERISA or to the imposition of tax
under Section 4975 of the Code. No Employee Plan subject to Part III of
Subtitle B of Title I of ERISA or Section 412 of the Code, or both, has
incurred any "accumulated funding deficiency," as defined in Section 412 of
the Code, whether or not waived, nor has BSC failed to make any contribution
or pay any amount due and owing as required by the terms of any Employee Plan
or Benefit Arrangement. No "reportable event" as defined in ERISA has occurred
with respect to any of the Employee Plans. Neither BSC nor any of its ERISA
Affiliates has incurred nor expects to incur, directly or indirectly, any
liability under Title IV or ERISA arising in connection with the termination
of, or a complete or partial withdrawal from, any plan covered or previously
covered by Title IV of ERISA which could constitute a liability of GBB or of
any of its Affiliates (including BSC) at or after the Effective Time of the
Merger.
(d) Neither BSC nor any of its ERISA Affiliates has provided or is
required to provide security to any Employee Plan pursuant to Section 401(a)(29)
of the Code. Each of the Employee Plans which is intended to be a qualified
plan under Section 401(a) of the Code has received a favorable determination
letter from the Internal Revenue Service and BSC does not know of any fact which
could adversely affect the qualified status of any such Employee Plan. All
contributions required to be made to each of the Employee Plans under the terms
of the Employee Plan, ERISA, the Code or any other applicable laws have been
timely made. The Financial Statements of BSC properly reflect all amounts
required to be accrued as liabilities to date under each of the Employee Plans.
The fair market value of the assets of each Employee Plan and Benefit
Arrangement that is funded, or required to be funded under the terms of the
Employee Plan or Benefit Arrangement, ERISA, the Code or any other applicable
law, equals or exceeds the liabilities, including the present value of benefit
obligations, of such Employee Plan or Benefit Arrangement.
(e) Except for Scheduled Contracts set forth in the BSC Contract List
or as set forth in the BSC Employee Plan List, as the case may be, each Employee
Plan or Benefit Arrangement and each personal services contract, fringe benefit,
consulting contract or similar arrangement with or for the benefit of any
officer, director, employee or other person can be terminated by BSC within a
period of 30 days following the Effective Time of the Merger, without payment of
any specified amount as a penalty, bonus, premium, severance pay or other
compensation for such termination.
(f) All group health plans of BSC have been operated in compliance
with the group health plan continuation coverage requirements of Section 4980B
of the Code and with the group health plan portability, access and renewability
requirements of Sections 9801 through 9833 of the Code, and corresponding
provisions of ERISA, in all material respects.
(g) BSC has not used the services of (i) workers who have been
provided by a third party contract labor supplier for more than six months or
who may otherwise be eligible to participate in any of the Employee Plans or to
an extent that would reasonably be expected to result in the disqualification of
any of the Employee Plans or the imposition of penalties or excise taxes with
respect to the IRS, the Department of Labor, the Pension Benefit Guaranty
Corporation or any other Governmental Entity; (ii) temporary employees who have
worked for
more than six months or who may otherwise be eligible to participate in any of
the Employee Plans or to an extent that would reasonably be expected to result
in the disqualification of any of the Employee Plans or the imposition of
penalties or excise taxes with respect to the IRS, the Department of Labor,
the Pension Benefit Guaranty Corporation or any other Governmental Entity;
(iii) individuals who have provided services to BSC as independent contractors
for more than six months or who may otherwise be eligible to participate in
the Employee Plans or to an extent that would reasonably be expected to result
in the disqualification of any of the Employee Plans or the imposition of
penalties or excise taxes with respect to the IRS, the Department of Labor,
the Pension Benefit Guaranty Corporation or any other Governmental Entity or
(iv) leased employees, as that term is defined in section 414(n) of the Code.
(h) Except as set forth in the BSC Employee Plan List, with
respect to each Employee Plan that is funded wholly or partially through an
insurance policy, there will be no liability of BSC, as of the Closing Date,
under any such insurance policy or ancillary agreement with respect to such
insurance policy in the nature of a retroactive rate adjustment, loss sharing
arrangement or other actual or contingent liability arising wholly or
partially out of events occurring prior to the Closing Date.
4.21. Corporate Records. The minute books of BSC accurately reflect all
-----------------
material actions taken to this date by the respective shareholders, board of
directors and committees of BSC.
4.22. Accounting Records. BSC maintains accounting records which fairly
------------------
and accurately reflect, in all material respects, its transactions and
accounting controls exist sufficient to provide reasonable assurances that such
transactions are, in all material respects, (i) executed in accordance with its
management's general or specific authorization, and (ii) recorded as necessary
to permit the preparation of financial statements in conformity with generally
accepted accounting principles. Such records, to the extent they contain
important information pertaining to BSC which is not easily and readily
available elsewhere, have been duplicated, and such duplicates are stored safely
and securely.
4.23. Offices and ATMs. BSC has furnished to GBB a list (the "BSC
----------------
Offices List") setting forth the headquarters of BSC (identified as such) and
each of the offices and automated teller machines ("ATMs") maintained and
operated by BSC (including, without limitation, representative and loan
production offices and operations centers) and the location thereof. Except as
set forth on the BSC Offices List, BSC does not maintain any other office or ATM
or conducts business at any other location, and BSC has not applied for or
received permission to open any additional branch or operate at any other
location.
4.24. Operating Losses. BSC has furnished to GBB a list (the "BSC
----------------
Operating Losses List") setting forth any Operating Loss (as herein defined)
which has occurred at BSC during the period after December 31, 1998 to the date
of the Agreement. To the best of BSC's knowledge, no action has been taken or
omitted to be taken by any employee of BSC that has resulted in the incurrence
by BSC of an Operating Loss or that might reasonably be expected to result in
the incurrence of any individual Operating Loss which, net of any insurance
proceeds payable in respect thereof, would exceed $50,000 on an individual basis
or in the aggregate. For purposes
of this section "Operating Loss" means any loss resulting from cash shortages,
lost or misposted items, disputed clerical and accounting errors, forged
checks, payment of checks over stop payment orders, counterfeit money, wire
transfers made in error, theft, robberies, defalcations, check kiting,
fraudulent use of credit cards or ATMs, civil money penalties, fines,
litigation, claims or other similar acts or occurrences.
4.25. Loan Portfolio. BSC has furnished to GBB a list (the "BSC Loan
--------------
List") that sets forth (a) as of December 31, 1999, a description of, by type
and classification, if any, each loan, lease, other extension of credit or
commitment to extend credit by BSC; (b) sets forth as of December 31, 1999, by
type and classification, all loans, leases, other extensions and commitments to
extend credit of BSC that have been classified by its bank examiners or auditors
(external or internal) as "Watch List," "Substandard," "Doubtful," "Loss" or any
comparable classification; and (c) all consumer loans due to BSC as to which any
payment of principal, interest or any other amount is 90 days or more past due.
4.26. Investment Securities. BSC has furnished to GBB a list (the "BSC
---------------------
Investment Securities List") setting forth a description of each Investment
Security held by BSC on December 31, 1999. The BSC Investment Securities List
sets forth, with respect to each such Investment Security: (i) the issuer
thereof; (ii) the outstanding balance or number of shares; (iii) the maturity,
if applicable; (iv) the title of issue; and (v) the classification under SFAS
No. 115. BSC has no Investment Security classified as trading.
4.27. Power of Attorney. BSC has not granted any Person a power of
-----------------
attorney or similar authorization that is presently in effect or outstanding.
4.28. Facts Affecting Regulatory Approvals. To the best knowledge of
------------------------------------
BSC, there is no fact, event or condition applicable to BSC which will, or
reasonably could be expected to, adversely affect the likelihood of securing the
requisite approvals or consents of any Governmental Entity to the Merger and the
transactions contemplated by this Agreement.
4.29. Accounting and Tax Matters. To the best of BSC's knowledge, BSC
--------------------------
has not through the date hereof taken or agreed to take any action that would
prevent GBB from accounting for the business combination to be effected by the
Merger as a pooling-of-interests or would prevent the Merger from qualifying as
a tax-free reorganization under the Code.
4.30. Indemnification. Other than pursuant to the provisions of their
---------------
respective Articles of Incorporation or Bylaws, and the FSVK Agreement, BSC is
not a party to any indemnification agreement with any of its present officers,
directors, employees, agents or other persons who serve or served in any other
capacity with any other enterprise at the request of BSC (a "Covered Person"),
and to the best knowledge of BSC, there are no claims for which any Covered
Person would be entitled to indemnification by BSC if such provisions were
deemed in effect, except as set forth in a list furnished by BSC to GBB (the
"BSC Indemnification List").
4.31. Community Reinvestment Act. BSC has received rating of
--------------------------
"satisfactory" in its most recent examination or interim review with respect to
the Community Reinvestment Act.
BSC has not been advised of any supervisory concerns regarding BSC's
compliance with the Community Reinvestment Act.
4.32. Derivative Transactions. Except as set forth in a list furnished
-----------------------
by BSC to GBB (the "BSC Derivatives List"), BSC is not a party to or has agreed
to enter into an exchange traded or over-the-counter equity, interest rate,
foreign exchange or other swap, forward, future, option, cap, floor or collar or
any other contract that is not included on the balance sheet and is a derivative
contract (including various combinations thereof) or owns securities that are
referred to generically as "structured notes," "high risk mortgage derivatives,"
"capped floating rate notes," or "capped floating rate mortgage derivatives."
4.33. Trust Administration. Except for acting as a custodian or trustee
--------------------
under individual retirement accounts, BSC does not presently maintain trusts or
exercises trust powers, including, but not limited to, trust administration, and
neither of them nor any predecessor has maintained any trusts or exercised such
trust powers for a period of at least three years prior to the date hereof. The
term "trusts" as used in this Section 4.33 includes (i) any and all common law
or other trusts between an individual, corporation or other entities and BSC or
any of its predecessors, as trustee or co-trustee, including, without
limitation, pension or other qualified or nonqualified employee benefit plans,
compensation, testamentary, inter vivos, and charitable trust indentures; (ii)
any and all decedents' estates where BSC or any of its predecessors is serving
or has served as a co-executor or sole executor, personal representative or
administrator, administrator xx xxxxx non, administrator xx xxxxx non with will
annexed, or in any similar fiduciary capacity; (iii) any and all guardianships,
conservatorships or similar positions where BSC or any of its predecessors is
serving or has served as a co-grantor or a sole grantor or a conservator or co-
conservator of the estate, or any similar fiduciary capacity; and (iv) any and
all agency and/or custodial accounts and/or similar arrangements, including plan
administrator for employee benefit accounts, under which BSC or any of its
predecessors is serving or has served as an agent or custodian for the owner or
other party establishing the account with or without investment authority.
4.34. Disclosure Documents and Applications. None of the information
-------------------------------------
supplied or to be supplied by or on behalf of BSC ("BSC Supplied Information")
for inclusion in (a) the Registration Statement on Form S-4 and the Proxy
Statement and Prospectus and (b) any other documents to be filed with the SEC,
the FRB, the DFI or any other Governmental Entity in connection with the
transactions contemplated in this Agreement, will, at the respective times such
documents are filed or become effective, or with respect to the Proxy Statement
and Prospectus when mailed, contain any untrue statement of a material fact, or
omit to state any material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under which
they were made, not misleading.
4.35. Intellectual Property. Except as set forth in a list furnished by
---------------------
BSC to GBB (the "BSC Intellectual Property List"), BSC owns or possesses valid
and binding licenses and other rights to use without payment all material
patents, copyrights, trade secrets, trade names, service marks and trademarks
used in their respective businesses; and BSC has not received any notice with
respect thereto that asserts the rights of others. BSC has in all material
respects performed all the obligations required to be performed by them, and are
not in default in any material
respect under any license, contract, agreement, arrangement or commitment
relating to any of the foregoing.
4.36. Insider Loans; Other Transactions. BSC has previously provided GBB
---------------------------------
or its agent with a listing, current as of December 31, 1999, of all extensions
of credit made by BSC to each of its executive officers and directors and their
related interests (all as defined under Federal Reserve Board Regulation O), all
of which have been made in compliance with Regulation O, and Section 23B under
the Federal Reserve Act which listing is true, correct and complete in all
material respects. BSC does not owe any amount to, or has any contract or lease
with or commitment to, any of the present executive officers or directors of BSC
(other than for compensation for current services not yet due and payable,
reimbursement of expenses arising in the ordinary course of business, options or
awards available under the BSC Stock Option Plans or any amounts due pursuant to
BSC's Employee Plans).
4.37. Registration Obligation. BSC is not under any obligation,
-----------------------
contingent or otherwise, to register any of their respective securities under
the Securities Act.
4.38. Accuracy and Currentness of Information Furnished. The
-------------------------------------------------
representations and warranties made by BSC hereby or in the BSC Lists or
schedules hereto do not contain any untrue statement of a material fact or omit
to state any material fact which is necessary under the circumstances under
which they were made to prevent the statements contained herein or in such
schedules from being misleading.
ARTICLE 5.
REPRESENTATIONS AND WARRANTIES OF GBB
-------------------------------------
GBB represents and warrants to BSC as follows:
5.1. Incorporation, Standing and Power. GBB has been duly organized, is
---------------------------------
validly existing and in good standing as a corporation under the laws of the
State of California and is registered as a bank holding company under the BHC
Act. Newco has been duly organized, is validly existing and in good standing as
corporation under the laws of the State of California. GBB and Newco each has
all requisite corporate power and authority to own, lease and operate its
properties and assets and to carry on its business as presently conducted. Each
of GBB and Newco is duly qualified and in good standing as a foreign
corporation, and is authorized to do business, in all states or other
jurisdictions in which such qualification or authorization is necessary, except
where the failure to be so qualified or authorized would not, individually or in
the aggregate, have a material adverse effect on the business, financial
condition, results of operations or prospects of GBB on a consolidated basis.
True and correct copies of the Articles of Incorporation and Bylaws of GBB and
Newco have been delivered to BSC. Such Articles of Incorporation and Bylaws are
in full force and effect as of the date hereof.
5.2. Capitalization.
--------------
(a) As of the date of this Agreement, the authorized capital stock of
GBB consists of 24,000,000 shares of common stock, no par value, of which
12,848,812 shares are outstanding as of January 25, 2000, and 4,000,000 shares
of preferred stock, no par value, of which no shares are outstanding. All of
the outstanding shares of GBB Stock are duly authorized, validly issued, fully
paid and nonassessable. The GBB Stock to be used in the Merger will be duly
authorized, validly issued, fully paid and nonassessable.
(b) As of the date of this Agreement, the authorized capital stock of
Newco consists of 10,000 shares of common stock, no par value of which 1000
shares are outstanding and owned of record and beneficially by GBB. All the
outstanding shares of such common stock are duly authorized, validly issued,
fully paid and nonassessable. There are no outstanding options, warrants or
other rights in or with respect to the unissued shares of such common stock or
any other securities convertible into such stock, and Newco is not obligated to
issue any additional shares of its common stock or any options, warrants or
other rights in or with respect to the unissued shares of its common stock or
any other securities convertible into such stock.
5.3. Financial Statements. GBB has previously furnished to BSC a copy of
--------------------
the Financial Statements of GBB. The Financial Statements of GBB: (a) present
fairly and accurately the consolidated financial condition of GBB as of the
respective dates indicated and its consolidated results of operations and
changes in cash flows, as applicable, for the respective periods then ended,
subject, in the case of the unaudited consolidated interim financial statements,
to normal recurring adjustments; (b) have been prepared in accordance with
generally accepted accounting principles consistently applied (except as
otherwise indicated therein); (c) set forth as of the respective dates indicated
adequate reserves for loan losses and other contingencies; and (d) are based
upon the books and records of GBB and its subsidiaries.
5.4. Reports and Filings. Since January 1, 1996, GBB has filed all
-------------------
reports, returns, registrations and statements (collectively, "GBB Filings"),
together with any amendments required to be made with respect thereto, that were
required to be filed with (a) the SEC, (b) the FRB, and (c) any other applicable
Governmental Entity, including taxing authorities, except where the failure to
file such reports, returns, registrations or statements has not had and is not
reasonably expected to have a material adverse effect on the business, financial
condition, results of operations or prospects of GBB on a consolidated basis.
No administrative actions have been taken or orders issued in connection with
such GBB Filings. As of their respective dates, each of such GBB Filings (y)
complied in all material respects with all laws and regulations enforced or
promulgated by the Governmental Entity with which it was filed (or was amended
so as to be in such compliance promptly following discovery of any such
noncompliance); and (z) did not contain any untrue statement of a material fact
or omit to state a material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they were
made, not misleading. Any financial statement contained in any of such GBB
Filings that was intended to present the financial position of GBB on a
consolidated basis fairly presented the financial position of GBB on a
consolidated basis and was prepared in accordance with generally accepted
accounting principles or banking regulations consistently applied, except as
stated therein, during the periods involved.
5.5. Authority. The execution and delivery by GBB of this Agreement and
---------
the Agreement of Merger, and, subject to the approval of the shareholders of GBB
of this Agreement and the transactions contemplated hereby, including the
increase of shares reserved under the GBB Stock Option Plan, the consummation of
the transactions contemplated hereby and thereby have been duly and validly
authorized by all necessary corporate action on the part of GBB. This Agreement
is, and the Agreement of Merger will be, upon due execution and delivery by the
respective parties hereto, valid and binding obligations of GBB enforceable in
accordance with their respective terms, except as the enforceability thereof may
be limited by bankruptcy, liquidation, receivership, conservatorship,
insolvency, moratorium or other similar laws affecting the rights of creditors
generally and by general equitable principles. Except as set forth in a list
furnished by GBB to BSC (the "GBB Conflicts and Consents List"), neither the
execution and delivery by GBB of this Agreement or the Agreement of Merger, the
consummation of the transactions contemplated herein or therein, nor compliance
by GBB with any of the provisions hereof or thereof, will: (a) conflict with or
result in a breach of any provision of its Articles of Incorporation, as
amended, or Bylaws, as amended; (b) constitute a breach of or result in a
default (or give rise to any rights of termination, cancellation or
acceleration, or any right to acquire any securities or assets) under any of the
terms, conditions or provisions of any note, bond, mortgage, indenture,
franchise, license, permit, agreement or other instrument or obligation to which
GBB or any GBB Subsidiary is a party, or by which GBB or any GBB Subsidiary or
any of its properties or assets is bound; (c) result in the creation or
imposition of any Encumbrance on any of the respective properties or assets of
GBB or any GBB Subsidiary; or (d) violate any order, writ, injunction, decree,
statute, rule or regulation applicable to GBB or any GBB Subsidiary or any of
its respective properties or assets. Except as set forth in the GBB Conflicts
and Consents List, no consent of, approval of, notice to or filing with any
Governmental Entity having jurisdiction over any aspect of the business or
assets of GBB or any of its subsidiaries, and no consent of, approval of or
notice to any other Person, is required in connection with the execution and
delivery by GBB of this Agreement or the Agreement of Merger, or the
consummation by GBB of the Merger or the transactions contemplated hereby or
thereby, except (i) such approvals as may be required by the FRB, the FDIC and
the DFI; (ii) the filing of the Proxy Statement and Prospectus and Registration
Statement on Form S-4 with the SEC and the issuance by the SEC of an order
declaring the Registration Statement on Form S-4 effective; (iii) the approval
of this Agreement and the transactions contemplated hereby by the shareholders
of GBB; (iv) the filing of the Agreement of Merger with the Secretary of State
of the State of California; and (v) such approvals as may be required to approve
for inclusion on the Nasdaq National Market System of the GBB Stock to be issued
in the Merger.
(b) Of Newco. The execution and delivery by Newco of this Agreement
--------
and the Agreement of Merger and, subject to the requisite approval of the
shareholder of Newco, the consummation of the transactions contemplated hereby
and thereby, have been duly and validly authorized by all necessary corporate
action on the part of Newco, and this Agreement and the Agreement of Merger will
be, upon due execution and delivery by the respective parties, a valid and
binding obligation of Newco enforceable in accordance with its terms, except as
the enforceability thereof may be limited by bankruptcy, liquidation,
receivership, conservatorship, insolvency, moratorium or other similar laws
affecting the rights of creditors generally and by general equitable principles.
Neither the consummation of the transactions contemplated by this
Agreement and the Agreement of Merger, nor compliance by Newco with any of the
provisions hereof or thereof, will: (a) conflict with or result in a breach of
any provision of its Articles of Incorporation or Bylaws; (b) constitute a
breach of or result in a default (or give rise to any rights of termination,
cancellation or acceleration, or any right to acquire any securities or
assets) under any of the terms, conditions or provisions of any note, bond,
mortgage, indenture, franchise, license, permit, agreement or other instrument
or obligation to which Newco is a party, or by which Newco or any of its
properties or assets is bound: (c) result in the creation or imposition of any
Encumbrance on any of the properties or assets of Newco; or (d) violate any
order, writ, injunction, decree, statute, rule or regulation applicable to
Newco or any of its properties or assets. No consent of, approval of, notice
to or filing with any Governmental Entity having jurisdiction over any aspect
of the business or assets of Newco, and no consent of, approval of or notice
to any other Person, is required in connection with the execution and delivery
by Newco of this Agreement or the Agreement of Merger or the consummation by
Newco of the transactions contemplated hereby or thereby, except (i) the
approval of the Agreement of Merger and the transactions contemplated hereby
by the shareholder of Newco, (ii) such approvals as may be required by the
SEC, the FRB, the DFI, the FDIC or any other Governmental Authority; and (iii)
filing of the Agreement of Merger with the Secretary of State of the State of
California.
5.6. Subsidiaries. As of the date of this Agreement, GBB owns, directly
------------
or indirectly, 100% of the outstanding stock of each of the GBB Subsidiaries.
As of the date of this Agreement, and except for its investments in the GBB
Subsidiaries, GBB Capital I and GBB Capital II, GBB does not own, directly or
indirectly (except as a pledgee pursuant to loans or upon acquisition in
satisfaction of debt previously contracted), the outstanding stock or equity or
other voting interest in any other Person. GBB and Mt. Diablo Bancshares
entered into an Agreement and Plan of Reorganization, dated as of September 15,
1999, pursuant to which Mt. Diablo Bancshares will merge with and into GBB and
Mt. Diablo National Bank, a wholly owned subsidiary of Mt. Diablo Bancshares,
will become a wholly owned subsidiary of GBB. GBB and Coast Bancorp entered
into an Agreement and Plan of Reorganization, dated as of December 14, 1999,
pursuant to which Coast Bancorp will merge with and into GBB and Coast
Commercial Bank, a wholly owned subsidiary of Coast Bancorp, will become a
wholly owned subsidiary of GBB.
5.7. Brokers and Finders. Except for the obligation to Xxxxxx & Xxxxxx
-------------------
Incorporated, as set forth in a letter agreement dated June 22, 1998, as
supplemented on December 28, 0000, XXX is not a party to or obligated under any
agreement with any broker or finder relating to the transactions contemplated
hereby, and neither the execution of this Agreement nor the consummation of the
transactions provided for herein will result in any liability to any broker or
finder.
5.8. Certain Material Changes. Except as specifically required,
------------------------
permitted or effected by this Agreement or as disclosed in any GBB Filings,
since December 31, 1998, there has not been, occurred or arisen any of the
following (whether or not in the ordinary course of business unless otherwise
indicated):
(a) any change in any of the assets, liabilities, permits, methods of
accounting or accounting practices, business, or manner or conducting business,
of GBB or the GBB
Subsidiaries or any other event or development that has had or may reasonably
be expected to have a material adverse effect on the assets, liabilities,
permits, business, financial condition, results of operations or prospects of
GBB on a consolidated basis;
(b) any damage, destruction or other casualty loss (whether or not
covered by insurance) that has had or may reasonably be expected to have a
material adverse effect on the assets, liabilities, permits, business, financial
condition, results of operations or prospects of GBB on a consolidated basis;
(c) any amendment, modification or termination of any existing, or
entry into any new, material contract or permit that has had or may reasonably
be expected to have a material adverse effect on the assets, liabilities,
permits, business, financial condition, results of operations or prospects of
GBB on a consolidated basis; or
(d) any disposition by GBB or any of the GBB Subsidiaries of an
asset the lack of which has had or may reasonably be expected to have a
material adverse effect on the assets, liabilities, permits, business,
financial condition, results of operations or prospects of GBB on a
consolidated basis.
5.9. Licenses and Permits. GBB has all material licenses and permits
--------------------
that are necessary for the conduct of its business, and such licenses are in
full force and effect, except for any failure to be in full force and effect
that would not, individually or in the aggregate, have a material adverse effect
on the business, financial condition, results of operations or prospects of GBB
on a consolidated basis. The properties, assets, operations and businesses of
GBB are and have been maintained and conducted, in all material respects, in
compliance with all applicable licenses and permits. The properties and
operations of GBB are and have been maintained and conducted, in all material
respects, in compliance with all applicable laws and regulations.
5.10 Corporate Records. The minute books of GBB reflect all material
-----------------
actions taken to this date by its shareholders, boards of directors and
committees.
5.11. Accounting Records. GBB maintains accounting records which fairly
------------------
and accurately reflect, in all material respects, its transactions and
accounting controls exist sufficient to provide reasonable assurances that such
transactions are, in all material respects, (i) executed in accordance with
their management's general or specific authorization, and (ii) recorded as
necessary to permit the preparation of financial statements in conformity with
generally accepted accounting principles. Such records, to the extent they
contain important information pertaining to GBB which is not easily and readily
available elsewhere, have been duplicated, and such duplicates are stored safely
and securely.
5.12. Facts Affecting Regulatory Approvals. To the best knowledge of
------------------------------------
GBB, there is no fact, event or condition applicable to GBB or any of the GBB
Subsidiaries which will, or reasonably could be expected to, adversely affect
the likelihood of securing the requisite approvals or consents of any
Governmental Entity to the Merger and the transactions contemplated by this
Agreement.
5.13. Accounting and Tax Matters. To the best knowledge of GBB, GBB has
--------------------------
not through the date hereof taken or agreed to take any action that would
prevent it from accounting for the business combination to be effected by the
Merger as a pooling-of-interests or would prevent the Merger from qualifying as
a tax-free reorganization under the Code.
5.14. Disclosure Documents and Applications. None of the information
-------------------------------------
supplied or to be supplied by or on behalf of GBB ("GBB Supplied Information")
for inclusion in (a) the Registration Statement on Form S-4 and the Proxy
Statement and Prospectus to be mailed to the shareholders of BSC in connection
with obtaining the approval of the shareholders of BSC of this Agreement, the
Merger and the other transactions contemplated hereby, and (b) any other
documents to be filed with the SEC, the FRB, the FDIC, the DFI or any other
Governmental Entity in connection with the transactions contemplated in this
Agreement, will, at the respective times such documents are filed or become
effective, or with respect to the Proxy Statement and Prospectus when mailed,
contain any untrue statement of a material fact, or omit to state any material
fact required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading.
5.15. Nasdaq Listing. As of the date hereof, GBB Stock is listed on the
--------------
Nasdaq National Market System.
5.16. Accuracy and Currentness of Information Furnished. The
-------------------------------------------------
representations and warranties made by GBB hereby or in the GBB Lists or
Schedules hereto do not contain any untrue statement of material fact or omit to
state any material fact which is necessary under the circumstances under which
they were made to prevent the statements contained herein or in such schedules
from being misleading.
ARTICLE 6.
COVENANTS OF BSC
-----------------
PENDING EFFECTIVE TIME OF THE MERGER
------------------------------------
BSC covenants and agrees with GBB as follows:
6.1. Limitation on Conduct Prior to Effective Time of the Merger.
-----------------------------------------------------------
Between the date hereof and the Effective Time of the Merger, except as
contemplated by this Agreement and subject to requirements of law and
regulation, BSC agrees to conduct its business in the ordinary course in
substantially the manner heretofore conducted and in accordance with sound
banking practices, and BSC shall not, without the prior written consent of GBB,
which consent GBB shall not unreasonably withhold or delay:
(a) issue, sell or grant any BSC Stock (except pursuant to the
exercise of BSC Options outstanding as of the date hereof), any other securities
(including long term debt) of BSC, or any rights, stock appreciation rights,
options or securities to acquire any BSC Stock, or any other securities
(including long term debt) of BSC;
(b) declare, set aside or pay any dividend or make any other
distribution upon or split, combine or reclassify any shares of capital stock or
other securities of BSC, provided, however, that subject to Section 6.10, BSC
may pay to its shareholders its regular cash dividend in amounts and in a manner
consistent with past practices;
(c) purchase, redeem or otherwise acquire any capital stock or other
securities of BSC or any rights, options, or securities to acquire any capital
stock or other securities of BSC;
(d) except as may be required to effect the transactions contemplated
herein, amend its Articles of Incorporation or Bylaws;
(e) grant any general or uniform increase in the rate of pay of
employees or employee benefits;
(f) grant any increase in salary, incentive compensation or employee
benefits or pay any bonus to any Person or voluntarily accelerate the vesting of
any employee benefits; provided, however, that, in the event GBB determines to
terminate the BSC 401(k) Plan, BSC may make a matching contribution to the BSC
401(k) Plan immediately prior to such termination in an amount equal to the pro
rata portion of the projected annual matching contribution, which in any case
shall be consistent with past practices;
(g) make any capital expenditure or commitments with respect thereto
in excess of $50,000 in the aggregate, except for ordinary repairs, renewals and
replacements;
(h) compromise or otherwise settle or adjust any assertion or claim of
a deficiency in taxes (or interest thereon or penalties in connection
therewith), extend the statute of limitations with any tax authority or file any
pleading in court in any tax litigation or any appeal from an asserted
deficiency, or file or amend any federal, foreign, state or local tax return, or
make any tax election;
(i) grant, renew or commit to grant or renew any extension of credit
if such extension of credit, together with all other credit then outstanding to
the same Person and all Affiliated Persons, would exceed $500,000 on an
unsecured basis, or $1,000,000 if secured by a lien on real estate or cash
(consent shall be deemed granted if within two Business Days of written notice,
together with all relevant documents, delivered to GBB's Chief Credit Officer,
written notice of objection is not received by BSC);
(j) change its tax or accounting policies and procedures or any method
or period of accounting unless required by generally accepted accounting
principles or a Governmental Entity;
(k) grant or commit to grant any extension of credit or amend the
terms of any such credit outstanding on the date hereof to any executive
officer, director or holder of 10% or more of the outstanding BSC Stock, or any
Affiliate of such Person, if such credit would exceed $50,000;
(l) close any offices at which business is conducted or open any new
offices;
(m) adopt or enter into any new employment agreement or other employee
benefit plan or arrangement or amend or modify any employment agreement or
employee benefit plan or arrangement of any such type except for such amendments
as are required by law;
(n) initiate, solicit or encourage (including by way of furnishing
information or assistance), or take any other action to facilitate, any
inquiries or the making of any proposal which constitutes, or may reasonably be
expected to lead to, any Competing Transaction (as such term is defined below),
or negotiate with any person in furtherance of such inquiries or to obtain a
Competing Transaction, or agree to or endorse any Competing Transaction, or
authorize or permit any of its officers, directors or employees or any
investment banker, financial advisor, attorney, accountant or any other
representative retained by it or any of its Affiliates to take any such action,
and BSC shall promptly notify GBB (orally and in writing) of all of the relevant
details relating to all inquiries and proposals which it may receive relating to
any of such matters. For purposes of this Agreement, "Competing Transaction"
shall mean any of the following involving BSC: any merger, consolidation, share
exchange or other business combination; a sale, lease, exchange, mortgage,
pledge, transfer or other disposition of assets of BSC representing 10% or more
of the consolidated assets of BSC; a sale of shares of capital stock (or
securities convertible or exchangeable into or otherwise evidencing, or any
agreement or instrument evidencing, the right to acquire capital stock),
representing 10% or more of the voting power of BSC; a tender offer or exchange
offer for at least 10% of the outstanding shares of BSC; a solicitation of
proxies in opposition to approval of the Merger by BSC's shareholders; or a
public announcement of an unsolicited bona fide proposal, plan, or intention to
do any of the foregoing. BSC will immediately cease and cause to be terminated
any existing activities, discussions or negotiations with any parties (other
than GBB) conducted heretofore with respect to any of the foregoing. BSC shall
take the necessary steps to inform promptly the appropriate individuals or
entities referred to above of the obligations undertaken in this Section. BSC
agrees that it shall notify GBB immediately if any such inquiries, proposals or
offers are received by, any such information is requested from, or any such
negotiations or discussions are sought to be initiated or continued with BSC.
BSC also agrees that it shall promptly request each other person, other than
GBB, that has heretofore executed a confidentiality agreement in connection with
its consideration of acquiring BSC to return all confidential information
heretofore furnished to such person by or on behalf of BSC and enforce any such
confidentiality agreements. Notwithstanding any other provision in this Section
6.1(n), nothing in this Agreement shall prevent BSC from (i) engaging in any
discussions or negotiations with, or providing any information to, any Person in
response to an unsolicited bona fide written proposal concerning a Competing
Transaction by any such Person or (ii) recommending such an unsolicited bona
fide written proposal concerning a Competing Transaction to the holders of BSC
Stock if and only if, prior to participating in any of the foregoing, (A) the
Board of Directors of BSC concludes in good faith that the Competing
Transaction, if consummated, would result in a transaction more favorable to
holders of BSC Stock than the transaction contemplated by this Agreement (any
such more favorable Competing Transaction being referred to in this Agreement as
a "Superior Proposal"); (B) the Board of Directors of BSC determines in good
faith based upon the advice of outside counsel that participating in any such
action is
necessary for it to act in a manner not inconsistent with its fiduciary duties
under applicable law; and (C) at least forty-eight (48) hours prior to
providing any information or data to any person or entering into discussions
or negotiations with any Person, the Board of Directors of BSC notifies GBB of
such inquiries, proposals or offers received by, any such information
requested from, or any such discussions or negotiations sought to be initiated
or continued with BSC;
(o) change any basic policies and practices with respect to liquidity
management and cash flow planning, marketing, deposit origination, lending,
budgeting, profit and tax planning, personnel practices or any other material
aspect of BSC's business or operations, except such changes as may be required
in the opinion of BSC's management to respond to economic or market conditions
or as may be required by any Governmental Entity;
(p) grant any Person a power of attorney or similar authority;
(q) make any investment by purchase of stock or securities (including
an Investment Security), contributions to capital, property transfers or
otherwise in any other Person, except for federal funds, obligations of the
United States Treasury or an agency of the United States Government the
obligations of which are entitled to or implied to have the full faith and
credit of the United States government and which have an original maturity not
in excess of one year, bank qualified investment grade municipal bonds, in any
case, in the ordinary course of business consistent with past practices and
which are not designated as trading (consent shall be deemed granted if within
three Business Days of written notice together with all relevant documents
delivered to GBB's Chief Financial Officer or Controller, written notice of
objection is not received by BSC);
(r) amend or modify any Scheduled Contract or enter into any agreement
or contract that would be a Scheduled Contract under Section 4.16;
(s) sell, transfer, mortgage, encumber or otherwise dispose of any
assets or release or waive any claim, except in the ordinary course of business
and consistent with past practices;
(t) take any action which would or is reasonably likely to (i)
adversely affect the ability of GBB or BSC to obtain any necessary approval of
any Governmental Entity required for the transactions contemplated hereby; (ii)
adversely affect BSC's ability to perform its covenants and agreements under
this Agreement; or (iii) result in any of the conditions to the performance of
GBB's or BSC's obligations hereunder, as set forth in Articles 9, 10 or 11
herein not being satisfied;
(u) make any special or extraordinary payments to any Person;
(v) reclassify any Investment Security from held-to-maturity or
available for sale to trading;
(w) sell any security other than in the ordinary course of business,
or engage in gains trading;
(x) take title to any real property without conducting prior thereto
an environmental investigation, which investigation shall disclose the absence
of any suspected environmental contamination;
(y) take or cause to be taken any action which would disqualify the
Merger as a "reorganization" within the meaning of Section 368 of the Code or
prevent GBB from accounting for the business combination to be effected by the
Merger as a pooling-of-interests;
(z) settle any claim, action or proceeding involving any material
liability for monetary damages or enter into any settlement agreement containing
material obligations;
(aa) make, acquire a participation in, or reacquire an interest in a
participation sold of, any loan that is not in compliance with its normal credit
underwriting standards, policies and procedures as in effect on December 31,
1998; or renew, extend the maturity of, or alter any of the material terms of
any such loan for a period of greater than six months;
(bb) incur any indebtedness for borrowed money or assume, guaranty,
endorse or otherwise as an accommodation become responsible for the obligations
of any other person, except for (i) in connection with banking transactions with
banking customers in the ordinary course of business, or (ii) short-term
borrowings made at prevailing market rates and terms;
(cc) make any contributions to the Bank of Santa Xxxxx Foundation;
provided, however, that, between the date of this Agreement and the Closing
Date, the Bank of Santa Xxxxx Foundation may distribute the funds currently
maintained by such Foundation in accordance with its charter; or
(dd) agree or make any commitment to take any actions prohibited by
this Section 6.1.
6.2 Affirmative Conduct Prior to Effective Time of the Merger. Between
---------------------------------------------------------
the date hereof and the Effective Time of the Merger, BSC shall:
(a) use its commercially reasonable efforts consistent with this
Agreement to maintain and preserve intact its present business organization and
to maintain and preserve its relationships and goodwill with account holders,
borrowers, employees and others having business relationships with BSC;
(b) use its commercially reasonable efforts to keep in full force and
effect all of the existing material permits and licenses of BSC;
(c) use its commercially reasonable efforts to maintain insurance
coverage at least equal to that now in effect on all properties which it owns or
leases and on its business operations;
(d) perform its material contractual obligations and not become in
material default on any such obligations;
(e) duly observe and conform in all material respects to all lawful
requirements applicable to its business;
(f) maintain its assets and properties in good condition and repair,
normal wear and tear excepted;
(g) promptly upon learning of such information, advise GBB in writing
of any event or any other transaction whereby any Person or Related Group of
Persons acquires, directly or indirectly, record or beneficial ownership or
control (as defined in Rule 13d-3 promulgated by the SEC under the Exchange Act)
of 5% or more of the outstanding BSC Stock prior to the record date fixed for
the BSC Shareholders' Meeting or any adjourned meeting thereof to approve this
Agreement and the transactions contemplated herein;
(h) promptly notify GBB regarding receipt from any tax authority of
any notification of the commencement of an audit, any request to extend the
statute of limitations, any statutory notice of deficiency, any revenue agent's
report, any notice of proposed assessment, or any other similar notification of
potential adjustments to the tax liabilities of BSC, or any actual or threatened
collection enforcement activity by any tax authority with respect to tax
liabilities of BSC;
(i) make available to GBB monthly unaudited balance sheets and income
statements of BSC within 25 days after the close of each calendar month;
(j) not later than the 30th day of each calendar month, amend or
supplement the BSC Lists prepared and delivered pursuant to Article 4 to ensure
that the information set forth in the BSC Lists accurately reflects the then-
current status of BSC in all material respects;
(k) use its commercially reasonable efforts to obtain any third party
consent with respect to any contract, agreement, lease, license, arrangement,
permit or release that is material to the business of BSC or that is
contemplated in this Agreement as required in connection with the Merger;
(l) maintain an allowance for loan and lease losses consistent with
practices and methodology as in effect on the date of the execution of this
Agreement; and
(m) furnish to Manatt, Xxxxxx & Xxxxxxxx, LLP promptly upon its
written request written representations and certificates as deemed reasonably
necessary or appropriate for purposes of enabling Manatt, Xxxxxx & Xxxxxxxx, LLP
to render the tax opinion referred to in Section 9.6 hereof.
6.3 Access to Information.
---------------------
(a) BSC will afford, upon reasonable notice, to GBB and its
representatives, counsel, accountants, agents and employees reasonable access
during normal business hours to all of their business, operations, properties,
books, files and records and will do everything reasonably necessary to enable
GBB and its representatives, counsel, accountants, agents and employees to make
a complete examination of the financial statements, business, assets and
properties of BSC and the condition thereof and to update such examination at
such intervals as GBB shall deem appropriate. Such examination shall be
conducted in cooperation with the officers of BSC and in such a manner as to
minimize any disruption of, or interference with, the normal business operations
of BSC. Upon the request of GBB, BSC will request Xxxxx Xxxxxxxx to provide
reasonable access to representatives of PwC working on behalf of GBB to
auditors' work papers with respect to the business and properties of BSC,
including tax accrual work papers prepared for BSC during the preceding 60
months, other than (a) books, records and documents covered by the attorney-
client privilege, or that are attorneys' work product, and (b) books, records
and documents that BSC is legally obligated to keep confidential. No
examination or review conducted under this section shall constitute a waiver or
relinquishment on the part of GBB of the right to rely upon the representations
and warranties made by BSC herein; provided, that GBB shall disclose to BSC any
fact or circumstance it may discover which GBB believes renders any
representation or warranty made by BSC hereunder incorrect in any respect. GBB
covenants and agrees that it, its subsidiaries, and their respective
representatives, counsel, accountants, agents and employees will hold in strict
confidence all documents and information concerning BSC so obtained from any of
them (except to the extent that such documents or information are a matter of
public record or require disclosure in the Proxy Statement and Prospectus or any
of the public information of any applications required to be filed with any
Governmental Entity to obtain the approvals and consents required to effect the
transactions contemplated hereby), and if the transactions contemplated herein
are not consummated, such confidence shall be maintained and all such documents
shall be returned to BSC.
(b) A representative of GBB, selected by GBB in its sole discretion,
shall be authorized and permitted to review each loan, lease, or other credit
funded or renewed by BSC after the date hereof, and all information associated
with such loan, lease or other credit, such review to take place, if possible,
on BSC's premises.
(c) A representative of GBB, selected by GBB in its sole discretion,
shall be permitted by BSC to attend all regular and special Board of Directors'
and committee meetings of BSC from the date hereof until the Effective Time of
the Merger; provided, however, that the attendance of such representative shall
not be permitted at any meeting, or portion thereof, for the sole purpose of
discussing the transactions contemplated by this Agreement or the obligations of
BSC under this Agreement.
6.4 Filings. BSC agrees that through the Effective Time of the Merger,
-------
each of BSC's reports, registrations, statements and other filings required to
be filed with any applicable Governmental Entity will comply in all material
respects with all the applicable statutes, rules and regulations enforced or
promulgated by the Governmental Entity with which it will be filed
and none will contain any untrue statement of material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading. Any financial statement contained in any such report,
registration, statement or other filing that is intended to present the
financial position of the entity to which it relates will fairly present the
financial position of such entity and will be prepared in accordance with
generally accepted accounting principles or applicable banking regulations
consistently applied during the periods involved.
6.5 Notices; Reports. BSC will promptly notify GBB of any event of
----------------
which BSC obtains knowledge which has had or may have a materially adverse
effect on the financial condition, operations, business or prospects of BSC on a
consolidated basis, or in the event that BSC determines that it is unable to
fulfill any of the conditions to the performance of GBB's obligations hereunder,
as set forth in Articles 9 or 11 herein, and BSC will furnish GBB (i) as soon as
available, and in any event within one Business Day after it is mailed or
delivered to the Board of Directors of BSC or committees thereof, any report by
BSC for submission to the Board of Directors of BSC or committees thereof,
provided, however, that BSC need not furnish to GBB communications of BSC's
legal counsel regarding BSC's rights and obligations under this Agreement or the
transactions contemplated hereby, or books, records and documents covered by
confidentiality agreements or the attorney-client privilege, or which are
attorneys' work product, (ii) as soon as available, all proxy statements,
information statements, financial statements, reports, letters and
communications sent by BSC to its shareholders or other security holders, and
all reports filed by BSC with the FDIC or the DFI, and (iii) such other existing
reports as GBB may reasonably request relating to BSC.
6.6 BSC Shareholders' Meeting. Promptly after the execution of this
-------------------------
Agreement, BSC will take action necessary in accordance with applicable law and
its Articles of Incorporation and Bylaws to convene a meeting of its
shareholders to consider and vote upon this Agreement and the transactions
contemplated hereby so as to permit the consummation of the transactions
contemplated hereby. The Board of Directors of BSC shall, subject to its
fiduciary duties, recommend that its shareholders approve this Agreement and the
transactions contemplated hereby, and the Board of Directors of BSC shall,
subject to its fiduciary duties, use its best efforts to obtain the affirmative
vote of the holders of the largest possible percentage of the outstanding BSC
Stock to approve this Agreement and the transactions contemplated hereby.
6.7 Certain Loans and Other Extensions of Credit. BSC will promptly
--------------------------------------------
inform GBB of the amounts and categories of any loans, leases or other
extensions of credit that have been classified by any bank regulatory authority
or by any unit of BSC or by any other Person as "Criticized," "Specially
Mentioned," "Substandard," "Doubtful," "Loss" or any comparable classification
("Classified Credits"). BSC will furnish GBB, as soon as practicable, and in
any event within 20 days after the end of each calendar month, schedules
including the following: (a) Classified Credits (including with respect to each
credit its classification category and the originating unit); (b) nonaccrual
credits (including the originating unit); (c) accrual exception credits that are
delinquent 90 or more days and have not been placed on nonaccrual status
(including its originating unit); (d) credits delinquent as to payment of
principal or interest (including its originating unit), including an aging into
current-to-29, 30-59, 60-89, and 90+ day categories; (e) participating loans and
leases, stating, with respect to each, whether it is purchased
or sold and the originating unit; (f) loans or leases (including any
commitments) by BSC to any BSC director, officer at or above the senior vice
president level, or shareholder holding 10% or more of the capital stock of
BSC, including with respect to each such loan or lease the identity and, to
the knowledge of BSC, the relation of the borrower to BSC, and the outstanding
and undrawn amounts; (g) letters of credit (including the originating unit);
(h) loans or leases wholly or partially charged off during the previous month
(including with respect to each loan or lease, the originating amount, the
write-off amount and its originating unit); and (i) other real estate or
assets acquired in satisfaction of debt.
6.8 Applications. Subject to Section 7.5, BSC will promptly prepare or
------------
cause to be prepared the portions of the Proxy Statement and Prospectus as it
pertains to BSC and any other applications necessary, including applications to
the FDIC and the DFI, to consummate the transactions contemplated hereby, and
further agrees to provide any information requested by GBB for the preparation
of any applications necessary to consummate the transactions contemplated
hereby. BSC shall afford GBB a reasonable opportunity to review the portions of
the Proxy Statement and Prospectus pertaining to BSC and all such applications
and all amendments and supplements thereto before the filing thereof. BSC
covenants and agrees that, with respect to the information relating to BSC, the
Proxy Statement and Prospectus will comply in all material respects with the
provisions of applicable law, and will not contain any untrue statement of
material fact or omit to state any material fact required to be stated therein
or necessary to make the statements contained therein, in light of the
circumstances under which they were made, not misleading. BSC will use its
commercially reasonable efforts to obtain all regulatory approvals or consents
necessary to effect the Merger and the transactions contemplated herein.
6.9 Affiliate Agreements. Concurrently with the execution of this
--------------------
Agreement, (a) BSC shall deliver to GBB a letter identifying all persons who are
then "affiliates" of BSC for purposes of ASR 130 and 135 and Rule 145 under the
Securities Act and (b) BSC shall advise the persons identified in such letter of
the resale restrictions imposed by applicable securities laws and shall use
reasonable efforts to obtain from each person identified in such letter a
written agreement substantially in the form attached hereto as Exhibit B. BSC
---------
shall use reasonable efforts to obtain from any person who becomes an affiliate
of BSC after BSC's delivery of the letter referred to above, and on or prior to
the date of the BSC Shareholders' Meeting to approve this Agreement, a written
agreement substantially in the form attached as Exhibit B hereto as soon as
---------
practicable after obtaining such status.
6.10 Coordination of Dividends. BSC shall coordinate with GBB the
-------------------------
declaration of any dividends that may be allowed pursuant to Section 6.1(b)
hereof, and the record date and the payment dates relating thereto, it being the
intention of the parties that holders of BSC Stock shall not receive two
dividends, or fail to receive one dividend, for any applicable dividend period
with respect to their shares of BSC Stock and any shares of GBB Stock any such
holder will receive in exchange therefor in the Merger.
6.11 D&O Coverage. In the event that GBB is unable to have BSC's
------------
directors and officers added to GBB's directors' and officers' liability
insurance policy pursuant to Section 7.2(d) hereof and upon GBB's request, BSC
shall use commercially reasonable efforts to obtain
(i) coverage for a period of at least 36 months following the Effective Time
of the Merger for the directors and officers of BSC under a directors' and
officers' liability insurance policy which is no less protective in terms of
coverage or limitations than now possessed by GBB covering acts or omissions
occurring prior to the Effective Time of the Merger and actions related to
this Agreement, and (ii) coverage for a period of at least 36 months following
the Effective Time of the Merger under a bankers' blanket bond which is no
less protective in terms of coverage or limitations than now possessed by BSC
covering acts or omissions occurring prior to the Effective Time of the Merger
and actions related to this Agreement.
ARTICLE 7.
COVENANTS OF GBB
-----------------
PENDING EFFECTIVE TIME OF THE MERGER
------------------------------------
GBB covenants and agrees with BSC as follows:
7.1. Limitation on Conduct Prior to Effective Time of the Merger.
-----------------------------------------------------------
Between the date hereof and the Effective Time of the Merger, except as
contemplated by this Agreement and subject to requirements of law and regulation
generally applicable to bank holding companies and banks, GBB shall not, without
the prior written consent of BSC, which consent BSC shall not unreasonably
withhold or delay:
(a) take any action which would or is reasonably likely to (i)
adversely affect the ability of GBB to obtain any necessary approvals of any
Governmental Entity required for the transactions contemplated hereby; (ii)
adversely affect GBB's ability to perform its covenants and agreements under
this Agreement; or (iii) result in any of the conditions to the performance of
GBB's obligations hereunder, as set forth in Articles 9 or 11 herein not being
satisfied;
(b) take or cause to be taken any action which would disqualify the
Merger as a "reorganization" within the meaning of Section 368 of the Code or
prevent GBB from accounting for the business combination to be effected by the
Merger as a pooling-of-interests;
(c) amend its articles of incorporation in any respect which would
materially and adversely affect the rights and privileges attendant to the GBB
Stock; or
(d) enter into a GBB Acquisition Transaction that includes as a
condition precedent to such GBB Acquisition Transaction that GBB terminate this
Agreement; provided, however, notwithstanding the foregoing, nothing in this
Agreement shall prevent GBB from entering into such a GBB Acquisition
Transaction if the Board of Directors of GBB determines in good faith based upon
the advice of counsel that taking such action is necessary for it to act in a
manner not inconsistent with its fiduciary duties under applicable law;
provided, however, that nothing herein shall prohibit BSC from terminating this
Agreement pursuant to Section 13.1(l); or
(e) agree or make any commitment to take any actions prohibited by
this Section 7.1.
7.2. Affirmative Conduct of GBB and Subsidiaries Prior to Effective Time of
----------------------------------------------------------------------
the Merger. Between the date hereof and the Effective Time of the Merger, GBB
----------
shall:
(a) duly observe and conform in all material respects to all lawful
requirements applicable to the business of GBB;
(b) use its commercially reasonable efforts to obtain any third party
consent with respect to any contract, agreement, lease, license, arrangement,
permit or release that is material to the business of GBB on a consolidated
basis and that is contemplated in this Agreement as required in connection with
the Merger;
(c) not later than the 20th day of each calendar month, amend or
supplement the GBB Lists prepared and delivered pursuant to Article 5 to ensure
that the information set forth in the GBB Lists accurately reflects the then-
current status of GBB. GBB shall further amend or supplement the GBB Lists as
of the Closing Date if necessary to reflect any additional information that
needs to be included in the GBB Lists; and
(d) use its commercially reasonable efforts to have BSC's directors
and officers added to GBB's directors' and officers' liability insurance policy,
providing for coverage for a period of at least 36 months following the
Effective Time of the Merger and covering acts or omissions occurring prior to
the Effective Time of the Merger and actions related to this Agreement.
7.3. Access to Information. Upon reasonable request by BSC, GBB shall
---------------------
(i) make its Chief Executive Officer, Chief Administrative Officer/Chief
Financial Officer, Chief Credit Officer and Controller available to discuss with
BSC and its representatives GBB's operations; and (ii) shall provide BSC with
written information which is (a) similar to the written information that BSC
reviewed in connection with this Agreement, and (b) related to GBB's business
condition, operations and prospects on a consolidated basis. No examination or
review conducted under this section shall constitute a waiver or relinquishment
on the part of BSC of the right to rely upon the representations and warranties
made by GBB herein; provided, that BSC shall disclose to GBB any fact or
circumstance it may discover which BSC believes renders any representation or
warranty made by GBB hereunder incorrect in any respect. BSC covenants and
agrees that it and its representatives, counsel, accountants, agents and
employees will hold in strict confidence all documents and information
concerning GBB so obtained (except to the extent that such documents or
information are a matter of public record or require disclosure in the Proxy
Statement and Prospectus or any of the public information of any applications
required to be filed with any Governmental Entity to obtain the approvals and
consents required to effect the transactions contemplated hereby), and if the
transactions contemplated herein are not consummated, such confidence shall be
maintained and all such documents shall be returned to GBB.
7.4. Filings. GBB agrees that through the Effective Time of the Merger,
-------
each of its reports, registrations, statements and other filings required to be
filed with any applicable Governmental Entity will comply in all material
respects with all the applicable statutes, rules
and regulations enforced or promulgated by the Governmental Entity with which
it will be filed and none will contain any untrue statement of a material fact
or omit to state a material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they
were made, not misleading. Any financial statement contained in any such
report, registration, statement or other filing that is intended to present
the financial position of the entities or entity to which it relates will
fairly present the financial position of such entities or entity and will be
prepared in accordance with generally accepted accounting principles or
applicable banking regulations consistently applied during the periods
involved.
7.5. Applications. GBB will promptly prepare and file or cause to be
------------
prepared and filed (i) an application for approval of the Merger with the FRB;
(ii) an application for approval of the Merger with the DFI; (iii) in
conjunction with BSC, the Registration Statement on Form S-4 and the Proxy
Statement and Prospectus as it pertains to GBB; and (iv) any other applications
necessary to consummate the transactions contemplated hereby. GBB shall afford
BSC a reasonable opportunity to review the Proxy Statement and Prospectus and
all such applications and all amendments and supplements thereto before the
filing thereof. GBB covenants and agrees that the Registration Statement on
Form S-4 and the Proxy Statement and Prospectus and all applications to the
appropriate regulatory agencies for approval or consent to the Merger, with
respect to information relating to GBB or its subsidiaries, will comply in all
material respects with the provisions of applicable law, and will not contain
any untrue statement of material fact or omit to state any material fact
required to be stated therein or necessary to make the statements contained
therein, in light of the circumstances under which they were made, not
misleading. GBB will use its commercially reasonable efforts to obtain all
regulatory approvals or consents necessary to effect the Merger.
7.6. Blue Sky. GBB agrees to use commercially reasonable efforts to have
--------
the shares of GBB Stock to be issued in connection with the Merger qualified or
registered for offer and sale, to the extent required, under the securities laws
of each jurisdiction in which shareholders of BSC reside.
7.7. Notices; Reports. GBB will promptly notify BSC of any event of
----------------
which GBB obtains knowledge which has had or may have a material adverse affect
on the financial condition, operations, business or prospects of GBB on a
consolidated basis or in the event that GBB determines that it is unable to
fulfill any of the conditions to the performance of BSC's obligations hereunder,
as set forth in Articles 9 or 10 herein.
7.8. Removal of Conditions. In the event of the imposition of a
---------------------
condition to any regulatory approvals which GBB deems to materially adversely
affect it or to be materially burdensome, GBB shall use its commercially
reasonable efforts for purposes of obtaining the removal of such condition.
7.9. Stock Options.
-------------
(a) At and as of the Effective Time of the Merger, GBB shall assume
each and every outstanding option to purchase shares of BSC Stock ("BSC Stock
Option") under the BSC Stock Option Plan. Subject to Section 7.9(d), each and
every BSC Stock Option so assumed by
GBB under this Agreement shall be exchanged for a substitute option under the
GBB Stock Option Plan with the following terms: (i) such BSC Stock Option
shall be exercisable for that number of whole shares of GBB Stock equal to the
product of (A) the number of shares of BSC Stock that were granted under such
BSC Stock Option immediately prior to the Effective Time of the Merger
multiplied by (B) the Conversion Ratio, with such product rounded down to the
nearest whole number of shares of GBB Stock; and (ii) the per share exercise
price for the shares of GBB Stock issuable upon exercise of such BSC Stock
Option shall be equal to the quotient determined by dividing (A) the exercise
price per share of BSC Stock at which such BSC Stock Option was exercisable
immediately prior to the Effective Time of the Merger by (B) the Conversion
Ratio. After the Effective Time of the Merger, GBB shall issue to each holder
of an outstanding BSC Stock Option a document evidencing the substitute option
pursuant to this Section 7.9.
(b) The terms of the substitute options shall correspond in all
material respects to the terms of the BSC Stock Options and, subject to the
requirements of law, the BSC Stock Options which qualify as incentive stock
options prior to the Effective Time of the Merger qualify as incentive stock
options of GBB after the Effective Time of the Merger.
(c) At or prior to the Effective Time of the Merger, GBB shall take
all corporate action necessary to reserve for issuance a sufficient number of
shares of GBB Stock for delivery upon exercise of GBB Stock Options assumed by
it in accordance with this Section 7.9. At the Effective Time of the Merger, or
as soon as practicable thereafter, GBB shall, if necessary, file a registration
statement on Form S-8 (or any successor or other appropriate form) with respect
to the shares of GBB Stock subject to such options and shall use all reasonable
efforts to maintain the effectiveness of such registration statement (and
maintain the current status of the prospectus or prospectuses contained therein)
for so long as such options remain outstanding.
(d) In the event the shareholders of GBB fail to approve an increase
in the number of shares reserved for issuance under the GBB Stock Option Plan at
the shareholders' meeting to be held in connection with the merger of GBB and
Coast Bancorp, each BSC Stock Option so assumed by GBB under this Agreement
shall continue to have, and be subject to, the same terms and conditions set
forth in the BSC Stock Option Plan and in the other documents governing such BSC
Stock Option immediately prior to the Effective Time of the Merger, except as
set forth in Section 7.9(a)(i) and (ii). In such event, the BSC Stock Option
Plan will continue in effect for the BSC Stock Options so assumed.
7.10 Reservation, Issuance and Registration of GBB Stock. GBB shall
---------------------------------------------------
reserve and make available for issuance in connection with the Merger and in
accordance with the terms and conditions of this Agreement such number of shares
of GBB Stock to be issued to the shareholders of BSC in the Merger pursuant to
Article 2 hereof.
7.11 Nasdaq Listing. GBB shall use its commercially reasonable efforts to
--------------
cause the shares of GBB Stock to be issued in the Merger to be approved for
listing on the Nasdaq National Market System, subject to official notice of
issuance, prior to the Effective Time of the Merger.
ARTICLE 8.
ADDITIONAL COVENANTS
--------------------
The parties hereto hereby mutually covenant and agree with each other as
follows:
8.1. Commercially Reasonable Efforts. Subject to the terms and
-------------------------------
conditions of this Agreement, each party will use its commercially reasonable
efforts to take, or cause to be taken, all actions and to do, or cause to be
done, all things necessary, proper or advisable under applicable laws and
regulations to consummate the transactions contemplated by this Agreement as
promptly as practical.
8.2. Public Announcements. No press release or other public disclosure
--------------------
of matters related to this Agreement or any of the transactions contemplated
hereby shall be made by GBB or BSC unless the other party shall have provided
its prior consent to the form and substance thereof; provided, however, that
nothing herein shall be deemed to prohibit any party hereto from making any
disclosure which its counsel deems necessary or advisable in order to fulfill
such party's disclosure obligations imposed by law.
8.3. Environmental Assessment and Remediation. GBB may cause to be
----------------------------------------
prepared at GBB's sole cost and expense within 45 days of the date of this
Agreement one or more phase I environmental investigations with respect to the
Real Property set forth on the BSC Real Property List. In the event any such
phase I environmental investigation report, or any such report which BSC has
already obtained on any of the Real Property set forth on BSC's Real Property
List, discloses facts which, in the sole discretion of GBB, warrant further
investigation, GBB shall provide written notice to BSC, and BSC shall be
required to cause to be completed within 60 days of such written notice, at the
sole cost and expense of GBB, a phase II environmental investigation and report
with respect to such property. The consultant engaged by BSC to conduct such
investigation and provide such report shall be reasonably acceptable to GBB.
GBB shall have 10 days from the receipt of such investigation report to
reasonably object thereto, which objection shall be by written notice. In the
event of any such objection, GBB shall engage an environmental consultant
reasonably satisfactory to BSC who shall provide an estimate of the cost of
taking any remedial action recommended or suggested in such phase II
environmental investigation report, or which is required by law, or which is
determined to be prudent by GBB, in its sole discretion, and, unless the
estimated cost of such remediation is in excess of $100,000 or is not reasonably
determinable by such consultant (and written notice thereof provided by BSC to
GBB) BSC shall immediately commence such remediation, all at the sole cost and
expense of BSC. In the event such environmental consultant determines that the
estimated cost of such remediation is in excess of $100,000 or is not reasonably
determinable, GBB shall have the right to terminate the Agreement pursuant to
Section 13.1(k) hereof before the expiration of 21 days from the date of such
written notice.
GBB agrees to keep confidential and not to disclose any nonpublic
information obtained in the course of such environmental investigation relating
to environmental contamination or suspected contamination of any property on the
BSC Real Property List, except as required by law.
8.4 Appointment of Director. GBB agrees to take all necessary action,
-----------------------
including, if necessary, increasing the authorized number of it directors, to
appoint as contemplated by Section 2.6 hereof one member of BSC's Board of
Directors to the Board of Directors of GBB effective at Effective Time of the
Merger, or as soon thereafter as practicable.
ARTICLE 9.
CONDITIONS PRECEDENT TO THE MERGER
----------------------------------
The obligations of each of the parties hereto to consummate the
transactions contemplated herein are subject to the satisfaction, on or before
the Closing Date, of the following conditions:
9.1. Shareholder Approval. The Agreement and the transactions
--------------------
contemplated hereby shall have received all requisite approvals of the
shareholders of BSC.
9.2. No Judgments or Orders. No judgment, decree, injunction, order or
----------------------
proceeding shall be outstanding or threatened by any Governmental Entity which
prohibits or restricts the effectuation of, or threatens to invalidate or set
aside, the Merger substantially in the form contemplated by this Agreement,
unless counsel to the party against whom such action or proceeding was
instituted or threatened renders to the other parties hereto a favorable opinion
that such judgment, decree, injunction, order or proceeding is without merit.
9.3. Regulatory Approvals. To the extent required by applicable law or
--------------------
regulation, all approvals or consents of any Governmental Entity, including,
without limitation, those of the FRB, the FDIC and the DFI shall have been
obtained or granted for the Merger and the transactions contemplated hereby and
the applicable waiting period under all laws shall have expired. All other
statutory or regulatory requirements for the valid completion of the
transactions contemplated hereby shall have been satisfied.
9.4. Securities Laws. The Registration Statement on Form S-4 shall have
---------------
been declared effective by the SEC and shall not be the subject of any stop
order or proceedings seeking or threatening a stop order. GBB shall have
received all state securities or "Blue Sky" permits and other authorizations
necessary to issue the GBB Stock to consummate the Merger.
9.5. Listing. The GBB Stock issuable in the Merger shall have been
-------
included for listing on the Nasdaq National Market System.
9.6. Tax Opinion. GBB and BSC shall have received from Manatt, Xxxxxx &
-----------
Xxxxxxxx, LLP an opinion reasonably satisfactory to GBB and BSC to the effect
that the Merger shall not result in the recognition of gain or loss for federal
income tax purposes to GBB or BSC, nor shall the issuance of the GBB Stock
result in the recognition of gain or loss by the holders of BSC Stock who
receive such stock, nor shall the substitution of options under Section 7.9
result in any income or gain to the option holder or disqualify any such options
as incentive stock options in connection with the Merger, dated prior to the
date the Proxy Statement and Prospectus is first
mailed to the shareholders of BSC and GBB and such opinions shall not have
been withdrawn or modified in any material respect.
9.7. Pooling of Interests. Prior to the Effective Time of the Merger,
--------------------
GBB shall have received from PwC a written confirmation that the Merger will
qualify for pooling-of-interests accounting treatment. Additionally, prior to
the Effective Time of the Merger, Xxxxx Xxxxxxxx shall have delivered a letter
to BSC to the effect that, as of the Effective Time of the Merger, no conditions
exist with respect to BSC that would preclude accounting for the Merger as a
pooling-of-interests. In making their determinations that the Merger will
qualify for such treatment, PwC and Xxxxx Xxxxxxxx shall be entitled to assume
that cash will be paid with respect to all shares held of record by any holder
of GBB Dissenting Shares or BSC Dissenting Shares.
ARTICLE 10.
CONDITIONS PRECEDENT TO THE OBLIGATIONS OF BSC
----------------------------------------------
All of the obligations of BSC to effect the transactions contemplated
hereby shall be subject to the satisfaction, on or before the Closing Date, of
the following conditions, any of which may be waived in writing by BSC:
10.1. Legal Opinion. BSC shall have received the opinion of Xxxxx X.
-------------
Xxxxxxx, General Counsel of GBB, dated as of the Closing Date, and in form and
substance satisfactory to the counsel of BSC, to the effect that: (a) GBB and
Newco are corporations validly existing under the laws of the State of
California with full corporate power and authority to enter into this Agreement
and the Agreement of Merger, as applicable, and to consummate the transactions
contemplated hereby and thereby; (b) all corporate proceedings on the part of
GBB and Newco necessary to be taken in connection with the Merger in order to
make the same effective have been duly and validly taken; (c) this Agreement and
the Agreement of Merger have been duly and validly authorized, executed and
delivered on behalf of GBB and Newco and constitute (subject to standard
exceptions of enforceability arising from the bankruptcy laws and rules of
equity) valid and binding agreements of GBB Newco; and (d) the shares of GBB
Stock to be issued in the Merger will, when issued, be duly authorized, validly
issued, fully paid and nonassessable.
10.2. Representations and Warranties; Performance of Covenants. All the
--------------------------------------------------------
covenants, terms and conditions of this Agreement to be complied with and
performed by GBB on or before the Closing Date shall have been complied with and
performed in all material respects. Each of the representations and warranties
of GBB contained in Article 5 hereof shall have been true and correct in all
material respects (except that where any statement in a representation or
warranty expressly includes a standard of materiality, such statement shall be
true and correct in all respects) on and as of the date of this Agreement and
(except to the extent such representations and warranties speak as of an earlier
date or for changes expressly contemplated by this Agreement) on and as of the
Closing Date, with the same effect as though such representations and warranties
had been made on and as of the Closing Date. It is understood and acknowledged
that the representations being made on and as of the Closing Date shall be made
without giving effect to any update with respect to the GBB Lists in accordance
with Section 7.2(c).
10.3. Authorization of Merger. All actions necessary to authorize the
-----------------------
execution, delivery and performance of this Agreement and the Agreement of
Merger by GBB and Newco and the consummation of the transactions contemplated
hereby and thereby shall have been duly and validly taken by the Boards of
Directors of GBB and Newco, as required by applicable law, and Newco shall have
full power and right to merge pursuant to the Agreement of Merger.
10.4. Absence of Certain Changes. Between the date of this Agreement
--------------------------
and the Effective Time of the Merger, there shall not have occurred any event
that has had or could reasonably be expected to have a material adverse effect
on the business, financial condition, results of operations or prospects of GBB
on a consolidated basis, whether or not such event, change or effect is
reflected in the GBB Lists as amended or supplemented after the date of this
Agreement.
10.5 Third Party Consents. GBB shall have obtained all consents of other
--------------------
parties to their respective mortgages, notes, leases, franchises, agreements,
licenses and permits as may be necessary to permit the Merger and the
transactions contemplated herein to be consummated without a material default,
acceleration, breach or loss of rights or benefits thereunder.
10.6 Officers' Certificate. There shall have been delivered to BSC on
---------------------
the Closing Date a certificate executed by the Chief Executive Officer and the
Chief Financial Officer of GBB certifying, to the best of their knowledge,
compliance with all of the provisions of Sections 10.2, 10.3, 10.4 and 10.5.
10.7 Fairness Opinion. BSC shall have received a letter from First
----------------
Security Xxx Xxxxxx, dated as of a date within five Business Days of the mailing
of the Proxy Statement and Prospectus to the shareholders of BSC, to the effect
that the transactions contemplated by this Agreement are fair from a financial
point of view to the shareholders of BSC.
ARTICLE 11.
CONDITIONS PRECEDENT TO OBLIGATIONS OF GBB
-------------------------------------------
All of the obligations of GBB to effect the transactions contemplated
hereby shall be subject to the satisfaction, on or before the Closing Date, of
the following conditions, any of which may be waived in writing by GBB:
11.1. Legal Opinion. GBB shall have received the opinion of Xxxxxx,
-------------
Parachini, Steinberg, Matzger & Xxxxxxx, LLP, attorneys for BSC, and in form and
substance satisfactory to the counsel of GBB, to the effect that: (a) BSC is a
corporation validly existing under the laws of the State of California with full
corporate power and authority to enter into this Agreement and the Agreement of
Merger and to consummate the transactions contemplated hereby and thereby; (b)
all corporate proceedings on the part of BSC necessary to be taken in connection
with the Merger in order to make the same effective have been duly and validly
taken; and (c) this Agreement and the Agreement of Merger have been duly and
validly authorized, executed
and delivered on behalf of BSC, and constitute (subject to standard exceptions
of enforceability arising from the bankruptcy laws and rules of equity) valid
and binding agreements of BSC.
11.2. Representations and Warranties; Performance of Covenants. All the
--------------------------------------------------------
covenants, terms and conditions of this Agreement to be complied with and
performed by BSC at or before the Closing Date shall have been complied with and
performed in all material respects. Each of the representations and warranties
of BSC contained in Article 4 hereof shall have been true and correct in all
material respects (except that where any statement in a representation or
warranty expressly includes a standard of materiality, such statement shall be
true and correct in all respects) on and as of the date of this Agreement and
(except to the extent such representations and warranties speak as of an earlier
date or for changes expressly contemplated by this Agreement) on and as of the
Closing Date, with the same effect as though such representations and warranties
had been made on and as of the Closing Date. It is understood and acknowledged
that the representations being made on and as of the Closing Date shall be made
without giving effect to any update with respect to the BSC Lists in accordance
with Section 6.2(j).
11.3. Authorization of Merger. All actions necessary to authorize the
-----------------------
execution, delivery and performance of this Agreement and the Agreement of
Merger by BSC and the consummation of the transactions contemplated hereby and
thereby shall have been duly and validly taken by the Board of Directors and
shareholders of BSC, and BSC shall have full power and right to merge pursuant
to the Agreement of Merger.
11.4. Third Party Consents. BSC shall have obtained all consents of
--------------------
other parties to their respective mortgages, notes, leases, franchises,
agreements, licenses and permits as may be necessary to permit the Merger and
the transactions contemplated herein to be consummated without a material
default, acceleration, breach or loss of rights or benefits thereunder.
11.5. Absence of Certain Changes. Between the date of this Agreement
--------------------------
and the Effective Time of the Merger, there shall not have occurred any event
that has had or could reasonably be expected to have a material adverse effect
on the business, financial condition, results of operations or prospects of BSC
on a consolidated basis whether or not such event, change or effect is reflected
in the BSC Lists as amended or supplemented after the date of this Agreement.
11.6. Officers' Certificate. There shall have been delivered to GBB on
---------------------
the Closing Date a certificate executed by the Chief Executive Officer and the
Chief Financial Officer of BSC certifying, to the best of their knowledge,
compliance with all of the provisions of Sections 11.2, 11.3, 11.4 and 11.5.
11.7. Fairness Opinion. GBB shall have received a letter from Xxxxxx &
----------------
Xxxxxx Incorporated dated as of a date within five Business Days of the mailing
of the Proxy Statement and Prospectus to the shareholders of GBB, to the effect
that the transactions contemplated by this Agreement are fair from a financial
point of view to the shareholders of GBB.
11.8. Shareholder's Agreements. Concurrently with the execution of this
------------------------
Agreement, each director of BSC shall have executed and delivered to GBB
agreements substantially in the form of Exhibit D hereto.
---------
11.9. Agreements Not to Compete. Concurrently with the execution of
-------------------------
this Agreement, the directors of BSC shall have executed and delivered to GBB
agreements substantially in the form of Exhibit C hereto.
---------
11.10. Affiliates Agreements. Concurrently with the execution of this
---------------------
Agreement, GBB shall have received from each person named in the letter or
otherwise referred to in Section 6.9 an executed copy of an agreement
substantially in the form on Exhibit B hereto.
---------
11.11. Employee Benefit Plans. GBB shall have received satisfactory
----------------------
evidence that all of BSC's employee benefit plans, programs and arrangements,
including, without limitation, the BSC 401(k) Plan, have been treated as
provided in Article 12 of this Agreement.
11.12. Dissenting Shares. The number of shares of BSC Stock for which
-----------------
demand is made to be BSC Perfected Dissenting Shares shall not exceed an amount
which, when combined with other amounts payable in connection with the Merger,
would result in the Merger being disqualified from pooling of interest
accounting treatment.
11.13. Remediation. All remediation of environmental contamination or
-----------
conditions on any BSC Property shall have been completed to the satisfaction of
GBB.
11.14. BSC Adjusted Book Value. At least five Business Days prior to
-----------------------
the Effective Time of the Merger, BSC shall provide GBB with BSC's consolidated
financial statements as of the close of business on the last day of the month
prior to the Effective Time of the Merger. Such financial statements shall have
been prepared in all material respects in accordance with generally accepted
accounting principles and other applicable legal and accounting requirements,
and reflect all period-end accruals and other adjustments. At the close of
business on the last day of the month preceding the Effective Time of the
Merger, the BSC Adjusted Book Value, as determined in accordance with such
financial statements, shall be:
(a) not less than $30,727,000 if the Effective Time of the Merger
occurs in April 2000;
(b) not less than $31,013,000 if the Effective Time of the Merger
occurs in May 2000;
(c) not less than $31,341,000 if the Effective Time of the Merger
occurs in June 2000;
(d) not less than $31,651,000 if the Effective Time of the Merger
occurs in July 2000; and
(e) not less than $31,994,000 if the Effective Time of the Merger
occurs in August 2000.
11.15. Termination of BSC Stock Option Plan. Subject to the provisions
------------------------------------
of Section 7.9(d), GBB shall have received satisfactory evidence that the BSC
Stock Option Plan has been terminated prior to the Effective Time of the Merger.
11.16 Allowance for Loan Losses. BSC's allowance for loan and lease
-------------------------
losses, as reflected on the consolidated financial statements referred to in
Section 11.14, shall equal the greater of 1.07% of BSC's total gross loans (less
deferred loan fees) or $2,304,000.
11.17 Regulatory Approvals. Any and all approvals or consents of any
--------------------
Governmental Entity which are necessary to consummate the Merger and the
transactions contemplated hereby shall have been granted without the imposition
of any conditions which GBB deems, in its sole and absolute opinion, to
materially adversely affect it or be materially burdensome.
ARTICLE 12.
EMPLOYEE BENEFITS
-----------------
12.1 Employee Benefits. GBB in its sole discretion, may elect to
-----------------
terminate the BSC 401(k) or to discontinue contributions to the BSC 401(k) Plan
following the Effective Time of the Merger, to cause BSC to terminate the BSC
401(k) Plan or to discontinue contributions to the BSC 401(k) Plan prior to the
Effective Time of the Merger, or to merge the BSC 401(k) Plan with and into the
GBB 401(k) Plan after the Effective Time of the Merger. In no event shall the
BSC 401(k) Plan be merged with and into the GBB 401(k) Plan, however, unless GBB
determines, in its sole discretion, that: (i) the BSC 401(k) Plan is a
qualified plan under Section 401(a) of the Code, both as to the form of the BSC
401(k) Plan and as to its operation; and (ii) there are no facts in existence
that would be reasonably likely to adversely affect the qualified status of the
BSC 401(k) Plan. If GBB determines in its sole discretion not to merge the BSC
401(k) Plan into the GBB 401(k) Plan and that the BSC 401(k) Plan should be
terminated immediately prior to the Effective Time of the Merger, BSC agrees to
use its best efforts to have the BSC 401(k) Plan terminated prior to the
Effective Time of the Merger and to obtain an IRS determination that the BSC
401(k) Plan continues to be qualified upon termination.
As soon as practicable after the Effective Time of the Merger, all other
Employee Plans will be discontinued or merged into GBB plans, in the discretion
of GBB, and employees of BSC shall become eligible for the employee benefit
plans of GBB on the same terms as such plans and benefits are generally offered
from time to time to employees of GBB and its subsidiaries in comparable
positions with GBB or its subsidiaries. For purposes of determining such
employment eligibility and vesting under the employee benefit plans of GBB, GBB
shall recognize such employees' years of service with BSC beginning on the date
such employees commenced employment with BSC through the Effective Time of the
Merger.
ARTICLE 13.
TERMINATION
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13.1 Termination. This Agreement may be terminated at any time prior to
-----------
the Effective Time of the Merger upon the occurrence of any of the following:
(a) By mutual agreement of the parties, in writing;
(b) By BSC (unless BSC's Board of Directors shall have withdrawn or
modified in a manner adverse to GBB in any respect its recommendation of the
Merger to the holders of BSC Stock) or GBB upon the failure of the shareholders
of BSC to give the requisite approval of this Agreement;
(c) By BSC promptly following the expiration of 20 days from delivery
of written notice by BSC to GBB of GBB's breach of or failure to satisfy any
covenant or agreement contained herein resulting in a material impairment of the
benefit reasonably expected to be derived by BSC from the performance or
satisfaction of such covenant or agreement (provided that such breach has not
been waived by BSC or cured by GBB prior to expiration of such 20 day period);
(d) By GBB promptly following the expiration of 20 days from delivery
of written notice by GBB to BSC of BSC's breach of or failure to satisfy any
covenant or agreement contained herein resulting in a material impairment of the
benefit reasonably expected to be derived by GBB from the performance or
satisfaction of such covenant or agreement (provided that such breach has not
been waived by GBB or cured by BSC prior to expiration of such 20 day period);
(e) By BSC or GBB upon the expiration of 30 days after any
Governmental Entity denies or refuses to grant any approval, consent or
authorization required to be obtained in order to consummate the transactions
contemplated by this Agreement unless, within said 30 day period after such
denial or refusal, all parties hereto agree to resubmit the application or
appeal the decision to the regulatory authority that has denied, or refused to
grant the approval, consent or qualification requested;
(f) By BSC or GBB if any conditions set forth in Article 9 shall not
have been met by August 31, 2000; provided, however, that this Agreement shall
not be terminated pursuant to this Section 13.1(f) if the relevant condition
shall have failed to occur as a result of any act or omission of the party
seeking to terminate;
(g) By BSC if any of the conditions set forth in Article 10 shall not
have been met by August 31, 2000, or such earlier time as it becomes apparent
that such condition shall not be met, provided, however, that this Agreement
shall not be terminated pursuant to this Section 13.1(g) if the relevant
condition shall have failed to occur as a result of any act or omission of BSC;
(h) By GBB if any of the conditions set forth in Article 11 shall not
have been met by August 31, 2000, or such earlier time as it becomes apparent
that such condition shall not be met, provided, however, that this Agreement
shall not be terminated pursuant to this Section 13.1(h) if the relevant
condition shall have failed to occur as a result of any act or omission of GBB;
(i) By GBB if BSC shall have breached any of the obligations contained
in Section 6.1(n);
(j) By GBB if (i) BSC shall have exercised a right specified in the
last sentence of Section 6.1(n) with respect to any Superior Proposal and shall,
directly or through agents or representatives, continue any discussions with any
third party concerning such Superior Proposal for more than ten (10) Business
Days after the date of receipt of such Superior Proposal; or (ii) a Superior
Proposal that is publicly disclosed shall have been commenced, publicly proposed
or communicated to BSC which contains a proposal as to price (without regard to
the specificity of such price proposal) and BSC shall not have rejected such
proposal within ten (10) Business Days of receipt of such Superior Proposal or
the date its existence first becomes publicly disclosed, if earlier;
(k) By GBB under the circumstances set forth in Section 8.3;
(l) By BSC if GBB shall have entered into a GBB Acquisition
Transaction that includes as a condition precedent to such GBB Acquisition
Transaction that GBB terminate this Agreement; or
(m) By BSC if the Average Closing Price is less than $36.3600, subject
to GBB's right to elect to exercise the Top Up Option as provided in Section
2.2(a)(iv).
13.2. Effect of Termination. In the event of termination of this
---------------------
Agreement by either BSC or GBB as provided in Section 13.1, neither BSC nor GBB
shall have any further obligation or liability to the other party except (a)
with respect to the last sentences of each of Section 6.3(a), Section 7.3 and
Section 8.3, (b) with respect to Section 14.1; and (c) to the extent such
termination results from a party's willful and material breach of the warranties
and representations made by it, or willful and material failure in performance
of any of its covenants, agreements or obligations hereunder.
13.3. Force Majeure. BSC and GBB agree that, notwithstanding anything
-------------
to the contrary in this Agreement, in the event this Agreement is terminated as
a result of a failure of a condition, which failure is due to a natural disaster
or other act of God, or an act of war, and provided neither party has materially
failed to observe the obligations of such party under this Agreement, neither
party shall be obligated to pay to the other party to this Agreement any
expenses or otherwise be liable hereunder.
ARTICLE 14.
MISCELLANEOUS
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14.1. Expenses.
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(a) GBB hereby agrees that if this Agreement is terminated by BSC
pursuant to Section 13.1(c), GBB shall promptly and in any event within 10 days
after such termination pay BSC all Expenses (as defined in Section 14.1(d)
below) of BSC, but not to exceed $175,000.
(b) BSC hereby agrees that if the Agreement is terminated by GBB or
BSC pursuant to Section 13.1(b) with respect to the failure of BSC shareholders
to approve the Agreement and the transactions contemplated hereby, or by GBB
pursuant to Section 13.1(d), 13.1(i) 13.1(j), BSC shall promptly and in any
event within 10 days after such termination pay GBB all Expenses of GBB, but not
to exceed $250,000.
(c) Except as otherwise provided herein, all Expenses incurred by
GBB and BSC in connection with or related to the authorization, preparation
and execution of this Agreement, the solicitation of shareholder approvals and
all other matters related to the closing of the transactions contemplated
hereby, including, without limitation of the generality of the foregoing, all
fees and expenses of agents, representatives, counsel and accountants employed
by either such party or its affiliates, shall be borne solely and entirely by
the party which has incurred the same. Notwithstanding the foregoing, GBB and
BSC shall share equally the cost of printing the Proxy Statement and
Prospectus.
(d) "Expenses" as used in this Agreement shall include all
reasonable out-of-pocket expenses (including all fees and expenses of
attorneys, accountants, investment bankers, experts and consultants to the
party and its affiliates) incurred by the party or on its behalf in connection
with the consummation of the transactions contemplated by this Agreement.
14.2 Competing Transaction Fee. As an inducement to GBB to enter into
-------------------------
this Agreement, (a) in the event this Agreement is terminated by GBB pursuant to
Sections 13.1(i) or 13.1(j), or (b) if BSC otherwise consummates a Competing
Transaction during the 12-month period following termination of this Agreement
pursuant to Sections 13.1(a) (if GBB shall at the time have been entitled to
terminate the Agreement pursuant to Section 13.1(d)); 13.1(b), 13.1(d); 13.1(f)
(if the relevant condition shall have failed to occur as a result of any act or
omission by BSC or its shareholders); or 13.1(h) (other than a termination
related to the satisfaction of the conditions set forth in the second sentence
of Section 11.2 and in Sections 11.5, 11.7, 11.12, 11.13, 11.14 and 11.16), BSC
shall wire to GBB within three Business Days of the date of termination in the
case of clause (a) and concurrent with the consummation of the Competing
Transaction in the case of clause (b), the amount of $3,500,000, which amount
the parties acknowledge as representing (i) GBB's direct costs and expenses
(including, but not limited to, fees and expenses of financial or other
consultants, printing costs, accountants, and counsel) incurred in negotiating
and undertaking to carry out the transactions contemplated by this Agreement,
including GBB's management time devoted to negotiation and preparation for the
transactions contemplated by this Agreement; (ii) GBB's
indirect costs and expenses incurred in connection with the transactions
contemplated by this Agreement; and (iii) GBB's loss as a result of the
transactions contemplated by this Agreement not being consummated. Any payment
previously made by BSC pursuant to Section 14.1(b) hereof shall be credited
against any amount due under this Section.
14.3 GBB Acquisition Transaction Fee. As an inducement to BSC to enter
-------------------------------
into this Agreement, (i) in the event this Agreement is terminated by BSC
pursuant to Section 13.1(l) or (ii) if GBB consummates a GBB Acquisition
Transaction within 12 months following termination by BSC of this Agreement
pursuant to Section 13.1(c), (g) or (m), GBB shall wire to BSC within three
Business Days of the date of termination in the case of clause (i) and
concurrent with the consummation of the GBB Acquisition Transaction in the case
of clause (ii), the amount of $2,500,000, which amount the parties acknowledge
as representing (x) BSC's Expenses incurred in negotiating and undertaking to
carry out the transactions contemplated by this Agreement, including BSC's
management time devoted to negotiation and preparation for the transactions
contemplated by this Agreement; (y) BSC's indirect expenses incurred in
connection with the transactions contemplated by this Agreement; and (z) BSC's
loss as a result of the transactions contemplated by this Agreement not being
consummated. Any payment previously made by GBB pursuant to Section 14.1(a)
hereof shall be credited against any amount due under this Section 14.3. Any
payment previously made by GBB pursuant to Section 14.1(a) hereof shall be
credited against any amount due under this Section.
14.4 Notices. Any notice, request, instruction or other document to be
-------
given hereunder by any party hereto to another shall be in writing and delivered
personally or by confirmed facsimile transmission or sent by registered or
certified mail, postage prepaid, with return receipt requested, addressed as
follows:
To GBB: Greater Bay Bancorp
0000 Xxxx Xxxxxxxx Xxxx
Xxxx Xxxx, Xxxxxxxxxx 00000
Attention: Xxxxxx X. Xxxxx
Facsimile Number: (000) 000-0000
With a copy to: Greater Bay Bancorp
000 Xxxxxxx Xxxxxx, 0xx Xxxxx
Xxxx Xxxx, Xxxxxxxxxx 00000
Attention: Xxxxx X. Xxxxxxx, Esq.
Facsimile Number: (000) 000-0000
To BSC: Bank of Santa Xxxxx
0000 Xx Xxxxxx Xxxx
Xxxxx Xxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxxxx
Facsimile Number: (000) 000-0000
With a copy to: Xxxxxx, Parachini, Steinberg, Matzger & Xxxxxxx, LLP
000 Xxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxxxxx, Esq.
Facsimile Number: (000) 000-0000
Any such notice, request, instruction or other document shall be deemed
received (i) on the date delivered personally or delivered by confirmed
facsimile transmission, (ii) on the next Business Day after it was sent by
overnight courier, postage prepaid; or (iii) on the third Business Day after it
was sent by registered or certified mail, postage prepaid. Any of the persons
shown above may change its address for purposes of this section by giving notice
in accordance herewith.
14.5. Successors and Assigns. All terms and conditions of this
----------------------
Agreement shall be binding upon and shall inure to the benefit of the parties
hereto and their respective transferees, successors and assigns; provided,
however, that this Agreement and all rights, privileges, duties and obligations
of the parties hereto may not be assigned or delegated by any party hereto and
any such attempted assignment or delegation shall be null and void.
14.6. Counterparts. This Agreement and any exhibit hereto may be
------------
executed in one or more counterparts, all of which, taken together, shall
constitute one original document and shall become effective when one or more
counterparts have been signed by the appropriate parties and delivered to each
party hereto.
14.7. Effect of Representations and Warranties. The representations and
----------------------------------------
warranties contained in this Agreement or in any List shall terminate
immediately after the Effective Time of the Merger.
14.8. Third Parties. Each party hereto intends that this Agreement
-------------
shall not benefit or create any right or cause of action to any person other
than parties hereto. As used in this Agreement the term "parties" shall refer
only to GBB and BSC as the context may require.
14.9. Lists; Exhibits; Integration. Each List, exhibit and letter
----------------------------
delivered pursuant to this Agreement shall be in writing and shall constitute a
part of the Agreement, although Lists and letters need not be attached to each
copy of this Agreement. This Agreement, together with such Lists, exhibits and
letters, constitutes the entire agreement between the parties pertaining to the
subject matter hereof and supersedes all prior agreements and understandings of
the parties in connection therewith.
14.10. Knowledge. Whenever any statement herein or in any list,
---------
certificate or other document delivered to any party pursuant to this Agreement
is made "to the knowledge" or "to the best knowledge" of any party or another
Person, such party or other Person shall make such statement only after
conducting an investigation reasonable under the circumstances of the subject
matter thereof, and each such statement shall constitute a representation that
such investigation has been conducted.
14.11 Governing Law. This Agreement is made and entered into in the
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State of California, except to the extent that the provisions of federal law are
mandatorily applicable, and the laws of the State of California shall govern the
validity and interpretation hereof and the performance of the parties hereto of
their respective duties and obligations hereunder.
14.12. Captions. The captions contained in this Agreement are for
--------
convenience of reference only and do not form a part of this Agreement and shall
not affect the interpretation hereof.
14.13. Severability. If any portion of this Agreement shall be deemed
------------
by a court of competent jurisdiction to be unenforceable, the remaining portions
shall be valid and enforceable only if, after excluding the portion deemed to be
unenforceable, the remaining terms hereof shall provide for the consummation of
the transactions contemplated herein in substantially the same manner as
originally set forth at the date this Agreement was executed.
14.14. Waiver and Modification; Amendment. No waiver of any term,
----------------------------------
provision or condition of this Agreement, whether by conduct or otherwise, in
any one or more instances, shall be deemed to be or construed as a further or
continuing waiver of any such term, provision or condition of this Agreement.
Except as otherwise required by law, this Agreement and the Agreement of Merger,
when executed and delivered, may be modified or amended by action of the Boards
of Directors of GBB and BSC without action by their respective shareholders.
This Agreement may be modified or amended only by an instrument of equal
formality signed by the parties or their duly authorized agents.
14.15 Attorneys' Fees. If any legal action or any arbitration upon
---------------
mutual agreement is brought for the enforcement of this Agreement or because of
an alleged dispute, controversy, breach, or default in connection with this
Agreement, the prevailing party shall be entitled to recover reasonable
attorneys' fees and other costs and expenses incurred in that action or
proceeding, in addition to any other relief to which it may be entitled.
IN WITNESS WHEREOF, the parties to this Agreement have duly executed this
Agreement as of the day and year first above written.
ATTEST: GREATER BAY BANCORP
/s/ Xxxxx Xxxxxxx By: /s/ Xxxxx X. Xxxxxxxxxxx
----------------- ------------------------
Secretary Xxxxx X. Xxxxxxxxxxx
President and Chief Executive Officer
ATTEST: BANK OF SANTA XXXXX
/s/ Xxxxxx Xxxxxxxx By: /s/ Xxxxxx X. Xxxxxxxx
------------------- ----------------------
Secretary Xxxxxx X. Xxxxxxxx
President and Chief Executive Officer
EXHIBIT LIST
------------
A AGREEMENT OF MERGER
B FORM OF AFFILIATE'S AGREEMENT
C FORM OF NONCOMPETITION AGREEMENT
D FORM OF SHAREHOLDER'S AGREEMENT
