Exhibit 2.1
AGREEMENT AND PLAN OF REORGANIZATION
BY AND BETWEEN
PROMISTAR FINANCIAL CORPORATION
AND
FNH CORPORATION
AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION, is made and entered
into as of this 24th day of February, 2001 (the "Reorganization Agreement"), by
and between Promistar Financial Corporation, a business corporation organized
and existing under the laws of the Commonwealth of Pennsylvania with its
principal office at 000 Xxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxxxxxx 00000, formerly
named BT Financial Corporation ("Promistar"),
AND
FNH Corporation, a corporation organized and existing under the laws of the
Commonwealth of Pennsylvania with its principal office at 00 Xxxxxx Xxxx, Xxxxx,
Xxxxxxxxxxxx 00000 ("FNH").
WITNESSETH:
WHEREAS, the respective Boards of Directors of Promistar and
FNH have determined that it would be in the best interests of their respective
organizations, shareholders and customers and the communities served by them,
for FNH to be merged with and into Promistar (the "Merger") pursuant to this
Reorganization Agreement, whereby the shareholders of FNH will receive shares of
common stock of Promistar in exchange for their shares of FNH Common Stock; and
WHEREAS, the respective Boards of Directors of Promistar and
FNH have approved the proposed merger of FNH with and into Promistar upon the
terms and conditions set forth in this Reorganization Agreement; and
WHEREAS, the parties intend that the Merger will qualify as a
reorganization under Section 368(a) of the Internal Revenue Code of 1986, as
amended (the "Code").
NOW, THEREFORE, in consideration of the premises and the
representations, warranties, covenants, conditions and actions hereinafter set
forth, the parties hereto, each intending to be legally bound hereby, agree as
follows:
ARTICLE I
DEFINITIONS
1.01. Definitions. The terms defined in this Section 1.01
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shall have the meanings herein specified, unless the context clearly requires
otherwise. Other terms used herein are defined elsewhere in this Reorganization
Agreement.
"Affiliate" of a Party means a Person that, directly or
indirectly through one or more intermediaries, controls, or is controlled by, or
is under common control with, such Party.
"Articles of Merger" means the Articles of Merger delivered to
the Department of State of the Commonwealth of Pennsylvania for filing pursuant
to Sections 1921 et seq. of the BCL.
"Bank" means First National Bank of Herminie.
"Bank Merger" means the merger of Bank with and into Promistar
Bank, with Promistar Bank as the Resulting Institution.
"BCL" means the Pennsylvania Business Corporation Law of 1988,
as amended.
"CERCLA" means the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended.
"Closing Date" shall have the meaning set forth in Section
2.05(a).
"COBRA" means the Consolidated Omnibus Budget Reconciliation
Act of 1986.
"Comptroller" means the Office of the Comptroller of the
Currency.
"Department of Banking" means the Pennsylvania Department of
Banking.
"Dissenting Shares" means any shares of FNH Common Stock for
which the shareholder has asserted dissenters rights under the provisions of
Subchapter D of the BCL and who has performed every act required up to the time
involved for the assertion of those rights.
"Effective Time" means the date and time specified in the
Articles of Merger.
"Environmental Condition" shall have the meaning set forth in
Section 4.01(q).
"Environmental Law" shall mean all statutory and common law,
rules, regulations, ordinances, Governmental Approvals, guidelines, policies,
judicial or administrative orders or decrees of any federal, state, or local
Governmental Authority relating to the protection of human health and safety or
the environment.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"FDIA" means the Federal Deposit Insurance Act, as amended.
"FDIC" means the Federal Deposit Insurance Corporation.
"Federal Reserve Board" means the Board of Governors of the
Federal Reserve System.
"FHLMC" means the Federal Home Loan Mortgage Corporation.
"FNH Common Stock" means the common stock, no par value per
share, of FNH.
"Governmental Approvals" means all permits, licenses,
authorizations, consents, approvals, waivers, variances or exemptions issued by
any Governmental Authority.
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"Governmental Authority" means any federal, state, local or
foreign, regional or other judicial, governmental, administrative or regulatory
authority or instrumentality.
"NASD" means the National Association of Securities Dealers,
Inc.
"NASDAQ" means the NASD Automated Quotations System.
"Option" means the Option granted to Promistar by FNH under
the Stock Option Agreement of even date herewith between Promistar and FNH.
"Owned Real Property" shall have the meaning set forth in
Section 4.01(p).
"Parties" means Promistar and FNH.
"PBGC" means the Pension Benefit Guaranty Corporation.
"Person" means a corporation, an association, a partnership,
an organization, a business, an individual, a government or a subdivision
thereof or a governmental agency.
"Permitted Dividend" means a cash dividend or dividends,
declared and paid in accordance with FNH's past practices as to time of
declaration, except that such may be paid quarterly on March 1, 2001 and June 1,
2001 to coincide with the scheduled dividends of Promistar, whose amount shall
not exceed $3.15 per share per calendar quarter.
"Promistar Common Stock" means the common stock, par value
$5.00 per share, of Promistar.
"Proxy Statement/Prospectus" means the Prospectus/Proxy
Statement, together with any supplements thereto, to be sent to the shareholders
of FNH to solicit their votes in connection with the transactions contemplated
by this Reorganization Agreement.
"Registration Statement" means the registration statement on
Form S-4 (or other appropriate form) of Promistar, including any amendments or
supplements thereto, as declared effective by the SEC under the Securities Act
with respect to the issuance of Promistar Common Stock in connection with the
Merger and the approval by the shareholders of the transactions contemplated by
this Reorganization Agreement.
"Regulatory Approvals" means all necessary approvals of the
Merger by state and federal agencies, including the Department of Banking, the
Federal Reserve Board, the FDIC and the Comptroller.
"Schedules" means the disclosure schedules attached hereto and
made a part hereof.
"SEC" means the United States Securities and Exchange
Commission.
"Securities Act" means the Securities Act of 1933, as amended.
"Service" means the United States Internal Revenue Service.
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"Subsidiary" means any corporation or other entity, the
securities or other ownership interests having ordinary voting power to elect a
majority of the board of directors or other persons performing similar functions
of such corporation or other entity are at the time directly or indirectly owned
or controlled by a Party.
"Surviving Corporation" means Promistar after consummation of
the Merger.
"Taxes" means all federal, state and local taxes and similar
governmental charges.
"Transactions" means the negotiation and execution of this
Reorganization Agreement and the consummation of the transactions contemplated
hereby, and all related transactions.
1.02. Accounting Terms. For all purposes of this
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Reorganization Agreement, unless the context clearly requires otherwise, any
accounting term not specifically defined in this Reorganization Agreement shall
have the meaning given to it in accordance with generally accepted accounting
principles and practices within the banking industry as in effect as of the date
of this Reorganization Agreement.
ARTICLE II
THE MERGER
2.01. Merger. Upon satisfaction of the conditions set forth
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herein, at the Effective Time, FNH shall merge with and into Promistar in
accordance with the provisions and procedures set forth herein, and Promistar
shall be the Surviving Corporation (the "Merger"). At the Effective Time, the
separate corporate existence of FNH shall cease and Promistar shall succeed to
all the rights, privileges, immunities and franchises, and all the property and
assets, real, personal and mixed, of FNH without the necessity for any separate
conveyance or other transfer. The Surviving Corporation shall thereafter be
responsible and liable for all liabilities and obligations of every kind and
description, and neither the rights of creditors nor any liens on the property
of FNH shall be impaired by the Merger.
2.02. Conversion of Shares of Common Stock.
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(a) At the Effective Time, each share of FNH
Common Stock then outstanding, except treasury shares and Dissenting Shares,
shall be converted into the right to receive 15 shares of Promistar Common Stock
(subject to possible adjustment as set forth in Sections 2.02(c) and 2.08(b)
hereof, the "Exchange Ratio").
(b) At the Effective Time, by virtue of the
Merger, and without any action on the part of the shareholders of FNH, each of
the then issued and outstanding shares of FNH Common Stock shall cease to exist
and shall be deemed canceled, retired and eliminated, and all rights in respect
thereof shall cease except, in the case of all FNH Common Stock other than
treasury shares and other than Dissenting Shares, the right to receive Promistar
Common Stock, regardless of whether the certificates representing such shares
are surrendered to Promistar by the shareholders of FNH.
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(c) The Exchange Ratio shall be adjusted at the
Effective Time to reflect any consolidation, split-up, other subdivision or
combination of Promistar Common Stock, any dividend payable in Promistar Common
Stock, or any capital reorganization involving the reclassification of Promistar
Common Stock subsequent to the date of this Reorganization Agreement and prior
to such time. Promistar shall register under the Securities Act all shares of
Promistar Common Stock to be issued in the Merger prior to the Effective Time.
2.03 Dissenting Shares. Notwithstanding anything in this
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Reorganization Agreement to the contrary, shares of FNH Common Stock which are
issued and outstanding immediately prior to the Effective Time and which are
Dissenting Shares, shall not be converted into or be exchangeable for the right
to receive Promistar Common Stock unless and until the holder thereof shall fail
to perfect his or her right to dissent or shall have effectively withdrawn or
lost such right under the BCL, as the case may be. If such holder shall have
failed to perfect his right to dissent or shall have effectively withdrawn or
lost such right, each of his or her shares of FNH Common Stock shall thereupon
be deemed to have been converted into, at the Effective Time, the right to
receive shares of Promistar Common Stock at the Exchange Ratio.
2.04. Articles of Incorporation; By-Laws. At the Effective
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Time, the articles of incorporation and bylaws of Promistar as in effect
immediately prior to the Effective Time shall be the articles of incorporation
and bylaws of the Surviving Corporation.
2.05. Directors and Officers.
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(a) The directors and principal officers of
Promistar immediately prior to the Effective Time shall be the directors and
principal officers of the Surviving Corporation from and after the Effective
Time. In addition, Xxxxx X. Xxxxxxx, Xxx X. Xxxxxx and V. Xxxxx Xxxxxxx (the
"Initial FNH Directors"), who are acceptable to Promistar, shall become
directors of Promistar at the Effective Time to serve for such terms as
determined below. At the first annual meeting ("First Annual Meeting") of the
shareholders of Promistar following the consummation of the Transactions, in
accordance with the bylaws of Promistar, the Initial FNH Directors must stand
for election. At the First Annual Meeting, Promistar shall nominate the Initial
FNH Directors and recommend the Initial FNH Directors for election by its
shareholders. Promistar shall nominate the Initial FNH Directors for election at
the First Annual Meeting, so that one Initial FNH Director shall be nominated
for the class of directors with a term expiring in 2003, one Initial FNH
Director shall be nominated for the class of directors with a term expiring in
2004, and one Initial FNH Director shall be nominated for the class of directors
with a term expiring in 2005. During the period ending on the third anniversary
of the Effective Time, if any of the Initial FNH Directors shall resign or
become unable to serve as a director, or otherwise, for any reason, fail to be a
director, the remaining Initial FNH Directors shall designate a director
mutually acceptable to Promistar, who was one of the seven (7) directors of FNH
immediately prior to the Effective Time, to fill such vacancy for the remainder
of such director's current term (such designee shall be considered an Initial
FNH Director for purposes of this Section 2.05(a)).
(b) In addition, C. Xxxxxx Xxxx who is acceptable
to Promistar, shall become a director of Promistar Trust Company at the
Effective Time to serve for such term as
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may be determined by Promistar but in no event for a term expiring before the
third anniversary of the Effective Date.
(c) In addition, Xxxxxxxx X. Xxxxxxxxxx who is
acceptable to Promistar, shall become a director of Promistar Investment
Advisors, Inc. at the Effective Time to serve for such term as may be determined
by Promistar but in no event for a term expiring before the third anniversary of
the Effective Date.
(d) In addition, Xxxxxxx X. Armor and Xxxxx
X. Xxx who are acceptable to Promistar, shall become directors of Promistar Bank
at the Effective Time to serve for such term as may be determined by Promistar
but in no event for terms expiring before the third anniversary of the Effective
Date.
2.06. Closing.
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(a) The closing hereunder ("Closing") shall take
place at the offices of Xxxxxxxxxxx & Xxxxxxxx LLP, Xxxxx X. Xxxxxx Building,
000 Xxxxxxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxxxxxx 00000, or such other place
agreed upon by the Parties, on the Closing Date selected by the Parties which
shall be the latest of:
(i) Any business day within five business
days after the receipt of the approval of the Merger by the
Department of Banking;
(ii) Any business day between the thirtieth
and thirty-seventh day following receipt of the last
Regulatory Approval, if all other conditions set forth in
Article V have been satisfied or waived;
(iii) The fifth business day after any stay
of any Regulatory Approval or any injunction against
consummation of the Merger is lifted, discharged or dismissed,
if all other conditions set forth in Article V have been
satisfied or waived;
(iv) Such other date as shall be mutually
agreed to in writing by the Parties on which all other
conditions set forth in Article V shall have been satisfied or
waived.
(b) Any Party may postpone the Closing Date
fixed under Section 2.06(a) once for a reasonable period of time (which shall be
no more than thirty (30) days but in no event ending later than the day of
automatic termination in accordance with Section 2.08(h)) if necessary to enable
it to perform any obligations hereunder, provided, that such Party provides
prompt written notice to the other Parties of such postponement, stating the
reasons therefor.
(c) If FNH or Promistar shall fail to close
because all the conditions precedent to its obligation to close shall not have
been met on the Closing Date as postponed, such Party may immediately terminate
this Reorganization Agreement by giving written notice of such termination to
the other Party.
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2.07. Exchange of Certificates for Stock and Cash.
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(a) Common Stock. After the Effective Time, each
holder of a certificate for theretofore outstanding shares of FNH Common Stock
will be entitled to receive in exchange therefor a certificate or certificates
representing the number of whole shares of Promistar Common Stock to which such
shareholder is entitled as provided in Section 2.02 plus cash (payable by check)
in lieu of any fractional share of Promistar Common Stock to which such holder
would otherwise be entitled. Such exchange will be effected upon surrender of
such certificate to Promistar or its exchange agent, together with a duly
executed and completed letter of transmittal, which will be mailed to each
holder of a certificate for theretofore outstanding shares of FNH Common Stock
by Promistar or its exchange agent promptly following the Effective Time.
(b) Fractional Shares. Neither certificates nor
scrip certificates for fractions of shares of Promistar Common Stock shall be
issued. Holders of FNH Common Stock who would but for Section 2.07(a) be
entitled to receive fractions of shares of Promistar Common Stock shall have
none of the rights with respect to such fractions of shares (including, without
limitation, the right to receive dividends) which a holder shall possess in
respect of a full share of Promistar Common Stock issuable as a result of the
Merger, and each such holder shall receive, in lieu of the applicable fraction
of a share of Promistar Common Stock, a cash payment equal to such fraction of a
share of Promistar Common Stock multiplied by the closing sales price on NASDAQ
for a share of Promistar Common Stock on the Closing Date as reported in the
Wall Street Journal, or, if the Promistar Common Stock is not traded on such
date, the next succeeding day on which such stock is traded. No interest will be
paid or accrued on cash payable upon surrender of certificates previously
representing Common Stock.
(c) Failure to Surrender Certificates. Until
surrendered in accordance with the provisions of this Section 2.07, the
certificates which immediately prior to the Effective Time represented issued
and outstanding shares of Common Stock (except for certificates representing
treasury shares) shall from and after the Effective Time represent for all
purposes only the right to receive Promistar Common Stock. Upon surrender of a
certificate for theretofore outstanding shares of FNH Common Stock, there shall
be paid to the record holder of the certificate for shares of Promistar Common
Stock issued in exchange therefor (i) on the date of such exchange, the amount
of dividends theretofore accrued and payable with respect to such full shares of
Promistar Common Stock as of any date subsequent to the Effective Time which
have not yet been paid to a public official pursuant to abandoned property laws
and (ii) at the appropriate payment date, the amount of dividends with a record
date after the Effective Time but prior to such surrender and a payment date
subsequent to such surrender. No interest shall be payable with respect to such
dividends.
(d) Treasury Shares. At the Effective Time,
each share of FNH Common Stock held in treasury shall be canceled, retired and
cease to exist and no consideration shall be paid therefor.
(e) Lost Certificates. In the event any
certificate representing shares of FNH Common Stock shall have been lost, stolen
or destroyed, upon the making of an affidavit of that fact by the person
claiming such certificate to be lost, stolen or destroyed, the Surviving
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Corporation shall issue in exchange for such lost, stolen or destroyed
certificate the shares of Promistar Common Stock deliverable in respect thereof
determined in accordance with this Agreement. When authorizing such payment in
exchange therefore, the Board of Directors of the Surviving Corporation may, in
its discretion and as a condition precedent to the issuance thereof, require the
owner of such lost, stolen or destroyed certificate to give the Surviving
Corporation such indemnity as it may reasonably direct as protection against any
claim that may be made against the Surviving Corporation with respect to the
certificate alleged to have been lost, stolen or destroyed.
2.08. Termination of This Reorganization Agreement. This
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Reorganization Agreement and the transactions contemplated hereby may be
terminated:
(a) At any time prior to the Effective Time by
mutual consent of the Boards of Directors of Promistar and FNH;
(b) By FNH, if its Board of Directors so
determines by a vote of a majority of the members of its entire Board, at any
time during the five-day period commencing with the Determination Date if both
of the following conditions are satisfied:
(i) the number obtained by dividing the Average Closing Price by
the Starting Price (the "Promistar Ratio") shall be less than .875; and
(ii) the Promistar Ratio shall be less than the number obtained by
dividing the Final Index Price by the Index Price on the Starting Date
and subtracting 0.125 from the quotient in this clause (ii) (such
number being referred to herein as the "Index Ratio");
subject, however, to the following four sentences. If FNH elects to exercise its
termination right pursuant to this Section 2.08(b), it shall give written notice
to Promistar (provided that such notice of election to terminate may be
withdrawn at any time within the aforementioned five-day period). During the
five-day period commencing with its receipt of such notice, Promistar shall have
the option to increase the consideration to be received by the holders of FNH
Common Stock hereunder, by adjusting the Exchange Ratio (calculated to the
nearest one one-thousandth) to equal the lesser of (x) a number (rounded to the
nearest thousandth) obtained by dividing (A) the product of the Starting Price,
0.875 and the Exchange Ratio (as then in effect) by (B) the Average Closing
Price and (y) a number (rounded to the nearest one one-thousandth) obtained by
dividing (A) the product of the Index Ratio and the Exchange Ratio (as then in
effect) by (B) the Promistar Ratio. If Promistar so elects within such five-day
period, it shall give prompt written notice to FNH of such election and the
revised Exchange Ratio, whereupon no termination shall have occurred pursuant to
this Section 2.08(b) and this Reorganization Agreement shall remain in effect in
accordance with its terms (except as the Exchange Ratio shall have been so
modified). If Promistar does not elect to so adjust the Exchange Ratio, this
Reorganization Agreement shall terminate at 11:59 p.m., eastern time, on the
fifth day after Promistar receives written notice from FNH of its election to
terminate.
For purposes of this Section 2.08(b), the following terms shall have
the meanings indicated:
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"Average Closing Price" shall mean the average of the closing
prices of a share of Promistar Common Stock on the Nasdaq Stock
Market's National Market (as reported in The Wall Street Journal, or if
not reported therein, in another authoritative source) during the
period of 20 consecutive trading days ending on the trading day prior
to the Determination Date, rounded to the nearest whole cent.
"Determination Date" shall mean the date on which the last
required approval of a governmental entity is obtained with respect of
the Merger and the Bank Merger, without regard to any requisite waiting
period in respect thereof.
"Final Index Price" shall mean the average of the Index Prices
for the 20 consecutive trading days ending on the trading day prior to
the Determination Date.
"Index Group" shall mean the 15 financial institutions listed
on Exhibit A hereto, the common stock of which shall be publicly traded
and as to which there shall not have been a publicly announced proposal
since the Starting Date and before the Determination Date for any such
company to be acquired. In the event that the common stock of any such
company ceases to be publicly traded or a proposal to acquire any such
company is announced after the Starting Date and before the
Determination Date, such company shall be removed from the Index Group,
and the weights (which have been determined based on the number of
outstanding shares of common stock and the market prices of such stock)
attributed to the remaining companies shall be adjusted proportionately
for purposes of determining the Final Index Price.
"Index Price," on a given date, shall mean the weighted
average (weighted in accordance with the factors listed above) of the
closing prices on such date of the common stocks of the companies
comprising the Index Group, as such prices are reported on the
consolidated transactions reporting system for the market or exchange
on which such common stock is principally traded on such date.
"Starting Date" shall mean the last trading day immediately
preceding the date of the first public announcement of entry into this
Reorganization Agreement.
"Starting Price" shall mean the closing price of a share of
Promistar Common Stock on the Nasdaq Stock Market's National Market (as
reported in The Wall Street Journal, or if not reported therein, in
another authoritative source) on the Starting Date.
If any company belonging to the Index Group or Promistar declares or
effects a stock dividend, reclassification, recapitalization, split-up,
combination, exchange of shares or similar transaction between the Starting Date
and the Determination Date, the prices for the common stock of such company
shall be appropriately adjusted for the purposes of applying this Section
2.08(b).
(c) As provided in Section 2.06(c);
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(d) At any time, by either Party hereto in
writing, if the applications for prior approval referred to in Section 4.03(e)
hereof have been denied, and the time period for appeals and requests for
reconsideration has run;
(e) At any time, by either Party hereto in
writing, if the stockholders of FNH do not approve the transactions contemplated
herein at the annual or special meeting duly called for that purpose;
(f) At any time, by either Party in writing, if
any of the conditions precedent to such Party's obligations to consummate the
Merger has not been satisfied, fulfilled or waived by the Party entitled to so
waive on or before the Closing Date, as postponed under Section 2.06(b);
(g) Upon exercise of the Option in whole or in
part; or
(h) In any event, automatically on December 31,
2001, if the Merger has not been consummated on or before such date, unless
extended by mutual consent of the Parties.
2.09. Consequences of Termination. Upon any termination
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hereunder:
(a) Sections 2.09, 2.10 and 2.11 and Article VI
hereof shall survive any termination;
(b) If Promistar terminates this Reorganization
Agreement under Section 2.06(c) due to the failure of any of the conditions set
forth in Section 5.01(a), (b), (c) or (m) and satisfaction of such condition was
within the control of FNH, or if this Reorganization Agreement terminates under
Section 2.08(f), then FNH shall reimburse Promistar for attorneys' fees and
other expenses reasonably incurred in connection with the Transactions; any such
failure of condition shall constitute a breach of this Reorganization Agreement,
and Promistar shall have all rights available in law and at equity for such
breach of contract;
(c) If FNH terminates this Reorganization
Agreement under Section 2.06(c) due to the failure of any of the conditions set
forth in Section 5.02(a), (b) or (c), and satisfaction of such condition was
within the control of Promistar or any of its Subsidiaries, then Promistar shall
reimburse FNH for attorneys' fees and other expenses reasonably incurred in
connection with the Transactions; such failure shall constitute a breach of this
Reorganization Agreement, and FNH shall have all rights available in law and at
equity for such breach of contract;
(d) If Promistar terminates this Reorganization
Agreement under Section 2.06(c) due to the failure of any of the conditions set
forth in Section 5.01(d), (g), (h), (j), (k), or (l), then FNH shall reimburse
Promistar for attorneys' fees and other expenses reasonably incurred in
connection with the Transactions and upon payment in full thereof, FNH shall
have no further liability or obligation hereunder to Promistar; and
(e) If FNH terminates this Reorganization
Agreement under Section 2.06(c) due to the failure of any of the conditions set
forth in Section 5.02(g), (h) or (i), then
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Promistar shall reimburse FNH for attorneys' fees and other expenses reasonably
incurred in connection with the Transactions and upon payment in full thereof,
Promistar shall have no further liability or obligation hereunder to FNH.
(f) If FNH terminates this Reorganization
Agreement under Section 2.08(b) and Promistar has not made the election
thereunder to adjust the Exchange Ratio, then Promistar shall reimburse FNH for
attorneys' fees and other expenses reasonably incurred in connection with the
Transactions and upon payment in full thereof, Promistar shall have no further
liability or obligation hereunder to FNH.
In no event shall the amount reimbursed for attorneys'
fees and other expenses reasonably incurred in connection with the Transactions
under clause (d) or (e) of this Section 2.09 exceed $250,000.
2.10. Confidentiality. The Parties have executed a certain
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Confidentiality Agreement, dated December 19, 2000 (the "Confidentiality
Agreement") in connection with the Merger. Each Party has furnished and will
furnish to the other Party, pursuant to this Reorganization Agreement or
otherwise, confidential information concerning its business and financial
condition. Each Party shall, and shall cause its employees, agents, accountants,
attorneys and investment advisors to, maintain the confidentiality of such
information received from the other Parties pursuant to the terms of the
Confidentiality Agreement and shall not use such information for any purpose
except in furtherance of the Merger and the other transactions contemplated
hereby. In the event of a termination of this Reorganization Agreement, the
terms of the Confidentiality Agreement shall continue to apply and, upon request
by a Party, the other Party shall return or destroy all copies of written
confidential information received from such Party, whether pursuant to this
Reorganization Agreement or otherwise, and all documents prepared by them which
contain such information.
2.11. Public Disclosure. Each Party shall consult with the
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other Parties before issuing any press release or making any other public
disclosure regarding the proposed Merger or the other transactions contemplated
hereby and shall not issue any press release or make any other public disclosure
prior to such consultations, except as may be required, in the opinion of
counsel, by law or by the rules of the NASD. A copy of such press release or
public disclosure (or, if not in written form, a written description thereof)
shall be provided to the other Parties prior to the dissemination thereof.
ARTICLE III
SHAREHOLDER APPROVAL
3.01. FNH Shareholders Meeting. FNH shall submit this
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Reorganization Agreement to its shareholders for approval in accordance with the
BCL at a meeting duly convened and held on such date as shall be agreed upon by
the Parties. In connection with such meetings, FNH shall furnish the Proxy
Statement/Prospectus to its shareholders. The Board of Directors of FNH shall
recommend the proposed Merger to its shareholders and use their best efforts to
obtain the affirmative vote of the shareholders required to approve the
transactions contemplated by this Reorganization Agreement.
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ARTICLE IV
REPRESENTATIONS, WARRANTIES AND COVENANTS
4.01. Representations and Warranties of FNH. FNH represents
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and warrants to Promistar as follows:
(a) Organization and Capitalization. FNH is a
corporation duly organized and validly existing under Pennsylvania law. FNH has
the corporate power and authority to carry on its business as it is now being
operated and to carry out the transactions contemplated by this Reorganization
Agreement. The authorized capital stock of FNH consists of 1,000,000 shares of
common stock having no par value, of which 149,753 shares are issued and
outstanding as of the date hereof and 9,517 shares are held in the treasury of
FNH. To the knowledge of FNH, all issued and outstanding shares of FNH Common
Stock are validly issued, fully paid and nonassessable. Except as disclosed on
Schedule 4.01(a), there is no subscription, option, warrant, call, right, stock
appreciation right or commitment of any kind obligating FNH to issue any of its
stock or to acquire any of its stock under any circumstances or to pay cash on
account of stock appreciation.
(b) The Bank. The Bank is a national banking
association duly organized and validly existing under the National Bank Act. The
Bank has the corporate power and authority to carry on its business as it is now
being operated and to carry out the transactions contemplated by this
Reorganization Agreement. The Bank's deposits are insured by the Bank Insurance
Fund of the FDIC. The authorized capital stock of the Bank consists of 45,000
shares of common stock having a par value of $10.00 per share, of which all
shares are issued and outstanding as of the date hereof and are owned of record
and beneficially by FNH. No shares are held in the treasury of the Bank. All
issued and outstanding shares of the Bank are validly issued, fully paid and
nonassessable. There is no subscription, option, warrant, call, right, stock
appreciation right or commitment of any kind obligating the Bank to issue any of
its stock or to acquire any of its stock under any circumstances or to pay cash
on account of stock appreciation. FNH owns all of the issued and outstanding
common stock of the Bank.
(c) Other Subsidiaries. Towne & Country Mortgage
Corporation ("Towne & Country") is a corporation validly existing under the laws
of the Commonwealth of Pennsylvania. Towne & Country has full power and
authority to carry on its business as it is now being operated and to carry out
the transactions contemplated by this Reorganization Agreement. The authorized,
issued and outstanding capital stock of Towne & Country consists of 1,000 shares
of common stock with no par value per share. All issued and outstanding shares
of Towne & Country common stock are validly issued, fully paid and nonassessable
and are owned of record and beneficially by the Bank.
First Insurance Management, L.L.C. ("First Insurance")
is a limited liability company validly existing under the laws of the
Commonwealth of Pennsylvania. First Insurance has full power and authority to
carry on its business as it is now being operated and to carry out the
transactions contemplated by this Reorganization Agreement. All issued and
outstanding membership interests of First Insurance are validly issued, fully
paid and nonassessable. Fifty-one percent (51%) of the membership interests of
First Insurance are owned of record and beneficially by the Bank, twenty-four
and one half percent (24.5%) of the
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membership interests of First Insurance are owned of record and beneficially by
Xxxxxx X. Xxxx and twenty-four and one half percent (24.5%) of the membership
interests of First Insurance are owned of record and beneficially by Xxxxxx X.
Xxxxx. There are no other issued and outstanding membership interests of First
Insurance.
(d) Authority for Transactions. This
Reorganization Agreement has been, and the Articles of Merger, when executed and
delivered, will have been, duly and validly authorized, executed and delivered
by FNH, subject only to Regulatory Approvals and approval by the shareholders of
FNH, and upon such approvals, each will constitute the valid and binding
obligations of FNH and are and will be enforceable in accordance with their
respective terms.
(e) No Conflicts. Except as set forth on
Schedule 4.01(e), neither the execution, delivery and performance of this
Reorganization Agreement nor the consummation of the transactions contemplated
hereby, nor compliance by FNH and any of its Subsidiaries with any of the
provisions hereof or thereof will (i) violate, or conflict with, or result in a
breach of any provisions of, or constitute a default (or an event which, with
notice or lapse of time or both, would constitute a default) under, or result in
the termination of, or accelerate the performance required by, or result in a
right of termination or acceleration under, or result in the creation of any
lien, security interest, charge or encumbrance upon any of the properties or
assets of FNH or any of its Subsidiaries under any of the terms, conditions or
provisions of, (A) the articles of incorporation or bylaws, as amended, of FNH
or any of its Subsidiaries or (B) any note, bond, mortgage, indenture, deed of
trust, license, lease, agreement or other instrument or obligation to which FNH
or any of its Subsidiaries is a party or by FNH or any of its Subsidiaries which
is bound or to which any of FNH's properties or assets or any of its
Subsidiaries' properties or assets may be subject, except for such violations,
conflicts, breaches, defaults, terminations, accelerations, rights or creations
which would not, in the aggregate, have a material adverse effect on FNH's or
any of its Subsidiaries' business or financial condition, or (ii) violate any
judgment, ruling, order, writ, injunction, decree, statute, rule or regulation
applicable to FNH or any of its properties or assets or any of its Subsidiaries'
or their properties or assets.
(f) Financial Statements. FNH's annual reports
to shareholders for the fiscal years ended December 31, 1997, 1998 and 1999 and
the interim financial statements for the six months ended June 30, 2000, did not
and will not, at the time of such report or documents, 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 made therein, in light of the
circumstances under which they were made, not misleading; and each of the
balance sheets included in such report or documents (including the related notes
and schedules thereto) fairly presents and will fairly present the financial
position of the entity or entities to which it relates as of its date and each
of the statements of income and changes in stockholders' equity and cash flows
or equivalent statements in such report and documents (including any related
notes and schedules thereto) fairly presents and will fairly present the results
of operations, changes in stockholders' equity and changes in cash flows, as the
case may be, of the entity or entities to which it relates for the periods set
forth therein, in each case in accordance with generally accepted accounting
principles consistently applied during the periods involved, except in each case
as may be noted therein, subject to normal year-end audit adjustments in the
case of unaudited statements.
- 13 -
(g) Certain Changes. Except as provided on
Schedule 4.01(g), since June 30, 2000, there has been (i) no material adverse
change in the financial condition, assets, liabilities, income or operations of
FNH, or any of its Subsidiaries; (ii) no material change in the organization or
key personnel of FNH or any of its Subsidiaries; (iii) no material damage,
destruction or casualty loss with respect to property owned or leased by FNH
(whether or not covered by insurance) which affected or could affect the
business or financial condition or results of FNH; (iv) no changes in the
authorized or issued shares of FNH or any of its Subsidiaries and no declaration
or payment of distributions with respect to the FNH Common Stock or the capital
stock of any of its Subsidiaries or redemption or repurchase of any such shares,
except for Permitted Dividends; or (v) no acquisition by FNH or any of its
Subsidiaries of the assets or more than 5% of the outstanding voting capital
stock of another bank or trust company.
(h) Taxes. FNH and its Subsidiaries have filed
when due all returns ("Returns") for and paid in full all material state,
federal and local Taxes to the extent such filings and payments were required
prior to the date of this Reorganization Agreement. Such filings comply with all
applicable laws and are true, correct and complete in all material respects. Any
amounts set up as accruals or reserves in the audited financial statements of
FNH are sufficient in all material respects for the payment of all Taxes,
whether or not presently being asserted or assessed, the liability for which has
arisen from any action of FNH or any of its Subsidiaries prior to the dates of
such financial statements. To the knowledge of FNH, no claims are currently
being made by any taxing authority with respect to any Return, and FNH has no
knowledge of any basis for any such claims. Proper and accurate amounts have
been withheld and remitted by FNH and its Subsidiaries from and for their
employees for all prior periods in compliance with the tax withholding
provisions of applicable federal, state and local law. FNH and its Subsidiaries
have not had any Tax deficiencies proposed or assessed against it and has not
executed any waiver or extended the statute of limitations on the audit of any
Return or the assessment or collection of any Tax. FNH and its Subsidiaries have
not made any payment, nor is either obligated to make any payment, nor is it a
party to any agreement that under certain circumstances could obligate it to
make any payment, that would not be deductible under Code Sections 280G or
162(m).
(i) Litigation. Except as set forth on Schedule
4.01(i), no action, suit, investigation, claim or proceeding of any nature or
kind whatsoever, whether civil, criminal or administrative, by or before any
governmental body or arbitrator ("Litigation") is pending or, to the knowledge
of FNH, threatened against or affecting FNH, or any of its Subsidiaries, or
their respective businesses, business assets, Common Stock or capital stock, or
any of the transactions contemplated by this Reorganization Agreement, and, to
the knowledge of FNH, there is no basis for any Litigation. There is presently
no outstanding judgment, decree or order of any governmental body against or
affecting FNH or any of its Subsidiaries, or their respective businesses,
business assets, Common Stock, or any of the transactions contemplated by this
Reorganization Agreement.
(j) Compliance With Laws. FNH and each of its
Subsidiaries are in compliance in all material respects with all laws and
regulations applicable to its operations or with respect to which compliance is
a condition of engaging in the business thereof. FNH and the Bank have paid all
assessments and filed all reports and statements required to be filed with
respect thereto under the rules and regulations of the Comptroller.
- 14 -
(k) Agreements With Banking Authorities. Neither
FNH nor any of its Subsidiaries is a party to any written agreement or
memorandum of understanding with, or a party to any commitment letter or similar
undertaking to, or is subject to any order or directive by, the Federal Reserve
or the Comptroller or any other regulatory agency which restricts its activities
in any manner, or in any manner relates to the capital adequacy, credit policies
or management of FNH or any of its Subsidiaries, nor has FNH or any of its
Subsidiaries been advised by any such regulatory agency that it is
contemplating, issuing or requesting (or is considering the appropriateness of
issuing or requesting) any such order, directive, agreement, memorandum of
understanding, commitment letter or similar undertaking.
(l) Regulatory Reports. FNH and its Subsidiaries
have made available for inspection by Promistar (i) copies of all reports, if
any, by FNH or its Subsidiaries to the Comptroller and (ii) all material
notices, reports and review letters received from the Federal Reserve or
Comptroller or any other governmental agency.
(m) Loans. Each loan outstanding on the books
of the Bank is reflected correctly in all material respects by the loan
documentation relating thereto, was made in the ordinary course of business, was
not known to be uncollectible at the time it was made, and was made in
accordance with the Bank's standard loan policies. The Bank has not received
notice from any obligor on any such loan of a dispute with respect to that loan
or that the loan may be unenforceable against the obligor. All loans sold by the
Bank, including whole loans and participations, were sold without recourse. As
of December 31, 2000, except as set forth in Schedule 4.01(m) attached hereto,
the Bank: (i) had no loans, of any type or character, in its portfolio (A)
exceeding its lending limits under applicable provisions of Pennsylvania and
federal law, or (B) in violation of Regulation O or 12 C.F.R. Part 215, or
similar provisions under Pennsylvania law; (ii) had no loans, of any type or
character, in its portfolio in excess of $100,000 which were or should have been
as of such date (A) considered non-performing or placed on a non-accrual status
or (B) classified by as other loans specially mentioned, substandard, doubtful
or loss loans, except in any case such loans as were listed on the Bank's most
recent internal classified asset report, a copy of which has been made available
to Promistar. For purposes of this Reorganization Agreement, "non-performing"
and "non-accrual" shall mean any loan delinquent for 90 days or more as to the
payment of interest and/or principal.
(n) Loan Loss Reserve. The loan loss reserve
maintained by the Bank for all loans in its portfolio is adequate in all
material respects under the requirements of generally accepted accounting
principles and practices within the banking industry to cover all material known
and anticipated risks of nonpayment with regard to the Bank's loan portfolio.
(o) Core Deposits. The Bank has delivered to,
or made available for inspection by, Promistar a summary of the total amounts
held by depositors that in the aggregate each have less than $100,000 on deposit
with the Bank ("Core Deposits"). In addition, as described on Schedule 4.01(o),
the Bank has delivered to, or made available for inspection by, Promistar a
summary of all depositors that have monies on deposit at the Bank that are not
Core Deposits.
(p) Real Property. FNH and its Subsidiaries
have good and marketable title to the real property (including real estate owned
or acquired through foreclosure)
- 15 -
listed in Schedule 4.01(p) ("Owned Real Property"), free and clear of all
material liens, leases, security interests, title retention agreements,
encumbrances, restrictions, conditions, charges, equities and claims, except
those referred to in FNH's statement of financial condition dated December 31,
1999 or the notes thereto or which have arisen since such date as set forth on
Schedule 4.01(p), liens for current Taxes not yet due and payable, any unfilled
mechanics' liens and such encumbrances and imperfections of title, if any, as
are not substantial in character or amount or do not otherwise materially impair
FNH or any of its Subsidiaries, as the case may be. The present uses of the
Owned Real Property are in compliance with the present zoning classifications
assigned to such real property, and all improvements constructed on the land
included in the Owned Real Property have been constructed in all material
respects in accordance with the requirements of all applicable building, health,
safety, environmental, zoning and other federal, state and local laws,
ordinances, regulations, codes, licenses or permits applicable at the time of
such construction, do not contain any defect in design or construction or
otherwise, and have access to existing highways, roads and utility services.
Neither FNH nor any of its Subsidiaries have received any notice or request from
any governmental authority, utility, insurer, board of fire authorities or
similar organization for the performance of any work or alteration with respect
to the Owned Real Property or for the termination or limitation of any access,
services or insurance with respect thereto. All such Owned Real Property is
adequately insured against loss, except with respect to Environmental
Conditions. Neither FNH nor any of its Subsidiaries own any real property not
listed in Schedule 4.01(p).
(q) Environmental. Except as disclosed in
Schedule 4.01(q) attached hereto:
(i) To the knowledge of FNH and its
Subsidiaries, there are no Environmental Conditions. The term
"Environmental Condition" means (x) the presence in surface
water, groundwater, drinking water supply, land surface,
subsurface strata, above-ground or underground storage tanks
or other containers, or ambient air of any pollutant,
contaminant, industrial waste, hazardous waste,
polychlorinated biphenyls, radioactive materials, toxic or
hazardous substances ("Hazardous Substances") or (y) any
violation of any statute, ordinance, regulation,
administrative order, judicial order or decree or other
governmental requirement relating to the emission, discharge,
deposit, disposal, leaching, migration or release of any
Hazardous Substance into the environment or the generation,
treatment, storage, transportation or disposal of any
Hazardous Substance (i) arising out of or otherwise related to
the operations or other activities (including the disposition
of such materials or substances) of FNH, or any of its
Subsidiaries, or of any predecessor in title, interest or line
of business to FNH, conducted or undertaken prior to the
Closing, or (ii) existing at or prior to the Closing at any
Owned Real Property, any real property leased by FNH, or any
of its Subsidiaries, ("Leased Real Property"), or any property
previously owned, leased, occupied, used or foreclosed upon
("Prior Property");
(ii) To the knowledge of FNH, no
investigation, administrative order, consent order, agreement,
litigation or settlement with respect to any Environmental
Condition is proposed, threatened or in existence, and FNH and
its
- 16 -
Subsidiaries have not received any communication from or on
behalf of any governmental authority that alleges that any
such Environmental Condition exists;
(iii) To the knowledge of FNH or its
Subsidiaries, with respect to FNH's or its Subsidiaries'
operations or other activities, any Owned Real Property,
Leased Real Property or Prior Property, FNH and each of its
Subsidiaries have complied in all material respects with, and
currently are in compliance in all material respects with: (A)
the terms and conditions of all Governmental Approvals issued
or required pursuant to any Environmental Law, and (B) all
other limitations, restrictions, standards, prohibitions,
requirements, obligations, schedules and timetables contained
in any Environmental Law, or in any written notice, order, or
demand letter issued, entered, promulgated, or approved
pursuant to any Environmental Law;
(iv) Neither FNH nor any of its Subsidiaries
have received any notice of violation or other notification
from any Governmental Authority, or any written notice from
any third party, alleging that FNH or any of its Subsidiaries
is now or has been in violation of any Environmental Law;
(v) To the knowledge of FNH and its
Subsidiaries, no ozone depleting substances ("ODS"),
polychlorinated biphenyls ("PCBs"), asbestos containing
material ("ACM"), or urea formaldehyde insulation ("UFI") is
present on or at any Owned Real Property, Leased Real Property
or any Prior Property and FNH and each of its Subsidiaries
have complied, in all material respects, with all regulatory
requirements relating to the storage, removal, disposal or
release, if any, of ODS, ACM, PCB, or UFIs which currently are
or may in the past have been located on or at any Owned Real
Property, Leased Real Property, and any Prior Property;
(vi) To the knowledge of FNH and each of its
Subsidiaries, there are not now any underground or aboveground
storage tanks and associated piping ("Storage Tanks") on or at
any Owned Real Property, Leased Real Property, or Prior
Property, nor has FNH nor any of its Subsidiaries owned or
operated Storage Tanks at any time;
(vii) With respect to the ownership, use,
occupation, operation and other activities of FNH, any Owned
Real Property, Leased Real Property and any Prior Property,
neither FNH nor any of its Subsidiaries have received any
written request for information from any Governmental
Authority or other Person related to any site which is, or may
be, subject to actions for removal, response, remediation or
cleanup of Hazardous Substances, including, but not limited
to, any information request pursuant to CERCLA, comparable
state statutes, or other Environmental Law;
(viii) To the knowledge of FNH, neither FNH
nor any of its Subsidiaries, nor any other Person ever caused
or permitted any Hazardous Substances to be placed, stored,
treated, handled or located on, under or at any
- 17 -
Owned Real Property, Leased Real Property, or Prior Property
or any part thereof other than in the ordinary course of
business and in compliance with all Environmental Laws;
(ix) To the knowledge of FNH, FNH and its
Subsidiaries have complied in all material respects with all
applicable provisions of any Environmental Laws that
condition, restrict or prohibit the transfer, sale, lease or
closure of any property for environmental reasons; no
environmental lien has attached to any portion of FNH or any
of its Subsidiaries or any Owned Real Property, Leased Real
Property, Secured Real Property or Prior Property, and no
governmental actions have been taken or are in progress that
could subject any or all of the foregoing to any such lien;
and
(x) FNH and its Subsidiaries have provided
copies of all material reports, documents and other
information pertaining to compliance with Environmental Laws
and environmental matters or liabilities arising out of,
resulting from or in connection with the operations of FNH or
any of its Subsidiaries, any Owned Real Property, Leased Real
Property or Prior Property.
(r) Personal Property. All personal property
used by FNH and its Subsidiaries in its business is either owned or leased by
FNH or its Subsidiaries and is generally suitable for the operations and
business as currently conducted by FNH and its Subsidiaries.
(s) Leases. All leased real property and leased
personal property of FNH and its Subsidiaries is listed in Schedule 4.01(s)
attached hereto. Except as disclosed in Schedule 4.01(s), no consents or
approvals are required under the leases for such property in connection with the
transactions contemplated by this Reorganization Agreement.
(t) Material Contracts. True, correct and
complete copies of all material contracts, agreements, plans, loans, leases,
indentures, mortgages, instruments, or other commitments, arrangements,
understandings, letters of credit or undertakings, oral or written, formal or
informal, to which FNH or any of its Subsidiaries is a party or otherwise bound
or to which its assets may be affected have been submitted or made available to
Promistar or are included as part of Schedule 4.01(t) (hereinafter referred to
individually as a "Contract" and collectively as the "Contracts"). There is no
breach or default (or an event which, with notice or lapse of time or both,
would constitute a default) by FNH or any of its Subsidiaries of or with respect
to any provision of any Contract to which FNH is a party that could have a
material adverse effect upon the financial condition, operations, results of
operations or business of FNH. All such Contracts, including but not limited to
all contracts relating to the purchase and sale of loans, are or will be
assignable to Promistar or Promistar Bank, as the case may be, without further
action thereby effective as of the Closing Date, except as listed in Schedule
4.01(t). Neither FNH nor any of its Subsidiaries is currently renegotiating any
Contract.
(u) Insurance. Neither FNH nor any of its
Subsidiaries is in default with respect to any provisions of any liability or
other forms of insurance held by each or has failed to give any notice or
present any claim thereunder in a due and timely fashion. All polices of
insurance are in full force and effect and are carried in an amount and are
otherwise adequate
- 18 -
to protect FNH from any material adverse loss on a consolidated basis. Neither
FNH nor any of its Subsidiaries have been denied any application for insurance
or had any policy of insurance terminated during the past three years, nor has
FNH or any of its Subsidiaries been notified of any pending termination.
(v) Employee Benefits.
(i) Benefit Plans; Company Plans. Schedule
4.01(v) discloses all written and unwritten "employee benefit
plans" within the meaning of Section 3(3) of ERISA, and any
other written and unwritten profit sharing, pension, savings,
employee stock ownership, deferred compensation, consultant,
bonus, fringe benefit, insurance, medical, medical
reimbursement, life, disability, accident, post-retirement
health or welfare benefit, stock option, stock purchase, sick
pay, vacation, employment, severance, termination or other
incentive, welfare or employee benefit plan, agreement,
contract, policy, trust fund or arrangement (each a "Benefit
Plan"), whether or not funded and whether or not terminated,
(i) maintained or sponsored by FNH or any of its Subsidiaries,
or (ii) with respect to which FNH or any of its Subsidiaries
has or may have liability or is obligated to contribute, or
(iii) that otherwise covers any of the current or former
employees of FNH or any of its Subsidiaries or their
beneficiaries, or (iv) as to which any such current or former
employees or their beneficiaries participated or were entitled
to participate or accrue or have accrued any rights thereunder
(each, a "Company Plan"). For each Company Plan, to the extent
applicable to each such Company Plan, complete copies of the
following have been delivered to Promistar (but in any event,
no later than seven (7) days prior to the Closing Date): (i)
the documents embodying the Company Plans, including the plan
documents, all amendments thereto, the related trust or
funding agreements, investment management agreements,
administrative service contracts, insurance contracts, union
or trade agreements and, in the case of any unwritten Company
Plans, written descriptions thereof; (ii) annual reports
including Forms 5500 and all schedules thereto for the last
three years; (iii) financial statements for the last three
years; (iv) actuarial reports, if applicable, for the last
three years; and (v) each communication (other than routine
communications) received by FNH or any of its Subsidiaries
from or furnished by FNH or any of its Subsidiaries to the
Service, DOL, PBGC or other governmental authorities. FNH and
its Subsidiaries have also furnished to Promistar a copy of
the current summary plan description and each summary of
material modification prepared in the last three years for
each Company Plan, and all employee manuals, handbooks, policy
statements and other written materials given to employees
relating to any Company Plans. No oral or written
representations or commitments inconsistent with such written
materials have been made to any employee of by any member of
the Company Group or any employee or agent thereof.
(ii) Company Group Matters. FNH has never
been a member of a controlled group of corporations within the
meaning of Sections 414(b), (c), (m) or (o) of the Code.
- 19 -
(iii) Compliance. Each of the Company Plans
and all related trusts, insurance contracts and funds have
been created, maintained, funded and administered in all
material respects in compliance with all applicable Laws
including, without limitation, all applicable requirements of
the Code and any predecessor federal income tax laws, ERISA,
the health care continuation requirements of COBRA, and any
applicable collective bargaining agreements. Without limiting
the generality of the foregoing, FNH and its Subsidiaries have
provided all notices and other correspondence to employees and
former employees required by the health care continuation
provisions of COBRA. Each of the Company Plans and all related
trusts, insurance contracts and funds have also been created,
maintained, funded and administered in all material respects
in compliance with applicable law, the plan document, trust
agreement, insurance policy or other writing creating the same
or applicable thereto. To the knowledge of FNH and its
Subsidiaries, no Company Plan is or is proposed to be under
audit or investigation, and no completed audit of any Company
Plan proposes to impose or has resulted in the imposition of
any Tax, fine or penalty.
(iv) Qualified Plans. Schedule 4.01(v)
discloses each Company Plan that purports to be a qualified
plan under Section 401(a) of the Code and exempt from United
States federal income tax under Section 501(a) of the Code (a
"Qualified Plan"). Each Qualified Plan has received a
determination letter (or opinion or notification letter, if
applicable) from the Service that such plan is qualified under
Section 401(a) of the Code and exempt from federal income tax
under Section 501(a) of the Code. No Qualified Plan has been
amended since the date of the most recent such letter in a
manner that might adversely affect the qualification of such
plan under Sections 401(c) and 501(a) of the Code. No member
of the Company Group, nor any fiduciary of any Qualified Plan,
nor any agent of any of the foregoing, has done anything that
would adversely affect the qualified status of a Qualified
Plan or the qualified status of any related trust.
(v) Defined Benefit Plans; Multi-employer
Plans. Schedule 4.01(v) discloses each Company Plan that is a
defined benefit plan as defined in Section 3(35) of ERISA (a
"Defined Benefit Plan"). No Company Plan is a multi employer
plan as defined in Section 3(37) or 4001(a)(3) of ERISA.
Neither FNH nor any of its Subsidiaries have a material
liability for any Company Plan that is not accrued on the
December 31, 1998 Balance Sheet or, that has arisen after
December 31, 1998 and on and before the Closing.
(vi) Prohibited Transactions; Fiduciary
Duties; Post-retirement Benefits. No prohibited transaction
(within the meaning of Section 406 of ERISA and Section 4975
of the Code) with respect to any Company Plan exists or has
occurred or will occur in connection with the transactions
contemplated by this Reorganization Agreement that could
subject FNH or any of its Subsidiaries, directly or
indirectly, to any material liability or Tax under Part 5 of
Title I of ERISA or Section 4975 of the Code. No reportable
event (within the meaning of Section 4043(b) of ERISA) with
respect to any Company Plan exists or has occurred that could
result in any tax or liability material to FNH or any of its
- 20 -
Subsidiaries. No member of the Company Group, nor any
administrator or fiduciary of any Company Plan, nor any agent
of any of the foregoing, has engaged in any transaction or
acted or failed to act in a manner that could subject FNH or
any of its Subsidiaries, directly or indirectly, to any
material liability for a breach of fiduciary or other duty
under ERISA or any other applicable law. With the exception of
the requirements of Section 4980B of the Code, no
post-retirement benefits are provided under any Company Plan
that is a welfare benefit plan as described in ERISA Section
3(1).
(vii) Except as set forth on Schedule
4.01(v), the consummation of the transactions contemplated
hereby will not create, accelerate or increase any liability
under any Company Plan because of the creation, acceleration
or increase of any rights or benefits to which employees are
entitled hereunder, and no payment required under any Company
Plan in connection with the transactions contemplated hereby
shall be non-deductible for federal income tax purposes by
reason of Section 280G of the Code.
(w) Labor Relations. To the knowledge of FNH, there are no
pending or threatened labor disputes with any employees of FNH or employees of
any of its Subsidiaries. Neither FNH nor any of its Subsidiaries are a party to
a collective bargaining agreement with any of its employees. Neither FNH nor any
of its Subsidiaries has existing employment contracts with any of its current or
former employees, directors or officers, with the exception of those agreements
listed in Schedule 4.01(w).
(x) Related Party Transactions. Except to the extent set forth
on Schedule 4.01(x), neither FNH nor any of its Subsidiaries have current
contractual arrangements with or commitments to or from any officers, directors
or employees of each other than such as are terminable at will. All current
extensions of credit to the shareholders, officers, directors and employees of
FNH or any of its Subsidiaries as well as business organizations and individuals
associated either have been made in the ordinary course of FNH's or any of its
Subsidiaries' business on substantially the same terms, including interest rates
and collateral, as those prevailing at the time for comparable transactions with
other banking customers, and did not, at the time they were entered into,
involve more than the normal risk of collectability or present other unfavorable
features and are in compliance with all applicable regulations of the FDIC.
Since December 31, 1997, all transactions with the shareholders, officers,
directors and employees of FNH have complied in all material respects with the
rules of the FDIC regarding such transactions, including delivery of all reports
required thereunder. The transactions contemplated by this Reorganization
Agreement will not (either alone, or upon the occurrence of any act or event,
lapse of time or the giving of notice or failure to cure) result in any payment
(severance or otherwise) becoming due from any of the Parties to any director,
officer or employee of FNH or any of its Subsidiaries, except as contemplated
herein.
(y) Fidelity Bonds. FNH and each of its Subsidiaries
maintained continuously fidelity bonds insuring it against acts of dishonesty by
each of its employees in aggregate amounts as are customary, usual and prudent
for banking institutions of its size, which coverage currently is $2,000,000.00.
Since December 31, 1997, there have been no claims under such bonds with the
exception of the claim disclosed in Schedule 4.01(y), and neither FNH nor any of
- 21 -
its Subsidiaries is aware of any facts which would form the basis of a claim
under such bonds. Neither FNH nor any of its Subsidiaries has reason to believe
that its fidelity coverage will not continue to be available on substantially
the same terms as its existing coverage.
(z) Information Provided by FNH. All information to be
provided in writing by FNH or any of its Subsidiaries for use in the Proxy
Statement/Prospectus in connection with each of the meetings of shareholders of
FNH and Promistar contemplated hereby or in any application made by Promistar to
the Service or to any other governmental or regulatory body in connection with
the Merger, and the information to be provided in writing by FNH or any of its
Subsidiaries for use in the Registration Statement, including any prospectus
contained therein, will comply in all material respects with applicable laws and
will not contain, as of the date thereof, any untrue statement of a material
fact or omit to state a material fact necessary in order to make the statements
made therein, in light of the circumstances under which they are made, not
misleading.
(aa) Consents and Approvals. Except for: (i) the filing with
any federal or state governmental authority of a Proxy Statement/Prospectus, a
Registration Statement and any other applicable securities filings relating to
the issuance of Promistar Common Stock and the meeting of the shareholders of
FNH; (ii) Regulatory Approvals; (iii) the approval of the shareholders of FNH;
(iv) the obtaining of third party consents as set forth in Schedule 4.01(aa);
(v) the expiration of any regulatory waiting period and (vii) the notification
of NASDAQ, no consents or approvals of or filings or registrations with any
third party or any public body, agency or authority are necessary in connection
with the execution and delivery by FNH of this Reorganization Agreement and its
performance of the transactions contemplated hereby.
(bb) Investments. Except as set forth in Schedule 4.01(bb)
attached hereto, the investments reflected in FNH's statement of financial
condition as of December 31, 1999 are a true, correct and complete list of the
investments of FNH at such date.
(cc) Intellectual Property. FNH and its Subsidiaries have no
(i) patents, trademarks, tradenames, and copyrights and applications therefor or
(ii) trade secrets (collectively referred to as the "Intellectual Property"). No
claim, suit or action is pending or, to the knowledge of FNH or any of its
Subsidiaries, threatened alleging that FNH or any of its Subsidiaries is
infringing upon the intangible property rights of others, or that their use of
the Intellectual Property infringes or conflicts with the rights of others.
(dd) Minute Books. The minute books of FNH and each of its
Subsidiaries, which have been and will continue to be made available through the
Closing Date to Promistar, contain true, correct and complete records of all
meetings of the shareholders, the Board of Directors and all committees thereof
and accurately reflect all of the corporate action of the shareholders, the
Board of Directors and all committees thereof.
(ee) Reverse Repurchase Agreements. Neither FNH nor any of
its Subsidiaries have any agreements pursuant to which purchased securities are
subject to an agreement to resell.
- 22 -
(ff) Shareholder and FDIC Reports. FNH and its Subsidiaries
have delivered to, or made available for inspection by, Promistar copies of all
reports to its shareholders and the FDIC made by it with respect to the three
(3) years ended December 31, 1999 and for all calendar quarters subsequent
thereto. All such reports do 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 made therein, in light of the circumstances under which they
were made, not misleading.
(gg) Deposit Insurance. The deposits of the Bank are insured
by the Bank Insurance Fund of the FDIC in accordance with the provisions of the
FDIA, and has paid all assessments and filed all reports required by the FDIA.
(hh) No Registration. FNH does not currently have nor has it
ever had a class of securities required to be registered pursuant to the
Securities Exchange Act of 1934, as amended.
4.02. Representations and Warranties of Promistar.
-----------------------------------------------
Promistar represents and warrants to FNH as follows:
(a) Organization and Capitalization. Promistar is
a corporation duly organized, validly existing and in good standing under the
laws of the Commonwealth of Pennsylvania and has full power and authority to
carry on its business as it is now being operated and to carry out the
transactions contemplated by this Reorganization Agreement. The authorized
capital stock of Promistar consists of 25,000,000 shares of common stock having
a par value of $5.00 per share, of which 14,953,921 shares are issued and
outstanding as of the date hereof and 2,000,000 shares of preferred stock, none
of which are issued and outstanding. All issued and outstanding shares of
Promistar Common Stock are validly issued, fully paid and nonassessable and all
shares of Promistar Common Stock to be issued in the Merger shall be validly
issued, fully paid and nonassessable.
(b) Promistar Bank Organization and Capitalization.
Promistar Bank is a bank and trust company duly organized, validly existing and
in good standing under the laws of the Commonwealth of Pennsylvania and is a
member of the Federal Reserve System. Promistar Bank has full power and
authority to carry on its business as it is now being operated and to carry out
the transactions contemplated by this Reorganization Agreement. The authorized,
issued and outstanding capital stock of Promistar Bank consists of 981,864
shares of common stock having a par value of $5.00 per share. All issued and
outstanding shares of Promistar Bank common stock are validly issued, fully paid
and nonassessable and are owned of record and beneficially by Promistar.
(c) Authority for Transactions. This Reorganization
Agreement has been, and the Articles of Merger, when executed and delivered,
will have been, duly and validly authorized, executed and delivered by
Promistar, subject only to receipt of Regulatory Approvals, and upon such
approvals, each will constitute the valid and binding obligations of Promistar
and are and will be enforceable in accordance with their respective terms.
- 23 -
(d) No Conflicts. Neither the execution, delivery
and performance of this Reorganization Agreement by Promistar, nor the
consummation of the transactions contemplated hereby, nor compliance by
Promistar with any of the provisions hereof will (i) violate, or conflict with,
or result in a breach of any provisions of, or constitute a default (or an event
which, with notice or lapse of time or both, would constitute a default) under,
or result in the termination of, or accelerate the performance required by, or
result in a right of termination or acceleration under, or result in the
creation of any lien, security interest, charge or encumbrance upon any of the
properties or assets of Promistar or any of its Subsidiaries under any of the
terms, conditions or provisions of, (A) the articles of incorporation or bylaws,
as amended, of Promistar, or (B) any note, bond, mortgage, indenture, deed of
trust, license, lease, agreement or other instrument or obligation to which
Promistar or any of its Subsidiaries is a party or by which any of them is bound
or to which any of their respective properties or assets may be subject, except
for such violations, conflicts, breaches, defaults, terminations, accelerations,
rights or creations which would not, in the aggregate, have a material adverse
effect on Promistar's business or financial condition on a consolidated basis,
or (ii) subject to compliance with all applicable statutes and regulations,
violate any judgment, ruling, order, writ, injunction, decree, statute, rule or
regulation applicable to them or any of their respective properties or assets.
(e) Financial Statements and SEC Documents.
Promistar's Annual Reports on Form 10-K for the fiscal years ended December 31,
1997, 1998 and 1999, and all other reports, registration statements, definitive
proxy statements or information statements filed or to be filed by it or any of
its Subsidiaries subsequent to December 31, 1997 under the Securities Act of
1933, as amended (together with the rules and regulations thereunder, the
"Securities Act") or under Sections 13(a), 13(c) 14(d) and 15(d) of the
Securities Exchange Act of 1934, as amended (together with the rules and
regulations thereunder, the "Exchange Act"), in the form filed, or to be filed,
with the SEC (collectively, the "SEC Documents") (i) complied or will comply in
all material respects as to form with the applicable requirements under the
Securities Act or the Exchange Act, as the case may be, and (ii) did not and
will not, at the time of such filing, 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 made therein, in light of the circumstances under which
they were made, not misleading; and each of the balance sheets in or
incorporated by reference into any such SEC Document (including the related
notes and schedules thereto) fairly presents and will fairly present the
financial position of the entity or entities to which it relates as of its date
and each of the statements of income and changes in stockholders' equity and
cash flows or equivalent statements in such report and documents (including any
related notes and schedules thereto) fairly presents and will fairly present the
results of operations, changes in stockholder's equity and changes in cash
flows, as the case may be, of the entity or entities to which it relates for the
periods set forth therein, in each case in accordance with generally accepted
accounting principles consistently applied during the periods involved, except
in each case as may be noted therein, subject to normal year-end audit
adjustments in the case of unaudited statements.
(f) Certain Changes. Since December 31, 1999,
there has been: (i) no material adverse change in the consolidated financial
condition, assets, liabilities, income or operations of Promistar taken as a
whole; (ii) no material adverse change in the organization or key personnel of
Promistar or any of its Subsidiaries, except for changes in the ordinary course
- 24 -
of business, none of which, individually or in the aggregate, has been material
to the business or financial condition of Promistar on a consolidated basis;
(iii) no material damage, destruction or casualty loss with respect to property
owned or leased by Promistar or any of its Subsidiaries (whether or not covered
by insurance) which affected or could affect the business or financial condition
or results of Promistar on a consolidated basis; or (iv) no acquisition by
Promistar of the assets or more than 5% of the outstanding voting capital stock
of another savings association, bank or company.
(g) Litigation. Except for any matters referred
to in its financial statements referred to in Section 4.02(e), (i) there are no
suits, actions, investigations (formal or informal), proceedings or claims
pending or, to the knowledge of Promistar, threatened against Promistar or any
of its Subsidiaries or their respective assets or business or against their
respective officers or directors (in their capacity as such) in law or at equity
or before any governmental agency which are reasonably expected by Promistar to
have a material adverse effect on the business, properties, assets, operations
or liabilities of Promistar on a consolidated basis, or its right to conduct its
business as presently conducted, and (ii) neither Promistar nor any of its
Subsidiaries is presently subject to any injunction, order or other decree of
any court or other governmental agency of competent jurisdiction.
(h) Compliance With Laws. To the knowledge of
Promistar, Promistar and each of its Subsidiaries are in compliance in all
material respects with all laws and regulations applicable to their respective
operations or with respect to which compliance is a condition of engaging in the
business thereof, except for failures to comply which, in the aggregate, would
not have a material adverse effect on the conduct of, or the financial or other
condition of, Promistar's business on a consolidated basis. Promistar and its
Subsidiaries have paid all assessments and filed all reports and statements
required to be filed with respect thereto under the rules and regulations of the
Department of Banking, the Federal Reserve and the FDIC.
(i) SEC and Shareholder Reports. Promistar has
delivered to FNH, or made available for inspection by FNH, all reports to its
shareholders and the SEC made by it with respect to the three (3) years ended
December 31, 2000. All such reports do 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 made therein, in light of the circumstances
under which they were made, not misleading.
(j) Registration Statement. All information
relating to Promistar and its Subsidiaries which is included in the Registration
Statement at the time it becomes effective and each amendment or supplement
thereto will be accurate and complete, and will not contain any untrue statement
of a material fact or omit to state a material fact required to be stated
therein or necessary to make the statements made therein, in light of the
circumstances under which they were made, not misleading.
(k) Information Provided by Promistar. All
information to be provided in writing by Promistar for use in the Proxy
Statement/Prospectus in connection with each of the meetings of shareholders of
FNH and Promistar contemplated hereby or in any application made by Promistar to
the Service or to any other governmental or regulatory body in connection with
the Merger, and the information to be provided in writing by Promistar for use
- 25 -
in the Registration Statement, including any prospectus contained therein, will
comply in all material respects with applicable laws and will not contain, as of
the date thereof, any untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements made therein, in light
of the circumstances under which they are made, not misleading.
(l) Consents and Approvals. Except for: (i) the
filing with any federal or state governmental authority of a Proxy
Statement/Prospectus, a Registration Statement and any other applicable
securities filings relating to the issuance of Promistar Common Stock and the
meeting of FNH shareholders at which the Merger is to be considered and the
review and clearance thereof by such governmental authorities, (ii) receipt of
Regulatory Approvals, and (iii) the expiration of any regulatory waiting period,
and (iv) the notification of NASDAQ, no consents or approvals of or filings or
registrations with any third party or any public body, agency, or authority are
necessary in connection with the execution and delivery by Promistar of this
Reorganization Agreement and its performance of the transactions contemplated
hereby.
(m) Taxes. Promistar and its Subsidiaries have
filed when due all returns ("Returns") for and paid in full all material Taxes
to the extent such filings and payments were required prior to the date of this
Reorganization Agreement. Such filings comply with all applicable laws and are
true and correct. Any amounts set up as accruals or reserves in the audited
consolidated financial statements of Promistar are sufficient in all material
respects for the payment of all Taxes, whether or not presently being asserted
or assessed, the liability for which has arisen from any action of Promistar or
any of its Subsidiaries prior to the dates of such financial statements. To the
knowledge of Promistar, no claims are currently being made by any taxing
authority with respect to any Return, and Promistar has no knowledge of any
basis for any such claims. Proper and accurate amounts have been withheld and
remitted by Promistar and its Subsidiaries from and for their employees for all
prior periods in compliance with the tax withholding provisions of applicable
federal, state and local law. Promistar has not had any Tax deficiencies
proposed or assessed against it and has not executed any waiver or extended the
statute of limitations on the audit for any Return or the assessment or
collection of any Tax.
(n) Agreements with Banking Authorities. Neither
Promistar nor any of its Subsidiaries is a party to any written agreement or
memorandum of understanding with, or a party to any commitment letter or similar
undertaking to, or is subject to any order or directive by, the Department of
Banking, the Federal Reserve or the FDIC, which restricts its activities in any
manner, or in any manner relates to the capital adequacy, credit policies or
management of Promistar and its Subsidiaries, nor has Promistar or any of its
Subsidiaries been advised by any such regulatory agency that it is
contemplating, issuing or requesting (or is considering the appropriateness of
issuing or requesting) any such order, directive, agreement, memorandum of
understanding, commitment letter or similar undertaking.
4.03. Covenants of All Parties. Each of the Parties
---------------------------
covenants and agrees that:
(a) Conduct of Business. From and after the
date hereof and until the Closing Date, each Party shall, and shall cause each
of its Subsidiaries to:
- 26 -
(i) carry on its business diligently and
substantially in the same manner as heretofore and, except as
otherwise provided in this Reorganization Agreement, will not
institute any unusual or novel methods of management or
operation of its properties or business;
(ii) maintain its books and records in the
usual, ordinary and normal course;
(iii) promptly advise the other Parties in
writing of (A) the initiation of any litigation of any kind
against it or any litigation by it and (B) the happening of
any event which in the reasonable belief of its management may
have an adverse effect on either FNH or Promistar on a
consolidated basis, as the case may be;
(iv) continue in effect its present
insurance coverage at the present levels on all properties,
assets, business and personnel;
(v) use its best efforts to preserve its
business organization intact, to keep available its present
employees, to preserve its relationships with customers and
others having business dealings with it and to maintain all of
its tangible property in customary repair, order and condition
(reasonable wear and tear excepted); and
(vi) ensure that its executive officers
shall meet periodically with the executive officers of the
other Parties to exchange information on their respective
institutions, and to facilitate an orderly transition
following the Closing Date.
(b) Environmental Studies. Within sixty days
following the date of this Reorganization Agreement, Promistar shall cause to be
completed, at its sole cost and expense, a Phase I environmental assessment
("Phase I assessment") of all real estate owned by FNH (the "Premises") and
shall deliver a copy of each such Phase I assessment to FNH. If Promistar should
determine pursuant to the results of any such Phase I assessment that (A) there
has been an Environmental Condition affecting the Premises or any storage,
discharge, disposal, release or emission of any Hazardous Substance in, on or
from the Premises and (B) Promistar reasonably believes that it could become
responsible for the remediation of such storage, discharge, disposal, release or
emission or become liable for monetary damages resulting therefrom, and (C) the
remediation costs or potential liability is greater than $100,000, then
Promistar shall inform FNH in writing with specificity, including a good faith
estimate of the cost of remediation, within thirty (30) days of Promistar's
receipt of the Phase I assessment, and Promistar may, in its sole discretion,
terminate this Reorganization Agreement.
(c) Mutual Cooperation on Tax Matters. FNH and
Promistar shall each provide the other with such assistance as may reasonably be
requested by any of them in connection with the preparation of any Tax return,
any Tax audit, or any judicial or administrative proceedings relating to any
Tax, and each will retain and provide the other with any records or information
that may be relevant to such Tax return, Tax audit, proceeding or determination.
- 27 -
The Party requesting assistance hereunder shall reimburse the other for direct
expenses incurred in providing such assistance.
(d) Fulfillment of Agreements. Each Party hereto
shall use its best efforts to cause all of those conditions to the obligations
of the other under Article V that are not beyond its reasonable control to be
satisfied on or prior to the Closing and shall use its best efforts to take, or
cause to be taken, all action and to do, or cause to be done, all things
necessary, proper or advisable to consummate and make effective the transactions
contemplated by this Reorganization Agreement.
(e) Bank Regulatory Applications. As promptly
as practicable after the date hereof, Promistar, (i) shall submit any requisite
applications for prior approval of the transactions contemplated herein and in
the Certificate of Merger between FNH and Promistar and the Articles of Merger
between Promistar Bank and the Bank to the appropriate federal and state (if
applicable) financial institution regulatory authorities depending upon the
structure of the Merger, (ii) Promistar shall submit applications for prior
approval of the Merger to the Federal Reserve Board, and (iii) each of the
parties hereto shall, and they shall cause their respective Subsidiaries to,
submit any applications, notices or other filings to any other state or federal
government agency, department or body the approval of which is required for
consummation of the Merger. Promistar and FNH represent and warrant to the other
that all information concerning it, its Affiliates and their respective
directors, officers, shareholders and Subsidiaries included (or submitted for
inclusion) in any such application shall be true, correct and complete in all
material respects.
(f) Adverse Actions. No Party will:
(i) take any action that would, or is
reasonably likely to, prevent or impede the Merger from
qualifying as a reorganization within the meaning of Section
368(A) of the Code; or
(ii) knowingly take any action that is
intended or is reasonably likely to result in (A) any of its
representations or warranties set forth in the Plan being or
becoming untrue in any material respect at any time prior to
the Effective Time, (B) any of the conditions to the Merger
set forth in Article IV not being satisfied, or (C) a material
violation of any provision of this Plan.
(g) Options Plans. Prior to the Effective Time,
Promistar and FNH shall take such action as may be necessary to cause each
unexpired and unexercised option (each a "Company Option") to be automatically
converted at the Effective Time into an option (each a "Parent Option") to
purchase a number of shares of Promistar Common Stock equal to the number of
shares of FNH Common Stock that could have been purchased under the Company
Option multiplied by the Exchange Ratio, at a price per share of Promistar
Common Stock equal to the option exercise price determined pursuant to the
Company Option divided by the Exchange Ratio and subject to the same terms and
conditions as the Company Option (other than vesting). The date of grant of the
substituted Promistar Option shall be the date on which the corresponding
Company Option was granted. At the Effective Time, all reference in the stock
option agreements to FNH shall be deemed to refer to Promistar. Promistar shall
- 28 -
assume all of the FNH's obligations with respect to Company Options as so
amended and shall, from and after the Effective Time, make available for
issuance upon exercise of Promistar Options all shares of Promistar Common Stock
covered thereby and amend its Registration Statement on Form S-8 to cover the
additional shares of Promistar Common Stock subject to Promistar Options granted
in replacement of Company Options.
4.04. Covenants of FNH. FNH hereby covenants and agrees
----------------
that:
(a) Access to Corporate Records. Until the
Closing Date, FNH and each of its Subsidiaries shall give Promistar and its
representatives full access during normal business hours to all their respective
property, documents, contracts and records and such information with respect to
their business affairs and properties as Promistar from time to time may
reasonably request; provided, however, that FNH and each of its Subsidiaries
shall not be required to give such access or information to the extent that it
is prohibited therefrom by a rule, regulation or order of any regulatory body.
All documents, contracts, records or information obtained pursuant to this
Section 4.04(a) shall be and remain subject to the confidentiality provisions of
Section 2.10 of this Reorganization Agreement.
(b) Financial Statements and Internal Audit
Reports. FNH shall promptly provide Promistar with copies of its annual,
quarterly and monthly financial statements for the periods ending between the
date of this Reorganization Agreement and the Effective Time. FNH shall promptly
forward to Promistar copies of its periodic internal audit reports. FNH shall
also promptly provide or permit inspection of all reports filed by it and the
Bank during such period with the Federal Reserve Board and the Comptroller, and
copies of all notices or reports sent to its shareholders to the extent
permitted by law and all material notices, reports, and review letters received
from the Federal Reserve Board and the Comptroller. Until the Closing Date, FNH
will provide copies of all such financial statements and notices, reports and
review letters to Promistar on a prompt and timely basis.
(c) Negative Covenants - Conduct of Business.
Except with the prior written consent of Promistar, which will not be
unreasonably withheld or delayed, neither FNH nor any of its Subsidiaries, shall
on or after the date hereof:
(i) issue any capital notes or shares of its
capital stock, declare or distribute any dividend, including
any stock dividends, authorize a stock split, or authorize,
issue or make any other distribution of, on, or with respect
to, its capital stock except for (a) Permitted Dividends and
(b) the Option granted pursuant to the Stock Option Agreement
between FNH and Promistar of even date herewith;
(ii) except as permitted pursuant to Section
4.04(f) hereof, merge with, consolidate with, sell its assets
to, or acquire substantially all the assets of, any other
corporation, bank or Person, or enter into any other
transaction not in the ordinary course of business;
- 29 -
(iii) make any direct or indirect
redemption, purchase or other acquisition of any of its
capital stock;
(iv) create or award any pension or profit
sharing plan, bonus, deferred compensation, death benefit or
retirement plan, or any other employee benefit, enter into any
employment or consulting contract (written or otherwise), or
grant any bonuses to any officer, director or employee other
than in the ordinary course;
(v) amend its articles of incorporation
or bylaws except as may be necessary to consummate the
transactions contemplated by this Reorganization Agreement or
as required by law;
(vi) incur any liability or obligation or
make any commitment or disbursement, acquire or dispose of any
property or asset, make any contract or agreement, or engage
in any transaction, except in the ordinary course of business;
(vii) increase the rate of compensation of
any director, officer, employee or agent or enter into any
agreement to increase the rate of compensation of any
director, officer or employee, other than normal increases in
the ordinary course of business and consistent with past
practice;
(viii) unless permitted by Promistar, take
any action that would entitle any employee to receive
severance pay prior to the Closing Date;
(ix) intentionally do anything or
intentionally fail to do anything which will cause a breach or
a default under any contract, agreement, commitment or
obligation to which it is a party or by which it may be bound;
(x) except for securities transactions
effected in the ordinary course of business, make any capital
expenditures in excess of $150,000 in the aggregate;
(xi) modify or extend any service bureau
contracts, hardware/software maintenance agreements, lease
agreements or other contracts that involve annual payments
that exceed $25,000 per contract or $100,000 in the aggregate;
(xii) change its lending, borrowing,
investment, asset/liability management or other material
banking policies in any material respect except as may be
required by changes in applicable law, regulation or
regulatory directives, except that, in connection with the
closing of the transactions contemplated hereby, shall
cooperate in good faith with Promistar to adopt policies,
practices and procedures consistent with those utilized by
Promistar and its Affiliates;
(xiii) open or close any branch offices
except for the proposed opening of the Redstones Highlands
North Huntingdon facility;
- 30 -
(xiv) fail to pay any Tax or any other
liability or charge when due, other than charges contested in
good faith by appropriate proceedings; or
(xv) make, change or revoke any Tax election
or make any agreement or settlement with any taxing authority.
(d) Consents and Approvals. FNH and each of its
Subsidiaries shall cooperate with Promistar in furnishing such information
concerning FNH's business and affairs and its directors and officers as is
reasonably necessary or requested in order to enable Promistar to prepare and
file the Registration Statement and all applications for Regulatory Approvals,
and in obtaining such other consents required under any agreements which
Promistar shall request to be obtained to the extent required to consummate the
Merger. FNH and each of its Subsidiaries shall use its best efforts to obtain
the approval or consent of any federal, state or other regulatory agency having
jurisdiction to the extent that such approvals or consents are required to
effect the Merger and the other transactions contemplated hereby.
(e) Notice of Changes. Until the Effective Time,
FNH and each of its Subsidiaries shall give Promistar prompt written notice of
any material change or inaccuracies in any data previously given or made
available to Promistar pursuant to this Reorganization Agreement. Notice of
changes to Schedule 4.01(m) of this Reorganization Agreement shall be effected
by promptly furnishing to Promistar current monthly lists of doubtful,
nonperforming or problem loans.
(f) Acquisition Proposals. Neither FNH nor any
of its Subsidiaries, nor any of its officers or directors or the officers and
directors of its Subsidiaries, nor any of its other affiliates (as defined in
Rule 12b-2 under the Exchange Act) (each, an "Affiliate") shall, and FNH shall
cause it and its Subsidiaries' its employees, agents and representatives
(including, without limitation, any investment banking, legal or accounting firm
retained by and any individual member or employee of the foregoing) (each, an
"Agent") not to,
(i) initiate, solicit or encourage, directly
or indirectly, any inquiries or the making or implementation
of any proposal or offer (including, without limitation, any
proposal or offer to any of them or their respective
shareholders) with respect to a merger, acquisition,
consolidation, recapitalization, liquidation, dissolution or
similar transaction involving, or any purchase of all or a
substantial portion of the assets or equity securities of,
(any such proposal or offer being hereinafter referred to as
an "Acquisition Proposal") or
(ii) engage in any negotiations concerning,
or provide any confidential information or data to, or have
any discussions with, any Person relating to an Acquisition
Proposal, or
(iii) otherwise cooperate in any effort or
attempt to make, implement or accept an Acquisition Proposal.
Notwithstanding the foregoing, FNH may, in response to an unsolicited written
Acquisition Proposal, which proposal (insofar as it relates to the consideration
to be paid to FNH or its stockholders) is not subject to a financing condition,
furnish (subject to a confidentiality
- 31 -
agreement reasonably acceptable to FNH) confidential or non-public information
concerning its business, properties or assets to a financially capable
corporation, partnership, person or other entity or group (a "Potential
Acquirer") or negotiate with such Potential Acquirer if (i) Promistar shall have
been given not less than five business days' advance written notice of FNH's
intention to do so, (ii) the board of directors of FNH is advised by its
independent financial advisors that providing confidential or non-public
information to the Potential Acquirer is likely to lead to an acquisition
transaction on terms that would yield a materially higher value to FNH's
stockholders, than the Merger and (iii) based upon advice of its independent
legal counsel, its board of directors determines in good faith that the failure
to provide such confidential or non-public information to such Potential
Acquirer would constitute a breach of its fiduciary duty to FNH and its
stockholders. In the event FNH hereto shall determine to provide any information
or negotiate as described above, or shall receive any offer of the type referred
to above, it shall promptly inform Promistar that information is to be provided,
that negotiations are to take place or that an offer has been received and shall
furnish Promistar hereto the identity of the person receiving such information
or the proponent of such offer, if applicable, and, if an offer has been
received, a description of the material terms thereof, FNH may enter into a
definitive agreement for an acquisition transaction which meets the requirements
set forth above with a Potential Acquirer with which it is permitted to
negotiate pursuant to this Section 4.04(f) only if (i) the board of directors of
FNH shall have duly determined that such acquisition transaction would yield a
materially higher value to FNH's stockholders than the Merger and that the
execution of such definitive agreement is in the best interests of FNH's
stockholders, (ii) at least ten business days prior to the execution of such
definitive agreement, FNH shall have furnished Promistar with a copy of such
definitive agreement and (iii) Promistar shall have failed within such ten
business day period to offer to amend the terms of this Reorganization Agreement
in order that the Merger would yield a value to FNH's stockholders at least
equal to the acquisition transaction. In making the determination required by
clause (i) above, the board of directors shall consider all relevant
considerations and factors, including, without limitation, the form and value of
the consideration, the extent to which the economic benefits of the acquisition
transaction differ from the economic benefits contemplated by this
Reorganization Agreement, the likelihood that the Potential Acquirer will be
able to obtain financing to consummate the acquisition transaction, the proposed
closing date, the certainty of consummation, antitrust issues and closing
conditions.
(g) Indemnification.
(i) FNH will indemnify and hold harmless
Promistar and each Person, if any, who controls Promistar
within the meaning of the Securities Act against any losses,
claims, damages or liabilities, joint or several, to which
Promistar or such controlling Persons may become subject,
under the Securities Act or otherwise, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof)
(A) arise out of or are based upon any untrue statement or
alleged untrue statement of any material fact contained in the
Registration Statement, the Proxy Statement/Prospectus or any
amendment or supplement thereto, or any related preliminary
prospectus, or arise out of or are based upon the omission or
alleged omission to state therein a material fact required to
be stated therein or necessary to make the statements therein
not misleading to the extent that any such statement or
- 32 -
omission was provided by FNH or any of its Subsidiaries to
Promistar or (B) arise out of or are based upon any untrue
statement or alleged untrue statement of any material fact or
any omission or alleged omission to state a material fact
required to be stated or necessary to make the statements not
misleading in any document distributed to any FNH shareholder
to the extent that any such statement or omission was provided
by FNH or any of its Subsidiaries to Promistar, and FNH will
reimburse Promistar and each such controlling Person for any
legal or other expenses reasonably incurred by Promistar or
such controlling Person in connection with investigating or
defending any such loss, claim, damage, liability or action;
provided, however, that FNH will not be liable in any such
case to the extent that any such loss, claim, damage or
liability arises out of or is based upon an untrue statement
or alleged untrue statement or omission or alleged omission
made in any of the Registration Statement, the Proxy
Statement/Prospectus or any amendment or supplement thereto,
or any related preliminary prospectus that was made or omitted
in reliance upon and in conformity with written information
furnished by the other Parties specifically for use therein.
This indemnity agreement will be in addition to any liability
which FNH may otherwise have.
(ii) Promptly after receipt by an
indemnified party under this Section 4.04(g) of notice of the
commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against the
indemnifying party under this Section 4.04(g), notify the
indemnifying party of the commencement thereof; but the
omission so to notify the indemnifying party will not relieve
it from any liability which it may have to any indemnified
party otherwise than under this Section 4.04(g). In case any
such action is brought against any indemnified party and it
notifies the indemnifying party of the commencement thereof,
the indemnifying party will be entitled to participate therein
and, to the extent that it may wish, jointly with any other
indemnifying party similarly notified, to assume the defense
thereof, with counsel satisfactory to such indemnified party
(who shall not, except with the consent of the indemnified
party, be counsel to the indemnifying party), and after notice
from the indemnifying party to such indemnified party of its
election so to assume the defense thereof, the indemnifying
party will not be liable to such indemnified party under this
Section 4.04(g) for any legal or other expenses subsequently
incurred by such indemnified party in connection with the
defense thereof other than reasonable costs of investigation.
(iii) If recovery is not available under the
foregoing indemnification provisions of this Section 4.04(g)
for any reason other than as specified therein, the parties
entitled to indemnification by the terms thereof shall be
entitled to contribution for liabilities and expenses, except
to the extent that contribution is not permitted under Section
11(f) of the Securities Act. In determining the amount of
contribution to which the respective parties are entitled,
there shall be considered the relative benefits received by
each party from the transactions contemplated hereby, the
parties' relative knowledge and access to information
concerning the matter with respect to which the claim was
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asserted, the opportunity to correct and prevent any statement
or omission, and any other equitable considerations
appropriate under the circumstances. FNH and Promistar agree
that it would not be equitable if the amount of such
contribution were determined by pro rata or per capital
allocations.
(h) Deposits. FNH shall offer rates on all
deposits which are in accordance with present institutional guidelines and which
are priced within local competitor offerings. Further, FNH shall not accept any
broker or out of area deposits and shall price all "jumbo deposits" in
accordance with existing practice. Such jumbo deposits shall be offered only to
local retail, public or corporate accounts.
(i) Furnishing Information. FNH and each of its
Subsidiaries shall cooperate with Promistar in furnishing such information
concerning the business of FNH and each of its Subsidiaries as is reasonably
necessary or requested in order to prepare and file the Registration Statement
and Proxy Statement/Prospectus to be used in connection with the meeting of the
stockholders of as provided in Section 3.01 hereof, or to prepare and file any
applications for regulatory or governmental approvals.
(j) Certain Tax Matters.
(i) Tax Returns and Payment of Taxes for
Periods Through the Closing Date. FNH shall include its income
on its federal income tax return for all periods up to and
including the Closing Date and will pay any tax due thereon.
FNH also shall pay its state or local income tax for all
taxable periods up to and including the Closing Date. The
income of FNH shall be apportioned for the period up to and
including the Closing Date and the period after the Closing
Date by closing the books of FNH as of the close of business
on the Closing Date.
(ii) Carrybacks. If is required to carry
back any item of loss, deduction or credit that arises in any
taxable period ending after the Closing Date to a tax return
of FNH for any taxable period ending on or before the Closing
Date, Promistar will be entitled to any refund or credit of
taxes realized as a result thereof.
(k) Stock Options and Stock Appreciation Rights.
FNH shall cause all stock options and/or stock appreciation rights to fully vest
upon the execution of this Reorganization Agreement to the extent not previously
vested and shall permit the holders thereof to exercise such options and stock
appreciation rights immediately prior to the Effective Time such that the market
price of FNH Common Stock at such exercise will be equivalent to the closing
price of Promistar Common Stock on the Closing Date multiplied by the Exchange
Ratio.
4.05. Covenants of Promistar. Promistar hereby covenants
----------------------
and agrees that:
(a) Access to Corporate Records. Until the
Closing Date, Promistar shall give FNH and its representatives full access
during normal business hours to all its property, documents, contracts and
records and such information with respect to its business affairs and properties
(in each case including those of its Subsidiaries) as FNH from time to time may
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reasonably request; provided, however, that Promistar shall not be required to
give such access or information to the extent that it is prohibited therefrom by
a rule, regulation or order of any regulatory body. All documents, contracts,
records or information obtained pursuant to this Section 4.05(a) shall be and
remain subject to the confidentiality provisions of Section 2.09 of this
Reorganization Agreement.
(b) Financial Statements. Promistar shall
promptly provide FNH with copies of its annual and quarterly financial
statements, as included in its reports on Form 10-K or 10-Q, respectively, as
filed with the SEC pursuant to the requirements of the Exchange Act, for the
periods ending between the date of this Reorganization Agreement and the
Effective Time. Until the Closing Date, Promistar will provide copies of any
reports it files with the SEC under the Exchange Act to FNH on a prompt and
timely basis.
(c) Consents and Approvals. Promistar shall use
its best efforts to obtain the approval or consent of any federal, state or
other regulatory agency having jurisdiction to the extent that such approvals or
consents are required to effect the Merger and the other transactions
contemplated hereby.
(d) Notice of Changes. Until the Effective
Time, Promistar shall give FNH prompt written notice of any material change or
inaccuracies in any data previously given or made available to FNH pursuant to
this Reorganization Agreement.
(e) Furnishing Information. Promistar shall
cooperate with FNH in furnishing such information concerning the business of
Promistar as is reasonably necessary or requested in order to prepare and file
the Registration Statement and Proxy Statement/Prospectus to be used in
connection with the meetings of the shareholders of FNH as provided in Section
3.01 hereof, or to prepare and file any applications for regulatory or
governmental approvals. Promistar shall provide to FNH and their respective
counsel a copy of the Registration Statement and each application for regulatory
or governmental approval, including all amendments to such documents, in draft
form prior to filing and provide FNH and its counsel reasonable opportunity to
comment upon such. Promistar shall provide FNH and its counsel, as soon as
practicable after the date of filing, a copy of the Registration Statement and
each application for governmental or regulatory approval. Promistar shall
provide to FNH and their respective counsel a copy of all correspondence to and
from the various regulatory agencies with respect to the Registration Statement
and the regulatory applications.
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(f) Liability Insurance for Officers and
Directors.
(i) After the Effective Time until the sixth
(6th) anniversary of the Effective Time, Promistar, as
successor to FNH, shall indemnify and hold harmless any former
directors, officers, employees or agents of FNH or any of its
Subsidiaries who have rights to indemnification under the
articles of incorporation and bylaws of FNH from and against
any and all claims, losses, liabilities or damages arising out
of or in connection with any of their activities in such
capacities or on behalf of, or at the request of FNH, prior to
the Effective Time ("Claims") in accordance with and to the
extent required under the articles of incorporation and bylaws
of FNH. This section shall not be construed to increase, in
any manner, any liabilities or obligations Promistar would
otherwise have as the successor by merger to FNH.
(ii) In the event Promistar or its
successors or assigns (i) consolidates with or merges into any
other person and shall not be the continuing or surviving
corporation or entity of such consolidation or merger or (ii)
transfers all or substantially all of its properties and
assets to any person, then and in each such case, Promistar
will use reasonable efforts so that the successors and assigns
of Promistar shall assume the obligations set forth in this
Section 4.05(f).
(g) Indemnification.
(i) Promistar will indemnify and hold
harmless FNH and each Person, if any, who controls FNH within
the meaning of the Securities Act against any losses, claims,
damages or liabilities, joint or several, to which Promistar
or such controlling Persons may become subject, under the
Securities Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) (A)
arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in the Proxy
Statement/Prospectus or any amendment or supplement thereto,
or any related preliminary prospectus, or arise out of or are
based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to
make the statements therein not misleading to the extent that
any such statement or omission relates to Promistar or (B)
arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact or any omission or
alleged omission to state a material fact required to be
stated or necessary to make the statements not misleading in
any document distributed to any shareholder to the extent that
any such statement or omission relates to Promistar, and will
reimburse and each such controlling Person for any legal or
other expenses reasonably incurred by or such controlling
Person in connection with investigating or defending any such
loss, claim, damage, liability or action; provided, however,
that Promistar will not be liable in any such case to the
extent that any such loss, claim, damage or liability arises
out of or is based upon an untrue statement or alleged untrue
statement or omission or alleged omission made in any of the
Proxy Statement/Prospectus or any amendment or supplement
thereto, or any related preliminary prospectus that was made
or omitted in reliance upon and in conformity with written
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information furnished by FNH specifically for use therein.
This indemnity agreement will be in addition to any liability
which Promistar may otherwise have.
(ii) Promptly after receipt by an
indemnified party under this Section 4.05(g) of notice of the
commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against the
indemnifying party under this Section 4.05(g), notify the
indemnifying party of the commencement thereof; but the
omission so to notify the indemnifying party will not relieve
it from any liability which it may have to any indemnified
party otherwise than under this Section 4.05(g). In case any
such action is brought against any indemnified party and it
notifies the indemnifying party of the commencement thereof,
the indemnifying party will be entitled to participate therein
and, to the extent that it may wish, jointly with any other
indemnifying party similarly notified, to assume the defense
thereof, with counsel satisfactory to such indemnified party
(who shall not, except with the consent of the indemnified
party, be counsel to the indemnifying party), and after notice
from the indemnifying party to such indemnified party of its
election so to assume the defense thereof, the indemnifying
party will not be liable to such indemnified party under this
Section 4.05(g) for any legal or other expenses subsequently
incurred by such indemnified party in connection with the
defense thereof other than reasonable costs of investigation.
(iii) If recovery is not available under the
foregoing indemnification provisions of this Section 4.05(g)
for any reason other than as specified therein, the parties
entitled to indemnification by the terms thereof shall be
entitled to contribution for liabilities and expenses, except
to the extent that contribution is not permitted under Section
11(f) of the Securities Act. In determining the amount of
contribution to which the respective parties are entitled,
there shall be considered the relative benefits received by
each party from the transactions contemplated hereby, the
parties' relative knowledge and access to information
concerning the matter with respect to which the claim was
asserted, the opportunity to correct and prevent any statement
or omission, and any other equitable considerations
appropriate under the circumstances. FNH and Promistar agree
that it would not be equitable if the amount of such
contribution were determined by pro rata or per capita
allocations.
(h) Employee Matters.
(i) Any full-time employee of FNH whose
employment with FNH or any of its Subsidiaries is terminated,
other than for cause, by Promistar within six months after the
Effective Time, and not offered a comparable job with
Promistar or an affiliate of Promistar, will be paid severance
pay equal to one week's W-2 compensation multiplied by each
year of service with FNH or any of its Subsidiaries not
exceeding twenty-six weeks' salary. Notwithstanding the
preceding sentence, if the former FNH employee so terminated
was a Vice President with FNH immediately prior to the
Effective Time, such employee will be paid severance pay equal
such employee's W-2 compensation for the 2000 calendar year.
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For purposes of this section, a job shall not be considered
comparable if it requires the employee to work less than 30
hours per week or is at a location more than 30 miles from
FNH's main office.
(ii) All employees of FNH or any of its
Subsidiaries immediately prior to the Effective Time who are
employed by Promistar following the Effective Time
("Transferred Employees") will be entitled to participate in
Promistar's employee benefit plans as to which they are
eligible without fulfilling any vesting requirement and shall
be entitled to credit for their length of service,
compensation, job classification or position with FNH or any
of its Subsidiaries, to the extent permissible under all
applicable laws and regulations and the terms and benefits of
Promistar's current benefit plans or those of its Affiliates,
as amended to the extent necessary pursuant to the terms of
this section. Promistar agrees that any preexisting condition,
limitation or exclusion in its health plans shall not apply to
Transferred Employees or their covered dependents who are
covered under a medical or hospitalization indemnity plan
maintained by FNH on the date of the Merger and then change
coverage to Promistar's medical or hospitalization indemnity
health plan at the time such Transferred Employees are first
given the option to enroll in Promistar's health plans. Except
with respect to any defined benefit pension plan sponsored by
Promistar or an Affiliate of Promistar, a Transferred
Employee's service with FNH or any of its Subsidiaries shall
be recognized as service with Promistar for purposes of
eligibility, participation, vesting, and benefit accruals,
subject to applicable break-in-service rules and to the extent
permissible under all applicable laws and regulations and the
terms and benefits of Promistar's current benefit plans or
those of its Affiliates, as amended to the extent necessary
pursuant to the terms of this section. With respect to any
defined benefit pension plans sponsored by Promistar or an
Affiliate of Promistar, a Transferred Employee's service with
FNH or any of its Subsidiaries shall be recognized as service
with Promistar for purposes of eligibility, participation,
vesting, benefit accruals, subject to the extent permissible
under all applicable laws and regulations and the terms and
benefits of Promistar's current benefit plans or those of its
Affiliates, as amended to the extent necessary pursuant to the
terms of this section.
Nothing contained in this Section shall be deemed to
be a contract for employment nor a guaranty or right to employment with
Promistar or its Affiliates for any Person, nor shall anything contained in this
Section constitute an agreement by Promistar or its Affiliates not to revise,
amend, revoke, or terminate any employee benefit plan or arrangement that it may
in the future make available to its employees, including Transferred Employees.
Notwithstanding anything contained herein to the
contrary, the obligations of Promistar contained in this Section shall survive
the Closing.
(i) Registration Statement. Promistar shall
prepare, and shall file with the SEC, and shall use its best efforts to cause to
become effective, the Registration Statement covering the shares of Promistar
Common Stock to be delivered pursuant to this Reorganization Agreement and shall
use its best efforts to register or qualify such securities, if required, under
- 38 -
applicable state securities laws. If any material change occurs in the facts set
forth in the Registration Statement, Promistar shall promptly notify FNH in
writing of such change (other than with respect to information supplied by FNH
for inclusion therein) and shall prepare, in accordance with the requirements of
the Securities Act of 1933, as amended, and file amendments to the Registration
Statement that may be appropriate or required.
ARTICLE V
CONDITIONS PRECEDENT
5.01. Conditions Precedent to the Obligations of Promistar.
------------------------------------------------------
The obligations of Promistar to consummate the transactions contemplated by this
Reorganization Agreement shall be subject to the satisfaction, on or before the
Closing Date, of each and every one of the following conditions, all or any of
which may be waived, in whole or in part, by Promistar to the extent permitted
by law:
(a) Performance of Covenants. Each of the
covenants to be performed by FNH hereunder on or before the Closing Date shall
have been duly performed in all material respects; and the President and
Secretary of FNH shall each have executed and delivered to Promistar a
certificate, dated as of the Closing Date, to the effect that such officers have
no knowledge of the nonfulfillment of the foregoing condition.
(b) Representations True at Closing. The
representations and warranties made by FNH herein and in any certificate
provided to Promistar hereunder shall be true and correct in all material
respects on the Closing Date with the same force and effect as though such
representations and warranties had been made on and as of such time (or as of
the date when made in the case of any representation and warranty which
specifically relates to an earlier date), and the President and Secretary of FNH
shall each have executed and delivered to Promistar a certificate, dated as of
the Closing Date, to the effect that such officers have no knowledge of the
nonfulfillment of the foregoing condition.
(c) Certified Resolutions. FNH and the Bank
shall each have furnished Promistar with a certified copy of resolutions duly
adopted by each of its Board of Directors with approval (by at least 80% of all
members of the entire board) authorizing and approving this Reorganization
Agreement and the transactions contemplated hereby and by the shareholders of
the Bank approving this Reorganization Agreement and the transactions
contemplated thereby.
(d) Shareholder Approval. This Reorganization
Agreement shall have been approved by the affirmative vote of the holders of at
least sixty-six and two-thirds percent (66 2/3%) of the outstanding shares of
FNH Common Stock, and FNH shall have furnished Promistar with a certified copy
of resolutions duly adopted by its shareholders authorizing and approving this
Reorganization Agreement and the transactions contemplated hereby.
(e) Government Approvals and Other Consents.
Promistar and FNH and their Subsidiaries shall have received in form and
substance satisfactory to Promistar all necessary federal and state Regulatory
Approvals, shareholder or other consents necessary to permit consummation of the
Merger and the Bank Merger transactions contemplated hereby and all applicable
- 39 -
waiting periods required by law shall have expired or elapsed. No such approvals
and consents shall require Promistar or such Subsidiary to enter into any
agreement or stipulation that is inconsistent with prior Federal Reserve,
Comptroller, FDIC or Department of Banking practice or procedure and
Pennsylvania law and all applicable waiting periods required by law shall have
expired or elapsed.
(f) No Injunction. No action, proceeding,
regulation or legislation shall have been instituted or threatened before any
court, governmental agency or legislative body to enjoin, restrain or prohibit,
or to obtain substantial damages in respect of, or which is related to or arises
out of, this Reorganization Agreement, the consummation of the transactions
contemplated hereby or the Merger, which, in the good faith judgment of
Promistar, would make it inadvisable to consummate such transactions.
(g) No Material Misstatements or Omissions.
Subject to the cure provisions of Section 2.06(b), Promistar shall not have
discovered any material error, misstatement or omission in any information
furnished in writing or to be furnished in writing to Promistar hereunder, or in
the information to be furnished by FNH or any of its Subsidiaries and contained
in the Registration Statement.
(h) Changes in Financial Condition. Since the
date of this Reorganization Agreement, there shall not have occurred any
material adverse change in the business, financial condition, or results of
operation of FNH on a consolidated basis, other than changes resulting from or
attributable to changes in laws or regulations, generally accepted accounting
principles, or interpretations thereof, that affect the banking industry
generally.
(i) Registration Statement. The Registration
Statement covering the shares of Promistar Common Stock to be issued to the
shareholders of FNH under this Reorganization Agreement shall have been declared
effective by the SEC, shall be exempt or declared effective in each state having
jurisdiction thereon, and no stop order proceeding shall be pending or
threatened with respect thereto.
(j) Opinion of Counsel. An opinion of Xxxxxxxx
Xxxxxxxxx, P.C. counsel for FNH shall have been delivered to Promistar, dated
the Closing Date, and in form and substance satisfactory to Promistar and its
counsel but continuing customary qualifications and limitations, substantially
to the effect that:
(i) FNH is a corporation duly organized,
validly existing and in good standing under the laws of the
Commonwealth of Pennsylvania and has full power and authority
to carry on its business as described in the Proxy
Statement/Prospectus and to carry out the transactions
contemplated by this Reorganization Agreement. The authorized
capital stock of FNH consists of 1,000,000 shares of common
stock having no par value per share, of which, according to
the records of FNH, 149,753 shares are issued and outstanding
as of the date hereof. All issued and outstanding shares of
FNH Common Stock are validly issued, fully paid and
nonassessable. Except as disclosed on Schedule 4.01(a), to the
knowledge of such counsel, there is no subscription, option,
warrant, call, right, stock appreciation right or commitment
- 40 -
of any kind obligating FNH to issue any of its stock or to
acquire any of its stock under any circumstances or to pay
cash on account of stock appreciation.
(ii) The Bank is a national banking
association duly organized and validly existing under the
National Bank Act. The Bank has the corporate power and
authority to carry on its business as it is now being operated
and to carry out the transactions contemplated by this
Reorganization Agreement. The Bank's deposits are insured by
the Bank Insurance Fund of the FDIC. The authorized capital
stock of the Bank consists of 45,000 shares of common stock
having a par value of $10.00 per share, of which, according to
the records of the Bank, all such shares are issued and
outstanding as of the date hereof and are owned of record and
beneficially by FNH. To the knowledge of such counsel, no
shares are held in the treasury of the Bank. All issued and
outstanding shares of the common stock of the Bank are validly
issued, fully paid and nonassessable. To the knowledge of such
counsel, there is no subscription, option, warrant, call,
right, stock appreciation right or commitment of any kind
obligating the Bank to issue any of its stock or to acquire
any of its stock under any circumstances or to pay cash on
account of stock appreciation. To the knowledge of such
counsel, FNH owns all of the issued and outstanding common
stock of the Bank.
(iii) Organization and Capitalization of
Other Subsidiaries. Towne & Country is a mortgage company
validly existing under the laws of the Commonwealth of
Pennsylvania. Towne & Country has full power and authority to
carry on its business as it is now being operated and to carry
out the transactions contemplated by this Reorganization
Agreement. The authorized, issued and outstanding capital
stock of Towne & Country consists of 1,000 shares of common
stock with no par value per share. All issued and outstanding
shares of Towne & Country common stock are validly issued,
fully paid and nonassessable and are owned of record and
beneficially by the Bank.
First Insurance is a limited liability
company validly existing under the laws of the Commonwealth of
Pennsylvania. First Insurance has full power and authority to
carry on its business as it is now being operated and to carry
out the transactions contemplated by this Reorganization
Agreement. All issued and outstanding membership interests of
First Insurance are validly issued, fully paid and
nonassessable. Fifty-one percent (51%) of the membership
interests of First Insurance are owned of record and
beneficially by the Bank, twenty-four and one half percent
(24.5%) of the membership interests of First Insurance are
owned of record and beneficially by Xxxxxx X. Xxxx and
twenty-four and one half percent (24.5%) of the membership
interests of First Insurance are owned of record and
beneficially by Xxxxxx X. Xxxxx. To the knowledge of such
counsel, there are no other issued and outstanding membership
interests of First Insurance.
(iv) This Reorganization Agreement has been,
and the Articles of Merger, when executed and delivered, will
have been, duly and validly authorized, executed and delivered
by FNH, and constitute and will constitute the valid and
- 41 -
binding obligations of FNH and are and will be enforceable in
accordance with their respective terms, except as limited by,
among other things, (a) bankruptcy, insolvency, fraudulent
conveyance, moratorium, reorganization, conservatorship,
receivership or other similar laws from time to time in effect
affecting the enforcement of creditors' rights generally or
the rights of creditors of insured depository institutions,
(b) general equitable principles, (c) laws relating to the
safety and soundness of insured depository institutions, (d)
the possible unavailability of certain remedies in the event
of non-material breaches of such agreements, and (e) the
effect or availability of equitable remedies or injunctive
relief (regardless of whether such enforceability is
considered in a proceeding in equity or at law).
(v) Neither the execution, delivery and
performance of this Reorganization Agreement by FNH, nor the
consummation of the transactions contemplated hereby, nor
compliance by FNH with any of the provisions hereof will (i)
violate, or conflict with, or result in a breach of any
provisions of, or constitute a default (or an event which,
with notice or lapse of time or both, would constitute a
default) under, or result in the termination of, or accelerate
the performance required by, or result in a right of
termination or acceleration under, or result in the creation
of any lien, security interest, charge or encumbrance upon any
of the properties or assets of FNH or any of its Subsidiaries
under any of the terms, conditions or provisions of, (A) the
articles of incorporation or bylaws, as amended, of FNH or the
Bank, or (B) any note, bond, mortgage, indenture, deed of
trust, license, lease, agreement or other instrument or
obligation known to such counsel to which FNH or any of its
Subsidiaries is a party or by which any of them is bound or to
which any of their respective properties or assets may be
subject, except for such violations, conflicts, breaches,
defaults, etc. which would not, in the aggregate, have a
material adverse effect on FNH's business or financial
condition on a consolidated basis, or (ii) to its knowledge,
violate any judgment, ruling, order, writ, injunction, decree,
statute, rule or regulation applicable to them or any of their
respective properties or assets.
(vi) FNH has obtained all necessary federal
and state governmental and Regulatory Approvals in order to
consummate the Merger.
In expressing such opinion, counsel may rely on
certificates of officers and other representatives of FNH as to matters of fact
and certificates of public officials as to matters within their jurisdiction.
Such opinion shall be governed by the Legal Opinion Accord of the ABA Section of
Business Law (1991).
(k) Expenses. FNH shall have paid all out-of-
pocket expenses and disbursements, including legal, accounting and investment
banking fees incurred by FNH in connection with the Transactions, except for
reasonable out-of-pocket expenses actually incurred that the parties acknowledge
have not been billed on or before the Closing Date; and the President and
Secretary of FNH shall each have executed and delivered to Promistar a
certificate, dated as of the Closing Date, to the effect that such officers have
no knowledge of the nonfulfillment of the foregoing condition.
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(l) Tax Opinion. Promistar shall have received
an opinion of Xxxxxxxxxxx & Xxxxxxxx LLP, in form and substance reasonably
satisfactory to Promistar, dated as of the Closing Date, substantially to the
effect that, on the basis of facts, representations and assumptions set forth in
such opinion, (i) the Merger will be treated for Federal income tax purposes as
a reorganization within the meaning of Section 368 of the Code and that
accordingly no gain or loss will be recognized by Promistar or FNH as a result
of the Merger; and (ii) no gain or loss will be recognized by FNH's shareholders
as a result of the receipt of Promistar Common Stock in the Merger. In rendering
such opinion, Xxxxxxxxxxx & Xxxxxxxx may require and rely upon representations
contained in certificates of officers of Promistar, FNH, and others.
(m) Affiliates Agreements. Promistar shall have
received a duly executed Affiliates' Agreement from each director and officer of
FNH in the form of Exhibit B attached hereto.
(n) Fairness Opinion. FNH shall have received
an opinion from Berwind Financial, L.P. dated within five days of the date of
the Proxy Statement/Prospectus that Exchange Ratio is fair from a financial
point of view to the shareholders of FNH.
(o) Xxxxxxx Agreement. Xxxxx X. Xxxxxxx ("Xx.
Xxxxxxx") and Promistar shall have entered into an agreement which terminates
certain prior agreements between Xx. Xxxxxxx and FNH and/or its Subsidiaries and
provides certain benefits to Xx. Xxxxxxx in a form consistent with the
understanding of the parties on the date hereof.
(p) Termination of FNH Corporation Employee
Stock Ownership Plan. FNH shall have taken all necessary action to cause the
termination of the FNH Corporation Employee Stock Ownership Plan effective as of
the Effective Time.
5.02. Conditions Precedent to the Obligations of
----------------------------------------------
FNH. The obligations of FNH to consummate the transactions contemplated by this
---
Reorganization Agreement shall be subject to the satisfaction, on or before the
Closing Date, of each and every one of the following conditions, all or any of
which may be waived, in whole or in part, by FNH to the extent permitted by law:
(a) Performance of Covenants. Each of the
covenants to be performed by Promistar hereunder on or before the Closing Date
shall have been duly performed in all material respects; and the President and
Secretary of Promistar shall each have executed and delivered to FNH a
certificate, dated as of the Closing Date, to the effect that such officers have
no knowledge of the nonfulfillment of the foregoing condition.
(b) Representations True at Closing. The
representations and warranties made by Promistar herein and in any certificate
provided by Promistar hereunder shall be true and correct in all material
respects on the Closing Date with the same force and effect as though such
representations and warranties had been made on and as of such time (or as of
the date when made in the case of any representation and warranty which
specifically relates to an earlier date), and the President and Secretary of
Promistar shall each have executed and delivered to FNH a certificate, dated as
of the Closing Date, to the effect that such officers have no knowledge of the
nonfulfillment of the foregoing condition.
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(c) Certified Resolutions. Promistar and
Promistar Bank shall each have furnished FNH with a certified copy of
resolutions duly adopted by the Board of Directors of Promistar and Promistar
Bank authorizing this Reorganization Agreement and the transactions contemplated
hereby and by the shareholder of Promistar Bank approving this Reorganization
Agreement and the transactions contemplated hereby.
(d) Shareholder Approval. This Reorganization
Agreement shall have been approved by the affirmative vote of the holders of at
least sixty-six and two-thirds percent (66 2/3%) of the outstanding shares of
FNH Common Stock.
(e) Government Approvals and Other Consents.
Promistar and FNH and their Subsidiaries shall have received in form and
substance satisfactory to Promistar all necessary federal and state governmental
and Regulatory Approvals, shareholder approvals and other consents necessary to
permit consummation of the Merger and the Bank Merger transactions contemplated
hereby, and all applicable waiting periods required by law shall have expired or
elapsed. No such approvals and consents shall require FNH or its Subsidiaries to
enter into any agreement or stipulation that is inconsistent with prior Federal
Reserve, Comptroller, FDIC, Department of Banking practice or procedure, or
Pennsylvania law.
(f) No Injunction. No action, proceeding,
regulation or legislation shall have been instituted or threatened before any
court, governmental agency or legislative body to enjoin, restrain or prohibit,
or to obtain substantial damages in respect of, or which is related to or arises
out of, this Reorganization Agreement, the consummation of the transactions
contemplated hereby or the Merger, which, in the good faith judgment of FNH,
would make it inadvisable to consummate such transactions.
(g) No Material Misstatements or Omissions.
Subject to the cure provisions of Section 2.06(b), FNH shall not have discovered
any material error, misstatement or omission in any information furnished in
writing or to be furnished in writing to hereunder, or in the information to be
furnished by Promistar or its Subsidiaries and contained in the Registration
Statement.
(h) Changes in Financial Condition. Since the
date of this Reorganization Agreement, there shall not have occurred any
material adverse change in the business financial condition, or results of
operation of Promistar on a consolidated basis, other than changes resulting
from or attributable to changes in laws or regulations, generally accepted
accounting principles, or interpretations thereof, that affect the banking
industry generally.
(i) Registration Statement. The Registration
Statement covering the shares of Promistar Common Stock to be issued to the
shareholders of FNH under this Reorganization Agreement shall have been declared
effective by the SEC, shall be exempt or declared effective in each state having
jurisdiction thereon, and no stop order proceeding shall be pending or
threatened with respect thereto.
(j) Opinion of Promistar and Counsel. An
opinion of Xxxxxxxxxxx & Xxxxxxxx LLP, counsel for Promistar, shall have been
delivered to FNH, dated the Closing Date, and in form and substance satisfactory
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to and its counsel but continuing customary qualifications and limitations,
substantially to the effect that:
(i) Promistar is a corporation duly
organized, validly existing and in good standing under the
laws of the Commonwealth of Pennsylvania and has full power
and authority to carry on its business as described in the
Proxy Statement/Prospectus and to carry out the transactions
contemplated by this Reorganization Agreement. The authorized
capital stock of Promistar consists of 25,000,000 shares of
common stock having a par value of $5.00 per share, of which,
according to the records of the transfer agent of Promistar,
14,953,921 shares are issued and outstanding as of the date
hereof and 2,000,000 shares of preferred stock, no par value,
none of which, according to the records of the transfer agent
of Promistar, are issued and outstanding as of the date
hereof. All issued and outstanding shares of Promistar Common
Stock are validly issued, fully paid and nonassessable.
(ii) Promistar Bank is a bank and trust
company duly organized, validly existing and in good standing
under the laws of the Commonwealth of Pennsylvania and a
member of the Federal Reserve System. Promistar Bank has full
power and authority to carry on its business as described in
the Proxy Statement/Prospectus and to carry out the
transactions contemplated by this Reorganization Agreement.
The authorized, issued and outstanding capital stock of
Promistar Bank consists of 981,864 shares of common stock
having a par value of $5.00 per share, according to the
records of Promistar Bank. All issued and outstanding shares
of Promistar Bank Common Stock are validly issued, fully paid
and nonassessable.
(iii) This Reorganization Agreement has
been, and the Articles of Merger, when executed and delivered,
will have been, duly and validly authorized, executed and
delivered by Promistar, and constitute and will constitute the
valid and binding obligations of Promistar and are and will be
enforceable in accordance with their respective terms, except
as limited by, among other things, (a) bankruptcy, insolvency,
fraudulent conveyance, moratorium, reorganization,
conservatorship, receivership or other similar laws from time
to time in effect affecting the enforcement of creditors'
rights generally or the rights of creditors of insured
depository institutions, (b) general equitable principles, (c)
laws relating to the safety and soundness of insured
depository institutions, (d) the possible unavailability of
certain remedies in the event of non-material breaches of such
agreements, and (e) the effect or availability of equitable
remedies or injunctive relief (regardless of whether such
enforceability is considered in a proceeding in equity or at
law).
(iv) Promistar has obtained all necessary
federal and state governmental and Regulatory Approvals in
order to consummate the Merger.
(v) The Registration Statement has become
effective under the Securities Act, and, to the knowledge of
such counsel, no stop order suspending the effectiveness of
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the Registration Statement has been issued and no proceedings
for that purpose have been instituted or are pending or
threatened under the Securities Act.
In expressing such opinion, counsel may rely on
certificates of officers and other representatives of Promistar as to matters of
fact and certificates of public officials as to matters within their
jurisdiction. Such opinion shall be governed by the Legal Opinion Accord of the
ABA Section of Business Law (1991).
(k) Fairness Opinion. FNH shall have received
an opinion from Berwind Financial, L.P. dated within five (5) days of the date
of the Proxy Statement/Prospectus that the Exchange Ratio is fair from a
financial point of view to the shareholders of FNH.
(l) Xxxxxxx Agreement. Xx. Xxxxxxx and Promistar
shall have entered into an agreement which terminates certain prior agreements
between Xx. Xxxxxxx and FNH and/or its Subsidiaries and provides certain
benefits to Xx. Xxxxxxx in a form consistent with the understanding of the
parties on the date hereof.
5.03. Waivers. A condition precedent as set forth in this
-------
Article V shall be deemed to be satisfied if it has been materially and
reasonably satisfied, and no Party shall fail to consummate the transactions
described herein by reason of a breach of any covenant or the failure to satisfy
a condition precedent unless such breach or failure is material to such
transactions as a whole. Any condition waived in writing by the Party entitled
to the benefit thereof shall thereafter cease to be a condition precedent for
purposes of this Article V.
ARTICLE VI
BROKERS AND EXPENSES
6.01. Brokers. Promistar represents and warrants to FNH that
-------
no broker or finder has acted for it in connection with the execution and
delivery of this Reorganization Agreement or the transactions contemplated
hereby other than Xxxxx, Xxxxxxxx & Xxxxx, Inc. FNH represents and warrants to
Promistar that no broker or finder has acted for it in connection with the
execution and delivery of this Reorganization Agreement or the transactions
contemplated hereby other than Berwind Financial, L.P. Each Party shall be
indemnified and held harmless by the other from any claim, suit, loss or expense
resulting from a breach of the other party's foregoing representation and
warranty.
6.02. Expenses. Except as otherwise provided in this
--------
Reorganization Agreement, all expenses incurred by each Party in connection with
or related to the authorization, preparation and execution of this
Reorganization Agreement, the solicitation of shareholder approval and all other
matters related to the closing of the transactions contemplated hereby,
including without limiting the generality of the foregoing, all fees and
expenses of agents, representatives, counsel and accountants employed by any
such Party, shall be borne solely and entirely by the Party which has incurred
the same.
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ARTICLE VII
MISCELLANEOUS
7.01. Further Assurances.
------------------
(a) From time to time as and when requested by
Promistar or Promistar Bank, or their respective successors or assigns, FNH, or
the officers and directors of FNH last in office prior to consummation of the
Merger, shall execute and deliver such agreements, documents and other
instruments necessary to permit the Bank Merger to take place, subject to the
completion of the Merger; (b) such further agreements, documents, deeds and
other instruments and shall take or cause to be taken such other actions,
including those as shall be necessary to vest or perfect in or to confirm of
record or otherwise in the Surviving Corporation title to and possession of all
the property, interests, assets, rights, privileges, immunities, powers,
franchises and authority of FNH, as shall be necessary or advisable to carry out
the purposes of and effect the transactions contemplated by this Reorganization
Agreement.
7.02 Survival of Representations, Warranties and Covenants.
------------------------------------------------------
All representations, warranties and covenants in this Reorganization Agreement
or in any instrument delivered pursuant hereto shall expire on, and be
terminated and extinguished on, the Closing Date, other than covenants that by
their terms are to survive or be performed after the Closing Date.
7.03 Notices. All notices, requests, demands, and other
-------
communications hereunder shall be in writing and shall be deemed to have been
duly given if delivered or sent by first-class registered or certified mail,
postage prepaid, with return receipt requested, as follows:
(a) If to FNH, to:
Xxxxx X. Xxxxxxx
Chairman, President & Chief Executive Officer
FNH Corporation
00 Xxxxxx Xxxx
Xxxxx, XX 00000
(000) 000-0000
with a copy to:
Xxxxxxx X. Xxxx, Esquire
Xxxxxxxx Xxxxxxxxx , P.C.
000 Xxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
(000) 000-0000
(b) If to Promistar:
Xxxx X. Xxxxxxxx
Chairman and Chief Executive Officer
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Promistar Financial Corporation
000 Xxxx Xxxxxx
Xxxxxxxxx, XX 00000
(000) 000-0000
with a copy to:
Xxxxxxx Xxxxxx Xxxxxxx, Esquire
Xxxxxxxxxxx & Xxxxxxxx LLP
Xxxxx X. Xxxxxx Building
000 Xxxxxxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
(000) 000-0000
or to such other address as any such Person may designate in writing to the
other Parties at the addresses listed above, in accordance with this Section.
7.04. Binding Effect. This Reorganization Agreement shall
--------------
be binding upon and inure to the benefit of the Parties hereto and their
respective successors and assigns. This Reorganization Agreement may not be
assigned by any Party without the express written consent of the other Parties.
7.05. Headings. The Article, Section, paragraph and other
--------
headings in this Reorganization Agreement are inserted solely as a matter of
convenience and for reference and are not a part of this Reorganization
Agreement.
7.06. Counterparts. This Reorganization Agreement may be
------------
executed in one or more counterparts, each of which shall be deemed an original
but all of which together shall constitute one and the same instrument.
7.07. Integration; No Third-Party Beneficiaries. This
---------------------------------------------
Reorganization Agreement constitutes the entire understanding of the Parties
with respect to the subject matter hereof and supersedes all prior agreements,
arrangements or communications, oral or written, between the Parties hereto with
respect to the subject matter hereunder. This Reorganization Agreement is not
intended to confer upon any Person other than the Parties hereto any rights or
remedies hereunder, except for the provisions of Sections 4.04(g) and 4.05(f).
7.08. Severability. If any term or other provision of this
------------
Reorganization Agreement is held by a court of competent jurisdiction to be
invalid, illegal or incapable of being enforced under any rule of law in any
particular respect or under any particular circumstances, such term or provision
shall nevertheless remain in full force and effect in all other respects and
under all other circumstances, and all other terms, conditions and provisions of
this Reorganization Agreement shall nevertheless remain in full force and effect
so long as the economic or legal substance of the transactions contemplated
hereby is not affected in any manner materially adverse to any Party. Upon such
determination that any term or other provision is invalid, illegal or incapable
of being enforced, the parties hereto shall negotiate in good faith to modify
this Reorganization Agreement so as to effect the original intent of the parties
- 48 -
as closely as possible in an acceptable manner to the end that the transactions
contemplated hereby are fulfilled to the fullest extent possible.
7.09. Amendments. This Reorganization Agreement may be
----------
changed, waived, discharged or terminated only by an instrument in writing
signed by the Party against which the enforcement of such change, waiver,
discharge or termination is sought. This Agreement is not intended to confer
upon any Person other than the Parties hereto any rights or remedies hereunder,
except for the provisions of Sections 4.04(g) and 4.05(f). Any of the terms or
conditions of this Reorganization Agreement may be waived at any time by the
Party which is entitled to the benefit thereof, or any of such terms or
conditions may be amended or modified in whole or in part at any time before or
after the vote of the shareholders of FNH and Promistar on this Reorganization
Agreement to the extent permitted by law by agreement in writing, executed in
the same manner as this Reorganization Agreement after authorization to do so by
the Board of Directors of each Party; provided, however, that such action shall
be taken only if, in the judgment of the Boards of Directors of each Party
taking the action, such waiver or such amendment or modification will not have a
material adverse effect on the benefits intended under this Reorganization
Agreement to such Party and its shareholders following approval of this
Reorganization Agreement by the shareholders of FNH, unless this Reorganization
Agreement, as modified, is resubmitted to the shareholders of FNH and Promistar
for their approval.
7.10. Governing Law. This Reorganization Agreement shall be
-------------
governed by and construed and enforced in accordance with the laws of the
Commonwealth of Pennsylvania and, where the context so requires, under
applicable federal law.
7.11. Incorporation by Reference. Any and all schedules,
----------------------------
exhibits, annexes, statements, reports, certificates or other documents or
instruments referred to herein or attached hereto are incorporated herein by
reference thereto as though fully set forth at the point referred to in this
Reorganization Agreement.
- 49 -
IN WITNESS HEREOF, each Party hereto has caused this
Reorganization Agreement to be executed on its behalf and its corporate seal to
be affixed hereto by its duly authorized officers, all as of the day and year
first above set forth.
ATTEST: FNH Corporation
/s/ V. Xxxxx Xxxxxxx /s/ Xxxxx X. Xxxxxxx
-------------------------- ------------------------------------
V. Xxxxx Xxxxxxx Xxxxx X. Xxxxxxx
Secretary Chairman, President and
Chief Executive Officer
(Corporate Seal)
ATTEST: Promistar Financial Corporation
/s/ Xxxxxxx X. Xxxx /s/ Xxxx X. Xxxxxxxx
-------------------------- ------------------------------------
Xxxxxxx X. Xxxx Xxxx X. Xxxxxxxx
Secretary Chairman and Chief Executive Officer
(Corporate Seal)
- 50 -
EXHIBIT A
INDEX GROUP
Selected from Commercial Banks with Assets between $1 - $5B
Headquartered in PA, NY, OH, MD & WV
Market
Weighting
Ticker Company St (%)
===============================================================================
1. UBSI United Bankshares, Inc. WV 16.6
2. STBA S&T Bancorp, Inc. PA 11.1
3. FCF First Commonwealth Financial Corporation PA 10.5
4. FBAN F.N.B. Corporation PA 9.0
5. NPBC National Penn Bancshares, Inc. PA 8.1
6. WSBC WesBanco, Inc. WV 7.3
7. NBTB NBT Bancorp Inc. NY 7.1
8. HNBC Harleysville National Corporation PA 6.1
9. FMBN F&M Bancorp MD 4.8
10. OMEF Omega Financial Corporation PA 4.1
11. SLFI Sterling Financial Corporation PA 4.0
12. CBU Community Bank System, Inc. NY 3.4
13. FISI Financial Institutions, Inc. NY 2.9
14. CTY Community Banks, Inc. PA 2.6
15. SECD Second Bancorp, Incorporated OH 2.5
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