E
C O N F I D E N T I A L
ACQUISITION DOCUMENT
(CASH PURCHASE AND REVERSE TRIANGULAR MERGER TRANSACTION)
****
MERGER AGREEMENT
AMONG
BOK FINANCIAL CORPORATION,
PARK CITIES BANCSHARES, INC.,
MID-CITIES BANCSHARES, INC.,
AND
MID-CITIES NATIONAL BANK
* * * *
AGREEMENT DATE OF FEBRUARY 24, 1999
INDEX
TO
MERGER AGREEMENT
SECTION PAGE
1. Purpose of this Merger Agreement. . . 1
2. The Merger. . . . . . . . . 3
3. Effect of the Merger. . . . 4
4. Representations and Warranties of Mid-Cities . 5
5. Representations and Warranties of BOKF.........................15
6. Covenants......................................................17
7. Conditions Precedent to Closing by BOKF and Park Cities........31
8. Conditions Precedent to Closing by Mid-Cities..................33
9. Closing........................................................34
10. Escrow.........................................................36
11. Miscellaneous Provisions.......................................38
EXHIBIT CAPTION
EXHIBIT NUMBER
Subsidiaries
4.3
Material Liabilities
4.6.3
Conduct of Business Prior to Closing Exceptions
4.7
Contracts and Commitments
4.9
Litigation
4.10
Brokers and Commissions
4.11
Employee Contracts and Benefit Plans
4.15
ADA Exceptions
4.16
Compensation Exceptions
6.3.7
Principal Shareholders
6.4
Employment Agreements
6.8
Mid-Cities Counsel's Opinion
7.4
Non-Competition Agreement
7.6
BOKF Counsel's Opinion
8.3
Employment Agreement Exceptions
9.1.3
MERGER AGREEMENT
This merger agreement ("Merger Agreement") is made as of February 24, 1999 (the
"Agreement Date") among:
(i) Mid-Cities Bancshares, Inc., a Texas Corporation ("Mid-Cities");
(ii) Mid-Cities National Bank ("Mid-Cities Bank");
(iii) BOK Financial Corporation ("BOKF"); and,
(iv) Park Cities Bancshares, Inc, a Texas Corporation ("Park Cities").
In consideration of the mutual covenants contained herein, the adequacy of which
is hereby expressly acknowledged, and intending to be legally bound hereby,
Mid-Cities, Mid-Cities Bank, BOKF and Park Cities agree as follows:
1. PURPOSE OF THIS MERGER AGREEMENT. The purpose of this Merger Agreement is
as follows:
1.1 Mid-Cities is a bank holding company organized under the laws of Texas with
offices in Hurst, Texas. Mid-Cities is subject to regulation by the Federal
Reserve Board ("FRB"). Mid-Cities owns all of the issued and outstanding capital
stock of Mid-Cities Bank (located in Hurst, Texas). Mid-Cities Bank is a bank
organized in accordance with the laws of the United States and subject to
regulation by the Office of the Comptroller of the Currency. The issued and
outstanding capital stock of Mid-Cities consists solely of a single class of one
million (1,000,000) shares of common stock of a par value of $1.00 per share
("Mid-Cities Common Stock") of which 764,421 shares are issued and outstanding.
The issued and outstanding capital stock of Mid-Cities Bank consists solely of a
single class of one million (1,000,000) shares of common stock of a par value of
$5.00 per
share ("Mid-Cities Bank Common Stock") of which 302,621 shares are issued and
outstanding. The Common Stock of Mid-Cities issued and outstanding as of the
Closing, including all Common Stock of Mid-Cities acquired pursuant to the
exercise of the Stock Options (as hereafter defined), is hereafter called the
"Mid-Cities Common Stock".
1.2 BOKF is a bank holding company organized under the laws of the State of
Oklahoma. BOKF is subject to regulation by the FRB. BOKF owns all of the capital
stock of Park Cities. Park Cities is a bank holding company organized under the
laws of the State of Texas. Park Cities is subject to regulation by the FRB. The
issued and outstanding capital stock of Park Cities consists solely of 2,000,000
shares of common stock, par value of $5.00 per share (the "Park Cities Shares")
of which 1,193,034 shares are issued and outstanding.
1.3 The purpose of this Merger Agreement is to set forth the terms and
conditions on which Mid-Cities and Park Cities shall merge. This Merger
Agreement shall constitute a plan of merger for corporate law purposes and for
federal income tax purposes under Section 368(a)(2)(D) of the Internal Revenue
Code.
1.4 Park Cities owns all of the issued and outstanding capital stock of Park
Cities Corporation, a Nevada Corporation. Park Cities Corporation owns all of
the issued and outstanding capital stock of Bank of Texas, National Association
("BOT").
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2. THE MERGER. On the terms and conditions hereafter stated, Park Cities [or an
acquisition subsidiary thereof] shall be merged into Mid-Cities (the "Merger").
2.1 Mid-Cities shall be the surviving corporation ("Surviving Corporation").
2.2 The Articles of Incorporation of Mid-Cities shall be the Articles of
Incorporation of the Surviving Corporation until changed as provided by law.
2.3 The Bylaws of Park Cities [or an acquisition subsidiary thereof] shall be
the Bylaws of the Surviving Corporation until changed as provided by law.
2.4 The officers of Park Cities shall be the officers of the Surviving
Corporation, until changed as provided by law.
2.5 The directors of Park Cities shall be the directors of the Surviving
Corporation until changed as provided by law.
2.6 The Merger shall be effective at the Closing (as hereafter provided in
Section 9).
2.7 Each share of Mid-Cities Common Stock shall, subject to the provisions of
Section 5.11 and following of the Texas Business Corporation Act, automatically
and without any action on the part of the holder thereof, be cancelled and
converted solely into the right to receive:
2.7.1 At Closing an amount of United States Dollars equal to (x) the Cash
Consideration (as hereafter defined) less the Escrow Amount (as hereafter
defined) divided by (y) the number of shares of Mid-Cities Common Stock; and,
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2.7.2 Upon termination of the Escrow, her, his, or its proportionate share of
the remaining Escrow Amount, as provided in Section 10.
2.8 The Cash Consideration shall equal (i) Seventeen Million Dollars
($17,000,000) less (ii) the Transaction Costs (as hereafter defined) and less
(iii) One Hundred Sixty-Five Thousand Dollars ($165,000), representing the
Mid-Cities long term debt. The Transaction Costs are all accounting, brokerage,
commission, and legal costs attributable to, or resulting from, the negotiation,
execution, delivery, and consummation of this Agreement incurred by Mid-Cities
and Mid-Cities Bank in excess of Three Hundred Thousand Dollars ($300,000). If
the Merger is not consummated by July 1, 1999, for whatever reason, the Cash
Consideration shall be increased by an aggregate amount of the total Cash
Consideration to be paid to all shareholders (prior to such adjustment)
multiplied by the result of (A) the number of days from and after July 1, 1999
to the date the Merger is consummated, multiplied by (B) .0002778 (i.e., 1/360th
of 10%).
2.9 The Escrow Amount shall be Three Hundred Thousand Dollars ($300,000).
2.10 Notwithstanding the provisions of Section 2.7, all holders of Mid-Cities
Common Stock electing to dissent to the Merger pursuant to Section 5.11 and
following of the Texas Business Corporation Act shall have only those rights set
forth in said sections.
3. EFFECT OF THE MERGER. The Merger shall have the following effects:
3.1 The corporate franchise, existence, rights and liabilities of Mid-Cities
shall continue unaffected and unimpaired.
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3.2 The corporate franchise, existence, rights and liabilities of Park Cities
[or an acquisition subsidiary] shall be merged into Mid-Cities and the
separate existence of Park Cities [or an acquisition subsidiary] shall
cease.
3.3 Mid-Cities shall have and be vested with all of the rights, powers, assets,
property, liabilities and obligations of Park Cities [or the acquisition
subsidiary thereof].
4. REPRESENTATIONS AND WARRANTIES OF MID-CITIES AND MID-CITIES BANK. Mid Cities
and Mid-Cities Bank hereby, jointly and severally, represent and warrant to BOKF
that:
4.1 INCORPORATION AND CORPORATE POWER. Mid-Cities is a corporation duly
organized, validly existing and in good standing under the laws of Texas.
Mid-Cities Bank is a bank duly organized, validly existing and in good standing
under the laws of the United States. Each of Mid-Cities and Mid-Cities Bank has
all the corporate power and authority necessary and required to own its
properties and to conduct its business as such business is now being conducted.
Each of Mid-Cities and Mid-Cities Bank is (A) in material compliance with all
applicable provisions of all applicable federal, state and local statutes, laws,
regulations, ordinances and other requirements of any governmental authorities
(including, but not limited to, whether similar or dissimilar, the Bank Holding
Company Act of 1956, the Texas Business Corporation Act, the National Bank Act
and the filing of all administrative reports and the payment of all fees) in
effect as of the date of this Merger Agreement and (B) shall be in material
compliance therewith at the time of Closing.
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4.2 CAPITAL.
4.2.1 The Mid-Cities Common Stock is and at the Closing will be all of the
issued and outstanding capital stock of Mid-Cities. Other than the Stock
Options, no person or entity has any right or option to acquire any capital
stock of Mid-Cities. The Mid-Cities Common Stock shall consist at the Closing of
no more than Nine Hundred Ninety-One Thousand Four Hundred Twenty-One (991,421)
shares.
4.2.2 Mid-Cities owns all of the issued and outstanding capital stock of
Mid-Cities Bank Common Stock. The Mid-Cities Bank Common Stock is and at the
Closing will be all of the issued and outstanding capital stock of Mid-Cities
Bank. No person or entity has any right or option to acquire any capital stock
of Mid-Cities Bank.
4.3 CAPITALIZATION OF MID-CITIES AND MID-CITIES BANK. The Mid-Cities Common
Stock and Mid-Cities Bank Common Stock are validly issued and outstanding, fully
paid and non-assessable. There are no outstanding subscriptions, conversion
privileges, calls, warrants, options or agreements obligating Mid-Cities and
Mid-Cities Bank to issue, sell or dispose of, or to purchase, redeem or
otherwise acquire any shares of their capital stock (collectively, "options and
rights") except options to purchase two hundred twenty-seven thousand (227,000)
shares of Common Stock of Mid-Cities (the "Stock Options"). None of the
Mid-Cities Common Stock and Mid-Cities Bank Common Stock has been issued or
disposed of in violation of any preemptive rights of any shareholder nor in
violation of any agreement
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to which Mid-Cities or Mid-Cities Bank was or is a party. Mid-Cities and
Mid-Cities Bank have no subsidiaries and do not own, nor have the right or
obligation to acquire, any shares of equity securities of any corporation except
(i) Mid-Cities Bank is a subsidiary of Mid-Cities and (ii) as set forth in
Exhibit 4.3.
4.4 NON-VIOLATION OF OTHER AGREEMENTS. The execution and delivery of this Merger
Agreement, and the compliance with its terms and provisions by Mid-Cities and
Mid-Cities Bank (including the execution and delivery of any document required
to be executed by Mid-Cities or Mid-Cities Bank) will not breach any material
agreement, lease, or obligation, whether similar or dissimilar, by which
Mid-Cities or Mid-Cities Bank is bound.
4.5 FINANCIAL STATEMENTS. Mid-Cities has delivered to BOKF, or will have
delivered to BOKF prior to the Closing as soon as future financial statements
are available, copies of the following ("Financial Statements"):
4.5.1 Consolidated Financial Statements (Audited) for Mid-Cities and
Subsidiaries, December 31, 1996, 1997, and 1998 (if available at the Closing);
4.5.2 Financial Statements (Unaudited) for Mid-Cities Bank, December 31, 1996,
1997, and 1998;
4.5.3 Financial Statements (Unaudited) for Mid-Cities and Subsidiaries, Xxxxx
00, 0000 (xx the Closing occurs after April 15, 1999) and after April 15,1999,
the most recent monthly financial statements as are available as of the Closing;
and,
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4.5.4 Financial Statements (Unaudited) for Mid-Cities Xxxx, Xxxxx 00, 0000 (xx
the Closing occurs after April 15, 1999) and after April 15,1999, the most
recent monthly financial statements as are available as of the Closing.
The Financial Statements described in Section 4.5.1 and 4.5.2, (A) have been
prepared or will have been prepared in accordance with generally accepted
regulatory accounting principles, consistently applied and (B) fairly reflect
the financial condition and results of operations for the indicated periods. The
Financial Statements described in Sections 4.5.3 and 4.5.4 fairly reflect the
financial condition and results of operations for the periods indicated, subject
to immaterial year-end adjustments and the omission of footnotes.
4.6 MATERIAL LIABILITIES. Neither Mid-Cities nor Mid-Cities Bank has any
material liabilities (including, but not limited to, whether similar or
dissimilar, liabilities or obligations for taxes, whether due or to become due)
except: 4.6.1 Those fully reflected or reserved against, or otherwise disclosed,
in the Financial Statements;
4.6.2Those incurred with due care since December 31, 1998 in the normal course
of business consistent with past practices; and,
4.6.3 Those specifically disclosed in Exhibit 4.6.3 to this Merger Agreement.
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4.7 CONDUCT OF BUSINESS PRIOR TO CLOSING. Except as set forth in Exhibit 4.7,
since December 31, 1998, and until the Closing of this transaction, (A) each of
Mid-Cities and Mid-Cities Bank has carried on and will carry on its business
only in the ordinary and normal course consistent with past practices and (B)
has not and will not, without the prior consent of BOKF:
4.7.1 Incur any material liabilities, commitments or obligations, contingent or
otherwise, or dispose of any of its assets, except in the ordinary course of its
business consistent with past practices and for the purpose of carrying on the
business as a going concern;
4.7.2 Incur any bank or other institutional debt, or enter into any agreement
for the borrowing of money; except borrowing of federal funds or borrowing from
the Federal Home Loan Bank by Mid-Cities Bank consistent with past practices;
4.7.3 Suffer any material adverse change in the financial conditions, assets,
liabilities, business or property of Mid-Cities taken as a whole or of
Mid-Cities Bank taken as a whole; and,
4.7.4 Make any material change in the manner in which business is conducted
(including, without limitation, branch relations, branch closings, and any
material change in products offered to customers).
4.8 TAX RETURNS/REPORTS. Each of Mid-Cities and Mid-Cities Bank has duly filed
all tax reports and returns required to be filed by it and has duly paid
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all taxes and other charges claimed to be due from it by federal, state and
local taxing authorities. No waivers of the statute of limitation have been
issued with respect to unaudited years. Mid-Cities and Mid-Cities Bank have no
knowledge of any facts which could reasonably be expected to result in a
material deficiency with respect to unaudited tax returns which would result in
a material adverse effect on Mid-Cities taken as a whole or Mid-Cities Bank
taken as a whole.
4.9 CONTRACTS AND COMMITMENTS.
4.9.1 A list of all contracts and commitments, other than credit and lending,
deposit or borrowing transactions entered into in the ordinary course of
business by Mid-Cities or Mid- Cities Bank which are material to the business,
operations or financial condition of Mid-Cities or Mid-Cities Bank as of this
date, is set forth on Exhibit 4.9. For the purpose of Exhibit 4.9, materiality
shall mean those contracts and commitments (including a series of related
contracts or commitments) for which payment or other consideration to be
furnished by any party is more than $25,000 a year or $100,000 over the
remaining life of the contract.
4.9.2 Except as set forth on Exhibit 4.9, each of Mid-Cities and Mid-Cities Bank
has in all material respects performed and is performing all contractual and
other obligations required to be performed by them.
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4.10 LITIGATION. Except as set forth in Exhibit 4.10, there is not pending, or,
to the knowledge and belief of Mid-Cities and Mid-Cities Bank threatened, any
claim, litigation, proceeding, order of any court or governmental agency, or
governmental investigation or inquiry to which Mid-Cities or Mid-Cities Bank is
a party or which involves their business operations, any of their property or
any property leased by them which, individually or in the aggregate:
4.10.1 May reasonably result in any material adverse change in the financial
condition, business, prospects, assets, properties or operations of Mid-Cities
taken as a whole or Mid-Cities Bank taken as a whole; or,
4.10.2 May reasonably involve the expenditure of more than a total of $25,000 in
legal fees or costs;
4.11 BROKERAGE FEES. Neither Mid-Cities nor Mid-Cities Bank has incurred or will
incur, directly or indirectly, any liability for brokerage, finder's, financial
advisor's or agent's fees or commissions by virtue of any commitment made by any
of them in connection with this Merger Agreement or any transaction contemplated
hereby except as described in Exhibit 4.11.
4.12 REQUIRED CORPORATE ACTION. The execution, delivery and consummation of this
Merger Agreement has been duly and validly authorized by the board of directors
of Mid-Cities and will at the time of Closing have been duly and validly
authorized by the board of directors of Mid-Cities Bank and the shareholders of
Mid-Cities and Mid-Cities Bank in accordance with the requirements of the
National Bank Act, the Texas Business Corporation Act and all other applicable
law.
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4.13 AUTHORIZED EXECUTION. This Merger Agreement has been duly executed and
delivered by duly authorized officers of Mid-Cities and Mid-Cities Bank. This
Merger Agreement constitutes the legal, valid and binding agreement and
obligation of Mid-Cities, and Mid-Cities Bank enforceable against them in
accordance with its terms, except as may be limited by applicable bankruptcy,
insolvency, moratorium, receivership, and other similar laws affecting the
rights of creditors generally.
4.14 TITLE TO ASSETS; ENCUMBRANCES. Mid-Cities and Mid-Cities Bank have good and
valid title (with respect to fee real estate, good and valid title shall mean
such title as may be insured on standard title insurance forms with no
exceptions materially and adversely affecting the value or use of the fee real
estate) to their assets, and in each case subject to no mortgage, pledge, lien,
security interest, conditional sale agreement, or other encumbrance of any
nature whether similar or dissimilar, except:
4.14.1 Such encumbrances which are purchase money security interests entered
into in the ordinary course of business consistent with past practice reflected
on their books and records;
4.14.2 Lessors' interests in leased tangible real and personal property
reflected on their books and records;
4.14.3 Such encumbrances for taxes and assessments not yet due and payable;
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4.14.4 Encumbrances as do not materially detract from the value or interfere
with the use or operation of the asset subject thereto; and,
4.14.5 Repossessed and foreclosed assets acquired in satisfaction of debt
previously contracted.
4.15 EMPLOYEES. Except as set forth on Exhibit 4.15, none of the employees of
Mid-Cities and Mid-Cities Bank is employed under any employment contract (oral
or written) or is the beneficiary of any compensation plan (oral or written) or
is entitled to any payment from Mid-Cities and Mid-Cities Bank by reason of this
Merger Agreement or the Merger and there are no employment contracts, management
contracts, consulting agreements, union contracts, labor agreements, pension
plans, profit sharing plans or employee benefit plans to which Mid-Cities or
Mid-Cities Bank are a party or by which either of them is bound. The Mid-Cities
401(k) Plan is in full compliance with all requirements of the Plan and with the
Employee Retirement Income Security Act and the regulations promulgated pursuant
thereto.
4.16 ENVIRONMENTAL LAWS. To the best knowledge of Mid-Cities and Mid-Cities
Bank, the existence, use and operation of the assets of Mid-Cities and
Mid-Cities Bank are in material compliance with all applicable statutes, rules
and regulations including, without limiting the generality of the foregoing, all
environmental and zoning laws and, except as set forth on Exhibit 4.16, the
Americans With Disabilities Act.
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4.17 SURVIVAL AND INDEPENDENCE OF REPRESENTATIONS AND WARRANTIES. The
representations and warranties of Mid-Cities and Mid-Cities Bank made in this
Merger Agreement shall survive the Closing hereof notwithstanding any
investigation or knowledge of BOKF or Park Cities; provided BOKF shall give
notice to Agent (as hereafter defined) of any claim of a breach of any such
representations and warranties on or before March 31, 2000 (the "Claim Notice
Deadline"); and, provided further, the sole remedy for a breach of such
representations and warranties shall be a claim against the Escrow Amount. Each
of the representations and warranties of Mid-Cities and Mid-Cities Bank set
forth in this Merger Agreement is a separate and independent representation and
warranty, shall be cumulative of and in addition to all other warranties and
representations, and shall not limit or be interpreted to be in derogation of
any other representation or warranty made herein. Any disclosure made on any
Exhibit hereto shall be applicable to the entire Agreement and not just one
representation or warranty.
5. REPRESENTATIONS AND WARRANTIES OF BOKF. BOKF and Park Cities represent and
warrant, jointly and severally, to Mid-Cities that:
5.1 INCORPORATION AND CORPORATE POWER. BOKF and Park Cities are corporations
duly organized, validly existing and in good standing under the laws of Oklahoma
and Texas, respectively. BOKF and Park Cities have all the corporate power and
authority necessary and required to consummate the transactions contemplated by
this Merger Agreement.
5.2 NON-VIOLATION OF OTHER AGREEMENTS. The execution and delivery of this Merger
Agreement, and compliance with its terms and provisions by BOKF
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and Park Cities and the execution of any document required to be executed by
BOKF or Park Cities, will not:
5.2.1 Violate, conflict with or result in the breach of their respective
certificates of incorporation or bylaws or any of the terms, conditions or
provisions of any agreement or instrument to which BOKF or Park Cities is a
party, or by which BOKF or Park Cities is bound;
5.2.2 Result in the creation or imposition of any lien, charge, encumbrance or
restriction of any nature whatever upon any of the property, contracts or
business of BOKF and Park Cities; or, 5.2.3 Require the consent of any party to
a contract with
BOKF and Park Cities in order to keep the contract enforceable.
5.3 REQUIRED CORPORATE ACTION. The execution, delivery, and consummation of this
Merger Agreement by BOKF and Park Cities has been duly and validly authorized by
the boards of directors of BOKF and Park Cities and, as of the Closing, will
have been approved by the shareholder of Park Cities. The approval of the
shareholders of BOKF is not required. This Merger Agreement has been duly
executed and delivered by duly authorized officers of BOKF and Park Cities. This
Merger Agreement constitutes a legal, valid and binding agreement and obligation
of BOKF and Park Cities enforceable against BOKF and Park Cities in accordance
with its terms, except as may be limited by applicable bankruptcy, insolvency,
moratorium, receivership, and other similar laws affecting the rights of
creditors generally.
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5.4 BROKERAGE FEES. Neither BOKF nor Park Cities has incurred or will incur,
directly or indirectly, any liability for brokerage, finder's, financial
advisor's or agent's fees or commissions by virtue of any commitment made by
BOKF or Park Cities in connection with this Merger Agreement or any transaction
contemplated hereby. Neither BOKF nor Park Cities has any knowledge that any
party has asserted any claim of such nature against BOKF or Park Cities.
5.5 SURVIVAL AND INDEPENDENCE OF REPRESENTATIONS AND WARRANTIES. The
representations and warranties of BOKF and Park Cities made in this Merger
Agreement shall not survive the Closing hereof; provided, however, the
indemnification obligations of Section 5.6 hereof shall survive the Closing
indefinitely. Each of the representations and warranties of BOKF and Park Cities
set forth in this Merger Agreement is a separate and independent representation
and warranty, shall be cumulative of and in addition to all other warranties and
representations; and shall not limit any other representation or warranty made
herein.
5.6 BOKF AND PARK CITIES INDEMNIFICATION. BOKF and Park Cities shall indemnify
the present and future directors, officers and employees of Mid-Cities and
Mid-Cities Bank (the "Indemnified Parties") to the fullest extent to which such
Indemnified Parties were entitled under the Articles of Incorporation and Bylaws
of Mid-Cities and/or the Articles of Association and Bylaws of Mid-Cities Bank.
BOKF shall cause Mid-Cities to purchase
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at the Closing "tail coverage" under the Mid-Cities existing Mid-Cities
directors and officers liability policy for such period of time as may be
purchased by a premium equal to the pre-paid premium for such policy remaining
on the consolidated books and records of Mid-Cities as of the Closing. In
addition, BOKF and Park Cities shall indemnify Xx. Xxxx X. Xxxxxxxx for all tax
liability that he may incur under Section 280G of the Internal Revenue Code of
1986, as amended (the "Code") as a result of payments received by him in
connection with the Merger and as a result of Stock Options issued to him by
Mid-Cities.
6. COVENANTS.
6.1 FULL ACCESS. In order that BOKF shall have the full opportunity to make such
investigations as it shall reasonably desire concerning Mid-Cities and
Mid-Cities Bank and their business affairs, Mid-Cities and Mid-Cities Bank
shall:
6.1.1 Give BOKF, its employees, counsel, accountants and other authorized
representatives, as necessary to conduct the investigation and whose names shall
have been provided to (and approved by) Mid-Cities, full access, upon reasonable
notice to Mid-Cities and at reasonable times without unduly interfering with the
conduct of business by Mid-Cities and Mid-Cities Bank throughout the period up
to the Closing, to all of the facilities, properties, books, contracts and
records of Mid-Cities and Mid-Cities Bank.
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6.1.2 Authorize its accountants to give BOKF full access to the accountant's
records, including work papers; and,
6.1.3 Furnish to BOKF during that period all additional financial, operating and
other information concerning Mid-Cities and Mid-Cities Bank and their business
affairs, as BOKF may reasonably request and which Mid-Cities and Mid-Cities Bank
shall have available.
6.1.4 All information provided pursuant to this Section 6.1 shall be subject to
the provisions of Section 6.7.
6.2 CONDUCT OF BUSINESS PRIOR TO THE CLOSING DATE. From this date until the
Closing Date, each of Mid-Cities and Mid-Cities Bank shall, except as may be
first approved in writing by BOKF or as is otherwise permitted or contemplated
in this Merger Agreement:
6.2.1 Maintain their corporate existence in good standing;
6.2.2 Maintain the general character of their business and conduct their
business in their ordinary and usual manner consistent with past practices;
6.2.3 Maintain proper business and accounting records generally in accordance
with past practices;
6.2.4 Maintain their properties (except repossessed and foreclosed assets
acquired in satisfaction of debts previously contracted) in normal repair and
condition, normal wear and tear and damage due to fire or other unavoidable
casualty excepted;
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6.2.5 Preserve their business organizations intact, use their reasonable efforts
to maintain satisfactory relationships with suppliers, customers and others
having business relations with them whose relationships they believe are
desirable to maintain, and use their reasonable efforts to procure the
willingness of all of the personnel employed by them immediately prior to the
execution of this Merger Agreement who are material to the success of their
business to continue in their employ on substantially the same terms and
conditions as those on which such personnel were employed immediately prior to
the execution of this Merger Agreement;
6.2.6 Maintain in full force and effect insurance comparable in amount and in
scope of coverage to that now maintained by them on the date hereof;
6.2.7 Except as otherwise disclosed in this Merger Agreement, perform all of
their obligations under all material contracts, leases and agreements relating
to or affecting their assets, properties and businesses; and,
6.2.8 Comply in all material respects with and perform all obligations and
duties imposed upon them by federal, state and local laws, and all rules,
regulations and orders imposed by federal, state or local governmental
authorities, except as may be contested by them in good faith by appropriate
proceedings.
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6.3 MID-CITIES AND MID-CITIES BANK PROHIBITED ACTIONS PRIOR TO THE CLOSING DATE.
From this date until the Closing Date, Mid-Cities and Mid-Cities Bank shall not
(except as otherwise permitted by this Merger Agreement or as requested or
approved by BOKF which approval shall be deemed given unless BOKF shall
specifically deny such approval in writing within five (5) business days after
receiving a request for approval from Mid-Cities or Mid-Cities Bank):
6.3.1 Incur any indebtedness for borrowed money or incur any noncurrent
indebtedness for the purchase price of any fixed or capital asset, or make any
extension of credit or any loans to, guarantee the obligations of, or make any
additional investments in, any other person, corporation or joint venture
(whether an existing customer or a new customer) except:
6.3.1.1 Extensions of credit, loans and guarantees (i) less than Five Hundred
Thousand Dollars ($500,000) per transaction or (ii) less than Two Hundred
Thousand Dollars ($200,000) with existing Mid-Cities customers having existing
credit of Five Hundred Thousand Dollars ($500,000) or more made by Mid-Cities
Bank in the usual and ordinary course of its banking business, consistent with
prior practices and policies;
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6.3.1.2 Legal investments by Mid-Cities Bank in the usual and ordinary course of
its banking business consistent with prior practices and policies.
6.3.1.3 Borrowings from the Federal Home Loan Bank, the Federal Reserve Bank,
deposit liabilities, and federal funds transactions by Mid-Cities Bank in the
ordinary course of business consistent with past practices.
6.3.2 Make any (a) material change, except in the ordinary and usual course of
business, in their assets (including, but not limited to, any change in the
composition of such assets so as to materially alter the proportion of cash) or
liabilities, (b) material commitment for any capital expenditures, excluding
expenditures for repairs and remodeling in the ordinary and usual course of
business, or (c) sale or other disposition of any material capital asset other
than for fair value in the ordinary course of business;
6.3.3 Make any change in their Articles of Incorporation or Association or
Bylaws;
- 21 -
6.3.4 Except for the Stock Options, authorize any shares of their capital stock
for issuance, issue any shares of any previously authorized but unissued capital
stock or grant, issue or make any option or commitment relating to their capital
stock;
6.3.5 Enter into any letter of intent or agreement to sell any of their material
assets, except in the normal and ordinary course of their business, or acquire,
be acquired by, or merge, consolidate or reorganize with any person, firm or
corporation;
6.3.6 Declare or pay any dividend, make any other distribution or payment or set
aside any amount for payment with respect to any shares of their capital stock
or directly or indirectly, redeem, purchase or otherwise acquire any shares of
their capital stock or make any commitment relating thereto, provided, however,
Mid-Cities Bank may pay a dividend in March 1999 in an amount sufficient to
enable Mid-Cities to reduce its long-term debt to a principal balance of
$165,000.
6.3.7 Except as set forth in Exhibit 6.3.7, make any (a) increase in the
compensation payable or to become payable to any of their directors, officers or
employees (including, without limitation, any bonus or incentive payment or
agreement), (b) make or enter into any written employment contract or
- 22 -
any bonus, stock option, profit sharing, pension, retirement or other similar
payment or arrangement, or (c) make any payment to any person, except in the
usual and ordinary course of business or except as required by an existing
agreement set forth in the Exhibits hereto;
6.3.8 Make any material change in their banking, safe deposit or power of
attorney arrangements;
6.3.9 Enter into any trust, escrow, agency and similar trust company agreements,
purchase orders and contracts for goods and services, except in the ordinary
course of business consistent with past practices;
6.3.10 Enter into any agreement resulting in the imposition of any mortgage or
pledge of their assets or the creation of any lien, charge or encumbrance on any
of their assets;
6.3.11 Incur any material obligation or liability, absolute or contingent,
except in the ordinary course of business or pursuant to existing contracts
described in this Merger Agreement;
6.3.12 Take any action which would prevent compliance with any of the conditions
of this Merger Agreement; or,
6.3.13 Pre-pay long term indebtedness; provided, however, Mid-Cities may pay
interest, and make a principal reduction, on its existing indebtedness in March
1999 in an aggregate amount that does not exceed Thirty Thousand Dollars
($30,000).
- 23 -
6.3.14 If the Closing of the transaction as contemplated by this Agreement shall
not have occurred by June 27, 1999, then Mid-Cities Bank may dividend such
amounts as are necessary to enable Mid-Cities to make such payments on its
long-term indebtedness as are required by the note and loan agreement with
respect thereto.
6.4 VOTE FOR MERGER AND WAIVER OF RIGHT TO DISSENT. Mid-Cities shall use its
best efforts to cause each of the shareholders of Mid-Cities set forth on
Exhibit 6.4 to enter into an Irrevocable Proxy and Voting Agreement whereby each
shareholder agrees to vote his shares of Mid-Cities Common Stock in favor of the
Merger, and use its best efforts to cause the Merger to be approved by the
directors and shareholders of Mid-Cities and Mid-Cities Bank in accordance with
applicable law and consummated in accordance with the terms of this Merger
Agreement.
6.5 REGULATORY APPROVAL. BOKF shall diligently file and pursue (A) all
regulatory applications required in order to consummate the Merger and the
merger of Mid-Cities Bank into Bank of Texas, National Association, including
but not limited to the necessary applications for prior approval of the Board of
Governors of the Federal Reserve System and the Office of the Comptroller of the
Currency on or before the thirtieth (30th) calendar day following the Agreement
Date and (B) thereafter promptly file any required supplements or amendments
thereto. All applications, supplements, and
- 24 -
amendments shall be substantially complete when filed. BOKF shall deliver to
Mid-Cities and its counsel a copy of all such filings, as filed, within three
(3) business days after the filing thereof. Although all such filings shall be
the responsibility of BOKF, BOKF shall nevertheless advise and consult with
Mid-Cities on an ongoing basis with respect to the filings and all matters and
events related thereto. BOKF shall inform and make available to Mid-Cities from
time to time all matters relating to the filings and the regulatory approvals.
BOKF shall diligently proceed with reasonable deliberate speed to obtain all
such approvals. If any regulatory application required to be filed by BOKF
should be finally denied or disapproved by the respective regulatory authority,
then BOKF shall immediately give notice to Mid-Cities and this Merger Agreement
shall thereupon terminate, subject to the provisions of Section 11. However, it
is understood that a request for additional information or undertaking by the
applicant, as a condition for approval, shall not be deemed to be a denial or
disapproval so long as the applicant can reasonably be expected to provide the
requested information or undertaking. In the event an application is denied
pending an appeal, petition for review, or similar such act on the part of the
applicant, then the application will be deemed denied unless the applicant
promptly and diligently prepares and files such appeal and continues the
appellate process for the purposes of getting the necessary approval.
6.6 CONFIDENTIALITY. Prior to the Closing, BOKF shall keep all information
disclosed to BOKF (its employees, counsel, accountants, and other authorized
representatives) by Mid-Cities or Mid-Cities Bank (or their
- 25 -
representatives) respecting the business and financial condition of Mid-Cities
and Mid-Cities Bank confidential and shall make no use of such information
except to conduct the investigation contemplated by Section 6.4, the application
contemplated by Section 6.5 and to consummate the transactions contemplated
hereby, and BOKF shall not use such information to obtain a competitive
advantage in connection with any customer of Mid-Cities Bank. In the event this
Merger Agreement is terminated for any reason BOKF (its agents,
officers, directors, employees and counsel) shall (i) return all copies of all
information and documents obtained from Mid-Cities, Mid-Cities Bank, and their
representatives, (ii) thereafter keep all such information confidential and not
make use of any such information to obtain a competitive advantage in connection
with any customer of Mid Cities Bank, and (iii) shall not solicit for
employment, whether directly or indirectly, any of the employees, officers or
directors of Mid-Cities or Mid-Cities Bank.
6.7 BOKF PROHIBITED ACTION PRIOR TO CLOSING. From this date until the Closing
Date, BOKF shall not take any action which would prevent compliance with any of
the conditions of this Merger Agreement. BOKF shall not, and shall cause its
subsidiaries not to, make or agree to make any acquisition, or take any other
action, that adversely affects its ability to consummate the transactions
contemplated by this Merger Agreement and will otherwise continue to conduct its
business operations and shall cause the operations of its subsidiaries to be
conducted in a manner consistent with past operating practices.
- 26 -
6.8 EMPLOYMENT AGREEMENTS. Mid-Cities and Mid-Cities Bank shall use their best
efforts to cause:
6.8.1 Xxxx X. Xxxxxxxx to enter into an employment agreement with Mid-Cities
Bank in the form and content of Exhibit 6.8.1 (the "Rowntree Agreement"); and
6.8.2 Xxxxx X. Xxxx to enter into an employment agreement with Mid-Cities Bank
in the form and content of Exhibit 6.8.2 (the "Pier Agreement").
6.9 MID-CITIES COVENANT TO OBTAIN APPROVALS. Mid-Cities shall promptly seek and
use commercially reasonable efforts to obtain the approval of this Merger
Agreement and the transactions contemplated hereby by the shareholders of
Mid-Cities. Mid-Cities Bank shall enter into an agreement to merge with Bank of
Texas, National Association, subject to the Closing of this Merger Agreement, in
form and content acceptable to BOKF.
6.10 COVENANTS RESPECTING EMPLOYMENT AND NON-COMPETITION AGREEMENTS. BOKF and
Mid-Cities shall use commercially reasonable efforts to cause all employment and
non-competition agreements which are a condition precedent to the obligations of
BOKF under this Merger Agreement to be executed and delivered by the parties
thereto.
6.11 EMPLOYMENT BENEFITS. Following the Closing, BOKF shall cause all employees
of Mid-Cities Bank to have the same benefits provided by BOKF generally to
employees of BOKF and its affiliates. Employees of Mid-Cities Bank shall be
credited for their actual and credited service with Mid-Cities Bank for purposes
of eligibility, vesting and beneficial accrual for all BOKF
- 27 -
employee benefit plans (including, without limitation, the BOKF 401(k) plan);
provided, however, such employees shall not be credited
with prior service in BOKF's defined benefit pension plan. Mid-Cities Bank
employees shall not be subject to any exclusions for pre-existing conditions
under BOKF's medical benefit plan and shall receive credit for any deductibles
or out-of-pocket expenses previously paid.
6.12 DELIVERY OF BOKF NOTES IN LIEU OF CASH. BOKF shall, at the Closing, deliver
to any person or entity so requesting which holds as of the record date (as
hereafter defined) ten thousand (10,000) shares of Mid-Cities Common Stock its
promissory note in usual and customary form acceptable to counsel for Mid-Cities
and counsel for BOKF (provided, in each instance, such acceptance is not
unreasonably withheld, delayed or denied) evidencing all, or such portion of the
Cash Consideration payable to such holder at the Closing as such person shall
determine, bearing interest at the Applicable Federal Rate (appropriate for the
term of the note as provided in the Internal Revenue Code) in such installments
and with such maturities, not exceeding five years from the date of Closing, as
such person or entity shall determine (collectively, the "Notes"); provided,
however, BOKF shall not issue a Note to any holder who does not (i) advise BOKF
in writing on or prior to the record date of the principal amount, installments,
and maturities such holder desires, (ii) all Notes shall be non-transferrable by
the holders thereof except by gift, devise, or operation of law; and (iii) BOKF
shall not issue any Note unless it shall have received an opinion of its counsel
that the issuance of such Note does not require registration under the
Securities Act of 1933, the securities law of all applicable jurisdictions, and
the Trust Indenture Act of 1940.
- 28 -
6.13 STOCK OPTIONS. Mid-Cities shall use its best efforts to cause all Stock
Options to be fully exercised in accordance with their existing terms and
conditions immediately prior to the Closing subject to consummation of the
Closing. With respect to any shares of Mid-Cities Common Stock that are acquired
at the Closing as a result of the exercise of the Stock Options, the purchase
price for such shares pursuant to the Stock Options shall be subtracted from or
"netted-out" of the Cash Consideration to be paid to the holders of such shares
of Mid-Cities Common Stock in order to provide for a cashless exercise of the
Stock Options. That is, upon the exercise of the Stock Options, the option
holder shall not be required to pay Mid-Cities the purchase price set forth in
the Stock Options, rather the purchase price shall be deducted from the amount
of cash which would otherwise be distributed to such option holder ("Cashless
Stock Option Exercise"). BOFK and Mid-Cities shall cooperate, and Mid-Cities
shall use its best efforts to cause the holders of the Stock Options to
cooperate, in determining the most efficient means of satisfying the withholding
obligations of Mid-Cities as a result of the Cashless Stock Option Exercise.
6.14 1998 AUDITED FINANCIAL STATEMENTS. Mid-Cities shall cause audited financial
statements for calendar year 1998 to be prepared at the time and in the same
manner as is consistent with the prior practices of Mid-Cities.
6.15 APPROVAL OF MERGER AGREEMENT BY THE BOARDS OF DIRECTORS OF BOKF AND PARK
CITIES. BOKF shall use its best efforts to obtain the approval
- 29 -
of this Merger Agreement by its Board of Directors at the meeting thereof on
February 23, 1999. Park Cities shall use its best efforts to obtain the approval
of this Merger Agreement by its Board of Directors at the meeting thereof on
February 24, 1999.
7. CONDITIONS PRECEDENT TO CLOSING BY BOKF AND PARK CITIES. The obligation of
BOKF and Park Cities to consummate and close this transaction is conditioned
upon each and all of the following:
7.1 The representations, warranties and covenants of Mid-Cities and Mid-Cities
Bank shall be materially true at the Closing as though such representations,
warranties and covenants were also made at the Closing.
7.2 The Federal Reserve Board shall have approved the Merger, or issued a waiver
of approval, in accordance with 12 U.S.C. Section 1842 and 12 C.F.R. Section
225. The Office of the Comptroller of the Currency shall have approved the
merger of Mid-Cities Bank into Bank of Texas, National Association in accordance
with 12 U.S.C. Section 215a and 12 C.F.R. Section 5.33, and such other
regulatory approval as may be required is obtained.
7.3 Mid-Cities and Mid-Cities Bank shall have performed and complied with, in
all material respects, all of their obligations under this Merger Agreement
which are to be performed or complied with by them prior to or on the Closing
Date.
7.4 Mid-Cities shall have delivered to BOKF an opinion of its counsel, dated the
Closing Date, in the form and content of the opinion attached hereto as Exhibit
7.4.
- 30 -
7.5 The shareholders of Mid-Cities shall have approved this Merger Agreement in
accordance with the Texas Business Corporation Act. Mid-Cities Bank shall have
entered into an agreement to merge with Bank of Texas, National Association,
subject to the Closing of this Merger Agreement, in form and content acceptable
to BOKF.
7.6 The Rowntree Agreement and the Pier Agreement shall have been executed and
delivered. Each of the directors of Mid-Cities and Mid-Cities Bank set forth on
Exhibit 7.6, which BOKF deems critical in BOKF's good faith judgment, shall,
prior to or at the Closing, have entered into a non-competition agreement in the
form of Exhibit 7.6.
7.7 Neither Mid-Cities taken as a whole nor Mid-Cities Bank taken as a whole
shall have suffered any Material Adverse Change (as hereinafter defined) in
their financial conditions, assets, liabilities, businesses or properties. For
purposes of this Section 7.7 "material adverse change" shall mean any event
resulting in a one-time charge to Mid-Cities Bank's loan loss reserve, or a
reduction of Mid-Cities Bank's Tier 1 capital, of Three Hundred Thousand Dollars
($300,000) or more before recording any entries associated with the Stock
Options or any Cashless Stock Option Exercises. Further, for the purposes of
this Section 7.7, an event or changes affecting the banking industry as a whole
in the Dallas-Ft. Worth Metropolitan Area shall not be considered a "material
adverse change" unless it affects Mid-Cities or Mid-Cities Bank to a greater
degree than other similar size bank holding companies or banks in the Tarrant
County, Texas area.
- 31 -
7.8 Holders of no more than five percent (5%) of the Mid-Cities Common Stock
shall have dissented under Section 5.11 and following of the Texas Business
Corporation Act.
In the event any one or more of these conditions shall not have been fulfilled
prior to or at the Closing, BOKF and Park Cities may terminate this Merger
Agreement by written notice to Mid-Cities, in which event neither party shall
have any further obligation or liability to the other except the obligations of
BOKF set forth in Section 6.7 and the obligations of Mid-Cities and Mid-Cities
Bank set forth in Section 4.11. BOKF shall be entitled to waive compliance with
any one or more of the conditions, representations, warranties or covenants in
whole or in part.
8. CONDITIONS PRECEDENT TO CLOSING BY MID-CITIES. The obligation of Mid-Cities
and Mid- Cities Bank to consummate and close this transaction are conditioned
upon each and all of the following:
8.1 The representations, warranties and covenants of BOKF and Park Cities made
in this Merger Agreement shall be true at the Closing as though such
representations, warranties and covenants were also made at the Closing.
8.2 BOKF and Park Cities shall have performed and complied, in all material
respects, with all of their obligations under this Merger Agreement which are to
be performed or complied with by them prior to or at the Closing.
8.3 BOKF shall have delivered to the Mid-Cities an opinion of its counsel,
Xxxxxxxx Xxxxxxx, Tulsa, Oklahoma, dated the Closing Date, in the form and
content of the opinion attached hereto as Exhibit 8.3.
- 32 -
8.4 The Federal Reserve Board shall have approved the Merger, or issued a waiver
of approval, in accordance with 12 U.S.C. Section 1842 and 12 C.F.R. Section
225.
8.5 The shareholders of Mid-Cities shall have approved this Merger Agreement and
the transactions contemplated hereby as required by the Texas Business
Corporations Act.
Mid-Cities shall be entitled to waive compliance with any one or more of the
conditions, representations, warranties or covenants in whole or in part. In the
event any one or more of these conditions shall not have been fulfilled prior to
or at the Closing, Mid-Cities may terminate this Merger Agreement by notice to
BOKF, in which event no party shall have any further obligation or liability to
the other, except the obligations of BOKF set forth in Section 6.7 and Section
11 and the obligations of Mid-Cities set forth in Section 12.
9. CLOSING. The Closing ("Closing" or "Closing Date") of the transactions
contemplated by this Merger Agreement shall take place not later than five (5)
business days following the first day on which (i) BOKF and Park Cities can
lawfully consummate the Merger under 12 U.S.C. Section 1842, 12 C.F.R. Section
225 and other applicable laws, rules and regulations and (ii) Bank of Texas,
National Association and Mid-Cities Bank can merge under 12 U.S.C. Section 215a,
and 12 C.F.R. Section 5.23 and other applicable laws, rules and regulations. In
any event, if the Closing Date does not occur on or before August 1, 1999, then
either BOKF or Mid-Cities may by notice to the other, terminate this Merger
Agreement, provided such notice is given on or before July 15, 1999. The Closing
shall be held at 10:00 a.m. on the Closing Date at the offices of Mid-Cities
Bank or at such other time and place as BOKF and Mid-Cities may agree. At the
Closing, BOKF, Park Cities, Mid-Cities, and Mid-Cities Bank shall execute and
deliver all of the documents and take all other actions which are contemplated
by the terms hereof.
- 33 -
9.1 Without limiting the generality of Section 9 of this Merger Agreement, the
following actions shall be taken at the Closing concurrently. Mid-Cities shall:
9.1.1 Use commercially reasonable efforts to cause to be delivered to Park
Cities certificates representing the Mid- Cities Common Stock;
9.1.2 Deliver the opinion of Mid-Cities's counsel pursuant to Section 7.4; and,
9.1.3 Except as otherwise set forth on Exhibit 9.1.3, cause the employment
agreements, plans and payments described in Exhibit 4.15 to be terminated and
discharged at no cost to Mid-Cities and Mid-Cities Bank.
9.2 Without limiting the generality of Section 9 of this Merger Agreement, the
following actions shall be taken at the Closing concurrently. BOKF shall:
9.2.1 Pay, by corporate check, to each of the holders of Mid- Cities Common
Stock of record on the third business day preceding the Closing (the "Record
Date") the amounts to which such holders are entitled pursuant to Section 2.7.1
or deliver Notes in lieu thereof as provided in Section 6.12; shareholders
owning more than 25,000 shares of Mid-Cities Common Stock shall be entitled to
receive payment by wire transfer; provided, however, BOKF shall not be required
to make more than seven (7) wire transfers.
- 34 -
9.2.2 Deliver the opinion of BOKF's counsel pursuant to Section 8.3.
9.2.3 Cause appropriate evidences of the Merger to be filed in accordance with
applicable law.
10. THE ESCROW. The Escrow shall be established on the following terms and
conditions:
10.1 The escrow agent shall be Bank of Texas Trust Company, National Association
("Escrow Agent").
10.2 The Escrow shall be governed by the standard form of escrow agreement
generally in use by the Escrow Agent (the "Escrow Agreement") a copy of which is
set forth as Exhibit 10.2.
10.3 BOKF shall deliver the Escrow Amount to the Escrow Agent at the Closing.
The Escrow Agent shall invest the Escrow Amount in three month certificates of
deposit issued by Bank of Texas, National Association ("BOT") on the terms and
conditions being offered by BOT to the public at the time of such investment and
shall thereafter renew such certificates of deposit upon maturity as to the
total amount remaining in the Escrow after payment of any Allowed Claim (for
like periods and on the terms and conditions being offered by BOT to the public
at the time of such renewal). Interest on the certificates shall be added to the
Escrow and deemed part of the Escrow Amount.
10.4 In the event BOKF claims a breach of the representations and warranties of
Mid-Cities and Mid-Cities Bank arising under this Merger Agreement,
- 35 -
BOKF shall give notice of the claim (a "Claim") to Xxxxxxx X. Xxxx (the
"Agent"). The notice shall identify the representations and warranties which
BOKF claims have been breached and describe in reasonable detail the basis of
the Claim.
10.5 In the event BOKF makes a Claim(s) prior to the Claim Notice Deadline, the
Escrow Agent shall continue to hold the Escrow Amount until such Claim(s) is
resolved by (i) the mutual agreement of Agent and BOKF or (ii) a final
adjudication determining the merits of the Claim(s), at which time the Escrow
shall terminate and the Escrow Agent shall pay (a "Claim Payment") the Claim as
mutually agreed or finally adjudicated (an "Allowed Claim").
10.6 The Escrow shall terminate at the later of the Claim Notice Deadline or the
date on which all timely noticed Claims have been resolved by mutual agreement
or final adjudication and all Allowed Claims, if any, shall have been paid to
BOKF.
10.7 Upon termination of the Escrow, the Escrow Amount remaining in the Escrow
shall be delivered to the holders of Mid-Cities Common Stock on the Record Date
in accordance with their respective interests, including any Cashless Stock
Option Exercises.
10.8 The rights of the holders of Mid-Cities Common Stock to receive payments
from the Escrow shall not be assignable or transferable except by operation of
law or by intestacy or with the approval of BOKF (which approval shall not be
unreasonably withheld, delayed, or denied) and will not be evidenced by any
certificate or other evidence of ownership.
- 36 -
10.9 BOKF shall pay the fees and costs of the Escrow Agent with respect to the
Escrow.
10.10 The Agent shall be Xxxxxxx X. Xxxx. The holders of Mid-Cities Common Stock
on the Record Date may by the vote of a majority in interest and upon notice to
BOKF change the agent. The Agent shall not be deemed a fiduciary of the holders
of Mid-Cities Common Stock and shall be liable to such holders only for gross
negligence or intentional wrongdoing. 11. MISCELLANEOUS PROVISIONS. The
following miscellaneous provisions shall apply to this Agreement:
11.1 All notices or advices required or permitted to be given by or pursuant to
this Agreement, shall be given in writing. All such notices and advices shall be
(i) delivered personally, (ii) delivered by facsimile or delivered by U.S.
Registered or Certified Mail, Return Receipt Requested mail, or (iii) delivered
for overnight delivery by a nationally recognized overnight courier service.
Such notices and advices shall be deemed to have been given (i) the first
business day following the date of delivery if delivered personally or by
facsimile, (ii) on the third business day following the date of mailing if
mailed by U.S. Registered or Certified Mail, Return Receipt Requested, or (iii)
on the date of receipt if delivered for overnight delivery by a nationally
recognized overnight courier service. All such notices and advices and all other
communications related to this Agreement shall be given as follows:
- 37 -
BOKF and Park Cities:
Xxxxx X. Xxxxx, Executive Vice President
BOK FINANCIAL CORPORATION X.X. Xxx 0000 Xxxxx, XX 00000 (918) 588-6853 -
Facsimile
and
Xxxxxxxx Xxxxxxx, Secretary and General Counsel to BOK Financial Corporation Old
City Hall 000 Xxxx Xxxxxx Xxxxxx Xxxxx, XX 00000 (918) 583-8251 - Facsimile
Mid-Cities, and Mid-Cities Bank:
Xxxx X. Xxxxxxxx Chairman of the Board and President Mid-Cities National Bank
000 Xxxxxxxxx Xxxxxxx X.X. Xxx 0000 Xxxxx, Xxxxx 00000 000-000-0000 - Telephone
000-000-0000 - Facsimile
and
Xxxxxxx X. Xxxxx Xxxxxxxxx & Xxxxxxxxx, L.L.P. 000 Xxxxx Xxxxx Xxxxxx, Xxxxx
0000 Xxxxxx, Xxxxx 00000-0000 000-000-0000 - Telephone 000-000-0000 - Facsimile
or to such other address as the party may have furnished to the other parties in
accordance herewith, except that notice of change of addresses shall be
effective only upon receipt.
11.2 This Agreement shall be subject to, and interpreted by and in accordance
with, the laws (excluding conflict of law provisions) of the State of Texas.
- 38 -
11.3 This Agreement is the entire Agreement of the parties respecting the
subject matter hereof. There are no other agreements, representations or
warranties, whether oral or written, respecting the subject matter hereof.
11.4 No course of prior dealings involving any of the parties hereto and no
usage of trade shall be relevant or advisable to interpret, supplement, explain
or vary any of the terms of this Agreement, except as expressly provided herein.
11.5 This Agreement, and all the provisions of this Agreement, shall be deemed
drafted by all of the parties hereto.
11.6 This Agreement shall not be interpreted strictly for or against any party,
but solely in accordance with the fair meaning of the provisions hereof to
effectuate the purposes and interest of this Agreement.
11.7 Each party hereto has entered into this Agreement based solely upon the
agreements, representations and warranties expressly set forth herein and upon
his own knowledge and investigation. Neither party has relied upon any
representation or warranty of any other party hereto except any such
representations or warranties as are expressly set forth herein.
11.8 Each of the persons signing below on behalf of a party hereto represents
and warrants that he or she has full requisite power and authority to execute
and deliver this Agreement on behalf of the parties for whom he or she is
signing and to bind such party to the terms and conditions of this Agreement.
11.9 This Agreement may be executed in counterparts, each of which shall be
deemed an original. This Agreement shall become effective only when all
- 39 -
of the parties hereto shall have executed the original or counterpart hereof.
This agreement may be executed and delivered by a facsimile transmission of a
counterpart signature page hereof.
11.10 In any action brought by a party hereto to enforce the obligations of any
other party hereto, the prevailing party shall be entitled to collect from the
opposing party to such action such party's reasonable litigation costs and
attorneys fees and expenses (including court costs, reasonable fees of
accountants and experts, and other expenses incidental to the litigation).
11.11 This Agreement shall be binding upon and shall inure to the benefit of the
parties and their respective successors and assigns.
11.12 This is not a third party beneficiary contract except as otherwise
expressly stated herein. No person or entity other than a party signing this
Agreement shall have any rights under this Agreement except as otherwise
expressly stated herein.
11.13 This Agreement may be amended or modified only in a writing which
specifically references this Agreement.
11.14 This Agreement may not be assigned by any party hereto.
11.15 A party to this Agreement may decide or fail to require full or timely
performance of any obligation arising under this Agreement. The decision or
failure of a party hereto to require full or timely performance of any
obligation arising under this Agreement (whether on a single occasion or on
multiple occasions) shall not be deemed a waiver of any such obligation. No such
decisions or failures shall give rise to any claim of estoppel, laches,
- 40 -
course of dealing, amendment of this Agreement by course of dealing, or other
defense of any nature to any obligation arising hereunder.
11.16 The repudiation, breach, or failure to perform any obligation arising
under this Agreement by a party after reasonable notice thereof shall be deemed
a repudiation, breach, and failure to perform all of such party's obligations
arising under this Agreement.
11.17 Time is of the essence with respect to each obligation arising under this
Agreement. The failure to timely perform an obligation arising hereunder shall
be deemed a failure to perform the obligation.
11.18 All actions taken and documents delivered at the Closing shall be deemed
to have been taken and executed simultaneously and no action shall be deemed
taken nor any document delivered until all have been taken and delivered.
11.19 Any information delivered by way of exhibit or schedule in connection with
this agreement shall be deemed delivered for the purpose of any other exhibit or
schedule which calls for such information.
Dated and effective the date first set forth above.
MID-CITIES BANCSHARES, INC., a Texas Corporation
By /s/ Xxxxxxx X. Xxxx
-------------------------------------
Xxxxxxx X. Xxxx, President
MID-CITIES NATIONAL BANK, a national banking association
By /s/ Xxxxxxx X. Xxxx
-------------------------------------
Xxxxxxx X. Xxxx, Vice Chairman
- 41 -
BOK FINANCIAL CORPORATION
By /s/ Xxxxxxx X. Xxxxxxxx
-------------------------------------
PARK CITIES BANCSHARES, INC., a Texas Corporation
By /s/ C. Xxxx Xxxx, Jr.
-------------------------------------
- 42 -
EXHIBIT 4.3
TO
MERGER AGREEMENT
Subsidiaries
None
- 43 -
EXHIBIT 4.6.3
TO
MERGER AGREEMENT
Material Liabilities
None
- 44 -
EXHIBIT 4.7
TO
MERGER AGREEMENT
Conduct of Business Prior to Closing Exceptions
None
- 45 -
EXHIBIT 4.9
to
MERGER AGREEMENT
Section 4.9.1
None, except, the following:
Space Lease
Mid Cities Bank leases 13,162 square feet of office space in the Mid-Cities Bank
Building located at 000 Xxxxxxxxx Xxx., Xxxxx, Xxxxx. The terms of the operating
lease are:
Lease Expiration Date
March 31, 2001
Annual Base Rent
$ 299,435
Escalation Billed for 1998
74,659
Total Lease Billed for 1998
$ 374,094
The Base Rent remains the same until the lease expiration date of Mach 31, 2001.
Escalation increases are based on Mid Cities Bank's share of the annual expenses
incurred by the building.
Data Processing Services
Mid Cities Bank has a contract with Fiserv - Houston for data processing and
item processing services. The product that the Bank uses is Fiserv's
CustomerFile system. The contract expires on September 15, 2001. A copy of the
data processing contract, as amended, has been provided to BOKF.
FiSi Madison Club Account Services
Mid Cities Bank has contracted with FiSi Madison to provide Club deposit account
services for all Premier and Premier Plus account customers. Mid-Cities Bank has
provided a copy of the agreement with FiSi Madison to BOKF. The Agreement may be
canceled at any time by giving a 120 day notice of termination.
Check Printing - Deluxe
Mid Cities Bank has contracted with Deluxe, Inc. to provide check printing
services to the Bank. Mid Cities Bank has provided BOKF with a copy of the
agreement.
Section 4.9.2 None; except the following:
Mid-Cities Bank has requested additional information concerning the Escalation
billed for 1998 by the landlord. Mid-Cities has notified the landlord that the
Bank will continue to pay at the original escalation rate established for 1998
until the landlord provides adequate evidence of costs related to the operation
of the building and the computation of Mid-Cities Bank's share of such costs.
Mid-Cities Bank has accrued a payable in the amount billed by the landlord for
the increased escalation of 1998.
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EXHIBIT 4.10
TO
MERGER AGREEMENT
Pending Litigation
None, except Mid-Cities Bank is party to the following matter:
Cause no. 000-000000-00, Xxxxxxxx Chrysler Plymouth, Inc. dba Xxxxx Xxxxxxxx
Chrysler Plymouth Dodge v. Andy Xxx Xxxxxxx, C&D Automotive Service, Xxxxx
Xxxxxxx Xxxxx, Xxxx Calady, and Mid-Cities National Bank.
This is an action brought by the Plaintiff asserting an interest in inventory
which was owned by C&D Automotive Services and which is currently in the
possession of Mid-Cities National Bank. Plaintiff's Original Petition does not
allege any specific dollar amount, but merely alleges damages in excess of the
minimum jurisdictional limits of the Court.
C&D Automotive furnished to the Plaintiff through Xxxx Xxxxxxx various model
cars to be sold by the Plaintiff at its dealership and at Auto Races. Xx.
Xxxxxxx was an employee of the Plaintiff and Xx. Xxxxxxx, it is alleged, forged
the signature on some checks paid to C&D Automotive. Mid-Cities Bank is
asserting a lien on the inventory of C&D Automotive. This litigation arose when
the Plaintiff stopped payment on a $72,000.00 check which had been deposited by
C&D Automotive into its account with Mid-Cities National Bank thereby causing
C&D's account to be overdrawn in the approximate sum of $52,000. As of the date
hereof, all parties are represented by attorneys and the attorneys are working
toward an agreement to sell the inventory with the proceeds to be placed in
escrow.
Mid-Cities Bank has recorded a reserve of $30,000 related to this matter.
Further, Mid-Cities Bank has a legal reserve of $5,000 for attorney's fees
related to this matter.
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EXHIBIT 4.11
TO
MERGER AGREEMENT
Brokerage Fees
None; except, a fee due SAMCO Capital Markets equal to the sum of (i) five
percent (5%) of the first One Million Dollars ($1,000,000) of the Cash
Consideration, (ii) four percent (4%) of the second One Million Dollars
($1,000,000) of the Cash Consideration, (iii) three percent (3%) of the third
One Million Dollars ($1,000,000) of the Cash Consideration, (iv) two percent
(2%) of the fourth One Million Dollars ($1,000,000) of the Cash Consideration,
and (v) one percent (1%) of all of the Cash Consideration in excess of Four
Million Dollars ($4,000,000).
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EXHIBIT 4.15
TO
MERGER AGREEMENT
Employee Contracts and Benefit Plans
Auto Allowances
Mid-Cities Pays Xxxxx Xxxxxxxxxxxx $500 per month as an auto allowance
Mid-Cities reimburses Xxxxx Xxxxx his direct auto expenses for gas and repairs
Mid-Cities Bank has committed to pay the following incentives:
M. Xxxxx Xxxxxxxxxxxx - 10% of real estate loan interim commitment fees charged
on loans made by him. Such amount is accrued through the year and paid in
January of the following year.
All loan officers (other than Xxxx Xxxxxxxx and Xxxxx Xxxx) are eligible to
receive 5% of credit life premiums collected on loans that he or she makes.
Mid-Cities Bank has an incentive program titled the "Bone Loan." Loan officers
(other than Xxxx Xxxxxxxx and Xxxxx Xxxx) that make a qualified "Bone Loan" are
paid .25% of the principal amount of such loan. Payments are made at the end of
the year.
Mid-Cities Bank has the following employee benefits plans:
Health/Dental/Life Insurance
Mid-Cities Bank has arranged for health insurance for eligible employees through
Aetna and for dental and life insurance through Guarantee Life. The insurance
rate commitment is through April 1, 1999. The Bank has not renewed or extended
these policies as of the date hereof. Information related to health, dental and
life insurance has been provided to BOKF.
Other Benefits
Other employee benefits, such as sick and vacation time, are described in the
Employee Handbook that has been provided to BOKF.
401(k) Plan
Mid-Cities Bank has a 401(k) plan that does allow for additional employer
discretionary contribution; Mid-Cities has made contribution match of up to 7%
of an eligible employee's salary in 1996, 1997 and 1998. Mid-Cities anticipates
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making a similar contribution before Closing of the Merger. Mid-Cities Bank has
not made and does not anticipate making any additional discretionary
(non-matching) contributions to the Plan.
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EXHIBIT 4.16
TO
MERGER AGREEMENT
ADA Exceptions
Mid-Cities Bank leases space from the Mid-Cities Bank Building. This Building
was built in 1981, prior to the enactment of the Americans with Disabilities
Act. Since that date, the Bank and/or Building have not completed remodeling of
the sort that would require the Bank or the Building to come into compliance
with the ADA's requirements. Mid-Cities Bank has not discussed with the landlord
as to whether the entrances, elevators and guest baths comply with ADA.
Mid-Cities Bank has not reviewed compliance with ADA that might be required
should the Bank remodel the Drive-thru facility. The lease between the Bank and
the Building was prepared before the ADA was enacted and, therefore, is silent
with respect to which party is responsible for the cost of ADA compliance. The
Bank anticipates that the landlord will expect the Bank to share in the cost of
any ADA compliance.
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EXHIBIT 6.3.7
TO
MERGER AGREEMENT
Compensation Exceptions
Mid-Cities Bank has paid 1998 bonuses and had implemented 1999 salary increases.
Mid-Cities Bank has provided BOKF with a listing of 1998 bonus payments and
concurrent 1999 salaries in place.
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EXHIBIT 6.4
TO
MERGER AGREEMENT
Principal Shareholders
The following persons comprise the Board of Directors of Mid-Cities and
Mid-Cities Bank:
Name Shares
Xxxx X. Xxxxxxxx 267,922
Xxxxxxx X. Xxxx 96,925
Xxxxx X. Xxxx 62,096
Xxxx Xxxxxx 54,492
Dr. L.L. Golden 31,384
Xxxxxxx X. Xxxxxx 25,384
Xxxx Xxxxxx 10,000
Xx. X.X. Xxxxx 6,000
Xxxxxxx Xxxxxxx 3,129
Xxxx Xxxx 1,000
Xxxxx Xxxxxx 1,000
Total owned by Directors 559,332
Total Shares Currently Outstanding 764,421
Percentage of Total 73.2%
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EXHIBIT 6.8
TO
MERGER AGREEMENT
Employment Agreements
Rowntree Agreement Attached Hereto
Pier Agreement Attached Hereto
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EXHIBIT 7.4
TO
MERGER AGREEMENT
Mid-Cities Counsel's Opinion
[To be prepared by the mutual agreement of counsel to BOKF and counsel to
Mid-Cities]
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EXHIBIT 7.6
TO
MERGER AGREEMENT
Non-Competition Agreement
Rowntree Agreement attached as prior Exhibit.
Pier Agreement attached as prior Exhibit.
Directors to provide a non-compete agreement:
Xxxx X. Xxxxxxxx in the form included in the Rowntree Employment Agreement
Xxxxxxx X. Xxxx in the form attached
Xxxxx X. Xxxx in the form attached
Xxxx Xxxxxx in the form attached
Directors that Rowntree, Hall and Pier will use best efforts to cause such
directors to sign a non-compete agreement in the form attached:
Dr. L.L. Golden
Xxxxxxx X. Xxxxxx
Xxxx Xxxxxx
Xx. X.X. Xxxxx
Xxxxxxx Xxxxxxx
Xxxx Xxxx
Xxxxx Xxxxxx
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EXHIBIT 7.6
TO
MERGER AGREEMENT
AGREEMENT NOT TO COMPETE
This Agreement Not to Compete ("Agreement") is made effective as of
_____________, 199___ (the "Effective Date") between:
(i) _____________________ ("Principal"); and,
(ii) BOK Financial Corporation ("BOKF").
In consideration of the mutual covenants contained herein, the adequacy of which
is hereby expressly acknowledged, and intending to be legally bound hereby,
Principal and BOKF agree as follows:
(1) PURPOSE OF THIS AGREEMENT NOT TO COMPETE. Principal is a key officer or
director and shareholder of Mid-Cities and/or Mid-Cities Bank. The shareholders
of Mid-Cities and Mid-Cities Bank and BOKF are contemporaneously herewith
entering into that certain Merger Agreement dated effective as of February, 1999
to which reference is hereby made (the "Merger Agreement"). The Merger Agreement
constitutes the sale of the goodwill of the business of Mid-Cities and
Mid-Cities Bank to BOKF. Principal acknowledges that competition by Principal
with BOKF would damage the goodwill being sold by Principal. The purpose of this
agreement is to set forth the terms and conditions on which Principal agrees not
to compete with BOKF. The defined terms set forth herein shall have the meanings
set forth in the Merger Agreement.
(2) Principal hereby agrees that, from and after the Closing for one year
following the Closing, Principal shall not directly or indirectly (whether as an
officer, director, employee, partner, stockholder, creditor or agent or
representative of other persons or entities or in any other manner) engage in
the banking business in Dallas or Tarrant Counties.
(3) Paragraph 2 hereof shall not apply to any investment by the Principal in any
widely-held class of securities of any banking business, which investment
comprises less than 5% of the total number of shares of that class of securities
outstanding.
(4) Principal agrees that:
(1) This Agreement is entered into in connection with the sale of the goodwill
of Mid-Cities and Mid-Cities Bank.
(2) The restrictions imposed by this Agreement (particularly the geographical
and time restrictions) are fair, reasonable and necessary
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to protect the goodwill of Mid-Cities and Mid-Cities Bank which is being sold to
BOKF.
(3) Any remedy at law for any breach of this Agreement would be inadequate and,
in the event of any such breach, BOKF shall be entitled to immediate and
permanent injunctive relief to preclude any such breach (in addition to any
remedies at law to which BOKF may be entitled) without any necessity of
establishing irreparable injury or posting bond or security therefore.
(4) Without limiting the generality of the obligations imposed by Paragraph 2
hereof, Principal agrees that the Principal shall not solicit
persons or entities who are customers or clients of Mid-Cities and Mid-Cities
Bank at the date hereof or solicit employees of Mid-Cities or Mid-Cities Bank to
seek employment with any person or entity except BOKF and its subsidiaries,
whether, in either case, such solicitation is made within or without the area
described in Paragraph 2 hereof.
(5) Principal represents that Principal is entering into this Agreement in order
to induce BOKF to enter into and consummate the Merger Agreement and
acknowledges that the consideration received in the Merger is full and adequate
consideration for the promises of Principal made herein.
(5) MISCELLANEOUS. The following miscellaneous provisions shall apply to this
Agreement:
(1) This Agreement shall be subject to, and interpreted by and in accordance
with, the laws of the State of Texas (excluding the conflicts of law provisions
thereof).
(2) This Agreement is the entire agreement of the parties respecting the subject
matter hereof. There are no other agreements, whether oral or written,
respecting the subject matter hereof.
(3) This Agreement may be executed in counterparts, each of which shall be
deemed an original. This Agreement shall become effective only when all of the
parties hereto shall have executed the original or a counterpart hereof. This
Agreement may be delivered by facsimile transmission of an executed original or
counterpart hereof.
(4) In any action brought by a party hereto to enforce the obligations of any
other party hereto, the prevailing party shall be entitled to collect from the
opposing parties to such action such party's reasonable attorneys fees and costs
(including court costs, reasonable fees of accountants and experts, and other
expenses incidental to the action).
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(5) This is not a third party beneficiary contract. No person or entity other
than an express party hereto shall have any rights hereunder.
(6) This Agreement shall be binding upon the parties and their respective
successors and assigns. The rights of the parties under this Agreement may not
be assigned without the prior written consent of the parties hereto.
By ---------------------------------
BOK FINANCIAL CORPORATION
By --------------------------------
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EXHIBIT 8.3
TO
MERGER AGREEMENT
BOKF Counsel's Opinion
[To be prepared by the mutual agreement of counsel to BOKF and counsel to
Mid-Cities]
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EXHIBIT 9.1.3
TO
MERGER AGREEMENT
EMPLOYMENT AGREEMENT EXCEPTIONS
None
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