EXHIBIT 10(k)
AGREEMENT AND PLAN OF REORGANIZATION
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This Agreement and Plan of Reorganization (the "Agreement") dated as of the 14
day of May, 1998, is made by and among GOLD BANC CORPORATION, INC., a Kansas
corporation ("Gold"), GOLD BANC ACQUISITION CORPORATION VI, INC., a Kansas
corporation ("Sub") and NORTHWEST BANCSHARES, INC., a Kansas corporation
("Company").
WITNESSETH:
WHEREAS, the Boards of Directors of Gold, Sub and Company have approved and
deem it advisable and in the best interests of their respective companies and
shareholders that Gold and Company become affiliated through the merger of
Company with and into Sub in the manner hereinafter set forth (the "Merger");
and
WHEREAS, the parties desire to make certain representations, warranties and
agreements in connection with the Merger and also to prescribe certain
conditions to the Merger.
NOW, THEREFORE, in consideration of the premises and the mutual covenants and
agreements herein contained, the parties hereby agree as follows:
ARTICLE I
THE COMPANY MERGER
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1.1 The Company Merger. Upon the terms and subject to the conditions of this
Agreement at the Effective Time (as hereinafter defined), Company shall be
merged with and into Sub and the separate existence and corporate organization
of Company shall thereupon cease and Sub and Company shall thereupon be a single
corporation. Sub shall be the surviving corporation in the Merger and the
separate corporate existence of Sub shall continue unaffected and unimpaired by
the Merger.
1.2 Effective Time of the Company Merger. On the Closing Date (as
hereinafter defined), the proper officers of Company and Sub shall execute and
acknowledge appropriate certificates of merger that shall be filed with the
Kansas Secretary of State on the first business day following the Closing Date,
all in accordance with the Kansas General Corporation Code (the "KGCC"). The
Merger shall become effective on the Closing Date (the "Effective Time"). The
closing shall be on a day (the "Closing Date") within forty-five (45) days
following the satisfaction or waiver, to the extent permitted hereunder, of the
conditions to the consummation of the Merger specified in Articles VII and
VIII of this Agreement at 10:00 a.m. at Gold Banc Corporation, 00000 Xxxx
Xxxxxx, Xxxxxxx, Xxxxxx, which day shall be specified by notice from Gold to
Company (such notice to be at least five (5) days in advance of such Closing
Date).
1.3 The Articles of Incorporation. The Articles of Incorporation and By-Laws
of Sub as in effect immediately prior to the Effective Time shall be and remain
the Articles of Incorporation and By-Laws of the surviving corporation from and
after the Effective Time until amended as provided by law and the officers and
directors of Sub shall continue as the officers and directors of the surviving
corporation from and after the Effective Time.
1.4 Effect of Company Merger. Subject to Kansas law, at the Effective Time
(a) Sub shall possess all assets and property of every description, and every
interest therein, wherever located, and the rights, privileges, immunities,
powers, franchises, and authority, of a public as well as of a private nature,
of Company and all obligations belonging to or due each of Company and Sub shall
be vested in Sub without further act or deed; (b) title to any real estate or
any interest therein vested in Company shall not revert or in any way be
impaired by reason of the Merger; (c) all rights of creditors and all liens on
any property of the Company shall be preserved unimpaired; and (d) Sub shall be
liable for all the obligations of Company, and any claim existing, or action or
proceeding pending, by or against either of Company or Sub, may be prosecuted to
judgment with the right of appeal, as if the Merger had not taken place.
1.5 Further Assurances. If at any time after the Effective Time, Sub shall
consider it advisable that any further conveyances, agreements, documents,
instruments or assurances of law or any other actions or things are necessary or
desirable to vest, perfect, confirm, or record in Sub the title to any property,
rights, privileges, powers, or franchises of the Company, the Board of Directors
and officers of Sub shall, and will be authorized to, execute and deliver in the
name and on behalf of Sub or otherwise, any and all proper conveyances,
agreements, documents, instruments, and assurances of law and do all things
necessary or proper to vest, perfect, or confirm title to such property, rights,
privileges, powers and franchises in Sub, and otherwise to carry out the
provisions of this Agreement.
ARTICLE II
PROVISIONS OF MERGER TRANSACTION
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2.1 Effect of Merger on Sub Stock. Each share of common stock, $1.00 par
value per share, of Sub ("Sub Common Stock") issued and outstanding immediately
prior to the Effective Time shall remain issued and outstanding at the Effective
Time, and shall be unaffected by the Company Merger.
2.2 Conversion of the Company Shares in the Company Merger. At the Effective
Time, by virtue of the Merger and without any action on the part of any holder
thereof:
(a) Each outstanding share of common stock, $10.00 par value per share of the
Company, including any and all shares which are held in the treasury of the
Company or held by the Company or any subsidiary of the Company other than as
trustee, fiduciary, nominee or some similar capacity ("Company Common Stock")
shall be canceled and retired and shall cease to exist from and
after the Effective Time, and Gold Common Stock will be delivered in exchange
therefor as set forth in Section 2.2(b) hereinafter. The parties acknowledge
that the Company has also authorized preferred stock, but no shares of preferred
stock are issued and outstanding nor shall any such shares of preferred stock be
issued and outstanding at the Effective Time.
(b) Each outstanding share of Company Common Stock shall be converted into 28
shares of Gold Common Stock such that a total of 210,000 shares of Gold
Common Stock shall be issued in exchange for the 7,500 shares of Company
Common Stock issued and outstanding. The formula set forth in this Section
2.2(b) is effective after the effective date of the 100% stock dividend
referenced in Section 3.6 hereinafter.
2.3 Exchange of Certificates.
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(a) Gold, on behalf of Sub, shall make available to Exchange National Bank,
which is hereby designated as exchange agent (the "Exchange Agent"), at and
after the Effective Time, such number of shares of Gold Common Stock as shall be
issuable to the holders of Company Common Stock in accordance with Section 2.2
hereof. As soon as practicable after the Closing Date, Gold on behalf of the
Exchange Agent shall mail to each holder of record of a certificate that
immediately prior to the Closing Date represented outstanding shares of Company
Common Stock (i) a form letter of transmittal and (ii) instructions for
effecting the surrender of certificates of Company Common Stock for exchange
into cash and certificates of Gold Common Stock.
(b) Notwithstanding any other provision herein, no fractional shares of Gold
Common Stock and no certificates or script therefor or other evidence of
ownership thereof will be issued. All fractional shares of Gold Common Stock to
which a holder of Company Common Stock would otherwise be entitled to under
Section 2.2 hereof shall be aggregated. If a fractional share results from such
aggregation, such shareholder shall be entitled, after the Effective Time and
upon the surrender of such shareholder's certificate or certificates
representing shares of Company Common Stock, to receive from the Exchange Agent
an amount in cash in lieu of such fractional share equal to the product of such
fraction and the Average Gold Price. Gold, on behalf of Sub, shall make
available to the Exchange Agent, as required from time to time, any cash
necessary for this purpose.
2.4 Closing of the Company Transfer Books. At the Effective Time, the stock
transfer books of the Company shall be closed and no transfer of Company Common
Stock shall thereafter be made.
2.5 Dividends. No dividends or other distributions that are declared after
the Effective Time with respect to Gold Common Stock payable to holders of
record thereof after the Effective Time shall be paid to the Company
shareholders entitled to receive certificates representing Gold Common Stock
until such shareholders surrender their certificates. Upon such surrender,
there shall be paid to the shareholder in whose name the certificates
representing such Gold Common Stock shall be issued any dividends which shall
have become payable with respect to such Gold Common Stock between the Effective
Time and the time of such surrender, without interest. After such surrender
there shall also be
paid to the shareholder in whose name the certificates representing such Gold
Common Stock shall be issued any dividend on such Gold Common Stock that shall
have (a) a record date subsequent to the Effective Time and prior to such
surrender and (b) a payment date after such surrender, and such payment shall be
made on such payment date. In no event shall the shareholders entitled to
receive such dividends be entitled to receive interest on such dividends.
2.6 Shareholders' Approval. Company agrees to submit this Agreement and the
transactions contemplated hereby to its shareholders for approval to the extent
required and as provided by law and the Articles of Incorporation and By-Laws of
Company. A shareholders' meeting of Company shall be held and Company shall
use its reasonable best efforts to take all steps as shall be required for said
meeting to be held as soon as reasonably practicable after the execution hereof.
Company and its Board of Directors shall recommend that the shareholders of
Company approve this Agreement and the transactions contemplated hereby and
shall use their reasonable best efforts to secure such approval.
2.7 Dissenting Shares. Notwithstanding anything to the contrary contained in
this Agreement, to the extent appraisal rights are available to the Company's
shareholders pursuant to the KGCC, any shares held by a person who objects to
the Merger, whose shares were not entitled to vote or were not voted in favor of
the Merger and who complies with all of the provisions of the KGCC concerning
the rights of such person to dissent from the Merger and to require appraisal of
such person's shares and who has not withdrawn such objection or waived such
rights prior to the Closing Date ("Company Dissenting Shares") shall not be
converted pursuant to Section 2.2 but shall become the right to receive such
consideration as may be determined to be due to the holder of such Company
Dissenting Shares pursuant to the KGCC, including, if applicable, any costs
determined to be payable by Bank to the holders of the Company Dissenting Shares
pursuant to an order of the district court in accordance with the KGCC.
Notwithstanding the foregoing, as set forth hereinafter, the obligation of Gold
to close on this transaction is contingent upon the total required cash payments
due Company's shareholders exercising dissenter's rights totaling less than 5%
of the total consideration being provided by Gold to Company as consideration
for this merger.
2.8. Shareholder Guarantee of Company Debt. In addition to the other
obligations of Gold and Sub as set forth herein, Gold and Sub agree that on or
as soon as reasonably possible after the Closing Date, they shall pay in full
the obligation of Company to Banker's Bank of Kansas and shall obtain releases
of the guaranty of such debt provided by certain shareholders of Company.
Company agrees that such indebtedness shall not be increased beyond the amount
outstanding as of the date hereof and Company agrees to make any payments due on
such indebtedness between the date hereof and the Effective Time.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF GOLD AND SUB
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Except as set forth on the Gold Disclosure Schedule attached hereto, Gold and
Sub, jointly and severally, hereby represent and warrant as follows:
3.1 Organization and Authority.
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(a) Gold is a corporation duly organized, validly existing and in good
standing under the laws of the State of Kansas with the corporate power and
authority to own its properties and conduct its business as it is now being
conducted and is duly registered as a bank holding company under the provisions
of the Bank Holding Company Act of 1956, as amended.
(b) Sub is a corporation duly organized, validly existing and in good
standing under the laws of the State of Kansas. Sub has the corporate power to
enter into and perform this Agreement and the execution, delivery and
performance of this Agreement by Sub and the consummation by Sub of the
transactions contemplated hereby have been duly authorized by its Board of
Directors and by Gold as the sole shareholder of Sub.
3.2 Authority. Gold has all requisite corporate power and authority to enter
into this Agreement, and to consummate the transactions contemplated hereby.
The execution and delivery of this Agreement, and the consummation of the
transactions contemplated hereby have been duly authorized by all necessary
corporate action on the part of Gold. This Agreement has been duly executed and
delivered by Gold, and assuming due execution and delivery by Company,
constitutes a valid and binding obligation of Gold, enforceable in accordance
with its terms subject to applicable conservatorship, receivership, bankruptcy,
insolvency and similar laws affecting creditors' rights and remedies generally,
and subject, as to enforceability, to general principles of equity (including
without limitation specific performance), whether applied in a court of law or a
court of equity.
3.3 Shareholder Approval. The shareholders of Gold are not required to approve
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this Agreement.
3.4 No Violations. Subject to approval by the appropriate regulatory
agencies, the execution, delivery and performance of this Agreement by Gold and
Sub do not, and the consummation of the transactions contemplated hereby will
not, constitute (i) a breach or violation of, or a default under, any law, rule
or regulation or any judgment, decree, order, governmental permit or license, or
agreement, indenture or instrument of Gold or any subsidiary or to which Gold or
any subsidiary (or any of their respective properties) is subject, (ii) a breach
or violation of, or a default under, the articles of incorporation, charter or
bylaws of Gold or any subsidiary of Gold or (iii) a breach or violation of, or a
default under (or an event which with due notice or lapse of time or both would
constitute a default under), or result in the termination of, accelerate the
performance required by, or result in the termination of, accelerate the
performance required by, or result in the creation of any lien, pledge, security
interest, charge or other encumbrance upon any of the properties or assets of
Gold under any of the terms, conditions or provisions of any note, bond,
indenture, deed of trust, loan agreement or other agreement, instrument or
obligation to which Gold is a party, or to which any of its respective
properties or assets may be bound or affected.
3.5 Consents. In order to consummate the Merger, Gold is not required to
make any filing or registration with or obtain the authorization, consent or
approval of, any public body or authority except required regulatory filing and
approval with the Federal Reserve System, the Kansas Banking Department and the
Comptroller of Currency and requisite filings with the Securities and Exchange
Commission and the Kansas Secretary of State.
3.6 Capital Stock of Gold. As of the date of this Agreement, Gold has
authorized capital stock consisting of (a) 25,000,000 shares of common stock,
$1.00 par value ("Gold Common Stock"), of which 5,352,196 shares were issued and
outstanding on March 31, 1998, subject, however, to a 100% stock dividend for
shareholders of record as of May 6, 1998 with such stock dividend payable on May
18, 1998, (b) $28.75 Million of 8.75% Junior Subordinated Deferrable Interest
Debentures and (c) 25,000,000 shares of preferred stock, none of which is
issued
and outstanding. All of the issued and outstanding shares of Gold Common Stock
are validly issued, fully paid and non-assessable. Holders of Gold Common Stock
do not have any preemptive rights with respect to the issuance of additional
authorized shares of Gold Common Stock.
3.7 Government Regulation. Gold and its subsidiaries hold all material
licenses, certificates, permits, franchises and rights from all appropriate
federal, state or other public authorities necessary for the lawful conduct of
their respective businesses and ownership of their respective properties. Gold
and its subsidiaries have substantially complied with all federal, state and
local statutes, regulations, ordinances or rules applicable to the ownership of
their respective properties or the conduct of their respective businesses,
except where such failure to comply would not have a material adverse effect on
Gold and its subsidiaries.
3.8 Financial Statements. The consolidated balance sheets of Gold as of
December 31, 1997, the consolidated statement of earnings for the year ended
December 31, 1997, and all related schedules and notes to the foregoing, all of
which have been delivered to Company, have been certified by KPMG Peat Marwick
LLP, independent certified public accountants. All of the foregoing financial
statements, together with the financial statements of Gold dated as of March 31,
1998 and for the period then ending, have been prepared in accordance with
generally accepted accounting principles and practices which were applied on a
consistent basis, are correct and complete and fairly and accurately present the
financial position, results of operation and changes of financial position of
Gold as of their respective dates and for the periods indicated. From March 31,
1998 until the date hereof, there has been no material adverse change in the
financial condition, properties or assets of Gold.
3.9 SEC Reports. Gold's Report on Form 10-KSB for year ended December 31,
1997, filed with the Securities and Exchange Commission and all subsequent
reports and proxy statements filed by Gold thereafter pursuant to Section 13(a)
or 14(a) of the Securities Exchange Act of 1934 do not and will not contain a
misstatement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not misleading as of
the time the document was filed. Since the filing of such Report on Form 10-
KSB, no other report, proxy statement, or other document has been required to be
filed by Gold pursuant to Section 13(a) or 14(a) of the Securities Exchange Act
of 1934 which has not been filed. Gold has delivered to Company the Form 10-KSB
for the fiscal year ended December 31, 1997 and the Form 10-QSB for the quarter
ended March 31,
1998, it being understood that Gold is relying upon the representation of
Company that it has delivered copies of each of these documents to each
shareholder of the Company.
3.10 Status of Gold Common Stock to be Issued. The shares of Gold Common
Stock into which the Company Common Stock are to be exchanged or converted
pursuant to this Agreement will be, when delivered as specified in this
Agreement, validly authorized and issued, fully paid and non-assessable.
However, such shares have not been registered under the Securities Act of 1933
(the "Securities Act") and are therefore "restricted securities" as that term is
used in Rule 144 under the Securities Act. Accordingly, such securities may not
be sold, transferred or otherwise disposed of unless they are subsequently
registered under the Securities Act or an exemption from registration is then
available.
3.11 Legal Proceedings. There are as of the date hereof no actions, suits,
claims, demands or other proceedings or investigations, either judicial or
administrative, pending or, to the knowledge of Gold, threatened against or
affecting the properties, assets, rights or business of Gold or the right to
carry on or conduct its business, nor are there to the knowledge of Gold any
grounds therefor, which, if adversely determined, would have a material adverse
effect on the business, operations, properties or financial condition of Gold.
There are as of the date hereof no actions, suits, claims, demands or other
proceedings or investigations, either judicial or administrative, pending or, to
the knowledge of Gold, threatened which will or could prevent or interfere with
the consummation of the transactions contemplated by this Agreement.
3.12 Taxes. Gold and Sub have timely filed all tax returns required to be
filed by them, and have timely paid and discharged any taxes due in connection
with all such tax returns. To the best knowledge of Gold, the liability for
taxes set forth on each such tax return adequately reflects the taxes due with
respect to such returns. Neither the Internal Revenue Service nor any other
taxing authority is now asserting, either through audits, administrative
proceedings, court proceedings or otherwise any deficiency or claim for
additional taxes against Gold or Sub. Neither Gold nor Sub has granted any
waiver of any statute of limitations with respect to, or any extension of a
period for the assessments of, any tax. There are no tax liens on any of the
assets of Gold or Sub.
3.13 Defaults. Neither Gold nor any of its subsidiaries is in material
breach or material default under any agreement or commitment to which Gold or
any of its subsidiaries is a party, or under any loan agreement, note, security
agreement, guarantee or other document pursuant to or in connection with Gold's
or any of its subsidiaries' extension of credit; and, to their knowledge, there
has not occurred any event which, after the giving of notice, the lapse of time
or otherwise, would constitute any such default under, or result in any such
breach of, any such agreement, commitment or extension of credit.
3.14 Absence of Adverse Agreements. Neither Gold nor Sub is a party to any
agreement or instrument or any judgment, order or decree or any rule or
regulation of any court or other governmental agency or authority which has a
current material adverse effect on the financial condition, result or
operations, assets, business or prospects of Gold or Sub, taken as a whole.
3.15 Broker's Fees. Neither Gold nor Sub nor any of their respective
officers or directors has employed any broker or finder or incurred any
liability for any broker's fees, commissions or finder's fees in connection with
any of the transactions contemplated by this Agreement.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF COMPANY
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Except as set forth on the Company Disclosure Schedule attached hereto,
Company hereby represents and warrants to each of Gold and Sub as follows:
4.1 Organization and Good Standing.
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(a) Company is a corporation duly organized, validly existing and in good
standing under the laws of the State of Kansas with the corporate power and
authority to own its properties and conduct its business as it is now being
conducted and is duly registered as a bank
holding company under the Bank
Holding Company Act of 1956, as amended. The conduct of Company's business and
the ownership of its properties do not require Company to qualify as a foreign
corporation in any jurisdiction except where the failure to be so qualified
individually or in the aggregate would not materially and adversely affect the
business, operations, properties or financial condition of Company and its
subsidiary.
(b) Company has one subsidiary: Peoples State Bank, Colby, Kansas ("Bank"),
which is a state chartered bank duly organized, validly existing and in good
standing under the laws of the State of Kansas and the United States of America
with the corporate power and authority to carry on its business as it is now
being conducted. Bank is duly qualified to do business in each jurisdiction in
which it owns or leases real property or in which the conduct of its business
requires such qualification except where the failure to be so qualified
individually or in the aggregate would not materially and adversely affect the
business, operations, properties or financial condition of Company and/or Bank.
4.2 Authority. Company has all requisite corporate power and authority to
enter into this Agreement, and to consummate the transactions contemplated
hereby. The execution and delivery of this Agreement, and the consummation of
the transactions contemplated hereby have been duly authorized by all necessary
corporate action on the part of Company. This Agreement has been duly executed
and delivered by Company, and assuming due execution and delivery by Gold,
constitutes a valid and binding obligation of Company, enforceable in accordance
with its terms subject to applicable conservatorship, receivership, bankruptcy,
insolvency and similar laws affecting creditors' rights and remedies generally,
and subject, as to enforceability, to general principles of equity (including
without limitation specific performance), whether applied in a court of law or a
court of equity.
4.3 Shareholder Approval. The Board of Directors of Company has directed or
will direct, that this Agreement and the transactions contemplated hereby be
submitted to the Company's shareholders for approval at a meeting of such
shareholders and, except for adoption of this Agreement by the requisite vote of
the Company's shareholders, no other shareholder action is necessary to approve
this Agreement and to consummate the transactions contemplated hereby. The
Board of
Directors will recommend that the shareholders approve the transactions
contemplated hereby subject to its fiduciary duties. No approval of a number of
outstanding shares of Company or Bank greater than that required by the relevant
statutory provisions is required for approval of this Agreement and the
consummation of the transactions contemplated hereby. Approval of this
Agreement by the shareholders shall also constitute the acceptance by the
shareholders of the indemnification obligation imposed upon them under Section
9.5 hereinafter.
4.4 No Violations. Subject to approval by the appropriate regulatory
agencies, the execution, delivery and performance of this Agreement by Company
do not, and the consummation of the transactions contemplated hereby will not,
constitute (i) a breach or violation of, or a default under, any law, rule or
regulation or any judgment, decree, order, governmental permit or license, or
agreement, indenture or instrument of Company or Bank or to which Company or
Bank (or any of their respective properties) is subject, (ii) a breach or
violation of, or a default under, the articles of incorporation, charter or
bylaws of Company or Bank or (iii) a breach or violation of, or a default under
(or an event which with due notice or lapse of time or both would constitute a
default under), or result in the termination of, accelerate
the performance
required by, or result in the creation of any lien, pledge, security interest,
charge or other encumbrance upon any of the properties or assets of Company or
Bank under any of the terms, conditions or provisions of any note, bond,
indenture, deed of trust, loan agreement or other agreement, instrument or
obligation to which the Company or Bank is a party, or to which any of their
respective properties or assets may be bound or affected.
4.5 Consents. Except as disclosed herein, no filing or registration with, or
authorization, consent or approval of, any public body or authority is necessary
for the consummation by Company of the Merger or the other transactions
contemplated by this Agreement.
4.6 Capitalization. Company has authorized capital stock consisting of
50,000 shares of common stock, par value $10.00 per share, of which 7,500 shares
are issued and outstanding, and 1,000 shares of preferred stock, par value
$100.00 per share, none of which is issued and outstanding. All of the issued
and outstanding shares of Company Common Stock are validly issued, fully paid
and non-assessable. There are no outstanding warrants, options, subscriptions,
contracts, rights or other agreements or commitments obligating Company to issue
or sell any additional shares of Company Common Stock nor are there outstanding
any securities, debts, obligations or rights which are convertible into or
exchangeable for shares of Company Common Stock. The authorized capital stock
of Bank consists of 45,000 shares of common stock, $10.00 par value per share
("Bank Stock") of which 45,000 shares have been duly and validly issued, are
fully paid, and, except for director's qualifying shares which are all subject
to Repurchase Agreements, all of which are owned directly by Company free and
clear of all liens, encumbrances, equities or claims. There are no outstanding
warrants, options, subscriptions, contracts, rights or other arrangements or
commitments obligating Company or Bank to issue or sell any additional shares of
Bank's capital stock nor are there outstanding any securities, debts,
obligations or rights which are convertible into or exchangeable for shares of
capital stock or any other equity security of Bank.
4.7 Government Regulation. Company and Bank hold all material licenses,
certificates, permits, franchises and rights from all appropriate federal, state
or other public authorities necessary for
the lawful conduct of their respective businesses and ownership of their
respective properties. Company and Bank have substantially complied with all
material federal, state and local statutes, regulations, ordinances or rules
applicable to the ownership of their respective properties or the conduct of
their respective businesses.
4.8 Financial Statements. The Company has previously delivered to Gold and
Sub balance sheets for the Company as of March 31, 1998, December 31, 1997 and
December 31, 1996, the statements of earnings for the period ended March 31,
1998 and for the years ended December 31, 1997 and December 31, 1996, and all
related schedules and notes to the foregoing (collectively the "Company
Financial Statements"). Although such statements have not been certified as of
the date hereof by independent certified public accountants, the Company
Financial Statements have been prepared in accordance with generally accepted
accounting principles and practices which were applied on a consistent basis,
are correct and complete and fairly and accurately present the financial
position, results of operation and changes of financial position of Company as
of their respective dates and for the periods indicated. Company has no
material liabilities or obligations of a type which would be included in a
balance sheet prepared in accordance with generally accepted accounting
principles whether related to tax or non-tax matters, accrued or contingent, due
or not yet due, liquidated or unliquidated, or otherwise,
except as and to the
extent disclosed or reflected in the balance sheet of Company as of March 31,
1998, or incurred since March 31, 1998, in the ordinary course of business.
From March 31, 1998 until the date hereof, there has been no material adverse
change in the financial condition, properties, assets, liabilities, rights or
business of Company or Bank, or in the relationship of Company and Bank with
respect to its employees, creditors, suppliers, distributors, customers or
others with whom it has business relationships.
4.9 Legal Proceedings. There are as of the date hereof no actions, suits,
claims, demands or other proceedings or investigations, either judicial or
administrative, pending or, to the knowledge of Company, threatened against or
affecting the properties, assets, rights or business of Company or Bank or the
right to carry on or conduct their respective businesses, nor are there to the
knowledge of Company any grounds therefor. There are as of the date hereof no
actions, suits, claims, demands or other proceedings or investigations, either
judicial or administrative, pending or, to the knowledge of Company, threatened
which will or could prevent or interfere with the consummation of the
transactions contemplated by this Agreement.
4.10 Title to Assets. Except for securities pledged to secure public funds
deposits or subject to customer repurchase agreements entered into in the
ordinary course of business, and leased property discussed below, Company and
Bank have good and marketable title to and possession of all of their respective
real and personal properties and assets, in each case free and clear of any
liens, restrictions, encumbrances, rights, title and interests of others, except
for other real estate owned and except as reflected on their respective
financial statements and except for the lien of current taxes, covenants and
restrictions of record, and other minor imperfections of title not affecting
marketability, which liens, covenants, restrictions and imperfections do not
materially affect the value of such property and do not interfere with the use
made of such property by Company and Bank. The real and personal properties and
assets held under lease by Company and Bank are held by them under valid,
subsisting and enforceable leases with such exceptions as do not interfere with
the use made of such properties and
assets by Company and Bank. No consent is necessary under the terms of any such
lease in connection with the consummation of the transactions contemplated
hereby.
4.11 Undisclosed Liabilities. As of the date hereof, neither Company nor
Bank have any debt, liability or obligation (whether accrued, contingent,
absolute or otherwise) known to any of such corporations of the nature which
would customarily be included in a corporate balance sheet or the notes thereto
prepared in accordance with generally accepted accounting principles that is not
reflected or reserved against in the Company Financial Statements or was not
incurred in the ordinary course of their business.
4.12 Taxes. The Company and Bank have timely filed all tax returns required
to be filed by them, and the Company and Bank have timely paid and discharged
all taxes due in connection with or with respect to the filing of such tax
returns and have timely paid all other taxes as are due, except such as are
being contested in good faith by appropriate proceedings and with respect to
which the Company is maintaining reserves adequate for their payment. To the
best knowledge of the Company, the liability for taxes set forth on each such
tax return adequately reflects the taxes required to be reflected on such tax
return. Neither the IRS nor any other governmental entity or taxing authority
or agency is now asserting, either through audits, administrative proceedings,
court proceedings or otherwise, or, to the best of Company's knowledge,
threatening to assert against Company or Bank any deficiency or claim for
additional
taxes. Neither the Company nor Bank has granted any waiver of any
statute of limitations with respect to, or any extension of a period for the
assessment of, any tax. There are no tax liens on any assets of the Company or
Bank. Neither the Company nor Bank has received a ruling or entered into an
agreement with the Internal Revenue Service or any other governmental entity or
taxing authority or agency that would have a Material Adverse Effect (as defined
below) on the Company or Bank, taken as a whole, after the Effective Time.
4.13 Contracts. Neither Company nor Bank is party to or bound by any:
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(a) employment contract or letter or other writing relating to employment;
(b) bonus, deferred compensation, savings, profit sharing, severance pay,
pension or retirement plan or arrangement;
(c) material lease or license with respect to any property, real or personal,
whether Company or Bank is landlord or tenant, licensor or licensee, involving a
liability or obligation of Company or Bank as obligor in excess of $5,000 on an
annual basis or over the life of the lease or license.
(d) agreement, contract or indenture relating to the borrowing of money by
Company or any subsidiary, excluding deposit obligations, obligations under
certificates of deposit, letters of credit, items in the process of collection,
commitments to loan or discount, endorsements made for collection and guarantees
made in the ordinary course of business;
(e) agreement with any present or former officer, director or shareholder of
Company or Bank; or
(f) except as listed in the disclosure statement, other contract, agreement
or other commitment which is material to the business, operations, property,
prospects or assets or to the condition, financial or otherwise, of Company or
Bank or which involve a payment by Company or Bank of more than $1,000 in one
year over the life of such contract, agreement or commitment.
4.14 Regulatory Reports; Examinations. Company and Bank have timely filed
all material reports, registrations and statements, together with any amendments
required to be made with respect thereto, with all governmental or regulatory
authorities, agencies, courts, commissions or other entity ("Governmental
Entity") and have paid all fees and assessments due and payable in connection
therewith. Except for normal examinations conducted by a Governmental Entity in
the regular course of the business of Company and Bank, no Governmental Entity
has initiated any proceeding or, to the best knowledge of Company, investigation
into the business or operations of Company or Bank. There is no unresolved
material violation, criticism, or exception by any Governmental Entity with
respect to any report or statement relating to any examinations of Company or
Bank. Company has provided or made available to Gold all reports of
examinations conducted by any Governmental Entity with respect to Company and/or
Bank, and all correspondence between Company and/or Bank and any Governmental
Entity during the preceding three (3) years.
4.15 Conduct. From March 31, 1998 until the date hereof:
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(a) There has been no material adverse change in the financial condition of,
or in the properties, assets, liabilities, rights or business, taken as a whole,
of Company or Bank or in the relationship of Company or Bank with respect to
their employees, creditors, suppliers, distributors, customers or others with
whom they have business relationships.
(b) The business affairs of Company and Bank have been conducted and carried
on only in their ordinary and regular course of business, and Company and Bank
have not incurred or become subject to any liabilities or obligations other than
those incurred in their ordinary course of business, those incurred pursuant to
existing contracts disclosed pursuant to Section 4.13 and those incurred
pursuant to commitments permitted hereby.
(c) Neither Company nor Bank have entered into any employment contract with
any director, officer or salaried employee, paid any or made any accrual or
arrangement for payment of bonuses or special compensation of any kind or any
severance or termination pay to any of their officers, employees or directors,
increased the rate of compensation, if any, or instituted or made any material
increase in any officer's, employee's or director's welfare, retirement or
similar plan or arrangement, other than merit increases made in accordance with
past practices and procedures which have not exceeded the greater of $3,000 or
5% on an annual basis for any one individual.
4.16 Compliance with ERISA. Neither Company nor Bank has established,
maintained or contributed at any time during the five-year period ending as of
the Effective Time to any employee
benefit plan (as defined in Sections 3(3) or 3(37) of the Employment Retirement
Income Security Act of 1974 ("ERISA")) or any other plan with respect to which
any governmental filings are required, except for the plans listed on Schedule
4.16 (collectively, the "Plans"). A true and accurate copy of each of the
Plans, any related trust agreements and each of the amendments thereto has been
provided to Gold together with (i) all determination letters received in respect
of any qualified plans, and (ii) all required reports and supporting schedules
filed with any government agency in respect of the Plans for the three most
recent years ending on or before the Effective Time. To Company's knowledge as
sponsor of the Plans, the Plans and each fiduciary (as defined in Section 3(21)
of ERISA) of the Plans are in compliance in all material respects with all
applicable requirements (including nondiscrimination requirements in effect as
of the Effective Time) of the Internal Revenue Code of 1986 ("Code"), including,
but not limited to, Sections 79, 105, 106, 125, 401, 501, and 4975 of the Code.
For purposes of this Section 4.16, noncompliance with the Code or ERISA is
material if such noncompliance could have a Material Adverse Effect on the
condition of one or more of the Plans or of Company or Bank, either as of the
Effective Time or upon discovery of the noncompliance. To Company's knowledge
as sponsor of the Plans, all required contributions to the Plans through the
Effective Time have been made. To Company's knowledge as sponsor of the Plans,
Company and Bank (each with respect to the Plans), as well as the Plans, have no
material current or threatened liability of any kind to any person, including
but not limited to any government agency, now or as of the Effective Time, other
than for the payment of benefits in the ordinary course.
4.17 Defaults. Neither Company nor Bank is in material breach or material
default known to either under any agreement or commitment to which the Company
or Bank is a party, or under any loan agreement, note, security agreement,
guarantee or other document pursuant to or in connection with the Company's or
Bank's extension of credit; and to their knowledge there
has not occurred any
event which, after the giving of notice, the lapse time or otherwise, would
constitute any such default under, or result in any such breach of, any such
agreement, commitment or extension of credit.
4.18 Insurance. Complete and correct copies of all material policies of
fire, product or other liability, workers' compensation and other similar forms
of insurance owned or held by Company and Bank have been delivered or made
available to Gold. Subject to expirations and renewals of insurance policies in
the ordinary course of business, all such policies are in full force and effect,
all premiums with respect thereto covering all periods up to and including the
date as of which this representation is being made have been paid (other than
retrospective premiums which may be payable with respect to worker's
compensation insurance policies), and no notice of cancellation or termination
has been received with respect to any such policy. Such policies are and shall
remain valid, outstanding and enforceable policies, and will not be terminated
prior to the Effective Time. To the best knowledge of Company, the insurance
policies to which Company or Bank are parties are sufficient for compliance with
all material requirements of law and all material agreements to which Company or
Bank are parties and will be maintained by Company and Bank until the Effective
Time. Neither Company nor Bank has been refused any insurance with respect to
any material assets or operations, nor has coverage been limited in any respect
material to their operations by any insurance carrier to which they have applied
for any such insurance or with which they have carried insurance during the last
five (5) years.
4.19 Absence of Adverse Agreements. Neither the Company nor Bank is a party
to any agreement or instrument or any judgment, order or decree or any rule or
regulation of any court or other governmental agency or authority which
materially and adversely affects or in the future may have a Material Adverse
Effect on the financial condition, results or operations, assets, business or
prospects of the Company or Bank, taken as a whole.
4.20 Internal Controls and Records. The Company and Bank maintain books of
account which accurately and validly reflect, in all material respects, all
loans, mortgages, collateral and other business transactions and maintain
accounting controls sufficient to ensure that all such transactions are (a) in
all material respects, executed in accordance with its management's general or
specific authorization, and pursuant to Company's and Bank's documented policies
and procedures, and (b) recorded in conformity with generally accepted
accounting principles. Company has furnished to Gold all of Company's and
Bank's written internal policies and procedures which are identified on the
Company's Disclosure Schedule.
4.21 Loans. (a) Bank is not a party to any written or oral loan agreement,
note or borrowing arrangement which has been classified as "substandard",
"doubtful," "loss," "other loans especially mentioned" or any comparable
classifications by Company or Bank or banking regulators, except as reflected on
a list previously provided to Gold and Sub during the due diligence period,
which list Company and Bank agree to update between the date hereof and the
Closing Date; (b) except for certain loans to executive officers of the Company
and/or Bank which have been disclosed to Sub, neither Company nor Bank is a
party to any written or oral loan agreement, note, or borrowing arrangement,
including any loan guaranty, with any director or executive officer of Company
or Bank, or any person, corporation or enterprise controlling, controlled by or
under common control with any of the foregoing; (c) to the best knowledge of
Company neither Company nor Bank is a party to any written or oral loan
agreement, note or borrowing arrangement in violation of any law, regulation or
rule of any governmental authority.
4.22 Environmental Laws. The operations of Company and Bank comply with all
applicable past and present federal, state and local environmental statutes and
regulations and neither the condition of any property owned by Company or Bank
nor the operation of the business of any of such entities violates any
applicable federal, state or local environmental statute or regulation. None of
the operations of Company or Bank is subject to any judicial or administrative
proceeding alleging the violation of any federal, state or local environmental
health or safety statute or regulation nor is it the subject of any claim
alleging damages to health or property pursuant to which the Company or Bank may
be liable. None of the operations of nor any of the properties owned by Company
or Bank is the subject of any federal, state or local investigation in
evaluating whether any remedial action is needed to respond to a release or
threatened release of any hazardous waste or substance from whatever source. No
condition or event has occurred which, with notice or the passage of time or
both, would constitute a violation of any federal, state or local environmental
law and at no time has the Company or Bank stored or used any pollutants,
contaminants or hazardous or toxic waste, substances or materials on or at any
location owned by Company or Bank. There are no underground storage tanks now
located on any real property owned by Company or Bank, nor, except as disclosed
in the Buried Tank Leak Assessment dated April 7, 1993, a copy of which has been
provided to Sub, heretofore located on any
real property owned by Company or Bank. Except as reflected in the
aforementioned Buried Tank Leak Assessment, neither Company nor Bank has ever
been notified by either a federal, state or local governmental authority, or any
private party, that Company or Bank is a potentially responsible party for
remedial costs spent addressing the release, or threat of a release, of a
hazardous substance and to the environment pursuant to the Comprehensive
Environmental Response, Compensation or Liability Act, 42 U.S.C. (S)(S) 9601, et
seq. or any corresponding state law.
Gold may obtain at its option and expense on or prior to 120 days following
the date hereof an environmental audit of all properties and assets of Company
and Bank whether directly owned or classified as other real estate owned. Such
environmental audit shall constitute a part of the due diligence process, should
Gold choose to pursue it, and if Gold determines in its sole discretion that
such environmental audit has not been completed to its reasonable satisfaction
or reflects the potential of an environmental problem with respect to any of the
properties or assets of Company or Bank, then Gold may deem the due diligence
unsatisfactory and terminate this Agreement under the terms of Section 9.1
hereinafter.
4.23 Broker's Fees. Neither Company nor Bank nor any of their respective
officers or directors has employed any broker or finder or incurred any
liability for any broker's fees, commissions or finder's fees in connection with
any of the transactions contemplated by this Agreement.
4.24 Labor Matters. (a) To the best knowledge of Company, Company and Bank
are in compliance with all applicable laws respecting employment and employment
practices, terms and conditions of employment and wages and hours, and are not
engaged in any unfair labor practice; (b) there is no unfair practice complaint
against Company or Bank pending before the National Labor Relations Board; (c)
there is no labor strike, dispute, slowdown, representation campaign or work
stoppage actually pending or threatened against or affecting Company or
Bank; (d) no grievance or arbitration proceeding arising out of or under
collective bargaining agreements is pending and no claim therefor has been
asserted against Company or Bank; and (e) neither Company nor Bank is
experiencing any material work stoppage.
4.25 Full Disclosure. No statement contained in any document, certificate,
or other writing furnished or to be furnished by or at the direction of Company
to Gold in, or pursuant to the provisions of, this Agreement contains or shall
contain any untrue statement of a material fact or omits or shall omit to state
any material fact necessary, in light of the circumstances under which it was
made, in order to make the statements herein or therein not misleading.
ARTICLE V
COVENANTS OF COMPANY
--------------------
5.1 Affirmative Covenants of the Company. Unless the prior written consent
of Gold shall have been obtained, and which consent will be given or denied
within 3 business days of receipt of written request for such consent, and
except as otherwise expressly contemplated herein, the Company shall and shall
cause Bank to (i) operate its business only in the usual, regular, and ordinary
course, (ii) preserve intact its business organization and assets and maintain
its rights and franchises; and (iii) take no action which would (a) materially
adversely affect the ability of any party to obtain any consents required for
the transactions contemplated hereby without imposition of a condition or
restriction which would prevent the transactions contemplated hereby, including
the Merger, from qualifying as a reorganization within the meaning of Section
368(a) of the Code, or (b) materially adversely affect the ability of any party
to perform its covenants and agreements under this Agreement.
5.2 Negative Covenants of the Company. Except as specifically permitted by
this Agreement, from the date of this Agreement until the earlier of the
Effective Time or the termination of this Agreement, the Company covenants and
agrees that it will not do or agree to commit to do, or permit Bank to do or
agree to commit to do, any of the following without the prior written consent of
Gold, which consent shall not be unreasonably withheld and which consent will be
given or denied within 3 business days of receipt of written request for such
consent:
(a) make any single loan (or series of loans to the same or related entities
or persons) or any commitment (verbal or written) for a loan (or series of
commitments to the same or related entities or persons) in an amount greater
than $50,000.00 other than renewals of existing loans or commitments to loan;
(b) purchase or invest in any securities, other than U.S. government
obligations or other securities backed by the full faith and credit of the
United States having a maturity of not more than two years from the date of
purchase;
(c) amend or adopt any employee benefit plan, and will not grant any increase
in the rates of pay of their employees or any increase in the compensation
payable or to become payable, if any, to any director, officer, employee or
agent thereof, or contribute to any pension plan or otherwise increase in any
amount the benefits or compensation of any such directors, officers or employees
of Company or Bank under any pension plan or other contract or commitment except
for merit increases in accordance with past practices;
(d) make any capital expenditure or enter into any material contract or
commitment (except loan commitments as permitted in Subparagraph (a) of this
Section 5.2); involving an obligation or commitment in excess of $5,000 or
engage in any transaction not in their usual and ordinary course of business and
consistent with past practices;
(e) except as set forth in Section 7.6 hereinafter, declare or pay any
dividend or make any other distribution in respect of any capital stock of
Company or Bank, split, combine or reclassify any shares of its capital stock
or, directly or indirectly, redeem (except as set forth in Section 5.1 above),
purchase or otherwise acquire any share of the capital stock of the Company or
Bank;
(f) amend the Articles of Incorporation or By-Laws of each of the Company or
Bank or make any change in the authorized, issued or outstanding capital stock
(or any change in the par value thereof) of Company or Bank;
(g) acquire or purchase any assets of or make any investment in any financial
institution other than the purchase of loans or participations therein in the
ordinary course of business, but subject to Section 5.2(a);
(h) enter into any new line of business;
(i) acquire or agree to acquire, by merging or consolidating with, or by
purchasing a substantial equity interest in or a substantial portion of the
assets of, or by any other manner, any business or any corporation, partnership,
association or other business organization or division thereof or otherwise
acquire any assets, which would be material, individually or in the aggregate,
to Company, other than in connection with foreclosures, settlements in lieu of
foreclosure or troubled loan or debt restructuring in the ordinary course of
business consistent with prudent banking practices;
(j) take any action that is intended or may reasonably be expected to result
in any of its representations and warranties set forth in this Agreement being
or becoming untrue in any material respect, or in any of the conditions to the
Merger set forth in Article VII not being satisfied, or in a violation of any
provisions of this Agreement except, in every case, as may be required by
applicable law;
(k) change its methods of accounting except as required by changes in
generally accepted accounting principles ("GAAP") or regulatory accounting
principles as concurred to by the Company's independent auditors;
(l) other than activities in the ordinary course of business consistent with
prior practice, sell, lease, encumber, assign or otherwise dispose of, any of
its material assets in excess of $5,000.00, properties or other rights of
agreements;
(m) file any application to relocate or terminate the operations of any
banking office;
(n) make any equity investment or commitment to make such an investment in
real estate or in any real estate development project, other than in connection
with foreclosures, settlements in lieu of foreclosure or troubled loan or debt
restructuring in the ordinary course of business consistent with prudent banking
practices;
(o) create, renew, amend or terminate or give notice of a proposed renewal,
amendment or termination of, any material contract, agreement or lease for
goods, services or office space to which the Company or Bank is a party or by
which the Company or Bank or their respective properties is bound; or
(p) make any new loan or new extension of credit, or commit to make any such
loan or extension of credit, to any director or officer of the Company or Bank
without giving Gold three days' notice in advance of the Company's or Bank's
approval of such loan or extension of credit or commitment relating thereto.
5.3 Inspection. Between the date hereof and the Closing Date and upon
reasonable notice, Gold and its authorized representatives shall be permitted
full access during all business hours to all properties, books, records,
contracts and documents of Company and Bank. The Company shall furnish to Gold
and its authorized representative all information with respect to the affairs of
Company and Bank as Gold may reasonably request.
5.4 Financial Statements and Call Reports. From and after the date hereof
through the Closing Date, Company shall deliver to Gold monthly reports of
condition and income statements of Company and Bank and shall deliver to Gold
copies of the call reports for Bank as filed with any regulatory agency promptly
after such filing.
5.5 Right to Attend Meetings. Company and Bank shall allow a representative
of Gold to attend as an observer all meetings of the Board of Directors of
Company and Bank and all meetings of the committees of each such board,
including, without limitation, the audit and executive committees thereof and
any other meetings of Company or Bank officials at which policy is being made.
Company and Bank shall give reasonable notice to Gold of any such meeting and,
if known, the agenda for or business to be discussed at such meeting. Company
and Bank shall provide to Gold all information provided to the directors on all
such boards and committees in connection with all such meetings or otherwise
provided to the directors and shall provide any other financial reports or other
analyses prepared for senior management of Company or Bank.
5.6. Data Processing. Company shall cooperate with Gold in taking those
planning actions necessary to be in a position to convert its data processing
procedures and formats to procedures and formats used by Gold, if any, as of the
Effective Time. Gold shall provide such assistance and consultation as Company
may reasonably require in such planning process.
5.7 No Solicitation. Neither Company nor Bank nor any affiliates or
associates of Company nor Bank acting for or on behalf of Company or Bank shall,
directly or indirectly, make, encourage, facilitate, solicit, assist or initiate
any inquiry or proposal, or participate in any negotiations with, or, subject to
the provisos to this sentence, provide any information to, any
corporation, partnership, agent, attorney, financial adviser, person, or other
entity or group (other than (a) Gold, Sub, an affiliate or associate of Gold or
Sub or an officer, employee or other authorized representative of Gold, Sub or
such affiliate or associate or (b) the Company's counsel, accountants and
financial adviser solely for use in connection with the transactions
contemplated hereby) relating to any (i) liquidation, dissolution,
recapitalization, merger or consolidation of the Company or Bank, (ii) outside
the ordinary course of business, sale of a significant amount of assets of the
Company or Bank, (iii) purchase or sale of shares of capital stock of the
Company or Bank, or (iv) any similar transactions involving Company or Bank,
other than the transactions contemplated by this Agreement; provided, however,
that the Company may provide information at the request of a third party if the
Board of Directors of the Company determines, in good faith, that the exercise
of its fiduciary duties to the Company's shareholders under applicable law, as
advised in writing by outside counsel reasonably acceptable to Gold and Sub,
requires it to take such action, and, provided further, that Company may not, in
any event, provide to such third party any information which it has not provided
to Gold and Sub. Company shall immediately cease and cause to be terminated any
and all such contacts and negotiations with respect to any such transaction.
Company shall immediately inform Gold and Sub of any inquiry, proposal or
request for information (including the terms thereof and the person making such
inquiry) which it may receive in respect of such a transaction.
5.8 Regulatory Approvals. Subject to the terms and conditions of this
Agreement, Company agrees to use its reasonable best efforts to cooperate with
Gold in Gold's efforts to secure as expeditiously as practicable all the
necessary approvals, regulatory or otherwise, needed to consummate the
transactions contemplated herein.
5.9 Information. Company shall provide such information and answer such
inquiries as Gold may reasonably request or make concerning the subject matter
of the representations and warranties of Company herein.
5.10 Tax-Free Reorganization Treatment. Company shall not intentionally take
or cause to be taken any action, whether before or after the Effective Time,
which would disqualify the Merger as a tax-free "reorganization" within the
meaning of Section 368(a) of the Code (subject to required recognition of gain
or loss with respect to cash paid pursuant hereto or to any holder of Company
Common Stock who dissents from the merger).
ARTICLE VI
COVENANTS OF GOLD AND SUB
-------------------------
6.1 Regulatory Approvals. Subject to the terms and conditions of this
Agreement, Gold and Sub agree to use their reasonable best efforts to secure as
expeditiously as practicable all the necessary approvals, regulatory or
otherwise, needed to consummate the transactions contemplated herein and agree
to file applications relating to such approvals within sixty (60) days from the
date hereof. Gold and Sub shall provide to Company's counsel a copy of all
applications for such approvals and shall keep such counsel or the Company
advised of the status of the regulatory review process.
6.2 Information. Gold and Sub shall provide such information and answer such
inquiries, as the Company may reasonably request or make concerning the subject
matter of the representations and warranties of Gold and Sub herein.
6.3 Tax-Free Reorganization Treatment. Neither Gold nor Sub shall
intentionally take or cause to be taken any action, whether before or after the
Effective Time, which would disqualify the Merger as a tax-free "reorganization"
within the meaning of Section 368(a) of the Code.
6.4 Employee Benefits. Employees of Company or Bank shall be eligible to
participate in all Gold employee welfare benefit plans in accordance with their
terms, and for such purpose all service of such employees with the Company and
Bank shall be counted as service with Gold.
ARTICLE VII
CONDITIONS PRECEDENT TO GOLD'S OBLIGATIONS
------------------------------------------
The obligations of Gold and Sub to consummate the transactions hereunder shall
be subject to the satisfaction on or before the Closing Date of all of the
following conditions, except such conditions as Gold or Sub may waive in
writing:
7.1 Representations, Warranties and Covenants. All representations and
warranties of Company contained in this Agreement shall be true and correct in
all material respects on and as of the Closing Date, except for changes
permitted by or contemplated by this Agreement and except to the extent that any
such representation or warranty is made solely as of a specified date. Company
shall have performed all agreements and covenants in all material respects
required by this Agreement to be performed on or prior to the Closing Date and
Gold shall have received a certificate signed by the Chief Executive Officer of
Company, dated the Closing Date, to the foregoing effect.
7.2 Material Actions; Debts or Defaults. On the Closing Date, there shall
not be: (i) except as set forth on the Company Disclosure Schedule, any actions,
suits, claims, demands or other proceedings or investigations, either judicial
or administration, pending or, to the knowledge of Company or Bank, threatened
against or affecting the properties, assets, rights or business of Company or
Bank or the right to carry on or conduct their respective businesses; (ii) any
debt, liability or obligation of Company or Bank (whether accrued, contingent,
absolute or otherwise) required to be reflected in a corporate balance sheet or
the notes thereto that is not reflected or reserved against in their respective
financial statements or was not incurred in ordinary course of their respective
businesses; or (iii) any material breach or material default of Company or Bank
under any agreement or commitment to which either is a party, or under any loan
agreement, note, security agreement, guarantee or other document pursuant to or
in connection with the Company's or Bank's extension of credit.
7.3 Adverse Changes. There will have been no material adverse change in the
financial condition of, or in the properties, assets, liabilities, rights or
business, taken as a whole, of Company or Bank, and taking into account for this
purpose the proceeds of any applicable insurance.
7.4 Regulatory Authority Approval. Orders, consents and approvals in form
and substance reasonably satisfactory to Gold shall have been entered by or
obtained from the appropriate regulatory authorities authorizing consummation of
the transactions contemplated hereby pursuant to the provisions of the Bank
Holding Company Act and any other applicable federal or state banking regulatory
statute or rule and no such order, consent or approval shall be conditioned or
restricted in any manner which in the reasonable judgment of Gold would
materially adversely affect the operations of or be unduly burdensome to Gold.
In addition, all required regulatory approvals to permit the acquisition of the
Bank Business shall have been received and any applicable waiting periods shall
have been expired.
7.5 Litigation. At the Closing Date, there shall not be pending or
threatened litigation in any court or any proceeding by any governmental
commission, board or agency which Gold reasonably believes could reasonably
result in restraining, enjoining or prohibiting the consummation of this
Agreement.
7.6 Financial Measures. On the Closing Date, the tier 1 capital of Bank
shall be not less than $1,743,000.00 and the reserve for loan and lease loss of
Bank shall be not less than $178,000.00, all as determined on the basis of the
March 31, 1998 financial statements of the Bank delivered to Gold and prepared
in accordance with applicable bank regulatory instructions. It is fully
understood all future earnings from the date hereof forward shall accrue to the
retained earnings or reserves of the Bank, respectively, and shall not result in
an increase of any consideration payable by Gold or Sub hereunder. Further, the
parties may mutually agree to certain accounting adjustments to be made prior to
the Effective Time. Further, the parties agree that prior to the Closing Date,
the Company may make a dividend distribution to its shareholders subject to the
limitation that such distribution shall not exceed (i) the federal and state
income taxes payable by the shareholders of Company on the consolidated earnings
of Bank and Company for the period from April 1, 1998 through the Closing Date
(provided, however, that for purposes of determining the amount of tax payable
by the Company's shareholders on such earnings, the combined federal and state
income tax rate shall not exceed 40%), (ii) plus $35,000.00. The authorization
for such dividend distribution does not, however, modify the condition precedent
set forth in the first sentence of this Section 7.6.
7.7 Approval by Shareholders. The shareholders of Company and Bank shall
have duly approved and adopted this Agreement and the other transactions
contemplated hereby to the extent required by applicable requirements of law and
the Articles of Incorporation and By-Laws of Company and Bank.
7.8 Tax Representations. Each shareholder of Company and Bank owning more
than 10% of the outstanding Company Common Stock or Bank Stock shall have made
those representations reasonably requested by counsel and necessary to enable
them to render the opinion described in Section 7.10 hereof.
7.9 Satisfactory Due Diligence. Representatives of Company and Bank have
cooperated with Gold, Sub and representatives of Gold and Sub in conducting its
due diligence in accordance with the terms of Section 5.3 above.
7.10 Federal Tax Opinion. Gold shall have received an opinion of Xxxxx &
Xxxxx, Chartered, counsel to Gold ("Gold's Counsel"), in form and substance
reasonably satisfactory to
Gold, dated the Closing Date, the Merger will be treated as a tax-free
reorganization within the meaning of Section 368(a)(1)(C) of the Code, subject
to required recognition of gain or loss with respect to cash paid in accordance
with the terms hereof or cash paid to holders of Company Common Stock who
dissent from the Merger.
7.11 Opinion of Counsel. Gold shall have received an opinion from Xxxxxxx X.
Xxxxx of Xxxxx & Xxxxx ("Company's Counsel") dated the Closing Date in form and
substance reasonably satisfactory to Gold covering the matters set out in
Exhibit 7.11 hereto.
7.12. Qualification for Pooling-of-Interest Treatment. Gold shall have
received an opinion from an accounting firm reasonably acceptable to Gold that
this transaction will qualify for pooling-of-interest accounting treatment and
that all conditions applicable thereto (including limitation of cash
consideration paid by Gold hereunder and absence of any capital transactions
involving any parties hereto) have been met.
ARTICLE VIII
CONDITIONS PRECEDENT TO OBLIGATION
----------------------------------
OF COMPANY AND BANK
-------------------
The obligations of Company and Bank to consummate the transactions
contemplated hereunder shall be subject to satisfaction on or before the Closing
Date of all of the following conditions, except such conditions as Company and
Bank may waive in writing:
8.1 Representations, Warranties and Covenants. All representations and
warranties of Gold contained in this Agreement shall be true in all material
respects on and as of the Closing Date, except to the extent that any such
representation or warranty is made solely as of a specified date, and Gold shall
have performed all agreements and covenants in all material respects required by
this Agreement to be performed on or prior to the Closing Date.
8.2 Regulatory Authority Approval. Orders, consents and approvals in form
and substance reasonably satisfactory to Company shall have been entered by or
obtained from the appropriate regulatory authorities authorizing consummation of
the transactions contemplated by this Agreement pursuant to the provisions of
the Bank Holding Company Act and any other applicable federal or state banking
regulatory statute or rule.
8.3 Litigation. There shall not be pending or threatened litigation in any
court or any proceeding by any governmental commission, board or agency which
Company believes could reasonably result in restraining, enjoining or
prohibiting the consummation of the transactions contemplated by this Agreement.
8.4 Approval by Shareholders. The shareholders of Company and Bank shall
have duly approved and adopted this Agreement and the transactions contemplated
hereby to the extent required by applicable requirements of law and the Articles
of Incorporation and By-Laws of the Company and Bank.
8.5 Adverse Changes. From the date of this Agreement to the Closing Date,
there will have been no material adverse change in the financial condition,
properties, assets, liabilities, rights, business or prospects of Gold.
ARTICLE IX
TERMINATION OF AGREEMENT; INDEMNIFICATION
-----------------------------------------
9.1 Basis for Termination. This Agreement and the transactions contemplated
hereby may be terminated at any time prior to the Closing Date: (a) by mutual
consent in writing of the parties hereto; (b) by Gold upon written notice to
Company if any regulatory approval of the transactions contemplated under the
terms of this Agreement shall be denied or if any such regulatory approval shall
be conditioned or restricted in any manner which in the reasonable judgment of
Gold would materially adversely affect the operations of or would be unduly
burdensome to Gold; (c) by Gold or Company if the other party has materially
breached this Agreement and has not cured such breach within the earlier of (i)
30 days after the non-breaching party shall have given notice to the breaching
party of the existence of such breach or (ii) the Closing Date; (d) by Gold or
Company upon written notice to the other of any other condition imposed for the
benefit of such party that shall not have been satisfied or waived prior to the
Closing Date; or (e) by either Gold or Company if the Closing Date shall not
have occurred by June 30, 1998; provided that the terminating party is not then
in material breach of this Agreement and provided further that such delay has
not been caused by regulatory action or inaction, whether by banking
authorities, the Securities and Exchange Commission, or otherwise, beyond the
control of either party. As used in this Section 9.1, actions contemplated as
being taken by Gold or the Company must be taken by their respective Board of
Directors or the Executive Committee of such Board.
9.2 Effect of Termination. In the event of termination of this Agreement for
any reason set forth in Section 9.1, other than a breach thereof, no party
hereto shall have any liability to the other of any nature whatsoever, including
any liability for loss, damages or expenses suffered or claimed to be suffered
by reason thereof.
In the event Gold and Sub have performed all of their obligations hereunder
and all conditions precedent to the obligation of Gold and Sub to close have
been met or waived in writing by Gold and Sub, but Company fails or otherwise
refuses to close, then Gold shall be entitled to enforce the terms hereof by an
action seeking specific performance. Such right is not exclusive and shall not
preclude Gold from also pursuing an action to recover any and all damages
resulting from the Company's default hereunder. All remedies available to Gold
hereunder or by law are cumulative.
In the event Company has performed all of its obligations hereunder and all
conditions precedent to the obligations of Gold and Sub to close have been met
or waived in writing by Gold and Sub, but Gold and Sub fail or otherwise refuse
to close, then Company shall be entitled to enforce the terms hereof by an
action seeking specific performance. Such right is not exclusive and shall not
preclude Company from also pursuing an action to recover any and all damages
resulting from the default by Gold and Sub hereunder. All remedies available to
Company hereunder or by law are cumulative.
9.3 Amendment. This Agreement may be amended by the parties hereto, by
action taken or authorized by their respective Boards of Directors, at any time
before or after approval of the matters presented in connection with the merger
by the stockholders of Company or Sub, but, after any such approval, no
amendment shall be made which by law requires further approval by such
stockholders without such further approval. This Agreement may not be amended
except by an instrument in writing signed on behalf of each of the parties
hereto.
9.4 Extension; Waiver. At any time prior to the Effective Time, the parties
hereto, by action taken or authorized by their respective Board of Directors,
may, to the extent legally allowed, (a) extend the time for the performance of
any of the obligations or other acts of the other parties hereto, (b) waive any
inaccuracies in the representations and warranties contained herein or in any
document delivered pursuant hereto and (c) waive compliance with any of the
agreements or conditions contained herein. Any agreement on the part of a party
hereto to any such extension or waiver shall be valid only if set forth in a
written instrument signed on behalf of such party.
9.5 Indemnification by Company and its Shareholders. Subsequent to the
closing hereof, the Company and each of its shareholders jointly and severally
agree to indemnify and hold harmless Gold, Sub and the officers, shareholders
and directors of each such entity from and against and in respect of any and all
damages, losses, diminution of value, or expenses suffered or incurred by any
such party (whether as a result of third party claims [whether valid or not],
demands, suits, causes of action, proceedings, investigations, judgments or
liabilities or otherwise), including costs of investigation in defense and
reasonable attorneys' fees assessed, incurred or sustained by or against any of
them, with respect to or arising out of any breach of the representations,
warranties and/or covenants of the Company set forth herein and in any other
agreement or instrument executed by the Company in connection herewith. If this
merger is approved by a requisite number of shareholders of Company, then each
and every shareholder of Company shall be deemed to have agreed to this
indemnification whether or not such shareholder dissents to the terms of the
merger, subject to the limitation set forth in Section 9.7 hereinafter.
9.6 Indemnification by Gold. Gold agrees to indemnify, defend and hold
harmless Company and its shareholders from and against and in respect of any and
all damages, losses, diminution of value, or expenses suffered or incurred by
Company (whether as a result of third party claims [whether valid or not],
demands, suits, causes of action, proceedings, investigations, judgments,
liabilities or otherwise), including costs of investigation and defense and
reasonable attorneys' fees assessed or incurred or sustained by or against
Company or its shareholders, with respect to or arising out of any breach of the
representations, warranties and covenants of Gold and Sub set forth herein and
in any other agreement or instrument executed by Gold and/or Sub in connection
herewith.
9.7 Limitations on Indemnification. Notwithstanding anything herein
contained to the contrary, no person shall be entitled to indemnification under
the provisions of this Agreement: (i) unless such party shall have given
written notice to the indemnifying party setting forth its claim for
indemnification in reasonable detail, and (ii) to the extent that the aggregate
amount of all indemnification liability under Section 9.5 or Section 9.6, as
applicable, exceeds the sum of the total figure reflected in Clause (i) of
Section 2.2(c).
9.8 Procedure for Indemnification. If a party hereto becomes aware of an
event which gives rise to a claim for indemnification hereunder, such party
shall give the other party prompt notice of any such action, claim, liability,
assessment or notice of deficiency received by such party which might result in
any liability under this provision. To the extent Gold is giving such notice,
notice to Company shall be deemed sufficient to constitute notice to all
shareholders. By execution hereof, Company specifically agrees that it shall
assume all responsibility for communicating receipt of any such notice to the
shareholders of Company. Further, any party who may claim a right of
indemnification hereunder agrees to refrain from paying, settling or
compromising any such claim for which indemnification may be sought without
giving notice of same to the other party. If the other party wishes to contest
or defend such third party claim, then the party against whom the claim was made
shall be obligated to cooperate fully with such party in contesting and
preserving all rights with respect to such contest; provided, however, that if
the other party does not wish to challenge or contest such third party claim,
then the party against whom the claim was being made by settle same on terms and
conditions it deems to be the most favorable it can be obtained and then
inserting the indemnification claim against the other party hereto. When giving
a notice under this provision, a party may specify a time for a response from
the other party as to whether such other party wishes to contest or defend such
third party claim. Such deadline for response may be established consistent with
the facts and circumstances surrounding the situation. Failure of the other
party to respond within such time period shall constitute such other party's
decision not to contest or defend such claim. If a party hereunder claims
indemnification for a claim other than a third party claim, the party seeking
indemnification shall notify the indemnifying party in writing of the basis for
such claim setting forth the nature and amount of the damages resulting from
such claim. To the extent a party is deemed to have ultimately been responsible
for indemnification, then interest shall be deemed to accrue on the unpaid
amount of indemnification obligation at the prime rate of interest announced
from time to time by Exchange National Bank, such interest to be calculated
based on the actual number of days elapsed from the date each indemnification
obligation becomes due and owing until paid in full and based on 365 day year.
ARTICLE X
SECURITIES LAWS MATTER
----------------------
10.1 Shares not Registered. Company acknowledges and agrees that the shares
of Gold Common Stock being delivered as provided hereinabove have not been
registered under the Securities Act and are therefore "Restricted Securities" as
that term is used in Rule 144 under the Securities Act. Accordingly, Company
and each Shareholder of Company acknowledges and agrees that such shares may not
be sold, transferred or otherwise disposed of unless they are subsequently
registered under the Securities Act or an exemption from registration is then
available. The Company and each Shareholder of the Company acknowledges and
agrees that a legend in substantially the following form will be placed on the
certificate or certificates representing the shares of Gold Common Stock being
delivered pursuant hereto:
The shares represented by this certificate have been acquired for
investment and have not been registered under the Securities Act of
1933. Such shares may not be sold or transferred in the absence of
such registration unless the transfer is in accordance with Rule 144
or a similar rule or unless Gold Banc Corporation, Inc. receives an
opinion of counsel reasonably acceptable to it stating that such sale
or
transfer is exempt from the registration and prospectus delivery requirements of
the Securities Act of 1933.
10.2 No Right to Require Registration. Neither the Company nor any
shareholder of the Company shall have a right to require Gold or Sub to register
any of the shares of Gold Common Stock being delivered hereunder.
ARTICLE XI
MISCELLANEOUS
-------------
11.1 Expenses. Each party shall be responsible for its own expenses in
connection with this transaction. Specifically, each party shall be responsible
for its own legal and accounting fees and any related costs or charges
associates with the negotiation, execution and consummation of this Agreement.
However, if either Gold, Sub, Company or Bank pays any other expense payable by
the shareholders of Company hereunder, then such shareholders agree to reimburse
Gold, Sub, Company or Bank, as the case may be.
11.2 Parties in Interest. This Agreement and the rights hereunder are not
assignable unless such assignment is consented to in writing by all parties
hereto. Except as otherwise expressly provided herein, all of the terms and
provisions of this Agreement shall be binding upon, shall inure to the benefit
of and shall be enforceable by the respective heirs, beneficiaries, personal and
legal representatives, successors and permitted assigns of the parties hereto.
11.3 Entire Agreement, Amendments, Waiver. This Agreement contains the
entire understanding of Gold, Sub and Company with respect to the Merger and
supersedes all prior agreements and understandings, whether written or oral,
between them with respect to the Merger contemplated herein. This Agreement may
be amended only by a written instrument duly executed by the parties or their
respective successors or permitted assigns. Any condition to a party's
obligation hereunder may be waived by such party in writing.
11.4 Notices. All notices, requests, demands or other communications
hereunder shall be in writing and shall be deemed to have been duly given when
personally delivered or transmitted by telefacsimile with a copy thereof
transmitted by a nationally recognized overnight delivery service or deposited
in the United States mail, certified or registered, return receipt requested,
postage prepaid, addressed to the parties at the following addresses or at such
other address as shall be given in like manner by any party to the other:
If to Company: Xx. Xxx X. Xxxx
Northwest Bancshares, Inc.
0000 X. 0xx Xxxxxx
X.X. Xxx 000
Xxxxx, XX 00000
Telephone: (000) 000-0000
FAX: (000) 000-0000
with a copy to: Xx. Xxxxxxx X. Xxxxx
XXXXX & ELAND
000 Xxxxxxxx Xxxxxx
X.X. Xxx 000
Xxxxx, XX 00000-0000
Telephone: (000) 000-0000
FAX: (000) 000-0000
If to Gold: Xx. Xxxxxxx X. Xxxxxxx
Gold Banc Corporation, Inc.
00000 Xxxx Xxxxxx
Xxxxxxx, XX 00000
Telephone: (000) 000-0000
FAX: (000) 000-0000
with a copy to: Xxxxxx X. Xxxxx
Xxxxx & Xxxxx, Chartered
X.X. Xxx 00000
Xxxxxxxx Xxxx, XX 00000
Telephone: (000) 000-0000
FAX: (000) 000-0000
11.5 Law Governing. This Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of Kansas.
11.6 Further Acts. Gold, Company and Sub agree to execute and deliver on or
before the Closing Date such other documents, certificates, agreements or other
writings and take such other actions as may be necessary or desirable in order
to consummate or implement expeditiously the transactions contemplated by this
Agreement.
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of
the date first above written.
GOLD BANC CORPORATION, INC.
By /s/ Xxxxxxx X. Xxxxxxx
------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: President and Chief Executive
Officer
ATTEST:
/s/ Xxxxx X. Xxxxxxx
--------------------------
Name: Xxxxx X. Xxxxxxx
Title: Secretary
GOLD BANC ACQUISITION CORPORATION
VI, INC.
By /s/ Xxxxxxx X. Xxxxxxx
--------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: President and Chief Executive Officer
ATTEST:
/s/ Xxxxx X. Xxxxxxx
--------------------
Name: Xxxxx X. Xxxxxxx
Title: Secretary
NORTHWEST BANCSHARES, INC.
By /s/ Xxx X. Xxxx
-------------------------
Name: Xxx X. Xxxx
Title: President
ATTEST:
/s/ Xxxxx Xxxxxxxxxxx
---------------------
Name: Xxxxx Xxxxxxxxxxx
Title: Secretary
ACKNOWLEDGMENT
--------------
STATE OF Kansas )
-----------------------------------
) ss.
COUNTY OF Xxxxxxx )
-----------------------------------
ON THIS __14th___day of ___May__, 1998, before me the undersigned, a Notary
Public in and for the County and State aforesaid, came Xxxxxxx X. Xxxxxxx,
President and Chief Executive Officer of Gold Banc Corporation, Inc., a Kansas
corporation, and Xxxxx X. Xxxxxxx, Secretary, who are personally known to me to
be such persons, and who is personally known to me to be the same persons who
executed the within instrument on behalf of said corporation, and such persons
duly acknowledged the execution of the same to be the act and deed of said
corporation.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal,
the day and year last above written.
Xxxxxx X. Xxxxxx
------------------------------------
NOTARY PUBLIC
My Appointment Expires:
10-1-2000
-----------------------
ACKNOWLEDGMENT
--------------
STATE OF Kansas )
-----------------------------------
) ss.
COUNTY OF Xxxxxxx )
---------------------------------
ON THIS 14th day of May, 1998, before me the undersigned, a Notary Public in
and for the County and State aforesaid, came Xxxxxxx X. Xxxxxxx, President and
Chief Executive Officer of Gold Banc Acquisition Corporation III, Inc., a Kansas
corporation, and Xxxxx X. Xxxxxxx, Secretary, who are personally known to me to
be such persons, and who is personally known to me to be the same persons who
executed the within instrument on behalf of said corporation, and such persons
duly acknowledged the execution of the same to be the act and deed of said
corporation.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal,
the day and year last above written.
Xxxxxx X. Xxxxxx
-------------------------------------
NOTARY PUBLIC
My Appointment Expires:
Oct. 1, 2000
--------------------------
ACKNOWLEDGMENT
--------------
STATE OF Kansas )
-----------------------------------
) ss.
COUNTY OF Xxxxxx )
---------------------------------
ON THIS 14th day of May, 1998, before me the undersigned, a Notary Public in
and for the County and State aforesaid, came Xxx X. Xxxx, President of Northwest
Bancshares, Inc., a Kansas corporation, and __Penny Christensen_____, Secretary,
who are personally known to me to be such persons, and who is personally known
to me to be the same persons who executed the within instrument on behalf of
said corporation, and such persons duly acknowledged the execution of the same
to be the act and deed of said corporation.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal,
the day and year last above written.
/s/ Xxxxxx Xxxxxxxxxxx
----------------------------------
NOTARY PUBLIC
My Appointment Expires:
11-14-98
--------------------
The undersigned represent all of the Board of Directors of Northwest Bancshares,
Inc. and hereby evidence their approval of this Agreement and Plan of
Reorganization.
/s/ Xxx X. Xxxx
------------------------------
Xxx X. Xxxx, Director
/s/ Xxxxxxx X. Xxxxx
------------------------------
Xxxxxxx X. Xxxxx, Director
/s/ Xxxxxx Xxxxxxxxxx
------------------------------
Xxxxxx Xxxxxxxxxxx, Director
/s/ Xxxxxx X. Xxxxxxx
------------------------------
Xxxxxx X. Xxxxxxx, Director
/s/ Xxxxx Xxxx
------------------------------
Xxxxx Xxxx, Director