Exhibit
99.1
EXECUTION
COPY
AGREEMENT AND PLAN
OF MERGER
BETWEEN
UNITED HERITAGE BANKSHARES OF FLORIDA, INC.
AND
MARSHALL & ILSLEY CORPORATION
Dated as of
December 1, 2006
Table of
Contents
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Page
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ARTICLE I — THE MERGER
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1
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1.1
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The
Merger
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1
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1.2
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The
Closing; Effective Time
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2
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1.3
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Effect of the Merger
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2
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1.4
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Articles of Incorporation; By-Laws
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2
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1.5
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Directors and Officers
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2
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1.6
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Conversion of Securities; Dissenting Shares
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3
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1.7
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Exchange of Certificates
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4
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1.8
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Stock Transfer Books
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6
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1.9
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Company Common Stock
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6
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1.10
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Adjustments for Dilution and Other Matters
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6
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ARTICLE II — REPRESENTATIONS AND WARRANTIES OF
SELLER
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6
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2.1
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Organization and Qualification; Subsidiaries
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7
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2.2
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Articles of Incorporation and By-Laws
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8
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2.3
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Capitalization
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8
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2.4
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Authority
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9
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2.5
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No
Conflict; Required Filings and Consents
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9
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2.6
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Compliance; Permits
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10
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2.7
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Securities and Banking Reports; Financial Statements
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10
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2.8
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Absence of Certain Changes or Events
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13
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2.9
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Absence of Proceedings and Orders
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14
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2.10
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Employee Benefit Plans
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15
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2.11
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Registration Statement; Proxy Statement/Prospectus
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17
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2.12
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Title to Property
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18
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2.13
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Environmental Matters
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18
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2.14
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Absence of Agreements
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19
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2.15
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Taxes
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19
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2.16
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Insurance
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20
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2.17
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Brokers
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20
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2.18
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Tax
Matters
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20
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2.19
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Seller Material Adverse Effect
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20
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2.20
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Material Contracts
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21
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2.21
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Opinion of Financial Advisor
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21
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2.22
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Vote
Required
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21
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2.23
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Stock Options
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21
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ARTICLE III — REPRESENTATIONS AND WARRANTIES OF THE
COMPANY
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21
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3.1
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Organization and Qualification; Subsidiaries
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21
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3.2
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Articles of Incorporation and By-Laws
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22
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3.3
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Capitalization
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22
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3.4
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Authority
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23
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3.5
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No
Conflict; Required Filings and Consents
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23
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3.6
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Compliance; Permits
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24
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3.7
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Securities and Banking Reports; Financial Statements
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24
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3.8
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Absence of Certain Changes or Events
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26
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3.9
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Absence of Proceedings and Orders
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26
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3.10
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Registration Statement; Proxy Statement/Prospectus
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27
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3.11
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Title to Property
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28
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3.12
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Brokers
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28
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3.13
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Tax
Matters
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28
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3.14
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Company Material Adverse Effect
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28
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ARTICLE IV — COVENANTS OF SELLER
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28
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4.1
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Affirmative Covenants
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28
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4.2
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Negative Covenants
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29
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4.3
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Letter of Seller’s Accountants
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32
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4.4
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No
Solicitation of Transactions
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32
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4.5
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Update Disclosure; Breaches
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35
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4.6
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Affiliates; Tax Treatment
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35
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4.7
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Delivery of Stockholder List
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35
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4.8
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Loan
and Investment Policies
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36
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4.9
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Access and Information
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36
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4.10
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Confidentiality Agreement
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36
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ARTICLE V — COVENANTS OF THE COMPANY
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37
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5.1
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Affirmative Covenants
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37
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5.2
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Negative Covenants
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37
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5.3
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Breaches
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37
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5.4
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Stock Exchange Listing
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37
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5.5
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Tax
Treatment
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37
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5.6
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Confidentiality Agreement
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38
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5.7
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Stock Options
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38
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ARTICLE VI — ADDITIONAL AGREEMENTS
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38
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6.1
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Proxy Statement/Prospectus; Registration Statement
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38
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6.2
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Meeting of Seller’s Stockholders
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39
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6.3
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Appropriate Action; Consents; Filings
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39
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6.4
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Employee Benefit Matters
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40
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6.5
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Directors’ and Officers’ Indemnification and
Insurance
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40
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6.6
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Notification of Certain Matters
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41
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6.7
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Public Announcements
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41
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6.8
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Customer Retention
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41
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ARTICLE VII — CONDITIONS OF MERGER
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42
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7.1
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Conditions to Obligation of Each Party to Effect the Merger
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42
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7.2
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Additional Conditions to Obligations of the Company
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43
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7.3
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Additional Conditions to Obligations of the Seller
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45
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ARTICLE VIII — TERMINATION, AMENDMENT AND WAIVER
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46
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8.1
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Termination
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46
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8.2
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Notice of Termination; Effect of Termination
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49
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8.3
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Fees
and Expenses
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49
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8.4
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Waiver
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50
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ARTICLE IX — GENERAL PROVISIONS
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50
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9.1
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Non-Survival of Representations, Warranties and Agreements
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50
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9.2
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Notices
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51
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9.3
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Certain Definitions
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52
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9.4
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Headings
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55
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9.5
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Severability
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55
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9.6
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Entire Agreement
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55
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9.7
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Assignment
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55
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9.8
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Parties in Interest
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55
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9.9
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Governing Law
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56
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9.10
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Counterparts
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56
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9.11
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Time
is of the Essence
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56
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9.12
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Specific Performance
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56
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9.13
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Interpretation
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56
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ANNEX A
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EMPLOYEE BENEFIT MATTERS
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ANNEX B
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NON-EMPLOYEE DIRECTORS, BANK DIRECTORS, EXECUTIVE OFFICERS AND KEY
MANAGEMENT EMPLOYEES
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ANNEX C
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FORM
OF OPINION OF COUNSEL TO SELLER
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ANNEX D
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FORM
OF OPINION OF COUNSEL TO COMPANY
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EXHIBIT 1.1
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PLAN
OF MERGER
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EXHIBIT 4.6
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AFFILIATE LETTER
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EXHIBIT 7.2(c)-1
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FORM
OF RESTRICTIVE COVENANT AGREEMENT (DIRECTORS)
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EXHIBIT 7.2(c)-2
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FORM
OF RESTRICTIVE COVENANT AGREEMENT (EXECUTIVE OFFICERS)
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EXHIBIT 7.2(c)-3
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FORM
OF RESTRICTIVE COVENANT AGREEMENT (KEY EMPLOYEES)
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EXHIBIT 9.3
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INDEX GROUP
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Index of Defined
Terms
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Section
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Affiliates
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9.3
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Bank
Secrecy Act
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2.9(d)
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BHCA
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2.1(a)
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Blue
Sky Laws
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2.5(b)
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Business Days
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9.3
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Certificate
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1.7(b)
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Change of Recommendation
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4.4(c)
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Closing
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1.2(a)
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Closing Date
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1.2(a)
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Closing Market Value
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1.6(d)
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Code
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Preamble
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Company
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Preamble
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Company Approvals
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3.1(a)
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Company By-Laws
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Preamble
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Company Common Stock
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1.6(c)
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Company Disclosure Schedule
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Preamble
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Company Material Adverse Effect
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3.1(c)
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Company Reports
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3.7(a)
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Company’s Board of Directors
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Preamble
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Company Subsidiaries
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3.1(a)
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Company Subsidiary
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3.1(a)
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Consents
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9.3
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Consultant
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7.2(c)
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Contract
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9.3
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Dissenting Shares
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1.6(e)
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Effect
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2.1(d)
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Effective Time
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1.2(b)
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Environmental Claims
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2.13
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ERISA
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2.10(a)
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Exchange Act
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2.5(b)
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Exchange Agent
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1.6(d)
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Exchange Fund
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1.7(a)
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FBCA
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Preamble
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FDIC
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2.1(b)
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Federal Reserve Board
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2.1(a)
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FinCEN
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2.9(d)
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Florida Secretary of State
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1.2(b)
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GAAP
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2.7(b)
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GLB
Act
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2.1(a)
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Governmental Authorities
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1.2(a)
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Hazardous Materials
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2.13
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HSR
Act
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2.5(b)
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Indemnified Parties
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6.5(d)
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IRS
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2.10(a)
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Knowledge
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9.3
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Law
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9.3
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Liens
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9.3
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Merger
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Preamble
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NYSE
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1.6(d)
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OCC
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3.1(a)
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OFAC
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2.9(d)
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Option Plans
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5.7(a)
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Order
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9.3
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OTS
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3.1(a)
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Participation Facility
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2.3
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Patriot Act
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2.9(d)
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Per
Share Consideration
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1.6(c)
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Person
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9.32.1(c)
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Plans
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2.10(a)
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Proceeding
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9.3
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Proxy Statement/Prospectus
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2.11
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Regulatory Authorities
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9.3
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Rights
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9.3
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Sarbanes-Oxley
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2.7(d)
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Section 409A
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2.10(e)
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Securities Act
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2.5(b)
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Seller
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Preamble
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Seller Articles
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Preamble
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Seller By-Laws
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Preamble
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Seller’s Board of Directors
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Preamble
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Seller SEC Documents
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2.7(c)
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Seller Stockholders’ Meeting
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Preamble
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Seller Subsidiaries
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2.1(a)
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Seller Subsidiary
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2.1(a)
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Subsidiary Organizational Documents
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2.2
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Superior Offer
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9.3
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Tax
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2.15
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Taxes
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2.15
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Title IV Plan
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2.10(b)
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WBCL
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Preamble
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AGREEMENT AND PLAN
OF MERGER
AGREEMENT AND PLAN OF
MERGER , dated as of
December 1, 2006 (this “Agreement”), between
UNITED HERITAGE BANKSHARES OF FLORIDA, INC., a Florida corporation
(the “ Seller”), and MARSHALL
& ILSLEY CORPORATION, a Wisconsin corporation (the “
Company”). Capitalized terms
used herein without definition are defined in the Sections of this
Agreement specified in the index of defined terms attached
hereto.
WHEREAS , the Boards of Directors of the Company (the “
Company’s Board of
Directors”) and the Seller (the “ Seller’s Board of
Directors”) have each determined that it is advisable to and
in the best interests of their respective stockholders for the
Seller to merge with and into the Company (the “ Merger”) upon the terms and subject to the
conditions set forth herein and in accordance with the Florida
Business Corporation Act (the “
FBCA”) and the Wisconsin Business Corporation Law (the
“ WBCL”);
WHEREAS , the Company’s Board of Directors and the
Seller’s Board of Directors have each approved the Merger,
upon the terms and subject to the conditions set forth herein, and
approved and adopted this Agreement;
WHEREAS , subsequent to the Seller’s approval of this
Agreement and concurrently with the execution of this Agreement and
as a condition and an inducement to the willingness of the Company
to enter into this Agreement, the Company has entered into a
Stockholder Voting Agreement pursuant to which each stockholder
listed on Schedule I to such Stockholder Voting Agreement has
agreed to vote the shares of the Seller Common Stock beneficially
owned by such stockholder in favor of the Merger; and
WHEREAS , for federal income tax purposes, it is intended
that the Merger shall qualify as a reorganization under the
provisions of Section 368 of the Internal Revenue Code of 1986, as
amended (the “ Code”), and this
Agreement shall constitute the plan of reorganization.
NOW , THEREFORE , in consideration of the
foregoing premises and the representations, warranties and
agreements contained herein, and subject to the terms and
conditions set forth herein, the parties hereto hereby agree as
follows:
ARTICLE I — THE MERGER
1.1
The Merger . Upon the terms and subject to the conditions
set forth in this Agreement, and in accordance with the FBCA, the
WBCL and the Plan of Merger attached hereto as
Exhibit 1.1 , at the Effective Time the Seller
shall be merged with and into the Company. As a result of the
Merger, the separate corporate existence of the Seller shall cease
and the Company shall continue as the surviving corporation of the
Merger (the “Surviving Corporation”).
1.2
The Closing; Effective Time
.
(a)
The closing of the Merger and the
transactions contemplated hereby (the “ Closing”) shall be held at such time, date
(the “ Closing Date”) and
location as may be mutually agreed by the parties. In the
absence of such agreement, the Closing shall be held at the offices
of Godfrey & Kahn, S.C., 780 North Water Street, Milwaukee,
Wisconsin, commencing at 9:00 a.m., Milwaukee time, on a date
specified by either party upon five (5)
Business Days’ written notice (or, at the election of the
Company, on the last Business Day of the month) after the last to
occur of the following events: (a) receipt of all Consents of
Governmental Authorities legally required to consummate the Merger
and the expiration of all statutory waiting periods applicable to
the Merger and the other transactions contemplated hereby; and (b)
approval of this Agreement and the Merger by the Seller’s
stockholders in the manner contemplated by Section 6.2.
Scheduling or commencing the Closing shall not constitute a
waiver of the conditions set forth in Article VII by either the
Company or the Seller.
(b)
As promptly as practicable after the
Closing, the parties hereto shall cause the Merger to be
consummated by filing articles of merger, as necessary, and any
other required documents, with the Secretary of State of the State
of Florida (the “
Florida Secretary of State”) and the Department of Financial
Institutions of the State of Wisconsin (the “DFI”), in
such form as required by, and executed in accordance with the
relevant provisions of, the FBCA and the WBCL (the effective date
and time of such filing or such date and time as the Company and
the Seller shall agree and specify in the articles of merger are
referred to herein as the “
Effective Time”).
1.3
Effect of the Merger
. At the Effective Time, the effect
of the Merger shall be as provided in this Agreement and the
applicable provisions of the FBCA and the WBCL. Without
limiting the generality of the foregoing, and subject thereto, at
the Effective Time, except as otherwise provided herein, all of the
property, rights, privileges, powers and franchises of the Company
and the Seller shall vest in the Surviving Corporation, and all
debts, liabilities and duties of the Company and the Seller shall
become the debts, liabilities and duties of the Surviving
Corporation.
1.4
Articles of Incorporation;
By-Laws . At the
Effective Time, the Company’s Articles of Incorporation, as
amended or restated (the “
Company Articles”), and the Company’s By-Laws, as
amended or restated (the “
Company By-Laws”), as in effect immediately prior to the
Effective Time, shall be the Articles of Incorporation and the
By-Laws of the Surviving Corporation.
1.5
Directors and Officers
. At the Effective Time, the
directors of the Company immediately prior to the Effective Time
shall be the initial directors of the Surviving Corporation, each
to hold office in accordance with the Articles of Incorporation and
By-Laws of the Surviving Corporation and to be assigned to the
class previously assigned. At the Effective Time, the
officers of the Company immediately prior to the Effective Time
shall be the initial officers of the Surviving Corporation, in each
case until their respective successors are duly elected or
appointed.
1.6
Conversion of Securities; Dissenting
Shares .
(a)
Subject to Section 1.6(d) regarding
fractional shares, at the Effective Time, by virtue of the Merger
and without action on the part of the Company or the Seller, each
share of the common stock, $.01 par value, of the Seller
(“Seller Common Stock”), issued and outstanding
immediately prior to the Effective Time, other than (i) shares of
Seller Common Stock held in the treasury of the Seller, (ii) shares
of Seller Common Stock owned by the Company or any Company
Subsidiary for its own account, and (iii) Dissenting Shares, shall
cease to be outstanding and shall be converted into the right to
receive the Per Share Consideration. For purposes hereof,
“Shares” shall mean all shares of Seller Common Stock
issued and outstanding other than those shares of Seller Common
Stock described in clauses (i), (ii) and (iii), above.
(b)
Each share of Seller Common Stock held by
the Seller as treasury stock and each share held by the Company or
any Company Subsidiary for its own account immediately prior to the
Effective Time shall be canceled and extinguished without any
conversion thereof as provided in this Section 1.6.
(c)
For purposes of this Agreement, “
Per Share Consideration”
means .8740 of a share of common stock, $1.00 par value, of the
Company (“ Company Common
Stock”).
(d)
No fractional shares of Company Common
Stock shall be issued in the Merger. In lieu of a fractional
share of Company Common Stock, the holder of any Shares who would
otherwise be entitled to receive such fractional share (after
taking into account all Shares delivered by such holder) shall be
entitled to receive a cash payment, without interest and rounded up
to the nearest whole cent, in an amount determined by multiplying
the Closing Market Value by the fraction of a share of Company
Common Stock to which the holder would otherwise have been
entitled. For purposes hereof, the “ Closing Market Value” means the
closing price per share of the Company Common Stock on the New York
Stock Exchange (the “ NYSE”) on the
trading day immediately preceding the Effective Time (as reported
in an authoritative source). As promptly as practicable after
the determination of the amount of cash, if any, to be paid to
holders of fractional share interests, the bank or trust company
designated by the Company as the exchange agent (the “
Exchange Agent”) shall so notify
the Company, and the Company shall deposit that amount with the
Exchange Agent and shall cause the Exchange Agent to forward
payments to the holders of fractional share interests, subject to
and in accordance with the terms of this
Section 1.6.
(e)
Notwithstanding anything in this
Agreement to the contrary, shares of Seller Common Stock which are
issued and outstanding immediately prior to the Effective Time and
which are held by stockholders who have validly exercised
dissenter’s rights available under Section 607.1302 of the
FBCA (the “ Dissenting
Shares”) shall not be converted into or be exchangeable for
the right to receive the Per Share Consideration in accordance with
this Section 1.6, unless and until such holders shall have
failed to perfect or shall have effectively withdrawn or lost their
dissenter’s rights under the FBCA. Dissenting Shares
shall be treated in accordance with Section 607.1302 of the FBCA,
if and to the extent applicable. If any such holder shall
have failed to perfect or shall have effectively withdrawn or lost
such dissenter’s rights, such holder’s shares of Seller
Common Stock shall thereupon be converted into and become
exchangeable only for the right to receive, as of the Effective
Time, the Per Share Consideration in accordance with this
Section 1.6. The Seller shall give the Company (a)
prompt notice of each and every notice of a stockholder’s
intent to demand payment for the stockholder’s shares of
Seller Common Stock, attempted withdrawals of such demands, and any
other instruments served pursuant to the FBCA and received by the
Seller relating to rights to be paid the “fair value”
of Dissenting Shares, as provided in Section 607.1302 of the FBCA
and (b) the opportunity to direct all negotiations and Proceedings
with respect to demands for appraisal under the FBCA. The
Seller shall not, except with the prior written consent of the
Company, voluntarily make any payment with respect to, offer to
settle or settle, or approve any withdrawal of any demands for
“fair value” under Section 607.1302 of the
FBCA.
1.7
Exchange of Certificates
.
(a)
Exchange Agent . The Company shall deposit, or shall cause to
be deposited, from time to time, with the Exchange Agent, for the
benefit of the holders of Shares, for exchange in accordance with
this Article I, through the Exchange Agent, the Per Share
Consideration, together with any dividends or distributions with
respect thereto, if any, to be paid and issued in exchange for
Shares pursuant to this Article I (the “ Exchange Fund”). Such deposits
shall be made after the Effective Time as requested by the Exchange
Agent in order for the Exchange Agent to promptly deliver the Per
Share Consideration.
(b)
Exchange Procedures
. As soon as reasonably practicable
after the Effective Time but in any event no more than five (5)
Business Days thereafter, the Exchange Agent shall mail to each
holder of record of a certificate representing ownership of Shares
(a “ Certificate” or
“Certificates”) whose Shares were converted into the
right to receive the Per Share Consideration pursuant to
Section 1.6, (i) a letter of transmittal (which shall specify
that delivery shall be effected, and risk of loss and title to the
Certificates shall pass, only upon delivery of the Certificates to
the Exchange Agent and shall be in such form and have such other
provisions as the Company may reasonably specify) and (ii)
instructions for use in effecting the surrender of the Certificates
in exchange for the Per Share Consideration. Upon surrender
of a Certificate for cancellation to the Exchange Agent together
with such letter of transmittal, duly executed, the holder of such
Certificate shall be entitled to receive in exchange therefor the
Per Share Consideration and any unpaid dividends and distributions
thereon as provided in this Article I, which such holder has the
right to receive in respect of the Certificate surrendered pursuant
to the provisions of this Article I (after taking into account all
Shares then held by such holder), and the Certificate so
surrendered shall forthwith be canceled. In the event of a
transfer of ownership of Shares which is not registered in the
transfer records of the Seller, a transferee may exchange the
Certificate representing such Shares for the Per Share
Consideration and any unpaid dividends and distributions thereon as
provided in this Article I if the Certificate representing such
Shares is presented to the Exchange Agent, accompanied by all
documents required to evidence and effect such transfer, and by
evidence that any applicable stock transfer taxes have been paid.
In the event any Certificate shall have been lost, stolen or
destroyed, upon the making of an affidavit of that fact by the
Person claiming such Certificate to be lost, stolen or destroyed
and the posting by such Person of a bond in such amount as the
Company may direct as indemnity against any claim that may be made
against it or the Exchange Agent with respect to such Certificate,
the Exchange Agent will pay and issue in exchange for such lost,
stolen or destroyed Certificate the Per Share Consideration and any
unpaid dividends and distributions thereon as provided in this
Article I, which such holder would have had the right to receive in
respect of such lost, stolen or destroyed Certificate. Until
surrendered as contemplated by this Section 1.7, each
Certificate (other than Certificates representing Shares owned by
the Company or any Company Subsidiary and Certificates representing
Dissenting Shares) shall be deemed at any time after the Effective
Time to represent only the right to receive upon such surrender the
Per Share Consideration and any unpaid dividends and distributions
thereon as provided in this Article I.
(c)
Dividends and Distributions with
Respect to Unexchanged Shares . No dividends or other distributions declared
or made after the Effective Time with respect to Company Common
Stock with a record date after the Effective Time shall be paid to
the holder of any unsurrendered Certificate with respect to the
shares of Company Common Stock represented thereby, and no cash
payment in lieu of fractional shares shall be paid to any such
holder pursuant to Section 1.6(d), until the holder of such
Certificate shall surrender such Certificate. Subject to the
effect of applicable Laws, following surrender of any such
Certificate, there shall be paid to the holder of the certificates
representing whole shares of Company Common Stock issued in
exchange therefor, without interest, (i) promptly, the amount of
any cash payable with respect to a fractional share of Company
Common Stock to which such holder is entitled pursuant to
Section 1.6(d) and the amount of dividends or other
distributions with a record date after the Effective Time
theretofore paid with respect to such whole shares of Company
Common Stock, and (ii) at the appropriate payment date, the amount
of dividends or other distributions, with a record date after the
Effective Time but prior to surrender and a payment date occurring
after surrender, payable with respect to such whole shares of
Company Common Stock.
(d)
No Further Rights in the
Shares . The Per Share
Consideration issued and paid upon conversion of the Shares in
accordance with the terms hereof shall be deemed to have been
issued and paid in full satisfaction of all rights pertaining to
such Shares.
(e)
Termination of Exchange
Fund . Any portion of
the Exchange Fund which remains undistributed to the former
stockholders of the Seller for six (6) months after the Effective
Time shall be delivered to the Company, upon demand, and any former
stockholders of the Seller who have not theretofore complied with
this Article I shall thereafter look only to the Company to claim
the Per Share Consideration, any cash in lieu of fractional shares
of Company Common Stock and any dividends or distributions with
respect to Company Common Stock, in each case without interest
thereon, and subject to Section 1.7(g). Any portion of
the Exchange Fund remaining unclaimed by holders of Shares as of a
date which is immediately prior to such time as such amounts would
otherwise escheat to or become property of any United States
federal, state or local or any foreign government, or political
subdivision thereof, or any multinational organization or authority
or any authority, agency or commission entitled to exercise any
administrative, executive, judicial, legislative, police,
regulatory (including, without limitation, any Regulatory
Authority) or taxing authority or power, any court or tribunal (or
any department, bureau or division thereof), or any arbitrator or
arbitral body (each a “
Governmental Authority”), shall, to the extent permitted by
applicable Law, become the property of the Surviving Corporation
free and clear of any claims or interest of any Person previously
entitled thereto.
(f)
No Liability . Neither the Company nor the Seller shall be
liable to any former holder of Shares for any such Shares (or
dividends or distributions with respect thereto) or cash or other
payment delivered to a Governmental Authority pursuant to any
abandoned property, escheat or similar Laws.
(g)
Withholding Rights
. Each of the Company and the
Exchange Agent shall be entitled to deduct and withhold from the
consideration otherwise payable pursuant to this Agreement to any
former holder of Shares such amounts as it is required to deduct
and withhold with respect to the making of such payment under any
Laws relating to Taxes and pay such withholding amount over to the
appropriate Governmental Authority. To the extent that
amounts are so withheld by the Company or the Exchange Agent, such
withheld amounts shall be treated for all purposes of this
Agreement as having been paid to the former holder of the Shares in
respect of which such deduction and withholding was made by the
Company or the Exchange Agent, as the case may be.
1.8
Stock Transfer Books
. At the Effective Time, the stock
transfer books of the Seller shall be closed and there shall be no
further registration of transfers of shares of the Seller Common
Stock thereafter on the records of the Seller. From and after
the Effective Time, the holders of Certificates outstanding
immediately prior to the Effective Time shall cease to have any
rights with respect to such Shares except as otherwise provided
herein or by Law. On or after the Effective Time, any
Certificates presented to the Exchange Agent or the Company for any
reason shall be converted into the Per Share Consideration in
accordance with this Article I, subject to applicable Law in the
case of Dissenting Shares.
1.9
Company Common Stock
. The shares of Company Common
Stock issued and outstanding immediately prior to the Effective
Time shall be unaffected by the Merger and at the Effective Time,
such shares shall remain issued and outstanding.
1.10
Adjustments for Dilution and Other
Matters . If prior to
the Effective Time the Company shall declare a stock dividend or
other distribution in property other than cash upon, or subdivide,
split-up, reclassify or combine, Company Common Stock or declare a
dividend or make a distribution on Company Common Stock in any
security convertible into Company Common Stock, an appropriate
adjustment or adjustments will be made to the Per Share
Consideration to be issued for each of the Shares to be converted
pursuant to Section 1.6. For the avoidance of doubt, no
adjustment or adjustments will be made to the Per Share
Consideration as a result of any cash dividends or cash
distributions declared or paid by the Company.
ARTICLE II — REPRESENTATIONS AND WARRANTIES
OF SELLER
Except as disclosed in the disclosure
schedule delivered by the Seller to the Company prior to the
execution of this Agreement (the “ Seller Disclosure Schedule”),
which shall set forth items of disclosure with specific reference
to the particular Section or subsection of this Agreement to which
the information in the Seller Disclosure Schedule relates, the
Seller hereby represents and warrants to the Company as
follows:
2.1
Organization and Qualification;
Subsidiaries .
(a)
The Seller is a corporation duly
organized, validly existing and in good standing under the Laws of
the State of Florida and a registered bank holding company under
the Bank Holding Company Act of 1956 and the regulations
promulgated thereunder, as amended (the “
BHCA”). The Seller is subject to regulation by the
Board of Governors of the Federal Reserve System (the “
Federal Reserve Board”).
The Seller is not a financial holding company under the
Graham-Leach-Bliley Act of 1999 and the regulations promulgated
thereunder, as amended (the “ GLB
Act”). Each subsidiary of the Seller (a “
Seller Subsidiary,” or
collectively the “ Seller
Subsidiaries”) is a state banking association, corporation,
limited liability company, limited partnership or trust duly
organized, validly existing and in good standing under the Laws of
the state of its incorporation or organization. Each of the
Seller and the Seller Subsidiaries has the requisite power and
authority to own, lease and operate the properties it now owns or
holds under lease and to carry on its business as it is now being
conducted, is duly qualified or licensed as a foreign business
entity to do business, and is in good standing, in each
jurisdiction where the character of the properties owned, leased or
operated by it or the nature of its business makes such
qualification or licensing necessary, except for such jurisdictions
in which the failure to be so qualified or licensed would not have
a Seller Material Adverse Effect.
(b)
Each of the Seller and the Seller
Subsidiaries has all Consents and Orders (“Seller
Approvals”) necessary to own, lease and operate its
properties and to carry on its business as it is now being
conducted, including all required authorizations from the Federal
Reserve Board, the Federal Deposit Insurance Corporation (the
“ FDIC”) and the Florida Office of
Financial Regulation, and neither the Seller nor any Seller
Subsidiary has received any notice of any Proceedings relating to
the revocation or modification of any Seller Approvals.
(c)
A true and complete list of the Seller
Subsidiaries, together with (i) the Seller’s percentage
ownership of each Seller Subsidiary and (ii) Laws under which the
Seller Subsidiary is incorporated or organized, is set forth in the
Seller Disclosure Schedule. The Seller or one or more of the
Seller Subsidiaries owns beneficially and of record all of the
outstanding shares of capital stock or other equity interests of
each of the Seller Subsidiaries. Except for the Seller
Subsidiaries, the Seller does not directly or indirectly own any
capital stock or equity interest in, or any interests convertible
into or exchangeable or exercisable for any capital stock or equity
interest in, any corporation, partnership, joint venture or other
business association or other Person, other
than in the ordinary course of business and in no event in excess
of 5% of the outstanding equity securities of such
Person.
(d)
As used in this Agreement, the term
“Seller Material Adverse Effect” means any effect,
change, event, fact, condition, occurrence or development (each an
“ Effect”) that, individually or
in the aggregate with other Effects, (i) is material and adverse to
the business, assets, liabilities, results of operations or
financial condition of the Seller and the Seller Subsidiaries taken
as a whole, and/or (ii) materially impairs the ability of the
Seller to consummate the transactions contemplated hereby;
provided , however , that the term “ Seller Material Adverse
Effect” shall not be deemed to include the impact of:
(a) any Effect to the extent resulting from the announcement
of this Agreement or the transactions contemplated hereby, (b) any
action taken or not taken by the Seller or the Seller Subsidiaries
in accordance with the terms and covenants contained in this
Agreement, (c) any changes in Laws or interpretations thereof that
are generally applicable to the banking industry, (d) changes in
GAAP that are generally applicable to the banking industry, (e)
expenses reasonably incurred in connection with the transactions
contemplated hereby, (f) changes attributable to or resulting from
changes in general economic conditions affecting the banking
industry generally, or (g) the payment of any amounts due to, or
the provision of any other benefits to, any officers or employees
under employment Contracts, non-competition agreements, employee
benefit plans, severance agreements or other arrangements in
existence as of the date of or contemplated by this Agreement, in
each case only if disclosed in Section 2.1(d) of the Seller
Disclosure Schedule, provided that the payment of any such amounts
or the provision of any such benefits shall be made in the ordinary
course consistent with past practices or paid in accordance with
such Contracts, agreements, plans or arrangements.
(e)
The minute books of the Seller and each
of the Seller Subsidiaries contain true, complete and accurate
records of all material matters discussed, considered and/or
approved at all meetings of, and all corporate actions taken by,
their respective stockholders and Boards of Directors (including
committees of their respective Boards of Directors).
2.2
Articles of Incorporation and
By-Laws . The Seller has
heretofore furnished or made available to the Company a complete
and correct copy of the Seller’s Articles of Incorporation
and the Seller’s By-Laws, each as amended or restated (the
“ Seller Articles” and
the “ Seller By-Laws,”
respectively), and the Articles of Incorporation and the By-Laws,
or other organizational documents, as the case may be, of each
Seller Subsidiary, each as amended or restated (the “
Subsidiary
Organizational Documents”). The Seller Articles, the
Seller By-Laws and the Subsidiary Organizational Documents are in
full force and effect. Neither the Seller nor any Seller
Subsidiary is in breach of any of the provisions of the Seller
Articles, the Seller By-Laws or the Subsidiary Organizational
Documents.
2.3
Capitalization . The authorized capital stock of the Seller
consists of 20,000,000 shares of Seller Common Stock and 3,000,000
shares of preferred stock, par value $.01 per share, none of which
shares of preferred stock are outstanding as of the date of this
Agreement. As of the date of this Agreement, (i) 4,953,615
shares of Seller Common Stock are issued and outstanding, all of
which are duly authorized, validly issued, fully paid and
non-assessable, and not issued in violation of any preemptive right
of any Seller stockholder, (ii) no shares of Seller Common Stock
are held in the treasury of the Seller, and (iii) 640,303 shares of
Seller Common Stock are subject to outstanding Options issued
pursuant to the Option Plans. Except as set forth in
clause (iii), above, there are no outstanding Rights relating
to the issued or unissued capital stock of the Seller, any Seller
Subsidiary or obligating the Seller or any Seller Subsidiary to
issue or sell any shares of capital stock or other securities of or
in the Seller or any Seller Subsidiary. Each Option (a) was
granted in compliance with all applicable Laws and all of the terms
and conditions of the Option Plan pursuant to which it was issued,
(b) has an exercise price per share of Seller Common Stock equal to
or greater than the fair market value of such share at the close of
business on the date of such grant, (c) has a grant date identical
to the date on which the Seller’s Board of Directors or any
committee thereof actually awarded such Option, and (d) qualifies
for the tax and accounting treatment afforded to such Option as
reflected in the Seller’s Tax Returns and the Seller’s
financial statements. There are no obligations, contingent or
otherwise, of the Seller or any Seller Subsidiary to repurchase,
redeem or otherwise acquire any shares of Seller Common Stock or
the capital stock of any Seller Subsidiary or to provide funds to
or make any investment (in the form of a loan, capital contribution
or otherwise) in any Seller Subsidiary or any other Person, except
for loan commitments and other funding obligations entered into in
the ordinary course of business. Neither the Seller nor any
Seller Subsidiary has repurchased, redeemed or otherwise acquired
any of its shares of capital stock since December 31, 2005.
Each of the outstanding shares of capital stock of each
Seller Subsidiary is duly authorized, validly issued, fully paid
and non-assessable, and not issued in violation of any preemptive
rights of any Seller Subsidiary stockholder or other equity holder,
and such shares owned by the Seller are owned free and clear of all
limitations of the Seller’s voting rights and Liens whatsoever.
2.4
Authority . The Seller has the requisite corporate power
and authority to execute and deliver this Agreement, to perform its
obligations hereunder and to consummate the transactions
contemplated hereby (other than, with respect to the Merger, the
approval and adoption of this Agreement by the Seller’s
stockholders in accordance with the FBCA, the Seller Articles and
the Seller By-Laws). The execution and delivery of this
Agreement by the Seller and the consummation by the Seller of the
transactions contemplated hereby have been duly and validly
authorized by all necessary corporate action on the part of the
Seller, including, without limitation, the Seller’s Board of
Directors (other than, with respect to the Merger, the approval and
adoption of this Agreement by the Seller’s stockholders in
accordance with the FBCA, the Seller Articles and the Seller
By-Laws). As of the date of this Agreement, the
Seller’s Board of Directors, at a meeting duly called,
constituted and held in accordance with the FBCA and the provisions
of the Seller Articles and the Seller By-Laws, has by the unanimous
vote of all of the members of the Seller’s Board of Directors
determined (a) that this Agreement and the transactions
contemplated hereby, including the Merger, are advisable to, fair
to and in the best interests of the Seller and its stockholders,
(b) to submit this Agreement for approval and adoption by the
stockholders of the Seller and to declare the advisability of this
Agreement, and (c) to recommend that the stockholders of the Seller
adopt and approve this Agreement and the transactions contemplated
hereby, including the Merger, and direct that this Agreement and
the Merger be submitted for consideration by the stockholders of
the Seller at the Seller Stockholders’ Meeting (collectively,
the “Seller’s Board of Directors
Recommendation”). No other corporate proceedings on the
part of the Seller are necessary to authorize this Agreement or to
consummate the transactions contemplated hereby (other than, with
respect to the Merger, the approval and adoption of this Agreement
by the Seller’s stockholders in accordance with the FBCA, the
Seller Articles and the Seller By-Laws). This Agreement has
been duly and validly executed and delivered by, and constitutes a
valid and binding obligation of, the Seller and, assuming due
authorization, execution and delivery by the Company, is
enforceable against the Seller in accordance with its terms, except
as enforcement may be limited by Laws affecting insured depository
institutions, general principles of equity, whether applied in a
court of law or a court of equity, and by bankruptcy, insolvency
and similar Laws affecting creditors’ rights and remedies
generally.
2.5
No Conflict; Required Filings and
Consents .
(a)
The execution and delivery of this
Agreement by the Seller do not, and the performance of this
Agreement and the consummation of the transactions contemplated
hereby by the Seller will not, (i) conflict with or violate the
Seller Articles, the Seller By-Laws or the Subsidiary
Organizational Documents, (ii) conflict with or violate any Laws or
Orders applicable to the Seller or any Seller Subsidiary or by
which its or any of their respective properties is bound or
affected, or (iii) result in any breach of or constitute a default
(or an event that with notice or lapse of time or both would become
a default) under, or give to others any rights of termination,
amendment, acceleration or cancellation of, or result in the
creation of a Lien on any of the properties or assets of the Seller
or any Seller Subsidiary pursuant to, any note, bond, mortgage,
indenture, lease, license, permit, franchise or other Contract to
which the Seller or any Seller Subsidiary is a party or by which
the Seller or any Seller Subsidiary or its or any of their
respective properties is bound or affected. Sections 607.0901
and 607.0902 of the FBCA are inapplicable to the execution,
delivery or performance of this Agreement and the transactions
contemplated hereby, including the Merger. No other
“business combination,” “control share
acquisition,” “fair price” or other anti-takeover
laws or regulations enacted under Florida state law purport to
apply to the execution, delivery or performance of this Agreement
or any of the transactions contemplated hereby, including the
Merger.
(b)
The execution and delivery of this
Agreement by the Seller do not, and the performance of this
Agreement and the consummation of the transactions contemplated
hereby by the Seller will not, require any Consent from, or filing
with or notification to, any Governmental Authority, except for
applicable requirements, if any, of the Securities Act of 1933 and
the regulations promulgated thereunder, as amended (the “
Securities Act”), the Securities
Exchange Act of 1934 and the regulations promulgated thereunder, as
amended (the “ Exchange
Act”), state securities or blue sky laws and the regulations
promulgated thereunder, each as amended (“ Blue Sky Laws”), the BHCA, the banking
laws of the State of Florida and the regulations promulgated
thereunder, as amended, the filing and recordation of appropriate
merger or other documents as required by the FBCA and the WBCL, and
prior notification filings with the Department of Justice under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976 and the
regulations promulgated thereunder, as amended (the “
HSR Act”). Neither the Seller nor
any Seller Subsidiary is subject to any foreign Governmental
Authority or foreign Law.
2.6
Compliance; Permits
. Neither the Seller nor any Seller
Subsidiary is in conflict with, or in default under or violation
of, as applicable, (i) any Law applicable to the Seller or any
Seller Subsidiary or by which its or any of their respective
properties is bound or affected, or (ii) any note, bond, mortgage,
indenture, lease, license, permit, franchise or other Contract to
which the Seller or any Seller Subsidiary is a party or by which
the Seller or any Seller Subsidiary or its or any of their
respective properties is bound or affected, except for any such
conflicts, defaults or violations which would not have a Seller
Material Adverse Effect.
2.7
Securities and Banking Reports;
Financial Statements .
(a)
The Seller and each Seller Subsidiary
have filed all forms, reports and documents required to be filed
with (x) the SEC since December 31, 2003, and, as of the date
of this Agreement, has delivered or made available to the Company
(i) its Annual Reports on Form 10-K for the fiscal years ended
December 31, 2003, 2004 and 2005, respectively, (ii) all proxy
statements relating to the Seller’s meetings of stockholders
(whether annual or special) held since December 31, 2003,
(iii) all Quarterly Reports on Form 10-Q filed by the Seller with
the SEC since December 31, 2003, (iv) all Reports on Form 8-K
filed by the Seller with the SEC since December 31, 2003, (v)
all other reports or registration statements filed by the Seller
with the SEC since December 31, 2003, and (vi) all amendments
and supplements to all such reports and registration statements
filed by the Seller with the SEC since December 31, 2003
(collectively, the “Seller SEC Reports”) and (y) the
Federal Reserve Board, the FDIC, the Florida Office of Financial
Regulation and any other applicable federal or state securities or
banking authorities (all such reports and statements are
collectively referred to as the “Seller Reports”).
The Seller Reports, including all Seller Reports filed after
the date of this Agreement, (i) were or will be prepared in
accordance with the requirements of applicable Law and (ii) did not
at the time they were filed, or will not at the time they are
filed, contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary in
order to make the statements therein, in the light of the
circumstances under which they were made, not misleading. The
parties agree that failure of the Seller’s Chief Executive
Officer or Chief Financial Officer to provide any certification
required to be filed with any document filed with the SEC shall
constitute an event that has a Seller Material Adverse
Effect.
(b)
Each of the consolidated financial
statements (including, in each case, any related notes thereto)
contained in the Seller SEC Reports, including any Seller SEC
Reports filed after the date of this Agreement and prior to or on
the Effective Time, have been or will be prepared in accordance
with generally accepted accounting principles (“ GAAP”) applied on a consistent basis throughout
the periods involved (except as may be indicated in the notes
thereto or required by reason of a concurrent change to GAAP) and
each fairly presents in all material respects the consolidated
financial position of the Seller and the Seller Subsidiaries as of
the respective dates thereof and the consolidated results of its
operations and cash flows and changes in financial position for the
periods indicated, except that any unaudited interim financial
statements do not contain the footnotes required by GAAP and were
or are subject to normal and recurring year-end adjustments, which
were not or are not expected to be material in amount, either
individually or in the aggregate. The Seller has not had any
dispute with any of its auditors regarding accounting matters or
policies during any of its past three (3) full fiscal years or
during the current fiscal year-to-date requiring disclosure
pursuant to Item 304 of Regulation S-K promulgated by the SEC.
To the Seller’s Knowledge, the Seller’s auditors
will deliver to the Seller an unqualified audit opinion with
respect to the Seller’s financial statements as of and for
the year ending December 31, 2006.
(c)
The Seller has made available to the
Company a complete and correct copy of any amendments or
modifications which are required to be filed with the SEC, but have
not yet been filed with the SEC, to (i) the Seller SEC Reports
filed prior to the date hereof, and (ii) Contracts which previously
have been filed by the Seller with the SEC pursuant to the
Securities Act and Exchange Act (together with the Seller SEC
Reports, the “ Seller SEC
Documents”). The Seller has timely responded to all
comment letters and other correspondence of the staff of the SEC
relating to the SEC Documents, and the SEC has not advised the
Seller that any final responses are inadequate, insufficient or
otherwise non-responsive. The Seller has made available to
the Company true, correct and complete copies of all correspondence
between the SEC, on the one hand, and the Seller and any of the
Seller Subsidiaries, on the other hand, occurring since
January 1, 2003 and prior to the date hereof and will,
reasonably promptly following the receipt thereof, make available
to the Company any such correspondence sent or received after the
date hereof. To the Seller’s Knowledge, none of the SEC
Documents is the subject of ongoing SEC review or outstanding SEC
comment.
(d)
The Seller and, to the Seller’s
Knowledge, each of its officers and directors, are in compliance
with and have complied in all material respects with the applicable
provisions of the Sarbanes-Oxley Act of 2002 and the rules and
regulations promulgated thereunder, as amended (“ Sarbanes-Oxley”), including, without
limitation, Section 404 thereof. With respect to each Report
on Form 10-K and Form 10-Q and each amendment of any such report
filed by the Seller with the SEC since December 31, 2003, the
Chief Executive Officer and Chief Financial Officer of the Seller
have made all certifications required by Sections 302 and 906 of
Sarbanes-Oxley at the time of such filing, and the statements
contained in each such certification were true and correct.
Further, the Seller has established and maintains
“disclosure controls and procedures” (as defined in
Rule 13a-15(e) promulgated under the Exchange Act) that are
reasonably designed to ensure that material information (both
financial and non-financial) relating to the Seller and the Seller
Subsidiaries required to be disclosed by the Seller in the reports
that it files or submits under the Exchange Act is recorded,
processed, summarized and reported within the time periods
specified in the rules and forms of the SEC, and that such
information is accumulated and communicated to the Seller’s
principal executive officer and principal financial officer, or
persons performing similar functions, as appropriate to allow
timely decisions regarding required disclosure and to make the
certifications of the principal executive officer and the principal
financial officer of the Seller required by Section 302 of
Sarbanes-Oxley with respect to such reports. For purposes of
this Agreement, “principal executive officer” and
“principal financial officer” shall have the meanings
given to such terms in Sarbanes-Oxley.
(e)
The Seller has established and maintains
a system of internal control over financial reporting (as defined
in Rule 13a-15(f) promulgated under the Exchange Act)
(“internal controls”). To the Seller’s
Knowledge, based on its evaluation of internal controls prior to
the date hereof, such internal controls are sufficient to provide
reasonable assurance regarding the reliability of the
Seller’s financial reporting and the preparation of the
Seller’s financial statements for external purposes in
accordance with GAAP. The Seller has disclosed, based on its
most recent evaluation of internal controls prior to the date
hereof, to the Seller’s auditors and audit committee (i) any
significant deficiencies and material weaknesses known to the
Seller in the design or operation of internal controls which are
reasonably likely to adversely affect in a material respect the
Seller’s ability to record, process, summarize and report
financial information and (ii) any material fraud known to the
Seller that involves management or other employees who have a
significant role in internal controls. The Seller has made
available to the Company a summary of any such disclosure regarding
material weaknesses and fraud made by management to the
Seller’s auditors and audit committee since December 31,
2003. For purposes of this Agreement, a “significant
deficiency” in controls means a control deficiency that
adversely affects an entity’s ability to initiate, authorize,
record, process, or report external financial data reliably in
accordance with GAAP. A “significant deficiency”
may be a single deficiency or a combination of deficiencies that
results in more than a remote likelihood that a misstatement of the
annual or interim financial statements that is more than
inconsequential will not be prevented or detected. For
purposes of this Agreement, a “material weakness” in
controls means a significant deficiency, or a combination of
significant deficiencies, that results in more than a remote
likelihood that a material misstatement of the annual or interim
financial statements will not be prevented or detected.
(f)
There are no outstanding loans made by
the Seller or any Seller Subsidiary to any executive officer (as
defined in Rule 3b-7 promulgated under the Exchange Act) or
director of the Seller, other than loans that are subject to and
that were made and continue to be in compliance with
Regulation O under the Federal Reserve Act.
(g)
Except (i) for those liabilities that are
fully reflected or reserved against on the consolidated balance
sheet as of September 30, 2006, and (ii) for liabilities
incurred in the ordinary course of business consistent with past
practice since September 30, 2006, neither the Seller nor any
Seller Subsidiary has incurred any liability of any nature
whatsoever (whether absolute, accrued, contingent or otherwise and
whether due or to become due) that is required to be disclosed on a
balance sheet prepared in accordance with GAAP that has had, or
would reasonably be expected to have, a Seller Material Adverse
Effect.
(h)
The Seller has not been notified by its
independent registered public accounting firm or by the staff of
the SEC that such accounting firm or the staff of the SEC, as the
case may be, are of the view that any financial statement included
in any registration statement filed by the Seller under the
Securities Act or any periodic or current report filed by the
Seller under the Exchange Act should be restated, or that the
Seller should modify its accounting in future periods in a manner
that would have, or would be reasonably expected to have, a Seller
Material Adverse Effect.
(i)
Since January 1, 2006, none of the
Seller, the Seller Subsidiaries, any director, officer or employee
of the Seller or the Seller Subsidiaries or, to the Seller’s
Knowledge, any auditor, accountant or representative of the Seller
or the Seller Subsidiaries, has received or otherwise had or
obtained knowledge of any complaint, allegation, assertion or
claim, whether written or oral, regarding the accounting or
auditing practices, procedures, methodologies or methods of the
Seller or the Seller Subsidiaries or their respective internal
accounting controls, including any complaint, allegation, assertion
or claim that the Seller or any Seller Subsidiary has engaged in
questionable accounting or auditing practices. No attorney
representing the Seller or the Seller Subsidiaries, whether or not
employed by the Seller or the Seller Subsidiaries, has reported
evidence of a material violation of securities laws, breach of
fiduciary duty or similar violation by the Seller, any Seller
Subsidiary or any of their officers, directors, employees or agents
to the Seller’s or any Seller Subsidiary’s Board of
Directors or any committee thereof or to any director or officer of
the Seller or any Seller Subsidiary. Since January 1,
2006, there have been no internal investigations regarding
accounting or revenue recognition discussed with, reviewed by or
initiated at the direction of the Chief Executive Officer, Chief
Financial Officer, individuals performing similar functions,
general counsel, the Seller’s or any Seller
Subsidiary’s Board of Directors or any committee
thereof.
2.8
Absence of Certain Changes or
Events .
(a)
Since December 31, 2005 to the date
hereof, the Seller and the Seller Subsidiaries have conducted their
businesses only in the ordinary course and in a manner consistent
with past practice and, since December 31, 2005, there has not
been (i) any change in the financial condition, results of
operations or business of the Seller or any of the Seller
Subsidiaries which has had, or would be reasonably expected to
have, a Seller Material Adverse Effect, (ii) any damage,
destruction or loss (whether or not covered by insurance) with
respect to any assets of the Seller or any of the Seller
Subsidiaries which has had, or would be reasonably expected to
have, a Seller Material Adverse Effect, (iii) any change by the
Seller in its accounting methods, principles or practices, (iv) any
revaluation by the Seller of any of its assets in any material
respect, (v) any declaration, setting aside or payment of any
dividends or distributions in respect of shares of Seller Common
Stock or any redemption, repurchase or other acquisition of any of
its securities or any of the securities of any Seller Subsidiary,
(vi) any increase in the wages, salaries, bonuses, compensation,
pension or other fringe benefits or perquisites payable to any
executive officer, employee or director of the Seller or any Seller
Subsidiary or any grant of any severance or termination pay, except
in the ordinary course of business consistent with past practices,
(vii) any strike, work stoppage, slow-down or other labor
disturbance, (viii) the execution of any collective bargaining
agreement or other Contract with a labor union or organization, or
(ix) any union organizing activities.
(b)
To the Seller’s Knowledge, no third
Person has used, with or without permission, the corporate name,
trademarks, trade names, service marks, logos, symbols or similar
intellectual property of the Seller or any Seller Subsidiary in
connection with the marketing, advertising, promotion or sale of
such third Person’s products or services. Neither the
Seller nor any Seller Subsidiary is a party to any joint marketing
or other affinity marketing program with any third
Person.
2.9
Absence of Proceedings and
Orders .
(a)
There is no Proceeding pending or, to the
Seller’s Knowledge, threatened in writing against the Seller
or any Seller Subsidiary or any of their properties or assets or
challenging the validity or propriety of the transactions
contemplated by this Agreement which, if determined adversely to
the Seller or such Seller Subsidiary, would reasonably be expected
to result in the Seller or such Seller Subsidiary incurring a
liability in an amount equal to or greater than
$100,000.
(b)
There is no Order imposed upon the
Seller, any of the Seller Subsidiaries or the assets of the Seller
or any of the Seller Subsidiaries, including, without limitation,
any Order relating to any of the transactions contemplated by this
Agreement.
(c)
Except as set forth in the Seller’s
Annual Report on Form 10-K for the fiscal year ended
December 31, 2005 or its Quarterly Report on Form 10-Q for the
quarter ended September 30, 2006 (without giving effect to any
amendment filed after the date of this Agreement), neither the
Seller nor any of the Seller Subsidiaries is subject to and, to the
Seller’s Knowledge, there are no facts and/or circumstances
in existence that will result in the Seller or any of the Seller
Subsidiaries becoming subject to, any written Order, agreement
(including an agreement under Section 4(m) of the BHCA),
memorandum of understanding or similar arrangement with, or a
commitment letter or similar submission to, or extraordinary
supervisory letter from, or has adopted any extraordinary board
resolutions at the request of, any Governmental Authority charged
with the supervision or regulation of financial institutions or
issuers of securities or engaged in the insurance of deposits or
the supervision or regulation of it or any of the Seller
Subsidiaries, nor has any Governmental Authority advised it in
writing or, to the Seller’s Knowledge, otherwise advised that
it is contemplating issuing or requesting (or is considering the
appropriateness of issuing or requesting) any such Order,
agreement, memorandum of understanding or extraordinary supervisory
letter or any such board resolutions, nor, to the Seller’s
Knowledge, has any Governmental Authority commenced an
investigation in connection therewith.
(d)
The Seller is not aware of, has not been
advised of, and has no reason to believe that any facts or
circumstances exist which would cause it or any of the Seller
Subsidiaries to be deemed to be (i) operating in violation of The
Currency and Foreign Transactions Reporting Act and the regulations
promulgated thereunder, as amended (the “ Bank Secrecy Act”), the USA Patriot Act
of 2001 and the regulations promulgated thereunder, as amended (the
“ Patriot Act”), the laws and
regulations promulgated and administered by the Office of Foreign
Asset Control (“ OFAC”), any Order
issued with respect to anti-money laundering by the United States
Department of Justice or the United States Department of
Treasury’s Financial Crimes Enforcement Network (“
FinCEN”), any Order issued by OFAC, or
any other applicable anti-money laundering Laws; or (ii) not in
satisfactory compliance with the applicable privacy and customer
information requirements contained in any privacy, data protection
or security breach notification Laws, including, without
limitation, Title V of the GLB Act and the provisions of the
information security program adopted pursuant to 12 C.F.R Part 40.
The Seller is not aware of any facts or circumstances which
would cause it to believe that any non-public customer information
has been disclosed to or accessed by an unauthorized third Person
in a manner which would cause it or any of the Seller Subsidiaries
to undertake any remedial action. The Seller (or where
appropriate the Seller Subsidiary) has adopted and implemented an
anti-money laundering program that contains adequate and
appropriate customer identification verification procedures that
comply with Section 326 of the Patriot Act and such anti-money
laundering program meets the requirements in all material respects
of Section 352 of the Patriot Act and it (or such other of the
Seller Subsidiaries) has complied in all respects with any
requirements to file reports and other necessary documents as
required by the Patriot Act, the Bank Secrecy Act or any other
anti-money laundering Laws.
2.10
Employee Benefit Plans
.
(a)
Current Plans . The Seller Disclosure Schedule lists all
employee benefit plans (as defined in Section 3(3) of the
Employee Retirement Income Security Act of 1974 and the regulations
promulgated thereunder, as amended (“
ERISA”)), and all bonus, stock option, stock purchase,
restricted stock, incentive, deferred compensation, retiree medical
or life insurance, supplemental retirement, severance or other
benefit plans, programs or arrangements, and all employment,
termination, severance and other employment Contracts or employment
arrangements, with respect to which the Seller or any Seller
Subsidiary has any obligation, whether absolute, accrued,
contingent or otherwise and whether due or to become due
(collectively, the “ Plans”).
The Seller has furnished or made available to the Company a
complete and accurate copy of each Plan (or a description of the
Plans, if the Plans are not in writing) and a complete and accurate
copy of each material document prepared in connection with each
such Plan, including, without limitation, and where applicable, a
copy of (i) each trust or other funding arrangement, (ii) each
summary plan description and summary of material modifications,
(iii) the three (3) most recently filed United States Internal
Revenue Service (“ IRS”)
Forms 5500 and related schedules, (iv) the most recently
issued determination letter from the IRS for each such Plan and the
materials submitted to obtain such letter and (v) the three (3)
most recently prepared actuarial and financial statements with
respect to each such Plan.
(b)
Absence of Certain Types of
Plans . No member of the
Seller’s “controlled group,” within the meaning
of Section 4001(a)(14) of ERISA, maintains or contributes to, or
within the five (5) years preceding the Effective Time has
maintained or contributed to, an employee pension benefit plan
subject to Title IV of ERISA (“ Title IV Plan”), including, without
limitation, any “multiemployer pension plan” as defined
in Section 3(37) of ERISA. None of the Plans obligates
the Seller or any of the Seller Subsidiaries to pay separation,
severance, termination or similar benefits solely as a result of
any transaction contemplated by this Agreement or as a result of a
“change in control,” within the meaning of such term
under Section 280G of the Code. Except as required by the
Consolidated Omnibus Budget Reconciliation Act of 1986, as amended,
none of the Plans provides for or promises retiree medical,
disability or life insurance benefits to any current or former
employee, officer or director of the Seller or any of the Seller
Subsidiaries. Each of the Plans is subject only to the Laws
of the United States or a political subdivision thereof.
(c)
Compliance with Applicable
Law . Each Plan has been
operated in all respects in accordance with the requirements of all
applicable Law and all Persons who participate in the operation of
such Plans and all Plan “fiduciaries” (within the
meaning of Section 3(21) of ERISA) have acted in accordance with
the provisions of all applicable Law, except where such operations
or violations of applicable Law would not have a Seller Material
Adverse Effect. The Seller and the Seller Subsidiaries have
performed all obligations required to be performed by any of them
under, are not in any respect in default under or in violation of,
and the Seller and the Seller Subsidiaries have no Knowledge of any
default or violation by any party to, any Plan, except where such
failures, defaults or violations would not have a Seller Material
Adverse Effect. No Proceeding is
pending or, to the Knowledge of the Seller or the Seller
Subsidiaries, threatened with respect to any Plan (other than
claims for benefits in the ordinary course) and, to the Knowledge
of the Seller or the Seller Subsidiaries, no fact or event exists
that could give rise to any such Proceeding. Neither the
Seller nor any Seller Subsidiary has incurred any liability under
Section 302 of ERISA or Section 412 of the Code that has not been
satisfied in full and no condition exists that presents a material
risk of incurring any such liability.
(d)
Qualification of Certain
Plans . Each Plan that
is intended to be qualified under Section 401(a) of the Code or
Section 401(k) of the Code (including each trust established in
connection with such a Plan that is intended to be exempt from
federal income taxation under Section 501(a) of the Code) has
received a favorable determination letter from the IRS that it is
so qualified or is entitled to rely on a favorable opinion or
advisory letter issued to the sponsor of a master and prototype
plan pursuant to IRS Announcement 2001-77, and, to the
Seller’s Knowledge, there is no fact or event that could
adversely affect the qualified status of any such Plan. No
trust maintained or contributed to by the Seller or any of the
Seller Subsidiaries is intended to be qualified as a voluntary
employees’ beneficiary association or is intended to be
exempt from federal income taxation under Section 501(c)(9) of the
Code.
(e)
Non-Qualified Deferred Compensation
Plans . No Plan that is
a non-qualified deferred compensation plan subject to Section 409A
of the Code and the related guidance issued thereunder, as amended
(“ Section 409A”) has been
modified (as defined under Section 409A) on or after
October 3, 2004 and all such non-qualified deferred
compensation plans have been operated and administered by the
Seller and the Seller Subsidiaries in good faith compliance with
Section 409A from the period beginning January 1, 2005 through
the date hereof.
(f)
Absence of Certain Liabilities and
Events . There has been
no non-exempt prohibited transaction (within the meaning of Section
406 of ERISA or Section 4975 of the Code) with respect to any Plan.
Neither the Seller nor any Seller Subsidiary has incurred any
liability for any excise tax arising under Sections 4971 through
4980G of the Code that would have a Seller Material Adverse Effect
and, to the Seller’s Knowledge, no fact or event exists that
could give rise to any such liability.
(g)
Plan Contributions
. All contributions, premiums or
payments required to be made with respect to any Plan by the Seller
and the Seller Subsidiaries have been made on or before their due
dates or within the applicable grace period for payment without
default.
(h)
Employment Contracts
. Neither the Seller nor any Seller
Subsidiary is a party to any Contracts for employment, severance,
consulting or other similar agreements with any employees,
consultants, officers or directors of the Seller or any of the
Seller Subsidiaries, except as set forth on Section 2.10(h) of
the Seller Disclosure Schedule. Neither the Seller nor any
Seller Subsidiary is a party to any collective bargaining
agreements.
(i)
Effect of Agreement
. The consummation of the
transactions contemplated by this Agreement will not, either alone
or in conjunction with another event, entitle any current or former
employee of the Seller or any Seller Subsidiary to severance pay,
unemployment compensation or any other payment, including payments
constituting “excess parachute payments” within the
meaning of Section 280G of the Code or accelerate the time of
payment or vesting or increase the compensation due any such
employee or former employee.
2.11
Registration Statement; Proxy
Statement/Prospectus .
The information supplied by the Seller for inclusion in the
Registration Statement will not, at the time the Registration
Statement (including any amendments or supplements thereto) is
declared effective by the SEC, contain any untrue statement of a
material fact or omit to state any material fact required to be
stated therein or necessary in order to make the statements
therein, in the light of the circumstances under which they were
made, not misleading. The information supplied by the Seller
for inclusion in the proxy statement/prospectus to be sent to the
stockholders of the Seller in connection with the meeting of the
Seller’s stockholders to consider the Merger (the “
Seller Stockholders’
Meeting”) (such proxy statement/prospectus as amended or
supplemented is referred to herein as the “ Proxy Statement/Prospectus”)
will not, at the date the Proxy Statement/Prospectus (or any
amendment thereof or supplement thereto) is first mailed to
stockholders, at the time of the Seller Stockholders’ Meeting
and at the Effective Time, be false or misleading with respect to
any material fact required to be stated therein, or omit to state
any material fact required to be stated therein or necessary in
order to make the statements made therein, in the light of the
circumstances under which they are made, not misleading. If
at any time prior to the Effective Time any event relating to the
Seller, the Seller Subsidiaries or any of its or their Affiliates, officers or directors is discovered
by the Seller which should be set forth in an amendment or
supplement to the Registration Statement or an amendment or
supplement to the Proxy Statement/Prospectus, the Seller shall
promptly inform the Company. The Proxy Statement/Prospectus
will comply in all material respects as to form with the
requirements of the Securities Act and the Exchange Act (to the
extent applicable). Notwithstanding the foregoing, the Seller
makes no representation or warranty with respect to any information
about, or supplied or omitted by, the Company which is contained in
any of the foregoing documents.
2.12
Title to Property
. The Seller Disclosure Schedule
identifies all real property owned by the Seller or any of the
Seller Subsidiaries and identifies, to the Seller’s
Knowledge, all real property leases pursuant to which the Seller or
any of the Seller Subsidiaries is a party, either as a lessor or
lessee. The Seller and each of the Seller Subsidiaries has
good and marketable title to all of their respective properties and
assets, real and personal, free and clear of all Liens, except
liens for Taxes not yet due and payable,
pledges to secure deposits and such minor imperfections of title,
if any, as do not materially detract from the value of or interfere
with the present use of the property affected thereby and which
would not have a Seller Material Adverse Effect; and all leases and
licenses pursuant to which the Seller or any of the Seller
Subsidiaries lease or license from other Persons any real or
material amounts of personal property are in good standing, valid
and effective in accordance with their respective terms, and there
is not, under any of such leases and licenses, any existing
material default or event of default (or event which with notice or
lapse of time, or both, would constitute a material default and in
respect of which the Seller or such Seller Subsidiary has not taken
adequate steps to prevent such a default from occurring). All
of the Seller’s and each of the Seller’s
Subsidiaries’ buildings and equipment in regular use have
been reasonably maintained and are in good and serviceable
condition, reasonable wear and tear excepted.
2.13
Environmental Matters
. To the Seller’s Knowledge:
(i) each of the Seller, the Seller Subsidiaries, properties
owned or operated by the Seller or the Seller Subsidiaries, the
Participation Facilities and the Loan Properties are and at all
times since they became properties owned or operated by the Seller
or the Seller Subsidiaries or, in the case of Participation
Facilities or Loan Properties, since they became Participation
Facilities or Loan Properties, as the case may be, have been in
compliance with all applicable Laws, Orders and Contractual
obligations relating to the environment, health, safety, natural
resources, wildlife or “
Hazardous Materials” which are hereinafter defined as
chemicals, pollutants, contaminants, wastes, toxic substances,
compounds, products, solid, liquid, gas, petroleum or other
regulated substances or materials which are hazardous, toxic or
otherwise harmful to health, safety, natural resources or the
environment (“Environmental Laws”), except for
violations which would not have a Seller Material Adverse Effect;
(ii) during and prior to the period of (a) the Seller’s or
any of the Seller Subsidiaries’ ownership or operation of any
of their respective current properties, (b) the Seller’s or
any of the Seller Subsidiaries’ participation in the
management of any Participation Facility or (c) the Seller’s
or any of the Seller Subsidiaries’ holding of a security
interest in a Loan Property, Hazardous Materials have not been
generated, treated, stored, transported, released or disposed of
in, on, under, above, from or affecting any such property, except
where such release, generation, treatment, storage, transportation
or disposal would not have a Seller Material Adverse Effect; (iii)
there is no asbestos or any material amount of ureaformaldehyde
materials in or on any property owned or operated by the Seller or
any Seller Subsidiary or any Loan Property or Participation
Facility and no electrical transformers or capacitors, other than
those owned by public utility companies, on any such properties
contain any polychlorinated biphenyls; (iv) there are no
underground or aboveground storage tanks and there have never been
any underground or aboveground storage tanks located on, in or
under any properties currently or formerly owned or operated by the
Seller or any Seller Subsidiary or any Loan Property or
Participation Facility; (v) neither the Seller nor any Seller
Subsidiary has received any notice from any Governmental Authority
or third Person notifying the Seller or any Seller Subsidiary of
any Environmental Claim; and (vi) there are no circumstances with
respect to any properties currently owned or operated by the Seller
or any Seller Subsidiary or any Loan Property or Participation
Facility that could reasonably be anticipated (a) to form the basis
for an Environmental Claim against the Seller or any Seller
Subsidiary or any properties currently or formerly owned or
operated by the Seller or any Seller Subsidiary or any Loan
Property or Participation Facility or (b) to cause any properties
currently owned or operated by the Seller or any Seller Subsidiary
or any Loan Property or Participation Facility to be subject to any
restrictions on ownership, occupancy, use or transferability under
any applicable Environmental Law or require notification to or
Consent of any Governmental Authority or third Person pursuant to
any Environmental Law.
The following definitions apply for
purposes of this Section 2.13: (a) “Loan
Property” means any real property in which the Seller or any
Seller Subsidiary holds a security interest and, where required by
the context, said term means the owner or operator of such
property; (b) “
Participation Facility” means any facility in which the
Seller or any Seller Subsidiary participates in the management and,
where required by the context, said term means the owner or
operator of such property; and (c) “ Environmental Claims” shall mean
any and all administrative, regulatory, judicial or private
Proceedings relating in any way to (i) any Environmental Law; (ii)
any Hazardous Material including, without limitation, any
abatements, removal, remedial, corrective or other response action
in connection with any Hazardous Material, Environmental Law or
Order of a Governmental Authority; or (iii) any actual or alleged
damage, injury, threat or harm to health, safety, natural
resources, wildlife or the environment which would have a Seller
Material Adverse Effect.
2.14
Absence of Agreements
. Neither the Seller nor any Seller
Subsidiary is a party to any Contract or Order which restricts the
conduct of its business (including any Contract containing
covenants which limit the ability of the Seller or of any Seller
Subsidiary to compete in any line of business or with any Person or
which involve any restriction of the geographical area in which, or
method by which, the Seller or any Seller Subsidiary may carry on
its business (other than as may be required by applicable Law or
Governmental Authorities)), or in any manner relates to its capital
adequacy, credit policies or management, nor has the Seller been
advised that any Governmental Authority is contemplating issuing or
requesting (or is considering the appropriateness of issuing or
requesting) any such Contract or Order.
2.15
Taxes . The Seller and the Seller Subsidiaries have
timely filed all Tax Returns required to be filed by them on or
prior to the date of this Agreement (all such Tax Returns being
accurate and complete in all material respects), and the Seller and
the Seller Subsidiaries have timely paid and discharged all Taxes
due in connection with or with respect to the filing of such Tax
Returns, except such as are not yet due or are being contested in
good faith by appropriate Proceedings and with respect to which the
Seller is maintaining reserves adequate for their payment.
For purposes of this Agreement, “
Tax” or “Taxes” shall mean taxes, charges, fees,
levies and other governmental assessments and impositions of any
kind payable to any Governmental Authority, including, without
limitation, (i) income, franchise, profits, gross receipts,
estimated, ad valorem, value-added, sales, use, service, real or
personal property, capital stock, license, payroll, withholding,
disability, employment, social security, worker’s
compensation, unemployment compensation, utility, severance,
production, excise, stamp, occupation, premiums, windfall profits,
transfer and gains taxes, (ii) customs duties, imposts, charges,
levies or other similar assessments of any kind, and (iii)
interest, penalties and additions to tax imposed with respect
thereto; and “Tax Returns” shall mean returns, reports
and information statements with respect to Taxes required to be
filed with the IRS or any other Governmental Authority, including,
without limitation, consolidated, combined and unitary tax returns.
For purposes of this Section 2.15, references to the
Seller and the Seller Subsidiaries include former subsidiaries of
the Seller for the periods during which any such Persons were
owned, directly or indirectly, by the Seller. Neither the IRS
nor any other Governmental Authority is now asserting, either
through audits, administrative Proceedings or court Proceedings,
any deficiency or claim for additional Taxes from the Seller or the
Seller Subsidiaries. Neither the Seller nor any of the Seller
Subsidiaries has granted any waiver of any statute of limitations
with respect to, or any extension of a period for the assessment
of, any Tax. Except for statutory liens for current Taxes not
yet due, there are no material Tax Liens on any assets of the
Seller or any of the Seller Subsidiaries. Neither the Seller
nor any of the Seller Subsidiaries has received a ruling or entered
into an agreement with the IRS or any other Governmental Authority
with respect to Taxes that would have a Seller Material Adverse
Effect. No agreements relating to allocating or sharing of
Taxes exist among the Seller and the Seller Subsidiaries and no Tax
indemnities given by the Seller or the Seller Subsidiaries in
connection with a sale of stock or assets remain in effect.
Neither the Seller nor any of the Seller Subsidiaries is
required to include in income either (i) any amount in respect of
any adjustment under Section 481 of the Code or (ii) any
installment sale gain. Neither the Seller nor any of the
Seller Subsidiaries has made an election under Section 341(f) of
the Code. Neither the Seller nor any of the Seller
Subsidiaries (i) is a member of an affiliated, consolidated,
combined or unitary group, other than one of which the Seller was
the common parent, or (ii) has any liability for the Taxes of any
Person (other than the Seller and the Seller Subsidiaries) under
Treasury Regulation Section 1-1502-6 (or any similar provision of
state or local Law) as a transferee or successor, by Contract or
otherwise.
2.16
Insurance . The Seller Disclosure Schedule lists all
policies of insurance of the Seller and the Seller Subsidiaries
currently in effect. Neither the Seller nor any of the Seller
Subsidiaries has any liability for unpaid premiums or premium
adjustments not properly reflected on the Seller’s financial
statements for the fiscal year ended December 31, 2005, or the
nine (9) months ended September 30, 2006.
2.17
Brokers . No broker, finder or investment banker (other
than Keefe, Bruyette & Woods, Inc.) is entitled to any
brokerage, finder’s or other fee or commission in connection
with the transactions contemplated by this Agreement based upon
arrangements made by or on behalf of the Seller. Prior to the
date of this Agreement, the Seller has furnished to the Company a
complete and correct copy of all agreements between the Seller and
Keefe, Bruyette & Woods, Inc. pursuant to which such firm would
be entitled to any payment relating to the transactions
contemplated hereunder.
2.18
Tax Matters . Neither the Seller nor any Seller Subsidiary
has taken or agreed to take any action that would prevent the
Merger from qualif
