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EXHIBIT 2
CONFIDENTIAL
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PLAN AND AGREEMENT OF MERGER
AMONG
INTERMOUNTAIN COMMUNITY BANCORP, PANHANDLE STATE BANK,
SNAKE RIVER BANCORP, INC. AND MAGIC VALLEY BANK
DATED AS OF JULY 23, 2004
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PLAN AND AGREEMENT OF MERGER
AMONG
INTERMOUNTAIN COMMUNITY BANCORP, PANHANDLE STATE BANK,
SNAKE RIVER BANCORP, INC. AND MAGIC VALLEY BANK
This Plan
and Agreement of Merger (the "Agreement"), dated as of July 23,
2004, is made by and among INTERMOUNTAIN
COMMUNITY BANCORP ("Intermountain"),
PANHANDLE STATE BANK ("Panhandle"), SNAKE
RIVER BANCORP, INC. ("Snake River")
and MAGIC VALLEY BANK ("Magic Valley").
PREAMBLE
The
management and boards of directors of Intermountain, Panhandle,
Snake
River and Magic Valley, respectively,
believe that the proposed Transaction, to
be accomplished in the manner set forth in
this Agreement, is in the best
interests of the respective corporations
and their shareholders.
RECITALS
A. THE
PARTIES. The parties to the Merger are as follows:
(1)
Intermountain is a corporation duly organized and validly
existing under Idaho law and is a registered bank holding
company under the Bank Holding Company Act of 1956, as amended
("BHC Act"). Intermountain's principal office is located in
Sandpoint, Idaho. Intermountain owns all of the outstanding
common stock of Panhandle.
(2) Panhandle
is a state-chartered banking corporation duly
organized and validly existing under Idaho law with its
principal office located in Sandpoint, Idaho.
(3) Snake
River is a corporation duly organized and validly
existing under Idaho law and is a registered bank holding
company under the BHC Act. Snake River's principal office is
located in Twin Falls, Idaho. Snake River owns all of the
outstanding common stock of Magic Valley.
(4) Magic
Valley is a state-chartered banking corporation duly
organized and validly existing under Idaho law with its
principal office located in Twin Falls, Idaho.
B. THE
MERGERS. On the Effective Date, (i) Snake River will merge with
and
into Intermountain, with Intermountain as the surviving entity;
(ii)
Magic Valley will merge with and into Panhandle, with Panhandle
surviving as a wholly owned subsidiary of Intermountain; and
(iii)
Magic Valley will operate as "Magic Valley Bank, a division of
Panhandle State Bank."
C.
BOARD APPROVALS. The respective boards of directors of
Intermountain,
Panhandle, Snake River and Magic Valley have approved this
Agreement
and authorized its execution and delivery.
D.
OTHER APPROVALS. The Mergers are subject to:
(1)
Satisfaction of the conditions described in this Agreement;
(2) Approval
by Snake River's shareholders; and
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(3) Approval
or acquiescence, as appropriate, by (a) the Board of
Governors of the Federal Reserve System ("Federal Reserve"),
(b) the Federal Deposit Insurance Corporation ("FDIC"), (c)
the State of Idaho Department of Finance, and (d) any other
agencies having jurisdiction over the Mergers (collectively,
"Regulatory Approvals").
E.
EMPLOYMENT AGREEMENTS. Panhandle has entered into employment
agreements, each of which will take effect as of the Effective
Date,
with Phillip Bratton, Magic Valley's President and Chief
Executive
Officer; Pamela Rasmussen, Magic Valley's Senior Vice President
and
Chief Financial Officer; and Ernest Bengoechea, Magic Valley's
Senior
Vice President and Chief Credit Officer.
F.
DIRECTOR AGREEMENTS. In connection with the parties' execution of
this
Agreement, the directors of Snake River and Magic Valley have
entered
into agreements, pursuant to which, among other things, each
director
has agreed to vote his or her shares of Snake River common stock
in
favor of the actions contemplated by this Agreement. In
addition,
certain of the Snake River and Magic Valley directors have entered
into
non-competition agreements.
G.
FAIRNESS OPINION. Snake River has received from Hovde Financial
LLC
("Hovde") and delivered to Intermountain an opinion to the effect
that
the financial terms of the Transaction are financially fair to
Snake
River's shareholders.
H. BANK
MERGER AGREEMENT. Concurrent with the parties' execution of
this
Agreement, Magic Valley and Panhandle have entered into a
merger
agreement, providing for the Bank Merger (the "Bank Merger
Agreement").
I.
OPTION TO PURCHASE. Concurrent with the parties' execution of
this
Agreement,
the lease for Magic Valley's main office has been amended to
grant Intermountain or its assignee, at Intermountain's discretion,
an
option to purchase the property.
J.
INTENTION OF THE PARTIES -- TAX TREATMENT. The parties intend
the
Transaction to qualify, for federal income tax purposes, as a
tax-free
reorganization under IRC Section 368(a), and the parties hereto
hereby
adopt this Agreement as a plan of reorganization within the meaning
of
Sections 1.368-2(g) and 1.368-3(a) of the United States
Treasury
Regulations.
AGREEMENT
In consideration of the mutual agreements set forth in this
Agreement,
Intermountain, Panhandle, Snake River and
Magic Valley agree as follows:
DEFINITIONS
The following capitalized terms used in this Agreement will have
the
following meanings:
"Acquisition Event" means any of the following: (i) a merger,
consolidation or similar transaction
involving Snake River or any successor,
(ii) a purchase, lease or other acquisition
in one or a series of related
transactions of assets of Snake River or
any of its Subsidiaries representing 25
percent or more of the consolidated assets
of Snake River and its Subsidiaries,
or (iii) a purchase or other acquisition
(including by way of merger,
consolidation, share exchange or any
similar transaction) in one or a series of
related transactions of beneficial
ownership of securities representing 50
percent or more of the voting power of
Snake River or its Subsidiaries, in each
case with or by a person or entity other
than Intermountain or one of its
Subsidiaries.
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"Acquisition Proposal"
has the meaning assigned to such term in Section
4.1.11 of this Agreement.
"Adjustment Trigger" has the meaning assigned to such term in
Section
7.2 of this Agreement.
"Advisory Board" has the meaning assigned to such term in Section
6.4
of this Agreement.
"Agreement" means this Plan and Agreement of Merger.
"Asset Classification" has the meaning assigned to such term in
Section
3.1.16 of this Agreement.
"Bank Merger" means the merger of Magic Valley with and into
Panhandle.
"Bank Merger Agreement" means the merger agreement described in
Recital
H.
"Banking Act" means the Idaho Bank Act, Title 26 of the Idaho
Code.
"BHC Act" has the meaning assigned to such term in Recital A of
this
Agreement.
"Break-Up Fee" has the meaning specified in Section 7.7 of this
Agreement.
"Business Day" means any day other than a Saturday, Sunday,
legal
holiday or a day on which banking
institutions located in the State of Idaho are
required by law to remain closed.
"Capital" means Snake River's capital stock, surplus and
undivided
profits determined in accordance with GAAP,
applied on a consistent basis,
without giving any effect to any impact
from gains or losses on available for
sale securities between the date of this
Agreement and Closing.
"CCR Agreement" has the meaning assigned to such term in Section
4.1.13
of this Agreement.
"Certificate" has the meaning assigned to such term in Section
1.8.1 of
this Agreement.
"Closing" means the closing of the Transaction contemplated by
this
Agreement, which will occur on the
Effective Date, as more fully specified in
Section 2.1 of this Agreement.
"Compensation Plans" has the meaning assigned to such term in
Section
3.1.20 of this Agreement.
"Contracts" has the meaning assigned to such term in Section 3.1.11
of
this Agreement.
"Converted Option" has the meaning assigned to such term in
Section
1.4.1 of this Agreement.
"Daily Sales Price" for any Trading Day means the daily closing
price
per share of Intermountain Common Stock on
the OTC Bulletin Board reporting
system, as reported on the website
www.otcbb.com.
"Determination Date" means the fifth (5th) business day
immediately
prior to the Effective Date.
"Determination Period" means the fifteen (15) Trading Days prior to
the
Determination Date.
"Director" means the Director of the Department of Finance for
the
State of Idaho.
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"Effective Date" means the date on which all conditions to Closing
have
occurred and on which the Transaction takes
place, as more fully specified in
Section 2.1 of this Agreement.
"Employees" has the meaning assigned to such term in Section 3.1.20
of
this Agreement.
"Environmental Laws" has the meaning assigned to such term in
Section
3.1.7 of this Agreement.
"ERISA" means the Employee Retirement Income Security Act of 1974,
as
amended.
"ERISA Affiliate" has the meaning assigned to such term in
Section
3.1.20 of this Agreement.
"Exchange Act" has the meaning assigned to such term in Section
3.1.5
of this Agreement.
"Exchange Agent" means American Stock Transfer and Trust.
"Exchange Fund" has the meaning assigned to such term in Section
1.7 of
this Agreement.
"Execution Date" means the date of this Agreement.
"Executive Officers," with respect to Intermountain and/or
Panhandle,
means Curt Hecker, Jerry Smith, and Doug
Wright.
"Executive Officers," with respect to Snake River and/or Magic
Valley,
means Phillip Bratton, Ernest Bengoechea,
and Pamela Rasmussen.
"FDIC" means the Federal Deposit Insurance Corporation.
"Federal Reserve" means the Board of Governors of the Federal
Reserve
System.
"GAAP" means generally accepted accounting principles.
"Hazardous Substances" has the meaning assigned to such term in
Section
3.1.7 of this Agreement.
"Holding Company Merger" means the merger of Snake River with and
into
Intermountain.
"IBCA" means the Idaho Business Corporations Act, as amended.
"Intermountain" is Intermountain Community Bancorp, an Idaho
corporation that has its principal place of
business in Sandpoint, Idaho, and
that is a bank holding company registered
pursuant to the BHC Act.
"Intermountain Average Closing Price" means the average Daily
Sales
Price of Intermountain Common Stock for the
Determination Period.
"Intermountain Common Stock" means the shares of Intermountain
common
stock, no par value per share, issued and
outstanding from time to time.
"Intermountain Financial Statements" means Intermountain's (i)
audited
consolidated balance sheet as of December
31, 2003, 2002 and 2001 and the
related audited consolidated statements of
income, cashflows and changes in
stockholders' equity for each of the years
ended December 31, 2003, 2002 and
2001; (ii) unaudited consolidated balance
sheet as of the end of each fiscal
quarter following
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December 31, 2003 but preceding the
Execution Date, and the related unaudited
consolidated statements of income,
cashflows and changes in stockholders' equity
for each such quarter; and (iii) unaudited
consolidated balance sheets and
related consolidated statements of income
and stockholders' equity for each of
the fiscal quarters ending after the
Execution Date and before Closing or the
Termination Date, as the case may be.
"Intermountain Shares" means the shares of Intermountain Common
Stock
to be issued to the holders of Snake River
Common Stock in accordance with
Section 1.3.2 of this Agreement.
"IRC" means the Internal Revenue Code of 1986, as amended.
"Leased Real Property" means the real Properties subject to Leases
as
identified in Schedule 5 to this
Agreement.
"Leases" means the terms and conditions governing the leasehold
interests in the Leased Real Property as
identified in Schedule 5 to this
Agreement.
"Liens" means, collectively, liens, pledges, security
interests,
claims, proxies, preemptive or subscriptive
rights or other encumbrances or
restrictions of any kind.
"Magic Valley" is Magic Valley Bank, an Idaho state chartered
bank,
that has its head office in Twin Falls,
Idaho, and that is wholly owned by Snake
River.
"Magic Valley Financial Statements" means Magic Valley's
audited
statements of financial condition as of
December 31, 2003, 2002 and 2001, and
the related statements of income, cash
flows and shareholders' equity for each
of the years ended December 31, 2003, 2002
and 2001.
"Material Adverse Effect" with respect to a Person means an
effect
that: (1) is materially adverse to the
business, financial condition, results of
operations or prospects of the Person and
its Subsidiaries taken as a whole; (2)
significantly and adversely affects the
ability of the Person to consummate the
Transaction on or by January 31, 2005 or to
perform its material obligations
under this Agreement; or (3) enables any
persons to prevent the consummation on
or by January 31, 2005 of the
Transaction.
"Merger Consideration" means the aggregate consideration
contemplated
by Section 1.3.2 of this Agreement.
"Mergers" means the Holding Company Merger and the Bank Merger.
"Panhandle" means Panhandle State Bank, an Idaho state
chartered
banking association, that has its head
office in Sandpoint, Idaho, and that is
wholly owned by Intermountain.
"Pension Plan" has the meaning assigned to such term in Section
3.1.20
of this Agreement.
"Per Share Cash Consideration" has the meaning assigned in
Section
1.3.2 of this Agreement.
"Per Share Consideration" has the meaning assigned in Section 1.3.2
of
this Agreement.
"Per Share Stock Consideration" has the meaning assigned in
Section
1.3.2 of this Agreement.
"Person" includes an individual, corporation, partnership,
association,
limited liability company, trust or
unincorporated organization.
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"Plan" has the meaning assigned to such term in Section 3.1.20 of
this
Agreement.
"Properties" with respect to any party to this Agreement means
properties or other assets owned or leased
by such party or any of its
Subsidiaries.
"Proposed Dissenting Shares" means those shares of Snake River
Common
Stock as to which shareholders have given
notice of their intent to assert
appraisal rights pursuant to Section
30-1-1321 of the IBCA.
"Prospectus/Proxy Statement" means the Prospectus/Proxy
Statement
referred to in Section 4.2.1 of this
Agreement, to be provided to each
shareholder of Snake River in connection
with their consideration and approval
of the Transaction.
"Registration Statement" has the meaning assigned in Section 4.2.1
of
this Agreement.
"Reports" has the meaning assigned to such term in Section 3.1.5
of
this Agreement.
"SEC" means the United States Securities and Exchange
Commission.
"Securities Act" has the meaning assigned to such term in Section
3.1.5
of this Agreement.
"Securities Laws" has the meaning assigned to such term in
Section
3.1.5 of this Agreement.
"Snake River" is Snake River Bancorp, Inc., an Idaho corporation
that
has its principal place of business in Twin
Falls, Idaho, and that is a bank
holding company registered pursuant to the
BHC Act.
"Snake River Common Stock" means the shares of Snake River
common
stock, $5 par value per share, issued and
outstanding from time to time.
"Snake River Financial Statements" means (i) the Magic Valley
Financial
Statements; (ii) as of the Effective Date,
Snake River unaudited consolidated
balance sheet as of December 31, 2003 and
the related unaudited consolidated
statements of income, cashflows and changes
in stockholders' equity for the year
ended December 31, 2003; (iii) Snake River
audited consolidated balance sheet as
of December 31, 2003 and the related
audited consolidated statements of income,
cashflows and changes in stockholders'
equity for the year ended December 31,
2003 to be prepared in accordance with
Section 4.1.9, if necessary; (iv)
unaudited consolidated balance sheet as of
the end of each fiscal quarter
following December 31, 2003 but preceding
the Execution Date, and the related
unaudited consolidated statements of
income, cashflows and changes in
stockholders' equity for each such quarter;
and (v) unaudited consolidated
balance sheets and related consolidated
statements of income and stockholders'
equity for each of the fiscal quarters
ending after the Execution Date and
before Closing or the Termination Date, as
the case may be.
"Snake River Meeting" has the meaning assigned in Section 4.2.2 of
this
Agreement.
"Snake River Option Plans" means the 1997 Non-Qualified Stock
Option
Plan, the 1998 Stock Option Plan for
Non-Employee Directors, and the 1998
Incentive Stock Option Plan for the benefit
of directors and employees of Snake
River and Magic Valley.
"Snake River Options" means the stock options issued and
outstanding on
the date of this Agreement pursuant to the
Snake River Option Plans.
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"Snake River Preferred Stock" means the shares of Snake River
preferred
stock, $5 par value per share, issued and
outstanding from time to time.
"Snake River Transaction Fees" has the meaning assigned to such
term in
Section 5.2.3 of this Agreement.
"Subject Property" has the meaning assigned to such term in
Section
3.1.7 of this Agreement.
"Subsequent Intermountain Financial Statements" means
Intermountain
Financial Statements for each fiscal
quarter ending after the Execution Date and
prior to Closing.
"Subsequent Snake River Financial Statements" means Snake River
Financial Statements for each fiscal
quarter ending after the Execution Date and
prior to Closing.
"Subsidiary" with respect to any party to this Agreement means
any
Person in which such party owns the
majority of outstanding capital stock or
voting power.
"Superior Proposal" means a bona fide proposal or offer made by
a
person to acquire Snake River pursuant to a
tender or exchange offer for all of
the outstanding Snake River Common Stock, a
merger, consolidation or other
business combination, or an acquisition of
all or substantially all of the
assets of Snake River and its Subsidiaries,
on terms which the board of
directors of Snake River has determined in
good faith, after taking into account
the advice of counsel, to be more favorable
to Snake River and its shareholders
than the Transaction.
"Takeover Proposal" means a bona fide proposal or offer by a person
to
make a tender or exchange offer to acquire
50% or more of Snake River's
outstanding common stock, or to engage in a
merger, consolidation or other
business combination involving Snake River
or to acquire in any manner a
substantial equity interest in, or all or
substantially all of the assets of,
Snake River.
"Tangible Equity Capital" means common stock, paid in capital,
retained
earnings, and minus goodwill and any other
intangible assets, without giving
effect to any impact from gains or losses
on available for sale securities.
"Termination Date" has the meaning assigned to such term in Section
7.1
of this Agreement.
"Termination Fee" has the meaning assigned to such term in Section
7.5
of this Agreement.
"Trading Day" means a day on which Intermountain Common Stock is
traded
on the OTC Bulletin Board.
"Transaction" means the consummation of the Mergers in accordance
with
this Agreement.
SECTION 1.
TERMS OF TRANSACTION
1.1
TRANSACTION. Subject to the terms and conditions set forth in
this
Agreement and in the Schedules and Exhibits, Snake River will
merge
with and into Intermountain in the Holding Company Merger pursuant
to
this Agreement, and Magic Valley will merge with and into Panhandle
in
the Bank Merger pursuant to the Bank Merger Agreement.
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1.2
MERGERS.
1.2.1
HOLDING COMPANY MERGER. Upon Closing of the Holding Company
Merger, pursuant to the provisions of the IBCA, all shares of
Snake River Common Stock issued and outstanding immediately
prior to Closing, except for treasury shares and Proposed
Dissenting Shares, will, by virtue of the Holding Company
Merger and without any action on the part of any holder of
shares of Snake River Common Stock, be converted into the
right to receive the Merger Consideration described in Section
1.3 of this Agreement.
1.2.2 BANK
MERGER. Pursuant to the terms and conditions of the Bank
Merger Agreement, Magic Valley will be merged into Panhandle,
with Panhandle as the resulting bank.
1.3 MERGER
CONSIDERATION. Subject to the provisions of this Agreement, on
the Effective Date:
1.3.1
OUTSTANDING INTERMOUNTAIN COMMON STOCK. The shares of
Intermountain Common Stock issued and outstanding immediately
prior to the Effective Date will, on and after the Effective
Date, remain as issued and outstanding shares of Intermountain
Common Stock.
1.3.2
OUTSTANDING SNAKE RIVER COMMON STOCK. Each share of Snake
River Common Stock issued and outstanding immediately prior to
the Execution Date will automatically and without any action
on the part of the holder of such share, be converted into and
represent the right to receive from Intermountain:
(a) 0.93
Intermountain Shares (the "Per Share Stock
Consideration"); and
(b) $8.22 in
cash (the "Per Share Cash Consideration").
The Per Share Stock Consideration and the Per Share Cash
Consideration are collectively referred to as the "Per Share
Consideration." The aggregate of the Per Share Stock
Consideration and the Per Share Cash Consideration payable or
issuable pursuant to the Transaction is referred to as the
"Merger Consideration."
1.3.3
CHANGE IN EQUITY CAPITAL. If, after the date of this Agreement
but before the Effective Date, the number of shares of
Intermountain Common Stock or Snake River Common Stock issued
and outstanding increases or decreases in number or is changed
into or exchanged for a different kind or number of
securities, through a recapitalization, reclassification,
stock dividend, stock split, reverse stock split or other
similar change in capitalization (not including increases in
number due to issuances of shares upon exercise of any
outstanding options) of Intermountain or Snake River, as the
case may be, then, as appropriate, a proportionate adjustment
will be made to the Merger Consideration.
1.4
OUTSTANDING SNAKE RIVER OPTIONS.
1.4.1
CONVERSION ON THE EFFECTIVE DATE. On the Effective Date, by
virtue of the Transaction, and without any action on the part
of any holder of a Snake River Option, each Snake River Option
that is then outstanding and unexercised will be converted
into and become an option (a "Converted Option") to purchase
Intermountain Common Stock on the same terms and conditions as
are in effect with respect to the Snake River Option
immediately prior to the Effective Date, except that (A) each
such Converted Option may be exercised
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solely for shares of Intermountain Common Stock, (B) the
number of shares of Intermountain Common Stock subject to such
Converted Option will be equal to the number of shares of
Snake River Common Stock subject to such Snake River Option
immediately prior to the Effective Date multiplied by 1.265,
the product being rounded, if necessary, up or down to the
nearest whole share, and (C) the per-share exercise price for
each such Converted Option will be adjusted by dividing the
per share exercise price of the Snake River Option by 1.265,
and rounding up or down to the nearest cent.
1.4.2 FORM
S-8. Following the Effective Date, Intermountain will
promptly prepare and file with the SEC a Registration
Statement on Form S-8 or other appropriate form covering
shares of Intermountain Common Stock to be issued upon the
exercise of the Converted Options.
1.5 NO
FRACTIONAL SHARES. No fractional shares of Intermountain Common
Stock will be issued. In lieu of fractional shares, if any, each
holder
of Snake River Common Stock who is otherwise entitled to receive
a
fractional share of Intermountain Common Stock will receive an
amount
of cash equal to the product of such fractional share times
$31.00.
Such fractional share interests will not include the right to vote
or
receive dividends or any interest on dividends.
1.6 PAYMENT TO
DISSENTING SHAREHOLDERS. Proposed Dissenting Shares will
have the rights provided by Title 30, Chapter 1, Part 13 of the
IBCA.
1.7 DEPOSIT OF
CASH AND SHARES. On or before the Effective Date,
Intermountain will deposit, or will cause to be deposited, with
the
Exchange Agent, for the benefit of the holders of certificates
representing Snake River Common Stock, for exchange in accordance
with
this Section 1.7, (i) certificates representing the
Intermountain
Shares; (ii) such cash as will be necessary to pay the Per Share
Cash
Consideration; and (iii) the cash in lieu of fractional shares to
be
paid
in accordance with Section 1.5. Such cash and certificates for
Intermountain Shares, together with any dividends or distributions
with
respect thereto, are referred to in this Agreement as the
"Exchange
Fund."
1.8 CERTIFICATES.
1.8.1
LETTER OF TRANSMITTAL. As soon as practicable after the
Effective Date, Intermountain will cause the Exchange Agent to
mail to each holder of record of a certificate evidencing
Snake River Common Stock shares (a "Certificate") a form
letter of transmittal (which will specify that delivery will
be effected, and risk of loss and title to the Certificates
will pass, only upon delivery of the Certificates to the
Exchange Agent) and instructions for use in effecting the
surrender of the Certificates in accordance with Section 1.8.2
of this Agreement.
1.8.2
SURRENDER OF CERTIFICATES. Subject to Section 1.6, each
Certificate will, from and after the Effective Date, be deemed
for all corporate purposes to represent and evidence only the
right to receive the Merger Consideration (or to receive the
cash for fractional shares) to which the Snake River Common
Stock shares converted in accordance with the provisions of
this Section 1.8.2. Following the Effective Date, holders of
Certificates will exchange their Certificates in accordance
with instructions provided by the Exchange Agent pursuant to
Section 1.8.1 of this Agreement and together with a properly
completed and executed form of transmittal letter in order to
effect their exchange for, as applicable, (i) certificates
representing Intermountain Common Stock; (ii) a check
representing the Per Share Cash Consideration; and/or (iii) a
check representing the
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amount of cash in lieu of fractional shares, if any. Until a
Certificate is so surrendered, the holder will not be entitled
to receive any certificates evidencing Intermountain Shares or
the Per Share Cash Consideration or cash in lieu of fractional
shares.
1.8.3
ISSUANCE OF CERTIFICATES IN OTHER NAMES. Any person requesting
that any certificate evidencing Intermountain Shares be issued
in a name other than the name in which the surrendered
Certificate is registered, must: (1) establish to the Exchange
Agent's satisfaction the right to receive the certificate
evidencing Intermountain Shares and (2) either pay to the
Exchange Agent any applicable transfer or other taxes or
establish to the Exchange Agent's satisfaction that all
applicable taxes have been paid or are not required.
1.8.4
LOST, STOLEN, AND DESTROYED CERTIFICATES. With respect to a
Certificate that has been lost, stolen or destroyed, the
Exchange Agent will be authorized to issue a certificate
representing Intermountain Shares in exchange thereof, and/or
pay cash for the Per Share Cash Consideration or fractional
share in exchange thereof, if the holder provides the Exchange
Agent with: (1) satisfactory evidence that the holder owns
Snake River Common Stock and that the certificate representing
this ownership is lost, stolen, or destroyed, (2) any
appropriate affidavit the Exchange Agent may require, and (3)
any reasonable assurances that the Exchange Agent or
Intermountain may require.
1.8.5
RIGHTS TO DIVIDENDS AND DISTRIBUTIONS. After the Effective
Date, no holder of any Certificate will be entitled to receive
any dividends or other distributions otherwise payable to
holders of record of Intermountain Common Stock on any date
after the Effective Date, unless the holder (1) is entitled by
this Agreement to receive a certificate representing
Intermountain Common Stock and (2) has surrendered in
accordance with this Agreement his or her Certificates (or has
met the requirements of Section 1.8.4 above) in exchange for
certificates representing Intermountain Shares. Surrender of
Certificates will not deprive the holder of any dividends or
distributions that the holder is entitled to receive as a
record holder of Snake River Common Stock on a date before the
Effective Date. When the holder surrenders his or her
Certificates in exchange for Intermountain Shares, the holder
will receive the amount, without interest, of any cash
dividends and any
other distributions distributed after the
Effective Date on the whole number of Intermountain Shares
into which the holder's Snake River Common Stock was converted
at the Effective Date.
1.8.6
CHECKS IN OTHER NAMES. Any person requesting that a check for
the aggregate Per Share Cash Consideration or cash in lieu of
fractional shares be issued in a name other than the name in
which the Certificate surrendered in exchange for the cash is
registered, must establish to the Exchange Agent's
satisfaction the right to receive this cash.
1.8.7
AFFILIATES. Certificates that are surrendered for exchange by
any person constituting an "affiliate" of Snake River for
purposes of Rule 145 of the Securities Act will not be
exchanged for certificates representing Intermountain Shares
until Intermountain has received a written agreement from such
person as specified in Section 4.3.1.
1.8.8
UNDELIVERED CERTIFICATES. Any portion of the Exchange Fund
that remains unclaimed by shareholders of Snake River for six
months after the Effective Date may be paid to Intermountain.
To the extent so paid, holders of Snake River Common Stock who
have not, prior to such time, complied with the provisions of
this Section 1.8 will, from such
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time forward, look only to Intermountain for payment of the
Merger Consideration, the cash in lieu of fractional shares,
and/or unpaid dividends and distributions on the Intermountain
Shares deliverable with respect to each share of Snake River
Common Stock held by such holder as determined pursuant to
this Agreement, in each case, without any interest. Neither
Intermountain nor Snake River will be liable to any holder of
Snake River Common Stock for any amount properly delivered to
a public
official pursuant to applicable abandoned property,
escheat or similar laws.
SECTION 2.
CLOSING OF TRANSACTION
2.1 CLOSING.
The Closing will occur on the Effective Date. The Holding
Company Merger shall be consummated by the filing by the Idaho
Secretary of State of Articles of Merger, in the form required by
and
executed in accordance with the relevant provisions of the IBCA,
and by
the issuance of a Certificate of Merger by the Secretary of State
of
Idaho. Unless Intermountain and Snake River agree upon a later
date,
the Effective Date will be no later than the date ten (10)
Business
Days after the fulfillment or waiver of each condition precedent
set
forth in, and the granting of each approval (and expiration of
any
waiting period) required by Section 5 of this Agreement. If
Closing
does not occur on or prior to January 31, 2005 and the parties do
not
mutually agree in writing to extend the Closing, either party
may
terminate this Agreement in accordance with Section 7.1 of this
Agreement.
2.2 EVENTS OF
CLOSING. On the Effective Date, all properly executed
documents required by this Agreement will be delivered to the
proper
party, in form consistent with this Agreement. If any party fails
to
deliver a required document on the Effective Date or otherwise
defaults
under this Agreement on or prior to the Effective Date, then no
Transaction will occur unless the adversely affected party waives
the
default.
2.3 PLACE OF
CLOSING. The Closing will take place at the office of
Panhandle State Bank, 1000 Northwest Blvd., Coeur d'Alene, Idaho,
or
such other place as the parties agree, at 10:00 a.m. Pacific Time
on
the Effective Date.
2.4 PROCEDURE.
Panhandle will notify the Director and the FDIC of the
proposed
Effective Date for the Bank Merger. On or before the Business
Day immediately preceding the Closing, appropriately prepared
and
executed articles of merger with respect to the Holding Company
Merger
will be deposited in the office of the Idaho Secretary of State,
and
appropriately prepared and executed articles of merger with respect
to
the Bank Merger and related documents will have been deposited in
the
offices of the Director. On the Effective Date, the articles of
merger
with respect to the Holding Company Merger will be filed with
the
office of the Idaho Secretary of State, and the articles of merger
with
respect to the Bank Merger will be filed with the Director.
SECTION 3.
REPRESENTATIONS AND WARRANTIES
3.1
REPRESENTATIONS AND WARRANTIES. Snake River and Magic Valley
each
represent and warrant to Intermountain and Panhandle that, except
as
disclosed in a Schedule to this Agreement:
3.1.1
ORGANIZATION AND GOOD STANDING. Snake River is a corporation
duly organized, validly existing and in good standing under
the laws of the State of Idaho, is a registered bank holding
company pursuant to the BHC Act, and has all requisite power
and authority to own and operate its properties and to carry
on its businesses as now conducted. Each of
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its Subsidiaries is either a commercial bank or a corporation
duly organized, validly existing and in good standing under
the laws of its state of incorporation, and has all requisite
power and authority to own and operate its Properties and to
carry on its businesses as now conducted. The locations of all
offices, including approved and unopened offices of its
Subsidiaries, are listed in Schedule 1.
3.1.2
CORPORATE AUTHORITY. The execution, delivery and performance
of this Agreement does not and will not, and the consummation
by Snake River and/or Magic Valley of the Transaction will
not, constitute or result in: (1) a breach or violation of, or
a default under, either of their articles of incorporation or
bylaws; (2) a breach or violation of, or a default under, or
the acceleration of or the creation of a Lien (with or without
the giving of notice, the lapse of time or both) under, any
provision of any agreement, lease, contract, note, mortgage,
indenture, arrangement or other obligation ("Contracts") by
which either of them is bound or to which either of them is a
party; or (3) a material violation of any law, rule, ordinance
or regulation or judgment, decree, order, award, or
governmental or non-governmental permit or license to which
either of them is subject; or (4) any change in the rights or
obligations of any party under any of the Contracts. Schedule
2 contains a list of all consents Snake River and/or Magic
Valley must obtain from third parties under any Contracts
before consummation of the Transaction.
3.1.3
CAPITAL STOCK.
(i) The
authorized capital stock of Snake River consists
of 5,000,000 shares of Snake River Common Stock, par
value $5 per share, and 1,000,000 shares of Snake
River Preferred Stock, par value $5 per share. A
total of 542,263 shares of Snake River Common Stock
are issued and outstanding as of the date of this
Agreement, all of which were validly issued and are
fully paid and nonassessable. No shares of Snake
River Preferred Stock are issued and outstanding. As
of
the date of this Agreement, Snake River Options
with respect to 21,176 shares of Snake River Common
Stock have been granted and are outstanding.
(ii)
Magic Valley's authorized capital stock consists of
1,000,000 shares of common stock, par value $5.00 per
share, of which 523,232 shares currently are issued
and outstanding, all of which are validly issued to
Snake River, fully paid and nonassessable, except to
the extent of any assessment required under Section
26-1113 of the Banking Act.
(iii)
No unissued shares of
common stock or any other
securities of Snake River or Magic Valley, or any of
their Subsidiaries, are subject to any warrants,
options, conversion privileges, rights or commitments
of any character, kind or nature, except as set forth
in Schedule 3, and neither Snake River nor Magic
Valley has issued or is obligated to issue any
additional shares of common stock or any other
security to any other person, except as so disclosed.
3.1.4
SUBSIDIARIES. Except as listed in Schedule 4, Snake River has
no
Subsidiaries. The shares of capital stock of each of its
Subsidiaries are owned by it free and clear of all liens,
claims, encumbrances and restrictions on transfer.
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3.1.5
REPORTS AND FINANCIAL STATEMENTS.
(i) Filing of
Reports. Since January 1, 2003 (with
respect to Snake River) and since January 1, 2001
(with regard to each of Snake River's Subsidiaries),
Snake River and each of its Subsidiaries has filed
and will file all reports and statements, together
with any required amendments to these reports and
statements, that they were required to file with (1)
the Federal Reserve, (2) the FDIC, and (3) any other
applicable federal or state banking, insurance,
securities, or other regulatory authorities. Each of
these reports and statements, including the related
financial statements and exhibits, complied as to
form in all material respects with all applicable
statutes, rules and regulations as of their
respective dates.
(ii)
Delivery to Other Party of Reports. Snake River and
Magic Valley have delivered or otherwise made
available to Intermountain a copy of each
registration statement, offering circular, report,
definitive proxy statement or information statement
(collectively, its "Reports") under the Securities
Act of 1933, as amended, ("Securities Act"), the
Securities Exchange Act of 1934, as amended,
("Exchange Act"), and state securities and "Blue Sky"
laws (collectively, the "Securities Laws") filed,
used or circulated by either of them with respect to
periods since January 1, 2001, through the Execution
Date.
(iii)
Compliance with Securities Laws. As of their
respective dates (and without giving effect to any
amendments or modifications filed after the Execution
Date), each of the Reports, including the related
financial statements, exhibits and schedules, filed,
used or circulated before the Execution Date complied
(and each of the Reports filed after the Execution
Date, will comply) in all material respects with
applicable Securities Laws, and did not (or in the
case of reports, statements, or circulars filed after
the Execution Date, will not) contain any untrue
statement of a material fact or omit to state a
material fact required to be stated therein or
necessary to make the statements made therein, in
light of the circumstances under which they were
made, not misleading.
(iv)
Financial Statements. Each of Snake River's balance
sheets included in the Snake River Financial
Statements fairly presents (or, in the case of Snake
River Financial Statements for periods ending on a
date following the Execution Date, will fairly
present) the financial position of Snake River and
its Subsidiaries as of the date of the balance sheet.
Each of the statements of income, cash flows and
stockholders' equity included in the Snake River
Financial Statements fairly presents (or, in the case
of Snake River Financial Statements to be prepared in
accordance with Section 4.1.9, if required, or for
periods ending on a date following the Execution
Date, will fairly present) the results of operations,
stockholders' equity and cash flows, as the case may
be, of Snake River and its Subsidiaries for the
periods set forth in these statements (subject, in
the case of unaudited statements, to normal year-end
audit adjustments), in each case in accordance with
GAAP, except as may be noted in these statements.
3.1.6
PROPERTIES.
(i) Snake
River and its Subsidiaries are not a party to
any real property lease, whether as landlord, tenant,
guarantor or otherwise, except as disclosed in
Schedule 5. Except as disclosed or reserved against
in the Snake River Financial
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Statements or in Schedule 5, Snake River and/or one
of its Subsidiaries have good and marketable title,
free and clear of all Liens (other than Liens for
taxes not yet delinquent or pledges to secure
deposits) to all of the properties and assets,
tangible or intangible, reflected in the Snake River
Financial Statements as being owned or leased by any
of them as of the Execution Date. Except as disclosed
in Schedule 5, all buildings and structures on the
Property owned and the equipment located thereon are
in all material respects in good operating condition
and repair and conform in all respects to all
applicable laws, ordinances and regulations.
(ii)
To the knowledge of Snake River's Executive Officers,
all buildings and all fixtures, equipment and other
property and assets that are material to Snake
River's business on a consolidated basis are owned by
it or one of its subsidiaries or are held under
leases or subleases by it or one of its subsidiaries,
enforceable in accordance with their respective terms
(except as may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other laws
affecting creditors' rights generally or by general
equity principles).
(iii)
Schedule 1 lists all of its existing branches and
offices and all new branches or offices that Magic
Valley has applied to establish or purchase, along
with the estimated cost to establish or purchase
those new branches.
(iv)
Snake River has provided to Intermountain copies of
existing title policies held in its files relating to
the Property, and to the knowledge of its Executive
Officers, no exceptions, reservations, or
encumbrances have arisen or been created since the
date of issuance of those policies (other than Liens
for taxes not yet delinquent).
3.1.7
ENVIRONMENTAL MATTERS.
(i) For
purposes of this Section 3.1.7, the following
definitions apply:
(1) "Subject
Property" with respect to a party
means (i) all real property at which its
business has been conducted, and any
property where under any Environmental Law
it is deemed to be the owner or operator of
the property; (ii) any facility in which it
is the owner or operator of the property;
and (iii) all other real property that, for
purposes of any Environmental Law, it
otherwise could be deemed to be an owner or
operator of or as otherwise having control
over.
(2)
"Environmental Laws" means any federal,
state, local or foreign law, regulation,
order, decree, judgment, judicial opinion,
or any agreement between Snake River or any
of its Subsidiaries and any Governmental
Entity, presently in effect or subsequently
adopted relating to: (i) the manufacture,
generation, transport, use, treatment,
storage, recycling, disposal, release,
threatened release or presence of Hazardous
Substances, or (ii) the preservation,
restoration or protection of the
environment, natural resources or human
health.
(3) "Hazardous
Substances" means any substance,
material or waste that is (a) defined as a
"hazardous substance" in 42 USC Section
9601(14), (b) defined
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as a "pollutant or contaminant" in 33 USC
Section 1362(6), (c) defined as a "hazardous
waste" in 42 USC Section 6903(5), or (d)
petroleum or a petroleum product or any
other substance defined as "hazardous,"
"dangerous" or "toxic" under any federal or
state law or regulation enacted for the
protection of human health or the
environment; provided, however, that
supplies and
materials used by Snake River
and/or Magic Valley for general office
purposes are not Hazardous Substances.
(ii)
Except as disclosed in Schedule 6 and to the
knowledge of its Executive Officers, Snake River, its
Subsidiaries and the Subject Property are, and have
been, in compliance with all applicable Environmental
Laws, and no circumstances exist that with the
passage of time or the giving of notice would be
reasonably likely to result in noncompliance with
such Environmental Laws.
(iii)
Except as disclosed in Schedule 6 and to the
knowledge of its Executive Officers, none of the
following, and no reasonable basis for any of the
following, exists: pending or threatened claims,
actions, investigations, notices of non-compliance,
information requests or notices of potential
responsibility or proceedings involving Snake River,
any of its Subsidiaries or any Subject Property,
relating to:
(1) an
asserted liability of Snake River or any
of its Subsidiaries or any prior owner,
occupier or user of Subject Property under
any applicable Environmental Law or the
terms and conditions of any permit, license,
authority, settlement, agreement, decree or
other obligation arising under any
applicable Environmental Law;
(2) the
handling, storage, use, transportation,
removal or disposal of Hazardous Substances;
(3) the actual
or threatened discharge, release
or emission of Hazardous Substances from, on
or under or within Subject Property into the
air, water, surface water, ground water,
land
surface or subsurface strata; or
(4) personal
injuries or damage to property
related to or arising out of exposure to
Hazardous Substances.
(iv)
Except as disclosed in Schedule 6, no storage tanks
underground or otherwise are present on the Subject
Property or, if present, none of such tanks are
leaking and each of them is in full compliance with
all applicable Environmental Laws. With respect to
any Subject Property, neither Snake River nor any of
its Subsidiaries owns, possesses or controls any
PCBs, PCB-contaminated fluids, wastes or equipment,
or any material amount of asbestos or
asbestos-containing material. No Hazardous Substances
have been used, handled, stored, discharged, released
or emitted, or are threatened to be discharged,
released or emitted, at or on any Subject Property,
except in compliance with applicable Environmental
Laws.
(v) Except as
disclosed in Schedule 6, no part of the
Subject Property has been or is scheduled for
investigation or monitoring under any applicable
Environmental Law.
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(vi)
Except as disclosed in Schedule 6, to the knowledge
of its Executive Officers, no condition from, on or
under the Subject Property exists with respect to the
Subject Property that would require remediation under
applicable Environmental Laws.
3.1.8
TAXES. All tax returns and reports required by law to be filed
by Snake River and its Subsidiaries have been duly filed, and
all taxes, assessments, fees and other government charges upon
Snake River or any of its Subsidiaries or upon any of their
respective properties, assets, income or franchises that are
due and payable have been paid. The federal income portion of
such taxes have been paid in full as indicated in the tax
returns of Snake River and its Subsidiaries for the past five
years or adequate provision has been made for any such taxes
on its balance sheet in accordance with GAAP. No material
objections to returns or claims for additional taxes are being
asserted with respect to federal or state tax returns of Snake
River and its Subsidiaries for any prior years, except for
such audits, objections or claims which are being contested in
good faith, by appropriate proceedings and with establishment
of appropriate reserves, and which have been disclosed in
writing to the other parties to this Agreement. Except as set
forth in Schedule 7 or except as specified in the foregoing
sentence, in the past five years, there has been no past
audit, objection to returns, or claim for additional taxes.
3.1.9
ABSENCE OF REGULATORY ACTION. Neither Snake River nor any of
its Subsidiaries is, to the knowledge of its Executive
Officers, in material violation of any statute, rule or
governmental regulation applicable to them (including, without
limitation, the Community Reinvestment Act, Bank Secrecy Act,
Truth in Lending Act, Equal Credit Opportunity Act, and
statutes, rules and regulations governing the reporting of
taxpayer identification numbers of its customers). Neither
Snake River nor any of its Subsidiaries is a party to any
cease and desist order, written agreement or memorandum of
understanding with, or a party to any commitment letter or
similar undertaking to, or is subject to any order or
directive by, or is a recipient of any extraordinary
supervisory letter from, or has adopted any board resolutions
at the request of, federal or state regulatory authorities,
nor have they been advised by such authorities that they are
contemplating issuing or requesting any such order, agreement,
memorandum or similar document or undertaking.
3.1.10 ALLOWANCE
FOR LOAN LOSSES. In the opinion of its management,
the
allowance for loan and lease losses shown in the latest
Snake River Financial Statements is, and that which will be
stated in the Subsequent Snake River Financial Statements
prior to Closing will be, adequate to absorb its anticipated
loan losses.
3.1.11 MATERIAL
AGREEMENTS.
(i) Except for
arrangements made after the date and in
accordance with the terms of this Agreement, Snake
River and its Subsidiaries are not bound by any
material contract (as defined in Item 601(b)(10) of
Regulation S-K under the Securities Act) that: (1) is
to be performed after the date of this Agreement and
(2) has not been set forth in Schedule 8.
(ii)
Neither Snake River nor any of its Subsidiaries is in
default under any contract, agreement, commitment,
arrangement, lease, insurance policy, or other
instrument.
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3.1.12
COMPLIANCE WITH LAWS. Snake River and each of its Subsidiaries
has all material permits, licenses, certificates of authority,
orders, and approvals of, and has made all filings,
applications, and registrations with, federal, state, local,
and foreign governmental or regulatory bodies that are
required in order to permit Snake River or its Subsidiaries to
carry on their respective businesses as they are presently
conducted and the
absence of which, individually or in the
aggregate, can reasonably be expected to have a Material
Adverse Effect on them. All such material permits, licenses,
certificates of authority, orders and approvals are in full
force and effect, and, to the best knowledge of its Executive
Officers, no suspension or cancellation of any of them is
threatened.
3.1.13 KNOWLEDGE
AS TO CONDITIONS. Snake River knows of no reason why
the approvals, consents and waivers of governmental
authorities referred to in Section 5.1 of this Agreement
should not be obtained.
3.1.14 NO
MATERIAL ADVERSE EFFECT. Since December 31, 2003, (i) Snake
River and its Subsidiaries have conducted their respective
businesses only in the ordinary and usual course of business,
and (ii) there has not been any change in the financial
condition (which includes, without limitation, the condition
of assets, franchises, results of operations and prospects)
that has had or may reasonably be expected to have a Material
Adverse Effect on Snake River or any of its Subsidiaries.
3.1.15
COMPLETENESS OF REPRESENTATIONS. No representation or warranty
made by or with respect to Snake River or its Subsidiaries in
this Agreement (or in the Schedules to this Agreement)
contains any untrue statement of a material fact or omits to
state a material fact necessary to make the statements
contained in this Agreement (or in such Schedules) or in such
representation or warranty not misleading.
3.1.16 ASSET
CLASSIFICATION.
(i) Schedule 9
sets forth a list, accurate and complete
as of June 30, 2004,
except as otherwise expressly
noted in Schedule 9, and separated by category of
classification or criticism ("Asset Classification"),
of the aggregate amounts of loans, extensions of
credit and other assets of Snake River and its
Subsidiaries that have been criticized or classified
by any governmental or regulatory authority, by any
outside auditor, or by any internal audit.
(ii)
Except as shown in Schedule 9, no amounts of its
loans, extensions of credit or other assets that have
been
classified or criticized by any representative
of any governmental entity as "Other Assets
Especially Mentioned," "Substandard," "Doubtful,"
"Loss" or words of similar effect are excluded from
the amounts disclosed in the Asset Classification,
other than amounts of loans, extensions of credit or
other assets that were paid off or charged off by
Snake River or its Subsidiaries before the date of
this Agreement.
3.1.17
LITIGATION. Except as disclosed in Schedule 10, no material
litigation, proceeding or controversy before any court or
governmental agency is pending (other than routine foreclosure
proceedings), and there is no pending claim, action or
proceeding against Snake River or any of its Subsidiaries,
which is reasonably likely, individually or in the aggregate,
to have a Material Adverse Effect on them or to materially
hinder or delay consummation of the Transaction, and, to the
best knowledge of
Snake River's Executive
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Officers after reasonable inquiry, no such litigation,
proceeding, controversy, claim or action has been threatened
or is contemplated.
3.1.18
INSURANCE. Snake River and each of its Subsidiaries have taken
all requisite action (including the making of claims and the
giving of notices) under their respective directors' and
officers' liability insurance policy or policies in order to
preserve all rights under such policies with respect to all
matters known to them (other than matters arising in
connection with, and the transactions contemplated by, this
Agreement). Schedule 11 lists all directors' and officers'
liability insurance policies and other material insurance
policies maintained by Snake River or its Subsidiaries.
3.1.19 LABOR
MATTERS. Neither Snake River nor any of its Subsidiaries
is a party to, or is bound by, any collective bargaining
agreement, contract, or other agreement or understanding with
a labor union or labor organization. Neither Snake River nor
any of its Subsidiaries is the subject of any proceeding: (1)
asserting that they have committed an unfair labor practice or
(2) seeking to compel them to bargain with any labor
organization as to wages or conditions of employment. No
strike involving Snake River or its Subsidiaries is pending
or, to the knowledge of its Executive Officers, threatened.
Its Executive Officers are not aware of any activity involving
its employees seeking to certify a collective bargaining unit
or engaging in any other organizational activity.
3.1.20 EMPLOYEE
BENEFITS.
(i) For
purposes of this Agreement, "Plan" or "Plans",
individually or collectively, means any "employee
benefit plan," as defined in Section 3(3) of ERISA,
maintained by Snake River or Magic Valley, as the
case may be. Snake River and its Subsidiaries are not
now nor have ever been a contributing employer to or
sponsor of a multiemployer plan or a single employer
plan subject to Title IV of ERISA.
(ii)
Schedule 12 sets forth a list, as of the Execution
Date, of (a) all Plans, stock purchase plans,
restricted stock and stock option plans, and other
deferred compensation arrangements, and (b) all other
material employee benefit plans that cover employees
or former employees of Snake River and its
Subsidiaries (its "Compensation Plans"). True and
complete copies of the Compensation Plans (and, as
applicable, copies of summary plan descriptions,
governmental filings (on Form 5500 series or
otherwise), actuarial reports and reports under
Financial Accounting Standards Board Statement No.
106 relating to such Compensation Plans) covering its
current employees or those of its Subsidiaries
(collectively, "Employees"), including Plans and
related amendments, have been made available to
Intermountain.
(iii) All
of its Plans covering Employees (other than
"multi-employer plans" within the meaning of ERISA
Sections 3(37) or 4001(a)(3)), to the extent subject
to ERISA, are in substantial compliance with ERISA.
Each of its Plans that is an "employee pension
benefit plan" within the meaning of ERISA Section
3(2) ("Pension Plan") and that is intended to be
qualified under IRC Section 401(a), has received a
favorable determination letter from the Internal
Revenue Service, and Snake River is not aware of any
circumstances likely to result in revocation of any
such favorable determination letter. No litigation
relating to its Plans is pending or, to the knowledge
of its Executive Officers, threatened. Neither
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Snake River nor any of its Subsidiaries has engaged
in a transaction with respect to any Plan that could
subject it or any of its Subsidiaries to a tax or
penalty
imposed by either IRC Section 4975 or ERISA
Section 502(i) in an amount that would be material.
(iv)
All material contributions Snake River or any of its
Subsidiaries are or were required to make under the
terms of any of its Plans have been timely made or
have been reflected in the Snake River Financial
Statements. Neither any of its Pension Plans nor any
single-employer plan of any of its ERISA Affiliates
has an "accumulated funding deficiency" (whether or
not waived) within the meaning of IRC Section 412 or
ERISA Section 302. Neither Snake River nor any of its
Subsidiaries or its ERISA Affiliates has provided, or
is required to provide, security to any Pension Plan
or to any single-employer plan of an ERISA Affiliate
under IRC Sections 401(a)(29) or 412(f)(3) or ERISA
Sections 306, 307 or 4204.
(v) Except as
disclosed in the Snake River Financial
Statements, neither Snake River nor any of its
Subsidiaries has any obligations for retiree health
and life benefits.
(vi)
No provision of the documents governing any Plan
contains restrictions on the rights of Snake River or
its Subsidiaries to amend or terminate any Plan
without incurring liability under the Plan other than
normal liabilities for benefits.
(vii)
Except as disclosed in the Snake River Financial
Statements or otherwise disclosed in this Agreement
or
in Schedule 12, the Transaction will not result in
(a) vesting, acceleration, or increase of any amounts
payable under any Compensation Plan, (b) any material
increase in benefits under any Compensation Plan or
(c) payment of any severance or similar compensation
under any Compensation Plan.
(viii) Neither
Snake River nor Magic Valley maintains an
executive supplemental retirement plan.
3.1.21 BROKER'S
OR FINDER'S FEES. Except for the fees of Hovde deemed
by its board to be required to obtain a fairness opinion and
related advice from Hovde to effect the Transaction, no agent,
broker, person or firm acting on behalf of Snake River or
Magic Valley, or under its authority, is or will be entitled
to any commission, broker's, finder's or financial advisory
fee in connection with the Transaction.
3.2
REPRESENTATIONS AND WARRANTIES OF INTERMOUNTAIN. Except as
disclosed in
a schedule to this Agreement, Intermountain and Panhandle each
represent and warrant to Snake River:
3.2.1
ORGANIZATION AND GOOD STANDING. Intermountain is a corporation
duly organized, validly existing and in good standing under
the laws of the State of Idaho, is a registered bank holding
company pursuant to the BHC Act, and has all requisite power
and authority to own and operate its properties and to carry
on its businesses as now conducted. Each of its Subsidiaries
is either a commercial bank or a corporation duly organized,
validly existing and in good standing under the laws of its
state of incorporation, and has all requisite power and
authority to own and operate its Properties and to carry on
its businesses as now conducted.
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3.2.2
CORPORATE AUTHORITY. The execution, delivery and performance
of this Agreement does not and will not, and the consummation
by Intermountain and/or Panhandle of the Transaction will not,
constitute or result in: (1) a breach or violation of, or a
default under, either of their articles of incorporation or
bylaws; (2) a breach or violation of, or a default under, or
the acceleration of or the creation of a Lien (with or without
the giving of notice, the lapse of time or both) under, any
provision of any Contracts by which either of them is bound or
to which either of them is a party; or (3) a material
violation
