___________________________________________________________________________
PURCHASE AND SALE AGREEMENT
by and between
ABN AMRO BANK N.V.
and
BANK OF AMERICA CORPORATION
___________________________
Dated as of April 22, 2007
___________________________
___________________________________________________________________________
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TABLE OF CONTENTS
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PAGE
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ARTICLE
I
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DEFINITIONS
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1
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1.1
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Certain
Defined Terms
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1
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ARTICLE
II
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THE
SALE
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7
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2.1
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The
Sale
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7
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2.2
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Purchase
Price
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7
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2.3
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Closing
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8
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ARTICLE
III
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REPRESENTATIONS AND WARRANTIES OF
SELLER
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9
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3.1
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Corporate
Organization
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9
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3.2
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Capitalization
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10
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3.3
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Authority;
No Violation
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10
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3.4
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Consents and
Approvals
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11
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3.5
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Reports
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11
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3.6
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Financial
Statements
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12
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3.7
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Undisclosed
Liabilities
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13
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3.8
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Absence of
Certain Changes or Events
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13
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3.9
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Legal
Proceedings
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13
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3.10
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Taxes and
Tax Returns
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13
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3.11
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Employee
Benefit Plans
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15
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3.12
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Employee
Matters
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18
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3.13
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Compliance
with Applicable Law
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18
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3.14
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Material
Contracts
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19
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3.15
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Agreements
with Regulatory Agencies
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19
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3.16
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Investment
Securities
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20
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3.17
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Derivative
Instruments
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20
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3.18
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Environmental
Liability
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20
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3.19
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Insurance
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21
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3.20
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Properties
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21
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3.21
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Intellectual
Property
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21
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3.22
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Sufficiency
of Assets
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22
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3.23
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No
Investment Adviser
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22
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3.24
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Broker-Dealer
Subsidiaries
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22
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3.25
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Intercompany
Arrangements; Interested Party
Transactions
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23
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3.26
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Divested
Businesses
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23
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3.27
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Broker’s Fees
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23
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ARTICLE
IV
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REPRESENTATIONS AND WARRANTIES OF
PURCHASER
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23
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4.1
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Corporate
Organization
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23
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4.2
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Authority;
No Violation
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23
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4.3
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Consents and
Approvals
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24
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4.4
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Financial
Wherewithal
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24
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- i
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TABLE OF
CONTENTS
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(continued)
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PAGE
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4.5
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Legal
Proceedings
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25
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4.6
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Agreements
with Regulatory Agencies
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25
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4.7
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Broker’s
Fees
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25
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4.8
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Acquisition
of Company Common Stock for
Investment
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25
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ARTICLE
V
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COVENANTS
RELATING TO CONDUCT OF BUSINESS
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25
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5.1
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Conduct of
Business of the Company Prior to the
Closing
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25
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5.2
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Forbearances
of Seller
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26
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5.3
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No
Solicitation
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29
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ARTICLE
VI
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ADDITIONAL
AGREEMENTS
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31
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6.1
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Regulatory
Matters
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31
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6.2
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Access to
Information
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32
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6.3
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Public
Disclosure
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33
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6.4
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Employees;
Employee Benefit Matters
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33
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6.5
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Nonsolicit of
Employees
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35
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6.6
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Additional
Agreements
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36
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6.7
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Transition
Services Agreement
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36
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6.8
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Additional
Agreements Regarding Tax Matters
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36
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6.9
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Post-Closing
Confidentiality
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39
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6.10
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Cooperation
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40
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6.11
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Use of
Name
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40
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6.12
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Settlement of
Intercompany Accounts; Termination of
Intercompany
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Agreements;
Conversion of Certain Company Debt into
Equity;
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Funding
Subsidiaries
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40
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6.13
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Specified
Transfers
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42
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6.14
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No Additional
Representations
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42
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6.15
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Director and
Officer Indemnification
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43
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ARTICLE
VII
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CONDITIONS
PRECEDENT
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43
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7.1
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Conditions to
Each Party’s Obligation to Effect the
Closing
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43
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7.2
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Conditions to
Obligations of Purchaser
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44
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7.3
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Conditions to
Obligations of Seller
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44
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ARTICLE
VIII
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TERMINATION
AND AMENDMENT
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45
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8.1
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Termination
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45
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8.2
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Effect of
Termination
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46
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8.3
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Amendment
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46
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8.4
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Extension;
Waiver
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46
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ARTICLE
IX
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INDEMNIFICATION
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47
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9.1
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No Survival
of Representations, Warranties and
Covenants
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47
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- ii
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TABLE OF
CONTENTS
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(continued)
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PAGE
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9.2
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Indemnification by
Seller
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47
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9.3
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Indemnification by
Purchaser
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48
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9.4
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Tax
Indemnification
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48
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9.5
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Indemnification
Procedure
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48
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9.6
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Certain
Offsets; Tax Treatment of Payments
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50
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9.7
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Exclusive
Remedy
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51
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ARTICLE
X
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GENERAL
PROVISIONS
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51
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10.1
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Expenses
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51
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10.2
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Notices
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51
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10.3
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Interpretation; Absence of
Presumption
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52
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10.4
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Counterparts
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53
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10.5
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Entire
Agreement
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53
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10.6
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Governing Law
and Venue; Waiver of Jury Trial
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53
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10.7
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Specific
Performance
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55
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10.8
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Severability
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55
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10.9
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Assignment;
Third-Party Beneficiaries
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55
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PURCHASE AND SALE
AGREEMENT
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This PURCHASE
AND SALE AGREEMENT, dated as of April 22, 2007 (this “
Agreement ”), is by and between ABN AMRO Bank N.V., a
company organized under the laws of The Netherlands (“
Seller ”), and Bank of America Corporation, a Delaware
corporation (“ Purchaser
”).
WHEREAS,
Seller holds, directly or indirectly, all of the outstanding
shares, par value $1.00 per share, of common stock (the “
Company Common Stock ”) of ABN AMRO North America
Holding Company, a Delaware corporation (the “ Company
”);
WHEREAS,
Seller desires to sell and transfer, and Purchaser desires to
purchase, the Company Common Stock, on the terms and subject to the
conditions set forth in this Agreement;
and
WHEREAS, the
parties desires to make certain representations, warranties,
covenants and agreements in connection with this
Agreement.
NOW,
THEREFORE, in consideration of the foregoing and the
representations, warranties, covenants and agreements set forth
herein, and for other good and valuable consideration, and
intending to be legally bound, the parties hereto agree as
follows:
1.1.
Certain Defined Terms . Unless the context otherwise
requires, the following terms, when used in this Agreement, shall
have the respective meanings specified below (such meanings to be
equally applicable to the singular and plural forms of the terms
defined):
“
Affiliate ” of a Person shall mean any other Person
that directly, or indirectly through one or more intermediaries,
controls, or is controlled by, or is under common control with,
such Person.
“
Affiliate Arrangements ” shall mean any agreement,
contract or arrangement between Seller and its Affiliates (other
than the Company and its Subsidiaries), on the one hand, and the
Company and its Subsidiaries, on the other
hand.
“
Agreed Claims ” shall have the meaning stated in
Section 9.5(c).
“
Agreement ” shall have the meaning stated in the
preamble to this document.
“
Balance Sheet ” shall have the meaning stated in
Section 3.6(a).
“
Balance Sheet Date ” shall have the meaning stated in
Section 3.6(a).
“
BHCA ” shall mean the Bank Holding Company Act of
1956, as amended.
“
Broker-Dealer Subsidiary ” shall have the meaning
stated in Section 3.24.
“
Business ” shall mean the businesses of the Company
and its Subsidiaries, other than the Excluded Business and any
Divested Business.
“
Business Day ” shall mean any day other than a
Saturday, Sunday or day on which banking institutions in New York,
New York are authorized or obligated pursuant to legal requirements
or executive order to be closed.
“
Bylaws ” shall mean the Bylaws of the Company, as
currently in effect.
“
Certificate of Incorporation ” shall mean the
Certificate of Incorporation of the Company, as currently in
effect.
“
Claim Certificate ” shall have the meaning stated in
Section 9.5(a).
“
Closing ” shall have the meaning stated in Section
2.3(a).
“
Closing Date ” shall mean the date on which the
Closing actually occurs.
“ Closing Income
Statement ” shall have the meaning stated in Exhibit
C.
“ Closing Net Income
” shall have the meaning stated in Exhibit
C.
“
Code ” shall mean the Internal Revenue Code of 1986,
as amended.
“
Company ” shall have the meaning stated in the first
Recital.
“
Company Benefit Plans ” shall have the meaning stated
in Section 3.11(a).
“
Company Confidential Information ” shall mean
confidential information and data (including confidential files,
customer lists, mailing lists, documentation or records) concerning
the customers and prospects, products and services, employees,
intellectual property (including trade secrets), technology,
financial or business plans and operations, and unpublished
confidential financial information of or relating to the Business,
the Company or the Company
Subsidiaries.
“
Company Common Stock ” shall have the meaning stated
in the recitals.
“
Company Employees ” shall have the meaning stated in
Section 6.4(a).
“
Company Financial Statements ” shall have the meaning
stated in Section 3.6(a).
“ Company Intellectual
Property ” shall have the meaning stated in Section
3.21.
“ Company-Only Plans
” shall have the meaning stated in Section
3.11(a).
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2-
“
Company Regulatory Agreement ” shall have the meaning
stated in Section 3.15.
“
Company Subsidiary ” and “ Company
Subsidiaries ” shall have the meaning stated in Section
3.1(b).
“
Confidentiality Agreement ” shall mean the
Confidentiality Agreement dated as of April 19, 2007 by and between
Seller and Purchaser (as it may be amended from time to
time).
“
Conforming Confidentiality Agreement ” shall mean an
agreement that contains confidentiality provisions that are no less
favorable to Seller than those contained in the Confidentiality
Agreement, and is enforceable by Seller and, after the Closing, by
the Company or Purchaser as an express third-party
beneficiary.
“
Controlled Group Liability ” means any and all
liabilities (i) under Title IV of ERISA, (ii) under Section 302 of
ERISA, (iii) under Sections 412 and 4971 of the Code, (iv) as a
result of a failure to comply with the continuation coverage
requirements of Section 601 et seq. of ERISA and Section 4980B of
the Code, or (v) under corresponding or similar provisions of
foreign laws or regulations, other than such liabilities that arise
solely out of, or relate solely to, the Company-Only Plans
identified as such in Section 3.11(a) of the Disclosure
Schedule.
“
Corporate Entity ” shall mean a bank, corporation,
partnership, limited liability company or other organization,
whether an incorporated or unincorporated
organization.
“
Covered Claim ” shall have the meaning stated in
Section 10.6(b).
“
Covered Taxes ” shall mean Taxes attributable to any
Excluded Business and Taxes resulting from the Specified
Transfers.
“
CRA ” shall mean the Community Reinvestment Act of
1997.
“
Damages ” shall mean all costs, expenses, damages,
liabilities, claims, demands, obligations, diminution in value,
fine, awards, judgments, losses, royalty, proceeding, deficiency,
interest, awards, judgments and penalties (including reasonable
expenses and attorneys’ fees and consultants’ fees and
expenses) suffered or incurred.
“
Disclosing Party ” shall have the meaning stated in
Section 6.9.
“
Disclosure Schedule ” shall mean the disclosure
schedule dated as of the date of the Agreement and delivered by
Seller to Purchaser prior to the execution and delivery of the
Agreement.
“
Divested Business ” shall mean any company, business,
product line, business unit or business operation that was owned,
operated or conducted by the Company or any Company Subsidiary (or
any predecessor thereto) or any former Subsidiary thereof, at any
time prior to the Closing and that is not owned, operated or
conducted by a Company or any Company Subsidiary as of the Closing
Date (without giving effect to any temporary or transitional
arrangements under any Transition Services Agreement or that
otherwise may be implemented in connection with
the
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3-
transactions
contemplated hereby to facilitate a smooth transition of
ownership), in each case, whether as a result of a sale, transfer,
distribution, contribution, conveyance, or other
disposition.
“
Employees ” shall have the meaning stated in Section
5.2(e).
“
ERISA ” shall have the meaning stated in Section
3.11(a).
“
Estimated Net Income ” shall have the meaning stated
in Exhibit C.
“
Excluded Business ” shall mean the businesses, assets
and liabilities of ABN AMRO WCS Holding Company and its
Subsidiaries.
“
Excluded Employees ” shall have the meaning stated in
Section 6.4(c).
“
Federal Court ” shall have the meaning stated in
Section 10.6(b).
“
Federal Reserve Board ” shall mean the Board of
Governors of the Federal Reserve
System.
“
Final Net Income ” shall have the meaning stated in
Exhibit C.
“
Form BD ” shall have the meaning stated in Section
3.24(b).
“
Former Excluded Employees ” shall have the meaning
stated in Section 6.4(d).
“
GAAP ” means accounting principles generally accepted
in the United States.
“
Governmental Entity ” shall mean any court,
administrative agency, arbitrator or commission or other
governmental, prosecutorial or regulatory authority or
instrumentality, or any SRO.
“
HSR Act ” shall mean the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as
amended.
“
Income Threshold ” shall have the meaning stated in
Exhibit C.
“
Indemnified Party ” shall have the meaning stated in
Section 9.5(a).
“
Indemnifying Party ” shall have the meaning stated in
Section 9.5(a).
“
Intellectual Property ” shall mean any or all of the
following: all patents, trademarks, trade names, service marks,
domain names, database rights, copyrights and any applications
therefore, mask works, know-how, trade secrets, and computer
software programs or applications (in both source code and object
code form).
“
Interim Period ” shall mean any taxable year or period
commencing on or prior to the Closing Date and ending after the
Closing Date.
“
IRS ” shall mean the U.S. Internal Revenue
Service.
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4-
“ Key
Employees ” shall have the meaning stated in Section
6.5.
“
Knowledge ” or “ knowledge ” with
respect to Seller shall mean the actual knowledge of those
individuals set forth on Exhibit B.
“
Leased Properties ” shall have the meaning stated in
Section 3.20.
“
Lien ” shall mean any lien, claim, charge, option,
encumbrance, mortgage, pledge or security interest or other
restriction of any kind.
“
Matching Period ” shall have the meaning stated in
Section 5.3(b).
“
Material Adverse Effect ” shall mean any event,
circumstance, change or effect that (i) has a material adverse
effect on the business, results of operations or financial
condition of the Business; or (ii) prevents Seller from
consummating the transactions contemplated hereby; provided
, however , that, with respect to clause (i), Material
Adverse Effect shall not be deemed to include effects to the extent
resulting from (A) changes, after the date hereof, in generally
accepted accounting principles or regulatory accounting
requirements applicable to depository institutions and their
holding companies generally, (B) changes, after the date hereof, in
laws, rules or regulations of general applicability to depository
institutions and their holding companies generally, or
interpretations thereof by courts or Governmental Entities, (C)
changes, after the date hereof, in global or national or regional
political conditions (including the outbreak of war or acts of
terrorism) or in general or regional economic or market conditions
affecting depository institutions and their holding companies
generally except to the extent that such changes in political,
economic or market conditions have a disproportionate adverse
effect on the Business, (D) public disclosure of this Agreement and
the transactions contemplated by this Agreement, (E) any action
taken by Seller, the Company or any of their respective
Subsidiaries which is expressly required pursuant to this
Agreement, or (F) any action taken or not taken to which the
Purchaser has expressly and specifically consented or which
Purchaser has expressly and specifically
requested.
“
Material Contracts ” shall have the meaning stated in
Section 3.14(a).
“
Materially Burdensome Regulatory Condition ” shall
have the meaning stated in Section
6.1(a).
“
Measurement Period ” shall have the meaning stated in
Exhibit C.
“
Multiemployer Plan ” shall have the meaning stated in
Section 3.11(b).
“
Multiple Employer Plan ” shall have the meaning stated
in Section 3.11(b).
“
National Bank Subsidiaries ” shall mean LaSalle Bank
N.A. and LaSalle Bank Midwest N.A.
“
New Plans ” shall have the meaning stated in Section
6.4(b).
“
New York Courts ” shall have the meaning stated in
Section 10.6(b).
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5-
“
OCC ” shall mean the U.S. Office of the Comptroller of
the Currency.
“
Owned Properties ” shall have the meaning stated in
Section 3.20.
“
PBGC ” shall have the meaning stated in Section
3.11(f).
“
Permitted Encumbrances ” shall have the meaning stated
in Section 3.20.
“
Person ” shall mean any individual, Corporate Entity
or Governmental Entity.
“
Post-Closing Period ” shall mean any taxable year or
period that begins after the Closing Date, and, with respect to any
Interim Period, the portion of such Interim Period commencing after
the Closing Date.
“
Pre-Closing Period ” shall mean any taxable year or
period that ends on or before the Closing Date, and, with respect
to any Interim Period, the portion of such Interim Period ending on
and including the Closing Date.
“
Process Agent ” shall have the meaning stated in
Section 10.6(d).
“
Purchase Price ” shall have the meaning stated in
Section 2.2.
“
Purchaser ” shall have the meaning stated in the
preamble.
“
Purchaser Indemnitees ” shall have the meaning stated
in Section 9.2.
“
Purchaser Material Adverse Effect ” shall mean, with
respect to Purchaser, any effect that prevents, or would be
reasonably likely to prevent, Purchaser from consummating the
transactions contemplated hereby.
“
Purchaser Representatives ” shall have the meaning
stated in Section 6.2(a).
“
Qualified Purchaser ” shall have the meaning stated in
Section 5.3(b).
“
Real Property ” shall have the meaning stated in
Section 3.20.
“
Regulatory Agencies ” shall have the meaning stated in
Section 3.5.
“
Reports ” shall have the meaning stated in Section
3.5.
“
Requisite Regulatory Approvals ” shall have the
meaning stated in Section 7.1(a).
“
Sale ” shall have the meaning stated in Section
2.1.
“
Seller ” shall have the meaning stated in the
preamble.
“
Seller Indemnitees ” shall have the meaning stated in
Section 9.3.
“
Solicitation Period ” shall have the meaning stated in
Section 5.3(b).
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6-
“
Specified Transfers ” shall have the meaning stated in
Section 6.13.
“
SRO ” shall mean any domestic or foreign securities,
broker-dealer, investment adviser and insurance industry
self-regulatory organization.
“
Subsidiary ” shall mean, when used with respect to any
party, any Corporate Entity which is consolidated with such party
for financial reporting purposes. “ Subsidiary
”, when used with respect to the Company, shall not include
any Corporate Entity which (i) is part of the Excluded Business,
(ii) part of a Divested Business or (iii) transferred by the
Company or any of its Subsidiaries to Seller or any of its
Subsidiaries (other than the Company and its Subsidiaries) as part
of the Specified Transfers.
“
Superior Proposal ” shall have the meaning stated in
Section 5.3(b).
“
Tax ” or “ Taxes ” shall mean all
federal, state, local, and foreign income, excise, gross receipts,
gross income, ad valorem, profits, gains, property, capital, sales,
transfer, use, value-added, stamp, documentation, payroll,
employment, severance, withholding, duties, license, intangibles,
franchise, backup withholding, environmental, occupation,
alternative or add-on minimum taxes, imposed by any Governmental
Entity, and other taxes, charges, levies or like assessments, and
including all penalties and additions to tax and interest
thereon.
“
Tax Data ” shall have the meaning stated in Section
6.8(h).
“
Tax Documentation ” shall have the meaning stated in
Section 6.8(h).
“
Tax Return ” shall mean any return, declaration,
report, statement, information statement and other document filed
or required to be filed with respect to Taxes, including any
schedule or attachment thereto, and including any amendment
thereof.
“
Transition Services Agreement ” shall mean any
transition services agreement entered into pursuant to Section
6.7.
ARTICLE II
THE SALE
2.1. The
Sale . Upon the terms and subject to the conditions set forth
in this Agreement, at the Closing, Seller shall (or shall cause its
applicable Subsidiaries to) sell, assign, transfer, convey and
deliver to Purchaser, and Purchaser shall purchase and acquire from
Seller and its applicable Subsidiaries, all right, title and
interest in, to and under all of the outstanding shares of Company
Common Stock, free and clear of any Liens or rights or claims of
others (the “ Sale
”).
2.2.
Purchase Price . In consideration for the Company Common
Stock, at the Closing, Purchaser shall pay to Seller an aggregate
of U.S.$21,000,000,000 (twenty-one billion) in cash (the “
Purchase Price ”) as adjusted pursuant to Exhibit
C.
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2.3.
Closing .
(a) Subject to the terms and conditions of this Agreement, the
closing of the sale of the Company Common Stock to the Purchaser
(the “ Closing ”) shall take place as soon as
practicable, and in any event no later than the first Business Day
of the next calendar month following the month in which the
conditions set forth in Article VII hereof (other than conditions
to be satisfied at Closing, but subject to their satisfaction) have
been satisfied or waived (subject to applicable law), unless
extended by mutual agreement of the parties. The Closing shall take
place at the offices of Wachtell, Lipton, Rosen & Katz, 51 West
52 nd Street, New York, New York 10019, or at such other
location as the parties hereto may
agree.
(b) At the Closing:
(i) Purchaser shall:
(A) pay to Seller by wire transfer, to an account designated by
Seller not less than two Business Days prior to the Closing,
immediately available funds in an amount equal to the Purchase
Price as adjusted pursuant to Exhibit C;
and
(B) deliver the certificate contemplated by Section
7.3(c).
(ii) Seller shall:
(A) deliver to Purchaser, free and clear of any Liens or rights or
claims of others, the stock certificate representing the Company
Common Stock, duly endorsed in blank (or accompanied by duly
executed stock powers) and with any required stock transfer stamps
affixed thereto;
(B) deliver to Purchaser all books and records of the Business in
the possession of Seller or any of its Subsidiaries, other than (1)
books and records that Seller or any of its Subsidiaries is
required by Law to retain (in which case Seller shall deliver
copies thereof to Seller); and (2) personnel and employment records
for employees and former employees of the Seller or any of its
Subsidiaries who are not Transferred Entity Employees;
provided that Seller and its Subsidiaries shall have the
right to retain a copy of all such books and records to the extent
reasonably necessary for, and for use in connection with, Tax,
regulatory, litigation or other legitimate, non-competitive
purposes; and
(
C) deliver
the certificates contemplated by Sections 7.2(c) and
7.2(d).
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ARTICLE
III
REPRESENTATIONS AND WARRANTIES OF
SELLER
Except as
disclosed in the Disclosure Schedule (it being agreed that
disclosure in any Section of the Disclosure Schedule shall apply
only to the indicated Section of this Agreement, except to the
extent that it is reasonably apparent on the face of the disclosure
that such disclosure is relevant to another Section of this
Agreement), Seller represents and warrants to Purchaser that the
following is true and correct:
3.1.
Corporate
Organization
.
(a) The Seller has been duly incorporated and is validly existing
as a public company with limited liability under the laws of The
Netherlands. The Company is a corporation duly organized, validly
existing and in good standing under the laws of the jurisdiction of
its organization. Each of Seller and the Company has the corporate
or other organizational power and authority to own or lease all of
its properties and assets and to carry on its business as it is now
being conducted, and is duly licensed or qualified to do business
in each jurisdiction in which the nature of the business conducted
by it or the character or location of the properties and assets
owned or leased by it makes such licensing or qualification
necessary, except where the failure to be so licensed or qualified
would not reasonably be expected to, individually or in the
aggregate, have a Material Adverse Effect. The Company is duly
registered as a bank holding company under the BHCA and is a
financial holding company pursuant to Section 4(l) of the BHCA and
meets in all material respects the applicable requirements for
qualification as such. True and complete copies of the Certificate
of Incorporation and Bylaws, as in effect as of the date of this
Agreement, have previously been furnished or made available to
Purchaser. The Company is not in violation in any material respect
of any of the provisions of the Certificate of Incorporation or
Bylaws.
(b) Section 3.1(b) of the Disclosure Schedule sets forth a complete
and correct list as of the date hereof of all the Subsidiaries of
the Company (each a “ Company Subsidiary ” and
collectively the “ Company Subsidiaries ”). The
shares of Company Preferred Stock held by Persons other than the
Company and its Subsidiaries have a liquidation preference of no
more than $200,000,000. All of the outstanding shares of capital
stock or other securities evidencing ownership of, or an equity
ownership in, the Company Subsidiaries are validly issued, fully
paid and nonassessable and such shares or other securities are
owned entirely by the Company or a wholly owned Company Subsidiary,
free and clear of any Lien with respect thereto. There are no
outstanding subscriptions, options, warrants, puts, calls, rights,
exchangeable or convertible securities or other commitments or
agreements of any character relating to the issued or unissued
capital stock or other securities or ownership or equity interests
of any Company Subsidiary, or otherwise obligating any Company
Subsidiary to issue, transfer, sell, purchase, redeem or otherwise
acquire any such stock, securities or interests. Each Company
Subsidiary (i) is a duly organized and validly existing
corporation, partnership or limited liability company or other
legal entity under the laws of its jurisdiction of organization,
(ii) is duly qualified to do business and is in good standing in
all jurisdictions (whether federal, state, local or foreign) where
its ownership or leasing of property or the conduct of its business
requires it to be so qualified (except for jurisdictions in which
the failure to be so qualified
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9-
would not reasonably
be expected to, individually or in the aggregate, have a Material
Adverse Effect) and (iii) has all requisite corporate or other
legal entity power and authority to own or lease its properties and
assets and to carry on its business as now conducted. Except for
its interests in the Company Subsidiaries, the Company does not
own, directly or indirectly, any capital stock, membership
interest, partnership interest, joint venture interest or other
equity interest with a fair market value as of the date of this
Agreement in excess of $25 million in any Person other than in the
ordinary course of business.
3.2.
Capitalization . The authorized capital stock of the Company
consists of 1,000 shares of Company Common Stock, of which 1,000
are issued and outstanding and have been duly authorized and
validly issued, are fully paid, non-assessable and free of
preemptive rights, and 2,987,538 shares of Company preferred stock,
of which 1,562,500 are issued and outstanding and have been duly
authorized and validly issued. The shares of Company preferred
stock held by Persons other than the Company and its Subsidiaries
have a liquidation preference of no more than $200,000,000. All of
the Company Common Stock is owned by Seller, free and clear of any
Liens. Except as set forth above, no shares of capital stock or
other voting securities, equity securities or other ownership or
equity interests of the Company are issued, reserved for issuance
or outstanding. There are no outstanding subscriptions, options,
warrants, puts, calls, rights, exchangeable or convertible
securities or other commitments or agreements of any character
relating to the issued or unissued capital stock or other
securities or ownership or equity interests of the Company, or
otherwise obligating the Company to issue, transfer, sell,
purchase, redeem or otherwise acquire any such stock, securities or
interests.
3.3.
Authority; No Violation .
(a) Seller has full corporate power and authority to execute and
deliver this Agreement and to consummate the transactions
contemplated hereby. The execution and delivery of this Agreement
and the consummation of the transactions contemplated hereby have
been duly and validly approved by the supervisory and managing
boards of Seller. No other corporate proceedings (including any
approvals of Seller’s stockholders) on the part of Seller are
necessary to approve this Agreement and to consummate the
transactions contemplated hereby. This Agreement has been duly and
validly executed and delivered by Seller. Assuming due
authorization, execution and delivery by Purchaser, this Agreement
constitutes a valid and binding obligation of Seller, enforceable
against Seller in accordance with its terms, except as such
enforcement may be limited by (i) the effect of bankruptcy,
insolvency, reorganization, receivership, conservatorship,
arrangement, moratorium or other laws affecting or relating to the
rights of creditors generally, or (ii) the rules governing the
availability of specific performance, injunctive relief or other
equitable remedies and general principles of equity, regardless of
whether considered in a proceeding in equity or at
law.
(b) Neither the execution and delivery of this Agreement by Seller
nor the consummation by Seller of the transactions contemplated
hereby, nor compliance by Seller with any of the terms or
provisions hereof, will (i) violate any provision of the
Certificate of Incorporation or Bylaws or similar organizational
documents of Seller or the Company or any of their respective
Subsidiaries, (ii) assuming that the consents, approvals and
filings referred to in Section 3.4 are duly obtained and/or made,
(x) violate any statute, code, ordinance, rule, regulation,
judgment, order, writ, decree or injunction applicable to Seller,
the Company or any
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10-
of their respective
Subsidiaries or any of their respective properties or assets or (y)
violate, conflict with, result in a breach of any provision of or
the loss of any benefit under, constitute a default (or an event
which, with notice or lapse of time, or both, would constitute a
default) under, result in the termination of or a right of
termination or cancellation under or in any payment conditioned, in
whole or in part, on a change of control of the Company or any of
its Subsidiaries or approval or consummation of transactions of the
type contemplated hereby, accelerate the performance required by or
rights or obligations under, or result in the creation of any Lien
upon any of the respective properties or assets of the Company or
any of its Subsidiaries under, any of the terms, conditions or
provisions of any note, bond, mortgage, indenture, deed of trust,
license, lease, agreement, contract, or other instrument or
obligation to which Seller, the Company or any of their respective
Subsidiaries is a party, or by which they or any of their
respective properties, assets or business activities may be bound
or affected, except (in the case of clause (ii)(y) above) for such
violations, conflicts, breaches, defaults or the loss of benefits
which would not reasonably be expected to, individually or in the
aggregate, have a Material Adverse
Effect.
3.4.
Consents and Approvals . Except for (i) the filing of any
required applications or notices with the Federal Reserve Board
under the BHCA or the Federal Reserve Act, as amended, and approval
of such applications and notices, (ii) the filing of any required
applications, filings or notices with any other U.S. federal or
state banking, broker-dealer, insurance or other U.S. regulatory or
self-regulatory authorities or instrumentalities, (iii) any
consents, authorizations, approvals, filings or exemptions in
connection with compliance with the rules and regulations of any
applicable industry SRO, and the rules of the Nasdaq, or that are
required under U.S. consumer finance, mortgage banking and other
similar laws, (iv) any consents, authorizations, approvals, filings
with any federal authority or instrumentality, (v) any notices or
filings (and, if required, approvals) under the HSR Act, and (vi)
any consents, approvals, filings or registration, the absence of
which would not reasonably be expected to, individually or in the
aggregate, have a Material Adverse Effect, no consents or approvals
of or filings or registrations with any Governmental Entity are
necessary in connection with (A) the execution and delivery by
Seller of this Agreement and (B) the consummation of the
transactions contemplated by this
Agreement.
3.5.
Reports . The Company and each of its Subsidiaries have,
filed all reports, forms, correspondence, registrations and
statements, together with any amendments required to be made with
respect thereto (“ Reports ”), that they were
required to file since January 1, 2005 with (i) any SRO, (ii) the
Federal Reserve Board, (iii) the Federal Deposit Insurance
Corporation, (iv) the OCC and (v) any other federal, state or
foreign governmental or regulatory agency or authority (the
agencies and authorities identified in clauses (i) through (v),
inclusive, are, collectively, the “ Regulatory
Agencies ”), and all other reports and statements
required to be filed by them since January 1, 2005, including any
report or statement required to be filed pursuant to the laws,
rules or regulations of the United States, any state, or any
Regulatory Agency and have paid all fees and assessments due and
payable in connection therewith, except where the failure to file
such report, registration or statement or to pay such fees and
assessments would not reasonably be expected to, individually or in
the aggregate, have a Material Adverse Effect. Any such Report and
any statement regarding the Business, the Company or its
Subsidiaries made in any Report filed with or otherwise submitted
to any Regulatory Agency complied in all material respects with
relevant legal requirements, including as to content. Except for
normal examinations
-
11-
conducted by a
Regulatory Agency in the ordinary course of the business of the
Company and its Subsidiaries, there is no material pending
proceeding before, or, to the Knowledge of Seller, material
investigation by, any Regulatory Agency into the business or
operations of the Company or any of its Subsidiaries. There are no
unresolved violations, criticisms, or exceptions by any Regulatory
Agency with respect to any report or statement relating to any
examinations of the Company or any of its Subsidiaries, except for
any such violations, criticisms or exceptions are not, individually
or in the aggregate, material to the Company and its
Subsidiaries.
3.6.
Financial Statements .
(a) Seller has previously made available to Purchaser copies of the
following financial statements, copies of which are attached as
Schedule 3.6(a): (i) the audited consolidated statements of
condition, consolidated statements of income, consolidated
statements of stockholders’ equity and consolidated
statements of cash flows of the Company and its Subsidiaries as of
and for the fiscal year ended December 31, 2005 and December 31,
2006 (the “ Audited Financial Statements ”); and
(ii) the unaudited pro forma consolidated statement of condition,
and pro forma consolidated statement of income of the Business as
of and for the fiscal year ended December 31, 2006 (the “
Pro Forma Financial Statements ” and together with the
Audited Financial Statements, the “ Company Financial
Statements ”) (the unaudited pro forma consolidated
statement of condition as of December, 31, 2006, the “
Balance Sheet ” and December 31, 2006, the “
Balance Sheet Date ”). The Audited Financial
Statements fairly present in all material respects the consolidated
financial position and results of operations of the Company as of
the respective dates or for the respective periods therein set
forth and have been prepared in accordance with GAAP consistently
applied during the periods involved. The Pro Forma Financial
Statements fairly present in all material respects the consolidated
financial position and results of operations of the Business as of
the respective dates or for the respective periods therein set
forth and have been prepared in accordance with GAAP consistently
applied during the periods involved except for the absence of
footnote disclosure. The Company Financial Statements have been
prepared from, and are in accordance with, the books and records of
the Company and its Subsidiaries.
(b) Stockholders’ equity on the consolidated statement of
condition of the Company and its Subsidiaries as of December 31,
2006 included $394.534 million of preferred stock issued by
Subsidiaries of the Company.
(c) Seller maintains, with respect to the Business and the Company
and its Subsidiaries, a system of internal control over financial
reporting.
(d) Seller has implemented and maintains disclosure controls and
procedures (as defined in Rule 13a-15(e) of the Exchange Act) to
ensure that information material assessed at the level of Seller
and relating to Seller, including the Business, the Company and its
Subsidiaries, is made known to the chief executive officer and the
chief financial officer of Seller by others within those entities.
Section 3.6(d) of the Disclosure Schedule sets forth, based on
Seller’s most recent evaluation prior to the date hereof of
its internal control over financial reporting (as defined in Rule
13a-15(f) of the Exchange Act), (i) any significant deficiencies or
material weaknesses of Seller in the design or operation of
internal control over financial
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12-
reporting relating
to the Business, the Company and its Subsidiaries; and (ii) any
events of fraud, whether or not material assessed at the level of
Seller, that involve management or other employees who have a
significant role in the Company’s internal controls over
financial reporting and relate to the Business, the Company or its
Subsidiaries.
(e) The books
and records of the Company and its Subsidiaries have been, and are
being, maintained in all material respects in accordance with GAAP
and any other applicable legal and accounting requirements and
reflect only actual transactions. The minute books of the Company
and its Subsidiaries that have been made available to Purchaser
contain accurate records in all material respects of all corporate
actions of the Company and its Subsidiaries for the relevant
periods.
3.7.
Undisclosed Liabilities . Except for those liabilities that
are reflected or reserved against on the Balance Sheet, and except
for liabilities incurred since the Balance Sheet Date in the
ordinary course of business, neither Company nor any of its
Subsidiaries has any liability of any nature whatsoever (whether
absolute, accrued, contingent or otherwise and whether due or to
become due) that, individually or in the aggregate with any other
such liabilities, would reasonably be expected to have a Material
Adverse Effect.
3.8.
Absence of Certain Changes or Events . Since the Balance
Sheet Date: (i) the Company and its Subsidiaries have, in all
material respects, carried on their respective businesses in the
ordinary course consistent with their past practices; (ii) the
Company has not taken any of the actions that Seller has agreed not
to permit Company to take from the date hereof through the Closing
Date pursuant to Sections 5.2(a), (b), (c), (d), (f), (g), (h),
(i), (j) or (l) of this Agreement, and (iii) there have been no
events, circumstances, facts or occurrences that have had, or would
reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect.
3.9. Legal
Proceedings . None of Seller, the Company nor any of their
respective Subsidiaries is a party to or subject of any, and there
are no pending or, to the Knowledge of Seller, threatened, legal,
administrative, arbitral or other proceedings, claims, actions or
governmental or regulatory investigations of any nature against
Seller, the Company or any of their respective Subsidiaries that
would reasonably be expected to, individually or in the aggregate,
have a Material Adverse Effect. There is no material injunction,
order, judgment, regulatory restrictions (other than those of
general application that apply to similarly situated bank holding
companies) or decrees imposed upon Seller or its Subsidiaries (with
respect to the Business) or the Company or any Company
Subsidiaries, or the assets of the Company or any Company
Subsidiary.
3.10.
Taxes and Tax Returns . Except as would not reasonably be
expected to have, individually or in the aggregate, a Material
Adverse Effect:
(a) The Company and each of its Subsidiaries has duly and timely
filed or caused to be filed (including all applicable extensions)
all federal, state, foreign and local Tax Returns required to be
filed by it or with respect to it (all such Tax Returns being
accurate and complete) and has duly and timely paid or caused to be
paid on their behalf all Taxes that are due and payable other than
Taxes that are being contested in good faith, which have not been
finally determined, and are adequately reserved against or provided
for (in accordance with
-
13-
GAAP) on the most
recent consolidated financial statements of the Company. The
Company and its Subsidiaries do not have any liability for Taxes in
excess of the amount reserved or provided for on their financial
statements (but excluding, for this purpose only, any liability
reflected thereon for deferred Taxes to reflect timing differences
between Tax and financial accounting
methods).
(b) No jurisdiction where the Company and its Subsidiaries do not
file a Tax Return has made a claim in writing that any of the
Company and its Subsidiaries is required to file a Tax Return in
such jurisdiction.
(c) No Liens for Taxes exist with respect to any of the assets of
the Company and its Subsidiaries, except for statutory Liens for
Taxes not yet due and payable.
(d) There are no audits, examinations, disputes or proceedings
pending or threatened in writing with respect to, or claims or
assessments asserted or threatened in writing for, any material
amount of Taxes of the Company or any of its
Subsidiaries.
(e) There is no waiver or extension of the application of any
statute of limitations of any jurisdiction regarding the assessment
or collection of any Tax with respect to the Company and any of its
Subsidiaries, which waiver or extension is in
effect.
(f) All Taxes required to be withheld, collected or deposited by or
with respect to the Company and each of its Subsidiaries have been
timely withheld, collected or deposited, as the case may be, and to
the extent required by applicable law, have been paid to the
relevant Governmental Entity.
(g) To the extent the Company or any of its Subsidiaries has
participated in any reportable transaction, as defined in Treasury
Regulation Section 1.6011-4(b)(1), or any other transaction
required to be reported under a comparable provision of state,
local or foreign law, such transaction has been reported in
accordance with applicable law.
(h) Neither the Company nor any of its Subsidiaries is a party to,
is bound by, or has any obligation under, any Tax sharing,
allocation, indemnity or similar agreements or arrangement that
obligates it to make any payment computed by reference to the
Taxes, taxable income or taxable losses of any other
Person.
(i) Neither the Company nor any of its Subsidiaries (A) has been a
member of a group filing a consolidated, combined or unitary Tax
Return (other than a group the common parent of which is or was the
Company) or (B) has any liability for the Taxes of any person
(other than the Company or any of its Subsidiaries) under Treasury
Regulation Section 1.1502-6 (or any similar provision of state,
local or foreign law), as a transferee or successor, by contract or
otherwise;
(j) Neither the Company nor any of its Subsidiaries has been,
within the past two years or otherwise as part of a “plan (or
series of related transactions)” within the meaning of
Section 355(e) of the Code of which the transactions contemplated
in this Agreement are also a part, a “distributing
corporation” or a “controlled corporation”
(within the meaning of Section
-
14-
355(a)(1)(A) of the
Code) in a distribution of stock intended to qualify for Tax-free
treatment under Section 355 of the
Code.
(k) Neither the Company nor any of its Subsidiaries will be
required to include any item of income in, or exclude any item of
deduction from, taxable income for any Post-Closing Period as a
result of any (i) change in method of accounting for a Pre-Closing
Period under Section 481(c) of the Code (or any corresponding or
similar provision of state, local or foreign law), (ii)
“closing agreement” described in Section 7121 of the
Code (or any corresponding or similar provision of state, local or
foreign law), (iii) installment sale or open transaction
disposition or intercompany transaction made on or prior to the
Closing Date, or (iv) prepaid amount received on or prior to the
Closing Date.
(l) No Subsidiary of the Company is characterized as a
“foreign” corporation for U.S. federal income tax
purposes.
3.11.
Employee
Benefit Plans
.
(a) Section 3.11(a) of the Disclosure Schedule lists all material
“employee benefit plans,” as defined in Section 3(3) of
the Employee Retirement Income Security Act of 1974, as amended
(“ ERISA ”), whether or not subject to ERISA,
and all other material employee benefit, severance or executive
compensation plans, policies, practices, programs, arrangements, or
agreements, whether written or unwritten, that cover any current or
former directors, officers, employees or consultants of Company or
its Subsidiaries, or to which contributions must be made or
liabilities are outstanding thereunder for current or former
directors, officers, employees or consultants of Company or its
Subsidiaries, or to which any such individual is party
(collectively, the “ Company Benefit Plans ”).
For purposes hereof, each Company Benefit Plan that is sponsored by
Company or its Subsidiaries is referred to as a “
Company-Only Plan ”.
(b) None of the Company Benefit Plans is a “multiemployer
plan,” as defined in Section 4001(a)(3) of ERISA (a “
Multiemployer Plan ”) or a plan that has two or more
contributing sponsors at least two of whom are not under common
control (a “ Multiple EmployerPlan ”). None of
Company or any of its Subsidiaries, Seller or their respective
ERISA Affiliates has (i) contributed to or been obligated to
contribute to, at any time during the past six years, a
Multiemployer Plan or a Multiple Employer Plan, (ii) withdrawn in a
complete or partial withdrawal from any Multiemployer Plan or
Multiple Employer Plan or (iii) incurred any liability due to the
termination or reorganization of a Multiemployer Plan or a Multiple
Employer Plan.
(c) The Company and each of its Subsidiaries has reserved the right
to amend, terminate or modify at any time all Company Benefit Plans
providing for retiree health or life insurance
coverage.
(d) Except in each case for such items that individually or in the
aggregate would not have a Material Adverse Effect, (i) each
Company Benefit Plan and its administration is in material
compliance with its terms and all applicable laws, including ERISA
and the Code; (ii) each Company Benefit Plan that is intended to be
“qualified” under Section 401 of the Code has received
a favorable determination letter from the IRS to such effect and no
fact,
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circumstance or
event has occurred or exists since the date of such determination
letter that would adversely affect the qualified status of any such
Company Benefit Plan; and (iii) each Company Benefit Plan that is a
“nonqualified deferred compensation plan” subject to
Section 409A of the Code has been operated in compliance with
Section 409A of the Code since January 1, 2005, based upon a good
faith, reasonable interpretation of Section 409A of the Code and
the guidance issued by the Internal Revenue Service thereunder;
provided that no representation is being made under clause (iii)
with respect to final regulations under Section 409A of the Code
that were issued on April 10, 2007.
(e) All contributions (including all employer contributions and
employee salary reduction contributions), premiums and other
payments required to have been made under any of the Company
Benefit Plans to any funds or trusts established thereunder or in
connection therewith have been made by the due date thereof, other
than a failure to make contributions that would not have a Material
Adverse Effect, and with respect to any such contributions,
premiums or other payments required that are not yet due, to the
extent required by GAAP, adequate reserves are reflected on the
Balance Sheet or liability therefor was incurred in the ordinary
course of business consistent with past practice since the end of
such fiscal quarter.
(f) Except in each case for such items that individually or in the
aggregate would not have a Material Adverse Effect, (i) no
liability has been, or is reasonably expected to be, incurred under
Section 4062 of ERISA to the Pension Benefit Guaranty Corporation
(the “ PBGC ”) or to a trustee appointed under
Section 4042 of ERISA; and (ii) with respect to each
Company-Benefit Plan that is subject to Title IV or Section 302 of
ERISA or Section 412 or 4971 of the Code: (A) there does not exist
any accumulated funding deficiency within the meaning of Section
412 of the Code or Section 302 of ERISA, whether or not waived; (B)
as of the last day of the most recent fiscal plan year ended prior
to the date hereof, the fair market value of the assets of such
plan equals or exceeds the actuarial present value of all accrued
benefits under such plan (whether or not vested) on an accumulated
benefit obligation basis; (C) no reportable event within the
meaning of Section 4043(c) of ERISA for which the 30-day notice
requirement has not been waived has occurred, and the consummation
of the transactions contemplated by this agreement will not result
in the occurrence of any such reportable event; (D) all premiums to
the PBGC have been timely paid in full; (E) no liability (other
than for premiums to the PBGC) under Title IV of ERISA has been or
is reasonably expected to be incurred by Company or any of its
Subsidiaries; and (F) the PBGC has not instituted proceedings to
terminate any such plan and, to Company’s knowledge, no
condition exists that presents a material risk that such
proceedings will be instituted or which would constitute grounds
under Section 4042 of ERISA for the termination of, or the
appointment of a trustee to administer, any such
plan.
(g) None of Company, its Subsidiaries, the officers of Company or
the Company Benefit Plans which are subject to ERISA, any trusts
created thereunder or any trustee or administrator thereof, has
engaged in a “prohibited transaction” (as such term is
defined in Section 406 of ERISA or Section 4975 of the Code) or any
other breach of fiduciary responsibility that could subject
Company, its Subsidiaries or any officer of Company to any Tax or
penalty on prohibited transactions imposed by such Section 4975 or
to any liability under Section 502(i) or (1) of ERISA other than,
in each case, a Tax, penalty or liability that would not have a
Material Adverse Effect.
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(h) Except as would
not have a Material Adverse Effect or as set forth on Section
3.11(h) of the Disclosure Schedule, neither the execution and
delivery of this Agreement nor the consummation of the transactions
contemplated hereby will (either alone or in conjunction with any
other event) result in, cause the accelerated vesting, funding or
delivery of, or increase the amount or value of, any payment or
benefit to any employee, officer or director of Company or any of
its Subsidiaries, or result in any limitation on the right of
Company or any of its Subsidiaries to amend, merge, terminate or
receive a reversion of assets from any Company Benefit Plan or
related trust. Without limiting the generality of the foregoing,
except as would not have a Material Adverse Effect, no amount paid
or payable (whether in cash, in property, or in the form of
benefits) in connection with the transactions contemplated hereby
(either solely as a result thereof or as a result of such
transactions in conjunction with any other event) will be an
“excess parachute payment” within the meaning of
Section 280G of the Code. No Company-Only Plan provides for a
“gross up” or similar payments in respect of any Taxes
that may become payable under Section 409A or Section 4999(a) of
the Code.
(i) True, correct and complete copies of the following documents,
with respect to each Company Benefit Plan that is an
“employee benefit plan” within the meaning of Section
3(3) of ERISA and is subject to the provisions of ERISA, have, as
applicable, been delivered or made available to Purchaser by
Seller: (i) the written document evidencing such Company Benefit
Plan and the related trust documents or other funding arrangements,
and amendments, and (ii) the summary plan description thereof. No
later than 30 days following the date hereof, Seller will provide
Purchaser with true, correct and complete copies of the following
documents, with respect to all Company Benefit Plans to the extent
not previously provided: (1) the written document evidencing such
plan and the related trust documents or other funding arrangements,
and amendments, modifications or supplements thereto or, with
respect to any such plan that is not in writing, a written
description thereof; and (2) the most recent Forms 5500 and
schedules thereto; (3) the summary plan description and any
modifications thereto; (4) the most recent annual report, financial
statement and/or actuarial report; and (5) the most recent
determination letter from the IRS.
(j) There are no pending actions, claims or lawsuits which have
been asserted, instituted or, to Knowledge of Seller, threatened,
against the Company Benefit Plans, the assets of any of the trusts
under such plans or the plan sponsor or the plan administrator, or
against any fiduciary of Company Benefit Plans with respect to the
operation of such plans (other than routine benefit claims) which
could result in any liability to Company that would reasonably be
expected to have a Material Adverse
Effect.
(k) Except as would not have a Material Adverse Effect, all
Company-Only Plans subject to the laws of any jurisdiction outside
of the United States (i) have been maintained in accordance with
all applicable requirements, (ii) if they are intended to qualify
for special tax treatment meet all requirements for such treatment,
and (iii) if they are intended to be funded and/or book-reserved,
are fully funded and/or book reserved, as appropriate, based upon
reasonable actuarial assumptions.
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3.12.
Employee Matters .
(a) Neither Company nor any of its Subsidiaries is, or has over the
past five years been, a party to any collective bargaining
agreement or other labor union contract. No labor organization or
group of employees of the Company or any of its Subsidiaries has
made a pending demand for recognition or certification, and there
are no representation or certification proceedings or petitions
seeking a representation proceeding presently pending or threatened
to be brought or filed, with the National Labor Relations Board or
any other labor relations tribunal or authority. There are no
organizing activities, strikes, work stoppages, slowdowns,
lockouts, material arbitrations or material grievances, or other
material labor disputes pending or threatened against or involving
the Company or any of its
Subsidiaries.
(b) The Company and each of its Subsidiaries has complied in all
material respects with all applicable material laws relating to the
employment of employees, including those relating to wages, hours,
immigration, the payment of wages, and the classification of
employees as exempt or not exempt from the payment of overtime
under applicable law, the prohibitions against discrimination and
harassment, occupational safety and health, and leaves of absence,
except for such noncompliance as would not be material to the
Company and its Subsidiaries, taken as a
whole.
3.13.
Compliance with Applicable Law
.
(a) The Company and each Company Subsidiary and each of their
employees, and Seller and each of its Subsidiaries and their
employees insofar as it relates to the Business, hold all licenses,
registrations, franchises, permits and authorizations necessary for
the lawful conduct of their respective businesses and are and have
been in compliance with, and are not and have not been in violation
of, any applicable law, statute, order, rule, regulation, policy
and/or guideline of any Governmental Entity, except in each case
where the failure to hold such license, registration, franchise,
permit or authorization or such noncompliance or violation would
not reasonably be expected to, individually or in the aggregate,
have a Material Adverse Effect, and neither the Company nor any of
its Subsidiaries has knowledge of, or has received notice of any
violations of any of the above, except for such violations that
would not reasonably be expected to, individually or in the
aggregate, have a Material Adverse
Effect.
(b) Except as would not be material to the Company and its
Subsidiaries, taken as a whole, the Company and each of its
Subsidiaries have properly administered all accounts for which the
Company or any of its Subsidiaries acts as a fiduciary, including
accounts for which the Company or any of its Subsidiaries serves as
a trustee, agent, custodian, personal representative, guardian,
conservator or investment adviser, in accordance with the terms of
the governing documents, applicable state and federal law and
regulation and common law. None of the Company or any of its
Subsidiaries, or any director, officer or employee of the Company
or any of its Subsidiaries, has committed any breach of trust with
respect to any such fiduciary account that would be material to the
Company and its Subsidiaries, taken as a whole, and the accountings
for each such fiduciary account are true and correct in all
material respects and accurately reflect in all material respects
the assets of such fiduciary
account.
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(c) Each National
Bank Subsidiary is “well-capitalized” (as that term is
defined at 12 C.F.R. 6.4(b)(1) or the relevant regulation of the
institution’s primary federal bank regulator), and
“well managed” (as that term is defined at 12 C.F.R.
225.2(s)), and the institution’s CRA rating is no less than
“satisfactory.” Neither National Bank Subsidiary has
been informed that its status as “well-capitalized,”
“well managed” or “satisfactory” for CRA
purposes will change within one year. All deposit liabilities of
the National Bank Subsidiaries are insured by the Federal Deposit
Insurance Corporation to the fullest extent under the law. The
National Bank Subsidiaries have met all conditions of such
insurance, including timely payment of its
premiums.
3.14.
Material Contracts .
(a) Neither the Company nor any of its Subsidiaries is a party to
or bound by, as of the date hereof, any contract, arrangement,
commitment or understanding (whether written or oral) (i) that
would be a “material contract” (as such term is defined
in Item 601(b)(10) of Regulation S-K of the SEC) of the Company and
its Subsidiaries to be performed after the date of this Agreement
that has not been filed or incorporated by reference in the
periodic reports of Seller filed with the SEC prior to the date of
this Agreement or otherwise set forth on Section 3.14(a) of the
Disclosure Schedule, (ii) that contains (A) any material
non-competition or non-solicitation agreement, or any other
agreement or obligation which purports to limit or restrict in any
material respect the ability of the Company or its Affiliates
(including, after the Closing, Purchaser and its Affiliates) or
their businesses to solicit customers or the manner in which, or
the localities in which, all or any portion of the business of the
Company or its Affiliates (including, after the Closing, Purchaser
and its Affiliates) is or may be conducted or (B) any material
exclusive dealing agreement or any material agreement that grants
any right of first refusal or right of first offer or similar right
or that limits or purports to limit the ability of the Company or
any of its Affiliates (including, after the Closing, Purchaser and
its Affiliates) to own, operate, sell, transfer, pledge or
otherwise dispose of any material assets or business or (iii) with
or to a labor union or guild (including any collective bargaining
agreement). Each contract, arrangement, commitment or understanding
of the type described in this Section 3.14(a), whether or not set
forth in the Company Disclosure Schedule, and each Affiliate
Arrangement is referred to as a “ Material Contract
,” and neither the Company nor any of its Subsidiaries knows
of, or has received notice of, any violation of any Material
Contract by any of the other parties
thereto.
(b) (i) Each Material Contract is valid and binding on the Company
or its applicable Subsidiary and is in full force and effect, (ii)
the Company and each of its Subsidiaries has performed all of the
obligations required to be performed by it to date under each
Material Contract, and (iii) no event or condition exists that
constitutes or, after notice or lapse of time or both, will
constitute, a default on the part of the Company or any of its
Subsidiaries under any such Material Contract, in each case except
as would not reasonably be expected to have, individually or in the
aggregate, a Material Adverse
Effect.
3.15.
Agreements with Regulatory Agencies . Except as is not
material, neither the Company nor any Company Subsidiary, and none
of Seller or any of its Subsidiaries with respect to the Business,
is subject to any cease-and-desist or other order or enforcement
action issued by, or is a party to any written agreement, consent
agreement or memorandum of
understanding
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with, or is a party
to any commitment letter or similar undertaking to, or is subject
to any order or directive by, or since January 1, 2005 has been
ordered to pay any civil penalty by, or is a recipient of any
supervisory letter from, or has outstanding any board resolutions
adopted at the request or suggestion of any Regulatory Agency or
other Governmental Entity that restricts the conduct of its
business or that relates to its capital adequacy, its ability to
pay dividends, its credit or risk management policies, its
management or its business (each, whether or not set forth in the
Disclosure Schedule, a “ Company Regulatory Agreement
”), nor has the Company nor any of its Subsidiaries been
advised since January 1, 2005 by any Regulatory Agency or other
Governmental Entity that it is considering issuing or requiring any
such Company Regulatory Agreement.
3.16.
Investment Securities . Except as would not reasonably be
expected to, individually or in the aggregate, have a Material
Adverse Effect, (i) each of the Company and its Subsidiaries has
good and marketable title to all securities held by it (except
securities sold under repurchase agreements or held in any
fiduciary or agency capacity) free and clear of any Lien, except to
the extent such securities are pledged in the ordinary course of
business consistent with prudent business practices to secure
obligations of the Company or any of its Subsidiaries and except
for such defects in title or Liens that would not be material to
the Company and its Subsidiaries and (ii) such securities are
valued on the books of the Company and its Subsidiaries in
accordance with GAAP.
3.17.
Derivative Instruments . Except as would not reasonably be
expected to, individually or in the aggregate, have a Material
Adverse Effect, (i) all Derivative Transactions (as herein defined)
were entered into in the ordinary course of business consistent
with past practice and in accordance with prudent banking practices
and applicable rules, regulations and policies of any Regulatory
Agency and other policies, practices and procedures employed by the
Company and its Subsidiaries and with counterparties believed at
the time to be financially responsible and are legal, valid and
binding obligations of the Company or one of its Subsidiaries
enforceable against it in accordance with their terms (except as
may be limited by bankruptcy, insolvency, moratorium,
reorganization or similar laws affecting the rights of creditors
generally and the availability of equitable remedies), and are in
full force and effect, (ii) the Company and each of its
Subsidiaries have duly performed their obligations under the
Derivative Transactions to the extent required, and (iii) to the
Knowledge of Seller, there are no breaches, violations or defaults
or allegations or assertions of such by any party thereunder. As
used herein, “ Derivative Transactions ” means
any swap transaction, option, warrant, forward purchase or sale
transaction, futures transaction, cap transaction, floor
transaction or collar transaction relating to one or more
currencies, commodities, bonds, equity securities, loans, interest
rates, prices, values, or other financial or non-financial assets,
credit-related events or conditions or any indexes, or any other
similar transaction or combination of any of these transactions,
including collateralized any debt or equity instruments evidencing
or embedding any such types of transactions, and any related credit
support, collateral or other similar arrangements related to such
transactions.
3.18.
Environmental Liability . Except as would not reasonably be
expected to, individually or in the aggregate, have a Material
Adverse Effect, there are no pending or, to the knowledge of
Seller, threatened legal, administrative, arbitral or other
proceedings, claims, or actions against the Company or any of its
Subsidiaries seeking to impose, or that are reasonably likely to
result in, any liability or obligation of the Company or any of its
Subsidiaries under any
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20-
local, state or
federal environmental, health or safety statute, regulation, law
(including Common Law) or ordinance, including the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as
amended; and neither the Company nor any of its Subsidiaries is
subject to any agreement, order, judgment, decree, letter or
memorandum by or with any Governmental Entity or third party
imposing any liability or obligation on such entity with respect to
any of the foregoing.
3.19.
Insurance . The Company has in full force and effect the
insurance coverage with respect to its business as of the date
hereof set forth in Section 3.19 of the Disclosure
Schedule.
3.20.
Properties . Except as would not reasonably be expected to
have, individually or in the aggregate, a Material Adverse Effect,
the Company or one of its Subsidiaries (a) has (or will have, at
Closing) good and marketable title to all the owned real properties
reflected in the Balance Sheet (except properties sold or otherwise
disposed of since the date of the Balance Sheet in the ordinary
course of business) (the “ Owned Properties ”),
free and clear of all Liens of any nature whatsoever, except (i)
statutory Liens securing payments not yet due (or being conducted
in good faith and for which adequate reserves have been
established), (ii) Liens for real property Taxes not yet due and
payable, (iii) easements, rights of way, and other similar
encumbrances that do not materially affect the use of the
properties or assets subject thereto or affected thereby or
otherwise materially impair business operations at such properties
and (iv) such imperfections or irregularities of title or Liens as
do not materially affect the use of the properties or assets
subject thereto or affected thereby or otherwise materially impair
business operations at such properties (collectively, “
Permitted Encumbrances ”), and (b) is the lessee of
all leasehold estates reflected in the Balance Sheet (except for
leases that have expired by their terms since the date thereof)
(the “ Leased Properties ” and, collectively
with the Owned Properties, the “ Real Property
”), free and clear of all Liens of any nature whatsoever,
except for Permitted Encumbrances, and is in possession of the
properties purported to be leased thereunder, and each such lease
is valid without default thereunder by the lessee or, to the
Knowledge of Seller, the lessor.
3.21.
Intellectual Property . Except as would not reasonably be
expected to have, individually or in the aggregate, a Material
Adverse Effect, (i) the Company and its Subsidiaries own, or are
licensed or otherwise possess rights to use, all Intellectual
Property used by Company and its Subsidiaries as of the date hereof
(collectively, the “ Company Intellectual
Property ”) in the manner that it is currently used by
Company and its Subsidiaries, (ii) neither Company nor any of its
Subsidiaries has received written notice from any third party
alleging any interference, infringement, misappropriation or
violation of any Intellectual Property rights of any third party
and, neither Company nor any of its Subsidiaries has interfered in
any respect with, infringed upon, misappropriated or violated any
Intellectual Property rights of any third party; (iii) to the
Knowledge of Seller, no third party has interfered with, infringed
upon, misappropriated or violated any Company Intellectual
Property; (iv) neither Company nor any of its Subsidiaries licenses
to, or has entered into any exclusive agreements relating to any
Company Intellectual Property with, third parties, or permits third
parties to use any Company Intellectual Property rights; (v)
neither Company nor any of its Subsidiaries owes any material
royalties or payments to any third party for using or licensing to
others any Company Intellectual Property and (vi) neither the
Company nor any of its Subsidiaries is a party to any agreement
to
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21-
indemnify any
Person against a claim of infringement of or misappropriation by
any Company Intellectual Property.
3.22.
Sufficiency of
Assets
Except as would not reasonably be expected to have, individually or
in the aggregate, a Material Adverse Effect, at the Closing, the
Company and its Subsidiaries will own or have the right to use
(including pursuant to the Transition Services Agreement) all of
the assets, rights and properties necessary to conduct the Business
as currently operated on the same terms as all of the foregoing
were owned or used by Seller and its Affiliates to operate the
Business.
3.23.
No
Investment Adviser
. Neither the Company nor any Company Subsidiary serves in a
capacity described in Section 9(a) or 9(b) of the Investment
Company Act of 1940, as amended, nor acts as an “investment
adviser” required to register as such under the Investment
Advisers Act of 1940, as amended.
3.24.
Broker-Dealer
Subsidiaries
.
(a) Each Company Subsidiary that is a broker-dealer (a “
Broker-Dealer Subsidiary ”) is duly registered under
the Exchange Act as a broker-dealer with the SEC, and is in
compliance in all material respects with the applicable provisions
of the Exchange Act, including the net capital requirements and
customer protection requirements thereof. Each Broker-Dealer
Subsidiary is a member in good standing with all required SROs and
in compliance in all material respects with all applicable rules
and regulations of such SROs. Each Broker-Dealer Subsidiary and
registered representative is duly registered, licensed or qualified
as a broker-dealer or registered representative under, and in
compliance in all material respects with, the applicable laws and
regulations of all jurisdictions in which it is required to be so
registered and each such registration, license or qualification is
in full force and effect and in good standing. There is no action,
suit, proceeding or investigation pending or, to the knowledge of
Seller, threatened that would reasonably be expected to lead to the
revocation, amendment, failure to renew, limitation, suspension or
restriction of any such registrations, licenses and
qualifications.
(b) Seller has made available to Purchaser true, correct and
complete copies of each Broker-Dealer Subsidiary’s Uniform
Application for Broker-Dealer Registration on Form BD filed since
January 1, 2005, reflecting all amendments thereto to the date
hereof (each, a “ Form BD ”). The Forms BD of
the Broker-Dealer Subsidiaries are in compliance in all material
respects with the applicable requirements of the Exchange Act and
do not contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under
which they were made, not
misleading.
(c) None of the Broker-Dealer Subsidiaries nor any
“associated person” thereof (i) is subject to a
“statutory disqualification” as such terms are defined
in the Exchange Act, or (ii) is subject to a disqualification that
would be a basis for censure, limitations on the activities,
functions or operations of, or suspension or revocation of the
registration of any Broker-Dealer Subsidiary as broker-dealer,
municipal securities dealer, government
securities
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broker or government
securities dealer under Section 15, Section 15B or Section 15C of
the Exchange Act.
(d) Subject to the foregoing, neither the Company nor its
Subsidiaries is required to be registered as a commodity trading
advisor, commodity pool operator, futures commission merchant or
introducing broker under any laws or
regulations.
3.25.
Intercompany Arrangements; Interested Party Transactions
. Each material agreement and arrangement between a National
Bank Subsidiary, on the one hand, and Seller or any of its
Subsidiaries or Affiliates (other than Company and its
Subsidiaries), on the other hand, is at arm’s length terms
and complies in all material respects with Section 23A and 23B of
the Federal Reserve Act and 12 C.F.R. Part
223.
3.26.
Divested Businesses . Section 3.26 of the Disclosure
Schedule sets forth a true and complete list of all businesses that
have become Divested Businesses since January 1, 2004 and which
impose material continuing obligations on the Company or its
Subsidiaries or the Business.
3.27.
Broker’s Fees . Except for any firm all of whose fees
and expenses shall be borne entirely by Seller, none of Seller, the
Company or any of their respective Subsidiaries has employed any
broker or finder or incurred any liability for any broker’s
fees, commissions or finder’s fees in connection with the
transactions contemplated by this
Agreement.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF
PURCHASER
Purchaser
hereby represents and warrants to Seller as
follows:
4.1.
Corporate Organization . Purchaser is a corporation duly
organized, validly existing and in good standing under the laws of
its jurisdiction of organization. Purchaser has the corporate power
and authority to own or lease all of its properties and assets and
to carry on its business as it is now being conducted, and is duly
licensed or qualified to do business in each jurisdiction in which
the nature of the business conducted by it or the character or
location of the properties and assets owned or leased by it makes
such licensing or qualification necessary, except where the failure
to be so licensed or qualified would not reasonably be expected to,
individually or in the aggregate, have a Purchaser Material Adverse
Effect. True and complete copies of the certificate of
incorporation and bylaws of Purchaser, as in effect as of the date
of this Agreement, have previously been delivered by Purchaser to
Seller. Purchaser is not in violation of any of the provisions of
its certificate or articles of incorporation or bylaws or other
charter or organizational documents, each as
amended.
4.2.
Authority; No Violation .
(a) Purchaser has full corporate power and authority to execute and
deliver this Agreement and to consummate the transactions
contemplated hereby. The execution
and
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23-
delivery of this
Agreement and the consummation of the transactions contemplated
hereby have been duly and validly approved by the Board of
Directors of Purchaser. No other corporate proceedings (including
any approvals of Purchaser’s
st
