ACQUISITION AGREEMENT
BETWEEN
1ST UNITED BANCORP,
1ST UNITED BANK
AND
ISLAND NATIONAL BANK AND TRUST COMPANY
DATED: January 6, 1997
TABLE OF CONTENTS
PAGE
1. Definitions.....................................................................................1
2. Basic Transaction...............................................................................7
The Merger..................................................................................7
Effective Time..............................................................................7
Effects of the Merger.......................................................................8
Articles of Incorporation and By-laws.......................................................8
Directors and Officers......................................................................8
Conversion of Shares........................................................................8
The Closing.................................................................................10
Actions at the Closing......................................................................10
Dissenting Shares...........................................................................10
Exchange of Shares..........................................................................10
The Bank Merger.............................................................................12
3. Representations and Warranties of Island........................................................12
Organization, Qualification and Corporate Power.............................................13
Capitalization..............................................................................13
Authorization of Transaction................................................................14
Noncontravention............................................................................14
Filings with the SEC........................................................................15
Filing with the Regulatory Agencies.........................................................15
Financial Statements........................................................................15
Events Subsequent to Most Recent Fiscal Quarter.............................................16
Tax Matters.................................................................................16
Undisclosed Liabilities.....................................................................17
Broker's Fees...............................................................................17
Disclosure..................................................................................17
Title to Properties.........................................................................18
Employment Contracts........................................................................18
Compliance with Laws........................................................................18
Litigation and Administrative Proceedings...................................................18
Employee Benefit Plans......................................................................19
Island Subsidiaries.........................................................................20
Real Property...............................................................................21
Tangible Assets.............................................................................23
Contracts...................................................................................23
Related Party Transactions..................................................................24
4. Representations and Warranties of Bancorp.......................................................26
Organization, Qualifications and Corporate Power............................................26
Capitalization..............................................................................26
Authorization of Transaction................................................................27
Noncontravention............................................................................27
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Filings with the SEC........................................................................28
Financial Statements........................................................................28
Brokers' Fees...............................................................................28
Disclosure..................................................................................28
Events Subsequent to Most Recent Fiscal Quarter.............................................29
Title to Properties.........................................................................29
Compliance with Laws........................................................................29
Litigation and Administrative Proceedings...................................................29
Filings with the FRB and Comptroller........................................................30
Undisclosed Liabilities.....................................................................30
Tangible Assets.............................................................................30
Environmental...............................................................................30
ERISA.......................................................................................31
5. Covenants.......................................................................................32
General.....................................................................................32
Island Agreements...........................................................................32
Other Agreements............................................................................33
Notices and Consents of Bancorp.............................................................34
Regulatory Matters and Approvals............................................................34
Fairness Opinions...........................................................................37
Operation of Business.......................................................................37
Island Operations...........................................................................39
Full Access.................................................................................40
Notice of Developments......................................................................41
Exclusivity.................................................................................42
Indemnification.............................................................................42
Officer and Director Indemnities............................................................43
Environmental Matters.......................................................................44
Affiliate Letters...........................................................................44
Post Merger Financial Results...............................................................45
Pooling of Interest.........................................................................45
Certain Policies of Island..................................................................46
Board Members...............................................................................46
Employee Benefit Plans......................................................................46
6. Conditions to Obligation to Close...............................................................47
Conditions to Obligations of All Parties....................................................47
Conditions to Obligation of Bancorp.........................................................48
Conditions to Obligations of Island.........................................................49
7. Termination.....................................................................................50
Termination of Agreement....................................................................50
Effect of Termination.......................................................................51
8. Miscellaneous...................................................................................51
Survival....................................................................................52
Press Releases and Announcements............................................................52
Third Party Beneficiaries...................................................................52
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Entire Agreement............................................................................52
Succession and Assignment...................................................................52
Counterparts................................................................................52
Headings....................................................................................52
Notices.....................................................................................52
Governing Law...............................................................................54
Amendments and Waivers......................................................................54
Severability................................................................................54
Expenses....................................................................................55
Construction................................................................................55
9. Incorporation of Exhibits and Schedules.........................................................55
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ACQUISITION AGREEMENT
Agreement entered into as of January 6, 1997 by and among 1st United
Bancorp, a Florida corporation ("Bancorp"), 1st United Bank, a Florida chartered
bank ("1st United") and Island National Bank and Trust Company, a national
banking association ("Island"). Bancorp, Island and 1st United are referred to
collectively herein as the "Parties."
W I T N E S S E T H:
WHEREAS, Bancorp is a Bank Holding Company registered under the Bank
Holding Company Act of 1956, as amended (the "Bank Holding Company Act");
WHEREAS, 1st United is a Florida chartered bank and a wholly owned
subsidiary of Bancorp;
WHEREAS, Island is a national banking association organized under the
National Bank Act;
WHEREAS, the Boards of Directors of Bancorp, Island and 1st United have
agreed that the Merger of Island with 1st United on the terms set forth herein
and in the Agreement of Merger is desirable and in the best interest of their
respective stockholders and have approved this Agreement, and the Board of
Directors of Island has directed that this Agreement be submitted to its
stockholders for approval.
Now, therefore, in consideration of the mutual promises herein made,
and in consideration of the representations, warranties, and covenants herein
contained, the Parties agree as follows:
1. DEFINITIONS.
"1ST UNITED" has the meaning provided in the recitals hereof.
"ACTUAL VALUE" means the value of the Bancorp Purchase Stock
determined by multiplying the average of the closing price for Bancorp Shares
reported in the Wall Street Journal for the twenty (20) most recent Trade Days
prior to the Valuation Date times the number of Bancorp Shares comprising the
Bancorp Purchase Stock.
"AFFILIATE" has the meaning set forth in Rule 12b-2 of the
regulations promulgated under the Securities Exchange Act of 1934.
"AGREEMENT OF MERGER" has the meaning set forth in ss.2.11
hereof.
"ARTICLES OF MERGER" has the meaning set forth in ss.2.2
hereof.
"BANCORP" has the meaning provided in the recitals hereof.
"BANCORP FAIRNESS OPINION" means an opinion from an investment
banker or consultant of Bancorp's choosing as to the fairness of the Merger to
the holders of Bancorp Shares from a financial point of view.
"BANCORP PUBLIC REPORT" has the meaning set forth in ss.4.5
hereof.
"BANCORP PURCHASE STOCK" has the meaning set forth in
ss.2.6(ii) hereof.
"BANCORP SHARES" means the common stock, $.01 par value per
share, of Bancorp.
"BANK HOLDING COMPANY ACT" has the meaning provided in the
recitals hereof.
"CERTIFICATES" means the stock certificates which represent
the Island Shares as of the Effective Time.
"CLOSING" has the meaning set forth in ss.2.7 hereof.
"CLOSING DATE" has the meaning set forth in ss.2.7 hereof.
"CODE" means the Internal Revenue Code of 1986, as amended.
"COMPTROLLER" means the Florida Department of Banking and
Finance.
"CONFIDENTIAL INFORMATION" with respect to a Party means any
information concerning the respective businesses and affairs of Bancorp, 1st
United, or Island; provided, however, that Confidential Information shall not
include any information (i) which, at the time of disclosure, is available
publicly or already known to the receiving Party, or, (ii) which, after
disclosure, becomes available publicly through no fault of the receiving Party.
"DEFINITIVE ISLAND PROXY MATERIALS" means the definitive proxy
materials relating to the Special Island Meeting.
"DISCLOSURE STATEMENT" has the meaning set forth in ss.3
hereof.
"DISSENTING SHARES" shall have the meaning set forth in ss.2.9
hereof.
"EDP AGREEMENT" means that certain Agreement for Information
Technology Services dated October 2, 1995 between Electronic Data Systems
Corporation and Island.
"EFFECTIVE DATE" means the date on which the last of the
Parties signs this Agreement.
"EFFECTIVE TIME" means the time the Articles of Merger are
filed with the Florida Secretary of State or such other time as stated in the
Articles of Merger for effectiveness of the Merger.
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"EMPLOYEE BENEFIT PLANS" means any employee welfare benefit
plan or employee pension benefit plan, as defined in ERISA, which Island or any
of its Subsidiaries maintains or to which Island or its Subsidiaries contributes
or is required to contribute.
"ENVIRONMENTAL LAWS" means any local, state or federal law,
statute, ordinance, rule, regulation or order relating to pollution or
protection of the environment.
"ERISA" means the Employee Retirement Security Act of 1974 as
amended.
"EXCHANGE FUND" has the meaning set forth in ss.2.10(i)
hereof.
"FDIC" shall mean the Federal Deposit Insurance Corporation.
"FLORIDA ACTS" means Chapter 517, Chapter 607, Chapter 655,
Chapter 658 and Chapter 660, Florida Statutes.
"FRB" means the Board of Governors of the Federal Reserve
System.
"GAAP" means United States generally accepted accounting
principles as in effect from time to time.
"HAZARDOUS SUBSTANCES" means any petroleum products or wastes
and any pollutants, toxic or hazardous materials or wastes or regulated
materials as defined in or regulated by any Environmental Laws.
"IRS" means the Internal Revenue Service.
"INVESTMENT" means Island Investment Services, Inc., a Florida
corporation.
"ISLAND AFFILIATE" has the meaning provided in ss.5.15 hereof.
"ISLAND CLOSING EQUITY" means the shareholders' equity of
Island as of the last day of the calendar month ending prior to the Closing Date
adjusted for earnings and expenses for the period from the last day of the
calendar month ending prior to the Closing Date through the Closing Date (to the
extent earnings and expenses are not known as of the Valuation Date the Parties
shall mutually agree on a reasonable estimate of such earnings and expenses)
determined in accordance with GAAP consistently applied and as in effect on the
Effective Date. The shareholder's equity shall be reduced by the net after tax
effect of Transaction Expenses and the Tax Liability but shall not be affected
by unrealized gains or losses in securities classified as available for sale.
The shareholder's equity of Island shall not be increased by any gains realized
after the Effective Date which are not realized in the Ordinary Course of
Business. Any gains realized from litigation to which Island is a party and any
gains from the disposition of real estate or other assets acquired by Island
through the exercise of remedies under loan documentation in the ordinary course
of business shall be gains realized in the Ordinary Course of Business and shall
increase the shareholder's equity of Island. Any gains realized from the
disposition of investment securities shall not be in the Ordinary Course of
Business and shall not increase the shareholder's equity of Island. Any effects
to the shareholder's equity attributable solely to the
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actions of Island taken pursuant to ss.5.18 shall not be taken into account in
calculating Island Closing Equity.
"ISLAND FAIRNESS OPINION" has the meaning set forth in ss.5.6
hereof.
"ISLAND INITIAL EQUITY" means the shareholders equity of
Island which the Parties agree, for the purposes of this Agreement, is Ten
Million Four Hundred Fifty Thousand and no/100 Dollars ($10,450,000.00).
"ISLAND OPTION" means any outstanding right to obtain any
capital stock of Island or stock appreciation rights, phantom stock or other
stock based award valued on the basis of the value of Island Stock.
"ISLAND STOCK" means the $5.00 par value per share common
stock of Island.
"ISLAND STOCKHOLDER" means any person who or which holds of
record any Island Stock.
"ISLAND" has the meaning provided in the recitals hereof.
"ISLAND SHARE" means any share of the Island Stock.
"KNOWLEDGE" means the actual knowledge of any executive
officers or directors of the Party in question after due inquiry.
"MARKET VALUE" means the average of the closing price for
Bancorp Shares reported in the Wall Street Journal for the twenty (20) most
recent Trade Days prior to the Valuation Date; provided, however, that for the
purpose of calculating the number of Bancorp Shares comprising the Bancorp
Purchase Stock the Market Value shall be $9.75 per share if the Market Value as
calculated above is less than $9.75 per share and shall be $13.00 per share if
the Market Value as calculated above is more than $13.00 per share.
"MERGER" has the meaning set forth in ss.2.1 hereof.
"MERGER CONSIDERATION" has the meaning set forth in ss.2.6(ii)
hereof.
"MOST RECENT FISCAL QUARTER" means the fiscal quarter ended
September 30, 1996.
"NATIONAL BANK ACT" means 12 U.S.C. ss.21, et seq.
"NASD" means the National Association of Securities Dealers,
Inc.
"OPTION PRICE" means, as to any Island Option, the cash
purchase price per share pursuant to which Island Stock can be purchased on the
exercise of such Island Option.
"ORDINARY COURSE OF BUSINESS" means the ordinary course of
business consistent with past custom and practice (including with respect to
quantity and frequency) except to the extent variances are required by changes
in GAAP and including, specifically, without limitation, accruals consistent
with prior years for all expenses, including, without limitation, third party
audits and real estate taxes.
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"PARTIES" has the meaning set forth in the preface above.
"PROPERTY" means any real property owned or leased by Island.
"PROSPECTUS" means the final prospectus, if any, relating to
the registration of the Bancorp Purchase Stock under the Securities Act.
"REGISTRATION STATEMENT" has the meaning set forth in
ss.5.5(ii)(e) hereof.
"RELATED CONTRACTS" has the meaning set forth in ss.3.22
hereof.
"REQUISITE ISLAND STOCKHOLDER APPROVAL" means the affirmative
vote of the holders of not less than two-thirds of the Island Stock in favor of
this Agreement and the Merger.
"SEC" means the Securities and Exchange Commission.
"SECURITIES ACT" means the Securities Act of 1933, as amended.
"SECURITIES EXCHANGE ACT" means the Securities Exchange Act of
1934.
"SECURITY INTEREST" means any mortgage, pledge, security
interest, encumbrance, charge, or other lien, other than (a) mechanic's,
materialmen's, and similar liens, (b) liens for taxes not yet due and payable or
for taxes that the taxpayer is contesting in good faith through appropriate
proceedings, (c) liens arising under worker's compensation, unemployment
insurance, social security, retirement, and similar legislation, (d) liens
arising in connection with sales of foreign receivables, (e) liens on goods in
transit incurred pursuant to documentary letters of credit, (f) purchase money
liens and liens securing rental payments under capital lease arrangements, and
(g) other liens arising in the Ordinary Course of Business and not incurred in
connection with the borrowing of money.
"SPECIAL ISLAND MEETING" has the meaning set forth in
ss.5.5(ii)(f) hereof.
"STAY BONUSES" means bonuses which Island pays or agrees to
pay to directors and employees of Island or its Subsidiaries after the Effective
Date to induce such directors and employees to continue their affiliation with
Island or its Subsidiaries.
"SUBSIDIARY" means any corporation with respect to which
another specified corporation has the power directly or indirectly to vote or
direct the voting of sufficient securities to elect a majority of the directors.
"SUBSTANTIAL ADVERSE DEVELOPMENT" means, as to Island, an
occurrence or development which substantially impairs Island's ability to
consummate the Merger or which has or is reasonably likely to have a material
adverse impact on the assets, liabilities, business or operations of Island,
taken as a whole, including, specifically without limitation, a decrease of more
than 15% in the aggregate of Island's average demand, NOW, money market and
savings accounts, other than deposits of public funds, for the month ending
prior to the Closing Date from the average of those deposits for the month of
December, 1996, (unless the Closing occurs after April 30, 1997, in which event
a Substantial Adverse Development shall have occurred only
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if the percentage decrease of the average of such deposits in the month ending
prior to Closing from the average of such Deposits in December, 1996 is more
than fifteen percent (15%) plus the average percentage decrease in such deposits
from the average for the months of December 1994 and 1995 from the average of
those deposits in that month in 1995 and 1996), or the assertion of claims or
counterclaims in litigation, whether or not currently pending, to which Island
or its Subsidiaries are parties which have a reasonable likelihood of resolution
adversely to Island or its Subsidiaries in an amount greater than $250,000.00
and, as to Bancorp or 1st United, means that 1st United's aggregate
nonperforming loans and other real estate owned as reported on its most recent
FFIEC Consolidated Report of Condition prior to the Closing are more than
Sixteen Million Five Hundred Thousand and no/100s Dollars ($16,500,000.00), that
Xxxxxx X. Xxxxxxx has died or is permanently disabled so that he is unable to
perform his duties as Chief Executive Officer of Bancorp and 1st United or any
other occurrence or development which substantially impairs Bancorp's or 1st
United's ability to consummate the Merger or which has or is reasonably likely
to have a material adverse impact on the assets, liabilities, business,
financial condition, operations or results of operations of Bancorp. For the
purpose of computing the balances of Island's demand, NOW, money market and
savings accounts, the deposits in law firm trust accounts and escrow accounts
will not be included and any deposits which have been transferred from accounts
at Island into brokerage accounts or investments purchased through Investment
shall not be included in the computation of decreases in demand, NOW, money
market and saving accounts so long as the type, number and aggregate amount of
such transfers are consistent with historical transfers from Island to
Investment accounts.
"TAX LIABILITY" has the meaning set forth in ss.5.3(iii)
hereof.
"TOTAL EQUITIES" means the aggregate of the Island Shares
issuable on exercise of the Island Options and the Island Shares outstanding on
the Effective Date.
"TRANSACTION EXPENSES" means any and all costs or expenses
incurred or to be incurred by Island or its Subsidiaries before Closing, whether
or not accrued or actually paid by Island or its Subsidiaries, in connection
with this Agreement, the Merger, the Definitive Island Proxy Materials or any of
the other actions contemplated by or in connection with this Agreement,
including, without limitation, the Stay Bonuses, other bonuses paid or to be
paid to employees, costs incurred pursuant to any employment agreements
(including costs of terminating the employment agreement with E. Xxxxxxx
Xxxxxx), the cost of directors and officers liability insurance coverage for the
period after the Effective Time if requested by Island, the cost of terminating
the EDP Agreement in excess of $150,000.00 except as provided below, attorneys',
accountants' and consultants' fees and expenses, and fees, commissions or
expenses payable to Xxxxxxxx Financial Advisors, L.L.C. before or after Closing.
Transaction Expenses
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shall not include marketing expenses incurred by Island prior to Closing at the
specific request of 1st United, costs incurred by Island in regulatory
examinations by regulators which do not regularly examine Island or its
subsidiaries, costs of conversion of Island's data processing system to 1st
United's data processing system, costs incurred by reason of termination of
Island's 401k Plan and any accelerated vesting of Island employees' benefits
caused by such termination and fifty percent (50%) of any costs or expenses
incurred by Island by reason of Xxxx X. Xxxxxx'x termination of that certain
Amended and Restated Employment by and between Xxxx X. Xxxxxx, Island and
Investment dated as of January 1, 1994 due to the Merger constituting a Change
of Control under that agreement. In the event Island has not paid or accrued for
expenses included in the definition of Transaction Expenses by the date on which
Island Closing Equity is determined, Island shall accrue for such expenses and
include such expenses in the computation of the Island Closing Equity.
"TRADE DAY" means a day on which a purchase and sale of
Bancorp Shares has been reported by NASDAQ.
"TRANSFER AGENT" means American Stock Transfer and Trust
Company or such other agent as Bancorp may designate from time to time as
Bancorp's agent for the transfer of Bancorp Shares.
"VALUATION DATE" means the last trading day ending five (5)
days prior to the Closing Date.
2. BASIC TRANSACTION.
SECTION 2.1. THE MERGER. Upon the terms and subject to the
conditions hereof, and in accordance with the Florida Acts and the National Bank
Act, Island shall be merged with and into 1st United (the "Merger") as soon as
practicable following the satisfaction or waiver, if permissible, of the
conditions set forth in Article 6 hereof. Following the Merger, 1st United shall
continue as the surviving corporation and the separate corporate existence of
Island shall cease. Only 1st United and Island shall be deemed to be parties to
the Merger for purposes of the Florida Acts.
SECTION 2.2. EFFECTIVE TIME. The Merger shall be consummated
by the filing with the Florida Department of State of Articles of Merger (the
"Articles of Merger") in the form required by and executed in accordance with
the relevant provisions of the Florida Acts. The date the Merger shall be
consummated as of the date of such filing or such other time and date as may be
specified in the Articles of Merger, which shall be the "Effective Time."
SECTION 2.3. EFFECTS OF THE MERGER. The Merger shall have the
effects set forth in the Florida Acts and the National Bank Act.
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SECTION 2.4. ARTICLES OF INCORPORATION AND BY-LAWS. The
Articles of Incorporation and the By-Laws of 1st United, in each case as in
effect at the Effective Time, shall be the Articles of Incorporation and By-Laws
of the surviving corporation.
SECTION 2.5. DIRECTORS AND OFFICERS. The directors and
officers of 1st United at the Effective Time shall be the directors and officers
of the surviving corporation and shall hold office from the Effective Time until
their respective successors are duly elected or appointed and qualified in the
manner provided in the Articles of Incorporation and By-Laws of 1st United, or
as otherwise provided by law.
SECTION 2.6. CONVERSION OF SHARES.
(i) At and as of the Effective Time, each Island Share, issued
and outstanding immediately prior to the Effective Time other than the
Dissenting Shares, shall, by virtue of the Merger and without any action on the
part of the Island Stockholders, be converted into and represent the right to
receive a portion of the Merger Consideration calculated as provided in
ss.2.6(ii) and deliverable to the holder of record thereof, without interest
thereon, upon surrender of the Certificate representing such Island Share.
(ii) Subject to any adjustments made to the amount of the
Merger Consideration pursuant to ss. 2.6(iv), each holder of:
a) Island Options as of the Effective Time, with respect
to each group of Island Options held by such holder which are exercisable on the
same terms, shall receive a portion of the Merger Consideration equal to: (i)
the Merger Consideration divided by the Total Equities; (ii) minus the Option
Price for such Island Options held by that holder; (iii) multiplied by the
number of Island Shares issuable on the exercise of the Island Options in each
group of Island Options held by that holder; (iv) divided by the Merger
Consideration; and (v) multiplied by the number of Bancorp Shares comprising the
Bancorp Purchase Stock. The foregoing is expressed as a formula as follows:
Merger Consideration Option Price Island Shares Issuable . Merger
Total Equities - per Island x for Island Options - Consideration
Share Held by Holder .
x Number of Shares Comprising ____ Bancorp Shares deliverable to
Bancorp Purchase Stock ____ each Holder of Island Options
b) Island Shares as of the Effective Time
shall receive for each Island Share, a portion of the Merger Consideration equal
to the quotient of the Merger Consideration less the aggregate portions of the
Merger Consideration deliverable to the holders of the Island
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Options as provided in (a) above, divided by the number of Island Shares
outstanding immediately prior to the Effective Time. The Merger Consideration
(the "Merger Consideration") shall have an aggregate value equal to Seventeen
Million Seven Hundred Fifty Thousand and no/100 Dollars ($17,750,000.00),
subject to adjustment as to amount as provided in ss.2.6(iv) hereof, and shall
be comprised of Bancorp Stock (the "Bancorp Purchase Stock"), except that
Bancorp shall not issue any fractional Bancorp Shares and the value of any
fractional Bancorp Share to which the holder of Island Shares would otherwise be
entitled shall be paid to the Island Stockholder in cash with the value of the
fractional Bancorp Shares to be based on the Market Value. (i) (ii) The number
of Bancorp Shares comprising the Bancorp Purchase Stock shall be calculated by
dividing the Merger Consideration by the Market Value and rounding to nearest
whole Bancorp Share.
(iii) The Merger Consideration described in Section 2.6(ii)
shall be decreased by an amount equal to the product of multiplying the
difference between Island Initial Equity and Island Closing Equity times one
point six seven (1.67) if Island Initial Equity is greater than Island Closing
Equity. In the event that the Actual Value initially calculated as provided
elsewhere in this Agreement is less than Sixteen Million Five Hundred Thousand
and no/100 Dollars ($16,500,000.00), Bancorp shall have the option of increasing
the number of Bancorp shares included in the Bancorp Purchase Stock so that the
Actual Value of the Bancorp Purchase Stock is not less than Sixteen Million Five
Hundred Thousand and no/100 Dollars ($16,500,000.00). If Bancorp has not advised
Island of Bancorp's intention to increase the Actual Value to Sixteen Million
Five Hundred Thousand and no/100 Dollars ($16,500,000.00) by 5:00 p.m. on the
business day following the Valuation Date, Island shall have the option to
terminate this Agreement by written notice received by Bancorp not later than
5:00 p.m. on the sixth (6th) day after the Valuation Date.
SECTION 2.7. THE CLOSING. The closing of the transactions
contemplated by this Agreement (the "Closing") shall take place at the offices
of Akerman, Senterfitt & Xxxxxx, P.A. in West Palm Beach, Florida, commencing at
9:00 a.m. local time or such other time as the parties mutually agree as soon as
practicable following the satisfaction or waiver of all conditions to the
obligations of the parties to consummate the transactions contemplated hereby or
such other date as the parties may mutually determine (the "Closing Date").
SECTION 2.8. ACTIONS AT THE CLOSING. At the Closing, (i)
Island will deliver to Bancorp the various certificates, instruments, and
documents required to consummate the Merger, (ii) Bancorp and 1st United will
deliver to Island the various certificates, instruments,
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and documents required to consummate the Merger, and (iii) 1st United and
Island will request that the Secretary of State of the State of Florida
record the "Articles of Merger."
SECTION 2.9. DISSENTING SHARES. Notwithstanding anything in
this Agreement to the contrary, Island Shares which are issued and outstanding
immediately prior to the Effective Time and which are held by Island
Stockholders who have voted such Island Shares against the Merger or who shall
have delivered a written notice to Island that such Island Stockholder dissents
from the Merger within the time and in the manner provided in Chapter 658,
Florida Statutes, and the National Bank Act (the "Dissenting Shares") shall not
be converted into or be exchangeable for the right to receive Merger
Consideration, but shall be converted into the right to receive payment from 1st
United with respect thereto in accordance with the provisions of Chapter 658,
Florida Statutes, and the National Bank Act. However, if such holder shall have
failed to perfect or shall have effectively withdrawn or lost his right to
appraisal and payment under Chapter 658, Florida Statutes, and the National Bank
Act, such holder's Island Shares shall thereupon be deemed to have been
converted into and to have become exchangeable for, at the Effective Time, the
right to receive the Merger Consideration payable with respect to such Island
Shares without any interest thereon.
SECTION 2.10. EXCHANGE OF SHARES.
(i) Within three (3) business days after the Effective Time,
Bancorp and/or 1st United shall deposit cash and transmit instructions to the
Transfer Agent to issue and deliver the Bancorp Purchase Stock and cash in
amounts necessary to make delivery of the Merger Consideration pursuant to
Section 2.6 hereof to holders of Island Shares and Island Options that are
issued and outstanding immediately prior to the Effective Time and, to the
extent ascertainable under applicable law, to make the appropriate cash
payments, if any, to holders of Dissenting Shares (such amounts being
hereinafter referred to as the "Exchange Fund"). The Transfer Agent shall,
pursuant to such instructions given by Bancorp, promptly make the payments and
delivery provided for in the preceding sentence out of the Exchange Fund upon
surrender of the Certificates and letters of transmittal from the holders of
Island Options in accordance with Section 2.10(ii). Payments to the holders of
Dissenting Shares shall be made as required by Chapter 658, Florida Statutes,
and the National Bank Act. Subject to holding sufficient cash to make prompt
payments to holders of Island Shares and/or Island Options, the Transfer Agent
shall invest the Exchange Fund in a money market account with 1st United.
Bancorp shall bear the risk of any investment losses by the Transfer Agent and
shall contribute additional funds if necessary to pay all of the Merger
Consideration and the payments due to the holders of Dissenting Shares. The
Exchange Fund shall not be used for any other purpose, except as provided in
this Agreement.
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(ii) Within five (5) business days after the Effective Time
the Transfer Agent shall mail to each record holder of an outstanding
Certificate or Certificates and Island Options, a form letter of transmittal
approved by Island and Bancorp (which as to the Certificates shall specify that
delivery shall be effected, and risk of loss and title to the Certificates shall
pass, only upon proper delivery of the Certificates to the Transfer Agent) and
instructions for use in effecting the surrender of the Certificates and the
Island Options, respectively. Upon the delivery of a transmittal letter by each
holder of Island Options duly executed and properly completed in full and, if
required by Bancorp signature medallion guaranteed, and as to the Certificates
surrender to the Transfer Agent of the Certificate, together with such letter of
transmittal duly executed and properly completed in full and, if required by
Bancorp signature medallion guaranteed, the holder of such Island Option or
Certificates shall be entitled to receive in exchange therefor Bancorp Purchase
Stock in the amount and proportions provided in Section 2.6(ii), and such Island
Option or Certificate shall forthwith be canceled. No interest will be paid or
accrued on the cash payable upon surrender of the Island Opinion or Certificate.
If payment or delivery of Merger Consideration is to be made to a person other
than the person in whose name the Island Option or the Certificate surrendered
is registered, it shall be a condition of payment that Island Option or the
Certificate so surrendered shall be properly endorsed or otherwise in proper
form for transfer and that the person requesting such payment shall pay any
transfer or other taxes required by reason of the payment and delivery of Merger
Consideration to a person other than the registered holder of the Island Option
or the Certificate surrendered or establish to the satisfaction of Bancorp that
such tax has been paid or is not applicable. Until surrendered in accordance
with the provisions of this Section 2.10, each Island Option and Certificate
(other than Certificates representing Dissenting Shares) shall represent for all
purposes the right to receive the Merger Consideration without any interest
thereon. From and after the Effective Time, no Certificates or Island Options
shall represent any right or interest in Island and shall represent only the
right to receive Bancorp Stock in accordance with the provisions of this
Agreement.
(iii) Bancorp shall not pay any dividend or make any
distribution on Bancorp Purchase Stock to any Island Stockholder until the
Island Stockholder or holder of Island Options surrenders for exchange its
Certificates or letter of transmittal for such Island Options. Bancorp shall
instead pay the dividend or make the distribution to the Transfer Agent in trust
for the benefit of the Island Stockholder or holder of Island Options to be
distributed to the Island Stockholder or holder of Island Options on surrender
of the Certificates or Island Options and such dividends or distributions shall
become a part of the Exchange Fund. In no event shall a Island Stockholder or
holder of Island Options be entitled to interest or earnings on the dividends
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or distributions held by the Transfer Agent. Any such interest or earnings
shall be paid to Bancorp.
(iv) After the Effective Time, the stock transfer ledger of
Island shall be closed and there shall be no transfers on the stock transfer
books of Island of the Island Shares which were outstanding immediately prior to
the Effective Time. If, after the Effective Time, Certificates are presented to
Bancorp or 1st United, they shall be promptly presented to the Transfer Agent
and exchanged as provided above.
(v) Any portion of the Exchange Fund (including the proceeds
of any investments thereof) that remains unclaimed by the shareholders of Island
for six months after the Effective Time shall be paid to Bancorp, and the
holders of Island Shares or Island Options not theretofore presented to the
Transfer Agent shall look to Bancorp as a general creditor only, and not to the
Transfer Agent, for the payment of any portion of the Exchange Fund in respect
of such Island Shares or Island Options.
SECTION 2.11. THE BANK MERGER. On the Effective Date, Island
and Bancorp shall cause Island and 1st United respectively to enter into a Plan
of Merger and Merger Agreement (the "Agreement of Merger") in substantially the
form attached hereto as Exhibit "A" pursuant to which Island will merge with and
into 1st United. The Agreement of Merger shall be the document to be recorded
with the Comptroller pursuant to which the Merger shall be consummated on the
terms provided therein and in this Agreement.
3. REPRESENTATIONS AND WARRANTIES OF ISLAND. Island represents and
warrants to Bancorp that the statements contained in this ss.3 are correct and
complete as of the date of this Agreement and will be correct and complete as of
the Closing Date (as though made then and as though the Closing Date were
substituted for the date of this Agreement throughout this ss.3), except as set
forth in the disclosure statement prepared by Island and submitted to Bancorp
and 1st United as of the Effective Date (the "Disclosure Statement") as updated
pursuant to ss.5.10(ii). Island agrees that as soon as reasonably practicable
after the Effective Date, Island will ascertain whether any of the officers of
Island or its Subsidiaries have actual knowledge after due inquiry that any of
the representations and warranties of Island in this Agreement are materially
incorrect or incomplete and, if incorrect or incomplete, will immediately revise
such warranties and representations in the fashion provided in ss.5.10(ii).
SECTION 3.1. ORGANIZATION, QUALIFICATION, AND CORPORATE POWER.
Island is a national banking association, duly organized, validly existing, and
in good standing under the laws of the United States of America. Each Subsidiary
of Island is a Florida corporation duly organized, validly existing and in good
standing under the laws of Florida. Island is duly
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authorized to engage in the business of banking in Florida as an insured bank
under the Federal Deposit Insurance Act, as amended. Island and each of its
Subsidiaries are duly authorized to conduct business and is in good standing
under the laws of each jurisdiction in which the nature of its businesses or the
ownership or leasing of its properties requires such qualification except where
the lack of such qualification would not have a material adverse effect on the
financial condition of Island or any of its Subsidiaries, or on the ability of
the Parties to consummate the transactions contemplated by this Agreement. Each
of Island and its Subsidiaries has full corporate power and authority to carry
on the businesses in which it is engaged and to own and use the properties owned
and used by it. True and complete copies of the Articles of Incorporation and
the Bylaws of Island and of the Articles of Incorporation and the Bylaws of each
Subsidiary of Island are appended to the Disclosure Statement.
SECTION 3.2. CAPITALIZATION. The entire authorized capital
stock of Island consists of 2,000,000 shares of Island Stock, of which 614,901
shares are issued and outstanding. The entire authorized capital stock of
Investment consists of 1,000 common shares, of which 100 shares are issued and
outstanding. Island is the owner of 100% of the capital stock of Investment free
and clear of any liens, claims or encumbrances whatsoever. All of the issued and
outstanding shares of Island Stock and each Subsidiary of Island have been duly
authorized and are validly issued, fully paid, and nonassessable. There are no
outstanding or authorized options, warrants, rights, contracts, calls, puts,
rights to subscribe, conversion rights, or other agreements or commitments to
which Island or Investment is a party or which are binding upon Island or
Investment providing for the issuance, disposition, or acquisition of any class
of their capital stock, except for the Island Options, as set forth on the
Disclosure Statement. There are no outstanding or authorized stock appreciation,
phantom stock, or similar rights with respect to Island or Investment.
SECTION 3.3. AUTHORIZATION OF TRANSACTION. Island has full
power and authority (including full corporate power and authority) to execute
and deliver this Agreement and to perform its obligations hereunder; provided,
however, that Island cannot consummate the Merger unless and until it receives
the Requisite Island Stockholder Approval, unless the Merger is approved by the
Comptroller, the NASD, the SEC and the FRB, and unless it receives all of the
consents contemplated by Article 5. Subject to the foregoing sentence, this
Agreement constitutes the valid and legally binding obligation of Island,
enforceable in accordance with its terms and conditions. To the Knowledge of
Island, and other than in connection with the provisions of the Florida Acts,
the Federal Deposit Insurance Act, the National Bank Act, the Securities
Exchange Act, the Securities Act, the state securities laws, the rules of the
NASD and the Bank Holding Company Act, Island does not need to give any notice
to, make any filing
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with, or obtain any authorization, consent or approval of any government or
governmental agency in order for the Parties to consummate the transactions
contemplated by this Agreement, except where the failure to give notice, to
file, or to obtain any authorization, consent, or approval would not have a
Substantial Adverse Effect on Island taken as a whole or on the ability of the
Parties to consummate the transactions contemplated by this Agreement.
SECTION 3.4. NONCONTRAVENTION. Subject to obtaining the
Requisite Island Stockholder Approval, the approval of the Comptroller, the FDIC
and the FRB and the consents listed on the Disclosure Statement attached hereto,
to the Knowledge of Island, neither the execution and the delivery of this
Agreement by Island, nor the consummation of the transactions contemplated
hereby, will (i) violate any statute, regulations, rule, judgment, order,
decree, stipulation, injunction, charge, or other restriction of any government,
governmental agency, or court to which any of Island or its Subsidiaries is
subject or any provision of the articles of incorporation or bylaws of Island or
its Subsidiaries, or (ii) conflict with, result in a breach of, constitute a
default under, result in the acceleration of, create in any party the right to
accelerate, terminate, modify, or cancel, or require any notice under any
contract, lease, sublease, license, franchise, permit, clearing agreement,
restriction letter, indenture, agreement or mortgage for borrowed money,
instrument of indebtedness, Security Interest, or other obligation to which any
of Island or its Subsidiaries is a party or by which it is bound or to which any
of its assets is subject (or result in the imposition of any Security Interest
upon any of its assets) except where the violation, conflict, breach, defaults,
acceleration, termination, modification, cancellation, failure to give notice,
or Security Interest would not have a material adverse effect on the financial
condition of any of Island or its Subsidiaries taken as a whole or on the
ability of the Parties to consummate the transactions contemplated by this
Agreement. Provided NASD approval is obtained, if required under NASD rules,
neither the execution and delivery of this Agreement by Island nor the
consummation of the transactions contemplated hereby will result in any net
capital violation of Investment, result in Investment not being able to conduct
its brokerage business as currently being conducted, or result in the imposition
of any fines, penalties, violations or other sanctions against Investment or
Island as a result thereof.
SECTION 3.5. FILINGS WITH THE SEC. Island and its
Subsidiaries, other than Investment, are not subject to the reporting
requirements of the Securities Exchange Act nor the rules and regulations
thereunder other than the anti-fraud provisions of the Securities Exchange Act.
All issuances of securities by Island or its Subsidiaries have been registered
under the Securities Act and all other applicable laws or were exempt from such
registration.
SECTION 3.6. FILINGS WITH THE REGULATORY AGENCIES. Island and
its Subsidiaries have made all material filings with the OCC, the NASD, the SEC
and other governmental
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agencies that have jurisdiction over Island and its Subsidiaries that each has
been required to make under the Securities Act, the Securities Exchange Act, the
Investment Advisors Act of 1940, the Federal Deposit Insurance Act, the National
Bank Act, or any other law governing Island or its Subsidiaries, as the case may
be (collectively the "Reports"). To the Knowledge of Island and its
Subsidiaries, each of the Reports has complied with the Florida Acts, the
National Bank Act, the Federal Deposit Insurance Act, the Securities Act, the
Securities Exchange Act, the Investment Advisors Act of 1940, or any other law
governing Island or its Subsidiaries in all material respects. To the Knowledge
of Island, each of the Reports is true, complete and correct in all material
respects as of their respective dates and none of the Reports, as of their
respective dates, contained any untrue statement of a material fact or omitted
to state a material fact necessary in order to make the statements made therein,
in light of the circumstances under which they were made, not misleading. Island
has delivered to Bancorp a correct and complete copy of each FFIEC Consolidated
Report of Condition (Call Report) filed by Island and each regulatory report
filed by Investment since December 31, 1994 (together with all exhibits and
schedules thereto and as amended to date).
SECTION 3.7. FINANCIAL STATEMENTS. Island has provided Bancorp
with audited consolidated financial statements for the fiscal year ended
December 31, 1995 and unaudited consolidated financial statements for Island,
prepared by Island for the period from January 1, 1996 to September 30, 1996.
Island will deliver the consolidated audit for the fiscal year ended December
31, 1996 promptly after completion but in no event later than March 31, 1997.
All financial statements delivered to Bancorp (including the related notes and
schedules) have been and shall be prepared in accordance with GAAP applied on a
consistent basis throughout the periods covered thereby and present fairly, in
all material respects, the financial condition of Island and its Subsidiaries as
of the indicated dates and the results of operations of Island and its
Subsidiaries for the indicated periods, provided, however, that the interim
statements are subject to normal year-end adjustments and need not include
footnotes which would be included in year end statements pursuant to GAAP.
SECTION 3.8. EVENTS SUBSEQUENT TO MOST RECENT FISCAL QUARTER.
Since the end of the Most Recent Fiscal Quarter, there has not been any material
adverse change in the assets, liabilities, business, financial condition,
operations, results of operations, or future prospects of Island and its
Subsidiaries taken as a whole.
SECTION 3.9. TAX MATTERS. Island and its Subsidiaries have
duly filed all tax returns required to be filed by them other than for the year
1996 (the "Filed Returns") and all Filed Returns were filed on a timely basis
and were correct and complete in all material respects. Island and its
Subsidiaries have paid, or, to the Knowledge of Island, have established
adequate
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reserves for the payment of, all federal income taxes and all state and
local income taxes and all franchise, property, sales, employment, foreign or
other taxes required to be paid with respect to the periods covered by the Filed
Returns. With respect to the periods for which returns have not yet been filed,
to the Knowledge of Island, Island and its Subsidiaries have established
adequate reserves determined in accordance with GAAP consistently applied for
the payment of all federal income taxes and all state and local income taxes and
all franchise, property, sales, employment, foreign or other taxes. Except as
described in the Disclosure Statement, to the Knowledge of Island, Island and
its Subsidiaries have no direct or indirect liability for the payment of federal
income taxes, state and local income taxes, and franchise, property, sales,
employment or other taxes in excess of amounts paid or reserves established.
Except as set forth on the Disclosure Statement, neither Island nor and its
Subsidiaries has entered into any tax sharing agreement or other agreement
regarding the allocation of the tax liability of Island or its Subsidiaries.
Neither Island nor and its Subsidiaries has filed any IRS Forms 1139
(Application for Tentative Refund). Except as set forth on the Disclosure
Statement, there are no pending questions raised in writing by the IRS or other
taxing authority for taxes or assessments of Island or its Subsidiaries, nor are
there any outstanding agreements or waivers extending the statutory period of
limitation applicable to any tax return of Island or its Subsidiaries for any
period. To the Knowledge of Island, Island and its Subsidiaries have withheld
from employee wages and paid over to the proper governmental authorities all
amounts required to be so withheld and paid over. For the purposes of this
Agreement, the term "tax" shall include all federal, state and local taxes and
related governmental charges and any interest or penalties payable in connection
with the payment of taxes.
SECTION 3.10. UNDISCLOSED LIABILITIES. Except as set forth on
the Disclosure Statement attached hereto, neither Island nor its Subsidiaries
has any liability (whether known or unknown, whether absolute or contingent,
whether liquidated or unliquidated, and whether due or to become due), including
any liability for taxes, except for (i) liabilities set forth on the face of
Island's consolidated balance sheet dated as of the end of the Most Recent
Fiscal Quarter (rather than in any notes thereto) and (ii) liabilities which
have arisen after the end of the Most Recent Fiscal Quarter in the Ordinary
Course of Business or in connection with the transactions provided for in this
Agreement (none of which relates to any breach of contract, breach of warranty,
tort, infringement, or violation of law or arose out of any charge, complaint,
action, suit, proceeding, hearing, investigation, claim, or demand and none of
which, individually or in the aggregate, materially and adversely affect the
business, assets, financial condition or prospects of Island and its
Subsidiaries taken as a whole).
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SECTION 3.11. BROKERS' FEES. Other than pursuant to the
agreement between Island and the Xxxxxxxx Financial Advisors, L.L.C., none of
Island or its Subsidiaries has any liability or obligation to pay any fees or
commissions to any broker, finder, or agent with respect to the transactions
contemplated by this Agreement.
SECTION 3.12. DISCLOSURE. The Definitive Island Proxy
Materials will substantially comply with the disclosure requirements of Schedule
14A (Regulation 14a-101) under the Securities Exchange Act, if Bancorp
determines in its sole discretion that compliance is necessary to obtain the
No-Action Letter referenced in ss.5.5(ii)(a), and will otherwise satisfy the
requirements of applicable state and federal laws, rules and regulations. The
Definitive Island Proxy Materials will not contain any untrue statement of a
material fact or omit to state a material fact necessary in order to make the
statements made therein, in the light of the circumstances under which they will
be made, not misleading; provided, however, that Island makes no representation
or warranty with respect to any information that Bancorp or 1st United will
supply specifically for use in the Definitive Island Proxy Materials. None of
the information that Island will supply specifically for use in the Registration
Statement or the Prospectus will contain any untrue statement of a material fact
or omit to state a material fact necessary in order to make the statements made
therein, in the light of the circumstances under which they will be made, not
misleading.
SECTION 3.13. TITLE TO PROPERTIES. Except as set forth on the
Disclosure Statement, to the Knowledge of Island and its Subsidiaries, Island
and its Subsidiaries have good and marketable title to all of their real estate
and assets (including those reflected in Island's September 30, 1996
consolidated balance sheet except such as have been disposed of in the Ordinary
Course of Business) free of any mortgage, encumbrance, lien or Security Interest
except pledges of assets to secure public deposits and minor imperfections in
title and encumbrances which do not or will not materially and adversely affect
the value, marketability and utility of such assets or the operations of Island
and its Subsidiaries.
SECTION 3.14. EMPLOYMENT CONTRACTS. Except as set forth on the
Disclosure Statement, neither Island nor its Subsidiaries is a party or subject
to any contract of employment not terminable at will or any profit sharing,
incentive compensation, bonus, thrift, savings or other Employee Benefit Plan
providing for employer contributions.
SECTION 3.15. COMPLIANCE WITH LAWS. Except as set forth on the
Disclosure Statement, to the Knowledge of Island and its Subsidiaries, Island
and its Subsidiaries are in substantial compliance with all laws, rules,
regulations and other legal requirements applicable to them and Island knows of
no reason why the Merger will not be approved by the requisite governmental and
regulatory authorities.
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SECTION 3.16. LITIGATION AND ADMINISTRATIVE PROCEEDINGS.
Except as set forth on the Disclosure Statement attached hereto, as of the
Effective Date, there is no action, suit, arbitration or administrative
proceeding or investigation to which Island or any of its Subsidiaries is or, to
the Knowledge of Island, may be a party or subject which is pending, or
threatened other than collection proceedings by Island as a creditor in the
Ordinary Course of Business in which no counterclaim or offset has been asserted
or threatened. Except as set forth on the Disclosure Statement, to the Knowledge
of Island, there are no potential unasserted claims against Island or any of its
Subsidiaries that may have a material adverse effect on Island or any of its
Subsidiaries condition, financial or otherwise, or its businesses or their
assets taken as a whole. Island and its Subsidiaries have furnished or made
available to Bancorp, or will do so upon delivery of the Disclosure Statement,
copies of all relevant court papers and other documents relating to any matters
set forth in the Disclosure Statement. Except as set forth in the Disclosure
Statement, neither Island nor any of its Subsidiaries is in default under, or
currently subject to, any material judgment, order, decree, injunction or
cease-and-desist order of any foreign, federal, state or local court,
department, agency or instrumentality.
SECTION 3.17. EMPLOYEE BENEFIT PLANS.
(i) Except as set forth on the Disclosure Statement, to the
Knowledge of Island, all of the Employee Benefit Plans and any related trust
agreements or annuity contracts (or any other funding instruments) comply
currently, and have complied in the past, both as to form and operation, with
the provisions of ERISA, the Code and with all other applicable laws, rules and
regulations governing the establishment and operation of the Employee Benefit
Plans; all necessary governmental approvals relating to the establishment of the
Employee Benefit Plans have been obtained; and with respect to each Employee
Benefit Plan that is intended to be tax-qualified under Section 401(a) or 403(a)
of the Code, a favorable determination letter as to the qualification under the
Code of each such Employee Benefit Plan and each material amendment thereto has
been issued by the IRS (and nothing has occurred since the date of the last such
determination letter which resulted in, or is likely to result in the revocation
of such determination) and all required audits have been timely completed;
(ii) To the Knowledge of Island, each Employee Benefit Plan
has been administered in compliance with its terms and the requirements of the
Code, ERISA, and all other applicable laws, and all reports and disclosures
required by ERISA, the Code and any other applicable laws with respect to each
Employee Benefit Plan have been timely filed;
(iii) On and after January 1, 1975, to the Knowledge of
Island, neither Island, any of its Subsidiaries nor any plan fiduciary of any
Employee Benefit Plan or Pension Benefit Plan has engaged in any transaction in
violation of Section 406 of ERISA (for which transaction
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no exemption exists under Section 408 of ERISA) or in any "prohibited
transaction" as defined in Section 4975(c)(1) of the Code (for which no
exemption exists under Section 4975(c)(2) or 4975(d) of the Code);
(iv) The Disclosure Statement lists each Employee Benefit Plan
and each deferred compensation plan, bonus plan, stock option plan, employee
stock purchase plan, restricted stock, excess benefit plan, incentive
compensation, stock bonus, cash bonus, severance pay, golden parachute, life
insurance, all nonqualified deferred compensation arrangements, all unfunded
plans and any other employee benefit plan, agreement, arrangement or commitment
not included in the term Employee Benefit Plan (other than normal policies
concerning holidays, vacations and salary continuation during short absences for
illness or other reasons) maintained by Island or any of its Subsidiaries;
(v) True and complete copies of each Employee Benefit Plan,
related trust agreements or annuity contracts (or any other funding
instruments), summary plan descriptions, each plan, agreement, arrangement, and
commitment relating to such Employee Benefit Plan, the most recent determination
letter issued by the IRS with respect to each Employee Benefit Plan, the most
recent application for a determination letter from the IRS with respect to each
Employee Benefit Plan and Annual Reports on form 5500 series filed with any
governmental agency for each Employee Benefit Plan for the two most recent plan
years, have been furnished to Bancorp;
(vi) All Employee Benefit Plans, related trust agreements or
annuity contracts (or any other funding instruments), and all plans, agreements,
arrangements and commitments relating to such Employee Benefit Plans are, to the
Knowledge of Island, legally valid and binding and in full force and effect and
there are no promised increases in benefits (whether expressed, implied, oral or
written) under any of these plans nor any obligations, commitments or
understandings to continue any of such plans, (whether expressed, implied, oral
or written) except as required by Section 4980B of the Code and Sections 601-608
or ERISA;
(vii) There are no claims pending with respect to, or under,
any Employee Benefit Plan or any plan, agreement, arrangement or commitment
relating to any Employee Benefit Plan, other than routine claims for plan
benefits, and there are no disputes or litigation pending or, to the Knowledge
of Island, threatened with respect to any such plans;
(viii) To the Knowledge of Island, no action has been taken,
nor has there been a failure to take any action that would subject any person or
entity to any liability for any income, excise or other tax or penalty in
connection with any Employee Benefit Plan or any plan, agreement, arrangement or
commitment relating to such Employee Benefit Plans, other than for income taxes
due with respect to benefits paid;
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(ix) Except as otherwise set forth in the Disclosure
Statement, neither the execution and delivery of this Agreement nor the
consummation of the transactions contemplated hereby will (i) result in any
payment to be made by Island or any of its Subsidiaries (including, without
limitation, severance, unemployment compensation, golden parachute (defined in
Section 280G of the Code), or otherwise) becoming due to any employee, (ii)
increase any benefits otherwise payable under any Employee Benefit Plan, or any
plan, agreements, arrangements, and commitments relating to such Employee
Benefit Plan; or (iii) increase the cost of any Employee Benefit Plan; and
(x) All contributions and/or payments with respect to Employee
Benefit Plans have been timely paid or accrued by Island.
SECTION 3.18. ISLAND SUBSIDIARIES. All of the Subsidiaries of
Island are listed on the Disclosure Statement together with the jurisdiction of
organization, composition of equity ownership of such Subsidiary and the
officers and directors thereof.
SECTION 3.19. REAL PROPERTY.
(i) The Disclosure Statement lists and describes briefly all
real property that Island or any of its Subsidiaries owns including real
property obtained through foreclosure or conveyance in lieu of foreclosure. With
respect to each such parcel of owned real property:
a) the identified owner has good and marketable title
to the parcel of real property, free and clear of any Security Interest,
easement, covenant, or other restriction, except for matters disclosed on the
Disclosure Statement and installments of special assessments not yet delinquent
and recorded easements, covenants, and other restrictions which do not impair
the current use, occupancy, or value, or the marketability of title, of the
property subject thereto;
b) there are no pending or, to the Knowledge of
Island, threatened condemnation proceedings, lawsuits, or administrative actions
relating to the property or other matters affecting materially and adversely the
current use, occupancy, or value thereof;
c) the legal description for the parcel contained in
the deed thereof describes such parcel fully and adequately, to the Knowledge of
Island, the buildings and improvements (except as set forth in the Disclosure
Statement) are located within the boundary lines of the described parcels of
land, are not in violation of applicable setback requirements, zoning laws, and
ordinances, and the land does not serve any adjoining property for the purpose
inconsistent with the use of the land, and the property is not located within
any flood plain or subject to any similar type restriction for which any permits
or licenses necessary to the use thereof have not been obtained;
d) to the Knowledge of Island, all facilities have
received all approvals of governmental authorities (including licenses and
permits) required in connection
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with the ownership or operation thereof and have been operated and maintained
substantially in accordance with applicable laws, rules and regulations;
e) there are no leases, subleases, licenses,
concessions, or other agreements, written or oral, granting to any party or
parties the right of use or occupancy of any portion of any parcel of real
property except as set forth on the Disclosure Statement;
f) except as set forth on the Disclosure Statement,
there are no outstanding contracts for sale, options or rights of first refusal
to purchase any parcel of real property, or any portion thereof or interest
therein;
g) there are no parties (other than Island) in
possession of any parcel of real property, other than tenants under any leases
disclosed in the Disclosure Statement who are in possession of space to which
they are entitled;
h) all facilities located on the parcel of real
property are supplied with utilities and other services necessary for the
operation of such facilities, including gas, electricity, water, telephone,
sanitary sewer, and storm sewer, all of which services are, to the Knowledge of
Island, adequate in accordance with all applicable laws, ordinances, rules and
regulations and are provided via public roads or via permanent, irrevocable,
appurtenant easements benefiting the parcel of real property; and
i) except as set forth on the Disclosure Statement,
each parcel of real property has direct vehicular access to a public road, or
has access to a public road via a permanent, irrevocable, appurtenant easement
benefiting the parcel of real property; and
j) to the Knowledge of Island, each parcel is in
compliance with all Environmental Laws, no Hazardous Substances are or have been
manufactured, stored, used or disposed of on any such parcel except in strict
compliance with all Environmental Laws, there has been no release or discharge
of Hazardous Substances on or from any such parcel and no litigation or
administrative proceeding is pending or has been threatened in connection with
the manufacture, storage, use, disposal or discharge of Hazardous Substances on
or from any such parcel or naming Island as a defendant or potentially
responsible party.
(ii) The Disclosure Statement lists and describes briefly all
real property leased or subleased to Island or any of its Subsidiaries.
Island has delivered to Bancorp correct and complete copies of the leases and
subleases listed in the Disclosure Statement (as amended to date). With respect
to each lease and sublease listed in the Disclosure Statement:
a) to the Knowledge of Island, the lease or sublease
is legal, valid, binding, enforceable, and in full force and effect;
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b) the lease or sublease will continue to be legal,
valid, binding, enforceable, and in full force and effect on identical terms
following the consummation of the transactions contemplated hereby;
c) to the Knowledge of Island, no party to the lease
or sublease is in material breach or default, and no event has occurred which,
with notice or lapse of time, would constitute a breach or default or permit
termination, modification, or acceleration thereunder;
d) to the Knowledge of Island, no party to the lease
or sublease has repudiated any provision thereof;
e) to the Knowledge of Island, there are no disputes,
oral agreements, or forbearance programs in effect as to the lease or sublease;
f) to the Knowledge of Island, with respect to each
sublease, the representations and warranties set forth in subsections (a)
through (e) above are true and correct with respect to the underlying lease;
g) neither of Island nor any of its Subsidiaries has
assigned, transferred, conveyed, mortgaged, deeded in trust, or encumbered any
interest in the leasehold or subleasehold; and
h) to the Knowledge of Island, all facilities leased
or subleased thereunder have received all approvals of governmental authorities
(including licenses and permits) required in connection with the operation
thereof and have been operated and maintained substantially in accordance with
applicable laws, rules and regulations.
SECTION 3.20. TANGIBLE ASSETS. Island and each of its
Subsidiaries own or lease all buildings, machinery, equipment, and other
tangible assets necessary for the conduct of their businesses as presently
conducted. Each such tangible asset has been maintained in accordance with
normal industry practice, is in good operating condition and repair (subject to
normal wear and tear), and is suitable for the purposes for which it presently
is used.
SECTION 3.21. CONTRACTS. The Disclosure Statement lists the
following contracts and other agreements to which any of Island or its
Subsidiaries is a party other than leases or subleases of real property:
(i) any agreement (or group of related agreements), other than
those cancelable without penalty or continued obligation on 90 days notice or
less, for the lease of personal property to or from any entity or person
providing for lease payments in excess of $15,000.00 per annum;
(ii) any agreement (or group of related agreements), other
than those cancelable without penalty or continued obligation on 90 days notice
or less, for the purchase or sale of raw materials, commodities, supplies,
products, or other personal property, or for the
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furnishing or receipt of services, the performance of which will extend over a
period of more than one year, or involve consideration in excess of $15,000.00;
(iii) any agreement concerning a partnership or joint venture;
(iv) any agreement (or group of related agreements) under
which Island or any of its Subsidiaries has created, incurred, assumed, or
guaranteed any indebtedness for borrowed money, or any capitalized lease
obligation, in excess of $15,000.00 or under which it has imposed a Security
Interest on any of its assets, tangible or intangible;
(v) any agreement concerning confidentiality or
noncompetition;
(vi) any collective bargaining agreement;
(vii) any agreement, other than those cancelable without
penalty or continued obligation on 90 days notice or less, for the employment of
any individual on a full-time, part-time, consulting, or other basis (other than
employees at will) providing annual compensation in excess of $25,000.00 or
providing severance benefits;
(viii) any agreement under which it has advanced or loaned any
amount to any of its directors or Executive Officers;
(ix) any agreement under which the consequences of a default
or termination could have a material adverse effect on the business, financial
condition, operations, results of operations, or future prospects of any of
Island or any of its Subsidiaries; or
(x) any other agreements (or group of related agreements),
other than those cancelable without penalty or continued obligation on 90 days
notice or less, the performance of which involves consideration in excess of
$15,000.00.
SECTION 3.22. RELATED PARTY TRANSACTIONS. The Disclosure
Statement lists all agreements, extensions of credit, commitments, tax sharing
or allocation agreements or other contractual agreements of any kind between
Island, its Subsidiaries or any of their Affiliates and any past or present
director of Island or any of its Subsidiaries or any of their Affiliates or, to
the Knowledge of Island, their spouses, children, parents or siblings or their
Affiliates (the "Related Contracts").
SECTION 3.23. ADDITIONAL INVESTMENT REPRESENTATIONS.
Investment has filed with the appropriate governmental or quasi-governmental
agencies, including the SEC, the NASD and all applicable state regulatory
agencies, all filings required of an entity registered as a broker-dealer and as
an investment advisor under the Securities Exchange Act, the Investment Advisors
Act of 1940 or the Florida Acts; and such filings as of the date hereof and as
of the closing Date are true and correct in all material respects and do not and
will not contain any untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements made therein, in light
of the circumstances under which they were made, not misleading. Investment is
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current as of the date hereof and will be current as of the Closing Date with
respect to all of such filings, including, without limitation, Form BD, FOCUS
Reports, and Form U-5's. To the extent required by applicable law, all of
Investment's employees, consultants, officers, directors and/or affiliates, are
properly licensed, have passed the applicable examinations, and are properly
registered with the NASD and any applicable state regulatory agency with respect
to their respective positions and/or responsibilities and have filed U-4's
reflecting the foregoing, and, to the Knowledge of Island or Investment, such
U-4's are current, and are true and correct in all material respects as of the
date hereof and will be current, true and correct in all material respects as of
the closing Date and do not and will not contain any untrue statement of
material fact or omit to state a material fact necessary in order to make the
statements made therein, in light of the circumstances under which they are
made, not misleading. No such employee, consultant, officer and/or director is
in violation of or breach of any employment contract or other agreement with any
other broker-dealer or investment adviser or with any third party with respect
to their employment, retention or affiliation with Investment, nor, to the
Knowledge of Island or Investment, has any such employee, consultant, director,
officer or affiliate been sanctioned, suspended or otherwise disciplined (and to
the Knowledge of Island or Investment, no such actions are contemplated or
threatened, which activities are not reported on Form U-4 filed with the NASD),
by the NASD, SEC or any state regulatory agency, or any other governmental or
quasi-governmental agency, Investment is in substantial compliance with its
supervisory and/or compliance manuals in connection with the operation and
conduct, including the scope, of its business. Investment has not engaged in
providing investment advice at any time since its incorporation other than that
which is ancillary to its brokerage business. Investment has not been sanctioned
or otherwise disciplined (and, to the Knowledge of Island or Investment, no such
actions are pending or threatened) with respect to the operations of its
business by the NASD, SEC, or any state or governmental or quasi-governmental
agency. Investment has conducted its business in all material respects in
accordance with the Securities Exchange Act, applicable state law and
regulation, NASD regulations, the regulations of any applicable securities
exchange or inter-dealer quotation system, and the NASD restriction letter
issued to Investment. Investment has not conducted its business nor engaged in
any business beyond the scope of its registration or beyond the description of
its business and business practices as set forth in Form BD, or as set forth in
Investment's supervisory procedures and/or compliance manuals (copies of which
are on file with the NASD), including without limitation, its commission fee
practices, maintenance of margin and discretionary accounts, record and
bookkeeping practices, and satisfaction of prospectus delivery requirements, if
applicable, and non-contravention of free riding rules and regulations.
Investment is in substantial compliance with its clearing agreement, dated
August
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18, 1989, with First Wachovia Brokerage Service Corporation. Investment
is in full compliance with its net capital obligations, as required by the SEC,
NASD and applicable state agencies. Copies of all filings effectuated by
Investment, its employees, officers, and directors and affiliates during the
preceding five years have been supplied to Bancorp prior to the date hereof, and
any filings made subsequent to the date hereof and prior to the Closing Date
will be supplied to Bancorp within ten (10) days after the date of such filing.
To the Knowledge of Island or Investment, Investment, its affiliates,
officers and directors and employees have filed all requisite 13D's, 13G's and
Forms 3, 4, and 5, if required with the SEC and the NASD with respect to any
beneficial ownership in any public entity, and Investment, its employees,
affiliates, officers, directors and consultants have not violated the short
swing profit rules under the Securities Exchange Act as any rules and/or
regulations governing xxxxxxx xxxxxxx under applicable securities laws.
4. REPRESENTATIONS AND WARRANTIES OF BANCORP. Bancorp and 1st
United represent and warrant to Island that the statements contained in this
ss.4 are correct and complete as of the date of this Agreement and will be
correct and complete as of the Closing Date (as though made then and as though
the Closing Date were substituted for the date of this Agreement throughout this
ss.4), except as set forth in the Disclosure Schedules attached hereto as
updated pursuant to ss.5.10(ii). Bancorp and 1st United agree that as soon as
reasonably practicable after the Effective Date, Bancorp and 1st United will
ascertain whether any of their officers have actual knowledge that any of the
representations and warranties of Bancorp and 1st United in this Agreement are
materially incorrect or incomplete and, if incorrect or incomplete, will
immediately revise such warranties and representations in the fashion provided
in ss.5.10(ii).
SECTION 4.1. ORGANIZATION, QUALIFICATIONS AND CORPORATE POWER.
Bancorp and 1st United are corporations duly organized, validly existing, and in
good standing under the laws of Florida. Bancorp is duly registered under the
Bank Holding Company Act. 1st United is a Florida chartered bank duly organized,
validly existing, and in good standing under the laws of Florida. 1st United is
duly authorized to engage in the business of banking in Florida as an insured
bank under the Federal Deposit Insurance Act, as amended. Each of Bancorp and
1st United is duly authorized to conduct business and is in good standing under
the laws of each jurisdiction in which the nature of its business or the
ownership or leasing of its properties requires such qualification, except where
the lack of such qualification would not have a material adverse effect on the
financial condition of Bancorp or 1st United, taken as a whole or on the
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ability of the Parties to consummate the transactions contemplated by this
Agreement. Each of Bancorp and 1st United has full corporate power and
authority to carry on the businesses in which it is engaged and to own and use
the properties owned and used by it. True and complete copies of the Articles
of Incorporation and Bylaws of Bancorp and 1st United are attached hereto as
Schedule 4.1(i) and 4.1(ii), respectively.
SECTION 4.2. CAPITALIZATION. The entire authorized capital
stock of Bancorp consists of 20,000,000 Bancorp Shares and 5,000,000 shares of
preferred stock, of which 8,267,766 Bancorp Shares are issued and outstanding
and 11,732,234 Bancorp Shares are authorized but unissued. No shares of
preferred stock have been issued. The entire authorized capital stock of 1st
United consists of 10,000,000 1st United Shares, of which 1,035,599 1st United
Shares are issued and outstanding and 8,964,401 1st United Shares are authorized
but unissued. All of the issued and outstanding 1st United Shares are owned,
beneficially and of record, by Bancorp, Park Acquisition Co. or TAB Acquisition
Co. free and clear of any liens, claims or encumbrances whatsoever. All of the
issued and outstanding Bancorp Shares and 1st United Shares have been fully
authorized and are validly issued, fully paid, and nonassessable. The Bancorp
Purchase Shares to be issued pursuant to the Merger, when so issued, will be
duly authorized and validly issued, fully paid and nonassessable, and there will
be no preemptive rights in respect thereof.
SECTION 4.3. AUTHORIZATION OF TRANSACTION. Bancorp and 1st
United have full power and authority (including full corporate power and
authority) to execute and deliver this Agreement and to perform its obligations
hereunder; provided, however, that Bancorp and 1st United cannot consummate the
Merger unless and until they receive approval from the SEC, NASD, the FRB, the
Comptroller, and all of the consents contemplated in Article 5 hereof. Subject
to the foregoing sentence, this Agreement constitutes a valid and legally
binding obligation of Bancorp and 1st United enforceable in accordance with its
terms and conditions. To the Knowledge of Bancorp and 1st United, other than in
connection with the provisions of the Florida Acts, the Securities Exchange Act,
the Securities Act, the rules and regulations of the NASD with respect to
Investment, the state securities laws, the Federal Deposit Insurance Act and the
Bank Holding Company Act, Bancorp and 1st United and their Subsidiaries do not
need to give any notice to, make any filing with, or obtain any authorization,
consent, or approval of any government or governmental agency in order for the
Parties to consummate the transactions contemplated by this Agreement, except
where the failure to give notice, to file, or to obtain any authorization,
consent, or approval would not have a material adverse effect on Bancorp and 1st
United taken as a whole or the ability of the Parties to consummate the
transactions contemplated by this Agreement.
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SECTION 4.4. NONCONTRAVENTION. To the Knowledge of Bancorp and
1st United, neither the execution and the delivery of this Agreement, nor the
consummation of the transactions contemplated hereby, will (i) violate any
statute, regulation, rule, judgment, order, decree, stipulation, injunction,
charge, or other restriction of any government, governmental agency, or court to
which Bancorp or 1st United and their Subsidiaries is subject or any provision
of the charter or bylaws of Bancorp or 1st United and their Subsidiaries or (ii)
conflict with, result in a breach of, constitute a default under, result in the
acceleration of, create in any party the right to accelerate, terminate, modify,
or cancel, or require any notice under any contract, lease, sublease, license,
franchise, permit, indenture, agreement or mortgage for borrowed money,
instrument of indebtedness, Security Interest, or other obligation to which
Bancorp or 1st United and their Subsidiaries is a party or by which either of
them is bound or to which any of their assets is subject (or result in the
imposition of any Security Interest upon any of its assets) except where the
violation, conflicts, breach, defaults, acceleration, termination, modification,
cancellation, or failure to give notice would not have a material adverse effect
on the financial condition of Bancorp and 1st United taken as a whole or on the
ability of the Parties to consummate the transactions contemplated by this
Agreement.
SECTION 4.5. FILINGS WITH THE SEC. Bancorp has made all
material filings with the SEC, if any, that it has been required to make under
the Securities Act and the Securities Exchange Act (collectively the "Bancorp
Public Reports"). Each of the Bancorp Public Reports has complied with the
Securities Act and the Securities Exchange Act in all material respects. Each of
the Bancorp Public Reports is true, complete and correct as of its respective
date and none of the Bancorp Public Reports, as of their respective dates,
contained any untrue statement of a material fact or omitted to state a material
fact necessary in order to make the statements made therein, in light of the
circumstances under which they were made, not misleading. Bancorp has delivered
to Island a correct and complete copy of each Bancorp Public Report filed since
December 31, 1995 (together with all exhibits and schedules thereto and as
amended to date).
SECTION 4.6. FINANCIAL STATEMENTS. Bancorp has filed Quarterly
Reports on form 10Q as required by the SEC for the Most Recent Fiscal Quarter
and an Annual Report on form 10KSB as required by the SEC for the fiscal year
ended December 31, 1995. The financial statements included in or incorporated by
reference into the Public Reports (including the related notes and schedules)
have been prepared in accordance with GAAP applied on a consistent basis
throughout the periods covered thereby and present fairly the financial
condition of Bancorp and its Subsidiaries as of the indicated dates and the
results of operations of Bancorp and its Subsidiaries for the indicated periods,
provided, however, that the interim statements are subject
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to normal year-end adjustments and may not include footnotes which would be
included in year end statements pursuant to GAAP.
SECTION 4.7. BROKERS' FEES. Bancorp and 1st United do not have
any liability or obligation to pay any fees or commission to any broker, finder,
or agent with respect to the transactions contemplated by this Agreement.
SECTION 4.8. DISCLOSURE. The Registration Statement and the
Prospectus, will comply with the Securities Act and the Securities Exchange Act
in all material respects. The Registration Statement and the Prospectus will not
contain any untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements made therein, in the light of the
circumstances under which they will be made, not misleading, provided, however,
that Bancorp and 1st United make no representation or warranty with respect to
any information that Island or its Subsidiaries will supply specifically for use
in the Registration Statement or the Prospectus. None of the information that
Bancorp or 1st United will supply specifically for use in the Definitive Island
Proxy Materials will contain any untrue statement of a material fact or omit to
state a material fact necessary in order to make the statements made therein, in
the light of the circumstances under which they will be made, not misleading.
SECTION 4.9. EVENTS SUBSEQUENT TO MOST RECENT FISCAL QUARTER.
Since the end of the Most Recent Fiscal Quarter , there has not been any
material adverse change in the assets, liabilities, business, financial
condition, operations, results of operations, or future prospects of Bancorp and
its Subsidiaries taken as a whole.
SECTION 4.10. TITLE TO PROPERTIES. To the Knowledge of Bancorp
and 1st United, Bancorp and each of its Subsidiaries have good and marketable
title to all of their real estate and assets (including those reflected in
Bancorp's December 31, 1995 consolidated balance sheet except such as have been
disposed of in the Ordinary Course of Business) free of any mortgage,
encumbrance, lien or security interest except pledges of assets to secure public
deposits and minor imperfections in title and encumbrances which do not
materially detract from the value or impair the use of the properties affected
thereby.
SECTION 4.11. COMPLIANCE WITH LAWS. To the Knowledge of
Bancorp and 1st United, Bancorp and each of its Subsidiaries are in substantial
compliance with all laws, rules, regulations and other legal requirements
applicable to them and they know of no reason why the Merger will not be
approved by the requisite governmental and regulatory authorities.
SECTION 4.12. LITIGATION AND ADMINISTRATIVE PROCEEDINGS. There
is no action, suit, arbitration or administrative proceeding or investigation to
which Bancorp or 1st United is or, to the Knowledge of Bancorp or 1st United,
may be a party or subject which is pending, or threatened, in which there could
be a judgment, order, decree, liability, fine, penalty, injunction
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or cease-and-desist order which could have a material adverse effect on its
condition, financial or otherwise, or the conduct of its business. To the
Knowledge of Bancorp and 1st United, there are no potential unasserted claims
against Bancorp or 1st United that may have a material adverse effect on Bancorp
or 1st United, financial or otherwise, or their businesses or their assets.
Neither Bancorp nor 1st United is in default under, or currently subject to, any
material judgment, order, decree, injunction or cease-and-desist order of any
foreign, federal, state or local court, department, agency or instrumentality.
SECTION 4.13. FILINGS WITH THE FRB AND COMPTROLLER. Bancorp
and 1st United have made all filings with the FRB and the Comptroller that each
has been required to make under the Florida Acts, the Bank Holding Company Act
and the Federal Deposit Insurance Act, as the case may be (collectively the
"Bancorp Reports"). Each of the Bancorp Reports has complied with the Florida
Acts, the Bank Holding Company Act and the Federal Deposit Insurance Act in all
material respects. Each of the Bancorp Reports is true, complete and correct as
of their respective dates and none of the Bancorp Reports, as of their
respective dates, contained any untrue statement of a material fact or omitted
to state a material fact necessary in order to make the statements made therein,
in light of the circumstances under which they were made, not misleading.
Bancorp or 1st United have delivered to Island a correct and complete copy of
each Bancorp Report filed since December 31, 1995 (together with all exhibits
and schedules thereto and as amended to date).
SECTION 4.14. UNDISCLOSED LIABILITIES. Neither of Bancorp nor
1st United has any liability (whether known or unknown, whether absolute or
contingent, whether liquidated or unliquidated, and whether due or to become
due), including any liability for taxes, except for (i) liabilities set forth on
the face of the balance sheet dated as of the end of the Most Recent Fiscal
Quarter (rather than in any notes thereto) and (ii) liabilities which have
arisen after the Most Recent Fiscal Quarter in the Ordinary Course of Business
or in connection with the transactions provided for in this Agreement (none of
which relates to any breach of contract, breach of warranty, tort, infringement,
or violation of law or arose out of any charge, complaint, action, suit,
proceeding, hearing, investigation, claim, or demand and none of which,
individually or in the aggregate, materially and adversely affect the business,
assets, financial condition or prospects of Bancorp or 1st United).
SECTION 4.15. TANGIBLE ASSETS. Bancorp and its Subsidiaries
own or lease all buildings, machinery, equipment, and other tangible assets
necessary for the conduct of their businesses as presently conducted. Each such
tangible asset has been maintained in accordance with normal industry practice,
is in good operating condition and repair (subject to normal wear and tear), and
is suitable for the purposes for which it presently is used.
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SECTION 4.16. ENVIRONMENTAL. To the Knowledge of Bancorp and
1st United, each parcel of real property owned by Bancorp and 1st United is in
substantial compliance with all Environmental Laws, no Hazardous Substances are
or have been manufactured, stored, used or disposed of on any such parcel except
in strict compliance with all Environmental Laws, there has been no release or
discharge of Hazardous Substances on or from any such parcel and no litigation
or administrative proceeding is pending or has been threatened in connection
with the manufacture, storage, use, disposal or discharge of Hazardous
Substances on or from any such parcel or naming Bancorp or 1st United as a
defendant or potentially responsible party.
SECTION 4.17. ERISA.
(i) Except as set forth on the Disclosure Statement, to the
Knowledge of Bancorp and 1st United, all of the employee welfare benefit plans
or employee pension benefit plans maintained by Bancorp or 1st United or to
which Bancorp or 1st United contributes or is required to contribute ("1st
United Employee Benefit Plan") and any related trust agreements or annuity
contracts (or any other funding instruments) comply currently, and have complied
in the past, both as to form and operation, with the provisions of ERISA, the
Code and with all other applicable laws, rules and regulations governing the
establishment and operation of the 1st United Employee Benefit Plans; all
necessary governmental approvals relating to the establishment of the 1st United
Employee Benefit Plans have been obtained; and with respect to each 1st United
Employee Benefit Plan that is intended to be tax-qualified under Section 401(a)
or 403(a) of the Code, a favorable determination letter as to the qualification
under the Code of each such 1st United Employee Benefit Plan and each material
amendment thereto has been issued by the IRS (and nothing has occurred since the
date of the last such determination letter which resulted in, or is likely to
result in the revocation of such determination) and all required audits have
been timely completed;
(ii) To the Knowledge of Bancorp and 1st United, each 1st
United Employee Benefit Plan has been administered in compliance with its terms
and the requirements of the Code, ERISA, and all other applicable laws, and all
reports and disclosures required by ERISA, the Code and any other applicable
laws with respect to each 1st United Employee Benefit Plan have been timely
filed;
(iii) On and after January 1, 1975, to the Knowledge of
Bancorp and 1st United, neither Bancorp, 1st United or any of their Subsidiaries
nor any plan fiduciary of any 1st United Employee Benefit Plan has engaged in
any transaction in violation of Section 406 of ERISA (for which transaction no
exemption exists under Section 408 of ERISA) or in any "prohibited transaction"
as defined in Section 4975(c)(1) of the Code (for which no exemption exists
under Section 4975(c)(2) or 4975(d) of the Code);
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(iv) There are no claims pending with respect to, or under,
any 1st United Employee Benefit Plan or any plan, agreement, arrangement or
commitment relating to any 1st United Employee Benefit Plan, other than routine
claims for plan benefits, and there are no disputes or litigation pending or, to
the Knowledge of Bancorp and 1st United, threatened with respect to any such
plans;
(v) To the Knowledge of Bancorp and 1st United, no action has
been taken, nor has there been a failure to take any action that would subject
any person or entity to any liability for any income, excise or other tax or
penalty in connection with any 1st United Employee Benefit Plan or any plan,
agreement, arrangement or commitment relating to such 1st United Employee
Benefit Plans, other than for income taxes due with respect to benefits paid;
(vi) Neither the execution and delivery of this Agreement nor
the consummation of the transactions contemplated hereby will (i) result in any
payment to be made by Bancorp or 1st United or any of its Subsidiaries
(including, without limitation, severance, unemployment compensation, golden
parachute (defined in Section 280G of the Code), or otherwise) becoming due to
any employee, (ii) increase any benefits otherwise payable under any 1st United
Employee Benefit Plan, or any plan, agreements, arrangements, and commitments
relating to such 1st United Employee Benefit Plan; or (iii) increase the cost of
any 1st United Employee Benefit Plan; and
(vii) All contributions and/or payments with respect to 1st
United Employee Benefit Plans have been timely paid or accrued by Bancorp and
1st United.
5. COVENANTS. The Parties agree as follows with respect to the
period from and after the execution of this Agreement.
SECTION 5.1. GENERAL. Each of the Parties will use its
reasonable best efforts to take all action and to do all things necessary,
proper, or advisable to consummate and make effective the transactions
contemplated by this Agreement as soon as practicable (including satisfying the
closing conditions set forth in Article 6 below).
SECTION 5.2. ISLAND AGREEMENTS. Island and its Subsidiaries
will give any notices to third parties, and will use its reasonable best efforts
to obtain any third party consents, that Bancorp or 1st United reasonably may
request in connection with the matters pertaining to Island or its Subsidiaries.
Island shall obtain the following:
(i) within thirty (30) days after the
Effective Date, Noncompetition Agreements from each of the directors of
Island and its Subsidiaries other than E. Xxxxxxx Xxxxxx in substantially the
form attached hereto as Exhibit "B", the term of which shall be two
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(2) years after the Effective Time and from E. Xxxxxxx Xxxxxx in substantially
the form attached hereto as Exhibit "C";
(ii) within thirty (30) days after the Effective Date,
agreements from each of the directors of Island in substantially the form of the
Agreement and Proxy attached hereto as Exhibit "D";
(iii) within thirty (30) days after the Effective Date,
confirmation, in form and substance reasonably acceptable to Bancorp, that the
EDP Agreement is to be terminated effective on the conversion of Island's data
processing systems to the 1st United data processing systems and the total cost
incurred by reason of such termination; and
(iv) within thirty (30) days after the Effective Date,
agreements in form and substance reasonably acceptable to Bancorp pursuant to
which the holder of each Island Option, other than Xxxxxxx Xxxxxx, agrees to
accept the consideration provided in Section 2.6(ii)(a) in exchange for all of
the rights of that holder of Island Options under the agreements pursuant to
which those Island Options were granted, including, without limitation, all
rights to Island Stock or Bancorp Shares other than Bancorp Purchase Shares
allocated pursuant to Section 2.6(ii)(a). Island shall exert best efforts to
obtain such an agreement from Xxxxxxx Xxxxxx within thirty (30) days after the
Effective Date.
The agreements referenced in (i), (ii) and (iv) above shall be
held in escrow by Island and delivered to Bancorp at Closing and shall become
effective only from and after Closing.
SECTION 5.3. OTHER AGREEMENTS.
(i) Bancorp agrees that it will enter into the Non-Competition
Agreements with the other directors of Island and E. Xxxxxxx Xxxxxx in
substantially the form attached hereto as Exhibits "B" and "C".
(ii) Island agrees that Island and its Subsidiaries will not
pay or commit to Stay Bonuses which aggregate in excess of $283,000, which have
not been approved by Bancorp or which are payable sooner than ninety (90) days
after the Effective Time, except for Stay Bonuses to be paid to directors of
Island which may be paid at Closing. Bancorp agrees to pay any Stay Bonuses
which have been approved by Bancorp but which are not paid at Closing.
(iii) Within thirty (30) days after the Effective Date, Island
shall cause Carrier & Company to complete an audit of Island's records as they
relate to the payment of documentary stamp and intangible taxes due to the State
of Florida from Island. Bancorp shall pay for the cost of that audit. If the
audit discloses that Island has liability for the payment of documentary stamp
tax, intangible tax or interest or penalties relating thereto (the "Tax
Liability"), such Tax Liability shall be entered as a liability on the books of
Island prior to
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computation of Island Closing Equity and shall be deducted from Island Closing
Equity. In the event the Tax Liability exceeds Seventy Five Thousand and
no/100s Dollars ($75,000.00), Island shall have the right, exercisable by
delivery of written notice to Bancorp within five (5) business days after
receipt of the audit, to cancel this Agreement unless Bancorp chooses, by
delivery of written notice to Island within five (5) business days after
receipt of Island's notice, that only the first Seventy Five Thousand and
no/100s Dollars ($75,000.00) of the Tax Liability will be deducted from Island
Closing Equity in which event the Closing shall occur as otherwise provided
herein. If Bancorp does not timely elect to limit the amount of the Tax
Liability as provided above, this Agreement shall be deemed terminated pursuant
to Section 7.1 hereof.
SECTION 5.4. NOTICES AND CONSENTS OF BANCORP. Bancorp and 1st
United will give any notices to third parties, and will use its reasonable best
efforts to obtain any third party consents, that Island reasonably may request
in connection with the matters pertaining to Bancorp and 1st United disclosed or
required to be disclosed in the Disclosure Statement.
SECTION 5.5. REGULATORY MATTERS AND APPROVALS.
(i) Bank Regulatory Matters. As soon as practicable following
the Effective Date, Bancorp will cause to be prepared and filed with the Federal
Reserve Bank of Atlanta and with the Comptroller, applications for their
approval of the Merger, and with any other regulatory agencies having
jurisdiction any other applications for approvals or consents which may be
necessary for the consummation of the Merger. Bancorp will take or cause to be
taken all actions necessary for such applications to be approved and will
provide Island with the proposed form of applications to be filed at least five
(5) days prior to filing and subsequently with copies of all correspondence and
notices to or from such agencies concerning such applications.
(ii) Securities Act, Securities Exchange Act, State
Securities Laws and Federal Deposit Insurance Act.
a) NO-ACTION LETTER. Bancorp shall have the option to
seek to obtain assurances that the issuance of the Bancorp Purchase Stock will
qualify for exemption from the registration requirements of the Securities Act
and applicable state securities laws, pursuant to the exemption therefrom
contained in Section 3(a)(10) of the Securities Act and similar exemptions
contained in states securities laws, respectively. After the execution of this
Agreement, Bancorp and its counsel may submit to the Division of Corporation
Finance of the SEC a request for a "no-action letter" (the "No-Action Letter").
The No-Action Letter will seek a statement from the Division of Corporation
Finance that it will take no enforcement or administrative action if the Bancorp
Purchase Stock proposed to be issued in connection with the Merger are issued in
reliance upon and in accordance with the exemption from registration contained
in Section 3(a)(10) of the Securities Act. Bancorp shall make the request for
the No
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Action Letter not later than ten (10) business days after the Effective
Date, or Bancorp shall be deemed to have waived the right to seek the No Action
Letter. Similar requests will be made to the State of Florida Department of
Banking and Finance and to such other state securities authorities as Bancorp
may determine is necessary or desirable.
b) RULE 144. The request for the No-Action
Letter will also seek confirmation from the Division of Corporation Finance
that, with respect to public resales of Bancorp Purchase Stock:
(i) The Bancorp Purchase Stock held by
nonaffiliates of Island will not be deemed "restricted" pursuant to Rule
144(a)(3).
(ii) Non-affiliates of Island who are
non-affiliates of Bancorp may resell Bancorp Purchase Stock without regard to
Rules 144 or 145(c) and (d).
(iii) Affiliates of Island who are non-affiliates
of Bancorp may sell Bancorp Purchase Stock in any manner permitted by Rule
145(d). Such persons may resell such shares in the manner permitted by Rule
145(d)(1) without regard to the holding period required by Rule 144(d). In
computing the holding period of Bancorp Purchase Stock acquired in the
transaction for purposes of Rule 145(d)(2) or (3), however, such persons may not
"tack" the holding period of their Island Shares.
c) PUBLIC HEARING. To cause the exemption from the
registration contained in Section 3(a)(10) of the Securities Act to be
applicable to the issuance of the Bancorp Purchase Stock, Bancorp further
agrees, promptly after receipt of the No-Action Letter, to submit appropriate
requests to the Comptroller, pursuant to Chapter 655 of the Florida Statues and
Rule 3C-105.104 of the Administrative Rules of the Florida Department of Banking
and Finance, for a public hearing upon the fairness of the valuation of the
consideration to be received by Island Stockholders in the transactions
contemplated herein and the fairness of the terms and conditions of the issuance
of the Bancorp Purchase Stock. Each Island Stockholder shall have the right to
appear at such hearing. Upon the scheduling of such public hearing, Island
agrees promptly to provide each Island Stockholder with notice of such public
hearing in accordance with the Florida Statutes and the Administrative Rules of
the Florida Department of Banking and Finance, and otherwise in accordance with
any other conditions or requirements imposed by the Comptroller with respect to
such public hearing. In the event the public hearing results in the Merger being
disapproved by the Comptroller, Bancorp shall have no obligation to prepare or
file the Registration Statement.
d) PROXY MATERIALS. Island shall, at Island's sole
cost and expense, prepare for delivery to the Island Stockholders the Definitive
Island Proxy Materials regarding the terms of the transactions contemplated by
this Agreement in form and substance sufficient to
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substantially comply with the disclosure requirements of Schedule 14A
(Regulation 14a-101) under the Exchange Act, if Bancorp determines that
compliance is necessary to obtain the No-Action Letter. Island shall be
responsible to ascertain whether the Definitive Island Proxy Materials are
otherwise sufficient to satisfy the requirements of applicable state and federal
laws, rules and regulations. Island shall submit the Definitive Island Proxy
Materials to Bancorp for Bancorp's review and written approval prior to delivery
to the Island Stockholders. The Definitive Island Proxy Materials shall be
mailed to the Island Stockholders not later than the earlier to occur of: (i)
ten (10) days after receipt of the later of the approvals of the applications
submitted to the Federal Reserve Bank of Atlanta and the Comptroller, or (ii)
April 30, 1997. Bancorp will provide Island with whatever information and
assistance in connection with the preparation of the Definitive Island Proxy
Materials that is necessary to disclose all facts material to the condition,
assets, properties, rights, businesses, operations or prospects of Bancorp and
1st United so as to satisfy the requirements of applicable state and federal
laws, rules and regulations. Island shall not be liable for any untrue statement
of material fact or omission to state a material fact made in reliance upon, and
in conformity with, information furnished to Island by Bancorp or 1st United for
use therein. Bancorp and 1st United shall have no responsibility or liability
for any untrue statement of material fact in the Definitive Island Proxy
Materials or omission to state a material fact necessary in order to make
statements made in the Definitive Island Proxy Materials not misleading unless
such statement is based solely on information supplied by Bancorp or 1st United.
e) REGISTRATION. In the event the No-Action Letter is
not issued by the SEC as contemplated by Section 5.5(ii)(a) and (b) within 120
days after the Effective Date or within thirty (30) days after the date Bancorp
decides not to request the No-Action Letter, Bancorp will prepare and file with
the SEC a registration statement under the Securities Act relating to the
offering and issuance of the Bancorp Purchase Stock (the "Registration
Statement") and will file, as necessary, registrations or other documents with
state securities agencies required under applicable state securities regulations
all such filings to be made as soon as reasonably practical after the expiration
of the time to receive the No Action Letter if not timely received. Bancorp will
use its reasonable best efforts to respond to the comments of the SEC thereon
and will make any further filings (including amendments and supplements) in
connection therewith that may be necessary, proper, or advisable. Bancorp will
provide Island, and Island will provide Bancorp, with whatever information and
assistance in connection with the foregoing filings that the filing Party
reasonably may request. Bancorp will not be liable for any untrue statement of a
material fact or omission to state a material fact in the Registration Statement
made in reliance upon, and in conformity with, information furnished to Bancorp
by Island for
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use therein. Bancorp and Island will provide the other Party with copies of all
correspondence, comment letters or notices to or from the SEC concerning or
relating to the Registration Statement or the Definitive Island Proxy Materials
and Bancorp will advise Island promptly after it receives notice of the time
when the Registration Statement has become effective or any supplement or
amendment thereto has been filed, of the issuance of any stop order with respect
to the effectiveness thereof, of the suspension of the qualification of the
Bancorp Purchase Stock to be issued in connection with the Merger for offering
or sale in any jurisdiction, of the initiation or threat of any proceeding for
any such purpose, or of any request by the SEC for the amendment or supplement
of the Registration Statement or the filing or submission of additional
information. Bancorp will take all actions that may be necessary, proper, or
advisable under state securities laws in connection with the offering and
issuance of the Bancorp Purchase Shares.
f) FLORIDA ACTS. 1st United and Island shall take
action as soon as reasonably practicable to obtain approval of the Merger in
accordance with the Florida Acts. Island will call a special meeting of the
Island Stockholders (the "Special Island Meeting") as soon as reasonably
practicable after the mailing of the Definitive Island Proxy Materials in order
that its stockholders may consider and vote upon the adoption of this Agreement
and the approval of the Merger. The Definitive Island Proxy Materials will
contain the affirmative recommendations of the board of directors of Island in
favor of the adoption of this Agreement and the approval of the Merger except to
the extent that such recommendation would cause any director or officer of any
Party to violate any fiduciary duty or other requirement imposed by law in
connection therewith.
g) OTHER GOVERNMENTAL MATTERS. Each of the Parties
will take and will cause their Subsidiaries to take any additional action that
may be necessary, proper, or advisable in connection with any other notices to,
filings with, and authorizations, consents, and approvals of governments and
governmental agencies that it may be required to give, make or obtain.
SECTION 5.6. FAIRNESS OPINIONS. On or before the Effective
Date Island shall obtain a verbal opinion from an investment banker or other
consultant of Island's choosing as to the fairness of the Merger to Island
Stockholders from a financial point of view (the "Island Fairness Opinion").
Prior to the date the Definitive Island Proxy Materials are mailed to the Island
Stockholders and the date of the public hearing contemplated by ss.5.5(ii)(c),
Island will obtain the Island Fairness Opinion in written form.
SECTION 5.7. OPERATION OF BUSINESS. Without the prior written
consent of Bancorp, which may be given or withheld in the sole discretion of
Bancorp unless otherwise provided in this ss.5.7, Island and its Subsidiaries
will not engage in any practice, take any action,
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embark on any course of inaction, or enter into any transaction outside the
Ordinary Course of Business except as otherwise specifically provided in the
Disclosure Statement or this Agreement. Without limiting the generality of the
foregoing, neither Island nor any of its Subsidiaries will:
(i) authorize or effect any change in its charter or bylaws;
(ii) grant any options, warrants, or other rights to purchase
or obtain any of its capital stock or issue, sell, or otherwise dispose of any
of its capital stock other than sales of stock pursuant to the exercise of
Island Options;
(iii) declare, set aside, or pay any dividend or distribution
with respect to its capital stock, or redeem, repurchase, or otherwise acquire
any of its capital stock;
(iv) create, incur, assume, or guarantee any indebtedness
(including any capitalized leased obligation) outside the Ordinary Course of
Business;
(v) impose, grant or suffer any Security Interest upon any of
its assets outside the Ordinary Course of Business;
(vi) make any capital investment in, make any loan to, or
acquire the securities or assets of any other person outside the Ordinary Course
of Business unless Bancorp has consented to such action or, as to Island, such
loan is fully secured by a certificate of deposit of Island or is permitted
under ss.5.8;
(vii) except as set forth in the Disclosure Statement, make
any change in employment terms for any of its directors, officers, and employees
outside the Ordinary Course of Business with the understanding that paying or
agreeing to pay any bonuses (other than incentive performance bonuses under
existing compensation plans or Stay Bonuses) or entering into any new employment
contracts or renewing any existing employment contracts, other than as expressly
provided herein, shall be deemed outside the Ordinary Course of Business;
(viii) enter into any agreement which would be required to be
disclosed pursuant to Section 3.21 of this Agreement;
(ix) discontinue or omit the independent loan review and
internal audit services contemplated by Island's 1997 business plan as of the
Effective Date;
(x) knowingly permit the occurrence of any change or event
which would render any of its representations and warranties contained herein
materially untrue at and as of the Closing Date; or
(xi) commit to do any of the foregoing.
Bancorp agrees that its consent to the matters covered by subsections (i), (iv),
(v) and (viii) above will not be unreasonably withheld.
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SECTION 5.8. ISLAND OPERATIONS. Without the prior written
consent of Bancorp which shall not be unreasonably withheld, Island shall not:
(i) make or commit to make any new or renewal loan or series
of related loans to one borrower or its Affiliates or which would be aggregated
for the purpose of ascertaining Island's compliance with the provisions of 12
U.S.C. ss.84, with an aggregate principal balance greater than $250,000;
(ii) agree to any increase in an existing loan so that the
outstanding principal balance of that loan exceeds $250,000;
(iii) make or commit to make any loan financing the purchase
of real estate owned by Island that exceeds $250,000.00 in principal balance or
the principal balance of which exceeds eighty percent (80%) of the fair market
value of the collateral securing the loan;
(iv) make or commit to make any loan to pay interest or taxes
on any existing Island loan;
(v) make or commit to make any unsecured loan with a principal
balance in excess of $100,000.00;
(vi) make or commit to make a new loan or modify an existing
loan to any officer, director or former director of Island;
(vii) other than in the Ordinary Course of Business and
consistent with past practices of Island, accept term deposits or change the
interest rates or service charges on its deposit accounts;
(viii) make any change to its reserves for loan losses except
for charge offs, recoveries of loans previously written off or written down to
the extent of the write offs or write downs and increases in provisions for loan
losses which have been reflected on Island's income statements;
(ix) either sell any of the investment securities in its
investment portfolio (unless sale is required to accomplish necessary liquidity
for Island) or purchase any new investment securities which have an aggregate
value in excess of $500,000.00 per transaction;
(x) reclassify investment securities from "held for sale" to
"held to maturity" or from "held to maturity" to "held for sale", as those terms
are used in FASB 115;
(xi) sell any assets (other than investment securities as
provided in subsection (ix) above), including, without limitation, real estate
(except real estate or other assets acquired by Island through the exercise of
remedies under loan documentation and obsolete or damaged equipment and
furniture provided that such equipment and furniture is replaced with items of
equal utility and value), loans (other than Small Business Administration loans
or newly
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originated residential mortgage loans sold in the Ordinary Course of Business)
or loan servicing rights; and
(xii) sell or agree to sell any real estate owned by Island or
any of Island's Subsidiaries to any director, former director, officer or former
officer of Island or any Island Stockholder (the "Insiders") or to any
Subsidiary, Affiliate, relative or fiduciary for the benefit of any of the
Insiders or any entity which is controlled by or in which any of the Insiders
has an ownership interest.
The restrictions set out in subsection (i) through (iv) above
shall not apply if the loan is fully secured by a certificate of deposit of
Island. Bancorp agrees that its consent will not be unreasonably withheld and
that if it has not responded to a request for its consent within two (2)
business days after receipt of a written request Bancorp's consent shall be
deemed to have been given.
SECTION 5.9. FULL ACCESS. Island will permit representatives
of Bancorp and 1st United to have full access at all reasonable times, and in a
manner so as not to interfere with the normal business operations of Island and
its Subsidiaries, to all premises, properties, books, records, contracts, tax
records, and documents of or pertaining to each of Island and its Subsidiaries.
Bancorp is hereby authorized to contact any governmental or other regulatory
authorities having jurisdiction over Island or its Subsidiaries to obtain any
information or approvals Bancorp deems advisable and Island hereby authorizes
any such authorities to disclose any of such information to Bancorp. Bancorp
shall permit representatives of Island to have full access at all reasonable
times to such financial information and other information regarding or affecting
results of operations or financial condition of Bancorp and 1st United as are
material to the future prospects of Bancorp except such information as Bancorp
determines cannot be disclosed under laws, rules or regulations applicable to
Bancorp. Except as required by applicable law or process of court, each Party
will treat and hold as such any Confidential Information it receives from the
other Parties in the course of the reviews contemplated by this Agreement, will
not use any of the Confidential Information except in connection with this
Agreement, and, if this Agreement is terminated for any reason whatsoever,
agrees to return to the delivering Party all tangible embodiments (and all
copies) thereof which are in its possession. No provisions of this Agreement
shall be deemed to prohibit Bancorp or 1st United from disseminating
Confidential Information about Bancorp or 1st United to a third party. The
Parties agree that no representation or warranty of a Party contained herein
shall be obviated or otherwise negated by the availability of information
regarding the Party giving such representations or warranties or by due
diligence review conducted by the Party receiving such representations and
warranties.
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SECTION 5.10. NOTICE OF DEVELOPMENTS.
(i) Each Party will give prompt written notice to the others
of any Substantial Adverse Development affecting such Party and its Subsidiaries
taken as a whole. Each Party will give prompt written notice to the other of any
such Substantial Adverse Development affecting the ability of the Parties to
consummate the transactions contemplated by this Agreement. Any such notices
shall be accompanied by copies of any and all pertinent documents,
correspondence and similar papers relevant to a complete understanding of such
Substantial Adverse Development. In the event such Substantial Adverse
Development consists of litigation threatened or filed against one or more
Parties, the Parties hereby agree to exert their reasonable good faith efforts
to quantify the risk to the Party or Parties against whom the litigation has
been threatened or filed, to ascertain the likelihood of an adverse result in
such litigation and to arrive at a mutually satisfactory resolution of such
risks so as to allow the consummation of the transactions contemplated in this
Agreement and the realization of the Parties and their shareholders of the
expected benefits of such transactions. The running of the time for exercising
termination rights by reason of such litigation or threatened litigation shall
be suspended during the period the Parties are mutually attempting to assess and
resolve such litigation or claim. Bancorp will have 15 business days after
Island gives any written notice pursuant to this ss.5.10 within which to
exercise any right it may have to terminate this Agreement pursuant to
ss.7.1(iii) below by reason of the Substantial Adverse Development, and Island
likewise will have 15 business days after Bancorp or 1st United gives any
written notice pursuant to this ss.5.10 within which to exercise any right
Island may have to terminate this Agreement pursuant to ss.7.1(iii) below by
reason of the Substantial Adverse Development. Unless one of the Parties
terminates this Agreement within the aforementioned period, the written notice
of a Substantial Adverse Development will be deemed to have amended the
Disclosure Statement or the Disclosure Schedules, to have qualified the
representations and warranties contained herein, and to have cured any
misrepresentation or breach of warranty that otherwise might have existed
hereunder by reason of the Substantial Adverse Development.
(ii) Any Party may update its representations and warranties
contained in this Agreement by delivery of a revised Disclosure Statement or
Disclosure Schedules to the other Parties. If the matters disclosed in such
revised Disclosure Statement or Disclosure Schedules do not, individually or in
the aggregate with prior disclosures, comprise Substantial Adverse Developments
or breaches of this Agreement, the representations and warranties of the
disclosing Party shall be deemed revised as shown in the revised Disclosure
Statement or Disclosure Schedules for the purpose of compliance with the
provisions of this Agreement, including, without limitation, Article 6.
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SECTION 5.11. EXCLUSIVITY. Except as otherwise expressly
permitted in this Section, neither Island nor its Subsidiaries will continue or
resume any negotiations or communications in which Island or its Subsidiaries
was engaged prior to the Effective Date or solicit, initiate, participate in or
encourage the submission of any proposal or offer from any person (other than a
Party) relating to any (i) liquidation, dissolution, or recapitalization, (ii)
merger or consolidation, (iii) acquisition or purchase of securities or assets
other than in the Ordinary Course of Business, or (iv) similar transaction or
business combination involving Island or its Subsidiaries, or their respective
assets, provided, however, that Island, its Subsidiaries, and their directors
and officers will remain free to participate in any discussions or negotiations
regarding, furnish any information with respect to, assist or participate in, or
facilitate in any other manner any effort or attempt by any person to do or seek
any of the foregoing in the event a majority of the full board of directors of
Island has determined on written advice of counsel that the board of directors
has a fiduciary duty to consider and respond to such effort or attempt. Island
may respond to inquiries from Persons with whom Island engaged in discussions
regarding mergers, consolidations or similar transactions or business
combinations prior to the Effective Date by advising such Persons that Island
has entered into this Agreement and has agreed not to engage in such discussions
during the term of this Agreement. Island shall notify Bancorp immediately if
any person (other than a Party) makes any proposal, offer, inquiry, or contact
with respect to any of the foregoing and shall provide Bancorp with the
particulars of any such proposal, offer, inquiry or contact. Island acknowledges
that Bancorp and 1st United may engage in discussions and negotiations with
other Persons relating to matters such as those listed in (i) through (iv) above
relating to such other Persons, Bancorp and/or its Subsidiaries, and Island
agrees that Bancorp and 1st United will have no obligation to disclose the
existence or content of such discussions or negotiations to Island.
SECTION 5.12. INDEMNIFICATION.
(i) Island hereby indemnifies and holds harmless Bancorp and
1st United and their Affiliates, successor and assigns from and against any and
all claims, costs, expenses, actions, demands, losses or liabilities, penalties
and damages (including legal and accounting fees and other expenses of any
nature whatsoever incurred in investigating or in attempting to avoid the same
or to defend the imposition thereof), resulting to Bancorp, 1st United, or their
respective Affiliates, successors or assigns, from or arising out of any
misrepresentation, breach or nonfulfillment of any warranty, representation,
agreement or covenant on the part of Island or any of its Subsidiaries and
Affiliates, under this Agreement, or from any misrepresentation in or omission
from any Exhibit, Schedule or other instrument furnished or to be furnished to
Bancorp or 1st United hereunder or thereunder.
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(ii) Bancorp and 1st United hereby indemnify and hold harmless
Island and its Affiliates, successors and assigns, at all times from and against
any and all claims, costs, expenses, actions, demands, losses or liabilities,
penalties and damages (including legal and accounting fees and other expenses of
any nature whatsoever incurred in investigation or in attempting to avoid the
same or to defend the imposition thereof), resulting to Island or its
Affiliates, successors or assigns from or arising out of any misrepresentation,
breach or nonfulfillment of any warranty, representation, agreement or covenant
on the part of Bancorp, 1st United or their Affiliates under this Agreement, or
from any misrepresentation in or omission from any Exhibit, Schedule or other
instrument furnished or to be furnished to Island hereunder.
SECTION 5.13. OFFICER AND DIRECTOR INDEMNITIES. Subject to the
conditions set forth below for a period of six (6) years from and after the
Closing Date, Bancorp agrees that it will indemnify and hold harmless the
officers and directors of Island and Investment and the Trustees of the Island
401k Plan in office on the Effective Time against all claims arising out of
actions or omissions occurring prior to the Effective Time for which such
parties would be entitled to indemnification under and in the same fashion and
on the same terms as are provided in the Florida Acts and the National Bank Act
at the Effective Time and the charter, articles of incorporation and bylaws of
Island and Investment in effect on the Effective Date, provided, however, that
all rights to any indemnity and in respect of any claim asserted or made within
such period shall continue until the final disposition of such claim. Any
indemnified party wishing to claim indemnification under this paragraph shall
promptly notify Bancorp thereof. Bancorp shall have the right to assume the
defense thereof and Bancorp shall not be liable to such indemnified parties for
any legal expenses of other counsel or any other expenses subsequently incurred
by such indemnified parties in connection with the defense thereof, except that
if Bancorp elects not to assume such defense or counsel for the indemnified
parties advises that there are substantive issues which raise conflicts of
interest between Bancorp and the indemnified parties, the indemnified parties
may retain counsel satisfactory to them, and Bancorp shall pay all reasonable
fees and expenses of such counsel for the indemnified parties promptly as
statements therefor are received; provided, however, that Bancorp shall be
obligated pursuant to this paragraph to pay for only one firm of counsel for all
indemnified parties in any jurisdiction, the indemnified parties will cooperate
in the defense of any such litigation, and Bancorp shall not be liable for any
settlement effected without its prior written consent which consent shall not be
unreasonably withheld; and provided further that Bancorp shall not have any
obligation hereunder to any indemnified party when and if a court of competent
jurisdiction shall determine, and such determination shall have become final,
that the indemnification of such indemnified party in the manner contemplated
hereby is prohibited by applicable law. If
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requested by Island before Closing, Bancorp agrees that Bancorp will purchase
directors' and officers' liability insurance covering the officers and directors
of Island and Investment for actions prior to the Effective Time provided that
Island has provided Bancorp with proof of the cost of such insurance and the
cost has been included in the Transaction Expenses. Such coverage shall be
substantially the same as that carried by Island and Investment on the Effective
Date.
SECTION 5.14. ENVIRONMENTAL MATTERS. Island agrees that all
engineers and consultants who prepared or furnished reports on the environmental
condition of the Property may discuss such reports and information with Bancorp
or 1st United and shall be entitled to certify the same in favor of Bancorp or
1st United and their consultants, agents and representatives and make all other
data available to Bancorp or 1st United and their consultants, agents and
representatives. In the event Island proposes to take title to any real estate
which is collateral for loans made by Island, Island will first obtain a Phase I
environmental audit of such property, comply with the suggestions of such audit,
provide a copy of such audit and any subsequent audits or studies to Bancorp
and, if requested by Bancorp, will take title to such property in the name of a
newly formed Subsidiary.
SECTION 5.15. AFFILIATE LETTERS.
a) The Disclosure Statement sets forth a list of
names and addresses of those persons who are "affiliates" of Island within the
meaning of Rule 145 under the Securities Act ("Rule 145"), including, without
limitation, any Island Stockholder who or which holds of record more than ten
percent (10%) of the outstanding Island Shares and all officers and directors of
Island (each an "Island Affiliate"). Island shall provide Bancorp such
information and documents as Bancorp shall reasonably request for purposes of
reviewing the accuracy and completeness of such list. There shall be added to
such list the names and addresses of any other Person who becomes a Island
Affiliate at any time after the date hereof up to and including the time of the
Special Island Meeting or who Bancorp reasonably identifies (by written notice
to Island) as being a Person who may be deemed to be an Island Affiliate. Not
less than forty-five (45) days prior to the Closing Date, Island shall deliver
or cause to be delivered to Bancorp, from each of the Island Affiliates
identified on the Disclosure Statement (as the same may be supplemented as
aforesaid), a letter substantially in the form of Exhibit "E" hereto (the
"Affiliate Letter"), which shall contain (i) a covenant that such Affiliate
shall not sell or otherwise dispose of any shares of Bancorp Purchase Stock
issued to it in the Merger until such time as final results of operations of
Bancorp covering at least thirty (30) days of combined operations of Bancorp and
Island have been published, and (ii) a covenant that such Island Affiliate will
not sell or otherwise dispose of any shares of Bancorp Purchase Stock issued to
it in the Merger, except
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pursuant to an effective registration statement under the Securities Act or in
accordance with the provisions of paragraph (d) of Rule 145 or another exemption
from registration under the Securities Act.
b) Bancorp shall be entitled to place appropriate
legends on the certificates evidencing the Bancorp Purchase Stock to be received
by such Island Affiliates pursuant to the terms of this Agreement, and to issue
appropriate stock transfer instructions to the Transfer Agent, to the effect
that the shares of Bancorp Purchase Stock received or to be received by such
Island Affiliates pursuant to the terms of this Agreement may only be sold,
transferred or otherwise conveyed, and the holder thereof may only reduce his
interest in or risks relating to such shares of Bancorp Purchase Stock, pursuant
to an effective registration statement under the Securities Act or in accordance
with the provisions of paragraph (d) of Rule 145 or another exemption from
registration under the Securities Act and, in any event, only after financial
results covering at least 30 days of combined operations of Bancorp and Island
after the Effective Date shall have been published. For Island Affiliates who
will be Affiliates of Bancorp after Closing, additional legends and stock
transfer instructions shall be imposed as deemed necessary by Bancorp to comply
with applicable laws, rules and regulations. The foregoing restrictions on the
transferability of Bancorp Purchase Stock shall apply to all purported sales,
transfers and other conveyances of the shares of Bancorp Purchase Stock received
or to be received by such Island Affiliates pursuant to this Agreement and to
all purported reductions in the interest in or risks relating to such shares of
the Bancorp Purchase Stock whether or not such Island Affiliate has exchanged
the Certificates previously evidencing such Island Affiliate's Shares for
certificates evidencing the shares of Bancorp Purchase Stock into which such
Island Shares were converted. The Proxy Statement and the Registration Statement
shall disclose the foregoing in a reasonably prominent manner.
SECTION 5.16. POST MERGER FINANCIAL RESULTS. If the Effective
Time shall not have occurred by April 30, 1996, Bancorp agrees to publish its
post-merger financial results (as the term "publish" is used in the
interpretations to Accounting Principles Board Opinion No. 16) within fifteen
(15) days after the end of the first full calendar month after the Effective
Time, with such results to be as of the end of such month and which shall cover
a period of at least thirty (30) days subsequent to the Effective Time.
SECTION 5.17. POOLING OF INTEREST. The Parties acknowledge
that it is their intention that the Merger be qualified for pooling of interest
accounting treatment and therefore agree to take such actions as are necessary
to assure pooling of interest treatment and to refrain from taking any actions
which would result in disqualification for pooling of interest treatment, both
as determined by Bancorp.
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SECTION 5.18. CERTAIN POLICIES OF ISLAND. At the request of
Bancorp, Island and its Subsidiaries shall modify and change its operating,
loan, litigation and real estate valuation policies and practices (including
loan classifications and levels of reserves) prior to the Effective Time so as
to be consistent on a mutually satisfactory basis with those of Bancorp. Island
and its Subsidiaries shall not be required to modify or change any such policies
or practices, however, until (i) such time as Island and Bancorp shall
reasonably agree that the Effective Time will occur prior to the public
disclosure of such modification or changes in regular periodic earnings releases
or periodic reports filed with the OCC or other agencies regulating Island or
its Subsidiaries, or (ii) such time as Bancorp acknowledges in writing that all
conditions to Bancorp's obligations to consummate the Merger (and Bancorp's
rights to terminate this Agreement) have been waived or satisfied; provided,
however, that in all circumstances Island and its Subsidiaries shall make such
modifications and changes not later than immediately prior to the Effective
Time. Island's representations, warranties and covenants contained in this
Agreement shall not be deemed to be untrue or breached in any respect as a
consequence of any modifications or exchanges undertaken solely on account of
this Section.
SECTION 5.19. BOARD MEMBERS. Bancorp agrees that, effective on
the Closing Date or as soon thereafter as is practicable but in any event no
later than the next scheduled Board meeting, Bancorp will cause three (3) of the
present members of the Board of Directors of Island to be added to the Board of
Directors of Bancorp and 1st United. The members to be added to the Boards of
Directors of Bancorp and 1st United shall be designated by Bancorp. Bancorp
shall enter into indemnity agreements with such new Directors in form and
substance substantially the same as have been entered into between Bancorp, 1st
United and the members of their Boards of Directors as of the Effective Date.
This covenant shall survive Closing.
SECTION 5.20. EMPLOYEE BENEFIT PLANS. Bancorp agrees to use
its best efforts to provide to all eligible employees of Island or Investment
who remain employees of 1st United or Investment following the Effective Time
("Continuing Employees") employee welfare and pension benefits substantially
equivalent (in the aggregate) to those uniformly provided to employees of 1st
United from time to time. Bancorp agrees that the Continuing Employees shall
receive credit for past service at Island or Investment prior to the Effective
Time for the purpose of qualifying for benefits under any employee benefit plan
or arrangement of 1st United, including for purposes of eligibility and
participation (but not for purposes of vesting or benefit accrual) in 1st
United's 401(k) Plan. Notwithstanding the foregoing, no Continuing Employee
shall have the right to participate in 1st United's 401(k) Plan until such
Continuing Employee shall have been in the continuous employment of 1st United
for at least ninety (90) days after the Effective Time. Bancorp agrees that 1st
United will establish a special entry date into the 401(k)
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Plan for eligible Continuing Employees as soon as practicable after ninety (90)
days after the Effective Time. Bancorp shall use its best efforts to ensure that
any Continuing Employees and their eligible dependents who have coverage under
the Bank's existing medical plan will not be subject to any waiting period or
preexisting condition requirement under 1st United's medical insurance plan,
except to the extent that such Continuing Employees and eligible dependents are
currently subject to any such preexisting condition.
6. CONDITIONS TO OBLIGATION TO CLOSE.
SECTION 6.1. CONDITIONS TO OBLIGATIONS OF ALL PARTIES. The
obligations of all Parties to consummate the transactions to be performed in
connection with the Closing are subject to satisfaction of the following
conditions:
(i) this Agreement and the Merger shall have received the
Requisite Island Stockholder Approval;
(ii) Island , 1st United and Bancorp shall have procured all
of the consents specified in ss.5.1 hereof.
(iii) no action, suit, or proceeding (other than those arising
out of the applications submitted to the FRB and the Comptroller as contemplated
herein) shall be pending or threatened before any court or quasi-judicial or
administrative agency of any federal, state, local, or foreign jurisdiction
wherein an unfavorable judgment, order, decree, stipulation, injunction, or
charge could (A) prevent consummation of any of the transactions contemplated by
this Agreement, (B) cause any of the transactions contemplated by this Agreement
to be rescinded following consummation, or (C) materially and adversely affect
the right of Bancorp and 1st United to own, operate, or control substantially
all of the assets and operations of Island and its Subsidiaries (and no such
judgment, order, decree, stipulation, injunction, or charge shall be in effect);
(iv) the Registration Statement shall have become effective
under the Securities Act or Bancorp shall have obtained the No Action Letter and
the No Action Letter shall not have been revoked; the Bancorp Purchase Stock
shall have been registered or exempt from registration under applicable state
securities laws; and, subject to the requirements of Rule 145 of the Securities
Act and the Affiliate Letters, the Bancorp Purchase Stock shall be freely
transferable in the hands of Island Stockholders who receive same; and;
(v) the Merger shall have been approved by the FRB and the
Comptroller and any other regulatory approvals necessary to the consummation of
the Merger shall have been obtained and such approvals shall not impose any
term, condition or restriction upon any of
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Bancorp, 1st United or Investment that Bancorp, in good faith, reasonably
determines would so materially adversely affect the economic or business
benefits of the transactions contemplated by this Agreement to Bancorp as to
render inadvisable in the reasonable good faith judgment of Bancorp the
consummation of the Merger.
SECTION 6.2. CONDITIONS TO OBLIGATION OF BANCORP. The
obligations of Bancorp and 1st United to consummate the transactions to be
performed by Bancorp and 1st United in connection with the Closing are subject
to satisfaction of the following conditions:
(i) Island and its Subsidiaries shall have procured all of the
third party consents and agreements to be obtained by Island or its Subsidiaries
specified in Article 5 above or otherwise complied with the requirements of
Article 5 above which are material to the consummation of the Merger;
(ii) no material breach or breaches of the representations and
warranties of Island under this Agreement has occurred and is continuing at and
as of the Closing Date;
(iii) all covenants of Island under this Agreement which are
to be performed prior to or at Closing shall have been duly performed and
complied with in all material respects.
(iv) Island and its Subsidiaries shall have delivered to
Bancorp and 1st United certificates (without qualification as to knowledge or
materiality or otherwise) to the effect that each of the conditions specified
above in ss. 6.2(i)-(iii) is satisfied in all respects;
(v) the Parties shall have received all other authorizations,
consents, and approvals of governments and governmental agencies set forth in
the Disclosure Statement;
(vi) Bancorp and 1st United shall have received from counsel
to Island an opinion with respect to the matters set forth on Exhibit "F"
attached hereto, addressed to Bancorp and dated as of the Closing Date;
(vii) Bancorp and 1st United shall have received the
resignations, effective as of the Closing, of each trustee or officer of any
Employee Benefit Plan designated by Bancorp or 1st United in writing at least
five (5) business days prior to the Closing;
(viii) all actions to be taken by Island and its Subsidiaries
in connection with consummation of the transactions contemplated hereby and all
certificates, opinions, instruments, and other documents required to effect the
transactions contemplated hereby will be reasonably satisfactory in form and
substance to Bancorp and 1st United;
(ix) no Substantial Adverse Development shall have occurred
with respect to Island or its Subsidiaries which has not been waived by Bancorp
and 1st United or deemed waived pursuant to Section 5.10; and
(x) no event shall have occurred or failed to occur which, in
the reasonable judgment of Bancorp, could result in the Merger being
disqualified from pooling of
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interest accounting treatment and Bancorp shall have received an opinion letter
from Ernst & Young in form and substance acceptable to Bancorp confirming that
the Merger is qualified for financial accounting treatment as a pooling of
interest.
Bancorp may waive any condition specified in this ss.6.2 if it
executes a writing so stating at or prior to the Closing.
SECTION 6.3. CONDITIONS TO OBLIGATIONS OF ISLAND. The
obligation of Island to consummate the transactions to be performed by it in
connection with the Closing is subject to satisfaction of the following
conditions:
(i) no material breach or breaches of the representations and
warranties of Bancorp or 1st United under this Agreement or agreements to be
obtained by Bancorp or 1st United as has occurred and is continuing at and as of
the Closing Date;
(ii) Bancorp and 1st United shall have procured all of the
third party consents specified in Article 5 above;
(iii) all covenants of Bancorp and 1st United under this
Agreement which are to be performed prior to or at Closing shall have been duly
performed and complied with in all material respects.
(iv) Bancorp and 1st United shall have delivered to Island a
certificate (without qualification as to knowledge or materiality or otherwise)
to the effect that each of the conditions specified in ss.6.3(i)-(iii) is
satisfied in all respects;
(v) Island shall have received from counsel to Bancorp and 1st
United an opinion with respect to the matters set forth in Exhibit "G" attached
hereto, addressed to Island and dated as of the Closing Date; and
(vi) all actions to be taken by Bancorp and 1st United in
connection with consummation of the transactions contemplated hereby and all
certificates, opinions, instruments, and other documents required to effect the
transactions contemplated hereby will be reasonably satisfactory in form and
substance to Island.
(vii) no Substantial Adverse Development shall have occurred
with respect to Bancorp or its Subsidiaries which has not been waived by Island
or deemed waived pursuant to Section 5.10.
(viii) Island shall have received from its legal counsel an
opinion, dated the Effective Time, to the effect that, on the basis of facts,
representations and assumptions set forth in such opinion, the merger will for
federal income tax purposes constitute a reorganization within the meaning of
Section 368, or any successor thereto, of the Code and that (except with respect
to holders of Island Stock who exercise dissenters' rights, except for cash
payments in lieu of a fractional share interest and except with respect to the
holders of Island Options), (i) no
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gain or loss will be recognized by a holder of Island Stock upon conversion in
the Merger of Island Stock into Bancorp Purchase Stock, (ii) the basis of
Bancorp Purchase Stock to be received in the Merger by a holder of Island Stock
will be the same as such holder's basis in the Island Stock exchanged therefor,
and (iii) the holding period of Bancorp Purchase Stock to be received in the
Merger by a holder of Island Stock will include the period during which such
holder held the Island Stock exchanged therefor, provided that such Island Stock
was held as a capital asset immediately prior to the consummation of the Merger;
in rendering such opinion, such tax advisor may rely upon certificates of
officers of Island and Bancorp as to factual matters.
Island may waive any condition specified in this ss.6.3 if it
executes a writing so stating at or prior to the Closing.
7. TERMINATION.
SECTION 7.1. TERMINATION OF AGREEMENT. Any of the Parties may
terminate this Agreement with the prior authorization of its board of directors
(whether before or after stockholder approval) as provided below:
(i) the Parties may terminate this Agreement by mutual written
consent at any time prior to the Closing Date;
(ii) Bancorp or 1st United may terminate this Agreement by
giving written notice to Island at any time prior to the Closing Date in the
event Island is in breach of any representation, warranty, or covenant contained
in this Agreement in any material respect and Island may terminate this
Agreement by giving written notice to Bancorp and 1st United at any time prior
to the Closing Date in the event Bancorp or 1st United is in breach of any
representation, warranty, or covenant contained in this Agreement in any
material respect. Each Party shall have the right to cure any such breach within
fifteen (15) days of receipt of written notice of such breach or within any such
longer period mutually agreed to in writing by the Parties hereto ("Cure
Period") and the termination rights provided above may not be exercised until
after written notice of breach is given and the applicable Cure Period has
expired;
(iii) if a Substantial Adverse Development shall have occurred
with regard to Bancorp or 1st United, Island may terminate this agreement by
giving written notice to Bancorp and 1st United and if a Substantial Adverse
Development shall have occurred with regard to Island or any of its
Subsidiaries, Bancorp or 1st United may terminate this agreement by giving
written notice to Island;
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(iv) Bancorp, 1st United or Island may terminate this
Agreement by giving written notice to the other Parties at any time prior to the
Closing Date in the event the Island Fairness Opinion is withdrawn;
(v) Bancorp, 1st United or Island may terminate this Agreement
by giving written notice to the other Parties at any time prior to the Closing
Date in the event the Bancorp Fairness Opinion is withdrawn;
(vi) either Party may terminate this Agreement by giving
written notice to the other Party within five (5) days after the Special Island
Meeting, in the event this Agreement or the Merger fail to receive the Requisite
Island Stockholder Approval;
(vii) Bancorp or 1st United may terminate this Agreement by
giving written notice to Island at any time prior to the Closing Date if the
Closing shall not have occurred on or before June 30, 1997 by reason of the
failure of any condition precedent under ss.6.1 or 6.2 hereof (unless the
failure results primarily from Bancorp or 1st United itself breaching any
representation, warranty, or covenant contained in this Agreement), provided,
however, that Bancorp and 1st United shall not have the right to terminate this
Agreement pursuant to this paragraph during the pendency of any Cure Period; or
(viii) Island may terminate this Agreement by giving written
notice to Bancorp and 1st United at any time prior to the Closing Date if the
Closing shall not have occurred on or before June 30, 1997 by reason of the
failure of any condition precedent under ss.6.1 or 6.3 hereof (unless the
failure results primarily from Island itself breaching any representation,
warranty, or covenant contained in this Agreement), provided, however, that
Island shall not have the right to terminate this Agreement pursuant to this
paragraph during the pendency of any Cure Period.
(ix) Island may terminate this Agreement as provided in
ss.2.6(iv).
SECTION 7.2. EFFECT OF TERMINATION. If any Party terminates
this Agreement pursuant to ss.7.1 above, all obligations of the Parties
hereunder shall terminate without any liability of any Party to any other Party
(except for any liability of any Party then in breach); provided, however, that
the provisions of xx.xx. 3.11, 4.7, 5.9 (as to the confidentiality provisions
only), 5.12, and Article 8 shall survive any such termination.
8. MISCELLANEOUS.
SECTION 8.1. SURVIVAL. None of the representations,
warranties, covenants and agreements of the Parties contained in this Agreement
or in any instrument delivered pursuant to this Agreement shall survive Closing,
except the provisions of Articles 1 and 2 and ss.ss.3.11, 4.7, 5,3(ii), 5.13,
5.15, 5.16, 5.17, 5.18, 5.19, 5.20 and Article 8.
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SECTION 8.2. PRESS RELEASES AND ANNOUNCEMENTS. No Party shall
issue any press release or announcement relating to the subject matter of this
Agreement without the prior approval of the other Parties; provided, however,
that any Party may make any public disclosure it believes in good faith is
required by law or regulation (in which case the disclosing Party will advise
the other Parties prior to making the disclosure).
SECTION 8.3. THIRD PARTY BENEFICIARIES. This Agreement shall
not confer any rights or remedies upon any person other than the Parties and
their respective successors and permitted assign, except with respect to those
third parties as specifically contemplated in Sections 5.3(ii), 5.13, 5.17,
5.19, 5.20 and, with respect to all Island stockholders, Section 5.16.
SECTION 8.4. ENTIRE AGREEMENT. This Agreement (including the
documents referred to herein) constitutes the entire Agreement among the Parties
and supersedes any prior understandings, Agreements, or representations by or
among the Parties, written or oral, that may have related in any way to the
subject matter hereof, except the confidentiality agreement between Island,
Bancorp and 1st United dated December 19, 1996, the terms of which shall survive
through closing.
SECTION 8.5. SUCCESSION AND ASSIGNMENT. This Agreement shall
be binding upon and inure to the benefit of the Parties named herein and their
respective successors and permitted assigns. No Party may assign either this
Agreement or any of its rights, interests, or obligations hereunder without the
prior written approval of the other Parties.
SECTION 8.6. COUNTERPARTS. This Agreement may be executed in
one or more counterparts, each of which shall be deemed an original but all of
which together will constitute one and the same instrument.
SECTION 8.7. HEADINGS. The section headings contained in this
Agreement are inserted for convenience only and shall not affect in any way the
meaning or interpretation of this Agreement.
SECTION 8.8. NOTICES. All notices, requests, demands, claims,
and other communications hereunder will be in writing. Any notice, request,
demand, claim, or other communication hereunder shall be deemed duly given if it
is sent by registered or certified mail, return receipt requested, postage
prepaid, and addressed to the intended recipient as set forth below:
If to Island:
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Mr. E. Xxxxxxx Xxxxxx
Island National Bank and Trust Company
000 Xxxxx Xxxx Xxx
Xxxx Xxxxx, Xxxxxxx 00000
With Copy To:
Xxxxxxx X. Xxxxxxxx, Esq.
Gunster, Yoakley, Xxxxxx-Xxxxx & Xxxxxxx, P.A.
Xxxxxxxx Point - East Tower
000 X. Xxxxxxx Xxxxx, Xxxxx 000
Xxxx Xxxx Xxxxx, Xxxxxxx 00000
and
Xxxxxx X. Xxxxxxxxx, Xx.
Rybovich, Spencer
0000 Xxxxxxxxx Xxxxxx
Xxxx Xxxx Xxxxx, XX 00000
If to Bancorp:
000 Xxxxx Xxxxxxx Xxxxxxx
Xxxx Xxxxx, Xxxxxxx 00000
Attn: Xxxxxx X. Xxxxxxx
If to 1st United:
000 Xxxxx Xxxxxxx Xxxxxxx
Xxxx Xxxxx, Xxxxxxx 00000
Attn: Xxxxxx X. Xxxxxxx
With Copy to:
Akerman, Senterfitt & Xxxxxx, P.A.
000 X. Xxxxxxx Xxxxx, Xxxxx 000 Xxxx
Xxxx Xxxx Xxxxx, Xxxxxxx 00000
Attn: Xxxxxxx X. Xxxxxxx, Esq.
Each such notice shall be deemed delivered on the date upon which the return
receipt is signed or delivery is refused or the notice is designated by the
postal authorities as not deliverable, as the case may be, if mailed. Any Party
may give any notice, request, demand, claim, or other communication hereunder
using any other means (including personal delivery, expedited courier,
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messenger service, TELECOPY, telex, ordinary mail, or electronic mail), but no
such notice, request, demand, claim, or other communication shall be deemed to
have been duly given unless and until it actually is received by the individual
for whom it is intended or written proof of delivery or refusal of delivery is
provided by an independent third party delivering same. Any Party may change the
address to which notices, requests, demands, claims, and other communications
hereunder are to be delivered by giving other Parties notice in the manner
herein set forth.
SECTION 8.9. GOVERNING LAW. This Agreement shall be governed
by and construed in accordance with the internal laws (and not the law of
conflicts) of the State of Florida and the Federal laws of the United States of
America.
SECTION 8.10. AMENDMENTS AND WAIVERS. The Parties may mutually
amend any provision of this Agreement at any time prior to the Closing Date with
the prior authorization of their respective boards of directors; provided,
however, that any amendment effected subsequent to stockholder approval will be
subject to the restrictions contained in the Florida Acts and the National Bank
Act. No amendment of any provision of this Agreement shall be valid unless the
same shall be in writing and signed by all of the Parties. No waiver by any
Party of any default, misrepresentation, or breach of warranty or covenant
hereunder, whether intentional or not, shall be deemed to extend to any prior or
subsequent default, misrepresentation, or breach of warranty or covenant
hereunder or affect in any way any rights arising by virtue of any prior or
subsequent such occurrence.
SECTION 8.11. SEVERABILITY. Any term or provision of this
Agreement that is invalid or unenforceable in any situation in any jurisdiction
shall not affect the validity or enforceability of the remaining terms and
provisions hereof or the validity or enforceability of the offending term or
provision in any other situation or in any other jurisdiction. If the final
judgment of a court of competent jurisdiction declares that any term or
provision hereof is invalid or unenforceable, the Parties agree that the court
making the determination of invalidity or unenforceability shall have the power
to reduce the scope, duration, or area of the term or provision, to delete
specific words or phrases, or to replace any invalid or unenforceable term or
provision with a term or provision that is valid and enforceable and that comes
closest to expressing the intention of the invalid or unenforceable term or
provision, and this Agreement shall be enforceable as so modified after the
expiration of the time within which the judgment may be appealed.
SECTION 8.12. EXPENSES. Except as otherwise provided in this
ss.8.12, all costs and expenses including, without limitation, filing,
registration and application fees and fees and expenses of its own financial and
other consultants, investment bankers, accountants and counsel
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incurred in connection with this Agreement and the transactions contemplated
hereby shall be paid by the Party incurring such costs and expenses.
Notwithstanding the foregoing, in the event of breach of this Agreement by a
Party, the nonprevailing Party shall pay all such costs and expenses of all
Parties, including, without limitation, those incurred in litigation brought to
enforce this Agreement or brought by reason of a breach of this Agreement. When
used herein the term legal fees and expenses shall mean legal fees and expenses
at all levels through final appeal. Nothing contained in this ss.8.12 shall
constitute an agreement for liquidated damages or otherwise limit the rights or
remedies of the nonbreaching Parties. The Parties agree that irreparable damage
would be suffered by reason of a breach of this Agreement and that the Parties
shall be entitled to injunctive relief to prevent or cure such breach and
specifically enforce the terms of this Agreement all without the necessity of
posting a bond and in addition to any other remedies provided at law or in
equity.
8.13. CONSTRUCTION. The language used in this Agreement will
be deemed to be the language chosen by the Parties hereto to express their
mutual intent, and no rule of strict construction shall be applied against any
Party. Any reference to any federal, state, local or foreign statute or law
shall be deemed also to refer to all rules and regulations promulgated
thereunder, unless the context otherwise requires.
9. INCORPORATION OF EXHIBITS AND SCHEDULES. The Exhibits and
Schedules identified in this Agreement are incorporated herein by reference and
made a part hereof.
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as
of the date first below written.
1ST UNITED BANCORP
By: /S/ ILLEGIBLE
---------------------------------------
Title: President
Date: 1-6-97
1ST UNITED BANK
By: /S/ ILLEGIBLE
---------------------------------------
Title: President
Date: 1-6-97
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ISLAND NATIONAL BANK AND TRUST COMPANY
By: /S/ ILLEGIBLE
---------------------------------------
Title: Chairman
Date: 1-6-97
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