EXHIBIT 2.2
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AGREEMENT AND PLAN OF MERGER
BETWEEN
HOME BANCSHARES, INC.
AND
TCBANCORP, INC.
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DATED AS OF DECEMBER 3, 2004
TABLE OF CONTENTS
RECITALS................................................................... 1
DEFINITIONS................................................................ 2
ARTICLE I. MERGER.......................................................... 8
1.1. THE MERGER...................................................... 8
1.2. DISSENTING SHARES............................................... 8
1.3. EFFECTIVE DATE.................................................. 9
ARTICLE II. CONSIDERATION.................................................. 9
2.1. MERGER CONSIDERATION............................................ 9
2.2. TRANSMITTAL AND ALLOCATION PROCEDURES........................... 10
2.3. SHAREHOLDER RIGHTS; STOCK TRANSFERS............................. 12
2.4. RESERVATION OF RIGHT TO REVISE TRANSACTION...................... 12
2.5. OPTIONS......................................................... 12
ARTICLE III. CONDUCT OF BUSINESS PENDING CONSUMMATION...................... 13
ARTICLE IV. REPRESENTATIONS AND WARRANTIES................................. 13
4.1. TCB REPRESENTATIONS AND WARRANTIES.............................. 13
4.2. HBI REPRESENTATIONS AND WARRANTIES.............................. 24
ARTICLE V. COVENANTS....................................................... 34
5.1. BEST EFFORTS.................................................... 34
5.2. CORPORATE ACTIONS............................................... 34
5.3. SECURITIES LAW COMPLIANCE....................................... 34
5.4. PUBLICITY....................................................... 35
5.5. ACCESS; INFORMATION; CONFIDENTIALITY............................ 35
5.6. SOLE AGREEMENT TO SELL.......................................... 36
5.7. HBI COMMON STOCK ADJUSTMENTS.................................... 36
5.8. NO RIGHTS TRIGGERED............................................. 36
5.9. REGULATORY APPLICATIONS......................................... 36
5.10. REGULATORY DIVESTITURES......................................... 36
5.11. DIRECTOR AND OFFICER LIABILITY INSURANCE........................ 37
ARTICLE VI. CONDITIONS TO CONSUMMATION OF THE MERGER....................... 37
6.1. CONDITIONS TO EACH PARTY'S OBLIGATIONS.......................... 37
6.2. CONDITIONS TO OBLIGATIONS OF HBI................................ 38
6.3. CONDITIONS TO OBLIGATIONS OF TCB................................ 40
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ARTICLE VII. TERMINATION................................................... 41
7.1. TERMINATION UPON CERTAIN CONDITIONS............................. 41
7.2. TERMINATION FOR BREACH.......................................... 41
ARTICLE VIII. OTHER MATTERS................................................ 42
8.1. SURVIVAL........................................................ 42
8.2. WAIVER; AMENDMENT............................................... 42
8.3. COUNTERPARTS.................................................... 42
8.4. GOVERNING LAW................................................... 42
8.5. EXPENSES........................................................ 42
8.6. CONFIDENTIALITY................................................. 42
8.7. NOTICES......................................................... 42
8.8. TIME IS OF THE ESSENCE.......................................... 43
8.9. ASSIGNMENT...................................................... 43
8.10. BINDING EFFECT.................................................. 43
8.11. SEVERABILITY.................................................... 43
8.12. ENTIRE UNDERSTANDING; NO THIRD PARTY BENEFICIARIES.............. 43
8.13. ENFORCEMENT PROCEEDINGS......................................... 43
8.14. BENEFIT PLANS................................................... 44
8.15. HEADINGS........................................................ 44
EXHIBITS
SCHEDULES OF TCB
SCHEDULES OF HBI
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AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER, dated as of the 3rd day of December, 2004
(this "Agreement" or "Plan"), is by and between HOME BANCSHARES, INC. ("HBI"),
an Arkansas corporation, and TCBANCORP, INC. ("TCB"), an Arkansas corporation.
RECITALS
(A) TCB. TCB is a corporation duly organized and existing in good standing
under the laws of the State of Arkansas, with its principal executive offices
located in North Little Rock, Arkansas. TCB is a financial holding company
subject to regulation by the Federal Reserve Board. As of the date of this Plan,
TCB has 3,000,000 authorized shares of common stock, $0.01 par value ("TCB
Common Stock"), of which 2,283,075 shares of TCB Common Stock are issued and
outstanding (no other class of capital stock being authorized) and 3,340 shares
are set aside to be gifted to certain employees of TCB on December 31, 2004. As
of September 30, 2004, TCB had Capital of $61,441,430, divided into common stock
of $22,831, capital surplus of $61,122,534, comprehensive income/surplus of
$(1,782,107), and retained earnings of $2,078,172. As of the date of this Plan,
options covering 61,350 shares of TCB Common Stock are issued and outstanding as
provided in Section 2.5 herein.
(B) TWIN CITY BANK. Twin City Bank ("Twin City") is an Arkansas state bank
duly organized and existing in good standing under the laws of the State of
Arkansas. As of the date of this Plan, Twin City has 17,000 authorized shares of
common stock, $10.00 par value per share ("Twin City Common Stock") (no other
class of capital stock being authorized), of which 17,000 shares of Twin City
Common Stock are issued and outstanding. All of the issued and outstanding
shares of Twin City Common Stock are owned by TCB, the sole shareholder of Twin
City.
(C) HBI. HBI is a corporation duly organized and existing in good standing
under the laws of the State of Arkansas, with its principal executive offices
located in Conway, Arkansas. HBI is a financial holding company subject to
regulation by the Federal Reserve Board. As of its unaudited financial
statements for the period ended September 30, 2004, HBI had Capital of
$107,178,288, divided into common stock of $266,250, preferred stock of $21,341,
preferred treasury stock of $(20,130), accumulated other comprehensive
income/surplus of $(481,807), capital surplus of $90,483,188, and retained
earnings of $16,909,446. As of September 30, 2004, HBI has 5,000,000 authorized
shares of common stock, $0.10 par value per share ("HBI Common Stock"), of which
2,662,495 shares are issued and outstanding. HBI has 5,500,000 authorized shares
of preferred stock, $0.01 par value, of which 2,500,000 shares of Class A
Preferred Stock are authorized and 2,134,068 are issued and outstanding, and
3,000,000 shares of Class B Preferred Stock are authorized, and none are issued
and outstanding.
(D) APPROVALS. At meetings of the respective Boards of Directors of TCB and
HBI, each such Board has approved and authorized the execution of this Plan in
counterparts.
In consideration of their mutual promises and obligations, the Parties
further agree as follows:
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DEFINITIONS
(A) DEFINITIONS. Capitalized terms used in this Plan have the following
meanings:
"A.C.A." means the Arkansas Code Annotated, as amended.
"Affiliate" means, with respect to any Person, any other Person that,
directly or indirectly, through one or more intermediaries, Controls, is
Controlled by, or is under common Control with such Person.
"Allocation" means the allocation of Merger Consideration to holders of
Eligible TCB Common Stock as Stock Consideration and/or Cash Consideration,
pursuant to Section 2.2(B).
"Appraisal Laws" means A.C.A. Section 4-27-1301, et seq.
"Arkansas Resident" means:
(1) A corporation, partnership, trust or other form of business
organization which has a principal office within the State of Arkansas on the
Effective Date of the Plan.
(2) An individual whose principal residence is in the State of
Arkansas on the Effective Date of the Plan.
(3) A corporation, partnership, trust or other form of business
organization which is organized for the specific purpose of acquiring part of an
issue offered pursuant to this Plan, of which all of the beneficial owners of
such organization are residents of the State of Arkansas on the Effective Date
of the Plan.
"Business Day" means any day other than a Saturday, Sunday, or a day on
which FSB is not open for business.
"Capital" means capital stock, surplus and retained earnings determined in
accordance with GAAP. Unrealized gains or losses in investment securities will
be included when determining Capital.
"Cash Consideration" has the meaning assigned to such term in Section
2.1(B)(2).
"CFG Merger" - see definition of Community Bank.
"Code" means the Internal Revenue Code of 1986 (as amended).
"Community Bank" means Community Bank of Cabot, Arkansas, acquired by CB
Bancorp, Inc. in the merger of Community Financial Group, Inc. with CB Bancorp,
Inc., effective as of January 6, 2004 (the "CFG Merger"). Community Bank is a
wholly-owned
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subsidiary of CB Bancorp, Inc., an Arkansas corporation and registered bank
holding company that is owned 80% by HBI and 20% by TCB.
"Compensation and Benefit Plans" means all bonus, deferred compensation,
pension, retirement, profit-sharing, thrift savings, employee stock ownership,
stock bonus, stock purchase, restricted stock and stock option plans, all
employment or severance contracts, all medical, dental, health and life
insurance plans, all other employee benefit plans, contracts or arrangements and
any applicable "change of control" or similar provisions in any plan, contract
or arrangement maintained or contributed to by a Party or any of its
Subsidiaries for the benefit of employees, former employees, directors, former
directors or their beneficiaries.
"Conditions" has the meaning assigned to such term in Section 2.1(C).
"Contract" has the meaning assigned to such term in Section 4.1(O).
"Control" with respect to any Person means the possession, directly or
indirectly, of the power to direct or cause the direction of the management and
policies of such Person, whether through the ownership of voting interests, by
contract, or otherwise.
"Derivatives Contract" means an exchange-traded or over-the-counter swap,
forward, future, option, cap, floor or collar financial contract or any other
contract that (1) is not included on the balance sheet of the Financial Reports
of TCB, and (2) is a derivative contract (including various combinations
thereof).
"Disclosing Party" has the meaning assigned to such term in Section 5.5(A).
"Dissenting Share" means the shares of TCB Common Stock held by those
shareholders ("Dissenting Shareholders") of TCB who have timely and properly
exercised their dissenters' rights in accordance with the Appraisal Laws.
"Effective Date" has the meaning assigned to such term in Section 1.3.
"Eligible TCB Common Stock" means shares of TCB Common Stock other than
Exception Shares and Dissenting Shares.
"Elect" (or "Election") has the meaning assigned to such term in Section
2.2(A)(1).
"Environmental Law" means (1) any federal, state, and/or local law,
statute, ordinance, rule, regulation, code, license, permit, authorization,
approval, consent, legal doctrine, order, judgment, decree, injunction,
requirement or agreement with any governmental entity, relating to (a) the
protection, preservation or restoration of the environment (including air, water
vapor, surface water, groundwater, drinking water supply, surface land,
subsurface land, plant and animal life or any other natural resource) or to
human health or safety, or (b) the exposure to, or the use, storage, recycling,
treatment, generation, transportation, processing, handling, labeling,
production, release or disposal of Hazardous Material, in each case as amended
and as now in effect, including the Federal Comprehensive Environmental
Response, Compensation, and
3
Liability Act of 1980, the Superfund Amendments and Reauthorization Act, the
Federal Water Pollution Control Act of 1972, the Federal Clean Air Act, the
Federal Clean Water Act, the Federal Resource Conservation and Recovery Act of
1976 (including the Hazardous and Solid Waste Amendments thereto), the Federal
Solid Waste Disposal and the Federal Toxic Substances Control Act, and the
Federal Insecticide, Fungicide and Rodenticide Act, the Federal Occupational
Safety and Health Act of 1970, and (2) any common law or equitable doctrine
(including injunctive relief and tort doctrines such as negligence, nuisance,
trespass and strict liability) that may impose Liability or obligations for
injuries or damages due to, or threatened as a result of, the presence of or
exposure to any Hazardous Material.
"ERISA" means the Employee Retirement Income Security Act of 1974 (as
amended).
"ERISA Affiliate" means any entity which is considered one employer with
the applicable Party under Section 4001(a)(15) of ERISA or Section 414 of the
Code.
"ERISA Plans" means all employee benefit plans within the meaning of
Section 3(3) of ERISA.
"Exception Shares" has the meaning ascribed to such term in Section 2.1(A).
"Exchange Agent" means FirsTrust Financial Services, Inc., an Arkansas
corporation whose principal address is 0000 Xxxxxxxx Xxxx, Xxxxxx Xxxx,
Xxxxxxxx, 00000.
"Expiration Date" has the meaning assigned to such term in Section
2.2(A)(2).
"FDIC" means the Federal Deposit Insurance Corporation.
"Financial Reports" (1) as to TCB and HBI, means their respective audited
consolidated balance sheets as of December 31, 2001, December 31, 2002, and
December 31, 2003 and the related statements of income, changes in shareholders'
equity and cash flows for the fiscal years ended December 31, 2001, December 31,
2002, and December 31, 2003, and their respective unaudited consolidated balance
sheet as of the nine (9)-month period ended September 30, 2004 and the related
statements of income, changes in shareholders' equity and cash flows for the
(9)-month period ended September 30, 2004; (2) as to Twin City, FSB and
Community Bank means their respective call reports for the fiscal years ended
December 31, 2002 and December 31, 2003; and (3) all other financial reports
filed or to be filed subsequent to December 31, 2003, in the form filed with the
Federal Reserve Board, FDIC and the Arkansas State Bank Department.
"Federal Reserve Board" means the Board of Governors of the Federal Reserve
System.
"FSB" means First State Bank, the wholly-owned subsidiary bank of HBI.
First State Bank is an Arkansas corporation with its principal office in Conway,
Arkansas.
"Fraction" and "Fractional Share Consideration" have the meanings assigned
to such terms in Section 2.1(B)(3).
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"GAAP" means generally accepted accounting principles consistently applied.
"Governing Documents" means the articles of incorporation, charter, and
bylaws of the subject entity, including all amendments thereto.
"Hazardous Material" means any substance presently listed, defined,
designated or classified as hazardous, toxic, radioactive or dangerous, or
otherwise regulated, under any Environmental Law, whether by type or quantity,
including any oil or other petroleum product, toxic waste, pollutant,
contaminant, hazardous substance, toxic substance, hazardous waste, special
waste or petroleum or any derivative or by-product thereof, radon, radioactive
material, asbestos, asbestos containing material, urea formaldehyde foam
insulation, lead and polychlorinated biphenyl.
"HBI" means Home BancShares, Inc., an Arkansas corporation and registered
financial holding company.
"HBI Common Stock" has the meaning assigned to such term in paragraph (C)
of the Recitals.
"HBI Option" has the meaning assigned to such term in Section 2.5(A).
"HBI Transaction" means: (1) a merger, consolidation or similar transaction
involving HBI, where HBI is not the corporation surviving such transaction or
where a change of Control of HBI is otherwise effected, (2) the disposition, by
sale, lease, exchange or otherwise, of assets or deposits of HBI or any of its
significant subsidiaries representing in either case 25% or more of the
consolidated assets or deposits of HBI and its Subsidiaries, or (3) the
issuance, sale or other disposition (including by way of merger, consolidation,
share exchange or any similar transaction) of securities representing 25% or
more of the voting power of HBI or any of its significant subsidiaries other
than the issuance of HBI Common Stock upon the exercise of then outstanding
options or the conversion of then outstanding convertible securities of HBI.
"Insured Depository Institution" has the meaning given it in the Federal
Deposit Insurance Act, as amended, and applicable regulations under such
statute.
"Intellectual Property Rights" has the meaning given such term in Section
4.1(L).
"Knowledge" (and "Know" or "Known") means the best knowledge of the
Chairman, President, Chief Financial Officer, and Chief Lending Officer of the
entity, after reasonable due diligence, inquiry, or investigation.
"Liability" means any debts, liabilities, obligations and contracts of the
Party, whether the same shall be matured or un-matured; whether accrued,
absolute, contingent or otherwise.
"Loan/Fiduciary Property" means any property owned or Controlled by the
applicable Party or any of its Subsidiaries or in which such Party or any of its
Subsidiaries holds a security or other interest, and, where required by the
context, includes any such property where the Party
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or any of its Subsidiaries constitutes the owner or operator of such property,
but only with respect to such property.
"Mailing Date" has the meaning assigned to such term in Section 2.2.
"Material" means, with respect to any Party, an event, occurrence or
circumstance (including (i) the making of any provisions for possible loan and
lease losses, write-downs of other real estate owned and taxes, and (ii) any
breach of a representation or warranty contained in this Plan by such Party)
that (a) has or is reasonably likely to have a material adverse effect on or
constitute a material adverse change in the financial condition, results of
operations, business, future operations, or prospects of such Party or, as
applicable, its Subsidiaries, or (b) would impair such Party's ability to
perform its obligations under this Plan or the consummation of any of the
transactions contemplated by this Plan. With respect to TCB, any such event,
occurrence or circumstance that has been previously approved by HBI shall not be
deemed material.
"Merger" means the merger of TCB with and into HBI, as described in Section
1.1.
"Merger Consideration" means the HBI Common Stock and/or the Cash
Consideration a holder of Eligible TCB Common Stock will receive pursuant to
Article II.
"Multiemployer Plans" has the meaning assigned to such term in Section
3(37) of ERISA.
"Participation Facility" means any facility in which the applicable Party
or any of its Subsidiaries participates in the management and, where required by
the context, includes the owner or operator of such facility.
"Party" means a party to this Plan.
"Pension Plan" means an employee pension plan within the meaning of Section
3(2) of ERISA, and which is intended to be qualified under Section 401(a) of the
Code.
"Person" means any individual, corporation (including any non-profit
corporation), general or limited partnership, limited liability company, joint
venture, estate, trust, association, organization, labor union, governmental
body, or other entity.
"Plan" means this Agreement and Plan of Merger, together with all Exhibits
and Schedules annexed hereto, which are hereby incorporated by reference.
"Pre-Closing Review" and "Pre-Closing Review Period" have the meanings
assigned to such terms in Section 6.2(H)(iii).
"Proxy Statement" has the meaning assigned to such term in Section 5.2(A).
"Qualified Arkansas Resident" has the meaning assigned to such term in
Section 2.1(C)(2).
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"Receiving Party" has the meaning assigned to such term in Section 5.5(A).
"Regulatory Authorities" means federal or state governmental agencies,
authorities or departments (1) charged with the supervision or regulation of
depository institutions or (2) engaged in the insurance of deposits.
"Rights" means securities or obligations convertible into or exchangeable
for, or giving any Person any right to subscribe for or acquire, or any options,
calls or commitments relating to, shares of capital stock.
"Rule 147" means Rule 147 promulgated under the Securities Act.
"Rule 147 Restrictions" has the meaning assigned to such term in Section
2.1(C)(1).
"Securities Act" means the Securities Act of 1933, as amended, together
with the rules and regulations promulgated under such statute.
"Stock Consideration" has the meaning assigned to such term in Section
2.1(B)(1).
"Subsidiary" means, with respect to any entity, each partnership, limited
liability company, or corporation the majority of the outstanding partnership
interests, membership interests, capital stock or voting power of which is (or
upon the exercise of all outstanding warrants, options and other rights would
be) owned, directly or indirectly, at the time in question by such entity.
"Surviving Corporation" has the meaning assigned to such term in Section
1.1(A).
"Tax Returns" means all reports and returns with respect to Taxes that are
required to be filed by an applicable Party and its Subsidiaries, including
consolidated federal income tax returns of the Party and its Subsidiaries.
"Taxes" means federal, state, local or foreign income, gross receipts,
windfall profits, severance, property, production, sales, use, license, excise,
franchise, employment, withholding or similar taxes imposed on the income,
properties or operations of the respective Party or its Subsidiaries, together
with any interest, additions, or penalties with respect thereto and any interest
in respect of such additions or penalties.
"TCB" means TCBancorp, Inc., an Arkansas Corporation and bank holding
company.
"TCB Common Stock" has the meaning assigned to such term in paragraph (A)
of the Recitals.
"TCB Option" has the meaning assigned to such term in Section 2.5(A).
"Termination Date" has the meaning assigned to such term in Section 5.1.
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"Transmittal Form" has the meaning assigned to such term in Section 2.2.
(B) GENERAL INTERPRETATION. Except as otherwise expressly provided in this
Plan or unless the context clearly requires otherwise, the terms defined in this
Plan include the plural as well as the singular; the word "including" means
including without limitation; the words "hereof," "herein," "hereunder," "in
this Plan" and other words of similar import refer to this Plan as a whole and
not to any particular Article, Section or other subdivision; and references in
this Plan to Articles, Sections, Schedules, and Exhibits refer to Articles and
Sections of and Schedules and Exhibits to this Plan. Unless otherwise stated,
references to Subsections refer to the Subsections of the Section in which the
reference appears. All pronouns used in this Plan include the masculine,
feminine and neuter gender, as the context requires. All accounting terms used
in this Plan that are not expressly defined in this Plan have the respective
meanings given to them in accordance with GAAP.
ARTICLE I. MERGER
1.1. THE MERGER. Subject to the provisions of this Plan, on the Effective
Date:
(A) SURVIVING CORPORATION. In accordance with the applicable
provisions of the Arkansas Business Corporation Act of 1987, A.C.A. Section
4-27-101, et seq., TCB shall be merged with and into HBI pursuant to the terms
and conditions of this Plan and pursuant to the Articles of Merger substantially
in the form of EXHIBIT A. Upon consummation of the Merger, the separate
existence of TCB shall cease and HBI shall continue as the Surviving Corporation
(the "Surviving Corporation") under the corporate name it possesses immediately
prior to the Effective Date.
(B) ARTICLES, BYLAWS, DIRECTORS, OFFICERS. The Governing Documents of
the Surviving Corporation shall be those of HBI, as in effect immediately prior
to the Merger becoming effective. The directors and officers of HBI in office
immediately prior to the Merger becoming effective shall be the directors and
officers of the Surviving Corporation, together with such additional directors
and officers as may thereafter be elected, who shall hold office until such time
as their successors are elected and qualified.
(C) EFFECT OF THE MERGER. On the Effective Date, the effect of the
Merger shall be that (1) the title to all real estate and other property owned
by TCB is vested in the Surviving Corporation and shall not revert or be in any
way impaired by reason of the Merger; (2) the Surviving Corporation shall be
liable for all Liabilities of TCB whether or not reflected or reserved against
in the balance sheets, other financial statements, books of account or records
of TCB in the same manner as if the Surviving Corporation had itself incurred
such Liabilities or obligations; and (3) a proceeding pending by or against TCB
may be continued as if the Merger had not taken place, or the Surviving
Corporation may be substituted in place of TCB.
1.2. DISSENTING SHARES. Notwithstanding anything to the contrary in this
Plan, each Dissenting Share shall not be converted into a right to receive the
Merger Consideration, but the holder of such Dissenting Share shall be entitled
only to such rights as are granted by the
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Appraisal Laws, unless and until such holder shall have failed to perfect or
shall have effectively withdrawn or lost the right to payment under the
Appraisal Laws, in which case each such share shall be deemed to have been
converted at the Effective Date into the right to receive the Merger
Consideration. Each holder of Dissenting Shares who becomes entitled to payment
for his TCB Common Stock pursuant to the provisions of the Appraisal Laws shall
receive payment for such Dissenting Shares from HBI (but only after the amount
thereof shall have been agreed upon or finally determined pursuant to the
Appraisal Laws).
1.3. EFFECTIVE DATE. Unless the Parties agree upon another date, the
"Effective Date" will be the tenth Business Day after the fulfillment or waiver
of each condition precedent set forth in, and the granting of each approval (and
expiration of any waiting period) required by, ARTICLE VI. If the Merger is not
consummated in accordance with this Plan on or prior to the Termination Date,
TCB or HBI may terminate this Plan in accordance with ARTICLE VII. On the
Effective Date, Articles of Merger will be filed with the Secretary of State of
the State of Arkansas in accordance with applicable law.
ARTICLE II. CONSIDERATION
2.1. MERGER CONSIDERATION. At the Effective Date, without any action on the
part of HBI, TCB, or the holder of any of the shares of common stock of TCB, the
Merger shall be effected in accordance with the following terms:
(A) EXCEPTION SHARES. All shares of TCB Common Stock owned directly by
TCB (including treasury shares), HBI, or any of their Subsidiaries (in each case
other than shares in trust accounts or in an another fiduciary capacity, managed
accounts and the like or shares held in satisfaction of a debt previously
contracted) (the "Exception Shares") shall be cancelled and retired and shall
not represent capital stock of the Surviving Company and shall not be exchanged
for Merger Consideration or any other consideration.
(B) METHOD OF PAYMENT. The total amount paid for the TCB Common Stock
shall be divided between Stock Consideration and Cash Consideration, and,
subject to the Conditions set forth in Section 2.1(C), shall be paid by HBI to
holders of Eligible TCB Common Stock as follows:
(1) The portion of the Merger Consideration to be paid to holders
of Eligible TCB Common Stock who are Qualified Arkansas Residents is .8081
shares of HBI Common Stock for each whole share of Eligible TCB Common
Stock held by such Qualified Arkansas Resident as of the date hereof (the
"Stock Consideration").
(2) The portion of the Merger Consideration to be paid to the
holders of Eligible TCB Common Stock who are not Qualified Arkansas
Residents or who, subject to Sections 2.1(C)(2) and 2.2(B), Elect to
receive cash, is cash in an amount equal to $35.00 multiplied by the
product of the number of shares of Eligible TCB Common Stock held by such
non-Qualified Arkansas Resident times .8081 (the "Cash Consideration"). No
interest shall be paid on any Cash Consideration.
(3) Notwithstanding any other provision of this Plan, no
fractional
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shares of HBI Common Stock and no certificates, scrip, or other evidence of
ownership of fractional shares will be issued in the Merger. HBI shall pay
to each holder of Eligible TCB Common Stock who would otherwise be entitled
to a fractional or partial share of HBI Common Stock (the "Fraction") an
amount of cash equal to $35.00 multiplied by the product of .8081 times the
Fraction (the "Fractional Share Consideration"). No such holder shall be
entitled to dividends, interest, or any other rights in respect to such
fractional shares and no interest shall be paid on the Fractional Share
Consideration.
(C) CONDITIONS TO METHOD OF PAYMENT. The method of payment of Merger
Consideration by HBI shall be subject to the following conditions (the
"Conditions"):
(1) No HBI Common Stock shall be paid as Stock Consideration to a
holder of Eligible TCB Common Stock unless such holder is a Qualified
Arkansas Resident. A "Qualified Arkansas Resident" is a holder of Eligible
TCB Common Stock who, in the manner required by Section 2.2, represents and
warrants to HBI (1) that such holder is an Arkansas resident, (2) that such
holder is aware of the requirements of Rule 147 promulgated under the
Securities Act concerning restrictions on transferability of the HBI Common
Stock received as Stock Consideration (the "Rule 147 Restrictions"), and
(3) agrees to Rule 147 Restrictions.
(2) The total Cash consideration shall not exceed forty-nine
percent (49%) of the total Merger Consideration. A holder of Eligible TCB
Common Stock who Elects to receive Cash Consideration who is a Qualified
Arkansas Resident, may, as a result of the Allocation procedures in Section
2.2(B), receive Stock Consideration.
(D) NON-PERFECTING DISSENTERS. If, at or prior to the Effective Date,
any Dissenting Shareholder shall effectively withdraw or lose (through failure
to perfect or otherwise) his right to such payment, such holder's shares of TCB
Common Stock shall be converted into a right to receive Merger Consideration in
accordance with the applicable provisions of this Plan. If such holder shall
effectively withdraw or lose (through failure to perfect or otherwise) his right
to such payment after the Effective Date, each of such holder's shares of TCB
Common Stock shall be converted on a share-by-share basis into the right to
receive the Cash Consideration.
2.2. TRANSMITTAL AND ALLOCATION PROCEDURES.
(A) TRANSMITTAL PROCEDURES.
(1) A form (the "Transmittal Form") shall be mailed (the "Mailing
Date") as soon as reasonably practicable after the Effective Date to each
holder of Eligible TCB Common Stock of record as of the Effective Date. The
Transmittal Form shall contain applicable instructions on transmittal of
the holder's Eligible TCB Common Stock and shall request a holder of
Eligible TCB Common Stock to (a) elect ("Elect") to receive Cash
Consideration or Stock Consideration, (b) evidence that they are or are not
Arkansas Residents, and (c) evidence that they are aware of and agree to
the Rule 147 Restrictions. A holder's Election made on the Transmittal Form
is subject to the
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Conditions set forth in Section 2.1(C) and, subject to the Allocation made
by the Exchange Agent, as set forth in 2.2(B).
(2) Each holder of Eligible TCB Common Stock shall submit the
Transmittal Form, properly completed and signed, together with one or more
certificates, (or such affidavits and indemnification satisfactory to the
Exchange Agent regarding the loss or destruction of such certificates)
representing all Eligible TCB Common Stock covered by such Transmittal
Form, together with all other applicable transmittal materials, within
thirty (30) days of the Mailing Date (the "Expiration Date"). Once
submitted, the Transmittal Form is irrevocable. Neither HBI nor the
Exchange Agent shall be under any obligation to notify any person of any
defect in a Transmittal Form. No interest will be paid on the Cash
Consideration or any such fractional shares checks or dividends to which
the holder of any surrendered shares shall be entitled to receive upon such
delivery.
(3) Any holder of Eligible TCB Common Stock who does not submit
an effective, properly completed Transmittal Form to the Exchange Agent by
the Expiration Date shall receive only the Cash Consideration for their
shares of Eligible TCB Common Stock upon surrender of the certificates of
TCB Common Stock in the manner required by the Exchange Agent. Any Merger
Consideration into which shares of such shareholder's TCB Common Stock are
converted on the Effective Date, any fractional share checks that such
shareholder shall be entitled to receive and any dividends paid on such
shares of HBI Common Stock for which the record date for determination of
shareholders entitled to such dividends is on or after the Effective Date,
will be delivered to such shareholder only upon delivery to the Exchange
Agent of the effective, properly completed Transmittal Form accompanied by
the certificates representing all of such shares of Eligible TCB Common
Stock (or indemnity satisfactory to the Exchange Agent, in its judgment, if
any of such certificates are lost, stolen or destroyed).
(B) ALLOCATION PROCEDURES.
(1) As soon as reasonably practicable after the Expiration Date,
the Exchange Agent shall determine the number of shares of Eligible TCB
Common Stock held by Qualified Arkansas Residents, the number of other
shares of Eligible TCB Common Stock, and the number of shares of Qualified
Arkansas Residents who requested Cash Consideration as their Merger
Consideration.
(2) Based on that determination, HBI shall cause the Exchange
Agent to allocate (the "Allocation") the Merger Consideration among the
holders of Eligible TCB Common Stock pursuant to the following procedures:
(a) All Qualified Arkansas Residents who do not Elect to
receive Cash Consideration shall receive the Stock Consideration.
(b) If, after giving effect to the shares of Eligible TCB
Common Stock owned by holders who are not Qualified Arkansas Residents
and
11
the shares owned by holders who are Qualified Arkansas Residents and
Elected to receive Cash Consideration, the amount of Cash
Consideration to be paid as part of the Merger Consideration and
payments of cash as Fractional Share Consideration exceeds 49%, then
the Exchange Agent shall pay the Cash Consideration to holders who are
Qualified Arkansas Residents and who elected Cash Consideration, on a
pro rata basis.
(c) A Qualified Arkansas Resident who Elected to receive Cash
Consideration but whose Cash Consideration was pro rated, as set forth
in the preceding paragraph, will receive the balance of such holder's
Merger Consideration as Stock Consideration.
2.3. SHAREHOLDER RIGHTS; STOCK TRANSFERS. Except with respect to the rights
of a Dissenting Shareholder who perfects those rights under the Appraisal Laws,
on the Effective Date, holders of TCB Common Stock shall cease to be, and shall
have no rights as, shareholders of TCB, other than to receive the Merger
Consideration provided under this ARTICLE II. After the Effective Date, there
shall be no transfers on the stock transfer books of TCB or the Surviving
Corporation of the shares of TCB Common Stock that were issued and outstanding
immediately prior to the Effective Date.
2.4. RESERVATION OF RIGHT TO REVISE TRANSACTION. In its sole discretion,
and notwithstanding any other provision in this Plan to the contrary, HBI may at
any time change the method of effecting its acquisition of TCB including
offering the HBI Common Stock pursuant to a registration statement filed with
the Securities and Exchange Commission; provided, however, that (A) no such
change shall reduce the amount of the Total Merger Consideration provided in
Section 2.1(B) or change the kind of consideration to be generally issued to
holders of TCB Common Stock as provided for in this Plan; (B) such change shall
not result in the tax opinion required by Section 6.1(E) not being rendered, and
(C) no delay caused by such a change shall be the basis upon which HBI
terminates this Plan pursuant to Section 7.1(C). If HBI elects to change the
method of acquisition, TCB will cooperate with and assist HBI with any necessary
amendment to this Plan, and with the preparation and filing of such
applications, documents, instruments and notices as may be necessary or
desirable, in the opinion of counsel for HBI, to obtain all necessary
shareholder approvals and approvals of any regulatory agency, administrative
body or other governmental entity.
2.5. OPTIONS. On the Effective Date, by virtue of the Merger and without
any action on the part of any holder of an option, each outstanding option
granted by TCB to purchase shares of TCB Common Stock ("TCB Option") that is
then outstanding and unexercised shall immediately and automatically be fully
vested and converted into and become an option to purchase HBI Common Stock
("HBI Option") on the same terms and conditions as are in effect with respect to
TCB Option immediately prior to the Effective Date, except that (A) each such
HBI Option may be exercised solely for shares of HBI Common Stock, (B) the
number of shares of HBI Common Stock subject to such HBI Option shall be equal
to the number of shares of TCB Common Stock subject to such TCB Option
immediately prior to the Effective Date multiplied by .8081, the product being
rounded, if necessary, up or down to the nearest whole share, and (C) the per
share exercise price under each such HBI Option shall be
12
adjusted by dividing the per share exercise price of TCB Option by .8081, and
rounding up or down to the nearest cent. The number of shares of TCB Common
Stock that are issuable upon exercise of TCB Options as of the date of this Plan
and the names of the holders of TCB Options are disclosed in Schedule 2.5.
ARTICLE III. CONDUCT OF BUSINESS PENDING CONSUMMATION
Unless HBI otherwise agrees in writing between the date of this Agreement
and the Effective Date, TCB shall, and shall cause each of its Subsidiaries to,
conduct their respective business in the ordinary and usual course consistent
with past practice and not issue any additional shares of capital stock (except
upon the exercise of outstanding TCB Options) and shall use its commercially
reasonable best efforts to maintain and preserve their respective business
organizations, employees and advantageous business relationships and retain the
services of their officers and key employees identified by HBI.
Unless TCB otherwise agrees in writing, between the date of this Agreement
and the Effective Date, HBI shall, and shall cause each of its Subsidiaries to
conduct their respective business in the ordinary and usual course of business
consistent with past practice (except that nothing contained in this Article III
shall prohibit HBI from entering into acquisition or merger agreements in which
HBI or an Affiliated corporation is the surviving corporation) and not issue any
additional shares of capital stock (except in connection with such acquisitions
or mergers or in connections with the grant of options, whether or not presently
outstanding provided that any grant or grants of new options shall not exceed
30,000 shares of HBI Common Stock in the aggregate) and shall use its
commercially reasonable best efforts to maintain and preserve their respective
business organizations, employees and advantageous business relationships and
retain the services of their officers and key employees identified by TCB.
ARTICLE IV. REPRESENTATIONS AND WARRANTIES
4.1. TCB REPRESENTATIONS AND WARRANTIES. TCB hereby represents and warrants
to HBI, now and as of the Effective Date, as follows:
(A) RECITALS. The facts set forth in the recitals of this plan with
respect to TCB and its Subsidiaries are true and correct.
(B) ORGANIZATION, STANDING AND AUTHORITY. Each of TCB, Twin City, and
any other Subsidiary of TCB is in good standing under the laws of the
jurisdiction in which it is incorporated or organized and is duly qualified to
do business in the States of the United States and foreign jurisdictions where
the failure to be duly qualified, individually or in the aggregate, is
reasonably likely to have a Material effect on it. All of such jurisdictions are
set forth on Schedule 4.1(B). Each of TCB and Twin City, and any other
Subsidiary of TCB has in effect all federal, state, local and foreign
governmental authorizations necessary for it to own or lease its properties and
assets and to carry on its business as it is now conducted. Twin City is the
only Subsidiary of TCB that is an Insured Depository Institution, and its
deposits are insured by the Bank Insurance Fund of the FDIC. Except as disclosed
in Schedule 4.1(B), Twin City is not subject to any orders, resolutions,
commitments, agreements,
13
undertakings, understandings, or consents that affect its status as such Insured
Depository Institution.
(C) SHARES. The outstanding shares of TCB and its Subsidiaries'
capital stock are validly issued and outstanding, fully paid and non-assessable,
and subject to no preemptive rights. Except as disclosed in Schedule 4.1(C),
there are no shares of capital stock or other equity securities of TCB or its
Subsidiaries outstanding and no outstanding Rights with respect thereto.
(D) TCB SUBSIDIARIES. TCB has disclosed in Schedule 4.1(D) a list of
all of its Subsidiaries, and the number of authorized, issued, and outstanding
shares of each class of stock and the percentages of ownership of TCB or a TCB
Subsidiary. No equity securities of any of its Subsidiaries are or may become
required to be issued (other than to TCB or one of its Subsidiaries) by reason
of any Rights with respect thereto. There are no Contracts, commitments,
understandings or arrangements by which any of its Subsidiaries is or may be
bound to sell or otherwise issue any shares of such Subsidiary's capital stock,
and there are no Contracts, commitments, understandings or arrangements relating
to the rights of TCB or its Subsidiaries, as applicable, to vote or to dispose
of such shares. All of the shares of capital stock of each of its Subsidiaries
held by TCB or one of its Subsidiaries are fully paid and non-assessable and are
owned by TCB or one of its Subsidiaries free and clear of any charge, mortgage,
pledge, security interest, restriction, claim, lien or encumbrance. Except as
disclosed in Schedule 4.1(D), TCB does not own beneficially, directly or
indirectly, any shares of any equity securities or similar interests of any
corporation, bank, partnership, joint venture, business trust, association or
other organization.
(E) CORPORATE POWER. Each of TCB and its Subsidiaries has the
corporate power and authority to carry on its business as it is now being
conducted and to own all its Material properties and assets.
(F) CORPORATE AUTHORITY. Subject to any necessary receipt of approval
by its shareholders referred to in Section 6.1 and required regulatory
approvals, this Plan has been authorized by all necessary corporate action of
TCB and this Plan is a valid and binding agreement of TCB, enforceable against
TCB in accordance with its terms, subject to bankruptcy, insolvency and other
laws of general applicability relating to or affecting creditors' rights and to
general equity principles.
(G) NO DEFAULTS. Subject to the approval by its shareholders referred
to in Section 6.1, the required regulatory approvals referred to in Section 6.1,
and the required filings under federal and state securities laws, and except as
disclosed in Schedule 4.1(G), the execution, delivery and performance of this
Plan and the consummation by TCB do not and will not Materially (1) constitute a
breach of, or violation of, or a default under, any law, rule or regulation or
any judgment, decree, order, governmental permit or license, or agreement,
indenture or instrument of TCB or of any of its Subsidiaries or to which TCB or
any of its Subsidiaries or its or their properties is subject or bound, or (2)
constitute a breach of, or violation of, or a default under, the Governing
Documents of it or any of its Subsidiaries, or (3) require any consent or
approval under any such law, rule, regulation, judgment, decree, order,
14
governmental permit or license or the consent or approval of any other party to
any such agreement, indenture or instrument.
(H) TCB FINANCIAL REPORTS. Except as disclosed in Schedule 4.1(H): (a)
the Financial Reports of each of TCB and Twin City did not and will not contain
any untrue statement of a Material fact or omit to state a Material fact
required to be stated therein or necessary to make the statements made therein,
in light of the circumstances under which they were made, not misleading; (b)
each of the balance sheets in or incorporated by reference into the Financial
Reports (including the related notes and schedules thereto) are correct,
complete, and in accordance with the books and records of and fairly presents
and will fairly present the financial position of the entity or entities to
which it relates as of its date; (c) each of the statements of income and
changes in shareholders' equity and cash flows or equivalent statements in the
Financial Reports of Twin City (including any related notes and schedules
thereto) are correct, complete, and in accordance with the books and records of
and fairly presents and will fairly present the results of operations, changes
in shareholders' equity and cash flows, as the case may be, of the entity or
entities to which it relates for the periods set forth therein; and (d) in each
case in accordance with GAAP during the periods involved, except in each case as
may be noted therein, subject to normal and recurring year-end audit adjustments
in the case of unaudited statements.
(I) ABSENCE OF UNDISCLOSED LIABILITIES. To TCB's Knowledge, neither it
nor any of its Subsidiaries has any Material Liability, except (1) as disclosed
on Schedule 4.1(I), (2) as reflected in its Financial Reports prior to the date
of this Plan, or (3) for commitments and obligations made, or Liabilities
incurred, in the ordinary and usual course of business consistent with past
practice since September 30, 2004, and which are fully reflected as liabilities
on that entity's books and records. Except as disclosed on Schedule 4.1(I),
since September 30, 2004, neither TCB nor any of its Subsidiaries has incurred
or paid any Material Liability (including any Liability incurred in connection
with any acquisitions in which any form of direct financial assistance of the
federal government or any agency thereof has been provided to any Subsidiary).
(J) NO EVENTS. Except as disclosed on Schedule 4.1(J), since September
30, 2004, no event has occurred that, individually or in the aggregate, is
reasonably likely to have a Material effect on TCB or any of its Subsidiaries.
(K) PROPERTIES. Except as disclosed in Schedule 4.1(K), TCB and each
of its Subsidiaries have good and marketable title, free and clear of all liens,
encumbrances, charges, defaults, or equities of any character, to all of the
properties and assets, tangible and intangible, reflected in the Financial
Reports of TCB as being owned by TCB or its Subsidiaries as of the dates
thereof. All buildings and all Material fixtures, equipment, and other property
and assets that are held under leases or subleases by TCB or any of its
Subsidiaries are held under valid leases or subleases enforceable in accordance
with their respective terms, other than any such exceptions to validity or
enforceability as are disclosed on Schedule 4.1(K). Other than month-to-month
leases on operating equipment, all leases and subleases are identified on
Schedule 4.1(K), and except as disclosed on such schedule, are fully
transferrable to HBI as the Surviving Corporation under this Plan. TCB further
represents, covenants and warrants that,
15
except as disclosed in Schedule 4.1(K), taking their age and ordinary wear and
tear into account, the assets and properties of TCB or any of its Subsidiaries
are in good operating condition and repair and have been operated and maintained
in the ordinary and usual course of business, consistent with past practice,
other than those items of personal property not in use by TCB or its
Subsidiaries as of the date hereof.
(L) INTELLECTUAL PROPERTY RIGHTS. Schedule 4.1(L) lists all patents,
patent rights, licenses, trade secrets, trademarks, service marks, trademark
rights, trade names or trade name rights, copyrights, inventions and other
intellectual property rights ("Intellectual Property Rights") necessary for the
ownership and operation of the business of TCB or any of its Subsidiaries in the
manner in which the business has been historically and currently owned and
operated by TCB or its Subsidiaries. To TCB's Knowledge, none of the
Intellectual Property Rights interferes with, infringes upon, misappropriates,
or violates any intellectual property rights of third parties, and neither TCB
nor any of its Subsidiaries has received any written charge, complaint, claim,
demand, or notice alleging any such interference, infringement,
misappropriation, or violation. To TCB's Knowledge, no third party has
interfered with, infringed upon, misappropriated, or violated any of the
Intellectual Property Rights. Neither TCB nor any of its Subsidiaries has
received any written notice with respect to any outstanding injunction,
judgment, order, decree, ruling, or charge relating to any item of the
Intellectual Property Rights, and no action, suit, proceeding, hearing,
investigation, charge, complaint, claim, or demand is pending or, to the
Knowledge of TCB or any of its Subsidiaries, is threatened which challenges the
legality, validity, enforceability, use, or ownership of any of the Intellectual
Property Rights.
(M) LITIGATION; REGULATORY ACTION. Except as disclosed in Schedule
4.1(M) and except for foreclosures or collection matters initiated by TCB or its
Subsidiaries in the ordinary and usual course of business, no litigation,
proceeding or controversy before any court or governmental agency is pending or,
to TCB's Knowledge, threatened against TCB or any of its Subsidiaries,
including, without limitation, any litigation, proceedings, or controversies
that allege claims under any fair lending law or other law relating to
discrimination, including the Equal Credit Opportunity Act, the Fair Housing
Act, the Community Reinvestment Act and the Home Mortgage Disclosure Act, or
allege claims under any fair credit reporting laws or laws for the protection of
non-public personal information, including the Fair Credit Reporting Act, the
Xxxxx-Xxxxx-Xxxxxx Act, and the Fair and Accurate Credit Transaction Act and, to
its Knowledge, no such litigation, proceeding or controversy has been, to TCB's
Knowledge, threatened; and except as disclosed in Schedule 4.1(M), neither TCB
nor any of its Subsidiaries or any of its or their Material properties or their
officers, directors or Controlling persons is a party to or is subject to any
order, decree, agreement, memorandum of understanding or similar arrangement
with, or a commitment letter or similar submission to, any Regulatory Authority
or other governmental authority, and neither TCB nor any of its Subsidiaries has
been advised by any of such Regulatory Authorities or other governmental
authority that such authority is contemplating issuing or requesting (or is
considering the appropriateness of issuing or requesting) any such order,
decree, agreement, memorandum or understanding, commitment letter or similar
submission.
16
(N) COMPLIANCE WITH LAWS. Except as disclosed in Schedule 4.1(N), each
of TCB and its Subsidiaries:
(1) has all permits, licenses, authorizations, orders and
approvals of, and has made all filings, applications and registrations
with, all Regulatory Authorities or other governmental authority that are
required in order to permit it to own its businesses presently conducted
and that are Material to the business of it and its Subsidiaries taken as a
whole; all such permits, licenses, certificates of authority, orders and
approvals are in full force and effect and, to its Knowledge, no suspension
or cancellation of any of them is threatened; and all such filings,
applications and registrations are current;
(2) has received no notification or communication from any
Regulatory Authority or other governmental authority or the staff thereof
(a) asserting that TCB or any of its Subsidiaries is not in compliance with
any of the statutes, regulations or ordinances which such Regulatory
Authority or governmental authority enforces, (b) threatening to revoke any
license, franchise, permit or governmental authorization of TCB or any of
its Subsidiaries, or (c) requiring any of TCB any of its Subsidiaries (or
any of its or their officers, directors or Controlling persons) to enter
into a cease and desist order, agreement or memorandum of understanding (or
requiring the board of directors thereof to adopt any resolution or
policy);
(3) is not required to give prior notice to any federal banking
or thrift agency of the proposed addition of an individual to its board of
directors or the employment of an individual as a senior executive; and
(4) is in compliance in all Material respects with all fair
lending laws or other laws relating to discrimination, including the Equal
Credit Opportunity Act, the Fair Housing Act, the Community Reinvestment
Act and the Home Mortgage Disclosure Act, and all fair credit reporting
laws and laws for the protection of non-public personal information,
including the Fair Credit Reporting Act, the Xxxxx-Xxxxx-Xxxxxx Act, and
the Fair and Accurate Credit Transaction Act.
(O) MATERIAL CONTRACTS. Except as disclosed in Schedule 4.1(O) (and
with a true and complete copy of the document or other item in question attached
to such schedule), none of TCB or its Subsidiaries, nor any of their respective
assets, businesses or operations, is a party to, or is bound or affected by, or
receives benefits under, any Contract or amendment thereto by which its
respective assets, business or operations may be bound or affected or under
which it or any of its respective assets, business or operations receives
benefits (excluding extensions of credit made in the ordinary and usual course
of business) or Contracts (other than lease Contracts) obligating it or them to
pay more than $20,000 in any year and lease Contracts obligating it or them to
pay more than $100,000 in any year and which can be terminated upon not less
than 60 day's notice. Except as disclosed in Schedule 4.1(O), to TCB's
Knowledge, neither TCB nor any of its Subsidiaries is in default under any such
Contract, and there has not occurred any event that, with the lapse of time or
the giving of notice or both, would constitute such a default. Except as
disclosed in Schedule 4.1(O), neither TCB nor any of its Subsidiaries is subject
to or bound by any Contract containing covenants that limit the ability of TCB
or any of its Subsidiaries to compete in any line of business or with any Person
or that
17
involve any restriction of geographical area in which, or method by which, TCB
or any of its Subsidiaries may carry on its business (other than as may be
required by law or any applicable Regulatory Authority).
(P) REPORTS. Since January 1, 2001, each of TCB and its Subsidiaries
has filed all reports and statements, together with any amendments required to
be made with respect thereto, that it was required to file with (1) the Arkansas
State Bank Department, (2) the FDIC, (3) the Federal Reserve Board, and (4) any
other Regulatory Authorities or other governmental authority having jurisdiction
with respect to TCB and its Subsidiaries. As of their respective dates (and
without giving effect to any amendments or modifications filed after the date of
this Plan with respect to reports and documents filed before the date of this
Plan), each of such reports and documents, including the financial statements,
exhibits and schedules thereto, complied in all Material respects with all of
the statutes, rules and regulations enforced or promulgated by the Regulatory
Authority with which they were filed and did not contain any untrue statement of
a Material fact or omit to state any Material fact necessary in order to make
the statements made therein, in light of the circumstances under which they were
made, not misleading.
(Q) BROKERS AND FINDERS. Except as set forth in Schedule 4.1(Q),
neither TCB, Twin City, any TCB Subsidiary nor any of their respective officers,
directors or employees has employed any broker or finder, or agreed to pay any
fees to any director or former director or incurred any Liability for any
financial advisory fees, brokerage fees, commissions or finder's fees, and no
broker or finder, or director or former director of TCB and Twin City, has acted
directly or indirectly for TCB, Twin City or any TCB Subsidiary, in connection
with this Plan or the transactions contemplated hereby.
(R) EMPLOYEE BENEFIT PLANS.
(1) Schedule 4.1(R)(1) contains a complete list of Compensation
and Benefit Plans of TCB. True and complete copies of all Compensation and
Benefit Plans of TCB and its Subsidiaries, including any trust instruments
and/or insurance contracts, if any, forming a part thereof, and all
amendments thereto, have been supplied to the other Parties.
(2) All ERISA Plans, other than Multiemployer Plans, covering
employees or former employees of TCB and its Subsidiaries, to the extent
subject to ERISA, are in Material compliance with ERISA. Except as
disclosed in Schedule 4.1(R)(2) each Pension Plan of TCB has received a
favorable determination letter from the Internal Revenue Service, and TCB
is not aware of any circumstances reasonably likely to result in the
revocation or denial of any such favorable determination letter or the
inability to receive such a favorable determination letter. There is no
Material pending or, to TCB's Knowledge, threatened litigation relating to
the ERISA Plans. To TCB's Knowledge, neither it nor any of its Subsidiaries
has engaged in a transaction with respect to any ERISA Plan that could
subject TCB or any of its Subsidiaries to a tax or penalty imposed by
either Section 4975 of the Code or Section 502(i) of ERISA in an amount
which would be Material.
18
(3) No Liability under Subtitle C or D of Title IV of ERISA has
been or is expected to be incurred by TCB or any of its Subsidiaries with
respect to any ongoing, frozen or terminated "single-employer plan," within
the meaning of Section 4001(a)(15) of ERISA, currently or formerly
maintained by any of them, or the single-employer plan of an ERISA
Affiliate of TCB. Neither TCB nor any of its Subsidiaries presently
contributes to a Multiemployer Plan, nor have they contributed to such a
plan within the past five calendar years. No notice of a "reportable
event," within the meaning of Section 4043 of ERISA for which the 30-day
reporting requirement has not been waived, has been required to be filed
for any Pension Plan or by any ERISA Affiliate within the past 12-month
period.
(4) All contributions required to be made under the terms of any
ERISA Plan have been timely made. Neither any Pension Plan nor any
single-employer plan of an ERISA Affiliate has an "accumulated funding
deficiency" (whether or not waived) within the meaning of Section 412 of
the Code or Section 302 of ERISA, except as disclosed in Schedule
4.1(R)(4). Neither TCB nor any of its Subsidiaries has provided, or is
required to provide, security to any Pension Plan or to any single-employer
plan of an ERISA Affiliate pursuant to Section 401(a)(29) of the Code.
(5) Except as disclosed in Schedule 4.1(R)(5), under each Pension
Plan which is a single-employer plan, as of the last day of the most recent
plan year, the actuarially determined present value of all "benefit
liabilities," within the meaning of Section 4001(a)(16) of ERISA (as
determined on the basis of the actuarial assumptions contained in the
plan's most recent actuarial valuation) did not exceed the then current
value of the assets of such plan, and there has been no Material change in
the financial condition of such plan since the last day of the most recent
plan year.
(6) Neither TCB nor any of its Subsidiaries has any obligations
for retiree health and life benefits under any plan, except as set forth in
Schedule 4.1(R)(6). There are no restrictions on the rights of TCB or any
of its Subsidiaries to amend or terminate any such plan without incurring
any Liability thereunder.
(7) Except as disclosed in Schedule 4.l(R)(7), neither the
execution and delivery of this Plan nor the consummation of the
transactions contemplated by this Plan will (a) result in any payment
(including severance, unemployment compensation, golden parachute or
otherwise) becoming due to any director or any employee of TCB or any of
its Subsidiaries under any Compensation and Benefit Plan or otherwise from
TCB or any of its Subsidiaries, (b) increase any benefits otherwise payable
under any Compensation and Benefit Plan, or (c) result in any acceleration
of the time of payment or vesting of any such benefit.
(S) NO KNOWLEDGE. TCB and its Subsidiaries Know of no reason why the
regulatory approvals referred to in Section 6.1 should not be obtained.
(T) LABOR AGREEMENTS. Neither TCB nor any of its Subsidiaries is a
party to or is bound by any collective bargaining agreement, Contract or other
agreement or understanding with a labor union or labor organization, nor is TCB
or any of its Subsidiaries the
19
subject of a proceeding asserting that it or any such Subsidiary has committed
an unfair labor practice (within the meaning of the National Labor Relations
Act) or seeking to compel it or such Subsidiary to bargain with any labor
organization as to wages and conditions of employment, nor is there any strike
or other labor dispute involving it or any of its Subsidiaries pending or, to
its Knowledge, threatened, nor is it aware of any activity involving its or any
of the Subsidiaries' employees seeking to certify a collective bargaining unit
or engaging in any other organization activity.
(U) ASSET CLASSIFICATION. TCB and its Subsidiaries have disclosed in
Schedule 4.1(U) a list, accurate and complete in all Material respects, of the
aggregate amounts of loans, extensions of credit or other assets of TCB and its
Subsidiaries that have been classified by it as of the date of the Plan; and no
amounts of loans, extensions of credit or other assets that have been classified
as of such date by any regulatory examiner as "Other Loans Specially Mentioned,"
"Substandard," "Doubtful" "Loss," or words of similar import are excluded from
the amounts disclosed in such asset classification, other than amounts of loans,
extensions of credit or other assets that were charged off by TCB or any
Subsidiary prior to such date, and which are also disclosed on Schedule 4.1(U).
(V) ALLOWANCE FOR POSSIBLE LOAN LOSSES. Except as disclosed on
Schedule 4.1(V), the allowance for possible loan losses shown on the
consolidated balance sheets in the September 30, 2004 Financial Reports of TCB
was, and the allowance for possible loan losses to be shown on subsequent
Financial Reports of TCB shall be adequate, to the Knowledge of TCB, to provide
for possible losses, net of recoveries relating to loans previously charged off,
on loans outstanding (including accrued interest receivable) as of the date
thereof.
(W) INSURANCE. Each of TCB and its Subsidiaries has taken all
requisite action (including the making of claims and the giving of notices)
pursuant to its directors' and officers' liability insurance policy or policies
in order to preserve all rights thereunder with respect to all matters that are
Known to TCB, except for such matters that, individually or in the aggregate,
are not reasonably likely to have a Material adverse effect on TCB or its
Subsidiaries. Set forth in Schedule 4.l(W) is a list of all insurance policies
maintained by or for the benefit of TCB or its Subsidiaries or their respective
directors, officers, employees or agents.
(X) BOOKS AND RECORDS. All books of account, minute books, stock
record books and other records of TCB and all of its Subsidiaries, all of which
have been made available to HBI, are complete and correct in all Material
respects and have been maintained in accordance with the laws of the State of
Arkansas for banks, bank holding companies, and corporations, and applicable
rules and regulations promulgated thereunder and in accordance with sound
business practices. The minute books of TCB and its Subsidiaries contain
accurate and complete records in all Material respects of all meetings held of,
and corporate action taken by, the shareholders, the Board of Directors and
committees of the Board of Directors of Company (as applicable), and no meeting
of any such shareholders, Board of Directors or committee has been held for
which minutes have not been prepared and are not contained in such minute books.
At the Closing, all of those books and records shall be in the possession of TCB
and shall be delivered to HBI.
20
(Y) NO FURTHER ACTION. TCB and its Subsidiaries have taken all action
so that the entering into of this Plan and the consummation of the transactions
contemplated by this Plan, or any other action or combination of actions, or any
other transactions, contemplated by this Plan do not and will not (1) require a
vote of shareholders (other than as set forth in Section 6.1), or (2) result in
the grant of any rights to any Person under the Governing Documents of TCB or
any of its Subsidiaries or under any agreement to which TCB or any such
Subsidiaries is a party, or (3) restrict or impair in any way the ability of the
Parties to exercise the rights granted under this Plan.
(Z) ENVIRONMENTAL MATTERS.
(1) To TCB's Knowledge, the Participation Facilities and the
Loan/Fiduciary Properties are, and have been, in compliance with all
Environmental Laws, except as disclosed on Schedule 4.1(Z)(1).
(2) There is no investigation or proceeding pending or, to TCB's
Knowledge, threatened by or before any court, governmental agency or board
or other forum in which TCB or any of its Subsidiaries or any Participation
Facility has been, or with respect to threatened investigations or
proceedings, reasonably would be expected to be, named as a defendant or
potentially responsible party (a) for alleged noncompliance (including by
any predecessor) with any Environmental Law, or (b) relating to the release
or threatened release into the environment of any Hazardous Material,
whether or not occurring at or on a site owned, leased or operated by TCB
or any of its Subsidiaries or any Participation Facility, except as
disclosed in Schedule 4.1(Z)(2).
(3) There is no investigation or proceeding pending or, to TCB's
Knowledge, threatened by or before any court, governmental agency or board
or other forum in which any Loan/Fiduciary Property (or TCB or any of its
Subsidiaries in respect of any Loan/Fiduciary Property) has been, or with
respect to threatened investigations or proceedings, reasonably would be
expected to be, named as a defendant or potentially responsible party (a)
for alleged noncompliance (including by any predecessor) with any
Environmental Law, or (b) relating to the release or threatened release
into the environment of any Hazardous Material, whether or not occurring at
or on a Loan/Fiduciary Property, except for such investigations or
proceedings disclosed in Schedule 4.1(Z)(3).
(4) To TCB's Knowledge, there is no reasonable basis for any
investigation or proceeding of a type described in subparagraph (2) or (3)
of this paragraph (Z), except as has been disclosed in Schedule 4.1(Z)(4).
(5) To TCB's Knowledge, and except as disclosed on Schedule
4.1(Z)(5), during the period of (a) ownership or operation by TCB or any of
its Subsidiaries of any of their respective current properties, (b)
participation in the management of any Participation Facility by TCB or any
of its Subsidiaries, or (c) holding of a security or other interest in a
Loan/Fiduciary Property by TCB or any of its Subsidiaries, there have been
no releases of Hazardous Material in, on, under or affecting
21
any such property, Participation Facility or Loan/Fiduciary Property that
violate Environmental Laws.
(6) To TCB's Knowledge, and except as disclosed on Schedule
4.1(Z)(6), prior to the period of (a) ownership or operation by TCB or any
of its Subsidiaries of any of their respective current properties, (b)
participation in the management of any Participation Facility by TCB or any
of its Subsidiaries, or (c) holding of a security or other interest in a
Loan/Fiduciary Property by TCB or any of its Subsidiaries, there were no
releases of Hazardous Material in, on, under or affecting any such
property, Participation Facility or Loan Fiduciary Property.
(7) To TCB's Knowledge, no underground storage tanks are located
on any property of TCB or any of its Subsidiaries, or any Participation
Facility or any Loan/Fiduciary Property except as disclosed in Schedule
4.1(Z)(7).
(8) To TCB's Knowledge, and except as disclosed in Schedule
4.1(Z)(8), neither TCB's nor any of its Subsidiaries' facilities have
building components containing friable asbestos.
(AA) TAX RETURNS. Except as disclosed in Schedule 4.1(AA), (1) all Tax
Returns of TCB have been duly filed, or requests for extensions have been timely
filed and have not expired, for periods ended on or prior to the most recent
fiscal year-end, and such Tax Returns were true, complete and accurate in all
Material respects, (2) all Taxes shown to be due on the Tax Returns have been
paid in full, (3) the Tax Returns have been examined by the Internal Revenue
Service or the appropriate state, local or foreign taxing authority, or the
period for assessment of the Taxes in respect of which such Tax Returns were
required to be filed has expired, (4) all Taxes due with respect to completed
and settled examinations have been paid in full, (5) no issues have been raised
by the relevant taxing authority in connection with the examination of any of
the Tax Returns which are reasonably likely, individually or in the aggregate,
to result in a determination that would have a Material effect on TCB or its
Subsidiaries, except as reserved against in the Financial Reports of TCB, and
(6) no waivers of statutes of limitations (excluding such statutes that relate
to years under examination by the Internal Revenue Service) have been given by
or requested with respect to any Taxes of TCB or its Subsidiaries.
(BB) ACCURACY OF INFORMATION. The statements with respect to TCB and
its Subsidiaries contained in this Plan, the Schedules and any other written
documents executed and delivered by or on behalf of TCB pursuant to the terms of
or relating to this Plan are now and as of the Effective Date true and correct
in all Material respects, and such statements and documents do not omit any
Material fact necessary to make the statements contained therein, in light of
the circumstances under which they were made, now and as of the Effective Date,
not misleading.
(CC) DERIVATIVES CONTRACTS. None of TCB or its Subsidiaries is a party
to or has agreed to enter into a Derivatives Contract or owns securities that
are referred to as "structured notes" except for those Derivatives Contracts and
structured notes disclosed in
22
Schedule 4.1(CC). Schedule 4.1(CC) includes a list of any assets of TCB or its
Subsidiaries that are pledged as security for each such Derivatives Contract.
(DD) ACCOUNTING CONTROLS. Each of TCB and its Subsidiaries has devised
and maintained systems of internal accounting controls sufficient to provide
reasonable assurances that (1) all Material transactions are executed in
accordance with management's general or specific authorization, (2) all Material
transactions are recorded as necessary to permit the preparation of financial
statements in conformity with GAAP, and to maintain proper accountability for
items, (3) access to the Material property and assets of TCB and its
Subsidiaries is permitted only in accordance with management's general or
specific authorization, and (4) the recorded accountability for items is
compared with the actual levels at reasonable intervals and appropriate action
is taken with respect to any differences.
(EE) COMMITMENTS AND CONTRACTS. Neither TCB nor any of its
Subsidiaries is a party or subject to any of the following (whether written or
oral, express or implied):
(1) except as disclosed in Schedule 4.1(EE)(1), any employment
contract or understanding (including any understandings or obligations with
respect to severance or termination pay Liabilities or fringe benefits)
with any present or former officer, director or employee (other than those
which are terminable at will by TCB or any such Subsidiary without any
obligation on the part of TCB or any such Subsidiary to make any payment in
connection with such termination);
(2) except as disclosed in Schedule 4.1(EE)(2), any Contract,
commitment, or understanding with any Person related to or under the
Control of any present or former officer, director, or employee of TCB or
any of its Subsidiaries, to the extent that such Contract, commitment or
understanding Materially impacts the financial condition of any of TCB or
its Subsidiaries.
(3) except as disclosed in Schedule 4.1(EE)(3), any real or
personal property lease with annual rental payments aggregating $20,000 or
more; or
(4) except as disclosed in Schedule 4.1(EE)(4), any Material
Contract with any Affiliate.
(FF) CLAIMS OF OFFICERS, DIRECTORS, AND EMPLOYEES. Except as disclosed
on Schedule 4.1(FF), to TCB's Knowledge, no officer or director of TCB or any of
its Subsidiaries has any claims against TCB or its Subsidiary, other than for
their regular accrued but unpaid salary and/or director's fee. Except as
disclosed on Schedule 4.1(FF), there are no outstanding or, to TCB's Knowledge,
potential claims by a present or former employee against TCB or any of its
Subsidiaries under federal or state law, under any employment agreement, or
otherwise, other than for wages, salary, or overtime pay owed in respect of the
current pay period, or vacation or sick pay or time off owed in respect of the
current fiscal year.
(GG) TAKEOVER RESTRICTIONS. TCB and its Subsidiaries have taken all
necessary action to exempt (or ensure the continued exemption of) this Plan and
the transactions
23
contemplated by this Plan from any takeover related provisions of TCB's and its
Subsidiaries' articles of incorporation.
4.2. HBI REPRESENTATIONS AND WARRANTIES. HBI hereby represents and warrants
to TCB now and as of the Effective Date as follows; provided, however, that as
to Community Bank, no representations are made or warranties given for any
period prior to the effective date of the CFG Merger:
(A) RECITALS. The facts set forth in the Recitals of this Plan with
respect to HBI and its Subsidiaries are true and correct.
(B) ORGANIZATION, STANDING AND AUTHORITY. Each of HBI and its
Subsidiaries is in good standing under the laws of the jurisdiction in which it
is incorporated or organized and is duly qualified to do business and is in good
standing in the States of the United States and foreign jurisdictions where the
failure to be duly qualified, individually or in the aggregate, is reasonably
likely to have a Material effect on it. All of such jurisdictions are set forth
on Schedule 4.2(B). Each of HBI and its Subsidiaries has in effect all federal,
state, local and foreign governmental authorizations necessary for it to own or
lease its properties and assets and to carry on its business as it is now
conducted. FSB and Community Bank are the only Subsidiaries of HBI that are
Insured Depository Institutions, and their deposits are insured by the Bank
Insurance Fund of the FDIC. Except as disclosed in Schedule 4.2(B), neither FSB
nor Community Bank is subject to any orders, resolutions, commitments,
agreements, undertakings, understandings, or consents that affect its status as
such Insured Depository Institution.
(C) SHARES. The outstanding shares of HBI's and its Subsidiaries'
capital stock are validly issued and outstanding, fully paid and non-assessable,
and subject to no preemptive rights. Except as disclosed in Schedule 4.2(C),
there are no shares of capital stock or other equity securities of HBI and its
Subsidiaries outstanding and no outstanding Rights with respect thereto.
(D) HBI SUBSIDIARIES. HBI has disclosed in Schedule 4.2(D) a list of
all of its Subsidiaries and the percentages of ownership by HBI. No equity
securities of any of its Subsidiaries are or may become required to be issued
(other than to HBI or one of its Subsidiaries) by reason of any Rights with
respect thereto. There are no Contracts, commitments, understandings or
arrangements by which any of its Subsidiaries is or may be bound to sell or
otherwise issue any shares of such Subsidiary's capital stock, and there are no
Contracts, commitments, understandings or arrangements relating to the rights of
HBI or its Subsidiaries, as applicable, to vote or to dispose of such shares.
All of the shares of capital stock of each of its Subsidiaries held by HBI or
one of its Subsidiaries are fully paid and non-assessable and are owned by HBI
or one of its Subsidiaries free and clear of any charge, mortgage, pledge,
security interest, restriction, claim, lien or encumbrance. Except as disclosed
in Schedule 4.2(D), HBI does not own beneficially, directly or indirectly, any
shares of any equity securities or similar interests of any corporation, bank,
partnership, joint venture, business trust, association or other organization.
24
(E) CORPORATE POWER. HBI and its Subsidiaries has the corporate power
and authority to carry on its business as it is now being conducted and to own
all its Material properties and assets.
(F) CORPORATE AUTHORITY. Subject to the authorization of its Board of
Directors on or about December 10, 2004 and any necessary receipt of approval by
its shareholders referred to in Section 6.1 and required regulatory approvals,
this Plan has been authorized by all necessary corporate action of HBI and such
agreement is a valid and binding agreement of HBI, enforceable against HBI in
accordance with its terms, subject to bankruptcy, insolvency and other laws of
general applicability relating to or affecting creditors' rights and to general
equity principles.
(G) NO DEFAULTS. Subject to receipt of the required regulatory
approvals referred to in Section 6.1, and the required filings under federal and
state securities laws, and except as disclosed in Schedule 4.2(G), the
execution, delivery and performance of its obligation under this Plan and the
consummation by HBI of the transactions contemplated by this Plan do not and
will not Materially (1) constitute a breach or violation of, or a default under,
any law, rule or regulation or any judgment, decree, order, governmental permit
or license, or agreement, indenture or instrument of HBI or any of its
Subsidiaries or to which HBI or any of its Subsidiaries or its properties is
subject or bound, (2) constitute a breach or violation of, or a default under,
the Governing Documents of it or any of its Subsidiaries, or (3) require any
consent or approval under any such law, rule, regulation, judgment, decree,
order, governmental permit or license or the consent or approval of any other
party to any such agreement, indenture or instrument, other than any such
consent or approval that is disclosed on Schedule 4.2(G).
(H) HBI FINANCIAL REPORTS. Except as disclosed in Schedule 4.2(H): (a)
the Financial Reports of HBI did not and will not contain any untrue statement
of a Material fact or omit to state a Material fact required to be stated
therein or necessary to make the statements made therein, in light of the
circumstances under which they were made, not misleading; (b) each of the
balance sheets in or incorporated by reference into the Financial Reports of HBI
(including the related notes and schedules thereto) are correct, complete, and
in accordance with the books and records of and fairly presents and will fairly
present the financial position of the entity or entities to which it relates as
of its date; (c) each of the statements of income and changes in shareholders'
equity and cash flows or equivalent statements in the Financial Reports of FSB
and Community Bank (including any related notes and schedules thereto) fairly
presents and will fairly present the results of operations, changes in
shareholders' equity and cash flows, as the case may be, of the entity or
entities to which it relates for the periods set forth therein; and (d) in each
case in accordance with GAAP during the periods involved, except in each case as
may be noted therein, subject to normal and recurring year-end audit adjustments
in the case of unaudited statements.
(I) ABSENCE OF UNDISCLOSED LIABILITIES. To HBI's Knowledge, neither it
nor any of its Subsidiaries have any Material Liability, except (1) as disclosed
on Schedule 4.2(I), (2) as reflected in HBI's Financial Reports prior to the
date of this Plan, or (3) for commitments and obligations made, or Liabilities
incurred, in the ordinary and usual course of business consistent with past
practice since September 30, 2004 and which are fully reflected
25
as liabilities on the entity's books and records. Except as disclosed on
Schedule 4.2(I), since September 30, 2004, neither HBI nor any of its
Subsidiaries have incurred or paid any obligation or Liability (including any
obligation or Liability incurred in connection with any acquisitions in which
any form of direct financial assistance of the federal government or any agency
thereof has been provided to any Subsidiary) that, individually or in the
aggregate, is reasonably likely to have a Material effect on it.
(J) NO EVENTS. Except as disclosed on Schedule 4.2(J), since September
30, 2004, no event has occurred which is reasonably likely to have a Material
effect on HBI or any of its subsidiaries.
(K) PROPERTIES. Except as disclosed in Schedule 4.2(K), HBI and each
of its Subsidiaries has good and marketable title, free and clear of all liens,
encumbrances, charges, defaults, or equities of any character, to all of the
properties and assets, tangible and intangible, reflected in the Financial
Reports of HBI as being owned by HBI or its Subsidiaries as of the dates
thereof. All buildings and all Material fixtures, equipment, and other property
and assets that are held under leases or subleases by HBI or any of its
Subsidiaries are held under valid leases or subleases enforceable in accordance
with their respective terms, other than any such exceptions to validity or
enforceability as are disclosed on Schedule 4.2(K). Other than month-to-month
leases on operating equipment, all leases and subleases are identified on
Schedule 4.2(K). HBI further represents, covenants and warrants that, except as
disclosed in Schedule 4.2(K), taking their age and ordinary wear and tear into
account, the assets and properties of HBI or any of its Subsidiaries are in good
operating condition and repair and have been operated and maintained in the
ordinary and usual course of business, consistent with past practice, other than
those items of personal property not in use by HBI as of the date hereof.
(L) INTELLECTUAL PROPERTY RIGHTS. Schedule 4.2(L) lists all
Intellectual Property Rights necessary for the ownership and operation of the
business of HBI or any of its Subsidiaries in the manner in which the business
has been historically and currently owned and operated by HBI. To HBI's
Knowledge, none of the Intellectual Property Rights interferes with, infringes
upon, misappropriates, or violates any intellectual property rights of third
parties, and HBI has not received any written charge, complaint, claim, demand,
or notice alleging any such interference, infringement, misappropriation, or
violation. To HBI's Knowledge, no third party has interfered with, infringed
upon, misappropriated, or violated any of the Intellectual Property Rights.
Neither HBI nor any of its Subsidiaries has received any written notice with
respect to any outstanding injunction, judgment, order, decree, ruling, or
charge relating to any item of the Intellectual Property Rights, and no action,
suit, proceeding, hearing, investigation, charge, complaint, claim, or demand is
pending or, to the Knowledge of HBI or any of its Subsidiaries, is threatened
which challenges the legality, validity, enforceability, use, or ownership of
any of the Intellectual Property Rights.
(M) LITIGATION; REGULATORY ACTION. Except as disclosed in Schedule
4.2(M) and except for foreclosures or collection matters initiated by HBI or its
Subsidiaries in the ordinary and usual course of business, no litigation,
proceeding or controversy before any court or governmental agency is pending, to
HBI's Knowledge, or threatened against HBI or any of its Subsidiaries,
including, without limitation, any litigation,
26
proceedings, or controversies that allege claims under any fair lending law or
other law relating to discrimination, including the Equal Credit Opportunity
Act, the Fair Housing Act, the Community Reinvestment Act and the Home Mortgage
Disclosure Act, or allege claims under any fair credit reporting laws or laws
for the protection of non-public personal information, including the Fair Credit
Reporting Act, the Xxxxx-Xxxxx-Xxxxxx Act, and the Fair and Accurate Credit
Transaction Act, and, to its Knowledge, no such litigation, proceeding or
controversy has been, to HBI's Knowledge, threatened; and except as disclosed in
Schedule 4.2(M), neither HBI nor any of its Subsidiaries or any of its or their
Material properties or their officers, directors or Controlling persons is a
party to or is subject to any order, decree, agreement, memorandum of
understanding or similar arrangement with, or a commitment letter or similar
submission to, any Regulatory Authority or other governmental authority, and
neither HBI nor any of its Subsidiaries has been advised by any of such
Regulatory Authorities or other governmental authority that such authority is
contemplating issuing or requesting (or is considering the appropriateness of
issuing or requesting) any such order, decree, agreement, memorandum or
understanding, commitment letter or similar submission.
(N) COMPLIANCE WITH LAWS. Except as disclosed in Schedule 4.2(N), each
of HBI or any of its Subsidiaries:
(1) has all permits, licenses, authorizations, orders and
approvals of, and has made all filings, applications and registrations
with, all Regulatory Authorities or other governmental authority that are
required in order to permit it to own its businesses presently conducted
and that are Material to the business of it and its Subsidiaries taken as a
whole; all such permits, licenses, certificates of authority, orders and
approvals are in full force and effect and, to its Knowledge, no suspension
or cancellation of any of them is threatened; and all such filings,
applications and registrations are current;
(2) has received no notification or communication from any
Regulatory Authority or other governmental authority or the staff thereof
(a) asserting that HBI or any of its Subsidiaries is not in compliance with
any of the statutes, regulations or ordinances which such Regulatory
Authority or governmental authority enforces, (b) threatening to revoke any
license, franchise, permit or governmental authorization of HBI or any of
its Subsidiaries, or (c) requiring any of HBI or any of its Subsidiaries
(or any of its officers, directors or Controlling persons) to enter into a
cease and desist order, agreement or memorandum of understanding (or
requiring the board of directors thereof to adopt any resolution or
policy);
(3) is not required to give prior notice to any federal banking
or thrift agency of the proposed addition of an individual to its board of
directors or the employment of an individual as a senior executive; and
(4) is in compliance in all Material respects with all fair
lending laws or other laws relating to discrimination, including the Equal
Credit Opportunity Act, the Fair Housing Act, the Community Reinvestment
Act and the Home Mortgage Disclosure Act, and all fair credit reporting
laws and laws for the protection of non-public personal information,
including the Fair Credit Reporting Act, the Xxxxx-Xxxxx-Xxxxxx Act, and
the Fair and Accurate Credit Transaction Act.
27
(O) MATERIAL CONTRACTS. Except as disclosed in Schedule 4.2(O) (and
with a true and complete copy of the document or other item in question attached
to such schedule), neither HBI nor its Subsidiaries nor its assets, businesses
or operations, is a party to, or is bound or affected by, or receives benefits
under, any Contract, or amendment thereto, by which its assets, business or
operations may be bound or affected or under which it or any of its assets,
business or operations receives benefits (excluding extensions of credit made in
the ordinary and usual course of business), or Contracts (other than lease
Contracts) obligating it to pay more than $20,000 in any year and lease
Contracts obligating it or them to pay more than $100,000 in any year and which
can be terminated upon not less than 60 day's notice. Except as disclosed in
Schedule 4.2(O), to HBI's Knowledge, neither HBI nor any of its Subsidiaries is
in default under any such Contract, and there has not occurred any event that,
with the lapse of time or the giving of notice or both, would constitute such a
default. Except as disclosed in Schedule 4.2(O), neither HBI nor any of its
Subsidiaries is subject to or bound by any Contract containing covenants that
limit the ability of HBI or any of its Subsidiaries to compete in any line of
business or with any Person or that involve any restriction of geographical area
in which, or method by which, HBI or any of its Subsidiaries may carry on its
business (other than as may be required by law or any applicable Regulatory
Authority).
(P) REPORTS. Since January 1, 2001, each of HBI and its Subsidiaries
has filed all reports and statements, together with any amendments required to
be made with respect thereto, that it was required to file with (1) the Arkansas
State Bank Department, (2) the FDIC, (3) the Federal Reserve Board, and (4) any
other Regulatory Authorities or other governmental authority having jurisdiction
with respect to HBI and its Subsidiaries. As of their respective dates (and
without giving effect to any amendments or modifications filed after the date of
this Plan with respect to reports and documents filed before the date of this
Plan), each of such reports and documents, including the financial statements,
exhibits and schedules thereto, complied in all Material respects with all of
the statutes, rules and regulations enforced or promulgated by the Regulatory
Authority with which they were filed and did not contain any untrue statement of
a Material fact or omit to state any Material fact necessary in order to make
the statements made therein, in light of the circumstances under which they were
made, not misleading.
(Q) BROKERS AND FINDERS. Except as set forth in Schedule 4.2(Q),
neither HBI, any of its Subsidiaries nor any of its officers, directors or
employees has employed any broker or finder, or agreed to pay any fees to any
director or former director or incurred any Liability for any financial advisory
fees, brokerage fees, commissions or finder's fees, and no broker or finder, or
director or former director of HBI or any of its Subsidiaries have acted
directly or indirectly for HBI or any of its Subsidiaries in connection with
this Plan or the transactions contemplated hereby.
(R) EMPLOYEE BENEFIT PLANS.
28
(1) Schedule 4.2(R)(1) contains a complete list of all
Compensation and Benefit Plans of HBI and its Subsidiaries. True and
complete copies of all Compensation and Benefit Plans of HBI, including any
trust instruments and/or insurance contracts, if any, forming a part
thereof, and all amendments thereto, have been supplied to the other
Parties.
(2) All ERISA Plans, other than Multiemployer Plans, covering
employees or former employees of HBI and its Subsidiaries, to the extent
subject to ERISA, are in Material compliance with ERISA. Except as
disclosed in Schedule 4.2(R)(2) each Pension Plan of HBI has received a
favorable determination letter from the Internal Revenue Service, and HBI
is not aware of any circumstances reasonably likely to result in the
revocation or denial of any such favorable determination letter or the
inability to receive such a favorable determination letter. There is no
Material pending or, to HBI's Knowledge, threatened litigation relating to
the ERISA Plans. To HBI's Knowledge, neither it nor any of its Subsidiaries
has engaged in a transaction with respect to any ERISA Plan that could
subject HBI or any of its Subsidiaries to a tax or penalty imposed by
either Section 4975 of the Code or Section 502(i) of ERISA in an amount
which would be Material.
(3) No Liability under Subtitle C or D of Title IV of ERISA has
been or is expected to be incurred by HBI or any of its Subsidiaries with
respect to any ongoing, frozen or terminated "single-employer plan," within
the meaning of Section 4001(a)(15) of ERISA, currently or formerly
maintained by any of them, or the single-employer plan of an ERISA
Affiliate of HBI. Neither HBI nor any of its Subsidiaries presently
contribute to a Multiemployer Plan, nor has it contributed to such a plan
within the past five calendar years. No notice of a "reportable event,"
within the meaning of Section 4043 of ERISA for which the 30-day reporting
requirement has not been waived, has been required to be filed for any
Pension Plan or by any ERISA Affiliate within the past 12-month period.
(4) All contributions required to be made under the terms of any
ERISA Plan have been timely made. Neither any Pension Plan nor any
single-employer plan of an ERISA Affiliate has an "accumulated funding
deficiency" (whether or not waived) within the meaning of Section 412 of
the Code or Section 302 of ERISA, except as disclosed in Schedule
4.2(R)(4). Neither HBI nor any of its Subsidiaries has provided, and is not
required to provide, security to any Pension Plan or to any single-employer
plan of an ERISA Affiliate pursuant to Section 401(a)(29) of the Code.
(5) Except as disclosed in Schedule 4.2(R)(5), under each Pension
Plan which is a single-employer plan, as of the last day of the most recent
plan year, the actuarially determined present value of all "benefit
liabilities," within the meaning of Section 4001(a)(16) of ERISA (as
determined on the basis of the actuarial assumptions contained in the
plan's most recent actuarial valuation) did not exceed the then current
value of the assets of such plan, and there has been no Material change in
the financial condition of such plan since the last day of the most recent
plan year.
29
(6) Neither HBI nor any of its Subsidiaries has any obligations
for retiree health and life benefits under any plan, except as set forth in
Schedule 4.2(R)(6). There are no restrictions on the rights of HBI to amend
or terminate any such plan without incurring any Liability thereunder.
(7) Except as disclosed in Schedule 4.2(R)(7), neither the
execution and delivery of this Plan nor the consummation of the
transactions contemplated by this Plan will (a) result in any payment
(including severance, unemployment compensation, golden parachute or
otherwise) becoming due to any director or any employee of HBI or any of
its Subsidiaries under any Compensation and Benefit Plan or otherwise from
HBI or any of its Subsidiaries, (b) increase any benefits otherwise payable
under any Compensation and Benefit Plan, or (c) result in any acceleration
of the time of payment or vesting of any such benefit.
(S) NO KNOWLEDGE. HBI and its Subsidiaries Know of no reason why the
regulatory approvals referred to in Section 6.1 should not be obtained.
(T) LABOR AGREEMENTS. Neither HBI nor any of its Subsidiaries is a
party to or bound by any collective bargaining agreement, Contract or other
agreement or understanding with a labor union or labor organization, nor is HBI
or any of its Subsidiaries the subject of a proceeding asserting that it has
committed an unfair labor practice (within the meaning of the National Labor
Relations Act) or seeking to compel it to bargain with any labor organization as
to wages and conditions of employment, nor is there any strike or other labor
dispute involving it pending or, to its Knowledge, threatened, nor is it aware
of any activity involving its or employees seeking to certify a collective
bargaining unit or engaging in any other organization activity.
(U) ASSET CLASSIFICATION. HBI and its Subsidiaries have disclosed in
Schedule 4.2(U) a list, accurate and complete in all Material respects, of the
aggregate amounts of loans, extensions of credit or other assets of HBI and its
Subsidiaries that have been classified by it as of the date of the Plan; and no
amounts of loans, extensions of credit or other assets that have been classified
as of such date by any regulatory examiner as "Other Loans Specially Mentioned,"
"Substandard," "Doubtful" "Loss," or words of similar import are excluded from
the amounts disclosed in such asset classification, other than amounts of loans,
extensions of credit or other assets that were charged off by HBI or any of its
Subsidiaries prior to such date, and which are also disclosed on Schedule
4.2(U).
(V) ALLOWANCE FOR POSSIBLE LOAN LOSSES. Except as disclosed on
Schedule 4.2(V), the allowance for possible loan losses shown on the
consolidated balance sheets in the September 30, 2004 Financial Reports of HBI
was, and the allowance for possible loan losses to be shown on subsequent
Financial Reports of HBI shall be adequate, to the Knowledge of HBI, to provide
for possible losses, net of recoveries relating to loans previously charged off,
on loans outstanding (including accrued interest receivable) as of the date
thereof.
(W) INSURANCE. Each of HBI and its Subsidiaries has taken all
requisite action (including the making of claims and the giving of notices)
pursuant to its directors' and officers' liability insurance policy or policies
in order to preserve all rights thereunder with
30
respect to all matters that are Known to HBI, except for such matters that,
individually or in the aggregate, are not reasonably likely to have a Material
adverse effect on HBI or its Subsidiaries. Set forth in Schedule 4.2(W) is a
list of all insurance policies maintained by or for the benefit of HBI or its
directors, officers, employees or agents.
(X) BOOKS AND RECORDS. All books of account, minute books, stock
record books and other records of HBI and its Subsidiaries, all of which have
been made available to TCB, are complete and correct in all Material respects
and have been maintained in accordance with the laws of the State of Arkansas
for banks, bank holding companies, and corporations, and applicable rules and
regulations promulgated thereunder and in accordance with sound business
practices. The minute books of HBI and its Subsidiaries contains accurate and
complete records in all Material respects of all meetings held of, and corporate
action taken by, the shareholders, the Board of Directors and committees of the
Board of Directors of Company (as applicable), and no meeting of any such
shareholders, Board of Directors or committee has been held for which minutes
have not been prepared and are not contained in such minute books.
(Y) NO FURTHER ACTION. HBI and its Subsidiaries have taken all action
so that the entering into of this Plan and the consummation of the transactions
contemplated by this Plan, or any other action or combination of actions, or any
other transactions, contemplated by this Plan do not and will not (1) require a
vote of shareholders (other than as set forth in Section 6.1), or (2) result in
the grant of any rights to any Person under the Governing Documents of HBI or
any of its Subsidiaries or under any agreement to which HBI or any of its
Subsidiaries is a party, or (3) restrict or impair in any way the ability of the
Parties to exercise the rights granted under this Plan.
(Z) ENVIRONMENTAL MATTERS.
(1) To HBI's Knowledge, the Participation Facilities and the
Loan/Fiduciary Properties are, and have been, in compliance with all
Environmental Laws, except as disclosed on Schedule 4.2(Z)(1).
(2) There is no investigation or proceeding pending or, to HBI's
Knowledge, threatened by or before any court, governmental agency or board
or other forum in which HBI or any of its Subsidiaries or any Participation
Facility has been, or with respect to threatened investigations or
proceedings, reasonably would be expected to be, named as a defendant or
potentially responsible party (a) for alleged noncompliance (including by
any predecessor) with any Environmental Law, or (b) relating to the release
or threatened release into the environment of any Hazardous Material,
whether or not occurring at or on a site owned, leased or operated by HBI
or any of its Subsidiaries or any Participation Facility, except as
disclosed in Schedule 4.2(Z)(2).
(3) There is no investigation or proceeding pending or, to HBI's
Knowledge, threatened by or before any court, governmental agency or board
or other forum in which any Loan/Fiduciary Property (or HBI or any of its
Subsidiaries in respect of any Loan/Fiduciary Property) has been, or with
respect to threatened investigations or proceedings, reasonably would be
expected to be, named as a defendant or potentially
31
responsible party (a) for alleged noncompliance (including by any
predecessor) with any Environmental Law, or (b) relating to the release or
threatened release into the environment of any Hazardous Material, whether
or not occurring at or on a Loan/Fiduciary Property, except for such
investigations or proceedings disclosed in Schedule 4.2(Z)(3).
(4) To HBI's Knowledge, there is no reasonable basis for any
investigation or proceeding of a type described in subparagraph (2) or (3)
of this paragraph (Z), except as has been disclosed in Schedule 4.2(Z)(4).
(5) To HBI's Knowledge, and except as disclosed on Schedule
4.2(Z)(5), during the period of (a) ownership or operation by HBI of any of
its current properties, (b) participation in the management of any
Participation Facility by HBI or any of its Subsidiaries, or (c) holding of
a security or other interest in a Loan/Fiduciary Property by HBI or any of
its Subsidiaries, there have been no releases of Hazardous Material in, on,
under or affecting any such property, Participation Facility or
Loan/Fiduciary Property that violate Environmental Laws.
(6) To HBI's Knowledge, and except as disclosed on Schedule
4.2(Z)(6), prior to the period of (a) ownership or operation by HBI or any
of its Subsidiaries of any of its current properties, (b) participation in
the management of any Participation Facility by HBI or any of its
Subsidiaries, or (c) holding of a security or other interest in a
Loan/Fiduciary Property by HBI or any of its Subsidiaries, there were no
releases of Hazardous Material in, on, under or affecting any such
property, Participation Facility or Loan Fiduciary Property.
(7) To HBI's Knowledge, no underground storage tanks are located
on any property of HBI or any of its Subsidiaries, or any Participation
Facility or any Loan/Fiduciary Property except as disclosed in Schedule
4.2(Z)(7).
(8) To HBI's Knowledge, and except as disclosed in Schedule
4.2(Z)(8), neither HBI's nor any of its Subsidiaries' facilities have any
building components containing friable asbestos.
(AA) TAX RETURNS. Except as disclosed in Schedule 4.2(AA), (1) all Tax
Returns of HBI have been duly filed, or requests for extensions have been timely
filed and have not expired, for periods ended on or prior to the most recent
fiscal year-end, and such Tax Returns were true, complete and accurate in all
Material respects, (2) all Taxes shown to be due on the Tax Returns have been
paid in full, (3) the Tax Returns have been examined by the Internal Revenue
Service or the appropriate state, local or foreign taxing authority, or the
period for assessment of the Taxes in respect of which such Tax Returns were
required to be filed has expired, (4) all Taxes due with respect to completed
and settled examinations have been paid in full, (5) no issues have been raised
by the relevant taxing authority in connection with the examination of any of
the Tax Returns which are reasonably likely, individually or in the aggregate,
to result in a determination that would have a Material effect on HBI or any of
its Subsidiaries, except as reserved against in the Financial Reports of HBI,
and (6) no waivers of
32
statutes of limitations (excluding such statutes that relate to years under
examination by the Internal Revenue Service) have been given by or requested
with respect to any Taxes of HBI.
(BB) ACCURACY OF INFORMATION. The statements with respect to HBI and
its Subsidiaries contained in this Plan, the Schedules and any other written
documents executed and delivered by or on behalf of HBI pursuant to the terms of
or relating to this Plan are now and as of the Effective Date true and correct
in all Material respects, and such statements and documents do not omit any
Material fact necessary to make the statements contained therein, in light of
the circumstances under which they were made, now and as of the Effective Date,
not misleading.
(CC) DERIVATIVES CONTRACTS. None of HBI or its Subsidiaries is a party
to, has not agreed to enter into a Derivatives Contract, and does not own
securities that are referred to as "structured notes" except for those
Derivatives Contracts and structured notes disclosed in Schedule 4.2(CC).
Schedule 4.2(CC) includes a list of any assets of HBI or its Subsidiaries that
are pledged as security for each such Derivatives Contract.
(DD) ACCOUNTING CONTROLS. HBI and its Subsidiaries have devised and
maintain a system of internal accounting controls sufficient to provide
reasonable assurances that (1) all Material transactions are executed in
accordance with management's general or specific authorization, (2) all Material
transactions are recorded as necessary to permit the preparation of financial
statements in conformity with GAAP, and to maintain proper accountability for
items, (3) access to the Material property and assets of HBI and its
Subsidiaries is permitted only in accordance with management's general or
specific authorization, and (4) the recorded accountability for items is
compared with the actual levels at reasonable intervals and appropriate action
is taken with respect to any differences.
(EE) COMMITMENTS AND CONTRACTS. Neither HBI nor any of its
Subsidiaries is a party or subject to any of the following (whether written or
oral, express or implied):
(1) except as disclosed in Schedule 4.2(EE)(1), any employment
contract or understanding (including any understandings or obligations with
respect to severance or termination pay Liabilities or fringe benefits)
with any present or former officer, director or employee (other than those
which are terminable at will by HBI without any obligation on the part of
HBI or any such Subsidiary to make any payment in connection with such
termination);
(2) except as disclosed in Schedule 4.2(EE)(2), any Contract,
commitment, or understanding with any Person related to or under the
Control of any present or former officer, director, or employee of HBI or
any of its Subsidiaries, to the extent that such Contract, commitment or
understanding Materially impacts the financial condition of HBI.
(3) except as disclosed in Schedule 4.2(EE)(3), any real or
personal property lease with annual rental payments aggregating $20,000 or
more; or
33
(4) except as disclosed in Schedule 4.2(EE)(4), any Material
Contract with any Affiliate.
(FF) CLAIMS OF OFFICERS, DIRECTORS, AND EMPLOYEES. Except as disclosed
on Schedule 4.2(FF) to HBI's Knowledge, no officer or director of HBI or any of
its Subsidiaries has any claims against HBI or its Subsidiaries, other than for
their regular accrued but unpaid salary and/or director's fee. Except as
disclosed on Schedule 4.2(FF), there are no outstanding or, to HBI's Knowledge,
potential claims by a present or former employee against HBI or any of its
Subsidiaries under federal or state law, under any employment agreement, or
otherwise, other than for wages, salary, or overtime pay owed in respect of the
current pay period, or vacation or sick pay or time off owed in respect of the
current fiscal year.
ARTICLE V. COVENANTS
TCB hereby covenants to HBI, and HBI hereby covenants to TCB, as
applicable, that:
5.1. BEST EFFORTS. Subject to the terms and conditions of this Plan, each
Party shall use its commercially reasonable best efforts in good faith to take,
or cause to be taken, all actions, and to do, or cause to be done, all things
necessary, proper or desirable, or advisable under applicable laws, so as to
permit consummation of the Merger by March 31, 2005 (the "Termination Date"),
and otherwise to enable consummation of the transactions contemplated by this
Plan, and shall cooperate fully with the other Parties to that end (it being
understood that a re-solicitation of proxies as a consequence of an HBI
Transaction shall not violate this covenant).
5.2. CORPORATE ACTIONS.
(A) SHAREHOLDER VOTE. Each of TCB and HBI shall use their commercially
reasonable best efforts to solicit and obtain votes of the holders of their
common stock in favor of their respective transactions contemplated by this Plan
and, subject to the exercise of their fiduciary duties, the Board of Directors
of TCB and HBI shall recommend approval of such transactions by such holders.
TCB and HBI shall call a special meeting of the holders of TCB Common Stock and
HBI Common Stock, respectively, to be held as soon as practicable for purposes
of voting upon the transactions contemplated by this Plan (including the
Merger).
(B) THE PROXY. TCB and HBI shall promptly assist each other in the
preparation of a combination proxy statement and offering circular (the "Proxy
Statement") to be mailed to the holders of TCB Common Stock and HBI Common Stock
in connection with the transactions contemplated by this Plan, which shall
conform to all applicable legal requirements, and include relevant disclosure to
TCB shareholders with regard to HBI as required by applicable securities laws
for the offering of HBI Common Stock.
5.3. SECURITIES LAW COMPLIANCE. HBI shall comply with all applicable
federal and state securities laws with regard to the offering, sale, and
issuance of the HBI Common Stock.
34
5.4. PUBLICITY. The Parties agree that (a) no communication of any kind,
whether written, electronic, or oral, to the shareholders of TCB or HBI or
otherwise regarding the Plan, including but not limited to, proxy statements and
prospectuses, shall be made without the express prior written consent of the
authorized officers of HBI and TCB, and (b) the contents of any such
communication shall conform in all respects, whether written, electronic or
oral, to the language agreed upon between the Parties; provided, however, if HBI
is required by federal or state securities laws or otherwise to make disclosure
of certain matters or take other action which would otherwise be covered by the
terms of this section, it may make such disclosure or communication without the
express prior written consent of TCB, after first giving TCB what HBI, in the
exercise of its judgment, determines to be reasonable notice of such disclosure
or communication.
5.5. ACCESS; INFORMATION; CONFIDENTIALITY.
(A) Upon reasonable notice, a Party (the "Disclosing Party") shall
afford the other Party (the "Receiving Party") and its officers, employees,
counsel, accountants and other authorized representatives, access, during normal
business hours throughout the period up to the Effective Date, to all of the
properties, books, contracts, documents, loan files, commitments, records, and
any other information of or relating to the Disclosing Party or its
Subsidiaries.
(B) A Receiving Party and its respective agents, attorneys and
accountants will maintain the confidentiality of all information provided in
connection herewith which has not been publicly disclosed, and shall not use any
information obtained pursuant to this Plan for any purpose unrelated to the
consummation of the transactions contemplated by this Plan. If this Plan is
terminated, each Receiving Party will hold all confidential information and
documents obtained pursuant to this paragraph in confidence unless and until
such information or documents becomes publicly available other than by reason of
any action or failure to act by a Receiving Party or as such Receiving Party is
advised by counsel that any such information or document is required by law to
be disclosed. In the event of the termination of this Plan, a Receiving Party
will, upon request by a Disclosing Party, deliver to the Disclosing Party all
documents so obtained by the Receiving Party or destroy such documents and, in
the case of destruction, will certify such fact to the Disclosing Party.
(C) A Disclosing Party shall furnish promptly (and cause its
accountants and other agents to furnish promptly) to a Receiving Party a copy of
each Material report, schedule and other document filed by a Disclosing Party
with any Regulatory Authority or other governmental authority, and upon
reasonable notice given by a Receiving Party, any other information regarding
the business, properties, and personnel of a Disclosing Party as Receiving Party
may reasonably request, provided that no investigation pursuant to this Section
5.5 shall affect or be deemed to modify or waive any representation or warranty
made by a Disclosing Party in this Plan or the conditions to the obligations of
a Disclosing Party to consummate the transactions contemplated by this Plan.
(D) During the period from the date of this Plan to the Effective
Date, each Party shall cause its representatives to, confer on a regular and
frequent basis with representatives of the other Party.
35
(E) Each Party shall promptly notify the other Party of (1) any
Material change in the business or operations of it or its Subsidiaries, (2) any
Material complaints, investigations or hearings (or communications indicating
that the same may be contemplated) of any Regulatory Authority or other
governmental authority relating to it, or as applicable its Subsidiaries, (3)
the initiation or threat of Material litigation involving or relating to it or
its Subsidiaries, or (4) any Material event or condition.
5.6. SOLE AGREEMENT TO SELL. Without the prior written consent of HBI, TCB
shall not, and it shall cause its Subsidiaries not to, solicit, initiate or
encourage inquiries or proposals with respect to, or furnish any nonpublic
information relating to or participate in any negotiations or discussions
concerning, any acquisition or purchase of all or a substantial portion of the
assets of, or a substantial equity interest in, TCB or any of its Subsidiaries
or any merger or other business combination with TCB or any of its Subsidiaries
other than as contemplated by this Plan. TCB shall instruct its and its
Subsidiaries' officers, directors, agents, advisors and Affiliates to refrain
from doing any of the foregoing and shall notify HBI immediately if any such
inquiries or proposals are received by, or any such negotiations or discussions
are sought to be initiated with, TCB or any of its Subsidiaries. The Parties
agree that a breach of this provision by TCB shall be deemed a Material breach
of this Agreement, regardless of whether such action was taken pursuant to the
fiduciary duty of TCB's Board of Directors or otherwise, for which HBI may seek
injunctive relief or terminate this Agreement pursuant to Section 7.2, and seek
monetary relief for damages from TCB. TCB expressly agrees not to assert or
impose any defense to such breach of this Agreement based on the exercise of its
fiduciary duty.
5.7. HBI COMMON STOCK ADJUSTMENTS. In the event that HBI changes the number
of shares of HBI Common Stock issued and authorized prior to Effective Date of
this Plan as a result of a stock split, stock dividend, or similar transaction
with respect to the outstanding HBI Common Stock, the amount of HBI Common Stock
to be issued to a holder of TCB Common Stock hereunder shall be adjusted
accordingly.
5.8. NO RIGHTS TRIGGERED. Except for those consents of Third Parties
disclosed on Schedule 4.1(G), TCB and HBI shall take all necessary steps to
ensure that the entering into of this Plan and the consummation of the
transactions contemplated by this Plan (including the Merger) and any other
action or combination of actions, or any other transactions contemplated by this
Plan, do not and will not (A) result in the grant of any Rights to any Person
under their respective Governing Documents or under any agreement to which TCB
or any of its Subsidiaries or HBI, respectively, is a party, or (B) restrict or
impair in any way the ability of HBI or TCB, respectively, to exercise the
rights granted under this Plan.
5.9. REGULATORY APPLICATIONS. HBI shall (A) promptly prepare and submit
applications to the appropriate Regulatory Authorities for approval of the
Merger, and (B) promptly make all other appropriate filings to secure all other
approvals, consents and rulings that are necessary for the consummation of the
Merger by HBI and TCB.
5.10. REGULATORY DIVESTITURES. No later than the Effective Date, TCB shall
cease engaging in such activities as HBI shall advise TCB in writing is not
permitted to be engaged in by HBI under applicable law following the Effective
Date and, to the extent required
36
by any Regulatory Authority as a condition of approval of the transactions
contemplated by this Plan, TCB shall divest any Subsidiary engaged in activities
or holding assets that are impermissible for HBI, on terms and conditions agreed
to by HBI, as applicable; provided, however, that prior to TCB taking such
action, HBI shall certify that the conditions to its obligations under Sections
6.1 and 6.2 to consummate the transactions contemplated by this Plan have been
satisfied or waived.
5.11. DIRECTOR AND OFFICER LIABILITY INSURANCE. Prior to the Effective
Date, TCB may obtain and prepay "tail" coverage on director and officer
liability insurance for a period of three (3) years following the Effective
Date, with policy limits not in excess of $2,000,000 per occurrence, on each
person serving as an officer or director of TCB and each TCB Subsidiary
immediately prior to the Effective Date against all damages, Liabilities,
judgments, and claims (and related expenses, including reasonable attorney fees
and amounts paid in settlement) with respect to acts or omissions of such
officers and directors based upon or arising from his or her capacity as an
officer or director of TCB or a TCB Subsidiary, occurring on or prior to the
Effective Date.
ARTICLE VI. CONDITIONS TO CONSUMMATION OF THE MERGER
6.1. CONDITIONS TO EACH PARTY'S OBLIGATIONS. The obligation of each Party
to effect the transactions contemplated hereby shall be subject to the
fulfillment, at or prior to the Effective Date, of the following conditions:
(A) SHAREHOLDER VOTE. The shareholders of TCB and the shareholders of
HBI shall have approved of the transactions contemplated herein (including
approval of the Merger).
(B) REGULATORY APPROVALS. The Parties shall have procured all
necessary regulatory consents and approvals by the appropriate Regulatory
Authorities, and any waiting periods relating thereto shall have expired;
provided, however, that no such approval or consent shall have imposed any
condition or requirement not normally imposed in such transactions that, in the
opinion of HBI, would deprive HBI of the Material economic or business benefits
of the transactions contemplated by this Plan.
(C) NO PENDING OR THREATENED CLAIMS. No claim, action, suit,
investigation or other proceeding shall be pending or threatened before any
court or governmental agency which presents a Material risk of the restraint or
the prohibition of the transactions contemplated by this Plan or the obtaining
of Material damages or other relief in connection therewith.
(D) NO INJUNCTION. There shall not be in effect any order, decree or
injunction of any court or agency of competent jurisdiction that enjoins or
prohibits consummation of any of the transactions contemplated by this Plan.
(E) TAX OPINION. HBI and TCB shall have received an opinion from
Mitchell, Williams, Xxxxx, Xxxxx & Xxxxxxxx, P.L.L.C. in the form of EXHIBIT B
to the effect that (1) the Merger constitutes a reorganization under Section 368
of the Code, and (2) no gain or
37
loss will be recognized by shareholders of TCB to the extent they receive
shares of HBI Common Stock in exchange for their shares of TCB Common Stock,
except that gain or loss may be recognized as to cash received in lieu of
fractional share interests. In rendering their opinion, they may require and
rely upon representations contained in certificates of officers of HBI, TCB and
others.
6.2. CONDITIONS TO OBLIGATIONS OF HBI. Unless waived in writing by HBI, the
obligations of HBI to consummate the transactions contemplated by this Plan are
subject to the satisfaction at or prior to the Effective Date of the following
conditions:
(A) PERFORMANCE. Each of the acts, undertakings, and covenants and
other agreements of TCB to be performed at or before the Effective Date shall
have been duly performed, and TCB shall not have breached any of the
representations, warranties, covenants, and other agreements set forth herein.
(B) REPRESENTATIONS AND WARRANTIES. The representations and warranties
of TCB contained in this Plan shall be true and correct, in all Material
respects, on and as of the Effective Date with the same effect as though made on
and at the Effective Date, except for any such representations and warranties
that specifically relate to an earlier date, which shall be true and correct as
of such earlier date.
(C) OFFICER'S CERTIFICATE. In addition to the documents described
elsewhere in this Plan, HBI shall have received the following documents and
instruments:
(i) A certificate signed by the Secretary or Assistant Secretary
of TCB certifying that: (A) TCB's board of directors and shareholders
have duly adopted resolutions (copies of which shall be attached to
such certificate) approving the substantive terms of this Plan and
authorizing the consummation of the transactions contemplated by this
Plan and certifying that such resolutions have not been amended and
remain in full force and effect; (B) each person executing this Plan
on behalf of TCB is an officer of TCB, holding the office or offices
specified therein, with full power and authority to execute this Plan
and any and all other documents in connection with the Plan, and the
signature of each person on such documents is his or her genuine
signature; and (C) the Governing Documents of TCB (copies of which
shall be attached to such certificate) remain in full force and
effect; and
(ii) A certificate signed by the President of TCB dated the
Effective Date stating that the conditions set forth in Sections
6.2(A); 6.2(B) and 6.2(E) of this Plan have been satisfied as of the
Effective Date.
(D) LEGAL OPINION. HBI shall have received a legal opinion, dated the
Effective Date, from Hilburn, Calhoon, Xxxxxx, Xxxxxxxx & Xxxxxxx, Ltd., in
substantially the form of EXHIBIT C.
(E) NO MATERIAL CHANGE. During the period from September 30, 2004 to
the Effective Date, no Material change in the business, property, assets
(including the quality
38
and value of the loan portfolios and investments), Liabilities, prospects,
operations, liquidity, income or condition (financial or otherwise) of TCB
and/or Twin City shall have occurred, except for any divestitures required by
Section 5.10.
(F) DESTRUCTION OF PROPERTY. Between the date of this Plan and the
Effective Date, there shall have been no damage to or destruction of real
property, improvements or personal property of TCB and Twin City which
Materially reduces the market value of such property, and no zoning or other
order, limitation or restriction imposed against the same that might have a
Material impact upon the operations, business, future operations, or prospects
of TCB and Twin City; provided, however, that the availability of insurance
coverage may be taken into account in determining whether there has been such a
Material impact or Material reduction in market value.
(G) OTHER BUSINESS COMBINATIONS, ETC. Other than as contemplated
hereunder, subsequent to the date of this Plan, neither TCB nor Twin City shall
have entered into any agreement, letter of intent, understanding or other
arrangement pursuant to which TCB and Twin City would merge, consolidate with,
effect a business combination with, or sell any substantial part of TCB's or
Twin City's assets; acquire a significant part of the share of assets of any
other person or entity (financial or otherwise); or adopt any "poison pill" or
other type of anti-takeover arrangement, any shareholder rights provision, or
any "golden parachute" or similar program which would have the effect of
Materially decreasing the value of TCB and Twin City or the benefits of
acquiring TCB Common Stock.
(H) MAINTENANCE OF CERTAIN COVENANTS. At the Effective Date:
(i) neither TCB nor Twin City shall have issued or repurchased
from the date hereof any additional equity or debt securities, or any
rights to purchase or repurchase such securities (therefore, there
shall be not more than the number of shares of TCB Common Stock and
TCB Options set forth in the Recitals of this Plan validly issued and
outstanding at the Effective Date); and
(ii) from September 30, 2004, there shall have been no
extraordinary sale of assets by TCB or Twin City; and
(I) NO LITIGATION. No action, suit, or other proceeding before any
court or any governmental authority pertaining to the transactions contemplated
by this Plan or against TCB or any of its subsidiaries or Materially affecting
TCB or any of its Subsidiaries shall have been instituted or threatened on or
before the Effective Date.
(J) FAIRNESS OPINION. HBI shall have received, within 15 Business Days
from the execution of this Agreement, an opinion from Xxxxxx, Xxxxxxxx & Co.,
St. Louis, Missouri, to the effect that the financial terms of the Merger are
fair from a financial point of view to HBI shareholders. Such opinion shall be
updated prior to the mailing of the Proxy Statement to HBI's shareholders and
shall not have been withdrawn prior to the Effective Date.
39
6.3. CONDITIONS TO OBLIGATIONS OF TCB. Unless waived in writing by TCB, the
obligations of TCB to consummate the transactions contemplated by this Plan are
subject to the satisfaction of TCB at or prior to the Effective Date of the
following conditions:
(A) PERFORMANCE. Each of the acts, undertakings, and covenants of HBI
to be performed at or before the Effective Date shall have been duly performed,
and HBI shall not have breached any of its representations, warranties,
covenants, and other agreements set forth herein.
(B) REPRESENTATIONS AND WARRANTIES. The representations and warranties
of HBI contained in this Plan shall be true and correct, in all Material
respects, on and as of the Effective Date with the same effect as though made on
and at the Effective Date, except for any such representations and warranties
that specifically relate to an earlier date, which shall be true and correct as
of such earlier date.
(C) OFFICER'S CERTIFICATE. In addition to the documents described
elsewhere in this Plan, TCB shall have received the following documents and
instruments:
(i) A certificate signed by the Secretary or Assistant Secretary
of HBI certifying that: (A) HBI's board of directors and shareholders
have duly adopted resolutions (copies of which shall be attached to
such certificate) approving the substantive terms of this Plan and
authorizing the consummation of the transactions contemplated by this
Plan and certifying that such resolutions have not been amended and
remain in full force and effect; (B) each person executing this Plan
on behalf of HBI is an officer of HBI, holding the office or offices
specified therein, with full power and authority to execute this Plan
and any and all other documents in connection with the Plan, and the
signature of each person on such documents is his or her genuine
signature; and (C) the Governing Documents of HBI (copies of which
shall be attached to such certificate) remain in full force and
effect; and
(ii) A certificate signed by the President of HBI dated the
Effective Date stating that the conditions set forth in Sections
6.3(A); 6.3(B) and 6.3(E) of this Plan have been satisfied as of the
Effective Date.
(D) LEGAL OPINION. TCB shall have received a legal opinion, dated the
Effective Date, from Mitchell, Williams, Xxxxx, Xxxxx & Xxxxxxxx, P.L.L.C., in
substantially the form of Exhibit D.
(E) NO MATERIAL CHANGE. During the period from September 30, 2004 to
the Effective Date, no Material change in the business, property, assets
(including the quality and value of the loan portfolios and investments),
Liabilities, prospects, operations, liquidity, income or condition (financial or
otherwise) of HBI shall have occurred.
(F) FAIRNESS OPINION. TCB shall have received, within fifteen (15)
Business Days from the execution of this Agreement, an opinion of Xxxxxx
Capital, Memphis, Tennessee, to the effect that the financial terms of the
Merger are fair from a financial point of
40
view to TCB's shareholders. Such opinion shall be updated prior to the mailing
of the Proxy Statement to TCB's shareholders and shall not have been withdrawn
prior to the Effective Date.
ARTICLE VII. TERMINATION
7.1. TERMINATION UPON CERTAIN CONDITIONS. In the event of the termination
or abandonment of this Plan pursuant to the provisions of Section 7.1, this Plan
shall become void and have no force or effect, without any liability on the part
of the Parties or any of their respective directors or officers or shareholders
with respect to this Plan. This Plan may be terminated prior to the Effective
Date, either before or after receipt of required shareholder approvals, under
the following conditions:
(A) MUTUAL CONSENT. By the mutual consent of HBI and TCB, if the Board
of Directors of each so determines by vote of a majority of the members of its
entire board.
(B) DELAY. By HBI or TCB in the event the Merger is not consummated by
the Termination Date, unless the failure of the consummation of the transactions
to occur shall be due to the failure of the Party seeking to terminate this Plan
to perform its obligations hereunder in a timely manner; provided, however, that
HBI may not terminate the Plan pursuant to this Section 7.2(B), if such delay
results from the resolicitation of proxies as a consequence of an HBI
Transaction, or any other acquisition or sale transaction, or any offering of
securities, in which HBI is involved, or (b) a change in the method of
acquisition pursuant to Section 2.4, and provided, further, that a Party may not
terminate the Plan pursuant to this Section 7.1(B) if it is in Material breach
of any of the provisions of the Plan.
(C) NO FAIRNESS OPINION. By TCB or HBI, respectively, in the event the
fairness opinion respectively described in Section 6.3(F) or 6.2(J) is not
provided; provided, however, that TCB or HBI may not terminate the Plan pursuant
to this Section 7.1(C) unless it has used its commercially reasonable best
efforts to obtain such opinion in a timely manner.
(D) NO REGULATORY APPROVALS. By TCB or HBI, in the event that, absent
the Material breach of a Party, any of the required regulatory approvals set
forth in Section 6.1(B) are denied (or should any such required approval be
conditioned upon a substantial deviation from the transactions contemplated);
provided however, that either Party may extend the term of this Plan for a sixty
(60) day period to prosecute diligently and overturn such denial provided that
such denial has been appealed within fourteen (14) Business Days of the receipt
thereof.
7.2. TERMINATION FOR BREACH. This Plan may be terminated prior to the
Effective Date, either before or after receipt of required shareholder
approvals, by HBI or TCB if there has been a Material breach on the part of the
other Party of its representations, warranties, covenants, or other agreements
set forth herein or in any Schedule or certificate delivered pursuant hereto.
The non-breaching Party or Parties expressly reserve all rights and remedies
available in law or equity if this Agreement is terminated for breach.
41
ARTICLE VIII. OTHER MATTERS
8.1. SURVIVAL. Only the representations, warranties, covenants, or other
agreements contained in Articles I and II of this Plan shall survive the
Effective Date, regardless of whether a provision specifically states that such
provision survives. If the Merger is abandoned and this Plan is terminated, the
agreements of the Parties in Sections 7.1, 8.5, 8.6, and 8.13 shall survive such
abandonment and termination.
8.2. WAIVER; AMENDMENT. Prior to the Effective Date, any provision of this
Plan may be (A) waived in writing by the Party benefited by the provision, or
(B) amended or modified at any time (including the structure of the transactions
contemplated by this Plan) by an agreement in writing among the Parties approved
by their respective Boards of Directors and executed in the same manner as this
Plan, except that, after the vote by the shareholders of TCB, the consideration
to be received by the shareholders of TCB for each share of TCB Common Stock
shall not thereby be altered. Nothing contained in this Section 8.2 is intended
to modify HBI'S rights pursuant to Section 2.4.
8.3. COUNTERPARTS. This Plan may be executed in one or more facsimile
counterparts, each of which shall be deemed to constitute an original. This Plan
shall become effective when one counterpart has been signed by each Party.
8.4. GOVERNING LAW. This Plan shall be governed by, and interpreted in
accordance with, the laws of the State of Arkansas, except as federal law may be
applicable.
8.5. EXPENSES. Each Party will bear all expenses incurred by it in
connection with this Plan and the transactions contemplated by this Plan, except
printing and mailing expenses which shall be shared equally between TCB and HBI.
8.6. CONFIDENTIALITY. Each of the Parties and their respective agents,
attorneys and accountants will maintain the confidentiality of all information
provided in connection herewith which has not been publicly disclosed.
8.7. NOTICES. All notices, demands, and requests given or required to be
given by either Party to another Party shall be in writing. All such notices,
demands, and requests shall be deemed to have been properly given if served in
person, sent by telefacsimile (and receipt confirmed) or by prepaid nationally
recognized overnight delivery service providing proof of delivery, addressed as
follows:
If to HBI: HOME BANCSHARES, INC.
000 Xxxxxxxxx, Xxxxx 000
Xxxxxx, Xxxxxxxx 00000
Attn: Xxx Xxxxxxxx, President
Fax: 000-000-0000
With a copy to: Mitchell, Williams, Xxxxx, Xxxxx & Xxxxxxxx,
P.L.L.C.
000 X. Xxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxx Xxxx, Xxxxxxxx 00000
42
Attn: Xxxx X. Xxxxx, Esq.
Fax: 000-000-0000
If to TCB or Twin City, to: TCBANCORP, INC.
0000 Xxxxxxxx Xxxxxxx Xxxxx
Xxxxx Xxxxxx Xxxx, Xxxxxxxx 00000
Attn: Xxx Xxxxx, President
Fax: 000-000-0000
With a copy to: Hillburn, Calhoon, Harper, Pruniski &
Xxxxxxx, Ltd.
Xxx Xxxxxxxxxx Xxxxx, Xxxxx 000
X.X. Xxx 0000
Xxxxx Xxxxxx Xxxx, Xxxxxxxx 00000
Attn: Xxxx X. Xxxxxxxx, III
Fax: 000-000-0000
Notices, demands and requests sent pursuant to this section shall be deemed
to be received if received by telefacsimile (and receipt confirmed) or by
person, on the date of delivery and if sent by prepaid overnight delivery
service, on the next Business Day.
8.8. TIME IS OF THE ESSENCE. The Parties hereto agree that time is of the
essence with respect to the Effective Date and each and every condition and
covenant contained herein.
8.9. ASSIGNMENT. The assignment of this Plan by any Party without the
express written consent of the other Parties hereto shall be void.
8.10. BINDING EFFECT. This Agreement shall be binding upon the Parties and
their respective successors and assigns.
8.11. SEVERABILITY. The holding of any provision of this Plan invalid,
illegal, or unenforceable, in whole or in part, shall not affect the other
provisions of this Plan, which shall remain in full force and effect.
8.12. ENTIRE UNDERSTANDING; NO THIRD PARTY BENEFICIARIES. This Plan
represents the entire understanding of the Parties with reference to
transactions contemplated by this Plan and supersedes any and all other oral or
written agreements previously made. Nothing in this Plan, expressed or implied,
is intended to confer upon any Person other than the Parties any rights,
remedies, obligations or Liabilities under or by reason of this Plan.
8.13. ENFORCEMENT PROCEEDINGS. The Parties hereto agree that irreparable
damage would occur in the event that any of the provisions of this Plan were not
performed in accordance with their specific terms or were otherwise breached. It
is accordingly agreed that the Parties shall be entitled to an injunction or
injunctions to prevent breaches of this Plan and to enforce specifically the
terms and provisions hereof in any court of the United States or any state
having jurisdiction, this being in addition to any other remedy to which they
are entitled at law
43
or in equity. In any action or proceeding in connection with the enforcement of
this Plan, the prevailing Party will be entitled to reimbursement of its
reasonable attorneys' fees and expenses from the non-prevailing Party.
8.14. BENEFIT PLANS. Upon consummation of the Merger, all employees of TCB
and its Subsidiaries, except those with whom HBI enters into written employment
agreements, shall be deemed to be at-will employees of HBI. From and after the
Effective Date, employees of TCB and its Subsidiaries shall be entitled to
participate in the pension, employee benefit and similar plans (including stock
option, bonus or other incentive plans) on substantially the same terms and
conditions as similarly situated employees of HBI. With the exception of stock
option plans, where participation will be based upon years of service at HBI for
the purpose of determining eligibility to participate in such plans and the
vesting of benefits under such plans, HBI shall give effect to years of service
with TCB or TCB's Subsidiaries, as the case may be, as if such service were with
HBI. Employees of TCB and its Subsidiaries will be entitled to carry over unused
vacation days and sick leave accrued as of the Effective Date.
8.15. HEADINGS. The headings contained in this Plan are for reference
purposes only and are not part of this Plan.
(Signatures on page following.)
44
IN WITNESS WHEREOF, the Parties have caused this instrument to be executed
in counterparts by their duly authorized officers, all as of the day and year
first above written.
TCBANCORP, INC.
By: /s/ XXX XXXXX
-----------------------------------------
Printed Name: Xxx Xxxxx
Title: President
HOME BANCSHARES, INC.
By: /s/ XXX XXXXXXXX
-----------------------------------------
Printed Name: Xxx Xxxxxxxx
Title: President
45
EXHIBITS
Exhibit A Articles of Merger
Exhibit B Tax Opinion of Mitchell, Williams, Xxxxx, Xxxxx & Xxxxxxxx, P.L.L.C.
Exhibit C Legal Opinion of Hillburn, Calhoon, Harper, Pruniski & Xxxxxxx, Ltd.
Exhibit D Legal Opinion of Mitchell, Williams, Xxxxx, Gates & Xxxxxxxx,
P.L.L.C.
Appendix 1, Page A-1
SCHEDULES OF TCB
Schedule 2.5 TCB Option to Purchase Outstanding and Unexercised TCB
Common Stock
Schedule 4.1(B) Jurisdictions Where TCB and its Subsidiaries are Qualified
to do Business; Orders, etc. Affecting Status
Schedule 4.1(C) Shares Outstanding
Schedule 4.1(D) TCB Subsidiaries
Schedule 4.1(G) No Defaults - Agreements Requiring Third Party Consent
Schedule 4.1(H) TCB Financial Reports
Schedule 4.1(I) Undisclosed Liabilities of TCB
Schedule 4.1(J) No Events Causing Material Adverse Effect
Schedule 4.1(K) Properties: Leases, Subleases, Defects of Title or
Condition
Schedule 4.1(L) Intellectual Property Rights
Schedule 4.1(M) Litigation, Regulatory Action
Schedule 4.1(N) Compliance with Laws
Schedule 4.1(O) Material Contracts
Schedule 4.1(Q) Brokers and Finders
Schedule 4.1(R)(1) List of Employee Benefit Plans
Schedule 4.1(R)(2) Employee Benefit Plans Not Qualified Under ERISA
Schedule 4.1(R)(4) Pension Accumulated Funding Deficiency
Schedule 4.1(R)(5) Amount by Which Benefit Liabilities Exceed Plan Assets
Schedule 4.1(R)(6) Obligations for Retiree Health and Life Benefits
Schedule 4.1(R)(7) Agreements Resulting in Payments to Employees Under Any
Compensation and Benefit Plan with Respect to Proposed
Transaction
Schedule 4.1(U) Asset Classification
Schedule 4.1(V) Inadequate Allowance for Loan Losses
Schedule 4.1(W) Insurance
Schedule 4.1(Z)(1) Noncompliance with Environmental Laws
Schedule 4.1(Z)(2) Pending Proceedings with Respect to Environmental Matters
Schedule 4.1(Z)(3) Pending Proceedings with Respect to Environmental Matters
Involving Loan/Fiduciary Property
Schedule 4.1(Z)(4) Pending Proceedings with Respect to Environmental Matters
Listed in Sections 4.1(Z)(2) or (3)
Schedule 4.1(Z)(5) Releases of Hazardous Material During Ownership
Schedule 4.1(Z)(6) Releases of Hazardous Material Prior to Ownership
Schedule 4.1(Z)(7) Underground Storage Tanks
Schedule 4.1(Z)(8) Building Components with Friable Asbestos
Schedule 4.1(AA) Tax Return Matters
Schedule 4.1(CC) Derivative Contracts, including a list of any assets
pledged as security for such Derivative Contracts
Schedule 4.1(EE)(1) Employment Contracts Requiring Payment In Connection with
Termination
Schedule 4.1(EE)(2) Contracts with Related Persons
Schedule 4.1(EE)(3) Leases with Aggregate Annual Rent Exceeding $20,000
Schedule 4.1(EE)(4) Material Contracts with Affiliates
Schedule 4.1(FF) Claims of Officers, Directors, Employees
SCHEDULES OF HBI
Schedule 4.2(B) Jurisdictions Where HBI and its Subsidiaries are Qualified
to do Business; Orders, etc. Affecting Status
Schedule 4.2(C) Shares Outstanding
Schedule 4.2(D) HBI Subsidiaries
Schedule 4.2(G) No Defaults - Agreements Requiring Third Party Consent
Schedule 4.2(H) HBI Financial Reports
Schedule 4.2(I) Undisclosed Liabilities of HBI
Schedule 4.2(J) No Events Causing Material Effect
Schedule 4.2(K) Properties: Leases, Subleases, Defects of Title or
Condition
Schedule 4.2(L) Intellectual Property Rights
Schedule 4.2(M) Litigation, Regulatory Action
Schedule 4.2(N) Compliance with Laws
Schedule 4.2(O) Material Contracts
Schedule 4.2(Q) Brokers and Finders
Schedule 4.2(R)(1) List of Employee Benefit Plans
Schedule 4.2(R)(2) Employee Benefit Plans Not Qualified Under ERISA
Schedule 4.2(R)(4) Pension Accumulated Funding Deficiency
Schedule 4.2(R)(5) Amount by Which Benefit Liabilities Exceed Plan Assets
Schedule 4.2(R)(6) Obligations for Retiree Health and Life Benefits
Schedule 4.2(R)(7) Agreements Resulting in Payments to Employees Under Any
Compensation and Benefit Plan with Respect to Proposed
Transaction
Schedule 4.2(U) Asset Classification
Schedule 4.2(V) Inadequate Allowance for Loan Losses
Schedule 4.2(W) Insurance
Schedule 4.2(Z)(1) Noncompliance with Environmental Laws
Schedule 4.2(Z)(2) Pending Proceedings with Respect to Environmental Matters
Schedule 4.2(Z)(3) Pending Proceedings with Respect to Environmental Matters
Involving Loan/Fiduciary Property
Schedule 4.2(Z)(4) Pending Proceedings with Respect to Environmental Matters
Listed in Sections 4.2(Z)(2) or (3)
Schedule 4.2(Z)(5) Releases of Hazardous Material During Ownership
Schedule 4.2(Z)(6) Releases of Hazardous Material Prior to Ownership
Schedule 4.2(Z)(7) Underground Storage Tanks
Schedule 4.2(Z)(8) Building Components with Friable Asbestos
Schedule 4.2(AA) Tax Return Matters
Schedule 4.2(CC) Derivative Contracts, including a list of any assets
pledged as security for such Derivative Contracts
Schedule 4.2(EE)(1) Employment Contracts Requiring Payment In Connection with
Termination
Schedule 4.2(EE)(2) Contracts with Related Parties
Schedule 4.2(EE)(3) Leases with Aggregate Annual Rent Exceeding $20,000
Schedule 4.2(EE)(4) Material Contracts with Affiliates
Schedule 4.2(FF) Claims of Officers, Directors, Employees
