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January 23, 1996
First Interstate Bancorp
000 Xxxx 0xx Xxxxxx
Xxx Xxxxxxx, XX 00000
Ladies and Gentlemen:
We refer to the Agreement and Plan of Merger (the "Merger Agreement")
of even date herewith between First Interstate Bancorp ("Subject Company")
and Xxxxx Fargo & Company ("Parent"). Capitalized terms used but not de-
fined herein shall have the meanings ascribed to them in the Merger
Agreement.
In order to induce Subject Company to enter into the Merger
Agreement, and in consideration of Subject Company's undertaking of efforts
in furtherance of the transactions contemplated thereby, Xxxxxx agrees as
follows:
1. Representations and Warranties. Parent hereby represents and
warrants to Subject Company that Parent has all requisite corporate power
and authority to enter into this letter agreement (this "Agreement") and to
perform its obligations set forth herein. The execution, delivery and
performance of this Agreement have been duly and validly authorized by all
necessary corporate action on the part of Parent. This Agreement has been
duly executed and delivered by Xxxxxx.
2. Termination Fee. (a) Unless a Nullifying Event (as such term is
defined below) shall have occurred and be continuing at the time the Merger
Agreement is terminated, in the event that the Merger Agreement is termi-
nated pursuant to Article VIII thereof (regardless of whether such
termination is by Parent or Subject Company) and prior to or concurrently
with such termination a First Trigger Event (as such term is defined below)
shall have occurred, Parent shall pay to Subject Company a cash fee of $50
million. Such fee shall be payable in immedi-
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iately available funds on or before the second business day following such
termination of the Merger Agreement.
(b) In addition, unless a Nullifying Event shall have occurred and
be continuing at the time the Merger Agreement is terminated, in the event
that (i) the Merger Agreement shall have been terminated pursuant to
Article VIII thereof, (ii) prior to or concurrently with such termination a
First Trigger Event shall have occurred, and (iii) prior to, concurrently
with or within 18 months after such termination an Acquisition Event (as
such term is defined below) shall have occurred, Parent shall pay to
Subject Company an additional cash fee of (i) $150 million, less (ii) any
amount paid by Parent pursuant to Paragraph 2(a) hereof. Such fee shall be
payable in immediately available funds on or before the second business day
following the occurrence of any such Acquisition Event.
(c) As used herein, a "First Trigger Event" shall mean the
occurrence of any of the following events:
(i) Parent's Board of Directors shall have failed to approve or
recommend the Merger Agreement or the Merger, or shall have withdrawn
or modified in a manner adverse to Subject Company its approval or
recommendation of the Merger Agreement or the Merger, or shall have
resolved or publicly announced an intention to do either of the fore-
going;
(ii) Parent or any Significant Subsidiary (as such term is
defined below), or the Board of Directors of Parent or a Significant
Subsidiary, shall have recommended that the stockholders of Parent
approve any Acquisition Proposal (as such term is defined below) or
shall have entered into an agreement with respect to, or authorized,
approved, proposed or publicly announced its intention to enter into,
any Acquisition Proposal;
(iii) the Merger Agreement or the Merger shall not have been
approved at a meeting of Parent stockholders which has been held for
that purpose prior to termination of the Merger Agreement in
accordance with its terms, if prior thereto it shall have been
publicly announced that any person (other than
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Subject Company or any of its Subsidiaries) shall have made, or disclosed
an intention to make, an Acquisition Proposal;
(iv) any person (together with its affiliates and associates)
or group (as such terms are used for purposes of Section 13(d) of the
Exchange Act)(other than Subject Company and its Subsidiaries) shall
have acquired beneficial ownership (as such term is used for purposes
of Section 13(d) of the Exchange Act) or the right to acquire
beneficial ownership of 50% or more of the then outstanding shares of
the stock then entitled to vote generally in the election of
directors of Parent or any Significant Subsidiary; or
(v) following the making of an Acquisition Proposal, Parent
shall have breached any covenant or agreement contained in the Merger
Agreement such that Subject Company would be entitled to terminate
the Merger Agreement under Section 8.1(d) thereof (without regard to
any grace period provided for therein), unless such breach is
promptly cured without jeopardizing consummation of the Merger
pursuant to the terms of the Merger Agreement.
(d) As used herein, "Acquisition Event" shall mean the consummation
of any event described in the definition of "Acquisition Proposal," except
that the percentage reference contained in clause (C) of such definition
shall be 50% instead of 20%.
(e) As used herein, "Acquisition Proposal" shall mean any (i)
publicly announced proposal, (ii) regulatory application or notice (whether
in draft or final form), (iii) agreement or understanding, (iv) disclosure
of an intention to make a proposal, or (v) amendment to any of the
foregoing, made or filed on or after the date hereof, in each case with
respect to any of the following transactions with a counterparty other than
Subject Company or any of its Subsidiaries: (A) a merger or consolidation,
or any similar transaction, involving Parent or any Significant Subsidiary
(other than mergers, consolidations, or any similar transactions involving
solely Parent and/or one or more wholly owned Subsidiaries of Parent and
other than a merger or consolidation as to
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which the common shareholders of Parent immediately prior thereto in the
aggregate own at least 70% of the common stock of the publicly held
surviving or successor corporation (or any publicly held ultimate parent
company thereof) immediately following consummation thereof); (B) a
purchase, lease or other acquisition of all or substantially all of the
assets or deposits of Parent or any Significant Subsidiary; or (C) a
purchase or other acquisition (including by way of merger, consolidation,
share exchange or otherwise) of securities representing 20% or more of the
voting power of Parent or any Significant Subsidiary.
(f) As used herein, "Nullifying Event" shall mean (I) any of the
following events occurring and continuing at a time when Parent is not in
material breach of any of its covenants or agreements contained in the
Merger Agreement: (i) Subject Company shall be in breach of any of its
covenants or agreements contained in the Merger Agreement such that Parent
shall be entitled to terminate the Merger Agreement pursuant to Section
8.1(d) thereof (without regard to any grace period provided for therein),
(ii) the stockholders of Subject Company shall have voted and failed to
approve the adoption of the agreement of merger (within the meaning of
Section 251 of the DGCL) contained in the Merger Agreement at a meeting of
such stockholders which has been held for that purpose or at any adjourn-
ment or postponement thereof (unless the Merger Agreement shall not have
been approved at a meeting of Parent stockholders which was held on or
prior to such date for the purpose of voting with respect to the Merger
Agreement) or (iii) the Board of Directors of Subject Company shall have
failed to approve or recommend that the stockholders of Subject Company ap-
prove the adoption of the agreement of merger (within the meaning of
Section 251 of the DGCL) contained in the Merger Agreement or shall have
withdrawn, modified or changed in any manner adverse to Parent its approval
or recommendation that the stockholders of Subject Company approve the
adoption of the agreement of merger (within the meaning of Section 251 of
the DGCL) contained in the Merger Agreement or shall have resolved or
publicly announced its intention to do any of the foregoing, or (II) the
termination of the Merger Agreement pursuant to Section 8.1(g) thereof.
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(g) As used herein, "Significant Subsidiary" shall mean a
"significant subsidiary," as defined in Rule 1-02 of Regulation S-X
promulgated by the Securities and Exchange Commission, of Parent.
3. To the extent that Parent is prohibited by applicable law or
regulation, or by administrative actions or policy of a Federal or state
financial institution supervisory agency having jurisdiction over it, from
making the payments required to be paid by Parent herein in full, it shall
immediately so notify Subject Company and thereafter deliver or cause to be
delivered, from time to time, to Subject Company, the portion of the
payments required to be paid by it herein that is no longer prohibited from
paying, within five business days after the date on which Parent is no
longer so prohibited; provided, however, that if Parent at any time is
prohibited by applicable law or regulation, or by administrative actions or
policy of a Federal or state financial institution supervisory agency
having jurisdiction over it, from making the payments required hereunder in
full, it shall (i) use its reasonable best efforts to obtain all required
regulatory and legal approvals and to file any required notices as promptly
as practicable in order to make such payments, (ii) within five days of the
submission or receipt of any documents relating to any such regulatory and
legal approvals, provide Subject Company with copies of the same and (iii)
keep Subject Company advised of both the status of any such request for
regulatory and legal approvals, as well as any discussions with any
relevant regulatory or other third party reasonably related to the same.
4. Except where federal law specifically applies, this Agreement
shall be construed and interpreted according to the laws of the State of
Delaware without regard to conflicts of laws principles thereof.
5. This Agreement may be executed in any number of counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
6. Nothing contained herein shall be deemed to authorize Subject
Company or Parent to breach any provision of the Merger Agreement.
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Please confirm your agreement with the understandings set forth
herein by signing and returning to us the enclosed copy of this Agreement.
Very truly yours,
XXXXX FARGO & COMPANY
By:__________________
Name:
Title:
Accepted and agreed to as of
the date first above written:
FIRST INTERSTATE BANCORP
By:_____________________
Name:
Title: