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[Exhibit 2.1]
AGREEMENT AND PLAN OF MERGER
BY AND AMONG
REGIONAL BANCSHARES, INC.
MERCANTILE BANCORPORATION INC.
AND
AMERIBANC, INC.
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TABLE OF CONTENTS
ARTICLE 1
DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . . .1
ARTICLE 2
MERGER . . . . . . . . . . . . . . . . . . . . . . . . . . .3
2.1 The Merger. . . . . . . . . . . . . . . . . . . . . .3
2.2 Conversion of Securities. . . . . . . . . . . . . . .3
2.3 Parent Stock Adjustment . . . . . . . . . . . . . . .4
2.4 Closings; Effective Times . . . . . . . . . . . . . .4
2.5 Effect of Merger. . . . . . . . . . . . . . . . . . .5
2.6 Exchange of Shares. . . . . . . . . . . . . . . . . .5
2.7 Funding of Exchange Agent.. . . . . . . . . . . . . .8
2.8 Charter and Bylaws. . . . . . . . . . . . . . . . . .8
2.9 Directors and Officers. . . . . . . . . . . . . . . .8
2.10 Tax Free Reorganization.. . . . . . . . . . . . . . .8
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF REGIONAL BANCSHARES . . .9
3.1 Organization, Good Standing and Capital Stock . . . .9
3.2 Regional Bancshares Subsidiaries. . . . . . . . . . 10
3.3 Bank of Xxxxx Subsidiaries. . . . . . . . . . . . . 10
3.4 Corporate Authorizations. . . . . . . . . . . . . . 10
3.5 Corporate Documents . . . . . . . . . . . . . . . . 10
3.6 Regulatory Reports. . . . . . . . . . . . . . . . . 10
3.7 Governmental Regulation . . . . . . . . . . . . . . 11
3.8 Compliance with Laws. . . . . . . . . . . . . . . . 11
3.9 Regional Bancshares and Bank of Xxxxx Consolidated
Financial Statements. . . . . . . . . . . . . . . . 11
3.10 Title to Properties . . . . . . . . . . . . . . . . 12
3.11 Use and Condition of Property . . . . . . . . . . . 13
3.12 Loans; Loan Loss Reserve. . . . . . . . . . . . . . 13
3.13 Employees. . . . . . . . . . . . . . . . . . . . . 15
3.14 Indebtedness to and from Officers, Directors and
Others. . . . . . . . . . . . . . . . . . . . . . . 15
3.15 Absence of Conflicts. . . . . . . . . . . . . . . . 16
3.16 Litigation. . . . . . . . . . . . . . . . . . . . . 16
3.17 Contracts . . . . . . . . . . . . . . . . . . . . . 16
3.18 Insurance . . . . . . . . . . . . . . . . . . . . . 17
3.19 Conduct . . . . . . . . . . . . . . . . . . . . . . 17
3.20 Fiduciary Responsibilities. . . . . . . . . . . . . 18
3.21 FDIC Insurance. . . . . . . . . . . . . . . . . . . 18
3.22 Large Deposits. . . . . . . . . . . . . . . . . . . 18
3.23 Broker. . . . . . . . . . . . . . . . . . . . . . . 19
3.24 Labor . . . . . . . . . . . . . . . . . . . . . . . 19
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3.25 Intellectual or Other Intangible Property.. . . . . 19
3.26 Environmental Matters . . . . . . . . . . . . . . . 20
3.27 Tax Matters . . . . . . . . . . . . . . . . . . . . 20
3.28 Employee Benefit Plans. . . . . . . . . . . . . . . 22
3.29 Alien Employment Eligibility. . . . . . . . . . . . 25
3.30 Material Adverse Change.. . . . . . . . . . . . . . 25
3.31 Absence of Undisclosed Liabilities. . . . . . . . . 25
3.32 Interest Rate Risk Management Instruments.. . . . . 26
3.33 West Pointe Common. . . . . . . . . . . . . . . . . 26
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF MERCANTILE . . . . . . . 26
4.1 Mercantile Organization, Good Standing and Capital
Stock . . . . . . . . . . . . . . . . . . . . . . . 26
4.2 Merger Sub Organization, Good Standing and Capital
Stock . . . . . . . . . . . . . . . . . . . . . . . 28
4.3 Authorization . . . . . . . . . . . . . . . . . . . 28
4.4 Consolidated Financial Statements of Mercantile . . 29
4.5 Mercantile Reports. . . . . . . . . . . . . . . . . 29
4.6 Compliance with Laws and Agreements . . . . . . . . 30
4.7 Shares to be Issued in Merger . . . . . . . . . . . 30
4.8 Litigation. . . . . . . . . . . . . . . . . . . . . 30
4.9 Information in Proxy Statement and Registration
Statement . . . . . . . . . . . . . . . . . . . . . 31
4.10 Material Adverse Change . . . . . . . . . . . . . . 31
ARTICLE 5
COVENANTS. . . . . . . . . . . . . . . . . . . . . . . . . 31
5.1 Joint Covenants . . . . . . . . . . . . . . . . . . 31
5.1(a) Truth and Completeness of Representations and
Warranties. . . . . . . . . . . . . . . . . . . . 31
5.1(b) Best Efforts. . . . . . . . . . . . . . . . 32
5.1(c) Cooperation/Inspection. . . . . . . . . . . 32
5.1(d) Consents. . . . . . . . . . . . . . . . . . 32
5.1(e) Access and Information. . . . . . . . . . . 32
5.2 Expenses. . . . . . . . . . . . . . . . . . . . . . 33
5.3 Covenants of Regional Bancshares. . . . . . . . . . 34
5.3(a) Regional Bancshares Shareholder Approval. . 34
5.3(b) Conduct of Business Pending Merger. . . . . 34
5.3(c) Implementation of Policies. . . . . . . . . 38
5.3(d) Financial Statements to be Delivered. . . . 38
5.3(e) Financial and Call Reports. . . . . . . . . 38
5.3(f) Environmental Matters . . . . . . . . . . . 39
5.3(g) Conforming Entries. . . . . . . . . . . . . 40
5.3(h) Additional Actions. . . . . . . . . . . . . 41
5.4 Covenants of Mercantile and Merger Sub. . . . . . . 41
5.4(a) Approval. . . . . . . . . . . . . . . . . . 41
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5.4(b) Payment of Consideration. . . . . . . . . . 41
5.4(c) Registration of Securities and Preparation of
Proxy Statement. . . . . . . . . . . . . . 41
5.4(d) Other Filings and Appeals.. . . . . . . . . 42
5.4(e) Employee Benefit Plans. . . . . . . . . . . 43
5.4(f) Directors' and Officers' Indemnity. . . . . 43
ARTICLE 6
CONDITIONS PRECEDENT TO THE MERGER . . . . . . . . . . . . 44
6.1 Conditions and Obligations of Mercantile, Merger Sub
and Regional Bancshares to the Merger . . . . . . . 44
6.1(a) Approval by Regional Bancshares
Stockholders. . . . . . . . . . . . . . . ..44
6.1(b) Regulatory Authority Approval . . . . . . . 44
6.1(c) No Proceedings, Etc.. . . . . . . . . . . . 45
6.1(d) Registration Statement. . . . . . . . . . . 45
6.1(e) Listing on Stock Exchange.. . . . . . . . . 45
6.1(f) Tax Opinion.. . . . . . . . . . . . . . . . 45
6.2 Conditions to Obligations of Mercantile to the
Merger. . . . . . . . . . . . . . . . . . . . . . . 45
6.2(a) Representations, Warranties and Covenants . 45
6.2(b) Officers' Certificates. . . . . . . . . . . 46
6.2(c) No Material Adverse Change. . . . . . . . . 46
6.2(d) Legal Opinion.. . . . . . . . . . . . . . . 46
6.3 Conditions to Obligations of Regional Bancshares to
the Merger. . . . . . . . . . . . . . . . . . . . . 46
6.3(a) Representations, Warranties and Covenants.. 46
6.3(b) Officers' Certificates. . . . . . . . . . . 46
6.3(c) No Material Adverse Change. . . . . . . . . 46
6.3(d) Legal Opinion.. . . . . . . . . . . . . . . 47
6.3(e) Effective Registration Statement. . . . . . 47
ARTICLE 7
ABANDONMENT AND TERMINATION OF THE MERGER. . . . . . . . . 47
7.1 Termination . . . . . . . . . . . . . . . . . . . . 47
7.2 Procedure for Termination . . . . . . . . . . . . . 48
7.3 Return of Information . . . . . . . . . . . . . . . 48
7.4 Effect of Termination . . . . . . . . . . . . . . . 48
ARTICLE 8
MISCELLANEOUS. . . . . . . . . . . . . . . . . . . . . . . 49
8.1 Notice. . . . . . . . . . . . . . . . . . . . . . . 49
8.2 Amendments. . . . . . . . . . . . . . . . . . . . . 50
8.4 Benefit and Binding Effect. . . . . . . . . . . . . 50
8.5 Governing Law . . . . . . . . . . . . . . . . . . . 50
8.6 Whole Agreement . . . . . . . . . . . . . . . . . . 50
8.7 Counterparts. . . . . . . . . . . . . . . . . . . . 51
8.8 Reliance on Headings. . . . . . . . . . . . . . . . 51
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GLOSSARY . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
SCHEDULES. . . . . . . . . . . . . . . . . . . . . . . . . . . 55
EXHIBIT A
OPINION OF COUNSEL
FOR REGIONAL BANCSHARES. . . . . . . . . . . . . . . . . . 58
EXHIBIT B
OPINION OF COUNSEL . . . . . . . . . . . . . . . . . . . . 58
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AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER ("Agreement"), dated as of
the 23rd day of August, 1996, is made among Mercantile
Bancorporation Inc., a Missouri corporation ("Mercantile"),
Ameribanc, Inc. a Missouri corporation and wholly owned subsidiary
of Mercantile ("Merger Sub"), and Regional Bancshares, Inc.
("Regional Bancshares"), an Illinois corporation.
W I T N E S S E T H:
WHEREAS, subject to the terms and conditions herein, the
parties deem it advisable and in the best interests of their
respective stockholders that Regional Bancshares be merged into
Merger Sub with Merger Sub as the Surviving corporation (the
"Merger"), with all issued and outstanding Regional Bancshares
common stock being converted into the right to receive the Merger
Consideration (as defined herein);
WHEREAS, the parties hereto have agreed upon the terms and
provisions of such transaction and desire to provide for certain
undertakings, conditions, representations, warranties and covenants
in connection with the transactions contemplated hereby;
NOW, THEREFORE, for and in consideration of the premises and
mutual covenants and agreements herein contained, the parties
hereto do agree each with the other as follows:
ARTICLE 1
DEFINITIONS
1.1 "Benefit Plan" shall constitute (i) an employee
benefit plan as defined in Section 3(3) of ERISA, together with
all regulations thereunder, even if, because of some other
provision of ERISA, such plan is not subject to any or all of
ERISA's provisions, and (ii) whether or not described in the
preceding clause, (a) any pension, profit sharing, stock bonus,
deferred or supplemental compensation, retirement, thrift, stock
purchase or stock option plan, or any other compensation,
welfare, fringe benefit or retirement plan, program, policy,
understanding or arrangement of any kind whatsoever, whether
formal or informal, oral or written, providing for benefits for
or the welfare of any or all of the current or former employees
or agents of Regional Bancshares, Bank of Xxxxx or any affiliates
thereof or their beneficiaries or dependents, (b) a multi-
employer plan as defined in Section 3(37) of ERISA, or (c) a
multiple employer plan as defined in Section 413 of the Code.
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1.2 "Business Day" means any day which is not a Saturday,
Sunday or a day on which banking institutions in Illinois or
Missouri are authorized or obligated by law or executive order to
close.
1.3 "Environmental Claim" means any written notice from
any governmental authority or third party alleging potential
liability (including, without limitation, potential liability for
investigatory costs, cleanup costs, governmental response costs,
natural resources damages, property damages, personal injuries or
penalties) arising out of, based on, or resulting from the
presence, or release into the environment, of any Materials of
Environmental Concern.
1.4 "Environmental Laws" means any current federal, state
or local law, statute, ordinance, rule, regulation, code,
license, permit, authorization, approval, consent, order,
judgment, decree, injunction or agreement with any governmental
entity relating to (1) the protection, preservation or
restoration of the environment (including, without limitation,
air, water vapor, surface water, groundwater, drinking water
supply, surface soil, subsurface soil, plant and animal life or
any other natural resource), and/or (2) the use, storage,
recycling, treatment, generation, transportation, processing,
handling, labeling, production, release or disposal of Materials
of Environmental Concern. The term Environmental Law includes
without limitation: (1) the Comprehensive Environmental Response,
Compensation and Liability Act, as amended, 42 U.S.C. Sec. 9601,
et seq; the Resource Conservation and Recovery Act, as
-- ---
amended, 42 U.S.C. Sec. 6901, et seq; the Clean Air Act,
-- ---
as amended, 42 U.S.C. Sec. 7401, et seq; the Federal
-- ---
Water Pollution Control Act, as amended, 33 U.S.C. Sec. 1251,
et seq; the Toxic Substances Control Act, as amended, 15
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U.S.C. Sec. 2601, et seq; the Emergency Planning and
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Community Right to Xxxx Xxx, 00 X.X.X. Xxx. 00000, et seq;
-- ---
the Safe Drinking Water Act, 42 U.S.C. Sec. 300f, et seq;
-- ---
and all comparable state and local laws; and (2) any common
law (including without limitation common law that may impose
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 Materials of Environmental
Concern.
1.5 "ERISA" shall mean the Employee Retirement Income
Security Act of 1974, as amended.
1.6 "Intellectual Property" means patents, trademarks,
trade names, corporate names, service marks, copyrights, and
copyrighted works; registrations thereof and applications
therefor; trade secrets, software, firmware, programs,
inventions, processes, and items of proprietary know-how,
information or data; and licenses, sublicenses, assignments, and
agreements in respect of any of the foregoing; in each case as
used by or licensed or assigned by or to Regional Bancshares or
Bank of Xxxxx.
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1.7 "Materials of Environmental Concern" means
pollutants, contaminants, wastes, radioactive materials or
wastes, hazardous wastes, hazardous substances, asbestos and any
material containing asbestos, medical wastes, toxic substances,
petroleum products and wastes, and any other materials regulated
under Environmental Laws.
1.8 "Taxes" means all taxes, charges, fees, levies, or
other like assessments, including without limitation income,
gross receipts, ad valorem, value added, premium, excise, real
property, personal property, windfall profit, sales, use,
transfer, license, withholding, employment, payroll, bank, and
franchise taxes imposed by: the United States or any other
nation, state, or bilateral or multilateral governmental
authority, any local governmental unit or subdivision thereof, or
any branch, agency, or judicial body thereof; and shall include
any interest, fines, penalties, assessments, or additions to tax
resulting from, attributable to, or incurred in connection with
any such Taxes or any contest or dispute thereof.
ARTICLE 2
MERGER
2.1 The Merger. Subject to the satisfaction of the
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terms and conditions of this Agreement, including, without
limitation, receipt of all requisite governmental and stockholder
approvals, at the Merger Effective Time (as defined below),
subject to the satisfaction of the terms and conditions of this
Agreement, Regional Bancshares shall be merged with and into
Merger Sub in accordance with the provisions of the general
corporation laws of the States of Missouri and Illinois with
Merger Sub as the surviving corporation ("Surviving
Corporation"); each share of the common stock of Regional
Bancshares, $10.00 par value ("Regional Bancshares Common")
issued and outstanding immediately prior to the Merger Effective
Time shall thereupon and without further action be converted into
the right to receive the Merger Consideration (as defined below)
in the manner specified herein. As of the Merger Effective Time,
the separate existence of Regional Bancshares shall cease.
2.2 Conversion of Securities. At the Merger
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Effective Time, by virtue of the Merger and without any action on
the part of Mercantile, Merger Sub, Regional Bancshares or the
holder of any of the following securities:
(a) Each share of the common stock, $1.00 par
value, of Merger Sub that is issued and outstanding
immediately prior to the Merger Effective Time shall remain
outstanding and shall be unchanged after the Merger and
shall thereafter constitute all of the issued and
outstanding capital stock of the Surviving Corporation; and
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(b) Subject to Sections 2.3 and 2.5(d) hereof,
each share of common stock, $10.00 par value of Regional
Bancshares ("Regional Bancshares Common") issued and
outstanding at the Merger Effective Time shall cease to be
outstanding and shall be converted into the following:
(i) the right to receive an amount in cash (the
"Cash Distribution") equal to $485.76;
(ii) the right to receive 23.7123 shares of
Mercantile common stock, $5.00 par value, and the
associated "Rights" under the "Rights Agreement," as
those terms are defined in Section 4.1 hereof
(collectively, "Mercantile Common") (the "Stock
Distribution" ; and
(iii) the right to receive 0.4838 shares of the
Common Stock of West Pointe Bank & Trust Company
("West Point Common") held of record by Regional
Bancshares as of the date hereof (the "West Pointe
Consideration" and collectively with the Cash
Consideration and Stock Consideration, the "Merger
Consideration").
2.3 Parent Stock Adjustment. If prior to the Merger
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Effective Time Mercantile and/or West Pointe Bank & Trust Company
shall declare a stock dividend or make distributions upon or
subdivide, split up, reclassify or combine Mercantile Common
and/or West Pointe Common, as appropriate, or declare a dividend
or make a distribution on Mercantile Common in any security
convertible into Mercantile Common and/or West Pointe Common, as
appropriate, adjustment or adjustments will be made to the Stock
Distribution and/or West Pointe Consideration, as appropriate.
2.4 Closings; Effective Times. A closing for the
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Merger (the "Merger Closing") shall take place at 10:00 a.m. on a
day within forty-five (45) days, as mutually agreed by the
parties, following the satisfaction or waiver, to the extent
permitted hereunder, of the conditions to the consummation of the
Merger specified in Article 6 of this Agreement at the offices of
Xxxxx Xxxx LLP, 000 Xxxxx Xxxxxxxx, Xx. Xxxxx, Xxxxxxxx 00000 or
at such other place, at such other time, or on such other date as
the parties may mutually agree upon. At the Merger Closing,
there shall be delivered to Regional Bancshares and Mercantile
the opinions, certificates and other documents required to be
delivered under Article 6 hereof. At the Merger Closing, the
parties shall exchange the certificates specified in Article 6
and shall execute an appropriate certificate of merger and such
other documents as may be deemed necessary or advisable in the
opinion of Mercantile to effectuate the Merger as promptly as
practicable. At or after the Merger Closing, the parties shall
cause their representatives to file the Agreement or such
certificate of merger with the appropriate authority and shall
take such other actions as may be deemed necessary or advisable
in the opinion of Mercantile to
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effectuate the Merger. The "Merger Effective Time" shall occur upon the
issuance of the certificate of merger by the Secretaries of the States of
Missouri and Illinois.
2.5 Effect of Merger. The Surviving Corporation
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shall have the name "Ameribanc, Inc." and shall possess all
rights, privileges, powers and franchises and shall be subject to
all restrictions, liabilities and duties of Merger Sub and
Regional Bancshares; and the rights, privileges, powers and
franchises of Merger Sub and Regional Bancshares, and all
property, real, personal and mixed, and all debts due Merger Sub
or Regional Bancshares, as well as for all other things in action
or belonging to Merger Sub and Regional Bancshares, shall be
vested in the Surviving Corporation; and all property, rights,
privileges, powers and franchises, and all and every other
interest shall be thereafter the property of the Surviving
Corporation as they were of Merger Sub and Regional Bancshares,
and the title to any real estate vested by deed or otherwise,
under the laws of any state or jurisdiction, in Merger Sub or
Regional Bancshares, shall not revert or be in any way impaired
by reason of the Merger; but all rights of creditors and all
liens upon any property of Merger Sub or Regional Bancshares
shall be preserved unimpaired, and all respective debts,
liabilities and duties of Merger Sub or Regional Bancshares shall
thenceforth attach to the Surviving Corporation, and may be
enforced against it to the same extent as if such debts,
liabilities and duties had been incurred or contracted by it. If
at any time the Surviving Corporation shall consider or be
advised that any further assignments, conveyances or assurances
in law are necessary or desirable to vest, perfect or confirm of
record in the Surviving Corporation the title to any property or
rights of Regional Bancshares or otherwise to carry out the
provisions hereof, the proper officers and directors of Regional
Bancshares immediately prior to the Merger Effective Time (or
their successors in office) shall execute and deliver any and all
proper deeds, assignments and assurances in law, and do all
things necessary or proper, to vest, perfect or confirm title to
such property or rights in the Surviving Corporation and
otherwise to carry out the provisions hereof. The Surviving
Corporation shall be governed by the laws of the State of
Missouri.
2.6 Exchange of Shares. From and after the Merger
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Effective Time and as and when required by the provisions of this
Agreement, Mercantile shall issue the Merger Consideration in the
form of cashand shares of Mercantile Common to stockholders of
Regional Bancshares pursuant to the provisions hereinafter set
forth. The manner of converting the shares of Regional
Bancshares Common shall be as follows:
2.6(a) At the Merger Effective Time, each share of
Regional Bancshares Common outstanding immediately prior to the
Merger Effective Time (other than (i) any Regional Bancshares
Common shares held by Mercantile or any corporate affiliate, with
the exception of shares held in a fiduciary capacity or in
satisfaction of a debt previously contracted in good faith or
(ii) shares held by a holder who has made a demand for appraisal
and payment in accordance with
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applicable law and who has not voted for the Merger) shall thereupon, and
without further action on the part of the holder thereof, be converted into
the right to receive the Merger Consideration, as set forth in Section 2.2
hereof. Each share of Regional Bancshares Common held in the treasury of
Regional Bancshares or owned by Mercantile at the Merger Effective Time (other
than those specifically described in (i) and (ii) of the immediately preceding
sentence) shall be cancelled.
2.6(b) Within 2 Business Days after the Merger
Effective Time, the Surviving Corporation or an exchange agent
appointed by the Surviving Corporation (the "Exchange Agent")
shall send or cause to be sent to each holder of record of a
certificate or certificates which as of the Merger Effective Time
represented outstanding shares of Regional Bancshares Common (the
"Certificates") a form letter of transmittal which shall specify
instructions for use in effecting the surrender of the
Certificates in exchange for the Merger Consideration. Upon the
surrender of a Certificate for cancellation to the Exchange Agent
(or a lost certificate affidavit or bond in a form reasonably
acceptable to the Exchange Agent), together with such letter of
transmittal duly executed, the holder of such Certificate shall
be entitled to receive in exchange therefor (w) the Cash
Distribution multiplied by the number of shares of Regional
Bancshares Common theretofore represented by the Certificate so
surrendered, (x) a certificate or certificates representing the
Stock Distribution multiplied by the number of shares of Regional
Bancshares Common theretofore represented by the Certificate so
surrendered, (y) a certificate or certificates representing the
West Pointe Consideration multiplied by the number of shares of
Regional Bancshares Common theretofore represented by the
Certificate so surrendered, plus (z) an amount of cash as
provided in subsection (d) below for any fractional shares of
Mercantile Common and/or West Pointe Common, as appropriate,
which such holder would otherwise be entitled to receive, and the
Certificate so surrendered shall forthwith be cancelled.
2.6(c) No dividends or other distributions declared
after the Merger Effective Time with respect to Mercantile Common
payable to holders of record after the Merger Effective Time
shall be paid to the holder of any unsurrendered Certificate
evidencing ownership of shares of Regional Bancshares Common
represented thereby until the holder of record shall surrender
such Certificate. Until so surrendered and exchanged, each such
outstanding Certificate shall, for all purposes, other than the
payment of dividends or other distributions, if any, to holders
of record of shares of Mercantile Common, evidence the right to
ownership of the shares of Mercantile Common into and for which
such shares have been so converted; provided, however, that upon
surrender of a Certificate, there shall be paid to the record
holder or holders of such Certificate, the amount, without
interest thereon, of such dividends and other distributions, if
any, which theretofore have become payable with respect to the
number of whole shares of Mercantile Common represented by such
Certificate.
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2.6(d) No fractional shares of Mercantile Common
shall be issued upon the surrender or exchange of Certificates
which prior to the Merger Effective Time shall have represented
any shares of Regional Bancshares Common; no dividend or
distribution of Mercantile shall relate to any fractional share
interest; and fractional share interests shall not entitle the
owner thereof to vote or to any rights of a stockholder of
Mercantile. Instead, each holder of shares of Regional
Bancshares Common having a fractional interest arising upon the
conversion or exchange of such shares pursuant to the Merger
shall, at the time of surrender of the Certificate or
Certificates theretofore representing Regional Bancshares Common,
be paid by Mercantile an amount in cash (without interest)
determined by multiplying the fractional share interest to which
such holder otherwise would be entitled by the average of the
closing stock price of Mercantile Common on The New York Stock
Exchange Composite Tape as reported in The Wall Street Journal
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for the five trading days prior to the date on which this Agreement is
executed. The fractional share interests of each stockholder will be
aggregated such that no stockholder will receive cash in lieu of fractional
share interests in an amount greater than one full share of Mercantile Common.
In the event West Pointe Bank & Trust Company shall not
issue certificates representing fractional shares of West Pointe
Common upon the request of the Exchange Agent therefore, the
holder of Regional Bancshares Common entitled to such fractional
interest shall, at the time of surrender of the Certificate or
Certificates theretofore representing Regional Bancshares Common,
be paid by Mercantile an amount in cash (without interest)
determined by multiplying the fractional share interest to which
such holder otherwise would be entitled by $30.00. The
fractional share interests of each stockholder will be aggregated
such that no stockholder will receive cash in lieu of fractional
shares interests in an amount greater than one full share of West
Pointe Common.
2.6(e) All rights to receive (i) shares of
Mercantile Common into and for which shares of Regional
Bancshares Common shall have been converted and exchanged
pursuant to this Agreement, (ii) cash , and (iii) West Pointe
Common shall be deemed to have been issued or paid, as the case
may be, in full satisfaction of all rights pertaining to such
converted and exchanged shares of Regional Bancshares Common.
2.6(f) At the Merger Effective Time, Regional
Bancshares shall deliver a certified copy of a list of its
stockholders to Mercantile, after which there shall be no further
registration of transfers on the stock transfer books of Regional
Bancshares of the shares of Regional Bancshares Common which were
outstanding immediately prior to the Merger Effective Time. If,
after the Merger Effective Time, Certificates representing such
shares of Regional Bancshares Common are presented to Mercantile,
they shall be cancelled and exchanged for cash and certificates
representing shares of Mercantile Common as provided in this
Agreement.
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2.6(g) If any cash and any certificate representing
shares of Mercantile Common or West Pointe Common is to be paid
to or issued in a name other than that in which the Certificate
surrendered in exchange therefor is registered, it shall be a
condition of the payment or issuance thereof that the Certificate
so surrendered shall be properly endorsed, accompanied by all
documents required to evidence and effect such transfer and
otherwise in proper form for transfer.
2.6(h) If there are appraisal rights available under
applicable law with respect to shares of Regional Bancshares
Common as a result of the Merger, then each such share of
Regional Bancshares Common as to which a legally sufficient
demand for appraisal has been made in accordance with the
applicable law and which was not voted in favor of, or the record
holder of which did not consent in writing to, the Merger, shall
not be converted into or represent a right to receive the Merger
Consideration pursuant to this Agreement unless and until the
holder of such share shall have failed to perfect or shall have
effectively withdrawn or lost the right to appraisal of and
payment for such shares, at which time such holder's shares shall
be converted into the right to receive the Merger Consideration
in accordance with the terms of this Agreement and the applicable
law.
2.7 Funding of Exchange Agent. Mercantile shall
--------------------------
deliver to the Exchange Agent from time to time as needed by the
Exchange Agent an amount in cash necessary to pay the cash
portion of the Merger Consideration and to pay the cash in lieu
of fractional shares payable for certificates theretofore
representing shares of Regional Bancshares Common.
2.8 Charter and Bylaws. On and after the Merger
-------------------
Effective Time, the Articles of Incorporation and Bylaws of the
Surviving Corporation shall remain the Articles of Incorporation
and Bylaws of Merger Sub immediately prior to the Merger
Effective Time until further amended in accordance with
applicable law.
2.9 Directors and Officers. On and after the Merger
-----------------------
Effective Time, the officers and directors of the Surviving
Corporation shall remain the officers and directors of Merger Sub
in office as of the Merger Effective Time, and shall hold such
offices in the Surviving Corporation which they held in Merger
Sub as of the Merger Effective Time, until their successors are
elected or appointed in accordance with the Bylaws of the
Surviving Corporation and shall have been duly qualified.
On and after the Merger Effective Time, the directors and
officers of the Surviving Corporation shall have the right to act
in any respect as directors and officers for Regional Bancshares
or Merger Sub in order to perfect in the Surviving Corporation
the effects of the Merger set forth in Section 2.5 hereof.
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2.10 Tax Free Reorganization. The parties intend to
------------------------
adopt this Agreement and the Merger as a tax-free plan of
reorganization under Section 368(a)(1)(A) of the Code by virtue
of the provisions of Section 368(a)(2)(D) of the Code. The
parties shall not take a position on any tax return inconsistent
with this Section 2.10.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF REGIONAL BANCSHARES
Regional Bancshares represents and warrants to Mercantile as
of the date first written above, and continuing to the Merger
Closing, as follows:
3.1 Organization, Good Standing and Capital Stock.
---------------------------------------------
Regional Bancshares is a corporation and Bank of Xxxxx is a
banking corporation, in each case duly organized, validly
existing and in good standing under the laws of the State of
Illinois and have all requisite power and authority (corporate or
other) to (i) enter into this Agreement and to perform the
obligations hereunder and thereunder on its part to be performed
and (ii) own, operate and lease their properties and carry on
their businesses as they are now being conducted in each
jurisdiction where their business is being conducted. Regional
Bancshares and Bank of Xxxxx are duly qualified and in good
standing in each jurisdiction where the character of the
properties owned or leased by them or the nature of the business
transacted by them requires that they be qualified to do
business. Regional Bancshares is a bank holding company duly
registered with the Federal Reserve Board under the Bank Holding
Company Act of 1956, as amended (the "Act"). The authorized
capital stock of Regional Bancshares consists entirely of 30,000
shares of Common Stock, par value $10.00 per share, of which
25,321 shares are issued and outstanding. All of such shares are
validly issued, fully paid and nonassessable. The authorized
capital stock of Bank of Xxxxx consists entirely of 30,000 shares
of Common Stock, par value $12.00 per share ("Bank of Xxxxx
Common"), of which 30,000 shares are issued and outstanding. All
of such shares are validly issued, fully paid and nonassessable.
Regional Bancshares owns 100% of the outstanding shares of Bank
of Xxxxx Common of record and beneficially, free and clear of any
liens, pledges, security interests, charges or other
encumbrances. Neither Regional Bancshares or Bank of Xxxxx have
any authorized shares of preferred stock. Neither Regional
Bancshares Common or Bank of Xxxxx Common is subject to any
restriction on transfer under their respective Certificates or
Articles of Incorporation or Bylaws or any contract, indenture,
agreement or instrument by which they are bound. Neither
Regional Bancshares nor Bank of Xxxxx has issued or granted nor
is either a party to any outstanding warrants, options, rights,
calls or commitments of any kind relating to, or any presently
effective agreements or understandings with respect to, the
capital stock of Regional Bancshares or Bank of Xxxxx, whether
issued or unissued, or securities convertible into capital stock
of Regional Bancshares or Bank of Xxxxx, whether issued or
unissued. Neither Regional Bancshares or Bank of Xxxxx is a
party to, or bound by, any contract, indenture,
9
15
agreement or instrument or any note, debenture, bond or other security, under
the terms of which, or pursuant to which, their right to declare or pay
dividends on its capital is restricted.
3.2 Regional Bancshares Subsidiaries. Except for
--------------------------------
Bank of Xxxxx, Regional Bancshares does not own or control,
directly or indirectly, a 5% or more equity interest in any
corporation, bank or other entity.
3.3 Bank of Xxxxx Subsidiaries. Bank of Xxxxx does
--------------------------
not own or control, directly or indirectly, a 5% or more equity
interest in any corporation, bank or other entity.
3.4 Corporate Authorizations. Except for the
------------------------
shareholder vote provided for in Section 5.3(a), the execution,
delivery and performance of this Agreement have been duly and
validly authorized by all necessary corporate action on the part
of Regional Bancshares. This Agreement has been duly executed
and delivered by Regional Bancshares. Assuming due
authorization, execution and delivery by Mercantile and Merger
Sub, this Agreement constitutes the valid, binding and
enforceable obligation of Regional Bancshares, except as limited
by applicable bankruptcy, insolvency, moratorium or other similar
laws affecting the enforcement of creditors' rights and remedies
generally from time to time in effect and by applicable law which
may affect the availability of equitable remedies.
3.5 Corporate Documents. True and correct copies of
-------------------
the Certificate or Articles of Incorporation and Bylaws of
Regional Bancshares and Bank of Xxxxx, certified by the
appropriate officer of Regional Bancshares or Bank of Xxxxx, as
the case may be, have been delivered to Mercantile prior to the
date hereof and except as set forth in the such documents, have
not been amended since such certification. The corporate record
books, transfer books and stock ledgers of Regional Bancshares
and Bank of Xxxxx are complete and accurate in all material
respects.
3.6 Regulatory Reports. Regional Bancshares and Bank
------------------
of Xxxxx have filed all reports, registrations and statements,
together with any amendments required to be made with respect
thereto, that they were required to file with (i) the Federal
Reserve Board, (ii) the Federal Depository Insurance Company (the
"FDIC") and (iii) the Commissioner of Banks and Real Estate of
the State of Illinois (the "Commissioner") and all other material
reports and statements required to be filed by them, including,
without limitation, any report or statement required to be filed
pursuant to the laws, rules or regulations of the Federal Reserve
Board, the FDIC or the State of Illinois (collectively, the
"Regional Bancshares Reports") and have paid all fees or
assessments due and payable in connection therewith. The
Regional Bancshares Reports comply in all material respects as to
form and content with applicable law. To the extent permitted by
law, Mercantile has been furnished with a copy of any report or
statement by any federal, state or local government
10
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agency, commission or other entity available to Regional Bancshares
relating to an examination of Bank of Xxxxx within the past five
years. Except as set forth on Schedule 3.6 (Regulatory
------------
Matters), there is no unresolved violation, criticism or
exception of a material nature by the Federal Reserve Board, the
FDIC, the Commissioner, or other agency, commission or entity
with respect to any report or statement referred to in this
Section.
3.7 Governmental Regulation. Regional Bancshares and
-----------------------
Bank of Xxxxx hold all licenses, certificates, permits,
franchises, patents, trademarks, service marks, trade names,
copyrights or rights thereto, and adequate authorizations,
approvals, consents, licensing, clearances and orders of and
registrations with all appropriate federal, state or other
authorities necessary for the conduct of their business as now
conducted and as presently proposed to be conducted.
3.8 Compliance with Laws and Agreements. Neither
------------------------------------
Regional Bancshares nor Bank of Xxxxx is in violation of any
provision of its Articles or Certificate of Incorporation,
Articles of Association or Bylaws or any note, bond, indenture,
mortgage, deed of trust, loan agreement, or any other agreement
to which it is a party or by which it is bound or to which any of
its properties or assets is subject, other than such defaults or
violations as would not (singly or in the aggregate) have a
material adverse effect on the business, operations, prospects or
financial condition of Regional Bancshares or Bank of Xxxxx,
taken as a whole, nor is Regional Bancshares or Bank of Xxxxx, in
violation of any statute, rule, regulation, order, writ, decree,
or injunction of any court or governmental agency or any body
having jurisdiction over them or any of their respective
properties (collectively "Laws") which, if enforced, could have
(singly or in the aggregate) a material adverse effect on the
business, operations, prospects or financial condition of
Regional Bancshares and Bank of Xxxxx taken as whole. Except as
set forth on Schedule 3.8 (Compliance with Laws and
------------
Agreements), neither Regional Bancshares nor Bank of Xxxxx has
received any inquiry or statement from any regulatory agency or
other governmental official relating to its compliance with any
of the Laws.
3.9 Regional Bancshares and Bank of Xxxxx Consolidated
--------------------------------------------------
Financial Statements
--------------------
3.9(a) Attached hereto as Schedule 3.9 (Regional
------------
Financial Statements) are copies of the following financial
statements:
3.9(a)(i) Audited, consolidated balance sheet of
Regional Bancshares as of December 31, 1995, related consolidated
statements of income, changes in shareholders' equity and cash flows
for the year then ended, together with the notes thereto certified by
Regional Bancshares's independent auditors;
3.9(a)(ii) Audited, balance sheets of Bank of
Xxxxx as of December 31, 1994 and 1993 and related statements of
income, changes in
11
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shareholders' equity and cash flows for the two-year period ended
December 31, 1994;
3.9(a)(iii) Unaudited, consolidated balance sheets
of Regional Bancshares as of June 30, 1996 and 1995, and related
consolidated statements of income and cash flows for the six-
month periods ended June 30, 1996 and 1995;
3.9(a)(iv) Form FR Y-6 reports of Regional
Bancshares as of December 31, 1995, 1994 and 1993 and all Forms
XX X-0X, XX X-0XX, XX Y-9SP and FR Y-9C, as appropriate, filed
with the Federal Reserve Board during the period beginning
January 1, 1993, and ending on the date hereof; and
3.9(a)(v) Consolidated Reports of Condition and
Income for Bank of Xxxxx for the fiscal years ended December 31,
1995, 1994 and 1993 and for the six-month period ended June 30,
1996.
3.9(b) The financial statements document referenced
in Schedule 3.9 are referred to collectively as the "Regional
Financial Statements." The Regional Financial Statements have
been prepared in accordance with generally accepted accounting
principles ("GAAP") or, as to the financial statements referenced
in subsections (a) (iv) and (v) above, regulatory accounting
principles, consistently applied during the periods involved, and
present fairly in all material respects the consolidated
financial positions of Regional Bancshares and Bank of Xxxxx, as
the case may be, at the dates thereof and the consolidated
results of operations and cash flows of Regional Bancshares and
Bank of Xxxxx, as the case may be, for the periods stated
therein.
3.9(c) Regional Bancshares and Bank of Xxxxx have
each prepared, kept and maintained through the date hereof true,
correct and complete financial and other books and records of
their affairs which fairly reflect their respective financial
conditionsand results of operations and cash flows.
3.10 Title to Properties. Except as set forth in
--------------------
Schedule 3.10 (Real Property), Regional Bancshares and Bank
-------------
of Xxxxx have good and marketable title to all of their
respective properties and assets, tangible and intangible, real
and personal, free and clear of all mortgages, liens, pledges,
security interests, charges or encumbrances. There exists no
restriction on the transfer of any such properties or assets
other than any restrictions resulting from investments being
designated as "Held to Maturity." Included in Schedule 3.10
-------------
is a complete and accurate list, with legal description, of each
parcel of real estate owned or leased by Regional Bancshares and
Bank of Xxxxx. Neither Regional Bancshares nor Bank of Xxxxx has
any obligation to acquire any interest in any real property other
than those described in Schedule 3.10. The real and personal
-------------
properties and assets held under lease by Regional Bancshares and
Bank of Xxxxx are held by them under valid, subsisting and
enforceable leases with such exceptions as do not interfere
12
18
with the use made and proposed to be made of such properties and
assets by Regional Bancshares and Bank of Xxxxx. No consent is
necessary under the terms of any such lease in connection with
the consummation of the transactions contemplated hereby.
3.11 Use and Condition of Property and Assets. All of
---------------------------------------
the property and assets of Regional Bancshares and Bank of Xxxxx
are in suitable operating condition and repair as required for
their current use and conform to all applicable laws, and no
notice of any violation of any law, statute, ordinance, or
regulation relating to any of such property or assets has been
received by Regional Bancshares or Bank of Xxxxx except such as
have been fully complied with. All improvements located on, and
the use presently being made of all real property materially
comply with all applicable zoning and building code ordinances
and all applicable fire, occupational safety and health standards
and similar rules established by law or regulation and the same
use thereof by Mercantile or Merger Sub will not result in any
violation of any such code, ordinance, or standard.
There is no pending or, to Regional Bancshares' knowledge,
threatened condemnation proceeding or similar action affecting
the property of Regional Bancshares or Bank of Xxxxx or with
respect to any streets or public amenities appurtenant thereto or
in the vicinity thereof which would adversely affect the business
or assets of Regional Bancshares or Bank of Xxxxx.
3.12 Loans; Loan Loss Reserve. All loans and loan
-------------------------
commitments extended by Regional Bancshares or Bank of Xxxxx
(collectively, the "Regional Bancshares Loans") were made in
accordance with customary lending standards of Bank of Xxxxx in
the ordinary course of business, which standards have been
disclosed to Mercantile. The consolidated loan loss reserve as
of June 30, 1996 (as defined in the instructions for the Call
Reports) of Bank of Xxxxx is at least $1,467,000. Set forth in
Schedule 3.12 (Loans and Investments), is a true, correct and
-------------
complete listing, as of the date hereof, by account of (i) all
Regional Bancshares Loans in excess of $50,000 which have been
accelerated during the past twelve months; (ii) all loans
commitments or lines of credit in excess of $50,000 which have
been terminated by Regional Bancshares or Bank of Xxxxx during
the past twelve months by reason of default or adverse
developments in the condition of the borrower or other events or
circumstances affecting the credit of the borrower; (iii) all
loan commitments and lines of credit in excess of $50,000 as to
which Regional Bancshares or Bank of Xxxxx has given written
notice of its intent to terminate during the past twelve months;
(iv) with respect to all Regional Bancshares Loans in excess of
$50,000, all notification letters and other written
communications from Regional Bancshares or Bank of Xxxxx to any
of their respective borrowers, customers or other parties during
the past twelve months wherein Regional Bancshares or Bank of
Xxxxx has requested or demanded that actions be taken to correct
existing defaults or facts or circumstances which may become
defaults; (v) each borrower, customer, or other party which has
notified Regional Bancshares
13
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or Bank of Xxxxx during the past twelve months of, or has asserted against, in
writing, any "lender liability" or similar claim, and, to the best knowledge
of Regional Bancshares, each borrower, customer or other party
which has given any oral notification of, or orally asserted
against Regional Bancshares or Bank of Xxxxx, any such claim;
(vi) all Regional Bancshares Loans in excess of $50,000 (A) that
are contractually past due 90 days or more in the payment of
principal and/or interest, (B) that are on non-accrual status,
(C) that have been classified "doubtful," or "loss" or the
equivalent thereof by any regulatory agency, (D) where a
reasonable doubt exists as to the timely future collectibility of
principal and/or interest, whether or not interest is still
accruing or the loan is less than 90 days past due, (E) where the
interest rate terms have been reduced and/or the maturity dates
have been extended subsequent to the agreement under which the
loan was originally created due to concerns regarding the
borrower's ability to pay in accordance with such initial terms,
or (F) where a specific reserve allocation exists in connection
therewith; (vii) all Regional Bancshares Loans payable or owing
by any executive officer or director of Regional Bancshares or
Bank of Xxxxx or any other person or entity deemed a "related
interest" of any of the foregoing, as such terms are defined in
Regulation O of the Federal Reserve Board; and (viii) all assets
classified as real estate acquired through foreclosure, including
in-substance foreclosed real estate. The aggregate amounts of all
Regional Bancshares Loans of the type identified in subsections
(vi)(A), (B), (C) and (E), plus all assets classified by
----
Regional Bancshares or Bank of Xxxxx as real estate acquired
through foreclosure or in lieu of foreclosure, including in-
substance foreclosures, does not as of the date hereof and shall
not at the Merger Effective Time exceed $4,000,000.
The Regional Bancshares Loans are evidenced by appropriate
and sufficient documentation and constitute valid and binding
obligations of the obligors and any guarantor named therein,
enforceable in accordance with their terms, except as limited by
applicable bankruptcy, insolvency, moratorium or other similar
laws affecting the enforcement of creditors' rights and remedies
generally from time to time in effect and by applicable law which
may affect the availability of equitable remedies. All the
Regional Bancshares Loans are, and at the Merger Effective Time
will be, free and clear of any security interest, lien,
encumbrance or other charge, except such as exist in favor of
Regional Bancshares or Bank of Xxxxx and Regional Bancshares or
Bank of Xxxxx has complied, and at the Merger Effective Time will
have complied, in all respects with all laws and regulations
relating to such Regional Bancshares Loans. The Regional
Bancshares Loans are not subject to any defenses, counterclaims,
offsets or claims of offset which taken as a whole would be
material to Regional Bancshares and Bank of Xxxxx taken as a
whole and, to the best knowledge of Regional Bancshares, as of
June 30, 1996, were collectible in full in the ordinary course of
business, except for possible loan and lease losses which are
adequately provided for in the allowance for loan and lease
losses in such Regional Financial Statements and the collection
experience of Regional Bancshares and Bank of Xxxxx since June
30, 1996 to the date hereof has not
14
20
been materially adverse to the credit and collection experience of Regional
Bancshares and Bank of Xxxxx, taken as a whole, in the six-months ended June
30, 1996.
Except as set forth on Schedule 3.12A (Allowance for
--------------
Loan and Lease Losses), the allowances for loan losses contained
in the Regional Financial Statements were established in
accordance with the past practices and experiences of Regional
Bancshares and Bank of Xxxxx, and the allowance for loan and
lease losses shown on the consolidated condensed balance sheets
of Regional Bancshares and Bank of Xxxxx as of June 30, 1996 were
adequate in all material respects under the requirements of GAAP
or regulatory accounting principles, as the case may be, to
provide for possible losses on loans and leases (including
without limitation accrued interest receivable) and credit
commitments (including without limitation stand-by letters of
credit) as of the date of such balance sheet.
Except as set forth in Schedule 3.12B (Restricted
--------------
Investments) and except for pledges to secure public and trust
deposits, none of the investments reflected in the consolidated
balance sheet of Regional Bancshares as of June 30, 1996 under
the heading "Investment Securities," and none of the investments
made by Regional Bancshares or Bank of Xxxxx since June 30, 1996
is subject to any restriction, whether contractual or statutory,
which materially impairs the ability of Regional Bancshares or
Bank of Xxxxx freely to dispose of such investment at any time
other than any restriction resulting from the designation of such
securities as "Held to Maturity." With respect to all reverse
repurchase agreements to which Regional Bancshares or Bank of
Xxxxx is a party, Regional Bancshares or Bank of Xxxxx has a
valid, perfected first lien or security interest in the
government securities or other collateral securing the repurchase
agreement, and the value of the collateral securing each such
repurchase agreement equals or exceeds the amount of the debt
secured by such collateral under such agreement.
Except as set forth in Schedule 3.12C (Obligations to
--------------
Acquire Assets), neither Regional Bancshares nor Bank of Xxxxx
has sold or otherwise disposed of any assets in a transaction in
which the acquiror of such assets or other person has the right,
either conditionally or absolutely, to require Regional
Bancshares or Bank of Xxxxx to repurchase or otherwise reacquire
any such assets. (The foregoing is not intended to include
certificates of deposit or repurchase agreements by Bank of
Xxxxx.)
3.13 Employees. Set forth on Schedule 3.13
--------- -------------
(Employees) is a complete list of all officers of Regional
Bancshares and Bank of Xxxxx.
3.14 Indebtedness to and from Officers, Directors and
------------------------------------------------
Others. Except as set forth on Schedule 3.14 (Indebtedness
------ -------------
to and from Officers, Directors and Others), Regional Bancshares
and Bank of Xxxxx are not indebted to any of their shareholders,
directors, officers, employees or agents except for amounts due as
15
21
normal salaries, wages and bonuses and in reimbursement of
ordinary expenses on a current basis, and except as set forth on
Schedule 3.14, no such shareholder, director, officer,
-------------
employee or agent is indebted to Regional Bancshares or Bank of
Xxxxx except for advancements for ordinary business expenses in a
normal amount.
3.15 Absence of Conflicts. The execution and delivery
--------------------
by Regional Bancshares of this Agreement and the consummation of
the transactions herein contemplated do not and will not violate
or conflict with any statute, regulation, judgment, order, writ,
decree or injunction applicable to Regional Bancshares or Bank of
Xxxxx or any of their respective properties or assets. Except as
set forth in Schedule 3.15 (Conflicts) (as to which all
-------------
appropriate consents, waivers or approvals have been or will be
obtained by Regional Bancshares prior to the Merger Closing), the
execution and delivery by Regional Bancshares of this Agreement
and the consummation of the transactions herein contemplated do
not and will not violate, conflict with, result in a breach of,
constitute a default (or an event which with due notice or lapse
of time or both would constitute a default) under, result in the
termination of, accelerate the performance required by, or result
in the creation of any lien, pledge, security interest, charge or
other encumbrance upon any of the properties or assets of
Regional Bancshares or Bank of Xxxxx under any of the terms,
conditions or provisions of any note, bond, mortgage, indenture,
deed of trust, or loan agreement or other agreement, instrument
or obligation to which Regional Bancshares or Bank of Xxxxx is a
party, or by which either of them or any of their respective
properties or assets may be bound or affected.
3.16 Litigation. Except as set forth in Schedule 3.16
---------- -------------
(Regional Bancshares Litigation), neither Regional Bancshares nor Bank of
Xxxxx is engaged in, or party to or (to the knowledge of Regional Bancshares)
threatened with, any legal action or other proceeding or investigation before
any court, arbitrator or governmental agency, the outcome of which could
result in a judgment that (singly or in the aggregate) could
materially affect the business, properties, assets, prospects or
condition of Regional Bancshares and Bank of Xxxxx taken as a
whole. Except as set forth in Schedule 3.16, there are no
-------------
outstanding orders, rulings, decrees, judgments or stipulations
to which Regional Bancshares or Bank of Xxxxx is a party or by
which either is bound by or with any court, arbitrator or
governmental agency which could result in a judgment, order or
award that (singly or in the aggregate) could materially affect
the business, properties, assets, prospects or condition of
Regional Bancshares and Bank of Xxxxx taken as a whole.
3.17 Contracts. Except as set forth in Schedule 3.17
--------- -------------
(Contracts), (i) there are no employment, management,
consulting, deferred compensation, severance or other similar
agreements or any union or collective bargaining agreements or
any contracts or agreements with any labor organizations
(collectively, "Employment Agreements") binding upon Regional
Bancshares or Bank of Xxxxx, (ii) there is no deferred
compensation, savings, profit sharing, severance pay, pension or
retirement plan or arrangement; (iii) there is no material lease
or license with
16
22
respect to any property, real or personal, whether as landlord, tenant,
licensor or licensee; (iv) there is no agreement, contract, or indenture
relating to the borrowing of money by Regional Bancshares or Bank of Xxxxx,
excluding endorsements made for collection and guarantees made in the
ordinary course of business, and (v) there is no other contract,
agreement, arrangement, understanding or other obligation, to or
by which Regional Bancshares or Bank of Xxxxx is subject or
bound, which requires any payment of $100,000 or more or is
otherwise material to Regional Bancshares or Bank of Xxxxx taken
as a whole. (The foregoing is not intended to include
certificates of deposit or loan commitments issued in the
ordinary course of business).
3.18 Insurance. Each of Regional Bancshares and Bank
---------
of Xxxxx maintains and has maintained continuously since
January 1, 1993 insurance with insurers that in the best judgment
of management of Regional Bancshares are sound and reputable, on
its assets, and upon its business and operations, against loss or
damage, risks, hazards and liabilities of the kinds customarily
insured against by prudent corporations engaged in the same or
similar businesses. Each of Regional Bancshares and Bank of
Xxxxx maintains in effect all insurance required to be carried by
it by law or by any agreement by which either is bound. All
material claims under any policies of insurance maintained by
Regional Bancshares have been filed in due and timely fashion; in
the best judgment of the management of Regional Bancshares, such
insurance coverage is adequate. Schedule 3.18 (Insurance
-------------
Policies) contains a complete and accurate list and brief
description of Regional Bancshares' and Bank of Alton's business
and property insurance policies and of life insurance policies
maintained by Regional Bancshares or Bank of Xxxxx on the lives
of certain of its officers and employees.
To the best of Regional Bancshares' knowledge, Regional
Bancshares and Bank of Xxxxx have each taken or will take all
requisite action (including without limitation 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 (other
than matters arising in connection with this Agreement and the
transactions contemplated hereby) occurring prior to the Merger
Effective Time that are known to Regional Bancshares, except for
such matters which, individually or in the aggregate, will not
have and reasonably could not be expected to have a material
adverse effect on the financial condition of Regional Bancshares
and Bank of Xxxxx, taken as a whole.
3.19 Conduct. Since June 30, 1996, Regional
-------
Bancshares and Bank of Xxxxx have not:
3.19(a) conducted their business or entered into any
transaction otherwise than in the ordinary course;
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23
3.19(b) discharged or satisfied any lien or
encumbrance or paid any obligation or liability other than those
shown on the June 30, 1996 Regional Financial Statements or
incurred after the date thereof in the ordinary course of
business;
3.19(c) purchased or otherwise acquired assets, or
mortgaged, pledged, or subjected to lien, charge or other
encumbrance any of their assets, or sold or transferred any such
assets, except in the ordinary course of business;
3.19(d) declared, agreed to declare, set aside or
paid any dividend or other distribution in respect of their
capital stock (except regular cash dividends of Regional
Bancshares on its capital stock of the character, amount and
frequency theretofore paid or dividends to Regional Bancshares
from Bank of Xxxxx) or, directly or indirectly purchased,
redeemed, or otherwise acquired or agreed to purchase or redeem
or otherwise acquire any shares of such stock. (The foregoing
shall not prevent any dividend made in accordance with Section
5.3((b)(xiii)).)
3.19(e) except as set forth in Schedule 3.19(e)
----------------
(Bonuses), made any accrual or arrangement for or payment of
bonuses or special compensation of any kind or any severance or
termination pay to any of their present employees, except for
bonuses in accordance with the normal and usual practice of
Regional Bancshares and Bank of Xxxxx, increased the rate of
compensation payable or to become payable by them to any of their
employees, except in accordance with the normal and usual
practice of Regional Bancshares and Bank of Xxxxx, or instituted
or made any material increase in any employee welfare, retirement
or similar plan or arrangement;
3.19(f) entered into any other transaction other
than in the ordinary course of business; or
3.19(g) agreed to take any of the foregoing actions.
3.20 Fiduciary Responsibilities. Regional Bancshares,
--------------------------
to its knowledge, represents that Bank of Xxxxx has performed all
of its duties in its capacity as trustee, executor,
administrator, registrar, guardian, custodian, escrow agent,
receiver or any other fiduciary in a manner which complies in all
material respects with all applicable laws, regulations, orders,
agreements, xxxxx, instruments and common law standards.
3.21 FDIC Insurance. The deposits of Bank of Xxxxx
--------------
are insured by the FDIC in accordance with the Federal Depository
Insurance Act ("FDIA"), and Bank of Xxxxx has paid all
assessments and filed all reports required under the FDIA.
3.22 Large Deposits. Except as set forth in Schedule
--------------
3.22 (Large Deposits), (which sets forth the amount of deposits
over $250,000 maintained by any
18
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depositor, without naming such depositors), no person, corporation,
partnership, trust, estate or other entity, either alone or together with such
person's or entity's affiliates, has deposits in certificates of deposits or
checking, savings or other accounts of Bank of Xxxxx in any amount aggregating
more than $500,000. Schedule 3.22 sets forth the total dollar amount of all
-------------
deposits in certificates of deposits or checking, savings or other accounts of
Bank of Xxxxx by directors and executive officers of Regional Bancshares and
Bank of Xxxxx and their affiliates as a group as of June 30, 1996. As used in
this Section 3.22 an "affiliate" of a person or entity includes such person's
------------
spouse and minor children and any entity ten or more percent of whose voting
securities or other ownership interests are known by Regional Bancshares, to
be owned, directly or indirectly, by such person, his spouse and/or minor
children or by such entity.
3.23 Broker. No broker or finder has acted on behalf
------
of Regional Bancshares or Bank of Xxxxx in connection with this
Agreement (or the consummation of the transactions contemplated
herein) or is entitled to any commission or finder's fee based
upon agreements or understandings made by Regional Bancshares or
Bank of Xxxxx in connection with this Agreement (or the
consummation of the transactions contemplated herein).
3.24 Labor. No work stoppage involving Regional
-----
Bancshares or Bank of Xxxxx is pending or, to the best knowledge
of Regional Bancshares, threatened. Neither Regional Bancshares
nor Bank of Xxxxx is involved in, or to the best knowledge of
Regional Bancshares, threatened with or affected by, any labor
dispute, arbitration, lawsuit or administrative proceeding
involving the employees of Regional Bancshares or Bank of Xxxxx.
Employees of Regional Bancshares and Bank of Xxxxx are not
represented by any labor union nor are any collective bargaining
agreements otherwise in effect with respect to such employees,
and to the best of Regional Bancshares' knowledge, there have
been no efforts to unionize or organize any employees of Regional
Bancshares or Bank of Xxxxx during the past five years.
3.25 Intellectual or Other Intangible Property. To
------------------------------------------
the best of Regional Bancshares' knowledge, (a) all Intellectual
Property or other intangible property used by Regional Bancshares
or Bank of Xxxxx is valid and existing, (b) good and marketable
title to all such items together with all common law rights to
the subject matter thereof is held by Regional Bancshares or Bank
of Xxxxx, free and clear of liens; (c) there exists no
restriction on the use or transfer of any such item; (d) there
are no interferences, challenges, proceedings or infringement
suits pending or threatened with respect to any such item; and
(e) neither Regional Bancshares nor Bank of Xxxxx has granted a
license to any other party with respect to any such item. To the
best of Regional Bancshares' knowledge, neither Regional
Bancshares nor Bank of Xxxxx is infringing and has not infringed
upon the right of any other person under any Intellectual
Property or other intangible property right
19
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and no other person is infringing upon any Intellectual Property or other
intangible property right held by Regional Bancshares or Bank of Xxxxx.
3.26 Environmental Matters
---------------------
3.26(a) Regional Bancshares and Bank of Xxxxx are in
material compliance with all Environmental Laws. Neither
Regional Bancshares or Bank of Xxxxx has received any
communication alleging that Regional Bancshares or Bank of Xxxxx
is not in such compliance and, to the best knowledge of Regional
Bancshares, there are no present circumstances that would prevent
or interfere with the continuation of such compliance.
3.26(b) To the best of Regional Bancshares'
knowledge, there are no past or current operations, conditions,
activities, practices or circumstances on any of the properties
owned, leased or operated by Regional Bancshares or Bank of Xxxxx
which have been or are in material violation of, or may give rise
to a material liability, loss or expense under any Environmental
Law. To the best of Regional Bancshares' knowledge, there has
been no material disposal or release of any Materials of
Environmental Concern on, under or from such properties.
3.26(c) To the best of Regional Bancshares'
knowledge, there are no past or present actions, activities,
circumstances, conditions, events or incidents that could
reasonably form the basis of any material Environmental Claim or
other claim or action or governmental investigation under any
Environmental Law against Regional Bancshares or Bank of Xxxxx or
against any person or entity whose liability for any material
Environmental Claim Regional Bancshares or Bank of Xxxxx has or
may have retained or assumed either contractually or by operation
of law.
3.26(d) Regional Bancshares has disclosed any
environmental studies conducted by it or Bank of Xxxxx during the
past five years with respect to any properties owned, leased or
operated by it as of the date hereof.
3.26(e) To the best knowledge of Regional
Bancshares, there have been no Materials of Environmental Concern
disposed or released on, under or from any real property which
Regional Bancshares Bank has a security interest in, nor is there
any Environmental Claim in connection with such properties.
3.27 Tax Matters
-----------
3.27(a) Regional Bancshares and Bank of Xxxxx have
timely filed or caused to be filed with the appropriate
Government entity all tax returns and reports required to be
filed, including income, withholding, employment, and estimated
tax and informational returns ("Tax Returns") and no Tax Returns
have been amended. There are no grounds for assertion of any
understatement penalty
20
26
under Section 6661 (prior to repeal) of the Internal Revenue Code of 1986, as
amended (the "Code") or Section 6662 of the Code.
3.27(b) All Taxes (whether or not reflected in Tax
Returns as filed) payable by Regional Bancshares or Bank of Xxxxx
with respect to all periods reflected on Tax Returns have been
timely and fully paid, and to the best knowledge of Regional
Bancshares, there are no grounds for the assertion or assessment
of any additional Taxes against Regional Bancshares or Bank of
Xxxxx or their assets with respect to such periods. There is no
waiver of any statute of limitations in effect with respect to
any Tax Returns.
3.27(c) The consolidated balance sheets of Regional
Bancshares as of June 30, 1996 provide an adequate reserve,
computed in accordance with GAAP as applicable to Regional
Bancshares for the year-to-date period, for all Taxes up to and
including the dates of such balance sheets, whether or not a Tax
Return has been filed for such period.
3.27(d) Copies of all U.S. federal income Tax
Returns, tax examination reports and statements of deficiencies
assessed against, or agreed to with respect to Regional
Bancshares or Bank of Xxxxx with respect to the last three (3)
years have been made available to Mercantile.
3.27(e) Regional Bancshares and Bank of Xxxxx are
not and never have been members of an "affiliated group" within
the meaning of Section 1504 of the Code other than the affiliated
group of which Regional Bancshares is the common parent.
3.27(f) Regional Bancshares and Bank of Xxxxx have
materially complied with all laws relating to the withholding of
Taxes and the payment thereof (including, without limitation,
withholding of Taxes under Section 1441 and 1442 of the Code, or
any similar provision under foreign laws), and have timely and
properly withheld from employee wages and paid over to the proper
Government authority all amounts required to be withheld and paid
over under applicable law.
3.27(g) Neither Regional Bancshares nor Bank of
Xxxxx are a party to any safe harbor lease within the meaning of
Section 168(f)(8) of the Code, as in effect prior to amendment by
the Tax Equity and Fiscal Responsibility Act of 1982. None of
the assets of Regional Bancshares or Bank of Xxxxx have been
financed with or directly or indirectly secures any industrial
revenue bonds or debt the interest on which is tax-exempt under
Section 103(a) of the Code. Neither Regional Bancshares nor Bank
of Xxxxx is a borrower or guarantor of any outstanding industrial
revenue bonds, and are not a tenant, principal user or related
person to any principal user (within the meaning of Section
144(a) of the Code) of any property which has been financed or
improved with the proceeds of any industrial revenue bonds.
21
27
3.27(h) Regional Bancshares is not a United States
Real Property Holding Company within the meaning of Section
897(c) of the Code and Treasury Regulations thereunder.
3.27(i) None of the property owned by Regional
Bancshares or Bank of Xxxxx is tax-exempt use property within the
meaning of Section 168(h) of the Code.
3.27(j) No consent has been filed relating to
Regional Bancshares or Bank of Xxxxx pursuant to Section 341(f)
of the Code.
3.27(k) As of the Merger Effective Time, neither
Regional Bancshares or Bank of Xxxxx is a partner in any joint
venture, partnership or other arrangement or contract that could
be treated as a partnership for federal income tax purposes.
3.27(l) Neither Regional Bancshares nor Bank of
Xxxxx has any unused net operating loss, unused net capital loss,
unused credit, unused foreign tax credit, or excess charitable
contribution for federal income tax purposes as of the Merger
Effective Time.
3.28 Employee Benefit Plans
----------------------
3.28(a) Set forth in Schedule 3.28 (Benefit
-------------
Plans) is a schedule of all Regional Bancshares or Bank of Xxxxx
stock option, employee stock purchase and stock bonus plans,
stock appreciation rights or phantom stock plans, qualified
pension or profit-sharing plans, any deferred compensation, bonus
or group insurance contract, any plan or policy providing for
"fringe benefits" to its employees (including but not limited to,
vacation, disability, sick leave, medical, hospitalization, life
insurance and other insurance plans and related benefits), any
employment agreement and any other incentive, welfare or employee
benefit plan or agreement maintained for the benefit of
directors, former directors, employees or former employees of
Regional Bancshares or Bank of Xxxxx, and has furnished to
Mercantile accurate and complete copies of the same together with
(i) the most recent actuarial and financial reports prepared with
respect to any qualified plans, (ii) the most recent annual
reports filed with any governmental agency, and (iii) all rulings
and determination letters and any open requests for rulings or
letters that pertain to any qualified plan, and (iv) general
notification to employees of their rights under Code Section
4980B and form of letter(s) distributed upon the occurrence of a
qualifying event described in Code Section 4980B, in the case of
a Plan that is a "group health plan" as defined in Code Section
162(i). There are no negotiations, demands or proposals which
are pending or have been made which concern matters now covered,
or that would be covered, by the employee benefit plans.
22
28
3.28(b) None of Regional Bancshares, Bank of Xxxxx,
any pension plan maintained by any of them and qualified under
Section 401 of the Code or, to the best of Regional Bancshares'
knowledge, any fiduciary of such plan has incurred any material
liability to the Pension Benefit Guaranty Corporation (the
"PBGC") or the Internal Revenue Service with respect to any
employees of Regional Bancshares or Bank of Xxxxx, except
liabilities to the PBGC pursuant to Section 4007 of ERISA, all of
which have been fully paid. To the best of Regional Bancshares'
knowledge, no reportable event, except reportable events for
which the 30-day notice requirement has been waived by PBGC
Regulation 2615, under Section 4043(b) of ERISA has occurred with
respect to any such pension plan.
3.28(c) Neither Regional Bancshares nor Bank of
Xxxxx (i) participates in or has ever participated in a multi-
employer plan (as such term is defined in ERISA), (ii) has been a
member of a controlled group which contributed to a multi-
employer plan, or (iii) has been under common control with an
employer which contributed to a multi-employer plan.
3.28(d) A favorable determination letter has been
issued by the Internal Revenue Service with respect to each
"employee pension plan" (as defined in Section 3(2) of ERISA) of
Regional Bancshares or Bank of Xxxxx which is intended to qualify
under Section 401 of the Code to the effect that such plan is
qualified under Section 401 of the Code and the trust associated
with such employee pension plan is tax exempt under Section 501
of the Code. No such letter has been revoked or, to the best of
Regional Bancshares' knowledge, is threatened to be revoked and
Regional Bancshares does not know of any ground on which such a
revocation could be based. Neither Regional Bancshares nor Bank
of Xxxxx has any material liability under any such plan that is
not reflected on the consolidated balance sheet of Regional
Bancshares at June 30, 1996 included in the Regional Financial
Statements, other than liabilities incurred in the ordinary
course of business in connection therewith subsequent to the date
thereof.
3.28(e) To the best of Regional Bancshares'
knowledge, no prohibited transaction (which shall mean any
transaction prohibited by Section 406 of ERISA and not exempt
under Section 408 of ERISA or Section 4975 of the Code) has
occurred with respect to any employee benefit plan maintained by
Regional Bancshares or Bank of Xxxxx.
3.28(f) Except as set forth in Schedule 3.28,
-------------
neither Regional Bancshares nor Bank of Xxxxx maintains any
defined benefit plans or other plans subject to Section 412 of
the Code or Title IV of ERISA.
3.28(g) Each employee benefit plan of Regional
Bancshares and Bank of Xxxxx complies and has been operated in
compliance in all material respects with the applicable
provisions of ERISA, the Code, all regulations, rulings and
23
29
announcements promulgated or issued thereunder and all other
applicable governmental laws and regulations.
3.28(h) There are no pending or, to the best
knowledge of Regional Bancshares, threatened or anticipated
claims, actions, proceedings or investigations or facts which
would give rise to claims, actions, proceedings or investigations
(other than routine claims for benefits) by, on behalf of or
against any of the employee benefit plans maintained by Regional
Bancshares or Bank of Xxxxx or any trust related thereto or any
fiduciary thereof.
3.28(i) All required reports and descriptions of
each employee benefit plan (including IRS Form 5500 Annual
Reports, Summary Annual Reports and Summary Plan Descriptions)
have been timely filed and distributed.
3.28(j) Any notices required by ERISA or the Code or
any other state or federal law or any ruling or regulation of any
state or federal administrative agency with respect to each
employee benefit plan have been appropriately given.
3.28(k) All contributions for all periods ending
prior to the Merger Closing (including periods from the first day
of the current plan year to the Merger Closing) will be made
prior to the Merger Closing by Regional Bancshares or Bank of
Xxxxx and all members of the controlled group in accordance with
past practice and the recommended contribution in the applicable
actuarial report.
3.28(l) All insurance premiums (including premiums
to the PBGC) have been paid in full, subject only to normal
retrospective adjustments in the ordinary course, with regard to
the plans for policy years or other applicable policy periods
ending on or before the Merger Closing.
3.28(m) All of the employee benefit plans, to the
extent applicable, are in compliance with Section
1862(b)(4)(A)(i) of the Social Security Act and Regional
Bancshares does not have any liability for any excise tax imposed
by Code Section 5000.
3.28(n) With respect to any employee benefit plan
which is an employee welfare benefit plan (within the meaning of
ERISA Section 3(1)) (a "Welfare Plan"): (i) each such Welfare
Plan which is intended to meet the requirements for tax-favored
treatment under Subchapter B of Chapter 1 of the Code meets such
requirements; (ii) there is no disqualified benefit (as such term
is defined in Code Section 4976(b)) which would subject Regional
Bancshares or Bank of Xxxxx or any affiliate to a tax under Code
Section 4976(a); (iii) each and every such Welfare Plan which is
a group health plan (as such term is defined in Code Section
162(i)(3)) complies and in each and every case has complied with
the applicable requirements of Code Section 4980B, Title XXII of
the Public Health Service Act and the applicable provisions of
the Social Security Act; and (iv) each
24
30
such Welfare Plan (including any such plan covering former employees of
Regional Bancshares or Bank of Xxxxx) may be amended or terminated by
Regional Bancshares or Bank of Xxxxx.
3.28(o) Neither Regional Bancshares nor Bank of
Xxxxx has any liability for any post-retirement health, medical
or similar benefit of any kind whatsoever, except as required by
statute or regulation.
3.28(p) All expenses and liabilities relating to all
of the plans have been, and will upon the Merger Closing be fully
and properly accrued on Regional Bancshares' books and records
and the Regional Financial Statements reflect all of such
liabilities in a manner satisfying the requirements of Financial
Accounting Standards 87 and 88.
3.29 Alien Employment Eligibility. With respect to
----------------------------
each person employed by Regional Bancshares or Bank of Xxxxx, on
or after May 1, 1987, and who actually commenced such employment
on or after November 6, 1986: (a) Regional Bancshares or Bank of
Xxxxx hired such person in compliance with the Immigration Reform
and Control Act of 1986 and the rules and regulations thereunder
("IRCA"); and (b) Regional Bancshares and Bank of Xxxxx have
complied with all recordkeeping and other regulatory requirements
under IRCA.
3.30 Material Adverse Change. Except as otherwise
-----------------------
disclosed in any of the Schedules referenced herein, since June
30, 1996, there has been no material adverse change in the
financial condition, of Regional Bancshares and Bank of Xxxxx,
taken as a whole, except as may have resulted or may result from
changes to laws and regulations, GAAP or regulatory accounting
principles, interpretations thereof, other conditions that affect
the banking industry generally, or changes in the general level
of interest rates.
3.31 Absence of Undisclosed Liabilities.
----------------------------------
3.31(a) As of the date of this Agreement, neither
Regional Bancshares nor Bank of Xxxxx has any debts, liabilities
or obligations, whether accrued, absolute, contingent or
otherwise and whether due or to become due, which are required to
be reflected in the Regional Financial Statements or the notes
thereto in accordance with GAAP, except:
3.31(b) liabilities and obligations reflected on the
Regional Financial Statements;
3.31(c) operating leases reflected on Schedule 3.31(a)
----------------
(Undisclosed Liabilities); and
25
31
3.31(d) debts, liabilities or obligations incurred
since June 30, 1996 in the ordinary and usual course of their
respective businesses, none of which are for breach of contract,
breach of warranty, torts, infringements or lawsuits and none of
which have a material adverse effect on the financial condition
to Regional Bancshares and Bank of Xxxxx, taken as a whole.
3.31(e) To the best of Regional Bancshares'
knowledge, neither Regional Bancshares nor Bank of Xxxxx was as
of June 30, 1996 and since such date to the date hereof has
become a party to, any contract or agreement which affected,
affects or may reasonably be expected to affect, materially and
adversely, the financial condition or business of Regional
Bancshares and Bank of Xxxxx, taken as a whole.
3.32 Interest Rate Risk Management Instruments.
-----------------------------------------
Neither Regional Bancshares nor Bank of Xxxxx are parties to, nor
are any of their properties or assets bound by, interest rate
swaps, caps, floors and option agreements and other interest rate
risk management arrangements.
3.33 West Pointe Common. Regional Bancshares owns, as
------------------
of the date hereof, 12,250 shares of West Pointe Common. West
Pointe Bank & Trust Company is not an "affiliate" of Regional
Bancshares, as that term is defined in Rule 144 under the 0000
Xxx. Xxxx Xxxxxx Xxxxxx held of record by Regional Bancshares
was acquired by Regional Bancshares as of a date at least three
years prior to the date hereof.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF MERCANTILE AND MERGER SUB
Mercantile and Merger Sub, jointly and severally,
represent and warrant to Regional Bancshares as follows:
4.1 Mercantile Organization, Good Standing and Capital
--------------------------------------------------
Stock. Mercantile is a corporation duly organized, validly
-----
existing and in good standing under the laws of the State of
Missouri and each Significant Subsidiary (as defined herein) is
duly organized, validly existing and in good standing under the
laws of the jurisdiction of its incorporation or organization.
Mercantile has all requisite power and authority (corporate and
other) to (i) enter into this Agreement and to perform the
obligations hereunder and thereunder to be performed by it, and
(ii) own, operate and lease its properties and carry on its
business as it is now being conducted in each jurisdiction where
its business is being conducted. Mercantile is duly qualified to
do business and is in good standing in each jurisdiction where
the character of the properties owned or leased by it or the
nature of the business transacted by it requires that it be so
qualified, except where the failure to so qualify would not have
a material adverse effect on the business, operations or
financial condition of Mercantile. Mercantile is a bank holding
company duly
26
32
registered with the Board of Governors of the Federal Reserve System (the
"Federal Reserve Board") under the Act. Mercantile owns in excess of 99% of
the issued and outstanding shares of capital stock of each of the Significant
Subsidiaries (other than directors' qualifying shares). A
"Significant Subsidiary" shall mean a Subsidiary (as defined
herein), the total assets of which comprise 10% or more of the
total assets of Mercantile and its Subsidiaries taken as a whole,
and regardless of such definition shall include Merger Sub. A
"Subsidiary" means a corporation, bank or other entity of which a
25% equity interest is owned or controlled, directly or
indirectly, by Mercantile. The authorized capital stock of
Mercantile consists of (i) 100,000,000 shares of Mercantile
Common, of which, as of June 30, 1996, 63,278,793 shares were
issued and 62,673,041 were outstanding and (ii) 5,000,000 shares
of preferred stock, no par value ("Mercantile Preferred Stock"),
issuable in series, of which, as of the date hereof, no shares
are issued and outstanding. Mercantile has designated 1,000,000
shares of Mercantile Preferred Stock as "Series A Junior
Participating Preferred Stock" and has reserved such shares for
issuance upon exercise of Preferred Stock Purchase Rights (the
"Rights") under a Rights Agreement dated May 23, 1988 (the
"Rights Agreement") between Mercantile and Mercantile Bank of St.
Louis National Association, as Rights Agent. As of June 30,
1996, Mercantile had reserved: (i) 4,112,103 shares of Mercantile
Common for issuance under various Mercantile employee and/or
director stock option, incentive and/or benefit plans
("Mercantile Employee/Director Stock Grants"); (ii) 325,843
shares of Mercantile Common for issuance upon the acquisition of
Peoples State Bank ("Peoples Bank") pursuant to the Agreement and
Plan of Reorganization dated as of December 19, 1995, by and
among Peoples Bank, Mercantile, Merger Sub, and Peoples State
Bankshares, Inc.; (iii) 1,177,066 shares of Mercantile Common for
issuance upon the acquisition of TODAY'S BANCORP, INC.
("Today's") pursuant to the Agreement and Plan of Merger dated as
of March 19, 1996, by and among Today's, Mercantile and Merger
Sub; and (iv) 258,753 shares of Mercantile Common for issuance
upon the acquisition of First Financial Corporation of America
("First Financial") pursuant to Agreement and Plan of Merger
dated as of July 9, 1996, by and among First Financial,
Mercantile and Merger Sub. From June 30, 1996 through the date
of this Agreement, no shares of Mercantile Common have been
issued, excluding any such shares which may have been issued in
connection with Mercantile Employee/Director Stock Grants.
Mercantile continually evaluates possible acquisitions and
may prior to the Merger Effective Time enter into one or more
agreements providing for, and may consummate, the acquisition by
it of another bank, association, bank holding company, savings
and loan holding company or other company (or the assets thereof)
for consideration that may include equity securities. In
addition, prior to the Merger Effective Time, Mercantile may,
depending on market conditions and other factors, otherwise
determine to issue equity, equity-linked or other securities for
financing purposes. Notwithstanding the foregoing, Mercantile
will not take any action that would (i) prevent the transactions
contemplated hereby from qualifying as a reorganization within
the meaning of Section 368 of the Code or (ii)
27
33
materially impede or delay receipt of any approval required hereunder or the
consummation of the transactions contemplated by this Agreement.
Except as set forth above, there are no other equity securities
of Mercantile outstanding. All of the issued and outstanding
shares of Mercantile Common are validly issued, fully paid, and
nonassessable, and have not been issued in violation of any
preemptive right of any shareholder of Mercantile. At the Merger
Effective Time, the Mercantile Common to be issued in the Merger
will be duly authorized, validly issued, fully paid and
nonassessable, and will not be issued in violation of any
preemptive right of any shareholder of Mercantile.
4.2 Merger Sub Organization, Good Standing and Capital
--------------------------------------------------
Stock. Merger Sub is a corporation duly organized, validly
-----
existing and in good standing under the laws of the State of
Missouri, and has all requisite power and authority (corporate
and other) to enter into this Agreement and to perform the
obligations hereunder and thereunder to be performed by it. The
authorized capital stock of Merger Sub is 30,000 shares Common
Stock, par value $1.00 per share ("Merger Sub Common"). As of
the date hereof, all outstanding shares of Merger Sub Common are
validly issued, outstanding, fully paid and nonassessable and
owned of record and beneficially by Mercantile.
4.3 Authorization.
-------------
4.3(a) The execution, delivery and performance of
this Agreement have been duly and validly authorized by all
necessary corporate action on the parts of Mercantile and Merger
Sub. This Agreement has been duly executed and delivered by
Mercantile and Merger Sub. Assuming due authorization, execution
and delivery by Regional Bancshares and subject to receipt of
such approvals of regulatory authorities as may be required by
applicable law or regulation, this Agreement constitutes valid,
binding and enforceable obligations of Mercantile and Merger Sub,
except as limited by applicable bankruptcy, insolvency,
moratorium or other similar laws affecting the enforcement of
creditors' rights and remedies generally from time to time in
effect and by applicable law which may affect the availability of
equitable remedies.
4.3(b) Neither the execution, delivery and
performance by Mercantile and Merger Sub of this Agreement, nor
the consummation by Mercantile and Merger Sub of the transactions
contemplated hereby, nor compliance by Mercantile and Merger Sub
with any of the provisions hereof, will (i) violate, conflict
with or result in a breach of any provisions of, or constitute a
default (or an event which, with notice or lapse of time or both,
would constitute a default) or result in the termination of, or
accelerate the performance required by, or result in a right of
termination or acceleration of, or result in the creation of, any
lien upon any of the properties or assets of Mercantile or Merger
Sub under any of the terms, conditions or provisions of (x) their
respective Articles of Incorporation or Bylaws, or (y) any note,
bond, mortgage, indenture, deed of trust, license, lease,
agreement or other
28
34
instrument or obligation to which Mercantile or Merger Sub is a party or by
which they may be bound, or to which Mercantile or Merger Sub or any of their
respective properties or assets may be subject, or (ii) subject to
compliance with the statutes and regulations referred to in
Section 4.3(a), violate any judgment, ruling, order, writ,
injunction, decree, statute, rule or regulation applicable to
Mercantile or Merger Sub or any of their respective properties or
assets; other than violations, conflicts, breaches, defaults,
terminations, accelerations or Liens which would not have a
material adverse effect on Mercantile and its Subsidiaries, taken
as a whole.
4.3(c) Other than in connection with or in
compliance with the provisions of the Missouri Statute, the
Securities Act, the Exchange Act, the securities or blue sky laws
of the various states or filings, consents, reviews, authoriza-
tions, approvals or exemptions required under the Bank Holding
Company Act of 1954, as amended, the Federal Deposit Insurance
Act, as amended, or any required approvals of any regulatory
authority, no notice to, filing with, exemption or review by, or
authorization, consent or approval of, any public body or
authority is necessary for the consummation by Mercantile and
Merger Sub of the transactions contemplated by this Agreement.
4.4 Consolidated Financial Statements of Mercantile.
-----------------------------------------------
Each of the consolidated balance sheets of Mercantile in or
incorporated by reference into the Mercantile Reports (as defined
below), including any related notes and schedules, fairly
presents the financial position of Mercantile and its
------------------
Subsidiaries, taken as a whole, as of its date and each of the
-------------------------------
consolidated statements of income, changes in shareholders'
equity and cash flows or equivalent statements in the Mercantile
Reports, including any related notes and schedules, fairly
presents the results of operations, shareholders' equity and cash
flows, as the case may be, of Mercantile and its Subsidiaries,
taken as a whole, for the periods set forth therein, in each case
in accordance with GAAP consistently applied during the period
involved, except as may be noted therein.
4.5 Mercantile Reports.
------------------
4.5(a) Mercantile has filed all its reports and
other documents required to be filed by it under the Securities
Exchange Act of 1934, as amended (the "1934 Act"), and the
Securities Act of 1933, as amended (the "1933 Act") and has
delivered to Regional Bancshares copies of all such reports and
other documents filed by Mercantile since December 31, 1993.
Mercantile's Annual Report on Form 10-K for the year ended
December 31, 1995, its Quarterly Reports on Form 10-Q for the
periods ended March 31, 1996 and June 30, 1996, and any other
reports and documents filed by Mercantile under the 1934 Act
since December 31, 1995 and all documents filed by Mercantile
under the 1933 Act since December 31, 1993 (collectively, the
"Mercantile Reports") comply in all
29
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material respects as to form and content with the 1934 Act or the 1933 Act, as
the case may be.
4.5(b) Mercantile and each Significant Subsidiary
which is a bank ("Significant Banking Subsidiary") have filed all
material reports, registrations and statements, together with any
amendments required to be made with respect thereto, that it was
required to file with (i) the Federal Reserve Board, (ii) the
Office of the Comptroller of the Currency, (iii) the FDIC and
(iv) any applicable state banking regulatory authorities and all
other material reports and statements required to be filed by it,
including, without limitation, any report or statement required
to be filed pursuant to the laws, rules or regulations of the
Federal Reserve Board, the Office of the Comptroller of the
Currency, the FDIC or applicable state banking regulatory
authorities and have paid all fees or assessments due and payable
in connection therewith.
4.6 Compliance with Laws and Agreements. Neither
-----------------------------------
Mercantile nor any of its Subsidiaries is in default under or in
violation of any provision of its Articles or Certificate of
Incorporation, Articles of Association or Bylaws or any note,
bond, indenture, mortgage, deed of trust, loan agreement, or any
other agreement to which it is a party or by which it is bound or
to which any of its properties or assets is subject, other than
such defaults or violations as would not (singly or in the
aggregate) have a material adverse effect on the business,
operations, prospects or financial condition of Mercantile and
its Subsidiaries taken as a whole, nor is Mercantile or any of
its Subsidiaries in violation of any statute, rule, regulation,
order, writ, decree or injunction of any court or governmental
agency or any body having jurisdiction over them or any of their
properties which, if enforced, would have (singly or in the
aggregate) a material adverse effect on the business, operations,
prospects or financial condition of Mercantile and its
Subsidiaries, taken as a whole.
4.7 Shares to be Issued in Merger. The Mercantile
-----------------------------
Common which the holders of Regional Bancshares Common will be
entitled to receive upon consummation of the Merger will, at the
Merger Effective Time, be duly authorized and will, when issued
pursuant to this Agreement, be validly issued and outstanding,
fully paid and nonassessable. In accordance with the provisions
of Section 5.4(c) hereof, Mercantile has agreed to use its
reasonable best efforts to file as soon as practicable with the
Securities and Exchange Commission, and to cause to become
effective, a Registration Statement (as defined in
Section 5.4(c)) concerning the shares of Mercantile Common to be
received in the merger by holders of Regional Bancshares Common,
and to cause such shares to be listed for trading on The New York
Stock Exchange.
4.8 Litigation. Neither Mercantile nor any
----------
Subsidiary is engaged in, or party to, or (to the knowledge of
Mercantile) threatened with, any legal action or other proceeding
or investigation before any court, arbitrator or governmental
30
36
agency, and neither Mercantile nor any Subsidiary (to the
knowledge of Mercantile) is subject to any potential adverse
claim, the outcome of which could result in a nonmonetary
judgment, order or award that (singly or in the aggregate) could
materially adversely affect the business, properties, assets,
prospects or conditions of Mercantile and its Subsidiaries taken
as a whole. Except as set forth in Schedule 4.8, there are
------------
no outstanding orders, rulings, decrees, judgments or
stipulations to which Mercantile or any Subsidiary is a party or
by which it is bound or with any court, arbitrator or
governmental agency which could result in a nonmonetary judgment,
order or award that (singly or in the aggregate) could materially
adversely affect the business, properties, assets, prospects or
condition of Mercantile and its Subsidiaries, taken as a whole.
4.9 Information in Proxy Statement and Registration
-----------------------------------------------
Statement. None of the information which will be included or
---------
incorporated by reference into the Registration Statement related
to Mercantile and any amendments thereto and none of the
information provided in writing by Mercantile to Regional
Bancshares for inclusion in the proxy statement to be furnished
to the stockholders of Regional Bancshares in connection with the
transactions contemplated herein is or will be false or
misleading in any material respect or omits or will omit to state
any fact necessary to make the statements therein, in light of
the circumstances under which they are or will be made, not false
or misleading in any material respect.
4.10 Material Adverse Change. Since June 30, 1996,
-----------------------
there has been no material adverse change in the financial
condition, of Mercantile and its Subsidiaries, taken as a whole,
except as may have resulted or may result from changes to laws
and regulations, GAAP, interpretations thereof, other conditions
that affect the banking industry generally, or changes in the
general level of interest rates.
ARTICLE 5
COVENANTS
5.1 Joint Covenants. Mercantile and Merger Sub
---------------
covenant and agree with Regional Bancshares, and Regional
Bancshares covenants and agrees with Mercantile and Merger Sub,
as follows:
5.1(a) Truth and Completeness of Representations
-----------------------------------------
and Warranties. In the event that either party becomes aware
--------------
of the occurrence or impending occurrence of any event which
would constitute or cause a breach by it of any of the
representations and warranties herein, or would have constituted
or caused a breach by it of the representations and warranties
herein, had such an event occurred or been known prior to the
date hereof, said party shall immediately give detailed and
written notice thereof to the other party, and shall, unless the
same has been waived in writing by the other party, use its
reasonable efforts to remedy
31
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the same, provided that such efforts, if not successful, shall not be deemed
to satisfy any condition precedent to the Merger.
5.1(b) Best Efforts. Subject to the terms and
------------
conditions herein provided, each of the parties hereto agrees to
use its respective best efforts to take, or cause to be taken,
all action, and to do, or cause to be done, all things necessary,
proper or advisable under applicable laws and regulations to
consummate and make effective the transactions contemplated by
this Agreement as expeditiously as possible, including, without
limitation, using its respective best efforts to lift or rescind
any injunction or restraining order or other order adversely
affecting the ability of the parties to consummate the
transactions contemplated hereby. Each party shall, and shall
cause each of its respective Subsidiaries to, use its best
efforts to obtain consents of all third parties and regulatory
authorities necessary or, in the opinion of Mercantile, desirable
for the consummation of the transactions contemplated by this
Agreement.
5.1(c) Cooperation/Inspection. Each party shall
----------------------
cooperate fully with the other in carrying out the transactions
contemplated herein, including without limitation obtaining all
the necessary approvals, regulatory or otherwise, needed to
consummate all such transactions. Each party shall advise each
other of the text of, and shall consult with each other
concerning, any news release proposed to be issued. Neither
party shall issue any such news release to which the other
reasonably objects unless such release is required by law.
Mercantile will timely file with the Securities and Exchange
Commission and promptly deliver thereafter to the other, copies
of all reports or other documents required to be filed under the
1934 Act by each beginning on the date hereof and terminating at
the Merger Effective Time.
5.1(d) Consents. Each party shall use its best
--------
efforts to obtain as promptly as practicable (and in any event
prior to the Merger Closing) all consents or waivers that may be
required under any loan or other agreement or document to which
it or any of its Subsidiaries is a party, or by which it or any
of its Subsidiaries, is bound, and such other consents as are
necessary or advisable in connection with the Merger.
5.1(e) Access and Information.
----------------------
5.1(e)(i) Mercantile and Regional Bancshares shall
each afford to the other, and to the other's accountants, counsel
and other representatives, full access during normal business
hours, during the period prior to the Merger Effective Time, to
all their respective properties, books, contracts, commitments
and records and, during such period, each shall furnish promptly
to the other (A) a copy of each report, schedule and other
document filed or received by it during such period pursuant to
the requirements of federal and state securities laws and (B) all
other information concerning its business, properties and
personnel as the
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other may reasonably request. Each party shall, and shall cause its advisors
and representatives to, (A) hold confidential all information obtained in
connection with any transaction contemplated hereby with respect to the other
party and its Subsidiaries which is not otherwise public knowledge, (B)
use their respective best efforts to cause all of such party's
confidential information obtained pursuant to this Agreement or
in connection with the negotiation of this Agreement to be
treated as confidential and not use, or knowingly permit others
to use, any such information unless such information becomes
generally available to the public. The availability or actual
delivery of information shall not affect the covenants,
representations and warranties of the party providing such
information that are contained in this Agreement or in any
certificates or other documents delivered pursuant hereto.
5.1(e)(ii) Mercantile shall promptly following the
date of this Agreement, commence its review of Regional
Bancshares and Bank of Xxxxx and their respective operations,
business affairs, prospects and financial condition, including,
without limitation, those matters which are the subject of the
Regional Bancshares' representations and warranties (the
"Mercantile Due Diligence Review"). Mercantile shall conclude
such review by no later than fifteen (15) Business Days after the
date of this Agreement (the "Mercantile Due Diligence Review
Period"), but the pendency of such Mercantile Due Diligence
Review shall not delay Mercantile's obligation pursuant to this
Agreement to file a Registration Statement with the Securities
and Exchange Commission and all other necessary applications and
filings with the appropriate Regulatory Authorities. Mercantile
shall advise Regional Bancshares of any situation, event,
circumstance or other matter which comes to the attention of
Mercantile during the Mercantile Due Diligence Review which could
potentially result in the termination of this Agreement by
Mercantile pursuant to Section 7.1(f) hereof, or, if applicable,
the absence of any situation, event, circumstance or other
matter, it being the intention of Mercantile to provide notice to
Regional Bancshares, as promptly as possible, of any perceived
impediment to the consummation of the Merger. Notwithstanding
anything hereinabove contained or implied to the contrary, the
Mercantile Due Diligence Review shall not limit, restrict or
preclude Mercantile, at any time or from time to time thereafter,
from conducting further such reviews or from exercising any
rights available to it hereunder as a result of the existence or
occurrence prior to the Mercantile Due Diligence Period of any
event or condition which was not detected in the Mercantile Due
Diligence Review by Mercantile and which constitutes a breach of
any representation, warranty or agreement of Regional Bancshares
under this Agreement.
5.2 Expenses. Each party hereto shall bear its own
--------
expenses incident to preparing, entering into and carrying out
this Agreement and to consummating the Merger, except Mercantile
or Merger Sub shall pay all printing and filing fees incurred in
connection with the Registration Statement (as hereinafter
defined) and the Proxy Statement (as hereinafter defined).
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5.3 Covenants of Regional Bancshares. Regional
--------------------------------
Bancshares covenants and agrees with Mercantile and Merger Sub as
follows:
5.3(a) Regional Bancshares Shareholder Approval.
-----------------------------------------
Regional Bancshares will, at a meeting of its stockholders duly
called by its Board of Directors (the "Stockholder Meeting"),
present for the authorization and approval of its stockholders,
this Agreement. The Proxy Statement for such meeting shall
include the materials which constitute the prospectus of
Mercantile and is contained in the Registration Statement on Form
S-4 as described in Section 5.4(c). Regional Bancshares
--------------
agrees that its Board of Directors will, consistent with its
fiduciary duties, at such stockholder meeting and in the proxy
material used in connection therewith, recommend to its
stockholders and request that the Merger be approved and this
Agreement be adopted.
5.3(b) Conduct of Business Pending Merger. From
----------------------------------
and after the date hereof until the Merger Effective Time, and
except as consented to by Mercantile in writing, Regional
Bancshares will and will cause Bank of Xxxxx to:
5.3(b)(i) maintain their tangible property and
assets in the present state of repair, order and condition,
reasonable wear and tear excepted;
5.3(b)(ii) maintain their books, accounts and
records in accordance with GAAP or regulatory accounting
principles, as the case may be, consistently applied;
5.3(b)(iii) comply in all material respects with
all laws applicable to the conduct of their business;
5.3(b)(iv) conduct their business only in the
usual, regular and ordinary course consistent with prior
practice, and will not make any purchase or sale or introduce any
method of management or operation in respect of such business or
property, except in a manner consistent with prior practice;
5.3(b)(v) make no change in their Articles of
Incorporation, Charter or Bylaws;
5.3(b)(vi) maintain and keep in full force and
effect all fire and other insurance on property and assets, all
of the liability and other casualty insurance, and all bonds on
personnel, presently carried by them;
5.3(b)(vii) duly and timely file all reports, tax
returns and other documents required to be filed with federal,
state, and local and other authorities; and
34
40
5.3(b)(viii) unless they are contesting the same
in good faith and have established reasonable reserves therefor,
pay when required to pay all Taxes indicated by such tax returns
or otherwise lawfully levied or assessed upon them, or any of
their properties or assets, or which they are otherwise legally
obligated to pay and withhold or collect and pay to the proper
governmental authorities or hold in separate bank accounts for
such payment all Taxes and other assessments which they believe
in good faith to be required by law to be so withheld or
collected;
5.3(b)(ix) not sell, mortgage, subject to lien,
pledge or encumber or otherwise dispose of any of their assets
otherwise than in the ordinary course of business;
5.3(b)(x) not redeem, retire or otherwise acquire
or agree to redeem or otherwise acquire any of their capital
stock or any option, warrant or right to acquire shares of its
capital stock or any security convertible into its capital stock,
or redeem or otherwise acquire any notes, or make any prepayment
on account of or in respect of any indebtedness for any borrowed
money;
5.3(b)(xi) make no change in the number of shares
of their capital stock issued and outstanding, and grant no
option or commitment relating to their capital stock or any
security convertible into their capital stock or any security the
value or return of which is measured by capital stock or any
security subordinated to the claims of their general creditors;
5.3(b)(xii) except as otherwise specifically
provided herein, not enter into or amend any employment or
severance contract or agreement with or Employee Plan covering,
or grant any salary or wage increase to, any director, officer,
employee or agent of Regional Bancshares or Bank of Xxxxx except
for normal increases in compensation to individual non-officer
employees in accordance with past practice, and will not increase
in any amount the benefits or compensation, if any, of any such
directors, officers, employees or agents under any Benefit Plan
or other contract or commitment, and will not pay nor agree to
pay any bonus or commission to any such director, officer,
employee or agent;
5.3(b)(xiii) not declare, set aside or pay any
dividends or other distributions, directly or indirectly, in
respect of its capital stock (other than dividends from Bank of
Xxxxx to Regional Bancshares), except that Regional Bancshares
may pay its regular quarterly dividend of $10.00 per share, in
accordance with its past practice; provided however, that if the
Merger Effective Time shall not have occurred prior to March 10,
1997, Regional Bancshares may declare, set aside or pay a
dividend for each share of Regional Bancshares Common for each
quarter thereafter in which the Mercantile Board of Directors
shall declare a dividend on shares of Mercantile Common in an
amount that equals the product of (i) 164% of the Stock
Distribution, and (ii) the amount of the dividend per share
35
41
declared by the Board of Directors of Mercantile; provided
further, however, that Regional Bancshares shall not declare or
pay any such regular quarterly dividend for any quarter in which
Regional Bancshares shareholders who will receive the Stock
Distribution in the Merger will be entitled to receive a regular
quarterly dividend on the shares of Mercantile Common to be
issued in the Merger;
5.3(b)(xiv) not merge or consolidate with any
other corporation or other entity, acquire any stock (except in a
fiduciary capacity or to realize upon collateral obtained in the
ordinary course of business), effect any reorganization or
recapitalization involving Regional Bancshares or Bank of Xxxxx;
not acquire any assets of any other person, corporation or
business organization except in the ordinary course of business,
or acquire any assets (including without limitation deposits) of,
or make any investment in, any financial institution;
5.3(b)(xv) not lease, sell or dispose of any
material part of their assets, make capital or fixed asset
expenditures in excess of $100,000 for any single item or
$250,000 in the aggregate, enter into any leases of fixed assets,
purchase any data processing equipment, waive or release any
right or cancel or compromise any debt or claim except in the
ordinary course of business, enter into any management,
maintenance, servicing or similar contracts having a term of more
than one year or providing for fees in excess of a rate of
$250,000 per year, or otherwise enter into any material contract,
transaction or commitment except in the ordinary course of
business;
5.3(b)(xvi) not make any loans, discounts or
commitments to loan or discount in excess of the applicable legal
lending limits;
5.3(b)(xvii) not (i) without first consulting with
Mercantile, enter into, renew or increase any loan or credit
commitment (including stand-by letters of credit) to, or invest
or agree to invest in any person or entity or modify any of the
material provisions or renew or otherwise extend the maturity
date of any existing loan or credit commitment (collectively,
"Lend to") in an amount equal to or in excess of $200,000; (ii)
without first consulting with and obtaining the written consent
of Mercantile, Lend to any person or entity in an amount equal to
or in excess of $400,000; (iii) Lend to any person other than in
accordance with lending policies as in effect on the date hereof,
provided that in the case of clauses (i) through (iii) Regional
Bancshares or Bank of Xxxxx may make any such loan in the event
(A) Regional Bancshares or Bank of Xxxxx has delivered to
Mercantile or its designated representative a notice of its
intention to make such loan and such information as Mercantile or
its designated representative may reasonably require in respect
thereof and (B) Mercantile or its designated representative
shall not have reasonably objected to such loan by giving written
or facsimile notice of such objection within two business days
following the delivery to Mercantile or its designated
representative of the notice of intention and information as
aforesaid; or (iv) Lend to any person or entity any of the loans
or other extensions of credit to
36
42
which or investments in which are on a "watch list" or similar internal report
of Regional Bancshares or Bank of Xxxxx (except those denoted "pass"
thereon), in an amount equal to or in excess of $50,000;
provided, however, that nothing in this Section 5.3(b)(xvii)
shall prohibit Regional Bancshares or Bank of Xxxxx from honoring
any contractual obligation in existence on the date of this
Agreement or, with respect to loans made in compliance with
clauses (i) through (iii) above, making such loans after
consulting with Mercantile. Notwithstanding clauses (i) and (ii)
of this Section 5.3(b)(xvii), Regional Bancshares or Bank of
Xxxxx shall be authorized without first consulting with
Mercantile or obtaining Mercantile's prior written consent, to
increase the aggregate amount of any credit facilities
theretofore established in favor of any person or entity (each a
"Pre-Existing Facility"), provided that the aggregate amount of
any and all such increases shall not be in excess of $25,000.
5.3(b)(xviii) not, directly or indirectly
(including through its officers, directors, employees or other
representatives) (i) initiate, solicit or encourage any
discussions, inquiries or proposals with any third party (other
than Mercantile) relating to the disposition of any significant
portion of the business or assets of Regional Bancshares or Bank
of Xxxxx or the acquisition of equity securities of Regional
Bancshares or Bank of Xxxxx or the merger of Regional Bancshares
or Bank of Xxxxx with any person (other than Mercantile) or any
similar transaction (each such transaction being referred to
herein as an "Acquisition Transaction"), or (ii) provide any such
person with information or assistance or negotiate with any such
person with respect to an Acquisition Transaction, and Regional
Bancshares shall promptly notify Mercantile orally of all the
relevant details relating to all inquiries, indications of
interest and proposals which it may receive with respect to any
Acquisition Transaction;
5.3(b)(xix) not take any action that would (A)
materially impede or delay the consummation of the transactions
contemplated by this Agreement or the ability of Mercantile or
Regional Bancshares to obtain any approval of any regulatory
authority required for the transactions contemplated by this
Agreement or to perform its covenants and agreements under this
Agreement or (B) prevent or impede the transactions contemplated
hereby from qualifying as a reorganization within the meaning of
Section 368 of the Code;
5.3(b)(xx) not materially restructure or change
its investment securities portfolio, through purchases, sales or
otherwise, or the manner in which the portfolio is classified or
reported, or execute individual investment transactions of
greater than $500,000 for U.S. Treasury or Federal Agency
Securities and $100,000 for all other investment instruments; or
5.3(b)(xxi) not agree in writing or otherwise to
take any of the foregoing actions or engage in any activity,
enter into any transaction or intentionally take or omit to take
any other action which would make any of the
37
43
representations and warranties in Article 3 of this Agreement untrue or
incorrect in any material respect if made anew after engaging in such
activity, entering into such transaction, or taking or omitting
such other action.
5.3(c) Implementation of Policies. Regional
--------------------------
Bancshares, prior to the Merger Effective Time, shall (i) consult
and cooperate with Mercantile regarding the implementation of
those policies and procedures established by Mercantile for its
governance and that of its Subsidiaries and not otherwise
referenced in Section 5.3(h) herein, including, without
limitation, policies and procedures pertaining to the accounting,
asset/liability management, audit, credit, human resources,
treasury and legal functions, and (ii) at the reasonable request
of Mercantile, conform Regional Bancshares' and Bank of Alton's
existing policies and procedures in respect of such matters to
Mercantile's policies and procedures or, in the absence of any
existing Regional Bancshares or Bank of Xxxxx policy or procedure
regarding any such function, introduce Mercantile's policies or
procedures in respect thereof, unless to do so would cause
Regional Bancshares or Bank of Xxxxx to be in violation of any
law, rule or regulation of any Regulatory Authority having
jurisdiction over Regional Bancshares and/or Bank of Xxxxx
affected thereby.
5.3(d) Financial Statements to be Delivered.
------------------------------------
All financial statements contained in the reports to be delivered
to Mercantile pursuant to this Agreement will have been prepared
in accordance with GAAP or regulatory accounting principles, as
the case may be, consistently applied or other standards as
specifically stated herein, or in conformity with the
instructions to such reports, and fairly present the consolidated
financial condition of Regional Bancshares and/or Bank of Xxxxx,
(as the case may be), as of the date thereof or the results of
operations for the period then ended.
5.3(e) Financial and Call Reports. Regional
--------------------------
Bancshares shall deliver to Mercantile monthly Reports of
Condition and Reports of Income and Dividends of Bank of Xxxxx
(certified by an officer of Bank of Xxxxx) and shall deliver to
Mercantile each quarter the Call Reports for Bank of Xxxxx as
filed with the FDIC (collectively, the "Regional Reports"). The
Regional Reports: (i) in the case of the Call Reports, shall have
been prepared in conformity with the rules and regulations
therefor, and in the case of the other Regional Reports shall
have been prepared in accordance with GAAP or regulatory
accounting principles, as the case may be (subject, in the case
of the unaudited interim financial statements, to normal year-end
and audit adjustments and any other adjustments described
therein); (ii) shall present fairly in accordance with GAAP or
regulatory accounting principles, as the case may be,
consistently applied (subject to adjustments that would be
revealed by an audit, none of which is believed to be material in
the aggregate) the financial position of Regional Bancshares or
Bank of Xxxxx (as the case may be) as of the date thereof and the
results of operations for the period then ended.
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5.3(f) Environmental Matters. Mercantile may
---------------------
obtain, at its option and expense, on or prior to 60 days
following the date hereof, a phase one environmental audit
("Environmental Audit") by Environmental Operations, Inc. or
other firm selected by it, of all the properties and assets which
are, or have in the past been, owned, operated or leased by
Regional Bancshares or Bank of Xxxxx, including, but not limited
to, all real estate and fixtures appurtenant thereto (the
"Properties"). The auditors shall be selected by Mercantile.
The purpose of the Environmental Audit shall be to determine
whether Materials of Environmental Concern exist (i) on or under
any of the Properties, (ii) on or under any other property or in
any natural resources which originated on, under or from the
Properties either prior to, during or after Regional Bancshares'
or Bank of Alton's ownership thereof. The Environmental Audit
shall assess the Properties' compliance with any and all
Environmental Laws.
In the event that such Environmental Audit discloses
the existence of any material liability ("Environmental
Liability") for damages, penalties, fines, charges, interest,
judgments, remedial action, public or private, arising directly
or indirectly, in whole or in part, out of (x) the presence or
release of Materials of Environmental Concern on, under or from
the Properties in amounts or concentrations in excess of those
permitted under applicable law or regulation, or (y) any unlawful
activity carried on or undertaken on or off the Properties either
prior to or after the date hereof, whether by Regional
Bancshares, Bank of Xxxxx or any predecessor in title to any of
the Properties or any employees, agents, affiliates, contractors
or subcontractors of Regional Bancshares, Bank of Xxxxx or of any
such predecessors in title, or any third person arising out of
any Environmental Law or involving the unlawful use, handling,
treatment, removal, storage, decontamination, clean up, release,
transport or disposal of any Materials of Environmental Concern
at any time located or present on, under or from the Properties,
which liability exists against Regional Bancshares or Bank of
Xxxxx or affects in a material and adverse way the Properties, or
Regional Bancshares' or Bank of Alton's rights, or business or
the right to carry on or conduct their respective businesses as
presently conducted, Mercantile shall notify Regional Bancshares
of such Environmental Liability. If Regional Bancshares does not
choose to remediate or correct the condition leading to such
Environmental Liability and to otherwise fully protect and
indemnify Mercantile from such Environmental Liability on terms
and conditions reasonably acceptable to Mercantile, and
Mercantile reasonably believes the cost of such remediation or
potential liability exceeds $250,000, Mercantile shall have the
right to terminate this Agreement under Article VII hereof,
thereby relieving Mercantile of all its obligations hereunder,
including the obligation to cause or engage in the Merger.
5.3(g) Conforming Entries.
------------------
5.3(g)(i) Notwithstanding that Regional Bancshares
believes that Regional Bancshares and Bank of Xxxxx have
established all reserves and taken all
39
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provisions for possible loan losses required by GAAP and applicable laws,
rules and regulations, Regional Bancshares recognizes that Mercantile may
have adopted different loan, accrual and reserve policies (including loan
classifications and levels of reserves for possible loan losses). From and
after the Mercantile Due Diligence Review Period to the Merger Effective Time,
Regional Bancshares and Mercantile shall consult and cooperate with each
other with respect to conforming the loan, accrual and reserve
policies of Regional Bancshares and the Bank of Xxxxx to those
policies of Mercantile, as specified in each case in writing to
Regional Bancshares, based upon such consultation and as
hereinafter provided.
5.3(g)(ii) In addition, from and after the
Mercantile Due Diligence Review Period to the Merger Effective
Time, Regional Bancshares and Mercantile shall consult and
cooperate with each other with respect to determining appropriate
Regional Bancshares accruals, reserves and charges to establish
and take in respect of excess equipment write-off or write-down
of various assets and other appropriate charges and accounting
adjustments taking into account the parties' business plans
following the Merger, as specified in each case in writing to
Regional Bancshares, based upon such consultation and as
hereinafter provided.
5.3(g)(iii) From and after the Mercantile Due
Diligence Review Period to the Merger Effective Time, Regional
Bancshares and Mercantile shall consult and cooperate with each
other with respect to determining the amount and the timing for
recognizing for financial accounting purposes Regional
Bancshares' expenses of the Merger and the restructuring charges
related to or to be incurred in connection with the Merger.
5.3(g)(iv) Subject to subsection (v) below,
Regional Bancshares shall (i) establish and take such reserves
and accruals to conform Regional Bancshares' loan accrual and
reserve policies to Mercantile's policies, (ii) establish and
take such accruals, reserves and charges in order to implement
such policies in respect of excess facilities and equipment
capacity, severance costs, litigation matters, write-off or
write-down of various assets and other appropriate accounting
adjustments, and to recognize for various accounting purposes
such expenses of the Merger and restructuring charges related to
or to be incurred in connection with the Merger, and (iii)
effecting such divestitures or otherwise implement such
restructuring in respect of its investment securities portfolio
to conform Regional Bancshares' investment securities portfolio
policies to Mercantile's policies.
5.3(g)(v) With respect to clauses (i) through (vi)
of this Section 5.3(g), it is the objective of Mercantile and
Regional Bancshares that such reserves, accruals, charges and
divestitures, if any, to be taken shall be consistent with GAAP
and taken only after the approval conditions set forth in Section
6.1 hereof have been satisfied or waived (except to the extent
that any waiting period associated therewith may then have
commenced but not expired) and Mercantile has informed Regional
Bancshares that it is not aware of any facts which would
40
46
indicate that the other Merger Closing conditions in Article 6 herein
cannot be met at Merger Closing.
5.3(g)(vi) No reserves, accruals or charges taken
in accordance with this Section 5.3(h) may be a basis to assert
(i) a violation of a breach of a representation, warranty or
covenant of Regional Bancshares herein, or (ii) the non-
satisfaction of any condition to the obligation of Mercantile to
cause the Merger to be consummated.
5.3(h) Additional Actions. If, at any time
------------------
after the Merger Effective Time, Mercantile or the Surviving
Corporation shall consider or be advised that any further deeds,
assignments or assurances or any other acts are necessary or
desirable to (a) vest, perfect or confirm, of record or
otherwise, in the Surviving Corporation, all right, title or
interest in, to or under any of the rights, properties or assets
of Regional Bancshares or Merger Sub or (b) otherwise carry out
the purposes of this Agreement, Regional Bancshares and Merger
Sub and each of their respective officers and directors, shall be
deemed to have granted to the Surviving Corporation an
irrevocable power of attorney to execute and deliver all such
deeds, assignments or assurances and to do all acts necessary or
desirable to vest, perfect or confirm title and possession to
such rights, properties or assets in the Surviving Corporation
and otherwise to carry out the purposes of this Agreement, and
the officers and directors of the Surviving Corporation are
authorized in the name of Regional Bancshares or otherwise to
take any and all such action.
5.4 Covenants of Mercantile and Merger Sub.
---------------------------------------
Mercantile and Merger Sub hereby covenant and agree with Regional
Bancshares as follows:
5.4(a) Approval. Mercantile will authorize and
--------
approve the Merger and this Agreement, and as sole stockholder of
Merger Sub by its execution hereof authorizes and approves the
Merger and this Agreement.
5.4(b) Payment of Consideration. Mercantile
------------------------
represents, warrants and agrees that as and when required by the
provisions of this Agreement, Mercantile will pay the
consideration for which the shares of Regional Bancshares Common
issued and outstanding immediately prior to the Merger Effective
Time are to be converted and exchanged as provided in this
Agreement.
5.4(c) Registration of Securities and Preparation
------------------------------------------
of Proxy Statement. Mercantile agrees to use its reasonable
------------------
best efforts to file as soon as practicable with the Securities
and Exchange Commission and to cause to become effective a
Registration Statement on Form S-4 under the 1933 Act
("Registration Statement") registering the issuance and resale of
the Mercantile Common to be received by holders of Regional
Bancshares Common, and shall use reasonable efforts to make all
proper filings under any applicable state securities laws. The
prospectus which forms a part of the Registration Statement will
also constitute the Proxy Statement
41
47
for solicitation of proxies in connection with the Stockholder Meeting
referred to in Section 5.3(a). The Registration Statement will comply
--------------
in all material respects with the rules and regulations of the
Securities and Exchange Commission. Each of the parties hereto
will cooperate fully with each other in preparation of the
Registration Statement and Proxy Statement (and any and all
amendments thereto) and supply all information necessary, in the
opinion of their respective counsel, in order to complete the
preparation of the Registration Statement and Proxy Statement.
Mercantile will cause the Mercantile Common to be received by the
holders of Regional Bancshares Common to be listed for trading on
the New York Stock Exchange.
5.4(d) Other Filings and Appeals. Mercantile
-------------------------
shall have primary responsibility for preparation of all
applications for regulatory approval of the Merger including but
not limited to the preparation of (a) an application or any
amendment thereto filed or to be filed by any party with the
Federal Reserve Board under the Act for authority to consummate
the transactions contemplated by this Agreement; (b) an
application or any amendment thereto filed or to be filed with
the Commissioner for authority to consummate the transactions
contemplated by this Agreement; and (c) any application or
statements to be made by any party to any governmental body in
connection with such matters and in connection with agreements
and plans of reorganization and merger agreements heretofore or
hereafter entered into between the parties hereto. Mercantile
shall deliver copies of all applications to Regional Bancshares
and Bank of Xxxxx prior to filing, keep Regional Bancshares and
Bank of Xxxxx apprised of the status of all applications and file
such applications as promptly as practicable following the date
of this Agreement. Each of the parties hereto shall use its
reasonable best efforts, separately and jointly with the other
parties, in good faith to take or cause to be taken all such
steps as shall be necessary or advisable to obtain all consents
and approvals of governmental authorities as are required by law
or otherwise to effect the Merger; provided, however, that
Mercantile and Merger Sub shall have no obligation to accept
conditions or restrictions with respect to the aforesaid
approvals of governmental authorities if Mercantile shall
reasonably determine that such conditions or restrictions would
have a material adverse effect on the business, operations,
prospects or financial condition of Regional Bancshares or Bank
of Xxxxx or Mercantile or its Subsidiaries or would be materially
burdensome to Regional Bancshares or Bank of Xxxxx or Mercantile
or its Subsidiaries. In the event of an adverse or unfavorable
determination by any regulatory authority, or should the Merger
be challenged or opposed by any administrative or legal
proceeding, whether by the United States Department of Justice or
otherwise, the determination of whether and to what extent to
seek appeal or review, administrative or otherwise, or other
appropriate remedies shall be made by Mercantile with the
concurrence of Regional Bancshares, which concurrence shall not
be unreasonably withheld, and Mercantile agrees to be fully
responsible for the conduct of such review or other proceeding.
42
48
5.4(e) Employee Benefit Plans. Following the
----------------------
Merger Effective Time, Mercantile shall cause the Surviving
Corporation to honor in accordance with their terms all
provisions for vested benefits or other vested amounts earned or
accrued through the Merger Effective Time under the Benefit Plans
of Regional Bancshares or Bank of Xxxxx.
5.4(e)(i) The provisions of any plan, program or
arrangement providing for the issuance or grant of any other
interest in respect of the capital stock of Regional Bancshares
or Bank of Xxxxx, including, without limitation, any stock
appreciation rights or phantom stock plan, shall be deleted and
terminated as of the date of this Agreement.
5.4(e)(ii) The Benefit Plans of Regional
Bancshares and/or Bank of Xxxxx shall not be terminated by reason
of the Merger but shall continue thereafter as plans of the
Surviving Corporation until such time as the employees of
Regional Bancshares and Bank of Xxxxx are integrated in
Mercantile's employee benefit plans that are available to other
employees of Mercantile and its Subsidiaries, subject to the
terms and conditions specified in such plans and to such changes
therein as may be necessary to reflect the consummation of the
Merger. Mercantile shall take such steps as are necessary or
required to integrate the employees of Regional Bancshares and
Bank of Xxxxx in Mercantile's employee benefit plans available to
other employees of Mercantile and its Subsidiaries as soon as
practicable after the Merger Effective Time, with (A) full credit
for prior service with Regional Bancshares and Bank of Xxxxx for
purposes of vesting and eligibility for participation (but not
benefit accruals under any defined benefit plan), and co-payments
and deductibles, and (B) waiver of all waiting periods and, to
the extent met or satisfied by an affected employee of Regional
Bancshares or Bank of Xxxxx under the Regional Bancshares Benefit
Plans, all pre-existing condition exclusions or penalties.
5.4(f) Directors' and Officers' Indemnity. From
----------------------------------
and after the Merger Effective Time, Mercantile or Merger Sub, as
applicable, shall, subject to any limitations or other provisions
of applicable Law or action of the FDIC, to the full extent
provided in Regional Bancshares' or Bank of Alton's Articles of
Incorporation or Agreement as the case may be, Bylaws and
applicable indemnification agreements as in effect on the date
hereof, as the case may be, indemnify and hold harmless each
present and former director, officer, employee and agent of
Regional Bancshares or Bank of Xxxxx (each, together with such
person's heirs, executors and administrators, an "Indemnified
Party" and collectively, the "Indemnified Parties") against any
costs or expenses (including attorneys' fees), judgments, fines,
and amounts paid in settlement in connection with any claim,
action, suit, proceeding or investigation, whether civil,
administrative or investigative, arising out of, relating to or
in connection with any action or omission occurring prior to the
Merger Effective Time (including, without limitation, acts or
omissions in connection with such persons' serving as an officer,
director or other fiduciary in
43
49
any entity if such service was at the request or for the benefit of Regional
Bancshares or Bank of Xxxxx) and otherwise observe all of Regional Bancshares'
or Bank of Alton's obligations under their respective Articles of
Incorporation or Agreement, Bylaws or agreements. Mercantile
shall make advances of expenses, including attorneys' fees,
incurred prior to the final disposition of a civil,
administrative or investigative action, suit proceeding or claim
(including an action by or in the right of Regional Bancshares or
Bank of Xxxxx) to any person to whom indemnification is or may be
available under Regional Bancshares' or Bank of Alton's Articles
of Incorporation or Agreement as the case may be, Bylaws and
applicable indemnification agreements, provided, however, that
prior to making any advances, Mercantile shall receive a written
undertaking by or on behalf of such person to repay such amounts
advanced in the event that it shall be ultimately determined that
such person is not entitled to such indemnification. In the
event Mercantile, Merger Sub or any of their successors or
assigns (i) consolidates with or merges into any other person and
shall not be the continuing or surviving corporation or entity of
such consolidation or merger, or (ii) transfers all or
substantially all of its properties and assets to any person,
then and in each such case, proper provisions shall be made so
that the successors and assigns of Mercantile or Merger Sub, as
applicable, shall also agree to assume the obligations set forth
in this Section 5.4(f).
ARTICLE 6
CONDITIONS PRECEDENT TO THE MERGER
6.1 Conditions and Obligations of Mercantile, Merger
------------------------------------------------
Sub and Regional Bancshares to the Merger. The obligations of
-----------------------------------------
Mercantile, Merger Sub and Regional Bancshares to cause the
Merger to be consummated shall be subject to the satisfaction on
or before the Merger Closing of all of the following conditions,
except as such parties may waive such conditions in writing:
6.1(a) Approval by Regional Bancshares Stockholders.
At the Stockholder Meeting, the Merger and this Agreement shall
have been duly approved by the stockholders of Regional
Bancshares.
6.1(b) Regulatory Authority Approval. Orders,
------------------------------
consents and approvals, in form and substance reasonably
satisfactory to the parties hereto, shall have been entered by
all applicable regulatory authority and shall remain in force,
granting the authority necessary: (i) for consummation of the
transactions contemplated by this Agreement pursuant to the
provisions of the Act and other applicable laws, and (ii) to
satisfy all other requirements prescribed by applicable laws and
the rules and regulations of any regulatory authority.
6.1(c) No Proceedings, Etc. No judgment, order
-------------------
or decree of any court and no order, notice, statute or
regulation of any government or governmental
44
50
agency having jurisdiction or authority over Regional Bancshares, Bank
of Xxxxx, Mercantile or Merger Sub shall be in effect which shall
restrain or prohibit, and no litigation, proceeding or
investigation shall be pending or threatened by or before any
such court or governmental agency attempting to restrain or
prohibit: (i) consummation of the transactions contemplated by
this Agreement, or (ii) the exercise of control by Mercantile or
Merger Sub over Regional Bancshares or Bank of Xxxxx following
the Merger.
6.1(d) Registration Statement. The Registration
----------------------
Statement on Form S-4 as described in Section 4(c) shall have
become effective under the 1933 Act and as of the Merger Closing
no stop order suspending the effectiveness thereof shall have
been issued or threatened.
6.1(e) Listing on Stock Exchange. The
--------------------------
Mercantile Common is listed for trading on The New York Stock
Exchange.
6.1(f) Tax Opinion. Mercantile shall have
-----------
delivered to Regional Bancshares an opinion of Xxxxxxxx Xxxxxx
dated as of the Merger Closing or a mutually agreeable earlier
date, reasonably satisfactory in form and substance to Regional
Bancshares and its legal counsel to the effect that the Merger
will constitute a reorganization within the meaning of Section
368 of the Code and that no gain or loss will be recognized by
Regional Bancshares or the shareholders of Regional Bancshares or
Bank of Xxxxx to the extent that each received shares of
Mercantile Common solely in exchange for shares of Regional
Bancshares Common in the Merger, which opinion shall not have
been withdrawn at or prior to the Merger Effective Time.
6.2 Conditions to Obligations of Mercantile to the Merger.
-----------------------------------------------------
The obligations of Mercantile to cause the Merger to be
consummated also shall be subject to the satisfaction on or
before the Merger Closing of all of the following conditions,
except as Mercantile may waive such conditions in writing:
6.2(a) Representations, Warranties and Covenants.
-----------------------------------------
All representations and warranties of Regional Bancshares
contained in this Agreement shall be true and correct in all
material respects on and as of the date of the Merger Closing
as if such representations and warranties were made on and as
of the date of the Merger Closing, and Regional Bancshares shall
have performed in all material respects all agreements and covenants
required by this Agreement to be performed by it on or prior to the
date of the Merger Closing.
6.2(b) Officers' Certificates. Regional
----------------------
Bancshares shall have furnished to Mercantile a certificate dated
as of the date of the Merger Closing, signed by an executive
officer of Regional Bancshares to the effect that, to his
knowledge, the representations and warranties of Regional
Bancshares contained in this Agreement are true and correct in
all material respects as of the date of the Merger Closing
45
51
and Regional Bancshares has performed all agreements, covenants
and obligations hereunder required to be performed by it in all
material respects.
6.2(c) No Material Adverse Change. Since the
---------------------------
date of this Agreement, there shall have been no material adverse
change in the financial condition of Regional Bancshares and Bank
of Xxxxx, taken as a whole, except as may have resulted from
changes to laws and regulations, GAAP or regulatory accounting
principles, interpretations thereof, other conditions that affect
the banking industry generally, or changes in the general level
of interest rates.
6.2(d) Legal Opinion. Mercantile shall have
-------------
received from Xxxxx Xxxx LLP an opinion of counsel for Regional
Bancshares substantially in the form attached hereto as
Exhibit A.
6.3 Conditions to Obligations of Regional Bancshares to
---------------------------------------------------
the Merger. The obligations of Regional Bancshares to cause
----------
the Merger to be consummated shall be subject to the satisfaction
on or before the Merger Closing of all of the following
conditions, except as Regional Bancshares may waive such
conditions in writing:
6.3(a) Representations, Warranties and Covenants.
-----------------------------------------
All representations and warranties of Mercantile and Merger Sub contained in
this Agreement shall be true and correct in all material respects on and as of
the date of the Merger Closing as if such representations and warranties were
made on and as of the Merger Closing, and Mercantile shall have performed in
all material respects all agreements and covenants required by this Agreement
to be performed by it on or prior to the date of the Merger Closing.
6.3(b) Officers' Certificates. Mercantile shall
----------------------
have furnished to Regional Bancshares a certificate, dated as of
the Merger Closing, signed by an executive officer of Mercantile
to the effect that, to the knowledge of such officer, the
representations and warranties of Mercantile and Merger Sub
contained in this Agreement are true and correct in all material
respects as of the date of the Merger Closing and Mercantile and
Merger Sub have performed all agreements, covenants and
obligations hereunder required to be performed by them.
6.3(c) No Material Adverse Change. Since the
---------------------------
date of this Agreement, there shall have been no material adverse
change in the financial condition of Mercantile or its
Subsidiaries, taken as a whole, except as may have resulted from
changes to laws and regulations, GAAP, interpretations thereof,
other conditions that affect the banking industry generally, or
changes in the general level of interest rates.
6.3(d) Legal Opinion. Regional Bancshares shall
-------------
have received from Xxxxxxxx Xxxxxx an opinion of counsel for
Mercantile and Merger Sub substantially in the form attached
hereto as Exhibit B.
46
52
6.3(e) Effective Registration Statement. The
---------------------------------
Registration Statement as described in Section 5.4(c) shall have
become effective under the 1933 Act and as of the Merger
Effective Time no stop order suspending the effectiveness thereof
shall have been issued or threatened.
ARTICLE 7
ABANDONMENT AND TERMINATION OF THE MERGER
7.1 Termination. This Agreement may be abandoned and
-----------
terminated at any time before the Merger Effective Time, whether
before or after any stockholder action as follows:
7.1(a) At any time prior to the Merger Closing, by
the mutual consent of the Boards of Directors of Regional
Bancshares and Mercantile;
7.1(b) At any time prior to the Merger Closing, by
Regional Bancshares or Mercantile if there shall have been a
final judicial or regulatory determination (as to which all
periods for appeal shall have expired and no appeal shall be
pending) that any material provisions of this Agreement are
illegal, invalid, or unenforceable or denying any regulatory
application the approval of which is a condition precedent to
such party's obligations hereunder;
7.1(c) At any time on or after the date which is
twelve (12) months following the date of this Agreement by
Regional Bancshares or Mercantile if the Merger Closing shall
have not then occurred, provided that Regional Bancshares or
Mercantile, as the case may be, shall not have the right to
terminate this Agreement pursuant to this Section 7.1(c) if the
Merger Closing shall not have occurred because of the failure of
any of the conditions set forth in Article 6 hereof as a result
of any willful and deliberate breach, through action or failure
to act, of any representation, warranty, covenant or agreement
hereunder by Regional Bancshares or Mercantile, respectively;
7.1(d) By either party at any time after the
stockholders of Regional Bancshares fail to approve the Agreement
or the Merger in a vote taken at the Stockholder Meeting duly
convened for that purpose;
7.1(e) By either party hereto, if the Executive
Committee of the Board of Directors of Mercantile or the Board of
Directors of Regional Bancshares so determines by vote of a
majority of their members, in the event of a material breach by
the other party of any representation, warranty, covenant or
agreement herein that cannot be or is not cured within thirty
days after written notice of such breach is given to the party
committing such breach, provided that the departure of any
Executive Officer from the employ of Regional Bancshares shall
not be deemed a material breach of its Agreement.
47
53
7.1(f) By the Executive Committee of the Board of
Directors of Mercantile in the event (i) any situation, event,
circumstance or other matter shall come to the attention of
Mercantile during the course of the Mercantile Due Diligence
Review conducted pursuant to Section 5.1(e)(ii) hereof which
Mercantile shall, in a good faith exercise of its reasonable
discretion, believe either (A) to be inconsistent in any material
and adverse respect with any of the representations or warranties
of Regional Bancshares, (B) to be of such significance as to
materially and adversely affect the financial condition and/or
business of Regional Bancshares and Bank of Xxxxx, taken as a
whole, or (C) to deviate materially and adversely from the
Regional Financial Statements as of and for the six-months ended
June 30, 1996, and (ii) Mercantile notifies Regional Bancshares
of such matters within five business days after the end of the
Mercantile Due Diligence Review Period and such matters are not
capable of being cured or have not been cured within 30 days
after written notice thereof to Regional Bancshares.
7.1(g) By the Executive Committee of the Board of
Directors of Mercantile pursuant to and in accordance with the
provisions of Section 5.3(f) hereof.
7.2 Procedure for Termination. In the event a party
--------------------------
elects to effect any termination pursuant to Sections 7.1(b)
through 7.1(g) above, it shall give written notice to the other
party hereto specifying the basis for such termination.
7.3 Return of Information. In the event that this
----------------------
Agreement is terminated, each party shall return all nonpublic
documents furnished hereunder, shall destroy all documents or
portions thereof prepared by such a party that contain nonpublic
information furnished by the other party pursuant hereto and, in
any event, shall hold all nonpublic information received pursuant
hereto in the same degree of confidentiality with which it
maintains its own like information unless or until such
information is or becomes known to the party receiving such
information through persons other than the party providing such
information, which persons do not have an obligation to such
party not to disclose such information.
7.4 Effect of Termination. In the event of
----------------------
termination of this Agreement as provided in Section 7.1 hereof,
this Agreement shall forthwith become void and there shall be no
continuing obligations on the part of Mercantile, Merger Sub or
Regional Bancshares or their respective officers or directors
except as set forth in (i) the second sentence of Section
5.1(e)(i), (ii) Section 5.2, and (iii) except that no termination
of this Agreement pursuant to Section 7.1(e) shall relieve the
breaching party of any liability to the non-breaching party
hereto arising from the intentional, deliberate and willful non-
performance of any covenant contained herein, after giving notice
to such breaching party and an opportunity to cure as set forth
in Section 7.1(e).
48
54
ARTICLE 8
MISCELLANEOUS
8.1 Notice. All notices, requests, demands, and
-------
other communications hereunder shall be in writing and shall be
deemed to have been duly given if personally delivered or
delivered by reliable overnight courier (and shall be deemed
delivered upon delivery) or mailed, first class postage prepaid
(in which case it shall be deemed delivered three days after
deposit in the mail) as follows:
To Regional Bancshares:
00 Xxxxxxxxx
Xxxxx, Xxxxxxxx 00000
Attention: Xxxx X. Xxxxxxxxx
with copies to:
Xxxxx Xxxx LLP
One Metropolitan Square
000 Xxxxx Xxxxxxxx Xxxxx 0000
Xx. Xxxxx, Xxxxxxxx 00000
Attention: Xxxxx X. Xxxxxxxx III
To Mercantile or Merger Sub:
Mercantile Bancorporation Inc.
Xxxxxxxxxx Xxxxx
X.X. Xxx 000
Xx. Xxxxx, Xxxxxxxx 00000-0000
Attention: Xxxx X. Xxxx,
Executive Vice President - Mercantile Bank of St.
Louis National Association
with copies to:
Xxx X. Xxxxxxxx
General Counsel and Secretary
Mercantile Bancorporation Inc.
Xxxxxxxxxx Xxxxx
X.X. Xxx 000
Xx. Xxxxx, Xxxxxxxx 00000-0000
and to:
Xxxxxx X. XxXxxx, Esq.
Xxxxxxxx Xxxxxx
49
00
Xxx Xxxxxxxxxx Xxxxxx
Xx. Xxxxx, Xxxxxxxx 00000
or such other address as the parties hereto may designate in
writing.
8.2 Amendments. This Agreement may be amended by a
-----------
subsequent writing signed by each of the parties hereto upon the
approval of the Board of Directors of each of the parties hereto;
provided, however, that the provisions of Article 2 of this
Agreement relating to the consideration to be paid for the shares
of Regional Bancshares Common shall not be amended after the
transactions hereby have been approved by the stockholders of
Regional Bancshares so as to modify either the amount or the form
of such consideration or to otherwise materially adversely affect
the stockholders of Regional Bancshares without the approval of
the stockholders of Regional Bancshares who are so affected.
8.3 Third Party Beneficiaries. This Agreement shall
--------------------------
grant no rights and is intended to confer no benefit to any party
other than the undersigned parties to this Agreement.
8.4 Benefit and Binding Effect. This Agreement shall
--------------------------
be binding upon and inure to the benefit of the parties named
herein and their respective successors and assigns only and no
other person or entity not a party hereto shall have any rights
hereunder. This Agreement and the rights, interests or
obligations hereunder may not be assigned by any of the parties
hereto without the prior written consent of the other parties
hereto.
8.5 Governing Law. This Agreement shall be construed
-------------
and interpreted according to the laws of the State of Missouri
without regard to conflicts of laws principles thereof, except as
otherwise provided herein.
8.6 Whole Agreement. This Agreement, and the
---------------
agreements to be entered into pursuant hereto, embody the entire
contact between the parties with respect to their respective
subject matters and no understandings or agreements, verbal or
otherwise, with respect to the subject matter hereof or thereof
exists between the parties, except as expressly set forth herein
and in such other agreements.
8.7 Counterparts. 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.
50
56
8.8 Reliance on Headings. Article and section headings
--------------------
contained in this Agreement are inserted for convenience of
reference only and shall not form any part of the agreement
between the parties hereto or affect in any way the meaning or
interpretation of this Agreement.
51
57
IN WITNESS WHEREOF, Regional Bancshares, Mercantile, and
Merger Sub have caused this Agreement to be executed by their
duly authorized officers as of the day and year first above
written.
Regional Bancshares, Inc.
By: /s/ Xxxxx Xxxxxxxxx
----------------------------
Name: Xxxxx Xxxxxxxxx
Title: President
Mercantile Bancorporation Inc.
By: /s/ Xxxx X. Xxxx
---------------------------
Name: Xxxx X. Xxxx
Title: Executive Vice President -
Mercantile Bank of St. Louis
National Association,
Authorized Officer
Ameribanc, Inc.
By: /s/ Xxxx X. Xxxx
---------------------------
Name: Xxxx X. Xxxx
Title: Vice President
52
58
GLOSSARY
Page
----
1933 Act . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
1934 Act . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Act. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Agreement. . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Bank of Xxxxx. . . . . . . . . . . . . . . . . . . . . . . . . 1
Benefit Plan . . . . . . . . . . . . . . . . . . . . . . . . . 1
Buyer Bancorp. . . . . . . . . . . . . . . . . . . . . . . . . 1
Buyer Bancorp Reports. . . . . . . . . . . . . . . . . . . . . 30
Certificates . . . . . . . . . . . . . . . . . . . . . . . . . 6
Code . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Commissioner . . . . . . . . . . . . . . . . . . . . . . . . . 10
Company Merger Closing . . . . . . . . . . . . . . . . . . . . 4
Employment Agreements. . . . . . . . . . . . . . . . . . . . . 16
Environmental Claim. . . . . . . . . . . . . . . . . . . . . . 2
Environmental Laws . . . . . . . . . . . . . . . . . . . . . . 2
ERISA. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Exchange Agent . . . . . . . . . . . . . . . . . . . . . . . . 6
FDIA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
FDIC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Federal Reserve Board. . . . . . . . . . . . . . . . . . . . . 27
Government . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Held to Maturity . . . . . . . . . . . . . . . . . . . . . . . 12
Indemnified Parties. . . . . . . . . . . . . . . . . . . . . . 43
Indemnified Party. . . . . . . . . . . . . . . . . . . . . . . 43
Intellectual Property. . . . . . . . . . . . . . . . . . . . . 2
IRCA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Materials of Environmental Concern . . . . . . . . . . . . . . 3
Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Merger Effective Time. . . . . . . . . . . . . . . . . . . . . 4
Newco. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
PBGC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Regional Bancshares. . . . . . . . . . . . . . . . . . . . . . 1
Regional Bancshares Common . . . . . . . . . . . . . . . . . . 3
Regional Reports . . . . . . . . . . . . . . . . . . . . . . . 38
Registration Statement . . . . . . . . . . . . . . . . . . . . 41
Significant Banking Subsidiary . . . . . . . . . . . . . . . . 30
Significant Subsidiary . . . . . . . . . . . . . . . . . . . . 27
Stockholder Meeting. . . . . . . . . . . . . . . . . . . . . . 34
Subsidiary . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Surviving Corporation. . . . . . . . . . . . . . . . . . . . . 3
Tax Returns. . . . . . . . . . . . . . . . . . . . . . . . . . 20
Taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
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SCHEDULES
Schedule 3.6 (Regulatory Matters)
Schedule 3.8 (Compliance with Laws and Agreements)
Schedule 3.9 (Regional Financial Statements)
Schedule 3.10 (Real Property)
Schedule 3.12 (Loans and Investments)
Schedule 3.12A (Allowance for Loan and Lease Losses)
Schedule 3.12B (Restricted Investments)
Schedule 3.12C (Obligations to Acquire Assets)
Schedule 3.13 (Employees)
Schedule 3.14 (Indebtedness to and from Officers, Directors and Others)
Schedule 3.15 (Conflicts)
Schedule 3.16 (Regional Bancshares Litigation)
Schedule 3.18 (Insurance Policies)
Schedule 3.19(e) (Bonuses)
Schedule 3.22 (Large Deposits)
Schedule 3.28 (Benefit Plans)
Schedule 3.31(a) (Undisclosed Liabilities)
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EXHIBIT A
OPINION OF COUNSEL
FOR REGIONAL BANCSHARES
a. Regional Bancshares, Inc. is a corporation duly
organized, validly existing and in good standing under the laws
of the State of Illinois, is duly qualified to do business and is
in good standing in all jurisdictions where the ownership or
leasing of its properties or the conduct of its business require
Regional Bancshares, Inc. to be so qualified. Regional
Bancshares, Inc. is registered as a bank holding company with the
Board of Governors of the Federal Reserve System under the Bank
Holding Company Act of 1956, as amended.
b. Bank of Alton is an Illinois chartered banking
corporation validly existing and in good standing under the laws
of the State of Illinois.
c. Regional Bancshares, Inc. and Bank of Xxxxx each
possesses all power and authority (corporate and other) to own,
operate and lease its respective properties and to carry out its
respective business as it is now being conducted in each
jurisdiction where its business is being conducted.
d. Regional Bancshares, Inc. has the power and authority
(corporate and other) to enter into and deliver the Agreement and
to carry out its obligations thereunder.
e. The execution, delivery and performance of the
Agreement has been duly and validly authorized by all necessary
corporate action of Regional Bancshares, Inc., and, assuming due
authorization, execution and delivery of the Agreement by
Mercantile and Merger Sub, such Agreement constitutes a valid and
binding obligation of Regional Bancshares, Inc. that is
enforceable against Regional Bancshares, Inc. in accordance with
its terms, except as may be limited by bankruptcy, insolvency,
moratorium, reorganization or similar laws affecting the rights
of creditors generally, or the exercise of judicial discretion in
accordance with general principles applicable to equitable and
similar remedies.
f. Neither Regional Bancshares, Inc. nor Bank of Xxxxx
is in default under or in violation of any provision of its
Articles of Incorporation, Articles of Agreement or ByLaws or any
note, bond, indenture, mortgage, deed of trust, loan agreement or
any other agreement to which it is a party or by which it is
bound or to which any of its properties or assets is subject,
other than such defaults or violations as would not (singly or in
the aggregate) have a material adverse effect on the business,
operation, prospects or financial condition of Regional
Bancshares, Inc. and Bank of Xxxxx taken as a whole, nor is
Regional Bancshares, Inc. or Bank of Xxxxx in violation of any
statute, rule, regulation, order, writ, decree or injunction of
any court or governmental agency or any body having jurisdiction
over them or
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any of their properties which, if enforced, would have (singly or in the
aggregate) a material adverse effect on the business, operations, prospects or
financial condition of Regional Bancshares, Inc. and Bank of Xxxxx taken as a
whole.
g. Except as received prior to the date hereof, no
notice to, filing with, exemption or review by or authorization,
consent or approval of, any public body or authority is necessary
for the consummation by Regional Bancshares, Inc. of the Merger
as contemplated by the Agreement.
h. The authorized and issued capital of Regional
Bancshares, Inc. conforms to the description thereof contained in
Section 3.1 of the Agreement. To the best of our knowledge,
there are no options, warrants, scrip, rights to subscribe to,
calls or commitments of any character whatsoever relating to, or
securities or rights convertible into, shares of any capital
stock of Regional Bancshares, Inc., or contracts, commitments,
understandings or arrangements by which Regional Bancshares, Inc.
is or may become bound to issue additional shares of capital
stock, or options, warrants or rights to purchase or acquire any
additional shares of capital stock of Regional Bancshares, Inc..
To the best of our knowledge, all of the issued and outstanding
shares of Regional Bancshares, Inc. Common Stock are validly
issued, fully paid and nonassessable by Regional Bancshares, Inc.
and none of such shares have been issued in violation of any
preemptive or similar right of any shareholder of Regional
Bancshares, Inc.
i. Regional Bancshares, Inc. is the owner of record of
all of the issued and outstanding shares of Common Stock of Bank
of Xxxxx, other than directors' qualifying shares.Regional
Bancshares, Inc. has no direct or indirect Subsidiaries other
than Bank of Xxxxx To the best of our knowledge, there are no
options, warrants, scrip, rights to subscribe to, calls or
commitments of any character whatsoever relating to, or
securities or rights convertible into, shares of any capital
stock of Bank of Xxxxx, or contracts, commitments, understandings
or arrangements by which Bank of Xxxxx is or may become bound to
issue additional shares of capital stock, or options, warrants or
rights to purchase or acquire any additional shares of capital
stock of such entity. To the best of our knowledge, all of the
issued and outstanding shares of common stock of Bank of Xxxxx
are validly issued, fully paid and nonassessable by Bank of Xxxxx
and none of such shares have been issued in violation of any
preemptive or similar right of any stockholder of Bank of Xxxxx.
j. To the best of our knowledge, neither Regional
Bancshares, Inc. nor Bank of Xxxxx is the subject of any order,
decree or injunction of a court or agency of competent
jurisdiction which enjoins or prohibits the consummation of the
Merger.
k. To the best of our knowledge, there is no litigation,
proceeding or controversy before any court or governmental agency
whether federal, state or
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local, pending or threatened, that is likely to have a material and adverse
effect on the business, results of operations or financial condition of
Regional Bancshares, Inc. and Bank of Xxxxx, taken as a whole.
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EXHIBIT B
OPINION OF COUNSEL
a. Each of Mercantile and Merger Sub is a corporation
duly organized, validly existing and in good standing under the
laws of the State of Missouri, is duly qualified to do business
and is in good standing in all jurisdictions where the ownership
or leasing of its respective properties or the conduct of its
business requires it to be so qualified, except where the failure
to so qualify would not have a material adverse effect on the
business, operations or financial condition of Mercantile and
Merger Sub, taken as a whole. Mercantile and Merger Sub are each
registered as bank holding companies with the Board of Governors
of the Federal Reserve System under the Bank Holding Company Act
of 1956, as amended.
b. Mercantile and Merger Sub each possesses all power
and authority (corporate and other) to own, operate and lease its
respective properties and to carry out its respective business as
it is now being conducted in each jurisdiction where its business
is being conducted.
c. Mercantile and Merger Sub each have the power and
authority (corporate and other) to enter into and deliver the
Agreement and to carry out its respective obligations thereunder.
d. The execution, delivery and performance of the
Agreement has been duly and validly authorized by all necessary
corporate action of Mercantile and Merger Sub, respectively, and,
assuming due authorization, execution and delivery of the
Agreement by Regional Bancshares, Inc., such Agreement
constitutes a valid and binding obligation of Mercantile and
Merger Sub that is enforceable against Mercantile and Merger Sub,
as the case may be, in accordance with its terms, except as may
be limited by bankruptcy, insolvency, moratorium, reorganization
or similar laws affecting the rights of creditors generally, or
the exercise of judicial discretion in accordance with general
principles applicable to equitable and similar remedies.
e. Neither Mercantile nor any of its Significant
Subsidiaries is in default under or in violation of any provision
of its Articles of Incorporation, Articles of Association or By-
Laws or any note, bond, indenture, mortgage, deed of trust, loan
agreement or any other agreement to which it is a party or by
which it is bound or to which any of its properties or assets is
subject, other than such defaults or violations as would not
(singly or in the aggregate) have a material adverse effect on
the business, operation, prospects or financial condition of
Mercantile and its Subsidiaries taken as a whole, nor is
Mercantile or any of its Significant Subsidiaries in violation of
any statute, rule, regulation, order, writ, decree or injunction
of any court or governmental agency or any body having
jurisdiction over them or any of their properties which, if
enforced, would have (singly or in the
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aggregate) a material adverse effect on the business, operations, prospects or
financial condition of Mercantile and its Subsidiaries taken as a whole.
f. Except as received prior to the date hereof, no
notice to, filing with, exemption or review by or authorization,
consent or approval of, any public body or authority is necessary
for the consummation by Mercantile or Merger Sub of the Merger as
contemplated by the Agreement.
g. To the best of our knowledge, the authorized and
issued capital of Mercantile conforms to the description thereof
contained in Section 4.1 of the Agreement. To the best of our
knowledge, except as set forth in the Agreement or in the
Schedules thereto, there are no options, warrants, scrip, rights
to subscribe to, calls or commitments of any character whatsoever
relating to, or securities or rights convertible into, shares of
any capital stock of Mercantile, or contracts, commitments,
understandings or arrangements by which Mercantile is or may
become bound to issue additional shares of capital stock, or
options, warrants or rights to purchase or acquire any additional
shares of capital stock of Mercantile. To the best of our
knowledge, all of the issued and outstanding shares of Mercantile
Common Stock are validly issued, fully paid and nonassessable by
Mercantile and none of such shares have been issued in violation
of any preemptive or similar right of any shareholder of
Mercantile. The shares of Mercantile Common Stock issued
pursuant to the Agreement are duly authorized, validly issued,
fully paid and nonassessable by Mercantile, and none of such
shares are subject to preemptive or other similar rights.
h. To the best of our knowledge, neither Mercantile nor
Merger Sub is the subject of any order, decree or injunction of a
court or agency of competent jurisdiction which enjoins or
prohibits the consummation of the Merger.
i. To the best of our knowledge, there is no litigation,
proceeding or controversy before any court or governmental agency
whether federal, state or local, pending or threatened, that is
likely to have a material and adverse effect on the business,
results of operations or financial condition of Mercantile and
its Subsidiaries, taken as a whole.
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